Read Ebook: The Fruits of Victory A Sequel to The Great Illusion by Angell Norman

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A book by the present author published some fifteen years ago has a chapter entitled 'The Indemnity Futility.' In the first edition the main emphasis of the chapter was thrown on this suggestion: on the morrow of a great war the victor would be in no temper to see the foreign trade of his beaten enemy expand by leaps and bounds, yet by no other means than by an immense foreign trade could a nation pay an indemnity commensurate with the vast expenditure of modern war. The idea that it would be paid in 'money,' which by some economic witchcraft should not involve the export of goods, was declared to be a gross and ignorant fallacy. The traders of the victorious nation would have to face a greatly sharpened competition from the beaten nation; or the victor would have to go without any very considerable indemnity. The chapter takes the ground that an indemnity is not in terms of theoretical economics an impossibility: it merely indicates the indispensable condition of securing it--the revival of the enemy's economic strength--and suggests that this would present for the victorious nation, not only a practical difficulty of internal politics but a grave political difficulty arising out of the theory upon which defence by preponderant isolated national power is based. A country possessing the economic strength to pay a vast indemnity is of potential military strength. And this is a risk your nationalists will not accept.

Even friendly Free Trade critics shook their heads at this and implied that the argument was a reversion to Protectionist illusions for the purpose of making a case. That misunderstanding seemed so general that in subsequent editions of the book this particular passage was deleted.

It is not necessary now to labour the point, in view of all that has happened in Paris. The dilemma suggested fifteen years ago is precisely the dilemma which confronted the makers of the Peace Treaty; it is, indeed, precisely the dilemma which confronts us to-day.

It applies not only to the Indemnity, Reparations, but to our entire policy, to larger aspects of our relations with the enemy. Hence the paralysis which results from the two mutually exclusive aims of the Treaty of Versailles: the desire on the one hand to reduce the enemy's strength by checking his economic vitality--and on the other to restore the general productivity of Europe, to which the economic life of the enemy is indispensable.

France found herself, at the end of the War, in a desperate financial position and in dire need of all the help which could come from the enemy towards the restoration of her devastated districts. She presented demands for reparation running to vast, unprecedented sums. So be it. Germany then was to be permitted to return to active and productive work, to be permitted to have the iron and the other raw materials necessary for the production of the agricultural machinery, the building material and other sorts of goods France needed. Not the least in the world! Germany was to produce this great mass of wealth, but her factories were to remain closed, her rolling stock was to be taken from her, she was to have neither food nor raw materials. This is not some malicious travesty of the attitude which prevailed at the time that the Treaty was made. It was, and to a large extent still is, the position taken by many French publicists as well as by some in England. Mr. Vanderlip, the American banker, describes in his book the attitude which he found in Paris during the Conference in these words: 'The French burn to milk the cow but insist first that its throat must be cut.'

Despite the lessons of the year which followed the signing of the Treaty, one may doubt whether even now the nature of wealth and 'money' has come home to the Chauvinists of the Entente countries. The demand that we should at one and the same time forbid Germany to sell so much as a pen-knife in the markets of the world and yet compel her to pay us a tribute which could only be paid by virtue of a foreign trade greater than any which she has been able to maintain in the past--these mutually exclusive demands are still made in our own Parliament and Press.

How powerfully the Nationalist fears operate to obscure the plain alternatives is revealed in a letter of M. Andr? Tardieu, written more than eighteen months after the Armistice.

M. Tardieu, who was M. Clemenceau's political lieutenant in the framing of the Treaty, and one of the principal inspirers of the French policy, writing in July, 1920, long after the condition of Europe and the Continent's economic dependence on Germany had become visible, 'warns' us of the 'danger' that Germany may recover unless the Treaty is applied in all its rigour! He says:--

We get here, as at every turn and twist of our policy, not any recognition of interdependence, but a complete repudiation of that idea, and an assumption, instead, of a conflict of interest. If the children of Vienna or Berlin are to be fed, then it is assumed that it must be at the expense of the children of Paris and London. The wealth of the world is conceived as a fixed quantity, unaffected by any process of co-operation between the peoples sharing the world. The idea is, of course, an utter fallacy. French or Belgian children will have more, not less, if we take measures to avoid European conditions in which the children of Vienna are left to die. If, during the winter of 1919-1920, French children died from sickness due to lack of fuel, it was because the German coal was not delivered, and the German coal was not delivered because, among other things, of general disorganization of transport, of lack of rolling stock, of underfeeding of the miners, of collapse of the currency, political unrest, uncertainty of the future.

