Not Just Another Recession
Why the Global Economy May Never Be the Same
GOOD relations between Britain and America have become one of the essential conditions of world peace. A real split between us would, I believe, open the road to war, and possibly to the defeat of Western democracy. On the other hand, so long as America and Britain remain in close alliance and friendly partnership, the danger of a world war is relatively remote. This is surely one lesson that we have learnt, albeit at heavy cost, in these last 30 years.
But there is also no doubt that Anglo-American relations have recently become badly strained. It is worth trying to examine dispassionately the reasons for this, in the hope that out of such examination will come better understanding, and out of better understanding, better relations.
Much has recently been written about the underlying causes--political, social and economic--which give rise to friction generally between Britain and America. This was the main theme of Mr. Attlee's admirable article in Foreign Affairs some months ago.[i] I do not propose to repeat it. My object is a narrower one --to analyze some of the major issues of foreign policy which at present confront Britain and America, to see what has gone wrong in the treatment of them, and to make a few suggestions for the future.
First, however, two preliminary points. The new world situation has involved Britain and America in a much closer alliance than ever before. This brings with it problems which simply did not arise so long as relations between the two countries were more distant. So many more questions have to be discussed together; so many more decisions have to be taken jointly. The more you have to try and agree, the more it is possible to agree. It is as if having lived in different cities in the past, two families now had to share the same house.
Even during the war there was friction, but it was largely cloaked by the need for secrecy, and greatly diminished by the fact that we were fighting side by side in the emotional atmosphere of a hot war. Today the alliance has to be carried on in a cold war without that atmosphere. The strains are much greater.
Secondly we have to work this alliance under democratic conditions. Totalitarian Communism has a great advantage here. The Iron Curtain countries do not argue in public; with the exception of China, the others probably do not argue with Russia at all. The Kremlin decides. Between the democracies, on the other hand, not only are there continual arguments, but these are frequently carried on in public, with all the opportunities thereby presented for stimulating ill feeling and bad blood.
Demagogues in both America and Britain take full advantage of their freedom to exploit the mutually hostile feelings which exist in the two countries. They often do so, not with any malicious intentions, but for internal political reasons. When an American Congressman attacks Britain, or a left-wing Socialist denounces America, it is mostly because he thinks it will make him popular or win him votes or strengthen his position in his party. But speeches of this kind, eagerly picked up in the press of the two countries because they are "news," can do much harm to good relations between us, and sometimes, because public opinion is influential, directly affect foreign policy.
Another handicap is the restriction which democracy imposes upon its leaders in conducting their policy towards other nations. When Mr. Molotov goes to an international conference he can take whatever line he chooses without regard to public opinion. As Foreign Minister, so long as he carries with him the support of the effective dictator of Russia, he has nothing to fear. How different is the position on the democratic side! Even in Britain, where owing to the two-party system and party discipline the government can generally be sure of carrying its own view, it must all the time watch the reaction of the public and think in terms of a future general election.
The United States Government suffers much greater disabilities. Although an administration does not have to fear actual defeat or dismissal, it is often in a very weak position because of its peculiar relations with Congress. To an outsider, at least, this weakness seems to derive from the Constitution, according to which the administration is not the whole of the government but only its executive arm. Moreover, the legislature, which technically shares the responsibility of government, is an independent body, expecting to play an important part in the formulation of policy, and yet not tied to the government, like the British House of Commons, by strict party discipline. It is hard enough for a government which has full control of the legislature at home to conduct a foreign policy in coöperation with other countries. It becomes infinitely more difficult when there is no certainty at all that such control exists. Moreover, it is not always clear where the responsibility lies for presenting foreign policy. The members of Congress--especially the Senate--make declarations which are treated as having great weight, though they seem often to be made without even the information, much of it secret, upon which foreign policy has to be based. No wonder American policy sometimes seems to us in Europe a rather incoherent affair.
But these difficulties do not in themselves explain the changes in Anglo-American relations, and in particular the increasing friction which has recently occurred. I believe that this friction is due largely to basic misunderstandings about different points of view held by each country, of which the other was not aware until the march of events suddenly, as it were, tore the veil aside. It is best of all to have no disagreements, but if they exist--and some are inevitable--the harm they do is greatly diminished if they are fully recognized and known in advance. The real shock to friendly relations is when you find that your partner is not what you thought he was.
