INTRODUCTION TO THE 1938 EDITION

SO momentous have been the occurrences in world history during the past thirty years, so numerous the changes in national policies and sentiments that it may seem an act of impertinence to republish a book dealing with these issues as they presented themselves at the opening of the century. Nevertheless it may be worth while showing that the chief perils and disturbances associated with the aggressive nationalism of to-day, though visibly inflamed and accelerated by the Great War and the Bad Peace, were all latent and discernible in the world of a generation ago, and find their economic, political and moral roots in the foreign policy of the governments of the advanced industrial nations. Recent events have, indeed, done much to clarify the respective parts played in modern Imperialism by the interactions and conjunctions of the different theories, interests and emotions that inspire aggressive national activities.

Before proceeding to make good this statement it may be convenient here to rehearse in bare terms the main argument of this book, and then to discuss such changes and modifications of the earlier argument as the current of recent history appears to demand.

That argument was to the effect that whereas various real and powerful motives of pride, prestige and pugnacity, together with the more altruistic professions of a civilising mission, figured as causes of imperial expansion, the dominant directive motive was the demand for markets and for profitable investment by the exporting and financial classes within each imperialist regime. The urgency of this economic demand was attributed to the growing tendency of industrial productivity, under the new capitalist technique of machinery and power, to exceed the effective demand of the national markets, the rate of production to outrun the rate of home consumption. This was not, of course, the whole story. The rising productivity of industry required larger imports of some forms of raw materials, more imported foods for larger urban populations, and a great variety of imported consumption goods for a rising standard of living. These imports could only be purchased by a corresponding expansion of exports, or else by the incomes derived from foreign investments which implied earlier exports of capital goods.

But with these qualifications in mind, it is nevertheless true that the most potent drive towards enlarged export trade was the excess of capitalist production over the demands of the home market. Now, since it is manifest that everything that is produced belongs to someone connected with its production, who can either consume it or exchange it for some other consumable goods, it seems at first sight unreasonable to expect that an excess of goods requires a foreign market, unless some error has taken place in the apportionment of producing power as between the different industries. But when we find that at frequent intervals there is a general excess of production beyond the current demands of the home and foreign markets, it becomes manifest that the productive power of capital has been excessively fed. This in its turn means that the processes of saving and investment have proceeded too rapidly. In other words, there has been over-saving and under-spending. For while a certain and a growing quantity of saving and production of more and better capital goods belongs to every progressive national economy, there exists at any given time, having regard to the arts of industry, on the one hand, and the arts of consumption, on the other, a right balance or equilibrium between spending and saving. It has been held by the classical school of economists that this equilibrium was necessarily maintained by the free play of natural economic laws, which would check any such tendency to over-save and over-invest as appears actually to take place. But a closer scrutiny of the motives which actuate saving show that they do not conform to the ordinary price-law. A rise or fall in the price of saving, i.e. rate of interest, though serving to distribute saving properly among the several channels of investment, does not operate to any appreciable extent to increase or diminish the total volume of saving. There is a check upon saving, but it comes too late, after a wasteful trade depression has occurred. For most saving comes from profits, dividends, rents of the owning well-to-do classes. When a trade depression is in actual course, these sources of saving are greatly diminished and though for a time some actual over-saving lies idle in banks waiting an opportunity for favourable investment, the period of bad trade is soon attended by a fall in the rate of saving below the level which a normal trade condition would justify.

Now this argument signifies that the constant impulse to push for overseas markets in normal times and the periodic slumps of national trade in the home markets, are due to a chronic tendency to try to save a larger proportion of the national income than can find a useful expression in new capital. This is not due to the folly of individual savers, but to a distribution of the general income which puts too small a share in the hands of the working-classes, too large a share in the hands of the employing and owning classes. For it is to the latter that over-saving is attributable.

