The World in Chains - Some Aspects of War and Trade
by John Mavrogordato
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But should we stay to speak, noontide would come, And thwart Silenus find his goats undrawn, And grudge to sing those wise and lovely songs Of Fate, and Chance, and God, and Chaos old, And Love, and the Chained Titan's woeful doom, And how he shall be loosed, and make the earth One brotherhood....

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First Published 1917

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There may be some exaggeration in this book. I firmly believe that England and her Allies entered this War with the noblest intentions. If I have done less than justice to these, it is because my chief purpose in this essay has been to express my equally firm belief that all these fine emotions have been and are being exploited by the basest forms of Imperialism and Capitalism.

J. M.

January 1st, 1917.













































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[Greek: moros de thneton ostis ekporthon poleis naous de tumbous th, iera ton kekmekton, eremiadous autos oleth usteron.]

Euripides: Tro. 95.


The Massacre of Colleagues

The existence of war in the modern world is primarily a question for the moral philosopher. It may be of interest to the anthropologist to consider war as a gallant survival with an impressive ritual and a code of honour curiously detached from the social environment, like the Hindu suttee; or with a procedure euphemistically disguised, like some chthonic liturgy of ancient Athens. But it is a problem too broad for the anthropologist when we consider that we have reached a stage of civilisation which regards murder as the most detestable of crimes and deprives the murderer of all civil rights and often even of the natural right to live: while in the same community the organised massacre of our colleagues in civilisation is not only tolerated but assumed to be necessary by the principal expositors of law and religion, is the scientific occupation of the most honoured profession in the State, and constitutes the real sanction of all international intercourse.


The Widening Sphere of Morality

The existence of war stimulates the astonished watcher in the tower of ivory to examine the development, if any, of human morality; and to formulate some law of the process whereby political man has been differentiated from the savage.

Morality being a relation between two or more contracting parties, he will notice that the history of mankind is marked by a consistent tendency to extend this relation, to include in the system of relationships more numerous and more distant objects, so that the moral agent is surrounded by a continually widening sphere of obligations.

This system of relationship, which may be called the moral sphere, has grown up under a variety of influences, expediency, custom, religious emotion and political action; but the moral agents included in it at any given time are always bound to each other by a theoretical contract involving both rights and duties, and leading each to expect and to apply in all his dealings with the others a certain standard of conduct which is approximately fixed by the enlightened opinion of the majority for the benefit of the totality.

The moral sphere then is a contractual unit of two or more persons who agree to moderate their individual conduct for their common good: and the State itself is only a stage in the growth of this moral unit from its emergence out of primitive savagery to its superannuation in ultimate anarchy, commonly called the Millennium. The State indeed is a moral sphere, a moral unit, which has long been outgrown by enlightened opinion; and the trouble is that we are now in a transition stage in which the boundaries of the State survive as a limitation instead of setting an ideal of moral conduct.[1]


[Footnote 1: This conception of the gradually extending and still to be extended sphere of morality, or from another aspect of law, was implied, I think, by Lord Haldane in his Address on Higher Nationality. (The Conduct of Life, and Other Addresses, p. 99.)

In this address Lord Haldane distinguished in the State three sanctions of conduct.

1. Law.

2. The Moral Sanction, Kant's Categorical Imperative "that rules the private and individual conscience, but that alone."

3. The force of social habit or sittlichkeit, "less than legal and more than merely moral, and sufficient in the vast majority of the events of daily life, to secure observance of general standards of conduct without any question of resort to force." The Lord Chancellor adds, "If this is so within a nation, can it be so as between nations?"

But although Lord Haldane distinguishes three sanctions of conduct, the resultant line of conduct is one. And it seems to me unimportant to analyse the sanctions if we can only estimate the sum of their obligations. It is this totality of obligations, the whole systematisation of conduct in human life, that in my adumbrated analysis I call the moral sphere.

Curiously enough Lord Haldane was hounded from the Government on the paradoxical ground that he knew too much about the enemy against whom we are fighting. It is certainly true that he has a better understanding than any other statesman of the Prussian perversion of aristocracy and of the true function of science in the State. But it is too much to hope that philosophers should remain Ministers of a State in which journalists are become dictators.]


The Receding God

I don't know that it is necessary to drag God into the argument. But if you like to regard God as the sanction and source of morality, or if you like to call the moral drift in human affairs God, it is possible to consider this "Sphere of Morality" from His point of view. His "point of view" is precisely what, in an instructive fable, we may present as the determining factor in morality. When He walked in the garden or lurked hardly distinguishable among the sticks and stones of the forest, morality was just an understanding between a man and his neighbour, a temporary agreement entered on by any two hunting savages whom He might happen to espy between the tree-trunks. When He dwelt among the peaks of Sinai or Olympus, the sphere of morality had extended to the whole tribe that occupied the subjacent valley. It came to include the nation, all the subjects of each sovereign state, by the time He had receded to some heavenly throne above the dark blue sky. And it is to be hoped that He may yet take a broader view, so that His survey will embrace the whole of mankind, if only we can banish Him to a remoter altitude in the frozen depths of space, whence He can contemplate human affairs without being near enough to interfere.

The moral of this little myth of the Receding God may be that the Sphere of Morality is extended in inverse proportion to the intensity of theological interference. Not that theology necessarily or always deliberately limits the domain of morality: but because the extension of moral relations and the relegation of anthropomorphic theology are co-ordinate steps in human advancement.

Sec. 4

The Philosopher looks at Society

The philosopher is apt to explain the growth and interrelation of ideas by tabulating them in an historical form, which may not be narrowly, chronologically, or "historically" true. The notion of the Social Contract may be philosophically true, though we are not to imagine the citizens of Rousseau's State coming together on a certain day to vote by show of hands, like the members of the Bognor Urban District Council. So we may illustrate a theory of moral or social evolution by a sort of historical pageant, which will not be journalistically exact, but will give a true picture of an ideal development, every scene of which can be paralleled by some actually known or inferred form of human life.

Sec. 5

Homo Homini Lupus

Our imagination, working subconsciously on a number of laboriously accumulated hints, a roomful of chipped or polished stones, the sifted debris of Swiss palafittes, a few pithecoid jawbones, some painted rocks from Salamanca, produces a fairly definite picture of the earliest essentially human being on earth: and we recognise a man not unlike one of ourselves; with a similar industry interrupted from time to time by the arbitrary stirrings of a similar artistic impulse; so close to us indeed that some of his habits still survive among us. Some of us at least have made a recreation of his necessity, and still go hunting wild or hypothetically wild animals for food. But when this primeval hunter emerged from his lair in the forest or his valley-cave, he was prepared to attack at sight any man he happened to meet: and he thought himself a fine fellow if he succeeded in cracking the skull of a possible rival in love or venery. This was the age of preventive aggression with a vengeance. We still feel a certain satisfaction in a prompt and crushing blow, and in the simplicity of violence. But we no longer attack our neighbour in the street, as dogs fight over a bone or over nothing at all: though some of us reserve the right to snarl.

Sec. 6

Tribe against Tribe

But this fighter's paradise was too exciting to last long; and indeed it is hard to visualise steadily the feral solitary man who lived without any social organisation at all.[2] Consideration like an angel came and did not indeed drive the offending devil out of him but taught him to guide it into more profitable channels, by co-operating with his neighbour. When a man first made peace with the hunter in the next cave in order to go out with him against the bear at the head of the valley, or even to have his assistance in carrying off a couple of women from the family down by the lake, on that day the social and moral unit was constituted, the sphere of morality, destined, who knows how soon, to include the whole of mankind in one beneficent alliance, began with what Professor McDougal has called "the replacement of individual by collective pugnacity." The first clear stage in this progress is the tribe or clan, the smallest organised community, sometimes no larger than the self-contained village or camp, which can still be found in the wild parts of the earth. Tribe against tribe is the formula of this order of civilisation. Within the limits of the community man inhibits his natural impulses and settles his personal disputes according to the rules laid down by the headman or chief. But once outside the stockade he can kill and plunder at will, though owing to the similarly strong organisation of the next village he will usually reserve his predatory exploits for the official and collective raids of village against village and tribe against tribe.

