Chapter VII: Arguments for Fiscal Reform, I.—: The Argument from Authority.

I. The Argument from authority—II. Cobden’s optimism—III. Free Trade, Free Imports—IV. Mr. Chamberlain and the Frankfort Treaty—V. Balfourian Retaliation—VI. Against French Automobiles—VII. Imports and home industry—VIII. English workmen and Protection—IX. Dumping—X. The drain of gold—XI. Living on our capital—XII. London.

All the old Protectionist lumber has reappeared, decked out with tinsel and coats of fresh paint to make it look new. When Mr. Chamberlain and his friends can find a single phrase in the books of independent economists which seems to support their views, they quote it with alacrity, and invoke “the eminent authorities” whom they usually treat with profound contempt. They rely on the old scholastic method, which cut short all questions with two lines from Aristotle. Mr. Chamberlain has perfected the “argument from authority” he has invented an anonymous authority. In his speech of October 6, 1903, he declared that “one of the highest authorities of this country” had told him that “the incidence of a tax depends upon the proportion between the free production and the tax production—in this case the free production being the home production and the production of the Colonies, the taxed productions the production of the Colonies. “This gentleman” is of opinion that if, for instance, the foreigner supplies, as he does in the case of meat, two-ninths of the production, the consumer only pays two-ninths of the tax. If he supplies, as he does in the case of wheat, something like three-fourths of the consumption, then the consumer pays three-fourths of the tax. If, as in dairy produce, he supplies half of the production, then the consumer pays half the tax. I do not know who this “high authority” is who persists in remaining anonymous, nor do I know if Mr. Chamberlain has accurately expressed his views; but anyhow he has not explained how there can be two market prices for the same goods, one price for foreign wheat and one for that grown at home and in the Colonies. If this were the incidence of the tax, preferential tariffs would be of no avail, since they would not raise the price of home or colonial products. Mr. Chamberlain wisely adds, “This is a theory like any other. . . . ” It is not a theory like any other: it is at variance with all known facts.