THE MARXIAN THEORY TESTED

Let us first remind ourselves shortly of the essential assumptions which it makes, the assumptions whose justi fication must be demonstrated if the hypothesis is to have validity. Broadly speaking there are two: firstly, the pressure of 'finance capital' operating through the mechanism of the export of capital; secondly, the inevita bility and the universality of this type of causation within the period, let us'say, since about 1870. Our task, therefore, is to discover whether, during this period, wars or the danger of war have actually been engendered by this mechanism and whether its operation has been sufficiently widespread to justify the claim that it has been all important. To do this is necessarily a somewhat difficult matter, demanding at all stages a broad feeling for evidence and a 4° THE MARXIAN THEORY TESTED strong sense of proportion. For, in the nature ofthings, we cannot hope to institute police court tests. We cannot call witnesses. We cannot even always examine all the docu ments. In any investigation of this sort we have to rely on a consensus of evidence which is necessarily fragmentary.

There is thus always a possibility that documents which have not been published, witnesses who have not left records, might provide information invalidating our con clusions. There must necessarily be an element of con jecture in all verifications of this sort. Realization of this, however, should not lead to a pedantic scepticism. We should not refuse to admit that a certain war was due to the pressure of high finance just because we cannot prove that Banker X (equipped with false beard) had secret confabulations with foreign minister Y at rendezvous Z. If there is a general body of evidence conducive to the belief that this kind of pressure was being applied, it would be absurd to deny the pro bability that that wa~ one of the causes, even though the day-to-day movemertts of the leading actors cannot be traced. We must not shirk the formulation of general conclusions because we do not know everything.

Similarly, we must be on our guard against rejecting the allegation of this kind of causation because of the dis covery that factors other than econornic have also been operative. It is quite true that Lenin and his followers were both propagandists and philosophers and sometimes stated their views in forms so extreme that one would imagine that there was nothing in any war but the machinations offinance capital. But to imagine that their main position can be refuted by the discovery of exceptions to this, is to take the task of verification too easily. It is very hard to be fair to communists, for they are seldom fair to anyone else. But if we are to examine their views 41 THE ECONOMIC CAUSES OF WAR with the desire, not to make debating points but to get at the truth, we ought surely to admit that these extreme formulations are simply propagandist simplifications. We must not assume that Lenin was unaware of the operation offactors other than that particular economic factor which he diagnosed as the main culprit. We must assume that he knew that factors such as mob patriotism, historical prejudice, personal ambitions and the like are to be found mixed up with the history of almost any war, but that it was his contention that such factors were subsidiary to the operations of finance capital and in many cases, perhaps, consequential on these operations. And, if we are to judge him fairly, we must ask, not whether there were never any exceptions to his most crudely worded claims, but rather whether his general sense of proportion is justified. We must try to verify the most reasonable formulations of the theory, not the soapbox simplifications.

2 Examplesof CapitalistImperialism It would be possible, I think, to make debating points regarding the role played in Lenin's detailed exposition by the peculiar concept of 'finance capital'. It was cer tainly not true, in the years before 1914, that the German banking system was at all typical of the systems prevailing in the other chief financial centres. In Great Britain, for instance, the capital exporter par excellence, the banks played little or no part in the conduct of industrial under takings; and what industrial monopoly there was owed little to financial manipulations. Finanzkapital, in the Hilferding sense, was a chiefly German phenomenon; and if we were to demand strict accuracy at all points, we should have to regard it as militating considerably against the universality of Lenin's theory that it leans so heavily on this concept.

THE MARXIAN THEORY TESTED But it would be wrong to press this point very far. For, if, in countries other than Germany, there was not·so much 'finance capital' as Lenin and Hilferding thought, there was certainly much capital export; and, in spite of much mystery mongering with 'finance capital', it is capital export which is really the central concept in the theory. If therefore for 'pressure of finance capital' we are content to write 'investment pressure' in general, the whole thing can be rephrased in terms of much greater plausibility. Investment capital in general includes 'finance capital'. Ifwe regard this part of the theory as substantially verified where we find investment pressure, whether or not this is exerted through the special Hilferding mechanism, we give it more of a chance than it would have if we insisted on the narrow interpretation. 1 Now it does not seem that there can be any doubt that, in certain cases, investment capital, in this wide sense, has played a major part in engendering diplomatic friction.

