MIA > Archive > Boudin > Socialism and War
In my first lecture I stated that, in this country at least, it seems to be agreed on all sides, even among Socialists, that economic conditions or economic development did not cause this war. And I intimated that I did not share this well-nigh universal opinion, and was inclined to agree with what is, or rather used to be, considered the Socialist view in such matters and ascribed the gigantic struggle now raging in Europe to economic causes.
The opposition to, or dissent from, what might be termed the economic view of the war, was thus stated by a Socialist in a Socialist publication,— Dr. Isaac A. Hourwich, writing in the New Review:
“There is a tendency among orthodox Socialists to blame everything upon capitalism, and more specifically upon the capitalist class, or ‘the capitalist governments.’ This habit of thought is particularly strong in the United States, where the capitalists are the dominant, although not the only power in politics. As I have had occasion to show elsewhere, even in the United States the capitalists and the wage-workers are not the only social-economic classes. In Europe there is no nation whose government can be scientifically defined as a ‘capitalist government’ . . . The manufacturers of armaments are the only group of the capitalist class that is directly interested in militarism. The Imperialistic adventures further the interests only of a limited group of manufacturers, directly or indirectly interested in the export trade with the Colonies. Nowadays piracy is no longer an integral part of maritime trade, as in the days of the Phoenicians. German manufacturers can safely ship their goods to South America in competition with English manufacturers, without the protection of the German navy. It is therefore misleading to seek the causes of this war in the wiles of ‘the capitalist class.’”
Now, while I acknowledge myself belonging among those here referred to as “orthodox Socialists”, and intend to present here their point of view, I have no sympathy whatever with the manner in which some of them attempt to explain the phenomenon of war generally and the present war in particular. Such hackneyed phrases as “wars are the result of capitalism”, “capitalists need new markets”, etc., etc., unfortunately so much in vogue among Socialists, are either false or meaningless. And I do not at all blame those to whom such formulas are offered as a ready-made explanation of all wars— without any real attempt to look into the facts of the particular situation— for rejecting them as an unwarranted attempt to “blame it” all on capitalism, and an easy way for the mentally lazy to escape the necessity of studying a rather complicated problem. That all wars were not the result of capitalism is, of course, self-evident, as quite a considerable number of wars took place before the capitalistic era. But it is not even true that capitalism is particularly warlike, as a glance into the pages of history will conclusively show.
On consulting any reliable history we shall find, for instance, that the XIX Century, the century which saw the greatest development of capitalism, was far from being a war-era. On the contrary: compared with the two or three centuries that preceded it, it was of a distinctly peaceful character.
We shall find, furthermore, that England, the classic country of capitalism in the XIX Century, was very far from being a warlike nation during that century. Whatever may have been John Bull’s reputation for bellicoseness in the days of long ago, he was a distinctly pacific individual during the past one hundred years. We are therefore confronted with the indisputable fact that the most capitalistic nation in the most capitalistic age was distinctly peaceful.
In fact, an examination of the chronology and geography of wars during the last couple of hundred years might easily lead us to the conclusion that the world, instead of becoming more warlike with the growth of capitalism, was steadily becoming more and more pacific under its influence. Let us consider this: The “civilized world”, that is, the capitalistic world, hasn’t had a general war in a hundred years— since the close of the Napoleonic Wars; and no great war in forty-four years— since the Franco-Prussian War. The Russo-Turkish War of 1878 was hardly a great war; and even that was thirty-six years ago. In fact, the Franco-Prussian War was not only the last great European war, but was the last war of any kind waged by any of the capitalistically developed nations of Europe among themselves. All that there was of war, in Europe, since then was confined to one spot— the most un-capitalistic corner of Europe— the Balkans.
