Nothing could be more prejudicial to England than her restrictions upon the importation of raw material and food.
Union of customs and commercial treaties are the most efficient means of facilitating national exchanges.
But treaties of commerce are legitimate and durable only when the advantages are reciprocal. They are fatal and illegitimate when they sacrifice one country to another; when one country, to purchase advantage for its agriculture, sacrifices a manufacturing industry already well advanced; such a treaty was that of Methuen, a compact in which one party took the lion's share.
The treaty concluded between England and France in 1786 was one of those leonine treaties. And all the propositions made since by England and France to other countries are of the same nature.
If protective duties enhance for a time the price of domestic manufactures, they secure afterwards lower prices by means of internal competition; for an industry that has reached its full development can safely reduce its prices far below those which were necessary to ensure its growth, and thus save to its consumers the whole expense of transportation and the whole profits of trade, which are consequent upon imports of the same articles from other countries.
The loss occasioned by protective duties consists, after all, only in values; whilst the country thus acquires a power, by which it is enabled to produce a great mass of values. This loss in values must be considered as the price of the industrial training of the country.
Protective duties upon manufactured products do not press heavily upon the agriculture of a country. By the development of manufacturing industry, the wealth, population, consumption of agricultural products, rent, and exchangeable value of real estate are vastly increased, whilst the manufactured products consumed by farmers gradually fall in price. The gain, thus realized, exceeds, in the proportion of ten to one, the loss which agriculturalists incur by the transient rise of manufactured products.
Internal and external trade flourish alike under the protective system; these have no importance but among nations supplying their own wants by their own manufacturing industry, consuming their own agricultural products, and purchasing foreign raw materials and commodities with the surplus of their manufactured articles. Home and foreign trade are both insignificant in the merely agricultural countries of temperate climes, and their external commerce is usually in the hands of the manufacturing and trading nations in communication with them.
A good system of protection does not imply any monopoly in the manufacturers of a country; it only furnishes a guarantee against losses to those who devote their capital, their talents, and their exertions to new branches of industry.
There is no monopoly, because internal competition comes in the place of foreign competition, and every individual has the privilege of taking his share in the advantages offered by the country to its citizens; it is only an advantage to citizens as against foreigners, who enjoy in their own country a similar advantage.
But this protection is useful not only because it awakens the sleeping energies of a country and puts in motion its productive power, but because it attracts the productive power of foreign countries, including capital, both material and moral, and skilful masters as well as skilful men. On the other hand, the absence of manufacturing industry in a nation long civilized, the productive powers of which cannot be sensibly excited by the export of raw materials and agricultural products, and, by the importation of foreign manufactures, exposes it to numerous and serious inconveniences.
The agriculture of such a country must necessarily suffer; for the surplus population, which, in a great manufacturing development, finds means of living in factories and creates a large demand for agricultural products, thus affording substantial profits to agriculture, will be reduced to the labor of the fields, and thence will follow a subdivision of farms and a small culture, both as prejudicial to the power and the civilization of a country as to its wealth.
An agricultural people consisting chiefly of proprietors of small estates, can neither fill the channels of internal trade with large quantities of commodities, nor furnish a large consumption for manufactured goods; in such a country, every one is limited almost to his own production and his own consumption. In circumstances like these, no complete system of communications can be established, and the immense advantages which they afford are lost to the country.
Hence ensues necessarily, moral and material, individual and political weakness. The danger is aggravated when neighboring nations pursue a different policy: some making progress in every respect, others retrograding; some hoping for a brighter future, the courage and enterprise of their people being aroused; the absence of hope extinguishing by degrees in others all courage, intelligence, and enterprise.
History is not without examples of entire nations having perished, because they knew not and seized not the critical moment for the solution of the great problem of securing their moral, economical, and political independence, by the establishment of manufacturing industry, and the formation of a powerful class of manufacturers and tradesmen.