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2024 | OriginalPaper | Buchkapitel

5. On the Relief Problem

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Abstract

The years during which Keynes and his contemporaries were active saw the world endeavoring to restore the Pax Britannica which had collapsed as a consequence of the World War I. But this attempt proved in vain, and as confusion and division deepened, the world was engulfed by the World War II. In this scenario Keynes stood out as the figure who exerted the largest influence as economist, economic policymaker, and international system planner.

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Fußnoten
1
Leith-Ross visited Japan in 1935 seeking to persuade the Japanese government to take a cooperative position on the aid to China problem but in vain due to the army’s opposition. See Imamura (1948, pp. 237–8) and Tushima (1962, pp.252–7).
 
2
It should be noted that Acheson together with Clayton was to be a principal architect of the Marshall Plan, as is seen in his famous address of 1947 in Cleveland insisting that “a coordinated European economy … was a fundamental objective” (Behrman 2007, p.58).
 
3
See Chap. 7, Sect. 3.
 
4
In his contributions to the formation of the post-war world, Keynes persistently endeavored to create circumstances which would allow Britain to play as great a leadership role as possible. Inevitably, of course, the views of the US would predominate in the shaping of the post-war world order. It was Keynes who perceived this most bitterly, and it was on him that it weighed most heavily. As representative of the UK in many negotiations with the US, including those on the Anglo-American Mutual Aid Agreement of February 1942 and on the international monetary system, Keynes constantly took pains to secure Britain’s influence as much as possible.
 
5
In contrast to the relief problem, in which supplying countries can be clearly separated from receiving countries, in the case of the commodity problem it is possible to maintain an internationalist standpoint, irrespective of change in the situation of one’s own country, without serious sacrifice, the aim being merely stabilization of commodity prices.
 
6
If we accept the intention Keynes expresses here at face value, then it is difficult to understand subsequent developments. For, as shown later, he came to reject this plan when Britain’s financial position rapidly deteriorated.
 
7
In his letter to David Waley of 19 September 1941, Keynes disagrees with Leith-Ross, saying: “The worst and most muddled and most expensive and most inefficient solution would be to allow ourselves to be tackled by each commodity and each Ally separately without any picture of the whole scene, with Sir Frederick Leith-Ross busy and insistent to give away as much as possible and to make sure that our contribution shall be as large and the contribution of others as small as he can maneuver to make them” (JMK.27, p.45).
 
8
The main reason for this change is that the forecast that Britain would end the war with primary commodities in surplus crumbled around the end of 1941. Keynes had noticed that far from holding surpluses, Britain was sure to suffer from serious depletion of many commodities, in consequence of which she would surely suffer from an adverse balance of payments. Keynes’s change of mind led to a change in Treasury policy, where he had taken on the leading role in matters of policy and theory.
 
9
According to the Lend-Lease Act (March 1941), the US would supply munitions to the Allies with payment to be discussed later. Keynes played a central role in the negotiations, one result of which was the Anglo-American Mutual Aid Agreement (February 1942; for the ample material concerned, see JMK.23). In the negotiations, it was Acheson who represented the American side (See JMK.23, pp.171–8). Article VII (see p.175) of the Agreement which includes “discrimination” became a hot issue, for it indicated that the US would ask the UK to abandon the system of Imperial Preferences. Keynes tried to make compromise by the UK gradually abating “the extent of the Imperial Preferences in practice without abandoning them in principle” (JMK.23, pp.203–04). This shows a final power struggle between the two Great Powers. Lend-Lease was later extended to other countries, including the Soviet Union. Harry White and Lauchlin Currie were very earnest about applying it to the Soviet Union (see Skidelsky 2000, p.243), both disliking British imperialism.
The British Empire received 30 billion dollars (65 percent, munitions; 10per cent, shipping; 25 percent, food and a wide range of goods: see Sayers 1956, p.546)—of which only 6 billion dollars were repaid. During the period from 1941 to the first half of 1945 the British Empire got munitions worth 20.7 billion dollars from the United States: 3.2 billion dollars in the form of purchase and 17.5 billion dollars in the form of Lend-Lease (see Sayers 1956, p.551). For Lend-Lease, see Sayers (1956: Chapter 13).
 
