»"^^ S^^^ v^, :^.^X^ M IMAGE EVALUATION TEST TARGET (MT-S) A 1.0 I.I ^ "2.2 i -^ lllli 1.8 1^ ili i llllim 11.25 III 1.4 V] 7) •^ W J^ y ■» w "^ '^'>/- ^ '^ '/ Photographic Sciences Cbrporation 23 WEST MAIN STREET WEBSTER, N.Y. UaSO (716) 872-4503 ^ ^^ ,v ^ \;^o CIHM/ICMH Microfiche Series. CIHIVI/ICIVIH Collection de microfiches. Canadian Institute for Historical Microreproductions / Institut Canadian de microreproductions historiques Technical and Bibliographic Notes/Notes techniques et bibliographiques The Institute has attempted to obtain the best original copy available for filming. Features of this copy which may be bibliographically unique, which may alter any of the images in the reproduction, or which may significantly change the usual method of filming, are checked below. D D D D D D D Coloured covers/ Couverture de couleur I I Covers damaged/ Couverture endommag^e Covers restored and/or laminated/ Couverture restaur6e et/ou pellicul6e I I Cover title missing/ Le titre de couverture manque I I Coloured maps/ Cartes g^ographiques en couleur Coloured ink (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) I I Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Relid avec d'autres documents Tight binding may cause shadows or distortion along interior margin/ Lareliure serr6e peut causer de I'ombre ou de la distortion le long de la marge intdrieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certaines pages blenches ajoutdes lors d'une restauration apparaissent dans le texte, mais, lorsque cela 6tait possible, ces pages n'ont pas 6X6 filmdes. Additional comments:/ Commentaires suppldmentaires: L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6td possible de se procurer. Les details de cet exemplaire qui sont peut-dtre uniques du point de vue bibliographique, qui peuvent modifier une image reproduite, ou qui peuvent exiger une modification dans la mdthode normale de filmage sont indiquds ci-dessous. □ Coloured pages/ Pages de couleur D D D D D Pages damaged/ Pages endommagdes Pages restored and/or laminated/ Pages restaur^es et/ou pelliculdes Pages discoloured, stained or foxed/ Pages ddcolordes, tachet^es ou piqu6es Pages detached/ Pages d6tach6es Showthrough/ Transparence I I Quality of print varies/ Qualitd indgale de I'impression Includes supplementary material/ Comprend du materiel supplementaire Only edition available/ Seule Edition disponible Pages wholly or partially obscured by errata slips, tissues, etc., have been refilmed to t;nsure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d'errata, une pelure, etc., ont 6td filmdes d nouveau de fa^on 6 obtenir la meilleure image possible. This item is filmed at the reduction ratio checked below/ Ce document est filmd au taux de reduction indiqud ci-dessous. 10X 14X 18X 22X 26X SOX ': 7 12X 16X 20X 24X 28X 32X i plaire es details liques du mt modifier ixiger une de filmage )d/ qu6es taire I by errata med to nent une pelure, fapon d 3. The copy filmed here has been reproduced thanks to the ssnerosity of: Thomas Fisher Rare Book Library, University of Toronto Library The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Original copies in printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres- sion, or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. The last recorded frame on each microfiche shall contain the symbol —^(meaning "CON- TINUED"), or the symbol y (meaning "END"), whichever applies. Maps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: 1 2 3 L'exemplaire filmd fut reproduit grSce it la ginirosit^ de: Thomas Fisher Rare Book Library, University of Toronto Library Les images suivantes ont it6 reproduitos avec le plus grand soin, compte tenu de la condition et de la nettet6 de l'exemplaire filmd, et en conformity avec les conditions du contrat de filmage. Les exemplaires originaux dont la couverture en papier est imprim6e sent film6s en commencant par le premier plat et en terminant soit par la dernidre page qui comporte une empreinte d'impression ou d'illustration, soit par le second plat, selon le cas. Tous les autres exemplaires originaux sont film6s en commenpant par la premidre page qui comporte une empreinte d'impression ou d'illustration et en terminant par la dernidre page qui comporte une telle empreinte. Un des symboSes suivants apparaitra sur la dernidre image de cheque microfiche, selon le cas: le symbole — ♦- signifie "A SUIVRE ", le symbole y signifie "FIN ". Les cartes, planches, tableaux, etc., peuvent dtre filmds d des taux de reduction diffdrents. Lorsque le document est trop grand pour %tTO reproduit en un seul cliche, il est filmd d partir de Tangle sup^rieur gauche, de gauche d droite, et de hsut en bas, en prenant le nombre d'imeges n6cessaire. Les diagrammes suivants illustrent la m6thode. 