Industry and Trade

Abstract

point of view; though in the absence of any statistics of the imports and exports Industry and Trade / 21 of the place, they would to some extent still lack reality. This observation of course does not apply to a residentiary town such as Bournemouth, or Newport in Rhode Island. Industrial leadership has generally been accompanied by a large foreign trade: and, partly for that reason, there is a widespread notion that the volume of her foreign trade is a fairly good measure of a country’s prosperity. Let us inquire broadly how much truth there is in this notion. Much of the mystery which hangs about the trade of a nation may be dispelled by the reflection that the trade between two nations is the aggregate of the trade between their individual members, (the commercial transactions of Governments being left out of account): and that therefore it is likely to present many of the same features as theirs, though in a disguised form. It is obvious that the trade of an individual is not a fairly good measure of his prosperity, unless he be a merchant or shopkeeper: that is, unless he have adopted trade as his industry. The volume of the trade of a merchant is no doubt a prima facie, though not conclusive, proof of his business efficiency and prosperity. But if a man’s main business is to produce, the test is most untrustworthy: because a little energy given to some branches of production leads to a larger trade than much energy given to others. Take, for instance, a woollen manufacturer, who has been in the habit of spinning his own yarn. Suppose him forced to give up his factory, his land being perhaps needed for a new railway. When building on a fresh site, he decides to buy his yarn, and to erect weaving sheds twice as large as his old ones. Henceforward he uses about the same capital, and buys about the same amount of coal and labour as before: but his outlay on yarn for his large weaving shed is much greater than his outlay on wool for the small one used to be; and his output of cloth is about doubled. His trade is greatly increased. Does the change reflect increased prosperity? Is it to his credit? We cannot say. The cause of the change of plan may have been that his weaving sheds were more successful than those of his competitors: but it may have been that his spinning mills were less successful than theirs. Mere volume of trade shows nothing. To find even an approximate answer we must go behind the facts given, and ascertain their causes. This is obviously true of private trade, and it is equally true of national trade. For a country like an individual may increase her trade as a consequence of a decrease in facilities for producing something which she imports. For instance, a bad harvest at home is likely to increase England’s trade. She must import more grain, and export more manufactures to pay for it. On the other hand her trade might be lessened by the discovery of high grade iron ores, which would enable her to dispense with those that she now imports from Spain; or again by an energetic development of dairy and poultry farming, which would enable her to dispense with much of her imports from Denmark. Again improvements in her methods of building motor cars tended to lessen her trade, until her cars were as much sought for as those of France, which she at one time imported largely: and further improvements seem likely to augment her exports of them and