The conclusion that capitalism is— as such— peaceful, would, however, be just as erroneous as the contrary assertion that it is, by its very nature, warlike. The truth is, that capitalism— as such— is neither peaceful nor warlike. Different groups within capitalist society are either peaceful or warlike as their interests, or supposed interests, may dictate. There is, therefore, very seldom any unanimity of opinion in the capitalist class as to the desirability of war at any given time in any given nation. Nevertheless, it must not be assumed that the capitalist class as a whole and the nations which it dominates are utterly devoid of character on the subject of war and peace; or that this character stands in no organic connection with its capitalist economy. A careful examination of “all the facts in the case” will show that the question of war and peace is deeply rooted in the economy of nations. Our conclusion must, therefore be: capitalism is neither peaceful nor warlike, but has its peaceful and warlike moods, corresponding to different phases of its development.
Without going into detail it may be stated as a general proposition that the life-history of capitalist society may be divided, for our purposes, into three epochs— two of them warlike and one peaceful. In its youthful days capitalism is combative— its growth from infancy to manhood being accompanied by a series of wars in which its distinctively capitalistic character asserts itself. After it has reached to “man’s estate” capitalism grows pacific; and its attention, in the prime of its vigor, is directed mainly to household economy, in the belief that a well-ordered household and “attention to business” are the sure basis of prosperity. But after capitalism— understanding under that term a society based on the principle of free competition— has passed its zenith, when on the downward grade, it develops extreme irritability of temper and returns to the warlike mood of its earlier days.
The history of England well illustrates this proposition. There was a time when England was a very warlike country. The two hundred years which elapsed from the accession of Elizabeth to the close of the Seven Years’ War witnessed an almost unbroken procession of English wars; and it was during these two hundred years that England established her position as the leading commercial and manufacturing country of the world. But with the close of the Seven Years’ War, when England finally established her position in the vanguard of commercialism and reached her capitalistic majority, so to say, she “settled down” and entered upon a pacific era. And she continued in her pacific mood until the day before yesterday. It is true that she fought the great Napoleonic Wars during the early part of this period. But the Napoleonic Wars were quite exceptional in their character, produced by exceptional circumstances, and do not militate against England’s generally pacific character during the period under consideration. During the one hundred years which elapsed between the close of the Napoleonic Wars and the outbreak of the present war England practically had no European war, hardly any real war in fact. Certainly nothing that could compare either in size or importance with any of the great struggles of previous epochs in her history or with the great struggle now raging.
I have searched my memory for the record of any European war conducted by England during the past one hundred years, and the only thing that I can recall is her participation in the Crimean War. But that certainly was no war, as far as England’s participation in it was concerned. It was merely a warlike incident or episode. And those who are familiar with that incident will recall that the English capitalists were dragged into that war against their will. The true representatives of capitalism were strongly opposed to that war, and when England was finally dragged into it, her half-heartedness in the affair limited her participation therein to the sending of an expeditionary force.
That incident occurred sixty years ago, and since then England has been at peace with all her European neighbors. She has manifested the same pacific character in other quarters of the globe, and down into the modern imperialistic era. Let there be no mistake about it. Notwithstanding her exceptional position as a world-empire with interests in every quarter of the globe, England was not a leader of nations in the modern era of imperialism, but modestly followed the lead of others, principally that of Germany.
It is sufficient to look into the history of the so-called “partition” of Africa, during the past thirty years or so, to find the proof of this assertion. Those who have followed the manifestations of modern imperialism in that part of the world will doubtless recall that back in 1882, when Germany started on her Imperialistic career, Germany made a proposition to England for “joint action”— joint occupation or partition— of the Western coast of Africa, particularly Southwest Africa. That was at a time when Germany was a much weaker power than she is to-day, and her imperialism much less vigorous. England, on the other hand, was the undisputed mistress of the seas, and in possession of South Africa, which brought at least Southwest Africa within her “sphere of influence”, when viewed from the modern imperialistic point of view. And had England been as imperialistic as Germany, or as she is herself to-day, she would either have gone into the joint adventure with Germany, or grabbed that particular slice of Africa herself without any partners. But that was in 1882, and England was still dreaming dreams of peace. So she did not make any move, with the result that, after a couple of years of waiting, Germany concluded that there was nothing either to expect or to fear from England; she therefore undertook the job single-handed and occupied what is now known as German South West Africa.
