III The Socialist Movement for a United States of Europe

The Socialist Movement for a United States of Europe The Setting. At the beginning of 1947, several eminent European specialists met in London to discuss the problem of European unification. The growing importance and popularity of the unification problem had brought them together. After several days of discussion they decided to set up an "International Committee for Study and Action on behalf of a Socialist United States of Europe." The task which they assigned to the Committee consisted of the study of the unification problem and the publication of socialist literature on European unification. The result of its studies naturally had to be in agreement with the doctrines of socialism and ultimate socialist goal: creation of "a socialist Europe which is economically and politically independent." Moreover, the Committee was to fight against the creation of a Europe which is "capitalistic, reactionary, militarist and too submissive to American influence." Finally, a provisory commission was set up with the task of contacting the socialist parties throughout Europe and preparing the first constitutional congress for the "Socialist Movement for European Unification."

This Congress convened at Montrouge, near Paris, in June 1947, where the socialist parties of several European countries were represented. The strong participation of French socialist parties led to the election of one of their members, M. Marceau Pivert, as president of the movement. At this congress the representatives fully agreed that a "United States of Europe" was desirable, provided it was socialistic. All other schemes of unification were rejected as "capitalistic," "reactionary," or even "militaristic." Some representatives also emphasized that the social and economic successes won 85 86 DOCTRINES AND PLANS OF UNIFICATION by the socialist parties for the labor class should not be sacrificed for European unification. If socialists had a choice between a united "capitalist" Europe and the contemporary disunited Europe with its socialist successes, they unhesitatingly would prefer the contemporary state of Europe.

The Conflict. Soon after the meeting at Montrouge the International Committee found itself in opposition to the official socialist parties which it felt called upon to criticize for their "inefficient bureaucratism." The party organizations, on the other hand, found reason to mistrust the Committee for being "too radical" and for "representing the viewpoint of the radical wing of European socialism." Furthermore, the socialist party leaders often occupied high positions in national governments. They naturally resented the Committee's criticism of their own policies. Sometimes the members of the Committee even had the audacity to label party policies as "liberal" and "capitalistic," which, indeed, is the greatest insult that can be dealt to a socialist party leader. The International Committee uncompromisingly adhered to the idea of a socialist Europe and fought all other movements for European unification. When all other United Europe movements embracing different political ideologies met at The Hague in May 1948, the Executive Committee unhesitatingly rejected the invitation to attend. The statement that Mr. Churchill, "this reactionist and labor baiter" as he is called by European socialists, would attend and play a leading role in the meeting, was sufficient to cause this rejection. When the full Committee met at Puteaux about a month later, the position of the Executive Committee was upheld. The full Committee also discussed and accepted the annual report which set forth the danger of capitalism seeking to regain, under the cloak of European unification, the power it lost since the growth of the socialist parties. Committee members also repeatedly stated that a renunciation of national sovereignty in favor of a union would not necessarily constitute political and social progress; only the transfer of sovereignty to a socialist European government would signify such progress. A European federation would require abandonment of "national planning" in favor of "European planning." This would be all right and in full agreement with the socialist tradition and doctrine, provided European planning was also socialistic. However, under present conditions, there was the danger that abandonment of national sovereignty would be identical with giving up the socialist successes won over capitalism in recent years. Thus unification would only constitute social and economic decline and retreat MOVEMENT FOR A UNITED STATES OF EUROPE 87 in favor of European supercapitalism which in turn would be controlled by American big finance in Wall Street.

This attitude was and still is reflected in many socialist periodicals and newspapers in Europe.1 Socialists want a United States of Europe, but they want their kind of union or none at all, for the important socialist successes, they feel, can be defended against capitalist attacks only by a socialist government of the union. Finally, the Committee also elected a new president of the movement, M. Rasquin, president of the Labor party of Luxembourg who was known for his radical-socialist outlook. A Change of Policy. The attitude just described was prevailing among the majority of European socialists until the end of 1948. By that time a change of approach became apparent. The socialist party leaders realized that public opinion definitely wanted a United Europe and favored it even without the approval of the International Committee. The problem therefore had to be re-examined. It is true, it was said, Europe is in grave danger. At any moment, Europe might turn capitalistic and be subjugated to American imperialism and made subservient to Wall Street. But would it not be much easier for American big finance to attain its goal in a disunited Europe? Would it not be easier for Wall Street to deal with an isolated autark country, even a socialistic country? If Europe were united, would it not be able to defend itself more efficiently against the economic imperialism of the United States? Europe must unite, and its union is a matter of socialism or capitalism, indeed a question of life or death!

After two years of deliberation and hesitation, the official socialist parties in Europe began to revise their position with respect to unification. The foregoing arguments in favor of combined strength in defense against capitalism and American economic imperialism appeared too convincing. Also the British Labor Party, which was then at the height of its power, intervened discreetly by pointing at the necessity of union and the advantages of collaboration with capitalistic America. In November 1948, the new attitude was officially acknowledged. The "International Committee for a Socialist United States of Europe" was renamed "Socialist Movement for the United States of Europe." Individuals of all ideologies were invited to join. The new objectives were to create a United States of Europe and 1 Oliver Philip, Le Probleme de L'Union Europeenne, Paris, 1950, pp. 189 et seq.; L. de Sainte-Lorette, VIntegration Economique de L'Europe, Paris, 1953, p. 300; John Goormaghtigh, European Integration, Carnegie Endowment for International Peace, New York, 1953, p. 68.

88 DOCTRINES AND PLANS OF UNIFICATION then make it socialistic. A pamphlet on the goals of the Movement, which appeared in Paris mid-1949, clearly set forth the new outlook. "The actual equilibrium of political forces in Europe," it said, "probably does not allow us to attain immediately our goal, which is the creation of a Socialist United States of Europe, with a democratic organization of the European property of basic industries, and central management of the whole economy. However, the Socialist Movement does not declare itself less prepared to assist in the creation of a European Federation which does not realize these objectives . . . with the only reservation, that the political system be created in such a way that the objectives of socialism may be realized if, some day, the equilibrium of political forces should open a democratic way for their realization."2 There followed a considerable amount of publicity work by the Socialist Movement. The four large permanent commissions on "Colonial Questions," "Social Progress," "Economic and Financial Problems," and "Propaganda" busily prepared reports and publications. The following reports, for example, were published and presented to the public: "European Planning through Basic Industries," "The Coordination of European Agriculture," "European Security," "The Relationship between Europe and the People Dependent on It," "Germany and Europe," "The Political Authority of Europe," and "The Election of a Constitutional Assembly by Universal Suffrage." These reports were also discussed and approved at the Third Congress of the Movement in Luxembourg, November 1949. The fundamental dissension as to the objectives of the Movement also appeared at this congress. Some representatives advocated a socialist united Europe, or none at all. Others were willing to unite Europe first and make it socialist afterward. As to the reasons for unification, a deep divergence of opinion also became apparent.

