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about¡£
¡¡¡¡¡¡¡¡It¡¡seeks¡¡to¡¡adduce¡¡the¡¡benefits¡¡which¡¡result¡¡from¡¡free¡¡internal
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whereas¡¡history¡¡everywhere¡¡proves¡¡the¡¡contrary¡£
¡¡¡¡¡¡¡¡It¡¡maintains¡¡that¡¡protective¡¡measures¡¡afford¡¡a¡¡monopoly¡¡to
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compared¡¡to¡¡which¡¡the¡¡sacrifices¡¡which¡¡the¡¡former¡¡has¡¡to¡¡make¡¡to
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customs¡¡establishments£»¡¡and¡¡with¡¡wisely¡¡devised¡¡tariffs£»¡¡the
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¡¡¡¡¡¡¡¡So¡¡far¡¡as¡¡regards¡¡the¡¡mere¡¡expenses¡¡of¡¡the¡¡customs¡¡system£»¡¡a
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¡¡¡¡¡¡¡¡Moreover£»¡¡the¡¡school¡¡itself¡¡does¡¡not¡¡condemn¡¡all¡¡protective
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¡¡¡¡¡¡¡¡Adam¡¡Smith¡¡allows¡¡in¡¡three¡¡cases¡¡the¡¡special¡¡protection¡¡of
internal¡¡industry£º¡¡firstly£»¡¡as¡¡a¡¡measure¡¡of¡¡retaliation¡¡in¡¡case¡¡a
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those¡¡manufacturing¡¡requirements¡¡which¡¡are¡¡necessary¡¡for¡¡defensive
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foreigners¡¡are¡¡taxed¡¡lower¡¡than¡¡those¡¡of¡¡our¡¡home¡¡producers¡£¡¡J¡£¡¡B¡£
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then¡¡no¡¡longer¡¡need¡¡protection¡£
¡¡¡¡¡¡¡¡Thus¡¡it¡¡is¡¡Adam¡¡Smith¡¡who¡¡wants¡¡to¡¡introduce¡¡the¡¡principle¡¡of
retaliation¡¡into¡¡commercial¡¡policy¡¡¡¡a¡¡principle¡¡which¡¡would¡¡lead
to¡¡the¡¡most¡¡absurd¡¡and¡¡most¡¡ruinous¡¡measures£»¡¡especially¡¡if¡¡the
retaliatory¡¡duties£»¡¡as¡¡Smith¡¡demands£»¡¡are¡¡to¡¡be¡¡repealed¡¡as¡¡soon¡¡as
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artificially¡¡into¡¡existence¡¡a¡¡manufacturing¡¡power¡¡of¡¡her¡¡own£»¡¡must
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prohibitions£»¡¡instead¡¡of¡¡stimulating¡¡its¡¡growth¡£
¡¡¡¡¡¡¡¡The¡¡principle¡¡of¡¡retaliation¡¡is¡¡reasonable¡¡and¡¡applicable¡¡only
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all¡¡times¡£
¡¡¡¡¡¡¡¡By¡¡the¡¡second¡¡exception£»¡¡Adam¡¡Smith¡¡really¡¡justifies¡¡not¡¡merely
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immediate¡¡requirements¡¡of¡¡war£»¡¡such¡¡as£»¡¡for¡¡instance£»¡¡manufactories
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manufacturing¡¡arms¡¡and¡¡powder¡£
¡¡¡¡¡¡¡¡The¡¡same¡¡must¡¡be¡¡said¡¡of¡¡Adam¡¡Smith's¡¡third¡¡exception¡£¡¡If¡¡the
burden¡¡of¡¡taxation¡¡to¡¡which¡¡our¡¡productions¡¡are¡¡subjected£»¡¡affords
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comparison¡¡with¡¡that¡¡of¡¡the¡¡foreigner¡¡afford¡¡just¡¡grounds¡¡for
protecting¡¡our¡¡native¡¡industry¡¡against¡¡the¡¡overwhelming¡¡competition
of¡¡foreign¡¡industry£¿
¡¡¡¡¡¡¡¡J¡£¡¡B¡£¡¡Say¡¡has¡¡clearly¡¡perceived¡¡the¡¡contradictory¡¡character¡¡of
this¡¡exception£»¡¡but¡¡the¡¡exception¡¡substituted¡¡by¡¡him¡¡is¡¡no¡¡better£»
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¡¡¡¡¡¡¡¡In¡¡its¡¡eternal¡¡declamations¡¡on¡¡the¡¡immense¡¡advantages¡¡of
absolute¡¡freedom¡¡of¡¡trade£»¡¡and¡¡the¡¡disadvantages¡¡of¡¡protection£»¡¡the
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prosper¡¡without¡¡protective¡¡duties£»¡¡and¡¡that¡¡absolute¡¡liberty¡¡of
international¡¡commerce¡¡forms¡¡the¡¡safest¡¡basis¡¡of¡¡national
prosperity¡£¡¡The¡¡fate¡¡of¡¡Spain¡¡is¡¡quoted¡¡to¡¡exhibit¡¡to¡¡all¡¡nations
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frightful¡¡example¡¡of¡¡its¡¡ruinous¡¡effects¡£¡¡The¡¡case¡¡of¡¡England£»
which£»¡¡as¡¡we¡¡have¡¡shown¡¡in¡¡a¡¡former¡¡chapter£»¡¡affords¡¡such¡¡an
excellent¡¡example¡¡for¡¡imitation¡¡to¡¡all¡¡nations¡¡which¡¡are¡¡capable¡¡of
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and¡¡that¡¡nature¡¡has¡¡bestowed¡¡on¡¡England£»¡¡above¡¡all¡¡other¡¡countries
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¡¡¡¡¡¡¡¡Let¡¡us¡¡now¡¡take¡¡these¡¡examples¡¡more¡¡closely¡¡into¡¡consideration¡£
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magnitude¡¡which¡¡can¡¡be¡¡ranked¡¡as¡¡a¡¡great¡¡nation£»¡¡but¡¡is¡¡merely¡¡a
conglomeration¡¡of¡¡municipalities¡£¡¡Possessing¡¡no¡¡sea¡coast£»¡¡hemmed
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to¡¡obtain¡¡a¡¡native¡¡commercial¡¡marine£»¡¡or¡¡direct¡¡trade¡¡with¡¡tropical
countries£»¡¡she¡¡need¡¡pay¡¡no¡¡regard¡¡to¡¡the¡¡establishment¡¡of¡¡a¡¡naval
power£»¡¡or¡¡to¡¡founding¡¡or¡¡acquiring¡¡colonies¡£¡¡Switzerland¡¡laid¡¡the
foundation¡¡of¡¡her¡¡present¡¡very¡¡moderate¡¡degree¡¡of¡¡prosperity¡¡at¡¡the
time¡¡when¡¡she¡¡still¡¡belonged¡¡to¡¡the¡¡German¡¡Empire¡£¡¡Since¡¡that¡¡time£»
she¡¡has¡¡been¡¡almost¡¡entirely¡¡free¡¡from¡¡internal¡¡wars£»¡¡her¡¡capital
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scarcely¡¡any¡¡of¡¡it¡¡was¡¡required¡¡by¡¡her¡¡municipal¡¡governments¡¡for
discharging¡¡their¡¡expenses¡£¡¡Amid¡¡the¡¡devastations¡¡occasioned¡¡by¡¡the
despotism£»¡¡fanaticism£»¡¡wars£»¡¡and¡¡revolutions£»¡¡with¡¡which¡¡Europe¡¡was
perturbed¡¡during¡¡the¡¡last¡¡centuries£»¡¡Switzerland¡¡offered¡¡an¡¡asylum
to¡¡all¡¡who¡¡desired¡¡to¡¡transfer¡¡their¡¡capital¡¡and¡¡talents¡¡to¡¡another
country¡¡than¡¡their¡¡own£»¡¡and¡¡thus¡¡acquired¡¡considerable¡¡wealth¡¡from
abroad¡£¡¡Germany¡¡has¡¡never¡¡adopted¡¡strong¡¡commercial¡¡restrictions
against¡¡Switzerland£»¡¡and¡¡a¡¡large¡¡part¡¡of¡¡the¡¡manufactured¡¡products
of¡¡the¡¡latter¡¡has¡¡obtained¡¡a¡¡market¡¡in¡¡Germany¡£¡¡Moreover£»¡¡the
industry¡¡of¡¡Switzerland¡¡was¡¡never¡¡a¡¡national¡¡one£»¡¡one¡¡comprising
the¡¡production¡¡of¡¡articles¡¡of¡¡common¡¡use£»¡¡but¡¡chiefly¡¡an¡¡industry
in¡¡articles¡¡of¡¡luxury£»¡¡the¡¡products¡¡of¡¡which¡¡could¡¡be¡¡easily
smuggled¡¡into¡¡the¡¡neighbouring¡¡countries¡¡or¡¡transported¡¡to¡¡distant
parts¡¡of¡¡the¡¡world¡£¡¡Furthermore£»¡¡her¡¡territory¡¡is¡¡most¡¡favourably
situated¡¡for¡¡intermediate¡¡trade£»¡¡and¡¡in¡¡this¡¡respect¡¡is¡¡in¡¡some
measure¡¡privileged¡£¡¡Again£»¡¡their¡¡excellent¡¡opportunity¡¡of¡¡becoming
acquainted¡¡with¡¡the¡¡languages£»¡¡laws£»¡¡institutions£»¡¡and
circumstances¡¡of¡¡the¡¡t