SECTION CXCIX.. Influence of Foreign Trade.

INFLUENCE OF FOREIGN TRADE.

Foreign trade, that great means of coöperation of labor among different nations, affords such a remedy in a very special manner. It very frequently happens that the undertakers of one country, when a certain factor of production seems too dear at home, borrow it elsewhere. Thus, for instance, a country with a high rate of wages draws on another for labor, and one with a high rate of interest on another for capital.[199-1] We elsewhere consider such a course of things from the standpoint of the supplying country, which in this way is healed of a heavy plethora of some single factor of production which disturbs the harmony of the whole. (§§ 187, 259, ff.). But, at the same time, the supplied country, considered from a purely economic point of view, reaps decided advantages therefrom. If, for instance, a Swiss confectioner returns from Saint Petersburgh to his home, after having made a fortune in an honest way, no one can say that Russia has grown poorer by the amount of that fortune. This man made his own capital; if he were to remain in Russia, its national economy would be richer than before his immigration thither. Now, it is, at least, no poorer, and has in the meantime had the advantage of the more skilled labor of the foreigner.[199-2] And, so, when a capitalist living in Germany purchases Hungarian land, the national income of Hungary is diminished by the amount of the annual rent which now goes to Germany; but it receives an equal amount in the interest on capital, provided the purchase was an honorable one and the capital given in exchange for the land honestly invested.[199-3] If Hungary, in general, had a superabundance of land but a lack of capital, the economic advantage is undoubted.[199-4]

These economic rules, indeed, are applicable only to the extent that higher and national considerations do not in the interest of all, create exceptions to them. "Is not the life more than meat, and the body than raiment?" No rational people will allow certain services to be performed for them preponderantly by foreigners, even when they can be performed cheaper by the latter--the services of religion, of the army, of the state, etc. The same is true of landownership; and all the truer in proportion as political and legal rights of presentation and other forms of patronage are attached to it. Lastly, hypothecation-debts which go beyond certain limits, may entail the same consequences as the complete alienation of the land;[199-5] and Raynal may have been, under certain circumstances, right when he said, that to admit foreigners to subscribe to the national debt was equivalent to ceding a province to them.[199-6] It is obvious that a great power may do much in this relation that would be a risk to a small state.[199-7] [199-8]