Front Page Titles (by Subject) 3: Liberalism and the Problem of the Frontiers - Socialism: An Economic and Sociological Analysis
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3: Liberalism and the Problem of the Frontiers - Ludwig von Mises, Socialism: An Economic and Sociological Analysis 
Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981).
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Liberalism and the Problem of the Frontiers
When Marx and, with him, the majority of recent writers on Socialism consider Socialism only as realized in a unitary world state, they overlook powerful forces that work against economic unification.
The levity with which they dispose of all these problems may not unreasonably be attributed to what, as we shall see, was an entirely unjustifiable acceptance of an attitude with regard to the future political organization of the world, which was prevalent at the time when Marxism was taking form.
At that time, liberals held that all regional and national divisions could be regarded as political atavisms. The liberal doctrine of free trade and protection had been propounded—irrefutable for all time. It had been shown that all limitations on trade were to the disadvantage of all concerned: and, arguing from this, it had been attempted with success to limit the functions of the state to the production of security. For Liberalism the problem of the frontiers of the state does not arise. If the functions of the state are limited to the protection of life and property against murder and theft, it is no longer of any account to whom this or that land belongs. Whether the state extended over a wider or a narrower territory, seemed a matter of indifference to an age which was shattering tariff barriers and assimilating the legal and administrative systems of single states to a common form. In the middle of the nineteenth century, optimistic liberals could regard the idea of a League of Nations, a true world-state, as practicable in the not too far distant future.
The liberals did not sufficiently consider that greatest of hindrances to the development of universal free trade—the problem of races and nationalities. But the socialists overlooked completely that this constituted an infinitely greater hindrance to the development of a socialistic society. Their incapacity to go beyond Ricardo in all matters of economics, and their complete failure to understand all questions of nationalism, made it impossible for them even to conceive this problem.
The Problem of Migration Under Socialism