It is one of the contradictions of the whole situation that France herself gives intermittent recognition to the fact of this interdependence. When, at Spa, it became evident that coal simply could not be delivered in the quantities demanded unless Germany had some means of buying imported food, France consented to what was in fact a loan to Germany . One is prompted to ask what those who, before the War so scornfully treated the present writer for throwing doubts upon the feasibility of a post-war indemnity, would have said had he predicted that on the morrow of victory, the victor, instead of collecting a vast indemnity would from the simplest motives of self-protection, out of his own direly depleted store of capital, be advancing money to the vanquished.

The experience of France in the attempt to exact coal by the use of military pressure throws a good deal of light upon what is really annexed when a victor takes over territory containing, say, coal; as also upon the question of getting the coal when it has been annexed. 'If we need coal,' wrote a Paris journalist plaintively during the Spa Conference, 'why in heaven's name don't we go and take it.' The implication being that it could be 'taken' without payment, for nothing. But even if France were to occupy the Ruhr and to administer the mines, the plant would have to be put in order, rolling stock provided, railroads restored, and, as France has already learned, miners fed and clothed and housed. But that costs money--to be paid as part of the cost of the coal. If Germany is compelled to provide those things--mining machinery, rolling stock, rails, miners' houses and clothing and food--we are confronted with pretty much the same dilemma as we encounter in compelling the payment of an indemnity. A Germany that can buy foreign food is a Germany of restored credit; a Germany that can furnish rolling stock, rails, mining machinery, clothing and housing for miners, is a Germany restored to general economic health--and potentially powerful. That Germany France fears to create. And even though we resort to a military occupation, using forced labour militarily controlled, we are faced by the need of all the things that must still enter in the getting of the coal, from miners' food and houses to plant and steel rails. Their cost must be charged against the coal obtained. And the amount of coal obtained in return for a given outlay will depend very largely, as we know in England to our cost, upon the willingness of the miner himself. Even the measure of resistance provoked in British miners by disputes about workers' control and Nationalisation, has meant a great falling off in output. But at least they are working for their own countrymen. What would be their output if they felt they were working for an enemy, and that every ton they mined might merely result in increasing the ultimate demands which that enemy would make upon their country? Should we get even eighty per cent, of the pre-war output or anything like it? Yet that diminished output would have to stand the cost of all the permanent charges aforesaid. Would the cost of the coal to France, under some scheme of forced labour, be in the end less than if she were to buy it in the ordinary commercial way from German mines, as she did before the War? This latter method would almost certainly be in economic terms more advantageous. Where is the economic advantage of the military method? This, of course, is only the re-discovery of the old truth that forced or slave labour is more costly than paid labour.

The ultimate explanation of the higher cost of slave labour is the ultimate explanation of the difficulty of using political power for economic ends, of basing our economic security upon military predominance. Here is France, with her old enemy helpless and prostrate. She needs his work for reparations, for indemnities, for coal. To perform that work the prostrate enemy must get upon his feet. If he does, France fears that he will knock her down. From that fear arise contradictory policies, self-stultifying courses. If she overcomes her fear sufficiently to allow the enemy to produce a certain amount of wealth for her, it is extremely likely that more than the amount of that wealth will have to be spent in protecting herself against the danger of the enemy's recovered vitality. Even when wars were less expensive than they are, indemnities were soon absorbed in the increase of armament necessitated by the Treaties which exacted the indemnities.

Again, this is a very ancient story. The victor on the Egyptian vase has his captured enemy on the end of a rope. We say that one is free, the other bond. But as Spencer has shown us, both are bond. The victor is tied to the vanquished: if he should let go the prisoner would escape. The victor spends his time seeing that the prisoner does not escape; the prisoner his time and energy trying to escape. The combined efforts in consequence are not turned to the production of wealth; they are 'cancelled out' by being turned one against another. Both may come near to starvation in that condition if much labour is needed to produce food. Only if they strike a bargain and co-operate will they be in the position each to turn his energy to the best economic account.

