of the limitations of the market, and so compel the reinvestment of the earnings of the trust in other lines of business, and thus bring new lines of business under the same control, and hence, again, the federation of the trusts.

6. The exigencies of foreign relations control the domestic policies of all countries. International trade controls all foreign relations. The international trust is rapidly becoming the master of all international trade. It is becoming the political as well as the industrial despot of the world.

REVIEW QUESTIONS.

1. What made the creation of the manufacturing corporations necessary?

2. Why was the creation of the trust necessary? Can consolidation be prevented?

3. Why must the trust become a world trust?

4. Why has the federation of trusts taken place?

5. Are there any forces which can prevent the culmination of business organization in a single world trust?

6. Name some of the important things which such a world power, or single international trust, would be sure to control.

7. How would this affect the interests of those not in the trusts? 8. Would a successful strike then be possible? Why?

9. Could any action regarding the tariff in any way affect the interests of an international trust? Why?

10. Would the organization of new competing companies be possible after the completion of the one international trust? Why?

11. What is the cause at home of the policy of imperialism abroad?

CHAPTER XI

THE COLLAPSE OF CAPITALISM

175. The Culmination.-Capitalism has a worldwide existence. All other forms of the organization of industry and commerce have been crowded out of existence. World-wide consolidation cannot be prevented. This culmination is inevitable. It is the purpose of this chapter to show that the final collapse of capitalism is as inevitable as is continued growth and final consolidation under capitalism.

176. Surplus Products.-Capitalism, under machine production, produces more goods than the capitalists can dispose of among themselves and their employes. The capitalists take all the goods from the market which they can use or are willing to waste. The workers take all the goods from the market which their wages will pay for.

It was recently stated, in the United States Senate, by Senator Hanna, that American production will have to be lessened at least one-third, or the foreign market must be held for American goods. This means that American workers are producing very largely in excess of what the American workers are able to buy,

over and above all that their employers can use or are willing to waste.1

If the workers of this country are doing this, it is also true that the workers of all countries are doing the same. If the accuracy of Senator Hanna's figures be denied, it will not be denied that the workers of all countries are all the time producing largely in excess of all that the workers of all the countries are able to buy, over and above all that their employers can either use or waste.

177. The Foreign Market.-By means of the foreign market the attempt is made to dispose of this surplus, by the employers of different countries trying to sell to each other this surplus, which the workers could use, but cannot buy, and which the employers claim, but cannot use. To whatever extent the foreign market relieves the overstocked market of one country, it must at the same time increase the overstock or stop the industry of some other country which was before producing the same goods for the same market. If the great manufacturing countries are all of them producing thirty per cent more than the workers can buy with their wages,2 and over and above what their employers can use or waste, this surplus cannot be long disposed of by international exchange, for however much this international exchange of goods, by exchanging the staple articles of one country for the luxuries of other countries, may add to what the capitalists may be willing to waste, it can in no way add to the purchasing power of the workers.

1.

The upshot of the whole matter, therefore, is that America has been irresistibly impelled to produce a large industrial surplus a surplus, should no change occur, which will be larger in a few years than anything ever before known. Upon the existence of this surplus hinges the future, for the United States must provide sure and adequate outlets for her products, or be in danger of gluts more dangerous to her society than many panics such as 1873 and 1893."-Adams: American Economic Supremacy, p. 32.

2. "But the capacity for extension, extensive and intensive, of

178. Losing the Market. If there are increased sales for any one country, it is because it has captured the trade and closed the shops of some other country." And so the struggle for the foreign market, wherever

the markets is primarily governed by quite different laws, that work much less energetically. The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production the collisions become periodic."-Engels: Socialism Utopian and Scientific, pp. 63-64.

"And how does the bourgeoisie get over these crises? On the one hand by enforced destrucion of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented."-Marx and Engles: Communist Manifesto, pp. 21-22.

