Thorstein Veblen
The Passing of National Frontiers
EDITORIAL
The Dial. A Fortnightly Journal of Criticism and Discussion of Literature
and Arts. CHICAGO. THE DIAL PUBLISHING COMPANY.
Vol. LXIV (January 3 to June 6, 1918)

April 25, 1918, pp. 387-390
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[387]
The Passing of National Frontiers

It is to be accepted as a major premise, underlying any argument or 
speculation that bears on current events or on the calculable future, that 
the peoples of Christendom are now coming to face a revolutionary 
situation. "It is a condition, not a theory, that confronts us." This will 
hold true with equal cogency for international relations and for the 
domestic affairs of any one of the civilised countries. It means not 
necessarily that a radical change of base in the existing law and order is 
expedient or desired, but only that circumstances have been falling into 
such shape that a radical change of base can be avoided, if at all, only at 
the cost of a hard-handed and sustained reactionary policy. Indeed, it may 
be an open question whether any concerted scheme of reactionary measures 
will suffice to maintain or to re-establish the passing status quo. It 
takes the form of a question as to whether the Old Order can be 
rehabilitated, not whether it will stand over by its own inertia. And it 
is, perhaps, still more of an open question what would be the nature and 
dimensions of those departures from the holding ground of the Old Order 
which the new conditions of life insist on.

But the situation is of a revolutionary character, in the sense that those 
underlying principles of human intercourse on which the Old Order rests are 
no longer consonant with the circumstances which now condition this 
intercourse. The spiritual ground on which rights and duties have been 
resting has shifted, beyond recall. What has been accepted hitherto as 
fundamentally right and good is no longer securely right and good in human 
intercourse as it must necessarily run under the altered circumstances of 
today and tomorrow. The question, in substance, is not as to whether the 
scheme is to be revised, but only as to the scope and method of its 
revision, which may take the direction of a rehabilitation of the passing 
order, or a drift to new ground and a New Order.

The principles of right and honest living are of the nature of habit, and 
like other habits of thought these principles change in response to the 
circumstances which condition habituation. But they change tardily; they 
are tenacious and refractory; and anything like a deliberate shifting to 
new ground in such a matter will come to pass only after the old position 
has become patently untenable, and after the discipline exercised by the 
new conditions of life has had time to bend the spiritual attitude of the 
community into a new bias that will be consonant with the new conditions. 
At such a juncture a critical situation will arise. So today a critical 
situation has arisen, precipitated and emphasised by the experience of the 
war, which has served to demonstrate that the received scheme of use and 
wont, of law and order and equity, is not competent to meet the exigencies 
of the present.

In the last resort, these changes of circumstance that have so been going 
forward and have put the received scheme of law and order out of joint are 
changes of a technological kind, changes that affect the state of the 
industrial arts and take effect through the processes of industry. One 
thing and another in the institutional heritage has so been outworn, or 
outlived; and among these is the received conception of the place and value 
of nationalities.

The modern industrial system is worldwide, and the modern technological 
knowledge is no respecter of national frontiers. The best efforts of 
legislators, police, and business men, bent on confining the knowledge and 
use of the modern industrial arts within national frontiers, has been able 
to accomplish nothing more to the point than a partial and transient 
restriction on minor details. Such success as these endeavors in restraint 
of technological knowledge have [388] met with has effected nothing better than a 
slight retardation of the advance and diffusion of such knowledge among the 
civilised nations. Quite patently, these measures in restraint of 
industrial knowledge and practice have been detrimental to all the peoples 
concerned, in that they have lowered the aggregate industrial efficiency of 
the peoples concerned, without increasing the efficiency, wealth, or 
wellbeing of any one of them. Also quite patently, these endeavors in 
restraint of industry have not successfully prevented the modern industrial 
system from reaching across the national frontiers in all directions, for 
materials and for information and experience. Indeed, so far as regards the 
industrial work of the modern peoples, as distinct from the commercial 
traffic of their business men, it is plain that the national frontiers are 
serving no better purpose than a moderately effectual obstruction. In this 
respect, the national frontiers, and all that system of discrimination and 
jealousy to which the frontiers give definition and emphasis, are worse 
than useless; although circumstances which the commercialised statesmen are 
unable to control have made the frontiers a less effectual bar to 
intercourse than would suit the designs of national statecraft.

The case stands somewhat different as regards that commercial traffic that 
makes use of the modern industrial system. Business enterprise is a pursuit 
of private gain. Not infrequently one business concern will gain at the 
cost of another. Enterprising business concerns habitually seek their own 
advantage at the cost of their rivals in the pursuit of gain; and a 
disadvantage imposed on a rival concern or on a competing line of business 
enterprise constitutes a competitive advantage. Hindrance of a competitor 
is an advantage gained. Business enterprise is competitive, even where 
given business men may work in collusion for the time being with a view to 
gains that are presently to be divided. And success in business is always 
finally a matter of private gain, frequently at the cost of some one else. 
Business enterprise is competitive.

But the like is not the case with industrial efficiency. And the material 
interest of the community centers on industrial efficiency, on the 
uninterrupted production of goods at the lowest practicable cost in terms 
of material and man power. The productive efficiency of any one industrial 
plant or industrial process is in no degree enhanced by-the inefficiency of 
any other plant or process comprised in the industrial system; nor does any 
productive advantage come to the one from a disadvantage imposed on 
another. The industrial process at large is of a co-operative nature, in no 
degree competitive - and it is on the productive efficiency of the 
industrial process at large that the community's material interest centers. 
But while business enterprise gets its gains from industry, the gains which 
it gets are got in competition with rivals; and so it becomes the aim of 
competitive business concerns to hinder the productive efficiency of those 
industrial units that are controlled by their rivals. Hence what has been 
called "capitalistic sabotage." All this, of course, is the merest 
commonplace of economic science.

