Books of the Day
Economics and Peace
The Economic Basis of a Durable Peace. By J. E. Meade. (Allen and Unwin. 6s.)
THE belief that wars are due to exclusively economic causes is a sure sign of deficient sensibility ; and it is one of the clearest indications of the decline of current intellectual standards that such a half-baked view should have gained so wide a following. Nevertheless it is possible wholly to repudiate this attitude and yet to hold that economic factors must play an important part in international relations and that in certain cases they may even be classed among the ultimate causes
of war. It is not merely, as the Marxians contend, that propertied interests may profit from war—in modern times, this is probably the least important factor—but rather that situations may arise in which whole nations may stand to lose if they do not go to war or may even stand to gain if they are willing to pursue certain policies. If migration is blocked, a people may gain by enlarging its boundaries. If restriction is prevalent, a nation may lose if its markets are narrowed by the extension of the sphere of influence of other Powers. It is even conceivable that a nation may gain by actually enslaving the peoples of conquered territories. It would be folly to attribute the present war exclusively or even pre- dominantly to considerations of this sort. But that they have played some part is not open to serious question.
If this is so, the case for International government, already so convincing on political grounds, receives strong reinforce- ment. If peace is to be maintained, it is not only necessary to set up international control of national armies and navies, it is necessary also to co-ordinate national economic policies. Indeed, it is clear that, without some such apparatus of co-ordination, all attempts at mere political control are likely to be frustrated. The poorer nations, the people who stand to gain by extensions of their Lebensraum, are likely to regard the whole thing as a trap designed by the satisfied Powers to perpetuate the status quo—an invitation to surrender the only means whereby at some time they may hope to remedy their economic disadvantages. Political and economic recon- struction must go hand in hand. Unless the possibility of war is eliminated by effective collective security, economic reconstruction must necessarily be frustrated ; the rationale of autarky is essentially military. But political reconstruction, without the removal of the causes of economic friction, is equally likely to be abortive.
So much would be commonly agreed among all who have given really serious attention to the problem. But now the question arises, if an international authority is to be set up, what powers are essential to its success? ShoLld it be a fundamental principle of the constitution that there should be free trade, free migration, free capital movement, and a common currency between the member States? Or can the goal be reached by less drastic provisions?
It is this fundamental question to which Mr. Meade, the talented author of recent League of Nations World Economic Surveys, addresses his attention in his latest essay. The con- clusion which he reaches is important. It is not necessary that the constitution of the international authority should be slavishly based upon the precedent of existing federations. It is possible that it may be thought desirable that there should be some limitations on trade and migration, some degree of monetary independence among the member States ; and the constitution should not exclude these from the outset. But it is necessary, in all those spheres where international dis- harmony may arise, that the international authority should have the last word. If trade is to be limited, the limitation
must receive international sanction. If migration is to be checked, the quotas must be laid down by the international authority. Exchange rates may be varied, but only by per- mission of the international central bank. There may be planned economies within national areas, but the plans must be subject to international rules.
These conclusions, if they are true, are of the utmost signifi- cance for any project of international reconstruction ; and
the probability of their substantial correctness seems to be enhanced by the fact that, by a logic which seems to be inherent in the nature of the problem itself, they converge on a solution to which other investigations have also recentl:. been tending. It is not betraying secrets to divulge that con- versations among certain economists, approaching the problerr from points of view considerably different from that from which Mr. Meade has set out, have recently reached result,, shortly to be published, which arrive at exactly the sam, principle of solution. Whether our starting-point is libera. or collectivist, it almost seems that, if our ultimate aim i, international harmony, we are inevitably forced to similar conclusions. It is not necessary for international reconstruc- tion to force complete uniformity upon the different nationa. economies. But it is necessary that there should be an inter- national authority with certain overriding powers. To have reached agreement on this point is a long step forward.
It has seemed so important to emphasise this central point that little space is left for further comment. I am rather more sceptical than Mr. Meade of the probability of the co-existence of semi-independent national moneys without continuous friction and I think that he underrates some of the difficulties of co-ordinating the policies of completely planned national economies. The more the area of initiative in economic policy coincides with the area of national adminis- tration, the greater the possibility of trouble ; and I am inclined to think that, in the long run, the necessity of eliminating disturbing clashes of interest, would dictate a greater approxi- mation to international liberalism than MI. Meade thinks necessary. But I am very willing to defer debate on these matters of policy until we have established an international structure within which such disputes will have some sort of political relevance.
Meanwhile to all who seek ways of establishing peace and international justice this book may be commended as a very
gallant attempt to aid their endeavours. LIONEL ROBBINS.
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