In this cosmopolitan division of labour, which destroys the old economic self-sufficiency of nations, England took the lead. A hundred years ago, when the British agriculturist sold his produce to the British manufacturer in return for finished wares, and foreign commerce was insignificant, the population was limited by the food it could produce. Every increase in the number of Englishmen meant recourse to less fertile fields, an increase in rents, a lowering of wages and a resultant pauperism. The hideous distress during the Napoleonic Wars and after was largely due to an excessive population striving to live upon narrow agricultural resources.
The alternative presented was to stop bearing children or find food abroad; stagnation or industrialism. If England (with Wales) could in 1821 barely support twelve millions, how could she maintain thirty-six millions in 1911? Only by going over to free trade, by raising her food and raw materials in countries where land was cheap, and employing her people in converting these into finished products. To-day three live in England better than one lived before; on the other hand, a large part of the food supply is raised abroad.
Had Great Britain literally become "the workshop of the world," manufacturing for sixteen hundred million inhabitants, there would have been no limit to her possible increase in population. No such national monopoly, however, was possible, or from a world point of view desirable. Belgium, France, Germany and later other thickly populated countries were also faced with the choice between stagnation and industrialism, and as English machines, English industrial methods and English factory organisation could be imported, these nations, one after another, went over to manufacturing, ceased to export food and began to import both food and raw materials, competing with Great Britain for industrial supremacy.
These competing industrial nations had a great common interest, to increase the total food and raw materials to be bought and therefore the manufactured products to be sold. The greater the development of foreign agriculture the better for industry in all these nations. To secure this agricultural base abroad, the nation was not compelled to establish its own colonies, for Belgium and Holland could buy food and raw materials even if the Congo and Java were nonexistent. As a consumer it made little difference to England whether she got her wheat from Russia or India, or her sugar from Germany or Mauritius, so long as the supply was plentiful, cheap and constant. Actually a large part of the food supply came from politically independent countries, the United States alone increasing its food exports from fifty-one millions of dollars in 1860 to five hundred and forty-five millions in 1900, and its cotton in equal ratio.
But as American economic development proves, it is difficult to maintain this common agricultural base. The agricultural nation, in the temperate zone, grows in population, converts itself into an industrial community, and not only consumes its own food and raw materials but draws upon the common agricultural fund of the older industrial nations. To-day the United States is rapidly lessening its food exports, is increasing its imports of sugar, coffee, tea, fish, and other foods, and is thus forcing industrial Europe to find a new agricultural base.
This conversion of agricultural into semi-industrial nations proceeds rapidly. Switzerland, Austria, Italy, Japan, even Russia, increase their manufacturing, and intensify the demand for the world's supply of raw materials. It is a normal and in present circumstances an inevitable process. When, however, the exportable supply of food and raw material of an agricultural country dwindles, a new equilibrium must be established. New states, territories, colonies, hitherto exporting but little agricultural produce, are opened and their production stimulated. From Russia, the Danube Valley, Canada, Australia, Brazil, Argentine and many parts of Africa, new supplies of raw material are secured. Fresh sources are also discovered for the production of fodder, flax, cotton, wool and ores. It is an equilibrium, forever destroyed and forever re-established, between an increasing number of industrial nations with increasing populations and new agricultural bases, upon which the superstructure of the world's export industry is reared.
It is not, however, by the sale of present manufactured goods alone that the industrial nations can secure their foreign food. One may own abroad as well as earn abroad. An Englishman with a thousand acres in North Dakota or Alberta may export the wheat that he raises exactly as though the farm were in Devon. If he owns shares in the Pennsylvania Railroad, he may with his dividends purchase wheat, which he may ship to his own country without exporting commodities in return. The true economic dominion of England extends wherever Englishmen hold property. Subject to the laws of the land where the property is held, this ownership gives the same claim to the product of industry as does an investment at home.
As we read the imperialistic literature of to-day, we discover that the chief emphasis is laid on the great value of new countries as a field for this sort of profitable investment. Investment, not commerce, is the decisive factor, and money is to be made out of opportunities to build railroads, open mines, construct harbours and irrigate arid districts. The diamond mines of the Transvaal were more attractive to the English than the chance to trade, and what was of immediate value in Morocco were the iron mines and future railways and not the right to sell tallow candles to the Berbers.
In large part this foreign investment of capital has the effect of broadening the agricultural base. While to the individual investor, capital export means getting eight per cent. instead of four, and to the promoter, a chance to make a few hundred thousand dollars or pounds, to the industrial nation it means that a fund is created which will help pay for a steady flow of agricultural products and raw materials. To the whole complex of industrial nations and to the world at large it means even more. The export of capital increases the capacity of the agricultural nation to serve as a feeder to all industrial peoples. It provides cheap transportation and improved agricultural machinery. Had Great Britain not invested in American railways during the fifties the United States would have exported less food to Europe in the seventies. Freight rates dropped and the industrial nations were flooded with cheap wheat. British capital in American railways aided British manufacturing more than if the same capital had been placed at home. To-day for the same reason the process continues elsewhere. In Russia, South East Europe, Canada, Australia, South America, Asia and Africa, capital, furnished by the industrial countries, is increasing the production and exportation of food and of raw materials, and is thus indirectly promoting the industry of western Europe.[[4]]