Ludwig von Mises, Vom Ziel der Handelspolitik (1916)

Mises’s article examines trade policy through the tension between material welfare and national preservation. He distinguishes maximizing economic provision from maintaining a nation’s population and political power. Protection lacks an economic justification; its persistence reflects national objectives that tariffs themselves cannot ultimately secure.

Die Beweisführung der Freihandelsschule, die ihren Abschluß und ihre Vertiefung durch Ricardo empfangen hat, konnte nicht erschüttert, geschweige denn widerlegt werden.

English translation: The demonstration of the free-trade school, which received its completion and its deepening through Ricardo, could not be shaken, let alone refuted.

This claim frames Mises’s criticism of List’s productive-forces argument, infant-industry protection, and Schüller’s defense of employing less favorable resources. Protection diverts production from more advantageous opportunities. If an emerging industry’s eventual returns compensate for its initial disadvantages, private investment should already find its establishment profitable. The historical coexistence of industrialization and protective duties does not demonstrate that protection caused industrial development.

Mises nevertheless reconsiders the conditions of the classical argument. Ricardo assumed that capital and labor remained substantially within national borders. International mobility changes the adjustment mechanism: free exchange can relocate productive resources rather than merely specialize production among existing populations.

Es liegt kein Grund mehr vor, zwischen den Wirkungen des freien Verkehrs im Binnenhandel und im Außenhandel einen grundsätzlichen Unterschied zu suchen.

English translation: There is no longer any reason to seek a difference in principle between the effects of free intercourse in domestic trade and in foreign trade.

With full mobility, differences in productive conditions would increasingly determine the density of settlement rather than enduring differences between rich and poor peoples. This economic tendency creates a political problem wherever emigration diminishes a national community.

Es gibt daher Nationen, deren Gebiet bei voller Freizügigkeit der Menschen und Güter dichter, andere, deren Gebiet dann dünner besiedelt wäre.

English translation: There are therefore nations whose territory would, under complete freedom of movement of men and goods, be more densely settled, and others whose territory would then be more thinly settled.

“Overpopulation” accordingly denotes a population larger than a territory would retain under worldwide freedom of movement, not an absolute inability to provide subsistence. The national danger arises from emigrants’ assimilation, not from consuming foreign goods. Protection seeks to retain people whom relative production conditions would otherwise draw abroad. Yet exporting from disadvantaged locations requires lower wages and returns, encouraging emigration. Agricultural duties and cartel-supported export dumping likewise burden domestic consumers. Protection thus reduces the income on which its demographic objective depends.

Mises differentiates these mechanisms across economic settings. Older agrarian societies promote industry to prevent displaced artisans from emigrating; settler societies develop protective systems that attract industrial workers. Relatively overpopulated industrial countries use tariffs to sustain high-cost production and support cartels charging higher domestic prices while exporting cheaply. Recognizing national motives does not, for Mises, establish that these policies overcome their economic costs.

Subsequent discussion considers whether seasonal migration, stronger national attachments, declining fertility, or military requirements alter the argument. Seasonal labor could preserve national membership while perpetuating inequalities between labor-supplying and employing peoples. Uniform population decline would not remove relative differences in settlement, although greater prosperity might make intervention more sustainable. Military self-sufficiency is also insufficient as a defense of protection: domestic armaments production cannot erase the disadvantages that unfavorable production conditions impose on provisioning and equipment.

The geopolitical argument contrasts the extensive settlement territories of Britain, Russia, and the United States with Germany’s dependence on industrial exports. Mises concludes that Germany needs settlement colonies to preserve its world position. His criticism of tariffs therefore coexists with a nationalist and colonial conception of security, resting on racialized assumptions about settlement and assimilation.

The final section examines Renner’s account of Austria-Hungary as an economic community and Naumann’s Mitteleuropa. Interdependence cannot establish the necessity of particular political borders, since the same reasoning connects Austria to the wider trading world. Customs unity may intensify national conflict when industrial location determines which communities retain or assimilate workers. Hungarian industrial promotion, German-Czech competition, and Polish import substitution illustrate this struggle.

Mises concludes that voluntary multinational economic unions require opportunities for comparable industrial and agricultural development. Political alliance does not guarantee compatible commercial interests, while cohesion imposed through conquest cannot establish the viability of voluntary customs union. The article separates economic welfare, national demographic power, and political association: the benefits of exchange do not themselves resolve conflicts over migration, territory, and national survival.