But though the story is ancient, men have not yet read it. These pages are an attempt to show why it has not been read.

Let us summarise the conclusions so far reached, namely:--

That predominant political and military power is important to exact wealth is shown by the inability of the Allies to turn their power to really profitable account; notably by the failure of France to alleviate her financial distress by adequate reparations--even adequate quantities of coal--from Germany; and by the failure of the Allied statesmen as a whole, wielding a concentration of power greater perhaps than any known in history to arrest an economic disintegration, which is not only the cause of famine and vast suffering, but is a menace to Allied interest, particularly to the economic security of Britain.

The causes of this impotence are both mechanical and moral. If another is to render active service in the production of wealth for us--particularly services of any technical complexity in industry, finance, commerce--he must have strength for that activity, knowledge, and the instruments. But all those things can be turned against us as means of resistance to our coercion. To the degree to which we make him strong for our service we make him strong for resistance to our will. As resistance increases we are compelled to use an increasing proportion of what we obtain from him in protecting ourselves against him. Energies cancel each other, indemnities must be used in preparation for the next war. Only voluntary co-operation can save this waste and create an effective combination for the production of wealth that can be utilised for the preservation of life.

The problem is not merely one of foreign politics or international relationship. The passions which obscure the real nature of the process by which men live are present in the industrial struggle also, and--especially in the case of communities situated as is the British--make of the national and international order one problem.

It is here suggested that:--

Into the processes which maintain life within the nation an increasing measure of consent and acquiescence by all parties must enter: physical coercion becomes increasingly impotent to ensure them. The problem of declining production by miners, cannot be solved by increasing the army or police. The dictatorship of the proletariat fails before the problem of exacting big crops by the coercion of the peasant or countryman. It would fail still more disastrously before the problem of obtaining food or raw materials from foreigners in the absence of a money of stable value.

One of the most suggestive facts of the post-war situation is that European civilization almost breaks down before one of the simplest of its mechanical problems: that of 'moving some stones from where they are not needed to the places where they are needed,' in other words before the problem of mining and distributing coal. Millions of children have died in agony in France during this last year or two because there was no coal to transport the food, to warm the buildings. Coal is the first need of our massed populations. Its absence means collapse of everything--of transport, of the getting of food to the towns, of furnishing the machinery and fertilisers by which food can be produced in sufficient quantity. It is warmth, it is clothing, it is light, it is the daily newspaper, it is water, it is communication. All our elaboration of knowledge and science fails in the presence of this problem of 'taking some stones from one heap and putting them on another.' The coal famine is a microcosm of the world's present failure.

But if all those things--and spiritual things also are involved because the absence of material well-being means widespread moral evils--depend upon coal, the getting of the coal itself is dependent upon them. We have touched upon the importance of the one element of sheer goodwill on the part of the miners as a factor in the production of coal; upon the hopelessness of making good its absence by physical coercion. But we have also seen that just as the attempted use of coercion in the international field, though ineffective to exact necessary service or exchange, can and does produce paralysis of the indispensable processes, so the 'power' which the position of the miner gives him is a power of paralysis only.

A later chapter shows that the instinct of industrial groups to solve their difficulties by simple coercion, the sheer assertion of power, is very closely related to the psychology of nationalism, so disruptive in the international field. Bolshevism, in the sense of belief in the effectiveness of coercion, represents the transfer of jingoism to the industrial struggle. It involves the same fallacies. A mining strike can bring the industrial machine to a full stop; to set that machine to work for the feeding of the population--which involves the co-ordination of a vast number of industries, the purchase of food and raw material from foreigners, who will only surrender it in return for promises to pay which they believe will be fulfilled--means not only technical knowledge, it means also the presence of a certain predisposition to co-operation. This Balkanised Europe which cannot feed itself has all the technical knowledge that it ever had. But its natural units are dominated by a certain temper which make impossible the co-operations by which alone the knowledge can be applied to the available natural resources.

It is also suggestive that the virtual abandonment of the gold standard is playing much the same r?le in the struggle between the industrial that it is between the national groups. A union strikes for higher wages and is successful. The increase is granted--and is paid in paper money.

