In modern times the methods by which civilized peoples obtain
food and goods and services have grown more involved and more
complex with each passing year. In a primitive society a tribe
or even a single family may manage to support itself with little
or no outside aid. During the Middle Ages the inhabitants of many
European hamlets raised their own food, made and mended their
own tools, tanned their own leather, fashioned their own shoes
and harness, and wove their own cloth. People who meet their own
simple needs from their own limited local resources are said to
be economically self-sufficient.
Even in the Middle Ages, however, dwellers in remote isolated
villages obtained a few articles they could not produce themselves
by buying them from travelling merchants. Or they might journey
to a town a few miles away and purchase goods at a fair. Thus
they were not exclusively dependent on their own labor.
The Age of Discovery, at the close of the Middle Ages, opened
the oceans of the world to European ships and made it possible
for Europe to obtain goods from distant continents. Later, with
he Industrial Revolution, the Europeans learned to produce quantities
of manufactured goods cheaply, and to sell what they did not need
in exchange for raw materials, tropical products, and additional
food.
During the nineteenth century international trade - trade between
countries and between continents - increased at a rapid rate.
By 1900 the total value of such commerce was ten times as great
as it had been in 1800. by 1913 it was twenty times as great;
and by 1929 (despite the disruption of World War I) it was over
thirty times as valuable as it had been in 1800. In other words,
almost all nations in the nineteenth and twentieth centuries became
increasingly dependent on foreign markets, on selling goods to
and buying goods from countries in other parts of the world.
As the value of this international trade increased the peoples
of the world became more dependent on one another. Countries that
possessed a surplus of some commodities sought to exchange that
surplus for goods they wanted but lacked the means to produce
for themselves. International trade brought the nations of the
world into closer contact. It made them more dependent on one
another, and made it more important that they cooperate in supplying
one another's needs for the benefit of all. The American economist,
Henry George, summed up this situation very simply in three words.
He said: civilization is cooperation.
The fact that, by the twentieth century, the world had come
to resemble one vast market helps to explain its rapid progress
and development. It helps to explain why goods were produced more
abundantly and distributed more widely than ever before, why standards
of living rose, and the global population increased at an astonishing
rate.
Unfortunately, however, the increase in food and manufactured
goods, the increase in wealth and prosperity, was not equally
distributed. Some nations, that possessed or achieved unusual
advantages, that developed more effective machines, and techniques,
grew wealthy. Other nations, less favored by nature, less efficient,
less resourceful or less industrious, remained poor. Just as in
individual countries, a small minority of the inhabitants might
be exceptionally wealthy and might preserve and enlarge their
family fortunes, while the majority remained relatively poor,
so among the nations of the world a few achieved a high standard
of wealth while the majority subsisted on very much lower incomes.
Some countries and continents enjoyed a much larger share of world
trade than others, and the countries with a large foreign trade
were wealthy countries where income and living standards were
high. Before World War I, for example, Europe, with about one-fourth
of the world's people, monopolized nearly 60 per cent of the world's
international trade. This was more than twice as much as the Europeans
would have controlled if the international trade of each continent
had been proportional to its population.
After World War I the European share declined to less than half
the world total while that of North America (the United States
and Canada) rose. By 1926 the North Americans claimed one-fifth
of the international trade of the globe, nearly three times as
much as their numbers would have entitled them to if this trade
had been divided in proportion to population. But their good luck
was due in part to the destruction and dislocation Europe had
suffered during the war. After 1926 the Europeans recovered some
of the trade they had lost, while the share the North Americans
had obtained declined.
These facts suggest several points concerning international
trade which it is important to remember. In theory the universal
exchange of goods seems deceptively simple. If every people produced
those goods which their resources and skills best fitted them
to produce, and all nations were willing and able to exchange
goods freely, the whole world would benefit and its peoples would
become more and more cooperative and interdependent. To some extent
this is what has come about in modern times. But the growth of
international trade has been slowed and hampered by three difficulties
that proved very hard to overcome. It is impossible to understand
the strains and tensions of the modern world unless these obstacles
to trade, and their causes, are taken into account.
The first difficulty is that the peoples whose need is greatest
buy the least. For trade is an exchange and very poor people with
low incomes have little surplus to offer for things they lack.
In 1926, for instance, Asia, Africa, and South America together
held over three-quarters of the world population but enjoyed only
one-quarter of its international trade.
A second difficulty is that a rich nation that could afford
to buy the surplus a poor nation offers frequently refuses to
do so. Some Asian countries that need and want to buy machines
or medicines from the United States may have cotton or rice to
offer in exchange. But American farmers also raise cotton and
rice. To protect them, the United States may refuse to buy cotton
or rice from Asia although it is cheaper than their own. This
may mean that American consumers pay higher prices for their home-grown
rice or cotton than they need to do, and the Asian people, who
want to buy goods from the United States, are unable to buy them.
