Part 17

It will be said that the standard of wellbeing of the German Empire has advanced _pari passu_ with her foreign trade, and that trade needs a secure market. Hence the requirement of a rich colonial domain, from which the German trader can not be excluded by hostile customs laws. Perhaps we have here an adequate justification for Germany’s Morning Land aspirations. Germany is an industrial nation; so also are England and the United States and France, and Russia will soon become one. Now, is it not inevitable that the trade of the industrial nations shall be directed toward the non-industrial? That is, towards the tropics and the subtropical belts? The argument is trite, but it looks reasonable enough to deserve consideration.

Germany is indeed an industrial nation, and so are we. But the German industries are not the same as ours, nor can they ever be the same, so long as the German genius and natural environment continue to differ from ours. So long as difference exists, some German goods will command our markets, whether we pursue protectionist policies or not. Germany need not write our laws for us in order to control our markets; she has an indefeasible title to those markets so long as she maintains superiority in supplying our needs. And the same thing is true of the markets of England and France and Russia. They take German goods eagerly, in vast quantities. Wipe out Germany’s trade with industrial states, and her commerce is practically at an end.

The trade between nations of rich and varied industries is alone capable of indefinite expansion. Yet the delusion persists that a nation’s closed trade with a subject state is somehow of superior importance. Such trade is admittedly incapable of great development. Only semi-barbarous peoples will submit to foreign control of their trade; and such peoples produce little beyond the requirements of home consumption, and therefore, having hardly anything to sell, can buy but little. But colonial trade, meagre as it is, may be monopolized and made to yield large profits. The trade between industrial nations, since it is essentially competitive, diffuses its benefits throughout the trading nations. Hence these benefits are easily overlooked. The rapid enrichment of a few houses engaged in the colonial trade gives visible evidence of national gain.

Out of the overestimation of the value of the colonial trade arises, unquestionably, some part of the international jealousies now working out their nature upon the field of battle. Control of the trade of the Levant would advance the general welfare of the German people in very limited measure; but it would greatly enrich a small number of traders, and this very fact of the concentration of the gains gives them added potency in determining political relations.

V

The colonial trader was once the chief cause of wars, and he still contributes his quota to international misunderstanding and hostility. But there is another interest that has grown to far greater importance in the colonial domain. This we may describe as the concessionary interest. Vast fortunes have been accumulated, in the semi-barbarous belt, by the exploitation of natural resources and works of public utility. The Land of the Morning would be exceptionally rich in concessions to the nationals of any imperial state. There are oil fields and mines to open, railways and irrigation works to construct. Some of these opportunities are already in German possession; their security, however, depends upon continued exercise, by Germany, of influence upon the Ottoman government. That government is notoriously shifty, and the interests involved will never be wholly safe until the Levant is a German colony.

The concessionary interest, like the colonial trading interest, offers chances of sudden wealth. The former, however, is far more vulnerable than the latter. The fixed investment of the concessionary is far greater than that of the trader. Hence, while the colonial trading interest thrives best with the support of the home government, to the concessionary interest such support is indispensable. Politics is a necessary part of the concessionary business.

How far is the concessionary interest identical with the national interest? Let us consider what difference it makes to you and me whether the Pearson interests, or the Waters-Pierce interests, control the oil fields of Mexico. If the Pearson interests, several great fortunes will be constituted in England; if the Waters-Pierce, similar fortunes will be constituted here. In either case the money will lie at an infinite distance from you and me. Still, we are patriots, and would rather have it here than in England.

Patriotism aside, the great fortune here will pay income tax to our own treasury. Its spending will afford many golden crumbs to fellow citizens of ours. The exploitation of the oil fields will require much machinery, for which, under Waters-Pierce control, the first bid would be offered to our own industry. Many young men of our nationality would find employment as engineers, foremen, superintendents. Undoubtedly, it is better for the national interest to have the concession in national hands.

But what is the magnitude of the concessionary interest, and how many votes should it have on questions of peace and war? Of the whole capital of Great Britain, not one-fifth consists in foreign investments; and of that fifth scarcely a quarter can be concessionary. One-tenth of Germany’s capital is invested abroad; probably not a fifth of that is concessionary. Of our own capital one part in a hundred is in foreign investments, of which one-half is in Mexico. Not nearly all of that half is concessionary. It did not prove to be enough to go to war over.

