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This eBook from the Gutenberg Project consists of approximately 207 pages of information about The Economic Consequences of the Peace.

Germany not only furnished these countries with trade, but, in the case of some of them, supplied a great part of the capital needed for their own development.  Of Germany’s pre-war foreign investments, amounting in all to about $6,250,000,000, not far short of $2,500,000,000 was invested in Russia, Austria-Hungary, Bulgaria, Roumania, and Turkey.[4] And by the system of “peaceful penetration” she gave these countries not only capital, but, what they needed hardly less, organization.  The whole of Europe east of the Rhine thus fell into the German industrial orbit, and its economic life was adjusted accordingly.

But these internal factors would not have been sufficient to enable the population to support itself without the co-operation of external factors also and of certain general dispositions common to the whole of Europe.  Many of the circumstances already treated were true of Europe as a whole, and were not peculiar to the Central Empires.  But all of what follows was common to the whole European system.

III. The Psychology of Society

Europe was so organized socially and economically as to secure the maximum accumulation of capital.  While there was some continuous improvement in the daily conditions of life of the mass of the population, Society was so framed as to throw a great part of the increased income into the control of the class least likely to consume it.  The new rich of the nineteenth century were not brought up to large expenditures, and preferred the power which investment gave them to the pleasures of immediate consumption.  In fact, it was precisely the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished that age from all others.  Herein lay, in fact, the main justification of the Capitalist System.  If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a regime intolerable.  But like bees they saved and accumulated, not less to the advantage of the whole community because they themselves held narrower ends in prospect.

The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a Society where wealth was divided equitably.  The railways of the world, which that age built as a monument to posterity, were, not less than the Pyramids of Egypt, the work of labor which was not free to consume in immediate enjoyment the full equivalent of its efforts.

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