Von Thunen Tariff and Miscellaneous

Johann Heinrich von Thünen;Tariff, and Miscellaneous

Von Thunen Theory

Like Adam Smith, von Thunen was on the whole a strong believer in free trade as a general proposition. He believed that tariff restrictions reduce the material wealth of both the strong manufacturing nation and the weaker producer of raw materials. This theorem he deduced by assuming his isolated state to be divided into two, following with an application of his deductions to the actualities. Such would be the gist of his idea as drawn from the first volume.

Later, however, his thought appears to have undergone some modification, for in the second part of the second volume his conclusion is not so simple, though not changed as to general tendency. It may be conjectured as a strong probability that an acquaintance with List's writings was the occasion for this development. Von Thunen contrasts national and cosmopolitan points of view: the one considers relative strength, the other absolute; the one seeks the strength of the nation, the other the material well-being of the people. Under existing conditions, the former point of view may be a necessity. He inclines to hold that free trade cannot be preached as an absolute good. And, as he says: "So Adam Smith in defending free trade generally held the cosmopolitan standpoint; but there are places in his work which take a national standpoint, and consequently both opponents and followers can find support for their views." Von Thunen's reasoning differed somewhat from List's in that he considered both agriculture and manufactures, though chiefly the former; while List's argument proceeded largely on the basis of manufactures.

The assumption that each individual knows his own inter­est, and acts accordingly, is specifically made; and, moreover, some evidence of a tendency to believe optimistically in an economic harmony appears, for he says: "As from the interac­tion of all, each striving for his own rightly understood ad­vantage, the law according to which the community acts, arises, so on the other hand must the advantage of the individ­uals be comprised in the observance of these laws."

Moreover, there is apparent a tendency to regard the laws of society as being the outcome of a divine plan, for "man is the tool in the hand of a higher power " unconsciously working
out His great ends.