{"collection":"philosophy-ethics","full_text_available":true,"graph_url":"https://unchartedknowledge.5gfusion.net/v2/api/page/gutenberg_29881/graph","html_url":"https://unchartedknowledge.5gfusion.net/v2/page/gutenberg_29881","id":"gutenberg_29881","license":"Public Domain (US)","rights_basis":"gutenberg_metadata_copyright_false","source":"gutenberg","source_url":"https://www.gutenberg.org/ebooks/29881","summary":null,"tags":["Category: Economics","Category: Philosophy & Ethics","Category: Politics","International cooperation","Reconstruction (1914-1939)"],"text":"Produced by The Online Distributed Proofreading Team at\nhttp://www.pgdp.net (This file was produced from images\ngenerously made available by The Internet Archive/American\nLibraries.)\n\n\n\n\n\n\nTHE MORALS OF\nECONOMIC\nINTERNATIONALISM\n\n\n\nBy\n\nJ. A. HOBSON\n\nAUTHOR OF \"THE INDUSTRIAL SYSTEM,\" \"THE EVOLUTION\nOF MODERN CAPITALISM,\" \"WORK AND WEALTH,\" ETC.\n\n\n\nBOSTON AND NEW YORK\nHOUGHTON MIFFLIN COMPANY\nThe Riverside Press Cambridge\n1920\n\nCOPYRIGHT, 1920, BY THE REGENTS OF THE\nUNIVERSITY OF CALIFORNIA\n\nALL RIGHTS RESERVED\n\n\n\n\nBARBARA WEINSTOCK\nLECTURES ON THE MORALS\nOF TRADE\n\nThis series will contain essays by representative scholars and men of\naffairs dealing with the various phases of the moral law in its bearing\non business life under the new economic order, first delivered at the\nUniversity of California on the Weinstock foundation.\n\n\n\n\nTHE MORALS OF\nECONOMIC\nINTERNATIONALISM\n\n\nIt ought not to be the case that there is one standard of morality for\nindividuals in their relations with one another, a different and a\nslighter standard for corporations, and a third and still slighter\nstandard for nations. For, after all, what are corporations but\ngroupings of individuals for ends which in the last resort are personal\nends? And what are nations but wider, closer, and more lasting unions\nof persons for the attainment of the end they have in common, i.e., the\ncommonwealth. Yet we are well aware that the accepted and operative\nstandards of morality differ widely in the three spheres of conduct. If\na soul is imputed at all to a corporation, it is a leather soul, not\neasily penetrable to the probings of pity or compunction, and emitting\nmuch less of the milk of human kindness than do the separate souls of\nits directors and stockholders in their ordinary human relations. There\nis a sharp recognition of this inferior moral make-up of a corporation\nin the attitude of ordinary men and women, who, scrupulously honest in\ntheir dealings with one another, slide almost unconsciously to an\naltogether lower level in dealing with a railroad or insurance company.\nThis attitude is due, no doubt, partly to a resentment of the\noppressive power which great corporations are believed to exercise,\nevoking a desire \"to get a bit of your own back\"; partly to a feeling\nthat any slight injury to, or even fraud perpetrated on, a corporation\nwill be so distributed as to inflict no appreciable harm on any\nindividual stockholder. But largely it is the result of a failure to\nenvisage a corporation as a moral being at all, to whom one owes\nobligations. Corporations are in a sense moral monsters; we say they\nbehave as such and we are disposed to treat them as such.\n\nThe standard of international morality, particularly in matters of\ncommercial intercourse, is on a still lower level. If, indeed, one were\nto press the theoretic issue, whether a state or a nation is a morally\nindependent being, or whether it is in some sense or degree a member of\nwhat may be called an incipient society of states or nations, nearly\nevery one would sustain the latter view. We should be reminded that\nthere was such a thing as international law, however imperfect its\nsanctions might be, and that treaties, alliances, and other agreements\nbetween nations implied the recognition of some moral obligation. How\nweak this interstate morality is appears not merely from the fact that\nunder strong temptation governments repudiate their most express and\nsolemn agreements--to that temptation individuals sometimes yield in\ntheir dealings with one another--but also from the nature of the\ndefence which they make of such repudiation. The plea of state\nnecessity, which Germany made for the violation of the neutrality of\nBelgium, and which was stretched to cover the brutal mishandling of the\nBelgian people, is unfortunately but an extreme instance of conduct to\nwhich every state has had recourse at times, and--still more\nsignificant--which every state defends by adducing the same maxim,\n\"_salus reipublicae suprema lex_\".\n\nHere is the sharpest distinction between individual and national\nmorality. There are certain deeds which a good and honorable man would\nnot do even to save his life; there are no deeds, which it is admitted\nthat a statesman, acting on behalf of his country, may not do to save\nthat country. It is foolish to try to shirk this disconcerting\nadmission. The Machiavellian doctrine of \"reason of state\" is, in the\nlast resort, the accepted standard of national conduct. This does not\nsignify that a nation and its government admit no obligation to fulfil\ntheir promises, or even voluntarily to perform good offices for other\nnations, but that there is always implied the reservation that the\nnecessity, or, shall we say, the vital interests, of the nation\noverride, cancel, and nullify all such obligations. And when\n\"necessity\" is stretched to cover any vital interest or urgent need, it\nis easy to recognize on what a slippery slope such international\nmorality reposes.