N.I. Bukharin: Imperialism and World Economy


Chapter 13: War and Economic Evolution


The war, which was bound to break out because it had been prepared by the entire course of events, could not fail to exercise a colossal influence on world economic life. It has caused a complete change in every country and in the relations between countries, in the "national economies" and in world economy. Together with a truly barbarous squandering of production forces, with the destruction of the material means of production and of the living labour power, together with the devitalisation of economy through monstrous socially harmful expenditures, the war, like a gigantic crisis, has intensified the fundamental tendencies of capitalist development; it has hastened to an extraordinary degree the growth of finance capitalist relations and the centralisation of capital on a world scale. The centralising character of the present war (imperialist centralisation) is beyond doubt. First of all, there is a collapse of independent small states whether of high industrial development (horizontal concentration and centralisation) or of an agrarian type (vertical centralisation); the latter have also absorbed some of the weaker (and similarly backward) formations-which, however, is comparatively unimportant. The independent existence of Belgium, a highly developed country with a colonial policy of its own, is becoming doubtful; the process of a centralising redivision of territory in the Balkans is perfectly obvious; it is to be expected that the tangle of colonial possessions in Africa will be straightened out. On the other hand, we witness a very strong rapprochement (in the form of a lasting agreement between syndicates) of Germany and Austria-Hungary. Whatever the actual outcome of the war, it is already clear (and could have been assumed a priori) that the political map will be changed in the direction of greater state homogeneity-this being exactly the way in which the imperialistic "nationality states" (Nationalitätenstaaten) grow.

If the general tendency of development, only intensified by the war, consists in a further process of centralisation, the war has also considerably accelerated the appearance on the world arena of one of the largest state capitalist trusts, possessed of an unusually strong internal organisation. We mean the United States of America.

The war has placed the United States in an unprecedented, exclusive position. With the cessation of the Russian grain export, etc., to Europe, the demand for American agrarian products has increased; on the other hand, there is a stupendous demand for the products of the war industry of the United States on the part of the belligerent countries."1) To the United States is also directed the quest for credit capital (foreign loans, etc.). Only recently America was a debtor to Europe; in consequence of the war the situation changes rapidly: America's debts are being repaid, and in the field of current accounts and short term credits America is becoming the creditor of Europe. This growing financial importance of the United States has another no less significant side to it. The secondary American states used to import capital from Europe, mainly from England and France, while the import of capital from the United States, itself an importer of European capital, was of little importance. During the war, however, Canada, Argentina, Panama, Bolivia, and Costa Rica have placed their loans not in Europe but in the United States. "The American countries have received small sums, but what is characteristic in this transaction is the fact that the enumerated countries had usually been clients of the London market. Thus New York has replaced London for the time of the war and has, as it were, given impetus to the realisation of the financial section of a Pan-American programme.2) The continuation of the war, the payments for war orders and loans, later the immense demand for capital in the post-war period (when the reconstruction of fixed capital will have to be undertaken, etc.) will increase the financial importance of the United States still more. It will hasten the accumulation of American capital; it will widen its sphere of influence in the rest of America, and will rapidly make the United States a prime factor in the world struggle for markets.3)

The example of the United States of America shows how a large state capitalist trust grows and becomes consolidated, how it absorbs countries and territories formerly dependent upon Europe. Simultaneously with the extension of America's world connections, we witness a highly intensive progress of "national consolidation." Stronger still are the "nationalising" tendencies inside of the belligerent groups: international commodity exchange has been disrupted, the movement of capital and labour power from one belligerent country to the other has ceased, nearly all relations have been severed. Within the boundaries of "national" economy (of which the best example is Germany, for Germany is cut off from the rest of the world most completely) there goes on a hasty redistribution of productive forces. This relates not only to the war industry (it is a well known fact ,that even piano factories in Germany have been adapted to new tasks, namely, they manufacture shells), but also to foodstuffs and agriculture in general. Thus the war has unusually intensified the tendency towards economic autarchy, towards transforming the "national" economy into a self-sufficient whole, more or less isolated from world connections. Does it follow, however, that this tendency will continually prevail, that world economy will be split up into a number of independent parts entirely isolated from each other? So, or almost so, does Utopian imperialism think. The ideologists of imperialism strive towards a state of affairs where a country produces everything "by itself," where it "does not depend upon foreigners," etc. Let the country acquire the necessary "economic supplements," let it secure for itself the sources of raw material, and the task, they say, is achieved. Such arguments, however, will not stand the light of criticism. The imperialist gentlemen completely forget that the annexationist activities they pursue imply the growth of economic world connections, the expansion of capital and commodity export, the increase of raw materials' import, and so forth. Thus, from a certain point of view, the policy of imperialism contains a contradiction: the imperialist bourgeoisie must, on the one hand, develop world relations to a maximum (remember the dumping policy of the cartels), on the other hand, it erects a tariff wall between itself and the world; on the one hand it exports capital, on the other it cries over foreign supremacy; in a word, on the one hand it internationalises economic life, on the other hand it strives with all its might to bottle it up within "national boundaries." Still, notwithstanding all obstacles, the basis of international connections keeps on growing, hence Felix Pinner is perfectly right when he says:

