prove that every sort of communication is productive of opulence.

M. Bastiat says:

"Frankly, is it not humiliating to the nineteenth century that it should be destined to transmit to future ages the example of such puerilities seriously and gravely practised ?"

We reply, Frankly, it will be humiliating to the nineteenth century to have to transmit to future ages Bastiat's puerilities in reasoning as examples of what could be thought worthy of being presented to France, England, and the United States by a person claiming to be, and by many even highly educated persons held out to be, an eminent logician. ·

Chapter X., entitled "Reciprocity," is in the same vein. A swamp, a bog, a rut, a steep hill, stormy oceans, etc. are veritable protective tariffs. By the railroad, the steamship, etc. we do all we can to remove the other obstacles; but the artificial obstacle, which it will cost nothing to remove, we suffer to remain. Why do we suffer it to remain? Because we believe that this particular obstacle to intercourse is not an obstacle, but an aid, to acquiring opulence. Whether it is or is not so cannot be determined by giving it the same name, putting it in the same class, with other, things which we recognize as pernicious. If there were a tunnel formed. between England and France, it would not be absurd to take such measures as would prevent its being used for the passage of hostile forces. When we build railroads and steamships, we do not logically bind ourselves to allow them to be used for every conceivable purpose, whether useful or pernicious; and the fact that the railroad or the steamship may be made to subserve a certain purpose, affords no ground for inferring that such purpose is or is not desirable. This must be ascertained by quite another sort of logic. Opium and rum, the smallpox and the yellow fever, are not necessarily beneficial because distributed by steamships and railroads.

Chapter XI. is entitled "Absolute Prices." He says:

"If we wish to judge between freedom of trade and protection, to calculate the probable effect of any political phenomenon, we should notice how far its influence tends to the production of abundance or scarcity. We must beware of trusting to absolute prices; it would lead to inextricable confusion."

He assumes throughout the chapter that protection produces scarcity, and free-trade abundance. Cases might exist where it would do so. Generally it does the reverse, and it is notably so in the United States. Why is this? Because, when the population is fully occupied, much is produced; there is much to divide. When a considerable proportion is unoccupied, little comparatively is produced; there is less to divide. We saw the latter from 1873 to 1879: wages and profits were both low. We see the former now in 1881: the people are more fully occupied, and both wages and profits are higher. But the tariff also is higher. The difference has arisen from the abandonment in 1873 of the active formation of instruments, and from the resumption of the movement in 1880. But the larger production is concomitant with high prices, and the smaller production was concomitant with low prices. Cheapness, then, may exist without abundance, and abundance may exist without cheapness, however much this may astonish the free-trader.

Chapter XII. is entitled, "Does Protection raise the Rate of Wages?"

M. Bastiat says to the working-man:

"But justice, simple justice, - nobody thinks of rendering you this. For would it not be just that after a long day's labor, when you have received your little wages, you should be permitted to exchange them for the largest possible sum of comforts that you can obtain voluntarily from any man whatsoever upon the face of the earth?"

M. Bastiat put himself forward as a logician, and also as a sincere expositor of truth. He desired and intended, so he implied, to teach the truth, the whole truth, and nothing but the truth; and yet we here have him commencing his argument from the middle of the economical fact he was examin

ing. He commences with the poor laborer when he has got his little wages: then, truly, it would be well for him to get as much in exchange for them as possible. But M. Bastiat carefully keeps out of sight that it is the protective policy which has given the man his employment, and consequently his wages. M. Bastiat may have believed that the man would get as good or better employment under a régime of free-trade; but if so, that was the point at issue. To assume it would seem to show M. Bastiat to have been more anxious to gain his point than to ascertain the truth.

M. Bastiat continues:

"Is it true that protection, which avowedly raises prices, and thus injures you, raises proportionately the rate of wages?"

Here is the same rhetorical trick repeated. It is assumed that the man will get work under free trade the same as under a protective policy. To assume this is to take the whole free-trade theory for granted, without any proof or argument. M. Bastiat, however, to give everyone his due, seems really to believe he is right; and he sometimes does argue the question effectively from the premises which he assumes. These, however (unfortunately for free-trade philosophy), are simple blunders. They are venerable blunders, it is true, as they can claim the respectable paternity of Adam Smith more than a hundred years ago; but they are very evident blunders for all that. We may borrow here Quinctilian's charitable remark about Homer, and say, "Sometimes the good Adam Smith nods." Unfortunately, he nodded at a very important point; and he did the sleeping scene so naturally and effectively in his pages that every freetrade economist for a century and over has fallen into a slumber just where he did.

Bastiat says:-
:-

"The rate of wages depends upon the proportion which the supply of labor bears to the demand."

"On what depends the demand for labor? On the quantity of disposable national capital. And the law which says 'Such or such an article shall be limited to home production, and no longer imported from foreign countries,' can it in any way increase that capital? Not in the least. The law may withdraw it from one course, and transfer it to another; but cannot increase it one penny. Then it cannot increase the demand for labor."

This is the fundamental position of the free traders. It was taken by Adam Smith more than a hundred years ago, was repeated by Mr. John Stuart Mill some thirty years ago, again repeated by M. Bastiat, and is now presented to the American people by the Free Trade League of New York in the translation of M. Bastiat's "Sophisms of Protection” now under review. If this position can be maintained, the free-trade doctrine stands. If it cannot be maintained, the free-trade doctrine falls. It has been already examined as presented by Adam Smith, and again examined as presented by Mr. Mill. Let us now examine it as put forward by M. Bastiat. He, of course, uses the word "capital" in the French sense, as signifying everything which can be used to assist or support labor; and his proposition is therefore somewhat broader than that of the English authors, who limited the words to the funds set apart for the support of productive labor.

To get at the bottom of this question, we must see what is the normal condition of an industrial community. Evidently it must be possessed of certain industries, A, B, C, D, etc. Let us examine industry A. It was commenced for the sake of profit. The same motive led to its increase continually, so long as the satisfactory profit was attainable; but, finally, it over-ran the market, as was evidenced by a portion of its products remaining unsold (or a portion of its materials remaining unconverted into finished products) by reason of a lack of demand. The producers then find a portion of their capital locked up, either in finished products or in unconverted material, or in both, and are compelled to cease augmenting their production. Some stock they find it, upon the whole, convenient to carry rather than be unpre

pared for fluctuations in the demand; and they naturally carry as large a stock as they can without reducing profits below the point which satisfies the existing "effective demand for accumulation." Industry A, then, normally carries on a certain stock of products, and this stock locks up a portion of the capital employed in the industry. This stock is unemployed capital, and is recognized as such by Mr. John Stuart Mill, who, however, failed to observe the significance of the fact, or its important bearing upon economical reasoning. What is true of industry A is true of B, C, D, and all the others acquired by the community, which thus is seen to contain a multitude of industries, whose aggregate stocks of finished products and materials compose the aggregate unemployed capital of the community. It is the function of this unemployed capital to regulate the movement of industry. When the stocks increase, they enforce a slower movement; when they are diminished, prices rise, and the industrial movement is stimulated to greater activity. We come, then, inevitably to the conclusion that in an industrial community the increase of industry is not limited by capital, but that the increase of both industry and capital is limited by the "field of employment."

But what limits the field of employment? Evidently, the limits which exist to effective demand. Let us confine our attention to a single industry, say the shoe manufacture. The desire of men for shoes is in itself limited. If they could be had without effort or sacrifice, a certain number of human beings would use only a certain number of shoes. Interpose a difficulty of attainment, the necessity for effort or sacrifice, and less will be used. There is, then, a limit to the shoe manufacture, even in a community where every person could find a sale for his labor if he desired to find one; and the field is narrowed still further if a portion of the community is not able to find employment. Evidently, only a certain number of shoes can be profitably made at any cost you choose to fix upon. Reduce profits ever so low, and still the manufacture has its limits. Increase now the aggregate means of the community for the purchase of