CHAPTER I. WHAT TRADE IS.

All Trade, home or foreign, is an exchange of goods. In modern societies, the real co-operation of producers to serve each other as consumers takes the form of competition with each other. But, in home trade, the competition is most prominent; in foreign trade, the co-operation.

IT is impossible to come to a fair judgment on the comparative merits of Free Trade and Protection without understanding, not only how trade between nations is carried on, but what all trade essentially is.

Trade is an exchange of Services. The services are generally embodied in material goods, and then called Commodities, but in many cases they are simply rendered by personal acts. It is these mutual services which explain the whole industrial organisation. As received, they fill and satisfy our lives: as rendered, they are our claim for wages, salaries, interest, profits, and we take our payment in them.

We are all servants of each other—sitting in a ring, as it were, making goods to our own demand, and throwing them into a heap in the centre. If we could see more clearly, it would be our pride and pleasure, as it is our interest, to add more and more to the heap; for, the greater the heap, the more there is to eat, to wear, to use, to satisfy that strange complex of wants and desires and energies which we call Life. But, in historical development, this essential co-operation of the working life has taken on the outward form of competition. Producers no longer work for their own hand and to satisfy their own wants. Industry is divided up and organised into producing units. The simple “hand-process” has developed into the “production-process,” extending over long periods and gathering its material from all quarters. It becomes more difficult to see the end from the beginning—to realise that, as always, it is the Services for which we work, and the Services in which we get paid. And, with this, the great common issue and goal of producing more goods is obscured by the differences of interest which emerge as to the distribution of the goods; that is to say, the essential co-operation of the workers to make and increase the heap of goods becomes more difficult to remember; the competition of the workers to get their share comes more to the front. Thus it seems to those engaged in the industrial life as if they were all struggling against each other. The working man thinks he is bargaining with a greedy employer, and fighting against “blacklegs” who would fain take his job. The employer thinks he is struggling to keep his feet with workers ready to revolt, and knows that he is fighting for life or death with his brother employer in the next street. All the time, the truth is that we are sitting in a ring, just as before, feverishly adding to the heap of things in the centre—competing with each other for the chance of adding most. It seems as if I were trying to steal your thread, and you were trying to sneak away my needle. So, often enough, it is; but, all the same, the heap of things in the centre grows. And the end of the things is Life.

It reminds one of a foursome at golf. Two of us are partners, and we play into each other’s hands. But each couple fights for all it is worth against the other couple. In the end one couple wins. Does the other lose? Yes; it loses the match. But both have won,—both have gained in what, after all, is the end of the game: both go home to their dinner, richer in skill, in exercise, in health, in appetite. Or, perhaps, it would be truer to say that, after being one up and one down all the round, the two couples come in square. This is merely a lighter reading of the phenomenon we put in economic terms when we say: Industry is the making and exchanging of Commodities and Services for the support of man’s life.

It is a hierarchy of Service. A gang of negroes, under a burning sun, cultivate and gather cotton; fighting among themselves, with lowering glances at their overseer, but—gathering cotton. Ships compete to carry it home; the lowest freight gets the cargo; fighting again, but—the cotton is shipped. In a Lancashire mill, workers are on the brink of a strike; trade union men watching the owners, watching the “blacklegs”; employers keeping a smiling face with fear in their hearts; fighting all, but—the cotton is spun and woven. In a Manchester warehouse, are half a dozen travellers trying to sell cloth, watching and waiting, fawning or bullying; fighting again, but—the cotton is sold. In a London street lines of shops are offering the same cloth; some keeping back the truth, others adding to it; all advertising that this and this only is the best; and we—for whom the whole long struggle of competitive service is undergone—we carry it off to cover our shivery bodies withal.

All the long struggle ends in Service to us. It is a struggle to serve—Service through Competition.

What, in a word, is the constant and daily struggle of competitive industrial life but the effort to make goods “cheap”? But what is Cheapness? It is only another expression for Abundance. Things fall in value and in price just as we get more of them. In the Garden of Eden there could be neither value nor price.

In home trade, it is the Struggle that catches the eye more than the Service—for, indeed, in the long production-process the end is so far from the beginning, and each worker makes such a little bit of a thing, that it is difficult to realise that, what men work for, is the things that support our many-sided Life. A man who spends his life turning threads on a screw can scarcely be expected to realise that he is making part of his own kitchen table.

But, in trade between nations, it is the Service that is brought out rather than the Struggle. For the chief phenomenon here is that countries supplement each other. Almost no modern civilised life can be supported, no breakfast table covered, by anything less than the co-operation of goods and services from all the world we know. Nations send to each other what they alone can grow, or dig, or make; or what they can grow, or dig, or make better and cheaper than the others. In this view, the type of mutual service is, say, an exchange of oatmeal from Scotland for claret from France, or, better perhaps, an exchange of steam coal from Wales for hematite ore from Spain.

The Struggle does come in, and, in late years, has come in very bitterly. It scarcely emerged so long as each country had the “natural protection” of distance, and accordingly exported only products for which it had obvious natural advantages—in days when France sent wines, and America maize, and Norway timber. We do not grow these things, and we had to pay heavy freights, and so a heavy price, if we wanted them. But now when America sends wheat, and France woollens, and Norway butter, the Service they render becomes somewhat obscured by the Struggle which ensues with our own producers. We sell cheap ships to Germany and cut the feet from under her own builders. She sells cheap steel to us, and our makers cry out.

That is to say, as nations become drawn together by steam, and electricity, and the international post, and international banking, and as sea carriage becomes cheaper than railway carriage, the struggle to serve becomes almost as keen between Britain and Germany as between Lancashire and Glasgow; and we British makers do not like it, any more than Glasgow weavers like Lancashire competition. But, seen from above, it is just the same old struggle to serve on the larger scale—Germans and Englishmen competing to serve Germany, and Englishmen and Germans competing to serve England.

There are, of course, some who speak against Competition in itself as a bad thing. So it would be, if it were that kind of struggle where nations try to blow each other to pieces. But when competition is clearly seen to mean the struggle to provide you and me with Abundance, the matter puts on another aspect. If we ever get that all-sided Free Trade which everybody seems to think so desirable, there will be a struggle to serve such as we have never seen before, and I only hope that England may be able to hold her own in it. Anyhow, through it international trade is, on a large scale, what home trade is on a more restricted one—the Struggle to Serve. If we shut out foreign competition, we shut out foreign service. These things will come out pretty clearly when we go on to ask what our Foreign Trade consists of.