Protection or Free Trade

By Henry George

Originally published in 1886. Many of the earliest books, particularly those dating back to the 1900s and before, are now extremely scarce and increasingly expensive. Obscure Press are republishing these classic works in affordable, high quality, modern editions, using the original text and artwork.

• Language: English
• Publisher: Obscure Press
• Release date: Jan 23, 2017
• ISBN: 9781473348776

Book preview

PROTECTION

OR FREE TRADE

AN EXAMINATION OF THE TARIFF QUESTION

WITH ESPECIAL REGARD TO

THE INTERESTS OF LABOR

BY

HENRY GEORGE

1886

This abridgment was done by

F. C. R. Douglas, and published in 1929

Copyright © 2016 Read Books Ltd.

This book is copyright and may not be

reproduced or copied in any way without

the express permission of the publisher in writing

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from

the British Library

Contents

Henry George

Chapter 1 - Introductory

Chapter 2 - Clearing Ground

Chapter 3 - Protection As a Universal Need

Chapter 4 - Trade

Chapter 5 - Protection and Producers

Chapter 6 - Tariffs for Revenue

Chapter 7 - Tariffs for Protection

Chapter 9 - Exports and Imports

Chapter 10 - Confusions Arising from the Use of Money

Chapter 11 - Do High Wages Necessitate Protection?

Chapter 12 - Of Advantages and Disadvantages as Reasons for Protection

Chapter 13 - Protection and Producers

Chapter 14 - Protection and Wages

Chapter 15 - The Abolition of Protection

Chapter 16 - Inadequacy of the Free Trade Argument

Chapter 17 - The Real Strength of Protection

Chapter 18 - The Paradox

Chapter 19 - The Robber that Takes All that is Left

Chapter 20 - True Free Trade

Chapter 21 - Free Trade and Socialism

Chapter 22 - Practical Politics

Appendix A - On the Incidence of Protective Duties

Appendix B - On Adam Smith's Two Capitals Fallacy

Henry George

Henry George was born on 2nd September 1897, in Philadelphia, Pennsylvania, U.S.A. He was an American writer, politician and political economist, who was the most influential proponent of the land value tax and the value capture of natural resource rents – an idea known at the time as 'Single-Tax'.

George was the second of ten children born to Richard S. H. George and Catharine Pratt; a lower-middle-class family who provided a religious upbringing. Henry George was sent to the Episcopal Academy in Philadelphia, but chafed at its strict religiosity and left the academy without graduating. Instead he convinced his father to hire a tutor and supplemented this with avid reading and attending lectures at the Franklin institute. His formal education ended at the age of fourteen, and he went to sea as a foremast boy in April 1855 on the Hindoo – bound for Melbourne and Calcutta.

After these adventures, George returned to America and briefly considered prospecting for gold but instead started work the same year in San Francisco as a type setter. In California George fell in love with Annie Corsina Fox, an eighteen-year-old girl from Sydney who had been orphaned and was living with an uncle. The uncle, a prosperous, strong-minded man, was opposed to his niece's impoverished suitor. But the couple, defying him, eloped and married in late 1861, with Henry dressed in a borrowed suit and Annie bringing only a packet of books. The marriage was a happy one and four children were born to them.

After deciding against gold mining in British Columbia, George was hired as a printer for the newly created San Francisco Times, and was able to immediately submit editorials for publication, including the popular What the Railroads Will Bring Us., which remained required reading in California schools for decades. George climbed the ranks of the Times, eventually becoming managing editor in the summer of 1867. George worked for several papers, including four years (1871–1875) as editor of his own newspaper San Francisco Daily Evening Post, and some-time running the Reporter; a Democratic anti-monopoly publication. The George family struggled but George's increasing reputation and involvement in the newspaper industry lifted them from poverty.

George's political career began as a Lincoln Republican, but he then became a Democrat. He was a strong critic of railroad and mining interests, corrupt politicians, land speculators, and labour contractors. He first articulated these views in his 'What the Railroad Will Bring Us' column (previously mentioned). In it, George argued that the boom in railroad construction would benefit only the lucky few who owned interests in the railroads and other related enterprises, while throwing the greater part of the population into abject poverty. This earned him the enmity of the Central Pacific Railroad's executives, who helped defeat his bid for election to the California State Assembly.

On a visit to New York City one day, George was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. These observations supplied the theme and title for his 1879 book Progress and Poverty, which was a great success, selling over three million copies. In it, George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is possessed by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the main cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and indicated that such a system was equivalent to slavery – a concept somewhat similar to wage slavery.

By 1800, George was a popular writer and speaker, and moved to New York City permanently, becoming closely allied with the Irish nationalist community despite being of English ancestry. From there he made several speaking journeys abroad to places such as Ireland and Scotland where access to land was (and still is) a major political issue. In 1886 George campaigned for mayor of New York City as the candidate of the United Labor Party, the short-lived political society of the Central Labor Union. He polled second, more than the Republican candidate, Theodore Roosevelt. The election was won by Tammany Hall candidate Abram Stevens Hewitt, by what many of George's supporters believed was fraud. In the 1887 elections, George came a distant third in the vote for Secretary of State of New York.

