ISSUE: Winter 1942
The army had a plan for M-Day. It still has it. The M-Day plan embodied years of study of the best disposition that could be made of American capacity for armament production upon the outbreak of war. But war didn’t break out; it edged up. Today we are producing armaments at a rate roughly comparable to that of 1918. So when, as, and if—but chiefly when—hostilities are formally declared, the M-Day plan will have long been superseded by a structure of armament production built up during a period which legally—legally enough to prevent the M-Day plan from being put into effect—was a period of peace.
The coining of the phrase “shooting war” has expressed the American public’s recognition of the fact that there are other varieties. Technically, the years 1933-39 were years of war only here and there across the earth’s surface. But elsewhere, they were certainly not years of peace. The worsening of world relations went through a series of stages; economic, financial, political, and “shooting”; now we know that they were all war. The defense effort of the past year and a half has been an effort to use institutions of a period of technical peace to fill as many as possible of our war requirements.
Our experience of the gradualness and the gradations of the transition from peace to war points up the nature of a process that will one day be reversed. Already at work are a number of groups concerned with the post-war world, making plans for the peace that is to come. What are the conditions which will prevent these plans from being wasted effort, plans that will be legally applicable only after an Armistice Day, when they will have become obsolete?
The first condition, obviously, is to win the war. Discussion of peace plans separate from war plans is one of our worst current forms of wishful thinking—it blissfully assumes a vague, effortless but happy ending to the times in which we live at present.
In recent months it has become plain that there is an answer to the claim that war settles nothing. War at least decides which of the contending parties is to make the future institutions of the area the struggle covers. (That is one reason why the South, the only American region that has lost a war on its own soil, sees so clearly the importance of making sure that it can’t happen here—again.) But perhaps it is more accurate to say that war decides which of the contending parties is not to make the institutions of the future. For when the winners of a war have little or no idea of what institutions are thereafter needed there is a third possibility— chaos. Last time, a good many of us Americans helped bring about that third possibility. The Germans won the battles, and lost the war. We won the war and lost the peace. Last time, by the war’s end, a little group of men of good will had worked out the Fourteen Points and a plan for a League of Nations, and a little group of wilful men prevented us from attempting to operate them. But neither the proposal of the plan by the experts of the Inquiry nor the veto of the treaty by the irreconcilables of the Senate could be called an act of the people in any broad sense.
Our understanding of peace was a phony; we were far too inclined to think of it as a Sundays-only Christian thinks of heaven—as an atmosphere of rarefied goodwill permeating a prolonged inactivity. By such a definition, nothing has to be done about peace and that is what makes it so different from war. The Kellogg Pact, with its affirmation of self-control in a condition of purity that was lofty, remote, and static, was the perfect expression of our phony ideal. Today we know that such peace never was on land or sea—least of all, in the air.
Today we have a much more specific idea about what it takes to have peace, and here again the course of the present defense program gives a clue to our situation after the war. In both Britain and the United States the first reaction to the need for armaments was to build big new factories. With the passage of months, during which the size of the program doubled and tripled, each country discovered that the date for the completion of its program was in danger of receding out of sight. At that point, both the American and the British people realized that they couldn’t build their war plant from the ground up; they must do a large part of the job with what they had on hand. With the “bits and pieces” program that has been in effect on a large scale for a year and a half now, Britain entered the spot market—”in the long run it will be cheaper to pay more for supplies which can be produced now, than to practice a false economy which may only produce them too late.” The equivalent in this country is the “farming out” program. We began by giving our armaments orders to our armaments firms. That worked well enough for the period in which we thought our defense program was a side issue. Then our program grew, and we discovered that we were dealing in futures, no matter whether we waited for the orders to be filled one after another in existing armaments plants or whether we waited for new armaments plants to be built to fill them. The Defense Contract Service was set up to enable owners of existing plants and existing machine tools, built for non-armament purposes, to find out what they could make, or what their facilities, when combined with other neighboring facilities, could make to fill the needs of the defense program.
