The Third World War - August 1985

by John Hackett

  4 It is therefore important for us in the EEC to see that the sort of Europe we rebuild during this peace should not be one liable to ‘tribal wars’.

  5 The rest of Europe, both East and West, will be frightened if the two Germanies unite. They would then form too dominant a European power. It is therefore important that each Germany should be a member of the EEC, and be united within the EEC to the same degree as France and West Germany are, but no more than that.

  6 The same applies to all the former communist states, including the European states of the former Soviet Union. The EEC now needs to extend its boundaries in the way that Charles de Gaulle once envisaged. The European Economic Community should become a Europe from the Atlantic to the Urals.

  This document was accepted at Copenhagen with some relief by the governments concerned, including that of the Federal Republic of Germany. Charles de Gaulle was now seen in retrospect as a prophet, where in life he had more often been regarded as a prickly and tiresome man. Two new issues were strenuously discussed at Copenhagen. One concerned the best rules and aims for the new, enlarged EEC; on this there was a note of innovation, excitement, enthusiasm and intellectual daring - an attractive throwback to the European spirit of the late 1950s which had seemed to be sleeping since. The second issue was what on earth to do about the politico-strategic problems on the long southern border of the new EEC; on this there was a note of near-despair.

  First, the governing mechanism of the new EEC. It was recognized that free trade in goods, though to be continued, was likely to be much less important to rich countries in the future than freedom for international and transnational telecommunications. Now that factories (except in low wage areas) were bound to become more and more automated, people in the rich northern one-third of the world would mostly be in white collar jobs where they would be working with their imaginations rather than their hands. But people in such jobs would not necessarily need to live near their workplaces. What should be the nationality and tax position of a Belgian dress designer who lives in Monte Carlo and St Moritz in the winter, at Stratford-on-Avon in the spring, and Corfu in the summer, and does his work by daily telecommunication through a portable console to colleagues and computers at the largely automated textile factory at Volgograd where he works - who becomes, in fact, a tele-commuter?

  The EEC ministers at Copenhagen began to grope towards the concept that the European citizen of the future would need what the West German Chancellor called ‘triple nationality’, but the Luxembourg Prime Minister significantly called ‘triple tax status’. Let us use the Luxembourg terminology; it is more novel and, for that reason, in this fast-changing world, easier to understand.

  First, each.citizen would have to pay some taxes to the area in which he lived; this would maintain purely local government services there. There is here the obvious danger that all the rich might then choose to live together in areas with low social security costs (because there were few local poor around) and thus low tax rates, while the poor might find themselves huddled together in areas which needed a lot of social expenditure but with no local rich to pay the taxes. In order to avoid this ‘ghettoization of continents’ in the telecommuting age, the ministers at Copenhagen were beginning to realize that much wider governments (in this case, a central government of the EEC itself) would probably have to become responsible for what might be called the ‘welfare’ or ‘transfer incomes’ roles performed by national governments in the pre-telecommuting era.

  Otherwise, rich folk would all take off to tax havens, and telecommute from there. So there would probably have to be a set schedule of income tax rates across Europe: perhaps a maximum marginal rate of not more than 55 per cent for the richest and a negative income tax for those falling below a minimum level, so as to set a floor income for the poorest Europeans.

  It would not be sensible for Monte Carlo to be able to declare itself a tax haven and for all rich telecommuters to congregate there, while the poor of Europe congregated in some decaying old city like, say, Warsaw, which might then become the ‘welfare capital’ or ‘muggers’ capital’ of Europe.

  It would therefore be advisable to have a European regional policy. One object: to attract more rich telecommuters into the troubled old cities like Warsaw so as to get a better social mix there (therefore, allow the inhabitants of Warsaw to pay a lower top tax rate on incomes above a certain size). Concurrent object: to persuade some of the poor to scatter from Warsaw to other areas. This would involve a direction that unemployed youngsters going on to social security would after a certain period get lower social security benefits in Warsaw than if they moved to seek jobs outside it.

  Already in the 1970s New York City was suffering from not being able to implement a policy of this sort. High local taxes and crime rates meant that richer taxpayers were fleeing the city, leaving behind a city electorate that became poorer and so more left-wing, and voted itself larger welfare benefits which it could not pay for. The higher welfare benefits in New York City then attracted more welfare families in. There would be a spreading of this sort of vicious circle right across the world in the telecommuting age (and also of the twin problem of rich tax havens) unless regional policies of this type could be put in train.

  The third leg of the European citizen’s ‘triple tax status’ would then be the leg of the nationality on which he chose to stand. There is the advantage that each person could, within reason, choose which this should be. National governments need no longer rule over purely contiguous groups of people. The problem of Belgium has long been that one part of the people has regarded itself as Flemish, the other as Walloon. With the tripartite system it should be possible for the Flemish to elect their own governments (for systems of family law, for cultural issues, including education, and for other representational matters) even while living amid the Walloons, who could similarly elect their own government. The same would apply to Catholics and Protestants living together in Northern Ireland and to the provinces of Yugoslavia, and, so long as national government diminishes in importance in this way, it might eventually be possible for the two Germanies to have a joint unimportant national government of the same kind.

