Essays in Liberalism - Being the Lectures and Papers Which Were Delivered at the - Liberal Summer School at Oxford, 1922 by Various
page 70 of 207 (33%)
page 70 of 207 (33%)
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chimerical. A tariff that is on even for one year and may be off the
next is itself as disturbing a factor in industry as any exchange fluctuations can be. Nor is there, in the nature of things, any possibility of continuous advantage in trade to any country through the low valuation of its currency. The Prime Minister confesses that Germany is _not_ obtaining any export trade as the result of the fall. Then the whole argument has been and is a false pretence. The plea that the German manufacturer is advantaged because his wages bill does not rise as fast as the mark falls in purchasing power is even in theory but a statement of one side of a fluctuating case, seeing that when the mark rises in value his wages bill will not fall as fast as the mark rises, and he is then, in the terms of the case, at a competitive disadvantage. But the worst absurdity of all in the tariffist reasoning on this topic is the assumption that in no other respect than wage-rates is German industry affected by the fall of the mark. The wiseacres who point warningly to the exchanges as a reason for firm action on fabric gloves never ask how a falling currency relates to the process of purchasing raw materials from abroad. So plainly is the falling mark a bar to such purchase that there is _prima facie_ no cause to doubt the German official statement made in June, that foreign goods are actually underbidding German goods in the German markets, and that the falling exchange makes it harder and harder for Germany to compete abroad. We are dealing with a four-square fallacy, the logical implication of which is that a bankrupt country is the best advantaged for trade, that Austria is even better placed for competition than Germany, and that Russia is to-day the best placed of all. |
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