출처: J. M. Keynes, Collected Writings, vol. 20: Activities 1929-31
본래 출처: The New Statesman and Nation, 28 March, 4 and 11 April 1931
pp. 498-505:
After reading the correspondence columns of The New Statesman for 21 March, Keynes proposed to Kingsley Martin that, rather than reply to individual letters, he write a series of short articles on specific points, often raised by more than one contributor. He asked Martin to reply by Monday morning, as that was the only day he had time for writing the first piece. It and two successors appeared in the course of the next three weeks.
From The New Statesman and Nation, 28 March, 4 and 11 April 1931
* * *
Economic Notes on Free Trade
I. The export industries
The correspondence columns of The New Statesman and Nation indicates a tremendous reawakened interest in the question of tariffs. The comments on my article proposing a revenue tariff have opened up such wide range of problems that I cannot deal with them all at once. But I will do my best to give my frank opinion about the more important in some separate notes. I must not be accused of being a spoil-sport if I admit that there is much to be said on both sides. I have reached my own conclusions as the result of continuous reflection over many months, without enthusiasm, and as the result of the gradual elimination of the practicable alternatives as being even more undesirable. Nor do I suppose for one moment that a revenue tariff by itself will see us out of our troubles. Indeed, I mainly support it because it will give us a margin of resources and a breathing space, under cover of which we can do other things.
I begin this week with one of the weakest points of a tariffㅡits effect on the export industries. Mr E.D. Simon called attention in last week's ^New Statesman and Nation^ to the great decline in our exports, and asked me whether I have forgotten these trades and what a tariff would do for them. I think that the answer is clearly that which he himself suggest, namely, that a general tariff cannot be expected to give any direct benefit to our exports and will probably tend to increase manufacturing costs rather than otherwise, though I should expect this increase to be small and almost negligible compared with the other factors of cost. I find, however, a balance of advantage in the fact that industries which compete with imports would be benefited altogether out of proportion to the effect on export industries, and that the international influence of this country would be increased for promoting other measures which might help the export industries. I would put it like this. I believe that it would be of great advantage to the international equilibrium of this country if we could increase our favourable balance of trade by, say, ￡3[? or 5]0,000,000; and that it will be much easier to do this by checking imports to this amount than by increasing exports.
For how are we to increase our exports? Mr Simon tells us that he would have to reduce his wages by 20% in order to be on level terms with Germany, and I have no doubt that he is right. Has he any prospect of doing this? If he could, does he feel sure that Germany would not reply with a further reduction of her wages, seeing that we have bound her by treaty under dire penalties to compete successfully with ourselves and (in effect), however much we reduce our wage, to reduce hers by more? Does he expect that the free trade Budget, outlined in this week's ^Economist^, including taxes on beer, tobacco, tea and sugar, and 3d. per week extra insurance contributions, will predispose his workpeople to accept in addition a cut of 20% in their wages?
I do not see much positive hope for our exports along these lines. Indeed, I doubt if there is anything material which we can do for them directly, unless it be by subsidies, in the present state of world trade. A revival of world trade is their only hope. It will come in time. When it comes, we shall have a true measure of the magnitude of the permanent problem confronting us, if we are to maintain a sufficient volume of exports. Meanwhile, the best we can do is to strengthen the financial position and prestige of London, so as to restore to us our full weight of influence in propounding plans for international co-operation. This brings me back to the revenue tariff, which would, in my belief, contribute to this end.
If I knew of a concrete, practicable proposal for stimulating our export trades, I should welcome it. Knowing none, I fall back on a restriction of imports to support our balance of trade and to provide employment. Moreover, even if we were to agree that we cannot recover a sufficient volume of exports without a large cut in wages, what exactly one is to do about it I do not know. I which that someone, who relies on this alternative, would tell me.
Free traders have been long accustomed to use as an argument against a tariff its effect on the cost of living. In ordinary times there is no purpose, quite the contrary, in raising prices. But before making this objection in present circumstances, we must be quite sure that it is properly applicable today and is not just parrot talk from the past.