Of course the family is a step leading up to the tribal stage of morality, and it may be that the idea of incest marks the social stage in which the moral sphere was conterminous with the family, corresponding to the institution of exogamy in the moral system of the tribe.

It may be added that even in the modern family the feeling which unites the members often consists less, very much less, of affection than of a sort of obligation to hang together for mutual defence.


[Footnote 2: Cf. Plato's myth of Protagoras (Prot. 322 B ff.).]

Sec. 7

The City State

The City State, self-contained, self-supporting, truly democratic, is marked by a similar pugnacity. Only full citizenship conferred full moral rights, and any ferocity could be justified in war against another city. Athens wore herself out in the long struggle with Sparta, and Greece was lured to destruction by the devil of Imperialism, whose stock argument is to suggest that a State can extend its rights without extending its obligations. But the limitation of the moral sphere by the boundaries of the city is less apparent in the Greek States, because in the historical period at least they were already in transition to a larger view, and enlightened opinion certainly believed in a moral system which should include all Greek States, to the exclusion of course of all "barbarians": but this larger view was even more definitely limited, and the demarcation of those within from those outside the moral sphere was never more sharply conceived, than in the difference commonly held to exist between Greeks and Barbarians. Yet even so Greece can maintain her pre-eminence in thought; for Plato and Euripides at least glimpsed the conception, by which we do not yet consent to be guided, of the moral equality of all mankind.[3]

For all these reasons the City State as a limited moral sphere is better seen perhaps in Mediaeval Italy, where, I imagine, a Florentine might kill a native of Pisa whenever he liked; whereas if he killed a fellow Florentine he risked at least the necessity of putting himself outside the moral sphere, of having that is to leave Florence and stay in Pisa till the incident was forgotten.[4]


[Footnote 3: Even Aristotle probably had some suspicion of it; so in his anxiety to justify the institution of slavery he had to make out that slaves were not men at all but only machines.]

[Footnote 4: Duelling might be classified theoretically as a survival of the wolfish condition sketched in Sec. 5. But the persistent institution of single combat should not be regarded as in itself a survival, but rather as an outlet for the surviving instinct, a concession justified by political or social considerations that vary from age to age. Even Plato in his Republic (465 A) agreed that the citizen might in certain circumstances take the law into his own hands, probably regarding such action as a sort of equity, what Aristotle calls [Greek: epanorthoma nomou elleipei dia ton katholou], a rectification of certain special cases not covered by law.

In modern states again, e.g. in Austria and Germany, duelling is not so much a survival as a corollary of militarism, which involves a fetichistic veneration of the military uniform or of military "honour."]

Sec. 8

The Nations of Europe ferae naturae

In the next and latest stage in the expansion of the moral system we find it again conterminous with the frontiers of the State. But it is now no longer the small city state of Ancient Greece and Mediaeval Italy, but the large political unit, roughly and hypothetically national,[5] which constitutes the modern State, whether Kingdom, Republic, or Empire. I have called this the latest stage in the extension of the sphere of morality because it is the one which actually prevails and limits our national conduct. For the paradox of legal murder and massacre in the modern world is resolved as soon as we realise that war is a conflict between two or more isolated moral systems, each of which only regards violence as a crime to be suppressed within the limits of its own validity. International warfare in its crudest form is only a manifestation of the original wolfish state of man, the "state of nature" which exists between two moral agents who have no moral obligation to each other (but only to themselves). The fact that the primitive savage was an individual moral agent having no moral obligation to anyone but himself, while the modern fighting nation is a moral agent of who knows how many millions, does not alter the essential character of the conflict.


[Footnote 5: See below, Chapter IV, Sec. 4. Nationalism True and False.]

Sec. 9

The Convenience of Diplomacy

As a matter of fact this original wolfish attitude of nations is already obsolete, if it ever existed. The expansion and growth of political and moral relations is a gradual process, and the fact that for the sake of brevity and clearness we fix and describe certain arbitrary points in that process must not be taken to imply that it is discontinuous. Anyhow there is no doubt that the specifically wolfish attitude of one nation to another can hardly be found in its pure state, being already tempered and mitigated by the practice and custom of diplomacy: and this diplomatic mitigation, however superficial, does something to break down that windowless isolation which is the essential cause of violence between two independent moral entities. Pacificists of the democratic school sometimes present a fallacious view of international diplomacy, and almost imply that the present war was made inevitable by the fact that Viscount Grey was educated at Harrow, or that peace could have been preserved with Germany if only Sir Edward Goschen had begun life as a coal heaver, or had at least been elected by the National Union of Boilermakers. Their panacea they vaguely call the democratic control of Foreign Affairs, though it is not clear why we should expect twenty million still ignorant voters to be more enlightened than one educated representative who is, as a matter of fact, usually so much oppressed by a due sense of his responsibility that he is in danger of bungling only from excessive timidity. The experience of the Law Courts shows that twelve men, be they never so good and true, cannot at present be trusted to weigh and discriminate as nicely as one[6]; and the fact that the Daily Mail has the largest circulation of any morning paper is a sufficient mark of the present capacity and inclination of the majority to control public affairs more directly than they do. It is said that the secrecy of diplomatic affairs breeds an atmosphere of suspicion; and it might be said with equal truth that all secrecy of every kind is always and everywhere the most unnecessary thing in the world.[7] But the fundamental fallacy of all these arguments is that they treat diplomacy as an essential of international relations, whereas it is only an accident, a trapping, a convenience, or a common form. Its defects are the result and the reflection of national opinion. Diplomatists are no more responsible for the defects of international relationship than seconds are responsible for the practice of duelling: and we may note incidentally that duels are if anything more frequent when the place of the seconds in estimating their necessity is taken by a democratic court of honour.


[Footnote 6: The duties of a jury are, of course, very carefully limited by law. But even in this reduced sphere they are remarkable chiefly for their incompetence, prejudice, inattention, and stupidity. See particularly Andre Gide's Souvenirs de la Cour d'Assises, all the implied criticisms in which apply, mutatis quibusdam mutandis, with equal force to English and indeed to all juries.]

[Footnote 7: It is possible to argue, though of course impossible to prove, that if every diplomatic document of recent years had been immediately made public, the relations between the Powers would have remained very much what they are with "secret diplomacy"; that "public diplomacy" would if anything have intensified the existing jealousy and distrust. As a matter of fact anyone who takes the trouble can approximately discover the diplomatic situation existing at a particular moment between any two Powers, even if he cannot know the verbal text of a particular treaty. And if the supporters of "public diplomacy" reasonably point out that "publicity" is desired only as a means to ensure the democratic control of Foreign policy, the answer is that the only way to ensure the democratic control of diplomats or any other public servants is to educate the people.]

Sec. 10

A Note on Democracy

The outcry for "democratic" control demands, I think, a note, if not a volume,[8] on the limitations of democracy. We are all, I suppose, agreed nowadays that the government of the future must be democratic, in the sense that every adult has a right to full citizenship, and every citizen can claim a vote. But it is obviously impossible for a modern State to be governed directly by the voices of say fifty or a hundred million citizens: there must always be a small legislative and a still smaller executive body; and these bodies should obviously be composed of the finest and most capable citizens. If then Aristocracy means, as it does mean, a government of the whole by the best elements, it follows that we are all equally agreed that the government of the future must be aristocratic. The solution of this antinomy is of course that democracy is not an end in itself, but only a means for the selection and sanction of aristocracy.[9] The best elements in the population can only come to the top if every man has an opportunity of using his voice and his intelligence. We may note in passing that a common objection, raised by writers like Emile Faguet, to the effect that democracy puts a premium on incompetence by choosing its officials almost fortuitously from the mob, is the exact opposite of the truth. It is our present regime that leaves the selection of our rulers to the chances of birth or wealth or forensic success. Real democracy will stimulate the selection of the best, just as trade union standardisation of wages encourages the employment of the better workmen.[10]


[Footnote 8: Such a volume or something very much like it has actually made its appearance, since these lines were written, in Professor Robert Michels' Political Parties (Jarrold, 1916).]

[Footnote 9: Cf. Bernard Shaw, in Pease, History of the Fabian Society, p. 268: "Sooner or later, unless democracy is to be discarded in a reaction of disgust such as killed it in ancient Athens, democracy itself will demand that only such men should be presented to its choice as have proved themselves qualified for more serious and disinterested work than 'stoking up' election meetings to momentary and foolish excitement. Without qualified rulers a Socialist State is impossible."]

Sec. 11

Diplomacy not bad in itself

The real importance of diplomacy, as I have said, is in the fact that it is a mitigation of primary ferocity, a symptom of readiness to negotiate, a recognition of the fact that disputes need not be settled by immediate violence: and as such it points to a time when war may be superseded, as personal combat has been superseded by litigation. The man who puts a quarrel with his neighbour into the hands of a legal representative is a stage higher in social civilisation than the man who fights it out at sight. Diplomats are the legal representatives of nations—only there is no supernational court before which they can state their case.

Of course, it is perfectly true that the ultimate sanction of diplomacy is always force, that international negotiations may always be resolved into a series of polite threats, and that the envoy of the small and weak nation rarely has any influence. Indeed there are few less enviable situations than that of the minister of a very small State at the court of a very large one. But the mere fact that force is their sanction does not ipso facto dispose of diplomatic and arbitrational methods. We all know that the force at the disposal of the Sovereign is the ultimate sanction of Law. But that force never has to be fully exerted because there is a common consent to respect the Law and its officers.


[Footnote 10: Cf. Webb, Industrial Democracy, p. 718.]

Sec. 12

Manners no Substitute for Morals

The real difference between legal methods and the methods of diplomacy (in which I here include international conversations of every sort) is that the latter take place, as it were, in a vacuum. There is no Sovereign, no common denominator, no unifying system in which both parties are related by their common obligations. They exist and act in two separate moral spheres, and no real intercourse is possible between them. For all their ambassadors and diplomatic conferences the nations of Europe are only wolves with good manners. And manners, as we all know, are no substitute for morals.

Sec. 13

War a Moral Anachronism

Thus we come back to our thesis that war is not only possible but inevitable so long as the extent of the moral sphere is conterminous with the frontiers of the State. But merely to explain laboriously that all this organised killing is not really a paradox but the natural accompaniment of a certain stage of moral development, and to leave it at that, would be rather to exaggerate our philosophic detachment. The point is that we are long past the stage of regarding any but our fellow-subjects as moral outlaws. For some years, to say the least, it has been generally received that the sphere of morality is co-extensive with mankind. In spite of certain lingering exceptions, it is to-day a commonplace of thought that every human being on the earth is our colleague in civilisation; is a member that is of the human race, which finding itself on this earth has got somehow to make the best of it; is a shareholder in the human asset of self-consciousness which we are called upon to exploit. It would certainly be hard to find a man of what we have called enlightened opinions who would not profess, whatever his private feelings, that it is as great a crime to kill a Hottentot or a Jew as to kill an Englishman. With certain lingering exceptions then we already regard the foreigner as a member of our own moral system. The moral sphere has already extended or is at least in course of extension to its ultimate limits: and war is a survival from the penultimate stage of morality. War, to put it mildly, is a moral anachronism. War between European nations is civil war. Logically all war should be recognised at once, at any rate by enlightened opinion, as the crime, the disaster, the ultimate disgrace that it obviously is. Why then do we cling to the implications of a system that we have grown out of? Why do we affect the limitation of boundaries that have been already extended? Or is our prison so lovely that though the walls fall down we refuse to walk out into the air?


A sociologist wrote to the Vali of Aleppo, asking: What are the imports of Aleppo? What is the nature of the water-supply? What is the birth-rate, and the death-rate?

The Vali replied: It is impossible for anyone to number the camels that kneel in the markets of Aleppo. The water is sufficient; no one ever dies of thirst in Aleppo. How many children shall be born in this great city is known only to Allah the compassionate, the merciful. And who would venture to inquire the tale of the dead? For it is revealed only to the Angels of death who shall be taken and who shall be left. O idle Frank, cease from your presumptuous questioning, and know that these things are not revealed to the children of men.

The Bustan of Mahmud Aga el-Arnauty.

Sec. 1

The Armament Ring

What, in short, are the forces that make for the anachronistic survival of war—apart of course from the defect that it is always with us, the habit of inertia, sometimes called Conservatism?

The obvious answer is not, I think, the correct one. At least it is correct as far as it goes, but leaves us very far from a complete explanation of this unpleasant survival. So scandalous is the interrelation of the armament firms[11] which has developed the world's trade in munitions and explosives into one obscene cartel; so cynical is the avidity with which their agents exchange their trade secrets, sell ships and guns, often by means of diplomatic blackmail, to friend or foe alike, and follow those pioneers of civilisation the missionary, the gin merchant and the procurer,[12] into the wildest part of the earth; so absurd on the face of it is the practice of allowing the manufacture of armaments to remain in the hands of private companies; that it is very tempting to see in the great Armament Firms the principal if not the only cause of modern war. Examiners of German militarism, most of them stupid enough to quote Nietzsche, may be pardoned for emphasising the political influence of Krupp; and since every great Power has a more or less efficiently organised Krupp of its own, it would be permissible to suggest that war would be already obsolete but for the intensive cultivation it receives for the benefit of Krupp, Creusot, Elswick and the rest. But it would be wrong; our syllogism would have a badly undistributed middle. It is true that Krupp in particular, who is the actual owner of more than one popular German newspaper, and other armament firms in a smaller degree, exercise an enormous influence on national opinion, create their own markets by the threat of war, and would go bankrupt if wars should cease. You may also say that their shareholders live by prostituting the patriotism of their fellow-citizens: in short, you may denounce them with the most expensive rhetoric to be had without doing them any injustice. But the fact remains that their position with regard to war is exactly analogous to that of the great breweries with regard to drunkenness. They live by taking advantage of human weakness. It is quite accurate, therefore, to describe their earnings as immoral, but they are no more the cause of the immorality they exploit and undoubtedly encourage, than makers of seismological instruments are responsible for the occurrence of earthquakes. The interests of one trade alone, however powerful in itself, would never be strong enough to plunge a nation into war. They are, of course, accessories to the crime; but the militarism they are guilty of fostering has other primary explanations.


[Footnote 11: Several books have been published giving details of the Armament Ring and international "Kruppism." I don't think that the language here used does any injustice to the facts.]

[Footnote 12: See below, Sec. 7.]

