William Cunningham

“ Most of the countries of the world are convinced that the wisest economy is to attend to the husbanding of their resources of every kind, and to direct their policy not merely with a view to consumption in the present, but rather with regard to the possibilities of increased production in the future.
This deliberate rejection of the doctrine of free trade between nations, both in its political and economic aspects, has not interfered, however, with the steady progress of free commercial intercourse within the boundaries of a single though composite political community. ”

“ The doctrine of free trade maintains that in order to secure the greatest possible mass of goods in the world as a whole, and the greatest possibility of immediate comfort for the consumer, it is expedient that there should be no restriction on the exchange of goods and services either between individuals or communities. The controversies in regard to this doctrine have not turned on its certainty as a hypothetical principle, but on the legitimacy of the arguments based upon it. It certainly supplies a principle in the light of which all proposed trade regulations should be criticized. ”

“ Each is determined to be the master in his own house, and each has rejected free trade because of the cosmopolitanism which it involves.
Economically, free trade lays stress on consumption as the chief criterion of prosperity. It is, of course, true that goods are produced with the object of being consumed, and it is plausible to insist on taking this test; but it is also true that consumption and production are mutually interdependent, and that in some ways production is the more important of the two. Consumption looks to the present, and the disposal of actual goods ”

“ It seems possible that the modern unrest in India, and the discontent in Ireland, may be connected with the economic conditions in these countries, on which free trade has been imposed without their consent. So far the population which subsists on the cheaper food, and has the lower standard of life, has been the sufferer; but the mischief might operate in another fashion. The self-governing colonies at all events feel that competition in the same market between races with different standards of comfort has infinite possibilities of mischief. ”

“ When the entire separation of America shall have forced the whole world to recognize this truth and purged the European nations of commercial jealousy there will be one great cause of war less in the world. ”

“ But other exponents of the doctrine have not been content to employ it in this fashion. They urge it in a more positive manner, and insist that free trade pure and simple is the foundation on which the economic life of the community ought to be based. By men who advocate it in this way, free trade is set forward as an ideal which it is a duty to realize, and those who hold aloof from it or oppose it have been held up to scorn as if they were almost guilty of a crime. [12] The development of the material resources of the world is undoubtedly an important element in the welfare of mankind ”

“ The capitalist employer had superseded the landowner as the mainstay of the resources and revenue of the realm, and insisted that the prosperity of manufactures was the primary interest of the community as a whole. The expectation, that a thoroughgoing policy of free trade would not only favour an increase of employment, but also the cheapening of food, could only have been roused in a country which was obliged to import a considerable amount of corn. ”

“ In the British empire the conditions are reversed; but though the great self-governing colonies have withdrawn from the circle, in the hope of building up their own economic life in their own way, free trade is still maintained over a very large part of the British empire. Throughout this area, there are very varied physical conditions; there is also an extraordinary variety of races, each with its own habits, and own standard of comfort; and in these circumstances it may be doubted whether the free competition, involved in free trade, is really altogether wholesome. ”

“ Owing to the neglect of this element of time, and the allowance which must be made for it, the reasoning as to the advantages of free trade, which is perfectly sound in regard to the distribution of goods already in existence, may become sophistical, [8] if it is put forward as affording a complete demonstration of the benefits of free trade as a regular policy. After all, human society is very complex, and any attempt to deal with its problems off-hand by appealing to a simple principle raises the suspicion that some important factor may have been left out of account. ”

“ It will be a wise and happy thing for the nation which is the first to be convinced that the secret of “success, so far as commercial policy is concerned, consists in employing all its land in the manner most profitable for the proprietary, all the hands in the manner most advantageous to the workman personally, that is to say, in the manner in which each would employ them, if we could let him be simply directed by his own interest, and that all the rest of the mercantile policy is vanity and vexation of spirit. ”

“ When there is such mistaken simplification, the reasoning may seem to have complete certainty, and yet it fails to produce conviction, because it does not profess to deal with the problem in all its aspects. When we concentrate attention on the phenomena of exchange, we are viewing society as a mechanism in which each acts under known laws and is impelled by one particular force—that of self-interest ”

“ As regards the prosperity of the community in the future it is important that goods should be consumed in such a fashion as to secure that they shall be replaced or increased before they are used up; it is the amount of production rather than the amount of consumption that demands consideration, and gives indication of growth or of decadence. ”

