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Title: A Critical Examination of Socialism
Author: Mallock, W. H. (William Hurrell), 1849-1923
Language: English
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John Murray, Albemarle Street, W.
Printed by
Hazell, Watson and Viney, Ld.,
London and Aylesbury.


The Civic Federation of New York, an influential body which aims, in
various ways, at harmonising apparently divergent industrial interests
in America, having decided on supplementing its other activities by a
campaign of political and economic education, invited me, at the
beginning of the year 1907, to initiate a scientific discussion of
socialism in a series of lectures or speeches, to be delivered under the
auspices of certain of the great Universities in the United States. This
invitation I accepted, but, the project being a new one, some difficulty
arose as to the manner in which it might best be carried out--whether
the speeches or lectures should in each case be new, dealing with some
fresh aspect of the subject, or whether they should be arranged in a
single series to be repeated without substantial alteration in each of
the cities visited by me. The latter plan was ultimately adopted, as
tending to render the discussion of the subject more generally
comprehensible to each local audience. A series of five lectures,
substantially the same, was accordingly delivered by me in New York,
Cambridge, Chicago, Philadelphia, and Baltimore. But whilst this plan
secured continuity of treatment, it secured it at the expense of
comprehensiveness. Certain important points had to be passed over. In
the present volume the substance of the original lectures has been
entirely rearranged and rewritten, and more than half the matter is new.
Even in the present volume, however, it has been impossible to treat the
subject otherwise than in a general way. At almost every point a really
complete discussion would necessitate a much fuller analysis of facts
than it has been practicable to give here. Arguments here necessarily
confined to a few pages or to a chapter, would each, for their complete
elucidation, require a separate monograph. Most readers, however, will
be able to supply much of what is missing, by the light of their own
common sense; and general arguments, in which, as in block plans of
buildings, many details are suppressed, have for practical purposes the
great advantage of being generally and easily intelligible, whereas, if
stated in fuller and more complex form, they might confuse rather than
enlighten a large number of readers.

The fact that the fundamental arguments of this volume were
disseminated throughout the United States, not only at the meetings
addressed, but also in all the leading newspapers, has had the valuable
result, by means of the mass of criticisms which they elicited, of
illustrating the manner in which socialists attempt to meet them; and
has enabled me to revise, with a view to farther clearness, certain
passages which were intentionally or unintentionally misunderstood, and
also to emphasise the curious confusions of thought into which various
critics have been driven in their efforts to controvert or get round
them. I may specially mention a small volume by Mr. G. Wilshire of New
York--a leading publisher and disseminator of socialistic
literature--which was devoted to examining my own arguments seriatim. To
the principal criticisms of this writer allusions will be found in the
following pages. Most of my socialistic opponents (though to this rule
there were amusing exceptions) wrote, according to their varying degrees
of intelligence and education, with remarkable candour, and also with
great courtesy. Mr. Wilshire, in particular, whilst seeking to refute my
arguments as a whole, admitted the force of many of them; and did his
best, in his elaborate _résumé_ of them, to state them all fairly.

The contentions, and even the phraseology of socialists are in all
countries (with the possible exception of Russia) identical. All are
vitiated by the same distinctive errors, and it is indifferent whether,
for purposes of detail criticism, we go to speakers and writers in this
country or America. Except for the correction of a few verbal errors
which have escaped my notice in the American edition, and which obscure
the meaning of perhaps four or five sentences, for the introduction of a
few additional notes, and for the translation of dollars and cents into
pounds and shillings, the English and the American editions are the

W. H. M.

_January, 1908._


        CHAPTER I


        Socialism an unrealised theory. In order to discuss it, it must
        be defined.

        Being of no general interest except as a nucleus of some general
        movement, we must identify it as a theory which has united large
        numbers of men in a common demand for change.

        As the definite theoretical nucleus of a party or movement,
        socialism dates from the middle of the nineteenth century, when
        it was erected into a formal system by Karl Marx.

        We must begin our examination of it by taking it in this, its
        earliest, systematic form.

        CHAPTER II


        The doctrine of Marx that all wealth is produced by labour.

        His recognition that the possibilities of distribution rest on
        the facts of production.

        His theory of labour as the sole producer of wealth avowedly
        derived from Ricardo's theory of value.

        His theory of capital as consisting of implements of production,
        which are embodiments of past labour, and his theory of modern
        capitalism as representing nothing but a gradual abstraction by
        a wholly unproductive class, of these implements from the men
        who made them, and who alone contribute anything to their
        present productive use.

        His theory that wages could never rise, but must, under
        capitalism, sink all over the world to the amount which would
        just keep the labourers from starvation, when, driven by
        necessity, they will rebel, and, repossessing themselves of
        their own implements, will be rich forever afterwards by using
        them for their own benefit.



        The theory of Marx analysed. It is true as applied to primitive
        communities, where the amount of wealth produced is very small,
        but it utterly fails to account for the increased wealth of the
        modern world.

        Labour, as Marx conceived of it, can indeed increase in
        productivity in two ways, but to a small degree only, neither of
        which explains the vast increase of wealth during the past
        hundred and fifty years.

        The cause of this is the development of a class which, not
        labouring itself, concentrates exceptional knowledge and energy
        on the task of directing the labour of others, as an author does
        when, by means of his manuscript, he directs the labour of

        Formal definition of the parts played respectively by the
        faculties of the labouring and those of the directing classes.

        CHAPTER IV


        Two kinds of human effort being thus involved in modern
        production, it is necessary for all purposes of intelligible
        discussion to distinguish them by different names.

        The word "labour" being appropriated by common custom to the
        manual task-work of the majority, some other technical word must
        be found to designate the directive faculties as applied to
        productive industry. The word here chosen, in default of a
        better, is "ability."

        Ability, then, being the faculty which directs labour, by what
        means does it give effect to its directions?

        It gives effect to its directions by means of its control of
        capital, in the form of wage-capital.

        Ability, using wage-capital as its implement of direction, gives
        rise to fixed capital, in the form of the elaborate implements
        of modern production, which are the material embodiments of the
        knowledge, ingenuity, and energy of the highest minds.

        CHAPTER V


        The more educated socialists of to-day, when the matter is put
        plainly before them, admit that the argument of the preceding
        chapters is correct, and repudiate the doctrine of Marx that
        "labour" is the sole producer.

        Examples of this admission on the part of American socialists.

        The socialism of Marx, however, still remains the socialism of
        the more ignorant classes, and also of the popular agitator.

        It is, moreover, still used as an instrument of agitation by
        many who personally repudiate it. The case of Mr. Hillquit.

        The doctrine of Marx, therefore, still requires exposure.

        Further, it is necessary to understand this earlier form of
        socialistic theory in order to understand the later.

        CHAPTER VI


        The more educated socialists of to-day, besides virtually
        accepting the argument of the preceding chapters with regard to
        labour, virtually accept the argument set forth in them with
        regard to capital.

        Mr. Sidney Webb, for example, recognises it as an implement of
        direction, the only alternative to which is a system of legal

        Other socialists advocate the continued use of wage-capital as
        the implement of direction, but they imagine that the situation
        would be radically changed by making the "state" the sole

        But the "state," as some of them are beginning to realise, would
        be merely the private men of ability--the existing
        employers--turned into state officials, and deprived of most of
        their present inducements to exert themselves.

        A socialistic state theoretically could always command labour,
        for labour can be exacted by force; but the exercise of ability
        must be voluntary, and can only be secured by a system of
        adequate rewards and inducements.

        Two problems with which modern socialism is confronted: How
        would it test its able men so as to select the best of them for
        places of power? What rewards could it offer them which would
        induce them systematically to develop, and be willing to
        exercise, their exceptional faculties?



        How are the men fittest for posts of industrial power to be
        selected from the less fit?

        This problem solved automatically by the existing system of
        private and separate capitals.

        The fusion of all private capitals into a single state capital
        would make this solution impossible, and would provide no other.
        The only machinery by which the more efficient directors of
        labour could be discriminated from the less efficient would be
        broken. Case of the London County Council's steamboats.

        Two forms which the industrial state under socialism might
        conceivably take: The official directors of industry might be
        either an autocratic bureaucracy, or they might else be subject
        to elected politicians representing the knowledge and opinions
        prevalent among the majority.

        Estimate of the results which would arise in the former case.
        Illustrations from actual bureaucratic enterprise.

        Estimate of the results which would arise in the latter case.
        The state, as representing the average opinion of the masses,
        brought to bear on scientific industrial enterprise.

        The state as sole printer and publisher. State capitalism would
        destroy the machinery of industrial progress just as it would
        destroy the machinery by which thought and knowledge develop.

        But behind the question of whether socialism could provide
        ability with the conditions or the machinery requisite for its
        exercise is the question of whether it could provide it with any
        adequate stimulus.



        Mr. Sidney Webb, and most modern socialists of the higher kind,
        recognise that this problem of motive underlies all others.

        They approach it indirectly by sociological arguments borrowed
        from other philosophers, and directly by a psychology peculiar
        to themselves.

        The sociological arguments by which socialists seek to minimise
        the claims of the able man.

        These founded on a specific confusion of thought, which vitiated
        the evolutionary sociology of that second half of the nineteenth
        century. Illustrations from Herbert Spencer, Macaulay, Mr. Kidd,
        and recent socialists.

        The confusion in question a confusion between speculative truth
        and practical.

        The individual importance of the able man, untouched by the
        speculative conclusions of the sociological evolutionists, as
        may be seen by the examples adduced in a contrary sense by
        Herbert Spencer. This is partially perceived by Spencer himself.
        Illustrations from his works.

        Ludicrous attempts, on the part of socialistic writers, to apply
        the speculative generalisations of sociology to the practical
        position of individual men.

        The climax of absurdity reached by Mr. Sidney Webb.

        CHAPTER IX


        The individual motives of the able man as dealt with directly by
        modern socialists.

        They abandon their sociological ineptitudes altogether, and
        betake themselves to a psychology which they declare to be
        scientific, but which is based on no analysis of facts, and
        consists really of loose assumptions and false analogies.

        Their treatment of the motives of the artist, the thinker, the
        religious enthusiast, and the soldier.

        Their unscientific treatment of the soldier's motive, and their
        fantastic proposal based on it to transfer this motive from the
        domain of war to that of industry.

        The socialists as their own critics when they denounce the
        actual motives of the able man as he is and as they say he
        always has been. They attack the typically able man of all
        periods as a monster of congenital selfishness, and it is men of
        this special type whom they propose to transform suddenly into
        monsters of self-abnegation.

        Their want of faith in the efficacy of their own moral suasion
        and their proposal to supplement this by the ballot.

        CHAPTER X


        Exaggerated powers ascribed to democracy by inaccurate thinkers.

        An example from an essay by a recent philosophic thinker, with
        special reference to the rewards of exceptional ability.

        This writer maintains that the money rewards of ability can be
        determined by the opinion of the majority expressing itself
        through votes and statutes.

        The writer's typical error. A governing body might enact any
        laws, but they would not be obeyed unless consonant with human

        Laws are obliged to conform to the propensities of human nature
        which it is their office to regulate.

        Elaborate but unconscious admission of this fact by the writer
        here quoted himself.

        The power of democracy in the economic sphere, its magnitude and
        its limits. The demands of the minority a counterpart of those
        of the majority.

        The demand of the great wealth-producer mainly a demand for

        Testimony of a well-known socialist to the impossibility of
        altering the character of individual demand by outside

        CHAPTER XI


        The meaning of Christian socialism, as restated to-day by a
        typical writer.

        His just criticism of the fallacy underlying modern ideas of
        democracy. The impossibility of equalising unequal men by
        political means.

        Christian socialism teaches, he says, that the abler men should
        make themselves equal to ordinary men by surrendering to them
        the products of their own ability, or else by abstaining from
        its exercise.

        The author's ignorance of the nature of the modern industrial
        process. His idea of steel.

        He confuses the production of wealth on a great scale with the
        acquisition of wealth when produced.

        The only really productive ability which he distinctly
        recognises is that of the speculative inventor.

        He declares that inventors never wish to profit personally by
        their inventions. Let the great capitalists, he says, who merely
        monopolise inventions, imitate the self-abnegation of the
        inventors, and Christian socialism will become a fact.

        The confusion which reigns in the minds of sentimentalists like
        the author here quoted. Their inability to see complex facts and
        principles, in their connected integrity, as they are. Such
        persons herein similar to devisers of perpetual motions and
        systems for defeating the laws of chance at a roulette-table.

        All logical socialistic conclusions drawn from premises in which
        some vital truth or principle is omitted. Omission in the
        premises of the earlier socialists. Corresponding omission in
        the premises of the socialists of to-day.

        Origin of the confusion of thought characteristic of Christian
        as of all other socialists. Temperamental inability to
        understand the complexities of economic life. This inability
        further evidenced by the fact that, with few exceptions,
        socialists themselves are absolutely incompetent as producers.
        Certain popular contentions with regard to modern economic life,
        urged by socialists, but not peculiar to socialism, still remain
        to be considered in the following chapters.



        Modern socialists admit that of the wealth produced to-day
        labour does not produce the whole, but that some part is
        produced by directive ability. But they contend that labour
        produces more than it gets. We can only ascertain if such an
        assertion is correct by discovering how to estimate with some
        precision the amount produced by labour and ability

        But since for the production of the total product labour and
        ability are both alike necessary, how can we say that any
        special proportion of it is produced by one or the other?

        J.S. Mill's answer to this question.

        The profound error of Mill's argument.

        Practically so much of any effect is due to any one of its
        causes as would be absent from this effect were the cause in
        question taken away. Illustrations.

        Labour itself produces as much as it would produce were there no
        ability to direct it.

        The argument which might be drawn from the case of a community
        in which there was no labour.

        Such an argument illusory; for a community in which there was no
        labour would be impossible; but the paralysis of ability, or its
        practical non-existence possible.

        Practical reasoning of all kinds always confines itself to the
        contemplation of possibilities. Illustrations.

        Restatement of proposition as to the amount of the product of

        The product of ability only partially described by assimilating
        it to rent.

        Ability produces everything which would not be produced if its
        operation were hampered or suspended.

        Increased reward of labour in Great Britain since the year 1800.
        The reward now received by labour far in excess of what labour
        itself produces.

        In capitalistic countries generally labour gets, not less, but
        far more than its due, if its due is to be measured by its own

        It is necessary to remember this; but its due is not to be
        measured exclusively by its own products.

        As will be seen in the concluding chapter.



        The proposal to confiscate interest for the public benefit, on
        the ground that it is income unconnected with any corresponding

        Is the proposal practicable? Is it defensible on grounds of
        abstract justice?

        The abstract moral argument plays a large part in the

        It assumes that a man has a moral right to what he produces,
        interest being here contrasted with this, as a something which
        he does not produce.

        Defects of this argument. It ignores the element of time. Some
        forms of effort are productive long after the effort itself has

        For examples, royalties on an acted play. Such royalties herein
        typical of interest generally.

        Industrial interest as a product of the forces of organic
        nature. Henry George's defence of interest as having this

        His argument true, but imperfect. His superficial criticism of

        Nature works through machine-capital just as truly as it does in

        Machines are natural forces captured by men of genius, and set
        to work for the benefit of human beings.

        Interest on machine-capital is part of an extra product which
        nature is made to yield by those men who are exceptionally
        capable of controlling her.

        By capturing natural forces, one man of genius may add more to
        the wealth of the world in a year than an ordinary man could add
        to it in a hundred lifetimes.

        The claim of any such man on the products of his genius is
        limited by a variety of circumstances; but, as a mere matter of
        abstract justice, the whole of it belongs to him.

        Abstract justice, however, in a case like this, gives us no
        practical guidance, until we interpret it in connection with
        concrete facts, and translate the just into terms of the



        The practical outcome of the moral attack on interest is
        logically an attack on bequest.

        Modern socialism would logically allow a man to inherit
        accumulations, and to spend the principal, but not to receive
        interest on his money as an investment.

        What would be the result if all who inherited capital spent it
        as income, instead of living on the interest of it?

        Two typical illustrations of these ways of treating capital.

        The ultimate difference between the two results.

        What the treatment of capital as income would mean, if the
        practice were made universal. It would mean the gradual loss of
        all the added productive forces with which individual genius has
        enriched the world.

        Practical condemnation of proposed attack on interest.

        Another aspect of the matter.

        Those who attack interest, as distinct from other kinds of
        money-reward, admit that the possession of wealth is necessary
        as a stimulus to production.

        But the possession of wealth is desired mainly for its social
        results far more than for its purely individual results.

        Interest as connected with the sustentation of a certain mode of
        social life.

        Further consideration of the manner in which those who attack
        interest ignore the element of time, and contemplate the present
        moment only.

        The economic functions of a class which is not, at a given
        moment, economically productive.

        Systematic failure of those who attack interest to consider
        society as a whole, continually emerging from the past, and
        dependent for its various energies on the prospects of the

        Consequent futility of the general attack on interest, though
        interest in certain cases may be justly subjected to special but
        not exaggerated burdens.

        CHAPTER XV


        Equality of opportunity, as an abstract demand, is in an
        abstract sense just; but it changes its character when applied
        to a world of unequal individuals.

        Equality of opportunity in the human race-course. To multiply
        competitors is to multiply failures.

        Educational opportunity. Unequal students soon make
        opportunities unequal.

        Opportunity in industrial life. Socialistic promises of equal
        industrial opportunities for all. Each "to paddle his own

        These absurd promises inconsistent with the arguments of
        socialists themselves.

        A socialist's attempt to defend these promises by reference to
        employés of the state post-office.

        Equality of industrial opportunity for those who believe
        themselves possessed of exceptional talent and aspire "to rise."

        Opportunities for such men involve costly experiment, and are
        necessarily limited.

        Claimants who would waste them indefinitely more numerous than
        those who could use them profitably.

        Such opportunities mean the granting to one man the control of
        other men by means of wage-capital.

        Disastrous effects of granting such opportunities to all or even
        most of those who would believe themselves entitled to them.

        True remedy for the difficulties besetting the problem of

        Ruskin on human demands. Needs and "romantic wishes." The former
        not largely alterable. The latter depend mainly on education.

        The problem practically soluble by a wise moral education only,
        which will correlate demand and expectation with the personal
        capacities of the individual.

        Relative equality of opportunity, not absolute equality, the
        true formula.

        Equality of opportunity, though much talked about by socialists,
        is essentially a formula of competition, and opposed to the
        principles of socialism.




        This book, though consisting of negative criticism and analysis
        of facts, and not trenching on the domain of practical policy
        and constructive suggestion, aims at facilitating a rational
        social policy by placing in their true perspective the main
        statical facts and dynamic forces of the modern economic world,
        which socialism merely confuses.

        In pointing out the limitations of labour as a productive
        agency, and the dependence of the labourers on a class other
        than their own, it does not seek to represent the aspirations of
        the former to participate in the benefits of progress as
        illusory, but rather to place such aspirations on a scientific
        basis, and so to remove what is at present the principal
        obstacle that stands in the way of a rational and scientific
        social policy.




Socialism, whatever may be its more exact definition, stands for an
organisation of society, and more especially for an economic
organisation, radically opposed to, and differing from, the organisation
which prevails to-day. So much we may take for granted; but here, before
going further, it is necessary to free ourselves from a very common
confusion. When socialism, as thus defined, is spoken of as a thing that
exists--as a thing that has risen and is spreading--two ideas are apt to
suggest themselves to the minds of all parties equally, of which one
coincides with facts, while the other does not, having, indeed, thus far
at all events, no appreciable connection with them; and it is necessary
to get rid of the false idea, and concern ourselves only with the true.

The best way in which I can make my meaning clear will be by referring
to a point with regard to which the earlier socialistic thinkers may be
fairly regarded as accurate and original critics. The so-called orthodox
economists of the school of Mill and Ricardo accepted the capitalistic
system as part of the order of nature, and their object was mainly to
analyse the peculiar operations incident to it. The abler among the
socialists were foremost in pointing out, on the contrary, a fact which
now would not be denied by anybody: that capitalism in its present form
is a comparatively modern phenomenon, owing its origin historically to
the dissolution of the feudal system, and not having entered on its
adolescence, or even on its independent childhood, till a time which may
be roughly indicated as the middle of the eighteenth century. The
immediate causes of its then accelerated development were, as the
socialists insist, the rapid invention of new kinds of machinery, and
more especially that of steam as a motor power, which together
inaugurated a revolution in the methods of production generally.
Production on a small scale gave way to production on a large. The
independent weavers, for example, each with his own loom, were wholly
unable to compete with the mechanisms of the new factory; their looms,
by being superseded, were virtually taken away from them; and these men,
formerly their own masters, working with their own implements, and
living by the sale of their own individual products, were compelled to
pass under the sway of a novel class, the capitalists; to work with
implements owned by the capitalists, not themselves; and to live by the
wages of their labour, not by their sale of the products of it.

Such, as the socialists insist, was the rise of the capitalistic system;
and when once it had been adequately organised, as it first was, in
England, it proceeded, they go on to observe, to spread itself with
astonishing rapidity, all other methods disappearing before it, through
their own comparative inefficiency. But when socialists or their
opponents turn from capitalism to socialism, and speak of how socialism
has risen and spread likewise, their language, as thus applied, has no
meaning whatever unless it is interpreted in a totally new sense. For in
the sense in which socialists speak of the rise and spread of
capitalism, socialism has, up to the present time, if we except a number
of small and unsuccessful experiments, never risen or spread or had any
existence at all. Capitalism rose and spread as an actual working
system, which multiplied and improved the material appliances of life in
a manner beyond the reach of the older system displaced by it. It
realised results of which previously mankind had hardly dreamed.
Socialism, on the other hand, has risen and spread thus far, not as a
system which is threatening to supersede capitalism by its actual
success as an alternative system of production, but merely as a theory
or belief that such an alternative is possible. Let us take any country
or any city we please--for example, let us say Chicago, in which
socialism is said to be achieving its most hopeful or most formidable
triumphs--and we shall look in vain for a sign that the general
productive process has been modified by socialistic principles in any
particular whatsoever. Socialism has produced resolutions at endless
public meetings; it has produced discontent and strikes; it has hampered
production constantly. But socialism has never inaugurated an improved
chemical process; it has never bridged an estuary or built an ocean
liner; it has never produced or cheapened so much as a lamp or a
frying-pan. It is a theory that such things could be accomplished by the
practical application of its principles; but, except for the abortive
experiments to which I have referred already, it is thus far a theory
only, and it is as a theory only that we can examine it.

What, then, as a theory, are the distinctive features of socialism? Here
is a question which, if we address it indiscriminately to all the types
of people who now call themselves socialists, seems daily more
impossible to answer; for every day the number of those is increasing
who claim for their own opinions the title of socialistic, but whose
quarrel with the existing system is very far from apparent, while less
apparent still is the manner in which they propose to alter it. The
persons to whom I refer consist mainly of academic students, professors,
clergymen, and also of emotional ladies, who enjoy the attention of
footmen in faultless liveries, and say their prayers out of
prayer-books with jewelled clasps. All these persons unite in the
general assertion that, whatever may be amiss with the world, the
capitalistic system is responsible for it, and that somehow or other
this system ought to be altered. But when we ask them to specify the
details as to which alteration is necessary--what precisely are the
parts of it which they wish to abolish and what, if these were
abolished, they would introduce as a substitute--one of them says one
thing, another of them says another, and nobody says anything on which
three of them could act in concert.

Now, if socialism were confined to such persons as these, who are in
America spoken of as the "parlour socialists," it would not only be
impossible to tell what socialism actually was, but what it was or was
not would be immaterial to any practical man. As a matter of fact,
however, between socialism of this negligible kind--this sheet-lightning
of sentiment reflected from a storm elsewhere--and the socialism which
is really a factor to be reckoned with in the life of nations, we can
start with drawing a line which, when once drawn, is unmistakable.
Socialism being avowedly a theory which, in the first instance at all
events, addresses itself to the many as distinct from and opposed to the
few, it is only or mainly the fact of its adoption by the many which
threatens to render it a practical force in politics. Its practical
importance accordingly depends upon two things--firstly, on its
possessing a form sufficiently definite to unite what would otherwise be
a mass of heterogeneous units, by developing in all of them a common
temper and purpose; and, secondly, on the number of those who can be
taught to adopt and welcome it. The theory of socialism is, therefore,
as a practical force, primarily that form of it which is operative among
the mass of socialists; and when once we realise this, we shall have no
further difficulty in discovering what the doctrines are with which, at
all events, we must begin our examination. We are guided to our
starting-point by the broad facts of history.

The rights of the many as opposed to the actual position of the few--a
society in which all should be equal, not only in political status, but
also in social circumstances; ideas such as these are as old as the days
of Plato, and they have, from time to time in the ancient and the modern
world, resulted in isolated and abortive attempts to realise them. In
Europe such ideas were rife during the sixty or seventy years which
followed the great political revolution in France. Schemes of society
were formulated which were to carry this revolution further, and
concentrate effort on industrial rather than political change. Pictures
were presented to the imagination, and the world was invited to realise
them, of societies in which all were workers on equal terms, and groups
of fraternal citizens, separated no longer by the egoisms of the private
home, dwelt together in palaces called "phalansteries," which appear to
have been imaginary anticipations of the Waldorf-Astoria Hotel. Here
lapped in luxury, they were to feast at common tables; and between meals
the men were to work in the fields singing, while a lady accompanied
their voices on a grand piano under a hedge. These pictures, however,
agreeable as they were to the fancy, failed to produce any great effect
on the multitudes; for the multitudes felt instinctively that they were
too good to be true. That such was the case is admitted by socialistic
historians themselves. Socialism during this period was, they say, in
its "Utopian stage." It was not even sufficiently coherent to have
acquired a distinctive name till the word "socialism" was coined in
connection with the views of Owen, which suffered discredit from the
failure of his attempts to put them into practice. Socialism in those
days was a dream, but it was not science; and in a world which was
rapidly coming to look upon science as supreme, nothing could convince
men generally--not even the most ignorant--which had not, or was not
supposed to have, the authority of science at the back of it.

Such being the situation, as the socialists accurately describe it, an
eminent thinker arose who at last supplied what was wanting. He provided
the unorganised aspirations, which by this time were known as socialism,
with a formula which was at once definite, intelligible, and
comprehensive, and had all the air of being rigidly scientific also. By
this means thoughts and feelings, previously vague and fluid, like salts
held in solution, were crystallised into a clear-cut theory which was
absolutely the same for all; which all who accepted it could accept with
the same intellectual confidence; and which thus became a moral and
mental nucleus around which the efforts and hopes of a coherent party
could group themselves.

Such was the feat accomplished by Karl Marx, through his celebrated
treatise on Capital, which was published between fifty and sixty years
ago, and which has, since then, throughout all Europe and America, been
acclaimed as the Magna Charta, or the Bible, of "scientific socialism."

Whatever may be the change which, as a theory, socialism has
subsequently undergone--and changes there have been which will presently
occupy our attention--it is with the theory of Marx, and the temper of
mind resulting from it, that socialism, regarded as a practical force,
begins; and among the majority of socialists this theory is predominant
still. In view, therefore, of the requirements of logic, of history, and
of contemporary facts, our own examination must begin with the theory of
Marx likewise.



All radical revolutions which are advocated in the interests of the
people are commended to the people, and the people are invited to
accomplish them, on the ground that majorities are, if they would only
realise it, capable of moulding society in any manner they please. As
applied to matters of legislation and government, this theory is
sufficiently familiar to everybody. It has been elaborated in endless
detail, and has expressed itself in the constitutions of all modern
democracies. What Karl Marx did, and did for the first time, was to
invest this theory of the all-efficiency of the majority with a
definiteness, in respect of distribution of wealth, similar to that with
which it had been invested already in respect of the making of laws and
the dictation of national policies.

The practical outcome of the scientific reasoning of Marx is summed up
in the formula which has figured as the premise and conclusion of every
congress of his followers, of every book or manifesto published by
them, and of every propagandist oration uttered by them at
street-corners, namely, "All wealth is produced by labour, therefore to
the labourers all wealth is due"--a doctrine in itself not novel if
taken as a pious generality, but presented by Marx as the outcome of an
elaborate system of economics.

The efficiency of this doctrine as an instrument of agitation is
obvious. It appeals at once to two universal instincts: the instinct of
cupidity and the instinct of universal justice. It stimulates the
labourers to demand more than they receive already, and it stimulates to
demand the more on the ground that they themselves have produced it. It
teaches them that the wealth of every man who is not a manual labourer
is something stolen from themselves which ought to be and which can be
restored to them.

Now, whatever may be the value of such teaching as a contribution to
economic science, it illustrates by its success one cardinal truth, and
by implication it bears witness to another. The first truth is that, no
matter how desirable any object may be which is obtruded on the
imagination of anybody, nobody will bestir himself in a practical way to
demand it until he can be persuaded to believe that its attainment is
practically possible. The other is this: that the possibilities of
redistributing wealth depend on the causes by which wealth is produced.
All wealth, says Marx, can practically be appropriated by the
labourers. But why? Because the labourers themselves comprise in their
own labour all the forces that produce it. If its production
necessitated the activity of any persons other than themselves, these
other persons would inevitably have some control over its distribution;
since if it were distributed in a manner of which these other persons
disapproved, it would be open to them to refuse to take part in its
production any longer; and there would, in consequence, be no wealth, or
less wealth, to distribute.

Let us, then, examine the precise sense and manner in which this theory
of labour as the sole producer of wealth is elaborated and defended by
Marx in his Bible of Scientific Socialism. His argument, though the
expression of it is very often pedantic and encumbered with superfluous
mathematical formulæ, is ingenious and interesting, and is associated
with historical criticism which, in spite of its defects, is valuable.
Marx was, indeed, foremost among those thinkers already referred to who
first insisted on the fact that the economic conditions of to-day are
mainly a novel development of others which went before them, and that,
having their roots in history, they must be studied by the historical
method. He recognised, however, that for practical purposes each age
must concern itself with its own environment; and his logical
starting-point is an analysis of wealth-production as it exists to-day.
He begins by insisting on the fact that labour in the modern world is
divided with such a general and such an increasing minuteness that each
labour produces one kind of product only, of which he himself can
consume but a small fraction, and often consumes nothing. His own
product, therefore, has for him the character of wealth only because he
is able to exchange it for commodities of other kinds; and the amount of
wealth represented by it depends upon what the quantity of other
assorted commodities, which he can get in exchange for it, is. What,
then, is the common measure, in accordance with which, as a fact, one
kind of commodity will exchange for any other, or any others? For his
answer to this question Marx goes to the orthodox economists of his
time--the recognised exponents of the system against which his own
arguments were directed--and notably, among these, to Ricardo; and,
adopting Ricardo's conclusions, as though they were axiomatic, he
asserts that the measure of exchange between one class of commodities
and another--such, for example, as cigars, printed books, and
chronometers--is the amount of manual labour, estimated in terms of
time, which is on an average necessary to the production of each of
them. His meaning in this respect is illustrated with pictorial
vividness by his teaching with regard to the form in which the measure
of exchange should embody itself. This, he said, ought not to be gold or
silver, but "labour-certificates," which would indicate that whoever
possessed them had laboured for so many hours in producing no matter
what, and which would purchase anything else, or any quantity of
anything else, representing an equal expenditure of labour of any other

Having thus settled, as it seemed to him beyond dispute, that manual
labour, estimated in terms of time, is the sole source and measure of
economic values or of wealth, Marx goes on to point out that, by the
improvement of industrial methods, labour in the modern world has been
growing more and more productive, so that each labour-hour results in an
increased yield of commodities. Thus a man who a couple of centuries ago
could have only just kept himself alive by the products of his entire
labour-day, can now keep himself alive by the products of half or a
quarter of it. The products of the remainder of his labour-day are what
Marx called a "surplus value," meaning by this phrase all that output of
wealth which is beyond what is practically necessary to keep the
labourer alive. But what, he asks, becomes of this surplus? Does it go
to the labourers who have produced it? No, he replies. On the contrary,
as fast as it is produced, it is abstracted from the labourer in a
manner, which he goes on to analyse, by the capitalist.

Marx here advances to the second stage of his argument. Capital, as he
conceives of it, is the tools or instruments of production; and modern
capital for him means those vast aggregates of machinery by the use of
which in most industries the earlier implements have been displaced.
Now, here, says Marx, the capitalist is sure to interpose with the
objection that the increased output of wealth is due, not to labour, but
to the machinery, and that the labourer, as such, has consequently no
claim on it. But to this objection Marx is ready with the following
answer--that the machinery itself is nothing but past labour in
disguise. It is past labour crystallised, or embodied in an external
form, and used by present labour to assist itself in its own operations.
Every wheel, crank, and connecting-rod, every rivet in every boiler,
owes its shape and its place to labour, and labour only. Labour,
therefore--the labour of the average multitude--remains the sole agent
in the production of wealth, after all.

Capital, however, as thus understood, has, he says, this
peculiarity--that, being labour in an externalised and also in a
permanent form, it is capable of being detached from the labourers and
appropriated by other people; and the essence of modern capitalism is
neither more nor less than this--the appropriation of the instruments of
production by a minority who are not producers. So long as the
implements of production were small and simple, and such that each could
be used by one man or family, the divorce between the labourer and his
implements was not easy to accomplish; but in proportion as these simple
implements were developed into the aggregated mechanisms of the factory,
each of which aggregates was used in common by hundreds and even by
thousands of labourers, the link between the implement and the user was
broken by an automatic process; for a single organised mechanism used by
a thousand men could not, in the nature of things, be owned by each one
of the thousand individually, and collective ownership by all of them
was an idea as yet unborn. Under these circumstances, with the growth of
modern machinery, the ownership of the implements of production passed,
by what Marx looked upon as a kind of historical fatality, into the
hands of a class whose activities were purely acquisitive, and had no
true connection with the process of production at all; and this class,
he said, constitutes the capitalists of the modern world.

The results of this process have, according to him, been as follows:
Society has become divided into two contrasted groups--an enormous
group, and a small one. The enormous group--the great body of every
nation--the people--the labouring mass--the one true producing
power--has been left without any implements by means of which its labour
can exert itself, and these implements have been monopolised by the
small group alone. The people at large, in fact, have become like the
employés of a single mill-owner, who have no choice but to work within
the walls of that mill or starve; and the possessing class at large has
become like the owner of such a single mill, who, holding the keys of
life and death in his hands, is able to impose on the mill-workers
almost any terms he pleases as the price of admission to his premises
and to the privilege of using his machinery; and the price which such an
owner, so situated, will exact (such was the contention of Marx)
inevitably must come, and historically has come, to this--namely, the
entire amount of goods which the labouring class produces, except such a
minimum as will just enable its members to keep themselves in working
order, and to reproduce their kind. Thus all capital, as at present
owned, all profits, and all interest on capital, are neither more nor
less than thefts from the labouring class of commodities which are
produced by the labouring class alone.

The argument of Marx is not, however, finished yet. There remains a
third part of it which we still have to consider. Writing as he did,
almost half a century ago, he said that the process of capitalistic
appropriation had not--yet completed itself. A remnant of producers on a
restricted scale survived, still forming a middle class, which was
neither rich nor poor. But, he continued, in all capitalistic countries,
a new movement, inevitable from the first, had set in, and its pace was
daily accelerating. Just as the earlier capitalists swallowed up most of
the small producers, so were the great capitalists swallowing up the
smaller, and the middle class which survived was disappearing day by
day. Wages, meanwhile, were regulated by an iron law. Under the system
of capitalism it was an absolute impossibility that they could rise. As
he put it, in language which has since become proverbial, "The rich are
getting richer, the poor poorer, the middle class is being crushed out,"
and the time, he continued, was in sight already--it would arrive,
according to him, before the end of the nineteenth century--when nothing
would be left but a handful of idle and preposterous millionaires on the
one hand, and a mass of miserable ragamuffins who provided all the
millions on the other, having for themselves only enough food and
clothing to enable them to move their muscles and protect their
nakedness from the frost. Then, said Marx, when this contrast has
completed itself, the situation will be no longer tolerable. "Then the
knell of the capitalistic system will have sounded." The producers will
assert themselves under the pressure of an irresistible impulse; they
will repossess themselves of the implements of production of which they
have been so long deprived. "The expropriators will in their turn be
expropriated," and the labourers thenceforth owning the implements of
production collectively, all the wealth of the world will forever
afterwards be theirs.

This concluding portion of the gospel of Marx--its prophecies--has been
in many of its details so completely falsified by events that even his
most ardent disciples no longer insist on it. I have only mentioned it
here because of the further light which it throws on what alone, in
this discussion, concerns us--namely, the Marxian theory of labour as
the sole producer of wealth, and the absolute nullity, so far as
production goes, of every form of activity associated with the
possession of capital, or with any class but the labouring.

This theory of production, then, which has been the foundation of
socialism as a party--or, as Gronlünd, a disciple of Marx, calls it,
"its _idée mère_"--and which is still its foundation for the great
majority of socialists, we will now examine in detail, and, considering
how complex are the processes of production in the modern world, ask how
far it gives us, or fails to give us, even an approximately complete
account of them.

We shall find that, in spite of the plausibility with which the talent
of Marx invested it, this basic doctrine of so-called scientific
socialism is the greatest intellectual mare's-nest of the century which
has just ended; and when once we have realised with precision on what,
in the modern world, the actual efficiency of the productive process
depends, we shall see that the analysis of Marx bears about the same
relation to the economic facts of to-day that the child's analysis of
matter into the four traditional elements, or the doctrine of Thales
that everything is made of water, bears to the facts of chemistry as
modern science has revealed them to us.



In approaching the opinions of another, from whom we are about to
differ, we gain much in clearness if at starting we can find some point
of agreement with him. In the case of Marx we can find this without
difficulty, for the first observation which our subject will naturally
suggest to us is an admission that, within limits, his theory of
production is true. Whatever may be the agencies which are required to
produce wealth, human effort is one of them; and into whatever kinds
this necessary agency may divide itself, one kind must always be labour,
in the sense in which Marx understood it--in other words, that use of
the hands and muscles by which the majority of mankind have always
gained their livelihood.

It is, moreover, easy to point out actual cases in which all the wealth
that is produced is produced by labour only. The simplest of such cases
are supplied us by the lowest savages, who manage, by their utmost
exertions, to provide themselves with the barest necessaries. Such
cases show that labour, wherever it exists, produces at least a minimum
of what men require; for if it were not so there would be no men to
labour. Such cases show also another thing. The most primitive races
possess rude implements of some kind, which any pair of hands can
fashion, just as any pair of hands can use them. These rude implements
are capital in its embryonic form; and so far as they go, they verify
the Marxian theory that capital is nothing but past labour crystallised.

But we need not, in order to see labour, past and present, operating and
producing in a practically unalloyed condition, go to savage or even
semi-civilised countries. The same thing may be seen among groups of
peasant proprietors, which still survive here and there in the remoter
parts of Europe. These men and their families, by their own unaided
labour, produce nearly everything which they eat and wear and use. Mill,
in his treatise on _Political Economy_, gives us an account of this
condition of things, as prevailing among the peasants in certain
districts of Germany. "They labour early and late," he says, quoting
from a German eulogist. "They plod on from day to day and from year to
year, the most untirable of human animals." The German writer admires
them as men who are their own masters. Mill holds them up as a shining
and instructive example of the magic effect of ownership in intensifying
human labour. In any case such men are examples of two things--of
labour operating as the sole productive agency, and also of such labour
self-intensified to its utmost pitch. And what does the labour of these
men produce? According to the authority from which Mill quotes, it
produces just enough to keep them above the level of actual want. Here,
then, we have an unexceptionable example of the wealth-producing power
of labour pure and simple; and if we imagine an entire nation of men
who, as their own masters, worked under liked conditions, we should have
an example of the same thing on a larger and more instructive scale. We
should have a whole nation which produced only just enough to keep it
above the level of actual bodily want.

And now let us turn from production in an imaginary nation such as this,
and compare it with production at large among the civilised nations of
to-day. Nobody could insist on the contrast between the efficiency of
the two processes more strongly than do the socialists themselves. The
aggregate wealth of the civilised nations to-day is, they say, so
enormous--it consists of such a multitude of daily renewed goods and
services--that luxuries undreamed of by the labourer of earlier times
might easily be made as abundant for every household as water. In other
words, if we take a million men, admittedly consisting of labourers pure
and simple in the first place, and the same number of men exerting
themselves under modern conditions in the second place, the industrial
efforts of the second million are, hour for hour, infinitely more
productive than the industrial efforts of the first. If, for example, we
take the case of England, and compare the product produced per head of
the industrial population towards the close of the seventeenth century,
with the product produced less than two centuries afterwards, at the
time when Marx was writing his work on _Capital_, the later product
will, according to the estimate of statisticians, stand to the earlier
in the proportion of thirty-three to seven.

Now, if we adopt the scientific theory of Marx that labour pure and
simple is the sole producer of wealth, and that labour is productive in
proportion to the hours devoted to it, how has it happened--this is our
crucial question--that the amount of labour which produced seven at one
period should produce thirty-three at another? How are we to explain the
presence of the additional twenty-six?

The answer of Marx, and of those who reason like him, is that, owing to
the development of knowledge, mechanical and chemical especially, and
the consequent development of industrial methods and machinery, labour
as a whole has itself become more productive. But to say this is merely
begging the question. To what is this development of knowledge, of
methods, and of machinery due? Is it due to such labour as that of the
"untirable human animals," to which Mill refers as an example of labour
in its intensest form? In a word, does ordinary labour, or the
industrial effort of the majority, contain in itself any principle of
advance at all?

We must, in order to do justice to any theory, consider not only the
points on which its exponents lay the greatest stress, but also those
which they recognise as implied in it, or which we may see to be implied
in it ourselves. And if we consider the theory of Marx in this way, we
shall see that labour, in the sense in which he understands the word,
does contain principles of advance which are of two distinguishable

One of these is recognised by Marx himself. Just as, when he says that
labour is the sole productive agency, he assumes the gifts of nature,
which provide it with something to work upon, so, when he conceives of
labour as the effort of hand and muscle, he assumes a human mind behind
these by which hand and muscle are directed. Such being the case, he
expressly admits also that mind is in some cases a more efficient
director than in others, and is able to train the hands and muscles of
the labourer, so that these acquire the quality which is commonly called
skill. Ruskin, who asserted, like Marx, that labour is the sole
producer, used in this respect a precisely similar argument. He defined
skill as faculty which exceptional powers of mind impart to the hands of
those by whom such powers are possessed, from the bricklayer who, in
virtue of mere alertness and patience, can lay in an hour more bricks
than his fellows, up to a Raphael, whose hands can paint a Madonna,
while another man's could hardly be trusted to distemper a wall evenly.

Now, in skill, as thus defined, we have doubtless a correct explanation
of how mere labour--the manual effort of the individual--may produce, in
the case of some men, goods whose value is great, and goods, in the case
of other men, whose value is comparatively small; and since some epochs
are more fertile in developed skill than others, an equal amount of
labour on the part of the same community may produce, in one century,
goods of greater aggregate value than it was able to produce in the
century that went before it. But these goods, whose superior value is
due to exceptional skill--or, as would commonly be said, to qualities of
superior craftsmanship--though they form some of the most coveted
articles of the wealth of the modern world, are not typical of it; and
from the point of view of the majority, they are the part of it which is
least important. The goods whose value is due to exceptional
craftsmanship--such as an illuminated manuscript, for example, or a vase
by Benvenuto Cellini--are always few in number, and can be possessed by
the few only. The distinctive feature of wealth-production in the modern
world, on the contrary, is the multiplication of goods relatively to the
number of the producers of them, and the consequent cheapening of each
article individually. The skill of the craftsman gives an exceptional
value to the particular articles on which his own hands are engaged. It
does not communicate itself to the labour of the ordinary men around
him. The agency which causes the increasing and sustains the increased
output of necessaries, comforts, and conveniences in the progressive
nations of to-day must necessarily be an agency of some kind or other
which raises the productivity of industrial exertion as a whole. Those,
therefore, who, in spite of the fact that the productivity of modern
communities has, relatively to their numbers, undergone an increase
which is general, still maintain that the sole productive agency is
labour, must seek for an explanation of this increase in some other fact
than skill.

