The Clash of Group Interests and Other Essays by Ludwig von Mises
edited with an Introduction by Murray N. Rothbard
The Freedom To Move as an International Problem (1935)
(Translated by Bettina Bien Greaves)
Discussions of the problems of peace and of the League of Nations have made substantial progress in recent months. Today one very often hears that peace cannot be secured simply by decree. Rather, to create a lasting peace, conditions must first be established which make life without war possible. Since it is believed that the "unequal distribution of raw materials" is the primary source of the conflicts that could lead to war, the first thought is for a "more equitable" distribution of raw materials. However, it is not very clear just what this means.
Wool is produced primarily in Australia, cotton in the United States, India and Egypt. Is it now proposed to hand over a part of these territories to the European states who possess no wool or cotton producing areas of their own? Let us assume the most preposterous case, that the wool producing territories of Australia were parcelled out among the European states. How would this improve the situation of these European countries? After the new partition, the Europeans would still have to purchase wool, as they did before, from the producers of wool whose lives, after all, are no bed of roses today.
The English also buy wool in Australia. They too must pay for this wool, just as must every other buyer. The fact that the British king is also sovereign over Australia plays no role in these purchases. Australia is completely independent of England, the English Parliament and the English government—in its constitution, legislation, administration and all its political affairs. English industry is not benefitted, as compared with its continental competition, because a considerable part of the raw materials it fabricates comes from the British Empire. It obtains raw materials in the same way and it pays as much as do German, Italian or Austrian manufacturers. The freight situation for British industry is usually more favorable but this fact would not be altered in anyway by a change of sovereignty. Thus, no one in Europe can say: I am suffering because the state to which I belong does not also include areas that are better suited for the production of raw materials. What Europeans complain about is something else.
There are extensive tracts of land, comparable to those in Europe, which are sparsely settled. The United States of America and the British dominions of Canada, Australia, New Zealand, South Africa and so on, are less heavily populated, in comparison with their nature-endowed potential for production, than are the lands of Europe. As a result, the productivity of labor is higher there than in Europe. Consequently also higher wages are paid there for labor.
Because those lands offer more favorable opportunities for production than Europe does, they have been the goals of would-be European emigrants for more than 300 years. However, the descendants of those earlier emigrants now say: There has been enough migration. We do not want other Europeans to do what our forefathers did when they emigrated to improve their situation. We do not want our wages reduced by a new contingent of workers from the homeland of our fathers. We do not want the migration of workers to continue until it brings about the equalization of the height of wages. Kindly stay in your old homeland, you Europeans, and be satisfied with lower wages.
The oft-referred to "miracle" of the high wages in the United States and Australia may be explained simply by the policy of trying to prevent a new immigration. For decades people have not dared to discuss these things in Europe. Public opinion has been led astray by the smoke-screen laid down by Marxist ideology which would have people believe that the union-organized "proletariat of all lands" have the same interests and that only entrepreneurs and capitalists are nationalistic. The hard fact of the matter—namely that the unions in all those countries which have more favorable conditions of production, relatively fewer workers and thus higher wages, seek to prevent an influx of workers from less favored lands—has been passed over in silence. At the same time that the labor unions in the United States of America and the British dominions were constructing immigration laws which prohibited practically all reinforcements, the Marxist pedants were writing their books claiming that the cause of imperialism and war was due to the drive of capitalists for profits and that the proletariat, united in harmony and a solidarity of interests, wanted peace.
No Italian should say that his interests are prejudiced by the fact that the lands from which metals and textile raw materials are extracted do not look to the King of Italy as their ruler. Yet every Italian worker does suffer because these areas do not allow the immigration of Italian workers. For this barrier cancels out, or at least weakens, the evening out of the height of wages that accompanies the freedom to move. And the situation that prevails for Italian workers is equally valid also for Germans, Czechs, Hungarians and many others.
One must certainly be careful to avoid accepting the false interpretation that workers in lands where the natural conditions are more favorable for production can fare better by prohibiting immigration than they can if migration were free. If the European workers are prevented from emigrating and thus have to stay at home, this does not mean they will remain idle as a result. They will continue to work in their old homeland under less favorable conditions. And because of the less advantageous conditions of production there, they will be compensated in lower wages. They will then compete on the world market, as well as on the home market of the industry producing under more favorable conditions. These countries may then very likely strike out with tariffs and import embargoes against what they call the "unfair" competition of cheap labor. By doing this, they will be forfeiting the advantages which the higher division of labor brings. They will suffer because production opportunities which are more favorable, i.e. which bring a higher return with the same expenditure than do the production opportunities which must be used in other lands, are not being used in their own countries. If only the most productive resources were exploited everywhere over the earth's surface, and the less productive resources were left unused, their position would be better in the long run too. For then the total yield of the world's production would be greater. And out of this greater overall "pie," a larger portion would come to them.
The attempt to create certain industries artificially in the lands of eastern Europe, under the protection of tariffs and import embargoes, can certainly be considered a failure. Still, if the freedom of migration is not reestablished, the lower wages in those lands will attract capital and entrepreneurial effort. Then, in place of the hot-house industries, artificially fostered by governmental measures and unviable still in spite of these measures, industries with lower wages and lower living standards for the masses will develop there, industries which will be viable in view of the location. These people will certainly still have just as much cause to complain as before—not over the unequal distribution of raw materials, but over the erection of migration barriers around the lands with more favorable conditions of production. And it may be that one day they will reach the conclusion that only weapons can change this unsatisfactory situation. Thus, we may face a great coalition of the lands of would-be emigrants standing in opposition to the lands that erect barricades to shut out would-be immigrants.
Through its affiliated office for intellectual cooperation the League of Nations is undertaking investigations as to how changes that call for general appeasement may be brought about without war. If these investigations and the conference, at which they will be presented, are concerned only with the problem of raw materials, then their efforts will have been in vain. The major problem will be side-stepped, also, if the proposals are merely for a new apportionment of the African colonies and mandated territories in Asia and Polynesia. The primary difficulties wouldn't be settled either, even if the German Reich were to receive back her old colonies enlarged, even if Italy's share of the African territory were expanded and even if the Czechs and the Hungarians were not forgotten.
What the European emigrants seek is land where Europeans can work under climatic conditions that are tolerable for them and where they can earn more than they can in their homeland, which is overpopulated and less well provided for by nature. Under present circumstances this can be offered only in the New World, in America and Australia. This is not a problem of raw materials. It is not a question as to which state should be given sovereignty over some colonies that are scarcely habitable by European emigrants. This is a problem of the right of immigration into the largest and most productive lands, the climates of which are suitable for white European workers. Without the reestablishment of freedom of migration throughout the world, there can be no lasting peace.