Lords of Finance最新章节_Liaquat Ahamed著

1. PROLOGUE

What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914!

—JOHN MAYNARD KEYNES, The Economic Consequences of the Peace

IN 1914, London stood at the center of an elaborate network of international credit, built upon the foundations of the gold standard. The system had brought with it a remarkable expansion of trade and prosperity across the globe. The previous forty years had seen no big wars or great revolutions. The technological advances of the mid-nineteenth century—railways, steamships, and the telegraph—had spread across the world, opening up vast territories to settlement and trade. International commerce boomed as European capital flowed freely around the globe, financing ports in India, rubber plantations in Malaya, cotton in Egypt, factories in Russia, wheat fields in Canada, gold and diamond mines in South Africa, cattle ranches in Argentina, the Berlin-to-Baghdad Railway, and both the Suez and the Panama canals. Although every so often the system was shaken by financial crises and banking panics, depressions in trade were short-lived and the world economy had always bounced back.

More than anything else, more even than the belief in free trade, or the ideology of low taxation and small government, the gold standard was the economic totem of the age. Gold was the lifeblood of the financial system. It was the anchor for most currencies, it provided the foundation for banks, and in a time of war or panic, it served as a store of safety. For the growing middle classes of the world, who provided so much of the savings, the gold standard was more than simply an ingenious system for regulating the issue of currency. It served to reinforce all those Victorian virtues of economy and prudence in public policy. It had, in the words of H. G. Wells, “a magnificent stupid honesty” about it. Among bankers, whether in London or New York, Paris or Berlin, it was revered with an almost religious fervor, as a gift of providence, a code of behavior transcending time and place.

In 1909, the British journalist Norman Angell, then Paris editor of the French edition of the Daily Mail, published a pamphlet entitled Europe’s Optical Illusion. The thesis of his slim volume was that the economic benefits of war were so illusory—hence the title—and the commercial and financial linkages between countries now so extensive that no rational country should contemplate starting a war. The economic chaos, especially the disruptions to international credit, that would ensue from a war among the Great Powers would harm all sides and the victor would lose as much as the vanquished. Even if war were to break out in Europe by accident, it would speedily be brought to an end.

Angell was well placed to write about global interdependence. All his life he had been something of a nomad. Born into a middle-class Lincoln-shire family, he had been sent at an early age to a French lycée in St. Omer. At seventeen he became the editor of an English-language newspaper in Geneva, attending the university there, and then, despairing of the future of Europe, emigrated to the United States. Though only five feet tall and of slight build, he plunged into a life of manual labor, working in California for seven years variously as a vine planter, irrigation-ditch digger, cowpuncher, mail carrier, and prospector, before eventually settling down as a reporter for the St. Louis Globe-Democrat and the San Francisco Chronicle . Returning to Europe in 1898, he moved to Paris, where he joined the Daily Mail.

Angell’s pamphlet was issued in book form in 1910 under the title The Great Illusion. The argument that it was not so much the cruelty of war as its economic futility that made it unacceptable as an instrument of state power struck a chord in that materialistic era. The work became a cult. By 1913, it had sold more than a million copies and been translated into twenty-two languages, including Chinese, Japanese, Arabic, and Persian. More than forty organizations were formed to spread its message. It was quoted by Sir Edward Grey, the British foreign secretary; by Count von Metternich; and by Jean Jaurès, the French Socialist leader. Even Kaiser Wilhelm, better known for his bellicosity than his embrace of pacifism, was said to have expressed some interest in the theory.

Angell’s most prominent disciple was Reginald Brett, second Viscount Esher, a liberally minded establishment figure, and close confidant of King Edward VII. Though Lord Esher had been offered numerous high positions in government, he preferred to remain merely deputy constable and lieutenant governor of Windsor Castle while exerting his considerable influence behind the scenes. Most important, he was a founding member of the Committee of Imperial Defense, an informal but powerful organization formed after the debacles of the Boer War to reflect and advise on the military strategy of the British Empire.

In February 1912, the committee conducted hearings on issues related to trade in time of war. Much of the German merchant marine was then insured through Lloyds of London, and the committee was dumbfounded to hear the chairman of Lloyds testify that in the event of war, were German ships to be sunk by the Royal Navy, Lloyds would be both honor-bound and, according to its lawyers, legally obliged to cover the losses. The possibility that while Britain and Germany were at war, British insurance companies would be required to compensate the Kaiser for his sunken tonnage made it hard even to conceive of a European conflict.

It was no wonder that during a series of lectures on The Great Illusion delivered at Cambridge and the Sorbonne , Lord Esher would declare that “new economic factors clearly prove the inanity of war,” and that the “commercial disaster, financial ruin and individual suffering” of a European war would be so great as to make it unthinkable. Lord Esher and Angell were right about the meager benefits and the high costs of war. But trusting too much in the rationality of nations and seduced by the extraordinary economic achievements of the era—a period the French would later so evocatively call La Belle Époque—they totally misjudged the likelihood that a war involving all the major European powers would break out.