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Subject Area: Economics
Topic: Free Trade

ESSAY No. CXX. - 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. CXX.

january 18, 1832.

Vested Interests; true character of. The poor have as much right to be protected in theirs, as the rich have.

WE hear a great deal said about vested interests in manufactures; and when a poor man complains that he has to pay a tax of a hundred per cent. on his coat, which he wants to get clear of, he is gravely told that he cannot be exempted from that tax, because it will interfere with the vested interests of his rich neighbour, the manufacturer. Now we should like to know whether, in a free country like this, and under a government instituted for no earthly object but to establish equality of rights and equality of protection—we should like to know, we say, whether a poor man has not a vested interest in a cheap coat, and whether his vested interest does not as much entitle him to the care and consideration of the government, as the vested interest of the manufacturer? If not, we should like to see the reason pointed out. It may be said, perhaps, that the rich man’s interest is a large one, whilst that of the poor man is a small one. True; but is justice, in a free country, to be meted out to men in proportion to their wealth? Is the poor man less entitled to his own than the rich man? No one will, certainly, dare to reply in the affirmative, whatever he may think: but should there be any who entertain views so unjust, we will meet them with an argument which they cannot gainsay. It is this. The aggregate of the vested interests of all the poor men in cheap coats, is greater than the aggregate of the vested interests of all the rich men in the manufactories which produce cloth for those coats. The money taken out of the pockets of all the poor men, in the shape of a tax upon their coats, is equal to what goes into the pockets of all the manufacturers, in the shape of bounty for their cloth, and what goes into the treasury besides. If for every ten dollars the manufacturers receive in the shape of bounty, one is paid into the treasury upon foreign cloths, in the shape of duty, it is evident that the vested interests of the manufacturers are only equal to ten dollars, whilst that of the wearers of coats is eleven dollars.

Now here, it will be seen, are vested interests of opposite character; and the question ought to be, which is the interest which has the highest claim for protection? Is it the one which exists of natural and political right, or is it the one which was only brought into existence by a violation of natural right, and which can only be continued by a perseverance in that violation? The case appears to us to be not at all different from those which every day are presented before our courts of justice. A man having a vested interest in what is called a purse, is robbed on the highway, whereupon the robber vests the said interest in himself, and whines most piteously at the idea of having to give it up. No doubt, if he could be tried by a jury of robbers, they would decide that his vested interest ought not to be disturbed. But as juries are generally composed of different materials, their view of the matter is different.

In the United States every citizen, whether he be high or low, rich or poor, gentle or simple, nabob or working-man, has a vested interest, by the nature of the government, in exemption from all taxation, except for the support of government. Of this vested interest he cannot be deprived, but by a wrong; and if he has been once deprived of it, it is infatuation to say that he ought not to be reinstated in his rights, for fear of doing injury to the wrong-doer—not, indeed, by making him disgorge all the accumulated fruits of his injustice, as strict retribution would require—but by putting an estoppel on his continuance to do wrong. As well might it be urged, that the robber above refered to should not only be excused from giving up his plunder, but that it would be an act of oppression to deprive him of the privilege of robbing the same man every time he passed over Hounslow Heath. Turn it as you please—examine it over and over—and it cannot be controverted, that a man who has a vested interest in his pocket, in the shape of a silver dollar, has a greater claim upon the government to enable him to keep it there, than any other individual has upon that government to enable him to extort it from its possessor without an equivalent. This is the doctrine of vested interests. and as it is a matter which has deceived many, as to its true character, we shall endeavour hereafter to throw more light upon it.