PREFERENTIAL TRADE

Evening Star, Issue 12027, 27 October 1903, Page 3

PREFERENTIAL TRADE

A SYMPOSIUM OF POLITICAL ECONOMISTS' VIEWS. Among the persons eminently qualified to examine Mr Chamberlain's,project from a politico-economical and international or a sociological point of view may-be mentioned Sir Robert Giffen, M. Yves Guyot, Professor Lujo Brentano, Dr John Beattie Crozier, Mr Benjamin Kidd, Lord Welby, Mr L. H. Courtney, and Mr Edward Dicey, who contribute papers to the 'Nineteenth Century,' the ' Fortnightly Review,' and the ' Contemporary.' The suggested return to Protection is also considered by M. Maltman Barrie fiom the workman's point of view, and it is made the object of a searching investigation by the two able writers who contribute to the ' Fortnightly' under the pen names of " Caichas" and " Diplomaticus," and who, in this instance, arrive at opposite conclusions. Sir Robert Giffen, the well-known statistician, described a year ago the hope of' a British Zollverein as a dream, and argued that Freetrade 'within the Empire was the ideal at which British and colonial statesmen should aim. Even then, however, he admitted that the ideal was very iar from atkunability, and careful readers of his former article will not, therefore, be surprised that be is inclined to support Mr Chamberlain's proposal—not, indeed, on. economic but on political grounds. The conclusion at which he arrives after a prolonged discussion of the projected Preferential Tariff is that while a system of reciprocal preferences holds out no promise of economic advantage to the Mother Country, or even to the colonies, and would be "a licklish thing to establish and maintain, bringing with it inevitable deceptions and misunderstandings, which might tend to disintegrate the Empire rather than bind it together, yet there are good political reasons at this juncture for taking counsel with the colonies as to the practical issues of imperial union, and for arranging with them a good understanding on this topic. He adds that as the political question is much more importaut than the economic one, the former must be decisive of England's action. What he has in mind when he speaks of the political question is the obviously reasonable wish—called into activity by Germany's disposition to retaliate upon Canada for the latter's concession of a preference to British imports—that the commercial relations between the British Empire and foreign countries may be adjusted on the basis of Imperial unity, giving foreign countries no opening for the attempts that have been made to distinguish between different parts of the. Empire, and to penalise any part for its dealings in matter of inter-Imperial .trade. In short. Sir Robert Giffen can see no really plausible objection to Great Britain's entering at this time for purely political reasons on common action with the colonies. M. Yves Guyot, ex-Minister of the French Republic, who looks at Mr Chamberlain's programme through the spectacles of a French Freetrader, maintains that if England adopts a Protectionist system she will encourage other nations to continue it in an aggravated form, and she will lose all the benefit which she gained from her policy of free exchange. There is a great deal to be said for that proposition, and it is a pity that M. Guyot should have undertaken to uphold it by an assertion that will not bear examination. He says that for more than half a. century England has been bringing its economic system into harmony r.-irh the discoveries of science and the proj;: ess of industry, whereas the legislators of other nations have followed a policy which inns counter to every effort made by inventors to lower the" cost price of goods. M. Guyot ought to know that nowhere have fie labors 0/ inventors to lower the cost I. rice of goods been so vigorously and successfully stimulated as in Germanv and the United States. It is precisely" in Free:rading Great Britain that labor-saving derices meet with reluctant and tardv acceptance. By Professor Lujo Brentano the matter is considered from the view point of a theoretical politico-economist. What, he asks, would be the result of the realisation of Mr Chamberlain's commercial programme? We are reminded that the majority of the goods which serve as the equivalent of the claims of British capitalists come from foreign countries. Now if these goods are subjected to an import tax it is obvious that in proportion as this takes place the profit upon British investments abroad will suffer a diminution. Does Chamberlain, asks Professor Brentano, intend thereby to entice English capital out of such foreign investments to investments in the British colonies? Up to the present tone the British colonies have not been considered at all capable of employing the British capital which England has invested in non-British, countries, and they are as yetlacking in products which, they could offer as an equivalent for the claims of British capitalists upon, the foreigner. The execution of Chamberlain's project would mean colossal reduction of the income drawn by English capitalists from abroad—an income amounting] to a hundred millions sterling. With this diminution of the capitalist's income, his demand for home products would also lessen, and those who have hitherto supplied these products would come to want. In view of these facts and deductions, Professor Brentano is not surprised that the British middle classes should view with profound mistrust Mr Oiamberlam's patriotic pretensions. Unexpectedly enough, the two rival experts in the philosophy of history, Dr John Beattie Crozier and Mr Benjamin Kidd, are this time both on the same side, and that Mr Chamberlain's. Dr Crozier, for his part, is an outright Protectionist.' Ee wants Protection for England's sake, primarily and mainly. He would have preferred Protection for the United Kingdom specifically and independently, leaving Preferential treatment, as between the Mother Country and the colonies, to be accorded on either side spontaneously and gratuitously, in pursuance of the example set by Canada, rather than with the slightest tinge of bargain or sale between the parties. He thinks, however, that if Mr Chamberlain and colonial statesmen can see their way to construct- a business scheme winch shall draw the bonds of Imperial unity tighter, and work without friction, the endeavor can be fraught with nothing but good. Mr Benjamin Kidd describes as "hollow" the cry as to the danger to which the food of the British people would be exposed ty Mr Chamberlain's policy. He insists that no scheme of Preferential tariffs would put the food of the British people in such jeopardy as that with which it is confronted now, when the United States and Germany are threatening to take work out of their hands, and, consequently, bread out of their mouths. The retaliation and tariff wars with which the United Kingdom is threatened should Mr Chamberlain's programme be adopted, Mr Kidd regards as "largely dressed-up bogies." On the whole, he considers the project of a British Zollverein worthy of England's great traditions. He holds that to transform a world-wide Empire of fragments and sentiment into a commonwealth with a common purpose; to endeavor to uphold therein the standard's of civilisation for whkh Englishmen have fought and endured, and the standards of life for which British labor has struggled and suffered; to endeavor thereby to introduce some order and moral sense into " the gigantic squalor of those tendencies in modern trade, production, and finance of which the Carnegies and Pierpont Morgans of the time have become the embodiment"—this, in Mr Kidd's opinion, is a cause worth living for, worth fighting for, and worth enduring for. In a lucid and cogent article, Lord Welby, who is firmly opposed to a Preferential tariff, recalls that in 1881 Mr Chamberlain said: " A tax oh food would mean a decline in wages. It would certainly involve a reduction in their purchasing value. The same amount of money would have a smaller purchasing power." 'Mr Chamberlain went on in 1881 to say that a tax on food would mean more than this, for it would raise the price of every article produced in the united Kingdom, and would indubitably bring about the loss cf the gigantic export trade which the industry and energy of the British people, working under conditions of absolute freedom, have been able to secure. Lord Welby points out that the conditions have not changed in the interval. On the contrary, Great Britain's export trade, working under conditions of absolute freedom, has become more gigantic. If pa food meant a decline in wages in 182 L it would mean a decline now. Mr

