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'wealth' of each member of the group, which are useless unless dynamically employed. Nor is every such venture successful. When it succeeds it is creative of further 'wealth,' which again must be used. No well-managed business distributes all its
profits.' These have to be conserved for the sustenance and extension of the business, otherwise it is ruled out and is no longer competitive.
Between the associates in a competitive unit, though there is no true partnership in the legal sense of sharing money losses as well as profits, there is something like it, because the man who works physically or mechanically gives all he has to give, or should give it, and suffers acute loss through unemployment, of which he naturally has an intense fear. There is an equally intense fear on the part of those who finance and direct the business that unforeseen disaster may overwhelm them. All the associates, therefore, have a strong incentive to give their best work, and to provide reserves against times of trouble. These considerations operate towards efficiency in the never-ending process of competition.
The question now is, ' Can Society hold together without this sort of Competition ?' Man is gregarious, and must be associated with others to form a unit. If he has undoubted gifts and is a real worker, he gathers his own unit and, by service, leads it. If he is forced by circumstances, or is less able and ambitious, he joins the group controlled and sustained by wills more forceful and far-sighted than his own, and serves in his own way. Each of the above persons may think he is acting according to his own interests, but each is impelled or restrained by other forces, and each man's interest is the interest of all.
Trade (without which no country can, in a civilised sense, exist) originates by the efforts of men persisting in the face of loss and discouragement, and without State aid. It develops by proving its fitness in the face of competition, and can only succeed if the associates keep faith with each other. Confidence in an unfaithful man is like a broken tooth or a foot out of joint.'
In the early days of iron ships two young Scotchmen sold a little grocery business and went to work on the Clyde. They introduced into India the first vessels operated by steam to trade round the coasts and to ply on the great rivers. As time went on business grew in indigo, tea, cotton, jute, and other merchandise. Mills were built, which give direct or indirect employment to millions, and distribute their output to millions. One of those men spared some of his energies for a railway in East Africa, and so helped to lay the foundations of further enterprise. That first steam vessel brought to India is now represented by the largest competitive combination of freight and passenger ships in the world. From the same little place in Scotland, in similar circumstances of achievement of the impossible, came one of the largest packing businesses in the United States. The well-known case of Lord Strathcona, who spent a lifetime in the frozen solitudes of Hudson's Bay before he could emerge to take his part in the making of the Canadian Pacific Railway, which meant the making of Canada, is another instance. Achievements like these, and they are being accomplished everywhere to-day, are of the very spirit of competition. Most of the pioneers fall by the way, and others arise to face inertia, prejudice and active opposition, and in their turn go down without deriving any material benefit for themselves. They are the unsuccessful competitors who seem to say
Exoriare aliquis nostris ex ossibus ultor. As regards the money lost in unsuccessful ventures, nobody says anything about it. It has gone to supply services, furnish employment, and build up experience.
British trade has been compared to a giant crane with many arms, such as shipping, banking, insurance and other agencies, reaching out to the ends of the earth, and depending upon thrift, hard work, and commercial vision. This is a mechanical comparison, which with a little imagination gives us a glimpse of a mysterious shuttle, weaving the threads of international requirements, directed by innumerable competing interests, and controlled by economic laws which are only understood when they have worked out their consequences. The delicate mechanism of the crane and the activities of the shuttle may be easily wrecked.
England is a little country of 128,000 square miles and about forty-five millions of population, with one harbour for each day in the year, buying most of her food and all her raw materials from competing producers. Japan, with an area of 148,000 square miles and ten millions more of population, is in much the same position except as regards food production. Emigration is the crying need of both countries, and overseas trade the natural métier of both, England has to make her living on the sea and by means of the sea. Is it seriously contended by anybody that competition can be abolished ? Obviously it is of the essence of society everywhere on this globe.
But it will be said by some of our Eastern friends that the modern competitive industrial system is not applicable to the East. Mr. Ghandi has steadfastly maintained that, and he has many followers. The answer is given by the immense material benefits conferred in recent years upon the peoples of Eastern countries by the application of that system. Famines are combated. Means of communication give new opportunities to everyone. Industrial employment and the opening out of new markets for agricultural
Vol. XCIII-No. 554
produce help to improve the standard of living. These things could not have been done without competition.
The real difficulty arises in the transition from a state of society in which the Family is the unit to one in which the Individual, with new aspirations, becomes the unit. That process must necessarily be a slow one. It is to be hoped that it will not involve the destruction of that family life, and that universal benevolence towards the poor, of which Eastern countries may justly be proud.
For countless ages China was wrapt in profound studies. Japan, after a brief experience of Western civilisation, closed her doors for 300 years. No ship could be built with more than one mast. But the latter country, only seventy years ago, reversed this policy, and is now a civilised competitor. China in time will also be one. India, torn by internal conflicts, welcomed the merchant, and is now essaying the experiment of political government. With mills at Bombay and Ahmedabad, the great Tata ironworks, and other activities, owned and controlled by Indians, she is already a civilised competitor. The argument need not be developed with reference to Canada, Australasia, Africa, and the two Americas. Res ipsa loquitur.
II. Does Competition, if uncontrolled or unregulated, lead to Wars ? As our modern industrial system is only a hundred years old it may be said that all the old wars ought to be ruled out of this discussion. If so, we are limited to the recent war, because competition in its modern acute form is very recent. But the inquiry is not without profit, as will presently be acknowledged.
