Ludwig von Mises
Liberal Foreign Policy
The United States of America is the mightiest and richest nation in the world. Nowhere else was capitalism able to develop more freely and with less interference from the government. The inhabitants of the United States of America are therefore far richer than those of any other country on earth. For more than sixty years their country was not involved in any war. If they had not waged a war of extermination against the original inhabitants of the land, if they had not needlessly waged war against Spain in 1898, and if they had not participated in the World War, only a few graybeards among them would today be able to give a first-hand account of what war means. It is doubtful whether the Americans themselves appreciate how much they owe to the fact that more of the policies of liberalism and capitalism have been realized in their country than in any other. Even foreigners do not know what it is that has made the much-envied republic rich and powerful. But?apart from those who, filled with resentment, affect a profound contempt for the "materialism" of American culture?all are agreed in desiring nothing more eagerly than that their country should be as rich and as powerful as the United States.
In various quarters it is being proposed, as the simplest way to achieve this end, that a "United States of Europe" be formed. By themselves the individual countries of the European continent are too thinly populated and do not have enough land at their disposal to be able to hold their own in the international struggle for supremacy as against the ever increasing power of the United States, against Russia, against the British Empire, against China, and against other groupings of similar size that may be formed in the future, perhaps in South America. They must therefore consolidate into a military and political union, into a defensive and offensive alliance, which alone would be capable of assuring to Europe in the centuries to come the importance in world politics that it has enjoyed in the past. What gives special support to the idea of a Pan-European union is the realization, which is every day impressing itself more strongly on everyone, that nothing can be more absurd than the protective tariff policies presently being pursued by the nations of Europe. Only the further development of the international division of labor can increase the well-being and produce the abundance of goods needed to raise the standard of living, and thereby also the cultural level, of the masses. The economic policies of all countries, but especially those of the smaller European nations, are aimed precisely at destroying the international division of labor. If the conditions under which American industry operates, with a potential market of more than a hundred twenty million rich consumers, unhampered by tariffs or similar obstacles, are compared with those against which German, Czechoslovakian, or Hungarian industry must contend, the utter absurdity of endeavors to create little autarkic economic territories becomes immediately obvious.
The evils that those who champion the idea of a United States of Europe are trying to combat undoubtedly exist, and the sooner they are eliminated, the better. But the formation of a United States of Europe would not be an appropriate means to achieve this end.
Any reform in international relations must aim at abolishing a situation in which each country seeks in every way possible to enlarge its territory at the expense of other countries. The problem of international boundaries, which has assumed such overwhelming importance today, must lose all its significance. The nations must come to realize that the most important problem of foreign policy is the establishment of lasting peace, and they must understand that this can be assured throughout the world only if the field of activity permitted to the state is limited to the narrowest range. Only then will the size and extent of the territory subject to the sovereignty of the state no longer assume such overwhelming importance for the life of the individual as to make it seem natural, now as in the past, for rivers of blood to be shed in disputes over boundaries. The narrow-mindedness which sees nothing beyond one's own state and one's own nation and which has no conception of the importance of international cooperation must be replaced by a cosmopolitan outlook. This, however, is possible only if the society of nations, the international superstate, is so constituted that no people and no individual is oppressed on account of nationality or national peculiarities.
Nationalist policies, which always begin by aiming at the ruination of one's neighbor, must, in the final analysis, lead to the ruination of all. In order to overcome such provincialism and to replace it by a policy genuinely cosmopolitan in its orientation, it is first necessary for the nations of the world to realize that their interests do not stand in mutual opposition and that every nation best serves its own cause when it is intent on promoting the development of all nations and scrupulously abstains from every attempt to use violence against other nations or parts of other nations. Thus, what is needed is not the replacement of national chauvinism by a chauvinism that would have some larger, supranational entity for its object, but rather the recognition that every sort of chauvinism is mistaken. The old, militaristic methods of international politics must now give way to new, peaceful methods aiming at cooperative effort, and not at mutual warfare.
