THE OLD ECONOMY AND THE POST-WAR STATE
This chapter suggests the following:--
* * * * *
The trans-national processes which enabled Europe to support itself
before the War, were based mainly on private exchanges prompted by the
expectation of individual advantage. They were not dependent upon
political power. (The fifteen millions for whom German soil could not
provide, lived by trade with countries over which Germany had no
political control, as a similar number of British live by similar
non-political means.)
The old individualist economy has been largely destroyed by the State
Socialism introduced for war purposes; the Nation, taking over
individual enterprise, became trader and manufacturer in increasing
degree. The economic clauses of the Treaty, if enforced, must prolong
this tendency, rendering a large measure of such Socialism permanent.
The change may be desirable. But if co-operation must in future be less
as between individuals for private advantage, and much more as between
_nations_, Governments acting in an economic capacity, the political
emotions of nationalism will play a much larger rôle in the economic
processes of Europe. If to Nationalist hostilities as we have known them
in the past, is to be added the commercial rivalry of nations now
converted into traders and capitalists, we are likely to have not a less
but more quarrelsome world, unless the fact of interdependence is much
more vividly realised than in the past.
The facts of the preceding chapter touching the economic chaos in
Europe, the famine, the debauchery of the currencies, the collapse of
credit, the failure to secure indemnities, and particularly the remedies
of an international kind to which we are now being forced, all confirm
what had indeed become pretty evident before the War, namely, that much
of Europe lives by virtue of an international, or, more correctly, a
transnational economy. That is to say, there are large populations that
cannot live at much above a coolie standard unless there is a
considerable measure of economic co-operation across frontiers. The
industrial countries, like Britain and Germany, can support their
populations only by exchanging their special products and
services--particularly coal, iron, manufactures, ocean carriage--for
food and raw materials; while more agricultural countries like Italy and
even Russia, can maintain their full food-producing capacity only by an
apparatus of railways, agricultural machinery, imported coal and
fertilisers, to which the industry of the manufacturing area is
indispensable.
That necessary international co-operation had, as a matter of fact, been
largely developed before the War. The cheapening of transport, the
improvement of communication, had pushed the international division of
labour very far indeed. The material in a single bale of clothes would
travel half round the world several times, and receive the labour of
half a dozen nationalities, before finally reaching its consumer. But
there was this very significant fact about the whole process;
Governments had very little to do with it, and the process did not rest
upon any clearly defined body of commercial right, defined in a regular
code or law. One of the greatest of all British industries, cotton
spinning, depended upon access to raw material under the complete
control of a foreign State, America. (The blockade of the South in the
War of Secession proved how absolute was the dependence of a main
British industry upon the political decisions of a foreign Government).
The mass of contradictory uncertainties relating to rights of neutral
trade in war-time, known as International Law, furnished no basis of
security at all. It did not even pretend to touch the source--the right
of access to the material itself.
That right, and the international economy that had become so
indispensable to the maintenance of so much of the population of Western
Europe, rested upon the expectation that the private owner of raw
materials--the grower of wheat or cotton, or the owner of iron ore or
coal-mines--would continue to desire to sell those things, would always,
indeed, be compelled so to do, in order to turn them to account. The
main aim of the Industrial Era was markets--to sell things. One heard of
'economic invasions' before the War. This did not mean that the invader
took things, but that he brought them--for sale. The modern industrial
nation did not fear the loss of commodities. What it feared was their
receipt. And the aid of Governments was mainly invoked, not for the
purpose of preventing things leaving the country, but for the purpose of
putting obstacles in the way of foreigners bringing commodities into the
country. Nearly every country had 'Protection' against foreign goods.
Very rarely did we find countries fearing to lose their goods and
putting on export duties. Incidentally such duties are forbidden by the
American Constitution.
Before the War it would have seemed a work of supererogation to frame
international regulations to protect the right to buy: all were
searching for buyers. In an economic world which revolved on the
expectation of individual profit, the competition for profit kept open
the resources of the world.