The same story, in a general way, is told by the history of the occupation of the eastern coast of Africa. For years England refused to take advantage of the many opportunities which presented themselves to her for the purpose of strengthening her position in that region by extending its dominion.
A very marked proof of England’s general pacific character even as late as 1890, and the remoteness of the possibility of war to the minds of her statesmen, is shown by her cession of the island of Heligoland to Germany in that year. If you will bear in mind that the first big naval defeat suffered by England in the present war was inflicted upon her by the Germans using their naval base at Heligoland, you will appreciate how important a strategic position Heligoland is, and how little England must have thought of war with Germany in 1890. How times have changed since then! To-day even the most pacific of Englishmen, those who are opposed to England’s exacting any kind of “compensation” from Germany after a successful termination of the war, still insist, when discussing the terms of peace as they ought to be, on making an exception of Heligoland. This England should have back by all means. And yet she gave it away freely less than twenty-five years ago.
Now, as I have already stated, this apparent love for peace is not at all a characteristic of the English nation. There was a time when England was one of the most warlike nations of Europe. And as I shall attempt to show later on, England is again becoming warlike. But for the present we are interested in her pacific period. It is, of course, hard to determine upon an exact date when the change from the earlier warlike period to the pacific one which I have just been discussing occurred. Such transitions are more or less slow and gradual. In a general way it may be said, however, as already intimated, that the early warlike period of English Capitalism closed with the Seven Years’ War. The first manifestation of England’s turn to a more pacific mood was her management of our War of Independence.
It may perhaps jar on the sensitive ears of our good patriots, but the truth must be told— and the truth is, that the success of our War of Independence was due not so much to the prowess and love of liberty of the “embattled farmers” at Bunker Hill and Lexington or to the military genius of George Washington, as to the fact that England did not care to exert herself overmuch, and to make great sacrifices in order to keep us. If England had wanted badly to keep the Colonies, there is no doubt but that the war would have had another result. Of course nobody can tell now whether England could in any event have managed to keep us as a dependency until the present day. But it is safe to say that she could have retained us as a colony for a considerable time after 1783. That we gained our independence at the time we did was due mainly, if not entirely, to the fact that England did not really care very much whether we remained a subject colony or became a free and independent nation. Of course, if she could have kept us without a fight she would have done so. But the practical question that confronted England was not whether or not she wanted to keep us, but whether or not she was ready to wage a real war in order to keep us. And this she decided in the negative.
I stated in my first lecture that it takes two to make a war. And that before two states will go to war there must be an object worth fighting for, for both sides. In our War of Independence we had a great object to fight for— independence. But England did not think that depriving us of our independence was object enough for her to wage a great war about. And so after making a show of fight, sufficient to find that we were in earnest and ready to fight a big fight, and that her own people did not think the fight worth while, official England capitulated, and allowed us our independence. In this connection it is well to remember that about thirty years after the conclusion of the War of Independence we waged a second war with England, the War of 1812. And if you will consult a serious history you will find that in that war we got a sound thrashing from England, notwithstanding the fact that we were then a much bigger people, with over thirty years of existence as an independent nation, and that England was exhausted by a generation of war in Europe— the great Napoleonic Wars. If England could “lick” us in 1812 she would have had no trouble in doing so thirty years earlier, had she really cared to.
But why did she not care?
Of course, we all remember Burke’s great speech on Conciliation with America— the beautiful periods and fiery invective in which he proved our right to independence to his and our satisfaction, but which when stripped of their oratorical garb simply proved that the English public opinion which he expressed did not consider America worth fighting for. Of course, being a true orator, Burke only glided on the surface of things. You will not, therefore, find the true reason for England’s unwillingness to fight in order to retain us, in his celebrated oration. But you will find it in a less celebrated, though no less important work— Adam Smith’s Essay on Colonies. Smith’s Essay was the meat of the meal of which Burke’s Oration was the dessert, or rather the sparkling champagne.
As you know, Smith was the father of classical political economy— the sacred gospel of Capitalism in its vigor of manhood. And his Essay on Colonies is part of this gospel, twin-brother and necessary corollary to the main article of faith— Free Trade.
