FREE TRADE AND PROTECTION 265

The case presented above is that of a country
offering a practically sole convenient market for the excess
of the products of other countries over their temporary
domestic requirements. It is frequently assumed, in presenting
 this case, that it is profitable to provide appliances
capable of meeting the full demand of active trade, and, in
dull times, to have them idle or producing goods which
cannot be sold for the total cost of their production. It is
true that the increase of appliances for production is often
determined by exaggerated estimates of future demand, and
that the situation considered is thus brought about. The
degree of instability of supply and price which results will
be dependent on the relative industrial strength of the two
nations considered, so that the force of the plea for protection
varies also,
One further consideration may be alluded to. It is that
the danger of stagnation is reduced where the stimulus
of competition from! foreign producers, as well as from
compatriots and neighbours, is applied. Where there is the
ability to meet such competition, its effect is not wholly
depressing. Difficulties which can be surmounted, and
which are not vexatiously interposed, are not likely to be
fatally discouraging. The confidence that exertion is
superfluous is one of the influences tending to reduce the
power of effective exertion. The call for constant watchfulness,
 and for the exercise of persistent ingenuity, to meet
the competition of other countries in neutral markets, needs
sometimes to be emphasised by the realisation that the
home market is not unassailable. England owes not a little
of her present industrial strength, and may owe more in the
future, to the healthy operation of this competitive stimulus.
Tacit or explicit agreements may remove the necessity for
strenuous exertion to meet the competition of home
producers in home markets, but such agreements are less
readily made when foreign producers are in question. This
consideration is becoming of increasing importance as the
aggregation of businesses under a unified management
becomes more prevalent.
Before concluding the chapter, it is necessary to point