Imperialism and the War

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The first duty of Socialists in relation to the war is to understand it. The fact that we have a key to the riddle which puzzles the national intelligence gives us a great advantage in the present political campaign. The following article is an application of Socialist principles to the fundamental problem which demands solution. It gains authority from the fact that, excepting the last paragraphs, it was written several weeks before the outbreak of hostilities. It was published in Die Neue Zeit on September 11th.)

INDUSTRIAL production receives a strong impetus from the development of the wage system, the substitution of capitalist production for simple production.

The capitalist – as capitalist – does not labor in the concern from which he draws his profits. The independent small producer, laboring with his own hands, has motives for shortening the hours of labor. These motives do not exist for the capitalist. It should be borne in mind, of course, that reference is here made to the craftsman of the time when independent labor was at its height, before it was reduced to a state of frantic misery by the competition of capitalists.

The capitalist has his men working for him. Their discomfort is nothing to him. The longer their hours the greater his profits.

But the individual capitalist must find some other means of increasing production. Development in this direction has definite physical limitations. But no such limitation exists in regard to the number of workers who may be employed. Whether he employs 10 or 100 or 1,000 depends entirely on the extent of his capital. And every additional employee means an increase in profits.

With increased investment of capital and larger number of workers there come, naturally, improved machinery, greater division of labor, improved methods of securing raw materials and marketing the product. Therefore, no matter how rapidly the number of workers in any industry has increased, the amount of capital invested per worker has grown much more rapidly. And in proportion as the profits of the individual capitalist have grown there has grown also the sum which he is unable to consume.

This accumulation must be constantly reinvested if the capitalist process is to be continued.

At this point there appears a tremendous difference between agriculture and industry. The possibilities of investment in the one are immensely greater than in the other. This does not mean that a landowner carrying on agriculture in a capitalistic manner has less opportunity to accumulate profits than an industrial capitalist. But it does mean that in any given district the possibilities of investing capital in agriculture are more limited than the possibilities of investing it in industry. The causes of this difference are to be found in various technical and social considerations.

Agriculture has to do with the production and reproduction of living organisms. This process cannot be arbitrarily facilitated or extended through the increase in the number of laborers devoted to it. Industry, on the contrary, can be developed indefinitely as long as the supply of labor and raw material holds out.

On the other hand, industry is much less dependent on land than is agriculture. If an industrial capitalist has money enough he will have little difficulty in raising the number of his employees from 10 to 100. He can almost always secure the land which is necessary to the enlargement of his buildings. The agricultural capitalist is in a different position. If he wants to hire ten times as many men as hitherto, he must have ten times as much land. But the land beyond his borders is the private property of his competitors. Even if he is able to secure land from these, he will merely take over their laborers and thus the number of workers employed in the district will not be increased. In a settled country an increase in the number of agricultural laborers is out of the question unless there is a change in the methods of production.

In industry, however, there can be in one country or region an increase in the number of concerns, in their average size, and in the total number of workers employed even without any change in the methods of production.

And technical improvements in production affect industry and agriculture differently. In both, to be sure, they tend to decrease the number of workers in proportion to the amount of capital in vested and the product turned out. In industry, however, this decrease has been only a relative one, never an absolute one. Instead of a decrease in the number of workers there has been a rapid increase in the capital invested and the amount of the product. In agriculture, on the other hand, the decrease in the number of workers has often been not only relative but absolute.

This difference is increased by another circumstance. When industry is cut off from agriculture, agriculture remains the basis of society. Without the constant appearance of new agricultural products we should not be able to exist. In the cities we could hardly subsist for a day without new supplies of flour, milk, meat and vegetables. But we could wear our old coats and hats a little longer and thus get on without new ones. So the manufacturer of cotton goods could not get on without new importations of cotton, but if his spinning machines are old he can make them do for another year.

But this is not all.

The products of agriculture are less varied than those of industry and their value is more stable. Grain and milk, meat and potatoes are everywhere the chief means of sustenance; they are not subject to varying fashions. But if you wish a new coat, how many materials are at your disposal? And how rapidly do their fashions change! And the spinner who needs a new machine has the choice among many designs, and the progress in his industry constantly demands new and better ones.

All this results in the fact that there is to be found in capitalist industry a powerful factor which hardly appears in agriculture even when it is carried on capitalistically. This factor is competition, the struggle of various concerns for the market. The industrial capitalist must cultivate his market far more carefully than does the landowner. The difficulties of the agriculturist in relation to his market are brought about by the middleman rather than by competitors.

And the situation changes constantly to the disadvantage of industry. Industrial capital is constantly increasing and agriculture trails farther and farther in the rear. The industrial population grows steadily and demands increased quantities of farm products for sustenance and raw material. And during this time, naturally, the agricultural population is growing relatively, if not absolutely, smaller and its demand for the products of industry is constantly falling off.

In the struggle of competition the larger and better equipped concern has an advantage over others. The more bitter competition becomes, the greater is the necessity of each concern to enlarge its plant and improve its equipment.

