ABSTRACT
The mechanism of international finance was the gold standard which contemporaries judged to be a fundamental part of the natural economic law. The economy would thus become more price-competitive internationally and this would be further aided by the obverse effects of the inflow of gold into economies in trade surplus. Trade fluctuations were, moreover, dispersed throughout the system and were not highly synchronized, which again eased the process of adjustment. The London Stock Exchange, it is argued, has to be seen as just part of the capital market and concerned with secondary trading. Contemporary writers on the political economy of the empire swam either in the currents of British Liberalism or continental European Marxism. Of the former, J. A. Hobson became the best known. The Boer War brought to the surface the poor physical condition of working class recruits to the army. To the public concern that arose was added growing fears of the competitive force of German industry.
