«Война и демократия»

[Сноска 1: «Нехватка сырья, в особенности хлопка, шерсти, джута и нефти, сильно ограничивает производство во многих отраслях промышленности в Австро-Венгрии. Согласно официальным оценкам, запасы некоторых из наиболее необходимых сырьевых продуктов едва достатожны еще на два месяца. Фабрики закрываются, а число безработных неуклонно растет» (телеграмма Reuters из Венеции, 21 октября 1914 г.).]

[Сноска 2: Например, вероятное количество французских заводов, способных производить сахар в 1914–1915 годах, составит 82 или 83 по сравнению с 206 в течение 1913–1914 годов (Times, 3 ноября 1914 г.).]

[Сноска 3: Письмо в прессу от 12 сентября 1914 г. Мистер Дж. Х. Уайтхаус, член парламента, побывавший в Бельгии, говорит: «Вся жизнь нации была арестована».]

Наиболее удачливыми в своем положении комбатантами в Европе являются Россия и Великобритания. Первая, занимающая половину территории Европы, обладает практически безграничными ресурсами и способна гораздо легче обеспечивать себя всем необходимым, чем любая другая великая держава, участвующая в войне. У этой страны моря по-прежнему открыты. Государственная субсидия на морское страхование поощрила внешнюю торговлю, а восстановление рынка переводов устранило препятствие на пути потока экспорта и импорта. Тем не менее верно, что финансовый мир не может оправиться сразу. «Он похож на человека, нервная система которого потрясена великим шоком. Тоники и стимулы могут спасти его от полного коллапса, но реальное выздоровление — это вопрос месяцев и даже лет». Кроме того, работа, проделанная до сих пор и оказываемые услуги для Германии и Австрии, теперь больше не востребованы; наши союзники на западе Европы остро страдают от непосредственных экономических последствий войны и масштабного уничтожения капитала; наши нейтральные клиенты не отделались легким испугом. Кажется, следовательно, что, несмотря на британское господство на море, производство неизбежно должно существенно сократиться, а следовательно, объем безработицы окажется весьма значительным. С другой стороны, хотя производство во Франции, Бельгии и России может уменьшиться по многим направлениям, те товары, которые они все же производят на экспорт, не найдут рынка сбыта в Германии и Австро-Венгрии, и часть их найдет свой путь в эту страну. Подобные товары будут ценны не только как продовольствие и сырье для промышленности, но и породят приток британских товаров в уплату за них. Более того, производство товаров, необходимых для ведения войны, увеличит объем занятости. Товары всех видов требуются не только для британских армий, но и для союзников в целом. Способ и степень влияния этих факторов на безработицу будут рассмотрены вскоре.

[Сноска 1: Согласно заявлению Адмиралтейства, скорректированному по состоянию на 23 сентября 1914 г., 12 британских судов были потоплены немецкими крейсерами, 8 были подорваны на минах, в то время как несколько рыболовецких судов были уничтожены. Число задержанных и захваченных Германией британских судов составило 86 с общим тоннажем 229 000. С другой стороны, 387 германских судов были задержаны или захвачены, причем общий тоннаж составил 1 140 000. Согласно The Times (9 октября 1914 г.), к настоящему моменту было потеряно 1,6 процента тоннажа, зарегистрированного в Соединенном Королевстве. Цифры для Германии и Австрии составили 18 и 13 процентов соответственно. Комитет, подготовивший Государственную схему военного страхования, оценил, что убытки в течение первых шести месяцев войны могут составить около 10 процентов всех британских пароходов, занятых во внешней торговле.]

[Сноска 2: Round Table, сентябрь 1914 г., стр. 704.]

Now the demand for the goods hitherto supplied by Germany to her foreign customers, though abated, will still continue. As we have seen, she cannot for the present supply them. By whom will she be superseded?[1] The Government of this country early in the war took steps to co-operate with British traders in an attempt to obtain some share of this trade, and the United States also strove to make the fullest use of the opportunity. In this country goods previously imported from Germany will, if still needed, either be bought from the next cheapest importer or produced at home. Commodities which we have in the past produced for German consumption are not now required from us. If they continue to be made, it must be for other countries. In other words, whether the volume of British foreign trade remains the same or not, a proportion of it will be diverted into new channels during the progress of the war. In a less degree, the trade of other states will be deflected from its accustomed channels. Beyond this, special influences will be felt in the case of certain new countries, as for example Canada. "Canada's annual balance of trade is probably about £60,000,000 against her: £30,000,000 being the excess of her trade imports over her trade exports and the remaining £30,000,000 representing her annual payment on money borrowed. She has balanced her account hitherto by borrowing very large sums of money. Now she will be unable to do that any longer. Nor will she at present, at any rate, obtain the immigrants on which she is counting to enable her to pay her interest. She cannot redeem the balance due by the export of gold. The burden would be too great in any case, and moreover she has suspended specie payments. A part of the balance due may be covered by the higher value of her exports, such as wheat. The remainder she can only meet either by increasing her exports or by reducing her imports. The latter she has already begun to do."[2] This new readjustment may be accompanied by great economic loss; in any case the dislocation will be harmful for the time, not only to the new countries, but to the countries with whom they trade. It is clear that foreign trade generally will during the war gradually be readjusted to the new conditions of the times. To what extent the various streams of the world's trade will be directed into new channels it is impossible to say; the readjustment will be partly temporary, and partly permanent.[3] This redistribution of production, if it leads to production under less favourable conditions than before, will tend to raise prices, and thereby probably diminish the power to buy other commodities. If it leads to the substitution of a well organised and well paid industry by an industry of a less skilled kind, there will be in effect a net lowering of wages. The widespread effects of the war on industry and commerce must, therefore, have a profound effect on the whole of the economic world.

