The Great Unequalizer
The Pandemic Is Compounding Disparities in Income, Wealth, and Opportunity
JAPAN is, to put it bluntly, out on a limb. It is possible for the United States, acting in concert with the British nations, China, the Dutch Government of the East Indies, and the Soviet Government of Siberia, to saw off that limb; or, alternatively, to help Japan to descend from her precarious perch, on fair terms, with a minimum of injury and loss of face. We should be prepared to do the first and offer to do the second. Then let Japan choose.
It is becoming more and more apparent that Japan made a bad choice in joining the Axis. What can she look forward to as a partner of Germany? If the Nazis win in Europe, Japan's rôle will be at first that of a jackal, later that of a vassal and puppet. If Germany loses in Europe, Japan will have to make terms with the anti-Axis Powers, who will be in undisputed control of all the important communication routes and markets and sources of raw materials in the world, who will be strongly armed and flushed with victory, and who will have suffered such injury and devastation as to be in no mood for gentle dealing with any member of the Axis gang. In this situation, Japan's bargaining power would be nil. On the other hand, suppose the war in Europe develops into a long deadlock, with Germany holding the Continent, but with Britain unconquered and the Anglo-American fleets still ruling the wide oceans of the world. If Siberia were still outside the clutches of the Axis, and still resisting, no route would be open between Japan and Germany. This means there would be no outlet for Japanese silk or textiles or manufactures in Nazi-dominated Europe, and no means by which Japan could get from her Axis partner those outside supplies which are essential to her industrial existence. If, however, the Trans-Siberian Railway could be seized and operated by the Axis, thus keeping open a communications route between Germany and Japan, the terrific expense of 5,000 miles of land transport would eliminate almost all chance of gain from large-scale trade with Europe. In general, one may figure very roughly that rail transport costs nine times as much per ton mile as transport by sea. It would be physically possible to send Japan's typical export products -- cotton and rayon textiles, raw silk, machinery and parts, comestibles in tins and bottles, pottery, knitted goods, toys, etc. -- by the Trans-Siberian land route to Europe. But most of these items are also produced in Europe (except silk, which is a luxury consumed mostly in the United States), and they could hardly be sold to Nazi Germany unless offered at a very low laid-down price. After subtracting the freight, very little would be left for Japanese producers. It would be still less practicable for Japan to get her imported raw materials -- cotton, wool, wood pulp, minerals -- by the overland route; supposing they could be had at all, the higher transport costs would cut still further into the earnings of Japanese business and labor. No, Japan's economic future depends on her access by sea to distant overseas markets and sources of supply.
The one possible hope of gain which Japanese militarists can hold out to the Japanese people as a result of a policy of alignment with the Axis is based on the assumption of a German victory over both Russia and Britain. Let us examine this hypothesis more thoroughly. Like Italy before the fall of France, Japan is too weak to risk striking at any of her more powerful neighbors unless Germany appears meanwhile to have inflicted on them a mortal wound. Like Italy, Japan is nevertheless able to be of great nuisance value to Germany. She can immobilize, through threats and bluster, considerable land, sea and air forces which might otherwise be resisting the Nazis. But, again like Italy, in case of an Axis triumph Japan is likely to find herself, not in the rôle of equal partner, but in the subordinate relationship of servant to master. Already, according to some reports, the same process of infiltration by German technicians, advisers and propagandists through which Italy was gradually taken over has begun in Japan.
Of course, Japan is a long way from Germany. But consider the strategic situation on the hypothesis we are now exploring, that is, a complete Axis victory in Europe, with both Russia and Britain knocked out, or with Britain at least forced into a so-called negotiated peace which would spell the end of British power in Europe and remove the British fleet as an obstacle to Hitler's progress outside of Europe. Japan would then have a new neighbor in Siberia. This new neighbor, unlike the former Soviet Union, would not be restrained by the operation of any European "balance of power." Japan would find it totally impossible, by either military or economic measures, to make any serious threat against the centers of Hitler's power; while Hitler, regardless of Japanese objections, would be free to push his advanced bases far into Asia and to establish Luftwaffe outposts within bombing range of Japan's tinderbox cities. In the hands of experienced terrorists like the Nazis -- unrestrained, as the Soviet Union has been, by the presence of rival Powers in Europe -- this alone would be enough to force Japan to yield on every issue which Hitler might choose to regard as vital. Furthermore, having defeated England, there would be nothing further to restrain Hitler from turning the immense industrial power of the new German Empire in the direction of naval building. Hitler might at first permit Japan to take over former British and Dutch naval bases off southeastern Asia. But in the end he would force her to share them with him. The German Navy ensconced in southeast Asia would be a much more active threat to Japan than the British Navy has been, both because Hitler is an aggressive conqueror and because, in this sphere of activity, too, he would not be restrained by any European balance of power. With the Soviet Union and Britain out of the way, no Power in the world could even threaten to attack Germany in Europe or in European waters; and aided by an augmented naval building program, plus remnants of the Italian, French and British fleets, Hitler could then shift his forces at will over the sea routes which dominate the peripheries of Europe, Africa and Asia.
