In the latter respect the great natural wealth in coal and ironwhich England possesses has often been adduced as a reason why theEnglish are specially destined to be a manufacturing nation.It istrue that in this respect England is greatly favoured by nature;but against this it may be stated that even in respect of thesenatural products, nature has not treated other countries merelylike a stepmother; for the most part the want of good transportfacilities is the chief obstacle to the full utilisation of theseproducts by other nations; that other countries possess enormousunemployed water power, which is cheaper than steam power; thatwhere it is necessary they are able to counterbalance the want ofcoal by the use of other fuels; that many other countries possessinexhaustible means for the production of iron, and that they arealso able to procure these raw materials from abroad by commercialexchange.
In conclusion, we must not omit here to make mention ofcommercial treaties based on mutual concessions of duties.Theschool objects to these conventions as unnecessary and detrimental,whereas they appear to us as the most effective means of graduallydiminishing the respective restrictions on trade, and of leadingthe nations of the world gradually to freedom of internationalintercourse.Of course, the specimens of such treaties which theworld has hitherto seen, are not very encouraging for imitation.Wehave shown in former chapters what injurious effects the MethuenTreaty has produced in Portugal, and the Eden Treaty has producedin France.It is on these injurious effects of reciprocalalleviation of duties, that the objections of the school tocommercial treaties appear principally to be founded.Its principleof absolute commercial liberty has evidently experienced apractical contradiction in these cases, inasmuch as, according tothat principle, those treaties ought to have operated beneficiallyto both contracting nations, but not to the ruin of the one, and tothe immense advantage of the other.If, however, we investigate thecause of this disproportionate effect, we find that Portugal andFrance, in consequence of those conventions, abandoned in favour ofEngland the progress they had already made in manufacturingindustry, as well as that which they could expect to make in it inthe future, with the expectation of increasing by that means theirexportation of natural products to England; that, accordingly, boththose nations have declined, in consequence of the treaties thusconcluded, from a higher to a lower standpoint of industrialdevelopment.From this, however, it merely follows that a nationacts foolishly if it sacrifices its manufacturing power to foreigncompetition by commercial treaties, and thereby binds itself toremain for all future time dependent on the low standpoint ofmerely agricultural industry; but it does not in the least followfrom this, that those treaties are also detrimental andobjectionable whereby the reciprocal exchange of agriculturalproducts and raw materials, or the reciprocal exchange ofmanufactured products, is promoted.
We have previously explained that free trade in agriculturalproducts and raw materials is useful to all nations at all stagesof their industrial development; from this it follows that everycommercial treaty which mitigates or removes prohibitions andrestrictions on freedom of trade in such articles must have abeneficial effect on both contracting nations, as e.g.a conventionbetween France and England whereby the mutual exchange of wines andbrandies for pig-iron and coal, or a treaty between France andGermany whereby the mutual exchange of wine, oil, and dried fruit,for corn, wool, and cattle, were promoted.
According to our former deductions, protection is onlybeneficial to the prosperity of the nation so far as it correspondswith the degree of the nation's industrial development.Everyexaggeration of protection is detrimental; nations can only obtaina perfect manufacturing power by degrees.On that account also, twonations which stand at different stages of industrial cultivation,can with mutual benefit make reciprocal concessions by treaty inrespect to the exchange of their various manufacturing products.
The less advanced nation can, while it is not yet able to producefor itself with profit finer manufactured goods, such as finecotton and silk fabrics, nevertheless supply the further advancednation with a portion of its requirements of coarser manufacturedgoods.
Such treaties might be still more allowable and beneficialbetween nations which stand at about the same degree of industrialdevelopment, between which, therefore, competition is notoverwhelming, destructive, or repressive, nor tending to give amonopoly of everything to one side, but merely acts, as competitionin the inland trade does, as an incentive to mutual emulation,perfection, and cheapening of production.This is the case withmost of the Continental nations.France, Austria, and the GermanZollverein might, for instance, anticipate only very prosperouseffects from moderately low reciprocal protective duties.Also,between these countries and Russia mutual concessions could be madeto the advantage of all sides.What they all have to fear at thistime is solely the preponderating competition of England.
Thus it appears also from this point of view, that thesupremacy of that island in manufactures, in trade, in navigation,and in her colonial empire, constitutes the greatest existingimpediment to all nations drawing nearer to one another; althoughit must be at the same time admitted that England, in striving forthis supremacy, has immeasurably increased, and is still dailyincreasing, the productive power of the entire human race.
End Third Book
The Systems