And without transgressing the limits which the theory of Marx imposes on
us, such a further fact is very easy to find. Adam Smith opens his
_Wealth of Nations_ with a discussion of it. The chief cause, he says,
which in all progressive countries increases the productive power of the
individual labourer, is not the development among a few of
potentialities which are above the average, but a more effective
development of potentialities common to all, in consequence of labour
being divided, so that each man devotes his life to the doing of some
one thing. Thus if ten ordinary men were to engage in the business of
pin-making, each making every part of every pin for himself, each man
would probably complete but one pin in a day. But if each man makes one
part, and nothing else but that, thus repeating incessantly a single
series of motions, each will acquire the knack of working with such
rapidity that the ten together will make daily, not ten pins, but some
thousands. Here we have labour divided by its different applications,
but not requiring different degrees of capacity. We have the average
labour of the average man still. And here we have a fact which, unlike
the fact of skill--a thing in its nature confined to the few
only--affords a real explanation, up to a certain point, of how ordinary
labour as a whole, without ceasing to be ordinary labour, may rise from
a lower to a higher grade of efficiency.

But such simple divisions of labour as those which are here in question
fail, for a reason which will be specified in another moment, to carry
us far in the history of industrial progress. They do but bring us to
the starting-point of production as it exists to-day. The efficiency of
productive effort has made all its most astounding advances since the
precise time at which the _Wealth of Nations_ was written; and these
advances we shall find that it is quite impossible to explain merely by
a further division of average and equal labour. Such a further division
has no doubt been an element of the process; but it is an explanation
which itself requires explaining. Even in Adam Smith's time two other
factors were at work, which have ever since been growing in magnitude
and importance; and the secret of modern production lies, we shall find,
in these. I call them two, but fundamentally there is only one, for
that which is most obvious, and of which I shall speak first, is
explainable only as the direct result of the second. This, the most
obvious factor, is the modern development of machinery. The other is the
growing application of exceptional mental powers, not to the _manual
labour of the men by whom these powers are possessed_, but to the
_process of directing and co-ordinating the divided labours of others_.

Now, as to machinery, Marx and his followers, as we have seen, maintain
that it represents nothing but the average labour of the past; and so
long as it exists only in its smaller and simpler forms, the devising
and constructing of which are not referable to any faculties which we
are able to distinguish from those of the average labourer, we have
further seen that the theory of Marx holds good. Labour produces alike
both the finished goods and its implements. But in proportion as
machines or other contrivances, such as vessels, grow in size or
complexity, and embody, as they do in their more modern developments,
ingenuity of the highest and knowledge of the most abstruse kinds, the
situation changes; and we are able to identify certain faculties as
essential to the ultimate result, which affect the work of the
labourers, but which do not emanate from themselves. Any three men of
average strength and intelligence might make a potter's wheel together,
or build a small boat together, as they frequently do now, their
several tasks being interchangeable, or assigned to each of them by easy
mutual agreement. The business of directing labour has not separated
itself from the actual business of labouring. Each man knows the object
of what he does, and can co-ordinate that object with the object of what
is done by his fellows. But when the ultimate result is something so
vast and complicated that a thousand men instead of three have to
co-operate in the production of it, when a million pieces of metal, some
large and some minute, have to be cast, filed, turned, rolled, or bent,
so that finally they may all coalesce into a single mechanical organism,
no one labourer sees further than the task which he performs himself. He
cannot adjust his work to that of another man, who is probably working a
quarter of a mile away from him, and he has in most cases no idea
whatever of how the two pieces of work are related to each other. Each
labourer has simply to perform his work in accordance with directions
which emanate from some mind other than his own, and the whole practical
value of what the labourers do depends on the quality of the directions
which are thus given to each.

In other words, in proportion as the industrial process is enhanced in
productivity by the concentration on it of the higher faculties of
mankind, there is an increasing fission of this process as a whole into
two kinds of activity represented by two different groups. We have no
longer _merely_--although we have this _still_--an increasing division
of labour; but we have the labourers of all kinds and grades separating
themselves into one group on the one hand, and the men who direct their
labour, as a separate group, on the other hand.

The function of the directive faculties, as applied thus to the
operations of modern labour, can perhaps be most easily illustrated by
the case of a printed book. Let us take two editions of ten thousand
copies each, similarly printed, and priced at six shillings a copy; the
one being an edition of a book so dull that but twenty copies can be
sold of it, the other of a book so interesting that the public buys the
whole ten thousand. Now, apart from its negligible value as so many tons
of waste paper, each pile of books represents economic wealth only in
proportion to the quantity of it for which the vendors can find
purchasers. Hence we have in the present case two piles of printed paper
which, regarded as paper patterned with printer's ink, are similar, but
one of which is wealth to the extent of three thousand pounds, while the
other is wealth to the extent of no more than six pounds. And to what is
the difference between these two values due? It obviously cannot be due
to the manual labour of the compositors, for this, both in kind and
quantity, is in each case the same. It is due to the special directions
under which the labour of the compositors is performed. But these
directions do not emanate from the men by whose hands the types are
arranged in a given order.

They come from the author, who conveys them to the compositors through
his manuscript; which manuscript, considered under its economic aspect,
is neither more nor less than a series of minute orders, which modify
from second to second every movement of the compositors' hands, and
determine the subsequent results of every impress of the type on paper;
one mind thus, by directing the labour of others, imparting the quality
of much wealth or of little or of none, to every one of the ten thousand
copies of which the edition is composed.

Similarly when a man invents, and brings into practical use, some new
and successful apparatus such, let us say, as the telephone, the same
situation repeats itself. The new apparatus is an addition to the
world's wealth, not because so many scraps of wood, brass, nickel,
vulcanite, and such and such lengths of wire are shaped, stretched, and
connected with sufficient manual dexterity--for the highest dexterity is
very often employed in the making of contrivances which turn out to be
futile--but because each of its parts is fashioned in obedience to
certain designs with which this dexterity, as such, has nothing at all
to do. The apparatus is successful, and an addition to the world's
wealth, because the designs of the inventor, just like the author's
manuscript, constitute a multitude of injunctions proceeding from a
master-mind, which is not the mind of those by whose hands they are
carried into execution.

And with the direction of labour generally, whether in the production of
machinery or the use of the machinery in the production of goods for the
public, the case is again the same. We have manual labour of a given
kind and quality, which assists in producing what is wanted or not
wanted--what is so much wealth or simply so much refuse, in accordance
with the manner in which all this labour is directed by faculties
specifically different from those exercised by the manual labourers

And now we are in a position to sum up in a brief and decisive formula
what the difference between the sets of faculties thus contrasted is. It
is not essentially a difference between lower and higher, for some forms
of labour, such as that of the great painter, may be morally higher than
some forms of direction. The difference is one not of degree, but of
kind, and includes two different psycho-physical processes. Labour, from
the most ordinary up to the rarest kind, _is the mind or the brain of
one man affecting that man's own hands_, and the single task on which
his hands happen to be engaged. The directive faculties are _the mind or
the brain of one man simultaneously affecting the hands of any number of
other men_, and through their hands the simultaneous tasks of all of
them, no matter how various these tasks may be.



The human activities and faculties, then, which are involved in the
production of modern wealth, are not, as Marx says--and as the orthodox
economists said, whom he rightly calls his masters, and as their
followers still say--of one kind--namely, those embodied in the
individual task-work of the individual, to which Marx, Ricardo, and Mill
alike give the name of "labour"; they are of two kinds. And this,
indeed, the earlier economists recognised, as we may see by Mill's
casual admission that the progress of industrial effort depends before
all things on thought and the advance of knowledge. But they recognised
the fact in a general way only. How thought and knowledge affected the
industrial process they made no attempt to explain, otherwise than by
comprehending them on occasion under the common name of labour, which
they assigned throughout most of their arguments to manual task-work

Now, it is doubtless true that, as a mere matter of verbal propriety,
this general sense may be given to the word "labour," if we please; but
if in discussing the efforts which produce wealth we admit that these
efforts are not of one kind but two, and if the word "labour" is, in
nine cases out of ten, employed with the definite intention of
designating only one of them, it is impossible to reason about the
industrial process intelligibly, so long as we apply also the same name
to the other. We might as well use the word "man"--as with reference to
some problems we are perfectly right in doing--to designate both men and
women, and then attempt to discuss the relations between the two sexes.

For the directive faculties, so essentially distinct from those to which
universal custom has allocated the name of labour, it is difficult to
find a name equally convenient and satisfying. In default of a better, I
have, on former occasions, applied to it the name of Ability; and this
will serve our purpose here--especially as it is a name which has been,
of recent years, applied by many of the more thoughtful socialists
themselves to certain activities of a mental and moral kind, which their
conception of labour cannot be made to include, but which they are
beginning to recognise as playing some part in production. We must
remember, however, that we are using it in a strictly technical sense,
which will in some respects be narrower than the ordinary, and in some
more comprehensive. It will exclude all kinds of cleverness unapplied
to economic production; and will include many powers, in so far as such
production is affected by them, to the expression of whose scope and
character it may sometimes appear inadequate.[1]

And now when we have come thus far, a quite new question arises. We have
seen how ability is, by its direction of labour, the chief agency in
that process which produces wealth to-day, and how it makes the amount
produced, relatively to the number of the producers, so incomparably
greater than it ever was under any previous system. We have now to
consider the means by which this faculty of direction is exercised.

In order to understand this, we must turn our attention again to
capital, as something distinct and detached from the human efforts that
have produced it; and we shall find that the conception of it which
dominated the thought of Marx, and that which dominates the thought of
the orthodox school of economists, either excludes altogether, or fails
to reveal the nature of, that particular force and function of it which,
in the modern world, are fundamental.

Capital is divided traditionally into two kinds, technically called
"fixed" and "circulating." By fixed capital, which is what Marx had
mainly in view, is meant machinery, and the works and structures
connected with it; and it is called "fixed" on account of its
comparative permanence. By circulating capital is meant, as Adam Smith
puts it, any stock of those consumable commodities which, produced by
the aid of machinery, the merchant or the store-keeper buys in order to
sell them at a profit; and it is called "circulating" because the
commodities which are sold to-day are replaced by new ones of an
equivalent kind to-morrow.

Now, as to fixed capital, or the endlessly elaborated machinery of the
modern world, we have seen already that this is, in its distinctive
features, not, as Marx declared it to be, a crystallisation of labour,
but a crystallisation of the ability by which labour has been directed;
but this revised explanation tells us nothing of the means by which the
direction is accomplished. Still less is any light thrown on the
question by the nature of circulating capital, as Adam Smith understands

The kind of capital which alone concerns us here is a kind which
resembles circulating capital in respect of its material form, and is
often indeed in this respect identical with it; but it differs from
circulating capital in respect of the use made of it. Such capital we
may call wage-capital. Wage-capital, although in practice it disguises
itself under the form of money, is essentially a stock of goods which
are the daily necessaries of life, but which, instead of being sold to
the public, like the goods of the store-keeper, at a profit, are
distributed by their possessor among a special group of labourers on
conditions. The first of these is naturally that the labourers do work
of some sort. The second condition, and the one that concerns us here,
is that, besides doing work of some sort, each labourer shall do the
work which the distributer of the goods prescribes to him.

Here we have before us the means by which, in the modern world, the
ability of the few directs the labour of the many; and, in proportion to
the quality and intensity of the directive powers that are exercised,
adds to the value of the results which this labour would have produced
otherwise. Thus in wage-capital we have the capital of the modern world
in what dynamically is its primary and parent form--a kind of capital
which improved machinery is always tending to augment, but of whose use
the machinery itself, its renewal, and its continued improvement, are
the consequences.

That such is the case might be illustrated by any number of familiar
examples. A man invents a new machine having some useful purpose--let us
say the production of some new kind of manure, which will double the
fertility of every field in the country. In order to put this machine on
the market, and make it a fact instead of a mere conception, the first
thing necessary is, as every human being knows, that the inventor shall
possess, or acquire, the control of capital. And what is the next step?
When the capital is provided, how will it first be used? It will be used
in the form of wages, or articles of daily consumption, which will be
distributed among a certain number of mechanics and other labourers, on
condition that they set about fashioning, in certain prescribed groups,
so much metal into so many prescribed shapes--some of them shaping it
into wheels, some into knives and rollers, some into sieves, rods,
cranks, cams, and eccentrics, in accordance with patterns which have
never been followed previously; and of all these individual operations
the new machine, as a practical implement, is the result. The machine is
new, and it is an addition to the wealth-producing powers of the world,
not because it embodies so much labour, but because it embodies so much
labour directed in a new way; and it is only by means of the conditions
which the possession of wage-capital enables the inventor or his
partners to impose upon every one of the labourers that the machine, as
a practical implement, comes into existence at all.

Hence we see that Marx was at once right and wrong when he said that
modern capitalism is, in its essence, monopoly. It is monopoly; but it
is not primarily, as Marx thought, a passive monopoly of improved
instruments of production. It is primarily a monopoly of products which
are essential to the life of the labourer; and it is a monopoly of
these, not in the invidious sense that the monopolists retain them for
their own personal consumption, as they do in the case of rare wines and
fabrics, which can, from the nature of the case, be enjoyed by a few
only. It is a monopoly of them in the sense that the monopolists have
such a control over their distribution as enables them to control the
purely technical actions of those persons who ultimately own and consume
the whole of them.[2]

Modern capital, then, I repeat, is primarily wage-capital, such capital
as modern machinery being the direct result of its application; and
wage-capital is productive, not in virtue of any quality inherent in
itself, but merely because as a fact, under the modern system, it
constitutes the reins by which the exceptional ability of a few guides
the labour, skilled or unskilled, of the many. It is the means by which
the commonest labourer, who hardly knows the rule of three, is made to
work as though he were master of the abstruest branches of mathematics;
by which the artisan who only has a smattering--if he has as much as
that--of mechanics, metallurgy, chemistry, is made to work as though all
the sciences had been assimilated by his single brain.

Let any one consider, for example, one of the great steel bridges which
now throw their single spans over waters such as the Firth of Forth.
These structures are crystallised labour, doubtless, but they are, in
their distinctive features, not crystallised labour as such. They are
crystallised mechanics, crystallised chemistry, crystallised
mathematics--in short, crystallised intellect, knowledge, imagination,
and executive capacity, of kinds which hardly exist in a dozen minds out
of a million; and labour conduces to the production of such astonishing
structures only because it submits itself to the guidance of these
intellectual leaders. And the same is the case with modern production
generally. Though labour is essential to the production of wealth even
in the smallest quantities, the distinguishing productivity of industry
in the modern world depends not on the labour, but on the ability with
which the labour is directed; and in the modern world the primary
function of capital is that of providing ability with its necessary
instrument of direction.

No unprejudiced person, who is capable of coherent thought, can, when
the matter is thus plainly stated, possibly deny this. That it cannot be
denied will be shown in the two following chapters by recent admissions
on the part of socialists themselves, the more thoughtful of whom have
now virtually abandoned the earlier theoretical framework of socialism
altogether, and are trying to substitute a new one, with which we will
deal later, and which will indeed prove the main subject of our


[1] When I insisted on this distinction between "labour" and "ability"
in America, innumerable critics met me with two objections. One of
these, as stated by a writer who confessed himself otherwise in entire
agreement with me, was this: "It is impossible, as Mr. Mallock attempts
to do, to draw a hard-and-fast line between mental effort and muscular."
No such attempt is made. As I pointed out in one of my speeches, many
kinds of "labour" (_e.g._ that of the great painter) exhibit higher
mentality than do many kinds of ability. Further, I pointed out that, in
a technical sense, the same effort may be either an effort of labour or
ability, according to its application. Thus, if a singer sings to an
audience, his effort is technically "labour," because it ends with the
single task; but if he sings so as to produce a gramophone record, his
effort is an act of "ability," for he influences the products of other
men, by whom the records are multiplied. The second objection was
expressed by one of my critics thus: "I say that all productive effort
is labour.... I dare you to tell any one of these genii that they are
not labourers." Another critic said: "Just as 'land' in economics means
all the forces of nature, so does 'labour' mean all the forces of man.
Why, then, speak of ability?" These criticisms are purely verbal. If we
like to take "labour" as a collective name for all forms of human
effort, we can of course do so; but in that case we must find other
differential names for the different forces of effort individually. To
give them all the same name is not to explain them. It is to tie them
all up in a parcel.

[2] If this fact requires any further exemplification, we can find one
on a large scale in the pages of Marx himself. According to him the
first appreciable capitalistic movement--the first leaping of the modern
system in the womb--took place in the English cloth trade about four
hundred years ago. Now, if capitalism were merely, as according to Marx
it is, a passive monopoly by some men of implements which have been
produced by others, the pioneers of capitalism in the reign of Henry
VIII. would have got into their possession all the hand-looms then in
use; they would have taken their toll in kind from all whom they allowed
to use them; and there the matter would have ended. The looms of to-day
would be the looms of four hundred years ago. The passive ownership of
machines does nothing to improve their construction. If a gang of
ignorant thieves could steal all the watches in America, and then let
them out to the public at so much a month or year, this would not
convert the three-dollar watches into chronometers. And how little mere
labour, or the experience gained by labour, tends to improve the
implements which the labourer uses is shown by the fact that the looms
which wove Anne Boleyn's petticoats were practically the same as the
looms which wove those of Semiramis.



In saying that, up to the point which our argument has thus far reached,
the more thoughtful among the socialists to-day concede and even assert
its truth, I have evidence in view of a very opposite kind. When I
delivered, as I did recently, a series of addresses on socialism to
various meetings in America, I approached the subject in the manner in
which I have approached it here. I began with the process of production
pure and simple, and I showed how crude and childish, as applied to
production in modern times, was the analysis of Marx and all the earlier
socialists. I showed, as I have shown here, that, the amount of labour
being given, the quantity and quality of wealth that will result from
its exercise depend on the ability with which by means of wage-capital
this labour is directed.

The two addresses in which these points were elaborated had no sooner
been delivered than, from all parts of the country, through newspapers
and private letters, and sometimes by word of mouth, socialists of
various types addressed themselves to the business of replying to me.
These replies, whatever may have been their differences otherwise, all
took the form of a declaration that I was only wasting my time in
exposing the doctrine that labour is the sole producer of wealth, and in
laying such stress on the part played by directive ability; for no
serious socialist of the present day any longer believed the one, or
failed to recognise the other. Thus one of my critics told me that what
I ought to do was "to discuss the principles of socialism as understood
and accepted by the intelligent disciples, and not the worn-out and
discredited theories of Marx." Another was good enough to tell me that I
had "cleverly accomplished the task of exposing the errors of Marx, both
of premise and of logic"; but the leaders of socialistic thought "in its
later developments" had, he proceeded to say, long ago outgrown these. A
third wrote me a letter bristling with all kinds of challenges, and
asked me if I thought, for example, that socialists were such fools as
not to recognise that the talents of an inventor like Mr. Edison
increased the productivity of labour by the new direction which they
gave to it. I might multiply similar quotations, but one more will be
enough here. It is taken from a long article directed against myself by
Mr. Hillquit--a writer to whom my special attention was called as by far
the most accomplished exponent, among the militant socialists of
America, of socialism in its most logical and most highly developed
form. "It requires," said Mr. Hillquit, "no special genius to
demonstrate that all labour is not alike, nor equally productive. It is
still more obvious that common manual labour is impotent to produce the
wealth of modern nations--that organisation, direction, and control are
essential to productive work in the field of modern production, and are
just as much a factor in it as mere physical effort."[3]

But we need not confine ourselves to my own late critics in America. The
general history of socialism as a reasoned theory is practically the
same in one country as in another. The intellectual socialists in
England, among whom Mr. Bernard Shaw and Mr. Sidney Webb are prominent,
express themselves in even plainer terms with regard to the part which
directive ability, as opposed to labour, plays in the modern world.
"Ability," says Mr. Shaw, employing the very word, is often the factor
which determines whether a given industry shall make a loss of five per
cent. or else a profit of twenty; and Mr. Webb, as we shall have
occasion to see presently, carries the argument further, and states it
in greater detail.

Why, then, it may be asked, should a critic of contemporary socialism
think it worth while to expose with so much minuteness a fallacy which
intellectual socialists now all agree in repudiating, and to insist with
such emphasis on facts which they profess to recognise as self-evident?
To this question there are two answers.

One of these I indicated at the close of our opening chapter; and this
at the cost of what in logic is a mere digression, it will be desirable,
for practical purposes, to state it with greater fulness.

Admissions and assertions, such as those which I have just now quoted,
do, no doubt, represent a definite intellectual advance which has taken
place in the theory of socialism, among those who are its most
thoughtful exponents, and in a certain sense its leaders. They represent
what these leaders think and say among themselves, and what they put
forward when disputing with opponents who are competent to criticise
them. But what they do not represent is socialism as still preached to
the populace, or the doctrine which is still vital for socialists as a
popular party. This is still, just as it was originally, the socialism
of Marx in an absolutely unamended form. It is the doctrine that the
manual efforts of the vast multitude of labourers, directed only by the
minds of the individual labourers themselves, produce all the wealth of
the world; that the holding of any of this wealth by any other class
whatever stands for nothing but a system of legalised plunder; and that
the labourers need only inaugurate a legislation of a new kind in order
to secure and enjoy what always was by rights their own. Let me
illustrate this assertion by two examples, one supplied to us by
England, the other by America.

In England the body which calls itself the Social Democratic Federation,
and represents at this moment socialism of the more popular kind, began
its campaign with a manifesto which was headed with the familiar words,
"All wealth is due to labour; therefore to the labourer all wealth is
due." This text or motto was followed by certain figures, with regard to
the total income of Great Britain, and the manner in which it is at
present distributed. Labour was represented as getting less than
one-fourth of the whole, and the labourers were informed that if they
would but "educate themselves, agitate, and organise," the remaining
three-fourths would automatically pass into their possession. This
document, it is true, was issued some twenty years ago;[4] but that the
form which socialism takes, when addressed to the masses of the
population, has not appreciably altered from that day to this, will be
made sufficiently clear by the following pertinent fact. Shortly after
my arrival in America, in the winter of 1907, the most active
disseminator of socialistic literature in New York sent me, by way of a
challenge, a new and very spruce volume, which contained the most
important of his previous leaflets and articles, collected and
republished, and claiming renewed attention. The first of these--and it
was signalised by an accompanying advertisement as fundamental--bore the
impressive title of, "Why the Working Man should be a Socialist," and
the answer to this question is given in the writer's opening words. "You
know," he says, addressing any labourer and the street-worker, "or you
ought to know, that you alone produce all the good things of life; and
you know, or you ought to know, that by so simple a process as that of
casting your ballot intelligently you will be able"--to do what? The
writer explains himself in language which, except for a difference in
his statistics, is almost a verbal repetition of that of his English
predecessors. He specifies two sums, one representing the income which
each working-man in America would receive were the entire wealth of the
country divided equally among the manual labourers; the other
representing the income which, on an average, he actually receives as
wages; and the writer tells every working man that, by "merely casting
his ballot intelligently," he can secure for himself the whole
difference between the larger sum and the less.[5]

But the fact that the Marxian doctrine of the all-productivity of
labour, and the consequent economic nullity of all other forms of
effort, still supplies the main ideas by which popular socialism is
vitalised, is shown perhaps even more distinctly by the popular hopes
and demands which result from this doctrine indirectly than it is by the
direct reassertion of the formal doctrine itself. One of the members of
the Parliamentary Labour party in England celebrated his success at the
polls by a letter to the _Times_, proclaiming that socialism was a
moral quite as much as an economic movement, and that an object which to
socialists was dearer even than the seizure of the riches of the rich,
was the achievement of "economic freedom," or, in other words, the
"emancipation of labour," or, in other words again, the abolition of the
system which he described as "wagedom." I merely mention the particular
letter in question in order to remind the reader of these familiar
phrases, which are current in every country where the theory of
socialism has spread itself.

Now, what does all this talk about the emancipation of labour mean? It
can only mean one or other of two things: either that the economic
prosperity of every nation in the future will depend on the emancipation
of every average mind from the guidance of any minds that are in any way
superior to itself, or are able to enhance the productivity of an
average pair of hands--a proposition so ludicrous that nobody would
consciously assent to it; or else it means a continued assent to the
theory which fails to correlate labour with directive ability at all,
and so never raises the question of whether the latter is necessary or

What, then, becomes of that chorus of vehement protestations, with which
my critics in America were all so eager to overwhelm me, to the effect
that socialists to-day recognise as clearly as I do that "common manual
labour," as Mr. Hillquit puts it, "is impotent to produce the wealth of
modern nations," apart from the "organisation and control" of the minds
most competent to direct it? That the more intellectual socialists of
to-day do recognise this fact--some with greater and some with less
distinctness--is the very point on which I am anxious to insist. We
shall have abundant opportunities for considering it later on. For the
moment, however, I pause to ask them the following question.
Recognising, as they do, and eagerly proclaiming as they do, whenever
they address themselves to those who are capable of serious dispute with
them, that the original theory of socialism, which was the creed of such
bodies as the International, is absolutely false in itself, and in many
of the expectations which it stimulates, why do not they set themselves,
whenever they address the multitude, to expose and repudiate a fallacy
in which they no longer believe? Do they do this? Do they make an
attempt to do this? On the contrary, as a rule, though there are
doubtless many honourable exceptions, they endeavour to hide from the
multitude their intellectual change of front altogether; and, instead of
insisting that the undirected labour of the many is, in the modern
world, impotent to produce anything, they continue to speak of it as
though it produced everything, and as though no class other than the
labouring fulfilled any economic function or had any right to exist.[6]

Let me give the reader an example, which is curiously apt here. It is
taken from Mr. Hillquit's own attack on myself, which filled the front
sheet of a newspaper, and was distributed to the public at the door of
one of the buildings in which I spoke. Of the short passages, amounting
to some twenty lines out of six hundred, in which alone he condescended
to detailed argument, the first is that in which, as we have already
seen, he declares that all socialists know, without any instruction on
my part, that common manual labour, unless it is directed by ability, is
"impotent to produce the wealth of modern nations." But having made this
admission with much blowing of trumpets, he immediately drops it, and
instead of developing its consequences, he diverts the attention of his
readers from it by a long series of irrelevancies; nor does he return to
the question of directive ability at all till he is nearing the end of
his discourse, when he suddenly takes it up again, declaring that he
will meet and refute me on ground which I myself have chosen, and show
that wealth--at all events in the commercial sense--is still produced by
manual labour alone. He refers to my selection of the case of a printed
book, as illustrating, in the manner explained in an earlier chapter,
the part which directive ability plays in modern production. The
economic value of an edition of a printed book, I said, as the reader
will remember, depends in the most obvious way, not on the labour of
compositors, but on the quality of the directions which the author
imposes on this labour through his manuscript--the author's mind being
typical of directive ability generally. And what has Mr. Hillquit--the
intellectual Ajax of the socialists--got to say about this? "Whether a
book," he says, "is a work of genius or mere rubbish will largely affect
its literary or artistic value; but it will have very little bearing on
its economic or commercial value." This, he goes on to argue, will,
despite all my objections, be found to depend on ordinary manual labour,
of which the labour of the hands of the compositors is that which
concerns us most. Nothing, according to him, can be more evident than
this. "For the market price," he says, "of a wretched detective story,
of the same length as Hamlet, and printed in the same way, will be
exactly the same as that of a copy of Hamlet itself."

Now, if we consider Mr. Hillquit as a purely literary critic, we can but
admire his subtlety in discovering that the literary value of a book is
largely affected by the fact of the book's not being rubbish; but when
he descends from pure criticism to economics, it is difficult, unless we
suppose him to have taken leave of his senses, to imagine that he can
himself believe in the medley of nonsense propounded by him. For what
he is here doing--or more probably pretending to do--is to confuse the
cost of producing an edition of a book with the commercial value of that
edition when produced. The labour in question no doubt determines the
price at which the printed paper can be sold at a profit, or without
loss; but the number of copies which the public will be willing to buy,
or, in other words, the value of the edition commercially, depends on
qualities resident in the mind of the author, which render the book
attractive to but few readers, or to many. Whether these qualities
amount to genius in the higher sense of the word, or to nothing more
than a knack of titillating the curiosity of the vulgar, does not affect
the question. In either case--and this is the sole important fact--they
are qualities of the author's mind, and of the author's mind alone; and
the labour of the compositors conduces to the production of a pile of
volumes which is of large, of little, or of no value commercially, not
according to the dexterity with which this labour is performed, but
according to the manner in which the author's mind directs it.

Than any human being who is capable of perceiving that the literary
quality of a book is largely affected by the fact of the book's not
being rubbish, should seriously suppose that the saleable value of
editions--whether they are editions of a popular novel, or of a treatise
on the conchology of Kamchatka, is proportionate to the number of
letters in them arranged in parallel lines--for Mr. Hillquit's argument
means neither more nor less than this--is, let me repeat, incredible.
What, then, is the explanation of his indulging in a performance of this
degrading kind? The explanation is that he, like so many of his
colleagues, though recognising personally that labour among "modern
nations" depends for its higher productivity on the picked men who
direct it, cannot bring himself to renounce, when he is making his
appeal to the masses, the old doctrine that they are the sole producers;
and accordingly having started with the ostentatious admission that
directive ability is as essential to production as labour is, he
endeavours by his verbal jugglery with the case of a printed book to
convey the impression that labour produces all values after all; and he
actually manages to wind up with a repetition of the old Marxian moral
that the profits of ability mean nothing but labour which has not been
paid for.[7]

One of my reasons, then, for beginning the present examination of
socialism with exposing the fallacy of principles which the intellectual
socialists of to-day are so eager to proclaim that they have long since
abandoned, is the fact that these principles are still the principles of
the multitude; that for practical purposes they are those which most
urgently require refutation; and that the intellectual socialists who
have doubtless repudiated them personally, not only do not attempt to
discredit them in the eyes of the ignorant, but themselves continue to
appeal to them as instruments of popular agitation.

My other reason for following the course in question is that the theory
of socialism in its higher and more recent forms, which recognises
directive intellect in addition to manual effort as one of the forces
essential to the production of modern wealth, cannot be understood and
estimated in any profitable way, without a previous examination of those
earlier doctrines and ideas, some of which it still retains, while it
modifies and rejects others.

And now let us take up again the thread of our main argument. We laid
this down early in the present chapter, having emphasised the fact that,
the intellectual socialists of to-day agree, on their own admission,
with one proposition at all events which has been elucidated in this
volume--namely, that labour alone, as one of their spokesmen puts it,
"is impotent to produce the wealth of modern nations," the faculties and
the functions of the minority by whom labour is directed and organised
being no less essential to the result than the labour of the majority
itself. In the following chapter we shall see that this agreement
extends yet further.


[3] Mr. Hillquit--a lawyer, who has adopted the business of propagating
socialism in America--is unknown in England; but his name, not long ago,
was to be found in the English papers, as that of one of the
representatives sent from America to a recent Socialistic Congress in
Europe. Amongst the socialists of the United States he holds a position
analogous to that enjoyed by Mr. Shaw, Mr. Webb, and Mr. Ramsey
Macdonald in England.

[4] Whilst this work was in the press a "Catechism," lately published in
England, for use of children, was sent me. It was proposed to use this
Catechism on Sundays in the London County Council Schools. The first
economic "lesson" in it begins thus: "Who creates all wealth? The
working-class. Who are the workers? Men who work for wages." All who are
not wage-workers are declared in this catechism to be absolutely idle
and not productive.

[5] The writer of this leaflet, Mr. Wilshire, has subsequently declared
in his published criticisms of myself, that I impute to socialists what
no socialists really say, and contends that, when he thus speaks of
"working-men" and "labourers," he includes all men who contribute
anything to the productive forces of a country--inventors like Mr.
Edison, and millionaire captains of industry, in so far as they are
active agents, and not mere recipients of interest. But that such is not
the meaning which he conveys, or desires to convey, to those to whom his
leaflet addresses itself, is plainly shown by his statistics, if by
nothing else; for the share of the national income, which goes, as he
asserts, to "labour," is avowedly the amount which, according to his
estimate, is paid to-day in America, as weekly wages to the mass of
manual labourers. To say that labour _in its more extended sense_ is the
producer of all wealth, is a mere meaningless platitude. It is to say
that there would be no wealth without effort of some kind. Does Mr.
Wilshire seriously wish us to believe that he is telling Mr. Edison that
"if he will only cast his ballot intelligently" he will be able to
treble his income at the expense of richer men?

[6] This applies to England no less than to America. Whenever any one of
the more educated amongst the socialistic agitators is taxed with
maintaining the popular doctrines of socialism with regard to labour, he
at once repudiates them, and accuses his opponents of imputing to him
and his fellows childish fallacies which no one in his senses would
maintain; but the propagation of these fallacies amongst the more
ignorant sections of the population continues just the same.

[7] According to Mr. Hillquit, Dickens, for example, made his whole
fortune by robbing his compositors.



The reader will remember how, having first elucidated the part which
exceptional mental faculties, concentrated on the direction of labour,
and here called ability, play in modern production, I proceeded to
the question of the means by which this direction is accomplished,
and showed that these were supplied by the possession of
wage-capital--capitalism thus representing no mere passive monopoly, but
a system of reins which are attached to innumerable horses, and are
useless except as vehicles of the skill with which the coachmen handle
them. We shall find that by implication, if not always by direct
admission, the intellectual socialists of to-day are in virtual but
unacknowledged agreement with this further portion of the present
argument also.

In order to demonstrate that such is the case, let me briefly call
attention to a point on which we shall have to dwell at much greater
length presently--namely, that these socialists, though they reject the
theory of production on which morally and intellectually the earlier
socialism based itself, persist in making promises to the labourers
precisely of the same kind as those with which the earlier socialism
first whetted their appetites. In especial besides promising them
indefinitely augmented wealth, they continue to promise them also some
sort of _economic emancipation_; and many of these socialists, in
explicit accord with their predecessors, declare that what they mean by
emancipation is the entire abolition of the wage-system.

Prominent among this number are Mr. Sidney Webb and his colleagues, who
are certainly the best educated group of socialistic thinkers in
England. Mr. Webb, in particular, is a man of conspicuous talent, and
few writers can afford a more favourable illustration than he does of
the lines along which the socialistic theory of society is compelled, by
the exigencies of logical thought, to develop itself. Now, in proposing
to abolish the wage-system, Mr. Webb and his fellow-theorists do not do
so without specifying a definite substitute; and when we come to
consider what their substitute is, we shall find that it implies, on
their part, a full recognition of the function which wage-capital, as
the instrument of ability, performs in modern production.

Now, the reader must observe that, in indicating the nature of the
function in question--namely, that of providing a means by which the
process of direction may be accomplished--and in showing how under the
existing system wage-capital is what actually performs it, I never for a
moment implied that wage-capital was the only means by which the same
result might be accomplished. Indeed, if we look back into the past
history of mankind, we shall find that there are two systems other than
that of wages, by which the conformity of labour to the requisite
directions of ability, not only might be, but actually has been secured.
One of these is the corvée system prevalent in the Middle Ages. The
other system is that of slavery. Under the corvée system, peasants were
the proprietors of the plots of ground on which they lived, and were
thus able to maintain themselves by working at their own discretion; but
they were compelled by their tenure to place a certain part of their
time at the disposal of their feudal superior, and to work according to
his orders. If only a number of otherwise independent peasants could be
forced to give enough of their time to the proprietor of a factory
to-day, the entire use of wage-capital would in his case be gone. The
same thing is true of slavery. Like the peasant proprietor, who gives
part of his time to his overlord, the slave is provided with the
necessaries of life independently of his obedience to the detailed
orders of his master. His master feeds him just as he would feed an
animal; the industrial obedience is insured by the subsequent
application of force.

These two coercive systems are the only alternatives to the wage-system
that have ever been found workable in the past history of the world. We
will now consider the system which some of the most thoughtful
socialists of to-day are proposing as a substitute for it in the
hoped-for socialistic future. The school of English socialists, of which
Mr. Webb is the best-known member, have given to the world a volume
called _Fabian Essays_. This volume was republished in America, and to
the American edition a special preface was prefixed with a view to
emphasising the essentials of a socialistic conception of society, and
bringing the details of the socialistic theory up to date. In this
preface it is stated, with regard to the apportionment of material
wealth generally, that "the only truly socialistic scheme" is one which
"will absolutely abolish all economic distinctions, and prevent the
possibility of their ever again arising." And how would it accomplish
this end? "By making," says the writer, "an equal provision for all an
indefeasible condition of citizenship, without any regard whatever to
the relative specific services of the different citizens. The rendering
of such services on the other hand," the writer goes on, "instead of
being left to the option of the citizen, with the alternative of
starvation (as is the case under the wage-system) would be secured
under one uniform law of civic duty, precisely like other forms of
taxation or military service."

Such, then, is the system which is put forward by educated socialists
to-day as the only means of escape from the existing system of wages.
And an escape from the wage-system--and one not theoretically
impracticable--it no doubt is; but an escape into what? It is an escape
into one of those systems which I have just now mentioned. That is to
say, it is an escape into economic slavery. For the very essence of the
position of the slave, as contrasted with the wage-paid labourer, is, so
far as the direction of his industrial actions is concerned, that he has
not to work as he is bidden in order to gain a livelihood, but that, his
livelihood being assured him no matter how he behaves himself, he is
obliged to work as he is bidden in order to avoid the lash, or some
other form of equally effective punishment.[8]

Now, I am not attempting here to find any fault with socialism on the
ground that it would, on the admission of some of its most thoughtful
exponents, be obliged to re-establish slavery as the price of
emancipation from "wagedom." I have commented on this fact solely with
the view to showing that the nature of the alternative to the
wage-system thus proposed indicates a full recognition, on the part of
those proposing it, of the nature and necessity of the functions which
the wage-system performs at present--namely, that of supplying the means
by which the ablest minds in the community secure from the mass of the
citizens the punctual performance of the industrial tasks required of
them. I am not even insisting that such a slave-system as Mr. Webb
contemplates is logically essential to the theory of intellectual
socialism at all. On the contrary, as may be seen from a letter
addressed to myself by a member of a socialistic body at Chicago, many
socialists, as to this matter, are opposed to Mr. Webb altogether.
Socialists, says my correspondent, speaking for himself and his
associates, have no objection whatever to the system of "wagedom" as
such; nor do they wish to see the direction of labour "enforced by the
power of the law." They recognise, he says, quoting my own words, that
production under socialism, just as under the present system, will be
efficient in proportion as labour is directed by the best minds "which
can enhance the productivity of an average pair of hands." They object
to the wage-system only in so far as it is a means by "which the
employing class can make a profit out of the labourers"; and the only
change which in this respect socialists desire to introduce is to
transfer the business of wage-paying from the private capitalist to the
state--the state which will have no "private interests to serve," and
consequently no temptation to appropriate any profits for itself.
Socialists, he continues, subject to this proviso, would leave the
wage-system just as it is now. The state would pay those who worked, and
in accordance with the work they did; but the idle or refractory it
would "leave to starve to death, if they so elected, unless somebody
wished to keep them alive, as happens at the present time."

The difference between socialists with regard to this question, however,
does nothing in itself to discredit the socialistic theory as a whole.
It has merely the effect of providing us with two sets of witnesses
instead of one to the truth of a common principle, which is recognised
by both equally. One set declares that the ability of the most competent
men must direct the labours of the majority by means of an appeal to
their fears; the other declares that the same result must be
accomplished, as it is at the present time, by an appeal to their choice
and prudence. In either case it is admitted that the separate manual
tasks performed by the majority of the citizens must be directed and
co-ordinated by the most competent minds somehow; and that the process
of direction must have some system at the back of it, by means of which
the orders issued to each labourer can be enforced--this system being
either a continuation of that which is in existence now, or another
which would to most people be in many ways more distasteful.

The socialists of to-day, in admitting that such is the case, have at
last placed themselves in a line with the sober realities of life, and
in doing so have assimilated their own analysis of production to the
analysis set forth in the beginning of the present volume.

Apart from the fact that, according to their constructive programme,
private capitalism would be abolished, and the sole capitalist would be
the state, the socialistic system of production, as they have now come
to conceive of it, would, in respect of the vital forces involved, be
merely the existing system continued under another name, with a
directing minority composed of exceptional men on the one hand, and a
majority composed of directed men on the other. But in the minds of many
socialistic thinkers the simplicity of the situation is obscured by the
vagueness of the ideas which they associate with the phrase "the state."
For them these ideas are like a fog, into which private capitalism
disappears, and in which the forces represented by it lose all definite
character. The state, however, is in reality nothing but a collection of
individuals; and if the state, besides being a political body, is to
become the sole industrial capitalist also, state capitalism, just like
private capitalism, will succeed or fail in proportion to the talents of
those to whom capital is intrusted as a means of directing the

If, then, in any capitalistic country, such as Great Britain or America,
the business of production could become socialised to-morrow, the best
that could possibly happen would be the transformation of the present
employers into so many state officials, who industrially would be the
state itself. The only difference would be that they would have lost all
personal interest in the pecuniary results of the talents which they
would still be expected to exercise.[9]

Now, if such a transformation of circumstances could be suddenly
effected to-morrow, without any corresponding change in the dispositions
of these men themselves, there is theoretically no reason for supposing
that the process of production might not continue to be as efficient as
it is now, so long as this precise situation lasted. But it could not
last. It would be transitory in its very nature. The present generation
of industrial directors would die, and in order that the efficiency of
the state as the director of labour might be maintained, other men would
have to be discovered who were possessed of equal ability in the first
place, and who in the second could be trusted or compelled to use it
unremittingly to the utmost, in the absence of the main motive which has
actuated such men hitherto.

Apart from the problems involved in these two requirements, neither the
theory of production which is put forward, nor the productive system
which is advocated, by the intellectual socialists of to-day, contains
anything with which theoretically the most uncompromising of their
opponents could quarrel. It is on these two problems that everything
will be found to turn--one being the problem of how, under the
conditions which socialism would introduce, the ablest men could be
discovered, and invested according to their efficiency with the
requisite industrial authority; the other being the problem of how,
under the same conditions, it would be possible to secure from such men
that full exertion of their talents, on which the material prosperity of
the entire community would depend.

For socialists these two problems may be said to be practically new. So
long as socialism based itself on the Marxian theory of production, the
selection, and the subsequent conduct of the men who would compose the
industrial state presented no appreciable difficulties. For the state
would, according to this theory, be in no sense the director of the
labourers; it would merely be their humble servant. It would be like an
old woman who sat all day long in a barn, counting, sorting, and making
up into equal shares the different products brought in to her by her
sons, who worked out of her sight in a dozen different fields; or,
to quote the words of one of my late socialistic correspondents,
the functions of the industrial state would be "simply
industrial-clerical." The industrial state would consist of clerks and
shop-boys, the former of whom added up accounts, while the latter
weighed, sorted, and handed out goods over a counter. If the industrial
state were to be nothing more than this, the selection of an adequate
personnel would doubtless present no difficulties. But as soon as the
socialistic theory recognises that the industrial state, instead of
being the mere receiver and dispenser of products produced by labour,
would represent the intellectual forces by which every process of labour
is directed, the problems of how the individuals who compose the state
are to be chosen, and of how the continuous exertion of their highest
faculties is to be secured, become the fundamental problems which
socialists are called upon to consider.

