All laws made for the purpose of protecting the interests of individuals or classes must mean, if they mean anything, to render the articles which such classes deal in or produce dearer than they would otherwise be if the public was left at liberty to supply itself with such commodities in the manner which their own interests and choice would dictate. In order to make them dearer it is absolutely necessary to make them scarcer; for quantity being large or small in proportion to demand, alone can regulate the price;—protection, therefore, to any commodity simply means that the quantity supplied to the community shall be less than circumstances would naturally provide, but that for the smaller quantity supplied under the restriction of law the same sum shall be paid as the larger quantity would command without such restriction.

Time was when the Sovereigns of England relied chiefly on the granting of patents to individuals for the exclusive exercise of certain trades or occupations in particular places, as the means of rewarding the services of some, and as a provision for others of their adherents, followers, and favourites, who either held the exclusive supply in their own hands on their own terms, or who again granted to others under them that privilege, receiving from them a portion of the gains. In the course of time, however, the public began to discover that these monopolies acted upon them directly as a tax of a most odious description; that the privileged person found it needful always to keep the supply short to obtain his high price (for as soon as he admitted plenty he had no command of price)—that, in short, the sovereign, in conferring a mark of regard on a favourite, gave not that which he himself possessed, but only invested him with the power of imposing a contribution on the public.

The public once awake to the true operation of such privileges, and severely suffering under the injuries which they inflicted, perseveringly struggled against these odious monopolies, until the system was entirely abandoned, and the crown was deprived of the power of granting patents of this class. But though the public saw clearly enough that these privileges granted by the sovereign to individuals operated thus prejudicially on the community, they did not see with equal clearness that the same power transferred to, and exercised by, Parliament, to confer similar privileges on classes; to do for a number of men what the sovereign had before done for single men, would, to the remaining portion of the community, be just as prejudicial as the abuses against which they had struggled. That like the sovereign, the Parliament, in protecting or giving privileges to a class, gave nothing which they possessed themselves, but granted only the power to such classes of raising a contribution from the remaining portion of the community, by levying a higher price for their commodity than it would otherwise command. As with individuals, it was equally necessary to make scarcity to secure price, and that could only be done by restricting the sources of supply by prohibiting, or by imposing high duties on, foreign importations. Many circumstances, however, combined to render the use of this power by Parliament less obvious than it had been when exercised by the sovereign, but chiefly the fact that protection was usually granted by imposing high duties, often in their effect quite prohibitory, under the plea of providing revenue for the state. Many other more modern excuses have been urged, such as those of encouraging native industry, and countervailing peculiar burthens, in order to reconcile public opinion to the exactions arising out of the system, all of which we shall, on future occasions, carefully consider separately. But, above all, the great reason why these evils have been so long endured has been, that the public have believed that all classes and interests, though perhaps not exactly to the same extent, have shared in protection. We propose at present to confine our consideration to the effects of protection,—first, on the community generally; and secondly, on the individual classes protected.

As it is admitted that protection ought, if granted at all, to be given to all alike, it would follow that the whole produce of the country would be raised to an artificial price; and if this were the case, as far as regarded the exchange or transactions among members of the same community, the effect would be merely nominal, of no advantage to any one, and of little disadvantage beyond the enormous public expense needed to prevent people cheating each other by smuggling and bringing in the cheaper foreign article;—but such a community must forego all notion or idea of a foreign trade;—they must have no desires to be gratified beyond themselves, and they must have within themselves the independent means of supplying every want. For even if the law be strong enough to maintain an artificial high price at home, it has no power of making other countries pay that price; and if everything we possessed commanded a higher price at home than other countries could supply the same for, we should have nothing which we could exchange for the produce of other countries, and thus no more foreign trade could exist, than in a poor country which had no surplus produce. It is therefore essential that every country should bear in mind, in adopting a system of protection to manufactures or other produce, that they thereby effectually debar themselves from all foreign trade to neutral countries in such articles; for if they require high duties at home to protect them from the produce of other countries, which could only come at considerable expense to compete with them at home, how can they withstand that competition when they meet on the same terms in every respect in a neutral market? How effectually has France stayed her export linen trade by raising the duties and the price of linen yarn, and by that act, intended as a blow to English trade, given the linen manufacturers of this country a greater advantage over France in the markets of the world than ever. How idle are the efforts of the Belgian government to establish depÔts and factories for the sale of their manufactures in St Thomas add other places, while the manufacturers in Ghent are only able to maintain their home trade, by high protective duties, against English, French, and German goods, and still cry out for greater protection!

It is, however, abundantly plain, that the state of a country above described could not long exist, when industry and intelligence were in the course of producing wealth; for if there be one law in nature more distinct than another, it is, that while the productions of every country are less or more limited to particular things, the wants of man extend to every possible variety of products over the whole world, as soon as his means can command them. As a country advances in wealth, it will have more and more surplus produce, which under wise laws would always consist of such things as it could produce with greatest facility and profit, whether from the loom or the soil. This surplus produce would be exchanged for the productions of other climates, but it must be quite clear, as soon as we arrive at this stage, that the power of the law to protect price altogether ceases. The surplus exported must sell in the markets of the world, in competition with the same article produced under the cheapest circumstances, and that article in the home market can command only the same price.

Thus the whole attempt to protect all interests equally would immediately fail; every article produced in excess, and exported, would command only the lowest prices of open markets, and the fancied protection of the law would be void; while everything produced in deficiency, and of which we required to import a portion to make up the needful supply, would continue to be protected above the natural price of the world to any extent of import duty that the law imposed upon the quantity required to make up the deficiency.