Remembering that the unusual expansion of foreign trade took place in the period of the most decisive nationalist economic policy, we must assume that the war, and the political sentiments of the great powers called forth by the war, will destroy international relations as little as this was hitherto done by the seclusion tendency [Absperrungstendenzen].4)

While the war is going on, the disappearance or the weakening of economic connections in one place is accompanied by their growth in another. The dominant rôle played by the Germans in Russia has been discontinued, only to give place to the dominant rôle of the Entente powers. Nor is this all. We must remember that the regulative principle of capitalist activity is the accumulation of profits. War is one of the "business operations" of the modern bourgeois; once it is over, he is as eager as of yore to establish old connections (not to speak of contraband operations during the war itself). Capitalist interest imperatively dictates these steps. The international division of labour, the difference in natural and social conditions, are an economic prius which cannot be destroyed, even by the World War. This being so, there exist definite value relations and, as their consequence, conditions for the realisation of a maximum of profit in international transactions. Not economic self-sufficiency, but an intensification of international relations, accompanied by a simultaneous "national" consolidation and ripening of new conflicts on the basis of world competition-such is the road of future evolution.

Thus if the war cannot halt the general development of world capital, if, on the contrary, it expresses the greatest expansion of the centralisation process, the war also influences the structure of individual "national" economies in such a way as to intensify centralisation within the limits of every "national" body and, while wasting productive forces on a colossal scale, it organises "national economy" in that it places it more and more under the combined rule of finance capital and the state.

In its influence on economic life, the war in many respects recalls to mind industrial crises, differing from the latter only by a greater intensity of social convulsions and devastations. Those devastations express themselves economically, first of all, in the dying out of the middle strata of the bourgeoisie--a process that goes on also during industrial crises. When markets are lost, entire branches of production perish; due to the absence of a solvent demand, connections hitherto firmly rooted are disrupted, the entire credit system is shaken, etc. Outside of the workers, however, the most afflicted elements are the middle strata of the bourgeoisie: they go bankrupt first of all. Large-scale cartel industry, on the contrary, does not feel unhappy at all. It is easy to gather abundant statistical material to illustrate the rise in the profits of a whole series of the largest enterprises, particularly such enterprises as are close to army deliveries, i.e., in the first place enterprises in the sphere of heavy industries (so-called "military profits"). In spite of the fact that the sum total of surplus value produced does not grow (on the contrary, it is diminishing, due to the fact that a vast number of hands are diverted to the army), the profits of the large-scale bourgeois groups keep on growing. This goes on to a large extent at the expense of the profits of other, small and uncartelised, groups of the bourgeoisie. (This increase in profits is, on the other hand, explained by the rise in the value of paper securities as a draft on the future.) Where there is a colossal expenditure of productive forces, where the fixed capital of society is being "consumed,"5) there is evident a shifting of groups and a relative growth of the large-scale bourgeois categories. This tendency will not be ended with the war. If the large-scale bourgeoisie defends and fortifies its position during the war, the post-war gigantic demands for capital will facilitate the rapid growth of large-scale banks, and consequently the rapid growth of centralisation and concentration of capital. A feverish process of healing the wounds inflicted by the war will ensue: reconstruction of destroyed or wornout railways, shops and factory plants, machines and apparatus, rolling stock in the field of transportation, etc.; not the least among these activities will be the mending and extending of the military state apparatus. This will increase the demand for capital to a very high degree, and will strengthen the position of banking trusts.6)

While the finance capitalist groups are becoming stronger, there has increased tremendously the interference of the state in economic life.7)