There is a danger of this kind even in connection with the most generally accepted principle of common foreign policy--the idea of "collective security;" and confusion on the subject is not confined to one country, but exists in both.
There are two distinct versions of this idea. There is first the idea of extending to the international scene the maintenance of law and order observed within any one state. The picture is that of a criminal nation which commits aggression being dealt with by all the other nations. In its simplest and most abstract form there is some kind of judicial procedure by an "impartial" body, as well as an "international police force."
Ideas of this kind still have a very wide appeal in Britain. When people speak of having faith in the United Nations to preserve peace, they are thinking on these lines. Unfortunately the ideas have little relevance to the real problems of today. In the United Nations, the existence of the right of veto means that the Security Council is hamstrung whenever one of the major Powers is itself an alleged aggressor, or sides with the alleged aggressor. Nor would the problem be solved merely by the abandonment of the veto. For this would not mean that everyone would obey a majority decision. Such a decision would have some standing if the majority were large enough, but it would not have that flavor of absolute righteousness which the earlier ideas of collective security through unanimous action really embodied.
Because of the obvious weaknesses and unrealities in these earlier ideas, a new conception has now emerged. On the whole, both Britain and America accept this new conception, but with some divergencies. The official British point of view about the United Nations is that it is now really a forum, that it should accordingly be universal, that the veto rule must be preserved, and that it cannot really be regarded as an effective instrument of collective security. Such security is to be found instead in regional defense pacts, which are provided for in the Charter, even if they are not exactly part of the United Nations machinery.
The United States, on the other hand, has more hope, I judge, of the United Nations as at least a potential instrument of collective security, though only on the basis of majority decisions. This preference for at least an "old-fashioned" look is no doubt because the American public opinion prefers it that way, though whether after Korea this is still the case remains to be seen. There are many in England who share this preference for collective security being carried out through the United Nations, but majority decisions do not altogether satisfy them. They have, rather, a lingering hope that somehow or other the original conception of collective security can be restored. They do not like the idea of group against group, alliance against alliance; they want to see at least some kind of judicial flavor, some element of impartiality, introduced into the proceedings. For this reason, they often favor bringing the so-called neutral states into the picture, since precisely because of their neutrality they bring back the idea of detached judgment in place of the clash of world forces.
At the same time most British people, realizing the difficulties, have come to accept the necessity of regional defensive pacts. The parties of the Left in Britain became quite accustomed to this from 1935 onwards, when, following the fiasco of Abyssinia, it became obvious that the League of Nations was useless as an instrument for maintaining peace. In the postwar period, the principle of NATO has been questioned by practically nobody in Britain except the negligible Communist Party; and there is a widespread understanding of the important part which the building up of the strength of the West has played in deterring Russia from further aggressive moves in Europe.
Indeed, it can be said with confidence that in the field of collective security NATO has been an outstanding success. The only serious source of friction associated with it has sprung from the handling of the German problem. It is worth pausing for a moment to consider the reasons.
This problem was bound to be exceptionally difficult because of its complexity, and because of the strong passions which it rouses. The extraordinary confusion of motives in almost all European countries for supporting or opposing German rearmament and E.D.C. has left too clear a field to emotionalism. But could not this have been anticipated?
Looking back, many of us feel that it was a great disadvantage that the problem of a revived Germany and her relationship to Western Europe should have first been approached via the issue of rearmament. The year 1950 was a dangerous one, and it was natural that the threat of Soviet aggression in Europe should lead to a demand for German rearmament. It is understandable that the American defense chiefs should have refused to commit American troops to Europe without a clear understanding that they were eventually going to be supported by German forces in the line. At the same time, one cannot but feel that too little understanding was shown in America of the positively traumatic significance which German rearmament had for millions of people in France and Britain. Had American leaders been aware of this they might not have pressed the military argument so far. As things have turned out, that argument does not look very impressive today. For, three and a half years later, there are no German forces in the line, the tension in Europe has diminished and the strength of the West has greatly increased. But because the original arguments for German rearmament appear so wholly discredited, the case for it now is correspondingly weakened; and by association of ideas, if not in strict logic, the proposal for E.D.C. itself is heavily undermined.
