War of the Classes

Great Britain, France, Germany, and Austria-Hungary, according to the calculation taken in 1895 by the International Statistical Institute, hold forty-six billions of capital invested in negotiable securities alone. Yet Paris subscribed for her portion of the Greek loan twenty-three times over! In short, money is cheap. Andrew Carnegie and his brother bourgeois kings give away millions annually, but still the tide wells up. These vast accumulations have made possible “wild-catting,” fraudulent combinations, fake enterprises, Hooleyism; but such stealings, great though they be, have little or no effect in reducing the volume. The time is past when startling inventions, or revolutions in the method of production, can break up the growing congestion; yet this saved capital demands an outlet, somewhere, somehow.

When a great nation has equipped itself to produce far more than it can, under the present division of the product, consume, it seeks other markets for its surplus products. When a second nation finds itself similarly circumstanced, competition for these other markets naturally follows. With the advent of a third, a fourth, a fifth, and of divers other nations, the question of the disposal of surplus products grows serious. And with each of these nations possessing, over and beyond its active capital, great and growing masses of idle capital, and when the very foreign markets for which they are competing are beginning to produce similar wares for themselves, the question passes the serious stage and becomes critical.

Never has the struggle for foreign markets been sharper than at the present. They are the one great outlet for congested accumulations. Predatory capital wanders the world over, seeking where it may establish itself. This urgent need for foreign markets is forcing upon the world-stage an era of great colonial empire. But this does not stand, as in the past, for the subjugation of peoples and countries for the sake of gaining their products, but for the privilege of selling them products. The theory once was, that the colony owed its existence and prosperity to the mother country; but today it is the mother country that owes its existence and prosperity to the colony. And in the future, when that supporting colony becomes wise in the way of producing surplus value and sends its goods back to sell to the mother country, what then? Then the world will have been exploited, and capitalistic production will have attained its maximum development.

Foreign markets and undeveloped countries largely retard that moment. The favored portions of the earth’s surface are already occupied, though the resources of many are yet virgin. That they have not long since been wrested from the hands of the barbarous and decadent peoples who possess them is due, not to the military prowess of such peoples, but to the jealous vigilance of the industrial nations. The powers hold one another back. The Turk lives because the way is not yet clear to an amicable division of him among the powers. And the United States, supreme though she is, opposes the partition of China, and intervenes her huge bulk between the hungry nations and the mongrel Spanish republics. Capital stands in its own way, welling up and welling up against the inevitable moment when it shall burst all bonds and sweep resistlessly across such vast stretches as China and South America. And then there will be no more worlds to exploit, and capitalism will either fall back, crushed under its own weight, or a change of direction will take place which will mark a new era in history.

The Far East affords an illuminating spectacle. While the Western nations are crowding hungrily in, while the Partition of China is commingled with the clamor for the Spheres of Influence and the Open Door, other forces are none the less potently at work. Not only are the young Western peoples pressing the older ones to the wall, but the East itself is beginning to awake. American trade is advancing, and British trade is losing ground, while Japan, China, and India are taking a hand in the game themselves.

In 1893, 100,000 pieces of American drills were imported into China; in 1897, 349,000. In 1893, 252,000 pieces of American sheetings were imported against 71,000 British; but in 1897, 566,000 pieces of American sheetings were imported against only 10,000 British. The cotton goods and yarn trade (which forms 40 per cent of the whole trade with China) shows a remarkable advance on the part of the United States. During the last ten years America has increased her importation of plain goods by 121 per cent in quantity and 59½ per cent in value, while that of England and India combined has decreased 13¾ per cent in quantity and 8 per cent in value. Lord Charles Beresford, from whose “Break-up of China” these figures are taken, states that English yarn has receded and Indian yarn advanced to the front. In 1897, 140,000 piculs of Indian yarn were imported, 18,000 of Japanese, 4500 of Shanghai-manufactured, and 700 of English.

Japan, who but yesterday emerged from the mediæval rule of the Shogunate and seized in one fell swoop the scientific knowledge and culture of the Occident, is already today showing what wisdom she has acquired in the production of surplus value, and is preparing herself that she may tomorrow play the part to Asia that England did to Europe one hundred years ago. That the difference in the world’s affairs wrought by those one hundred years will prevent her succeeding is manifest; but it is equally manifest that they cannot prevent her playing a leading part in the industrial drama which has commenced on the Eastern stage. Her imports into the port of Newchang in 1891 amounted to but 22,000 taels; but in 1897 they had increased to 280,000 taels. In manufactured goods, from matches, watches, and clocks to the rolling stock of railways, she has already given stiff shocks to her competitors in the Asiatic markets; and this while she is virtually yet in the equipment stage of production. Erelong she, too, will be furnishing her share to the growing mass of the world’s capital.

As regards Great Britain, the giant trader who has so long overshadowed Asiatic commerce, Lord Charles Beresford says: “But competition is telling adversely; the energy of the British merchant is being equalled by other nationals.. The competition of the Chinese and the introduction of steam into the country are also combining to produce changed conditions in China.” But far more ominous is the plaintive note he sounds when he says: “New industries must be opened up, and I would especially direct the attention of the Chambers of Commerce (British) to.. the fact that the more the native competes with the British manufacturer in certain classes of trade, the more machinery he will need, and the orders for such machinery will come to this country if our machinery manufacturers are enterprising enough.”

The Orient is beginning to show what an important factor it will become, under Western supervision, in the creation of surplus value. Even before the barriers which restrain Western capital are removed, the East will be in a fair way toward being exploited. An analysis of Lord Beresford’s message to the Chambers of Commerce discloses, first, that the East is beginning to manufacture for itself; and, second, that there is a promise of keen competition in the West for the privilege of selling the required machinery. The inexorable query arises: What is the West to do when it has furnished this machinery? And when not only the East, but all the now undeveloped countries, confront, with surplus products in their hands, the old industrial nations, capitalistic production will have attained its maximum development.