Some members advocated European unification as a means of defense against American economic imperialism; others hoped to make Europe the third power to rank with the United States and Soviet Russia, organized according to the system of socialism which would avoid the shortcomings of American capitalism as well as those of communism. There was also dispute as to whether the Socialist Movement should collaborate with other movements for a united Europe and join the over-all "European Movement" in which Winston Churchill played a leading role. A minority of the members feared that in joining the "European Movement" the Socialist Movement would tend to become "an instrument at the disposal of Mr. 2 O. Philip, Ibid., p. 190.

MOVEMENT FOR A UNITED STATES OF EUROPE 89 Churchill in his fight against the workman." 3 Others believed that the Socialist Movement, under present conditions, should collaborate with other movements for a United States of Europe. The majority of representatives finally upheld this opinion and advised the Socialist Movement to collaborate henceforth with other movements in the unification of Europe. SOME CRITICISM Socialist Objectives Interpreted. The socialist attitude towards the problem of European unification is determined by the prevailing socialist doctrines in presentday Europe. Whoever undertakes to examine a socialist notion or policy must logically enter into detailed discussions of the underlying and fundamental doctrines of socialism. An exhaustive analysis must ultimately lead to a discussion of the Exploitation Theory, the Theory of Surplus Value, the Struggle of Classes, Lenin's doctrine of imperialism as the last phase of capitalism, and, finally, to the doctrine of the inevitable evolution of mankind towards its highest stage—socialism. In this survey of the doctrines and plans of unification, there is unfortunately no space for such a detailed discussion of socialist dogma. We must content ourselves with analyzing a few subjects which are closely connected with the problem of unification and the Socialist Movement for the United States of Europe.

In this chapter, the socialist unification movement will be analyzed by putting to test socialist principles in relation to basic principles of unification. The analysis leads to contentions that are diametrically opposed to socialist notions on the unification subject. These contentions are the following: 1. A society organized according to the system of socialism, because of its very nature, cannot, under any conceivable condition, voluntarily unite with another socialist society. 2. A socialist economy cannot conceivably be united with free market economies. 3. "American capitalism" pays for and upholds European socialism and finances its social and economic "successes." Socialism Means Planning for National Disparity and World Disintegration. Under the system of socialism all the economic activities of the citizens of a country are consciously planned by a central planning authority. There is no private ownership in the means of production, only public ownership and control, which, of course, means state ownership and state control. It is insignificant in this 3 O. Philip, Ibid., p. 190.

90 DOCTRINES AND PLANS OF UNIFICATION respect whether the legal title in the means of production is directly transferred to the state, or whether legal title remains with the individual and the state assumes ownership control. That is to say, the state determines what shall be produced, how it shall be produced, at what cost and prices, etc. Both methods of socialization—legal acquistion of property and legislative and administrative control over property—are identical in their effects. The alleged purpose of central planning and control is the direction of the means of production according to principles that benefit society. Plans and orders of central authorities are substituted for the functioning of the market economy because the latter is believed to be "wasteful," "unfair," and to benefit only the capitalists. Socialist planning is different. It logically follows that socialist planning would lose its justification if it concurred or endeavored to concur with the capitalist system of production and distribution.

It necessarily means planning for disparity from market economies. Inasmuch as the world economy is a market economy, socialist planning irrefutably means planning for world market disintegration. These efforts are apparent in the system of bilateralism, formation of economic blocs, the political and erratic character of world trade, the disruption of international monetary and financial communication, the increased international immobility of production factors through nationalization and confiscation, and finally in allround national protectionism. Socialist Economies Must Be Secluded from Influences from Abroad. A basic condition for the realization of socialism is a tight seclusion of the socialist system from influences from abroad. Through numerous state controls over foreign economic relations, through government prohibitions, foreign trade quotas, and exchange controls, a socialist economy must be protected from "unplanned" imports and exports, from undesired monetary and capital intercommunication and other "undue" influences from abroad. How could a central planner realize his plan of forced disparity of prices if national borders were to remain open? How can he, for example, plan and enforce a butter price of $1, if businessmen are free to import butter at a price of 50^? The first and inevitable step towards realization of a socialist or welfare plan is the closing of national borders.

A socialist economy within the framework of a supranational political union naturally can continue to exist, provided it is sufficiently sheltered from "unplanned" interferences. If the economic relations between the socialist system and other member states of the union MOVEMENT FOR A UNITED STATES OF EUROPE 91 continue exactly in the manner they were before the unification, no difficulties will arise. But if the outside protection of a socialist economy is abolished, it will instantly collapse because goods, capital, and even men will begin to cross the borders and tend to equalize the government-enforced disparities. The assumption that Europe may be united by substituting one supranational economic plan for various national socialist plans is based on the failure to perceive the discrepancies of the various national economic structures. Although socialists enjoy talking about European unification and European central planning, they shun the mere thought of economic disparities as brought about by their own socialist or interventionist policies. The offered solution from this insoluble dilemma is the suggestion that the European central plan should be based on the national plans which are to be coordinated.

Inasmuch as a coordination of national plans constitutes a compromise in national and social "successes," a mutual agreement is unattainable. National Disparities Identical with National and Social "Successes." Coordination of national plans presupposes compromises as to economic plans and conditions. As has been pointed out, the essence of national planning is willful disparity according to national and social considerations. Strong pressure groups succeed in obtaining privileged positions which they consider as economic and social successes. Now assume, for a moment, that a supranational authority would attempt to eliminate these successes by abolishing the protection of certain national industries in order to eliminate the disparities. Then the question arises: "Will the privileged pressure groups, which are backed by national majorities, acquiesce in an elimination of their successes which were the sole objective of preceding socialist and interventionist policies?" It is obvious that neither a socialist nor a welfare nation is prepared for such a step.

The assumption that all the economies concerned must be socialist in order to assure unification is most fallacious. The more numerous the socialist economies to be united, the more numerous are the divergencies of national plans, structures of production, prices, wages, etc. It is self-evident that unification of ten heterogeneous "units" is more difficult than that of only two. To persuade ten nations to yield their plans and social "successes" in favor of one supranational plan, which can merely constitute a compromise of the ten plans, is unquestionably more difficult than to persuade two socialist or interventionist nations. But to induce any European na92 DOCTRINES AND PLANS OF UNIFICATION tion to yield its protection and "social and economic successes" seems out of the question. Unification of Socialist and Capitalist Economies Not Feasible. The same is true regarding unification of socialist and free-enterprise societies. Whether two heterogeneous socialist units are to be united or two heterogeneous economies of which one is a market economy and the other centrally planned, does not alter the problems involved. Although the national economic disparities may be smaller in degree because the socialist government only is planning and creating the disparities, the very nature of socialism requires divergency from a market economy. Through prohibitive tariffs, import and export licenses and quotas, exchange controls and government import and export monopolies, the socialist economy, for the sake of its own existence, must be efficiently sheltered from the market economy.

