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 [anisation of Industry Series. III. 
 
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 SOME ECONOMIC ASPECTS 
 
 OF 
 
 INTERNATIONAL 
 RELATIONS. 
 
 Commercial Policy and our 
 
 Food Supply - - H, SANDERSON FURMSS, MJL 
 The Influence of the War on 
 
 Commercial Policy - EDWIN CANNAN, M.A., LLJD 8 
 Capitalism and International 
 
 Relations ~ A, E. 2IMMERN, 
 
 1/. net, 
 
 post free. 
 
 LUSKIN COLLEGE, OXFORD. 
 
PUBLISHED BY THE COUNCIL OF 
 RUSKIN COLLEGE. 
 
 The Reorganisation of Industry Series. ID. 
 
 SOME ECONOMIC ASPECTS OF 
 
 INTERNATIONAL 
 RELATIONS. 
 
 PAPERS 
 
 BY 
 
 H. SANDERSON FURNISS, M.A. 
 EDWIN CANNAN. MA. LL.D. 
 A. E. ZIMMERN, M.A. 
 
 With Criticisms. 
 
 7d. ,n3t. 
 
 RUSKIN COLLEGE, OXFORD. 
 
 BIRMINGHAM : 
 BIRMINGHAM PRINTERS, LTD., 42-44, HILL STREET. 
 
 1917 
 
PREFATORY NOTE. 
 
 S the College buildings are still in the hands of the Government, 
 and as the times do not yet allow of our resuming the 
 residential side of our work, the Council thought that the College 
 could most usefully supplement our teaching by correspondence, 
 and help to promote the study of social and industrial questions, by 
 continuing its policy of holding from time to time national conferences 
 of the representatives of working-class bodies. 
 
 At Oxford and Bradford the questions discussed were, for the most 
 part, national in their scope. But at our Birmingham conference 
 we thought it wise to take a wider survey and to consider " Seme 
 Economic Aspects of International Kelations." 
 
 The principal topic of my own paper was suggested by a question 
 raised by Mr. C. S. Orwin in the paper he contributed to our Bradford 
 3onference, namely, as to whether it was desirable to subsidise British 
 igriculture as a measure of defence. This question seemed to me so 
 important as to deserve further elaboration and a fuller discussion 
 than it was found possible to give it at Bradford. 
 
 The College is fortunate in having secured a paper from Professor 
 Cannan ; and Mr. A. E. Zimmern, who contributed a paper entitled 
 ; ' The Control of Industry " to the first volume of this series, has placed 
 us under a new debt of obligation. Our thanks are also due to Mr. E. A. 
 Mabbs, Mr. E. J. Naylor, and Mr. 3. G. Newlove, for leading the 
 
 discussions. 
 
 H. SANDERSON FURNISS, 
 
 Principal of Ruskin College 
 Oxford, October, 1917. 
 
 onoo A 
 
SOME ECONOMIC ASPECTS OF 
 INTERNATIONAL RELATIONS. 
 
 AN ACCOUNT OF PROCEEDINGS AT THE NATIONAL 
 CONFERENCE OF WORKING-CLASS ASSOCIATIONS 
 HELD IN BIRMINGHAM ON SEPT. 21st and 22nd, 1917. 
 
 (Notes taken by R. T. HUNT, Oxford.) 
 
 FIRST SESSION. 
 
 Mr. James Bell (Amalgamated Weavers' Association), in taking the 
 chair, said he would like to make a few remarks on the work of Ruskin 
 College. In ordinary times there were resident students drawn from work- 
 ing-class organisations, e.g., from Trade Unions, Co-operative Societies, 
 and the Club and Institute Union, and sent to the College to be trained, 
 not to lift them out of the movement, but to make them more useful 
 in it. The government of the College was in the hands of working-class 
 organisations, and there was therefore every reason why working-class 
 organisations should support the College. During the war it had not 
 been possible to carry on the work in the ordinary way, as the College 
 was being used by the War Office as a home for nurses. After the 
 war it was intended to take up the full work again and to go on with it. 
 In the meantime, it was desired that the usefulness of the College 
 should be continued, and conferences had been organised so that sub- 
 jects of interest to the working-class and labour movements could be 
 brought before the people inl crested. 
 
COMMERCIAL POLICY AND OUR 
 FOOD SUPPLY. 
 
 By H. SANDERSON FURNISS, M.A., 
 
 Primipal of Ruskin College. 
 
 Very few, if any, of the problems with which society is confronted 
 can be solved by reference to economic considerations alone. For 
 instance, they are almost always capable of being regarded also from 
 an ethical and political aapect. 
 
 Though the subject-matter of economics is wealth, it should always 
 be borne in mind that wealth is only one of the means to well-being, 
 which itself also depends upon the attainment of high ethical standards 
 and satisfactory political relations. This does not mean, of course, 
 that there are no economic problems apart from ethics and politics. 
 On the contrary, problems must be isolated and considered from their 
 different points of view. A surgeon who specialises on the heart will 
 realise that he cannot consider the heart entirely apart from the nervous 
 system, the lungs, the digestive organs, etc.- in fact, he must know 
 something of the body as a whole ; that, however, will not prevent his 
 becoming a heart specialist. The business of the economist is to be 
 able to say : "If you want the largest possible production of material 
 goods, you must follow such and such a course " ; of the political 
 philosopher to point out that such and such a course must be followed . 
 if good government at home and satisfactory relations abroad are to 
 be secured ; of the moral philosopher to show us how to live aright 
 and lead the good life. It may be necessary that each should criticise 
 the others, thus : " If we proceed along your lines production may be 
 curtailed, political relations may be disturbed, or the sum of human 
 happiness diminished," as the case may be. Prospects of wealth, 
 then, may have to be relinquished for the sake of good government, 
 or the pursuit of riches abandoned, or political relations endangered 
 for the sake of maintaining what is believed to be a right ethical 
 standard. 
 
 This line of thought is particularly applicable to the problems 
 connected with foreign trade and with commercial policy in general, 
 and also to the particular problems here under discussion viz., the 
 problem of our food supply ; for in both the general and particular 
 questions, ethical and political, as well as economic matters, are all 
 very definitely involved." 
 
To the economist the object of foreign trade is identical with the 
 object of all exchange viz., the increase of utility the increase, 
 not necessarily of national wealth, but of the wealth of nations. The 
 political philosopher, however, knows that at times sacrifices of economic 
 advantage may have to be made in order to secure political ends 
 for instance, to consolidate an empire, to secure the adhesion of allies, 
 or for purposes of defence ; while again, the moral philosopher may 
 urge that the advice of the economist cannot be taken without qualifica- 
 tions if the moral standards are not to be lowered, or if moral obligations 
 are to be fulfilled for instance, the boycott of goods made under 
 conditions of slavery, the abandonment of trade in deleterious products, 
 such as opium, or the carrying out of a commercial treaty. 
 
 Before the outbreak of the present war, what is known as the fiscal 
 question, raised by Joseph Chamberlain, had divided opinion on 
 commercial policy, and had been before the nation at every General 
 Election since 1903. On the one hand, it was urged that the time had 
 come for a departure from the Free Trade policy to which we had 
 adhered since 1846. On the other hand, it was maintained that the 
 reasons alleged were not of sufficient weight to justify a change, and 
 that our existing policy was, under prevailing conditions, the best 
 that could be devised at any rate, from the point of view of the 
 United Kingdom. 
 
 Throughout the almost ceaseless discussions which were carried on 
 during those years while political and moral considerations were 
 adduced, both in support of change and in support of the maintenance 
 of the status quo, economic considerations were certainly most pro- 
 minently before the public. This is perhaps more strictly true of the 
 defenders of Free Trade than of the advocates of change. But on both 
 sides the political and moral considerations, when brought forward, were 
 as a rule given a secondary place. When the war is over, and the time 
 comes for bringing the whole subject once more under review, it seems 
 certain that political and moral considerations will play a more important 
 part than they did in the pre-war period. The resolutions passed at 
 the Paris Conference in 1916 suggest that this will be the case, and it 
 seems clear that the problem of regulating trade with reference to 
 measures of defence, and the problem of binding the Empire more 
 closely together by means of fiscal ties, will carry more weight than they 
 did formerly, while other new and non-economic considerations, such 
 as the idea of arranging our trade relations so that they may benefit 
 our Allies to a greater extent than neutral countries, and so that they 
 may benefit our former enemies as little as possible, may have their 
 place in the discussions that will arise. 
 
 When all this is admitted, however, it must not be forgotten that 
 there are economic principles underlying foreign trade principles 
 which cannot be negleoted in the formulation of a commercial policy. 
 
 It is sometimes said that the old fiscal question is dead that the 
 conflict is no longer one between Free Trade and Protection, and that 
 it has been moved on to new and broader lines. It is probably true 
 
8 
 
 that after the war the question will not be debated quite on the same 
 lines as hitherto, and the point at issue will not be merely the desirability 
 of a departure from, or the maintenance of, Free Trade. Political 
 and moral considerations, as I have already suggested, will be brought 
 into the foreground ; and in addition to this, new economic considera- 
 tions will be put forward. The erection of a tariff, for instance, may be 
 advocated on political or ethical grounds, but it may be possible to 
 show that the political or ethical ends, which it is desired to promote 
 by means of a tariff, can be equally well secured by adopting some other 
 course which would also be more advantageous from the economic 
 point of view. 
 
 I do not, however, believe that the old controversy between 
 Protectionists and Free Traders is dead ; for at its very roots there 
 still lies, as it has lain from the days of the mercantilists, the funda- 
 mental difference between those who look upon foreign trade from the 
 national, and those who regard it from the international, standpoint ; 
 and as long as this is so, the economic principles underlying foreign 
 trade cannot be thrown on the scrap-heap. 
 
 While recognising, then, that our commercial policy can at no time 
 be decided by economic considerations alone, and that still less is this 
 likely to be possible after the war, it seems, nevertheless, well worth 
 while to reconsider once more the economic principles on which com- 
 mercial policy has hitherto been largely based ; for should it, after the 
 war, be found desirable to give greater weight to political and moral 
 considerations than to economic motives, it is of the utmost importance 
 that we should realise that we are adopting a policy which, though 
 framed with the object of securing some moral or political ends, is 
 economically unsound. We must be quite clear that we are not being 
 rushed into a commercial policy for political or ethical ends in the 
 belief that it is also the policy which is economically the most advan- 
 tageous ; and I propose, therefore, to re-state once again the economic 
 principles which were believed to underlie our commercial policy 
 before the war. 
 
 A great deal of time and paper have been expended by English 
 economists, especially of the older school (economists in other countries 
 have not, as a rule, followed their example) in elaborating a special 
 theory of foreign trade or of international trade, as they usually 
 call it and even a special theory of international value. Foreign 
 trade is, on the whole, a more satisfactory term, for trade is, strictly 
 speaking, not international. When we speak of British trade, French 
 trade, German trade, and so on, what is really me.ant is trade carried 
 on by individual Englishmen or individual Frenchmen with individuals 
 living in other countries, and not trade between nations in the strict 
 sense, such as would be the exchange of Ireland for Java by England 
 and Holland ! 
 
 Nor is there any fundamental difference between the principles 
 underlying foreign trade i.e., the exchange of goods and services 
 between individuals living in different countries and the principles 
 
9 
 
 underlying the exchange of goods and services between individuals 
 living in the same country. What differences there are are not differ- 
 ences in kind. But when it is said that foreign trade is trade between 
 individuals, it is not intended to suggest that foreign trade is a matter 
 of no interest to nations as a whole, or that each individual State is 
 to leave its citizens to carry on foreign trade with complete freedom 
 from control ; for foreign trade is of the greatest importance, not merely 
 to individuals who engage in it, but to the countries to which those 
 individuals belong. Just as a wise State controls its domestic industry 
 and imposes restraints to individual liberty when this appears to 
 conflict with the general good, so also it may be necessary for a wise 
 State to place limits to the absolute freedom of individuals with regard 
 to the carrying on of foreign trade. State control in some directions 
 may even be more necessary in foreign than in domestic trade, for in 
 the former, international relations may be involved which can only 
 be arranged by those who can speak as national representatives, with 
 the authority of the State behind them. Even if it be admitted, 
 however, that State control is more necessary in foreign than in domestic 
 trade, the difference is one of degree, not of principle. 
 
 Another difference between foreign and domestic trade on which a 
 good deal of stress has been laid in the past is that labour and capital 
 are less mobile as between nations than they are within a single country. 
 This, again, is a difference in degree, and not one of principle, and it 
 is easy to exaggerate it, for neither labour nor capital is perfectly 
 mobile within a single country, and capital is now practically as mobile 
 as between different countries as it is within a single country. The 
 great bulk of the capital used in trade and industry consists of plant, 
 buildings, machinery, and other things which cannot easily be moved 
 from one part of the country to another, while the capital which is 
 mobile is new capital that is, money or some form of purchasing power 
 which has not yet embodied itself in concrete production-capital, and 
 which can move as easily from London to New York as from London 
 to Manchester. 
 
 There are, however, some definite factors to be taken into con- 
 sideration, which act as impediments to foreign trade, and which do 
 not appear at all in connection with domestic trade namely, differences 
 in climate, in natural resources, and in language. Differences in 
 climate account to a great extent for differences in conditions of labour 
 in different countries, and for differences in wage rates. Differences 
 in natural resources largely account for the direction which production 
 takes in various parts of the world i.e., the kind of goods produced ; 
 while the fact that difference in language is an impediment to exchange 
 requires no explanation. In addition, national characteristics, national 
 customs, and national sentiment still count for a good deal, and make 
 trade between the inhabitants of different countries less easy to carry 
 on than trade within a single country. Again, differences in the form 
 of government in different countries, the absence of a uniform currency 
 
10 
 
 and commercial legislation particularly when it takes the form of 
 tariffs have to be taken into consideration. 
 
 All these factors have to be borne in mind when examining the 
 economic principles underlying foreign trade, for they affect the 
 exchange of goods, although they do not alter the principles upon 
 which goods are exchanged. They make foreign trade a somewhat 
 less simple thing than home trade, but they do not make necessary a 
 special theory of value. 
 
 It is frequently said that foreign trade is simply a matter of barter, 
 goods being exchanged for goods, and exports and imports tending to 
 balance one another. These statements are broadly true, though at 
 first sight they are far from apparent ; for a glance at the foreign trade 
 returns of any year is sufficient to show that some countries, like Great 
 Britain, appear to import far more than they export ; while the exports 
 of other countries, like India, exceed their imports. This was, at any 
 rate, the case before the war.* The facts, therefore, do not at first 
 sight appear to bear out the theory. 
 
 The following problem also naturally arises : the ultimate object of 
 all the individuals who engage in foreign trade is to be paid in money 
 for the goods they sell ; but if foreign trade is nothing but barter, 
 how do they manage to succeed in this object ? 
 
 The way out of the first difficulty is not hard to find, for the statement 
 that exports tend to pay for imports, and vice versa, requires the 
 explanation that in foreign trade, just as in domestic trade, services 
 as well as goods are exchanged. The principal services exchanged by 
 the people of the United Kingdom with the peoples of other countries 
 are those rendered by our carrying trade and by loans of capital to 
 other countries, and neither the earnings of our carrying trade nor the 
 interest paid on capital abroad appear in the Trade returns. If these 
 are added to our exports, together with the payments for some minor 
 services, it will be found that our exports do approximately balance 
 our imports ; and the same thing is true of the trade of the world, 
 though at no given moment is there an exact balance of exports and 
 imports between the various countries. 
 
 The answer to the question : How is it that those who are engaged 
 in foreign trade ultimately obtain payment in money, in spite of the 
 fact that foreign trade is barter ? is less easy to state in a few words, 
 and I have not space for many. A complete answer would involve an 
 explanation of the mechanism of the foreign exchanges ; but, put 
 very shortly, it is that those who engage in foreign trade ultimately 
 receive payment in money for the goods they sell through the medium 
 of bills of exchange or other instruments of credit. 
 
 * Imports into the United Kingdom, 1913 . . . 768,734,739 
 Exports from 525,245,289 
 
 Imports into India, 191203 152,307,"00 
 
 Exports from ,, , 171,233,000 
 
 Statistical Abstract 
 
11 
 
 The system works out, broadly speaking, and taking the simplest 
 possible case, somewhat as follows : If an Englishman buys goods 
 from a Frenchman, the Frenchman ultimately receives payment for 
 them in money from another Frenchman, who has bought goods from 
 another Englishman, and who owes him money for what he has bought. 
 The second Englishman is ultimately paid for the goods he has sold 
 to the second Frenchman by the first Englishman who owes money to 
 the first Frenchman. This roundabout business is going on on a large 
 scale all the time all over the world, and it is conducted by means of 
 bills of exchange and other instruments of credit, which for the most 
 part consist of pieces of paper from one man telling some other man to 
 pay him or somebody else a certain sum of money by a certain time. 
 By this means everybody ultimately gets paid in money, though very 
 little passes from country to country, so that trade is kept in what 
 is in essence a state of barter. Practically the whole of this financial 
 side of international exchange is conducted by the banks and discount 
 houses, which act as intermediaries beween buyers and sellers. 
 
 This is, of course, a very incomplete explanation of a very intricate 
 subject, but it may, I hope, be sufficient to show that in course of time 
 an elaborate and delicate mechanism has gradually been built up which 
 greatly facilitates the exchange of goods between the peoples of different 
 countries. 
 
 The foregoing explanations appeared to be necessary for a complete 
 understanding of the principles which underlay our commercial policy 
 before the war. This policy the Free Trade policy, as it was called 
 was based on the view that the economic interests of the country were 
 best promoted by freely admitting all the goods we wished to buy 
 from other countries, with the exception of a very small number of 
 commodities upon which customs duties were imposed for revenue 
 purposes only. It was held by the supporters of this policy that it was 
 to the advantage of the country to obtain the goods it required from 
 those parts of the earth where they could be produced most advan- 
 tageously either as to quality or cost, and that we should devote our- 
 selves to forms of production which we could carry on better and more 
 cheaply than our neighbours. 
 
 We were dependent on foreign countries for much of our raw material, 
 some of which we could not produce at all ourselves, and for a very 
 large proportion of our food, which we could not produce so cheaply 
 as other countries ; while we had, on the other hand, succeeded in 
 securing a pre-eminence in certain branches of manufacture. 
 
 As imports are paid for by exports, and vice versa, it was believed 
 at all events by Free Traders that any check to our imports would 
 be followed sooner or later by a corresponding check to our exports, 
 and that the most likely way of inducing other countries to follow our 
 example was to abide by Sir Kobert Peel's maxim : " The only way of 
 fighting hostile tariffs is by free imports." In defence of this policy 
 it must be admitted that we did succeed in obtaining most -favoured- 
 
12 
 
 nation treatment from practically all the protectionist countries of the 
 world. 
 
 If the civilised world consisted of one single State it can hardly be 
 doubted that universal Free Trade would be the most satisfactory 
 policy for it to adopt at any rate, from the purely economic standpoint; 
 and it is mainly owing to the fact that the civilised world is split up 
 into separate and independent States that a different policy has been 
 adopted by almost every country except our own. It is certainly 
 remarkable, that in spite of the machinery that has been devised for 
 facilitating foreign trade, and in spite of the fact that there are already 
 obstacles to exchange between the inhabitants of different nations, 
 which are not present to the same extent in the case of trade within 
 a single nation, that almost ever since there was anything worthy of 
 the name of foreign trade the nations have vied with one another in 
 erecting barriers in the form of tariffs, with the object of making the 
 exchange of goods between different countries still more difficult. 
 The explanation of this is to be found mainly in the importance attached 
 to the furthering of national interests, and in the fact upon which I have 
 already insisted, viz., that regard for national interests may make it 
 necessary that economic considerations should in some instances give 
 way to political or other considerations which are, or appear to be, 
 paramount. 
 
 While protection has been adopted largely for political and other 
 non-economic reasons, it has generally been defended as being also 
 the best policy from an economic point of view. Tariffs are, of course, 
 erected for purposes other than pure Protection. They are set up as 
 a means of raising revenue, or as a means of bargaining with other 
 Protectionist nations, or as a weapon to be used for purposes of 
 retaliation. 
 
 Leaving these uses of tariffs on one side, the economic arguments 
 in support of Protection pure and simple can be reduced to a compara- 
 tively small compass. They are all based on the belief that Protection 
 is necessary for the increase of productive power. Thus, the protection 
 of infant industries is urged as being necessary in order to increase 
 productive power in the future, and the fostering of old or well-estab- 
 lished industries which are thought to be weaker than their foreign 
 rivals is also advocated in order to prevent the diminution of productive 
 power. It is believed that national power and national greatness 
 depend largely upon the fullest and most productive employment of 
 a, nation's labour and capital ; and that these are best secured by 
 protecting national industries from foreign competition. The erection 
 of tariffs is by no means the only method by which the policy of 
 Protection can be carried out. Industries may be protected by means 
 of bounties or other forms of Government subsidy, and, in fact, wherever 
 national funds are devoted to the support or encouragement of any 
 particular industry or group of industries, such industries may be 
 fairly described as protected 
 
13 
 
 I have tried to state as succinctly as possible the principles under- 
 lying the policy of Free Trade and the policy of Protection, but I do 
 not propose to examine or discuss the arguments for or against either 
 policy : that has been already done ad nauseum. It does, however, 
 seem desirable, when a change of policy with regard to a particular 
 industry like agriculture is recommended largely on non-economic 
 grounds, to examine the question as to whether economic considerations 
 can be altogether set on one side or at any rate, what the result is 
 likely to be if they are neglected- and I now turn more directly to 
 the subject with which this paper is to deal namely, commercial 
 policy in relation to our food supply. 
 
 The change which is now widely demanded with regard to our food 
 supply may be stated in a very few words. It is that we should produce 
 more of our food in our own country, and purchase less of it from over- 
 seas ; and the principal argument for the change is the necessity of 
 greater security in time of war. Other reasons are also brought forward, 
 such as the desirability of our having a larger rural population, the 
 suitability of agriculture as a means of employment for ex-soldiers, 
 its general advantages over town industries in the matter of health, 
 and other arguments based on social and ethical considerations, The 
 main argument, however, is the argument for defence. 
 
 The questions I propose to examine are : first, whether the change 
 proposed with regard to our food supply for defensive purposes, and 
 the methods suggested for bringing it about, can be justified in any 
 degree on economic grounds ; and, secondly, if not, whether it is 
 desirable to adopt measures which are based on non-economic con- 
 siderations that is, whether it is desirable to " sacrifice opulence for 
 defence." 
 
 It appears necessary to raise the first question, as, although agri- 
 cultural reform is urged mainly on grounds of defence, it is frequently 
 claimed that measures which are said to be necessary for national 
 security will also be economically advantageous. Thus, Mr. A. D. Hall 
 writes : " We take as starting-point that the State must secure the 
 more intensive cultivation of the land of the United Kingdom and an 
 increasing employment of men upon the land both as an insurance 
 against war and as a means of reducing the national indebtedness. 
 The process of readjustment may involve some cost to the State ; 
 but the necessity is as great as that of maintaining an army or a navy, 
 with this difference, that the expenditure is only an investment on which 
 a commercial return will be obtained as soon as the readjustment is 
 complete."* 
 
 Before the outbreak of the present war we imported about half 
 of our total food supply, including four-fifths of our wheat, and paid 
 for this mainly by exporting manufactured goods. 
 
 Now it is unlikely that we could become absolutely self-sufficing 
 as regards food even if we wished to do so, except at a cost which would 
 
 
 * Agriculture after the War (A. D. Hall), pp. 37-38. The italics are mine. 
 
14 
 
 be prohibitive ; but we could become sufficiently self-sufficing to 
 enable us to meet a crisis e.g., to enable us to hold out against a 
 blockade lasting for a considerable period. We could also make 
 ourselves much more nearly self -sufficing in normal times than we were 
 formerly. In order to do this, a considerable increase in our arable 
 land would be necessary, and a large amount of the land which has 
 been put down to grass during the past forty years would have to be 
 broken up. The new arable land would be the means, not merely of 
 increasing our output of wheat, but on it agricultural experts believe 
 that we could also maintain if not surpass our present output of 
 meat and milk from grass land, growing foodstuffs on the arable land 
 for live stock as well as for human beings. In a national emergency 
 we could live on our live stock, and grow more food on our arable land 
 for ourselves. 
 
 But the immediate economic advantage of such a reform is, 
 apparently, not sufficiently certain to induce agriculturists to carry 
 it out without very definite guarantees from the State, and if the change 
 is to be made at all at all events, in time to be of any use in the present 
 crisis it is maintained by those who recommend it that British agri- 
 culture will have to become a State-subsidised industry. 
 
 During a great national crisis like that involved by the present war, 
 a discussion of the economic effects of a particular policy is not likely 
 to receive much attention, for most people seem to be ready to adopt 
 almost any heroic remedy which is suggested without stopping to 
 count the cost ; and there is, perhaps, something to be said for this 
 light-hearted recklessness during a national crisis. But when changes 
 are recommended, not merely for the purposes of the war, but with 
 the intention that they should be continued into the post-war period 
 when it is hoped in many quarters that reforms possibly made necessary 
 by the war may become part of the permanent policy of the country 
 then it is important that they should be scrutinised with the greatest 
 care. 
 
 That the agricultural reforms which are now being recommended 
 in the first instance as war measures, are also intended at any rate, 
 by some of their exponents to apply to agriculture, if not permanently, 
 for a great number of years after the war, may be seen from the following 
 quotation from the report of Lord Selborne's Committee : " We are 
 confident that as the years pass by and agriculture becomes more 
 intensive in the United Kingdom, an increase of production will be 
 reached which would now appear impossible to any farmers, and that 
 if the agricultural policy which we recommend is carried out steadily 
 and continuously a great change will be effected within a generation,"* 
 the policy recommended by the Committee being subsidies to agri- 
 culture in the form of fixed minimum prices for wheat and oats. 
 
 *Part I of the Report of the Agricultural Policj' Sub-Committee, 
 Cd. 8506 (p. 7). 
 
