The Future of Western Europe
ECONOMIC COLLABORATION AND PERMANENT PEACE
By M. P. L. STEENBERGHE, Chairman of the Economic, Financial and Shipping Mission of the Kingdom of The Netherlands
Delivered before the American Academy of Political and Social Science, Phila., Pa., February 13, 1943
Vital Speeches of the Day, Vol. IX, pp. 377-380.
THE theme of tonight's lecture is the future of Western Europe. Before discussing such a subject we should agree first on what we mean by Western Europe, and then on what kind of a future we should like to attain for that region.
There is something attractive in letting our minds go over the future of definite parts of the world. It is a kind of natural reaction to the wave of universalism which inspired the peace drafters in 1918. At that time high hopes
were held on the League of Nations and it was widely believed that this organization would give us eternal peace. It is quite natural that the disappointment about its failure was great and that other ways are sought now to attain eternal peace after this war. It is equally natural that more or less like-minded countries have the thoughts of clubbing together in order to be better prepared to ward off the storms of this era.
When we talk of Western Europe we usually have inmind a belt of countries bordering the western shores of the Atlantic and the North Sea, stretching from Scandinavia to the Iberian Peninsula, and we should also include the British Isles in that group. These countries include many different sets of people, but they all have one common characteristic; they have never been able to confine their interests on the European continent alone. They have all shown, in different epochs of modern history, that they wished to broaden their outlook. They did it in various ways. Some did it with culture, other with trade, shipping or colonization in different parts of our globe. They have thereby been able to establish a standard of living that was among the highest in the world. Apart from this trait, the various peoples living in the western part of Europe have very little in common. A variety of languages is spoken in Western Europe, many national, cultural, and religious differences exist. It would be quite contrary to the terms of the Atlantic Charter to change in any way this cultural diversification or to impair in any way the right of these peoples to live in their own manner. In holding their own, these peoples, I daresay, feel in complete harmony with the United States and with Britain.
When we talk of Western Europe we must keep this in mind, and try to think of means by which Western Europe can hold its own. You will all agree with me that some changes will have to occur there. The course of events in this century calls for certain modifications of the old concept of national sovereignty as it was commonly understood at the close of the Middle Ages. I see the modification mainly in two fields: in the field of strategy and in the field of economics.
I do not want to say a great deal of the strategic factor. I am not a military man and prefer leaving this subject to those who know something about it. The strategic aspect of the problem depends on the course of the war. Where will Germany's western frontier be? How far will Germany's disarmament be carried out and controlled? What system of common defense against aggression will he worked out among the United Nations? It depends a great deal on the answers to be given to these questions whether Western Europe is going to regain its own cultural characteristics, or whether it is going to remain completely within the continental sphere in which it is now forcibly drawn.
What I want to deal with especially tonight is the economic aspect of the problem of Western Europe. In various quarters, the idea has lately been raised of some kind of cooperation between the countries which are situated on both shores of the Atlantic. This idea is sometimes supported by an historical analogy: it is pointed out that a system of nations situated around a sea, maintaining active trade relations across the sea existed around the Mediterranean, in the days of the Roman Empire. I always like to go back into history. In our days of world shattering events, it gives the mind a rest to go back into bygone years and to study how our forefathers tried to solve their problems. It can give us a good deal of inspiration to contemplate their deeds and their struggles. However, one condition must be carefully observed; we must not try to imitate our forefathers, because many things in the world have changed since they lived. Mussolini had to learn this human lesson to his own detriment, when he tried to resuscitate his ancestor's "mare nostrum."
