eign trade are of two kinds: taxes on imports and on
exports. On the first aspect of the matter it would seem that both these
taxes are paid by the consumers of the commodity. The true state of the
case, however, is much more complicated.

By taxing exports we may draw into our coffers, at the expense of
foreigners, not only the whole tax, but more than the tax; in other
cases we shall gain exactly the tax; in others less than the tax. In
this last case, a part of the tax is borne by ourselves, possibly the
whole, even more than the whole.

If the imposition of the tax does not diminish the demand it will leave
the trade exactly as it was before. We shall import as much and export
as much; the whole of the tax will be paid out of our own pockets.

But the imposition of a tax almost always diminishes the demand more or
less. It may therefore be laid down as a principle that a tax on
imported commodities, when it really operates as a tax, and not as a
prohibition, either total or partial, almost always falls in part upon
the foreigners who consume our goods. It is not, however, on the person
from whom we buy, but on those who buy from us that a portion of our
custom duties spontaneously falls. It is the foreign consumer of our
exported commodities who is obliged to pay a higher price for them
because we maintain revenue duties on foreign goods.

* * * * *

We now reach the consideration of the grounds and limits of the
principle of _laisser-faire,_ or non-interference by government.

Whatever theory we adopt respecting the foundation of the social union
there is a circle round every human being which no government ought to
be permitted to overstep; there is a part of the life of every person of
years of discretion within which the individuality of that person ought
to reign uncontrolled either by any other individual or by the public
collectively. Scarcely any degree of utility short of absolute necessity
will justify prohibitory regulation, unless it can also be made to
recommend itself to the general conscience.

A general objection to government agency is that every increase of the
functions devolving on the government is an increase of its power both
in the form of authority and, still more, in the indirect form of
influence. Though a better organisation of governments would greatly
diminish the force of the objection to the mere multiplication of their
duties, it would still rema