15 
 
 How far can such a change, and the methods proposed for bringing 
 it about, be regarded as in the best economic interests of the country ? 
 The fact that we have hitherto imported so much of our food does not 
 of itself show that food can be imported more cheaply than we can 
 grow it at home ; for it is possible that we may be able to produce, 
 e.g., both wheat and certain forms of manufactured goods more cheaply 
 than can be done in Canada or Argentina. But even if this were so, 
 it might still be to our advantage to devote most of our energies to 
 manufactures, leaving Canada and Argentina to supply us with wheat. 
 
 It is, however, clear that most of the food we have hitherto impoited 
 we have imported because it could be produced more advantageously 
 as regards either quality or cost elsewhere than in our own country. 
 The fact that we are told that the only way in which we can become 
 more nearly self-sufficing as regards food is by subsidising agriculture 
 even with the very high prices at present prevailing certainly seems 
 to show that in the opinion of those who are advocating a change of 
 policy it is likely to be more economically advantageous for us to buy 
 than to produce in the future. 
 
 To become more nearly self-sufficing, then, would mean an increase 
 in the cost of production of the nation's food. It would mean that we 
 should cease to buy some of our food in the cheapest market ; and this 
 would appear to show that the methods adopted in bringing about 
 such a change cannot be justified on purely economic grounds. It 
 may, of course, be argued that the plan of fixing minimum prices, 
 either on all wheat and oats produced in the country and brought to 
 market, or based upon the acreage under wheat and oats, will not in 
 reality cost the nation anything or increase the price of food, and 
 that it is most improbable that prices will fall below the minima 
 suggested for many years to come. With regard to the possible changes 
 in price levels after the war it is impossible to speak with any certainty. 
 But the mere fact that the agriculturists demand guarantees as to 
 prices before they would consent to make the changes required, and 
 that the Government thinks it necessary to give the guarantees 
 demanded, seems to show that a fall in prices immediately after the 
 war is contemplated as being at least within the bounds of possibility. 
 If it is certain that prices will not fall below the minima, why the 
 alarm of the agriculturists, and why fix the minima ? 
 
 But even assuming that prices will not fall below the minima sug- 
 gested, the cost of administering any scheme for subsidising agriculture 
 will be considerable. The work of the Board of Agriculture or of some 
 other Government office will be increased, and a large new staff of 
 inspectors will have to be employed, the cost of which will have to be 
 borne by the taxpayers. 
 
 Again, as to the actual changes proposed : there is no doubt that 
 we could largely increase the output of wheat and oats in our own 
 country, and the experts appear to agree, as I have already said, 
 that we could at the same time maintain if not actually augment 
 our present output of meat and milk. But the question cannot be 
 
16 
 
 regarded with reference to output alone. Output must be considered 
 in relation to cost. Net product, and not gross product, is the true 
 test of economic production. It is generally recognised that the 
 production of meat and dairy produce on arable land requires more 
 capital, employs more labour, involves more supervision, and is exposed 
 to greater risks than their production on pasture. But as to whether 
 the actual cost is greater or less on arable than on grass the experts 
 are not agreed, and, as far as I am aware, there is no sufficient data 
 available upon which to form an opinion. Nothing can be gleaned 
 on the point from Denmark, where dairy-farming on a large scale is 
 carried on upon arable land, the Danish farmers being apparently 
 quite as bad at account-keeping as our own. 
 
 The point, however, is one upon which definite conclusions ought 
 to be reached, for if it should be found that in our efforts to increase 
 our output of cereals we are increasing the cost of production of meat 
 and dairy produce, the case for making the change is materially 
 weakened. It may be suggested that if it is really more profitable to 
 produce meat and dairy produce on arable land, self-interest would 
 have led British farmers to adopt this system of agriculture. But the 
 British farmer does not look at profits alone or, rather, like other 
 business men, he looks at net profits, not at gross profits. Arable land, 
 as I have already said, needs more supervision than grass that is, 
 more work for the farmer himself and in many cases he sets off the 
 possible extra profits against the extra work and additional risks, 
 and decides in favour of a smaller but more certain return and an easier 
 life for himself. In addition, there is the extra capitalwhich is required, 
 and which has not always been available. 
 
 The fundamental point, however, which must not be lost sight of, 
 is whether there is the slightest chance in the near future of our being 
 able to produce the wheat we require as cheaply as we can buy it, and 
 if, by adopting non-economic methods now, we can build up a system 
 of agriculture which will eventually be able to hold its own without 
 artificial aids, and also supply us with much more of the food we 
 require. 
 
 It will simplify the problem if I narrow it down to the question of 
 wheat. In favour of our being able to produce more of the wheat 
 we require as cheaply as we can buy it, it may be argued that forty 
 years ago we produced a great deal more than we do now, and immediately 
 before the war we produced one-fifth of our total wheat supply when 
 the price was 32s. 9d. a quarter ; while again, an even larger amount 
 of wheat was grown in 1894 when the price was only 22s. 10d., than in 
 1913. But, in reply to this it may be pointed out that in the past 
 forty years large new wheat areas have been developed in different 
 parts of the world, while the changes in cost of production have 
 been until recently in favour of other countries as compared with 
 the United Kingdom. 
 
 Again, the wheat grown in 1894 and 1913 was probably produced 
 on the best land and under the most favourable conditions, and it 
 
17 
 
 does not follow that it could have been produced at a profit under 
 less favourable conditions on inferior land. Nor does it even follow 
 that all the wheat produced was grown at a profit. The force of 
 custom is strong where farming is concerned, and rotation schemes, 
 together with the need for straw, may have made it worth while to 
 grow wheat for low profits or in some cases for no profits at all. 
 
 It is, however, clear that a considerable supply of wheat can be 
 grown at a profit in the United Kingdon with very low prices without 
 the aid of State subsidies, and of course if prices remain considerably 
 above the 1913 price of 32s. 9d. a quarter, a larger supply of home- 
 grown wheat could be produced at a profit, provided that the cost of 
 production is not increased proportionately ; but even then it is by 
 no means certain whether we could produce as cheaply as some other 
 countries. Australia is one of the most distant countries from which 
 we import wheat, and although we only imported from Australia 
 some twenty per cent, of our total imports of wheat from the whole 
 of the Empire, owing to the high cost of transport from Australia, 
 a comparison between the cost of Australian wheat and of wheat grown 
 in this country is likely to be particularly favourable to the latter. 
 In 1913, when we were only producing about 20 per cent, of our total 
 wheat supply, when the price was 32s. 9d., the cost per quarter of 
 Australian wheat delivered in Great Britain was 32s. 6d. The cost 
 of carriage accounted for more than 25 per cent, of the total cost, 
 and in addition the wheat was a better quality than English wheat.* 
 
 The average price for Australian wheat for the four years 1910-13 
 inclusive was 36s. lid., which therefore allowed a fair margin of profit. 
 Exact figures as to the cost of production of wheat in other countries 
 are not available, but it is probable that countries lying within easier 
 reach of our ports than Australia are at a still greater advantage with 
 regard to supplying us with wheat than she is. 
 
 But what as to the future ? It may be that the cost of production 
 of wheat in other countries may increase, and that the growth of the 
 populations of other nations may reduce the supply available for 
 export to this country, so that it may become, not merely necessary 
 but profitable for us to produce more of our food ourselves. When 
 this time arrives, however, the change would come about naturally. 
 The new demand for home-grown wheat would create the supply, 
 and to adopt at the present time artificial means to bring about a state 
 of things which would come about in the natural course of events, 
 would appear to be a somewhat wasteful proceeding. 
 
 One other point in this connection remains to be mentioned. If it 
 is more profitable to buy a large part of our food than to produce it, 
 and if, notwithstanding this, we decide to produce instead of to buy, 
 we shall gradually have to transfer some of our labour from manu- 
 factures to agriculture, and new capital will be diverted to agriculture 
 
 *For this information I am indebted to the Institute for Research in Agricul- 
 tural Economics, University of Oxford. 
 
18 
 
 that is, industry will be turned from a more to a less profitable channel 
 The result will be a diminution in the national income or at least, 
 a less rapid increase than would have taken place had the change not 
 been made. This at a time when we shall have an enormous debt to 
 pay off, when large sums are needed for pensions for soldiers' widows 
 and the disabled in short, at a time when the most productive employ- 
 ment of labour and capital will be more than ever essential. There is 
 no need to labour the point further ; enough has been said to show 
 that a subsidised agriculture will mean dearer food, and that neither 
 the changes suggested nor the methods proposed for carrying them 
 out can be justified on purely economic grounds. 
 
 I now turn to my second question namely, if the change cannot 
 be justified on economic grounds, whether it is desirable to adopt 
 measures which are based on non-economic considerations i.e., 
 whether it is desirable to " sacrifice opulence for defence." 
 
 That to be prepared for war is the only way to keep the peace is 
 a doctrine which, in the minds of many people, the present war has 
 done much to discredit ; and there is probably much truth in the 
 opposite view namely, that to concentrate attention continually on 
 the possibility of war is one of the surest ways of bringing it about. 
 But against this, it may be argued that where any of the more powerful 
 nations are making preparations for defence which can at any moment 
 be used for purposes of offence, all the others are obliged to follow 
 their lead ; and it certainly seems improbable that any single nation 
 is likely in the near future to reach such a high standard of morality 
 as to abandon on pacifist grounds all military and naval defences 
 while living in the midst of an armed world. 
 
 Assuming, then, that defensive measures will be regarded as indis- 
 pensable during the coming years, the questions which naturally arise 
 are whether an attempt to make ourselves more nearly self-sufficing 
 with regard to food as a measure of defence is necessary, and whether 
 it is not likely to turn attention away from military, naval, and other 
 measures which are more strictly regarded as defensive. 
 
 To deal first with the second point : if we are to spend millions a 
 year on armaments, surely these should be adequate for national 
 safety without the imposition of an additional burden of dearer 
 food as a defensive measure. Is it not better that steps should be taken 
 to make an effective blockade impossible, and that we should know 
 how much we are spending for that purpose, than that we should, 
 by indirect means which are supposed to have economic advantages 
 attached to them, attempt to make a possible blockade unavailing ? 
 
 As to how far it is necessary to make ourselves more self-sufficing 
 with regard to food for the sake of national security, much turns on 
 the question as to the weapons with which future wars are likely to 
 be waged. If we could be certain that the greatest danger to which 
 we could be subjected in. the next war was from a vigorous submarine 
 campaign, some steps in the direction of making ourselves less dependent 
 on overseas supplies would seem to be desirable. But the submarine 
 
19 
 
 may become obsolete to-morrow, and the next war may find us with 
 a subsidised agriculture as a protection against a danger which we 
 should not have to encounter. 
 
 The importance of regularity of supply is a point which must not 
 be overlooked. Hitherto we have obtained wheat, for instance, from 
 a large number of countries, but a regular supply from very few ; and 
 when one source has failed us it has been all to the good that, owing 
 to our free market, we have been able to turn to another. One of the 
 main reasons why our supply from so many parts of the world is so 
 irregular is that in all wheat-growing countries there are occasional 
 bad harvests. There is a partial failure of our own harvests once in 
 seven years on the average, and if we have ceased to draw any large 
 part of our supplies from other countries, it will not be easy to do so 
 again in an emergency. This of course, is not an argument against 
 our attempting to make ourselves more self-sufficing as regards wheat, 
 but it does suggest a further difficulty in the way of our being able to 
 do so. If we narrow the area of supply, the supply is likely to be less 
 regular. 
 
 A plan which has often been proposed namely, the storing of wheat 
 in national granaries, to be used in an emergency, might in some respects 
 be more satisfactory than the subsidising of agriculture, for the stored 
 wheat might be used even in normal times as a means of regularising 
 the supply and also of steadying prices. But many of the objections 
 I have already urged against a subsidised agriculture apply with equal 
 force to national granaries. 
 
 The political results of our devoting our energies more to agriculture 
 and less to manufacturing industries cannot be ignored. The countries 
 from which we formerly imported food will have to find new markets 
 for their products, and this may mean that commercial ties between 
 some other countries and ourselves will be weakened, while they will 
 be strengthened between our competitors. If we buy less wheat from 
 Canada, for instance, it is possible that the United States with their 
 growing population may take the Canadian supply, while the Canadians 
 may take American manufactures in exchange instead of ours ; and- 
 the closer commercial relations thus created may evenutally lead to a 
 weakening of the political union between Canada and this country. 
 
 Of course to this it may be replied that it is not intended that our 
 subsidised agriculture should make us absolutely self-sufficing, and that 
 it might be so arranged as to make us self-sufficing as regards supplies 
 from foreign countries, all the food we require being produced within 
 the Empire. But here again we shall have to face the possibility of 
 a failure of the harvest in the Dominions simultaneously with a failure 
 at home. It is difficult to see, also, how this plan could be carried out 
 without a tariff and a complicated system of preference ; and it is 
 still more difficult to see how a tariff giving a preference to imports 
 from the various parts of the Empire could be successfully combined 
 with any scheme for fixing minimum wheat prices in this country. 
 The question of preference is too complicated for any adequate 
 
20 
 
 discussion here, but it may be pointed out that if imperial wheat were 
 admitted free, or given a preference as against supplies from other 
 countries, agriculture might develop so rapidly in the self-governing 
 Dominions and India that instead of importing four-fifths of our 
 wheat from the rest of the world, as we did before the war, we might 
 before long find ourselves importing four-fifths from the rest of the 
 Empire i.e., we should still be importing the bulk of our supply 
 from abroad in which case our national security would be no more 
 assured than before. In fact, it seems almost impossible to reconcile 
 the policy of making the different parts of the Empire self-sufficing 
 with regard to their food supply as a measure of defence, with the 
 policy of drawing them more closely together by means of economic 
 ties, for the greater the success obtained in making each part secure, 
 the more disunited the Empire will become ; while the more nearly 
 we approach to an Empire united by economic ties the less must 
 be the self-sufficiency of each of its parts. 
 
 It is by no means the object of this paper to decry all attempts 
 to develop British agriculture so that it may become a more prosperous 
 industry. My aim has been merely to consider how far it is necessary 
 to introduce agricultural reforms on grounds of national safety, how 
 far the plan of subsidising agriculture is likely to succeed in that object, 
 and how far it is likely to be detrimental to the economic interests 
 of the country as a whole. Are there no alternative policies with regard 
 to our food supply that could be adopted ? There appear to be two, 
 and these it should be possible to combine : (1) The development of 
 agriculture by economic means, and (2) Emigration. 
 
 There is no doubt whatever that our agriculture could be made 
 far more productive than it is without resorting to any artificial methods 
 for its development. Mr. A. D. Hall, an ardent advocate of a subsidised 
 agriculture, writes as to this : "In every district certain farms stand 
 out ; and if the neighbouring holdings, with the same class of land 
 and the same opportunities were only worked with equal intelligence 
 and energy there would be no agricultural problem to discuss"-;* 
 and again : " It is not too much to say that if the farming throughout 
 Great Britain reached the standard, not of the best, but of the good 
 farms existing in every district, there would be an increased production 
 of food of from 10 per cent, to 15 per cent, without any addition to the 
 existing proportion of arable land."f Why is it, one may well ask, 
 that farming throughout Great Britain does not reach the standard 
 of the good farmers existing in every district ? The reasons are to 
 be found mainly in the fact that farming is not as a general rule seriously 
 treated as a business, in the neglect of science, and in the inadequacy 
 of agricultural education. It seems unlikely that agriculture will 
 ever become really prosperous in Great Britain until the farm is run 
 more on the lines of other businesses until industrial farms on a large 
 
 *Agriculture after the War, p. 27. 
 t Agriculture after the War, p. 100. 
 
21 
 
 scale, with up-to-date machinery, with highly-trained managers, and 
 with labour organised in strong trade unions and living under decent 
 conditions, have superseded small farms run on obsolete and old-fashiond 
 lines.* 
 
 Mr. Middleton's Report on " The Recent Development of German 
 Agriculture " has attracted a good deal of attention of late, but one fact 
 which it reveals namely, that in 1910 the total expenditure on agri- 
 cultural instruction in Prussia was about 484,000, while the total 
 expenditure in England and Wales in 1910-11 was about 117.000 
 appears to have been hardly noticed.f A larger expenditure on agri- 
 cultural education would probably be of far more benefit to agriculture 
 and to the nation in the long run than any that is likely to be derived 
 from the manipulation of prices. 
 
 Whether farming should become a national industry, whether 
 large-scale industrial farms should be owned and controlled by the 
 State or municipalities, or whether they should be left in private 
 hands, is a question which it would take too long to discuss here, and 
 I must content myself with merely stating the lines upon which, as 
 it seems to me, reform should proceed, leaving questions of administra- 
 tion on one side. 
 
 Of course the reforms which are here suggested cannot be brought 
 about in a day, and if a largely increased output of agricultural produce 
 is required immediately, other measures will have to be adopted ; 
 but on Mr. Hall's own showing, when times once more become normal 
 large agricultural developments are possible without the necessity of 
 making any great demands upon the taxpayer, or without involving 
 disturbance to other industries, or changes in our commercial policy. 
 
 I have so far considered the question from the side of supply, but it 
 is possible also to look at it from the side of demand. It may turn out 
 to be wiser to diminish the demand for home-grown food than to attempt 
 an increase in the supply by non-economic means ; and emigration 
 would tend to bring about this result. There are great possibilities of 
 agricultural development in the self-governing Dominions far greater 
 than in this country. But development in the Dominions will be slow 
 unless the supply of labour there can be largely increased. This 
 country could, after the war, doubtless supply much of the labour that 
 is needed, and it is at any rate arguable that cheaper and better food 
 might be grown for the mother country by British labour in the 
 Dominions than by British labour at home. 
 
 There are, no doubt, serious objections to emigration, and the cry 
 of : " Surely there is room on the land in the old country for those 
 who are willing to work " may very naturally be raised. But it is 
 possible that the development of agriculture at home could go on 
 
 *For a fuller discussion of the policy of industrialised farming, see " Some 
 Problems of Urban and Rural Industry" (published by Ruskin College), 
 Paper entitled "The Place of Agriculture in Industry," by C. S. Orwin, 
 also Speech by Arthur W. Ashby (p. 89). 
 
 f The Recent Development of German Agriculture" (T. H. Middleton), j>. 26. 
 
22 
 
 side by side with the development of agriculture in the Dominions 
 by means of emigration. There is much to be said in favour of a larger 
 rural population in this country, on social and other grounds ; but it 
 will not merely be wasteful, but disastrous, to put men on to the land 
 without reference to the amount which it is possible for them to produce. 
 The output of an acre of land may be increased by doubling the number 
 of men who are working upon it, but the chances are that the output 
 will not be doubled, and unless it is doubled, the output per man will 
 have diminished, and those working upon it prior to the change will 
 be poorer than before. 
 
 An increase in the number of small holdings may be desirable apart 
 from economic considerations, because there are numbers of men 
 who can live happy lives spent mainly in hard work on small pieces 
 of land, obtaining but meagre returns, and there is no reason why 
 small holdings on a considerable scale should not exist side by side 
 with large industrial farms. But for the young man with energy and 
 enterprise agriculture in Canada might offer both a better life and 
 larger returns for his labour than he could hope for on a small holding 
 at home. 
 
 Emigration, it may be said, means leaving friends and old associations, 
 and the breaking of family ties. But. on the other hand, how often 
 do the young men and women who leave their native villages in rural 
 England for work in our industrial towns return to their homes ? 
 It really might not make very much difference in this respect whether 
 a boy from Somersetshire settled in a Lancashire town or on a Canadian 
 farm ; and with the improvements in travelling facilities which are 
 likely to take place in the near future, it may become almost as easy 
 for him to return to his native village from Canada, as it was, not so 
 very long ago, for him to take the journey from the North of England 
 
 I am not in any sense writing as an advocate of emigration, but it 
 seemed worth while to point out that it is, at any rate, a possible alter- 
 native to the policy of increasing our home-grown food with the aid 
 of non-economic devices. 
 
 If the nation should decide against emigration and in favour of 
 encouraging young men and women to remain in the mother-country, 
 the question arises as to whether it is necessary or desirable that more 
 than threequarters of the population of England and Wales should 
 live in towns and less than a quarter in the country.* I have already 
 shown that to draw more men into agriculture than the industry 
 requires would be disastrous ; but while we may not want more men 
 on the land, we certainly want more people in the country ; and a 
 distinction should be drawn between the cry of " Back to the land " 
 and the cry of " Back to the country." The opinion appears to be 
 widely held that agriculture is practically the only industry which can 
 successfully be carried on in the country. But is this so ? Why should 
 
 * Urban population : 78.1 per cent. ; Rural population : 21.9 per cent. (Census 
 for England and Wales, 1911). 
 
23 
 
 we not spread out our industries instead of keeping them, and the people 
 whom they employ, cooped up in unlovely towns ? Could not buttons 
 and bedsteads be made just as well in the Warwickshire villages as in 
 Birmingham ? Is it essential that boots should be manufactured in 
 Northampton and in the East End of London ? Could not a great 
 deal of our clothing be produced in the country districts ? and could 
 not agricultural machinery be made in the midst of the industry 
 where it is used ? to take a few examples. In fact there are probably 
 very few industries which it would be impossible to carry on quite 
 successfully in the country. 
 
 ' There are two obvious difficulties coal and transport. But the one 
 could be overcome by a more extended use of electricity by means 
 of large electric power stations, placed as far as practicable in the 
 neighbourhood of the coal mines,* and the other by light railways 
 and motor services and improved organisation of our railway system. 
 
 The development of agriculture on the lines I have already suggested 
 will of itself not be sufficient to keep young men and women of enterprise 
 from seeking work in the towns, and the only way to prevent this, 
 as it seems to me, is to bring into the country some of what is best 
 in town life some of the amusements, the larger choice of occupations, 
 the opportunities of self-development and social intercourse, which are 
 in a great measure denied to country dwellers. An industrial population 
 working side by side with those who work on the land would both 
 confer and receive benefits. The monotony of the life of the agricultural 
 labourers would be relieved, while those engaged in manufacture 
 would gain in health and physique. Agriculture itself would also 
 gain, for many of the industrial population would turn to agriculture 
 as an interest in their leisure hours. The English people are, after all, 
 an out-of-door race, lovers of country sports and of the country. The 
 most inveterate townsmen love flowers, and do their best to obtain 
 even the smallest strip of garden. 
 
 But I am certain to be told that my scheme will entirely destroy 
 the beauty of the country and the charm of country life. No such 
 thing, however, need be the result of the changes I have in mind ; for, 
 as Mr. Hartley Withers has said : " We might imagine England one 
 vast Garden City, dotted over with factories, each of which might be 
 as beautiful as a cathedral, embowered and surrounded by fruit trees 
 and gardens, in which a highly educated and technically trained 
 population would work for five or six hours a day, and spend the rest 
 of their time in intellectual leisure and healthy exercise and home 
 life under ideally happy conditions. "f This is, of course, an idealistic 
 picture, but it is surely well to have an ideal before us. 
 
 *For the possibilities of the application of electricity to industry, see " The 
 Nation's Wealth," by L. G. Chiozza Money, Chap. XII. 
 
 ]"The Unity of Western Civilisation," edited by F. S. Marvin, p. 219. 
 
24 
 
 I have wandered far from the subject of national defence and a 
 subsidised agriculture ; but to many of those who advocate a subsidised 
 agriculture as a means of defence the idea is attractive because they 
 think it will be possible to combine with it the bringing back of the 
 people to the land. My object has been to show that there is another 
 way in which this can be brought about. The immediate question 
 which we have to discuss, however, is whether we wish to subsidise 
 agriculture for the sake of national security in the future. If, when 
 peace comes, we find that the world is in such a state as to make it 
 appear that future wars are inevitable, then we shall decide to adopt 
 a "nationalist" policy, but we must be prepared to pay the price 
 with little certainty that we shall gain the security for which we have 
 paid. If, however, we find that the nations are drawing together 
 in the interests of the peace of the world, and that the world is likely 
 to become a place in which democracies can live together and work in 
 harmony for the welfare of mankind, then we shall develop our agri- 
 culture without reference to the possibilities of future wars, and shape 
 our commercial policy in such a way, that it may help to bring about 
 the most advantageous division of labour amongst the nations, with 
 the freest possible exchange of goods and services between their peoples. 
 
 In speaking on his paper, Mr. Sanderson Furniss- said that the 
 conference would naturally involve a good deal of discussion on com- 
 mercial policy, for commercial policy was the point around which 
 international relations and economics might be said to meet, and he 
 had thought it worth while to restate once again the principles upon 
 which our commercial policy before the war was believed to be based, 
 and some conflicting theories of foreign trade, namely, the theory of 
 Free Trade and the theory of Protection. He intended the first seven 
 pages of his paper to be as much an introduction to the conference 
 as an introduction to the paper itself. 
 
 While political and ethical arguments, which must be considered, 
 would be brought forward in support of a change of policy, it was 
 important to keep the economic point of view well in the foreground. 
 The fiscal controversy was not dead, though it might have moved on 
 to a somewhat different plane. There were still people who approached 
 the question from two entirely different standpoints, from what he 
 had called in the paper the national and the international points of view. 
 The objects aimed at might have something in common, but the 
 method of approach was different. 
 
 The main argument of the paper was suggested by the question as to 
 whether it was desirable to subsidise agriculture so that it might be 
 developed as a means of defence in a national crisis, or whether we should 
 continue to trust to being able to keep the seas open by ordinary methods 
 of defence. The question was not merely one of national expenditure- 
 many other factors had to be taken into consideration. The speaker 
 then summarised the main points of his paper, and suggested several 
 
25 
 
 questions for discussion. He wished to make it quite clear that he 
 distinguished carefully between changes which were proposed for the 
 purposes of the war, and changes which were intended, in some quarters, 
 to become part of the industrial policy of the nation. 
 
 In expanding one or two points, he asked whether we were quite 
 certain that the fixing of minimum prices for wheat and oats, as had 
 been done in the Corn Production Act, was really the best way of 
 getting the extra supply of food that we required. Might not fixed 
 prices remove a stimulus to production and perpetuate old-fashioned 
 and obsolete methods ? This was an important matter, and especially 
 in connection with farming. 
 
