in his interests to these isles, as an industrial unit he may be far more closely identified with China, South America, or Russia. The severance between political and industrial interests seems everywhere to threaten political solidarity, and sets up two tendencies, Imperialism and Protection. Imperialism represents a more or less conscious and organised effort of a nation to expand its old political boundaries, and to take in by annexation other outside countries where its citizens have acquired strong industrial interests. Protection represents the converse tendency, an effort to prevent industrial interests from wandering outside the political limits of the nation, to keep capital and labour employed within the political area, confining extra-national relations to commerce within the narrower limits of the term. Modern Conservatism, concerned for the territorial integrity of national life, pursues both policies, expanding political control, contracting industrial life, in order to try and preserve the identity of the politics and the industry of its citizens. It represents the struggle of a deformed and belated nationalism against the growing spirit which everywhere is breaking through the old national limits and is laying the economic foundation for the coming internationalism.

This is the inner meaning of the new wave of Protectionism in England. Its adherents fear lest England's natural advantages of soil, climate, posi

tion, labour-power, and business-enterprise should not suffice in the turmoil of keen world-competition to keep enough industry upon our national or imperial soil. The traditional policy of game-preserving impels them to have recourse to similar methods of preserving trade within the ring-fence of the national or imperial dominions.

Along with this sentiment works an allied senti- . ment of self-sufficiency. It is not enough that Great Britain should keep a large volume of industry within her shores; she must defend herself against another implication of Free Trade, an excessive division of world-labour, which, by specialising the work of a nation, robs it of self-sufficiency. Even if Great Britain is strong enough to retain her fair share of world-industry, Free Trade, by confining British industry more and more to certain specific branches of manufacture and commerce, increases her dependence for the prime necessaries of national life upon the good-will and regular industry of other nations. When a nation depends for the supply of its daily bread upon the economic activity of other nations, its political independence is felt to be imperilled. Whatever be the advantage of international division of labour at ordinary times, it is felt that the national unit should, at any rate, not so far commit herself to specialised industry that she cannot, upon an emergency, resume the power to

supply herself with food and other necessaries of life from her own resources.

Protectionism, interpreted in the light of these apprehensions, is an endeavour to struggle against certain dangers inherent in the world-economy of Free Trade, and to keep within the territorial limits of the nation a sufficient volume and an adequate variety of industry.

Now the free trader has several answers to this line of argument. Admitting that it is theoretically possible for trade to shrink in volume within the national area, as a result of free world-competition, he will deny that Great Britain is in fact subjected to this process. An impregnable array of evidence can be adduced to prove that our industrial prosperity is waxing, and not waning; that the diminution of certain old industries is attended by a more than proportionate growth of new industries; that the more rapid recent development of such countries as Germany and the United States is on the whole a source of strength, not of weakness, to our powers of national production; that certain particular injuries inflicted by the rivalry of nations are more than compensated by the indirect benefits of a more effective international co-operation. Every increase of the productive power of Germany and the United States is a source of increased wealth to Great Britain, just in proportion as the growing volume of our commerce with these countries obliges them to

hand over to us, by ordinary processes of exchange, an increased quantity of their enhanced national wealth.

These commonplaces of the theory of free exchange are ignored by the fearful hosts of Protection.

As for the danger attributed to specialisation of industry which makes us dependent upon other nations for our food supply, the argument, so far as it carries any weight, relies on political rather than economic considerations. If there were any reason to expect a general conspiracy of foreign food-producing nations so blinded to their obvious self-interest as to establish a trade boycott against Great Britain, in such a case a policy of artificial stimulation of agriculture within the empire, though involving a great sacrifice of aggregate national wealth, would be defensible if it could be shown to be efficacious. But even here the Protectionist case collapses when from theory we resort to fact. For when we regard the amount of our dependence upon the United States and other foreign countries for our food and other necessaries of life, we shall perceive that we have gone too far in our international reliance for any such reversion to Imperial selfsufficiency to be efficacious. An endeavour to stimulate by artificial means the development of British and Imperial agriculture for purposes of self-support, while it would cost us dear, could not succeed within any reasonable time in securing us against the

necessity of buying food from those foreign nations whom we are called upon to distrust. We should merely offend them without securing our economic independence. The politics of such a course would be even worse than its economics.

§14. But the deepest defect of the new Protectionism lies in its utter inadequacy to achieve its end. For if that end is to secure the retention of a sufficient volume and variety of industry and of industrial population within the territorial limits of the kingdom or the empire, the sort of protection which is now proposed will be quite incompetent to compass it.

This can easily be seen. The result of the specialisation of national industry under Free Trade (however imperfect or "one-sided ") is to enhance the productivity of the capital and labour engaged in it. An artificial restriction of this process of specialisation must therefore be attended by a diminution of the general productivity of capital and labour. The instructed Protectionist will hardly question this. Either he will admit a reduction of aggregate national wealth, defending it on the ground of greater variety and increased selfsufficiency; or he will assert that a larger employment of capital and labour will enable the same quantity of wealth to be produced as before. It matters not which line of argument is taken, the fact remains that the result of Protection will be a