on the subject of national wealth and national exchanges, and there is no doubt either that deductions have been made from these facts constituting axioms in that department of knowledge which is known under a certain name, the name of political economy. To sneer at these deduction as theories,' and to say that such and such people have but a poor opinion ' of political economy,' does not alter the facts, any more than sneering at the Newtonian system of astronomy alters the positions of the planets. Something must be true in political economy; it only remains to determine what that something is. Our contemporary, whose untutored mind' sees national prosperity in a surplus of exports, is, no doubt, in error; but he is none the less a political economist turned the wrong way uppermost. He thinks that to raise the price of manufactures by Protection, as the Yankees do, increases the demand for those manufactures, raises wages, and adds to the prosperity of the country. Be it so; but in exercising his faculties even to so little purpose as to draw these absurd conclusions, he is a political economist, although, like the dying Goethe, he wants more light.'

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Let us look for a moment at this assertion about wages. If Protection causes artisans to pay more' (in America) for clothing and other articles than they did at home, they got more work and higher wages.' Is this the case, or is it not? Is work easier to get, and are wages higher owing to Protection-that is, owing to the exclusion of foreign competition? And, first of all, what are wages? They have been defined to be the co-operation of past and present labour. In other words, the payment of wages is the means by which capital, which is the result of past labour, endeavours to make itself profitable by the employment of present labour. There could be no wages paid or labour employed where there is no capital. The demand for labour depends then on the amount of capital which is disposable in a country. But the exclusion of any class of products by what is called Protection, in no way increases or diminishes that amount of capital. All it can do is to tempt capital out of non-protected trades into protected trades, varying the employment, but not by one farthing increasing the amount of that capital. Does such exclusion then increase the rate of wages? In the protected trades it may, but only at the expense of the non-protected trades, for the simple reason that the amount of capital spendable in wages is not altered by the exclusion of certain classes of foreign manufactures. On what then does the rate of wages depend? Simply on the proportion which the supply of labour

bears to the demand for it. And this is in no respect affected by Protection. It follows, then, that Protection cannot and does not raise wages, as it in no way affects any of the elements on which the rate of wages depends.

Perhaps our contemporary will be able to follow the argument better if we put a case, a case which will only be the fulfilment of his own aspirations. Suppose a General Election. The working man, beguiled by the eloquence of the member for Preston and the member for Eirkenhead, rushes to the polls all over the three kingdoms, and returns a triumphant majority of Protectionist candidates. The policy of the last forty years is to be promptly reversed. Sir Stafford Northcote, like a respectable and conscientious man as, in spite of his Sheffield speech, we believe him to be, refuses the task. Mr. MacIver is posted at the Exchequer, and Mr. Ecroyd at the Board of Trade. A ten per cent. duty is placed on all articles of foreign produce. It had been intended to exempt Canadian wheat from the tax, but it is found that our depressed and harassed agriculturists' will not be satisfied with an arrangement by which all the wheat of the States will come in at a side door, and wheat accordingly shares the impost with other produce. Bradford and Preston illuminate, and Mr. Gladstone is burnt in effigy in all the principal manufacturing and agricultural towns. A year passes over and there springs up a general belief of an imminent millennium. Somehow or other, however, incomes do not appear to go so far as they did. The butcher's bill is larger. The grocer's bill is larger. The draper's bill is larger. Those who drink wine have more to pay for it, and there is a corresponding appreciation' in the price of spirits. And, worst of all, the labourers who only got just enough to make ends meet when bread was cheap, are forced to subsist on short rations, or to take refuge in the Union now bread is dear. It is, to be sure, a source of great satisfaction to the working man that the income tax (which he did not pay) has been found to be no longer required; but, after all, wages don't rise. The cause is evident. Less can be bought of all consumable articles for the same money, and the result is that the demand for those articles diminishes; and the need of that labour by which they are produced falls off. First luxuries, then conveniences, and last of all even necessaries, are in less demand. 1007. a year goes only as far as 907. used to go; servants are dismissed, railway journeys are minimised, carringes are laid down, economies are practised on every hand, and the two masters looking for one man are changed into the two men looking for one master. This is no fancy picture. It

must be so until the happy day when two and two make five, or until politicians discover for a second time that universal dearness is inconsistent with national prosperity.

Our Quarterly contemporary, though he seems to have put a duty nearly prohibitory on all importations of common sense into his own inner consciousness,' has no monopoly of ignorance. There is a paper in the Nineteenth Century for August, which perhaps bears away the palm for ingenious mistakes. Fancy a political economist putting as a probable case the following!

