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 THE MORALS OF 
 
 ECONOMIC 
 
 INTERNATIONALISM 
 
 BY 
 
 J. A. HOBSON 
 
 AUTHOR OF "the INDUSTRIAL SYSTEM," "tHE EVOLUTION 
 OF MODERN CAPITALISM," "wORK AND WEALTH," ETC. 
 
 BOSTON AND NEW YORK 
 
 HOUGHTON MIFFLIN COMPANY 
 
 ^t)e C^ibec^iDe pce^jj CambriDge 
 
 1920 
 
 5 3 1 «,
 
 COPYRIGHT, 1920, BY THE REGENTS OF THE 
 UNIVERSITY OK CALIFORNIA 
 
 ALL RIGHTS RESERVED
 
 H GS 
 
 BARBARA WEINSTOCK 
 
 LECTURES ON THE MORALS 
 
 OF TRADE 
 
 This series will contain essays by 
 representative scholaurs and men of 
 affairs dealing with the various phases 
 of the moral law in its bearing on 
 business life under the new economic 
 order, first delivered at the University 
 of California on the Weinstock founda- 
 tion.
 
 THE MORALS OF 
 
 ECONOMIC 
 
 INTERNATIONALISM 
 
 IT ought not to be the case that there 
 is one standard of morality for in- 
 dividuals in their relations with one 
 another, a different and a slighter stand- 
 ard for corporations, and a third and still 
 slighter standard for nations. For, after 
 all, what are corporations but groupings 
 of individuals for ends which in the last 
 resort are personal ends? And what are 
 nations but wider, closer, and more last- 
 ing unions of persons for the attainment 
 of the end they have in common, i.e., 
 the commonwealth. Yet we are well
 
 2 THE MORALS OF 
 
 aware that the accepted and operative 
 standards of morality differ widely in the 
 three spheres of conduct. If a soul is im- 
 puted at all to a corporation, it is a leather 
 soul, not easily penetrable to the prob- 
 ings of pity or compunction, and emit- 
 ting much less of the milk of human 
 kindness than do the separate souls of 
 its directors and stockholders in their 
 ordinary human relations. There is a 
 sharp recognition of this inferior moral 
 make-up of a corporation in the attitude 
 of ordinary men and women, who, scru- 
 pulously honest in their dealings with 
 one another, slide almost unconsciously 
 to an altogether lower level in dealing 
 with a railroad or insurance company. 
 This attitude is due, no doubt, partly to
 
 INTERNATIONALISM 3 
 
 a resentment of the oppressive power 
 which great corporations are believed to 
 exercise, evoking a desire "to get a bit 
 of your own back"; partly to a feeling 
 that any slight injury to, or even fraud 
 perpetrated on, a corporation will be so 
 distributed as to inflict no appreciable 
 harm on any individual stockholder. 
 But largely it is the result of a failure to 
 envisage a corporation as a moral being 
 at all, to whom one owes obligations. 
 Corporations are in a sense moral mon- 
 sters; we say they behave as such and we 
 are disposed to treat them as such. 
 
 The standard of international mo* 
 rality, particularly in matters of commer*- 
 cial intercourse, is on a still lower level. 
 If, indeed, one were to press the theo-
 
 4 THE MORALS OF 
 
 retic issue, whether a state or a nation is 
 a morally independent being, or whether 
 it is in some sense or degree a member 
 of what may be called an incipient so- 
 ciety of states or nations, nearly every 
 one would sustain the latter view. We 
 should be reminded that there was such 
 a thing as international law, however im- 
 perfect its sanctions might be, and that 
 treaties, alliances, and other agreements 
 between nations implied the recognition 
 of some moral obligation. How weak 
 this interstate morality is appears not 
 merely from the fact that under strong 
 temptation governments repudiate their 
 most express and solemn agreements — 
 to that temptation individuals sometimes 
 yield in their dealings with one another
 
 INTERNATIONALISM 5 
 
 — but also from the nature of the de- 
 fence which they make of such repudi- 
 ation. The plea of state necessity, which 
 Germany made for the violation of the 
 neutrality of Belgium, and which was 
 stretched to cover the brutal mishan- 
 dling of the Belgian people, is unfortu- 
 nately but an extreme instance of conduct 
 to which every state has had recourse 
 at times, and — still more significant — 
 which every state defends by adduc- 
 ing the same maxim, ^*- salus reipublica 
 suprema lex'' 
 
 Here is the sharpest distinction be- 
 tween individual and national morality. 
 There are certain deeds which a good 
 and honorable man would not do even to 
 save his life ; there are no deeds, which
 
 6 THE MORALS OF ' 
 
 it is admitted that a statesman, acting 
 on behalf of his country, may not do to 
 save that country. It is foolish to try to 
 shirk this disconcerting admission. The 
 Machiavellian doctrine of " reason of 
 state** is, in the last resort, the accepted 
 standard of national conduct. This does 
 not signify that a nation and its govern- 
 ment admit no obligation to fulfil their 
 promises, or even voluntarily to perform 
 good offices for other nations, but that 
 there is always implied the reservation 
 that the necessity, or, shall we say, the 
 vital interests, of the nation override, 
 cancel, and nullify all such obligations. 
 And when "necessity" is stretched to 
 cover any vital interest or urgent need, 
 it is easy to recognize on what a slip-
 
 INTERNATIONALISM 7 
 
 pery slope such international morality 
 reposes. 
 
 International morality is impaired, 
 however, not only by this feeble sense of 
 mutual obligation, but by the still more 
 injurious assumption of conflicting inter- 
 ests between nations. Nations are repre- 
 sented not merely as self-centered, inde- 
 pendent moral systems, but as, in some 
 degree, mutually repellent systems. This 
 notion is partly the product of the false 
 patriotic teaching of our schools and 
 press, which seek to feed our sense of 
 national unity more upon exclusive than 
 inclusive sentiments. Nations are rep- 
 resented as rivals and competitors in 
 some struggle for power, or greatness, 
 or prestige, instead of as cooperators in
 
 8 THE MORALS OF 
 
 the general advance of civilization. This 
 presumption of opposing interests is, of 
 course, more strongly marked in the 
 presentation of commercial relations than 
 in any other. Putting the issue roughly, 
 but with substantial truth, the generally 
 accepted image of international trade is 
 one in which a number of trading com- 
 munities, as, for instance, the United 
 States, Britain, Germany, France, Japan, 
 etc., are engaged in striving, each to win 
 for itself, and at the expense of the others, 
 the largest possible share of a strictly 
 limited objective — the world market. 
 
