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 impelling a chronic endeavour to oversave in the sense of trying to provide an increased productive power without a corresponding outlet in the purchase of consumable goods. This drive towards oversaving is gradually checked by the inability of such saving to find any profitable use in the provision of more plant and other capital. But it also seeks to utilise political power for outlets in external markets, and as foreign independent markets are closed or restricted, the drive to the acquisition of colonies, protectorates and other areas of imperial development becomes a more urgent and conscious national policy. If this reasoning is correct, capitalism to maintain its profitable character, by utilising its new productive powers as fully as possible, is impelled to seek the help of the State in the various ways that are now so much in evidence, tariffs, embargoes, subsidies, and the acquisition or retention of colonies where the home capitalist can have advantages both for his import and export trade, with such securities in monetary matters as can be provided by imperial control.

In such a policy the trades directly or indirectly connected with the production of armaments have a twofold function. On the one hand, they batten upon the public expenditure needed to sustain a spirited foreign policy. On the other hand, they evoke a corresponding “defensive” policy in other countries to which they contribute by profitable supplies of arms and ammunition — thus producing a growing competition in costs of “defence.” It is sheer effrontery for well-informed officials and directors of armament firms to deny that pressure is exerted by these firms in political quarters for the enlargement of their profitable operations, and that the employment by these firms of retired army and navy officials has not a definitely business motive.

But though it is incontestible that the armaments trades are naturally disposed to an international competition in