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those of foreigners； and the maxim thus early held good that it was
sound policy to import raw materials from other states and to
export to them manufactured goods。（9*）
It has been recently asserted in defence of the principle of
absolute and unconditional free trade； that her protective policy
was the cause of the downfall of Venice。 That assertion comprises
a little truth with a great deal of error if we investigate the
history of Venice with an unprejudiced eye； we find that in her
case； as in that of the great kingdoms at a later period； freedom
of international trade as well as restrictions on it have been
beneficial or prejudicial to the power and prosperity of the State
at different epochs。 Unrestricted freedom of trade was beneficial
to the Republic in the first years of her existence； for how
otherwise could she have raised herself from a mere fishing village
to a commercial power？ But a protective policy was also beneficial
to her when she had arrived at a certain stage of power and wealth；
for by means of it she attained to manufacturing and commercial
supremacy。 Protection first became injurious to her when her
manufacturing and commercial power had reached that supremacy；
because by it all competition with other nations became absolutely
excluded； and thus indolence was encouraged。 Therefore； not the
introduction of a protective policy； but perseverance in
maintaining it after the reasons for its introduction had passed
away； was really injurious to Venice。
Hence the argument to which we have adverted has this great
fault； that it takes no account of the rise of great nations under
hereditary monarchy。 Venice； although mistress of some provinces
and islands； yet being all the time merely one Italian city； stood
in competition； at the period of her rise to a manufacturing and
commercial power； merely with other Italian cities； and her
prohibitory commercial policy could benefit her so long only as
whole nations with united power did not enter into competition with
her。 But as soon as that took place； she could only have maintained
her supremacy by placing herself at the head of a united Italy and
by embracing in her commercial system the whole Italian nation。 No
commercial policy was ever clever enough to maintain continuously
the commercial supremacy of a single city over united nations。
From the example of Venice （so far as it may be adduced against
a protective commercial policy at the present time） neither more
nor less can be inferred than this that a single city or a small
state cannot establish and maintain such a policy successfully in
competition with great states and kingdoms； also that any power
which by means of a protective policy has attained a position of
manufacturing and commercial supremacy； can （after she has attained
it） revert with advantage to the policy of free trade。
In the argument before adverted to； as in every other when
international freedom of trade is the subject of discussion； we
meet with a misconception which has been the parent of much error；
occasioned by the misuse of the term 'freedom。' Freedom of trade is
spoken of in the same terms as religious freedom and municipal
freedom。 Hence the friends and advocates of freedom feel themselves
especially bound to defend freedom in all its forms。 And thus the
term 'free trade' has become popular without drawing the necessary
distinction between freedom of internal trade within the State and
freedom of trade between separate nations； notwithstanding that
these two in their nature and operation are as distinct as the
heaven is from the earth。 For while restrictions on the internal
trade of a state are compatible in only very few cases with the
liberty of individual citizens； in the case of international trade
the highest degree of individual liberty may consist with a high
degree of protective policy。 Indeed； it is even possible that the
greatest freedom of international trade may result in national
servitude； as we hope hereafter to show from the case of Poland。 In
respect to this Montesquieu says truly； 'Commerce is never
subjected to greater restrictions than in free nations； and never
subjected to less ones than in those under despotic
government。'（10*）
NOTES：
1。 De l'Ecluse； Florence et ses Vicissitudes； pp。 23； 26； 32； 163；
213。
2。 Pechio； Histoire de l'Economie Politique en Italie。
3。 Amalfi contained at the period of her prosperity 50；000
inhabitants。 Flavio Guio； the inventor of the mariner's compass；
was a citizen of Amalfi。 It was the sack of Amalfi by the Pisans
（1135 or 1137） that that ancient book was discovered which later on
became so injurious to the freedom and energies of Germany the
Pandects。
4。 Hence Charles V was the destroyer of commerce and industry in
Italy； as he was also in the Netherlands and in Spain。 He was the
introducer of nobility by patent； and of the idea that it was
disgraceful for the nobility to carry on commerce or manufactures
an idea which had the most destructive influence on the national
industry。 Before his time the contrary idea prevailed； the Medici
continued to be engaged in commerce long after they had become
sovereign rulers。
5。 〃Quand les nobles； au lien de verser leur sang pour la patrie；
au lieu d'illustrer l'etat par des victoires et de l'agrandir par
des conquetes； n'eurent plus qu'a jouir des honneurs et a se
partager des impots on dut se demander pourquoi il y avait huit ou
neuf cents habitants de Venice qui se disaient proprietaries de
toute la Republique。〃 （Daru； Histoire de Venise； vol。 iv。 ch。
xviii。）
6。 Esprit des Lois； p。 192。
7。 A mere charlatan； Marco Brasadino； who professed to have the art
of making gold； was welcomed by the Venetian aristocracy as a
saviour。 （Daru； Histoire de Venise； vol。 iii。 ch。 xix。）
8。 Venice； as Holland and England subsequently did； made use of
every opportunity of attracting to herself manufacturing industry
and capital from foreign states。 Also a considerable number of silk
manufacturers emigrated to Venice from Luces； where already in the
thirteenth century the manufacturer of velvets and brocades was
very flourishing； in consequence of the oppression of the Lucchese
tyrant Castruccio Castracani。 （Sandu； Histoire de Venise； vol。 i。
pp。 247…256。）
9。 Sismondi； Histoire des Republiques Italiennes； Pt。 I； p。 285。
10。 Esprit des Lois； livre xx。 ch。 xii。
Chapter 2
The Hansards