I A Just International Order
wE discussed last week the effects of the
" Most Favoured Nation " clause on international economics. We saw how the existence of this clause militated against the division of the world into clearly-defined and stable credit area:.
It would surely be worth enquiring what is the origin of the persistence which has perpetuated the insertion of this clause into all treaties and has thus provided so powerful a ground for international exacerbation.
First of all let us admit that the tendency to expand business as much as possible and so seize on any bit of profit that happens to be going is pretty normal to human nature. Nevertheless the deliberate encouragement of this tendency does indicate the presence of a " short range " point of view in the counsels of Authority, and that is precisely the sort of point of view which Public Authority should seek to avoid.
The whole tendency derives from that exaltation of speedy returns into the directive principle of economic policy, on which 1 have dwelt so often in these
pages. and on which 1 may dwell again, for it iS the chief disintegrating factor of our time.
This disihtegrating factor derives from one cause the divorce between the " Accounts End " and the " Production End " in our business life, the growing contactl and direction of invertible funds by people who have no direct personal ties with the business of production, and who often seek to profit by purely illusory rises in share values.
There is thus a direct connection between the faulty distribution of capital and international peace. A business which is controlled by those who own the whole or a substantial part of its capital, and which is unencumbered by debt, will, on the whole, take the " long range " rather than the " short range " view: will prefer a moderate and stable turnover and the building up of a stable and permanent goodwill to hectic expansionism.
I am here, of course, speaking of general tendencies only, of a way of looking at things. But I am certainly convinced that when capital is widely distributed you get a state of affairs more likely to be in harmony with the credit union than where the contrary is the case.