Part 20 (1/2)

The price is then affected by two conditions--the demand and the supply

These conditions are necessarily subject to variation The relations of dereatly disproportionate, and the variations of price are almented dementation of the supply or a diminution of the demand

Consequently there are two kinds of _dearness_ and two kinds of _cheapness_ There is a bad dearness, which results from a diminution of the supply; for this iood dearness--that which results froood cheapness, resulting from abundance And there is a baneful cheapness--such as results from the cessation of demand, the inability of consumers to purchase

And observe this: Prohibition causes at the same time both the dearness and the cheapness which are of a bad nature; a bad dearness, resulting from a diminution of the supply (this indeed is its avowed object), and a bad cheapness, resulting froives a false direction to capital and labor, and overwhelms consuards the price_, these two tendencies neutralize each other; and for this reason, the protective syste the supply and the deh prices which are its object

But with respect to the condition of the people, these two tendencies do not neutralize each other; on the contrary, they unite in i them

The effect of free trade is exactly the opposite Possibly it does not cause the cheapness which it promises; for it also has two tendencies, the one towards that desirable for from the increase of supply, or from abundance; the other towards that dearness consequent upon the increased deeneral wealth These two tendencies neutralize theards the _mere price_; but they concur in their tendency to ameliorate the condition of mankind In a word, under the protective systeards both supply and demand; under the free trade systeradual without any necessary increase in the absolute prices of things

Price is not a good criterion of wealth It ht continue the same when society had relapsed into the h state of prosperity

Let me make application of this doctrine in a feords: A farmer in the south of France supposes himself as rich as Croesus, because he is protected by law fron competition He is as poor as Job--no matter, he will none the less suppose that this protection will sooner or later make him rich Under these circumstances, if the question was propounded to hiislature, in these tern competition? yes or no,” his first ansould be ”No,” and the coreat enthusiass Doubtless foreign competition, and competition of any kind, is always inopportune; and, if any trade could be permanently rid of it, business, for a time, would be prosperous

But protection is not an isolated favor It is a system If, in order to protect the farmer, it occasions a scarcity of wheat and of beef, in behalf of other industries it produces a scarcity of iron, cloth, fuel, tools, etc--in short, a scarcity of everything

If, then, the scarcity of wheat has a tendency to increase the price by reason of the diminution of the supply, the scarcity of all other products for which wheat is exchanged has likewise a tendency to depreciate the value of wheat on account of a falling off of the demand; so that it is by no means certain that wheat will be a mill dearer under a protective tariff than under a system of free trade This alone is certain, that inas in the country, each individual will be

The farmer would do well to consider whether it would not be more desirable for him to allow the importation of wheat and beef, and, as a consequence, to be surrounded by a well-to-do coricultural product

There is a certain province where the s, dwell in hovels, and subsist on chestnuts How can agriculture flourish there?

What can they make the earth produce, with the expectation of profit?

Meat? They eat none Milk? They drink only the water of springs butter?

It is an article of luxury far beyond the without it as ine that all these objects of consumption can be thus left untouched by theprices?

That which we say of a farmer, we can say of a n co to the increased quantity offered Very well, but are not these prices raised by the increase of the demand? Is the consumption of cloth a fixed and invariable quantity? Is each one as well provided with it as he eneral wealth were developed by the abolition of all these taxes and hindrances, would not the first use made of it by the population be to clothe themselves better?

Therefore the question, the eternal question, is not whether protection favors this or that special branch of industry, but whether, all things considered, restriction is, in its nature, more profitable than freedom?

Now, no person can maintain that proposition And just this explains the admission which our opponents continually ht on principle”

If that is true, if restriction aids each special industry only through a greater injury to the general prosperity, let us understand, then, that the price itself, considering that alone, expresses a relation between each special industry and the general industry, between the supply and the de from these premises, this _remunerative price_ (the object of protection) is more hindered than favored by it

APPENDIX

We published an article entitled _Dearness-Cheapness_, which gained for us the two following letters We publish them, with the answers: