Venturing Into Public Policy
In 1849, Thomas Clarkson of Toronto was a member of the Toronto Board of Trade, but not yet its president. He was a merchant and auctioneer, and had been for most of his time in Canada which started in about 1832.
He was clearly an inexperienced speaker when he made the following speech to a special public meeting called to discuss reciprocity—free trade—with the United States, though once he got past his initial reluctance, he made a fine speech. This transcript is as it appeared in the Globe newspaper on February 21, 1849 under the heading Speeches at the Late Free Trade Meeting: (with paragraph breaks added)1
MR. CLARKSON said,—As I have never been accustomed to deliver my sentiments on the avarious subjects which have become matters of public discussion, I feel considerable diffidence in addressing this meeting, and that I may not be confused or embarrassed in what I have to say, I have adopted the sole course of writing down the leading features of my speech. It is perhaps only right, Mr. Chairman, that I should apologize to the gentlemen who have taken so active a part in calling this meeting together, for wishing to occupy any of your time in the declaration of sentiments, facts and opinions, which I am convinced, from the tenor and spirit of the resolutions you have just read, are at variance with those entertained by a great many present. But believing that we have all one object in view, and that controversy can never be disadvantageous to the interests of truth, I take the liberty of addressing you on the subject of this day's discussion.
The great question at issue, then, is, if I understand it right, which I admit I did not do until I heard the resolutions read, is, whether it is for the real interest of Canada (I mean Canada West) to make laws for the protection of her own manufacturing industry, by the imposition of what are generally termed protecting duties? To this question I answer that I do not think it is for the interest of Canada, or any other country, to protect particular interests—that it is detrimental to society, unjust and oppressive, injurious to production and commerce, and unworthy of the enlightened age in which we live. Before I proceed any farther I will here read over the resolution committed to my charge, and which I put to the meeting as an amendment on the resolution moved by Mr. Thompson, and seconded by Mr. Ridout. "That in the present state of the negotiations now pending between this country and the United States, on the subject of reciprocal Free Trade, it is unadvisable to petition the Imperial Government for protection in the home market, inasmuch as there is no probability of a successful issue to such an application, and as such a proceeding on our part may cause the defeat of those negotiations, the completion of which is so essential to the prosperity of the Province, and especially so to its agricultural interests."
Our attention has been drawn in very forcible language and eloquent terms, by the last speaker, to the great advantages we should derive from the admission into Great Britain of our products, at lower duties than those imposed on the admission of similar articles from foreign countries, and that it is most desirable, and that without delay, to petition the Imperial Parliament on the subject. With this opinion I certainly do not agree. I do not think it would be attended with success, and I fear that this petitioning the Imperial Parliament might endanger the passing of the reciprocity Bill now before the Senate of the United States—which I consider by far the most beneficial measure for Canada. It seems to me next to impossible that any importations from Canada should induce Great Britain to retrace her steps in that enlightened and beneficial course she has been pursuing for the last twenty-five years, in reducing year by year the burdens which bore with such oppressive severity on the people—and in removing all these unwise prohibitions, protections and restrictions which chained down her commerce and retarded her march on the road to prosperity. What claims have we upon her that she should thus place our commerce on a different footing from that of other nations—is it because we are a colony (a prodigal and expensive colony) this cannot, surely, be the rational ground for the prayer of our petition, for it is a fact that the total exports from Great Britain to all her colonies, in 1847 were £8,902,382, while the exports to the colonies alone of foreign nations amounted to £7,141,008. Her own colonies cost her four millions annually, while the claims of foreign states do not cost her six pence a year. She has given us full liberty, almost unsolicited—to buy all that we want from any nation, and requires no discriminating duties to be levied in favour of our importations from her, or her other colonies; or with what propriety, justice or humanity towards her teeming thousands, can we ask for the imposition of heavier duties on the products of the soil of foreign nations than on ours. They are better customers for her manufactures than we are. [Cheers.]
There are, however, Mr. Chairman, other and higher considerations than those adverted to, that would compel me to pause before I joined my voice with others in praying for the re-imposition of laws which have increased the cost of the necessaries of life to such a fearful extent as almost to place them beyond the reach of the poor; producing misery the most intense and general, destroying the health and strength of the labourer, making the widow's heart to mourn, and the fatherless to cry for bread, to save them from the pangs of a premature death. Do you, farmers, for it is to you I appeal; in your breasts still glows the warmest affections for your kindred and brethren of the same soil beyond the seas; do you desire Canada an agricultural prosperity, to be based on the ruin and misery of the finest labouring population on the face of the globe. [Cheers.] No, I am convinced from this expression of your feelings that you do not. The present Corn Laws in England were framed under the greatest excitement, and wrung from the Legislature by the united voice of the people—what cost so much to secure would not be easily surrendered—and certainly not to gratify the selfish rapacity of the protectionists of Canada. [Cheers.] It is said, however, that an equivalent is to be offered in exchange for the protection sought, and what is this equivalent, (O! publish it not in Gath, mention it not in the gates of Askelon,) why, that Canada will place discriminating duties in favour of British manufactures—and on goods coming from the United Kingdom by the St. Lawrence—and this, too, at a time when we are petitioning the United States Government to admit our products on the reciprocal terms—protectionists join heartily in this desirable advantage. Beautiful consistency, admirable legislation—wisdom most profound, excellent arithmeticians, asking what will you give an advantage for which you generously (tho' in ignorance) offer to reimpose burthens on yourselves that will be more than the equivalent gained. No, Mr. Chairman, this species of legislation is not fitted for that great and glorious country which has announced to the world that breath shall be united. [Cheers.] The plains of Indiana—the praries of America—the fertile regions of Poland and Germany, the inhabitants of the circling globe are invited to send their surplus treasures to her ports—there all is free—and, Mr. Chairman, you might as well attempt to arrest the sun in its course, as to stay the onward march of this enlightened policy.
I shall now proceed, Mr. Chairman, to lay down certain undeniable maxims and principles drawn from the writings and speeches of some of the most enlightened statesmen and writers of the present days, blending them with my own ideas on the subject. A great number of well informed persons even in the most intelligent countries are still strongly attached to the protective system, and conscientiously believe that the public interests may be materially promoted by absolutely prohibiting, or at least restricting the importation from abroad of such articles as may be produced at home. The wealth which is expended in purchase of foreign commodities seems as if it were so much taken from the means of supporting and employing our own countrymen. When an individual for example buys American made cloth, every one forthwith concludes that the demand for similar articles of home manufacture must be proportionably diminished, while few think of tracing the ultimate influence of the transaction. The supposed injury done to our artisan is the only thing that is seen or attended to by the majority of those who reason upon such topics who at least undertake to decide as to their policy. And it is not to be wondered at that those who proceed upon such narrow grounds, who throw half the circumstances of the case entirely out of view, should be vehemently opposed to what appears when thus partially considered to be productive only of disastrous results. In discussing the policy of restrictions in importation, it should be borne in mind that they cannot be of the smallest service to any one engaged in the production of those articles in which the country enacting the restriction has a superiority, or which may be produced as cheaply there as in other places—and as no one doubts that by far the largest proportion of employment in every country are in this predicament, that they are either carried on under some peculiar advantage of soil, climate, or superior skill, or are in these respects on a par with those carried on in other countries, and in either case, it is not possible that they should sustain the least ultimate injury from the unrestricted admission of foreign products. Restrictions intended to prevent, or fetter the importation of such articles would indeed be wholly inoperative. They are practically felt only when they affect products that cannot be raised at home, or that may be more cheaply imported from abroad.
It is obvious on the first blush of the matter, that a policy of this sort contradicts all the principles that regulate the conduct of every prudent individual in private life. No one thinks of performing every thing for himself, nor of making at home what it will cost him more to make than to buy. The tailor, Dr. Smith remarks, does not attempt to make his own shoes, but buys them from a shoemaker: the shoemaker on his part does not attempt to make his own clothes, but employs a tailor, and the farmer makes neither the one nor the other, but obtains them in exchange for corn or cattle. Each individual finds it for his advantage to employ himself in some particular business, and to exchange a part of his peculiar produce for such parts of the produce of others as he may have occasion for, and it is not very easy to see how that conduct, which is universally admitted to be wise and proper in individuals, should be foolish and absurd in the case of a state, that is of the total number of individuals inhabiting a certain tract of country. I am not aware that any one has gone so far as to contend, that the commerce carried on by different districts of the same country is disadvantageous to any of them; and yet it is not the mere freedom of dealing with each other, that leads to an intercourse between different places—it is because all parties are sensible that their interests are protected by it that it takes place—and when such is the fact, when it is the promotion of their own interests, and nothing else, that leads individuals to engage in commercial enterprise—what is there to fear from giving the same freedom to the intercourse with foreign countries, as to that between parts of the same country. Though the trade between Canada and the United States, or any other country, were as free as that between Toronto and Thornhill, there can be no question that it would continue as limited as at present, unless the Canadians as well as the Americans found it was for their advantage to extend their dealings.
But it is said that the only class whose advantage is attended to in such cases is that of the consumers, and that though they may be benefited by an unrestricted intercourse with foreigners—the producers may be deeply injured. There is, however, little ground for this distinction. Every individual is a consumer, and consumption is besides, the sole end and purpose of production. It follows, therefore, that the interests of the consumers and those of the community are identical. Whatever promotes them must, consequently, conduce to the public good, which should be the grand object of all legislation to advance. When a restriction is laid on the importation of any description of commodities previously brought from abroad, their price suddenly rises, and the home producer gets an advantage, but what they gain in this way is plainly at the expense of their fellow citizens, and is, besides, of trifling importance. For additional capital being drawn to the business, prices are very soon reduced to the level that barely affords the ordinary rate of profit. Now it is just possible that this level may be identical with that at which prices stood previously to the restriction; but the probability is, that it will be considerably higher. If the former should happen to be the case, little, though something, will have been lost, but nothing whatever will have been gained by the restriction. By ceasing to import from the foreigner, we must also cease exporting to him, for the exports are, in all cases, merely the equivalents of the imports. All, therefore, that will have been accomplished by this measure will be the transference of capital from one employment to another.
That equality of protection to which all individuals are justly entitled, will have been encroached upon: the increase of one business will have been brought about by the depression of some other that was equally advantageous: but no addition will have been made to the capital of the country, or to the facilities for employing that capital with security and advantage. But in the vast majority of cases, the price of an article imported from abroad is not the same after its importation is prohibited, but is permanently raised; for, if we could previously have produced it as cheaply as the foreigners, it would not have been imported. Instead of being obtainable, as before, for £1,000,000, the article will, henceforth cost, perhaps, £1,250,000 or £1,500,000. And it is obvious that the aritificial increase of price on the consumers of the article is precisely the same as if, supposing the trade to have continued free, a peculiar tax of £250,000 or £500,000 a year had been laid on them. But it will be observed, that had such a tax been imposed, its produce would have come into the hands of Government, and would have formed a portion of the national income. Whereas the increased cost of the article is, under the circumstances supposed, occasioned by an increased difficulty of production, and is, therefore, of no advantage to any one. It consequently results, that even in those rare cases in which a restrictive regulation has no tendency to raise prices, it is hurtful, by changing the natural distribution of capital, and licensing the foreign demand for the produce of industry to the same extent that it increases the home demand.
But in that incomparably more numerous class of cases, in which a restriction occasions a rise in the price of the article which it affects, it is infinitely more injurious. Besides, the mischief arising from varying the natural distribution of capital, and circumscribing the foreign trade of the country; such restriction has the effect of imposing a heavy burden on the people, for no purpose of general or public utility, but to produce a certain and grievous injury, by tempting individuals to withdraw from really advantageous businesses to engage in those that cannot be prosecuted without great national loss, and which must be abandoned the moment the prohibition ceases to be enforced. Whether the advantages which one country has over another be natural or acquired, is of no consequence—as long as the one country has those advantages, and the other wants them it will always be more advantageous for the latter nation to buy than to make. It is an acquired advantage only which an artificer has over his neighbour who exercises another trade and yet they both find it more advantageous to buy of one another than to make what does not belong to their particular trades. The business of government is to make the interests of the few submit to those of the many; nor is there either sense of humanity in inflicting an injury on the public, that a limited number of individuals may profit by a really disadvantageous business. Other selfishness may be as intense; but none is to so unblushing, because none is so tolerated, as that of a monopolist claiming a vested interest to a public injury. We may, by giving additional freedom to commerce, change the species of labour in demand, and make it be employed more profitably, but we cannot lessen its quantity. Should our imports this year amount to fifty thousand pounds more than they did last year, we shall it is certain have to pay them by exporting an equally increased amount of our peculiar products.
