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Book Review: An International Economy by Gunnar Myrdal

AUGUST 01, 1956 by HANS SENNHOLZ

Filed Under : Welfare State

New York: Harper & Brothers. 381 pp. $6.50.

When Gunnar Myrdal was professor of political economy at Stockholm University, he expounded the doctrines of Keynes. When he was Swedish minister of commerce, he did not hesitate to impose government control over exports, imports, and foreign exchange in order to assure “full employment.” Now that he is Executive Secretary of the United Nations Economic Commission for Europe it is his official function to be concerned with the destruction of international economic cooperation which is the inevitable outcome of welfare state interference with world trade. His book, An International Economy, is a futile attempt to solve the dilemma of contradictions between Mr. Myrdal’s past and present ambitions.

He states the problem clearly. The Welfare State, which in Myrdal’s terminology is the “integrated” state, “induces international disintegration.” (p. 48) It leads to world-wide conflicts of interests because welfare policies of protection, favors, and privileges must discriminate against foreign goods, capital, and labor, thus destroying the world market and using it as a dumping ground for “excess supplies” o f c o t t o n, cheese, peanuts, etc., from government warehouses. In short, the Welfare State becomes the economic source of international conflict.

The obvious solution to this dilemma is a return to the free market, and to individual cooperation on the world market. But this solution, which is identical with a return to individual liberty and capitalism, is unhesitatingly rejected by Professor Myrdal. He criticizes it “as not only reactionary but also as ineffective, since it goes against an immutable historical trend.” (p. 52) This immutable trend, according to Myrdal, is leading mankind in the direction of the Welfare State and other forms of collectivism.

But he rejects the return to capitalism also on grounds that it leads to economic advancement on the part of the richer countries and to stagnation and poverty on the part of the poorer nations. The question “that should be pondered carefully,” according to the author, is whether the Marxist analysis that the rich become richer and the poor poorer is not correct as far as the international scene is concerned.

Professor Myrdal’s positive solution to the problem of world market disintegration is the international extension of the welfare state idea. National policies must be coordinated so that “disturbing influences on national welfare are eliminated.” Wealth must be redistributed not only on a national basis, but also from the wealthy nations to those in the underdeveloped areas of the world. Just as Welfare States tax the rich, who naturally lose the power of disposal and employment of their tax payments, so should the world community tax the wealthy nations and employ the funds, coming mainly from the U.S.A., as the world government sees fit. Once we have become “loyal world citizens” we are said to be ready for this “fairer sharing,” which is called the world’s only route to salvation.

It is a private matter if a socialist professor from Sweden chooses to believe all this confusion. And if the pseudoliberal press lends endorsement, that also is its affair. The American public, however, must be on guard against the acceptance of such ideas as a basis for governmental action.

 

Hans F. Sennholz

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August 1956

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