[Footnote 1: Towards the end of August, the tin-plate and steel-sheet trade in this country which had suffered badly on the outbreak of war revived, and "several mills were reopened, owing to the obtaining of orders which formerly went to Germany" (Board of Trade Labour Gazette, Sept. 1914, p. 330).]

[Footnote 2: Round Table, Sept. 1914, pp. 708-9.]

[Footnote 3: This, of course, does not mean that Great Britain will "capture" German trade and increase its foreign commerce by the amount of its value.]

2. Unemployment and Short Time.—We are now able to understand how the war has affected the individual workman. As we have seen, the panic caused by the outbreak of war and the collapse of the remittance market meant in many industries the holding up of production and the stoppage of the workman's wages. If it had not been possible to restart the machinery of exchange, starvation would have walked through the land, and the industries dependent on foreign raw material would have closed down altogether. As it was, the inevitable dislocation increased the amount of unemployment.[1] Whereas the trade union percentage[2] of unemployment amongst their members was only 2.8 at the end of July, it had reached 7.1 by the end of August. This figure, however, is considerably below the percentage of unemployed during many periods of trade depression; the average for the whole of 1908 was 7.8 and for 1909, 7.7, whilst during the month of March 1912 it rose to 11.3 as a result of the coal strike.

[Footnote 1: Note that unemployment prior to the war was showing a tendency to increase.]

[Footnote 2: It should be observed that these figures relate only to about a million trade unionists, no non-unionists being included. Further, they ignore short time.]

The volume of unemployment during August varied considerably from trade to trade. In the cotton industry, which, however, appeared to be in for a bad time anyhow, 17.7 per cent of the trade union members were returned as unemployed during August 1914, whilst in coal mining the percentage was 1.3. As compared with the previous month of July, there was a general decline in all industries except shipbuilding, which benefited by increased activity on Government work. The contraction in the volume of employment was specially marked in the case of tin-plate works and in the textile, furnishing and woodworking, and pottery trades. Again, in the trades where the Government scheme of compulsory unemployment insurance applies, the volume of unemployment at the end of July was 3.6 per cent, but at the end of August it had reached 6.2 per cent or double the volume recorded in August 1913.[1] Beyond this, there was during the month of August, an enormous amount of short time; in several industries for which particulars are available, thousands of workpeople were working half-time or less.[2] The rise which took place in the price of certain food-stuffs especially during the first part of August intensified the evil by reducing "real" wages.

[Footnote 1: The gradual increase during the month may be observed from the weekly returns:—Aug. 7, 4.0 per cent; Aug. 14, 5.1 per cent; Aug. 21, 5.8 per cent; Aug. 28, 6.2 per cent.]

[Footnote 2: The Board of Trade receives monthly reports from employers and others in different industries. These returns, though they do not cover the whole of the industries, are sufficiently reliable to indicate the widespread character of short time. During August 1914, in slate quarries and china clay works, "there was a good deal of short time and some unemployment in consequence of the war"; in tin-plate and sheet-steel works, "short time was very general. In some cases discharges were obviated by the sharing of work at the mills remaining open. The decrease in employment is to be attributed to the effects of the war, and in particular to the general restriction of the European market"; some branches of the engineering trade, particularly agricultural and textile machinery, and the motor car and cycle trades, were "disorganised by the war; many discharges took place and a large amount of short time was worked." In the miscellaneous metal trades, except in the manufacture of articles required for military and naval purposes, "much short time was reported." In the cotton industry, "the trade as a whole was working less than three days a week, and large numbers of workpeople were entirely unemployed." In the woollen trade, "about 60 per cent of the workpeople covered by the returns received were on short time, including over 20 per cent who were working half-time or less." The returns showed a decrease of "21.5 per cent in the amount of wages paid compared with a month ago." In the worsted industry, "about 65 per cent of the workpeople covered by the returns were working short time during the month, including over 30 per cent who were working only half time or less." The returns showed a decrease "of 26.5 per cent in the amount of wages paid compared with a month ago." In the linen trade "short time was reported generally." In the hosiery industry, "short time was reported by firms employing over 40 per cent of the operatives covered by the returns." In the silk trade "a great deal of short time was worked in all the districts." In the levers and curtains branches of the lace industry "the majority of the operatives … were only working half time, and large numbers were altogether unemployed." In the carpet trade "short time was general, most districts working only half the usual hours." In the furnishing trades "short time was worked in almost every district." "Short time was very generally reported" in printing. In the glass trades "short time was reported in several districts." In the potteries "most of the firms" were running short time (see the Board of Trade Labour Gazette, Sept. 1914).]

During the month of September, however, employment revived.[1] Besides Government work in shipbuilding yards, certain branches of the woollen industry were working at full pressure on the production of blankets and cloth for uniforms; the leather and boot and shoe industries on some sides received an impetus from the large orders placed for army boots; hosiery and knitted goods were required in large quantities. Speaking generally, industries whose products were required for the army and navy were strained to the extent of their resources. But each industry supplies a large variety of goods of many different grades, and machinery and works equipment cannot always be easily converted to the production of other classes of commodities; so that even in the woollen and boot trades, for example, the whole industries were not uniformly busy. The many industries, however, to which the war brought no orders, enjoyed but a slight recovery, and in some cases none at all. As the month of September proceeded, the newspapers triumphantly referred to the fall in the percentage of unemployment. The truth is that the decline was by no means general or uniform, but was brought about, not so much by the gradual revival of normal activity, but by the rush of Government orders. For instance, the cotton industry remained in the trough of a deep depression, and the furniture and piano making trades profited little. Further, no account was taken of the prevalence of short time, though over a large field it was widespread especially amongst women. What the real position of the labour market was after we had been at war two months, cannot be precisely determined, but it was certainly more serious than the Board of Trade percentage would seem to indicate.[2]

[Footnote 1: The percentage of unemployment at the beginning of October in the trades compulsorily insured against unemployment was 5.1, as compared with 6.3 at the beginning of the previous month.]

