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On True Political Economy
(The Whole-Hog Book)
John Wilson Bengough
1908
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Notes and Links
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CHAPTER VIII:
THE PLAN TO KEEP OUT GOODS
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| The High Tax plan has in view, not to get funds for
the State, but to keep out strange goods and so tend to
build up trade at home. This is to be done, of course,
in a way that is fair to each and all trades — to
treat them all the same; to aid all and hurt none. Such
is the aim. |
tariffs,
justice,
barriers
to entry |
| Now, we must ask in the first place, Is it well to
shield the trade of the land at all? And in the next
place, if so, is this plan the best by which that can
be done? For, of course, this is not the only plan that
might be thought of. Let us grant for the time that it
is wise to thus shield trade. It can be shown that this
can be done at least as well by bounty as by Tax, and
with scarce any of the evils of the Tax plan. |
protectionists |
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By the Bounty Plan: --
1. We could give aid to each and all trades, and
to each new one as it sprang up.
2. We would not have to give the aid till the
trade had shown that it had a right to it.
3. We would know just how much help each got and
what had been done to earn it.
4. We could stop the doles when they had been kept
up a fair length of time.
5. The doles, while fair to each and all lines of
trade, would cost far less than has to be paid by the
Tariff plan in the form of high price for goods.
6. We would not need the army of guards, spies,
clerks and so forth, and could save what we now pay
them.
7. There would not be the same scope for fraud and
lies and false oaths.
8. There would not need to be any rise in the
price of goods.
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subsidies, privilege, tax evasion,
privacy,
tax
efficiency, prices, canons of taxation |
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Here are at least eight points which the plan of
Doles can claim to score. For, in the case of the
High Tax plan: --
1. The wit of man can not so fix it as to help all
trades in a fair way. What helps one hurts the next.
If you put a tax on tools to help the trade that
makes tools, you, of course, hurt the trade that has
to use such tools, and as new trades spring up this
mess grows worse and worse.
2. Aid has now to be lent to new trade, as pap is
fed to babes, and it is a case of pay, pay, pay, till
the child is grown up. But, strange to say, it does
not grow up at all, but with each year of its age,
calls for more and more pap.
3 No man on earth, let him be wise as he may, can
tell what is paid now to any one trade by the Tax
plan, nor what they do for what they get.
5. There is nought so hard to get rid of as a tax
once put on goods. It will grow, but it will not come
off.
8. A rise in the price of goods is the heart of
the whole scheme. If there were no such rise where
would the "aid" come in?
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subsidies, corporation
privileges, prices, cost of
living, |
| It is hard, in short, to know what can be said for
this plan. Some few pleas are made, but these have the
slight fault that they are not true. |
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| (a) It is said that we who put up the wall do not
have to pay the tax on the goods that come in; that is
paid by those who send them. There is not one such case
which is of any use to our home trades. The tax can
only aid the home trades when it puts up the price and
thus gives them a chance to get more gain, but the only
case in which the man who sends in goods pays the tax
is one in which the price does not go up. Here is a man
in France who makes a pill. No one else knows how to
make it, so he sets the price as he likes at some point
twixt what it costs him and what he can charge so as to
sell any. If the U. S. puts a tax on pills, it would be
for him to send no more pills in, or to pay the tax out
of his own purse so that they could still be sold in
the States at the old rate. But what good would that do
those who make pills there? Or here is a case of a man
who has wheat to sell and he deems it best to sell it
in a land that is near by. Though he pays the tax on
it, there is no rise in the price, as the land he sells
in has wheat to spare. What good does this do to the
wheat men of the land? A rise in price is what they
want. |
prices |
| (b) It is said, too, that a high tax wall does not
make things dear, as it tends to cause more mills to
spring up, and these fight for the trade and so bring
down the price to what it was at first. Why do more
mills spring up, if not to share in the gain from the
rise in price? No doubt the fight that in due time
takes place (if they do not all join in a Trust) brings
down the price, but not to a point so low as it would
be if the wall had not been put up — if there was
no tax on the thing made. |
prices,
monopoly |
| A tax can not fail to raise the price of that on
which it is put, in the whole range of goods that are
sent in from o'er the sea. It is only in the case of
"goods" of a rare kind that this may not take place. If
a stamp tax were put on the press it may be the Times
would cost no more than it now does, for the firm that
owns the Times might choose to keep the price as it is
so as to hold those who now read it, and to that end
would pay the tax and not charge it in the price. But
the Times is a rare sort of "goods." |
cost of
living, prices |
| So much for the tax plan. We see that it is not at
all so good as the Dole plan would be, and we have come
far short here of all that might be said with truth of
its bad points. If it is wise at all to shield the
trades of a land let it by all means be done by fair
and square doles paid out of a poll tax or a straight
tax in some form. |
canons of
taxation |
| But we have now to ask, Is it, in any case, and by
any plan, wise to try to "shield" trades and thus aid
them to grow? |
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CHAPTER
IX: IS IT WISE?
