Note A3-8-6 — Chapter III

Hermann, in his review of Dönniges' System des freien Handels und der Schützzölle (Münch. G. A. Sept. und Octbr., 1847) calls attention to the point that a decrease of the cost of production, by merely lowering wages, is no gain to the national resources, but only an altered distribution of them, for the most part a very unfavorable one. But when a nation is advancing on this road, it may strengthen its exportation by such means, as it might granting export premiums at the expense of the workmen. This would lead, on the supposition of entire freedom of trade, to a corresponding depression of the lower classes in other countries; and against such contagion a protective tariff may operate in a manner similar to the quarantine. This is much exaggerated by Colton, Public Economy of the United States (1849), p. 65, 178. America needs a protective tariff more than any other nation, because of its dear workmen and capital. In Europe, the upper classes rob labor of its product, while in America, labor itself enjoys its products. Free trade would lower America to the level of Europe.