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Subject Area: Economics
Topic: Free Trade

ESSAY No. XVI. - Condy Raguet, The Principles of Free Trade [1835]

Edition used:

The Principles of Free Trade illustrated in a series of short and familiar Essays originally published in the Banner of the Constitution, 2nd ed. (Philadelphia, 1840).

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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


ESSAY No. XVI.

february 17, 1830.

Remarks on an essay of Publicola. No one branch of industry can permanently be more productive than another. Want of employment cannot long exist in the United States, whilst vacant lands are so abundant. Domestic manufactures shewn to have flourished in the United States long before the protective system was introduced.

THE period will some day arrive, when the nation will awake as from a dream, from the delusion under which she has so long laboured, and when it will be hard to make people believe, that such absurdities as those upon which the “American System” is founded, could ever have had an existence amongst that class of persons who are reputed to be the intelligent, and who are the influential. So firmly are we persuaded of this, that, valuing somewhat our labours in the cause of sound doctrine, and not being disposed, some ten years hence, should this paper then continue to exist, to be looked back upon as a combatant of theories not seriously entertained by the community, we deem it expedient to bring into the columns of our paper, an occasional sentiment from some of the most conspicuous writers on the side of the question which we oppose.

Amongst these writers, is one, who, under the signature of “Publicola,” last year published in the New York Morning Herald a series of essays, “On the policy of manufacturing in this country.” This writer, like all the rest of his co-labourers, founds the greater part of his arguments upon assumptions which are not admissible, and consequently, whilst he draws conclusions which may be satisfactory to himself, they cannot be so to those who deny his premises.

Upon this occasion we will quote a paragraph or two, from his tenth essay, which our readers will find to contain a specimen of the sort of reasoning so constantly resorted to to effect a perpetuity of the same miserable policy, as that under which the nation is now suffering. It commences thus:

“If productive labour be the only source of wealth, and manufactures afford the second best source of labour, positions that will not be disputed by any one capable of giving them a disinterested consideration, it will follow, that every wise government, having a population sufficient for the object, will grant such protection to manufactures as will permanently establish them in their country.”

The foregoing would pass with some people for sound doctrine. We shall show that it is not so, and we deny, in limine, the position, that “manufactures afford the second best source of labour.” There can be no such thing as a permanent superiority of one branch of business over another; for if capital and labour, devoted to agriculture, were, for any great length of time together, more profitable than capital and labour employed in other pursuits, persons would leave the latter pursuits, and fly to the former, until the equilibrium should be restored. The idea, therefore, of classifying pursuits, and laying it down as an axiom, that commerce, or agriculture, or manufactures, if left to themselves, is a more profitable branch of industry than the others, is at once denying one of the fundamental principles of the science proposed to be discussed; and if the corner-stone of the building be feeble—if it be neither plumb, square, nor level, how can the superstructure be strong?—If, however, it were true, as laid down, that “manufactures afford the second best source of labour,” it would follow, that that government would act most wisely, which should leave the manufacturers in the full enjoyment of their relative advantages. No artificial stimulus would be required to induce those who followed the third best source of labour, to abandon it, inasmuch as sufficient inducement would be held out, by the superior profits of the second and first. We think, therefore, that the conclusion, in this case, is not one which would legitimately flow from the premises, admitting them to be sound; but having shewn that they are not sound, it follows that every deduction drawn from them must be fallacious.

“It will not be denied that we have at this moment a considerable surplus population who cannot find employment. Our government, therefore, have no ground on which they can predicate a plea for lessening the manufactures at present established; in fact, if we look around us, and note the increasing numbers applying in vain for labour, we must be convinced that, instead of curtailing the modes of employment now existing, it is the imperious duty of our government to open still further sources. If they neglect to do this, that portion of the population now daily petitioning for labour must rapidly increase, and instead of becoming productive citizens, will rely solely on the cold hand of charity for relief, thereby draining the pockets of their more successful neighbours, and entailing on the country an increasingly extensive class of reckless paupers.”

The doctrine, that there are in the United States a vast number of persons who cannot procure employment, has long been a favourite one with the restrictive party. If there be however any truth in the position, they may thank their own policy for it. Restrictive laws retard the accumulation of capital, and as capital is the only source of affording employment to labourers, it is manifest that any measure which diminishes the ratio of accumulation, must have the effect of throwing people out of employment. To attempt to cure such an evil, therefore, by further restrictions, would only be making the matter worse, as it has been made ever since the year 1816, and would be as silly, as if the quack, who had brought his patient to death’s door by debility from bleeding, should insist upon it that the way to cure him would be to apply the lancet again.

But, after all, it is not true that any great portion of people are permanently unemployed. The number of able-bodied paupers throughout the United States has not sensibly increased. In large commercial cities, such for example as New York, there may be much temporary distress from the want of employment, because the population of those cities, being driven from their accustomed vocations by the anti-commercial policy, have not yet had time to fall into new pursuits. But we maintain that such a thing as a permanent want of employment, in a country where there are tens of millions of acres of fertile land, to be had for a dollar and a quarter an acre, cannot exist. This is a conclusive argument on the subject, and we will venture to affirm, that there is not a miserable weaver in Spitalfields who would not consider himself as independent as a prince, if he could be transported to such a country. Agriculture, it may be said, will be overdone. We answer, plenty of bread and meat, plenty of warm clothes, plenty of fuel, and plenty of log houses, can never be overdone; and if a man cannot secure these by working with the spindle or the loom, he can never fail to secure them with the axe, the spade and the plough.

“To establish manufactures in any country not before possessing them, it is necessary they should be, during their infancy, supported by high protective duties—duties at least equivalent to the difference in the value of labour, price of raw material, deficiency of capital, and want of skill. Without such protective duties, no new country can ever enter into competition with another where manufactures have been long established. It is folly to talk of a middle course; a protection fully equal to the difference must be granted, or our manufactures must decline, till the reduction in wages and raw material enable those engaged in them to resume operations.”

To lay down what rules would be necessary for the introduction of manufactures into a country where there were none before, would hardly seem to be necessary in a code of laws intended for this country, where manufactures not only exist, but where they have existed since the first settlement of the colonies, to an extent adequate to furnish nine-tenths of all the manufactured commodities consumed by the nation. According to Seybert’s Statistics, page 8, it appears that the amount of articles manufactured in the United States in the year 1810, was one hundred and ninety-eight million six hundred and thirteen thousand four hundred and seventy-one dollars. Our population, at that time, was seven million two hundred and thirty thousand nine hundred and three souls, and the “American System” had not yet begun to protect the industry of the country, and can therefore lay no claim to an agency in establishing manufactures before that period. This fact ought of itself to overturn the theory of this writer, and would be conclusive on the subject, if facts were allowed to weigh with those who are under the influence of the delusion to which we have above adverted.