International Order and Economic Integration

280 Pages·1959·7.49 MB·English

by  Wilhelm Röpke (auth.)

INTERNATIONAL ORDER AND ECONOMIC INTEGRATION
WILHELM ROPKE
INTERNATIONAL ORDER AND
ECONOMIC INTEGRATION
D. REIDEL PUBLISHING COMPANY / DORDRECHT-HOLLAND
INTERNATIONALE ORDNUNG - HEUTE
First published by Eugen Rentsch Verlag AG
Erlenbach - Zurich, Switzerland
Translated by Gwen E. Trinks, Joyce Taylor and Cicely Kilufer
ISBN-I3: 978-94-010-3694-8 e-ISBN-13: 978-94-010-3692-4
001: 10.1007/978-94-010-3692-4
Copyright 1959 by D. Reidel Publishing Company, Dordrecht, Holland
Softcover reprint of the hardcover I st edition 1959
No part of this book may be reproduced in any form, by print, photoprint,
microfilm, or any other means without permission from the publisher
TABLE OF CONTENTS
Preface to the English Language Edition VII
PART ONE - A SURVEY OF THE PROBLEM
I The International Crisis 3
Nature of the international crisis / False and true internationalism
/ The lesson of the atom bomb / The sociology of war / Notes
II The Nation and the Community of Nations 33
Machiavellism and realism / Nation, sovereignty and a community
of nations / Europe as a community / International order as the
self-assertion of the free world against communist imperialism
/ Notes
PART TWO - THE ECONOMIC ELEMENTS OF INTERNATIONAL
ORDER
I The Economic System and International Order 69
The theory of international order and the solution of the
problem in a liberal age / Imperialism / Notes
II Caesaro-Economy 94
Pre-collectivistic interference with international interrelations /
Explosive effect of collectivism / International planned econ
omy / The paradox of socialism / Notes
III The International Problem of Raw Materials and Colonies 115
International 'social justice' / The real problem / The liberal
solution / The raw materials problem as a result of the decay of
the liberal world economy / An impossible solution / The return
to the liberal solution and its consequences / Notes
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TABLE OF CONTENTS
IV The International Population Problem 130
The development / The present situation / The problem of
international migration / Conclusions / Notes
PART THREE - THE FEAR OF WORLD ECONOMY
I The Decay of the World Economy 155
The old world economy / The work of destruction / The conse
quences / Forces of aggravation and self-healing / Notes
II The Fear of Competition 177
The general fear of competition / Fear of foreign agrarian
competition / Fear of industrial competition from the agrarian
states / Notes
III The Fear of an Adverse Balance of Payments 194
The nature of the problem / The solution of the problem / The
will-O'-the-wisp of 'full employment' / Exchange control /
Notes
PART FOUR-TOWARDS A NEW WORLD ECONOMY
I Attempts, Tendencies and Problems 223
European economic integration / The foreign body of collec
tivism in the world economy / Underdeveloped countries /
International capital movements / Notes
II International Monetary Order 244
Ways to convertibility / A new international monetary order /
Notes
EPILOGUE - EUROPEAN FREE TRADE, THE GREAT DIVIDE 259
Register of Persons 271
Subject Index 274
VI
PREFACE TO THE ENGLISH LANGUAGE EDITION
The present book which has now the honour of being published in an
English translation has been written almost six years ago. It would be
futile to hope that, in a time of rapid change like ours, it would still
correspond to actual conditions in every detail. Since, however, it is
meant to be a book whose principal aim it is to draw attention to the
essential problems of international order and the fundamentals involved
and since those can hardly be said to have seriously changed within the
last years, I venture to submit that it may still be useful as a guide through
the maze of questions in the field of international economic relations.
This, I hope, will prove particularly true with regard to the special
problems which have been raised by the recent important events in
Europe, i.e. by the organization of the European Economic Community
and the European Free Trade Association and by the new system of
convertible currencies which has taken the place of the European Pay
ments Union since the beginning of 1959. The reader will have little
difficulty to understand the critical attitude which I have taken vis-a-vis
the European Economic Community and which I have explained at
greater length in some recent publications (a.o. Gemeinsamer Markt und
Freihandelszone, Ordo Jahrbuch fUr die Ordnung von Wirtschaft und
Gesellschaft vol. X, 1958, pp. 31-62; Zwischenbilanz der europiiischen
WirtschaJtsintegration, ibidem, vol. XI, 1959, pp. 69-94). One of these
articles, entitled 'European Free Trade - the Great Divide and published
in the September 1958 issue of 'The Banker' has been inserted in this
book as an epilogue.
There is another event which has occurred since the German publication of
this book and which also is of primary importance on the international
scene. I refer to the dramatic change of the USA balance of payments
from a surplus to a deficit which is tantamount to a change from a
'dollar shortage' to a 'dollar abundance'. But here again the reader will
understand why the author has not precisely taken by surprise, and he
