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There is some exaggeration but also much truth in this description of a Rentnerstaat. Psychologically the account fits the Englishman less exactly than the Frenchman, who is industrially less venturesome. Moreover from the individual's view-point it makes little difference whether his fixed income is derived from abroad or at home. Economically, however, the influence of a large class of individuals living by foreign industry is difficult to exaggerate. Their interests are abroad; at home they are concerned chiefly with the maintenance of low prices. The nation becomes in a sense parasitic, living without effort upon the "lesser breeds" in all parts of the world.

Whatever its evil results, however, there is little reason to believe that any nation will willingly surrender the income on its foreign investments or cease to export new capital if conditions are favourable. The interest-receiving nations are the world's aristocrats, happy in their favoured position, and if they can thus live partly on their past labour they see no reason for receiving less or working more. The social evils resulting at home from such a condition can be cured by changes in taxation and the distribution of wealth, by legislation which gives a greater part of the income from foreign investments to the nation as a whole, and thus forces the rentiérs back into industrial life. So long, however, as foreign investment is essential to the widening of the agricultural base of industrial nations, it will not be stopped by its beneficiaries.73

Those who advocate a complete cessation of the export of capital,74 therefore, might as well argue against its accumulation. You could not stop it if you wished, and would be none the wiser for wishing it. The export of capital is merely an export of goods, paid for in credit instead of in goods, and the only way to prevent credit from coming into the country is the suicidal method of expelling the creditor. It is unlikely, therefore, that this movement will cease until the demand for capital is fairly equalised throughout the world, until the backward nations of to-day are sated with capital or have themselves become industrial countries.

The danger lies in exactly the opposite direction, not in an abstention by wealthy nations from investing abroad, but in so keen, unscrupulous and rough-handed a competition for the right to invest as to result in war.

This danger of war is the final argument of anti-imperialists. They argue that the sacrifices which result in increased profits to investors and merchants are made by the masses who profit least from such investment. Not only do the people pay for the armaments to secure political domination, but also for the wars, which in these days of clashing imperialistic ambitions are an ever-present possibility. So long as the imperialistic scramble continues war will be inevitable. For no new dominion can be secured without threatening the interests or pretensions of rival imperial nations. The vastly extended empires are cheek by jowl. An extension of one power anywhere menaces the colonies of another nation; rival colonial ambitions merge with strategical questions. Just as the United States will not endure Japan on the West Coast of Mexico, nor England Germany on the West Coast of Morocco or on the Persian Gulf, so each nation fears the approach of other nations to its most distant possessions. Immediately even visions arise of coaling stations, from which great fleets may later issue, to be followed by transports of disciplined troops. In the seventeenth century England, France, Spain and Holland could hold colonies in North America and be reasonably out of each other's way. In the twentieth century, this is no longer possible.

The increased cost of war adds to the opposition of these democratic groups. No longer is war a mere isolated venture of a single nation, but a conflict between alliances on a scale utterly unthought-of in former generations. No conceivable gain derived from any colonial venture of the last fifty years could compensate for the mere economic losses involved in the present war, to say nothing of the loss of life, the maiming and crippling of young men and the disruption of international bonds. And if war costs much so also does the preparation for war. Until some mutual accommodation can be secured, even the most pacific nation must bear the burden of increasing armaments.

There is a still deeper antagonism to these imperialistic ventures. From the beginning, the dominant classes in societies which are developing towards democracy have used foreign adventure to allay domestic discontent and to oppose democratic progress. When war is begun or even threatened it is too late to speak of uninteresting and seemingly petty internal reforms. Between industrial and political democracy on the one hand and a policy of foreign adventures on the other, there is an inevitable opposition.

It is not that the political and industrial interests of the dominant classes favour war, but rather a policy involving the constant fear of war. This fear itself is worth millions. It means a huge vested interest in the creation of munitions and armaments. It means political quiescence and domination by a financial-military group. But for the fear of war and the imperialistic policies which kept this fear alive, the militaristic Junker class of Germany could not have maintained its domination.75 To disband the German army would cost these landed proprietors more than would a Russian invasion. And a similar if lesser conflict in class interest is found in France, England, Austria and to a certain extent in the United States. In all countries, the imperialistic policy, even when it redounds ultimately to the nation's advantage, is a class policy used to further class purposes.