If we assume that under the régime of socialism a nation could always
secure, as the official directors of its labour, the men whose ability
would enable them to direct it to the best advantage, and could force
these men to exert their exceptional faculties to the utmost, the
exaction of obedience to their orders from the common labouring
citizens, let me say once more, would present no theoretical difficulty.
But the task of securing the requisite ability itself is of a wholly
different kind. Let us consider why.

Any one armed with an adequate implement of authority, whether the
control of the means of subsistence or the power of inflicting
punishment, can secure, within limits, from any ordinary man the
punctual performance of any ordinary manual task, and the performance of
it in a prescribed way; but he is able to do this for the following
reasons only: So far as ordinary labour is concerned, any one man, by
simply observing another, can tell with approximate accuracy what the
other man can do--whether he can trundle a wheel-barrow, hit a nail on
the head, file a casting, or lay brick on brick. Further, the director
of labour knows the precise nature of the result which he requires in
each case that the individual labourer shall accomplish. Hence he can
exact from each labourer conformity to the injunctions laid on him, in
respect both of the general character and the particular application of
his efforts. But in respect of the faculties distinctive of those
exceptional men by whom alone ordinary labour can be directed to the
best advantage, both these conditions are wanting. It is impossible to
tell that any man of ability possesses any exceptional faculties for
directing labour at all, unless he himself chooses to show them; and,
indeed, until circumstances supply him with some motive for showing
them, he may very well not be aware that he possesses such faculties
himself. Moreover, even if he gives the world some reason to suspect
their existence, the world at large will not know what he can do with
them, and will consequently be unable to impose on him any definite
task. A pressgang could have forced Columbus to labour as a common
seaman; but not all the population of Europe could have forced him to
discover a world beyond the Atlantic; for the mass of his
contemporaries, until his enterprise proved successful, obstinately
refused to believe that there was such a world to discover.

The men, therefore, on the exercise of whose directive ability the
productive efficiency of a modern nation depends, would occupy, with
regard to any nation organised on socialistic principles, a position
fundamentally different from that of the ordinary labourer. The exercise
of their distinctive powers, unlike those of the labourer, could never
be secured by coercion; because neither the nation at large, nor any
body of representatives, could possibly know that these powers existed
until the possessors of them chose to reveal the secret. They could not
be made to reveal it. They could only be induced to do so; and they
could only be induced to do so by a society which was so constituted as
to offer for an exceptional performance some exceptional reward, just as
a reward is offered for evidence against an unknown murderer. The reward
at present offered them is the possession of some exceptional share of
the wealth to the production of which their efforts have exceptionally
contributed; and, hence, since it is the object of all socialistic
schemes to render the achievement of such a reward impossible, we shall
find that the ultimate problem for socialists of the modern school is
how to discover another which in practice will be equally efficacious.

But though this is the ultimate problem, it is very far from being the
only one which the theory of socialism in its modern form raises.
Directive ability, which is a compound of many faculties, varies greatly
in degree and kind. Its value, if tested by the results of its actual
application to labour, would in some cases be immense, in other cases
very small, and in others it would be a minus quantity. Thus, even if we
suppose that the exercise of it is so far its own reward that all who
believe themselves to possess it--and these are a very large
number--will, for the mere pleasure of exercising it, be eager to gain
the positions which will make its exercise possible, the problem would
remain of how to discriminate those who would, as industrial directors,
achieve the greatest successes, from those who would bring about nothing
but relative or absolute failure. This problem of how, under a régime of
socialism, ability could be so tested that the practical means of
direction could be granted to or withheld from it, according to its
actual efficiency, is the problem which we will consider first; for
though of secondary importance as compared with the problem of motive,
it is in more immediate connection with the details of daily business.


[8] The economic condition of the great mass of the population, which
this "up-to-date" socialist contemplates, is precisely analogous to that
of the Helots in Sparta, whose subsistence was secured independently of
their specific services, whilst their services to the directing class
were wrung from them by a system of iron discipline.

[9] While these pages were in the hands of the printers, a work was
published by an American socialist, in which it is asserted that the
socialisation of America would consist at first of this precise
process--namely, the conversion of all the existing active employers and
directors of labour into the salaried servants of some state department.



For the moment, then, we will waive the problem of motive altogether; we
will assume that a society which denied to its able men any pecuniary
reward proportionate to the magnitude of its products could provide them
with a motive of some kind--we need not inquire what--which would prompt
them still to exert themselves as eagerly as they do now; and we will
merely consider how, a multitude of such men being given, the most
efficient of them could be constantly selected as the official directors
of labour, and the rest, in proportion to their inefficiency, be either
dismissed or excluded. In order to realise the difficulties which, in
this respect, socialism would have to face, let us consider the manner
in which the problem is solved now.

Under the system of private capitalism it solves itself by an automatic
process. In order that any man may direct the labour of other men, he
must, under that system, be the possessor or controller of so much
wage-capital. Now this capital--this implement of direction--in
proportion as it is employed, disappears, and is reproduced only by a
subsequent sale of the products resulting from the labour in the
direction of which it has been expended. Thus a man, we will say,
invents a new engine for motor-cars, and devotes to the production of
twenty engines of the kind all the capital which he possesses--namely,
two thousand guineas. Apart from the raw material out of which the
engines are to be constructed, his whole expenditure will consist in
paying wages to certain labourers, on condition that they work up this
metal in a manner which he prescribes to them. For the raw metal he
pays, we will say, a hundred pounds, or the odd shillings of the
guineas. He pays to twenty labourers a hundred pounds apiece as wages;
and the result is twenty engines. If the engines are successful, and if
the public will give him a hundred and fifty guineas for each of them,
the man has got his entire capital back again, with a thousand guineas
added to it, and can continue his direction of labour by means of wages,
on the same lines, and on a much more extended scale. But if the
engines, when tried, develop some inherent defect, and he consequently
can sell none of them, he may still, perhaps, get back the price of the
raw metal--a petty sum, insufficient for his own needs--but his whole
wage-capital will be gone, and with it his power of directing any
further labour in the future. In other words, under the system of
private capitalism, if labour has been directed by any man in an
unsuccessful way, the resulting products being such that nobody cares to
buy them, or in exact proportion as this result is approached, the man's
implement of direction passes out of his hands altogether; and the
simple fact of his having directed labour ill deprives him of the means
of directing or of misdirecting it again.

But under a system of state socialism the situation would be wholly
changed. Private capitalism is, in this respect, self-acting, and acts
with absolute accuracy, because wage-capital being divided into a
multitude of independent reservoirs, its waste at any one point brings
about its own remedy. Each reservoir is like a mill-pond which
automatically begins to dry up whenever its contents are employed in
actuating a useless mill; and the man who has wasted his water is able
to waste no more. But the moment the divisions between the reservoirs
are broken down, and the separate capitals contained in them become, as
would be the case under socialism, fused together like the waters of a
single lake, the director of labour who so misused any portion of this
fluid stock that the products of labour, as directed by him, failed to
replace the wages, would not thereby be incapacitated from continuing
his misdirections further; for the wage-capital dissipated by his
incompetence could, under these conditions, always be replaced, and its
loss more or less concealed, by fresh supplies which had a really
different origin. It was only in consequence of conditions resembling
these that the London County Council was enabled to continue for so long
its service of Thames steamboats, in spite of the fact that the labour
thus employed failed to reproduce, by the functions which it performed
for the public, more than a fraction of capital which was necessarily
consumed in its maintenance. Had labour been thus misdirected by any
private capitalist, his misdirection of it would have soon been checked
by his loss of the means of continuing it; but the County Council, with
the purse of the community at its back, was able, by taxing the
industrial successes of others, to refinance and prolong its own
industrial failure.

Socialists wholly overlook the importance of these considerations. Many
of them, for example, in the case of the London County Council's
steamboats, defended that enterprise in spite of its financial failure,
on the ground that the steamboats were a convenience to certain
travellers at all events, who in all probability were persons of modest
means, while the loss would be made good out of the pockets of the
ratepayers who were presumably rich. But even if this argument were
plausible as applied to a state of society in which the incomes of some
men were greater than those of others, it would be absolutely
inapplicable to conditions such as those desired by socialists, under
which the incomes of all would be fractions, approximately equal, of a
common stock to the production of which all contributed. For it must
surely be apparent to even the meanest intelligence that whatever
diminished the aggregate amount to be divided would diminish the
fraction of it which falls to the share of each; and it ought to be
equally apparent, though to many people it is not, that the labour of
any labourer which is directed in such a way that the men consume more
articles of utility than they produce, or fail to produce as many as
they would do if directed better, has this precise effect of diminishing
the divisible total, by making it either less than it has been or less
than it would be otherwise.[10]

Thus, in cases such as that of the London County Council's steamboats,
the efficiency of labour is so lessened by incompetent direction that
the labourers employed can only perform for society one-half of the
services which society must perform for them. For every hour which they
spend in conveying ten men on the river, twenty men must work to provide
them with food and clothing. So long as fortunes are unequal, and depend
on individual effort and enterprise, such losses may be localised and
obscured in a hundred different ways; but the moment all fortunes, as
they would be under the régime of socialism, were reduced to specific
fractions of the aggregate product of the community, any decline in the
efficiency of the labour of any single group would result in a
diminution of the income of every member of all the others. Wherever ten
men were employed to do what might have been done by nine, the
contribution to the general stock would be less by ten per cent. than it
might have been. If ten men were employed in making chairs, which might
have been made by nine had their labour been better directed, the
community would lose the cushions which in that case would have been
made by the tenth. And what holds good of labour in respect of its
productive efficiency holds good of it also in respect of the character
of the goods produced. If ten men were employed in producing forty
loaves when all that could be eaten was twenty, not only would the
remaining twenty be wasted, but the community would lose the butter
which might have been made instead of them. The importance, therefore,
to the community as a whole of having every branch of its labour
directed by those men, and by those men only, whose ability would raise
it to the highest pitch of efficiency, and cause it to produce only such
goods and such quantities of them as would satisfy from moment to moment
the needs and tastes of the population, would, under a régime of
socialism, be even more general and immediate than it is at the present
day; and yet at the same time, for reasons to which we will now return,
the difficulty of securing the requisite ability would be increased.

It is impossible to illustrate in detail the situation which would thus
arise; for the state, as sole capitalist and sole director of labour, is
an institution which imaginably might take various forms; and
socialists, in this case exhibiting a commendable prudence, have
refrained from committing themselves to any detailed programme. The
socialistic state, however, having to perform a double
function--namely, that of political governor and universal director of
industry--would necessarily be divided into two distinct bodies. One of
these, consisting of statesmen and legislators, would, we may assume, be
elected by the votes of the people. But the other, consisting of
industrial experts--the inventors, the chemists, the electricians, the
naval engineers, the organisers of labour--might conceivably be in the
first or the second of the two following positions: They might either be
left free, as they are under the existing system, to do severally the
best they can, according to their own lights, in estimating what goods
or services the population wants, and in satisfying these wants with
such increasing economy that new goods and services might be continually
added to the old. They might be left free to promote or dismiss
subordinates, to fill up vacancies, and take new men into partnership,
very much as the heads of private firms do now. Or else they might be
liable, in greater or less degree, to removal or supersession, and
interference with their technical operations, on the part of the
political body, whose members, while representing the general ideas of
the community, would presumably not be experts in the direction of its
particular industries.

Now, let us suppose first that the official directors of labour are left
practically free to follow their own devices. The situation which will
arise may be illustrated by the following imaginary case: The nation,
let us say, requires two sister ships. They are built in different
yards, under two different directors, and a thousand labourers are
employed in the construction of each; but while the labourers who work
under one director take a year to complete their task, those who work
under the other complete theirs within ten months. This would mean for
the community that, through the inferiority of the former of these two
officials, two months' labour of the national shipwrights had been lost;
and the public interest would require that the industrial regiment
commanded by him should as quickly as possible pass out of his control
into that of an official who could render it more efficient than he. And
under the existing system this, as we have seen already, is precisely
what sooner or later would be brought about automatically. The
inefficient director, in proportion to his relative inefficiency, loses
his customers, and can direct labour no longer, or is obliged to direct
it on a very much reduced scale. But if each director of labour owed, as
he would do under socialism, his means of directing it, not to the
results of his individual efficiency, but to a single common
source--namely, to the collective capital of the country or the forcible
authority of the law--there is nothing in the fact that one constructor
of ships wastes labour in constructing them which another constructor
would have saved, to prevent him from continuing in his post, or even to
insure that he will vacate it in favour of an abler man, whether an
official rival or otherwise, as soon as such a man is available.

There is also this further fact to be noted. Although we are assuming
that the socialistic directors of labour will exert their talents to the
utmost without requiring the stimulus of a proportionate reward in
money, we must necessarily assume that they will value their posts for
some reason or other just as much as they would do were the largest
emoluments attached to them. Consequently we may, condescending to
vulgar language, say, as a certainty, that they will do their very best
to stick to them. All these official persons, as contrasted with the
labouring public, will occupy positions of similar and desirable
privilege; and while their latent rivalry among themselves will be
hampered in the manner just indicated, they will none of them be
inclined to welcome any further rivalry from without. If the least
efficient of our two naval constructors could not be forced by the fact
of his relative inefficiency to hand over all or any portion of his
authority to the other, and would certainly not be likely to do so of
his own free will, it is still less likely that either would be willing
to make such a sacrifice in favour of a man outside the privileged
ranks, who desired an opportunity of demonstrating his practical
superiority to both.

Under a system, in short, like that which we are now contemplating, the
ability of the ablest directors might, in each branch of industry, raise
the efficiency of the labour directed by themselves to as high a pitch
as that to which it could be raised by the competition of to-day. But
the successes of the ablest men would have no tendency to
self-extension. The ablest men would do better than the less able, but
would have no tendency to displace them; and the ablest and the least
able members of the industrial oligarchy alike would instinctively
oppose, and would also be in a position to check, the practical
development of any competition from without.

That this is no fanciful estimate can be shown by an appeal to facts. We
may take as an example the case of the British post-office. The
inefficient transmission of letters some twenty years ago in London
provoked an effort to supplement it by a service of private messengers.
The post-office authorities were instantly up in arms, ready to nip this
enterprise in the bud, and forcibly prevent any other human being from
doing what they were still, to all appearance, determined not to do
themselves.[11] Then, as a grudging concession, permission to transmit
letters with a promptitude which the post-office still declined to
emulate was accorded to a company on condition that for each letter
carrier the post-office should be paid as it would have been had it
carried the letter itself; and thus there was established at last the
institution of the Boy Messengers.

Similar examples are afforded by the conduct of the state in France,
where the manufacture of tobacco and matches are both of them state
monopolies. To say that the tobacco produced by the French state is
unsmokable, and that the matches produced by it will not light a candle,
would no doubt be an exaggeration; but they are both inferior to the
products which private enterprise could, if left to itself, produce at
the same price. And private enterprise is, indeed, not wholly
suppressed. Excellent tobacco and matches, both of private manufacture,
are allowed to be sold in France; but the producers of both are
artificially handicapped by having to pay to the state, on every box or
every pound sold, either the whole or part of the profit which the state
itself would have made by selling an equal quantity of its own inferior

The very fact, indeed, that the state, as a producer, or a renderer of
public services, such as letter-carrying, has thus to protect itself
against the competition of private enterprise, is sufficient evidence of
the difficulties which a state organisation encounters in securing
industrial ability which shall be constantly of the highest kind, and
also of its inevitable tendency to hamper, if not to stifle, the
development and the practical activity of superior ability elsewhere.
And if these difficulties and this tendency are appreciable in
state-directed industries now, when the area of direction is small and
strictly limited, the reader may easily imagine how incalculably more
formidable they would become if extended, as socialism would extend
them, to the activities of the entire community.

We have thus far been considering the position of the directors of
socialised industry on the assumption that they would be free to follow
the dictates of their own several intelligences, without any technical
interference from officials of any other kind. Let us now consider the
alternative which, in any socialistic society, would most closely
coincide with fact. This is the assumption that the official directors
of labour would not be technical autocrats, but would be subject to the
control of their brother officials, the statesmen, who represented the
great mass of the people.

Now, no doubt the intervention of a body of this kind might obviate some
of the difficulties on which we have just been dwelling. It might lead
to the removal of some directors of labour who were not only relatively
inefficient, but were positively and notoriously mischievous; but it
would introduce difficulties greater than those it obviated. For while
the industrial officials would, in exact proportion to their efficiency,
embody the special expertness peculiar to a gifted few, the political
officials, in proportion as they represented their electorate, would
embody the preponderating opinions and the general intelligence of the
many. The political officials, therefore, could, from the very nature
of the case, never represent any ideas or condition of knowledge which
appreciably transcended or conflicted with those of the least
intelligent; and the logical result would be that no industrial
improvements could in a socialistic community be initiated by the
highest intelligence, if they went beyond what could be apprehended and
consciously approved of by the lowest.

And here again, though our estimate is only general and speculative--for
it deals with a state of things which at present has no existence--we
can turn to historical facts for illustrations of its substantial truth.
For example, if in the days of Columbus all the capital of Europe and
the control of its entire labour had been vested in a government which
represented the all but universal opinion of all the western nations,
the discovery of America would have obviously been beyond the limits of
possibility. It was rendered possible only because Columbus secured two
patrons who, resembling in this respect far-seeing investors of to-day,
dared to be original, and provided him with the necessary ships and
control over the necessary labour. Or let us take the case of the iron
industry of the modern world. This industry, in its vast modern
developments, depends entirely on the discovery made in England of a
method by which iron might be smelted with coal in place of wood. The
completed discovery was due to a succession of solitary men, beginning
with Dud Dudley in the reign of James I., and ending a century later
with Darby of Coalbrookdale. Practically these heroic men had all their
contemporaries against them. Public opinion attacked them through
private persecution and violence. The apathy and vacillation of
governments left them without defence; and had governments then
represented public opinion completely, and had also controlled all
labour and capital, the discovery in question, which was retarded for
three generations, would in all probability have never been made at all.
Arkwright's experience with regard to his spinning-frame was similar.
His epoch-making invention was in danger of being altogether lost,
because the general opinion of the capitalists of his day was against
it; and if all capital had been vested in a representative state, to the
exclusion of the far-seeing individuals who eventually came to his
assistance, its loss would have been almost certain. The successful
development of the automobile did not take place till yesterday--and
why? A steam-driven vehicle ran in Cornwall before the end of the
eighteenth century; but the state and public opinion both condemned it
as dangerous; and all further progress in the matter was checked for
more than twenty years. Then again private enterprise asserted itself,
but only to suffer precisely the same fate. Steam-driven omnibuses plied
between Paddington and Westminster. Steam-driven stage-coaches plied on
the Bath road. But the state and public opinion were again in obstinate
opposition; these vehicles were crushed out of existence by the
imposition of monstrous tolls; and progress was checked a second time
and for a longer period still. An instance yet more modern is that
supplied by the electric lighting of London. The electric lighting of
London was retarded for ten years solely by the attitude which the state
assumed towards private enterprise.

It is needless to multiply illustrations of this kind further; for my
object is not to show that the state, as it exists at present, is
necessarily inimical to private enterprise as a whole. It is not, for it
has not the power to be. But the fact that even now, when its powers are
so strictly limited and its points of direct contact with industrial
enterprise are so few, tendencies of the kind develop themselves with
such marked practical consequences is enough to show the reality and
magnitude of the evils which would ensue if a body, which reflected on
the one hand the opinions of the average many, and on the other the
individual ability of a few, specially privileged and pledged to their
own methods, were the sole controller of all manual labour whatsoever,
the virtual owner of all the implements which exist at present, the sole
determiner of the forms which such implements shall assume in the
future, and also of the kinds and quantities of the consumable goods
which the implements and the labourers together shall from day to day

But the nature and scope of the effects which would be incident to any
general absorption, such as that contemplated by socialists, of
productive enterprise by the state, will be yet more clearly seen if we
turn to a kind of production on which I have dwelt already, as affording
the simplest and most luminous example possible of the respective parts
played in the modern world by ordinary manual labour and the exceptional
ability which directs it. This is the case of books, or of other printed
publications. Many years ago the English radical Charles Bradlaugh urged
in a debate with a then prominent socialist that under socialism no
literary expression of free thought would be practicable, and I cannot
do more than accentuate his lucid and unanswerable arguments. The state,
being controller of all the implements of production, a private press
would be as illegal as the dies used by a forger. Nobody could issue a
book, a newspaper, or even a leaflet, unless the use of a state press
were allowed him by the state authorities, together with the disposal of
the labour of the requisite number of compositors. Now, it is clear that
the state could not bind itself to put presses and compositors at the
service of every one of its citizens who was anxious to see himself in
print. There would have to be selection and rejection of some drastic
kind. The state would have to act as universal publisher's reader. What
would happen under these circumstances to purely imaginative literature
we need not here inquire; but when the question was one of expressing
controversial opinions as to science, religion, morals, and especially
social politics, what would happen is evident. The state would be able
to refuse, and it could not do otherwise than refuse, to print anything
which expressed opinions out of harmony with those which were
predominant among its own members. In so far as these members reflected
the opinions of the majority, they would never publish an attack on
errors which they themselves accepted as vital truths. In so far as they
owed their positions to certain real or supposed superiorities they
would never publish any criticism of their own methods by men whom they
would necessarily regard as mischievous and mistaken inferiors. In
short, whether the state acted in this matter as the ultra-superior
person, or as the ultra-popular person, the result would be just the
same. The focalised prejudices of the majority, or the privileged
self-confidence of a certain select minority, would deprive independent
thought in any other quarter of any means of expressing itself either by
book or journal, and by thus depriving it of its voice would place it at
an artificial disadvantage more effectual as a means of repression than
the dungeons of the Inquisition itself. It would be checked as
completely as the higher criticism of the Bible would have been if the
only printer in the whole world were the Pope and the only publishing
business were managed by the College of Cardinals.

And what, under a régime of socialism, would be true of human thought,
a-seeking to embody itself in printed books or newspapers, would be
equally true of it as applied to the methods of industry, and seeking to
embody itself in multiplied or improved commodities.

Such, then, are the disadvantages which socialism, as contrasted with
the existing system, would introduce in connection with the problem of
how to detect, and how, having detected it, to invest with suitable
powers, the men whose ability is, at any given moment, calculated to
raise labour to the highest pitch of productiveness--how to give power
to these, and to take it away from others in exact proportion as their
talents, as exhibited in its practical results, fall short of the
maximum which is at the time obtainable.

This problem, as we have seen already, the existing system solves by its
machinery of private competition, and of independent capitals, which
automatically increase the powers of the ablest directors of labour, and
concurrently decrease or extinguish those of the less able. Socialism,
with its collective capital, and its able men reduced or elevated to the
rank of state officials, while not obviating, but on the contrary
emphasising the necessity for placing labour under the highest directive
ability, or, in other words, the necessity for competition among able
men, would dislocate the only machinery by which such competition can be
made effective; and, if it did not destroy the efficiency of the highest
ability altogether, would reduce this to a minimum, and confine it
within the narrowest limits.

In this chapter, however, we have been dealing with the machinery only.
We have been assuming the unabated activity of the powers by which the
machinery is to be driven. That is to say, we have been assuming that
every man who possesses, or imagines himself to possess, any exceptional
gift for directing labour--whether as an inventor, a man of science, an
organiser, or in any other capacity--would be no less eager, under the
circumstances with which socialism would surround him, to develop and
exert his faculties than he is at the present day. We will now pass on
to the question of how far this assumption is correct. The question of
machinery is secondary. It is a question of detail only; for if there is
no power in the background by which the machinery may be driven, it will
not make much difference in the result whether the machinery be bad or

And here once more we shall find that the socialists of to-day agree
with us; and in passing on to the question now before us, we shall be
quitting a region of speculations which can be only of a general kind
(for they refer to social arrangements whose details are not definitely
specified), and we shall find ourselves confronted by a variety of ideas
and principles which, however confused they may be in the minds of those
who enunciate them, we shall have no difficulty ourselves in reducing to
logical order.


[10] That such is the case can be seen easily enough by imagining a
socialistic community consisting of twenty men, who require and consume
only one article, bread. Each man, to keep him alive, requires one loaf
daily; but to eat two would be a comfort to him, and to eat three would
be luxury. The community is divided into two groups of ten men each, one
man in each group directing the labour of the others. We will start with
supposing that these two directors are men of equal and also of the
highest ability, and that each of the groups, under these favourable
conditions, is enabled to produce daily an output of thirty loaves. The
total output of both in this case amounts to sixty, which equally
divided yields to everybody the luxurious number of three. Let us next
suppose that the director of one group dies, that his place is taken by
a man of inferior powers, and that this group, as a consequence of his
less efficient direction, instead of producing thirty loaves can produce
no more than ten. Now, although this falling off in production has
occurred in one group only, the loss which results from it is felt by
the entire community. The total output has sunk from sixty loaves to
forty; and the members of the group which retains its old efficiency, no
less than those of the group which has lost so much of it, have to be
content, with a dividend, not of three loaves, but two. Finally, let us
suppose that, owing to a continued deterioration in management, the ten
men of whom the first group is composed are able to produce daily, not
ten loaves, but only five. That is to say, the number of loaves which
they produce comes to no more than half of the minimum they are obliged
to eat. Here it is obvious that, unless one-half of the population is to
die, it can only be kept alive by being given a supply of loaves which,
in consequence of its own inefficiency, must be taken out of the mouths
of others.

[11] A similar drama enacted itself in London more than two centuries
ago. Private enterprise established a penny post. The state killed it,
and deprived the metropolis of this service for a hundred and fifty



When socialism, says Mr. Sidney Webb, shall have abolished all other
monopolies, there will still remain to be dealt with the most formidable
monopoly of all--namely, "the natural monopoly of business ability," or
"the special ability and energy with which some persons are born." The
services of these monopolists, he sees and fully admits, would be as
essential to a socialistic as they are to any other community which
desires to prosper according to modern standards. He sees and admits
also that these exceptional men will not continuously exert or even
develop their talents unless society can supply them with some adequate
motive or stimulus. Accordingly, since he maintains that no scheme of
society would be socialistic in any practical sense which did not
completely, or at least approximately, eliminate the motive mainly
operative among such men at present--namely, that supplied by the
possibility of exceptional economic gain--he fairly faces the fact that
some motive of a different kind will have to be discovered by socialists
which shall take the place of this.

I mention Mr. Webb in particular merely because he represents the views
which all intellectual socialists are coming to hold likewise. This
specific problem of how to provide the natural monopolists of business
ability with all adequate motive to develop and exercise their talents
is engaging more and more the attention of the higher socialistic
thinkers; and if we take together the passages in their writings which
deal with it, it has by this time a voluminous literature of its own.

We shall find that the arguments brought forward by them in this
connection divide themselves broadly into two classes, one of which
deals with the problem of motive directly, while the other class aims at
preparing the way to its solution by showing in advance that its
difficulties are far less formidable than they appear to be. Without
insisting on the manner in which they are urged by individual writers,
we will take these two classes of argument in the logical order which
they assume when we consider their general character.

These preparatory arguments, with which we will accordingly begin, while
admitting that some men are undoubtedly more able than others, aim at
showing that the superiority of such men to their fellows is not so
great as it seems to be, and that any claims made by them to exceptional
reward on account of it consequently tend to reduce themselves to very
modest proportions.

These arguments possess a peculiar interest owing to the fact that they
have not originated with socialistic thinkers at all, but have been
drawn by them from the evolutionary philosophy of the nineteenth century
generally, in so far as it was applied to historical and sociological
questions. The dominant idea which distinguished this school of thought
was the insignificance of the individual as compared with society past
and present. Thus Herbert Spencer, who was its most systematic exponent,
opens his work on the _Study of Sociology_ with an elaborate attack on
what he calls "The Great Man Theory," according to which the explanation
of the main events of history is to be sought in the influence of
exceptional or great men--the men who, in vulgar language, are spoken of
as "historical characters." Such an explanation, said Spencer, is no
explanation at all. Great men, however great, are not isolated
phenomena. Whatever they may do as the "proximate initiators" of change,
they themselves "have their chief cause in the generations they have
descended from," and depend for the influence which is commonly
attributed to their actions, on "the multitudinous conditions" of the
generation to which they belong. Thus Laplace, he says, could not have
got far with his calculations if it had not been for the line of
mathematicians who went before him. Cæsar could not have got very far
with his conquests if a great military organisation had not been ready
to his hand; nor could Shakespeare have written his dramas if he had not
lived in a country already enriched with traditions and a highly
developed language.

But though it was Herbert Spencer who invested these arguments with
their most systematic form, and gave them their definite place in the
theory of evolution as a whole, they were widely diffused already among
his immediate predecessors, as we may see by the following passage taken
from an unlikely quarter. "It is," says Macaulay, in his _Essay on
Dryden_, anticipating the exact phraseology of Spencer, "the age that
makes the man, not the man that makes the age.... The inequalities of
the intellect, like the inequalities of the surface of the globe, bear
so small a proportion to the mass, that in calculating its great
revolutions they may safely be neglected." And Macaulay is merely
expressing a doctrine distinctive of his time--a doctrine which, to take
one further example, dominated in a notable way the entire thought of
Buckle. This doctrine, which, to a greater or less degree, merges the
organism in its environment, or the individual, however great, in
society, has been seized on by the more recent socialists just as the
theory of Ricardo, with regard to labour and value, was seized on by
Karl Marx, and has been adapted by them to their own purposes.

Thus Mr. Bellamy, whose book, _Looking Backward_, descriptive of a
socialistic Utopia, achieved a circulation beyond that of the most
popular novels, declares that "nine hundred and ninety-nine parts out of
the thousand of the produce of every man are the result of his social
inheritance and environment"; and Mr. Kidd, a socialist in sentiment if
not in definite theory, urges that the comparative insignificance, the
comparative commonness, and dependence for their efficiency on
contemporary social circumstances, of the talents which we are
accustomed to associate with the greatest inventions and discoveries, is
proved by the fact that some of the most important of these have been
made by persons who, "working quite independently, have arrived at like
results almost simultaneously. Thus rival and independent claims," he
proceeds, "have been made for the discovery of the differential
calculus, the invention of the steam-engine, the methods of spectrum
analysis, the telephone, the telegraph, as well as many other
discoveries." Further, to these arguments a yet more definite point has
been added by the contention that, as socialist writers put it,
"inventions and discoveries, when once made, become common property,"
the mass of mankind being cut off from the use of them only by patents
or other artificial restrictions.

The aim of socialists in pursuing this line of reasoning is obvious. It
is to demonstrate, or rather to suggest, that "the monopolists of
business ability," in spite of their comparative rarity and the
importance of the services performed by them, are far from being so
rare or so superior to the mass of their contemporaries as they seem to
be, that their achievements owe far more than appears on the surface to
the co-operation of the average members of society, and that
consequently a socialistic society could justly demand and practically
secure their services on far easier terms than those which they command
at present.

And to such a conclusion the principles of modern evolutionary
sociology, as unanimously interpreted by the philosophers of the
nineteenth century, may be fairly said to lend the entire weight of
their prestige. Let us, then, consider more carefully what these
principles are, with a view to understanding the true scope of their
significance. We shall find that, although undoubtedly true in
themselves, the scope of their significance has been very imperfectly
understood by the great thinkers to whose talents their elucidation has
been due; that these thinkers, in their eagerness to establish a new
truth, have at the same time introduced a new confusion; and that it is
from the confusion of a truth with a falsehood, rather than from the
truth itself, that the socialists of to-day have been here drawing their

The confusion in question arises from a failure to see that sociology is
concerned with two distinct sets of phenomena, or with one set regarded
from two absolutely distinct standpoints. Thus it is constantly said
that man, in the course of ages, has developed civilised societies and
the various arts of life--that, beginning as an animal only a little
higher than the monkey, he gradually became a builder of cities, a
master of the secrets of nature, a philosopher, a poet, a painter of
divine pictures. And from a certain point of view this language is
adequate. If what we desire to do is to estimate, as speculative
philosophers, the significance of the human race in relation to the
universe or its Author, by considering its origin on this planet, and
its subsequent fortunes hitherto, what interests us is man in the mass,
or societies, and not individuals. But if we are interested in any
problem of practical life--such, for example, as how to cure cancer, or
cut a navigable canal through a broad and mountainous isthmus, or
decorate a public building with a series of great frescoes--the central
point of interest is the individual and not society. How would a mother,
whose child was hovering between life and death, be comforted by the
information that man was a great physician? How would America be helped
in the construction of the Panama Canal by learning from sociologists
that man could remove mountains? How could great pictures be secured for
a public building by information to the effect that the greatest of all
great artists depended for their exceptional power on the aggregate of
conditions surrounding them, when ten millions of men whose surrounding
conditions were similar might be tried in succession without one being
found who rose in art above the level of vulgar mediocrity? It is not
that the generalisations of the evolutionary sociologists with regard
to man in the mass, or societies, are untrue philosophically.
Philosophically they are of the utmost moment. It is that they have no
bearing on the problems of contemporary life, and that they miss out the
one factor by which they are brought into connection with it.

Let us take, for example, the way in which Herbert Spencer illustrates
the general theorem of the evolutionary sociologists by the case of
Shakespeare, and Shakespeare's debt to his times. "Given a Shakespeare,"
he says, "and what dramas could he have written without the
multitudinous conditions of civilised life around him--without the
various traditions which, descending to him from the past, gave wealth
to his thought, and without the language which a hundred generations had
developed and enriched by use?" The answer to this question is to be
found in the counter-question that is provoked by it. Given the
conditions of civilised life, and the traditions of England and its
language, as they were under Queen Elizabeth, how could these have
produced the Shakespearian dramas unless England had possessed an
individual citizen whose psycho-physical organisation was equal to that
of Shakespeare? Similarly, it is true that Turner could not have painted
his sunsets if multitudinous atmospheric conditions had not given him
sunsets to paint; but at the same time every one of Turner's
contemporaries were surrounded by sunsets of precisely the same kind,
and yet only Turner was capable of producing such masterpieces as his
own. The case of the writer and the artist, indeed, illustrates with
singular lucidity the fact which the philosophy of the evolutionary
sociologists ignores that the great man does great things, not in virtue
of conditions which he shares with the dullest and the feeblest of the
men around him, but in virtue of the manner in which his exceptional
genius assimilates the data of his environment, and gives them back to
the world, recombined, refashioned, and reinterpreted.

And with regard to practical matters, and more especially the modern
production of wealth, the case is just the same. No one has illustrated
more luminously than Herbert Spencer himself the multitudinous character
of the knowledge which modern production necessitates; and no one has
insisted with more emphasis than he that one of the rarest faculties to
be met with among human beings is the faculty, as he expresses it, of
"apprehending assembled propositions in their totality." It would be
difficult to define better in equally brief language the intellectual
aspect of that composite mental equipment which distinguishes from
ordinary men the monopolists of business ability. It is precisely by
apprehending a multitude of assembled propositions in their
totality--mathematical, chemical, geological, geographical, and so
forth--by combining them for a definite purpose, and translating them
into a series of orders which organised labour can execute, that the
intellect of the able man gives efficiency to the industrial processes
of to-day. In addition, moreover, to his purely intellectual faculties,
he requires others which, in their higher developments, are no less
rare--namely, a quick discernment of popular wants as they arise or an
imagination which enables him to anticipate them, an instinctive insight
into character which enables him to choose best men as his subordinates,
promptitude to seize on opportunities, courage which is the soul of
promptitude, and finally a driving energy by which the whole of his
moral and intellectual mechanism is actuated. As for "the aggregate of
conditions out of which he has arisen," or the aggregate of conditions
which surround him, these are common to him and to every one of his
fellow-countrymen. They are a landscape which surrounds them all. But
aggregates of conditions could no more produce the results of which, as
Herbert Spencer admits, the able man is the proximate cause, unless the
able man existed and could be induced to cause them, than a landscape
could be photographed without a lens or a camera, or a great picture of
it painted in the absence of a great artist.

Herbert Spencer, indeed, partially perceives all this himself. That is
to say, he realises from time to time that the causal importance of the
great man varies according to the nature of the problems in connection
with which we consider him and that while he is, for purposes of
general speculation, merely a transmitter of forces beyond and greater
than himself, he is for practical purposes an ultimate cause or fact.
That such is the case is shown in a curiously vivid way by two
references to two great men in particular, which occur not far from each
other in Spencer's _Study of Sociology_. One is a reference to the last
Napoleon, the other is a reference to the first. He refers to the former
when he is emphasising his main proposition, that the importance of the
ruler, considered as an individual, is small, and almost entirely merged
in the conditions of society generally. "If you wish," he says, "to
understand the phenomena of social evolution, you will not do it should
you read yourself blind over the biographies of all the great rulers on
record, down to Frederick the greedy and Louis Napoleon the
treacherous." When he makes his reference to Louis Napoleon's ancestor,
he is pausing for a moment in the course of his philosophical argument
in order to indulge in a parenthetical denunciation of war. Of the
insane folly of war, he says, we can have no better example than that
provided by Europe at the beginning of the nineteenth century, when
hardly a country was free from "slaughter, suffering, and devastation."
For what, he goes on to ask, was the cause of such wide-spread horrors?
Simply, he answers, the presence of one abnormal individual, "in whom
the instincts of the savage were scarcely at all qualified by what we
call moral sentiments"; and "all this slaughter, suffering, and
devastation" were, he says, "gone through because one man had a restless
desire to be despot over all men." Here we see how Spencer, as a matter
of common-sense, instinctively assigns to great men absolutely
contrasted positions, according to the point of view from which he is
himself regarding them--that of the speculative thinker and that of the
practical politician, and of this fact we will take one example more. Of
his doctrine that the great man is merely a "proximate initiator," and
in no true sense the cause of what he seems to produce or do, he gives
us an elaborate illustration taken from modern industry--that is to say,
the invention of the _Times_ printing-press. This wonderful piece of
mechanism would, he says, have been wholly impossible if it had not been
for a series of discoveries and inventions that had gone before it; and
having specified a multitude of these, winds up with a repetition of his
moral that of each invention individually the true cause is not the
so-called inventor, but "the aggregate of conditions out of which he has
arisen." But when elsewhere, in his treatise on _Social Statics_,
Spencer is dealing with the existing laws of England, he violently
attacks these, in so far as they relate to patents, because they fail,
he says, to recognise as absolute a man's "property in his own ideas,"
or, in other words, "his inventions, which he has wrought, as it were,
out of the very substance of his own mind." Thus Spencer himself, at
times, as these passages clearly show, sees that while great men, when
considered philosophically, do little of what they appear to do, they
must for practical purposes be dealt with as though they did all; though
he nowhere recognises this distinction formally, or accords it a
definite place in his general sociological system.[12]

The absurdity of confounding speculative sociology with practical is
shown with equal clearness by Macaulay in the passage that was just now
quoted from him. "The inequalities of the intellect," he says, "like the
inequalities of the surface of the globe, bear so small a proportion to
the mass" that the sociologist may neglect the one just as safely as the
astronomer neglects the other. Now, this may be quite true if our
interest in human events is that of social astronomers who are watching
them from another planet. But because the inequalities of the earth are
nothing to the astronomer, it does not follow that they are nothing to
the engineer and the geographer. The Alps for the astronomer may be an
infinitesimal and negligible excrescence; but they were not this to
Hannibal or the makers of the Mont Cenis tunnel. What to the astronomer
are all the dykes of Holland? But they are everything to the Dutch
between a dead nation and a living one. And the same thing holds good of
the inequalities of the human intellect. For the social astronomer they
are nothing. For the practical man they are everything.

It is in the astonishing confusion between speculative and practical
truth which characterised the evolutionary sociologists of the
nineteenth century that the socialists of to-day are seeking for a new
support to their system. And now let us consider the way in which they
themselves have improved the occasion, and apply the moral which they
have drawn from such a singularly deceptive source. The three points
which they aim at emphasising are the smallness of the products which
the able man can really claim as his own, the consequent diminution of
his claims to any exceptional reward on account of them, and the fact
that even the highest ability, however rare it may be, is very much
commoner than it seems to be, and will, for this reason in addition to
those just mentioned, be obtainable in the future at a very much reduced

Of these three points the last is the most definite. Let us take it
first; and let us take it as stated, not by a professed socialist, but
by an independent and highly educated thinker such as Mr. Kidd. Mr.
Kidd's argument is, as we have seen already, that the comparative
commonness of ability of the highest kind is shown by the fact that, of
the greatest inventions and discoveries, a number have been notoriously
made at almost the same time by a number of thinkers who have all worked
in isolation. This argument would not be worth discussing if it were not
used so constantly by a variety of serious writers. The fact on which it
bases itself is no doubt true enough; but what is the utmost that it
proves? That more men than one should reach at the same time the same
discovery independently is precisely what we should be led to expect,
when we consider what the character of scientific discovery is. The
facts of nature which form its subject-matter are in themselves as
independent of the men who discover them as an Alpine peak is of the men
who attempt to climb it. They are, indeed, precisely analogous to such a
peak which all discoverers are attempting to scale at once; and the fact
that three men make at once the same discovery does no more to show that
it could have been made by the majority of their fellow-workers, and
that it was in reality made not by themselves but by their generation,
than the fact that three men of exceptional nerve and endurance meet at
last on some previously virgin summit proves the feat to have been
accomplished less by these men themselves than by the mass of tourists
who thronged the hotel below and whose climbing exploits were limited to
an ascent by the Rigi Railway.

Other writers, however, try to reach Mr. Kidd's conclusion by a
somewhat different route. Whether the great man is or is not a more
common phenomenon than he seems to be, they maintain that his conquests
in the realms of invention and discovery, when once made, really "become
common property," of which all men could take advantage if it were not
for artificial monopolies. All men, therefore, though not equal as
discoverers, are practically equalised by whatever the discoverers
accomplish. Now, of the simpler inventions and discoveries, such as that
of fire for example, this is perfectly true; but it is true of these
only. As inventions and discoveries grow more and more complex, they no
more become common property, as soon as certain men have made them, than
encyclopædic knowledge becomes the property of every one who buys or
happens to inherit an edition of the _Encyclopædia Britannica_. It is
perfectly true that the discovery of each new portion of knowledge
enables men to acquire it who might never have acquired it otherwise;
but as the acquisition of the details of knowledge becomes facilitated,
the number of details to be acquired increases at the same time; and the
increased ease of acquiring each is accompanied by an increased
difficulty in assimilating even those which are connected most closely
with each other. We may safely say that a knowledge of the simple rules
of arithmetic is common to all the members of the English University of
Cambridge; but out of some thousands of students only a few become great
mathematicians. And the same thing holds good of scientific knowledge
in general, and especially of such knowledge as applied to the purposes
of practical industry. Knowledge and inventions, once made, are like a
river which flows by everybody; but the water of the river becomes the
property of individuals only in proportion to the quantity of it which
their brains can, as it were, dip up; and the knowledge dipped up by the
small brains is no more equal to that dipped up by the large than a
tumbler of water is made equal to a hogshead by the fact that both
vessels have been filled from the same stream.