32X 1 2 3 4 5 6 H ECONOM IC HISTORY AND THEORY SYNOPTIC TABLES AND DIAGRAMS BV JAMES MAYOR I'KOI'KSSOR OF POLITICAL ECONOMY AND STATISTICS ST. MUNGO's COLLEGE, GLASGOW; LECTURER IN POLITICAL ECONOMY GLASGOW UNIVERSITY EXTENSION BOARD EDINBURGH WILLIAM BROWN 26 Princes Street 1889 BY THE SAME AUTHOR On Wage Statistics and Wage Theories EDINBURGH : WILLIAM BROWN 1889 -^ I 1. CONTENTS TAGK Introductory Note, "> Tabular View of Economic History and Theory, facing (j PART I.— ECONOMIC HISTORY. Section I. Development of English Industry, 530— 1800 a. d., . 7 „ II. Do. Do., The Era of Machinery, 1800 A. D,, . 1) PART II.— ECONOMIC THEORY. Section I. General Survey of Economic Theories, .10 ,, II. Do. Do., ... 12 ,, III. Do. Do., ... 13 ,, IV. Do. Do., ... 15 PART III.— ECONOMIC PROCESSES IN MODERN INDUSTRY. Section I. Production, 16 ,, II. Distribution, 17 ,, III. Consumption, 20 ,, IV. Exchange, 21 PART IV.— NATIONAL ECONOMY. National Economy, 24 PART v.— GENERAL SUMMARY. General Summary, 27 Diagram of Social Dynamics, I '^1 Do. Do., II., facing 32 (O BOOKS FREQUENTLY REFERRED TO Titles. Contractions. A sir. All Introduction to Emilifih Economic History and Theory. By W. J. Ashley, M.A. 2 vols., Distribution of tfie Product. By Edward Atkinson, . Atkinsox, J] ritish Association Reports, 1878, 1885, 1887, and 1889,' B.A. History of the Cotton Manufacture. By Edward Baincs, Baines. History of Political Economy ' Blanqui. On Guilds and Trade Unions. By Liijo Brertano, . Brentano. Positive Philosophy. By Auguste Comte, . . , Comte. O'roioth of English Industry and Commerce. By W. Cunningham, M.A. (2d edition). Politics and Economics. By W.Cunningham, B.D.. 1885, ; The Making of England, liy J. R. (^reen. History of Political Economy. By Dr. J. K. Ingram, Theory of Political Economy. By VV. 8. Jevons, Principles of Political Economy. By J. S. Mill, I'icardo, Works. Edited by M'CuUoch, History of Agriculture and Prices. By Prof. Thorold Rogers, .... .... Six Centuries of Work and Wages. By Prof. Thorold Rogers, lioscher. Political Economy. 2 vols. Translated by Lalor, ... ...... The English Village Communiti/. By Frederic See- bjhi'n, 1884, ...'.."... The Era of the Protestant lievolution. By Frederic Seebohm, Principles of Political Economy. By H, Sidgwick, . Wealth of Nations. For Bibliography of Wealth of Nations, see Notes to Professor Nicholson's edi- tion, and also Anderson's Bibliographical Appen- dix to R. B. Haldane's Adam Smith, . Constitutional History. By Bishop Stubbs. 3 vols., Industrial lievolution. By Arnold Toynbee, Economics of Industry. By A. & M. P. Marshall, . Principles of Social Economy. By Yves Guyot, CUXN. CuNN. Pol. I ECON. Green. Ingram. ' Jevons. Mill. RiCARDO. Rogers. Rogers. Six Centuries. rosciier. Seeb. Seebohm Prot. Rev. Sidgwick. Smith. Stubbs. TOYN. Marshall. Guyor. 3 (•^') IONS. INTRODUCTORY NOTE Pol. RIES. i^ Pjrot. TiiE issue in this form of a Synoptic Statement of Economic History and Tlieory has been suggested by the demand for previous privately printed detached synopses. Primarily designed for the use of students attending University Extension Classes, the aim is to afford a com- prehensive view of economic science, and to facilitate systematic research over the whole field. An attempt is made to display in outline, and mainly in tabular form, the relations of the various departments of the subject-matter : the student is expected to fill in - CC O ui I H Q Z < O H CO O O o liJ LL o < cc o < Hi -^ H e CO « if *1 rH I s s rH O O o o o C4 a s rs 5 ^ 'i H-i ,:;; 'n r^i ^ >^ a a 'd 5 ^ « '^ .S'd ^ -^ 13 a 01 S3 -t-i V "a o to «t « a a tM a =« o a 5 .;i a a b =3':: u a a- P a ^ Li a 0) (U <5 •Aaxs.iaMj .^o iMawdoiHA^rQ 1 s a,- >■ •fH si o J I 3 £ 0) 3 X -1) 3 tf sl" 73 ■r. P-i S '/2 .5 CO 2 ■-> (O ^ ^ i « e^.2 a o a b -^ - ^ J aS p S ;^OHQ ■At '-i 8 I I I S i i&'Si& S M o o I 3 2 ;^ tf S '/J .5 OQ a . t" (it to 3 CO WW .i! ^ ~ a " 5 o 2 <1 I M O *- -H P &D-S.2. •^ i^' 5*, na -S M © S-55 c -15 a p^ I ••S *^ P* 72 (<1 P» U3 01 to tS 3 •2 OS -JCC +J eS e 43 O ^ X ^ o 3 Oh < • ^ Cm 5 2 S O 0*0 p^ 3 o M « D w M bo • "7! a * «^ ■ !