The Japanese must know about Nazi racial theories. What could they expect but contemptuous overlordship from a Germany thus endowed with unfettered power? Today Hitler wants Japan's help. He finds it tactically convenient to soft-pedal the doctrine of Aryan supremacy so far as the Japanese are concerned, just as he found it tactically convenient to forget for a time, during the period of pretended friendship with the Soviet Union, the doctrines of "Mein Kampf" regarding Bolshevism and the Ukraine. How long would it take Hitler to rediscover the racial inferiority of the Japanese after Japan had helped him to victory? Have Japanese readers of "Mein Kampf" forgotten passages like these (vol. I, chap. 11, "Nation and Race"): "If one were to divide mankind into three groups: culture-founders, culture-bearers, and culture-destroyers, then, as representative of the first kind, only the Aryan would come in question." How about the Japanese? Hitler answers: "But if, starting today, all further Aryan influence upon Japan should stop, . . . then a further development of Japan's present rise in science and technology could take place for a little while longer; but in the time of a few years the source would dry out, Japanese life would gain, but its culture would stiffen. . . ." The conclusion is that "one can perhaps call such a race [the Japanese] a 'culture-bearing' one but never a 'culture-creating' one." Now, from the pen of Hitler this is more than a mere slur. For the "culture-creating" qualities of the Aryan are what make him the rightful master and overlord, equipped to use and rule lesser breeds. The political significance of "culture-creating" qualities, as Hitler uses the term, appears in chapter 2 of volume II, where it is explained that "the highest purpose of the folkish State is the care for the preservation of those racial primal elements which, supplying culture, create the beauty and dignity of a higher humanity," . . . the progress of which, "lies exclusively in the existence of a race capable of culture." If Germany had possessed racial unity, says Hitler, "then the German Reich would today probably be the mistress of this globe. World history would have taken a different course," and we might have had "a peace, supported not by the palm branches of tearful pacifist professional female mourners, but founded by the victorious sword of a people of overlords which puts the world into the service of a higher culture." The Japanese reader must ask himself whether, if Hitler finally should turn this vision of peace into reality, mere "culture-bearers" can long be "overlords" even in their own country.
The rôle of Japan in an Axis-dominated world, then, would be far from an enviable one. On the other hand, the news of Russian resistance, of American production, of British fortitude, makes the odds increasingly strong that the end of this war will not see the Axis dominant in the world. The rôle of Japan as an exhausted and defeated Axis partner would not be an enviable one either. Japan's one chance -- and many intelligent Japanese must be reflecting along this line -- is to enter negotiations for a general settlement with the anti-Axis governments and to do it now while she still has some bargaining power. We, on our side, while prepared to meet any aggressive Japanese moves by force, should also be willing to offer Japan terms of settlement which take account of the legitimate aspirations of the Japanese people, particularly their need for assurance of economic opportunities abroad in the form of market outlets and raw material supplies.
A two-part program will be outlined below. It is suggested that the United States, acting with the British nations, China, the Netherlands East Indies, and the Soviet Union, should adopt such a program as its policy in the Pacific. The first part of the program consists of pressure on Japan. The second opens a gate for Japan to pass through peacefully -- a way out which is compatible both with the legitimate, long-run interests of the Japanese people and with the interests of other peoples in the Pacific.
The program of pressure on Japan would include: (1) continued and increased aid to China, in order to immobilize as many Japanese troops as possible in the Chinese theater of war; (2) close collaboration with the British and the Dutch in continuing to build up the already strong defenses of Manila, Singapore and the Netherlands East Indies, plus aid in strengthening the Soviet forces in Eastern Siberia in any way feasible; (3) economic blockade of Japan, or the threat of it, to be enforced by total non-intercourse between members of the coalition and Japan, by refusal of fuel and other facilities to Japanese ships anywhere in the world, and by inducements and pressures calculated to persuade all the other countries with which Japan might hope to trade (mainly the Latin-American countries) to follow similar policies.