The sum and substance of the Essay is that colonies are not worth having. Smith’s major premise— proved by a long and rather devious process of economic reasoning— is that exclusive trade between the “mother-country” and the colony, or preferential tariffs in favor of the “mother-country”, are harmful not only to the colony and the world at large, but also to the “mother-country”. The proper policy, therefore, to be pursued by the “mother-country” is to permit the colony to trade freely and on equal terms with the world at large— free trade for the colonies. It then follows as an irresistible conclusion that colonies are nothing but an unnecessary trouble and expense. If France and the rest of the world can trade with an English colony on the same terms as England herself, England not only does not derive any special benefit from “possessing” the colony, but is in fact at a disadvantage, because she must meet the competition of the whole world as if she didn’t “own” the colony at all, while at the same time carrying the burden of her civil administration and military protection. “Possessing” a colony, under such circumstances, is like possessing a white elephant.
This is the spring that fed the well of Burkian oratory. It flowed freely for over a hundred years, determining the character not only of a good deal of English oratory but also of English colonial and foreign policy.
Towards the close of this period, just one hundred years after our War of Independence, we find England doing in South Africa what she had done a hundred years before in North America. As I have already stated, England was rather tardy in asserting her rights of sovereignty in the Southern part of the African continent. It took some time and considerable complications before she asserted her overlordship over the two Boer Republics adjoining her settlements at and near the Cape. Shortly after she did bring these two republics under her protecting wing, the Boers inhabiting them followed our example of a hundred years before and declared their independence; and upon England’s refusal to accede, they took up arms to fight for their freedom. The “embattled farmers” of the Boer country, like our forefathers of old, defeated the English at their Bunker Hill— which they called Majuba Hill— and England speedily gave in, concluding a peace whereby it recognized their independence. Much as in our case.
But here the analogy ends. The Boers, also, had another war with England— some fifteen years after their War of Independence. But the second Boer War took an entirely different course from the second American War. Or, rather, the course of the war itself was similar enough, for England was victorious in both. But the results were as dissimilar as they could possibly be. After the War of 1812, England, her victories notwithstanding, was content to leave not only our independence unimpaired but our territory undiminished, never attempting to take away a foot of our soil. But when the second Boer War was over the two Boer Republics were no more; England insisted on robbing the Boers of the independence of which she had practically made them a free gift only a few years before.
But during the few years which elapsed between the first and the second Boer War a change of spirit had come over England and over the world at large. The new imperialistic era had set in. When the first Boer War took place, in 1884, the wave of the new imperialism was just beginning to rise. But it had not reached England yet. England was still the classic land of Capitalism— the land of classic Capitalism: of classical political economy, free trade, Manchesterism generally, including Adam Smith’s Essay on Colonies. But during the second Boer War Joseph Chamberlain, of Birmingham, was the director of England’s colonial policy.
The change was significant. For a century Manchester was the leading city in England, industrially speaking. It was the centre of England’s textile industry, which meant of the world’s textile industry. And the textile industry was the leading industry of the capitalist world. Capitalism meant textiles. Manchester was, therefore, the industrial capital of the world. Its political representatives were the typical statesmen of Capitalism. Its philosophy was the philosophy of Capitalism.
Birmingham does not deal in textiles. It is the city of iron and steel, the headquarters of the iron and steel industry of England. Its peculiar influence on English politics is of recent date, but quite marked in its character. In 1895 Joseph Chamberlain, that is to say, iron and steel, entered the cabinet in a leading position— symbolizing the entry of iron and steel into high place in politics in recognition of the fact that the centre of gravity in the industrial world had shifted from textiles to iron and steel. To-day iron and steel is the leading industry of Capitalism. Capitalism is in its Iron Age. If you want to know how the capitalist world, the world of business, is faring— if you want to touch the pulse of Capitalism— you look for the market reports on iron and steel. And if you are looking for the real power in present-day politics in the most highly developed countries of the world you will be wise to mark the representatives of the great iron and steel industry.