Let us now pass on to the argument which, differing essentially from the
preceding in that it does not aim at proving that the great men are
commoner than they seem to be, or their knowledge more diffused, insists
that of what the great men seem to do very little is really their
own--or that, as Mr. Bellamy puts it, in words which we have already
quoted, "nine hundred and ninety-nine parts out of a thousand of their
produce is really the result of their social inheritance and
environment." Here, again, we have a statement, which from one point of
view is true. It is merely a specialised expression of the far more
general doctrine that the whole process of the universe, man included,
is one, and that all individual causes are only partial and proximate.
No man at any period could do the precise things that he does if the
country in which he lives had had a different past or present, any more
than he could do anything if it were not for his own previous life, for
the fact that he had been born, that his mind and body had matured, and
that he had acquired, as he went along, such and such knowledge and
experience. How could a man do anything unless he had some environment?
Unless he had some past, how could he exist at all? Mr. Bellamy and his
friends, when considering matters in this light, are not too extreme in
their conclusions. On the contrary, they are too modest. For men, if
they were really isolated from their social inheritance and environment,
could not only do but little; they could do absolutely nothing. The
admission, therefore, that for practical purposes they must be held to
do something at all events, is an admission wrung from our philosophers
by the exigencies of common-sense. As such, then, let us accept it; and
what will our conclusion be? It will be this: that whatever it may be
which the ordinary man produces, and in whatever sense he produces it,
the great man, in the same sense, produces a great deal more. The
difference between them in efficiency will be no more lessened by the
fact that both are standing on the pedestal of a common past, than the
difference in stature will be lessened between a dwarf and a giant
because they are both standing on the top of a New York skyscraper, or
because they have both been nourished on the same species of food.

But the practical absurdity of the whole set of arguments urged in a
contrary sense by Herbert Spencer, Mr. Kidd, and the speculative
sociologists generally, is brought to its climax by those modern
exponents of socialism who attempt to invest them with a moral as well
as an industrial significance. Thus Mr. Webb, who himself frankly
recognises that the monopolists of business ability are industrially
more efficient than the great mass of their fellows, and that man for
man they produce incomparably more wealth, endeavours, by means of the
arguments which we have been just considering, to show that though they
produce it they have no moral right to keep it. The proposal, he says,
that, though men are vastly unequal in productivity, they should all of
them be awarded an equal share of the product--that if one man produces
only one shilling, while another man produces ninety-nine, the resulting
hundred should be halved and each of the men take fifty--this proposal
"has," he says, "an abstract justification, as the special energy and
ability with which some persons are born is an unearned increment due to
the effect of the struggle for existence upon their ancestors, and
consequently, having been produced by society, is as much due to society
as the unearned increment of rent."

Now, if this argument has any practical meaning at all, it can only mean
that the men who have been born with such special powers will, as soon
as they recognise what the origin of these powers is, realise that they
have, as individuals, no special claims on the results of them, and will
consequently become more willing than they are at the present time to
continue to produce the results, though they will not be allowed to
keep them. We will not insist, as we might do, on the curious want of
knowledge of human nature which the argument thus put forward by Mr.
Webb and other socialists betrays. It will be enough to point out that,
if it applies to the monopolists of business ability, it applies with
equal force to all other sorts of men whatever. If it is to society as a
whole that the able man owes his energy, his talents, and the products
of them, it is to society as a whole that the idle man owes his
idleness, the stupid man his stupidity, and the dishonest man his
dishonesty; and if the able man, who produces an exceptional amount of
wealth, can with justice claim no more than the average man who produces
little, the man who is so idle that he shirks producing anything may
with equal justice claim as much wealth as either. His constitutional
fault, and his constitutional disinclination to mend it, are both of
them due to society, and society, not he, must suffer.

If we attempted to organise a community in accordance with such a
conclusion as this, we should be getting rid of all connection between
conduct and the natural results of it, and divorcing action from motive
altogether. Such is the conclusion to which Mr. Webb's argument would
lead us; and the absurdity of the argument, as applied by him to moral
claims and merits, though more self-evident, is not any more complete
than the absurdity of similar arguments as applied to the individual
generally in respect of his productive powers, and the amount of
produce produced by them. The whole conception, in short, of the
individual as merged in the aggregate has no relation to practical life
whatever. For the practical man the individual is always a unit; and it
is only as a unit that it is possible practically to deal with him. We
may change him in some respects by changing his general conditions, as
we hope to do by legislation which aims at the diminution of
drunkenness; but a change in general conditions, if it diminished
drunkenness generally, would do so only because it affected at the same
time the isolated minds and organisms of a number of individual

And to do Mr. Webb and his brother socialists justice, they
unconsciously admit all this themselves; for, as soon as they set
themselves to discuss the motives of the able man in detail, they
altogether abandon the irrelevancies of speculative sociology with which
they manage at other times to bemuse themselves. That such is the case
we shall see in the following chapter. I will, however, anticipate what
we shall see there by mentioning that among the motives which are in the
socialistic future to replace, among able men, the desire of economic
gain, one of the chief is to be the desire of moral approbation. Unless
a man's actions, whether industrial or moral, are to be treated as his
own, instead of being attributed to his conditions, he would have as
little right to the praise which it is proposed to give him as he would
have to the dollars which it is proposed to take away.


[12] I first made this criticism of Spencer in my work _Aristocracy and
Evolution_. On that occasion Mr. Spencer wrote to me, complaining with
much vehemence that I had misrepresented him; and he repeated the
substance of his letter in a subsequent published essay. My criticism
dealt, and could have dealt only, not with what he meant, but what he
said; and certainly in his language--and, as I think, in his own
mind--there was a constant confusion between the two truths in question.
Apart, however, from what he considered to be my own misrepresentation
of himself, he declared that he entirely agreed with me; and that "great
men" must, for practical purposes, be regarded as the true causes of
such changes as they initiate.



The fact that the speculative arguments which we have just now been
discussing are not only irrelevant to the problem of the able man and
his motives, but are tacitly abandoned as being so by the very men who
have urged them, when they come to deal specifically with that problem
themselves, may suggest to some readers that so long a discussion of
them was superfluous. But though the socialists abandon them at the very
moment when, if ever, they ought to be susceptible of some definite
application, they abandon them quite unconsciously, and still continue
to attach to them some solemn importance. Such being the case, then, the
more futile these arguments are the stronger is the light thrown by them
on the peculiar intellectual weakness which distinguishes even the most
capable of those who think it worth their while to employ them. For this
reason, therefore, if for no other, our examination of them will have
proved useful, for it will have prepared us to encounter a weakness of
precisely the same kind in the reasonings of the socialists when they
deal with motive directly.

Let us once more state this direct problem of motive, as with perfect
accuracy, stated by the socialists themselves. Under existing conditions
the monopolists of business ability are mainly induced to add to the
national store of wealth by the prospect, whose fulfilment existing
conditions make possible, of retaining shares of it as their own which
are proportionate to the amounts produced by them. The question is,
therefore, whether, if this prospect is taken away from them, socialism
could provide another which men of this special type would find equally
stimulating. Is human nature in general, and the nature of the
monopolists in particular, sufficiently adaptable to admit of such a
change as this? The socialists answer that it is, and in making such an
assertion they declare that they have all the facts of scientific
sociology at the back of them. The unscientific thing is, they say, to
assume the contrary; and here, they proceed, we have the fundamental
error which renders most of the conclusions of the ordinary economists
valueless. Economic science, in its generally accepted form, bases all
its reasonings on the behaviour of the so-called "economic man"--that is
to say, a being from whom those who reason about him exclude all
operative desires except that of economic gain. But such a being, say
the socialists, is a mere abstraction. He has no counterpart among
living, loving, idealising, aspiring men. Real men are susceptible of
the desire of gain, no doubt; but this provides them only with one
motive out of many; and there are others which, as experience amply
shows us, are, when they are given unimpeded play, far stronger. I do
not know whether socialists have ever used the following parallel; but
if they have not it expresses their position better than they have
expressed it themselves. They argue virtually that, in respect of the
desire for exceptional gain, able men are comparable to victims of the
desire for alcohol. If alcohol is obtainable, such men will insist on
obtaining it. They will constantly fix their thoughts on it; no other
fluid will satisfy them. But if it is placed altogether beyond their
reach, they will be compelled by the force of circumstances to drink
lemonade, tea, or even plain water instead. In time they will come to
drink them with the same avidity; and their health and their powers of
enjoyment will be indefinitely improved in consequence. In the same way,
it is argued, the monopolists of business ability, though, so long as it
is possible for them to appropriate a considerable share of their
products, they will insist on getting this share, and will not exert
themselves otherwise, need only be placed under conditions which will
render such gain impossible, and at once they will find out that there
exist other inducements which will prove before long to be no less

Such is the general argument of the modern school of socialists; but
they do not leave it in this indeterminate form. They have, to their own
satisfaction, worked it out in detail, and claim that they are able to
demonstrate from the actual facts of human nature precisely what the
character of the new inducements will be.

It may be looked upon as evidence of the methodical and quasi-scientific
accuracy with which modern socialists have set themselves to discuss
this question of motive that the thought of all of them has moved along
the same lines, and that what all of them fix upon as a substitute for
the desire of exceptional pecuniary gain is one or other, or all, of a
few motives actually in operation, and notoriously effective in certain
spheres of activity.

These motives practically resolve themselves into four, which have been
classified as follows by Mr. Webb or one of his coadjutors:

"The mere pleasure of excelling," or the joy of the most powerful in
exercising their powers to the utmost.

"The joy in creative work," such as that which the artist feels in
producing a great work of art.

The satisfaction which ministering to others "brings to the instincts of
benevolence," such as that which is felt by those who give themselves to
the sick and helpless.

And, lastly, the desire for approval, or the homage which is called
"honour," the efficiency of which is shown by the conduct of the
soldier--often a man of very ordinary education and character--who will
risk death in order that he may be decorated with some intrinsically
worthless medal, which merely proclaims his valour or his unselfish
devotion to his country.

Now, that the motives here in question are motives of extraordinary
power, all history shows us. The most impressive things accomplished by
human nature have been due to them. But let us consider what these
things are. The first motive--namely, that supplied by the mere
"pleasure in excelling"--we need hardly consider by itself, for, in so
far as socialists can look upon its objects as legitimate, it is
included in the struggle for approbation or honour. We will merely
remark that the emphasis which the socialists lay on it is not very
consonant with the principles of those persons who propose to abolish
competition as the root of all social evils; and we will content
ourselves with examining in detail the three other motives only, and the
scope of their efficiency, as actual experience reveals it to us.

We shall find that the activities which these three motives stimulate
are confined, so far as experience is able to teach us anything, to the
following well-marked kinds, which have been already indicated: those of
the artist, of the speculative thinker, of the religious and
philanthropic enthusiast, and, lastly, those of the soldier. This list,
if understood in its full sense, is exhaustive.

Such being the case, then, the argument of the socialists is as follows:
Because a Fra Angelico will paint a Christ or a Virgin, because a Kant
will immolate all his years to philosophy, because a monk and a sister
of mercy will devote themselves to the victims of pestilence, because a
soldier in action will eagerly face death--all without hope of any
exceptional pecuniary reward--the monopolists of business ability, if
only such rewards are made impossible for them, will at once become
amenable to the motives of the soldier, the artist, the philosopher, the
inspired philanthropist, and the saint. This is the assertion of the
socialists when reduced to a precise form; and what we have to do is to
inquire whether this assertion is true. Does human nature, as history,
as psychology, and as physiology reveal it to us, give us any grounds,
in fact, for taking such an assertion seriously? Any one who has studied
human conduct historically, who has observed it in the life around him,
and examined scientifically the diversities of temperament and motive
that go with diversities of capacity, will dismiss such an assertion as
at once groundless and ludicrous.

Let us, to go into detail, take the case of the artist. What reason is
there to suppose that the impassioned emotion which stimulates the
adoring monk to lavish all his genius on an altar-piece will stimulate
another man to devise, and to organise the production of, some new kind
of liquid enamel for the decoration of cheap furniture?[13] Or let us
turn to an impulse closely allied to the artistic--namely, the desire
for speculative truth, as manifested in the lives of scientific and
philosophic thinkers. These men--such as Kant and Hegel, for
example--have been proverbially, and often ludicrously, indifferent to
the material details of their existence. Who can suppose that the
disinterested passion for truth, which had the effect of making these
men forget their dinners, will stimulate others to devote themselves to
the improvement of stoves and saucepans?

Yet again, let us consider the area of the industrial influence of the
motives originating in religious fervour or benevolence. The most
important illustration of this is to be found in the monastic orders.
The monastic orders constructed great buildings; they successfully
practised agriculture and other industrial arts: and those of them who
were faithful to their vows aimed at no personal luxuries. On the
contrary, their superfluous possessions were applied by them to the
relief of indigence. But this industrial asceticism was made possible
only by its association with another asceticism--the renunciation of
women, the private home, the family. Even so, in the days when Christian
piety was at its highest, those who were capable of responding to the
industrial motives of the cloister formed but a fraction of the general
population of Christendom, while even among them these motives
constantly ceased to operate; and, as St. Francis declared with regard
to his own disciples, the desire for personal gain continually insisted
on reasserting itself. What ground have we here for supposing that
motives, whose action hitherto has always been strictly limited to
passionate and seclusive idealists turning their backs on the world,
will ever become general among the monopolists of that business ability,
the object of whom is to fill the world with increasing comforts and
luxuries. One might as well argue that, because the monastic orders were
celibate, and formed at one time a very numerous body, all men will
probably soon turn celibate also, and yet at the same time continue to
reproduce their species.

But the scientific quality of the psychological reasoning of the
socialists is best illustrated by their treatment of another class of
facts--that on which they themselves unanimously lay the greatest
stress--namely, the heroisms of the soldier, and other men of a kindred
type. The soldier, they say, is not only willing but eager to perform
duties of the most painful and dangerous kind, without any thought of
receiving any higher pay than his fellows. If, then, human nature is
such, they continue, that we can get from it on these terms work such as
that of the soldier's, which is work in its most terrifying form, it
stands to reason that we can, on the same terms, get out of it work of a
much easier kind, such as that of exceptional business ability applied
to the safe and peaceful direction of labour. Nor is this argument urged
by socialists only. Other thinkers who, though resembling them somewhat
in sentiment, are wholly opposed to socialism as a formal creed, have
likewise pitched upon the soldier's conduct in war as a signal
illustration of the potentialities of human nature in peace. Thus Ruskin
says that his whole scheme of political economy is based on the moral
assimilation of industrial action to military. "Soldiers of the
ploughshare," he exclaims in one of his works, "as well as soldiers of
the sword! All my political economy is comprehended in that phrase." So,
too, Mr. Frederic Harrison, the English prophet of Positivism, following
out the same train of thought, has declared that the soldier's readiness
to die in battle for his country is a realised example of a readiness,
always latent in men, to spend themselves and be spent in the service of
humanity generally. Again in the same sense, another writer observes,
"The soldier's subsistence is certain. It does not depend on his
exertions. At once he becomes susceptible to appeals to his patriotism,
and he will value a bit of bronze, which is the reward of valour, far
more than a hundred times its weight in gold"--a passage to which one of
Mr. Sidney Webb's collaborators refers with special delight, exclaiming,
"Let those take notice of this last fact who fancy we must wait till men
are angels before socialism is practical."

Now, the arguments thus drawn from the facts of military activity throw
a special light on the methods and mental condition of those who so
solemnly urge them; for the error by which these arguments are vitiated
is of a peculiarly glaring kind. It consists of a failure to perceive
that military activity is, in many respects, a thing altogether apart,
and depends on psychological and physiological conditions which have no
analogies in the domain of ordinary economic effort.

That such must necessarily be the case can be very easily seen by
following out the train of reasoning suggested by Mr. Frederic Harrison.
Mr. Harrison correctly assumes that no man, in ordinary life, will run
the risk of being killed or mutilated except for the sake of some object
the achievement of which is profoundly desired by him. If a man, for
instance, puts his hand into the fire in order to pick out something
that has dropped among the burning coals, we naturally assume that this
something is of the utmost value and importance to him. We measure the
value which a man places on the object by the desperate character of the
means which he will take to gain it; and Mr. Harrison jumps to the
conclusion that what holds good in ordinary life will hold equally good
on the field of battle also. Hence he argues--for this is his special
point--that the willingness of the soldier to die fighting on behalf of
his country shows how individuals of no unusual kind value their
country's welfare more than their own lives, and how readily, such being
the case, devotion to a particular country may be enlarged into a
religious devotion to Humanity taken as a whole. Now, there are
occasions, no doubt, in which, a country being in desperate straits, the
soldier's valour is heightened by devotion to the cause he fights for;
but that ideal devotion like this affords no sufficient explanation of
the peculiar character of military activity generally; and that there
must be some deeper and more general cause at the back of it, is shown
by the fact that some of the most reckless soldiers known to us have
been mercenaries who would fight as willingly for one country as for
another. And this deeper and more general cause, when we look for it, is
sufficiently obvious. It consists of the fact that, owing to the
millions of years of struggle to which was due, in the first place, the
evolution of man as a species, and, in the second place, the races of
men in their existing stages of civilisation, the fighting instinct is,
in the strongest of these races, inherent after a fashion in which the
industrial instincts are not; and will always prompt numbers to do, for
the smallest wage or none, what they could hardly, in its absence, be
induced to do for the highest. This instinct, no doubt, is more
controlled than formerly, and is not so often roused; but it is still
there. It is ready to quicken at the mere sound of military music; and
the sight of regiments marching stirs the most apathetic crowd.
High-spirited boys will, for the mere pleasure of fighting, run the risk
of having their noses broken, while they will wince at getting up in the
cold for the sake of learning their lessons, and would certainly rebel
against being set to work as wage-earners at a task which involved so
much as a daily pricking of their fingers.

Here we have the reason, embodied in the very organism of the human
being, why military activity is something essentially distinct from
industrial, and why any inference drawn from the one to the other is
valueless. And to this primary fact it is necessary to add another. Not
only is the fighting instinct an exceptional phenomenon in man, but the
circumstances which call it into being are in these days exceptional
also. Socialists frequently, when referring to the soldier's conduct,
refer also to conduct of a closely allied kind, such as that of the
members of fire-brigades and the crews of life-boats, and repeat their
previous question of why, since men like these will, without demanding
any exceptional reward, make such exceptional efforts to save the lives
of others, the monopolists of business ability may not be reasonably
expected to forgo all exceptional claims on their own exceptional
products, and distribute among all the superfluous wealth produced by
them just as freely as the fireman climbs his ladder, or as life-belts
are distributed by the boatmen in their work of rescue. And if human
life were nothing but a chronic conflagration or shipwreck, in which all
alike were fighting for bare existence, all alike being menaced by some
terrible and instant death, this argument of the socialists might
doubtless have some truth in it. The men of exceptional ability, by a
variety of ingenious devices, might seek to save others no less
assiduously than themselves, without expecting anything like exceptional
wealth as a reward; for there would, in a case like this, be no question
of wealth for anybody. But as soon as the stress of such a situation was
relaxed, and the abilities of the ablest, liberated from the task of
contending with death, were left free to devote themselves to the
superfluous decoration of life, the artificial tension of the moral
motives would be relaxed. The swimmer who had plunged into the sea to
save a woman from drowning would not take a second plunge to rescue her
silk petticoat. The socialists, in short, when dealing with military and
other cognate heroisms, ignore both of the causes which alone make such
heroisms possible. They ignore the fact that the internal motive is
essentially isolated and exceptional. They ignore the further fact that
the circumstances which alone give this motive play are essentially
exceptional also, and could never be reproduced in social life at large,
except at the cost of making all human life intolerable.

I have called special attention to this particular socialistic argument,
partly because socialists, and other sentimental thinkers, like Ruskin,
attach such extreme importance to it; but mainly because it affords us
an exceptionally striking illustration of the manner in which they are
accustomed to reason about matters with regard to which they
ostentatiously profess themselves to be the pioneers of accurate
science. One of the principal grounds--to repeat what has been said
already--on which they attack what they call the Economics of
Capitalism, is that it deals exclusively with the actions of "the
economic man," or the man whose one motive is the appropriation of
wealth. Such a man, they say, is an abstraction. He does not exist in
reality; and if economics is to have any scientific value it must deal
with man as a whole, in all his living complexity. As applied to the
orthodox economists this criticism has an element of truth in it; but
when the socialists attempt to act on their own loudly boasted
principles, and deal with human nature as a whole instead of only one of
its elements, they do nothing but travesty the error which they set out
with denouncing. The one-motived economic man who cares only for
personal gain is, no doubt, an abstraction, like the lines and points of
Euclid. Still the motive ascribed to him is one which has a real
existence and produces real effects. It has been defined with accuracy;
and by studying its effects in isolation we reach many true conclusions.
But the other motives, with which socialists declare that we must
supplement this, are treated by them in a manner so crude, so childish,
so incomplete, so deficient in the mere rudiments of scientific
analysis, that they do not correspond to anything. Instead of forming
any true addition to the data of economic science, they are like images
belonging to the dream of a maudlin school-girl. They have only the
effect of obscuring, not completing, the facts to which the orthodox
economists too closely confined themselves, but which, though
incomplete, are so far as they go actual.

Now, however, without getting out of touch with the socialists, let us
return to firmer ground, and having seen the futility of their attempts
to indicate any motive calculated to operate on the monopolists of
business ability, other than that supplied under the existing system by
the prospect of possessing wealth proportionate to the amount produced
by them, let us consider this motive in itself, as history and
observation reveal it to us.

And here in the presence of facts which no one seeks to deny, we shall
find that the socialists themselves are among our most interesting
witnesses, affording in what they assert a solitary and signal exception
to that looseness of thought and observation which is otherwise their
distinguishing characteristic. The motive here in question as ascribed
to the exceptional wealth-producer, the director, the man of business
ability--the motive which in his case the socialists propose to
supersede, but which is at present in possession of the field--commonly
receives from them the vituperative name of "greed." What they mean by
greed is simply the desire of the great wealth-producer to retain for
himself a share of wealth, not necessarily equal, but proportionate, to
the amount produced by him. And what have the socialists got to tell us
about greed, when they turn from their plans for superseding it in the
socialistic future to consider its operations in the actual past and

They tell us a great deal. For what is, and always has been, their stock
moral indictment against the typical men of ability, the pioneers of
commerce, the capitalistic directors of labour, the introducers of new
inventions, the amplifiers of the world's wealth? Their chief indictment
against such men has been this--that their exceptional ability, instead
of being roused into action solely by the pleasure of benefiting their
fellow-men, has been utterly dead and irresponsive to every stimulus but
one; and that this has been personal greed, and personal greed alone.
Its influence, they say, is as old as civilisation itself, and was as
operative in the days when the prows of the Tyrian traders first
ploughed their way beyond the pillars of Hercules, as it is to-day under
the smoke-clouds of Manchester, of Pittsburg, and Chicago. Karl Marx
for example, in a very interesting passage written in England about the
time of the abolition of the Corn-laws, declared that the radical
manufacturers, who professed to support that measure on the ground that
it would secure cheap food for the people, were not moved in reality,
and were not capable of being moved, by any desire but that of lowering
the rate of wages, and thus increasing the surplus which they raked into
their own pockets. In other words, the psychologists of socialism
declare that, so far as the facts of human nature in the present and the
past can teach us anything, the desire of exceptional wealth is just as
inseparable from the temperament which, by some physiological law,
accompanies the power of producing it, as "the joy in creation" is from
the temperament of the great painter, or the love of a woman is from the
lover's efforts to win her.

We thus see that those thinkers who, when they are dealing with an
imaginary future, base all their hopes on the possibility of a complete
elimination of a certain motive from a certain special class of persons,
are the very men who are most vehement in declaring that in this special
class of persons the motive in question is something so ingrained and
inveterate that in no age or country has it ever been so much as

Nor does the matter end here; for the amusing contradiction in which
socialistic thought thus lauds itself, is emphasised by the fact that
the socialists, when they turn from the few to the many, assume in the
many, as an instinct of eternal justice, that precise desire for gain
which, in the case of the few, they first denounce as a hideous and
incurable disease, and then propose to cure as though it were the
passing cough of a baby. For what is the bait with which, from its first
beginnings till to-day, socialism has sought to secure the support of
the general multitude? It is mainly, if not solely, the promise of
increased personal gain, without any increased effort on the part of the
happy recipients. With Marx and the earlier socialists, this promise
took the form of declaring that every man has a sacred right to whatever
he has himself produced, and that, all the wealth of the world being
produced by manual labour, the labourers must never be satisfied until
they have secured all of it. The more educated socialists of to-day,
having gradually come to perceive that labour itself produces but a
fraction of this wealth only, have had to alter the form of their
promise, but they still adhere to its substance; and the altered form of
the promise does but bring out more clearly the fact that they appeal to
the desire of personal gain as the primary economic motive of the great
majority of mankind. For, whereas the earlier socialists contented
themselves with promising the labourer the whole of what he produced,
and promising it on the ground that he had himself produced it, what the
labourer is promised by the intellectual socialists of to-day is not
only all that he has produced--which in most cases he gets
already[14]--but a great deal more besides, which is admittedly produced
by others.

We thus see that, according to these theorists, the kind of moral
conversion which is to make socialism practicable is to be rigidly
confined to one particular class; for, on the part of the majority, no
change at all is required in order to make the socialistic evangel
welcome. So far as they are concerned, the Old Adam is quite sufficient.
None of us need much converting in order to welcome the prospect of an
indefinite addition to our incomes, which will cost us nothing but the
trouble of stretching out our hands to take it. Socialists often
complain that, under the existing dispensation, there is one law for the
rich and another law for the poor. They propose themselves to introduce
a difference which goes still deeper, and to provide the few and the
many, not only with two laws, but with two different natures, and two
antithetic moralities. The morality of the many is to remain, as it
always has been, comfortably based on the familiar desire for dollars.
The morality of the few is to be based on some hitherto unknown contempt
for them; and the class which the socialists fix upon as the subjects of
this moral transformation, is precisely the class which they denounce as
being, and as always having been, in respect of its devotion to dollars,
the most notorious, and the most notoriously incorrigible.

That arguments such as these, culminating in an absurdity like this, and
starting with the assumption that it is possible to animate a
manufacturer's office with the spirit of soldiers facing an enemy's
guns, should actually emanate from sane men would be unbelievable, if
the arguments were not being repeated from day to day by men who, in
some respects, are far from being incompetent reasoners. Indeed, many of
them themselves would, it seems, be extremely doubtful with regard to
the plasticity imputed by them to human nature, if it were not for a
theory of society which is not peculiar to socialism. This is the theory
that, in any community or nation in which each citizen is completely
free to express his will by his vote, and realises the extent of the
power which thus resides in him, the will of the majority has
practically no limits to its efficiency, and will be able in the future
to bring about moral changes, which are at present, perhaps, beyond the
limits of possibility, but are only so because the means of effecting
them have never yet been fully utilised. This theory of democracy we
will consider in the following chapter.


[13] Mr. G. Wilshire, in criticising this argument as stated in one of
my American addresses, declares that there would be nothing in socialism
to prevent any great artist (such as a singer) from making an even
larger fortune than he or she does now. But though a Melba, under the
existing system, demands a large price for her services, under socialism
all would be changed. Though she _could_ get it, she would no longer
want it. She would then want no reward but the mere joy of using her
voice. And he infers that this change which would take place in the
bosoms of great singers would repeat itself under the breast-pocket of
every leader and organiser of commercial enterprise. It would be hard to
find a better illustration of the purely fanciful reasoning commented on
in the text.

[14] The question of how much labour, _as such_, produces in modern
societies is discussed in a later chapter.



The ascription of imaginary powers to the so-called "sovereign"
democracy, which are really beyond the reach of any kind of government
whatsoever, is, as I have said, a fallacy by no means peculiar to
Socialists. Socialists merely push it to its full logical consequences;
and I will begin with illustrating it by the arguments of a recent
writer who, professedly as a social conservative, has dealt in detail
with this precise question of the motives of the exceptional
wealth-producer, which has just now been engaging us. I refer to the
author of an essay in _The North American Review_, who hides his
personality under the cryptic initial "X," but who is said to be one of
the most cultivated and best-known thinkers now living in the United

The subject of his essay is the growth, almost peculiar to that country,
not of large, but of those colossal fortunes, which have certainly had
no parallel in the past history of the world. The position of "X" is
that the growth of such fortunes is deplorable, partly because they are
possible instruments of judicial and political corruption, and partly
because they excite antagonism against private wealth in general by
exhibiting it to the gaze of the multitude in such monstrous and
grotesque proportions. In any case, says "X," "it is to the true
interest of the multimillionaires themselves to join those who are free
from envy in trying to remove the rapidly growing dissatisfaction with
their continued possession of these vast sums of money."

Now, though "X" hints that some of the fortunes in question may be open
to further reprehension, on the ground that they have been acquired
dishonestly, he by no means maintains that this opprobrium attaches
itself to the great majority of them. On the contrary, he admits that
the typical huge fortunes of America are based on the productive
activities of the remarkable men who have amassed them. The talents of
such men, he says, are essential to the prosperity of the country, and
it is necessary to stimulate such men to develop their talents to the
utmost by allowing them to derive for themselves some special reward for
their use of them; but he contends that the rewards which they are at
present permitted to appropriate are needlessly and dangerously
excessive, and ought therefore to be limited. But limited by what means?
It is his answer to this question that here alone concerns us.

The means, he says, by which these rewards may be limited are ready to
hand, and can be applied with the utmost ease. They are provided by the
democratic Constitution of the United States of America. "No one can
doubt, for example," he goes on to observe, "that, if the majority of
the voters of the State of New York chose to elect a governor of their
own way of thinking, they could readily enact a progressive taxation of
incomes which would limit every citizen of New York State to such income
as the majority of voters considers sufficient for him. And it would be
particularly easy," adds the writer, "to alienate the property of every
man at death, for it is only necessary to repeal the statutes now
authorising the descent of such property to the heirs and legatees of
the decedent." Here, then, according to "X," is an obvious way out of
the difficulty, the feasibility of which no one can doubt. A certain
minority of the citizens render services essential to the majority; but
these advantages are accompanied by a corresponding drawback. The
majority, by the simple use of their sovereign power as legislators, can
retain the former and get rid of the latter. The remedy is in their own

It would be difficult to imagine an illustration more vivid than this of
the error to which I am now referring--the common error of ascribing to
majorities in democratic communities powers which they do not possess,
and which, as I said before, no kind of government possesses, whether it
be that of a democracy or of an autocrat. That a majority of the voters
in any democratic country can enact any laws they please at any given
moment which happen to be in accordance with what "X" calls their then
"way of thinking," and perhaps enforce them for a moment, is no doubt
perfectly true. But life is not made up of isolated moments or periods.
It is a continuous process, in which each moment is affected by the
moments that have gone before, and by the prospective character of the
moments that are to come after. If it were not for this fact, the
majority of the voters of New York State, "by electing a governor of
their own way of thinking," might not only put a limit to the income
which any citizen might possess. It might do a great deal more besides.
It might enact a law which limited the amount which any citizen might
eat. It might limit everybody to two ounces a day. Besides enacting that
no father should bequeath his wealth to his children, it might enact
just as readily that no father should have the custody of his children.
It might enact, in obedience to the persuasions of some plausible quack,
that no one should take any medicines but a single all-curing pill.
There is nothing in the principles so solemnly laid down by "X" which
would render any of these enactments more impossible than those which he
himself contemplates. But if such enactments were made by the so-called
all-powerful majority, through a governor of their own way of thinking,
what would be the result? If a law forbade the citizens to eat enough
to keep themselves alive, it might perhaps be obeyed throughout Monday,
but it would be broken by Tuesday morning. A law which deprived fathers
of the care of their own children might just as well be a law which
decreed that no children should be born. A law which decreed that no
remedy but the same quack pill should be applied to any disease, whether
cholera, appendicitis, or small-pox, would be either disregarded from
the beginning, or would soon be repealed by a pestilence. In short, if
any one of these ridiculous laws were enacted, the very voters who voted
for it would disregard it as soon as they realised its consequences; and
the work which they did as legislators they would tear to pieces as men.
In other words, if we mean, by legislation, legislation which can be
permanently obeyed, the legislative sovereignty of democracies, which is
so commonly spoken of as supreme, is limited in every direction by
another power greater than itself; and this is the double power of
nature and of human nature. Just as all laws relating to the food which
men are to eat, and the drugs by which their maladies are to be cured,
must depend on the natural qualities of such and such physical
substances, so do the constitution and propensities of the concrete
human character limit legislation generally, and confine it within
certain channels.

This is what "X" and similar thinkers forget; and the nature of their
error is very pertinently illustrated by an observation of the English
jurist, Lord Coleridge, to which "X" solemnly refers, as corroborating
him in his own wisdom. "The same power," says Lord Coleridge, "which
prescribes rules for the possession of property can of course alter
them"; this power being the legislative body of whatever country may be
in question. It is easy to see the manner in which Lord Coleridge
reasons. Because, in any country, the formulation and enforcement of
laws have the will of the governing body as the proximate cause which
determines them, it seems to Lord Coleridge that, in this contemporary
will, the laws thus formulated and enforced have their ultimate cause
also. For example, according to him, the entire institution of property
in the State of New York is virtually a fresh creation of the voters
from year to year, and has nothing else behind it. But, in reality, all
this business of formulation and enforcement is a secondary process, not
a primary process at all. Lord Coleridge is simply inverting the actual
order of things. Half the existing "rules prescribed as to the
possession of property" have, for their ultimate object, the protection
of family life, the privacy of the private home, and the provision made
by parents for their children. But family life is not primarily the
creation of prescribed rules. It is the creation of instincts and
affections which have developed themselves in the course of ages.
Instead of the law creating family life, it is family life which has
gradually called into being--which has created and dictated--the rules
and sanctions protecting it. The same is the case with bequest,
marriage, and so forth. The conduct of civilised men is bound to conform
to laws, but the laws must first conform to general human practice. They
merely give precision to conduct which has a deeper origin than
legislation. Laws, in fact, may be compared to soldiers' uniforms.
These, within certain limits, may be varied indefinitely by a
war-office; but they all must be such as will adapt themselves to the
human body and its movements. The will of a government may prescribe
that the trousers shall be tight or loose, that they shall be black or
brown or bright green or vermilion. But no government can prescribe that
they shall be only three inches round the waist, or that the soldier's
sleeves shall start, not from the shoulders, but from the pockets of the
coat-tails. The human body is here a legislator which is supreme over
all governments; and just the same thing is true with regard to the
human character.

Now, the curious thing with regard to "X" is that he is all along
assuming this fundamental fact himself; though he utterly fails to put
two and two together, and see how this fact conflicts with the
omnipotence which he ascribes to legislation. Let us go back to the
assertion, which embodies his whole practical argument, that the
majority of the voters in New York State could, without interfering with
the activity of any one of its citizens, limit incomes in any manner
they pleased, and alienate with even greater ease the property of every
man at his death; and let us see what he hastens to say as the sequel to
this oracular utterance.

These powers of the sovereign majority, which he is apparently so
anxious to invoke, would, he says, be practically much less formidable
in their action than timid persons might anticipate. And why should they
be less formidable? "Because," says "X," "although each man, by reason
of his manhood alone, has an equal voice with every other man in making
the laws governing their common country, and regulating the distribution
of the common property ... yet immense and incalculable differences
exist in men's natural capacities for rendering honest service to
society. Encouragement should, therefore, be given to every man to use
all the gifts which he possesses to the fullest extent possible; and,
accordingly, reasonable accumulations and the descent of these should be
respected." They should, he says, be respected. Yes--but for what
reason? Because they encourage exceptional men, whose services are
essential to society, to develop and use their capacities to "the
fullest extent possible"; and this is merely another way of saying that,
without the motive provided by the possibility of accumulation and
bequest, the exceptional faculties would not be developed or used at
all. Moreover, the amounts which may be accumulated and bequeathed,
although they will be strictly limited, must, "X" says, be
considerable. He suggests that incomes should be allowed up to £8,000,
and bequeathable property up to £200,000. And here we come to a question
which is still more pertinent than the preceding. Why must the
permissible amounts of income and of bequeathable property be of
proportions such as those which he contemplates? Why does he not take
his bill and write down quickly £200 of income instead of £8,000, and
limit bequeathable property to £2,000 instead of £200,000? Because he
evidently recognises that the men whose possible services to society are
"immensely and incalculably greater" than those of the majority of their
fellow citizens would not be tempted by a reward which, reduced to its
smallest proportions, would not be very largely in excess of what was
attainable by more ordinary exertions. In his formal statement of his
case, he says that the amount of the reward would be entirely determined
by what _ought_ to be sufficient for the purpose in the estimation of
the voting majority; and he mentions the sums in question as those on
which they would probably fix. And it is, of course, quite imaginable
that the majority, in making either these or any other estimates, might
be right. But what "X" fails altogether to see is that, if the majority
of the citizens _were_ right, such sums would not be sufficient because
the majority of citizens happened to think that they ought to be. They
would be sufficient because they were felt to be sufficient by the
minority who were invited to earn them, at whose feelings the majority
would have made a shrewd or a lucky guess. A thousand men with
fishing-rods might meet in an inn parlour and vote that such and such
flies were sufficient to attract trout. But it lies with the trout to
determine whether or no he will rise to them. It is a question, not of
what the fishermen think, but of what the trout thinks; and the
fishermen's thoughts are effective only when they coincide with the

So long, then, as society desires to get the best work out of its
citizens, and so long as some men are, in the words of "X," "immensely
and incalculably" more efficient than the great mass of their fellows,
and so long as their efficiency requires, as "X" admits that it does,
some exceptional reward to induce these men to develop it, these men
themselves, in virtue of their inherent characters, must primarily
determine what the reward shall be; and not all the majorities in the
world, however unanimous, could make a reward sufficient if the
particular minority in question did not feel it to be so. The majority
might, by making a sufficient reward unattainable, easily prevent the
services from being rendered at all; but, unless they are to forgo the
services, the majority can only obtain them on terms which will, in the
last resort, depend on the men who are to render them.

Now, in what I have been urging thus far--which practically comes to
this, that the sovereignty popularly ascribed to democratic majorities
is an illusion--not socialists only, but other advocates of popular
government also, will alike be against me, as the promulgator of some
blasphemous paradox. It will be easy, however, to show them that their
objections are quite mistaken, and that the exceptional powers of
dictation which have just been ascribed to a minority are so far from
being inconsistent with the real powers of the majority that the latter,
when properly understood, are seen to be their complement and their
counterpart. For, though socialists and thinkers like "X" ascribe to
majorities powers which they do _not_ possess, we shall find that
majorities do actually possess others, in some ways very much greater,
of which such thinkers have thus far taken no cognisance at all. I have
said that minorities can dictate their own terms to majorities which
desire to secure their services, the reason being that the former are
alone competent to determine what treatment will supply them with a
motive to exert themselves. What holds good of minorities as opposed to
majorities holds good in essentials, though in a somewhat different
form, of majorities as opposed to such minorities.

Let us turn again to a matter to which I have referred already--namely,
the family life of the citizens of any race or nation. This results from
propensities in a vast number of human beings which, although they are
similar, are in each case independent. These propensities give rise to
legislation, the object of which is to prescribe rules by which their
satisfaction may be made secure; but the propensities are so far from
originating in legislation that no legislation which seriously
interfered with them would be tolerated. Socialists themselves have
continually admitted this very thing. The Italian socialist, Giovanni
Rossi, for instance, who attempted about fifteen years ago to found a
socialistic colony in Brazil--an attempt which completely
failed--attributed its failure largely to this particular cause--namely,
the impossibility of inducing the colonists to conform to any rules of
the community by which family life was interfered with. Here we have an
example of democracy in its genuine form, rendering powerless what
affected to be democratic legislation. We have the cumulative power of
similar human characters compelling legislation to limit itself to what
these characters spontaneously demand. And now let us go a step--a very
short step--further. The family propensities in question show their
dictatorial power, not only in the limitations which they impose on
positive laws, but also in the character which they impose on the
material surroundings of existence, especially in the material structure
of the dwellings of all classes except the lowest. All are constructed
with a view to keeping the family group united, and each family group
separate from all others. Further, if the natural family propensities
thus affect the structure of the dwelling, other propensities, more
various in detail, but in each case equally spontaneous, determine what
commodities shall be put into it.

And this fact brings us back to our own more immediate subject--namely,
the power of the few and of the many in the sphere of economic
production. The man of exceptional industrial capacity becomes rich in
the modern world by producing goods, or by rendering services, which
others consume or profit by, and for which they render him a return.
But, in order that they may take, and render him this return for what he
offers them, the goods and the services must be such that the many
desire to have them. All the highest productive ability that has ever
been devoted to the business of cheapening and multiplying commodities,
or rendering social services, would be absolutely futile unless these
commodities and services satisfied tastes or wants existing in various
sections of the community. The eliciting of such wants or tastes depends
very often, and in progressive communities usually, on a previous supply
of the commodities or services that minister to them--as we see, for
example, in the case of tobacco, of the telegraph, and of the bicycle;
but, when once the demands have been elicited, they are essentially
democratic in their nature. Each customer is like a voter who
practically gives his vote for the kind of goods which he desires to
have supplied to him. He gives his vote under no compulsion. He is under
the manipulation of no party or wire-puller; and the men by whose
ability the goods are cheapened and multiplied are bound to determine
their character by the number of votes cast for them.[15]

Thus, while--so long as the productivity of labour is intensified, as it
is in the modern world, by the ability of the few who direct labour--the
labouring majority can never be free in their technical capacity of
producers, they are free, and must always remain free, in respect of
their tastes as consumers. In other words, demand is essentially
democratic, while supply, in proportion to its sustained and enhanced
abundance, is essentially oligarchic.

Now, that demand is essentially democratic, and depends on the tastes
and characters of those by whom the demands are made, nobody will be
inclined to deny. But if we turn our attention from society, taken as a
whole, to the exceptionally able minority on whom the business of supply
depends, we shall find that these men, in their turn, form similarly a
small democracy in themselves, and make, as suppliers, their own demands
also--a demand for an economic reward, or an amount of personal wealth,
not, indeed, necessarily equal to the amount of wealth produced by them,
but bearing a proportion to it which is, in their own estimation,
sufficient. This demand made by the exceptional producer rests on
exactly the same basis as does that of the average customer. It rests on
the tastes and characters of the men who make it; and it is just as
impossible for the many to decide by legislation that the few shall put
forth the whole of their exceptional powers for the sake of one reward,
when what they want is another, as it is for the few to make the many
buy snuff when they want tobacco, or buy green coats when they want

That such is the case will, to those who may be inclined to doubt it,
become more evident if they consider with more attention than they are
generally accustomed to exercise what the main attraction of great
wealth is for the men who in the modern world are the producers of it on
the greatest scale. Socialists and similar reformers--the people who
principally busy themselves with discussing what this attraction is--are
the people who are least capable of forming any true opinion about it.
They not only have, as a rule, no experience of wealth themselves, but
they are further generically distinguished by a deficiency of those
powers that create it. They are like men with no muscles, who reason
about the temperament of a prize-fighter; and their conception of what
wealth means for those who produce and possess it is apt, in
consequence, to be of the most puerile kind. It is founded, apparently,
on their conception of what a greedy boy, without pocket-money, feels
when he stares at the tarts lying in a pastry-cook's window. To them it
seems that the desire for great wealth means simply the desire for
purely sensual self-indulgence--especially for the eating and drinking
of expensive food and wine. Consequently, whenever they wish to
caricature a capitalist they invariably represent him as a man with a
huge, protuberant stomach. The folly of this conception is sufficiently
shown by the fact that many of the greatest of fortune-makers have, in
their personal habits, been abstemious and even niggardly to a degree
which has made them proverbial; and that, even in the case of those who
value personal luxury, the maximum of self-indulgence which any single
human organism can appreciate, is obtainable by a hundredth part of the
fortunes for the production of which such men work. The real secret of
the attraction which wealth has for those who create it lies in the fact
that wealth is simply a form of power. These men are made conscious by
experience, as less gifted men are not, that they can, by the exercise
of their own mental energies, add indefinitely to the wealth-producing
forces of the community. They feel the machine respond to their own
exceptional management of it; they see the output of wealth varied and
multiplied at their will; and thus the results of their specialised
power as producers are neither more nor less than this same internal
power converted into an external, an indeterminate and universalised
form; and the reason why they will never produce wealth merely in order
to be deprived of it is that no one will exercise power merely in order
to lose it, and allow it to pass into the hands of other people. These
men, as experience, especially in America, shows us, are constantly
willing to use this power for the benefit of their kind generally; but
this is no more a sign that they would be willing to allow it to be
forcibly taken from them than the fact that a man is willing to give a
shilling to a beggar in the street is a sign that he would allow the
beggar to steal it out of his waistcoat-pocket.