In Europe, however, it is difficult for democratic leaders to make headway against imperialism. For the tragedy of the situation lies in the fact that where nations are constantly on the watch against each other, the imperialistic motive is interwoven with other motives of self-defence and nearer territorial aggression. If Germany is intent upon war, and if her road leads over France, then France must arm. To be effective in defence, she must have universal service, professional officers, a true military spirit, a certain degree of autocracy in military arrangements, as well as offensive and defensive alliances, not based on a true community of interest or similarity of ideals, but upon the need of beating back the foe. If England fears German aggression she cannot afford to maintain an isolation however magnificent, but is obliged to enter into alliances, ententes and secret engagements. For if you play the game you must play it according to the rules. Moreover, if you have the armament and alliances necessary for defence, you are tempted to use them for an aggressive and imperialistic policy. Indeed, such an imperialistic policy may actually form the cement of your alliances.

All these considerations lame and thwart the movement against imperialism. Moreover, the problem of governing the backward countries remains. For their own sake you cannot leave them alone, and the abstention of one nation merely makes the imperialistic ventures of other nations easier. If governments refrain from organising backward countries, the private capitalistic exploitation of these regions will be more ruthless than ever. The anti-imperialists are thus faced with a difficult situation which they cannot meet with a priori argument and pious formula. With them or without them, some form of co-operation must be effected between industrial and agricultural nations as well as some form of control over countries incapable of self-government. There is need for a definite, concrete democratic policy for the government of such backward countries.

CHAPTER XI
THE APPEAL OF IMPERIALISM

It is a significant fact that despite a democratic opposition to imperialism it is precisely the democratic nations, England and France, which are most imperialistic. The British public seems always willing to make sacrifices to extend the Empire, and an almost equal enthusiasm is found among great sections of the French democracy. Also in Germany, when an election was fought in 1907 upon a colonial issue, thousands who usually voted the Socialist ticket gave their adhesion to the imperialists.

Such a popular adhesion is essential to the success of an imperialistic policy. The masses need not be consulted upon the first steps but they are urgently called into conference when trouble begins and "pacification" or war is necessary. Your financier, with all his money, is helpless against the rival ambitions of a great nation, and, he must have the support of his own country, its navy, army, credit, and millions of patriotic citizens. How is he to secure this support?

To understand the implications of this question we must consider the changes in modern warfare and the rise of democracy in the Western World. The mercenary soldiers once employed by absolutist princes would go anywhere at any time and no questions asked. War was a game played by small teams of professionals. To-day it is a national conflict in which entire populations, old and young, male and female, are pitted against each other. This fact gives to the peoples a passive quasi-veto upon war, for success in a crucial conflict depends upon enthusiasm and supreme unity. To-day Germany would crumple if her people were actively hostile or even merely listless towards the war. It would be difficult to raise loans, to sequester goods, to ensure the continuance of the industries upon which the nation and army live. Victory depends upon the morale of the entire population. During the war itself, it is true, a nation tends to lose its power of self-criticism and to fight blindly. It defends proposals that in peace would be indefencible; it works itself up to a pitch of righteous self-justification. But war to-day is won before the first shot is fired; it is won by preparation. An army must be raised, a reserve of officers created, munitions stocked, strategic railways built, and plans elaborated for rapid military mobilisation and for a war organisation of industry. All this costs money—hundreds of millions. If then the nation is to be taxed for military budgets, and if the people as a whole secure an increasing veto over such expenditures, would it not seem likely that the nations would look askance at dangerous imperialistic ventures which contributed so obviously to the danger of war and to the size of military expenditures. Would not the people say to the financiers, "Keep your capital at home. Make your profits at home"?

To avert an attitude so fatal to any national policy of imperialism likely to lead to war, enthusiasm must be aroused and support secured. This support may be sought by a two-fold appeal; to direct economic interest, and to the sentiment of patriotism. The two appeals are not sharply separated, but merge.

The economic argument for imperialism is that its advantages are in the end widely distributed. Better access to raw material and a wider market for manufactures means a flourishing national industry, steadier employment, better wages, and a prosperity of the whole population. A similar argument is made for investment in colonies. The whole nation is benefited if its capital brings the largest returns, and these are to be obtained only abroad and by an imperialist policy.

