a hindrance to Imperial action. We have solved the constitutional problems which will continue to be a cause of embarrassment and distraction for the chief continental States, especially Germany and Russia: while even by comparison with the United States the comparative moderation of our social and economic conflicts, the homogeneous strength of the stock, the historic unity between all classes of the nation, and the yet unbroken greatness of continuous traditions, are elements of power which never can count for nought. Our experiences during the late war proved once for all that vigorous and competent government can always rely with complete confidence upon the instinctive political discipline and good sense of a sound and staunch democracy. Our sea-power relatively never was so potent an instrument as now.' Every day in the last few weeks has been a new revelation of the traversable and connecting character of the sea, and has shown us again that our dominion is more effectually united by water than the uninterrupted territory of Russia is united by land. Splendid isolation is evidently over, probably well over. If we manage our future alliances with prudence and foresight there is no conceivable attempt to disrupt the Empire that we might not provide against. Our temporary disadvantages, owing to the swerving under laissez faire from the old line of national policy, are in several respects severe, and capable either of fatal issues or of complete remedy. If we can preserve the Sea-State for one generation longer, securing through Federal Trade its economic development and political union, we shall be certain of that increase of white population, wealth, and commerce, which will make the British Empire a permanent system, established upon a concrete basis, and relying for the full security of its future upon its own co-ordinated Power. APPENDIX We shall best recapitulate the argument and throw the cosmopolitan and the national theories of economics into the clearest contrast if we set out here the chief clauses of the London Free Trade Petition of 1820 (admittedly the ablest short statement of the laissez faire case ever made), and attempt an answer paragraph by paragraph from the point of view of the modern dynamic or progressive school. PETITION. To the Honourable the Commons, the petition of the Merchants of the City of London. Sheweth : 1. That foreign commerce is eminently conducive to the wealth and prosperity of a country, by enabling it to import the commodities for the production of which the soil, climate, capital, and industry of other countries are best calculated, and to export in turn payment for those articles for which its own situation is better adapted. 2. That freedom from restraint is calculated to give the utmost extension to foreign trade, and the best direction to the capital and industry of the country. ANSWER. 1. The laissez faire movement begins here by ignoring the Empire. The advantages claimed for foreign. commerce belong more accurately to maritime commerce. Happily for us our maritime commerce need not be foreign, and may be to a large or a main extent inter-Imperial. Even under free exchange inter-Imperial trade would be, transaction for transaction far more conducive than foreign to the wealth and power of the Imperial State, by giving at least equal economic advantages to the island, and securing on the other side the parallel development of British population and territory, instead of foreign population and territory. See also below. 2. There is no freedom from restraint in foreign trade. Measures for the development of the Empire are calculated to give the utmost extension to our maritime trade by securing the fullest exchange of goods for goods. The best direction will be given to the capital and industry of the country by the interference of the State for the purpose of redressing unequal conditions of competition and providing the larger scope at home, which is the only possible compensation for restrictions abroad. PETITION. 3. That the maxim of buying in the cheapest market and selling in the dearest, which regulates every merchant in his individual dealings, is strictly applicable as the best rule for the whole nation. 4. That a policy founded on these principles would render the commerce of the world an interchange of mutual advantages, and diffuse an increase of wealth and enjoyments among the inhabitants of each State. 5. That unfortunately a policy the very reverse of this has been and is acted upon by the Government of this and every other country, each trying to exclude the production of other countries with the specious and wellmeant design of encouraging its own ANSWER. 3. The protected manufacturer under tariffs leaving raw material free is the person who makes the most complete application of this principle. But the whole formula as applied to modern economic conditions is an antiquated and unreal one. The principle of maximum development is as follows to utilise the largest possible supply of what you consume, to cater for the largest possible demand with respect to what you produce. The State, as in the case of cotton, can be more efficient than laissez faire in actually creating larger and cheaper supply as well as in securing for the nation wider markets. We may revise this famous principle as follows-buy in the fullest market and sell in the largest. 4. We have not induced the world to accept this view, because it is certainly not true as written. Even free exchange as Mill recognised in the celebrated heretical paragraph can obviously confer equal advantage only upon equally developed nations. Foreign nations could not have developed their aptitude for manufacture except by protection against the overwhelming advantage we possessed when they began. But their policy of national development has enormously increased the total world-supply of manufactured commodities, and has diffused the maximum increase of wealth and enjoyments among the inhabitants of competitive States. For us a policy founded on the principles of Imperial development will secure the maximum increase of wealth and power for all the inhabitants, whether insular or transoceanic of the Imperial Sea-State. 5. Answered by Mill, modern history, and previous paragraphs. The tariff only restrains competitive manufacture and encourages to the fullest extent the free import of all the foreign production that is best calculated to nourish home production. 1 6. That the prevailing prejudices in favour of the protective or restrictive system may be traced to the erroneous ciently realised is that free exchange does not necessarily mean the largest exchange; while the largest produc tion means inevitably the largest trade. This is why the policy has prevailed, of development and why foreign com merce and general consuming-power were never so great countries 6. This as now. is the in the "protected" core of the contro versy-that since imports must create exports to pay for them under a free all right. supposition that every importation of import system, all things must be PETITION. certainly a more beneficial employment to our own capital and labour. ANSWER. than they are. Foreign tariffs prevent us from paying for competitive im ports by the production of articles to which we are best adapted. We might, theoretically, import enough foreign manufacture to ruin all British manufacture, and might balance the account by exhausting our coal seams. The principle of balance, therefore, gives no security whatever for a country's manufacturing position. The policy which frees all developing imports and taxes all competitive ones gives the fullest security. It means the largest production and the largest exchange. J. L. GARVIN. |