[Footnote 2: "Certain confidential statistical enquiries on a large scale are said to support the inference to be drawn from the figures published by the Board of Trade, that at least 10 per cent of the fifteen million wage-earners in the United Kingdom are not at work at all, whilst quite as large a proportion are on short time. But out of more than a million men whose services the employers have thus temporarily dispensed with, some nine hundred thousand are being clothed, or are going to be clothed, in khaki, and given Government pay. Thus the actual unemployment among men is, except in (certain) black patches, only sporadic and scarcely more than we are accustomed to. Very different is the situation of the women wage-earners. Of these apparently half a million are now unemployed, and twice as many are working only short time. Though the industrial situation is considerably better than would have been predicted for the end of the second month of a world war, it was, in fact, worse than it has been at any time during the past quarter of a century" (New Statesman, Oct. 3, 1914).]

The month of October saw a further recovery and a more normal state of affairs. The percentage of unemployment in insured trades continued to decline;[1] but whilst the number of men on the Labour Exchange registers fell (from 28,664 on October 2 to 24,690 on October 30), the number of women registered remained almost stationary. At the end of three months from the beginning of the war the condition of men's employment was about normal; but women were suffering from excessive unemployment, whilst short time was still common in many industries in which women are largely employed.

[Footnote 1: The percentages are as follows: Oct. 2, 5.11; Oct. 9, 4.80; Oct. 16, 4.46; Oct. 23, 4.29; Oct. 30, 4.16.]

The large volume of unemployment, which it had been anticipated would accompany a great war, was avoided, partly because of prompt State action in maintaining the fabric of commerce and finance, and therefore the supply of raw materials, and partly because of the large demand for commodities for the Army and Navy—a war demand vastly in excess of that in any previous war. In other words, State intervention and the Navy have placed Great Britain in a much superior economic position to that of her adversaries.

3. Trade Unions, Co-operative Societies and Distress.—Before the outbreak of the war there were signs that the wave of industrial activity which reached a high point in 1913 was receding, and that unemployment was beginning to increase; but the trade unions did not anticipate that the ordinary ebb and flow of trade was to be disturbed by a great war. Within a very short time after the declaration of war, the trade unions experienced a heavy drain on their funds in respect of unemployment benefit. It is, of course, obvious that the accumulated funds of trade unions were never intended as a subsidy to the community during a time of war, which is what, in point of fact, they became. It is true that the unions made efforts to conserve their resources in various ways, not least by advising their younger members without dependants to join the army; it is true also that most of them profited under Section 106 of the National Insurance Act by the State refund of one-sixth of their payments to their unemployed members; but these measures—and others—were inadequate to maintain the unions in a sound financial condition, and many unions trembled on the verge of bankruptcy.[1] Such a condition of affairs was viewed with apprehension not only by the trade union movement, but by the State, with the result that at the beginning of October the Government subsidy of one-sixth was under certain conditions increased.[2] But even with this assistance, many unions will undoubtedly experience considerable difficulty in avoiding financial disaster. Speaking generally, the trade union movement as a whole will emerge from the war in straitened circumstances. Some unions may have collapsed, and amongst others the movement in favour of amalgamation may have received an impetus owing to financial embarrassments.

[Footnote 1: Speaking generally, it cannot be said that the trade unions faced the crisis with either wisdom or courage. Their attitude, on the whole, was one of utter bewilderment. The lack of the power of adaptability to new circumstances, together with the fact that sufficient pressure was not brought to bear upon the Government in the first weeks of the war, accounts for the unfortunate position in which the trade unions found themselves.]

[Footnote 2: The scheme applies only to unions suffering from abnormal unemployment. There are also conditions that they "should not pay unemployment benefit above a maximum rate of 17s. per week, including any sum paid by way of State unemployment benefit," and that they "should agree while in receipt of the emergency grant to impose levies over and above the ordinary contributions upon those members who remain fully employed." The amount of the emergency grant in addition to the refund of one-sixth already payable will be either one-third or one-sixth of the expenditure on out-of-work pay, depending on the amount of the trade union levy. Under special conditions the grant is to be retrospective. It is, therefore, possible for trade unions to be subsidised so far as unemployment benefit is concerned, to the extent of one-half their payments. But this scheme does nothing to assist trade unions (of which there are many) which get no unemployment benefit.]

The decrease in earnings accompanying short time, and their total stoppage in the case of unemployment, mean amongst the workers a restriction of purchasing power. The shrinkage in the total wages bill, especially in Lancashire, must lead to a diminution in the income of small traders and the co-operative societies. Where trade is very bad the societies will be severely hit; smaller purchases will mean smaller profits, which, where there is no large reserve to fall back upon, will in turn mean the declaration of a smaller dividend. The "divi" received by the workers will be less, and the purchases which the thrifty housewife of the north usually makes with it in the way of clothing and replacement of household articles will be less also; where the "divi" has been left in the society, it will in a large number of cases be used to supplement the scanty wages earned on short time, or to provide the necessaries of life where the breadwinner is altogether unemployed. In places where times become very bad, the co-operative societies during the war, and for some time after, will suffer because of the conversion of the cash orders which ordinarily go to the "co-op" into credit orders at the shop round the corner. On the whole, however, the co-operative societies will probably come better out of the war than many classes of small shop-keepers. The small tailors, drapers, earthenware dealers, etc., and others who sell all but indispensable commodities, will see a shrinkage in their sales, especially if prices rise. The co-operative societies will also lose in this respect, but they will lose less on the whole, owing to the fact that a good deal of their capital is used in the sale of food-stuffs, the consumption of which will be restricted last. But admitting this, they cannot expect to escape unscathed, and the blow they suffer will be felt on other sides of their activity, such as their educational work, the income for which usually fluctuates with the prosperity of the societies.