Under that system it did not matter much, economically, what political
administration--provided always that it was an orderly one--covered the
area in which raw materials were found, or even controlled ports and
access to the sea. It was in no way indispensable to British industry
that its most necessary raw material--cotton, say--should be under its
own control. That industry had developed while the sources of the
material were in a foreign State. Lancashire did not need to 'own'
Louisiana. If England had 'owned' Louisiana, British cotton-spinners
would still have had to pay for the cotton as before. When a writer
declared before the War that Germany dreamed of the conquest of Canada
because she needed its wheat wherewith to feed her people, he certainly
overlooked the fact that Germany could have had the wheat of Canada on
the same conditions as the British who 'owned' the country--and who
certainly could not get it without paying for it.
It was true before the War to write:--
'Co-operation between nations has become essential for the very
life of their peoples. But that co-operation does not take place as
between States at all. A trading corporation called "Britain" does
not buy cotton from another corporation called "America." A
manufacturer in Manchester strikes a bargain with a merchant in
Louisiana in order to keep a bargain with a dyer in Germany, and
three, or a much larger number of parties, enter into virtual, or
perhaps actual, contract, and form a mutually dependent economic
community (numbering, it may be, with the work-people in the group
of industries involved, some millions of individuals)--an economic
entity so far as one can exist which does not include all organised
society. The special interests of such a community may become
hostile to those of another community, but it will almost certainly
not be a "national" one, but one of a like nature, say a shipping
ring or groups of international bankers or Stock Exchange
speculators. The frontiers of such communities do not coincide with
the areas in which operate the functions of the State. How could a
State, say Britain, act on behalf of an economic entity such as
that just indicated? By pressure against America or Germany? But
the community against which the British manufacturer in this case
wants pressure exercised is not "America" or "Germany"--both want
it exercised against the shipping ring or the speculators or the
bankers who in part are British. If Britain injures America or
Germany as a whole, she injures necessarily the economic entity
which it was her object to protect.'[19]
This line of reasoning is no longer valid, for it was based upon a
system of economic individualism, upon a distinction between the
functions proper to the State and those proper to the citizen. This
individualist system has been profoundly transformed in the direction of
national control by the measures adopted everywhere for the purposes of
war; a transformation that the confiscatory clauses of the Treaty and
the arrangements for the payment of the indemnity help to render
permanent. While the old understanding or convention has been
destroyed--or its disappearance very greatly accelerated--by the Allies,
no new one has so far been established to take its place. To that fact
we must ascribe much of the economic paralysis that has come upon the
world.
I am aware, of course, that the passage I have quoted did not tell the
whole story; that already before the War the power of the political
State was being more and more used by 'big business'; that in China,
Mexico, Central America, the Near East, Morocco, Persia, Mesopotamia,
wherever there was undeveloped _and disorderly_ territory, private
enterprise was exercising pressure upon the State to use its power to
ensure sources of raw material or areas for the investment of capital.
That phase of the question is dealt with at greater length
elsewhere.[20] But the actual (whatever the potential) economic
importance of the territory about which the nations quarrelled was as
yet, in 1914, small; the part taken by Governments in the control and
direction of international trade was negligible. Europe lived by
processes that went on without serious obstacle across frontiers. Little
States, for instance, without Colonies (Scandinavia, Switzerland) not
only maintained a standard of living for their people quite as high as
that in the great States, but maintained it moreover by virtue of a
foreign trade relatively as considerable. And the forces which preserved
the international understanding by which that trade was carried on were
obviously great.