VI

From the foregoing review it might appear to be the natural conclusion that the economic element in the present war is practically negligible. By far the greater proportion of the trade relations of the world--and the relations most significant to the general welfare--obtain between the very nations that are now endeavoring to destroy one another. The opportunities for concessionary capital that could be secured by any nation, if completely victorious, can hardly be equivalent to the losses of the far more important industrial capital at home. It is certain that if all capital had been conscious of its interest, and the question of peace or war had been left to capital, each hundred dollars having one vote, there would have been no war. There is a war: costly demonstration to the Socialists that capital does not, as alleged, enjoy control of modern political society.

Before we accept this view, however, let us look somewhat more closely upon the structure of capital as a social economic force. We shall find that it is not homogeneous, but embraces two elements differing widely in character. The one, which we may denominate capital proper, is characterized by cautious calculation, by a preference for sure if small gains, to dazzling winnings. The other, which we may call speculative enterprise, is characterized by a readiness to take risks, a thirst for brilliant gains. The relative political power of the two elements, as we shall see, is not proportioned to their respective pecuniary volumes. Accordingly, altho it may easily enough be demonstrated that the majority interest of European capital has been seriously prejudiced by the present war, it does not follow that a large share of the responsibility for the war may not be fixed upon capital. The minority interest may have determined a majority vote.

Capital proper thrives best in a settled order of society, where the risks of loss are at a minimum. It accepts favors from government, to be sure, but politics is no part of its game; peace, and freedom from disturbing innovations, are its great desiderata. Speculative enterprise, on the other hand, thrives best in the midst of disorder. Its favorite field of operations is the fringe of change, economic or political. It delights in the realm where laws ought to be, but have not yet made their appearance. To control the course of legal evolution, to retard it or divert it, are its favorite devices for prolonging the period of rich gains. Politics, thus, is an essential part of the game of speculative enterprise.

At the outset of the modern era, speculative enterprise quite overshadowed capital proper. Colonial trade, government contracts, domestic monopolies were the chief sources of middle class fortunes. But with the progress of industry, slow, plodding capital has been able steadily to encroach upon the field of enterprise, or to create new fields of its own. In our own society the promoter of railway, and public utilities, the exploiter of public lands, the trust organizer, are as prominent, relatively, as in any modern nation. Quantitatively their interests are, however, greatly inferior to those of the trader, manufacturer, banker, the small investor and the farmer, to whom a ten per cent return is a golden dream, and twenty per cent a temptation sent by the Evil One.

But quantitatively inferior as the speculative capitalist really is, his hold upon the popular imagination is vastly more powerful than that of his slow-going colleague. Say that an employer of this type prefers to spend money on machine guns to repress strikes rather than in better wages: instantly it is declared by all the radicals of the earth that such is the general spirit of capitalism. No radical is able to keep clearly in mind that the overwhelming majority of employers are doing their best to keep their working forces contented, and are succeeding fairly well. The radicals, however, are not the only persons whose minds are overcrowded with the doings of the speculative capitalist. You and I read eagerly the lives of Jay Gould, Oakes Ames, Harriman and Morgan, feeling that somehow we are thereby brought nearer to the spirit of modern life. We find it impossible to sustain an interest in the account of the life of James Metzger, grocer, who set out in life worth ten thousand, and by faithful attendance upon his customers, without ever once taking a risk, ended life with an estate of one hundred thousand. James Metzger is a type of the thousands making up the ranks of capital proper. His story is told in statistics, which you and I won’t read.

We may love or we may hate the speculative capitalist, but at all events we admire him. We admire him when he works for the public interest, and we admire him when his efforts are subversive of the public good. We admired Harriman when he built the Salt Lake cut-off, and we admired him when he cut the Alton melon. Now, is it to be supposed that the speculative capitalist does not turn this popular admiration to use as a political force, since politics is a part of his game? Inconceivable! As compared with his brother of the small profits and quick return, he enjoys a plural vote in our political scheme.

VII

In a new country of vast natural resources, especially if it is not too well governed, there is sufficient scope for both speculative enterprise and capital proper. The United States has been such a country, at least down to a very recent date. There was easy money enough for all men of shrewdness and resolution possessed of the necessary initial stake--public forests to be leveled, railways to be built or wrecked, trusts to be organized, cities to be provided with public utilities. But all this easy money now appears to be in danger of being locked up. We have a conservation movement in full swing, and a civic reform tendency that is no longer a mere cloak for the insatiable appetite of plunderers out of power. The popular attitude toward monopolistic combinations is growing ominously serious; if old and strong combinations do not dissolve in fear before it, yet those who would organize new combinations are deeply discouraged. We have an Interstate Commerce Commission with the will and the power to choke all railways when some are believed to have stealings in their gorge. Already we are beginning to hear murmurs about town, that in view of the popular hostility to wealth, it will be necessary for American capital to look to foreign investments. Not foreign investments in England and France and Germany, where government is efficient and capital proper prevails. But foreign investments in the undeveloped countries, in a Land of the Morning, “east of Suez.”