\n\nInternational morality is impaired, however, not only by this feeble\nsense of mutual obligation, but by the still more injurious assumption\nof conflicting interests between nations. Nations are represented not\nmerely as self-centered, independent moral systems, but as, in some\ndegree, mutually repellent systems. This notion is partly the product\nof the false patriotic teaching of our schools and press, which seek to\nfeed our sense of national unity more upon exclusive than inclusive\nsentiments. Nations are represented as rivals and competitors in some\nstruggle for power, or greatness, or prestige, instead of as\ncooeperators in the general advance of civilization. This presumption\nof opposing interests is, of course, more strongly marked in the\npresentation of commercial relations than in any other. Putting the\nissue roughly, but with substantial truth, the generally accepted image\nof international trade is one in which a number of trading communities,\nas, for instance, the United States, Britain, Germany, France, Japan,\netc., are engaged in striving, each to win for itself, and at the\nexpense of the others, the largest possible share of a strictly limited\nobjective--the world market.\n\nNow there are three fatal flaws in this image. First comes the false\npresentation of the United States, Britain, Germany, and other\npolitical beings in the capacity of trading firms. So far as world or\ninternational trade is rightly presented as a competitive process, that\ncompetition takes place, not between America, Britain, Germany, but\nbetween a number of separate American, British, German firms. The\nimmediate interests of these firms are not directed along political\nlines. Generally speaking, the closer rivalry is between firms\nbelonging to the same nation and conducting their business upon closely\nsimilar conditions. One Lancashire cotton exporter competes much more\nclosely with other Lancashire exporters than he does with German,\nAmerican, or Japanese exporters of similar goods. So it is everywhere,\nsave in the exceptional times and circumstances in which governments\nthemselves take over the regulation and conduct of foreign trade.\n\nFor certain purposes it is, no doubt, convenient to have balances and\nanalyses of foreign trade presented separately, so as to show the\nvolumes and values of different goods which pass from the members of\none nation to those of another. But the imputation of political\nsignificance to these statistics, taken either in aggregate or in\nrelation to separate countries, as if they were themselves indices of\npublic gain or public loss, has most injurious reactions upon the\nintelligent understanding of commerce.\n\nThe second flaw is the assumption of a limited amount of market, which\ncarries with it the assumption that the groups of traders, gathered\nunder their national flags, are engaged in a conflict in which they are\nentitled to embroil their governments. By tariff bargaining and by all\nsorts of diplomatic weapons each government is called upon to assist\nits nationals and to cripple or exclude the nationals of other states.\nNow it is untrue that the world market is strictly limited, with the\nconsequence that every advance of one group of traders is at the\nexpense of another group. The world market is indefinitely expansible,\nand is always expanding; and commercial experience shows that the rapid\nexpansion of the overseas trade of one country does not preclude the\nexpansion of trade of other countries. I do not, of course, deny that\nat a particular time and in relation to some particular lucrative\nopportunity, genuine clashes of interests may arise. But, envisaging\nthe whole range of foreign commerce, one feels that the image of it as\na prize which governments can, and ought to win for their traders at\nthe expense of the traders supported by other governments, has been a\nmost fertile source of international misunderstanding.\n\nPerhaps the worst of the three fallacies, and in a sense the\ndeepest-rooted, is the concept of export trade as of more value than\nimport trade. This is often traced back to the time when governments\ndeemed it desirable to accumulate in their countries treasures of gold\nand silver and to this end encouraged the sale of goods abroad and\ndiscouraged the payment for them in foreign goods. There are, however,\nmodern supporters of the assumption that it is more important to sell\nthan to buy, although the money received for sales has no other\nsignificance or value than its power to buy, and trade can only be\nimaged truly as an exchange of goods for goods in which the processes\nof selling and of buying are complementary.\n\nThe economic explanation of the double falsehood of dividing buying\nfrom selling and of imputing a higher value to the latter process, lies\nbeyond the scope of this address. But the injuries resulting from the\nsuperior pressure upon governments of organized bodies of producers and\nmerchants who have things to sell, to the detriment of the consuming\npublic who have only buying needs, are too grave matters to be\nneglected here. It is not too much to say that, if the interests of\nconsumers and the interests of producers weighed equally in the eyes of\ngovernments, as they should, the strongest of all obstacles to a\npeaceful, harmonious society of nations would be overcome. For the\nsuspicions, jealousies, and hostilities of nations are inspired more by\nthe tendency of groups of producers to misrepresent their private\ninterests as the good of their respective countries than by any other\nsingle circumstance.\n\nThis analysis has seemed necessary in order to clear away the\nintellectual and moral fogs which prevent a true realization of the\neconomic, and therefore the moral, interdependence of nations. For\nevery bond of economic interest involves moral obligation also. If it\nis true that the fabric of commercial relations is all the time being\nknit closer between the different peoples of the earth, then the moral\nisolation and the antagonism which earlier statecraft inculcated, and\nwhich still obsess so many minds, must be dissipated and give place to\nactive sentiments of human cooeperation.\n\nThere were, indeed, those who thought that already the web of commerce\nand finance had been woven strong enough to save nations from the\ncalamity of war. Their miscalculation arose from underestimating the\npower over the mind and the passions of that false image of trade. But\nbecause the modern internationalism of commerce and finance did not\nprove strong enough to stem the full and sudden tide of war passions\nfed from the barbarous traditions of a dateless past, we ought not to\ndisparage the potentiality of this internationalism as the foundation\nof a new and better world order. For, though those bonds of common\ninterest broke under the strain of war, the confusion in which we find\nourselves without them is itself a terrible testimony to their value.