«. O P^ V ^ « o o 0, PhI^; J •43 I •AHOaHX OINONOOg AO XNaWdOiaAMQ .1 ,1 1 ECONOMIC HISTORY AND THEORY. PART I. ECONOMIC HISTORY. SECTION I. 1. Development of English Industry. — General course of development. From self-contained industrial groups to varied inter-dependent industrial groups. 2. 530-1066 A.D. — Leading feature of industry in Anglo- Saxon times — Self-sufficiency of industrial groups. Agriculture — Chief employment of English people of Teutonic origin. Pasturage, that of people of Celtic origin. The Town- ship and the Mark. The Three-Field System — wheat, barley, and fallow (Cunn. p. 57). The Saxon castes — Noble, freeman, Iset, and slave. Present controversy upon the land-holding system of early England. Exponents of the theory of primitive Communal ownership of land — Maurer, Nasse, Sir Henry ]\Iaine (see Ash., p. 5. See also Stubbs, Const. Hist., vol. i. pp. 33 and 49). Exponent of the theory that the Manorial System is traceable at least to the period of the Saxon invasion — Seebohm (q. v.). General statement of Mr. Seebohm's position. If a line were drawn from a point somewhere about Inverness down through Scotland and England, there would be on one side of this line the north-eastern counties of Scotland, the eastern and lowland counties, and the northern, midland, and southern counties of England. On the other side of this line there would be the Highlands of Scotland, Wales, and Ireland. Thus on one side there would be the Saxon element, the Manorial System, and agriculture : and on the other side there would he tlie Celtic element, the tribal system, and pasturage. The Manorial System involved the cultivation of the land by peasants, from whom forced labour was exacted by the lord of the Manorial domain. The Tribal System involved the care of Stock being conducted by the members of the tribe or group of families, each of whom had a certain recognised position, though absolute individual ownership of the land was unknown. "Tiie land belonged to the tribe " (Maine). The gist of the controversy, as regards the alleged prevalence of the Mancijal System throughout Saxon England, lies in the question whether the Saxon Gchvr — or cultivator of a normal area (yard-land) of thirty acres, with an outfit of two oxen and seed (Seebohm, p. 1.31) — was a serf or a freeman. This class formed, according to Mr. Seebohm, the bulk of the population in the eleventh century, and probably from a much earlier time. According to Mr. Seebohm the position of the Saxon peasant was not that of a communal freeman, but that of a serf. His history is not that of a primitive free man who was subsequently reduced to slavery, but tliat of a primitive serf who has been, or is being, gradually emanci- pated. Mr. Seebohm's work, though extremely interesting and important, cannot be regarded as finally settling the question. Note important influence on subsequent economical condition of both Ireland and England by the breaking up of tribal and manorial systems (see Seebohm, op. cif., and ]\[aine. Village Commnnities and Earlij Ilisturij of Institutions). Condition of Saxon people. Houses, furniture, clothes. Beginnings of commerce. Salt an important article of trade in the middle ages. English foreign trade begins about 775 A.D. S. 1066-1200 AD. — Further development of Manorial system. Crusades lead to commercial activity in Europe. Expansion of trade and increase of wealth lead on to separa- tion of classes. 4. 1200-1500 A.D. -English people pass from condition of serfdom. Change from Manorial system to Bailiff' system. Black Death. (1348) Decimation of popidation. Rise of i ,. wages and prices. Peasant rising (1381). Wars of Roses (1452-1485); consequent collapse of Feudalism. Develop- ment of towns. Rise into power of Craft Guilds. Woollen manufacture. General prosperity of England in close of 15th century. Discoveries of Diaz, Cabot, and Vasco de Gama. 5. 1500-1700 A.D. — Protestant Reformation. Confiscation of Church Property. Aggrandisement of power of Crown, and establishment of new nobility. Extensive Sheep-farming began. Development of Wool trade. Discoveries of Drake and Raleigh. American colonies settled — Massachusetts (1628). Silver discoveries and consequent rise of prices in terms of silver. Industrial and Commercial Legislation. 