PROBLEMS IN EUROPE

Wairarapa Times-Age, 2 December 1938, Page 3

PROBLEMS IN EUROPE

ECONOMIC CAUSES OF WAR TENS OF MILLIONS HUNGRY. “POVERTY IN THE MIDST OF PLENTY.” (By R. A. Scott-James, in the “Christian Science Monitor.”) The moment has been reached when Europe must seek to come to a general agreement—the alternative being war. And not only Europe, but the world, for the tangle does not stop at the borders of one continent. But no agreement will remove the causes of trouble if it is merely political. It will not be enough to fix frontiers, to promise nonaggression—or even to reduce armaments. A deep underlying cause of much of the unrest is that tens of millions of people are hungry and that whole communities are deprived of the means to secure an adequate return for their work. This problem is economic. It is not that there is any lack of food and raw materials in the world. There is a super-abundance but it is not available for those who need it. If the factories are not working at full pressure and their workers are unemployed, that is not because the public does not want the goods they could produce —it is only that they cannot buy them owing to the faultiness of the means of exchange. England has an excess of coal which she wants to send abroad; if foreign factories were working to capacity they could easily absorb it. Germany wants the agricultural products of Hungary and Yuogslavia and the oil of Rumania, and it is right that it should have them; but it is not right that they can only be secured by resort to the medieval method of barter. The United States has food and raw materials for industry for export; an organised world could absorb all that it can produce. Both the United States and Britain need to increase their exports of manufactured goods; their goods would be welcomed in the other countries if they in their turn were exporting their own products. It is the same throughout the world: super-abundance of goods and the means of producing them, but inadequate sales, and on the other hand a craving for the necessities of life which, though they exist, cannot be bought. “Poverty in the midst of plenty.” This paradox of our modern civilisation is not only due to imperfect organisation; it is also due to the positive and arbitrary erection of obstacles to exchange. These are partly due to fear, partly to bad economics. After the World War great and small countries sought to make themselves self-supporting. They cherished the impossible hope of making themselves independent of imports and yet, by some miracle, of retaining the power to export. In Europe the situation was aggravated by the splitting up of large economic units into very small ones. Austria was cut off economically as well as nationally from the areas on which it had once depended, and was not allowed to join Germany. All •the small countries of the Danube basin set up tariff vzalis which stopped trade between them.

Economists agreed that the obstacles were fatal to world trade, but no country dared to take the first step in reducing them. Even Great Britain, traditionally “Free Trade,” and depending on international trade, was at last compelled to change its policy, and impose a general tariff on imported goods. It is true, efforts have been made to a limited extent to reduce the evil of these absurdities. Trade agreements have been arrived at between individual countries to facilitate exchange, and tne impending trade agreement between the United States and Great Britain may prove to be an important step in the right direction. The Van Zeeland report has suggested Ways in which co-operation on a large scale might be introduced; a better system of international hanking is one of the desiderata. But .he world has been too preoccupied by political troubles to give attention to the report, much less to act upon it. But now the time has come when these problems must be faced. The world has been on the brink of war, which has been averted by a hair’s breadth. The peoples everywhere, passionately desirous of peace, are calling out that such crises must not occur again; that there must be concerted action in the interests of peace. Soon, surely, the statesmen of Europe will come together to devise some general settlement. But it cannot be lasting if it ignores the economic issues; nor can it be effective unless it includes, on the economic side, the United States. In the matter of trade American interests and European interests are one. *

The world today is a single economic unit—a unit which is now artificially split, but is none the less single, in that whatever damages or ameliorates one part damages or ameliorates ihe whole. The economic planning which has to be faced must rest on one sure foundation of doctrine —that economic prosperity or adversity in other countries means economic prosperity or adversity in one’s own.