Written: mid-June, 1881
Published: No. 7, June 18, 1881, as a leading article
Reproduced from the newspaper
Transcribed: [email protected], Labor Day 1996
On Thursday, June 9, in the House of Commons, Mr. Monk (Gloucester) proposed a resolution to the effect that
"no commercial treaty with France will be satisfactory which does not tend to the development of the commercial relations of the two countries by a further reduction of duties".
A debate of some length ensued. [1] Sir C. Dilke, on behalf of the Government, offered the mild resistance required by diplomatic etiquette. Mr. A. J. Balfour (Tamworth) [2] would compel foreign nations, by retaliatory duties, to adopt lower tariffs. Mr. Slagg (Manchester) would leave the French to find out the value of our trade to them and of theirs to us, even without any treaty. Mr. Illingworth (Bradford) despaired of reaching free-trade through commercial treaties. Mr. Mac Iver (Birkenhead) declared the present system of free-trade to be only an imposture, inasmuch as it was made up of free imports and restricted exports. The resolution was carried by 77 to 49, a defeat which will hurt neither Mr. Gladstone's feelings nor his position.
This debate is a fair specimen of a long series of ever-recurring complaints about the stubbornness with which the stupid foreigner, and even the quite as stupid colonial subject, refuse to recognise the universal blessings of free-trade and its capability of remedying all economic evils. Never has a prophecy broken down so completely as that of the Manchester School [3] -- free-trade, once established in England, would shower such blessings over the country that all other nations must follow the example and throw their ports open to English manufactures. The coaxing voice of the free-trade apostles remained the voice of one crying in the wilderness. Not only did the Continent and America, on the whole, increase their protective duties [4]; even the British Colonies, as soon as they had become endowed with self-government, [5] followed suit; and no sooner had India been placed under the Crown than a 5 per cent duty on cotton goods was introduced even there, [6] acting as an incentive to native manufactures.
Why this should be so is an utter mystery to the Manchester; School. Yet it is plain enough.
About the middle of last century England was the principal seat of the cotton manufacture, and therefore the natural place where, with a rapidly rising demand for cotton goods, the machinery was invented which, with the help of the steam engine, revolutionised first the cotton trade, and successively the other textile manufactures. The large and easily accessible coalfields of Great Britain, thanks to steam, became now the basis of the country's prosperity. The extensive deposits of iron ore in close proximity to the coal facilitated the development of the iron trade, which had received a new stimulus by the demand for engines and machinery. Then, in the midst of this revolution of the whole manufacturing system, came the anti-Jacobin and Napoleonic wars [7] which for some twenty-five years drove the ships of almost ail competing nations from the sea, and thus gave to English manufactured goods the practical monopoly of all Transatlantic and some European markets. When in 1815 peace was restored, England stood there with her steam manufactures ready to supply the world, while steam engines were as yet scarcely known in other countries. In manufacturing industry, England was an immense distance in advance of them.
But the restoration of peace soon induced other nations to follow in the track of England. Sheltered by the Chinese Wall of her prohibitive tariff, [8] France introduced production by steam. So also did Germany, although her tariff was at that time far more liberal [9] than any other, that of England not excepted. So did other countries. At the same time the British landed aristocracy, to raise their rents, introduced the Corn Laws, [10] thereby raising the price of bread and with it the money rate of wages. Nevertheless the progress of English manufactures went on at a stupendous rate. By 1830 she had laid herself out to become "the workshop of the world". To make her the workshop of the world in reality was the task undertaken by the Anti-Corn Law League. [11]
There was no secret made, in those times, of what was aimed at by the repeal of the Corn Laws. To reduce the price of bread, and thereby the money rate of wages, would enable British manufacturers to defy all and every competition with which wicked or ignorant foreigners threatened them. What was more natural than that England, with her great advance in machinery, with her immense merchant navy, her coal and iron, should supply all the world with manufactured articles, and that in return the outer world should supply her with agricultural produce, corn, wine, flax, cotton, coffee, tea, etc.? It was a decree of Providence that it should be so, it was sheer rebellion against God's ordinance to set your face against it. At most France might be allowed to supply England and the rest of the world with such articles of taste and fashion as could not be made by machinery, and were altogether beneath the notice of an enlightened millowner. Then, and then alone, would there be peace on earth and goodwill towards men; then all nations would be bound together by the endearing ties of commerce and mutual profit; then the reign of peace and plenty would be for ever established, and to the working class, to their "hands", they said: "There's a good time coming, boys -- wait a little longer." Of course the "hands" are waiting still.
But while the "hands" waited the wicked and ignorant foreigners did not. They did not see the beauty of a system by which the momentary industrial advantages possessed by England should be turned into means to secure to her the monopoly of manufactures all the world over and for ever, and to reduce all other nations to mere agricultural dependencies of England -- in other words, to the very enviable condition of Ireland. They knew that no nation can keep up with others in civilisation if deprived of manufactures, and thereby brought down to be a mere agglomeration of clodhoppers. And therefore, subordinating private commercial profit to national exigency, they protected their nascent manufactures by high tariffs, which seemed to them the only means to protect themselves from being brought down to the economical condition enjoyed by Ireland.
We do not mean to say that this was the right thing to do in every case. On the contrary, France would reap immense advantages from a considerable approach towards Free Trade. German manufactures, such as they are, have become what they are under Free Trade, and Bismarck's new Protection tariff [12] will do harm to nobody but the German manufacturers them" selves. But there is one country where a short period of Protection is not only justifiable but a matter of absolute necessity -- America.