 Again, was it quite certain that to make ourselves self-sufficing 
 with regard to food would really be a guarantee of winning wars in 
 the future ? Was it not the case that what success we had had in this 
 war had been mainly due to our surplus wealth for the most part 
 the product of our manufacturing industries ? The countries which 
 had shown the greatest staying power during the war were those 
 whose manufactures were highly developed, and not agricultural 
 countries. He would be told that Germany had developed both 
 manufactures and agriculture, and this was, to some extent, true. 
 But Germany had only done so by placing a great strain upon her people, 
 and surely after the war we should not wish to emulate Germany in 
 her military preparations. 
 
 With regard to the suggestions at the end of the paper, they were not, 
 strictly speaking, alternatives to the development of agriculture as a 
 means of defence, but he believed that it was possible to realise many 
 of the objects of those who were in favour of a subsidised agriculture, 
 by other and less objectionable methods. 
 
 If a future war was regarded as inevitable, we should probably be 
 driven into some policy which was not economically the most advan- 
 tageous. In that case, let us know what we were about. The answers to 
 all these questions depended on our faith in the future, and on the kind 
 of place we intended the world to be when this struggle was over. 
 
 QUESTIONS. 
 
 Question : Would it not be more correct to say that the Navy is 
 maintained not so much for the protection of transport and national 
 trade but for the protection of the country as such ? 
 
 Answer : I suppose it is intended for both. But when we talk of 
 increasing our Navy we lay stress on the importance of protecting 
 our trade. 
 
 Question : With regard to emigration, which the speaker advocated, 
 would the lecturer consider it economically good ? The reason for 
 emigration of the agriculturalist in the past was wages and depression 
 
26 
 
 in their class of occupation. He argues that people should be taken 
 back to the country. How would he do that while the magnet of the 
 bigger shilling exists in the towns ? It is this that draws them away. 
 
 Answer : I only suggest emigration as an alternative. If you think 
 it best not to bother about increasing the supply of food here, you 
 could get over the difficulties by diminishing the demand for it by 
 having fewer mouths to feed, i.e., by sending some of your people to 
 grow corn in the colonies. There is a great deal to be said for emigration 
 from some points of view. The agriculturalist has a better chance 
 of making a livelihood in the Colonies, and, as a rule, a better life before 
 him. As to bringing men back into the country, I am not sure that 
 the speaker has quite understood my point. I want to distinguish 
 between bringing them back to the land and back to the country. 
 There are many industries besides agriculture that could be quite 
 well run in the country, and it would be a good thing for the townsmen 
 to work in the country and certainly a good thing for the country 
 people. It is quite hopeless to try to bring people out of the towns 
 to work at agriculture under present conditions. 
 
 Question : Would it not be better for the happiness and well-being 
 of the country if more people were brought on to the land rather 
 than into manufacturing industry ? 
 
 Answer : I am not at all sure about that. It depends largely on 
 what they can get out of the land. It is no good putting too many 
 men on the land if they cannot produce enough to keep themselves ; 
 or too many people to provide the food you want. In the same way, 
 you may have too many people in a factory. I think it would be 
 a good thing for other industries to be introduced into the country : 
 it would add a good deal to the happiness of the life both of the towns- 
 man and the country people they find there. 
 
 Question : The lecturer seems to suggest that there are too many 
 people on the land. I think there are not sufficient. If there were 
 more houses built, people would come back to the land.- If that 
 could be done, cultivation would be greatly intensified. Belgium can 
 produce close upon twice as much per acre than in this country, because 
 people are on the land to cultivate it. Could we not intensify our 
 cultivation much more in this country if at least double the number 
 of men were on the land ? 
 
 Answer : We might do with more people on the land, but I do not 
 think we should do good by doubling the number. You have to look 
 at the output per man, rather than the output per acre. You may 
 double the people, but unless you can at the same time double the 
 output per man, the people are poorer. That is one of the difficulties 
 you are up against. You cannot increase the number of people on 
 the land indefinitely. I should think if you developed agriculture 
 on the lines I suggest, you might increase the number of men to some 
 
27 
 
 extent; but, on the other hand, it is possible that if you get more 
 up-to-date machinery and more scientific farming, you would get a 
 considerable increase of food without much increase of men on the land. 
 I have no objection to more people if they are needed. 
 
 Question : Would it not be better for the Government to give us 
 better facilities for having small holdings, where men when they are 
 getting on in years could maintain themselves and help to maintain 
 the people at large ? 
 
 Answer : Small holdings for townsmen would be a very good thing ; 
 and if you can get the townspeople to go into the country, you could 
 develop the small holding policy as supplementary to industrial farming ; 
 but I am not at all certain that the small holding policy as it is being 
 run at present is going to be a very great success. Small holdings, 
 as they are at present, generally mean very hard work for a man and, 
 probably for his wife and children too, for very small results. There 
 should be small holdings for the people who like that sort of life, and 
 also for special things like fruit and vegetables. I do not think you will 
 ever get agriculture developed successfully over all the country on the 
 small holding plan. 
 
 Question : If small holdings were developed you would require 
 buildings for the people to live in. The Government do nothing in 
 that direction in the rural districts. The reason given is that it does 
 not pay. If we had more men on the land, what would that add to 
 the cost of production ? 
 
 Answer : If you have more people on the land, you will want more 
 houses, and this would mean increase in cost of production of food. 
 I think that would be quite justified if you found you wanted more 
 people for agriculture. The same thing applies to towns : if you want 
 more people, you have to enlarge the town. I do not think that would 
 be a reason for not doing it if it was desired to develop agriculture 
 in that way. 
 
 Question : Does the lecturer believe it is economically sound to 
 establish factories in the country ? Is not centralisation far better 
 than decentralisation, seeing that one industry is so dependent upon 
 another ? 
 
 Answer : I think it economically sound if we increase the well-being 
 of the population. (I do not want to narrow economics down to pure 
 material well-being.) Improved transport and light railways, motor 
 services, and extended railway services would do away with the diffi- 
 culty of decentralisation run your factories by electricity instead of 
 coal. I think this could be done ; and, if it would result in a healthier 
 and happier population, I think it would be justified ; and if you could 
 get rid of some of the squalor of the slums of the industrial towns in 
 that way, it would be fully justified. 
 
28 
 
 Question : If the land were owned by the State, would not these 
 difficulties disappear altogether ? 
 
 Answer : I am not at all sure about that. I should like to see the 
 land owned by the State, but I am not sanguine about all the difficulties. 
 
 Question : Could we not increase our food supply, especially of 
 necessary articles, to be almost self-sufficing, and at the same time 
 increase our other industries ? 
 
 Answer : I think you can do both. As I said in the paper, you can 
 largely increase agriculture by developing along economic lines. If 
 you go beyond that, if you try to go as far as to make yourself self- 
 sufficing in a national crisis, as has been suggested by people like 
 A. D. Hall, I think you will only do it by sacrificing some of. your 
 manufactures. 
 
 Question : The lecturer said subsidised agriculture means dearer 
 food. What does he mean by that ? Does he mean that the cost 
 to the consumer will be greater or that the cost of production is greater, 
 as it may be that the prices of agricultural products is not necessarily 
 affected by the subsidy ; the price would be fixed by the international 
 markets of the world ? 
 
 Answer : By dearer food I mean that if we are going to try to make 
 ourselves self-sufficing as regards food, or more or less so, and going 
 to shut off supplies from abroad or from cheaper sources, and produce 
 it from a dearer source, you are going to produce it at a greater cost 
 than you can buy it, which really means dearer food. You would 
 probably get also higher pj ices because you would stop foreign supplies. 
 
 Question : Would the extra cost of the subsidy affect the price to 
 the consumer ? 
 
 Answer : It would not directly affect the price, but the consumer 
 would pay it through taxation. 
 
 DISCUSSION. 
 
 MR. A. E. MABBS (Coventry Trades Council) : 
 
 It seems to me we have to look at this question from one or two 
 points of view. First we have to consider whether it is necessary to 
 provide a greater food supply sufficient to be able to rely upon it 
 more or less in time of war. We do not get over the difficulty by merely 
 saying that possibly the submarine may not be so effective in the next 
 war, and possibly our crops may be burnt from above. That may be 
 the case ; but, on the other hand, the submarine may be more effective, 
 
29 
 
 so much so that we may be cut off. In that case you would have to 
 rely upon the supply of food in this country, or else give in altogether. 
 That seems obvious ; and as no one can say definitely what may happen, 
 it is the absolute duty of the people to provide in some way for a supply 
 of food stuff in time of war. It is absolutely necessary for the safety 
 of the country to take measures in this respect. The policy which has 
 been suggested is that of subsidising agriculture ; but is this the 
 proper policy ? To my mind subsidies are always bad, and you could 
 not give subsidies to worse people than the farmers, because you have 
 no guarantee that production will be increased, and that is the aim in 
 view. I am inclined to think that the greater ease with which the 
 farmer can get his money, the less likely he would be to produce more ; 
 and it seems to me that the best method would have been not to 
 subsidise the farming industry, but to have started experimental 
 State farms, which might be temporarily subsidised by the Government, 
 or far better provided with all the capital necessary to work the ground 
 so as to get the very best results. I am absolutely convinced that the 
 question of small holdings is as dead as it can be. What we want is the 
 application of brains, science, and education to the land of this country, 
 and then I believe it will be possible to produce an enormously greater 
 amount of food than we do at the present time. Quite apart from the 
 question of increasing food with a view to a future war, I am inclined to 
 think that the question would have arisen in course of time. It is very 
 nice to say that you are getting your food supplies from other countries, 
 but, after all, the time must come, some time or other, when the popula- 
 tion of those countries will need larger and larger proportions of the 
 food grown in their own countries for their own consumption. The United 
 States used to be very much larger exporters of corn than they are now, 
 and it is estimated that in a very short time the United States will be 
 importers, and not exporters, due largely to the increasing population. 
 This is partly due to the drawing off of the population from agriculture 
 into other industries, which have been so successfully run by the United 
 States ; and what is true of America will also be true of the Colonies. 
 Although you can say there are other portions of the world where 
 enormous amounts of wheat could be grown, such as Russia, we shall 
 find that development goes on in the various countries of the world 
 not merely in agriculture, but that, side by side with this, manufacturing 
 industries are being continually introduced. In the Colonies, as well 
 as at home, the glitter of the town, quite apart from increased re- 
 muneration, seems to be an exceedingly powerful factor in determining 
 whether men shall live in the town or in the country, and it seems to 
 me that probably this problem will have to be faced by every country 
 in the world. The only way in which you can get over the glitter of 
 the town is to nationalise the land, although you have difficulties there. 
 You have to have the land owned by the State and controlled by some 
 authority which shall be responsible to the Government. Then you 
 will be able to get, as Mr. Orwin pointed out at Bradford, a 
 more skilled man even than you have on the land at the present 
 
30 
 
 time. By means of light railways, etc., instead of a few isolated 
 houses here and there without any chance of association, the people 
 could live in areas of considerable size, big enough at any rate to bring 
 some of the attractions of life to which we are so accustomed in the 
 city to these places, and thus the attraction of town life would be 
 diminished. Those are the lines on which we must work. 
 
 As regards small holdings, most of us when we have to give up 
 our avocations in which we are employed would make very bad small- 
 holders, because they have to work very, very hard. What we do 
 want is a greater production of the necessities of life ; and it does 
 not matter to us where these come from. The great problem is the 
 greater production of wealth to produce more so long as the dis- 
 tribution is equitable. In this question of the supply of food it is 
 necessary to get more people on to the land, and also from the point 
 of view of national well-being and health it is absolutely imperative 
 to get more people on the land. A few years ago it was stated that you 
 could never get a fourth generation of Cockney, as they had died out 
 by that time. We have been using up the life of the people to become 
 the workshop of the world. The lecturer's idea seems to be that we 
 ought to be the workshop of the world, but he wants the conditions 
 bettered : he wants the workshop to have a back garden. I don't 
 believe that you will simply revive the health and vitality of the people 
 by taking them back into the country and having manufactures there. 
 I believe that there is something in the land itself that gives a greater 
 vitality to the people that work on it, and therefore from the point 
 of view of health this is absolutely necessary. 
 
 If you go into the manufacturing districts to-day you find that the 
 average height is now 5 feet 2, or 5 feet 3, due entirely to the concentra- 
 tion of town life and to the unhealthy conditions under which people 
 live. You then go to Suffolk and the south-west of England, and you 
 see the kind of men who used to be in Lancashire 5 feet 9 or 10 and 
 it is nothing unusual to see men of six feet. With reference to 
 emigration : emigration is very nice for those who like it, and I want 
 to see a condition of affairs so that anyone who does not like it need 
 not emigrate, and because of that I want to give the people in this 
 country the opportunity of becoming agriculturalists in this country. 
 If they prefer to go elsewhere, I have no objection ; but emigration 
 should be voluntary emigration, and I want to say that the great 
 majority of those who have gone abroad from this country in the past 
 have not gone voluntarily, but because economic circumstances have 
 practically forced them out of the country, and that is not the sort 
 of emigration we want, because, as far as possible, it is always desirable 
 that people should be able to do that which they desire in order that 
 they may have a chance of being happy. I do not welcome the idea 
 of emigration, because as a general rule those people who emigrate 
 are the people with the greatest amount of kick, and these are the 
 people I want in the country the people who brace up the working- 
 
31 
 
 class to have some greater desires and conceptions of what life might be. 
 The proof that the best have gone out of the country is the fact that 
 when they come back they are not treated the same. They do not 
 treat a Colonial soldier the same way as they do the English " Tommy." 
 In the train to-day there were some Colonials, who stated that it was 
 disgraceful that the Colonial should be treated better than the" Tommy." 
 They are better treated because they have the kick they are not 
 content to put up with the conditions of life of our people. They have 
 better conditions, and the authorities recognise that they have to make 
 better conditions for the Colonial than for the English soldier, although 
 the greater proportion are Englishmen. 
 
 Mr. Furniss finished up by saying that after all .the question we 
 have to consider is what sort of a world we want : this is a very good 
 thing to consider, and I hope we shall always consider it. But, side by 
 side with the world you want, you have to put a worse world which 
 you may get by neglecting the possibilities of making this one better. 
 We as individuals desire that there should be peace, and that every- 
 thing should be produced in those countries where it is best to produce 
 it. This is an ideal which I believe we are working towards, but at the 
 same time we have to realise that there are other things to be thought of, 
 the possibility of the democratic countries of the world going under and 
 being overcome by the autocratic spirit of those who desire the sup- 
 pression of all democracy, both here and abroad. We have to remember 
 the dangers of the starvation of this country and I believe, for the 
 reasons I have explained, that it is absolutely necessary to produce 
 in this country a far greater quantity of food than we have produced 
 in the past. I believe also that a larger agricultural population is 
 desirable for the sake of the health of the nation. 
 
 GENEKAL DISCUSSION. 
 
 MR. GEORGE WILSON (Huddersfield Industrial Society, Education 
 Committee) : No one could have read this paper without being con- 
 vinced that we shall have to have some different arrangement in our 
 fiscal system ; but I believe in the co-operative movement, which is 
 a protection against profiteers. It has always been thought that a 
 policy which is good for the individual is good for the nation, but that 
 has been proved to be quite false and unsatisfactory. I also believe 
 that in the interests of national health our agriculture should be more 
 fully developed than it has been in the past. There are quite a 
 number of questions, but they can be resolved into one : What sort 
 of a nation do we want ? We want better conditions than we have 
 ever had before, a more virile nation, more healthy men, women, and 
 children and one way of getting these is to develop agriculture more 
 scientifically. 
 
32 
 
 MR. STRAKER (Northumberland Miners) : 1, too, want more food 
 produced in this country, not as a protection against war, but as a 
 provision for the people during peace. On page 12, Mr. Furniss refers 
 to tariffs as a means of defence, and calls attention to a remarkable 
 fact, that t; in spite of the machinery that has been devised for 
 
 facilitating foreign trade the nations have vied with one 
 
 another in erecting barriers in the form of tariffs." The explanation for 
 it (he says) is to be found mainly in the pursuit of national interests. 
 I do not agree that that is the explanation. I believe the explanation 
 is not that tariffs have been in the interests of nations, but rather in 
 the interests of persons. I think when we look at the profiteering 
 that is going on during the present crisis, I am justified in saying 
 that these men have set their personal interests above the interests 
 of the nation, and at the present time it is possible they are 
 exploiting our feelings against Germany for the purpose of getting 
 tariff reform established in this country in their own interest, and not 
 in the interest of the nation. However, it is proposed that a fiscal 
 arrangement with our Allies shall be established, and at the same time 
 a tariff established for the purpose of increasing production at home, 
 against a possible blockade of this country. If we have a fiscal arrange- 
 ment based on friendship with our present Allies, we need not think 
 of a possible blockade of this island ; but if we fear a blockade, then 
 it is because we are afraid of our Allies. Is it ever likely that we shall 
 fcave such a combination of nations against us as would make a 
 blockade of this country at all possible ? If a blockade were to take 
 place, we could not possibly be self-supporting for any great length 
 of time. The only wise policy, therefore, is in that League of Nations 
 which there is so much talk about. But to get a League of Nations 
 it is necessary that the peoples should be united in International 
 Trade Unions. 
 
 A DELEGATE : If we agree that the real necessity of the times is 
 the cultivation of a greater food supply, we ought to recognise that 
 this cultivation is being left in the hands of private enterprise, 
 If the food supply of the country is of such vital interest, we 
 should have the land under State ownership and State control. 
 For many years past we have had in this country State experi- 
 mental farms. I think that the time of experiment is over, and 
 we ought at once to get the best men on to the land. What we 
 want is specialisation of production, and we can only get that when 
 we get the land under State ownership and the men trained. This is 
 the real question. 
 
 MR. JESSE ARGYLE (Club and Institute Union) : I confess that I 
 am not one who believes that this terrible war is going to be the 
 last : war begets war, and man is a fighting animal. I think that 
 we in this country would be very foolish indeed if we did not take 
 advantage of the lesson of the present war to be prepared for 
 
33 
 
 another. Any hope now of universal free trade that we used 
 to talk about is a mere idle dream. The bitterness between 
 nations will be too great for many years to come to allow 
 of that. There will possibly be free trade with the Allies, but there 
 again there are grave difficulties. To come to our own Empire, there 
 is a great likelihood that we shall get, if not absolute free trade, some- 
 thing very closely approaching to it ; and when you get to that position 
 it will be found, as in the past, that our Colonies are in a much better 
 position to supply us with the great bulk of our food than we are to 
 grow it ourselves, and it will be found in the best interests of all that 
 they should continue to supply us with the bulk of our food while we 
 supply them with manufactured goods. How then are we to bring this 
 about, and yet also have security for our food supply in a future war, 
 because it has got to come over the seas ? The lecturer thinks that 
 something may be done which will get rid of the menace of the sub- 
 marine. It seems to me equally probable that the menace may be 
 even greater than it is, and so we have to find some means by which we 
 shall always have a reserve stock of food here. I have considerable 
 faith myself in what the lecturer only very lightly touched on 
 in one small paragraph i.e., in national granaries. Why the 
 subject has been so ignored in the past is more than I can understand. 
 The idea is simply that the Government should build a number of 
 these granaries and store sufficient corn to supply our needs for 
 at least twelve months or longer. This could easily be done because, 
 although I do not believe that war will be done away with, I believe 
 there will be a few years of peace when this war is at an end, 
 and supposing that interval were five or ten years, there would be ample 
 time for the Government to build the granaries and stock them gradually 
 with the year's food supply without interfering in any appreciable 
 degree with the ordinary course of trade. Thus, we should do 
 away with the necessity of subsidising industry, which is very bad 
 indeed, and to a considerable extent with dearer food, because we 
 should always have this reserve which the Government could use 
 if we were being unfairly dealt with. It could be distributed by being 
 gradually put on the market at the end of each year, so that year 
 by year there would be a stock of new food in store, and that, with the 
 supplies which would be in the hands of private owners in the ordinary 
 course of trade, would, I believe, give us a sufficient reserve, so that 
 we should have confidence and thus be able to develop in the best 
 way the trade of the Empire. 
 
 MR. F. A. THOMAS (Royal Arsenal Co-operative Society) : I think 
 we all agree on the necessity of increasing our food supply ; but what 
 I am particularly concerned with is how it is going to be done. Possibly 
 we all agree on the nationalisation plan ; but I am keenly interested 
 in the question of how you are going to keep the people on the land 
 when it has been nationalised. Some of the speakers seem to think 
 that nationalisation is the be-all and end-all. I want to know, having 
 
34 
 
 got the men on the land, having introduced your most scientific methods, 
 trained your men in colleges, got your people going on co-operative 
 lines so far as machinery and transport and so on is concerned what 
 you are going to do to reconcile the consumer and the producer ? 
 This problem seems to be almost insoluble. I expect it is common 
 knowledge that the Board of Agriculture, through the agricultural 
 organisations and the farmers' organisations, advises the farmers by 
 telegram as to the best markets and, in short, trustifies agriculture 
 all over the country, but it does nothing to reconcile the producer 
 with the consumer, and this is the great problem of the future. If the 
 agriculturalist is simply going to get higher prices, we, as consumers, 
 are still going to be left " in the cart." The problem is dealt with by 
 the Co-operative Wholesale Society, inasmuch as they have gone 
 in for farming, and inasmuch as they distribute the profits among the 
 consumers, but that does not deal with the interest of the producer, 
 and it appears to me that in the future we must get those two things 
 working in harmony. I do not know how the problem is to be solved. 
 Perhaps it could be done by a system of profit-sharing for the 
 agriculturalist and treating the consumer on co-operative lines. 
 
 MB. E. J. NAYLOR (London Society of Compositors) : There have 
 been one or two questions introduced which appear to be outside the 
 problems raised by Mr. Furniss in his paper. I suppose if a vote were 
 taken it would be found that we were all in favour of State ownership, 
 and possibly the lecturer would agree to that ; but he is dealing with 
 the problem as it presents itself. We have capitalistic governments 
 and capitalism ruling in all parts of the world, and the question he puts 
 to us is : Will it be better for us to forsake the principles of free trade 
 which have, after all, allowed this country to develop on certain lines, 
 or whether the war, and the conditions set up by the war, have brought 
 about a change with regard to our intentions or desires on the fiscal 
 question ? One point not already touched upon is the problem of the 
 consumer as such. The consumer, of course, is the largest class in 
 the community, because we are all consumers ; and, as a Trade Unionist, 
 I naturally applied the test as to what effect any change in our fiscal 
 system or in our method of international exchange of commodities, 
 either of agriculture or of manufactured articles, would have upon the 
 wages of the men I represent. Wages, of course, are only a measure 
 of what can be bought, and if by a change in the fiscal system you are 
 going to increase the cost of living, to the extent of the taxes and 
 possibly more than that, then you are bound to admit that wages 
 are being reduced to that extent. Therefore I look twice at any 
 proposal which will have that effect, and it has been demonstrated 
 that this will be the effect in the event of the Government coming to the 
 conclusion that it is necessary for a change to be made in our fiscal 
 system. One speaker referred to the fact that it may be possible to 
 get a system of free trade with the colonies to the exclusion of other 
 countries. That will not increase the amount of agricultural produce 
 

 35 
 
 grown in this country. We all know that preferential duties for the 
 colonies do not protect the English farmer, because he cannot stand 
 up against the competition of the colonies. After all, is it not possible 
 that we are making too much of the scarcity of food, even in war time ? 
 After three years we can still get a good square meal : let us be careful 
 lest we set up a bogey. This country has been able to main- 
 tain its food supply far better than other countries which have had 
 tariff reform. Is it wise, is it politic in the working-class interest, 
 to adopt a change of the fiscal system that will mean increased cost 
 of food ? More agricultural produce could be grown in this country, 
 but what value is that to the working-class of the country if they have 
 to pay more for it ? 
 
 MR. SANDERSON FURNISS' REPLY. 
 
 I should like to thank Mr. Mabbs for kindly undertaking to open 
 the discussion at such short notice, and also for the very great attention 
 with which he has honoured my paper. In many respects Mr. Mabbs 
 and I are at one. He wants to see agriculture developed in this country : 
 so do I. He does not like subsidised agriculture : nor do I. As to 
 the possibility of future war, he thinks that we must be prepared for 
 this, and must take steps in regard to our food supply. I do not think 
 I take quite such a gloomy view with regard to future wars as Mr. 
 Mabbs or Mr. Argyle. If we are going to concentrate our energies on 
 preparations for the next war, I am not at all sure that life will 
 be worth living. I am therefore willing to take risks, and I am not 
 prepared, without a great deal of convincing, to accept measures which 
 will, I think, involve heavy sacrifices on the part of the people of this 
 country. I am not at all sure about a subsidised agriculture giving 
 us the protection we are aiming at, nor am I sure that we are going 
 to get the food we want to make ourselves self-sufficing in a crisis, 
 by any such measure ; and I doubt also whether that is the, kind 
 of defence we really require. Therefore, as I say, I am willing to take 
 risks, and develop agriculture as far as we can on what I call economic 
 lines, without subsidies, and without putting undue burdens on the 
 great mass of the population. If our farms can be improved and the 
 farmers induced to farm more scientifically, let them do so, and let 
 us do all we can to persuade them ; educate the agriculturalist more, 
 and so on, but do not let us make large sacrifices at a time when the 
 country will be extremely poor, for what may be, after all, merely 
 a will o' the wisp. As to the question about the people coming back 
 to the land, Mr. Mabbs thinks that there is too much attraction in town 
 life, and also that in the country it is the actual work on the land which 
 is the good thing, and not work in other industries. I feel pretty certain 
 that you will not get the people back to the land merely for agriculture. 
 " Back to the land " is a hopeless cry. You won't get people back 
 under present conditions, and I don't want them to go back under 
 those conditions. The only way in which you can get them back is 
 
by creating a new life in the country, and that you can only do by 
 getting some of the interests of the town into the country. You have 
 to take some of the town life the social and educational opportunities 
 into the rural districts. Mr. Straker suggests an amendment on 
 page 12, with regard to my explanation of Protection, and I gladly 
 accept that amendment : Protection is certainly due to the belief of 
 certain persons as to the importance of national interest. Mr. Thomas 
 asks how I reconcile the interests of producers and consumers. I doubt 
 if these ever can be entirely reconciled, but at any rate you won't 
 persuade the consumer that they are reconciled by giving subsidies 
 to producers. 
 