We must, however, not forget that a regionalistic conception in our day is something quite different from a regionalistic conception some twenty centuries ago. All through history it has been an iron law that any economic system which covers an area extending over political boundaries must be based on cooperation; on the various parts of the systemdoing something for the others. The way in which the parts of the system did something for the others, of course, varied a great deal through history, but the principle was always there. We all remember from our schooldays that inspiring lesson of the first social struggle in old Roman days, when the Plebeians, on a certain day, refused to continue to cooperate with the Patricians. Wise old Mememius Agrippa convinced them to give up their negative attitude, showing them how the human body could work only when all its parts joined in the common effort. Now in those days a regional system, just as in our day, could only work if people made it work. Early conceptions about manpower were different from what they are nowadays, or at least, from what they should be. In the past, the manpower problem which gives us such headaches today was solved by slavery. When the Roman Empire extended its power over the shores of the Mediterranean, our Roman ancestors found on the African shores a vast human reservoir that could be forced to do the work for them, so that their needs were satisfied. Besides their legions dominated the Mediterranean, they were able to direct the shipping lanes for their own needs and to open the East, as far as it was known to the civilization of those days.
It was manpower that made possible the economic system of the Roman Empire. It is manpower again, or rather the way in which we choose to handle it, that will determine the shape of our post-war systems. We know very well that there are hundreds of millions of human beings in the world today who still believe that the Roman system of slavery can simply be transplanted into our modern world, but it is against just that conception of world management that we are fighting. In our efforts to build a new world, slavery cannot occupy a place, for it is contrary to the human conceptions we cherish.
In the tremendous wave of optimism which characterized the nineteenth century, we were led to believe that free trade, based on a division of labor all over the world, would bring all round prosperity. We must admit that free trade greatly changed world economic conditions. Free trade was largely responsible for an unheard of specialization and perfection of industrial production and it also revolutionized food production in some specified areas. Conversely it brought the destruction of local agriculture and, on the whole, most of the old local production, causing social shifts and political unrest. Besides, the division of labor, which considerably raised the standard of living of a steadily growing population, made the various parts of the world increasingly interdependent and extremely vulnerable to depressions and war. Depressions caused wholesale destruction of valuable raw materials and foodstuffs in the agrarian sector of the world, and unemployment, with all its misery and danger, in the industrial countries. War caused total dislocation of existing trade and lines of communication.
The Great Depression of the thirties did away with free trade and inaugurated economic nationalism. The effect was strengthened by technical developments in the field of synthetic raw materials. We all know what was the result.
I sincerely believe that the so-called small nations were in the best position to see and to feel the dangers implied in the economic developments that accumulated in the present war. And this applies especially to the millions of nationals of these countries who are now forced to live under an enemy rule which systematically aims at destroying their cultural individuality. We cannot be too grateful, from the standpoint of purely human culture, for those thousands of unknown heroes who continue their silent struggle against tyranny in the darkest hour Europe has ever known. It is not astonishing, that after this failure of both freetrade and economic nationalism, a system of various regional ententes is recommended by many as a solution for arriving at a better cooperation for the common benefit.
We in Holland have had some experience with regional collaboration. You will all remember the economic collaboration between Holland, Belgium, and the Scandinavian countries. In 1930 these countries concluded an agreement (the so-called Oslo convention) whereby they pledged themselves not to raise any tariffs without announcing their intention to the other partners and thereby taking heed of special interests of these partners. Well, this agreement worked very well, many notes were exchanged between the Oslo partners, delays were strictly observed, because they were all decent people, but I do not believe one tariff increase was avoided by the mere existence of the Agreement. In 1937, when the clouds of the Great Depression lifted, and a new era of prosperity seemed to be ahead, we decided to carry our efforts a step further and a new meeting of the Oslo States convened in The Hague, where they all agreed on a new instrument which would meet the quota systems on a more or less common basis. In the next year, however, the economic climate in the world was greatly changed, and we were forced to cancel the whole treaty.
I want to remind you of this effort of the so-called Oslo States, not because I believe it was of any importance in solving the difficulties our countries had to face, but to show you why it was, in my belief, a failure. The Oslo system was a failure because the countries of which the group consisted, although they were all decent and peace loving people, were not in the position to develop a system whereby they could help one another in the economic sense. Each country was, to too great a degree the competitor of the others. And above all, their reciprocal trade was too small a percentage of their total trade with all countries to make an economic collaboration between them of any use. It can now safely be said that leaders in the Netherlands were skeptical from the start of the Oslo movement. They hoped that other, and notably the big powers, would join their movement, making it a living reality. But these did not stir, and so this effort could not be continued.