America is at that point of her development where the introduction of manufactures has become a national necessity, This is best proved by the fact that in the invention of labour-saving machinery it is no longer England which leads, but America. American inventions every day supersede English patents and English machinery. American machines are brought over to England; and this in almost all branches of manufactures Then America possesses a population the most energetic in the world, coalfields against which those of England appear almost as a vanishing quantity, iron and all other metals in plenty. And is it to be supposed that such a country will expose its young and rising manufactures to a long, protracted, competitive struggle with the old-established industry of England, when, by a short term of some twenty years of protection, she can place them at once on a level with any competitor? But, says the Manchester School, America is but robbing herself by her protective system. So is a man robbing himself who pays extra for the express train instead of taking the old Parliamentary train -- fifty miles an hour instead of twelve.
There is no mistake about it, the present generation will see American cotton goods compete with English ones in India and China, and gradually gain ground in those two leading markets; American machinery and hardware compete with the English makes in all parts of the world, England included; and the same implacable necessity which removed Flemish manufactures to Holland, Dutch ones to England, will ere long remove the centre of the world's industry from this country to the United States. And in the restricted field which will then remain to England she will find formidable competitors in several Continental nations.
The fact cannot be longer shirked that England's industrial monopoly is fast on the wane. If the "enlightened" middle class think it their interest to hush it up, let the working class boldly look it in the face, for it interests them more than even their "betters". These may for a long time yet remain the bankers and money-lenders of the world, as the Venetians and the Dutch in their decay have done before them. But what is to become of the "hands" when England's immense export trade begins to shrink down every year instead of expanding? If the removal of the iron shipbuilding trade from the Thames to the Clyde was sufficient to reduce the whole East-end of London to chronic pauperism, what will the virtual removal of all the staple trades of England across the Atlantic do for England?
It will do one great thing: it will break the last link which still binds the English working class to the English middle class. This link was their common working of a national monopoly. That monopoly once destroyed, the British working class will be compelled to take in hand its own interests, its own salvation, and to make an end of the wages system. Let us hope it will not wait until then.
NOTES From the MECW
[1] The main question discussed in the House of Commons during the debate on concluding a commercial treaty with France was the new common customs tariff adopted by the French government on May 8, 1881, which provided for some restrictions on imports in the interest of French industry. Despite the fact that the talks about the new treaty were repeatedly resumed throughout the year, the parties concerned failed to find an acceptable solution.
[2] A. J. Balfour was elected to Parliament from Hertford, in Southeast England.
[3] The Manchester School -- a trend in economic thinking which reflected the interests of the industrial bourgeoisie. Its supporters, known as Free Traders, advocated removal of protective tariffs and non-intervention by the government in economic life. The centre of the Free Traders' agitation was Manchester, where the movement was headed by two textile manufacturers, Richard Cobden and John Bright. In the 1840s and 1850s, the Free Traders were a separate political group, which later formed the Left wing of the Liberal Party.
[4] This refers to the protective tariff tabled in Congress by the Republican Justin Smith Morrill and passed by the Senate on March 2, 1861. It raised customs duties considerably. Later, during the American Civil War and in 1867 and 1869, the tariff was repeatedly revised, and by 1869 it had raised the average size of import duties to 47 per cent. In 1870 and 1872, these duties were lowered to 10 per cent, but this was cancelled in 1875.
[5] The first British colony which was granted the status of a dominion (in 1867) was Canada.
[6] After the abolition of the East India Company in August 1858 India was placed under direct administration of the British Crown. Seeking to protect the national textile industry, the authorities introduced a 5-per cent duq on the English cotton goods imported by India. However, as early as 1879 the Lancashire manufacturers managed to get these duties cancelled, and in 1882 the duties on other goods were also abolished.
The British East India Company, was founded in 1600. It enjoyed a monopoly of trade with the East Indies and played a decisive part in the establishment of the British colonial empire.
[7] The reference is to the coalition wars of European states against the French Republic (1792-1802) and against Napoleon (1805-15).
[8] In 1814 and 1822 the French authorities introduced high import tariffs on iron, in 1819, on grain, cattle and wool, and in 1826, doubled the tariffs on pig iron and steel.
[9] The economic development of Germany was most adversely affected by her political fragmentation, the absence of universal commercial laws, internal customs barriers, and the multiplicity of currencies and of the weight and measure systems. On May 26, 1818 Prussia alone passed a law on the abolition of internal duties and the introduction of a universal customs tariff.
[10] The Corn Laws, the first of which were passed as early as the 15th century, imposed high import duties on agricultural products in order to maintain high prices for these products on the domestic market. The Corn Laws served the interests of the big landowners.
[11] The Anti-Corn Law League was founded in 1838 by the Manchester manufacturers and Free Trade leaders Richard Cobden and John Bright. By demanding complete freedom of trade, the League fought for the abolition of the Corn Laws. In this way, it sought to weaken the economic and political position of the landed aristocracy and lower the cost of living, thus making possible a lowering of the workers' wages. After the repeal of the Corn Laws in 1846), the League ceased to exist.
[12] The campaign for the introduction of protectionist laws unfolded in Germany at the outset of the 1873 crisis. On February 15 1876, a number of protectionist unions formed a single organization, Centralverband Deutscher Industrieller zur Beförderung und Wahrung nationaler Arbeit. In 1876, during the agrarian crisis, big landowners, Prussian Junkers above all, joined the campaign. In October 1877, the industrial and agrarian advocates of the reform concluded an agreement. In March 1878, a non-partisan Freie wirtschaftliche Vereinigung was formed, which 204 deputies joined at the very first session of the Reichstag in September-October 1878. In December of that year, Bismarck submitted his preliminary draft of the customs reform to a specially appointed commission. On July 12 1879, the final draft was approved by the Reichstag, and came into force on July 15. The new customs tariff provided for a substantial increase in import taxes on iron, machinery and textiles, as well as on grain, cattle, lard, flax, timber, etc.
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