37 
 SECOND SESSION. 
 
 THE INFLUENCE OF THE WAR ON 
 COMMERCIAL POLICY. 
 
 By EDWIN CANNAN, M.A., LL.D. 
 (Professor of Political Economy in the University of London). 
 
 As time goes on, commercial policy becomes more and more con- 
 trolled by considerations of employment, the dominating idea being 
 the increasing of employment or at least the prevention of its decrease. 
 Unfortunately, it is usual to regard every diminution of employment 
 in any trade as an evil, and we cannot usefully approach the subject 
 of commercial policy without some preliminary examination of this 
 opinion. 
 
 When we work directly for ourselves we welcome with joy methods 
 and appliances which reduce the labour of obtaining any particular 
 article, even if we want little or no more of the article than we have 
 been getting. Just now, we all garden for ourselves, and know how 
 nice it is to get a more effective tool or to learn of some method which 
 saves labour in digging or hoeing. We do not regret the lost labour. 
 Nor do we make reservations in favour of skilled labour : we cheerfully 
 scrap our laboriously acquired talents if they are rendered unnecessary 
 by the discovery of new methods or implements. The situation is 
 obviously the same whenever a number of people co-operate consciously. 
 There is no reason to suppose that a purely communistic society would 
 have the slightest objection to adopting labour-saving methods or 
 appliances : the labour saved would be regarded as a pure gain, since, 
 if little or no more of the article produced by it is required, it can be 
 applied in other directions, with the result of an increased total of 
 desirable results, or it could be simply abandoned in favour of greater 
 leisure. 
 
 But when we co-operate unconsciously by way of selling our own 
 products and buying those of other people with the proceeds, changes 
 in the direction of labour-saving generally have an unpleasant side. 
 It may happen, of course, that the demand for the article is so elastic 
 that when its production is made twice as easy and the price falls to 
 one-half of what it was, a double quantity will be sold. In that case, 
 no inconvenience will be felt : there will be no reduction of employment 
 in producing the article. People are apt to think that this should 
 always be so, but in fact, of course, the demand for most things is not 
 and cannot be so elastic. It is much more usual for the demand to 
 
28 
 
 be such that an increase of production proportionate to the reduction of 
 labour will cause such a fall of price that there will be less available for 
 the remuneration of the labour, so that if all the previous workers insist 
 on continuing, their position will be worsened ; the same number can 
 only be employed if they submit to i educed earnings ; otherwise 
 some must be excluded, which of course involves hardship, or at the 
 very least inconvenience, varying in degree chiefly with the suddenness 
 of the change. There is, of course, nothing exceptional or anomalous 
 in this. In the case of an individual producing things for himself, 
 a transfer of labour from one kind of production to another can be 
 effected without inconvenience or hardship by the exercise of the 
 sovereign power wielded by his brain. In the case of a communistic 
 society transfers of labour from one occupation to another would be 
 effected similarly without hardship to the persons concerned by simple 
 decree of the labour ministry or whatever department of government 
 was entrusted with the distribution of individuals between employ- 
 ments. But in society as we have it, people are attracted into employ- 
 ments and deterred from joining them, kept in them and driven out of 
 them, by the different and changing comparative advantages which 
 they offer as means of earning a living. 
 
 Recognition of this hardship is of course the most substantial cause 
 of the sympathy which is widely felt with those who resist labour- 
 saving methods and appliances. But the whole of the dislike for 
 reductions of particular kinds of employment which prevails cannot 
 be thus accounted for. Much of it comes simply from a fundamental 
 misconception which leads people to suppose that labour itself is wanted 
 instead of merely the things which labour produces, and which are 
 not wanted because labour produces them, but are produced by 
 labour because they are wanted . The habit of talking of each particular 
 industry as " supporting " or " maintaining " those who follow it 
 leads people insensibly into the belief that the industry directly supports 
 or maintains those who follow it in such wise that a diminution in its 
 amount would diminish the whole society's means of maintaining its 
 numbers. If we say that boot-making supports bootmakers, we are 
 apt to fall into thinking that if we grew boots with as little trouble as 
 fingernails and with no more nourishment than at present, society, 
 to be as well off as it is, would have to be less numerous by the whole 
 number of persons employed in bootmaking. With some muddle of 
 this kind in our minds we become inclined to regard every " expansion 
 of industry " (in the sense of more labour being devoted to any par- 
 ticular kind of production) as a good, and every contraction as an evil. 
 We are prone to rejoice indiscriminately over every increase of numbers 
 employed in any trade, and to mourn indiscriminately over every 
 decrease. We even sometimes go further, and rejoice not only over 
 an absolute increase of numbers but over an increasing percentage 
 of the whole number being employed in a trade, while at the same time, 
 in defiance of elementary arithmetic, we mourn over a decreasing 
 percentage employed in another trade ! The stock example is 
 
39 
 
 agriculture. Throughout history increasing knowledge and civilisation 
 have enabled mankind to get the raw materials supplied by the surface 
 of the earth for human food and clothing with greater and greater ease, 
 so that a larger proportion of human labour time has been gradually 
 made available for working up that raw material into more refined 
 forms. Labour being divided, the diminution in the proportion of 
 the labour time required for providing the coarsest necessaries of life 
 has naturally meant a diminution in the proportion of the whole 
 population which has to be employed in agriculture, and a setting free 
 of a larger proportion for supplying other and more refined wants. 
 Yet when has mankind been without weeping and wailing over " the 
 decay of agriculture " ? The greatest sign of human progress has 
 been constantly treated as something to be deplored and, if possible, 
 prevented. 
 
 If progress, when it requires absolute or comparative reductions in 
 the number of persons employed in particular trades, affected all 
 countries equally, there would be much less resistance to these re- 
 ductions. The ordinary person generally knows little of what is going 
 on in other countries, and constantly assumes unconsciously that a 
 change which he sees proceeding in his own country is not in fact 
 going on in other countries. But he can be told, and it is often a great 
 comfort to him when he is certain that some symptom indicates that 
 his own country is going to the dogs, if he can be assured that other 
 countries show the same symptoms in equal degree. But of course 
 progress does not affect countries equally, and consequently we have 
 not only redistribution of mankind between different occupations, 
 but also redistribution of the persons following each particular occupa- 
 tion between the various countries. Invention of new methods of 
 transport, coupled with the more general provision by accumulation 
 of capital of the material machinery required to utilise the invention, 
 is the most obvious of such causes. It has made it possible and desirable 
 to redistribute agriculturists and manufacturers, reducing the propor- 
 tion of agriculturists and raising that of manufacturers in the old 
 countries, while not doing so or not doing so in the same degree in the 
 new countries. 
 
 But changes in transport are not the only things which affect the 
 distribution of industry. Technical changes in the industries themselves, 
 the exhaustion of old sources for the supply of raw materials, and the 
 discovery of new sources, developments in education and a host of other 
 things, are constantly making it desirable that particular industries 
 should grow more slowly, cease to grow, or even decline in some 
 situations, while they grow or grow more largely in others. The 
 general tendency in history has been towards greater and greater 
 territorial division of labour or localisation of industry that is to say, 
 greater concentration of particular kinds of work in particular dis- 
 tricts. To put a larger proportion of an industry in one place obviously 
 involves leaving less in another, so that concentration is necessarily 
 accompanied by denudation as an industry gets localised in some 
 
40 
 
 districts, it declines in others. So long as this process takes place 
 within the confines of a single national area there is little or no complaint. 
 We hear nothing of the calamitous situation of the South Eastern 
 counties . owing to the disappearance of the iron industry from the 
 Weald, nor of the misfortunes of Wiltshire owing to the woollen 
 industry having increased more rapidly in Yorkshire. 
 
 But when the redistribution is not between different districts of 
 the same national area, but between different national areas, popular 
 feeling is quite different. Then in each national area or country 
 concentration is regarded with favour so long as the concentration 
 takes place in that country, while the denudation is deplored and 
 usually obstructed by government. Each country is quite willing to 
 accept any increase of industry due to the increasing concentration, 
 but is unwilling to accept the necessary denudation. The various 
 publics fail to realise the very elementary fact that it is just as true 
 of any number of human beings as it is of one, that if they give a 
 larger proportion of their time to one kind or a few kinds of work, 
 they must give less to the other kinds. If an industry is concentrated 
 in a country, it means that the inhabitants of that country deliberately 
 make more of something or other than they want themselves in order 
 to exchange the excess for something else which is provided by the 
 inhabitants of other countries. If they change their minds and resolve 
 to make these other things for themselves they must willy-nilly give 
 up concentration on the first lot : they cannot have time to make 
 both, and they do not require both. Thus, local or national increase 
 of an industry due to greater concentration must necessarily be accom- 
 panied by local or national decline of some other industry or industries. 
 
 The war is likely to form an important landmark with regard to 
 both general and local declines. 
 
 Firstly, lest us consider its relation to general declines. The extreme 
 urgency of the case when whole peoples have imagined themselves, 
 generally without grounds, to be fighting " for their lives," or at least 
 " for their national existence," has led to the overcoming of much 
 resistance to easier methods of production. It is one of the cruellest 
 ironies of the war that hindrances of this kind should have been easier 
 to remove when people were struggling to destroy each other than when 
 they were peacefully co-operating in the production of things generally 
 desired. But so it is, and many authorities hope that the gain made 
 in this direction may offset at any rate, to a large extent the loss 
 caused by the destruction of life and limb and by the check to the 
 accumulation of new instruments of production. Various schemes are 
 being mooted for securing that resistance to this kind of improvement 
 shall be less in the future than it has been in the past. 
 
 My impression is that a good deal of useless advice is being given. 
 Employers are told that they have been wrong in not allowing the 
 employed to reap the benefit of changes which reduce the amount of 
 labour required to produce particular articles. This would be right 
 
41 
 
 enough if the employers were able to keep the advantage to themselves ; 
 but what actually happens in the long run and usually in a not very 
 long run is that the advantage of a less costly form of production 
 is secured by the purchasers of the product in the shape of a reduced 
 price. Improvements in the production of an article thus cheapen 
 the article while leaving the remuneration of the producers at the 
 accustomed level compared with the remuneration of producers of 
 other things. This surely is the common-sense solution : if a thing 
 become easier to produce let it be produced in greater quantity and 
 be cheaper do not pay the producers more. There seems no real 
 ground for paying them more, and to do so is practically impossible 
 because of the difficulty of selection. If potato-growing is made 
 twice as easy by some invention, it would be not only senseless to say 
 potato planting and digging was to be higher paid, but futile, unless 
 you give some kind of monopoly to a limited class and face the difficulty 
 of saying who is to be admitted to that class. Otherwise, there will 
 be enough independent potato-growing to keep down the price to a 
 figure which will not yield the proposed extra remuneration. 
 
 The real cure seems to be the simple one of greater versatility. 
 The resistance to improved methods comes from the reluctance which 
 people very naturally feel to agree to anything which involves a diminu- 
 tion of the demand for the particular kind of labour which they can 
 offer. To get rid of this reluctance altogether is of course impossible, 
 but its force will be diminished by every increase in versatility which 
 makes the maintenance of demand for the particular kind of labour 
 less vitally important to the persons concerned. And here I see one 
 of the very few good effects of the war which I personally have been 
 able to recognise. It does seem as if the war will have enormously 
 increased the versatility of the present generation. The amount of 
 change of occupation has been enormous, and in consequence quite a 
 large proportion of men and women, who before were only experienced 
 in one kind of work, are now experienced in two, three, or even in more 
 kinds. Moreover, everyone is accustomed to the idea of versatility, 
 and convinced that it is much easier to acquire the skill necessary for 
 most occupations without either training in youth or a very long 
 training in later life. This, I think, is one of the most hopeful features 
 of the present situation. Old stick-in-the-mud Europe has, in respect 
 of this matter, become one of the " new countries " which owe so much 
 of their superiority to the greater versatility of their inhabitants. 
 
 Trade Unions will have to accommodate themselves in some way to 
 the psychological change which will have taken place. When men 
 become more versatile they will not feel so much identity of interest 
 with an organisation representing a small branch of industry and nothing 
 else. To be useful, labour organisation must represent persons and not 
 an abstraction. The union which represents a trade no longer necessary 
 to society is of no further use. The general shake-up of the war in 
 making these facts more obvious will undoubtedly be beneficial, though 
 an outsider may be excused from offering suggestions about the manner 
 
42 
 
 in which labour organisation should meet the case. I expect it will 
 find a way. 
 
 With respect to the other branch of the subject, resistance to national 
 contractions of particular employments, which is the branch with which 
 we are concerned, the prospects of mankind do not appear so unclouded. 
 The war has inflamed slumbering tribal animosities and has created 
 pseudo-tribal animosity between most of the people who happen to live 
 in the dominions of the two sets of belligerents, whatever their race 
 may be, and animosity is unfavourable to clear thought and prudent 
 action. We need not indeed attach much importance to the insensate 
 ravings of banqueters who break the plates in an English hotel because 
 they were imported from Germany before the war, or of their friends 
 who wreck the shop of a baker who is fighting for them in France, 
 because his wife employs a German to fill his place in his absence 
 a German who, in all probability, left his native country because he was 
 not enamoured of it. Such froth will soon disappear. The memories 
 of nations are short so short that in the past only a few years have 
 usually been requisite to turn enemies into allies and allies into enemies. 
 The plate-breaking heroes of the Savoy probably thirsted for war 
 with Russia over Penjdeh and the Dogger Bank incident, with the 
 United States over the Venezuelan boundary and with France over 
 Fashoda ; and the wreckers of the bakery might easily be led against 
 any foreigner who presumed to provide them with any of the necessaries 
 of life. But it does seem as if the present war has been more successful 
 in exciting lasting animosity than most modern wars. A generation 
 or two must pass before the sufferings and indignities endured by the 
 people of areas occupied by hostile armies will be forgotten. The 
 London school children slaughtered outright by the German aviators, 
 and the Karlsruhe school children slaughtered outright by the British 
 and French aviators, may be forgotten in a few years, and their graves 
 be untended like those of their fellows who die from natural causes 
 or poverty and neglect, but those who were only maimed will continue 
 for the remainder of their lives to excite the indignation of their com- 
 patriots against the cruel enemy. We cannot doubt that hostile 
 sentiments between enemies will be acute for a long time, and it seems 
 to me that it would be sanguine to suppose that its effects will be any- 
 where near counterbalanced by growth of affection between allies. 
 
 Nor is this matter of sentiment the only disquieting factor. There 
 are others perhaps more practically important. 
 
 In the first place, the war has forced most countries to be more 
 self -sufficient than they were. The self -sufficiency has been disagree- 
 able enough to the people who want the imported articles and have had 
 to put up with inferior and much dearer substitutes, but it has favoured 
 those who produce these substitutes, and they rather naturally desire 
 to stick to what they have gained. The position is just the same as 
 it was in this country at the end of the great war a hundred years ago 
 The agriculturists then had got used to receiving enormously high 
 prices, and they could not bear the idea of a drop on the conclusion of 
 

 43 
 
 peace. They therefore persuaded themselves and the legislature 
 that the salvation of the country depended on keeping the price of 
 wheat up to 80s., and obtained legislation intended to secure that 
 object legislation which was happily unsuccessful, and had little 
 result except some aggravation of agricultural depression. We see 
 now in the papers paragraphs headed " No more cheap foreign glass," 
 giving accounts of the determination of persons concerned in the 
 manufacture to prevent their fellow-citizens from buying an important 
 building material, not from the enemy but from the Belgians. There 
 is nothing new in this : one effect of war always has been to provide 
 temporary protection for industries which thereupon clamour to have 
 the protection made permanent, and have usually some partial success 
 followed by reaction later. 
 
 Secondly, the State, in this and other important belligerent countries, 
 has succeeded in securing the support of labour organisations and thus 
 nationalising in a certain degree the labour movement. Finding it 
 impossible to make head against their enemies without better support 
 than that afforded by the usual organs of Government, the States have 
 struck up alliances with the trade organisations and have used them 
 freely for the purpose of allaying or, at any rate, smothering- 
 discontent. The most cherished prejudices of the governing classes 
 have been jettisoned in view of the paramount necessity of winning 
 the war. Lord Willoughby de Broke is alleged to have sung " The Ked 
 Flag," German army commands are said to have fraternised with 
 trade union secretaries, and Cabinets undoubtedly consist of the 
 most amazing compounds of " prancing exproconsuls " and " pestilent 
 labour agitators." 
 
 The bringing in of labour to national governments at the moment 
 when these governments are engaged in an immense military conflict 
 of absorbing interest is a most inauspicious event. You know how 
 men who work for an organisation of any kind are apt to put the good 
 of the organisation before the end for which it was founded. Persons 
 in the service of the State are specially inclined to this. I have many 
 friends who have temporarily given their services to the State, and 
 I have been astonished at the rapidity with which most of them become 
 identified with the machine which they imagine themselves to be 
 working, but which really works them. For three long years the 
 machines which are each called by their subjects subjects is the right 
 word The State, as if there was only one State in the world, have 
 been working not to create but to destroy, and those who have been 
 tending them will have greatly lost their perception of the true ends 
 of life. Thinking perpetually of warfare, they -are sure to shrink from 
 allowing the people of their respective countries to increase their 
 " dependence " upon the people of other countries by the increase of 
 international commerce. A good example of the manner in which evil 
 associations obstruct clear thought was given us last spring when 
 one of the new Labour ministers declared that he would not allow any 
 foreign steel to come into his country till all the steel works in it were 
 
44 
 
 fully occupied. There was in his mind not the smallest consideration 
 of the question in what proportion it is really desirable that the world's 
 production of steel should be divided between the various countries, 
 but just a thoughtless acquiescence in the standard provided by the 
 number and magnitude of the steel works which happened to be present 
 in his own country early in 1917. Why 1917 ? Why not some other 
 year ? Is it true that not only that what is, is right, but also that it 
 must never be changed ? 
 
 Can nothing be done to cope with these sinister influences by cold 
 reasoning ? Possibly something. It may do good to point out the 
 absurdities involved in the belief that concentration of particular 
 industries in particular countries is undesirable, or at any rate that its 
 extension beyond that already attained in 1917 (or whatever is the date 
 of the controversy) is undesirable. It may do good, too, to point out 
 the extreme unsuitability of existing national areas to be economic 
 units, each striving for self-sufficiency. If the world is to be divided 
 into units striving for self-sufficiency, surely the division ought to be 
 made by a boundary commission of economists, trade unionists, or 
 such other persons as we may suppose competent to order industrial 
 matters. The present national areas were never marked out by such 
 people. They have come down to us from feudal times, have been 
 modified by modern wars and have no claim whatever on economic 
 grounds. If you took the map of the world and tried to divide it into 
 suitable areas for self-sufficiency you would find yourself enlarging 
 the first country you took in hand and enlarging it more and more 
 till at last there were no others. 
 
 The cult of national self-sufficiency is incompatible with peace, since 
 it must inevitably render warfare perpetual by making it necessary for 
 each nation to grab territory which contains the source of some product 
 which it has not got in its existing territory and which it must have in 
 order to be self-sufficient. We have seen a little of this already ; it 
 would be more and more serious, the more intense the worship of self- 
 sufficiency. Supposing the bigger empires managed to settle down 
 to an uneasy peace, what would become of the smaller countries ? 
 What is to become of Denmark, Switzerland, Portugal, when the big 
 countries reached a high degree of self-sufficiency and would not deal 
 with them ? They must join the bigger countries, and soon there would 
 be only two or three great powers in the world which, after a second or 
 third Armageddon, would be reduced to one by some struggle for the 
 source of some indispensable article. 
 
 Such arguments may seem telling enough in the countries which are 
 too small to allow the lust of power to flourish. But in the greater 
 empires they are likely to fall on deaf ears so long as the present state 
 of sentiment prevails. In each of these, people will be found to believe 
 that their own country is the best situated for the struggle. In the large 
 scattered empire of which the parts are separated by long distances 
 over sea, people think they can best be independent of outside supplies 
 because their dominions extend into every zone of temperature and 
 
45 
 
 include every kind of soil. In the smaller but compact empire the 
 weaknesses of the larger but more scattered one its liability to succumb 
 to submarine attack for example are clearly perceived, and it is hoped 
 that the more compact area will win through with the aid afforded 
 by science in providing substitutes for imported products. So long 
 as the question is considered from a purely national point of view, 
 and so long as patriotism is confounded with contempt and hatred 
 of other nations, we may doubt if argument directed to show the 
 suicidal character of the gospel of self-sufficiency will have much effect 
 in the greater countries. When two men desirous of killing each other 
 are locked together in the water, it is not much use to tell them to let 
 go if each thinks the other will drown first. 
 
 Even, however, without any expectation of cold reasoning about 
 either exclusive or mutual advantage producing much effect in the 
 present state of international sentiment, we may hope for some improve- 
 ment owing to the discredit into which the more important belligerent 
 States will have fallen by the end of the war. The war is no longer 
 popular in Europe, though it is said to be so in America, where it is 
 only beginning ; it will be less popular before it ends, and in the appal- 
 ling slump which will follow the inflation by the aid of which it has 
 been carried on, it will be universally execrated. The independent 
 States are responsible for it, and none of the greater ones can escape 
 responsibility by pleading that it was not their fault but the others', 
 since, if they did not want the war, they ought to have taken more 
 efficient steps to prevent its occurrence. Moreover, they have each 
 saddled themselves with a load of debt, made much greater than it 
 need have been by their insensate issues of paper money which have 
 raised prices against them, and quite impossible for most of them to bear. 
 Breakdowns under the burden will deprive them of the one and only 
 means by which modern wars can be carried on, while continued 
 bearing of the burden will involve taxation wholly incompatible with 
 popularity. Some of the existing States will probably disappear 
 altogether, and those that remain will find their power immensely 
 reduced. The Labour movement will cease to regard the capture of 
 such discredited institutions as an object of desire, and will not only 
 be thrown back into greater reliance on its own organisations, but will 
 also tend to make those organisations, wherever possible, ignore 
 national boundaries. This will greatly weaken the forces which resist 
 necessary and desirable redistribution of industries between different 
 countries. An organisation representing that part of a trade which is 
 situate in a single country can scarcely fail to support any measures 
 which will prevent its being superseded by greater growth in another 
 country. But an organisation which represents both parts of the trade 
 will regard the transfer with equanimity. 
 
 All this might be urged even if no fundamental change in our political 
 system were impending even if it were likely that we should be 
 content after this war to sink back into the old condition of preparing 
 for the next one. For my part, however, I regard that as a state of 
 
46 
 
 things which, if possible at all, could only endure for a very short time. 
 The possibilities of preparation are now seen to be so great that prepara- 
 tion for the next war would mean the giving up by the whole population 
 of every kind of commodity, service, and enjoyment beyond the very 
 barest necessaries of life. No people will stand that, and the inevitable 
 consequence will be the introduction of some kind of world-government 
 which will put an end to what is called national independence that 
 is, the right to go to war claimed by the present national States. These 
 States, or those of them that remain and the others that take their place, 
 will then drop into the relative position which different Dominions of 
 the British Empire at present occupy in regard to each other, and we 
 may derive some useful ideas from the parallel. 
 
 Though the different Dominions of the British Empire have no right 
 and (perhaps therefore) no inclination to go to war with each other, 
 they seem at first sight to show much the same desire for self-sufficiency 
 as independent countries, and obstruct trade in much the same way. 
 
 Therefore, it may be said, the different countries in a Worldish Empire 
 in which autonomy without power to go to war was established would 
 adopt much the same commercial policies as they do at present. But 
 we may well doubt whether, if this were true at first, it would continue 
 to be so for any length of time, for two reasons. In the first place, the 
 tendency of the British Dominions to strive for self-sufficiency is much 
 less marked, and is becoming less and less so, in relation to other parts 
 of the British Empire, than it is in relation to foreign countries with 
 which the possibility of war is present. In the second place, it is likely 
 that such cult of self-sufficiency as really prevails is largely due to 
 unconscious imitation of the independent and war-making States. 
 In a Worldish Empire there will be no foreign countries, and the tradi- 
 tion of the war-making States will be gradually dying. Consequently, 
 from the first, we may expect a less vigorous adoption of obstructive 
 commercial policies, and as time goes on we may reasonably expect 
 it to become further and further relaxed. 
 
 Professor Cannan, speaking on his paper, said that his object had 
 been to recall the pre-war position and to suggest the post-war position, 
 rather than to propose changes. He had laid great stress on the 
 unsatisfactory way in which progress was constantly obstructed by 
 the opposition to diminution of the amount of labour employed in 
 particular directions. It might be thought unnecessary to point this 
 out, but the discussion on the previous day, in which so many speakers 
 had dwelt on the desirability of having more people employed in 
 agriculture, regardless of the end for which agriculture existed, showed 
 that it was not unnecessary to do so, even in a meeting like the present. 
 The tendency throughout the whole history of civilisation had been 
 for a smaller and smaller proportion of people to be employed in agri- 
 culture, and we ought to look upon this with satisfaction and not 
 with annoyance. There was a smaller proportion of people employed 
 
47 
 
 in agriculture in the civilised parts of the world than in the uncivilised 
 parts, but this did not mean that the civilised parts were not so well 
 fed ; on the contrary, famines occurred in the uncivilised parts. As 
 to industry generally he said it must be recognised that you could 
 not specialise in some forms of industry without losing others. He 
 could not understand the objections to emigration. Why should not 
 the population distribute itself and fill all the empty portions of the 
 world in order to prevent so rapid an increase in the fuller portions ? 
 A good result of the war was that many new industrial methods had 
 been introduced which, in spite of the trouble and ill-feeling they had 
 caused in some cases, might lead to good results. On the other hand, 
 the war had caused a certain amount of international hatred which 
 prevented clear thinking ; but the good results were likely to pre- 
 dominate if they were given a little time. The State idea was likely 
 to be considerably weakened ; that was a good thing, because the State 
 idea was one of the causes of international quarrels. The end of the 
 present war would not he believed bring a period of preparation 
 for the next war, but rather a settling down to a permanent peace. 
 Let them think what preparation for the next war would mean. The 
 adoption of an agricultural policy with the idea of providing for the 
 next war would mean this : if more food were grown and more people 
 employed, these people on the outbreak of war would be called off to 
 fight, and agriculture would be less productive again at once. The 
 plan of granaries was much more feasible, as only people to distribute 
 the stores would be required. Granaries could also be made bomb- 
 proof, but fields of wheat could not be protected from incendiary 
 attacks by aircraft. Besides building enormous bomb-proof granaries, 
 it would be necessary to rearrange factories, in order that they might 
 easily be turned into munition works. There would be no luxuries ; 
 industrial conscription from the earliest age would be necessary ; and 
 arrangements would have to be made for training young men for the 
 army and girls for munition factories while they were still at school, 
 so that they could be turned on at a moment's notice. The British 
 Islands would become an outpost of the British Empire, rather difficult 
 to hold, with a constantly renewed store of ammunition and food for a 
 five years' war and a smaller population. This is what preparation 
 for the next war would mean, and no_ one need imagine that this 
 country would be a fit place to live in. 
 
