Crossroads (Toward Philippine social and economic progress)
Philippine Star, 14 November 2018


The program commemorating the 100th year after the ceasefire, or the end of the first World War last Monday (Nov. 11) in Paris mesmerized and resonated for those who remember the symbolism and danger of war.

A war of empires. World War I was fought mainly in the trenches and battlefields of Europe. The conflagration, however, was international in scope. It covered all the continents. Since the powers at war were empires in themselves, the outcome helped to reshape the world of empires.

Some empires enlarged (British, French and Belgian), others collapsed (German, Austro-Hungarian, Turkish). One big nation suffered a political revolution and also lost its empire (Russia). Many nations were born amidst the death of others. The political maps of Europe and of continents were redrawn after the war.

The Philippines was dragged into the war because it was then a part of the American empire in the Pacific. America’s expansion as a nation had experienced transformation into a world power by this time, but it was a limited empire with few possessions. The Philippines was its colonial bastion in the Pacific.

The United States entered the war during mid-course. Its friendly, but neutral, entanglement with England and France at the beginning of the war in 1914 finally had led it to war on their side against Germany by 1917.

War creates a major disturbance of demand for goods and produces price distortions as a result. World inflation in prices was an evidence of this disruption. As a colony of the United States, the impact of price changes in the United States would be transmitted to the colony easily.

This was through the expansion of demand for Philippine exports and through imports, which were mainly from the US. In those days, the country was already a major exporter of sugar, coconut products, tobacco, abaca and other primary goods. The demand for these increased in part because of a rise in demand by the US and other countries at war.

The US also experienced a high degree of inflationary forces as the war began and especially as it got embroiled in the war effort. The US Bureau of Labor Statistics, in reviewing its 100-year history of the US consumer price index (in 2014), observed the following:

“The year 1916 … saw rapid acceleration in the inflation rate…. The World War I era and its aftermath, 1917-1920, … produced sustained inflation unmatched in the nation anytime since. Prices rose at an 18.5 percent annualized rate from December 1916 to June 1920, increasing more than 80 percent during that period.”

In the textbook I wrote in 1983 (Economics, chapter 11, Fig. 11-1, p. 240), I tracked the Philippine wholesale price index against the US wholesale price index for almost the same period above. The path of the Philippine wholesale price index was like a shadow of the US index, making the two look like twins except for their respective levels. (The wholesale price index tends to be more volatile than the consumer price index, but they measure roughly the same items).

Philippine historians hardly note the country’s participation in the war. It was a war of the colonial master. Official reports of the war are tracked from the annual reports of the American governors-general.

At the outbreak of America’s entry in the war, the US seized alien property. Twenty-two German-owned vessels were confiscated, their crew taken prisoner, and the ships turned over to US government shipping control. Seven of the vessels were transferred for use in interisland shipping and in transport use in Asian trade.

The colonial administration was active in supporting the subscription to the Liberty bonds to finance the war. It also tried to raise funding to construct a destroyer and submarine to help in the war effort for the US Navy. Volunteers were encouraged to join the US Army and the Red Cross. (Tomas Claudio, who enlisted as a soldier, is enshrined as the first Filipino death in the war.) A Philippine militia was created by the US Congress and produced 25,000 members.

Indelible marks. In the course of years, three books on the First World War have made a deep impression me.

All Quiet on the Western Front (1928), by Erich Maria Remarque, a German novelist, wrote about a group of young men who were part of a squad, and who through the war, were decimated one by one. Their experience of war was universal, humanly tragic, real, fated, and senseless.

The Economic Consequences of the Peace (1919), by John Maynard Keynes, the economist, argued that the demand for reparations against Germany at the end of the war (Treaty of Versailles) were excessively punitive and would impoverish it to the point of inability to pay. That insight had foretold the failure of Germany to economically recover with honor and led to the rise of Hitler and the Second World War by 1939, 20 years after Versailles. After the end of the Second World War, the US Marshall Plan helped to bring up the losers to become prosperous again and to be able to pay reparations to neighbors on their own.

A Pity of War (1998), by Niall Ferguson, a contemporary historian of renown, has provocatively re-examined the war’s historical causes and consequences. The traditional interpretation of how the war spread was that the big powers were entwined in chains of alliances that inevitably engulfed them once the first fires of war had ignited. Yet the war’s spread took months before it became total.

Casualties of the two World Wars. The First World War’s casualties were astounding. The military casualties from this war ranged from 8.5 million to 10.8 million from both sides. Civilian casualties were a little less. Total casualties, both military and civilian, ranged from 16.2 million to 19.2 million.

The casualties from the second World War were more. Within the short period of time, the technology of war destruction became more efficient and the scope of war wider. Military casualties from World War II ranged from 21 million to 25.5 million; civilian casualties from 48 million to 58.5 million; and total casualties from 69 million to 84 million. The civilian casualties of the war were more than four times as many as the military!

The horror! The horror!