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Subject Area: Economics
Topic: Free Trade

ESSAY No. CII. - 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. CII.

may 11, 1831.

Error of ascribing the fall in the prices of goods to the Tariff. True cause pointed out.

THE advocates of high duties upon the necessaries of life—that is, the friends of the ‘American System’—are constantly crying out that the protecting policy has made the protected articles cheap. They tell us so because they have observed that prices have fallen, whilst duties have increased; and, not being able to discriminate between a cause which is capable of producing a particular effect, and one which is wholly incapable of producing it, they adopt crude and confused notions, which prevent them from thinking correctly. In a conversation, the other day, in a stagecoach, with a Pennsylvania farmer, upon this subject, he said, that it was enough for him to know, that, since the Protective System had been adopted, cotton goods, iron, and glass, were much cheaper than they were before it was adopted. We asked him if it had never occurred to him that the fall he spoke of, and which we fully admitted, had been occasioned by the late eclipse of the sun? that being a cause quite as capable of producing such an effect as high duties. We asked him if he had not noticed that coffee, tea, chocolate, spices, silks, wines, copper, tin, crockery, and a hundred other things, which we do not pretend to manufacture or to produce ourselves, had also fallen in price?—and, if so, upon what ground could he take it for granted that the tariff had occasioned the fall upon the articles he had specified? The real truth is, that, so far from the fall in the price of the articles which enjoy the highest protection having been occasioned by the high duties, the fall invariably preceded the increased duties. Cotton goods did not fall after the year 1816, in consequence of the duty imposed in that year, but the duty of that year was imposed in consequence of the fall which had taken place in 1815, and which rendered the then existing duty inadequate as a prohibition. Again, they did not fall after the year 1824, in consequence of the further increase of duty of that year, but the additional duty of that year was imposed owing to the vast improvements in labour-saving machinery, introduced into the cotton manufactures of England. A further diminution of the price abroad led to the increase of duty in 1828; and the only reason why we do not hear a clamour for more protection, is, that the duty is now prohibitory upon all the low-priced goods—and, consequently, the American System operates with its full force upon that one article.

The same facts exist in reference to all the other articles which enjoy the greatest degree of prohibition in their favour. Causes of a general nature, operating throughout the industrious world, have, happily for the human family, enabled a day’s work to produce more than it formerly could be made to produce, and the effect of this has been a decline of price, which brings the article to the consumer at a less cost of labour than it used to cost him before. Four yards of common muslin, which, at 25 cents a yard in 1815, would have cost a day’s labour, can now be had for less than half a day’s labour, and, were it not for the American System, could be had for one-third of a day’s labour. Is any one so blind to his interests as not to perceive that “cheapness” and “dearness” are nothing but other terms to express a greater or less degree of labour? and is any one so stupid as to prefer to toil a whole day to procure what it is possible for him to procure by half a day’s work? In a community like ours, one would suppose that the answer to this question would be a negative one. Unfortunately, however, it is not so. The prevailing doctrine, in Pennsylvania and several other states, is, that the more laborious the process by which a commodity is obtained, the better. It is better, say they who are under the delusion of the American System, to give two prices for a ton of iron, or a bushel of salt, or a pound of sugar, or a yard of cloth, than one price. It is better, say they, to have one coat than two coats, to have one plough than two ploughs, to have one loaf than two loaves. Or else, why, in the name of common sense, when Providence places within their reach double quantities of things, in exchange for their labour, do they reject the gratuitous offer, and, like idiots, prefer the smallest quantity? Such infatuation is incomprehensible; but, as Pennsylvania has exhibited, upon several occasions—as, for instance, when under the influence of the forty-bank mania, and the Redhefferian system of perpetual motion—an equal degree of delusion, which ultimately passed away, we have no doubt that, when her present selfish politicians begin to lose their popularity, as all have done who have gone before them, the people will come to their senses, and no longer insist upon it that the proper way to make a people prosperous is to make them pay dear for things which it is possible for them to get cheap.