Richard Schüller, Die Handelspolitik Großbritanniens (1908)

Richard Schüller’s journal article examines Britain’s emerging tariff-reform movement as both a response to changed economic conditions and a test of economic theory. Its three sections move from trading conditions to political parties and then to an extended assessment of scholarship. Schüller supports selective protection, reciprocal trade agreements, and colonial preferences, but criticizes protectionist arguments almost as sharply as free-trade orthodoxy. His central question is which particular duties could expand production sufficiently to justify their costs to consumers. Britain’s experience exposes, for him, the inadequacy of treating free trade and protection as universally valid, mutually exclusive systems.

The historical argument begins by acknowledging free trade’s earlier advantages. Repeal of the corn duties in 1846 initially prevented food prices from rising rather than causing their collapse; agricultural production remained vigorous while industrial exports benefited from Britain’s technical and commercial lead. Schüller locates the decisive change in the subsequent development of overseas agriculture, cheaper freight, foreign industrial competition, and increasingly protective foreign tariffs. Falling grain prices sharply reduced British cultivation and agricultural employment, while manufactured imports gained ground and several established export industries stagnated. His explanation is historical rather than doctrinal: policies beneficial under one configuration of production and competition need not remain beneficial under another.

The political section traces how this altered situation gradually undermined the parliamentary consensus. Early Fair Trade agitation acquired practical force through colonial demands for reciprocal preferences, Canada’s preferential tariff, and Joseph Chamberlain’s campaign. Schüller treats the Brussels Sugar Convention as evidence that threatened countermeasures could induce foreign governments to alter their policies. He also reads the Unionist defeat of 1906 against the interpretation that tariff reform had disappeared: the smaller parliamentary party became more decisively protectionist. The colonial conference of 1907 exposed a further tension between imperial solidarity and the Liberal government’s refusal to grant discriminatory preferences, even within existing revenue duties.

The longest section asks why economic scholarship had supplied so little guidance. Schüller finds Friedrich List’s infant-industry argument inadequate for Britain, where established industries sought protection against younger foreign competitors. Yet pointing to declining industries, unemployment, or prosperity in protectionist countries does not establish that tariffs would improve aggregate production. National comparisons confuse the effects of commercial policy with other determinants of economic performance. The proper inquiry compares outcomes with and without a particular policy, rather than inferring its merits from whether a country is prosperous.

Ein Zoll ermöglicht die Erweiterung der geschützten Produktion, belastet aber den Konsum.

English translation: A tariff makes possible the expansion of protected production, but burdens consumption.

This proposition supplies Schüller’s criterion for discriminating among duties. Their value depends on the relationship between additional production and increased consumer costs, which differs substantially across commodities. He argues that British output of certain manufactures could expand without substantial price increases, whereas domestic sheep farming could not approach the country’s wool requirements even at greatly increased prices. Accordingly, he rejects Chamberlain’s broadly uniform industrial duties as insufficiently reasoned. A rational tariff requires commodity-specific investigation, not protection extended indiscriminately to every organized interest.

Schüller applies the same reasoning to tariffs as bargaining instruments. Most-favoured-nation treatment does not, he argues, guarantee satisfactory access: foreign governments can maintain high duties on goods supplied chiefly by Britain without fearing British retaliation. Other countries have little incentive to negotiate reductions on Britain’s behalf. Britain’s importance as an export market would instead give it considerable negotiating leverage if access became conditional. Aggregate export growth cannot settle this question, since growth may coexist with restrictions that prevent still greater sales.

Um Zollbegünstigungen im Ausland zu erzielen und so den exportierenden Produktionszweigen ihren Absatz zu sichern, muß man eben die eigenen Zölle herabsetzen, und zwar selbst in Fällen, in denen dies inländische Produktionszweige empfindlich trifft.

English translation: To obtain tariff concessions abroad and thus secure markets for exporting branches of production, one must lower one’s own tariffs, even in cases where this seriously harms domestic branches of production.

Protection here becomes negotiable rather than absolute. Schüller explicitly recognizes conflicts between domestic producers and exporters, making reciprocal concessions integral to his positive commercial policy.

Colonial preference likewise demands distinctions. Preferences within existing revenue duties appear comparatively straightforward; duties on previously untaxed food raise harder questions of price incidence and agricultural response. Schüller argues that exempting colonial grain would limit the price effects of a British wheat duty as colonial supply expanded. Such a duty might benefit colonial producers without materially reviving British cultivation. Conversely, strong protection for British bread-grain production would burden consumption disproportionately. Imperial integration therefore cannot substitute for examining economic consequences.

Der durchaus unbefriedigende Zustand der nationalökonomischen Forschung ist nicht etwa auf die Volkswirtschaftslehre Englands beschränkt, herrscht vielmehr ebenso in allen anderen Staaten.

English translation: The thoroughly unsatisfactory state of economic research is by no means confined to economics in England, but prevails equally in all other countries.

The closing discussion extends this criticism to German scholarship, particularly Schulze-Gävernitz’s substitution of philosophical and imperial-political interpretation for analysis of tariff mechanisms. Schüller finds a more useful precursor in John Bernard Byles’s distinction between duties that appreciably increase production and those that impose excessive costs. The article’s wider significance lies in its demand for selective, empirically grounded commercial policy. Its concluding prediction is that British tariff reform could induce foreign concessions and moderate excessive protection internationally—provided economic reasoning gained greater influence over organized sectional interests.