This section is from the "The Science Of Wealth" book, by Amasa Walker.
In the prodigious enterprises undertaken by science and labor for removing, in every direction, obstacles to uninterrupted communication, do we not find the best practical commentary on all artificial and conventional arrangements for putting countries further apart by imposing restrictions on commerce? If the approach of foreign industry is undesirable, it is an economic curse, that the steamship and the Indiaman have replaced the galleys of Columbus or the triremes of Themistocles. Let the ocean be turned to quicksand, and the earth to mire; that so the mutual hurt-fulness of nations may cease in an entire impossibility of reaching each other.
The second of the modes of protection is what we have termed social. ' We have also called it incidental, there being no original intention to affect the direction of labor. It arises from social obstructions or political disturbances. These increase the protection afforded the interests of particular localities. A most impressive illustration is found in the results of the war of the Rebellion in the United States. The production and sale of cotton was greatly hindered, and, for a time, almost annihilated. This operated as an immense protection to the cotton of India and Egypt, where, before, the culture was comparatively unprofitable. Yet, under the encouragement of the American war, it became more advantageous than any other branch of industry. Indeed, so largely was it raised in India, that the country increased in wealth at a rate quite astonishing, and a great industrial revolution, for the time at least, was effected. But it was at a heavy expense to all other peoples and countries. What India gained, Europe and America lost; the former as producer, the latter as consumer. The wealth of the world was not increased, but greatly diminished, and its natural and healthy commerce widely deranged.
Even India itself has not been permanently benefited by the extraordinary demand for her cotton. The return of peace in the United States, bringing down the price of her great staple, has caused extensive bankruptcy and great commercial distress. The season of artificial prosperity led to the wildest extravagance and speculation, to the neglect of the culture of rice and other needful crops, so that the event, which, for a while, brought unwonted prosperity, must, in the end, produce equal depression and suffering.
In some countries, the despotic rapacity of the government, and the violence and fraud that pervade society serve as a great protection to the industry of others, by diminish ing personal safety and business security in trade. Such an element affords the same encouragement to others as the introduction of a bear into one store would give to the sales of others. It plainly reduces the quantity or quality of inducements that can be held out to buyers in the community where the disturbance or disorder exists.
Suppose the Gulf of Mexico to be infested with pirates, so that the danger to life and risk of property should double the price of sugar brought from New Orleans to. New York. This increase of price, caused by the cost of insurance against robbery and murder, so long as it lasted, would be a protection to that extent to the cultivation of maple sugar in the North.
War, under all circumstances, whatever the occasion or result, whether between different nations or parts of the same, always has the effect of disturbing trade, arresting all the healthful agencies of production, and disturbing the harmony of the economic world.
•3d, The last of the modes of protection is what we have called legal. It is purely conventional, and arises with the direct purpose of affecting production, or, at least, with the expectation that such will be the result. This is effected, firstly, by the prohibition of imports from one or all nations; secondly, by a direct premium on the products of home industry; or, thirdly, by the imposition of duties on the foreign article.
The former method is so violent and extreme as to be entirely out of the sympathies of modern economy and statesmanship. In so far as it exists, it intends to destroy trade. It may arise during a state of war, or in greatly embittered controversies for purposes of injury or revenge; in which case its effects are to be regarded rather as belonging to a state of war, and as incidental to it, though brought in by specific enactment.
The second, though used at different times and in different countries, has never been a favorite with governments, although it is by far the most economical mode of giving encouragement to a particular branch of industry. An illustration of the great advantage of this mode of protection over that of laying duty on exports will be given in our chapter on national taxation.
We shall have to do, then, only with that kind of legal protection which is secured by the imposition of duties on imports. This has been the practice of nations generally, in a greater or less degree, and so with more or less effect. England formerly laid taxes on four hundred articles brought into her ports from France. The United States has always maintained a system of import duties of a varying character, sometimes directed to one object and sometimes to another, as the popular feeling went.