The Downside of Imperial Collapse
When Empires or Great Powers Fall, Chaos and War Rise
THE OPEN DOOR AT HOME. By CHARLES A. BEARD. New York: Macmillan, 1934, 331 p.
GREAT history quite properly dwells in the high hills, and if amid the colorful mists which surround those hills there are any such things as green blotters they must be very dull and insignificant objects. But when the historian sends forth his book to exert influence in the lower contemporary world, and it arrives, for reading and for rest, upon one of these green blotters -- of the standard size and color supplied to all Government desks -- the proportions are reversed. Even opened wide it covers only a quarter of the green oblong; and the fresh and smooth surface of its hill-born generalizations are in striking contrast with the blotter's worn and detail-scarred face. What would become of the fresh and smooth surface if it should stay in the world of blotters? This is the thought that comes naturally to anyone living in that world.
I shall heed the prompting and restrictions of time and circumstance, choose the reflections which arise most naturally out of the last working day, and limit myself to one (and not the most effective) element of Professor Beard's analysis. I shall deal with its economic element and even more narrowly with the peacetime aspects of that, though I recognize that to do so ignores a vital part of his presentation.
A white moon peers over the White House lawn. The lights are still burning in the Executive Offices, and the ornamented and lighted dome of the Capitol can be seen at the other end of town. In the morning Congress will meet again and over the doorsteps of those seats of authority will hurry Government officials, reporters, state governors, businessmen, bankers, farm leaders, foreign diplomats and officers of the D.A.R. The reality resulting from the application of any conceptual policy, I remind myself, will be shaped by the views, the impulses, and the compromises of interest of that throng.
Professor Beard discovers, in a sense, that our country's history has been formed by the self-seeking activities and the private ambitions of its inhabitants, and he analyzes with stimulating vigor the arguments by which the main types of private interest have sought to prove that the expansion and defense of their activities was essential to and identical with the national interest. In this analysis there is a proneness to caricature by emphasis on extreme expressions and particular moments. His appraisal of the outcome puts into the foreground the uncertainties and dangers which have thereby been introduced into our national life. The dominant sense which the analysis gives to the reader is that the activities of private interest have served us badly; that in the search for profit they have led to confused, unguarded and wasteful expansion; that they have drawn us into purposeless conflict, have caused security to vanish, and have linked our destinies too closely with events outside our borders, fostering incidentally a constantly growing and voracious military establishment open to employment in support of purposes not in accord with a true appraisal of our national interest.
As for our relations with the outside world, he entertains no hope of mutually beneficial and peaceful commercial intercourse so long as private interests retain their present freedom and power to influence public policy. The world outside our borders presents itself as dominated by deep hostilities, distracted by a frantic economic competition which commands and brings into play all the forces of imperialism and war, and destined and condemned to disorder. Thus, the expansion of the processes of interchange with the outside world which would be brought about by private interests if left to themselves, cannot be in the main beneficial. Further, the hope of restoring any extensive and self-adjusting interchange between ourselves and the outside world is a dreamlike and dangerous abstraction conceived in ignorance of "the tough web of fact."
His argument and program calls for the subordination of all private interests to the requirements of a unified conception or plan of national interest, the rules, forms, and vital springs of which are to be supplied by technicians. This elevated conception of national interest is to suffer none of the blemishes of a statecraft shaped by the aggregations of private interests; it will not rely on the shuffling, grudging readjustment of those interests, under governmental guidance, to meet the crisis; it will be born of "clarified purpose, predetermined plan, and engineering rationality." Staccato and numbered paragraphs enunciate maxims of statecraft for the new commonwealth. Important among the maxims in the field of economic activity, if not first, is the plea for the achievement of maximum economic independence as an essential condition for establishing security and stability.
By the application of his maxims Professor Beard would call forth an economic order in which goods would be produced in kinds and quantities that would best satisfy the standard of life which his engineering technicians had computed were within the country's capacity; income would be so distributed and the monetary and banking systems so operated that the flow of funds offered in purchase of each type of goods would keep our people fully employed; American energy and capital would not become active in places and in enterprises where no main national interest was served; our participation in matters outside our borders would be limited to those in which the national interest was established beyond question and which might be defended, if necessary, with certain success; the size and organization of our defense forces would be determined solely by these aims. Such is the program towards which he aspires -- all to be achieved, as far as any indication is given in the book, without loss in our national energy, without substantial disturbance of individual freedom, and without sacrifice of political democracy.
