TWO merchants from a profitable stroke of business. Whether they
injure the English merchant or the Bostonian would-be purchaser of
cutlery MOST is (as above explained) very difficult to prove in any
well-ascertained instance, but it is quite certain that the
interference of the American import duty causes a loss to each
merchant and to each nation.

Where now is Reciprocity and where Retaliation? We can no doubt say
to the Americans, "As you have injured us in the matter of cutlery,
so will we injure you by putting a duty on wheat." But it is merely
cutting off one's nose to spite one's face. In the exchange of gold
for wheat the division of the profit on one transaction is uncertain,
but in the long run it is probably about equal between the English
and the American merchants, i.e. between the English and the American
nations. (I am not overlooking the fact that the ultimate benefit to
England is cheap bread; but it is unnecessary in the present argument
to follow the food down the throats of the consumers: the wheat is
really worth to the corn merchants what they can get for it from the
consumers.) We cannot stop the corn trade with America by a duty (or
diminish it) without as great a loss to ourselves (probably a
greater) than to them; the retaliation in putting a duty on corn
because the Americans put a duty on cutlery would be (with our
lights) mere spite: it would be as though a farmer who took one
sample of wheat to market and one of barley, should meet a factor who
offered him his price for the wheat, but would not spring to his
price for the barley, and the farmer should thereupon sulkily carry
both his samples home again.

The ideas of Reciprocity and Retaliation are pure relics of the old
Protectionist commercial theory, viz. that there is always a national