We can find many instances in which governments have been the instruments of finance or have acted consciously on behalf of financial interests; and in some cases, this has resulted in war or acute danger of war. Against the smug respectability of latter day 'economic advisers', wno would deprecate the suggestion that sectional interest can ever be sinister, the Marxian protest has abundant justification. A classical example of this type of situation is afforded by the Boer War. Of course it would be a gross over simplification to suggest that even here the process of causation was at all simple. It would be very silly to sug1 It would also be possible to make extensive criticisms of Lenin's general views concerning monopoly. It is not at all clear that the natural tendency of all types of industry is always towards monopoly. But to discuss this at any length would interrupt the main argument which relates to the export of capital. I have set out my own views on the subject in an essay entitled 'The Inevitability of Monopoly' which is printed in my Economic Basis of Class Conflict, pp. 45-80.

43 THE ECONOMIC CAUSES OF WAR gest that members of the British government were in the pay of the"big gold-mining interests who wished to over throw the Boer republic. We know, indeed, that the man whose policy did so much to make inevitable the final break, Alfred Milner, was a man of great integrity and public spirit, whose motives were much more influenced by the ideologies of empire and realpolitikwhich he had learned from German teachers, than by any particular regard for the capitalists of the Rand. It is doubtful whether even Rhodes, for all his financial interests, is to be regarded as predominantly out for gain; like many men who have made large fortunes rapidly when young, he was pos sessed in later life by grandiose visions of a quasi-religious nature which he was not unwilling to realize by harsh and unscrupulous means; and itis probable that in this instance, as in others, these were his main incentives. Moreover, large issues of state, unconnected with the position of the Uitlanders, were involved. The opening of the Delagoa railway was thought to menace the desired unification of South Africa. The rumours of a Boer plot, supported by a great continental power, mayor may not have been justified. But, given the position of the British in Africa, there can be no denying that the policy of Kruger must have been a cause for grave misgiving.

In spite of this, when every allowance has been made for these complications,it does not seem possible to deny that it was the investments on the Witwatersrand and the pressure from their owners which playe~ the leading role. The Jameson Raid mayor may not have been connived at by the British government. But it was planned by Rand capitalists; and the fact that it was so planned must be a central feature of any explanation of the relations between the Boer and the British governments in the period be tween the Raid and the final declaration of hostilities. 44 THE MARXIAN THEORY TESTED Moreover, when all due regard has been paid to the larger issuesinvolved in the negotiations concerning the Uitlander Franchise and the way in which these issues were con ceived by Chamberlain and Milner, the fact remains that the negotiations were concerned with the position and the interests of foreign investments and investors; and that if it had not been for these interests they would not have taken place at all. It is doubtful how far the position of the Rand interests corresponds to the ideal type of 'finance capital' as conceived by Lenin and Hilferding. But if would be sheer pedantry to make this an excuse for evad ing the conclusion that, taken by and large, the whole incident is an excellent example of the way in which pressure from foreign investors can lead to international war.!

This example is not isolated. Scrutiny of the diplomatic history of the last sixty years discloses many cases in which governments have acted on behalf of capitalists who have made investments in foreign countries and a number of cases in which such pressure has.. led to severe diplomatic friction and military action. German action in regard to Samoa, American action in regard to Haiti, British and German action in regard to Venezuela - such are cases in which, whatever the penumbra of other factors, the leading role of investment interest seems reasonably well authenticated. 2 In such cases we must surely agree that, sympathetically interpreted, this part of Lenin's theory does correspond with the facts. 1 Readers who are inclined to regard this as too one-sided an account are requested to postpone final judgment until chap. v) sect. 2) where an attempt is made to do justice to certain other aspects of the problem.

The literature of this subject is enormous. An excellent short account of the main issues involved is .given in LANGER, The Diplomacy of Imperialism, chaps. viii and xviii. 2 See STALEY, War and the Private Investor, especially chaps. v and vii. 45 THE ECONOMIC CAUSES OF WAR 3 Some AllegedCases FurtherExamined But Lenin's theory is not confined to the assertion that cases can be found in which the interests of investors have been the main cause of diplomatic friction. It asserts further that, in the period since capitalism has become 'mature', a mechanism of this sort has been the main cause of all, or at least a majority of international disputes and encounters. The peculiar characteristic of the theory is, not that it asserts that the pressure of capital exporters may sometimes lead to war - many others have recog nized that - but rather the claim that this is the typical situation. It would be unfair to argue that this contention would be invalidated if one or two exceptions could be found to this rule. But it is essential, ifit is to be established, that it should be shown to be usually applicable. It is essential that the tendencies, ofwhich the Boer War may be taken as a typical example, should be shown to be charac teristic of the majority of cases in this period.

