Ludwig von Mises · 1943
Ludwig von Mises’s review of Egon Ranshofen-Wertheimer’s book assesses proposals for post-war European unity through their economic prerequisites. It opens by praising the author’s skill in dispelling popular misconceptions, then develops a sustained objection: recognition of Europe’s military vulnerability does not remove the economic antagonisms that obstruct federation.
As long as economic nationalism prevails and every nation is eager, in the economic sphere, to inflict as much harm as possible on all aliens, there cannot be any question of political unity and co-operation.
For Mises, the events of 1938–40 demonstrated the dangers of national isolation without establishing that Europeans would abandon protectionism, exchange controls, or migration barriers. Ranshofen-Wertheimer’s confidence that conditions now favour a European Confederation therefore leaves the decisive question unanswered. Mises shifts the test of political feasibility from shared security needs to willingness to dismantle economic warfare.
He makes this objection concrete through the distributional conflict between workers in comparatively overpopulated and underpopulated countries. If migration and exports remain restricted, workers in poorer countries will experience federation as the preservation of unequal opportunities rather than as a common benefit. His imagined Ruritanian worker regards the higher wages of workers in Atlantis as an unfair privilege. The example exposes the conflict between nationally protected labour interests and the material expectations necessary to sustain international consent.
Mises next considers Milan Hodza’s Central European federation proposal alongside his own recommendation for an East European Union. He limits the claims of both: they could protect smaller nations against powerful neighbours, but would neither unite all Europe nor solve its economic problems. Even this narrower security arrangement requires the removal of internal customs barriers. Switzerland and the United States matter as federal precedents because they have no internal trade or migration barriers, not merely because they possess federal institutions.
No sophisticated union-project and no diplomatic makeshifts can make peace durable in an environment of economic warfare.
This is the review’s central conceptual move: diplomacy cannot compensate for an economic order organised around mutual exclusion. Mises treats the contest between free trade and protection as decisive for lasting peace, challenging the belief that conventions and international administration can independently abolish war.
The concluding assessment nevertheless remains strongly favourable. Ranshofen-Wertheimer’s experience in the League of Nations secretariat supplies practical caution and attention to neglected facts, qualities Mises distinguishes from optimistic pacifism.
These virtues more than outweigh the insufficient treatment of the economic problems involved.
The review thus combines a substantive disagreement over the foundations of peace with recognition of the book’s importance. Its relevance lies in the sharp distinction it draws between designing international institutions and creating the economic conditions under which those institutions can endure.
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