To be successful, our peace structure must make similar use of what we have on hand. We have certain institutions with a long-time experience in world affairs. We can use them right away but they won’t suffice for the kind of peace we want. We have certain limited possibilities for building new institutions, and we can use them as soon as they can be set up. But our immediate reliance for an all-out peace program, effective now, must be on the going concerns that are convertible to the new uses. This approach to peace through bits and pieces, through farming out specific jobs here and there all over the lot, rather than through blueprints, is a very different approach from what we tried last time. But the method has this advantage: if a good many of the necessary instruments can be produced by a daring conversion of what we already have, our peace plans need not be contingent on the coming of some hypothetical Armistice Day. Thus the making of peace can be part of the war effort.
When we talk of a new world order we know from the experience of .the past twenty years that we cannot easily brush aside what has gone before and start over again—on paper. Neither of the two worlds—one of which, as Hitler says, must shortly break asunder—is a new order in that *ense. Hitler’s order is a new combination of very old institutions: tribal self-worship revived from the dim hours of pagan prehistory, absolutism mixed with the rise of the proletariat, the machines of modern industrialism perverted to war uses. Basic to our new order are the institutions that have already served us with some measure of efficacy, but regrouped and supplemented to give us the four freedoms in a greater measure than we have had before.
II
This is by no means a plea for peace by business-as-usual. There is no road back, and we will stumble if we seek to find one. Since this is a machine war, the pressure under which we arm and the impetus we give to invention by our efforts will make the equipment, technique, and productivity of our 1939 economy look as quaint, when the war is over, as that of 1929 was beginning to look before the war started. New processes—from the extraction of strategic metals to polaroid photography—will be ready for new uses. Old ways of doing things, at both desk and bench, will have disappeared as new production methods are recognized. More than that, industrial structure will itself have changed. New relationships among firms, and between large and small firms, will have grown out of defense orders; and new relationships„ forced by priorities, will have been worked out among firms supplying civilian needs. The latter is being demonstrated by the British “concentration of production” program, under which upwards of a hundred industries, operating at reduced rates because the skill of their workers was suitable for munitions work or because they required scarce raw materials„ have concentrated their production in a few “nucleus” factories. These nucleus firms operate full time; the rest are used as warehouses or are shut down for the duration.
Obviously, when the war is over, these industries will not return to their previous state. Problems of patents, good will, and even actual productive capacity will meanwhile have changed. The new set-up will not be equivalent to rationalization of the industry—or rather, it will at most be equivalent to rationalization under war conditions, when the marginal firm may, by virtue of an out-of-the-way location, be the one least likely to be bombed. But the collective experience which members of the industry will have gathered will be an active fact when peacetime operations are resumed* This will be true also for the American industry committees established in connection with priorities in 1941.
A recent Fortune poll showed that while practically everyone wished to sing an industrial version of “Happy Days Are Here Again” after the war, practically no one expected to do so. We will be well off if that wish does not father too much of our thinking. This time, it is imperative that we skip the restoration, for while history bears witness to the brevity of attempts to put the old order back in the saddle, we have not the time now for even that interval. This time we will have to make peace with as positive intent and as vigorous energy as we make war. The institutions with which we fight the war will be the institutions which we will have on hand when we start the peace. Realizing this will help us to realize that the way some of our war institutions are set up, and the period agreed upon for their operation, are therefore not of short-term but of long-term importance.
Take the fundamental institutions for the preservation of order. It is becoming a truism to say that our future world order must be based on Anglo-American co-operation. But how far has that co-operation progressed? It now includes American use of a certain number of British bases, which was arranged as part of the destroyer deal, and co-occupation of Iceland. It includes co-examination of the situation in the Far East. It includes co-protection of Atlantic cargoes. It includes the psychological symbol of the Roosevelt-Churchill meeting on the waters of the North Atlantic. But so far as over-all strategy is concerned, let us analyze the phrase, “Give us the tools and we will finish the job,” a phrase which Mr. Hopkins has been credited with suggesting to Mr. Churchill. So far, we have not only accepted our situation under such an arrangement as satisfactory; we have even insisted upon it as the one we desire. That is to say, we have been, and currently are, only a junior partner in the supply of the tools. And in the supply of policy we haven’t even joined the firm—in other words, it has not been our business to determine what the job is.