The official entry of iron and steel as a leading factor of English politics has a peculiar interest for us in connection with the subject which we are discussing. Some of us still remember the gasp of surprise with which the world received the announcement that Chamberlain had selected the Colonial Office as his particular field of activity in the Government of which he was to be the leading factor. Until then the post of Colonial Secretary was considered a minor one in the English Cabinet. And the world looked on in astonishment as Chamberlain passed the Chancellorship of the Exchequer— which he should have taken had he followed tradition— and the other great posts, until he reached the Colonial Secretaryship, almost at the bottom of the list.
But the entry of Chamberlain into office meant not only the entry of a new industry into a leading position in English politics, it meant a radical change in the entire character of politics. It meant, indeed, the opening of a new era in the history of Capitalism— the era of “Colonial Policy” and “World Politics”. Or, at least, England’s entry into the New Phase. This great change was symbolized by the raising of the Colonial Secretaryship to a place of first importance in the English Cabinet. But it had more than symbolical significance. Chamberlain meant business. He did not take the Colonial Office because of a mere whim or for sentimental reasons. It was in order to give a new course to English colonial policy. Within a few years the full significance of the change became apparent: the Boer War was fought and the Boer Republics blotted out, repudiating not only England’s former policy with reference to the Boer settlers in South Africa, but her entire colonial and foreign policy of more than a century. And, incidentally, classical political economy and the whole philosophy of Manchesterism.
It is true that the triumph of the new principle, the triumph of Birmingham over Manchester, was by no means complete. The old order is fighting for its life, and the fight is still going on. But the indications are abundant that notwithstanding England’s comparative backwardness— as evidenced by the fact that Chamberlain could not carry with him even his own party for the whole length of his colonial and tariff policy— the new order is making constant if not rapid gains. England is taking her place in the Imperialistic procession.
Modern Imperialism, as I have already indicated, is the politico-social expression of the economic fact that iron and steel have taken the place of textiles, as the leading industry of Capitalism. And imperialism means war. Textiles, therefore, mean peace; iron and steel— war.
In order to see the reason why, we must hark back for a moment to Dr. Hourwich’s criticism of the so-called “orthodox” Socialists, which I quoted at the beginning of this lecture. You will remember his scoffing at the idea that Germany had to go to war in an effort to sell her goods— which is supposed to be the position of “orthodox” Socialists.
This supposed orthodox-Socialist view was recently expressed by a representative of the Socialist Party of this country in a public lecture. This Socialist spokesman said, in substance, that we send missionaries to Africa in order to teach the poor, benighted heathen negroes to wear trousers and silk hats, and after our missionaries have succeeded in their task we go to war for the chance to sell the trousers and hats thus brought into fashion.
In criticism of this position Dr. Hourwich says, that, whatever necessity there may be for the employment of missionaries in order to create a market for trousers and silk hats, there is absolutely no necessity for the employment of military force in order to capture it. The market once there Germany had as good a chance to sell as England, even though England be “Mistress of the Seas”, and even though the particular market be located in territory colored on the map with the color of the British Empire. English supremacy on the sea does not interfere with the shipment of cargoes from Bremen to Africa or any other quarter of the globe. And English overlordship over any particular territory does not interfere with the freedom of the world to trade therein.
This criticism seems to be justified. In fact it is so. Or, rather, it was so. For it does not take account of the recent developments of the economics of Capitalism. It is about a generation behind time. It was applicable during the period of textiles— during the period when trousers and silk-hats, and other textiles, constituted the backbone of industry and foreign trade— but it does not apply to our epoch. Dr. Hourwich is quite right in his assertion that we do not have to go to war to get markets— for textiles. And we didn’t, so long as textiles were the ruling industry— an era which coincided with the period when England was practically in possession of the world market and maintained a policy of free-trade therein.
But it is quite different now, when iron and steel products have taken the place of trousers and silk-hats. And here we must pause for a moment to consider the part played by foreign trade in the economy of a highly developed Capitalism. Incidentally we may, perhaps, get a glimpse of the causes which relegated textiles to the rear and pushed iron and steel to the front.
