Not Just Another Recession
Why the Global Economy May Never Be the Same
For those who were close to international events in the nineteen twenties and took a part in the errors and shortcomings of the next decade, there is a fascination in contrasting the two world wars with the experience of the present time. If we can learn from a generation ago and apply the lessons of that period to our present problems, we might render a useful service, for even then all was not folly.
The casualty lists of the First World War were cruel and horrifying. They were also much heavier in proportion for France and for the British Commonwealth than those of the longer Second World War. The few survivors of my own age soon grew used to hearing themselves referred to as the missing generation. The tag was true, and the extent of the holocaust created an intense determination to prevent its return. The claim that we were fighting "the war to end war" was sincerely accepted, to an extent which it may be difficult for a more sophisticated modern public to believe. The will to make a repetition of these experiences unrealizable, to create and impose a rule of law to halt or fend them off, was widely and even passionately shared. In my library I have a beautifully produced French annual review entitled L' Armoire de Citronnier. This little book was devoted to literature and the arts and had no direct concern with politics; yet, at the end, when I looked for the date, I found it expressed in these words: "In the year one of the League of Nations." In that sense we were all revolutionaries, intent on our new era.
The young League of Nations had need of all this faith and fervor to set against its besetting weakness, the lack of universality. In its beginnings a League of allied and associated powers, eight years had to pass after the armistice before Germany could be admitted to membership, as a sequel to the Locarno Treaties. Revolutionary Russia had to wait eight years more until Barthou found her a place; and meanwhile Japan's aggression in China had compelled her withdrawal. None of these events, however, was comparable in significance with the misfortune which dogged the League of Nations from the outset of its career: the decision of the United States not to ratify the Anglo-American guarantee to France or to take up membership in the League.
The Covenant, which was the League's charter, was well drafted and was on the whole a fair and balanced document. But its association, even though in part technical, with the terms of the peace settlement, gave Hitler a grievance he was always ready to exploit. The fact that Germany had entered the League, after the Locarno Treaty, on equal terms with the victorious allied powers, and enjoyed the same rights to a permanent seat on the Council, was the answer to Hitler's complaints. It remained true that, for the majority of powers around the Council table, it was an important obligation to uphold the peace settlement and, by so doing, to ensure that Germany was not in a position to become again a menace to Europe.
This conviction was strongly held in France, which had suffered most in life, less so in Britain and the countries of the Commonwealth, where, though the casualties had been very heavy, the sense of historic sequence was not so acute. There was a pardonable but not prudent willingness to shake hands and hope that all would be well. At times this was tinged with impatience against those in Europe whose suspicions were not so easily allayed. The further from the fire, the more tolerant the generosity, with the result that there were soon three circling rings of apprehension spaced from the German center. France, and her immediate allies of the Little Entente in the closest ring, Britain and the British Commonwealth in the next, the United States and some of the more remote powers, including those of South America, in the third.
The connection of the Covenant with the peace settlement was not, in my opinion, the misfortune it has often been dubbed. It expressed a reality: a revival of German military power was something to be feared and guarded against. Nor were the terms of the settlement so harsh, except for the reparation demands, which made little sense and had rapidly to be scaled down anyway. One consequence of the link between the Covenant and the peace settlement was to enjoin, among many members of the League of Nations, a convinced adherence to existing treaties and a respect for them. This was not so baleful an influence as well-meaning Anglo-Saxons often pretended.
There were many to argue that if the defeated nations played their part peaceably in upholding an international order, they were entitled to some relaxation of the terms of the engagements they had made. This might be so, but it was not the whole story. It remained healthy and desirable that if peace were to be upheld, international engagements must be respected. Observing our own experience in recent years, I would contend that a growing weakness of the United Nations has been its failure to uphold just this principle. There has been too much neutrality between respect for the pledged word and the ambitions of growing nationalism. There has been too much accommodation between the fire brigade and the fire.
The United Nations must be law-abiding and support those who wish to uphold the law, and not base its conduct solely on what seems at the time expedient, or excusable, because, as an afterthought, the international engagement itself may not seem everything that it should be. There can often be strong arguments for the revision of existing engagements by agreement. There is none for allowing them to be torn up. The League of Nations was certainly firmer on the side of the enforcement of international law so far as it could be defined. The United Nations has too often preferred to look the other way if the international cause were unpopular, with consequences which history has shown to be inevitable.