Tariff barriers and other obstacles that nations impose on
the free exchange of goods obstruct international trade. Governments
do not regulate their trade in the way that will be best for humanity
as a whole. They do not always regulate it in the way that would
be most advantageous for their own people as a whole. Sometimes
they impose import duties on a commodity in a way that inflicts
a hardship on foreigners and on most of their won people, but
enables a small number of their own people to obtain a higher
price for their products. It must be kept in mind, however, that
by producing a commodity within its own frontiers, even if it
could buy an ample supply more cheaply abroad, a nation preserves
one important advantage. Its supply of that commodity cannot be
cut off by a blockade or a war.
In a world of competing states every nation seeks to protect itself.
It wants other countries to become dependent on it but it does
not want to become dependent on them. This situation creates a
paradox. For while international trade makes nations more interdependent,
they try to regulate their imports and exports in such a way that
they will be more independent.
The basic wish of every nation is to be secure and prosperous
but these selfish goals are unattainable. In the world of the
twentieth century no country is secure from attack and prosperous
countries excite the envy of the impoverished majority. This is
one reason why the modern age has been called the "Age of
Anxiety," but there are other reasons also for the strains
and tensions that afflict modern society.
As you know by now, there were already serious strains in European
society before 1914. The First World War grew out of these unresolved
conflicts, but the fighting solved no fundamental problems and
intensified national antagonisms. As a result the European peoples
gained no lasting sense of security from the peace settlement
of 1919.
Rather, in comparison with the years before 1914, the postwar
era seemed threatening and chaotic. Men began to look back to
the relative calm of the preceding century as to a golden yesterday.
A mood of pessimism and cynicism, of not fatalism and futility,
spread through the Western world. The discontent and disillusionment,
the fear and insecurity and mounting violence offered a marked
contrast to the more orderly methods, the respect for legal forms,
contracts, and treaties, which had distinguished the leading nations
in the nineteenth century. Even the optimistic faith in progress
which had inspired civilized peoples before 1914 lost its earlier
intensity. It is important to seek the causes, some of which have
already been foreshadowed, which help to account for this change
of temper in modern society.
The first unsettling factor to note was the rapid and irreversible
increase in the number of city dwellers, especially the urban
proletariat. Within half a century all the industrialized nations
found that a city population had grown up within their borders
which outmatched, outvoted, and out numbered the once dominant
rural and agricultural classes. In Britain, Germany, Belgium,
France, the United States, and to a lesser degree in the remaining
European countries, the generation which came of age about 1920
was a generation largely born and bred in the cities, shaped and
dominated by city patterns and city ideals.
The resulting change in the character of the average twentieth-century
citizen born after 1900 is not easy to analyze or to describe.
Yet there was a change, a real and disturbing change, in the mentality
and the expectations of this modern generation. It might, perhaps,
be summed up by saying that the young people had more superficial
self-confidence but less genuine self-reliance than their predecessors.
This was understandable. The sense of security which makes people
feel habitually calm and at ease is based upon emotional rather
than intellectual certainties. For millions of people the transition
to city life tended to weaken the two most fundamental "frames"
within which men had oriented themselves and learned to feel at
home: the immemorial framework of the family group and the framework
of the native village or community.
City families were in general smaller than rural families and
were often severed from the older generation. They lived in more
transient fashion, in rented and often restricted quarters. They
had fewer permanent possessions than rural families but more diverse
interests. The individuals who composed a city family depended
less on one another and less on their immediate neighbors than
had been common in village communities.
It has frequently been said that modern city dwellers are "rootless,"
and the charge is just in the sense that millions of city people
feel no personal or intimate ties binding them to their block
or precinct. They have no bonds comparable to those which attach
a man to the fields he has ploughed for years or the villager
to the church spire in the shade of which his ancestors are buried.
Children who grew up in a rural environment shared more intimately
in family responsibilities, joined early in the common labors,
and learned their capacity and their worth. But city children
were often a financial burden throughout school years. As members
of large classes and neighborhood groups they were submerged in
numbers. When they went to work they were likely to pass their
days at a mechanical routine with little chance to feel or express
their individuality. This was so because to the industry or corporation
which they served, they were impersonal and replaceable automatons.
Many large firms, recognizing these defects, sought to promote
group activities among their employees, to enlist their loyalty
by stressing the mutuality of the business relationship, and to
reward their fidelity by the distribution of shares or bonuses.
But the impersonality of modern business and industrial methods
continued to frustrate the individual. In the city environment
it was less easy for a human being to develop those tendrils that
attach him to his world and give him the sense of security which
comes to those who are known and needed by their fellows.
City adolescents reflected this difficulty in achieving emotional
adjustment. They learned to be alert and brisk and knowing in
manner but they often remained inwardly unsure. The strain and
the dissatisfaction that made modern life a burden for millions
led to an alarming increase in mental ailments and in juvenile
delinquency. Mental and emotional ills incapacitated more people
than any other maladies.