It is generally admitted that the root of our present troubles is to found in the disparity between costs and prices, with the result that output cannot be sold, or men employed, at a profit. Does any sensible person believe that there can be a remedy which does not either diminish costs or raise prices? If so, it is not in itself an objection to a proposal that it does the one or the other. If our desire is to further the interests of the working class, we must compare the consequences of one kind of remedy with the consequences of another.
When ^The Economist^ complains against a revenue tariff that it will increase the cost of living of the working classes, I know that these are crocodile's tears. For in the same breath they propose alternative means of raising the same amount of revenue by taxes on beer, tobacco, sugar and tea, and demand a reduction of 10 to 15% in the level of wages. Several, however, of the correspondents to ^The New Statesman and Nation^ have not provided in their letters sufficient evidence to permit of a diagnosis. For example, would Mr Ramsay Muir deplore a rise in world prices? Is he opposed to all indirect taxes on articles of working-class consumption? Is he hostile to every reduction of wages, such as the railwaymen have just suffered? If not, it is a question, not of discussing a particular proposal in isolation, but of making comparisons.
Obviously a rise in world prices or a reduction of British wages would, if we could get them, be much better than a tariff for our export industries. But this belongs to a different branch of the argument and must be treated as such. If we are to take as our test the effect on working-class standards, my proposals of a revenue tariff comes out very favourably, I maintain, as compared with the alternatives. It exact effect greatly depends, of course, upon whether or not it includes taxes on imported food. My proposal, which include such taxes, would be most unlikely, in my estimation, to raise the cost of living by so much as 2%, and if food taxes were left out and the tariff were to apply only to manufactured and semi-manufactured goods, it would be unlikely to raise it by so much as 1%. I consider these effects to be no greater than those of other indirect taxes and negligible compared with wage reductions. In former controversies the comparison was between a tariff and an increase of direct taxation, whilst wage reductions were not in question. Today it is different. If the other advantages which I claim for a revenue tariffㅡits favourable effects on employment, on business confidence, on the balance of trade and on the Budgetㅡare well founded, then its reaction on working-class standards, so far from being objectionable, can be claimed as a further advantage, because it is so small compared with those of the alternatives.
I appeal for a reconsideration of the whole matter with a fresh head, and a clear one. It is easy to go on repeating what one has been accustomed to repeat, unaccompanied by any new process of cerebration. Yet the conditions of the problem are so different from what they used to be that one hasㅡat least, so I have foundㅡto think it out all over again with a new apparatus of thought. For never before have we had to consider what it is best to do in face of an enduring and a large-scale disequilibrium. We have generally been concerned, not with the problem of how to get out of a very tight place, but with what will be the best long-run policy ^assuming conditions of equilibrium^. May I also register a mild complaint against the undercurrent of moral reprobation which I detect in some quarter? I seem to see the elder parrots sitting round and saying: 'You can ^rely^ upon us. Every day for thirty years, regardless of the weather, we have said "What a lovely morning!" But this is a bad bird. He says one thing one day, and something else the next.'
The course of the present controversy seems to indicate that a large proportion of free traders hold their faith, not as the outcome of a nice balancing of advantages against disadvantages, but believing it to be an obvious inference from a simple truth. If you keep out an import, the 'since imports and exports pay for one another' it follows mathematicallyㅡso it is believedㅡthat you will lose an export after an interval of time so short as not to matter. This doctrine has even been supported by high authority. It has appeared, in one form or another, in several communications to ^The New Statesman and Nation^; Professor Robbins, though he would not, I imagine, go the whole hog, has lent colour to it in an article published in ^Economica^(February 1931, pp. 54, 55) where, under the designation of 'the ^pons asinorum^ of international trade theory^ he employs an argument against a tariff as a means of increasing employment which would apply equally against a reduction of wages or an increase of efficiency; and Sir William Beveridge, in ^The Times^ newspaper,[5] has produced the doctrine in its full purity, asserting that it makes no difference to employment in this country whether I buy an American car or a British car, or whether our costs of manufacturing iron and steel are reduced to a competitive basis with foreign costs. No, not quite in it full purity! For Sir William's credulity falters at a critical point; whilst he believes that a reduction in our imports would cause a reduction in our exports, he does ^not^ believe that an increase in our imports would cause an increase in our exports.
