Front Page Titles (by Subject) 7.: Planning International Capital Transactions - Omnipotent Government: The Rise of the Total State and Total War
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
7.: Planning International Capital Transactions - Ludwig von Mises, Omnipotent Government: The Rise of the Total State and Total War 
Omnipotent Government: The Rise of the Total State and Total War, edited with a Foreword by Bettina Bien Greaves (Indianapolis: Indiana, 2011).
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Planning International Capital Transactions
The most amazing suggestions for international planning concern foreign loans or investments. They aim at a fair distribution of the capital available.
Let us assume that American capitalists are prepared to grant a loan to the government of Venezuela or to invest money in a mine in Chile. What can an international body do in this case? Certainly it will not have the power to force the American capitalists to lend the money to China rather than Venezuela, or to make the investment in Persian railroads instead of in Chilean mining.
Or the American Government might want for various reasons to subsidize the construction of motor roads in Mexico. Would the international authority order it to subsidize Greek textile plants instead?
The international capital market has been disintegrated by economic nationalism, as has every other branch of economic internationalism. As investments and loans mean business and not charity, capitalists have lost the incentive to invest abroad. It will be hard work, and it will take a good while, to rebuild the international money and capital market. The interference of international authorities would not further these endeavors; it would be more likely to hinder them.
Labor unions are likely to be hostile to capital export because they are eager to raise as far as possible the domestic marginal productivity of labor. Many governments put a general embargo on capital export; foreign loans and investments are not permitted without a special government license. It is not probable that a change will occur immediately after the war.
The poorer countries have done all that they could to promote the disintegration of the international capital market. Having inflicted as much harm as possible upon foreign capitalists and entrepreneurs, they are now anxious to get new foreign capital. However, today they meet only with reluctance. Capitalists shun unreliable debtors, and labor is unwilling to let capital emigrate.