What Is Free Trade?
by Frederick Bastiat.
INTRODUCTION.
Years ago I could not rid my mind of the notion that Free Trade meant some cunning policy of British statesmen designed to subject the world to British interests. Coming across Bastiat"s inimitable _Sophismes Economiques_ I learnt to my surprise that there were Frenchmen also who advocated Free Trade, and deplored the mischiefs of the Protective Policy. This made me examine the subject, and think a good deal upon it; and the result of this thought was the unalterable conviction I now hold--a conviction that harmonizes with every n.o.ble belief that our race entertains; with Civil and Religious Freedom for All, regardless of race or color; with the Harmony of G.o.d"s works; with Peace and Goodwill to all Mankind. That conviction is this: that to make taxation the incident of protection to special interests, and those engaged in them, is robbery to the rest of the community, and subversive of National Morality and National Prosperity. I believe that taxes are necessary for the support of government, I believe they must be raised by levy, I even believe that some customs taxes may be more practicable and economical than some internal taxes; but I am entirely opposed to making anything the object of taxation but the revenue required by government for its economical maintenance.
I do not espouse Free Trade because it is British, as some suppose it to be. Independent of other things, that would rather set me against it than otherwise, because generally those things which best fit European society ill befit our society--the structure of each being so different. Free Trade is no more British than any other kind of freedom: indeed, Great Britain has only followed quite older examples in adopting it, as for instance the republics of Venice and Holland, both of which countries owed their extraordinary prosperity to the fact of their having set the example of relaxing certain absurd though time-honored restrictions on commerce. I espouse Free Trade because it is just, it is unselfish, and it is profitable.
For these reasons have I, a Worker, deeply interested in the welfare of the fellow-workers who are my countrymen, lent to Truth and Justice what little aid I could, by adapting Bastiat"s keen and cogent Essay to the wants of readers on this side of the Atlantic.
EMILE WALTER, _the Worker_.
NEW YORK, 1866.
WHAT IS FREE TRADE?
CHAPTER I.
PLENTY AND SCARCITY.
Which is better for man and for society--abundance or scarcity?
What! Can such a question be asked? Has it ever been pretended, is it possible to maintain, that scarcity is better than plenty?
Yes: not only has it been maintained, but it is still maintained.
Congress says so; many of the newspapers (now happily diminishing in number) say so; a large portion of the public say so; indeed, the _city theory_ is by far the more popular one of the two.
Has not Congress pa.s.sed laws which prohibit the importation of foreign productions by the maintenance of excessive duties? Does not the _Tribune_ maintain that it is advantageous to limit the supply of iron manufactures and cotton fabrics, by restraining any one from bringing them to market, but the manufacturers in New England and Pennsylvania?
Do we not hear it complained every day: Our importations are too large; We are buying too much from abroad? Is there not an a.s.sociation of Ladies, who, though they have not kept their promise, still, promised each other not to wear any clothing which was manufactured in other countries?
Now tariffs can only raise prices by diminishing the quant.i.ty of goods offered for sale. Therefore, statesmen, editors, and the public generally, believe that scarcity is better than abundance.
But why is this; why should men be so blind as to maintain that scarcity is better than plenty?
Because they look at _price_, but forget _quant.i.ty_.
But let us see.
A man becomes rich in proportion to the remunerative nature of his labor; that is to say, _in proportion as he sells his produce at a high price_. The price of his produce is high in proportion to its scarcity. It is plain, then, that, so far as regards him at least, scarcity enriches him. Applying, in turn, this manner of reasoning to each cla.s.s of laborers individually, the _scarcity theory_ is deduced from it. To put this theory into practice, and in order to favor each cla.s.s of labor, an artificial scarcity is produced in every kind of produce by prohibitory tariffs, by restrictive laws, by monopolies, and by other a.n.a.logous measures.
In the same manner it is observed that when an article is abundant, it brings a small price. The gains of the producer are, of course, less.
If this is the case with all produce, all producers are then poor.
Abundance, then, ruins society; and as any strong conviction will always seek to force itself into practice, we see the laws of the country struggling to prevent abundance.
Now, what is the defect in this argument? Something tells us that it must be wrong; but _where_ is it wrong? Is it false? No. And yet it is wrong? Yes. But how? _It is incomplete._
Man produces in order to consume. He is at once producer and consumer.
The argument given above, considers him only under the first point of view. Let us look at him in the second character, and the conclusion will be different. We may say:
The consumer is rich in proportion as he _buys_ at a low price. He buys at a low price in proportion to the abundance of the articles in demand; _abundance_, then, enriches him. This reasoning, extended to all consumers, must lead to the _theory of abundance_.
Which theory is right?
Can we hesitate to say? Suppose that by following out the _scarcity theory_, suppose that through prohibitions and restrictions we were compelled not only to make our own iron, but to grow our own coffee; in short, to obtain everything with difficulty and great outlay of labor. We then take an account of stock and see what our savings are.
Afterward, to test the other theory, suppose we remove the duties on iron, the duties on coffee, and the duties on everything else, so that we shall obtain everything with as little difficulty and outlay of labor as possible. If we then take an account of stock, is it not certain that we shall find more iron in the country, more coffee, more everything else?
Choose then, fellow-countrymen, between scarcity and abundance, between much and little, between Protection and Free Trade. You now know which theory is the right one, for you know the fruits they each bear.
But, it will be answered, if we are inundated with foreign goods and produce, our specie, our precious product of California, our dollars, will leave the country.
Well, what of that? Man is not fed with coin. He does not dress in gold, nor warm himself with silver. What does it matter, then, whether there be more or less specie in the country, provided there be more bread in the cupboard, more meat in the larder, more clothes in the wardrobe, and more fuel in the cellar?
Again, it will be objected, if we accustom ourselves to depend upon England for iron, what shall we do in case of a war with that country?
To this I reply, we shall then be compelled to produce iron ourselves.
But, again I am told, we will not be prepared; we will have no furnaces in blast, no forges ready. True; neither will there be any time when war shall occur that the country will not be already filled with all the iron we shall want until we can make it here. Did the Confederates in the late war lack for iron? Why, then, shall we manufacture our own staples and bolts because we may some day or other have a quarrel with our ironmonger!
To sum up:
A radical antagonism exists between the vender and the buyer.
The former wishes the article offered to be _scarce_, and the supply to be small, so that the price may be high.
The latter wishes it _abundant_ and the supply to be large, so that the price may be low.
The laws, which should at least remain neutral, take part for the vender against the buyer; for the producer against the consumer; for high against low prices; for scarcity against abundance; for protection against free trade. They act, if not intentionally, at least logically, upon the principle that _a nation is rich in proportion as it is in want of everything_.
CHAPTER II.
OBSTACLES TO WEALTH AND CAUSES OF WEALTH.
Man is naturally in a state of entire dest.i.tution.
Between this state, and the satisfying of his wants, there exist a number of obstacles which it is the object of labor to surmount.