Karl Marx, On the Question of Free Trade
Public Speech Delivered by Karl Marx before the Democratic Association of Brussels January 9, 1848.
Marx's speech appeared in French, in Brussels, in early February 1848; translated into German the same year and published in Germany by Joseph Weydemeyer - friend of Marx and Engels. In compliance with a wish expressed by Engels, this speech was appended to the first German edition of The Poverty of Philosophy (1885). It has usually been included in appendix in printings of that book ever since.
Here is appended only the final part of the speech where Marx, after having made all sort of critical remarks about the exploitation of the workers by the industrial capitalists, declare himself to be totally in favour of free trade considering it as the best system that “hastens the social revolution.”
To sum up, what is free trade, what is free trade under the present condition of society? It is freedom of capital. When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage labor to capital exist, it does not matter how favorable the conditions under which the exchange of commodities takes place, there will always be a class which will exploit and a class which will be exploited. It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers. On the contrary, the only result will be that the antagonism of these two classes will stand out still more clearly.
Let us assume for a moment that there are no more Corn Laws or national or local custom duties; in fact that all the accidental circumstances which today the worker may take to be the cause of his miserable condition have entirely vanished, and you will have removed so many curtains that hide from his eyes his true enemy.
He will see that capital become free will make him no less a slave than capital trammeled by customs duties.
Gentlemen! Do not allow yourselves to be deluded by the abstract word freedom. Whose freedom? It is not the freedom of one individual in relation to another, but the freedom of capital to crush the worker.
Why should you desire to go on sanctioning free competition with this idea of freedom, when this freedom is only the product of a state of things based upon free competition?
We have shown what sort of brotherhood free trade begets between the different classes of one and the same nation. The brotherhood which free trade would establish between the nations of the Earth would hardly be more fraternal. To call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie. All the destructive phenomena which unlimited competition gives rise to within one country are reproduced in more gigantic proportions on the world market. We need not dwell any longer upon free trade sophisms on this subject, which are worth just as much as the arguments of our prize-winners Messrs. Hope, Morse, and Greg.
For instance, we are told that free trade would create an international division of labor, and thereby give to each country the production which is most in harmony with its natural advantage.
You believe, perhaps, gentlemen, that the production of coffee and sugar is the natural destiny of the West Indies.
Two centuries ago, nature, which does not trouble herself about commerce, had planted neither sugar-cane nor coffee trees there.
And it may be that in less than half a century you will find there neither coffee nor sugar, for the East Indies, by means of cheaper production, have already successfully combatted his alleged natural destiny of the West Indies. And the West Indies, with their natural wealth, are already as heavy a burden for England as the weavers of Dacca, who also were destined from the beginning of time to weave by hand.
One other thing must never be forgotten, namely, that, just as everything has become a monopoly, there are also nowadays some branches of industry which dominate all others, and secure to the nations which most largely cultivate them the command of the world market. Thus in international commerce cotton alone has much greater commercial than all the other raw materials used in the manufacture of clothing put together. It is truly ridiculous to see the free-traders stress the few specialities in each branch of industry, throwing them into the balance against the products used in everyday consumption and produced most cheaply in those countries in which manufacture is most highly developed.
If the free-traders cannot understand how one nation can grow rich at the expense of another, we need not wonder, since these same gentlemen also refuse to understand how within one country one class can enrich itself at the expense of another.
Do not imagine, gentlemen, that in criticizing freedom of trade we have the least intention of defending the system of protection.
One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.
Moreover, the protectionist system is nothing but a means of establishing large-scale industry in any given country, that is to say, of making it dependent upon the world market, and from the moment that dependence upon the world market is established, there is already more or less dependence upon free trade. Besides this, the protective system helps to develop free trade competition within a country. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute government, as a means for the concentration of its own powers and for the realization of free trade within the same country.
But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.