In fact, however, this demonstration does not seem to be possible. The cases that are often claimed as examples of such tendencies show, on examination, characteristics of quite a different order. The part played by finance in the major diplomacy of the period preceding the Great War, proves to be in the main, quite different from that postulated by the theory. We find indeed that where the relations of strong capital-exporting and weak capital importing states are concerned, there governments have from time to time exerted pressure on behalf of investors. But where the relations of strong states are concerned, directly or indirectly, there the belief that the initiative comes from finance, or is exerted on behalf of finance, seems to rest upon misapprehension. Let us look further at a few of the cases which the exponents of this theory usually cite as evidence. 46 THE MARXIAN THEORY TESTED Perhaps the most outstanding of these is the Russo Japanese War of 1904. The interpretation commonly put forward is that the root cause of this conflict was the desire of the Russian government to safeguard the interests in certain Yalu timber estates of a group of investors in close touch with the Russian court. 'It was neither the Russian people nor the Russian bureaucracy which had deter mined to keep the Yalu district and to fight Japan for its possession,' says Mr. Brailsford. 'The resolution to possess it came from a little group of interested courtiers who were using the natural resources to further their private financial ends. 1 This view, however, is not tenable. The researches of Professor Langer have brought to light information which to all candid minds must compel a conclusion almost exactly the opposite to that which is reached by the advo cates of the theory of economic imperialism. 2 It is quite true that a group of courtiers were actively engaged in promoting a belligerent policy. It is quite true that they owned concessions in the Yalu area. But it is not true that their motives were economic. It is abundantly clear that the economic interest was a mere blind. There is in existence a document drawn up by the promoters of the enterprise in which the whole plan is set forth. It was de sired to prevent concessions in this area coming into the hands of international syndicates on the ground that that would involve a fatal curtailment .of Russian political ambitions. An East Asiatic company was to be set up, not aiming at immediate dividends, which should 'render a service to the tsar', foreign capital being perhaps admitted as a screen. A 'fighting vanguard disguised as lumbermen' 1 H. N. BRAILSFORD, The War of Steel and Gold, 9th edition, pp. 5I -2.

2 Europaische Gespriiche, Hamburg, IV (June 1926), pp. 279-322. See also STALEY, op. cit., pp. 55-62. Throughout the whole of this section I have drawn very heavily upon Mr. Staley's invaluable book. 47 THE ECONOMIC CAUSES OF WAR were to be deployed on the concessions on the pretence of economic exploitation. This in fact is what happened. In the face of the opposi tion of Witte and the moderates, the extremist groups suc ceeded in obtaining the support of no less a person than the Tsar himself. Two million roubles were appropriated from secret service money to assist the mock undertaking. Military roads were constructed and barracks disguised as timber warehouses ,,,,ere erected. 'An American who visited the scene ... wrote that the one hundred Russians' who were supervising the activities of the labourers, 'with one or two exceptions were all military men.' 1 It is not surprising that it was not long before warfare began between the Japanese and the Russian timbermen.

Thus the pressure of investment capital proves in this case to have been a pure disguise for the operations of mystical Russian imperialism. A somewhat similar case is presented by the history of the Turco-Italian War of 1911-12. Here again it is com monly asserted that a war was caused by the intervention of a government on behalf of investment capital - in this case the Banco di Roma. Here again, on examination, the actual relation involved between government and finance proves to be more or less exactly the opposite to what is commonly asserted. Mr. Staley, who has examined this case in detail, has no difficulty in showing that the annexa tion of Tripoli was projected by Italian statesmen long before the Banco di Roma had anything to do with the country. He shows too that the bank's decision to go at all was the result of an incentive offered by the Italian government, the privilege of rediscount facilities at the bank of Italy, and that it received further compensation in the shape of a subsidy to its navigation service. There 1 STALEY, Ope cit., p. 61.