10
In January 1942 Canada agreed to provide the United Kingdom with the “billion dollar gift” (Sayers 1956, p.343).
 
11
Evidently, Keynes rejected the CRRF Plan on the grounds that it would deprive Britain of her right of discretion.
 
12
“It would mean that we might be deprived of supplies necessary for exports just at the moment when the development of exports is essential to our national life” (JMK.27, p.69).
 
13
K. Wood, Post-War Relief Policy, 2 June 1942 (Department of Economics Library, University of Tokyo, No.87). The rival plan was H. Dalton, Post-War Relief Policy, 22 May 1942 (op. cit., No.86). The Committee met on 3 June.
 
14
“I speak of a confusion of mind because it entirely ignores the special problems of a country like ourselves which, unless it is to go on living permanently on charity, must develop its exports. The principle suggested would mean that we could have no raw materials for export trade until, e.g., Poland has been put in an entirely similar position” (JMK.27, p.75).
 
15
This was set up by Britain and the United States alone. The Combined Boards were to act with more authority in the United Nations Relief and Reconstruction Administration than those in Keynes’s plan here. The Boards as composed of Britain and the United States alone concerned Canada, which claimed participation in such international organization (Sayers 1956, p.348).
 
16
White is famous above all as the main architect of the IMF. For his activities in the 1930s at Harvard, see Laidler and Sandilands (2002).
 
17
“The really right thing to do is to liquidate UNRRA and thus release our contribution to them, which in spite of its size, looks most unlikely to pull its weight. So far UNRRA is the world’s greatest flop, and I see little likelihood of its recovering” (JMK.27, pp.94–5).
 
18
“The whole of the above” suggests twelve items with which the relief problem was faced. These are categorized according to our interpretation of Keynes’s assessments as follows:
I
Items for which UNRRA does nothing:
(a)
Items utterly unresolved: relief in Germany; relief in Austria; relief in Italy after the end of the military period; relief in Italy after the exhaustion of the present limit of the amount for the military period; and the Balkans during the military period after the limit has been reached.
 
(b)
Item which has escaped UNRRA’s control because its purpose was suspected to be policing the countries concerned: the paying Western Allies.
 
(c)
Item which UNRRA is not asked to undertake: relief in liberated British territories in the Far East.
 
(d)
Item still in the future: relief in other Far Eastern territories.
 
 
II
Items which UNRRA either undertakes or is committed to undertake:
(a)
Item which UNRRA undertakes to some extent, but not satisfactorily: refugees and displaced persons.
 
(b)
Item which UNRRA undertakes in theory: sanitation and health services.
 
(c)
Item which UNRRA is committed to undertake: the Balkans after the military period.
 
(d)
Item for which UNRRA is expected to do something: relief in Poland and other territories under Russian occupation.
 
 
 
19
“The next step in the argument would be to limit narrowly the list of countries which look likely to be fairly strong candidates for post-UNRRA relief. I think most of us agree that these are Italy, Austria and Greece But I am inclined to think that the only hope is along very much the lines that you obviously have in mind, namely, that Italy and Austria should become American responsibilities, whilst we, if necessary, should take any responsibility we can manage for Greece” (JMK.27, pp.100–01).
 
20
UNRRA was headed by a Director-General and governed by a Council composed of all states and a Central Committee composed of the US, UK, China, and the USSR. UNRRA had a serious problem in relation to Russia’s influence on Eastern and Central Europe (Behrman 2007, p. 51). Its functions were transferred to United Nations institutions such as the International Refugee Organization and UNICEF.
 
21
Skidelsky (1983, p.91) states that “throughout his [Keynes’s] life he assumed the Empire as a fact of life and never showed the slightest interest in discarding it. … He never much deviated from the view that … it was better to have Englishmen running the world than foreigners”.
 