Friedrich Engels, On the Question of Free Trade
Preface to the 1888 English edition of Marx's speech
In this text Engels presents a clear case in favour of Free Trade. It is a very lively piece of writing that shows Engel's change of mind from being mildly protectionist (in the case of American infant industries) to being fully in favour of Free Trade (after having seen the miserable results of American protectionism). However, towards the end of this writing, Engels ceases to be the lucid social critics and becomes the political ideologue with his faith in the inevitable advent of socialism; that makes him indifferent to the entire question of protectionism and free trade, because, in his opinion, socialism will prevail in any case. Unfortunately he does not realize that the national socialism, autarchic and protectionist, or the communism in one country, that will be implemented during the XX century, will be more despotic and monopolistic that any English capitalistic master could ever be at the times of the Industrial Revolution. And the socialism advocated by Marx and Engels will become nothing else than inhuman abominable statism.
The question of Free Trade or Protection being at present on the order of the day in America, it has been thought useful to publish an English translation of Marx's speech, to which I have been asked to write an introductory preface.
"The system of protection," says Marx, "was an artificial means of manufacturing manufacturers, of expropriating independent laborers, of capitalizing the national means of production and subsistence, and of forcibly abbreviating the transition from the medieval to the modern mode of production."
Such was protection at its origin in the 17th century, such it remained well into the 19th century. It was then held to be the normal policy of every civilized state in Western Europe. The only exceptions were the smaller states of Germany and Switzerland - not from dislike of the system, but from the impossibility of applying it to such small territories.
It was under the fostering wing of protection that the system of modern industry - production by steam-moved machinery - was hatched and developed in England during the last third of the 18th century. And, as if tariff protection was not sufficient, the wars against the French Revolution helped to secure to England the monopoly of the new industrial methods. For more than 20 years, English men-of-war cut off the industrial rivals of England from their respective colonial markets, while they forcibly opened these markets to English commerce. The secession of the South American colonies from the rule of their European mother countries, the conquest by England of all French and Dutch colonies worth having, the progressive subjugation of India turned the people of all these immense territories into customers for English goods. England thus supplemented the protection she practiced at home by the Free Trade she forced upon her possible customers abroad; and, thanks to this happy mixture of both systems, at the end of the wars, in 1815, she found herself, with regard to all important branches of industry, in possession of the virtual monopoly of the trade of the world.
This monopoly was further extended and strengthened during the ensuing years of peace. The start, which England had obtained during the war, was increased from year to year; she seemed to distance more and more all her possible rivals. The exports of manufactured goods in ever growing quantities became indeed a question of life and death to that country. And there seemed but two obstacles in the way: the prohibitive or protective legislation of other countries, and the taxes upon the import of raw materials and articles of food in England.
Then the Free Trade doctrines of classical political economy - of the French physiocrats and their English successors, Adam Smith and Ricardo - became popular in the land of John Bull.
Protection at home was needless to manufacturers who beat all their foreign rivals, and whose very existence was staked on the expansion of their exports. Protection at home was of advantage to none but the producers of articles of food and other raw materials, to the agricultural interest, which, under then existing circumstances in England, meant the receivers of rent, the landed aristocracy. And this kind of protection was hurtful to the manufacturers. By taxing raw materials, it raised the price of the articles manufactured from them; by taxing food, it raised the price of labor; in both ways, it placed the British manufacturer at a disadvantage as compared with his foreign competitor. And, as all other countries sent to England chiefly agricultural products and drew from England chiefly manufactured goods, repeal of the English protective duties on corn and raw materials generally was at the same time an appeal to foreign countries to do away with - or at least to reduce in turn - the import duties levied by them on English manufactures.
After a long and violent struggle, the English industrial capitalists, already in reality the leading class of the nation, that class whose interests were then the chief national interests, were victorious. The landed aristocracy had to give in. The duties on corn and other raw materials were repealed. Free Trade became the watchword of the day. To convert all other countries to the gospel of Free Trade, and thus to create a world in which England was the great manufacturing centre, with all other countries for its independent agricultural districts, that was the next task before the English manufacturers and their mouthpieces, the political economists.
That was the time of the Brussels Congress, the time when Marx prepared the speech in question. While recognizing that protection may still, under certain circumstances, for instance in the Germany of 1847, be of advantage to the manufacturing capitalists; while proving that that Free Trade was not the panacea for all the evils under which the working class suffered, and might even aggravate them; he pronounces, ultimately and on principle, in favor of Free Trade.
