ABSTRACT
§ 1. There is no ground for a separate law of exchange for international trade, or for a special law of incidence of taxes upon imports. Political areas are not economic areas.—§ 2. Even were two nations isolated so far as direct flow of capital and labour is concerned, an import tax will lie upon surplus incomes in the exporting or the importing nations, irrespective of political area. It cannot normally be used merely to tax the foreigner. —§ 3. Only where rent of land or other surplus is a normal expense of production can any part of an import duty fall on the foreigner. The proportion of a wheat tax borne by the producer will be very small. —§ 4. Such slight contribution by the foreigner is more than offset, where the duty is protective, by the injury done to the taxing country by protection. It can only take foreign surplus which foreign governments have failed to take. —§ 5. Protective duties reduce the aggregate wealth not merely of the world but of the protecting country. They also reduce the share of this reduced aggregate taken by the workers in wages, enhancing the proportion of ‘surplus.’