The extent of our current inferiority in the matter of supplying the tools can be deduced from recent statements by officials of O.P.M. Moreover, one of the officials pointed out that it is highly statistical to discourse on the effects of combined American-British production unless the two are in fact combined! In resources, population, and national income, the United States compares with Britain and Canada together in the general ratio of 2% to 1. Yet in actual physical production of war material our current output is less than theirs by a considerable margin; at present rates we won’t even catch up for a year to come. Britain and Canada are devoting about fifty per cent of their economy to the war effort; ours stands now at about fifteen per cent, with twenty-five as a year-off goal.
Is that a tenable long-term basis? When we say that our future world order depends on Anglo-American co-operation, do we mean a co-operation in which Britain determines the policy and the United States provides part of the means of carrying it out? Bluntly put, that is our alternative to making it our business to be in on the determination of the job. Put as bluntly as that, and put in terms of the post-war world, such a role is patently one that we would find intolerable, The real question then becomes: Do we also find it intolerable now?
We are currently subsidizing British mercenaries on the grounds that they are defending our interests, and we are avoiding any positive definition of what those interests are. The mercenaries are doing the fighting and also the defining. We can’t skip the fighting and still expect to be accepted as co-partners in the defining. It isn’t enough to have only the negative aim “that Hitler shall not win”; we must go further than merely stating what we don’t want. Our unused potential is the major current threat to the new world order at which Hitler aims. We should not forget that the existence of American potential, without a policy for using it, could be equally detrimental to a far better world order.
During the past twenty years, England’s position with regard to the European continent was very much like ours with regard to the world today. France saw the need for making policy, but lacked the force to do so without knowing what England would do at the crucial moment, and England declined long-term commitments. In the peace to come, England will have to be part of the continent as never before. If we leave her in the uncertainty in which she left France, we may expect her to live under the same sort of threat, and be preoccupied by the same negative concern for security that France had—with results that anyone can now see.
III
Our principal need, not only for the war but for the peace, is to participate in an institution designed to establish and maintain world order, a joint institution implemented very largely by ourselves and the British, but with proportionate participation by the other nations to which the four freedoms are significant. This institution should be planned to function in three successive ways—first as military, then as military police, and finally as police. Our share in it should be determined after a look down the course of time, from the immediate era which is unmitigated war to the era of world intercourse which we can anticipate after a series of transitions on the way to peace.
What allocations of military responsibility are likely to be most effective for combat? During and after the war, what bases should be American-British, controlled by sea and air to maintain an area open to the four freedoms? What is the proper regional division of responsibility for such maintenance? How much force will be required? We can prepare for peace in time of war by getting the right answers to these questions, and by acting on them early.
We can also take important concurrent action in the economic and financial spheres. If action is taken now to establish joint controls and accumulate experience in joint management, and if the agreements setting up such arrangements are scheduled to continue in effect for a stated period after the shooting stops, we may overcome two of the major dangers of the first stage of transition from war to peace. A number of going concerns operating in the economic area will help us to avoid the dead center of inaction that would threaten us if the war effort stopped before the peace effort could get under way. When the last shot has been fired, there is bound to be a moment of relief followed by inert nostalgia for the good old days—last time it was called normalcy by business men and parity by farmers—when the burden of winning through to a better society seems too heavy to take up. The transition from producing for a standard of armament to producing for a standard of living can be quickened in proportion as its requirements have been foreseen and prepared for in advance.
Present international trade has little to do with economics. It is highly important that we keep clear in our minds the difference between military and economic transactions, and not repeat, in connection with lease-lend shipments, the confusions already familiar in connection with the war debts, With slight exceptions, the goods that now move represent, not trade, but purchases to prosecute the war. Most of them, whether they are primary goods like rubber, copper, magnesium, or the finished products shipped under lease-lend categories, are directly related to war in its military aspect. Other transactions, notably American and British purchases of certain South American products, represent war in its political aspect: the goods are bought to keep the Axis powers from getting them, or to keep governments out of economic difficulties that might influence them to turn politically pro-Axis.
When the shooting stops, political economics may be one of the fruitful early concerns of peace. The stock-piles now being established by some of the governments in exile indicate an understanding of how important it is for these governments to bring home the bacon when they return. Political economics can be employed not only in the domestic structure of various European countries after the shooting is over but also in the international sphere. The responsibility for world order belongs to the United States and Britain. If they also take initial responsibility for world welfare they can speed their transition from military police to police. Both governments are now accumulating stores: can they work out in advance a collective technique of distribution which will institutionalize freedom from want at the same time that they institutionalize freedom from fear?