It was not true, before the War, to say that Germany had to expand her
frontiers to feed her population. It is true that with her, as with us,
her soil did not produce the food needed for the populations living on
it; as with us, about fifteen millions were being fed by means of trade
with territories which politically she did not 'own,' and did not need
to 'own'--with Russia, with South America, with Asia, with our own
Colonies. Like us Germany was turning her coal and iron into bread. The
process could have gone on almost indefinitely, so long as the coal and
iron lasted, as the tendency to territorial division of labour was being
intensified by the development of transport and invention. (The pressure
of the population on the food resources of these islands was possibly
greater under the Heptarchy than at present, when they support
forty-five millions.) Under the old economic order conquest meant, not a
transfer of wealth from one set of persons to another--for the soil of
Alsace, for instance, remained in the hands of those who had owned it
under France--but a change of administration. The change may have been
as unwarrantable and oppressive as you will, but it did not involve
economic strangulation of the conquered peoples or any very fundamental
economic change at all. French economic life did not wither as the
result of the changes of frontier in 1872, and French factories were not
shut off from raw material, French cities were not stricken with
starvation as the result of France's defeat. Her economic and financial
recovery was extraordinarily rapid; her financial position a year or two
after the War was sounder than that of Germany. It seemed, therefore,
that if Germany, of all nations, and Bismarck, of all statesmen, could
thus respect the convention which after war secured the immunity of
private trade and property, it must indeed be deeply rooted in
international comity.
Indeed, the 'trans-national' economic activities of individuals, which
had ensued so widespread an international economy, and the principle of
the immunity of private property from seizure after conquest, had become
so firmly rooted in international relationship as to survive all the
changes of war and conquest. They were based on a principle that had
received recognition in English Treaties dating back to the time of
Magna Carta, and that had gradually become a convention of international
relationship.
At Versailles the Germans pointed out that their country was certainly
not left with resources to feed its population. The Allies replied to
that, not by denying the fact--to which their own advisers, like Mr
Hoover, have indeed pointedly called attention--but as follows:--
'It would appear to be a fundamental fallacy that the political
control of a country is essential in order to procure a reasonable
share of its products. Such a proposal finds no foundation in
economic law or history.'[21]
In making their reply the Allies seemed momentarily to have overlooked
one fact--their own handiwork in the Treaty.
Before the War it would have been a true reply. But the Allies have
transformed what were, before the War, dangerous fallacies into
monstrous truths.
President Wilson has described the position of Germany under the Treaty
in these terms:--
'The Treaty of Peace sets up a great Commission, known as the
Reparations Commission.... That Reparation Commission can
determine the currents of trade, the conditions of credit, of
international credit; it can determine how much Germany is going to
buy, where it is going to buy, and how it is going to pay for
it.'[22]
In other words, it is no longer open to Germany, as the result of
guarantees of free movement accorded to individual traders, to carry on
that process by which before the War she supported herself. Individual
Germans cannot now, as heretofore, get raw materials by dealing with
foreign individuals, without reference to their nationality. Germans are
now, in fact, placed in the position of having to deal through their
State, which in turn deals with other States. To buy wheat or iron, they
cannot as heretofore go to individuals, to the grower or mine-owner, and
offer a price; the thing has to be done through Governments. We have
come much nearer to a condition in which the States do indeed 'own'
(they certainly control) their raw material.
The most striking instance is that of access to the Lorraine iron, which
before the War furnished three-fourths of the raw material of Germany's
basic industry. Under the individualist system, in which 'the buyer is
king' in which efforts were mainly directed to finding markets, no
obstacle was placed on the export of iron (except, indeed, the obstacle
to the acquisition by French citizens of Lorraine iron set up by the
French Government in the imposition of tariffs). But under the new
order, with the French State assuming such enormously increased economic
functions, the destination of the iron will be determined by political
considerations. And 'political considerations,' in an order of
international society in which the security of the nation depends, not
upon the collective strength of the whole society, but upon its relative
strength as against rival units, mean the deliberate weakening of
rivals. Thus, no longer will the desire of private owners to find a
market for their wares be a guarantee of the free access of citizens in
other States to those materials. In place of a play of factors which
did, however clumsily, ensure in practice general access to raw
materials, we have a new order of motives; the deliberate desire of
States, competing in power, owning great sources of raw material, to
deprive rival States of the use of them.
