Constructive Imperialism by Viscount Milner
V >>
Viscount Milner >> Constructive Imperialism
[Transcriber's Note: Two advertisements from the beginning of the book
have been moved to the end.]
* * * * *
CONSTRUCTIVE
IMPERIALISM
BY
VISCOUNT MILNER, G.C.B.
FIVE SPEECHES
DELIVERED AT
TUNBRIDGE WELLS (OCTOBER 24, 1907)
GUILDFORD (OCTOBER 29, 1907)
EDINBURGH (NOVEMBER 15, 1907)
RUGBY (NOVEMBER 19, 1907)
AND OXFORD (DECEMBER 5, 1907)
LONDON
THE NATIONAL REVIEW OFFICE
23 RYDER STREET, ST. JAMES'S
1908
* * * * *
CONTENTS
PAGE
TARIFF REFORM (TUNBRIDGE WELLS) 7
A CONSTRUCTIVE POLICY (GUILDFORD) 34
UNIONISTS AND THE EMPIRE (EDINBURGH) 50
UNIONISTS AND SOCIAL REFORM (RUGBY) 69
SWEATED INDUSTRIES (OXFORD) 88
* * * * *
TARIFF REFORM
Tunbridge Wells, October 24, 1907
As this is a Tariff Reform meeting pure and simple, I am anxious not
to approach the subject in any party spirit or in any spirit of
acrimonious controversy. The question is a difficult and complicated
one, and though I am a strong Tariff Reformer myself I hope I am not
incapable of seeing both sides of the case. I certainly should have
reason to be ashamed if I could not be fair to those whom, for the
sake of brevity and convenience, I will call Free Traders, though I do
not altogether admit the correctness of that designation. My views
were once the same as theirs, and though I long ago felt constrained
to modify them, and had become a Tariff Reformer some years before the
subject attained its present prominence in public discussion, it would
ill become me to treat as foolish arguments which I once found so
convincing or to vilify opinions which I once honestly shared.
What has happened to me is what I expect has happened to a good many
people. I still admire the great Free Trade writers, the force of
their intellect, the lucidity of their arguments. There can be no
clearer proof of the spell which they exercised over the minds of
their countrymen than the fact that so many leading public men on both
sides of politics remain their disciples to this very day. But for my
own part I have been unable to resist the evidence of facts which
shows me clearly that in the actual world of trade and industry things
do not work out even approximately as they ought to work out if the
Free Trade theory were the counsel of perfection which I once thought
it. And that has led me to question the theory itself, and so
questioned it now seems to me far from a correct statement of the
truth, even from the point of view of abstract inquiry. But I am not
here to engage in abstract arguments. What I want to do is to look at
the question from a strictly practical point of view, but at the same
time a very broad one. I am anxious to bring home to you the place of
Tariff Reform in a sound national policy, for, indeed, it seems to me
very difficult to construct such a policy without a complete revision
of our fiscal arrangements. Now a sound national policy has two
aspects. There are two great objects of practical patriotism, two
heads under which you may sum it up, much as the Church Catechism sums
up practical religion, under the heads of "duty to God" and "duty to
your neighbour." These objects are the strength of the Empire, and the
health, the well-being, the contentedness of the mass of the people,
resting as they always must on steady, properly organised, and fairly
remunerated labour. Remember always, these two things are one; they
are inseparable. There can be no adequate prosperity for the forty or
fifty million people in these islands without the Empire and all that
it provides; there can be no enduring Empire without a healthy,
thriving, manly people at the centre. Stunted, overcrowded town
populations, irregular employment, sweated industries, these things
are as detestable to true Imperialism as they are to philanthropy,
and they are detestable to the Tariff Reformer. His aim is to improve
the condition of the people at home, and to improve it concurrently
with strengthening the foundations of the Empire. Mind you, I do not
say that Tariff Reform alone is going to do all this. I make no such
preposterous claim for it. What I do say is that it fits in better
alike with a policy of social reform at home and with a policy
directed to the consolidation of the Empire than our existing fiscal
system does.
Now, what is the essential difference between Tariff Reformers and the
advocates of the present system? I must dwell on this even at the risk
of appearing tiresome, because there is so much misunderstanding on
the subject. In the eyes of the advocates of the present system, the
statesman, or at any rate the British statesman, when he approaches
fiscal policy, is confronted with the choice of Hercules. He is
placed, like the rider in the old legend, between the black and the
white horseman. On the one hand is an angel of light called Free
Trade; on the other a limb of Satan called Protection. The one is
entirely and always right; the other is entirely and always wrong.
All fiscal wisdom is summed up in clinging desperately to the one and
eschewing like sin anything that has the slightest flavour of the
other. Now, that view has certainly the merit of simplicity, and
simplicity is a very great thing; but, if we look at history, it does
not seem quite to bear out this simple view. This country became one
of the greatest and wealthiest in the world under a system of rigid
Protection. It has enjoyed great, though by no means unbroken,
prosperity under Free Trade. Side by side with that system of ours
other countries have prospered even more under quite different
systems. These facts alone are sufficient to justify the critical
spirit, which is the spirit of the Tariff Reformer. He does not
believe in any absolute right or wrong in such a matter as the
imposition of duties upon imports. Such duties cannot, he thinks, be
judged by one single test, namely, whether they do or do not favour
the home producer, and be condemned out of hand if they do favour him.
The Tariff Reformer rejects this single cast-iron principle. He
refuses to bow down before it, regardless of changing circumstances,
regardless of the policy of other countries and of that of the other
Dominions of the Crown. He wants a free hand in dealing with imports,
the power to adapt the fiscal policy of this country to the varying
conditions of trade and to the situation created at any given time by
the fiscal action of others. He has no superstitious objection to
using duties either to increase employment at home or to secure
markets abroad. But on the other hand he does not go blindly for
duties upon foreign imports as so-called Free Traders go blindly
against them, except in the case of articles not produced in this
country, some of which the Free Traders are obliged to tax
preposterously. Tariff Reform is not one-ideaed, rigid, inelastic, as
our existing system is. Many people are afraid of it, because they
think Tariff Reformers want to put duties on foreign goods for the fun
of the thing, merely for the sake of making them dearer. Certainly
Tariff Reformers do not think that cheapness is everything. Certainly
they hold that the blind worship of immediate cheapness may cost the
nation dear in the long run. But, unless cheapness is due to some
mischievous cause, they are just as anxious that we should buy cheaply
as the most ardent Cobdenite, and especially that we should buy
cheaply what we cannot produce ourselves. Talking of cheapness,
however, I must make a confession which I hope will not be
misunderstood by ladies present who are fond of shopping--I wish we
could get out of the way of discussing national economics so much from
the shopping point of view. Surely what matters, from the point of
view of the general well-being, is the productive capacity of the
people, and the actual amount of their production of articles of
necessity, use, or beauty. Everything we consume might be cheaper, and
yet if the total amount of things which were ours to consume was less
we should be not richer but poorer. It is, I think, one of the first
duties of Tariff Reformers to keep people's eyes fixed upon this vital
point--the amount of our national production. It is that which
constitutes the real income of the nation, on which wages and profits
alike depend.
And that brings me to another point. Production in this country is
dependent on importation, more dependent than in most countries. We
are not self-supplying. We must import from outside these islands vast
quantities of raw materials and of the necessaries of life. That, at
least, is common ground between the Free Trader and the Tariff
Reformer. But the lessons they draw from the fact are somewhat
different. The Free Trader is only anxious that we should buy all
these necessary imports as cheaply as possible. The Tariff Reformer is
also anxious that we should buy them cheaply, but he is even more
anxious to know how we are going to pay for all this vast quantity of
things which we are bound to import. And that leads him to two
conclusions. The first is that, seeing how much we are obliged to buy
from abroad in any case, he looks rather askance at our increasing our
indebtedness by buying things which we could quite easily produce at
home, especially with so many unemployed and half-employed people. The
other, and this is even a more pressing solicitude to him, is that it
is of vital importance to us to look after our external markets, to
make sure that we shall always have customers, and good customers, to
buy our goods, and so to enable us to pay for our indispensable
imports. The Free Trader does not share this solicitude. He has got a
comfortable theory that if you only look after your imports your
exports will look after themselves. Will they? The Tariff Reformer
does not agree with that at all. Imports no doubt are paid for by
exports, but it does not in the least follow that by increasing your
dependence on others you will necessarily increase their dependence on
you. It would be much truer to say: "Look after the exports and the
imports will look after themselves." The more you sell the more you
will be able to buy, but it does not in the least follow that the more
you buy the more you will be able to sell. What business man would go
on the principle of buying as much as possible and say: "Oh, that is
all right. I am sure to be able to sell enough to pay for it." The
first thought of a wise business man is for his markets, and you as a
great trading nation are bound to think of your markets, not only your
markets of to-day but of to-morrow and the day after to-morrow.
The Free Trade theory was the birth of a time when our imports were
practically all supplemental to our exports, all indispensable to us,
and when, on the other hand, the whole of the world was in need of our
goods, far beyond our power of supplying it. Since then the situation
has wholly altered. At this actual moment, it is true, there is
temporarily a state of things which in one respect reproduces the
situation of fifty years ago. There is for the moment an almost
unlimited demand for some of our goods abroad. But that is not the
normal situation. The normal situation is that there is an increasing
invasion of our markets by goods from abroad which we used to produce
ourselves, and an increasing tendency to exclude our goods from
foreign markets. The Tariff Reform movement is the inevitable result
of these altered circumstances. There is nothing artificial about it.
It is not, as some people think, the work of a single man, however
much it may owe to his genius and his courage, however much it may
suffer, with other good causes, through his enforced retirement from
the field. It is not an eccentric idea of Mr. Chamberlain's. Sooner or
later it was bound to come in any case. It is the common sense and
experience of the people waking up to the altered state of affairs,
beginning to shake itself free from a theory which no longer fits the
facts. It is a movement of emancipation, a twofold struggle for
freedom--in the sphere of economic theory, for freedom of thought, in
the sphere of fiscal policy, for freedom of action.
And that freedom of action is needed quickly. It is needed now. I am
not doubtful of the ultimate triumph of Tariff Reform. Sooner or
later, I believe, it is sure to achieve general recognition. What does
distress me is the thought of the opportunities we are losing in the
meantime. This year has been marked, disastrously marked, in our
annals by the emphatic and deliberate rejection on the part of our
Government of the great principle of Preferential Trade within the
Empire. All the other self-governing States are in favour of it. The
United Kingdom alone blocks the way. What does that mean? What is it
that we risk losing as long as we refuse to accept the principle of
Preferential Trade, and will certainly lose in the long run if we
persist in that refusal? It is a position of permanent and assured
advantage in some of the greatest and most growing markets in the
world. Preference to British goods in the British dominions beyond the
sea would be a constant and potent influence tending to induce the
people of those countries to buy what they require to buy outside
their own borders from us rather than from our rivals. It means beyond
all doubt and question so much more work for British hands. And the
people of those countries are anxious that British hands should get
it. They have, if I may so express myself, a family feeling, which
makes them wish to keep the business within the family. But business
is business. They are willing to give us the first chance. But if we
will give nothing in return, if we tell them to mind their own
business and not to bother us with offers of mutual concessions, it is
only a question of time, and the same chance will be given to others,
who will not refuse to avail themselves of it.
You see the beginning of the process already in such an event as the
newly-concluded commercial treaty between Canada and France. If we
choose, it is still possible for us not only to secure the preference
we have in Colonial markets, but to increase it. But if we do nothing,
commercial arrangements with other nations who are more far-sighted
will gradually whittle that preference away. To my mind the action of
Canada in the matter of that treaty, perfectly legitimate and natural
though it be, is much more ominous and full of warning to us than the
new Australian Tariff, about which such an unjustifiable outcry has
been made. Rates of duty can be lowered as easily as they can be
raised, but the principle of preference once abandoned would be very
difficult to revive. I am sorry that the Australians have found it
necessary in their own interests to raise their duties, but I would
rather see any of the British Dominions raise its duties and still
give a preference to British goods than lower its duties and take away
that preference. Whatever duties may be imposed by Canada, Australia,
or the other British Dominions, they will still remain great
importers, and with the vast expansion in front of them their imports
are bound to increase. They will still be excellent customers, and the
point is that they should be our customers.
In the case of Australia the actual extent of the preference accorded
to British goods under the new tariff is not, as has been represented,
of small value to us. It is of considerable value. But what is of far
more importance is the fact that Australia continues to adhere to the
principle of Preference. Moreover, Australia, following the example of
Canada, has established an extensive free list for the benefit of this
country. Let nobody say after this that Australia shows no family
feeling. I for one am grateful to Australia, and I am grateful to that
great Australian statesman, Mr. Deakin, for the way in which, in the
teeth of discouragement from us, he has still persisted in making the
principle of preferential trade within the Empire an essential feature
of the Australian Tariff.
Preference is vital to the future growth of British trade, but it is
not only trade which is affected by it. The idea which lies at the
root of it is that the scattered communities, which all own
allegiance to the British Crown, should regard and treat one another
not as strangers but as kinsmen, that, while each thinks first of its
own interests, it should think next of the interests of the family,
and of the rest of the world only after the family. That idea is the
very corner-stone of Imperial unity. To my mind any weakening of that
idea, any practical departure from it, would be an incalculable loss
to all of us. I should regard a readjustment of our own Customs duties
with the object of maintaining that idea, even if such readjustment
were of some immediate expense to ourselves, as I hope to show you
that it would not be, as a most trifling and inconsiderable price to
pay for a prize of infinite value. I am the last man to contend that
preferential trade alone is a sufficient bond of Empire. But I do
contend that the maintenance or creation of other bonds becomes very
difficult, if in the vitally important sphere of commerce we are to
make no distinction between our fellow-citizens across the seas and
foreigners. Closer trade relations involve closer relations in all
other respects. An advantage, even a slight advantage, to Colonial
imports in the great British market would tend to the development of
the Colonies as compared with the foreign nations who compete with
them. But the development of the British communities across the seas
is of more value to us than an equivalent development of foreign
countries. It is of more value to our trade, for, if there is one
thing absolutely indisputable, it is that these communities buy ever
so much more of us per head than foreign nations do. But it is not
only a question of trade; it is a question of the future of our
people. By encouraging the development of the British Dominions beyond
the seas we direct emigration to them in preference to foreign lands.
We keep our people under the flag instead of scattering them all over
the world. We multiply not merely our best customers but our fellow
citizens, our only sure and constant friends.
And now is there nothing we can do to help forward this great object?
Is it really the case, as the Free Traders contend, that in order to
meet the advances of the other British States and to give, as the
saying is, Preference for Preference, we should be obliged to make
excessive sacrifices, and to place intolerable burdens on the people
of this country? I believe that this is an absolute delusion. I
believe that, if only we could shake off the fetters of a narrow and
pedantic theory, and freely reshape our own system of import duties on
principles of obvious common sense, we should be able at one and the
same time to promote trade within the Empire, to strengthen our hands
in commercial negotiations with foreign countries, and to render tardy
justice to our home industries.
The Free Trader goes on the principle of placing duties on a very few
articles only, articles, generally, of universal consumption, and of
making those duties very high ones. Moreover, with the exception of
alcohol, these articles are all things which we cannot produce
ourselves. I do not say that the system has not some merits. It is
easy to work, and the cost of collection is moderate. But it has also
great defects. The system is inelastic, for the duties being so few
and so heavy it is difficult to raise them in case of emergency
without checking consumption. Moreover, the burden of the duties
falls entirely on the people of this country, for the foreign
importer, except in the case of alcoholic liquors, has no home
producer to compete with, and so he simply adds the whole of the duty
to the price of the article. Last, but not least, the burden is
inequitably distributed. It would be infinitely fairer, as between
different classes of consumers, to put a moderate duty on a large
number of articles than to put an enormous duty on two or three. But
from that fairer and more reasonable system we are at present debarred
by our pedantic adhesion to the rule that no duty may be put on
imported articles unless an equivalent duty is put on articles of the
same kind produced at home. Why, you may well ask, should we be bound
by any such rule? I will tell you. It is because, unless we imposed
such an equivalent duty, we should be favouring the British producer,
and because under our present system every other consideration has got
to give way to this supreme law, the "categorical imperative" of the
Free Trader, that we must not do anything which could by any
possibility in the remotest degree benefit the British producer in
his competition with the foreigner in our home market. It is from the
obsession of this doctrine that the Tariff Reformer wishes to liberate
our fiscal policy. He approaches this question free from any doctrinal
prepossessions whatever. Granted that a certain number of millions
have to be raised by Customs duties, he sees before him some five to
six hundred millions of foreign imports on which to raise them, and so
his first and very natural reflection is, that by distributing duties
pretty equally over this vast mass of imported commodities he could
raise a very large revenue without greatly enhancing the price of
anything. Our present system throws away, so to speak, the advantage
of our vast and varied importation by electing to place the burden of
duties entirely on very few articles. As against this system the
Tariff Reformer favours the principle of a widespread tariff, of
making all foreign imports pay, but pay moderately, and he holds that
it is no more than justice to the British producer that all articles
brought to the British market should contribute to the cost of
keeping it up. It is no answer to say that it is the British consumer
who would pay the duty, for even if this were invariably true, which
it is not, it leaves unaffected the question of fair play between the
British producer and the foreign producer. The price of the home-made
article is enhanced by the taxes which fall upon the home makers, and
which are largely devoted to keeping up our great open market, but the
price of the foreign article is not so enhanced, though it has the
full benefit of the open market all the same. Moreover, the price of
the home-made article is also enhanced by the many restrictions which
we place, and rightly place, on home manufacture in the interests of
the workers--restrictions as to hours, methods of working, sanitary
conditions, and so forth--all excellent, all laudable, but expensive,
and from which the foreign maker is often absolutely, and always
comparatively, free. The Tariff Reformer is all for the open market,
but he is for fair play as between those who compete in it, and he
holds that even cheapness ought not to be sought at the expense of
unfairness to the British producer.
I say, then, that the Tariff Reformer starts with the idea of a
moderate all-round tariff. But he is not going to ride his principle
to death. He is essentially practical. There are some existing duties,
like those on alcoholic liquors, the high rate of which is justified
for other than fiscal reasons. He sees no reason to lower these
duties. On the other hand, there are some articles, such as raw
cotton, which compete with no British produce, and even a slight
enhancement of the price of which might materially injure our export
trade. The Tariff Reformer would place these on a free list, for he
feels that, however strong may be the argument for moderate all-round
duties as a guiding rule, it is necessary to admit exceptions even to
the best of rules, and it is part of his creed that we are bound to
study the actual effect of particular duties both upon ourselves and
upon others. No doubt that means hard work, an intimate acquaintance
with the details of our industry and trade, an eye upon the
proceedings of foreign countries. A modern tariff, if it is to be
really suitable to the requirements of the nation adopting it, must be
the work of experts. But is that any argument against it? Are we less
competent to make a thorough study of these questions than other
people, as for instance the Germans, or are we too lazy? Free Traders
make fun of a scientific tariff, but why should science be excluded
from the domain of fiscal policy, especially when the necessity of it
is so vigorously and so justly impressed upon us in every other field?
It is not only the War Office which has got to get rid of antiquated
prejudices and to open its eyes to what is going on in the world. Our
financial departments might reasonably be asked to do the same, and
they are quite equally capable, and I have no doubt equally willing,
to respond to such an appeal, instead of leaving the most thorough,
the most comprehensive, and the most valuable inquiry into the effects
of import duties, which has ever been made in this country, to a
private agency like the Tariff Commission.