Now we are not here concerned with the important problems of equity and humanity involved in a maldistribution of income which places the vast bulk of purchasing power beyond the requirements of a bare living in the possession of a small proportion of the population in Great Britain, the United States and other advanced industrial countries. Our concern here is with the urgent drive this situation impels towards the acquisition of foreign markets and areas of lucrative overseas investment. Here we are confronted with the question to what extent this need for increased foreign markets and investment is a true cause of Imperialism. Now it may be admitted at the outset of any discussion of this question that other motives than trade-profits consciously occupy the mind of the statesmen who pursue an imperial policy, and that the term Empire does not connote commercial gain to the mind of the rank and file of imperialists. Power, pride, prestige are prevailing sentiments in an imperialist policy. Territorial expansion, the control over backward peoples, the mission of civilisation, the safe-guarding of existing colonial possessions, are not indeed dissociated from the belief that “trade follows the flag” and that by helping to establish order and develop the resources of the peoples and countries which come under our rule, we shall increase our trade and enlarge our national income. Indeed, the history of our empire, acquired, as Sir John Seeley once stated, “in a fit of absence of mind,” attests clearly enough the confused sentiments and the opportunism which underlie the process of acquisition. But, when we study the particulars of the process, we recognise that “mind” in the sense of conscious motive was not entirely absent, and that trade played an important part in most of the early acquisitions. For though it is true that we do not need to own a country in order to trade with its people, the establishment of permanent trading arrangements with primitive or backward peoples generally involves some territorial holding which is likely to expand with the expanding importance of that trade. The rise and growth of our great Empire in India furnish the crucial example. The East India Company, a purely trading concern in origin and motive, actually carried out the great imperial process of expansion until the middle of the nineteenth century, and in the early days of territorial acquisition the South Sea Company and other private groups of trade adventurers were authorised by the State to conduct their distinctively commercial missions. If several advanced countries engage upon the same process, as in India, collisions of interest, partly political, partly commercial, are likely to arise in which the competing groups enlist native forces in their cause, and conduct a conflict which leads to the supremacy of that commercial group which can rally to its profitable cause the largest governmental and native support. It is a confused procedure widely differing in the older and populous civilisations of Asia and the more primitive and thinly peopled areas of Africa and North America. But, in nearly all cases where white peoples have brought under their sway lands peopled by coloured races, the earliest contacts have been of a commercial nature, and though considerations of political acquisition, colonial settlement and missionary services have been conscious supports, economic motives of trade and the exploitation of natural resources have been the dominant urges. Nor has this aggressive Imperialism been confined to the acquisition of backward countries. When this book was written the conquest of the Boer Republics and the incorporation of those territories in our South African Dominion furnished the latest and most striking example of the imperialist process. Here the directly economic factor was paramount over all the political and humanitarian considerations invoked to justify the forceful seizure. The mine-owners of the Transvaal had a definite interest in transferring the country from Boer to British rule, and the press and other political propaganda which secured this end were owned or controlled by these financial and industrial groups.

It will be said by those who controvert this economic causation of Imperialism that the Boer War was an exceptional case, and that the causation of the Great War lay outside the economic purview. It was power politics, not profit politics. But I am not here arguing the case for an exclusively or even a mainly economic causation of modern Wars. It is not yet clear how far and in what sense the enlargement of national territory or external control underlay the policy of Germany, Russia, or France, in loosing the forces of war. Still less is it reasonable to suppose that calculations of economic gains resulting from territorial changes governed the minds of the statesmen who were responsible for their country entering the war. But in the Peace arrangements the insane mentality of Versailles carried various illusions of an economic character. That annexation was profitable to the annexing country, that the extortion of huge reparation payments was possible and advantageous to the recipients, that national economic self-sufficiency, aided by tariffs and embargoes, was not only strategically but economically gainful—these and other related fallacies flowed from the heated atmosphere of a poisoned nationalism. Nor can it be held that the experience of the post-war period has altogether exploded these fallacies, and that we now know that territorial expansion does not increase the trade gains and the average wealth of the people of the imperialist power.

