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Subject Area: Economics
Topic: Free Trade

ESSAY No. XCVIII. - 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. XCVIII.

april 20, 1831.

The American System fallacy, illustrated by the motion of a steamboat.

“FATHER,” said a little boy the other day, who was standing on the wharf looking at a steamboat coming down the North river at the rate of nine or ten miles an hour, “only see how fast the tide makes that steamboat sail.” “Don’t you see, my son,” said the gentleman who had him by the hand, “that the tide is running up? Only look at that board floating on the water, and you will see that the power of the tide is to make the steamboat go the other way. What you see is not the effect of the tide; it is impossible that the tide can produce a motion opposed to its own direction.” The little boy replied, “Well, but father, I do not see any body pushing the steamboat, and I don’t know what it can be that makes it go if it isn’t the tide.”

This idea was quite excuseable in a child, but when we see grown persons, or rather big children, entertain the same opinions, we cannot so readily excuse them. The little boy’s argument is the precise argument of the tariff party. The tariff is the flood-tide, the sole tendency and power of which is, to make the prices of commodities go up. The steam-power is the counteracting influence of improvements in labour-saving machinery, and increased skill resulting from the march of knowledge, science, and philosophy, all of which have a tendency to carry prices down, and their combined force being much greater than that of the tariff, they overcome its resistance. When any man, therefore, insists upon it, that the tariff makes prices fall, his powers of reasoning are not one grade superior to those of the little boy above-mentioned, and he may be literally said to cry out, “I don’t know what it can be that makes it go if it isn’t the tide.”

Now any one may see, with half an eye, that if it were not for the opposing tide, the above-mentioned steamboat would have gone much faster than she did; and so it is with the tariff. It prevents things from being as cheap as they would otherwise be, and has had no more to do with the fall in prices which has taken place since the year 1816, than the tide had to do with carrying the little boy’s steamboat against its own current.

We are glad to see that the people are beginning to have their eyes opened on this subject, and, if they would only read over the list of 250 articles published by us, not long since, under the head of “Politics for Farmers,” comprising all descriptions of foreign and domestic productions, every one of which, with only a dozen exceptions, had fallen in price since 1816, whether subject to high duties, or low duties, or no duties at all, they would no longer believe that, when the tide is running up, it can carry things down.