There would probably today be a far better chance for the acceptance of E.D.C. if the problem had arisen not because the United States took the initiative in forcing the other countries in NATO to accept German rearmament, but because Germany, already recovered from the war, took the initiative in requesting from the Allies her independence and freedom once again. There might then have been negotiated some such arrangement as is in fact envisaged in E.D.C. The rest of Europe would have known that the alternative was probably a German national army in the fairly near future. They might then have realized, as they do not today, that unless they were prepared to back Germany in a subordinate position indefinitely the choice must indeed become one of German freedom to have her own national army or her voluntary incorporation in some European system. It is possible, even if the French reject E.D.C., that a second chance to approach the problem in this way will emerge. If so, it is profoundly important that it should be taken, and that it should not be thrown away by any premature insistence by the United States that Germany should forthwith become a member of NATO.
After this brief comment on the specific problem of Germany, I return to the more general issues of collective security. What stands out is that, apart from NATO, it has hardly been applied at all. There is the sixteen-nation declaration about Korea; and there are the series of pacts made by the United States in the Western Pacific, including the ANZUS Pact. But no collective security arrangements have existed for the two most dangerous areas outside Europe: the Middle East and Southeast Asia. Only now, when at last there is a dawning realization of the implications of Communist domination extending southeast and southwest from Indo-China, have the Western Powers begun to consider seriously what might be done in Southeast Asia. In the Middle East the only progress made has been the Turkish-Pakistan Pact, which by military standards amounts to extremely little.
It is not difficult to see why there have been such delays in extending collective security to these parts of the world. In the first place, the peoples of the Middle East and of South Asia are neither linked as closely with each other or with the West as are the peoples of Western Europe. It is very much harder to persuade them to join together in an alliance of their own, and, for a variety of reasons, even more difficult to persuade some of them to be closely linked with the Western democracies.
Secondly, these may fairly be described as "colonial areas." They include specifically colonial territories, such as Malaya, Borneo and Indo-China; territories which until recently were colonies, such as Indonesia, India and Pakistan; and territories--in the Middle East especially--where the relationship between the country in question and one or more Western Powers is or was akin to the colonial relationship. The existence of this colonial-type relationship makes it harder to build collective security in an area, partly because in some cases the peoples in question are actively campaigning for their independence, partly because even when they have their independence they are suspicious of the previous colonial Power, and partly because there is some reluctance on the part of the present or previous colonial Powers to share their responsibilities and their influence with others. For all these reasons it was difficult for Britain to guarantee a French colony such as Indo-China, for example, while for a long time the French themselves showed no enthusiasm for other Powers coming upon the scene. In the Middle East, Great Britain proposed joint action, but only reluctantly, and after a good deal of opposition from her own diplomatic and military circles, who were not too pleased at the idea of America playing an active part in an area which had been for so long a sphere of British influence.
Special reference must be made to the problem of India. Although the grant of independence came just in time to make possible friendly relations between India and the United Kingdom, and with this the maintenance of important ties between the two countries, nevertheless the Indian Government--and the same is true of Pakistan and Ceylon--are opposed in principle to what they call "colonialism." Their friendship for Britain, and possibly their greater knowledge of the real problems, causes the criticisms to be somewhat muted in the case of Malaya, and to be concentrated all the more on other colonial Powers such as France and Holland.
This opposition to colonialism is combined in the case of India with a neutralist foreign policy. Having won her independence so recently, India takes a leaf out of America's book and would like to see a new Monroe Doctrine applied to the sub-continent. She does not wish to take sides in the cold war; she wishes to continue her economic development without having to carry the heavy burdens of defense. She feels that she can trust the vast mountain barriers and deserts which surround most of her frontiers to serve as an adequate protection, and she is inclined to take a much more optimistic view of the intentions of Communist China than do the Western Powers. For Britain, this constitutes a special problem. If the Commonwealth is to maintain its unity, Britain cannot easily carry out a policy in South Asia to which India is strongly opposed. On the other hand, this does not mean that India must have a veto on any kind of security arrangements which may be arrived at.
