Moreover, what advantage is it to the wage-earner to have his country's wealth exported beyond his reach? Concerning this movement towards absentee ownership of capital, the widest divergence of opinion prevails. The optimists among the investing classes find it all good and sanctified by its results. The exportation of capital, they hold, not only fructifies the waste places of the world but does not decrease the capital in the exporting country, since it raises the rate of interest and thus stimulates saving. But such a rise in the interest rate means an increase in the cost of living and a reduction in the real wages of labour. In so far as it goes into competitive industrial enterprises abroad, it lessens the opportunity of labour at home. Thus if British capital, exported to India, is used to erect cotton mills in Calcutta, India will import fewer cotton goods from England, and British capital will be employing Indian labour and throwing British labour out of employment. This situation is analogous to that which was created when Northern textile manufacturers, instead of increasing their New England plants, built mills in Georgia, thus transferring the demand for employment from the North to the South.
It is further contended by these opponents of imperialism that the export of capital is profoundly demoralising to the exporting nation, which ceases, in a real sense, to be industrial, and becomes financial. Gradually the nation, with a large fixed income derived from foreign labour, ceases to care for its export industry, loses its intensity and keen application to business, becomes conservative in the technique of production, and, being no longer interested in the development of home industries (since its gains come from abroad), converts hundreds of thousands of industrial wage-earners into liveried house-servants, who minister to the cultivated wants of a sport-loving and decoratively idle upper class.
The effect of this development upon England, the classic land of capital export, is portrayed in an acute study by Dr. Schulze-Gaevernitz.[[4]] The author shows how the steadily mounting income derived by Great Britain from foreign investments has led to a relative restriction of the field of employment in home manufacturing industries. In 1851 23 per cent. of the population of England and Wales were workers in the chief industries as compared with only 15 per cent. a half century later.[[5]] Imports increase; exports do not increase proportionately. An ever larger proportion of the population becomes rentiérs, "living on the sweat of coloured labour, whom it is their first interest to hold in political subjection." Some of these rentiérs, large and small, are wholly unoccupied or only half occupied. They are sleeping partners, briefless barristers, professors of professions which do not exist. To these income-receivers or rentiérs, whom Schulze-Gaevernitz estimates at a million, must be added enormous numbers of servants and lackeys, who are paid, though indirectly, from the Kimberley mines and investments in the Argentine. Upon the industry of the backward countries these idle and semi-idle people make increasing demands, and industry becomes a production of luxuries. In the meantime the nation falls behind in its competition with more purely industrial countries like Germany and the United States. In the machine industry, in ship-building, in applied chemistry England does not hold her own.[[6]] Her technique of production, her methods in commerce and banking become old-fashioned and ineffective; her invention (as measured by the issuance of patents) does not keep pace with that of her chief competitors. And all this conservatism does not inhere in the British character (for formerly the Briton revolutionised the world) but is attributable to the fact that Great Britain is pre-eminently a Rentnerstaat, a country of pensioners and creditors, increasingly independent and careless of its foreign export, and of the industries which formerly kept that export going.[[7]]
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.[[8]]
Those who advocate a complete cessation of the export of capital,[[9]] 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.