Cartels as Barriers to International Trade

Abstract

In the pilgrimage of mankind toward the achievement of a peaceful and prosperous international society, the most difficult and persistent of all phases of world affairs are not solely political or military. The political and military relationships interact continuously with the economic developments which affect the production and distribution of the world's goods. In a period of world upheaval it becomes necessary to re-examine the economic basis of international affairs. An analogy may serve to underscore the need. It has been publicly announced that at a selected date an atomic bomb will be released at a chosen site in the Pacific Ocean. There, by what is known as a chain reaction requiring only a fraction of a second, the colossal power of modern science will demonstrate once more its mastery over matter. This test has been designated as Operation Crossroads, a dramatic description of its significance. In a sense the problem involved in this undertaking is clear-cut; its terms are explicit. But the reconstruction of world trade is also an Operation Crossroads which must be undertaken because there is no choice. In many respects also, the questions posed by the future of international trade require as intricate analysis, have as many complex ramifications and are as delicate in their adjustment as any of the questions of atomic science. What is done in the sphere of world trade within the next few years will also cause a chain reaction for good or ill throughout the world economy. To a particular country, to many industrial enterprises and to many individuals, international trade may seem to be of small direct concern. But trade whether small or large in volume is not only the point of most direct contact among the nations of the earth; it is also the area of decision in which the expressed hopes and desires of nations to create a peaceful and prosperous world society will be most shortly visible. All the pressures, all the tensions and all of the conflicts and policies accumulated on other levels of international life are ultimately reflected at the point of trade policy. Conversely, small frictions and disturbances which have their origin in specific trade situations may radiate outward and charge the atmosphere of inter-