By Fritz Machlup (auth.)
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The needed instrument. One might think that on this question economists and political scientists are neatly divided, but this is not so. We find mixed company on both sides of the issue. A good many economists have declared that a customs union was politically impossible without simultaneous or preceding political integration. Other economists, however, were convinced that closer political relations and, eventually, peace among the nations, could be achieved only by means of economic co-operation and co-ordination ahead of political unification.
A TAXONOMIC AND SEMANTIC SUMMARY I have proposed that much of the ambiguity of the term economic integration may be avoided by the use of qualifying adjectives, and I have also discussed some of the adjectives that have attained wide currency. A warning may be in order, however, not to expect that the proposed adjectives remove all vagueness. Unfortunately, some of the adjectives have been used as ambiguously as the noun. Here is a sample: Regional has been used to mean (i) provincial, any part of a state; (ii) multinational, two or more states but less than the world; (iii) any territory, such as a province, a nation, a group of nations but also the whole world.
If, on balance, the border tax adjustments favour export to other member countries, are they possibly discriminatory, favouring the wrong products? If controls on payments hinder monetary transactions with other member countries, how can the effects on trade and on capital movements be appraised separately? How can changes in people's The Meaning of the Term and its Scope 25 propensities and in institutional arrangements, promoting or discouraging movements of people, funds, and goods, be analysed for their separate and combined effects on mobility?
A History of Thought on Economic Integration by Fritz Machlup (auth.)