 Now there are three fatal flaws in this 
 image. First comes the false presentation 
 of the United States, Britain, Germany, 
 and other political beings in the capac-
 
 INTERNATIONALISM 9 
 
 ity of trading firms. So far as world or 
 international trade is rightly presented 
 as a competitive process, that compe- 
 tition takes place, not between America, 
 Britain, Germany, but between a num- 
 ber of separate American, British, Ger- 
 man firms. The immediate interests of 
 these firms are not directed along politi- 
 cal lines. Generally speaking, the closer 
 rivalry is between firms belonging to the 
 same nation and conducting their busi- 
 ness upon closely similar conditions. 
 One Lancashire cotton exporter com- 
 petes much more closely with other 
 Lancashire exporters than he does with 
 German, American, or Japanese export- 
 ers of similar goods. So it is everywhere, 
 save in the exceptional times andcircum-
 
 lo THE MORALS OF 
 
 stances in which governments them- 
 selves take over the regulation and 
 conduct of foreign trade. 
 
 For certain purposes it is, no doubt, 
 convenient to have balances and analyses 
 of foreign trade presented separately, so 
 as to show the volumes and values of 
 different goods which pass from the 
 members of one nation to those of an- 
 other. But the imputation of political 
 significance to these statistics, taken 
 either in aggregate or in relation to 
 separate countries, as if they were them- 
 selves indices of public gain or public 
 loss, has most injurious reactions upon 
 the intelligent understanding of com- 
 merce. 
 
 The second flaw is the assumption of
 
 INTERNATIONALISM 1 1 
 
 a limited amount of market, which car- 
 ries with it the assumption that the 
 groups of traders, gathered under their 
 national flags, are engaged in a conflict 
 in which they are entitled to embroil 
 their governments. By tariff bargaining 
 and by all sorts of diplomatic weapons 
 each government is called upon to assist 
 its nationals and to cripple or exclude 
 the nationals of other states. Now it is 
 untrue that the world market is strictly 
 limited, with the consequence that every 
 advance of one group of traders is at 
 the expense of another group. The world 
 market is indefinitely expansible, and is 
 always expanding; and commercial ex- 
 perience shows that the rapid expansion 
 of the overseas trade of one country does
 
 12 THE MORALS OF 
 
 not preclude the expansion of trade of 
 other countries. I do not, of course, deny 
 that at a particular time and in relation to 
 some particular lucrative opportunity, 
 genuine clashes of interests may arise. 
 But, envisaging the whole range of for- 
 eign commerce, one feels that the image 
 of it as a prize which governments can, 
 and ought to win for their traders at 
 the expense of the traders supported by 
 other governments, has been a most fer- 
 tile source of international misunder- 
 standing. 
 
 Perhaps the worst of the three falla- 
 cies, and in a sense the deepest-rooted, 
 is the concept of export trade as of more 
 value than import trade. This is often 
 traced back to the time when govern-
 
 INTERNATIONALISM 13 
 
 ments deemed it desirable to accumulate 
 in their countries treasures of gold and 
 silver and to this end encouraged the 
 sale of goods abroad and discouraged the 
 payment for them in foreign goods. 
 There are, however, modern supporters 
 of the assumption that it is more im- 
 portant to sell than to buy, although 
 the money received for sales has no other 
 significance or value than its power to 
 buy, and trade can only be imaged truly 
 as an exchange of goods for goods in 
 which the processes of selling and of 
 buying are complementary. 
 
 The economic explanation of the 
 double falsehood of dividing buying 
 from selling and of imputing a higher 
 value to the latter process, lies beyond
 
 14 THE MORALS OF 
 
 the scope of this address. But the inju- 
 ries resulting from the superior pressure 
 upon governments of organized bodies 
 of producers and merchants who have 
 things to sell, to the detriment of the 
 consuming public who have only buy- 
 ing needs, are too grave matters to be 
 neglected here. It is not too much to 
 say that, if the interests of consumers 
 and the interests of producers weighed 
 equally in the eyes of governments, as 
 they should, the strongest of all obsta- 
 cles to a peaceful, harmonious society 
 ' of nations would be overcome. For the 
 suspicions, jealousies, and hostilities of 
 nations are inspired more by the tend- 
 ency of groups of producers to mis- 
 represent their private interests as the
 
 INTERNATIONALISM 1 5 
 
 good of their respective countries than 
 by any other single circumstance. 
 
 This analysis has seemed necessary 
 in order to clear away the intellectual 
 and moral fogs which prevent a true 
 realization of the economic, and there- 
 fore the moral, interdependence of na- 
 tions. For every bond of economic in- 
 terest involves moral obligation also. 
 If it is true that the fabric of commer- 
 cial relations is all the time being knit 
 closer between the different peoples of 
 the earth, then the moral isolation and 
 the antagonism which earlier statecraft 
 inculcated, and which still obsess so 
 many minds, must be dissipated and give 
 place to active sentiments of human co- 
 operation.
 
 i6 THE MORALS OF 
 
 There were, indeed, those who 
 thought that already the web of com- 
 merce and finance had been woven 
 strong enough to save nations from the 
 calamity of war. Their miscalculation 
 arose from underestimating the power 
 over the mind and the passions of that 
 false image of trade. But because the 
 modern internationalism of commerce 
 and finance did not prove strong enough 
 to stem the full and sudden tide of war 
 passions fed from the barbarous tradi- 
 tions of a dateless past, we ought not to 
 disparage the potentiality of this inter- 
 nationalism as the foundation of a new 
 and better world order. For, though 
 those bonds of common interest broke 
 under the strain of war, the confusion
 