48 THE MARXIAN THEORY TESTED was no lack of opening for surplus capital in Italy; and investments in Tripoli were subject to considerable risks for very poor returns. It is clear that, as in the case of the Yalu concessions, the economic interest created by the financial operations were merely a screen for political ambitions having little or no connection with the returns in which high finance is interested. The Italian govern ment was anxious to find some offset to the loss of prestige which it had experienced at the battle of Adowa; and the occupation of Tripoli, facilitated by bargains with the French arising from the Morocco dispute, offered a suit able opportunity. That, once it was installed, the bank was not loath to claim the full measure of support which had been promised it and that it was even at pains to arouse public opinion in its favour, is a minor complica tion. In the inception of the enterprise and· in the part played subsequently the role offinance was essentially that of agent.

Another famous example is the case of the Bagdad rail way concessions. Disputes about these never actually led to war. But, in that type ofliterature which is apt to attribute the outbreak of wars in general to the operations of sinister interest, the whole episode has always loomed large as an example of the way in which the struggles of high finance for spheres of influence exacerbated international relations and prevented the sort of agreement which might have avoided the catastrophe of the Great War. Now the complications of this dispute are endless and the motives involved are much more difficult to disentangle than in the instances we have already examined. l Per haps we ought to begin by stating clearly that, at certain junctures, pressure from people with economic 1 The whole episode is treated at length in EARLE, Turkey, the Great Powers and the Bagdad Railway. For the earlier incidents the chapters in LANGER'S Diplomacy of Imperialism are very helpful.

49 THE ECONOMIC CAUSES OF WAR interests was actually attempted. Certainly, during the time when British public opinion was most interested in the question, propaganda on behalf of the Lynch Brothers, whose navigation rights on the Euphrates were said to be menaced, was very active and vociferous. It is extremely doubtful how far the attitude of the British Foreign Office was ever influenced by all this; the evidence points in the other direction. But discussion in the House of Commons definitely paid attention to these claims. Nevertheless, to suggest that the main course of the dis pute arose from the pressure of economic interests is to lose all sense both offact and perspective. It is well known that the German bankers originally involved were highly re luctant to apply for the concessions and only proceeded to do so after strong pressure from the German government. It is established, too, that they were very willing to admit the participation of capital from other centres. And on the British side, it is notorious that the financiers interested were willing again and again to settle with the Germans and indeed had to be held back from doing so by pressure from the Foreign Office. Years before the foreign offices had adjusted their differences, the international bankers were in agreement.

As a matter of fact, the more one examines the history of this episode, the clearer it becomes that, although the dispute involved concessions which were essentially economic in character, the underlying motives of the governments concerned were predominantly diplomatic and strategic. The Russian objections tq the German con cessions were clearly of this order. No damage to Russian financial interests was conceivable from the development of Asia Minor and the Euphrates valley. The French motives are less clear. It is very probable that regard was paid to the interests of the French capital already invested 50 THE MARXIAN THEORY TESTED in Turkey; it would not be at all surprising to find direct evidence of this. But diplomatic support of Russia seems also to have been an important motive; the French atti tude here can only be thoroughly understood in the light of the general history of the development of the Russian Alliance. As for the British attitude, there can be little doubt that the main consideration was regard for the safety of communications with the East. The British Foreign Office was at first disposed to let the thing go through.

But growing distrust of German ambitions, a distrust be it noted which finds justification in material which has since been published, 1 led to a change of view. It was not from a desire to forward the interests of British finance but to safeguard our position in the East that the Kaiser was given to understand that our objections would be waived if the section from Bagdad to Basra were in British hands. Whether, here as elsewhere, there were economic motives of a more general nature involved in all this diplomatic manceuvre is a question to which we shall have to return later. But there is little primafacie evidence which gives countenance to the Leninist hypothesis. Finally, we may glance at the Morocco episode and the part said to be played by the Mannesmann interests. Here again we have an incident of critical importance in the diplomatic history leading up to the Great War, where it has become customary to allege that it was all due to the pressure of investment capital seeking profitable outlets abroad. 2 • 1 In the Willy-Nicky correspondence there is a letter from the Kaiser, written during the -Boer War, in which he regrets that the railway had not yet been completed, since it would have 'offered the opportunity of despatching a few regiments from Odessa straight down to Koweet'.

