The Economic Organization of Peace
MONEY is the background of all modern wars, and the conviction grows steadily that peace will never be secured without very careful economic organiza- tion. The great series of religious wars were fought when the finances of nations were so little related that the strain upon any nation was not greatly felt, and even when it was felt was not traced to its cause. Bismarck is said to have made the semi-discovery as long ago as 1870, that in a world which had already become complicated a money tribute from a losing nation to a winning nation caused unexpected embarrassments. Mr. Norman Angell was the first to bring home to the general public the lesson that nowadays no nation can make money out of war. Shortly afterwards the Great War made this truth a commonplace. Nevertheless, politicians are still subject to the temptation of trying to win a new market by sonic inexpensive coup—by some act which they think is excep- tional and will not bring upon them the penalties of the general rule. And if the need of markets is still a provoca- tion to a warlike policy the possession of money is not less obviously the condition without which war cannot be undertaken. The nation which knows that it can afford to mobilize its forces is politically in an immensely strong tactical position as compared with the nation which cannot even afford to take up a posture of resistance.
The present Assembly of the League has before it two subjects which hear closely upon the problem of organizing the world economically in peaceful ways. One proposal is for guaranteeing to threatened nations the financial help without which they could not hope to " keep their end up " against a bully, and the other is for modifying the constant international provocation offered by tariffs.
It was the Finnish Government who first proposed at Geneva that States threatened or attacked by an aggressor should receive financial help from other members of the League. The Finnish representatives argued that a would-be aggressor might be decisively influenced by the knowledge that the power of defence of a threatened nation could be greatly increased at the will of the League. The Council of the League accepted the proposal and Sir Austen Chamberlain, though he did not pledge himself to details, was prominent in praising its principle.
Now that this proposal is once again a leading topic there is a tendency among Conservative newspapers to re- present it as a scatter-brained idea of the Labour Party. No doubt the scheme might be made distinctly dangerous by the inclusion of reckless obligations, but we agree with Sir Austen Chamberlain that the principle is sound in itself. Only prejudice trading upon ignorance could invite the conclusion that Unionists have a duty to save the country from a particularly dangerous project.
Let us state the arguments against the scheme as fairly as we can. It is said that as the money supplied by the League to a threatened Power would be contributed in the proportion in which the members now contribute to the support of the League, Great Britain would have to pay more than anybody else. It is said that Mr. Snow- den's success at The Hague would be stultified by this fresh burden. We might be lightheartedly giving away much more than Mr. Snowden gained for us. The pledge to contribute to any defensive war of any member of the League would indeed be an incalculable obligation. Further, it is said that the scheme so far from securing peace would actually encourage war by making it possible for a nation to be defiant, or to procrastinate, at the expense of Great Britain. Mr. Hendersonl—Who has approved of the scheme under certain conditions—is accused of having been duped by greedy, impecunious nations who induced him to swallow the bait, peculiarly attractive to a Socialist, of a sloppy internationalism.
It seems to us much more likely that a dangerous dispute would not be allowed to go too far if one of the parties to the dispute did not feel that it had unquestion- able power to enforce its will. Physical superiority on one side always tells against settlement. A sense of equality is an essential part of the atmosphere of peace. This may sound cynical, but it is true. No doubt the opponents of the Finnish scheme have discovered risks which in some sense may be acknowledged as risks, but on the balance of probabilities we think that a sense of equality between disputants - is a very much less risky condition than a sense of inequality. If this be so it would be well worth while for the members of the League to promise their contributions. By insuring themselves against war they would insure peace at a cheap rate, and very likely they would not have to pay anything at all. On the other hand, we could by no means approve of a form of insurance so unscientific that the idea of war would positively be cultivated as the readiest means of keeping the peace. The theory of an international organization of war as a necessary background to peace decided us against the Protocol, and we certainly do not want to see the spirit of the Protocol revived.
The Government must be dissuaded from the peril of even appearing to go too far. They should not forget that they are a minority Government, and that if the accusation that they are exposing their country to unnecessary dangers and burdens is made plausible or formidable they may suffer shipwreck. By trying to do too much they may be put in the position of being able to do nothing at all. Hence the need for caution is clear. They need not be afraid of the principle, but they may well be wary of the details.
As regards tariffs, the World Economic Conference gave perfectly explicit guidance. As we have been saying ever since the Armistice, the greatest need of Europe is to restock her depleted cupboards. Over and over again we have suggested that without prejudice to the fiscal policies of various nations it would be possible temporarily to throw down the tariff walls and consent to a reasonable if not absolute freedom of exchange till the cupboards were restocked. As Free Traders we thought that if tariff walls were removed for a few years there would be no general wish to set them up again.
Mr. William Graham's proposal that there should be a tariff holiday for two years, during which no nation would raise its existing tariffs, seems modest indeed. From our point of view it is too modest. To observe the status quo is quietly to consent to tariffs which are fan- tastically higher than our own. Sir Clive Morrison-Bell has pointed out that if the British tariff is represented by the figure 6 the barrier set up by Germany against imported goods is represented by the figure 15, and that of other countries by figures invariably higher than our own. For instance, Austria 16, Jugoslavia 25, Czecho- slovakia 21, Hungary 27, Spain 35, Russia 43. Fortun- ately, Mr. Graham took the further step of suggesting that the two years' holiday should be spent in making plans. We sincerely hope that all the countries of Europe will take this holiday and spend it profitably. M. Briand's idea of a United States of Europe is admirable in its implication of considering one another's needs, but there is endless mischief in the notion of Europe as an economic unit enjoying Free Trade for itself but set about by a ring-fence of tariffs which would bring it into habitual conflict with the rest of the world. The best way is a European industrial concentration by means of inter- national arrangements. Rationalization is bound to overflow all national borders. It urgently requires guiding. Coal, about which we have written this week, provides an obvious case in point.
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