1. Autarky and Socialism

A Socialist community, which did not include the whole of mankind, would have no reason to remain isolated from the rest of the world. It is true, that it might be disquieting for the rulers of such a state that foreign ideas would come over the frontiers with foreign products. They might fear for the permanence of their system, if their subjects were able to compare their position with that of foreigners who were not citizens of a socialist community. But these are political considerations, and do not apply if the foreign states are also socialistic. Moreover, a statesman who is convinced of the desirability of Socialism must expect that intercourse with foreigners will make them also socialists: he will not fear lest it undermine the socialism of his own compatriots.

The theory of Free Trade shows how the closing of the frontiers of a socialist community against the import of foreign commodities would injure its inhabitants. Capital and labour would have to be applied under relatively unfavourable conditions yielding a lower product than otherwise would have been obtained. An extreme example will make this clear. At the expense of an enormous outlay of capital and labour a socialist Germany could grow coffee in greenhouses. But it would obviously be more advantageous to procure it from Brazil in exchange for products for whose production conditions in Germany were more favourable.1

• 1It is superfluous to dispute with the autarky plans, which have been most zealously argued by the naive litterateurs of the ‘Tat’ circle (Fried, Das Ende des Kapitalismus, Jena 1931). Autarky would probably depress the standard of life of the German people incomparably more than could the Reparations burden multiplied a hundred-fold.