 QUESTIONS. 
 
 Question : Can Professor Cannan tell us how far commercial policy 
 will be influenced in the future by the enormous destruction of capital 
 which is going on in all nations ? 
 
 Answer : I have not thought it out, but I think we shall all be more 
 or less in the same boat. It might have made a larger difference had 
 not the United States entered the war. 
 
48 
 
 Question : Mr. Cannan said it was a little contemptible for us to 
 be always weeping and wailing at the decay of Agriculture. Was it 
 not possible that when we were speaking of the decay of agriculture 
 we really had in our minds the larger question of the decay of rural life 
 generally, and that it was in fact the decay of what we might call one 
 of the most wholesome and healthy influences in our whole national 
 life? 
 
 Answer : I have no fear of it. I do not look back to a time in which 
 country life was very much better than it is at present : on looking 
 back I find the people were mostly serfs, and though their condition 
 is anything but satisfactory at present, I do not think it is any worse 
 than it was, and it is more likely to improve in the future if a better 
 policy be adopted. 
 
 Question : Does the lecturer think that the land of this country is 
 most economically cultivated ? 
 
 Answer : I do not think it is. I am not really a competent judge ; 
 but is any country scientifically cultivated ? If anything, I should 
 think this country has got rather too many people employed on the 
 land : we could do with fewer people and more scientific employment 
 of machinery those few would be better paid : the others might be 
 in America and Australia, and I do not think they would be any worse 
 off than they are at present. 
 
 Question: Regarding the issue t of paper money and the effect on 
 prices. Could the professor tell us whether there has been more 
 paper money issued than gold abstracted from the present currency ? 
 
 Answer : If you take all the world together there is immensely more 
 paper. A great deal has been issued by all the belligerents : in Russia 
 the amount of paper money has been duplicated ten times. That, 
 of course, has led to gold becoming a drug on the market, because it 
 has been driven out of circulation by all this paper, and you cannot 
 isolate this country so far as that is concerned. You can only isolate 
 it to a very limited extent with regard to 1 and 10s. notes. The issue 
 now is greater than the amount of gold : it is being increased about 
 1J millions a week. It is ridiculous for governments to water the 
 currency on the one hand and try to cut down prices on the other. 
 
 Question : Is it not a fact that land is not cultivated sufficiently, 
 owing to private ownership, and would not State ownership remedy 
 this? 
 
 Answer : No from what I have seen of State management. 
 
 Question : Does the lecturer favour a system which has been suggested 
 whereby the Government should give preferential treatment to certain 
 trades ? 
 
 Answer : No. 
 
49 
 
 Question : Will the lecturer kindly elaborate the last nine or ten 
 lines on the bottom of page 41 ? 
 
 Answer : I think that is rather more than a question. I have already 
 said what I have to say. The drift of that paragraph is that it is your 
 business and not mine. 
 
 Question : Does not the professor think that the versatility of labour 
 which he regards as one of the most hopeful signs of the present situation 
 is likely to lead to certain industrial troubles which would entirely 
 take away any advantage which he may see in it ? 
 
 Answer : My view is that everything leads to trouble. I am not 
 one who is always deprecating trouble in the sense of disputes ; I 
 think they are in the nature of things, and are not to be grumbled at ; 
 if you do not lose your temper there is not so much lost. We must 
 put up with difficulties of that kind. 
 
 Question : Does the professor favour State management ? Does 
 he base his arguments against it on experience of State management 
 in this country or in other countries ? 
 
 Answer : On universal experience, not only in this country during 
 the war but before the war, and in other countries at all times. 
 
 Question : What would be the effect of increased versatility on the 
 specialisation of labour spread over a large field of industry ? 
 
 Answer : I take greater versatility to mean that people can acquire 
 specialised industry more quickly and easily, and I should say the 
 result of that is, that alterations in the specialisation required, owing 
 to the introduction of machinery and so on, would be carried out with 
 less difficulty and suffering to the persons affected than if it did not 
 exist. Everyone knows that an individual who has several kinds of 
 special skill is in a far better position than one who has only one, 
 when changes occur. 
 
 Question : Does the professor think that in consequence of the war 
 there will be any effect on the commercial policy at all ? Does he not 
 think that when our hot blood is down, international socialism and 
 eo-operation will allow the commercial policy to go on in the same 
 way as it did ? 
 
 Answer : My moods are different sometimes I am optimistic and 
 sometimes pessimistic. 
 
 Question : Is not State ownership of the land the only safeguard 
 in the interests of the community ? 
 
 Answer : I do not regard it with much favour. I am not prepared 
 to discuss land nationalisation at the moment. 
 
50 
 
 DISCUSSION. 
 
 MR. NEWLOVE (General Secretary, Postal and Telegraph Clerks' 
 Association) : It seems to me that there are a number of very 
 important as well as interesting thoughts brought out by this paper. 
 We are brought back to what always has appeared to me a fundamental 
 question, namely, the attitude which people adopt towards the diminu- 
 tion of employment. This question raises what is in some senses an 
 inconsistency. Diminution of employment, whether from the point 
 of view of employer or workman, is an evil. But under a 
 rational system of society this would not be so ; and it does 
 not matter whether you are the employer using capital, or the 
 workman using labour, under the peculiar system of organising 
 our affairs that we now have, what ought to be an advantage is un- 
 doubtedly not only an evil but a disaster to a great many people. 
 Why is this ? To my mind the answer is simply because all our pro- 
 duction of material things does not take place with primary regard 
 for the utility of the thing that is being produced, but to serve 
 personal ends. An employer undertakes to produce machines because 
 he thinks he is going to make something out of it : a workman goes into 
 an industry because he thinks that by giving a certain number of 
 hours in the week he will get a certain number of shillings for it, and 
 neither of them have very much regard as to the real utility of the thing 
 they are producing. This is responsible, I think, for the antagonism 
 (and I do not think this term is too strong) which workpeople have 
 towards the introduction of labour-saving machinery. They see that 
 one of the first results of such improvements which ought to be a social 
 blessing is really a social evil it means throwing aside the human 
 factor without any regard to what becomes of the personality inherent 
 in that human factor. It is all very well for the orthodox economists 
 to say to us : " These things always right themselves in time ; all the 
 people displaced from industry as the result of a new machine will 
 later on find their level." This is not very much consolation to the poor 
 individuals who are thrown aside as the result of a big development of 
 machine production in industry. I have always been dissatisfied with 
 this explanation, because it does not meet the difficulty. In regard to 
 that, we are brought to the generally accepted view that the comparative 
 advantage of different trades determines the amount of capital and 
 labour which shall go into them. I am not inclined to accept Professor 
 Cannan's easy explanation. I do not think the great majority of work- 
 people enter a particular trade because of the comparative advantages 
 which that trade has over others. To the great majority of the 
 sons and daughters of the working-class population, it is not a queston 
 of this at all they have to go somewhere, and that seems to bring 
 us back to our great social problem. In the past we have not had 
 sufficient regard as to how our industries should be organised, neither 
 have we had sufficient regard as to how our children shall be employed. 
 For the most part it is not a question of choice ; and therefore the 
 professor's explanation does not satisfy me. 
 
51 
 
 
 
 With regard to the question of the decline of agriculture : 
 I am rather inclined to agree with the lecturer that the people 
 who say we shall rejuvenate agriculture by bringing more people 
 on to the land, are labouring under a delusion. Nothing of 
 the sort will happen, and I quite agree that under a proper system 
 of scientific agriculture you will probably have proportionately 
 less people employed : you always have more people working in badly 
 organised, uneconomic industry. When we talk of decline we must 
 consider it not so much from a national but rather from an international 
 or world point of view. In this respect the decline of agriculture is a 
 relative term, and closely connected with the subject of the paper 
 read yesterday. To my mind, the question to be answered is : Does 
 it matter very much whether in any particular country you have a 
 diminution of any particular industry in this case agriculture if at 
 the same time in consequence of the development of other countries 
 you are able to supply your needs ? My answer is that it does not 
 matter. If you are going to bolster up a particular industry or occupa- 
 tion at the price of national efficiency, then I for one am not going to 
 subscribe to that method, because it will not stop at agriculture. If 
 you are going to subsidise agriculture, why not engineering, pottery 
 making, and the textile trades? in short, why not subsidise everything, 
 and if you do that you are simply bringing yourself back to the position 
 of living by taking in each other's washing, and that is not sound policy. 
 Professor Cannan says that the increase of one industry involves 
 the decline in some other ; he seems to be quite certain that he is 
 right, and I am equally certain that he is wrong, even if you take it 
 as an abstract proposition. I think it is quite conceivable that an increase 
 in one industry may go on at a greater rate than in another ; but 
 to say that if you take any number of people out of industry A, that thej 
 will go into industry B, seems altogether too easy a way to get rid of 
 the problem. It is quite possible you might have a development 
 of all your industries, and that the extension of one need not go OB 
 at the expense of another, or a number of others. 
 
 I am very glad that two or three people tried to get the Professor to 
 elucidate what he said at the bottom of page 41, and I must return to the 
 charge. If there is one thing we expect from a Professor it is that he should 
 give us a little light and leading, but on this question he left us severely 
 alone. No commercial policy organised by government is going to be 
 of any use unless it is useful to the industrial situation of the country 
 itself, and the industrial situation must obviously involve a considera- 
 tion of this very question of versatility. Let me say right away that 
 I would not be prepared to accept the principle of versatility for one 
 moment unless I knew what was going to happen as a result of it. 
 Nor unless I knew that the attitude of those who organise the productive 
 system of this country was going to be very different towards trade 
 unions in the future from what it has been hitherto. If you want the 
 organised workers to accept the principle of versatility you must 
 bring the trade unions into consultation as to the organisation of 
 
52 
 
 
 
 industry more than ever ; if you do not, you are sacrificing the whole 
 of the working classes ; and any trade union official who allowed 
 himself to give the smallest amount of support to this principle of 
 change from one industry to another without knowing exactly how 
 it was going to be used, would be false to his charge. The trade union 
 position with regard to versatility is absolutely fundamental in regard 
 to any change in commercial policy. Unless the attitude of the trade 
 union is made quite clear, you are going to have industrial trouble ; 
 and you do not get over this trouble by simply saying that it is in 
 the nature of things. 
 
 I now come to the question as to what effect, if any, this war will have 
 upon the policy which the nations have pursued in the past in regard to 
 exchanging their surplus produce. This is important ; and I thoroughly 
 agree with one of the speakers that, after all, it would probably work 
 itself down to this : when all the excitement and antagonism and 
 bitterness between the nations is over, whether they be belligerents 
 or allies, commercial policy will probably go on exactly as before. 
 All this talk about brotherhood does not enter into the question of 
 international trade : John Brown of Manchester does not exchange 
 his cotton goods with Mr. Scheidemann in Berlin because he loves 
 him, but simply because he can give him a good exchange at a profit- 
 it is simply a question of . s. d. If this is so, we have this fact to face : 
 the geographical position of the belligerents and the allies will be 
 precisely the same when the war is over as it was before. As the 
 Professor points out, and as we all know, there will be a terrific debt 
 which will hang around the necks of the nations engaged in this war, 
 and one of the first things we are going to look out for is how cheaply 
 we can get the things we need. That is only natural in view of the 
 enormous bill we have to meet when this business is over. If this is so. 
 can one conceive for a moment that the Russian people, for example, 
 are going to send over to England for certain of their necessaries of 
 life because England has been an ally, when they have at their very 
 doors a nation, who at the present moment is by accident an enemy, 
 which is in a position to supply them with some of those things ten 
 times better than we are ? That is not going to be done. Neither 
 the working man nor his wife will want to pay more than is necessary. 
 All the wives will be interested about will be how much can they 
 get for their 30s. or 2 a week housekeeping money, and they will not 
 worry much about who was the enemy or who was the ally. It is 
 quite clear that you are going to have much the same commercial 
 policy in the exchange of commodities as you had before. On the 
 whole it is an advantageous position. 
 
 One more point which relates to this question. I think we 
 can brush aside as really impracticable the resolutions which 
 were agreed to at the Paris Conference not so very long ago. 
 If ever there was an absurdity, and particularly in a war, those 
 Paris resolutions are about the limit. You cannot build up 
 your future relations on any economic basis such as they propose 
 
53 
 
 to lay down. I think we shall find, as Professor Cannan points out, 
 that national areas are not the proper basis for an economic unit ; 
 there, I think, we have the kernel of the whole situation ; and, if this 
 is so, we shall have at the end of the war to look, roughly speaking, for 
 the same set of circumstances and the same principles regarding 
 the exchange of surplus commodities between nations, which prevailed 
 before the war. 
 
 GENEKAL DISCUSSION. 
 
 MB. HIRST (Tramway and Vehicle Workers) : When I tried to 
 draw the lecturer to give a little more explanation about the bottom 
 of page 41, I had in mind the same idea as Mr. Newlove that we in 
 the trade union movement are sometimes accused of looking on our 
 side of the question from a prejudiced point of view and I was anxious 
 to get the Professor's point of view on some of the things he men- 
 tioned. He makes two assertions which I should like to have his 
 reasons for. (1) That Trade Unions will have to accommodate them- 
 selves in some way to the change which will have taken place as to versa- 
 tility. I entirely agree, but I would like to know how it is to be done. 
 (2) That Trade Unions which represent a trade no longer .necessary to 
 society should cease to exist. How shall we arrive at that position ? 
 Most unions find themselves in th:- position some time or another 
 that a certain section of their members are no longer necessary, while 
 other sections are necessary. How are we going to arrive at the 
 exact position where a union represents a trade which is no longer 
 necessary. A discussion took place in the Trade Union Congress on 
 the question of Industrial Unionism between the Miners' organisation 
 and the Colliery and Enginemen's society,, and undoubtedly if we 
 take up the view of industrial unionism pure and simple, the miners have 
 right on their side in trying to get all men connected with mines to 
 be members of their organisation ; but the Colliery and Enginemen's 
 society have also right in saying that these men are not part of the 
 miners' organisation, and are not always working in mines, and may 
 want sooner or later to go back into their own organisation. I shoulcT 
 like to know whether the lecturer has not in mind that industrial 
 unionism, rather than trade unionism, is the thing we ought to aim at. 
 and whether we ought not to sacrifice these smaller unions in order 
 to attain that object ? 
 
 MR. DEWSBURY (Walsall Co-operative Society) : I am in agreement 
 with the Professor in regard to versatility, but I am only in agreement 
 if we also capture the organisations which the Professor tells us it is 
 no use us capturing. We can only agree with the versatility idea 
 if we also capture the State organisation which can so organise trade 
 according to the requirements of the people, that it will not matter 
 a button to the men engaged in industry whatever industry they may 
 be in their living will be assured, and that is all that anybody wishes 
 
54 
 
 for. On page 45 he tells us that the " Labour movement will come 
 
 to ignore national boundaries." That may be all very well 
 
 in the far-off future, but we have to take things as they are to-day, 
 and we know that national boundaries will continue for a considerable 
 period yet. It is therefore our only course to capture the government 
 of the particular State to which we belong, in order that we can so 
 adjust commerce and trade within our own area that there will be no 
 hardship to anybody engaged in industry. With that proviso, I think, 
 we should all be prepared to accept the Professor's theory of versatility. 
 I quite agree with the Professor in regard to the spirit that will come, 
 after the war is over. We are all taught to suppose that we shall 
 regard our allies as friends and our enemies as enemies for all time. 
 History proves that our enemies of yesterday may be our allies to- 
 morrow. In regard to the war debt, I would like to know to whom 
 this debt is owing. The Professor spoke of bankruptcy : a great 
 proportion of this national debt is really owing to ourselves, and I do 
 not see that we are very much poorer to-day than we were before the 
 war. People talk about our heaping up a great load of debt, but if 
 the debt were wiped out, would any of us be the poorer ? 
 
 MR. RUDLAND (President, Birmingham Trades Council) : I think 
 the real enemies are those at home who exploit every situation and act 
 in such a way as to make wars probable. The working class of this 
 country will have to see that such things are prevented when the 
 right time comes. We shall have to make sure, by a different and 
 securer system of government and a proper understanding by the 
 people, that the capitalists are not in a position to exploit our children, 
 and that our commercial policy is framed on lines which will make 
 for the peace and happiness of the common people of the whole of the 
 world. It seems to me that we have to realise the state of trade and 
 organisation that exists at the present time, and not only what position 
 it will be in when the war ends. We have to realise the revolutionary 
 change which has come about in industry and commerce, and that 
 we shall have an entirely different set of facts to deal with. It appears to 
 me that we have to take a new line of policy as to trade unionism alto- 
 gether. The doctrine that we shall get what we are strong enough to 
 enforce will have to be supplemented by a wider and securer policy : we 
 shall have to realise that we have to take a hand in the game, that we our- 
 selves have got to come in and help to control and manage industry. The 
 idea of production for profit and not for use must stop if we are going 
 to get very far. If we are going to adopt this view, however, Labour 
 itself has got to be not only more efficient, but it has to study the 
 science of management and control. But what attitude are we going 
 to adopt towards international trade ? Are you going to adopt tariffs ? 
 What is going to be your policy with regard to Germany, for example ? 
 Are you going to insist that she shall make things under fair conditions- 
 is that going to be your commercial policy ? Are you going to put up 
 a high tariff wall if they are not made under fair conditions ? Another 
 
C5 
 
 problem is, if we have to control industry, how are we going to put 
 up the capital to run it ? That will require all our thought and attention . 
 I believe that the problem of commercial policy after the war can be 
 solved on co-partnership or co-operative lines. 
 
 MR. HALSTEAD (Co-operative Productive Federation) : I think the 
 Professor is clearly up against those of us who represent the producers" 
 interest. We had that challenge in his introduction this morning : 
 he said that we wanted agriculture for food did it matter where we 
 got it from ? If we simply wanted food, the condition of production 
 and the result of different forms of production did not matter. I 
 challenge the Professor there. We might as well go back to slavery 
 because slavery produced food. The paper, to my mind, does not 
 take sufficient note of those other factors which Mr. Furniss pointed 
 out yesterday the political and ethical factors. And I think the 
 discussion yesterday proved that another factor should be taken into 
 account that is, physiology. If we approach it from that standpoint 
 it matters very much for us as consumers whether the conditions of 
 production, both of food and clothing, with a sufficient amount of 
 employment, tend to make the producers healthy, happy human 
 beings. With regard to agriculture : I do not agree with protection 
 in the ordinary sense, or with the Corn Production Act. I would not 
 do it by subsidies ; but I think we can do it by promoting agricultural 
 education as much as possible. Let your subsidies be used to make 
 agriculture more efficient. You will be subsidising in a certain sense, 
 but it will be a subsidy that will pay. 
 
 MR. MABBS (Coventry Trades Council) : It seems to me that if 
 this war is going to be of any use to the working classes of this country 
 we shall have to shake up our views as much as we possibly can, because 
 it has revealed a good many things we have never dreamt of before. 
 Before the war, the advanced labour leader thought he said quite 
 sufficient when he told us that what we wanted was the nationalisation 
 and the State management and control of everything. Personally 
 I think that if this war has revealed nothing else, it has revealed the 
 fallacy of nationalisation and control of everything ; but that does not 
 mean that capitalism and individual ownership is not a bad thing. 
 We all agree that is absolutely bad from the working-class point of 
 view, because it for ever condemns the workers to be controlled by 
 somebody else ; but we have to realise there is a possibility that 
 with national ownership and control we are going to set up government 
 by bureaucracy, which would be worse for the working class. That 
 question was gone into somewhat fully at the Oxford Conference. 
 We have to look in the direction of national ownership and control 
 by the people working in the industries. I am very much at one with 
 the Professor with regard to what he says about versatility of workers 
 in industry, although I think it wants stating rather differently. We 
 have to shake up our ideas ; we have to forget, and to cease to think 
 
56 
 
 in terms of craft, and to begin to think as members in industry. You 
 have to forget that because you were born a compositor you are going 
 to be one for the rest of your life and because you are born a printing 
 works labourer you are not to be allowed to become a compositor. 
 You of the craft industries, who believe that you are going to keep 
 everybody out, must break down your restrictions. You are in the 
 same position as the squire who says you were born a labourer and must 
 stop there. You are debarring those with possibly the same ability 
 from taking advantage of the opportunity of using their higher in- 
 telligence. This is exactly the same as the squire did of old and the 
 capitalist class are doing now. When I talk about control I do not 
 mean the setting up of a joint control of industry with the capitalist 
 on the one hand and the working class on the other. That is a very 
 popular cry at the present time and a very dangerous tendency too. 
 We have got to recognise that while the enmity of the people of 
 England and Germany is ephemeral and will pass, the enmity 
 between the capitalist class and the workers is eternal, or for 
 as long as the present system lasts. We have not to patch up 
 here and there, but we have to make fundamental alterations in the 
 construction of society or else all our efforts will simply leave us in 
 the same position as we were before the war. 
 
 MR. C. P. PARKIN (York Equitable Co-operative Society, Ltd.) : 
 On page 42 the lecturer says " A generation or two must pass before 
 the sufferings and indignities endured by the people of areas occupied 
 by hostile armies will be forgotten." That kind of bitterness is apparent 
 outside the areas where hostile armies are in occupation ; but I believe 
 that the influence of the war on people's minds will be largely what 
 we make it or what we allow other people to make it. For some 
 considerable time the Press of this country have been telling 
 the public that we must have nothing more to do with Germany, 
 and some Chambers of Commerce are taking the same line. If the 
 workers are not on the look out, other people will dictate the after - 
 the-war policy : it is up to the workers to see that they have a say 
 in it. 
 
 DR. CARLYLE : One or two speakers suggested it would be well if 
 we were to fix our attention clearly upon one point. I take it Mr. 
 Cannan's paper is really intended to warn us against allowing ourselves 
 to drift into the conception of the desirability of national economic 
 self-sufficiency. He recognises the fact that in the country at large 
 there are very strong tendencies in the industrial commercial world, 
 which rather make for the idea that after the war we are to be self- 
 supporting to grow food and live upon ourselves through our own 
 exertions. I think there has been no more unfortunate speech made 
 during the last two years than that by Mr. Hodge, and I am rather 
 glad to think that Mr. Hodge's attitude is not shared by the repre- 
 sentatives of Labour in the country. We can easily repudiate the 
 idea at first sight, but there are no doubt certain conceptions involved 
 
57 
 
 which may prove to be dangerously attractive to all members in the 
 community, and the point I should venture to urge is this : the idea 
 of self-sufficiency is one which does appeal in a measure to the idea 
 of stability in trade the idea that we can secure a permanence of 
 conditions in trade, industry, and employment, and that a man who is 
 engaged upon a certain industry to-day will be able to remain in that 
 industry to-morrow. We must make up our minds that industry is 
 not going to secure a permanence of the particular kind of employment 
 in which men are occupied to-day. I think we ought to repudiate 
 the idea of self-sufficiency it is the most mischievous of all doctrines. 
 We must make up our minds that industrial occupation will be per- 
 petually shifting and changing, and we must reckon upon the con- 
 tinuous changing of conditions in industry. The Professor, having 
 gone as far as he did, ought to have gone a little further and suggested 
 what society ought to do with reference to the fact that we are going 
 to have free interchange of commodities, and the shifting of occupations. 
 Are we really going to leave the industrial population of this country 
 to bear the burden of this continual shifting ? That is what we have 
 done in the past. Shall we allow this weight to be borne by the people 
 least able to bear the burden ? I think the Professor's premises 
 ought to carry him rather further ; we are compelled to recognise 
 that the precarious uncertainty and the continuous movement and 
 shifting of industry which necessarily accompanies international 
 exchange of commodities will compel us to move towards some other 
 organisation of the industrial world than that which we have known 
 in the past. This left us in face of a condition of things of which we 
 are reaping the result to-day the result of class against class and man 
 against man ; if we are going to face the new world, we must face 
 it not only with free interchange of commodities but with enterprise. 
 We must take upon ourselves the burden of the conditions of the whole 
 community. I was very much interested in Mr. Newlove's and Mr. 
 Mabbs' speeches. I venture to say that what is, after all, clear enough 
 is that, however the old-fashioned older socialist doctrines may be, 
 and however true it may be that our experience in the war has not 
 tended to raise our opinion of the capacity of the State, one thing is 
 clear, viz., that in the extreme case the community as a whole can 
 intervene, and that in order to meet the 'exigencies of the future the 
 community itself will have to intervene. Mr. Cannan has pointed out 
 that the possibility of the life of society depends upon the recognition 
 of the necessary mutual interchange of commodities between the whole 
 world, but that brings with it also the conclusion that within our par- 
 ticular national society the character and the conditions of industrial 
 life will have to be accepted as being the responsibility of the whole 
 community. We want change, but not mere chaotic revolution ; 
 we want change, and must have it, but a rational and considered change 
 can only come if the community as a whole recognises its respon3ibility 
 to make the conditions of life for the industrial world tolerable, while 
 this continual shifting and movement of industry is taking place. 
 
58 
 
 PROFESSOR CANNAN'S REPLY. 
 