The widely held respect for written engagements which the Covenant of the League enjoined had consequences even among what we should today call neutral opinion. All other things being equal, there was an inclination to accept that the existing order deserved respect and even support. I do not think that it is an accident, or otherwise an influence for peace, that "neutral" opinion today is so blatantly ready to find pretexts for the misconduct of the Communist powers, as in the matter of Russia's sudden resumption of nuclear tests, and so ready to blame the United States because it could not accept to give the Soviets this stolen advantage indefinitely.
In another respect the League of Nations attempted, until the lawlessness of Hitler smashed this and much else besides, to uphold a certain standard. International property or the property of foreign nationals in a nation's midst was not something which could be seized with impunity and kept without apology. Material grab was not encouraged, even though part of the motive for this resistance to predatory appetites was that those who had the power also had the possessions. This state of affairs was, none the less, an influence for peace.
The actual machinery of the League of Nations was not complicated and it worked well; failings in universality and later in will were in no sense its fault. The regular quarterly meetings of the Council, almost always attended by the Foreign Secretaries of the principal powers, were a valuable practice. These men got to understand each other, knew when they would meet and could prepare with regularity the topics they had to discuss. They did so and, in the years of their authority which immediately succeeded Locarno, they created as serviceable a piece of diplomatic machinery as I have ever known. It had evident advantages over the present practice, when our Secretaries of State and Foreign Ministers have to span the world for meetings of NATO, CENTO and SEATO, while those who meet at the Security Council of the United Nations are usually not the men with chief responsibility for the conduct of their countries' foreign affairs. In part this is a consequence of the Soviet abuse of the veto which has crippled the effectiveness of the Security Council. The tendency to bypass its authority in favor of the Assembly, which cannot take its place or do its work, has only heightened confusion and multiplied weakness, until the United Nations has become an instrument ready to the hand of the prejudiced propagandist, but not always so pliant to the patient toiler for peace, through fortifying confidence in engagements given.
The principal lesson of the nineteen thirties, therefore, remains the significance which must be attached to respect for treaties and the dire consequences which result from denying them. U Thant tells us that history does not repeat itself. I do not think that there is much danger that the nations will heed past lessons too closefy. On the contrary, there seems a determination to learn from anything except experience, and there is certainly no limit to man's capacity for making the same mistakes over and over again.
The existence of nuclear power and the shattering destructive force its weapons can command have created dismay in many a land. Parades and calls for the abolition of such devastating engines of war are held in many countries, including my own, and it is certainly true that if nuclear war were once loosed, the world would be destroyed. Yet I do not believe that these well-meaning persons are aiming at the right objective.
The very horror of the destruction which must be caused by a nuclear war will give pause to even the most hardened dictator in his search for plunder. All our recent would-be conquerors, down to and including Hitler, embarked upon their careers of aggrandizement believing that, on balance, victory in arms would increase their power. None, except perhaps Hitler at his last gasp, would have deliberately brought destruction on all, himself included. Yet this we now know must be the consequence of nuclear war.
It is further possible to argue that the existence of the nuclear deterrent has been the most powerful influence for the maintenance of peace since the day of the Nazi surrender. Most of us are convinced that it was the knowledge of the preponderant power of the West in this arm which stayed Soviet ambitions in the immediate postwar phase. Certainly, there was no other barrier of force between Soviet arms and the Channel ports, and he would be a bold man or a careless one who accepts that any other influence could halt a Communist power in any plan it wished to execute. It is true that as familiarity with nuclear secrets spreads more widely among the nations, the risk of foolishness or accident which might trigger off the employment of these weapons must inevitably grow. Even so, the boldest and most thoughtless can be expected to hesitate before destruction which must include himself and his land.