The diminution of the purchasing power of the working people because of the restriction of the national wages bill, however, may be minimised by common action. The National Relief Fund and the Women's Employment Fund are intended really for this purpose. The establishment of women's training workshops and of maintenance grants on condition of attendance at schools and classes are steps in the same direction. The Government has increased the disgracefully low payments made to dependants of soldiers on active service, and its scale of pensions for widows of soldiers and sailors and for those totally or partially disabled in the performance of military or naval duties. Arrangements have been made for the payment of allowances of half wages up to a maximum of £1 a week to dependants of sailors employed on insured British merchant ships captured or detained by the enemy. More important from the point of view of industry as a whole are the steps which have been taken to minimise the effects of a diminution in the volume of employment by the development of new openings. The Government through the Board of Trade took the lead in the attempt to secure a share of the trade hitherto done by Germany and Austria. Special efforts were made to develop the manufacture of toys, and other industrial experiments were begun by the Central Committee on Women's Employment. The Government appointed a Chemical Products Supply Committee with a view to stimulating the production of dyes and drugs at home. These proposals are in the main an attempt to divert the trade of foreign countries, especially Germany, into British channels. The second line of action is fuller provision of home needs which cannot be satisfied by foreign producers, but are essentially domestic. Such needs are housing, public parks, roads, etc. Between August 4 and September 21, 1914, the Local Government Board received over 600 applications from local authorities for powers to borrow money amounting in all to over £2,500,000. About a fifth of this amount it was intended to expend on housing. During this period the Board sanctioned loans amounting in the aggregate to more than £3,500,000, as compared with rather under £2,000,000 in the same period in 1913. The Road Board arranged to put in hand the construction of certain new highways arranged for before the beginning of the war. In addition, in the first seven weeks of the war, the Board arranged to make grants amounting to about £450,000 in aid of new road construction and road improvements in many different parts of the country, which will involve a total expenditure of about a million sterling. The Development Commission began to consider schemes for the construction of light railways, for the improvement of the navigation of rivers, etc., in order that work of this kind should be ready to be put into operation when the necessity arose. The Board of Agriculture has urged that where practicable the acreage under wheat should be increased. This suggestion is, of course, valuable, but will not greatly affect the industrial situation. Even if the schemes sanctioned by the Local Government Board and those adopted by the Road Board were put into operation immediately, which is almost impossible, they would not make a very appreciable difference to the total wages bill of the country. But perhaps it is thought by the Government that the state of employment is not sufficiently grave to warrant a greater expenditure at the present time. In spite of the insistence on forestalling destitution, there is still among local authorities much confusion of charity and relief work with anticipation of future needs calling for employment through the ordinary channels of trade. On the whole the Government has not met the domestic problems of the war with the unanimity and boldness which has characterised its actions in the actual prosecution of the war and in dealing with the financial crisis.

4. The New Spirit.—The broader social effects which showed themselves in the early days of the war are illustrated by the remarkable growth of State Socialism. The nation became a community, united in a single purpose; breaches which many imagined to be permanent, cleavages which were thought to be fundamental, no longer existed. None was for a party; all were for the State. The three political parties formed a Parliamentary Recruiting Committee, and altogether impossible teams of people appeared on public platforms with a common aim; Mr. Ben Tillett, in words that might have fallen from the lips of a Tory ex-Cabinet minister, declared that "every resource at our command must be utilised for the purpose of preserving our country and nation"; the anti-militarist trade union movement earnestly appealed to those of its members who were ex-non-commissioned officers to re-enlist; the Queen and Miss Mary MacArthur were members of the same committee. This unanimity, which has pushed into the background for the present causes of difference, has led the vast majority of people to submit cheerfully to the will of the State. The unity of to-day must necessarily make its influence felt even when the reason of its existence has passed away. In the meantime it is assisting in the growth of a new spirit which the war itself has fostered. The social outlook of the people and their attitude towards the larger problems of life is changing, and patriotism has taken a deeper meaning.

So far we have devoted our attention to some of the immediate effects of the war. But on the return of peace there will be new influences at work, the immediate and ultimate effects of which will powerfully affect the course of future development. The European War will mark an era in international politics. It may also stand as a landmark in the history of the social and economic life of Western Europe. It is not unlikely that in this respect it will surpass in its importance all the wars of the past. The reasons are to be found in the magnitude and costliness of the war, the highly developed character and the inter-relatedness of foreign commerce, the possibility of new industrial forces coming into play, and the influence of the war on the political and social ideas of the European peoples. It may be that in this country the war will let loose economic forces destined to modify industrial organisation very profoundly; and that social forces, especially on the Continent, will be liberated to work towards fuller political freedom. These things lie in the veiled future, and prophecy is dangerous. We may, however, turn to consider some of the probable effects the war will leave behind it.

