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ESSAY No. XXX. - 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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ESSAY No. XXX.april 17, 1530. Importance of the study of Political Economy. Duties imposed by the act of 1790 upon various commodities. Fallacious reasoning, employed to shew that free trade has diminished the navigation of England. THE following article we have copied from a Philadelphia paper: “We have lately seen some statements made at a meeting of the Hull ship-owners in England, held ‘to take into consideration the ruinous effects of free trade.’ The results in England for the last six years, are as follows:
The great superiority of an acquaintance with the science of political economy, over mere political arithmetic, consists in this, that the former teaches the nature of the causes which are calculated to produce particular effects, whilst the latter contents itself with a mere collection of statistical facts, which, in themselves, prove nothing, except so far as they are demonstrated to be the results of known specific causes. Hence, when correct statistical tables are exhibited to the political economist, he is, from a knowledge of the causes which are capable of producing such results, enabled to assign to them their true origin. He is not left in doubt as to what might, or what might not have produced the various phenomena which are constantly observable in the operations of commerce; and as he is as well acquainted with the effects which will result from any proposed measure before it be adopted, as if he had all the advantage of experience to support him, he is better qualified to administer the affairs of a government, than one who is not capable of judging of the tendency of a measure until after it has been tried, and who, even then, is not capable of seeing that an effect of his own producing did actually flow from his agency. Prior to the year 1816, the American Government was in the hands of political economists. The people themselves were political economists. During the early period of our existence as an independent nation, there was not a farmer in the whole country with intellects so obtuse, as not to be able to see, that duties upon foreign goods were taxes upon those who consumed them—that high duties would diminish their consumption—and that, consequently, they could not sell as much flour, and grain, and beef, and pork, to foreigners, as if we purchased more of their productions. This sagacity was so strong and clear sighted, that it required great management in the government to coax the people to consent to pay the most moderate duties on imports; and hence we find, notwithstanding the whole weight of the Revolutionary debt, duties of from 5 to 10 per cent. upon the necessaries of life, were all that the members of Congress found it politic to impose upon their constituents. The following are some of the duties imposed by the act of 1790.
As soon, however, as personal and party politics assumed in the estimation of the people a character of more importance than measures of state policy—as soon as the people began to think that the elevation of particular individuals to office was of more consequence than the advancement of the interests of the nation; as soon, in fine, as principles were sacrificed to a blind devotion to men, then the government fell into the hands of the political arithmeticians; and we accordingly find, that since 1816, the majority in Congress has uniformly relied upon figures and statistical calculations, rather than upon reasoning, for the support of their measures. Now as this class of politicians begin to reason at the wrong end—as they make principles accommodate themselves to figures, and do not see that figures must accommodate themselves to principles, they are not capable of drawing correct conclusions from any given premises. This has been remarkably the case in reference to the statement given above from the proceedings of the Hull shipowners. They ascertained, that the value of the cotten, linen, woollen and silk manufactures exported from Great Britain in 1827, 1828 and 1829, was less than the amount exported in 1824, 1825 and 1826; and inasmuch as the principles of Free Trade had been partially adopted within the last six years, they conclude that this falling off in exports has resulted from the adoption of those principles. If they had ascribed it to any other cause, such as the war in Greece, the death of the last Pope, the earthquakes in Chili, the restoration of absolute government in Portugal, or, the immense flocks of wild pigeons that some time ago flew over a part of Pennsylvania, all of which events occurred within six years, their reasoning would have been quite as logical. Each of these occurrences is just as capable of producing the falling off in the exports referred to, as the adoption of the principles of Free Trade; and had these ship-owners of Hull used a little common sense, and before they drew their conclusions endeavoured to reflect a moment whether it was possible that a policy which increases imports could diminish exports, they would not so readily have exposed their ignorance in the public prints. They would have gone to work in another way, and they would have soon discovered that their figures, in the hands of those who know how to trace effects up to their producing causes, and to discriminate between what can and what can not produce a particular result, would lead to very different conclusions. We are not sufficiently acquainted with all the circumstances which in England may have combined to occasion this diminution in the value of exports; but, assuming that the statements are correct, we can, at the first blush, name two, either of which was capable of itself of producing the whole, or nearly the whole, of the reduction. The first is, the great diminution in the prices of cotton, linen, woollen, and silk manufactures, which has taken place within the last three years. The falling off in the exports as stated is, upon an average, a little less than 15 per cent. Now it is manifest, that if the diminution of the cost of production has been equal to 15 per cent., a diminution in the value is no evidence of a diminution of quantity. But what has been the fact in relation to the cost of producing these manufactures? Why, that the reduction has been greater than fifteen per cent. In cotton goods, it has been 20 or more; and in woollens, it has been probably as much, owing in both cases to a fall in the price of raw materials, improvements in labour-saving machinery, &c.; and if the tables of quantity could be referred to, we will venture to assert, that, although the value exported may have been diminished, yet that the number of yards must have been greatly increased. The second is, the restrictive laws of other nations, which have had a tendency to diminish the demand for British goods, and which might have occasioned a great reduction. Within three years, there have been great changes in this respect, in the countries to which Great Britain exports a large portion of her manufactures. In the United States we have, as is well known, imposed restrictions upon the importation of British goods, to a very great extent. In Mexico, cottons, which constitute the great mass of the exports of the above table, have been totally prohibited, whilst other articles have had the duties increased. In Peru, a similar prohibition of cotton goods at one time, in 1829, existed. In Colombia, a general raising of duties took place in the same year; and, in addition to this, the wars which have raged within the last three years in all the states of South America, without a single exception, have all had a tendency to prevent that increased demand for British manufactures, which would otherwise have taken place. Such would be the deductions of sound reason; but the ship-owners of Hull, like the philosophers of the American System, undertook to reason upon a subject the nature of which they did not understand, and thus involved themselves in the folly of complaining of the very policy which could not fail to promote the navigating interest. |
