Karl Kautsky - Germany, England and the WorldPolicy

7/27/2019 Karl Kautsky - Germany, England and the World Policy

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Karl Kautsky

Germany, England and the WorldPolicy

(1900/1901)

Source: From The Social Democrat, 1900, Vol.4, No.8, August 1900, pp.230-36, the monthly

journal of the Social Democratic Federation which ran from 1897-1911.

Translation: From Vorwrts, 8th and 10th 1900.

Transcribed by: Ted Crawford, January 2003.

I feel that at a time when the problem of Imperialism has assumed so pressing a character the

following article, which appeared in, under the above title, will be, on account of itsdispassionate tone and the thoroughness of its analysis, of especial interest to comrades in

England.

J.B. Askew

The article commences by pointing out how, for some time past, the German and Englishcapitalist press has been exciting public opinion in both countries the one against the other, and

to show the manner in which leading events ofthe pastyear have been manipulated as it suited

the purposes of the press, it takes on the one side the Times, the Observer, and the Daily Mail,

and, on the other papers like the Rhine-Westphalian Times and the Hamburg News and otherpapers of a like calibre, as having especially distinguished themselves in this respect.

As regards the attitude of the two Governments, while on both sides expressions have been let

fall which were calculated to wound susceptibilities on the other side, the Governments have

been more driven than driving. Neither the Chamberlain-Salisbury Government nor the GermanForeign Office would dare, out of respect for the important commercial and other interests at

stake, to push matters too far. In the matter, for example, of the seizure of the German mail

steamers, the English Government only consented to this after those Hotspurs of the Englishpress, the Times and Daily Mail, had published long accounts of German officers taking part in

the Boer War, and of the smuggling of contraband of war through Delagoa Bay. In the same way

the German Government, in spite of concessions to the desires of the colonial enthusiasts, triedto remain on friendly relations with Great Britain, as her conduct in the Samoa affair and during

the discussions over the seizure of the steamers, and her attitude towards the various attempts at

an anti-English intervention in the South African War, show. The writer points out, in oppositionto the emotional policy of four years ago, when the Kaiser sent the famous telegram to Kruger,

how little to the liking of the German Government is the recent anti-English tone of the capitalist

newspapers, and that the inspired press today dwell on the interest of France in the estrangement

of Germany and England. If, nevertheless, in putting forward the navy proposals, the rivalry of


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England and her capture of German vessels were utilised, that was only because they had no

other grounds to go upon which would appeal to the capitalist and small middle classes. With the

best will in the world, they could not found their fleet requirements on the success of Russia inCentral Asia, or the French colonial policy in Madagascar. At all events, the relative strength or

weakness of France or Russia lends itself to new military proposals, and certainly, as on previous

occasions, so during the discussions on the next military proposals, the French or Russian dangerwill be held up as the reason for them; but as a reason for increasing the fleet it would have been

absurd to do this. Thus remains, as a semi-plausible ground only, the menace England offers to

our foreign trade. The provocative effect of this on England will not certainly be diminished forthat reason.

The agitation on both sides is for the most part kept up by groups of interested capitalists through

the press. On the German side, besides these, the chorus of the anti-Semitic feudal Agrarians

pipe in, out of an instinctive hatred for England as an industrial State and as representative ofbourgeois Liberalism. Also, not without reason, the capitalist engaged in the German export

trade, as well as the financiers, take up a hostile attitude to England - people who a few years ago

made themselves ridiculous by their admiration for everything English. Just as little are therecent remarks in English writings on the necessity of a defence against German commercial

rivalry, or the necessity of tightening the bonds of interest between England and her Colonies

and the enclosure of so-called spheres of interest made without any object. As we have already

said, in the last twenty years circumstances have arisen which have essentially changed therelations of the two countries, and only from these changes can the situation be explained.

