The course of events has shown the temporary collapse of economic individualism in the face of the European crisis.  The economic system, which works during times of peace, could not meet successfully the crushing effects of a European war.  It lacked not only adequate resources but the necessary power of corporate action and co-ordination.  Immediate State action seemed to be the only way to avert disaster.  In a month, Britain came nearer than ever before to being a co-operative commonwealth.  It has been realised that industry and commerce are not primarily intended as a field for exploitation and profit, but are essential national services in as true a sense as the army and navy.  The complexity of the modern economic world and the large individual gains which have been made in it have obscured the fact that the economic structure exists to serve the needs of the community.  It was recognised by the Government, at any rate to some extent, that the success of our armies in the field would be nullified if, in the economic sphere, the production of commodities and services were seriously diminished and if their interchange were hampered in a large degree.  People have felt that the spinner, the miner, the weaver, the machinist, are all by following their occupations performing a valuable service to the community.  How far this attitude of mind will persist after the war, when normal conditions in industry and commerce gradually return, remains to be seen.

B. IMMEDIATE SOCIAL AND ECONOMIC EFFECTS OF THE WAR

1. Foreign Trade.—­The effects of the war on industry and commerce will be complicated and far reaching.  The British and German Empires together transact about two-fifths of the international trade of the world, the British Empire doing over a quarter and Germany almost exactly an eighth.  Between them they own over half the merchant shipping of the world.  A war in which they are both engaged, therefore, must have serious consequences not only to these countries themselves but to the countries with whom they carry on business relations, and through them, in a lesser degree, to all other commercial countries.  But this is not all:  France has a foreign trade amounting to L615,000,000 a year; Belgium’s is valued at L326,000,000, Russia’s at L275,000,000, and Austria-Hungary’s at L256,000,000.  Besides a gigantic foreign trade there is a domestic trade, which is on a larger scale than the external trade of these countries.  Let us consider in more detail the case of Germany.  Half her foreign trade is transacted with the nations now engaged in the great war.  The trade of Britain, Russia, and France with the German Empire is now at a standstill, except possibly for a very small amount transacted via neutral countries; her trade with Austria-Hungary must seriously decline.  Moreover, her imports from neutral countries and her exports to them have dwindled very considerably, and must remain small