Now, if all this were trueㅡif a reduction of imports causes almost at once a more or less equal reduction of exportsㅡobviously a tariff (and many other things) would be completely futile for the purposes of augmenting employment or of increasing the balance of trade in our favour. But, of course, it is not true! To believe it is to fly in the face of common sense and of experience, and cannot be supported by argument. It would only be true in a hypothetical economic system possessing such an inherent capacity for stable equilibrium, that not only were both the initial and the final positions in equilibrium, but the elasticity of the system was such that any disturbance was responded to so immediately that the system was incapable of ever departing appreciably from equilibrium. At any rate, I am sure that the assumptions required for the conclusion are far remote from contemporary facts; and in the proof along these lines, that a tariff cannot diminish unemployment, one of the inappropriate assumptions which has tacitly slipped in is, I suggest, that there is no unemployment to diminish! Nor does it help to make the qualification that exports, though not necessarily diminished at once, will be diminished sooner or later. The ultimate effect of keeping out particular imports may be, sooner or later, to increase other imports.
On the contrary, whilst the position of every element in the economic system is, in a sense, dependent on that of every other, there is not, according to my view of the subject, any direct and simple relationship between the volume of exports and the volume of imports. A change in imports, due to the interposition of a new factor such as a tariff, set up a series of complex reactions on the economic body, which are likely, indeed, before they have completely worked themselves out, to have ^some^ effect on almost every factor in the situation. But the nature of this effect depends profoundly (amongst other things) ^upon whether the initial position was one of equilibrium^. Let me indicate briefly, by an example, the sort of considerations of which one has to take account. If our imports are reduced by a tariff or in some other way, in the first instance the Bank of England has a choice between importing more gold or lowering the Bank rate. In so far as it imports more gold, the countries losing the gold may or may not counteract their domestic credit. In so far as it lowers it Bank rate, this may be expected to cause us immediately to lend more abroad (or to borrow less) and to expand credit at home. The expansion of credit at home may be expected to cause us both to import more and to increase our own output. How far an increase in our output will involve an increase in the price of this output, will depend upon whether we have a surplus capacity for production and upon for far this surplus capacity can be brought into use at approximately the same money rate of remuneration per unit of efficiency as the productive plant and labour already in use. In so far, however, as the surplus capacity can only be brought into employment at the expense of an increased cost per unit, this will apply equally to many other remedies for unemployment, and will not be a peculiarity of the case, where the initial impulse comes from a tariff. What the net effect of all this will be on the value of our exports, as compared with the effect of alternative remedies for unemployment, cannot be answered merely on ^a priori^ considerations, but must be determined by applying a sound theoretical apparatus to a knowledge of many current facts, and an estimation by the practical judgement of the probabilities suggested by this application. I can imagine cases where the final result would be actually to ^increase^ our exports and other cases where I should expect exports to be decreased. In any case, it could only be by an improbable and extraordinary coincidence that the net effect on the value of our exports would be ^equal^ to the change in the value of our imports. In the present instance, I believe that there is an opportunity for a tariff to produce a net favourable effect on employment; firstly, because the Bank of England is having to exert pressure by maintaining a rate of discount artificially, indeed unprecedentedly, high relatively to the rates in France and the United States, and has been more or less in this position for a considerable time past, in order to prevent us from lending too much abroad, so that a relaxation of the pressure on the foreign exchanges might be expected to increase forthwith our foreign lending; and secondly, because we have a large surplus capacity of men and plant, so that a substantial increase of output for use at home might be possible without reaction on the price of our exports which might be expected if we had no surplus capacity.