At this point the national frontiers come into the scheme of economic life, 
with the jealousies and discrimination which the frontiers mark and embody. 
The frontiers, and that obstruction to traffic and intercourse in which the 
frontiers take effect, may serve a gainful purpose for the business 
concerns within the frontiers by imposing disadvantages on those outside, 
the result being a lowered efficiency of industry on both sides of the 
frontier. In short, so far as concerns their place and value in modern 
economic life, the national frontiers are a means of capitalistic sabotage; 
and indeed that is all they are good for in this connection. All this, 
again, is also a commonplace of economic science.

In past time, before modern industry had taken on its modern character and 
taken to the use of a wide range of diversified materials and products 
drawn from all over the habitable world - in the past the obstruction to 
industry, and therefore to material well-being, involved in the use of the 
frontiers as a means of sabotage was of relatively slight consequence. In 
the state of the industrial arts as it prevailed in that past era, the 
industrial processes [389] ran on a smaller scale and made relatively little use 
of materials drawn from abroad. The mischief worked by sabotage at the 
frontiers was consequently also relatively slight; and it is commonly 
believed that other, incidental gains of a national character would accrue 
from so obstructing traffic at the frontiers, in the way of national self-
sufficiency and warlike preparation. These presumed gains in point of 
"preparedness," it has been presumed, would outweigh the relatively slight 
economic mischief involved in the practice of national sabotage by the 
obstructive use of the frontiers, under the old system of small-scale and 
home-bred industry.

Latterly this state of things, which once served in its degree to minimise 
the economic mischief of the national frontiers, has become obsolete. As 
things stand now, no civilised country's industrial system will work in 
isolation. Not only will it not work at a high efficiency if it is 
effectually confined within the national frontiers, but it will not work at 
all. The modern state of the industrial arts will not tolerate that degree 
of isolation on the part of any country, even in case of so large and 
diversified a country as the United States. The great war has demonstrated 
all that. Of course, it may be conceived to be conceivable that a modern 
civilised community should take thought and deliberately forgo the use of 
this modern state of the industrial arts which demands a draft on all the 
outlying regions of the earth for resources necessary to its carrying-on; 
and so should return to the archaic scheme of economic life that prevailed 
in the days before the Industrial Revolution; and so would be able to carry 
on its industrial life in a passable state of isolation, such as still 
floats before the vision of the commercialised statesmen. But all that line 
of fantastic speculation can have only a speculative interest. In point of 
practical fact, the nations of Christendom are here together, and they live 
and move and have their being within this modern state of the industrial 
arts, which binds them all in an endless web of give and take across all 
national frontiers and in spite of all the well-devised obstructive 
measures of the commercialised statesmen.

As an industrial unit, the nation is out of date. This will have to be the 
point of departure for the incoming New Order. And the New Order will take 
effect only so far and so soon as men are content to make up their account 
with this change of base that is enforced by the new complexion of the 
material circumstances which condition human intercourse. Life and material 
wellbeing are bound up with the effectual working of the industrial system; 
and the industrial system is of an international character - or it should 
perhaps rather be said that it is of a cosmopolitan character, under an 
order of things in which the nation has no place or value.

But it is otherwise with the business men and their vested interests. Such 
business concerns as come into competition with other business concerns 
domiciled beyond the national frontiers have an interest in the national 
frontiers as a means of obstructing competition from beyond. For the 
purpose of private gains, to accrue to certain business concerns within the 
country, the national frontiers, and the spirit of national jealousy, are 
valuable as a contrivance for the restraint of trade; or, as the modern 
phrasing would make it, these things are made use of as a means of 
sabotage, to limit competition and prevent an unprofitably large output of 
merchantable goods being put on the market - unprofitable, that is, to the 
vested interests already referred to, though advantageous to the community 
at large.

Conversely, vested interests engaged in the pursuit of private gain in 
foreign parts, in the way of foreign investments, foreign concessions, 
export trade, and the like, also find the national establishment 
serviceable in enforcing claims and in procuring a profitably benevolent 
consideration of their craving for gain on the part of those foreign 
nations into whose jurisdiction their quest of profits is driving them. At 
this point, again, the community at large, the common men of the nation, 
have no material interest in furthering the advantage of the vested 
interests by use of the national power; quite the contrary in fact, 
inasmuch as the whole matter resolves [390] itself into a use of the nation's 
powers and prestige for the pecuniary benefit of certain vested interests 
which happen to be domiciled within the national frontiers. All this, 
again, is a commonplace of economic science.

The conclusion is equally simple and obvious. As regards the modern 
industrial system, the production and distribution of goods for common use, 
the national establishment and its frontiers and jurisdiction serve 
substantially no other purpose than obstruction, retardation, and a 
lessened efficiency. As regards the commercial and financial considerations 
to be taken care of by the national establishment, they are a matter of 
special benefits designed to accrue to the vested interests at the cost of 
the common man. So that the question of retaining or discarding the 
national establishment and its frontiers, in all that touches the 
community's economic relations with foreign parts, becomes in effect a 
detail of that prospective contest between the vested interests and the 
common man out of which the New Order is to emerge, in case the outcome of 
the struggle turns in favor of the common man.

THORSTEIN VEBLEN.
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