\nThe enforced sundering of ordinary trade relations between members of\ndifferent countries has taught two clear lessons. The first is this:\nthat hardly any civilized nation is or can be economically independent\nin respect to essential supplies or industries. There is no European\ncountry that does not rely for the subsistence of its inhabitants upon\nsupplies of goods and raw materials from foreign lands, mostly from\ncountries outside the European continent. While Britain both leaned\nmore heavily upon other countries and contributed most to other\ncountries from her surplus produce, every other country, in larger or\nless degree--great countries such as France, Germany, Austria, Italy,\nlittle ones like Belgium, Holland, Switzerland, Scandinavia, and\nDenmark--were increasingly dependent upon outside sources for their\nlivelihood. It is true that there remained a very few great backward\ncountries, such as Russia and China, where a life of economic isolation\nwas possible had they been willing to dispense with the higher products\nof civilized industry and with the fertilizing streams of capital\nwithout which progress is impossible. No civilized European country was\nself-sufficing in the vital factors of a productive and progressive\ncivilization--food, raw materials, machinery, fuel, transport, finance,\nand adequate supplies of skilled labor. The services which countries\nnear or distant rendered to one another were becoming constantly more\nnumerous, more complex, and more urgent. The obstructions and stoppages\nof war has driven home the lesson painfully to the inhabitants of every\nEuropean country, belligerent or neutral. What lesson? That we have\nerred in permitting ourselves to grow dependent on the industry,\ngoodwill, and intercourse of other nations, and that we should endeavor\nto hark back to an earlier economic state of national independence?\nWell, there are even in Britain rhetorical politicians who speak of the\nnecessity of retaining all \"key\" or \"essential\" industries within their\nnational control--who propose to reverse the tide of social evolution\nby some flimsy apparatus of tariffs and subsidies. This is impossible.\nThe war has left the European peoples, one and all, more than ever\ndependent for their economic livelihood upon one another, and upon the\nmaterial resources and labor of other continents.\n\nThe second lesson is that, other things equal, it is the most highly\ncivilized and highly developed countries that are the most dependent\nupon others. In a word, there is a presumption that economic\ninternationalism is an essential feature of civilization.\n\nYou will observe that so far I have made no mention of America. And yet\nall that I have been saying is, in a sense, introductory to the unique\nproblem presented by this country. America is the only civilized\ncountry in the world that is virtually self-sufficing as regards the\nprimary requirements of her economic life. Her soil can and does supply\nnearly all her essential foods, her natural resources include the\nmaterials of her great textile, metal, and other basic industries, the\nheat, light, electricity, and other forms of natural energy which\nsatisfy her national needs. She has access to skilled and unskilled\nlabor sufficient to develop and utilize all these natural resources.\nMost of her pre-war imports might be placed under four heads: articles\nof luxury and taste in dress, jewelry, etc.; certain chemical and other\nscientific products; supplementary supplies of some foods and\nmaterials, from other countries of the American continent, for\nmanufactures and export trade; and a number of tropical products,\nalmost all of subsidiary significance in the production and consumption\nof the American people. This slight dependence upon foreign countries\nhas been considerably reduced as the result of war exigency. The art\nproducts of France and Italy, the fine textile goods from Britain, the\ndye-stuffs, drugs, and scientific instruments from Germany--in a word,\nthe great bulk of the imports from Europe, have either been cut out of\nAmerican consumption or have been displaced, temporarily, at any rate,\nby home products. For several generations the main dependence of\nAmerica upon Europe and particularly upon Britain was for capital to\nsupplement home savings that she might make use of the stream of\nimmigrant labor in the development of her great continent. This\ndependence upon European capital, of greatly diminishing importance\nduring the last three decades has, of course, now been reversed, and\nthe principal European countries are heavy debtors to the United\nStates.\n\nOne other important economic lesson war experience has taught, viz.,\nthe vast capacity for increased productivity which every industrial\nnation possesses, and America especially, in better organization and\nfuller utilization of natural and human resources. It is evident that,\nfar from the age of great inventions and of mechanical development\ndrawing to a close, we are in the actual process of reaching new\ndiscoveries in wealth production, which will make the most famous\nadvances of the nineteenth century mean by comparison. But without\ndrawing upon a speculative future, a better and more systematic\napplication of the knowledge which has been already tested--enlarged\nproduction, elimination of waste, and improved business methods--is\nclearly capable of doubling or trebling the output of material wealth\nwithout involving any excessive strain upon human effort.\n\nHere, as in other ways, America stands in a place of unique vantage by\nreason of the magnitude and variety of her national resources, and the\nvigor and enterprise of her people.