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that the obstacles to production are the cause; that, for instance, as labor is the cause of production, protectionists think that mode of production the best which requires the most labor. No protectionist had any such notion. In this chapter he italicises the assertion that labor is never without employment. This is a bald economic untruth. There have been periods in Ireland, alone, when two millions of people offered to work sixteen hours in the day for bread, and could not get work there, nor could they get where work was to be had. Had the labor of Babylon and Nineveh never been without employment, would those cities have been given over to the waste deserts? Both labor and capital may fail of employment for long periods. The world's history nearly consists of the migrations of both to new fields of employment, and their adventures and sufferings by the way.

In his third chapter, Bastiat argues that progress consists in the increase in the proportion of the result to the effort, and charges protectionists with aiming to bring about that system of industry in which the effort is greatest and the results least. Let us sce. Mr. Abram S. Hewitt, our commissioner on iron to the Paris Exposition in 1867, reported facts showing that one day's work in Pennsylvania, Wisconsin, or Missouri would make as much iron as two days' work in England or Belgium, or about two and a quarter in France. On Bastiat's basis, the proportion of the effort to the result, the men then engaged in making iron in England, Belgium, and France should have been induced to remove as fast as possible to the United States, because here the result in iron was from two to two and a half times greater for the effort in labor. The protectionist policy encouraged this transfer of iron production, and so increased the proportion of the result to the effort put forth, in accordance with Bastiat's desideratum. His error arises in supposing that the money price of labor is a measure of the effort put forth. It is only a measure of the competition between laborers. Blacksmiths put forth as much effort in one country as another, and attain about the same result, so far as the amount of work done is concerned. But in the United States, at the period referred to, they received $13.10 per week, in gold; in Great Britain, $6.33; in Prussia, from $2.52 to $4.32; in Saxony, from $2.52 to $3.60; and in Switzerland $5.40, according to an official report of our bureau of statistics at Washington. Iron puddlers received $16.54 per week in the United States, $8.75 in Great Britain, $3.60 to $4.32 in Prussia, $3.12 to $4.32 in Saxony, and $1.92 to $4.20 in Belgium. Now, if no greater effort were required

to make the same amount of iron in those countries than in our own, Great Britain could sell iron for half what we could make it for, Prussia and Saxony for one-fourth, and Belgium for one-fifth. But they did not. Removing all duties, they would, at first, have sold iron to us for one-fourth less, until they had stopped our manufacture, and then the magnitude of our demand would have compelled them to ask more, under free trade, than the previous price with duty added. But the fact that Prussians can only produce iron at three-fourths of the American price, when they pay one-fourth of the American wages, shows that their iron costs three times as much effort in days' work as ours, and hence that the world would be the gainer by 66 per cent., in the proportion of the result to the effort, if we should forbid the importation of a ton of Prussian iron, and compel German laborers, if they propose to make iron for our markets, to make it in this country. American protectionists generally would be satisfied if our tariff laws secured the production of those articles in this country which we can produce with a larger proportion of result to effort than the people of any other country.

M. Bastiat's third "Sophism of the Protectionists" is that they aim to equalize the facilities of all countries for production, and that it is from the differences between various countries in their facilities for production that trade arises, each country being able to export only that which it can produce more cheaply than any other country; consequently that the adoption of the protectionist policy would destroy trade.

We answer, that it is also from the same differences of facilities for production, as between different individuals, in any one country, that domestic trade arises, and that the international trade is always of far less importance than the domestic commerce of every country. Protection, by increasing the domestic production, increases the extent to which a people can exchange with each other at home, and diminishes the necessity only for going abroad. It lessens not the number of exchanges made, but only the distance to be traveled, and the transportation to be paid for, in making them. The ability of a people to make exchanges depends, ultimately, wholly on the amount of their production, which, in turn, depends primarily on their natural resources, secondly on their advancement in mechanical invention, and thirdly and through the two first, on the diversification of their industry. There are 1,200,000 farmers in the Mississippi Valley, none of whom can make any exchanges with each other, because their

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products are the same. There are a similar number of spinners and weavers in England who can make no exchanges with each other, because they are all producing the same thing. Bastiat thinks the continuance of this state of things increases the amount of commerce between these two classes of producers. We say it diminishes the amount of the commerce between the farmers and spinners to the lowest point; that if one-half the spinners were in the Mississippi Valley it would quadruple the value of the present products of that region and of its land, and also largely increase the value of the product of their spindles. Is there any doubt that in this respect we are looking at the aggregate of commerce, domestic as well as foreign, while Bastiat is looking only to the commerce that crosses the ocean, or some strait or channel of it? So long as the whole people of the Mississippi Valley are farmers, while their weavers and cutlers are in Lowell and Sheffield, is not the commerce of the people of Illinois with each other paralyzed by the fact that their industries are homogeneous? But if, of the people of Illinois, 3,000,000 were farmers, and 2,000,000 were mechanics and manufacturers, would not the exchanges of products then possible to them be infinitely greater than the exchange could be, so long as the two classes of industries are separated by thousands of miles ? Commerce grows, not out of the unequal powers of various peoples to produce the same things, but out of their equal powers to produce different things. It is not inequality, but diversity of production, that promotes exchange. If a farmer in England raises sixty bushels of wheat to the acre, and another in France raises ten bushels, their inequality of production forms no inducement to them to trade with each other. But the farmer trades with the spinner, weaver, cutler, blacksmith, and carpenter, without regard to their equality or inequality of productive power. His trade is as profitable if they earn $5 a day and he earns $3, as if he earns $5 a day and they earn $3. Yet protectionists do not desire to create equality of production in competing branches, except as preferable to inferiority of production on our own part. They prefer equality to inferiority, superiority to equality, and supremacy to superiority. But they deny Bastiat's "sophism," that our inferiority to Englishmen in any branch of production helps us to trade with them. It must be our production of unlike products, not of unlike values, and as the soil and climate of Europe present no natural differences from those of the United States, a given population transferred from Europe to America

