The Economic Consequences of the Peace

before

ized in their own products; but, taken as a whole, it was substantially

ion there were more emigrants on the one hand to till the soil of the new countries, and, on the other, more workmen were available in Europe to prepare the industrial products and capital goods which were to maintain the emigrant populations in their new homes, and to build the railways and ships which were to make accessible to Europe food and raw products from distant sources. Up to about 1900 a unit of labor applied to industry yielded year by year a purchasing power over an increasing quantity of food. It is possible that about the year 1900 this process

y mankind entertained no false hopes. To lay the illusions which grew popular at that age's latter end, Malthus disclosed a Devil. For half a century all ser

upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of th

e have imposed on our enemies, if I elucidate a little further some of the chief un

opul

rendered possible by a far-reaching transformation of the economic structure of the country. From being agricultural and mainly self-supporting, Germany transformed herself into a vast and complicated industrial machine, dependent for its working on the equipoise of many factors outside Germany as we

ak of war, the same tendency was present in a less degree, the annual excess of births over deaths being abou

lation of Germany and Austria-Hungary together not only substantially exceeded that of the United States, but was about equal to that of the whole of North America. In these numbers, situated within a compact terr

and in the year immediately preceding 1914 the excess of births over deaths in Russia as a whole was at the prodigious rate of two millions per annum. This inor

f atheists. Thus the extraordinary occurrences of the past two years in Russia, that vast upheaval of Society, which has overturned what seemed most stable-religion, the basis of property, the ownership of land, as well as forms of government and the hierarchy of classes

rgani

these peoples lived depended partly

Austria-Hungary. The various currencies, which were all maintained on a stable basis in relation to gold and to one another, facilitated the easy flow of capital and of trade to

tion, and foreign trade which made possible an industrial order of life in the dense urban centers of new population. This is too well known to require detailed substantiation with figures. But it may be illustrated by the figures for coal

ermany the prosperity of the rest of the Continent mainly depended. The increasing pace of Germany gave her neighbors an outlet for t

y, and Austria-Hungary; she was the second best customer of Great Britain, Sweden, and Denmark; and the third best customer of France. She was the largest source of supply to Rus

country in the world except India, and we bought more from her t

t do more than a quarter of their total trade with her; and in the case

unting in all to about $6,250,000,000, not far short of $2,500,000,000 was invested in Russia, Austria-Hungary, Bulgaria, Roumania, and Turkey.[4] And by the system of "peaceful penetration" she gave these

nal factors also and of certain general dispositions common to the whole of Europe. Many of the circumstances already treated were tru

sychology

he nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption. In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from

er have come about in a Society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, we

hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of "saving" became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world

y but for the future security and improvement of the race,-in fact for "progress." If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labors.

ccumulation, our self-denials promote not happiness but numbers; and lest the c

e psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bl

on of the Old

e the necessary condition of the greatest of the ext

prudence the annual tribute it was thus entitled to draw. The benefit of cheap and abundant supplies resulting from the new developments which its surplus capital had made possible, was, it is true, enjoyed and not postponed. But the greater part of the money interest accruing on these foreign investments was reinvested and allowed to accumulate, as a reserve (it was then hoped) against the less happy day when th

odstuffs in America, she was able to purchase food at a cheap rate measured in terms of the labor required to produce her own exports, and that, as a result of her previous investments of capital, she was entitled to a substan

their production, and the date was evidently near when there would be an exportable surplus only in years of exceptionally favorable harvest. Indeed, the present domestic requirements of the United States are estimated at more than ninety per cent of the average yield of the five years 1909-1913.[5] At that time, however, the tendency towards stringency was showing itself, not so much in a lac

serting itself and was making it necessary year by year for Europe to offer a greater quantity of other commodities to obtain the s

f instability,-the instability of an excessive population dependent for its livelihood on a complicated and artificial organization, the psychological instability o

nt was sick and dying; its population was greatly in excess of the numbers for which a livelihood was avail

sh life and to heal wounds. These tasks were dictated as much by prudence as by the magnanimity which the wisdo

TNO

migrants from Germany, of whom

1918 by decline of births and excess of deaths as compared

and, but excluding Siberia, C

n terms of dollars have been converted fro

s would only show a substantial surplus over present domestic requirements in about one year out of five. We have been saved for the moment by the great harvests of 1918 and 1919, which have been called forth by Mr. Hoover'