22
This is also seen in “Overseas Financial Policy in Stage III” (May 1945; JMK.24, pp.256–95) in which he appeals to how “in [loan] negotiation [with the USA] should both feel and appear sufficiently independent only to accept arrangements that we deem acceptable” (p.257).
 
23
In passing, the item “Imperialism” is not to be found in the JMK vol. 30 index.
 
24
Imperialism has two facets. There is the will to expand territorial boundaries as much as possible and there is the will to defend the territory once occupied. If Keynes was indeed an imperialist, it was in the latter respect (as, so to speak, a “defensive imperialist”). In the interwar years, albeit with weakened position, the British Empire remained the dominant player in world politics.
 
25
His stance on the Munich Agreement (September 1938) shows this feature quite strikingly as well. See “A Positive Peace Programme” (New Statesman and Nation, 25 March 1938) in which constitution of a “European League” is advocated (JMK.28, p.100) and “Mr Chamberlain’s Foreign Policy” (New Statesman and Nation, 8 October 1938), in which he refers to “[t]he attraction of this politik to ourselves is obvious. Our sea-power and our overseas Empire remain for the present unchallenged” (JMK. 28, p.126).
 
26
The outbreak of the Pacific War and the occupation of Southeast Asia by Japan at about this time radically changed the global situation. Britain’s colonies in Southeast Asia fell to the Japanese Army. The US declared itself at war with Japan, as a result of which American influence among the Allied countries became the decisive factor in all considerations regarding the future world order.
 
27
He advocated “New Liberalism”. However, his political activities took a convoluted path, reflecting the political situation then reigning in the UK. For this, see Dostaler (2007, Ch.4).
 
28
The law concerned is the Foreign Assistance Act of 1948. The total sum of aid to the OEEC, composed of 15 countries, amounted to 13 billion dollars, 89 percent of which was gratis. Although it ended in 1951, it was the starting point of the long road which led eventually to the European Union.
 
29
The total sum of aid from 1946 to 1951 reached 1.8 billion dollars (1.3, gratis; 0.5, repaid).
 
30
It seems unfair to regard the Marshall Plan as the victory of capitalism over communism, for the Marshall Plan itself was based on elaborate planning, not leaving everything to the free working of the market and the free activities of enterprises. It is true that the Marshall Plan granted room for the market and enterprises, but it was subject to the great international design. Hubbard and Duggan (2009) regard the Marshall Plan as a “business model”—a sort of software setting the poorer nations on track for prosperity. The business model here is, in our view, an international design for promoting business, different from laissez-faire capitalism.
 
31
According to Markwell (2006, p.267) no direct evidence can be found, though the ideas which influenced the Marshall Plan were in the air.
 
32
Let us consider Keynes’s contemporaries in terms of politics and social philosophy. Ralph Hawtrey disliked and criticized Imperialism from an ethical point of view, saying that it rested on “false ends”. His unpublished book, Right Policy, deals with Imperialism in various places. The key concept with regard to the world view for Hawtrey was the “Balance of Powers”. A world comprising independent states might be described as a kind of “International Anarchy”, which cannot bring about peace. He emphasized the importance of “Peaceful Coexistence” through the concert of Great Powers (see p.522; Hawtrey Papers, Churchill College, University of Cambridge). Leonard Woolf, who advocated an idea of international government for the Labour Party, criticized Imperialism. “In many ways [Leonard] assumed Hobson’s mantle as Britain’s foremost anti-imperialist theorist” (Wilson 2003, p.83). E.M. Forster, who expressed his attitude with “two cheers for democracy”, disliked the existence of power.
It should be noted, however, that as far as social philosophy is concerned the four distinguished economists of the Cambridge School—Keynes, A.C. Pigou, D.H. Robertson and Hawtrey—tended to concur, all taking a critical attitude towards capitalistic society as it stands, deeming it in need of being rectified. This is to be the main theme of Part III of the present book.
 
Literatur
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Metadaten
Titel
On the Relief Problem
verfasst von
Toshiaki Hirai
Copyright-Jahr
2024
DOI
https://doi.org/10.1007/978-3-031-40135-0_5