“ It is here that the new patriotism comes into direct conflict with the political principles of free trade as advocated by Bastiat and Cobden; for them the important point was that countries, by becoming dependent on one another, would be prevented from engaging in hostilities. The new nations are determined that they will not allow other countries to have such control over their economic condition, as to be able to exercise a powerful influence on their political life. ”

“ But in point of fact, modern times have shown the existence in democracies of a patriotic sentiment which is both exclusive and aggressive; and the burden of armaments has steadily increased. It was by means of a civil war that the United States attained to a consciousness of national life; while such later symptoms as the recent interpretations of the Monroe doctrine, or the war with Spain, have proved that the citizens of that democratic country cannot be regarded as destitute of self-aggrandizing national ambition. ”

“ Adam Smith and his successors have demonstrated that in every case of voluntary exchange each party gains something that is of greater value-in-use to him than that with which he parts, and that consequently in every exchange, either between individuals or between nations, both parties are the gainers. ”

“ It is not difficult to account for the conversion of Great Britain to this doctrine; in the special circumstances of the first half of the 19th century it was to the interest of the most vigorous factors in the economic life of the country to secure the greatest possible freedom for commercial intercourse. Great Britain had, through her shipping, access to all the markets of the world; she had obtained such a lead in the application of machinery to manufactures that she had a practical monopoly in textile manufactures and in the hardware trades ”

“ After all, the various countries of the world are all in different stages of development; some are old and some are new; and even the old countries differ greatly in the progress they have made in distinct arts. The introduction of machinery has everywhere changed the conditions of production, so that some countries have lost and others have gained a special advantage. ”

“ After 1640 the term seems to have been commonly current in a different sense. When the practice which had been handed down from the middle ages—of organizing the trade with particular countries by means of privileged companies, which professed to regulate the trade according to the state of the market so as to secure its steady development in the interest of producers and traders—was seriously called in question under the Stuarts and at the Revolution, the interlopers and opponents of the companies insisted on the advantages of a “Free Trade” ”

“ In the first half of the 19th century there were many men who believed that national ambitions and jealousies of every kind were essentially dynastic, and that if monarchies were abolished there would be fewer occasions of war, so that the expenses of the business of government would be enormously curtailed. ”

“ Neither of these communities is willing to sink its individual conception of progress in those of the world at large; each is jealous of the intrusion of alien elements which cannot be reconciled with its own political and social system. ”

“ These cases are sometimes quoted as justifying the expectation that the same principle is likely to be adopted sooner or later in regard to external trading relations. There is some reason, however, for raising the question whether free trade has been equally successful, not only in its economic, but in its social results, in all the large political communities where it has been introduced. ”

“ Within this sphere the ideal of Bastiat and his followers is being realized. England, as a great manufacturing country, has more than held her own; India and Ireland are supplied with manufactured goods by England, and in each case the population is forced to look to the soil for its means of support, and for purchasing power. ”

“ There are thus great areas, externally self-protecting, where free trade, as between internal divisions, has been introduced with little, if any, political difficulty, and with considerable economic advantage. ”

“ The principles expressed in the writings of Friedrich List have taken such firm hold, both in America and in Germany, that these countries have preferred to follow on the lines by which Great Britain successfully built up her industrial prosperity in the 17th and 18th century, rather than on those by which they have seen her striving to maintain it since 1846. ”

“ And a similar recrudescence of patriotic feeling has been observable in other countries, such as Norway and Hungary: the growth of national sentiment is shown, not only in the attempts to revive and popularize the use of a national language, but still more decidedly in the determination to have a real control over the economic life of the country. ”

“ In each case the preference for tillage, as an occupation, has rendered it comparatively easy to keep the people on the land; but there is some reason to believe that the law of diminishing returns is already making itself felt, at all events in India, and is forcing the people into deeper poverty. [21] It may be doubtful in the case of Ireland how far the superiority of England in industrial pursuits has prevented the development of manufactures ”

“ It gives us a basis for examining and estimating the expense at which any particular piece of trade restriction is carried out; but thus used, the principle does not necessarily condemn the expenditure; the game may be worth the candle or it may not, but at least it is well that we should know how fast the candle is being burnt. ”