Disregarding for the moment whether or not this appraisal of our past history seemed in reasonable balance, and whether or not the interpretation of its shaping forces seemed over-simplified, who would not be attracted by the vision of such a greatly improved national life? Who would not rush on to learn the means by which it is to be achieved? And who would not experience a sense of frustration and disappointment at the dispersed and disorderly elements of actual program which he would find, and when he discovered the remainder of the task passed over, with challenging appeal, to future boards of experts and to "engineering rationale"? (I remind the reader that I am discussing solely the economic phases of the presentation.)
For while those sections of the book which dissect and interpret the interplay of private interests and conceptions of interest in the American past have a compact and determined movement which successfully crushes detail, the later sections given over to program-making and to exhortation stumble, as it were, against detail, and then with brave uncertainty proceed upon their course. It is on the very core of the problem with which Professor Beard engages himself -- how, by what means, and in what form of state, private interests are best to be brought into the desired permanent harmony -- that the analysis most clearly falters and then stops. Since computations, charts, and graphs are not self-enacting, and since general maxims are not self-imposing, on what actual forces of interest and emotion does Professor Beard rely to put them into effect as drafted by experts and sung by poets? In failing to consider this adequately he fails to confront the question as to what results would arise in reality from the pursuit of his general conceptual bent and broadly sketched program. He escapes the difficulties that would beset those who had to execute his ideas in the world of blotters.
Some obvious reflections regarding the basis and general purpose of the proffered program intrude at this point. Would we, could we, even though convinced of the wisdom of this plea for maximum economic independence, refrain from actions which vitally affected the welfare of other countries, and which consequently would involve us in that type of difficulty from which escape is sought? Would we, for example, avoid all actions which affected the value and movements of silver and gold which might disturb the monetary or economic conditions of other countries? Would we impose strict restraint upon the expansion of our privately financed civil aviation companies because such expansion might bring changes in the status of other lands or in their domestic conditions? Would we cease to debate the actions of other countries and refrain from trying to influence their outcome? Would we remain indifferent to fluctuations in their individual fortunes? In short, will any feasible compression of our interests and activities serve the author's design of so restricting the interplay of activity between ourselves and the outside world that the maintenance of national stability and security would be more easily attained? Is not this picture of harmony in isolation as far from reality as the picture of harmony attained through ever-extending intercourse, which he so effectively destroys?
Again, what support can be drawn from events in the contemporary outside world for the author's first premise that economic security and stability can be achieved in this country by subordinating and subjecting to the most thoroughgoing governmental control the intercourse of private interests with the outside world? Comparisons, in fact, between the main import of his economic proposals and various contemporary developments support the opposite conclusion, though the meaning of all such comparisons is greatly blurred by differences in national circumstance. The basis of management of international economic and financial relations which is established in Russia resembles in many respects that which is now proposed. Has it produced stability and security in Russia and fostered a settled state of tranquillity between Russia and the outside world? Germany, partly voluntarily and partly by forced adjustment, has been pushing forward with a program of maximum national economic independence and a directed reorganization of economic forces within the nation in accordance with a heightened conception of national interest. Have stability and security been introduced into its economic life? Bulgaria, compelled to live much more largely to itself than previously, is not reported to be stable or thriving on a national income of $35.00 per capita. Great Britain, Canada, Australia, Sweden, Norway, Argentina, and others whose economic welfare still remains most closely linked by comparatively unrestrained private trading with the peoples of the outside world seem, however, to be struggling back to economic order and stability.
The diversity of contemporary experience strongly indicates that Professor Beard's analysis of the relationship between international economic intercourse and national condition is one-sided. It gives too much weight to some of the characteristics and consequences of this intercourse and too little to the rest.
