Alchemy--Master or Servant

by HERBERT FEIS and THOMAS L, FINLETTER

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AT THE end of the last war our government acquired many important German chemical patents and formulas. Our action was felt to be justified by the way in which Germany had used its control to dominate competitors and to serve an aggressive military policy. The energy and success of the American chemical industry in the development of the new processes, and in adding to them, was stimulated by a determination to end our dependence on Germany in the chemical held. It was judged essential that the United States achieve a large measure of independence of foreign supplies of critical chemicals — a judgment clearly vindicated by subsequent events. During the period of development, substantial tariff protection was deemed necessary to safeguard various new branches of the industry against established foreign competition. The chemical industry, in defense of this need, dramatically emphasized the importance of its products in peace and war.

Its achievements and presentation attracted many who advocated economic selfsufficiency and political isolation as national policies. These sought avidly for proof that it was not essential for the United States to trade with the rest of the world. They believed that that fact, if it could be established, should and would be accepted as a governing consideration in our foreign policy; they believed they had found the necessary proof in the new miracles of chemistry. For chemistry, they argued with an urgent glow, enabled us to utilize domestic raw materials in place of various ones which could only be procured from abroad, and to substitute now domestic products made of domestic raw materials for various imported products. Further, they calculated that new industrial uses would be created for domestic farm production, thereby absorbing some of our troublesome agricultural surpluses for which we had to seek foreign markets.

Thus it came about that the work of the chemical laboratories and factories was gradually endowed by these advocates with the aim and feeling expressed in the quotation from “The Deserted Village" that the Chemical Foundation placed on the cover page of its widely distributed literature: —

Two world wars within a generation have not eliminated the arguments for economic isolation or the assertion that chemistry will deal the blow to trade between nations that the science of the past has failed to do. The declaration is renewed that chemistry is providing the means by which nations can, may, must, or should fulfill Goldsmith’s precept; that molecular chemistry is to be the forerunner of molecular economics and politics. For while it is recognized that synthesis is the final stage in chemistry, it is urged that in economic affairs each nation (or it may be region) live its life apart.

In prophetic mood, the bold assertion appears again in Garet Garrett’s article in this issue that international trade is finished, ruined, with the explanation that what is meant by international trade is not the exchange of “ unlike and unique goods ” but international trade as a necessity. This, we are fold, comes from the fact that we are now passing from the age of machine technique to the age of alchemy— the synthetic and plastic age in which nations will use for all their necessary purposes materials widely and freely available. The prospect exposed to man is that “given now the carbohydrates, vegetable oils, the alcohols, sunshine, air, land, and water" it is possible for him to shape matters into any form he likes — or nearly so. Startling instances of the revolutionary and new techniques already in use are called to our attention, such as the development of artificial textile fibers as substitutes for cotton, wool, and silk; artificial nitrates which take the place of natural nitrates; synthetic rubber in place of natural rubber; synthetic fuels in place of natural petroleum products.

The consequences of this new mastery of man over matter are not always stated in the same terms. Sometimes we are told that almost all countries of the world can or could become self-contained; at other times the prediction is somewhat different — that the world is being forced into several great though unspecified regions of self-containment. It is unclear as to whether the peoples will have any voice in this matter at all, whether they are to be wholly or only partly in the hands of their chemical geniuses. Such latitude in meaning is usual on the part of prophets. It is also impossible to be certain whether the predicted outcome — the end of international trade — is to be regarded as an ominous or as a forward step in human affairs, though a certain air of welcoming enthusiasm for the growth of self-sufficiency may be detected. Not infrequently an unexpressed political view may affect the scientific conclusions.

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Like many other important productive applications of new scientific knowledge, the creation and bringing into wide-scale use of synthetics and plastics will have far-reaching consequences. They will lead to great changes in the internal productive activities of countries. They will bring about the decline of some existing trade; create new flows and branches of trade; they will stimulate new capital investments and combinations; they will confront every government with new and important issues in the regulation of its trade with the outside world. They will create new conditions and possibilities in the political and military relations of countries, and quite possibly, in time, foster the merger of small national states into larger units. In short, chemical performance will continue to contribute to that whirligig of constant change amid which we seem destined to live. But there is no reason to believe— barring the tragic possibility that the world may be unable to master its problem of change and enter serious permanent decline — that one of the results to be anticipated is the end of international trade.

Since this bold prophecy (which really is advocacy of a common propaganda type — endowing the advocate’s desire with the mark of inevitability) sometimes safeguards itself by asserting that it deals only with international trade regarded as a necessity, let us first have a look at this safeguarding observation.