  It is probable that in the telecommuting age all areas of the world will eventually have to move to tripartite systems of this sort: with (a) continental-sized governments to pursue regional central tax policies in order to prevent some tax havens becoming ghettoes of the rich and some inner cities ghettoes of the poor; (b) very local governments, which could eventually become as small as particular groups of citizens wanted them to be (so that people who wanted to live in a commune and telecommute from it could set that commune up as a unit of administrative local government if neighbours agreed, while at the other extreme other groups might prefer to employ a commercial company on a performance contract to carry through administrative local government tasks rather than pretend that, for example, voting Republican or Democratic was the right way of getting a mayor who would be best fitted to find the most successful changing technology for operating New York’s drains); and (c) national governments that would have a diminished role over their peoples, who would not necessarily live contiguously.

  The EEC at the end of the Third World War seemed lucky in being well placed to set up a prototype for this tripartite system, when it should be needed. One problem concerned the capital city or cities for the new Europe. It had been argued even before the war that the existing city of Brussels was too crowded for this purpose, and also, strangely, too central. A central city as a capital now means that centripetal forces become too strong, so that the central area grows richer and the flanks too poor. Even by the 1970s there had been grounds for arguing that the best scheme would be to have twin cities nearly a continent apart as capitals, joined by close telecommunication links and with great data banks planned from scratch for the new information age. A sentimental opportunity now presented itself. It was the Dutch Prime Minister who suggested at Copenhagen that the custom-built capita
ls of the new Europe should be Peace City West and Peace City East, built on the former sites of Birmingham and Minsk.

  One of the most important functions of government is the organization of military preparedness and defence. Much of this should be organized on a continental scale. The new Europe felt reasonably confident that it could avoid internal tribal wars. But it regarded the chaos emerging on its southern boundaries with sickened alarm.

  The two most worried reflections at Copenhagen were: ‘the world is now divided into three parts, and the EEC is perched on top of the wildest south’; and ‘unfortunately, the earth is round’.

  Many people expect the China-Japan co-prosperity sphere (including Australasia) to be the future centre of the world. Japan is rapidly becoming the most advanced country technologically. China has the largest literate labour force, and as this is still relatively underpaid in comparison with its ability and entrepreneurial drive it therefore has the fastest early capacity for growth. Australia and the islands to its north will be among the pleasantest places in which to live during the telecommuting age. No part of this area was invaded in the Third World War, though a great many Australians and New Zealanders fought as volunteers on the Allied side and in Southern Africa, and many more were on their way to Europe when the few weeks of full hostilities came to an end. The parts of the China-Japan co-prosperity area that may still be ravaged by coups d’état and urban guerrilladom (Indonesia? Thailand?) are relatively small, and should prove controllable - especially (and this is worrying) as Japan and China may be more willing than others to ‘cure’ or ‘control’ violent individuals with personality-changing tranquillizing drugs.

  The second main area of the world is the Americas. North America was undamaged by the Third World War just as it had been by the First and Second. The main economic effect of war and post-war reconstruction has been (as in 1941-45) to restore it to full employment. South America has prospered, and communism has been overthrown in the Caribbean. It is about as popular to advocate Soviet-style communism in the Caribbean (including Cuba and Jamaica) in these late 1980s as it was to advocate Nazism in continental Europe in the late 1940s. For a time, at least, urban guerrilladom in the Americas is likely to be on the decline.

  The problem area is the territory to the south of the new EEC. On the western side of its long southern border, Africa has become a dumping ground for every sort of surplus military weapon used in the late war; its tribal hatreds are still seething; it may be entering a new dark age. Perched on its southern rim are the triumphant white homelands of South Africa. During the years 1988-2013 they may feel as self-confident after military success as Israel did in 1948 and 1967, offering some of the same attractions but posing some of the same problems.

  China-Japan is likely to co-operate with Australasia to its south, in order to help bring humane and sensible telecommuter-era government to the troubled areas between them. Some of their joint methods of neo-gunboat diplomacy will be called neo-colonialism; but as they will be a multi-racial partnership they will get away with a lot. North America may co-operate similarly with Brazil, to create its own north-south axis and an area of prosperity between them.

  There will be a school of thought that thinks that the new EEC should ally itself with white South Africa, as China-Japan with Australia, and the United States with Brazil. But the EEC might then find that it had made racial problems in its ‘wild south’ even more likely to bring riot upon itself.

  At the eastern end of Europe’s southern border, none of the problems of the Middle East has been resolved. An EEC’s southeastern border would lie on the Caspian Sea, including a short land frontier with triumphant Iran.

  As Iran has been on the winning side, it may have temptations to extend a new Persian empire across Arabia. There will be fierce resistance if this is attempted. This uncovers two other problems: first, the fact that Iran is now the cockpit between the China-Japan and EEC spheres of interest; second, the question of how long Middle Eastern oil is likely to remain important.