\n\nIt is evident that, if any country can afford to stand alone in full\neconomic self-sufficiency, that country is America. It is feasible for\nAmerica to contract within very narrow limits her commercial and\npolitical relations with the rest of the world, or, if she chooses, to\nconfine her commercial and financial relations to this continent,\nleaving the old world to get on by itself as well as it can. This view\nis, indeed, conformable with the main tradition of American history up\nto the close of the last century. Even the Spanish war, with its sequel\nof imperialism, was but a slight and reparable breach in this\ntradition. The world war seems at first sight to have plunged America\ndeeper into the European trough. But even this more serious committal\nis not irretrievable. She can step back to the doctrine and policy of\n'America for Americans' and refuse any organic contact with a\ntroublesome, a quarrelsome and, as it seems, a ruined Europe. America's\neconomic status in Europe is not such as to preclude her taking this\ncourse. I may be reminded that the indebtedness of Europe to America is\na solid economic bond, for it cannot be presumed that America would\npursue the policy of liberalism so far as to cancel this debt. But,\nlarge as is this credit, it need not constitute a strong or a lasting\nbond of commerce, compelling America to receive such large imports of\ngoods from Europe as materially to impair her self-sufficiency. A large\nand increasing part of the interest and capital of this indebtedness\nwould be defrayed by the expenditure of American travellers and\nresidents in Europe, while the importation of objects of art and luxury\nwould not interfere appreciably with the policy of economic\nnationalism. If America decides to go no further in this business, it\nwill not be too late to draw out.\n\nThe choice before her is momentous. So far I have presented it as an\neconomic problem. It is also quite evidently a political and moral\nproblem of the first significance, for economic national\nself-sufficiency is a phase of political independence. But business and\npolitics alike belong to the wider art of human conduct; and the choice\nbefore America is primarily a moral choice.\n\nBy saying this I do not wish to appear to prejudge the issue. I have\nalways felt that a stronger case could be made for the political and\neconomic isolation of America than for that of any other country,\npartly because, as I have said, she has within her political domain all\nthe resources of national well-being; partly, also, because it is of\nsupreme importance that the great experiment of democracy should not be\nunduly hampered by excessive inpourings of ill-assimilable foreign\nblood, and by dangerous contacts with obsolete or inapplicable European\ninstitutions. As an economist, steeped in the principles of Cobden and\nhis British school of liberals, my predilections (prejudices if you\nwill) have always been in favor of the freest possible movement, alike\nof trade and persons, and against fiscal protection and immigrant\nrestrictions. But, when confronted with the special situation of\nAmerica, I have recognized that a reasoned argument could be addressed\nto prove that the economy of national security and progress for this\ncountry lay along the lines of political, economic and defensive\nself-containedness. I am convinced that many must be led to support\nthis policy, not on grounds of selfishness, because they desire to\nconserve for America alone her great opportunities, and not mainly from\nfear, lest America should be embroiled again in the dangerous quarrels\nof distant European nations, but because they are animated by that pure\ndesire, which has inspired so many generations of high-minded\nAmericans, that American democracy should grow to its full stature by\nits own unaided efforts and save the world by its example.\n\nI wish to give due respect to the sincerity of this conviction the more\nbecause I wish to lay before you some grounds for questioning its\nultimate validity. It is no problem of abstract politics or ethics with\nwhich I here confront your minds, but one of concrete and immediate\nurgency. Distinctively economic in its substance, it brings right into\nthe daylight the hitherto obscure issue of the duty of nations as\nmembers of an actual or potential society of nations. As a result of\nthe destruction of war a large part of Europe lies today in economic\nruin. By that I do not only, or chiefly, refer to the material havoc\nwrought by the direct operations of war in France, Belgium, Poland,\nServia, and elsewhere. I mean the imminent starvation which this winter\nawaits large populations of those and other countries, both our allies\nand our late enemies, and the misery and anarchy arising from their\nutter inability to resume the ordinary processes of productive\nindustry. It is not only food and clothing but raw materials, tools,\nmachinery, transport, and fuel that are lacking over a large part of\nthe European continent. If they are left to their own unaided\nresources, millions of these people, especially in Russia, Poland,\nAustria, and sections of the late Turkish Empire, will perish. They\ncannot feed themselves. The land remains, but large tracts of it have\nbeen untilled; large numbers of the peasantry have fallen in the war,\nor are wandering as disbanded soldiers, far from home; the women and\nthe aged and the children, underfed and broken in health and spirit,\nare utterly unequal to the task of growing the food for their\nlivelihood. The factories and workshops are idle or are ill-equipped,\nfor materials, tools, and fuel are everywhere lacking; unemployment\nholds large industrial populations in destitution and despair. Even\nwhere plant and materials are present, the physical strength of the\nworkers is so let down that efficient productivity is impossible. Even\nin countries that are not war-broken, the blockade, and the long\nstoppage of normal commerce, have caused great scarcity of many\nimportant foods and materials, and famine prices bring grievous\nsuffering to the poorer classes. Britain alone among the belligerent\ncountries is not in immediate distress, but only because she has had\nlarger outside resources and larger borrowing powers on which to draw.\nEven the few neutral nations which are said to have profited by war are\nseverely crippled by the lack of some essentials of their economic\nlife.