C. AFTER THE WAR

1. General Effects.—When the war comes to an end, an immediate revival of commercial relations between the combatant States and a general revival of foreign trade cannot be reasonably expected. After the Napoleonic Wars, English manufacturers, assuming the eagerness of continental peoples to buy their goods, were met with the obvious fact that impoverished nations are not good customers. When peaceful relations are resumed in Europe, we shall recognise very vividly the extent to which industry and commerce on the Continent have been closed down. Even assuming that British production continues, Germany, Belgium and Austria will have little to send us in exchange. The closing of the overseas markets of Germany, and the consequent shrinkage in production, the disruption of normal industrial life by the withdrawal of millions of men to join the colours, and the abnormal character of existing trade, due to the needs of the armies in the field, are not conditions favourable to the easy resumption of normal commercial relations. The dislocation of the mechanism of industry and commerce in Europe, on a much larger scale than ever before—a mechanism which has with growing international relations and interdependence become more complicated and more sensitive in recent years—cannot be immediately remedied by a stroke of the pen or the fiat of an emperor. The credit system upon which modern industry and commerce are built depends upon mutual confidence. This confidence will not be restored among the combatant nations immediately on the cessation of war; it will require time to grow. Further, Europe during the war has been spending its substance and must emerge much poorer. This applies not only to combatant States, but to neutral countries, some of which have floated loans to meet the abnormal expenditure thrown upon them by prolonged mobilisation. The capital and credit of a large number of people will have suffered great loss or have vanished into thin air. Houses, shops, and buildings of all kinds, produce manufactured and unmanufactured, bridges, ships, railway stations and stock of enormous value will have been destroyed. The community will have been impoverished, not only by the expenditure of great armies and the destruction of wealth, but by the utilisation for immediate consumption of wealth which would have been used as new capital, and by the withdrawal of probably close upon fifteen million men from production during the period of the war. Even if we assume that the world has lost the production of only twelve million men[1], the loss is enormous. If each man were capable of producing, on the average, wealth to the value of £100 per year, the loss of production per year during the continuance of the war would be about £1,200,000,000. The effect of these factors will be heightened by the fact that the millions of men whose needs during the war have been satisfied by their non-combatant fellow-countrymen will be thrown upon their own resources. And though Europe will still need to be fed and clad and housed, the effectual demand of the population for the goods and services it needs, a demand which it is able to satisfy because of its possession of exchangeable wealth, will be smaller than before the war. The demand will be more or less stifled until the credit system is re-established and mutual confidence restored, and until industry and commerce have adjusted themselves to the new situation. The volume of employment in this country during the war will have been swollen by temporary demands for war supplies which will cease when the war ends; foreign trade will be uncertain; a larger number of soldiers will be thrown on the labour market than ever before. It would seem, therefore, that in the absence of special steps, the volume of unemployment at the close of the war will be a good deal greater than during the progress of the war[2].

[Footnote 1: The number must be larger than this, as the mobilisation of the armies of neutral states should be taken into account.]

[Footnote 2: It is thought by some that the war will be followed by a short boom, when Europe will make good the necessities of industry and civilised life, but it is at least doubtful whether there will be a rapid reproduction of these commodities, owing to the conditions, already described, which will obtain at the close of the war. In any case, however, it will be merely a flash in the pan, and there will follow the gloom of a deep depression, unless there is clear-sighted State action.]

It is just conceivable, though one hopes not probable, that the economic effects of the war will be complicated by the imposition of war indemnities. The indemnity is really a means of obtaining booty from a vanquished State, and has been looked upon as a justifiable means of further humiliating an already beaten enemy. It has been pointed out[1], however, that the advantages derived from an indemnity are not an unmixed gain. The indemnity recoils on the heads of those who impose it. It is unnecessary here to enter into a consideration of the detailed effects of huge payments by defeated nations; though it may be remarked that the ramifications of such payments are so intricate and often so incapable of measurement, whilst other economic influences are at work at the same time, that it is impossible to draw an accurate conclusion as to the net advantage or disadvantage of indemnities to the State which levies them. But the point to be borne in mind is that the addition of a great debt to the already large burden of an unsuccessful war reacts upon all countries with which the defeated state enters into business relations. The losses due to this cause will not necessarily be counterbalanced by gains from increased trade with the country receiving the indemnity; and even if they were, the latter trade might be of a different character. In any case, countries not parties to the indemnity will be affected by it in some way or other; war indemnities, like wars, do not pass by neutral countries and leave them untouched.

[Footnote 1: See Norman Angell, The Great Illusion, Part I. chap. vi.]

It is important to remember that, though modern warfare is much more costly and more exhausting than in the past, there is another side to the matter. Society has also gained remarkably in its powers of recuperation. The blight of war is not as terrible as might be expected. The accumulated knowledge, the vastly increased productivity of industry, and the high organising ability, which have made the modern industrial and commercial world, will not be obliterated by the war. And though there will be difficulties in the way of their full operation when peace returns, they will aid powerfully in shortening the period of recovery. The forces which have transformed mediaeval into modern cities in a few short years will still exist. Though they can hardly be expected to overcome all the many factors likely to restrain economic activity, they may be relied on to stimulate the revival of normal economic life. Indeed, the knowledge of science and the faculty of organisation are likely to be applied more extensively than in the past to productive processes.