can produce here every product in kind which they can there, but at a more rapid rate and with less effort.

192. Modern Germany-Protective Taxation a Source of National Unity.-The power of Germany, which is now attracting the attention and admiration of the civilized world, has grown up in the brief space of sixty years, as the result of two intimately related policies, viz.: the general diffusion of literary and industrial education, and the protection of German manufactures, agriculture, and mining, against foreign competition, through the Zollverein. Americans have special reason to be proud of German progress, since the efficient agent in effecting the Zollverein was Frederick List, author of a work entitled "The National System of Political Economy," and who, though German by birth, became imbued with the principles of protection, during his residence in Pennsylvania. Prof. List was invited by Lafayette to accompany him in his tour of this country, and came only as a visitor and observer. He had previously edited an edition of J. B. Say's treatise on political economy, and his leanings were toward free trade. During his stay in this country he became familiar with its economical history, and reversed his opinions as to the effects of unrestricted foreign trade on domestic manufactures. He learned that our Federal Union grew out of an attempt to form a customs or commercial union, with free trade between the various states, and protection against foreign competition, as its guiding principle. He became familiar with the unitizing effects of such a union, and with the gratifying results to our manufactures and general industry, during the years from 1806 to 1815, in which commerce with England was interrupted or nearly destroyed, and the disastrous effects of the free trade treaty of 1816, which flooded American markets with English goods, swamped our manufactures, and in three years brought every branch of industry to the lowest stage of suffering and ruin. Thoroughly indoctrinated in the Pennsylvania school of political economy, of which Matthew Carey was then a leading expounder, Prof. List returned to Germany filled with the purpose of agitating for the adoption of the principle of protection to German industry, through a Zollverein, of which Prussia had, since 1818, been the proposer and exponent, while Hanover and other German states, largely influenced by England, had formed an opposing combination in favor of free trade. The dream of List was of a united Germany, bound together by a network of railroads centering in Berlin and Frankfort, collecting its whole

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revenues in an exterior line of custom houses, under laws so framed as to secure the freest possible intercourse within the bund, and permanent protection to every needed industry against foreign encroachment. He had written a work expounding these views, while in America, and his ability, in advocating them in the public journals of Germany, caused him to be selected as the executive agent in negotiating such a union.

Prussia, since 1818, had been vainly endeavoring to draw the other German states into a Zollverein. In 1819, Saxe-Weimar and Mecklenburg had entered it, and in 1827 Wurtemburg and Bavaria made a treaty of commerce with it, but would not join it. Hanover, Saxony, and Hesse stoutly opposed it, and favored an anti-Prussian free trade coalition. Prior to this period the trade between Germany and Great Britain had consisted in the export of raw wool from Germany and the import of woolen cloths from England; an export of rags and an import of paper; an import of cotton goods and an export of food. Under these industries, Germany had been the granary of Europe, but her people so poor that throughout the eighteenth century, they were sold by their princes to foreign service as mercenary soldiers, and so weak, that in 1805 to 1815, it was but sport for France, which had pursued protective policies for two centuries, to march her armies through Germany, and make it the battle-ground of Europe.

In 1831, however, Hesse abandoned the free trade coalition and joined Prussia, the results of whose steady maintenance of the protective policy were beginning to impress the other German powers. Several of the smaller states followed in quick succession. In 1833, Bavaria, Wurtemburg, and Saxony, did the same. In December of that year, the union counted 14,800,000 people. In 1834 they had increased to 23,500,000. In 1835, Baden, Nassau, and Frankfort joined their number. In the next year the indefatigable List-through whose labors Germany was thus laying the foundation of its present prosperity-was ruined, pecuniarily, by the decline in the value of his extensive mining investment in Pennsylvania, in consequence of the adoption of a "free trade" tariff by the United States in 1833. This spur did not retard his labors. In 1839 the federation extended over 200,000 square miles and a population of 27,000,000 of people. In 1852 it had reached 33,600,000, and now it includes 40,000,000 of people, and from a mere customs union has welded the discordant principalities of the North German Confederation into the modern Empire of Germany. It is often claimed, by free traders, that the rates of the