Charles Baron Clarke

“ If we look to the general increase of wealth in England since 1846, the first thing that strikes us is the increase in the tribute, which is about thrice what it was. This increase is largely imperial, i.e. due to colonisation, annexation, etc. But here again we must not overlook the reaction of causes on each other: our Free Trade in corn, our improvements in machinery and ships, have so largely contributed to spread our empire that it becomes impossible to disentangle the separate work, or indeed to speak of any one cause as a simple element: the causes all act together. ”

“ It may be urged against Universal Free Trade that the poor are so ignorant that they would sooner pay sixteen-pence a week in taxes indirectly than eightpence directly. This might prove a fatal objection to carrying out Universal Free Trade at the first attempt; but one of the objects to be gained by direct taxation is the education of the people. It may also be urged that the whole political power being now in the hands of the masses, they are so selfish and unjust that if taxation is made a plain matter they will put all taxation on the rich and refuse to pay anything themselves. ”

“ These two self-evident truths are capable of many applications: we see directly from them that the National Debt, so far as it is held by residents in England, neither diminishes the national wealth nor affects the wages fund. We see also directly that any exchange between an Englishman and a foreigner which gives a profit to the Englishman gives an equal profit to the English nation.
When a merchant buys 1000 quarters of wheat from America and pays in gold, he does so to make a profit for himself; but he cannot make a profit for himself without making an equal profit for the nation. ”

“ Land tied up is always worth less to the owner because it is tied up; and we have seen that the interest of the commonwealth is the sum of the interests of all its component members. When you tell me that an estate is now of small value to its life-owner and unget-at-able for any public purposes, in consequence of a will made by a man who died twenty years ago, it appears to me that you shew me convincingly that we have not Free Trade in land. ”

“ On the same ground of equality of new taxation I should propose to replace the amount now levied in duties mainly by an income tax. That is a perfectly level tax; the idea that temporary incomes ought to pay a lower rate is fallacious. We are all agreed to tax the poor at a lower rate; we have now a section of advanced Radicals proposing to tax the rich at a higher rate. One present candidate for Parliament is even willing to tax people of £100,000 a year and upwards at nineteen shillings in the pound. ”

“ The exact shares in which they divide the profit between them depend on some of the most complicated considerations in the science of political economy. Indeed, political economy can no more work out a case in figures, even when every circumstance is given, than political economy can tell in pounds sterling what should be the rent of a given farm. But the point required for our present purpose is easy and certain,—unless the English buyer got some share in the profit he would not give his gold for the wheat. ”

“ In any great reform of our whole system of taxation a disturbance of existing interests must take place. Though I would not disturb existing interests for the sake of mere equalisation or official beauty of work, I would not let the fear of disturbing private interests stand in the way of any real or important reform. The introduction of Universal Free Trade and the abolition of all duties would be accompanied by a disturbance ”

“ The immense progress made by England since 1846, as compared with the progress of France or of Germany, is often attributed solely to Free Trade. I believe Free Trade has done much for us: but I am sure that our railway superiority (to France, Germany, etc.) has done much also. Probably no one who has not resided some time in a French town (say a station on a main railway 150 miles from Paris as the least favourable case for my argument) can realise the enormous disadvantage by loss of time that a French business man is under, as compared with the Englishman. ”

“ The principle is that each individual can manage his own trade better than Government can manage it for him; that, therefore, Government shall let any individual do his best in trade his own way, knowing that whatever profit an individual makes in foreign trade is an equal national profit.
It may be shortly stated that in the old Protectionist theory, destroyed by Adam Smith, gold was considered to be wealth. Hence, if an individual bought foreign wheat for gold, the English suffered a national loss of wealth, and the foreign nation made a national gain. ”

“ If they were more efficient, nothing could prevent the competition of employers soon giving extra wages for extra value of work.
But it may, finally, be urged that there is surely such a thing as over-production. If there is an over-production of boots, trade is flat, the wholesale dealers find they are making no profit, they stop their purchases, the workmen are thrown out of employ on a large scale. To this the reply is that there is almost a necessary alternation of up and down in every particular trade, whether the efficiency of the workmen is high or low. ”

“ Should the cost of building diminish but a little, the rate of profit of the builders on their own capital (in many cases not one-tenth of the capital they employ) will run up to 20 or 30 per cent, or even more; and at even a 20 per cent profit the bricklayers would find that a perfect rage for building would set in. Every speculative builder in the trade would strain his credit to the utmost, and take up every £100 from his bank that he could induce the bank manager to let him have. ”

“ Professor Henry Fawcett's Lectures on Free Trade is a sound and admirable book: it is occupied a good deal with the practical question why so few foreign nations have adopted Free Trade, and how such foreign nations are to be converted to the orthodox creed of Adam Smith. ”