And, therefore if exporting be desirable, and the most ardent admirers of the restrictive system admit it to be such, importation must also be desirable, for the two are indissolubly connected; and to separate them, even in imagination, infers a total ignorance of the most obvious principles. Commerce, whether carried on between individuals of the same or of different countries, is founded on a fair principle of reciprocity; buying and selling are in it what action and re-action are in physics—equal and contrary. Those who will not buy from others, render it impossible for others to buy from them. Every sale implies an equal purchase, and every purchase an equal sale: hence to prohibit buying is exactly the same thing in effect as to prohibit selling. In whatever degree, therefore, an unrestricted trade might lead us to receive commodities from other countries, in the same degree eventually it would render them customers for our produce or commodities, would promote our manufacturers and extend our trade. To suppose that commerce may be too free is to suppose that labour may be turned into too productive channels—that the objects of demand may be too much multiplied, and that price may be too much reduced; it is like supposing that our agriculture may be too much improved, and our crops rendered too luxuriant. When importation from abroad is restricted that some new manufacture may be promoted, government assumes though perhaps unconsciously, that it knows better than its subjects what is the most profitable line for these to engage in. Never was there an assumption more entirely unfounded. Individuals are always on the alert to find out what are the most advantageous undertakings in which to embark; and though they sometimes err, no doubt form erroneous conclusions, the chances are ten to one in favour of their being right. Government may depend on the fact, that their subjects are incomparably better informed with respect to these matters than they can ever be. It is not possible for them to interfere, do what they will to encourage one set of producers, without at the same time and by the same act, proportionally discouraging some other set. Their obvious duty is, therefore, to abstain from all interference with the legitimate pursuits of individuals, and the only protection required at their hands is the protection of our persons and property from foreign aggression and from the injustice and oppression of our fellow subjects by establishing exact administration of justice. No equal capital puts into motion a greater quantity of productive labour, than that of the farmer—not only his labouring servants, but, his labouring cattle, are productive labourers. In agriculture nature labours along with man and though his labour spare no expense, the nature has its value, as well as that of the most expensive workmen.
The labourers and labouring classes, therefore, employed in agriculture, not only occasion, like the workman in manufactures, the reproduction of a value equal to their own consumption, or to the capital which supplies them, together with its owner's profits, but of a much greater ratio over and above all capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord. No equal quantity of productive labour employed in manufactures can ever occasion so great a reproduction. In them nature does nothing; man does all; and the reproduction must always be in proportion to the strength of the agents that occasion it. The capital employed in agriculture, therefore, not only puts into motion a greater quantity of productive labour than any equal capital employed in manufactures, but in proportion to the quantity of productive labour which it supplies, it adds a much greater value to the annual produce of the land and labour of the country, to the real wealth and revenue of its inhabitants. Of all the ways in which a revenue can be employed it is by far the most advantageous to society. The dearer manufactured goods are, the cheaper will be the produce of the soil; and whatever tends in any country to raise the price of manufactured goods are, the cheaper will be the produce of the soil; and whatever tends in any country to raise the price of manufactured produce, tends to lower that of the rude produce of the land, and thereby to discourage agriculture. The smaller the quantity of manufactured produce which any given quantity of rude produce, or what comes to the same thing, which the price of any given quantity of rude produce is capable of purchasing, the smaller the exchangeable value of that given quantity of rude produce—the smaller the encouragement which either the landlord has to increase its quantity by improving, or the farmer by cultivating the land.
Every system which endeavours either by extraordindary encouragements, to draw towards a peculiar species of industry a greater share of the capital of the country than what would naturally go to it; or by extraordinary restraints to force from some particular species of industry, some share of the capital which would otherwise be employed in it; are in reality subversive of the great purposes which it means to promote.
All systems, either of preferences or restraint, therefore, being thus taken away, the obvious and simple system of natural liberty establishes itself of its own accord.
Thomas's speech clearly outlines the reasoning behind free trade based on economics as it was understood at the time, citing the principles laid down by Adam Smith. Note his reference to Thornhill and Toronto, which gives a glimpse of Thomas's own history. In a similar vein, note his reference to "the fertile regions of Germany". Thomas's belief in free trade would continue to inform his thinking during the 1850s and beyond.
Footnotes
1"Speeches at the Late Free Trade Meeting", The Globe, February 21, 1849, p. 59.
