But through the greater part of recorded history there was nothing of the kind.
The modern age opened; I think, with the accumulation of capital which began in the sixteenth century.
For I trace the beginnings of British foreign investment to the treasure which Drake stole from Spain in 1580.
In that year he returned to England bringing with him the prodigious spoils of the Golden Hind.
What can we reasonably expect the level of our economic life to be a hundred years hence? Almost everything which really matters and which the world possessed at the commencement of the modern age was already known to man at the dawn of history.
What are the economic possibilities for our grandchildren? Language, fire, the same domestic animals which we have to-day, wheat, barley, the vine and the olive, the plough, the wheel, the oar, the sail, leather, linen and cloth, bricks and pots, gold and silver, copper, tin, and lead – and iron was added to the list before 1000 B. – banking, statecraft, mathematics, astronomy, and religion.At the same time technical improvements in manufacture and transport have been proceeding at a greater rate in the last ten years than ever before in history.In the United States factory output per head was 40 per cent greater in 1925 than in 1919.The increase of technical efficiency has been taking place faster than we can deal with the problem of labour absorption; the improvement in the standard of life has been a little too quick; the banking and monetary system of the world has been preventing the rate of interest from falling as fast as equilibrium requires.And even so, the waste and confusion which ensue relate to not more than 7½ per cent of the national income; we are muddling away one and sixpence in the , and have only 18s.This she invested in the Levant Company – which prospered.Out of the profits of the Levant Company, the East India Company was founded; and the profits of this great enterprise were the foundation of England’s subsequent foreign investment.The value of Great Britain’s foreign investments to-day is estimated at about 4,000,000,000.This yields us an income at the rate of about 6½ per cent.I believe – for reasons with which I must not encumber the present argument – that this was initially due to the rise of prices, and the profits to which that led, which resulted from the treasure of gold and silver which Spain brought from the New World into the Old.From that time until to-day the power of accumulation by compound interest, which seems to have been sleeping for many generations, was re-born and renewed its strength.