Karl Kautsky

Germany, England and the World­Policy


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 Vorwärts, 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 its dispassionate 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 English capitalist press has been exciting public opinion in both countries the one against the other, and to show the manner in which leading events of the past year 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 other papers 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 German Foreign 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 English press, 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, tried to 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 opposition to 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 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 in Central 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 danger will 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 for that 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 of bourgeois 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 the recent 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 the relations 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., the Italian 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 other Powers. After the discovery of America, when Spain had founded her colonial empire and Holland 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. It showed, 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.

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, the export 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 the creation 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 was in 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 Emancipation Acts fixed at 45 hours per week or 7½ 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 and Germany 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 only an 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 brought only 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 English people.

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 industrial capitalists 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 total export 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 24½ 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 root of 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, and especially 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.

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 the markets 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 their importance 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 important harbours 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 as spheres 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 England’s industry was in possession of the world-market, colonial possessions - except in so far, as for example with India, they served for the subsistence for officers 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 the Colonies demand more consideration, since not only through differential Customs, but also through 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 for public 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 extent possible 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 the instigation of the American planters, the Cuban war in consequence of the agitation of interested capitalists in America, the French expedition to Madagascar to ensure the profits on the loan of the “Comptoir d’Escompte” and the people behind it, and the South African war for the purpose of abolishing the Boer peasant régime as a hindrance to the British financiers, and to make the South 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, and therefore 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; therefore also 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 England’s and Germany’s 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 is equally 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 transmarine markets 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, from the 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 competition sound 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 shipping companies, the laying down of German industries, &c. Let us take China as an example. The whole 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 German houses 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 and mining. 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; the transmarine investments alone amount to over 7½ 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 in foreign 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.

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 that it 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 German commercial 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 we said 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 the founding of colonies, from the modern expansion policy, is the finance-capital which draws further advantages from the failures of colonial Governments and the consequent expenditure and 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 warlike entanglements. 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 a renewal 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 the most striking triumphs of the imperialist world policy. The prospect of like results for Germany is not enticing.


Last updated on 23.11.2003