That the refusal of access will not add to the welfare of the people of
the State that so owns these materials, that, indeed, it will inevitably
lower the standard of living in all States alike, is certainly true. But
so long as there is no real international society organised on the basis
of collective strength and co-operation, the motive of security will
override considerations of welfare. The condition of international
anarchy makes true what otherwise need not be true, that the vital
interests of nations are conflicting.
Parenthetically, it is necessary to say this: the time may have come for
the destruction of the older order. If the individualist order was that
which gave us Armageddon, and still more, the type of mind which
Armageddon and the succeeding 'peace' revealed, then the present writer,
for one, sheds no tears over its destruction. In any case, a discussion
of the intrinsic merits, social and moral, of socialism and
individualism respectively, would to-day be quite academic. For those
who profess to stand for individualism are the most active agents of its
destruction. The Conservative Nationalists, who oppose the socialisation
of wealth and yet advocate the conscription of life; oppose
Nationalisation, yet demand the utmost military preparedness in an age
when effective preparation for war means the mobilisation particularly
of the nation's industrial resources; resent the growing authority of
the State, yet insist that the power of the National State shall be such
as to give it everywhere domination; do, indeed, demand omelets without
eggs, and bricks not only without straw but without clay.
A Europe of competing military nationalisms means a Europe in which the
individual and all his activities must more and more be merged in his
State for the purpose of that competition. The process is necessarily
one of progressively intense socialisation; and the war measures carried
it to very great lengths indeed. Moreover, the point to which our
attention just now should be directed, is the difference which
distinguishes the process of change within the State from that which
marks the change in the international field. Within the State the old
method is automatically replaced by the new (indeed nationalisation is
mostly the means by which the old individualism is brought to an end);
between nations, on the other hand, no organised socialistic
internationalism replaces the old method which is destroyed. The world
is left without any settled international economy.
Let us note the process of destruction of the old economy.
In July, 1914, the advocacy of economic nationalisation or Socialism
would have been met with elaborate arguments from perhaps nine average
Englishmen out of ten, to the effect that control or management of
industries and services by the Government was impossible, by reason of
the sheer inefficiency which marks Governmental work. Then comes the
War, and an efficient railway service and the co-ordination of industry
and finance to national ends becomes a matter of life and death. In this
grave emergency, what policy does this same average Englishman, who has
argued so elaborately against State control, and the possibility of
governments ever administering public services, pursue? Almost as a
matter of course, as the one thing to be done, he clamours for the
railways and other public services to be taken over by the Government,
and for the State to control the industry, trade, and finance of the
country.
Now it may well be that the Socialist would deny that the system which
obtained during the War was Socialism, and would say that it came nearer
to being State Capitalism than State Socialism; the individualist may
argue that the methods would never be tolerated as a normal method of
national life. But when all allowances are made the fact remains that
when our need was greatest we resorted to the very system which we had
always declared to be the worst from the point of view of efficiency. As
Sir Leo Chiozza Money, in sketching the history of this change, which he
has called 'The Triumph of Nationalisation,' says: 'The nation won
through the unprecedented economic difficulties of the greatest War in
history by methods which it had despised. National organisation
triumphed in a land where it had been denied.' In this sense the England
of 1914-1920 was a Socialist England; and it was a Socialist England by
common consent.
This fact has an effect on the moral outlook not generally realised.
For very many, as the War went on and increasing sacrifices of life and
youth were demanded, new light was thrown upon the relations of the
individual to the State. A whole generation of young Englishmen were
suddenly confronted with the fact that their lives did not belong to
themselves, that each owed his life to the State. But if each must give,
or at least risk, everything that he possessed, even life itself, were
others giving or risking what they possessed? Here was new light on the
institution of private property. If the life of each belongs to the
community, then assuredly does his property. The Communist State which
says to the citizen, 'You must work and surrender your private property
or you will have no vote,' asks, after all, somewhat less than the
_bourgeois_ Military State which says to the conscript, 'Fight and give
your person to the State or we will kill you.' For great masses of the
British working-classes conscription has answered the ethical problem
involved in the confiscation of capital. The Eighth Commandment no
longer stands in the way, as it stood so long in the case of a people
still religiously minded and still feeling the weight of Puritan
tradition.
