BRITAIN AFTER 
 THE PEACE 
 
 REVOLUTIOxM OR 
 
 RECONSTRUCTION 
 
 BROUGHAM VILLIERS 
 
Digitized by the Internet Archive 
 
 in 2007 with funding from 
 
 IVIicrosoft Corporation 
 
 http://www.archive.org/details/britainafterpeacOOshawrich 
 
BRITAIN AFTER 
 THE PEACE 
 
BY THE SAME AUTHOR 
 
 THE SOCIALIST MOVEMENT 
 IN ENGLAND 
 
 Second Edition, Revised. Large crown 8vo, cloth, 
 2s. 6d. net. 
 
 "It is in our judgment by far the best general 
 historical treatment of the origin and play of forces 
 in the Labour-Socialist movement in this country 
 that has yet appeared." — T^e Nation. \ 
 
 **An admirable historic interpretation of the | 
 economic and political forces which have gone to 
 the making of present-day Socialism as exhibited in j 
 the Labour Party. . . . Does just what such a history i 
 ought to do, sets out clearly the main facts and I 
 personalities, but does not load the story with 
 minutiae." — The Manchester Guardian. 
 
 MODERN DEMOCRACY 
 
 A Study in Tendencies 
 
 Demy 8vo, cloth, *js. 6d. net. 
 
 THE OPPORTUNITY OF 
 LIBERALISM 
 
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 London: T. FISHER UNWIN LTD. 
 
BRITAIN AFTER 
 THE PEACE 
 
 REVOLUTION OR 
 RECONSTRUCTION 
 
 BY 
 
 BROUGHAM VILLIERS 
 
 LONDON 
 
 T. FISHER UNWIN LTD, 
 
 ADELPHI TERRACE 
 
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 First published in igiS 
 
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CONTENTS 
 
 CHAPTER 
 
 I. EUROPE IN REVOLUTION 
 
 II. THE PROBLEM OF DEMOBILIZATION 
 
 III. THE PROBLEM OF FINANCE . 
 
 IV. THE PROBLEM OF INDUSTRY 
 V. THE PROBLEM OF THE LAND 
 
 VI. THE PROBLEM OF DEVELOPMENT 
 
 VII. A NATIONAL WORKS DEPARTMENT 
 
 VIII. BELOW THE BATTLE . 
 
 7 
 
 37 
 63 
 95 
 125 
 160 
 197 
 2^1 
 
 387015 
 
BRITAIN AFTER THE PEACE 
 
 CHAPTER I 
 
 EUROPE IN REVOLUTION 
 
 The possible consequences of the present situation were 
 terrible. If as many as four Great Powers of Europe — let us 
 say Austria, France, Russia, and Germany — were engaged in 
 war, it seemed to me that it must involve the expenditure 
 of so vast a sum of money and such an interference with 
 trade, that a war would be accompanied or followed by a 
 complete collapse of European credit and industry. In 
 these days, in great industrial States, this would mean a 
 state of things worse than that of 1848, and, irrespective of 
 who were the victors in the war, many things might be 
 completely swept away. — Sir Edward, now Viscount, Grey, 
 to Sir M. de Bunsen, July 23, 1914. 
 
 These words of the British Foreign Minister 
 during the crisis of July 1914 stand out from 
 the pages of correspondence pubHshed at the 
 beginning of the war as perhaps the only ones 
 showing any insight into the real character of 
 the tremendous events then taking place. Read 
 after three years of carnage there seem.s indeed 
 
 7 
 
^ BFjITAIN A.FTER THE PEACE 
 
 a grim irony about thcin. What matters 
 shaken credit or the suspension of industry in 
 comparison with the terrors of death and muti- 
 lation which have filled the world since these 
 words w^ere written ? And what idea does a 
 " state of things worse than 1848 " convey to 
 the plain man to-day compared to the things 
 that have actually happened ? Future genera- 
 tions, seeing in this utterance the instinctive 
 shudder of an old social order, sighting amidst 
 the confusion of the time a foreshadowing of its 
 own death, may understand, but will hardly 
 pity its terror. It will not be for fallen insti- 
 tutions, but for humanity that the pity of future 
 ages will be reserved. 
 
 '' A state of things worse than 1848 ! " The 
 phrase seems inadequate almost to bathos, but 
 inadequate as it is, it still remains after three 
 years almost the only flash of insight into the 
 true character of the world catastrophe that 
 has come from the rulers of Europe. To see in 
 this war a struggle for victory between two com- 
 peting ideas is, I am convinced, to see only the 
 surface phenomena and not the essential nature 
 of the thing. The nations are not so much 
 destroying in their enemies the things in which 
 they are opposed as they are helping one another 
 
EUROPE IN REVOLUTION 9 
 
 to pull down the social order which they have 
 in common. If indeed the German plans had 
 succeeded and the Kaiser been able to dictate 
 peace in Paris in the early months of the war, 
 or, on the other hand, if the prophecies of the 
 Times military correspondent had been fulfilled 
 and the Russian armies had entered Berlin in 
 November 1914, the consequences of the war 
 might have been less revolutionary. When 
 once the hope of speedy victory passed away 
 and the war became a slow process of exhaus- 
 tion, the purely military and political questions 
 at stake became far less important than the 
 economic and revolutionary ones. It is true 
 that very little attention was given to this. 
 Indeed, the more surely events were leading 
 up to the situation foreseen by Sir Edward Grey, 
 the more people concentrated their minds 
 on their purely military side. After-the-war 
 problems interested a few progressives and 
 reactionaries ; but all suggestions I have seen, 
 good and bad alike, are vitiated by a failure to 
 recognize the magnitude, the revolutionary 
 character of the question. It would seem as 
 though those who think of the problem at all 
 consider the phrase of Sir Edward Grey an over, 
 not a woefully inadequate, statement of the 
 
10 BRITAIN AFTER THE PEACE 
 
 case. There is a grim humour about most of 
 the proposals put forward, many of which are 
 ah'eady half forgotten. Take, for instance, the 
 solemn Conference at Paris based on two very 
 dubious assumptions — one, that the statesmen 
 then meeting in conclave would have anything 
 whatever to do with the policy of their several 
 countries after the war, and the other, that the 
 enem}^ countries would be governed by the same 
 sort of people with something like the same 
 sort of policy as before 1914. What has become 
 of the Conference already ? Free Traders and 
 Protectionists quarrelled about its proposals for 
 a time, and then came the Russian Revolution 
 and the entry of the United States into the war, 
 and the whole thing became utterly meaningless. 
 To me it seems clear that very little progress 
 can be made in preparing for after-the-war 
 problems, unless we realize that when the Kaiser 
 declared war on France and Russia he began 
 not merely a war, but a revolution. On that 
 day society, as we have known it, committed 
 suicide. Even if the blind Samson of German 
 militarism had succeeded in pulling down the 
 temple on the heads of its enemies, it must, 
 nevertheless, have perished in the ruins itself. 
 A sudden and sweeping victory, like that of 1870, 
 
EUROPE IN REVOLUTION 11 
 
 for one side or the other, might indeed, though 
 even that is doubtful, have enabled the old 
 system to survive. In that case the costs of 
 the war would not have been ruinous, and the 
 victorious Governments might have recovered 
 them from the vanquished by way of indemnity, 
 but even the most complete victory, if long 
 delayed, would put any such issue out of the 
 question. For if a conquered nation has no 
 money and no credit left, you cannot extract 
 an indemnity from it, any more than you can 
 get blood from a stone. 
 
 No such sudden victory happened, however, 
 and with the declaration of war all Europe went 
 into revolution. It has become a platitude to 
 say that this, unlike other wars, is not merely a 
 war of armies, but of nations. From the first, 
 throughout the continental belligerent nations, 
 young men of every possible trade or occupation 
 put down their tools, leaving their work to 
 others or to be undone, and took up their rifles. 
 A fundamental change took place in the life of 
 every male of military age, to be followed rapidly 
 by almost as complete a revolution in the life 
 habits of millions of women. This country, 
 having normally a small professional army only, 
 might have escaped the common fate, and many 
 
12 BRITx\IN AFTER THE PEACE 
 
 preparations were made at first to provide work 
 for those thrown out of employment by the war. 
 The rapid progress of the German armies soon 
 ended this, however, and before many months 
 were over milHons of British lads, who had never 
 expected to see a gun fired in their lives, were 
 drilling and training for the Front. The mere 
 surface change in the life of the nations was 
 revolution enough, the inner changes must have 
 been even greater. It was not merely that tJie 
 whole subject-matter of public interest was 
 changed, but for the first time with us, and for 
 the first time to an equal extent with our allies 
 and enemies, the private, personal interests of 
 practically every man and woman were suddenly 
 altered. The ordinary concerns of life, the 
 anxieties and interests of almost every family 
 as they had been before the war, became swallowed 
 up in a vivid interest in the personal safety of 
 sons, or husbands, or fathers. Deep-laid and 
 treasured plans were brought to nothing in a 
 day and other plans of a totally different char- 
 acter had to be substituted. This, too, not here 
 and there, as in former wars, but in almost every 
 family in the land. No such deadly blow has 
 ever been struck at the instinctive conservatism 
 of our race as the enlistment of Kitchener's 
 
EUROPE IN REVOLUTION 13 
 
 Army. The revolution took its first, perhaps 
 its most decisive, steps in the first few months 
 of the war, by taking everj^body from where 
 he was and from what he was doing, and placing 
 him somewhere else at some other work. 
 
 It was the same with things as with men. 
 The drastic steps which our own Government 
 were compelled to take in the first days and 
 even before the outbreak of the war to prevent 
 a financial panic, to secure the control of the 
 railways and to ensure the defence of the realm 
 impressed the nation, but were probably far 
 less lasting than the changes that have been 
 silently going on since. Old trade routes were 
 closed and others have been opened ; shortness 
 of supplies in some materials has compelled the 
 invention of substitutes which may finally take 
 their places ; factories have been remodelled to 
 supply army wants instead of civilian ones, and 
 may get back to their old trades with difficulty 
 or not at all ; changes of all kinds have gone on 
 in the industrial world to a greater extent in 
 these three years than they might have done in 
 thirty j^ears of peace. These things, important 
 enough in themselves, are still more so in view 
 of the complications they must make in the 
 revolutionary situation at the close of the war. 
 
14 BRITAIN AFTER THE PEACE 
 
 How many employers who promised at the 
 beginning of the war to keep situations open to 
 recruiting employees will have no situations to 
 offer at its close ? 
 
 It is clear that the state of things at the end 
 of the war will be essentially a revolutionary 
 one. Before the war the conflicts of Labour and 
 Capital, the competition of trades, the equation 
 of demand and supply were in a condition if not 
 of stable, at least of relatively stable, equilibrium. 
 Changes were going on : new trades rising and 
 old ones falling every year ; conflicts between 
 Labour and Capital were frequent and negotia- 
 tions constant ; ceaselessly new inventions and 
 methods were replacing those that were outworn. 
 Except perhaps in the case of the coal strike in 
 the spring of 1912, there was nothing really 
 critical in all this. What I have elsewhere called 
 the " Guarantist *' claims of Labour, the demand 
 for better conditions and greater security of 
 life was continuous and growing. In itself, tiiis 
 contained the promise of a complete remodelling 
 of society in the long run, in however peaceful 
 and orderly a manner. Periods of prosperity 
 and depression followed one another, emaphasizing 
 or allaying the unrest of Labour, but there seemed 
 no likelihood of any crisis far-reaching enough to 
 
EUROPE IN REVOLUTION 15 
 
 overcome the immense hold the forces of use and 
 wont had over a constitutional people unaccus- 
 tomed to violence. Even the recurrence of de- 
 pression and inflation in trade was much less 
 marked than a generation ago ; so that however 
 acute the problem of unemployment might be 
 for thousands, it seemed unlikely to come to 
 the revolutionary point with anything but a 
 small minority at any one time. It would be 
 dangerous optimism to expect a continuance of 
 this after the war. There is hardly one of the 
 conditions specially characteristic of British life 
 before the war that can be expected to survive 
 it. Before the war the great majority of British 
 working men had acquired skill at some particular 
 kind of work. Even in their youth, they had 
 very little possibility of choice except between 
 one of the industries carried on in the neighbour- 
 hood, of emigrating, or of going to sea. By the 
 time they were thirty, the general character of 
 their lives was to all intents and purposes so 
 mapped out that in the vast majority of cases 
 even speculation upon the possibility of change 
 was probably ruled out of their minds. There 
 was thus a sort of fundamental conservatism 
 penetrating the whole of the national life, tend- 
 ing powerfully to hold in check any movement 
 
16 BRITAIN AFTER THE PEACE 
 
 for change until at least some way had been 
 found of adjusting the new to the old so as to 
 preserve the stability of society. The result 
 was a sort of workable equipoise in the social 
 order itself. In times of peace there is a con- 
 tinuous action and reaction between the technical 
 w^orld and those of ideas and feeling. Industrial 
 changes modify the outlook of those who take 
 part in and are affected by them, giving birth 
 to new ideas, new movements, and at last a new 
 popular organization. These in their turn have, 
 in countless ways, their reflex influence on the 
 structure of industry itself. But except as the 
 result of some utterly abnormal state of things, 
 neither technical nor moral developments, the 
 visible structure or the spiritual motive force of 
 society, is ever likely to be so rapidly modified 
 that the orderly adjustment of things that are new 
 to those that are old but not outworn is impos- 
 sible. Notably in this country, much as present- 
 day society differs from that of centuries ago, this 
 has been brought about by a constant series of 
 generally orderly adaptations rather than by any 
 sudden catastrophe. 
 
 Thus in past times English men and women 
 have been fitted more or less to their actual 
 surroundings. Spells of unemployment and de- 
 
EUROPE IN REVOLUTION 17 
 
 pression notwithstanding, the great majority 
 of the people at any one time had each his par- 
 ticular niche in the social fabric, and learnt more 
 or less to subdue his expectations and even his 
 hopes to the possibilities of the position in which 
 he actually found himself. Obviously, no such 
 adjustment can be expected at the close of the 
 war. Not only millions of soldiers but vast 
 numbers of munition workers, male and female, 
 have, so to speak, been torn up by the roots and 
 scattered all over the country or in foreign lands. 
 Even in the trades not directly connected with 
 the war, most far-reaching changes have taken 
 place. Trades have been lost, perhaps for ever, 
 and the capital and labour employed in them 
 dispersed to the four winds. The very Govern- 
 ment offices have been remodelled, old depart- 
 ments nearly denuded of their staffs and new ones 
 crammed with clerks and officials coming from 
 no one knows where. In the trenches as a 
 soldier, in some hitherto quiet part of the country 
 as a maker of explosives, on the land doing work 
 of *' national importance,'' perhaps in prison as 
 a conscientious objector, the trade unionist, 
 the shop girl, the insurance agent, and the school- 
 master, everybody has been taken out of his 
 or her accustomed niche and planted in some 
 
 2 
 
18 BRITAIN AFTER THE PEACE 
 
 strange place to do some strange and unaccus- 
 tomed thing. 
 
 To almost every one the war has brought a 
 revolution in the practice of life ; it would be 
 strange if it did not bring a revolution in ideas. 
 One side of a universal revolution has already 
 taken place, a complete change in the prospects 
 and outlook of nearly every adult in the land. 
 Every one, therefore, is prepared, at least in so 
 far as the severance of the ties which bound him 
 before the war to a special position in life can do 
 this, for an entirely new start. Again, for the 
 time being at least, the social web woven by 
 generations of peaceful trade is broken. Not 
 only is the individual less wedded to his place, 
 but in countless cases the place he once occu- 
 pied exists no longer. The strong conservative 
 instinct of the British people, the power of use 
 and wont, which has carried the nation over so 
 many difficulties in the past, is now faced with a 
 crisis which cannot conceivably be dealt with on 
 conservative lines. One half of the revolution is 
 already accomplished. The old world, the old 
 dependence on the thing established have been 
 broken to pieces. The task, therefore, of recon- 
 structing society is thrust upon us whether we 
 will or no. The destructive side of the revolu- 
 
EUROPE IN REVOLUTION 1^ 
 
 tion has been carried out by the war itself ; 
 the constructive revolution is the first problem 
 of peace. 
 
 It cannot be denied that the position is a highly 
 dangerous one. No condemnation can be too 
 strong for the indifference that has for so long 
 allowed a considerable section of the respectable 
 working class, averaging about 4 per cent, and 
 amounting in bad times to as much as 8 to 10 
 per cent, of the organized trade unionists, to 
 face the terrors of unemployment. From a 
 moral point of view this was deplorable, but 
 bad as it was it was not inconsistent with the 
 stability of society. The unemployed were 
 always a comparatively small minority ; they 
 were unarmed and untrained to arms. Few of 
 them had ever seen a shot fired in anger, and 
 long years of peaceful industry had built up in 
 them a reverence for life and order sufficiently 
 strong to make them bear almost any hardships 
 rather than resort to serious violence. Most 
 of these things were true of the Continent also, 
 for though there the people were trained to arms, 
 a very small percentage of them had ever been 
 compelled to overcome the feeling of horror 
 with which the modern man must take the life 
 of another for the first time. For two genera- 
 
20 BRITAIN AFTER THE PEACE 
 
 tions, too, the revolution in most of the conti- 
 nental nations, including those of which our 
 people knew most, had given place to a general 
 parHamentary movement. There was httle com- 
 bustible material at home, and no conflagration 
 abroad from which a spark might be blown over 
 here to ignite it. Nobody can say with confi- 
 dence that these conditions exist any longer. 
 Unless some drastic steps are taken to prevent 
 it, we may readily have, not a minority, but a 
 large majority of the adult male population 
 unemployed when the soldiers return and *' war 
 work " has to be stopped ; while the country 
 will be full of weapons which the unemployed 
 know quite well how to use. And much as I 
 believe most of the soldiers have learnt to hate 
 war, and much as they may long to settle down 
 again to peaceful work, it must not be forgotten 
 that they have actually been engaged in killing 
 people for three years, in obtaining their will 
 by force and violence. Under these circumstances, 
 it seems too much to expect that they will meet 
 undeserved poverty and unemployment with the 
 same patience as before. It is a striking fact 
 that whereas a British riot is almost always 
 easily suppressed and is never successful, the 
 mob of Paris has been always a dangerous revo- 
 
EUROPE IN REVOLUTION 21 
 
 lutionary force. Perhaps this may be due, 
 as is generally taken for granted, to differences 
 of national character ; but it has always seemed 
 to me capable of a more matter-of-fact explana- 
 tion. Only a small proportion of the workmen 
 in British towns have been trained to fight, and 
 probably very few of them have the slightest 
 idea how to form or man barricades. The French, 
 however, do know how to organize a resistance 
 to the military ; they understand the tactics that 
 will be employed to disperse them and how best 
 those tactics can be met. But in every Labour 
 trouble for the next generation a very large 
 proportion of those concerned will be veteran 
 soldiers ; not a few of them probably men who 
 have held commissions and been entrusted with 
 commands on active service. Thus it may 
 be found after the war that the traditional 
 weakness of a British mob has become a 
 thing of the past, and an outbreak of Labour 
 unrest may be very much more dangerous 
 than anything to which we have become accuse 
 tomed. 
 
 And we certainly cannot rely upon the con- 
 tinuance of order within the continental States. 
 The difficulties with which we shall be confronted 
 at the end of the war in this country will affect 
 
22 BRITAIN AFTER THE PEACE 
 
 to a greater or less degree every continental 
 belligerent as well. The one important differ- 
 ence that I can see tells indeed entirely in our 
 favour, for unless the war be very much pro- 
 longed, we shall have the means, as I hope to 
 show, to deal with the problem if we care to 
 employ them. But for some of the continental 
 Powers, notably Austria and Germany, I can 
 see no possible way out of the chaos into 
 which they will certainly be plunged, except 
 by a complete reconstruction of the Government 
 from top to bottom in a way hardly conceivable 
 without civil war. Whatever be the ultimate 
 outcome abroad, there will quite certainly be 
 enough happening there during the first years 
 of peace to keep the revolutionary idea alive 
 here. As has been shown by the extraordinary 
 meetings to acclaim the Russian Revolution, 
 that great event has already had a profound 
 influence. Such a thing occurring after the 
 war could not fail to have a tremendous effect 
 on a people struggling with poverty and un- 
 employment. Revolutionary ideas are always 
 infectious, and even if the state of things that 
 must prevail abroad after the war is such as can 
 be adequately described by Sir Edward Grey's 
 mild phrase as *' worse than 1848,'' the discords 
 
EUROPE IN REVOLUTION 23 
 
 of the Continent will not be without an im- 
 portant influence here. 
 
 I have hitherto confined myself mainly to 
 showing that the changes caused by the war 
 must necessarily have broken up the innate 
 conservatism of the British people. To a large 
 extent their established way of looking at things 
 must have been altered. This we can say for 
 certain, there is more difficulty in saying what 
 new ideas they may so far have imbibed. In 
 the first place, there has been a great mixing up 
 of different sections of the proletariat. People 
 from backward rural districts have been brought 
 in contact with trade unionists and Socialists 
 from the industrial towns. Practically every idea 
 current among sections of the people before the 
 war has been given a new opening to spread and 
 to reach those who hitherto hardly knew of its 
 existence. And, on the whole, the conditions 
 for spreading new ideas have not been unfavour- 
 able. More or less clearly, every intelligent 
 soldier has had at the back of his mind the 
 problem with which this book attempts to deal. 
 The question of what has to become of him after 
 the peace, however much more pressing matters 
 might demand his attention, has never been 
 entirely absent from his mind. The character 
 
24 BRITAIN AFTER THE PEACE 
 
 of the new army, too, as that of Cromweirs 
 " New Model,'* is such that in almost every 
 company there must have been some individual 
 capable of formulating the question in an in- 
 telligent manner, and discussing ways of dealing 
 with it. The slow, tedious months of trench 
 warfare, unlike the rapid marches and swift 
 battles of other days, have given plenty of 
 opportunities for discussion and thought, so that 
 it is unlikely that any opinion strongly held by 
 a number of men could long remain unknown 
 to their comrades. 
 
 It would not do to assume from all this that 
 the new army as a whole is likely to have become 
 permeated with any one political or social idea. 
 The point is that there has certainly been a very 
 great opportunity for various new ideas to 
 spread under most favourable conditions. 
 " Custom is king,*' indeed, but the men of the 
 new army, where custom can have had little 
 power to shackle thought and criticism, have 
 been living from day to day a life in which all 
 was unaccustomed. The same applies to the 
 war workers, both men and women. They have 
 been living in a new world, compelled by the 
 very nature of the case to consider new things, 
 or things at least new to them. Their minds 
 
EUROPE IN REVOLUTION 25 
 
 have been rudely torn from the safe anchorage 
 of use and wont, they have been flung, not only 
 into strange circumstances, but among people 
 of varied ideas and experience. Hodge has 
 come to town, and however dazed by the noise 
 and hurry can never be the same Hodge again. 
 But it is a new and strange town, and one w^hich 
 must pass away into something equally strange 
 and unaccustomed. It will leave its abiding 
 impression on the spirit, but the tumult and the 
 terror of it must pass away soon, leaving the 
 actors face to face with other adventures 
 equally grave and more enduring. Towards the 
 problems of peace they will bring the spiritual 
 loss and gain, the bitter but dying passions of the 
 war, the remembered or half-remembered utter- 
 ances of companions in the field or at the forge, 
 to be wholly forgotten in course of time or 
 brought out to vivid relief when the coming of 
 new conditions confirms the truth of half- 
 forgotten words. 
 
 The outbreak of peace must bring the results 
 of a great moral revolution into contact with 
 those of an almost equally great economic 
 revolution. Though, no doubt, many trades 
 carried on in the past will rapidly revive 
 after the war, and though during it a large 
 
26 BRITAIN AFTER THE PEACE 
 
 part of the fabric of British industry has been 
 kept together, it is unthinkable that anything 
 Hke the old state of things can be revived for 
 a long time. The same rough equation of 
 demand and supply that existed in 1914 can 
 hardly be hoped for in one trade out of ten ; 
 that there should be anything like such an equa- 
 tion throughout the Labour world is out of the 
 question. All will admit that the problem must 
 be a far greater one than any of the kind with 
 which we have hitherto been confronted, but 
 I doubt whether any one can make even a guess 
 at the possibilities of it. To many thousands 
 the war must certainly mean a permanent change 
 in life, and it may readily mean that to the 
 majority of the nation. Without attempting 
 to dogmatize about the extent of the problem, 
 it may be worth while to try to define which 
 of the things established before the war may be 
 expected to survive it, and which are threatened 
 Avith extinction or fundamental change. 
 
 Whatever the effects of the war may be, it 
 cannot alter two of the main foundations of 
 national prosperity — the fertility of the soil and 
 the mineral wealth beneath it ; while though 
 the death or disablement of so many thousands 
 pf men will affect the third, the supply of human 
 
EUROPE IN REVOLUTION 27 
 
 skill, that also will be nearly as abundant- after 
 the war as before. These are the bedrock 
 essentials of society, upon which in every civil- 
 ized nation a complex structure, political, social, 
 and economic, is raised. In times of peace 
 such a superstructure may exist with only 
 gradual and orderly modifications for genera- 
 tions ; but in considering a problem like that 
 with which we are faced it is important to 
 remember that it is, after all, only a super- 
 structure. It is as certain as anything can be, that 
 soon after the war the people will be ploughing 
 and digging the land, hewing the coal, and working 
 home-raised and imported raw materials up into 
 goods for exchange. Whatever dislocation may 
 take place at first, and however great the changes 
 that may occur in the meantime, on a greater 
 or lesser scale, the age-long task of humanity 
 will certainly soon be resumed throughout 
 Europe of applying human energy and skill to 
 the earth and extracting from it the necessaries of 
 life. These things are bound to survive after 
 anything short of an earthquake that should 
 swallow up Europe itself. Many other things, 
 no doubt, will also survive, however modified ; 
 but it is hardly too much to say that there is 
 scarcely anything else in society of which we 
 
28 BRITAIN AFTER THE PEACE 
 
 can say with certainty that it is safe. The great 
 majority of the men now in the army will cer- 
 tainly spend most of their remaining days doing 
 some kind of productive work, but not necessarily, 
 perhaps not very often, the same kind of work 
 as before the war. Trades will have changed 
 their locality, or have ceased permanently, while 
 new ones may gradually take their places. This is 
 specially likely to be the case in a highly developed 
 country like ours, depending to such an extent 
 on foreign trade. Our large coal supply will 
 certainly be used in some way or other, and 
 industries, the extent of which will be deter- 
 mined by the extent of that supply, will either 
 be recovered or created : but the encroach- 
 ments of neutral nations on our old markets, 
 and the changes in the character of demand at 
 home and abroad may modify out of all know- 
 ledge the kind of goods manufactured. To give 
 one or two illustrations. Before the war we had 
 the lion's share of the trade in Argentina, to 
 which country we sent large quantities of capital, 
 in the form of railway engines, agricultural 
 machines, etc. During the war Argentina has 
 been compelled to look to the United States for 
 these things. The basis of this as of numberless 
 other British industries lay in the facts that we 
 
EUROPE IN REVOLUTION 29 
 
 have a good coal supply and a competent army 
 of miners here, while we have iron ore of our own 
 and can readily get more from Bilbao, where 
 there is little coal to smelt it. Whatever happens 
 to the Argentine trade, then, there is little doubt 
 that most of our coal-mines will still be worked, 
 and the Bilbao ore will still need to be taken 
 where it can be smelted, and this country having 
 a superabundant supply of skilled labour, the 
 iron and steel so produced will still be made up 
 into goods of some sort or other. There is no 
 certainty, however, that the same goods will 
 be produced or that they will go to the same 
 market. The fact that the skill available in the 
 country has been largely specialized will no doubt 
 exercise a strong conservative tendency, but how 
 far this will decide the matter will depend on 
 changes in the world market, of which we can 
 make no estimate. 
 
 Or take what I may call '' artificial " trades, 
 those dependent on the demand for national 
 and personal luxuries. The demand for the 
 latter, at least, will be greatly reduced by the 
 war. Europe will hardly escape from this con- 
 flagration without either a widespread repudia- 
 tion of national debts, involving ruin to a very 
 large part of the wealthy class, or such a drastic 
 
30 BRITAIN AFTER THE PEACE 
 
 system of income taxation as will cripple the 
 whole of it for many years. Luxury trades, 
 then, are certain to have a very bad time, and to 
 give place to trades producing more necessary 
 things. 
 
 And so we may expect, and indeed hope, the 
 great luxury trade of governments, the trade 
 in armaments, will be very greatly affected 
 at least for a number of years after the 
 war. Governments have generally spent all the 
 money they can spare on armies and navies ; 
 and the last generation being on the whole one 
 of peace and prosperity, there was a constant 
 increase in the amount spent on armaments 
 everywhere. This aspect of the armament 
 question has not, I think, been sufficiently recog- 
 nized. The jealousies and fears of nations were 
 indeed the primary motives at the back of the 
 steady increase of naval and military expendi- 
 ture during the armed peace, but it was the 
 rapid growth of wealth in the industrial States 
 that gave the economic opportunity for that 
 expansion. A poor nation can, it is true, train 
 all its citizens to arms, but only a comparatively 
 rich one can afford ships and guns of the enor- 
 mously costly nature of those used in this war 
 to arm them with. As through the expansion 
 
EUROPE IN REVOLUTION 31 
 
 of industry it became possible to arm men in 
 greater and greater numbers and with more 
 and more expensive weapons, the armament 
 trades became increasingly profitable, and a 
 larger and larger part of the inventive energy of 
 the nations was turned on to make more destruc- 
 tive, and incidentally more expensive, weapons of 
 war. But the growth of the industry was always 
 dependent upon the expansion of wealth generally, 
 upon the power of modern capitalism to produce 
 surplus value. Militarism, like any other para- 
 site, can never grow beyond its " host's '' power 
 to feed it, and the host in this case was the 
 national revenue. 
 
 But throughout Europe after the war there 
 will be no national surpluses on which the arma- 
 ment trades can rely, but only national deficits. 
 The position, as we shall see later, will not be so 
 hopeless in this country as on the Continent, 
 but even here there will be obvious difficulties 
 in finding money for great military develop- 
 ments. It is hard to see, also, what excuse there 
 can be for buying rifles, cannon, ammunition, or 
 Dreadnoughts. The country will be flooded 
 with these things, with weapons enough to arm 
 the whole population. There will be more battle- 
 ships than we can man consistently with carry- 
 
82 BRITAIN AFTER THE PEACE 
 
 ing on the trade of the country in tmie of peace ; 
 and wliatever method may be adopted of demobi- 
 Hzing the army, the Government is more likely 
 to wish to dispose of their surplus weapons and 
 accoutrements than to buy more. 
 
 These instances may suffice to show that there 
 must be widespread changes in the character 
 of trade, especially on its first revival after the 
 war. Possibly, too, there may be a great 
 shrinkage, either temporary or permanent, in 
 its total amount. Certainly in many, probably 
 in the great majority of trades, Labour and 
 Capital can only resume their regular work after 
 a prolonged period of readjustment. Even 
 should there be, as some suppose, a boom in trade 
 to follow the war, the things in demand will 
 vary greatly from those required under ordinary 
 conditions ; it will be a demand for commodities 
 of reconstruction rather than of consumption, 
 causing an enormous demand for some kinds of 
 labour and very little for others. 
 
 If into this chaos we throw millions of dis- 
 charged soldiers, all anxious for work, and all 
 feeling rightly that they above all others have 
 a claim to the gratitude of their country, it is 
 impossible to exaggerate the mischief that must 
 ensue. Every one realizes this to some extent, 
 
EUROPE IN REVOLUTION 33 
 
 and some scheme of gradual demobilization is 
 sure to be adopted. Unfortunately, no one can 
 even guess how fast, if ever, the normal industries 
 of the country will revive, nor what trades will 
 do so first and what kind of labour will be wanted. 
 Any scheme for demobilizing the army at so many 
 regiments a month or a quarter, which may be 
 devised beforehand, cannot bear any relevance to 
 the unknowable demands of the labour market. 
 But if it be impossible to guess, even approxi- 
 mately, the rate of revival in the demand for 
 labour as a whole, it is manifestly even more 
 hopeless to foresee the proportions in which the 
 different trades will take part in it. Suppose 
 on a given day we demobilize (because that 
 method suits the convenience of the War Office 
 and has been planned beforehand) ten battalions 
 of men. Among these there may be a thousand 
 engineers, a thousand textile workers, and a 
 thousand coal-miners. As any plan of demobi- 
 lization of this kind must necessarily be made 
 in complete ignorance of the prospective condition 
 of the labour market, it may very readily happen 
 that on that day there is a demand for two thou- 
 sand engineers, five hundred textile workers, 
 and for no miners at all. This would leave the 
 engineering trade insufficiently manned, whilst 
 
 3 
 
34 BRITAIN AFTER THE PEACE 
 
 turning one thousand five hundred men on to 
 the streets ; to carry such a process out till 
 millions of fighting men were affected by it would, 
 I am convinced, be the direct road to anarchy and 
 civil war. 
 
 The problem before British statesmanship now 
 is that of carrying out a revolution " in due form 
 of law '* : it is not a choice between revolution 
 and reform. Revolution we shall have in any 
 case, for one-half of the work of revolution is 
 already done : we are in the revolution here 
 and now. So long as a social order, however 
 faulty, is in existence and can be " made to work,'* 
 the method of reform is generally the true way 
 of progress. It is by no means necessaiily the 
 slowest or least thorough way of going to work. 
 On the contrary, by far the larger part of the 
 fundamental changes that have gone on in 
 society from the dawn of civiUzation till to-day, 
 have been the result of gradual modifications 
 going on continually rather than of great revolu- 
 tionary alterations. I think it very Hkely that 
 if there had been no war quite as far-reach- 
 ing, changes in the minds of men and in the 
 structure of industry might have taken place 
 in the next few decades as have actually been 
 accomplished in the three years of war. In 
 
EUROPE IN REVOLUTION 35 
 
 that case, however, legislative changes rendered 
 necessary would have been carried out also, 
 without any strong realization among the people 
 of their fundamental character, which never- 
 theless in their cumulative effect might have 
 been quite as drastic as any forced upon us by 
 the coming crisis. Time and the slow, con- 
 tinuous action of the air and water destroy more 
 buildings than fire or flood, but they do so 
 gradually, and the work of restoration can be 
 carried on in a regular and orderly manner. 
 When, however, the building is burnt down or 
 washed away, it is useless to send round to the 
 plumber or the painter to put matters right. 
 One-half of a revolution has taken place, the 
 house is destroyed ; it is necessary to complete 
 the revolution by building another. 
 
 And if we are to get through the trying times 
 before us without anarchy and bloodshed, it 
 is before all things necessary that the nation 
 should grasp the essentially revolutionary 
 character of its task. Revolution doe* not 
 necessarily mean civil tumult, nor does civil war 
 necessarily produce important political results. 
 All the civil wars of South America have accom- 
 plished far less than the fundamental revo- 
 lutipn in Russia. The one that mattered most 
 
36 BRITAIN AFTER THE PEACE 
 
 perhaps was that which changed Brazil from an 
 Empire to a RepubUc, and that I beUeve took 
 place without any fighting at all. None of them 
 arose over a problem anything like so far-reach- 
 ing as that which confronts the British people, 
 and indeed all Europe, to-day. To solve this 
 problem without violence but with wisdom and 
 resolution is the task of our statesmanship. 
 
CHAPTER II 
 
 THE PROBLEM OF DEMOBILIZATION 
 
 In a certain broad sense, the whole of the diffi- 
 culties with which the country will be called 
 upon to deal at the coming of peace, may be 
 summed up in the word *' demobilization." The 
 process begun by the war consists mainly of the 
 mobilization and subsequent demobilization of 
 substantially the whole nation. At the out- 
 break of war, every one capable of bearing arms 
 or of making munitions is taken out of his or 
 her allotted niche in life and placed for the time 
 being in a new one. In the course of the war 
 itself the old place is destroyed or occupied by 
 some one else, or at least is rendered for a time 
 unavailable. With the coming of peace begins 
 the work of replacing people in their old positions, 
 where that is possible or desirable, or of finding 
 new outlets for their energies, where it is not. 
 Only when the working power of the country is 
 
 3T 
 
88 BRITAIN AFTER THE PEACE 
 
 again in more or less permanent employment 
 can the work of the revolution begun in 1914 
 be said to be completed. The political and 
 other readjustments rendered necessary by the 
 change, important as they may be, should rather 
 be looked upon as secondary consequences of 
 the revolution, than as essential to it. Each 
 individual unit in the vast multitude disturbed 
 by the war has the same object at the peace — 
 to settle down into some satisfactory way of 
 making his or her living. 
 