To him, Free Trade is the normal condition of modern capitalist production. Only under Free Trade can the immense productive powers of steam, of electricity, of machinery, be full developed; and the quicker the pace of this development, the sooner and the more fully will be realized its inevitable results; society splits up into two classes, capitalists here, wage-laborers there; hereditary wealth on one side, hereditary poverty on the other; supply outstripping demand, the markets being unable to absorb the ever growing mass of the production of industry; an ever recurring cycle of prosperity, glut, crisis, panic, chronic depression, and gradual revival of trade, the harbinger not of permanent improvement but of renewed overproduction and crisis; in short, productive forces expanding to such a degree that they rebel, as against unbearable fetters, against the social institutions under which they are put in motion; the only possible solution: a social revolution, freeing the social productive forces from the fetters of an antiquated social order, and the actual producers, the great mass of the people, from wage slavery. And because Free Trade is the natural, the normal atmosphere for this historical evolution, the economic medium in which the conditions for the inevitable social revolution will be the soonest created - for this reason, and for this alone, did Marx declare in favor of Free Trade.
Anyhow, the years immediately following the victory of Free Trade in England seemed to verify the most extravagant expectations of prosperity founded upon that event. British commerce rose to a fabulous amount; the industrial monopoly of England on the market of the world seemed more firmly established that ever; new iron works, new textile factories arose by wholesale; new branches of industry grew up on ever side. There was, indeed, a severe crisis in 1857, but that was overcome, and the onward movement in trade and manufactures soon was in full swing again, until in 1866 a fresh panic occurred, a panic, this time, which seems to mark a new departure in the economic history of the world.
The unparalleled expansion of British manufactures and commerce between 1848 and 1866 was no doubt due, to a great extent, to the removal of the protective duties on food and raw materials. But not entirely. Other important changes took place simultaneously and helped it on. The above years comprise the discover and working of the Californian and Australian goldfields which increased so immensely the circulating medium of the world; they mark the final victory of steam over all other means of transports; on the ocean, steamers now superseded sailing vessels; on land, in all civilized countries, the railroad took the first place, the macadamized roads the second; transport now became four times quicker and four times cheaper. No wonder that under such favorable circumstances British manufactures worked by steam should extend their sway at the expense of foreign domestic industries based upon manual labor. But were the other countries to sit still and to submit to this change, which degraded them to be mere agricultural appendages of England, the "workshop of the world"?
The foreign countries did nothing of the kind. France, for nearly 200 years, had screened her manufactures behind a perfect Chinese wall of protection and prohibition, and had attained in all articles of luxury and of taste a supremacy which England did not even pretend to dispute. Switzerland, under perfect Free Trade, possessed relatively important manufactures, which English competition could not touch. Germany, with a tariff far more liberal than that of any other large continental country, was developing its manufactures at a rate relatively more rapid than even England. And America was, by the Civil War of 1861, all at once thrown upon her own resources, had to find means how to meet a sudden demand for manufactured goods of all sorts, and could only do so by creating manufactures of her own at home. The war demand ceased with the war; but the new manufactures were there, and had to meet British competition. And the war had ripened, in America, the insight that a nation of 35 million, doubling its numbers in 40 years at most, with such immense resources, and surrounded by neighbors that must be for years to come chiefly agriculturalists, that such a nation had the "manifest destiny" to be independent of foreign manufactures for its chief articles of consumption, and to be so in time of peace as well as in time of war. And then America turned protectionist.
It may now be 15 years ago, I travelled in a railway carriage with an intelligent Glasgow merchant, interested probably in the iron trade. Talking about America, he treated me to the old Free Trade lubrications:
"Was it not inconceivable that a nation of sharp businessmen like the Americans should pay tribute to indigenous ironmasters and manufacturers, when they could buy the same, if not a better article, ever so much cheaper in this country?"
And then he gave me examples as to how much the Americans taxed themselves in order to enrich a few greedy ironmasters.