It is not easy to measure the realm of necessity; it is largely what the mind and spirit find it to be. The conception of necessity in the poorer countries may be limited to the barest needs for food and shelter. Presumably our judgment must take into account the more progressive productive societies which have achieved a substantial measure of economic well-being and actively desire to improve their methods of production. Presumably also the prophecy is not intended to be a plea for poverty; we are not being asked to turn backward in the course of material progress which has been made possible in such large part by the previous achievements of science. If these be correct assumptions, then the area of necessity to be reckoned with includes all those many products which serve the Western world as food, shelter, comfort, recreation, security, and toil-shortening implements.

Thus viewed, the measure of necessity, as expressed in the desires of peoples, constantly changes; and among peoples of the Western civilizations at least, it ordinarily grows more rapidly than the power of production to satisfy. Extremely poor peoples, hopeless about their power to produce goods that might assure their comfort, take refuge in dreams; but offer to any people the chance to acquire new or greater amounts of useful products and they will soon seize upon it and transmute it into necessity.

Similarly, the persistent urge toward improvement on the part of producers is potentially insatiable. The requirements of producers for raw materials tend constantly to increase in diversity and amount. Though new knowledge provides raw materials that take the place of some previously in use, the whole course of industrial production has meant an increased search and use for an ever extending variety of raw materials. The steel industry, for example, has now taken to the manufacture of many different kinds of steels in its search for perfection, and for each type of steel it requires different materials. The result has been the use of a greater variety of materials drawn from more points on the globe than ever before. Even the chemical industry, more naturally fitted than most for national economic independence, draws from abroad a greater quantity of raw materials (if we include, as we should, fats and oils and other products of agricultural origin as feeders of the chemical industry) than it did twenty-five years ago. The alchemist’s empire has been ever more world-encircling.

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So much for the safeguarding boundary that is sometimes placed around the argument. Now let us go outside the boundary. Except in the case of the very poorest countries, most trade between nations does not take place because of any absolute necessity. This may be the case with very poor countries just because they are very poor, and lack the productive income to exchange anything but absolute necessities. But trade between other countries is very largely a matter not of necessity but of mutual advantage. Its basis lies in the fact that each country differs from the rest in resources, skill, cost and price levels, and social arrangements. It takes place because each finds it advantageous to secure many goods and services from the others at a lower cost in terms of working effort and capital than would be required if each endeavored to make these products itself. The economic basis of this interchange — which explains how the division of productive activity between nations ordinarily comes about — is a commonplace of economic analysis set forth in every textbook; it has always been ignored by the advocates of self-sufficiency.

Trade between nations takes place not only in goods in which they could not possibly be competitive producers, but also in goods partly or wholly, directly or indirectly, competitive. The goods which each country acquires from abroad are not alone those which it could not produce, but also those it could produce only at a most disadvantageous scale of cost, comparatively. The goods which each country sells abroad are not alone those that the buying countries could not produce, but those which the exporting country produces on the most advantageous terms, comparatively.

Where trade is left to be determined by the initiative and calculations of producers and traders, working for profit, this advantage is determined in the competitive market place. Where governments govern or conduct trade, they must recognize the advantage of securing from abroad products made only at much greater cost at home, or sacrifice the advantage. In what measure and direction to permit these advantages to rule, in what measure to supersede them for other ends, economic or otherwise, is the central question of economic foreign policy before all governments. The assignment of determining this, in the light of all pertinent economic and political circumstance, and not merely as an outcome of pressure to shut off imports or indefinitely enlarge exports, is what makes the existence of government officials lively, and their tenure brief.

The international division of productive activity and the consequent exchange of products take place, if permitted, no matter what the nature, no matter what the technical basis, of production. The wider the possible range of production opened up by science, the wider will be the range of possible trading opportunity. The total movement of trade is a matter of national calculation, not one foredestined by the course of technical change, even though technical change always brings about substantial shifts and adjustments in trade by affecting the costs and prices in terms of which the immediate advantage of trade in various commodities are reckoned.

The possibilities of trade are indefinitely great. For it rests ultimately on two extensible types of human desires: first, the desire for the means and equipment for making labor more productive and lessening the burden of toil; second, the desire for things for use. If the results of chemistry or any other science should enable any and all countries to make for themselves any or all of the things that before they had to purchase elsewhere, it is certain that devising minds would immediately seek elsewhere equipment that would make possible a still further improvement in the methods of production, while greedy spirits would simultaneously experience new unsatisfied wants.