The nature of colonial policy as well as the method of exploiting weaker races by the

economically stronger has been repeatedly changed. If we go back to the Middle Ages we find

the aim of commercial policy of the Powers which then had a trade over the seas - viz., theItalian City Republics, the Hanseatic League, Portugal - to lie in securing to themselves a trade

monopoly with certain markets, and either by force or by artificial restrictions to shut out otherPowers. After the discovery of America, when Spain had founded her colonial empire andHolland had acquired big possessions, no foreign ship was allowed in the harbours, and special

measures were taken to favour the monopoly. For example, in the seventeenth century the trade

between China and Spanish America was only allowed by way of Manila and Acapulco, and,further, the joint import and export might not exceed a certain figure - on one side, in order to

secure high profits for the trade, on the other to secure the exports from Spain against

competition. Besides this the natives were forced to render certain services to the administrators,cultivate their lands, &c., or to the settlers of their own nationality; to societies, missions, &c.,

great landed estates were given by the conquerors - together with the natives settled on them - as

an endowment. Similar trade monopolies were established by England in her American and

Indian Colonies. The breaking away of the United States, nevertheless, produced a change. Itshowed, and the fact was further confirmed by the struggle of Spain with her American

possessions, that a colony populated by white people could not be held in complete economic

dependence on the Mother Country, and that a certain independence must be granted to it.England made her Colonies from time to time greater concessions; only in the possessions of the

East India Company did the old method of colonial government remain and remains partly - even

to-day.


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But it was not alone the loss of the New England Colonies which produced the change. While

formerly the imports and the trade with colonial products were the principal business, so, as

towards the end of the eighteenth century the great industry began to develop in England, theexport became of the greater importance. Markets must be provided for the national industry.

The Colonies must become markets. But the feudal conditions which prevailed in them, the

suppression of the native population into slaves without capacity to be consumers, and thecreation of a sort of planter aristocracy, were a direct hindrance to this. The old colonial system

must therefore be destroyed, the power of consumption of the Colonies must be increased. The

same capitalist Liberal who in England supported the unrestricted exploitation of labour, and wasin favour of a twelve hours working day for nine-year-old children in the English factories,

became a colonial philanthropist who waxed enthusiastic over human dignity, and the elevation

of the natives in the Colonies. In the year 1838 England abolished slavery is her Colonies; the

hours of labour for the adult black man were during the transition period under the EmancipationActs fixed at 45 hours per week or 7 hours daily.

The English export trade in the meanwhile soon acquired a sort of market monopoly not only in

her own Colonies, but everywhere throughout the world. The big industry in France andGermany still stuck in fetters; the United States did not count. Transmarine commerce was very

seldom conducted direct; it went for the most part by England or Holland. From then the position

of England in the world-market is to be explained, on the one side the sympathy of the Hanseatic

merchants for England during the years 1830-60 (the Hanseatic trade was in a certain sense onlyan auxiliary and a hanger-on of the English world-commerce); on the other side it explains the

cool indifference with which Englishmen looked on the English Colonies. Already in the thirties

the view acquired more and more influence that colonial possessions were useless; they broughtonly anxieties, necessitated the maintenance of a colonial army, strengthened the bureaucracy,

and the feudal aristocratic elements in the State. Therefore, away with the Colonies. As for a

market for her industry, England could find that in foreign States. As Benjamin Disraeli

expressed himself in 1852, the Colonies were only a millstone round the neck of the Englishpeople.

With the economical development of Germany and the United States and the accompanying

competition in the industrial market, the estimation of the Colonies among the industrialcapitalists of England again changed. Not only in foreign countries but oven in the English

colonial market, German and American competitors came to the fore, and German and American

shipping lines drove their English competitors to the rear. While the declared value of the totalexport of English produce to her Colonies stood in 1880 at exactly 75.3 million pounds sterling

as against 51.8 million sterling in 1870, therefore 24 millions higher, in 1890 the value was

only 87.4 and in 1897 only 80.7 millions, although the total imports of the Colonies continually

rose. Therefore, in the beginning of the eighties in free-trade England the idea began to take rootof a Customs union with her Colonies, i.e., the encouragement of English wares in colonial

markets. Already, in 1884, the Imperial Federation League arose in London; the agitation

remained, nevertheless, confined to certain narrow capitalistic circles. It is only since 1895, andespecially under the influence of the South African war, that the idea of a British Empire

standing over against foreign nations as a complete unity has gained ground considerably.


