Economic advantage

“ Economy no more means saving money than it means spending money. It means, the administration of a house; its stewardship; spending or saving, that is, whether money or time, or anything else, to the best possible advantage. In the simplest and clearest definition of it, economy, whether public or private, means the wise management of labour; and it means this mainly in three senses: namely, first, applying your labour rationally; secondly, preserving its produce carefully; lastly, distributing its produce seasonably. ”

“ He shewed, that the advantage of an interchange of commodities between nations consists simply and solely in this, that it enables each to obtain, with a given amount of labour and capital, a greater quantity of all commodities taken together. ”

“ It would export articles of some sort, even to places which could make them with less labour than itself; because those countries, supposing them to have an advantage over it in all productions, would have a greater advantage in some things than in others, and would find it their interest to import the articles in which their advantage was smallest, that they might employ more of their labour and capital on those in which it was greatest. ”

“ The direct benefits of commerce consist in increased Efficiency of the productive powers of the World. From this exposition we perceive in what consists the benefit of international exchange, or, in other words, foreign commerce. Setting aside its enabling countries to obtain commodities which they could not themselves produce at all, its advantage consists in a more efficient employment of the productive forces of the world. ”

“ If, therefore, it be asked what country draws to itself the greatest share of the advantage of any trade it carries on, the answer is, the country for whose productions there is in other countries the greatest demand, and a demand the most susceptible of increase from additional cheapness. In so far as the productions of any country possess this property, the country obtains all foreign commodities at less cost. ”

“ Capital thus circumstanced forms a large portion of the productive resources of any commercial country, and is naturally attracted to those producers or traders who, being in the greatest business, have the means of employing it to most advantage, because such are both the most desirous to obtain it and able to give the best security. Although, therefore, the productive funds of the country are not increased by credit, they are called into a more complete state of productive activity. ”

“ Our courts of justice, our financial institutions, our methods of trade, and our schools of all grades are examples of social harmonies which found their form by long conflict, and settled down to smooth action by custom. The financial institutions and the methods of trade belong to the economic system. The system of production is modern and new. ”

“ The capital thus thrown out of employment in an industry in which we had no comparative advantage (when competition became free) would necessarily be employed in the industries in which we had an advantage, and would supply—and the transferred capital would be the only means of supplying—the commodities which would be sent abroad to pay for those, which by the supposition are now imported, but were formerly produced at home. ”

“ The Economic Function.—The nation has an economic function. It is its business to encourage trade by means that seem most likely to help, whether by subsidies, tariffs, or expert advice; to protect all producers, distributers, and consumers by just laws and tribunals, so that unfair privileges shall not be enjoyed by the few at the expense of the many, and to provide in every legitimate way for the spread of information and for experimentation that agriculture, mining, and manufacturing may be improved. ”

“ Just as industry, economy, or skill may improve the condition of the workmen who possess them in superior degree, but cease to have this effect when improvement in those respects becomes general, so a special advantage in procuring supplies, or a special efficiency given to some labour, may secure advantages which would be lost as soon as those improvements became so general as to affect the general relations of distribution. ”

“ So that the division of the advantage becomes more and more favourable to a country, in proportion as the demand for its commodities increases in foreign countries.
It is not even necessary that the country which takes its goods, should supply it with any commodity whatever. ”

“ All other things being equal, a low [166] rate per centum of capital in any country gives that country an advantage in the markets of the world for selling its commodities over other countries offering similar commodities where the rate is higher, because its cost of their production is less. Of course also such a country can subjugate its wild lands and make them valuable at less cost than the other countries. ”

“ We have seen that the value at which a country purchases a foreign commodity, does not conform to the cost of production in the country from which the commodity comes. Suppose now a change in that cost of production; an improvement, for example, in the process of manufacture. Will the benefit of the improvement be fully participated in by other countries? Will the commodity be sold as much cheaper to foreigners, as it is produced cheaper at home? ”

“ The consequent shifting of the incidence of industrial returns may be ascertained by enumerating the respective beneficiaries and exploitees of the profit-taking process—the trade advantages of the one class measure the economic disability of the other class; and the attenuation of the incomes of the less favored, as a means to augment the profits of the more favored, is a significant attribute of changing social costs. ”

“ The savings of labor which have fallen so largely into the hands of the few, making them rich men, have built our railroads, steamships, telegraphs, manufactories, thus in many ways adding to the means of production, and the facilities of commerce at home and abroad. These saved earnings in the hands of men seeking investment for profit have increased the wealth, resources, and refinements of civilization, made abundance possible, and brought it within reach of all, except the unfortunate, or the indolent and improvident. ”

“ Derived, as our public revenue is, in chief part from duties on imports, its magnitude affords gratifying evidence of the prosperity, not only of our commerce, but of the other great interests upon which that depends. ”

“ It is quite clear to my mind that the effect of our large foreign trade has been distinctly in the direction of lowering the value of money in our market, and consequently an undoubted aid to our industries. ”

“ If money is scarce in a country, the price of labor will be low, and consequently the produce of that country will be cheap at home, and a great profit will be made on the exportation. This profit will be returned, partly in goods and partly in money, and the country is enriched. ”

