CHAPTER II

EUROPE BEFORE THE WAR


Before 1870 different parts of the small continent of Europe had
specialized in their own products; but, taken as a whole, it was
substantially self-subsistent. And its population was adjusted to this
state of affairs.

After 1870 there was developed on a large scale an unprecedented
situation, and the economic condition of Europe became during the next
fifty years unstable and peculiar. The pressure of population on food,
which had already been balanced by the accessibility of supplies from
America, became for the first time in recorded history definitely
reversed. As numbers increased, food was actually easier to secure.
Larger proportional returns from an increasing scale of production
became true of agriculture as well as industry. With the growth of the
European population there were more emigrants on the one hand to till
the soil of the new countries, and, on the other, more workmen were
available in Europe to prepare the industrial products and capital goods
which were to maintain the emigrant populations in their new homes, and
to build the railways and ships which were to make accessible to Europe
food and raw products from distant sources. Up to about 1900 a unit of
labor applied to industry yielded year by year a purchasing power over
an increasing quantity of food. It is possible that about the year 1900
this process began to be reversed, and a diminishing yield of Nature to
man's effort was beginning to reassert itself. But the tendency of
cereals to rise in real cost was balanced by other improvements;