So long as differences in personal power exist, especially in such power
as affects the material circumstances of mankind, these differences in
power, let governments take what form they please, will necessarily
assert and embody themselves in the very structure of human society;
and socialists are only able to obscure this fact from anybody either by
a childish theory of modern production which they themselves are now
repudiating, or else by a psychology even more laboriously childish,
which would at once be exposed were it tested by so much as six months'
experience. An interesting admission of the truth of this may be found
in an unlikely place--namely, a work written some years ago by a
socialist of considerable talent, which shows how the errors of at least
a number of socialists are due, not to any defect in their reasoning
powers, as such, but to a want of balanced knowledge of human nature in
general, a want which in certain respects renders their reasoning
futile. The work to which I refer is a work by a socialistic novelist,
who was also an accomplished naturalist--the late Mr. Grant Allen. It is
called _The Woman Who Did_.

The immediate object of the writer was to exhibit the institution of
marriage as the cause of what he was pleased to regard as woman's
degradation and slavery; and his heroine is a young lady of highly
respectable parentage, who proposes to regenerate womanhood by living
with, and having children by, a man, without submitting to the
humiliation of any legal bond. She accomplishes her purpose, and has a
daughter, whose position, under our false civilisation, becomes so
disagreeable in consequence of her illegitimate birth, that the mother
at last commits suicide, in order to deliver her from the presence of
such an embarrassing parent. In the author's view she is a martyr, and a
model for immediate imitation. Ludicrous, however, as the book is in its
main scheme and in its object, the author shows great acuteness in a
number of his incidental observations. He is, for example, constantly
insisting on the fact that the institution of private property, which
socialism aims at revolutionising, is merely one embodiment of a general
principle of individualism of which marriage and the family are another,
and that the two stand and fall together. But an admission yet more
important than this is as follows: So that nothing may be wanting to the
bitterness of the heroine's sublime martyrdom, the author represents her
daughter--and he does this with considerable skill--as developing from
her earliest childhood all those tastes and prejudices (an instinctive
sympathy with those ordinary motives and standards) against which the
mother's whole life, and her education of her daughter, had been at war.
"Herminia," says Mr. Allen, "had done her best" to indoctrinate the
child with the pure milk of the emancipating social gospel; "but the
child herself seemed to hark back, of internal congruity, to the lower
and vulgarer moral plane of her remoter ancestry. There is," he
proceeds, "no more silly and persistent error than the belief of parents
that they can influence to any appreciable degree the moral ideas and
impulses of their children. These things have their springs in the
bases of character; they are the flower of individuality; and they
cannot be altered after birth by the foolishness of preaching." Let us
read this passage, with the alteration of only a word or two, and it
forms an admirable criticism of the more recent speculations of the
party to which Mr. Allen belonged. There is no more silly and persistent
error on the part of socialists than the belief that they can influence
to any appreciable degree the moral ideas and impulses of the citizens
of any community, or that these things, which are the flower of
congenital individuality, can be altered after birth by the foolishness
of socialism.

But the arguments at the service of socialism are not exhausted yet.
Even if voting majorities should be unable to transform human nature,
that men of power shall become willing to exert their power only in
order that they may be deprived of it, there is a class of socialists
who declare that what is impossible with mere human democracy, will be
rendered possible by the divine influence of a rightly preached
Christianity. To Christian socialists, as such, I have as yet made no
special reference; nor will it be necessary now to be very prolix in our
dealings with them; but in their attitude and their equipment for the
task of effecting an economic revolution, they throw so strong a light
on the character of contemporary socialism generally that a brief
consideration of their gospel will be interesting and highly
instructive, and will fitly lead us to the conclusion of this part of
our argument.


[15] Mr. G. Wilshire, in his criticism of the argument, as stated by me
in America, says that, under the existing system, the consumer is _not_
free to choose what goods he will buy, but has them thrust on him by the
capitalist producer. Yet he, and socialists in general, complain at the
same time of the competition between capitalists, which is simply a
competition to supply what consumers most desire. Here and there, when
no competition exists, one firm can force its goods, if they are of the
nature of necessaries, on the local public. But under the existing
system this is only an occasional incident. Under socialism it would be
universal. When tobacco is a state monopoly, state tobacco is forced on
the great mass of the people.

[16] Mr. G. Wilshire admits, on behalf of socialists, that the argument
of this chapter is so far correct that no democracy can make men of
ability exercise their ability if they do not wish to do so; and that if
they wish for exceptional rewards they will be able to demand them. A
Melba, he says, under socialism, would be able, if she wished for it, to
get probably even higher remuneration than she does to-day. But, he
continues, under socialism, such men and women, though they could get
such rewards, will be so changed that they will not wish for them. A
Melba will then sing for the mere pleasure of singing.



Christian socialism, as a doctrine which is preached to-day, might, for
anything that its name can tell us to the contrary, be as different from
ordinary socialism as is Christian Science from secular--as the science
of Mrs. Eddy is from the science of Mr. Edison. We can judge of it only
by examining the utterances of its leading exponents. For this reason,
although I had long been familiar with the utterances of persons who
call themselves Christian socialists in England, I felt bound to decline
an invitation to discuss the subject in America, unless I could be
furnished with some recent and formal version of the gospel as it is
preached there. Accordingly there was sent to me the precise kind of
document I desired. It formed the principal article in a journal called
_The Christian Socialist_. Its author was a clergyman,[17] and it was
entitled "The Gospel for To-day." It was what I expected that it would
be. It reproduced in almost every particular the thoughts and moods
distinctive of Christian socialists in England; and this article I will
here take as a text.

The writer, exhibiting a candour which many of his secular brethren
would do well to imitate, starts with an attack on all existing forms of
democracy, which are all, he says, based on a profound and fatal
fallacy. This is the assumption that all men are born equal, from which
assumption the practical conclusion is deduced that the best state of
society is one which will allow each of these so-called equal beings to
work out his own happiness as best he can for himself, with the minimum
of interference from his fellow-citizens or from the law. Now if, says
our author, men were born equal in reality, such an individualistic
democracy might perhaps work well enough. But men are not born equal.
The root of the difficulty lies here. In the economic sense, as in all
others, some men are incomparably more able than the great majority of
their fellows, and even among the exceptionally able some are much abler
than the others. Consequently, if the principles of modern
individualistic democracy and modern individualistic economics are
right, according to which the main motive of each should be to do the
best for himself with his own powers that he can--"if it is duty to
compete if competition is the life of trade, then the battle for self
must ever go grimly on. The strong must subdue the weak, the rich the
poor, the able the unable. Upon this basis the millionaire and the
multi-millionaire have a perfect right to roll up their untold millions,
even as the working-man has a right to seek the highest wages that he
can get. All in different ways are seeking their own; and the keenest
competitors are the best men. The prizes must go to the strongest and
the shrewdest. It is the survival of the fittest."

Such being the case, then, asks the writer, what does Christian
socialism aim at? It does not aim at making men equal in respect of
their ability, for to do this would be quite impossible; but it aims at
producing an equality of a practical kind, by inducing the men whose
ability is most efficient to forgo all personal claims which are founded
on their own exceptional powers, so that the wealth which is at present
secured by these powers for themselves may in the future be divided
among the mass of their less able brethren.

Thus the crucial change which the Christian socialists would accomplish
is identical with that contemplated by their secular allies or rivals.
But the more completely it is invested with a definitely religious
quality, the more lopsided, unstable, and self-stultifying is this
change seen to be; the more obvious becomes the absurdity of proposing
to reorganise the entire business of the world on the basis of a
conversion _de luxe_ which is to be the privilege of the few only,
while the many are not only debarred, from the very nature of the case,
from practising the renunciation in which the few are to find eternal
life, but are actually urged to cherish their existing economic
concupiscence, and raise it to a pitch of intensity which it never has
reached before. The competent, to whose energies the riches of the world
are due, are to put these riches away from them as though they were food
offered by the devil. The incompetent, with thankless but perpetually
open mouths, are to swallow this same food as though it were the bread
from heaven. In other words, according to our Christian socialist, the
sin against the Holy Ghost, which is involved in the enjoyment of
riches, is not the enjoyment of material superfluities itself, but only
the enjoyment of them by men who have been at the trouble of producing

That this is what the message of Christian socialism comes to, little as
those who deliver it realise the fact themselves, is shown by an
illustration obtruded on us by the author of "The Gospel for To-day."
The evils of the existing situation, and its remoteness from the Kingdom
of Christ, are, he says, exemplified in a very special way by the
present position of the clergy. "If we churchmen," he says, "want money
for our own purposes, we have to go to the trust magnates and kneel. We
have to kneel to 'the steel kings and the oil kings,' merely because
they are rich men." Now, how would Christian socialism alter a state of
things like this? Let us consider precisely what it is that our
Christian socialist complains about. He obviously does not mean that he
and his brother clergymen have to approach the trust magnates on their
knees. The utmost he can mean is that, if they want these men to give
them money, they have to ask for it as a gift, and presumably make, when
it is given, some acknowledgment to the donors. This it is which
evidently sticks in the stomach of the humble follower of Christ whose
self-portraiture we are now considering; for, if we confine ourselves to
the Christian element in his teaching, he proposes to alter the existing
situation only by kindling in the "trust magnates" such a fire of
Christian philanthropy that they will have given him all he wants before
he has had time to ask for it, thus exonerating him from the duty of
saying "Thank you" for what he owes to another's goodness, and enabling
him to offer to the Lord that which has cost him nothing.

And what the author of "The Gospel for To-day" urges on behalf of
himself and his clerical brethren is precisely what he urges on behalf
of the less competent majority generally. Neither on them nor on the
Christian clergy does the gospel of Christian socialism urge the duty of
making any new sacrifice, or any new exertion, moral or physical, for
themselves. Just as the clergy are to learn no more of business than
they know now, but are to be relieved of the necessity for all prudence
as to ways and means, so is the ordinary labourer to work no longer, no
harder, and no better than he does now. On the contrary, his hours of
labour are to become ever less and less, and at the same time he is to
receive ever greater and greater wages. These are to be drawn from the
products, not of himself but of his neighbour: and although he will owe
them solely to the virtue which his neighbour exercises, he is,
according to the Christian socialist programme, to demand them as though
his own incompetence gave him a sacred right to them.

Now, apart from the fact that this gospel does resemble the Christian in
declaring that, while salvation can be achieved only by sacrifice, and
that so far as the majority are concerned their sacrifice must be
strictly vicarious, we might well pause to inquire how either of its two
messages--that of economic asceticism for the few, and of economic
concupiscence for the many--has any relation to the gospel of Christ at
all. According to any reasonable interpretation of the words and spirit
of Christ, a labourer's desire to enjoy the utmost that he himself
produces is no less legitimate than natural; but it hardly ranks as one
of the highest Christian virtues. How, we might ask, is it to acquire
this latter character by being turned into a desire for what is produced
by other people? Again, on the other hand, though according to most of
the churches Christ did not condemn the possession of superfluous wealth
as such, he certainly did not teach that the possession of it was
generally necessary to salvation. It might therefore be justly urged,
from the point of view of the few, that in proportion as Christ's
valuation of this transitory life was accepted by them, the duty of
melting down their own vases and candelabra in order that every
workman's spoon might have a thin plating of silver on it, would
constantly seem less and less, instead of more and more imperative. All
this might be urged, and more to the same effect; but we will content
ourselves with considering the matter under its purely practical aspect,
and asking how any Christian clergymen--men presumably sane and
educated--can propose, whether their programme be really Christian or
no, to reorganise society on the basis of a moral conversion which is
confined to the few only--which would exact from the able minority the
maximum of effort and mortification, and secure the maximum of idleness
and self-indulgence for the rest of the human race?

To this question it may be said that there are two answers. Admirable in
character as are multitudes of the Christian clergy, nobody will contend
that all of them are beyond reproach; nor will any such claim be made
for all those of them who profess socialism. And for some of this body
it is hardly open to doubt that the preaching of socialism is nothing
better than a species of ecclesiastical electioneering. In the language
of the political wire-puller, it affords them a good "cry" with which to
go to the people. Why, they say in effect, should you listen to the
agitator in the street, when we can give you something just as good from
the pulpit? What the message really means which they thus undertake to
deliver, they make no effort to understand. It will attract, or at least
they think so; and for the moment this is enough for them. Having
probably emptied their churches by talking traditional nonsense, they
are willing to fill them by talking nonsense that has not even the merit
of being traditional. We will not linger, however, over the case of men
like these. We will turn to that of others who are morally very much
more respectable, and whose condition of mind, moreover, is very much
more instructive. Of these we may take the author of "The Gospel for
To-day" as a type. He, we may assume, advocates his socialistic
programme, not because he thinks that to do so is a shrewd clerical
manoeuvre, but because he honestly believes that his programme is at
once Christian and practicable. How does it come about, then, that an
educated man like himself can believe in, and devote himself to
preaching, doctrines so visionary and preposterous? Let us examine his
arguments more minutely, and we shall presently find our answer.

By his vigorous denunciation of the doctrine that all men are born
equal, he shows us that he is capable to a certain extent of seeing
things as they are. But he sees them from a distance only, as though
they were a range of distant mountains whose aspect is falsely
simplified and constantly changed by clouds, and of whose actual
configuration he has no idea whatever. Thus when he contemplates the
inequalities of men's economic powers, these appear to him alternately
in two different forms--as genuine powers of production and as powers of
mere seizure--without his discerning where in actual life the operation
of the one ends and the operation of the other begins: and, though for a
certain special purpose he admits, as we shall see presently, that some
able men are able in the sense of being exceptionally productive, his
thoughts and his feelings alike through the larger part of his argument
are dominated by the idea that ability is merely acquisitive. This is
shown by the fact that the two great productive enterprises which he
singles out as typical of modern wealth-getting generally are held up by
him as examples of acquisition pure and simple. "The steel kings," he
says, "did not invent steel. The oil kings did not invent oil." These
are the gifts of nature, which nature offers to all; but the strong men
abuse their strength by pushing forward and seizing them, and compelling
their weaker brethren to pay them a tribute for their use. Steel and
refined oil he evidently looks upon as two natural products. He has no
suspicion that, as any school-boy could have told him, steel is an
artificial metal which, as manufactured to-day, is one of the most
elaborate triumphs of modern industrial genius. As to the oil by the
light of which he doubtless writes his sermons, he apparently thinks of
it as existing fit for use in a lake, and ready to be dipped up by
everybody in nice little tin cans, if only the oil kings having got to
the lake first, did not by their superior strength frighten other people
away. Of the actual history of the production of usable oil, of the vast
and marvellous system by which it is brought within reach of the
consumers, of the by-products which reduce its price--all of them the
results of concentrated economic ability, and requiring from week to
week its constant and renewed application--the author of "The Gospel for
To-day" apparently knows nothing. The oil kings and the steel kings,
according to his conception of them, need merely refrain from the
exercise of their only distinctive power--that is to say, an exceptional
power of seizing; and every Christian socialist in New York and
elsewhere will have the same oil in his lamps that he has now, and a
constant supply of cutlery and all other forms of hardware, the sole
difference being that he will get them at half-price or for nothing, and
have the money thus saved to spend upon new enjoyments. And his
conception of ability, as connected with the output of steel and oil, is
his conception of ability as applied to the production of goods

He makes, however, one exception. There is, he admits, one form of
ability which does actually add to the wealth of the modern world, and
may possibly be credited with producing the largest part of it. This is
the faculty of invention. Here, at last, we seem to be listening to the
language of sober sense. But let us see what follows. Inventors, our
author proceeds, being the types of exceptional ability which is really
beneficent and productive, are precisely the men who afford us our
surest grounds for believing in the possibility of that moral conversion
which socialism proposes to effect among able men at large. For what, he
says, as a fact do we find the inventors doing? They invent, he says,
for the pure love of inventing, or else from a desire to do good to
their fellow creatures. The thought of money for themselves never enters
into their minds. The selfish desire for money makes its appearance only
when the strong man whose ability is merely acquisitive thrusts himself
on the scene, buys the inventors' inventions up, and then proceeds "to
work them for all they are worth." These mere seizers of wealth, these
appropriators of the inventions of others, need but to learn a lesson of
abnegation which the inventors have learned already, or rather a lesson
which is easier; for while these noble men, the inventors, have no wish
to take what they produce, the majority of able men, such as the steel
kings and the oil kings, need merely forbear to take. Competition, in
short, as it actually exists to-day--the competition which Christian
socialism will abolish--is simply a competition in taking; and in order
to abolish it, the strong men, when they have taken a fair share, have
but to stand aside, to become as though they were weak, and so give
others a chance equal to their own.

Here, indeed, we have a conception, or rather a vague picture, of the
facts of modern industry, and of human nature as connected with it,
which is worthy of a man from dreamland. Every detail mentioned is
false. Every essential detail is omitted. In the first place, the
disinterested inventor, from whose behaviour our author reasons, is
purely a figment of his own clerical brain. Inventors in actual life, as
every one knows who has had occasion to deal with them, are generally
distinguished by an insane desire for money, by the wildest
over-estimates of the wealth which their inventions will ultimately
bring them, or by a greed which will sell them for a trifle, provided
this be paid immediately. In the second place, inventions, even the
greatest, so long as they represent the power of invention merely, are
utterly deficient in all practical value. So long as they exist nowhere
except in the author's brain, or drawings, or in descriptions, or even
in the form of models, they might, so far as the world is concerned,
have never existed at all. In the former cases they are dreams; in the
last case they are toys. They are brought down into the arena of actual
life only when, like souls provided with bodies, they cease to be ideas
or toys, and become machines or contrivances manufactured on a
commercial basis; and in order to effect successfully this practical
transformation, countless processes and countless faculties are involved
other than those comprised in intellectual invention itself.

There are cases, no doubt, in which the practical talents necessary for
realising an invention and the faculty of invention itself coexist in
the same man; but the inventor, when this happens, is not an inventor
only. He is not only a master of ideas; he is a master of things and
men. Such a combination is, however, far from common. As a rule, if his
inventions are to be of any use to the world, the inventor must ally
himself with men of another type, and these are the very men whom the
author of "The Gospel for To-day" conceives of as simply monopolising
and "working for all they are worth" contrivances which would otherwise
have been given to the world gratis. He does not see that, if men such
as the steel kings and the oil kings did not work inventions for all
they are worth, the inventions themselves would be practically worth

Let the reader reflect on the astounding ignorance of the world, and
especially of the world of industry, which is betrayed with so much
naïveté by this socialist of the Christian pulpit. He knows so little of
the commonest facts of history that he looks upon steel as a ready-made
product of nature, and all the mills of the steel trust as merely a
means of monopolising knives, bridges, rails, and locomotive-engines,
which the citizens of America would otherwise be able to take at will,
like a bevy of school-children helping themselves from a heap of apples.
He imagines that inventions, as they form themselves in the head of the
inventor, leap direct into use, without any intervening process; while
the inventor himself is a being so superior to the world he works in,
that the rapture of being allowed to work for it is the only reward he
covets, that he has never dreamed of such selfish things as profits, and
does not even know the meaning of a patent or a founder's share; and
that the oil kings and the steel kings and all other able men, will save
society by following in the footsteps of this chimera.

Such are the wild, childish, and disconnected ideas entertained by our
clerical author of the world which he proposes to reform; and he is in
this respect not peculiar. On the contrary he is a most favourable type
of Christian socialists generally; and Christian socialists, in respect
of their mental and moral equipment, are simply secular socialists of
the more modern and educated type, with their ignorances and credulities
accentuated, but not otherwise altered, by the solemnities of religious
language, and a vague religious sentiment which achieves a facile
intensity because it is never restrained by fact.

Socialists, in short, of all schools, are socialists because they are
ignorant of, or fail to apprehend, certain facts or principles of nature
and of human nature which are essential to the complicated process of
modern productive industry; or it is perhaps a truer way of putting the
case to say that they could not be socialists unless they were thus
ignorant. In this they resemble the devisers of perpetual motions, or
scientific and infallible systems for breaking the bank at a
roulette-table. In so far as they are socialists--that is to say, in so
far as they differ from other reformers--they are men aiming at
something which is in its nature impracticable; and in order to
represent it to themselves and others as practicable, they must
necessarily ignore or fail to understand something which, in actual
life, stands in the way of its being so. The perpetual-motionist
believes that a perpetual motion is practicable, because he fails to see
that out of no machine whatever is it possible to get more force than is
put into it, and that one pound-weight will not wind up another. The
system-monger sees that if a succession of similar stakes are placed on
red or black, or any one of the thirty-six numbers, the bank always has
zero in its favour; but by placing a number of stakes simultaneously in
intricate combinations, or by graduating them according to results, he
imagines that he can invert the situation, when all he can do is to
disguise it. He often disguises it most effectually; but in the long run
he does no more. Like a protuberance in an air cushion, which if pushed
down in one place reappears in another, the original advantage of the
bank infallibly ends in reasserting itself. The system-monger fails to
see this for one reason only--that, having disguised, he thinks that he
has eliminated, a fundamental fact of the situation. Socialists, in so
far as they are socialists, reason in the same way. Though most of them
now recognise, like the author of "The Gospel for To-day," that the
economic efficiencies of men are in the highest degree unequal, they
propose out of an inequality of functions to produce an equality of
conditions. The details of the changes by which they propose to effect
this result, or the grounds on which they seek to represent this result
as possible, vary like the details of the systems of ingenious gamblers.
But whatever these details may be, whether they are details of scheme or
argument, the essential element of each is the omission of some
fundamental fact--or, rather, of one protean fact--by which socialistic
thinkers are often honestly confused, because it assumes, as they shift
their positions, any number of different aspects. This is the fact that
out of unequal men it is absolutely impossible to construct a society of

Two illustrations, taken from the history of socialistic thought, will
show how socialists hide this fact from themselves, first by a fallacy
of one kind, then by a fallacy of another kind; and how, wherever it is
located, it is the essential factor in their argument.

In their endeavour to prove the possibility of an equalisation, absolute
or approximate, of economic conditions, Karl Marx and the earlier
socialists started with two main doctrines. The one was a moral
doctrine; the other was an economic. The moral doctrine was that, as a
matter of eternal justice, every man has a right to the whole of what is
produced by him. The economic doctrine was that, as a matter of fact,
the only producers of wealth are the mass of manual labourers, and
that, with certain unimportant exceptions, the economic values produced
by all labourers are equal. Hence he argued that all wealth ought to go
to the labourers, and that all labourers were entitled to approximately
equal shares of it. The later socialists aim at reaching the same
conclusion, and they start with two doctrines, a moral and an economic,
likewise. Having arrived, however, at a truer theory of
production--having recognised that labour is not the sole producer, and
that some men produce incalculably more than others--they have, in order
to support their demand for an equality of possession, been obliged to
supplement their repudiation of the economic theory of their
predecessors, by repudiating their theory of eternal justice also, and
introducing another of a wholly opposite character. While Karl Marx
contended that, in justice, production and possession were inseparable,
the later socialists contend that there is no connection between them,
and that it is perfectly easy to convert to this moral view every human
being who is likely to suffer by its adoption. Thus the difference
between the earlier and the later socialists is as follows: The earlier
socialists started with a theory of justice which is in harmony with
common-sense and the general instincts of mankind; and this theory was
pressed into the service of socialism only by being associated with a
false theory of production. The later socialists start with a truer
theory of production; and they reconcile this with their own practical
programme, only by associating it with a false moral psychology. In each
case a fallacy is the basis of the socialistic conclusion; and without a
fallacy somewhere--a fallacy which is pushed about, like a mouse under a
table-cloth--no socialistic conclusion even tends to develop itself from
the premises.

And what is true of the main arguments of the later, as of the earlier
socialists, is equally true of their subsidiary arguments also, from
those which refer to the generalisations of the sociologists of the
nineteenth century, and base themselves on the confusion between
speculative truth and practical, down to those which are drawn from the
absurd psychological supposition that all motives are interchangeable,
and that those which actuate the artist, the anchorite, and the soldier
can be made to replace by means of a vote or a sermon those which at
present actuate the masters of industrial enterprise. On whatever
argumentative point the socialists, as socialists, lay stress, there,
under one form or another, their root-fallacy reappears. In short, their
arguments are illusionary in proportion as they themselves value them.
And in this there is nothing wonderful. The more logically and
ingeniously men reason from premises, of which the one most essential to
their conclusions is radically false to fact, the more punctually on
every critical occasion is this fallacy bound to reassert itself as the
logical basis of that which they desire to prove.

The question, however, still remains to be answered of why a large body
of men, like the educated apostles of socialism, who exhibit as a class
no typical inferiority of intellect, unite in accepting, as though drawn
to it by some chemical affinity, one particular error which
dispassionate common-sense disdains, and which the actual history of the
whole human race refutes? In the case of some preachers of socialism the
answer lies on the surface. Socialism is of all creeds that which it is
easiest to present to the ignorant; and in these days, like "patriotism"
in the days of Dr. Johnson, it is often "the last refuge of a
scoundrel," or of a desperate and ambitious fool. But I here put such
cases altogether aside. What I here have in view are men who are morally
and intellectually honest, and many of whom, indeed, are intellectually
above the average. How is the affinity for one common error, and the
passionate promulgation of it in forms, many of which are conflicting,
to be accounted for in the case of men like these?

The answer to this is to be found, not in their intellect, but in their
temperament. It is a well-known fact that men, otherwise of high
capacity, are incapable of mastering any but the humblest branches of
mathematics. With the men who become socialists the case is closely
similar. Just as certain men are incapable of dealing with the
abstractions of mathematics, so are the socialists men who, in virtue of
their constitutions or temperaments, are incapable of comprehending
accurately the concrete facts of life, and are consequently as unable
with any practical accuracy, to reason about them as a professor of
mathematics would be to reason about the value of strawberries, if he
knew only their weights or numbers, but had no expert judgment with
regard to their condition or quality.

To ascertain how the socialistic temperament thus debilitates the
faculties, it will be enough to note certain characteristics distinctive
of those possessing it. Such persons are all distinguished, though
naturally in various degrees, by an undue preponderance of the emotional
over the critical faculties, whence there arises in them what, to borrow
a phrase of President Roosevelt's, we may aptly call an _inflammation_
of the social sympathies. This makes such persons magnify into
intolerable wrongs all sorts of pains and inconveniences which most men
accept as part of the "rough and tumble" of life; and it thus renders
them abnormally impatient of the actual, and abnormally preoccupied with
the ideal. The ideal vision which they see arising out of the actual is
for them so illuminated, as though by a kind of limelight, that the
details of the actual, thrown into comparative obscurity, either cannot
be minutely distinguished by them, or, like the words of an unwelcome
talker, cannot fix their attention. Without habitual concentration of
the attention on the subject-matter with which reason deals, no
reasoning can deal with it to any practical purpose; and men of that
class from which socialists of the higher kind are recruited, are men
who fail to understand the modern industrial process, because they are
hindered by their temperament from giving a sufficient attention to its
details. They derive from them vivid impressions, but no practical
knowledge, like Turner when he painted a train swathed in its own
vapour, and flushing the wet air with the fires of its lamps and
furnace. From a study of Turner's picture of "Rain, Steam, and Speed,"
it would be impossible for any human being to conjecture how a
locomotive was constructed. It would be still more impossible to form
any judgment as to how its slide-valves, or its blast, or the tubes of
its boiler might be improved. It is similarly impossible for men of the
socialistic temperament to understand the general process of industry,
or to judge how it can and how it can not be altered, from the purely
spectacular impressions which its intricate parts produce on them.

But the ingrained inability of such men to understand that which they
would revolutionise does not reveal itself in their errors of theory
only. It reveals itself still more strikingly in their own relations to
life. If we allow for exceptional cases, such as that of Robert Owen,
who was in his earlier days a competent man of business, we shall find
that the theorists who desire to socialise wealth are generically
deficient in the higher energies that produce it. Though they doubtless
could, like most men who are not cripples or idiots, make a living by
some form of manual labour, they have none of them done anything to
enlarge the powers of industry, or even to sustain them at their present
pitch of efficiency. They have never made two blades of grass grow where
one blade grew before. They have never applied chemistry to the
commercial manufacture of chemicals. They have never organised the
systems or improved the ships and engines by which food finds its way
from the prairies to the cities which would else be starving. If in some
city or district an old industry declines they demand with tears that
the thousands thus thrown out of employment shall be set by the state to
do or produce something, even though this be a something which is not
wanted by anybody. They never set themselves to devise, as was done in
the English Midlands, some new commodity, such as the modern bicycle,
which was not only a means of providing the labourers with a
maintenance, but was also a notable addition to the wealth of the world
at large. They fail to do these things for the simple reason that they
cannot do them; and they cannot do them because they are deficient alike
in the interest requisite for understanding how they are done, and in
the concentrated practical energy which is no less requisite for the
doing of them.

At the end of an address in which I had been dealing with this subject
at New York, a young man, one of my hearers, told me that I had been
putting into words what had long been borne in on himself by his own
studies and observations--the fact, namely, that the social leaders of
men are divided into two classes, _those who dream about reforming the
industrial business of the world, and those, an opposite type, who alone
advance and accomplish it_. Here we have the conclusion of the whole
matter. These two classes are contrasted, not because in mere intellect
one is inferior to the other, but because when they are dealing with the
industrial affairs of life these affairs appeal to them in two
contrasted ways. One of these classes takes men and nature as they are.
With the utmost minuteness it masters the secrets of the latter, with
the utmost minuteness it directs the actions of the former; and in
seeking wealth for itself it brings about those conditions which alone
can make added wealth a practical possibility for all. The other class,
occupied not with what is but what ought to be, fails to understand what
can be, because it does not understand what is. The men of whom this
class is composed--the men whose temperamental deficiency now finds its
fullest expression in socialism, as it did formerly in theories of
ultra-democratic individualism, are like amateur architects, and amateur
sanitary engineers, who, thinking in pictures, and having no knowledge
of structure, condemn existing houses and existing systems of drainage,
and would replace them with palaces which no builder could build, with
arches which would collapse from the weight of their own materials, and
magnificent cloacæ the waters in which would have to run uphill.

The theory, then, of socialism, let it take what form it will--the
theory which represents as practicable by one device or another the
social equalisation of economically unequal men--is a theory which, in
minds which are intellectually honest, can develop itself only in
proportion as these minds are incapable of grasping in their connected
completeness the actual facts of life; and that such is the case has
been illustrated in the preceding chapters by a systematic analysis of
all the crucial arguments on which socialists have rested their case
from the earliest day of socialistic thought to the latest.

The reader, however, must observe the manner in which this statement is
qualified. In speaking of the arguments of the socialists, I speak of
those that are crucial only--that is to say, of those arguments used by
socialistic thinkers in support of their programme in so far as that
programme is peculiar. It is necessary to note this because, as a matter
of fact, with such of their arguments as are proper to socialism only,
the philosophers of socialism and their disciples frequently associate
others which are not peculiar to the socialistic scheme at all, but
which nevertheless multitudes of men who call themselves socialists
regard as being at once the most important and practicable parts of it;
and these I have in consequence reserved for separate treatment. They
are three in number, and are as follows:

The first relates to the remuneration of the ordinary manual labourer,
and deals with the question of what his just remuneration is. According
to Marx this question is easily settled. Of every thousand labourers
associated in any given industry, each produces, with few and
unimportant exceptions, a thousandth part of the whole exchangeable
product; and his just remuneration is a thousandth part of the value of
it. The intellectual socialists of to-day, while repudiating as we have
seen the doctrine that the labourer's claim to remuneration is limited
to the values produced by him, and contending that he has a further
right to the product of the ability of others, constantly declare that,
even according to the moral standard of Marx, he is usually defrauded at
present of a large part of his due; or that, in most if not all
industries, his wages represent but a part of the full value produced by
him. Whether this is so or not is a question not of theory but of fact,
and one which can only be answered by discovering some intelligible
basis on which the values produced by labour in a general way may be
estimated, as distinct from those produced by effort of other kinds.
With this question I shall deal in the following chapter.

The second relates to those forms of individual income which are covered
by the word interest, when used in a comprehensive sense. It being
admitted by the later socialists, in opposition to the earlier, that the
directive ability of the few is, in the modern world, a productive
agency no less truly than labour is, many of these socialists are now
anxious to concede that the man of ability is entitled to such values,
no matter how large, as are due to the active exercise of his own
exceptional powers; but they contend that, as soon as his personal
activity ceases, his claim to any influx of further wealth should
therewith cease also. Let him spend his accumulations, they say, on his
own gratifications as he will; but neither he nor his descendants can be
suffered in moral justice to hold or apply them in such a manner that
they will renew themselves, and yield an income to recipients who do
nothing to make them fructify. To numbers of people who repudiate most
of the socialistic programme, this doctrine as to interest appeals as at
once just and practicable. If the state could appropriate all incomes
due to interest, as distinct from those which represent the product of
active ability, an enormous fund would, they think, be available for
general distribution, and the ideals of socialism, in so far as they are
practicable or desirable, might thus be realised by other than
socialistic means. This argument, likewise, will have its own
chapter--or rather two chapters--allotted to it.

The third of these arguments or proposals which, though not in
themselves socialistic, are popularly associated with socialism, relates
to equality of opportunity. To this also I will devote a separate


[17] While these pages were being corrected for the press, a number of
utterances have been made by English clerics--Episcopalian and
Nonconformist--precisely similar in purpose and spirit to those of the
author here quoted.



Since the educated socialists of to-day admit that in the modern world
wealth is produced by two functionally different classes--a majority who
labour and a minority by whom this labour is directed; or by two
different faculties--namely, labour and directive ability--the question
of how much of the total product or its value is produced by one class
or agency, and how much by the other, is, for all social reformers, and
not for socialists only, a question of the first importance; for in the
minds of numbers, who care little about ideal transfigurations of
society, the doctrines of socialism leave one vivid conviction, which is
this--that, though the labourers in the modern world do not produce
everything, though the ability of those directing them is a productive
agent also, and though part of the wealth of modern nations is
undoubtedly produced by this, yet the men of ability produce much less
than they manage to keep, while the labourers produce much more than is
represented by the wages which they get; that labour in this way, even
if in no other, is suffering at present a general and intolerable wrong;
and that socialism is simply a system by which this wrong will be

Now, this alleged wrong is essentially an affair of quantity. If the
products of any typical firm--one, let us say, which produces
chemicals--are represented by the number a hundred, and if fifty
represents the amount which at present is the share of labour, the rest
being taken by men of directive ability--a picked body of organisers,
chemists, and inventors--labour, it is contended, produces more than the
fifty, which is all that it at present gets. Yes; but how much more? It
is not contended that it produces the entire hundred. Does it produce,
then, sixty, or sixty-five, or seventy, or eighty-three, or what? Unless
such a wrong as this can have some extent assigned to it--unless it can
be measured approximately by reference to some intelligible standard--it
is not only difficult to deal with it; it is impossible to be sure that
it exists. Of course we are here not contemplating individual cases.
That some employés may, under existing conditions, get less than their
work is worth, is possible and likely enough. It is equally likely or
possible that others may get more. We must confine ourselves to what
happens generally. We must take labour as a whole, on the one hand, and
directive ability on the other, and ask how we may estimate, with rough
but substantial accuracy, the proportion of the joint product
respectively produced by each.

At first sight it may seem that this problem is incapable of any
definite solution; and some socialistic writers have done their best to
obscure it. The efficiency of labour, they say, is in the modern world
largely due, no doubt, to the action of directive ability; but ability
could produce nothing unless it had labour to direct; whence it is
inferred that the claim of labour on the product may in justice be
almost anything short of the absolute total. To this abstract argument
we will presently come back; but we will first examine another urged by
a celebrated thinker, which, though less extreme in its implications,
would, were it only sound, be even more fatal to our chances of arriving
at the conclusion sought for. The thinker to whom I refer is Mill, who
assigns to this argument a very prominent place in the opening chapter
of his _Principles of Political Economy_.

Certain economists have, so he says, debated "whether nature gives more
assistance to labour in one kind of industry than in another"; and he
endeavours to show that the question is in its very essence
unanswerable. "When two conditions," he proceeds, "are equally necessary
for producing the effect at all, it is unmeaning to say that so much is
produced by one, and so much by the other. It is like attempting to
decide which of the factors five and six contributes most to the
production of thirty." And if this argument is true of nature and
labour, it is equally true of labour and the ability by which labour is
directed. Thus a great ocean liner which, in Mill's language, would be
"the effect," could not be produced at all without the labour of several
thousand labourers; and it is equally true that it could not be produced
at all unless the masters of various sciences, designers, inventors, and
organisers, directed the labour of the labourers in certain specific
ways. Both conditions, then, being "necessary for producing the effect
at all," the portions of it due to each would, according to Mill's
argument, be indeterminable. Let us consider, therefore, if Mill's
argument is sound. We shall find that it is vitiated by a fallacy which
will, as soon as we have perceived it, show us the way to the truth of
which we are now in search. Let us begin with taking the argument as he
himself applies it.

He brings it forward with special reference to agriculture, and aims it
at the contention of a certain school of economists that nature in
agriculture did more than in other industries. To urge this, says Mill,
is nonsense, for the simple reason that though nature in agriculture
does something, it is impossible to determine whether the something is
relatively much or little. Let us, he says in effect, take the products
of any farm, which we may for convenience' sake symbolise as so many
loaves; and it is obviously absurd to inquire which produces most of
them--the soil or the farm labourers. The soil without the labourers
would produce no loaves at all. The labourers would produce no loaves if
they had not the soil to work upon.

Now, if there were only one farm in the world, and one grade of labour,
and if every acre of this farm, when the same labour was applied to it,
would always yield the same amount of produce--let us say one
loaf--Mill's argument would be true. The actual state of the case is,
however, very different. Acres vary very greatly in quality; and if we
take four acres of varying degrees of fertility, to all of which is
applied the same amount of labour, then, while from the worst of the
acres this labour will elicit one loaf, it will elicit from the others,
let us say, according to their degrees of fertility, two loaves, three
loaves, and four loaves respectively. Here the labour being in each of
the four cases the same, and the additional loaves resulting in three
cases only, it is obvious that the difference between the larger
products and the less is not due to the labour, but to certain
additional qualities present, in the three superior acres and not
present in the worst one. In other words, although in producing
loaves--or, as Mill describes it, "the effect"--the parts played by
labour and nature are indefinite and incommensurable so long as the
land, the labour, and the effect remain all three the same, the parts
become immediately measurable when the effect begins to vary, and one of
the causes, and only one of them, at the same time varies also.

This truth can be yet further elucidated by the very illustration which
Mill cities in disproof of it. It is absurd to ask, he says, whether the
number five or six does most, when they are multiplied together, to
produce "the effect" thirty. This is true so long as "the effect" thirty
is constant; but if on occasions the thirty is increased to forty, and
if whenever this happens the six has increased to eight, we know that
the extra ten which our multiplication yields us is not due to the five,
the number which remains unchanged, but to an extra two now present in
the number that was once six. Or again let us take as "the effect" the
speed of a motor-car which is raced over a mile of road. Unless two
conditions were present--the engine and some ground to run upon--the car
could not run at all; and if there were only one road and one car in
the world, it would be absurd to inquire how much of the speed was due
to the merits of the engine, and how much to the character of the road's
surface. But if, the car remaining unchanged, the surface of the road
was improved, and a speed was thereupon developed of thirty miles an
hour instead of twenty, we should, with regard to the increment, at once
be able to say that it was due to the surface of the road, and was not
due to the engine. Conversely, if the road were unchanged, but the car
had a new engine, and the speed under these conditions increased in the
same way, the increment would be evidently attributable to the engine
and not the road.

And the same observations apply to labour and directive ability,
whenever the operations of both are essential to a given product. If the
ability and the labour were always inevitably constant, and the product
as to quality and amount were similarly constant also, we could not say
that so much or so little of the effect was due to one cause, and so
much or so little to the other. If there were in the world only a
thousand shipwrights, and these men, working always under the same
director, always produced in a year one ship of an unchanging kind, we
could not say which of its parts or how much of its value were due to
the man directing, and which or how much were due to the men directed.
But if for one year this director were to retire and another was to take
his place, and, the same labourers being directed by this new master,
the result was the production not of one ship but of two; and if, when
the year was ended, and the old master came back again, the annual
product once more was not the two ships but one, we could then say, as a
matter of common-sense with regard to the year during which the two
vessels were built, that the second vessel, whatever might be the case
with the first, was due wholly to the ability of the master, and not to
the labour of the men. In other words, the ability of the director of
labour produces so much of the product, or of that product's value as
exceeds what was produced by the labourers before their labour was
directed by him, and would cease to be produced any longer as soon as
his direction was withdrawn.

That in the case of any result which requires separable causes for its
production, this method of allocating to these causes respectively so
much of the result and so much of it only, is a method always adopted in
all practical reasoning, may be seen by taking a result which is not
beneficial but criminal. Twenty Russian labourers, all loyal to the
Czar, are, let us say, employed to dig out a cellar under a certain
street, and to fill it with cases which ostensibly contain wine.
Subsequently, as the Czar is passing, he is killed by a huge explosion.
It then becomes apparent that the so-called cellar was a mine, and the
harmless-looking cases had really been filled with dynamite. Now, if all
those concerned in the consummation of this catastrophe were tried, it
is perfectly evident that the part played by the labourers would be
sharply discriminated from that played by the man employing them; and,
although they contributed something which was necessary to the
production of the result, it would certainly have been admitted by
General Trepoff himself that they had contributed nothing to its
essential and criminal elements. It is equally evident that the
increment of wealth which results from the obedience of labourers to
injunctions which do not emanate from themselves, is produced by the man
who gives the injunctions, and not by the men who obey them.

But here we must return to the argument, already mentioned in passing,
which may be restated thus: A thousand labourers, directed by their own
intelligence only, produce a product whose amount we will call a
thousand. The same labourers are directed by a man of ability, and the
product rises from one thousand to two. But if the production of this
second thousand is to be credited to the man of ability on the ground
that, were the ability absent, no second thousand would be produced, we
may reach by the same reasoning a conclusion precisely opposite, and
credit not only the first, but both the thousands to labour, on the
ground that, if the labour were absent, nothing would be produced at
all. The argument is plausible; and in order to understand its fallacy
we must give our attention to a fact, not generally realised, which is
involved in all practical reasoning about all causes whatsoever.

If we use the word "cause" in its strict speculative sense, the number
of causes involved in the simplest effect is infinite. Let us take, for
example, the speed of a horse which wins a race. Why does the speed of
this horse exceed that of the others? We may in answer point to
qualities of its individual organism. But these will carry us back to
all its recorded ancestors--sires and dams for a large number of
generations: and even so we shall have been taken but a small part of
our way. The remotest of these ancestors--why were they horses at all?
For our answer we must travel through the stages of organic evolution,
till we reach the point at which animal and vegetable life were one. Had
any of these antecedents been missing, the winning race-horse would not
have won the race. Nor is this all. We have to include in our causes
air, gravitation, and the fact that the earth is solid. No horse could
win on turf which was based on vapour. But by all the thousands who
witness a great race this whole mass of ulterior, though necessary,
causes is ignored. The only causes which for them have any practical
interest are those comprised in the organism of the winning horse
itself. Who would contend that this horse had not won its own victory,
on the ground that part of its own speed--a part which could not be
calculated--was contributed by the crust of the earth, or the general
constitution of the universe? Any one arguing thus would be howled down
as a madman. Now, why is this? Why would the common-sense of mankind, in
a practical matter like a race, instinctively exercise this kind of
eclecticism, concentrating itself on certain causes and absolutely
ignoring others? Such behaviour is not arbitrary. It depends on a
principle inherent in all practical reasoning whatsoever. Let us see
what this principle is.