This diversion of profits, works itself out in various ways. By swelling the income of the wealthy classes, foreign investment increases the expenditure at home for the labour of nationals, thus leading to steadier employment and higher wages. The servants of England are supported by India, Egypt and the Rand Mines, as also by the profits on New York real estate and American rails.76 The distribution of such income, moreover, is a matter over which the British nation has the final say. The entire national dividend, whencesoever derived, is a fund out of which all social improvements may be paid. Social insurance, popular education, and other government projects for the national welfare are supported, and may be increasingly supported, by a taxation which in the form of income and inheritance taxes falls heavily on the rich. Such a policy, by creating a certain community of interest between classes, gives to the entire population an economic interest in the wealth of the few. The profits from foreign, as from domestic investments, may be drawn upon at will for national purposes.

The importance of this development in its effect upon nationalism and imperialism has been largely overlooked. We have heard much of the German doctrine of the State as Power, but have failed to realise how Germany, like certain other European nations, has used its powers of taxation and governmental expenditure to create for the masses an ever larger stake in the national income. A policy, which increasingly taxes the rich for the benefit of the poor, establishes a certain unity in the commonwealth. Even the Socialist parties alter their allegiance. The early Socialists were aggressively anti-patriotic, opposing to all conceptions of nationalism the solidarity of the working classes of the world. Karl Marx for example, declared that the workingman had no fatherland, "for in none is he a son." He was a nomad of society, doomed to a life hardly more secure, though far more burdensome, than that of the tramp or gipsy. Long before the war, however, many Socialists had accepted a more nationalistic view. Not only did wage-earners realise that they already participated to some extent in the social surplus, but they also saw that their increasing political power would enable them to influence the future distribution of the national income, however that income were obtained.77 Once this interest in the national dividend was assured, it became desirable, even to Socialists, to make that dividend as large as possible. The belief spread that all groups within a nation have common interests opposed to the interest of other nations. Thus the Austrian Socialist Dr. Otto Bauer in his "Imperialisms und die Nationalitaetsfrage" denies that the immediate interests of the wage-earners are the same in all countries and asserts that the workers may find good reason to side with the employers of their own nation against wage-earners and employers in another country. "We do not say that there are no conflicts of interests between the nations, but we say, on the contrary, that as long as exploitation and oppression continue, there will be conflicts of interests between nations."78 From which follows the conclusion that until capitalism is destroyed, and that may take many decades, it is essential for the workman to develop the welfare of the wage-earners of his own country, rather than of the world in general.79

This argument is to immediate interest, which, as a rule, overrides considerations of ultimate interest. To the German workman, for example, it seems plain that English proletarians will not gain his salvation; he must gain it himself. The German wage-earner must be better fed, clothed, housed, educated, organised, and all these needs translate themselves into more regular work, better paid. But if German industry is defeated by English industry, the German workman will suffer unemployment, reduction of wages, lockouts, unsuccessful strikes, and a decline in trade union membership. Such a retrogression means a delaying of the ultimate working class victory as well as a worse situation in the present. And, parenthetically, workingmen and Socialists, being ordinary men with the ambitions and appetites of ordinary men, do not spend seven evenings in the week in contemplation of a Co-operative Commonwealth any more than the average church-goer devotes his entire mind to the Day of Judgment. The German Socialist has his bowling club and his Stammtisch; he must buy shoes for the children and a new pipe for himself, and his weekly wages count more than his share in a new society, which will not come until he is dead. Besides his wages, he is interested in his government insurance premiums, in the education of his children, in the things that he and his family and the families of his class wish to enjoy. If imperialism appears to raise wages as well as profits, he is not likely to oppose it on sentimental grounds, especially as there are theorists who stand ready to prove that Imperialism is merely the last phase of Capitalism and will bring Socialism all the sooner.

And the argument for the beneficial reaction of imperialism upon wages seems at first glance convincing. The German workman sees that wages are high in England. He is told that the cause is the early British conquest of foreign markets.80 His own rapid progress during recent years he associates with a simultaneous increase in German industry and foreign trade. If therefore the foreign field is to be extended, why is the German eternally to be left out in the division? Such a workman does not like the methods used, but so long as markets are to be seized, whether Germany takes part or not, he is, with mental reservations, in favour of a "firm" policy.81 He wants not war, but foreign markets. Let Germany become rich by means of imperialism and the wage-earner in due time will be able to get his share.

