FINANCING THE WAR

NZ Truth, Issue 508, 13 March 1915, Page 6

FINANCING THE WAR

The Australasian Aspect

Dosperate Dangers to Democracy

One of thp most important effects of the war po fnr us Australia is concerned Ceays Sydney "Truth") is that it ha« caused the Federal Labor Government to make a notable departure from Labor principles m accepting a loan from the Imperial Government for the purpose, primarily, of financing Australia's participation In the great conflict. The Uinor-ruled Stftten of New South Wales. Tasmania, and Western Australia. no\r being helped ovf-r the financial ntlie by the Federal Government, have similarly fallen from fjrace. Th« old, austere Labor doctrine — "No borrow I nir. except for reproductive worka" —sound and Hum* iih it wjij*. ha.*t bo'-n thrust into the lumbor room of oblivion. The emersency was admittedly great; but to

)the impartial observer it would appear that the Labor politicians of Australia have abandoned the principles they professed to cherish without regard to the consequences. By no stretch of the imagination can war be regarded as a "reproductive work." The products of war are ruin and desolation, which yield no return but m blood and tears. Even the acquisition of new territory is not a gain, for this entails an increase m governmental expenses, as Australia is already learning, to her cost. ,* # # The old Labor opposition to public loans . was well founded. From the standpoint of the people, the great objection to loans m general, and to war loans m particular,- is that their inevitable effect is to rivet the shackles of capitalism upon the masses. What does a national loan mean but that the many are forced to pay tribute to the few? The wealth of the few is increased by the amount of that tribute while the poverty of the many is increased m corresponding ratio. If the process can be repeated often enough, or drawn out long enough, the ultimate result must be that the few will own all, and the many will own nothing. That this is no fairy tale, but solid fact, may be seen, from the history of Great Britain— the wealthiest and most poverty-stricken nation m the civilised world tc-day. No other country presents such startling contrasts of wealth and poverty. This "confrontation of rich and poor," as K^arl Marx termed it, or the "increase of want with the increase of wealth," as Henry George described it, has gone on side by side with the rise of the National Debt to its present huge proportions. The National Debt of Great Britain represents its expenditure on the wars. of the past. The people of England are still paying tribute, m the form of interest, to the capitalists of to-day for the wars waged for the beueflt of other capitalists m the dim and distant past. By those wars the capitalists of the past profited immensely, and the capitalists of to-day still profit, while the mass of the people bear the burden of the. increasing taxation rendered necessary to pay the tribute. £he National Debt of England and the national loans of Australia constitute the most cunning instrument ever devised for pauperising the people for the enrichment of the capitalist class. #' # # It must always be borne m mind that m the modern State the financial power is dominant. A country that is owned by the foreigner (per medium of loans) is controlled by the foreigner; and a country that is owned by the local capitalists is controlled by those capitalists. True democracy is impossible m a capitalistic State, no matter how democratic may be the forms of government. . Emphatic endorsement of this view may be found m an illuminating article by that well-known English writer. Hilaire Belloc, m a recent issue of the "British Review." j "Capitalism breeds, servitude," declares Mr. Belloc, who puts the same idea J more fully m these words: "The attempt to maintain political freedom m a society the bulk of which has been deprived of property is impossible." He then .puts, forward the following proposition— not as an idle assertion, j but as a plain matter of fact:—-'. .'■"; ■, Modern England' beyond . any ■other country, Christian or Pagan, j '.. past or present, is, that country/in which the . largest, number- of ,, .free ,n citizens have,, by- some' historical:: process or other, come,at;last ib l)'p; .*.:disp6si3es.s.ed of all ,-': ' counting,, 'and to ;.be ';prolctatiat c .in coiiaJtiriin. „-.: •■> '':U; ■-'»'• v^', ■ - ~-.J-r#; >.:;'•:, :#:;K---X-i4--; i; >: This /proposition jji, \ as Mr. Belloc sayS, plain/ incontrovertible fact,: which can no more be denied than the statement that Great Britain is an island or that Europe is at this moment suffering from a terrible war. In endeavoring to discover tho causes which havo brought the old country to this parlous pass — which have, m fact, turned Britain from a State economically ami politically free- into a State economically (and therefore politically) servile — Mr. Belloc is inevitably led to the National Debt: — The succession of deliberate and voluntary acts of nggreasion upon tho part of thr rich, of insufficient resistance nn the part, of the poor, «- are e!tuir; and of these various stops, which result m the ruin of .small property to the advantage, of the few, the growth of the National Debt, particularly on the occasion of great wars, is most marked. . . We are acutely preaented to-day ' with the question whether we shall nor shall not allow the present occasion to be one m which the last step of Capitalism, its completion m this country, shall be achieved by way of the coming war loans. This question has been answered since the above was written. Mr. Belloc's solemn warning went unheeded. The politicians gave way to the financiers m the raising of war loans, and In so doing riveted the last link of the chain of Capitalism upon the limbs of the English worker. » » .# The way m which Capitalism works towards enslaving the people by means of public loans will be realised from two or three illustrations given by Mr. Belloc, which may be briefly paraphrased here. In the Middle Ages the universal principle wan that any extraordinary national expenditure must be met us rapidly as possible by taxation. There are, In fact, only two ways m which a community fighting for its life can meet abnormnl expenditure. The first way is to take what is wanted from its c.tlzena; the second way is to borrow, promising future tribute to the lenders. A poor State has no option but to borrow; but rich and prosperous communities like England, France, and Germany (and, it might bo added, Australia) have no need of foreign aid. If they had the courage to seize whut they wanted las France did during the Revolutionary Wars) there would be no need to raise public louiih. By confiscation, the rich alone would suffer; but l>y the borrowing: system the burden falls mainly upon the alreudy oyerburdened workera. Worst of all. the loans (under present^conditions) are rained from tho wealthy clauses, unrt all the rent of the community is laid under tribute for nn Indefinite period. By this mean*? the power of the tribute-levying capitalist is enormously Increased, while inn jH-tiy capitalist, the small owner, the small farmer, an* thrust back into the ranks of the proletariat. • • • All lhi« is undeniably true; but Mr. Uelloc lacks the courage of his convictions when he comes to the question of remedy. "It is not practical politics." he say*, "to suggest confiscation of ijreat wealth In order to meet the strain of a great war. In a simpler and more heroic ago the thing would not only b«« feasible, but obvious." Instead or that "heroic remedy" of confiscation, h« proposes merely an nltorutlon of the^ condition under which the war lonnK nro rained, ho oh to enHnrr thru the loans shall bi.» taken up by the j>eopk> n« n whole, Jn.m.ad of by v few big capitalistic Ho suggests thut the loaus sliuultl bu toucd la very email