If a socialist economy and a free-market economy are to be united in one supranational organization of the socialist pattern, the market economy must necessarily be eliminated and conform to the socialist structure and plan. Such a unification presupposes an allround adoption of the socialist structure of production, wages, prices, and an agreement on the central plan. It may be said that such an agreement is feasible if both parties would only compromise or submit their plans to arbitration. Indeed, this seems simple. But it must not be forgotten that such an agreement would entail the determination of who shall gain and who shall lose by the unification process. To find a compromise on the butter price of $1 and 50^, for example, is extremely difficult. If the arithmetical mean of 75^ should be accepted, the producers of the country with the $1 price would lose and the consumers in the country with the 50^ price would lose by a like amount. On the other hand, the producers of the latter country and the consumers of the former would gain.

Whatever aspect we may analyze, we would find inevitable gains and losses through the unification process. Of course, everybody would be eager to gain. But who would be willing to suffer losses for the sake of unification? What Are Socialist Successes? Although an answer to this question is extremely difficult for the casual observer, we may find the answer by looking closely at the prevailing socialist doctrines and the way they are being carried out in presentday Europe. The root idea of socialism is the idea that there are such things as a "social question," "labor problem," "class struggle," "surplus product," "exploitation through capitalism," etc. All these notions imply MOVEMENT FOR A UNITED STATES OF EUROPE 93 that the existence of capitalism harms the vital interests of the people—especially of the workers and the small farmers—and that radical reforms for the elimination of capitalism are indispensable.

Indeed, these radical reforms have been achieved in most European countries. An extensive price control system has, in general, eliminated the market economy. Basic industries have been nationalized and are now run by the state. Commercial and savings banks either are in the direct ownership of the state or are managed according to precise directives of the state. Furthermore, the state determines wage rates and other labor benefits. Private industries, i.e., industries that are not yet owned by the state, are heavily taxed and thus prepared for future nationalization. The central banks have successfully shattered the monetary systems through deficit financing, credit expansion, and outright inflation. These are a few of the socialist "successes." The sphere of individual freedom and initiative is reduced with every increase in the authority of the state. As capital accumulation by individuals is deemed "unsocial" and rendered difficult, capital investment per head of population in several European countries has decreased steadily. Nevertheless, wages and other labor benefits are increased by order of the state and payment is enforced by its police. While wages are raised and paid with more paper money, real wage rates, or the purchasing power of the money wages, have declined in accordance with the lower labor productivity. As a rigid system of police-enforced price control prevents the necessary upward adjustment of prices, goods begin to flow into illegal channels of distribution. That is to say, the merchandise in the stores is getting scarcer while the waiting lines of consumers, the majority of whom are the workers, are growing longer. Government priorities, quotas, subsidies, price-fixing, rationing, trade inspections and penalties—all enforced by an army of bureaucrats and policemen—are the new socialist and welfare order of Europe which is supplemented by an illegal order: flourishing black markets and unlawful transactions termed "economic crimes" and "sabotages against society." And the number of "greedy" and "unsocial" people in prison increases correspondingly.4 Industries that government has taken over are bound to run at a loss. In spite of their tax exemptions, they are run at a substantial deficit and the quality of their services and products deteriorates.

The national mining industries, steel and iron industries, transporta4 For an excellent presentation of conditions under socialism in Great Britain, see John T. Flynn's The Road Ahead, Devin-Adair Co., New York, 1952, p. 26 et seq.

94 DOCTRINES AND PLANS OF UNIFICATION tion systems, telephone and telegraph industries, the postal service, and many other government-owned industries depend on the taxpayers for support.5 But who are the taxpayers who pay the way for the nationalized industries? They are the millions of workers paying income taxes and thousands of corporations who, without the enormous tax burden, would expand and create jobs for workers. But, despite these abuses, this policy of nationalization is not termed a policy against and to the detriment of the worker; it signifies their economic and social "successes." Although it is one of the main objectives of a socialist or interventionist government to provide homes for workers, despite freehanded government spending, the number of units built annually is decreasing. In the face of improved mechanization, financed by American government grants and loans, the productivity of labor, i.e., the per man-hour output, has declined in the government-controlled and -financed building industries as well as in all other nationalized industries. In the German mining industry which is government-owned or government-controlled, for example, the daily per man output during the first half of 1953 amounted to only 64.8% of the output in the first half of 1936.6 And yet, Germany's recovery is considered most remarkable as compared with other European economies.

European governments often boast that production has increased in every year since the war. This is certainly correct, but for reasons other than they would like us to infer. At the end of World War II, production was greatly reduced or had entirely come to a halt. Production had to be resumed as long as there was will to survival. And production increased in spite of the controls and regardless of government checks and interferences. Governments are also boasting that some industries have increased their production over the pre-war level. This is also correct; but closer examination reveals that governments have neglected to acquire ownership of those industries or to enforce controls because they deemed them "unessential." Where private industries have suffered from the devastations of the tax collector and the regulations of price stabilizers, the socialist parties—in order to gain more economic and social "successes"

—are demanding their nationalization. 5 The relatively fortunate fiscal position of the government of the United States is due to the fact that it has to support only one nationalized industry: the Post Office, whose deficit in the last audited year (1952) amounted to only $4.50 for every man, woman, and child in the country. 6 Deutsche Zeitung und Wirtschaftszeitung, Stuttgart, September 12, 1953, Series 8, No. 73, p. 9.

MOVEMENT FOR A UNITED STATES OF EUROPE 95 Under these conditions of "social and economic progress," the situation of the workers is deteriorating constantly. While producers often deflect part of the shrinking production from legal channels of distribution into illegal markets in order to avoid continuous losses, the worker must render his services on the labor market—the market most easily and efficiently controlled. Consequently, the worker bears more and more of the enormous tax burden. Of course, government control over wages and labor conditions are also rated as "socialist successes." Socialist policies by the worker and for the worker, in final analysis, thus mean his opportunity to wait in growing lines in front of crowded ration offices and empty retail stores. These are the socialist successes as seen and experienced by this writer in Europe. American Aid Postpones the Alternative. The American aid which European governments received after World War II helped them to drag along and avoided the otherwise inevitable breakdown.

Without the generous support by the United States government, the socialist policies of nationalization, government controls, and ample spending could not have been embarked upon without causing poverty and hardship. American aid meant the opportunity in many countries to push the realization of socialist programs further ahead than could have been done without it. There follows a partial list of countries receiving American aid via grants and credit. It covers the postwar period from July 1, 1945 through September 30, 1953.7 Austria $ 990,000,000 Italy $2,559,000,000 Belgium-Netherlands 1,063,000,000 Luxembourg .... 738,000,000 Norway 295,000,000 United Kingdom ... 6,800,000,000 Sweden 108,000,000 Denmark 281,000,000 Yugoslavia 616,000,000 France 4,929,000,000 Other western Germany 3,745,000,000 Europe 963,000,000 Greece 1,188,000,000 It would be interesting to correlate the amount of foreign spending of the United States government per head of population in the receiving country with the number of its socialists "successes." Undoubtedly we would find a straight correlation between American aid and the growth of socialism.