 Mr. Newlove spoke about changes of occupation. Of course it is 
 very difficult to say exactly how much freedom there is as to the choice 
 or change of occupation at the present time. I think we are perhaps 
 a little apt to assume the amount from what we have read, and our 
 rhetorical statements about the matter are not from our own experience. 
 In the first place, children must be directed, and surely that will 
 always be the case to a great extent whatever organisation you have- 
 you cannot expect a child to be able to decide for itself. The choice 
 must depend upon somebody else, and at present it depends mostly 
 on the parents. What really is true is that somehow or other 
 the occupations which want more labour in the interests of society 
 do somehow get it, subject to certain deductions owing to inequalities 
 of distribution. If you had the control of things you would not get 
 a much different result. There is a very considerable measure of truth 
 in the old idea that people generally are in the occupations where they 
 are required. With regard to change of employment, you say that 
 certain trades are done a way ..with by improvements in production, 
 and that the people who specialised in these employments are thrown 
 out of work. There have been great hardships in the past, and there 
 are some at the present time ; but from your own experience ask your- 
 self whether they are as great as you would imagine them to be from 
 an abstract point of view, and then ask yourself whether you do not 
 think from what you have read of the past that things have been 
 considerably improved in that way, and that, as a matter of fact, 
 these things do not happen with quite such disastrous effect as they 
 used to do. Our hope of the future in this matter, it seems to me, is 
 that the arrangements of the industrial world should make for further 
 progress in that direction, and that brings me to the bottom of page 
 41, which, as I expected, proved to be rather dangerous ground. I am 
 not prepared to say what exactly ought to be done, or how far you 
 ought to go. Why not ? I am a Professor of Economics and not a Labour 
 Leader. When other professors make practical suggestions, I usually 
 don't think much of them ; I do not wish to join that band, and I 
 am not going to be further drawn on the matter. In regard to the war 
 debt : several speakers referred to its disadvantage, and then one 
 speaker said we owed the money to ourselves, another speaker regarded 
 it as very objectionable and was prepared to sweep it all away 
 in rather a drastic fashion. It is true that most of it is owed to our- 
 selves (not the whole of it), and therefore the interest on it would mostly 
 be paid to some among us ; but is it no loss to the people in the country 
 as a whole that they should have to raise between two and three 
 hundred millions a year by some form of taxation or perpetual exaction 
 in order to pay it to other people in the country ? If you think that is 
 no encumbrance, all I can say is that I disagree with you. It is not 
 only a great encumbrance, but a great difficulty, and the whole thing 
 is very undesirable. While I should deprecate any suggestion of repudia- 
 tion, it is quite conceivable that some fairly drastic measure of redemption 
 
59 
 
 might well be adopted, so as to get rid of the thing quickly. I agree with 
 Mr. Newlove in speaking of the possibility of supposing that the ties 
 created by the present war are not strong enough to divert the course 
 of commerce for any considerable period after it. He said that Russia 
 would not trade with a distant country when there was a country 
 (now an enemy) close at hand, ready to supply them with goods. This 
 can be carried a little further. We are often told that blood is thicker 
 than water, but my impression is that contiguity is thicker than 
 blood. History has proved that it is contiguity that has triumphed. 
 The national boundaries of 1914 have not always been in existence ; 
 they have continually been changing, but on the whole the areas 
 under one flag have been enlarging, and that of course suggests an 
 answer to the people who are so pessimistic as to think that we can 
 never get out of the present international situation. As a matter 
 of fact, the areas within which wars are conducted have altered so 
 much that we can reasonably hope wars will come to an end in the course 
 of time. In the olden times there were wars between different parts 
 of England ; later, different parts of Europe ; and we may expect 
 the areas to gradually extend, even if they do not extend suddenly, 
 because if you have two large areas comprising the whole world, there 
 would be a sudden end when they became one. It therefore seems 
 to me possible that we may get beyond this period of international 
 jealousy in the future as we have partially in the past, by the extension 
 of the smaller areas. Therefore I think we are justified in looking 
 at the question of commercial policy from the standpoint which I 
 tried to put before you : what I tried to do was to suggest that you must 
 look upon it not from a petty parochial point of view, but from the 
 point of view of the great working-class which is not confined to one 
 country but covers the world. I hope to see your organisations, of 
 whatever kind they are, spread over and beyond national boundaries. 
 
60 
 THIRD SESSION. 
 
 CAPITALISM AND INTERNATIONAL 
 RELATIONS. 
 
 By A. E. ZIMMERN, M.A. 
 
 Some months ago, before the United States entered the war, a dis- 
 tinguished and benevolent Jewish- American millionaire, Mr. Jacob 
 Schiff, was invited to give his opinion on the project of a League of 
 Nations to prevent future wars. His reply was short and to the point, 
 as befits a successful business man. " Your league does not meet the diffi- 
 culty : the root of the trouble is economic." As every sermon must have 
 a text, this utterance by Dives may serve as an introduction to the 
 subject which I want to bring before you. 
 
 How far are economic causes at the root of the present war ? What 
 is the connection, if any, between the existing economic system and the 
 international antagonisms out of which the war has sprung ? What 
 exactly is meant by the phrase which is not uncommonly heard that 
 the war is a " capitalist " war, or, as the Russian Extremists put it, 
 a war waged by bourgeois governments in which the working class 
 as such has no concern ? And, if we can answer these questions, 
 what bearing has our answer on the problem of the better organisation 
 of international relations after the war ? 
 
 These are thorny subjects, which cannot be disposed of in a short 
 paper ; but so much confusion of thought and perplexity of spirit 
 prevail about them that an attempt to clear the issue may be worth 
 the attention of a conference concerned with the problem of recon- 
 struction. For we cannot apply remedies till we have ascertained the 
 disease ; and if Mr. Schiff 's words are strictly true, some of the remedies 
 which are just now being most confidently proposed do not " touch the 
 spot " at all. 
 
 Let us begin by defining our terms. I think we had better drop the 
 term " bourgeois." It is a Continental expression which defies exact 
 definition, but I fear that if one looked into it too closely, a fair pro- 
 portion of those present might have to plead guilty to the soft impeach- 
 ment. Do not some of us live in villas, and do not most of us wear 
 dark coats and stiff collars ? But what is 'meant by a " capitalist " ? 
 I suppose it means someone who has resources, in money or its equi- 
 valent, in addition to his natural labour-power, whether of hand or 
 brain. A penniless artist is not a capitalist ; nor is a landless agri- 
 cultural labourer ; but the capitalist class, in this sense, would include 
 
61 
 
 the whole body of people from the millionaire to the workman with a 
 few pounds in war loan or in the " Co-op." who have something " put 
 by," whether in securities or in land, or in a little business, or in bricks 
 and mortar. 
 
 I do not think anyone can honestly pretend that this body of people, 
 in this or any other country, either provoked the war or stand to derive 
 any benefit from its continuance. To begin with, they are not organised 
 in such a way as to have any common will or policy, or any means of 
 enforcing it ; and, in the second place, if they had, they would certainly 
 be in favour of peace, retrenchment, and prosperity, with low prices 
 and low taxes, just as, when they organise municipally, they are 
 invariably in favour of low rates. 
 
 An able Ameiican Socialist writer, Mr L. B. Boudin, in Socialism 
 and War* puts this point very clearly : "I know it is the fashion 
 among Socialists," he writes, " to assume and assert that the burdens 
 and miseries of war are borne wholly by the working class, and that 
 for the capitalist class it is a sort of picnic, abounding in fun and 
 excitement, besides being a good business. . . As to the present war, 
 I must say the idea is utterly baseless. This war is certainly no picnic 
 for any social class. Certainly not to the capitalist class, either in the 
 Alliance or in the Entente countries. It is even doubtful whether it 
 is good business the destruction of property is altogether too great 
 for that. As to the destruction of life, it is so appalling and so indis- 
 criminate as to class as to make the sacrifices of the capitalist class 
 very real and very substantial." 
 
 These words were written early in the war, but its prolongation has 
 only confirmed them. In another American publication I find a definite 
 estimate as to the effect of the war upon the capital values of the 
 possessing class: The New Republic, of June 2,* 1917, quotes the 
 " British Bankers' Magazine" as saying that the average value of 
 387 representative securities has declined 20 per cent, since the outbreak 
 of war. In other words, the capitalists who hold these securities are, 
 on the average, 20 per cent, poorer with respect to them than on the 
 outbreak of war. This is not nearly such a disastrous slump, after 
 three years of war, as Mr. Norman Angell taught us to expect, but it 
 fully bears out his general contention that "war is bad business." 
 
 This war, then, is certainly not in the interests of the capitalist 
 class in general ; and I think the same can be said of any war or scare 
 of war which either causes a slump in capital values or involves govern- 
 ments in large expenditure on armaments and mobilisation. 
 
 But, it will be said, there are sections of the capitalist class which 
 have benefited, and benefited greatly, by the war. Undoubtedly this 
 is true : the figures of the Excess Profits Tax returns reveal it for all 
 to see. Large numbers of traders and manufacturers have taken 
 advantage of the temporary scarcity of something which they had to 
 
 * New York : New Review Publishing Association, 1916, p. 32. The lectures 
 reprinted in it were delivered in the first winter of the war. 
 
62 
 
 sell, whether it be cargo-space or wooden huts, or potatoes, or various 
 kinds of munitions and equipment, and have exacted their pound of 
 flesh from the purchaser according to the recognised rules of the 
 commercial game. The war has undoubtedly brought about a great 
 transference of wealth among the property-owning and investing class, 
 not only in this country, but in all countries, belligerent and neutral 
 alike-. Most capitalists are considerably poorer, some are much richer, 
 and some people who were not capitalists at all have recently become 
 so . A correspondent in Italy writes to me, in words which have a f amiliar 
 ring : " Here, too, there is a great deal of profiteering, and all sorts 
 of common people are getting rich, and even say ' Long live the war ' " ; 
 whilst a very well-informed neutral with whom I recently had a talk 
 declared that if the war led to social upheavals, as he considered very 
 likely, they would most likely break out first in the neutral countries, 
 where the intense class-bitterness aroused by the working of the 
 capitalist system under the present abnormal conditions is not held in 
 check by any of the influences which may make for national unity in 
 the belligerent countries. 
 
 That any one at all should become richer or more comfortable at 
 a time when hundreds of thousands of his fellow men are making the 
 supreme sacrifice has struck public opinion in all countries as incon- 
 gruous, and indeed deplorable. It illustrates in a flash the measure 
 of the difference between the appeal of duty and the appeal of self- 
 interest a difference of which we were all dimly aware in pre-war 
 days, but which it has taken the experience of the war to burn in upon 
 our minds. But it would, nevertheless, be very difficult to prove that 
 all or any section of those who have improved their material position 
 as a result of the war either helped to bring the war about, or even 
 desired it. Many' of them have suffered personal losses which they 
 would have given their new-gotten wealth many times over to escape ; 
 and of the great majority I think it may be said with truth that they 
 made money because they could hardly avoid it. Merchants and 
 manufacturers, like most Englishmen, are very conservative in their 
 habits, especially when they are getting on in years. When such a man 
 has been accustomed all his life to working along certain lines, he cannot 
 easily adapt himself to new standards. Mr. Runciman, for instance, 
 is reputed to be a man of unusual ability, yet he saw nothing to be 
 ashamed at in saying from his place in the House of Commons, when 
 he was President of the Board of Trade, that it was more than one 
 could expect of human nature for a coalowner not to exact the highest 
 possible price for his coal.* Mr. Runciman has not even the saving 
 grace of being elderly, and he has had an experience of public life which 
 
 *Mr. Runcitnan's words were: "The coalowners are pretty shrewd business 
 men, and if they find offers coming along week by week at increased 
 prices, it is more than one can expect of human nature that they should 
 refuse these offers made to them." In reply to an interruption he added : 
 " All business men are anxious to get the largest amount they can for 
 what thev have to sell/' House of Commons debates, July 1W, 1915. 
 
63 
 
 might have made him familiar with other standards, if a Liberal 
 Cabinet Minister speaks and thinks in this way, it may be presumed 
 that thousands of ordinary people who live according to habit, without 
 trying to put their policy into words, are acting along the lines he 
 indicated. Their actions may set a deplorable and demoralising 
 example ; but they are not necessarily bad people. They are only 
 the victims of habit the followers of a vicious tradition. It is 
 true that they might have risen superior to the tradition, as many 
 of them have done ; but if we look at the matter in the broadest 
 light and judge them as we should desire to be judged ourselves, we 
 must conclude that it is not they who are at fault, but the system in 
 which they are working the system which has made it second nature 
 for them to make the highest possible profit on a commercial transaction. 
 
 But, I shall be told, to say that the individual capitalist is the victim 
 of a bad system does not prove that the war is not a " capitalist war." 
 In fact, it is rather an argument the other way. This or that capitalist, 
 or group of capitalists, may not have brought about or desired the war. 
 The American Socialist editor who, in August, 1914, explained what 
 was going on in Europe as " a frame-up by Eothschild " may have been 
 somewhat out of his depth ; we may grant that Sir John Jackson, 
 or Sir William Beardmore, or Sir Thomas Lipton, or Sir Walter Kunci- 
 man, who are alleged to have made money out of the war with 
 what justice Somerset House, I hope, knows better than I do had 
 nothing whatever to do with the " ten years of secret diplomacy " 
 which preceded the outbreak of hostilities ; but was not the capitalist 
 system itself the canker at the root of our civilisation which is responsible 
 for its sudden collapse ? Is it not, to say the least, profoundly dis- 
 quieting that a crisis in the nation's history should reveal so profound 
 a discrepancy between the spirit of national service which animates 
 its soldiers and sailors and the motive of profit by which its merchants 
 and manufacturers are expected, almost as a matter of course, to be 
 actuated ? If war brings out so much unselfish heroism among the 
 fighting men, and so much selfish greed among the business men, 
 is not the spirit of business the spirit which animates the existing 
 economic order an even greater enemy to human progress than the 
 menace of German domination against which we are contending ? 
 Is not the real enemy, perhaps, not the spirit of militarism, as embodied 
 in the Kaiser's armies, but the spirit of profiteering as embodied in 
 the normal life of all the contending parties ? If we want to secure 
 a truly just and stable peace, had we not better follow Mr. Schiff s 
 advice and look beyond the League of Nations, with its machinery 
 so familiar to workmen from its operation in other spheres for the 
 upholding of public right and the enforcement of international agree- 
 ments ? Will it not be quicker, in the long run, to touch the evil at 
 its source, and abolish an economic system which is admittedly on a 
 lower plane than the majority of those who are enmeshed in its toils ? 
 
 Three years ago I should have answered these questions with an 
 emphatic " No ! " not because I did not desire to see extensive 
 
64 
 
 changes in the existing economic system, but because I believed in 
 doing one job at a time and doing it thoroughly. War may 
 or may not be the most dangerous and deep-rooted disease of 
 modern civilisation, but it is certainly the most absorbing in its claim 
 on the attention and the energies of peoples. It demands stern, con- 
 tinuous, and undivided concentration. And as I believed, and believe 
 still, that the decisive defeat of German militarism is indispensable to the 
 future progress and happiness of the peoples of Europe, I was inclined 
 to lay aside speculations as to the reform of our industrial system till 
 " after the war." There were many who thought with me on the same 
 lines, who, as one soldier put it, went out to France to finish the work 
 of the French Revolution in Europe, meaning to come back to help on 
 the social revolution at home. 
 
 But as love laughs at locksmiths, so the course of events 
 stultifies the speculations of ^students. In thinking we could 
 thus separate the two great problems which rack the peoples 
 of Europe, we were wrong. Students and statesmen cannot choose 
 the order in which great and long-standing issues will allow themselves 
 to be dealt with, and to expect the problems created by the Industrial 
 Revolution to be frozen into immobility while Europe devoted itself 
 with a single mind to solving those created by the French Revolution 
 was to demand a second miracle of Joshua to ask the sun, which rises 
 afresh every morning above the smoke-cloud of our industrial centres, 
 to stand still in its course. Capitalism did not cause the war, it is 
 true ; it was the Kaiser, not Rothschild, who pulled the trigger ; but 
 capitalism and the philosophy of self-interest on which it reposes 
 were intimately connected with the atmosphere of selfishness and 
 domination which made the war possible. The two sets of causes, 
 political and economic, lay smouldering together beneath the crust 
 of European society. When one erupted, it should have been possible 
 to foresee that it would bring the other with it to the surface. 
 
 But perhaps not even the most clear-sighted observer of the 
 problems of modern society could have predicted the closeness 
 of the relationship which the course of the military operations 
 would establish between political and economic issues and forces. 
 Blinded by precedent, statesmen and economists alike thought 
 of war in terms of armies ; or, if they saw a little further, 
 of finance. A few months of war, waged on a modern scale, 
 showed that victory depended neither on courage in the field, 
 nor on gold and credit, but on industrial power. The struggle was 
 transferred, or rather extended, from the trenches to the workshop 
 and the shipyard ; and the clash of the fighting men became a mere 
 section of a vaster conflict between the entire working force of the con- 
 tending peoples. Thus the problems connected with the working of 
 the economic system, instead of lying dormant " for the duration of 
 the war," were everywhere discussed and considered afresh, not only 
 by the workers but by Governments, and all over Europe able admini- 
 strative brains began to consider them from a standpoint which had 
 
65 
 
 never before, in this country at any rate, been adopted in public policy 
 the standpoint not of profit but of use how best to enable our indus- 
 tries to supply the immediate and pressing needs of the community. 
 
 After three years of destruction the interrelation of the two sets 
 of problems the political and the economic has become more 
 intimate than ever. The British and German blockades which 
 threaten to denude both countries happily not in equal degree 
 of their stock of raw material and imported foodstuffs, 
 together with the withdrawal of labour from peace-time activities 
 over a large part of the world, are bringing statesmen face 
 to face with a situation in which all the old landmarks of capitalist 
 economics and fiscal controversy are submerged. The end of the 
 war will find Europe especially Central Europe poor, exhausted, 
 and largely deprived of its means of support and supply. As a recent 
 writer puts it, in an article bearing the ominous title 'A World Famine ' : 
 4 Unless some very drastic and very far-reaching measures are taken 
 in time, and taken on a sufficiently large scale, there will be many 
 millions of families in parts of Europe and South-Eastern Asia without 
 employment and without means to buy the scanty supplies of extremely 
 dear food that will be locally accessible to them. ... It is not 
 too much to say that there will be places within a day's journey of 
 European capitals where society, with an extremity of want not 
 paralleled in Europe since the Thirty Years' War, may be near dis- 
 solution.'* Already we can see that among the questions with which 
 the Peace Congress will have to deal will not only be the establishment 
 of public right and the redrawing of the map of Europe, but the more 
 urgent problem of how to provide food, clothing, and other necessaries 
 to the distressed peoples of Europe, a task which the existing economic 
 system has not performed with conspicuous success in peace time, 
 and is certainly not qualified to cope with in the unprecedented con- 
 ditions of the immediate post-war period. 
 
 So far from setting back industrial change, then, the war has brought 
 it in its stride ; and the discussion of economic problems is not only 
 not irrelevant to the problems of the war and the settlement, but is 
 vitally bound up with them. The war has shown that modern life is 
 all of one piece : that its separate problems cannot be isolated and taken 
 one at a time for special treatment ; and that when statesmen inscribe 
 liberty and justice on their banners and bid their fellow citizens die for 
 them, they are stirring up feelings and drawing attention to contrasts 
 for which, sooner or later, they are certain to be called to account. 
 
 Now perhaps we are in a position to sum up this rather abstract 
 discussion as to the relation between capitalism and the war. To those 
 who say : " Leave the economic issue aside and concentrate all on 
 winning the war," the answer is : The war itself will not allow us to 
 leave the economic issue aside ; and, that being so, winning the war 
 necessarily takes on a wider significance. It means the triumph of 
 liberty and justice, not only on the battlefield but at home : the 
 
 *Netv Statesman, August 25th, 1917. 
 
66 
 
 extension to the economic sphere of the principles which the Allies 
 have proclaimed in the political, it means accepting Mr. Schiff's 
 challenge, and grappling with the deep-seated industrial problem 
 which, if not, as Mr. Schiff declares, the root of the trouble, is certainly 
 one of its twin roots. To the smaller group on the other hand who say : 
 " Leave the war to take its own course and concentrate all on abolishing 
 the existing economic order," the answer is : You are no more free 
 than the politicians to select one problem for treatment and ignore the 
 rest. You may ignore the war, but the war will not ignore you. 
 Moreover, the existing economic order which you are out to " abolish," 
 is in process of transformation before your eyes. Much better watch 
 what is happening and try to learn from it, rather than stand aside 
 and denounce profiteering whilst you allow militarism to take its course. 
 How can the ideals of the Allies be applied to our industrial system 
 at home ? To attempt an answer to this question lies beyond the 
 scope of this paper. I will only say this : that the war has effectually 
 disposed of the idea that a simple and sufficient remedy for our indus- 
 trial ills is to be found in abolishing the system of privately owned 
 enterprise and replacing it by a system of State ownership. The war 
 has certainly dealt a heavy blow at the capitalist system : the system 
 which relied on the self-interest of competing producers and middlemen 
 to supply the needs of the community. But the State, which has been 
 enthroned in their stead, has not proved itself able unaided to organise 
 our industrial life on a better basis. State officials are not actuated, 
 it is true, by motives of pecuniary gain ; but humanity has other 
 failings besides those which used to be attributed as virtues to " the 
 economic man," and some of these can put grit into the machine 
 quite as effectually as the greed of the most thoroughgoing capitalist. 
 The war has, in fact, modified, if not transformed, the attitude of 
 British Socialists towards bureaucracy ; and I suspect that, when the 
 curtain is lifted, we shall find the same to be the case on the Continent. 
 The result of the intervention of the State has been not altogether 
 unlike what happens when a bystander interferes in a street brawl 
 between a drunken couple. Workmen and employers have discovered 
 that their familiarity with their own trade and their long association 
 together, even on cat and dog lines, have given them a certain common 
 stock of sympathy as against an intruder from outside. The intruder, 
 on the other hand, is beginning to wonder whether he has not shown 
 a certain want of tact in his interference. The resulting situation may 
 be judged from the nature of the proposals put forward with official 
 sanction in the Whitley Keport, and from the favourable reception 
 accorded to them. Between State Socialism and private capitalism 
 we have discovered that there is an intermediate region : industrial 
 self-government. The association of the two parties who understand 
 their own business, in an equal partnership, in a common service, 
 will itself go far to redeem the organised industries from the domination 
 of pecuniary motives. There is no space to pursue this line of thought 
 further. Moreover, many of those present, who know the working of 
 
67 
 
 some of the Boards of Control already set up for certain industries, 
 can speak with more knowledge than an outsider. But if, when war- 
 time pressure is removed and the State has once more retired to a dis- 
 creet distance, the self-governing institutions national, local, and in 
 the workshop which are now being officially advocated become a 
 living reality, it will be true to say that one of the results of the war 
 has been to promote our declared national aims of justice and liberty 
 among important sections of our own people. 
 
 But the most urgent economic task which the settlement will impose 
 will not be domestic, but international : it will be concerned, as we have 
 already suggested, with the securing of supplies upon which the 
 recuperation of the peoples, and, more especially, of the industrial 
 peoples, depends. How can this problem best be dealt with ? 
 It is worth while trying to answer this question ; for upon 
 its successful solution in the months following the signing of peace 
 the international "atmosphere" of the post-war period will very 
 largely depend. 
 
 Private capitalism, as we have seen, must prove unequal to the 
 task. Nor will " industrial self-government " help us ; for we are 
 dealing with what is essentially a problem of foreign trade and foreign 
 policy. The responsibility for supplying the needs of their exhausted 
 populations must, in one form or another, be borne by the various 
 Governments. 
 
 What form should this action take ? The natural course might seem 
 to be for the various Governments concerned to deal with the matter 
 themselves ; and, in point of fact, enough is known for the conjecture 
 to be hazarded that every Government in Europe, belligerents and 
 neutrals alike, is already setting on foot an official organisation to deal 
 with the problem of post-war supplies . Self-preservation alone demands 
 it. No belligerent Government dare demobilise its armies till it can 
 provide employment for its workers ; and employment depends in 
 its turn upon industrial raw material, and raw material upon shipping. 
 There is therefore urgent need for all the governments to organise what 
 resources they can lay their hands on with at least the same thorough- 
 ness as they have devoted to the business of mobilisation or making 
 war. In spite of the perilous uncertainty of many of the factors 
 involved, dependant as they are on the terms of peace, Government 
 " Reconstruction Departments " are probably everywhere at work on 
 the twin problems of demobilisation and supplies. 
 
 But, here again, can we rely upon the replacement of private capital- 
 ism by State action to solve the problem satisfactorily ? The individual 
 officials acting on behalf of the various Governments may not be 
 " profiteers," but what assurance is there that the Governments 
 for whom they will be acting will not be actuated by motives at least 
 as unworthy as those of the capitalist ? Is competition between 
 Government and Government, whether for wealth or for territory 
 or for power, any less dangerous to the world's welfare than the com- 
 petition between trader and trader or syndicate and syndicate ? 
 