"Well," I replied, "I think there is another side to the question. You know that in coal, waterpower, iron, and other ores, cheap food, homegrown cotton, and other raw materials, America has resources and advantages unequalled by any European country; and that these resources cannot be fully developed except by America becoming a manufacturing country. You will admit, too, that nowadays a, great nation like the Americans' cannot exist on agriculture alone; that would be tantamount to a condemnation to permanent barbarism and inferiority; no great nation can live, in our age, without manufactures of her own. Well, then, if America must become a manufacturing country, and if she has every chance of not only succeeding but even outstripping her rivals, there are two ways open to her: either to carry on for, let us say, 50 years under Free Trade an extremely expensive competitive war against English manufactures that have got nearly a hundred years start; or else to shut out, by protective duties, English manufactures for, say, 25 years, with the almost absolute certainty that at the end of the 25 years she will be able to hold her own in the open market of the world. Which of the two will be the cheapest and the shortest? That is the question. If you want to go from Glasgow to London, you take the parliamentary train at a penny a mile and travel at the rate of 12 miles an hour. But you do not; your time is too valuable, you take the express, pay twopence a mile and do 40 miles an hour. Very well, the Americans prefer to pay express fare and to go express speed."
My Scotch Free Trade had not a word in reply.
Protection beings a means of artificially manufacturing manufacturers, may, therefore, appear useful not only to an incompletely developed capitalist class still struggling with feudalism; it may also give a life to the rising capitalist class of a country which, like America, has never known feudalism, but which has arrived at that stage of development where the passage from agriculture to manufactures becomes a necessity. America, placed in that situation, decided in favor of protection. Since that decision was carried out, the five and 20 years of which I spoke to my fellow traveller have about passed and, if I was not wrong, protection ought to have done its task for America, and ought to be now becoming a nuisance.
That has been my opinion for some time. Nearly two years ago, I said to a protectionist American:
"I am convinced that if America goes in for Free Trade, she will in 10 years have beaten England in the market of the world."
Protection is at best an endless screw, and you never know when you have done with it. By protecting one industry, you directly or indirectly hurt all others, and have therefore to protect them too. By so doing you again damage the industry that you first protected, and have to compensate it; but this compensation reacts, as before, on all other trades, and entitles them to redress, and so on ad infinitum. America, in this respect, offers us a striking example of the best way to kill an important industry by protectionism. In 1856, the total imports and exports by sea of the United State amounted to $641,604,850. Of this amount, 75.2 per cent were carried in American, and only 24.8 per cent in foreign vessels. British ocean steamers were already then encroaching upon American sailing vessels; yet, in 1860, of a total seagoing trade of $762,288,550, American vessels still carried 66.5 per cent.
The Civil War came on, and protection to American shipbuilding; and the latter plan was so successful that it has nearly completely driven the American flag from the high seas. In 1887, the total seagoing trade of the United States amounted to $1,408,502,979, but of this total only 13.8 per cent were carried in American, and 86.2 per cent in foreign bottoms. The goods carried by American ships amounted, in 1856, to $482,268,274; in 1860 to $507,247,757. In 1887, they had sunk to $194,356,746. Forty years ago, the American flag was the most dangerous rival of the British flag, and bade fair to outstrip it on the ocean; now it is nowhere. Protection to shipbuilding has killed both shipping and shipbuilding.
Another point. Improvements in the methods of production nowadays follow each other so rapidly, and change the character of entire branches of industry so suddenly and so completely, that what may have been yesterday a fairly balanced protective tariff is no longer so today. Let us take another example from the Report of the Secretary of the Treasury for 1887:
"Improvement in recent years in the machinery employed in combing wool has so changed the character of what are commercially known as worsted clothes that the latter have largely superseded woolen cloths for us as men's wearing apparel. This change... has operated to the serious injury of our domestic manufacturers of these (worsted) goods, because the duty on the wool which they must use is the same as that upon wool used in making woolen cloths, while the rate of duty imposed upon the latter when valued at not exceeding 80 cents per pound are 35 per cent ad valorem, whereas the duty on worsted cloths valued at not exceeding 80 cents ranges from 10 to 24 cents per pound and 35 per cent ad valorem. In some cases the duty on the wool used in making worsted cloths exceed the duty imposed on the finished article."