The first such arrangement is currently nearing completion by representatives of Argentina, Australia, Canada, the United Kingdom, the United States. Preliminary explorations for an international wheat agreement were made by this group last July, and carried back for submission to their governments; in October they reconvened to finish the job. The statement released to the press at the beginning of August indicated both the broad purpose of these conversations and the specific technique by which it is hoped to put that purpose into effect:
The advance of knowledge about the relationship of food to health suggests that this reconstruction should result in the provision for each country of diets more adequate for health and happiness, thus improving upon pre-war conditions.
Much progress has been made in the consideration of all these problems in the hope that by the establishment of an ever-normal granary and of a large pool of relief wheat, the consumers of the world may be guaranteed abundant postwar supplies at prices reasonable both to them and to producers and free of charge to those in need of relief.
Wheat is a starter. There is a good bit to be said for the current slogan of the U. S. Department of Agriculture: “Food will win the war and write the peace.” Can other international products like rubber, copper, and cotton be comparably treated? In the 1920’s, and indeed before the other war, international cartels had been made instruments for rationalizing production and marketing. During the 1930’s, the Stamp Plan was invented in the United States as a means of handling surpluses by turning need into consumption. Combination of the experience gained under these two techniques can make available a powerful instrument of international policy.
For example: Mass feeding will be an immediate post-shooting need in Europe. Last time, in the relief agencies under Herbert Hoover, we set up an entire overhead for this purpose, privately managed and duplicating normal channels of food distribution. During the relief purchases of the early years of the depression in the United States the job was done by public agencies, but again with duplication of distribution facilities. Then the Stamp Plan showed how to eliminate that duplication. Under its provisions, the goods go through existing channels of normal distribution. The stamps go to persons known by existing welfare agencies to be in actual need. Stamps and goods are exchanged across the local grocer’s counter. Jointly controlled American-British stock-piles, assembled by the technique of the international wheat agreement and distributed by Stamp Plan methods, can become a major international institution. We have found out how to feed in such a way that food and want are equated with a minimum opportunity for political pressure, and in a manner to strengthen the resumed operation of the normal channels of trade. For obviously, in a world bent on making peace, the object of political economics is to pave the way for economic economics. The current war is in part a world revolution against want in the midst of potential plenty. Social mechanisms will certainly be found to accomplish that revolution.
Post-war economic expansion must therefore be thought of at the same time as post-war relief. Paralleling the group of institutions set up to handle international surpluses, we need a group of institutions to handle post-war world development. The international investment of the future must look beyond the dollar sign to the goods whose production it induces; it must take account of the economic structure whose capacity to produce and consume are altered by it. It must be responsibly related to the welfare of the countries in which it operates and on whose resources it draws. Domestically, we must solve the problem of lack of purchasing power and the resulting underconsumption in regions like the South and the West, which occupy an essentially colonial status. The same problem presents itself in those colonies which happen to be physically detached from the industrial areas they serve.
Throughout the past two decades we have been acutely aware of the raw materials problem, the colonial problem, the tariff problem, the exchange problem. We have also developed a series of institutions with staffs that are competent to deal with these issues: the Bank for International Settlements, the International Labor Office, and the economic and financial sections of the League. When the shooting stops, the capital-possessing countries—particularly, of course, our own—have a unique chance to bring this experience into dynamic use in new relationships. Domestically, in the Reconstruction Finance Corporation, we have worked out a means of making available public capital, under public safeguards, to promote developments in which private initiative has a large part and which contribute to the sum total of our economic resources. Can we take the initiative in setting up a World Development Corporation to serve a comparable purpose? Can it be given sufficient autonomy to get beyond the national problems of barriers and exchange and so be enabled to work out on a new level both a method and a medium for international transactions? A Relief Corporation and a Reconstruction Corporation at work in an adequately policed area would be the first achievement of a new peace.
We don’t have to wait for some hypothetical Armistice Day. We don’t have to write the peace into the blueprints of an ornate treaty. We need to sub-contract the peace, here and there, to a series of going concerns that are already partly fitted for—and that can assume new relationships to fit—the requirements of the future. If we follow this procedure, we may well be surprised to learn how many tools we already possess with which to finish the job.