If we turn to the three Powers which by their professed policies are the chief disturbers of world-peace at the present time, Italy, Germany and Japan, we perceive that each of them pleads economic necessities of territorial expansion as a justification for its actual or intended imperial aggression. In each case there is a growth of population needing more land for its employment and maintenance. In order to be economically effective that increase of land must be under the national flag. For though in the pre-war era freedom of emigration into the United States, Canada and other foreign countries prevailed, such outlets are now closed. It is held to be not only politically humiliating but economically unsafe that a nation should be dependent for its foods and raw materials upon the arbitrary changeful policies of foreign countries. For though it is evident that these foreign countries are not merely willing but eager to sell abroad their abounding supplies of these necessaries of life and industry, the countries needing them can only obtain supplies by selling abroad the surpluses of their own products, and these are now kept out or closely rationed by most foreign governments. Why? Because under the urge of nationalist sentiment, supported by appeals to selfsufficiency for purposes of defence, most nations conserve their own markets for their own producers, or for producers in their colonies or allied countries. For in almost all branches of production, agricultural, mining, manufacturing, the technical advances have been so great that each country is afraid of being flooded by foreign goods in its own markets and of being excluded from foreign markets for the sale of its own export goods. It is idle to urge that such fears and the policies of restriction and aggression which they stimulate are unreasonable, and that the removal of all barriers to international trade and migration would at once assuage hostilities and restore prosperity. Those who hold this view either assume and assert that the political sentiments of nationalism are the real sources of the economic policy they hold to be irrational, or else that certain monetary disturbances are responsible for the unemployment, closing of markets and other interferences with the natural forces of free exchange. In fact we are confronted with three sorts of foolishness, the political illusions of which Sir Norman Angell gives such an able exposition, the financial fears and mistrusts which prevent sane monetary arrangements for internal and external marketing, and the tragic absurdity summarised as “poverty in plenty,” the refusal to make full use of existing or attainable productive resources. It is the contest for priority in these three fields of causation that here concerns us. For each of them evidently figures in the process of imperialism. It may well be admitted that each disturbing factor has its own illusions and its own sentimental urges. The distinctively political passion for greatness of territory acquired by a strong right hand is a manifestly potent driving force in all imperialisms, though it is not always openly avowed. To extend the area of national ownership by seizure of neighbouring land or of distant colonies has a sentimental appeal which cannot be dispelled by citing the human or financial costs and risks of such virile procedure. The sort of patriotism that can be evoked in Italy, Germany or Japan for such aggression does not really proceed from the economic necessities cited in its defence. It is rooted in some ineradicable pugnacity and predacity of the animal man, intensified by herd appeals that repress any doubts or qualms of reason and humanity. But, though this patriotism has its own basic instinctive origins, it is fed and directed in its activities by economic motives. Are these economic motives equally irrational and based on miscalculations of business interests?

My contention is that the system prevailing in all developed countries for the production and distribution of wealth has reached a stage in which its productive powers are held in leash by its inequalities of distribution; the excessive share that goes to profits, rents and other surpluses impelling a chronic endeavour to oversave in the sense of trying to provide an increased productive power without a corresponding outlet in the purchase of consumable goods. This drive towards oversaving is gradually checked by the inability of such saving to find any profitable use in the provision of more plant and other capital. But it also seeks to utilise political power for outlets in external markets, and as foreign independent markets are closed or restricted, the drive to the acquisition of colonies, protectorates and other areas of imperial development becomes a more urgent and conscious national policy. If this reasoning is correct, capitalism to maintain its profitable character, by utilising its new productive powers as fully as possible, is impelled to seek the help of the State in the various ways that are now so much in evidence, tariffs, embargoes, subsidies, and the acquisition or retention of colonies where the home capitalist can have advantages both for his import and export trade, with such securities in monetary matters as can be provided by imperial control.