The United States itself was for long very cautious about accepting commitments on the mainland of Asia--other than in Korea. For example, Britain was excluded from the ANZUS Pact, not because of any objection on the part of Australia and New Zealand but because if Britain were a signatory the United States would automatically have been committed to the defense of Malaya, Hong Kong and any other British Colonies in the area covered. Two and a half years later, American policy has apparently swung right over towards full collective security, covering almost any part of the mainland of South and Southeast Asia. The fact that this change has been so recent, however, inevitably makes some of the other potential partners a little suspicious as to whether American opinion has really accepted it.
It is hardly surprising in the light of all this that when trouble develops in these areas, the alliance does not stand up to it well. As the Indo-China situation deteriorated, the Western allies found themselves in a position where nothing whatever had been planned in advance, where no commitments had been expected, where a policy of hope and drift had been almost deliberately pursued, and where accordingly the greatest scope for misunderstanding was allowed to exist. Precisely the same situation would almost certainly happen if the Communists managed to stir up trouble in the Middle East. For instance, if as at one point seemed only too likely, Persia had gradually come under Communist control, it is more than doubtful whether any one of the Allies would have acted in time to prevent the loss of the territory, with very grave consequences to the whole strategic situation in the Middle East and indeed to the future war potential of the West. On the other hand, had the countries as well as the governments concerned thought out these possibilities and faced up to them, then it is at least possible that sensible security arrangements might have been arrived at--though this would have been far more difficult in any case than the establishment of NATO.
There lies behind all this an even more basic problem which the democracies have not really yet faced. In the policy of containing Communist imperialist aggression, exactly what line or lines are the Western Powers prepared to hold, and how can they accept the obligation to do so in a manner which will be acceptable to public opinion in their countries? This fundamental issue comes out most clearly in the great debate which has been going on continuously in the United States for the past two years--though something of the same kind has also been happening in France and Britain. In all three countries, the Governments are under great pressure to try and find a policy which allows the people who elected them to have it both ways--to have their cake and eat it too.
There is a general desire to check Communist aggression. But there is also a crusade to reduce taxation, which in fact can only be done by cutting back the defense program. There is an even greater unwillingness to commit American troops to fighting anywhere outside Europe and the American continent. Are these things compatible?
In attempting to solve the problem Americans have recently brought forward two propositions. The first is that the Asians should fight their own battles, though with plenty of help from the West in munitions and equipment. Outside of Korea this idea has been received nowhere with any enthusiasm. Moreover, it offers only too much scope for Communist propaganda, since it can be represented as an American scheme to employ Asian mercenaries to fight their own battles against Communism. It is extremely doubtful whether, until anti-Communist feeling has developed much further than it has so far in Asia, such a policy is likely to succeed.
The second proposal, more recently put forward, is that of "massive retaliation," implying that if there is aggression then the United States will come in, but only by atomic air attack. This policy has even less chance of success than the first. It simply could not be carried out for geographical and physical reasons in some territories, of which Indo-China is an obvious example, unless what is meant is that there would be an out-and-out atomic war on the whole of China.
But this brings out even more clearly the second great objection to it, which is the fear that massive retaliation by the United States on China would produce a massive Russian and Chinese retaliation on all the allies of the United States and possibly on the United States itself. This fear, which of course has been enormously enhanced by the explosion of the hydrogen bomb, makes it quite impossible for the allies of the United States to accept the policy; and indeed it is extremely doubtful whether the American people themselves, when really faced with the alternative, would have seriously contemplated it. But the mere announcement of this new American policy, which has had to be so rapidly discarded, had very bad effects on America's relations with her allies. It certainly frightened them more than her enemies. A little more consultation would have avoided this.
If it has been difficult to organize collective security outside Europe, even greater difficulties have confronted the alliance in what may be described as "collective diplomacy"--i.e. negotiation by the Western democracies, acting as a group, with the Communist nations. The inherent complications which confront a number of nations, even when closely linked by defense pacts, in negotiating as a group with the monolithic totalitarian dictatorships, are greatly aggravated by certain basic differences in the American and Briton. For example, the American attitude to the Communist Powers is one of extreme hostility. There is in the United States a virtual anti-Communist crusade. Possibly the change from isolationism was acceptable to American public opinion only on this basis, in which case it may not be so easy to maintain it in more "normal" peacetime conditions.