Without the generous support of the United States government, 7 Report in Appendix of Congressional Record for January 27, 1954, p. A604— "Foreign Handouts" by Hon. Daniel A. Reed of New York.

96 DOCTRINES AND PLANS OF UNIFICATION the nations of Europe would have faced an alternative between slow suicide through socialist and welfare policies or new life through return to the system of an unhampered market economy. It is characteristic in this respect that Western Germany, the socialist economy of which was almost at a standstill in 1947 and 1948, faced this alternative when American grants and credits per head of population were still small as compared with those to other European nations. And Germany chose, in spite of a long tradition of socialism and government omnipotence, a road of relative freedom and free enterprise. The other nations were temporarily spared this decision by vast grants and loans from the United States. Billions of American dollars were handed out for "economic reconstruction" and were spent to conceal the economic destruction which socialist and welfare policies brought about. The granting of additional billions of dollars in the form of military aid released domestic funds in like amount for purposes of nationalization, government controls, and social spending. And, yet, it is not enough. It is a matter of fact that the American aid, which is unprecedented in history, is not even sufficient to cover the deficits of the nationalized industries in Europe.

"American Economic Imperialism" the Motive for Socialist Unification. Although the American government has spent more than 43 billion dollars 8 for economic reconstruction in foreign countries, the greater part of which went to Europe, European socialists see in American capitalism and "imperialism" their most serious threat and enemy. It is America—"American imperialism"—against which they endeavor to unite. In the socialist literature on European unification, Soviet Russia is scarcely ever mentioned as an eventual aggressor or as a motive for unification. If Soviet Russia finds mention it is only in connection with a description of the objective of European socialism—the "middle road" between capitalism and communism. That is to say, Soviet Russia's economic system of central planning is approved and accepted by socialists—only the Russian methods are condemned. European planning is said to be less rigorous and more considerate of the rights and freedoms of the individual. Capitalism, on the other hand, is diametrically opposed to socialism. It is the system of exploitation and enslavement of the worker; it is the profit system of the millionaires in Wall Street.

These and similar socialist notions can only be understood as deductions from or as interpretations of the teachings of Marx, Lenin, and Stalin. They are unreal and contradict even the crudest rules 8 From July 1, 1945 through September 30, 1953.

MOVEMENT FOR A UNITED STATES OF EUROPE 97 of common sense. Indeed, a person must be blind to the freedom of the American individual, his protection from encroachments by the state, and his standard of living and height of wage rates, if he embraces the socialist notions. It is a matter of fact that the American wage earner, in spite of more than twenty years of New and Fair Dealism, has an income equal to that of a French, German, or Italian state president and even the American tax exemption exceeds the income of the best paid workers in Russia. While the average income per man, woman, and child in the United States exceeds $1500 per year, the Russian income per head of population, according to Russian statistical sources, is less than $300 per year. As the reported money income in a socialist economy by no means constitutes real income for which additional ration cards and delivery rights must be acquired, we must discount even the reported Russian figures for the sake of a fair comparison. Furthermore, if we account for the ten to fifteen million slave-workers somewhere in Siberia, toiling for their bare existence, we arrive at a more realistic figure of perhaps $100 to $150 per year which the Russian worker may consume as his production and distribution planners deem fit.

This is socialism as seen and experienced by this writer in Russia. Wall Street and American Capitalism. The socialist contention that Wall Street and American capitalism are identical is as fallacious and superficial as all other socialist doctrines. If you look at contemporary American laws, the emptiness of this assertion becomes immediately apparent. It is a matter of fact that the highest taxes are paid in Wall Street. The American corporations owned by several million stockholders, for example, pay up to 82% of corporate income and Wall Street millionaires up to 88% of their remaining income to the federal government. In addition, state and city governments freely help themselves to revenues by taxing Wall Street income and transactions. Furthermore, numerous government controls have been imposed upon the credit and money market. How could this kind of taxation and the numerous Wall Street controls exist, if it were Wall Street that makes and executes the American laws? Is it not ridiculous to assume that Wall Street imposes these taxes and controls upon itself? Who pays the confiscatory taxes, Wall Street or the worker? If the socialist assertions regarding American capitalism, exploitation, and class struggle were correct, it would be the worker who would have to pay the 88% income tax and Wall Street would be tax exempt. This deduction is only common sense; and, yet, it is alien to socialist reasoning.

98 DOCTRINES AND PLANS OF UNIFICATION The Socialist Doctrine of Imperialism. According to Lenin,9 capitalist imperialism is characterized by its final and desperate struggle for world markets. It is the last stage of capitalism after which socialism must inevitably follow. Nineteenth-century capitalism, with its full and perfect competition, exported goods and services into all parts of the world. Modern capitalism, i.e., mainly American capitalism, however, depends on the exportation of capital because the increasing poverty of consumers at home and abroad leaves an increasing part of total production unconsumed. As the growing wealth of a few capitalists lacks profitable employment at home, it seeks new outlets and markets in countries where capitalist parasitism may thrive. That is to say, foreign countries are subjugated by American imperialism and exploited by Wall Street. This is the official socialist dogma with respect to the United States.

Again we must refer to the fallacies of the underlying socialist doctrines of labor value, surplus product and exploitation, class struggle, etc., in order to understand Lenin's theory of imperialism.10 Let us, therefore, look at a short presentation of capital movements in the past. For more than one hundred years of American independence, the United States belonged to the underdeveloped areas of the world. Capital investment per head of population was small as compared with that in the countries of Western Europe. The opening of the vast North American continent was a constant drain on the formation of capital in the New England and Eastern states. But throughout this period of American past, European funds flowed into America and were invested in the construction of railroads, roads, canals, and factories. The European investors, especially in England, France, and Holland, preferred American investments to those in their home countries because America was poorer, the American interest rates were higher, American wage rates were lower, and opportunities for profits were large. If and when European investors reaped high profits, they could plow them back into business or freely transfer them to Europe. Throughout this period the American nation was the largest borrowing nation and the debtor nation of the world.

Under these conditions the vast North American continent was opened and America was built. Wage rates climbed steadily and the American standard of living increased rapidly. Towards the close 9 W. I. Lenin, Der Impericdismus ah hochstes Stadium des Kapitalismus, (Imperialism, the Highest Stage of Capitalism), Moscow, 1946. 10 For an excellent analysis of socialism, see L. v. Mises, Socialism, Yale, 1952.

