The Economic Consequences of the Peace quotes

The power to become habituated to his surroundings is a marked characteristic of mankind.

Very few of us realize with conviction the intensely unusual, unstable, complicated, unreliable, temporary nature of the economic organization by which Western Europe has lived for the last half century.

There, at the nerve center of the European system, his British preoccupations must largely fall away and he must be haunted by other and more dreadful specters.

Paris was a nightmare, and everyone there was morbid.

A sense of impending catastrophe overhung the frivolous scene; the futility and smallness of man before the great events confronting him; the mingled significance and unreality of the decisions; levity, blindness, insolence, confused cries from without—all the elements of ancient tragedy were there.

For half a century all serious economical writings held that Devil in clear prospect. For the next half century he was chained up and out of sight. Now perhaps we have loosed him again.

What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!

The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot.

Only by operating this machine, continuously and at full blast, could she find occupation at home for her increasing population and the means of purchasing their subsistence from abroad.

The German machine was like a top which to maintain its equilibrium must spin ever faster and faster.

In the Austro-Hungarian Empire, which grew from about 40,000,000 in 1890 to at least 50,000,000 at the outbreak of war, the same tendency was present in a less degree, the annual excess of births over deaths being about half a million, out of which, however, …

And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice.

The duty of “saving” became nine-tenths of virtue and the growth of the cake the object of true religion.

There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased;

In that day overwork, overcrowding, and underfeeding would have come to an end, and men, secure of the comforts and necessities of the body, could proceed to the nobler exercises of their faculties.

One geometrical ratio might cancel another, and the nineteenth century was able to forget the fertility of the species in a contemplation of the dizzy virtues of compound interest.

There were two pitfalls in this prospect: lest, population still outstripping accumulation, our self-denials promote not happiness but numbers; and lest the cake be after all consumed, prematurely, in war, the consumer of all such hopes.

He alone both had an idea and had considered it in all its consequences. His age, his character, his wit, and his appearance joined to give him objectivity and a, defined outline in an environment of confusion.

One could not despise Clemenceau or dislike him, but only take a different view as to the nature of civilized man, or indulge, at least, a different hope.

The figure and bearing of Clemenceau are universally familiar. At the Council of Four he wore a square-tailed coat of very good, thick black broadcloth, and on his hands, which were never uncovered, gray suede gloves;

… anxiety, and hope we sought a glimpse of the features and bearing of the man of destiny who, coming from the West, was to bring healing to the wounds of the ancient parent of his civilization and lay for us the foundations of the future.

The disillusion was so complete, that some of those who had trusted most hardly dared speak of it.

Could it be true? they asked of those who returned from Paris. Was the Treaty really as bad as it seemed? What had happened to the President? What weakness or what misfortune had led to so extraordinary, so unlooked-for a betrayal?

The Old World was tough in wickedness anyhow; the Old World’s heart of stone might blunt the sharpest blade of the bravest knight-errant.

But this blind and deaf Don Quixote was entering a cavern where the swift and glittering blade was in the hands of the adversary.

But if the President was not the philosopher-king, what was he? After all he was a man who had spent much of his life at a University.

The first impression of Mr. Wilson at close quarters was to impair some but not all of these illusions. His head and features were finely cut and exactly like his photographs, and the muscles of his neck and the carriage of his head were distinguished.

But, like Odysseus, the President looked wiser when he was seated; and his hands, though capable and fairly strong, were wanting in sensitiveness and finesse.

The first glance at the President suggested not only that, whatever else he might be, his temperament was not primarily that of the student or the scholar, but that he had not much even of that culture of the world which marks M.

The clue once found was illuminating.

The President was like a Nonconformist minister, perhaps a Presbyterian.

His thought and his temperament wore essentially theological not intellectual, with all the strength and the weakness of that manner of thought, feeling, and expression. It is a type of which there are not now in England and Scotland such magnificent specimens as formerly;

when it came to practice his ideas were nebulous and incomplete. He had no plan, no scheme, no constructive ideas whatever for clothing with the flesh of life the commandments which he had thundered from the White House.