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| For what trades should we set up the shield, for a
few or for all? On this point there are two views held.
Some say that only new trades should be thus dealt
with, to give them a chance to get well on their feet;
but the view held by most is that "home" trade as a
whole should thus get help. |
barriers to
entry |
| As to the first. It has been found, where tried,
that when once these Babes get a taste of pap, they
will not let go. But there is no doubt that there is
here and there a Work that is hard to start, but which,
if once put on its feet, would be a great boon. The
thing is to pick these out. No doubt there are men all
round us who, if they got the right help — if
they were put at ease, and had time to read and think
and plan — would come to be great men, and give
back to the world much more than they have got. But the
thing would be to find just the right men. Who could
pick them out? If it were left to a free fight for the
aid we may be sure the right ones would not not win,
but it would go to those who had the most cheek or push
or help from friends. So it is with aid to trades. No
one can tell just which it will pay to help, and in the
fight the strong gain the prize. Babe trades have just
as much chance as young pigs would have in a scrap
round the trough with full grown swine. And in any case
it is not more sure that aid will do a young trade good
than that it will be wise to give great wealth to a
young man as he starts out in life. It oft proves a
curse to him. |
subsidies, special
interests, privilege, corporation
privileges |
| Since, then, we can by no means pick out the young
trades for aid, we must give help to all or none. We
come, then, to the next view, that "home" trade at
large must have aid. |
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| Now, it is clear in the first place that, as the
aid is to take the form of a tax on goods sent in,
which goods are made or could be made at home, it will
be seen that we can only in any case aid some trades
— those, that is to say, which make goods of the
kind that is brought in. Here is a man in the live
stock trade. He has a big stock farm which he runs at
great cost, and which gives work to scores of men. If
we are to aid all trades we can not pass by this one.
But (in the case of the States) live stock is not
brought in at all, it is only sent out. How, then, can
a tax on live stock aid this farm? And when we come to
trades of the land are in the same of the whole list
there are just a tax. So to talk of aid in this way to
all is to talk stuff. If our plan was aid by means of
Doles we could treat all in a fair way, but it is the
Tax plan we have now to deal with. |
tariffs,
subsidies |
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In face of the hard fact thus set forth, does not
the case for the High Tax plan at once fall to the
ground? "Oh, no," cry its friends. "Of course the tax
can only give help to some trades (those in their
goods) but yet this times will be made good all
round." What do you think of this plea? Let us put
the case in this way: Here is a small town where
times are dull. Two smart men live there, and they
rise up and one of them says:
"Friends, things are in a bad way here, and we want
to make good times for you all. This is our plan.
Let each one in the town pay us a tax of three
pence per day. It is not much, and you will scarce
feel it. It will be but a small sum even for those
of you who have wives and kids to pay for. Yet this
slight tax will, as you may see, give our town two
rich men in a short time, to wit, self and friend.
We will turn to and spend our wealth. We will be
quite free with it. We will buy the best food and
drink, and lots of it; we will build fine homes,
lay out parks and grounds, give fetes and treats,
and play the part of lords in all ways. This will
make trades brisk, and call for work of all kinds
for which we will pay well. The high pay you will
get will give you in turn a chance to live well and
spend more in the shops, so that things will look
up for those who work farms, and in short make
things hum all round."
What, think you, the folk of the town would say to
all this? Would they not say: "You two chaps must
take us for fools!" Yet there is as much to be said
for this scheme as can be said for the plea that to
aid some trades is to aid all.