Under this head comes the formation of state (production and trade) monopolies; the organisation of so-called "mixed enterprises" (gemischte Betriebe) where the state or the municipalities are partners to the enterprise, hand in hand with private syndicates and trusts; state control over the production process of private enterprises (obligatory production, regulation of production methods, etc.): regulation of distribution (compulsory deliveries and acceptance of goods; organisation of state "central distribution offices;" state warehouses for raw materials, fuel, foodstuffs; fixing of prices; bread cards, meat cards, etc.; prohibition of import and export of goods, etc.); organisation of state credit; lastly, state organisation of consumption (communal kitchens).8)

England has established, besides, state insurance of ocean cargoes, state guarantee of merchants' promissory notes, state payments of sums belonging to English merchants abroad, when they cannot be obtained at the moment, etc. Similar measures have been introduced to a greater or lesser degree by all the belligerent states.

The "mobilisation of industry," i.e., its militarisation, was achieved with least difficulty where the entrepreneurs' organisations, cartels, syndicates, and trusts were the strongest. Those employers' organisations, in whose interests the war is here undertaken, have placed all their regulating apparatus at the service of the imperialist state, to whom they are closely related. They have thus secured the technical-economic possibility of militarising the economic life, beginning with the direct process of production and up to the subtleties of credit circulation. Where industry was organised into cartels, its "mobilisation" assumed grandiose proportions.

"Large sections of economic life (des Erwerbslebens)," says Mr. Pinner about Germany, "have for decades been very closely united, the character of their activities being almost collective; they have absorbed a large part of the national production and have placed it under single management: these are the cartels and trusts."9) The aims of industrial mobilisation as well as its significance have been stressed by the English minister, Mr. Lloyd George, when he said on June 3, in Manchester, that the law relative to the defence of the realm gave the government full power over all the factories; that this law made it possible for the government to give precedence to work most urgent; that it gave the government a right to dispose of every factory, every machine, and that were a difficulty to be encountered, the ministry was well supplied with arms to make its orders effective.10) Similar measures have been adopted also in France11) and Russia. Aside from direct control of state power over the production of private enterprises, the war has established a number of state monopolies. In England the railways have become state property; Germany has introduced bread, potato, nitrate monopolies, etc., and has a number of others in prospect (this we shall treat later); even the coal industry is turning into a "mixed cartel" where a syndicate co-operates with the government.12) In all these cases the government directly intervenes in the sphere of production; there is, however, another and very effective governmental intervention through credit relations. Typical for the latter is the "financial mobilisation" and related operations in Germany. Even at the beginning of the war the Reichsbank operated through a series of other large banks; later its activities in this respect were greatly augmented. The so-called "loan banks" (Darlehenskassen),as state institutions dependent upon the Reichsbank, soon became a very important factor in the realm of credit.13) A tremendous importance is attached to internal military loans that are being placed among the public directly by the Reichsbank. Thus the latter, an institution endowed with exceptional importance in the economic life of Germany even before the war, has grown tremendously in importance, becoming as it did a strong centre for the attraction of available portions of capital. On the other hand, it grows also as an institution that finances the ever increasing state enterprises and other state economic organisations. The central banking institute of the government thus becomes the "golden head" of the entire state capitalist trust.

One must not think that this evolution is confined to Germany alone. Mutatis mutandis the same process is taking place in all the belligerent countries (also in the non-belligerent ones, but to a lesser degree). We must dwell here on one question that seems to us of unusual importance, namely, on the question of state monopolies and their future.

War Loans of Six Belligerent Countries
Great Britain
(in thousands of pounds sterling)*
(in thousands of francs)
(in thousands of rubles)
(in thousands of lira)
(in millions of marks)
(in millions of crowns)
3.5% loan, Nov., 1914 350,000 Bank of France loans 7,000,000 5% loan, with obligatory discount at State Bank 2,650,000 4.5% loan, Dec., 1914 1,000,000 5% loan, Sept., 1914 3,492 5.5% loan, Nov., 1914 2,300
3% bonds, Mar., 1915 33,600 Loans of France's Allies, discounted by treasury 530,000 5% loan, Oct., 1914 500,000 5% loan, July, 1915 1,000,000 5% obligation, Sept., 1914 1,000 6% loan, Nov., 1914 1,170
4,5% loan, July, 1915 585,000 3.5% loan, July, 1914 500,000 5% loan, Feb., 1915 500,000 Loans from Banca d'Italia 1,216,350 5% loan, Feb., 1915 9,103 5.5% loan, May, 1911 2,780
5% American loan, Oct., 1915 50,000 Bonds 7,871,000 5,5% loan, May, 1915 1,000,000   5% loan, Sept., 1915 12,101 6% loan, June, 1915 1,124
Treasury Notes 214,000 Obligations 2,241,000 4% series, Aug., 1914 300,000   Treasury Notes 4,304 6% loan in Germany (Gross), Nov., 1914 248
  English loans 1,250,000 4% series, Mar., 1915 300,000   Same, July, 1915 253
  U.S.A. loans 1,250,000 Treasury notes discounted in England 1,248,324   Current debts 5,112
  Same in France 234,750  
  Currency loan, April, 1915 200,000  
  5.5% loan, Nov., 1915 * 1,000,000  
Total 1,232,600 Total 20,642,000 Total 7,933,074 Total 3,216,350 Total 30,000 Total 12,987

