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PART II THE ECONOMICS OF A SOCIALIST COMMUNITY
SECTION II The Foreign Relations of a Socialist Community
1 Migration and Differences in National Conditions
The Problem of Migration Under Socialism
If trade were completely free, production would only take place under the most suitable
conditions. Raw materials would be produced in those parts which, taking everything
into account, would yield the highest product. Manufacture would be localized where
the transport charges, including those necessary to place the commodities in the
hands of the ultimate consumer, were at a minimum. As labour settles around the
centres of production, the geographical distribution of population would necessarily
adapt itself to the natural conditions of production.
Natural conditions, however, are unchanging only in a stationary economic system.
The forces of change are continually transforming them. In a changing economy men
migrate continually from the places where conditions are less favourable to places
where they are more favourable for production. Under Capitalism the stress of competition
tends to direct labour and capital to the most suitable places. In a closed socialist
community the same result would have to be achieved by administrative decree. In
both cases the principle would be the same: men would have to go where the conditions
of life were most favourable.
These migrations have the closest bearing upon the condition of the different nations.
They cause citizens of one nation, the natural conditions of which are less favourable,
to move into the territory of other nations more favourably endowed. If the conditions
under which migration takes place are such that the immigrants are assimilated to
their new surroundings then the nation from which they came is, to that extent,
weakened in numbers. If they are such that the immigrants preserve their nationality
in their new home—still more if they assimilate the original inhabitants—then the
nation receiving them will find immigration a menace to its national position.
To be a member of a national minority involves multitudinous political disadvantages.
The wider the functions of the political authority the more burdensome are these
disadvantages. They are smallest in the state which is founded upon purely liberal
principles. They are greatest in the state which is founded upon Socialism. The
more they are felt, the greater become the efforts of each nation to protect its
members from the fate of belonging to a national minority. To wax in numbers, to
be a majority in rich and extensive territories these become highly desirable political
aims. But this is nothing but Imperialism. In the last decades of the nineteenth
century, and the first decades of the twentieth, the favourite weapons of Imperialism
were commercial weapons—protective tariffs, prohibitions of imports, premiums on
exports, freight discriminations, and the like. Less attention was paid to the use
of another powerful imperialistic weapon—limitations on emigration and immigration.
This is becoming more significant now. The ultima ratio of imperialism is, however,
war. Beside war, all other weapons that it may use appear merely insufficient auxiliaries.
Nothing justifies us in assuming that under Socialism the disadvantages of belonging
to a national minority would be diminished. On the contrary. The more the individual
depended on the State—the more importance political decisions had for the life of
the individual—the more would the national minority feel the political impotence
to which it was condemned.
But when we are considering migration under Socialism we need not give special attention
to the friction which would arise thereform between nations. For under Socialism
there must arise, even between members of one and the same nation, points of difference
which make the division of the surface of the earth—which is a matter of indifference
to Liberalism—a problem of cardinal importance.
2 The Tendency Towards Decentralization Under Socialism
Under Capitalism, capital and labour move until marginal utilities are everywhere
equal. Equilibrium is attained when the marginal productivity of all capital and
labour is the same.
Let us leave the movement of capital on one side and consider first the movement
of labour. The migrating workers depress the marginal productivity of labour wherever
they betake themselves. The fact that wages, their income, sink, directly damages
the workers who were employed in centres of migration before the incursion of new
workers took place. They regard the "immigrants" as the enemy of high wages. The
particular interest would be served by a prohibition of "immigration." It becomes
a cardinal point of the particularist policy of all such particular groups of workers
to keep newcomers out.
It has been the task of Liberalism to show who bear the costs of such a policy.
The first to be injured are the workers in the less favourably situated centres
of production, who, on account of the lower marginal productivity of their labour
in those centres, have to content themselves with lower wages. At the same time,
the owners of the more favourably situated means of production suffer through not
being able to obtain the product which they might obtain could they employ a larger
number of workers. But this is not the end of the matter. A system that protects
the immediate interests of particular groups limits productivity in general and,
in the end, injures everybody—even those whom it began by favouring. How protection
finally affects the individual, whether he gains or loses, compared with what he
would have got under complete freedom of trade, depends on the degrees of protection
to him and to others. Although, under protection, the total produce is lower than
it would have been under free trade, so that the average income is necessarily lower,
it is still quite possible that certain individuals may do better than they would
under free trade. The greater the protection afforded to particular interests, the
greater the damage to the community as a whole, and to that extent the smaller the
probability that single individuals gain thereby more than they lose.
As soon as it is possible to forward private interests in this way and to obtain
special privileges, a struggle for pre-eminence breaks out among those interested.
Each tries to get the better of the other. Each tries to get more privileges so
as to reap the greater private gain. The idea of perfectly equal protection for
all is the fantasy of an ill-thought out theory. For, if all particular interests
were equally protected, nobody would reap any advantage: the only result would be
that all would feel the disadvantage of the curtailment of productivity equally.
Only the hope of obtaining for himself a degree of protection, which will benefit
him as compared with the less protected, makes protection attractive to the individual.
It is always demanded by those who have the power to acquire and preserve especial
privileges for themselves.
In exposing the effects of protection, Liberalism broke the aggressive power of
particular interests. It now became obvious that, at best, only a few could gain
absolutely by protection and privileges and that the great majority must inevitably
lose. This demonstration deprived such systems of the support of the masses. Privilege
fell because it lost popularity.
In order to rehabilitate protection, it was necessary to destroy Liberalism. This
was attempted by a double attack: an attack from the point of view of nationalism,
and an attack from the point of view of those special interests of the middle and
working classes which were menaced by Capitalism. The one served to mature the movement
towards territorial exclusiveness, the other the growth of special privileges for
such employers and workmen as are not equal to the stress of competition. Once Liberalism
has been completely vanquished, however, and no longer menaces the protective system,
there remains nothing to oppose the extension of particular privilege. It was long
thought that territorial protection was limited to national areas, that the re-imposition
of internal tariffs, limitation of internal migration, and so on, was no longer
conceivable. And this is certainly true so long as any regard at all is preserved
for Liberalism. But, during the war, even this was abandoned in Germany and Austria,
and there sprang up overnight all kinds of regional barriers. In order to secure
a lower cost of living for their own population, the districts producing a surplus
of agricultural produce cut themselves off from the districts that could support
their population only by importing foodstuffs. The cities and industrial areas limited
immigration in order to counteract the rise in the price of foodstuffs and rents.
Regional particularism broke up that unity of economic area on which national neo-mercantilism
had based all its plans.
Even granting that Socialism is at all practicable, the development of a unitary
world socialism would encounter grave difficulties. It is quite possible that the
workers in particular districts, or particular concerns, or particular factories,
would take the view that the instruments of production which happened to lie within
their area were their own property, and that no outsider was entitled to profit
by them. In such a case World Socialism would split up into numerous self-independent
socialist communities—if, indeed, it did not become completely syndicalized. For
Syndicalism is nothing less than the principle of decentralization consistently
See my Nation, Staat und Wirtschaft (Vienna, 1919),
pp. 45 ff., and Liberalismus (Jena, 1927), pp. 93 ff.
Nation, Staat und Wirtschaft, pp. 37 ff.
Ibid., pp. 63 ff.; Liberalismus, p. 107 ff.
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