After the war, when the States of Europe begin to tread the paths of peace again, one of the first things to be done will be to repair as far as possible the damage done by the war. Take Belgium as an extreme example; leaving aside the irreparable destruction of historic buildings and priceless treasures, there are many million pounds' worth of houses and farm buildings, shops, warehouses, factories, public buildings, ships, railway stations, and bridges to be replaced. This work will take precedence over other kinds of production. Sugar, motor cars, glass, etc., will still be manufactured, but chiefly in order to buy the requisite raw materials and finished goods for the replacement of the wealth destroyed by the ravages of the war. Speaking generally, Belgium will probably consume less food than ordinarily, wear less clothes, and consume less luxuries. Savings, which would normally have been devoted to new industrial developments, will be needed to make good the losses in existing industrial establishments. It is clear, therefore, that the economic growth of Belgium will be retarded in a great degree.[1] The same holds good of Germany, though probably not to the same extent unless the theatre of war is extended to cover a considerable part of the Empire. In the case of our own country, provided it remains free from invasion, there will not be such a large replacement of lost wealth and capital destroyed by the war, except in the case of shipping; but in common with other States there will be the war to pay for, and certain obligations to meet regarding the maimed and the relatives of the slain. Taxation will be heavy, and therefore, on this ground alone the accumulation of new capital will be retarded. Industrial organisation, having been re-arranged and modified to meet the requirements of the war period, will not resume its old form without a good deal of creaking and jolting. And even if it could, it will not be able to face the new conditions arising out of the war at all rapidly. There is every prospect, therefore, of a time of great difficulty after the war is over, before the normal course of industrial and commercial activity is fully resumed. In all likelihood, we shall find that the relative importance of our various industries will have altered to some extent, and that the nature of our trade will have been modified also. Then also the relative positions of our home and foreign trade may shift; in other words, if the war lasts sufficiently long for new industries to develop and become efficient, they may survive the competition of foreign goods after the war; in which case, the goods which have hitherto been produced to buy the foreign goods will not now be required for foreign trade. It may be that on the return of peace, some European States, in order to give their industries an opportunity to recover from the effects of the war, will inaugurate new tariffs; there is, indeed, a strong possibility that on these grounds, and because of the dependence of the United Kingdom on the products of Germany, the Tariff Reform Movement here may be electrified into life.

[Footnote 1: If Germany be required to compensate Belgium for the damage done, these effects will in large part disappear; though the burden would still remain. The difference would be that it would be more widely distributed.]

2. Possible Industrial Developments.—But industrial changes will not be confined to the direction and form which economic activity will take. As has been suggested above, there may be far-reaching changes in the methods of production. It has been said that "there is only one way by which the wealth of the world will be quickly replaced after the war and that is by work. The country whose workers show the greatest capacity for productiveness will be the country which will most rapidly recuperate."[1] The question goes deeper than the replacement of wealth. The position after the war will be that production will be retarded because of the diminution in the rate of accumulation of new capital since the beginning of the war; there will be a certain amount of leeway to make up. Consequently, there will be every incentive towards the greatest possible efficiency in production. It is here that the workers are likely to be affected. Has labour reached its maximum efficiency? It has been shown by the application of what is called "scientific management," that the output of labour can be increased to a remarkable extent. For instance, instead of shovelling 16 tons a day, a man can shovel 59 tons; a man loading pig-iron increased his total load per day from 12-1/2 to 47-1/2 tons; the day's tale of bricks laid has been raised from 1000 to 2700. The list could be extended to cover operatives working at machines. In the endeavour to screw up industry to a maximum of production, it is not likely that the expedients of "scientific management" will long remain untried. Already the system is making considerable headway in the United States, and it is not altogether unknown in this country. It is not possible to enter into a full explanation of the methods of "scientific management." Briefly, by a process of scientific selection it puts each worker in the job for which he is best fitted, and teaches him exactly how to use the most efficient tools with which he would be provided. The method of teaching may be illustrated from Mr. F.W. Taylor's own example: "Schmidt started to work, and all day long and at regular intervals, was told by the man who stood over him with a watch, 'Now, pick up a pig and walk. Now sit down and rest. Now walk—now rest,' etc. He worked when he was told to work, and rested when he was told to rest, and at half-past five in the afternoon had his 47-1/2 tons loaded on the car."[2] By elaborate experiments the exact shape and size of a shovel is determined; by long observation useless and awkward movements of a workman are eliminated or replaced by the correct movements giving the maximum return for the minimum of effort. In this way, and by a bonus on wages, a largely increased output is obtained. It is clear that the adoption of such methods gives the "scientific manager" great power; it also seems inevitable that the workman should degenerate into an automaton; it is obvious that in the hands of employers ignorant of the principles underlying it, and seeing merely a new and highly profitable method of exploitation, it will be open to serious abuse, as experience has already shown in America.

[Footnote 1: Round Table, Sept. 1914, p. 708.]

[Footnote 2: Scientific Management, by F.W. Taylor, p. 47.]

