And the Edinburgh Evening News says, with editorial gloom: “The iron and steel trades have gone from us. When the fictitious prosperity caused by the expenditure of our own Government and that of European nations on armaments ceases, half of the men employed in these industries will be turned into the streets. The outlook is appalling. What suffering will have to be endured before the workers realize that there is nothing left for them but emigration!”
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That there must be a limit to the accumulation of capital is obvious. The downward course of the rate of interest, notwithstanding that many new employments have been made possible for capital, indicates how large is the increase of surplus value. This decline of the interest rate is in accord with Bohm-Bawerk’s law of “diminishing returns.” That is, when capital, like anything else, has become over-plentiful, less lucrative use can only be found for the excess. This excess, not being able to earn so much as when capital was less plentiful, competes for safe investments and forces down the interest rate on all capital. Mr. Charles A. Conant has well described the keenness of the scramble for safe investments, even at the prevailing low rates of interest. At the close of the war with Turkey, the Greek loan, guaranteed by Great Britain, France, and Russia, was floated with striking ease. Regardless of the small return, the amount offered at Paris, (41,000,000 francs), was subscribed for twenty-three times over. Great Britain, France, Germany, Holland, and the Scandinavian States, of recent years, have all engaged in converting their securities from 5 per cents to 4 per cents, from 4½ per cents to 3½ per cents, and the 3½ per cents into 3 per cents.
Great Britain, France, Germany, and Austria-Hungary, according to the calculation taken in 1895 by the International Statistical Institute, hold forty-six billions of capital invested in negotiable securities alone. Yet Paris subscribed for her portion of the Greek loan twenty-three times over! In short, money is cheap. Andrew Carnegie and his brother bourgeois kings give away millions annually, but still the tide wells up. These vast accumulations have made possible “wild-catting,” fraudulent combinations, fake enterprises, Hooleyism; but such stealings, great though they be, have little or no effect in reducing the volume. The time is past when startling inventions, or revolutions in the method of production, can break up the growing congestion; yet this saved capital demands an outlet, somewhere, somehow.
When a great nation has equipped itself to produce far more than it can, under the present division of the product, consume, it seeks other markets for its surplus products. When a second nation finds itself similarly circumstanced, competition for these other markets naturally follows. With the advent of a third, a fourth, a fifth, and of divers other nations, the question of the disposal of surplus products grows serious. And with each of these nations possessing, over and beyond its active capital, great and growing masses of idle capital, and when the very foreign markets for which they are competing are beginning to produce similar wares for themselves, the question passes the serious stage and becomes critical.
Never has the struggle for foreign markets been sharper than at the present. They are the one great outlet for congested accumulations. Predatory capital wanders the world over, seeking where it may establish itself. This urgent need for foreign markets is forcing upon the world-stage an era of great colonial empire. But this does not stand, as in the past, for the subjugation of peoples and countries for the sake of gaining their products, but for the privilege of selling them products. The theory once was, that the colony owed its existence and prosperity to the mother country; but today it is the mother country that owes its existence and prosperity to the colony. And in the future, when that supporting colony becomes wise in the way of producing surplus value and sends its goods back to sell to the mother country, what then? Then the world will have been exploited, and capitalistic production will have attained its maximum development.
Foreign markets and undeveloped countries largely retard that moment. The favored portions of the earth’s surface are already occupied, though the resources of many are yet virgin. That they have not long since been wrested from the hands of the barbarous and decadent peoples who possess them is due, not to the military prowess of such peoples, but to the jealous vigilance of the industrial nations. The powers hold one another back. The Turk lives because the way is not yet clear to an amicable division of him among the powers. And the United States, supreme though she is, opposes the partition of China, and intervenes her huge bulk between the hungry nations and the mongrel Spanish republics. Capital stands in its own way, welling up and welling up against the inevitable moment when it shall burst all bonds and sweep resistlessly across such vast stretches as China and South America. And then there will be no more worlds to exploit, and capitalism will either fall back, crushed under its own weight, or a change of direction will take place which will mark a new era in history.
The Far East affords an illuminating spectacle. While the Western nations are crowding hungrily in, while the Partition of China is commingled with the clamor for the Spheres of Influence and the Open Door, other forces are none the less potently at work. Not only are the young Western peoples pressing the older ones to the wall, but the East itself is beginning to awake. American trade is advancing, and British trade is losing ground, while Japan, China, and India are taking a hand in the game themselves.
In 1893, 100,000 pieces of American drills were imported into China; in 1897, 349,000. In 1893, 252,000 pieces of American sheetings were imported against 71,000 British; but in 1897, 566,000 pieces of American sheetings were imported against only 10,000 British. The cotton goods and yarn trade (which forms 40 per cent of the whole trade with China) shows a remarkable advance on the part of the United States. During the last ten years America has increased her importation of plain goods by 121 per cent in quantity and 59½ per cent in value, while that of England and India combined has decreased 13¾ per cent in quantity and 8 per cent in value. Lord Charles Beresford, from whose “Break-up of China” these figures are taken, states that English yarn has receded and Indian yarn advanced to the front. In 1897, 140,000 piculs of Indian yarn were imported, 18,000 of Japanese, 4500 of Shanghai-manufactured, and 700 of English.
Japan, who but yesterday emerged from the mediæval rule of the Shogunate and seized in one fell swoop the scientific knowledge and culture of the Occident, is already today showing what wisdom she has acquired in the production of surplus value, and is preparing herself that she may tomorrow play the part to Asia that England did to Europe one hundred years ago. That the difference in the world’s affairs wrought by those one hundred years will prevent her succeeding is manifest; but it is equally manifest that they cannot prevent her playing a leading part in the industrial drama which has commenced on the Eastern stage. Her imports into the port of Newchang in 1891 amounted to but 22,000 taels; but in 1897 they had increased to 280,000 taels. In manufactured goods, from matches, watches, and clocks to the rolling stock of railways, she has already given stiff shocks to her competitors in the Asiatic markets; and this while she is virtually yet in the equipment stage of production. Erelong she, too, will be furnishing her share to the growing mass of the world’s capital.