On examining some of the wars of the past, we who stand on the perilous brink of future wars immediately discover that wars cannot be superficially described as dynastic or militarist, wars of autocrats and Condottieri, wars of religion and so forth, because they always had some underlying cause besides the personal wishes of rulers or the ambitions of generals.
It is quite clear that many of the old wars arose out of the necessity for originating and developing trade, the necessity for protecting commerce against depredations, that these were the main factors which induced peoples desirous of expansion to go to war, and that these factors repeat themselves in our own day.
War's a bloody game Which, were their subjects wise, kings would not play at. It is mere loose thinking to say that the people were always led into war by their rulers.
Another conclusion, equally plain, is that commerce in old days was preyed upon, sought protection from the great ones of the earth, and persistently aimed at a monopoly.
The story of Mediterranean trade seems clear enough. Cretans and Phænicians were engaged in it at a very early date. Possibly the Hebrews might have become sea traders had they gained the coast. It is now their privilege to trade everywhere. But the opportunity they lost when they left the corn of Egypt for the corn of Palestine was eagerly taken up by others, and resulted in the struggle for the corn and wine and oil of Sicily between Greek and Carthaginian, developing into the larger conflict for the world's trade between Carthage and Rome. This is the story of more than a thousand years. In the intervals of actual war the peoples of the competing countries appear to have traded together. The Phænicians seem to have kept their trade routes secret as long as they could. The little Greek city states also regarded trade as a monopoly, constantly fought one another, and failed to co-operate against the common enemy. The Carthaginians, always pushing westward to open up new markets, felt at last that a stand must be made against the rising power of the Republic, and in the end Rome wiped Carthage out.
Under the strong hand of Rome, Mediterranean trade must have been fairly safe. None of her barbarian enemies were sea people. When the centre of power shifted to Byzantium, trade must have continued under predatory conditions, accentuated with the rise of the Saracen power.
In the Middle Ages trade was a privilege claimed by various cities and bodies of merchants, a monopoly protected by rulers, who collected taxes and with that money employed mercenaries. The seas were not safe. Thus the Barons of Ravello, from their crag above Amalfi, protected their commercial settlements in Palermo, Naples, and other harbour cities against the Saracens, obtained a monopoly of the dye trade, came to terms with the Normans, issued a maritime code known as the 'Tavole Amalfitane 'regulating nautical affairs and the commerce of the Mediterranean, and finally succumbed to the armed competition of the great Italian commercial republics. These again, weakened by conflict with the Moslem, vielded the Eastern trade to the Portuguese and the Dutch, who in their turn gave place to the French and the British.
The Crusades, advertised as wars of religion, were successively undertaken to set up barriers against the penetration of Islam with its consequent domination of the Mediterranean and Eastern trade routes, and, as such, appealed to all Christian peoples. The blows dealt by Castile and Aragon to the Moors enabled Spain eventually to discover America, though, no doubt, such blows were struck in the name of the Cross. And similar blows were dealt, about the year 1571, against the waning power of the Crescent, when Don John of Austria, the last of the Crusaders, won his naval victory at Lepanto, and when the Turk was rolled back from the gates of Vienna. The wars of Spain against the Low Countries were an assertion of her power to hold corsairs in check and to impose taxes upon an enterprising maritime nation which was capable of interfering with the profitable trade arising out of the discovery of America, which enriched the churches of Spain with priceless works of art. The Spanish war upon England, long averted by the diplomacy of Elizabeth and Burleigh, was waged against her most deadly competitor for the Admiralty of the Atlantic. The religious side of all these wars has been freely advertised, but their real nature, and the concurrence therein of the peoples concerned, cannot be doubted.
One cannot help thinking that the experience of individual merchants, who found their initiative checked and their enterprises ruined by the exactions of rulers and the depredations of corsairs, brought about the co-operation of consumers in all countries, and that the powerful aid of the Church was invoked to induce Governments to wage what were really commercial wars. Huguenots driven from their own country gave an object-lesson in the creation of new industries. Jacques of Tours, despoiled of all his possessions by a short-sighted ruler, fled to an island in the Mediterranean, and left his customers unsatisfied. Jews expelled from England transferred their activities to Spain. In this way a commercial sense was created, and people got to know the value of the undisturbed interchange of products, under the ægis of chambers of commerce, through the agency of bills of exchange then first used.
Coming nearer to our own time, Cromwell's victories over the Dutch gave us a chance to secure the carrying trade of the seas, and Job Charnock settled on the banks of the Hooghly, where for two centuries Portuguese, Danes, Dutch, and French had their factories. In the latter part of the eighteenth century English merchants, finding their trade with the West Indies incapable of expansion, turned definitely eastward. This is the time when the commercial laws of England were first put into shape by a great Chief Justice, Lord Mansfield, and one may read in Douglas' Reports his decisions on Banking, on Bills of Exchange, Insurance, Shipping, and other commercial contracts. The era of patents and inventions, of railways, of steam and electricity came afterwards. But there were those who knew what was coming, and Napoleon was one of them.
The Napoleonic Wars undoubtedly involved the ambition of the far-sighted Corsican to carve out, through Egypt, the way to India, which had then been lost to French enterprise owing to the poor support given to Dupleix and to Admiral Suresnes. Had his dream come true, Napoleon would have turned his attention to the lands of Louisiana, too easily bartered away, and to the lost Province of Quebec.