The consequences for Japan of the economic isolation which such a coalition would be able to enforce without the moving of a single warship or plane into Japanese-controlled waters would be devastating. The effects would not be immediate, but they would be inexorable. Japan is peculiarly dependent upon uninterrupted economic relations with areas outside the range of her own naval power for the materials necessary to sustain her military efforts and to maintain the living standards and the employment of her people. This is the result of her geographical situation and the nature of her economic life.
The Japanese islands are very densely populated. The inhabitants are accustomed to a moderate standard of living, but a rising one. This has been brought up to its present level, despite a rapid increase in population, by the creation of a highly-specialized, modern, industrial system of production. Japanese productivity, and hence the capacity of Japan to provision its people and its military forces, is nowadays geared to machine tools, factories, railways, ocean shipping, and the like. This structure rests, in turn, upon raw materials which are not available in adequate quantities and varieties in Japan proper, or in the territories so far conquered by Japan. If Japan were subjected to a total economic blockade the area to which she would have access contains insignificant or very inadequate sources of petroleum, nickel, mercury, platinum, magnesite, mica and asbestos. Serious deficiencies would be felt in iron, copper, aluminum, manganese, lead, zinc, and the ferro-alloys such as tungsten and molybdenum. Moreover, Japanese facilities for turning out machine tools, specialized precision instruments, automotive products, aircraft and many other strategically important items are inadequate. There would be a greak lack of wool, fertilizers, lumber, wood pulp, and vegetable fibers. Furthermore, quite aside from the havoc wrought by shortages of such fundamental raw materials, Japanese industry and the Japanese political and social system would come under a terrific strain in adjusting themselves to the loss of overseas markets. These have provided income and employment for millions of Japanese producers of such articles as raw silk, textiles and miscellaneous small manufactures, as well as for many shipping workers.
Japan is known to have stocks of oil and other strategic materials on hand which would probably last for a good many months. She would find it possible, moreover, to make many adaptations and adjustments in view of the emergency. The fact remains that she is extremely vulnerable to pressures of an economic character, and that these can be applied against her at a long distance from her own sphere of political and military influence. This is the central reason why today one is able to characterize Japan's position as one of weakness.
Japan is also weak in other ways. Suppose her leaders decide to fight rather than yield. Suppose they set out to break the economic blockade by military force. Where can they attack? Japan has a large and modern navy. But the needs of a modern battle fleet for fuel and repairs restrict its field of operations to a limited radius from its own or friendly naval bases. This means that the Japanese Navy can exercise dominant power in its home waters. But it also means -- and this is a crucial point -- that unless and until new bases are conquered much farther afield, Japan is not in a position to launch any serious attack against the real centers of power of the coalition which would be arrayed against her. The best Japan can do is to attack their outposts in eastern or southeastern Asia. But while she was doing this she would continue to suffer from the attrition of the long-distance economic blockade. She would use up precious supplies. She would expose her navy and merchant marine to the risk of serious losses. And her own vital centers of power would be exposed to attack by long-range bombers, particularly if Siberia is available as a base for such attacks. The latter threat is not something the Japanese can ignore. Japanese industries and transportation lines are relatively concentrated, and great sections of Japanese cities -- almost literally "made of wood and paper" -- are highly inflammable. The distance from Vladivostok to Tokyo, Osaka and Yokohama is some six hundred miles -- roughly the same as from English airfields to Berlin.
There is a further point which Japanese military leaders must take into consideration. If they choose the desperate gamble and try to break the economic blockade by force there is no assurance either that the places attacked can actually be captured without crippling losses, or that once a new piece of territory has been captured they will actually be able to get out of it the resources that Japan needs, and to get them out quickly enough to stave off utter exhaustion at home. Meantime, there would be the problem of maintaining communication lines against flank attacks by the strong Powers with which Japan would be at war.
Siberia is defended by Soviet armies designed to operate independently of those in European Russia. The number of Soviet troops in the Far East and east of the Urals is reported to be higher than those which Japan can readily muster for service there so long as she is bogged down in China. Of course, the number of Soviet troops withdrawn to the European front is unknown; but the Trans-Siberian would not be able to transport a very large proportion of them at once. These troops in the Far Eastern provinces are well equipped and have given the Japanese cause to respect their prowess in previous encounters. Furthermore, the Soviet has a considerable force of planes in eastern Siberia, and its Siberian ports are reported to harbor from 40 to 75 submarines. A venture into Siberia would be costly. And even when Siberia had been conquered, it would not solve Japan's supply problem any more than occupied China has solved it. There may be rich resources in Siberia, but a period of years would be required to develop them.
Suppose Japan decides to break the blockade towards the south. The Philippines are now strongly enough defended so that Japan could seize them only by a major effort and at the risk of considerable losses. Once conquered, the Philippines would make an important contribution to the Japanese economy in iron ore and vegetable fibers and in a few other respects. But this would merely begin to ease the pressures of the economic blockade.
