gives a false direction to capital and labor, and overwhelms consumers
with taxes and restrictions.

So that, _as regards the price_, these two tendencies neutralize each
other; and for this reason, the protective system, restricting the
supply and the demand at the same time, does not realize the high
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 impoverishing
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 form of cheapness resulting from the
increase of supply, or from abundance; the other towards that dearness
consequent upon the increased demand and the development of the general
wealth. These two tendencies neutralize themselves as regards the _mere
price_; but they concur in their tendency to ameliorate the condition of
mankind. In a word, under the protective system men recede towards a
condition of feebleness as regards both supply and demand; under the
free trade system, they advance towards a condition where development is
gradual without any necessary increase in the absolute prices of things.

Price is not a good criterion of wealth. It might continue the same when
society had relapsed into the most abject misery, or had advanced to a
high state of prosperity.

Let me make application of this doctrine in a few words: A farmer in the
south of France supposes himself as rich as Croesus, because he is
protected by law from foreign 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 him, as it was by the committee of the Legislature, in
these terms: "Do you want to be subject to foreign competition? yes or
no," his first answer would be "No," and the committee would record his
reply with great enthusiasm.

We should go, however, to the bottom of things. 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 i