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Simultaneously with this development of Germany and the United States into industrial and

commercial rivals of England, there is effected another change in the colonial and foreign

markets. The capital made through trade and commerce finds in the home market and themarkets of industrial neighbours no sufficiently good investment; they press forward to fresh

countries. It is no longer a question of merely securing a market for an increasing superfluity of

goods, but also to provide the increasing accumulations of capital with fields for investment.Already under the old colonial system we find individual cases of export of capital to found nave

commercial undertakings and plantations in the Colonies, but quite exceptionally. Now, on the

contrary, the importance of transmarine settlements often recedes as markets behind theirimportance as fields for the investment of capital.

China is an example. In order to force on her the reception of her East Indian opium, England

made in the years 1839-42 the so-called Opium War. To acquire the immense territory of the

Chinese Empire with her vast population for industry and commerce, to get the most importantharbours opened for trade, the great watercourses freed for navigation into the interior - that was

the aim of the industrial States. Today, also, a large part of their efforts are directed to this end,

but the actual struggle to-day turns itself round the question of acquiring certain territories asspheres of influence, i.e., to get markets for laying out capital, railway and mining concessions,

&c., &c. And similar struggles for fields of investment we find in Asia Minor, Egypt, South

Africa; just in the same way the small republics of Central America are for the United States, as

India for England, more of importance as territories to be exploited than as markets.

From this new situation in the world springs the new colonial policy, the hunt for new colonies,

the modern American expansion policy, the English imperialism, and, at least partly, the German

world-policy. As long as Englands industry was in possession of the world-market, colonial

possessions - except in so far, as for example with India, they served for the subsistence forofficers and officials and for squeezing out high taxes - were of little value. The situation is

different to-day, when the competition of other nations assumes a threatening character. Now theColonies demand more consideration, since not only through differential Customs, but alsothrough different carrying out of the Customs regulations, legitimation of invoices, harbour dues,

it is possible to favour the imports from the Mother Country at the cost of the foreign imports.

Then it is natural that the colonial Government should get the materials which it requires forpublic works and administrative purposes from the old country. In the meantime, to a much

greater extent than industry, finance finds satisfaction in the acquisition of colonies. An

exclusion of foreign industrial competition in the colonial markets is only to a limited extentpossible if the development of the colony is not artificially checked and the colony herself

brought into economic opposition to the Mother Country. On the other hand it is for the

financier, looking for the most profitable investment of his capital, of the highest importance that

his fields of investment should lie in his own State, which secures them with more or less force.Since the State has to decide over the granting of railway, mining, and other concessions, she

can, by means of subsidies, raise the value of industrial undertakings, shipping companies, &c.,

just as on the other side she can, through legislation, limit or cut off their income altogether.Therefore we find that capital invested in foreign countries, so soon as it becomes a powerful

factor, always endeavours to bring these countries under the government of their own State.

Examples of this are Egypt, the annexation of the Hawaii Islands by the United States at theinstigation of the American planters, the Cuban war in consequence of the agitation of interested


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capitalists in America, the French expedition to Madagascar to ensure the profits on the loan of

the Comptoir dEscompte and the people behind it, and the South African war for the purpose

of abolishing the Boer peasant rgime as a hindrance to the British financiers, and to make theSouth African market free as a field for the investment of British capital.

Therefore the newly-awakened passion of capitalistic States for the acquisition of colonies, andtherefore the endeavour to create fields for the investment of superfluous capital, and to get

grants in foreign countries of districts for exploitation as so-called spheres of interest; thereforealso the rise of militarism in democratic countries, such as England and America. In order to

force through concessions, and for the protection of the exported capital, a certain application of

force is indispensable. England, Russia, and Germany succeeded in leasing territories in China,Italy did not.

