PROTECTION is a term in political econ omy, employed to describe the policy of indi rectly promoting the growth of national indus tries, either to secure the defensibility of the country in time of war, or to promote its gen eral welfare, or both. It differs from Socialism in seeking this by indirect means, and with the minimum of interference with individual free dom, recognizing that the true function of gov ernment is to steer the ship of state in indus trial matters, and not to propel it. It differs on the other side, from free trade, which excludes government from any kind of activity in the in dustrial sphere, and especially objects to any legislation which will have the effect of divert ing capital and labor into channels in which they would not otherwise flow.
More than one way to this end has been used, such as the absolute prohibition of speci fied imports, premiums upon exports, bounties upon home production, and the retention of raw material. But the usual way has been to impose, upon the competing product from abroad, a duty sufficient to discourage its use and to make it unprofitable to the dealer. Such duties are either ad valorem or specific. The former are levied upon the value of the imported commod ity, and are either directly or tional to that value. Thus the duties imposed by the British Corn Laws rose as the price of wheat fell, and the converse. Specific duties are those which tax the commodity by number, weight or bulk, irrespective of differences in value. For protective purposes they are pre ferable.
From the rise of national feeling in Europe, at the close of the Middle Ages, to the Con gress of Vienna in 1815, all governments pur sued the policy of protection to home industry. Among economic theorists a protest against this was begun by the French Economistes (Gour nay, 1754; Quesnay, 1758; Turgot, 1766). It found its finest exposition and defense in their Scotch disciple, Adam Smith (1776), who con tended that the interplay of self-interest is quite sufficient to secure the best industrial develop ment, and that when every man is left to “do as he will with his own ,D he will do what is best for society. The antipathy of Napoleon I to this theory, and the questionable means he em ployed to counteract it in his Continental Sys tem, seemed likely to give it a chance of being applied in the states represented at the Con gress of Vienna. But a few years of actual ex
perience satisfied the rulers and cabinets of the Continent that the path to national prosperity did not lie in' that direction. They returned to protection, which England and France, indeed, never had abandoned, and which Germany made effective for the whole country through the Zollverein (1817-33).
It was in the United Kingdom, in 1846, after eight years of popular agitation by the Anti Corn-Law League, that a European government first took steps to abandon Protection, and that after 510 years of it had lifted England out of the dire poverty of a merely agricultural coun try, into the first rank among manufacturing nations. And even she continued to protect her silk and glove industries against French com petition, until the Cobden Treaty of 1860 agreed to the abolition of these duties.
Twenty years later there began a reaction against free trade, which is now supported by the Conservative party. It grew out of the fail ure of that policy to obtain the support of other countries, and the rapid growth of France, Ger many and America in commerce and manufac tures under protection, while England became more dependent upon the rest of the world for food, and was obliged to keep up a great navy that her ports might be kept open in case of war with any one or several European powers. The outbreak of war in 1914 empha sized this necessity. The destruction of many merchant vessels by German submarines, and the diversion of others to transport use, reduced her means of bringing food from abroad, so that importations are limited by royal order to things thought necessary. Even strenuous free traders now recede from the principle adopted in 1846, and propose that home production shall be fostered and importations restricted by im posing duties on these. In this they revert to therinciple laid down by Nassau W. Senior in that the economist has no right to dictate the policy of the statesman, since economic rea sonings arc only a part of the considerations which should influence him.