The Year of Economics: The Struggle for the World Product

Anyone who, in these weeks and months of the "oil crisis," is asked to forecast the future development of international economic relations and who looks for fixed data and reliable trends to support his forecast will soon run into serious difficulties. Even after the mid-February Energy Conference in Washington, the impression, disturbing in many respects, remains that the world economy has entered a phase of extraordinary instability and that its future course is absolutely uncertain; it may bring stability, but also still greater instability. More integration, closer coöperation, an improved division of labor may increase the overall prosperity of nations. But the future course may just as well be characterized by disintegration, national isolation and the search for more self-sufficiency, thereby enhancing the contrasts already existing in the world.

It would be wrong, of course, to believe that the oil price explosion was the only cause of instability. But the massive increase in oil prices has clearly revealed the actual fragility of this elaborate system of economic relations among the nations of the world, from the structure of their balance of payments to their trade policy. To use energy nomenclature: just as a high-energy neutron breaks through the electrical shielding which surrounds the atom and penetrates into the nucleus, oil has shaken the very foundations of the present world economic system. And just as the neutron may induce oscillation and shatter the nucleus, oil may shatter the laboriously built structure of the world economy. The oil crisis may touch off a chain reaction of destructive forces, but-if properly harnessed and controlled-it may just as well help to improve international coöperation, if all those concerned join in the efforts to find the common denominator of what is going on these days between the Libyan desert and the Gulf of Maracaibo, and if they build a policy of reason on that common denominator.

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