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F.—ECONOMIC SCIENCE AND STATISTICS 93 
the more uncompromising the support they lend to the movement 
towards economic self-sufficiency. 
Again, in the first half of the nineteenth century freedom of trade 
facilitated the discovery of new markets and of new openings for capital. 
Notwithstanding warnings of the danger to investments in countries 
politically unstable, where effective supervision by foreigners was im- 
possible, there was a very great export of capital from Europe to the rest 
of the world. In this England took the lead, although Ricardo was among 
those who pointed to the dangers; and, as export of capital is mainly 
export of goods and a country cannot hinder imports if it wishes to export, 
the free trade movement was of necessity welcomed in Europe by in- 
dustrialists as well as by financiers. Now, however, foreign investments 
have lost their attraction. Interest rates are scarcely commensurate with 
the risks involved and the danger of loss of capital has in no way diminished. 
Moreover, the time is past when even the most powerful government dare 
collect interest or principal of debts from foreigners for its own subjects 
by threat of military or naval demonstration. Holders of foreign 
securities have learned much through open repudiation of debts by 
revolutionary governments and through currency devaluation. They 
have also learned that if free trade is a necessary concomitant of freedom 
_ of foreign investment it is not worth retaining the former merely to assure 
a continuance of the latter. 
In the early days of industrialism international trade promoted division 
of labour in every meaning of that term. This, in turn, permitted such 
a lowering of costs that the standard of life was raised in almost every 
country in the world. Moreover, international intercourse quickly dis- 
seminated everywhere knowledge of new inventions and of new com- 
modities with consequent expansion of trade and production. Ina period 
_ of rapid change such as that, freedom of trade offered the maximum of 
opportunity to those wishing to seize it. Any policy except that of 
unrestricted freedom would have created obstacles. 
Conditions are now very different. Modern large-scale rationalised 
industrial units are exceedingly vulnerable. Unless they can operate at 
_ or near the output for which they are designed and find markets at prices 
_ covering costs for all they produce they must soon go under or be recon- 
stituted. It is only natural, therefore, that there should be an insistent 
demand from their managers and shareholders for guarantee of the home 
market, the only market from which the foreigner can with certainty be 
excluded, and that Empire Preference should be welcomed by them for 
the security of whatever overseas trade agreements of this kind are 
expected to promote. 
Again, scientific progress and technological invention which used to lend 
support to a free trade policy are now among the most powerful of forces 
encouraging economic nationalism. Standardisation of processes and of 
output, development of intricate machine tools which can be operated by 
comparatively unskilled labour after a brief period of training, wide distribu- 
tion of electrical power and the growth of technical education in every 
branch of industry enable new factories to be set up with equal prospects 
of success almost anywhere throughout the world. So, Lancashire finds 