Thus far we have viewed the accumulation of capital only from the point of view of the convenience of the individual capitalist. We must now look at it from a different point of view. It is more than a convenience; it is a necessity. The growth of his industry becomes for the capitalist a necessary condition of life. He cannot wait until there is a greater demand for his products. He must increase his production, and if the demand does not increase naturally it must be artificially nurtured.

The intensity of competition is a result of the fact of the impetus toward the accumulation of capital and the increase of production is far greater in industry than in agriculture. This fact, which is in the first place a result of the difference between industry and agriculture, becomes a cause for the increase in this difference.

This situation presents an important problem.

Industry must develop rapidly under capitalist conditions or society will be plunged into misery. Agriculture is constantly turning off workers. Even where the number of agricultural workers remains stationary the increase in population is sent to the cities. Industry is constantly attracting increased numbers. Unemployment results instantly if industry does not develop with sufficient rapidity. On the other hand, the fiercer competition becomes, the more capitalists are forced to expand. If the market does not keep abreast of this expansion the capitalist stares bankruptcy in the face.

But if industry is to expand agriculture must keep pace with it. It must furnish increased quantities of raw materials and means of life; and it must, also, consume the products of industry with which those of agriculture are purchased.

How is this possible if the accumulation of capital goes on much more rapidly in industry than in agriculture?

Malthus saw that population increases geometrically, that is, as the progression 1, 2, 4, 8, 16, etc., while the means of life increase arithmetically, that is, as the progression 1, 2, 3, 4, 5, etc. He viewed this as the law of population. In reality, however, it turns out to be a law of capitalist accumulation. As such it is less terrible than Malthus conceived it to be. For in accordance with it the industrial population of a region increases in proportion to the series 1, 2, 4, 8, 16, while the agricultural population remains stationary or decreases. And at the same time the total product of an industrial worker increases much more rapidly than that of an agricultural worker. The industry of any district would find it impossible to carry on the accumulation necessary to its continued existence if it were limited to the markets of that district. Capitalist accumulation in industry can proceed freely only when the agricultural region which supplies its raw material and consumes its products is constantly being enlarged.

Since agrarian production has a twofold relation to industry a rupture between them may manifest itself in two ways. At one time the market for the products of industry in the agricultural districts will not increase as rapidly as production; then we have what is called overproduction. At another time agriculture will fail to produce a sufficient quantity of raw material and food, and then we have the increased cost of living. So far as these phenomena are not the results of other considerations which lie outside the boundaries of the present discussion they are closely related. Either one of them may quickly lead to the other. The rise of prices leads to a panic, which is merely another name for overproduction, and the panic leads to a fall of prices.

On the other hand, the constant effort of industry to increase the agricultural region through relations with which it carries on its activity may take on the most varied forms. It is true that this effort is necessary to the continued existence of capitalism, but this does not mean that the capitalist is compelled to resort to any particular methods of expansion.

One form of effort in this direction is called imperialism. This was preceded by another known as free trade. Half a century ago this latter was regarded as the last word of capitalism just as imperialism is today.

Free trade became a controlling principle through the predominance of the capitalist industry of England. Great Britain was to be the workshop of the world and the world was to be one mighty agrarian region for the exploitation of England, to take England’s products and furnish England the necessary raw materials and means of sustenance.

But this beautiful dream came quickly to an end.

Agrarian states constantly tend to build up their own industry. At first it was the countries of Western Europe and the Eastern states of America which went through this phase and became competitors against England. They opposed English free trade with their tariff systems. Their idea was to divide the advantages of trade with the agrarian regions of the world among the great industrial powers. England had to defend herself against this movement, and this was the beginning of imperialism.

Imperialism was especially fostered by the system of investing capital in agrarian countries. Railroads were built to develop the resources of thinly populated regions. To protect these and insure their operation it was necessary to have governments which could and would look after the interests of the capitalists. The home governments of the capitalists naturally served these purposes most efficiently. These remarks apply also to extensive investments looking to the development of mines or any other source of wealth.

So there developed with the tendency to export capital to agrarian lands the effort to reduce these lands to a state of political dependence.

Another element in the situation operated in the same direction. It has already been noted that there is a tendency in every agrarian region to develop independent industry. In case a country in which foreign capital has been invested is able to develop its own industry and maintain its political independence the benefit of the foreign capitalists is only temporary, as in the United States and Russia. Instead of furnishing raw materials and a market for finished products such a land soon becomes a competitor. This fact becomes a strong motive tending to force the capitalists to attempt to make the new lands dependent, either as colonies or as parts of a sphere of influence. Through the impeding of industry by means of unfavorable legislation they hope to keep them agrarian.

These are the chief roots of imperialism.

We have seen that imperialism replaced free trade as a means of capitalist expansion. This brings us face to face with an important problem: Is imperialism the final form of capitalist world politics, or are we to look for still another? In other words, is imperialism the only means of maintaining the necessary relation between industry and agriculture within the limits of the capitalist system?