Sec. 2


In this brief investigation of the possible causes of war, it must be understood that what we want to find is what is called a "sufficient reason" for its continued existence. The armament trades may supply the means, the occasion, the stimulant, but their relation to it is not essentially causal. Many writers of another school have attempted to prove that the sufficient reason of war is a beneficent function of which they believe it to be capable. This imaginary function is none other than that of improving the race, and we may admit at once that, if there were the slightest scientific basis for such a belief, the bloodiest war would be morally justified, and it would be the religious duty of every individual to kill as many as possible of his fellows for the benefit of their descendants. But of course modern warfare so far from improving the race must sensibly exhaust it. In ancient Sparta, and generally whenever the conditions of warfare approximated to those of personal combat, courage and the allied characteristics of mental as well as of physical nobility must have had a survival value; whereas in modern warfare which makes for the indiscriminate extermination of all combatants, the result is exactly reversed. Our semi-scientific militarists forget that the "survival of the fittest"[13] is in nature essentially a process of selective elimination; and modern war is a process of inverted selection which eliminates the brave, the adventurous and the healthy; precisely those members of the community who are best fitted to survive, that is to propagate their kind, in the ordinary environment of political life. Conscription, indeed, spreading a wider net than the voluntary system, may be described as an institution for exposing the best citizens of a state to abnormal risks of annihilation. As a matter of historic fact we are told, though I don't know on what authority, that the Napoleonic wars, how much less deadly than our own, reduced by an inch the average height of the French nation.

So much, in brief, for the "scientific" justification of war. It is evident that by the eugenic argument war could be defended only if we agreed to send into battle precisely those men whom our recruiting officers disqualify. A good deal might be said, from the sociologist's point of view, in favour of a system of cathartic conscription which would rejuvenate England with a watchword of "The Unfit to the Trenches."


[Footnote 13: They usually add to their mental confusion the elementary blunder of using the word "fittest" in a moral instead of in its biological sense.]

Sec. 3


If again there were any evidence to show that war and war alone kept alive the spirit of true patriotism, it would be less easy to denounce its manifold wickedness. For true patriotism, although like all passionate emotion it involves a certain mental distortion, a slight disturbance of the rational orbit, is yet one of those happy diseases which relieve the colourlessness of strict normality. It is a magic, a glamour, of the nature of personal affection, which only great poetry can fully express, and volumes of bad poetry cannot quite destroy. It has besides a real political value, binding the State together, and giving it a stronger moral coherence than can be attained by any legal or constitutional authority; a fact that is illustrated by those distressful countries in which its limits are not conterminous with the political boundaries of the State. I am inclined to think that just because true patriotism is of the nature of a personal affection, it is an emotion that cannot be inspired by an empire, any more than personal affection can be inspired by a corporation or a joint-stock company.[14] Certainly Imperialism more often gives rise to a sentimental worship of force and a certain promiscuous lust for mere extension of territory which are quite alien to the steady devotion of the patriot to the land he knows.[15]

Unless one be a poet, it is difficult, as may perhaps be gathered from the preceding paragraph, sufficiently to praise genuine patriotism without falling into vague rhetoric. But I submit that there is nothing to show that this political emotion is created, stimulated, or even discovered by war. Actually it seems that the reverse is the case, if one may judge by the fact that war is invariably accompanied by an overwhelming outbreak of every spurious form of patriotism that was ever invented by the devil to make an honest man ashamed of his country. True patriotism is a calm and lovely orientation of the spirit towards the vital beauty of England. It has no noisy manifestations and consequently one may not be able to find it among the crowds who shout most loudly for war.

One finds instead a sort of violent fever and calenture which not merely deflects, as any emotion may, but totally inhibits the rational operations of the mind. The newspapers supply a legion of witnesses.

Thus the Evening Standard perorates against some pacificist lecturer (who had attempted to clear his views from all sorts of misrepresentations) with the magnificent comment that he had not "repudiated his remarks as to the pleasure which the tune of the Austrian National Anthem gave him."[16] But I should weary you were I to transcribe a tithe of the stupid remarks made by persons in authority under the influence of war. The record, I believe, in England is held at present by Mr. Bodkin, K.C.

It may be said of course that men, and newspapers, are equally stupid in time of peace; and I fear that fundamentally this is true. War does not change their nature, but only brings to the bubbling surface the dregs and vileness and scum. War does not change any one's nature; and that is why it is vain to expect that under its influence those crowds will love their country who never loved anything before. But if war cannot create it may at least be supposed to discover and test the existent patriotism of the nation. And this supposition is corroborated at first sight by the realisation that hundreds of thousands, that actually millions of previously ordinary young men have implied by enlisting their willingness to die for England. One might, of course, reason that no individual recruit really believes he is going to be killed, that each boy thinks he will be one of the lucky ones who escape all the bullets unhurt to enjoy an honoured return, that recruiting would have failed entirely if the barracks were explicitly a grave and enlistment the certainty of violent death or mutilation. But somehow I don't think that would be a fair argument. It is more pertinent if less easy to remember that a readiness to die for one's country is not the highest form of political virtue. If it be, as it is, a solemn and wonderful thing to be willing to die for the salvation (ex hypothesi) of England, it must be much more wonderful and solemn to be willing to die in order slightly to increase the income of one's family. And every schoolboy knows that the Chinaman of the old regime was willing to have his head cut off for the payment of a few dollars to his next of kin. Let no one ever deny our soldiers the honour of their courage and nobility; but the fact remains that the readiness to die for England is a less adequate test of patriotism than a readiness to live for England; and if the readiness to live for the State rather than for private interests had been for a hundred years a social virtue whose votaries could be numbered by the million, then indeed England would be to-day a nation worth dying for.


[Footnote 14: If anyone were to suggest that this is disproved by the unparalleled nobility of Australians, New Zealanders, Canadians and Indians in the present campaign, I should reply that they are actuated by devotion not to the Empire but to England, not to the Company but to the Chairman of the Company. This may be a quibble, but I think the distinction is real. Anyhow, I leave it at that, as the point has no primary relevance.]

[Footnote 15: See below, Chapter IV, Sec. 5.]

[Footnote 16: The paragraph is worth preserving in its entirety: "Mr. W. N. Ewer, who lectured at Finchley for the Union of Democratic Control, has explained that the report which we published of his speech is unfair, and that he is really in substantial agreement with Mr. Asquith. This is disingenuous, and Mr. Ewer knows it is. He has not repudiated the correctness of the report, which stated that he dilated on the danger of British navalism, and declared that we must give up singing 'Rule Britannia!' nor has he repudiated his remarks as to the pleasure which the tune of the Austrian National Anthem gave him. Does he think that Mr. Asquith would substantially agree with that? Or the country?"—The Evening Standard, July 26, 1915.]

Sec. 4

The "Moral Test"

The theory that war is beneficial as a moral test, a furnace in which character is proved—ut fulvum spectatur in ignibus aurum—is that generally adopted by the Christian Churches, who may be said without disrespect to have taken every advantage of their founder's unique reference to the sword. I cannot help thinking that there is something fundamental in this ecclesiastical advocacy of war; that some psychological theory could be outlined to correlate this almost uniform advocacy with the facts that such religious men as Tennyson and Ruskin were among the loudest in their support of the Crimean War, that such a militarist as Rudyard Kipling in his best work (in Kim, in Puck of Pook's Hill and the intercalated poems, in the most successful of his short stories) shows himself to be at heart a deeply religious mystic; and that in France the very active Clerical party, one consequence of a disestablished Church, is always closely supported by the Chauvinists. In many cases, however, I have no doubt that the pious Christian, finding himself confronted with war, and not having the moral courage or the political detachment to condemn it, only applies automatically to its justification the arguments which he habitually uses to explain the existence of evil and pain. It is certain at least that the theories of war as a Moral Test or a School of Character bear a strong resemblance to the commonplaces of religious consolation which almost any good Christian will offer to the bereaved and afflicted. Any one who has seen an innocent friend slowly tortured to death by some vile disease will know the futility of the Christian defence (for these religious consolations amount theologically to a defence) that pain ennobles the character and "proves" the moral courage of the sufferer.[17] The leading fallacy of the defence that war, or pain, is valuable as a moral test is akin to the common misunderstanding of the word "prove" in the saying that "the exception proves the rule"; the truth being that a strong and noble character, one of whose corollary qualities is a capacity to bear pain, is not less strong and noble if it is never called upon to exercise that capacity. The San Francisco earthquake was not a blessing in disguise because it happened to "test" and "prove" the strength and flexibility of modern American architecture.


