Gottfried Haberler, Tariffs: The Case Examined. [Review] (1932)

Haberler’s review of the report produced by a committee of economists chaired by Sir William Beveridge endorses a qualified, analytically rigorous defense of free trade. Although the report chiefly addresses Britain, Haberler regards its arguments as broadly applicable. His opening judgment establishes the strength of his approval:

This is the best and most up-to-date statement of the arguments for free trade that I have ever seen.

The praise rests on the report’s refusal to substitute popular simplifications for economic reasoning. Haberler argues that advances in economic analysis, together with more refined protectionist theories, require free traders to confront objections rather than dismiss them. A tariff may benefit particular industries and, under certain circumstances, even a country as a whole. Acknowledging these possibilities strengthens the defense of free trade by making its claims more credible:

An absolute 100 per cent doctrine of free trade is untenable and is apt to compromise not only the free-trade movement but also economic theory on which it rests.

The decisive conceptual move is to distinguish theoretical possibility from practical plausibility. Haberler favors the committee’s method of admitting conceivable benefits from protection while showing that the conditions required are highly artificial and improbable. For him, scholarly qualification need not undermine persuasive force; it prevents protectionists from exploiting gaps in an absolute doctrine.

The review then maps the report’s progression from a comparison of Britain’s situation in 1903 and 1931, through the principles of international trade, to criticism of particular protectionist arguments. Haberler singles out the chapters on unemployment and international equilibrium, especially the examination of Keynes’s proposal to use tariffs instead of wage reductions. He also values the report’s attention to administration, identifying Plant and Benham’s treatment of tariff making and Hicks’s discussion of quotas and import boards. Its relevance thus extends from theoretical mechanisms to the practical construction of trade restrictions.

Britain’s departure from the gold standard supplies the review’s pivotal historical qualification. Although the report was completed before that event, its epilogue argues that the case for free trade has become stronger. Haberler explains that Keynes’s tariff proposal, conceived as an alternative to devaluation or wage reduction, has thereby lost its basis, while reserving judgment on whether it had merit originally.

The conclusion distinguishes immediate political defeat from the report’s prospective intellectual influence:

It could not turn the tide, but it will certainly much contribute toward a revival of the free-trade movement.

Published shortly before Britain adopted protection, the report could not prevent that shift. Haberler nevertheless recommends wide American circulation, judging tariff debate in the United States and continental Europe to involve cruder fallacies than the theoretical questions raised by Keynes. The review’s central contribution is its account of how free trade should be defended: through explicit concessions, careful assessment of exceptional cases, and attention to changing monetary circumstances.