2 There is an excellent examination of the part played by the Mannesmanns in Mr. STALEY'S book, op. cit., pp. 178 and 194. For a more general view of the whole Morocco friction, see SPENDER, Fifty Years of Europe, chap. xxxiii.

THE ECONOMIC CAUSES OF WAR In this case it is well known that there was an exten sive and influential agitation in Germany urging the governmen t to take action to secure the operation of the concessions which, it was said, had been granted by the Sultan of Morocco to the representative of the Mannes mann firm. It is clear that this agitation played a part in poisoning good relations between the German and French governments and that the obstinacy of the Mannes manns imposed difficulty after difficulty upon all who attempted to play the role of peacemakers. It is true that it has been urged in defence of the Mannesmanns that at first they were promised support by a German consul, and it may very well be that they had some genuine grievance. But it is established beyond doubt that they attempted to use governmental aid to forward their own interests and this in an area where international tension was already so great that the least friction was liable to set the whole diplomatic edifice alight. On any liberal or international socialist theory of correct behaviour in economic relation ships, their activities were mischievous and dangerous.

But before we conclude from this that the Mannes manns' agitation occupies a central place in the history of the diplomacy of the period and that it furnishes an in stance in anyway typical for the Leninist theory, there are two not unimportant points to note. In the first place, the Agadir crisis was nothing to do with the Mannesmanns. Apologies are perhaps due to people of good general education for mentioning this obvious fact; but we must not take much for granted nowa days. The Agadir crisis arose because the French pro posed to take action agai~nst the local Sultan and the Ger mans were anxious to secure compensating concessions elsewhere. Conversations to this end had already been opened on a more or less friendly basis, when by one of 52 THE MARXIAN THEORY TESTED those flashes of psychological insight so characteristic of German diplomacy, it occurred to Kiderlen-Waechter, the German minister involved, that it would facilitate matters if a gunboat were dispatched to Morocco. The whole thing was an obvious blunder on Kiderlen's part and need never have taken place had the negotiations been in the hands of anyone of even ordinary diplomatic finesse. In any case, the German objective was a slice of the Congo.

The Mannesmann.s were simply not in the picture. Secondly, in so far asthe Mannesmann agitation was a general cause of friction, it is to be observed that it was no affair of high finance. High finance in Germany was indeed scared stiff of Morocco. 'As soon as you l mention Morocco', said a German secretary for foreign affairs, 'the banks all go on strike, every manjack of them.' The sup porters of the Mannesmanns were, not the leaders of Ger man finance, but Pan-German politicians-Navy League men, Junker reactionaries, romantic colonial enthusiasts. The Mannesmanns had indeed a clear economic in terest. But, save in the case of the armament manu facturers subscribing to the Navy League,l the economic interest of their supporters, if they had an economic interest at all, was of a kind not disclosed by any analysis we have yet had occasion to examine. 1 It is fairly generally accepted that for obvious reasons German armament manufacturers were heavy subscribers to the various militarist ideological organizations. But only those who know nothing of pre-war Germany will regard this as the moving impulse of these bodies. To ascribe the militarism of Wilhelmi an Germany to the activities of arma ment manufacturers is about as sensible as to ascribe the National Socialism of Hitler to the industrialists who were silly enough to subscribe to party funds. Speaking generally, the influence of armament manu facturers in the causation of war has been enormously exaggerated.

From time to time, certain groups may have succeeded in increasing the demand for their products. But to attribute the main demand to such influences is to lose all sense of probability and history. Governments which have relied upon state arsenals have not been more pacific than others. 53 THE ECONOMIC CAUSES OF WAR 4 Finance and Diplomacyin the Modern Period Examples of this sort - and it would be very easy to multiply them extensively - are not merely interesting in themselves as outstanding cases where-the communist writers misapprehend the actual facts, they also illustrate in various ways a relationship between governments and investors, which in the period under examination seems much more typical than that which is postulated by Lenin. For, if we take a broad view of the main current of international relations in the period between 1870 and 1914, we find indeed that finance plays a not inconsider able role. 1 But the nature of this role is almost precisely the reverse of that which we should expect from Marxian theory. In the relations, either direct or indirect, between strong states there is hardly any evidence of the influence of finance being used in a direction conducive to friction or war. There is hardly any evidence that high finance was an initiating factor in the complicated manreuvres of balance-of-power diplomacy. The one case which might at first sight be interpreted as an exception to this rule is British policy in regard to Egypt. But, as we shall note in the next chapter, even here there are other much more convincing explanations.

