And yet, if we except the very important item of rent, which in Berlin presses with cruel weight on the labouring classes, the general trend of the prices of the necessaries of life in Germany has been downwards, in spite of all the protectionist duties. The evidence compiled in the British official Blue-book on "British and Foreign Trade and Industry" (1903. Cd. 1761, p. 226) yields the following results. By comparing the necessary expenditure on food of a workman's family of the same size and living under the same conditions, it appears that if we take that expenditure for the period 1897–1901 to represent the number 100 we have these results:--
| Period. | Germany. | United Kingdom. |
|---|---|---|
| 1877–1881 | 112 | 140 |
| 1882–1886 | 101 | 125 |
| 1887–1891 | 103 | 106 |
| 1892–1896 | 99 | 98 |
| 1897–1901 | 100 | 100 |
Thus the fall in the cost of living of a British working man's family has been 40 points, while that of the German working man shows a decline of only 12 points. It is, on the whole, surprising that there has not been more difference between the two countries[84].
Before dealing with the new social problems that resulted, at least in part, from the new duties on food, we may point out that Bismarck and his successors at the German Chancellory have used the new tariff as a means of extorting better terms from the surrounding countries. The Iron Chancellor has always acted on the diplomatic principle do ut des--"I give that you may give"--with its still more cynical corollary--"Those who have nothing to give will get nothing." The new German tariff on agricultural products was stiffly applied against Austria for many years, to compel her to grant more favourable terms to German manufactured goods. For eleven years Austria-Hungary maintained their protective barriers; but in 1891 German persistence was rewarded in the form of a treaty by which the Dual Monarchy let in German goods on easier terms provided that the corn duties of the northern Power were relaxed. The fiscal strife with Russia was keener and longer, but had the same result (1894). Of a friendlier kind were the negotiations with Italy, Belgium, and Switzerland, which led to treaties with those States in 1891. It is needless to say that in each of these cases the lowering of the corn duties was sharply resisted by the German agrarians. We may here add that the Anglo-German commercial treaty which expired in 1903 has been extended for two years; and that Germany's other commercial treaties were at the same time continued.
It is hazardous at present to venture on any definite judgment as to the measure of success attained by the German protectionist policy. Protectionists always point to the prosperity of Germany as the crowning proof of its efficacy. In one respect they are, perhaps, fully justified in so doing. The persistent pressure which Germany brought to bear on the even more protectionist systems of Russia and Austria undoubtedly induced those Powers to grant easier terms to German goods than they would have done had Germany lost her bargaining power by persisting in her former Free Trade tendencies. Her success in this matter is the best instance in recent economic history of the desirability of holding back something in reserve so as to be able to bargain effectively with a Power that keeps up hostile tariffs. In this jealously competitive age the State that has nothing more to offer is as badly off in economic negotiations as one that, in affairs of general policy, has no armaments wherewith to face a well-equipped foe. This consideration is of course scouted as heretical by orthodox economists; but it counts for much in the workaday world, where tariff wars and commercial treaty bargainings unfortunately still distract the energies of mankind.
On the other hand, it would be risky to point to the internal prosperity of Germany and the vast growth of her exports as proofs of the soundness of protectionist theories. The marvellous growth of that prosperity is very largely due to the natural richness of a great part of the country, to the intelligence, energy, and foresight of her people and their rulers, and to the comparatively backward state of German industry and commerce up to the year 1870. Far on into the Nineteenth Century, Germany was suffering from the havoc wrought by the Napoleonic wars and still earlier struggles. Even after the year 1850, the political uncertainties of the time prevented her enjoying the prosperity that then visited England and France. Therefore, only since 1870 (or rather since 1877–78, when the results of the mad speculation of 1873 began to wear away) has she entered on the normal development of a modern industrial State; and he would be an eager partisan who would put down her prosperity mainly to the credit of the protectionist régime. In truth, no one can correctly gauge the value of the complex causes--economic, political, educational, scientific and engineering--that make for the prosperity of a vast industrial community. So closely are they intertwined in the nature of things, that dogmatic arguments laying stress on one of them alone must speedily be seen to be the merest juggling with facts and figures.
As regards the wider influences exerted by Germany's new protective policy, we can here allude only to one; and that will be treated more fully in the chapter dealing with the Partition of Africa. That policy gave a great stimulus to the colonial movement in Germany, and, through her, in all European States. As happened in the time of the old Mercantile System, Powers which limited their trade with their neighbours, felt an imperious need for absorbing new lands in the tropics to serve as close preserves for the mother-country. Other circumstances helped to impel Germany on the path of colonial expansion; but probably the most important, though the least obvious, was the recrudescence of that "Mercantilism" which Adam Smith had exploded. Thus, the triumph of the national principle in and after 1870 was consolidated by means which tended to segregate the human race in masses, regarding each other more or less as enemies or rivals, alike in the spheres of politics, commerce, and colonial expansion.
We may conclude our brief survey of German constructive policy by glancing at the chief of the experiments which may be classed as akin to State Socialism.
In 1882 the German Government introduced the Sickness Insurance Bill and the Accident Insurance Bill, but they were not passed till 1884, and did not take effect till 1885. For the relief of sickness the Government relied on existing institutions organised for that object. This was very wise, seeing that the great difficulty is how to find out whether a man really is ill or is merely shamming illness. Obviously a local club can find that out far better than a great imperial agency can. The local club has every reason for looking sharply after doubtful cases as a State Insurance Fund cannot do. As regards sickness, then, the Imperial Government merely compelled all the labouring classes, with few exceptions, to belong to some sick fund. They were obliged to pay in a sum of not less than about fourpence in the pound of their weekly wages; and this payment of the workman has to be supplemented by half as much, paid by his employer--or rather, the employer pays the whole of the premium and deducts the share payable by the workman from his wages.
Closely linked with this is the Accident Insurance Law. Here the brunt of the payment falls wholly on the employer. He alone pays the premiums for all his work-people; the amount varies according to (1) the man's wage, (2) the risk incidental to the employment. The latter is determined by the actuaries of the Government. If a man is injured (even if it be by his own carelessness) he receives payments