V
ENGLAND IN THE INDIVIDUALISTIC ERA
WHILE France in the great revolution gave the world the industrial era, England very soon took the leadership, and has retained it ever since. Various causes contributed: the early start of England in gradual revolution from the industrial centers of the later Middle Ages, which had been destroyed on the Continent by the perpetual wars of the absolute monarchies, but survived in England; the protection of its island position by the ocean, which kept hostile armies out of England during the Napoleonic wars; the acquisition of a great colonial empire: whenever Napoleon conquered and annexed another country, England took its colonies, and when France, after its final defeat by the allies, had to give back all these nations, England, as one of the allied "liberators," kept most of their colonies, and so India, South Africa, etc., became English. The wealth of
England in coal and iron, the fundamental requisites of industrialism, gave her a great advantage. But most instrumental of all, and more dominant than the other incidental advantages, was the strongly individualistic character of the Anglo-Saxon race, which gave it the leadership in the individualistic era, and supplied the initiative to create industrial capitalism.
England thus became the great industrial country, producing and supplying the world with steel and iron, textiles, machinery, and all manufactured goods, England became the universal world's supply of manufactured goods, from the fetishes and idols of the heathen to the Bibles and missionaries to convert them. Free trade, early established in England, and consistently maintained, gave a cheap supply of food and raw materials. An effective propaganda spread free trade to the other nations, unrestrictedly opened their markets to English products, and for generations retarded the development of industries in other nations, and kept them industrial dependencies—like our nation before the Civil War. England was a prosperous industrial nation under free trade, and so the other nations were led to believe if they only embraced free trade they would become equally industrial and prosperous. It took generations to realize that for England as a dominating industrial nation, having no industrial competitor, free trade was an advantage, but no industrial development could hope for success in another nation in competition with the powerful, highly developed industries of England, having open access to the markets. We may listen with rather mixed feelings to the complaints of our protectionists, asking for "protection" of our "infant industries," when we hear that these infant industries hold first or second rank in the world's production, and often sell their products in the foreign markets cheaper than in our own country; but in the agricultural America before the Civil War, in the agricultural Germany of fifty years ago, any new industry was certain to be crushed quickly and promptly and destroyed by England's dumping competitive products regardless of price—and then recuperating by higher prices when the new industry had been destroyed. There was nothing immoral or improper in this; it is done to-day by every industrial nation, as it is the law and code of the competitive age—the stronger destroys or absorbs the weaker.
But finally the other nations—America after the Civil War, then Germany and the others—closed their gates, developed their own industries, became industrially independent of England, and finally became her competitors on the markets of the world.
For over half a century, however, England held the markets of the world without any competition. Then and thus, from the vast profits of this time, was the foundation laid of the vast financial power of England, which still to-day holds the world in bondage.
With the development of America and Germany as industrial nations began the decadence of England's industries. Developed at an earlier time and under conditions when there was no serious competition, England's industrial system did not show the productive efficiency of its later competitors. America and Germany both organized their industries on a larger scale with more modern conceptions, and especially they utilized to the fullest extent all the intellectual abilities of the nation, while England failed in this respect.
England's industrial preponderance had been built up from the factory and the machine-shop, by men working up from the ranks, but the country's higher educational institutions had little part in the industrial development. Thus deprived of many of the country's best intelligences, unable to secure the higher industrial efficiency which comes from the broad and systematic training of the industrial leaders in technical educational institutions, England's industries found themselves at an increasingly serious disadvantage against their later competitors, and when, in the last decades, the seriousness of the situation was beginning to be realized, remedial action was difficult, because the educational institutions, not receiving the assistance and co-operation of the industries, had in their technological branches remained behind the engineering schools of America and Germany.
In these latter countries, in the beginning of the industrial awakening a close co-operation and practically an alliance had been established between the industry and the technical college or university. The industry gave preference to the college-trained men—the reverse of what was the rule in England—often, as in the electrical industry, even made college training practically mandatory for all higher positions, and the leaders of the industry devoted considerable time and attention, and even gave material financial assistance, to the engineering schools, opened their establishments to instructors and students of these schools, advised and guided their courses, and so did everything to make the engineering schools most useful for the industries, while the faculties of the technical schools quickly realized the advantage of this close co-operation with the industry, encouraged it to the fullest extent, wherever possible selected their instructors from the industries, in short, availed themselves of the assistance given by the industries.
