always hard to measure. The increased benefit is concen trated in a few industries and accrues to a comparatively few producers. Here is a recipe for riches: get everybody to give you a penny ; it's so little that no one will miss it, and it will mean a great deal to you. Something like this happens in the case of many protected industries; every consumer of the article pays a few cents more, a small group of wage-earners temporarily gains, and a few enterprisers wax wealthy.
§ 9. Tariffs and unemployment. The claim that a low tariff is bad for the workers is made with peculiar success in any period when unemployment is greater than usual. It is usually unconvincing to reply that again and again equally bad periods of unemployment have occurred when a high tariff was in force, and that often the most highly protected industries are most affected. It is unconvincing to suggest that fluctuations of unemployment are related rather to the rhythm of industrial cycles and panics, than to any partic ular level of the tariff, whatever it The fact that at the moment is seen is that here are some men for the time out of work, and here are some foreign goods coming in. Of course, what is not seen is that if we stop importing goods we thereby eventually will stop the exportation of goods of equal value now being sent in payment, and this must throw as many men out of jobs as we helped into jobs by raising the tariff. But the view easy to take is the short view, and the ulterior consequences seem to the popular mind to be vain imaginings.
An explanation of periodic unemployment involving the same error in a smaller degree is to attribute it to immi gration. It is true that after a crisis has occurred, and during the period of widespread unemployment, limitation or prohibition of immigration may prevent aggravating the evil at the time. But immigration as a continuing policy is not the cause of periodic unemployment, but its bad effects will rather be shown in the permanent lowering of the general a See on wages in times of crises, ch. 10, § 6 and § 7; and on tariff changes, ch. 10, 4 11 and 13 below.
level of wages.' But, whatever be the general level of wages, periods of unemployment will recur as long as means have not been found to control marked credit and price fluctua tions within the business cycle.
§ 10. Exports and exhaustion of the soil. It has been in geniously argued that a tariff may keep some of the natural agricultural resources of a new country from becoming quickly exhausted. The export of food takes out of the soil and out of the country fertile qualities never to be returned. The shipment of several hundred million dollars worth of food products year after year represented a tremendous drain from the soil of the United States, but this has now largely ceased.
The assumption, however, that the use of the food in this country preserves the fertility of our own fields is in the main mistaken. The fertile material in the food for human con sumption hauled to a town five miles away from the field is almost as entirely lost as if it were shipped to Europe. En gineering skill has as yet succeeded in returning economically to the fields from which it comes hardly a fraction as much fertile organic matter as that which flows into the sewers, that is dumped into river and ocean, and that is buried in heaps at the borders of our own cities. Artificial fertilizers are increasingly used, to be sure, but they are obtained in other ways. On the other hand, the increased use of iron, coal, and timber, as a result of encouraging manufacturers, has very effectually hastened the exhaustion of the natural resources of the country.
§ 11. Protection as a monoply measure. It has rightly been observed that a new country has a limited potential monopoly in certain kinds of products and that a tariff may make it effective. The rapid opening up of America with its rich natural resources greatly benefited the average consumer in western Europe, although it caused a loss to a special class of Whether the citizens of the 10 See ch. 25.
older or of the newer country shall reap the greater benefit in the trade depends on the reciprocal demand for the two classes of goods, as was seen in discussing the equation of in ternational demand. A wide margin of advantage may go to one party and a narrow margin to the citizen of the more fa vored land. To put it concretely : America, having great natural resources for agriculture, might continue to trade food for manufactured goods even though England reaped most of the benefits of the trade. An American tariff on manufactures from England would, under such conditions, check the demand for English products and compel some Americans to leave farming. This reduction of the Amer ican supply of wheat or corn and of the American demand for English manufactures compels a new ratio of trade (ex pressed in prices). It is conceivable that trading fewer goods with a larger gain on each trade would give a larger total of gain to the favored nation. Thus, foreigners may conceivably be compelled to pay a part of the tariff duties to enjoy the favored market. This is but a special case of the monopoly principle; the government by law artificially limits the supply of goods offered by its citizens.