diminished productivity of capital and labour per unit. This must be attended by a general shrinkage in the rate of profits and of wages, a process accelerated by the fact that rent of land will take a larger share of the total diminished national income. Now, if profits and wages fall, both capital and labour will tend to seek employment outside the protected area, in foreign lands; the fact that protective systems prevail in these foreign lands, not being a new factor in the situation, is immaterial. So, even if it be argued that an increased volume of employment of capital and labour might directly ensue from a protective tariff, that capital and labour, obtaining a lower rate of real remuneration, will not stay within the protected national area, but will tend to seek the more remunerative outside employment. This theory is supported by innumerable concrete evidences.

Protection, by lowering the average productiveness of capital and labour, tends to expel them from the protected area. Capital, more fluid, leaves more easily and quickly; labour lags, and a grave condition of "unemployment" embarrasses the situation; eventually labour too migrates in order to co-operate with its necessary economic adjunct. Can Protection stop this process of migration which plainly defeats its end by exasperating the very disease it is designed to cure? Yes, provided it is sufficiently thorough. Protection, to be effective, must not stand upon the feeble expedients of preferential or even prohibitive

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tariffs aimed against the import of foreign goods. It must support this barrier by a second barrier, prohibiting the export of British capital and British labour. The more rigorous Protection of the seventeenth and eighteenth centuries took what steps in this direction were then necessary, by restriction or prohibition of the export of machinery and skilled labour. More rigorous protective measures would now be needed. For the fluidity of the monetary investments in foreign lands was then a négligeable factor: whereas it is the factor of first significance in modern world industry. In order then for our new Protectionists to gain their object of setting back the tide of industrial internationalism, so as to achieve the economic solidarity and self-sufficiency of the British Empire, they must devise means of preventing fluid capital and labour from leaving the country. Unless they see their way to carry Protection thus far, they will behold their policy of protective and retaliatory tariffs reduced to nullity by the free play of the enlightened self-interest of capital and labour seeking elsewhere the employment now rendered unprofitable within the British Empire.

Nothing short of this protective policy of "thorough," making for the well-nigh complete economic isolation of our empire, by a virtual prohibition, not only of imports but of exports, can avail to safeguard the nation against the imaginary perils of a free-trade economy which is only the

industrial aspect of the slowly growing internationalism with which lies the future of civilisation.

§ 15. Protectionism, thus interpreted, is the expression of a spurious patriotism seeking to confine industry within a national or imperial area, so as to defend the nation, or the empire, against what it regards as the disintegrating influences of commercial internationalism.

Now this patriotism is doubly false as expressed in that form of preferential Protectionism now before our country. In the first place, if carried into effect, it would injure our national life by narrowing the stream of intercourse with other nations, upon which in the future, as in the past, the growth and enrichment of our nationality depend. It is no better for a nation than for a man to live alone, and the economic self-sufficiency at which Protection aims, could it be achieved, would deprive our national industry and our national life of those new supplies of foreign stock and stimuli which have played so large a part in building the very industries which we have come to regard as characteristically British. The greatness of English manufacture and commerce is so demonstrably due to the free receptivity of England; so many of her industries are the direct product of Flemish, Italian, French and German skill and invention, drawn into our country by our industrial and political practice of the open door, that any stoppage of this liberty of foreign access, such as

must attend any substantial measure of Protectionism, would inflict the gravest damage upon a main source of our national industrial growth. Even more detrimental would be the diminution of all forms of higher intercourse which this lessening of commercial intercourse must involve. Ideas always follow trade routes, and a limitation of international trade will restrict the free flow of ideas and feelings between Great Britain and foreign nations, and will throw us more and more upon the restricted intellectual resources of our empire. It is not extravagant to suggest that we have more to learn from France, Germany, and America than from Australasia and South Africa; and that if it were a case of making immediate economic sacrifices, it would pay us better as a nation in the long run to maintain a free expansive intercourse with foreign civilised nations than to cultivate a process of narrow, intellectual inbreeding within the British Empire. As matters stand, our immediate economic interests are so plainly identical with the wider, higher interests of our national civilisation that the proposed change of commercial policy would inflict a double blow upon our national life.

§ 16. Protectionism, then, thus regarded is a disinterested but mistaken form of patriotism. But this disinterested popular spirit is directed by more definitely economic interests which utilise it for their defence and profit. Protection, like Imperial Expan

sion, is of double service to the vested interests. On the one hand, just as Imperial Expansion ripens and improves their private foreign investments at the public expense and furnishes through the rising national expenditure a profitable market for their goods and services, so Protection enables them at once to increase their rents and profits at the expense of the main body of producers and consumers and to consolidate their capitalist structure so as better to repress competition and control their market. On the other hand, Protection, like Imperial Expansion, by rousing feelings of antagonism against foreign nations, and representing the commercial co-operation of the industrial world as a rivalry of nations in the struggle for a limited amount of market, succeeds in diverting into external channels the stream of reform energy which surges up in the life of nations.

Protection, like Imperialism, is a class policy, instinctively devised in order to break and divide, and so to render impotent, the blind, ill-directed forces of social reform which are groping after the establishment of a juster economic order that will secure a more equitable distribution of wealth by an equalisation of economic opportunities. Such an analysis does not impute base motives, as may at first sight appear. Of the driving forces in history but a very small proportion enter the restricted area of clear consciousness and are fully recognised as motives. But when we analyse the actual path