[Footnote 17: I cannot help reproducing here a letter which originally appeared in the Manchester Guardian at the time of the Boer War, and is quoted by Mr. Norman Angell in The Great Illusion, p. 281.

"SIR,—I see that 'The Church's Duty in Regard to War' is to be discussed at the Church Congress. This is right. For a year the heads of our Church have been telling us what war is and does—that it is a school of character; that it sobers men, cleans them, strengthens them, knits their hearts; makes them brave, patient, humble, tender, prone to self-sacrifice. Watered by 'war's red rain,' one Bishop tells us, virtue grows; a cannonade, he points out, is an 'oratorio'—almost a form of worship. True; and to the Church men look for help to save their souls from starving for lack of this good school, this kindly rain, this sacred music. Congresses are apt to lose themselves in wastes of words. This one must not, surely cannot, so straight is the way to the goal. It has simply to draft and submit a new Collect for war in our time, and to call for the reverent but firm emendation, in the spirit of the best modern thought, of those passages in Bible and Prayer Book by which even the truest of Christians and the best of men have at times been blinded to the duty of seeking war and ensuing it. Still, man's moral nature cannot, I admit, live by war alone; nor do I say with some that peace is wholly bad. Even amid the horrors of peace you will find little shoots of character fed by the gentle and timely rains of plague and famine, tempest and fire; simple lessons of patience and courage conned in the schools of typhus, gout, and stone; not oratorios, perhaps, but homely anthems and rude hymns played on knife and probe in the long winter nights. Far from me to 'sin our mercies,' or to call mere twilight dark. Yet dark it may become; for remember that even these poor makeshift schools of character, these second-bests, these halting substitutes for war—remember that the efficiency of every one of them, be it hunger, accident, ignorance, sickness, or pain, is menaced by the intolerable strain of its struggles with secular doctors, plumbers, inventors, schoolmasters, and policemen. Every year thousands who would once have been braced and steeled by manly tussles with small-pox or diphtheria are robbed of that blessing by the great changes made in our drains. Every year thousands of women and children must go their way bereft of the rich spiritual experience of the widow and the orphan."]

Sec. 5


I shall never forget the tones of hoarse satisfaction with which a vendor of the Evening News disturbed the twilight of a May evening in London, triumphantly proclaiming a "Great Troop Train Disaster." I had often noticed with what apparent joy the newspapers announced the sinking of a British cruiser; with what entirely neutral delight they welcomed or invented the report of Terrible Slaughter on either side. But somehow that hoarse and rufous man with the loose lip remained in my memory and became for me a type of one element in the population to which war was not unwelcome; the journalistic element that lives by exploiting the sadistic curiosity, the craving for mean excitements, and all the gladiatorial instinct of the modern world.[18] It soon became clear that the newspapers were not alone in the commercial exploitation of war. They were not even the worst offenders. The publishers were hurriedly producing volume after volume of faked memoirs badly written by imaginary governesses. The production of spurious memoirs and "autobiographies," even if they are skilfully composed, is always grossly immoral; and of the specimens occasioned by this war one may say that if they had been genuine it would have been possible to attribute the low morality of some Germanic princes to the literary style of the English governesses who had had a share in their education. The catchpenny manoeuvres of publishers are really only a branch of journalism,[19] and such trivial offences were not, after all, unexpected, because the very profession of journalism is to take advantage. But the journalist is a man of straw who shows which way the wind blows, and his raucous exultation over disaster was the manifest symbol of a commercial exploitation of war by tradesmen and speculators which soon became sensible from one end of belligerent Europe to the other. Like the Vali of Aleppo, I am not good at statistics. It is well known however without the assistance of a mathematician that in England during the winter of 1915, when the cost of living had already risen by nearly 50 per cent, wholesale dealers often kept provisions of all sorts rotting in their stores rather than break the artificial scarcity they had created; farmers would not sell fresh eggs when the price was twopence-halfpenny, because they knew that in a week or two the price for the same eggs would have risen to threepence. Here is a cartoon from a Hungarian paper[20] showing the bloated profiteer of The Sugar Trust laughing at the women who feebly attack his barricade of sugar loaves. I mention it here because it is sufficiently remote from English affairs, and because it happens to come to hand, and because it is a good fragment of evidence, there being no reason why sugar should be scarce in Hungary as an immediate result of the war. And from every country between England and Hungary, from every country in Europe, can be heard the same complaint, unmistakable but how much too feeble, the cry of the people who discover that one of the horrors of war is Trade.[21]


[Footnote 18: Cf. the present writer's introduction to Whyte-Melville's Gladiators in Everyman's Library, 1911.]

[Footnote 19: It was certainly, for example, the Headline Instinct which caused Mr. John Lane, a publisher of some repute, to impose on Mr. Ford Madox Hueffer's novel The Saddest Story, one of the most remarkable novels of the century, such an absurdly irrelevant title as The Good Soldier. The Good Soldier was published in April, 1915. The evidence that the publisher must have changed the title just before publication is that an instalment of it had appeared serially as The Saddest Story in the summer of 1914, and that as The Saddest Story it actually figured in Mr. John Lane's catalogue at the end of the book.]

[Footnote 20: Matyas Diak of Budapest.]

Sec. 6

Trade in Time of Peace

It would not however be correct to infer that the sacrifice of national welfare to commercial manoeuvres is a condition peculiar to war. Modern commerce is essentially an art; the art of making people pay more than they are worth for things which they do not require. And it is with all the selfishness of the artist that it performs its usual operations. Among all the unpublished detail of modern life hardly any class of facts is more disquieting than that of commercial procedure and achievement. The subject is too large to be reviewed in less than a volume; and I can do no more here than suggest a few instances that might be acquired by anyone who devotes his time to not reading the daily papers.

The distribution and exchange of commodities are necessary to the existence of the State; so necessary that it might be supposed that their regulation would be one of the primary functions of government. Proper systems of distribution and exchange correspond to the digestive processes of the body, on which depend the proper nutrition of all the parts and the real prosperity of the State as a whole; yet any comprehensive plan for their control is still regarded as the most unattainable dream of Utopia, and they are left to carry on as best they can in the interstices of private acquisitiveness. National well-being is not to be measured by mere volume of trade, which is the means and not the essence of prosperity;[22] and prosperity can certainly never exist when equitable distribution is hindered by a sort of fatty degeneration of capitalism. But trade in itself is a necessary aliment of the State, and its abuses ought not to be beyond remedy.

A few of these abuses are fairly obvious without a full inquiry, and may be illustrated here because their existence in time of peace may throw light on the operations of trade in belligerent states, and indirectly, by suggesting a few of the results of war, may lead us to some of its motives and occasions. Such abuses may be most easily identified in opposition to the national rights which they infringe.


[Footnote 21: So in Germany the fixing of maximum prices for pigs and potatoes was immediately followed by an almost complete withdrawal from the market of potatoes and pigs—the German farmers refused to sell except at their own inflated prices. Cf. quotations from the German Press in The New Statesman of January 29, 1916.]

[Footnote 22: "Ces choses sont plutot des moyens que l'on emploie pour travailler a faire prosperer l'Etat qu'ils ne sont l'essence de sa prosperite."—Rousseau, Political Writings, I, 345 (C. E. Vaughan's edition).]