“ If our stock of gold is at all short our merchants give a little less per quarter for American wheat; the trade is checked; the sensibility of the market—the experience of our corn-traders—is such that the balance is preserved with very slight oscillations. The refusal of the Americans (enforced by an import duty) to purchase our cutlery, etc., does partially check the reflux of gold to this country, and does lower sensibly the price which the Americans get for their wheat from us. Errors in political economy avenge themselves—often fearfully—on their perpetrators. ”

“ If the railway carried me from Exeter to London in five hours for thirteen shillings, what does it matter to me whether the company pays 2-1/2 per cent or 6-1/2 per cent to its original shareholders? In a very few small and special cases we have seen a railway line not pay for the working, and be closed. In a few other cases, where the dividend paid is less than 4-1/2 per cent, it is possible that the utility of the line to the public is less than the loss of the shareholders in a non-paying investment. ”

“ It is true that our object must always be to encourage accumulation, and discourage destruction of capital (expenditure) . Practically, it does not appear that a heavy income tax diminishes the taste for accumulation in England: it does increase the tendency of large capitalists to invest their capital out of England, so as to avoid the State charges on capital in England. But the capital in England and the quantity of English capital invested abroad are already so enormous that the "tendency" of an increased income tax may be disregarded. ”

“ Inversely, when we imported wine or tea, we had to part with a portion of our national purchasing power, while the wine and tea went down our throats, leaving nothing in its place. It appeared clear that for any increase in national wealth the value of the exports must exceed that of the imports. Every well-prepared boy can now show in ten minutes' scribbling in a Government examination the ridiculous folly of the old economists ”

“ It is to be noted that an increase of efficiency in any industry (and very largely in the case of industries producing generally essential utilities) raises real wages in all other industries, and this, whether the particular trade gains (as we have seen it nearly always do) or loses, as is conceivable, though rarely occurring. Thus, if the introduction of a boot-sewing machine lowers the price of boots 50 per cent, this can have no effect in lowering the money wages of farm labourers; and, as a matter of fact, the fall in cost of boots has sensibly improved the position of farm labourers. ”

“ Finally, underlying the whole, and as the prime cause that shall induce capitalists to employ their capital in England rather than to send it abroad, we require the labour of every working man to be in the highest degree efficient: this retards the fall of the natural rate of profits to a minimum, and the attainment of the stationary state. Whatever ideal beauty has been discovered in the stationary state by J. S. Mill, it is pretty clear that England is not approaching it. It is as difficult for us to stand still as it is impossible to go back ”

“ The safe general principle, whether in the sale of horses, the letting of houses, or the letting of land, is that Government should not interfere; or, to speak more correctly, Government interference should only interfere to prevent restrictive covenants and to ensure Free Trade, so that every article (land included) may pass without restraint into the hands of the man to whom it is worth most. The greater the individual profit the greater the national profit. ”

“ Adam Smith and his followers, and still more closely Ricardo, divided their Political Economy into two parts: in the first they consider the wealth of the nation without the "complication" of foreign trade, i.e. they, in fact, contemplate no money or goods as going out or coming in whatever. They then in separate chapters, forming a big appendix, consider the effects of Foreign Trade as a series of exchanges. They do not discuss even the payment of a lump sum of gold to a victorious nation. ”

“ It is a thing that would revolutionise England; and in spite of the superior education of our labourers might lead to a break up of society. Starvation and bankruptcy make any and every man a Radical if not a Communist.
To keep the poor comfortable for the present and for many years immediately in front of us, we require a continual increase in the wealth laid out in England annually in the purchase of labour. ”

“ But it is merely cutting off one's nose to spite one's face. In the exchange of gold for wheat the division of the profit on one transaction is uncertain, but in the long run it is probably about equal between the English and the American merchants, i.e. between the English and the American nations. (I am not overlooking the fact that the ultimate benefit to England is cheap bread; but it is unnecessary in the present argument to follow the food down the throats of the consumers: the wheat is really worth to the corn merchants what they can get for it from the consumers.) ”

“ It may be argued that it would be a healthier economic state if the exports and imports balanced, and if the population of England was no larger than the country itself could grow wheat for, at a price not exceeding 40s. a quarter. However that may be, the important point for the working men of England to mark is, that every loss of rich men resident, every loss of tribute, every reduction of the wage-fund, every pressure on the population to emigrate, everything that leads in the direction of a self-supporting England, means immediate pressure on the poor, with reduction of wages. ”

“ While our railway companies are all spending their money in fighting and in competition, and pay dividends of 4 or 5 per cent, the French railways have their routes settled by Government engineers, and pay 8 or 10 per cent." I am going to propose a plan for stopping all company fighting in England for ever: but—as to the dividend—it can only mean that, like any other Government monopoly, the French public are being made to pay more for travelling than they need. ”