Great Britain is drifting unintentionally and half unconsciously into a war with the German Empire, a State which has a population of sixty millions and is better organised for war than any State has ever been in modern times. For such a conflict, which may come about to-morrow, and unless a great change takes place must come about in the near future, Great Britain is not prepared.

The food of our people and the raw material of their industries come to this country by sea, and the articles here produced go by sea to their purchasers abroad. Every transaction carries with it a certain profit which makes it possible. If the exporter and the manufacturer who supplies him can make no profit they cannot continue their operations, and the men who work for them must lose their employment.

Suppose Great Britain to be to-morrow at war with one or more of the Great Powers of Europe. All the sailing vessels and slow steamers will stop running lest they should be taken by hostile cruisers. The fast steamers will have to pay war rates of insurance and to charge extra freights. Steamers ready to leave foreign ports for this country will wait for instructions and for news. On the outbreak of war, therefore, this over-sea traffic must be greatly diminished in volume and carried on with enormously increased difficulties. The supply of food would be considerably reduced and the certainty of the arrival of any particular cargo would have disappeared. The price of food must therefore rapidly and greatly rise, and that alone would immediately impose very great hardships on the whole of the working class, of which a considerable part would be driven across the line which separates modern comfort from the starvation margin. The diminution in the supply of the raw materials of manufacture would be much greater and more immediate. Something like half the manufacturers of Great Britain must close their works for want of materials. But will the other half be able to carry on? Foreign orders they cannot possibly execute, because there can be no certainty of the delivery of the goods; and even if they could, the price at which they could deliver them with a profit would be much higher than it is in peace. For with a diminished supply the price of raw material must go up, the cost of marine insurance must be added, together with the extra wages necessary to enable the workmen to live with food at an enhanced price.

Thus the effect of the greater difficulty of sea communication must be to destroy the margin of profit which enables the British capitalist to carry on his works, while the effect of all these causes taken together on the credit system upon which our whole domestic economy reposes will perhaps be understood by business men. Even if this state of things should last only a few months, it certainly involves the transfer to neutrals of all trade that is by possibility transferable. Foreign countries will give their orders for cotton, woollen, and iron goods to the United States, France, Switzerland, and Austro-Hungary, and at the conclusion of peace the British firms that before supplied them, if they have not in the meantime become bankrupt, will find that their customers have formed new connections.

The shrinkage of credit would bring a multitude of commercial failures; the diminution of trade and the cessation of manufactures a great many more. The unemployed would be counted by the million, and would have to be kept at the public expense or starve.

If in the midst of these misfortunes, caused by the mere fact of war, should come the news of defeat at sea, still more serious consequences must follow. After defeat at sea all regular and secure communication between Great Britain, her Colonies, and India comes to an end. With the terrible blow to Britain's reputation which defeat at sea must bring, what will be the position of the 100,000 British in India who for a century have governed a population of nearly 300,000,000? What can the Colonies do to help Great Britain under such conditions? For the command of the sea nothing, and even if each of them had a first-rate army, what would be the use of those armies to this country in her hour of need? They cannot be brought to Europe unless the British navy commands the sea.

These are some of the material consequences of defeat. But what of its spiritual consequences? We have brought up our children in the pride of a great nation, and taught them of an Empire on which the sun never sets. What shall we say to them in the hour of defeat and after the treaty of peace imposed by the victor? They will say: "Find us work and we will earn our bread and in due time win back the greatness that has been lost." But how are they to earn their bread? In this country half the employers will have been ruined by the war. The other half will have lost heavily, and much of the wealth even of the very rich will have gone to keep alive the innumerable multitude of starving unemployed. These will be advised after the war to emigrate. To what country? Englishmen, after defeat, will everywhere be at a discount. Words will not describe, and the imagination cannot realise, the suffering of a defeated nation living on an island which for fifty years has not produced food enough for its population.

The material and spiritual results of defeat can easily be recognised by any one who takes the trouble to think about the question, though only experience either at first hand or supplied by history can enable a man fully to grasp its terrible nature. But a word must be said on the social and political consequences inseparable from the wreck of a State whose Government has been unable to fulfil its prime function, that of providing security for the national life. All experience shows that in such cases men do not take their troubles calmly. They are filled with passion. Their feelings find vent in the actions to which their previous currents of thought tended. The working class, long accustomed by its leaders to regard the capitalists as a class with interests and aims opposed to its own, will hardly be able in the stress of unemployment and of famine to change its way of thinking. The mass of the workmen, following leaders whose judgment may not perhaps be of the soundest but who will undoubtedly sincerely believe that the doctrines with which they have grown up are true, may assail the existing social order and lay the blame of their misfortunes upon the class which has hitherto had the government of the country in its hands and has supplied the leaders of both political parties. The indignation which would inspire this movement would not be altogether without justification, for it cannot be denied that both political parties have for many years regarded preparation for war and all that belongs to it as a minor matter, subordinate to the really far less important questions relying upon which each side has sought to win sufficient votes to secure a party majority.

Why do I discuss the hypothesis of British defeat rather than that of British victory? Because it is the invariable practice of the masters of war to consider first the disagreeable possibilities and to make provision for them. But also because, according to every one of the tests which can be applied, the probability of defeat for Great Britain in the present state of Europe is exceedingly great. Rarely has a State unready for conflict been able to stand against a nation organised for war. The last of a long series of examples was the war between Russia and Japan, in which the vast resources of a great Empire were exhausted in the struggle with a State so small as to seem a pigmy in comparison with her giant adversary. On the 10th of February 1904, the day when the news reached England that the Russo-Japanese war had begun, I gave as follows my reasons for thinking that Japan would win:—

"The hypothesis of a considerable Japanese success, at any rate at first, is considered rather than its opposite, because Japan has at present all the marks of a nation likely to do great things in war. It is not merely that she has transformed her government and her education, has introduced military institutions on the German model, especially compulsory training and that vivifying institution, a general staff. The present quarrel arises from the deliberate policy of Russia, pursuing aims that are incompatible with every Japanese tradition and every Japanese hope. The whole Japanese nation has for years been burning with the sense of wrongs inflicted by Russia, and into this war, as into the preparation for it, the whole people throws itself, mind, soul, and body. This is the condition which produces great strategical plans and extreme energy in their execution. The Japanese forces are well organised, armed, and equipped. They are intelligently led and follow with intelligence.

"Of Russia there is hardly evidence to show that the cause for which she is fighting has touched the imaginations or the feelings of more than a small fraction of the population. It is the war of a bureaucracy, and Russia may easily fail to develop either great leading, though her officers are instructed, or intelligent following of the leaders by the rank and file. But the Russian troops are brave and have always needed a good deal of beating."

Substitute Great Britain for Russia and Germany for Japan in this forecast, which has been proved true, and every word holds good except two. We now know that Russia's policy was not deliberate; that her Government bungled into the war without knowing what it was doing. In just the same way British Governments have drifted blindly into the present difficult relations with Germany. Those in England who would push the country into a war with Germany are indeed not a bureaucracy, they are merely a fraction of one of the parties, and do not represent the mass of our people, who have no desire for such a war, and are so little aware of its possibility that they have never even taken the trouble to find out why it may come. A larger section of the other party is steeped in the belief that force, violence, and war are wicked in themselves, and ought therefore not to be thought about. It is a prejudice which, unless removed, may ruin this country, and there is no way of dissipating it except that of patient argument based upon observation of the world we live in. That way I shall attempt to follow in the next chapter.