68 
 
 Is it not, in fact, far more dangerous, owing to the far greater concentra- 
 tion of power in the hands of the Governments that are competing and, 
 owing to the whole armoury of weapons, military, and diplomatic as 
 well as commercial, which they can bring to bear on the attainment 
 of their purposes ? Is not, indeed, the association between Govern- 
 ments and economic enterprises one of the most sinister features of 
 the diplomatic history of the years before the war ? In so far as the 
 war was the product of the capitalist spirit, was it not the economic 
 projects and ambitions of Governments rather than of individual 
 capitalists which brought it about ? In Morocco, for instance, though 
 the private firm of Mannesmann Brothers had something to do with 
 the international troubles that arose, could Mannesmann Brothers 
 by themselves have created an international crisis or brought about 
 a European war ? It is said that certain American interests in Mexico 
 have tried on numerous occasions to involve the United States in war 
 with Mexico. They have hitherto failed, owing to the attitude of the 
 United States Government. Similarly neither in Morocco nor in Persia 
 nor in Turkey nor in China would the penetration of European capitalists 
 have been a contributory cause of the present war had not the govern- 
 ments taken up their stand behind the private trading interests and 
 associated themselves and their prestige with their enterprises. Left 
 to themselves, capitalists may be selfish and grasping ; but they 
 cannot bring about war, for they do not wield the power of the State. 
 It is for this reason that private capitalism, so far from being recog- 
 nised as a war-making force, was for many years regarded, and is still 
 regarded in many quarters, as pre-eminently pacific in its influence on 
 international relations. Cobden, for instance, was a capitalist to the 
 backbone ; no man in his day held a firmer belief in the virtues of 
 the existing economic order. But he was also a staunch and livelong 
 advocate of peace at a time when pacifism was a far less popular 
 creed than now. And he was an advocate of peace because he was a 
 man of business : his pacifism and his internationalism sprang directly 
 out of his belief in the harmonious and satisfactory working of the 
 capitalist system. Just as he believed in unrestricted private enterprise 
 at home and resented the interference of the State with the natural 
 working of economic laws, so he believed in the mission of the private 
 trader, unassisted and unhampered by his own or other governments, 
 to spread prosperity and harmony throughout the world. Hands off, 
 Governments ! was his perpetual cry ; leave international politics 
 to the private trader, and he will keep you clear of war. What he 
 dreaded above all else, and surely, as the event has shown, not without 
 reason, was the concentration of political and economic power in the 
 same hands the hands, moreover, which hold in their keeping the 
 keys of war and peace. As the motto of his earliest political writing 
 he adopted a famous sentence from Washington's farewell address to 
 the American people : " The great rule of conduct for us in regard 
 to foreign nations is, in extending our commercial relations, to have 
 with them as little political connection as possible." To the spirit of 
 
69 
 
 that motto Cobden remained true all his life. Like Mr. Schiff, he 
 doubted the value of international political machinery. He did not 
 wish to see any sanction provided for international agreements or to 
 see his own country involved in the quarrels of other nations. " Non- 
 intervention " was his motto. Let each country keep to itself and 
 keep its own peace. In case of quarrel, he favoured settlement by 
 arbitration ; but far better avoid a quarrel, if possible, by maintaining 
 a placid and dignified isolation. Much the same view is held or was 
 held up to the eve of the war by his latter-day successors, Mr. Norman 
 Angell and his group. They sought to divert men's minds from thoughts 
 of war by taking the businesslike attitude that war does not pay. 
 They appealed to reason against passion, to self-interest against 
 patriotism, to solid considerations of profit against romantic dreams 
 of national greatness. 
 
 Alas ! it is proved to demonstration that war does not pay ; but the 
 deduction which Cobden and Norman Angell drew from that fact 
 namely, that Governments should go on governing and leave trading 
 to the traders, has been falsified once and for all. The war has shown 
 that you cannot draw a sharp line between " government " and 
 " politics " on the one hand, and " trade " on the other. That indeed 
 might seem to be the moral, not simply of the war, but of the history 
 of the commercial and colonial policy of the Great Powers during the 
 half -century between Cobden's French Treaty and to-day. Considera- 
 tions arising out of foreign trade, questions of fiscal policy at home 
 and in overseas dependencies, cannot be kept out of the political arena. 
 They do not simply concern the livelihood of traders. They vitally 
 affect the life of nations. The same is true of the many commercial 
 questions which the war has shown us to be bound up with the problem 
 of national defence. The true moral to be drawn from the fact that 
 war is bad business is not that governments should eschew business 
 for fear of burning their fingers at it, but that governments should go 
 into business in a spirit calculated to maintain the world's peace. 
 This is equally true whether the " business " in question consists in 
 devising a tariff or negotiating a commercial treaty, or subsidising 
 a " key industry," or in actual commercial transactions in the world's 
 markets. 
 
 What is the bearing of all this on the immediate question at issue- 
 that of post-war supplies ? It is that the war will have been fought 
 in vain if it finds the various governments, in their mutual business 
 relations, actuated by the same grasping and anti-social spirit as too 
 often characterised their pre-war commercial activities. If the problem 
 is left to be solved on competitive lines, with the governments outbidding 
 one another, there will be a scrambling and pushing, and threatening, 
 and bullying such as the world has never seen before, and the League 
 of Nations will perish in its cradle amid the wrangles of the rival 
 disputants. The problem is one that can only be handled successfully 
 on co-operative lines, both in the interests of the world as a whole 
 and of the populations concerned. And once it is realised that co- 
 
70 
 
 operation between the various governments is the only policy compatible 
 with a tolerable state of international relations after the war, it will 
 not take long to draw the further conclusion that the wisest course 
 would be to set the whole matter on an international basis ; in other 
 words, for the various governments to delegate powers to purchase, 
 allocate, and convey supplies on their behalf to an international 
 Commission. Such a Commission would then, in effect, become a 
 Relief Commission for the world as a whole, similar to the Commission 
 which looked after the needs of Belgium, under American guidance 
 during the earlier period of the war. 
 
 This suggestion has already found a place in the Labour Party 
 draft peace terms submitted to the Inter- Ally Socialist Conference.* 
 I will not therefore waste words on advocating it. On abstract grounds 
 it is sure to commend itself to many. It seemed better to emphasise 
 the nature of the alternative policy with which Europe would be 
 faced if it were not adopted ; to draw attention to the effects of an 
 orgy of competitive bargaining by governments, some of them, in- 
 cluding the smaller neutrals, in desperate case, upon the prospects of 
 the incipient League of Nations. However impracticable the proposal 
 seems, it is worth while trying to make it practicable, for the sake of 
 what it will avoid. 
 
 But the proposal is not inherently impracticable. If the machinery 
 had to be created de novo within a few weeks or months, its world- wide 
 scope might well' prove beyond the powers of human organisation. 
 But in fact the machinery is already there ready to hand : it 
 exists in the shape of the blockade, and the Inter- Ally economic control 
 which has been established in connection with it. The blockade, 
 which was first established to keep goods out of Central Europe, 
 slowly developed, through the pressure of events, into an organisation 
 for allocating shipping and supplies to the different countries and ser- 
 vices. The rationing of imports will not need to begin after the war. 
 The Allies and neutrals are already living under a regime of rationing. 
 All that will be required will be to adjust the form and scope of the 
 organisation to meet the needs of the post-war situation. It is 
 impossible to predict what changes will be needed in this direction 
 till we know the conditions at the end of the war ; nor is it profitable 
 
 *For convenience of reference the recommendation in question is subjoined : 
 "That in view of the probable world- wide shortage, after the war, of 
 exportable foodstuffs and raw materials, and of merchant shipping, it is 
 imperative, in order to prevent the most serious hardship, and even 
 possible famine, in one country or another, that systematic arrangements 
 should be made on an international basis for the allocation and conveyance 
 of the available exportable surpluses of these commodities to the different 
 countries in proportion, not to their purchasing powers but to their several 
 pressing needs ; and that, within each country, the Government must for 
 some time maintain its control of the most indispensable commodities, in 
 order to secure their appropriation, not in a competitive market mainly to 
 the richer classes in proportion to their means, but systematically, to meet 
 the most urgent needs of the whole community on the principle of ' no 
 cake for any one till all have bread.' " 
 
71 
 
 to speculate on the treatment to be meted out, under such an arrange- 
 ment, to the Central Powers. But the embargo recently proclaimed 
 by President Wilson on American exports to neutral countries and the 
 extensive powers granted to Mr. Hoover as Controller of American 
 food supplies indicate that the United States Government has a clear 
 vision of the part which the supply question must play both during 
 the closing phase of the war and in the period of reconstruction. 
 President Wilson is not only the controlling mind in one of the largest 
 producing areas in the world, but he is also the leading exponent 
 of the idea of the League of Nations. It is therefore not unreasonable 
 to expect that the initiative in the matter of the international control 
 of post-war supplies will come from Washington. 
 
 There is no space to carry the suggestion further. One other 
 observation may. however, be made. One of the chief tasks of the 
 Relief Commission, on which the Labour Party Memorandum lays 
 stress, would be to determine the order in which commodities 
 should be imported. It would have to decide which were the 
 more and which the less important imports. On what principle 
 would this be decided ? In ordinary times, under the regime 
 of private enterprise, it is decided by " demand." If more people 
 are prepared to pay for pianos than for boots, more pianos will be 
 imported than boots, though a piano is a luxury and there may be many 
 thousands of people who badly need boots. But the Relief Commission 
 would make its decision not according to individual demand, but 
 according to social need to each nation "according to its needs. " 
 That is the purpose for which it would be appointed. For 
 some time after the war, at any rate, necessaries will take pre- 
 cedence over luxuries ; and it is to be hoped that even after 
 the control of imports has been relaxed, the object lesson in social 
 economics provided by the working of the Commission's " priority 
 scheme " may diffuse saner and healthier views about spending among 
 the consuming public than prevailed before the war. " No cake until 
 all have bread " is a sound maxim of social policy against which the 
 existing economic system constantly offends. The remedy lies partly 
 with governments, but partly also, as the war has revealed to us, 
 with the conscience of the consuming public. 
 
 One more suggestion in conclusion : The organisation proposed 
 above could not, from the nature of the case, last very long. Under 
 the best of conditions it would not be popular, and it will need all 
 the support of educated opinion in the countries affected if it is to 
 carry through its task without discredit to the prestige of international 
 organisation. There are, however, other more permanent pieces 
 of work waiting to be done if the connection between international 
 organisation and economic policy is to be maintained and the 
 world saved from relapsing either into the laissez-faire capitalism 
 advocated by Cobden or the anti-social inter-state competition 
 which characterised the generation preceding the war. If the 
 League of Nations comes into being, it would be wise to bear 
 
72 
 
 Mr. Schiff's criticism in mind and extend its purview to the economic 
 questions which have been the cause of so much international friction. 
 The most practicable line of advance would seem to be through the 
 setting up of permanent Standing Commissions to investigate and 
 watch particular problems and make recommendations about them 
 to the conference of the League to form the subject of resolutions 
 which would then be carried down to the separate sovereign Parliaments. 
 There is no space to go into these problems in detail ; but the mention 
 of such questions as Labour legislation, migration and conflicts of 
 standard of life, conservation of the world's resources, the export 
 of capital and foreign loans and concessions, the control and improve- 
 ment of world-communications, is sufficient to show how inextricably 
 economic problems are now bound up with foreign affairs and public 
 policy all the world over, and how valuable a dispassionate and 
 authoritative statement about them might be in influencing opinion 
 and moulding the policy of governments. The days when economic- 
 internationalism spelled the negation of official action are gone past 
 recall. If the world wishes to organise its life on a peaceful basis, 
 it must habituate itself to the idea of international governmental 
 organisation. It must learn to think of itself as a single society and 
 to disentangle those of its social problems which are common to all 
 its members and can only be dealt with by the common action of the 
 governments concerned, from the larger body of questions, such as 
 taxation and fiscal policy, w r hich are primarily matters of local and 
 national concern. Above all, mankind must have the courage to 
 judge both economic and national issues from an ethical standpoint 
 and to adjust its policies and institutions, whether in government or 
 in business, to that wider point of view. In this great task of changing 
 the motives which have hitherto been dominant in our economic policy 
 and relationships, and of bringing them into harmony with the Golden 
 Rule, the working-class movement which, whatever its other failures, 
 has never bowed the knee to commercialism, may well find one of the 
 mainsprings of its activity in the generation after the peace. If the 
 great European working-class leaders rise to the height of the oppor- 
 tunity they will interpret the mind and conscience, not of their class only 
 but of a world which is learning through suffering the true meaning 
 of civilisation. 
 
 MR. ZIMMERN, speaking on his paper, said that he had raised three 
 points : (1) How far was this war a capitalist war, and what were the 
 relations between our general economic system and the war ? (2) The 
 economic situation which would arise in the immediate post-war 
 period the transition period after the war ; and (3) Economic questions 
 of an international kind which ought to form the subject of deliberations 
 in a future League of Nations. He suggested that most of the dis- 
 cussion should be devoted to the second point. There was a great 
 deal of nonsense being talked about Morocco, and the bourgeoisie, and 
 
73 
 
 the wicked capitalist ; but there was a fundamental truth underlying 
 these wild statements. He had tried in his paper to sum it up by 
 saying that governments should go into business in a spirit calculated 
 to maintain the world's peace. It was not wrong for Germany, or France, 
 or this country to be interested in questions of foreign trade. 
 Questions of foreign trade and fiscal policy were important to us 
 as citizens they could not be left to the merchants of Bir- 
 mingham, and we could not say they were no concern of ours as 
 individuals ; we had to approach them in the spirit of our political 
 ideals. Passing on to his third point the economic side of the work 
 of a League of Nations Mr. Zimmern said it was tremendously 
 important that we should form a fairly clear picture of the kind of way 
 in which international organisation would work after the war. He 
 imagined that there might be set up perhaps at the Hague a body 
 which should meet every year- consisting of delegates from the 
 Parliaments of the countries composing the League. They would not 
 pass laws, but their function would be to pass resolutions and to form 
 the public opinion of the whole civilised world. It would be necessary 
 to have attached to this body a number of Standing Commissions to 
 investigate and to report on the problems which should come up for 
 consideration. The working class leaders of the democracies would 
 have an enormous opportunity in such a gathering, as they would be 
 working on behalf of the whole civilised world, and not merely with their 
 own country at heart. In this way, he thought, the question of the 
 conservation of the world's resources and the many other questions 
 containing within themselves the possibility of wars, could be peace- 
 fully settled and carried to the legislatures of the various countries 
 and there, it might be hoped, made the subject of legislation by the 
 democratic parties in those countries. 
 
 Returning to his second point, he said that it was very important 
 to get a clear picture of the international economic position in the 
 immediate post-war period. When peace negotiations began, the 
 economic problem of the needs of the world food, clothing, shelter, 
 etc. would seem more urgent than any other. And even before the 
 end of the war the shortage of necessary commodities would become the 
 most prominent problem in the whole situation not only here, but in 
 Germany and Austria. He was certain that we should have neither 
 Free Trade nor Protection in the immediate post-war period. 
 With the shortage of shipping and of supplies of every kind it would 
 be impossible to have unrestricted trade. We should have regulated 
 trade, with some system of licenses such as we had at present. It was 
 ludicrous to think of having a tariff on imports, which meant making 
 it more difficult for goods to come in, at a time when, owing to the 
 shortage, all countries would have to set up a system of magnets to- 
 draw supplies from all over the world ; instead of having import 
 prohibitions we should have import inducements. There were certain 
 countries, such as Brazil, which produced monopolies. Those countries 
 could levy export taxes, and make the whole world pay more. The 
 
74 
 
 countries which produced primary commodities would be in a very 
 favourable position. There would be no more talk about dumping 
 we should beg the foreigners to dump things on us. This, of course, 
 applied to the immediate post-war period. During this period the 
 shortage of supplies would absolutely necessitate some form of govern- 
 mental action, and the matter must come up at the Peace Conference. 
 Governmental action would almost necessarily lead to international 
 action, for the shortage was a world shortage and the problem was a 
 world problem. This was a field of work in which the international 
 idea could take root for the first time, and thus a beginning could be 
 made in international organisation. 
 
 In conclusion, he said that the whole future of a good settlement 
 depended on the atmosphere of the various parties. The worst thing 
 the Germans had done was to destroy confidence, and yet everything 
 depended on confidence. The economic question would, by its urgency, 
 be the first to come up, and on the way in which it was settled would 
 depend the atmosphere in which the people who negotiated the 
 other questions would approach their work. The problem of supplies 
 must be handled in a way which was in tune with the aspirations 
 for which we believed we were fighting in this war. 
 
 QUESTIONS. 
 
 Question : Does the speaker think that as soon as the war is over 
 we shall tolerate buying anything from Germany ? 
 
 Answer : So far as the private purchaser is concerned, Germany 
 will in any case find it very difficult to sell her goods ; so far as 
 governments are concerned, it depends upon the peace negotiations, 
 and the kind of Germany we have to deal with then. 
 
 Question : How are we to reconcile this position of no tariffs with 
 the statements recently made by the Tariff Reform League, and with 
 Mr. Hewins' position in the government. 
 
 Answer : People in this country are very much slower to change 
 their opinions than facts are to change themselves. If you ask me 
 about tariff reformers, I am inclined to think they are still talking 
 in terms of the pre-war situation, and that some of the things they are 
 asking for will be clearly impossible in face of the post-war situation. 
 As regards Mr. Hewins and Colonial preference, the only official 
 statement that we have about Colonial preference was a statement by 
 the Prime Minister, suggesting that preference might be given other- 
 wise than by tariff, e.g., by improved communications. Sir Robert 
 Borden has spoken in the same sense. It must be obvious that when 
 we are subsidising the loaf to keep food cheap, we are not likely to 
 put a tariff on foodstuffs Mr. Lloyd George made that point himself. 
 
75 
 
 Question : Are we reconciled to Government intervention in forming 
 what are really trusts for the brass workers of Birmingham in offering 
 them not only advice, but also money, in order to further their export 
 trade ? 
 
 Answer : It may or may not be desirable that the brass workers 
 or any other industry in the country should form an association and 
 work together more closely, but that surely has nothing necessarily 
 to do with tariffs. In fact, if closer association tends to more efficient 
 production, to that extent it makes the tariff less necessary and reduces 
 the outcry for it. 
 
 Question : Did I understand the lecturer to say that if the League 
 of Nations was set up, that the representatives would be appointed 
 from Parliament ? Does he not think that in view of the importance 
 of preventing future wars it would be desirable to draw better people 
 from elsewhere ? 
 
 Answer : The remedy is to get better people into Parliament. 
 
 Question : If in a League of Nations the representatives are only to 
 be chosen from amongst the politicians (and the Labour Party do not 
 seem likely to have a majority even in the next election), will the 
 working-class leaders get much chance of being chosen ? 
 
 Answer : .1 suppose the delegates will be chosen in proportion to 
 their numbers in the House, and, after all, the influence of a party or 
 of a party leader does not depend entirely on numerical superiority. 
 If you get such men as Branting, Bernstein, Renaudel, or Vander- 
 velde, men who have very wide knowledge and have thought deeply 
 on these questions, one man like that will carry more weight than 
 fifty ordinary rank and file members of Parliament. On a proportional 
 system some Labour leaders are certain to get there. 
 
 Question : Is it not almost impossible to hope that the Labour Party 
 will return men of the character of Mr. Branting ? 
 
 Answer : That is why we have conferences like this ! 
 
 Question : I understand that the lecturer argues that Capitalism 
 had nothing, or very little, to do with this war. How far is this re- 
 conciled with the statement that the international armament firms 
 have agents in different countries whose object is to foment the spirit 
 of warfare. 
 
 Answer : I am quite of opinion that some capitalist interests have 
 benefited by the war, but I should have thought that in this country 
 at any rate we were strong enough to prevent these people influencing 
 our national policy. 
 
76 
 
 
 
 Question : In the minds of many this is a trade war. What does 
 the lecturer think ? 
 
 Answer : If this war was started as a trade war, I believe it is the 
 worst speculation the traders have ever embarked upon ! 
 
 Question : What does the lecturer think would be the effect upon any 
 industry of the total prohibition of imports for a given period after 
 the cessation of hostilities. Several of the departments set up by the 
 government have already advised total prohibition. 
 
 Answer : In this matter we have the example of Germany to guide 
 us several industries have been closed down altogether, and the 
 workers have gone into the army or been put on to other work. The 
 Board of Control for the industry, selected which firms should be 
 shut up and which should survive for the rest of the war. It is obvious 
 if an industry depends on certain imports, and the imports are not 
 there, the industry sooner or later will suffer. Supposing you have 
 only a certain amount of tonnage and can only import a certain number 
 of things, you have to adopt the principle of priority, and choose 
 which you will import e.g., the choice between wheat or pianos. 
 After all, the social need is more important than the need of any par- 
 ticular industry. 
 
 Question : Does the lecturer not think that as the economic interests 
 are the major ones, the people pursuing these have used the political 
 machinery for questions of peace and war ? 
 
 Answer : To some extent, yes. To find out what extent we should 
 have to discuss the whole European foreign policy for the last fifty 
 years. 
 
 Question : As regards State control. Does Mr. Zimmern not believe 
 that the only line of progress is the nationalisation of industry and 
 State control ? And further, if his answer is in the affirmative, whether 
 he believes that a protectionist policy would not tend to form monopolies 
 and trusts, and if this be the case whether State control and nationalisa- 
 tion of industry is not the only line of progress ? 
 
 Answer : I am in favour of State control during $he immediate 
 post-war period, but I am not in favour of the complete nationalisation 
 of all the industries in this country. I should be in favour of an increase 
 in State responsibility in that way, but to ask the State now to take 
 over all industries does not seem to me practicable. 
 
 Question : As regards Free Trade and Protection after the war. 
 Does the lecturer believe that the only line of progress from the labour 
 standpoint is to offer inducements by a protectionist policy in order 
 to encourage monopolies and trusts because that would be the easiest 
 way for the State to take control ? 
 
77 
 
 Answer : It may be desirable to encourage monopolies under State 
 control in certain industries, to have a greater amalgamation of firms 
 and to put them under State control or ownership ; but, on the other 
 hand, this is not necessarily bound up with Protection. In some 
 industries as for example, the building trade you could not 
 have Protection at all. I should separate these two questions 
 entirely and treat the question of monopoly (or syndication or closer 
 working, or whatever you call it) quite separately. I certainly think 
 that a great deal of improvement could be effected by closer 
 working together in various industries, and that raises questions with 
 regard to Labour representation and control which ought to be very 
 carefully gone into by Labour bodies. The question of Protection is 
 quite different. My own opinion is that the war has been an extraordinary 
 justification of Free Trade finance, but that we shall not get back to the 
 Protection v. Free Trade controversy. What we are more likely to get is a 
 very sharp division on the question of who is to pay the war debt direct 
 v. indirect taxation. If you look back on old Tariff Reform literature, and 
 consider the amount of revenue which they hoped to get by a general 
 tariff, you will see how infinitesimal that amount is, compared with the 
 five or six hundred millions that we shall have to raise after the war 
 for current expenditure and interest on war debt. The hopes of getting 
 revenue from a tariff have vanished, and the prospects of direct taxation 
 have been increased beyond anything we dreamt of. The whole question 
 of Protection looked at from a revenue point of view will be quite 
 different after the war. 
 
 Question : In regard to the increase of wealth. Should not the State 
 take over banking and credit ? 
 
 Answer : That is very difficult. I do not know enough about it to 
 answer the question properly. The fact that certain industries make 
 large profits is not a sufficient reason for taking them over. 
 
 tion : Is it not necessary to grant some sort of preferential 
 treatment to our Colonies and present Allies ? 
 
 Answer : I think we do grant preferential treatment. We are 
 always being asked about Colonial preference, but we have given 
 them far more than they have ever given us. It is true that Canada 
 gives us a preference of 33J, but we have given them defence for over 
 a century. I think we are on the right side of the balance, but I am 
 quite prepared to consider whether it is a feasible thing to tax ourselves 
 for the sake of benefiting producing interests in those countries, though 
 I do not see any good reasons for doing so at present. 
 
 Question : To whom is the war debt owing ? 
 
 Answer : It is owing to the people of this country, and to the people 
 of America, and on the other hand we have a good deal owing to us 
 by Italy, Boumania, and other countries. 
 
78 
 
 DISCUSSION. 
 
 MR. NAYLOR (London Society of Compositors), in opening the discussion. 
 read the following paper : 
 
 I find myself in agreement with most of what Mr. Zimmern has 
 said and written on this subject, although not seeing eye to eye with 
 him in all his conclusions. Very wisely, he opened his paper with a 
 few questions and definitions, with a view to keeping the discussion 
 free from, misunderstanding. I purpose to follow him in this direction, 
 in order that our differences may not take anyone off the track of the 
 argument . 
 
 Here are his leading questions : 
 
 How far are economic causes at the root of the present war ? 
 
 What is the connection between the existing economic system 
 and the international antagonisms out of which the war has 
 sprung ? 
 
 What is meant by the phrase " a capitalist war " ? Is it a war 
 waged by bourgeois governments in which the working-class 
 as such has no concern ? 
 
 What bearing has the answer to these questions on the problem' 
 of the better organisation of international relations after the 
 war ? 
 
 I will answer these questions in my own words, so that Mr. Zimmern 
 and others may see that my point of view is very much the same as 
 his. Let me say at once that it is almost impossible to escape the 
 conclusion that the war is due to economic causes. I agree with 
 Mr. Zimmern's view that the war is not in the interests of the capitalist 
 class in general. ' No class, as a class, derives advantage from a state 
 of war. War must reduce capital values, as it also reduces wage 
 values. That certain sections of both capital and labour incidentally 
 gain through war conditions does not destroy that contention, for the 
 great mass of the people always stand to lose. In addition, all classes 
 contribute largely to the sinking fund of human life and suffering that 
 is being built up to liquidate the wrongdoings of a perverse civilisation. 
 It may be said of war as of many other institutions the few gain 
 while the many lose. The economic causes at the root of the war 
 are not specially related to capital or to capitalistic institutions. It is 
 an economic war because it originates in a desire for national expansion 
 not for national aggrandisement but for national well-being (as that 
 is understood, rightly or wrongly, by capitalistic governments). It is 
 a war, nominally of governments, but through them of nations or 
 peoples. And the nations or peoples must be prepared to accept the 
 responsibility. Whatever may have been the causes of war centuries 
 ago, to-day they are brought about by the necessity for national 
 economic development, which is drawn along the lines of territorial 
 expansion. Who would pretend that the murder of the heir to the 
 
79 
 
 Austrian throne was the real cause of the war, except in so far as that 
 murder may have arisen out of Servia's desire for the expansion, to 
 which Austria was one of the main obstructions ? Again, the violation 
 of the neutrality of Belgium was merely a secondary cause of Great 
 Britain's entry into the war. The underlying reason was that Belgium's 
 position of neutrality offered a partial guarantee against aggression 
 on the part of Germany an aggression founded upon Germany's 
 desire to remove the obstruction of Britain and France in the markets 
 of the world, by military means if necessary. Likewise, we may assume 
 that Germany went to war to preserve her economic independence 
 as well as her integrity as a nation : Austria's quarrel was Germany's 
 long-delayed opportunity for securing by force what she was otherwise 
 in danger of losing. These conclusions appear to me to be incontro- 
 vertible. International relationships, despite the diplomatic tissue 
 in which they are obscured, all tend in the same direction namely, 
 towards preserving and extending the nation's position in the economic 
 struggle for existence. As with individuals so with nations, the 
 strongest will survive though Germany has yet to learn that the 
 most unscrupulous are not necessarily the strongest. 
 
