ECONOMICS OF WAR

Timaru Herald, Volume CXLII, Issue 20511, 1 September 1936, Page 5

ECONOMICS OF WAR

THE WAY TO FIND PEACE

TIMARU LABOUR PARTY

ADDRESSED

During a lecture on the causes of imperialist wars, given at a meeting of the Thnaru Labour Party, Mr R. S. Wheeler stated that expansion became necessary tor capitalist countries at certain stages of their development. It was not necessary that expansion should take the form of conquest or annexation of foreign territory. The capitalists of the developing imperialist countries wanted to find cheap sources of raw material for their industries, a market for their manufactured products, and then a market that should absorb their spare money and find a high rate of Interest for it. British investments abroad had exceeded £4.000,000.000.

It was possible to derive all these benefits from countries which might be allowed to keep their formal independence so long as their governing classes permit exploitation to proceed smoothly. They were then known as semi-colonial countries. Increased Purchasing Power

“The term Imperialism in its modern sense, is generally given to that period of capitalism which began in 1890-5 with the development of finance capital and monopoly capitalism. A combination of financial and industrial trusts,” said Mr Wheeler. Experience shows that modern capitalism, whatever its designation, was constantly faced by the danger of over production, which did not mean that more commodities were produced than were required, but that more goods were produced that could be sold at a profit. Many enlightened capitalists had endeavoured to find a way out of this impasse by increasing the purchasing power within the country of production. America in the boom period claimed to have solved the problem. However, the profit system that the high wage policy was designed to preserve, blocked the way to such a solution. Within the present system wages could not be increased in the same ratio as production was expanded. President Roosevelt of the United States is now trying to square the Icious circle. He declared that the high wage policy of the pre-1929 period was chaotic; it had too many exceptions The idea was all right, but the carrying out of it was not properly organised. He his avoided a revolution by setting to work, helped by brain trusts and enthusiastic young administrators to organise higher purchasing power to absorb the surplus products of the machine age. Immediately he was involved in the inherent contradictions of private capitalism. Production expanded more rapidly than purchasing power could be distributed and the surplus was there again. Inevitably this must be the case, for if the workers got sufficient wages to buy back the goods they produced there would be no profit and therefore no capitalism Socialism would have been peacefully obtained. Development of Markets

The mere finding of markets for the surplus products was not enough. These markets have to be made, “developed,” coaxed or forced to take the goods they did not know they wanted. Demand must be created. In 1929, after 100 years of "development,” China, which contained 25 per bent of the world’s population, bought only 2 per cent of the world’s outside goods. The introduction of capitalism into the colonial or semi-colonial countries brought new customers, but very soon new competitors. The more competitors the more bitter the struggle for markets and for raw materials and the nearer draws the possibility of a new imperialist war. In this mad race, the undeveloped areas, to which the surplus products could be sold, became fewer, while technical possibilities of production increase. At the height of the difficulties thus created the imperialists had made a choice, a war to capture markets from their trade rivals, or the possibility of the sweeping away of their power at home. When Cecil Rhodes said that the street riots of London were best prevented in Rhodesia. he saw the .inevitability of this course.

During the period when these decisions are in the balance, said Mr Wheeler, new factors entered the situation which re-enforced the tendencies that were driving capitalist countries to war. Commodities which were technically easy to produce, but from the production of which there was no hope of profit, were not produced at all. The relative exhaustion of actual or potential makers of a profitable nature compelled the capitalists not only to refrain from increasing production, but to greatly reduce production. In the present depression the productive activities of the capitalist world had fallen very greatly; this was Indicated by the fact that the volume of goods exchanged internationally in 1933 was some 30 per cent less than in 1929. This enforced reduction in trade was driving the capitalist states to the desperate resort of even risking their whole civilisation in further wars At the same time a great army of unemployed came into being in such numbers as to constitute a new and dangerous problem. Unemployment on the present scale was a double nuisance. The unemployed not only yielded no profit, but they must be provided for out of existing profits. They formed themselves into a discontented mass. More serious from a capitalist point of view, they were a vivid object lesson in the failure of capitalism as a system, and formed the best argument for anticapitalist propaganda. All threats to the system were temporarily abolished by war. At once a market is created for everything that can be produced. Food, clothing and necessaries can be distributed to the workers without altering the existing system of social relationships, a most important consideration for capitalist power. In modem citizen armies the men were well clothed and fed, and, on the whple intelligently led. They risked their lives, but the comradeship, the sense of being worth something again after the dreary uselessness of unemployment. was a powerful counterattraction to pacifism. In Germany this was a much more powerful appeal io the unemployed to join the Stormtroops than any material benefit they could be offered through any other

channel. No one could say beforehand who would win a great war, but the consequences of the last war had been sufficiently serious for a new one to be approached with caution. France and Britain had recently given way to Germany by negotiation what could only be defended by war. After recent experiences war had become the final remedy to be taken only if there was no other course open, . . . no other way, that was, which would at the same time maintain the capitalist system. If the capitalists realised that the rising tide of discontent would overwhelm them anyway, then war it would be with safeguards, that was the maintenance of the “profits” system, hence, the development of .Fascism, which was nothing more than a preliminary smashing of all possible opposition to war. Fascism was an indispensable condition for a new world war. The people of our Empire had no quarrel with the people of Germany, Italy or Japan. The people of the world had only one interest . . . peace. War was the outcome of the struggle amongst capitalists. The people paid for these wars with their lives. So long, however, as the people allowed capitalist Governments to control their destinies, they remained simply cannon fodder. They would still remain potential cannon fodder unless they could overthrow warinclined governments, or by pressure, prevent them making war. At the present moment there seemed little immediate likelihood of democratic Governments being established am the war-like countries like Germany and Italy and all that can be done was . . (a) to use the oportunities of increased interest to educate people as to the real causes of war and its cure; (b) to force the capitalists by every means possible to settle their differences in other ways than war, ‘through the League of Nations, Internationalisation of investments, by agreed division of their spheres of Influence or whatever method was possible, including International Labour Organisations.

If it could be brought home to all Governments, that the next world war meant the end of capitalism, which was fairly certain, then the capitalists themselves might find ways and means of avoiding war.

At the conclusion of the address Mr Wheeler answered reveral questions and was accorded a hearty vote of thanks.