To these psychological hazards of modern life there was added,
especially after 1929, a deepening sense of economic insecurity.
In earlier times, the man in business for himself, the farmer,
carpenter, storekeeper, or general practitioner, did not worry
about dismissal because he was his own employer. A poor crop or
a business recession might mean some lean years but not sudden
unemployment and imminent privation. The factory or office worker,
however, who had nothing but his job, lived in fear that his job
might fail.
This fear lay behind the various government measures, adopted
more and more widely in the twentieth century, which promised
the working classes some form of insurance against the risks of
sickness, accident, disability, and unemployment. The rise in
savings accounts, insurance policies, and government social security
funds all reflected the need of the workers to lay up some reserve
against disaster, or have their government do it for them.
Unfortunately, savings deposited with the banks or the government
were not always safe. Bank failures, inflation, ruinous taxes,
revolution, or war might destroy the financial security of a whole
class or nation. World War I proved to millions of Europeans,
who had been subsisting on fixed incomes or annuities, that currency
could depreciate and prices soar. The German people learned the
full tragedy of inflation after 1920 when their currency depreciated
until it became literally worthless. Millions of families watched
their wealth, insurance policies, mortgages, pensions, or investments
turn to valueless paper. In France the franc lost four-fifths
of its prewar value, falling from twenty cents to four.
Finally, even the British pound, monetary unit of the world for
a century, fluctuated and fell from the gold standard. The impact
of these forfeitures shook the confidence of the disinherited
classes. Throughout all the industrialized states many people
found their jobs dependent upon vast economic forces they could
not comprehend and their savings dependent upon financial fluctuations
which they could not control.
To the young who faced the world after 1920 the old and stable
values which their parents had trusted seemed less sure. This
was not their misconception; they were living in a disreputable
age in which the honor of nations, the sanctity of contracts,
and the equity praised by the law were often and brazenly betrayed.
Such conditions breed fear even in nations which are spared them.
The impoverished classes of central Europe, the fugitives from
Russia who had been dispossessed by the revolution, the French
families that lost their men in the war and their savings in the
peace, the British who were fighting to hold their threatened
leadership in world trade, all felt the prevalent mood of economic
insecurity.
A third factor in the general disquiet was the unhinging of
international exchange rates. Here sharp national antagonisms
added to the bitterness that is always incited by forfeited investments
and repudiated debts. In the economic competition after 1920 few
nations admitted themselves at fault but all accused their rivals
of cheating. The Germans blamed the Treaty of Versailles and the
Reparations Bill for the collapse of their currency. The French
blamed the German failure to meet reparations payments in full
for the fall of the franc. The British blamed a disordered world
exchange for their dislocated trade and proposed a cancellation
of war debts all around.
When the United States, which would suffer the heaviest loss from
such a course, declined the suggestion, all debtor states criticized
the American government. In reality, the war debts and reparations
quarrel was no more than a superficial issue in a much graver
problem. World production, agricultural and industrial, had been
speeded up and world population doubled in a century.
But no adequate machinery had been developed to assure the industrialized
countries an equitable share of raw materials or an equitable
approach to world markets, with the result that the rival powers
fought with tariffs and cartels and currency rules for the trade
of a shrinking planet. Nor had any machinery been devised to assure
an equitable distribution of wealth, and the maldistribution of
purchasing power created needy and depressed classes and famine
stricken peoples.
Before its first quarter had ended, the twentieth century revealed
itself as a century of deeper violences and sharper vicissitudes
than the nineteenth had been. The difference could not be blamed
upon any check in material progress and prosperity. In spite of
the loss and destruction of World War I the peoples of Europe
in 1925 had higher living standards, greater wealth, and a longer
life expectancy than they had fever known. But their mood, their
methods of government, their political morality had declined since
the halcyon years of the long peace, 1871-1914.
If material prosperity and the progress of science could have
assured a stable society, the United States should have held a
secure and tranquil population. America led the world in the parade
of inventions, discoveries, and technological achievements wherewith
science has enriched the life of man. The years 1900-1939 brought
a 73 per cent gain in the American population, multiplied 4000
automobiles into 4,000,000, equipped 23,000,000 homes in the land
with electric light, popularized the motion picture and radio,
developed the airplane and other mechanical wonders, and raised
the standard of living, of leisure, of income, and of education
to levels unimagined a few generations earlier.
Such achievements might well have filled the American people with
a mood of sturdy self-confidence. They did breed a mood of confidence
between 1920 and 1929, but it was not a sturdy mood. All the proof
of power, the nimble machines which gave each American the services
of a score of energy-slaves, failed to equip the citizens of the
United States with the faith to meet an economic reverse with
firmness.
The stock market collapse of 1929 induced a panic which unsettled
the nerves of the nation, and American despondency magnified the
wave of depression already traversing the globe. If the American
people could not have a resolute confidence in that machine age
which had bestowed upon them its richest blessings, what confidence
could less fortunate nations be expected to display?