 INTERNATIONALISM 1 7 
 
 in which we find ourselves without them 
 is itself a terrible testimony to their 
 value. The enforced sundering of ordi- 
 nary trade relations between members 
 of different countries has taught two 
 clear lessons. The first is this: that 
 hardly any civilized nation is or can be 
 economically independent in respect to 
 essential supplies or industries. There is 
 no European country that does not rely 
 for the subsistence of its inhabitants upon 
 supplies of goods and raw materials from 
 foreign lands, mostly from countries out- 
 side the European continent. While 
 Britain both leaned more heavily upon 
 other countries and contributed most to 
 other countries from her surplus prod- 
 uce, every other country, in larger or
 
 1 8 THE MORALS OF 
 
 less degree — great countries such as 
 France, Germany, Austria, Italy, little 
 ones like Belgium, Holland, Switzer- 
 land, Scandinavia, and Denmark — were 
 increasingly dependent upon outside 
 sources for their livelihood. It is true 
 that there remained a very few great 
 backward countries, such as Russia and 
 China, where a life of economic isola- 
 tion was possible had they been willing 
 to dispense with the higher products of 
 civilized industry and with the fertiliz- 
 ing streams of capital without which 
 progress is impossible. No civilized Eu- 
 ropean country was self-sufficing in the 
 vital factors of a productive and pro- 
 gressive civilization — food, raw mate- 
 rials, machinery, fuel, transport, finance.
 
 INTERNATIONALISM 1 9 
 
 and adequate supplies of skilled labor. 
 The services which countries near or 
 distant rendered to one another were be- 
 coming constantly more numerous, more 
 complex, and more urgent. The obstruc- 
 tions and stoppages of war has driven 
 home the lesson painfully to the inhabi- 
 tants of every European country, bellig- 
 erent or neutral. What lesson? That we 
 have erred in permitting ourselves to 
 grow dependent on the industry, good- 
 will, and intercourse of other nations, and 
 that we should endeavor to hark back to 
 an earlier economic state of national in- 
 dependence ? Well, there are even in 
 Britain rhetorical politicians who speak 
 of the necessity of retaining all "key" 
 or " essential " industries within their na-
 
 20 THE MORALS OF 
 
 tional control — who propose to reverse 
 the tide of social evolution by some 
 flimsy apparatus of tariffs and subsidies. 
 This is impossible. The war has left the 
 European peoples, one and all, more 
 than ever dependent for their economic 
 livelihood upon one another, and upon 
 the material resources and labor of other 
 continents. 
 
 The second lesson is that, other things 
 equal, it is the most highly civilized and 
 highly developed countries that are the 
 most dependent upon others. In a word, 
 there is a presumption that economic 
 internationalism is an essential feature 
 of civilization. 
 
 You will observe that so far I have 
 made no mention of America. And yet
 
 INTERNATIONALISM 21 
 
 all that I have been saying is, in a sense, 
 introductory to the unique problem pre- 
 sented by this country. America is the 
 only civilized country in the world that 
 is virtually self-sufficing as regards the 
 primary requirements of her economic 
 life. Her soil can and does supply nearly 
 all her essential foods, her natural re- 
 sources include the materials of her 
 great textile, metal, and other basic in- 
 dustries, the heat, light, electricity, and 
 other forms of natural energy which 
 satisfy her national needs. She has access 
 to skilled and unskilled labor sufficient 
 to develop and utilize all these natural 
 resources. Most of her pre-war imports 
 might be placed under four heads : articles 
 of luxury and taste in dress, jewelry, etc. ;
 
 22 THE MORALS OF 
 
 certain chemical and other scientific 
 products ; supplementary supplies of some 
 foods and materials, from other countries 
 of the American continent, for manu- 
 factures and export trade ; and a number 
 of tropical products, almost all of sub- 
 sidiary significance in the production 
 and consumption of the American peo- 
 ple. This slight dependence upon for- 
 eign countries has been considerably 
 reduced as the result of war exigency. 
 The art products of France and Italy, 
 the fine textile goods from Britain, the 
 dye-stuff's, drugs, and scientific instru- 
 ments from Germany — in a word, the 
 great bulk of the imports from Europe, 
 have either been cut out of American 
 consumption or have been displaced.
 
 INTERNATIONALISM 23 
 
 temporarily, at any rate, by home prod- 
 ucts. For several generations the main 
 dependence of America upon Europe 
 and particularly upon Britain was for 
 capital to supplement home savings that 
 she might make use of the stream of im- 
 migrant labor in the development of her 
 great continent. This dependence upon 
 European capital, of greatly diminishing 
 importance during the last three decades 
 has, of course, now been reversed, and 
 the principal European countries are 
 heavy debtors to the United States. 
 
 One other important economic lesson 
 war experience has taught, viz., the vast 
 capacity for increased productivity which 
 every industrial nation possesses, and 
 America especially, in better organiza-
 
 24 THE MORALS OF 
 
 tion and fuller utilization of natural and 
 human resources. It is evident that, far 
 from the age of great inventions and of 
 mechanical development drawing to a 
 close, we are in the actual process of 
 reaching new discoveries in wealth pro- 
 duction, which will make the most fa- 
 mous advances of the nineteenth century 
 mean by comparison. But without draw- 
 ing upon a speculative future, a better 
 and more systematic application of the 
 knowledge which has been already tested 
 
 — enlarged production, elimination of 
 waste, and improved business methods 
 
 — is clearly capable of doubling or tre- 
 bling the output of material wealth with- 
 out involving any excessive strain upon 
 human effort.
 
 INTERNATIONALISM 1 5 
 
 Here, as in other ways, America 
 stands in a place of unique vantage by- 
 reason of the magnitude and variety of 
 her national resources, and the vigor 
 and enterprise of her people. 
 