But before that time must intervene a period which bids one pause for breath. A new romance, like unto none in all the past, the economic romance, will be born. For the dazzling prize of world-empire will the nations of the earth go up in harness. Powers will rise and fall, and mighty coalitions shape and dissolve in the swift whirl of events. Vassal nations and subject territories will be bandied back and forth like so many articles of trade. And with the inevitable displacement of economic centres, it is fair to presume that populations will shift to and fro, as they once did from the South to the North of England on the rise of the factory towns, or from the Old World to the New. Colossal enterprises will be projected and carried through, and combinations of capital and federations of labor be effected on a cyclopean scale. Concentration and organization will be perfected in ways hitherto undreamed. The nation which would keep its head above the tide must accurately adjust supply to demand, and eliminate waste to the last least particle. Standards of living will most likely descend for millions of people. With the increase of capital, the competition for safe investments, and the consequent fall of the interest rate, the principal which today earns a comfortable income would not then support a bare existence. Saving toward old age would cease among the working classes. And as the merchant cities of Italy crashed when trade slipped from their hands on the discovery of the new route to the Indies by way of the Cape of Good Hope, so will there come times of trembling for such nations as have failed to grasp the prize of world-empire. In that given direction they will have attained their maximum development, before the whole world, in the same direction, has attained its. There will no longer be room for them. But if they can survive the shock of being flung out of the world’s industrial orbit, a change in direction may then be easily effected. That the decadent and barbarous peoples will be crushed is a fair presumption; likewise that the stronger breeds will survive, entering upon the transition stage to which all the world must ultimately come.

This change of direction must be either toward industrial oligarchies or socialism. Either the functions of private corporations will increase till they absorb the central government, or the functions of government will increase till it absorbs the corporations. Much may be said on the chance of the oligarchy. Should an old manufacturing nation lose its foreign trade, it is safe to predict that a strong effort would be made to build a socialistic government, but it does not follow that this effort would be successful. With the moneyed class controlling the State and its revenues and all the means of subsistence, and guarding its own interests with jealous care, it is not at all impossible that a strong curb could be put upon the masses till the crisis were past. It has been done before. There is no reason why it should not be done again. At the close of the last century, such a movement was crushed by its own folly and immaturity. In 1871 the soldiers of the economic rulers stamped out, root and branch, a whole generation of militant socialists.

Once the crisis were past, the ruling class, still holding the curb in order to make itself more secure, would proceed to readjust things and to balance consumption with production. Having a monopoly of the safe investments, the great masses of unremunerative capital would be directed, not to the production of more surplus value, but to the making of permanent improvements, which would give employment to the people, and make them content with the new order of things. Highways, parks, public buildings, monuments, could be builded; nor would it be out of place to give better factories and homes to the workers. Such in itself would be socialistic, save that it would be done by the oligarchs, a class apart. With the interest rate down to zero, and no field for the investment of sporadic capital, savings among the people would utterly cease, and old-age pensions be granted as a matter of course. It is also a logical necessity of such a system that, when the population began to press against the means of subsistence, (expansion being impossible), the birth rate of the lower classes would be lessened. Whether by their own initiative, or by the interference of the rulers, it would have to be done, and it would be done. In other words, the oligarchy would mean the capitalization of labor and the enslavement of the whole population. But it would be a fairer, juster form of slavery than any the world has yet seen. The per capita wage and consumption would be increased, and, with a stringent control of the birth rate, there is no reason why such a country should not be so ruled through many generations.

On the other hand, as the capitalistic exploitation of the planet approaches its maximum, and countries are crowded out of the field of foreign exchanges, there is a large likelihood that their change in direction will be toward socialism. Were the theory of collective ownership and operation then to arise for the first time, such a movement would stand small chance of success. But such is not the case. The doctrine of socialism has flourished and grown throughout the nineteenth century; its tenets have been preached wherever the interests of labor and capital have clashed; and it has received exemplification time and again by the State’s assumption of functions which had always belonged solely to the individual.

When capitalistic production has attained its maximum development, it must confront a dividing of the ways; and the strength of capital on the one hand, and the education and wisdom of the workers on the other, will determine which path society is to travel. It is possible, considering the inertia of the masses, that the whole world might in time come to be dominated by a group of industrial oligarchies, or by one great oligarchy, but it is not probable. That sporadic oligarchies may flourish for definite periods of time is highly possible; that they may continue to do so is as highly improbable. The procession of the ages has marked not only the rise of man, but the rise of the common man. From the chattel slave, or the serf chained to the soil, to the highest seats in modern society, he has risen, rung by rung, amid the crumbling of the divine right of kings and the crash of falling sceptres. That he has done this, only in the end to pass into the perpetual slavery of the industrial oligarch, is something at which his whole past cries in protest. The common man is worthy of a better future, or else he is not worthy of his past.

Note. – The above article was written as long ago as 1898. The only alteration has been the bringing up to 1900 of a few of its statistics. As a commercial venture of an author, it has an interesting history. It was promptly accepted by one of the leading magazines and paid for. The editor confessed that it was “one of those articles one could not possibly let go of after it was once in his possession.” Publication was voluntarily promised to be immediate. Then the editor became afraid of its too radical nature, forfeited the sum paid for it, and did not publish it. Nor, offered far and wide, could any other editor of bourgeois periodicals be found who was rash enough to publish it. Thus, for the first time, after seven years, it appears in print.