  While Iran’s western border is with Iraq and the Gulf, its north-eastern border is with the Asiatic republics of the former Soviet Union, now under Chinese influence, and its south-eastern border is with Pakistan. India-Pakistan was not a scene of fighting in the war; the new generation of youngsters coming out of its schools is the first generation to be almost entirely literate (like the first generation of literate Chinese to emerge from their schools fifteen years ago, and look how they’ve progressed); some people therefore expect rapid economic development in India-Pakistan at last. Some trends suggest it may become the manufacturing area for the China-Japan co-prosperity sphere, the place to which that rich area devolves its pollutant heavy industries. This may be especially likely if nearby Middle Eastern oil remains an important industrial fuel.

  There could be a paradox here. The Japanese remember all too well that, on the day in 1941 when they started their war with the United States, a paper before the imperial government had said that war was necessary because of the coming shortage of oil. In that December of 1941 Japan had a reserve of oil sufficient for its needs for a few months ahead; the Japanese government believed that it would never have so much oil again unless it seized control of the oilfields of Indonesia and perhaps Burma. Thirty years later oil supplies from Indonesia and Burma were much less important than anybody had forecast. Though Japan had been defeated, Japanese industry was using every six hours an amount of oil equal to the entire stock that Japan held on Pearl Harbor day. It was buying it easily from temporarily glutted supplies in the Middle East.

  The 1985 war also owed its start partly to fears on the part of the great nations that they would face penury unless they could secure physical possession of oil-producing areas. One remembers the competition run in 1920 by an Austrian newspaper for the most dramatic conceivable newspaper headline. The winning entry was ‘Archduke Franz Ferdinand alive. World war fought by mistake.’

  The history of energy supplies during the recent conflict has raised some question as to whether, in relation to the ‘oil shortage’, that sort of headline may not now be proved apposite.

  The areas that have increased their industrial production most in recent years (Japan-China and South America) were cut off from imported supplies of oil when the 1985 war broke out. Each had accumulated large reserve stocks before the war and the war was far shorter than they expected. They got by with ease. The Japanese, who are now the world’s most advanced technicians and who had feared that the impeding of oil supplies from the Middle East might prove much longer-lasting, have progressed dramatically with experiments on the thousands of possible other ways of releasing energy from storage in matter. This does not apply simply to nuclear, solar, wave and geothermal energy, but also to, for example, creating artificial rain in large tanks by allowing warm air above sea water to rise through deliberately cooled upper air and getting hydro-electric power from that. Also, the protests of environmentalists against nuclear fission have diminished since the war, and nuclear fusion is at hand.

  One must beware of any forecasts about fuel supplies now the war is behind us. In February of 1947, during the Shinwell fuel crisis, Britain’s Prime Minister, Clem Attlee, said that no coal miner need fear for his job for the rest of the century. Within twelve years, a majority of the then existing coal mines in Europe and Japan had closed down. The forecast ‘oil-short 1990s’ may prove like that. The Middle East may, like the coal-mining districts at the end of the coal age, have tragically priced itself into standards of living it will no longer be able to afford. Or it could still prove for some years (as many people suppose) to be the main supply area for a valuable and depleted natural resource.

  In either event, the Middle East is not going to be a comfortable southern neighbour for the new EEC. If oil is still scarce, there will be a jockeying for positions there. If the area is going to be poorer than it has grown accustomed to thinking it has a right to be, there may be constant coups d’état. It became f
ashionable in the 1970s and early 1980s to suppose that a main object of diplomacy would always be to make good friends of the rulers of Iran and the Arab oil countries. But billionaire shahs and sheikhs are not likely to be the most popular folk heroes for the last decade of the twentieth century.

  After each major war this century, a great empire has melted away. After the 1914-18 war, the defeated Austro-Hungarian empire. After the 1939-45 war, the victorious British empire. After the 1985 war, the defeated Soviet Union. That last is the only result of the late war that can be accounted as certain so far. For the rest, the most accurate prophecies could prove to be the ones that seem least likely now.

  There is a nice story of a political prophet in Munich in 1928, who was asked to prophesy what would be happening to the burghers of his city in five, fifteen, twenty and forty years’ time. He began: ‘I prophesy that in five years’ time, in 1933, Munich will be part of a Germany that has just suffered 5 million unemployed and that is ruled by a dictator with a certifiable mental illness who will proceed to murder 6 million Jews.’

  His audience said: ‘Ah, then you must think that in fifteen years’ time we will be in a sad plight.’

  ‘No,’ replied the prophet, ‘I prophesy that in 1943 Munich will be part of a Greater Germany whose flag will fly from the Volga to Bordeaux, from northern Norway to the Sahara.’

  ‘Ah, then you must think that in twenty years’ time, we will be mighty indeed.’

  ‘No, my guess is that in 1948 Munich will be part of a Germany that stretches only from the Elbe to the Rhine, and whose ruined cities will recently have seen production down to only 10 per cent of the 1928 level.’

  ‘So you think we face black ruin in forty years’ time?’

  ‘No, by 1968 I prophesy that real income per head in Munich will be four times greater than now, and that in the year after that 90 per cent of German adults will sit looking at a box in a corner of their drawing rooms, which will show live pictures of a man walking upon the moon.’