MOVEMENT FOR A UNITED STATES OF EUROPE 99 of the nineteenth century, American living conditions had almost crept up to the height of those in Western Europe. The American citizen was as free or freer than the citizen in Western Europe throughout this period of American growth. Who dares to maintain that he was unfree and enslaved by European capitalists? On the contrary, he was freer than he is today under his welfare government. With World War I, conditions on the capital market of the world began to change. While the European nations began to consume their capital for war and "social experiments," American conditions continued to allow capital formation and consequently labor productivity and wage rates to rise. American capital began to flow to Europe and other parts of the world. Of course, capital left the United States in the expectation that it would yield a higher return abroad than at home.

For a few years it really did. As long as foreign debtors received more in capital than they had to pay in interest and repayments on the principal, no difficulties arose. American capital was used in the development of foreign industries, agriculture, commerce, public utilities, etc., and its employment raised the productivity of labor, created jobs, raised wage rates and the standard of living. But naturally, all these American investments were made with the tacit understanding that the principal would be repaid. Unfortunately, this assumption on the part of American capitalists proved erroneous. In the following decades, scarcely a nation in the world did not nationalize American capital invested abroad. Compensation was often fictitious, its transfer prohibited, its value depreciated or annihilated through confiscatory taxation. And there is scarcely an American capitalist who did not lose all or part of his foreign investments. Whatever was left began to flow back through all legal as well as illegal channels. But this was not all. Not only were American capitalists eager to recall their funds, but foreign investors, and especially those of the underdeveloped areas, because of fear of nationalization and expropriation, began to transfer their funds to the safer harbor—America.

The economic effects of this capital migration are obvious. Living conditions in America improved more rapidly and conditions in foreign countries deteriorated at an accelerated rate. But was this due to capitalist and "imperialist" policies in Wall Street? Were the foreign debtors working with American funds or the foreign workers being employed in factories built by American funds being exploited? Or was it the American capital lender who was expropri100 DOCTRINES AND PLANS OF UNIFICATION ated by socialist or interventionist policies? Who caused the flight of capital from Europe and other underdeveloped areas? The fleeing capitalist or expropriating governments? It seems unnecessary to answer these questions. Intergovernmental Aid and Private Lending. Socialists despise private lending because they believe it to be the tool of capitalist exploitation and imperialist subjugation. But let us compare for a moment capitalist private lending with intergovernmental aid as it is practiced among socialist and welfare governments.

Under modern political conditions, private capital, i.e., capital accumulated by individuals, dare not leave the country without running great risk of being nationalized, depreciated, blocked, etc. But the underdeveloped countries need capital as urgently as did America in the days of its growth. Since no private investor can be persuaded to invest new funds in a country which has just nationalized his old investments, other sources of capital must be sought and found. This source was, and still is, the government of the United States. But what the private American lender could not expect, i.e., the assurance of safety for his investment from expropriation by foreign governments, the American government may demand for its intergovernmental loans. By international treaty and agreement the receiving countries promised to repay the loans. No matter what we may think of governmental promises and international agreements, the promise to repay constitutes the very basis of intergovernmental loans.

The governmental indebtedness of underdeveloped countries to the United States, however, constitutes a serious international problem. These loans are government loans, government obligations, carrying government guarantees. If they are repaid at maturity, no international problem will result. But what will happen if a foreign government prefers to go in default rather than to meet its obligation? How is the American government to collect its funds from a foreign government that is unwilling to meet its obligation? It apparently has the following alternatives: It may do what private investors have done: forget about its foreign loans and write them off. It also may grant moratoria of payments and write its investments off at a later date. Or, finally, it may attempt to collect by use of sanctions, retaliation, and outright force. While this last alternative is not open to a private lender, a government undoubtedly has the means for the use of violence. The question which now arises is: "Will the creditor government, i.e., that of the United MOVEMENT FOR A UNITED STATES OF EUROPE 101 States, employ its force to secure the repayment of its foreign investments?" Of course, it will not, since the various costs of collection by far surpass the amount to be collected. But, at any rate, an international conflict may be created through the existence of intergovernmental loans.

These deliberations must be taken into consideration if we evaluate intergovernmental aid as we know it today. Under the system of capitalism, individuals trade and deal with each other. A loan is an exchange of a present good for a promise of payment of a future good. If the debtor fails to deliver the future good, the only resort open to a capitalist lender is a forced collection via court. If the court should fail to bring about the collection, the claim is written off as a bad investment. The money lender suffers the loss and the problem is settled. As has been illustrated previously, conditions are different where governments deal with each other. Under socialism and Fair Dealism, intergovernmental debts lead to international conflicts. Is Socialism a Barrier to Communism? European socialists want us to believe that a socialist Europe would provide an effective barrier to communism. They often cite the socialist governments of Australia and New Zealand and of the Scandinavian countries as examples of democratic socialism which, they assert, halt the march of communism and absorb the masses who would otherwise turn communistic.

A major fallacy in this contention is its tacit implication that there is an essential difference between a socialist state and a communist state. What, in all fairness, are these differences? There are none. In a socialist state as well as in a communist state the means of production are in the exclusive ownership of the state. Central planners control and regulate the economic activities of all members of society according to their own standards of fairness and expedience. A centrally planned economy has been substituted for the individually planned market economy. The market system of distribution with its sovereignty of the consumer has been replaced by a system of distribution in which the central planner and distributor is sovereign and his judgment the supreme order. The communist contention that in a future communist society each individual will contribute to production according to his abilities and receive according to his needs is no less fantastic than the contention that the communist state will "wither away."

From 1918 to 1921, Lenin tried to establish this kind of communism in Russia to the full extent, and millions perished in this at102 DOCTRINES AND PLANS OF UNIFICATION tempt. In 1921 he had to retreat to the "New Economic Policy" which adopted more and more features reminiscent of the despised capitalist system. Great disparities in money and real incomes have since been introduced and the state, instead of withering away, has tightened its grip on the individual. The contention that, some day in the future, communism finally will be realized is uncontested here; but if this should ever come to pass, communism again will be a catastrophic failure and additional millions will perish in the new attempt. And as long as there is communism, there will be perishing and selfdestruction. The fact that socialism in Australia, New Zealand, Great Britain, and the Scandinavian countries differs from socialism behind the Iron Curtain does not disprove these statements. In all these countries strong oppositions which are backed by nearly half, and in some cases more than half, the nation keeps socialism within bounds.

