TRANSACTIONS OF SECTION F. 727 



material goods if each nation specialises in those kinds of production for which 

 it is particularly adapted, and caters for the rest of the world in these depart- 

 ments. We have given up all idea that the nation should be self-sufficing; we 

 depend, even for the most necessary articles of subsistence, on communication with 

 other countries ; we produce with direct reference to the requirements of foreign 

 markets, and do not merely export a surplus which we cannot advantageously use 

 ourselves. So far as our economic scheme is concerned, we regard England aa 

 part of a greater whole — not as an independent national organism, but as one 

 portion of a cosmopolitan economic organism ; we desire to have the freest com- 

 munication with all parts of the world, for on this our very life, our national pro- 

 sperity in all its branches, depends. 



It seems to me, then, that just as there was a struggle in England between the 

 municipal scheme of economic life and the national one in the fourteenth and 

 fifteenth centuries, so there is in the present day a contest all the world over 

 between the nationalist economic policy on the one hand, and the international 

 and cosmopolitan scheme which we Englishmen have adopted for economic pur- 

 poses on the other. I have argued elsewhere ' that our commercial success has 

 been greatly due to the early date at which a national economic life was 

 developed in this country ; and I cannot regard it as a matter for regret that 

 we have been the first among the nations to throw ourselves heartily into the 

 cosmopolitan economic scheme. 



It is a commonplace to say that we live in a period of transition ; of course 

 every period is in a sense a time of transition, for the world never does stand 

 absolutely still, but the change that is going on in the economic life of the world 

 to-day is something more than common ; the framework on which English policy 

 was fashioned for three hundred years has been laid aside, and all our schemes for 

 industry and commerce are being devised on a new model and worked out on a 

 larger scale. This new model and larger growth are affecting all parts of the 

 globe, and even those countries which would fain pursue the old nationalist 

 economic scheme cannot escape the new influence ; international and cosmopolitan 

 economic forces are gradually breaking down national exclusiveness in all parts of 

 the known world. 



(a) A very few words will illustrate what I mean. There is in this country a 

 very large formation of capital every year. Mr. Wilson ^ traced it for the earher years 

 of this century, and Mr. Giflen has calculated it for more recent periods. The 

 capital thus formed seeks investment, and it is ready to flow into any channel 

 where there seems a reasonable chance of profit. It is not confined by national 

 barriers, but is transferred to any country, however distant or however uncivilised, 

 so long as arrangements are made that give a prospect of regular or of handsome 

 profits. The resources of distant colonies, of South American Republics, and of 

 Egypt, have been developed by capital borrowed in England. There are, therefore, 

 moneyed men in this country who have a stake, and are directly interested, in the 

 prosperity of many lands they have never seen. Space is ignored, patriotism is 

 left out of sight, and capital is invested wherever there is an apparent promise of 

 profit. 



(6) Capital tends too to minimise the differences between nations, since wher- 

 ever it goes it tends to modify the forms of industrial life. Capital introduces 

 new methods of production, for it brings machinery and thus induces the labourer 

 to spend his whole time in working for wages. There are still many lands where 

 the old system which was general in this country at the close of last century 

 holds good ; and where the artisan supports himself partly by labour on his land 

 and partly by his trade. But industrial capital, and expensive machinery, and 

 factory towns are not compatible with such conditions of life. As they are in- 

 troduced the old domestic system and the family life maintained by bye-occupations 

 are gradually broken up ; the artisan becomes wholly dependent on the wages he 

 earns and has no other source of income ; thus social life tends to shape itself in a 

 new form. As capital becomes a dominant force in industry, the artisan is induced 



' GroTvth of English Indvstnj and Commerce, 244, 413. 

 ' Capital, Currency, wtid Banking. Preface. 