In such a policy the trades directly or indirectly connected with the production of armaments have a twofold function. On the one hand, they batten upon the public expenditure needed to sustain a spirited foreign policy. On the other hand, they evoke a corresponding “defensive” policy in other countries to which they contribute by profitable supplies of arms and ammunition—thus producing a growing competition in costs of “defence.” It is sheer effrontery for well-informed officials and directors of armament firms to deny that pressure is exerted by these firms in political quarters for the enlargement of their profitable operations, and that the employment by these firms of retired army and navy officials has not a definitely business motive.

But though it is incontestible that the armaments trades are naturally disposed to an international competition in the instruments of war which is itself provocative of war, it is often contended that actual war is detrimental to their interests, as it is to Capitalism in general. Sir Norman Angell states this wider issue in the following terms:—

“That Capitalism as an economic system neither needs nor benefits by war; that it cannot use successful war in the modern world as a means of disposing of the surplus of its production, acquiring new markets, increasing its profits; that, on the contrary—as the position of the victorious capitalist states after a completely victorious war abundantly demonstrated—Capitalism has suffered disastrously and been incalculably weakened by war, and that another like the last will, as enlightened Capitalists are aware, probably destroy it altogether.”¹

Now, though war, with its revolutionary aftermath, may well seem dangerous to the capitalist system, it is open to argument whether such risks may not appear worth running in view of the alternative piling up of unsaleable surpluses which the extension and improved methods of modern capitalism involve. For though war is the most wasteful and foolish way of disposing of the actual and potential surpluses which maldistribution of income involves, it does for the time being rectify the balance between productivity and consumption and give prosperity alike to capital and labour in the uninvaded and the neutral countries. During the Great War and for a few years after when the let-down-part of Capitalism was in course of restoration, both workers and capitalists were profitably employed in most of the affected countries. There has been, of course, a terrible aftermath with an unprecedented amount of unemployment and misery. But up to the disastrous slump of 1929–30 there is no ground for holding that capitalism in this country, America, and even in France, Germany and Italy, was not earning good profits in most industries. The dislocation and shrinkage of foreign markets, due to the redistribution of territories under the Peace Treaties, the new economic barriers and the monetary disturbances, did grave damage to certain industries and markets, and involved attempts at national self-sufficiency very wasteful from the standpoint of “division of labour.” But in spite of these obstacles post-war capitalism did not “suffer disastrously” until the rapid growth of its new productivity, with a rise of profits faster than the rise of wages, brought once again the fatal disequilibrium between production and consumption now seen to be the world’s economic peril.

But in arguing the case for maldistribution as the main cause of Imperialism and of the wars which accompany that policy, it is not necessary to contend that capitalism as “an economic system” benefits by war, but only that certain sections of capitalism with political influence at their disposal favour pushful foreign policies that involve the risk of war. This applies not merely to the armaments industries but to most other industries dependent largely upon export and import trades. While it remains true that we do not need to own a country in order to trade with it, the flag still carries certain trading advantages. And those advantages have grown with our new imperial policy of protection and preference, a policy directly due to our recognition of the insufficiency of markets. So long as our wide-flung Empire presented free markets to the traders of foreign nations, the advantages enjoyed by members of the imperial power, by way of contracts for developmental work and official emoluments, were not causes of strong discontent. But the new restrictive preferential policy applied to a picked quarter of the globe by Great Britain and her Dominions has a natural reaction upon other countries which have entered on a capitalist career. It stimulates them to seek territorial expansion for themselves with a view to exclusive markets and areas for planting their surplus labour and capital, while feeding a dangerous resentment against the satisfied or glutted countries which have pre-empted the most desirable territories. The peril which confronts the world to-day arises manifestly from the new passion for imperial growth on the part of the great unsatisfied Powers and the conscious avowal of their aggressive intentions. This peril has been increased by the annexation of the German colonies under the Peace Treaty. For though the tangible value of these colonies to Germany either in terms of trade or as an outlet for her surplus population was extremely small, their seizure and transfer to the various Allies under the title of Mandatory territories has been a natural source of grievance to Germany. The air of hypocrisy which attended this power of transfer, the secret haggling of the Allies, solemnly endorsed later on by these same Allies acting as Council of the League, did not help to make this seizure more palatable.

