Economics Volume II: Modern Economic ProblemsFetter, Frank A. (Frank Albert)
General
Economics Volume II: Modern Economic Problems
Fetter, Frank A. (Frank Albert)
Economics
This argument is somewhat subtle, but probably is the soundest one in
the theory of protection. The supposed conditions seldom occur in
a marked measure, but they may exist, and probably have existed
in America. When the great system of internal transportation was
developed in the United States before that of the other new countries
(say from 1840 to 1894), this country had such peculiar advantages for
the production of food that the quantity was enormously increased
and agricultural prices fell.[11] At such a time the tariff may have
worked toward checking the fall and earlier reestablishing a more
favorable ratio. It did this by making prices of manufactured goods in
this country artificially higher and thus tempting men from rural to
urban callings. But the limited application of the principle must be
recognized. The potential competition of undeveloped countries on all
sides, seeking to develop their resources, and profiting by the higher
prices of food in the world-market caused by our tariff, threatens
the peculiar advantages of the favored land. Russia, Argentina, and
Australia have rapidly taken the place of America in supplying food to
Western Europe, in part, no doubt, because we refused to take Europe's
goods in trade. A great nation with its manifold interests is not
eminently fitted to practise the gentle art of monopoly.
The period in America from about 1840 to 1890 shows certain absurd
contradictions in economic policy. By governmental action, national,
state, and municipal, enormous grants of money and lands were made in
aid of transportation. Canals, roads, and railways were built into
new agricultural territory far faster than was healthy and normal. A
prodigal land policy put a premium upon a wastefully rapid extension
of the farming area. These things were done to favor the agricultural
states, but agricultural prices fell so greatly that our farmers for
a long period were nowhere prosperous, and great numbers of them,
both in the East and in the West, were ruined. At the same time a
high tariff on nearly everything the farmers needed to buy was the
political spoil obtained by the Eastern and Middle states. This
further depressed the condition of the farmers and forced them or
their sons into urban industries. A slower development would have
occurred without the waste of national resources in such conflicting
policies of artificial stimulation.
Public-domain text, read in full here on John Shaqi.
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