The Pamphlet Collection of Sir Robert Stout: Volume 56
Protection Versus Work and Wages., — Leaflet No. XXXVI
Protection Versus Work and Wages.,
Leaflet No. XXXVI.
The Fair Traders say, "Give us protective duties, and work and wages will be plentiful." The direct contrary is the fact; and, if it were not so, how is it that wagess are at least fifty per cent. higher than they were forty years ago? It is perfectly true that wages in protectionist America are higher than they are here; but then it is also true that wages in protectionists France are lower than they are here: and it is a curious fact, that while our opponents sometimes appeal to America as showing what protection does for wages, they not less frequently appeal to the low wages in France, and call out for protection against the competition which is caused by the low wages and long hours of labour in that country. They cannot use both arguments: one must be wrongs The fact is that the rate of wages is chiefly governed by supply and demand, and in a new country, where labour is scarce and commerce active, whether it is Free Trade or Protectionist, wages will rule high. At the same time, other things being equal, wages will rule higher in a Free Trade country than in a protected one; because Free Trade promotes commerce, and commerce creates a demand for labour, which raises the price.
But then, our opponents say, Protection fosters fresh industries which would not otherwise have existed, and, therefore, improves trade. It may foster fresh industries, but if it does, it is at the expense of other industries which need no fostering. What it does is not to create additional work, but to divert capital from work that is naturally profitable to work that is not profitable, and which can only be made so by artificial means. What we should aim page break at is division of labour; to sell as much as we possibly can of the things which we can make cheapest and best, and that will enable us to buy the equivalent things which the foreigner can make cheapest and best. If we take the opposite advice, and foster protected industries, it is as if a skilled artisan, earning high wages, were to say to himself, "Why should I buy all the goods I want for the use of my family? Why should I not grind my own corn, and bake it; and make my own boots and coats, and my wife's dresses?" The effect of such a policy would be to divert the greater part of his time from what paid him well to what paid him badly, and his commodities would be badly made into the bargain. This would be "protecting native industry" with a vengeance; but, though it may be thought an extreme case, it is a fair illustration of what happens when the same thing is done on a large scale.
The depression of Trade has been grievously prolonged, but it is worse in Protected countries than in Free Trade England. It is not due to Free Trade. On the contrary, Free Trade has enabled working men to pass through it with less suffering, owing to the cheapness of food, and other articles. Even during the depressed period pauperism has steadily diminished, emigration has steadily diminished, crime has steadily diminished, and the Excise returns have steadily increased. The fact is, the well-being of the people depends, not only on the absolute amount of wages they earn, but also on the purchasing power of those wages. Almost every important article used by working men is cheaper than it used to be; and more of it is consequently used by them. Thus, the consumption of sugar is one-half as much again per head as it was twelve years ago; and if you go farther back, the difference is still more marked, being now four times as great as it was in 1840. You will find the consumption of tea to have increased in much the same proportion.
With Free Trade, nearly everything that we consume is cheaper than it used to be under Protection, and we are able to undersell even protected countries in their own markets. Protective duties, on the other hand, enhance the price of the commodities we consume; and living being thus made dearer, it is impossible to produce so cheaply what other countries buy of us.
E. N. Buxton.
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