February 13, 1915. 
LAND AND WATER. 
military services, the provision of pensions, of 
uniforms, huts, etc., and even the production of 
armament; the hire of transports, of colliers, the 
ordering of every kind of material for the conduct 
of the campaign, is not equivalent to an added con- 
sumption of national wealth. It is merely for the 
time being the canalisation of economic wealth into 
channels other than those which it usually follows 
in time of peace, and what is more, this canalisa- 
tion is upon the whole (for the moment only) asocial 
benefit; for it tends to provide necessaries for the 
poor and to check the provision of luxuries for the 
rich. When you tax a rich man heavily for war 
purposes and use the money for producing 
uniforms and boots you are, in fact, destroying his 
power of demand which would have produced a 
fur coat, and using that power of demand to cause 
the production of boots and clothing which will 
keep a large number of the poorer members of 
society from the weather. In the same way, when 
you tax a wealthy woman heavily in time of war 
and give high pensions to the widows of soldiers 
you are turning what was the power of demand 
for a new motor-car into the power of demand for 
bread and meat and milk, and so forth all along 
the line. A nation that chooses to be generous in 
its payment and equipment of soldiers and raises 
the money as far as possible from its wealthier 
classes is not really " spending " newly apparent 
large sums at all. 
Of direct destruction of wealth, of direct ex- 
penditure, of real consumption in war of what would 
not have been consumption in peace, in a woi'd, of 
extra strain, you have two forms, — fir.st the destruc- 
tion of existing wealth by the enemy or by one's 
own forces — as when the enemy dropj^ed bombs on 
Great Yarmouth, or when wo dig trenches across a 
man's garden on the East Coast : secondly, the loss 
which arises from the disorganisation of society, 
from a sudden call upon men to do new, unusual 
things for which they are ill fitted, and a sudden 
cessation of their activities in a field where they 
have acquired experience and dexterity. This 
dislocation takes a thousand shapes. You see It 
most clearly perhaps in the professional classes 
and some skilled artisans where there Is a gap, 
lasting often as long as the war Itself, between 
a man's power to produce wealth upon his ordinary 
lines and his opportunity for turning to some 
new activity. In peace, for instance, a rich man 
was prepared to give a hundred measures of wheat 
to a skilled artist who -would produce him a 
certain piece of furnltiue, in war the hundred 
measures of wheat ai'c taken to feed the armies. It 
does not follow that the skilled maker of the furni- 
ture will either be able to join the service or to take 
up any other form of production. In which case the 
commonwealth as a whole does lose such economic 
values as he would have produced had he been 
employed to make the furniture. 
In the first of these categories Great Britain 
has suffered very slightly : far less than any of her 
Allies. For there has been as yet no serious destruc- 
tion of property either by the enemy or by her 
Government for the purposes of war within her 
boundaries. In the second category also the expense 
has been surprisingly small and the transformation 
of society has been effected with comparatively 
slight friction. 
But the Indirect effects which follow upon the 
setting of men to non-productive from productive 
tasks is serious In the case of an industrial country 
such as this. There is already an Indirect form of 
loss through the closing of one great market with 
which the industries of Great Britain exchanged. 
And since what comes Into this island is largely. If 
not entirely, procured by the exchange of what goes 
out of it, and since what goes out of it and is offered 
for exchange is provided by labour and capital used 
in a reproductive manner, the putting of men to 
tasks which give, when they are accomplished, 
material that can never form capital or be used for 
the production of wealth, ultimately lowers the 
economic power of a nation : Lowers it progressively 
and cumulatively as time goes on, and Is particularly 
noticeable after the lapse of one complete year, 
because It Is within the cycle of a year that 
agricultural production, upon which ultimately all 
economic effort depends, runs through its cycle. 
You have a hundred measures of wheat which 
are your capital. You use them to feed sailors who 
take a ship across the sea for you and bring you 
back more measures of wheat. Or you use them in 
feeding labourers who till the land for you and this 
produces further wheat. Your capital Is used pro- 
ductively. But use them in feeding the crews of 
transjiorts who take your troops across the sea, or 
in the feeding of these troops themselves In the field, 
and there does not result from your expenditure 
any further wealth. It ends in Its consumption. 
Similarly, If you burn a certain amount of coal in the 
production of an engine for creating wealth, such as 
a loom, your coal, though consumed, has been an 
agent for producing further wealth ; but If you burn 
your coal to make a shell, then, when your shell has 
been delivered and exploded, the process Is at an 
end, and no further wealth has resulted from the 
consumption of your product. The conclusion of 
any such analysis must be very plain. It is 
two-fold. First the mere figures of national 
expenditure conceal the truth and give rise to an 
illusion. That nation appears to be spending most 
which is providing most generously for equipment, 
pay, and the rest of It, but during all the 
earlier part of the process the total economic 
poslticn remains precisely the same as though 
the Government had left the taxes at their 
ordlnaiy cost during a time of peace, the real 
expenditure being during the first few months of a 
great war. In the case of a nation whoso territory 
Is not damaged, when a certain time has elapsed, and 
particularly after the revolution of one year, a sharp 
strain is felt and that strain increases, because as 
time proceeds j'ou discover that your people have not 
been pi-oduclng wealth at the old rate, and ihe 
effect of this cessation of useful and its replacement 
by unuseful labour Is cumulative. When wars are 
severe and conijjaratlvely short of duration one may 
expect a period of great strain Immediately after 
their conclusion, but hardly an economic strain 
during their jirogress W^hen wars are lengthy, 
the double strain is felt of exhaustion In stocks and 
of Impotence to replace those stocks. And of course 
if the territory of the nation is ravaged as well you 
come to enormous Items of expenditure, such as 
have ruined Belgium and a fringe of Franac"^, and of 
East Prussia and of Western Poland. 
Jlr. HiLAiRE Bki.loc will lecture on the "Progress of the War" at 
Queen's llall at 8.30, February 17. Tickets for this lecture are uow 
nearly all Bold. 
llr. Fred T. Jan-k will lecture on the "Naval War" at Queen's 
Hall at 8,30, Fcbruai-y 25. 
Professor V. B. I.kwes will lecture on " Modern Explosivee " (with 
experiments) at Queen's Il.all at 8.30, March 2. 
Schools, societies, etc., should apply at the Hall for special terms. 
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