Moreover, the War showed that the communal organisation of industry
could be made to work. It could 'deliver the goods' if those goods
were, say, munitions. And if it could work for the purposes of war, why
not for those of peace? The War showed that by co-ordinated and
centralised action the whole economic structure can without disaster be
altered to a degree that before the War no economist would have supposed
possible. We witnessed the economic miracle mentioned in the last
chapter, but worth recalling here. Suppose before the War you had
collected into one room all the great capitalist economists in England,
and had said to them: 'During the next few years you will withdraw from
normal production five or six millions of the best workers. The mere
residue of the workers will be able to feed, clothe, and generally
maintain those five or six millions, themselves, and the country at
large, at a standard of living on the whole as high, if not higher, than
that to which the people were accustomed before those five or six
million workers were withdrawn.' If you had said that to those
capitalist economists, there would not have been one who would have
admitted the possibility of the thing, or regarded the forecast as
anything but rubbish.
Yet that economic miracle has been performed, and it has been performed
thanks to Nationalisation and Socialism, and could not have been
performed otherwise.
However, one may qualify in certain points this summary of the
outstanding economic facts of the War, it is impossible to exaggerate
the extent to which the revelation of economic possibilities has
influenced working-class opinion.
To the effect of this on the minds of the more intelligent workers, we
have to add another psychological effect, a certain recklessness,
inseparable from the conditions of war, reflected in the workers'
attitude towards social reform.
Perhaps a further factor in the tendency towards Communism is the
habituation to confiscation which currency inflation involves. Under the
influence of war contrivances States have learned to pay their debts in
paper not equivalent in value to the gold in which the loan was made:
whole classes of bondholders have thus been deprived of anything from
one-half to two-thirds of the value of their property. It is
confiscation in its most indiscriminate and sometimes most cruel form.
_Bourgeois_ society has accepted it. A socialistic society of to-morrow
may be tempted to find funds for its social experiments in somewhat the
same way.
Whatever weight we may attach to some of these factors, this much is
certain: not only war, but preparation for war, means, to a much greater
degree than it has ever meant before, mobilisation of the whole
resources of the country--men, women, industry. This form of
'nationalisation' cannot go on for years and not affect the permanent
form of the society subjected to it. It has affected it very deeply. It
has involved a change in the position of private property and individual
enterprise that since the War has created a new cleavage in the West.
The future of private property which was before the War a theoretical
speculation, has become within a year or two, and especially, perhaps,
since the Bolshevist Revolution in Russia, a dominating issue in
European social and political development. It has subjected European
society to a new strain. The wearing down of the distinction between the
citizen and the State, and the inroads upon the sacro-sanctity of
private property and individual enterprise, make each citizen much more
dependent upon his State, much more a part of it. Control of foreign
trade so largely by the State has made international trade less a matter
of processes maintained by individuals who disregarded their
nationality, and more a matter of arrangement between States, in which
the non-political individual activity tends to disappear. We have here a
group of forces which has achieved a revolution, a revolution in the
relationship of the individual European to the European State, and of
the States to one another.
The socialising and communist tendencies set up by measures of
industrial mobilisation for the purposes of the War, have been carried
forward in another sphere by the economic terms of the Treaty of
Versailles. These latter, if even partly carried into effect, will mean
in very large degree the compulsory socialisation, even communisation,
of the enemy States. Not only the country's foreign trade, but much of
its internal industry must be taken out of the hands of private traders
or manufacturers. The provisions of the Treaty assuredly help to destroy
the process upon which the old economic order in Europe rested.
