Saturday, October 30, 2010

The Economic Roots of World War Two

Chopping up history is a common method of distorting it and preventing anything being learned from it. Chopped-up history comes to us as a series largely self-contained, unconnected and accidental events which were crucially influenced by the personalities of the leaders of the time. The implication is that there is no overall pattern in what happens in the world, that things would have been different had other people been in charge or if certain events had not coincided. It follows from this that there is no need to make any fundamental changes in society because a bad historical accident at one time can be redressed by a good one at another time.

Mad Dictators versus The Democracies?

The popular account of the last world war goes something like this. After 1918 the victorious Allies made two big mistakes. Firstly, they did not ensure that Germany had been properly finished off as a military power. Secondly, they imposed the Versailles Treaty, a settlement so stringent as to cause a lingering resentment among the German people which was too easily exploited by Hitler, an unusually mad dictator whose consuming ambition was to lead Germany into a conquest of the entire world. Hitler was in league with Mussolini, another mad dictator who was also comical because his belligerent strutting and posturing were a facade behind which the Italian people were disinclined to go to war. His other ally - Japan - was a different matter, for the people there were tradition-bound into a disciplined savagery. These three countries regarded the persecution and murder of human beings as necessary and progressive and they were intent on extending their rule over the entire world. Other countries - Britain, France and America - were democracies. Their leaders were not dictators, they allowed free speech and free association and they treated their people in a humane way. The democracies could not stand aside and allow the dictatorships to take over the world and so, after a few years delay caused by their natural inability to grasp the enormity of Hitler's madness and their laudable reluctance to plunge the world into hostilities, they eventually had no choice but to go to war. After six years of bloodshed which cost at least 15 million dead the dictatorships were beaten, the world recovered frorn some very nasty historical accidents and all was well.

One of the most obvious flaws in this version is the fact that on the side supposedly fighting for democracy was one of the world's most fearsome dictatorships. When Stalin's Russia was forced into the war on the Allied side it had become enduringly notorious for its iron repression of its people, for its ruthless policy of mass murder and for the brutal and cynical way in which Stalin disposed of any opposition among the leadership normally by killing them off. The fact that 'communist' Russia was supposed to be a sworn enemy of Nazi Germany did not stop the two countries, in a typical example of the dirty game called diplomacy, signing, just before the war began, a pact of non-aggression guided, they said, " the desire to strengthen the cause of peace between the USSR and Germany..." The pact - which, although it was supposed to last for ten years, did not stop Germany attacking Russia in June 1941 - also carved up part of Eastern Europe: Lithuania, Poland, Bessarabia. Russia was not the only dictatorship fighting on the side of freedom: Poland and Greece could hardly be described as democracies and they too were in the Allied camp.

Meanwhile, neither the 'democracies' nor the dictatorships were completely united. Mussolini's government was alarmed by Germany's expansion, in particular the occupation of Czechoslovakia which they saw as undermining their interests in Central and South East Europe. They did consider developing closer ties with Britain and France but instead asserted that the Balkans and the Eastern Mediterranean were Italian spheres of influence and annexed Albania. The French were mistrustful of British policy which, as the pressure from Germany mounted. did not rule out a settlement through offering Germany some colonies, which the French saw as a potential threat to their interests in the Middle East.

The British Empire

More important - more influential - was the antagonism between American and British interests. One of the reasons for the opposition in America to that country joining the war was the well-founded suspicion that American power would be used to protect British possessions and so shore up the British Empire, which with its system of Imperial Preference hampered American industry's exports to valuable markels and ils access to vital raw materials. The 'aid' which flowed from America to Britain was thickly festooned with strings. In August 1940 the 'gift' of 50 US destroyers (which were in any case well past their prime as death-dealing machines) was conditional on American occupation of 8 bases on British territory, from Newfoundland to what was then British Guiana. Purchases of American war equipment were to be paid for by the liquidation of overseas assets and lend-lease was agreed to only on the condition that the British ruling class had exhausted all other ability to pay. In August 1941 the Atlantic Charter was exultantly publicised as a declaration of faith in the war for democracy and the well-being of the human race. In reality it was an undertaking to ensure self-determination and free trade in the post-war world - which effectively meant the end of Imperial Preference.

So the objectives of the war were not as chivalrous and humane as its supporters would have us believe. Of course it is true that Nazi Germany was a vicious dictatorship where all opposition was ruthlessly stamped out and where millions of people were systematically killed simply because they were Jews or gypsies or homosexuals or handicapped. And of course the Allied victory did mean the end of the extermination camps at any rate in Germany, for genocide, atrocities and mass political murders did not end in 1945. But these were not the objects of the war, except to those who chop up history. The war came as an episode in an established and continuing system of international relations which were an inevitable result of the social system we live under - of capitalism.