 The nation will, in the first instance, be faced 
 with two large armies of persons whose temporary 
 work has utterly ceased — the munition workers 
 and the soldiers. Along with these there will be 
 a third army employed in carrying on that part 
 of the normal peace activities of the country 
 which have continued throughout the war. It 
 is even conceivable that this third army may 
 itself be quite competent to carry on such of 
 the old industries of the country as remain to 
 us after the peace. They have actually done a 
 great part of this work all through, together with 
 a great deal of indirect war work also. It may 
 very easily be, for instance, that the miners now 
 in the pits may be enough to raise all the coal 
 required ; for though some of our export trades 
 
THE PROBLEM OF DEMOBILIZATION 39 
 
 will revive at once and we shall be better supplied 
 with household coal, the naval and other war 
 demand will fall off. Supposing, no improbable 
 thing, that our trade were found to have shrunk 
 to the level of the beginning of the century, the 
 experience of the war has shown that that volume 
 of trade could be carried on under present-day 
 methods with a very much reduced staff. When 
 we think of the effect of a sudden suspension of 
 all war orders, it seems certain that, without 
 considering the army at all, the demand for 
 labour will for some time at least fall short of 
 the supply. Whatever may be the case with the 
 total quantity of it, the kind of demand cannot 
 be expected to bear any relation to the quality 
 of the supply. The reviving peace trades will 
 perhaps only seldom, and then accidentally, call 
 for labour in which those who have engaged in 
 war work are expert. Even without the de- 
 mobilization of the army, then, we shall prob- 
 ably have a very serious unemployed problem 
 after the war, if not because of an actual 
 surplus of labour power, at any rate because of 
 the inexperience of many of the workers in the 
 kinds of work required. 
 
 If into such a labour market we fling the 
 millions of soldiers now with the colours, no 
 
40 BRITAIN AFTER THE PEACE 
 
 words can describe the chaos that must certainly 
 ensue. To my mind, such an action by the 
 Government would in itself be tantamount to 
 a declaration of civil war. During the last 
 sixty or seventy years, the working classes have 
 painfully built up an elaborate organization, 
 even yet inadequate to deal with the ordinary 
 troubles of the industrial world. Trade Unions, 
 Co-operative and Friendly Societies, do what 
 they will, are unable to keep the mass of the 
 proletariat above the poverty line, even in good 
 times ; they are still less adequate to support 
 the strain of recurring periods of trade depression 
 and unemployment. Before the appalling dis- 
 proportion between demand and supply in the 
 labour market, brought about by such an ending 
 to the war, they would be utterly helpless. The 
 workers would have no choice except between 
 starvation and civil war. 
 
 Dimly enough this is recognized, and I am 
 not aware that any one has been hardy enough 
 to advocate the wholesale discharge of Kitchener's 
 Army. Some method of regulating the discharge 
 will certainly be attempted, but there is as yet no 
 indication of any scheme that does not imply 
 the occurrence of the industrial scramble on a 
 hardly less gigantic scale than would be involved 
 
THE PROBLEM OF DEMOBILIZATION 41 
 
 by instant and complete demobilization. Any 
 plan for disbanding the soldiers by instalments, 
 however slowly, must be made in complete ignor- 
 ance of what will be the condition of the labour 
 market at the time each instalment comes into 
 it. Plans made to suit the convenience of the 
 War Office or the Government have necessarily 
 no relevance whatever to the only thing that 
 matters vitally — the growth of the demand for 
 labour in quantity and 'kind. No doubt it 
 might suit the War Office very well to pay off 
 surplus men by mihtary units ; but it would 
 obviously only be by some extraordinary accident 
 that any regiment or brigade would consist solely 
 of men whose original trades were all calling out 
 for labour at the same time. Yet a War Office 
 plan of demobilization would almost certainly 
 be determined by War Office convenience, which 
 the officials will naturally understand, not by 
 any consideration of the demand for labour in 
 1918 or 1919, which nobody — not even the 
 experienced business man — knows, and of which 
 War Office officials can form no conception 
 whatever. 
 
 Various schemes have been put forward, and 
 ideas based on the experience of the war have 
 been advanced, aiming at an immense increase 
 
42 BRITAIN AFTER THE PEACE 
 
 in the production of the nation. With these 
 I shall deal further in a later chapter; for the 
 present it is enough to note that, even if by 
 their means our trade can be so increased as to 
 absorb in industry the whole of the population, 
 at least industrial reforms of this character will 
 require time, many years in fact, to operate. 
 But it is at once, not at some distant time, that 
 the problem of unemployment must be tackled. 
 We cannot wait until British trade has opened 
 new markets on a huge scale, for the daily bread 
 of the people. Any scheme, however imperfect, 
 that can be put into immediate operation, has 
 a great advantage over even the best-laid plan 
 for the ultimate solution of the problem. We 
 shall be called upon at the close of the war to 
 consider an immediate crisis, not a plan for the 
 future : or rather, we must so deal with the 
 immediate problem -se^ as to gain the necessary 
 time to develop future plans. For if once we 
 allow the wholesale flooding of the labour market, 
 there will be no possibility of considering any- 
 thing else. There is no way whatever of dealing 
 with such a glut of labour, if ever it occurs ; 
 therefore, it must not be allowed to occur at all. 
 As there is no possibility of estimating the rate 
 at which industry will be able to absorb the 
 
THE TROBLEM OF DEMOBILIZATION 43 
 
 surplus supply of labour after the war, our method 
 of preparing for the crisis must not be based on 
 any fallacious attempt to make such an estimate. 
 A method must be devised which will release men 
 from the army only as the labour market, whether 
 its recovery be fast or slow, is able to receive 
 them. Not some knowable factor, like the con- 
 venience of the War Office, of the Government, 
 or of the taxpayer, but that utterly unforeseeable 
 one, the expansion of the labour market itself, 
 must determine the whole matter. Is it possible 
 to devise any plan sufficiently elastic to allow of 
 demobilization as rapidly as the labour market 
 requires if and where the revival is rapid, and 
 slowly enough to avoid flinging our gallant 
 citizen soldiers into poverty if it revives only 
 slowly, or where it never revives at all ? I 
 think there is, but to discover it we must 
 look at the matter from a different point of 
 view. 
 
 What is the ethical relation between the nation 
 and its new army ? The State, either by volun- 
 tary enlistment, by social pressure, or by legal 
 compulsion, has taken the soldier away from 
 his old work at a time of national need. For 
 the fact that this need had arisen, the soldier 
 himself was neither more nor less responsible 
 
44 BRITAIN AFTER THE PEACE 
 
 than his fellow-citizens, who by reason of age 
 or sex were unable to fight. He did not make 
 the war, he did not ask for it, nor was he con- 
 sulted in any way as to the time at which he 
 should take up this new work. He left his old 
 work for our convenience, at our time, and be- 
 cause of our national needs. Very often he did 
 this at a very great sacrifice for the sake of the 
 nation. As the result of his patriotism, he will 
 find himself face to face with the task of finding 
 new work or of recovering his old. This many, 
 perhaps most, of the soldiers will be unable to 
 do at least for a considerable time. 
 
 It is clear that the soldier himself is in no way 
 whatever responsible for this. Whatever plausi- 
 bility there may be in the view that the percentage 
 of workmen who fail to get employment in busy 
 times are unemplo^^able, and whatever reason 
 there may be in the statement that those who 
 get paid off first in bad times are, on the whole, 
 less efficient workmen than those who retain 
 their jobs, this particular case of unemployment 
 admits of no explanation that is not altogether to 
 the credit of the soldier. Whatever happens, the 
 soldier should not be allowed to suffer in any 
 way by it. The responsibility for the matter 
 is entirely a national one, and it is for the nation 
 
THE PROBLEM OF DEMOBILIZATION 45 
 
 and the nation alone to bear any burden that 
 may result from it. 
 
 Now, except in a very feeble way, the nation 
 has not hitherto made itself responsible for 
 the problem of unemployment. If a man for 
 any cause loses his work, it has been regarded 
 as entirely his business to find another job — or 
 to starve. Much pressure put upon the local 
 authorities and the State, the work of the Labour 
 Exchanges and the unemployment provisions of 
 the Insurance Act hardly affect the substantial 
 truth of this. And however we may resent 
 the indifference with which those flung out of 
 employment, by fluctuations of trade or other 
 causes, have been left to struggle for themselves, 
 at least it could be claimed that ordinary unem- 
 ployment does not come about in consequence 
 of patriotic service, specially undertaken at the 
 request and for the benefit of the nation. 
 
 This new kind of unemployment should be 
 treated in quite a new way. The war, the peace 
 and the settlement after the peace, divide the 
 hfe of each temporary soldier into two sections 
 divided as by a chasm. Across this chasm they 
 have to be transported from a safe position on 
 the one side to an equally secure or a better one 
 on the ether. Until the soldier is again settled in 
 
46 BRITAIN AFTER THE PEACE 
 
 some peaceful work on the far side of the chasm, 
 the duties of society towards him have not been 
 discharged. The responsibiUty for doing this 
 is a national one, pure and simple. In the past, 
 the unemployed problem has been treated as 
 an individual one — to the unemployed man him- 
 self has been left the problem of finding work, 
 and to him has been left the penalty of failure, 
 individual poverty, and destitution. There is 
 no justification for such a course in this case. 
 The problem is caused by national exigencies ; 
 the responsibility for finding work should be a 
 national one ; and the penalty for failure should 
 fall, not on the soldier, but on society. 
 
 How is the nation to shoulder this responsi- 
 bility ? We have taken the soldier from his 
 work when it suited tis, he should not be dis- 
 charged from the army until it suits him. He 
 has been engaged for the war on certain conditions : 
 he has a sufficient ration, his clothes are provided, 
 and, if he has a family, in addition to a pocket- 
 money wage, there is a regular allowance for 
 his wife and children. So long as these continue 
 he is safe, at least from destitution. The moment 
 the Government discharges him, his difficulties 
 begin. He may or may not find employment, 
 but in the conditions likely to prevail for some 
 
THE PROBLEM OF DEMOBILIZATION 47 
 
 years after the war, it seems very unlikely that 
 he will. He will be almost helpless, condemned 
 to tramp the country from one over-supplied 
 town to another, until driven desperate and filled 
 with bitterness against a country that has treated 
 him so ill, he becomes ready for insurrection 
 and revolution. If, however, we do not discharge 
 him at all, but leave it to the soldier himself to 
 decide when he shall give in his notice to leave, 
 the position will be in his own hands. No doubt, 
 most soldiers will be overjoyed when they can 
 leave the army for good civilian employment, 
 but a wise man will think twice before he sur- 
 renders even army pay and food for a desperate 
 tramp in search of work. If he knows of a job, 
 he will take it, and he may even seek diligently 
 for one, if by going in search for it he is not 
 losing the separation allowance that is keeping 
 his family from poverty. He will be in a position, 
 too, to exercise some discrimination in the kind 
 of work and the conditions of pay that he will 
 accept. Wages of fifteen or sixteen shillings 
 a week will not do for the old agricultural labourer 
 who is now being kept himself, while his wife 
 and family are perhaps receiving half as much 
 again as that. The town labourer will like to 
 know something of the character of any employer 
 
48 BRITAIN AFTER THE PEACE 
 
 for whose service he leaves the safe anchorage 
 of army pay. Both will be anxious to know that 
 by taking any particular work they are not 
 undercutting or depriving of a job some un- 
 fortunate who has no such reserve occupation 
 as their own to fall back upon. 
 
 In fact, if we adhere strictly to the principle 
 that no soldier shall be discharged until he him- 
 self voluntarily fills in a notice to leave because 
 he has found or been offered a position to his 
 liking, we shall find almost all the problems 
 created by the war greatly simplified, and already 
 half-way to a solution. There are three classes 
 of labour vitally concerned in a true settlement 
 of the demobilization problem : the soldiers them- 
 selves, the regular workers who have stayed at 
 home, and the women who have been drawn into 
 industry during the course of the war. I think 
 it is all to the good that the openings for women 
 have been so largely increased during the war. 
 The scandalous rates at which women's labour 
 has generally been paid, largely arose from the 
 fact that such a very small range of choice of 
 occupations lay before the woman worker, to 
 whatever class in the community she belonged. 
 The war has, at any rate, opened up to her many 
 new avenues of employment, and rendered it 
 
THE PROBLEM OF DEMOBILIZATION 49 
 
 not only desirable, but practically possible, to 
 organize women's work. But if immediately 
 after the war we are to have a scramble between 
 women, trade unionists, and discharged soldiers 
 for employment, women will be driven from their 
 new positions, or will only retain them at the 
 cost of a terrible conflict with those who did the 
 same work before the war. Each section will 
 be driven by the whip of hunger to fight for what 
 work there is. There will be a premium on 
 intolerance and narrowness of view, which will 
 destroy all prospect of a progressive adaptation 
 of the industrial world to new and more liberal 
 conditions. The interests of the three classes 
 are really one — to see that there is no unmanage- 
 able glut in the labour market. 
 
 With regard to trade unionists. Various pledges 
 have been given to them for the restoration of 
 Trade Union .regulations after the war. These 
 pledges are, I am convinced, either useless or 
 unnecessary. If the Government allows the 
 labour market to be flooded with possibly 
 millions of unemployed, no power on earth can 
 possibly prevent the employing class from taking 
 advantage of the situation — like so many other 
 Government pledges, these would be swept away 
 as by a flood. The Trade Unions alone can 
 
 4 
 
50 BRITAIN AFTER THE PEACE 
 
 look after the restoration of their rules, or, what 
 is perhaps even better, the substitution of new 
 ones suited to the altered conditions of the time. 
 Whether they will be able to do this or not 
 depends on their strategic position after the war. 
 If the Unions find that there are few men at the 
 factory gates seeking employment, they will look 
 after the restoration of their own rules themselves, 
 and Mr. Lloyd George need not worry himself 
 about his pledges. 
 
 Again, this method of demobilization is one 
 that will work equally well whatever the rate 
 at which industry in general or in any particular 
 trade will revive after the war. If the recovery 
 is rapid, there will very soon be a large number 
 of jobs offered, and demobilization will proceed 
 apace ; if the revival is slow, demobilization will 
 also be slow. If one trade recovers rapidly, 
 there will soon be a number of men accustomed 
 to work at it taking their discharge; another 
 more slow to revive will draw more slowly on 
 the army ; a third, which turns out to have been 
 lost altogether, will leave its old employees in 
 the ranks until some other kind of work be found 
 for them. The army will be like an immense 
 reservoir of surplus labour, from which any par- 
 ticular industry can be supplied as soon as it 
 
THE PROBLEM OF DEMOBILIZATION 51 
 
 is in a position to offer decent terms of pay and 
 security ; but it will serve effectually to prevent 
 an immense flood sweeping over the whole field 
 of industry and carrying with it every safe- 
 guard built up by the proletariat for the defence 
 of the standard of life. 
 
 The soldier who has fought for his country 
 will be placed in a position to make a fair bargain 
 for his labour. If anxious to return to civil 
 life as quickly as possible, he may, it is true, 
 look out for employment, but he will not 
 necessarily be compelled to play the suppliant 
 for work. More often, the employer will come 
 to seek him. While it ought not to be the busi- 
 ness of the War Office to press the men to leave 
 the army, it would, of course, be justified in 
 posting up any information obtained through 
 the Labour Exchanges about work to be obtained ; 
 while employers seeking labour would be at 
 liberty to come to the camps and make bargains 
 with the men there. Conscious of the fact that 
 his position was secure, the soldier would have 
 no need to accept any offer made to him. What 
 is equally important, he would not necessarily 
 feel compelled to go back to the same trade. 
 If he had been uncomfortable before, this would 
 be the opportunity of his hfe to make a permanent 
 
52 BRITAIN AFTER THE PEACE 
 
 change, so that, no doubt, numbers of men would 
 only leave the arm}^ "to better themselves." 
 The plan relieves us of any danger of a bureau- 
 cratic attempt to decide what are the proper 
 conditions for the discharged soldier. The State 
 takes a man from his work when it wants him ; 
 it undertakes to keep him on a certain scale till 
 he has got work equally satisfactory, but it 
 makes no attempt to dictate to him what is 
 '* satisfactory.'* He is free to determine that 
 for himself, and thus when he does finally return 
 to civil life, the nation can fairly claim to have 
 done its duty by him. Free to choose, he has 
 voluntarily taken work with which he is satis- 
 fied, and if he has chosen unwisely that is his 
 fault. 
 
 There remains to be considered the case of 
 the munition workers. They are the very last 
 people for whose services there ought to be any 
 immediate demand at the close of the war, for 
 the simple reason that whenever the war ends 
 the country is certain to be stocked with shells, 
 explosives, arms, and munitions of all sorts 
 beyond any possible requirements in time of 
 peace. Yet they, too, if not on a definite contract 
 as to wages and pension, have been taken by the 
 nation from their old occupations for the con- 
 
THE PROBLEM OF DEMOBILIZATION 53 
 
 venience of the nation, and will then be on the 
 look-out for fresh posts. It seems to me that 
 here is a fair case for demobilization on some 
 prearranged method. If relieved from the com- 
 petition of millions of demobilized soldiers, there 
 ought to be little doubt that they would all 
 obtain employment before long. Still it is very 
 doubtful whether industry will recover rapidly 
 enough to enable all of them to get work at once, 
 and some scheme of demobilization is required 
 even for them. In the first place, every munition 
 worker in a controlled establishment should be 
 allowed a free pass to any part of the country he 
 or she preferred, together with a money allow- 
 ance enough to tide them over the period of 
 unemployment which many may have to face, 
 In order to adjust supply and demand as far as 
 possible, the allowance should not be paid out 
 in a lump sum, but distributed according to a 
 prearranged plan, a certain proportion^ for example, 
 of the average wages obtained when making 
 munitions for ten weeks, a smaller proportion 
 for fifteen weeks, and a still smaller proportion 
 for twenty and twenty-five weeks respectively, 
 at the choice of the worker. A slightly larger 
 total sum should be granted when the longer 
 terms are chosen, so as to offer an inducement 
 
54 BRITAIN AFTER THE PEACE 
 
 to some of the workers to prefer them and so 
 ensure that the munition workers only come into 
 the labour market gradually over a period of 
 six months. Of course, if a munition worker 
 obtained satisfactory employment before his 
 allowance was exhausted, his temporary pension 
 would cease. 
 
 If the plan, here outlined, is adopted, I am 
 convinced the immediate situation after the war 
 can be kept in hand. The thing is to give the 
 existing organizations of labour a chance to deal 
 with the matter effectually. The Trade Unions, 
 from one point of view, have been weakened by 
 the war, their regulations have been '' diluted," 
 and all sorts of practices have crept in that would 
 never have been tolerated during peace. Yet, 
 on the whole, there has been little lowering, 
 perhaps there has even been an improvement of 
 the standard of life, for the immense demands 
 of the army and for munitions have restricted 
 the available supply of labour. At the same time 
 the Unions have become financially stronger. 
 There has been in many places a great increase 
 in the number of Unionists, while co-operation 
 has grown by leaps and bounds. And there 
 has been very little drain on Trade Union funds — 
 strikes have been prohibited and unemployment 
 
THE PROBLEM OF DEMOBILIZATION 55 
 
 benefit reduced to a minimum. The funds in the 
 hands of the Unions must, therefore, be very 
 much larger than before the war. If only an 
 effective means can be found of adjusting the 
 supply of labour to the demand, I have no 
 doubt it will be quite possible to recover for 
 Labour all and more than all it has lost during 
 the war. 
 
 And as industry recovers, a larger part of the 
 immense reserve of labour now in the munition 
 factories and the army will be reabsorbed through 
 the ordinary demands of employment. True, 
 this will only take place when and as labour is 
 offered fairly good conditions of employment. 
 The sweater and the industrial martinet will 
 have a very bad chance of securing victims under 
 this arrangement. There will be a strong ten- 
 dency for the old process of securing work to 
 give place to a new one. The workman will 
 no longer have to seek work ; the employer will 
 have to come to the barracks or the camp to 
 seek him — in itself a fundamental and revolu- 
 tionary change in the relations between employers 
 and employed. But employers will want to 
 execute orders, and they cannot do that without 
 labour. Rather than stop work they will, I 
 doubt not, accept the new conditions, and before 
 
56 BRITAIN AFTER THE PEACE 
 
 long, whether on a reduced scale or not, we 
 shall see those industries healthy enough to 
 afford steady employment and good wages, busy 
 and thriving again. Trades that cannot afford 
 to do this will go under, but it is no part of good 
 public policy to keep such industries going, and 
 it would be much better to keep those who worked 
 at them before the war in temporary unemploy- 
 ment until something better can be found than 
 to bolster up a weak industry by a supply of 
 sweated labour. 
 
 But even after industry has absorbed all it 
 can, I am convinced there will be a very large 
 reserve of labour left in the army, for which 
 no employment can be found that way. The 
 demands of the war have drawn many thousands 
 of people into the labour market, which was 
 always overcrowded even before this new addi- 
 tion. Our customers abroad and at home must 
 have been greatly impoverished by the war, and 
 it seems likely that for a long time to come 
 demand will be less rather than greater for 
 British and other manufactures. I should be 
 surprised if the method of demobilization here 
 suggested did not leave the taxpayer saddled 
 with the upkeep of an army altogether dispro- 
 portioned to the needs of the nation in peace, even 
 
THE PROBLEM OF DEMOBILIZATION 57 
 
 if at the peace itself no arrangement for reduction 
 of armaments is made, which would make even 
 the old army unnecessarily large. It thus 
 appears that we have got rid of the danger of 
 immediate anarchy in the labour market, with 
 its menace of civil war, only by changing the 
 character of the problem and not by settling it. 
 It is a problem now for the taxpayer, for the 
 nation at large, not for the individual soldier 
 discharged without prospects, or for the men 
 who have borne the brunt of the national struggle. 
 True, we have immensely improved the position 
 by the change. Whatever difficulty there may 
 be in making a final settlement, that difficulty 
 has to be faced by the nation, whatever burden 
 there may be has to be borne by the nation, 
 not passed on to those to whom the nation owes 
 more than it can ever repay. The fate of the 
 heroes of Waterloo and Balaclava will not be 
 the fate of the soldiers of this war, and whatever 
 inconvenience that may mean to the taxpayer, 
 it is much better that he should pay than that 
 our soldiers should be driven to the workhouse 
 or the sweater's den. But, of course, no one will 
 consider the maintenance of possibly one or two 
 million young men in permanent idleness a satis- 
 factory solution. That is the problem we, the 
 
 I 
 
58 BRITAIN AFTER THE PEACE 
 
 nation, have to face. The advantage of a sound 
 method of demobihzation is that it places the 
 burden on the right shoulders. You have here 
 a thing that no Government could shirk, as 
 Governments have shirked the problem of the 
 disbanded soldier in the past. If only Govern- 
 ments can get rid of this problem, which occurs 
 on a smaller scale after every war, by merely 
 disbanding the soldiers and leaving them to be 
 forgotten and starve, we know from bitter ex- 
 perience that Governments will not scruple to 
 do it. But if we refuse to allow the Government 
 to disband the army compulsorily, and insist 
 upon its maintenance appearing as a heavy charge 
 in each year's Budget until some satisfactory 
 outlet has been found for his energies, the soldier 
 will not be forgotten. On the contrary, he will 
 be one of the most pressing considerations of 
 our statesmen ; he will be a constant subject 
 of thought and discussion ; his will be a problem 
 that no politician can afford to ignore. With 
 that problem I shall deal in later chapters, but 
 meanwhile there is something to be said on one 
 probable result of the plan proposed. 
 
 The Military Service Acts naturally gave rise 
 to a stormy controversy. So splendid had been 
 the result of the appeal for volunteers, that 
 
THE PROBLEM OF DEMOBILIZATION 59 
 
 to many it appeared that if we could not win 
 the war with the fine army recruited that way, 
 the comparatively small number of reluctant 
 young men who had not joined the colours 
 were hardly likely to turn the scale. With 
 the millions of France and Russia already in the 
 field and milUons of our own to add to them, 
 it seemed ludicrous to contend that a few hundred 
 thousands could make much difference one 
 way or the other. There was a widespread 
 feeling that the real motive behind the press 
 agitation which forced the change on the 
 Government was not to obtain a temporary 
 increase of men, but to fasten conscription on 
 the nation for good. With this was a strong 
 suspicion that the real purpose was not military 
 at all ; but that the intention was to lead up 
 through military to industrial conscription, and 
 to leave the w^orking classes at the end of the 
 war helpless in the hands of the employers. 
 Probably there was a good deal of genuine con- 
 viction behind the conscription movement, and 
 much more also of mere panic, but neither sus- 
 picion was, I am convinced, unfounded. Every 
 profession, and certainly the military one is no 
 exception, tends to " magnify its office," and 
 it is natural enough that soldiers sl^ould thinH 
 
60 BRITAIN AFTER THE PEACE 
 
 a very large permanent army desirable. 
 Naturally, too, they are not Quakers, or they 
 would never have become soldiers, and they 
 inevitably tend to think that the first duty a 
 man owes to his country is to fight for it. There 
 is nothing strange about an army officer being 
 in favour of conscription, and even those who, 
 like Sir Ian Hamilton, have opposed it, have 
 done so, I think, not on principle, but because 
 they think a voluntary army of professional 
 soldiers better suited to the needs of the British 
 Empire. But any professional view is neces- 
 sarily a narrow one, and here again the army view 
 is no exception, and the civilian knows that 
 there are many ways of serving his country 
 equally well without fighting. Again, in the 
 revival of the Protectionist movement, in the 
 scandals of " profiteering," and in the abuses 
 that have already appeared of the restrictions 
 put upon the freedom of labour during the war, 
 we have evidence enough that many employers 
 do hope to use the national emergency as a means 
 of depressing labour. No doubt, many of them 
 would be very glad to turn the army intq a 
 strike-breaking machine, and some may have 
 looked to conscription as a means of doing 
 this. 
 
THE PROBLEM OF DEMOBILIZATION 61 
 
 I never felt much fear that either scheme 
 would succeed, and I am pretty sure the plan 
 of demobilization outlined in this chapter would 
 defeat both. After the w^ar the urgent problem 
 will not be how to get more men into the 
 army, but how to get rid of the number we 
 already have there. Nobody in his senses will 
 wish to make the problem, grave enough in all 
 conscience, any worse. But every new man 
 enlisted either voluntarily or by compulsion 
 obviously does add to the difficulty. Far from 
 continuing conscription, the only sensible course 
 on the conclusion of peace is to stop even the 
 ordinary voluntary enlistment until the numbers 
 of the army have been reduced to manageable 
 dimensions. I am convinced that any attempt 
 to continue conscription after the war will break 
 down before the logic of facts. 
 
 Neither under our system will there be any 
 danger of a depression of labour. On the con- 
 trary, the working man will never have been in 
 a stronger position. The reserve army of un- 
 employed, on which the employer has hitherto 
 been able to rely, will hardly exist, at least 
 for a number of years. The workman should 
 have little temptation to violence, because it 
 should be very easy to obtain reasonable de- 
 
62 BRITAIN AFTER THE PEACE 
 
 mands without it. Under these circumstances 
 there could be no excuse for caUing in miUtary 
 assistance in disputes, and employers who had 
 hoped to gain more power by the war would 
 find themselves with a good deal less. 
 
CHAPTER III 
 
 THE, PROBLEM OF FINANCE 
 
 The method of demobilization outlined in the 
 last chapter leaves the nation to face a grave 
 financial problem. There is no certainty, 
 indeed there is no probability, that the ordinary 
 trade demand for labour can revive rapidly 
 enough for a long time after the conclusion of 
 peace to re-absorb all or nearly all the millions 
 of soldiers, the demobilization of whom will be 
 the most urgent problem of the hour. A heavy 
 financial burden will be imposed on the taxpayer, 
 who will have enough to pay in any case, and 
 while we cannot consent to any shirking of the 
 tax-payer's duty at the expense of injustice to 
 the soldiers, we should do everything we can to 
 lighten the burden as quickly as possible. Before 
 making any suggestions on this point, however, 
 it seems desirable to consider the effects of the 
 war on the finance of Governments and the eco- 
 nomic position both in this country and abroad. 
 
64 BRITAIN AFTER THE PEACE 
 
 It must be remembered that while we are 
 considering the problem of reconstruction in 
 this country alone, the same difficulties with 
 which we shall have to deal will confront the 
 Governments of all the other belUgerents at 
 the same time. There will be important varia- 
 tions in detail in every land ; but at least in 
 those countries that came early into the war 
 most of the differences will be of secondary, 
 not primary importance. All the belligerent 
 nations have been fully mobilized, as nations 
 not merely as armies on any former scale, and 
 the same problem of practically universal de- 
 mobilization has to be faced everywhere. 
 
 True, such variations as do occur tend, with 
 one all-important exception, to make the problem 
 simpler in other lands than in our own. This 
 is the most highly industrialized country in the 
 world, depending to a much greater extent than 
 any other on trade and manufactures. This 
 fact compHcates the problem for us. In the 
 case of a nation where a large proportion of the 
 army consists of peasant landholders, these, at 
 any rate, can return to their holdings as soon 
 as peace is declared. Nor is there any doubt 
 about their prosperity when back on the land. 
 However slowly the demand for other things 
 
THE PROBLEM OF FINANCE 65 
 
 may revive, that for foodstuffs will be good 
 from the beginning. For this reason the problem 
 of demobilization in such countries as Russia 
 and the Balkans will be relatively easy ; while 
 in the West, in so far as the soldiers have been 
 drawn from the land, it will be easier than when 
 they have been taken from the factories. But 
 in Belgium and the industrial parts of Germany 
 and France, and to a lesser extent in Italy and 
 Austria and other countries, millions of men 
 have been withdrawn from industry who cannot 
 possibly return to it until trade has had time to 
 recover, and in many cases to develop on new 
 lines. In each of these countries, too, the moral 
 reactions of the changes brought about by the 
 war will be more or less similar. These men 
 also have been violently taken out of the ruts in 
 which their old ideas, political and other, have 
 been moving. There, too, the new and the old, 
 the unthinking and ignorant, have been flung 
 against the revolutionist and the constructive 
 reformer, and been driven by the questioning 
 inevitable amid strange and difficult surroundings 
 to absorb new ideas and interests. 
 
 But there is one thing in which this country 
 has a commanding advantage over all others 
 in Europe, at least over all the Western lands, 
 
 5 
 
66 BRITAIN AFTER THE PEACE 
 
 However great the expense of demobilization 
 on a satisfactory system, it should be possible to 
 find the money to do it. Alone among the 
 belligerents on this side of the Atlantic, this 
 country will not, unless the war be very much 
 prolonged, be faced with bankruptcy as soon 
 as the war ends. This is the supreme service 
 our Free Trade system of finance has performed 
 for the country. Each of our Budgets since the 
 beginning of the war has planned for an increase 
 of revenue from taxation, sufficient to provide 
 interest on any money which had been borrowed 
 up to the time of its introduction, as well as what 
 it was estimated we should have to borrow during 
 the forthcoming financial year. Mr. Bonar Law's 
 estimates of expenditure this spring have been 
 so far exceeded, and his margin was so inadequate 
 that if the war lasts till the end of March it will 
 yet be necessary to impose fresh taxation after 
 the war. Hitherto, however, we have been in 
 such a position that at w^hatever moment the 
 war ceased the existing taxes would always 
 provide for the ordinary expenditure of the 
 Government and the payment of interest on the 
 debt, with a margin for repayment and con- 
 tingencies. I by no means intend to imply that 
 our finance ministers have been sufficiently 
 
THE PROBLEM OF FINANCE 67 
 
 courageous in this respect — we ought to have 
 raised more by taxation or by '' conscription of 
 wealth/' but at least we have planned out our 
 finance with some regard for the future and in 
 such a way as to render an immediate financial 
 crisis at the close of the war highly improbable. 
 This has been possible because of what I may 
 call the positive side of our Free Trade fiscal 
 s\^stem. When Peel reformed our tariff it 
 became, of course, necessary to provide a new 
 source of revenue to compensate us for the 
 loss of customs, and the income tax was imposed 
 as a temporary expedient. The impatience with 
 which it was for years accepted, trifling as the 
 rat'j of the tax generally was, bodes ill for the 
 Governments of the Continent when they find 
 themselves compelled to imitate our expedient, 
 but on a scale many times as severe. Thirty 
 years after its imposition Gladstone promised 
 to abolish the income tax if returned to power, 
 and even later, so good a Radical as Thorold 
 Rogers was still grumbling about it. Never- 
 theless, the income tax held its own, until use 
 had at last reconciled the upper and middle 
 classes to its necessity and justice. It did so 
 by reason of its superiority as a fiscal expedient 
 even in time of peace. The abandonment of 
 
68 BRITAIN AFTER THE PEACE 
 
 such a precarious source of revenue as Protective 
 taxes and the institution of a system of direct 
 taxation put British finances on a sound footing. 
 Since then, during wars, our National Debt has 
 of course grown larger, but in almost every 
 year of peace since that day there has been a 
 surplus for repayment of debt. Thus between 
 the Crimean War and that of South Africa the 
 liabihties of the State fell from £836,000,000 to 
 ;f 635, 000,000, while between the Boer War and 
 the outbreak of the present one £90,000,000 was 
 paid off the principal of the debt. The new tax 
 was equally effective in time of war. Since it 
 was imposed, at least we have always been able 
 to adjust our taxation so as to raise enough new 
 income in each year of war to pay the interest 
 on the debt contracted in it and to leave a 
 surplus towards the war expenditure itself. 
 
 To raise by extra taxation at least enough 
 money to pay the interest on new debts, and 
 to carry out some systematic plan of repayment 
 during peace, is so obvious an essential of pru- 
 dent finance, that once adopted in any country, 
 it is perhaps natural to take it for granted. The 
 plain fact is, however, that none of the great 
 continental Powers has done anything of the 
 kind. Indeed they could not without entirely 
 
THE PROBLEM OF FINANCE 
 
 69 
 
 changing their fiscal systems. The mere fact 
 that a penny in the pound on the income tax 
 will yield nearly as much revenue as 850 Protec- 
 tive taxes realized in 1840 will help to show 
 the reason for this, but a few figures will prove 
 it. In 1876, after paying the war indemnity 
 to Germany, the interest-bearing debt of France 
 stood at ;£796,ooo,ooo ; in 1913, with no great 
 war intervening, it had increased to £1,012,422,000. 
 At the earlier date, the German Empire had 
 no debt ; on the contrary, a large part of the 
 indemnity received from France must have been 
 still unspent. Yet, after over forty years of 
 unbroken peace, the debt of the German Empire 
 in 1913 amounted to £242,743,000. The rate 
 at which the Central Empires were accumulating 
 debt before the war may be gathered from the 
 following table : — 
 
 ENEMY DEBTS BEFORE THE WAR. 
 
 
 German 
 Empire. 
 
 Twenty -six 
 German 
 states. 
 
 Austrian 
 Empire. 
 
 Hungary.' 
 
 1907 
 I9I2 
 
 193,044,000 
 242,743.000 
 
 i 
 648,000,000 
 
 785,000,000 
 
 410,158,000 
 519,631,000 
 
 i 
 229,175,000 
 
 274,702,000 
 
70 BRITAIN AFTER THE PEACE 
 
 Our National Debt being almost entirely a 
 war debt, few of us probably realize to what an 
 extent those of most other countries are not 
 war debts at all, but the accumulated deficits 
 of peace years. 
 
 While the Protectionist finance of Europe was 
 a source of disputes among nations, and thus 
 at any time likely to involve them in war, it was 
 a very bad preparation for war itself. It ren- 
 dered impossible the accumulation of any 
 adequate reserve of financial strength to meet 
 the emergency of war, in which it was, never- 
 theless, constantly tending to involve the nations. 
 When once war broke out on such a gigantic 
 scale, it is the literal truth to say the finance of 
 the Continent fell to pieces. Though the people 
 were taxed to the utmost, no continental nation 
 had a surplus worth considering, and the Central 
 Empires, as we have seen, had disastrous deficits. 
 The system of finance pursued in Europe had been 
 pushed as far as it would go ; every means that 
 ingenuity could suggest had been employed to 
 squeeze as much as possible out of the people ; 
 the vampire of militarism preyed on the national 
 finances, draining them of everything that could 
 be spared, and the result was a steady, if slow, 
 approach to bankruptcy. 
 