\n\nAll in different degrees are economic victims of the havoc and the\nwaste of war. It is not Central Europe only, together with large parts\nof the Balkans, of Russia, and of Eastern Asia, that is in this evil\nplight. Europe as a whole is unprovided with the foodstuffs with which\nto feed its population and the raw materials with which to furnish\nemployment. If there were prevailing among them the best of wills and\nof cooeperative arrangements, the European peoples could not keep\nthemselves alive this winter and make any substantial advance towards\nreparation of the damage of war and industrial recovery. If human\ncooeperation is to save these weak and desperate peoples, it must be a\ncooeperation of more than the nations of Europe. Only by the better\nprovided nations of the world coming to the rescue can the\nworse-provided nations survive and recover. It would be foolish to\nmince words in so grave an issue. We are all acquainted with the main\nfacts of the world situation and are familiar with the place which\nAmerica occupies in it as the chief repository of those surpluses of\nfoods, materials, and manufactured goods which Europe needs so sorely.\nThe term 'surplus' is, of course, somewhat deceptive. Surplus depends\nlargely on home consumption, itself an elastic condition. But for\npractical purposes we may take the exportable surplus to mean the\nproduct which remains for sale abroad after the normal wants of the\nhome population are supplied. It might mean something more, viz., that\nthe home population would voluntarily keep down or reduce their\nconsumption, in order that more might be available for export. The\nAmerican people actually did exercise this self-denying ordinance to an\nappreciable extent, in order to help win the war. Are they willing to\ndo the same in order to help the world in a distress as dire as war\nitself?\n\nIt may be said, perhaps truly, that this presumes that America is in\nthe peace as much as she was in the war, that she has decided to link\nher destiny closely and lastingly with that of Europe, that she\ndefinitely accepts a proffered place as a member of the society of\nnations, and under circumstances which make an immediate call upon her\neconomic and financial resources in a manner in which there can be no\ndirect reciprocity.\n\nNow it may reasonably be urged that America is not prepared for such a\ncommittal, that such obligations as she undertook, as an associated\npower, in the conduct of the war, terminate with the making of peace;\nand that, as regards the future structure of international relations,\nshe proposes to preserve full freedom to cooeperate with other nations,\nor to stand alone, according to her estimate of each occasion.\n\nIt is here convenient to treat separately two issues which are none the\nless closely related, viz., the issue of international cooeperation for\nthe immediate work of the salvage and restoration of Europe, and the\nissue of a permanent cooeperation or agreement for the equitable use of\nthe economic resources of the world. The urgency for Europe of the\nfirst issue has been already indicated. If the weaker European nations\nare left to the ordinary play of economic laws for the supplies they\nneed, they must lapse into starvation and social anarchy. A lifting of\nthe war blockades and embargoes hardly helps them. The formal\nrestoration of free commerce is little better than a mockery to those\nwho lack the power to buy and sell. Free commerce would simply mean\nthat America's surplus, the food, materials, and manufactured goods she\nhas to sell abroad, would be purchased exclusively by those more\nprosperous foreigners who have the means to pay in money, or in export\ngoods available for credit purposes. Now the populations and the\ngovernments of these broken countries have neither money nor goods in\nhand. The return of peace has left them with depleted purses and empty\nstores. If the purchase and consumption of the available surplus of\nfoods, materials, and manufactures from America and other prosperous\ncountries is distributed according to the separate powers of purchase\nin the European countries, the countries and the classes of population\nwhich are least in need will get all, those which are most in need,\nnothing. How can it be otherwise, if immediate ability to pay is the\ncriterion? In ordinary times the machinery of international finance\ndoes tend to distribute surplus stocks according to the needs of the\ndifferent nations, for the production of the actual goods for export\ntrade with which imports are paid for, the true base of credit, is\ncontinually proceeding. But the war broke this machinery of regular\nexchange. It cannot be immediately restored. America or Argentina\ncannot sell their surplus wheat in the ordinary way to Poland, Austria,\nBelgium and other needy countries, because, largely for the very lack\nof these goods and materials, their industries are not operating, so\nthat the goods they should produce, upon which credit would be built,\nare not forthcoming.\n\nThis is one of the most terrible of the vicious circles in which the\nwar has bound the world. The weak nations cannot buy, because they are\nnot producing goods to sell; they cannot produce, because they cannot\nbuy. What are the strong nations, those with surplus goods, the\ntransport, and the credit, going to do about it? It is a question of\nemergency finance based on an emergency morality. The nations which\nhave surpluses to sell abroad must not only send the goods but provide\nthe credit to pay for them if they are to reach the peoples that need\nthem most. But how, it is said, can you expect the business man in\nAmerica or any other country to perform such an act of charity? How can\nyou expect them to sell to those who have not credit and cannot pay,\ninstead of selling to those who have credit and can pay? The answer is\nsometimes stated thus. It is not charity you are asked to perform, but\nsuch consideration for customers as a really intelligent sense of\nself-interest will endorse. We ask you to put up a temporary bridge\nover the financial chasm in order to afford time for this restoration\nof the ordinary processes of exchange. If the enfeebled industrial\npeoples can be furnished now with foods and materials they will set to\nwork, and in the course of time they will be able, out of the product\nof their industry, to repay your advances and reestablish the normal\ncircle of exchange.