The principle of retaliation is reasonable and applicable onlyif it coincides with the principle of the industrial development ofthe nation, if it serves as it were as an assistance to thisobject.
Yes, it is reasonable and beneficial that other nations shouldretaliate against the English import restrictions on theiragricultural products, by imposing restrictions on the importationof manufactured goods, but only when those nations are qualified toestablish a manufacturing power of their own and to maintain it forall times.
By the second exception, Adam Smith really justifies not merelythe necessity of protecting such manufactures as supply theimmediate requirements of war, such as, for instance, manufactoriesof arms and powder, but the whole system of protection as weunderstand it; for by the establishment in the nation of amanufacturing power of its own, protection to native industry tendsto the augmentation of the nation's population, of its materialwealth, of its machine power, of its independence, and of allmental powers, and, therefore, of its means of national defence, inan infinitely higher degree than it could do by merelymanufacturing arms and powder.
The same must be said of Adam Smith's third exception.If theburden of taxation to which our productions are subjected, affordsa just ground for imposing protective duties On the less taxedproducts of foreign countries, why should not also the otherdisadvantages to which our manufacturing industry is subjected incomparison with that of the foreigner afford just grounds forprotecting our native industry against the overwhelming competitionof foreign industry?
J.B.Say has clearly perceived the contradictory character ofthis exception, but the exception substituted by him is no better;for in a nation qualified by nature and by its degree of culture toestablish a manufacturing power of its own, almost every branch ofindustry must become remunerative under continued and powerfulprotection; and it is ridiculous to allow a nation merely a fewyears for the task of bringing to perfection one great branch ofnational industry or the whole industry of the nation; just as ashoemaker's apprentice is allowed only a few years to learnshoemaking.
In its eternal declamations on the immense advantages ofabsolute freedom of trade, and the disadvantages of protection, thepopular school is accustomed to rely on the examples of a fewnations; that of Switzerland is quoted to prove that industry canprosper without protective duties, and that absolute liberty ofinternational commerce forms the safest basis of nationalprosperity.The fate of Spain is quoted to exhibit to all nationswhich seek aid and preservation in the protective system, afrightful example of its ruinous effects.The case of England,which, as we have shown in a former chapter, affords such anexcellent example for imitation to all nations which are capable ofdeveloping a manufacturing power, is adduced by these theoristsmerely to support their allegation that capability formanufacturing production is a natural gift exclusively peculiar tocertain countries, like the capability to produce burgundy wines;and that nature has bestowed on England, above all other countriesof the earth, the destiny and the ability to devote herself tomanufacturing industry and to an extensive commerce.
Let us now take these examples more closely into consideration.