In England the domestic field for capitalistic speculation has long been restricted. For generations the British citizen has been taught to look to Asia, Africa, America, for the opportunities for sudden wealth. Germany, more recently launched upon an industrial career, might have offered many rich opportunities at home. But Germany has been well governed. The early nationalization of railways closed one lucrative field; the cities, with their excellent business governments, have taken control of their own utilities, or have driven hard bargains with private enterprise. Industrial combinations have been as numerous as with us; but they have assumed the form of the Kartell--a legally binding agreement between independent producers, fixing prices and volume of production. Such a form of organization, like our former “pools,” distributes the profits of combination fairly equitably among all the producers, and therefore has offered little opportunity for such promoter’s gains as we are familiar with in American trust finance. Some opening there was, of course, for speculative enterprise. The launching of new industrial companies, dealings in real estate, the military and naval industries, laid the basis for many astounding mushroom fortunes. But the progress of governmental effectiveness has been steadily encroaching upon these fields. The German internal situation, then, has been such as to recommend the _Ausland_ to those who wish to risk large stakes on the chance of brilliant returns.

The progress of modern industrial society, with its parallel development in the art of government, tends to the extrusion of speculative capital, and its concentration in the tropical and subtropical belts. In the older societies the process has been in operation for a considerable time; with us it is just beginning. But in a generation, we may be sure, much of our own speculative capital, like that of the older countries, will be engaged in colonial exploitation.

VIII

Capital, it is often said, is cosmopolitan; capital knows no such thing as patriotism. This may be true of the cautious, colorless capital of ordinary finance and industry. It is not true of the capital upon which speculative enterprise is based. It was an intense patriotism that was avowed by Jay Gould and Harriman; intense is the patriotism of J. J. Hill, of the DuPonts and the Guggenheims. Even Mellen is, or was, patriotic in his feelings toward New England. But most intense of all is the patriotism of the capitalist whose interests lie in the twilight zone of the barbaric belt. Purer expressions of devotion to America, of deep concern for her future, than those issuing from the lips of American concessionaries in Mexico, you never hear. We were all moved by the grandiose African dream of Cecil Rhodes. “All red”--i. e. British--a British heart within every black skin, from the Cape to Cairo. The case is typical of the capitalist speculator abroad. He is a patriot through thick and thin, not a white-blooded “cit” like you and me, who before volunteering support for our country’s acts would presume to pass judgment upon them. He is a patriot who would knock a chip off the shoulder of the meanest upstart of a barbarian dictator--without regard to the cost of doing it: not a calculator, like you and me.

By interest, the concessionary capitalist is a patriot. He needs his country in his business. But this is by no means the whole explanation of his patriotism. His type is reckless, and therefore generous and idealistic. He must love and admire great things, and what thing is greater than the imperial dominion of his country? One must have a mean opinion of human nature to suspect the purity of the motives of Cecil Rhodes. Doubtless Rhodes began with selfish motives, but his private interests were soon submerged in his imperial ambitions. We may not be justified in assuming that selfish interest operates, to the utter exclusion of all patriotic motives. It does not necessarily follow that because Mr. William Randolph Hearst, for example, has mines in Mexico, his motives are determined by them. His Mexican interests would be advanced if the American boundary were extended to include all on this side of Panama. Is this, however, the whole tale of his aggressive Americanism? Patriotism has always burned more brightly in border provinces than in the heart of the national territory. It is natural, then, that patriotism should be still more intense in those extensions of the national domain represented by permanent interests abroad.

In an ideal scheme of things, love of one’s own country would not involve hatred and contempt for other countries. But patriotism compounded with financial interest does usually produce detestation for the corresponding alien compound. We who meet the Germans in America, in England, in Germany, engaged in the common labor of advancing man’s control over nature, respect them, and if we see much of them, love them. Our capitalist speculators in South America and in the Orient, meeting their similars of German nationality, hate them heartily. Those speculators are the nerve ends of modern industrial nationalism, and they are specialized to the work of conveying sensations of hate. For the present we have few nerves of the kind, and all they have succeeded in conveying to us is a vague feeling of uneasiness over the German advance in the colonial field. Far more powerful must have been the reaction upon nations like England and France that are serious competitors in the same field. And German capitalist speculators, thwarted in their designs by the English and the French, have contributed to the popular feeling that Germany must fight for what she gets.