Thus, for example, we export a large portion of the woollen, and the largest portion of the cotton goods which we manufacture, to all parts of the world, which we must sell at least as cheap as they can be bought in any other country. The same articles can only command the same price in the home market, and though the law imposed an import duty, by way of pretended protection, to any extent, upon similar foreign goods, it would not have the effect of raising the price one fraction. On the other hand, we do not produce as much wool or food as we consume, and have every year to import large quantities of each to make up the deficiency. Whatever duty, therefore, is put on the import of the quantity thus required, will enable the producers at home to maintain their price so much above the natural level of the world. By this state of things the country at large is injured in two distinct and prominent ways:—first,—those articles which we can make in excess, and export, must ever be the chief means of absorbing the increasing capital and labour of the country; and the impediment thrown in our way, of importing those things which we have in deficiency, must necessarily check our power of extending the demand for the produce of such increasing labour and capital; and, secondly,—the price of such articles as we produce in deficiency, will always be maintained much above the level of the world, to the great disadvantage of the other great class of producers, the price of whose labour, and whose profits, will be regulated by competition with those who have food, &c., at the lowest price.

So much as to the effect on the community at large. We will now shortly consider the effect on individual interests, which are thought to enjoy protection, and we believe we can show that there never was a condition so fraught with mischief and disappointment, with such unmitigated delusion, deception, and exposure to ruin, than is to be found in every case where protection operates. We think it can be clearly shown that such occupations can never be more profitable; that they must usually be less profitable; and that they are always more exposed to vicissitudes than any other class.

They never can be more profitable, because capital and enterprise will always be attracted to any occupation which offers a larger profit than the usual rate, till it is reduced to a level with others; they will usually be less profitable, indeed always in a community of increasing numbers, because the price being maintained by restriction above the price of the world, prevents an extension of such trades in the same proportion as those who naturally belong to them, and look to them for occupation, increase in numbers: they will be exposed to greater vicissitudes, because, being confined to the supply of only one market, any accidental circumstance, which either increases the usual supply, or diminishes the usual demand, will cause an infinitely greater depression than if they were in a condition to avail themselves of the markets of the whole world, over which they could spread an accidental and unusual surplus.

Thus, previous to 1824, the silk manufacturers of this country were protected to a greater extent than any other trade, and the price of silk goods was maintained much above the rate of other countries; our silk trade was therefore necessarily confined almost exclusively to the home market and our colonies, and though they had a monopoly of those markets, it was at the cost of exclusion (on account of higher price) from all other markets.

Notwithstanding this monopoly, the silk manufacturers could never command at any time larger profits than other trades; for had they done so, competition would have increased until the rate was reduced to the common level of the country: on the contrary, the tendency was for profits and rates of wages to be smaller than in other great manufacturing branches, requiring equal capital and skill; because, with the increasing numbers who belonged to the silk trade,—the sons of manufacturers and of weavers, who naturally, in the first instance, look to the trade of their parents for their occupation,—the trade did not proportionably increase, from the fact of our being unable to extend our exports; and, lastly, it was exposed to much greater vicissitudes than other trades; for when, either from a temporary change of fashion or taste, or from a temporary stagnation of trade in this country, the accustomed demand was lessened, the silk manufacturers were unable to obtain any relief by extending their trade in the great neutral markets of the world, being excluded by price, and the whole surplus quantity remained a dead weight on this market only; whereas other branches of manufactures, practically enjoying no protection, in the case of depressed trade at home, had an opportunity of immediate relief, by spreading the surplus thereby created, at a very trifling sacrifice, over the wide markets which they supplied.

In this way the extent and duration of the vicissitudes and depressions in the silk trade were without parallel in any other; but since 1824, since this trade has been placed in a natural position by the removal of monopoly, the whole aspect of it has changed, and these peculiar evils have all disappeared.

Then again with regard to the products of land, which the law attempts to protect more highly than any other. Here again, though the price to the community is maintained much above the prices of other countries, no one person connected with raising the produce can command a higher rate of profit, or higher wages for labour, than other trades having no protection whatever; for if they did, competition would soon reduce them to the same level; but, on the contrary, the wages, of agricultural labourers, and the profits of farmers, are always rather below than above the common rate, and simply from this fact, that the children of farm labourers, and of farmers, who first naturally look to the pursuits of their parents for a trade or occupation, increase in numbers without any corresponding extension of the means of employment, and the competition among them is therefore always greater than in other trades which have the power of extension; and the vicissitudes to which the farmer is exposed are notoriously greater than any other trade. His rent and expenses throughout are fixed by an artificial price of produce, which price can only be maintained as long as a certain scarcity exists; but the moment the markets are plentifully supplied, either from a want of demand owing to a depression of trade, or from the result of a good harvest, he finds that plenty takes out of his hand all control of price, which quickly sinks to the natural rate.

With a free trade the farmer would never be exposed to such reverses. In that state, if the demand and price increased, it would be checked by an increase of imports from other countries; if the demand and price diminished, that would also be checked by a reduction or cessation of the usual imports, and, if necessary, by an export of any surplus which pressed upon the market;—and, if our space allowed, it would not be difficult to show that, with prices at the natural rate, all parties connected with land would not only be in a safer but a much better condition.

No cautious man who well understands the subject will ever hazard his capital in any trade exposed to so many evils and to so much uncertainty as restriction and protection infallibly introduce into it:—but the great error which misleads all men in cherishing such trades is, that they mistake high prices for high profits, which usually, instead of being synonymous terms, are quite the reverse.