It may be true that the capitalist system in Italy, as a whole and in the long run, stands to lose rather than to gain by its costly seizure of Ethiopia. It may be true that Japan would have been economically wiser to have pursued a policy of peaceful penetration in Manchuria and North China instead of the expensive military operations upon which she has embarked. But it is wrong to exclude capitalist and business motives from the play of such imperialism and to impute it to the arrogance of political magalomania. Certain important organised business interests in Italy and in Japan have stood to gain out of the expenses of this imperialism. Political realism must reckon with this fact. While therefore Sir Norman Angell may be right in holding that capitalism as a whole system and in the long run is weakened and imperilled by such operations, it must be borne in mind that capitalism does not work as a single profitable system, and that capitalists often prefer a short to a long run in the pursuit of profit.

But there remains a wider issue for our consideration. Suppose it to be the case that the education of the workers in most capitalist countries has been bringing into the forefront of their consciousness the injustices, the wastes, the cruelties of the current economic system in its effects on the production and distribution of wealth. Suppose some demand for a new economic system that shall displace the imperfectly competitive capitalism, and shall organise the available human and material resources of production on a conscious basis of the satisfaction of human needs—suppose that such a demand is visibly seeking expression through the democratic machinery of popular self-government, is it not reasonable to expect that strong capitalist interests would seek methods of repressing these thoughts and designs of the workers?

For though capitalism might hope to maintain some of its supremacy by such concessions to labour and such extensions of social services as would buy off the organised resentment of the workers, the results of such a concession policy might be inadequate to meet the actual economic pressure. For the larger working class and public consumption involved in this policy might be conducive to an increased efficiency of labour and advance of productive technique great enough to keep capitalism upon a basis so profitable that the disequilibrium between production and consumption continues as a disturbing influence in industry. This issue of the sufficiency of this concession policy is, indeed, being worked out in Britain to-day, and the United States is making some attempt at its application in America. Its success would seem to imply a formal retention of capitalism as the directive power of industry, working in closely organized relations with the employees in the several industries and the consumer as the co-ordinative factor in the relations of the several industries. Some such alteration in the form and functions of capitalism is also apparent in the Italian and the German schemes for a Corporative State. But in all these cases of public planning two difficulties have to be confronted. First, the question how far large personal gains are a necessary stimulus to the creative work of men responsible for rapid and advantageous improvements in technique and organization. Routine workers necessarily tend to overlook the enormous productive importance of such creative activities, or to think that they can always be secured by departments of technical research attached to each industry. It may, therefore, be desirable to leave outside any scheme of public planning those newer industries where rapid improvements of technique may be expected and those industries most susceptible to changes in the demand for the goods they supply.

But important as this question may be of securing the best inventive and administrative services by adequate incentives of gain, there remains another question of still greater importance, viz. the utilization or the displacement of that financial control over big industry which is the latest fruit of capitalist evolution. The closest study of this financial control has been made by the American economist Thorstein Veblen who examines the relations which exist in the United States between the manipulations of credit and prices and the industrial management. Whereas the latter aims at the highest technical and working efficiency in producing the maximum output, the former pay exclusive regard to the regulation and limitation of that output so as to maintain a price level which shall yield the largest aggregate profit. In many standard industries for the production of the necessaries and conventional comforts of life, it may pay the financiers and investors to market a limited quantity of goods at a higher price. Hence the tendency of the bankers and other organizers of finance to promote cartels, trusts and other amalgamations which shall enable them to control the aggregate output, closing down superfluous plant and reducing the volume of employment. Though America with her highly organized money-power and her protective system has taken the lead in this financial dominion, other capitalist countries, Germany and Britain in particular, have made considerable advances in the same direction. In Germany the banks have for a long time past devoted themselves to these profitable restrictions of industry, and more recently the textile, metal, mining, milling and other standard industries in Great Britain have been seeking similar organization for the profitable regulation of output.