From this altered economic situation is explained the spirit of increasing jealousy between

German, English, and North American capitalist circles. Just as certain as it is that Englands and

Germanys industry are mutually dependent, and that an interruption in the commercial relations

of the two countries must have the most disastrous effects on their economic development, it isequally certain that the finance-capitalist has frequently other interests than the industrial-

capitalist. If to the English industry the intrusion of German manufacturers in their transmarinemarkets is not pleasant, nevertheless the constant extension of these markets has hitherto taken

away much of the sharpness of the competition, while at the same time the German market for

England, and the English market for Germany, continually gains in importance. Moreover, fromthe interest which the superior industry of the two countries has in the opening of markets, still

more or less closed, result many points of contact. On the other hand, finance-capital is by nature

thoroughly monopolist; its endeavour is to assure for itself a monopoly in the exploitation of

certain districts. As a matter of fact the English complaints about German industrial competitionsound much less bitter than over the intrusion of so-called German capital into new districts, the

founding of German commercial undertakings, and banks; the cutting out of English shippingcompanies, the laying down of German industries, &c. Let us take China as an example. Thewhole export of Germany to China amounted in 1898 only to 48 million marks (about

2,400,000); on the other hand, from the book recently published by the Imperial Navy

Department, German Capital in Transmarine Countries, there appear to be 105 Germanhouses in China, 43 in Shanghai alone, and more than 20 in Hongkong, with a joint capital and

credit of a great deal more than 100 million marks (about 5,000,000). And not less important

are the investments of German capital in shipping, docks, and bank undertakings, in railways andmining. The English coast shipping trade is, by the purchase of two English lines (25 steamers)

which trade between Siam, the Dutch colonies, and the Chinese harbours (specially the Yangtse

harbour), also completely transferred to German hands.

How important the German capital invested abroad is, is shown in the above-named book; thetransmarine investments alone amount to over 7 milliard marks (375,000,000), with the

investments in foreign loans and speculations, etc. In the proceedings over the Bourse Law the

latter were estimated at 12 milliard marks (600,000,000) In addition to this there are the

German investments in European countries, so that the sum of the German investments inforeign countries would probably be underestimated at 25,000 million marks (1,250,000,000).

And the amount of English capital invested abroad is naturally much greater.


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The mutual estrangement of German and English capitalists is only the consequence of this

development, just as are those political tendencies which are designated expansion policy,

imperialism, and world-policy. The working classes and manufacturers will certainly be told thatit is a question of extending their markets; still the decrease in the export of English goods to the

English Colonies, the extraordinarily small value of Tonkin and Algiers for French industry, the

still more insignificant importance of the German Colonies for German industrial development,prove how much of this is mere idle talk. Under certain circumstances, the investment of German

capital abroad can also bring advantages to German industry. From German railway building in

foreign parts the German iron industry may, for example, profit; the founding of Germancommercial undertakings may cause an increase of German exports; but such limited advantages

are balanced by at least equivalent disadvantages, since, through the founding of industrial

enterprises, lines of shipping, and commercial undertakings in foreign countries, what German

industry gains one way it will lose in another. Let us see the statistics. In China, we find, as wesaid above, 105 German commercial houses, with a joint capital of 100,000,000 marks. Who

believes that these houses only concern themselves with the German-Chinese trade, which in

1898 only amounted to 48,000,000 marks, must be very naive. A greater part of these houses

neglect German imports in favour of foreign industries. What alone draws profit from thefounding of colonies, from the modern expansion policy, is the finance-capital which draws

further advantages from the failures of colonial Governments and the consequent expenditureand loans for colonial purposes.

And then the costs of the world-policy, which to England are now being so forcibly

demonstrated in South Africa the reaction on home affairs, the inevitable strengthening of

militarism, the breeding of constantly renewed colonial troubles, the increase of warlikeentanglements. Like every other policy, so certainly has the imperialistic world-power policy

found, besides their poet, Rudyard Kipling, also their philosophers and sophists, who endeavour

to prove that imperialism means the strengthening of democracy, a rise in the general well-being,

and many other things besides. Hitherto nothing has been seen of these consequences, but only arenewal of colonial crimes and the colonial wars of previous centuries; of these there is a

plentiful choice. We only need look at the war of the United States with the Filipinos, at the last

English war with the Indian frontier tribes, at the Matabele war, at the Boer war. These are themost striking triumphs of the imperialist world policy. The prospect of like results for Germany

is not enticing.

Karl Kautsky - Germany, England and the WorldPolicy

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