As the result, with the exception of those industries such as ship-building, on which her existence depended, England, once the only industrial nation, dropped behind America and Germany, especially so in the more recent industries. Thus in electrical engineering, in the last years before the war, when there was any great electrical engineering work done in England or her colonies, it was usually "made in America" or "made in Germany."
Contributory to the industrial decadence was England's labor situation. In the early days of the period the standard of living of the British industrial worker was relatively high, especially so in comparison with the masses in the other, industrially undeveloped nations. With the increasing power of industrial capitalism the standard of the industrial worker was gradually but steadily lowered, and with it his industrial efficiency. First this was little noticed, especially as there was no comparison yet with the conditions in other nations, in which industrialism was just beginning, and even after the lowering of the standard of living became marked, for generations conservatism and the strong individualistic tendency of the Englishmen prevented effective organization to combat the lowering of the standard. It was significant that during the latter part of the nineteenth century, at the numerous international congresses of the labor interests the British trade-unionists either held ostentatiously aloof, or opposed any joint national or political action. When finally, in the last years, the mass organization of the British labor elements came industrially and politically, it came with a rush, and while accomplishing material results in arresting the downward trend of the standard of living, it had the defects of any very rapid growth: the absence of the stability and steadiness of development, which can be given only by gradual evolution, but not by revolutionary change; the preponderance of destructive over constructive tendencies; the unnecessarily great harm to the industries by the cataclysmic activities, etc.
By this time, the first period, that of England as industrial power, had passed; other nations had forged ahead industrially, and England had entered the second period of her capitalistic age, that of England as financial power.
It is significant to realize that industrial convulsions, such as strikes of half a million or a million railway workers, miners, etc., which would have paralyzed and plunged into industrial panic any other nation, passed over England without any appreciable effect on her prosperity.
What mattered it to England that she lost the American market and American industries grew and supplied the home market and entered the world's market, even into England, as long as the American industries were financed by British capital and the profits of the American industries went to England, hundreds of millions per year, as dividends and interest on British investment in American industries? What mattered it, when British industries declined, as long as all over the world, from Mexico to Ceylon, and from China to South Africa, agriculture and industry, financed by British capital, sent their profits to England, and the entire world thus paid tribute? Not political tribute as conquered nations, as of old, but tribute just the same—industrial tribute—the return on British capital invested all over the world; the capital which had been created by the profits of the British industries during the time when England was the leading industrial nation, and had accumulated ever since.
Thus England became more or less independent of its home production, became the great financial power of the world, London the world's financial center which controlled the industries of the nations, and so England became able to a large extent to live on the returns of her capital invested throughout the world.
This is for England the most serious side of the present war. It is British capital which must bear the enormous, almost inconceivable financial burden of the war, and however vast British capital is, it is gradually being impaired by the steady drain, and with every month that the war continues, the reorganization of England's economic system after the war becomes more certain, the necessity of reconstructing its domestic economy so as to carry a much larger part of its consumption by national production, less by industrial exploitation of other nations or colonies—that is, to live more fully on its productive income, less on the interest of its capital.
While this readjustment and retrenchment necessarily must lead to wide-spread hardship, it is undoubtedly the best that could have happened to England as a living nation. No nation has yet lived as parasite on the work of other nations, and remained alive; so the Roman Empire has gone to decay; so Spain, when after the discovery of America the riches of the new continent came to her in the silver-fleets, has fallen from her height and not recovered yet, after centuries.
But for all the other nations of the world—those which were "developed" by British capital—it will mean reorganization and reconstruction, also; an industrial depression first, by the withdrawal of the British money, which had "made the wheels go," and then a gradual recovery under a more complete national industrial independence.
In our country the conditions have been somewhat different, in so far as we have largely escaped the industrial depression, and our industrial recovery under national, American capital has been very rapid. Before 1893, America was practically a financial dependency of England. After the panic of 1893, America's financial strength gradually rose, and during the two years of the present war we have made an enormously rapid progress toward financial independence, largely because a considerable part of the British capital, which had to be withdrawn from the markets of the world to finance the war, found its way to America to pay for supplies, food, and industrial products.
However, we must not overestimate our position. We are still very far from financial independence, and the hope to see the world's financial center shift from London to New York is still very much of a dream—far from realization. Not a dream, however, but quite within reach is the opportunity to replace European capital by American capital in the industrial development of those countries which are within our sphere of influence—South America, Central America, and Mexico.