Sec. 7

Duties of Commerce to the State

The State has a primary right to be fairly served. Prices should not be arbitrarily raised by any wholesale merchant who happens to be in a position to do so, or by any cartel of dealers in league for that purpose. Prices should be regulated by the cost of production, and should not be an indication of demand; they should rise beyond the cost of production augmented by a fair profit only when the supply is insufficient (production not being artificially restrained) to meet some abnormal demand, and only as a means of checking and regulating the excessive demand. We find instead that any dealer or group of dealers will raise their prices almost absent-mindedly as soon as they are in a position to meet a demand which cannot be postponed. Thus it is that governments are habitually overcharged in all their contracts and purchases; because governments have neither the time nor the opportunity for casual dealings, and because they do not undertake such transactions at all unless their absolute necessity has already been decided.[23] So at the beginning of the war English warehouses were full of all sorts of commodities required by the governments of the Allies; but the urgency of war prevented any sort of bargaining; and the private merchants took advantage of the situation to the amount of about two hundred per cent. At present however I am dealing with trade in time of peace and I must not flavour the ordinary facts with any consideration of War Office contracts. It is enough to state the fact that in ordinary times the private tradesman regards a special demand as an opportunity for raising prices rather than as the stimulus of supply; a rule which is most easily detected in the experience of Government departments.

The State, through its individual citizens, has a primary right to obtain the particular commodity which it happens to prefer, without restrictions imposed for the benefit of any particular tradesman. We find instead that the ordinary purchaser no longer has any effective, or selective, demand. He has to buy what he is given. The informal organisation of the Trust system, primarily a financial operation,[24] has involved the whole market in a network of interdependent industries. The sale of the finished product is controlled and restricted by the vendors of the raw material. Corn is imported by shipbuilders; ships are built by iron merchants; iron furnaces are controlled by coal owners, and coal mines are secured by money-lenders.

The system of the tied house, originally an indigenous corruption of the liquor trade, is being extended to every industry in the land. We can no longer buy the bread we like, but have to eat whatever by-product least interferes with the miller's profits.

The consumer's loss of any power of effective demand would not necessarily be of national importance, if at least there were any guarantee that the unique commodity offered by the average trust system were genuine and of good quality. One of the State's most elementary rights is that of ensuring to its citizens a pure supply of elementary commodities. Yet Commerce has taken no steps, even in its own interests, to suppress the horrid arts of adulteration, in which the motives of the thief usurp the methods of the poisoner, with results which may be inferred from the meagre chronicles of the analyst.[25]

Education is the life of the State.[26] It is therefore of the gravest importance that Commerce should in no circumstances whatever be allowed to interfere with the education of the future citizens. Yet, before the war, in spite of the legislation of the last fifty years,[27] no less than a quarter of a million children of school age were exempted from school attendance for employment in various occupations.[28] Even apart from such improper exemptions the "School Age" fixed by law in itself gives quite insufficient protection. The brain of a girl hardly begins to wake up, or take any natural interest in the acquisition of general ideas, before she comes to puberty. But all over London girls of thirteen or fourteen leave school and are sent by their mothers to earn half a crown a week matching patterns or sewing on sequins.

More generally, the State is entitled to demand from Commerce that it should co-operate sincerely with the other elements in the State in pursuing the real objects of civilisation, inspired by an altruistic regard for the whole of which it is a part, that is by what is really "enlightened self-interest"; by what Plato has called Temperance[29] and Mr. H. G. Wells "a sense of the State."[30] We find instead that the trader has "day and night held on indignantly" in his disastrous hunt for markets, destroying by accident or design whatever amenity in the world does not contribute to his "one aim, one business, one desire."

After all, in our present pre-occupation with the horrors of war, we must not exaggerate their extent. War at its maddest rivals but cannot, at present, surpass the mortality caused by tuberculosis, alcoholism and syphilis, which peaceful Commerce, hand in hand with Christianity, carries into the remotest parts of the earth. Some reader may have noticed by this time that I am not a collector of statistics, but gather my illustrations as I go from any scrap of paper that comes to hand. It is a lazy trick; but at any rate one escapes the fallacy of over-elaborated evidence, by calling as witness the man who happens to be in the street at the moment. So at this point I happen to notice in the Manchester Guardian an extract from the report of the Resident Commissioner in the Gilbert and Ellice Islands Protectorate. This is what it says of the natives:—

The cotton smock for women and the cotton trousers and shirts for men, which in the mind of the people seem now so indispensable to professed Christianity, while reducing the endurance of the skin, render it the more susceptible to the chills which wet clothing engenders. The result is colds, pneumonia, influenza—eventually tuberculosis.

We may notice a not unexpected coincidence which the Resident Commissioner apparently omits to mention. It is that "professed Christianity," by insisting on the propriety of cotton garments for the islanders hitherto well clad in a film of coco-nut oil and a "riri or kilt of finely worked leaves," is conferring a very appreciable benefit on the Manchester trade in "cotton goods." "Our colonial markets have steadily grown," says the Encyclopaedia, "and will yearly become of greater value." ...

On the same day as the issue of the Manchester Guardian just quoted there appeared in the Times Literary Supplement a review of Canon C. H. Robinson's History of Christian Missions, "a very sound introduction to a vast and fascinating study." From this I gather that

there are few stories more romantic than the founding of the Uganda Christian Church in British East Africa. At first progress was very slow, and ... in 1890 there were scarcely 200 baptized Christians in the country; yet by 1913 those associated with the Christian Churches were little short of half a million.

So before Europe has shown many signs of convalescence, Africa is already virulently infected. And "our markets will yearly become of greater value."


[Footnote 23: See, for instance, the Report of the Committee of Public Accounts (commenting on the extravagance of Admiralty and War Contracts), summarised in The Times of August 19, 1916.]

[Footnote 24: See Orage, National Guilds, p. 170 ff.]

[Footnote 25: Unfortunately I can find no authority for the amusing report that the annual export of "wine" from Paris is greater than the annual import.]

[Footnote 26: That is, of course, of the modern or democratic state. Democracy and education are interdependent.]

[Footnote 27: As a matter of fact, no serious attempt to protect children was made before the Factory and Workshops Act of 1878.]

[Footnote 28: Since the war there have been the most determined attempts to destroy all the social legislation so painfully acquired. See G. D. H. Cole, Labour in War Time, pp. 254-274.]

[Footnote 29: Republic; 432 A. [Greek: armouia tiui e sophrosune omiotai, k.t.l.]]

[Footnote 30: See The Future in America, and New Worlds for Old, passim.]

Sec. 8

Restricted Sphere of Government corresponding to Restricted Sphere of Morality

But to return to our sheep, or rather to those who fleece them,—there is one cardinal proof that trade, in so far as it depends on private enterprise, is a danger to the State, and is recognised as such. It is that as soon as war comes, the nation in danger instinctively adopts whatever measure of Socialism can be introduced during the temporary inhibition of capitalistic methods. The actual coming of war induces a brief panic in the marketplace, and during this momentary paralysis of private acquisitors the State makes a desperate attempt to subdue their activities to its own needs. By the mere instinct of self-preservation it clutches at some rudiment of Socialism, and makes a diffident gesture in the direction of nationalisation—(of the railways, for instance). But the capitalists of England can point with pride to the fact that they very soon pulled themselves together. I hope to show in the following chapter that by the time the war was in full swing they had made it their own, and had banished every trace of socialism, with the relics of sanity and truth, to the confines of the Labour press.[31]

But still the danger was for the moment realised, and the attempt was made, the desperate and unsuccessful attempt to pull and squeeze and bind the institutions of capitalism into an organised system of political obligations. It failed because the very abuses and intemperances of our commercial system are a sign that the sphere of government has not expanded with the growing complications of the modern community. Nevertheless the attempt was made: but no corresponding effort is being made to extend the system of moral obligations in which we live.

For it is just as the sphere of morality is unduly restricted and fails to correspond to the needs of humanity, that, on the political plane, the unduly restricted sphere of government has never been extended to include all the interrelations of industrial citizenship. Capitalism is a survival of the penultimate stage of political development, as war is a survival of the penultimate stage of morality.

