If this theory had been true it would have followed that the interests of capital would make for war and the interests of labor would make for peace. The day laborer, with no money in the bank, would not be interested in capital investments in Morocco, Manchuria, or Asia Minor. He would have no national interests whatever. But, as we may read in the admirable book on “Socialists and the War,” by William English Walling, a few Socialists have for some time begun to recognize that wage-earners do have special national interests and that these interests may be directly opposed to the interests of wage-earners in an adjoining country. If Serbia is completely shut off from the sea, her wage-earners suffer as acutely as do her peasants. If Switzerland is surrounded by a wall of hostile tariffs, if Holland and England are deprived of their colonies, the loss is felt not only by great capitalists but by the man who works with a trowel or a lathe. The ultimate interests of German and British wage-earners are identical, but if their immediate interests conflict, there will grow up a spirit of nationalism in both countries, and wage-earners will clamor for a national policy which may lead to war. This seems to shut a door that leads to peace. But in shutting this door the newer Socialist thought has opened another. It assumes that the capitalists themselves are increasingly likely to profit by peace, to desire peace, and to achieve peace. According to the German Socialist, Karl Kautsky, we are approaching a new stage in the industrial development of the world. At first capitalists exploited the resources of their own country. Then they competed nationally for the exploitation of colonies and dependencies, and this policy led to imperialism and war. Now they are beginning to unite for the joint exploitation of all backward lands. Competitive imperialism is making way for imperialism by combination, just as competitive industry gave way to the trust. English, French, German, and Belgian capitalists will unite to exploit dependencies, will have joint spheres of influence, and the result will be peace with profits. Imperialism in the old sense will die out, and its place will be taken by a pacific super-imperialism, a higher imperialism. [Sidenote: This higher imperialism fraught with dangers.]