denominations, so as to bring tho Invoßtment within the scope of tho poorest; that the requirements of the small Investors should be satisfied before the wealthy applicants are attended to: that Savings Hank depositors should be Invited to transfer their deposits to the national loans at higher rates of interest; and that applications should be received, without brokerage or commission^ at every po.st office m tho kingdom. These conditions, while not removing the evils of public borrowing, would certainly minimise them to a considerable extent, und are therefore well worth- the attention of our Australian Governments In raising future loans within the borders of the Commonwealth. o # » The lesson which Australia has to leurn, however, is to set her face sternly against public borrowing except whero it Is absolutely necessary. With regard to the? loans already raised, the duly of the tiovernments, both Federal and State, is to so adjust the taxation rendered nccenaary by such loans as to place the main 'burden upon tho shoulders of tho wealthy. It In the capitalistic classes who profit by war, and they should be made to pay tho piper who play the battle lunes. , All around ut» to-day we see tho cormorants vt Capitalism battening upon the war. The exploiters have cornered, or are endeavoring to corner, tho commodities upon which the peoplo depend for their very existence. Prices are advancing by leaps and boundn, while employment, is diminishing. Unless re.MOluiu action Is taken at once. Australia will be faced with a crisis, compared to which all tho crises of tho past will Keem insignificant. And one of tlio forms which that action must lake mtiKt bo tho readjustment of (Ji«» burden of taxation, Bo that Hie cost *>T Australia's participation m ih<« Ktcat war will bo borne nmJnly by thns«>wh» havo most to Ruin and mo«t to Jo*)c by tho iaauu of thu «*aullct.