Undoubtedly, however, the war in Korea played a great part in exciting public opinion. While the fighting continued, and heavy American casualties were occurring, it was natural to think of the Chinese Communists as the enemy and easy enough to extend this conception to the whole of the Soviet and her satellites. "Why," I was asked a year or two ago in the United States, "do you persist in trading with the enemy?" My reply that neither Britain nor the United States was officially at war with anybody, and certainly not with Russia, was received with a look of blank incomprehension. With this kind of background, any American Secretary of State is bound to approach a proposal to negotiate with the Communists extremely gingerly. He must at all costs avoid giving the impression to his American public that he is being soft or surrendering to the enemy. Moreover, there will be plenty of people in prominent positions who will do their best to stop him by banging doors and slamming windows even before the negotiations begin. In addition to all this, there also exists some suspicion of diplomacy as such, natural enough in a country with a long record of isolationism. The old traditional fear that the foreigners will be too clever, and that Uncle Sam will be done down by intrigue and deceit, still lingers on.
In Britain, on the other hand, the same anti-Communist feelings have never been so strong or so widespread. There is a cool recognition of the danger of Communist aggression; and at home both the Labor Party and the Trade Unions take a firm line to prevent Communist infiltration. There is an understanding that we are fighting Communism in Malaya; and there was very general approval for our participation in the Korean war. But, because of the relatively small number of British troops involved, Korea was never really looked on in Britain as a hot war. Perhaps it might have made for better Anglo-American relations if the British forces in Korea had been increased and American troops had taken over some of Britain's responsibilities in other parts of the world.
The difference in our attitude to China is well known. There are not a few who, while willing to condemn China for entering the war in North Korea, honestly feel that General MacArthur's advance to the Yalu River was as much a cause of this as the imminent defeat of the North Korean forces. Behind these lingering doubts about the significance of Chinese aggression, there is also the hope that China might be detached from Russia, or at least that there will be rivalries between China and Russia which it should be the business of the Western Powers to try to exploit.
There is, too, the conviction that however much we may disapprove of the Communist dictatorship, we should not get ourselves into the position of trying to impose democracy upon the world, that a war to do anything of this kind would in fact settle nothing, that however regrettable from some points of view it may seem, and particularly to those unfortunate people living behind the Iron Curtain, we just have to accept coexistence with the Communist Powers as a necessary part of our policy. With all this background, the British statesman, in order to reassure public opinion, has to think of showing not that he can be tough, but on the contrary that he really is trying to reach a settlement with the Communist Powers.
Our attitude to diplomacy is also rather different. We have had to practise it over the centuries. We know that it is necessary, and that it is a pretty delicate business. So there is a fairly widespread disposition to leave the Government with room to manœuvre, provided there is no fundamental disagreement on policy.
Finally, it seems to us obvious that negotiations are necessary, and that we cannot just stand pat and refuse to talk, not only for the reasons mentioned, but for two others. First, where actual fighting occurs or is very likely to break out, then unless we are prepared for a purely military solution, negotiation is a necessity; and we may have to reject the purely military solution either on the grounds that we have not got the power to win, or that even if we do win it will not solve anything. Secondly, we have to negotiate if the existing situation is seriously unstable and unacceptable to our friends. They need to be given confidence that we are trying our best to help them. That is why we cannot just refuse to negotiate on, for example, Germany or Austria or Trieste. We have to reassure our friends and we have to anticipate trouble.
With all these difficulties it may seem surprising, not that relations between America and Britain sometimes become strained, but that the alliance survives at all. Yet it would be a great mistake to be complacent. The chief credit for the strength of Anglo-American partnership goes to the Kremlin. If Soviet foreign policy became more subtle, better informed, more patient--and there are some signs of this now--it might very easily weaken that partnership to danger point. It is worth considering, therefore, what can be done to counter this. What are the lessons to be learnt from the experience of the past five years? I single out only two; but both are important.