When, with any practical purpose in view, we insist that anything is the
cause of anything else, or produces anything else, we are always
selecting, out of an incalculable number of causes, one cause or agency
which, under the circumstances in view, may or may not be present; which
a careless person may neglect to introduce; which an ignorant person may
be persuaded to take away; or a recognition of which will influence
human conduct somehow; while all other causes, which no one proposes to
take away, or which no one is able to take away, are assumed by all
parties, but they are not considered by anybody. Why should they be
considered? Not only are they so numerous that no intellect could deal
with them, but they have, since with regard to them there is no
difference of opinion, no place in any practical discussion at all. If a
ton of stone is to be placed on a piece of framework, men may reasonably
discuss whether the framework is strong enough to bear it, or whether
material is not being wasted in making it stronger than necessary. What
will happen without an additional girder? Or what will happen if we take
two girders away? Will the stone fall or not? These questions belong to
the domain of practical reasoning because to take a girder away, or else
introduce fresh ones, lies within the power of the disputants. But no
practical men would think of complicating the discussion by calculating
what would happen if they suspended the action of gravitation, in which
case the stone would need no support whatever; for to suspend the action
of gravitation is within the power of nobody. If two men are debating in
the middle of the night at midsummer whether there is enough oil in the
lamp to keep it alight till sunrise, they are debating a question of a
strictly practical kind: for it rests with them to put in more oil or
not. What will happen if they do not? That is the point at issue. But
they neither of them would debate what would happen if the movement of
the earth were retarded, and the midsummer morning were delayed till the
hour at which it dawns in winter. They do not discuss this contingency,
for they rightly assume it to be impossible, and consequently the
discussion of it would have no practical meaning.

And now let us go back to the question of labour and ability; and we
shall see, in the case of products to the production of which both are
essential, that, while ability is the practical cause of all such
amounts or values as exceed what would have been produced by labour if
there were no ability to direct it, it cannot be claimed in any similar
sense that all amounts and values are conversely produced by labour,
which exceed what would have been produced by the action of directive
ability, if no labour existed for such ability to direct.

The reason why labour, in this respect, differs from ability is as
follows: Whether directive ability shall or shall not exert itself
depends upon human volitions which, according to circumstances, are
alterable, just as it depends upon alterable human volitions whether a
framework of steel be constructed in this way or in that; or whether a
lamp be replenished with oil or no. But whether ordinary manual labour
shall or shall not exert itself, is not similarly dependent on human
volition at all. Let a nation be organised, no matter on what
principles, the majority of the citizens will have to labour in any
case. The supposition of their labouring is bound up with the
supposition of their existence. To suppose that the labourers as a whole
could permanently cease to labour, is like supposing that they could
exist and yet permanently cease to breathe. They can cease to labour for
moments, just as for moments a man can hold his breath, as they do on
the occasion of a strike; but they can do so for moments only. Except in
a region where climatic conditions are exceptional, what makes men
labour is not an employing class, but nature. Directive ability does not
_make_ them labour; it finds them labouring. It finds them like wheels
which are driven by an eternal stream, and which must turn and turn for
ever, until they fall to pieces. To inquire, then, what would happen if
labour ceased to exert itself is like inquiring what would happen if the
earth were to retard its diurnal motion, or if some natural force--for
example, that of gravitation--were to strike work for the sake of
intimidating the cause of all things. Such suppositions are for
practical purposes meaningless. But with the directive ability of the
few, as opposed to the directed labour of the many, the case is
dramatically different. For while there never can be any question of the
directive faculties of the few being left alone in a world where there
is no labour--for in the case of the majority, nature, the eternal
taskmaster, will always make labour compulsory, so long as stomachs want
food and naked backs want clothing--there constantly has been, and there
may be again, a question of whether this mass of ordinary human labour
shall find any exceptional ability so developed and so organised as to
direct it. In the earlier states of society no such ability was
operative. In savage communities it is not operative now; and there is
constantly a question, among modern civilised nations, whenever the
security of social institutions is threatened, of the action of this
faculty being temporarily suspended altogether, either because those
persons possessing it are deprived of the motives without which they
will not exert it, or else because the labourers individually, on one
ground or another, are impatient of submitting themselves to the
direction of any intelligences but their own.

In other words, when we are seeking to measure the products due
respectively to directive ability and to labour, by computing what would
happen if either of these agencies were withdrawn, the withdrawal of one
of them--that is to say, of ability--can alone be taken as possible by
any practical reasoner. We have before us practically two alternatives
only. One is a condition of things under which the exceptional ability
of the few directs and co-ordinates the labour of the average many. The
other is a condition of things under which the labour of the average
many has to exert itself with the same severe continuity, but is guided,
co-ordinated, and stimulated by none of those special faculties which
raise a few men above the general level of efficiency. When these
special faculties are applied to the direction of average labour, the
output of wealth increases. When their application is interfered with or
ceases, the output of wealth declines; and in the only practical sense
of the words "cause" or "producer," these faculties of direction, or the
exceptional persons who exercise them, are the true causes or producers
of the whole of that portion of wealth which comes into being with their
activity, and disappears or dwindles with their inaction.

The practical validity of this method of computation has been formally
recognised, though not completely understood, by some of the later
socialists themselves. Mr. Webb, for example, and his associates, have
admitted that, of the wealth of the modern world a considerable part
consists of "the rent of business ability."[19] This way of expressing
the matter is true so far as it goes. It expresses, however, one-half of
the truth only. Mr. Webb and his friends mean that, if we take the world
as it is, the products due to ability in any given industry consist of
the quantity by which the products of one firm, because it is managed by
a man of superior talent, exceed the products of another firm which
differs from the first only in the fact that it is managed by another
man whose talent is not so great. They assume as their starting-point,
in every case, the presence of directive ability sufficient to organise
the labourers in such a way that the products of the entire group shall
provide the labourers with wages which are up to a certain standard, and
a minimum of profit or of surplus values besides. This lowest grade of
ability is one of the postulates of their argument, just as in
calculating agricultural rent the first postulate of our argument is a
lowest grade of land.

Now, in connection with many questions of a more or less limited kind,
this assimilation of the products of superior ability to rent, and of
ability of a lower grade to land which is practically rentless, will
serve our purpose well enough. Between the two cases, however, there is
a vast and underlying difference; and when we consider our present
problem under its widest and most vital aspect, it is the difference,
not the likeness, between them, which constitutes our main concern. The
nature of this difference has been pointed out already. When we are
discussing rent and agriculture, land is a necessary assumption, for
unless there were land, there could be no agriculture at all; but there
can be, has been, and still is in the world, abundance of labour without
directive ability; and while it would be meaningless to ask what would
happen to rent if all land disappeared, the question of what would
happen to labour if all ability were in abeyance is precisely the
question raised by all schemes of economic revolution, and one which has
been constantly illustrated by the facts of economic history.

Of such facts we may take the following, picturesque example: In the
eighteenth century the Jesuit Fathers in Uruguay succeeded in teaching
the natives a variety of Western arts, among others that of
watch-making, and so long as the Jesuits were on the spot to direct them
the natives exhibited much manual skill. But when, owing to political
causes, the Jesuits were driven from the country, the natives sank back
into their previous industrial helplessness. The temporary efficiency of
their labour had been due to the ability that directed it; and as soon
as that ability was withdrawn, the labour, left to itself, shrank again
to its old relative inefficiency. Now, here we have a case precisely
analogous to that which we have to deal with when considering at the
present day how much of the products of any civilised nation is produced
by the labour of the average units of the population, and how much by
the ability of the exceptional men directing them. It is not a question
of how much this or that group of labourers, which is directed by a man
of the highest grade of ability, produces in excess of the products of
some similar group which is directed by another man whose ability is
somewhat inferior; it is a question of how much the same nation would
produce, if every director of other men's labour were withdrawn, and the
present labouring units left to their own devices.

These two questions, though not mutually exclusive, differ as much as
the question of why one of two balloons rises above the earth to a
height of three miles and a furlong, while a second balloon reaches the
height of three miles only, differs from the question of why either of
them rises in the air at all. Mr. Webb and his friends, with their
theory of the rent of ability, confine themselves to the first of
these--namely, the question of why one balloon rises a furlong higher
than the other. The real question which we have to deal with here is why
both balloons lift their aeronauts at least three miles into the clouds,
while other men who have no balloon to lift them can get no higher than
the top of the church steeple. Or to come back to literal fact, our
problem must be expressed thus: Let us take the present population of
Great Britain or America, and, having noted the wealth at present
annually produced by it, ask ourselves what would happen if some duly
qualified angel were to pick out and kill, or otherwise make away with,
every man, who, in virtue of his assimilated scientific knowledge, his
inventive gifts, his constructive and practical imagination, his energy,
his initiative, and his natural powers of leadership, was better able to
direct others than the other nine were to direct themselves?

We cannot make this experiment in precisely the way described; but
history will provide us with equivalents which are sufficiently accurate
for our purpose. There are, for example, in the case of Great Britain,
data which have enabled statisticians with a considerable degree of
unanimity to estimate the values produced per head of the industrial
population at various periods from the reign of Charles II. till to-day,
and to reduce these values to comparable terms of money. Now, we need
not insist too much on the accuracy of the figures in question; but one
broad fact is unmistakably shown by them--that the product per head
towards the close of the nineteenth century was, to say the least of it,
from four to five times as great as it was towards the close of the
sixteenth. To what, then, was this increase in industrial productivity
due? It was not due to any change in the spontaneous workings of nature.
It can only have been due to some change in the character of human
effort--either in that of the effort of each separate manual labourer,
or else in that of the men by whom the labour of others is directed. The
average labourer, however, at the close of the nineteenth century did
not differ, as an isolated labouring unit, from the average labourer as
he was at the time of the fire of London. The increase in industrial
productivity must therefore be necessarily due to a change in the
ability of those by whom the labourers are organised and directed. And
here _a priori_ reasoning is confirmed by actual facts, for the change
which has taken place in the class which directs the labour of others
has been, during the period in question, of the most notorious and
astonishing kind. That class had been progressively absorbing into
itself, and concentrating on the conduct of industry, ambitions,
intelligences, and strong practical wills, which formerly found their
outlets in very different channels--ecclesiastical, political, and more
especially military. Man for man, then, industry became more productive,
because to an increasing degree the ablest men of the nation
concentrated their exceptional powers on directing the business of
production; and any one who wished to push things to an extreme
conclusion might contend that the entire amount--some four or five
hundred per cent.--by which the product per head in the year 1880
exceeded the product per head some two hundred years before, was due to
directive ability, and directive ability only; and that the labourers,
in their capacity of labourers, had no claim whatsoever to it. We will,
however, put the case in a much more moderate form. We will, for
argument's sake, concede to self-directed labour all that increase in
the values produced per head, which took place between the time of
Charles II. and the general establishment in Great Britain of the modern
industrial system, with its huge mills and factories, and its
concomitant differentiation of the directing class from the directed--an
event which had been securely accomplished at the beginning of the
nineteenth century. In making this concession, we shall, indeed, be
defying fact, and ignoring the improvements, alike in manufacture and
agriculture, which had taken place during the hundred years preceding,
especially during the last fifty of them, and which were solely due to
a minority of exceptionally able men.[20] We shall thus be conceding to
the labourer far more than his due. Certainly no one can contend that we
concede too little.

Let us take, then, the beginning of the nineteenth century as our
standing-point; and, assuming that labour was the sole producer then,
compare its productivity per head with the productivity of industrial
effort--of labour and ability combined--some eight or nine decades
later. The labourers of Great Britain as a body, to the exclusion of all
other classes, actually divided among themselves, about the year 1880,
more wealth per head--something like forty-five per cent.--than would
have been theirs if they had lived in the days of their own
grandfathers, and been able to appropriate as wages the income of the
entire country.

Let us, then, repeat the question which we asked just now. Where has
this addition to the income of labour come from? That part of it is
attributable to ability--the ability of the Watts, the Stephensons, the
Arkwrights, the Bessemers, the Edisons, and so forth--nobody in his
senses will deny. Can it be said that any of it is attributable to
labour? The period now under consideration is so brief that this
question is not hard to answer. It can easily be shown that man, as a
labourer skilled or unskilled, has acquired individually no new
efficiencies since--to say the least of it--the days of the Greeks and
Romans. An ancient gem-engraver would to-day be eminent among modern
craftsmen. The implements of the Roman surgeons, the proportional
compasses used by the Roman architects, the force-pumps and taps used in
the Roman houses--all things that could be produced by a man directing
his own muscles--were produced in the Rome of Nero as perfectly as they
could be produced to-day. To this fact our museums bear ample and minute
witness; while the Colosseum and the Parthenon are quite enough to show
that the masons of the ancient world were at least the equals of our
own. If no advance, then, in the quality of manual labour as such has
taken place in the course of two thousand years, it is idle to contend
that its powers have increased in the course of eighty. But a still more
remarkable proof that they actually have not done so, and that no such
increase has contributed to the increase of modern wealth, is supplied
by events belonging to these eighty years themselves. I refer to the
policy pursued by the trade-unions of reducing the practical efficiency
of all their members alike to the level which can be reached by those of
them who are least active and dexterous. Bricklayers, for example, are
forbidden by the English unions to lay, in a given time, more than a
certain number of bricks, though by many of them this number could be
doubled, and by some trebled, with ease. Now, although, from the point
of view of those bodies who adopt it, such a policy has many advantages,
and is perhaps a tactical necessity, this levelling down of labour to
the minimum of individual efficiency is denounced by many critics as a
prelude to industrial suicide, and the alarm which these persons feel is
doubtless intelligible enough. It is, however, largely superfluous. The
levelling process in question must of course involve a certain amount of
waste; but its effect on production as a whole is under most
circumstances inappreciable. Building as a whole is not checked by the
fact that the best bricklayers may do no more than the worst. All kinds
of commodities are multiplied, improved, and cheapened, while thousands
of the operatives whose labour is involved in their production are
allowed to attend to but one machine, when they might easily attend to
three. In a word, while the unions have been doing their effective best
to keep labour, as a productive agent, stationary, or even to diminish
its efficiency, the product of industry as a whole exhibits an unchecked
increase. And what is the explanation of this? Little as the
trade-unions realise the fact themselves, their own policy is an
object-lesson which supplies us with the simple answer. The answer is
that the increase of modern wealth--certainly its increase during the
past eighty years--has not been due to any change in the efficiency of
labour at all; that labour is merely a unit which directive ability
multiplies; that if in the year 1800 labour produced everything, and
its total products then be expressed by the number five, the products of
the industrial population would be five per head still, if ability, as a
multiplying number, successively expressible by two and three and four,
had not increased the quotient to ten, fifteen, and twenty; ability thus
being the producer, not indeed of the five with which we start, but of
all the increasing differences between this and the larger numbers.

To return then to definite facts, since in the year 1800 an equal
division of all the wealth of Great Britain would have yielded to each
family an income of eighty pounds, and since eighty years later an equal
division of the total which was actually appropriated as wages by
wage-paid labour alone, would have yielded to each labourer's family
some twenty-five pounds in addition, the labouring class as a whole in
Great Britain to-day, instead of receiving less than its labour
produces, receives on the lowest computation from thirty to thirty-three
per cent. more. Or, to put the matter otherwise, more than a fourth of
its present income is drawn from a fund which would cease to have any
existence if it were not for the continued activity of a specially
gifted class, by whose brains the data of science are being constantly
remastered and re-assimilated, and by whose energy they are applied to
the minds and muscles of the many from the earliest hour of each working
day to the latest. And what is true labour, its products, and receipts
in Great Britain, is broadly true of them in America and all other
countries also, where modern capitalism has arrived at the same stage of

We are, let me say once more, not here contemplating individual cases.
Of the total wage-fund divided among the labourers in any given country,
too much may be given to some men, and too little to others; but of
every million pounds which a million of such men receive, some two
hundred and fifty thousand are distributed well or ill, which have not
been produced by the efforts of these men themselves, but are due to the
efforts of a class which is definitely outside their own.[21] If, then,
it is contended that the just reward of labour is that total of wealth
which labour itself produces, the idea that labour, in respect of its
pecuniary remuneration, is, under present conditions, the victim of any
general wrong, is so far from having any justification in fact that it
only touches fact at all by representing a direct inversion of it.
Labour, as a whole, does not, under existing conditions, get less than
it produces.[22] It gets a very great deal more. If, therefore, the
claims of labour are based on, and limited to, the amount of wealth
which is produced by labour itself--that is to say, the total which it
would now produce were the faculties of the directing and organising
minority paralysed--what labour, thus appropriating the entire product,
would receive, would be far less, not more, than what it actually
receives to-day. Instead of defrauding it of any part of its due, the
existing system is treating it with an extreme and even wanton

Is it, then, here contended, many readers will ask, that if matters are
determined by ideal justice, or anything like practical wisdom, the
remuneration of labour in general ought henceforth to be lessened, or at
all events precluded from any possibility of increase? Is it contended
that the employing and directing class should attempt or even desire to
take back from those directed by it every increment of wealth possessed
by them which is not produced by themselves? If any one thinks that such
is the conclusion which is here suggested, let him suspend his opinion
until, as we shall do in another chapter, we return to the subject and
deal with it in a more comprehensive way. Our conclusion, as for the
moment we must now be content to leave it, is not that the labourers
have not a claim, practically valid, to the only portion of their income
which has any tendency to grow, but merely that they should understand
the source from which this portion is drawn--a source which consists of
the efforts of other men, not of their own.

And now, before we return to this particular question, we will go on to
deal with another which to a certain extent overlaps it, but is narrower
in its compass, and seems, for that very reason, to many minds of
greater practical moment. I mean the question of interest, or the income
which comes to its recipients without any necessary effort on their own
part to correspond to it.


[18] I met an interesting embodiment of this mood of mind in America, in
the person of a slim young man, well-dressed, well-educated, refined in
his speech and manners, who worked as a clerk or accountant in some
large financial house. To my great astonishment he introduced himself to
me as a socialist. "I don't believe like Marx," he said, "that labour
produces everything, but I maintain that the task-work of the employed
and directed labourer, of whatever grade--whether he uses a pen or a
chisel--is always worth more than the wages which the employers pay him
for performing it. I feel this myself with regard to my own firm. Month
by month I am worth to it more than the sums it gives me. This," he went
on, with an odd gleam in his eyes, "is what I may not endure to think
of--that others should be always appropriating values which I have
produced myself; and nine out of ten of the men who become socialists,
do so because they feel as I do about this particular point."

[19] General Walker also seeks to assimilate the product of ability to
rent; and my criticism of Mr. Webb in this respect applies to him also.
General Walker's book was mentioned frequently in connection with my
late addresses in America; and it was said by one or two critics that I
had borrowed from, and ought to have acknowledged my debt to, him. As a
matter of fact, I never saw his book till after my return to England,
when I read it with interest and admiration. His doctrines with regard
to the _entrepreneur_ is, so far as it goes, fundamentally identical
with the main argument of this volume. My criticism of him would be that
he does not give to this particular part of his doctrine the foremost
place which logically belongs to it; and that though attributing to the
_entrepreneur_ some special productive faculty distinct from labour, he
starts his work with re-enumerating the old doctrine that labour,
capital, and law are the only factors in production.

[20] For example, the silk factory at Derby, erected by Lombe, in the
reign of George II., the machinery of which comprised 26,000 wheels.

[21] These figures represent less than the truth. They are merely given
in order to indicate the general character of the situation to-day, as
compared with that of an earlier, but still comparatively recent period.
To go into details minutely would involve extensive and here needless

[22] A letter was sent me by a friend in America, from a writer who,
commenting on my late addresses in that country, said that in the main
he entirely agreed with my arguments, as against socialism; but that he
could not divest himself of the belief that labour as a whole got less
than it produced, and was thus as a whole suffering a chronic wrong. He
suggested, however, a method, fundamentally analogous to that set forth
in the text, of computing what labour, as such, does produce in reality.
He gave his own opinion as to actual facts, as an impression merely; but
how misleading impressions may be can be seen from his statements "that
all _very great_ fortunes, at all events, must be derived from the
underpayment of labour." Had he only considered the case in detail, he
would have seen that labour received the highest wages from some of the
richest employers. According to his theory the wages of labour, in such
cases, would touch the minimum.



The essential feature of interest, as distinct from the income due to
active ability, is that while the latter ceases as soon as the able man
ceases to exert himself, the former continues to replenish the
recipient's pockets, though for his part he does nothing, or need do
nothing, in return for it. Since, then, the possession of this
particular form of income is admittedly unconnected with any concurrent
exertion on the part of those possessing it (such is the argument of the
objectors) the whole portion of the national wealth which, in the form
of interest, is at present appropriated by the presumably or the
possibly idle, might obviously be appropriated by the state, and applied
to public purposes, without lessening in any way even the highest of
those rewards which are due to, and are needed to stimulate any active
ability whatsoever, and hence without lessening the efficiency of the
wealth-producing process as a whole. If we adopt the programme which
this argument suggests, it will be possible, so its advocates say, to
satisfy the demands of labour by a shorter and more direct method than
that of committing ourselves to an estimate of what labour actually
produces, and endeavouring to secure that the total which is paid to
labour shall accord with it.

Now, this programme raises two separate questions. One question is
whether the proposed confiscation of interest is in reality, as its
advocates maintain it to be, practicable in the sense that the
disturbances which it would necessarily cause would not interfere with
the production of the fund which it is desired to distribute, and so
perhaps leave all classes poorer and not richer than they are. The other
question is whether such a confiscation would be just. To some people
this second question will possibly seem superfluous. If it can be shown,
they will say, that a policy, the avowed object of which is the
enrichment of the many at the expense of the relatively few, could be
really carried out successfully, and if the many had the power of
insisting on it, an inquiry into its abstract justice is merely a waste
of time; for whenever the wolf is face to face with the lamb, it will
eat up the lamb first and justify its conduct afterwards. And in this
argument there is a certain amount of truth; but those who take it for
the whole truth allow their own cynicism to overreach them. The fact
remains that even the wolves of the human world are obliged to assume,
as a kind of necessary armour, and often as their principal weapon, a
semblance of justice, however they may despise the reality. The brigand
chief justifies his war on society by declaring that society has
unjustly made war on him. The wildest demagogues, in their appeals to
popular passion, as the history of the French Revolution and of all
revolutions shows us, have always been obliged to exhibit the demands of
mere self-interest as based on some general theory of what is morally
just or right; and however much the theory may accommodate itself to the
hope of private advantage, there are few demands made for any great
social change which do not derive a large part of their force from
persons with whom a belief in the justice of the demands stands first,
while--so far at least as their own consciousness is concerned--the
prospect of personal advantage stands second or nowhere. This is
certainly so in the case which we are now considering. We will,
therefore, begin with the question of abstract justice.

Let us begin, then, with reminding ourselves that when interest is
attacked as such, on the ground that its recipients have themselves done
nothing to produce it, whereas other incomes, no matter how large, are
presumably the equivalents of some personal effort which corresponds to
them, it is assumed that every man has, in natural justice, a right to
such wealth as he actually himself produces; and what he produces, as we
saw in the last chapter, is that amount of wealth which would not have
been produced at all had his efforts not been made, or been other or
less intense than they have been.

Thus far, then, for the purposes of the present discussion, all parties
are agreed; but the moment the assailants of interest take the next step
in their argument, we shall find that their errors begin--errors
resulting, as we shall see, from an imperfect analysis of facts. For
them the two types of correspondence between productive effort and
product are, firstly, the manual labourer, who performs some daily task
such as riveting plates or bricklaying, and receives an equivalent in
wages at the end of each day or week; and, secondly, the manager of some
great industrial enterprise, who spends each day so many hours in his
office, issuing minute directions with regard to the conduct of his
subordinates, and sending his receipts to the bank as they come in from
his customers. But these types, though accurate so far as they go, do
but cover a part of the actual field of fact. Practically, though of
course not absolutely, they ignore the element of time. They represent
effort and product as being always so nearly simultaneous that, although
the former must literally precede the latter, yet, if we estimate life
in terms of years, or even months, or weeks, a man has ceased to produce
as soon as he has ceased to work.

Now, of certain forms of effort this may be true enough. A bricklayer,
for example, as soon as he ceases to lay bricks, ceases to produce
anything. His wall-building closes its effects with the walls which he
himself has built. It does nothing to facilitate the building of other
walls in the future. Similarly such ability as consists in a gift for
personal management often ends its effects, and leaves no trace behind
it, as soon as the manager possessing these gifts retires.

But with many forms of ability the case is precisely opposite. The
products of their exercise do not even begin to appear till after--often
till long after--the exercise of the ability itself has altogether come
to an end. Let us, for example, take the case of a play; and since
socialists are still included among the objectors whom we have in view,
let us take one of the popular plays written by Mr. Bernard Shaw. Such a
play, as Mr. Shaw has publicly boasted--for otherwise I should not
mention, and should know nothing of his private affairs--brings to its
author wealth in the form of amazing royalties; but until it is acted it
brings him no royalties at all, and the actors begin with it only when
his own efforts are ended. Moreover, not only do these royalties only
begin then, but having once begun, they have no tendency to exhaust
themselves. On the contrary the chances are that they will go on
increasing till the time arrives, if it ever does, when Mr. Shaw is no
longer appreciated. Mr. Shaw, in fact, if he had written one of his most
successful plays at twenty, might, so far as that play is concerned, be
idle for ever afterwards, even if he lived to the age of Methuselah, and
still be enjoying in royalties the product of his own exertions, though
he had not exerted himself productively for some seven or eight hundred

There is no question here of whether, under these conditions, a person
like Mr. Shaw might not feel himself constrained on some ground or other
to surrender his copyright at some period prior to his own demise. The
one point here insisted on is that he could not renounce it on the
ground that the wealth protected by it was no longer produced by
himself. If he is entitled to the royalties resulting from the
performance of his play at any time, on the ground that every man has a
right to the products of his own exertions, his right to the royalties
resulting from its ten-thousandth performance is, on this ground, as
good as his right to the royalties resulting from the first. The
royalties on a play, in short, show how certain forms of effort, though
not all, continue to yield a product for an indefinite period, though
the original effort itself may be never again repeated; and herein these
royalties are typical of modern interest generally. They do not,
however, constitute in themselves more than a small part of it. We will
therefore turn to interest of other kinds, the details of whose genesis
are indeed widely different, but which consist similarly of a constant
repetition of values, without any corresponding repetition of the effort
in which the series originated.

Those which we will consider first are the products of organic nature,
which have been dwelt upon by a well-known writer as showing us the
ultimate source of industrial interest generally, and also at the same
time its natural and essential justice. It may be a surprise to some to
learn who this writer is. He is Henry George, who is best known to the
public as the advocate of a measure of confiscation so crude and so
arbitrary, that even socialists have condemned it as impracticable
without serious modifications. Henry George, however, although he outdid
most socialists in his attack on private wealth of one particular
kind--that is to say, the rent of land--was equally vehement in his
defence of the interest of industrial capital. Socialists say--and the
aphorism is constantly repeated--"A man can get an income only by
working or stealing; there is no third way." In answer to this, it was
pointed out by George that one kind of wealth, at all events--and we may
add that here we have wealth in its oldest form--consists of possessions
yielding a natural increase, which has been neither made by the
possessors, nor yet stolen by them from anybody else. That is to say, it
consists of flocks and herds. A shepherd or herdsman starts with a
single pair of animals, from which parents there arises a large progeny.
This living increment has not been produced by the man, but it is still
more obvious that it has not been produced by his neighbours, and it
therefore belongs in justice to the man who owns the parents. George
pointed out also that whole classes of possessions besides are, for by
far the larger part of their value, equally independent either of
corresponding work or of theft. Among such possessions are wines, whose
quality improves with time, and which, if sold to-day, may be worth
tenpence a bottle, but which four years hence may be worth perhaps
half-a-crown. In all such cases--this was George's contention--we have
some possession originally small to start with, which year by year is
increased in amount or at least in value, not by the efforts of the
possessor, but by the secret operations of nature. Here, he argued, we
have capital in its typical form; and interest is the gift of nature to
the man by whom the capital is owned.

George, however, is constrained to supplement this proposition by
another. Though he assumes that of the products which are, in the modern
world, actually paid as interest by the borrower of capital to the
owners of it, the larger part consists of gifts of unaided nature, he
admits that they are not the whole. He admits that a part of it is paid
for the use of machinery. Now, such interest, he says, has a definitely
different origin, and cannot intrinsically be justified in the same way;
and if all wealth consisted of such commodities as are due to the
efforts of man, and to the man-made machinery which assists him, all
interest would be really, as it is said to be by some, indefensible.
But, he continues, since interest on capital such as machinery is not
the whole of the interest paid in the modern world, but is only a minor
part of it, and since in the modern world all forms of capital are
interchangeable, the laws which govern us in our dealings with the
lesser quantity must necessarily be assimilated to those which govern us
in our dealings with the greater. If a ram and a sheep are capital which
yields just interest, because their wool and their progeny are
increments due to nature, and if a ram and a sheep are exchangeable for
some kind of machine, the possession of the one must be placed on a par
with the possession of the other. The machine must be treated, though it
is not so in strictness, as if it were prolific in the same sense as the
beasts are; and a part of what it is used to produce must be paid by the
user to the owner of it.

Now, both these arguments--that which deals with the fact of natural
increase, and that which deals with the assimilation of all such
possessions as are interchangeable--are in principle sound. The first,
indeed, touches the very root of the whole matter; but the first is
exaggerated in his statement of it, and unduly limited in his
application, and the second is wholly unnecessary for proving what he
desires to prove. The first is exaggerated in his statement of it
because, as a matter of fact, the kind of capital whose interest is
described by him as the gift of nature is not the major, it is only a
minor part of the capital yielding interest under the conditions which
obtain to-day. A part far larger is capital in the form of machinery;
and if the distinction which George draws between the two is a true one,
the case of the flocks and herds should be assimilated to that of the
machines, not the case of the machines to that of the flocks and herds.
Interest should be denied to both kinds of capital because machines are
not naturally prolific, instead of being conceded to both because flocks
and herds are so. We shall find, however, that the distinction which
George seeks to establish is illusory, that both kinds of capital yield
interest in the same way, and that his justification of it in the one
case is equally applicable to it in the other.

His attempt to distinguish between the two takes the form of a criticism
of Bastiat, according to whom the typical source of interest is the
added productivity which a given amount of human effort acquires by the
use of certain lendable implements. As a type of such implements or
machines, Bastiat takes a plane. The maker of a plane lends this plane
to another man, who is thus enabled to finish off in a week four more
planks than he could have done had he used an adze. If, at the end of
the week, the borrower does nothing more than return the plane in good
repair to the lender, the borrower gains by the transaction; but the
maker and lender not only gains nothing, he loses. For a week he loses
his implement which he otherwise might have used himself, and the extra
planks which, by the use of it, he could have produced just as easily
as his fellow. Such an arrangement would be obviously and absurdly
unjust. Justice demands--and practice here follows justice--that he get
at the end of the week, not only his own plane back again, but two of
the extra planks due to its use besides. A plane, in short--such is
Bastiat's meaning, though he does not put it in this precise way--is a
possession which is fruitful no less than a sheep and a ram are, or a
wine which adds to its value by the mere process of being kept, and it,
therefore, yields interest for a virtually similar reason. George,
however, seeks to dispose of Bastiat's argument thus: If the maker of
the plane lends it, he says, instead of himself using it, and the
borrower borrows a plane, instead of himself making one, such an
arrangement is simply due to the fact that both parties for the moment
happen to find it convenient. For, George observes, it is no part of
Bastiat's contention that the plane is due to the exertion of any
faculties possessed by the maker only. Either man could make it, just as
either man could use it. Why, then, should A pay a tribute to B for the
use of something which, to-morrow, if not to-day, he could make for
himself without paying anything to anybody?

Now, if Bastiat's plane is to be taken as signifying a plane only, the
criticism of George is just. But what George forgets is that, if the
plane means a plane only--an implement which any man could make just as
well as the lender--interest on planes, besides being morally
indefensible, would as a matter of fact never be paid at all. Bastiat's
plane, however, stands for a kind of capital, the borrowing of which and
the paying of interest on which, form one of the most constant features
of the modern industrial world; and he evidently assumes, even if he
does not say so, that for all this borrowing and paying there is some
constant and sufficient reason. Now, the only reason can be--and
George's own criticism implies this--that in order to produce the
machine-capital borrowed certain faculties are needed which are not
possessed by the borrowers; and though this may not be true of a simple
hand-plane itself, it is emphatically true of the elaborate modern
machinery of which Bastiat merely uses his hand-plane as a symbol. In
order to produce such implements of production as these, the exertion of
faculties is required which are altogether exceptional, such as high
scientific knowledge, invention, and many others. Let invention--the
most obvious of these--here do duty for all, and let us consider, for
example, the mechanism of a modern cotton mill, or of a boot factory, or
a Hoe printing press, or a plant for electric lighting. All these would
be impossible if it had not been for inventive faculties as rare in
their way as those of a playwright like Mr. Shaw.

No one will deny that when a play like "Man and Superman" first acquires
a vogue which renders its performance profitable, the royalties paid to
the author are values which he has himself created, not indeed by his
faculties used directly, but by his faculties embodied in a work which
he has accomplished once for all in the past, and which has
thenceforward become a secondary and indefinitely enduring self; and if
this is true of the royalties resulting from its first profitable
performance, it would be equally true of those resulting from the last,
even though this should take place on the eve of the Day of Judgment.
With productive machinery the case is just the same. If Mr. Shaw,
instead of writing "Man and Superman," had been the sole inventor of the
steam-engine, and the only man capable of inventing it, every one will
admit that he would, by this one inventive effort, have personally
co-operated for a time with all users of steam-power, and been
part-producer of the increment in which its use resulted. And if this
would have been true of his invention when it was only two years old, it
would be equally true now. He would still be co-operating with the users
of every steam-engine in the world to-day, and adding to their products
something which they could not have produced alone.

Here, then, we see that in one respect at all events the two kinds of
capital, which George attempts to contrast, yield interest for a
precisely similar reason. Both consist of a productive power or agency
which is external to the borrower himself; and it makes no difference to
him whether the auxiliary power borrowed inheres in living tissue, or in
a mechanism of brass or iron.

But the resemblance between these two forms of capital, and the identity
of the reasons why both of them bear interest, do not end here. I quoted
in a former chapter an observation of Mr. Sidney Webb's, which he
himself applies in a very foolish way, but which is obviously true in
itself, and in the present connection is pertinent. Some men he admits
are incomparably more productive than others, because they happen to be
born with a special kind of ability. But what is this ability itself? It
is simply the result, he says, of a process which lies behind
them--namely, the natural process of animal and human evolution; and its
special products are like those of exceptionally fertile land. That is
to say, the ability which produces modern machines is in reality just as
much a force of nature as that which makes live-stock fertile, and
brings raw wine to maturity. But the same line of argument will carry us
much farther than this. As Dr. Beattie Crozier has shown in his work,
_The Wheel of Wealth_, the part which nature plays in productive
machinery is not confined to the brains of the gifted inventors and
their colleagues. It is incorporated in, and identified with, the actual
machines themselves. The lever, the cam, the eccentric, the crank, the
piston, the turbine, the boiler with the vapour imprisoned in
it--devices which it has taxed the brains of the greatest men to
elaborate and to co-ordinate--were all latent in nature before these men
made them actual; and when once such devices are actualised it is
nature that makes them go. There is not merely a transformation of so
much human energy into the same amount of natural energy; but nature
adds to the former a non-human energy of her own; as--to take a good
illustration of Dr. Crozier's--obviously happens in the case of a charge
of gunpowder, which, "when used for purposes of blasting, has," he
observes, "in itself a thousand times the quantity of pure economic
power that is bought in the work of the labourers who supply and mix the
ingredients." That is to say, whenever human talent invents and produces
a machine which adds to the productivity of any one who uses it with
sufficient intelligence, the inventor has shut up in his machine some
part of the forces of nature, as though it were an efreet whom a
magician has shut up in a bottle, and whose services he can keep for
himself, or hand over to others. The efreets shut up in machinery will
not work for human beings at all, unless there are human magicians who
manage thus to imprison them. They therefore belong to the men who, in
virtue of their special capacities, are alone capable of the effort
requisite to perform this feat; and it matters nothing to others, by
whom the efreets' services are borrowed, whether the effort in question
occupied a year or a day, or whether it took place yesterday or fifty
years ago.

The borrowed efreet produces the same surplus in either case, and
interest is a part of this surplus which goes, not to the efreet himself
(for this is not possible), but to his master, just as a cab-fare is
paid to the cabman and not his horse.

Machine-capital, then--or capital in its typical modern form--consists
of productive forces which are usable by, and which indeed exist for,
the human race at large, because, and only because, they have been
captured and imprisoned in implements by the efforts of exceptional men,
whose energy thus exercised is perpetuated, and can be lent to others;
and what these men receive as interest from those by whom their energy
is borrowed, is a something ultimately due to the energy of the lenders
themselves--nor is this fact in any way altered by lapse of time. Thus,
so far as these special men are concerned, the alleged difference
between earned income and unearned altogether disappears; and if one man
lives in luxury for sixty years on the interest of an invention which it
took him but a month to perfect, while another man every day has to toil
for his daily bread, the difference between the two consists not in the
fact that the one man works for his bread and the other man does nothing
for it, but in the fact that the work of one produces more in a day than
that of the other would do in a hundred lifetimes.

Here, however, we shall be met with two important objections. In the
first place, it will no doubt have occurred to many readers that
throughout the foregoing discussion we have assumed that the persons who
receive interest on machinery are in all cases the persons by whom the
machinery was invented and produced. To the actual inventors and
producers it may, indeed, be conceded that the interest which they
themselves receive has been earned by their own exertions; but no such
concession, it will be said, can be made to these men's heirs. An Edison
or a Bessemer may have produced whatever income has come to him in his
latest years from the inventive efforts of his earliest; but if such a
man has a son to whom this income descends--a half-witted degenerate who
squanders it on wine and women, who will not work with his hands and who
cannot work with his head--no one can pretend that, in any sense of the
word, a fool like this produces any fraction of the thousands that he
consumes. And though all of those who live on the interest of inherited
capital are not foolish nor vicious, yet in this respect they are all of
them in the same position--they have not produced their incomes, and so
have no moral right to them.

In the second place, the following argument, which was discussed in an
earlier chapter, will also be brought forward, refurbished for the
present occasion. Let us grant, it will be said, that the inventions
which have enriched the world were originally due to the talents of
exceptional men, and that without these exceptional men the world would
never have possessed them; but when once they have been made, and their
powers seen in operation, the human race at large can, if left to
itself, take over these powers from the inventors just as the inventors
took them over from nature. Indeed, this constantly happens. Any boy
with a turning-lathe can to-day make a model steam-engine, and no one
will contend that such a model was not made by himself, on the ground
that it could not have been made either by him or by anybody unless
Watt, with his exceptional genius, had invented steam as a motive-power.
One might as well contend that a savage does not really light his own
fire, on the ground that the art of kindling wood was found out by
Prometheus, and that no one, except for him, would have had any fires at
all. The truth is, it will be said, that in such cases as these the
powers of the exceptional man, originally confined to himself, are, when
his invention is once in practical operation, naturally shared by his
fellows, who can only be restrained from using them by artificial
devices such as patents--these devices being at best, from a moral point
of view, devices by which one man who has given a cheque to another man
steals back half the money as soon as the cheque is cashed.

Now, both these arguments, so far as they go, are true; but neither has
any bearing on the problem which is now before us. That problem
arises--let me observe once more--out of the assumption that, as a
matter of justice, every man has a right to the products of all such
forces as are his own; whence it follows that nobody has a right to the
products of any forces which are not definitely in himself. Let us
take, then, the latter of the above arguments first. It would doubtless
be absurd to contend, were Prometheus alive to-day, that because he
invented the art of striking fire from flints he ought to be paid a
tribute by every savage who boiled a kettle; for the savage can strike a
flint as well as Prometheus himself could. But if fire could be kindled
only by a particular sort of match which Prometheus alone could make,
the fact that he was really the lighter of all fires would be obvious,
and his claim to a payment in respect of the lighting of every one of
them would be as sound as the claim of the lighter of street-lamps to
his wages. If "Man and Superman" were not a play, but a hoot, which Mr.
Shaw had invented in order to call attention to himself, and which any
street boy could imitate with the same results, it would be idle for Mr.
Shaw to claim a right to royalties from the street boys; but it would be
idle only because it would not be possible to collect them. He is able
to collect them on his play because, and only because, his play exists
in a form which is susceptible of legal protection. If in justice he has
a right to these, as he no doubt has, he would, if abstract justice were
the sole determining factor, have an equal right to royalties on the use
of his peculiar hoot. He fails to have any such right because, as a
matter of fact, the principle of abstract justice with which we are here
concerned--that every one has a right to everything that he himself
produces--has, in common with all abstract moral principles whatsoever,
no application to cases in which, from the nature of things, it is
wholly impossible to enforce it.

And the same criticism is applicable to the other argument before us,
which admits that a man who invents a productive machine, or who writes
a remunerative play, is, so long as he lives, entitled, because he is
the true producer of them, to certain profits arising from the use of
either; but adds that his rights to such profits end with his own life,
and lose all sanction in justice the moment they are transferred to an
heir. In the heir's hands, it is urged, they entirely change their
character, and, instead of enabling a man to secure what is honestly his
own, become means by which he is enabled to steal what morally belongs
to others.

Now, if it is seriously contended that nobody has a right to anything
which at some time or other he has not personally produced, the interest
on machinery, as soon as the inventor dies, not only ought not to belong
to the inventor's heir, but it ought not to belong to anybody; for if
this interest is not produced by the heir, it is certainly not produced
by any of the heir's contemporaries. A contention like this is absurd;
there must therefore be something amiss with the premises which lead up
to it. Socialists who admit that an inventor during his lifetime has a
right to the interest resulting from the use of his own inventions,
endeavour to solve the difficulty by maintaining that after his death
both invention and interest should pass into the hands of the state; but
this doctrine, on whatever grounds it may be defended, cannot be
defended as based on the principle now in question, that the sole valid
title to possession is personal production. It must, if it is based on
any abstract moral principle at all, be based on one of a much more
general kind, according to which the ultimate standard of justice is not
the deeds of the individual, but the general welfare of society.

Here it is true that the appeal is still to abstract justice, but it is
not an appeal to abstract justice only. In order to condemn interest on
any such ground as this, it is necessary to assume or prove that to make
interest illegal, or to confiscate it by taxation when it arises, or by
any other means to render its enjoyment impossible, will as a matter of
fact have the result desired--namely, a permanent rise in the general
level of prosperity. It is only by means of an assumption of this purely
practical kind that the abstract moral principle can be applied to the
case at all; and thus let us approach the problem from whatever side we
will, we are brought from the region of theory down into that of
practice, not, indeed, by an abrupt leap, but by a gradual and necessary
transition. We are not abandoning our considerations of what, in
abstract justice, ought to be; but we are compelled to interpret what
ought to be by considerations of what, as the result of such and such
arrangements, will be.

