INTERNATIONAL ORDER AND ECONOMIC INTEGRATION

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 Nature of the international crisis / False and true internationalism / The lesson of the atom bomb / The sociology of war / Notes 3 II The Nation and the Community of Nations 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 33 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 economy / 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 V

TABLE OF CONTENTS IV The International Population Problem The development / The present situation / The problem of international migration / Conclusions / Notes 130 PART THREE - THE FEAR OF WORLD ECONOMY I The Decay of the World Economy The old world economy / The work of destruction / The consequences / Forces of aggravation and self-healing / Notes 155 II The Fear of Competition 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 177 PART FOUR-TOWARDS A NEW WORLD ECONOMY I Attempts, Tendencies and Problems European economic integration / The foreign body of collectivism in the world economy / Underdeveloped countries / International capital movements / Notes 223 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 Payments 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 VII

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