Thus what was protection to home industry yesterday turns out today to be a premium to the foreign importer, and well may the Secretary of the Treasury say:
"There is much reason to believe that the manufacturer of worsted cloths must soon cease in this country unless the tariff law in this regard is amended."
But to amend it, you will have to fight the manufacturers of woolen clothes who profit by this state of things; you will have to open a regular campaign to bring the majority of both Houses of Congress, and eventually the public opinion of the country round to your views, and the question is, Will that pay?
But the worst of protection is that when you once have got it, you cannot easily get rid of it. Difficult as is the process of adjustment of an equitable tariff, the return to Free Trade is immensely more difficult. The circumstances that permitted England to accomplish the change in a few years will not occur again. And even there the struggle dated from 1823 (Huckisson), commenced to be successful in 1842 (Peel's tariff), and was continued for several years after the repeal of the Corn Laws. Thus protection to the silk manufacturer (the only one which had still to fear foreign competition) was prolonged for a series of years and then granted in another, positively infamous form; while the other textile industries were subjected to the Factory Act - which limited the hours of labor of women, young persons, and children - the silk trade was favored with considerable exceptions to the general rule enabling them to work younger children, and to work the children and young persons longer hours, than the other textile trades. The monopoly that the hypocritical Free Traders repealed with regard to the foreign competitors, that monopoly they created anew at the expense of the health and lives of English children.
But no country will again be able to pass from Protection to Free Trade at a time when all, or nearly all, branches of its manufactures can defy foreign competition in the open market. The necessity of the change will come long before such a happy state may even be hoped for. That necessity will make itself evident in different trades at different times; and from the conflicting interests of these trades, the most edifying squabbles, lobby intrigues, and parliamentary conspiracies will arise. The machinist, engineer, and shipbuilder may find that the protection granted to the iron master raises the price of his goods so much that his export trade is thereby, and thereby alone, prevented. The cotton cloth manufacturer might see his way to driving English cloth out of the Chinese and Indian markets, but for the high price he has to pay for the yarn, on account of protection to spinners, and so forth.
The moment a branch of national industry has completely conquered the home market, that moment exportation becomes a necessity to it. Under capitalistic conditions, an industry either expands or wanes. A trade cannot remain stationary; stoppage of expansion is incipient ruin; the progress of mechanical and chemical invention, by constantly superseding human labor and ever more rapidly increasing and concentrating capital, creates in every stagnant industry a glut both of workers and of capital, a glut which finds no vent everywhere, because the same process is taking place in all other industries.
Thus the passage from a home to an export trade becomes a question of life and death for the industries concerned. But they are met by the established rights, the vested interests of others who as yet find protection either safer or more profitable than Free Trade. Then ensues a long and obstinate fight between Free Traders and Protectionists; a fight where, on both sides, the leadership soon passes out of the hands of the people directly interested, into those of professional politicians, the wire-pullers of the traditional political parties, whose interest is not a settlement of the question, but its being kept open forever; and the result of an immense loss of time, energy, and money is a series of compromises favoring now one, then the other side, and drifting slowly though not majestically in the direction of Free Trade - unless Protection manages, in the meantime, to make itself utterly insupportable to the nation, which is just now likely to be the case in America.
There is, however, another kind of protection, the worst of all, and that is exhibited in Germany. Germany, too, began to feel, soon after 1815, the necessity of a quicker development of her manufactures. But the first condition of that was the creation of a home market by the removal of the innumerable customs lines and varieties of fiscal legislation formed by the small German states - in other words, the formation of a German Customs Union, or Zollverein. That could only be done on the basis of a liberal tariff, calculated rather to raise a common revenue than to protect home production. On no other condition could the small states have been introduced to join.