Also, the memory of the rights and freedoms of the individual to which he was accustomed in the capitalist past still lives and their remnants are tenaciously defended by the friends of liberty. Of course, it is readily conceded that a few more decades of socialism even in these countries will be sufficient to destroy the remaining rights and freedoms and prepare the way for communism, and its iron rule. The experience of many countries has shown that socialism is no effective barrier to communism, but that it prepares the way instead. Socialists first destroy the barriers to communism; and when a determined group of communists begin to wrest the power from them, they can offer no effective resistance. On the contrary, they often join the forces of communism. Russia is the classic example of the way in which socialism collapses before the determined onslaught of communists. Before the outbreak of revolution in March 1917, two moderate socialist parties had made their appearance in Russian political life and enjoyed many millions of adherents among the workers in Moscow, Petrograd, and other cities. The Mensheviks were a relatively moderate element of Russian socialism. They advocated realization of socialism in a democratic way. They despised revolution and differed from communism in many ways of party tactics. The second socialist party was the Social Revolutionary party which had its origin in an agrarian movement at the close of the nineteenth century. It had its strongholds among the poorer population in the country and was, in spite of its name, a relatively moderate socialist party. In addition to these two parties there was the Bolshevik party. The MOVEMENT FOR A UNITED STATES OF EUROPE 103 Bolsheviks constituted the revolutionary Marxian element of Russian socialism. Its leaders, and especially Lenin, were prepared at any moment to seize and take control of the entire political and economic power of the country. They did not hesitate to employ the means of revolution to attain this end.

At the outbreak of revolution in March 1917, the Social Revolutionaries and Mensheviks were in the majority and gained control of the situation. In July 1917, a Menshevik leader, M. A. Kerensky, even became Prime Minister of Russia. That is to say, moderate socialism gained full control of the state. But now the small though determined group of Bolsheviks began to undermine the position of the party in power. Kerensky and his government, on the other hand, behaved with a helpless ineptitude in this time of crisis. How could they show firmness against the Bolshevik demands which were so similar to their own while they were in opposition? Being in power, how could they outbid the Bolsheviks remaining in opposition? On grounds of their own socialist ideology, what could they answer to the radical demand that the power should now be placed in the hands of the proletariat and the poorest strata of the peasantry? They could but plead for delay on grounds of untimeliness and inexpedience. On November 7, the Bolsheviks struck.

Within twenty-four hours the government fell, its representatives were arrested, and the dictatorship of the communist party was erected. Socialism had paved the way for communism.11 The powerful Polish socialist party provides another example of the impossibility for socialism to meet the onslaught of communism. Although it is readily conceded that nothing could have been done in the years after World War II that would have prevented the domination of Poland from Moscow, we must point to the lame resistance of the socialist parties in their resistance against the communist party. Ideologically completely helpless, they first cooperated and finally merged with communism. The same holds true of Hungarian socialism. We saw the same fatal cooperation of the socialists with the communists, the same final fusion of the socialist parties with the Soviet communist party, and the same acquiescence of the socialists in a totalitarian state.

Czechoslovakia is another case where socialism was particularly strong. After the liberation from German occupation in 1945, a coalition government with a strong socialist tendency under the premiership of Zdenek Fierlinger, a radical socialist, was in complete 11 Ivor Thomas, The Socialist Tragedy, The Macmillan Co., New York, 1951, pp. 39-49.

104 DOCTRINES AND PLANS OF UNIFICATION power of the state. It nationalized the mines, national resources and big iron and steel enterprises, large enterprises in the food and drink industries, the banks and insurance companies and did everything in its power to appease the communists. Soon the socialists began to share the power with the communists who then seized it from their benefactors. If today Czechoslovakia lies in the grip of a communist dictatorship, it is because of the groundwork done by socialists. Although the communists in Italy were unable to rise to power, we may observe the same readiness on the part of socialists to cooperate with communists and pave their way as did the socialist parties in the countries behind the Iron Curtain. The Italian socialist party was one of the oldest, strongest, and most cohesive socialist parties in Europe. Not only did it breed fascism and the dictatorship of Mussolini after World War I, but it fully supported the communist party in its struggle for power after World War II. Together with the communists they founded a single trade union movement and established the closest political collaboration in a "popular front." In a decisive election in April 1948, the socialist party, on a common list with the communist party, fought the Christian Democratic party for the power of the state. It was only through the brilliant leadership of the Pope and the Catholic Church that the "popular front" was decisively beaten.12 The history of the French socialist parties also shows convincingly that socialism cannot be a barrier to communism. The communists try to outbid the socialists, and the socialists try not to be outbid.

Ugly waves of strikes, disorderly scenes, riots, and frequent changes of government are evoked alternately by the communist party or one or several of the socialist parties in opposition. Wherever the French socialists have been outbid by communists for the favor of the masses, they have not hesitated to support the communist actions which they themselves hated to employ. We may observe the same cooperation of both parties, the same agreements as to "popular fronts," in which the communists are the main beneficiaries, that have taken place in all other countries where socialist parties have enjoyed a popularity. In June 1946, an assembly election saw the communists in the second place of French political life, and as the chief aspirants for power with more than 5 million votes, thanks to the lengthy socialist groundwork laid for the communist party. Great Britain offers another convincing example of how socialism cannot be a bulwark against communism. The British Labor party 12 Ivor Thomas, Ibid., p. 66 et seq.

MOVEMENT FOR A UNITED STATES OF EUROPE 105 is strongly entrenched. When it took office in 1945, it nationalized the "means of exchange," the coal mines, the gas and electricity industries, the iron and steel industries; it vested in a Central Land Board all development rights in land; it nationalized or acquired full control of the "means of distribution"; it made the Ministry of Food a huge state trading concern; it did its utmost to eliminate rent, profit, and interest, and made the whole nation subject to its conscious central planning. The British Labor party, indeed, carried Great Britain far towards the collectivist goal. And, yet, it could not stop, for the growth of its power brought in its train the radical opposition which tries to outbid the moderate elements of socialism. From anonymity Aneurin Bevan and his adherents have risen to strength and reputation and are now a growing wing of British socialism. There cannot be any doubt, if Clement Attlee should ever come to power again, Bevan will be waiting to seize the scepter from him. And then a more ruthless figure will be ready to replace Bevan, in a slow motion of communist revolution.13 Inasmuch as the fundamental tenets of the German nazi ideology did not differ from the social and economic ideologies of communism as applied behind the Iron Curtain, we must also refer to the growth of German socialism and the simultaneous rise of Hitler and his NationalSocialist party to absolute power in Germany. For many years the great majority of the German nation had been both socialist and nationalist. Many millions were organized in the socialist parties and especially in the Social Democratic party; and there were millions of members of the trade unions affiliated with these parties. For many years during the interwar period, Prussia, the Reich's center of gravity, was ruled by the Social Democrats.14 With the sway of socialism in Germany two important socialist offsprings came to life. The communist party and Hitler's NationalSocialist party were both determined to establish their totalitarian system. Hitler could finally triumph because socialists had first destroyed the cornerstones of democracy. Socialism gave birth to NationalSocialism and helped to usher in the tyranny of Hitler, to the infinite misery of the German people and the calamity of the world.

