th the increase of capital, the competition for safe
investments, and the consequent fall of the interest rate, the principal
which today earns a comfortable income would not then support a bare
existence. Saving toward old age would cease among the working classes.
And as the merchant cities of Italy crashed when trade slipped from their
hands on the discovery of the new route to the Indies by way of the Cape
of Good Hope, so will there come times of trembling for such nations as
have failed to grasp the prize of world-empire. In that given direction
they will have attained their maximum development, before the whole
world, in the same direction, has attained its. There will no longer be
room for them. But if they can survive the shock of being flung out of
the world's industrial orbit, a change in direction may then be easily
effected. That the decadent and barbarous peoples will be crushed is a
fair presumption; likewise that the stronger breeds will survive,
entering upon the transition stage to which all the world must ultimately
come.

This change of direction must be either toward industrial oligarchies or
socialism. Either the functions of private corporations will increase
till they absorb the central government, or the functions of government
will increase till it absorbs the corporations. Much may be said on the
chance of the oligarchy. Should an old manufacturing nation lose its
foreign trade, it is safe to predict that a strong effort would be made
to build a socialistic government, but it does not follow that this
effort would be successful. With the moneyed class controlling the State
and its revenues and all the means of subsistence, and guarding its own
interests with jealous care, it is not at all impossible that a strong
curb could be put upon the masses till the crisis were past. It has been
done before. There is no reason why it should not be done again. At the
close of the last century, such a movement was crushed by its own folly
and immaturity. In 1871 the soldiers of the economic rulers stamped out,
root and branch, a whole generation of militant socialists.

Once the crisis were past, the ruling class, still holding the curb in
order to make itself more secure, would proceed to readjust things and to
balance consumption with production. Having a monopoly of the safe
investments, the great masses of unremunerative capital would be
directed, not to the production of more surplus val