The National System of Political Economy
THE example of Great Britain during the last few years may be deemed by many to furnish a refutation of List's doctrine on this point. The excess of her recorded imports over her recorded exports has increased from 58,000,000 in 1869 to 121,000,000 in 1883.
The induction of accurate conclusions as to the beneficial or injurious effects of this state of things on the national welfare, and consequently on the general truth or error of List's allegation, is rendered difficult chiefly by two considerations—first, by the circumstance that Great Britain possessed up to a few years ago, and still possesses to a considerable extent, large amounts of capital invested abroad, the dividends or interest on which, if not reinvested there, necessarily tend to increase her total recorded imports. The second is, that we have no statistical returns of British home production or consumption of manufactured goods, and only imperfect ones of her agricultural production. Hence it is impossible accurately to determine to what extent Great Britain's present enormous excess of imports represents merely the annual interest on previously acquired capital, and to what extent, on the other hand, it represents the substitution of the products of foreign labour in her own markets for those of her home industry.
To the extent to which the former of these two elements can be proved to exist, the excess of imports so accounted for is (in the case of England) special and abnormal, and proves nothing adverse to the general truth of List's allegation.
But even if it be correct (and it is difficult to believe that it can be so) that the excess in value of our imports (less carrying profits) is wholly accounted for by earnings on capital invested abroad (which earnings reach us in imported commodities), it would appear that, if the direct effect of such earnings so imported is to supplant and diminish production at home, there is a countervailing national loss, which goes far to neutralise the alleged national benefit of such excess of imports.
Supposing, for instance, that the nation as a whole possesses 1,000,000,000l. sterling invested abroad in various ways realising an annual income of 50,000,000l. sterling, that profit, if not reinvested abroad, no doubt reaches us in imported commodities and permeates through the community; but when such commodities mainly consist of goods or produce which supplant home productions, we are then to a great extent losers.
Were such profit to reach us only in goods which we cannot produce, or in raw materials required for manufactures, it might all be deemed national gain; but when it reaches us in the shape of food or other articles which could be produced at home, and only transfers our custom from native to foreign producers, the gain is questionable even for the present, and (viewed prospectively) would appear to involve absolute danger to the community.—TRANSLATOR.
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