There is no need to apologize, then, for adding to groaning library shelves a book dealing with world economics, the purpose of which is to propose a plan that will pull together the scattered threads of world economic life. The time is so ripe for an examination of these problems that no man may consider himself informed who has not pondered them deeply, and no man may consider that he has done his duty as a member of this generation, who has not helped, at least in some degree, to unify the world's economic activities. Most particularly does this apply both to the statesmen and other public men who are striving to rejuvenate a dying order, and to the organizers and leaders of the new order that is even now pressing across the threshold of the western world.
II. THE ECONOMIC MUDDLE
World economic affairs are in a muddle. Famine has gripped Central Europe since 1918; unemployment is rife in Japan, Argentina, Britain, and the United States; business depression is felt in all of the principal industrial countries; producer and consumer alike find the world's economic machinery sadly out of gear.
There have been innumerable predictions of "better times ahead," but among those who are closely connected with industry, there is serious concern over the future of the present economic system, while a formidable array of students and investigators agree with Bass and Moulton that: "It is not at all beyond the bounds of possibility that all of continental Europe might in the course of the next twenty-five years, or even sooner, go the way that Russia has already gone. It would not necessarily be through the instrumentality of Bolshevism; it might easily go in the Austrian way." ("America and the Balance Sheet of Europe." New York. Ronald Press. 1921. p. 138-9.)
The cause for such gloomy utterances may be found in those superficial indications of chaos such as the breakdown of exchange and of international trade; the severe business depression; the waste and inefficiency of industry; the prevalence of unrest and sabotage, and the preparations for future wars.
Traditionally, the old institutions still exist and are cherished by those who believe that they will be rehabilitated and re-established. But as the months succeed one another and lengthen into years, without any evidence that "things will right themselves as soon as the war is over," it becomes increasingly apparent, even to the conservative that the situation is far from what they had promised themselves it would be. Europe's day-to-day experience between 1919 and 1922 has convinced millions that some disaster impends. For the most part, however, they fail to realize that the "disaster" is already upon them.
The disorganization of the world's financial structure, following on the drains of the war and the debauches and exactions of the peace, has been the object of much comment, with the emphasis laid on the aspects rather than on the essential characteristics of the breakdown.
One of the basic assumptions of the present economic order is that promises to pay must be redeemed at par. Failing in this redemption, the promisor is declared bankrupt, and beyond the pale of reputable business society.