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as

Will foreign nations buy more of our goods because we 'put a duty on their goods?' (Who ever thought they would?) Certainly not.' (Wonderful discovery, immediately succeeded by a portentous blunder.) They will continue to buy from us just what they do now, neither more nor less; . . . but on the other hand we should buy 40,000,000l. or 50,000,000l. 'less of their goods' (why these exact sums we are not told), and consume 40,000,000l. or 50,000,000l. more of our own goods.' How then are we to be paid for these exports, which are to be neither more nor less than they were before? Not in goods, which is the universal way in which nations pay each other, for we have determined not to take their goods; then in bullion, with the result of raising enormously the price of every description of consumable article in this country, and, a natural and inevitable consequence, diminishing the money value of wages, and the spending power of the consumer.* We should like to be told how long this state of things could continue, and for how many years foreign nations would find 40,000,000l. or 50,000,000l. of bullion to pay for our manufactures. It is clear that neither the writer of this article nor our Quarterly contemporary have put before themselves the nature of international trade. They evidently look upon exportation and importation as two entirely distinct operations, in the first of which the nation sells an article, and is paid for it; and in the second buys an article and pays for it: forgetting that the two operations are inseparably connected. Feeling that the more any tradesman sells at a profit, and the less he buys for his own consumption, the faster he will grow rich, Sir Edward Sullivan, and writers of his class, are misled by the false analogy between the two cases, and hence look upon a surplus of imports as a national misfortune. Our Quarterly contemporary, for example, asks the question in

*The whole coinage of the country is supposed to amount to not more than 120 millions sterling.

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good faith and puts it as an argumentum ad absurdum. Why bother ourselves with any exports at all? Why not do away with them altogether and confine ourselves to the import trade?' Why, indeed? Simply because that in some way or other we must pay for the imports, which in other words are the things that we want, and that one principal way of paying for imports is by manufacturing and sending out exports.

Take the case of an ordinary tradesman, remembering that there is no difference, except in amount, between the transactions of a village shop and of a great country. A tradesman starts with a certain stock of goods, worth, we will say, 1,0007. Within some certain time or other he sells the whole of this stock, which he replaces with other stock, if he wishes to continue his business, or for which he receives a price in money if he wishes to wind it up. It is evident that the larger the price he gets for this stock, or the greater the amount of stock by which he replaces the original stock, the better and more profitable his business is. If he gets in exchange for his original stock a fresh stock worth more than 1,0007., or if he gets more than 1,000l. in money as the price of his original stock when sold, he will have made a profit. But the selling of the original stock in the case of a tradesman exactly corresponds to the act of exporting in the case of a nation, and the receiving a price in cash or the renewing of the stock in the case of a tradesman exactly corresponds to the act of importing in a nation. It follows, therefore, that unless the imports exceed the exports, trade cannot be profitable.

It is almost incredible that men of ordinary understanding should blunder so hopelessly as to this question of exports and imports; but so it is, and we believe that it arises partly in the way we have mentioned. Another Protectionist craze, however, has no doubt something to do with it. It is the habit of this school, if school it can be called, to look upon wages as the one thing needful. Forgetting that wages are useless unless paid for profitable labour, they assume that anything which tends to increase employment in a country must necessarily be good for the prosperity of that country. At first sight it might be supposed that to increase exports and to discourage imports would contribute to increase the amount of employment and so add to national wealth. But the fact is, that by discouraging imports, and by encouraging native industry,' the consumer has to pay more than he otherwise would do for what he wants; native industry is made less productive than it would be if freely exercised; labour is wasted, and the result of a greater number of hours of work becomes no greater than of a smaller number of hours because applied to articles

in the manufacture of which an English workman is inferior to a foreigner.

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Sir Edward Sallivan is, however, not content with suggesting a return to import duties on manufactures. He asks the question whether a five-shilling duty on corn-by which we presume he means wheat--would benefit the working classes; and he says if it merely raised bread a halfpenny a quartern it would not. This is surely rather a mild way of talking of what would be a great national misfortune. But he goes on to say that a five-shilling duty (on wheat) means a food tax of (only) 6d. per week on every large family, and treats this as a trifle. A correspondent of the Economist' points out that there is many a large family the income of which is not above 15s. a week, say 40l. a year, and that a tax of 6d. a week-26s. a year-would be a tax on that family equal to about ten and a half days' wages, or 34 per cent. on the income, and nearly as bad as an eightpenny income tax. Sir E. Sullivan calculates the produce of the tax at six millions and a quarter, and says, without the slightest attempt at proof, which indeed would be impossible, that more than half would have gone into the Treasury. The whole tax would go into the Treasury, being a customs duty; and the correspondent of the Economist' is in error in saying that half would go into the pockets of the landlords. What would go into the pockets of the landlords would be not this, but a still larger sum arising from the enhancement of the price of every quarter of wheat grown in the United Kingdom, to say nothing of all other produce; for Sir Edward Sullivan, though talking merely of wheat in the sentence to which we refer (p. 180), contemplates a general reimposition of import duties, bringing with it a general rise in the price of articles of consumption. And what does that mean?

We may take the population of the British Isles at 35,000,000. It has been calculated that the consumption per head per annum of the following articles amounts in quantity and price as under: