While listening to President Trump’s address to the joint
session of Congress I noted his reference to Lincoln, “The first Republican
President, Abraham Lincoln, warned that the “abandonment of the protective
policy by the American Government (will) produce want and ruin among our
people.”” As Lincoln’s collection of
tariff revenue was foremost in his prosecution of the War Between the States,
it should be noted that he wrote his thoughts here quoted by Trump in
1846-1847. Lincoln stated in his lay
study ((https://quod.lib.umich.edu/l/lincoln/lincoln1/1:423.1?rgn=div2;view=fulltext Collected Works of Lincoln Volume 1,
Fragments of a Tariff Discussion), “If a certain duty be levied upon an article
which cannot be produced in this country, as three cents a pound upon coffee,
the effect will be, that the consumer will pay one cent more per pound than
before, the producer will take one cent less, and the merchant one cent less in
profits---in other words, the burthen of the duty will be distributed over
consumption, production, and commerce, and not confined to either. But if a
duty amounting to full protection be levied upon an article which can be
produced here with as little labour, as elsewhere, as iron, that article will
ultimately in consequence of such duty, be sold to our people cheaper, at least
by the amount of the cost of carrying it from abroad.” He maintained this belief in the benefits of
a protectionist tariff assuming that goods produced elsewhere and
shipped/imported here must necessarily be more expensive due to the additive
costs of everyone who touched the goods either as transporter or
intermediate/distributing merchant. Surely
Lincoln is not the economist of Thomas Sewell’s ilk as one must seriously
wonder upon what grounds he believes a producer would absorb a duty/tariff
without passing that cost along to the consumer and the merchant would just
take less also to allow the end consumer to not be burdened with these costs?? What business model is that? Lincoln
certainly didn’t envision massive container ships and sweat shops abroad
either.
Lincoln continued, “It seems to be an opinion that the
condition of a nation, is best, whenever it can buy cheapest (think NAFTA and
“Made in China”); but this is not necessarily true, because if, at the same
time, and by the same cause, it is compelled to sell correspondingly cheap,
nothing is gained. Then, it is said, the best condition is, when we can buy
cheapest, and sell dearest; but this again, is not necessarily true; because,
with both these, we might have scarcely any thing to sell (abroad). These
reflections show, we must look not merely to buying cheap, nor yet to buying
cheap and selling dear; but also to having constant employment, so that we may
have the largest possible amount of something to sell. This matter of
employment can only be secured by an ample, steady, and certain market, to sell
the products of labour in.” Constant
employment or a generous welfare state??
He goes on to provide an example of a small economic system
with a manufacturer with employees and a farmer with employees who enjoy
commerce exclusively together in a closed/protected system benefitting each in
some happily matched orchestrated nirvana.
But he warns, “After awhile the farmer discovers that, were it not for
the protective policy, he could buy all these supplies cheaper from a European
manufacturer, owing to the fact that the price of labour is only one quarter as
high there as here. He and his hands are a majority of the whole; and therefore
have the legal and moral right. They throw off the protective policy, and
farmer ceases buying of home manufacturer. Very soon, however, he discovers,
that to buy, even at the cheaper rate, requires something to buy with (and he
has no money as Lincoln believes these foreign cheap labor markets would be too
destitute to purchase the farmer’s goods).”
Macro-economist Lincoln or country lawyer or abolitionist hero or
Renaissance man?
“But it has so happened in all ages of the world that some
have laboured, and others have, without labour, enjoyed a large proportion of
the fruits. This is wrong. To secure to each labourer the whole product of his
labour is a most worthy object of any good government. (Wouldn’t that be swell,
no income tax?) Will the protective (tariff) principle advance or retard this
object? The habits of our whole species
fall into three great classes---useful labour, useless labour and idleness. Of
these the first only is meritorious. The only remedy for this is to drive
useless labour and idleness out of existence. Before making war upon (useless
labour), we must learn to distinguish it from the useful. All labour done in carrying articles to their
place of consumption, which could have been produced at the place of
consumption, as at the place they were carried from, is useless labour. Iron and everything made of iron, can be
produced, in sufficient abundance and with as little labour, in the United
States, as anywhere else in the world; therefore, all labour done in bringing
iron and it's fabrics from a foreign country to the United States, is useless
labour. The same precisely may be said of cotten, wool, and of their fabrics
respectively. While the uselessness of the carrying labour is equally true of
all the articles mentioned, it is, perhaps, more glaringly obvious in relation
to the cotten goods we purchase from abroad. The raw cotten, from which they
are made, itself grows in our own country; is carried by land and by water to
England, is there spun, wove, dyed, stamped and then carried back and worn in
the very country where it grew. Why
should it not be spun, wove in the very neighbourhood where it both grows and
is consumed, and the carrying about thereby dispensed with?” Drive from existence? War?
Useless labor? Perhaps Lincoln
needed to read the Department of Transportation’s, Bureau of Transportation
Statistics (yes there is such a thing) analysis, “Freight is an important part
of the transportation sector, and the transportation sector is in itself a
major component of our economy. The transportation sector moves goods and
people, employs millions of workers, generates revenue, and consumes materials
and services produced by other sectors of the economy. The wide range of
transportation services used in the economy includes for-hire freight carriers,
private transportation providers, freight forwarders, logistics providers, and
firms that service and maintain vehicles.
In 2002, transportation-related goods and services accounted for more
than 10 percent—over $1 trillion—of U.S. Gross Domestic Product. Only three sectors—housing, health care, and
food—contributed a larger share of GDP than transportation.” (
www.rita.dot.gov/bts/programs/freight_transportation/html/transportation.html) Useless?
“This useless labour I would have discontinued, and those
engaged in it, added to the class of useful labourers. If I be asked whether I would destroy all
commerce, certainly not - I would continue it where it is necessary, and
discontinue it, where it is not. An instance: I would continue commerce so far
as it is employed in bringing us coffee, and I would discontinue it so far as
it is employed in bringing us cotten goods.”
Has the ring of a socialist utopia doesn’t it with the omnipotent
government determining what is good commerce and worthwhile labor for each
comrade citizen. Lincoln goes on to
expound on his theories with another lengthy example of the farmer who could
buy his iron farm implements and finished fabrics more cheaply from Europe than
from his neighbors. The farmer throws
off the protective tariffs to purchase cheaper imports but finds he has no
domestic market for his agricultural goods as he has caused the home manufacturing
sector to suffer and fall to ruin.
He concludes, “Universal idleness would speedily result in
universal ruin and useless labour is, in this respect, the same as idleness. I submit, then, that partial idleness, and
partial useless labour, would in like manner result, in partial ruin. The abandonment of the protective policy by
the American Government, must result in the increase of both useless labour, and
idleness; and so must produce want and ruin among our people.” These thoughts and hypotheses of Lincoln’s
show that at an early age and at the very beginning of his political career he
espoused strong protectionist tariffs and believed that abandoning these would
lead to economic ruin for the country.
Where many have correctly surmised that Lincoln prosecuted his War to
preserve the tariff income from the Southern ports, his notes here demonstrate
he seriously believed the South was effectively instigating or provoking
economic warfare on the North and its manufacturing industry in abandoning the
closed protective economic system shaped by his federal government. Certainly an argument can be posited as to
the benefits of Trump’s current plans to implement a border adjustment which
could lower corporate tax rates and result in companies reinvesting in American
manufacturing and facilities and workers, providing jobs and increased wages.
One can also suppose this economic philosophy may lead to inflation. But this again highlights the disparity in
the contributions made by the Southern states to the antebellum economy and the
federal coffers and the inequitable federal disbursement to and investment in
Northern infrastructure. You need only
follow the money to discern the true cause for the War for Southern
Independence.
