Front Page Titles (by Subject) 1: The Boundaries of the State - Liberalism: The Classical Tradition (LF ed.)
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1: The Boundaries of the State - Ludwig von Mises, Liberalism: The Classical Tradition (LF ed.) 
Liberalism: The Classical Tradition, trans. Ralph Raico, ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005).
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The Boundaries of the State
For the liberal, there is no opposition between domestic policy and foreign policy, and the question so often raised and exhaustively discussed, whether considerations of foreign policy take precedence over those of domestic policy or vice versa, is, in his eyes, an idle one. For liberalism is, from the very outset, a world-embracing political concept, and the same ideas that it seeks to realize within a limited area it holds to be valid also for the larger sphere of world politics. If the liberal makes a distinction between domestic and foreign policy, he does so solely for purposes of convenience and classification, to subdivide the vast domain of political problems into major types, and not because he is of the opinion that different principles are valid for each.
The goal of the domestic policy of liberalism is the same as that of its foreign policy: peace. It aims at peaceful cooperation just as much between nations as within each nation. The starting point of liberal thought is the recognition of the value and importance of human cooperation, and the whole policy and program of liberalism is designed to serve the purpose of maintaining the existing state of mutual cooperation among the members of the human race and of extending it still further. The ultimate ideal envisioned by liberalism is the perfect cooperation of all mankind, taking place peacefully and without friction. Liberal thinking always has the whole of humanity in view and not just parts. It does not stop at limited groups; it does not end at the border of the village, of the province, of the nation, or of the continent. Its thinking is cosmopolitan and ecumenical: it takes in all men and the whole world. Liberalism is, in this sense, humanism; and the liberal, a citizen of the world, a cosmopolite.
Today, when the world is dominated by antiliberal ideas, cosmopolitanism is suspect in the eyes of the masses. In Germany there are overzealous patriots who cannot forgive the great German poets, especially Goethe, whose thinking and feeling, instead of being confined by national bounds, had a cosmopolitan orientation. It is thought that an irreconcilable conflict exists between the interests of the nation and those of mankind and that one who directs his aspirations and endeavors toward the welfare of the whole of humanity thereby disregards the interests of his own nation. No belief could be more deeply mistaken. The German who works for the good of all mankind no more injures the particular interests of his compatriots—i.e., those of his fellow men with whom he shares a common land and language and with whom he often forms an ethnic and spiritual community as well—than one who works for the good of the whole German nation injures the interests of his own home town. For the individual has just as much of an interest in the prosperity of the whole world as he has in the blooming and flourishing of the local community in which he lives.
The chauvinistic nationalists, who maintain that irreconcilable conflicts of interests exist among the various nations and who seek the adoption of a policy aimed at securing, by force if need be, the supremacy of their own nation over all others, are generally most emphatic in insisting on the necessity and utility of internal national unity. The greater the stress they place on the necessity of war against foreign nations, the more urgently do they call for peace and concord among the members of their own nation. Now this demand for domestic unity the liberal by no means opposes. On the contrary: the demand for peace within each nation was itself an outcome of liberal thinking and attained to prominence only as the liberal ideas of the eighteenth century came to be more widely accepted. Before the liberal philosophy, with its unconditional extolment of peace, gained ascendancy over men’s minds, the waging of war was not confined to conflicts between one country and another. Nations were themselves torn by continual civil strife and sanguinary internal struggles. In the eighteenth century Briton still stood arrayed in battle against Briton at Culloden, and even as late as the nineteenth century, in Germany, while Prussia waged war against Austria, other German states joined in the fighting on both sides. At that time Prussia saw nothing wrong in fighting on the side of Italy against German Austria, and, in 1870, only the rapid progress of events prevented Austria from joining the French in the war against Prussia and its allies. Many of the victories of which the Prussian army is so proud were won by Prussian troops over those of other German states. It was liberalism that first taught the nations to preserve in their internal conduct of affairs the peace that it desires to teach them to keep also in their relations with other countries.
It is from the fact of the international division of labor that liberalism derives the decisive, irrefutable argument against war. The division of labor has for a long time now gone beyond the boundaries of any one nation. No civilized nation today satisfies its need as a self-sufficient community directly from its own production. All are obliged to obtain goods from abroad and to pay for them by exporting domestic products. Anything that would have the effect of preventing or stopping the international exchange of goods would do immense damage to the whole of human civilization and undermine the well-being, indeed, the very basis of existence, of millions upon millions of people. In an age in which nations are mutually dependent on products of foreign provenance, wars can no longer be waged. Since any stoppage in the flow of imports could have a decisive effect on the outcome of a war waged by a nation involved in the international division of labor, a policy that wishes to take into consideration the possibility of a war must endeavor to make the national economy self-sufficient, i.e., it must, even in time of peace, aim at making the international division of labor come to an end at its own borders. If Germany wished to withdraw from the international division of labor and attempted to satisfy all its needs directly through domestic production, the total annual product of German labor would diminish, and thus the well-being, the standard of living, and the cultural level of the German people would decline considerably.