AN ECONOMIC FRONT?

Wairarapa Times-Age, 12 May 1938, Page 9

AN ECONOMIC FRONT?

TREND OF AGGRESSION. THREAT TO DEMOCRACY. Whether from intention to engage in aggression, or from fear of aggression, nations are practically all running in the race that leads to war, states Mr C. W. Morgan in the “Christian Science. Monitor.” Aggression in China today threatens both American and British interest. And by virtue of the Romc-Berlin-Tokio axis, which is a loose partnership among the three greatest dissatisfied powers, the United States finds her problems once again linked to those of Britain and France. All once more have the common problem of discouraging the war method. All have to help show that aggression does not pay. The Governments are getting ready to prove this, in the traditional way. They are arming. But they are not only arming themselves; they are arming their enemies also. . . . This

is typical of the contradictory character of mere war preparations. It always has been so. And that is why so many of us are now asking: What about economic preparations?

It has been suggested that the nonaggressive nations might establish huge supplies of metals and other materials necessary for war, and hold these strictly for their own use in case of international emergency. In this way, it has been suggested, the non-aggressive governments — who happen to be in much stronger financial positions than the potentially aggressive governments are —might establish a corner on war materials.

Before I go on to another method, let me point out that this cornering-the-market idea has aspects to recommend it. It would, for one thing, raise the price of materials needed for war to levels which might prove prohibitive to those nations whose armaments seem to threaten world peace. The great increase in the demand for these materials after Britain decided to rearm was cause of some concern in the dictatorships, if reports can be trusted. This plan has in its favour the fact that between it and a plan that would tend to lower prices it probably would receive readier support on the part of industrialists and producers of raw materials. From the consumers’ point of view, of course, this fact of rising prices is not so favourable. But consumers have never been so well organised politically as producers are. And it is the well-organised groups who make their voices prevail in government councils.

So let us put down this point in favour of a programme for cornering the market on war supplies: It has elements in it which make it politically practicable. However, from the peace-making point of view, it is less desirable. For many interests besides those of peacemaking will fatten on it and wish to extend it and maintain it. Moreover, this programme will tend to increase those economic problems of the dictatorships which are, at present, root causes of much of the world’s unrest. Arid it would tend to increase these war-producing problems whether or not diplomatic progress were being made toward understanding between the dictatorships and the democracies.

The alternative to this programme —that is to say, the alternative if we are to bar war as a method —is a system of embargoes. This system would be very similar to that provided in the League of Nation's sanctions programme. Except that when it is employed to protect the national interests of the great powers themselves, it will probably be employed successfully. Do not think that sanctions were really tried in the Ethiopian crisis. That is what Premier Mussolini would have the Italian people think. Sanctions were half tried. When it came to applying the key embargo, that against oil shipments, not even offers of co-operation from the United States were sufficient to induce powerful member-states of the League to take the risk. What part pure commercial greed played in defeating the move for oil sanctions may some day be known.

If we wish to estimate how effective a determined programme of embargoes could be, let us remember that while Italy is much better placed than Germany in production of iron, to make possible her iron production, Italy must depend on the rest of the world for fuel. Japan produces all the coal she requires. But she has to buy much of her oil, some of her iron, much of her tin. For cotton, wool, and rubber is largely dependent on outside sources. The so-called aggressive powers are peculiarly sensitive to economic pressure. Therefore it is surprising that with all the talk we bear of bigger navies and armies, we hear so little of plans to meet the threat of aggression with economic power. Of course, the formation of an economic front against aggression is a problem for statesmen, and no small problem. But statesmen have no small problems, anyhow, these days. Armaments is a big problem, especially as taxes approach the maximum of the people’s ability to pay. Conducting a war is a big problem. Winning one is bigger. And the biggest of all is to bring out of armed victory an honest and a workable peace. It was not done in 1919. Could we do it after another war? Killing each other puts us in no frame of mind to make a just peace. So before we begin to shoot, might we not try as our first line of defense against aggression—an economic front?