A more important lesson can be learned from this failure, as well as from the failure in the whole field of stemming the rising tide of economic barriers, which characterized the period between the two world wars. This lesson, that humanity now at least has learned through hard experience, is that trade depressions and unemployment, these scourges of our age, cannot be cured by merely fighting their external symptoms. Nothing is to be gained by combating symptoms as tariffs, quotas, exchange restrictions, migrations, etc. Other methods will have to be derived which will carry us to the root of our difficulties. Large scale planning is needed if, after this war, the same scourges are to be prevented from showing themselves again, in a way more devastating than ever.
I think this war is teaching us a great deal of the ways by which a true post-war economic cooperation on the lines of the Atlantic Charter and President Roosevelt's four freedoms could be handled. The economic cooperation of the United Nations, as it is steadily developing under the stress of this global war, may lead, if it is continued after the cessation of the actual hostilities, to a gradual approach to the freedom from want, it will be a long way. No return to normality in the moment the gunfire ceases can, however, bring such an approach. One very important principle has been made evident during this war. It is that purchasing power does not determine the domination of goods, it is rather the need for pooling all available resources for inflicting as much damage as possible on the Axis that determines goods production and distribution. War needs, nowadays, are the consumer who determine the trends of production. I believe that after this war we must try to substitute a great peace consumer for this great war consumer. The great peace consumer consists of the needs of the hundreds of millions on the earth who are underfed, underclothed, ill housed, and lacking of medical care, stripped by the war of the most essential needs of living. If we try to calculate in terms of essential goods, the first needs of those hundreds of millions, be it in the European occupied countries, in Russia or in the Far East, we may well be shocked to see how little our present production apparatus, even when working at full capacity, can do to alleviate the needs. Unemployment need not exist if production after the war decides to let its trend be determined by world-wide consumption.
With a collaboration of this kind I believe in the future of Western Europe birthplace of a centuries old civilization, and I strongly believe such a collaboration will be in the interest of the United States, too, as it will enlarge its markets. The countries of Western Europe have experience in all fields of production—agriculture and industry—and in the problems of communication. Most of them have a proud record in shipping, a valuable asset nowadays, for a not unimportant element of the United Nation's war effort. Some of them have shown marked ability in the conquest of the air. For a full development of these assets, so cruelly depleted by the war and the devastating effects of the occupation of the enemy, Western Europe will need the help of her great Anglo-Saxon Allies.
I feel quite confident that a collaboration between Western Europe and the United States could greatly contribute to the peace of the world, if their collaboration would really aim at promoting human welfare all over the world. It should, therefore, have as its primary object the development of production resources for the peaceful benefit of all. It should, however, not constitute a closed system. The economic ties which bind Western Europe to the rest of Europe have always been so strong that they cannot be broken without great harm being done. Economic barriers against the rest of the world would be a great disaster. This does not in any way preclude economic measures to be taken against the Axis after the defeat of Germany, and notably German industry must be brought within the system and this must be done in such a way that German industry can no longer be a threat to Western Europe. Another element that should be one of the pivots of this form of collaboration, is communications. Communications—sea and air—should be developed equally, according to needs and in such a way that every partner of the system would be able to contribute to its development according to his capacity. No monopolies or exclusions should hamper a free and effective development of communication. If this were neglected we would fall into the fatal mistake made by Mussolini with regard to the Mediterranean. The Atlantic Ocean must become a real "mare nostrum," belonging to all of us and open to the Initiative of all free people.
I am afraid I have been rather negative in so far as I am inclined to be skeptical on the possibilities of economic regionalism. Regionalism may be necessary and therefore possible in the strategic field, in the economic field it is contrary to the great economic and social tasks the United Nations will be called upon to solve in the present age. These tasks can only be fulfilled if we try, as well as we can to approach the problem of freedom from want from a world-wide angle, and try to realize step by step the general terms of the Atlantic Charter.