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.There is only one head under which I see a possibility ofadding to the figure reached on the line of argument adoptedabove; that is, if German labour is actually transported to thedevastated areas and there engaged in the work of reconstruction.I have heard that a limited scheme of this kind is actually inview.The additional contribution thus obtainable depends on thenumber of labourers which the German government could contrive tomaintain in this way and also on the number which, over a periodof years, the Belgian and French inhabitants would tolerate intheir midst.In any case, it would seem very difficult to employon the actual work of reconstruction, even over a number ofyears, imported labour having a net present value exceeding (say)£250 million; and even this would not prove in practice a netaddition to the annual contributions obtainable in other ways.A capacity of £8,000 million or even of £5,000 million is,therefore, not within the limits of reasonable possibility.It isfor those who believe that Germany can make an annual paymentamounting to hundreds of millions sterling to say in whatspecific commodities they intend this payment to be made, and inwhat markets the goods are to be sold.Until they proceed to somedegree of detail, and are able to produce some tangible argumentin favour of their conclusions, they do not deserve to bebelieved.(56*)I make three provisos only, none of which affect the force ofmy argument for immediate practical purposes.First: if the Allies were to 'nurse' the trade and industryof Germany for a period of five or ten years, supplying her withlarge loans, and with ample shipping, food, and raw materialsduring that period, building up markets for her, and deliberatelyapplying all their resources and goodwill to making her theGet any book for free on: www.Abika.com THE ECONOMIC CONSEQUENCES OF THE PEACE82greatest industrial nation in Europe, if not in the world, asubstantially larger sum could probably be extracted thereafter;for Germany is capable of very great productivity.Second: whilst I estimate in terms of money, I assume thatthere is no revolutionary change in the purchasing power of ourunit of value.If the value of gold were to sink to a half or atenth of its present value, the real burden of a payment fixed interms of gold would be reduced proportionately.If a goldsovereign comes to be worth what a shilling is worth now, then,of course, Germany can pay a larger sum than I have named,measured in gold sovereigns.Third: I assume that there is no revolutionary change in theyield of nature and material to man's labour.It is notimpossible that the progress of science should bring within ourreach methods and devices by which the whole standard of lifewould be raised immeasurably, and a given volume of productswould represent but a portion of the human effort which itrepresents now.In this case all standards of 'capacity' would bechanged everywhere.But the fact that all things are possible isno excuse for talking foolishly.It is true that in 1870 no man could have predicted Germany'scapacity in 1910.We cannot expect to legislate for a generationor more.The secular changes in man's economic condition and theliability of human forecast to error are as likely to lead tomistake in one direction as in another.We cannot as reasonablemen do better than base our policy on the evidence we have andadapt it to the five or ten years over which we may supposeourselves to have some measure of prevision; and we are not atfault if we leave on one side the extreme chances of humanexistence and of revolutionary changes in the order of Nature orof man's relations to her.The fact that we have no adequateknowledge of Germany's capacity to pay over a long period ofyears is no justification (as I have heard some people claim thatit is) for the statement that she can pay ten thousand millionpounds.Why has the world been so credulous of the unveracities ofpoliticians? If an explanation is needed, I attribute thisparticular credulity to the following influences in part.In the first place, the vast expenditures of the war, theinflation of prices, and the depreciation of currency, leading upto a complete instability of the unit of value, have made us loseall sense of number and magnitude in matters of finance.What webelieved to be the limits of possibility have been so enormouslyexceeded, and those who founded their expectations on the pasthave been so often wrong, that the man in the street is nowprepared to believe anything which is told him with some show ofauthority, and the larger the figure the more readily he swallowsit.But those who look into the matter more deeply are sometimesmisled by a fallacy much more plausible to reasonable persons.Such a one might base his conclusions on Germany's total surplusof annual productivity as distinct from her export surplus.Helfferich's estimate of Germany's annual increment of wealth in1913 was £400 million to £425 million (exclusive of increasedmoney value of existing land and property).Before the war,Germany spent between £50 million and £100 million on armaments,with which she can now dispense.Why, therefore, should she notGet any book for free on: www.Abika.com THE ECONOMIC CONSEQUENCES OF THE PEACE83pay over to the Allies an annual sum of £500 million? This putsthe crude argument in its strongest and most plausible form.But there are two errors in it.First of all, Germany'sannual savings, after what she has suffered in the war and by thepeace, will fall far short of what they were before and, if theyare taken from her year by year in future, they cannot againreach their previous level.The loss of Alsace-Lorraine, Poland,and Upper Silesia could not be assessed in terms of surplusproductivity at less than £50 million annually.Germany issupposed to have profited about £100 million per annum from herships, her foreign investments, and her foreign banking andconnections, all of which have now been taken from her
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