The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction.
• Taxation and Work.
• Chapter I.: Occupations. Distribution of Products.
• Chapter II.: Taxation Measured By Work.
• Chapter III.: Taxation Measured In Money.
• Chapter IV.: Principal Sources of Revenue.
• Chapter V.: How the Tariff Should Be Reformed.
• Chapter VI.: Taxation Which the Government Does Not Receive.
• Chapter VII.: British Tariff Reform.
• Chapter VIII.: Beggarly Compensation of United States Officials.
• Chapter IX.: What Is Protection?
• Chapter X.: Occupations That Cannot Be Protected By Duties On Imports.
• Chapter XI.: Method of Tariff Reform.
• Chapter XII.: Protection By Exemption From Taxation.
• Chapter XIII.: Free Trade the Objective Point.
• Chapter XIV.: Attempted Definition of the Principle of Protection By Senators Sherman, Hoar, and Aldrich.
• Chapter XV.: Hamilton’s Policy.
• Chapter XVI.: Tariff Protection Does Not Raise Wages.
• Chapter XVII.: Protection Promotes War; Free Trade Promotes Peace.
• Chapter XVIII.: Does Tariff Protection Promote Liberty?
• Chapter XIX.: Progressive Reduction of Duties.
• Chapter XX.: Cost of a High Tariff.
• Chapter XXI.: Development By Free Commerce.
• Chapter XXII.: High Wages and Low Cost.
• Chapter XXIII.: The Use of Machinery By Nations.
• Chapter XXIV.: The Waste of Armies.
• Chapter XXV.: Senator Morrill’s Report On Canada Received. Food and Wages.
• Chapter XXVI.: In the Matter of Silver, Bi-metallism, and Free Coinage.
• Chapter XXVII.: Volume of Trade.
• Chapter XXVIII.: Taxation By Bad Money.
• Chapter XXIX.: How to Maintain Silver Equal to Gold.
• Chapter XXX.: The Issue Joined.
• Chapter XXXI.: Personal Observations—conclusion.

CHAPTER X.

Occupations that cannot be Protected by Duties on Imports.

The occupations of the people of this country were listed in the United States census of 1880 under four general titles:

This was the force occupied for gain, from whose work the product of the support of a population of 50,155,783 was derived in the census year covered by the census of 1880.

A very slight consideration of the relative numbers in each class of occupations of the people of the different sections of this country will show that diversity establishes itself in the surest manner, the more free the conditions of exchange. The very rapid growth of manufactures and mining in the Southern States since the protective system of slavery was removed, gives the most conclusive proof that all the manufacturing, mining, and mechanic arts develop and grow under a system of free exchange, according to the natural conditions and diversities of each part of the country, and that the less the artificial stimulus given to them the more sure and safe their foundations may be.

It has gradually become apparent, with the development of science and invention, that the rate of wages is not a sure standard of the cost of labor. It is found that rates of wages may be very low, yet the cost of labor in the unit of product may be very high; while conversely it is in fact an established rule that in countries of great productive capacity where machinery has been applied in largest measure, as it has been in the United States, the general rates of wages which are derived from the sale of our products are very high, while the general cost of our production in each unit of product is very low. This rule applies to every art for which the conditions are most favorable, and which is not a mere handicraft. It is not yet a universal rule because its application has been altered by the long continuance of a high tariff, the effect of which has been to depress prices and wages in some arts in foreign countries by obstructing the demand of this country which has the greatest consuming power of any one in the world,—while to some extent making wages variable and uncertain without permanently raising them in this country in the arts of like kind. It is therefore impossible to adjust duties on imports by rates of wages, on the theory that by so doing the cost of labor may be equalized. In nine-tenths of our work our cost of labor is the lowest in the world as our rates of wages are about the highest, therefore the last thing we should seek is to equalize the rates of wages. We must maintain our high rates of wages in order to secure our low cost of labor, so that under Free Trade while all nations profit, yet we may rightly profit most on the exchange of products and services.

In respect to Professional and Personal Service and to Trade and Transportation there can, of course, be no foreign competition and therefore no need of tariff Protection, unless the logic of that system may be held to require an import duty upon immigrants.

In the products of Agriculture this country so far excels all others in its huge abundance produced at high relative wages and low relative cost, that since sugar was put upon free list the articles which could be imported from a foreign country that are also produced by ourselves would represent less than three per cent. of our total product.

Lastly, in dealing with the Manufactures, Mechanic Arts, and Mining industries, in which 3,837,112 persons were occupied in 1880, it is difficult to set apart in a discriminating list over 1,000,000 whose product is such that one of like kind could be imported even if there were no duty upon imports.

To what extent our finished manufactures would be subject to foreign competition cannot be fully determined until the component materials which are of foreign origin are as free from taxation as those of our competitors in Great Britain, Belgium, Germany, and France.

If we apply this method of discrimination, for instance, to the State of Pennsylvania, we may remark that tobacco and wool are the only products of agriculture which could be imported, giving occupation to a small part of a force which numbered

Thus it appears that, even in Pennsylvania, less than twelve per cent. of the people who did the work could, in 1880, be subjected in part to an import of a product of like kind. How can we protect the eighty-eight per cent.?

If the same method of analysis be applied to the occupations of the people of Ohio, of whom

(the divisions in Ohio very closely corresponding to the average of the whole country), we find that even including wool, iron, and every other branch of industry subject to a possible import, yet out of 994,475 who were occupied for gain, it is impossible to set apart 50,000 who could under any conceivable circumstances or conditions be subjected to an import of a product of like kind from any other country, setting aside Canada—the sales of the products of agriculture to Canada being greater than the purchases.