Chamberlain was then President of the Board of Trade, 'with all the information before him which a British Minister of Commerce can command. He has now changed his mind; but if his judgment in 1881, pronounced under all the advantages of the position then ocenpied by him, was hasty and sufficiently considered, what guarantee is there, asks Lord Welby, that it is sound now? Thoughtful men do not change their convictions easily, and, in the presence of such a change of front, prudent persons must have some doubts as to the capacity of the proponent of a Preferential tariff. Mr Chamberlain himself admits that he would tax the food of the British people. Lord Welby reminds us of what Burke said concerning the expediencv of such a course "Of all things," said Burke, "an indirect tampering with the trade in provisions is the most dangerous. My opinion is against the overdoing of any sort of administration, and more especially aiainst that most momentous of all meddling on the part- ol authority—the meddling with the subsistence of the people." Mr L. H. Courtney, who, it may be remembered, was one of the Liberals who seceded when Mr Gladstone introduced bis first Home Rule Bill, and who has since been Vice-Speaker of the House of Commons, would describe the proposal of a Pre ferential tariff as "Mr Chamberlain's balloon." He is convinced that England's leadership in the world's industries is passing away, and that she has already ceased to be first in more than one commanding department. He holds, however, that there could be no greater madness than, foi a nation in such a position to abandon Freetrade. He deems it absolutely certain that any return to Protection would only make England's position worse. He finds an analogy to the policy which he would pronounce suicidal in an illustration recently used by Mr Balfour. The British Premiei likened the conduct of an international commerce to the management of a balloon, and suggested that by abolishing every Protective duty England had thrown out every sand-ba<r. What, asks Mr Courtney, should we think of the aeronauts who, finding the balloon still falling, should agree that something must be done, and then, happy thought, should determine, in lieu of sandbags, to let out some gas? This would he, Mr Courtney holds, a precise parallel to the wisdom of the statesman who, in view oi England being distanced in manufacturing production by another nation, proposes tc increase her own efficiency in the competition by crippling the resources of her workers and denying full freedom to their activity.