When wages were paid in gold an advance in wages, gained as the result of strike or agitation, represented, temporarily at least, a real victory for the workers. Prices might ultimately rise and wipe out the advantage, but with a gold currency price movements have nothing like the rapidity and range which is the case when unlimited paper money can be printed. An advance in wages paid in paper may mean nothing more than a mere readjustment of symbols. The advance, in other words, can be cancelled by 'a morning's work of the inflationist' as a currency expert has put it. The workers in these conditions can never know whether that which they are granted with the right hand of increased wages will not be taken away by the left hand of inflation.

In order to be certain that they are not simply tricked, the workers must be in a position to control the conditions which determine the value of currency. But again, that means the co-ordination of the most complex economic processes, processes which can only be ensured by bargaining with other groups and with foreign countries.

This problem would still present itself as acutely on the morrow of the establishment of a British Soviet Republic as it presents itself to-day. If the British Soviets could not buy food and raw materials in twenty different centres throughout the world they could not feed the people. We should be blockaded, not by ships, but by the worthlessness of our money. Russia, which needs only an infinitesimal proportion relatively of foreign imports has gold and the thing of absolutely universal need, food. We have no gold--only things which a world fast disintegrating into isolated peasantries is learning somehow to do without.

Before blaming the lack of 'social sense' on the part of striking miners or railwaymen let us recall the fact that the temper and attitude to life and the social difficulties which lie at the bottom of the Syndicalist philosophy have been deliberately cultivated by Government, Press, and Church, during five years for the purposes of war; and that the selected ruling order have shown the same limitation of vision in not one whit less degree.

Think what Versailles actually did and what it might have done.

Here when the Conference met, was a Europe on the edge of famine--some of it over the edge. Every country in the world, including the wealthiest and most powerful, like America, was faced with social maladjustment in one form or another. In America it was an inconvenience, but in the cities of a whole continent--in Russia, Poland, Germany, Austria--it was shortly to mean ill-health, hunger, misery, and agony to millions of children and their mothers. Terms of the study like 'the interruption of economic processes' were to be translated into such human terms as infantile cholera, tuberculosis, typhus, hunger-oedema. These, as events proved, were to undermine the social sanity of half a world.

The acutest statesmen that Europe can produce, endowed with the most autocratic power, proceed to grapple with the situation. In what way do they apply that power to the problem of production and distribution, of adding to the world's total stock of goods, which nearly every government in the world was in a few weeks to be proclaiming as humanity's first need, the first condition of reconstruction and regeneration?

The Treaty and the policy pursued since the Armistice towards Russia tell us plainly enough. Not only do the political arrangements of the Treaty, as we have seen, ignore the needs of maintaining the machinery of production in Europe but they positively discourage and in many cases are obviously framed to prevent, production over very large areas.

The Treaty, as some one has said, deprived Germany of both the means and the motive of production. No adequate provision was made for enabling the import of food and raw materials, without which Germany could not get to work on the scale demanded by the indemnity claims; and the motive for industry was undermined by leaving the indemnity claims indeterminate.

The victor's passion, as we have seen, blinded him to the indispensable condition of the very demands which he was making. Europe was unable temperamentally to reconcile itself to the conditions of that increased productivity, by which alone it was to be saved. It is this element in the situation--its domination, that is, by an uncalculating popular passion poured out lavishly in support of self-destructive policies--which prompts one to doubt whether these disruptive forces find their roots merely in the capitalist organization of society: still less whether they are due to the conscious machinations of a small group of capitalists. No considerable section of capitalism any where has any interest in the degree of paralysis that has been produced. Capitalism may have overreached itself by stimulating nationalist hostilities until they have got beyond control. Even so, it is the unseeing popular passion that furnishes the capitalist with his arm, and is the factor of greatest danger.

Examine for a moment the economic manifestation of international hostilities. There has just begun in the United States a clamorous campaign for the denunciation of the Panama Treaty which places British ships on an equality with American. American ships must be exempt from the tolls. 'Don't we own the Canal?' ask the leaders of this campaign. There is widespread response to it. But of the millions of Americans who will become perhaps passionately angry over that matter and extremely anti-British, how many have any shares in any ships that can possibly benefit by the denunciation of the Treaty? Not one in a thousand. It is not an economic motive operating at all.

