ECONOMIC NATIONALISM

Otago Daily Times, Issue 22326, 28 July 1934, Page 14

ECONOMIC NATIONALISM

AN ALTERNATIVE TENDENCY Dr Otto Christian Fischer is a member of the Council of the International Chamber of Commerce, president of the Central Association of the German Banking Industry and head of the banking and credit section of the newly created corporative organisation set up to embrace the whole of industry, trade and commerce in Germany. While thus speaking with authority from the German point of view, at the same time his opinions on international trade are worthy of consideration. The present state of affairs if continued, he informed a representative of World Trade, must lead to the death of international trade, for though the decline in international trade has come to a halt, , the meaning of the halt is that, each country is only buying from others the quantity of goods without which their national existence would be endangered. Many Governments are pursuing a deliberate policy of restriction and hope to succeed in accustoming the economic organism of their countries, to absorbing a progressively smaller amount of nourishment. Such measures he declares are unavoidable as a means of defence by countries which have an unfavourable balance of trade and foreign payments. They have no other way out. But if restrictive trade policies are also adopted by the countries which ‘are not compelled to do so by circumstances, international trade will receive a death blow. Dr Fischer considers that there are two categories of financial factors concerned in the future development of world? trade. First, there are those arising inevitably out of the present situation of world commerce for countries dependent on the purchase of raw materials from foreign countries. Secondly, there are the financial difficulties which arise from the need to find' interest and amortisation on old debts; and in this connection debts not represented by any economic assets such as war debts and reparations aggravate the situation more particularly. The difficulties arising out of current business can be relieved by a skilful system of commercial treaties; the second order of difficulties can only be got out of the way if we remember fundamental economic laws, and are prepared to learn from the peasant that even the best cow must be fed before she can yield any milk and the price paid for the cow cannot be redeemed out of the proceeds of milk given in a single month. A psychological factor militating amongst economic improvement, apart from political distrust, is a growing scepticism concerning the advantages of the international division of labour, and is due to the constant increase of Customs tariffs, barriers to foreign trade, unstable currencies, and discrimination, but above all to a growing ignorance about, international economic questions in those circles which determine international policy. Then comes in Dr Fischer’s defence of Germany. If he says owing to insurmountable exchange difiiculties a counf.y like Germany finds herself obliged to aim at a greater development of her own economic forces, she does so as a measure of defence which cannot be renounced as long as international economic policy continues along the lines adopted up to now. Closely knit national economics will continue to require a considerable amount of additional products which, owing to climatic or geographical conditions, cannot be produced at home or only at greatly-increased cost. On such a foundation a sound exchange of goods and services freed from excessive fluctuations can develop within certain limits. So there is the tendency towards the formation of regional economic areas with intensified interchange of goods, such as the British Empire, the economic area of the United States, France with her colonial Empire, and the Netherlands with flic Dutch East Indies. It is the duty of Governments, Dr Fischer continues, to assure their country that measure of buying power on the international markets without which neither those markets nor the economic life of their own country can exist. Yet it is often forgotten that buying is a reciprocal business. Governments often believe that they have done all they ought to do if they take steps to see to it that, their own nationals buy nothing from other countries, although at the same time other countries are exhorted to buy abroad as much ns possible.