Nationalism and Socialism

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This article originally appears as chapter 8 in Essentials
of Economics
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Nationalism
appears to be a modern phenomenon having its origin in the nationalities
constituted in Europe between the 16th and the 19th century concomitantly
with the disappearance of feudalism and of the Romano-Germanic Empire
that came into being with Charlemagne and was totally liquidated
with the unification of Italy.

In fact, however,
the spirit of nationalism is very ancient. It has been and still
is present as a factor in both political and economic history. The
only thing that has changed is its form. It was this spirit that
animated the absolutist and totalitarian regime of the Egyptians,
that of the decadent Roman Empire, and the mercantilism of the 17th
and 18th centuries, and, after a brief eclipse that lasted from
the Congress of Vienna to the First World War, revived in the form
of the so-called controlled or planned economy under the combined
influence of war and socialism.

The latter
system arose as an international movement of the working class,
having as its slogan, "Proletarians of all countries, unite!"
but it has since passed to the opposite side and now says, "Proletarians
of all countries, don’t come to my country and take my job away
from me!"

In its economic
aspect, nationalism is based on two fallacies: the belief in the
existence of national economies and the doctrine that a nation can
prosper economically only at the expense of the rest of the world.
These convictions were among the first to be combated by the classical
economists, but they were unable to free themselves entirely from
the myth of the national economy. Thus, Adam Smith entitled his
book The Wealth of Nations, and until very recently treatises
on economics bore the title "political economy," even
when they were antinationalistic in content.

Nothing is
more illusory than the existence of a national economy and national
wealth. Nations do not own any property (the resources at the disposal
of governments consist of what they need to perform their functions)
and are neither rich nor poor; this is possible only for individuals.
In recent years the bureaucratic organs of the League of Nations
and latterly of the United Nations have spent vast sums of money
on calculating machines, writing materials, books, travel expenses,
and salaries for "economists" engaged in computing the
wealth and income of nations. All these calculations are utterly
fantastic and lead absolutely nowhere, because there is no possible
way, no matter how many laws are passed or how powerful a police
organization is created, of knowing what each individual who lives
in a particular country owns or earns. Each case is unique; the
peoples’ lack of confidence in their governments is inveterate and
founded on bitter experience; and the majority refuse to divulge
all that they have hidden in the house or outside the country or
to reveal what their true earnings are, even when they are assured
that this information is being sought purely for "statistical
purposes," because they fear that sooner or later these statistical
purposes will turn out to be tax collectors, if not outright expropriators.

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March
6, 2008

Faustino
Ballv (1887–1959) was born in Barcelona, where he trained as a
lawyer, before studying economics in London. As a teenager, Ballv
had edited a republican paper, and in the stormy 1930s, as the clouds
of civil war closed over Spain, he was elected a deputy of that
party. But there was no place for this true liberal when the struggle
degenerated into a power contest between Fascism and Communism.
Leaving his native land forever, Ballv went first to France and
then to Mexico, where he acquired citizenship in 1943 and lived
until his death in 1959. In Mexico City, in addition to the active
practice of law, Dr. Ballv soon took over two professorial chairs
— of law and of economics. In both fields, he was an exponent of
classical liberalism at its best.

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