He could have preached a sermon on any of them or have addressed a stately prayer to the Almighty for their fulfilment; but he could not frame their concrete application to the actual state of Europe.

He not only had no proposals in detail, but he was in many respects, perhaps inevitably, ill-informed as to European conditions. And not only was he ill-informed—that was true of Mr. Lloyd George also—but his mind was slow and unadaptable.

and he was liable, therefore, to defeat by the mere swiftness, apprehension, and agility of a Lloyd George.

There can seldom have been a statesman of the first rank more incompetent than the President in the agilities of the council chamber.

A moment often arrives when substantial victory is yours if by some slight appearance of a concession you can save the face of the opposition or conciliate them by a restatement of your proposal helpful to them and not injurious to anything essential to yourself.

Thus day after day and week after week, he allowed himself to be closeted, unsupported, unadvised, and alone, with men much sharper than himself, in situations of supreme difficulty, where he needed for success every description of resource, fertility, and knowledge.

He allowed himself to be drugged by their atmosphere, to discuss on the basis of their plans and of their data, and to be led along their paths.

These and other various causes combined to produce the following situation. The reader must remember that the processes which are here compressed into a few pages took place slowly, gradually, insidiously, over a period of about five months.

Clemenceau had been clever enough to let it be seen that he would swallow the League at a price.

At the crisis of his fortunes the President was a lonely man.

Caught up in the toils of the Old World, he stood in great need of sympathy, of moral support, of the enthusiasm of masses.

The German terror still overhung us, and even the sympathetic public was very cautious; the enemy must not be encouraged, our friends must be supported, this was not the time for discord or agitations, the President must be trusted to do his best.

And in this drought the flower of the President’s faith withered and dried up.

Thus it came to pass that the President countermanded the George Washington, which, in a moment of well-founded rage, he had ordered to be in readiness to carry him from the treacherous halls of Paris back to the seat of his authority, where he could …

for the President to admit that the German reply had force in it was to destroy his self-respect and to disrupt the inner equipoise of his soul; and every instinct of his stubborn nature rose in self-protection.

In the language of medical psychology, to suggest to the President that the Treaty was an abandonment of his professions was to touch on the raw a Freudian complex.

It was a subject intolerable to discuss, and every subconscious instinct plotted to defeat its further exploration.

To his horror, Mr. Lloyd George, desiring at the last moment all the moderation he dared, discovered that he could not in five days persuade the President of error in what it had taken five months to prove to him to be just and right.

After all, it was harder to de-bamboozle this old Presbyterian than it had been to bamboozle him; for the former involved his belief in and respect for himself.

Thus in the last act the President stood for stubbornness and a refusal of conciliations.

The provisions relating to coal and iron are more important in respect of their ultimate consequences on Germany’s internal industrial economy than for the money value immediately involved.

The German Empire has been built more truly on coal and iron than on blood and iron.

The skilled exploitation of the great coalfields of the Ruhr, Upper Silesia, and the Saar, alone made possible the development of the steel, chemical, and electrical industries which established her as the first industrial nation of continental Europe.

In a regime of Free Trade and free economic intercourse it would be of little consequence that iron lay on one side of a political frontier, and labor, coal, and blast furnaces on the other.

But as it is, men have devised ways to impoverish themselves and one another; and prefer collective animosities to individual happiness.

It seems certain, calculating on the present passions and impulses of European capitalistic society, that the effective iron output of Europe will be diminished by a new political frontier (which sentiment and historic justice require), because nationalism and private interest are thus allowed to impose …

If Germany is cut off from her supplies of ore on the west, will she export beyond her frontiers on the east any part of the little which remains to her? The efficiency and output of the industry seem certain to diminish.

Thus the Treaty strikes at organization, and by the destruction of organization impairs yet further the reduced wealth of the whole community.

The economic frontiers which are to be established between the coal and the iron, upon which modern industrialism is founded, will not only diminish the production of useful commodities, but may possibly occupy an immense quantity of human labor in dragging iron or coal, as …

This sum should have been divided up amongst the Allies themselves on a basis of need and general equity.

