CHAPTER XVII: THE NATION AND THE WORLD

§1. We have examined the chief defects in the structure of a business and a trade, regarded in the light of instruments of human welfare, and we have considered some of the remedies, applied sometimes for purposes of distinctively industrial economy, sometimes as devices of social therapeutics.
There remains, however, one other mode of economic antagonism deserving of consideration. Until modern times a nation was to all intents and purposes not only a political but an economic area, in the sense that almost all trade and other economic relations were confined within the national limit. The small dimensions of foreign, as compared with domestic trade, and the nature of that trade, confined to articles not produced at home, had little tendency to generate a feeling of international rivalry. Foreign trade was almost wholly complementary and not competitive. With the modern changes, which have altered this condition and made nations appear to be hostile competitors in world commerce, we are all familiar. The development of capitalist production to a common level and along similar lines in a number of Western nations, the tendency towards an increase of output of manufactured goods at a price exceeding the demands of the existing markets, the consequent invasion of the markets of each industrial country by the goods of other countries, and the growing competition of the groups of traders in each nation to secure and develop new markets in the backward countries, with the assistance of the physical and military forces of their respective governments, have imposed upon the popular mind a powerful impression of economic opposition between nations. No falser and more disastrous delusion prevails in our time. The only facts which seem to give support to it are the Tariffs, Commercial Treaties and the occasional uses of political pressure and military force by States for the benefit of financiers, investors, traders or settlers belonging to their nationality. This intervention of governments for the supposed advantage of their citizens has had the unfortunate effect of presenting nations in the wholly false position of rival business firms. Groups of private manufacturers, traders and financiers, using their government to secure their private profitable ends, have thus produced grave conflicts of international policy. The worst instrument of this antagonism, because the most obvious and the most vexatious, is the protective Tariff, and the most singular proof of its derationalising efficacy is found in the conduct of our recent fiscal controversy. The fiercest fight in all that controversy has raged round the relative size, growth and profitable character of the foreign trade of Great Britain, Germany, America, etc. These States are actually treated, not merely by Protectionists but by many Free Traders, as if they were great trading firms, engaged in struggling against one another for the exclusive possession of some limited economic territory, the success of one being attended by a loss to the others. Now, Great Britain, Germany and America are not economic entities at all; they are not engaged in world commerce, either as competitors or as cooperators; the respective advances or declines made by certain groups of merchants within their confines in overseas trade have no net national significance at all. Finally, overseas trade, by itself, furnishes no index of the collective prosperity of each nation.
§2. The whole presentation of the case under the head of Nations is irrelevant and deceptive, conveying, as it is designed to do, the false suggestion that Englishmen, grouped together as a people, are somehow competing with germans grouped together as another nation, and Americans as a third nation. Now no such collective competition exists at all. So far as trade involves competition, that competition takes place, not between nations, but between trading firms, and it is much keener and more persistent between trading firms belonging to the same nation than between those belonging to different nations. Birmingham or Sheffield firms compete with one another for machinery and metal contracts far more fiercely than they compete with Germans or Americans in the same trade, and so it is in every other industry. The production of import and export figures, and of balances of trade, under national headings, is a mischievous pandering to the most dangerous delusion of the age.
It has done more than anything else to hide the great and beneficent truth, that the harmony and solidarity of economic interests among mankind have at last definitely transcended national limits, and are rapidly binding members of different nations in an ever-growing network of cooperation. Within the last generation a more solid and abiding foundation for this cooperation than ordinary exchange of goods has been laid in the shape of international finance. Though certain dangerous abuses have attended its beginnings, this cooperation of the citizens of various countries in business enterprises in all parts of the world is the most potent of forces making for peace and progress. More rapidly than is commonly conceived, it is bringing into existence a single economic world-state with an order and a government which are hardly the less authoritative because, as yet, they possess a slender political support. That economic world-state consists of all that huge area of industrially developed countries in regular and steady intercourse, linked to one another by systems of railroads and steamship routes, by postal and telegraphic services, administered by common arrangements, by regular commerce, common markets and reliable modes of monetary payment, and by partnerships of capital and labour in common business transactions.
§3. The actuality of this world-system has preceded its conscious realisation. But the growing fact is educating the idea and the accompanying sentiment in the minds of the more enlightened members of all civilised nations. We hear more of internationalism from the side of labour. But, in point of fact, the corporate unity of labour lags far behind that of capital. For the mobility of capital is much greater, and its distribution is far better organised. But, as the financial machinery for the collection and distribution of industrial power over the whole economic world is further perfected and unified, it will be attended by a loosening of those local and national bonds which have hitherto limited the free movement of labour. As the centre of gravity in the economic system shifts from land, which is immovable, to money, the most mobile of economic factors, so the old local attachment which kept most labour fastened to some small plot of the earth, its native village, will yield place to liberty of movement accommodated to the needs and opportunities of modern profitable business. Within the limits of each country the increased mobility has long been evident: it has helped to break up parochialism and provincialism of ideas and feelings, and to evolve a stronger sense of national unity. But there is to be no halting at the limits of the nation. Already large forces of international labour exist. Not merely do vast numbers of workers migrate with increased ease from Belgium into France, from Russia into the United States, from Germany into South America, for settlement in these countries, but large bodies of wage-earners are being organised as a cosmopolitan labour force following the currents of industrial development about the world. So far as unskilled labour is concerned, large tracts of China, India and the Straits Settlements, form a recruiting ground in Asia; while Italy and Austro-Hungary furnish a large European contingent. But not less significant are the higher ranks of cosmopolitan labour, the British and American managers, overseers and workmen in the engineering, railroad, electrical and mining industries, who to-day are moving so freely over the newly developing countries of three continents, placing their business and technical ability at the service of the economic world. The new movements in the economic development of Asia and of South America will enormously accelerate this free flow of business ability and technical skill from the more advanced Western nations over the relatively backward countries, and will also bring into closer cooperation at a larger number of points the capital and management of Western peoples.
My object in referring to these concrete economic movements of our time is to illustrate the powerful tendencies which are counteracting the old false realisation of industry in terms of human competition and antagonism, and are making for a conscious recognition of its cooperative and harmonious character.