In trying to estimate what consequences in the field of international trade are to be expected as a result of the most recent growth in our chemical knowledge, the records of the past may give helpful indication; though admittedly, if the world should prove to be in for a period of prolonged disorder and conflict, the record of the past would prove irrelevant. In earlier periods there also took place numberless steps forward in human ability to rearrange the chemistry of matter. Such were, for example, the gaining of the knowledge of how to make brick, how to refine salt, reduce iron, tan leather; or to take more advanced examples, how to refine petroleum and coal into their many products, and how to use new alloys to improve the quality of steels. Each of these technical advances resulted in important changes in trade movements.

What is clear is that over the long stretch of time the displacements were absorbed in the growing volume of trade interchange that came about as a result of the growing productive capacity of the nations. This stands out particularly in the trade record of the nineteenth century. The course of growth is indicated by the following table: —

WORLD MOVEMENT OF INTERNATIONAL TRADE

This was the period of emergence into common use of the telephone, the radio, the automobile and the airplane, the moving picture, many new types of automatic and agricultural machinery. Trade in all the new products of science entered into the rising total. There arose as well an important new trade in the materials and machinery required to construct the manufacturing establishments for new products born of the new scientific knowledge.

The explanation for this rise of trade is the increase of production that occurred, the increase in population thereby sustained, and the constant addition to the number of products in which nations could trade and desired to trade. Given the necessary measure of international order and trust in the world, it would seem contrary to the logic both of experience and of productive development that the new chemical discoveries should have a fundamentally different effect upon trade interchange than the other forms of scientific discovery.

This conclusion may meet doubt in some minds because of haunting fear that all the economic trends of the past have come to a halt; that the ability of nations, at least under our existing economic systems, to improve their economic situation is at an end; that we are at a stage of maturity that is a prelude to decline or stagnation. This is a conception so broad and so complex that we cannot deal with it here. Our conviction is that if the world is freed from the constant fear of war this conception will be proved false conclusively.

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Since the chemical changes now hailed as revolutionary have to do primarily with the composition of new raw materials, particular note might be taken of prospects in this field. If the chemists’ work fulfills the promises now made, it is plain that there will be many changes in the raw materials used in various branches of production and many substitutions. It is plain also that there will result significant shifts in the geographical sources of supply. These in turn will bring about important changes in the key areas of production, both of raw materials and of finished products, and in the relative importance of different producing localities.

If it should turn out that the important new synthetic materials are made by the use of substances supplied by nature everywhere in virtually unlimited amounts, such as air, water, clay, and salt, a decline in the trade in raw materials between the countries of the world would take place. This would be especially probable if the products that are made out of the new synthetic materials replace others which are consumed in large quantities. If synthetics should take the place of iron ore and the other metallic ores, prove superior to the natural textile fibers, make better coffee than the coffee bean, furnish the sweet nutriment of sugar without the sugar cane,— and so on down the list of our habitual large consumption supplies, — then there might result a substantial decline in the international trade in raw materials. Undoubtedly some of these things or others like them are destined to happen.

But the safer surmise nevertheless is that the flow of international exchange even of raw materials is destined to increase rather than decline. The broad underlying reasons for this judgment have already been indicated; but there are several more particular reasons.

First, various important new synthetic materials and plastics use materials by no means in generous supply everywhere. The judgment should not be misled by a few spectacular instances to the contrary, as, for example, nitrates from the air. The growing list of manufactures from wood-pulp products, including rayon, are accumulating a draft of unprecedented size on the world’s forests. New synthetics even more markedly important are derived either because of chemical necessity, or because they are cheaper or more satisfactory, from petroleum or natural gas. It may be predicted with certainty that the world demand for petroleum and world trade therein will grow more rapidly than the synthetic fuels which may replace petroleum in some considerable measure and uses. Coal, which is the important original natural substance relied on for many of the new processes, is found only in limited quantities in some places. The chemists are looking to alcohol made from various plant growths as the basis both of new fuels and of many other chemical products. Even leaving cost considerations out of account, it would not be easy for many countries to produce the quantities of plant growths that would be required; there are limits to be encountered even in the vegetable kingdom.

Second, unless the risk of war is great and imminent, it is not believed that even those countries that could afford to do so would put aside cost considerations totally; and many will have neither the means nor the industrial capabilities to do so.

The plant required for the production of many of the new synthetic substances and chemicals is in many instances most expensive, and the electric power requirements great. Thus even though the raw substances used may be extremely cheap because of their abundance, it remains to be seen how far many of the new important chemical synthetics and plastics can displace natural products on an approximate competitive basis.