THE PROBLEM OF FINANCE 71 
 
 Upon the top of this came the war, the first 
 effect of which was to ruin the revenues of Europe, 
 such as they were. If the revenue of a nation 
 is to survive, much less to expand, during war, 
 the greater part of it must be collected within 
 the nation itself. The cutting off of foreign 
 trade, of course, at once lessens a revenue derived 
 from customs, even when the pressure of war 
 prices does not compel the Government to suspend 
 such taxes altogether. But the necessities of 
 the position forced all the Protectionist nations 
 of Western Europe, even those which were not 
 belligerents, to suspend altogether or in part 
 their duties on foodstuffs and sometimes on 
 manufactures. The regular income of the States 
 must thus have been considerably reduced just 
 at the time when it was most important to increase 
 it. Not having adopted the negative side of 
 Free Trade finance, the abolition of Protective 
 tariffs, the positive side, a system of direct taxa- 
 tion was unknown or undeveloped on the Con- 
 tinent. But it is only by means of a system of 
 direct taxation that the income of a nation 
 can be largely and suddenly expanded in time 
 of war. The Continent had no means of doing 
 such a thing, and practically no provision what- 
 ever has been made abroad from taxation for 
 
72 BRITAIN AFTER THE PEACE 
 
 financing the war, or, what is more to our present 
 purpose, preparing for the position that must 
 follow it. 
 
 What is that position ? Broadly speaking, 
 Europe, which could barely finance its Govern- 
 ments before the war when the people were rela- 
 tively prosperous, will find itself with hi:poverished 
 peoples faced with claims for interest everywhere 
 approaching, and in some cases actuall}/ exceed- 
 ing, the total amount raised by taxation before 
 the war ! I cannot see how this is to be met, 
 for the Governments will have no time to think 
 or plan for the emergency. So long as the war 
 continues it is possible to borrow, for no true 
 statement need be made showing the relation of 
 income to expenditure. Interest can be paid 
 out of new borrowings, which the patriotism of 
 the peoples ensures them lending. But ignor- 
 ance as to the true position cannot be kept up 
 after the war. Interest will become due and 
 must be paid, or the people given to understand 
 that the money is not forthcoming to pay it. 
 The problems with which other Governments will 
 have to deal are essentially the same as those 
 of our own land, with this difference — if we are 
 prepared to meet them honestly and bravely, 
 it seems likelv we shall have the means to do so ; 
 
THE PROBLEM OF FINANCE 73 
 
 with regard to foreign Governments, the means 
 simply do not exist. 
 
 ** Great is Bankruptcy : the great bottomless 
 gulf into which all Falsehoods, pubHc and private, 
 do sink," says Carlyle, of a similar state of things. 
 We know what became of the French Monarchy 
 in consequence, but the position with which 
 Calonne had to deal was as nothing compared 
 to that of Europe after the war. Yet the two 
 cases present striking analogies. The expenditure 
 of the French Monarchy was then £26,000,000 
 a year, and the income ;fi8,ooo,ooo. Calonne 
 proposed to meet this by taxing the privileged 
 classes, who had hitherto been exempt from 
 taxation. i\s every one else had been taxed to 
 the utmost, this was clearly the only thing to do, 
 but needless to say the privileged persons flatly 
 refused. The system of the direct taxation pre- 
 valent in Europe does not, it is true, free the rich 
 from some share in taxation ; but it throws by 
 far the greatest burden on the poor, while for the 
 money they pay in extra prices the landowners 
 at least receive far more in increased rents. 
 It has been calculated that agrarian Protection 
 has raised the rents of the German Junkers 
 by ;f40,ooo,ooo a year. And they, just like the 
 French noblesse object to being taxed. " The 
 
74 BRITAIN AFTER THE PEACE 
 
 Junkers/' says the French Yellow Book, '' repre- 
 sented in the Reichstag by the Conservative 
 Party, wish at any price to avoid the succession 
 duties which are inevitable if peace be prolonged. 
 At the last sitting of the session (1913) which 
 has just come to an end, the principle of these 
 duties was voted. This is a serious blow to 
 the interests and privileges of the nobility.'' 
 Probably, then, like the French noblesse, the 
 Junkers will refuse to pay, especially as the 
 demands made upon them will be altogether out 
 of proportion to anything asked from them before 
 the war. And then ? " Great is Bankruptcy ; 
 the great bottomless gulf ; " and the shade of 
 Carlyle may be surprised to find that the policy 
 of the admired HohenzoUerns was only another 
 of the *' Falsehoods " to be engulfed in it. 
 
 This digression may have served the purpose 
 of showing that we cannot expect to carry out 
 our programme of reconstruction without dis- 
 turbing influences from the Continent. A posi- 
 tion similar to that which brought about the 
 French Revolution must certainly confront the 
 civilization of Europe at the end of the war. 
 WTiat the Russian autocracy was saved from 
 after 1905 by streams of French and British gold, 
 is, as far as I can see, inevitable everywhere in 
 
THE PROBLEM OF FINANCE 75 
 
 the immediate future. Only by a miracle can 
 the Russian Revolution be isolated, and only 
 by using the means at our disposal to meet the 
 claims of Labour and the army with justice can 
 the reverberations of continental revolution be 
 prevented from bringing the British Empire to 
 ruin also. 
 
 The chief point for the present is, however, 
 that we have in the British Budget, built up by 
 a succession of able and honest financiers, the 
 soundest and most advanced fiscal instrument 
 in the world. This is not saying much, for it 
 would be hard to exaggerate the impolicy and 
 moral cowardice of the world's finance in general. 
 If it is possible to shirk a financial problem by 
 any makeshift, however improvident, or, failing 
 that, to save the purses of the rich at the expense 
 of the poor, the average finance minister is certain 
 to try one expedient or the other. The financial 
 integrity of Peel and Gladstone, of Harcourt 
 and Asquith, have at least placed us in this 
 respect in a more honourable position than most 
 other nations, and their work is likely to be our 
 salvation now. Our financial system enabled 
 us during peace to maintain regular surpluses 
 for the repayment of debt ; during war, ex- 
 tensions of the same system have been readily 
 
76 BRITAIN AFTER THE PEACE 
 
 made and accepted, which, apart from temporary 
 war profits taxes, have more than doubled the 
 income of the State. Thus, with comparatively 
 slight modifications, there is no reason why it 
 should not be equal to dealing with the great 
 problems of reconstruction after the war. 
 
 In order to see what modifications are desir- 
 able, it would be well to consider what reactions 
 the war itself is likely to have on the general 
 economic position. In the first place, I think 
 it is clear that while mismanagement of the 
 situation may inflict great hardships on those 
 engaged in the essential basic industries of the 
 country, and that even with the greatest wisdom 
 much of this hardship may prove unavoidable, it 
 is hardly possible, in the long run, for any great 
 part of the burden of the war to fall upon those 
 who work in them. Whatever else happens, 
 people must have food, and there must always be 
 a living of some sort for those who till the soil. 
 Whether the demand for them be greater or less 
 than before the war, coal and iron will certainly 
 be wanted, which means that miners and iron- 
 workers will be indispensable and must be paid. 
 Quite possibly there will be many changes in the 
 character of what I may call the manufacturing 
 trades, but whatever be the outcome of the next 
 
THE PROBLEM OF FINANCE 77 
 
 few years the extractive industries will be neces- 
 sary and will abide. In fact, taking the world as 
 a whole, there should certainly be a great demand 
 for capital and labour in agriculture, and in the 
 production of primary necessaries, at the expense 
 of the luxury trades. Even before the war, the 
 price of food was rising rapidly, and increased 
 prices were stimulating the development of such 
 countries as Canada and the Argentine, and of 
 all industries that supply such markets with 
 railway plant and implements of agriculture. 
 The flow of capital to these lands has been 
 checked during the war, and in the case of our 
 own Colonies the young men who, in the ordinary 
 course of things, would have been growing food- 
 stuffs, have been fighting in Europe. Many 
 thousands of acres on the Continent have been 
 devastated at the same time, so that the natural 
 increase of production has been turned into a 
 considerable decrease. A famine after the war 
 is, unhappily, not unlikely, and in any case, 
 when the half-starved populations of Germany 
 and Austria are freed from the blockade, we 
 shall have a tremendous competition for what 
 foodstuffs are available, and, possibly, even 
 higher prices than during the war itself. The 
 effect of this acting on a money market drained 
 
78 BRITAIN AFTER THE PEACE 
 
 of surplus capital must be to raise the rate of 
 interest fanners and others can afford to pay 
 for capital in corn-producing countries, and to 
 render it correspondingly difficult to obtain 
 money for other purposes. Indeed, there can 
 hardly fail to be a considerable change in the 
 disposition of the world's industry from the pro- 
 duction of things that can be done without to 
 that of necessaries. 
 
 A well-known peer is reported to have said 
 that when other people were making such heavy 
 profits, it was only fair that the landowners 
 should have their share. Such a remark is naive 
 enough, and reveals a strange misunderstanding 
 of what is actually happening. It is true that 
 sections of the people are making money out of 
 the war for the time being, but nothing is more 
 certain than that, regarding industry as a whole, 
 the war means nothing but gigantic loss. It is 
 not a question of the " right " of any section 
 of the community, landowners or others, to 
 share in the profits of this common calamity, 
 but of its duty to bear its share in the common 
 burden. The certainty of dear food for some 
 years to come means, I fear, that the only class, 
 the proletariat, who ought to have been an ex- 
 ception to this rule, will bear their full share, 
 
THE PROBLEM OF FINANCE 79 
 
 but the unavoidable dearness of food should at 
 least be their only contribution to the common 
 loss. So far as legislation can effect it, every 
 penny of the war debt, interest, and ultimately 
 the principal, should be laid upon the shoulders 
 of those who can afford to bear it without degra- 
 dation of life. That these can afford to pay the 
 whole is clear. At the beginning of this century, 
 the condition of the upper and middle classes 
 in this country was certainly comfortable enough, 
 but since that time there has been a wonderful 
 increase in their wealth and luxury. In the 
 financial year 1900-1 £833,335,513 was brought 
 under the survey of the Inland Revenue Depart- 
 ment for the purposes of income tax ; in 1914-15, 
 this amount had grown to £1,238,313,397 — four 
 hundred millions of increase in fifteen years ! 
 If with some improved method of graduation, 
 so that the charge did not press heavily on small 
 and moderate incomes, the whole of that money 
 were taken for interest and redemption of debt, 
 no real hardship would be done to any one. That 
 should be the aim of our statesmanship. In 
 fact, in a modified form, the same question is 
 asked of our rich people as was put to the French 
 noblesse at the Revolution, and will certainly 
 have to be answered by the Prussian Junkers 
 
80 BRITAIN AFTER THE PEACE 
 
 after this war. In one way or another, whether 
 they Hke it or not, they will have to pay the 
 bill, and, indeed, so far as this country is concerned, 
 the method in which the wealthy class as a 
 whole will have to pay it is practically arranged, 
 as every one liable to income or super tax knows 
 very well. They may be thankful that they 
 seem likely to be able to do this without 
 any greater lowering of the rate of living 
 than is implied 4n a return to the standards 
 of 1900. 
 
 And this, if we adopt the plan of demobilization 
 here proposed, and thus avoid a ruinous glut in 
 the labour market, is substantially what will 
 happen. The increases made in the spending 
 power of the rich during the century will be 
 absorbed in paying interest on the debt and in 
 other charges arising out of the war and the 
 reconstruction rendered necessary by it. But, 
 roughly speaking, this money seems likely to 
 suffice. Assuming this is what happens, there 
 will obviously be a great reduction in the ex- 
 penditure of the rich, a reduction that must 
 react mainly on the luxury trades. As in most 
 other countries the same thing will happen more 
 or less, there seems certain to be a very large 
 faUing off in the demand for all those things 
 
THE PROBLEM OF FINANCE 81 
 
 on which the rich have hitherto spent their 
 surplus money. 
 
 But while I believe it inevitable that either 
 by the constitutional method of properly ad- 
 justed taxation, or by the revolutionary one of 
 confiscation as in eighteenth-century France 
 and in the Russia of to-day, the war bills will 
 ultimately have to be paid out of the rents and 
 dividends of the propertied class as a whole, 
 it is not desirable that the burden should be 
 divided unfairly between the subdivisions of 
 this class. That any section should make an 
 actual profit out of the war would be even worse. 
 If the war increases in indirect taxation were 
 repealed and the minimum on which income tax 
 is levied were restored to its pre-war level, and 
 the amount of money thus lost to the Treasury 
 were recovered by yet higher rates of tax and 
 super-tax on large incomes, perhaps substantial 
 justice might be done as between rich and poor. 
 But between various sections of the rich, it 
 would be very different. True, they would all 
 be taxed in proportion to their incomes, but 
 while with most these will probably be less, rather 
 than greater, after the war, there are many who 
 have made huge war profits, and some who will 
 probably find their profits so increased that even 
 
 6 
 
82 BRITAIN AFTER THE PEACE 
 
 after paying their taxes they are richer than ever. 
 A large proportion of the general loss will, in 
 consequence, fall on others, who are not more 
 responsible than they for the war which has 
 caused it. 
 
 This brings us to the question of *' war profits," 
 about which so much has been said. It is de- 
 plorable that any one has been able to make 
 money out of the war, but I am convinced that 
 " war profits,*' as ordinarily considered, are a 
 comparatively insignificant, as they are largely 
 a temporary, thing. Many of them, besides 
 having been cut down to some extent by the 
 tax-gatherer, will, in the natural course of events, 
 give way to peace losses. This is particularly 
 the case with munition and armament factories, 
 which even without any international agreement 
 for reduction of armaments will certainly be 
 subjected to a terrible depression at the end of 
 the war. As I have already pointed out, there 
 will be far too many weapons already manu- 
 factured in the country to supply any possible 
 demand in peace, while the immense expansion 
 of the plant for making such things during the 
 war will still be in existence. No doubt many of 
 the firms will be able to keep going, but only 
 by devoting part of the profits made during the 
 
THE PROBLEM OF FINANCE 83 
 
 war to modifying their plant and machinery so 
 as to make things required in peace. Ship- 
 yards, especially, will probably be busy enough 
 for some time making up for the destruction 
 of merchant shipping during the war. In many 
 places, however, the exceptional prosperity of the 
 war-time will give place to a corresponding 
 depression. By further extensions of the super- 
 tax and the death duties we can rectify the 
 worst cases of this profiteering, and, at any rate, 
 it is much less vital than another with which 
 we must deal. 
 
 Broadly speaking, large incomes are derived 
 from three sources — business profits, interest 
 on investments, and rent of land. Any large 
 economic changes, such as those resulting from 
 the war, may affect the three classes whose 
 incomes are derived from these sources in very 
 different ways. It is quite possible, while the 
 income-tax payers as a whole are pretty sure to 
 have their receipts reduced by the amount of 
 war taxation imposed on them, that one or other 
 of the classes might find its position relatively 
 so improved that the war might bring no loss, 
 but rather profit to it, at the expense of the 
 others. This, unless some modification is made 
 in our method of taxation, is very likely to 
 
84 BRITAIN AFTER THE PEACE 
 
 happen. Beginning with the investing class, let 
 us try to see how the changes brought about by 
 the war are likely to affect each of them in turn. 
 At first sight it might seem that the investing 
 class will be enriched by the war. The rate of 
 interest has gone up, the old 2j per cents, must 
 virtually have disappeared, and an enormous 
 new debt has been created bearing 5 per cent, 
 interest. Certainly, people having money to 
 lend will command a high price for it for many 
 years to come. I doubt very much, however, 
 whether that large number of people whose 
 money is already invested will find themselves 
 any better off at the close of the war. A new 
 rentier class has been created, who have sunk 
 their money in war loans, and these will receive 
 a very high rate of interest. Such a class existed 
 before, however, and it consisted not only of 
 holders of Government stock, but of investors 
 in municipal debts ; while all whose money was 
 tied up in any form of interest bearing security 
 in such a way that they could not recall it at 
 will, but could only realize by selling, were in 
 the same position. All these people have fixed 
 money incomes ; if prices rise, they have to put 
 up with it as best they can ; if they fall, they 
 may become very much better off than before. 
 
THE PROBLEM OF FINANCE 85 
 
 Now, until prices fall far below their present level 
 the old fund-holders and other recipients of 
 fixed incomes will certainly be very much worse 
 off than they used to be. They still receive the 
 same money every half-year, but they can get 
 much less in exchange for it. I am afraid the 
 war must have borne very hardly on many of 
 the poorer members of this class who were not 
 strong enough to pick up any of the miscellaneous 
 kinds of war- work jobs to eke out their money. 
 To them are now added the new creditors of 
 the State, who receive a higher interest, but 
 whose claim is of the same kind, viz., to a fixed 
 amount of money annually, irrespective of what 
 can be obtained in exchange for it. 
 
 One effect of the war has been to increase 
 enormously the amount of money that has to 
 be paid out annually to the receivers of interest. 
 The change is not confined to this country, but 
 affects more or less all the belhgerent countries. 
 All of them will be burdened for generations 
 with interest payments altogether disproportioned 
 to the money income of society as it has been. 
 Taxes to meet it will come as a burden on the 
 production of the whole world. The effect 
 seems certain to be a great augmentation in the 
 cost of production, and with this, probably, a 
 
86 BRITAIN AFTER THE PEACE 
 
 permanent continuance of high money prices. 
 In some such way, unless the nations get rid of 
 the burden by repudiating their debts, economic 
 reactions may reUeve society of the crushing 
 burden with which it seems threatened. Some 
 day, and that not so far hence, the productive 
 capacity of the world will fully recover. The 
 resources of nature are still the same, the skill 
 and knowledge and energy of the race will not 
 sensibly have suffered, and this skill and energy 
 will again be applied, and will produce as great 
 a volume of wealth as ever. Indeed the actual 
 capital of the world is but little diminished ; 
 houses, factories, mines, railways, and other 
 visible forms of wealth are, excepting a small 
 fraction, just as they were before the war. 
 True, a far higher money mortgage hangs over 
 all this wealth, while much of it may have 
 changed or be destined to change hands, but 
 that does not affect the matter. Wealth 
 will again be produced as freely and regularly 
 as ever. Commodities will be exchanged and 
 the exchanges will be regulated roughly by 
 their respective cost at the margin of produc- 
 tion, while I doubt not their respective exchange 
 values will still be expressed and the changes 
 effected by means of n^oney. 
 
THE PROBLEM OF FINANCE 87 
 
 But the money values may, there is reason to 
 beUeve, be very different. Not only have the 
 borrowings of Governments been on a gigantic 
 scale, but there has been throughout the world 
 a most unprecedented inflation of the currency. 
 I have no idea of the sum-total of paper money 
 issued since the war began by the belligerent 
 Governments, but certainly it is enough to have 
 a great and abiding effect on prices. In most 
 countries it is irredeemable, and though every 
 Government must desire after the war to retrieve 
 its credit by resuming gold payments, it will 
 certainly be a very long time before many of 
 them are able to do this. And the probable, 
 nay the certain, effect of the whole process will 
 be to extend the use of paper money to the 
 utmost extent to which it is found possible to 
 keep the paper at par. After all, the issue of 
 paper money, in so far as it can be done without 
 loss of credit, is the cheapest way of borrowing 
 money, as the paper bears no interest. 
 
 It must, then, be a considerable time before 
 gold payments are resumed throughout Europe, 
 and a much longer one before the industries 
 of the greater part of the world are freed from an 
 enormous burden of interest on the war debts. 
 This certainly seenas to involve a continuance 
 
88 BRITAIN AFTER THE PEACE 
 
 of very high prices, which, in turn, means that 
 people with fixed incomes, the rentier class, new 
 and old, will be able to purchase a very much 
 smaller share of the wealth production of the 
 world than they could have done with an equiva- 
 lent sum of money in the past. I doubt very 
 much whether a man drawing £i,ooo a year in 
 the next generation will be very much better 
 off, after he has paid his tax on an unearned 
 income, than one who had ^^500 a year before 
 the war. Probably the values of things, as 
 expressed in money, will never fall back to the 
 old level. If not, there will be a general tendency 
 for earned incomes, stated in terms of money, 
 to rise, however much the buying power of those 
 who earn them may be reduced. The propor- 
 tions of the national dividend received by the 
 holders of stock and by those in receipt of salaries 
 and wages will thus be very different from what 
 we might be led to expect from the contempla- 
 tion of the enormous money debt for which the 
 world has now become responsible. 
 
 If such a change in world prices comes about, 
 those States that have not been involved in the 
 war will find the burden of their old debts 
 reduced to insignificance, while the belligerents 
 will not in reahty be subjected to a strain so 
 
THE PROBLEM OF FINANCE 89 
 
 severe as is suggested by their enormous borrow- 
 ings. Whether it be so or not, however, prices 
 will be very high for a long time to come, and 
 those who live on invested savings at a fixed rate 
 of interest will certainly bear their share of the 
 losses of war. 
 
 And so, too, will those, or at least most of those, 
 who take an active part in industry and live on 
 the profits of trade. The possible profits of their 
 business will be limited by the extent of the 
 trade they can do. Demand will certainly be 
 greatly modified in character by the war, and 
 they will be faced with the necessity of adjusting 
 their production to the new state of things. For 
 this they will require capital, which will be 
 scarce and dear. The rate of interest will be 
 high, while circumstances will probably compel 
 them to pay high money wages, however much 
 the buying power of those wages may be reduced. 
 They will work in critical times, for markets 
 disturbed by revolutionary movements abroad, 
 and perhaps at home, and, apart from political 
 changes, uncertain and fluctuating enough. 
 Individuals may make profits high enough to 
 draw down upon them the attentions of hungry 
 finance ministers, sorely puzzled to make both 
 e|ids meet and covetous of super-taxes and succe^r 
 
90 BRITAIN AFTER THE PEACE 
 
 sion duties, but the class as a whole will certainly 
 lose greatly by the war. 
 
 With the third section of the wealthy class, 
 those that live on the rent of land, however, 
 matters will be on a different footing. It is here, 
 more than anywhere else, that we are threatened 
 with the burden of a great parasitic class enriched 
 by the calamity of the nation. The increase, 
 which must certainly last for a long time, and 
 may be permanent in the prices of foodstuffs, 
 means not merely larger money incomes, but 
 increased real incomes for them. So soon as 
 current leases fall in, the rent of agricultural 
 land, with food at present prices, must inevit- 
 ably rise to an extent far greater than any possible 
 rise in the cost of living to the landowner him- 
 self. Food is now more than double its pre-war 
 value, very much more than double its value 
 of twenty years ago. And with peace and the 
 reopening of the markets of the Central Empires, 
 the competition among the peoples for the limited 
 food supply will very likely drive prices even 
 higher for some time. Unless some drastic steps 
 are taken to prevent it, the lion's share of these 
 increases will soon find its way into the pockets 
 of the landowners in increased rents. They 
 will be the greatest, the permanent ''profiteers/' 
 
THE PROBLEM OF FINANCE 91 
 
 of the war, growing rich out of the pubUc 
 calamit3^ 
 
 For the claim of the landowner on the product 
 of national industry is quite different in character 
 from that of the rentier. His income is not 
 fixed, but is subject to variation whenever a 
 lease falls in ; with a general rise of prices a 
 rise in agricultural and mineral rents is certain 
 to occur. War has the same effect on the rent 
 of land as Protection, for both alike raise the 
 price of the produce of the land and, conse- 
 quently, its rent. Even the heavy increases 
 necessary in the income tax as the result of the 
 war will leave the landowners enriched, unless 
 some means is devised for diverting this unearned 
 increment into the public funds. 
 
 Before the war, I advocated a moderate 
 measure of taxation or rating of land values, 
 for that seemed, then, adequate to the occasion. 
 Once, through such a measure as the " Tax and 
 Buy '' Bill, we had rendered it impossible for 
 owners to overcharge the public authorities for 
 any land they required, it seemed to me the 
 socialization of the land would proceed in a 
 smooth and orderly manner. As the authorities, 
 parochial, county, or municipal, realized the im- 
 portance of acquiring land, they would be able 
 
92 BRITAIN AFTER THE PEACE 
 
 to do so without, as heretofore, the owners 
 being able to charge them many times its value 
 for it. Only, therefore, as the public spirit and 
 capacity for communal work developed among 
 the people, in many cases only as the need became 
 undeniable, would land become public property ; 
 but as soon as the necessary conditions arose, 
 the public authorities would have in the '' Tax 
 and Buy *' Bill an ample security against ex- 
 tortion. 
 
 The war has radically changed the situation. 
 Alike when their land is required for public 
 purposes and when it is not, it has received an 
 enormous unearned increment of value through 
 the rise in prices. To this increment the land- 
 owner has no right whatever. As already said, 
 it is not a question of a *' right '* to profit, but 
 of an obligation to bear a loss. The income tax 
 by no means equalizes matters as between him 
 and the other wealthy classes. He can recoup 
 himself probably many times over, while they 
 are helpless. There is abundant justification for 
 a far heavier land values duty than would have 
 been thought of before the war, and with the 
 justification comes also the necessity. 
 
 For it is not by slow stages, by a gradual 
 development of social needs and social organi- 
 
THE PROBLEM OF FINANCE 93 
 
 zation, that the land question must be dealt with 
 after the war. The taxpa3/ers of the nation, if 
 they are to treat w^ith bare justice the milhons 
 of soldiers to whom they owe so much, will find 
 themselves burdened with the support of vast 
 numbers of men for whom it will be a national 
 necessity to find employment. I can see little 
 prospect of doing this without a comprehen- 
 sive scheme for reconstructing British rural life, 
 for which large quantities of land must be 
 acquired at reasonable prices. 
 
 A position has arisen which justifies the pro- 
 posals of Mr. C. A. Paterson, the secretary of the 
 Scottish Land League, however extreme they 
 might have appeared before the war. Every 
 landowner should be called upon to put his own 
 valuation on the land he owns, apart, of course, 
 from all improvements. The valuation should 
 allow for all mineral and sporting rights, as well 
 as farming or other rental, and also for any 
 anticipated increases in value, for which, if 
 compelled to sell, the owner would expect com- 
 pensation ; but the estimate should be left 
 entirely to him. On that valuation, all direct 
 taxes due from the landlord should be based — 
 income tax, super-tax, death duties, and local 
 rates. A register should be kept of the amounts 
 
94 BRITAIN AFTER THE PEACE 
 
 paid by him from year to year and the valuations 
 on which they were based, and this register should 
 constitute the landowner's title to his land. 
 Any claimant who disputed his title would at 
 least have to refund to him any money he had 
 paid in taxes or rates, so that in a few years we 
 should have a complete register of titles of land 
 as well as of its value. With this should be 
 passed a measure enabling the State or any local 
 authority to buy land at the valuation on which 
 the owner has elected to be taxed. Land to 
 which no value was attached by the owners 
 would ipso facto become public property. If 
 this were done, so great may be the rise in rents 
 after the war that I doubt whether even then 
 the landlords would bear their fair share of the 
 cost of it, but at least the nation would not be 
 at their mercy. What is even more to our pur- 
 pose, the way would be open for a reconstruction 
 of our national life, which may enable us to 
 carry out the revolutionary changes imposed on 
 us by the war without violence and the ruin of 
 the Empire. 
 
CHAPTER IV 
 
 THE PROBLEM OF INDUSTRY 
 
 The first necessity of the Industrial Situation is increased 
 efficiency of production. In order to meet the difficulties 
 created by the war and to lay the foundations of a more 
 stable society, we must endeavour to increase both the 
 quantity and the quality of output. — Memorandum on the 
 Industrial Situation after the War, published by the Carton 
 Foundation, par. 153a. 
 
 The above quotation from an able study of the 
 problem of reconstruction, issued by the Garton 
 Foundation, brings out very strongly one aspect 
 of our subject, so true that it is apt to be for- 
 gotten. Whether the burden flung upon society 
 by the cost of the war be so overwhelming as to 
 crush our civilization and bring upon the British 
 Empire the fate of that of Spain, depends very 
 largely upon whether or not our power of wealth 
 production can be so extended as to meet the 
 
 obligations of the State, while permitting the 
 
 95 
 
96 BRITAIN AFTER THE PEACE 
 
 maintenance and gradual improvement of the 
 standard of life among the workers. The burden, 
 it is true, may be considerably lightened if the 
 money prices both of commodities, labour and 
 services should automatically rise all round ; 
 so that while the charges on the nation for 
 interest and redemption of debt remain the same 
 in terms of money, they in practice involve 
 a much more limited call upon the real wages of 
 the community, the actual produce of labour 
 and industry. That such an economic reaction, 
 tending to relieve society of a monstrous burden, 
 is probable, I have already suggested. With 
 the discovery of America, the influx of gold and 
 silver from its mines, and the beginning of world- 
 trade, a similar effect was produced on prices, 
 completely breaking up the general level that 
 had prevailed more or less for centuries. Rapid 
 changes of this kind are certainly very mis- 
 chievous, involving as they do widespread dis- 
 content, hardship, and practical injustice during 
 the period of transition from one set of price 
 levels to another. But it is real wages, and not 
 money wages, that matter in the long run ; when 
 once a stable standard of distribution is estab- 
 lished, it is a secondary consideration whether 
 the prices of commodities and labour are doubled 
 
THE PROBLEM OF INDUSTRY 97 
 
 or halved, provided the change in price levels 
 is uniform all along the Hne. Whatever happens, 
 however, the toll the rentier class will be em- 
 powered to take from society, for many years 
 to come, must be very heavy, and, unless the 
 real wealth produced within the nation is maiur 
 tained and increased, will be absolutely crush- 
 ing. Fortunately, the war has demonstrated 
 that the wealth-producing power of the nation 
 is far beyond anything dreamt of before the war. 
 This is the aspect of affairs that has struck Mr. 
 Norman Angell more than anything else, and 
 has raised hopes in many quarters that with 
 more organization the standard of living may 
 be much higher after the war. 
 
 Indeed, what has been done is marvellous. 
 We have withdrawn altogether from productive 
 industry millions of our strongest workers, we 
 have turned a vast number more — the Garton 
 Foundation last year estimated a million and a 
 half — on to making munitions and other special 
 war- work, and yet we have succeeded in feeding 
 and clothing our people not appreciably worse 
 than in time of peace, while manufacturing a 
 sufficient surplus of goods to maintain a very 
 considerable part of our export trade. Even so, 
 there has b jen a large waste of labour power. 
 
 7 
 
98 BRITAIN AFTER THE PEACE 
 
 The Government departments have notoriously 
 wasted money right and left, as they always do 
 in war-time. That much of the waste, over- 
 lapping and confusion was unavoidable, does not 
 affect the point. If the industry of the nation 
 had been organized in peace-time in the same 
 way it has had to be organized in war, but with 
 time to plan and with a competent criticism of 
 ways and means, even greater results could have 
 been attained. 
 
 In fact, inferences from the proved productive 
 capacity of the nation, with half its labour-power 
 in the trenches or '' forming fours," as to the 
 possible amount of wealth production when the 
 soldiers return, prove too much. It is quite 
 clear that, given adequate supplies of raw material, 
 and by substituting for munition works factories 
 fitted up for peace production, we could turn out 
 hitherto unheard-of quantities of British manu- 
 factures. But there are other factors in the 
 case ; the manufactures of the country can only 
 expand as the supply of raw materials expands, 
 and our manufacturers will, and indeed can 
 only increase their produce in so far as the 
 available markets expand to absorb it. 
 
 Take as an illustration the case of the cotton 
 trade. It is evident that, however great our 
 
THE PROBLEM OF INDUSTRY 99 
 
 power to spin and weave greater quantities of 
 cotton, it is limited by the world's production 
 of raw cotton — by an industrial process carried 
 on entirely outside the United Kingdom. A 
 short supply of cotton is not by any means an 
 imaginary difficulty, the planting of new sources 
 of supply and the development of old ones requir- 
 ing time. If, as the result of better organization 
 and more efficient co-operation between employers 
 and employed in Lancashire, we greatly increased 
 the demand for raw cotton, the advantage might 
 not necessarily go to our own people. The 
 world's production of raw cotton can only be 
 slowly increased, and a rapid inflation of demand 
 for it would certainly have the effect of inflating 
 the price. The object of improved methods in 
 the cotton manufacture would be to secure 
 cheaper production, so that a large quantity may 
 be produced and sold ; but no amount of economy 
 in manufacture will enable us to sell any cheaper 
 if what is saved in the process of spinning and 
 weaving is lost in the enhanced cost of raw 
 material. 
 
 Again, the expansion of the cotton trade is 
 dependent upon the elasticity of the markets 
 for cotton goods. Markets are always more or 
 less elastic, and the quantity of any commodity 
 
100 BRITAIN AFTER THE PEACE 
 
 that can be sold at a given price is always less 
 than the amount that would find a market at 
 lower rates ; but it is perfectly possible to glut 
 any market. The world can, perhaps, absorb 
 commodities to almost any extent, provided the 
 increased production takes place all round and is 
 not limited to one or two commodities, but it 
 does not follow that the demand for cotton can 
 be indefinitely expanded by reduction in price, 
 however great. If the Indian ryot found his 
 cotton goods cheaper, this would give him the 
 chance of buying more or better clothing, but 
 certainly part of the saving would be spent on 
 something else than cotton goods. To some 
 extent, at least, a new demand would be set up 
 in India for other things than cotton, possibly 
 not for goods manufactured within the United 
 Kingdom at all. 
 
 If the price of cotton shirts fall by one-half, 
 probably some people may considerably increase 
 the number they buy. There will be less re- 
 luctance to throw a worn shirt away, and a 
 new one will be more willingly substituted. 
 But obviously such a fall in prices would not 
 double the sale among those who at present 
 buy such shirts. A more hopeful way to a large 
 increase in any market is that a reduction in 
 
THE PROBLEM OF INDUSTfCY : lOi 
 
 price brings an article within the reach of buyers 
 who could not get it at all before. A whole series 
 of cheap articles, from Ingersoll watches to Ford 
 motor-cars, which arouse the fears of the Protec- 
 tionist, make their way into the market mainly by 
 attracting buyers who in no case could have 
 afforded the dearer articles for which these act as 
 substitutes. Expansion of the cotton trade in this 
 way would, however, be very limited. Clothing is 
 a necessity, and, leaving savages out of account, 
 there are no new buyers to attract by low prices ; 
 while cotton is already the cheapest available cloth- 
 ing material. The sale of woollen or linen goods ^ 
 might be promoted, at the expense of cotton, 
 by reductions in price, but no reduction in the 
 price of cotton can enable it to encroach on 
 some yet cheaper material. 
 
 * One of the clearest signs of the general growth of pros- 
 perity in this country during the last generation was the 
 large extent to which woollen clothing had been substituted 
 for cotton. The fact that cottons are with us mainly exports, 
 while woollens are chiefly consumed at home, tends to show 
 that British people are generally clothed in the better and 
 dearer material, while the demand for the cheaper has to 
 be found in less prosperous countries. Cheap substitutes 
 make their market among those who cannot afford the price 
 of better things ; but as prosperity increases and becomes 
 more diffused, a demand for better qualities may arise and 
 drive the cheaper goods out of the market. 
 
iQ2 BBITAIN AFTER THE PEACE 
 
 What is true of cotton is true, more or less, 
 of most of our manufactures. Greatly increased 
 efficiency of production increases the demand 
 for raw material, which cannot always be met 
 at all except by a gradual development of culti- 
 vation or mining which may take years. Even 
 when the demand can be promptly met, the 
 new supphes of raw material must necessarily 
 come from less advantageous sources, from more 
 distant lands, or from poorer soils or veins of 
 ore. In either case, a rise in prices is inevitable, 
 and what is saved by more efficient methods of 
 manufacture tends to be lost by the dearness of 
 its materials. This is, of course, no argument 
 against efficiency or in favour of neglecting the 
 lessons taught by the war. In the coming 
 struggle for markets these lessons will certainly 
 be applied by all nations, and we cannot afford 
 to lag behind. The argument does, however, 
 tend to check undue optimism as to the amount 
 of surplus labour that our industries will be able 
 to absorb after the war. The purchasing power 
 of the nations will be less, and food will be dearer, 
 calling for a larger share of each family income, 
 and leaving less margin to be spent on manufac- 
 tures. On the other hand, with a higher organi- 
 zation of industry and a larger proportion of the 
 
THE PROBLEM OF INDUSTRY 103 
 
 population actually engaged in it, it may be pos- 
 sible, where enough raw material can be obtained, 
 to increase out of all proportion the pre-war 
 scale of production. Unless, however, the world- 
 market can absorb such an increased supply, 
 there is little prospect, when the large demands 
 of the war are no longer competing for labour 
 and the armies have returned, of finding work for 
 the soldiers, the regular workers who have joined 
 the colours, and the thousands of extra workers 
 who will still desire or may need to continue 
 earning wages. Unless we can find some new 
 outlet for the energies of the nation, a glut of 
 commodities and labour and a depression of trade 
 far more terrible than any of which we have had 
 experience seem to me inevitable. Let manu- 
 facturing industry take up as much labour as 
 it can by all means, let it, with due safeguards, 
 employ it in the most efficient way possible, 
 but do not let us imagine that this will do much 
 to solve the tremendous problem before the 
 nation. It is most undesirable that any of the 
 labour power, whether that of civihans, tempo- 
 rary soldiers, or of the women, should be lost. 
 The continuation and development of the old 
 industries of the country may find profitable 
 employment for much of this, but not for all. 
 