Another danger seems to me more likely to spread widening confusion, with perilous consequences. This stems from the small part the United Nations has played in upholding international order. Foreign affairs are a continuing process; they cannot be divided up into chapters, closed and put comfortably away. There is surely a connection between the facility with which President Nasser could seize the Suez Canal by force and threaten Israel, and the impunity with which, less than a year later, Indonesia took possession of Dutch shipping with no presentable offer of compensation. This practice was perfected by Dr. Castro in Cuba, where the scale of the theft of American properties surpassed any attempted before. Others have followed in his wake again, until in Indonesia plans are pointedly prepared for the "liberation" of territories in Western New Guinea, which are administered by the Netherlands and occupied by native populations having no racial connection with the country which would now make them part of a new colonial empire. These depredations vary in character but unless they are checked their cumulative effect can be serious. Anarchy may be a greater danger even than the nuclear bomb.
Certain remedies can be employed. The International Bank wisely declines to give financial aid to any country which is still in default upon its payments to foreign creditors. It would be reasonable to include another condition, that the country to be helped must first have concluded arrangements to compensate foreign powers or foreign nationals for the seizure of their properties within its territories. This is not interference in the internal affairs of any land, any more than is the request that foreign debts should be paid. But such a practice would set a standard and check license which otherwise will certainly grow.
There is another reason for insisting that this maxim of conduct should be enforced. If the underdeveloped countries are to be helped economically on a scale and at a speed which bears relation to their needs, a formidable financial effort will be called for from those powers which have the necessary resources. It is not going to be easy, it is not even easy now, yet the effort must be made. If those who must try to afford it are to be encouraged to make it, they are entitled for their security to know that they or their nationals are not going to be singled out in any revolutionary process by the theft of their property; or at the least if they are, that these deeds will not be passed over when the country which has permitted them asks once again for international financial help. Neither good political relations nor economic plans for mutual help among the nations can develop except in an atmosphere of confidence in which respect for engagements holds first place.
The situation in Western New Guinea on which negotiations have been concluded between the United Nations, the United States, the Netherlands and Indonesia calls for comment. Some uneasy precedents have been set in this business. It is necessary to recall that the territory of New Guinea was expressly excluded from the Agreement of November 1949 when Indonesia became a state. The Agreement stipulated only that the "political status" of West New Guinea was to be determined through "further negotiations." Pending an outcome of such negotiations, there could have been no pretense that Indonesia had a legitimate claim to control Western New Guinea. It therefore seems strange that the Acting Secretary-General of the United Nations should refuse to send observers to report on events in New Guinea, following on Indonesian parachute landings and other inroads into the territory. The Netherlands Government made this request and it was not met, on the pretext that it would be a departure from neutrality to send observers unless both parties agreed that this should be done. This doctrine could mean that both the aggressor and the victim have to agree before the United Nations can send observers to the scene of an alleged aggression. That is not a tenable doctrine on any basis of international equity.
The Netherlands has now, under pressure from the United States and the United Nations, yielded its trusteeship in Western New Guinea, first to the United Nations and then to Indonesia. Only after seven years of Indonesian administration are the native inhabitants to be allowed to decide by plebiscite what their future should be. Yet a vote in such conditions can hardly carry confidence.
It has sometimes been urged in defense of such an arrangement that Soviet Russia is encouraging Indonesia to the early use of force against Western New Guinea, hoping thereby to embroil Indonesia with the West and fortify the appeal of the already formidable Communist Party in that country. This may well be the Soviet intention, yet the consequences for the free nations of sponsoring a solution which is not itself just can be grave; a little present ease may be gained, but probably at the expense of greater trouble thereafter. In the history of the last 30 years it has not proved wise to seek to assuage excessive appetites by unjust concession.
Since the Second World War there have been occasions when the temptation to yield to a dictator who is imposing unreasonable demands has had to be resisted. In Iran after Mosaddeq's accession to power and the seizure of the Anglo-Iranian oil fields, suggestions were made that this ruler should be given financial aid and comfort in the hope of staving off worse consequences. The supporters of this policy were influenced by the fear that the succession to Mosaddeq might be Communist rule, the same possibility as influences Western opinion toward Indonesia today. Yet fortunately the temptation was resisted in Iran, and Mosaddeq was not bolstered to an extent which would have enabled him to claim that he had triumphed through the methods he had employed. Even the risk of Communist rule as a consequence of this refusal was accepted. In the outcome, and after a delay which admittedly carried its dangers, a responsible government succeeded to Mosaddeq's. A settlement was reached with this government which has proved to the financial advantage of Iran. The Consortium Agreement of 1954 still operates and it is clear in retrospect that the firmness shown then did not give the victory to Communism, but resulted in a check to its growing power in that country. Iran gained by obtaining much larger sums through the joint development of the oil fields than Mosaddeq could ever have obtained by his methods; and the world witnessed a salutary lesson.
