nvesting classes find it all good
and sanctified by its results. The exportation of capital, they hold,
not only fructifies the waste places of the world but does not decrease
the capital in the exporting country, since it raises the rate of
interest and thus stimulates saving. But such a rise in the interest
rate means an increase in the cost of living and a reduction in the
real wages of labour. In so far as it goes into competitive industrial
enterprises abroad, it lessens the opportunity of labour at home. Thus
if British capital, exported to India, is used to erect cotton mills in
Calcutta, India will import fewer cotton goods from England, and
British capital will be employing {133} Indian labour and throwing
British labour out of employment. This situation is analogous to that
which was created when Northern textile manufacturers, instead of
increasing their New England plants, built mills in Georgia, thus
transferring the demand for employment from the North to the South.

It is further contended by these opponents of imperialism that the
export of capital is profoundly demoralising to the exporting nation,
which ceases, in a real sense, to be industrial, and becomes financial.
Gradually the nation, with a large fixed income derived from foreign
labour, ceases to care for its export industry, loses its intensity and
keen application to business, becomes conservative in the technique of
production, and, being no longer interested in the development of home
industries (since its gains come from abroad), converts hundreds of
thousands of industrial wage-earners into liveried house-servants, who
minister to the cultivated wants of a sport-loving and decoratively
idle upper class.

The effect of this development upon England, the classic land of
capital export, is portrayed in an acute study by Dr.
Schulze-Gaevernitz.[4] The author shows how the steadily mounting
income derived by Great Britain from foreign investments has led to a
relative restriction of the field of employment in home manufacturing
industries. In 1851 23 per cent. of the population of England and
Wales were workers in the chief industries as compared with only 15 per
cent. a half century later.[5] Imports increase; exports do not
increase proportionately. An ever larger proportion of the population
becomes rentiers, {134} "living on the sweat of coloured labour, whom
it is their first interest to hold in political subjection." Some of
t