\n\nIn presenting this course as a policy of intelligent self-interest, I\nam not really disparaging the claims of humanity or of morals. I am\nmerely maintaining the utilitarian ethics which insist that morality,\nthe performance of human obligations, is the best policy, that policy\nwhich in the long run will yield the fullest satisfaction to social\nbeings. If I were an American exporter in control of large amounts of\nfood, it would doubtless pay me better personally at the present time\nto sell it to firms in European countries which have good credit, for\nconsumption by people who are in no great want. As an individual\nbusiness man, I could hardly do otherwise with any assurance of\nfinancial profit. I am not here presenting the issue as a matter of\nindividual morals. If the surplus of economic supplies is to be\ndistributed according to needs, on an emergency credit basis adjusted\nto that end, it is evident that this can be done only by international\ncooeperation. This shifts the moral problem from the individual to the\nnation. Rich nations, or their governments, are asked to assist poor\nnations by making an apportionment of goods and credit which the\nindividual members of the rich nations, the owners of the surplus,\nwould not make upon their own account. The edge of this issue should\nnot be blunted. If the people and government of America were only\nconcerned to let their individual citizens extort the highest prices\nthey could get for their surplus in the best markets, they would let\nCentral and Eastern Europe starve. If, however, they also take into\naccount the social, political, and economic reactions of a starving\nEurope upon the future of a world in which they will have to live as\nmembers of a world society which must grow ever closer in its physical,\neconomic, and spiritual contacts, they may decide differently. The\nissue arises in the highest economic sphere, that of finance. Are the\nnations and governments of the world sufficiently alive to the urgency\nof the situation to enter into an organization of credit for the\nemergency use of transport and for the distribution of foods and\nmaterials on a basis of proved needs? The richer nations, in proportion\nto their resources, would appear to be called upon to make a present\nsacrifice for the benefit of the poorer nations in any such pooling of\ncredit facilities. That risk of sacrifice, however, need not be great,\nand need not be felt at all by the individual members of rich nations,\nprovided that the hitherto unused resources of national credit can be\nbuilt into a strong structure of mutual support. If America were\ninvited to find adequate credits for Italian or Polish needs at the\npresent time, she might well hesitate. But if a consortium of European\ngovernments, including Britain and the richer neutrals, were joint\nguarantors of such advances, this cooeperative basis might furnish the\nnecessary confidence. It is not within my scope to discuss the various\nforms a financial consortium might take; whether America, as\nrepresentative of the creditor nations, should enter such a consortium,\nor should approach the organized credit of Europe in the capacity of a\nfriendly uncle. It must suffice here to indicate the moral test which\nthis grave issue presents to the nations regarded as economic powers.\n\nUpon the policy adopted for this emergency will doubtless depend in\nlarge measure the whole future of economic internationalism. For not\nonly does confidence grow with effective cooeperation, but upon this\npost-war cooeperation between nations for an emergency commerce and\nfinance, or its rejection, will depend not only America's future place\nin a world society but the structure of that world society in its\nessential character.\n\nFor in each great nation of the world the same great choice, the same\ngreat struggle of contending principles and policies, is taking place.\nNational self-dependence or internationalism--that is everywhere the\nissue. It is true that in no European country can that issue be so\nsharply presented as in America. For economic self-sufficiency in a\nfull sense and, therefore, political isolation, is not possible for any\nEuropean state. Even a peaceful and reviving Russia must lean upon her\nmore advanced neighbors for the economic essentials of capital and\norganizing skill. But the several nations can strive to reduce their\ninterdependence and their national aid to the narrowest dimensions, and\nwhere they cannot free themselves from extraneous alliances they can\nrestrict the area of economic dependence within a chosen circle.\nBritain, for example, could set her policy closely and consistently to\nmake her world-wide empire into a self-sufficing system, and if, as is\nlikely, she learned that even the diversified fifth of the entire globe\nwhich owns allegiance to her Crown could not satisfy all her wants, she\ncould eke out this inadequacy with some carefully selected and\npurchased friendships.\n\nThis harking back to an economic nationalism is a natural reaction of\nthe war, and is fed by a dangerous and precarious peace. Fear, greed,\nand suspicion prompt the victorious nations to guard their gains by\nreverting to a close nationalism or a ringed alliance; humiliation,\nwithout humility, the bitter pain of thwarted ambitions, resentment at\ntheir punishment, dispose the vanquished nations to keep their own\ncompany and form if possible, an economic system of their own. A\nprolonged war, followed by a bad peace, may leave this indelible scar\nupon the growing economic internationalism of the world.\n\nThe richly nourished patriotism of war breeds divisions and antagonisms\nwhich are easily exploited afterwards by political, racial, religious,\nand cultural passions, but most of all by economic interests.