Perhaps controversy with one's friends and colleagues is an essentially barren thing. But I come to the end of my attempt to deal with the controversy which I have provoked in the pages of ^The New Statesman and Nation^ with an unusually arid flavour in my mouth. There is a great deal to be said on both sides about this tariff question. It is a difficult decision. But in this discussion we have not been reaching more than the fringe of what are for me the real problems. A Professor Bellerby pointed out in his letter last week, my critics have not taken any notice of, or shown the slightest interest in, the analysis of our present state, which occupied most of my original article and led up to my tariff proposal in the last paragraph. Is it the fault of the ^odium theologicum^ attaching to free trade? Is it that economics is a queer subject or i a queer state? Whatever may be the reason, new paths of thought have no appeal to the fundamentalists of free trade. They have been forcing me to chew over again a lot of stale mutton, dragging me along a route I have known all about as long as I have known anything, which cannot, as I have discovered by many attempts, lead one to a solution of our present difficultiesㅡa peregrination of catacombs with a guttering candle.
I begin this week with one of the weakest points of a tariffㅡits effect on the export industries. Mr E.D. Simon called attention in last week's ^New Statesman and Nation^ to the great decline in our exports, and asked me whether I have forgotten these trades and what a tariff would do for them. I think that the answer is clearly that which he himself suggest, namely, that a general tariff cannot be expected to give any direct benefit to our exports and will probably tend to increase manufacturing costs rather than otherwise, though I should expect this increase to be small and almost negligible compared with the other factors of cost. I find, however, a balance of advantage in the fact that industries which compete with imports would be benefited altogether out of proportion to the effect on export industries, and that the international influence of this country would be increased for promoting other measures which might help the export industries. I would put it like this. I believe that it would be of great advantage to the international equilibrium of this country if we could increase our favourable balance of trade by, say, ￡3[? or 5]0,000,000; and that it will be much easier to do this by checking imports to this amount than by increasing exports.
For how are we to increase our exports? Mr Simon tells us that he would have to reduce his wages by 20% in order to be on level terms with Germany, and I have no doubt that he is right. Has he any prospect of doing this? If he could, does he feel sure that Germany would not reply with a further reduction of her wages, seeing that we have bound her by treaty under dire penalties to compete successfully with ourselves and (in effect), however much we reduce our wage, to reduce hers by more? Does he expect that the free trade Budget, outlined in this week's ^Economist^, including taxes on beer, tobacco, tea and sugar, and 3d. per week extra insurance contributions, will predispose his workpeople to accept in addition a cut of 20% in their wages?
I do not see much positive hope for our exports along these lines. Indeed, I doubt if there is anything material which we can do for them directly, unless it be by subsidies, in the present state of world trade. A revival of world trade is their only hope. It will come in time. When it comes, we shall have a true measure of the magnitude of the permanent problem confronting us, if we are to maintain a sufficient volume of exports. Meanwhile, the best we can do is to strengthen the financial position and prestige of London, so as to restore to us our full weight of influence in propounding plans for international co-operation. This brings me back to the revenue tariff, which would, in my belief, contribute to this end.
If I knew of a concrete, practicable proposal for stimulating our export trades, I should welcome it. Knowing none, I fall back on a restriction of imports to support our balance of trade and to provide employment. Moreover, even if we were to agree that we cannot recover a sufficient volume of exports without a large cut in wages, what exactly one is to do about it I do not know. I which that someone, who relies on this alternative, would tell me.
II. A revenue tariff and the cost of living
Free traders have been long accustomed to use as an argument against a tariff its effect on the cost of living. In ordinary times there is no purpose, quite the contrary, in raising prices. But before making this objection in present circumstances, we must be quite sure that it is properly applicable today and is not just parrot talk from the past.
It is generally admitted that the root of our present troubles is to found in the disparity between costs and prices, with the result that output cannot be sold, or men employed, at a profit. Does any sensible person believe that there can be a remedy which does not either diminish costs or raise prices? If so, it is not in itself an objection to a proposal that it does the one or the other. If our desire is to further the interests of the working class, we must compare the consequences of one kind of remedy with the consequences of another.