 \ It is evident that, if any country can 
 afford to stand alone in full economic 
 self-sufficiency, that country is America. 
 It is feasible for America to contract 
 within very narrow limits her commer- 
 cial and political relations with the rest 
 of the world, or, if she chooses, to con- 
 fine her commercial and financial rela- 
 tions to this continent, leaving the old 
 world to get on by itself as well as it can. 
 This view is, indeed, conformable with 
 the main tradition of American history 
 up to the close of the last century. /
 
 26 THE MORALS OF 
 
 Even the Spanish war, with its sequel 
 of imperialism, was but a slight and 
 reparable breach in this tradition. The 
 world war seems at first sight to have 
 plunged America deeper into the Eu- 
 ropean trough. But even this more seri- 
 ous committal is not irretrievable. She 
 can step back to the doctrine and policy 
 of 'America for Americans' and refuse 
 any organic contact with a troublesome, 
 a quarrelsome and, as it seems, a ruined 
 Europe. America's economic status in 
 Europe is not such as to preclude her 
 taking this course. I may be reminded 
 that the indebtedness of Europe to Amer- 
 ica is a solid economic bond, for it can- 
 not be presumed that America would 
 pursue the policy of liberalism so far as
 
 INTERNATIONALISM 27 
 
 to cancel this debt. But, large as is this 
 credit, it need not constitute a strong or 
 a lasting bond of commerce, compelling 
 America to receive such large imports 
 of goods from Europe as materially to 
 impair her self-sufficiency. A large and 
 increasing part of the interest and capital 
 of this indebtedness would be defrayed 
 by the expenditure of American travel- 
 lers and residents in Europe, while the 
 importation of objects of art and luxury 
 would not interfere appreciably with 
 the policy of economic nationalism. If 
 America decides to go no further in this 
 business, it will not be too late to draw 
 out. 
 
 The choice before her is momentous. 
 So far I have presented it as an economic
 
 28 THE MORALS OF 
 
 problem. It is also quite evidently a 
 political and moral problem of the first 
 significance, for economic national self- 
 sufficiency is a phase of political inde- 
 pendence. But business and politics alike 
 belong to the wider art of human con- 
 duct ; and the choice before America is 
 primarily a moral choice. 
 
 By saying this I do not wish to ap- 
 pear to prejudge the issue. I have always 
 felt that a stronger case could be made 
 for the political and economic isolation 
 of America than for that of any other 
 country, partly because, as I have said, 
 she has within her political domain all 
 the resources of national well-being; 
 partly, also, because it is of supreme im- 
 portance that the great experiment of
 
 INTERNATIONALISM 29 
 
 democracy should not be unduly ham- 
 pered by excessive inpourings of ill-as- 
 similable foreign blood, and by dangerous 
 contacts with obsolete or inapplicable 
 European institutions. As an economist, 
 steeped in the principles of Cobden and 
 his British school of liberals, my pre- 
 dilections (prejudices if you will) have 
 always been in favor of the freest possi- 
 ble movement, alike of trade and per- 
 sons, and against fiscal protection and 
 immigrant restrictions. But, when con- 
 fronted with the special situation of 
 America, I have recognized that a rea- 
 soned argument could be addressed to 
 prove that the economy of national se- 
 curity and progress for this country lay 
 along the lines of political, economic
 
 30 THE MORALS OF 
 
 and defensive self-containedness. I am 
 convinced that many must be led to 
 support this policy, not on grounds of 
 selfishness, because they desire to con- 
 serve for America alone her great oppor- 
 tunities, and not mainly from fear, lest 
 America should be embroiled again in 
 the dangerous quarrels of distant Eu- 
 ropean nations, but because they are 
 animated by that pure desire, which has 
 inspired so many generations of high- 
 minded Americans, that American de- 
 mocracy should grow to its full stature 
 by its own unaided efforts and save the 
 world by its example. 
 
 I wish to give due respect to the 
 sincerity of this conviction the more 
 because I wish to lay before you some
 
 INTERNATIONALISM 3 1 
 
 grounds for questioning its ultimate va- 
 lidity. It is no problem of abstract 
 politics or ethics with which I here 
 confront your minds, but one of con- 
 crete and immediate urgency. Distinc- 
 tively economic in its substance, it brings 
 right into the daylight the hitherto 
 obscure issue of the duty of nations as 
 members of an actual or potential society 
 of nations. As a result of the destruction 
 of war a large part of Europe lies today 
 in economic ruin. By that I do not only, 
 or chiefly, refer to the material havoc 
 wrought by the direct operations ot war 
 in France, Belgium, Poland, Servia, and 
 elsewhere. I mean the imminent starva- 
 tion which this winter awaits large popu- 
 lations of those and other countries, both
 
 32 THE MORALS OF 
 
 our allies and our late enemies, and the 
 misery and anarchy arising from their 
 utter inability to resume the ordinary 
 processes of productive industry. It is 
 not only food and clothing but raw ma- 
 terials, tools, machinery, transport, and 
 fuel that are lacking over a large part 
 of the European continent. If they are 
 left to their own unaided resources, 
 millions of these people, especially in 
 Russia, Poland, Austria, and sections of 
 the late Turkish Empire, will perish. 
 They cannot feed themselves. The land 
 remains, but large tracts of it have been 
 untilled; large numbers of the peasantry 
 have fallen in the war, or are wander- 
 ing as disbanded soldiers, far from home ; 
 the women and the aged and the chil-
 
 INTERNATIONALISM 33 
 
 dren, underfed and broken in health and 
 spirit, are utterly unequal to the task of 
 growing the food for their livelihood. 
 The factories and workshops are idle or 
 are ill-equipped, for materials, tools, and 
 fuel are everywhere lacking; unemploy- 
 ment holds large industrial populations 
 in destitution and despair. Even where 
 plant and materials are present, the physi- 
 cal strength of the workers is so let 
 down that efficient productivity is im- 
 possible. Even in countries that are not 
 war-broken, the blockade, and the long 
 stoppage of normal commerce, have 
 caused great scarcity of many important 
 foods and materials, and famine prices 
 bring grievous suffering to the poorer 
 classes. Britain alone among the bellig-
 
 34 THE MORALS OF 
 
 erent countries is not in immediate dis- 
 tress, but only because she has had larger 
 outside resources and larger borrowing 
 powers on which to draw. Even the few 
 neutral nations which are said to have 
 profited by war are severely crippled by 
 the lack of some essentials of their eco- 
 nomic life. 
 