But the question was not settled on its merits.

I do not believe that, at the date of the Armistice, responsible authorities in the Allied countries expected any indemnity from Germany beyond the cost of reparation for the direct material damage which had resulted from the invasion of Allied territory and from the submarine …

A happier country for all.”

Here is food for the cynic.

To this concoction of greed and sentiment, prejudice and deception, three weeks of the platform had reduced the powerful governors of England, who but a little while before had spoken not ignobly of Disarmament and a League of Nations and of a just and lasting …

Those whose practical and selfish fears for the future the expenses of the war had aroused, and those whose emotions its horrors had disordered, were both provided for.

A vote for a Coalition candidate meant the Crucifixion of Antichrist and the assumption by Germany of the British National Debt.

It proved an irresistible combination, and once more Mr. George’s political instinct was not at fault. No candidate could safely denounce this program, and none did so. The old Liberal Party, having nothing comparable to offer to the electorate, was swept out of existence.

Shortly after their arrival at Westminster I asked a Conservative friend, who had known previous Houses, what he thought of them.

“They are a lot of hard-faced men,” he said, “who look as if they had done very well out of the war.”

This was the atmosphere in which the Prime Minister left for Paris, and these the entanglements he had made for himself.

The clearer it became that but little could be expected from Germany, the more necessary it was to exercise patriotic greed and “sacred egotism” and snatch the bone from the juster claims and greater need of France or the well-founded expectations of Belgium.

Yet the financial problems which were about to exercise Europe could not be solved by greed. The possibility of their cure lay in magnanimity.

Europe, if she is to survive her troubles, will need so much magnanimity from America, that she must herself practice it.

Yet the financial problems which were about to exercise Europe could not be solved by greed. The possibility of their cure lay in magnanimity.

Europe, if she is to survive her troubles, will need so much magnanimity from America, that she must herself practice it.

It is useless for the Allies, hot from stripping Germany and one another, to turn for help to the United States to put the States of Europe, including Germany, on to their feet again.

It is useless for the Allies, hot from stripping Germany and one another, to turn for help to the United States to put the States of Europe, including Germany, on to their feet again.

If the General Election of December, 1918, had been fought on lines of prudent generosity instead of imbecile greed, how much better the financial prospect of Europe might now be.

I still believe that before the main Conference, or very early in its proceedings, the representatives of Great Britain should have entered deeply, with those of the United States, into the economic and financial situation as a whole, and that the former should have been …

I cannot here describe the endless controversy and intrigue between the Allies themselves, which at last after some months culminated in the presentation to Germany of the Reparation Chapter in its final form.

There can have been few negotiations in history so contorted, so miserable, so utterly unsatisfactory to all parties. I doubt if anyone who took much part in that debate can look back on it without shame.

I must be content with an analysis of the elements of the final compromise which is known to all the world.

That is to say, the capital sum of indebtedness is rolling up all the time at compound interest. The effect of this provision towards increasing the burden is, on the assumption that Germany cannot pay very large sums at first, enormous.

At 5 percent compound interest a capital sum doubles itself in fifteen years.

On the assumption that Germany cannot pay more than $750,000,000 annually until 1936 (i.e. 5 percent interest on $15,000,000,000) the $25,000,000,000 on which interest is deferred will have risen to $50,000,000,000, carrying an annual interest charge of $2,500,000,000.

In this case all standards of “capacity” would be changed everywhere.

But the fact that all things are possible is no excuse for talking foolishly.

It is true that in 1870 no man could have predicted Germany’s capacity in 1910. We cannot expect to legislate for a generation or more.

The fact that we have no adequate knowledge of Germany’s capacity to pay over a long period of years is no justification (as I have heard some people claim that, it is) for the statement that she can pay $50,000,000,000.

Why has the world been so credulous of the unveracities of politicians?

If an explanation is needed, I attribute this particular credulity to the following influences in part.

A financial body can obviously take nothing from them, for they have nothing; therefore this body must be for the purpose of assisting and relieving them.

Thus do the Viennese argue, still lightheaded in adversity.