Let the reader ask himself what is likely to be the influence upon the
institution of private property and private commerce of a Treaty
world-wide in its operation, which will take a generation to carry out,
which may well be used as a precedent for future settlements between
States (settlements which may include very great politico-economic
changes in the position of Egypt, Ireland, and India), and of which the
chief economic provisions are as follows:--
'It deprives Germany of nearly the whole of her overseas marine. It
banishes German sovereignty and economic influence from all her
overseas possessions, and sequestrates the private property of
Germans in those places, in Alsace-Lorraine, and in all countries
within Allied jurisdiction. It puts at the disposal of the Allies
all German financial rights and interests, both in the countries of
her former Allies and in the States and territories which have been
formed out of them. It gives the Reparations Commission power to
put its finger on any great business or property in Germany and to
demand its surrender. Outside her own frontiers Germany can be
stripped of everything she possesses, and inside them, until an
impossible indemnity has been paid to the last farthing, she can
truly call nothing her own.
'The Treaty inflicts on an Empire built up on coal and iron the
loss of about one-third cf her coal supplies, with such a heavy
drain on the scanty remainder as to leave her with an annual supply
of only 60 million tons, as against the pre-war production of over
190 million tons, and the loss of over three-quarters of her iron
ore. It deprives her of all effective control over her own system
of transport; it takes the river system of Germany out of German
hands, so that on every International Committee dealing with German
waters, Germans are placed in a clear minority. It is as though the
Powers of Central Europe were placed in a majority on the Thames
Conservancy or the Port of London Authority. Finally, it forces
Germany for a period of years to concede "most favoured nation"
treatment to the Allies, while she receives no such reciprocal
favour in return.'
This wholesale confiscation of private property[23] is to take place
without the Allies affording any compensation to the individuals
expropriated, and the proceeds will be employed, first, to meet private
debts due to Allied nationals from any German nationals, and, second, to
meet claims due from Austrian, Hungarian, Bulgarian, or Turkish
nationals. Any balance may either be returned by the liquidating power
direct to Germany, or retained by them. If retained, the proceeds must
be transferred to the Reparations Commission for Germany's credit in
the Reparations account. Note, moreover, how the identification of a
citizen with his State is carried forward by the discrimination made
against Germans in overseas trade. Heretofore there were whole spheres
of international trade and industrial activity in which the individual's
nationality mattered very little. It was a point in favour of individual
effort, and, incidentally, of international peace. Under the Treaty,
whereas the property of Allied nationals within German jurisdiction
reverts to Allied ownership on the conclusion of peace, the property of
Germans within Allied jurisdiction is to be retained and liquidated as
described above, with the result that the whole of German property over
a large part of the world can be expropriated, and the large properties
now within the custody of Public Trustees and similar officials in the
Allied countries may be retained permanently. In the second place, such
German assets are chargeable, not only with the liabilities of Germans,
but also, if they run to it, with 'payment of the amounts due in respect
of claims by the nationals of such Allied or Associated Power with
regard to their property, rights, and interests in the territory of
other Enemy Powers,' as, for example, Turkey, Bulgaria, and Austria.
This is a remarkable provision, which is naturally non-reciprocal. In
the third place, any final balance due to Germany on private account
need not be paid over, but can be held against the various liabilities
of the German Government.[24] The effective operation of these articles
is guaranteed by the delivery of deeds, titles, and information.