104 BRITAIN AFTER THE PEACE 
 
 After every mine and factory is fully supplied, 
 many, perhaps millions, will still be idle, and 
 for them other openings must be procured, and 
 the perfectly reasonable demand of the Garton 
 Foundation for increased production be fulfilled. 
 
 Before dealing with the question of new open- 
 ings for labour it would be well to glance at the 
 question of safeguards within the old industry 
 for the preservation and progressive improve- 
 ment of the standard of life among the workers. 
 The Treasury Agreement for the restoration of 
 Trade Union rules after the war applies to a 
 number of trades, including the railway men, 
 transport workers, textile and boot and shoe 
 operatives, while outside the Treasury Agree- 
 ment itself, various compacts have been come to 
 between employers and employed, arranging for 
 a reversion to the old condition of things. As 
 the Joint Committee on Labour Problems after 
 the War consider it the best of these, I may cite 
 that come to between the Wholesale Clothiers' 
 Federation and the Amalgamated Union of 
 Clothiers' Operatives. The Committee quote 
 the following clauses : — 
 
 The employers will, to the best of their power, reinstate 
 all men who shall have left to join the colours but who return 
 
THE PROBLEM OF INDUSTRY 105 
 
 to civil life either during the continuance, or within a reason- 
 able time after the conclusion, of the present war. 
 
 As soon as it is practicable after the conclusion of the war 
 the employers will revert to the conditions prevaiUng in 
 their respective factories and workshops before the war, in 
 regard to men's employment. 
 
 Females shall not be introduced to replace men if com- 
 petent men of non-military age are available at the rates 
 prevaiUng for the time being in the factory or workshop. 
 
 Any question under, or in connection with, this agreement 
 (including that of the interpretation of the words " con- 
 clusion of the present war ") which may arise, either during 
 the continuance of the present war or after its conclusion, 
 shall be referred to the Home Office for settlement. 
 
 There is enough here to reveal the clash of 
 interests that must occur at the close of the war. 
 If there is an overcrowded labour market, the 
 proposal to reinstate soldiers can only be carried 
 out by dismissing men or women who have taken 
 their places during the war, and dismissal may 
 very readily be the prelude to destitution. The 
 fear of women's labour is evident, and it is clear 
 that their position may be very unpleasant 
 at the end of the war. It is not in reason to 
 expect that people will passively submit to sink 
 into poverty, especially in a case of this kind. 
 The old trade unionists, the soldiers, and the 
 
106 BRITAIN AFTER THE PEACE 
 
 women are all fully entitled to insist on the oppor- 
 tunity to earn their daily bread ; yet it will 
 certainly be impossible for all of them to do so 
 within the trade. Again, with this and similar 
 engagements the Home Office is likely enough 
 to have its hands full, if it has to decide between 
 employers and employed all questions of inter- 
 pretation arising during and after the war. Men 
 who went to the front when ten shillings would 
 buy as much food as a sovereign will now will 
 not be content to come back to the same wages. 
 Nor will employers with large supplies of surplus 
 labour in sight be willing to pay more or as much 
 as they did in the trade boom before the war. 
 
 As I said in a previous chapter, there is no means 
 of securing the restoration of Trade Union con- 
 ditions after the war, whatever pledges may 
 have been given in advance, if all the soldiers, 
 trade unionists, and women are flung in competi- 
 tion with one another for employment. How- 
 ever much the majority of employers might 
 wish to keep faith with the men, some of them 
 would be sure to succumb to the temptations 
 such a state of things would offer of obtaining 
 cheap labour. 
 
 If such a sudden inflation in the available 
 supply of labour can be prevented, however* 
 
THE PROBLEM OF INDUSTRY 107 
 
 there should be no real difficulty in reinstating 
 Trade Union rules, or where this is undesirable, 
 substituting new arrangements better suited to 
 modern conditions. The narrowness of some 
 Trade Union regulations in the past has been 
 almost justified by the weakness of Labour's 
 position in its bargains with Capital. The work- 
 man was sadly conscious of this weakness and 
 often jealous of any attempt to force the speed 
 of industry or to increase the number of com- 
 petitors for employment in his own particular 
 trade. Hence the restrictive rules as to member- 
 ship of some Unions, the jealousy of women 
 workers, and the objections to piecework. The 
 fear of possible unemployment was at the back 
 of all these regulations, and if we could so moder- 
 ate the supply of labour that there was no reason 
 to fear unemployment, we should have gone a 
 long way to secure the consent of the men to 
 such changes as may be necessary. 
 
 it is essential, in fact, before we can have any 
 satisfactory arrangement between employer and 
 employed, that the workman should be in prac- 
 tice as free to refuse employment if the terms are 
 not satisfactory to him as the employer is to 
 dispense with his services. Given that essential 
 condition, and much elaborate scaffolding can 
 
108 BRITAIN AFTER THE PEACE 
 
 be dispensed with ; without it, no factory legis- 
 lation or Trade Union regulations can do more 
 than mitigate what is virtually a condition of 
 wage slavery. A recognition of this fact is at 
 the bottom of the Labour Party's claim for the 
 " Right to Work," and is the main force behind 
 the Single Tax movement. The method of de- 
 mobilization outlined in the second chapter of 
 this book would be a very fair substitute for 
 the former of these expedients, while later on 
 I hope to show what use can be made of the 
 latter. Meantime, the practical freedom of the 
 worker is essential, if we are to give a fair chance 
 to the various schemes that are being suggested 
 for promoting co-operation between management 
 and labour, with a view to economy and increased 
 production. 
 
 Industrial Unionism is a revolutionary move- 
 ment, aiming at the intensification of the class 
 war and, ultimately, at the complete control and 
 ownership of industry by the workers. The 
 movement for profit-sharing, on the contrary, 
 is essentially conservative, being intended to 
 reconcile employer and employed, by giving the 
 worker a subordinate interest in the profits of the 
 business. They have this in common, however, 
 that they both tend to make each industry self- 
 
THE PROBLEM OF INDUSTRY 109 
 
 governing, though, in the one case, the govern- 
 ment would be purely democratic, while the other 
 hardly entrenches upon the present absolutism 
 of the capitalist. More impartial, but still work- 
 ing on the basis of the autonomy of the industry, 
 is the scheme for National Industrial Parlia- 
 ments, originated by Mr. Malcolm Sparkes. 
 This, leaving the present organization of the 
 Employers' Federation and the Trade Union 
 intact, to deal with such conflicts of interest 
 as may still arise, seeks to add to them a new 
 organization, in which both sides shall be equally 
 represented to look after the interests of each 
 industry as a whole. The Memorandum of 
 the Garton Foundation, without tying itself 
 down to such definite proposals, gives a long 
 and able survey of the whole question, leading 
 up to a similar conclusion, while Mr. Sparkes's 
 scheme has been adopted by the building trade. 
 The interim Report on Joint Standing and 
 Industrial Councils, also, has clearly been greatly 
 influenced by the scheme of Mr. Sparkes and its 
 acceptance by the building trade. The Report 
 proposes for the more highly organized trades 
 an organization of National and District Councils 
 and Works Committees, on which both employers 
 and employed shall be represented. The follow- 
 
110 BRITAIN AFTER THE PEACE 
 
 ing are mentioned as suitable matters for their 
 consideration : — 
 
 1. The better utilization of the practical knowledge and 
 experience of the workpeople. 
 
 2. Means for securing to the workpeople a greater share 
 in and responsibility for the determination and observance 
 of the conditions under which their work is carried on. 
 
 3. The settlement of the general principles governing the 
 conditions of employment, including the methods of fixing, 
 paying, and readjusting wages, having regard to the need 
 for securing to the workpeople a share in the increased pros- 
 perity of the industry. 
 
 4. The establishment of regular methods of negotiation 
 for issues arising between employers and workpeople, with 
 a view both to the prevention of differences and to their 
 better adjustment when they appear. 
 
 5. Means of ensuring to the workpeople the greatest 
 possible security of earnings and employment, without undue 
 restriction upon change of occupation or employer. 
 
 6. Methods of fixing and adjusting earnings, piecework 
 prices, etc., and of deaUng with the many difficulties which 
 arise with regard to the method and amount of payment 
 apart from the fixing of general standard rates, which are 
 already covered by paragraph 3. 
 
 7. Technical education and training. 
 
 8. Industrial research and the full utilization of its results. 
 
 9. The provision of facilities for the full consideration and 
 utilization of inventions and improvement designed by 
 workpeople, and for the adequate safeguarding of the rights 
 of the designers of such improvements. 
 
 10. Improvements of processes, machinery and organiza- 
 tion, and appropriate questions relating to management and 
 
THE PROBLEM OF INDUSTRY 111 
 
 the examination of industrial experiments, with special 
 reference to co-operation in carrying new ideas into effect 
 and full consideration of the workpeople's point of view in 
 relation to them. 
 
 II. Proposed legislation affecting the industry. 
 
 The Whitley Committee responsible for the 
 Report, however, recognize that such a plan 
 cannot be put into operation in all trades. " It 
 may be desirable to state,'* the}^ say, '* our con- 
 sidered opinion that an essential condition of 
 securing permanent improvement in the relations 
 between employers and employed is that there 
 should be adequate organization on the part of 
 both employers and workpeople. The proposals 
 outlined for joint co-operation throughout the 
 several industries depend for their ultimate 
 success upon there being such organization on 
 both sides ; and such organization is necessary 
 also to provide means whereby the arrange- 
 ments and agreements made for the industry 
 may be effectively carried out.'' A suggested 
 classification of industries is given in the appendix, 
 viz. " {a) industries in which organization on the 
 part of employers and employed is sufficiently 
 developed to render the Councils representa- 
 tive ; {h) industries in which either as regards 
 employers or employed, or both, the degree 
 
112 BRITAIN AFTER THE PEACE 
 
 ■* 
 
 of organization, though considerable, is less 
 marked than in (a) and is insufficient to be 
 regarded as representative ; and (c) industries 
 in which organization is so imperfect, either as 
 regards employers or employed, or both, that 
 no Association can be said adequately to represent 
 those engaged in the trade/' The Committee 
 hope to issue proposals for dealing with the less 
 organized trades, but their scheme so far only 
 applies to a very limited class. 
 
 And how limited it may be after the war no 
 one can say. Industries which at the com- 
 mencement of the war were most thoroughly 
 organized may find their organizations, whether 
 of employers or employed, broken to pieces under 
 the strain of post-war conditions. The normal 
 equation of supply and demand for the produce 
 of an industry and for the labour required to 
 carry it on may be completely upset. Here, as 
 everywhere else, we must avoid the fallacy of 
 assuming that conditions established before this 
 tremendous cataclysm can be depended upon to 
 survive it. In some cases, the trade itself may 
 collapse, leaving nothing to organize ; in others, it 
 may be so damaged as to destroy the employers' 
 organization, of so flooded with labour seeking 
 employment or claiming out-of-work benefit as 
 
THE PROBLEM OF INDUSTRY 113 
 
 to break any Trade Union, however strong. 
 Conversely, some badly organized trades may 
 find that the feverish activity and high money 
 wages prevalent during the war have enabled 
 them to build up a very much stronger organi- 
 zation than before, and if there is a good demand 
 for its particular produce after, a trade classed 
 by the Whitley Committee as (b) or (c) may 
 rapidly become one of the strongest of all. 
 
 Whether on the whole there is advance or 
 decline in the general level of trade organization 
 after the war will depend more than anything 
 else on whether or not the flow of labour to each 
 trade can be so regulated as to be kept within 
 manageable dimensions. The Whitley scheme is 
 in itself a very good one, and the Committee are 
 quite right in recognizing that the essential 
 condition of success is the effective organization 
 of both employers and employed. To give it a 
 fair chance, however, the Trade Unions would 
 require to be very much stronger than they have 
 ever been in the past, so that, generally speaking, 
 I fear that the admission of the Committee that 
 the scheme presupposes *' adequate organization 
 on the part of both employers and workpeople *' 
 means that in the great majority of trades a period 
 of strenuous preliminary work must be gone 
 
 8 
 
114 BRITAIN AFTER THE PEACE 
 
 through before the plan can be even attempted. 
 This and more revolutionary schemes for indus- 
 trial self-government bring us back to politics. 
 Not that Government can organize the nation. 
 The sphere of voluntary association will not 
 diminish, it will become greater as society be- 
 comes more perfectly organized. Particularly 
 will this be the case in the hurried years immedi- 
 ately following the great war, years in which 
 many changes must be made and made quickly. 
 If the old industries of the country can organize 
 themselves so as to avoid friction and stoppage, 
 provide for a steady improvement in efficiency, 
 and secure for the workmen a higher standard 
 of life, politicians overburdened with other duties 
 will, no doubt, be glad enough for them to do 
 so. Even after devolution, geographical and 
 industrial, has done its utmost, there will be 
 more than enough left to occupy all the time of 
 Parliament. But without legislation to deal 
 effectively with the vast surplus of labour over 
 and above that which the manufacturing industry 
 can employ, the conditions of success demanded 
 by the Whitley Committee for their scheme 
 cannot be hoped for in any trade whatever. Such 
 attempts to promote co-operation between man- 
 agement — not private capitalism — and labour 
 
THE PROBLEM OF INDUSTRY 115 
 
 are all to the good, on one condition, that the 
 labourer is no longer a proletarian, but a free 
 agent. He must have open to him an alter- 
 native way of making a decent living, so that 
 he is able to consider every agreement proposed 
 as a choice between two comparative goods, 
 and not only between acceptance of the em- 
 ployer's terms or destitution. 
 
 But the latter is inherent in any condition of 
 things where there is a large reserve of unemployed, 
 particularly such a vast reserve as we shall have 
 for some time after the war. If we can find a 
 satisfactory way of dealing with these, the more 
 room we leave for experiment and the fewer 
 prejudices we bring to the study of industrial 
 problems the better. It is finally true that 
 wealth cannot be distributed until it is created, 
 and that the only way to repair the losses of the 
 war is to increase the production of the nation. 
 
 The question of markets must, however, be 
 borne in mind. In time, these may be expanded 
 to an indefinite extent, but their elasticity is 
 limited — they cannot be doubled or trebled at 
 will just because we have doubled or trebled our 
 rate of production. Now, our industry being 
 a manufacturing one, depends largely, I should 
 say mainly, upon the surpluses our customers 
 
116 BRITAIN AFTER THE PEACE 
 
 have to spend after they have suppHed themselves 
 with the first necessary of hfe — food. This was 
 proved in the days of the Corn Laws, and had 
 much to do with the urgency of the manufacturers' 
 demand for their repeal. A bad harvest in those 
 days meant dear bread, and caused the absorp- 
 tion of almost every penny of the workman's 
 earnings in buying this first essential. In such 
 times clothing was worn to rags, and the most 
 widespread poverty and unemployment followed 
 in the textile trades. With a better harvest 
 and a fall in the price of the loaf, money could 
 be spared out of the family budget for other 
 things, and at such times the trade in textiles 
 was comparatively brisk. Free Trade, by steady- 
 ing the price of the loaf, left free a more reliable 
 surplus for expenditure on manufactures, and 
 though we have had terrible depressions since 
 then, nothing quite equal to the state of things 
 prevailing under Protection during a series of 
 bad harvests has occurred under Free Trade. 
 It remains true, however, that the market for 
 manufactures depends mainly on the surplus 
 available in the family incomes after the daily 
 bread has been obtained. Increased rates of 
 pay and greater regularity of emploj^ment, com- 
 bined with the diversion of a large part of our 
 
THE PROBLEM OF INDUSTRY 117 
 
 manufacturing plant to the production of things 
 needed by the war have counteracted the effect 
 of the great rise in food prices for the present ; 
 but if, throughout the world, the present high 
 prices continue after the war, while wages and 
 employment remain the same as before it, nothing 
 can prevent a tremendous slump in the demand 
 for manufactures. Nor can there be a recovery 
 until the old relations are re-established between 
 the cost of food and the average income in the 
 markets supplied by British industry. 
 
 Beyond all comparison, the most important 
 of these is the British market itself. The Census 
 of Production, taken in 1907, gave the total 
 output of British industries for that year at 
 £1,765,366,000. This is the value at the factory. 
 In the same year we exported British manufac- 
 tures of all kinds to the value of ;£426,035,o83, 
 which sum includes, however, all railway and 
 other charges incurred in delivering the goods on 
 board ship. The home market would thus appear 
 to be about three times as great as the foreign 
 and colonial markets put together. It is a 
 market, too, over which the British manufacturer 
 has far more complete command than he has 
 over any other. Much the larger part of our 
 imports consists of food and raw n^aterial, thf 
 
118 BRITAIN AFTER THE PEACE 
 
 net imports of articles classed by the Board of 
 Trade as '' articles wholly or mainly manufac- 
 tured " in that year being valued at 128 million 
 pounds. Even of this the larger part consisted 
 of unfinished goods, virtually the raw material 
 of one or other of our industries.^ It will readily 
 be seen, then, how important it is to the future 
 of British industrialism that the margin between 
 the food bill and the total earnings of the British 
 people should be as large as possible. It is safe 
 to say that a 5 per cent, expansion of that 
 margin would be of far greater benefit to the 
 British manufacturer than the doubling of any 
 foreign or colonial market whatsoever. 
 
 And this market, as it happens, is the only one 
 which, by taking thought, it may be within our 
 power to expand. Whatever may be done 
 abroad to improve the condition and the buying 
 
 I A Government White Paper gives an analysis of similar 
 imports for the previous year, 1906. It divides the total 
 import of manufactured articles in that year, £130,400,000, 
 into three classes : A. articles fully manufactured and ready 
 for sale ; B. articles requiring only some finishing processes ; 
 and C. articles only slightly manufactured. The proportions 
 we e as follows : — 
 
 Class A. £51,400,000 
 „ B. £52,300,000 
 „ C. £26,700,opQ 
 
THE PROBLEM OF INDUSTRY 119 
 
 power of the people, must be done by others. 
 In proportion as in other countries, whether 
 under our own flag or not, prosperity revives, 
 the demand for manufactures will increase in 
 them also ; but a comparatively small part of 
 that increase will take the form of a demand 
 for British produce. The more other countries 
 advance, the better for us ; for the richer our 
 customers are the more they can buy, and of 
 their extra buying we shall get our share. Only 
 within our own country, however, can we rely 
 upon having the lion's share, and only in our 
 own country can we plan to increase the wealth 
 of the people. 
 
 Unfortunately, it is but too certain that one 
 of the great hindrances to industrial prosperity, 
 dear food, will continue for long after the war. 
 Not only have large portions of the earth's sur- 
 face been devastated, but the demands of the 
 war must have delayed the development of new 
 food-growing lands, which otherwise should by 
 now have been sending us increased supplies. 
 After the war, too, the effective demand of the 
 world for foodstuffs seems likely to be larger 
 than during its continuance. The war brought 
 a food crisis to all the nations of Western Europe, 
 §ven those not actually engaged in it. Almost 
 
120 BRITAIN AFTER THE PEACE 
 
 at once Germany, Austria, France, Italy, Spain, 
 and to a less extent Portugal, Switzerland, 
 Norway and Sweden, the only countries in 
 Western Europe, with the exception of Belgium, 
 having agrarian Protection, were compelled to 
 suspend altogether or in part their protective 
 imposts on foodstuffs. This is one of the most 
 startling by-products of the war, for in effect 
 it means that Europe, which went into the war 
 mainly Protectionist, will, at the moment it 
 emerges from it, be mainly Free Trade, at least 
 so far as foodstuffs are concerned. 
 
 And one is inclined to say it is likely to remain 
 so, at least for a considerable time ; for the 
 reason that compelled the suspension of the 
 food taxes will still exist. In so far as the 
 Central Empires are concerned, the suspensions 
 have had comparatively little effect, for the 
 blockade of Germany and Austria by sea, com- 
 bined with the fact that Germany's main foreign 
 food supply, Russia, was one of her enemies, has 
 prevented the possibility of importation. The 
 result is that the Central Powers are desperately 
 short of food, and the first great relief to them 
 from the peace will be the renewed possibiUty 
 of importing it. As far as one can forecast the 
 situation, it looks as though no Government 
 
THE PROBLEM OF INDUSTRY 121 
 
 could be mad enough to reimpose the food 
 duties. A famished people, disillusioned and 
 discontented, and well aware that the granaries 
 of Russia and America could relieve their dis- 
 tress, are hardly likely to permit duties of about 
 I2S. a quarter to be interposed between them 
 and the food supply thus dangled before their 
 eyes. The social atmosphere will be far too 
 strongly charged with revolution to render such 
 a measure safe. On the other hand, the moment 
 of peace will perhaps be the only time at which 
 a resumption of agrarian Protection will be 
 possible. Every day that the suspension con- 
 tinues will tend to strengthen the hold of Free 
 Trade upon the people. These tariffs were only 
 imposed slowly and in time of cheap food, against 
 the bitter opposition of the people, and unless 
 the thing is done at once by some arbitrary act 
 of government, it is very unlikely they will ever 
 be built up again. 
 
 Whether the tariffs are reimposed or not, 
 there will certainly be for some time a most 
 intense competition among the half-starved 
 enemy and *' rationed " neutral populations of 
 Europe for any foodstuffs the granaries of the 
 world may have to spare. For the time being, 
 the price seems more likely to rise than to fall. 
 
122 BRITAIN AFTER THE PEACE 
 
 Generally speaking, I fear the peoples of the 
 world, including our own, will require to spend 
 so much on food that they will be forced to put 
 up with less or cheaper clothes, and will have 
 very little indeed to spare for superfluities. 
 
 Now, no doubt it may be to the advantage 
 of a manufacturer to get his own supply of labour 
 as cheap as possible, but, emphatically, it is not to 
 his interest that the general rate of wages should 
 be low, and it is altogether bad for him that the 
 price of food should be high. Either state of 
 things reduces the fund which the people have 
 available for his productions. It is most im- 
 portant for him to increase this fund as far as 
 possible, especially in the home market. At the 
 end of the war he will find his position very 
 difficult. His income tax will be heavy : if he 
 is a rich man, probably heavier even than now.^ 
 Dear food and general impoverishment, and 
 political, confusion, if not revolution, at least 
 on the Continent, will combine to restrict and 
 endanger his markets. If he is to expect any great 
 extension of them, he must look, it seems to me, 
 
 I Mr. Sidney Webb proposes on the highest incomes a 
 rate of income and super-tax combined of 15s. yd. in the 
 pound, Lord Courtney of Penwith, who is certainly no 
 revolutionist, it appears, advocates i6s. ! 
 
THE PROBLEM OF INDUSTRY 123 
 
 mainly in one direction — the potential buying 
 power of that large surplus labour for which he 
 is unable to find prompt employment in his own 
 factories and mines. In order to mitigate the un- 
 avoidable evil of dear food, he should stand fast, 
 like his predecessors in the '' hungry forties/* 
 for the free importation of whatever foodstuffs 
 can be obtained abroad. With that he should 
 assist in every way in turning the large remainder 
 of the army which he is unable to employ himself 
 into wealth producers, earning as much money 
 as possible, and capable of buying largely the 
 commodities he has to sell. As long as they 
 are still in the army their demands for his goods 
 will be limited by their army pay, and he will 
 have to bear his share in the heavy burden of 
 taxation by which they are supported. When 
 they are returned to productive and remunerative 
 work again, he may hope for some relief from 
 taxation and an increased demand for his pro- 
 duce. The problem of demobiUzation is his 
 problem, almost as much as it is the soldiers'. 
 It is his business, then, as much as anybody's, 
 to assist in finding a statesmanlike solution of it. 
 Where is such a solution to be found ? After 
 industry has absorbed as much labour as possible 
 there will be a large surplus left. The ordinary 
 
124 BRITAIN AFTER THE PEACE 
 
 channels of employment will, I am convinced, 
 never, or at least not for a long time, supply it. 
 And with delay we shall perpetuate a very 
 dangerous state of affairs — poverty and depres- 
 sion of trade, vast unproductive expenditure, 
 and an armed and discontented population open 
 to new ideas and affected by the revolutionary 
 movement in Russia, at least, and probably in 
 many other parts of the Continent. The future 
 of the British Empire will be more endangered 
 by the peace itself than ever it was by the 
 Germans. Between us and the German armies 
 there was always the Channel and the greatest 
 navy in the world, but what will lie between 
 Britain and her own children, faced with the 
 greatest problem in her history, and looking to 
 her rulers for a solution ? For that solution 
 we must look mainly not to the industrial 
 capitalist, but to the land. 
 
CHAPTER V 
 
 THE PROBLEM OF THE LAND 
 
 Much of what has been written in the last two 
 chapters may appear to the reader mere digres- 
 sion. We are engaged in considering how the 
 vast army withdrawn from industry by the war 
 may be reinstated in some tolerable and settled 
 way of peaceful life. A proposal has been 
 made for holding up that great portion of the 
 army which cannot for some time, and may 
 never, be re-absorbed by our old industries, 
 until some other outlet can be found for their 
 activities. But it is admitted that this great 
 reservoir of labour cannot be maintained for 
 ever. Neither in the interests of the men them- 
 selves, nor in those of the nation as a whole, 
 could such a state of things permanently continue. 
 Even as a temporary expedient, it is only justifi- 
 able as the alternative to greater evils — injustice 
 to the brave men who have fought for us, and 
 social anarchy. 
 
 126 
 
126 BRITAIN AFTER THE PEACE 
 
 Throughout all the various subjects so discussed, 
 however, this central problem has never been 
 forgotten. One or two clues which will be use- 
 ful to us later on have indeed been obtained. 
 Before I attempt to deal with the reconstructive 
 problem, then, it may be well to recapitulate 
 these clues : — 
 
 1. In order that we may distribute the 
 burden of the war fairly between those 
 classes of the community who can best 
 afford to bear it, it will be necessary to 
 take some special line of action to ensure 
 that the landowners shall contribute their 
 share. Unless this is done, there is reason 
 to fear that the landowners, far from bearing 
 their due share of the common loss, may 
 actually be enriched by the war — of course 
 with the result of flinging a yet heavier 
 burden on other people. As an essential 
 first step to this end a scheme of taxation 
 of land values has been suggested. 
 
 2. We have seen that if British industry 
 is to revive rapidly after the war it will 
 be essential that the margin which people 
 have to spend after buying their necessary 
 food must be maintained and extended. 
 The progress of industry demands cheap 
 
THE PROBLEM OF THE LAND 127 
 
 food and regular employment at good 
 wages. 
 
 3. Our method of demobilization goes far 
 to ensure that the old industry will have to 
 pay a fair rate of wages to those whom it 
 can employ, but it does nothing to reduce 
 the price of food, and it leaves probably a 
 miUion or more of soldiers unproductively 
 employed as a charge on the taxpayer. 
 It is quite possible that the whole of these 
 men can never be employed within the United 
 Kingdom to the best advantage. It is a great 
 mistake to take for granted that it would be a 
 good thing for the population of this country 
 to go on increasing indefinitely, or even for it 
 to be maintained at the present standard. What 
 we ought to desire is the real prosperity of the 
 people themselves and the progress of civili- 
 zation generally. An exaggerated nationalism 
 leading governments to demand a huge popu- 
 lation, possibly in the last resort to ensure a 
 good supply of " cannon fodder," seems to me 
 one of the evil gifts Prussianism has given to 
 the modern world. It would be a very good 
 thing if the population of the world were dis- 
 tributed much more evenly than it is at present. 
 In no case is it desirable that those of our people 
 
128 BRITAIN AFTER THE PEACE 
 
 who could make a better living for themselves 
 and do more for the progress of the world by 
 emigrating to other lands should remain here. 
 Probably, whatever we do, there will be a great 
 emigration, the ultimate effects of which will 
 be altogether to the good, from densely peopled 
 and sorely distracted Europe after the war. 
 What we have got to do is to extend the pro- 
 ductive capacity of the British islands to the 
 utmost, so as to render them the most desirable 
 place to live in for as many people as possible. 
 When that has been done, it may be necessary 
 to accept or encourage a considerable stream 
 of emigration among those who cannot be ad- 
 vantageously provided for here. The vital 
 points of view are those of the individual and 
 of humanity as a whole, not that of the nation. 
 The true glory of a State is that it has provided 
 the fullest and freest life possible for its people, 
 and in so doing it has enabled them to be most 
 useful to the world. Its justification is service — 
 service of the individual and of the race. 
 
 But though a more even distribution of the 
 population of the world may be desirable and 
 may very well be an outcome of this war, it is 
 not to be wished that anything like actual equality 
 of distribution should be attained. So long 
 
THE PROBLEM OF THE LAND 129 
 
 at least as coal remains the motive power of 
 industry, there will always tend to be an especi- 
 ally dense population in those countries which 
 produce it ; while areas possessing many har- 
 bours will tend to be proportionately more 
 populous than others, especially when placed 
 in advantageous positions for dealing with a 
 large ocean traffic. The foundations of our 
 industrial and commercial greatness are our 
 geographical position and our mineral wealth, 
 which neither war nor peace can alter. The 
 possession of coal, especially when near ports 
 of shipment, iS, therefore, a great advantage 
 to a nation. The advantage consists in the 
 fact that certain kinds of wealth can be produced 
 with less labour there than in other lands, and 
 that, therefore, in addition to the normal popu- 
 lation which the agricultural possibihties of the 
 country would naturally give, it can support an 
 unusually large share of industrial workers as 
 well. 
 
 If we leave out of account the extremes of 
 climate, the Tropics and the Arctic regions, the 
 agricultural possibilities of the various lands 
 of the world are much more evenly distributed 
 than their mineral wealth. The food producers 
 of the earth may, therefore, be fairly widely 
 
 9 
 
130 BRITAIN AFTER THE PEACE 
 
 and evenly distributed ; the miners are neces- 
 sarily concentrated in comparatively few places. 
 And where the miners are collected, there also 
 tend to concentrate the craftsmen who work up 
 the produce of the mines, especially that great 
 mineral, coal, which, though we hardly realize 
 it, because it is destroyed in the process of manu- 
 facture, is a raw material of nearly everything 
 we buy, the nearest of all things to a universal 
 raw material, of steel and cotton, of bricks and 
 timber, of a motor-bus and of a newspaper. 
 
 It is natural, then, that coal-producing countries 
 should tend to be manufacturing countries and 
 to have dense populations. Such countries can 
 produce manufactures more cheaply than others, 
 and are, therefore, naturally exporting countries. 
 But as in the long run exports can only be 
 paid for by imports, such countries are also 
 importing countries. What are they to import ? 
 To some extent, no doubt, their exports may be 
 paid for by other manufactures from countries 
 whose industry is as highly developed as their 
 own ; but mainly their imports must consist, 
 as ours do, of foodstuffs and raw materials. 
 Even their imports of raw materials will consist 
 largely of subsidiary products, not of the all- 
 important one, coal, their own abundant supply 
 
THE PROBLEM OF THE LAND 131 
 
 of which is the reason of their industrial great- 
 ness, nor of any other material of which they 
 have a large home supply. Because of their 
 denser population, their home supplies of food 
 will tend to be dearer than elsewhere, and will 
 need to be supplemented ; while, in less favoured 
 lands, there will be food surpluses, which it will 
 be necessary to export. 
 
 But given a good land system, by which I 
 mean one that imposes no restriction on new 
 methods of culture and on improvement generally, 
 such a country ought not to produce less food 
 than one which is purely agricultural. Indeed, 
 it should produce more, though not as much more 
 as is required by its far denser population. As 
 a country becomes highly industrialized and 
 great manufacturing towns arise, agriculture 
 should be stimulated, not depressed, for the 
 market for foodstuffs is greater than ever. 
 Nothing condemns the British land laws more 
 than the fact that our agriculture ever was 
 depressed. The British farmers had always, as 
 I long since pointed out, '' the finest market 
 for foodstuffs in the world at their very door/' 
 and the last agriculturists to feel depression 
 should have been our own. 
 
 But while the presence of an abnormally 
 
132 BRITAIN AFTER THE PEACE 
 
 dense population should not decrease the amount 
 of food production, it ought to modify its char- 
 acter. A country with a temperate climate, where 
 there are few industries and a scanty population, 
 will not need to supplement its home produce 
 by imported food, except tropical produce. As 
 its people will be fed entirely off their own lands, 
 it will generally pay them to grow nearly all 
 the varieties of food they require themselves 
 As soon as importation becomes necessary, how- 
 ever, the case is very different. Given freedom 
 to put land to its best use, then, the greatest 
 gain will be obtained by devoting special atten- 
 tion to the production of those kinds of 
 foodstuffs where the advantage of the home 
 producer — the man nearest the market — over 
 the foreigner is most marked, while leaving in 
 an ever-increasing degree the supply of other 
 kinds of food to the foreign importer. The 
 passing of a country from a purely agricultural 
 to an industrial condition is a challenge to con- 
 servatism. It is an opportunity to develop 
 on new lines, a demand for new ideas. The 
 last way on earth such a challenge should be 
 met is by crying out for a Protective tariff to 
 enable the methods pursued before the indus- 
 trial revolution to continue in existence. 
 
THE [PROBLEM OF THE LAND 138 
 
 The Corn Production Bill aroused much dis- 
 cussion last summer, and was riddled pretty 
 effectively from various points of view by its 
 opponents. These criticisms would probably have 
 been sufficient to defeat the Bill at any ordinary 
 time, but the national emergency and the serious 
 consequences that might follow the defeat of 
 any Government at present were sufficient to 
 secure it a safe passage, however absurd its 
 proposals might be. Some of the ideas at the 
 back of the Bill never, however, seem to me to 
 have been effectually challenged ; and as these 
 are based on a large amount of crude thinking 
 prevalent before the war, and of some rather 
 panicky notions that have developed since it 
 broke out, the Bill will afford a good peg on 
 which to hang my criticism of these ideas. 
 
 In the first place, a most depressing effect is 
 made on the mind by the trivial character of 
 the whole thing. Men who frame measures such 
 as this can have no vision, no conception of the 
 tremendous revolution through which the world is 
 now passing. A more glaring folly, if that were 
 possible, might have been more readily pardoned, 
 if only on a sufficiently gigantic scale, for that, 
 at least, would have shown that the promoters 
 of the Bill were aware that changes of real im- 
 
134 
 
 BRITAIN AFTER THE PEACE 
 
 portance are going on in the world. But this 
 is a pedlar's folly, not that of a great speculator ; 
 it is reaction masquerading as reform, at a time 
 when even reform which fell short of construc- 
 tive revolution would be of very little use. It 
 is to the Russian peasant soldier, to whose sim- 
 plicity have been revealed things hidden from 
 the wisdom of our *' business Government," that 
 we might look for guidance on the land question — 
 as on others. 
 
 But the Bill is not a reform at all, even on an 
 inadequate scale, for reforms can only be drafted 
 after proper consideration of the needs of con- 
 temporary life. Probably the scheme will have 
 had no effect whatever, good or bad. The 
 Bill will not be operative unless corn prices fall 
 below the following rates : — 
 
 
 Year. 
 
 1 
 
 Wheat. 
 
 Oats, 
 
 
 1 Price 
 
 per Quarter. 
 
 Price per Quarter. 
 
 I9I7 
 
 
 
 60s. 
 
 38s. 6d. 
 
 I9I8 
 I9I9 
 
 
 : ;;i! 
 
 55s. 
 
 32s. 
 
 1920 
 
 
 
 1 
 
 
 
 I92I 
 
 
 . 
 
 
 45s. 
 
 24s. 
 