This analysis of the various attempts to escape from the perils of excessive productivity shows that they fall under three heads. One consists in the policy of organized labour and the State, aiming to secure a more equal and equitable distribution of the money and real income of the community, by higher wages, shorter hours and other betterment of working and living conditions. The second consists in the business policy of restricted output just described, involving a close financial control of the major businesses in specified national or international industries, accompanied by a regulation of their markets and, when deemed desirable, by quotas and tariffs. The third method, and that most relevant to our present subject of Imperialism, is the combined or separate action of capital to obtain the help, financial, diplomatic, military, of the national government so as to secure preferential access to foreign markets and foreign areas of development by colonies, protectorates, spheres of preferential trade and other methods of a pushful economic foreign policy. It may be true that the people of the imperialist state are in the long, or even the short, run losers by a policy so costly in money and in lives. But if, as is normally the case, the larger part of this expense falls upon the public as a whole, it may still be advantageous to those capitalist interests engaged in foreign trade and investments to promote a policy that is to their profit. Even if, as Sir Norman Angell contends, such imperialism involves war-making and with it the perils of a domestic revolution fatal to the capitalist regime, the risks of such an issue may either be unrealised, or may be disregarded in view of the immediate gains which imperialism brings to favoured industries. If, as many close investigators of the business world appear to hold, the capitalism which has prevailed for the past few centuries is in any case destined to disappear, it may seem better for its defenders to endeavour to prolong its life by political pressure for external markets than to succumb without a struggle to the popular demand for state socialism or a policy of social services, the expenses of which shall consume the whole of surplus profits. There still remain large fields for capitalist exploitation. The largest of these, China, appears to be marked down for Japanese exclusive exploitation. But this appearance is deceptive, for the task of Chinese development far exceeds the national resources of Japan. If capitalists in the several Western Powers were capable of intelligent co-operation, instead of wrangling among themselves for separate national areas of exploitation, they would have combined for a joint international enterprise in Asia, a project which might have given the whole of Western capitalism another generation of active profitable survival. Such a scheme of economic Interimperialism may now no longer be possible, for though Japan cannot perform her self-imposed task without financial assistance from the wealthier West, she may be able to obtain this assistance by making the financiers of several Western countries compete with one another for the provision of the required finance, without allowing their governments any real share in the accompanying political control over China.

From the standpoint of the defence of capitalism it is not necessary to show that imperialism is profitable in the long run to the general body of the owning and exploiting class within a capitalist country, but only that it enables the members of that class concerned with foreign trade and investment to utilize the political and financial resources of their State to extend the area of such trade and investment or to retain and develop the colonies, protectorates and other portions of the existing empire.

It is such considerations that bring out the conflict of imperialism with democracy. For a political democracy, in which the interests and will of the whole people wield the powers of the State, will actively oppose the whole process of imperialism. Such a democracy has now learnt the lesson that substantial economic equality in income and ownership of property is essential to its operation. The defence of capitalism is, therefore, bound up in every country with the destruction or enfeeblement of the popular franchise and representative government. If the forms of such democracy are still retained, they are reduced to the automatic or compulsory registration of the will of a dictator or a ruling caste. The cases above cited suffice to show the place which Imperialism occupies as an ingredient in the capitalist-military nationalism of the age. There is, of course, some division of interest and policy between the military rulers who in Japan, as in Germany, conduct the territorial aggressions, and the capitalists who must help to finance them. But the clearer-sighted capitalists perceive that dictatorships and their imperial enterprises, expensive as they may be, are preferable to the more revolutionary courses to which democracies are now committed. Imperialism thus figures as an important and imposing feature of neo-capitalism, seeking to avert internal democratic struggles for economic equalitarianism by providing outlets for surplus goods and surplus population together with emotional appeals to the combatant predacity which animates a spirited foreign policy. It may be true that Imperialism in its competitive aspect carries within itself the seeds of its own demise, leading, as it must, to conflicts ever more destructive to life and property. Indeed, its competition for an ever shrinking area of profitable acquisition may so intensify the struggle between the possessing and the non-possessing nations as to destroy the fabric of civilization. Whether the slowly evolving rationality and sociability of man have advanced sufficiently to furnish a strong enough safeguard against this imperial predacity is the question that confronts the world to-day.