It will be noted how completely the Treaty returns to the Tribal
conception of a collective responsibility, and how it wipes away the
distinction heretofore made in International Law, between the civilian
citizen and the belligerent Government. An Austrian who has lived and
worked in England or China or Egypt all his life, and is married to an
English woman and has children who do not speak a word of German, who is
no more responsible for the invasion of Belgium than an Icelander or a
Chinaman, finds that the savings of his lifetime left here in the faith
of British security, are confiscated under the Treaty in order to
satisfy the claims of France or Japan. And, be it noted, whenever
attention is directed to what the defenders of the Treaty like to call
its 'sternness' (as when it deprives Englishborn women and their
children of their property) we are invited to repress our misgiving on
that score in order to contemplate the beauty of its 'justice,' and to
admire the inexorable accuracy with which reward and punishment are
distributed. It is the standing retort to critics of the Treaty: they
forget its 'justice.'[25]
How far this new tendency is likely to go towards a reassertion of the
false doctrine of the complete submergence of the individual in the
State, the erection of the 'God-State' which at the beginning we
declared to be the main moral cause of the War and set out to destroy,
will be discussed later. The point for the moment is that the
enforcement of this part of the Treaty, like other parts, will go to
swell communistic tendencies. It will be the business of the German
State to maintain the miners who are to deliver the coal under the
Treaty, the workers in the shipyards who are to deliver the yearly toll
of ships. The intricate and elaborate arrangements for 'searching
Germany's pockets' for the purpose of the indemnity mean the very
strictest Governmental control of private trade in Germany, in many
spheres its virtual abolition. All must be done through the Government
in order that the conditions of the Treaty may be fulfilled. Foreign
trade will be no longer the individual enterprise of private citizens.
It will, by the order of the Allies, be a rigidly controlled
Governmental function, as President Wilson reminded us in the passage
quoted above.
To a lesser degree the same will be true of the countries receiving the
indemnity. Mr. Lloyd George promises that it will not be paid in cheap
goods, or in such a way as to damage home industries. But it must be
paid in some goods: ships, dyes, or (as some suggest) raw materials.
Their distribution to private industry, the price that these industries
shall pay, must be arranged by the receiving Government. This inevitably
means a prolongation of the State's intervention in the processes of
private trade and industry. Nor is it merely the disposal of the
indemnity in kind which will compel each Allied Government to continue
to intervene in the trade and industry of its citizens. The fact that
the Reparations Commission is, in effect, to allocate the amount of ore,
cotton, shipping, Germany is to get, to distribute the ships and coal
which she may deliver, means the establishment of something resembling
international rationing. The Governments will, in increasing degree,
determine the amount and direction of trade.
The more thoroughly we 'make Germany pay,' the more State-controlled do
we compel her (and only to a lesser extent ourselves) to become. We
should probably regard a standard of life in Germany very definitely
below that of the rest of Western Europe, as poetic justice. But it
would inevitably set up forces, both psychological and economic, that
make not only for State-control--either State Socialism or State
Capitalism--but for Communism.
Suppose we did our work so thoroughly that we took absolutely all
Germany could produce over and above what was necessary for the
maintenance of the physical efficiency of her population. That would
compel her to organise herself increasingly on the basis of equality of
income: no one, that is, going above the line of physical efficiency and
no one falling below it.
Thus, while British, French, and American anti-socialists are declaring
that the principle enunciated by the Russian Government, that all trade
must be through the Soviet, is one which will prove most mischievous in
its example, it is precisely that principle which increasingly, if the
Treaty is enforced, they will in fact impose upon a great country,
highly organised, of great bureaucratic efficiency, far more likely by
its training and character to make the principle a success.
This tendency may be in the right direction or the wrong one. The point
is that no provision has been made to meet the condition which the
change creates. The old system permitted the world to work under
well-defined principles. The new regimen, because it has not provided
for the consequences of the changes it has provoked, condemns a great
part of Europe to economic paralysis which must end in bitter anarchic
struggles unless the crisis is anticipated by constructive
statesmanship.
Meantime the continued coercion of Germany will demand on the part of
the Western democracies a permanent maintenance of the machine of war,
and so a perpetuation of the tendency, in the way already described,
towards a militarised Nationalisation.
The resultant 'Socialism' will assuredly not be of the type that most
Socialists (among whom, incidentally, the present writer counts himself)
would welcome. But it will not necessarily be for that reason any less
fatal to the workable transnational individualism.
Moreover, military nationalisation presupposes international conflict,
if not perpetually recurrent war; presupposes, that is, first, an
inability to organise a stable international economy indispensable to a
full life for Europe's population; and, secondly, an increasing
destructiveness in warfare--self-destruction in terms of European
Society as a whole. 'Efficiency' in such a society would be efficiency
in suicide.