But perhaps they are right. The Reparation Commission will come into very close contact with the problems of Europe; and it will bear a responsibility proportionate to its powers.

The danger confronting us, therefore, is the rapid depression of the standard of life of the European populations to a point which will mean actual starvation for some (a point already reached in Russia and approximately reached in Austria).

Men will not always die quietly.

For starvation, which brings to some lethargy and a helpless despair, drives other temperaments to the nervous instability of hysteria and to a mad despair.

… the world, and under the necessity of importing enormous quantities of raw material and foodstuffs, suddenly finds herself pushed back to the phase of her development, which corresponds to her economic condition and the numbers of her population as they were half a century ago.

Those who sign this Treaty will sign the death sentence of many millions of German men, women and children.

”

Those who sign this Treaty will sign the death sentence of many millions of German men, women and children.”

I know of no adequate answer to these words.

The indictment is at least as true of the Austrian, as of the German, settlement. This is the fundamental problem in front of us, before which questions of territorial adjustment and the balance of European power are insignificant.

The problem of the re-inauguration of the perpetual circle of production and exchange in foreign trade leads me to a necessary digression on the currency situation of Europe.

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency.

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.

The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

In the latter stages of the war all the belligerent governments practised, from necessity or incompetence, what a Bolshevist might have done from design. Even now, when the war is over, most of them continue out of weakness the same malpractices.

Lenin was certainly right.

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.

The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

By directing hatred against this class, therefore, the European Governments are carrying a step further the fatal process which the subtle mind of Lenin had consciously conceived.

The profiteers are a consequence and not a cause of rising prices.

By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract and of the established equilibrium of wealth which is the inevitable result of inflation, these Governments are fast rendering …

They allow themselves to be ruined and altogether undone by their own instruments, governments of their own making, and a press of which they are the proprietors.

Perhaps it is historically true that no order of society ever perishes save by its own hand.

In the complexer world of Western Europe the Immanent Will may achieve its ends more subtly and bring in the revolution no less inevitably through a Klotz or a George than by the intellectualisms, too ruthless and self-conscious for us, of the bloodthirsty philosophers of …

… her credit for securing the working capital required to restart the circle of exchange and also, by swinging the forces of economic law yet further from equilibrium rather than towards it, they favor a continuance of the present conditions instead of a recovery from them.

An inefficient, unemployed, disorganized Europe faces us, torn by internal strife and international hate, fighting, starving, pillaging, and lying.

What warrant is there for a picture of less somber colors?

Physical efficiency and resistance to disease slowly diminish, but life proceeds somehow, until the limit of human endurance is reached at last and counsels of despair and madness stir the sufferers from the lethargy which precedes the crisis.

Then man shakes himself, and the bonds of custom are loosed.

The power of ideas is sovereign, and he listens to whatever instruction of hope, illusion, or revenge is carried to him on the air.

Then man shakes himself, and the bonds of custom are loosed.

The power of ideas is sovereign, and he listens to whatever instruction of hope, illusion, or revenge is carried to him on the air.

As I write, the flames of Russian Bolshevism seem, for the moment at least, to have burnt themselves out, and the peoples of Central and Eastern Europe are held in a dreadful torpor.

But winter approaches. Men will have nothing to look forward to or to nourish hopes on. There will be little fuel to moderate the rigors of the season or to comfort the starved bodies of the town-dwellers.

But who can say how much is endurable, or in what direction men will seek at last to escape from their misfortunes?

But if this view of nations and of their relation to one another is adopted by the democracies of Western Europe, and is financed by the United States, heaven help us all.

If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp.

Nothing can then delay for very long that final civil war between the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the late German war will fade into nothing, and which will destroy, whoever is victor, the civilization and …

She can barely secure from Germany the full measure of the destruction of her countryside. Yet victorious France must pay her friends and Allies more than four times the indemnity which in the defeat of 1870 she paid Germany.

The hand of Bismarck was light compared with that of an Ally or of an Associate.

A settlement of Inter-Ally indebtedness is, therefore, an indispensable preliminary to the peoples of the Allied countries facing, with other than a maddened and exasperated heart, the inevitable truth about the prospects of an indemnity from the enemy.

