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is only a half-truth; the half that is true is important, but the half that is untrue is perhaps equally important when a fundamental reconstruction of society is being considered.

Socialist and Anarchist critics of existing society point, with perfect truth, to certain capitalistic factors which promote war. The first of these is the desire of finance to find new fields of investment in undeveloped countries. Mr. J. A. Hobson, an author who is by no means extreme in his views, has well stated this point in his book on ``The Evolution of Modern Capitalism.''[55] He says:

[55] Walter Scott Publishing Company, 1906, p. 262.

The economic tap-root, the chief directing motive of all the modern imperialistic expansion, is the pressure of capitalist industries for markets, primarily markets for investment, secondarily markets for surplus products of home industry. Where the concentration of capital has gone furthest, and where a rigorous protective system prevails, this pressure is necessarily strongest. Not merely do the trusts and other manufacturing trades that restrict their output for the home market more urgently require foreign markets, but they are also more anxious to secure protected markets, and this can only be achieved by extending the area of political rule. This is the essential significance of the recent change in American foreign policy as illustrated by the Spanish War, the Philippine annexation, the Panama policy, and the new application of the Monroe doctrine to the South American States. South America is needed as a preferential market for investment of trust ``profits'' and surplus trust products: if in time these states can be brought within a Zollverein under the suzerainty of the United States, the financial area of operations receives a notable accession. China as a field of railway enterprise and general industrial development already begins to loom large in the eyes of foresighted American business men; the growing trade in American cotton and other goods in that country will be a subordinate consideration to the expansion of the area for American investments. Diplomatic pressure, armed force, and, where desirable, seizure of territory for political control, will be engineered by the financial magnates who control the political destiny of America. The strong and expensive American navy now beginning to be built incidentally serves the purpose of affording profitable contracts to the shipbuilding and metal industries: its real meaning and use is to forward the aggressive political policy imposed upon the nation by the economic needs of the financial capitalists.

It should be clearly understood that this constant pressure to extend the area of markets is not a necessary implication of all forms of organized industry. If competition was displaced by combinations of a genuinely cooperative character in which the whole gain of improved economies passed, either to the workers in wages, or to large bodies of investors in dividends, the expansion of demand in the home markets would be so great as to give full employment to the productive powers of concentrated capital, and there would be no self-accumulating masses of profit expressing themselves in new credit and demanding external employment. It is the ``monopoly'' profits of trusts and combines, taken either in construction, financial operation, or industrial working, that form a gathering fund of self-accumulating credit whose possession by the financial class implies a contracted demand for commodities and a correspondingly restricted employment for capital in American industries. Within certain limits relief can be found by stimulation of the export trade under cover of a high protective tariff which forbids all interference with monopoly of the home markets. But it is extremely difficult for trusts adapted to the requirements of a profitable tied market at home to adjust their methods of free competition in the world markets upon a profitable basis of steady trading. Moreover, such a mode of expansion is only appropriate to certain manufacturing trusts: the owners of railroad, financial and other trusts must look always more to foreign investments for their surplus profits. This ever-growing need for fresh fields of investment for their profits is the great crux of the financial system, and threatens to dominate the future economics and the politics of the great Republic.

The financial economy of American capitalism exhibits in more dramatic shape a tendency common to the finance of all developed industrial nations. The large, easy flow of capital from Great Britain, Germany, Austria, France, etc., into South African or Australian mines, into Egyptian bonds, or the precarious securities of South American republics, attests the same general pressure which increases with every development of financial machinery and the more profitable control of that machinery by the class of professional financiers

The kind of way in which such conditions tend toward war might have been illustrated, if Mr. Hobson had been writing at a later date, by various more recent cases. A higher rate of interest is obtainable on enterprises in an undeveloped country than in a developed one, provided the risks connected with an unsettled government can be minimized. To minimize these risks the financiers call in the assistance of the military and naval forces of the country which they are momentarily asserting to be theirs. In order to have the support of public opinion in this demand they have recourse to the power of the Press.

The Press is the second great factor to which critics of capitalism point when they wish to prove that capitalism is the source of modern war. Since the running of a big newspaper requires a large capital, the proprietors of important organs necessarily belong to the capitalist class, and it will be a rare and exceptional event if they do not sympathize with their own class in opinion and outlook. They are able to decide what news the great mass of newspaper readers shall be allowed to have. They can actually falsify the news, or, without going so far as that, they can carefully select it, giving such items as will stimulate the passions which they desire to stimulate, and suppressing such items as would provide the antidote. In this way the picture of the world in the mind of the average newspaper reader is made to be not a true picture, but in the main that which suits the interests of capitalists. This is true in many directions, but above all in what con- cerns the relations between nations. The mass of the population of a country can be led to love or hate any other country at the will of the newspaper proprietors, which is often, directly or indirectly, influenced by the will of the great financiers. So long as enmity between England and Russia was desired, our newspapers were full of the cruel treatment meted out to Russian political prisoners, the oppression of Finland and Russian Poland, and other such topics. As soon as our foreign policy changed, these items disappeared from the more important newspapers, and we heard instead of the misdeeds of Germany. Most men are not sufficiently critical to be on their guard against such influences, and until they are, the power of the Press will remain.