Against this absence of evidence of an active role on the part of high finance, there is abundant evidence of passive instrumentality. We do not find evidence that finance ,vas often a prime mover. But there is plenty of evidence that finance was continually used as a pawn. This is perhaps not very conspicuous in the English scene where finance was usually more or less left to its own devices; although even here we have had occasion to observe the veto 1 On all this see VINER, International Finance and Balance of Power Diplomacy, 1880-1914, 'The South-western Political and Social Science Quarterly', vol. IX, No. 4, March 1929. FEIS Europe the World's Banker should also be consulted. 54 THE MARXIAN THEORY TESTED imposed by the government in regard to the Bagdad railways. But, in Germany and France, government control of inve~tment for diplomatic purposes was the usual thing. In the thrust and parry of balance-of-power diplomacy, the use of the financial weapon was taken as a matter of course.

Thus again and again we find instances of governments interfering to prevent the flow of capital going in a certain direction. The beginnings of the Franco-Russian rapproche ment of the nineties, for instance, are to be traced, at least in part, to the veto imposed by Bismarck on loans to Russia from Germany. Similarly, at different times, for obvious diplomatic reasons, we find vetoes being imposed in Paris on lending to Italian and Central European enterprise. If it had not been for these vetoes, capital export would have taken these directions. The interests of finance, that is to say, lay in one direction; the interests ofgovernment in another. Again we continually find governments actively pro moting loans that would not otherwise have been made, in order to cement, or to forward, political alliances or ententes. We have already seen examples of this when examining Italian penetration in Tripoli and German ex ploitation of Asia Minor. The classical case, of course, is the case· of the French loans to Russia. The Russian military railways were built by the savings of the French peasantry. There is no reason at all to suppose that French investment in Russia would have been on anything like the scale it actually assumed, had it not been for direct governmental encouragement. Similarly, at different times, we find Italy, now being wooed by German money, now being wooed by French. Again and again we hear of episodes where, before anything could be done by way of loans, appeals had to be made to the 'patriotism' of the 55 THE ECONOMIC CAUSES OF WAR local financial interests - perhaps not so difficult a virtue to exercise when disposing of other people's money.

'In all these transactions', says Professor Viner,l con cluding his magisterial survey, 'the bankers seem to have been the passive and, in some cases, unwilling instruments of the diplomatists ... Bankers rarely favour an aggressive policy towards powerful adversaries or even towards weaker countries if the latter have powerful friends. Whatever their attitude toward weak and friendless coun tries, in the diplomacy of the great powers they are a pacific influence. For the claim sometimes made that they exercised a controlling influence over pre-war diplomacy, the available source material offers not the slightest degree of support.' Finally, we may make two general observations, which seem highly germane to any examination of the theory that imperialist expansion and international conflict are essentially the product of the struggles of finance to avoid a declining rate of profit. On the one hand, there were areas of highly developed capitalism such as Holland, Switzerland and Scandinavia, which played no part whatever in the expansionist game.

Of course there were obvious reasons why, by themselves, these countries would have been unable to play the game to much purpose. But if, as the Leninist theory alleges, the mechanism of the state is the willing instrument of finance capital, there is no reason why they should not have allied themselves with other more powerful allies to join in predatory enterprise. Capital was just as subject to the tendency to a declining rate ofprofit, in these countries, as elsewhere. Yet in fact they maintained a rigid non expansionist neutrality. On the other hand, two at least of the governments who lOp. cit., p. 45. 56 THE MARXIAN THEORY TESTED were most conspicuous in the expansionist movement, were the governments of countries which were definitely borrow ing areas. During the whole of this period, Russia and Italy were large importers of capital. Russian expansion was financed, first by German, then by French, money.

Italy's share in the Bagdad Railway had to be taken up by Greek bankers. There can be no question in either of these cases of surplus capital unable to find profitable investment at home. Yet in both cases imperialist expansion was an extraordinarily active force. There is something here not accounted for by Lenin's theory. 5 The InadequaC:}of the Leninist Theory The conclusion of our investigation is unmistakable. It is quite probable that in many cases our survey is guilty of errors .of emphasis and perspective. But unless the evidence of years of disinterested research on the part of the various authorities we have used is to be dismissed as hopelessly inaccurate and biased, the conclusion is surely established that the theory which we have examined does not stand up to. the test of fact. There have been cases where the influence of investors and financiers has been, roughly speaking, as postulated by that theory. Any full survey of the facts must not leave these cases out of sight.