If such an appeal can be made to the socialist, it can be made with even greater success to the middle classes, who have no anti-nationalistic prejudice and whose attitude is easily influenced by that of the great capitalists. The influence of the imperialistic propaganda was shown in a searching analysis of German public opinion made in 1912 or 1913 by a Frenchman and reproduced in the French Yellow Book. The colonial expansion of France was regarded with intense irritation. "Germans" it was held, "still require outlets for their commerce, and they still desire economic and colonial expansion. This they consider as their right as they are growing every day, and the future belongs to them." The treaty of 1911 with France (concerning Morocco) is considered to be a defeat for Germany, and France is represented as bellicose. On these two points, all groups are unanimous, "deputies of all parties in the Reichstag, from Conservatives to Socialists, University men of Berlin, Halle, Jena and Marburg, students, teachers, employés, bank clerks, bankers, artisans, traders, manufacturers, doctors, lawyers, the editors of democratic and socialist newspapers, Jewish publicists, members of the trade unions, pastors and shop-keepers of Brandenburg, Junkers from Pomerania and shoe-makers of Stettin, the owners of castles, government officials, curés and the large farmers of Westphalia."82 "The resentment felt in every part of the country is the same. All Germans, even the Socialists, resent our having taken their share in Morocco." The German diplomatic defeat is a "national humiliation."83

The words "national humiliation" used by this French observer illuminates both the force and limits of the economic motive in throwing nations into imperialism. The desire for greater profits and higher wages present themselves not nakedly, but garbed with idealistic motives. "A decent respect for the opinion of mankind," as well as a desire to gain one's own self-respect, compels men to represent their more crassly egoistic desires as part of an ethical plan. It is not hypocrisy, but a transformation of material into ideal values.

Thus nationalism enters into the problem, and the appeal to the supposed interests of the masses becomes an appeal to their "patriotism." The nation is outraged, humiliated, despised. Its honour, which is in reality its prestige and inflated self-esteem, is affected. Though not quite identical with the economic interests of the citizens, national honour has much to do with the conservation and furtherance of those interests. It is a mirror cracked and smudged with ancient dirt, which reflects imperfectly the economic motives of the classes dominant in the nation.

The more primitive and instinctive a man, the more he is actuated by these idealistic elements. The crowds on the London streets on Mafeking Day did not know what they wanted with the Rand mines, but they were true-blue Britishers, a trifle drunk but all the more patriotic. It is to this feeling of patriotism, sober or half-sober, to which the men who have something to gain from imperialism appeal. The home nation has its sacred duty to perform to the backward country, which does not pay its debts and is rent by revolutions, fomented perhaps abroad. The home nation must not relinquish its arduous privilege. It must not haul down the flag. It must not defer to other nations. Beyond the seas there is to be created a New England, a New France, a New Germany, to which all the national virtues are to be transplanted. The emigrants now lost to alien lands will carry their flag with them, and the nation will no longer strew its seed upon the sand. This nation (whichever one it happens to be) has a divine mission, which it can never perform unless it has a suitable army and navy, and unless this day week it sends a battleship to a certain port in China or Africa.

This quasi-idealistic element in imperialism strongly reinforces the economic argument. The German, Englishman or Frenchman dreams of extending his culture, his language, his influence, his sovereignty. He takes pride in the thought that his people rule in distant lands, in deserts and jungles, in islands lying in tropical seas, and on frozen tundras, where civilised man cannot live. It is this dim mystic conception, this sense of an identification of a man's small personality with a vast Imperium, that inspires the democracies, which year by year vote supplies for imperialistic ventures, far-sighted or absurd. Though this idealism is partly the expression of an unrecognised economic need, yet for the most part, though perhaps decreasingly, the average citizen looks at imperialism as a sort of aura to his beloved nation, and the conceptions of national prestige and of imperialistic dominion fuse.

Moreover, even the calmer minds are reached by the fundamental argument of the necessity for extension. They recognise that despite the brutality and bloodiness of colonialism, it at least represents a certain phase or form of an inevitable development, the creation of an economic unity of the World. Without colonial development, without an exploitation of unlocked resources, the industrial growth of the manufacturing countries cannot be maintained, and they will be thrown back upon their own meagre resources. So long as agriculture remains what it is to-day, the increasing millions of Western Europe, of Japan, of the Eastern United States, must rely more and more upon their commerce with the backward states, and must take a hand in stimulating their production. The present nationalistic imperialism may not be the best, it is perhaps the very worst form, that this world integration might assume, but in any case the problem remains to be solved either by this or some other means.