First, there is an urgent need for both governments to do more thinking ahead, and to do it together. Even if this reveals difficulties, it is far better that they should be brought to the surface now than be allowed to emerge suddenly later on. At worst, familiarity with their existence will diminish the harm they do to good relations; and at best, discussion may lead to their disappearance. There should therefore be continual joint discussions on long-term policy. These discussions should be at first completely private. Otherwise the fear of being misunderstood by public opinion will be a completely inhibiting factor. They should be conducted through "the normal diplomatic channels" by trusted senior civil servants and ambassadors who can keep in touch with and reflect the views of their government. At a later stage they may call for "ministerial" talks; and, what is even more important, they may involve the preparation of public opinion for some important policy move. For in foreign policy particularly it is the duty of governments to lead, not abjectly to follow, the prejudices of the day.
What sort of subjects? It would be easy to make a long list. But four questions especially seem to me to call for urgent joint examination. First, what is to be the policy of the occupying Powers to Germany if France rejects the E.D.C.? It is well understood that this question cannot be discussed in public until France has made her decision, because of the effect it might have on that decision. But this should not prevent frank private conversations with a view to reaching some agreement. A failure to do this may lead to confusion, embarrassment and serious public disputes later on.
Secondly, is it really impossible to hammer out a joint policy for the Middle East? We all understand the difficulties, but we should also not forget the dangers.
Thirdly, assuming "coexistence," what is to be our policy toward Communist China? This is, of course, the most explosive subject. But that should mean not that it must be ignored, only that it must be handled with care. Under what conditions, for example, would the United States recognize Communist China? What is the long-term policy for Formosa? How do we envisage relations developing between Japan and China? What sort of relationship should we like to see between them?
My fourth is more general. If the policy of "containment" is accepted, just what lines are we really prepared to hold? And what arrangements are needed so as to ensure that we can hold them?
It would of course be foolish to expect that in such vitally important questions, which in turn lead on to others, clear-cut agreements can easily be reached. But the effort should be made nonetheless--and made sincerely. A few casual talks will not be enough.
My second conclusion really follows from the first. If discussions on long-term policy are to be fruitful, then those who take part in them must be able to speak with authority. This implies both that the administrations must have the necessary power, and also that there must be some continuity in foreign policy. Neither object is very easy to achieve under democratic conditions. In theory at least parliaments are supreme, and can reject what governments propose; and a new government may wish to escape from commitments entered into by its predecessor.
Nevertheless in Britain this is not really a major problem. Party discipline and the two-party system normally ensure that the government can carry the legislature with it. Parliament, to be sure, must be kept informed and given a chance to express its views; and those views must be taken into account by the government. But subject to this a British Government has a fair measure of authority in foreign affairs. As for continuity, there is a tradition that commitments entered into by previous governments must be accepted, though this does not mean that no changes in policy are possible. There is no "bipartism" arrangement, and the Opposition retains and will always retain its freedom. But in practice in postwar Britain there has been so far a large measure of agreement. The Conservative Government took over and carried on the policies of the Labor Government; and what they have done has met in the main with the approval of the Opposition, despite the fact that it has been done by Conservatives.
Of the situation in the United States I speak with diffidence. But to a foreigner the problem appears much more difficult. Earlier in this article I referred to its constitutional aspect, and especially to the relationship between the Administration and Congress. This certainly seems recently to have exercised a very hampering effect on the freedom of the President and Mr. Dulles to conduct foreign policy. One has the impression, too, that the McCarthy witch hunting has inhibited the members of the foreign service from expressing their minds freely on policy. It is not for an Englishman to tell Americans how to solve their own political problems. I can only say that from our point of view we should welcome a greater unity in the thought about United States foreign policy and in the presentation of it, and my impression is that until this is achieved, both as between the Administration and the legislature and as between the parties, the working out of a common policy between Britain and America will continue to be gravely handicapped.
[i] "Britain and America: Common Aims, Different Opinions," by Clement R. Attlee, Foreign Affairs, January 1954. I would also mention two other recent contributions--an article by Lester Markel in The New York Times of June 14, 1953, and a Daily Mirror pamphlet, "Anglo-American Partnership," just published in London.