The Economic Consequences of the Peace | Page 5

not only furnished these countries with trade, but, in the case
of some of them, supplied a great part of the capital needed for their
own development. Of Germany's pre-war foreign investments,
amounting 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 countries not only capital, but, what they needed hardly
less, organization. The whole of Europe east of the Rhine thus fell into
the German industrial orbit, and its economic life was adjusted
accordingly.
But these internal factors would not have been sufficient to enable the
population to support itself without the co-operation of external factors
also and of certain general dispositions common to the whole of Europe.
Many of the circumstances already treated were true of Europe as a
whole, and were not peculiar to the Central Empires. But all of what
follows was common to the whole European system.
III. The Psychology of Society Europe was so organized socially and
economically as to secure the maximum accumulation of capital. While
there was some continuous improvement in the daily conditions of life

of the mass of the population, Society was so framed as to throw a
great part of the increased income into the control of the class least
likely to consume it. The new rich of the 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 all others. Herein lay,
in fact, the main justification of the Capitalist System. If the rich had
spent their new wealth on their own enjoyments, the world would long
ago have found such a régime intolerable. But like bees they saved and
accumulated, not less to the advantage of the whole community
because they themselves held narrower ends in prospect.
The immense accumulations of fixed capital which, to the great benefit
of mankind, were built up during the half century before the war, could
never 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, were, not less than the Pyramids of Egypt, the
work of labor which was not free to consume in immediate enjoyment
the full equivalent of its efforts.
Thus this remarkable system depended for its growth on a double bluff
or deception. On the one hand the laboring classes accepted from
ignorance or powerlessness, or were compelled, persuaded, or cajoled
by custom, convention, authority, and the well-established order of
Society into accepting, a situation in which they could call their own
very little of the cake that they and Nature and the capitalists were
co-operating to produce. And on the other 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 and has neglected the arts of production as well as those of
enjoyment. And so the cake increased; but to what end was not clearly

contemplated. Individuals would be exhorted not so much to abstain as
to defer, and to cultivate the pleasures of security and anticipation.
Saving was for old age or for your children; but this was only in
theory,--the virtue of the cake was that it was never to be consumed,
neither by you nor by your children after you.
In writing thus I do not necessarily disparage the practices of that
generation. In the unconscious recesses of its being Society knew what
it was about. The cake was really very small in proportion to the
appetites of consumption, and no one, if it were shared all round, would
be much the better off by the cutting of it. Society was working not for
the small pleasures of to-day 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.
In that day overwork, overcrowding, and underfeeding would have
come to an