To sum up, then, the conclusions which we have reached thus far--if we
confine our attention to those recipients of interest who have
themselves produced the capital from which the interest is derived, and
compare such incomes with those which renew themselves only as the
result of continued effort, it is absolutely impossible, on any general
theory of justice, to sanction the latter as earned, and condemn the
former as unearned. If, on the other hand, we turn to those whose
incomes consist of interest on capital produced by, and inherited from,
their fathers, and if we argue that here at all events we come to a
class of interest on which its living recipients can have no justifiable
claim, since we start with admitting that it originates in the efforts
of the dead, our argument, though plausible in its premises, is
stultified by its logical consequence; since the same principle on which
we are urged as a sacred duty to take the income in question away from
its present possessors, would forbid our allowing it to pass into the
possession of anybody else. In short, if continued daily labour, or else
the exercise of invention, or some other form of ability, at some period
of their lives by persons actually living, constitutes in justice the
sole right to possession, the human race as a whole has no right to
profit by any productive effort on the part of past generations; but
each generation ought, so far as is practicable, to start afresh in the
position of naked savages. The fact that nobody would maintain a
fantastic proposition like this is sufficient to show that, on the tacit
admission of everybody, it is impossible to attack interest by insisting
on any abstract distinction between incomes that are earned and
unearned, and treating the latter as felonious, while holding the former
sacred. It is equally true, however, that on such grounds alone it is no
less impossible to defend interest than to attack it; and here we arrive
at what is the real truth of the matter--namely, that in cases like the
present the principles of ideal justice do not, indeed, give us false
guidance, but give us no guidance at all, unless we take them in
connection with the concrete facts of society, and estimate social
arrangements as being either right or wrong by reference to the
practical consequences which do, or which would result from them.

The practical aspects of the question we will discuss in the following



If we reconsider what we have seen in the last chapter, we shall realise
that the moral or theoretical attack on interest, as income which is
unjustifiable because it has not been personally earned, is, when tested
by the logic of those who make it, an attack, not on interest itself,
but on bequest; and that such is the case will become even more evident
when we see what the theory comes to, as translated into a practical

The majority of those who attack interest to-day, no matter whether in
other respects they are advocates of socialism or opponents of it, agree
in declaring that what a man has personally produced he has a perfect
right to enjoy and spend as he pleases. The only right they deny to him
is the right to any further products which, before the capital has been
spent by him, may result from the productive use of it. Now, the
practical object with which this restriction is advocated is to render
impossible, not accumulations of wealth (for these are recognised as
legitimate when the reward of personal talent), but merely their
perpetuation in the hands of others who are economically idle. So far,
therefore, as this practical object is concerned, it would matter little
whether the man by whom the accumulation was made were allowed to
receive interest on it during his own lifetime or no, provided that this
right to interest were not transmissible to his heir; or even whether he
were allowed or were not allowed to leave anything to an heir at all.
For the heir at best would merely receive a sum which, since it could
not be used by him so as to bring about its own renewal, would be bound
soon to exhaust itself; and the general effect of permitting bequests of
this sterilised kind would differ from the effect of prohibiting
bequests altogether, not because it would tend to render accumulated
fortunes permanent, but only because it would protract for a decade or
two the process of their inevitable dissipation.

We may, therefore, say that, for the purposes of the present discussion,
the modern attack on interest, considered apart from any otherwise
socialistic programme, practically translates itself into this--namely,
the advocacy of a scheme which, as regards the actual producers of
capital, leaves their existing rights both to principal and interest
untouched, and would not even extinguish altogether their existing
powers of bequest, but would limit the exercise of these to the
principal sum only,[23] and prohibit the transmission to any private
person of any right whatever to the usufruct of its productive

Here, then, at last, we have something definite to discuss--a single
proposed alteration in certain existing arrangements; and by comparing
the situation which actually exists to-day with that which the proposed
alteration, if carried into effect, would produce, we shall see whether
the alteration is workable and practically defensible or no. Let us
begin with the situation which actually exists to-day, confining
ourselves to those features of it which are vital to the present issue.

Let us take two men of practically contrasted types, each of whom has
inherited a capital of fifty thousand pounds. The ultimate object of
each is, in one way or another, to make his capital provide him with the
life that he most desires; but the first man is thoughtful, far-seeing,
and shrewd, while the second cares for nothing but the gaiety and
pleasure of the moment; and they deal with their capitals in accordance
with their respective characters. The first meets, let us say, with the
inventor of an agricultural machine, which will, if successfully
manufactured, double the wheat crop of every acre to the cultivation of
which it is applied. He places his capital, as a loan, in this
inventor's hands. The machine is constructed, and used with the results
desired; and the man who has lent the capital receives each year a
proportion of the new loaves which are due to the machine's efficiency,
and would not have existed otherwise. The second man invests his fortune
in any kind of security which has the advantage of being turned easily
into cash, and draws out month by month so many hundred pounds, without
reference to anything but the pleasures he desires to purchase; and by
the end of a few years both his capital and his income have disappeared.

Now, any one judging these men by the current standards of common-sense
would, while praising the first as a model of moral prudence, condemn
the second as a fool who had brought his ruin upon himself, and curtly
dismiss him, if a bachelor, as being nobody's enemy but his own. But
before we indorse either of these judgments as adequate, let us consider
more minutely what in each case has been really done.

Let us start, then, with noting this. Whether a man invests his capital
in any productive machine and then lives on the interest, or else spends
it as income on his own personal pleasures, he is doing in one respect
precisely the same thing. He is giving something to other men in order
that they in return may make certain efforts for his benefit, of a kind
which he himself prescribes. This is obviously true when, spending his
capital as income, what he pays for is personal service, such as that of
a butler or footman who polishes his silver plate. It is equally true
when he pays for the plate itself. He is paying the silversmith so to
exert his muscles that an ounce or a pound of silver may be wrought into
a specific form. If he pays a toy-maker to make him a dancing-doll, he
is virtually paying him to dance in his own person. He is paying him to
go through a series of prescribed muscular movements. Similarly when he
pays a large number of men to construct a productive machine instead of
a doll or an ornament, he is paying for the muscular movements from
which the machine results. Here we come back to one of the main economic
truths to the elucidation of which our earlier chapters were devoted. It
was there pointed out that the machinery of the modern world owes its
existence to the fact that men of exceptional talent, by possessing the
control of goods which a number of other men require, are able in return
for the goods to make these other men exert themselves in a variety of
minutely prescribed and elaborately co-ordinated ways. In short, all
spending is, on the part of those who spend, a determination of the
efforts of others in such ways as the spender pleases. Further, as was
pointed out in an earlier chapter also, the only goods thus generally
exchangeable for effort are those common necessaries of existence for
which most men must always work, and which may here be represented by
food, the first and the most important of them. Hence, whenever the
question arises of how any given capital shall be treated--of whether it
shall be invested or else spent as income--this capital must be regarded
as existing in the indeterminate form of food, which is equally capable
of being treated in one way or the other. And any man's capital
represents for him, according to its amount, the power of feeding, and
so determining the actions of a definite number of other men for some
definite period. Since, therefore, the two capitalists whose conduct we
have been taking as an illustration have been supposed by us to possess
fifty thousand pounds apiece, we shall give precision to the situation
if we say that each, at starting, has the power of feeding, and so
determining the actions of, two hundred other men for a period of two

So much, then, being settled, let us consider these further facts. Both
the capitalists, as we set out with observing, have in employing their
capital the same ultimate object--namely, that of securing through the
purchased efforts of others a continuous supply of things which will
render their lives agreeable. And now in connection with this fact let
us go back to another, which has also been pointed out before, that all
efforts, the sole object of which is to please from moment to moment the
man who directs and pays for them, are, whether embodied in the form of
commodities or no, really reducible to some kind of personal service,
if a toy-maker, in return for food, makes a dancing-doll for another
man, he might just as well have pirouetted for so many hours himself;
and if the purchaser would be more amused by a man's antics than by a
puppet's, this is precisely what the toy-maker would have been set to
do. In short, if we consider only the economic side of the matter,
without reference to the moral, whenever a man spends anything on his
own personal pleasure, he is virtually paying some other man, or a
number of other men to dance for him.[24] What, therefore, both our
capitalists desire as their ultimate object, is to keep as many men as
they are able to provide with food always dancing for their pleasure, or
in readiness to do so when wanted; but in setting themselves to achieve
this object in their two different ways, what happens is as follows.

Both use their capital by dispensing it in the form of daily rations to
two hundred other men, on condition that these men do something; but the
first feeds the other men, not on condition that they dance for him, or
do anything that ministers to his own immediate pleasure, but on
condition that they construct a machine which will enable, as soon as it
is finished, a given amount of human effort to double the amount of food
which such effort would have produced otherwise. Thus, by the end of two
years--the time which we suppose to be required for the machine's
completion--though the original food-supply of the capitalist will all
have been taken up and disappeared, its place will have been taken by a
machine which will enable forever afterwards one-half of the two hundred
men to produce food for the whole. A hundred men, therefore, are left
for whom food can be permanently provided, without any effort to produce
it being made by these men themselves; and since of this annual surplus
a part--let us call it half--will be taken as interest on the machine by
the man with whose capital it was constructed, he will now have the
means of making fifty men dance for his pleasure in perpetuity; for as
often as they have eaten up one supply of food, this, through the agency
of the machine, will have been replaced by another.

Our second capitalist, meanwhile, who deals with his capital as income,
starts with setting the dancers to dance for his behoof at once; and he
keeps the whole two hundred dancing and doing nothing else, so long as
he has food with which to feed them. This life is charming so long as it
lasts, but in two years' time it abruptly comes to an end. The
capitalist's cupboard is bare. He has no means of refilling it. The
dancers will dance no more for him, for he cannot keep them alive; and
the efforts for two years of two hundred men, as directed by a man who
treats his capital as income, will now have resulted in nothing but the
destruction of that capital itself, and a memory of muscular movements
which, so far as the future is concerned, might just as well have been
those of monkeys before the deluge.

Now, if we take the careers of our two capitalists as standing for the
careers of two individuals only, and estimate them only as related to
these men themselves, we might content ourselves with indorsing the
judgment which conventional critics would pass on them, and say of the
one that he had acted as his own best friend, and dismiss the other as
nobody's enemy but his own. But we are, in our present inquiry, only
concerned with individuals as illustrating kinds of conduct which are,
or which might be, general; and the effects of their conduct, which we
here desire to estimate, are its effects of it, not on themselves, but
on society taken as a whole. If we look at the matter in this
comprehensive way, we shall find that the facile judgments to which we
have just alluded leave the deeper elements of our problem altogether

The difference between the ultimate results of the two ways of treating
capital will, to the conventional critic, seem to have been sufficiently
explained, by saying that the energy stored up in a given accumulation
of food reappears when employed in one way, in the efficiency of a
permanent machine; and is, when employed in the other, so far as human
purposes are concerned, as completely lost as it would have been had it
never existed. But if we reconsider a fact which was dwelt upon in our
last chapter, we shall see that the difference is really much greater
than this.

When the potential energy residing in so much food has been converted
into the energy of so much human labour, and when this is so directed
that a productive machine results from it, there is in the machine, as
Dr. Crozier puts it, an indefinitely larger amount of "pure economic
power," than that which has been expended in the work of the labourers'
muscles. While the energy of the labourers has merely resulted in a
bottle, or a cage, we may say, of sufficient strength, the genius of the
man who directed them has captured and imprisoned an elemental slave in
it, who, so long as the cage confines him, will supplement the efforts
of human muscle with his own. But when the energy latent in food is
converted into such efforts as dancing, the result produced is the
equivalent of the human effort only. Thus in the modern world of
scientific enterprise and invention, to invest capital in machinery and
then live on the interest from it, means to press into the service of
mankind an indefinite number of non-human auxiliaries, and year by year
to live on a part of the products which these deathless captives are
never tired of producing.

To spend capital as income on securing immediate pleasures means either
to forgo the chance of adding any new auxiliaries to those that we
possess already, or else to let those who are at our service already,
one after one, escape us--or, in other words, to make the productive
force now at the disposal of any prosperous modern country decline
towards that zero of efficiency from which industrial progress starts,
and which marks off helpless savagery from the first beginnings of

It is no doubt inconceivable, in the case of any modern nation, that a
climax of the kind just indicated could never reach its completion. If
all the capitalists, for example, of Great Britain or America, were
suddenly determined to live on their capital itself, they could do so
only by continuing for a considerable time to employ a great deal of it
precisely as it is employed at present. Indeed, so long as they
continued to demand the luxuries which machines produce, it might seem
that it was hardly possible for them to get rid of their capital at all.
But what would really happen may be briefly explained thus:--

If we take the case of any modern country, the amount of its income at
any given time depends for its sustentation on machines already in
existence; and its increase is dependent on the gradual supersession of
these by new ones yet more efficient. But the efficiency of the former
would soon begin to decrease, and would ultimately disappear altogether,
unless they were constantly repaired and their lost substance was
renewed; while the latter would never exist unless there were men to
make them. Hence, under modern conditions, in any prosperous and
progressive country, a large portion of what is called the manufacturing
class is always engaged, not in producing articles of consumption,
comfort, or luxury, but in repairing and renewing the machines by which
such articles are at present multiplied, or else in constructing new
machines which shall supplement or replace the old. Thus, in Great
Britain, towards the close of the nineteenth century, these makers and
repairers of machinery were, with the exception of coal-miners, the
industrial body whose proportional increase was greatest. In the modern
world the spending of capital as income is a process which, in
proportion as it became general, would accomplish itself by affecting
the position of men like these. It would consist of a withdrawal of men
who are at present occupied in maintaining existing machines, or else in
constructing new ones from their anvils, hammers, files, lathes, and
furnaces, and making them dance instead. This withdrawal would, in
proportion as it became general, render the construction of new machines
impossible, and would leave the efficiency of those now in use to
exhaust itself.

That such is the case is illustrated on a small scale by the conduct of
individuals who live on their capital now. If a farmer, whose capital
consists largely of an agricultural plant, desires to spend more than
his proceeds of his farm are worth, he virtually takes the men who have
been mending his barns and reapers, and sets them to build a buggy which
will take him to the neighbouring races. The varnish on the buggy is
bought with the rust on the reaper's blades; the smart, weather-proof
apron with the barn's unmended roof. If the managing body of a railroad
pays a higher dividend to the shareholders than can be got out of its
net earnings, the results are presently seen in cars that are growing
dirty, in engines that break down, in rotten sleepers, and in trains
that run off the track. The men who were once fed out of a certain
portion of the traffic receipts to keep these things in repair, are now
fed to dance for the shareholders, thus supplying them with spurious
dividends. A farm or a railroad which was managed on these principles
would ultimately cease to produce or to do anything for anybody; and if
all modern capital were managed in a similar way, all the multiplied
luxuries distinctive of modern civilisation would, one by one, disappear
like crops which were left to rot for lack of machines to reap them
with, and train services which had ceased because the engines were all
burned out.

That such a climax should ever, in any modern country, complete itself
cannot, let me say once more, be apprehended as a practical possibility;
but it is practically impossible only because the earlier stages of the
approach to it would lead to a situation that was intolerable long
before it ceased to be irreparable. And here we reach the point to
which the foregoing examination has been leading us. It is precisely
this course of conduct, the end of which would be general ruin, that any
attack on interest, by means of special taxation or otherwise, would, so
long as it lasted, stimulate and render inevitable. Let me point
out--though it ought in a general way to be self-evident--precisely how
this is.

We start with assuming--for, as we have seen already, so much is
conceded by those who attack interest to-day--that the owners of
capital, however their rights may be restricted, still have rights to it
of some kind. But a man's rights to his capital will not be rights at
all unless they empower him to use it in one way or another as a means
of ministering to his own personal desires; and it is possible for him
so to use it in one or other of two ways only--either by keeping it in
the form of some productive machine or plant, and living on a part of
the values which this produces, or by trenching on the substance of the
machine or the plant itself in the manner, and with the results, which
have just been explained and analysed. If, therefore, capitalists are to
be virtually deprived of their interest, either by means of a special
tax on "unearned incomes" or otherwise, but are yet permitted to enjoy
their capital somehow, no course is open to them but to employ for their
private pleasures the men by whom this capital, in such forms as
machines or railroads, is at present maintained, renewed, and kept from
lapsing into a state in which it would be unable to do or to produce
anything. And if any one still thinks that, by such a course of conduct,
if ever it became general, as it would do under these conditions, the
owners of capital would be injuring themselves alone, he need only
reflect a little longer on one of our suggested illustrations, and ask
himself whether the gradual deterioration of railroads would have no
effect on the world beyond that of impoverishing the shareholders. It
would obviously affect the many as much as it affected the few, and the
kind of catastrophe that would result from the deterioration of
railroads is typical of that which would result from the deterioration
of capital generally.

It would, then, be a sufficient answer to those who attack interest, and
propose to transfer it from its present recipients to the state, to
elucidate, as has here been done, the two following points: firstly,
that to interest as a means of enjoying wealth--the right to such
enjoyment itself not being here disputed--the only alternative is a
system which would thus prove fatal to everybody; and, further, that,
conversely, the enjoyment of wealth through interest not only possesses
this negative advantage, but is actively implicated in, and is the
natural corollary of, that progressive accumulation of force in the form
of productive machinery to which all the augmented wealth of the modern
world is due. By the identification of the enjoyment of capital with
the enjoyment of some portion of the products of it, the good of the
individual capitalist is identified with the good of the community; for
it will, in that case, be the object of all capitalists to raise the
productivity of all capital to a maximum; while a system which would
compel the possessor, if he is to enjoy his capital at all, to do so by
diminishing its substance and allowing its powers to dwindle, would
identify the only advantage he could possibly get for himself with the
impoverishment of everybody else, and ultimately of himself also.

But the crucial facts of the case have not been exhausted yet. There are
few phenomena of any complex society which are not traceable to more
causes than one, or at least to one cause which presents itself under
different aspects. Such is the case with interest. Its origin, its
functions, and its justification, in the modern world, must be
considered under an aspect, at which hitherto we have only glanced.

Throughout the present discussion we have been assuming that the
questions at issue turn ultimately on the character of human motive. On
both sides it has been assumed that men of exceptional powers will not
produce exceptional amounts of wealth, unless they are allowed the right
of enjoying some substantial proportion of it. This is a psychological
truth which, together with its social consequences, has been dealt with
elaborately in two of our earlier chapters. It was there shown that the
production of exceptional wealth by those men whose peculiar powers
alone enable them to produce it, involves efforts on their part which,
unlike labour, cannot be exacted of them by any outside compulsion, but
can only be educed by the prospect of a secured reward; and that this
reward consists, as has just been said, of the enjoyment of a part of
the product proportionate to the magnitude of the whole. But what the
proportion should be, and in what manner it should be enjoyed, were
questions which were then passed over. They were passed over in order
that they might be discussed separately. It was pointed out, however,
that the reward, in order to be operative, must be such as will be felt
to be sufficient by these men themselves, and that its precise amount
and quality can be determined by them alone--just as, if what we desire
is to coax an invalid to eat, we can coax him only with food which he
himself finds appetising. Let us now take these questions up again, and
examine them more minutely, and we shall find that interest is justified
from a practical point of view by the fact that the enjoyment of capital
by this particular means is not only the sole manner of enjoying it
which is consistent with the general welfare, but also constitutes the
advantage which, in the eyes of most great producers, gives to capital
the larger part of its value, and renders the desire of producing it
efficient as a social motive.

The reasons why the right to interest forms, in the eyes of the active
producers of capital, the main object of their activity are to be found,
firstly, in the facts of family affection, and, secondarily, in those of
general social intercourse, which together form the medium of by far the
larger part of our satisfactions. In spite of the selfishness which
distinguishes so much of human action, a man's desire to secure for his
family such wealth as he can is one of the strongest motives of human
activity known; and the fact that it operates in the case of many who
are notoriously selfish otherwise, shows how deeply it is ingrained in
the human character. One of the first uses to which a man who has
produced great wealth puts it is in most cases to build a house more or
less proportionate to his means; and it is his pride and pleasure to see
his wife and children acclimatise themselves to their new environment.
But such a house would lose most of its charm and meaning for him if the
fortune which enabled him to live in it were to dwindle with each day's
expenditure, and his family after his death were to be turned into the
street, beggars. If each individual were a unit whose interests ended
with himself; if generations were like stratified rocks, superposed one
on another but not interconnected; if--to quote a pithy phrase, I do not
know from whom--"if all men were born orphans and died bachelors," then
the right to draw income from the products of permanently productive
capital would for most men lose much of what now makes it desirable.

But since individuals and generations are not thus separated actually,
but are, on the contrary, not merely as a scientific fact, but as a fact
which is vivid to every one within the limits of his daily consciousness
dovetailed into one another, and could not exist otherwise, a man's own
fortune, with the kind of life that is dependent on it, is similarly
dovetailed into fortunes of other people, and his present and theirs is
dovetailed into a general future.

We have seen how this is the case with regard to his own family; but the
matter does not end there. Individual households do not live in
isolation; and there are for this fact two closely allied reasons. If
they did there could be no marriage; there could also be nothing like
social intercourse. It is social intercourse of a more or less extended
kind that alone makes possible, not only love and marriage, but most of
the pleasures that give colour to life. We see this in all ranks and in
all stages of civilisation. Savages meet together in numerous groups to
dance, like civilised men and women in New York or in London. The feast,
or the meal eaten by a large gathering, is one of the most universal of
all human enjoyments. But in all such cases the enjoyment involves one
thing--namely, a certain similarity, underlying individual differences,
between those persons who take part in it. Intimate social intercourse
is, as a rule, possible only between those who are similar in their
tastes and ideas with regard to the minute details which for most of us
make up the tesseræ of life's daily mosaic--similar in their manners,
in their standards of beauty and comfort, in their memories, their
prospects, or (to be brief) in what we may call their class
habituations. This is true of all men, be their social position what it
may. It is true, of course, that the quality of a man's life, as a
whole, depends on other things also, of a wider kind than these. It
depends not only on the fact, but also on his consciousness of the fact,
that he is a citizen of a certain state or country, though with most of
its inhabitants he will never exchange a word; or that he is a member of
a certain church; or that, being a man and not a monkey, his destiny is
identified with that of the human species. But, so far as his enjoyment
of private wealth is concerned, each man as a rule, though to this there
are individual exceptions, enjoys it mainly through the life of his own
_de facto_ class--the people whose manners and habits are more or less
similar to his own, because they result from the possession of more or
less similar means. He is, therefore, not interested in the permanence
of his own wealth only. He is equally interested in the permanence of
the wealth of a body of men, the life of which must, like that of all
corporations, be continuous.

There is in this fact much more than at first appears. Let us go back to
a point insisted on in the previous chapter. It was there shown, in
connection with the question of abstract justice, that those who attack
interest on the ground that it is essentially income for which its
recipients give nothing in return, fall into the error of ignoring the
element of time, without reference to which the whole process of life is
unintelligible. It was shown, by various examples, that in a large
number of cases the efforts which ultimately result in the production of
great wealth do not produce it till after, often till long after, the
original effort has come altogether to an end. Let us now take this
point in connection, not with abstract theories, but with the concrete
facts of conduct. Here again those who attack interest fall into the
same error. For example, in answer to arguments used by me when speaking
in America, one socialistic critic eagerly following another called my
attention by name to persons notoriously wealthy, some of whom had never
engaged in active business at all, while others had ceased to do so for
many years; and demanded of me whether I contended that idlers such as
these are doing anything whatever to produce the incomes which they are
now enjoying. If they are, said the critics, let this wonderful fact be
demonstrated. If they are not, then it must stand to reason that the
community will gain, and cannot possibly suffer, by gradually taking the
incomes of these persons away from them, and rendering it impossible
that incomes of a similar kind shall in the future be ever enjoyed by

The general nature of the error involved in this class of argument can
be shown by a very simple illustration. In many countries the
government year by year makes a large sum by state lotteries. This may
be a vicious procedure, but let us assume for the moment that it is
legitimate, and that everybody is interested in its perpetuation. The
largest of the prizes drawn in such lotteries is considerable--often
amounting to more than twenty thousand pounds. Now, as soon as the
drawing on any one occasion had been accomplished, it might be argued
with perfect truth, in respect of that occasion only, that, the man who
had won such fortune having done nothing to produce it, the community
would be so much richer if the government, having paid the money to him,
were to take it all back again by a special tax on winnings. This would
be true with respect to that one occasion; but if any government were to
follow such a procedure systematically, no one would ever buy a lottery
ticket again, and the whole lottery system would thenceforth come to an

What is true of wealth won in lotteries is true of wealth in general. If
the desire of possessing wealth is in any way a stimulus to the
production of it, those who are motived to produce it by this desire
to-day are motived by the desire of a something which they see to be
desirable and attainable because they see it around them, embodied in
the position of others, as the final result of the efforts of a
long-past yesterday. If this result were never to be seen realised, no
human being would make any effort to achieve it.

Let us--to go into particulars--suppose that the sole desire which moves
exceptional men to devote their capacities to the augmentation of their
country's wealth is the desire to join a class which, whether idle or
active otherwise--whether devoted to mere pleasure or to philanthropy,
or an enlightened patronage of the arts, or to speculative thought and
study--is itself in an economic sense altogether unproductive. In order
to join such a class, and to work with a view of joining it, society
must be so organised that such a class can exist; and the fact of its
existence constitutes the main moral magnet which, on our present
hypotheses, is permanently essential to the development of the highest
economic activity. Such being the case, then, the following conclusion
reveals itself, which, although it may seem paradoxical, will be found
on reflection to be self-evident--the conclusion namely, that a class
which, if considered by itself, is absolutely non-productive, may, when
taken in connection with the social system as a whole, be an essential
and cardinal factor in the working machinery of production,
constituting, as it would do by the mere fact of its existence, the
charged electric accumulator by which the machinery is kept in motion;
just as the mere existence of men, seen to be secure in their possession
of the prizes of past lotteries, is the magnet which alone can make
other men buy tickets for the lotteries of the future.

I have given this case as an assumption; but it is not an assumption
only. The desire for wealth as a means of living in absolute idleness is
probably confined, as a fact, in all countries to a few. In America
especially it is a matter for surprise to strangers that men who have
made fortune beyond the possibilities of pleasurable expenditure so
rarely retire on them to cultivate the pursuits of leisure. But even in
America, if they do not value leisure for themselves, they value it for
their women, to whom, there as in all countries, four-fifths of the
charm and excitement of private life are due; and the sustained
possibility of leisure, even if not the enjoyment of it--a possibility
which can rest only on a basis of sustained fortunes--is the main
advantage which, in all civilised countries, gives wealth its meaning
for those who already possess it, and its charm for those who are, in
order to possess it, exerting at any given moment their energies and
their intellect in producing it.

The source of such sustained fortunes, in their distinctively modern
form, is, as we have seen already, such and such forces of nature,
which, captured and embodied in machines and other appliances by the
masters of science and men of executive energy, and subsequently
directed by other men of cognate talents, supplement the efficiency of
ordinary human labour, thus yielding the surplus of which modern
fortunes are a part, the remainder forming a fund which diffuses itself
throughout the mass of the community. That part of the surplus which
constitutes such fortunes is interest; and now let us sum up what in
this and the previous chapter our examination of the criticisms directed
against interest has shown us.

In the first place, then, we saw that the theoretical attack on
interest, on the ground that it is income which is not earned by the
recipients, but is virtually taken by the few from the products of the
labour of the many, is chimerical in its moral and false in its economic

We saw, in the second place, coming down to the practical aspects of the
question, that interest is the only form in which the owners of capital
can enjoy their wealth at all, without drying up the sources from which
most modern wealth springs, thus bringing ruin to the community no less
than to themselves.

We saw, in the third place, that, quite apart from the welfare of the
community, interest constitutes, for the owners of wealth themselves,
the means of enjoying it which mainly makes it desirable, and the object
for the sake of which, at any given moment, the master spirits of
industry are engaged in producing and increasing it.

The reader must observe, however, that this conclusion is here stated in
general terms only. It has not been contended--for this question has not
been touched upon--that interest may not, when received in certain
amounts, be justifiably made the subject of some special taxation. Any
such question must be decided by reference to special circumstances,
and cannot be discussed apart from them. Nor has it been contended that,
within certain limits, the power of bequest is not susceptible of
modification without impairing the energies of the few or the general
prosperity of the many. The sole point insisted on here is this: that
any special tax on interest, or any tampering with the powers of
bequest, begins to be disastrous to all classes alike, if it renders,
and in proportion as it renders to any appreciable degree, the natural
rewards of the great producers of wealth less desirable in their own
eyes than they are and otherwise would be.


[23] Mr. G. Wilshire, in his detailed criticism of my American speeches,
states twice over the modern socialistic doctrine as to this point. The
maker or inheritor of capital, he says, could, under socialism, "buy all
the automobiles he wanted, all the diamonds, all the champagne; or he
could build a palace. In other words, he could spend his income in
consumable goods, but he could not invest either in productive machinery
or in land."

[24] This is merely saying that all economic effort has, for its
ultimate aim, a desirable state of consciousness, which might be
contemptible if it really depended on looking on at dances, or refined
if it depended on the cultivation of flowers, or listening to great
singers, or witnessing the performance of great plays, or on the
enlargement of the mind by travel.



Having now dealt with two of those three ideas or conceptions which,
though not necessarily connected with the specific doctrines of
socialism, owe much of their present diffusion to the activity of
socialistic preachers--that is to say, the idea, purely statistical,
that labour, as contrasted with the directive ability of it, actually
produces much more than it gets, and the further idea that the many
could ameliorate their own position by appropriating the interest now
received by the few; having dealt with these two ideas, it remains for
us to consider the third--namely, that which is generally suggested by
the formula Equality of Opportunity, or, more particularly (for this is
what concerns us here), equality of opportunity in the domain of
economic production.

We must start with recollecting that if the wealth of a country depends
mainly, as we have here seen that it does, on the efforts of those of
its citizens whose industrial talent is the greatest, the more
effectively all such talent is provided with an opportunity of exerting
itself the greater will the wealth and prosperity of that country be. In
other words, if potential talent is to be actualised, opportunity is as
needful for its exercise as is the stimulus of a proportionate reward.
That economic opportunity ought, therefore, to be equalised, so far as
possible, is, as an abstract principle, too obvious to need
demonstration. But abstract principles are useless till we apply them to
a concrete world; and when we apply our abstract doctrine of opportunity
to the complex facts of society and human nature, a principle so simple
in theory will undergo as many modifications as a film of level water
will if we spill it over an uneven surface.

The first fact which will confront us, when we come down from theory to
facts, is one which could not be more forcibly emphasised than it has
been by a socialistic writer,[25] whose utterances were quoted in one of
our previous chapters. This is the fact that, in respect of their powers
of production, just as of most others, human beings are in the highest
degree unequal. They are unequal in intellect and imagination. More
especially they are unequal in energy, alertness, executive capacity,
initiative and in what we may describe generally as practical driving
force. Such being the case, then, if it could actually be brought about
that every individual at a given period of his life should start with
economic opportunities identical with those of his contemporaries, each
generation would be like horses chosen at haphazard, and started at the
same instant to struggle over the same course in the direction of a
common winning-post. And what would be the result? A few individuals
would be out of sight in a moment; the mass at various distances would
be struggling far behind them, and a large residuum would have been
blown before it had advanced a furlong. Thus, by making men's
adventitious opportunities equal, we should no more equalise the result
for the sake of which the opportunities were demanded than we should
give every cab-horse in London a chance of winning the Derby by allowing
it on Derby Day to go plodding over the course at Epsom. On the
contrary, by inducing all to contemplate the same kind of success, we
should be multiplying the sense of failure and dooming the majority to a
gratuitous discontent with positions in which they might have taken a
pride had they not learned to look beyond them.

And now, from this fact, to which we shall come back presently, let us
turn to the question of how, and in what respects, equality of
opportunity is in practical life attainable.

The most obvious manner in which an approach to such equality can be
made is by an equalisation of opportunities for education in early life,
or, in other words, by a similar course of schooling, a similar access
to books, and similar leisure for studying them. But even here, at this
preliminary stage, we shall find that the equality of opportunity is to
a large extent illusory. Let us suppose that there are two boys, equal
in general intelligence, and unequal only in their powers of mental
concentration, who start their study of German side by side in the same
class-room. One boy, in the course of a year or so, will be able to read
German books almost as easily as books in his own language, while the
other will hardly be able to guess the drift of a sentence without
laborious reference to his hated grammar and dictionary. Now, when once
a situation such as this has arisen, the opportunities of the two boys
have ceased to be equal any longer. The one has placed himself at an
indefinite advantage over the other, which is quite distinct from the
superiority originally inherent in himself. Among the educational
opportunities which reformers desire to equalise, one of the chief is
that of access to adequate libraries; and it is, they say, in this
respect more perhaps than any other that the rich man has at present an
unfair advantage over the poor. It is virtually this precise advantage
that will now be in possession of the boy who has thus far outstripped
his classmate. In his mastery of German he has a key to a vast
literature--a key which the other has not. He is now like a rich man
with an illimitable library of his own, while the other by comparison is
like a poor man who can get at no books at all. Thus if opportunity, in
its most fundamental form, were equalised for all boys, no matter how
completely, the equality would be only momentary. It would begin to
disappear by the end of the first few months, not because the boys would
still, as they did at starting, be bringing to their tasks intrinsically
unequal faculties, but because some of them would have already
monopolised the aid of an adventitious knowledge by which the practical
efficiency of their natural faculties would be multiplied.

But education is merely a preliminary to the actual business of life.
Let us pass on to the case of our equally educated youths when they
enter on the practical business of making their own fortunes. What kind
of equal opportunity can be possibly provided for them now?

Since socialists are the reformers who, in dealing with objects aimed
at, are least apt to be daunted by practical difficulties, let us see
how equality of opportunity in business life is conceived of and
described by them. The general contention of socialists in this respect
is, says one of their best-known American spokesmen,[26] "that the fact
that capital is now in the hands of private persons gives them an unfair
advantage over those who own nothing," for capital consists of the
implements of advantageous production; and socialists, he says, would
secure an equality of industrial opportunity for all by "vesting the
ownership of the means of production in the state"; the result of which
procedure would, he goes on, be this: "that every one would have his own
canoe, and it would be up to each to do his own paddling."

Now, purists in thought and argument might make it a subject of
complaint, perhaps, that the writer, as soon as he reaches a vital part
of his argument, should lapse into the imagery of an old music-hall
song. But such an objection would be very much misplaced, for the ideas
entertained by socialists as to this particular point closely resemble
those which make music-hall songs popular. They consist of familiar
images which are accepted without being analysed; and the image of man
seated in an industrial canoe of his own, and paddling it just as he
pleases without reference to anybody else, very admirably represents the
lot which socialists promise to everybody, and which dwells as a
possibility in the imagination of even their serious thinkers. But let
us take this dream in connection with facts of the modern world, which
these men, in much of their reasoning, themselves recognise as
unalterable, and we shall see it give place to realities of a very
different aspect.

To judge from our author's language, one would suppose that modern
capital was made up entirely of separate little implements like
sewing-machines, and that every one would, if the state were the sole
capitalist, receive on application a machine of the same grade, which he
might take away with him, and use or break in a corner. Now, if modern
capital were really of this nature, the state no doubt might conceivably
do something like what the writer suggests, in the way of dealing out
similar industrial opportunities to everybody. But, as he himself is
perfectly well aware, the distinctive feature of capital in the modern
world is one which renders any such course impossible. Modern capital,
as a whole, in so far as it consists of implements, consists not of
implements which can be used by each user separately. It consists of
enormous mechanisms, with the works and structures pertaining to them,
which severally require to be used by thousands of men at once, and
which no one of the number can use without reference to the operations
of the others. If the state were to acquire the ownership of all the
steel-mills at Pittsburg, how could it do more than is done by their
present owners, to confer on each of the employés any kind of position
analogous to that of a man "who has his own canoe"? The state could just
as easily perform the literal feat of cutting up the _Lusitania_ into a
hundred thousand dinghys, in each of which somebody would enjoy the
equal opportunity of paddling a passenger from Sandy Hook to

But we will not tie our author too closely to the terms of his own
metaphor. The work from which I have just quoted is a booklet[27] in
which he devoted himself to the task of refuting in detail the
arguments urged by myself in the course of my American speeches. We
will, therefore, turn to his criticism of what, in one of my speeches, I
said about the state post-office, and we shall there get further light
with regard to his real meaning. I asked how any sorter or
letter-carrier employed in the post-office by the state was any more his
own master, or had any more opportunities of freedom, than a messenger
or other person employed by a private firm. Our author's answer is this:
"That the public can determine what the wages of a postman shall
be--that is, they can, if they so choose (by their votes), double the
wages now prevailing." Therefore, our author proceeds, "the postal
employé, in a manner, may be considered as a man employing himself."
Now, first let me observe that, as was shown in our seventh chapter,
wages under socialism, just as under the present system, could be no
more than a share of the total product of the community; and the claims
advanced to a share of this by any one group of workers would be
consequently limited by the claims of all the others. The question,
therefore, of whether the postmen's wages should be doubled at any time,
or whether they might not have to be halved, would not depend only on
votes, but, also and primarily, on the extent of the funds available;
and in so far as it depended on votes at all, the votes would not be
those of the postmen. They would be the votes of the general public,
and any special demand on the part of one body of workers would be
neutralised by similar demands on the part of all the others. Further,
if these "employers of themselves" could not determine their own wages,
still less would they determine the details of the work required of
them. A postman, like a private messenger, is bound to do certain
things, not one of which he prescribes personally to himself. At stated
hours he must daily be present at an office, receive a bundle of
letters, and then set out to deliver them at private doors, in
accordance with orders which he finds written on the envelopes. Such is
the case at present, and socialism would do nothing to modify it. If our
author thinks that a man, under these conditions, is his own employer,
our author must be easily satisfied, and we will not quarrel with his
opinion. It will be enough to point out that the moment he descends to
details his promise that socialism would equalise economic opportunity
for all reduces itself to the contention that the ordinary labourer or
worker would, if the state employed him, have a better chance of
promotion and increased wages than he has to-day, when employed by a
private firm, and (we may add, though our author does not here say so)
that some sort of useful work would be devised by the state for

Now, although every item of this contention, and especially the last, is
disputable, let us suppose, for argument's sake, that it is, on the
whole, well founded. Even so, we have not touched the real crux of the
question. We have dealt only with the case of the ordinary worker, who
fulfils the ordinary functions which must always be those of nine men
out of every ten, let society be constituted in what way we will. It
remains for us to consider the case of those who are fitted, or believe
themselves to be fitted, for work of a wider kind, and who aspire to
gain, by performing this, an indefinitely ampler remuneration. This
ambitious and exceptionally active class is the class for which the
promise of equal opportunities possesses its main significance, and in
its relation to which it mainly requires to be examined. Indeed, the
writer from whom we are quoting recognises this himself; for he gives
his special attention to the economic position of those who, in greater
or less degree, are endowed with what he calls "genius"; and in order to
illustrate how socialism would deal with these, he cites two cases from
the annals of electrical engineering, in which opportunities, not
forthcoming otherwise, were given by the state to inventors of realising
successful inventions.

Now, what our author and others who reason like him forget, is that the
opportunities with which we are here concerned differ in one
all-important particular from those which concern us in the case either
of education or of ordinary employment. If one boy uses his educational
opportunities ill, he does nothing to prejudice the opportunities of
others who use them well. Should a sorter of letters, who, if he had
been sharp and trustworthy, might have risen to the highest and
best-paid post in his department, throw his opportunities away by
inattention or otherwise, the loss resulting is confined to the man
himself. The opportunities open to his fellows remain what they were
before. But when we come to industrial activity of those higher and
rarer kinds, on which the sustained and progressive welfare of the
entire community depends, such as invention, or any form of far-reaching
and original enterprise, the kind of opportunity which a man requires is
not an opportunity of exerting his own faculties in isolation, like a
sorter who is specially expert in deciphering illegible addresses. It is
an opportunity of directing the efforts of a large number of other men.
Apart from the case of craftsmanship and artistic production, all the
higher industrial efforts are reducible to a control of others, and can
be made only by men who have the means of controlling them. Since this
is one of the principal truths that have been elucidated in the present
volume, it is sufficient to reassert it here, without further comment.
If, therefore, a man is to be given the opportunity of embodying and
trying an invention in a really practical form, it will be necessary to
put at his disposal, let us disguise the fact as we may, the services of
a number of other men who will work in accordance with his orders. This,
as we have seen already, is what is done by the ordinary investor
whenever he lends capital to an inventor. He supplies him with the food
by which the requisite subordinates must be fed; and the state, were
the state the capitalist, would do virtually the same thing. It could
give him his opportunity in no other way.

Further, if the invention in question turns out to be successful--here
is another point which has already been explained and emphasised--the
wage-capital which has been consumed by the labourers is replaced by
some productive implement, which is more than the equivalent of the
labour force spent in constructing it. If, on the other hand, the
invention turns out to be a failure, the wage-capital is wasted, and, so
far as the general welfare is concerned, the state might just as well
have thrown the whole of it into the sea. Since, then, the opportunities
which the state would have at its disposal, would consist at any moment
of a given amount of capital, and since any portion of this which was
used unsuccessfully would be lost, the number of opportunities which the
state could allocate to individuals would be limited, and each
opportunity which was wasted by one man would diminish the number that
could be placed at the disposal of others.

Now, any one who knows anything of human nature and actual life knows
this--that the number of men who firmly and passionately believe in the
value of their own inventions, or other industrial projects, is far in
excess of those whose ideas and projects have actually any value
whatsoever. When the _Great Eastern_, the largest ship of its time, had
been built on the Thames by the celebrated engineer Brunel, its
launching was attended with unforeseen and what seemed to be insuperable
difficulties. Mr. Brunel's descendants have, I believe, still in their
possession, a collection of drawings, sent him by a variety of
inventors, and representing all sorts of devices by which the launching
might be accomplished. All were, as the draughtsmanship was enough to
show, the work of men of high technical training; but the practical
suggestions embodied in one and all of them could not have been more
grotesque had they emanated from a home for madmen. To have given an
equality of opportunity to all this tribe of inventors of putting their
devices to the test would have probably cost more than the building of
the ship itself, and the ship at the end would have been stranded in the
dock still. This curious case is representative, and is sufficiently
illustrative of the fact that opportunity of this costly kind could be
conceded to a few only of those who would demand, and believe themselves
to deserve it; and the state, as the trustee of the public, would have,
unless it were prepared to ruin the nation, to be incomparably more
cautious than any private investor.[28]

Of the general doctrine, then, that the opportunities of all should be
equal, we may repeat that, as an abstract proposition, it is one which
could be contested by nobody; but we have seen that, when applied to
societies of unequal men, and to the various tasks of life, its original
simplicity is lost, and it does not become even intelligible until we
divest it of a large part of its implications. Economic or industrial
opportunity is, we have seen, of three kinds: firstly, educational
opportunity; secondly, the opportunity of performing and receiving the
full equivalent of an ordinary task or service, such as that of a
postman, the value of which depends on its conformity to a prescribed
pattern or schedule; and thirdly, opportunity of directing the work of
others, thereby initiating new enterprises or realising new
inventions--a kind of opportunity requiring the control of capital,
which capital, whether provided by the state or otherwise, would be lost
to the community unless it were used efficiently.

With regard to educational opportunity--it has been seen that it is
possible to equalise this, approximately if not entirely, at a given
time in the early lives of all, but that it would be possible to
maintain the equality for a short time only.

With regard to opportunities of earning a livelihood subsequently by
performing one or other of those ordinary and innumerable tasks which
must always fall to the lot of four men out of every five, we may say
that an equalisation of opportunities of this kind is the admitted
object of every reformer and statesman who believes that the prosperity
of a country is synonymous with the welfare of its inhabitants. In
achieving this object there are, however, two difficulties--one being
the difficulty, occasional and often frequent in any complex society, of
devising work which has any practical value, and replaces its own cost,
for all those who are able and willing to perform it; the other being
the difficulty which arises from the existence of persons who are
incapacitated, by some species of vice, from performing, or from
performing adequately, any useful work whatever. We must here content
ourselves with observing that the official directors of industry, who
would constitute the state under socialism, would be no more competent
to solve the first than are the private employers of to-day, while there
is nothing in the scheme of society put forward by socialists, which
even purports to supply any solution of the second, other than a more
drastic application of the methods applied to-day.

