=The Argument for Free Trade.=—Although the foregoing arguments for
protection have carried great weight in the United States during the
past fifty years there are many Americans who believe that trade with
foreign countries ought to be free from all tariff duties, or, at any
rate, free from all duties except such as may be needed to provide a
revenue. [Sidenote: 1. It creates artificial economic conditions.] Those
who believe in “free trade”, or in a “tariff for revenue only” make the
point that every country ought to devote itself to those industries
which it can carry on most advantageously and should not try to produce
for itself the things which can more cheaply be imported from other
countries. Protection, they claim, merely diverts capital and labor into
industries for which a country is not naturally adapted, and thus makes
production expensive. [Sidenote: 2. It keeps prices up.] It keeps wages
up by keeping prices up, and thus deprives the workman of the advantage
which high wages are supposed to bring. [Sidenote: 3. It fosters
industrial monopolies.] The policy of protection is also criticised on
the ground that it fosters the creation of great industrial
combinations, leads to the establishment of monopolies, and encourages
corruption in politics by giving particular industries a financial
interest in governmental action. The free traders believe that there is
no more reason for protective duties upon trade between different
nations than there is for similar duties upon trade among the several
states of the Union.
[Sidenote: Why foreign trade is important.]
=The Encouragement of Foreign Commerce.=—The work of the national
government is not confined to the regulation and restriction of
commerce; it is concerned with the encouragement and promotion of trade
as well. This promotion of foreign trade is an important branch of the
government’s work because the prosperity of the United States depends to
a considerable extent upon its commerce with other countries. America
produces a large surplus of grain, meat, cotton, and other merchandise
which must be marketed abroad. On the other hand there are many
commodities, such as sugar, tea, coffee, rubber, and silk which cannot
be produced in sufficient quantities here and hence must be imported.
The aim of the government is to help our exporters find the best foreign
markets for their goods and to facilitate the acquisition of such
foreign products as the country requires. This help is rendered in
various ways, by making commercial treaties with foreign countries, by
maintaining a consular service, by giving encouragement to American
shipping, and by the creation of a Department of Commerce in the
national administration.[166]
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