YOU NEED MONEY TO MAKE MONEY^267against imperial authoritarianism. The protectionist wall fell. But very
quickly a cold shower of foreign manufactures (textiles particularly) re
vived the national instinct. French manufacturers cried havoc, and the
Chamber of Deputies promptly voted a series of tariffs, each higher
than the one before. Import of key commodities such as cotton yarn
and cloth was prohibited outright. Whether this kind of wall was good
for French industry is a matter of debate. It raised prices for French
consumers, reduced demand, and sheltered obsolete technologies. But
it increased the rate of profit for those more efficient firms that flour
ished inside the price envelope.* There is more than one way to fatten
enterprise.
Meanwhile French economists, inspired by their English counter
parts, argued the advantages of liberalization. With the revolution of
1848, the political pendulum swung back, away from high protection
and its Orléanist beneficiaries. No sooner had Louis Napoléon settled
in than pressure increased for an end to prohibitions and an easing of
duties. The economists at least were not afraid of Big Bad Britain. In
the face of strenuous resistance by manufacturers, who wept tears for
their employees, the imperial regime lowered tariff barriers signifi-
cantiy, first by opportunistic decrees, then by an Anglo-French com
mercial accord (Cobden-Chevalier Treaty, 1860) that was put to public
discussion only after it was concluded. (That's the best time, of course.)
The testimony of witnesses was published in seven large quarto vol
umes and provides an extraordinary insight into a split French "estab
lishment." So finally ended the regime of prohibitions on key industrial
products (cotton textiles, ships). If France, moreover, could afford to
take on British competition, it could certainly compete with less de
veloped countries. In subsequent years, the new low tariff regime was
extended to others (thus the German Zollverein in 1865) on the most-
favored-nation principle.^9
- In theory, competition on the domestic market should have pushed prices (and
profits) down, even in the presence of tariff walls. But the more efficient producers
were only too happy to set prices by (hide behind) their backward competitors and
enjoy monopolistic gains. Cf. Guy Thuillier, Aspects, p. 255: "The survival [of small,
old-fashioned charcoal iron works], the inertia of the economic milieu and the pro
tection of vested interests, assure a supplementary rent to the new forges; not only do
tariff duties protect them from the competition of foreign iron, but the rent of pro
tection is doubled by a technological rent due to the survival of small, archaic forges
producing at a very high price." Also pp. 249-50, on the delayed dominance of rolled
as against hammered gun barrels: the rolled cost much less to make, but the makers
wanted to charge the same price as for the others. The goal was not market share but
rate of profit. But since the buyer was the state, why not?