* The figures quoted in the table are considerably below the actual ones.


"According to calculations," said Dr. Helfferich in the Reichstag in August of this year, "the general cost of this world war for all its participants must be estimated as equal to some 300 million marks a day, i.e., to something like 100 billion marks" (Hear, Hear!). "This is such a gigantic destruction and shifting of values as world history has never known."14) It is needless to say that the figures quoted by the "Marshal of Finance," Dr. Helfferich, give no idea as to the real "general cost of the war," for they speak only of the immediate war expenditures made by the states. However, in this connection we are interested in these particular expenditures, and it will not be out of place to quote a few more detailed figures concerning military loans. The states are also spending part of their ordinary income on the war, still the following figures may give some idea as to the size of the military expenditures.15) We use the computations quoted in No. 44., Vestnik Finansov for 1915. We must emphasise, however, that the figures here quoted tell us only about the war loans of the six largest states, whereas the number of states involved in the war is twelve. Where such unprecedented expenditures are made, and for no other purpose but for the further destruction of values, the state debt must grow enormously and the financial organisation of the state is entirely deranged. The equilibrium is so seriously impaired that additional sources to replenish the treasury must be looked for, if the colossal expenditures which will remain even after the war (payment of interest on state loans, aid for the families of invalids, etc.) are to be covered. In Germany, to take only one country, the income of the state will have to be increased more than twice.16) It appears impossible to cover the expenses out of the usual sources of state income (state owned enterprises, direct and indirect taxation), and the states will be compelled to extend their monopolies. The leading circles of the bourgeoisie become more and more reconciled to this idea, for in the final analysis the strength of the state is their own strength. This is what the "scientific" organ of the German banks has to say through the mouth of Dr. Felix Pinner:

The basic differences of opinion which express themselves sharply as to monopolies in general, and one or the other monopoly in particular, have disappeared over night [über Nacht verschwunden], and almost everybody agrees that such proposed monopolies as monopolies on alcohol, kerosene, electricity [more precisely: electric current-N.B.], matches, perhaps even coal, salt, potassium, tobacco, and insurance, are near realisation.17)

Under such conditions the further expansion of monopoly tendencies is very probable. Gas production, as we know, is competing with the production of electric power, consequently a gas monopoly is also probable. More probable still is the expansion of state power over enterprises contiguous upon monopolies. When the coal industry is monopolised by the state, the production of pig iron is affected. Such examples could be quoted in large numbers. The question then arises as to whether all such proposals would not remain on paper, whether they would not encounter the resistance of the bourgeoisie.

We have just indicated the change of tone in relation to state monopolies. Of course, even now there are sub-classes of the bourgeoisie, whose interests are clashing in one or the other respect. It is a fact, however, that economic evolution, fortified at this point by the war, must and does lead to a situation where the bourgeoisie as a whole is more tolerant regarding monopolistic interference of the state power. The basic reason for this change is the ever growing closeness between state power and the leading spheres of finance capital. State and private monopoly enterprises merge into one entity within the framework of the state capitalist trust. The interests of the state and the interests of finance capital coincide more and more. On the other hand, a maximum of centralisation and a maximum of state power are required by the fierce competitive struggle on the world market. The latter two causes on the one hand, and fiscal consideration on the other, form the main factors making for state organisation of production within capitalist society.