Besides these two influences of capitalism in promoting war, there is another, much less emphasized by the critics of capitalism, but by no means less important: I mean the pugnacity which tends to be developed in men who have the habit of command. So long as capitalist society persists, an undue measure of power will be in the hands of those who have acquired wealth and influence through a great position in industry or finance. Such men are in the habit, in private life, of finding their will seldom questioned; they are surrounded by obsequious satellites and are not infrequently engaged in conflicts with Trade Unions. Among their friends and acquaintances are included those who hold high positions in government or administration, and these men equally are liable to become autocratic through the habit of giving orders. It used to be customary to speak of the ``governing classes,'' but nominal democracy has caused this phrase to go out of fashion. Nevertheless, it still retains much truth; there are still in any capitalist community those who command and those who as a rule obey. The outlook of these two classes is very different, though in a modern society there is a continuous gradation from the extreme of the one to the extreme of the other. The man who is accustomed to find submission to his will becomes indignant on the occasions when he finds opposition. Instinctively he is convinced that opposition is wicked and must be crushed. He is therefore much more willing than the average citizen to resort to war against his rivals. Accordingly we find, though, of course, with very notable exceptions, that in the main those who have most power are most warlike, and those who have least power are least disposed to hatred of foreign nations. This is one of the evils inseparable from the concentration of power. It will only be cured by the abolition of capitalism if the new system is one which allows very much less power to single individuals. It will not be cured by a system which substitutes the power of Ministers or officials for the power of capitalists This is one reason, additional to those mentioned in the preceding chapter, for desiring to see a diminution in the authority of the State.

Not only does the concentration of power tend to cause wars, but, equally, wars and the fear of them bring about the necessity for the concentration of power. So long as the community is exposed to sudden dangers, the possibility of quick decision is absolutely necessary to self-preservation. The cumbrous machinery of deliberative decisions by the people is impossible in a crisis, and therefore so long as crises are likely to occur, it is impossible to abolish the almost autocratic power of governments. In this case, as in most others, each of two correlative evils tends to perpetuate the other. The existence of men with the habit of power increases the risk of war, and the risk of war makes it impossible to establish a system where no man possesses great power.

So far we have been considering what is true in the contention that capitalism causes modern wars. It is time now to look at the other side, and to ask ourselves whether the abolition of capitalism would, by itself, be sufficient to prevent war.

I do not myself believe that this is the case. The outlook of both Socialists and Anarchists seems to me, in this respect as in some others, to be unduly divorced from the fundamental instincts of human nature. There were wars before there was capital- ism, and fighting is habitual among animals. The power of the Press in promoting war is entirely due to the fact that it is able to appeal to certain instincts. Man is naturally competitive, acquisitive, and, in a greater or less degree, pugnacious. When the Press tells him that so-and-so is his enemy, a whole set of instincts in him responds to the suggestion. It is natural to most men to suppose that they have enemies and to find a certain fulfillment of their nature when they embark upon a contest. What a man believes upon grossly insufficient evidence is an index to his desiresβ€”desires of which he himself is often unconscious. If a man is offered a fact which goes against his instincts, he will scrutinize it closely, and unless the evidence is overwhelming, he will refuse to believe it. If, on the other hand, he is offered something which affords a reason for acting in accordance with his instincts, he will accept it even on the slenderest evidence. The origin of myths is explained in this way, and much of what is currently believed in international affairs is no better than myth. Although capitalism affords in modern society the channel by which the instinct of pugnacity finds its outlet, there is reason to fear that, if this channel were closed, some other would be found, unless education and environment were so changed as enormously to diminish the strength of the competitive instinct. If an economic reorganization can effect this it may pro- vide a real safeguard against war, but if not, it is to be feared that the hopes of universal peace will prove delusive.

The abolition of capitalism might, and very likely would, greatly diminish the incentives to war which are derived from the Press and from the desire of finance to find new fields for investment in undeveloped countries, but those which are derived from the instinct of command and the impatience of opposition might remain, though perhaps in a less virulent form than at present. A democracy which has power is almost always more bellicose than one which is excluded from its due share in the government. The internationalism of Marx is based upon the assumption that the proletariat everywhere are oppressed by the ruling classes. The last words of the Communist Manifesto embody this ideaβ€”

Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win. Working men of all countries, unite!

So long as the proletarians have nothing to lose but their chains, it is not likely that their enmity will be directed against other proletarians. If the world had developed as

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