The capitalistic speculator, even when operating at home where his action may be directed against us, enjoys a power over the popular imagination, and a political influence quite incommensurate with the extent of his interests. When the seat of his operations is a foreign territory, whence flow back reports of his great achievements--achievements that cost us nothing, and that bring home fortunes to be taxed and spent among us--his social and political influence attains even more exaggerated proportions. And this is the more significant in view of the fact that his relations with government--now even a more important part of his business--are concentrated upon that most sensitive of governmental organs, the foreign office.

When diplomatic questions concerning the non-industrial belt arise, and most modern diplomatic questions concern this belt, the voice of the concessionaries is heard in the councils of state. This voice is the more convincing because of the patriotism that colors its expression of interest. What is perhaps more important, the ordinary conduct of exploitative business in an undeveloped state keeps the concessionary in constant relation with the consular and diplomatic officers established there. In a sense, such officers are the concessionary’s agents, yet their communications to the home office are the material out of which diplomatic situations are created.

It is accordingly idle to suppose that exploitative capital in foreign investments weighs in foreign policy only as an equal capital at home. When we consider the personality of the director of colonial enterprise, the conditions in which he meets competitors of foreign nations, and his relations with the foreign service of his home government, we can readily understand how a very small investment may prove a great menace to the peace of nations. For years the popular consciousness, in the several nations, has been steadily absorbing conceptions of rivalry of interest that have no meaning except to the category of concessionary capital. Germany, Russia, England and France have been brought to the belief that something very vital turns upon the control of the Land of the Morning. Indeed the whole civilized world has been seduced into accepting the view that something very vital turns upon the control of the tropics. Yes, something very vital for exploitative capital. Indirectly vital for the rest of society: for from such delusions spring wars that sow the unwilling fields with the shattered limbs of the best of our youth.

IX

It is the interest of exploitative capital that makes the Morning Land, Mexico, China and Africa rotten stones in the arch of civilization. But for exploitative capital, those regions might remain backward, socially and politically: this would not greatly concern any industrial nation, except in so far as it responded to a missionary impulse. The backward states afford, however, possibilities of sudden wealth; and since this is the case, they must attract exploiters, who must seek, and obtain, the backing of their home governments, with resultant international rivalry, hostility, war.

If we could confidently predict the industrialization of the backward countries, we should be able to foresee an end of this one most fruitful of all sources of international strife. But China will not be industrialized for a generation, at least; and many generations must elapse before the tropics are concession proof. Accordingly the one hope for universal peace would appear to lie in the possibility of divorcing, in the popular consciousness, the concessionary interest from the national interest.

For the present war will settle nothing. When it is over, the skeleton titles thrown about the undeveloped lands may have undergone change; but underneath the new order, the struggle of exploitative capital will emerge as before. Diplomatic squabbles will again arise; popular envy will be wrought upon; international hostility will be fomented; military and naval rivalry will again crush out progress. The minor interest will once more drag the major interest to ruin.

There will, however, be in the situation one element new, at any rate, to us. In a generation we shall not be, as now, a nation with almost all its capital secure within its own boundaries. Our strong men of speculative finance will be established in the undeveloped countries; concessions will figure conspicuously among the items of our national wealth. The foreign contingent of our capital will join battle with that of the group of nations destined to fare best in the present struggle: if Germany and Austria, in South America; if Russia and Japan, in the Orient. And who shall say that our country may not be a protagonist in the next great war? One half of one per cent of our capital just failed of forcing us to subjugate Mexico.

The concession and the closed trade are the fault lines in the crust of civilization. Solve the problems of the concession and the closed trade, the earth hunger will have lost its strongest stimulus, and peace, when restored, may abide throughout the world.

THE WAR BY A MAN IN THE STREET

That a kindly old man having his nature temporarily reversed by a passion for revenge for the murder of two relatives, should have the power to waste a large portion of the lives and treasure of the civilized world, is so counter to everything that civilized men ordinarily consider reasonable, that it is perhaps the sharpest evidence yet given of the tyranny of the past over the present.