The attempts both spasmodic and continuous to extend the sphere of government, which now begin to affect nearly all serious legislation, must remain incomplete without an analogous and indeed corollary expansion of the moral system which will involve the obsolescence of war.


[Footnote 31: This seems to apply to all belligerent states. Certainly very little sanity finds its way into Germany except through the pages of Vorwaerts. It is therefore humiliating to be told that Vorwaerts has a much larger circulation than any socialist paper in England.]


Hinc usura uorax auidumque in tempora fenus et concussa fides et MULTIS UTILE BELLUM.

Lucan, I, 181.

Individuals are constantly trying to decrease supply for their own advantage.—Fabian Essays, 1889, p. 17.

Sec. 1

Trade during the War

Trade during the war seems to have had a remarkably good time. In the first year of warfare I began to collect a few facts in support of what then seemed the paradoxical view that war was, in essence if not in origin, a very profitable capitalistic manoeuvre; a view deduced from the opinion I had formed a priori of the nature of all modern warfare.[32] Instead of a few corroborating voices I found testimony abundant in every paper I picked up, besides the live evidence received in private letters and conversations. This pamphlet being rather philosophic than statistical, I have taken the easy course of printing a selection of these testimonies, crude and undigested, in an appendix—a cold storage of facts and figures that allows me to repeat with a quiet conscience that trade is booming. The greater the war, apparently, the greater the profits. In the words of the Manchester Guardian:—

The first full calendar year of war has been a period of unparalleled industrial activity and, generally speaking, prosperity in this country. Heavy losses and bad times have been encountered in a few important industries, but these are balanced by unprecedented profits made by a large variety of industries, whether directly or indirectly affected by the war.[33] ... But it would be a mistake to suppose that, while war manufactures prospered, all other


[Footnote 32: See, for instance, my article "A Footnote to the Balkan War," published in the Asiatic Review for July 1, 1914. This opinion is there expressed in the following words which I still think substantially true, though one or two phrases are rhetorically exaggerated.

"England and the rest of Western Europe have outgrown by about three hundred years the time in the development of nations when fighting is natural and even necessary. England, of course, continues to contemplate war, and to be bluffed by the threat of war in the circumlocutions of diplomacy. But her national welfare no longer requires war; and, if she ever undertakes it, it will be at the bidding of merchants and usurers, who do not represent even the baser instincts of the specifically national spirit, but are wholly foreign and parasitic. On that occasion the Daily Mail and the Foreign Office will no doubt assure the British people that the war in question involves the whole honour and welfare of the State; and the people will believe it. But it will not be true. For England is happily not, or not yet, a nation of shopkeepers; and it will be only the shopkeepers whose welfare is concerned."]

industry languished and decayed. To prove the contrary and show that only here and there were there heavy losses, we may quote some figures compiled by the Economist....

And so forth.[34]

To this I will add only two typical paragraphs as a text for my subsequent remarks, as I believe they suggest the general economic process which enriches the particular industries to which they refer. The first is taken from the Sunday Pictorial, of all papers.[35]

Immense increases in the profits of two shipping companies are, as a result of the ceaseless rise in freights, disclosed in the reports of two Newcastle lines published yesterday. The high cost of freights is largely responsible for the dearness of food, coal, and other necessities of life. The gross profits of the Cairn Line of Steamships, Ltd., amounted to L292,108, and the net profits, after deducting the special war taxation and other items, were L162,689. A dividend of 10 per cent, with bonus of 4s. per share, is recommended. This makes a total of 30 per cent, free of income tax, as against 10 per cent last year, when the total profits amounted to L97,335. Less than half of this company's capital is paid up, the total authorised being L600,000; there are also debentures of about L150,000.

The next quotation is from the New Statesman:—[36]

Glasgow is exceedingly prosperous, and iron and steel manufacturers tell me that the next three or four years, peace or war, must mean a period of prosperity for them. Government orders now absorb so large a proportion of output that outside requirements are simply not being met. Owing to the scarcity of shipping this deficiency is not being filled by imports from America (the only other possible source of supply), so that unfilled orders are accumulating. A waggon manufacturer told me he had sufficient work in sight to keep him going for five years. It must be remembered that part of the cost of the war is being met temporarily by depreciation—railway tracks, rolling stock, locomotives, etc., to mention only one industry,[37] not being replaced as they wear out, or being maintained to the minimum degree necessary. This means that, although less obvious than the reconstruction of ruined parts of Belgium, France, Poland, and Eastern Prussia, repairs and replacements aggregating many millions sterling in cost will have to be carried out after the war in countries that have not been invaded. A peace boom in the iron and steel and shipbuilding trades appears certain.

Here, before passing on to more general considerations, we may notice incidentally—it is brought out in the first quotation—that the taxation of war profits reduces them proportionately but can never annul or quite overtake them. That is sufficiently obvious; but the fact must be preliminarily emphasised because it is quite commonly assumed that the mere imposition of a tax of 50 or 60 or 75 per cent automatically solves the problem of war profits. As a matter of fact, taxation so far from solving the problem leaves it essentially unchanged, and really connives at and recognises the practice. The problem remains, in spite of taxation, that one section of the nation is enriched by a process which necessitates the misery and death of other sections. We may therefore in a broad discussion of the problem leave out of account the proposed and adopted palliatives of taxation.

Secondly, we may notice—this is brought out in the second quotation—that profits directly produced by the war are not limited to the period of the war. This again is really axiomatic, being only another form of the platitude that it takes longer to construct than to destroy: but it means that even a short war of sufficient intensity will ensure a long period of profits, and therefore it noticeably aggravates the conclusions to which I hope to lead.

A fundamental point is that the profit on freights, excused immediately by the destruction of shipping,[38] leads indirectly to profits on such other commodities as food and coal, not only on account of the actual scarcity resulting, but also because any reason for increasing prices is made a pretext for increasing profits.

But the scarcity of all general commodities is caused not only indirectly by the primary scarcity of ships, but also directly by the same conditions of warfare as those which affect shipping. That is to say, just as the intensified activity of the nation at war creates a livelier demand for ships, so it also creates a greater demand for all the ordinary commodities of living: and just as war by destroying ships reduces the available supply, so by its general destructiveness it reduces the supply of other commodities: and just as war by destroying ships makes extraordinary profits for shipowners, so by destroying tables and teacups it makes unusual profits for the makers of tables and teacups. In short, destruction creates demand, and demand gives occasion for profit.

This is a disquieting statement; because though one might hesitate to deduce from it that any particular merchant must be in his commercial capacity a conscious advocate of war for the sake of gain, it certainly suggests that the body of trade must automatically and by a sort of instinct of self-preservation be an element in the nation that makes for war.

That is the kernel of my thesis;[39] and it is certainly a happy coincidence that the possibility of its truth seems at last to be dawning on another writer, and one more expert than myself in the handling of commercial theory. On the very morning after the last few sentences were written the following paragraph occurred in Mr. Emil Davies' "City" article in the New Statesman:—[40]

It is only as the reports and accounts for 1915 come out that a correct idea can be formed of the benefit this catastrophic war has been to the majority of our large industrial concerns. The following is a list of companies whose reports and accounts have appeared during the past few days. The difference between the profits for the two years shown is even greater than appears, for in practically every case the 1915 profit is stated after allowing for the excess profits tax, additional depreciation or extra reserves, most companies now adopting these and other devices to render less conspicuous their war-time prosperity.