International trade, whether conducted by private interest or by governmental agencies, is often a genuine disturbing force and a source of irritation. To the extent that it is highly competitive, fostered or supported too intensively by governmental power, or violently inflated and shrunk as part of a course of boom and collapse, it brings instability and international friction, which it is the duty of government to foresee, guard against, and mitigate. It may be hoped that Professor Beard's demonstration of the importance of these aspects of international trade activity will find its mark upon public and political opinion, so that commercial policy can be framed on lines that minimize them. For those to whom escape into the haze of a general concept of nationally isolated economic transformation seems an inadequate and unsatisfactory disposal of the difficulties, the task remains one of determined effort to have an instructed people support a policy which avoids demonstrable abuses. Must we despair with Professor Beard that such instruction and balance is beyond us?
It is no less essential, however, to appraise correctly the beneficial effects of international trade, and to seek for an expansion of that trade along beneficial lines, instead of further restriction. For this trade has contributed and still contributes to the improvement of economic welfare in many countries, including our own; it often supplies a material interest for keeping the peace and for subordinating more emotional national impulses; it enables people to overcome the natural deficiencies of their own territorial boundaries, and hence to some extent lessens the risks of wars undertaken to conquer new territories (though the restrictions now imposed on international trade make it far less of a reconciling force than it might be).
How to minimize one set of consequences and increase the other to the maximum is, to repeat, the central problem of policy. The question is whether the general bent of the program which Professor Beard puts forward would successfully achieve the results he seeks; or whether a commercial policy based on the assumption that trade with the outside world is a disturbing, destructive traffic, to be borne only to the limits imposed by necessity, would not produce exactly the opposite result. Interests and emotions, as the author himself vividly shows, have a way of turning general conceptions to their own account. Those interests and emotions which have shown themselves most responsive in the past to ideas of economic isolation customarily have in view ends different from the controlled and morally elevated abstention toward which Professor Beard's thought runs.
I pass from these general reflections to a few selected samples of the detailed way in which Professor Beard expounds his program. In doing so I know that the basic soundness of his general thesis cannot be tested in this way, but such a sampling may indicate at least whether we are dealing merely with a general idea or prepossession composed in recoil from the abuses of the past, or whether we are being presented with a balanced program fitted for adaptation by a vigorous and progressive government to tomorrow's need.
Were some Foreign Trade Authority created and empowered to act at once upon the detailed suggestions presented in this book, the first group to beg for further guidance would be the technical staff entrusted with the task of determining the volume and kinds of imports to be admitted into this country in order to fulfill the standard of life resulting from the experts' calculations of the possible. This technical staff would have to find its way among the diversity of indications thrown out as possible guides. The most precise thing that they would find is a list of seven types of imports, of which I name but four:
1. Products which cannot be produced in the United States owing to the absence of suitable ores within its territorial boundaries or to climatic limitations.
2. Products which cannot be produced in the United States in sufficient quantities.
3. Products which can be produced in the United States, but not efficiently.
4. Commodities almost identical with American commodities but offered in special varieties of tastes.
The technicians might well be excused for being confused and for concluding either that Professor Beard was not conscious of the extent to which we had already closed our frontiers; or that he visualized a wholly different production system within the United States than now exists; or that he thought that by achieving a change in society we would be able to combine a greater volume of international trade with greater economic independence. I will not venture to interpret.
Certainly the volume of imports that would qualify under these headings would exceed by much the total that we now admit. In all probability the technicians would have to be instructed to regard this venture into detail as merely an incidental exercise. At some points the book recognizes that the pursuit of a policy of maximum national economic independence might mean a lowering of the American standard of life. The labor of the technicians would not leave this as a vague possibility -- at least until such time as we should have succeeded in achieving in an orderly way wholesale transfers of our people into new occupations.
Professor Beard states that the primary basis for determining the international trade in which the United States should engage should be our import needs; and in the programatic detail furnished for the guidance of the Foreign Trade Authority the volume of our exports is to be determined primarily if not solely by the volume of exports necessary to pay for desired imports. In this recognition of the fact that the chief gain from international trade derived by any country whose economic system is in balance lies in securing goods at less cost than they could be produced at home, the argument follows those of John Stuart Mill and of the classical economists (though dissenting from the further conclusion that a widespread international trade should therefore be encouraged). This acceptance of the analysis of the economists, and rejection of the view that sales of American goods in foreign markets should be expanded without reference to our own willingness to receive foreign goods and should be augmented by all the resources of our Treasury and forwarded by all branches of the national power, is a sound basis of guidance for our policy.
