American World Policies

by Walter E. Weyl

We may seek to understand this eventual international evolution of business by visualising a world organisation of the steel industry. Either one corporation might be formed or a common control might be established among national steel companies through an interchange of stock. The result might be somewhat as follows: In the United States we should have an organisation comprising all American steel concerns, its directors representing constituent companies as well as the government, labour and consumers. In its domestic affairs, it would be under governmental jurisdiction. Its capital might amount to a few billion dollars, of which a part would represent holdings of European companies in return for American stock, transferred to European companies.

Such a world corporation would be a financial aggregation immensely greater than any in the past. Its principles of organisation, however, would not materially differ from those with which we are familiar. In each country a board of directors would hold control over constituent companies, and at London, Paris or New York a high Federal Council would settle controversies and make arrangements for the business of the world. Each company would have two elements of protection against unfair treatment; a community of interest secured through an interchange of stock and a representative on the Federal Council.

A development, such as is here outlined, is in advance of the psychological preparation of the world. We have not yet succeeded in regulating corporations, and there would remain innumerable difficulties and inequalities as between nations, which could not easily be settled. The price which such concerns might be allowed to pay for ores or charge for finished products and the pressure which they might put upon workmen might cause financial quarrels, leading to international controversies. If the governments held hands off, even greater evils might result. The various peoples would hesitate to turn over their basic industries to a private corporation beyond the regulation either of competitors or of their own government.

But we are here concerned not with the end but with the direction of international capitalism, and this direction tends to be the same as that of national capitalism. Division of the field, interchange of stock, community of interest, co-operation and combination in one form or another are as much a temptation in the relation of firms separated by a frontier as between those within one customs union. Capital is fluid. It is quantitative. It is potentially international. A hundred dollars is indistinguishable from a certain number of pounds, marks or francs. The machinery for an international combination of capital is already present, the beginnings of international investment have already been made. Further progress waits only upon the removal of barriers, in part traditional. The larger economic interests of the nations, and of most of the classes within the nations, lead towards the removal of these barriers and towards the gaining of that security without which international investment is dangerous and conventions and agreements almost worthless.

Given such an economic co-operation and such an economic interpenetration of rival European nations, and the political and diplomatic conflicts would grow less acrid and dangerous. As the process continued the interest of each nation in the welfare of its neighbours would become so great as to make international war as unthinkable as a war of Pennsylvania against New York. A vital and powerful international spirit, which already exists but is held in check by the fear and insecurity of each independent nation, would be given full sway. There would be a new Europe and a new world, in which war would be but a vague and hateful memory.

Such developments, however, are slow and generations live their uncertain lives during a period of transition. While waiting for an economic internationalism to develop to maturity the nations remain on guard, armed, threatened and threatening. The change from our present anarchy to a future concord will not be swift.

For the time even an increase of the economic unit to include several nations instead of one is not likely to put an end to all international economic strife. It is not improbable that the proximate economic development will be not internationalism but supra-nationalism. Just as the customs union grew from a district to a nation, so it may grow to include a group of nations but not the whole world. The world may come to be divided into a group of five or six vast economic units, each of which would be composed of one or several or indeed many political units. The British Empire, the Russian Empire, the United States, China and Japan, South America, one or two economic coalitions of west and central Europe (with their colonial possessions) would furnish a far more stable economic equilibrium for the world than is the present division of the powers. Each of these groups would have both agricultural and manufacturing resources; none of them would be imperatively obliged to fight for new territories. While there would be friction, while one group would have a population in proportion to its resources in excess of a neighbouring group, the sheer brutal necessity of expansion which now forces nations to fight would be largely moderated.

Such a division of the world into seven or six or perhaps fewer economic aggregates though not easy is quite within the bounds of possibility. Three of these aggregates, Britain, Russia and the United States, are already political units; the chief difficulty would consist of western and central Europe. No thoroughgoing political amalgamation of such countries as France, Germany and Italy is at all proximate, but some form of economic unity is not impossible. The bond which would join these countries might be less tight and therefore stronger than the Ausgleich, which holds together the kingdoms of Austria and Hungary. In the beginning it might be merely a series of trade conventions terminable on notice; from this it might grow to more permanent trade agreements and finally to a customs union. While the opposition to such an economic union would be strong the forces driving in this direction would also be powerful. As the really great nations emerge, as Russia, the United States and the British Empire increase their population into the hundreds of millions and their wealth into the hundreds of billions, the individual nations of Europe will become economically insignificant and economically unsafe. Only by a pooling of their resources will they be able to escape from the crushing superiority of the nations with large bulk and from an insecurity which makes for war.

Even with such an economic rearrangement of the world the west European coalitions would be unsafe unless they lessened the rate of increase of their population. Never before has this population grown so rapidly. In the decade ending 1810 western Europe (including the nations lying to the west of Russia), added 6.3 millions to its numbers; in the decade ending 1900 it added almost 19 millions. Despite a decline in the birth-rate, the mortality has fallen so far that the population is reaching a point where it will be difficult to secure adequate food supplies from abroad. Rather than starve or live under the constraint of scarce food and high food prices, the West European powers will fight for new territory from which to feed their people.

With the industrial development of Asia, and especially of China, this danger will be enhanced. Of the three great nuclei of population in the world, Eastern Asia, Southern Asia and Western (and Central) Europe, only one has been able to draw upon the surplus food of the world. Eight hundred million Asiatics have been forced to live on their own meagre home resources. As China begins to export coal, iron, textiles and other manufactured products, however, she will be able, whether politically independent or not, to compete with Europe for the purchase of this food supply. Not only will China's population probably increase with the advent of industrialism but the standard of living of her population will rise, and her competition with Europe for the sale of manufactured products and the purchase of food will become intense. The cheap, patient, disciplined labour of China's hundreds of millions will be fighting with the Belgian, the German and the Italian wage-earners to secure the food which it will be necessary to import.