SECTION III.. The Free-Trade School.

THE FREE-TRADE SCHOOL.

From what has been said, we may understand why the so-called free-trade school, with its atomistic over-valuation of the individual and the moment, rejects all those measures of the industrial protective system.[A3-3-1] As such measures really injure the oppressed portions of the people more than they help the favored classes, their introduction, it is said, uniformly depends on this, that single classes of producers understand their private interests better than others, and are better organized than other producers and especially better than consumers, to take care of their interests.[A3-3-2] Adam Smith approves import hindrances for the purpose of artificially promoting an industry only in two cases:

A. When military safety demands it. Hence he calls the English navigation act, that great prohibitive and protective law intended to advance the merchant marine, the wisest perhaps of all English commercial regulations, although he clearly saw that it compelled England to sell her own commodities cheaper and buy foreign commodities dearer.[A3-3-3]

B. When the import duty is no more than sufficient to balance the tax imposed on the corresponding home product. Smith rightly remarks that a universally heavier taxation by the home country, but which affected all branches of its production equally, operated like diminished natural fertility, and hence does not make any equalizing tax for foreign trade necessary.

The person who has only a modest opinion of the power of his own reason, and therefore a just one of the reason of other men and other times, will not believe that a system like the industrial protective system which the greatest theorizers and practitioners favored for centuries, and which governed all highly developed countries in certain periods of their national life, proceeded entirely from error and deception. It really served, in its own time, a great and regularly occurring want; and the error consisted only in this, that, partly through improper generalization by doctrinarians and partly by the avarice of the privileged classes and the inertia of statesmen, the conditioned and transitory was looked upon as something absolute.[A3-3-4]