A history of economic doctrines : $b from the time of the physiocrats to the present dayGide, Charles
History
A history of economic doctrines : $b from the time of the physiocrats to the present day
Gide, Charles
Economics -- History
List’s Protectionism, as we may guess from what precedes, possesses
original features. It is not a universal remedy which may be
indifferently applied to every country at any period or to all its
products. It is a particular process which can only be used in
certain cases and under certain conditions. Subjoined are some of the
characteristic traits of this Protectionism which List himself has neatly
described.
(1) The Protectionist system can only be justified when it aims at the
industrial education of a nation.[586] It is thus inapplicable to a
nation like the English, whose industrial education is already complete.
Nor should it be attempted by countries that have neither the aptitude
nor the resources necessary for an industrial career. The nations of the
tropical zone seem destined to the pursuit of agriculture, while those of
the temperate zone are accustomed to engage in many and varied forms of
production.[587]
(2) But a further justification is also necessary. It must be shown
that the nation’s progress is retarded by the competition of a powerful
manufacturing rival which has already advanced farther on the industrial
path.[588] “The reason for this is the same as that why a child or a boy
in wrestling with a strong man can scarcely be victorious or even offer
steady resistance.”[589] This was precisely the case with Germany in her
struggle with England. (It is interesting to come across a full account
of the process of “dumping” in List’s letters to Ingersoll. “Dumping,”
which has received much attention lately in connection with the trust
movement, consists in selling at a low price in foreign markets in order
to keep up prices in the home market.[590])
(3) Even in that case Protection can be justified “only until that
manufacturing Power is strong enough no longer to have any reason to fear
foreign competition, and thenceforth only so far as may be necessary for
protecting the inland manufacturing power in its very roots.”[591]
(4) Lastly, Protection ought never to be extended to agriculture.
The reasons for this exception are that on the one hand agricultural
prosperity depends to a great extent upon the progress of
manufactures—the protection of the latter indirectly benefits the
former—and on the other hand an increase in the price of raw materials or
of food would injure industry. Moreover, there exists a natural division
which is particularly advantageous to the system of cultivation pursued
by each country, a division dependent upon the natural qualities of their
soils, which Protection would tend to destroy. This territorial division
does not exist for manufactures, “for the pursuit of which every nation
in the temperate zone seems to have an equal vocation.”[592]
Public-domain text, read in full here on John Shaqi.
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