(Considers the efforts of capitalism to save itself by marketing its surplus products abroad, and what results from these efforts.) If our analysis of present-day society is correct, we have the enormous populations of the modern industrial countries, living always on the verge of starvation, their chance for survival depending at all times upon the ability of their employers to find a profitable market for a surplus of goods. At first the employer seeks that market at home; but when the home markets are glutted, he goes abroad; and so develops the phenomenon of foreign trade and rivalry for foreign trade, as the basic fact of capitalism, and the fundamental cause of modern war.
Let us get clear a simple distinction concerning foreign trade. There is a kind of trade which is normal, and would thrive in a "free" society. In the United States we can produce nearly all the necessities of life, but there are a few which we cannot produce—rubber, for example, and bananas, and good music. These things we wish to import. We buy them from other countries, and incur a debt, which we pay with products which the other countries need from us; wheat, for example, and copper, and moving pictures with cowboys in them. This is equal exchange, and a natural phenomenon. A "free" society would produce such surplus goods as were necessary to procure the foreign products that it desired. When it had produced that much, the workers would stop and take a vacation until they wanted more foreign products.
But under capitalism we have an entirely different condition—we produce a surplus of goods which we have to sell in order to keep our factories running, and to keep our working population from starving. And note that it does not help us to get back an equal quantity of foreign goods in exchange. We must have what we call "a favorable balance"; that is, we must have other people going into debt to us, so that we can be continually shipping out more goods than we take back; continually piling up credits which we can "negotiate," or turn into cash, so that we can go on and repeat the process of making more goods, selling them for more profits, and putting the surplus into the form of more machinery, to make still more goods and still more profits.
And then, after a while, we come upon this embarrassing phenomenon; nations which buy and do not sell must either do it by sending us gold, or by our giving them credit. The sending of gold cannot go on indefinitely, because then we should have all the gold, and if other nations had none that would destroy their credit. On the other hand, business cannot be done by credit indefinitely; for the very essence of credit is a promise to pay, and payment can only be made in goods, and how can we take the goods without ruining our own industry?
Fifteen years ago I pointed this out in a book. The argument was irrefutable, and the conclusion inescapable, but the few critics who noted it repeated their usual formula about "dreamers and theorists." Now, however, the business mills have ground on, and what was theory has become fact before our eyes. We have trusted the nations of Europe for some $10,000,000,000 worth of goods, and they are powerless to pay, and if they did pay, they would bankrupt American industry. France wishes to collect an enormous indemnity from Germany, but nobody can figure out how this indemnity can be paid without ruining French industry. The French have demanded coal from Germany, and have got more than they can use, and are "dumping" it in Belgium and Holland, with the result that the British coal industry is ruined. The French clamor that the Germans must pay for the destruction they wrought in Northern France, and the Germans offer to send German workmen to rebuild the ruined towns; but the French denounce this as an insult—it would deprive French workingmen of their jobs! So I might continue for pages, pointing out the manifold absurdities which result from a system of industry for the profit of a few, instead of for the use of all.
Ever since I first began to read the newspapers, some twenty-five or thirty years ago, all our political life has been nothing but the convulsions of a social body tortured by the constricting ring of the profit system. Everywhere one group struggling for advantage over another group, and politicians engaged in playing one interest against another interest! My boyhood recollections of public life consist of campaign slogans having to do wi............