The Benefits of Protection Analysed.

Evening Star, Issue 8769, 9 March 1892, Page 4

The Benefits of Protection Analysed.

A highly instructive statement has been prepared by a well-known Italian economist, Signor Vilvredo Pareto, showing the enormous burden imposed on his countrymen by the maintenance of a proteoted iron and steel industry. Most people are aware that this industry is an exotic in Italy, since all, or nearly all, the coal required for its use is imported. It has, however, made exceedingly rapid progress during the last few years under the stimulus of high prices brought about by heavy Customs duties on foreign iron and steel, In 1886 the home, production was 1,471,000 quintals, and in 1890 it had increased to 3,395,200 quintals. Within the same interval the imports declined from 1,870,300 quintals to 656,400 quintals. An unreflecting Italian patriot would of course regard these figures with satisfaction and pride. But in the caße of Signor Pareto they exoite very different feelings. He takes the 1890 Italian consumption of home and foreign produce—viz., 4,051,600 quintals—as the basis of a further computation. The average rate of duty paid npon the foreign portion waß 7.44fr per quintal, and by so much at least the Italian people paid more than they need have done for the whole of their supply. In thia way* an extra and gratuitous outlay of L 1,206,240 was inourred. A portion of thia sum mast be deducted, however, for the revenue derived by the Government from import duties, and the remainder, amounting to L 884.000, represents the minimum net loss to the country. Anticipating the reply that, on the other hand, a certain number of Italians have bene, fited by being employed in the proteoted industries, he points out that if the sum needlessly spent in the purchase of homemanufactured iron and steel in 1890 had been divided amongst the 14,518 men, women, and children employed in these industries,

eaoh of them would have received nearly L6l for doing nothing, an amount mnoh in ezoess of their aotnal earnings, many of them receiving in wages not more than 2fr per day, or L 25 dm annum, {eaoh, and in one ironworks, of which exact particulars are ftven, the average earnings of men is only ,38 per annum. Of oourse, the greater part of the L 884.000 uselessly spent by Italian consumers is pure waste, due to the natural unsuitability of the oountry for this kind of industry. But a considerable portion of it goes in a way not noticed by Signor Pareto. The oapital sunk in Italian iron and steel works is largely owned by French, Swiss, and English investor?, and the profits of their enterprises, drawn from the profits of the people of Italy, are sent out of the oountry.—' Manchester Guardian.'