As a consequence the opposition to our present nationalistic imperialism is tending to change from a merely negative attitude to a positive programme for an imperialism at once humane, democratic and international. It is an imperialism, the ideal of which is to safe-guard the interests of the natives, to prepare them for self-government and to carry on this process not by competition and war between the interested nations but by mutual agreements for a common benefit. The present cruelties and dangers are to be avoided. The nations are to unite in a joint, higher imperialism.

It is this ideal which is to-day informing some of the leading minds of Europe, an ideal which will convert the competitive imperialistic strivings of rival nations into a joint and beneficent rule of countries demonstrably incapable of ruling themselves by a group of nations acting in the interest of the world. Such a pooling of claims is admittedly difficult and is likely to be opposed by immense vested interests of classes and nations. It is this problem of a joint imperialism, the solution of which alone stands between Europe and the continuance of bitter strife and war.

73.There may, however, be regulation, although this is, for any one nation, a difficult operation.
74.See Burgess' "Homeland."
75.In his celebrated book, "The Nation in Arms," the late Field-Marshall von der Goltz shows how necessary is the sense of the imminence of war to the maintenance of the prestige of the officer class, which, as he states, is "chosen from the German aristocracy." He quotes approvingly the words of Decken: "Now, when in consequence of a long peace the memories of past services have become completely obliterated, and there is no immediate prospect of a war, the citizens take more and more note of the burden of the upkeep of an army, and attempt to convince themselves of the uselessness of this institution." To which Von der Goltz adds: "The present day (1883), especially in Germany is favourable in this respect to the officer class. Great and successful wars have enhanced its renown, and have moderated the envy of others. But should peace endure for several decades to come, it may again become necessary to remind the people that external favours may, without harm, be extended to the military profession, and especially to the officers."—Popular edition, London, 1914, p. 25.
76.The profits from imperialism are only a part of the profits from foreign investment. In an economic sense, England, France, Germany, Holland and Belgium own parts of the United States, and the profits of the Pennsylvania Railroad go largely to Europe as do the profits of Egyptian railways. There is this difference: the United States retains control of the physical property, and can, if it wishes, tax these incomes out of existence, while Egypt can not.
77."'If social democracy is not yet in power, it has already a position of influence which carries certain obligations. Its word weighs very heavily in the scale.'"—Edward Bernstein, "Die Voraussetzungen des Sozialismus," p. 145, quoted by Jane T. Stoddart. "The New Socialism," New York and London, p. 156.
78.Quoted by William English Walling, "The Socialists and the War," New York, 1915, p. 19.
79."The improvement of the lot of the workers has as a necessary condition the prosperity of the industrial development; the ruin of commerce and industry would encompass their own ruin. In a speech delivered at Stuttgart, Mr. Wolfgang Heine, a socialist member of the Reichstag, declared that 'the economic solidarity of the nation exists despite all antagonism of interest between the classes, and that if the German fatherland were conquered, the workers would suffer like the employers and even more than these.'" "The alliance between trade union socialism and military imperialism was manifested for the first time at the Stuttgart (International Socialist) Congress in 1907. The majority of German delegates, composed above all of trade union representatives, were opposed to the Marxist resolution condemning colonial wars."—"L'imperialisme des socialistes allemands," La Révue, vol. cxii. Paris, 1915.
80.In their admirable "History of Trade Unionism" Sidney and Beatrice Webb ascribe the rapid increase in the growth and power of British trade unions after 1850 in large part to the development of British commerce and industry. "This success we attribute mainly to the spread of education among the rank and file, and the more practical counsels which began, after 1842, to influence the Trade Union world. But we must not overlook the effect of economic changes. The period between 1825 and 1848 (in which "magnificent hopes ended in bitter disillusionment") was remarkable for the frequency and acuteness of its commercial depressions. From 1850 industrial expansion was for many years both greater and steadier than in any previous period."
81.This is the real but not the avowed policy of a large section of the workers, especially of trade unionists, in the Social Democratic Party of Germany.
82.French Yellow Book, No. 5. The document, according to the German commentators is falsely dated.
83.French Yellow Book, No. 1. Annexe I.
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