classes within the arena of international friction
may evoke a struggle, which can have no other issue than war.

This is exactly the effect, for example, of a gross inequality of
wealth and income. Such an inequality means that multi-millionaires,
gaining far more than they can spend, are impelled to invest their
surplus funds in outside ventures. The capital that can be profitably
absorbed by industries manufacturing for home consumption depends upon
the ability of the population to purchase food, clothes, houses,
furniture, watches, and automobiles. If the population cannot or will
not increase purchases at a rate commensurate with the increase of
national savings, a vast capital must either be diverted to
manufacturing for the export trade or must itself be exported. Neither
of these deflections is in itself bad; in moderation, both are good.
There is, however, a certain degree of intensity of competition for
foreign trade and investment which means industrial war and the danger
of military war. The wider the interval between {187} national savings
and national consumption, the more powerful and dangerous is this
expulsive tendency of capital.

Such a tendency may arise in a country in which, despite an equality in
wealth, the national savings are excessive, but the greatest danger is
in countries in which the returns to capital, rent and business
enterprise are large and the returns to labour small. The big profits
come from the manufacture of articles of common use, and the home
demand for such articles is limited by the consuming capacity of poor
men. The surplus capital must therefore find a vent, and the larger
this surplus capital, the more venturesome it grows and the more
insistently it demands that the state back up its enterprises.

We may trace this development in the recent history of Great Britain.
Though British wages rose during the half century ending in 1900, the
consuming capacity of the masses was not sufficient to employ the
rapidly expanding capital. British capital went everywhere; among
other places to the Transvaal. There was more money in "Kaffirs" than
in making socks for the British artisan, and if international friction
resulted from this capital export, it was all the better, or at least
none the worse, for the financiers. The men who controlled the Rand
mines knew when shares were to rise and when they were to fall, and
profited by their knowledge. Nor were war preparations