Germany's defeat in the First World War, the Russian revolution and America's withdrawal from the post-war settlements left Britain and France dominant, with the onus to strike a balance between the elite powers. As an outcome of the war these two states, already possessing huge empires, also absorbed former German and Turkish colonies so that Great Britain controlled a quarter of the world and, with France, a third of it. "We have got most of the world already, or the best parts of it" was how it was described in 1934 by the First Sea Lord. The fact that the advantages of empire were largely illusory for the ruling class - and wholly illusory for the working class, who were nevertheless so proud and ready to die for their masters wealth and possessions - did not prevent imperialism being seen as vital to everyone's interests. The 'have-not' states - Germany, Japan and Italy - demanded to be let into the power syslem, to expand to be a part of the balance. "As a result of restrictions our economic situation is such that we can only hold out for a few years...There is nothing else for it, we have to act", said Hitler in August 1939.
These demands were given an emphalic political voice, and a great deal of energy, by the Nazis in Germany and the Fascists in Italy. In many ways the policies of both were, to put it mildly, bizarre; they not only hampered Ihe full development of each state's power bul also gave the Allies, when the war came, a brilliant propaganda theme which they worked for all it was worth. Telling us all about the racism of Nazi Germany, they forgot troublesome facts like the collusion and encouragement the Nazis had received from so many respected and bellicose British politicians and the persecution of blacks in America.

German Industry and Commerce

The Nazis were not the first post-war German government to work for the overturn of the Versailles Treaty and the re-establishment of Germany as a major European power. These policies had also been expounded by the politicians of the Weimar Republic and the implications were the same for them as they were for the Nazis - the annexing of Austria, perhaps also of Czechoslovakia and the extension of Germany's sphere of influence into eastern Europe and the Balkans. Behind the policy stood German commerce and industry with their insistent need to throw off the shackles of the post-war settlements and to expand. When Nazi Germany moved militarily the country's commercial and industrial interests eagerly followed the victorious armies. German banks quickly took over their competitors in Austria and Czechoslovakia and the industrial combine IG Farben did the same to its rivals in those countries so that it became the dominant chemical concern in South East Europe.

Although the Versailles Treaty was supposed to have sorted out the world's problems (for what else were those millions of workers killed in the first world war?) the stresses and crises which followed in peacetime produced a clutch of other treaties, each attempting to deal with a separate point of tension. But the diplomatic edifice erected in the 1920s was severely damaged by the world econornlc collapse. Collective action became dislinctly unfashionable as each country scrambled to protect the wealth and the standing of its ruling class. Tariff barriers went up and Britain abandoned free trade in favour of imperial preference. The industrial powers suffered massive unemployment, with up to a third of their workforces being idle. The despair and disillusionment with parliamentary democracy which this caused undoubtedly helped the Nazis' rise to power as they could blame the economic collapse on alleged corruption and bungling of the Weimar republic and assert that it would not have happened in a racially pure, virile and disciplined Nazi dictatorship.

In 1931, in response to the slump, Britain went off the gold Standard - that is, declared that the pound was no longer convertible into gold. As a result a number of ad hoc arrangements for international payments emerged with the 'outsider' powers such as Germany and Japan entering into bilateral trading deals. This effectively divided the world into two antagonistic blocs - the gold-possessing states and those now reliant on barter. The German ruling class fought their side of the conflict by dumping exports, importing through bulk buying, currency controls and the like. The British government fought back with export guarantees and, in 1938, buying up the entire wheat crop of Rumania in an effort to prevent that country being absorbed into Germany's sphere of influence. In general the Germans made the running in this race and British and French capital became more and more excluded from eastern Europe.

For the British and French capitalists the German threat to Poland was the sticking point, beyond which there could be no further attempts at diplomatic appeasement or economic warfare. The invasion of Poland left the Allies with no choice but to try by military means to force Germany back into 'normal' trading relationships. Behind all the talk about a war to defeat dictatorships and to liberate Europe from the Nazi thrall the real war aim of the Allies was to restore the financial and trading arrangements which benefitted their ruling classes. In July 1944, while some of the wars fiercest battles were being fought, the bloodless battle of Brettan Woods settled a lot about the economy of the post-war world. The Conference set up the International Monetary Fund and the World Bank as the main instruments of a new international payments system based on currencies convertible at fixed rates into gold and, as the Daily Express complained for years afterwards, was another large nail in the coffin of Imperial Preference.

Far from being an historical aberration the Second World War was a predictable episode in capitalism; it was normal to a social system which throws up rivalry and conflict all the time. Those who chop up history, treating the war as if it were a separate incident, unique because of the personalities of the leaders at the time - lunatic Hitler, conceited Mussolini, and Chamberlain - spread confusion and misunderstanding. To understand why that war happened is to understand a lot about society today, and about why it operates as it does. This is a matter of great urgency, if we are to organise the world so that war is abolished. After all, those millions who were killed in the war were supposed to have given their lives to make the world safe for peace yet look at what has happened since 1945 ...


Socialist Standard September 1989

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