Yet it is to be noted that the Americans have prospered, on the whole, under protective tariffs which have been as ingeniously and comprehensively foolish as could well be contrived. There is even some color of reason in the contentions of the protectionists that the more reasonable tariffs have commonly been more depressing to industry than the most imbecile of them. All of which should be disquieting to the advocates of free trade. The defect of the free-trade argument, and the disappointment of free-trade policies, lies in overlooking the fact that in the absence of an obstructive tariff substantially the same amount of obstruction has to be accomplished by other means, if business is to prosper. And business prosperity is the only manner of prosperity known or provided for among the civilised nations. It is the only manner of prosperity on which the divine right of the nation gives it a claim. A protective tariff is only an alternative method of businesslike sabotage. If and so far as this method of keeping the supply of goods within salutary bounds is not resorted to, other means of accomplishing the same result must be employed. For so long as investment continues to control industry the welfare of the community is bound up with the prosperity of its business; and business can not be carried on without reasonably profitable prices; and reasonably profitable prices can not be maintained without a salutary limitation of the supply; which means slowing down production to such a rate and volume as the traffic will bear.
A protective tariff is only one means of crippling the country's industrial forces, for the good of business. In its absence all that matter will be taken care of by other means. The tariff may perhaps be a little the most flagrant method of sabotage by which the vested interests are enabled to do a reasonably profitable business; but there is nothing more than a difference of degree, and not a large difference at that. So long as industry is managed with a view to a profitable price it is quite indispensable to guard against an excessive rate and volume of output. In the absence of all businesslike sabotage the productive capacity of the industrial system would very shortly pass all reasonable bounds, prices would decline disastrously and overhead charges would not be covered, fixed charges on corporation securities and other credit instruments could not be met, and the whole structure of business enterprise would collapse, as it occasionally has done in times of "over-production." There is no doing business without a fair price, since the net price over cost is the motive of business. A
protective tariff is, in effect, an auxiliary safeguard against overproduction. Incidentally the fact that its imposition does not result in insufferable hardship serves also to show that the new order of industry is highly productive, quite inordinately productive in fact. And it is a divine right of the nation to use its discretion and offset this inordinate efficiency of its common stock of knowledge by adroitly crippling its own commerce and the commerce of its neighbors, for the benefit of those vested interests that are domiciled within the national frontiers.
But the divine right of national self-direction also covers much else of the same description, besides the privilege of setting up a tariff in restraint of trade. There are many channels of such discrimination, of divers kinds, but always it will be found that these channels are channels of sabotage and that they serve the advantage of some group of vested interests which do business under the shelter of the national pretensions.
There are foreign investments and concessions to be procured and safeguarded for the nation's business men by moral suasion backed with warlike force, and the common man pays the cost; there is discrimination to be exercised and perhaps subsidies and credits to be accorded those of the nation's business men who derive a profit from shipping, for the discomfiture of alien competitors, and the common man pays the cost; there are colonies to be procured and administered at the public expense for the private gain of certain traders, concessionaires and administrative office-holders, and the common man pays the cost. Back of it all is the nation's divine right to carry arms, to support a competitive military and naval establishment, which has ceased, under the new order, to have any other material use than to enforce or defend the businesslike right of particular vested interests to get something for nothing in some particular place and in some particular way, and the common man pays the cost and swells with pride.