So far the tremendous significance of "scientific management" has not been fully recognised. Properly understood, it is the complement to the industrial revolution, which by the more extensive use of machinery, etc., increased the efficiency of capital. The present movement aims at a similar increase in the efficiency of labour as an agent of production. The new revolution in industry has as yet merely begun, because employers, in spite of the motive of self-interest, are conservative; but it will receive an enormous impetus from the conditions arising out of the war. Like the introduction of machinery and factory industry a century and a half ago and onward, it may be accompanied by widespread evils and cruel exploitation. Indeed, there is every likelihood that the methods will be distorted and misused. By their careful application there is no doubt that the output of the labourer can be increased without the expenditure of greater effort than before, but even then there would be the tendency towards becoming de-humanised. This, however, might be overcome by shorter hours and higher wages, which would raise the standard of comfort and widen the worker's interests. Unwisely used, "scientific management" will become an instrument for shackling the worker, and increasing at a great rate the wealth of the capitalist. It will be freely admitted that anything that will increase the productivity of the labourer, and therefore the wealth of the community, is advantageous, provided there is an equitable distribution of the product, and that the effects on the working members of the State are not socially injurious. But the hidden evils that may manifest themselves are very real, and it is important that not only the workers, but the State should be prepared to save the good and prevent the evil. There will, however, be large numbers of employers of labour who will not avail themselves of the new-fangled methods, and who will endeavour to increase production by the old policy of "driving." And even without driving, wage-earning labour under present conditions may be carried on under circumstances unfavourable to industrial efficiency, and for hours inimical to the welfare of the community and actually injurious to industrial productivity. In the future the State will be more closely concerned with industry and commerce than hitherto; there will probably be a more clearly defined State policy aimed at the encouragement of production. Its view will be wider than that of the individual employer, and we may expect therefore, providing there is no serious reaction after the strain of the war, that the State will impose working conditions which will favour maximum production in the long run. It will be to the interest of the community to maximise the efficiency of the industrial system; and enlightened statesmanship will overhaul our existing code of industrial laws to achieve this object as far as possible, as well as to guard the community against the evils inherent in a misapplication of the principles of "scientific management."[1]

[Footnote 1: See an article on "Next Steps in Factory and Workshop Reform," by Arthur Greenwood, in the Political Quarterly for September 1914.]

After the war, unemployment is likely to increase. The work of new production will be put into operation only gradually; there will be every inducement to economise the use of labour as far as possible; wages during the depression will most probably fall; there will be disaffection in the ranks of the trade unionists; the possible consolidation of industries into the hands of fewer employers will increase the strength of the masters; the funds of the trade unions will be depleted by the heavy strain on their resources, and subject to a further drain after the war. The outlook of the trade union movement is, therefore, far from bright. It will be generally agreed that the bankruptcy or serious impoverishment of the unions of this country would be nothing less than a national disaster; but unless action of some kind is taken, they will become greatly weakened and almost impotent, and one great bulwark against unjust encroachments upon the rights of labour will be removed.

It is not improbable, however, that the community will indirectly assist the trade unions by the steps taken to mitigate the evils which the war will leave in its train. The army instead of being immediately disbanded may be gradually dismissed over a period of, say, five years; the widows and dependants of soldiers and sailors, and those who have returned maimed and crippled from the war, may be adequately provided for, and, together with children of twelve and thirteen, kept off the labour market; the larger schemes of the Development Commission may be put into operation; the legal minimum wage may be extended to all low-paid trades. In these and other ways the community may deal comprehensively with the problems it has to face. The difficulties of the aftermath period will call for both clear-sighted action and public spirit; and if it is to be bridged over successfully, the transition from a war to a peace footing must be gradual; the community must continue its state of mobilisation in order to meet the enemy within the gates. Provided the united wisdom of the nation is thrown into the task, the evil after-effects of the war may be, if not altogether avoided, restricted within narrow limits. At the bottom, therefore, the future course of events depends upon the temper and spirit of the people at the close of the war.

3. Social Effects and the New Outlook.—The European conflict will probably exercise a strong sobering influence upon the minds of the people. The gravity of the crisis, whatever victories may crown our arms, will be reflected in the gravity of the people. A new dignity, a greater self-respect, a deeper earnestness may arise among the mass of the people, to which the conduct of our soldiers in the field will contribute. High qualities of leadership win their admiration; but for them they claim no credit. The army is officered for the most part by people of a higher social standing, whose qualities they will willingly admit; but the social gulf debars them from gaining inspiration from their achievements. In the case of the rank and file, largely drawn from their own class, the effect is different. The Tommy is flesh of their flesh and blood of their blood. The qualities he displays reflect credit upon his class. The working man is not unmindful of the high opinion in which the British private has been held by a line of continental soldiers from Napoleon to Bernhardi. The exploits of his fellows in the field have given the lie to stories of deterioration; and working people are experiencing a sense of pride in their class which may have no inconsiderable effect on their attitude regarding social developments in the future.

Already the national temper has not submitted without protest to the disgraceful sweating of our troops merely because their patriotism has led them to sacrifice their lives, which are beyond all money payment. But the feeling in favour of the war and the spirit of trust in the Government has, up to the present, overridden serious criticism. The result has been that the Government has often remained inactive when action was needed and has acted unwisely and ignorantly at times; for example, in the case of the Local Government Board circular, stating that the Army Council are prepared to issue allowances through the Soldiers' and Sailors' Families Association or the Local Representation Committees. It has been said that "the whole system is an outrage on democratic principles. The State sweats its servants and then compels them to take the niggardly wages it allows them from a charitable society[1]." This type of action may pass muster during a time of stress, but whether the spirit of the people will accept it after the war is over and there are the dependants of the slain to be maintained and the permanently crippled to be provided for is a different matter. Not merely justice, but the new pride of the people will rebel against it. These are but phases of the larger social problem. There is the question of poverty in all its ramifications. For the moment, economic injustices and social evils have fallen into the back of people's minds, and the new and abnormal causes of destitution are calling forth special measures of assistance. After the war, the ever-present deep-seated poverty will reassert its presence, and in the hearts of many people the question will arise as to whether the community which courageously and whole-heartedly fought the enemy without the gates will turn with equal courage and determination when the time comes to fight the enemy within the gates. The experiences of the war time, the willingness to embark on great projects in face of a national crisis, will not be forgotten, but will inspire in social reformers the hope that the country may also face the internal national peril in a similar spirit. The national—as opposed to the individual—poverty which the war will cause may itself be a force making for good. As Mr. Lloyd George well said, "A great flood of luxury and of sloth which had submerged the land is receding and a new Britain is appearing. We can see for the first time the fundamental things that matter in life, and that have been obscured from our vision by the tropical growth of prosperity."[2] There seems a prospect of an era of social growth and regeneration following the war. In other European countries there may be equally important developments. It may well be that in the event of German defeat the democratic movements of that country will gain a great impetus from the blow given to the Prussian hegemony. In Russia there is an expectation of a new freedom. At the first meeting of the Duma after the opening of hostilities the Labour Party declared its opinion that "through the agony of the battlefield the brotherhood of the Russian people will be strengthened and a common desire created to free the land from its terrible internal troubles."