Capitalism--the management of modern industry by a small economic autocracy of owners of private capital--has certainly a part in the conflicts that produce war. But that part does not arise from the direct interest that the capitalists of one nation as a whole have in the destruction of the trade or industry of another. Such a conclusion ignores the most elementary facts in the modern organisation of industry. And it is certainly not true to say that British capitalists, as a distinct group, were more disposed than the public as a whole to insist upon the Carthaginian features of the Treaty. Everything points rather to the exact contrary. Public opinion as reflected, for instance, by the December, 1918, election, was more ferociously anti-German than capitalists are likely to have been. It is certainly not too much to say that if the Treaty had been made by a group of British--or French--bankers, merchants, shipowners, insurance men, and industrialists, liberated from all fear of popular resentment, the economic life of Central Europe would not have been crushed as it has been.

Assuredly, such a gathering of capitalists would have included groups having direct interest in the destruction of German competition. But it would also have included others having an interest in the restoration of the German market and German credit, and one influence would in some measure have cancelled the other.

But in political nationalism as a force there are no such cross currents cancelling out the hostility of one nation to another. Economically, Britain is not one entity and Germany another. But as a sentimental concept, each may perfectly well be an entity; and in the imagination of John Citizen, in his political capacity, voting on the eve of the Peace Conference, Britain is a triumphant and heroic 'person,' while Germany is an evil and cruel 'person,' who must be punished, and whose pockets must be searched. John has neither the time nor has he felt the need, for a scientific attitude in politics. But when it is no longer a question of giving his vote, but of earning his income, of succeeding as a merchant or shipowner in an uncertain future, he will be thoroughly scientific. When it comes to carrying cargoes or selling cotton goods, he can face facts. And, in the past at least, he knows that he has not sold those materials to a wicked person called 'Germany,' but to a quite decent and human trader called Schmidt.

What I am suggesting here is that for an explanation of the passions which have given us the Treaty of Versailles we must look much more to rival nationalisms than to rival capitalisms; not to hatreds that are the outgrowth of a real conflict of interests, but to certain nationalist conceptions, 'myths,' as Sorel has it. To these conceptions economic hostilities may assuredly attach themselves. At the height of the war-hatred of things German, a shopkeeper who had the temerity to expose German post cards or prints for sale would have risked the sacking of his shop. The sackers would not have been persons engaged in the post card producing trade. Their motive would have been patriotic. If their feelings lasted over the war, they would vote against the admission of German post cards. They would not be moved by economic, still less by capitalistic motives. These motives do enter, as we shall see presently, into the problems raised by the present condition of Europe. But it is important to see at what point and in what way. The point for the moment--and it has immense practical importance--is that the Treaty of Versailles and its economic consequences should be attributed less to capitalism than to the pressure of a public opinion that had crystallised round nationalist conceptions.

Here, at the end of 1920, is the British Press still clamouring for the exclusion of German toys. Such an agitation presumably pleases the millions of readers. They are certainly not toymakers or sellers; they have no commercial interest in the matter save that 'their toys will cost them more' if the agitation succeeds. They are actuated by nationalist hostility.

If Germany is not to be allowed to sell even toys, there will be very few things indeed that she can sell. We are to go on with the policy of throttling Europe in order that a nation whose industrial activity is indispensable to Europe shall not become strong. We do not see, it is true, the relation between the economic revival of Europe and the industrial recuperation of Germany; we do not see it because we can be made to feel anger at the idea of German toys for British children so much more readily than we can be made to see the causes which deprive French children of warmth in their schoolrooms. European society seems to be in the position of an ill-disciplined child that cannot bring itself to swallow the medicine that would relieve it of its pain. The passions which have been cultivated in five years of war must be indulged, whatever the ultimate cost to ourselves. The judgment of such a society is swamped in those passions.

The restoration of much of Europe will involve many vast and complex problems of reconstruction. But here, in the alternatives presented by the payment of a German indemnity, for instance, is a very simple issue: if Germany is to pay, she must produce goods, that is, she must be economically restored; if we fear her economic restoration, then we cannot obtain the execution of the reparation clauses of the Treaty. But that simple issue one of the greatest figures of the Conference cannot face. He has not, eighteen months after the Treaty, emerged from the most elementary confusion concerning it. If the psychology of Nationalism renders so simple a problem insoluble, what will be its effect upon the problem of Europe as a whole?