A contrast between conditions today and those of the 1920s, when the League of Nations was still in fair health, is to be found in the means for the close development of relations between the Western powers. Though the world has become smaller since then and the decisions correspondingly more urgent, our machinery is still ineffective. NATO, officially at least, deals only with Europe, while the problems we have to meet together are world-wide. This caused me a year ago to appeal for an international political general staff; and in the intervening period it has become even more necessary.
While nuclear weapons are a powerful deterrent, it will be foolish not to accept that the development of nuclear armament creates other difficulties which must increase in complexity with the passage of time. We should do well to begin considering some of them now and to try to bridge the strategic problems they are already creating. These will not become easier to solve by merely ignoring them. They should be discussed between the Western allies and particularly between the United States, Britain and France. Britain and the United States may still be the only two nuclear powers in the West. If so, this does not seem likely to last much longer. France appears determined to be among them. When I write France, I refer not only to General de Gaulle and the present French Government, but to their predecessors and quite possibly to their successors.
There is nothing to be gained by sulking over this situation; it is better to face the dilemmas. Should active help be given to the French Government at the stage of development which it has now reached, or is it to continue at very heavy cost to cover unaided the ground which the Americans and ourselves have already covered? It seems to me that the present situation, whereby they do this, is unreal and unreasonable. If, however, a solution is to be found, we are brought up at once against another question. If France is to be helped to obtain more quickly scientific knowledge which, in any event, she can gain in time and which the Communist world has already, we must reach agreement on the joint employment of our knowledge and production on behalf of the free world. Perhaps the final answer is a European atomic striking force, including American, British and French contributions. However that may be, a determination of our policies in this regard is becoming urgent.
Recently we have again heard the proposal, made this time, I think, by the United States, that Western defense needs stronger NATO conventional forces in Europe. If this is to be carried through, we must be clear about the purpose of the greater effort entailed. If it is merely to strengthen the defensive screen in Europe, personally I should doubt if its usefulness would justify this extra effort. If on the other hand it is intended to decrease the need for nuclear defense, I would regard that as a dangerous delusion. But here again is subject matter for close examination and decision by the highest authorities in the West, together. A related problem-what the joint policy should be on tactical weapons in the defense of the West-is also one which requires further probing and resolution. So, too, is the question whether means can be found of limiting the danger of destruction upon the civil population in the event of any outbreak of nuclear war. Frankly I am skeptical about this, and if there is no certainty in the matter, I would regard it as dangerous to hold illusions which could have as their consequence a lessening of the fear of nuclear war, because that fear is itself a deterrent and a factor for peace.
It would not be difficult to add other items to this list, which is already a formidable one. Enough has been written to show how necessary is some improvement in the methods of consultation between the Western powers at the levels where decisions can be taken. Better machinery by means of an international political general staff could, I believe, help toward this result. It is quite true that the heads of governments meet each other from time to time, but they do it two by two. Never are there meetings among three or four of them to attempt to straighten out differences which are today tiresome but could tomorrow become dangerous. The outlook would be healthier if we could prepare for such a meeting with a fair chance of success. It is true that the leading Communist powers are at cross-purposes too; but we should forbear from too much cheering on that account and concentrate on mending our own affairs. Certainly we must be under no illusions about the character, intentions and determination of the Communist leaders. The hopes of the lovers of peace in the last 40 years have not been frustrated only because the machinery of international coöperation has been inadequate. Deliberate evil intent has prevailed over all our efforts.
My lifetime has seen a series of ruthless onslaughts against the ideas and practices of freedom. Many nations could have been saved from servitude if their law-abiding partners had combined their resources early enough. The West now faces from without a threat carefully organized and centrally directed. It can meet it only by an idealist faith in its cause and with plans which are closely unified and integrated. In combined strength we are far more powerful than international Communism, but our survival, let alone victory, will depend upon ability to see the realities with unclouded eyes. The scope is there, and the opportunity.