Modern Economic Problems eBook

Frank Fetter
This eBook from the Gutenberg Project consists of approximately 554 pages of information about Modern Economic Problems.

Modern Economic Problems eBook

Frank Fetter
This eBook from the Gutenberg Project consists of approximately 554 pages of information about Modern Economic Problems.

Experience abundantly shows that, with a few exceptions, due to climate and natural resources, it is impossible to put into effect the most moderate schedule of duties without the increase in price at once causing some men to shift their occupations, and to begin producing articles of the kinds that have risen in price.  At once appears a group of “protected industries,” the owners of which are dependent for the safety and profits of their investments, and the workmen in which are dependent for the security of their present jobs (possibly for the chance to continue the pursuit of highly skilled trades) on the continuance, if not the increase, of the existing tariff rates.  A tariff may be adopted mainly from stress of financial need (as in our own history in 1789 or in 1861), but its modification or repeal cannot be decided by fiscal considerations.  The “incidental protection” it affords has created a wealthy and influential group of employers and a large body of employees who are irresistibly tempted to exercise their influence in politics almost solely in favor of continuing and of increasing the rates to the sacrifice of the higher civic life of their communities.  Of course the beneficiaries of the tariff usually believe sincerely that it is indispensable for the prosperity of the country as a whole, and they can do much to persuade others to the same opinion.  This commercial motive for maintaining existing protective tariffs explains in large part their wide prevalence, whatever other reasons may be adduced in their justification.

Sec. 4. #The infant-industry argument.# Most free-trade writers concede a limited validity to the claim that protection may be used to encourage infant industries and thus diversify the industries of the country.  If the natural resources of a land are adapted to an industry, it may be called into being earlier by a fostering protective tariff.  This is merely anticipating and hastening the natural order of progress.  In the American colonies the manufactures of such goods as iron, cloth, hats, ships, and furniture sprang up and continued not only without “protection,” but despite numerous harassing trade restrictions made in the interest of English merchants.  Can it be doubted that many of these industries would have developed and flourished after the adoption of the Constitution with no other favoring influences than those of rich resources and of economy in freights?  In the Mississippi Valley since 1880 natural gas, abundant coal, ore, and timber have made possible a great growth of industries without protection against the Eastern states.  Industries capable of eventual self-support must in most cases naturally appear in due time.  Economic forces will bring them out.  The protective system has often been likened to a hothouse, anticipating the season by a few weeks and at great cost.  The question is whether the mere possession of the hothouse is a luxury worth the price, if meantime the products

Copyrights
Project Gutenberg
Modern Economic Problems from Project Gutenberg. Public domain.