Gottfried Haberler on Eulenburg’s Aussenhandel und Aussenhandelspolitik (1931)

Gottfried Haberler’s 1931 review assesses Franz Eulenburg’s 1929 monograph on international trade and commercial policy. It opens by acknowledging the book’s extraordinary scope: trade theory and history, monetary mechanisms, tariffs, international business organizations, and the political sociology of economic policy. Yet comprehensiveness is precisely what Haberler distinguishes from intellectual achievement:

The program is promising, vast, and imposing; but the execution is disappointing, superficial, and poor.

The review moves from examples of theoretical confusion to an indictment of the book’s organization, ending with a judgment about the dependence of historical scholarship on economic theory. Its central claim is that neither extensive coverage nor abundant information can compensate for defective concepts and the absence of an explanatory framework.

Haberler’s first example concerns dumping. Eulenburg defines it as selling the same commodity more cheaply abroad than at home, but then includes currency depreciation among its forms. Haberler insists on distinguishing international price discrimination from the undercutting of foreign competitors:

Now, (c) is obviously not covered by the definition; for, although there is an undercutting of the foreign prices, there is not necessarily a price discrimination between home consumption and export.

This objection exemplifies the review’s demand for consistency between definitions and their applications. Two further examples extend the charge. Haberler reproduces a passage connecting world-market prices, national purchasing power, domestic demand, and consumer’s rent, presenting its tangled reasoning as evidence of conceptual disorder. He then quotes Eulenburg’s claim that specialization in the England–Portugal example creates a national monopoly and therefore defeats the promise of cheap supply. Haberler treats this as another misuse of economic theory, although he does not supply a detailed counterargument.

The organizational criticism develops a more positive account of what an adequate trade treatise should explain. Eulenburg’s three parts address international economic intercourse, foreign economic policy, and economic significance. For Haberler, however, their sequence fails to establish the theoretical foundations needed for subsequent policy analysis. The discussion of the balance of payments rejects the classical price-specie-flow mechanism, while its substitute—movements in exchange and interest rates—does not adequately explain lasting equilibrium. An account of the underlying real relations should follow: comparative costs, Marshallian reciprocal supply and demand, or the general-equilibrium approaches of Pareto and Barone.

Instead, comparative-cost theory appears piecemeal, with its fuller exposition delayed until after discussions of import duties and tariff equalization of production costs. The criticism is thus more than pedagogical: policy conclusions are considered before the analytical principles needed to assess them have been established. Haberler’s concluding appraisal makes this dependence explicit:

The historical part is much better, but is also far from being satisfactory, because a just appraisal of historical facts, without a sound theoretical basis, is impossible.

He grants that the book contains useful references, facts, and ideas, but regards these as insufficiently organized material requiring substantial rewriting. His closing identification of it with Schmoller’s younger historical school gives the review its methodological edge. The work’s significance lies in this forceful assertion of theoretical discipline: international economic history and commercial-policy analysis require not simply empirical breadth, but coherent definitions, an explanation of equilibrium, and a logically ordered treatment of comparative advantage.