FREE TRADE AND PROTECTION 245

are found in the country, it is the explanation to which we
are forced to turn.
It is, however, claimed that the powers of the state may
properly be used to modify this condition of affairs, and
render profitable some industries which do not present, of
themselves, sufficient attractions to lead entrepreneurs to
develop them. This is called a policy of protection, since it
aims at preventing the competition of imported goods from
checking the establishment, or the development, of a domestic
production of the same goods. If what has been stated here
and in Chapter XIIL is sound, the thing really aimed at is, to
prevent the superior attractions of other investments, for the
capital and labour of the country, from absorbing all the
available supplies of these industrial agents; to enable the
industry which is to be protected to occupy a position of
sufficient strength to attract the capital and labour needed
for its development. To do this it must be able to offer
favourable prospects of profit to those who undertake its
risks and become responsible for payment of wages to labour
and a return to capital, prospects at least equal to those
offered by the general run of industrial openings which do
secure the funds required for development. This prospect
of profit is to some extent ensured if the power to depress
prices, which comes from the unfettered competition of
imported goods, be limited or destroyed, or if such assistance
is given as may make a profit reasonably secure in spite of
such competition in the matter of price.
There are many who maintain that such support to
special industries yields no net gain to the community, and
that the soundest lines of development of its resources will
be those which are ensured by leaving both internal and
external trade to themselves. An equal field for all is
believed to be the wisest motto. This is known as the Free
Trade doctrine.
The protection of industries may be effected by several
methods. Thus, a method practised in reference to railways
by several countries is to guarantee, usually for a limited
term of years, a minimum rate of interest on the capital of
the company which builds and works a particular railway.