George's first stroke occurred in 1890, after a global speaking tour concerning land rights and the relationship between rent and poverty. This stroke greatly weakened him, and he never truly recovered. Despite this, George tried to remain active in politics. Against the advice of his doctors, George campaigned for New York City mayor again in 1897, this time as an Independent Democrat. The strain of the campaign precipitated a second stroke, leading to his death four days before the election.

Henry George died on 29th October 1897 (aged fifty-eight). An estimated 100,000 people attended his funeral at Grand Central Palace, with countless more crowding outside and lining the streets of the funeral procession. It was thought to have been the largest funeral in New York history since the death of Abraham Lincoln.

Chapter 1

Introductory

Near the window by which I write a great bull is tethered by a ring in his nose. Grazing round and round, he has wound his rope about the stake until now he stands a close prisoner, tantalized by rich grass he cannot reach, unable even to toss his head to rid him of the flies that cluster on his shoulders. Now and again he struggles vainly, and then, after pitiful bellowings, relapses into silent misery.

This bull, a very type of massive strength, who, because he has not wit enough to see how he might be free, suffers want in sight of plenty, and is helplessly preyed upon by weaker creatures, seems to me no unfit emblem of the working masses.

In all lands, men whose toil creates abounding wealth are pinched with poverty, and, while advancing civilization opens wider vistas and awakens new desires, are held down to brutish levels by animal needs. Bitterly conscious of injustice, feeling in their inmost souls that they were made for more than so narrow a life, they, too, spasmodically struggle and cry out. But until they trace effect to cause, until they see how they are fettered and how they may be freed, their struggles and outcries are as vain as those of the bull. Nay, they are vainer. I shall go out and drive the bull in the way that will untwist his rope. But who shall drive men into freedom? Till they use the reason with which they have been gifted, nothing can avail. For them there is no special providence.

Under all forms of government the ultimate power lies with the masses. It is not kings nor aristocracies, nor landowners nor capitalists, that anywhere really enslave the people — it is their own ignorance. Most clear is this where governments rest on universal suffrage. Working men may mold to their will legislatures, courts, and constitutions. Politicians strive for their favor and political parties bid against one another for their vote. But what avails this? The little finger of aggregated capital must be thicker than the loins of the working masses so long as they do not know how to use their power.

My aim in this inquiry is to ascertain beyond peradventure whether protection or free trade best accords with the interests of those who live by their labor. I differ with those who say that with the rate of wages the state has no concern. I hold with those who deem the increase of wages a legitimate purpose of public policy. To raise and maintain wages is the great object that all who live by wages ought to seek, and working men are right in supporting any measure that will attain that object. Nor in this are they acting selfishly, for while the question of wages is the most important of questions to laborers, it is also the most important of questions to society at large. Whatever improves the condition of the lowest and broadest social stratum must promote the true interests of all. Where the wages of common labor are high, and remunerative employment is easy to obtain, prosperity will be general. Where wages are highest, there will be the largest production and the most equitable distribution of wealth. There will invention be most active and the brain best guide the hand. There will be the greatest comfort, the widest diffusion of knowledge, the purest morals, and the truest patriotism. If we would have a healthy, a happy, an enlightened, and a virtuous people, if we would have a pure government, firmly based on the popular will and quickly responsive to it, we must strive to raise wages and keep them high. I accept as good and praiseworthy the ends avowed by the advocates of protective tariffs. What I propose to inquire is whether protective tariffs are in reality conducive to these ends. To do this thoroughly I wish to go over all the ground upon which protective tariffs are advocated or defended, to consider what effect the opposite policy of free trade would have, and to stop not until conclusions are reached of which we may feel absolutely sure.

Whether protection does or does not increase national wealth, whether it does or does not benefit the laborer, are questions that from their nature must admit of decisive answers. That the controversy between protection and free trade, widely and energetically as it has been carried on, has as yet led to no accepted conclusion cannot therefore be due to difficulties inherent in the subject. It may in part be accounted for by the fact that powerful pecuniary interests are concerned in the issue, for it is true, as Macaulay said, that if large pecuniary interests were concerned in denying the attraction of gravitation, that most obvious of physical facts would have disputers. But that so many fair-minded men who have no special interests to serve are still at variance on this subject can only, it seems to me, be fully explained on the assumption that the discussion has not been carried far enough to bring out that full truth which harmonizes all partial truths.

Adam Smith demonstrated clearly enough that protective tariffs hamper the production of wealth. But Adam Smith either did not deem it prudent to go farther, or, as is more probable, was prevented from seeing the necessity of doing so by the atmosphere of his time and place. He at any rate failed to carry his great inquiry into the causes which from that original state of things in which the production of labor constitutes the natural recompense or wages of labor had developed a state of things in which natural wages seemed to be only such part of the produce of labor as would enable the laborer to exist. And, following Smith, came Malthus, to formulate a doctrine