Thus the new German tariff, though slightly protective to some trades, was, at the time of its introduction, a model of Free Trade legislation; and it remained so, although, ever since 1830, the majority of German manufacturers kept clamoring for protection. Yet, under this extremely liberal tariff, and in spite of German domestic industries based on hand labor being mercilessly crushed out by the competition of English factories worked by steam, the transition from manual labor to machinery was gradually accomplished in Germany too, and is now nearly complete. The transformation of Germany from an agricultural to a manufacturing country went on at the same pace, and was, since 1866, assisted by favorable political events: the establishment of a strong central government, and federal legislation, ensuring uniformity in the laws regulating trade, as well as in currency, weights, and measures, and, finally, the flood of the French billions. Thus, about 1874, German trade on the market of the world ranked next to that of Great Britain, and Germany employed more steam power in manufactures and locomotion than any Continental European country. The proof has thus been furnished that even nowadays, in spite of the enormous start that English industry has got, a large country can work its way up to successful competition in the open market with England.
Then, all at once, a change of front was made: Germany turned protectionist at a moment when more than ever Free Trade seemed a necessity for her. The change was no doubt absurd; but it may be explained. While Germany had been a corn-exporting country, the whole agricultural interest, not less than the whole shipping trade, had been ardent Free Traders. But in 1874, instead of exporting, Germany required large supplies of corn from abroad. About that time, America began to flood Europe with enormous supplies of cheap corn; wherever they went, they brought down the money revenue yielded by the land, and consequently its rent; and from that moment, the agricultural interest all over Europe began to clamor for protection.
At the same time, manufacturers in Germany were suffering from the effect of the reckless overtrading brought on by the influx of the French billions, while England, whose trade ever since the crisis of 1866 had been in a state of chronic depression, inundated all accessible markets with goods unsalable at home and offered abroad at ruinously low prices. Thus it happened that German manufacturers, though depending above all upon export, began to see in protection a means of securing to themselves the exclusive supply of the home market. And the government, entirely in the hands of the landed aristocracy and squirearchy, was only too glad to profit by this circumstance in order to benefit the receivers of the rent of land by offering protective duties to both landlords and manufacturers. In 1878, a highly protective tariff was enacted both for agricultural products and for manufactured goods.
The consequence was that henceforth the exportation of German manufactures was carried on at the direct cost of the home consumers. Wherever possible, "rings" or "trusts" were formed to regulate the export trade and even production itself. The German iron trade is in the hands of a few large firms, mostly joint stock companies, who, betwixt them, can produce about four times as much iron as the average consumption of the country can absorb. To avoid unnecessary competition with one another, these firms have formed a trust which divides amongst them all foreign contracts and determines in each case the firm that is to make the real tender. This "trust", some years ago, had even come to an agreement with the English iron masters, but this no longer subsists. Similarly, the Westphalian coal mines (producing about 30 million tons annually) had formed a trust to regulate production, tenders for contracts, and prices. And, altogether, any German manufacturer will tell you that the only thing the protective duties do for him is to enable him to recoup himself in the home market for the ruinous prices he has to take abroad.
And this is not all. This absurd system of protection to manufacturers is nothing but the sop thrown to industrial capitalists to induce them to support a still more outrageous monopoly given to the landed interest. Not only is all agricultural produce subjected to heavy import duties which are increased from year to year, but certain rural industries, carried on large estates for account of the proprietor, are positively endowed out of the public purse. The beet-root sugar manufacture is not only protected, but receives enormous sums in the shape of export premiums. One who ought to know is of opinion that if the exported sugar was all thrown into the sea, the manufacturer would still clear a profit out of government premium. Similarly, the potato-spirit distilleries receive, in consequence of recent legislation, a present out of the pockets of the public of about $9 million a year. And as almost every large landowner in northeastern Germany is either a beet-root sugar manufacturer or a potato-spirit distiller, or both, no wonder the world is literally deluged with their production.
This policy, ruinous under any circumstances, is doubly so in a country whose manufactures keep up their standing in neutral markets chiefly through the cheapness of labor. Wages in Germany, kept near starvation point at the best of times, through redundancy of population (which increases rapidly, in spite of emigration), must rise in consequence of the rise in all necessaries caused by protection; the German manufacturer will then no longer be able, as he too often is now, to make up for a ruinous price of his articles by a deduction from the normal wages of his hands and will be driven out of the market. Protection, in Germany, is killing the goose that lays the golden egg.
