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:—