The significance of industry has changed. Formerly it was a private affair in which the State was but dimly concerned, and so concerned only in a social sense, whereas now the idea of industry is basically political. It associates with thoughts of security independence in all circumstances, national welfare, power, and grandeur. A factory is like a ship to be privately enjoyed in time of peace, subject to mobilization for war. The War did that. Great Britain now subsidizes so-called key-industries as before she subsidized ships under the eye of the Admiralty if they were so built as to be easily converted into cruisers. All this is beyond the control of finance.
For another reason, there are signs that industry in the future is more likely to command finance than finance is to dominate industry.
By finance it shall be understood that we mean organized influence—in short, banking. Its occult authority has been seriously impaired. The high day of its priestcraft is gone.
Formerly it was consulted in war. You could not manage a war without a gold-chest: it was the banker who said whether that could be filled or not. Now one of the first steps you take in case of war is to suspend the bank, declare a moratorium, and print paper money to pass from hand to hand.
When the World-War started it was the opinion of finance that it could not last above ninety days: it could not be financed beyond that limit. It lasted four years and did not stop then for want of money.
After the War international finance was morally powerless to prevent the colossal mark swindle, Germany printing and selling all over the earth billions of paper marks that were to be flatly repudiated. Nor was it able to visit the slightest penalty upon the authors of this financial enormity, for immediately afterwards it was obliged, on political grounds, to float a large gold loan for Germany and thereby restore her to solvency and credit. In Germany finance was unable to prevent the industrial dynasts from appropriating to themselves all the middle-class wealth that was invested in bonds, mortgages, annuities, and savings banks: they simply borrowed it and then paid it back in worthless paper money.
It is very significant this humiliation of finance. In situations where the political will is dominant and in those where economic forces act alone the omens are the same. Henry Ford is the extraordinary instance of an industrialist who proceeds without benefit of finance. He creates his capital as he goes along; what he does not create he commands. He does not borrow.
VI
IN PERIL OF TRADE
So now what will happen? From the excessive power already existing to produce industrial commodities, from the continued increase of that power nevertheless for political and national reasons, from the raising of trade-barriers by one nation against another because every one fears the effect upon its own industries of receiving cheap goods from another, from this running of people out of the fields to tend more machines, from the amazing growth of urban tissue in the economic body—from all of this what follows?
The Italians suggest a bitter competition in terms of living, those to survive who will accept most patiently and at the lowest wage the drudgery of minding machines. That might go rather far; ultimately it comes to absurdity. To whom at last should they sell their goods? Not to the impoverished workers of other industrial countries, defeated in the struggle. To whom else? To the agricultural countries? But these, for the reasons we have seen, are tending as such to disappear. They are buying machines. Italy brings nothing to the solution. She is merely coming tardily to do what others have done to excess.