France, too, suffers from the consequences of protection. The system in that country has become, by its two centuries of undisputed sway, almost part and parcel of the life of the nation. Nevertheless, it is more and more becoming an obstacle. Constant changes in the methods of manufacture are the order of the day; but protection bars the road. Silk velvets have their backs nowadays made of fine cotton thread; the French manufacturer has either to pay protection price for that, or to submit to such interminable official chicanery as fully makes up for the difference between that price and the government drawback on exportation; and so the velvet trade goes from Lyons to Crefeld [Germany], where the protection price for fine cotton thread is considerably lower.
French exports, as said before, consist chiefly of articles of luxury where French taste cannot, as yet, be beaten; but the chief consumers all over the world of such articles are our modern upstart capitalists who have no education and no taste, and who are suited quite as well by cheap and clumsy German or English imitations, and often have these foisted upon them for the real French article at more than fancy prices. The market for those specialties which cannot be made out of France is constantly getting narrower, French export manufacturers are barely kept up, and must soon decline; by what new articles can France replace those whose export is dying out? If anything can help here, it is a bold measure of Free Trade, taking the French manufacturer out of his accustomed hothouse atmosphere and placing him once more in the open air of competition with foreign rivals. Indeed, French general trade would have long since begun shrinking were it not for the slight and vacillating step in the direction of Free Trade made by the [French-English] Cobden treaty of 1860, but that has well-nigh exhausted itself and a stronger dose of the same tonic is wanted.
It is hardly worthwhile to speak of Russia. There, the protective tariff - the duties having to be paid in gold, instead of in the depreciated paper currency of the country - serves above all things to supply the pauper government with the hard cash indispensable for transactions with foreign creditors. On the very day on which that tariff fulfills its protective mission by totally excluding foreign goods, on that day the Russian government is bankrupt. And yet that same government amuses its subjects by dangling before their eyes the prospect of making Russia, by means of this tariff, an entirely self-supplying country, requiring from the foreigner neither food, nor raw material, nor manufactured articles, nor works of art. The people who believe in this vision of a Russian Empire, secluded and isolated from the rest of the world, are on a level with the patriotic Prussian lieutenant who went into a shop and asked for a globe, not a terrestrial or a celestial one, but a globe of Prussia.
To return to America. There are plenty of symptoms that Protection has done all it could for the United States, and that the sooner it receives notice to quit, the better for all parties. One of these symptoms is the formation of "rings" and "trusts" within the protected industries for the more thorough exploitation of the monopoly granted to them. Now "rings" and "trusts" are truly American institutions, and, where they exploit natural advantages, they are generally though grumblingly submitted to the transformation of the Pennsylvanian oil supply into a monopoly by the Standard Oil Company; is a proceeding entirely in keeping with the rules of capitalist production. But if the sugar refiners attempt to transform the petition granted them, by the nation, against foreign competition, into a monopoly against the home consumer, that is to say against the same nation that granted the protection, that is quite a different thing. Yet the large sugar refiners have formed a "trust" which aims at nothing else. And the sugar trust is not the only one of its kind.
Now, the formation of such trusts in protected industries is the surest sign that protection has done its work and is changing its character; that it protects the manufacturer no longer against the foreign importer, but against the home consumer; that is has manufactured, at least in the special branch concerned, quite enough, if not too many manufacturers; that the money it puts into the purse of these manufacturers is money thrown away, exactly as in Germany.
In America, as elsewhere, Protection is bolstered up by the argument that Free Trade will only benefit England. The best proof to the contrary is that in England not only the agriculturists and landlords but even the manufacturers are turning protectionist. In the home of the "Manchester school" of Free Traders, on November 1, 1886, the Manchester chamber of commerce discussed a resolution
"that, having waited in vain 40 years for other nations to follow the Free Trade example of England, the chamber thinks the time has arrived to reconsider that position."