When ^The Economist^ complains against a revenue tariff that it will increase the cost of living of the working classes, I know that these are crocodile's tears. For in the same breath they propose alternative means of raising the same amount of revenue by taxes on beer, tobacco, sugar and tea, and demand a reduction of 10 to 15% in the level of wages. Several, however, of the correspondents to ^The New Statesman and Nation^ have not provided in their letters sufficient evidence to permit of a diagnosis. For example, would Mr Ramsay Muir deplore a rise in world prices? Is he opposed to all indirect taxes on articles of working-class consumption? Is he hostile to every reduction of wages, such as the railwaymen have just suffered? If not, it is a question, not of discussing a particular proposal in isolation, but of making comparisons.
Obviously a rise in world prices or a reduction of British wages would, if we could get them, be much better than a tariff for our export industries. But this belongs to a different branch of the argument and must be treated as such. If we are to take as our test the effect on working-class standards, my proposals of a revenue tariff comes out very favourably, I maintain, as compared with the alternatives. It exact effect greatly depends, of course, upon whether or not it includes taxes on imported food. My proposal, which include such taxes, would be most unlikely, in my estimation, to raise the cost of living by so much as 2%, and if food taxes were left out and the tariff were to apply only to manufactured and semi-manufactured goods, it would be unlikely to raise it by so much as 1%. I consider these effects to be no greater than those of other indirect taxes and negligible compared with wage reductions. In former controversies the comparison was between a tariff and an increase of direct taxation, whilst wage reductions were not in question. Today it is different. If the other advantages which I claim for a revenue tariffㅡits favourable effects on employment, on business confidence, on the balance of trade and on the Budgetㅡare well founded, then its reaction on working-class standards, so far from being objectionable, can be claimed as a further advantage, because it is so small compared with those of the alternatives.
I appeal for a reconsideration of the whole matter with a fresh head, and a clear one. It is easy to go on repeating what one has been accustomed to repeat, unaccompanied by any new process of cerebration. Yet the conditions of the problem are so different from what they used to be that one hasㅡat least, so I have foundㅡto think it out all over again with a new apparatus of thought. For never before have we had to consider what it is best to do in face of an enduring and a large-scale disequilibrium. We have generally been concerned, not with the problem of how to get out of a very tight place, but with what will be the best long-run policy ^assuming conditions of equilibrium^. May I also register a mild complaint against the undercurrent of moral reprobation which I detect in some quarter? I seem to see the elder parrots sitting round and saying: 'You can ^rely^ upon us. Every day for thirty years, regardless of the weather, we have said "What a lovely morning!" But this is a bad bird. He says one thing one day, and something else the next.'
III. The reaction of imports on exports
The course of the present controversy seems to indicate that a large proportion of free traders hold their faith, not as the outcome of a nice balancing of advantages against disadvantages, but believing it to be an obvious inference from a simple truth. If you keep out an import, the 'since imports and exports pay for one another' it follows mathematicallyㅡso it is believedㅡthat you will lose an export after an interval of time so short as not to matter. This doctrine has even been supported by high authority. It has appeared, in one form or another, in several communications to ^The New Statesman and Nation^; Professor Robbins, though he would not, I imagine, go the whole hog, has lent colour to it in an article published in ^Economica^(February 1931, pp. 54, 55) where, under the designation of 'the ^pons asinorum^ of international trade theory^ he employs an argument against a tariff as a means of increasing employment which would apply equally against a reduction of wages or an increase of efficiency; and Sir William Beveridge, in ^The Times^ newspaper,[5] has produced the doctrine in its full purity, asserting that it makes no difference to employment in this country whether I buy an American car or a British car, or whether our costs of manufacturing iron and steel are reduced to a competitive basis with foreign costs. No, not quite in it full purity! For Sir William's credulity falters at a critical point; whilst he believes that a reduction in our imports would cause a reduction in our exports, he does ^not^ believe that an increase in our imports would cause an increase in our exports.