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special
interests, privilege |
| But let us take it that a High Tax could be made to
aid all. It would then do what we see could be done by
the plan of Doles we speak of — that is, each
could get a fair share of help from the top to the foot
of the list. Well, what then? Let us take such a plan
in the case of this same town and see how it would
work. Each man there would pay a tax to each trade,
but, of course, when he came to count up the whole sum
he thus paid he would find it far more than came back
to his own hand as his share, or, at most, he would get
back no more than be had paid out. It is plain that
this would be the case of much cry and no wool. You can
see how it works out when you think of aid to all; but
when, as by the High Tax plan the aid goes but to a
few, you do not see the fraud on you quite so well. You
see the big Works with the tall stack which sends forth
the black smoke and is so hard at it from morn till
night, and you say - see there! What a fine thing it is
to thus build up a trade and "give work" to such a
crowd! But you do not see that a share of that tax goes
out of your own pouch and does not come back to it; nor
do you see that the waste and loss of such a "plan of
aid" adds to the cost of all you have to pay with the
part of your wage you have left. It is true a High Tax
makes "more work." But so does the rain that wets the
hay on a farm. |
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CHAPTER X: AS TO
HOME TRADE
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| To say "let us keep our marts for our own trades,
and bar out the goods that would come to us o'er the
sea; let our own land make all the goods it needs, and
so keep our cash in our own purse," this (which we hear
so oft, and which is thought so wise) is the same as to
say, "let us keep our mouths for our own home-made
bread," or or "let keep our trips our own legs
make." |
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| Our lives are full of wants, and these we seek to
meet. If we are sane we seek to meet them in the best
way, and that is time, or toil, or both. A man who
would walk round a block when he could take a short cut
to the place he had in view would be a mere dunce. The
man who would not ride though he was in haste, so that
he might use his own legs, we would call a fool. So
good sense bids us make or buy the things we need in
our own land, if it best suits us to do so; if it does
not so suit us let us buy where we please. Is not sense
our best guide as to the way in which we shall get the
things we have need of? If we are to work out this rule
to the end, what of all those things which are not to
be had at all in our land? Are we to just go in need of
them? This is so mad an idea that no one will act on
it. Sense tells us once more that the way to
get things is to set our hands to the sort of work we
can do best, and then trade the things we make (and
which we do not need) for the things we need, but can
not make. You need salt, let us say. Will you
then make it in your own land; dip a pot of brine out
of the sea and boil it till all goes off in steam and
leaves the salt, or will you trade the boots and coats
you can make for the salt which is got from mines in
far off lands? It would be just as good sense to say
that the world ought to be cut down just to the size of
our own land. It is not more wise for a land to try to
"make all things it needs" than for a man to do so, and
of a truth it is not the way in which God meant us to
act. |
human
desires, man seeks, trade, division of
labor |
On what grounds is it held, then, that we should
keep home trade for home marts? On three:
1. That home trade has more gain in it.
2. That even though the high tax on goods puts up the
price of goods made at home, the real cost is no
more.
3. Even if it were more, those who pay it get it
back. |
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I. That there is more gain in a trade twixt John
Bull and Pat than there would be in the same trade
twixt John Bull and Hans is not true. Good sense
laughs at it.
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| II. The "real' cost" of a thing is not set by the
more or less toil it took to make it, but by the toil
it would take to make what you could get it for. A man
who could make a pair of boots well and in a short
time, if he should try to make a coat, would do the
work ill and take far more time. The coat would be
dear. It would not be sold at its "real cost" for that
would be the worth of what the man could do in the boot
line with the same toil and time. A good part of the
price would be mere waste of skill in a wrong line, and
thus it is with the price of goods made at home that
could best be made o'er the sea and got in trade. |
division of labor, prices |
| A man who is thought to have had a great head
[Horace Greeley] once said, "I need iron and I must buy
it; you say it is my part to get it cheap. Yes, but you
see, I buy iron not (in real truth) with cash, but with
the fruit of my toil. That fruit is in the form of
books, and it will pay me to give ten pounds a ton for
iron made at home by men who can and do buy my books,
than take it for five pounds a ton from a strange land
where my books are not bought. The real cost to me of
the iron is less, and my case is that of men in all
lines of work in this land." |
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| This sort of chaff will catch some birds, but it is
mere chaff. The point is this: could the same time and
skill in his land bring forth more wealth in some other
form than iron? If not — if the land was one in
which iron could be made with great ease and much
gain— then there would be no need of a tax to
"shield" the trade; but if so, if work in the iron line
could, as a fact, only be done as it were by force, as
plants are grown in a hot house, then the time and
skill would bring line, and the wealth made sent off in
trade for iron. In that case all would have more gain
and could buy more books. In the case as he puts it,
the fact is that he has been made to pay ten pounds for
skill that, if put to some other form of work, would
have cost but five. His loss is as sure, and of the
same kind, as if he had been made to hire a small boy
to do a man's work, and pay a man's wage. |
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You will hear it said that high price makes no
odds, since we pay it to our own folk in our own land.
This is nice, but it is said as a rule by those who
sell. Yet it ought to work both ways if it is true. If
it makes no odds that you have to buy at a steep price,
it ought to be just as fair for the law to make the
shop men sell at a price less than cost. But, you tell
them that, and hear what they will say.
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CHAPTER XI: GOODS OUT AND IN
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| "It is a gain to send goods out, a loss to bring
then in." So we are told (this is known as the "Balance
of Trade" Doctrine). It would be all right, if what we
spoke of were pests we were glad to be rid of —
but to say the least it has a queer sound when we speak
of "goods." Yet grave men say this as if they meant it,
and no doubt they do mean it; yet we should think a dog
had less than dog sense if he should snarl when you
gave him a bone and wag his tail when you took the bone
from him. |
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| If each man in the land got in more wealth than he
gave out he would be apt to get rich; but it seems that
if they all did this at once they would grow poor!