 All in different degrees are economic 
 victims of the havoc and the waste of 
 war. It is not Central Europe only, to- 
 gether with large parts of the Balkans, 
 of Russia, and of Eastern Asia, that is 
 in this evil plight. Europe as a whole 
 is unprovided with the foodstuffs with 
 which to feed its population and the 
 raw materials with which to furnish 
 employment. If there were prevailing
 
 INTERNATIONALISM 3 5 
 
 among them the best of wills and of 
 cooperative arrangements, the European 
 peoples could not keep themselves alive 
 this winter and make any substantial 
 advance towards reparation of the damage 
 of war and industrial recovery. If hu- 
 man cooperation is to save these weak 
 and desperate peoples, it must be a co- 
 operation of more than the nations of Eu- 
 rope. Only by the better provided na- 
 tions of the world coming to the rescue 
 can the worse-provided nations survive 
 and recover. It would be foolish to mince 
 words in so grave an issue. We are all 
 acquainted with the main facts of the 
 world situation and are familiar with the 
 place which America occupies in it as 
 the chief repository of those surpluses
 
 26 THE MORALS OF 
 
 of foods, materials, and manufactured 
 goods which Europe needs so sorely. 
 The term * surplus' is, of course, some- 
 what deceptive. Surplus depends largely 
 on home consumption, itself an elastic 
 condition. But for practical purposes 
 we m^y take the exportable surplus to 
 mean the product which remains for 
 sale abroad after the normal wants of 
 the home population are supplied. It 
 might mean something more, viz., that 
 the home population would voluntarily 
 keep down or reduce their consumption, 
 in order that more might be available 
 for export. The American people actu- 
 ally did exercise this self-denying ordi- 
 nance to an appreciable extent, in order to 
 help win the war. Are they willing to do
 
 INTERNATIONALISM 37 
 
 the same in order to help the world in 
 a distress as dire as war itself? 
 
 It may be said, perhaps truly, that this 
 presumes that America is in the peace 
 as much as she was in the war, that she 
 has decided to link her destiny closely 
 and lastingly with that of Europe, that 
 she definitely accepts a proffered place 
 as a member of the society of nations, 
 and under circumstances which make 
 an immediate call upon her economic 
 and financial resources in a manner in 
 which there can be no direct reciprocity. 
 
 Now it may reasonably be urged that 
 America is not prepared for such a com- 
 mittal, that such obligations as she under- 
 took, as an associated power, in the con- 
 duct of the war, terminate with the 
 
 53180
 
 38 THE MORALS OF 
 
 making of peace ; and that, as regards 
 the future structure of international re- 
 lations, she proposes to preserve full 
 freedom to cooperate with other nations, 
 or to stand alone, according to her esti- 
 mate of each occasion. 
 
 It is here convenient to treat sepa- 
 rately two issues which are none the less 
 closely related, viz., the issue of inter- 
 national cooperation for the immediate 
 work of the salvage and restoration of 
 Europe, and the issue of a permanent 
 cooperation or agreement for the equi- 
 table use of the economic resources of 
 the world. The urgency for Europe of 
 the first issue has been already indicated. 
 If the weaker European nations are left 
 to the ordinary play of economic laws
 
 INTERNATIONALISM 39 
 
 for the supplies they need, they must 
 lapse into starvation and social anarchy. 
 A lifting of the war blockades and em- 
 bargoes hardly helps them. The formal 
 restoration of free commerce is little 
 better than a mockery to those who lack 
 the power to buy and sell. Free com- 
 merce would simply mean that Amer- 
 ica's surplus, the food, materials, and 
 manufactured goods she has to sell 
 abroad, would be purchased exclusively 
 by those more prosperous foreigners who 
 have the means to pay in money, or in 
 export goods available for credit pur- 
 poses. Now the populations and the 
 governments of these broken countries 
 have neither money nor goods in hand. 
 The return of peace has left them with
 
 40 THE MORALS OF 
 
 depleted purses and empty stores. If the 
 purchase and consumption of the avail- 
 able surplus of foods, materials, and 
 manufactures from America and other 
 prosperous countries is distributed ac- 
 cording to the separate powers of pur- 
 chase in the European countries, the 
 countries and the classes of population 
 which are least in need will get all, 
 those which are most in need, nothing. 
 How can it be otherwise, if immediate 
 ability to pay is the criterion ? In ordi- 
 nary times the machinery of interna- 
 tional finance does tend to distribute 
 surplus stocks according to the needs of 
 the different nations, for the production 
 of the actual goods for export trade with 
 which imports are paid for, the true
 
 INTERNATIONALISM 41 
 
 base of credit, is continually proceeding. 
 But the war broke this machinery of 
 regular exchange. It cannot be imme- 
 diately restored. America or Argentina 
 cannot sell their surplus wheat in the 
 ordinary way to Poland, Austria, Bel- 
 gium and other needy countries, because, 
 largely for the very lack of these goods 
 and materials, their industries are not 
 operating, so that the goods they should 
 produce, upon which credit would be 
 built, are not forthcoming. 
 
 This is one of the most terrible of 
 the vicious circles in which the war has 
 bound the world. The weak nations 
 cannot buy, because they are not pro- 
 ducing goods to sell ; they cannot pro- 
 duce, because they cannot buy. What
 
 42 THE MORALS OF 
 
 are the strong nations, those with sur- 
 plus goods, the transport, and the credit, 
 going to do about it? It is a question 
 of emergency finance based on an emer- 
 gency morality. The nations which have 
 surpluses to sell abroad must not only 
 send the goods but provide the credit to 
 pay for them if they are to reach the 
 peoples that need them most. But how, 
 it is said, can you expect the business 
 man in America or any other country 
 to perform such an act of charity ? How 
 can you expect them to sell to those 
 who have not credit and cannot pay, in- 
 stead of selling to those who have credit 
 and can pay ? The answer is sometimes 
 stated thus. It is not charity you are 
 asked to perform, but such consideration
 
