Economic Nationalism

Economic Nationalism

For more than a hundred years government intervention in matters of trade was confined to certain forms of protective tariff, mild subsidies for some industries, and occasionally an export bounty. These were very faltering introductions to the dynamic quality of economic nationalism which began with World War I and in no small measure was the cause of World War II. In the first place, the spirit of national supremacy which found its early expression in the work of the German philosophers spread across the world. It took hold of nations which felt themselves oppressed or cheated of a place of prominence, and it brought into positions of authority men who by domination organized these nations economically and politically for a vast effort to take by force the advantages which other nations held by rights gained long ago. Freedom of individual enterprise gave place to government regulated policies. Automatic processes were condemned as wasteful and inefficient. Regulation and planning were substituted. Dictation of imports and exports was merely one aspect of a dictator controlled economy, or autarchy. In the second place, these nations were dependent for their war effort upon raw materials which were owned and controlled by the nations upon which they expected to make war.


During the period of preparation, while business was conducted as usual, the government regulated imports and exports so that vast stores of war materials could be accumulated. In the case of Germany, this meant extensive government subsidies for the export trade, so that merchants might continue to sell even below the prevailing price of foreign competitors, and thus acquire foreign exchange. Cost of production or the laws of supply and demand no longer entered the price fixing policies of the German merchants in their search for foreign markets. To fight this kind of competition rival nations were forced to resort to other means just as far removed from ordinary business practices. The conduct of international trade according to the previously held economic laws was no longer possible. National barter, in which for example so much machinery was exchanged for a certain quantity of oil, in many instances eliminated the necessity of money exchange altogether. Finally, both to increase national prestige and to assure the nation of dependent colonies to furnish raw materials and provide a market for manufactured goods, these nations began a war of territorial expansion. The theory, given wide publicity both in Germany and Japan, was that independent economic regions could be established with a great industrial nation at the head. Within each region would exist free trade and self-sufficiency. Since all regions would have at hand vast populations for markets, new materials, and industrial skills each would prosper, none would need feel inferior to the other. Opposition to the programs of these nations was instantaneous. Whatever might be the logic of their plans, their methods of unwarranted aggression, regimentation, oppression, and enslavement could bring nothing but war.