Alexander Mahr, “Konjunktur und Außenhandel” (1957)

This single-author theoretical article examines the two-way relation between business cycles and foreign trade. Mahr’s central thesis is that open-economy conjunctural policy cannot be understood by treating trade as a neutral background: imports, exports, multipliers, retaliation, and liberalization all feed back into employment and income. The essay moves from a taxonomy of cyclical cases, through depression-era protectionism and “defensive” tariffs, to the macroeconomic effects of European trade liberalization.

Mahr first distinguishes six combinations of domestic and foreign upturns or downturns. A domestic boom with foreign stagnation worsens the trade balance and may undermine recovery through import leakages; a domestic downturn, by contrast, can be cushioned by exports if foreign demand remains stable.

Die wirtschaftliche Verflechtung mit dem Ausland, die sich im vorhin besprochenen Falle als Hemmschuh für die konjunkturelle Aufwärtsbewegung ausgewirkt hatte, erweist sich hier als Schutz gegen einen allzu starken Verfall der heimischen Wirtschaft.

English translation: The economic interlinkage with foreign countries, which in the case just discussed had operated as a brake on the cyclical upswing, here proves to be a safeguard against an excessively severe decline of the domestic economy.

The second section turns from automatic effects to policy responses. Mahr treats the Keynesian case for import restriction seriously: if public investment seeks full employment while other countries remain depressed, imports may dissipate the multiplier. Hence a modern rationale for protection arises.

Ein neues Argument für den Protektionismus ist so entstanden, aufgebaut auf dem Postulat der Vollbeschäftigung, der Lehre vom Volkseinkommen und vom Außenhandelsmultiplikator.

English translation: A new argument for protectionism has thus arisen, built upon the postulate of full employment, the doctrine of national income, and the foreign trade multiplier.

But this argument is conditional. Protection may help if others do not retaliate, or if they are already restricting trade anyway; it becomes destructive when it triggers reciprocal escalation. The lesson of the 1930s is that “beggar-my-neighbour” policy can deepen the crisis for all.

Vor allem aber wirkt der Protektionismus zu keiner anderen Zeit so ansteckend wie in der Depression.

English translation: Above all, however, protectionism is at no other time so contagious as during a depression.

Mahr’s core conceptual move is the distinction between aggressive protection and the “Defensivzoll” or retaliatory defensive tariff. Against unilateral free-trade doctrine, he argues that when foreign protection lowers the productivity of export industries, a country may rationally shift resources into protected import-substituting production—provided the resulting productivity loss does not exceed the loss already imposed by foreign barriers.

Die Grenze, an der ein Zoll aufhört, eine Defensivmaßnahme zu sein, und in einen aggressiven Zoll übergeht, kann theoretisch sehr wohl bestimmt werden.

English translation: The boundary at which a tariff ceases to be a defensive measure and passes into an aggressive tariff can very well be determined theoretically.

This is not a blanket defense of tariffs. Mahr defines a limiting rule: defensive tariffs are justified only up to the point where they offset, rather than increase, the welfare loss caused by foreign protection.

Auch abgesehen von konjunkturpolitischen Erwägungen ist der Defensivzoll die einzige Art von Zöllen, die heute noch vom Standpunkt der größtmöglichen Sachgüterversorgung in Gegenwart und Zukunft zu rechtfertigen ist.

English translation: Even apart from cyclical-policy considerations, the defensive tariff is the only kind of tariff that today can still be justified from the standpoint of the greatest possible supply of material goods in the present and the future.

He then narrows older protectionist doctrines. List’s infant-industry argument belonged to agrarian economies at an earlier developmental stage, not to mature industrial countries seeking protection for every new specialty. Temporary emergency tariffs and antidumping duties may be defensible only under analogous defensive conditions; under genuine reciprocal free trade, subsidies are preferable for localized adjustment crises.

The final section reasserts the normative benchmark: not autarky, but reciprocal liberalization.

Das Ideal vom Standpunkt der Steigerung des volkswirtschaftlichen Realeinkommens bleibt der gegenseitige Freihandel einer möglichst großen Zahl von Staaten oder aller Staaten.

English translation: The ideal from the standpoint of raising the real income of the national economy remains mutual free trade among as large a number of states as possible, or among all states.

Mahr’s discussion of OEEC liberalization adds an accelerator mechanism to multiplier analysis. Import growth may hurt domestic sellers while export growth helps foreign-oriented firms, but expanding exports induce investment in machinery, steel, construction, and other capital-goods sectors. Thus liberalization can become generally expansionary if capital-goods capacity is not already overstrained.

Daher lässt ein nicht zu langsam durchgeführter Abbau der Handelsschranken einen Aufschwung auch in den Investitionsgüterindustrien erwarten.

English translation: Therefore, a not too slowly implemented dismantling of trade barriers permits us to expect an upswing also in the investment goods industries.

The essay’s relevance lies in its synthesis of Keynesian full-employment policy with classical trade concerns. It rejects both naïve unilateral free trade under foreign protection and opportunistic depression protectionism, replacing them with a conditional theory of defensive tariffs and a cautiously optimistic account of integration.

Es ist von größter Wichtigkeit, sich über diese Zusammenhänge ein richtiges Urteil zu bilden, denn falsche Auffassungen und dementsprechend falsche Maßnahmen haben hier in der Vergangenheit sehr viel Unheil angerichtet.

English translation: It is of the greatest importance to form a correct judgment about these connections, for mistaken views and correspondingly mistaken measures have caused a great deal of harm here in the past.