The resolution was indeed rejected, but by 22 votes against 21! And that happened in the centre of the cotton manufacture - i.e., the only branch of English manufacture whose superiority in the open market seems still undisputed! But, then, even in that special branch inventive genius has passed from England to America. The latest improvements in machinery for spinning and weaving cotton have come, almost all, from America, and Manchester has to adopt them. In industrial inventions of all kinds, America has distinctly taken the lead, while Germany runs England very close for second place.
The consciousness is gaining ground in England that that country's industrial monopoly is irretrievably lost, that she is still relatively losing ground, while her rivals are making progress, and that she is drifting into a position where she will have to be content with being one manufacturing nation among many, instead of, as she once dreamt, "the workshop of the world". It is to stave off this impending fate that Protection, scarcely disguised under the veil of "fair trade" and retaliatory tariffs, is now invoked with such fervor by the sons of the very men who, 40 years ago, knew no salvation but in Free Trade. And when English manufacturers begin to find that Free Trade is ruining them, and ask the government to protect them against their foreign competitors, then, surely, the moment has come for these competitors to retaliate by throwing overboard a protective system henceforth useless, to fight the fading industrial monopoly of England with its own weapon: Free Trade.
But, as I said before, you may easily introduce Protection, but you cannot get rid of it again so easily. The legislature, by adopting the protective plan, has created vast interests, for which it is responsible. And not every one of these interests - the various branches of industry - is equally ready, at a given moment, to face open competition. Some will be lagging behind, while others have no longer need of protective nursing. This difference of position will give rise to the usual lobby-plotting, and is in itself a sure guarantee that the protected industries, if Free Trade is resolved upon, will be let down very easy indeed as was the silk manufacture in England after 1846. That is unavoidable under present circumstances, and will have to be submitted to by the Free Trade party so long as the change is resolved upon in principle.
The question of Free Trade or Protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system.
Indirectly, however, it interests us inasmuch as we must desire as the present system of production to develop and expand as freely and as quickly as possible: because along with it will develop also those economic phenomena which are its necessary consequences, and which must destroy the whole system: misery of the great mass of the people, in consequence of overproduction. This overproduction engendering either periodical gluts and revulsions, accompanied by panic, or else a chronic stagnation of trade; division of society into a small class of large capitalist, and a large one of practically hereditary wage-slaves, proletarians, who, while their numbers increase constantly, are at the same time constantly being superseded by new labor-saving machinery; in short, society brought to a deadlock, out of which there is no escaping but by a complete remodeling of the economic structure which forms it basis.
From this point of view, 40 years ago Marx pronounced, in principle, in favor of Free Trade as the more progressive plan, and therefore the plan which would soonest bring capitalist society to that deadlock. But if Marx declared in favor of Free Trade on that ground, is that not a reason for every supporter of the present order of society to declare against Free Trade? If Free Trade is stated to be revolutionary, must not all good citizens vote for Protection as a conservative plan?
If a country nowadays accepts Free Trade, it will certainly not do so to please the socialists. It will do so because Free trade has become a necessity for the industrial capitalists. But if it should reject Free Trade and stick to Protection, in order to cheat the socialists out of the expected social catastrophe, that will not hurt the prospects of socialism in the least. Protection is a plan for artificially manufacturing manufacturers, and therefore also a plan for artificially manufacturing wage laborers. You cannot breed the one without breeding the other.
The wage laborer everywhere follows in the footsteps of the manufacturer; he is like the "gloomy care" of Horace, that sits behind the rider, and that he cannot shake off wherever he go. You cannot escape fate; in other words, you cannot escape the necessary consequences of your own actions. A system of production based upon the exploitation of wage labor, in which wealth increases in proportion to the number of laborers employed and exploited, such a system is bound to increase the class of wage laborers, that is to say, the class which is fated one day to destroy the system itself. In the meantime, there is no help for it: you must go on developing the capitalist system, you must accelerate the production, accumulation, and centralization of capitalist wealth, and, along with it, the production of a revolutionary class of laborers. Whether you try the Protectionist or the Free Trade will make no difference in the end, and hardly any in the length of the respite left to you until the day when that end will come. For long before that day will protection have become an unbearable shackle to any country aspiring, with a chance of success, to hold its own in the world market.