The bourgeoisie loses nothing from shifting production from one of its hands into another, since present-day state power is nothing but an entrepreneurs' company of tremendous power, headed even by the same persons that occupy the leading positions in the banking and syndicate offices. The difference is that, under such conditions, the bourgeoisie receives its income, not from the office of a syndicate, but from the office of state banks. On the other hand, the bourgeoisie is gaining from such a shift, since only when production is centralised and militarised, i.e., organised by the state, can the bourgeoisie hope to emerge victorious out of the bloody combat. Present-day war needs more than mere financial "funding." A successful war requires that factories and plants, mines and agriculture, banks and stock exchanges-everything should "work" for the war. "Everything for the war," is the slogan of the bourgeoisie. The exigencies of the war, and of imperialist preparations for war, force the bourgeoisie to adopt a new form of capitalism, to place production and distribution under state power, to destroy completely old bourgeois individualism.

Of course, not all war time measures will remain after the war. Such measures as bread and meat rations, the ban on the production of a number of commodities, the ban on exports, etc., will disappear with the conclusion of peace. There is no doubt, however, that the tendency of the state to take hold of production will keep on increasing. Co-operation between the state and private capitalist monopolies after the type of "mixed enterprises" will probably be introduced in a number of industries; in military industries, the purely state type of production will probably remain. Cunow very correctly defines the future of the national economies as "domination of banking financiers, growth of international concentration, increase of state control and state enterprises."18)

The processes of industrial organisation and of the increase in the economic activities of the state raises the general question as to the social meaning of this-to use Professor Jaffé's expression-change in the very principle of the economic structure. So-called State Socialists, whose adherents are recruited mainly from the councils of the German university professors, were the first to feel a rise of spirits. Karl Ballod in full earnestness speaks of the rebirth of Utopia, assuming as he does that state monopolies, etc., by themselves introduce a new structure of production.19) Jaffé says that the militarisation of economic life differs from Socialism mainly in that the term "Socialism" is connected with the "eudemonistic trend of thought," whereas in war the individual is entirely given to the service of the "whole."20) In the writings of Professor Krahmann we find a very curious argumentation. The future of the mining industry is thus visualised by the professor:

The present powerful effect of all the measures in support of the state and in defence of the country, introduced by the state power because of military considerations, brings us, in the sphere of mining as well as elsewhere, considerably nearer to State Socialism. The road, however, is not that which, prior to the war, was feared by some, expected by others. This is not internationally diluted but nationally consolidated Socialism. Such a Socialism we now approach. This is not democratic Communism, less so aristocratic class domination, but it is a nationalism that reconciles the classes. Since August 1, 1914, we have been approaching it with gigantic strides, such as would have been formerly considered entirely impossible.21)

What is that picture of present-day "State Socialism" which appears to be a "change in principle"? From the foregoing analysis the answer seems to follow with irresistible logic: We have here the process of accelerated centralisation within the framework of a state capitalist trust, which has developed to the highest form, not of State Socialism, but of State Capitalism. By no means do we see here a new structure of production, i.e., a change in the interrelation of classes; on the contrary, we have here an increase in the potency of the power of a class that owns the means of production in quantities hitherto unheard of. To apply to such a state of affairs a terminology fit for post-capitalist relations, is not only very risky, but also highly absurd. "War Socialism" and "State Socialism" are purposely being circulated with the direct intention of misleading the people and of covering up by a "good" word a very ungainly content. The capitalist mode of production is based on a monopoly of the means of production in the hands of the class of capitalists within the general framework of commodity exchange. There is no difference in principle whatsoever whether the state power is a direct expression of this monopoly or whether the monopoly is "privately" organised. In either case there remains commodity economy (in the first place the world market) and, what is more important, the class relations between the proletariat and the bourgeoisie.22)

It follows from the above that (as far as capitalism will retain its foothold) the future belongs to economic forms that are close to state capitalism. This further evolution of the state capitalist trusts, highly accelerated by the war, is reflected, in its turn, in the worldwide struggle among state capitalist trusts. We have seen above how the tendency to turn capitalist states into state capitalist trusts found its reflection in the mutual relations of the states. Monopoly tendencies within the "national" body have called forth tendencies to monopolise territories outside the home state by means of annexations; this has sharpened competition and its forms terrifically. With the further progress of internal centralisation, this acute situation will become more acute by leaps and bounds. Added to this is the rapid narrowing of the free field for capital activities. There is, therefore, not the slightest doubt that the near future will be fraught with the most cruel conflicts, and that the social atmosphere will not cease being saturated with war electricity. One of the outward expressions of this circumstance is the extraordinary growth of militarism and of imperialist sentiment. England, the land of "freedom" and "individualism," has already established a tariff and is organising a standing army; its state budget is being militarised. America is preparing war activities on a truly grandiose scale. The same thing is going on in Germany, in France, in Japan, and everywhere. The period of an idyllic "peaceful" existence has sunk into Lethe; capitalist society is whirling in the mad hurricane of world wars.