The basis of all capitalist industrial development is the fact that the working class produces not only more than it consumes, but more than society as a whole consumes. It is this which permits the enormous accumulation of wealth which is the distinguishing characteristic of the capitalistic era. A capitalist society, therefore, always has a surplus-product on hand, which it must dispose of in order that it may “progress”; that is, continue to accumulate wealth. It therefore always depends on foreign markets for its healthy development. Of course, this “foreign” market need not be foreign in the political sense, but only in the economic— that is it must be of a lower order of capitalistic development. Such a market, in order to serve the purpose, must be an absolute absorbent, and not merely take goods in exchange for other goods of as high an industrial order.
As capitalist industry began to develop in spots, and took a long period of time before even the foremost capitalist countries became completely, or even predominantly, industrialized, this “foreign” market could for quite some time be found at home. That is to say, the industrial centres of any given country could dispose of their surplus products to the agricultural districts of the same country. This could not be done, however, without “industrializing” these agricultural districts. The old-fashioned agricultural community with its natural economy forms only a poor market for the products of an industrial economy. It is only when this community emerges from its natural economy and starts on the road of “progress” to industrialism that it begins to count as a “customer”. But once a community starts on the road of “progress” there is no way of stopping it. The districts which were once the customers of the industrial centre, absorbing its surplus product, are soon its competitors, so that the nation as a whole produces a surplus-product which can only be disposed of in a foreign market,— this time “foreign” in the political sense. The foreign market can only be in a foreign country, but it has not lost its economic meaning— for the foreign country must also be on a lower plane of capitalistic development. And so we find the countries of a higher stage of capitalistic development disposing of their surplus-product to countries on a lower stage of that development.
But that cannot last forever. For soon there are more countries producing a surplus than there are countries in a condition to absorb it. Most of the countries touched by the magic wand of capitalistic development soon produce a surplus-product of their own. On the other hand, those countries which have not been touched by that development are not in a condition to absorb the product of the other industrialism,— they have neither the taste for their consumption nor the means with which to buy them.
It is doubtful whether a legion of missionaries could convert a sufficient number of Central African negroes to the fashion of wearing trousers to keep even a moderate trouser-factory in New York busy. But even if missionaries were exceptionally skilled and in good luck, our New York trouser-manufacturers would still be sans customers if they had to depend on the Central African trade,— not with the missionaries but with the negroes. For a customer in the commercial sense of the word is not merely a man who wants to buy something, but one who can also pay for what he wants; and the poor African Negro has nothing with which to pay for the luxuries, the use of which the missionaries may teach him.
The capitalist world as a whole finds itself compelled to create new markets— manufacture customers, as it were— by stimulating the development of undeveloped countries, “civilizing” them, hot-house fashion, by means of all sorts of “improvements”, such as railroads, canals, etc. This has a double effect: on the one hand it will ultimately create a new market by bringing a new country into the vortex of capitalistic development. But its more immediate effect is that the building operation itself creates a demand for the exportation of goods— steel and iron goods. Although incidentally it may also help the exportation of some textile goods. When a railroad is being built in Africa, at an expense of, say 100 million dollars, it usually means the exportation from the domain of capitalistic production of probably 80 or 90 millions worth of steel and iron goods. The balance of the money is used for the hire of labor in Africa to do the work of actual building, and a portion of that money at least would then go to the negroes who might be induced to do some of the hardest work. These negroes would then be in a position to pay for their trousers and silk-hats, and the work of the missionaries in teaching them their wear would produce some tangible results. Hence the worldwide phenomenon of “the exportation of capital” which has accompanied the rise of iron and steel to the leading place in capitalistic economy.