It must be borne in mind that technical knowledge is also operating to bring about a decline in the cost of production of many of the natural products — witness, for example, the marked rise in acreage yield of natural rubber because of improved stock, the notable improvements in the methods of petroleum extraction and most forms of metal mining, and advances in the breeding of wool-bearing sheep. Competition of the new products will spur on further reductions in the cost of production of the natural products, and make for the survival of the more effective producing sources.

These would be offsetting influences enabling the natural products to hold considerable place even in the fields where the new materials have appeared. This would be particularly true if total demand should be enlarged, as is to be anticipated. How enormously that total demand can be enlarged is being demonstrated during this war period with its avid search for all raw materials, natural and synthetic.

Third, to the extent that the new materials may prove themselves cheaper or better substitutes, the products made therefrom should in turn be available at lower cost. Reductions have already taken place to a certain extent in the case of commodities like radio cabinets, household wares, and automobiles. Such decreases in costs tend to stimulate a greater demand which reflects itself in enlarged raw-material requirements.

So much for the question of the prospective effect of the emergence of synthetics and plastics upon the course of international trade. That is but a fragment of the broad underlying question with which we should be concerned. Implicit though the broad argument may remain in all presentations which look to the use of science to restrict international trade, its meaning is clear: that science should be turned to the achievement of economic isolationism for the United States, as the basis of political isolation.

Ultimately we find ourselves dealing with the fixed conviction that political isolation will lessen the likelihood that the United States will have to concern itself with the world’s political difficulties and problems of power. The argument is that if we could make at home all the goods which we need to maintain a proper standard of living, on the one hand we should be released from dependence on foreign supplies; on the other hand we should avoid the irritations and conflicts and uncertainties connected with competition in foreign markets. The advice that is implicit in these quasi-scientific presentations is that we should use the power of the state to achieve this economic independence and then place ourselves behind impregnable fences to enjoy our peaceful plenty.

How difficult of satisfactory fulfillment — even as a matter of organizing production — this would be even for the few most powerful industrial countries like the United States, how impossible it would be for all other countries, we have tried to indicate. And what must be said again is that this is essentially a political argument. It is essentially the same political argument that has been going on for the last quarter-century in this country and elsewhere.

It is not by eliminating commerce or by dodging the persistent fact that we must take our part in the world’s affairs that we can achieve peace. Peace will be achieved, if at all, only by the determination of the common people everywhere that it shall be done, and by the action of our statesmen in making their determination effective. Wise policy will strive to blend a prudent safeguarding of the essentials of national security in the light of the political conditions that prevail, and a great and determined support for the international political and economic arrangements needed to create a peaceful international society.

The economics which may help to improve the material condition of men and maintain their hopes could contribute to the attainment of the end; the economics that threw each country back upon its own resources and left each to struggle to work out its problems alone would tend to defeat the end.

One final comment. The new achievements of science may be turned by nations either towards the cause of peace or toward the making of war. Undoubtedly Germany’s calculations for victory were emboldened by its newly gained power to manufacture within its own borders substitutes for rubber, petroleum, wool, and other products. Italy, too, seems to have had its judgment even more warped by the same conviction that it was safeguarded by its production of substitutes. The fact that these calculations — supplemented as they were by substantial stockpiles of natural raw materials — were overoptimistic is becoming increasingly plain. Blockade runners are seeking even now to complete the dangerous trip from the Far East with natural rubber; the German thrust into the Caucasus was prompted in part by the need for petroleum; the Axis powers are counting the sheep of every conquered country and rapaciously uncovering the backs of all their unhappy inhabitants. Nevertheless, the new chemical possibilities may breed the same confidence in other countries and hence increase the danger of war.

It is plain that the increased destructive power of the implements that science has provided in even more fearful measure increases the risk that the human race will destroy itself. The race between international politics and scientific invention grows more perilous and its outcome more vital.

Let us bring out the point by going to the ultimate. Suppose the chemists should teach us in some very simple fashion to make a super-powerful explosive out of common mud. For a short time, the muddiest country might be deemed to have gained in relative military power. But before long other countries would find a way to catch up on the production of mud. The significant outcome would be merely the ability of each country to destroy others even greater than before.

The absurdity of the example is merely a matter of degree. The basic question is the same — whether relations between nations will so be managed that the increased productive power, of which the new achievements of synthetics and plastics is but one element, will be employed in the service of peaceful production or will become the ultimate destroyer.