1914 1915 L L Smithfield and Argentine Meat Co. 25,732 142,055 Waring and Gillow 35,217 100,885 Projectile Co. 30,739 194,136 Lanarkshire Steel 28,144 45,985 Frederick Leyland Steamship 337,188 1,196,683 Sutherland Steamship 94,600 295,200

Waring and Gillow's sudden prosperity is not due to any better business in the ordinary furniture trade, but to war contracts. The Projectile Company figures are astonishing even for an armament company; after applying L47,500 in satisfying the balance of the prior claims of the Debentures, the Ordinary Shares receive their first dividend—one of 50 per cent. No sane man would accuse leaders of these great industrial concerns of doing anything to bring about an outbreak of war; many of them have, indeed, paid a heavy price for their prosperity in the shape of the loss of sons or near relatives; but when all is said and done, the fact that a war should put many half-bankrupt concerns on their legs, and make fairly prosperous companies three or four times more prosperous than before the war, is an influence in an undesirable direction.


[Footnote 33: Moreover, as I hope to suggest later, even these losses to a few individual industries do not necessarily imply losses to the capital involved, which in some cases has been diverted or adapted to other industries more appropriate to the times. For a review of Trade profits in 1916 see the Manchester Guardian, January 1, 1917.]

[Footnote 34: See Appendix I.]

[Footnote 35: Quoted in the New Age, March 16, 1916.]

[Footnote 36: April 8, 1916, from the "City" article by Emil Davies.]

[Footnote 37: My italics.]

[Footnote 38: The rise in freights is a good example of the way in which abnormal profits are extorted from the public as soon as any scarcity puts them at the mercy of the trader. (See above, p. 45.) The rise in freights is unalloyed profit, for the shipping companies have no increased risk, since the Insurance Companies are guaranteed by the State.]

[Footnote 39: Which was first drafted in a letter to The Garton Foundation more than a year ago.]

[Footnote 40: April 29, 1916. One might also mention for its verisimilitude the situation described at the end of Mr. F. Brett Young's novel The Iron Age (Secker, 1916), in which the insolvent ironworks of Mawne are saved in the nick of time by the declaration of war.]

Sec. 2

Trade lives on Increasing Demand

All war, whatever temporary dislocation of business it may involve, must ultimately, as a principal form of destruction, assist the intensive cultivation of demand which constitutes nearly the whole of modern trade. The industrial revolution of the nineteenth century with all its labour-saving machines was originally an economy of necessary production; by the middle of the century it overshot its mark, and hastened the world to the brink of the opposite disaster of over-production. In the present commercial era we are still suspended over that dreadful brink. Nothing can stop the accelerated flux of mechanical production; and we are saved from falling into the abyss only by the unnatural increase of ordinary consumption. The consumption of the ordinary markets, even when stimulated by the most violent tonics of advertisement, is strictly limited, and the limits have long been overtaken. The accelerated consumption could only be maintained by the discovery of new markets, which was undertaken by means of the political catch-words of Imperialism and Colonial Expansion;[41] or else by the wholesale destruction of existing supplies. As the number of new markets and their capacity for consuming things they don't want is ultimately just as limited as the number and capacity of home markets (for obviously the time must come when all the Chinamen and Koutso-Vlachs and South Sea Islanders have already been supplied with ready-made brown boots and tinned salmon), only one method remained by which Commerce and Industry might escape, or at least postpone, the penalty of half a century of over-production. This was by the partial destruction of the world's existing supplies. If this could be arranged, there might be a genuine demand for them to be replaced.

Sec. 3

War a form of Destruction

Now as a form of destruction war is easily first. Quite apart from the obvious destruction of commodities that takes place when a country is ravaged and invaded, as in the case of Belgium and Northern France, it should be remembered that the methods of supplying an army in the field involve the sheer waste or destruction of very nearly half the food and equipment provided.[42] This is not necessarily the result, as might be expected, of official incompetence. It may on the contrary be the result of official foresight, which must allow in warfare for all the changes and chances of communication, and knows that it is better to waste a million tons of beef than to risk the starvation of a single regiment. Such waste, in other words, is a condition of warfare. Add to this the preventive destruction of stores and baggage which takes place whenever troops are compelled to retreat: in this way about a million pounds' worth of stores were carefully burned before the evacuation of Gallipoli; and not a hundred yards of trench is ever abandoned without the jettison of about a hundred pounds' worth of equipment. Add to this the fact that every shot fired, from the mere rifle bullet to the largest shell, does a proportionate amount of material damage when it finds its billet: the bursting of a six-inch shell will do, I suppose, on an average, as much damage in half a second as an ordinary fire can do in twenty-four hours. Add to this again the fact that the very force which propels every bullet and every shell is released by destroying by instantaneous combustion a certain amount of valuable chemical products. Then, besides all this direct destruction of commodities which must ultimately be replaced, or which at least some kind contractor may plausibly offer to replace, consider for a moment the increased wear and tear of every sort of equipment both civil and military, from steam-rollers and rolling-stock to boots and bandages and walking-sticks, which a state of war must involve. Or consider again that the mere mobilisation of an army implies that several hundred thousand men, whose annual income before was less than L100 a year, are now living at the rate of L400 a year.[43]

Anyone who cares to examine in detail all these forms of waste and destruction, and all these forms of unnatural and feverish consumption, will begin to understand to what an extent war stimulates the demand by which alone Trade can survive.


[Footnote 41: Also, of course, by the campaign for Preferential Tariffs, which, it was hoped, would have increased consumption by excluding a few foreign competitors from colonial markets.]

[Footnote 42: Cf. the many stories of beef and other rations being supplied to troops in such quantities that the units responsible for their consumption were obliged to bury them. These stories come mostly from Flanders. At home the same superabundance may have been the undoing of many a Quartermaster-Sergeant, who, not knowing what to do with such a plethora of beef, and having a proper superstition against throwing away good food, was tempted to sell it for about a penny a pound to the local butcher.]

[Footnote 43: And the fact that they are doing so at the public expense is, of course, only an additional advantage to the traders who supply their needs; as they do not risk losing any of their money through bad debts.]

Sec. 4

War stands to benefit Neutral as well as Belligerent Nations but not to the same extent

In Western Europe at least all markets are practically open markets. No tariff however scientifically graduated will really divert the natural flow of trade to any considerable extent.[44] Consequently it might appear that all nations stand to benefit in the same way, but in varying degrees, from the intense local demand set up in the nation at war. Thus British Trade was exhorted in a sincerely rapacious article by Captain Dixon-Johnson[45] to snatch the opportunity presented by the Balkan War; and the unparalleled boom in American trade during the present war is another obvious example. This suggests at once that the benefit occasioned by war is not a national benefit, diffused vertically through every class of the belligerent nation; but a class benefit diffused as it were horizontally through the commercial strata of all nations within supplying distance of the centre of disturbance. On the other hand, of course, the immediate local demand is stronger than the demand communicated to remoter markets and more easily supplied; in other words the commercial class of the belligerent nation are more immediately and more intensely benefited by the state of war than the same classes of neighbouring nations, although in war as in peace the commercial classes of every nation are one.[46] Also the outbreak of war, even if it does not entirely sever a country from foreign sources of supply, is bound to cause a certain dislocation; if communications are not altogether interrupted they are more difficult and uncertain than in normal times; so that the trade of the belligerent country is always given a greater impetus than that of its neutral neighbours, and in such cases a particular industry which has been threatened by the competition of foreign imports may be actually rescued from extinction. Even the temporary dislocation of trade is a benefit to trade in the nation at war; for it enables existing stocks to be sold at exaggerated prices.[47]


[Footnote 44: From this it follows incidentally that a high tariff is of no advantage to the community as a whole, but only to a particular section of the community. For the idea that it will benefit the whole community is based on the assumption that it is possible to divert a particular sort of foreign import; actually the tariff will not exclude the import if there is a natural demand for it, but it will provide an excuse for every dealer wholesale or retail to increase his profit on the article taxed by about double the amount of the tax; i.e. if an imported article pays a duty of sixpence, the price to the consumer of all such articles whether imported or home-made will be raised a shilling.]

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