Again, it may be that shipowners are behind the American agitation and toy manufacturers behind the British. A Coffin Trust might intrigue against measures to prevent a repetition of the influenza epidemic. But what should we say of the fitness for self-government of a people that should lend itself by millions to such an intrigue of Coffin-makers, showing as the result of its propaganda a fierce hostility to sanitation? We should conclude that it deserved to die. If Europe went to war as the result of the intrigues of a dozen capitalists, its civilisation is not worth saving; it cannot be saved, for as soon as the capitalists were removed, its inherent helplessness would place it at the mercy of some other form of exploitation.

Its only hope lies in a capacity for self-management, self-rule, which means self-control. But a few financial intriguers, we are told, have only to pronounce certain words, 'fatherland above all,' 'national honour,' put about a few stories of atrocities, clamour for revenge, for the millions to lose all self-control, to become completely blind as to where they are going, what they are doing, to lose all sense of the ultimate consequences of their acts.

The gravest fact in the history of the last ten years is not the fact of war; it is the temper of mind, the blindness of conduct on the part of the millions, which alone, ultimately, explains our policies. The suffering and cost of war may well be the best choice of evils, like the suffering and cost of surgery, or the burdens we assume for a clearly conceived moral end. But what we have seen in recent history is not a deliberate choice of ends with a consciousness of moral and material cost. We see a whole nation demanding fiercely in one breath certain things, and in the next just as angrily demanding other things which make compliance with the first impossible; a whole nation or a whole continent given over to an orgy of hate, retaliation, the indulgence of self-destructive passions. And this collapse of the human mind does but become the more appalling if we accept the explanation that 'wars are caused by capitalism' or 'Junkerthum'; if we believe that six Jew financiers sitting in a room can thus turn millions into something resembling madmen. No indictment of human reason could be more severe.

Obviously 'selfishness' is not operating so far as the mass is concerned, except of course in the sense that a yielding to the passion of hate is self-indulgence. Selfishness, in the sense of care for social security and well-being, might save the structure of European society. It would bring the famine to an end. But we have what a French writer has called a 'holy and unselfish hate.' Balkan peasants prefer to burn their wheat rather than send it to the famished city across the river. Popular English newspapers agitate against a German trade which is the only hope of necessitous Allies obtaining any considerable reparation from Germany. A society in which each member is more desirous of hurting his neighbour than of promoting his own welfare, is one in which the aggregate will to destruction is more powerful than the will to preservation.

The history of these last years shows with painful clarity that as between groups of men hostilities and hates are aroused very much more easily than any emotion of comradeship. And the hate is a hungrier and more persistent emotion than the comradeship. The much proclaimed fellowship of the Allies, 'cemented by the blood shed on the field,' vanished rapidly. But hate remained and found expression in the social struggle, in fierce repressions, in bickerings, fears, and rancours between those who yesterday fought side by side. Yet the price of survival is, as we have seen, an ever closer cohesion and social co-operation.

And while it is undoubtedly true that the 'hunger of hate'--the actual desire to have something to hate--may so warp our judgment as to make us see a conflict of interest where none exists, it is also true that a sense of conflict of vital interest is a great feeder of hate. And that sense of conflict may well become keener as the problem of man's struggle for sustenance on the earth becomes more acute, as his numbers increase and the pressure upon that sustenance becomes greater.

Once more, as millions of children are born at our very doors into a world that cannot feed them, condemned, if they live at all, to form a race that will be defective, stunted, unhealthy, abnormal, this question which Malthus very rightly taught our grandfathers to regard as the final and ultimate question of their Political Economy, comes dramatically into the foreground. How can the earth, which is limited, find food for an increase of population which is unlimited?

The haunting anxieties which lie behind the failure to find a conclusive answer to that question, probably affect political decisions and deepen hostilities and animosities even where the reason is ill-formulated or unconscious. Some of us, perhaps, fear to face the question lest we be confronted with morally terrifying alternatives. Let posterity decide its own problems. But such fears, and the motives prompted by them, do not disappear by our refusal to face them. Though hidden, they still live, and under various moral disguises influence our conduct.

Certainly the fears inspired by the Malthusian theory and the facts upon which it is based, have affected our attitude to war; affected the feeling of very many for whom war is not avowedly, as it is openly and avowedly to some of its students, 'the Struggle for Bread.'

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