If England went bankrupt in the completest way to-morrow, and repudiated all its debts both as a nation and as a community of individuals, if it declared, if I may use a self-contradictory phrase, a permanent moratorium, there would be not an acre of ploughed land in the country, not a yard of cloth or a loaf of bread the less for that.  There would be nothing material destroyed within the State.  There would be no immediate convulsion.  Use and wont would carry most people on some days before they even began to doubt whether So-and-so could pay his way, and whether there would be wages at the end of the week.

But people who lived upon rent or investments or pensions would presently be very busy thinking how they were going to get food when the butcher and baker insisted upon cash.  It would be only with comparative slowness that the bulk of men would realise that a fabric of confidence and confident assumptions had vanished; that cheques and bank notes and token money and every sort of bond and scrip were worthless, that employers had nothing to pay with, shopkeepers no means of procuring stock, that metallic money was disappearing, and that a paralysis had come upon the community.

Such an establishment as a workhouse or an old-fashioned monastery, living upon the produce of its own farming and supplying all its own labour, would be least embarrassed amidst the general perplexity.  For it would not be upon a credit basis, but a socialistic basis, a basis of direct reality, and its need for payments would be incidental.  And land-owning peasants growing their own food would carry on, and small cultivating occupiers, who could easily fall back on barter for anything needed.

The mass of the population in such a country as England would, however, soon be standing about in hopeless perplexity and on the verge of frantic panic—­although there was just as much food to be eaten, just as many houses to live in, and just as much work needing to be done.  Suddenly the pots would be empty, and famine would be in the land, although the farms and butchers’ shops were still well stocked.  The general community would be like an automobile when the magneto fails.  Everything would be there and in order, except for the spark of credit which keeps the engine working.

That is how quite a lot of people seem to imagine national bankruptcy:  as a catastrophic jolt.  It is a quite impossible nightmare of cessation.  The reality is the completest contrast.  All the belligerent countries of the world are at the present moment quietly, steadily and progressively going bankrupt, and the mass of people are not even aware of this process of insolvency.