· · · · · · · · ·

Though the general trend of Imperialism in its economic and political character has not changed within the past thirty years, the attitude of many countries towards Imperialism has undergone considerable changes, chiefly, though not entirely, as a result of post-war policies. It may be well, briefly, to cite the nature of these changes. The Peace Treaties, by removing from Germany and Turkey large areas of imperial control and placing them as mandated territories under the control of victorious allies, chiefly Britain, her Dominions and France, enlarged considerably the portion of the backward countries which came under the sway of the allies, and roused a lasting resentment in Germany and Turkey, especially against the British Empire.

The feebleness revealed in the League of Nations, designed originally as a growing instrument of political and economic internationalism, has served to aggravate the sense of injury in Germany from the seizure of her colonies, for League control is rightly felt to be a fiction, save in the matter of a trade equality only operative in certain mandates. The passion of German imperialism thus inflamed has been rivalled in intensity by Italian resentment against the insufficiency of her share of the lands disposed of under the Peace Treaties and her sentimental revival of a Roman Empire which should own the Mediterranean and large portions of North Africa. In Asia the centres of disturbance are India and the Far East. The latter is due to the conscious and avowed Imperialism of Japan, seeking her early prey in Manchuria and North China, but only limited in her further control of Asia by her straitened financial national resources and the possible intervention of Britain and America. Imperialism in India is seeking a new basis which shall reconcile a large measure of democratic self-government with two British requirements, a safeguarding of the large investment interests in Indian railways and industrial undertakings and a retention of the foreign policy of India, its internal order and protection against foreign aggression. It is too early to say how this new Constitution is likely to work, but the experiment is an important contribution to a limited Imperialism.

The most momentous of post-war events has been the Communist experiment in Russia, in its bearing upon the Imperialism of European countries. Though the Soviet Government harbours no aggressive designs upon lands outside the Russian boundaries, and is more and more occupied in the development of its own economic resources, it has from the beginning sought to promote the growth of Communism in other countries by an active subsidised propaganda. The Marxist doctrines which Lenin imposed upon the Russian revolution demanded an international Communism as an essential, and though Stalin appears to have withdrawn any immediate extra-national policy, the Comintern, an international propagandist body, still operates from Moscow, presumably with the consent and assistance of the Soviet Government. It was the fear of this Communism issuing from Russia, and spreading among the working classes of Germany that frightened the upper owning classes into the substitution of a thinly-disguised, but very real, autocracy for the shallow democracy of the post-war era. Though Russian propaganda played a smaller part in Italy, it was the same fear and the same revolutionary movement that enabled Mussolini to rally the owning classes to his flag and to establish his political domination. In later cases prestige and power-politics combined with the economic interests of certain capitalist groups to stimulate a colonial policy of aggression associated with an internationalism of counter-revolution which calls for active intervention wherever Bolshevism appears to raise its head. Thus the isolated economic nationalism of tariffs, embargoes and other customs is found in active and combined collusion with an external policy of imperialism and of possible interference with the liberty of weaker nations to settle their own political and economic affairs.

The one apparent exception to the general trend of Imperialism is the United States. After the Spanish war had left her in possession of Cuba and other colonies she seemed committed to a genuine though limited Imperialism as distinct from the sort of protectorate over mid and south America conveyed by the Monroe Doctrine. But the lasting shock made to public opinion in America by her temporary entanglement with Europe during the latter years of the Great War brought on a strong wave of political isolation which found expression not merely in a refusal to join the League of Nations but in her withdrawal from active control over her colonies, and, still more important, the placing of her relations with the Monroe States upon a formal basis of equal co-operation. How far this political isolation will be found compatible with the trading and credit relations with the outside world which her rapid industrial development makes inevitable, is one of the great speculative problems of the near future.

¹ Preface to Peace, p. 196.