With external debts this is not so, and the creditor nations may soon find their interest inconveniently bound up with the maintenance of a particular type of government or economic organization in the debtor countries.

Entangling alliances or entangling leagues are nothing to the entanglements of cash owing.

The final consideration influencing the reader’s attitude to this proposal must, however, depend on his view as to the future place in the world’s progress of the vast paper entanglements which are our legacy from war finance both at home and abroad.

The holders of war loan in every country are owed a large sum by the State, and the State in its turn is owed a large sum by these and other taxpayers. The whole position is in the highest degree artificial, misleading, and vexatious.

We shall never be able to move again, unless we can free our limbs from these paper shackles.

A general bonfire is so great a necessity that unless we can make of it an orderly and good-tempered affair in which no serious injustice is done to anyone, it will, when it comes at last, grow into a conflagration that may destroy much else …

The whole position is in the highest degree artificial, misleading, and vexatious. We shall never be able to move again, unless we can free our limbs from these paper shackles.

A general bonfire is so great a necessity that unless we can make of it an orderly and good-tempered affair in which no serious injustice is done to anyone, it will, when it comes at last, grow into a conflagration that may destroy much else as well.

As regards internal debt, I am one of those who believe that a capital levy for the extinction of debt is an absolute prerequisite of sound finance in every one of the European belligerent countries.

In short, I do not believe that any of these tributes will continue to be paid, at the best, for more than a very few years.

They do not square with human nature or agree with the spirit of the age.

If there is any force in this mode of thought, expediency and generosity agree together, and the policy which will best promote immediate friendship between nations will not conflict with the permanent interests of the benefactor.

If we oppose in detail every means by which Germany or Russia can recover their material well-being, because we feel a national, racial, or political hatred for their populations or their Governments, we must be prepared to face the consequences of such feelings.

Even if there is no moral solidarity between the nearly-related races of Europe, there is an economic solidarity which we cannot disregard.

Even now, the world markets are one. If we do not allow Germany to exchange products with Russia and so feed herself, she must inevitably compete with us for the produce of the New World.

This has one fortunate side. We may still have time to reconsider our courses and to view the world with new eyes. For the immediate future events are taking charge, and the near destiny of Europe is no longer in the hands of any man.

The events of the coming year will not be shaped by the deliberate acts of statesmen, but by the hidden currents, flowing continually beneath the surface of political history, of which no one can predict the outcome.

In one way only can we influence these hidden currents—by setting in motion those forces of instruction and imagination which change opinion.

In one way only can we influence these hidden currents—by setting in motion those forces of instruction and imagination which change opinion.

The assertion of truth, the unveiling of illusion, the dissipation of hate, the enlargement and instruction of men’s hearts and minds, must be the means.

In this autumn of 1919, in which I write, we are at the dead season of our fortunes. The reaction from the exertions, the fears, and the sufferings of the past five years is at its height.

The assertion of truth, the unveiling of illusion, the dissipation of hate, the enlargement and instruction of men’s hearts and minds, must be the means.

In this autumn of 1919, in which I write, we are at the dead season of our fortunes.

The reaction from the exertions, the fears, and the sufferings of the past five years is at its height. Our power of feeling or caring beyond the immediate questions of our own material well-being is temporarily eclipsed.

In this autumn of 1919, in which I write, we are at the dead season of our fortunes. The reaction from the exertions, the fears, and the sufferings of the past five years is at its height.

Our power of feeling or caring beyond the immediate questions of our own material well-being is temporarily eclipsed.

The greatest events outside our own direct experience and the most dreadful anticipations cannot move us.

We have been moved already beyond endurance, and need rest.

Never in the lifetime of men now living has the universal element in the soul of man burnt so dimly.

For these reasons the true voice of the new generation has not yet spoken, and silent opinion is not yet formed. To the formation of the general opinion of the future I dedicate this book.

For these reasons the true voice of the new generation has not yet spoken, and silent opinion is not yet formed.

To the formation of the general opinion of the future I dedicate this book.