The champions of Pan-Europe and of the United States of Europe, however, have other ends in view. They do not plan on establishing a new kind of state different in its policies from the imperialistic and militaristic states that have existed up to now, but on a reconstitution of the old imperialistic and militaristic idea of the state. Pan-Europe is to be greater than the individual states that will comprise it; it is to be more powerful than they are and therefore more efficient militarily and better suited to oppose such great powers as England, the United States of America, and Russia. A European chauvinism is to take the place of the French, the German, or the Hungarian variety; a united front formed of all the European nations is to be directed against "foreigners": Britons, Americans, Russians, Chinese, and Japanese.
Now one can base a chauvinistic political consciousness and a chauvinistic military policy on a national foundation, but not on a geographic one. Community of language binds members of the same nationality close together, while linguistic diversity gives rise to a gulf between nations. If it were not for this fact?aside from all ideologies?chauvinistic thinking would never have been able to develop. The geographer, with map in hand, may, no doubt, very well view the European continent (with the exception of Russia) as a unity if he is so minded; but this does not create among the inhabitants of that region any feeling of community or solidarity on which the statesman could base his plans. A Rhinelander can be made to understand that he is defending his own cause if he goes into battle for the Germans of East Prussia. It may even be possible to bring him to see that the cause of all mankind is also his own cause. But he will never be able to understand that, while he has to stand side by side with the Portuguese because they too are Europeans, the cause of England is that of an enemy, or, at best, of a neutral alien. It is not possible to efface from men's minds (nor, incidentally, does liberalism have any desire to do so) the imprint left by a long historical development that has brought it about that the heart of a German beats faster at every mention of Germany, of the German people, or of all that is typically German. This feeling of nationality existed before any political attempt was made to base upon it the idea of a German state, a German policy, and German chauvinism. All the well-intentioned schemes for replacing national states by a federation of states, whether Central European, Pan-European, Pan-American, or constructed on some similar artificial basis, suffer from the same fundamental defect. They fail to take account of the fact that the words "Europe" or "Pan-Europe" and "European" or "Pan-European" do not have this kind of emotional connotation and are thus incapable of evoking sentiments of the kind called forth by such words as "Germany" and "German."
The matter may be seen in its clearest light if we direct our attention to the problem, which plays a decisive role in all these projects, of agreeing on a commercial policy for such a federation of states. As conditions are today, a Bavarian can be induced to regard the protection of German labor?let us say, in Saxony?as a sufficient justification for a tariff that makes it more expensive for him, the Bavarian, to purchase some article. We may hope that some day he will succeed in being converted to the realization that all political measures designed to achieve autarky, and hence all protective tariffs, are senseless and self-defeating and consequently ought to be abolished. But never will one succeed in inducing a Pole or a Hungarian to consider it justified that he should pay more than the world market price for any commodity merely in order to enable the French, the Germans, or the Italians to carry on its production in their countries. One can certainly win support for a policy of protectionism by combining an appeal to feelings of national solidarity with the nationalistic doctrine that the interests of different nations are mutually incompatible; but there is nothing similar that could serve a federation of states as an ideological basis for a system of protectionism. It is manifestly absurd to break up the ever increasing unity of world economy into a number of small national territories, each as autarkic as possible. But one cannot counteract the policy of economic isolation on a national scale by replacing it with the same policy on the part of a larger political entity comprising a number of different nationalities. The only way to counteract tendencies toward protectionism and autarky is to recognize their harmfulness and to appreciate the harmony of the interests of all nations.
Once it has been demonstrated that the disintegration of the world economy into a number of small autarkic areas has detrimental consequences for all nations, the conclusion in favor of free trade necessarily follows. In order to prove that a Pan-European zone of autarky should be set up under the shelter of a protective tariff, it would first be necessary to demonstrate that the interests of the Portuguese and the Rumanians, although in harmony with each other, both collide with those of Brazil and Russia. One would have to adduce proof that it is good for the Hungarians to give up their domestic textile industry in favor of the German, the French, and the Belgian, but that the interests of the Hungarians would be injured by the importation of English or American textiles.
The movement in favor of the formation of a federation of European states has arisen from a correct recognition of the untenability of all forms of chauvinistic nationalism. But what the supporters of this movement wish to set in its place is impracticable because it lacks a vital basis in the consciousness of the people. And even if the goal of the Pan-European movement could be achieved, the world would not be in the least the better for it. The struggle of a united European continent against the great world powers outside its territory would be no less ruinous than is the present struggle of the countries of Europe among themselves.