It remains for us to say a few words about the future of class relations, since it is perfectly clear a priori that the new forms of capitalist relations cannot fail to be reflected in the situation of the various social groupings. The fundamental economic question is, What will be the fate of the various parts of the "national" income? In other words, the question consists in how the "national" product will be distributed among the various social classes, in the first place how the "share" of the working class will fare. We presume that the process is going on more or less alike in all the foremost countries, and that what is true for "national" economies is true for world economy.

A deep-going tendency towards decreasing real wages must be noted first of all. High prices resulting from the disparity of capitalist production not only will not become lower but, on the contrary, they will keep on rising (we have in mind prices that are distinct from specific "war time" dearth). The disparity between world industry and world agriculture will grow more and more, for we have entered an era of an accelerated industrialisation of agrarian countries. Growing militarisation and wars will immensely tighten the tax press, straining it to the utmost; "everything taxable will be taxed; everything taxed will bear the greatest possible tax burden" says a Russian trade paper.23) And this is not an empty phrase. Where non-productive expenditures are colossal and the state budget is being reconstructed, increased direct and indirect taxation is inevitable. The mounting cost of living results also from other causes: first, prices are increased due to the increased tariff rates; second, there are monopoly prices in trustified industries; state monopolies in their turn will raise prices for fiscal reasons. The result will be that an ever greater part of the national product will be retained by the bourgeoisie and its state.

The opposite tendency, springing from the working class, will, on the other hand, be confronted with a growing resistance on the part of the consolidated and organised bourgeoisie that has grown to be one with the state. Workers' gains that were a usual phenomenon in the former epoch, become almost impossible. There takes place, not a relative, but also an absolute worsening of the situation of the working class. Class antagonisms become inevitably sharpened. This will take place also for another reason. State capitalist structure of society, besides worsening the economic conditions of the working class, makes the workers formally bonded to the imperialist state. In point of fact, employees of state enterprises even before the war were deprived of a number of most elementary rights, like the right to organise, to strike, etc. A railway or postoffice strike was considered almost an act of treason. The war has placed those categories of the proletariat under a still more oppressive bondage. With state capitalism making nearly every line of production important for the state, with nearly all branches of production directly serving the interests of war, prohibitive legislation is extended to the entire field of economic activities. The workers are deprived of the freedom to move, the right to strike, the right to belong to the so-called "subversive" parties, the right to choose an enterprise, etc. They are transformed into bondsmen attached, not to the land, but to the plant. They become white slaves of the predatory imperialist state, which has absorbed into its body all productive life.

Thus the principles of class antagonisms reach a height that could not have been attained hitherto. Relations between classes become most clear, most lucid; the mythical conception of a "state elevated above classes" disappears from the peoples' consciousness, once the state becomes a direct entrepreneur and an organiser of production. Property relations, obscured by a number of intermediary links, now appear in their pristine nakedness. This being the situation of the working class in the intervals between wall, it will undoubtedly be still worse in war time The Economist, the organ of the English financiers, was perfectly right when it wrote at the very beginning of the war that the world was entering an era of the most strenuous social conflicts.


1) The growth of American export for the first four months of 1915 compared with the first four months of 1914, may be seen from the following figures (in millions of dollars): January, 1914, 204.2; January, 1015, 267.9; February, 173.9 and 299.8 respectively; March, 187.5 and 296.5 respectively; April, 162.5 and 294.5 (Vestnik Finansov, No. 16). Mr. Pratt, the head of the Bureau of Foreign and Domestic Commerce, characteristically remarked that the country faced a new period wherein the expression "domestic market" would seem archaic compared with the slogan of a world market (Vestnik Finansov, No, 16).

2) M. Bogolepov: "American Capital Market," in Vestnik Finansov, 1915, No. 39, p. 501. Cf. his articles on the same subject in Vestnik Finansov, Nos. 37 and 38.

3) At the very beginning of the war, Kautsky, in the Neue Zeit , called attention to the growing importance of America.

4) Felix Pinner: "Die Konjunktur des wirtschaftlichen Sozialismus," in Die Bank, April, 1915.

