THE BENEFITS OF PROTECTION ANALYSED.

Tuapeka Times, Volume XXIV, Issue 1904, 15 June 1892, Page 6

THE BENEFITS OF PROTECTION ANALYSED.

A highly instructive statement has been prepared by a well-known Italian economist, iSignor Vilvredo Pareto, showing the enormous burden imposed on his countrymen by the maintenance of a protected iron and steel industry. Most people are aware that this industry is an exotic in Italy, Bince all, or nearly all, tbe coal required for its use is imported. Il 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 case of Signor Pareto they excite very different feelings. He takes the 1890 Italian consumption of home and foreign produce— viz , 4,051,600 quintals — a3 the basis of a further computation. The average rate of duty paid upon the foreign portion was 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 this way an extra and gratuitous outlay of L 1,206,240, 206,240 was incurred. A portion of this sum must be deducted, however, for the revenue derived by the Government from import duties, and the remainder, amounting to L 854,000, represents the minimum net loss to the country. Anticipating the reply that, on the other hand, a certain number of Italians have benefited by being employed in the protected 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, each of them would have received nearly L6l for doing nothing, an amount much in excess of their actual earnings, many of them receiving in wages not more than 2fr per day, or L 25 per annum, each, and in one ironworks, of which exact particulars are given, the average earnings of men is only L 36 per annum. Of course, the greater part of the L 584.000 uselessly spent by Italian consumers is pure waste, due to the natural unsuitability of the country for this kind of - industry. But a considerable portion of it goes in a way not noticed by Signor Pareto. The capital sunk in Italian iron and steel works is largely owned by French, Swiss, and -English investors, and the profits of their enterprises, drawn from the profits of the people of Italy, are sent out of the country.—' Manchester Guardian.'