3. "A pound of home trade,' it has been said, 'is more significant to manufacturing industry than thirty shillings or two pounds of foreign.' The comparison may not be exact, but it is on the right lines. Now, one of the most important branches of our home trade must be the supplying of agriculturists with manufactures in exchange for food. But when the purchasing power of this class of the community has sunk as much as £43,000,000 (more than $206,000,000) per annum, it is obvious that such a loss of custom must seriously affect manufactures. Again, no small portion of our home market must consist in the purchases made by the working classes, yet it does not seem to occur to capitalist manufacturers that if they pay a large proportion of the industrial classes the lowest possible wages, and get them to work the longest possible hours while thus obtaining an everincreasing production of goods, the question must sooner or later be answered: Who is going to consume the goods thus produced?

"The answer, as far as the capitalist is concerned, seems to beforeign customers in new markets. English manufacturers and capitalists have consistently supported that policy which seemed likely to open up these new markets for their goods. For a considerable time, as we saw, they occupied themselves very wisely in obtaining cheap raw material by passing enactments actuated by Free-Trade principles, and removing protective restrictions. Cheap raw material having thus been gained, and machinery having now been developed to such an extent as to increase production quite incalculably, England sends her textile and other products all over the world. She seems to find it necessary to discover fresh markets every generation or so, in order that this vast output of commodities may be sold. The merchant and manufacturing classes have supported and still support this policy, from a desire, apparently, rather to find new customers than to keep the old; and largely for the sake of British trade, wars have been made on China, Egypt, and Burmah, while at the present moment England is scrambling with Germany, Portugal, and other powers for the new markets of Africa. Today, indeed, the industrial history of our country seems to have reached a point when production under a purely mercantile system is over-reaching itself. It must go on and on without ceasing, finding or fighting for an outlet for the

trade shall finally go, means destruction of industry for the losers in the conflict, and ultimate monopoly and world-mastery for the industrial victors.

179. Purchasing Power.-But this is not all. Each such victory helps to destroy the purchasing power in the world-market of those countries whose shops are closed, and hence makes smaller, at the same time it monopolizes, this market for the victors. Whenever the world-trust shall come into complete control of the world-market and continues to produce more than its workers can buy, where, then, will it dispose of this surplus which the capitalist claims, but cannot use, and which the worker has produced and needs, but cannot buy? If the remedy shall be to produce less, then more workers are displaced and there will be still fewer to buy, and hence, a larger surplus than ever. Then cap

wealth produced, lest the whole gigantic system of international commerce should break down by the mere weight of its own immensity. Meanwhile English manufacturers are complaining of foreign competition in plaintive tones, a complaint which merely means that whereas they thought some years ago that they had a complete monopoly in supplying the requirements of the world, they are now perceiving that they have not a monopoly at all, but only a good start, while other nations are already catching them up in the modern race for wealth."Gibbins: Industry in England, pp. 468-70.

4. "Owing to the great capacity of modern machinery, the operatives employed by the investment of savings can only consume a very small proportion of their product. An outlet must be found either in the discovery of fresh markets in countries yet to be 'developed'—a problem which involves serious questions of foreign politics-or in increased home consumption. Leaving the former of these out of account for the present, as it brings up international competition, and from the nature of things must gradually diminish in importance as a solution, we see that an increasing proportion of the national income must be spent in order to absorb the goods originating from savings. Here a limitation arises from the manner in which the annual income is divided. Out of a population of about forty million persons, some eighteen millions are 'occupied,' and of these it is estimated that thirteen millions constitute the manual labor class. They and their dependents, therefore, form the home market for the great bulk of the production of goods for consumption, and on their ability to increase their effective demand depends the utility of the increased productivity of industry. But they receive only £650,000,000 out of the national income of £1,700,000,000, or less than one-third, and the spending capacity of a very large proportion of them is much below what the average represents. Even those of them who are best off have but a very small margin for conventional luxuries after providing for the bare neces