\n\nBefore the war internationalism was visibly advancing with every fresh\ndecade. The bonds of commercial and financial intercourse between the\npeoples of different countries were continually woven closer; the\npolicy of self-sufficiency was continually giving way before the\nsuperior economy of specialization on a basis of natural or acquired\nadvantages. Any reversal of this policy would be far costlier than may\nat present appear, even for those countries best qualified by size and\nresources to stand alone.\n\nFor it is not merely the direct sacrifice of the wider world economy of\nproduction and exchange, the advantage of a wider over a narrower area\nof free commerce, that is involved. It is the indirect perils and costs\nof the policy of close nationalism or restricted economic alliances\nthat count heaviest. For economic nationalism means protective and\ndiscriminative tariffs, and a conservation of national, imperial or\nallied resources within a circle of favored beneficiaries. This is the\ntemptation held out to the British people today by the protectionist\ninterests working upon the animosity of the war spirit and the\nsentiment of imperialism. The welding of an empire into an independent\neconomic system, the conservation of essential or key industries and\nthe safeguarding of our industries against \"dumping,\" are the\nostensible objectives of a policy whose chief driving motive and end is\nthe establishment of strong industrial, commercial and financial trusts\nand combinations, defended by tariff walls, and endowed with the\nprofits of monopoly.\n\nThere are two difficulties in such a course of action, which, though\nespecially urgent in the case of Britain, beset every great country\nthat chooses the same path, and not least, America. The first is the\nfomentation of a class war, based upon divisions of interests between\ncapital and labor, producer and consumer, protected and unprotected\nindustries. The initial skirmishes of such a conflict are already\nvisible in every country where wages, prices, and profiteering are\nburning issues. I would most earnestly appeal to thoughtful citizens in\nthis as in my own country to pause before heaping fuel on these fires.\nFor the policy of national self-sufficiency or isolation means nothing\nless than this. Not merely does it strengthen the power of capitalistic\ncombinations and thereby incite labor unions to direct action,\nblackmailing demands, and sabotage. Not merely does it let loose upon\nthe business world all sorts of ill-considered governmental\ninterferences for the fixation of prices or subsidies to consumers. It\nkeeps alive and feeds the habit and the spirit of strife. For it was no\naccident that the great international war left as its legacy smaller\ninternational class wars in European countries. Remove from a nation\nthe economic supports it formerly received from other nations, markets\nwherein to buy and sell, and you starve that nation; and starvation\nbreeds class war and anarchy. Can any one doubt this with the terrible\nexamples of Russia and Hungary before their eyes? But it is not a\nmatter of war conditions alone. Carry through a policy of economic\nnationalism, under which all the large and well-equipped nations and\nempires conserve for their exclusive uses the national resources they\ncommand, and what happens? The smaller and the poorer nations, however\nfree in the political sense, become their economic bond slaves, at the\nmercy of the master states for their foods and other necessaries of\nlife. Take the case of Austria under the new conditions, with a thick\npopulation concentrated in a great political capital suddenly deprived\nof all free access to its former sources of supply and the markets it\nused to serve. For her it is a sentence of economic strangulation. Here\nis an extreme instance of the effect of economic isolation on a weak\ncountry. But the dangerous truth may be more broadly stated. A very few\ngreat empires and nations today control the whole available supplies of\nmany of the foods, fabrics, and metals, the shipping and finance, that\nare essential to the livelihood and progress of every civilized people.\nAre Britain, America, France, and Japan--and especially the two\ngreatest of these powers--going to absorb or monopolize for their\nexclusive purposes of trade or consumption these supplies which every\ncountry needs, or are they going to let the rest of the world have fair\naccess to them? I think this to be upon the whole the most important of\nthe many urgent issues that confront us. For, if close nationalism or\nimperialism should prevail, the weaker placed nations could not\nacquiesce. Close economic nationalism is not for them a possibility.\nThey must win access to the world's supplies, peacefully if possible,\nor else by force.\n\nThe fatality of the great choice is thus evident. Nations must and will\nfight for the means of life. Close economic nationalism or imperialism\non the part of the great empires must, therefore, compel the restricted\ncountries to organize force for their economic liberation. This in turn\nwill compel the great empires to maintain strong military and naval\ndefences. It is impossible for the other nations of the earth to leave\nthe essential supplies of metals, foods, and oils, and the control of\ntransport in the exclusive possession of one or a few close national\ncorporations or a permanent \"Big Four.\" Under such conditions the\nsacrifices of the great war would have been made in vain. Nothing would\nhave been done to end war, or to rescue the world from the burden of\nmilitarism. The pre-war policy of contending alliances and of competing\narmaments, draining more deeply than ever the surplus incomes of each\npeople, would be resumed. And it would bring no sense of security, but\nonly the postponement of further inevitable conflicts in which the very\nroots of western civilization might perish.\n\nThe renewed and intolerable burdens of such a militarism, with its\naccompaniments of autocracy, must let loose class war in every nation\nwhich has gone through the agony of the European struggle and has seen\nthe great hope of a peaceful internationalism blighted.