[Сноска 1: The Nation, 19 сентября 1914 г.]

[Сноска 2: Речь в Куинз-холле, Лондон, 19 сентября 1914 г.]

С другой стороны, необходимо признать, что после напряжения, вызванного войной, существует вероятность периода реакции и оцепенения; страна окажется серьезно обедневшей, и сохранится тяжелое налоговое бремя, несмотря на некоторое вероятное облегчение от бремени вооружений. Тем не менее социальные пороки и несправедливости будут бросаться в глаза сильнее, чем когда-либо. Возникнет множество новых национальных и имперских проблем, требующих незамедлительного решения. Интеллектуальное брожение, истоком которого стала война, продолжит действовать, расширяя умственный кругозор и углубляя социальное самосознание. В целом, пожалуй, будет справедливо сказать, что, хотя обстоятельства могут отсрочить это, рано или поздно возникнет великое движение, поставившее своей целью очистить нашу национальную жизнь от тех черт, которые преграждают путь к человеческой свободе и счастью.

Также представляется неоспоримым, что глубокий интерес, проявляемый широкими массами к войне, пробудит в них понимание важности проблем государственного управления и внешней политики. Комитеты рабочих по иностранным делам полувековой давности, не оставившие после себя никаких следов, могут возродиться в новой форме, а разграничение экономических и социальных вопросов и политических и внешнеполитических проблем может стереться. Трудно переоценить значение постепенно расширяющегося кругозора среди наиболее мыслящей части народа. Ни в чём расширение кругозора не проявляется так явно, как в сфере имперских дел. До сих пор империя для рабочего человека воспринималась как нечто почти мифическое. Насколько она вообще существовала, она представлялась благодатным охотничьим угодьем для капиталиста-эксплуататора. Спонтанная помощь, оказанная метрополии колониями и зависимыми территориями, убедила его в реальности империи и смутно вдохновила видением ее возможностей как федерации свободных содружеств. Иными словами, Британская империя, в противовес германской, постепенно начинает признаваться олицетворением демократии, какими бы несовершенными ни были ее достижения до настоящего времени. Следовательно, возвращение мира увидит более глубокий интерес к имперским вопросам; поистине, не будет преувеличением сказать, что возникнет имперский ренессанс, рожденный новым патриотизмом, «облаченным в сверкающие белые одежды». Перемена в сердцах людей нашей страны, происходящая из-за того, что ничего не подозревающий воин в сияющих доспехах распахнул шлюзы чувств и мыслей, может принести новую эпоху, сопоставимую по своему влиянию на цивилизацию с великими эпохами прошлого. Сегодня — время сева. Но урожай не будет собран без пота и труда. Времена чреваты великими возможностями, но их реализация зависит от соединенной мудрости народа.

КНИГИ

Для понимания механизмов международной торговли следует обратиться к книге Хартли Уизерса «Денежный обмен» (Money Changing, 5 шилл.) или к работе Клэра «Азбука иностранных валют» (A.B.C. of the Foreign Exchanges, 3 шилл.); общий контур этого предмета можно найти в любом хорошем общем учебнике по экономике. О финансовой ситуации см. статьи «Ломбард-стрит во время войны» и «Война и финансовое истощение» (Round Table, сентябрь и декабрь 1914 г.); «Война и финансовая система, август 1914 г.» Дж. М. Кейнса (Economic Journal, сентябрь 1914 г.); а также статьи в New Statesman «Зачем нужен мораторий?» (15 августа 1914 г.) и «Восстановление рынка денежных переводов» (29 августа 1914 г.). Книгу Нормана Энджела «Великая иллюзия» (The Great Illusion, 2 шилл. 6 пенсов) следует изучить для анализа взаимосвязи между войной и торговлей. Самой доступной книгой, посвященной внешней торговле европейских стран, является «Ежегодник государственного деятеля» (Statesman's Year-Book), публикуемый ежегодно по цене 10 шилл. 6 пенсов. Главы, перепечатанные из «Британской энциклопедии», также полезны. Ценная статья «Экономические отношения Британской и Германской империй» за авторством Э. Краммонда появилась в Journal of the Royal Statistical Society в июле 1914 г. Тот же автор опубликовал статью «Экономические аспекты войны» в The Quarterly Review за октябрь 1914 г. (6 шилл.). Представление об экономическом развитии Германии можно получить из работ В. Х. Доусона «Эволюция современной Германии» (Evolution of Modern Germany, 5 шилл.) и того же автора «Индустриальная Германия» (Industrial Germany, Nation's Library, 1 шилл.). Книга мистера Ф. У. Тейлора «Научный менеджмент» (Scientific Management, 5 шилл.) и книга мисс Дж. Голдмарк «Утомление и работоспособность» (Fatigue and Efficiency, 8 шилл.) объясняют научный менеджмент. Краткое изложение также приведено в книге Лейтона «Капитал и труд» (Capital and Labour, Nation's Library, 1 шилл.).