 I therefore agree with Mr. Zimmern when he says that Capitalism 
 did not cause the war : whether it was the Kaiser or Rothschild who 
 pulled the trigger seems to me immaterial : the explanation as to why 
 the trigger was pulled and Europe plunged into the war is to be found 
 as he suggests, in the philosophy of self-interest that is to say, national 
 self-interest. The fact that these conditions prevail under a capitalistic 
 system of society does not prove that the capitalistic system is itself 
 responsible for war. So long as the nations are separately governed, 
 and maintain an absolute political and economic independence one 
 from another, so long will war be possible, no matter how high may be 
 their state of social and political development. Behind all outward 
 expressions of force, whether it take the form of an ultimatum or a 
 tariff behind the hand of a peaceable but insistent diplomacy 
 is the international struggle to live under the best possible conditions. 
 With present relationships, force is the only court of appeal for a 
 disappointed nation. Nation allies with nation when geographical 
 or commercial interests synchronise. Groups of nations are formed 
 with interests in common. And thus, in place of a single combatant 
 on each side, we have a world divided into two armed camps. For 
 which unhappy condition of affairs a League of Nations is the only 
 effective remedy. I may now be permitted to summarise my answers 
 to Mr. Zimmern's four leading questions, by which it will be seen that 
 there is little real difference between us : 
 
 Economic causes are at the root of the present war. 
 
 There is no direct connection between the existing economic system 
 if by that he means the capitalistic system and the international 
 antagonisms out of which the war has sprung. 
 
80 
 
 It is not a war waged by bourgeois governments, in which the working 
 class has no concern, but a war of nations, in which all classes are 
 involved. 
 
 That is the position as I understand it : and Mr. Zimmern will agree 
 that there is no fundamental difference between his analysis and my 
 own. In regard to the solution of the problem he has set us, I find 
 him more suggestive than determinative, and therefore not so easy 
 to follow, while his impartiality leaves a frontal attack quite out of 
 the question, supposing I were inclined to be pugnacious. 
 
 For instance, I fail to trace the connection between national indus- 
 trial adjustments and international relationships. I do not agree with 
 his view that the war has effectually disposed of the idea of State 
 ownership in place of private enterprise. At the same time, I do not 
 think this question should enter into the present discussion of capitalism 
 and international relationships. The same remark applies to his 
 intermediate region industrial self-government. These are matters 
 of national concern ; whereas war, as I have endeavoured to show, is 
 independent of all questions of purely domestic administration. As 
 Mr. Zimmern rightly points out in a later paragraph, the economic 
 task which the settlement will impose will be the securing of supplies 
 upon which the recuperation of the peoples depends. That, however, 
 is a temporary difficulty only. The more important question is the 
 setting-up of machinery to solve the permanent problems of inter- 
 national relationships. That machinery can be used for dealing with 
 the situation immediately following the conclusion of peace as well 
 as for the primary object of avoiding future wars. Mr. Zimmern 
 rightly draws attention to the serious character of the question of 
 post-war supplies. Of what use are capital, and labour, and orders 
 to employ both, if the raw materials of industry are denied us ? .Of 
 what avail are all these if food supplies are unprocurable ? Blockades 
 are not necessarily a condition of war. They may be enforced in times 
 of peace also. Certain it is that there will not be sufficient raw material 
 to satisfy the demands of the world's markets for many years after 
 the conclusion of the war, while it is equally certain that food supplies 
 will not be normally distributed until several successive harvests 
 and an increase of shipping have enabled the necessary adjustments 
 to be made. It is for the nations to say whether they will leave these 
 adjustments to be made without any attempt at scientific international 
 control or will set up some form of machinery that will secure justice 
 to the smaller or weaker nations. 
 
 Admitting as we must that international relationships in the future 
 must not be governed by sectional alliances, or be at the caprice of any 
 single nation or ruler, we are forced to a decision on Mr. Zimmern's pro- 
 posals for an International Commission or a League of Nations, whose 
 functions shall include the settlement of the question of post-war supplies 
 as well as the larger problem of international peace. The practical conclu- 
 sion at which Mr. Zimmern arrives is that to avoid a promiscuous scramble 
 aftei the war for food supplies and raw material, the nations must 
 
81 
 
 be rationed. Certainly if something of the kind is not done there are 
 grim tragedies to be enacted in the post-war period, when the weaker 
 or poorer nations, or the least favoured nations, may be almost strangled 
 in the struggle for existence, To meet this problem is our immediate 
 task. An International Commission, on which every nation shall be 
 represented, must be set up, in conjunction with, or independent of, 
 a League of Nations. The question of admitting the Central Powers 
 is one that cannot be left to the future to decide. There must be no 
 outsiders no non-unionists among the nations ! 
 
 There will be two immediate objects before the International Commis- 
 sion : (1) To secure food supplies for necessitous countries ; and (2) To 
 secure raw material and shipping for countries whose industrial position 
 may be seriously j eopardised for lack of them . We shall, I think, have to 
 distinguish between the shortage of food supplies and the shortage of 
 materials. The supply of food to a country threatened with famine is sub- 
 ject to human considerations ; the shortage of materials, though its 
 ultimate results may prove to be the same, is a question of trading. What 
 means, then, is the International Commission to adopt to achieve 
 the two objects in view ? In national business life one insures against 
 risks of all kinds as a matter of course. Is it practicable to apply a 
 similar principle of insurance to international risks of the two kinds 
 mentioned, or to one of the two ? Let me suggest a basis for discussion 
 of this point. The countries comprising the International Commission 
 might contribute on an agreed basis to a common fund, to be used 
 for the assistance of distressed nations in regard to food supply only. 
 Any nation would be entitled to claim assistance, and, on proving its 
 case, would be granted the necessary supplies. To obtain these supplies 
 the Commission would have to be invested with compulsory powers of 
 purchase in any market : that is to say, they would be given priority 
 over all other purchasers, but would pay the market price for whatever 
 is purchased. This condition of compulsory purchase would, of course, 
 be a vital part of the scheme. For it should be borne in mind that the 
 difficulty of some nations will not be a question of ability to pay, but 
 of opportunity to purchase. Hence the necessity of granting the 
 International Commission powers of compulsory purchase, enforced 
 by the respective Governments. Food supplies should, I think, be 
 regarded as a free gift to a nation in actual social distress ; and the 
 supplies should take the form of immediately consumable foodstuffs, 
 to be distributed among its own people by the receiving government. 
 In the case of the raw materials of industry, I suggest that the functions 
 of tlie International Commission should be confined to the issue of 
 compulsory purchase certificates to nations whose claims have been 
 favourably decided by the Commission. As already pointed out, the 
 difficulty will be one of opportunity to obtain rather than of ability 
 to pay ; and by the issue of these priority certificates that difficulty 
 would be overcome. I do not suggest that any attempt to equalise 
 the conditions among the nations will be practicable : the intention 
 is to safeguard a nation from suffering a virtual blockade through 
 
82 
 
 inability to obtain supplies or transport. With raw materials of industry 
 I would bracket shipping and transport. These priority certificates 
 would be used by the accepting government, who would pass on the 
 material so obtained to their own traders at their own terms. 
 
 I will, in conclusion, summarise the proposals under consideration. The 
 Labour Party's recommendation urges systematic arrangements on an 
 international basis for the allocation and conveyance of the available 
 exportable surpluses to the different countries in proportion to their 
 needs. That recommendation includes foodstuffs, raw materials, 
 and shipping. Mr. Zimmern takes us a step farther and proposes 
 that the various governments shall delegate powers to purchase, allocate, 
 and convey supplies on their behalf to an International Commission, 
 which would become a Relief Commission for the world, rationing each 
 country according to its need. My own suggestion carries us a little 
 farther in the settlement of details : First, that the question of the supply 
 of food should be separated from that of the supply of raw material and 
 transport ; and secondly, that the food supplies shall be in the nature 
 of relief, provided at the expense of a common fund, while the division 
 of raw material and shipping shall be arranged by the issue of priority 
 certificates for compulsory purchase in the open market. The weakness 
 of the Labour Party resolution is that it proposes to deal only with 
 " available exportable surpluses," which limits the powers of the 
 International Commission to that definition whatever it may imply 
 and whatever they may decide it means. Mr. Zimmern's plan, by 
 placing the obligation of purchase, allocation, and conveyance upon 
 the Commission, is asking for a big draft upon the trustfulness of the 
 nations in the business capacity of the Commission, and imposes far 
 too onerous a task for any body of men, much more when they are 
 the representatives of various nationalities and interests. The diffi- 
 culties of the Stockholm Conference that was to be, the difficulties 
 ven of the Inter-Allied Labour Conference that was, would seem to 
 prove the impossibility of any scheme of international rationing. 
 The view I take is that the international business of the world shall, 
 as far as possible, be left to itself and the International Commission 
 called in only on the direct representations made either for food, for 
 material, or for transport. Within each country, however, it will be 
 necessary for the Government to retain such control as they have at 
 present in the interests of social justice and in conformity with social 
 needs. Probably no problem in the world's history has put such a 
 tax upon the wit of man for solution as that which faces civilisation 
 at the conclusion of the war. We shall have cause to be thankful that 
 the exhaustion of war will make it necessary for the nations to seek 
 the solution by other means than those of physical force, and by getting 
 together and reasoning together, work out the salvation of humanity 
 in accordance with the Golden Rule. The awakening democracies 
 of the world East and West are determined that there shall be no 
 more war ; and neither Kaisers nor Tzars, nor Kings, nor Governments 
 will be allowed to stand in the way of the realisation of that resolve. 
 
83 
 
 GENERAL DISCUSSION. 
 
 ME. PARKIN (York Equitable Society) said on one or two points 
 he had come to different conclusions from Mr. Zimmern. He would 
 like Mr. Zimmern to deal with a point which he would try to explain. 
 For the last fifty years Great Britain had been spreading out her 
 tentacles all over the globe, and to a great extent had allowed the 
 capitalist somewhat of a free hand. A pamphlet came into his hands 
 some time ago which proved that France and Great Britain had made 
 an alliance with Morocco to the exclusion of Germany, and that other 
 arrangements had been made so that eventually Germany was forced 
 fco see that she was being crowded out of a place in the sun. These 
 were the real factors that had brought about the war which, if true, 
 condemned us as a nation. He would like to ask if the lecturer does 
 not think that instead of capital pulling the strings of our politicians, 
 and forcing on this war, that the democracy of this country should have 
 a voice in affairs, and demand that capitalism should not have a free 
 hand ? He was confident that, had a vote been taken in all the countries 
 who were contemplating war, the democracies would have voted 
 against it. 
 
 MR. STRAKER (Northumberland Miners) : On page 61 Mr. Zimmern 
 quotes from " Socialism and War," in which the writer states that it 
 is not a capitalistic war .... because war is not good business. 
 If that frees capitalism from being the cause of war, I am inclined to 
 think that it will free the worker and everybody else. I don't see 
 that it has been good business for' us, but the fact is that if the 
 capitalists or whoever were the cause of the war had seen the 
 present result of it, they probably would have hesitated. We know 
 perfectly well that the Germans were going to be in Paris in a few 
 months, and that before Christmas we were going to be in Berlin 
 that is the light-hearted way in which all parties entered the war. 
 But on another page (68) he says that capitalism cannot make wars. 
 If governments do not make wars, capitalists could not possibly make 
 them ; and one asks oneself the question : Who are the capitalists 
 and who are the people who constitute the Government ? Government 
 eompetition at the present time is but the competition of individual 
 capitalists expressing itself through the medium of the Government. 
 The capitalist class complained to the Government of what they 
 ealled unfair German competition which must be stopped, and appealed 
 to the Government to do what they could to stop it. The inception 
 may lie even further back. I sometimes think that at the bottom our 
 Christian missionaries are to blame. They send home beautiful 
 reports of the wealth of the countries to which they go, and at once 
 the interest of the capitalist is stirred, and he gets some Commission 
 sent out by the Government to make enquiries. After that, big guns 
 follow to Christianise the people ! Notwithstanding all that, Mr. 
 Zimmern proposes that the Government should take over the whole 
 business. I am a little afraid that the League of Nations will fall to 
 
84 
 
 pieces when the countries composing the League fail to agree. There 
 is nothing to stop war but the growing intelligence of the people and 
 of democracy. 
 
 Mr. THICKETT (Walsall Trades Council) said that the Boer war was 
 a capitalist war, and when this war was over it would be found that 
 it was on the same plane, but there was nevertheless a prospect of a 
 better land for the people when peace came. 
 
 MR. SMITH (Machine Workers) : Mr. Zimmern condemns State control, 
 and it appears to me that the basis of his condemnation is the experience 
 gained as a result of the war. That is hardly fair, as I think we have to 
 admit that private enterprise failed to stand the test of war, with the 
 result that the Government stepped in and proved conclusively that 
 it was in the national interest it should take control. Surely then, if. 
 as a war emergency, it is essential for the State to take control, in the 
 interests of the well-being of the country, that control should be 
 continued. I think the majority of the representatives who have 
 spoken in this conference have agreed that State control is essential, 
 and that Labour wants it. Labour all along the line, especially as 
 regards the future, is fighting with that object in view, and Labour 
 must itself decide what are the easiest and quickest methods by which 
 Nationalisation and State control can be brought about. I believe 
 that by a Protectionist policy (I am no advocate of Tariff Reform) we 
 shall encourage monopolies and trusts, and when this has come about, 
 I hold that it will be far easier to pass a scheme for State control and 
 Nationalisation than it will be by a Free Trade policy. With 
 nationalisation in all countries as a condition of peace, problems 
 connected with commercial policy and controversies as to peace or 
 war would cease to exist. 
 
 MR. MILLINGTON (Birmingham Co-operative) : In reply to the last 
 speaker, would it not be better instead of encouraging monopolies, to 
 develop voluntarily the co-operative ideas along the lines on which 
 they are now working ? There is no doubt in the mind of the worker. 
 I think, that the seed of all war is greed and selfishness. This may 
 find expression through Trade which may, in the future as it has 
 done in the past, use the politicians in and out of Parliament. In 
 this way quarrels have been engendered between the nations, and then 
 the workers generally have a lot of high-flown stuff thrown at them 
 about patriotism and all the rest, and we only know the causes that 
 led to the war through what we are told, not by having a free voice in 
 suggesting what or how things should be done. When we think of all 
 the secret diplomacy, through whichever channel it comes the trade 
 organisations or the capitalist press it amounts to the same thing, 
 that quarrels are engendered that we have to pay and suffer for. How 
 can we stop it in the future ? Mr. Zimmern very pointedly said that 
 the first and primary thing we have to see to when we get the League 
 of Nations is to inspire confidence between those who meet on our and 
 
85 
 
 other people's behalf. I am suggesting that if we and our Allies can 
 be self-dependent, cannot we have a League of Nations without the 
 Germans ? I hope we shall. We have seen enough of them in this 
 country. If we can be self-supporting, let us go on our own and leave 
 them to take their own course. We need not be revengeful, but I 
 think we have had enough of them. 
 
 MR. DEWSBURY (Walsall Co-operative) : Mr. Zimmern states that 
 the commercial policy under which we work is at fault, and that it 
 is wise to abolish the system. We have his views on private ownership 
 of capital, and yet when he is questioned as to whether he would 
 nationalise it, he begins to hedge, and says he would in some industries, 
 and not in others. It seems to me rather inconsistent that he should 
 state very emphatically that the present system is wrong, and yet have 
 no definite remedy for putting the matter right. To nationalise Finance 
 will not be sufficient, because capital knows no country ; nor will 
 even the nationalisation of Industry be sufficient. The remedy is 
 to internationalise the whole of labour, commerce, industry, and 
 capital. Mr. Zimmern said that victory depends on industrial power. 
 The industrial workers are the source of our industrial power ; they 
 are going to win the war for us, and will largely have to pay for it. 
 I want to know who they have to pay ? When Mr. Zimmern says that 
 the commercial system is wrong, I should say that the financial system 
 is wrong also. War is the result of selfishness, and the whole present 
 system seems to me to engender selfishness. Wealth ought to be 
 owned internationally. 
 
 MR. RUDLAND (President Birmingham Trades Council) : I believe 
 the Boer War was a capitalist war, and there is very little difference 
 in the present war except in its widespread disastrous results. The 
 Junker class are responsible for the present conflagration they 
 dominate the show and make the working-class pay the piper. At 
 bottom this is a capitalist war, and to a large section of the country 
 the war is profitable. You cannot serve God and Mammon : the 
 one represents the highest form of service without greed, and those 
 who serve the other are simply out to make money they are the 
 soulless capitalists who are the cause of this war. It is no use trying 
 to put it on to the German. For the Central Powers it is an economic 
 war for expansion, as they had no outlet for their shipping. The so- 
 called alliances to preserve the balance of power are underhand 
 businesses. The capitalists of Germany, France, Austria, Italy, and 
 all the other countries are the real enemies we have to fight, for they 
 engender war through the press. 
 
 MR. ARGYLE (Club and Institute Union) : The causes of this war 
 are economic. Germany needed expansion, or at any rate she thought 
 she needed it. She was not satisfied with her great progress, and she 
 set to work to get rid forcibly of hindrances to further expansion, 
 and very carefully prepared herself over a long series of years for that 
 
86 
 
 end. I happen to have been closely associated for many years with 
 a man who was a deep thinker, widely respected, and a man of very 
 great experience in international trade. He said to me fully ten years 
 ago that we should have war with Germany sooner or later that it 
 was quite inevitable, because Germany could see no other way of 
 getting what she wanted than by war. I think this has been very 
 fully borne out. It is all nonsense to believe that Germany tried all 
 she could to prevent this war : Germany was determined to have it. 
 She was only waiting for a fitting opportunity, and when that oppor- 
 tunity came she thought she was strong enough to conquer the world, 
 then she went at it. Of course she had to have an excuse, and she had 
 no great difficulty in finding it. It is not true, in my opinion, to think 
 that it was only the richer classes in Germany who were behind the 
 war. I believe the whole German people were permeated with the 
 idea I do not say it was so originally, but that by years and years 
 of teaching they were in that frame of mind that they believed they 
 must come out triumphant after their enormous preparations. The 
 whole course of the war and what has happened has fully borne that 
 out. I do not agree that we either capitalists or workpeople in 
 any way wished for the war or are responsible for it : I think that we 
 tried our best to avoid it, and as it was only when we were absolutely 
 in the position that we could not keep out of it without sacrificing 
 every vestige of honour and sense of decency that we resolved that 
 we must come in to protect the interests of the world against the 
 grasping spirit that was embodied in Germany. I think we ought 
 to clear that up. I do want to take my stand as a Britisher. I do 
 believe that we are in the right in regard to this war, and that we were 
 thoroughly justified in going into it. 
 
 MR. ZIMMERN'S REPLY. 
 
 I agree pretty well with all that Mr. Naylor has said, except on 
 one or two points of detail. He drew a distinction with which I do 
 not agree between the control of foodstuffs and industrial raw material. 
 He said one was a question of humanity, the other merely a question 
 of trade. When people have not got boots or clothes that will keep 
 them warm you have got beyond trade. I think if you were in Belgium 
 or Poland to-day you would feel that the question of clothing people 
 was just as much a matter of humanity as the question of feeding 
 them ; you cannot draw any distinction between these things. If 
 you have an international body to meet the social needs of the 
 populations, that body will have to decide frankly on the grounds 
 of humanity what things shall be imported in order to promote 
 recuperation most quickly. 
 
 Here is another point which indicates the extraordinary difficulty 
 of setting up an international body of this character. You speak of 
 giving it compulsory powers of purchase in all the markets of the 
 
87 
 
 world at fair prices. That sounds very easy, but it is not going to be 
 easy at all. Do you think the people in Argentine who have a great 
 deal of wheat and wool to sell, and who are in the fortunate position 
 of having half the world wanting to buy from them, will put 
 up with very much less than the highest price they can got ? 
 I have seen a statement in the paper that the British Government 
 has had some difficulty in persuading the Boer farmers to sell the 
 South African wool clip to the British Government : they were able 
 to persuade Australia. During the past 50 years the capitalists in 
 manufacturing countries have had a pretty good time ; now, by a 
 curious turn of the wheel, the raw-material producing countries like 
 South Africa, Argentine, and Brazil are in a very favourable position. 
 Everybody is coming and asking for their stuff, and it will not be at 
 all easy to make an arrangement with them. Let me draw attention 
 to another fact : We talk about the British Empire as a unity, but 
 on matters of fiscal policy it is not a unity. For instance, in matters 
 like the South African wool clip ; as we are not Prussians, and do not 
 govern in their way, the purchase has to be arranged by persuasion. 
 I do not wish to say that these difficulties will make the problem of 
 the world's supplies of these articles insoluble, but you see what 
 delicate negotiations are involved, and how much easier it is to settle 
 them here than to carry them out. Japan is getting an enormous 
 chance now : they are very anxious to get a foothold in new markets. 
 If you went, say, to South America, you would find Japanese goods sold 
 in places where you never saw them before e.g., textiles. You are up 
 against a great number of conflicting interests. This may make an inter- 
 national commission very much more difficult than it looks on paper, but 
 because it is difficult, there is no reason for despairing ; it is for us to try 
 to see the thing as the other chap sees it. Someone raised a question 
 of Morocco : I did not want to go into the question of capitalist policy 
 before the war, but I would say that the German desire for a place in 
 the sun was very largely due to the fact that they were afraid that the 
 British policy of the open door would not be followed in the future. 
 It has been followed up to date, and though no one knows what would 
 have happened, as a matter of fact, the German merchants were 
 quite free to come into British markets. I will quote an example a 
 very remarkable fact which I have seen quoted both in a German and an 
 American book*; the proportion of British capital invested in Egypt- 
 which was the quid pro quo for Morocco has not increased since the 
 British occupation of Egypt. It is not true to say that, by occupying 
 Egypt, we have made it the happy hunting ground of our capitalists : 
 other nations had equal rights, and have exercised them. If you ask 
 me whether any Powers in this war were guiltless, with respect to some 
 of the matters raised this afternoon whether they had no blot on their 
 escutcheon at all, I would say they are all to blame in a greater or lesser 
 degree. Mr. Straker made a remark that " government competition 
 
 See Appendix. 
 
88 
 
 is but the competition of individual capitalists expressing themselves 
 through the Government." This is much too harshly stated. 
 A Government has a great many interests : it is not merely a 
 Government of calculating, grasping capitalists ; and Mr Straker 
 really refuted his own argument by mentioning tariffs, for the 
 Government which entered on this war was a Free Trade Government. 
 We are much too apt to use a bludgeon in these matters where 
 the truth is very difficult to arrive at. Similarly with regard 
 to missionaries. They have done a great amount of good in 
 Africa and other places, and have formed a great counteracting 
 influence to the capitalist who sells gin, whiskey, and muskets. In 
 some cases missionaries have been a bad influence, and may involuntarily 
 have led to undesirable governmental exploitation, but we must 
 not be unjust to a body of men who have done an enormous amount of 
 good e.g., Livingstone. Mr. Smith raised a point in connection with 
 the question of State Socialism. I did not in my paper deal directly 
 with Nationalisation ; what I said was that the war had shown that 
 undiluted State ownership and undiluted State control such as has 
 been exerted through the Munitions Department has been the cause 
 of a good deal of resentment. That is why we have cases of agitation. 
 I am not in favour of a relaxation of State control. I do not want 
 to abolish the Factory Acts, but I want a greater measure of autonomy 
 for the workers themselves who know the conditions, but the State must 
 retain its overriding power, because otherwise you might get workers and 
 employers combining to defraud the rest of the community. Mr. 
 Dewsbury says I have hedged about my attitude on the economic 
 system. I have not ; what I want first and foremost is a change of 
 motive such a change you can get if you set up an international 
 body. As Mr. Dewsbury says, if you get National Socialism there 
 will still be competition between one State and another, and for this 
 reason he would internationalise the whole of industry, com mere*', 
 and ' finance. This is a very large order. The inter-Allied 
 Conference showed you how very difficult international organ- 
 isation is. We have to proceed towards further nationalisation 
 and to alter the motive in all industries, and that will have this rather 
 curious result : it will promote direct taxation, because the great 
 argument against direct taxation is that you cannot tax people high 
 because you destroy the incentive which leads them to make money ; 
 if you change the nature of the incentive from profit to service they will 
 not so much mind being taxed. With regard to my attitude on the 
 war, I agree whole-heartedly with everything President Wilson has 
 said since his address to the Senate last January. 
 
89 
 APPENDIX. 
 
 Since the Conference met, Mr. Zimmern has kindly supplied the 
 following extracts from the books mentioned on page 87. -EDITOR. 
 
 " England's share in the trade of Egypt before the occupation was 
 57 per cent. ; in 1891 it was only 54 per cent. ; in 1913 it had fallen 
 to 37 per cent." BEER : The English-speaking Peoples " (New York, 
 1917), p. 304. 
 
 " If one looks at the figures of the trade of Great Britain with her 
 Colonies they by no means bear out the contention that it is simply 
 due to the fact that they are British Possessions and that they were 
 occupied as Colonies in order to promote British trade. Take, for 
 instance, Egypt, which has, since 1883, been under the exclusive 
 control of England. Has England's trade with Egypt increased in 
 the same proportion as it would have done had Egypt remained inde- 
 pendent ? It is of course impossible to give an absolutely certain 
 answer to this question, but the following figures are at least suggestive : 
 
 British Trade with Egypt in Million 's. 
 
 Imports from Egypt. Total Imports. 
 
 1872 16.5 . . 354.7 
 
 1912 25.9 744.9 
 
 Increase .... 9.3=56% 396.2-111% 
 
 Exports to Egypt. Total Exports. 
 
 1872 7.3 . . 314.6 
 
 912 9.6 599.6 
 
 Increase 2.3=31% 285.0=90% 
 
 England's trade with Egypt has thus increased in a lesser proportion 
 than her total trade. We have no reason to assume that had Egypt 
 not been occupied the normal operation of economic factors would 
 have caused it to increase any less."- KAUTSKY : The National State, 
 The Imperialist State, and The Federal State (Nuremberg, 1915), pp.71-72. 
 
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