Principles of Political Economy · John Stuart Mill
PROTECTION.
292. Mention some of the principal arguments brought forward in favor of protective tariffs. 293. Connect the principle of the division of employments (or labor) with the policy of free trade and the functions of government. 294. Sketch the effects of discriminating duties, including the operation of the corn laws. 295. Examine the following argument, emending, if you think it necessary, the free-trader’s doctrine on the point raised: The free-trader’s belief is that a customs duty is added to the price of the article upon which it is imposed. If the article is imported, according to his theory, the increase of the price goes into the public treasury; if the article is made in the country, the increase of the price goes into the pocket of the producer. But in the former case there is no protection; and competition will prevent the latter. Therefore protection does not increase the price of the protected article. If a customs duty is imposed upon a commodity, and its price is not raised in consequence, what inference can you draw? 296. Under what circumstances did Mr. Mill think nascent states might be justified in adopting a policy of protection? Criticise his opinion, and, if you agree with it, give some examples of its application. 297. American protectionists allege that the high rate of wages prevailing in the United States disables them from competing with “the pauper labor” of Europe. Examine the grounds of this statement, and consider how far it forms a justification for protection to American industry.
298. A high rate of wages indicates, not a high, but a low cost of production for all commodities measured in which the rate of wages is high. Explain and prove this proposition, and illustrate it from the circumstances of the United States. 299. State under what limitations the proposition is correct, that profits vary inversely with wages. Explain the circumstances which cause both a higher rate of wages and profits to prevail in a young country, such as the United States, than in England. 300. In America wages are much higher than in England, yet the general rate of profits is higher also, according to Mr. Mill. How do you reconcile the two facts? 301. Examine the following: “It seems to me that protection is absolutely essential to the encouragement of capital, and equally necessary for the protection of the American laborer.... He must have good food, enough of it, good clothing, school-houses for his children, comforts for his home, and a fair chance to improve his condition. To this end I would protect him against competition with the half-paid laborers of European countries.”—_Congressional Globe_. 302. An American newspaper has said of the burning of Chicago: “The money to replace what has been burned will not be sent abroad to enrich foreign manufacturers; but, thanks to the wise policy of protection which has built up American industries, it will stimulate our own manufactures, set our mills running faster, and give employment to thousands of idle working-men.” Comment on this passage.
303. On whom does a tax on imports, if not prohibitory, fall? 304. In what cases would duties on imported commodities fall on the producers? 305. Are taxes on imports in any way paid by foreigners? 306. Discuss the effects of duties on exports. 307. Trace the effects of duties on the importation of raw materials, and distinguish, with examples, between duties that violate and duties which do not violate the principle of free trade. 308. Is it possible for any country by legislative enactments to engross a larger share of the advantages of foreign trade than it would naturally have? Discuss the question fully. 309. “Those are, therefore, in the right who maintain that taxes on imports are partly paid by foreigners; but they are mistaken when they say it is by the foreign producer. It is not on the person from whom we buy, but on all those who buy from us, that a portion of our customs duties spontaneously falls.” Explain and examine the reasons for this conclusion. 310. State the principle which determines the relation between the amount of a country’s imports and that of its exports, and show how this relation is affected by a system of protective duties.
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