 1922 
 
 
 * 
 
 
 
 
THE PROBLEM OF THE LAND 135 
 
 I shall be surprised if wheat or oats touch 
 any of these prices in the years given ; they are 
 far more likely never again to fall below the 
 figures for the first of them. Unless they do, 
 the whole thing is a futility, and a mere waste 
 of parliamentary time. The opposition to it 
 generally took another line, quite rightly point- 
 ing out that there was no guarantee that the 
 nation would get value for any money paid 
 under the scheme, without, however, disputing 
 the idea of the Bill that it was specially desirable 
 to make sacrifices in order to grow more wheat 
 and oats. That being the assumption at the 
 back of the Bill, it certainly is valid criticism 
 to point out, as it was easy to do, that the 
 object was much more likely to be attained in 
 simpler ways. The whole conception of the 
 Bill was wrong — ^the idea of the national crisis 
 implied in it was ridiculously inadequate ; the 
 line taken for agricultural development was based 
 on a misconception of our needs, and the fact 
 that, even so, it was not likely to achieve 
 its purpose was just another example of the 
 general incompetence with which it has been 
 drafted. 
 
 The fact is that the very name Corn Production 
 Bill betrays a misconception as to our needs. 
 
186 BRITAIN AFTER THE PEACE 
 
 More than ever after the war we shall need an 
 increase of food production at home ; but though 
 corn is food, food is not necessarily corn. Of 
 course, wheat is the most important single item 
 in our food supply; but even when we add all 
 the other cereals to it, the total amount spent 
 by the people in other kinds of foodstuffs is 
 considerably greater. Meat, potatoes and vege- 
 tables, dairy produce and fruit, are all in various 
 degrees essential to our diet ; taken together, 
 they are as essential as bread. Nay, they are 
 more so. With plenty of potatoes, peas, milk 
 and eggs, and bacon, a man could stand a very 
 long siege without any bread, but a diet of bread 
 and water is prison fare and long recognized 
 as such. So long as a reasonable variety of 
 foodstuffs remains, it matters comparatively 
 little what individual article disappears or is 
 reduced in quantity. 
 
 We should fix our minds on the increase of 
 food production in general, rather than of " corn 
 production " in particular : it is obvious that 
 the promoters of the Bill interpreted the need in 
 the narrower sense. It is true that by plough- 
 ing up land for wheat or oats you will inciden- 
 tally lead to the production of increased supplies 
 of root crops and clover. In this way you may 
 
THE PROBLEM OF THE LAND 137 
 
 tend to develop the sort of agriculture that 
 has made Aberdeenshire prosperous — the small 
 mixed farm sending to the market an exception- 
 ally large supply of fat stock in proportion to 
 its area. From this point of view the criticism 
 of the Bill was useful ; and the Hon. A. Shaw's 
 amendment to pay a bounty on each acre of 
 land brought under the plough since 1914, and 
 not merely on wheat and oats grown on any land, 
 was more likely to increase the home-grown 
 food supply of the nation. Even Mr. Shaw, 
 however, was not looking with a single and in- 
 different eye to the increase of food production, 
 but to bringing as much land under the plough 
 as possible ; and he ruled *' intensive and hot- 
 house culture" — in other words, the free, self- 
 employing small-holder — out of account, in favour 
 of the capitalist farmer and wage labourer. 
 
 The seeds of the misconception embodied in 
 the Bill were, I am afraid, sown long ago by one 
 of the noblest men who ever sought a refuge 
 from tyranny on the soil of England. No one 
 can feel more deeply than I do the debt of grati- 
 tude we owe to Kropotkin, and no one can rejoice 
 more unreservedly that that great man has 
 lived to see his country freed from the despotism 
 that drove him to our shores ; but there are 
 
138 BRITAIN AFTER THE PEACE 
 
 fundamental errors in his book, Fields, Factories, 
 and Workshops, which render it ahnost as danger- 
 ous as it is useful. Read uncritical^, it has led 
 many sincere progressives into a line of thought 
 which pla^^s directly into the hands of jtheir 
 enemies.^ Kropotkin rightly enough pointed out 
 that what it is now the fashion to call the " com- 
 mercial hegemony " of the world must pass away 
 from the British Islands. I doubt, indeed, 
 whether " hegemony '' is not much too strong 
 an expression to apply to any leadership we 
 ever had ; but even the industrial leadership 
 can hardly last for ever. When, however, he 
 proceeded to infer from that and from the pro- 
 gress of industrialism abroad, that manufactures 
 would develop pretty equally in all countries, 
 he overlooked the unequal distribution of mineral 
 wealth throughout the world. Inferring from 
 the statistics of a period of steadily declining 
 prices and cheaper production that the industrial 
 development of the world was making it harder 
 
 I The present writer included. Of what I have written 
 on social questions, there is little I should be willing to alter, 
 except in so far as the war has necessitated a general speed- 
 ing up in progress. The paragraph in The Opportunity of 
 Liberalism which treats the industrialization of all nations 
 as a certainty would, however, require extensive modifi- 
 cation. 
 
THE PROBLEM OF THE LAND 139 
 
 and harder to export, he came to the conclusion 
 that our foreign trade must decline, and that 
 every nation must sooner or later come to be 
 self-sufficing, confining itself to the home worker 
 for manufactures, and producing its foodstuffs, 
 and presumably its raw materials, at home. 
 The history of this century so far has falsified 
 all these predictions. Though other nations 
 have developed industrialism on a scale com- 
 parable to, and in the case of the United States 
 greater than, our own, that very fact has made 
 it easier, and not harder, to find markets for 
 British manufactures, and our exports have never 
 increased at a more rapid rate than they did in 
 the decade preceding the war. " The indus- 
 trial and commercial history of the world during 
 the last thirty years,'' Kropotkin wrote in 1898, 
 ** has been a history of decentralization of in- 
 dustry. It was not a mere shifting of the centre 
 of gravity of commerce, such as Europe has 
 witnessed in the past, when the commercial 
 hegemony migrated from Italy to Spain, to 
 Holland, and finally to Britain ; it had a much 
 deeper meaning, as it excluded the very possibility 
 of commercial or industrial hegemony." This 
 is quite true, and from this fact we get the 
 industrial progress of Germany and the United 
 
140 BRITAIN AFTER THE PEACE 
 
 States. But it is a far cry from an industrial 
 " hegemony " to an equal distribution of manu- 
 factures throughout the civilized world, and that 
 is kept in check by a factor which modern 
 conditions have not changed — the unequal dis- 
 tribution of mineral wealth ; while the inference 
 that a highly developed industrial country will 
 be a worse customer for foreign manufactures 
 is wholly unjustified. Such a country will, it 
 is true, import a far smaller proportion of its 
 manufactures from abroad, but the total amount 
 of its purchases will probably be greater than 
 ever. Thus Germany and Great Britain, as 
 their own industries grew and because of the 
 wealth their growing industries brought them, 
 became better customers of one another. In- 
 deed, without meaning it, Kropotkin has given 
 his support to the narrowest nationalism. There 
 is no more reason why fifty million people under 
 one national government should produce every- 
 thing they want for themselves, than there is 
 that each county or industrial city should be 
 entirely self-supporting. Kropotkin, the enemy 
 of States and the friend of humanity, is guilty 
 of the heresy of the self-sufhcing State, cut 
 off, at least for purposes of exchange, from 
 the rest of the world. Mr. Chamberlain merely 
 
THE PROBLEM OF THE LAND 141 
 
 accepted his premises, and Prussia has only- 
 developed them to their logical conclusion. 
 
 As long as the British coal measures last, 
 and our workers retain the specialized skill their 
 lead in industry has given them, these islands 
 will enjoy a more than average share of the 
 manufactures of the world. As long as we 
 remain an island with easy access from every 
 place in the land to the sea, we shall have ad- 
 vantages enough to ensure that, if not the ''hege- 
 mony" in commerce and shipping, at least be 
 able to maintain a very prominent position and 
 both on a scale increasing positively, if not 
 relatively, to that of the rest of the world. And 
 being a great manufacturing country, we shall 
 have a comparatively large population. Our 
 land will afford a good market for foodstuffs, 
 both for our agriculturists and for strangers. 
 If we are to export manufactures, we shall have 
 to import food. 
 
 But if we are to buy food at all, I contend 
 that wheat is about the most desirable f6od to 
 import ; it is almost the last for which we should 
 make special sacrifices to secure a home supply. 
 Let us consider the matter from the points of 
 view of our needs in peace, especially at the 
 conclusion of this war, and of those occasioned 
 
142 BRITAIN AFTER THE PEACE 
 
 by possible wars in the future. Our immediate 
 needs after the war will be to bring down as 
 much as possible the price of food, and to find 
 employment for as many discharged soldiers 
 as we can, in order, among other things, to 
 enlarge the margin between the total wages of 
 our people and that portion of them they are 
 obliged to spend on the first necessaries of life, 
 so as to provide as extensive a home market as 
 possible for our manufactures. In war, the need 
 is to guard against the nation being starved into 
 surrender in any future submarine campaign. 
 In both we must guard ourselves against the 
 common fallacy of treating the words " food " 
 and " wheat " as interchangeable. " In fact," 
 says Kropotkin, " the area under wheat had 
 been reduced since 1853-60 by 1,590,000 acres 
 . . . and this deficit alone represented the food 
 of more than 7,000,000 inhabitants." The italics 
 are mine, and Kropotkin deals amply with other 
 sorts of food ; but the crude fallacy that because 
 we actually, grow less wheat than we did fifty 
 years ago, therefore we feed a proportionately 
 smaller number of people, is implicit in columns 
 of printed matter inspired by his book. With- 
 out going into details, the broad facts are that 
 in 1907, the year of the Census of Production, 
 
THE PROBLEM OF THE LAND 143 
 
 and the only one for which the facts are avail- 
 able, our imports of non-dutiable foodstuffs 
 were valued, at £194,800,000 while the agri- 
 cultural produce of the United Kingdom was 
 estimated at ;f 196,374,000. We, therefore, may 
 be said to have fed about half our population, 
 or twenty-two milhon people, in that year ; and 
 considering that there is certainly a better and 
 more varied standard of feeding now than in the 
 days of our grandfathers, I very much doubt 
 if British agriculture ever did more. That with 
 the wonderful expansion of demand, it should 
 have done more, I agree ; the question is as to 
 what form the increase should have taken. 
 
 The first point to note is that only about three- 
 eighths in value of the imported, and certainly a 
 much smaller proportion of the home-grown food 
 consisted of cereals and flour, so that not much 
 more than a quarter of our expenditure on food 
 would appear to go in bread and other foods from 
 cereals. Now, in order to free a larger share of 
 a family's income for the purchase of clothes and 
 other manufactures, what is wanted is a reduction 
 in the food bill as a whole ; it matters compara- 
 tively little on what particular item the reduction 
 occurs. Even if bread remained at its present 
 price, an immense advantage would accrue to 
 
144 BRITAIN AFTER THE PEACE 
 
 the poor if other food prices fell to pre-war levels. 
 The Corn Production Bill aims at increasing the 
 home production of food grains, without raising 
 the price, as would be done by a protective duty, 
 to the consumer, but at the expense of thei:ax- 
 payer. Nobody, however, even pretends that 
 the Bill would make corn any cheaper. Under 
 the working of the Bill, the price of wheat in our 
 market would still be determined by that of the 
 world-market, and that again by the relation 
 of the total world's supply of wheat to the total 
 demand. Even three million British acres brought 
 under the plough would make only a fractional 
 increase of the world's total production of wheat, 
 and could have only a minute influence on prices. 
 Only by increasing our wheat production to 
 such an extent that we had a surplus over our 
 own requirements, and part of the crop had to 
 be exported or wasted, could we effect any great 
 reduction in wheat prices in time of peace. This 
 is obviously out of the question. Perhaps there 
 is no other foodstuff of which this is true to the 
 same extent. Some, such as milk, are almost 
 independent of the price in the world's market, 
 and an increased supply of British milk would 
 immediately bring down the price all over the 
 country. In proportion as an article is perish- 
 
THE PROBLEM OF THE LAND 145 
 
 able, is difficult to transport quickly, and is 
 produced only in comparatively few places, any 
 shortage in the British supply will tend to 
 scarcity and high prices ; while an enlargement 
 of British production will produce cheapness. 
 Wheat, however, can be grown in almost any 
 part of the temperate zone ; it can be very rapidly 
 and cheaply loaded and shipped ; it can be 
 transported over great distances and kept in 
 proper warehouses for a great length of time 
 without any serious depreciation in quality. As 
 long as we continue our policy of free imports, 
 there is no possibility, at least in time of peace, 
 of making a " corner " in our wheat supply : for 
 any rise of price on our corn exchanges will be 
 cabled all over the world, and will instantly serve 
 to divert cargoes of wheat to our shores. 
 
 No less important than that of prices is the 
 question of quahty. In his interesting book, 
 Our National Food Supply, Mr. James Lumsden 
 complains of " the vitiated palate of the British 
 public, which renders possible the sale of in- 
 calculable quantities of food that palates accus- 
 tomed only to perfectly fresh food would refuse. 
 This vitiation of the palate has come about 
 slowly. It has grown with the increasing neces- 
 sity of eating food conveyed for long distances — 
 
 10 
 
140 BRITAIN AFTER THE PEACE 
 
 foods often subjected to partial decomposition 
 and deleterious influences in packing and transit, 
 and sometimes deprived of their natural flavour 
 by the substances put into them to make them 
 keep." With much of what Mr. Lumsden has 
 to say I can heartily agree, though he lays too 
 much stress on the fact that our food tends to 
 come to us from ever greater and greater dis- 
 tances. Hence he infers that an increasing 
 proportion of what we pay for our imports goes 
 for carriage and freight, while a decreasing 
 amount is left for the food itself. This ignores 
 the progressive improvement in the rapidity 
 and cheapness of transport, which continually 
 counteracts the influence of increasing distance 
 in raising prices. Very likely it costs less and takes 
 very little more time to bring food to London 
 from Canada than it did to send it from York- 
 shire in the days before the railway. The city 
 part of our population have been fed on *' im- 
 ported " foodstuffs for generations, and on 
 food that must have been as much knocked 
 about and often been quite as old when it came 
 to town in carts as now when it travels a far 
 greater distance by rail or steamer. It is only 
 when we speak of the rural districts that Mr. 
 Lumsden' s criticism can be unreservedly accepted, 
 
THE PROBLEM OF THE LAND 14^ 
 
 and even then it is not true as regards wheat. 
 It is as certain as anything can be that the 
 British people never had as good bread as during 
 the last thirty years, and that no nation in the 
 world ever had better. 
 
 This is so because during that time British 
 millers have had the pick of the world's wheat 
 supply to choose from. Great milling estab- 
 lishments have arisen at the ports, which are less 
 dependent upon the climatic conditions in any 
 particular wheat-producing area than the mills 
 in other countries. If the harvest fails or is 
 injured by bad weather in Canada or Argentina, 
 in India, Russia, or Australia, this means 
 inferior wheat and bread for the inhabitants of 
 the country affected ; but unless all the harvests 
 fail at the same time, it has far less influence 
 here. Even the worst summer of our fickle 
 climate, though it may almost ruin the British 
 wheat crop, has but httle effect either on the 
 price or quality of British bread, which maintains 
 a uniformly high standard whatever happens 
 to one of its numerous sources of supply. And 
 though our prices for wheat are necessarily higher 
 than those of any country from which we are at 
 the moment importing, the loss is reduced to a 
 minimum. The regular traffic, the arrangements 
 
148 BRITAIN AFTER THE PEACE 
 
 made for prompt shipment, the fact that corn 
 can be easily stowed in bulk, make the cost of 
 conveying it to our shores much less than that 
 of importing produce which is in less regular 
 demand, which takes time and money to stow, 
 and cannot readily be stored till wanted. 
 
 So much for the question of our needs in peace. 
 In war, it is in the first place necessary to remem- 
 ber that any nation that does a foreign trade at 
 all must necessarily suffer inconvenience from the 
 loss of foreign supplies when it goes to war with 
 one of its customers, much more when its enemy 
 is able to impose on it any sort of blockade, by 
 submarine or otherwise. We are dealing with 
 a problem for which there is no real solution — 
 except the preservation of peace. Those only 
 are going to the root of this question, as of others, 
 then, who are planning to build up a more settled 
 and peaceful world-order after this war is ended. 
 We can do more to protect ourselves against 
 shortage of supplies such as we have suffered 
 from during the war by throwing British influ- 
 ence on the side of President Wilson and others, 
 who desire to replace the international anarchy, 
 out of which the war arose, by a civilized inter- 
 national order than by any domestic change. 
 It must frankly be recognized that neither this 
 
THE PROBLEM OF THE LAND 149 
 
 country nor any other European belligerent can 
 afford to have another war of this kind. Euro- 
 pean civilization will be saved from shipwreck, 
 however hardly, if as soon as the war is over the 
 nations turn to constructive work and devote 
 themselves whole-heartedly to the internal 
 problems it has raised for them. If, however, 
 they immediately return to the consideration 
 of war and preparations for war, a final collapse 
 of European civilization is morally certain, 
 sooner or later. And for us, if we cannot devise 
 some means of keeping permanently at peace, 
 but must run the risk of being cut off from time 
 to time from the food supplies of the world, 
 there can be no question of avoiding the ulti- 
 mate ruin of our country ; the best that we 
 can do will at most merely put off the evil day. 
 To achieve that modest aim, however, and to 
 make it more difficult to starve us by blockade, 
 the need is to increase the supply of food, not 
 merely that of wheat, within the country. By a com- 
 parison of nearly two thousand weekly budgets of 
 families receiving an average of 36s. lod. a week, 
 the Board of Trade, in 1904, arrived at the scale 
 of expenditure on food given in the footnote ^ : — 
 
 I The reader may note the bearing of this on what has 
 been said already. An average family earning 36s. lod. and 
 
150 BRITAIN AFTER THE PEACE 
 
 It is clear that a maintenance of the bread 
 supply would do very little to help such a family, 
 if other foods or a number of them fell short. 
 
 spending on food 22s. 6d. a week would spend in rent and 
 manufactures anything up to 12s. 4d. a week. That was its 
 margin. But such a margin out of 36s. lod. a week has long 
 since disappeared, and these two thousand families cannot 
 again be good customers for British manufacturers until 
 either food has fallen heavily in price or they are paid 
 much higher wages. 
 
 Bread and flour 
 
 Meat (bought by weight) 
 
 Other meat (including fish) 
 
 Bacon . . 
 
 Eggs . . 
 
 Fresh milk 
 
 Cheese . . 
 
 Butter .. 
 
 Potatoes 
 
 Vegetables and fruit . . 
 
 Currants and raisins . . 
 
 I^ice, tapioca, and oatmeal 
 
 Tea 
 
 Coffee and cocoa 
 
 Sugar . . 
 
 Jam, marmalade, treacle, and syrup 
 
 Pickles and condiments 
 
 Other items 
 
 s. d. 
 
 3 7 
 
 4 5i 
 o iif 
 
 Hi 
 
 o 
 
 
 
 I 
 I 
 o 
 
 2 
 
 O II 
 II 
 
 
 
 I 
 o 
 o 
 
 
 
 o 
 I 
 
 3i 
 
 2i 
 
 6 
 
 li 
 
 3l 
 
 Hi 
 
 6i 
 3i 
 9i 
 
 Total 
 
 22 6 
 
THE PROBLEM OF THE LAND 151 
 
 When one kind of food cannot be obtained, it 
 is often possible to substitute another, as those 
 know who have been trying to discover what can 
 take the place of potatoes, or what should be 
 done to satisfy the hunger left after limiting 
 themselves to the Food Controller's ration of 
 war bread. Our difficulty has been not merely 
 or even mainly that bread has become dear, 
 but that everything else has become dear at the 
 same time. If the country had been fully 
 supplied with potatoes and vegetables, and we 
 had had cheap eggs, bacon and meat, we might 
 have been inconvenienced by the short supply 
 of bread, but we need never have been anxious 
 about it. The need was to increase the total 
 supply of food : a cargo brought to the country 
 was a gain in any case ; one sent to the bottom by 
 a submarine was a loss any way, no matter with 
 what kind of food either ship might be loaded. 
 
 But England can be supplied with a greater 
 quantity and variety of home-grown food by 
 the cottager with his spade than by the farmer 
 with his plough, and to better purpose in re- 
 ducing the cost of living in peace, while effecting 
 greater independence in war. In the last resort, 
 the question of variety apart, the problem in 
 war is to bring the largest possible number of 
 
152 BRITAIN AFTER THE PEACE 
 
 cargoes to our ports, to economize our shipping. 
 To do this to the best advantage, it was desirable 
 to import as far as possible those foodstuffs 
 which could be easily and rapidly loaded, could 
 be obtained from a great variety of places, and 
 could be promptly discharged. If we had had 
 plenty of other things in the country, it would 
 have been comparatively easy to supply ourselves 
 with corn ; while in the last resort it would have 
 been possible to endure the lack of it. And if 
 everything else fail, and we must have corn at 
 any cost or surrender, there is still a more effec- 
 tive way to secure it. Wheat is a most uncertain 
 crop in this country where wet summers occur 
 so often and where rainy autumns not infre- 
 quently compel the cut corn to lie rotting in the 
 fields till it has to be fed to the pigs. The only 
 way to be certain we shall alwa3^s have an ade- 
 quate supply in case of blockade is to build 
 adequate warehouses and buy as large a stock 
 as is required beforehand. But that is the states- 
 manship of Joseph ; instead of it, the up-to-date 
 *' business Government " desired by Mr. Bottomley 
 gives us the Corn Production Bill ! 
 
 This measure is only another example of the 
 utter failure of British agriculture to realize the 
 opportunity brought to it by the industrial 
 
THE PROBLEM OF THE LAND 153 
 
 revolution. The increase of population this 
 revolution brought about inevitably raised the 
 prices of agricultural produce above the average 
 rate in less developed countries. This was, of 
 course, an advantage to our agriculture ; and 
 other things being equal, any form of culture 
 should be more profitable here than in countries 
 farther from the market. With our system of 
 large private estates, this profit went mainly 
 to enrich the landowners by raising rents. But 
 the advantage, because of the easy way it could 
 be transported and the good condition in which 
 it could be brought to market and stored for a 
 long time, was less on corn than on most other 
 things. Under such circumstances, it was in- 
 evitable that corn should be less grown, and 
 landlord and farmer, eager to maintain their 
 class existence, met the case by laying down 
 thousands of acres as permanent pasture, thus 
 producing commodities where their differential 
 advantage over the foreigner was greater, but 
 where, nevertheless, production could be carried 
 on under the system of landlord, tenant farmer, 
 and wage labourer, as of old. Meantime, they 
 neglected and left to the people of Denmark, 
 the Channel Islands, and Brittany the growing 
 trade in market-gardeii and small-holder produce^ 
 
BRITAIN AFTER THE PEACE 
 
 ever looking back regretfully to the days of high 
 prices and the Corn Laws. 
 
 The natural development of agriculture in 
 modern nations would seem to be different in 
 the case of a country where alongside the agri- 
 cultural population there is an industrial popula- 
 tion as well, and in a purely or mainly agricultural 
 country. To take the latter case fir&t. A purely 
 agricultural country — and all countries where 
 there is little mineral wealth will remain agri- 
 cultural in spite of Kropotkin and his queer 
 allies, the Protectionists of such countries — 
 must obtain its manufactures by exporting 
 foodstuffs. It will have a surplus of such food- 
 stuffs, which will consequently be very cheap. 
 As most of its people will be working on the 
 land, there will not be much internal trade in 
 agricultural produce, and garden stuff in par- 
 ticular will frequently be grown by each family 
 for its own use and not for sale at all, at least 
 in the home market. It is the growth of large 
 towns that makes the greengrocery trade, 
 which probably does not develop till long after 
 those of the miller and butcher. Even meat 
 may very often be consumed on the farm, not 
 bought from tradesmen. The low prices ruling 
 for the rnain staples, corn and meat, however, 
 
THE PROBLEM OF THE LAND 155 
 
 will make it profitable to dispose of them 
 in larger markets, and as industry develops 
 elsewhere, the export trade in them will grow. 
 But land being cheap in such countries, those 
 forms of culture which require large quantities 
 of land will tend to have a greater advantage 
 over the produce of industrial countries than 
 those in which large quantities of stuff can be 
 grown on smaller areas. Normally speaking, 
 therefore, there should be a general tendency 
 for the export trade to consist mainly of the 
 produce of large farms, especially such easily 
 transported, non-perishable things as corn. 
 
 In an industrial country a complementary 
 development may be expected. Here, prices all 
 round will be higher, in itself an advantage, and 
 not an evil, for the agriculturist ; presuming, 
 that is, that the land system of the country is 
 a good one. The competition of more thinly 
 peopled lands, climatic conditions being equal, 
 can never prevent the home producer from having 
 an advantage over the foreigner : it can only 
 prevent him making a monopoly and exploiting 
 the consumer. From an acre of land, no matter 
 what kind of crop is grown on it, there will always 
 be a greater total money return than from an 
 acre of equal quaUty in the more distant land. 
 
156 BRITAIN AFTER THE PEACE 
 
 The cost and waste of transport will always give 
 the home producer, other things being equal, a 
 differential advantage. But this differential 
 advantage will be most marked in the case of 
 market-garden and small-holder produce. In 
 these, to a very large extent, the market will 
 not merely be expanded, it will actually come 
 first into existence with the growth of the towns. ^ 
 Conditions have been set up which render it 
 impossible for millions of people to produce 
 their own eggs, vegetables, potatoes, and bacon, 
 and the market for these things will increase 
 beyond all proportion to what it is where every 
 one can grow his own. Here, too, the growing 
 price of land will affect the producer least, for 
 he requires little land in comparison ; while as 
 most of his goods lose in quality and incur much 
 waste in transport, he has a greater natural 
 protection than the large farmer. 
 
 When, therefore, the growth of population 
 made this country a food-importing one, the 
 
 > Even yet there are out-of-the-way country places in 
 England where by-products of the farms have hardly any 
 commodity value. Butter-milk, fruit at the height of the 
 season, cut flowers, and in one part of the country home- 
 brewed mead, are instances I could name. Goat's milk, 
 too, is mainly obtained for home use, while I have received 
 sixteen large new-laid eggs for a shilling in October. 
 
THE PROBLEM OF THE LAND 157 
 
 proper policy for agriculture was to import corn 
 as freely as possible, while developing to the 
 utmost extent the culture of the small-holder. 
 In opposition to the idea of the Hon. A. Shaw, we 
 should have had, long ere now, a very great 
 increase of *' intensive,'' whatever may be said 
 about " hot-house " culture. Even the little 
 temporary reform that enabled thousands of 
 inexperienced townsmen to obtain plots of vacant 
 land last summer had a very considerable effect 
 on the prices of vegetables as soon as the allot- 
 ment workers began to win their crops. That, 
 in so far as it went, was a real reform, and the 
 m.ethod by which the Government did it is signifi- 
 cant. No dole was given to British landowners 
 or farmers. On a small scale, and for the time 
 being, the Government did exactly what the 
 Russians are doing to-day — they took possession 
 of the land without compensation, and handed 
 it over to the people who were prepared to 
 cultivate it. 
 
 On a very much larger scale and permanently, 
 not for twelve months or *' the duration of the 
 war,*' the British people will have to get posses- 
 sion of the land, or the steady and mischievous 
 check the landowners have put upon our rural 
 development for the last century will become 
 
158 BRITAIN AFTER THE PEACE 
 
 a stranglehold that may ruin the country. Witli 
 a debt counted in thousands of millions, and 
 burdened with an enormous army on the back 
 of the taxpayer, which can only partially be 
 demobilized by industry, with dear food restricting 
 the purchasing power of the people, we simply 
 cannot afford to let our mediaeval land system 
 stand any longer in the way. To do so would 
 be not merely to relieve the rural landowner of 
 his duty to bear a share in the burdens imposed 
 on the nation by the war, but to hand over to 
 him in the last resort an enormous unearned 
 increment. Dear food means high rents, and dear 
 food we are certain to have for many a long day, 
 even at the best. I have very little doubt that 
 the method by which the allotments were obtained 
 will not be forgotten. Either by law or by 
 force, the land needed will be taken ; but it 
 makes a great deal of difference whether the 
 needed revolution in our land system takes 
 place ** in due form of law " or only after a reign 
 of disorder and violence. But this country is 
 not going to be ruined, no matter what happens ; 
 the men who volunteered in millions for this 
 terrible war are not the sort of people to sub- 
 mit to that. If the law of the land cannot find 
 an orderly way to prosperity for them, we shall 
 
THE PROBLEM OF THE LAND 159 
 
 have a revolution ; but if Parliament grasps 
 fully the urgent necessities of the case, it can, 
 I hope, accompHsh the revolutionary change by 
 peaceful methods. 
 
CHAPTER VI 
 
 THE PROBLEM OF DEVELOPMENT 
 
 Even after industry has absorbed as large a 
 quantity of labour as it is able to take up, the 
 nation will still be charged with the support of 
 an indefinite number of soldiers, certainly far 
 in excess of anything needed in time of peace. 
 We should not even exclude from our view the 
 possibility of not needing a standing army at 
 all ; for so great and incalculable will be the 
 changes brought about in Europe by the war 
 that armaments may become unnecessary, or 
 even, by international agreement, be prohibited. 
 The one certain result of the war is the bank- 
 ruptcy of most of the beUigerent Governments, 
 however that bankruptcy may be concealed by 
 more or less dexterous financial jugghng. That 
 this fact involves the most tremendous changes 
 and threatens with destruction any institution 
 whatsoever, except the fundamental work on 
 
 160 
 
THE PROBLEM OF DEVELOPMENT 161 
 
 which all the varied arrangements of human 
 life are based, that of extracting food and raw 
 materials from the earth and shaping them into 
 utihties by human skill, renders it unsafe to 
 assume the continued existence of any one 
 institution or custom superimposed upon them. 
 Doubtless many secondary activities and in- 
 stitutions will survive without fundamental 
 change, but I doubt whether any one can say 
 which will continue and which disappear. Armies 
 on anything like the pre-war scale may go with 
 many better things. 
 
 Let us assume that, after all the requirements 
 of industry have been met for the present, we 
 have a million men left to be provided for ; and 
 that, there being now no ammunition or new 
 weapons to buy, these can be fed, clothed, and 
 paid at a cost of three milhon pounds a week. 
 This means a charge on the Treasury of 
 £150,000,000 yearly, a serious matter for the 
 taxpayer, and one that will ensure his continued 
 interest in the problem of the undischarged 
 soldier. I have already said that the veteran 
 soldier of this war will not be forgotten, as those 
 who fought for their country at Balaclava and 
 Waterloo unhappily were. From the point of 
 view of the soldier himself idleness is an unsatis-? 
 
 IX 
 
162 BRITAIN AFTER THE PEACE 
 
 factory state of things, only tolerable as a tem- 
 porary expedient to avoid worse evils. I have 
 said that the war makes a great chasm in the 
 life of the men of this generation. Before the 
 war, they were placed, so to speak, on one side 
 of this great gap in their lives ; the war cuts 
 them off from all the purposes and pursuits, and 
 to a large extent from the very ideas of their 
 former lives ; thus bringing home a personal revo- 
 lution to each individual. But this revolution 
 is not completed with the close of the war ; equi- 
 librium, inevitably a new equilibrium, in the 
 individual as in the social life, is not established 
 until the men are again settled in some stable 
 civilian employment. Our million men may be 
 regarded as being placed on a temporary bridge 
 across the chasm, waiting until arrangements 
 have been completed to land them safely on the 
 other side. To find some rapid and orderly way 
 of doing this is just as urgent a national prob- 
 lem, just as great a justification for " emergency 
 legislation," as anything in the war itself. 
 Whether the future of the nation be great and 
 prosperous, or whether we decline to a third- 
 rate Power, may very easily depend upon whether 
 or not we have statesmanship or courage enough 
 to handle this matter boldly and wisely, or 
 
THE PROBLEM OF DEVELOPMENT 163 
 
 whether we allow the spirit of compromise 
 and respect for vested interests to rule in the 
 settlement. 
 
 Note that in the terms of the case these men 
 are those for whom it is impossible at present 
 to find employment at adequate wages through 
 the ordinary channels. We have to create em- 
 ployment for them, and this we can only do by 
 some comprehensive scheme of national develop- 
 ment, and development of a kind that will be 
 productive and result in a great increase of wealth. 
 Mainly, too, this wealth production must take 
 the form of things other than those already pro- 
 duced in abundance by our factories and mines. 
 The fundamental reasons why all the soldiers 
 cannot find prompt employment in industry 
 are precisely that the rise in the price of food 
 and the general impoverishment of the world 
 render it improbable that the demand for manu- 
 factures will be as great, much less greater, than 
 before the war, at least for some time ; that 
 even before the war manufacturing industry 
 found very little difficulty in keeping pace with 
 any demand upon it, indeed it often over-supplied 
 the market and gave us periodic depressions of 
 trade ; while, on the other hand, the war, by 
 drawing into industry everywhere and partly 
 
164 BRITAIN AFTER THE PEACE 
 
 training hundreds of thousands of new workers, 
 has revealed an altogether unprecedented power 
 of multiplying production. Our development, 
 then, must be a development, not of manufac- 
 turing industry, mainly, but of land. It will be 
 increased supplies of food and raw materials that 
 the world will want after the war. If we can 
 get plenty of raw materials, and increase the 
 buying power of the world for its secondary 
 wants, manufactures, by cheapening the cost 
 of its primary one, food, there will be no diffi- 
 culty in working up the raw materials to meet 
 any possible demand of the market. It is true 
 that as we progress in agricultural develop- 
 ment, we shall also tend to increase the demand 
 for manufactures. A large and prosperous rural 
 population will be buyers as well as sellers. Their 
 produce coming into the market will be exchanged 
 mainly for manufactures, and by cheapening 
 the cost of food will tend to free a larger portion 
 of the townsman's wages for other things. 
 
 The more boldly our people handle this matter 
 the better, and the first thing to do is to offer 
 any soldier who cares to apply for one the use 
 of a small-holding properly stocked and prepared, 
 with house and necessary outbuildings attached, 
 and with reasonable access to the market. This 
 
THE PROBLEM OF DEVELOPMENT 165 
 
 should apply to every soldier, no matter whether 
 he has had any previous experience on the land 
 or not. It should be offered also to wounded 
 or nerve-shaken men. The definite right of 
 accepting or rejecting this offer should be accorded 
 to those who have served their country, without 
 any reserve whatever. I have no doubt that if 
 such an offer were made it would be joyfully 
 accepted by many thousands of men, probably 
 by many hundreds of thousands. All who so 
 apply should then be put in a class by themselves, 
 and should be released from the army and placed 
 under civihan control, but required to devote 
 themselves to a special course of training designed 
 to fit them for the new way of life they have elected 
 to take up. For this purpose, proper courses 
 of study should be drawn up, land should be 
 taken for training-grounds near the encamp- 
 ments, and everything possible done to ensure 
 that both the practical and scientific sides of the 
 small-holder's work should be thoroughly under- 
 stood by the men before they are called upon to 
 start in earnest. Meantime, of course, the pupils 
 should be supplied with their regular army 
 rations, while their pay and family allowances 
 should continue as before. Such widows and 
 dependents of fallen soldiers as care to apply 
 
166 BRITAIN AFTER THE PEACE 
 
 should be offered the same opportunity, on the 
 understanding that as soon as adequate holdings 
 were supplied to them, any pensions to which 
 they may be entitled should cease or be commuted 
 into a moderate cash payment for initial expenses. 
 Coincidently with this period of training 
 should go on the vigorous preparation of the 
 holdings for those who require them. In places 
 near the great town markets and on land suitable 
 for market-garden culture, large areas of land 
 should be acquired, divided into holdings of 
 suitable sizes, and placed in order, with cottages 
 and everything needed by the expected tenants. 
 Roads, light railways, water, and perhaps elec- 
 trical power and light, should be laid on to every 
 estate, and convenient communal premises for 
 jam-making and dairy work built ; while the 
 co-operative societies should be given every 
 facility for establishing themselves in the new 
 communities about to spring up. All this could 
 not be done without a great supply of labour, 
 and incidentally a demand for many manufactured 
 articles, for iron, bricks, and various materials. 
 The labour required for all this should be ob- 
 tained in the same way as the industrialists 
 would, under this system, be compelled to obtain 
 any fresh workmen they needed. Notices could 
 
THE PROBLEM OF DEVELOPMENT 16T 
 
 be put up in the camps offering employment on 
 the new work to any soldiers who cared to take 
 their discharge for the purpose. Neither for 
 this sort of work nor for any other should the 
 rule be broken guaranteeing to the soldier his 
 absolute freedom of choice, so that the terms 
 offered would have to be at least a full equivalent 
 for army pay and allowances. But at adequate 
 rates of pay many more soldiers could be demo- 
 bilized this way, and put to really productive 
 work, the results of which would ultimately come 
 back to the taxpayer, instead of meaning nothing 
 but loss to him. 
 