Socialism and Democracy. Socialists universally condemn the institution of private ownership in the means of production. Under socialism the state acquires ownership and control and becomes the universal employer. The state controls the citizen's foreign exchange !3 Ivor Thomas, Ibid., p. 78 et seq. 14 L. v. Mises, Omnipotent Government, Yale Press, 1948, p. 193 et seq. Freedom School Library 106 DOCTRINES AND PLANS OF UNIFICATION transactions and his investments; it controls raw materials, prices, and the labor market. It determines the individual's rights to income, fixes wage rates, regulates rent, profit, and interest and determines spending and consumption. It is obvious that the socialist state is not compatible with individual liberty. And where liberty is lacking, there cannot be democracy, but submission of the individual to the party and state authority. The undemocratic dependence of socialist representatives in the British Parliament on the leaders of the Labor party can best be illustrated by the pledge which candidates are required to give. They must promise to act in harmony with a party order which reads as follows: "For the purpose of securing concerted action in the house, members shall consult the officers of the parliamentary party before tabling any motion, amendment or prayer, or other proposal which may involve party policies or decisions and shall not vote for any motion, amendment or prayer contrary to the decision of the party meeting . . ."15 Labor party representatives in Great Britain, the modern homeland of democracy, indeed are required to be what is commonly called "rubber stamps" in th© hands of their party leaders.

Democracy is government for the people and by the people. Under socialism this relationship is reversed. Socialism means people for the government and by the government. It is the antipode of democracy. 15 Ivor Thomas, Ibid., p. 142.

IV The European Federalist Union Background. Immediately after World War II, throughout Europe movements were organized that proclaimed the noble goal to work towards future European peace by way of federation. Delegates of numerous national groups frequently met in international conventions to discuss the pacification of Europe through unification and federation. The first of these conventions was held in Geneva, Switzerland, a few weeks after the war. Others followed in Luxembourg, Basel, and Paris where it was first suggested that closer ties should be formed to facilitate collaboration among the various national groups. In April 1947, a convention was held in Amsterdam for the express purpose of deliberating on the question of collaboration and the eventual formation of a European Federalist Association. After it agreed on the principles of supranational organization, another convention of all federalist movements in Europe was called at Montreux, Switzerland, in August 1947. At this convention the "European Federalist Union" was founded—an organization comprising more than fifty movements, some dating from the interwar period, with seventeen national committees and more than 100,000 members from sixteen countries. In France alone there are more than twenty federalist organizations collaborating through a central committee.1 Objectives. The objectives of the European Federalist Union are based on two basic principles of unification. For many of the members, federalism is the only conceivable way of collaboration among the European nations and national states; to others, federalism is not only a political doctrine of unification, but a way of life for all citii O. Philip, he Probleme de L'Union Europeenne, Paris, 1950, p. 196; John Goormaghtigh, Ibid., p. 68; L. de Sainte-Lorette, L'Integration Economique de VEurape, Paris, 1953, pp. 301-2.

107 108 DOCTRINES AND PLANS OF UNIFICATION zens of a nation. To them the goal is not only the realization of European unity, but also the development of a movement for "federalism" in the national states themselves. The latter conception of federalism is especially held by the French section of the Union, which is the driving force in the European Federalist Movement because of its numerical strength and great activity. "For the sake of coherence and consistency," it demands a complete reform of national structures. The principles of federation are said to demand a federation from top to bottom—in the community, the workshop, industries, and, finally, in the central government. Federalism is to be substituted for our present system of parliamentarism. Max Richard, a leading advocate of the Federalist Union Movement, summed up the federalist criticism in the following words: "We may say that in the democratic countries the parliaments do not represent the true state of society, but they reflect its forces only incidentally and superficially, provided they do not ignore them entirely . . . Neither the diplomats, nor the most learned jurist, the statesman, the most zealous dictator, nor the parliamentarians, these adherents of coldest constitutional mechanism, can interpret that living reality which constitutes the European people."2 Organization of Society According to Fields of Solidarity. According to the federalists, a true representation is a federalist representation of the individual in his fields of solidarity as, for example, in his community, church, profession, school, family, etc. In each field of solidarity the citizens should form organizations of selfgovernment; every branch of business should form its own selfgoverning body. Such a representation based on "social functions"

is said to be the only authentic representation of the European nations. All other movements towards a European union are artificial and, sooner or later, are bound to fail. Such is the political and economic ideology held by most of the members of the European Federalist Union. As the first and significant step toward realization of this system of internal and external unification, the European Coal and Steel Community, as introduced by the five leading coal-and steel-producing countries, is approved and celebrated. The Federalist movement indeed used its great influence to have the Schuman Plan accepted by the parliaments of the five nations. The Ideological Foundations of the Movement. It is significant to note that a large number of its Italian adherents who have recently joined the Union were fascists prior to World War II. They 2 Quoted by O. Philip, Ibid., p. 196.

THE EUROPEAN FEDERALIST UNION 109 are busily advocating supranational and domestic federalism which, in fact, is merely another name for what was formerly called corporativism. The French wing of the movement seems to have its roots in the social philosophy of "solidarism" as it was developed in France during the decades before World War I. Solidarism is the social and political creed of all those who joined neither state nor Christian socialism, but who accept the socialist criticism of the capitalist social order. The statements of this wing of the movement are far from clear. In this respect the solidarist wing of the Union shows a striking similarity to another group of the Federalist movement that advocates a "new and better system of human organization" based on the teachings of the early socialists. The ideas of Saint-Simon and Comte are still reflected in the goals of many members and in their endeavors to reorganize society in such a way that "all social activity is given the proper form it needs," that is to say, an organization based on the individual's social function within society.

CRITICISM A Federation of States. Federalism, according to many adherents of the Federalist Union, is the only conceivable relationship among national states. Because this argument enjoys enormous popularity in contemporary political literature, it has been analyzed at several other places in this work.3 As has been illustrated, a federation of states is not feasible under presentday ideological conditions because of the prevalence of interventionist and socialist policies. Where public opinion approves or demands government control of domestic prices, foreign trade, and foreign exchange, people are not prepared to suffer from the temporary effects which an abolition of these measures would bring about. Federalism as a Way of Life. The argument that is particular to the Federalist movement and that deserves our special attention is that federalism is not only a political doctrine of unification, but is also a way of life and organization of the relations among individuals. Federalism, according to this notion, is conceived as a political and economic system that is opposed to modern parliamentarism and to the free enterprise economy with its "waste and competition." It is federation from top to bottom—in the community, in the workshop, in industry, and on all levels of European collaboration.

That this scheme of human organization is not realizable, on either the lowest or highest level of cooperation, shall command our imme3 See especially Part I, Chapter I, p. 53 et seq, and Chapter II, p. 77.