But this phenomenon of the exportation of capital in the form, principally, of iron and steel, from economically developed to economically undeveloped countries, where it is invested in permanent improvements, principally railroads, is only part of a wider phenomenon— that of the distribution of production within the domain of capitalism itself in such a manner that its more developed parts produce principally means of production, while its less developed portions produce means of consumption. This is due to the fact that when a country enters upon the career of capitalistic production it begins with the production of consumable goods, doing it usually with machinery purchased abroad. So that when the new-comer within the family of capitalist nations turns from a customer of its older capitalistic brethren into their competitor, it does not do so in all fields of production. On the contrary, it continues to remain their customer for a long time to come. Only it does not buy from them any more textiles and other consumable goods as it used to, but machinery and means of production generally. The competition of the new-comer in the production of consumable goods leads to a shifting of production in the older— industrially more developed— countries. These countries now produce, proportionally, more machinery and other artificial means of production and fewer consumable goods. Generally speaking, it may be said that the capitalist world as a whole puts its savings, its continued accumulations of wealth, into means of production,— iron and steel. It is therefore natural that the production of iron and steel should become increasingly more prominent in those countries where this saving process— the accumulation of wealth— is most rapid.
It is this that has led to the supplanting of textiles by iron and steel as the leading industry of the most highly developed industrial countries; and, therefore, of capitalism as a whole.
Now, this change from textiles to iron and steel as the leading industry of the most highly developed capitalism, is the real cause of the change which we have noted in the character of capitalism from a peaceful to a warlike mood. It is this that has brought about the Imperialistic era in which we live. It is this that is the general cause of the present war.
And the reason is simple. Iron and steel are not sold, and cannot be sold, in the same manner as trousers and silk-hats or any other similar goods. Of course we are not speaking of scissors and knives and such-like small wares, but of the real heavy iron and steel goods with which “permanent improvements” are made.
The sale of textiles is, comparatively speaking, a very simple affair. If you want to sell trousers and hats to the natives of some primitive community in Asia or Africa, and your missionaries have done their missionary work, all that it is necessary for you to do is to send your cargo of goods with an alert sales-manager in charge, and the job is done. If you can undersell your competitor, the market is yours. If you are a German you need worry very little about the English flag that may happen to be flying, actually or figuratively, over the community in question.
But the situation is quite different if you want to sell these same natives some of your locomotives, cars, rails and other iron and steel goods that go into the building and equipping of a railroad. You cannot just ship a cargo of this kind of goods in charge of a sales-manager and sell them to the natives. The only way to do that is to build the railroad yourself. And here the question of the flag becomes a matter of the utmost importance. While a German, for instance, can sell trousers and hats in British South Africa as freely as he could in German South-West Africa, or in the Fatherland itself, he would find insurmountable difficulties in his way if he were to try to build a railroad through any of the British dominions. The free-trade policy which England has so far maintained in all its colonies as to textiles does not apply to iron and steel. Not only does England reserve to her own capitalists the opportunities of building railroads throughout her vast colonial dominions, but she is very jealous of other nations in the matter of building railroads even through so-called “independent” countries, if they happen to belong to the “backward” class— such, for instance, as Turkey, Persia, or China. Of course, the other countries, the countries that erect tariff walls even against foreign textiles, build regular fortifications to protect their “nationals” against competition in iron and steel. When we come to discuss the special causes that led to the present war, I shall have occasion to illustrate what I have here put before you in abstract terms by citing concrete examples from the actual practice of what has come to be called World-Politics. But right here I must explain before closing the present lecture, at least in a general way, why England, who still maintains her free-trade policy as to textiles and similar goods, takes a different attitude when it comes to selling iron and steel by means of railroad building in “backward” countries.
The explanation lies in the fact that the method of ‘‘selling” and receiving payment for the iron and steel used in the process of “civilizing” backward countries has certain peculiarities which exclude free competition. Supposing a set of enterprising people have conceived the idea of selling some iron and steel to the natives of Africa by building a railroad, say, from the Cape to Cairo, in accordance with the scheme of that great Empire Builder, Cecil Rhodes. How, do you imagine, would they proceed? Just go ahead and ship rails, cars, locomotives, and money to Africa, and build? By no means. Such a railroad might be a wonderful civilizing agency; but it is a very poor investment from the ordinary commercial point of view. The ordinary merchant, whether he sells textiles or steel, wants pay for his wares, and the ordinary investor wants dividends on his investment. In order, therefore, that the building of a railroad may be “practicable” from the business point of view, it must be a dividend-paying proposition. But that is exactly what your Cape to Cairo railroad couldn’t be, what no railroad built through these “backward” countries teeming with beautiful railroad projects could be. That is, not if it were to be built in the ordinary way, by ordinary private individuals, on their own hook and responsibility. That’s why “civilizing” railroads are not built in that way. The main part of building such a railway is not the work of building the railroad itself, but that of getting the “concession.” Now there are some people who imagine that a “concession” is a sort of permit to build a railway. As a matter of fact it is an agreement for the mode of payment for the iron and steel and other accessories which go into the building of the railway, other than from the collection of fares for the transportation of passengers or goods, which could not possibly be sufficient for the purpose.