 When the small-holdings were ready, and as 
 they were ready, they should be granted to the 
 soldiers on some arranged system. It might 
 be best to place first those men who already had 
 practical knowledge of the working of the land, 
 while certainly, so far as that was possible, each 
 man should have the option of having his holding 
 where he chose. ^ The ownership of the soil 
 should be retained by the State, unless, as might 
 
 I Perfect freedom of choice would not be practicable. 
 While the Government should undertake to provide as many 
 holdings as are applied for, it should buy only in large estates 
 which can be developed on a general plan, and should have 
 freedom to buy or refuse to buy as it chooses. 
 
168 BRITAIN AFTER THE PEACE 
 
 ^ 
 
 often be the case, the County Council, in whose 
 area an estate laid out for small-holders is located, 
 is willing to undertake the purchase of the land 
 and become responsible for its general oversight. 
 In that case, the State should lend the money 
 needed to the County Council at moderate interest, 
 reserving to itself a tax on the value of the land, 
 as will be explained later in this chapter. The 
 State or County Council should charge to the 
 tenants a rent equal to 5 per cent, interest on 
 the unimproved value of the land, reserving the 
 right to vary this annual charge from time to 
 time according to the fluctuations in the value 
 of the land. All improvements, whether made 
 by the previous landowner or by the State, 
 should, however, become the property of the 
 tenant from the moment he obtains possession. 
 This does not, of course, mean that the State 
 should make a present to the soldier of the money 
 spent in fitting up the holding. A reasonable 
 grant to him may indeed be made of part of the 
 cost ; but the improvements, including the cost 
 of buildings and the preparation of the land, 
 should be invoiced to him at a set price, and 
 paid for by a sinking fund, calculated to redeem 
 principal and interest over a term of years. Each 
 colony of discharged soldiers should be encouraged 
 
THE PROBLEM OF DEVELOPMENT 1G9 
 
 to form a tenants' association, to arrange, when 
 required, further temporary loans, which the 
 Government should always be ready to con- 
 sider on the credit of the associations ; but 
 after the first start off no tenant should be 
 allowed to obtain any further advance on his 
 own personal security or that of his holding. 
 
 There is another way in which we may look 
 at the question. So long as the individual 
 soldier remains in the army he is, we may assume, 
 an expense to the nation of three pounds a week ; 
 when he leaves and begins to earn money for 
 himself, the taxpayer is relieved of this burden. 
 His complete demobilization is pure gain to 
 the taxpayer. But even if it be impossible to find 
 fully profitable work for him on conditions 
 sufficiently attractive, something would at least 
 be saved to the taxpayer if, in return for his 
 keep, the soldier could be got to produce anything 
 at all. If it comes to maintaining a large number 
 of men unproductively or getting them to pro- 
 duce even a part of their keep, the latter is plainly 
 preferable, unless — and this is a vital point — 
 they are simply displacing some other workmen 
 who will in their turn have to be kept by the State. 
 After, then, as many men as possible have been 
 demobilized in the ways so far suggested, if we 
 
170 BRITAIN AFTER THE PEACE 
 
 still find a reserve of men on our hands for whom 
 we cannot find employment where they can 
 produce all their keep, it will be something to 
 the good to get them to produce, say, half of it. 
 If we can attract a number of men from the 
 army who are costing us, sa}^ ;£i, 000,000 a year, 
 and get them to produce something for the nation 
 worth £500,000, the taxpayer will be half a 
 million yearly to the good. 
 
 More especially will this be good policy when 
 the thing produced will ultimately be worth as 
 much as or more than the outlay, though, because 
 of the slow return to be expected, a private 
 trader is not likely to undertake the work. The 
 best subjects for development of this kind are 
 such things as reafforestation and the reclaiming 
 of waste lands and foreshores. If one were to 
 venture a prediction as to what thing was most 
 certain to rise in price during the next fifty years, 
 about as good a guess as could be made would 
 be timber. The world's supplies of timber are 
 steadily declining, while as population grows, 
 the demand for it is continually increasing. 
 This, taking into account the enormous extent 
 of the world's virgin forests, is a process that may 
 go on for a very long time without producing 
 any very striking effect. Obviously, however, 
 
THE PROBLEM OF DEVELOPMENT 171 
 
 it cannot last for ever without bringing us some 
 day to a serious shortage of timber. Until an 
 equilibrium is established between the number 
 of trees planted and the timber used annually, 
 just as there is on the whole an equilibrium 
 between the cotton or wheat grown and used, 
 the mere fact that a tree takes many years to 
 grow and these plants only one or a few, makes 
 no difterence in the ultimate result. An immediate 
 difference, however, is that no man can expect 
 to realize much himself on a crop which he will 
 hardly live to cut, so that it is hardly any one's 
 interest to grow trees. Yet, with our scanty 
 woods and large requirements, it is easy to see 
 that we may ere long have to pay very heavily 
 for our supplies ; while it seems certain that 
 any trees planted now will be of very great value 
 indeed when they grow to maturity. By plant- 
 ing a large quantity of trees, we should be build- 
 ing up a great national asset which it would be 
 only fair to leave to our children, to whom we 
 shall certainly bequeath a gigantic national debt. 
 In this case, probably, a well-thought-out scheme 
 would be ultimately, though of course not for 
 many years, remunerative, and should certainly 
 form part of any plan for the development of 
 the country. Again, however, any soldiers 
 
172 BRITAIN AFTER THE PEACE 
 
 demobilized for this work would have to be 
 dealt with on the same fair terms as in other 
 cases. Perfect freedom of choice would have 
 to be secured to the soldier, and the Development 
 Commission, or whoever undertook the task, 
 compelled to offer wages for the work sufficiently 
 attractive to induce the men to take their dis- 
 charge voluntarily. In this case, grants would 
 have to be made to the Commissioners for the 
 amount required yearly, and any immediate 
 relief coming to the taxpayer should be confined 
 to such a reduction in the rate of repayment of 
 the debt as might be justified by the steadily 
 increasing value of the national asset created. 
 The cutting and widening of canals, the making 
 of roads, bridges, and light railways in places 
 where such work, though beneficial, is not likely, 
 at least at first, to be fully remunerative, are 
 other forms of work by which, without entirely 
 delivering the taxpayer from the duty of keeping 
 the soldiers, the burden might be greatly light- 
 ened. In these cases, the way would be to 
 make free grants-in-aid to County Councils, on 
 condition that they undertook the work and did 
 it to the satisfaction of the Local Government 
 Board. There should be no dictation to the 
 Councils as to the labour they should employ, 
 
THE PROBLEM OF DEVELOPMENT 173 
 
 but as work of this character spread, the coun- 
 cillors or their contractors would inevitably be 
 compelled to draw upon the greatest reserve 
 of labour and to offer conditions that would 
 demobilize more soldiers. 
 
 Leaving out of account other schemes of 
 development which may suggest themselves to 
 the reader, and others again which probably 
 would occur to Governments anxious at all costs 
 to relieve the public finances of this legacy of 
 the war, it may be well now to take a survey 
 of the possible results of these proposals. We, of 
 course, do not know how many soldiers we 
 should really have to deal with after industry 
 was freely supplied. They might be so many 
 that, after every device had been tried, a con- 
 siderable, even a great, reserve remained over. 
 On the other hand, private industry might re- 
 quire so many men that the small-holding scheme 
 and the work of preparation for it would absorb 
 every available man in work fully remunerative. 
 Between these two extremes we might have a state 
 of things in which, while most of the men could be 
 employed in fully remunerative work, a number 
 would find employment only in development 
 work, to which the State would require to give 
 large grants-in-aid. The last two cases are alike 
 
174 BRITAIN AFTER THE PEACE 
 
 in this — either of them in itself completes the 
 revolutionary movement begmi by the war. The 
 men removed from their pre-war positions are 
 replaced in their post-war ones. The immediate 
 national crisis is over, and one can rest assured 
 that no feeling of injustice will remain. There 
 would be no excuse for, no likelihood of a general 
 upheaval or of anarchy in the land. I believe 
 such a state of things would be effective in 
 securing order in this country, whatever the 
 state of affairs existing abroad. Provided they 
 are fairly treated, and can live in comfort and 
 freedom meanwhile, the British people have too 
 strong a sense of law not to confine themselves 
 to legitimate means to expand their freedom 
 and improve the life of the nation. 
 
 I think it extremely likely, however, that 
 even after everything possible has been done 
 to provide employment for our people at home, 
 there may still be a reserve of men for whom no 
 work can be found here, who must either remain 
 idle or emigrate. After all, forty-five million 
 people is a very great number to maintain on 
 so small an area as that of the British Isles. Even 
 allowing for our great mineral wealth and our 
 maritime position, it is possibly more than the 
 most advantageous distribution of the world's 
 
THE PROBLEM OF DEVELOPMENT 175 
 
 population would allot to us. Other lands are 
 crying out for labour, and with the inevitable 
 rise in the prices of food and raw materials there 
 will be still better openings in the new countries, 
 where these things can be produced in abundance, 
 after the war than before. It would be narrow- 
 minded and in the long run fatal to do anything 
 to check the most advantageous distribution of 
 the population of the world possible ; and though 
 it is exceedingly desirable to provide for as many 
 people as can be maintained in prosperity here, 
 we should not attempt to do more. It is the 
 actual well-being of our own descendants, not 
 the country where they are called upon to live, 
 that should be our ultimate aim. We should 
 offer to the soldier not only a career, but the 
 widest possible choice of careers, and if he wishes 
 to emigrate do as much as possible to help him.^ 
 A well-considered scheme of assisted emigra- 
 tion should, therefore, accompany any plan of 
 
 I It is a curious fact that British people emigrate more 
 in good than in bad times. Thus, emigration was rapid in 
 1907, a prosperous year, and fell off in 1908 and 1909, two 
 years of depression. During the boom of 1910-14, emigration 
 was resumed at an extraordinary rate. The fact seems to 
 be that people emigrate when they can afford to pay their 
 passage, not when they are unemployed and have no money 
 for the purpose, 
 
176 BRITAIN AFTER THE PEACE 
 
 development adopted. Of course, this too should 
 be carried out without prejudice to the soldier's 
 absolute right to free choice. If this essential 
 were observed, however, the Government would 
 probably find the Dominions very willing to help 
 them by providing attractive openings or ensur- 
 ing employment to discharged soldiers. We on 
 our part would, of course, pay the fares, both 
 of the men and their families, and provide them 
 with such an outfit as would give them a fair 
 start in their life beyond the seas. 
 
 Even when these things were all carried out 
 we should still have a reserve, possibly a con- 
 siderable number of men, who would be attracted 
 by none of the proposals made. Possibly some 
 might actually prefer a military life with all its 
 dangers, while others might be too lazy to leave 
 the routine and security of the army in peace for 
 more strenuous and doubtful duties elsewhere. 
 The number would certainly be relatively small, 
 but it might readily leave us with a larger army 
 than we need, or even, if any arrangement for 
 international disarmament is come to at the 
 peace, will be entitled to maintain. If so, and 
 as long as we have men who want to stay in the 
 army, recruiting of all kinds should stop, until, 
 by death or superannuation, the nuniber i% 
 
THE PROBLEM OF DEVELOPMENT 177 
 
 reduced to the required amount. And wh'en 
 once we had ascertained by offering under fair 
 conditions every possible alternative to the men 
 that those remaining had no wish to become 
 anything else than soldiers, we should be per- 
 fectly justified in acting on that fact. After a 
 period of years, in which everything possible had 
 been done to find civilian employment for the 
 men, it would be quite fair — so it seems to me — 
 to demand from the remainder that, if advanced 
 in years, they should leave the army on such 
 pensions as were considered their due, or if still 
 young, re-enlist for a term of years to be followed 
 by retirement on the usual pension. Whether 
 or not, and if so, how far their places should then 
 be filled by further enlistments, would naturally 
 depend on the state of world politics at the time. 
 If such a programme were carried out, I claim 
 that the problem created by the war, the problem 
 of demobilization, would be substantially solved. 
 The nation would have got through its period of 
 revolution, and would be able to resume the 
 evolutionary methods of a time of peace. But, 
 as often happens in a case of fever, the system of 
 the body politic would have been incidentally 
 Cured of a good many chronic evils from which 
 it suffered in the old days before the war. That 
 
 12 
 
178 BRITAIN AFTER THE PEACE 
 
 cruel " tyranny of the country-side/' which has 
 kept the rural labourer of England little better 
 than the slave of the farmer, would be as dead as 
 chattel slavery itself. Given the choice of a 
 fair start as a small-holder or as a free emigrant, 
 the soldier would not return to labour on the 
 farm, except on very different conditions from 
 those which he left. The scheme gives a far 
 better guarantee than any minimum-wage clause 
 in a Corn Production Bill of fair conditions for 
 the British farm labourer. So, too, with the 
 town workman. As I have already said, I 
 regard any pledges given by Ministers for the 
 restoration of Trade Union regulations after the 
 war as worthless, if the army is to be discharged 
 wholesale on the labour market. These things 
 were won by Trade Unionism in the face of tre- 
 mendous difficulties, and can only be retained by 
 Unions in a strong enough position strategically 
 to enforce them. They are the outcome of collec- 
 tive bargaining between employers and employed, 
 by people who are in touch with and understand 
 the varying conditions of each trade and district. 
 The scales have hitherto been weighted heavily 
 against the men, but the method of arriving at 
 trade agreements is right enough where the 
 balance of power is reasonably equal. And as far 
 
THE PROBLEM OF DEVELOPMENT ItO 
 
 as they go, the measures here proposed will help 
 to equalize the conditions, for, under this arrange- 
 ment, the power of the Trade Unions should be 
 greater than it has ever been before. 
 
 During the war women have gained a further 
 footing in industry, and if this can be maintained 
 after the peace, another chronic evil of our 
 system will be to some extent removed. Women 
 have just as much right in industry or the pro- 
 fessions as men, and the narrowing of their oppor- 
 tunities for employment by custom or the Trade 
 Unionism of the Bar or the factory is a cruel 
 injustice to them. Many of these restrictions 
 have been broken down by the war, and if the 
 positions gained can be kept after it is over, 
 the scandalous underpayment of women's labour 
 will have a chance to be remedied. But this can 
 only be done without danger of a sort of sex war, 
 if men are not driven by hunger and despera- 
 tion to seek to oust the women who have taken 
 their places during the war. Both sexes have a 
 " right to work," and both are entitled to decent 
 wages. When society drives them to struggle 
 against one another for these elementary rights, 
 no doubt many evil passions will arise and many 
 narrow and illiberal views will be engendered ; 
 but the blame for these must rest mainly on the 
 
180 BRITAIN AFTER THE PEACE 
 
 social conditions which are the cause of them, 
 and they will only give way to more humane 
 and rational ideas when these social conditions 
 are replaced by better ones. 
 
 Lastly, this programme would go far to placing 
 British agriculture on lines natural to a populous 
 country, easily accessible by sea to foreign 
 supplies of wheat, but needing an abundant 
 supply of the more perishable foodstuffs, which 
 can be produced more readily by the small- 
 holder raising large quantities from a small 
 area. In so doing it would tend to adjust the 
 balance between the country and the town, and 
 do much to raise the physical standard of the 
 race, greatly injured, it is to be feared, by the 
 loss of so many of our strongest and bravest in 
 this terrible war. 
 
 The scheme as a whole, considered as an 
 expedient for dealing with the immediate crisis, 
 may be regarded as one for regulating the flow 
 of labour back to civil life in such a way as to 
 meet the legitimate demands of the labour 
 market. From the great reservoir of labour 
 confined in the army, industry can draw all the 
 supply it really needs, but no more than what 
 it needs. The fields of industry, in short, will 
 be fertilized, but not flooded. For the rest, 
 
THE PROBLEM OF DEVELOPMENT 181 
 
 and to make full use of the surplus which the 
 older industries cannot use, new fields of industry- 
 are opened and the volume of production extended 
 until the reservoir is at last emptied and the 
 dislocation of the war ended. Such a scheme 
 would in no way injure the honourable employer, 
 carrying on his business under fair conditions, 
 but it would effectually prevent the sweater and 
 the industrial tyrant from taking advantage of 
 the soldiers' necessities to reduce them to in- 
 dustrial slavery. Nay, to the good employer it 
 would probably come as a boon. Better than 
 any Trade Board regulations, it would compel 
 his less conscientious rivals to level their con- 
 ditions of employment up to his own ; while 
 by acting powerfully on what is likely to be a 
 most formidable obstacle to a revival of trade, 
 the exorbitant price of food, it would bring about 
 a growing demand for the manufactures he 
 produced. 
 
 And again, considering the scheme as a means 
 of deahng with the immediate problem, one 
 comes to think that the things it plans to do are 
 those which, in one way or another, by one 
 means or another, will be done not only here, but 
 throughout Europe after the peace. The Com- 
 mittee of Workmen and Soldiers — *• workers '* 
 
182 BRITAIN AFTER THE PEACE 
 
 we are told it should be translated — in Russia, 
 has essentially come into existence because of 
 the failure of the old regime to deal with the 
 crisis of war. But the combination of " workers 
 and soldiers '* is significant, for it is essentially 
 by the '' workers " including the women and 
 the soldiers, and according to their needs, that 
 the new order after the war must be shaped. 
 If the other Governments of Europe fail in the 
 crisis of peace, as Russia failed in that of war, 
 then, whether they are called by that name or 
 not, provisional governments of workers and 
 soldiers will certainly usui*p their places, and 
 rearrange the world. Where the Government 
 has the means, the courage, and the wisdom to 
 do the thing in an orderly manner, so much 
 the better ; in that case, the force behind the 
 scenes, that of the workers and soldiers, will 
 act peacefully through it. But when the Govern- 
 ment fails, either from lack of means or of will, 
 the new forces will take the matter out of its 
 hands, and practically the same readjustments will 
 be made by confiscation and violence. There 
 is an imperative necessity behind this thing, 
 common to every country that has before it 
 the problem of demobilization. No doubt the 
 pecuUar circumstances of each country modify 
 
THE PROBLEM OF DEVELOPMENT 183 
 
 the conditions greatly, but the circumstances 
 differ no more widely anywhere than in Russia 
 and the United Kingdom. And in each of these 
 two the answer is the same — ^the people must 
 get control of the land. Can we devise a more 
 orderly way of doing this than they are adopting 
 in Russia ? 
 
 Under the scheme here outlined it will be 
 necessary for the State or the County Councils 
 to acquire land in far greater quantities and far 
 more promptly than has hitherto been attempted. 
 It is really the same problem that confronted 
 the nation before the war ; the difference is not 
 in kind, but in degree. The two leading schools 
 of land reformers, those who wish to bring the 
 land under the control and ownership of the 
 nation and those who wish to appropriate the 
 land values created by the demands of the people, 
 have both been pressing the legislature for con- 
 cessions. Hitherto they have made only slow 
 progress, the Small Holding Act, on the one 
 hand, and the Land Valuation necessitated by 
 the Budget of 1909, constituting their greatest 
 successes. They were met, and will be on this 
 occasion, by the strenuous opposition of the 
 landed interest, and were backed up by national 
 support real enough, it is true, but not of a char- 
 
184 BRITAIN AFTER THE PEACE 
 
 acter such as occurs when a nation is faced by 
 the alternative of immediate disaster or drastic 
 action. The war has turned an urgent need for 
 steady progress into a revolutionary necessity. 
 We simply cannot afford either to maintain 
 millions of soldiers in idleness or to turn them 
 adrift in an overstocked labour market. We 
 must act, therefore, and act at once. 
 
 The circumstances are such, too, that we cannot 
 allow obstruction either from the conservative 
 force of landlordism or from the doctrinaire 
 objections of land reformers themselves. The 
 school of land reformers who supported State 
 purchase of the land were met by the single 
 taxers with the argument that every purchase 
 of land tended to raise its price, and that public 
 authorities buying land had always to pay 
 excessive prices for it. Obviously, the success of 
 every project for using land will depend very 
 largely on whether the price of it be excessive 
 or reasonable ; you could ruin any scheme, how- 
 ever good in itself, if the land required for it is 
 exorbitant in price. It is an absolute essential 
 of any scheme of land purchase that some work- 
 able method of obtaining the land required at a 
 reasonable cost should first be set up. Again, 
 it is no use buying land simply for doctrinaire 
 
THE PROBLEM OF DEVELOPMENT 185 
 
 reasons ; you must have a definite plan for 
 using the land. Communal ownership implies 
 communal organization and a strong pubUc 
 spirit, otherwise it will never work effectively. 
 To buy land anywhere and in any quantity 
 simply because a people ought to own its own 
 country is only a way to run up an enormous 
 debt without any guarantee of a return. As 
 against land purchase, then, among a people 
 who have no immediate thought-out use for the 
 land, the expedient of taking part or the whole 
 of the economic rent as taxation holds the field. 
 Leaving out of account the question of justice, 
 this is not a very creditable state of affairs, as the 
 fact that a nation has no definite idea of how to 
 use and develop any portion of its own land 
 indicates a very low standard of public spirit. 
 
 But even given a higher development of the 
 communal spirit, it would still be necessary to 
 have a ready method of preventing extortion 
 in buying land. The value of the land, and nothing 
 more than the value of the land, should always be 
 paid for it whenever it is taken over by a public 
 authority. To ensure this, incomparably the 
 best method that has yet been devised is the 
 taxation or rating of land values. You may pass 
 Acts of Parliament by the score, limiting to 
 
186 BRITAIN AFTER THE PEACE 
 
 reasonable dimensions the compensation to be 
 given to the seller when land is required for any 
 public purpose, without having any effect, except 
 to stimulate the ingenuity of lawyers in devising 
 means of circumventing the intentions of Parlia- 
 ment, unless you first impose a tax on the value 
 of the land, and so compel the owner, before 
 there is any prospect of having to sell, to place 
 a value of his own upon it. When once the 
 principle is established, that what the land is 
 worth for taxation purposes, that, neither more 
 nor less, is its worth in estimating compensation, 
 you can go on buying land as fast as you can 
 devise means of using it, without fear of being 
 imposed upon. 
 
 But the factious opposition to land purchase, 
 proceeding from the followers of Henry George, 
 is just as much to be opposed as would indis- 
 criminate land purchase, which would have the 
 effect of raising prices. The taxation of land 
 values would in itself solve none of the pro- 
 blems facing society either before or after the 
 war, though there are few whose solution would 
 not be greatly simplified by it. No machinery 
 whatever can act as a substitute for an alert 
 and enterprising public spirit, and when this 
 exists no mere doctrine of laisser /aire can 
 
THE PROBLEM OF DEVELOPMENT 187 
 
 prevent its finding expression. Obstacles put in 
 the way of State or communal enterprise are, 
 however well intended, merely obstacles to com- 
 munal freedom, and can only be enforced, if at 
 all, by the efforts of a strong reactionary vested 
 interest, not by a group of political theorists. 
 A public-spirited commune, rural or urban, 
 which sees its way to carry out any good scheme 
 by buying land 'at a reasonable price, will not 
 be content with merely rating the value of the 
 land, and will certainly ignore any political 
 notice-board " Sacred to private enterprise ; any 
 Corporation trespassing on this land will be 
 prosecuted, by order of the United Committee 
 for the Taxation of Land Values/' Once a real 
 and vigorous public spirit comes into existence, 
 all such artificial hindrances to its progress are 
 ignored — and rightly. 
 
 The truth is, that both what I may call the 
 architectural and the surgical schools of social 
 reformers are partly right and partly wrong. 
 The one school studies in a more or less realistic 
 manner the various injustices of society, and 
 aims to create some elaborate scheme of social 
 architecture which will deal with them all. The 
 plans and elevations of the New Jerusalem are 
 more or less carefully thought out, and presente4 
 
188 BRITAIN AFTER THE PEACE 
 
 to the public as a whole. The merit of this 
 method is that numberless evils are studied at 
 first hand, and the immense complexity of the 
 social problem to some extent understood. It 
 is impossible for such people to expect social 
 salvation from any one expedient, or to accept 
 a political war-cry like " Tariff Reform Means 
 Work For All,'' or " Free Trade is the Solution 
 of every Social Question." Of this school Mr. 
 Sidney Webb is the greatest living example. 
 The faults of this method, too exclusively followed, 
 however, are that it leads to a certain blindness 
 to what can really be done by individual reforms, 
 or rather to the extent to which individual 
 reforms may release new forces in society capable 
 of using them to great advantage. Thus what 
 I may call the surgical school has its justifi- 
 cation also. To this class of thinkers belonged 
 pre-eminently the late Henry George. The sur- 
 gical school tends to believe in the self-acting 
 virtue of some specific which, by removing a 
 canker from societ}^ will restore the health of 
 the body politic, conceived as something essen- 
 tially healthful and harmonious, but for one 
 flaw and its consequences. To such people, at 
 ordinary times, it is easy to imagine that taxation 
 of land values will provide remunerative worl< 
 
THE PROBLEM OF DEVELOPMENT 189 
 
 for every one, even for the man who, havmg 
 advanced far in Hfe while working and under- 
 standing only one trade, finds that some modern 
 invention has swept that trade out of existence 
 altogether, and left him in a world which has 
 no use for his services until he has been taught 
 to do some other kind of work. But even the 
 most enthusiastic single taxer can hardly imagine 
 that hundreds of thousands, perhaps millions, 
 of penniless soldiers can all be found employment 
 by the simple expedient of clapping a heavy duty 
 on land values. Organization must play its 
 part here, and organization on a gigantic scale. 
 We may hope, then, that the single taxer will 
 recognize that some definite social architecture 
 is now necessary, and that others will be got to 
 recognize the importance and present urgency 
 of his particular idea. And urgent it is. Consider 
 the conditions. We may require five or ten 
 million acres of land, which the State should be 
 free to take wherever it can get them. It would 
 never do to confine the buying powers of the 
 State to any particular piece of land ; we should 
 leave it free to accept or reject any offer, and if 
 no offer were made, to compel purchase wherever 
 it was thought most desirable. The conditions 
 of the time themselves will inevitably tend to 
 
190 BRITAIN AFTER THE PEACE 
 
 inflate rural land values, for even if foodstuffs 
 ever fall to pre-war values again, that will cer- 
 tainly not take place for some years yet. And if, 
 as I have shown reason to believe, the burden of 
 debt and the issue of large quantities of paper 
 money have the effect of bringing a permanent 
 change in money values, this will give the land- 
 owner an enormous advantage. Very far from 
 bearing, whatever the increase in his income 
 tax, his share in the costs of the war, the increased 
 world-prices of food and of freights will bring 
 him for long more than a proportionate rise in 
 rents ; while all the permanent fixed charges 
 on his estate and the interest on his mortgages 
 will become proportionately lighter. He will be 
 the recipient of the most gigantic ** profiteering " 
 gain of the war, especially if, without taking 
 thought to prevent it, we enlarge indefinitely the 
 market for his land by purchasing millions of 
 acres of it. 
 
 But far from making a profit by the war, it 
 is the duty of the landowner to bear his share 
 in the losses it has caused. We can ensure that 
 he will do this, in some measure at least, and 
 in proportion to his ability, if we insist upon 
 him giving a separate valuation of all his real 
 property, dividing the land value proper from 
 
THE PROBLEM OF DEVELOPMENT 191 
 
 the improvements that are upon it. The former 
 should include the natural prairie value of the 
 land, with full allowance for any advantage of 
 position due to proximity to a city, or other 
 cause, and all mineral, shooting or other rights 
 connected with it, whether used or unused. 
 Rights which it is considered possible may some 
 day become valuable should be included, and 
 the price at which the owner would be prepared 
 to sell their future possibilities for present cash. 
 The right of modifying by reduction or increase 
 the valuation on giving twelve months' notice 
 should be allowed to the landowner, and every 
 valuation made should be registered in the books 
 of the Treasury. On 5 per cent, of that 
 valuation all local rates and income or super- 
 tax due from the owner should be levied at the 
 current rate from year to year ; while at death 
 his estate should be charged death duties at 
 the rate indicated by the total amount of his 
 estate, on the land value declared. Of course, 
 this should not be extra to the usual taxes on 
 that part of his income arising from land values ; 
 while the rest of his income from improvements 
 or from investments other than in land would 
 be taxed on the present basis. 
 And on this valuation, so made, should be 
 
192 BRITAIN AFTER THE PEACE 
 
 based all compensation given for the purchase 
 of land, for the scheme of soldier colonization, 
 or for any other public purpose. The valuation 
 would be best left entirely to the landowner. 
 If he pleased, he should be quite at liberty to 
 give his land no value at all, and thus escape 
 taxation. If so, however, the State should take 
 him at his word, and all land on which no value 
 had been placed should ipso facto become the 
 property of the nation. Nor should, in the event 
 of purchase by the State or the local authority, 
 any compensation be given for shooting or other 
 secondary rights not allowed for in the valuation 
 and taxed accordingly ; so that everything for 
 which the landowner can claim compensation, 
 if his land comes to be taken over, should be 
 included. 
 
 So great has been the rise in foodstuffs that 
 I very much doubt whether even this scheme 
 would prevent the rural landowners from making 
 a profit out of the war. Certainly they would 
 lose much less than those with fixed incomes, who 
 find everything they buy dearer, while in no case 
 can they get more than their stipulated per- 
 centages on their capital. It would, however, 
 do something to improve matters. It would effec- 
 tually prevent landowners from " holding up " 
 
THE PROBLEM OF DEVELOPMENT 193 
 
 land and speculating for an increased price ; and 
 it would make clear the way for the acquisition 
 at fair prices of any land required by the State 
 to meet the national emergency. 
 
 As against any scheme for a flat rate, also, 
 this plan of imposing on land values the amounts 
 due under present taxation has the merit of 
 fitting in with the system of graduation between 
 large and small incomes. An estate worth 
 £100,000 would naturally subject its owner to 
 a higher rate of income tax, while it would make 
 him liable to super-tax and bring on his estate 
 a heavier proportionate death duty than one 
 worth only £10,000. Very small estates would 
 escape Imperial taxation altogether. To the 
 owners of small quantities of land, this scheme 
 would only involve a change in the method of 
 rating for local purposes. Indeed, except where 
 land is being held from its most productive use, 
 either for pleasure or for purposes of speculation, 
 the change would involve no increase of taxation 
 at all. Two things the plan renders impossible 
 once for all, both of which, injurious before the 
 war, will be intolerable in the national emergency 
 after it, the power to hold land out of use or 
 from its best use in the hope of exacting an 
 exorbitant price at some future time, and the 
 
 13 
 
194 BRITAIN AFTER THE PEACE 
 
 overcharging of the State or local authorities for 
 land required for public purposes. 
 
 Coupled with this scheme of taxation should 
 be one for deciding the legal rights of pre-emption 
 of the various public authorities. This right of 
 pre-emption should be granted to any authority, 
 from the Parish Council to the State, subject 
 only to the right of other authorities to levy 
 customary rates or taxes upon it. If the State 
 bought the land, it could, of course, be charged 
 with the same local rates as if held by private 
 persons ; but if it were taken over by a Parish 
 or County Council, the taxes due from the 
 authority to the nation should be based on the 
 ordinary rates of taxation on unearned incomes on 
 5 per cent, of the capital value of the land less 
 improvements. And on these terms the higher 
 authority, the County as against the Parish 
 Council, and the State as against the County 
 Council, should have the same right of pre- 
 emption that any public authority should have 
 over a private individual. In this way, a 
 complete method could be arrived at for the 
 rapid transference of land to the higher authority 
 so soon as the interests of the community called 
 for it. It is possible, though, in view of the 
 heavy rates of income and other taxes inevitable 
 
THE PROBLEM OF DEVELOPMENT 195 
 
 now, I think it extremely unlikely, that even 
 this arrangement might not always be effective 
 in preventing owners from holding back land 
 from its best use. No loophole should be left 
 for this practice ; for it is urgently necessary 
 that every advantage possible should be given 
 to the ordinary industries of the country to 
 recover rapidly from the effects of the war, and 
 to expand yet further. If it were found by 
 experience that land was still held back from its 
 best use, it would, however, be easy to impose 
 an adequate surtax on '' undeveloped " land to 
 put an end once for all to such anti-social 
 practices. 
 
 One other point remains to be considered. I 
 do not know how far such a change as is here 
 suggested could be included in any Money Bill 
 without incurring the charge of " tacking," and 
 thus bringing it within the power of the House 
 of Lords to hold the whole scheme up for three 
 sessions. If such a difficulty exists, the remedy 
 is simple. We have a land valuation, already 
 virtually complete, which puts it within the 
 power of the House of Commons alone to impose 
 a heavy flat rate tax on land values whenever 
 it chooses. The Bills embodying the proposals 
 here outlined should be introduced into the 
 
196 BRITAIN AFTER THE PEACE 
 
 1 
 
 Commons at once and submitted to the Lords. 
 If the Lords passed them, well and good, but 
 if they should be disposed to try another contest 
 with the popular House, an adequate flat rate 
 tax could be imposed in the Budget and passed 
 without their consent, which would have the 
 effect of placing plenty of land at the disposal 
 of those who had to work the colonization pro- 
 posals. The regular Bills could be sent up to 
 the Lords again and again until, by the pro- 
 vision of the Parliament Act, they became 
 law. Meantime, the great landlords of the 
 Upper House would have to face, not only 
 the criticism of the people, but of the smaller 
 landowners, w|ip would find themselves subjected 
 to a real increase of taxation, not merely of a 
 readjustment of the method in which they paid 
 their regular taxes, until the full plan was in 
 operation. 
 
CHAPTER VII 
 
 A NATIONAL WORKS DEPARTMENT 
 
 It will be seen that if the programme outlined 
 in the previous chapters be carried into effect 
 a double movement will take place in our 
 national life : on the one hand, we shall have 
 a resumption, on an increased or diminished 
 scale, according to the post-war demand for 
 manufactures, of the old industrialism under 
 individual management ; on the other, a new 
 national series of industries will develop, de- 
 signed in the first place to find work for the 
 vast army whom the ordinary demand cannot 
 absorb. A great home colonization scheme will 
 have come into existence, involving the creation 
 of a gigantic organization, and employing, at 
 least for a time, many thousands of people. 
 Though the total expense to the nation of creating 
 and carrying on this organization cannot 
 possibly be more than would be incurred in 
 
 197 
 
198 BRITAIN AFTER THE PEACE 
 
 a ver}/ few months of war, and though the greater 
 part of the money spent will be reproductive, 
 and not, as in the case of war expenditure, merely 
 loss, these will not, we may be sure, be taken as 
 adequate reasons for scrapping such a machine 
 so soon as its immediate purpose has been served. 
 The machinery created to meet an immediate 
 crisis will become an integral portion of our 
 national life, and indeed is likely to grow greater 
 the farther its original purpose recedes into the 
 background. 
 
 Nevertheless, we can partly foresee a moment 
 when it may seem that the work of the Develop- 
 ment Commission, or whatever its name may 
 be, will appear to have come to an end. The 
 acquisition of an adequate area for colonization 
 by such of the soldiers as avail themselves of 
 the offer of land, and the work of providing 
 the holdings with buildings, communications, 
 and other things necessary for the colonists, 
 will some day be complete. All the ex-soldiers 
 anxious to try this form of life will be settled, 
 and the great army enhsted for the war finally 
 demobilized. It might at first appear that this 
 will be the moment for the complete ending of 
 the scheme, and the dismissal of the thousands 
 of men engaged to carry it on. 
 
A NATIONAL WORKS DEPARTMENT 199 
 
 A moment's reflection, however, will suffice 
 to show that this would be merely to reproduce 
 the original difficulty, though on a less extensive 
 scale. We should again have a large army of 
 unemployed to deal with, and, moral considera- 
 tions apart, it is altogether unlikely that the 
 British democracy, having once discovered a 
 method for dealing with the unemployed problem 
 — and the scheme as a whole is really nothing 
 else — will consent to its recurrence. We shall 
 have recruited a national army of bricklayers 
 and carpenters, of ironworkers and navvies, 
 numbering many thousands, and have acquired 
 the plant and the organization necessary to put 
 them to work. The nation will be confronted, 
 one can foresee, with the problem of providing 
 more work for its new machine, and the question 
 remains, Is there any such work to be found ? 
 Can the machinery created to deal with the 
 unemployment caused by the war be made a 
 means for dealing with general unemployment, 
 however caused ? 
 