Still it may be ventured that the F.T.A. (for by this time the organization would certainly be known by its initials) would have to take serious account of the persistent claims of our present surplus-producing industries. True, these surpluses are not immutable; true, it is wise to refuse to distort national policy gravely in order to dispose of them; true, and vital, the Government should continue the attempt to foresee and take into account such maladjustments as we may face through the reduction of trading opportunity in foreign markets and to facilitate the necessary shifts of population and of work.
But even when today's Government has undertaken all that it can hope satisfactorily to achieve in this direction, the welfare of very large numbers of our people will remain wrapped up with the fate of those industries that must produce largely for foreign markets. These sections of our population are not restricted to those engaged in the work of direct production for foreign purchasers. There are also, and no less ready to throw their political weight into the scales, manifold interlinking interests whose place in our economic life has been based on our traffic with the outside world. I have in mind, for example, the workers and investors in the trunk line railways, the stevedores who handle cargoes, the workers on wharves and switch lines and trucks, and the holders of properties in our numerous port cities. In consideration of the size and diversity of these interests, it is to be expected that our commercial policy, no matter by what agency conducted, will not be determined solely according to a calculation of the imports which we wish, but in part also on the basis of the immediate need for export trade to maintain present employment.
No change in the method of conducting our foreign trade relations will reduce the present significance of this question. How it would manifest itself, were trade taken out of the hands of private interests and entrusted to some all-powerful governmental Authority, is indicated by an episode of recent date. Newspaper readers will remember that circles particularly interested in income from cotton production urged that American industrial exports should be banned or restricted, and that foreign purchasing power should be reserved primarily for those who had cotton for sale. A governmental Authority that took upon itself the task of determining in detail exactly what our trade interchange with the rest of the world ought to be, would, I suspect, find the principles which might serve Professor Beard's aims quickly superseded by those that served the diversity of existing American interests. It would be apt to find that it had transferred to its own desk much of the underlying conflict of interests which now works itself out in the everyday operations of the marketplace.
Those whose present occupations are connected with our export trade would inevitably advocate that any program for restricting that trade should not proceed faster than new ways of living were created, rather than that they should be displaced now in anticipation of future satisfactory adjustments. They might even be expected to hold the view that the most satisfactory means of adjustment would be a lessening of those restrictions which are now imposed upon our international trade, and that this would be easier to achieve than the other alternative types of adjustment, and would bring advantage not only to them but to the whole nation. Furthermore, that judgment may be held by those who feel just as deeply as does Professor Beard the stupidity of our committing ourselves to a program of reckless, one-sided, competitive expansion throughout the world supported by all the forces of national power and diplomacy, and without exposing our national destiny to grave risks of unmanageable disturbance from the outside.
In the making of policy, due account should be taken of the abuses and frictions which competition in international trade have created and the disturbing adjustments which they have forced. We should be on our guard against them with the utmost determination. But they should not crowd out of the field of judgment the immense international trade that moves smoothly and advantageously, on the basis of scores of commercial agreements, and that links world interests together in a peaceful way. The main effort and wish of governments is to increase that trade and compose such differences and disturbances as arise. It is true that national policies are often forced out of the path of true advantage by the pressure of particular private interests. But so long as trade remains primarily a private transaction there at least does not have to be an identification between each transaction and the power urge of the nation. If that trade is brought completely under the wing of the state, the identity is established. The operations of the trading state might escape somewhat the imprint of special interests within its borders; but they certainly would receive instead a deeper imprint from the play of power politics.
One more sample of detail and I am through (tempting though it is to try to trace some of the elaborate administrative ramifications that would grow out of the proposed program). Professor Beard remarks incidentally that if our international trade relations were handled as he suggests, "newer methods" might be available to collect the inter-governmental debts now owed to the United States. Three of the suggested newer methods are particularly puzzling.
