LETTERS TO THE EDITOR
DIPLOMACY AND ECONOMICS
SK—Having read with the greatest interest both Sir Watford Selby's article and your leader in last week's Spectator, in which you have mentioned my name, perhaps I may be allowed to express my own views on the subject of the economic organisation of the Foreign Office.
The chief business of diplomacy is to prevent war. To do this, it must be in a position to detect the causes of war at an early stage and take such measures as may be necessary to remove them before political tension develops to a point when open conflict becomes inevitable. For some decades, economic and social developments have been gradually changing the character of the sub-soil on which the political superstructure of all industrial States rests. But diplomatists and politicians still continued to think and act in the political terms of the past. Lacking the necessary training, they were not in a position to diagnose the economic maladies from which the body politic of Europe was suffering. They could but deal, and that more often than not too late, with their political symptoms. In other words they could only deal with surface-factors as they had from time immemorial been accustomed to, leaving the root causes untouched. Indeed, it was the common practice for Foreign. Secretaries and diplomats of the old school to push aside any question that could be dubbed economic as lying outside their province.
The archives in every Foreign Office in the world abound in reports, written before 1914, on the dangers to peace from the growth of militarism, armaments and political rivalry, but it would be interesting to know whether any predicted that the course which German economic development was taking, especially internally, must in the end infallibly lead to war. It is easy enough to predict that war is coming when nations begin to arm, but it is then already too late. But it may well be asked, has not the British Government at least got economic advisers, commercial and financial experts attached to missions abroau, whose duty it is to furnish information on the economic developments of foreign countries? The answer is that these officers are not concerned with the prevention of war, which is the business of diplomatists. They serve primarily the needs of the Board of Trade, the Department of Overseas Trade and the Treasury, which are mainly interested in information concerning their own spheres of activity. The reports of these officers, therefore, are drawn up from a different angle. The Board of Trade may be interested in questions of production, of distribution and of transport as they affect British interests ; the Department of Overseas Trade is mainly concerned with openings for British trade ; the Treasury in banking and financial matters in relation to British finance. But none of these departments is concerned with the most vital function of all, namely, the diagnosis of economic developments abroad from the point of view of understanding their political implication. Though here and there they may in a fragmentary way throw light on that aspect it is not one in which any of these departments are primarily concerned. Certainly it is not their business to deal with the subject from that angle which has a purely political objective, namely, that of eliciting information that will help to devise means for the pre- vention of war. Now, since it was the habit of diplomatists and foreign secretaries to regard economics as lying outside their province, the result was that this particular aspect became nobody's business. No machinery existed for the purpose prior to 1932.
When the second World War comes to a close, we shall be con- fronted with precisely the same economic problems which the peace- makers of 1919 left unsolved, though in a far more complicated and acute form. It seems to me that certain principles which are crystal- clear emerge from the above considerations.
Firstly: In foreign affairs under modern conditions, political problems can no longer be divorced from economic, because most issues are only superficially political, but in their last analysis economic.
Secondly: If diplomacy is to forestall war, it must be in a position to detect the causes of war before it is too late to take preventive measures. Thus it becomes increasingly clear that the Foreign Office should in future concern itself as much with the economic causes as .ith the political effects which they produce. For that it must be provided with its stethoscope, and the necessary machinery to enable it to formulate politico-etonomic policy in its broad outlines. Thirdly: The prevention of war is a political objective which can be achieved only by a well-thought-out politico-economic policy. The broad conception must lie with the Foreign Office but the execution and elaboration of detail must be left to experts and other depart- ments, as well as to private industrial and financial enterprise. Fourthly: It is essential that the Foreign Office should have the control of the machinery for the handling of those economic problems which form an integral part of foreign policy, and not allow it to drift into the hands of other departments, unless it is prepared to abdicate its position as the department responsible for foreign policy. Political problems are today so dominated by economic considerations that unless the Foreign Office exercises control over the co-ordinating machinery it will be deprived of the only means upon which it can formulate a foreign policy, and it will run the risk of other depart- ments usurping its functions.
Fifthly: If the above premises are correct, it would seem to follow that in the future the main function of the Foreign Office—indeed probably of all Foreign Offices—should be that of a great co-ordinating office for the formulation of a constructive politico-economic policy such as post-war Europe will require.
Sixthly: There has been much misconception in the past as to the proper line of demarcation between the Foreign Office, the Treasury and the Board of Trade in regard to this subject. This unfortunate state of affairs has been due to the fact that the former was never accustomed to think economically nor the two latter politically. It is therefore important to emphasise the fact that machinery as I here advocate in no way encroaches upon the preserves of other departments, since its purpose is purely political, lying wholly in the sphere of foreign policy. Nor does it in any way interfere with their normal channels of information or exclude them from collaboration. All it does is to secure to the Foreign Office the control of foreign policy, which must, to meet modern requirements, be framed on politico economic lines,—incontestably its proper function.
Unless some sort of machinery of the kind exists, it is difficult to see how the Foreign Office can be master in its own house, let alone be equal to the gigantic task which lies ahead of it—viz.—leadership in the post-war reconstruction of Europe.—I am, Sir, yours, &c.,
VICTOR WELLESLEY.
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