110 DOCTRINES AND PLANS OF UNIFICATION diate attention. Furthermore, we shall elaborate and show that "federation" principles are pseudosocialist principles suffering from the twofold shortcoming of being socialist in basis and criticism, and of lacking completeness because of their hesitancy to take the last consistent step towards socialism. The corporativist wing of the Federalist Union Movement advocates selfgovernment in all spheres of social function—in the various branches of trade and industry, in churches and schools, in community and family. A social scheme is constructed that is said to lack totalitarian state supremacy and omnipotence, but "to reflect the true forces of society." The organizations of selfgovernment are to enjoy full autonomy; they are free to settle their own affairs without interference by the state or anybody who is not a member of the functional organization. The relationship between the various organizations consists of bargaining on problems of mutual interest or acting on decisions reached by a European Assembly made up of delegates of the functional organizations. They are to represent the true forces of living European society in which the apparatus of state can either be completely abandoned or used as a tool of execution for the national assemblies and the supranational European Assembly as well.

Organization of Industries Leads to Restriction. The outstanding feature of this system is that the industrial organizations will no longer be subject to economic adjustments and pressures. There will be no competition and no supremacy of the consumers. At any rate, the interests of members will receive precedence over the interests of consumers. The collaboration of members will indeed be smooth and amicable. It is certainly very likely that they will agree to short hours of business and work, on high wage rates, on the employment of certain existing methods of production that exclude inconvenient and costly readjustment, on numerous business holidays, and on other problems of business and production. In all probability, all functional organizations will resort to the same policies. By mutual agreement production would be restricted and the prices for commodities and services would be raised. An allround restriction of production would finally lead to a universal rise of prices and a concomitant lowering of living standards. And there would be no limit to the extent of this lowering process.

Industrial Federalism Means Conflict. Under these conditions there would be neither competitive nor monopoly prices. Those functional organizations that supply the vital necessities of life would attain a dictatorial position. Powerful organizations which THE EUROPEAN FEDERALIST UNION 111 already enjoy a favorable bargaining position would inevitably squeeze all the rest. The producers of vital foodstuffs, for example, could enjoy their position to the fullest extent. The suppliers of fuel, electric current, and transportation could easily restrict their production and yet enjoy high income and wage rates. Within a very short time, such a system of human organization would lead to violent conflicts between the suppliers of vital necessities and all the rest. Either chaos would result or the state would resume its role of arbitration and full control of all production activities.4 Such a development towards poverty and chaos would even be accelerated in a supranational union of all European states. Let us assume that the total supply of a vital necessity for the whole of Europe is produced only in a certain part of the Union. As soon as the organization of producers, in the name of social justice and progress, would begin to squeeze all other Europeans, a violent conflict would arise which would tend to become a national conflict between the country producing the vital necessity and all the others.

Even the slightest attempt to realize this system of organization would soon result in destruction of the Union and in interEuropean conflict. Solidarism Leads to Socialism and Conflict. The schemes and plans of the solidarist and utopian-socialist members of the European Federalist Union are equally unrealistic and inconsistent. Solidarism proposes a solidarity of action in favor of the poorer members of society. While its etatist wing strives to achieve solidarism of human action by state coercion, a more ecclesiastically inclined wing appeals to conscience. The kinship between solidarism and "federalism," which characterizes the postwar solidarist literature, can only be explained by their common objective: the abolition of the contemporary system of society. The solidarist advocation of "federalism" is largely unclear and superficial in nature—a quality shared by all solidarist ideas, which do not distinguish themselves by depth of conception or clarity of expression. But this much can be said: wherever solidarism endeavors to substitute a "higher"

norm of human collaboration for private property in the means of production, for competition and the profit motive, it is a variety of socialism. As such it must meet our criticism on socialism and on the unrealizability of a socialist union. Wherever solidarism advocates "federalism" as a new way of life and human organization, i.e., a "functional organization of society," it either leads to domes4 See L. v. Mises, Human Action, Yale University Press, 1949, p. 812 et seq.

112 DOCTRINES AND PLANS OF UNIFICATION tic and interstate conflict or, in the case of state interference, to socialism. The failure of both these courses is inevitable. Where There Is Socialism There Can Be No Union. A considerable part of the French section of the European Federalist Union seems to draw its arguments from the writings of the early French socialists, Saint-Simon and Comte. These writers, in their intention to "reorganize" society, made their starting point the English parliamentary system and endeavored to transform it into a more "scientific" and functional organization. Direction of economic activity was to be placed in the hands of the "industrialists"—that is, of all those who worked productively. The industrialists then were to be organized into three separate bodies: the "Chamber of Invention," to design the plans for economic activity; the "Chamber of Examination," to scrutinize and approve these plans; and the "Chamber of Execution," to execute or watch over their execution. Once such a scientifically directed social system would be universally established, society would no longer need a "government" but merely an "administration." The standard of living of the people so organized, these Federalists allege, would rise to new and unprecedented levels.5 The essence of socialism is that all means of production are in the exclusive control of organized society. It does not matter in what form socialism is realized. Control over the means of production may consist in ownership acquisition by the community, or control may be exerted by way of government laws and decrees.

It is also immaterial whether the state with its division into legislature, administration, and jurisdiction holds the control, or whether "Chambers of Invention, Examination, and Execution" have exclusive control over the means of production. In both instances planning by authorities would be substituted for the planning by the individual. Saint-Simon and Comte designed plans of reorganization of society that undoubtedly are as socialist as are those of their successor, Karl Marx. Our criticism, therefore, of their plans of reorganization must be essentially identical. A supranational unification of socialist systems of human organization, as has been stated in the preceding section on the "Socialist Movement," is not feasible because of the very nature of central planning. A socialist society is a closed unit society which is heterogeneous not only to free enterprise societies, but to other socialist systems as well. And the same holds true of inter5 F. A. Hayek, The Counter-Revolution of Science, The Free Press, Glencoe, HI., 1952, p. 132 et seq.

THE EUROPEAN FEDERALIST UNION 113 ventionist state organizations, that is to say, of every presentday state that is not outright socialist. The presence of this group of socialist planners in the "European Federalist Union" instead of the Socialist Movement can be explained as follows: First, the desire for some vague and hazy reorganization of society makes this group welcome any scheme of organization that endeavors to abolish the free enterprise economy and substitute a new design, which, they hope, will be their own. Furthermore, these socialist planners hesitate to join the "Socialist Movement for the United States of Europe" because it advocates the realization of Marxian socialism. The Marxian socialists, however, are as radical, determined and uncompromising as to methods and ends as is this group of federalist socialists. Both groups claim having the true knowledge of the proper ends of society, and each group means to "defend" society's end and purpose. It is therefore entirely logical and natural that socialist groups not embracing the Marxian doctrines shun Marxian organizations and join another movement which also aims to abolish the present system but is less radical and can more easily be swayed and lead. But we must also be prepared for a secession of these socialist groups from the "Federalist Union Movement," if they should attain independent and sufficient strength to assure their being heard among the socialist parties in Europe.