AN ANTIDOTE TO IMPERIALISM
A nation, though economically complete, in the sense that it could, if it desired, maintain its population upon its own resources may yet be lured into an imperialistic and warlike policy. Just as political disintegration leads to internal conflicts, disorders and finally foreign intervention, so an economic disequilibrium, by placing the interests of certain classes within the arena of international friction may evoke a struggle, which can have no other issue than war.
This is exactly the effect, for example, of a gross inequality of wealth and income. Such an inequality means that multi-millionaires, gaining far more than they can spend, are impelled to invest their surplus funds in outside ventures. The capital that can be profitably absorbed by industries manufacturing for home consumption depends upon the ability of the population to purchase food, clothes, houses, furniture, watches, and automobiles. If the population cannot or will not increase purchases at a rate commensurate with the increase of national savings, a vast capital must either be diverted to manufacturing for the export trade or must itself be exported. Neither of these deflections is in itself bad; in moderation, both are good. There is, however, a certain degree of intensity of competition for foreign trade and investment which means industrial war and the danger of military war. The wider the interval between national savings and national consumption, the more powerful and dangerous is this expulsive tendency of capital.
Such a tendency may arise in a country in which, despite an equality in wealth, the national savings are excessive, but the greatest danger is in countries in which the returns to capital, rent and business enterprise are large and the returns to labour small. The big profits come from the manufacture of articles of common use, and the home demand for such articles is limited by the consuming capacity of poor men. The surplus capital must therefore find a vent, and the larger this surplus capital, the more venturesome it grows and the more insistently it demands that the state back up its enterprises.
We may trace this development in the recent history of Great Britain. Though British wages rose during the half century ending in 1900, the consuming capacity of the masses was not sufficient to employ the rapidly expanding capital. British capital went everywhere; among other places to the Transvaal. There was more money in "Kaffirs" than in making socks for the British artisan, and if international friction resulted from this capital export, it was all the better, or at least none the worse, for the financiers. The men who controlled the Rand mines knew when shares were to rise and when they were to fall, and profited by their knowledge. Nor were war preparations disadvantageous. An extra Dreadnought helped British capital more than would the expenditure of the cost of such a vessel in increasing the wages of school teachers. Yet it was because school teachers and other wage-earners in Britain, as in many other countries, were poorly paid, that the accumulating capital of the nations was forced increasingly into foreign lands and into imperialistic ventures. Morocco, Egypt, Korea and Manchuria offered larger rewards than did the highly competitive businesses which depended on the custom of French, English and Russian peasants or wage-earners. The inequality in the distribution of wealth proved to be a stimulus to imperialistic competition.
Those who are satisfied with things as they are never tire of speaking of this distribution of wealth as an immutable thing, protected by economic laws more potent than legislative enactments. They insist that law cannot control the expansion of capital or the distribution of wealth. But our whole system of distribution is based on law. If England had not preserved entail and primogeniture, if France had not decreed the equal inheritance by all children, if the United States had not adopted a liberal land policy, the distribution of wealth in each of these countries would have been far different. Within wide limits the economic course of the nation can be controlled.
Such a peaceful programme for creating a better distribution of wealth, a wider consumption and therefore a larger employment of capital in industries for home consumption has the added advantage that it is a policy in complete harmony with the interests of great sections of the population. The average man desires peace feebly; he does not think of it day and night and is not willing to fight for it. But he is willing to fight for things which actually contribute more towards peace than do arbitration treaties. The demand of the workman for higher wages, shorter hours and better conditions is, whether the wage-earner knows it or not, a demand for international peace. Progressive income and inheritance taxes, the regulation of railroads and industrial corporations, the conservation of natural resources are all opposed to an imperialistic policy leading to war. In short the entire democratic struggle against the narrow concentration of wealth, by increasing the demand for capital within the country, tends to preserve us from a meddlesome, domineering, dangerous imperialism.
To increase the consumption of the masses of our people is easier for us than for Germany or England because of our wider economic base, our bulk, territory and immense potential wealth. To increase wages, we need not, like the crowded countries of western Europe, acquire new resources beyond our borders. We already have a place in the sun, and out of our waste can extract more than can Germany or France out of colonies for which they must fight. It is easier for us to increase industrial rewards because we now waste more in our unregulated scramble for wealth than Germany gains in her scientific, economical use of her smaller resources. Compared to industrial Germany we are a spendthrift nation. Had Germany our resources and numbers, she would be peaceful and rich; were we obliged to live on her narrow territory, we should be bellicose and impoverished.
Not that Germany has solved the whole problem; all she has learned is to be efficient. Her early poverty taught her to make a little go a great way, to combine the peasant's industry and parsimony with the far-flung plans of the business organiser. So capably has she done this that living conditions have improved as her population has increased. Where all nations have as yet failed, however, is in the distribution of the industrial product. In the end a gross inequality of wealth and income, as we find it in all developed countries, is another form of waste. It means fewer economic satisfactions, less true value. A few billion dollars added to the income of twenty thousand families is of less utility than when distributed among twenty millions. Inequality of wealth, moreover, involves low wages, over-work, child labour, insecurity, unemployment, preventable disease, premature death, in short, a bad economy. It also involves an inability on the part of the masses to consume the product of industries in which the wealthy invest.
The economic inequality in the United States does not as yet present the same imminent dangers as in certain European countries. Wealth, it is true, is most unevenly distributed,[[1]] but while incomes are also very unequal,[[2]] the rate of wages[[3]] and the returns to farmers and to small business men are far greater than in the industrial countries of Europe. Our statistics of consumption reveal an immense and constantly increasing demand for all kinds of articles and services. As compared with England or Germany the distribution of income in the United States permits a high standard of living and creates a vast demand for the use of capital in industries for home consumption.