But, in the main perspective, these cases are the exception. The more typical cases show other relationships not ac counted for by this theory. There is no convincing evidence that it was the struggles offinance capital or the machina tions of general investors which were responsible for the outbreak of the Great War. And indeed, as one reads the literature of the theories of economic imperialism, one is sometimes tempted to ask whether its authors have ever so much as seen an animal of the species, banker. The picture drawn seems so differ57 THE ECONOMIC CAUSES OF WAR ent, the psychological attitude assumed so unlike anything that can normally be witnessed in the circles of high finance, that one feels that one has walked through the looking-glass into a world in which all one's usual esti mates of men and the way they move have gone completel y topsy-turvy. 'Does anyone seriously suppose', asks Mr.

Hobson (seriously), 'that a great war could be undertaken by any European State, or a great state loan subscribed, if the house of Rothschild and its connections set their face against it?' 1 To which one can only answer, ruefully, that many people might seriously suppose it. In fact the verdict of those who have known the financier best has always been in the opposite direction. Mr. Asquith's contemptuous description of the city magnates on the outbreak of the Great War is well known. Equally decisive and equally damaging to the assumptions of the Marxian theory is the judgment of Wolf-Metternich expressed, not in an utterance intended for public con sumption, but in a confidential dispatch to von Bulow. 'High finance shakes its knees whenever any kind of political complications crop up'. 2 No doubt there have been financiers of a different moral calibre. But it has yet to be shown that they were anything but exceptions to the general run of their kind.

But what are we to conclude from all this? Are we to resign ourselves to the view that, save in the case of certain colonial expeditions, economic factors have played no part recently in the causation of diplomatic friction and war? Are we to conclude that it has been all just a question of high politics and that there is nothing more in it than that? This does not follow at all. All that we have discovered I1mperialism, 2nd edition, p. 57. 2 Quoted by KANTOROWITZ, The Spirit of English Pol£cy, p. 378. 58 THE MARXIAN THEORY TESTED so far is that the communist theory is unacceptable. 1 What we have now to do is to see whether it is not possible to construct a theory which provides a more satisfactory explanation of the facts. 1 It is amusing to note that, with the conclusion of their non-aggression pact with the Soviet, something like this theory has been taken over by the Nazis. A Nazi journal is quoted by the Daily Telegraph (September 29th, 1939) as saying that the German army has now only one enemy, 'namely the British capitalist', who presumably, on true-blue Leninist lines, is to be conceived as aiming at the enhancement of monopoly profits by the destruction of German industry. Poor British capitalist, the only way in which history is likely to find him guilty for the present catastrophe is that, being rather stupid and very pacific, he failed to support effective action before the gangsters were strong enough to strike.

59 CHAPTER IV THE ECONOMIC CAUSES OF WAR' I NationalPower and Economic Factors OUR researches thus far have had a negative outcome. We have surveyed the underconsumptionist versions of the communist theory of imperialism and found that they were either logically defective or that they did not prove their main contention. We have examined the Leninist theory that, in the most recent period of capitalism, war has been due to the activities of finance or investment capital and we have found that, although cases of this sort can be found, they are the exception rather than the rule. In the majority of cases, finance capital, if it has played a role at all, seems to have been instrument rather than impulse. It is now time to proceed to something more positive, to attempt to construct a theory more in harmony with correct economic analysis and with the facts. 1 Let us start from the most obvious phenomena of inter national relations - diplomatic manceuvres, ententes, alliances, war. It is easy to see that, in their most general aspect, all these can be conceived as part of a perpetual struggle for power - a struggle either to conserve power or to increase it. Whatever view we may hold concerning the ultimate raison d'etre of power, we can all agree that, in the day-to-day conduct of international relations, itis in terms of efforts to achieve this proximate end that most of the activities of the agents immediately concerned can' 1 Certain features of the theory here developed are to be found in my Economic Planning and International Order, and in an essay on 'The Economics of Territorial Sovereignty', reprinted in my Economic Basis of Class Conflict.