Now, if all this were trueㅡif a reduction of imports causes almost at once a more or less equal reduction of exportsㅡobviously a tariff (and many other things) would be completely futile for the purposes of augmenting employment or of increasing the balance of trade in our favour. But, of course, it is not true! To believe it is to fly in the face of common sense and of experience, and cannot be supported by argument. It would only be true in a hypothetical economic system possessing such an inherent capacity for stable equilibrium, that not only were both the initial and the final positions in equilibrium, but the elasticity of the system was such that any disturbance was responded to so immediately that the system was incapable of ever departing appreciably from equilibrium. At any rate, I am sure that the assumptions required for the conclusion are far remote from contemporary facts; and in the proof along these lines, that a tariff cannot diminish unemployment, one of the inappropriate assumptions which has tacitly slipped in is, I suggest, that there is no unemployment to diminish! Nor does it help to make the qualification that exports, though not necessarily diminished at once, will be diminished sooner or later. The ultimate effect of keeping out particular imports may be, sooner or later, to increase other imports.
On the contrary, whilst the position of every element in the economic system is, in a sense, dependent on that of every other, there is not, according to my view of the subject, any direct and simple relationship between the volume of exports and the volume of imports. A change in imports, due to the interposition of a new factor such as a tariff, set up a series of complex reactions on the economic body, which are likely, indeed, before they have completely worked themselves out, to have ^some^ effect on almost every factor in the situation. But the nature of this effect depends profoundly (amongst other things) ^upon whether the initial position was one of equilibrium^. Let me indicate briefly, by an example, the sort of considerations of which one has to take account. If our imports are reduced by a tariff or in some other way, in the first instance the Bank of England has a choice between importing more gold or lowering the Bank rate. In so far as it imports more gold, the countries losing the gold may or may not counteract their domestic credit. In so far as it lowers it Bank rate, this may be expected to cause us immediately to lend more abroad (or to borrow less) and to expand credit at home. The expansion of credit at home may be expected to cause us both to import more and to increase our own output. How far an increase in our output will involve an increase in the price of this output, will depend upon whether we have a surplus capacity for production and upon for far this surplus capacity can be brought into use at approximately the same money rate of remuneration per unit of efficiency as the productive plant and labour already in use. In so far, however, as the surplus capacity can only be brought into employment at the expense of an increased cost per unit, this will apply equally to many other remedies for unemployment, and will not be a peculiarity of the case, where the initial impulse comes from a tariff. What the net effect of all this will be on the value of our exports, as compared with the effect of alternative remedies for unemployment, cannot be answered merely on ^a priori^ considerations, but must be determined by applying a sound theoretical apparatus to a knowledge of many current facts, and an estimation by the practical judgement of the probabilities suggested by this application. I can imagine cases where the final result would be actually to ^increase^ our exports and other cases where I should expect exports to be decreased. In any case, it could only be by an improbable and extraordinary coincidence that the net effect on the value of our exports would be ^equal^ to the change in the value of our imports. In the present instance, I believe that there is an opportunity for a tariff to produce a net favourable effect on employment; firstly, because the Bank of England is having to exert pressure by maintaining a rate of discount artificially, indeed unprecedentedly, high relatively to the rates in France and the United States, and has been more or less in this position for a considerable time past, in order to prevent us from lending too much abroad, so that a relaxation of the pressure on the foreign exchanges might be expected to increase forthwith our foreign lending; and secondly, because we have a large surplus capacity of men and plant, so that a substantial increase of output for use at home might be possible without reaction on the price of our exports which might be expected if we had no surplus capacity.
Perhaps controversy with one's friends and colleagues is an essentially barren thing. But I come to the end of my attempt to deal with the controversy which I have provoked in the pages of ^The New Statesman and Nation^ with an unusually arid flavour in my mouth. There is a great deal to be said on both sides about this tariff question. It is a difficult decision. But in this discussion we have not been reaching more than the fringe of what are for me the real problems. A Professor Bellerby pointed out in his letter last week, my critics have not taken any notice of, or shown the slightest interest in, the analysis of our present state, which occupied most of my original article and led up to my tariff proposal in the last paragraph. Is it the fault of the ^odium theologicum^ attaching to free trade? Is it that economics is a queer subject or i a queer state? Whatever may be the reason, new paths of thought have no appeal to the fundamentalists of free trade. They have been forcing me to chew over again a lot of stale mutton, dragging me along a route I have known all about as long as I have known anything, which cannot, as I have discovered by many attempts, lead one to a solution of our present difficultiesㅡa peregrination of catacombs with a guttering candle.
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