The Fruits of Victory / A Sequel to The Great Illusion

by Norman Angell

Mr Lloyd George, speaking two years after the Armistice, and after prolonged and exhaustive debates on this problem, says:—

‘What I have put forward is an expression of the views of all the experts.... Every one wants gold, which Germany has not got, and they will not take German goods. Nations can only pay debts by gold, goods, services, or bills of exchange on nations which are its debtors.[128]

‘The real difficulty ... is due to the difficulty of securing payment outside the limits of Germany. Germany could pay—pay easily—inside her own boundary, but she could not export her forests, railways, or land across her own frontiers and make them over to the Allies. Take the railways, for example. Suppose the Allies took possession of them and doubled the charges; they would be paid in paper marks which would be valueless directly they crossed the frontier.

‘The only way Germany could pay was by way of exports—that is by difference between German imports and exports. If, however, German imports were too much restricted, the Germans would be unable to obtain food and raw materials necessary for their manufactures. Some of Germany’s principal markets—Russia and Central Europe—were no longer purchasers, and if she exported too much to the Allies, it meant the ruin of their industry and lack of employment for their people. Even in the case of neutrals it was only possible generally to increase German exports by depriving our traders of their markets.’[129]

There is not a line here that is not a paraphrase of the chapter in the early edition of The Great Illusion.

The following is the comment of Mr Maynard Keynes, ex-Advisor to the British Treasury, on the claims put forward after the Paris Conference of January 1921:—

‘It would be easy to point out how, if Germany could compass the vast export trade which the Paris proposals contemplate, it could only be by ousting some of the staple trades of Great Britain from the markets of the world. Exports of what commodities, we may ask, in addition to her present exports, is Germany going to find a market for in 1922—to look no farther ahead—which will enable her to make the payment of between £150,000,000 and £200,000,000 including the export proportion which will be due from her in that year? Germany’s five principal exports before the War were iron, steel, and machinery, coal and coke, woollen goods and cotton goods. Which of these trades does Paris think she is going to develop on a hitherto unprecedented scale? Or if not these, what others? And how is she going to finance the import of raw materials which, except in the case of coal and coke, are a prior necessity to manufacture, if the proceeds of the goods when made will not be available to repay the credits? I ask these questions in respect of the year 1922 because many people may erroneously believe that while the proposed settlement is necessarily of a problematic character for the later years—only time can show—it makes some sort of a start possible. These questions are serious and practical, and they deserve to be answered. If the Paris proposals are more than wind, they mean a vast re-organisation of the channels of international trade. If anything remotely like them is really intended to happen, the reactions on the trade and industry of this country are incalculable. It is an outrage that they should be dealt with by the methods of the poker party of which news comes from Paris.’[130]

If the expert economists failed to admit the validity of The Great Illusion argument fifteen years ago, the general public has barely a glimmering of it to-day. It is true that our miners realise that vast deliveries of coal for nothing by Germany disorganise our coal export trade. British shipbuilding has been disastrously affected by the Treaty clauses touching the surrender of German tonnage—so much so that the Government have now recommended the abandonment of these clauses, which were among the most stringent and popular in the whole Treaty. The French Government has flatly refused to accept German machinery to replace that destroyed by the German armies, while French labour refuses to allow German labour, in any quantity, to operate in the devastated regions. Thus coal, ships, machinery, manufactures, labour, as means of payment, have either already created great economic havoc or have been rejected because they might. Yet our papers continue to shout that ‘Germany can pay,’ implying that failure to do so is merely a matter of her will. Of course she can pay—if we let her. Payment means increasing German foreign trade. Suppose, then, we put the question ‘Can German Foreign Trade be increased?’ Obviously it can. It depends mainly on us. To put the question in its truer form shows that the problem is much more a matter of our will than of Germany’s. Incidentally, of course, German diplomacy has been as stupid as our own. If the German representatives had said, in effect: ‘It is common ground that we can pay only in commodities. If you will indicate the kind and quantity of goods we shall deliver, and will facilitate the import into Germany of, and the payment for, the necessary food and raw material, we will accept—on that condition—even your figures of reparation.’ The Allies, of course, could not have given the necessary undertaking, and the real nature of the problem would have stood revealed.[131]

The review of the situation of France given in the preceding pages will certainly be criticised on the ground that it gives altogether too great weight to the temporary embarrassment, and leaves out the advantages which future generations of Frenchmen will reap.

Now, whatever the future may have in store, it will certainly have for France the task of defending her conquests if she either withholds their product (particularly iron) from the peoples of Central Europe who need them, or if she makes of their possession a means of exacting a tribute which they feel to be burdensome and unjust. Again we are faced by the same dilemma; if Germany gets the iron, her population goes on expanding and her potential power of resistance goes on increasing. Thus France’s burden of defence would grow steadily greater, while her population remained constant or declined. This difficulty of French deficiency in human raw material is not a remote contingency; it is an actual difficulty of to-day, which France is trying to meet in part by the arming of the negro population of her African colonies, and in part by the device of satellite militarisms, as in Poland. But the precariousness of such methods is already apparent.