 INTERNATIONALISM 43 
 
 for customers as a really intelligent sense 
 of self-interest will endorse. We ask you 
 to put up a temporary bridge over the 
 financial chasm in order to afford time 
 for this restoration of the ordinary proc- 
 esses of exchange. If the enfeebled in- 
 dustrial peoples can be furnished now 
 with foods and materials they will set 
 to work, and in the course of time they 
 will be able, out of the product of their 
 industry, to repay your advances and re- 
 establish the normal circle of exchange. 
 In presenting this course as a polic}' 
 of intelligent self-interest, I am not 
 really disparaging the claims of human- 
 ity or of morals. I am merely maintain- 
 ing the utilitarian ethics which insist 
 that morality, the performance of human 
 
 /
 
 44 THE MORALS OF 
 
 obligations, is the best policy, that policy 
 which in the long run will yield the 
 fullest satisfaction to social beings. If I 
 were an American exporter in control 
 of large amounts of food, it would doubt- 
 less pay me better personally at the pres- 
 ent time to sell it to firms in European 
 countries which have good credit, for 
 consumption by people who are in no 
 great want. As an individual business 
 man, I could hardly do otherwise with 
 any assurance of financial profit. I am 
 not here presenting the issue as a matter 
 of individual morals. If the surplus of 
 economic supplies is to be distributed 
 according to needs, on an emergency 
 credit basis adjusted to that end, it is 
 evident that this can be done only by
 
 INTERNATIONALISM 45 
 
 international cooperation. This shifts 
 the moral problem from the individual 
 to the nation. Rich nations, or their 
 governments, are asked to assist poor 
 nations by making an apportionment of 
 goods and credit which the individual 
 members of the rich nations, the owners 
 of the surplus, would not make upon 
 their own account. The edge of this 
 issue should not be blunted. If the people 
 and government of America were only- 
 concerned to let their individual citi- 
 zens extort the highest prices they could 
 get for their surplus in the best markets, 
 they would let Central and Eastern Eu- 
 rope starve. If, however, they also take 
 into account the social, political, and 
 economic reactions of a starving Europe
 
 46 THE MORALS OF 
 
 upon the future of a world in which 
 they will have to live as members of a 
 world society which must grow ever 
 closer in its physical, economic, and 
 spiritual contacts, they may decide dif- 
 ferently. The issue arises in the highest 
 economic sphere, that of finance. Are 
 the nations and governments of the 
 world sufficiently alive to the urgency 
 of the situation to enter into an organ- 
 ization of credit for the emergency use 
 of transport and for the distribution of 
 foods and materials on a basis of proved 
 needs ? The richer nations, in propor- 
 tion to their resources, would appear to 
 be called upon to make a present sacri- 
 fice for the benefit of the poorer nations 
 in any such pooling of credit facilities.
 
 INTERNATIONALISM 47 
 
 That risk of sacrifice, however, need 
 not be great, and need not be felt at all 
 by the individual members of rich na- 
 tions, provided that the hitherto unused 
 resources of national credit can be built 
 into a strong structure of mutual sup- 
 port. If America were invited to find 
 adequate credits for Italian or Polish 
 needs at the present time, she might 
 well hesitate. But if a consortium of 
 European governments, including Brit- 
 ain and the richer neutrals, were joint 
 guarantors of such advances, this co- 
 operative basis might furnish the nec- 
 essary confidence. It is not within my 
 scope to discuss the various forms a finan- 
 cial consortium might take; whether 
 America, as representative of the credi-
 
 48 THE MORALS OF 
 
 tor nations, should enter such a consor- 
 tium, or should approach the organized 
 credit of Europe in the capacity of a 
 friendly uncle. It must suffice here to 
 indicate the moral test which this grave 
 issue presents to the nations regarded as 
 economic powers. 
 
 Upon the policy adopted for this 
 emergency will doubtless depend in large 
 measure the whole future of economic 
 internationalism. For not only does con- 
 fidence grow with effective cooperation, 
 but upon this post-war cooperation be- 
 tween nations for an emergency com- 
 merce and finance, or its rejection, will 
 depend not only America's future place 
 in a world society but the structure of that 
 world society in its essential character.
 
 INTERNATIONALISM 49 
 
 For in each great nation of the world 
 the same great choice, the same great 
 struggle of contending principles and 
 policies, is taking place. National self- 
 dependence or internationalism — that 
 is everywhere the issue. It is true that 
 in no European country can that issue 
 be so sharply presented as in America. 
 For economic self-sufficiency in a full 
 sense and, therefore, political isolation, 
 is not possible for any European state. 
 Even a peaceful and reviving Russia 
 must lean upon her more advanced 
 neighbors for the economic essentials 
 of capital and organizing skill. But the 
 several nations can strive to reduce their 
 interdependence and their national aid 
 to the narrowest dimensions, and where
 
 50 THE MORALS OF 
 
 they cannot free themselves from ex- 
 traneous alliances they can restrict the 
 area of economic dependence within 
 a chosen circle. Britain, for example, 
 could set her policy closely and consist- 
 ently to make her world-wide empire 
 into a self-sufficing system, and if, as is 
 likely, she learned that even the diver- 
 sified fifth of the entire globe which 
 owns allegiance to her Crown could not 
 satisfy all her wants, she could eke out 
 this inadequacy with some carefully se- 
 lected and purchased friendships. 
 
 This] harking back to an economic 
 nationalism is a natural reaction of the 
 war, and is fed by a dangerous and pre- 
 carious peace. Fear, greed, and suspicion 
 prompt the victorious nations to guard
 
 INTERNATIONALISM 5 1 
 
 their gains by reverting to a close na- 
 tionalism or a ringed alliance ; humilia- 
 tion, without humility, the bitter pain 
 of thwarted ambitions, resentment at 
 their punishment, dispose the vanquished 
 nations to keep their own company and 
 form if possible, an economic system 
 of their own. A prolonged war, followed 
 by a bad peace, may leave this indelible 
 scar upon the growing economic inter- 
 nationalism of the world. 
 
 The richly nourished patriotism of 
 war breeds divisions and antagonisms 
 which are easily exploited afterwards by 
 political, racial, religious, and cultural 
 passions, but most of all by economic 
 interests. 
 
