This section is from the "The Science Of Wealth" book, by Amasa Walker.
These are of three kinds : —
First, physical, which are natural; second, social, which are incidental; third, legal, which are conventional.
Looking at these in the light of what has gone before, we shall be inclined to regard them as so much imposed as a burden on industry, shackling the movements of capital and labor.
But they have been presented in another aspect, as if there were compensations for this hinderance of spontaneous trade; and to this, also, we will attend.
Inasmuch, therefore, as these obstructions to trade have been regarded as the protection of local industry, and on that account have been received with favor by scientific men and rulers, we shall speak of them as different forms of protection. The propriety of the term " protection" we shall discuss at another point.
1st, Physical protection.
This results from obstacles which Nature interposes. They may all be expressed by the single term " location." The wheat of Vermont has a protection in its own markets as against the wheat of Illinois, to the extent of all the cost of transportation from the latter to the former State. If the cost of transportation and attendant charges are fifty cents per bushel, then the farmers of Vermont can, as far as competition from Illinois is concerned, continue to sell their wheat until they reach a price fifty cents per bushel greater than they could obtain but for this. All this may not much enrich the farmer; for the greater price may be rendered necessary by the additional labor required. But, at any rate, it assists him in selling just so much. On the other hand, the mechanic of Vermont must pay more, up to fifty cents, for a bushel of wheat. The protection of the farmer, though a natural one, is at the expense of the consumer. The mechanic, in so far as his bread is concerned, is placed at a disadvantage in production, in competition with those who can purchase their wheat at the prices of Illinois. It costs him more to live: he must, therefore, charge more for his wares, and, of course, sell less.
If, now, the introduction of railroads reduces the cost of transportation to twenty-five cents, the Vermont farmers have lost half their protection. The consequence of this will naturally be, that some of that class in Vermont will become mechanics, because the latter class has gained what the former has lost, by the reduction in the cost of transportation. Any thing which reduces the price of agricultural products has a tendency to increase all other branches of production.
This protection amounts generally to an entire prohibition of the foreign article in the case of certain manufactures, such as houses, barns, stores, &c, which might often be erected more conveniently and cheaply than in the country where they are to be occupied; but the cost of transportation puts it out of the question, except in cases where the local facilities are very crude and insufficient. There have been great numbers of houses sent out by ship to California and Australia; and there are, even now, remaining in the eastern portion of the United States, houses which were framed in the old world, or which are made of brick imported from England.
Yet, looking to the whole of things, we find that this class of protection builds up, in every country, an amount of manufacturing and mining industry, often amounting to one-half of its consumption in that line.
Such a protection to industry being in the nature of things, and, in fact, being the very condition of material existence, we have no more call to inquire whether it is desirable than we have to ask the same concerning weight. It exists, and must continue. The effect of it may be lessened by man's contrivances, but can never be annihilated. Those very contrivances will be among the effects of it.
In a certain sense, and to a degree, such obstructions, even when apparently removed, still continue to exert a protection on local industry. Suppose, for example, a swamp, near a certain town, requires a detour of many miles for all passengers and freight. It is a natural protection on the industry of the place. If, now, a causeway is constructed or the swamp drained, so that the difficulty of travel is avoided, the protection is removed, unless, indeed, it exists in the form of the debt incurred for drainage. In either case, the people are relieved of a certain amount of labor once indispensable; and, though their " protection " has been removed, their industry has been greatly benefited.