Thirdly, with regard to equality of opportunity for those whose main
ambition is not to be provided with some task-work performable by their
own hand, but to achieve some position which will enable them to
prescribe tasks to others, and thus do justice to their real or supposed
talents by the construction of great machines, or the organisation of
great enterprises--in other words, with regard to those persons whose
ambition is to obtain what are called the prizes of life, and who think
themselves treated unjustly if they find themselves unable to gain
them--we have seen that to provide equal opportunities for all or even
for most of these, is in the very nature of things impossible. The
fundamental reason of this, let me say once more, is the fact that the
number of men possessing sufficient talent to conceive ambitious schemes
of one kind or another far exceeds the number of those whose talents are
capable of producing any useful results; and to give to this majority
opportunities of testing their projects by experiment would be merely to
deplete the resources of the entire nation for the sake of demonstrating
to one particular class that abortive talents are worse than no talents
at all.

Here we are in the presence of a fact far wider than this special
manifestation of it. In the animal and the vegetable world, no less than
in the human, the successes of nature are the siftings of its partial
failures; and in order to secure such services as are really productive
it must always be necessary to squander opportunities to a certain
extent in the testing of talents which ultimately turn out to be barren.
But cases of this kind may, at all events, be reduced to a minimum; and
the reduction of their number is possible, because they are largely an
artificial product. In order to understand how this is, we must go back
again to the question of equality of opportunity in education, and
consider it under an aspect which has not yet engaged our attention.

We started with supposing the establishment of a system of education
which would offer to all the same books and teachers, and also--for this
was part of our assumption--equal leisure to profit by them; and we
noted how soon opportunities would cease to be equal on account of the
different uses which would be made of them by different students. What
must now be noted is that as matters have been conducted hitherto,
attempts to make educational opportunities equal do tend to produce an
equality of a certain kind. Though they have no tendency to equalise
powers of achievement, they tend to produce an artificial equality of
expectation. In order to elucidate the nature of this fact, and its
significance, I cannot do better than quote a passage from Ruskin,
admirable for its trenchant felicity, which, since it occurs in a book
much admired by socialists, may be commended to their special
attention.[29] Economic demand, Ruskin says, is the expression of
economic desires; but the constitution of human nature is such that
these desires are divisible into two distinct kinds--desires for the
commodities which men "need," and desires for commodities which they
"wish for." The former arise from those appetites and appetencies in
respect of which all are equal. They are virtually a fixed quantity, and
the economic commodities requisite for their healthy satisfaction
constitute a minimum which is virtually the same for all men. The
latter, instead of being fixed, are capable of indefinite variation, and
in these--the desires for what men "wish for" but do not "need"--we have
the origin "of three-fourths of the demands existing in the world."
"These demands are," he proceeds, "romantic. They are founded on
visions, idealisms, hopes, and affections, and the regulation of the
purse is, in its essence, regulation of the imagination and the heart."

With the demands which originate in men's equal needs we are not
concerned here. It is impossible to modify them appreciably either by
education or otherwise; but the desires or wishes which Ruskin so
happily calls "romantic" vary in intensity and character to an almost
indefinite degree, not only in different individuals, but also in the
same individuals when submitted to different circumstances. Those of
them, indeed, which are most generally felt are often, to speak
strictly, not so much desires as fancies; and while the image of their
fulfilment may please or amuse the imagination, their non-fulfilment
produces no sense of want. So long as they are merely fancies, they
raise no practical question. They raise a practical question only when
their insistence is such that their non-fulfilment produces an active
sense of privation; and whether in the case of any given individual
they reach or do not reach this pitch of intensity depends upon two
things. One of these is the individual's congenital temperament, his
talents, his strength of will, and the vividness or vagueness of his
imagination. Education, understood in its more general sense, is the
other. Now, men varying as they do in respect of their congenital
characters, the strength of their romantic wishes bears naturally some
proportion to their own capacities for attempting to satisfy these
wishes for themselves. Few men, for example, have naturally a strong
wish for conditions which will enable them to exercise exceptional
power, unless they are conscious of possessing exceptional powers to
exercise. Hence, though this consciousness is in many cases deceptive,
the struggle of men for power is confined within narrow limits, and the
disappointments which embitter those who fail to attain it are naturally
confined within narrow limits also. So long as matters stand thus, the
majority of men are unaffected. But wishes which are naturally confined
to exceptional men, who are more or less capable of realising them, are
susceptible by education of indefinite extension to others who are not
so qualified; and in the case of these last, the results which they
produce are different. They multiply the number of those who demand
preferential opportunities, in order that they may enter on a struggle
in which they must ultimately fail.

They multiply the number of those, to a still greater extent, who demand
that positions or possessions shall be somehow provided for them by
society, without reference to any struggle on their own part at all. The
artificial diffusion of "wish" among these two distinguishable classes
is thus accomplished by education in somewhat different ways; but the
_modus operandi_ is in one respect the same in both. It consists of an
artificial enlarging, in the case of all individuals alike, of the ideas
entertained by them of their natural social rights; and an active
craving is thus generalised for possessions and modes of life, which
nine men out of ten would otherwise have never wasted a thought upon,
and which not one out of ten can possibly make his own. How easily this
idea of rights is susceptible of enlargement by teaching, and how
efficient it is in creating a desire where none would have existed
otherwise, is vividly illustrated by those not infrequent cases in which
men, who for half their lives have considered themselves fortunate in
the possession of moderate affluence, have suddenly been led to suppose
themselves the heirs of peerages or great estates, and have died insane
or bankrupt in consequence of their vain endeavours to secure rank or
property which, had it not been for a purely adventitious idea, would
have affected their hopes and wishes no more than the moon did. It is
precisely in this manner that much of the education of to-day operates
in consequence of current attempts to equalise it[30]; and since
education is the cause of the evils here in question, it is in some
reform of education that we must hope to find a cure. What the general
nature of this reform would be can be indicated in a few words. It would
not involve a reversal, it would involve a modification only, of the
principle now in vogue, and can, indeed, best be expressed by means of
the same formula, if we do but add to it a single qualifying word--that
is to say, the word "relative" prefixed to the word "equality," when we
speak of equality of opportunity as the end at which we ought to aim.
Let me explain my meaning.

The logical end of all action is happiness; and happiness, so far as it
depends on economic conditions at all, is an equation between desire and
attainment. The capacities of men being unequal, and the objects of
desire which they could, under the most favourable circumstances, make
their own, being unequal likewise, the ideal object of education, as a
means to happiness, is twofold. It is, on the one hand, so to develop
each man's congenital faculties as to raise them to their maximum power
of providing him with what he desires; and on the other hand to limit
his desires, by a due regulation of his expectations, to such objects
as his faculties, when thus developed, render approximately if not
completely attainable. Thus, relatively to the individual, the ideal
object of education is in all cases the same; but since individuals are
not equal to one another, education, if it is to perform an equal
service for each, must be in its absolute character to an indefinite
extent various; just as a tailor, if he is to give to all his customers
equal opportunities of being well dressed, will not offer them coats of
the same size and pattern. He will offer them coats which are equal only
in this--namely, their equally successful adaptation to the figures of
their respective wearers.

Of course, so to graduate any actual course of education that in the
case of each individual it is the best which it is possible to conceive
for him--that it should at once enable him to make the most of his
powers, and "regulate," as Ruskin says, "his imagination and his hopes"
in accordance with them, would require a clairvoyance and prevision not
given to man; but the end here specified--namely, an equality of
opportunity which is relative--is the only kind of equality which is
even theoretically possible; and it is one, moreover, to which a
constant approximation can be made. The absolute equality which is
contemplated by socialists, and by others who are more or less vaguely
influenced by socialistic sentiment, is, on the contrary, an ideal which
either could not be realised at all, or which, in proportion as it was
realised, would be ruinous to the nation which provided it, and would
bring nothing but disappointment to those who were most importunate in
demanding it. The only conceivable means, indeed, by which it could be
extended beyond the first few years of life, would be by a constant
process of handicapping--that is to say, by applying to education the
same policy that trade-unions apply to ordinary labour. If one
bricklayer has laid more bricks than his fellows, he virtually has to
wait until the others have caught him up. Similarly, if equality of
opportunity, other than an equality that is relative, were to be
maintained in the sphere of education, a clever boy who had learned to
speak German in a year would have to be coerced into idleness until
every dunce among his classmates could speak it as well as he; and a
similar process would be repeated in after-life. This policy, as has
been pointed out already, is, even if wasteful, not ruinous in the
sphere of ordinary labour--a fact which shows how wide the difference is
between the ordinary faculties, as applied to industry, and the
exceptional; but no one in his senses, not even the most ardent apostle
of equality, would dream of recommending its application to efforts of a
higher kind, and demand that the clever boys should periodically be made
to wait for the stupid, or that the best doctor in the presence of a
great pestilence should not be allowed to cure more patients than the
worst one.

If, then, it is, as it must be, the ideal aim of social arrangements
generally to enable each to raise his capacities to their practical
maximum, and adjust his desires and his expectations to the practical
possibilities of attainment, "relative equality of opportunity," firstly
in education and secondly in practical life, is a formula which
accurately expresses the means by which this end is to be secured; but
the absolute equality which is contemplated by socialists and others is
an ideal which, the moment we attempted to translate it into terms of
the actual, would begin to fall to pieces, defeating its own purpose;
and there is nothing in socialism, were socialism otherwise practicable,
any more than there is the existing system, which would obviate this

Indeed, it may be observed further that, though the idea of equality of
opportunity in general is not inconsistent with a socialistic scheme of
society, as socialists of the more thoughtful kind have now come to
conceive of it, it belongs distinctively to the domain of the fiercest
individual competition. For in so far as socialism differs from ordinary
individualism, it differs from it in this--that, instead of encouraging
each man to do his utmost because what he gets will be proportionate to
what he does, it aims at establishing a greater equality in what men get
by making this independent of whether they do much or little; in which
case the main concern of the individual would be the certainty of
getting what he wanted, not the opportunity of producing it.

The three ideas or conceptions, then, which have engaged our attention
in this and the three preceding chapters--namely, the idea that labour
does, as a statistical fact, produce far more in values than it at
present gets back in wages; the idea that the mass of the population
could permanently augment its resources by confiscating all dividends as
fast as they became due, and the idea that it is possible to provide for
unequal men, for more than a moment of their lives, equal opportunities
of experimenting with their real or imaginary powers, are ideas, indeed,
which have all the vices characteristic of socialistic thought; but the
first and the third have no necessary connection with socialism, and the
second is not peculiar to it. We will now return to it as a system of
exclusive and distinctive doctrines, and sum up, in general terms, the
conclusions to which our examination of it is calculated to lead
far-seeing and practical men, and more especially active politicians.


[25] The Christian Socialist author of _The Gospel for To-day_. See
chapter on Christian Socialism.

[26] Mr. Wilshire, in his volume of criticism on my American speeches.

[27] _Socialism: the Mallock-Wilshire Argument._ By Gaylord Wilshire.
New York, 1907.

[28] While this work was in the press, one of the English Labour
members, Mr. Curran, at a public meeting, gave his views, as a
socialist, about this very question--equality of industrial
opportunity--and as an example of such opportunity already in existence,
he mentioned the cash-credit system, which prevails in banks in
Scotland. He seemed unaware that such advances of capital made in this
system are made to picked men only. These men, moreover, have the
strongest stimulus to effect in the face that they will keep all their
profits. If a socialistic state gave cash-credits to everybody, it would
confiscate all the profits if the workers were successful, and have no
remedy against them if they failed.

[29] _Unto This Last._

[30] See note to previous chapter, referring to the recent _Red
Catechism_ for socialist Sunday schools, in which children are taught,
as the primary article of faith, that the wage-earners produce
everything, that the productivity of all is practically equal, and that
all are entitled to expect precisely the same kind of life.



I was constantly asked by socialists in America whether I really
believed that society, as it is, is perfect, and that there are no evils
and defects in it which are crying aloud for remedy. Unless I believed
this--and that I could do so was hardly credible--I ought, they said, if
I endeavoured to discredit the remedy proposed by themselves, to suggest
another, which would be better and equally general, of my own.

Now, such an objection, as it stands, I might dismiss by curtly
observing that I did not, and could not, suggest any remedy other than
socialism, partly because the purport of my entire argument was that
socialism, if realised, would not be a remedy at all; and partly
because, for the evils that afflict society, no general remedy of any
kind is possible. The diseases of society are various, and of various
origin, and there is no one drug in the pharmacopoeia of social reform
which will cure or even touch them all, just as there is no one drug in
the pharmacopoeia of doctors which will cure appendicitis, mumps,
sea-sickness, and pneumonia indifferently--which will stop a hollow
tooth and allay the pains of childbirth.

But though such an answer would be at once fair and sufficient, if we
take the objection in the spirit in which my critics urged it, the
objection has more significance than they themselves suspected, and it
requires to be answered in a very different way. Socialism may be
worthless as a scheme, but it is not meaningless as a symptom.
Rousseau's theory of the origin of society, of the social contract, and
of a cure for all social evils by a return to a state of nature, had, as
we all know now, no more relation to fact than the dreams of an
illiterate drunkard; but they were not without value as a vague and
symbolical expression of certain evils from which the France of his day
was suffering. As a child, I was told a story of an old woman in
Devonshire who, describing what was apparently some form of dyspepsia,
said that "her inside had been coming up for a fortnight," and still
continued to do so, although during the last few days "she had swallowed
a pint of shot in order to keep her liver down." The old woman's
diagnosis of her own case was ridiculous; her treatment of it, if
continued, would have killed her; but both were suggestive, as
indications that something was really amiss. The reasoning of Rousseau,
who contended that the evils of the modern world were due to a departure
from primeval conditions which were perfect, and that a cure for them
must be sought in a return to the manner of life which prevailed among
the contemporaries of the mammoth, and the immediate descendants of the
pithekanthropos, was identical in kind with the reasoning of the old
woman. The reasoning of the socialists is identical in kind with both.
It consists of a poisonous prescription founded on a false diagnosis.
But just as the diagnosis, no matter how grotesque, which a patient
makes of his or of her own sufferings, and even the remedies which his
or her fancy suggests, often assist doctors to discover what the ailment
really is, so does socialism, alike in its diagnosis and its proposed
cure, call attention to the existence of ailments in the body politic,
and may even afford some clue to the treatment which the case requires,
though this will be widely different from what the sufferer fancies.

Such being the case, then, in order that a true treatment may be
adopted, the first thing to be done is to show the corporate patient
precisely how and why the socialistic diagnosis is erroneous, and the
proposed socialistic remedies incomparably worse than the disease. To
this preparatory work the present volume has been devoted. Let us
reconsider the outline of its general argument. As thoughtful socialists
to-day are themselves coming to admit, the augmented wealth distinctive
of the modern world is produced and sustained by the ability of the few,
not by the labour of the many. The ability of the few is thus productive
in the modern world in a manner in which it never was productive in any
previous period, because, whereas in earlier ages the strongest wills
and the keenest practical intellects were devoted to military conquest
and the necessities of military defence, they have, in the modern world,
to a constantly increasing degree, been deflected from the pursuits of
war and concentrated on those of industry. But the old principle remains
in operation still, of which military leadership was only one special
exemplification. Nations now grow rich through industry as they once
grew rich through conquest, because new commanders, with a precision
unknown on battle-fields, direct the minutest operations of armies of a
new kind; and the only terms on which any modern nation can maintain its
present productivity, or hope to increase it in the future, consist in
the technical submission of the majority of men to the guidance of an
exceptional minority. As for the majority--the mass of average
workers--they produce to-day just as much as, and no more than, they
would produce if the angel of some industrial Passover were henceforward
to kill, each year on a particular day, every human being who had risen
above the level of his fellows, and, in virtue of his knowledge,
ingenuity, genius, energy, and initiative, was capable of directing his
fellows better than they could direct themselves. If such an annual
decimation were inaugurated to-morrow in civilised countries such as
Great Britain and America, the mass of the population would soon sink
into a poverty deeper and more helpless than that which was their lot
before the ability of the few, operating through modern capital, began
to lend to the many an efficiency not their own. In other words, the
entire "surplus values"--to adopt the phrase of Marx--which have been
produced during the last hundred and fifty years, have been produced by
the ability of the few, and the ability of the few only;[31] and every
advance in wages, and every addition to the general conveniences of
life, which the labourers now enjoy, is a something over and above what
they produce by their own exertions. It is a gift to the many from the
few, or, at all events, it has its origin in the sustentation and the
multiplication of their efforts, and would shrink in proportion as these
efforts were impeded. If, then, the claims which socialists put forward
on behalf of labour are really to be based, as the earlier socialists
based them, on the ground that production alone gives a valid right to
possession, labour to-day, instead of getting less than its due, is, if
we take it in the aggregate, getting incomparably more, and justice in
that case would require that the vast majority of mankind should have
its standards of living not raised but lowered.

Is it, then, the reader will here ask, the object of the present volume
to suggest that the true course of social reform in the future would be
gradually to take away from the majority some portion of what they at
present possess, and bind them down, in accordance with the teaching of
socialists in the past, to the little maximum which they could produce
by their own unaided efforts? The moral of the present volume is the
precise reverse of this. Its object is not to suggest that they should
possess no more than they produce. It is to place their claim to a
certain surplus not produced by themselves on a true instead of a
fantastic basis.

Socialists seek to base the claim in question, alternately and sometimes
simultaneously, on two grounds--one moral, the other practical--which
are alike futile and fallacious, and are also incompatible with each
other. The former consists of the _a priori_ moral doctrine that every
one has a right to what he produces, and consequently to no more. The
latter consists of an assumption that those who produce most will, in
deference to a standard of right of a wholly different kind, surrender
their own products to those who produce least. The practical assumption
is childish; and the abstract moral doctrine can only lead to a
conclusion the opposite of that which those who appeal to it desire. But
the claim in question may, when reduced to reasonable proportions, be
defended on grounds both moral and practical, nevertheless, and the
present volume aims at rendering these intelligible. Let us return for a
moment to Rousseau and his theory of the social contract. We know to-day
that never in the entire history of mankind did any such conscious
contract as Rousseau imagined take place; but it is nevertheless true
that virtually, and by ultimate implication, something like a contract
or bargain underlies the relation between classes in all states of

When one man contracts to sell a horse for a certain price, and another
man to pay that price for it, the price in question is agreed to because
the buyer says to himself on the one hand, "If I do not consent to pay
so much, I shall lose the horse, which is to me worth more than the
money"; and the seller says to himself on the other hand, "If I do not
consent to accept so little, I shall lose the money, which is to me
worth more than the horse." Each bases his argument on a conscious or
subconscious reference to the situation which will arise if the bargain
is not concluded. Similarly, when any nation submits to a foreign rule,
and forbears to revolt though it feels that rule distasteful, it
forbears because, either consciously or subconsciously, it feels that
the existing situation, whatever its drawbacks, is preferable to that
which would arise from any violent attempt to change it. The same thing
holds good of the labouring classes as a whole, as related to those
classes who, in the modern world, direct them. By implication, if not
consciously, they are partners to a certain bargain. They are not
partners to a bargain because they consent to labour, for there is no
bargaining with necessity; and they would have to labour in any case, if
they wished to remain alive. They are partners to a bargain because they
consent to labour under the direction of other people. It is true that,
as regards the present and the near future, they are confronted by
necessity even here. This is obviously true of countries such as Great
Britain, in which, if the labour of the many were not elaborately
organised by the few, three-fourths of the present population would be
unable to obtain bread. Nevertheless, if we take a wider view of
affairs, and consider what, without violating possibility, might
conceivably take place in the course of a few disastrous centuries, the
mass of modern labourers might gradually secede from the position which
they at present occupy, and, spreading themselves in families or small
industrial groups over the vast agricultural areas which still remain
unoccupied, might keep themselves alive by labouring under their own
direction, as men have done in earlier ages, and as savages do still.
They would have, on the whole, to labour far harder than they do now,
and to labour for a reward which, on the whole, would be incomparably
less than that which is attainable to-day by all labour except the
lowest. Moreover, their condition would have all the "instability"
which, as Spencer rightly says, is inseparable from "the homogeneous."
It could not last. Still, while it lasted, they could live; and, in
theory, at all events, the mass of the human race must be recognised as
capable of keeping themselves alive by the labour of pairs of hands
which, in each case, are undirected by any intelligence superior to, or
other than, the labourer's own. In theory, at all events, therefore,
this self-supporting multitude would be capable of choosing whether they
would continue in this condition of industrial autonomy, with all its
hardships, its scant results, and its unceasing toil, or would submit
their labour to the guidance of a minority more capable than themselves.
Such being the case, then, if by submitting themselves to the guidance
of others they were to get nothing more than they could produce when
left to their own devices, they would, in surrendering their autonomy,
be giving something for nothing--a transaction which could not be
voluntary, and would be not the less unjust because, as all history
shows us, they would be ultimately unable to resist it. Justice demands
that a surrender of one kind, made by one party, should be paid for by a
corresponding surrender of another kind, made by the other party; which
last can only take the form of a concession to labour, as a right, of
some portion of a product which labour does not produce. Labour can, on
grounds of general moral justice, claim this as compensation for
acquiescence, even though the acquiescence may, as a matter of fact, be

Human nature, however, being what it is, these purely moral
considerations would probably have little significance if they were not
reinforced by others of a more immediately practical kind. Let us now
turn to these. The motive which prompts labour to demand more than it
produces is itself primarily not moral, but practical, and is so obvious
as to need no comment. What concerns us here is the practical, as
distinct from any moral, motive, which must, when the situation is
understood, make ability anxious to concede it. For argument's sake we
must assume that the great producers of wealth are men who have no other
motive ultimately than ambition for themselves and their families, and
would allow nothing of what they produce to be taken from them by any
other human being except under the pressure of some incidental
necessity. There is one broad feature, however, which even men such as
these understand--the fact, namely, that for successful wealth
production one of the most essential conditions is a condition of social
stability, or a general acquiescence, at all events, in the broad
features of the industrial system, by means of which the production in
question takes place. But if the labourers have no stake in the surplus
for the production of which such a system is requisite, it may be
perfectly true that by escaping from it they would on the whole be no
better off than they are, yet there is no reason which can be brought
home to their own minds why they should not seek to disturb it as often
and as recklessly as they can. There is, at best, no structural
connection, but only a fractional one, between their own welfare and the
welfare of those who direct them; and a structural connection between
the two--a dovetailing of the one into the other--is what ability, no
matter how selfish, is in its own interests concerned before all things
to secure. In other words, it is concerned in its own interests so to
arrange matters that the share of its own products which is made over to
the labourers shall be large enough, and obvious enough, and
sufficiently free from accessory disadvantages, to be appreciated by the
labourers themselves; and the ideal state of social equilibrium would be
reached when this share was such that any further augmentation of it
would enfeeble the action of ability by depriving it of its necessary
stimulus, and, by thus diminishing the amount of the total product,
would make the share of the labourers less than it was before.

Though an ideal equilibrium of this kind may be never attainable
absolutely, it is a condition to which practical wisdom may be always
making approximations; but in order that it may be an equilibrium in
fact as well as in theory, one thing further is necessary--namely, that
both parties should understand clearly the fundamental character of the
situation. And here labour has more to learn than ability; or perhaps
it may be truer to say that socialism has given it more to unlearn. If
any exchange takes place between two people, which by anybody who knew
all the circumstances would be recognised as entirely just, but is not
felt to be just by one of the contracting parties, he, though he may
assent to the terms because he can get none better, will be as much
dissatisfied as he would have been had he been actually overreached by
the other. If, for example, he believed himself to be entitled to an
estate of which the other was in reality not only the _de facto_, but
also the true legal possessor, and if the other, out of kindness (let us
say) towards a distant kinsman, agreed to pay him a pension, he would
doubtless accept the pension as a something that was better than
nothing; but he would not be satisfied with a part when he conceived
himself to be entitled to the whole, and as soon as occasion offered
would go to law to obtain it. In other words, if two persons are to make
a bargain or contract which can possibly satisfy both, each must start
with recognising that the other has some valid right, and what the
nature of this right is, to the property or position which is held by
him and which is the subject of the projected exchange. Unless this be
the case, any exchange that may be effected will, for one of the parties
at least, not be a true bargain or contract, but an enforced and
temporary compromise. There will be no finality in it, and it will
produce no content.

Now, in the case of the bargain or contract between labour and ability,
this last situation is precisely that which the teachings of socialism
are at present tending to generalise. They are encouraging the
representatives of labour to regard the representatives of ability as a
class which possesses much, but has no valid right to anything, and with
whom in consequence no true bargain is possible; since, whatever this
class concedes short of its whole possessions will merely be accepted by
labour as a surrender of stolen goods, which merits resentment rather
than thanks, because it is only partial.

The intellectual socialists of to-day, and many of their less educated
followers, will strenuously deny this. They will declare that they,
unlike their predecessors, recognise that directive ability is a true
productive agent no less than ordinary labour is; and that able men, no
less than the labourers, have rights which they may, if they choose,
enforce with equal justice. And if we confine our attention to certain
of their theoretical admissions, we need not go further than the pages
of the present volume to remind ourselves that for this assertion there
are ample, if disjointed, foundations. But the doctrine of modern
socialism must be judged, not only by its separate parts, but also by
the emphasis with which they are respectively enunciated, and by the
mood of mind which, on the whole, it engenders among the majority of
those who are affected by it; and, whatever its leading exponents may,
on occasion, protest to the contrary, the main practical result which
it has thus far produced among the masses has been to foment the
impression, which is not the less efficacious because it is not
explicitly formulated, that when labour and ability are disputing over
their respective rights, ability comes into court with no genuine rights
at all; and that, instead of representing (as it does) the knowledge,
intellect, and energy to which the whole surplus values of the modern
world are due, it represents merely a system of decently legalised theft
from an output of wealth which would lose nothing of its amplitude, but
would on the contrary still continue to increase were all exceptional
energy, knowledge, and intellect deprived of all authority and starved
out of existence to-morrow.

So long as such an impression prevails, and indeed until it is
definitely superseded by one more in consonance with facts, no
satisfactory social policy is practicable. Labour, as opposed to
ability, may be compared to a man who believes that his tailor has
overcharged him for a coat, and who disputes the account in a law court
with a view to its reasonable reduction. In such a case it will be
possible for him to obtain justice. The tailor's claim for £12 may be
reduced to a claim for £10, or £8 5_s._, or £6 15_s._ 6_d._ But if the
customer's contention is that he ought to get the coat for nothing, and
that he does not in justice owe the tailor anything at all, he is making
a demand that no law court could satisfy, and by a gratuitous
misconception of his rights is doing all he can to preclude himself from
any chance of obtaining them. The mood which socialism foments among the
labouring classes is precisely analogous to the mood of such a man as
this, and its results are analogous likewise. Its origin, however, being
artificial and also obvious in its minutest particulars, the remedy for
it, however difficult to apply, is not obscure in its nature. The mood
in question results from a definite, a systematic, and an artificially
produced misconception of the structure and the main phenomena, good and
evil, of society as it exists to-day, and the different parts played by
the different classes composing it. It has been the object of the
present volume to expose, one after another, the individual fallacies of
which this general misconception is the result, not with a view to
suggesting that in society as it exists to-day there are no grave evils
which a true social policy may alleviate, but with a view to promoting
between classes, who are at present in needless antagonism, that sane
and sober understanding with regard to their respective positions which
alone can form the basis of any sound social policy in the future.

Of the individual demands or proposals now put forward by socialists,
many point to objects which are individually desirable and are within
limits practicable; but what hinders, more than anything else, any
successful attempt to realise them is the fact that they are at present
placed in a false setting. They resemble a demand for candles on the
part of visitors at an hotel, who would have, if they did not get them,
to go to bed in the dark--a demand which would be contested by nobody if
it were not that those who made it demanded the candles only as a means
of setting fire to the bed-curtains. The demands for old-age pensions,
and for government action on behalf of the unemployed, for example, as
now put forward in Great Britain, by labour Members who identify the
interests of labour with socialism, are demands of this precise kind.
The care of the aged, the care of the unwillingly and the discipline of
the willingly idle, are among the most important objects to which social
statesmanship can address itself; but the doctrines of socialism hinder
instead of facilitate the accomplishment of them, because they identify
the cure of certain diseased parts of the social organism with a
treatment that would be ruinous to the health and ultimately to the life
of the whole.

We may, however, look forward to a time, and may do our best to hasten
it, when, the fallacies of socialism being discredited and the mischief
which they produce having exhausted itself, we may be able to recognise
that they have done permanent good as well as temporary evil--partly
because their very perverseness and their varying and accumulating
absurdities will have compelled men to recognise, and accept as
self-evident, the countervailing truths which to many of the sanest
thinkers have hitherto remained obscure; and partly because socialism,
no matter how false as a theory of society, and no matter how
impracticable as a social programme, will have called attention to evils
which might otherwise have escaped attention, or been relegated to the
class of evils for which no alleviation is possible.

Even to suggest the manner in which these evils would be treated by a
sound and scientific statesmanship would be wholly beyond the scope of a
volume such as the present, for this reason, if for no other, that, as
has been said already, the evils in question are not one but many, each
demanding special and separate treatment, just as ophthalmia demands a
treatment other than that demanded by whooping-cough. But one general
observation may be fitly made, in conclusion, which will apply to all of
them. These remedies cannot be included under the heading of any mere
general augmentation of the pecuniary reward of labour taken in the
aggregate. The portion of the national dividend which goes to labour
now, in progressive countries such as Great Britain, Germany, and
America, is immensely greater than it was a hundred years ago, and
unless industrial progress is arrested its tendency is to rise still
further. The main evils to which a scientific statesmanship should
address itself arise from the incidental conditions under which this
dividend is spent--conditions, largely improvable, which at present
deprive it of its full purchasing power. Of this I will give one
example--the present structure of great industrial towns. It cannot be
doubted that, if the sums now spent on the construction and maintenance
of insanitary slums and alleys were employed in a scientific manner, a
rent which has now to be paid for accommodation of the most degrading
kind would suffice to command, on the strictest business principles,
homes superior to those which, if its amount were doubled, would hardly
be forthcoming for the labourer in most of our existing streets; while
the purchasing power of the existing income of labour would be increased
concurrently, and perhaps to a yet greater extent if much of the
education, which now has no other effect than of generating
impracticable ideas as to the abstract rights of man, were devoted to
developing in men and women alike a greater mastery of the mere arts of
household management.

But in merely mentioning these subjects I am transgressing my proper
limits. I mention them only with a view to reminding the reader once
more that the object of this volume is not to suggest, or supply
arguments for maintaining that existing conditions are perfect, or that
socialists are visionaries in declaring that they are capable of
improvement. Its object has been to expose that radical misconception of
facts which renders demands visionary that would not be visionary
otherwise, and to stimulate all sane and statesmanlike reformers by
helping them to see, and also to explain to others, that the improved
conditions which socialism blindly clamours for are practicable only in
proportion as they are dissociated from the theories of socialism.


[31] Like all generalisation dealing with complex matters, this must be
qualified by individual exceptions. For example, men who have made
fortunes for themselves, and have added to the world's stock, by work in
the gold-fields, have been in many cases _labourers_, directing their
own efforts by their own intelligence. But some men have been
exceptional in one or other of two ways--either in propinquity to the
scene of action, or (and this is the more common case) in handihood,
determination, and courage. It is not every one who has it in him to go
in search of gold to Alaska.


Ability, and labour defined, 19;
  labour as opposed to, 29;
  capital as the implement of, 32;
  a name for the directive faculties, 33;
  value of directive, 68;
  monopoly of business, 89, 93;
  and individual motive, 110;
  modern socialists' recognition of products due to, 191;
  rent of business, 191, 194

Abstract justice, interest and, 204, 206, 208, 210, 212, 214, 216, 218,
  220, 222, 224, 226

Activity, two kinds represented by two groups of, 28;
  military distinct from industrial, 121

Agriculture, Mill on nature in, 181;
  and rent, 192

Allen, Grant, _The Woman Who Did_, 147

Arkwright, the inventor of the spinning-frame, 83, 197

Artist, the case of an, 115

Bastiat, his plane, 213, 214

Bellamy, _Looking Backward_, 92;
  his description of a socialistic Utopia, 92;
  his argument, 105

Bessemer, 197, 220

Boy messengers, 80

Bradlaugh, Charles, 85

Brazil, Rossi fails to found a socialistic colony in, 141

Brigand chief, his justification, 206

Capital, is labour in an externalised and permanent form, 14;
  is past labour crystallised, 14, 20;
  as the implement of ability, 32;
  fixed and circulating, 35;
  the primary function of, 40;
  its interest described by George as the gift of nature, 212

Capitalism (a comparatively modern phenomenon), causes of its
  accelerated development, 2;
  as a working system, 3;
  essence of modern, 14;
  and wages, 16;
  state and private, 62, 71;
  economics of: the "economic man" and economic science, 123, 124

Cause and effect, 185

Cellini, Benvenuto, 24

Christian socialism as a substitute for secular democracy,
  _see_ Democracy; the message of, 153;
  its view of the steel-kings and the oil-kings, 153, 158, 160;
  its preaching a species of ecclesiastical electioneering, 156;
  and the faculty of invention, 159;
  abolishes competition, 160;
  on the moral conversion of able men, 160

_Christian Socialist, The,_ 150

Christian socialists, are simply secular socialists of the more modern
  and educated type, 163;
  their temperamental deficiency finds its fullest expression in
  socialism, 172

Coleridge, Lord, 135

Colossal fortunes, growth of, 130, 131

Competition, 160

Corvée system, and slavery, 57, 58

Crozier, Dr. Beattie, _Wheel of Wealth_, 217, 218, 236

Darby of Coalbrookdale, 83

Demand and supply, 143

Democracy, 130, 132, 134, 136, 138, 140, 142, 144, 146, 148;
  Christian socialism as a substitute for secular, 150, 152, 154, 156,
  158, 160, 162, 164, 166, 168, 170, 172, 174

Direction, wage-capital an implement of, 70

Directive ability, 191;
  its value, 68;
  and socialism, 87;
  and labour, 182, 187, 189-93

---- faculties, 31;
  function of the, as applied to the operations of modern labour, 29;
  their function, illustrated by the case of a printed book, 29;
  name for the, 33

Dudley, 82

Eclecticism, 186

Economic distinction, abolished by the truly socialistic scheme, 58

Economic emancipation, is entire abolition of the wage-system, 56

---- man, the, 111, 123

---- motive, personal gain the primary, 127

---- opportunity, 254

---- science, capitalism and, 124;
  its reasonings, 177

---- values, 166

Economics of capitalism, 123

Eddy, Mrs., her Christian science, 150

Edison, 47, 150, 197, 220

Education, its ideal object as a means of happiness, 273

Electric lighting of London, 84

Equality of opportunity, 253, 254, 256, 258, 260, 262, 264, 266, 268,
  270, 272, 274, 276

Equilibrium an ideal, 288

Evolution, organic, 85

Evolutionary socialists, 102

---- sociology, 94

_Fabian Essays_, 58

Family life, 135, 140, 141

Fighting instinct, the, 121

France, state monopolies in, 80

Frederick the Great, 99

French revolution, 206

George, Henry, 210, 211

"Gospel for To-day, The," 151, 153, 157, 159

_Great Eastern, The,_ 264

Greed, 125

Gronlünd, a disciple of Marx, 18

Happiness, an equation between desire and attainment, 273

Harrison, Frederic, the English prophet of Positivism, 118;
  on the soldier's willing service, 120

Helots in Sparta, 59

Heroism, socialists' view of, 118, 122

Hillquit, Mr., the American socialist, 42, 43, 50;
  and "common manual labour," 48, 50;
  his irrelevancies, 50;
  his argument, 51, 53;
  verbal jugglery of, 53

Ideal equilibrium, an, 288

Income, of labour, 197;
  earned and unearned, 226

Individual motive and democracy, 130, 132, 134, 136, 138, 140, 142, 144,
  146, 148

Industrial effort, its progress depends on thought and the advance of
  knowledge, 32;
  productivity of, 157

---- productivity, 195

---- towns, present structure of great, 294

Industry, state-directed, 81;
  the iron, 82

Intellect, inequalities of the human, 102, 107

Interest, and abstract justice, 204, 206, 208, 210, 212, 214, 216, 218,
  220, 222, 224, 226;
  socialistic attack on, 227, 228, 230, 232, 234, 236, 238, 240, 242,
  244, 246, 248, 250, 252

Invention, Christian socialists on the faculty of, 159

Inventors, 160-62

Iron industry, the, 82

Jesuit Fathers in Uruguay, 193

Just reward of labour, 176, 178, 180, 182, 184, 186, 188, 190, 192, 194,
  196, 198, 200, 202

Justice, interest and abstract, 204, 206, 208, 210, 212, 214, 216, 218,
  220, 222, 224, 226

Kidd, on rival and independent claims, 93;
  his argument, 103, 106

Labour, as a wealth-producer, 11, 21, 42;
  definition of ability and, 19;
  two distinguishable kinds of, 23;
  a productive agent, 25, 199;
  directive, 31, 71, 75, 77, 78;
  emancipation of, 47;
  the Marxian doctrine of the all-productivity of, 47;
  by itself, impotent to produce the wealth of modern nations, 54;
  and the socialistic promise, 127;
  as estimated by its actual products--the just reward of, 176, 178,
  180, 182, 184, 186, 188, 190, 192, 194, 196, 198, 200, 202;
  income of, 197, 295;
  as opposed to ability, 291

Labour-certificates, 12

Labourer, the ordinary manual, 66, 67, 174

Laplace, 91

Legislation, 134, 135;
  and the Government's will, 136

Lombe, the great silk-factory erected at Derby by, 197

L.C.C. steamboats, 73

Macaulay, _Essay on Dryden_, 92;
  on the absurdity of confounding speculative sociology with practical,

Machine-capital, 219

Machinery, a development of capitalism, 2;
  Marx on, 27;
  embodies labour directed in a new way, 38;
  the question of, 88

Majority, will of the, 129, 139, 140;
  powers of the "sovereign," 137

Marx, Karl, his formula, 7;
  his treatise on capital, 8;
  his theory summarised, 9, 10, 12, 14, 16, 18, 20;
  his doctrine of scientific socialism, 11, 18;
  his falsified prophecies, 17;
  errors of, 19, 20, 22, 24, 26, 28, 30, 32, 34, 36, 38, 40;
  on machinery, 27;
  repudiated by modern socialists, 41, 42, 44, 46, 48, 50, 52, 54, 56,
  58, 60, 62, 64, 66, 68

Melba, 116, 144

Military, distinct from industrial, activity, 121

Mill, J.S., 2, 32; _Political Economy_, 20, 21, 179;
  on nature in agriculture, 180, 181

Modern socialists, their repudiation of Marx, _q.v._;
  and the question of motive, 90, 111, 113;
  their assertion, 115

Monastic orders, 117

Monopolists, 93

Monopoly, modern capital is, 38;
  of business-ability, 89, 93

Motive, ability, and individual, 110

---- individual, 130, 132, 134, 136, 138, 140, 142, 144, 146, 148

---- practical as distinct from moral, 287

---- socialists and, 90, 111, 113

Motives, discussion of various, 113-5

Multi-millionaires, 131-3;
  a suggested limit, 138

Napoleon III., 99

_North American Review,_ 130

Opportunity, equality of, 253, 254, 256, 258, 260, 262, 264, 266, 268,
  270, 272, 274, 276

Orders, monastic, 117

Organic evolution, 185

---- nature, products of, 210

Owen, Robert, 170;
  his views on socialism, 7

Peasant proprietors, 20, 57

Penny post, 79

Plane, Bastiat's, 213, 214

Positivism, Frederic Harrison, the English prophet of, 118-20

Post Office, British, 79

Postal employé, the, 260, 261

Press, a state, 85

Problems of practical life, 95

Product, correspondence between productive effort and, 207

Production, unequal powers of, 142, 254;
  labour, capital, and law the only factors in, 191

Productive agent, labour as a, 25, 199

---- effort, the astounding advances of the efficiency of, 26

Productivity, industrial, 195

Rent, of business-ability, the, 191, 194;
  and agriculture, 192

Reward of labour, as estimated by its actual products, just, 176, 178,
  180, 182, 184, 186, 188, 190, 192, 194, 196, 198, 200, 202

Ricardo, 2, 12, 32, 92

Roosevelt, President, 169

Rossi, Govanni, the Italian socialist, his failure to found a
  socialistic colony in Brazil, 141

Rousseau, his theory of the social contract, 283, 284

Ruskin, John, 23;
  his scheme of political economy, 118

Sentimental thinkers, 123

Shakespeare, 92, 96

Shaw, Bernard, 43, 208, 209;
  _Man and Superman_, 215, 216, 222

Slave, contrasted with wage-paid labourer, 59

Slavery, 57

Smith, Adam, _Wealth of Nations_, 25, 26, 36

Social Democratic Federation, its campaign and its catechism, 45

Social policy of the future, 278, 280, 282, 284, 286, 288, 290, 292, 294

Socialism, Christian. _See_ Christian socialism

---- historical beginning of, 1, _et seq._;
  two ideas of, 1;
  and capitalism, 3;
  a theory, 5;
  regarded as a practical force, 8;
  basic doctrine of so-called scientific, 18;
  a fallacy, 49, 167;
  proximate difficulties of, 69, 70, 72, 74, 76, 78, 80, 82, 84, 86, 88;
  its ultimate difficulty, 89, 90, 92, 94, 96, 98, 100, 102, 104, 106,
  108, 110, 112, 114, 116, 118, 120, 122, 124, 126, 128;
  "the Great Man theory," 91

Socialistic attack on interest, and the nature of its error, 227, 228,
  230, 232, 234, 236, 238, 240, 242, 244, 246, 248, 250, 252

Socialistic temperament, debilitates the faculties, 169

---- theory of society, a, 56, 58

Socialists, on heroism, 118, 122;
  their two main doctrines, moral and economic, 165;
  their false and true theories of production, 166;
  their fallacy, 167

---- evolutionary, 102

Society, two contrasted groups of, 15

Sociology, scientific, 111

---- speculative, 109

Spencer, Herbert, 106;
  causal importance of the great man, 89-101;
  on modern production, 97, 98;
  _Study of Sociology_, 99;
  on the invention of the _Times_ printing-press, 100;
  _Social Statics_, _ibid._;
  criticised by Author's _Aristocracy and Evolution_, 101

State officials, 69

Steel and oil, 153, 158, 159, 160, 162

Supply and demand, 143

Utopia, Bellamy's description of a socialistic, 92

Value, surplus, 13

Wage-capital, 36, 37, 39, 41, 57, 58, 264;
  an implement of direction, 70;
  its waste brings about its own remedy, 71

Wagedom, socialists and, 59, 60

Wage-fund, division of total, 201

Wage-system, alternatives to, 57, 60;
  an escape from, 59

Watt, 221

Wealth, socialists' conception of, 145;
  a form of power, 146;
  superfluous, 155;
  produced by two functionally different classes, 176

---- of modern nations, "common manual labour" impotent to produce the,
  48, 50, 54

Wealth-producer, the greed of the, 125

Wealth-producing power, labour's, 11, 21, 42

Webb, Sidney, 43, 58-60, 89, 90, 119, 191, 194, 197;
  his argument, 107, 108

Wilshire, Gayford, his leaflet, 47, 143, 257

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