The story centers on the invention of a reactor that can annihilate matter to produce cheap and abundant energy (c.f. special theory of relativity). Unfortunately, it produces something else as a by-product, the absolute. The absolute is a spiritual essence that according to some religious philosophies allegedly permeates all matter (see also monism). It is associated with human religious experience, as the unsuspecting humanity is to find out all too soon in the story. The widespread adoption of the reactors cause an enormous outpouring of pure absolute into the world. This leads to an outburst of religious and nationalist fervor, causing the greatest, most global war in history.
Čapek has much fun describing this war in a self-consciously absurd manner. Characteristic of the war are distant military marches, hence for example "battles of the Chinese with the Senegalese riflemen on the shores of the Finnish lakes." Some of the more prominent political changes the war causes include expulsion of the Russian army to Africa (via Europe) by the Chinese invasion, the conquest of East Asia by Japan that cuts the Chinese conquests in Russia and Europe down to the limits of the former Austro-Hungarian empire, and the Japanese conquest of North America. The later happened because the United States were exhausted by a bloody civil war between the supporters and opponents of the Prohibition.
Absolute does more than affect minds. It also does physical work. During the war, it causes catastrophes against the enemy (various parts of absolute support any given side in the conflict). At some point, it also becomes interested in production of material goods and produces them, in a supernatural manner, in enormous quantities. This leads to economic collapse and, absurdly enough, deficit of all manufactured items because, allegedly, once the price of goods has dropped to zero because of absolute, nobody cares to produce or distribute them any more. Starvation is averted because absolute does not produce food, and the peasants who do not let the price drop to zero. In fact, they force every last penny from urban population in return for food, hence saving humanity. This is a satirical reference to the very real phenomenon of bag people who bring food to the cities from the countryside in times of economic and political collapse.