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8 J. Common Mkt. Stud. 1 (1969)

handle is hein.journals/jcmks8 and id is 1 raw text is: 




    INTEGRATION AND CONFLICT IN
            THE WORLD ECONOMY

                       By HANS   0. SCHMITT*

PROFESSOR  Haberler  has claimed that, whatever  caused the conflicts
that at intervals interrupted modern economic growth,  they were not
due to 'an inevitable economic nexus' in the sense that a 'deepseated real
maladjustment'  could have been  identified in the evolution of world
economy.'  Professor Kuznets  on the other hand considers it 'a moot,
if highly intriguing, question whether the world wars of the twentieth
century and  the deep world  fissure resulting from the emergence of
Communist states  are also consequences of the same  forces, and thus
highly  likely, if not inevitable, consequences of modem   economic
growth'.2
  If the distance between the two views is to be reduced in time, even
fairly abstract models  of the international system should  begin  to
experiment  with formulations that treat political as well as economic
variables as endogenous.   To  treat economic   transactions without
consideration of possible political repercussions remains, of course, a
legitimate partial equilibrium  approach  to  international relations.
In the theory of economic   growth, equally important  elements such
as population and technical progress are also often treated as exogenous.
Both  are increasingly being reincorporated into more comprehensive
models, however.  A parallel effort is now proposed to allow for political
feedback in the theory of international trade and factor movements.
  Conventional   trade theory implicitly accepts the boundaries of its
postulated trading units as given  and unchanging.  In the  proposed
reformulation, national boundaries cease to be parameters and become
variables determined by particular patterns of resource flows. The free
market, it is argued, tends to dissolve boundaries in favor of economic
and  ultimately political integration. Since, however, integration is a
nuclear process, one in which nuclear regions and  social groups gain
ascendancy  over others, it will regularly generate its own opposition.
  * The author is indebted to Professors Bela Balassa, Gottfried Haberler, Charles Holt, Charles
Kindleberger, and Guy Orcutt for criticism of earlier drafts. Responsibility remains his own.
  I Gottfried Haberler, 'Integration and Growth ofthe World Economy in Historical Perspective',
American Economic Review (March 1964), P. 2.
  2 Simon Kuzmets, Modern Economic Growth: Rate, Structure, and Spread (New Haven, 1966),
PP. 499-500.
   The term 'nuclear process' was introduced into political science by Karl Deutsch, Nationalism
and Social Communication (New York, 1953).

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