5) War loans signify nothing but a consuming of the parts of capital that are being worn out; those parts are replaced by paper; the real values in their material form are wasted in a non-productive way by being fired into the air.

6) Cf. Cunow: "Vom Wirtschaftsleben," in Neue Zeit, 33,2, No. 22 ("Der Bank- and Geldmarkt im ersten Kriegsjahr"). Also Dr. Weber: "Krieg and Banken," in Volkswirtschaftliche Zeitfragen (Krieg and Volkswirtschaft), Heft 7, 1915, P. 27.

7) In relation to Germany, see Johann Miller: "Nationalökonomische Gesetzgebung. Die durch den Krieg hervorgerufenen Gesetze, Verordnungen, Bekanntmachungen, u.s.w.," in Jahrbücher für Nationalökonomie and Statistik for 1915.

8) Cf. Edgar Jaffé: "Die 'Militarisierung' unseres Wirtschaftslebens," in Archiv für Sozialwissenschaft and Sozialpolitik, 1915, Bd. 40 B, Heft 3.

9) Pinner: "Organisierte Arbeit," in Handels-Zeitung des Berliner Tageblatts, Aug. 23, 1915.

10) We quote from the Vestnik Finansov, 1915, No. 24, p. 518.

11) Cf. Yves Guyot: "Les Problèmes économiques après la guerre," in Journal des économistes, Aug. 15, 1915.

12) Cf. E. Meyer: "Die Drohung mit dem Zwangssyndikat," in Neue Zeit, 33,2, No. 18; also "Die Bergwerksdebatte im Reichstag," in Handels-Zeitung des Berliner Tageblatts, No. 435, Aug. 26.

13) Dr. Weber: Krieg and Banken, p 14.

14) We quote from the Vorwärts of Aug. 21, 1915.

15) Those figures are insufficient also in another respect: the states resort to the printing press, i.e., they issue paper money in increasing quantities, which is also an internal loan, but without interest. Thetable indicates that up to August, 1915, Austria-Hungary obtained some 13 billion crowns (and since the figures relating to Germany are brought up to, and include, September, 1915, one may assume that the figures concerning Austria-Hungary extend up to October), whereas the military expenditures of the Austro-Hungarian government amounted up to the end of August to nearly 18 billion crowns, and up to the end of September to more than 19 billion crowns. Obviously, there must have been some sources to cover the expenses! There is no doubt, therefore, that the figures quoted in the table are considerably below the actual ones.

16) Cf. Adolf Braun in Neue Zeit, 33, 1, p. 584.

17) Felix Pinner: "Die Konjunktur des wissenschaftlichen Sozialismus," in Die Bank, April, pp. 326-327. On separate monopolies in Germany, see Adolf Braun: "Elektrizitätsmonopol," in Neue Zeit, 1915, Nos. 19 and 20; also Edmund Fischer: "Das Werden des Elektrizitätsmonopols," in Sozialistische Monatshefte, p. 443 ff.; partly Kautsky: "Zur Frage der Steuern and Monopole," Neue Zeit, 1914-15, 1, p. 682 ff.

18) H. Cunow: "Die Weltwirtschaftgestaltung nach dem Kriege," in Correspondenzblatt der Generalkommission der Gewerkschaften Deutschlands, Sept. 11, 1915, No. 37. Cunow arrives at a wholely incorrect liberal conclusion in this article.

19) Karl Ballod: "Einiges aus der Utopienliteratur der letzten Jahre," in Archiv für die Geschichte des Sozialismus und der Arbeiterbewegung, herausgegeben von Grünberg, 6. Jg. Heft I, pp. 117-118.

20) Jaffé, l.c., p. 523.

21) Max Krahman: Krieg and Montanindustrie, pp. 22-23. The opposite view is maintained by Liefmann (see his Stehen wir dem Sozialismus näher?). His book is generally directed against illusions; this he does not wish to conceal.

22) Were the commodity character of production to disappear (for instance, through the organisation of all world economy as one gigantic state trust, the impossibility of which we tried to prove in our chapter on ultra-imperialism) we would have an entirely new economic form. This would be capitalism no more, for the production of commodities would have disappeared; still less would it be socialism, for the power of one class over the other would have remained (and even grown stronger). Such an economic structure would, most of all, resemble a slaveowning economy where the slave market is absent.

23) Torgovo Promyshlennaya Gazeta, 1915, No. 217.