The Economic Basis of Protection

The discussion of international trade has always ex- cited much interest, and must, for a long time, still command the attention of all thoughtful citizens.A great variety of arguments has been presented to the public and many of them are already fully discussed.Yet there seems to be a place and an opportunity at the present time for a new discussion of this important problem upon a more fundamental basis than is usually found in former treatises.We do not now need new facts so much as a discus- sion of the relation of these facts to one another, and the bearing of all this class of facts upon economic doctrine.Above all, we need a discussion on a purely economic basis.In the past very few of the writers upon this subject have carefully separated the economic arguments against protection from the moral and political, and in this way the former is subordinated to the latter.Many writers start also from the assumption 1* all the possibilities of land have been carefully investigated and the industrial qualities of the people carefully examined, can they discover what national policy will bring to them the greatest industrial pros- perity.CHAPTER III.THE GROWTH OP ECONOMIC DOCTEINE.So little attention has been paid to the history and gradual development of economic theory that the public have very misty ideas as to the relation of free- trade to economic doctrine.The development of the doctrine of free-trade is largely due to Adam Smith, or at least we may say that he was the first one to present it in a systematic way to the thinking world.Since the groundwork of the creed of free-trade is to be found in his writings and those of his disciples, I desire to examine into the premises from which they start, so as to show in what ways these doctrines have been undermined by later economic progress.The criterion of prosperity which Adam Smith uses is that of profit of the individual.If an exchange is profitable to the parties directly interested, he assumes that it is beneficial to the nation.In this way the in- dividual profit of producers becomes a criterion of national prosperity.Under the new conditions of production which have arisen since the time of Adam Smith, a sale profitable to the producer does not indicate that it has been also advantageous to the public in the way that a like sale for a corporation would indicate the advantage of all the stockholders.We have no means by which the advantage derived in an ex- b

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