Empire.The following, which appeared in the London Daily Mail in reply to an article in that paper, throws some further light on the points elaborated in this chapter. The Daily Mail critic had placed Alsace-Lorraine as an asset in the German conquest worth $330,000,000 "cash value," and added: "If Alsace-Lorraine had remained French, it would have yielded, at the present rate of French taxation, a revenue of $40,000,000 a year to the State. That revenue is lost to France, and is placed at the disposal of Germany."
To which I replied:
Thus, if we take the interest of the "cash value" at the present price of money in Germany, Alsace-Lorraine should be worth to the Germans about $15,000,000 a year. If we take the other figure, $40,000,000. Suppose we split the difference, and take, say, 20. Now, if the Germans are enriched by 20 millions a year--if Alsace-Lorraine is really worth that income to the German people-- how much should the English people draw from their "possessions"? On the basis of population, somewhere in the region of
$5,000,000,000; on the basis of area, still more--enough not only to pay all English taxes, wipe out the National Debt, support the
army and navy, but give every family in the land a fat income into the bargain. There is evidently something wrong.
Does not my critic really see that this whole notion of national possessions benefiting the individual is founded[Pg 46] on mystification, upon an illusion? Germany conquered France and annexed Alsace-Lorraine. The "Germans" consequently "own" it, and enrich themselves with this newly acquired wealth. That is my critic's view, as it is the view of most European statesmen; and it is all false. Alsace-Lorraine is owned by its inhabitants, and nobody else; and Germany, with all her ruthlessness, has not been able to dispossess them, as is proved by the fact that the matricular contribution (matrikularbeitrag) of the newly acquired State to the Imperial treasury (which incidentally is neither 15 millions nor 40, but just over five) is fixed on exactly the same scale as that of the other States of the
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Empire. Prussia, the conqueror, pays per capita just as much as and no less than Alsace, the conquered, who, if she were not paying this $5,600,000 to Germany, would be paying it--or, according to my critic, a much larger sum--to France; and if Germany did not "own" Alsace-Lorraine, she would be relieved of charges that amount not to five but many more millions. The change of "ownership" does not therefore of itself change the money position (which is what we are now discussing) of either owner or owned.
In examining, in the last article on this matter, my critic's balance-sheet, I remarked that were his figures as complete as they are absurdly incomplete and misleading, I should still have been unimpressed. We all know that very marvellous results are possible with figures; but one can generally find some simple fact which puts them to the supreme test without undue mathematics. I do not know whether it has ever happened to my critic, as it has happened to me, while watching the gambling in the casino of a Continental watering resort, to have a financial genius present weird columns of figures, which demonstrate conclusively, irrefragably, that by the system[Pg 47] which they embody one can break the bank and win a million. I have never examined these figures, and never shall,
for this reason: the genius in question is prepared to sell his wonderful secret for twenty francs. Now, in the face of that fact I am not interested in his figures. If they were worth examination they would not be for sale.
And so in this matter there are certain test facts which upset the adroitest statistical legerdemain. Though, really, the fallacy which regards an addition of territory as an addition of wealth to the "owning" nation is a very much simpler matter than the fallacies lying behind gambling systems, which are bound up with the laws of chance and the law of averages and much else that philosophers
will quarrel about till the end of time. It requires an exceptional mathematical brain to refute those fallacies, whereas the one we are dealing with is due simply to the difficulty experienced by most of us in carrying in our heads two facts at the same time. It is so much easier to seize on one fact and forget the other. Thus we realize that when Germany has conquered Alsace-Lorraine she has "captured" a province worth, "cash value," in my critic's phrase, $330,000,000. What we overlook is that Germany has also captured the people who own the property and who continue to own it. We have multiplied by x, it is true, but we have overlooked the fact that we have had to divide by x, and that the result is consequently, so far as the individual is concerned, exactly what it was before. My critic remembered the multiplication all right, but he forgot the division. Let us apply the test fact. If a great country benefits every time it annexes a province, and her people are the richer for the widened territory, the small nations ought to be immeasurably poorer than the great, instead[Pg 48] of which, by every test which you like to apply--public credit, amounts in savings banks, standard of living, social progress, general well-being--citizens of small States are, other things being equal, as well off as, or better off than, the citizens of great States. The citizens of countries like Holland, Belgium, Denmark, Sweden, Norway are, by every possible test, just as well off as the citizens of countries like Germany, Austria, or Russia. These are the facts which are so much more potent than any theory. If it is true that a country benefits by the acquisition of territory, and widened territory means general well-being, why do the facts so eternally deny it? There is something wrong with the theory.
In every civilized State, revenues which are drawn from a territory are expended on that territory, and there is no process known to modern government by which wealth may first be drawn from a territory into the treasury and then be redistributed with a profit to the individuals who have contributed it, or to others. It would be just as reasonable to say that the citizens of London are richer than the citizens of Birmingham because London has a richer treasury; or that Londoners would become richer if the London County Council were to annex the county of Hertford; as to say that people's wealth varies according to the size of the administrative area which they inhabit. The whole thing is, as I have called it, an optical illusion, due to the hypnotism of an obsolete terminology. Just
as poverty may be greater in the large city than in the small one, and taxation heavier, so the citizens of a great State may be poorer than the citizens of a small one, as they very often are. Modern government is mainly, and tends to become entirely, a matter of administration. A mere jugglery[Pg 49] with the administrative entities, the absorption of small States into large ones, or the breaking up of large States into small, is not of itself going to affect the matter one way or the other.
[Pg 50] CHAPTER IV
THE IMPOSSIBILITY OF CONFISCATION
Our present terminology of international politics an historical survival--Wherein modern conditions differ from ancient--The profound change effected by Division of Labor--The delicate interdependence of international finance--Attila and the Kaiser--What would happen if a German invader looted the Bank of England--German trade dependent upon English credit--Confiscation of
an enemy's property an economic impossibility under modern conditions--Intangibility of a community's wealth. During the Victorian Jubilee procession an English beggar was heard to say:
I own Australia, Canada, New Zealand, India, Burmah, and the Islands of the Far Pacific; and I am starving for want of a crust of
bread. I am a citizen of the greatest Power of the modern world, and all people should bow to my greatness. And yesterday I cringed
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for alms to a negro savage, who repulsed me with disgust. What is the meaning of this?
The meaning is that, as very frequently happens in the history of ideas, our terminology is a survival of conditions no longer existing, and our mental conceptions[Pg 51] follow at the tail of our vocabulary. International politics are still dominated by terms applicable to conditions which the processes of modern life have altogether abolished.