Strange, to be sure! |
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| Now, if the plan was to put a high tax on all the
goods that were sent out and no tax at all on what came
in, it would seem more apt to make us all rich, for the
land that has the best store of good things must be the
best place to live in. But if such a plan were brought
up, the High Tax men would raise a great howl. What
would they say? Why, that if you did not send goods out
you could not get things of more worth to bring in, and
so your land would lose more and more. Quite true, but
do they not kill their own case when they say that?
Their case is, bear in mind, that we grow in wealth
only as we send out more than we get in! And of course
there is no truth in this. Trade, when it is fair and
just, has gain on both sides of it, for each gets what
is of more worth to him than what he gives. Each pound
of goods sent out means more than a pound (in worth)
brought back. If it were true that a land did well when
it sent out more than it brought in, then it would
reach the top notch of gain if it sent out all its
goods and got none back at all! From this point of view
there ought to be cause for great joy in the fact that
rich girls in the States wed poor lords from John
Bull's land, as they take with them huge bags of gold
for which nought comes back; and it must be a fine
thing, too, that more and more of the men who work
farms in the West send rent each year o'er the sea to
the swells who own the land and are so kind as to let
them work it. If, now, the States could only have a
war, and get the worst of it, and be made to pay a big
sum to the land that beat them, what a fine spec it
would be! It is hard to think that men are to be found
who talk such stuff as this and mean it, yet it is
true. You may read it in books by men who are said to
be quite sane, too. It is a queer twist in thought,
that you do well when you sell, but not when you
buy. |
natural
resources, absentee
ownership, rent, all benefits...,
in one's
sleep |
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CHAPTER XII: A TWIST IN THOUGHT, THAT'S
ALL
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| How came this queer form of thought to take root?
Why do sane men hold the view that the more goods a
land sends out, and the less it brings in, the more
rich it grows? That it pays more to sell than to buy?
When wild tribes trade they give goods for goods; and
this is the way in which some rude forms of trade still
go on in our towns, as when men come round for grease
and give soap for it. No such man ever thinks that he
does well when he gives more soap than the grease he
gets is worth. But trade is not now done as a rule in
this rough form. Cash, or notes, or bills or some such
"sign" for goods are used, and not the things that are
dealt in. But to this fact we may trace all the fog
that is in the minds of men on the point we have in
hand. |
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| Of course, as trade went on, some sign for wealth
had to be got. One man might want to give a drove of
hogs for a house, but he would not care to drive the
pigs for miles, nor could his friend move the house.
But with some such thing as gold as a sign of value the
trade could be made quite well. To be sure, in the
first place they would need to know just how much
wealth the unit of gold was worth, so that they could
count the worth of things they were to trade; the same
as, ere you could tell the length in yards of a rope,
you must have a yard stick to fix what you mean by a
yard, and the same of weight and bulk, we must first
come to one mind on what is meant by a pint; a quart,
and so forth. As the world goes on, trade tends more
and more to be done through the use of cash, bills,
notes of hand, and such things; and as these things are
dealt with day by day we get to think of them more than
of the goods they stand for; and at length we are apt
to get the thought that cash is worth more than the
things you give for it, etc. When a man buys a coat and
gives the cash for it, the shop man says, "Thank you."
Why does not the man say "thank you" for the coat?
Whence springs the idea that the cash is worth more
than the coat? No doubt from the fact that cash is a
thing you can turn into any form of goods at once, for
all are swift to sell for cash, but to trade a coat for
some thing you may want, say a pair of boots, you must
find some one who has the sort of boots you want and
who at the same time is in need of the size and sort of
coat you have to give. The cash seems worth more than
the coat, since you can change it for what you may want
with so much more case. If the man who went to the shop
for the coat gave, not cash, but eggs and cheese in
trade for it, the terms buy and sell would not rise in
his mind, he would think of it as a trade, and it may
be the shop man would not say "Thank you." In this case
they both sell and both buy, and both think of it as a
fair deal; but if cash is used, they think one buys and
the other sells, and he who sells gets the best of it.
It is not so; the cash stands for just the worth of the
coat, and the man sells the cash as much, as if it were
eggs and cheese. But such is the twist in our thought
on this point that we cling to the view that he who
sells gets the best of it. So, when we turn our
thoughts to the Trade of a land, we still have this
idea, and thus think that a land which sells most and
buys least is the land that gains. But in truth and
fact, it is the man who buys more goods (that is, gets
in more goods) than he sells (that is, gives out) who
gets rich. If he sells for, say, 10, and with that 10
buys goods worth to him 20, does he not gain? And so
with a land. If it gets for its exports that which is
worth twice as much in the form of imports, why should
we think it a loss? You see where the twist of thought
is? When we use the word "sell" we think of cash, and
it means not give out goods but get in gold, and when
we use the word "buy" it means not get in goods but
give out cash. But it comes straight when you keep in
mind that it is goods we want and not the "sign" for
them. |
trade, |
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