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with England, that it was impossible for manufacturers in this country to pay the American rates and continue to compete with English manufacturers. Later, cause and effect, as related in the earlier syllogism, were reversed, and it was asserted that the high wages in this country were due to protection, from which it followed naturally that in order to raise wages higher, still more protection would have to be given.

We cannot arrive at any useful conclusions concerning wages, however, without considering the efficiency of labor and the productivity or favorableness of the environment in which the laborer works. The reason why American labor may receive higher wages and yet have nothing to fear from the competition of less highly paid workmen in Europe is found in the greater productivity of American labor (though this greater productivity may depend more upon the natural wealth of this country than upon any innate technical superiority of the American workmen). The average American workman is in no more danger from the goods produced by the "pauper labor" of Europe than the highly paid workman of Montana is threatened by the products of his less remunerated fellow-workmen of New England and the South. Labor competes with labor, not with commodities. Consequently, if it is really desired to protect labor, the logical way would be to place a tax on imported labor, or by other measures to reduce immigration. If this were done, those who desire labor would be obliged to pay heavily for it, as actually happened in England after the "Black Death" in the fourteenth century had killed off a large part of the laboring population. Indeed, if our tariff makers are sincerely anxious to benefit labor, they should, after rendering labor scarce and dear by restricting immigration, encourage the importation of such commodities as are consumed primarily by wage earners, in order that labor may secure an abundance of them cheaply.

No intelligent free trader would deny that there are now dependent upon protection many industries which pay high wages, nor that the sudden abolition of protection would throw many wage earners out of work. Their contention in the first case is merely that by taxation and by diverting capital and labor into naturally unproductive industries, protection lowers the general

level of real wages. Their reply to the second point is that protection affects the industrial organism much as the alcoholic habit affects the human organism. To abandon the habit suddenly would certainly be painful and probably dangerous - but this is sufficient reason neither for increasing the dram nor delaying the gradual abandonment of the habit.

(8) Turning to the fiscal aspects of the question, the free trader asserts that there is little or nothing to be said in favor of protection. The protective import duty, as compared with the import duty "for revenue only," is a poor tax. It is uncertain and viciously variable, and in the great majority of cases is borne by the home consumer. To the extent that it does not prevent importation it affords no protection; and in so far as it does protect, it yields no revenue to the government. If it raises the price of the article upon which it is levied, however, the increase constitutes a tax upon one class of society the consumer for the benefit of another class the producers of the article. One authority, perhaps the foremost authority, upon the American tariff problem, estimates that the present tariff upon sugar results in an annual tax upon American consumers of $101,000,000, of which $52,400,000 go into the treasury and $48,600,000 into the hands of sugar producers, principally resident in Hawaii, Porto Rico, and Cuba.1

In answer to this charge that protection involves the taxation of one class for the benefit of another class, it is not sufficient to reply that everybody is free to take advantage of the subsidy and engage in a protected industry. Everybody is not free to establish a rolling mill or a silk factory or a tin-plate plant. Protection means the taxation of the less acute, the less enterprising, the less educated and the poorer classes in order to create additional commercial opportunities for the abler, wealthier, and better-educated classes, thus reversing the whole spirit of modern taxation which contemplates so far as it may be done without danger - rather the taxation of the rich for the assistance of the poor than the taxation of the poor for the benefit of the rich. It is not implied, of course, that protection involves class legislation of an unlawful character, nor that taxes are collected from one class and handed over in cold cash to the members of another class. The point

1 Professor F. W. Taussig, in the Atlantic Monthly for March, 1908, p. 342.

turns upon the relative ability of the various social classes to take advantage of artificial opportunities created by the state at enormous expense to all.

(9) This brings us naturally to the ethical criticism of protection, the charge that by making the temporary prosperity of influential classes dependent upon government bounty, protection encourages those classes to exert a demoralizing pressure upon federal legislation. So great is the stake of private interests in tariff legislation, that systematic lobbying, log rolling, and corruption of the voter follow as inevitable consequences. The beneficiary of the tariff sacrifices his disinterested convictions concerning the general welfare, in order to preserve his own little subsidy from the government. Neither the citizen nor the legislator can vote purely, when his pocketbook is so vitally affected. Even if we admit what is probably true, that protection has resulted in comparatively little direct bribery of legislators, there seems no escape from the conclusion that it creates a kind of interest in legislation which is inherently dangerous and exceedingly difficult to keep within legitimate bounds. And as the manufacturing industries of the country fall more and more into the hands of large corporations and trusts, the possibilities of political corruption become more and more sinister, while the character of the chief beneficiaries of protection make them more and more undeserving of the bounties which they receive.