Farther south are the islands of the Netherlands East Indies, rich in raw materials. The islands themselves have a not inconsiderable defense force, including planes and small naval units. But the greatest bulwark of their defense is the heavily garrisoned naval base at Singapore. It would be risky for the Japanese to launch an attack in this area without having first reduced Hong Kong and the Philippines, so that the defenses of these places, too, help to protect the Netherlands Indies. Finally, if Japan did succeed in conquering the Netherlands Indies or important parts of them without having suffered a major disaster, her problems would still not be solved. Oil wells and refineries would probably be blown up, and it would take a considerable time to get production going again -- especially since much of the necessary technical equipment would not be available to Japan. Sea communications might be under constant harassing attack.
The foregoing analysis has been based on the assumption that the main naval units of the United States and Great Britain are occupied elsewhere, with the result that the forces with which Japan would have to contend would be composed mainly of airplanes, submarines, small warships, coast defense units, and land forces. But could the Japanese admirals be sure that after they had extended their lines of communication far to the south, and while they were engaged in the hazardous operation of invading a defended coast, it might not suddenly prove possible for the two greatest navies in the world to spare a major battle fleet for the area?
With our adoption of the firm front described earlier in this article should go a sensible and fair appreciation of Japan's needs and the offer of a plan of settlement which will give her a way out -- not just a "face-saving" way out, but a real and lasting solution of her basic problems. The Japanese people, crowded on a few islands though they are, can maintain and increase their living standards if they are able to engage in large-scale processing of raw materials. These, as already noted, must come in considerable part from abroad. And the Japanese must be able to sell abroad a substantial proportion of their produce, thus earning foreign exchange with which to pay for imports. Unless they can do this they cannot live -- at least, not at an acceptable standard of consumption. If conditions for the Japanese people are not "livable" there can be no long-run stability in the Pacific. This is a fact well recognized by American students of the Far East and by American officials. Upon this fact our offer to Japan should be based. Such an offer ought to lessen the likelihood that Japan will choose a contest of force. If Japan does choose force, our offer would provide a basis on which the war might more quickly be brought to an end in the very probable event that the Japanese people found their situation becoming progressively hopeless.
In proposing a plan of settlement we could afford to offer Japan very generous economic terms. In fact, under them the Japanese people would actually receive many of the economic benefits and opportunities which their militarists have vainly sought to produce by conquest. Further, under those terms Japan would be helped over the difficult economic transition involved for her in turning her war industries back to a peacetime basis. In return, the political terms which we might require Japan to accept would be such as to reverse present Japanese policy and to secure the Far East from the menace of aggression. We should insist on acceptance of a free and independent China as the basis of all future relations in the Far East. This would, of course, include the withdrawal of Japanese troops, the abandonment of all Japanese pressure for political domination over China, and the adoption instead of a policy of peaceful coöperation with that country. A condition of settlement would also be abandonment or demilitarization of all those advanced bases to the south from which the Japanese Navy is now able to threaten Singapore, the Philippine Islands, the Netherlands Indies and the vital communication lines to these places and Australia.
The economic terms of a general settlement might include the following points:
1. The economic development and industrialization of China. This should take place under Chinese auspices and control, but with international technical and financial aid, and Japan should receive definite assurance that large orders for materials and equipment would be placed with Japanese industries. The economic development of China must be the mainstay of any farsighted program for peace in the Far East. The Chinese themselves wish it. It strengthens China politically as a counterpoise to Japan and Russia, which is desirable from the point of view of the United States and for the sake of Far Eastern stability in general. By increasing Chinese productivity, it begins to make the old dream of an immense Chinese market come true. This, far from being harmful to the economic interests of the West, might be one important means of maintaining an adequate rate of economic expansion in the postwar world so that our own transition adjustments to peacetime can be managed with less unemployment and suffering. In the particular context of a Far Eastern settlement with Japan, the industrialization of China is a means of meeting Japan's needs for market outlets, particularly for her heavy-goods industries. Japan's industrial structure has been greatly distorted by the war. In particular, there has been an over-development, from the standpoint of peacetime needs, in industries capable of producing capital goods. To some extent, the transition to peacetime might be eased by an internal program of expansion in Japan and by raising the purchasing power of the Japanese masses. But it will be hard to avoid serious disorganization and unemployment when wartime demands end, and a large-scale development in China, providing large orders for Japanese industry, would help Japan climb down from the dangerous economic position to which her militarists have brought her. Preliminary studies indicate that there are many items of material and equipment which would be needed by Chinese industry and which Japan could supply. In addition, as increases in productivity raise the buying power of the Chinese people there will be an increasing market in China for Japanese consumer-goods industries. Even though the Chinese might soon meet their own needs for some of the simpler manufactures, the loss of Japanese sales in such lines would be more than offset by a great increase of miscellaneous purchases, once the Chinese masses were able to afford watches and toys and bicycles and handbags and radios. The same reasoning, by the way, holds good for the effects of Chinese industrialization upon the Far Eastern markets of Western industrial countries. The Chinese demand for foreign goods will change in character as industrialization proceeds; but the total will steadily increase.
