re of the Empire, the Federal States, and the Communes in
1919-20 is estimated at 25 milliards of marks, of which not above 10
milliards are covered by previously existing taxation. This is without
allowing anything for the payment of the indemnity. In Russia, Poland,
Hungary, or Austria such a thing as a budget cannot be seriously
considered to exist at all.[154]

Thus the menace of inflationism described above is not merely a product
of the war, of which peace begins the cure. It is a continuing
phenomenon of which the end is not yet in sight.

All these influences combine not merely to prevent Europe from
supplying immediately a sufficient stream of exports to pay for the
goods she needs to import, but they impair her credit for securing the
working capital required to re-start the circle of exchange and also, by
swinging the forces of economic law yet further from equilibrium rather
than towards it, they favor a continuance of the present conditions
instead of a recovery from them. An inefficient, unemployed,
disorganized Europe faces us, torn by internal strife and international
hate, fighting, starving, pillaging, and lying. What warrant is there
for a picture of less somber colors?

I have paid little heed in this book to Russia, Hungary, or
Austria.[155] There the miseries of life and the disintegration of
society are too notorious to require analysis; and these countries are
already experiencing the actuality of what for the rest of Europe is
still in the realm of prediction. Yet they comprehend a vast territory
and a great population, and are an extant example of how much man can
suffer and how far society can decay. Above all, they are the signal to
us of how in the final catastrophe the malady of the body passes over
into malady of the mind. Economic privation proceeds by easy stages, and
so long as men suffer it patiently the outside world cares little.
Physical efficiency and resistance to disease slowly diminish,[156] but
life proceeds somehow, until the limit of human endurance is reached at
last and counsels of despair and madness stir the sufferers from the
lethargy which precedes the crisis. Then man shakes himself, and the
bonds of custom are loosed. The power of ideas is sovereign, and he
listens to whatever instruction of hope, illusion, or revenge is carried
to him on the air. As I write, the flames of Russian Bolshevism seem,
for the moment at least, to have burnt themselves out, and the people