1. The debts, it is mentioned, might be employed for the development of raw material supplies in foreign countries. Would the Foreign Trade Authority undertake to acquire sugar plantations in Cuba, tungsten and antimony mines in China, rubber estates in Oceania? Would Government ownership of such distant properties be free from the complications that similar past ventures of private interests have produced?
2. Part of the debt payments, it is suggested, might be utilized in the scheme for the establishment of a stable international monetary system separate from the national monetary system. Does this mean that American opinion would be satisfied to have part of the amount due this Government turned over to the Bank for International Settlements on the condition that the American Treasury should have no relations with that institution?
3. Part of the proceeds, it is further suggested, might be received in this country in the form of imports for distribution among our needy unemployed. Most useful for this purpose would be such commodities as flour, beef, textiles, shoes. Is it expected that Congress will authorize the importation, or does the suggestion mean to assume a wholly reorganized economic society in which the question of competition from abroad will have a wholly different aspect from that which it has at present?
I draw forth such minor details of Professor Beard's exposition to indicate the view that some of the promises, flickering here and there in his pages, regarding immediate solutions for various international economic questions which now torment American life must be taken to be only advance promises of a future state, not possibilities open to men now in office -- advance promises, by the way, colored by precisely the same touching hope that men of one country may be able to sustain reasonable intercourse with men of other countries which elsewhere in the volume is dismissed so decidedly.
It may be thought by some who have read the book that all this querying about detail, this demonstration of ambiguities and complexities, these hints of unexpected difficulties and consequences, arise from a misunderstanding of the true nature of the author's effort. It may be said that the book was designed to be "future-regarding," to change the content of all future papers, and to modify the nature of all the wills and interests that express themselves therein; in short, that the author was out to shape future time, place and circumstance, and not to deal with the question of what existing time, place and circumstance would make of his general conception were it immediately applied.
Maybe so. But what is novel in the book is not the general aspirations to which it gives expression -- those have long been widely shared -- but rather the actual bent of policy and program therein put forward as a means of fulfilling them. The fact that Professor Beard shares those aspirations only increases the duty which we have of examining with the utmost care the actual measures outlined as a means of satisfying them. How else know whether in practice the pursuit of the policy which he advocates might or might not annul the very basic aspirations which he sets out to serve? It is with actual circumstances, proposed ways and means, laws and measures, attempts and consequences, that economists and office holders must reckon, and not alone with aspirations. Hence the warrant for this questioning.
To avoid or curtail the mistakes of the past is important. The Government should foster only that international trade which can be peacefully conducted and kept in balance without too great a strain. Its support should take the form of voluntary agreements based on a mutual advantage which other countries recognize. In the case of materials vital for successful national defense, the Government should assure that we shall be self-sufficient under all circumstances that might arise. Export of essential materials present in our territories in limited and exhaustible degree might wisely be made the subject of governmental concern. Foreign debtors should be called upon to make only that reasonably determined effort that can be expected of any party to a voluntary loan transaction -- and to do this in recognition of the honorable obligation they have contracted and the advantages they have obtained from our financial help. Many difficult situations in this latter field are being slowly adjusted, or lie open for future adjustment without any thought to the possible employment of armed force. American enterprise should be accorded protection abroad solely in accordance with an appraisal of national interest. Such protection should remain within the bounds of customary peaceful international usage; the fate of the enterprises in question must rest primarily upon recognition by other peoples that they serve their own development. The total outward expansion of American capital must not again recklessly assume such dimensions as will make the discharge of it a critical problem in national adjustment. The acquisition of distant territories on the wings of expansionist impulses must be avoided.
On these and other points in a sound international economic program I think that agreement can be won today within our country, and made into the controlling precepts of national policy. But Professor Beard would have us go far beyond such rules. He would have us retreat into a much more restricted and supervised type of economic nationalism, which he would in turn make into a newer and better type of nationalism. I cannot judge of the results of his program were it to be put into practice in a successfully operating economic system totally different from our present one -- a system in which the place and position of private economic initiative and interest would be fundamentally changed or superseded. But there are compelling reasons to believe that, in the actual economic conditions of today, the pursuit of the policy which he advocates would produce not a newer and better type of nationalism but one given over even more to excitement and hostility, one more easily led in a direction contrary to his own intentions.