 Before the war internationalism was
 
 52 THE MORALS OF 
 
 visibly advancing with every fresh dec- 
 ade. The bonds of commercial and 
 financial intercourse between the peoples 
 of different countries were continually 
 woven closer ; the policy of self-suf- 
 ficiency was continually giving way 
 before the superior economy of speciali- 
 zation on a basis of natural or acquired 
 advantages. Any reversal of this policy 
 would be far costlier than may at present 
 appear, even for those countries best 
 qualified by size and resources to stand 
 alone. 
 
 For it is not merely the direct sacri- 
 fice of the wider world economy of pro- 
 duction and exchange, the advantage of 
 a wider over a narrower area of free 
 commerce, that is involved. It is the in-
 
 INTERNATIONALISM S3 
 
 direct perils and costs of the policy of 
 close nationalism or restricted economic 
 alliances that count heaviest. For eco- 
 nomic nationalism means protective and 
 discriminative tariffs, and a conservation 
 of national, imperial or allied resources 
 within a circle of favored beneficiaries. 
 This is the temptation held out to the 
 British people today by the protectionist 
 interests working upon the animosity 
 of the war spirit and the sentiment of 
 imperialism. The welding of an empire 
 into an independent economic system, 
 the conservation of essential or key in- 
 dustries and the safeguarding of our 
 industries against "dumping," are the 
 ostensible objectives of a policy whose 
 chief driving motive and end is the es-
 
 54 THE MORALS OF 
 
 tablishment of strong industrial, com- 
 mercial and financial trusts and combi- 
 nations, defended by tariff walls, and 
 endowed with the profits of monopoly. 
 /There are two difficulties in such a 
 course of action, which, though espe- 
 cially urgent in the case of Britain, beset 
 every great country that chooses the same 
 path, and not least, America. The first 
 is the fomentation of a class war, based 
 upon divisions of interests between capi- 
 tal and labor, producer and consumer, 
 protected and unprotected industries. 
 The initial skirmishes of such a conflict 
 are already visible in every country where 
 wages, prices, and profiteering are burn- 
 ing issues. I would most earnestly ap- 
 peal to thoughtful citizens in this as in
 
 INTERNATIONALISM 55 
 
 my own country to pause before heap- 
 ing fuel on these fires. For the policy 
 of national self-sufficiency or isolation 
 means nothing less than this. Not merely 
 does it strengthen the power of capi- 
 talistic combinations and thereby incite 
 labor unions to direct action, black- 
 mailing demands, and sabotage. Not 
 merely does it let loose upon the busi- 
 ness world all sorts of ill-considered 
 governmental interferences for the fixa- 
 tion of prices or subsidies to consumers. 
 It keeps alive and feeds the habit and 
 the spirit of strife. For it was no accident 
 that the great international war left as 
 its legacy smaller international class wars 
 in European countries. Remove from a 
 nation the economic supports it formerly
 
 S6 THE MORALS OF 
 
 received from other nations, markets 
 wherein to buy and sell, and you starve 
 that nation; and starvation breeds class 
 war and anarchy. Can any one doubt 
 this with the terrible examples of Russia 
 and Hungary before their eyes ?f But it 
 is not a matter of war conditions alone. 
 Carry through a policy of economic na- 
 tionalism, under which all the large and 
 well-equipped nations and empires con- 
 serve for their exclusive uses the national 
 resources they command, and what hap- 
 pens ? The smaller and the poorer nations, 
 however free in the political sense, be- 
 come their economic bond slaves, at the 
 mercy of the master states for their foods 
 and other necessaries of life. Take the 
 case of Austria under the new conditions.
 
 INTERNATIONALISM 57 
 
 with a thick population concentrated in 
 a great political capital suddenly deprived 
 of all free access to its former sources of 
 supply and the markets it used to serve. 
 For her it is a sentence of economic 
 strangulation. Here is an extreme in- 
 stance of the effect of economic isolation 
 on a weak country. But the dangerous 
 truth may be more broadly stated. A 
 very few great empires and nations to- 
 day control the whole available supplies 
 of many of the foods, fabrics, and metals, 
 the shipping and finance, that are es- 
 sential to the livelihood and progress 
 of every civilized people. Are Britain, 
 America, France, and Japan — and espe- 
 cially the two greatest of these powers — 
 going to absorb or monopolize for their
 
 58 THE MORALS OF 
 
 exclusive purposes of trade or consump- 
 tion these supplies which every country- 
 needs, or are they going to let the rest 
 of the world have fair access to them ? I 
 think this to be upon the whole the most 
 important of the many urgent issues that 
 confront us. For, if close nationalism or 
 imperialism should prevail, the weaker 
 placed nations could not acquiesce. 
 Close economic nationalism is not for 
 them a possibility. They must win ac- 
 cess to the world's supplies, peacefully 
 if possible, or else by force. 
 
 The fatality of the great choice is 
 thus evident. Nations must and will 
 fight for the means of life. Close eco- 
 nomic nationalism or imperialism on the 
 part of the great empires must, there-
 
 INTERNATIONALISM 59 
 
 fore, compel the restricted countries to 
 organize force for their economic liber- 
 ation. This in turn will compel the 
 great empires to maintain strong mili- 
 tary and naval defences. It is impossi- 
 ble for the other nations of the earth to 
 leave the essential supplies of metals, 
 foods, and oils, and the control of trans- 
 port in the exclusive possession of one 
 or a few close national corporations or 
 a permanent ** Big Four." Under such 
 conditions the sacrifices of the great war 
 would have been made in vain. Noth- 
 ing would have been done to end war, 
 or to rescue the world from the burden 
 of militarism. The pre-war policy of 
 contending alliances and of competing 
 armaments, draining more deeply than
 
 6o THE MORALS OF 
 
 ever the surplus incomes of each people, 
 would be resumed. And it would bring 
 no sense of security, but only the post- 
 ponement of further inevitable conflicts 
 in which the very roots of western civi- 
 lization might perish. 
 
 The renewed and intolerable burdens 
 of such a militarism, with its accom- 
 paniments of autocracy, must let loose 
 class war in every nation which has 
 gone through the agony of the European 
 struggle and has seen the great hope of 
 a peaceful internationalism blighted. 
 
