264 ECONOMIC PRINCIPLES

be named as bringing out another of the arguments
advanced on the side of protection. It is that import duties
are necessary, to secure a steady market for domestic
producers, when protection is the policy of powerful
industrial nations. These nations exclude from their markets
certain classes of products, and their domestic output of
these products is swollen to the extent of the requirements
of their domestic markets at normal, or even to those of
busy, times. When the home demand falls off, the price in
the domestic market is not correspondingly reduced, neither
is the output reduced in proportion to the reduction of
domestic requirements. The excess, which is not absorbed
by the home demand, is exported, and may be sold at a
price as low as its prime cost of production (see p. 59)
without involving actual loss to its producers, The country
which, while producing such goods for itself, has no duty
on their importation, offers a favourable market, and its
producers are liable to find themselves undersold at such
times, To any reduction of the profitableness of their
business which dull times may bring, is added the ruinous
competition of the surplus produce of a protected neighbour.
The neighbour's import duty checks them from competing
in his home market, and thus, by forcing prices down there,
reducing the inducement to slaughter a surplus elsewhere.
Were an import duty in existence in this second country,
the offer of goods in its market at the equivalent of the
prime cost to their neighbours, with cost of carriage added,
would be restrained, since it would involve a positive loss
of the amount of the duty. If the uncertainties of a business,
under the conditions considered in the absence of a duty,
induce producers to abandon their enterprise, the result to
the consumers in this second country will be that, when the
neighbour has an active home demand, they will only get
supplies at a high price, and when he has a slack home
demand, they may get them at a low price. May not a steady,
or fairly steady, price, even if higher than would be maintained
in the absence of a duty on the goods, be preferable to, and
not more burdensome than, such a fluctuating supply and
price? Further, can such a state of things be secured?