(10) Finally, it is alleged that protection fosters monopolies by shutting off international competition. This contention forms the subject-matter of a particularly heated dispute, and the exact extent to which the charge is true cannot be determined at this time. Certain modifications of the more extreme charge, however, are hardly open to question. Protectionists confessedly take it for granted that if foreign competition is shut off or lessened, home producers will still compete. Nevertheless, highly protective duties are still levied upon commodities whose manufacture in the United States has fallen under the substantial control of monopolies. It is furthermore admitted that such monopolies frequently sell their products at lower prices in foreign countries than in the United States; while it is impossible to deny that—whether the

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monopoly was created by protection or not the abolition of the duties, by giving foreign producers a chance to compete in this country, would tend to reduce prices, and thus give the American public a valuable ally in their struggle against monopoly. The tariff therefore may or may not be the mother of trusts, but it unquestionably deprives the American people of a strong weapon against the trusts.

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Some General Considerations. Before attempting to sum up the preceding arguments and strike a practical working balance, it is necessary to call attention to certain general considerations which have not figured in the foregoing "starched procession" of pros and cons. In the first place, it is necessary to remember that the federal government must secure a large revenue from tariff duties, and that in consequence the question which we are discussing is not one of protection versus free trade, but of protection versus freer trade. In the second place, the economic importance of the whole controversy has unquestionably been exaggerated. We find a country like England prosperous under free trade; we find countries like France and the United States prosperous under protection. It is of real but not of vital importance. Our internal trade vastly exceeds our foreign trade in every way. The domestic trade of the Mississippi Valley alone is far greater than our entire foreign commerce. In the third place, the American tariff is a historical growth, and bad as it may be in many respects it has taken deep root. During the last century it has become part of our life, and cannot be suddenly eradicated with impunity. If it is true that American labor would be better off without it, it does not follow that it ought to be removed suddenly in the interests of American labor. If the industrial growth is abnormal, it is none the less true that adjustment to normal conditions is a painful process and should be conducted cautiously. Displacements of labor and capital cause suffering and loss, and it is clear that any reform of the tariff must be conservative and careful, a movement toward freer trade, not the sudden withdrawal of protection.

Conclusions. Most of the arguments enumerated above, both for and against protection, contain a measure of truth. Historic.

ally, we believe that protection was inevitable in the United States, and in the early period of the country's development, beneficial. During the three great wars which seriously threatened the stability of this country, many new industries sprang up which, upon the cessation of war and the resumption of international trade, were seriously threatened by foreign competition. Many of these industries were so suited to our soil and our people that only a short period of protection was needed to make them selfsupporting. Under the circumstances it would have been unwise to permit the sacrifice of the capital invested in these industries; and whether it would have been unwise or not, human nature is such that the needed protection was sure to be granted. In short, there is a large measure of real truth in the infant industry argu

ment.

Circumstances, however, have radically changed in the last few decades. Our quondam infant industries have, for the most part, attained a very vigorous maturity, and in some instances have become belligerent and prone to monopolistic bullying; our manufactures have become sufficiently diversified to remove all danger of industrial collapse in time of war; and, above all, we are rapidly entering the economic stage in which, according to the ablest exponent of protection that economic science has ever known, Frederick List, protection is a hindrance rather than a help. That is to say, we are rapidly building up an extensive export trade in manufactured articles; year by year raw materials constitute a larger proportion of our imports and a smaller proportion of our exports; and we have already become the greatest exporting country of the world. All this means that in the near future our manufacturers themselves will look with kindlier eyes upon the withdrawal of the protection they do not need, which in fact actually increases the cost of some of their raw materials, and incites foreign governments to retaliatory taxation upon goods imported from the United States. Our growing export trade will itself bring a wider appreciation of those fundamental principles which have led economists, with but few exceptions, to condemn protection as a permanent policy applicable to all stages of economic development.

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