 It is predominantly upon America and 
 Britain that this great moral economic 
 choice rests, the choice on which the 
 safety and the progress of humanity de- 
 pend. A refusal by either of these great
 
 INTERNATIONALISM 6 1 
 
 powers can make any league of nations 
 and any economic internationalism im- 
 possible. The confident consent of both 
 can furnish the material and moral sup- 
 port for the new order. If these coun- 
 tries in close concerted action were pre- 
 pared to place at the service of the 
 new world order their exclusive or supe- 
 rior resources of foods, materials, trans- 
 port and finance — the economic pillars 
 of civilization — the stronger pooling 
 their resources with the weaker for the 
 rescue work in this dire emergency, this 
 political cooperation would supply that 
 mutual confidence and goodwill with- 
 out which no governmental machinery 
 of a League of Nations, however skil- 
 fully contrived, can begin to work.
 
 62 THE MORALS OF 
 
 I have spoken of Britain and America 
 as the two countries upon whose choice 
 this supreme issue hangs. But the act 
 of choice is not the same for the two. 
 The British imperial policy (apart from 
 that of the self-governing dominions) 
 has been conducted on a basis of free 
 trade or economic internationalism. A 
 reversion to close imperialism would 
 be for her a retrogression. The United 
 States, on the other hand, has practised 
 a distinctively national economy, and 
 the adoption of a free internationalism 
 would be a great act of faith, or — as 
 some would put it — a leap in the dark. 
 
 I prefer the former term as indicative 
 of the new truth which is dawning on 
 the world, the conviction that just as
 
 INTERNATIONALISM 61, 
 
 an individual can only fully realize his 
 pers®nality in a society of other indi- 
 viduals, that is, a nation, so nations can- 
 not rise to the full stature of nationalism 
 save in a society of nations. For only 
 thus can nationality, either in its eco- 
 nomic or its spiritual side, make full use 
 of its special opportunities for the devel- 
 opment of a distinctive national char- 
 acter. The supreme challenge is, there- 
 fore, not to the continental European 
 nations, not even to Britain, but to 
 America. For her alone the choice has 
 the full quality of moral freedom. For 
 she alone is able to refuse. Other great 
 western nations might seek to stand alone 
 for economic life and for defence. They 
 could not long succeed; they are too
 
 64 THE MORALS OF 
 
 deeply implicated in one another's des- 
 tinies. Even Britain with her vast extra- 
 European territories could not hope to 
 disentangle herself from the affairs of 
 her near neighbors. America could do 
 this, at any rate for some considerable 
 time to come. True she has economic 
 committals in Europe. She has loaned 
 European governments and peoples some 
 ten milliards of money. She is still lend- 
 ing her credit to support the large sur- 
 plus supplies of foods and other goods 
 she is selling Europe. If this business is 
 to continue, it will implicate her even 
 closer in European affairs. Europe in its 
 present case can hardly be presented as 
 a safe business proposition. If America 
 proceeds along this path, it will be be-
 
 INTERNATIONALISM 6s 
 
 cause she looks beyond the immediate 
 risks to the wider future of a safer and 
 more prosperous world. She could now 
 draw out; she could cut the present eco- 
 nomic losses of her European loans; she 
 could divert her attention from the Eu- 
 ropean markets to the development of 
 the American continent as the principal 
 area for the disposal of her surplus goods 
 and energies. 
 
 It is open to her to take this course. 
 Prudence may seem to dictate it. The 
 reckless mismanagement of European 
 governments, the wild unsettlement of 
 peoples, the badness of the peace, are, 
 indeed, strong arguments for America 
 cleaving to her old ways. 
 
 Europe has no rightful claim upon
 
 66 THE MORALS OF 
 
 America, either for the urgent work of 
 economic rescue, or for participation in 
 the permanent project of a society of 
 nations. America not only has the right 
 to refuse; it is probably to her immedi- 
 ate interest to refuse. But, at the risk 
 of misinterpretation, as an officious out- 
 sider, I will venture to present an appeal 
 to the wider and deeper interests of 
 Americans. The refusal of America not 
 only shuts the gate of hope for millions 
 of war-broken, famine-ridden people in 
 Central and Eastern Europe, it removes 
 the keystone for the edifice of a society 
 of nations. For effective international 
 cooperation in economic resources and 
 opportunities is the indispensable condi- 
 tion of such a society. No League of
 
 INTERNATIONALISM 67 
 
 Nations can survive its infancy without 
 this economic nourishment. The world's 
 weahh for the world's wants: unless this 
 maxim can in some effective way be 
 realized, no such escape has been made 
 from the pre-war policy of greed and 
 grab as will furnish a reasonable hope 
 for a world redeemed from war — a 
 world clothed and in its right mind. 
 
 Is it not the larger and the longer 
 hope and interest of America to live as 
 a great partner in such a society of na- 
 tions, rather than to live a life of iso- 
 lated prosperity, perhaps the sole survivor 
 in the collapse of western civilized states ? 
 I make this appeal in the language of 
 Edmund Burke, in his great plea for 
 conciliation with America, when he re-
 
 68 THE MORALS OF 
 
 minded his hearers that " Magnanimity in 
 poHtics is not seldom the truest wisdom." 
 This, I venture to say, is the true appeal 
 of Europe to America today. Burke's 
 words, I feel, must kindle conviction in 
 every generous heart, for in the last re- 
 sort it is the desire of the heart and not 
 the calculation of the intellect that gov- 
 erns and should govern human conduct. 
 For morality among nations, as among 
 individuals, implies faith and risk-taking, 
 not recklessness, indeed, but dangerous 
 living, a willingness and a desire to take 
 a hand in the largest game of life and 
 continually to "pluck out of the nettle, 
 danger, safety"; but this safety itself 
 only as a momentary resting-place in the 
 unceasing urge of nations to use their
 
 INTERNATIONALISM 69 
 
 nationality, not for the achievement 
 of some selfish separate perfection, but 
 for the ever advancing realization of na- 
 tional ends within the wider circle of 
 humanity.
 
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