 Inevitably the special provisions made for 
 soldiers would, when once established, tend to 
 be applied in the cases of any citizens of the 
 country who could not be absorbed in ordinary 
 industry. The *' right to work or mainten- 
 
200 BRITAIN AFTER THE PEACE 
 
 ance/' so long a cardinal demand of the Labour 
 Movement, will, once the machinery for granting 
 it is created and firmly established, be applied 
 I universally, and the right to have access to 
 land on reasonable terms become a citizen's 
 and not merely a soldier's right. In this way 
 the extension of small-holdings and the machinery 
 for fitting them up for use will be continued, 
 though, of course, on a less extensive scale. 
 The machine, once organized, will, we may be 
 sure, tend to become a permanent Works 
 Department of our civil governments. 
 
 As such, its special duty will be to search 
 out those things which it is desirable or profitable 
 from a national point of view to do, but which 
 have been left undone by individual enterprise, 
 and also to do over again in an adequate manner 
 the many things which individualism has done 
 badly in the past. Its purpose in this will be 
 twofold — to get the desirable things done or 
 re-done, and to provide steady and profitable 
 emplo^^ment for the people. But it should not 
 confine itself to employing only or especially 
 those who have themselves failed to obtain work 
 in private industries. On the contrary, though 
 the amount of work undertaken by the Depart- 
 ment at any particular time would naturally 
 
A NATIONAL WORKS DEPARTMENT 201 
 
 bear relation to the amount of unemployment 
 then prevailing, the Department should hold 
 itself free to compete in the open market for 
 the best labour obtainable. In this Way it 
 would have the same influence on the general 
 state of the labour market as if it only engaged 
 men actual^ unemployed, while the results 
 from the point of view of the public service 
 would be much better. Its first object, how- 
 ever, would be clear — to provide a means whereby 
 the surplus labour of the community could be 
 turned to socially useful work, instead of being 
 lost as in the past. 
 
 And certainly there would be no lack of work 
 before it. It is astonishing how unevenly the 
 material gains of modern civilization have been 
 distributed throughout the country. The great 
 bulk of the people are housed little or no better 
 than their ancestors were centuries ago ; as soon 
 as you get out of urban or at least semi-urban 
 areas public water supplies, electric light and 
 power, the telephone, and other things essential 
 to modern life disappear altogether. Transport 
 facilities, at least for goods traffic, are in many 
 places little better than they were before the 
 invention of electric tramwa3^s and motor traction. 
 To a very great extent Britain is still an unde- 
 
202 BRITAIN AFTER THE PEACE 
 
 veloped, to perhaps a still greater extent a mis- 
 developed, land. Half the fitting of these islands 
 for civilized life is yet to be done, and, one is 
 tempted to say, most of the other half has to 
 be done over again. 
 
 But if, in accordance with the methods of 
 what I have called the " architectural " social 
 reformers, we have planned out a great con- 
 structive organization capable of undertaking this 
 work, we have also, by adopting the favourite 
 idea of the *' surgical " school, opened up the 
 way to give it freedom of action. In a previous 
 work ^ I examined at some length the propa- 
 ganda of the single taxers, and have very little 
 to add to what was said there. It would be 
 well, however, to restate some of the criticisms 
 there made. I believe no single taxer will now 
 maintain that the amount of money to be 
 realized by a tax of twenty shillings in the pound 
 on land values would suffice to provide, not 
 only for the necessary expenses of the State, 
 but for the enormous amount of interest on 
 debt we shall henceforth be compelled to pay. 
 The single taxer is, therefore, no longer an 
 opponent of income and other forms of direct 
 taxation, and his criticism of such imposts is, 
 for the present, almost purely academic. 
 » Modern Democracy, chap, iii. 
 
A NATIONAL WORKS DEPARTMENT 20S 
 
 It is important, however, to realize to what 
 an immense extent the land values of our 
 industrial districts are artificial, for the appli- 
 cation of our proposal to impose all existing 
 rates and taxes on land values, not on the income 
 actually received from land, would inevitably 
 remove this artificial element in present values. 
 It is hardly too much to say that this artificially 
 created value is the most formidable of all 
 obstacles' to the development of our industries 
 and the greatest single cause of overcrowding 
 and the bad housing of the working classes. 
 To me it seems that the whole building trade 
 of the country has been demoralized by the 
 dearness of land, and that even without any 
 building bye-laws and Government regulation of 
 any sort we should have had better housing 
 conditions in all our cities, with the possible 
 exception of London itself, if a regular system 
 of land values taxation had been set up when 
 the town populations began to expand under 
 the influence of the industrial resolutions. 
 
 The rent of land is a measure of its relative 
 scarcity, either natural or artificial. Monopoly 
 apart, when there is more land of a given quality 
 than can be used there is no rent. Thus, provided 
 Robinson Crusoe's island contained more first- 
 
204 BRITAIN AFTER THE PEACE 
 
 class land than he himself could cultivate, a 
 second arrival upon it would have no difficulty 
 in obtaining rent-free a plot on which to grow 
 his requirements. As more settlers arrived, 
 however, and all the best plots were taken up, 
 there would come a time when it would only 
 be possible to obtain inferior land, unless the 
 new-comers drove out the older residents or 
 came to some bargain with them for part of 
 their holdings. Assuming that no force were 
 employed, and that the right of a person actually 
 cultivating a patch of land were respected, a 
 new arrival would have the option either of 
 hiring from an older member of the community 
 a patch of the better land at a rent, or of 
 occupying rent-free one of the unappropriated, 
 inferior lots. Assuming that a new settler 
 adopts the former course, what rent can he be 
 compelled to pay ? If for a given expenditure 
 of labour a piece of the best land will produce 
 100 bushels of wheat, while the same labour 
 will only yield 75 bushels if applied to the second 
 quality, it is obvious that the new-comer will 
 get the same result for himself whether he settles 
 on a free plot of inferior land or hires at a rent 
 of 25 bushels one of the better ones. In either 
 case he will have as a result of his efforts a gain 
 
A NATIONAL WORKS DEPARTMENT 205 
 
 of 75 bushels. As the population continues to 
 increase, new arrivals will be driven to choose 
 between using still worse land or hiring ; and 
 the difference between what can be produced 
 on the best plots and that obtainable from 
 what land is still unoccupied will be greater 
 and greater. This difference is economic rent. 
 It is a measure of the scarcity of the supply 
 of land relative to the demand, and does not 
 arise at all until some real scarcity exists. 
 
 But artificial scarcity may be brought about 
 long before. Suppose, instead of being content 
 with enclosing so much of the land of his island 
 as he can effectively cultivate himself, Robinson 
 Crusoe, on the strength of his priority in arriving 
 on it, lays claim to the whole island and that 
 the next comer is simple enough to admit this 
 preposterous claim, and honest enough to act 
 up to his opinion. It is clear he cannot live 
 at all without coming to a bargain with the 
 first possessor, no matter how big the island 
 may be or how much good land it may contain. 
 And if Crusoe is stiff in his terms, he can get 
 any rent he likes, so long as he leaves his unfor- 
 tunate first tenant enough to keep him alive. 
 The latter may be quite as much a slave, as 
 the result of this " bargain," as man Friday 
 
206 BRITAIN AFTER THE PEACE 
 
 was in the story. Whatever rent is paid in this 
 case, however, is not economic but monopoly 
 rent. It has no justification whatever in the 
 law of rent as expounded by classical economists. 
 Let us now suppose that after a fair number 
 of colonists have settled on the island, each of 
 them making his own clothes as well as growing 
 his own food, a new arrival appears, who 
 prefers not to go in for cultivation at all, but 
 who brings with him machinery and skill in 
 making woollen clothing. He purposes to live 
 by exchanging this for the food products of 
 his neighbours, replacing the skin coats of the 
 inhabitants by more civilized garments. He, 
 too, will require land for his house and workshop, 
 and as no doubt the new clothing will be popular, 
 it is very likely he can afford to pay a good 
 rent for it rather than do without. If necessary, 
 perhaps, he might pay three or four times as 
 much as any agricultural worker could produce 
 from the same land. But the fact that he 
 could pay a heavier rent than others does not 
 mean that he will have to pay it. As long as 
 there is any land unappropriated and suitable 
 for his purpose, he need not pay any rent at 
 all, no matter how profitable his new business 
 may be. So when there is plenty of free land 
 
A NATIONAL WORKS DEPARTMENT 207 
 
 the position of the first manufacturer is exactly 
 the same as that of the first settler — he simply 
 places his factory where he likes ; and the fact 
 that he may produce ten or a hundred times 
 as much wealth as a farmer could on the same 
 site has nothing to do with the matter. 
 
 But how if the land is under monopoly ? 
 If our manufacturer finds Crusoe owner of his 
 island and a society all agreed to pay him rent 
 for their holdings ? Then, indeed, the intro- 
 duction of this new and more rapid way of 
 producing wealth is a great opportunity for 
 the lucky man in possession. The new man 
 can afford to pay far more than any one else, 
 and will do so rather than go without a factory 
 site altogether. Theoretically, he can be com- 
 pelled to pay as rent anything over what will 
 give him a bare living. Probably, therefore, 
 our Crusoe drives a hard bargain with him ; 
 he gets a similar plot of land to other people, 
 and pays, say, ten times as much for it. But 
 this extra price is not economic rent ; it is 
 due to land monopoly. 
 
 To turn from the theory of rent to its practical 
 working. I am convinced that all the money paid 
 for the freehold of sites or engaged to be paid 
 for ground rents in England and feu duties in 
 
208 BRITAIN AFTER THE PEACE 
 
 Scotland over and above what would be paid for 
 land of similar quality by the farmer is monopoly 
 rent of this kind, when, as is usually the case, 
 the land in question is at the margin, not near 
 the centre of a town. There is always far more 
 land suitable for building sites round the borders 
 of a town than can be taken up by the builders, 
 however cheap it may be. Of course, the 
 larger the population of a town, the larger is 
 the area towards the end of the tramway routes 
 and within a few minutes' walk from them. 
 Generally speaking, all or nearly all of this 
 land is equally suitable for building ; and 
 except in the case of a very large town, indeed, 
 possibly except in that of London, the area 
 so available will be as great as or greater than 
 that covered by the town itself. Unless, 
 therefore, the town doubles in population in 
 the course of the year, the easily accessible 
 building land around it cannot all be taken 
 up by the builders, even if they get the land 
 for nothing, unless they allow much more space 
 to each house than they have previously done. 
 
 But few towns increase in population at a 
 greater rate than 2 or 3 per cent, per 
 annum, while the extension of electric tramways 
 and the general improvement in locomotion 
 
A NATIONAL WORKS DEPARTMENT 209 
 
 steadily ripen for building purposes quantities 
 of land far in excess of any possible increase 
 of demand due merely to growth of population. 
 If the demand for new houses were the only 
 one to be considered, I am convinced that the 
 builders would be economically in the same 
 position as the early comers on a fertile island 
 — ^monopoly apart, they need pay nothing for 
 their land, because there would be always far 
 more suitable sites than they could possibly 
 take up. Of course, however, there is another 
 demand, that of the farmer. If the landowner 
 cannot get a better price from the builder, he 
 can always let his land as a farm. This fact 
 prevents the possibility, even under conditions 
 of absolute freedom, of builders getting land 
 for nothing ; but given such conditions, they 
 should get it for the same price as other people 
 using land of equal fertility, and equally well 
 placed, for any other purpose. 
 
 This means that the true economic value 
 of building land at the margin of towns — that 
 is to say, at the time most residential estates 
 are laid out — is the agricultural value, neither 
 more nor less. Probably there is nothing except 
 land where it is possible to base the price sys- 
 tematically on what the customer proposes to do 
 
 14 
 
210 BRITAIN AFTER THE PEACE 
 
 with the commodity bought. This can never 
 be done under free competition, but under a 
 system of unrestricted private ownership of 
 land it is always possible, whenever a customer, 
 by reason of the more profitable use to which 
 he intends to put it, can afford to pay an extra 
 price for land, to get more from him than from 
 others. 
 
 But as soon as we place all existing rates and 
 taxes, as far as they fall on land at all, on land 
 values, not on the income actually derived 
 from land at the time, all such distinctions will 
 disappear. There will then virtually be only 
 one price for any land of a given fertility and 
 a given convenience in position, to whatever 
 use the buyer or hirer may intend to put it. 
 And that price, as with everything else, will 
 be the amount the " marginal buyer,'' the buyer 
 to whom the land is least valuable, can afford 
 to give for it rather than go without. In this 
 case the " marginal buyer " is the farmer. He 
 will be willing to take up all the land at the 
 margin of our towns at a rent determined in 
 the last resort by the amount of money he can 
 obtain for the produce it will yield in competi- 
 tion with similar produce imported from abroad. 
 
 The , reform in taxation already proposed 
 
A NATIONAL WORKS DEPARTMENT 211 
 
 would revolutionize the conditions of the urban 
 and sub-urban building trades. It means that 
 land, instead of being normally one of the most 
 expensive of the builder's raw materials, will 
 be one of the cheapest, that, indeed, its cost 
 will be almost negligible in the erection of a 
 house. The industrial towns of England and 
 Scotland have been built under the ever-present 
 influence of two evil things, a bad tradition 
 surviving from conditions that have long since 
 passed away, and an artificial inflation of land 
 values. No doubt in the days when towns had 
 to be walled for defensive reasons it was neces- 
 sary to crowd houses together and economize 
 room as far as possible ; while for centuries 
 after walls had ceased to be necessary, but when 
 every one who could not afford a carriage had 
 to walk to and from his daily work, a con- 
 siderable degree of crowding was inevitable. 
 These alone, perhaps, were enough to impose 
 on the building trades a tradition of economy 
 in the use of land, which tradition would be 
 likely to persist long after its original causes 
 passed away. Most people would probably be 
 able to show houses built in a manner natural 
 enough in the centre of a great city at a 
 time v/hen there were no tramways or suburban 
 
212 BRITAIN AFTER THE PEACE 
 
 railways, but strangely inappropriate when one 
 considers the circumstances under which they 
 actually were built. Terrace houses, with base- 
 ments and three or four stories, with only one 
 or two rooms to a floor, and narrow inconvenient 
 staircases, were often built in Early Victorian 
 days on land which must at that time have been 
 cheap enough. I suppose to the builders of 
 those days and to their middle-class customers 
 such houses looked more imposing, more 
 *' London-like " than lower and more conve- 
 nient buildings on wider sites. Even in out- 
 of-the-way villages you can find crowded slums 
 where it is hardly conceivable that any con- 
 siderable economy can have been effected by 
 crowding the rows of cottages so closely 
 together ; so that I suppose a tradition, estab- 
 lished originally by the necessities of a few 
 walled towns long ago, and persisting, by reason 
 of the difficulty of locomotion, in London at 
 least, for a long time after, might have done 
 harm enough even under a better land system. 
 The instinctive adherence of people to anything 
 established, the influence of use and wont, is 
 no doubt a valuable social quality in its way, 
 but its effects are often exasperating. 
 And I suppose the builders would soon have 
 
A NATIONAL WORKS DEPARTMENT 213 
 
 broken through the influence of tradition, of 
 their unhappy tendency to economize that one 
 of their raw materials with which it was par- 
 ticularly important they should be as lavish 
 as possible — land, if they could have got the 
 land at true economic, not monopoly, prices. 
 Naturally, if a man builds a house to let or 
 to sell he wants to make it as attractive as 
 possible for the money he spends on it. He 
 has to buy bricks, slates, and timber, and to 
 pay plumbers, painters, and decorators, as well 
 as to buy the site on which the house is to 
 stand. If he can make a better show by painting 
 the house daintily at a moderate cost, or by 
 devoting a rather larger proportion of his money 
 to architectural ornaments, he will do so. 
 Like any other tradesman, he is out to attract 
 customers, and to attract them at the least 
 cost to himself. If any one of his necessary 
 raw materials is very cheap, and he is very 
 much more likely to dispose of his house by 
 being a little lavish in its use, he will act 
 accordingly ; while where any improvement in 
 material or design is costly he will be cautious 
 and thrifty. As time goes on, a general method 
 of building will be established. Houses will be 
 planne4 so as to require the smallest possible 
 
214 BRITAIN AFTER THE PEACE 
 
 amount of the more expensive materials, and 
 to substitute where possible cheaper ones. The 
 whole tradition, practice, and ideas of the trade 
 will tend to be coloured by the relative prices 
 of bricks and stone or slates and tiles, of wood- 
 work and plaster. Each young builder will be 
 trained in the tradition thus established, and 
 any new ideas he may bring to his work will 
 be influenced by the same conditions of cost 
 as have been responsible for forming the tradition 
 itself. He may have many ideas, but the 
 conditions of the market will only allow those 
 of them to be carried out which can be done 
 at a reasonable cost. Any improvement that 
 involves the buying of expensive materials will 
 be suppressed. 
 
 Now the whole building trade in towns has 
 been formed and developed under the influence 
 of dear land. The one attraction which any 
 one building a house to let or sell to people of 
 small or moderate means could not afford to 
 offer was space, floor space, garden ground or 
 yard space. For a few additional yards, espe- 
 cially in breadth, he would have to pay, even 
 at the margin of a town,^ as much as a farmer 
 
 ' Or far into the country, for that matter. I know of 
 |)uilding land quoted at five shillings a square yard, fourteen 
 
A NATIONAL WORKS DEPARTMENT 215 
 
 would pay for an acre. Naturally, as a busi- 
 ness man, his instinct will be to economize 
 such a costly building material, and to offer 
 such attractions as he can afford in the shape 
 of cheap decorations in paint or plaster, or seek 
 custom by calHng his productions by pre- 
 tentious names, like '' The Gables," " The 
 Chesters," or '' Balmoral," which cost nothing 
 at all. But the most vital need of all in 
 a house in which civilized people have to 
 live is adequate space ; if that is not granted, 
 no subsequent ingenuity can make up for 
 the defect. Within the house, dear land means 
 cramped rooms, narrow passages, steep stair- 
 cases, and dark closets ; without, it means no 
 garden or children's playground, Httle yard 
 space, and a mean frontage. And in just such 
 houses it is notorious the great majority of the 
 British people have to live. Whether, as in York- 
 shire, they are crowded together in '* back- 
 to-back " houses, or, as in Scotland, they are 
 piled upon the top of one another in dismal flats, 
 everywhere we see the extremity of the need 
 for more room, and the enormous difference 
 that would have been made if the builders had 
 
 miles from the nearest town ! I suppose this was abou^ 
 fifty times its true economic value. 
 
216 BRITAIN AFTER THE PEACE 
 
 had a cheap supply of the first and most 
 important of their raw materials — land. 
 
 But even if land were cheapened to-morrow, 
 so great is the influence of a strongly established 
 tradition that it would probably be a long time 
 before the speculative builder would realize the 
 extent of his opportunity, and longer still before 
 the vast mass of badly planned houses would 
 be pulled down and better ones substituted. 
 Here, then, is one great work which lies open 
 to the National " Works Department," the 
 creation of which we advocate — the systematic 
 reconstruction of our cities and towns in such 
 a way that they may be worthy habitations 
 for a great nation. 
 
 For the proposed method of levying taxes 
 would inevitably bring down building land to 
 a price that would render all undue parsimony 
 in its use needless. With a tax on unearned 
 incomes, never less than five shillings in the 
 pound, and rates and death duties to be taken 
 into consideration, no landowner could afford 
 to place on his land a higher value than he 
 was actually receiving in the form of rent for 
 it. Speculation in land with a view to possible 
 future increases in its value would cease, and 
 lan4 would be obtainable anywhere and for 
 
A NATIONAL WORKS DEPARTMENT 217 
 
 any purpose at its true economic value. What- 
 ever might be said against such a sudden and 
 drastic way of deaUng with an ancient abuse 
 before the war, no reasonable objection can be 
 taken now. Vested interests, especially those 
 of the small man, have had to give way every- 
 where before the national emergency. The 
 small man has had no sacred vested interest 
 in his " one-man business," in his liberty, or 
 even his life during these first years of the national 
 emergency ; the rich man should have none 
 while the emergency continues. And the emer- 
 gency does not end with the coming of peace ; 
 it only ends when the British people are restored 
 again to some regular and peaceful way of living, 
 only then will the revolution begun in 1914 be 
 ended, and the necessity for " emergency legis- 
 lation " cease. 
 
 It is not only the small man that would gain 
 by the removal of artificial valuations on land. 
 The development of industry, which will be 
 of such importance in the immediate future, 
 would have a far better chance under the new 
 conditions. It is not only the house-builder 
 who, on buying land at the margin of towns, 
 is charged for it a price far in excess of that 
 required from the farrner. A very large pro- 
 
218 BRITAIN AFTER THE PEACE 
 
 portion of our factories are erected on ground 
 outside the congested centres of great cities, 
 where there is no real scarcity of space. Yet 
 certainly, even under such conditions, there are 
 generally two prices for the same land, a lower 
 one for the farmer, and a far higher one for the 
 industrialist. Under the new conditions, busi- 
 ness men would find this difficulty gone, and 
 they would be able to hire or buy land at rates 
 based on the rent which a farmer could afford 
 to pay for the same accommodation. If the 
 development of home and foreign trade renders 
 an extension of British manufactures possible, 
 it would be very much easier to meet the growth 
 of demand in this way, to the general benefit 
 of the nation as well as the manufacturer. 
 
 It may be well to say something by way of 
 hint as to the method on which the reconstruc- 
 tion of our industrial districts should be carried 
 out. The walls or boundaries of a mediaeval 
 town probably generally enclosed a sufficient 
 area for the population at the time they were 
 built, but as the towns grew the people certainly 
 tended to be inconveniently crowded together. 
 People came to acquiesce in a certain amount 
 of crowding as an inevitable thing in town life. 
 Jo a certain extent it actually was necessary 
 
A NATIONAL WORKS DEPARTMENT 219 
 
 for long after, as long at least as people who 
 could not afford to own or hire a carriage were 
 compelled to walk to their daily work. The 
 evil was greatly increased by reason of the 
 dearness of land in the immediate outskirts of 
 the town, the necessities of the population 
 under the monopolist conditions set up by our 
 land system enabling the suburban landowners 
 to exact an artificial price from builders. The 
 development of electric traction has reduced 
 the first hindrance to progress to a minimum, 
 and the heavy taxation of land values would 
 promptly abolish the other. I think London is 
 the only city large enough to render any crowding 
 together of the people necessary under modern 
 conditions. Even in the largest provincial cities 
 a twopenny tram fare and a short journey will 
 take you into the open country. This is the 
 fundamental modern condition to be remembered 
 m town planning. The area over which it is 
 feasible for a town population of, say, 500,000 
 to spread itself is four times at least as great 
 as was the case thirty years ago. The plan 
 to be pursued is to cover first with houses of 
 the proper kind all that land which under a 
 natural distribution of the population would 
 already be built upon, accompanying the develop- 
 
220 BRITAIN AFTER THE PEACE 
 
 ment with an adequate extension of the town*s 
 tramway system. The certain effect of this 
 would be to bring down rents within the present 
 town, and to compel the landowners to reduce 
 the valuations on which they elected to pay 
 rates and taxes. This artificial element in the 
 valuation having disappeared, the public authority 
 could then safely buy up the overcrowded parts 
 of the old town, pull down the houses where 
 necessary, and start to rebuild as many new ones 
 as were thought desirable in their places. The 
 lesson of the success attending the allotment 
 experiment of 1917 should not be lost. The 
 townsman has obtained a new interest and a 
 new experience. He, no more than his comrade 
 in the country, needs to be dependent for his 
 vegetables on the middleman and the profiteer, 
 but can do something to ensure that some of 
 his food, at any rate, shall be obtained at reason- 
 able cost. 
 
 There remains the case of London, and I must 
 confess that the problem of such an enormous 
 aggregation of people seems to me almost insuper- 
 able. Millions of people must either be crowded 
 together within a narrow area in London, or 
 else spend a very considerable amount of time 
 and money in travelling to and from work, every 
 
A NATIONAL WORKS DEPARTMENT 221 
 
 day, and there, also, the effective taxation of 
 land values would lighten the burden by bringing 
 down suburban, and ultimately all rents ; but 
 as long as London is such an enormous size, 
 anything that can be done in the way proposed 
 would only mitigate the evil. Of London one 
 is inclined to say : 
 
 'Tis the last judgment's fire must cure this place, 
 Calcine its clods and set its prisoners free. 
 
 Indirectly, however, consequences might readily 
 follow from the programme outlined above 
 which would redeem even London. The problem 
 is one of size, of growth beyond the power of 
 management. If forces are set at work to 
 lessen London, to distribute its population over 
 other areas, these forces might in a few genera- 
 tions make even of London a city where there 
 is no overcrowding. 
 
 " They shall beat their swords into plough- 
 shares and their spears into pruning hooks." 
 The words of the Hebrew poet come back to 
 me as I think of the energies of this vast army, 
 mobilized for destruction and war, turning its 
 energies onto the constructive work of peace. 
 Many more things than are here suggested it 
 would be within its power to do — mine are only 
 
222 BRITAIN AFTER THE PEACE 
 
 suggestions as to some of the means which, 
 given freedom and resolute goodwill, might 
 afford a beginning. Possibly the reader can 
 furnish additions of his own, but at least I claim 
 to have shown that the terrible crisis which 
 the war must bring upon the nation need not 
 necessarily begin in injustice to the soldier and 
 end in social anarchy, but can be used to lay 
 the foundations of a higher social order. 
 
 I have followed so far the suggestions in politics 
 of a single clue. Starting off with a proposal 
 for dealing out simple justice to the returned 
 soldier, I have dealt merely with what seemed 
 to me the best method in which the State could 
 carry out with least loss to itself the imperative 
 duty imposed upon it by the Great War. To 
 what extent the State should delegate its duties 
 to subordinate authorities has not been seriously 
 discussed, and any allusions to the reactions of 
 the whole scheme on the voluntary agencies of 
 society have been only incidental. And even 
 the duties of the State have been dealt with 
 from one aspect only. I have left entirely un- 
 touched the question of the retention and develop- 
 ment of functions such as the control of the 
 
A NATIONAL WORKS DEPARTMENT 223 
 
 railways, etc., taken over temporarily by the 
 State under pressure of the war emergency. 
 These matters have been fully discussed already, 
 and I have no expert knowledge that would 
 enable me to add to or criticize effectively 
 anything already written on such subjects. 
 
 Important, and even vital, as it is, however, 
 that the State should give a good lead in dealing 
 with the problems of the peace, the reconstruction 
 of society must ever be the work, not merely, 
 or even mainly, of the State, but of the people 
 as a whole. Every important poHtical reform 
 sets in motion new social forces, many of them 
 perhaps not anticipated, and often not at all 
 to the taste of its authors ; and the initiation 
 of such a scheme as is here set forth would have 
 far-reaching indirect effects, many of which it 
 is impossible to foresee. 
 
 The war, so it seems to me, will give added 
 force to two apparently contradictory move- 
 ments already evident in the world before its 
 outbreak. Throughout politics and industry 
 we see tendencies almost equally marked 
 towards centralization and towards devolution. 
 The "big business" becomes bigger year by 
 year ; it tends to become a '* combine " or 
 trust extending over a whole district or country ; 
 
224 BRITAIN AFTER THE PEACE 
 
 finally it overleaps national boundaries, and the 
 control of the more highly developed industries 
 falls into the hands of international groups of 
 capitalists. The city State becomes absorbed 
 in the nation, and the nation itself merely a 
 member of some great Empire State of conti- 
 nental dimensions. The Imperial State, how- 
 ever, is no logical stopping-place, and we see 
 already in the International Postal Union and 
 other modern developments the germs of the 
 world State of the future. 
 
 Coincidently with this centralization, however, 
 goes on an equally marked tendency for national 
 and local particularism. Nowhere is this more 
 clearly marked than within the British Empire 
 itself. Imperiahsm seems at first sight to be 
 the negation of nationality ; but nowhere have 
 new and vivid national types been evolved 
 more rapidly than in the self-governing Dominions. 
 Within the United Kingdom the national spirit 
 of Ireland, Scotland, and Wales grows stronger 
 than ever ; while the conscious individual life 
 of the cities and towns increases day by day. 
 I shall deal again freely with this in the con- 
 cluding chapter of this book ; here it is only 
 necessary to recognize that such a great extension 
 of the functions of the State as is suggested in 
 
A NATIONAL WORKS DEPARTMENT 225 
 
 this book will probably emphasize the general 
 tendency to '' devolution/' and that while I have 
 treated for the sake of simplicity the whole scheme 
 as a direct work of the Central State, it would 
 probably largely be executed through the media 
 of national parliaments and local authorities 
 within their areas. In this the rising national 
 and civic spirits will be aided by the practical 
 necessity of distributing the work of government, 
 already rapidly outgrowing the possibility of 
 centralized control, to a greater extent among 
 other agencies. 
 
 More important will be the effect on the ten- 
 dencies to centralization and decentralization of 
 industry and agriculture. Obviously the scheme 
 begins by the creation of a great State industrial 
 undertaking ; while it implies, on the other 
 hand, the originating of a large number of " one- 
 man businesses," at least in agriculture. Already 
 in Mr. Malcolm Sparkes's scheme for the building 
 trade, not to speak of the general tendency to 
 " amalgamation " both among employers and 
 employed, we see the drift of thought and prac- 
 tice in the older industrialism. The conditions 
 set up by the establishment alongside of existing 
 industries of the new order should, I think, 
 tend on the whole to emphasize this tendency, 
 
 15 
 
22G BRITAIN AFTER THE PEACE 
 
 The relief to the competitive struggle for employ- 
 ment caused by the diversion of so many men 
 from the labour market will greatly strengthen 
 the Trade Unions. They and the Co-operative 
 Societies have greatly increased their member- 
 ship during the war, and should be able, unless 
 swamped by an unmanageable influx of discharged 
 soldiers, to bring all the available labour supply 
 into their ranks. Without entering further into 
 the proposals made for reorganizing trade, then, 
 it is safe to say they will have a fair chance to 
 succeed, and will stand or fall on their own merits 
 alone. 
 
 More interesting to me, because less generally 
 considered, is the probable effect of establishing 
 great colonies of soldiers on the land, a very 
 large part, and possibly the majority, of whom 
 have been brought up in the town. Hitherto 
 large multitudes of countrymen have drifted to 
 the towns, but steady as the influx has been 
 for generations, at no moment have the new 
 arrivals formed more than a small percentage 
 of the town population. The new-comers are 
 soon " citified," and adopt all the ways and ideas 
 of their new associates, without making any great 
 impression on the mass of which they soon 
 become an undistinguishable part. The com- 
 
A NATIONAL WORKS DEPARTMENT 227 
 
 paratively small migration that goes on from 
 the town to the country produces only a surface 
 effect. The townsman brings the latest popular 
 song, he teaches the countryman town manners, 
 and perhaps to some extent vulgarizes his dialect, 
 but he does not influence his agricultural methods. 
 For he, too, is in a hopeless minority ; only when 
 he is present in appreciable numbers will he bring 
 to the innate conservatism of rural life the 
 initiative and relative independence of precedent 
 of modern industry. But if the scheme out- 
 lined in the previous chapters were carried out, 
 for the first time in history a large rural popula- 
 tion would start off almost free from the hampering 
 traditions of the country. No doubt they would 
 make numberless mistakes, and would afford a 
 good deal of amusement to their more conser- 
 vative neighbours, but they would not always 
 be wrong. They would be more open to the 
 suggestions of modern science, and far less 
 willing to stick to an old-fashioned method of 
 doing a thing after a better had been found out. 
 They would be intolerant of inconveniences too 
 patiently submitted to by generations of country- 
 men. Their wives would resent having to go 
 out on a cold morning to wait until the village 
 pump was thawed, and then stand awaiting their 
 
228 BRITAIN AFTER THE PEACE 
 
 turn to obtain a pail of water. No doubt the 
 soldiers have had plenty of experience in digging 
 trenches, but that would not prevent most of 
 them from being willing to try a good machine 
 as soon as one is invented to do the work of 
 trenching gardens. They would be less indi- 
 vidualistic, more open to co-operation, than the 
 older agriculturists. Any one reading what 
 Kropotkin has written about the culture marai- 
 chere near Paris may have some idea of the 
 possibilities of cultivation by town-bred men 
 working for a series of years in sufficiently close 
 contact with one another for ideas to spread, 
 even when the workers have little scientific 
 knowledge to guide them at the start. ^ 
 
 Our industrial system has given great oppor- 
 tunities to the able initiator who invents or 
 applies some new and important thing ; it has 
 given but little encouragement to the thousands 
 of minor initiators, the sum of whose discoveries 
 and improvements is equally important. The 
 small culture of Paris shows what can be done 
 without special scientific knowledge, without 
 any assistance from great inventors, under a 
 system that gives full play to the initiative of 
 thousands of ordinary people, who bring, not 
 * See Fields, Factories, and Workshops, chap. iii. 
 
A NATIONAL WORKS DEPARTMENT 229 
 
 genius, but practical good sense, freedom to 
 experiment, and interest in their work, to their 
 task. The conditions set up by the scheme 
 here suggested should bring such an opportunity 
 to thousands of our people, to the great gain 
 of the nation as a whole. 
 
 Very likely in the long winter months the 
 small-holder will find time hanging heavily on 
 his hands. Anything he can learn then, when 
 the holding is for a time making few urgent 
 calls upon him, will be pure gain. To his hand, 
 when the land is fully developed, will be water 
 and electric power, in his mind the memory of 
 old processes of work carried on before the war. 
 Need he remain idle during most of the long 
 winter days ? or can he not apply his hand, 
 by the aid of some convenient and cheap machine 
 driven by this power, to making some of the 
 things he used to do before the war ? If he does, 
 may not he, a new craftsman, aided by suit- 
 able machinery, be an effective competitor with 
 the great industry which long ago drove our 
 craftsmen, working without mechanical power, 
 from the field ? If so, and a demand arises 
 for convenient power-driven tools for lightening 
 the heavier burdens of the small-holder, and for 
 enabling him to turn his winter hours to profit- 
 
280 BRITAIN AFTER THE PEACE 
 
 able account, we may be sure they will not long 
 be lacking. Modern science and ingenuity will 
 soon invent them, and a great part of the 
 concentrated energies of the city will be spread 
 over the country. 
 
 For I have long been of opinion that the use 
 of electric power, which can be produced in 
 quantity in one place and supplied to great dis- 
 tances at a small cost, must ere long produce 
 a new industrial revolution, and largely reverse 
 that brought about by the invention of the 
 steam-engine. In this way the overgrowth of 
 our great cities may be rectified, and London 
 itself be reduced to manageable dimensions, so 
 that, even in it, the people need no longer 
 complain of having *' no room to live." 
 
CHAPTER VIII 
 
 BELOW THE BATTLE 
 
 A GREAT writer has tried to look beyond the 
 welter of hate and destruction now proceeding 
 in Europe to the serener atmosphere '* above 
 the battle/' Throughout this book we have 
 endeavoured to peer below it, to see what the 
 rapid changes going on beneath the surface 
 of things portend, and what problems they are 
 preparing for us after the war is over. Either 
 course, I think, is more profitable than to watch 
 the fleeting incidents of the battle itself. For 
 to what, after all, do these amount ? Flashes 
 here and there of a terrible beauty, as when the 
 lads of our first army marched gaily through 
 the fields of France and passed laughing into 
 the night ; and things of terror unrelieved by 
 beauty, in numbers beyond the power of the 
 imagination to grasp. Here and there from 
 among ten thousand such, one gallant figure 
 
 231 
 
232 BRITAIN AFTER THE PEACE 
 
 catches the public eye and becomes the hero 
 of an hour ; here and there some deed of unusual 
 atrocity inflames the rage of the people. But 
 the picturesque incidents are few. Round the 
 whole is a horror of thick darkness, where is 
 filth and stench and confused noise, an atmo- 
 sphere of expectant terror, of pain and death, 
 of dreary waiting for something really decisive 
 to happen. It almost seems as though the 
 Russian Revolution were the only thing having 
 promise for the future world that has happened 
 since the war began. The world is sick, sick 
 of a raging fever, and the utterances of its 
 statesmen and writers are, for the most part, 
 only the outbreaks of its delirium. They, too, 
 have their eyes only upon the battle, neither 
 above nor below it, and their thoughts are centred 
 on the phantasms that affright obscurer people. 
 Looking at the battle, we think much of the 
 injury we can inflict upon the enemy, much 
 again of the injuries he can do to us. We esteem 
 it a great thing to have gained this or that 
 position, a calamity to have lost command of 
 this or that vantage point. And the cost of 
 it all in human life is terrible enough. No 
 doubt each nation is suffering greatly at the 
 hands of its enemies, and it is natural that the 
 
BELOW THE BATTLE 283 
 
 mind should be too absorbed in this aspect of 
 things to think much of anything else. Never- 
 theless, I make bold to assert that it is not the 
 injuries the nations do to one another that 
 count for most in the long run, but those their 
 own efforts are inflicting on themselves. The 
 fevered man struggles and cries out, but all 
 his efforts only aid the disease which is wasting 
 him from within. The fever in his blood, not 
 anything without, is his real enemy, and only 
 when that is abated will the measure ot 
 exhaustion to which it has brought him be 
 visible. 
 