\n\nIt is predominantly upon America and Britain that this great moral\neconomic choice rests, the choice on which the safety and the progress\nof humanity depend. A refusal by either of these great powers can make\nany league of nations and any economic internationalism impossible. The\nconfident consent of both can furnish the material and moral support\nfor the new order. If these countries in close concerted action were\nprepared to place at the service of the new world order their exclusive\nor superior resources of foods, materials, transport and finance--the\neconomic pillars of civilization--the stronger pooling their resources\nwith the weaker for the rescue work in this dire emergency, this\npolitical cooeperation would supply that mutual confidence and goodwill\nwithout which no governmental machinery of a League of Nations, however\nskilfully contrived, can begin to work.\n\nI have spoken of Britain and America as the two countries upon whose\nchoice this supreme issue hangs. But the act of choice is not the same\nfor the two. The British imperial policy (apart from that of the\nself-governing dominions) has been conducted on a basis of free trade\nor economic internationalism. A reversion to close imperialism would be\nfor her a retrogression. The United States, on the other hand, has\npractised a distinctively national economy, and the adoption of a free\ninternationalism would be a great act of faith, or--as some would put\nit--a leap in the dark.\n\nI prefer the former term as indicative of the new truth which is\ndawning on the world, the conviction that just as an individual can\nonly fully realize his personality in a society of other individuals,\nthat is, a nation, so nations cannot rise to the full stature of\nnationalism save in a society of nations. For only thus can\nnationality, either in its economic or its spiritual side, make full\nuse of its special opportunities for the development of a distinctive\nnational character. The supreme challenge is, therefore, not to the\ncontinental European nations, not even to Britain, but to America. For\nher alone the choice has the full quality of moral freedom. For she\nalone is able to refuse. Other great western nations might seek to\nstand alone for economic life and for defence. They could not long\nsucceed; they are too deeply implicated in one another's destinies.\nEven Britain with her vast extra-European territories could not hope to\ndisentangle herself from the affairs of her near neighbors. America\ncould do this, at any rate for some considerable time to come. True she\nhas economic committals in Europe. She has loaned European governments\nand peoples some ten milliards of money. She is still lending her\ncredit to support the large surplus supplies of foods and other goods\nshe is selling Europe. If this business is to continue, it will\nimplicate her even closer in European affairs. Europe in its present\ncase can hardly be presented as a safe business proposition. If America\nproceeds along this path, it will be because she looks beyond the\nimmediate risks to the wider future of a safer and more prosperous\nworld. She could now draw out; she could cut the present economic\nlosses of her European loans; she could divert her attention from the\nEuropean markets to the development of the American continent as the\nprincipal area for the disposal of her surplus goods and energies.\n\nIt is open to her to take this course. Prudence may seem to dictate it.\nThe reckless mismanagement of European governments, the wild\nunsettlement of peoples, the badness of the peace, are, indeed, strong\narguments for America cleaving to her old ways.\n\nEurope has no rightful claim upon America, either for the urgent work\nof economic rescue, or for participation in the permanent project of a\nsociety of nations. America not only has the right to refuse; it is\nprobably to her immediate interest to refuse. But, at the risk of\nmisinterpretation, as an officious outsider, I will venture to present\nan appeal to the wider and deeper interests of Americans. The refusal\nof America not only shuts the gate of hope for millions of war-broken,\nfamine-ridden people in Central and Eastern Europe, it removes the\nkeystone for the edifice of a society of nations. For effective\ninternational cooeperation in economic resources and opportunities is\nthe indispensable condition of such a society. No League of Nations can\nsurvive its infancy without this economic nourishment. The world's\nwealth for the world's wants: unless this maxim can in some effective\nway be realized, no such escape has been made from the pre-war policy\nof greed and grab as will furnish a reasonable hope for a world\nredeemed from war--a world clothed and in its right mind.\n\nIs it not the larger and the longer hope and interest of America to\nlive as a great partner in such a society of nations, rather than to\nlive a life of isolated prosperity, perhaps the sole survivor in the\ncollapse of western civilized states? I make this appeal in the\nlanguage of Edmund Burke, in his great plea for conciliation with\nAmerica, when he reminded his hearers that \"Magnanimity in politics is\nnot seldom the truest wisdom.\" This, I venture to say, is the true\nappeal of Europe to America today. Burke's words, I feel, must kindle\nconviction in every generous heart, for in the last resort it is the\ndesire of the heart and not the calculation of the intellect that\ngoverns and should govern human conduct. For morality among nations, as\namong individuals, implies faith and risk-taking, not recklessness,\nindeed, but dangerous living, a willingness and a desire to take a hand\nin the largest game of life and continually to \"pluck out of the\nnettle, danger, safety\"; but this safety itself only as a momentary\nresting-place in the unceasing urge of nations to use their\nnationality, not for the achievement of some selfish separate\nperfection, but for the ever advancing realization of national ends\nwithin the wider circle of humanity.\n\n\n_The Riverside Press_\nCAMBRIDGE . MASSACHUSETTS\nU . S . A","title":"Morals of Economic Internationalism","tradition":"philosophy-ethics","translated_text":null,"word_count":7900}