Nature's Evil

Observing events, Keynes asserted that the prices of raw materials were more volatile – changing more abruptly and more frequently – than the prices of manufactured goods, which incorporate the regulated value of labour. In 1938, Keynes analysed the commodity prices over the previous ten years: the price of rubber was notoriously unstable, and every year it fluctuated, on average, by 96 per cent between maximum and minimum; but wheat also fluctuated by 70 per cent every year, and even cotton by 42 per cent. Keynes saw this volatility as a major evil. It could lead to a recession or war and should be averted by international control. For this purpose, in 1942 he proposed to create a new organisation under the auspices of the League of Nations, which he named the Commod Control. Referring to the ancient Chinese concept of the ‘ever-normal granary’, Keynes revealed the historical roots of his idea. The Commod Control would have been much more than a cartel; this organisation would have had its own storage facilities and special executive committees for every commodity – a rubber committee, a wheat committee, etc. These committees would have defined commodity prices, storage levels and national quotas; the price fluctuations would have been locked within 20 per cent, with price corridors reconsidered annually. The rest of the economy would have stayed free of administrative control. Essentially, Keynes was thinking about a bicameral economy, which would have kept a relatively free trade regime for wages (though they would have been controlled by trade unions) and the products of labour but would have established a global government run the primary commodities. Its ‘buffer stocks’ of raw materials would have prevented economic cycles. Responding to criticisms, Keynes agreed that his plan overlapped partially with what the Soviet and even the Nazi authorities proposed to do with the global economy if they had won their wars. 19

The Commod Control was never implemented, but Keynes’s predictions about the disastrous consequences of the Versailles Treaty were fulfilled. Hitler in his early days, while in prison in Munich, started to plan the colonisation of Poland and Ukraine. Deprived of her colonies and hungry for raw materials, Germany would have to acquire new ‘Lebensraum ’ – living space, colonial lands – in Eastern Europe. Hitler was particularly interested in grain. Even coal, also forfeited by Germany under the Versailles Treaty, worried him less than grain. In his early writings he barely mentioned oil, which would later define the course of his war. Hitler imagined himself the successor of Frederick the Great, patron of science and crafts. But he didn’t believe in science and, later, considered nitrogen fertilisers as some nonsense invented by Jews. He didn’t believe in trade either, thinking that this nonsense was invented by the British. ‘Our Mississippi will be the Volga, and not the Niger,’ said Hitler: the American method of acquiring Lebensraum by quick and brutal means was the ideal that was to be reproduced in the expanses of Eurasia. Appropriating the idea of internal colonisation developed under Bismarck, Hitler dreamt of a new frontier that German settlers would create in the centre of the continent. The Jews would be exterminated, while the Slavs in this internal America would be as submissive as the ‘Indians’. Supplying the fatherland with raw materials, German settlers would move the frontier further to the east as needed.

In the interwar period Germany did have resource difficulties that were created by the Versailles Treaty. Creating poverty and unemployment, the loss of the coal basins in the Ruhr, the shortage of metals and the food crisis helped Hitler’s rise to power. But his colonial vision was at odds with his own interests. 20 Even if he confiscated all stocks of Polish and Ukrainian wheat, they could not replace the other resources that were necessary for the German Reich – oil, rubber, cotton and much else. Direct rule over the Soviet expanses would have involved resettling millions of Germans there and supplying them with provisions. Meanwhile, right up to the very beginning of the German–Soviet war, the Soviet Union diligently supplied Germany with every possible sort of raw material – grain, timber, oil, fur, cotton, coking coal, iron ore, rare metals – in exchange for ready-made goods and weapons produced by German industries. Trade was free in the sense that the German and Soviet representatives chose goods, bargained and signed contracts on the basis of world prices. There is no doubt that Stalin provided Hitler with more resources than Hitler could have extracted from occupied territories. Until the Nazis attacked the Soviet Union and deprived themselves of their source of supplies, they had no grounds for a resource panic. Trade is cheaper than war, but dictators never understand that. Their panic is a false but self-fulfilling prophesy.

Notes