 So, however they may triumph at a victory 
 here, or lament a loss there, one thing of abiding 
 importance, and one thing only, is happening 
 to all the belligerent Governments alike — they 
 are all growing steadity weaker and weaker, 
 in the case of the greater nations, at least, far 
 more as the result of their own struggles than 
 because of anything the enemy can inflict 
 upon them. Even the death of so many 
 millions, terrible as it is in itself, is not the fact 
 of most permanent consequence. The dead 
 will be replaced ere many years have gone by, 
 and have ceased to count in the shaping of the 
 world. This is a tragic irony of war, that it 
 
234 BRITAIN AFTER THE PEACE 
 
 is not those who have made the final sacrifice 
 that matter, but only those who survive them. 
 The new outlook of those who return from the 
 trenches will be one of the most important 
 factors in shaping the new world. They, for 
 the moment, if they realize their power, will 
 be the dictators of the world, and can deal with 
 the rulers who sent them forth to war just as 
 they like. 
 
 On the face of it, the European War ranges 
 the great Imperialisms of the world in two 
 hostile camps. It may look as though the 
 complete triumph of one group would strengthen 
 the Empires included in it at the expense of 
 those in the other. In the case of a rapid and 
 complete victory for either side, I think this 
 might have happened, but after such a pro- 
 longed struggle as this, anything of the sort is 
 to me inconceivable. It is not one or the other 
 group of Empires that can triumph or go under 
 after such a struggle; the war is destroying the 
 Imperial system itself. The Wars of the Roses 
 destroyed the feudalism that waged them ; 
 certainly not the result aimed at by any Yorkist 
 or Lancastrian who fought in them. And it 
 is not at all likely that any scheme planned by 
 any combatant Government in this war will 
 
BELOW THE BATTLE 235 
 
 be accomplished ; while it is quite certain that 
 none of the rulers of Europe in 1914 desired 
 what is now the most probable result of all — 
 the permanent weakening or utter ruin of 
 Imperialism. 
 
 The great Imperial State, backed up by a 
 gigantic army, was at the outbreak of the war 
 the most powerful institution in Europe. By 
 far the greater part of the Continent had come 
 under the rule of one or other of the Great 
 Powers. As the years passed by the State had 
 become stronger and stronger, its practical 
 sovereignty over all individuals, however power- 
 ful, and all subordinate authorities, more 
 complete. With the State had grown the army, 
 both in size and in the superiority of its weapons, 
 so that revolt against the power of the State 
 had become a practically hopeless enterprise. 
 This power of the Imperial State, backed by 
 overwhelming military force, was one of the 
 most characteristic features of the time. It 
 was this that made the struggle for national 
 liberties so hopeless. Nothing could be taken 
 from the State ; only as the State itself became 
 enlightened and liberalized could any local or 
 national freedom be won by concession. There 
 might be a balance of power in Europe between 
 
280 BRITAIN AFTER THE PEACE 
 
 the different Empires, but within the Empires 
 the State was supreme ; and if the head of the 
 State and lord of the army was one person, no 
 demand of the people could make much headway. 
 Despotism was entrenched as it never had been 
 in the history of the world. 
 
 But the whole thing depended on the power 
 of the Imperial State to maintain its armies, 
 at least wherever the Empire was really un- 
 popular. The story of the ten plagues of Egypt 
 is graphic, but the cynic may wonder what all 
 the pother was about. If Moses, gifted with 
 miraculous powers, could only have stopped 
 the pay of Pharaoh's soldiers for a little time, 
 the power of Egypt would have gone to pieces, 
 and Israel could have marched away in safety. 
 In our day, as ever, mihtarism is the cement 
 of despotism, and when once it is broken, Alsa- 
 tians and Poles, Slovaks and Slovenes, Finns 
 and Lithuanians, and all the races of whose 
 very existence many of us hardly knew until 
 three years ago, can none of them be governed 
 except by their own consent. And this mih- 
 tarism depends in its turn on the financial 
 solvency of the Empires which it serves. Moral 
 insolvency alone is not enough to destroy it. No 
 matter how bad a Government is, it mav survive 
 
BELOW THE BATTLE 237 
 
 any amount of criticism, unless the stark, inex- 
 cusable, unexplainable fact of bankruptcy arms 
 its enemies and brings its powers to nothing. 
 
 The extremity of the tyrant is the opportunity 
 of the people. The bankruptcy of Imperialism 
 throughout the Continent would bring to the 
 oppressed nationalities the opportunity ior freedom. 
 It is true, freedom, even granting the oppor- 
 tunity, can only be won by the people themselves ; 
 it cannot be granted by any outside authority, 
 nor included in any treaty drawn up by the 
 Concert of Europe. But demands that could 
 be ignored or suppressed by the firmly placed 
 Governments before the war can be enforced 
 against the same Governments vainly struggling 
 in a morass of debt. We have boasted of the 
 principle of the British Constitution, " griev- 
 ances before supply," and no doubt some credit 
 is due to the nation that has embodied the 
 maxim in the constitution of the State. I 
 suspect, however, that the principle is much 
 more ancient than the British Constitution ; it 
 certainly existed in England long before we had 
 a regular parliament. I believe the corporation 
 of my native town still pays £ioo a year to the 
 Crown for the " fee farm " of the borough. This 
 payment records the fact that when King John 
 
238 BRITAIN AFTER THE PEACE 
 
 was in want of money he sold the right of incor- 
 poration to the burgesses for an annual payment 
 of that amount. Buying liberty may be a 
 sort of political simony, but the freedom of the 
 world probably owes as much to it as to any- 
 thing else. 
 
 Even before the war the finance of continental 
 Imperialism was seriously embarrassed. I have 
 shown in an earlier chapter that, to a very large 
 extent, the State debts of the Continent are 
 not due only to war, but to the steady accumu- 
 lation of peace deficits. In an article commenting 
 on the special war tax on capital levied in 19 13, 
 the Frankfurter Zeitung voices the growing 
 anxiety of thinking Germans at the financial 
 difficulties of the State. After ascribing the high 
 tariff policy of Bismarck to the need for revenue, 
 and the certainty that " the Bundesrath (the 
 Federal Council of the Empire) would not dream 
 of sanctioning direct taxation," the article 
 proceeds : — 
 
 Even the most enthusiastic supporters of our Protective 
 tariffs cannot to-day deny that from the point of view of 
 this aim they have proved a disgraceful fiasco. The wheat 
 and rye tariff, originally i mark per double-centner (is. per 
 2 cwt.), rose in 1885 to 3 marks — a rate which Bismarck 
 himself had said was iniquitous — and is now 5 J and 6 marks, 
 and, a the Farmers' Union had had its way, would be 7 J 
 
BELOW THE BATTLE 239 
 
 marks. Germany, from being a country where living was 
 cheap, has become perhaps the dearest country in Europe. 
 In recent years the increase in price of all commodities, and 
 particularly of the necessaries of life, has become intolerable. 
 But the revenue shows no corresponding increase. In spite 
 of higher tariffs the Imperial finances have remained pre- 
 carious. The National Debt has increased by thousands of 
 miUions of marks, mainly for expenditure which, under 
 sounder management, would have been met out of current 
 revenue. Financial reform followed financial reform, up to 
 the last great blood-letting of 1909. The Government 
 proposal of the extraordinary tax of 1,000,000,000 marks is 
 proof that now again we are at the end of all things. 
 
 So the lament over the failure of German finance 
 goes on. *' Protective tariffs ruin finances/' we 
 read, " because they increase the Treasury's 
 own expenditure. Empire, State, Community, 
 as large consumers, must pay more for the articles 
 they bu}^ . . . Protective tariffs ruin finances 
 above all because of the ever heavier burden 
 laid on the people, a smaller and ever smaller 
 proportion reaches the Imperial Treasury, while 
 the lion's share goes into private pockets. . . . 
 We have screwed our tariff up and our revenue 
 has got steadily worse.'' And this all because 
 a Bundesrath of landowners would not sanction 
 direct taxation, even at the request of Bismarck ! 
 This was before the war. A reluctant 
 Bundesrath will now most certainlv have to 
 
240 BRITAIN AFTER THE PEACE 
 
 " sanction direct taxation " on a scale hitherto 
 unheard of, and may be surprised to find that 
 there are sterner and stronger things in the world 
 even than the great Bismarck. It is said that 
 this very pressure of debt, as shown b}^ the 
 enactment of the succession duties and the 
 special war tax, was one of the reasons why 
 the Junkers pressed for war ! A less likely 
 cure for financial embarrassment it would be 
 hard to conceive, and the expedient affords a 
 staggering comment on the boasted " realism " 
 of German politics. Anyhow, what the Germans 
 would not yield to Bismarck, they, or more 
 likely some other authority in their place, will 
 yield to Necessity, which is stronger even than 
 the man of blood and iron. 
 
 The Imperial State of 1914 was solvent, or at 
 least so nearly so that its difficulties could be 
 partly hidden and excused ; the Imperial State 
 at the end of the war can only become solvent, 
 if at all, by recasting its whole system from 
 top to bottom. No doubt many other things 
 have changed also, but even if this fact stood 
 alone the whole European situation would be 
 fundamentally different from what it was in the 
 early days of the war. What does it matter 
 whether those Germans were right or not who, 
 
BELOW THE BATTLE 241 
 
 in August 1914, thought the Russian mobiliza- 
 tion was a prelude to the invasion of their country, 
 and who regarded the German declaration of 
 war as a necessary act of self-defence ? What 
 does it matter what were or were not the plans 
 of a Tsar who has now less influence on the 
 policy of his country than the poorest private 
 in the Russian army ? And what does it matter 
 to us what were the plans of the Kaiser in 1914, 
 if the position of Germany has so changed that 
 every energy of his Government must be devoted 
 for the next generation to the internal problems 
 created by the war, if he wants to avoid the 
 fate of Nicholas II ? It is the same everywhere. 
 It will matter nothing at the close of the war 
 what the plans of a Government were at the 
 beginning unless it is still in a position to main- 
 tain the military force necessary to carry them 
 out. And this is true irrespective of any moral 
 change in the nations themselves. Certainly 
 there is no reason to think the Turks any better 
 to-day than they were when all Europe was 
 terrified at their power. They are certainly as 
 militarist as ever they were, and are probably 
 quite as strongly convinced that the true believer 
 has a right to rule over the infidel. But beyond 
 the unhappy Eastern nations still under their 
 
 16 
 
242 BRITAIN AFTER THE PEACE 
 
 rule, who cares for that ? The Turkish miU- 
 tarism is bankrupt and helpless, and nobody 
 concerns himself about the evil it might like 
 to do if it could. And after this war the Empires 
 of Europe will have only one choice — to throw 
 over their jealousies and ambitions altogether 
 and to set to work building up a civilized order 
 again, or of sinking into a condition of impotent 
 militarism like that of Turkey.^ 
 
 In a controversy with Mr. Norman Angell, 
 Mr. Cecil Chesterton defended the cause of war 
 while repudiating what he called " cosmopolitan 
 usury.'' He admired fighting, but he hated the 
 financier, and would not even fight in his defence. 
 " The sword,*' he said, " is too sacred a thing 
 to be prostituted to such dirty purposes." 
 " The sword," as it happens, plays a very unim- 
 portant part in modern war, as Mr. Chesterton 
 probably knew, but he could not resist the 
 popular rhetorical trick of the militarist, which 
 effectually turns a discussion about the real 
 
 I It is for aggression, and aggression unaided by more 
 civilized allies, that Turkey is impotent. Her financial 
 weakness does not prevent her putting up a fine fight when 
 attacked, nor from providing plenty of splendid soldiers 
 when other people provide her with the means to arm and 
 feed them. 
 
BELOW THE BATTLE 243 
 
 problem, whether the sort of thing people have 
 to do now when they fight is justifiable or not, 
 by introducing the sentimental suggestions 
 attached to an almost obsolete weapon. If he 
 had said *' Poisonous gas is too sacred a thing 
 to be prostituted to such dirty purposes,'' Mr. 
 Chesterton might have been less impressive, but 
 what would have been lost to poetry would have 
 been gained by truth. Be that as it may, how- 
 ever, Mr. Chesterton, who admires war but hates 
 usury, should remember the saying, '' Love me, 
 love my dog.*' Cosmopolitan usury is as essen- 
 tial to modern war as the Dreadnoughts, explo- 
 sives, submarines, and Zeppelins by which it 
 is carried on. The officer's sword is little more 
 than a symbol in modern war ; the banker's 
 bond is an essential part of its machinery. And 
 if, as Mr. Chesterton hoped, the cost of war 
 should break '* the net of usury which at present 
 unquestionably holds Europe," that would render 
 all warfare of the kind waged between the great 
 States of Europe to-day for ever impossible. 
 
 It would be interesting to write up the his- 
 torical economics of war. In far-distant times, 
 Cain, the tiller of the soil, picks up a stone and 
 slays Abel, the keeper of sheep. This is the 
 biblical beginning of war, yet I cannot remember 
 
244 BRITAIN AFTER THE PEACE 
 
 ever hearing Cain's action spoken of with 
 approval. Such is primitive war. The savage 
 cuts a club from the woods, or gathers stones 
 from the ground, and fights his brother savage 
 of another tribe with these. When the fight 
 is over, those that are left alive and uninjured 
 go on their way much as before. The battle 
 has not been costly in anything but blood ; little 
 time has been lost, and nobody is in debt. This 
 is all that is possible to a primitive people, who 
 have no skill in making better weapons and 
 no social organization capable of keeping large 
 numbers of men marching and counter-marching 
 for a length of time. The growth of militarism 
 is held in check by the economic weakness of 
 society ; when there is little wealth war can 
 be costly only in blood. 
 
 With the progress of society, however, a more 
 advanced form of warfare becomes possible. 
 Specialized tools of war are made and trades 
 are devoted to making them. We get : 
 
 The armerer, the bowyer, and the smith, 
 That forgeth sharpe swerdes on his stith. 
 
 Curiously enough, Mr. Chesterton's favourite 
 weapon, " the sword," acquires a romantic 
 prestige. It is given a symbolic meaning never 
 
BELOW THE BRITTLE 245 
 
 accorded to the yet more ancient sticks and stones, 
 which are irreverently dismissed, not only from 
 the uses, but from the vocabulary of battle, 
 and left to vulgar rioters. With the specialized 
 manufacture of weapons comes the organization 
 of armies. The tillers of the earth and the 
 keepers of sheep are no longer licensed to knock 
 out one another's brains ; they are privileged 
 instead to provide the commissariat of their 
 betters. Militarism has become organized ; it 
 can undertake operations at a considerable dis- 
 tance, and carry them on for a considerable 
 time ; it can form encampments and besiege cities. 
 It is still, however, limited by the developments 
 of civil life. The cost of weapons, the size of 
 armies, and all things connected with the war 
 are limited. It is restricted to the amount of 
 taxation the people can be persuaded or com- 
 pelled to pay. Then ensues a struggle of aspiring 
 militarism to get more money. Kings, anxious 
 for conquest and glory, squander the Crown 
 revenues, and then try to bully or coax their 
 people into supplying more means to waste in 
 war. Taxes, loans, confiscations follow, but the 
 King is always in difficulties, always tending to 
 bankruptcy ; for militarism, however impossible 
 it may be in the long run to spend more than 
 
246 BRITAIN AFTER THE PEACE 
 
 society creates, is always trying to outrun the 
 constable. 
 
 In the eighteenth century, Gibbon reckoned 
 that a nation could not afford to keep more 
 than one in a hundred of its population in the 
 field ; to-day we have lo per cent, of the fight- 
 ing nations mobilized. That this has become 
 possible is due to the great increase in wealth 
 production under modern capitalism, and to 
 the development of finance which has enabled 
 Governments to borrow the enormous sums of 
 money required by modern war. Militarism, as 
 we know it, has taken full advantage of the 
 opportunity given to it. Relieving, as far as 
 possible, the rich from the burden of taxation, 
 by laying the weight of it on commodities and 
 not on incomes, Continental militarism has 
 screwed up indirect taxation to the utmost, 
 while availing itself of the tendency of modern 
 industry to produce yearly a surplus of wealth 
 seeking investment in some " gilt-edged " security ; 
 it has steadily extended itself, even in time of 
 peace, to the full limit of the funds available. 
 With this it has created machines, which can 
 only be put in motion at all at the expense of 
 utterly disorganizing the productive industries 
 pf the countries, and creating an incredible 
 
BELOW THE BATTLE 247 
 
 mountain of debt for posterity. To put it 
 briefly : there is no use any great Power building 
 up an army on the present scale unless it is 
 in a position to borrow on occasion anything 
 from two to five thousand million pounds. How 
 long will it be before any of the nations of 
 Europe will be in that position again ? 
 
 Primitive militarism required no money at 
 all ; the demands of mediaeval militarism were 
 limited by the possible amount that could be 
 got from taxation during the years of war itself, 
 eked out by plunder and short loan borrowing ; 
 the modern variety takes as much as possible 
 out of the taxes in peace, and presses the credit 
 of the Government steadily up to bankruptcy 
 point in war. Its basis is the faith in the '' gilt- 
 edged " security. Only by dangling before the 
 holder of loanable capital the prospect of an 
 assured investment can such enormous quanti- 
 ties of money be obtained. To demand a similar 
 amount in taxation would be to bring the war 
 to a very rapid termination. But if the invest- 
 ment be not assured ? If it turns out at the 
 end of this war that no investment is " gilt- 
 edged," and that on the whole it is safer to 
 put money in private industrial concerns, away 
 from distracted Europe, than to lend to any 
 
248 BRITAIN AFTER THE PEACE 
 
 Government ? It is clear that if any one of 
 the beUigerents repudiates its debt, its borrow- 
 ings have been only disguised conscription of 
 capital or taxation after all. Every one will 
 know that lending money to that Government 
 in any future war is just the same thing as giving 
 it, and the only possible course in future will 
 be to take what is needed by undisguised confis- 
 cation. If even one of the Great Powers becomes 
 openly bankrupt at the end of this war, that 
 will be enough to shake the credit of all the 
 others ; while even without a definite repudiation 
 anywhere, a period of suspended interest, of 
 uncertainty, delay and confusion might be quite 
 enough to destroy all faith in the " gilt-edged " 
 character of Government securities everywhere. 
 Now, even if the war ended to-day, one thing 
 is absolutely certain — the great European Powers 
 among them would have to face an interest 
 charge on new debt contracted of not less than 
 £1,000,000,000 next year.^ This takes no account 
 whatever of any provision for pensions, demobi- 
 
 » This for the six great European Powers. Russia's share, 
 however, is not quite on the same footing. The Tsar's 
 Government seems to have raised no internal loans, but to 
 have financed the war, apart from borrowings from her 
 allies, by a reckless issue of paper money. According to 
 
BELOW THE BATTLE 249 
 
 lization charges, or for the restoration of 
 destroyed property. Neither does it allow for 
 the suspensions, common to the Protectionist 
 States of Western Europe, of import duties on 
 food, or for the inevitable shrinkage all along 
 the Une of the yield on pre-war taxes. I cannot 
 think it possible, in view of the high price of 
 food and the impoverishment of the peoples, 
 that the food taxes can be revived for many a 
 long day, at least at the pre-war level. Such 
 new taxes as have here and there been imposed 
 will make but a paltry contribution towards 
 the deficits in ordinary revenue inevitable on 
 the Continent. Only in Great Britain has it 
 been possible to make any serious attempt to 
 meet the obligations flung upon the nations by 
 the war. This we owe to our policy of Free 
 Trade, which has never been more helpful to 
 us than in this crisis. 
 
 We have had all too much of psychology in 
 this war, and I feel diffident in trying to estimate 
 the moral reactions of this state of things. It 
 
 the French paper, Les Nations, the paper money in circula- 
 tion in Russia increased from 2,000,000,000 to 32,000,000,000 
 roubles between the outbreak of war and the revolution. 
 How this extraordinary state of affairs can be dealt with, 
 I confess I have not the slightest idea. 
 
250 BRITAIN AFTER THE PEACE 
 
 seems fairty safe to predict, however, that this 
 gigantic bill, when presented, will set going a 
 flood of criticism throughout Europe. Hungry 
 workman, discharged soldier, overtaxed business 
 man, and alarmed bondholder will all have some- 
 thing to say, and while quarrelling, likely enough, 
 among themselves, will turn their wrath mainly 
 on the rulers who have caused their trouble. 
 Nothing arouses such universal opposition as 
 a new and unpopular tax, nothing can draw upon 
 a Government and the ideas upon which it is 
 based such a disintegrating criticism. Every 
 one knows about the tax, and every one is ready 
 to listen to arguments showing why it should 
 not be levied, or what are the faults of the 
 policy that have rendered it necessary. Inevit- 
 ably, a demand for money brings all the griev- 
 ances of the people to the front ; and if they 
 find they must pay, at least they become deter- 
 mined to get something in return for their money. 
 Government is forced to be apologetic, to explain, 
 to concede. The political simony, which is the 
 basis of the British Constitution, " grievances 
 before supply,*' becomes the accepted alterna- 
 tive to revolution. So, it seems to me, it must 
 be in the Europe of the next few years. The 
 financier will insist upon the security of a pacific 
 
BELOW THE BATTLE 251 
 
 policy before he will unloose his purse-strings, 
 for what chance would he have of being paid 
 if this war is to be followed by another like it ? 
 If trade is to recover at all, the manufacturer 
 will want a similar guarantee, for why should 
 he trouble to heap up riches when he cannot 
 tell whether he or Hindenburg shall gather 
 them ? Public credit will be a delicate conva- 
 lescent, whose friends must deal tenderly with 
 it if they wish to avoid a fatal collapse. The 
 harsh voice and rough tramp of the drill-sergeant 
 must be kept far from the sick-room. Metaphor 
 apart, any German officer who writes a book 
 like Bernhardi's after the war, any university 
 professor who delivers such lectures as Treit- 
 schke's, any subaltern who tries to imitate the 
 exploits of Zabern, is likely to find himself in 
 very serious trouble. The credit of the State 
 will be sensitive, and unless the rulers of Germany 
 make it perfectly clear that they have no longer 
 any sympathy with such things, it may never 
 recover at all. 
 
 But whatever the Governments may do, the 
 military cement, which has hitherto held the 
 Empires together, must be fatally loosened by 
 their poverty. If they are to survive at all, 
 they will have to depend for the future upon 
 
252 BRITAIN AFTER THE PEACE 
 
 the less material bond of goodwill. Imposing 
 as they are, the Imperial States have, on the 
 whole, less justification in the nature of things 
 for their existence than any of the other govern- 
 ing authorities. The existence and boundaries 
 of a municipality are generally determined by 
 some contemporary objective facts. A number 
 of people are gathered together who, in virtue 
 of that fact, have certain interests common to 
 them, but not important to the rest of the world. 
 It is natural that they should assume or be con- 
 ceded powers to manage those matters in which 
 they alone are concerned, with due limitations 
 conserving the interests of the nation and of 
 the world at large. Nationality has generally 
 a more subjective, more sentimental basis, though 
 it is no less real for all that. Some millions 
 of people, for racial, historical, or other reasons, 
 desire a common rule so strongly that they will 
 not be content under any foreign domination. 
 Objective facts, such as an insular position, 
 may have something to do with nationality also, 
 but this is not necessarily the case, and the 
 basis of nationality is not logical, but emo- 
 tional. Both local and national authority at 
 their best are subordinate to the broad interests 
 of humanity as a whole ; and while we 'can see 
 
BELOW THE BATTLE 253 
 
 a reason in the nature of things for municipal 
 and national governments, they should always 
 be limited by the rights of universal humanity, to 
 which alone sovereign power should be entrusted. 
 The modern Imperial State, where, as gene- 
 rally, it does not coincide with some great 
 nationality, is a rather clumsy makeshift, due to 
 historical, not modern conditions. Its armies, ^ 
 
 diplomatic disputes, its dividing tariff walls and; ^^^*^ 
 conflicting policies, are for the most part mere IjU^ ^ 
 hindrances to the natural and harmonious\ f^^f^ 
 development of society, nationally and inter- 
 nationally. On the one hand, it usurps powers 
 which any reasonable order would transfer to 
 some international authority ; on the other, it 
 controls a vast number of things which ought 
 to be relegated to national or local governments. 
 While it was strong and financially solvent, its 
 claim to be sovereign could not be disputed ; 
 now that it is bankrupt, the way seems open 
 for a steady and progressive encroachment on 
 its powers, from above by the development of 
 international law, from below by the growth of 
 nationality. No doubt, wherever there is any 
 geographical or other objective basis for an 
 Empire— that is, where any neighbouring group 
 of nationalities have common interests which 
 
254 BRITAIN AFTER THE PEACE 
 
 can best be served by some form of political 
 unity — the Empire will continue to exist. I hope 
 and indeed expect, however, that in the em- 
 barrassed condition in which it finds itself, such 
 an Empire will only be able to continue by treating 
 the problem of uniting diverse nations as Switzer- 
 land has done, and not as Austria has tried to 
 do. But generally, throughout the world, I think 
 the effect of the war must be to reduce very 
 greatly the prestige and power of the Imperial 
 State. The forces of the age tend generally 
 towards federation and devolution. To these 
 forces the strongly entrenched Imperial State 
 opposed a formidable obstacle, which, in the 
 days of its weakness, must gradually give way. 
 I do not suppose that there will often, perhaps 
 ever, be a definite dissolution of an Empire, 
 only that the bonds of it will tend to be slacker, 
 the actual exercise of Imperial authority less 
 frequent, giving freer and freer play to the forces 
 of internationalism on the one hand and of 
 nationality on the other, until in the course of 
 a few generations Imperialism has become rather 
 a sentiment than a fact, and places no barrier 
 in the way of either of these Uving forces. 
 
 The bearing of this upon the main subject- 
 matter of this book is the environment it creates, 
 
BELOW THE BATTLE 255 
 
 within which our own national problems must 
 be worked out. The bankruptcy of the third 
 or modern type of militarism, the characteristics 
 of which are universal service and enormously 
 expensive armaments backed up by cosmopolitan 
 capitalism and funded debts, rather than the 
 pastime of a limited class financed by plunder 
 and Isaac of York, does not, of course, necessarily 
 prohibit the ultimate reappearance of some 
 fourth form of this perennial plague. We may 
 some day have to reckon with a new militarism, 
 perhaps of a few technical experts, wielding 
 deadlier w^eapons even than those of to-day, 
 and holding large civilian populations at their 
 mercy. That, however, will take some time to 
 develop, and we may hope that when the arma- 
 ments trade and the armies themselves interest 
 directly only a small proportion of the popu- 
 lation, the remainder may be wise enough to 
 shut their advocates up in Bedlam. Meantime, 
 we shall have a respite, and, so far as war is 
 concerned, we should not fear disturbance in 
 our domestic work. But the confusions on the 
 Continent, and the ferment of ideas to which 
 they must inevitably give birth, may be a for- 
 midable comphcation of the problem. Conflicts 
 abroad between the peoples and the kings will 
 
25G BRITAIN AFTER THE PEACE 
 
 arouse the keenest interest here, and if any soHd 
 basis of discontent exists, will certainly provoke 
 imitation. We must be just and courageous, 
 acting promptly and fearlessly in every emer- 
 gency, so as to make it clear to the democracy 
 that, whatever may be the case abroad, their 
 own grievances are sure to receive prompt and 
 effective redress. Possibly without going beyond 
 the limits of existing taxation, certainly by quite 
 feasible extensions and modifications, we, unlike 
 any other nation in the Old World, will have the 
 means to meet all our obhgations in the first 
 crucial year of peace. We can carry out the 
 programme of this book, if we have the courage 
 and the honesty ; and if the Government of 
 the day promptly and definitely pledges itself 
 to do so, any outbreak across the Channel would 
 affect us very little. 
 
 It is otherwise with the probable remoter 
 effects of the war suggested above. They imply 
 a weakening of the general prestige of Empire 
 throughout the world. The bounds of Empires 
 would tend to become blurred and indistinct ; 
 peoples on the borders especially to become more 
 and more autonomous, more and more inter- 
 fused with one another, scarcely conscious perhaps 
 to which of two neighbouring " Empires " their 
 
BELOW THE BATTLE 257 
 
 territories belonged. The British Empire cannot 
 afford to lag behind the world. Its strength 
 even now is in the bond of goodwill, its military 
 power in time of peace being too insignificant 
 to hold its vast Dominions together. And there 
 is obviously no geographical necessity behind 
 it, such as has preserved the Empire of the 
 Hapsburgs through centuries of misrule and 
 tyranny. This goodwill, internal and external, 
 is due mainly to the fact that the British Empire 
 is already very largely internationalized, while 
 giving freer play to the principle of nationality 
 than any that preceded it. Our policy of auto- 
 nomy for Colonies, and of free trade in depen- 
 dencies directly governed by the Crown, our 
 impartial policing of the seas in times of peace, 
 have rendered our wide Empire tolerable to the 
 rest of the world, while earning the loyalty of 
 the Dominions themselves. Mr. Chamberlain's 
 boast that we hold the Empire for the good of 
 the world is largely true. It is only another 
 way of saying that our Imperial power acts in 
 an international spirit, and governs the Crown 
 Colonies very much as an International Com- 
 mission would govern them, if such a thing 
 existed. In so far as it acts thus, its control 
 of tropical lands is just a foretaste of the kind 
 
 17 
 
258 BRITAIN AFTER THE PEACE 
 
 of thing that would obtain in all lands of similar 
 character if, through stress of circumstances, 
 the Imperial idea were sufficiently weakened 
 abroad. Before the war there was a steady 
 pressure of surplus capital seeking investment 
 and preferential concessions in Africa and other 
 new countries. The capitaHsts of various lands 
 struggled with one another to secure the exploi- 
 tation of native labour, and to get first hold on 
 any natural resources in gold or raw material 
 that existed or were thought to exist in unde- 
 veloped countries. This state of things, the '* tap 
 root,*' Mr. Hobson calls it, of aggressive Impe- 
 rialism, may be fundamentally changed by the 
 war. For some time, at least, there will be little 
 surplus capital seeking investment. Even petty 
 wars with barbarous tribes may be impossible 
 to Governments fearful of expenditure and 
 struggling to preserve their very existence. Such 
 elementary hberalism as a large experience has 
 imposed on our Colonial Office in the treatment 
 of native races may readily be adopted and 
 extended by foreign Powers. Not much pro- 
 gress in this direction would place them ahead 
 instead of behind us, and we should be faced 
 with the alternative either of universal discon- 
 tent leading to the disruption of the Empire, 
 
BELOW THE BATTLE 259 
 
 or of a bold and prudent extension of native 
 liberties. 
 
 As the nationalities of Europe, by force or 
 pressure exercised against the weakened Empires, 
 gain more freedom, we may be certain that the 
 nations within the United Kingdom will be 
 stimulated and excited to imitation. It will 
 become necessary to trust more and more exclu- 
 sively to the geographical fact which renders 
 some form of federal union, at least, a common 
 advantage, to England, Scotland, Ireland, and 
 Wales alike, and to leave the widest possible 
 freedom to each nation to work out its own 
 salvation in its own way. 
 
 Though our Free Trade finance has placed 
 the Imperial Government in a much stronger 
 position than those of our Protectionist neigh- 
 bours, both to deal with the immediate problems 
 created by the war and to retain some confidence 
 and respect afterwards, the prestige of the State, 
 both positively and relatively to that of other 
 bodies, will be very hard to maintain. The 
 local authorities, for instance, will be far less 
 embarrassed, and especially with a new and 
 less unpopular basis of rating, and perhaps a 
 readier ability to obtain funds by municipal 
 trading, will find themselves able to do many 
 
260 BRITAIN AFTER THE PEACE 
 
 useful things which the embarrassed central 
 authorities will have neither time nor money to 
 deal with. If so, it will be perilous to continue 
 the old restrictions on their powers. As in the 
 break-up of the Roman Empire, the municipal 
 institutions it had sanctioned did much to check 
 the disintegration of society, so may our county 
 and borough councils, if given adequate powers, 
 help to tide us over the dangers of the next 
 generation. 
 
 The war seems to call for a new conception 
 of sovereignty. Before it, sovereignty rested 
 almost absolutely in the Imperial State ; all 
 local and national authorities were, always in 
 theory, and mainly in fact, delegated and sub- 
 ordinate ; while as against the outside world 
 each State jealously guarded its own independent 
 absolutism. This was rendered possible, not 
 because the centralized State, any more than 
 the anointed King, had any Divine right to 
 absolute sovereignty, but for the very practical 
 reason that the State alone had an army and the 
 means to pay it. With the bankruptcy of 
 militarism the way is open for a new conception 
 of sovereignty and the basis on which it should 
 rest. The sovereign power should not be con- 
 centrated in one institution, but should become 
 
BELOW THE BATTLE 261 
 
 a thing more diffused, shared in the proportions 
 in which they can most effectually use it for the 
 common good, by the smallest commune, by the 
 federal Empire, and by the World State of which 
 it forms a part. Perhaps the complete bank- 
 ruptcy of the Empire or Nation State with its 
 claim to absolutism may have been necessary 
 to render this wider conception of sovereignty 
 possible. 
 
 No doubt the Empires, or some of them, will 
 struggle through the difficult period before them 
 and get into credit again, but not until they have 
 surrendered for ever to other authorities many 
 of their more arrogant usurpations. The British 
 Empire, if guided with wisdom and courage, 
 should be able to play a glorious part in the 
 reconstruction of society. It alone among the 
 Old World Powers can hope to deal effectually 
 and justly with the immediate crisis after the 
 war, and thus to gain time to plan and organize 
 for the future ; while the experience gained 
 during many years of rule over peoples in every 
 degree of civilization and of every variety of 
 race and language has enabled it to give a 
 working model to the world of how many of 
 the problems confronting civilization will have 
 to be settled. To further by every means in 
 
262 BRITAIN AFTER THE PEACE 
 
 our power the movement already initiated for 
 an international government, while developing 
 the institutions of our own Empire in a liberal 
 and international spirit, we may gain for our- 
 selves the moral leadership in the politics of 
 the world. If, however, any such thing is to 
 come about, we must begin at the beginning. 
 Starting with the firm determination to do 
 justice to the army which has fought our 
 battles, and the frank acceptance of any obli- 
 gation that implies, we must secure for our- 
 selves peace at home. Injustice to the soldier 
 means anarchy here, and will render futile any 
 attempt to play a great part in the making of 
 the new world. Were the problems dealt with 
 in this book of domestic interest only, there 
 would still be the most pressing need for their 
 solution. I think, however, that they are more 
 than this. It may well be that whether a higher 
 world order arises out of the ruins of the old 
 or not will depend upon whether British policy 
 during the next few years is guided by justice 
 or a jealous fear for vested interests. 
 
 Are we to take full advantage of the things 
 that have been happening below the battle, the 
 destruction which the war itself has brought 
 not upon this or that army or Empire, but upon 
 
BELOW THE BATTLE 268 
 
 the system of military Imperialism itself ? The 
 unprecedented horror and vastness of this war 
 will not in themselves prevent it from being, 
 like thousands of other wars, a mere meaningless 
 blot on the page of history. Romances of the 
 war will be written by thousands in any case, 
 and battle histories also, only differing from 
 romances in name. But as it is far vaster in 
 scale, so this war will be less attractive in romance 
 than others, for in that respect the war of the 
 chemist and the engineer can never compete 
 with the war of the swordsman and the knight. 
 If it is to mean anything at all for future gene- 
 rations, it must be because of what comes out 
 of it, and that depends not upon the soldier, i 
 but the statesman. It is the vision of the city| 
 in the distance, the future Rome, that gives to 
 Virgil's poem its epic dignity ; were it only 
 an account of the adventures of ^Eneas, it would 
 not differ, except in poetic power, from the 
 forgotten romances of chivalry. 
 
 Printid in Great Britain by 
 
 V|(WIM BROTBSRS, LIMITED, THE CRESHAM PRESS, WOKIKC AND LONDON 
 
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