There is no doubt as to the answer. The construction of railways, the exploitation of mines, the increased production of raw materials and means of life have become necessary to the continued existence of capitalism. The capitalist class will not commit suicide; no capitalist party will be willing to surrender with regard to these things. The effort to conquer agrarian regions, to reduce their populations to slavery, is too vital to the very life of capitalism to render possible the serious opposition of any capitalist group. The subjection of these lands will cease only when their populations or the working class of the great industrial countries becomes strong enough to call a halt.

This phase of imperialism is only to be conquered by Socialism.

But imperialism has another phase. The effort to subdue and hold agrarian regions has given rise to serious conflicts between the great capitalist powers. These conflicts brought about the tremendous competition in armaments which has finally resulted in the long-prophesied world-war. Is this phase of imperialism necessary to the continued existence of capitalism? Will it disappear only with capitalism itself?

There is no economic necessity for the continuation of the great competition in the production of armaments after the close of the present war. At best such a continuation would serve the interests of only a few capitalist groups.

On the contrary capitalist industry is threatened by the conflicts between the various governments. Every far-sighted capitalist must call out to his associates: Capitalists of all lands unite!

In the first place we have to consider the growing opposition of the more developed agricultural regions, which threatens not only one or the other of the capitalist governments, but all of them together. This refers both to the awakening of eastern Asia and India and to the pan-Islamite movement of Asia Minor and northern Africa.

In the same category is the increasing opposition of the proletariat of industrial nations to additional taxes.

To all this was added after the close of the Balkan war the fact that the cost of armaments and colonial expansion reached such a point that the accumulation of capital was threatened, and so the very basis of imperialism was placed in danger.

Industrial accumulation in the interior did still go on, thanks to technical development of industry. But capital was no longer pushing itself into foreign fields. This is proved by the fact that European governments had difficulty in floating their loans. The rate of interest was constantly rising.

Here are figures showing prices paid during ten years:

		Three per cent Imperial Loan		Three per cent French Bonds
1905		89		99
1910		85		97
1912		80		92
1914		77		83

This will grow worse rather than better after the war if the increase in armaments continues to make its demands on the money market. Imperialism is digging its own grave. Instead of developing capitalism it has become a means of hindering it.

But this is not equivalent to saying that capitalism is at the end of its tether. So long as it is possible for the capitalism of the old countries to provide a sufficient expansion of agricultural domain it can go on developing. It may, to be sure, be shattered by an uprising of the working-class. But until it has exhausted the resources of the agricultural regions which it can make subsidiary to its activities it will not necessarily perish in an economic cataclysm.

Such economic bankruptcy would be hastened by a continuation of the present imperialist policy. This policy cannot be carried on much longer.

If imperialism were necessary to the continued existence of the capitalist method of production-these arguments against it would make little impression on the capitalist mind. But they will make a deep impression if imperialism is only one among several means of achieving this object.

We can say of imperialism what Marx said of capitalism: Monopoly creates competition and competition creates monopoly.

The violent competition of great concerns led to the formation of trusts and the destruction of small concerns. Just so there may develop in the present war a combination of the stronger nations which will put an end to the competitive building of armaments.

From a purely economic point of view, therefore, it is not impossible that capitalism is now to enter upon a new phase, a phase marked by the transfer of trust methods to international politics, a sort of super-imperialism. The working class would be forced to fight this new form of capitalism as it did the old, but the danger from it would lie in a new direction.

This analysis was completed before Austria surprised us with her ultimatum to Servia. The conflict between these two nations did not result from imperialistic tendencies alone. In eastern Europe nationalism still plays a role as a revolutionary force and the present conflict has a nationalist as well as an imperialist cause. Austria attempted to carry out an imperialist policy; she annexed Bosnia and appeared to be on the point of bringing Albania within her sphere of influence. Through these activities she roused the nationalist spirit of Servia, which felt itself threatened by Austria and thus became a danger to the Austrian government.

The world-war was brought on, not be cause imperialism was necessary to Austria, but because Austria, on account of the peculiarity of its organization, endangered itself through following an imperialist policy. Such a policy can be successfully followed only by a state which is internally united and which has for its field of operations a region far behind it in civilization. But in this case a state divided against itself, a state half Slavic in population, attempted to carry out an imperialist policy at the expense of a Slavic neighbor state which is quite the equal in civilization of the adjacent parts of its imperialistic enemy.

Such a policy could bring down upon us such terrible results only through the conflicts of interest between other great powers which had been fostered by imperialism. Not all the consequences of the present struggle are yet apparent. It may lead to an increase of armaments In this case the peace which will follow will be only in the nature of truce. But from a purely economic point of view there is nothing to hinder its resulting in a Holy Alliance of imperialists. The longer the war lasts, the more it exhausts all participants, the nearer we shall approach the latter solution, no matter how improbable it may appear at present.