“ We may even have a positive advantage in its production: but, if we are so far favoured by circumstances as to have a still greater positive advantage in the production of some other article which is in demand in the foreign country, we may be able to obtain a greater return to our labour and capital by employing none of it in producing the article in which our advantage is least, but devoting it all to the production of that in which our advantage is greatest, and giving this to the foreign country in exchange for the other. ”

“ The income accruing from these services, such as banking and trading commissions, insurance premiums, and all the profits of our indirect trade, viz., trade not touching our shores at all, must amount to very large figures indeed. ”

“ The stability of trade, the money value of every description of vested interests, in fact, the industrial, commercial, and financial welfare of the country, all are directly involved in the rapid manipulation of such vast sums. ”

“ But the advantage I principally expect, is an increase of consumption. This will give us a vent for so much more, and, of consequence, find employment for so many more cultivators of the earth: and in whatever proportion it increases this production for us, in the same proportion will it procure additional vent for the merchandise of France, and employment for the hands which produce it. I expect too, that by bringing our merchants here, they would procure a number of commodities in exchange, better in kind, and cheaper in price. ”

“ As products made in this country compete successfully in world markets, we contribute to the strength and stability of our dollar, the expansion of our industry and fuller employment of our labor force. ”

“ We think nowadays that the resources of a state depend upon the prosperity of the people, no matter whether this prosperity comes from agriculture or from manufactures, 167from internal trade or from foreign trade. Statesmen, however, of the period under discussion, set a peculiarly high value on foreign commerce, and regarded it as a more important branch of industry than any other. ”

“ But whatever raises in any country the ordinary rate of profit higher than it otherwise would be, necessarily subjects that country both to an absolute, and to a relative disadvantage in every branch of trade of which she has not the monopoly. ”

“ The first important induction to be made is that where cost of production [pg 269] is low, wages and profits are high. The high productiveness of extractive industries in the United States is the reason why wages and profits are higher here than in older countries. ”

“ It has indeed been contended, that the great profits which are sometimes made by particular merchants in foreign trade, will elevate the general rate of profits in the country, and that the abstraction of capital from other employments, to partake of the new and beneficial foreign commerce, will raise148 prices generally, and thereby increase profits. ”

“ They want the only stimulus that unites industry with economy, viz. the prospect of a permanent advantage from their labor.
It haz been obzerved in Europe, that land rented on long leeses, iz better cultivated, than that which iz farmed on short leeses. A man who holds lands in fee, will uze them to the best advantage, for he expects hiz children wil enjoy the benefit. ”

“ Though the returns, therefore, of the foreign trade of consumption should be as quick as the home497 trade, the capital employed in it will give but one half the encouragement to the industry or productive labour of the country. ”

“ If the market price rises high above the cost of production, producers make a profit greater than the average profit made in the country. This induces them, by the appropriation of new land and the employment of new labor and capital, to increase their business. ”

“ But the point they have now to consider, Can they secure this profitable trade to themselves, if the industrial resources of this country—in other words, their customers' means of paying for their goods—are daily declining? ”

“ And finally, that all the benefits which would thereby accrue to the mother country, from the territorial revenue, the duties on trade, the industry and wealth for which that trade would furnish employment, and the treasures which the distribution of produce throughout Europe must bring into the mother country, would greatly exceed the highest advantages that could be calculated upon, even under the most favourable prospects, by the means of the fallen Company or a continuation of its former system. ”

“ We have the power, gentlemen, of going back to the time when protection was in full and unchecked force, and of examining the effect which it produced313 upon the wealth of the country. How, will you say, do I mean to test that wealth? I mean to test that wealth by the exports of the country, and I will tell you why, because your prosperity depends upon the wealth of your customers—that is to say, upon their capacity to buy what you produce. And who are your customers? Your customers are the industrial population of the country, who produce what we export and send all over the world. ”

“ In general, we must regard the opening of a profitable avenue for trade as we should the invention of a new machine, the discovery of a better electrical transmitter, or the utilizing of a cheaper motive power. It gives us more goods as the fruit of a given expenditure of labor and capital and affords a profit which, as we shall see, comes first to entrepreneurs and later to laborers and capitalists within the pale. ”

“ My countrymen, it is not alone the volume of money which the people want, but they demand its activity in trade and commerce. If you ask me how this can best be accomplished, I will answer by saying, protect American industries and universal confidence will surely follow. ”

“ When, either by the monopoly of the home market, or by a bounty upon exportation, you enable our woollen or linen manufacturers to sell their goods for somewhat a better price than they otherwise could get for them, you raise, not only the nominal, but the real price of those goods; you render them equivalent to a greater quantity of labour and subsistence; you increase not only the nominal, but the real profit, the real wealth and revenue of those manufacturers; and you enable them, either to live better themselves, or to employ a greater quantity of labour in those particular manufactures. ”

“ There is no purpose to which public money can be more beneficially applied than to the acquisition of a new and useful branch of industry, no consideration more valuable than a permanent addition to the general stock of productive labor. ”

“ It is this competition which so adjusts the exchangeable value of commodities, that after paying the wages for the labour necessary to their production, and all other expenses required to put the capital employed in its original state of efficiency, the remaining value or overplus will in each trade be in proportion to the value of the capital employed. ”