The first thing, therefore, that our set of enterprising gentlemen who wanted to build the Cape to Cairo Railroad, or engage in some other civilizing enterprise of that nature, would do, would be to apply for a “concession.” The application, directed to the ruling power of the country to be civilized by the enterprise, would state in substance, that the applicants have conceived the great idea of building the railroad; that such a railroad would result in incalculable benefits to the country through which it is intended to run; that it would transform the country from a wilderness into a paradise, and raise its population from poverty to affluence; but that before all of these beautiful things would happen, and the railroad be in a position to pay a dividend from its own earnings as a carrier, or even pay running-expenses perhaps, the applicants, if left to themselves, would go bankrupt and the enterprise go to smash. As good and sensible business-men the applicants could not, therefore, even dream of carrying out their magnificent projects unless they were secured against loss and guaranteed a fair profit on their investment.
Now, there are two or three ways in which the building of a railroad which cannot pay expenses in the ordinary business way, may become a very well-paying business to the “concessionaires”. They may either receive a direct money-subsidy from the government through whose domain the railroad is to run; they may be given grants of large tracts of land, particularly valuable mineral lands, the exploitation of which would bring an immediate return; or they may be given monopolistic rights to the trade of the country, or at least some branches of the same. Most concessions contain some or all of these features— [they] are, in fact, mortgages on the future of the country, and usually very onerous mortgages.
And here comes the real difficulty of this mode of selling iron and steel. Some of these benighted heathen governments are very slow in appreciating the beauties of these railroad projects; some of them positively object to being railroaded into the pale of civilization, or at least dislike to pay the fare for the trip. Sometimes their reluctance in giving concessions that would pay is so great that they cannot be obtained except at the point of the bayonet; and no concession is ever granted except through the interference of the “home” government, at least by the use of moral suasion. And where several sets of “concessionaires”, belonging to different nations, ask for the same concession, that set will get it whose “home” government can, and is ready to, exercise the greatest pressure.
That no great power under the circumstances will give concessions for railroad building to foreigners is self-evident. England may be willing enough to let German merchants sell hats and trousers to the natives of her colonies on terms of equality with her own citizens, trusting that in a field of free competition her citizens will at least have an equal chance. But she certainly cannot be expected to mortgage the future of her colonies to German capitalists in a monopolistic enterprise. If her colonies are to be exploited in this fashion, her own capitalists are there for the purpose. They, too, have considerable steel on hand, and are very anxious to dispose of it in some profitable way. Each great power, therefore, tries to keep her colonies as a special reservation for her own capitalists wherein they may dispose of their surplus-products, invest their accumulations of wealth,— which, as we have seen, now consists of iron and steel.
But this is not all. The colonies which these great steel-producing nations possess may not be sufficient for the purpose of absorbing all of their surplus-product; or the prospect of good returns from an investment in these colonies may not be as good as that to be found elsewhere. Besides, a prudent business-man should have his eye open to the future. What may be sufficient for present purposes, may be inadequate at some future time. A reserve must therefore be created. Our Governments from Steel must, therefore, do what Chamberlain, following Lord Roseberry, so felicitously called “pegging out claims for posterity”. Or, at least, the unappropriated field must be kept open and unappropriated by others until we shall be ready and able to assert our claims thereto. In a word: the disposal of the surplus-product of the modern industrial nations has ceased to be a matter of trade carried on by the individual, and has become a matter of armed force, actual or potential, used by large groups, called Nations. Hence the phenomenon which we call Modern Imperialism.
Last updated on 24 October 2022