2. Colonial markets. The removal of discriminations and quotas which affect the sale of Japanese goods in the Netherlands Indies, the Philippine Islands, and British colonial territories of southeastern Asia would represent an important concession to Japan by providing a needed outlet for Japan's light consumer-goods industries. It would also be a direct benefit to the inhabitants of these colonial areas. Japan is well fitted to produce the cheap, low-quality goods which the colonial peoples can afford. Indeed, Japanese industry was already making rapid advances in trade of this sort when, under the impact of the depression and to meet the wishes of manufacturing industries in the mother countries, the various colonial governments set up drastic bars. Now that British and American industries are absorbed in war production, and with shipping so scarce, it may be politically feasible to allow Japan greater latitude in developing these markets. For Japan to supply a very large percentage of the consumer-goods needed in the colonial areas of Asia would certainly be "natural" from the economic point of view. And if the political danger of Japanese aggression were removed other countries could make no reasonable objection. To a large extent, moreover, Japanese sales in the areas in question would tap new levels of demand, for the native peoples cannot afford the high-cost goods of the West but could buy low-cost Japanese goods if they were allowed to do so.
3. Raw material supplies. Japan could be given definite guarantees that in time of peace there would be no limit on her purchases of raw materials, and that pending the conclusion of the war against Hitler she would be allotted specified amounts of needed commodities. Raw material control boards, such as those regulating the important tin and rubber output of southeastern Asia, would be made subject to the supervision of some international agency, and Japan could be given representation on it.
4. Bi-lateral negotiations. Trade agreements and new commercial treaties could be negotiated between Japan and the United States and between Japan and other members of the coalition. The United States could also make a gesture to Japan which would have a political and psychological value out of all proportion to its economic effect. We could agree to place Japanese immigration under the same quota regulations as those applying to the nationals of most other countries. The effect would be to admit one or two hundred Japanese a year and to remove a totally unnecessary source of bitterness.
5. Economic opportunities in Latin America. Although the Latin-American countries control their own policies with respect to imports, Japan could be assured that if she should find it possible to develop a profitable trade in Latin America the United States and the other members of the coalition would regard that as entirely natural. At least, we would undertake not to use our political or economic influence to block such a development.
6. Purchase of the output of war industries. The United States and other members of the coalition might agree to purchase a large part of the output of certain Japanese war industries -- steel, chemicals, ships, munitions -- thus making it much easier for Japan to achieve the difficult economic transition from war to peace without producing disastrous unemployment. This suggestion is made on the assumption that the war against Germany is still going on when the Far Eastern settlement is made. Japan would thereby acquire an immediate and guaranteed market, not dependent on the speed with which industrialization proceeds in China, for just those Japanese industries which have been most overdeveloped. Not only would Japan be helped to deal with a difficult problem, but her productive facilities would become to some extent a supplementary "arsenal of democracy."
No one can say for sure whether an offer of settlement on some such basis as this would stand any chance of success. Political conditions in the Far East, as elsewhere, are in flux. One hears that many Japanese harbor doubts as to the wisdom of continuing on the present course. Certainly there are material reasons for the assertion that Japan made a bad bargain in joining the Axis. If Hitler loses in Europe, Japan as his partner will share in his defeat. If the war in Europe drags on into a stalemate, Japan as a member of the Axis is economically isolated by anti-Axis sea power. If Hitler wins a complete victory in Europe, then Japan, although nominally on the victorious side, will become a vassal of the Aryan overlords. These considerations make it seem plausible that a reasonable offer to negotiate, backed simultaneously by a firm preparedness to meet any threats of force with force, might even yet find a response in Japan. But suppose our offer were rejected out of hand, would it have been entirely futile? We should at least have made clear for the record that our policy is not based on unfriendliness toward the Japanese people, that we appreciate their real and legitimate needs for assured access to the means of livelihood, and that we are willing to take practical measures that will assist in meeting these needs, provided only that Japan, on her part, also recognizes the need and right of all nations to be free from alien domination and from the fear of attack.