will find, after having read this book, no difficulty to understand what has
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INTERNATIONAL ORDER AND ECONOMIC INTEGRATION
happened and why it has happened. Since the author has never believed
in the 'dollar scarcity' as an Act of God he has nothing to retract from
what he has said six years ago on this subject - as on many others.
WILHELM ROPKE
Graduate Institute of International Studies
Geneva
February 1960
VIII
PART ONE
A SURVEY OF THE PROBLEM
I
THE INTERNATIONAL CRISIS
NATURE OF THE INTERNATIONAL CRISIS
The author of this book belongs to the generation which in its youth
saw the sunset glow of that long and glorious sunny day of the western
world, which lasted from the Congress of Vienna until August 1914, and
of which those who have only lived in the present arctic night of history
can have no adequate conception. His experience has therefore been
similar to that of so many of his contemporaries in all those countries
which were drawn into the whirlpool of the first world war. Like other
Germans, Englishmen, Frenchmen and Belgians he knew as a young
man the horrors of the gigantic battles on the plains of France. This
experience became a determinant factor for the rest of his life as it did
for his contemporaries. At the most impressionable age for such influences,
he received a shock which suddenly caused him to see many things which
his upbringing had up to then kept hidden from him. Never again were
the pictures of those days to forsake him, nor the ideas which from that
time on made him a fervent hater of war, of brutal and stupid national
pride, of the greed for domination and of every collective outrage against
ethics. He made a solemn promise, that if he should escape from that
inferno, the main purpose of his life from then on could only consist in
his devoting himself to the task of helping to prevent a recurrence of this
disaster, and in reaching out beyond the narrow confines of his own
nation to join forces with all other fellow-workers in the same cause.
Thousands and thousands of his contemporaries and fellow-sufferers
within and beyond the frontiers of his country had come to the same
conclusion.
At the time, therefore, when he was growing out of childhood into maturi
ty, the author came face to face with that terrible crisis in the history of
human society which the first world war signified. This it was that deter
mined him to take up the study of economics and sociology, in order
to be able to understand the causes of this crisis and then to help to
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INTERNATIONAL ORDER AND ECONOMIC INTEGRATION
overcome them. When he looks back today over the twenty-five years
which have passed since then, twenty-five years in which he has lived
through two revolutions, the greatest inflation of all times, the mental
ferment and social upheaval of his country, and finally the exile which
took him, the scholar, to many universities of the old world and the new,
he realizes that, consciously or unconsciously, he has always been pursued
by the battlefields of Picardy. The crisis of international relationships
and the necessity of sorting them out have, first and foremost, always
been the primary motives of his studies and the incentive to his work.
The author knows that for many of his friends, who at that time faced
each other in opposite camps under the obligation to kill, the shock was
equally great, and the effect the same as that which continues to move
him today. We also resemble one another in that since then our thoughts
have gone through the same phases of development. Under the impact
of the first shock our impressions were stronger than our reason. We
contented ourselves with the argument that a society which was capable
of such hideous deterioration must be rotten through and through, and
since what we had learnt sufficed for us to give this society the name of
'Capitalism', and to understand by this term all that we rightly considered
worthy of damnation, we became Socialists.
For a young German of that time this was a very obvious step, since all
the political groups, with the single exception of the Socialists, had be
come supporters of the political system represented by Prussia. If one
wished to give a radical form to the protest against this system, which
we in our youthful enthusiasm felt challenged to make, then the natural
course was to become a Socialist. Probably modern Socialism as a mass
movement can never be completely understood unless one considers that
it is to a very large extent the product of the particular political develop
ment which took place in Germany during the 19th century, after the
genuine liberal and democratic forces which came to the surface for the
last time in the ill-fated revolution of 1848 had been throttled by Bismarck.
The more the German bourgeoisie accepted Bismarck and his State, the
more did Social Democracy become the only collecting ground, not for
the social revolutionaries alone, but also for those to whom the social
revolution was entirely secondary in importance, and the political revolu
tion the main object. Only very few people actually had any idea how
much Prussianism lay hidden in this very Socialism, since as long as it
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