How Much Can Germany Pay?

Abstract

DURING the war the public has learnt very little about politics and very much about economics. Accordingly, there has been no repetition of the French Finance Minister Klotz's famous statement: Le Boche paiera tout. At one time during the war the reaction to this dictum went to an even more absurd opposite extreme of believing that are neither desirable nor possible. lesson in economics learnt during the war, however, yielded some fruit in the last two years and another opinion has gradually crystallized. The amount of reparation payable depends entirely on the way in which payments are made. Confusion will result if they are made in money, but almost any amount is possible if we provide for reparations in kind. Reparations are entirely a question of organization. statement is the more dangerous because it is quite true. But it is a truth the implications of which are not usually realized. Germany and all the recipients of reparation payments (the U.S.S.R., United Kingdom, France, Eastern Europe, etc.) were fully planned economies on the Russian model, almost any amount of reparation payments in kind' could be made. It would only be a simple technical problem of how much and what kind of goods Germany should produce, how much should be left to the Germans, and how much should be taken from Germany by the various receiving countries. the receiving countries had planned economies, which were independent of the price mechanism, they could easily be organized to receive the amount of goods allocated on reparation account. the whole world economy were planned, there would be no problem. An Austrian dictum is an appropriate comment on that: If my aunt had wheels she would be a tram. whole world economy will not, however, be fully planned-at any rate within the relevant period of the next ten to twenty years. There will be different degrees of control in the Atlantic hemisphere (more in the United Kingdom and in Europe than in the United States); there may be a planned economy in Eastern Europe, though even there it is by no means certain; and there will be, let us hope, a more tightly controlled economy in Germany, but hardly a fully planned economy. Not only do the Allied Nations not desire it, but even if they did they would be utterly unable to organize it. Any sensible discussion of how much Germany can pay must proceed on