5. National aspirations as a impor tant element has been left out in this picture. No mention has been made of national aspirations, of the ambitions for national development which form such an important factor in directing the destinies of na tions. The international division of labor might be taken to mean that some countries would develop as industrial nations and others would never leave the agricultural status. This is, of course, wholly im possible.
But even as a description of conditions this inter national division of labor is not true to fact. No such harmonious division of labor exists. Nations are continually attempting, and in many cases suc cessfully, to wipe out the limitations of specialization and are undertaking production for which their re sources and experience do not logically fit them. The truth is that international competitive strength is increasingly determined by organization. Not na tional resources but superior management generally count for most in the world struggle.
6. Industry as an impetus to foreign principle of dumping as a business policy, described in the last chapter, should make it clear that foreign trade among the more developed nations tends to become a scramble for markets in which the driving force is the machine capacity. The process swings in a circle: sell more to produce cheaper in order to sell more, etc., etc. The process is not necessarily a vicious one. Industry can be so diversified as to meet the world's growing demands.
But there is another, a short-sighted view to take of the process. Germany took and held to it in the half century preceding the Great War. Former Chancel lor von Caprivi once said: "The time is not far off that Germany will have to export goods or men." And she could not conceive the wisdom of letting men go. Her formidable competition in the world mar kets was the result of her conception of it as a social and economic necessity, a necessity resulting from over-production and over-population at home. As the industry and along with it the foreign trade of the empire developed, the emigration fell off heavily, even tho the population nearly doubled. The growth was largely urban, the food producing population in the meantime remaining about stationary.
Tho the German traders succeeded in placing their goods hi all the markets of the world, great uneasi ness always existed among them. It always seemed to them that Germany was walking on thin ice. The
closing of any of the markets to German products would naturally spell ruin to many industries and would mean unemployment at home. The possi bility of this always confronted them. With it went always the need for still greater expansion. New markets must be found and the existing markets se curely safeguarded.
7. Raw a nation develops indus trially it becomes necessary to go outside its borders for some at least of the raw materials it needs for its factories. Foreign trade, therefore, after it reaches a certain stage of development, means the selling of finished or partly finished goods and also the buying of raw materials.
These raw materials and foodstuffs can as a rule be obtained only in countries less highly developed in dustrially. The products of the mills and factories are, therefore, exchanged in these countries for the ores, the wheat and the coal needed at home. The exchange is determined, like any other business trans action, by relative prices. The goods are sold where they will bring the best return expressed in raw ma terials and foodstuffs. This market need not always be an undeveloped country. IIolland, Switzerland and France received coal from Germany in exchange for their manufactured products. Many highly de veloped commercial nations are the centers of dis tribution for raw products gathered from afar. Ant werp and London are the markets for ivory and rub ber, Bordeaux is a market for coffee. Cotton is sold in the exchanges of Liverpool, Hamburg and Rotter dam. From many points of view, trade in raw mate rials is no less important, therefore, than trade in manufactured goods.
8. Colonial possessions. —A nation which has a monopolistic control over an essential raw product can throttle the progress and threaten the very existence of the industrial nations dependent upon this product for their factories. Thru the valorization scheme in Brazil, where 75 per cent of the world's coffee is grown, the price of coffee in all countries has been raised. Should any country obtain a corresponding control over the rubber, iron or tin output, the other nations would be at its mercy. It may be remem bered with what consternation the news was received in the United States that Holland had put an em bargo upon the exportation of tin. Had the news been correct, the United States' preparation for war would have been seriously retarded.