How Can Europe Survive?

How Can Europe Survive?

How Can Europe Survive?

How Can Europe Survive?

Excerpt

Let us suppose that I were to maintain that import restrictions gain us the friendship of neighboring countries, exchange controls enhance the freedom of citizens, and the nationalization and blocking of foreigners' property make for close international cooperation and integration. Thus stated these propositions might indeed seem startling for an economist to advance. And yet contemporary economic thought as advocated by numerous famous economists and accepted by many governments consists precisely of such propositions. They urge us to adopt policies of welfare planning which depend for their effectiveness on import and export prohibitions, tariffs, exchange controls, and many other government measures of enforcement. But simultaneously the governments whom they urge to impose discriminatory restrictions are to cooperate with each other in the elimination of the very effects which restrictions bring about.

Policies of government planning and welfare and the disintegration of the world economy into heterogeneous national units are two aspects of the same phenomenon. Like a coin on whose two sides two different symbols are impressed, government planning and the disintegration of the world market are two aspects of a single problem. The upper side of the coin, visible and familiar to everybody, shows the fascinating picture of a welfare state designed by our welfare economists and put into effect by progressive governments. The other side of the coin reveals a picture that indicates the price, expressed in terms of economic nationalism and international conflict, which must be paid for the realization of the welfare state. That is to say, every welfare measure by a national government bears inescapable effects on foreign relations and the international exchange of goods.

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