Edmund Janes James

“ The protective party has been the national party during a time when the greatest question before the American people was whether it was to be one nation, or two, or twenty, and it naturally profited by the inevitable victory of nationalism; it has always stood for honest payment of national and state debts, if not in the standard according to which they were contracted, in a still better one, and it has profited naturally by this attitude in a country where the development of trade and industry was rapidly and steadily towards a capitalistic state of society in which such policy is favoured ”

“ PROTECTION, in economics a system of commercial policy and a body of doctrine, which in their modern forms are the outgrowth of the commercial and industrial development of the 19th century. The common definition of protection as a policy is the attempt to develop a manufacturing industry by a system of discriminating duties upon manufactured goods imported from foreign countries. ”

“ In short, whatever one may think of the wisdom or folly of trying to develop national industry by a system of discriminating duties, the protective party as such in the United States has been on the progressive side of so many of the deep questions of national importance that it has obtained and kept the allegiance of thousands of men who would have been glad to see a change, or indeed a reversal, in the tariff policy of the party. ”

“ Industry and commerce began to thrive as never before, largely because of the absolute free trade which the Constitution had secured among the states of the Union. The long struggle between France and Great Britain, extending from 1806 to 1812, for the possession of the commerce and the trade of the world, combined with the retaliatory measures 'of the American government itself, practically destroyed American commerce for a time, and finally led to the British-American War of 1812, which closed in 1815. ”

“ To the cosmopolitan system of Adam Smith, List opposes the national system as a preliminary and necessary stage. He favours the imposition of duties as the most efficient means of effecting the protection which he has in mind. Agriculture will be sufficiently protected by the constant demand for its products. The essence of his larger work is contained in a pamphlet published in Philadelphia in 1827, entitled Outlines of American Political Economy. It is, in fact, a series of letters advocating the further development of the protective system already adopted in the United States. ”

“ The financial system of the Federal government during this war was based on getting the largest returns from the customs, so that the duties were screwed up still higher. The ten years period of non-intercourse, while it had seriously injured American commerce, had fostered the growth of American manufacturing; and when the close of the War of 1812 brought with it an enormous infiux of foreign goods, particularly from the plethoric warehouses and factories of England, it looked for a time as though the new American industries were' destined to vanish as rapidly as they had grown up. ”

“ This party was found in the protectionist elements, which have thus again become the national party in a state which was being rapidly nationalized; the industrial party in a society which was rapidly passing from the agricultural to the industrial condition; the capitalistic party in a society which was rapidly becoming capitalistic in all its tendencies. It stood for industrial and commercial, as well as political, independence of other countries, and thus satisfied the longing for national unity and independence of a people which had suffered for centuries from disunion and dependence. ”

“ The present development of the system and theory of protection is a result of the growing predominance- of capitalism in modern society, combined with the tendency of modern politics towards the organization and development of great national states, with the resulting desire to secure their industrial as well as their political independence. ”

“ Economists of other schools, with the exception of the more rigid British free traders, have allowed a relative validity to the doctrines of List; and even among older British economists, Mill and some of his disciples conceded the logical possibility of quickening the development of an industry by import duties in such a way as to result in more good than harm, though they have hardly been willing to acknowledge that it is practically possible. ”

“ The modern historical school of political economists have generally admitted the reasonableness of protective policies at certain times and places, though usually finding the justification in political and social considerations rather than in economic. ”

“ Protection is a means of educating a nation, of advancing it from a lower to a higher state. He admits that it may involve a loss, but only in the sense that money expended for an education or an educational system is a loss, or that money spent for seed corn is a loss. ”

“ It has been further favoured in certain ways by the fact that the hnancial needs of modern states require a resort to indirect taxation, thus making it easier for the capitalistic forces to exploit the tax system for their own benefit; while the wars of the 19th century have favoured in many ways the tendency towards the adoption of special means, like high discriminating duties, to accomplish this end. ”

“ These two examples may serve to explain how the two most powerful industrial nations next to Great Britain became and remained highly protectionist in sentiment and in action, and how they both opened the 20th century with a more openly declared and a more fully developed system of protection than ever before. ”

“ Protection as a theory or doctrine is to a certain extent an outgrowth or modification of the old doctrines of mercantilism. In its modern form, however, it dates really from the celebrated report on manufactures made by Alexander Hamilton when secretary of the U.S. Treasury in the year 1791. The views there advanced have Modern Advocates and Critics. ”