6. 1700-1800 A.D— Union of England and Scotland.— Opening up of Scotland to Trade. Roads. Anson's and Cook's Voyages. Rise of great Towns. Growth of the Middle Class. Spinning Jenny. Watt's Steam Engine (1769). Newspapers. Development of Foreign and Colonial Trade. General Introduction of Machinery and consequent revolution in Industry. 1. Cunn. 2. Ciinn. ; Seeb. ; Ash. ; Stubbs. 3. Cunn. ; Ash. ; Green. 4. ib. ; Brentano; T'he Burgh Records; Historic Towns Series, e.g. Exeter, by E. A. Freeman ; Jousserand's EwjUsh Wayfariwj Life in XlVth Century ; Rogers's Hist, of Agricidture and Prices ; Report of Commission on Market Eights (Parliamentary Paper, C 5550). 5. Scebohm's Protestant Revolution ; Toyn, ; Annals of England, Yveemsax ; Cunn. Pol. Econ. 6. Burton's Hist, of Scotland ; Baines ; Toyn. ; Rogers, Six Centuries. SECTION II. 1. The Era of Machinery. Technological Development of the Machine Industry.— Leading Inventions of the century. Chief Industries. Exploitation of Minerals. Development of means of Transit. National Industrial Characteristics. 2. Commercial Development. — The growth of foreign and colonial trade brings about increasing International depend- ence. Periods of inflation and depression. Commercial u 10 legislation. Partial freedom of commerce. Influence of legislation on trade. 3. Economical Development. — The altered relation between employer and employed affected by the introduction of machinery. The main problem that emerges — the question of the division of the product of organised labour. Wages disputes. Anti-combination laws. Strikes. Trade Unions. Trade Union Acts. Mines and Factory Acts. Limited Liability Acts. Poor Laws. Partial freedom of labour. Associative effort : — Joint Stock Companies, Co-operative Societies, Friendly Societies. Incidental effects of machinery upon population, upon aggregate wealth, and upon the dis- tribution of the product of labour. 1. Levi's Hist, of Commerce; Toyn. ; Cunn. 2. Cunu. Pol. Econ. ; Wells, Hon. David A., The Great Depression in Trade; Seeley, Expanalonof EiKjland; Statistical Abstracts, }3oard of Trade ; Reports, London Chamber of Commerce ; Miscellaneous Reports, United King- dom ; Consular Reports, British and L^nited States ; Report on Trades' Societies, Social Science Congress, 1860; On Occupations of the People, 1801-1881, C. Booth {Journal Statistical Societ I/, xlix. p. 314). 3. Senior, Essays ; Howell's Conflict between Capital and Labour ; Reports by Labour Correspondent Board of Trade ; Reports by Depression of Trade Commission ; Reports of Boards of Arbitration and Conciliation for the Manufactured Iron Trade of the North of England Darlington Ironworkers' Association, 1877, 1879, 1882, 1882, 1884, 1884, 1885, 1885; Arbitration Clyde Shipwrights, Glasgow, 1878, and other detailed accounts of strikes ; Industrial Peace, Price ; Fowle's Poor- Laic ; Holyoake's History of Co-operation ; Reports of Co-operative Congresses ; Rogers, Economic Interpretation of History ; Cunn. Pol. Econ.; Macdonuell, Survey of Pol. Econ. -f PART II. GENERAL SURVEY OF ECONOMIC THEORY. SECTION L i. Ancient Economic Theory. — Typical economic thinkcrfc — Plato and Aristotle. Plato represents the Greek ideal — claiming for the State the energies of the citizens. Aristotle 11 of represents the ideal of personal freedom, rejecting the sub- ordination of man to the State. Both reject the subordination of man and the State to mere increase of production. Both regard wealth as beneficial only so far as it secures the general good. Plato hoped to obtain this by community of property, Aristotle by private possession. Greek conception of the position of the labouring class involved its social and political inferiority. Theoretic preference for agriculture over manufactures current in ancient times. Both Plato and Aristotle forbid the taking of interest, on the ground that money is barren. Aristotle's view of the State is of an organic whole, whose end is the morality and happiness of the citizens, while cordiality of companionship, not external government, is the efficient national bond. The old contro- versies, Man versus the State, and Home versus Foreign Manufactures, appear and reappear in economic history. 2. Medieval Economic Theory. — The Church — The canon- ists — their views are adverse to private property and to interest. Usury forbidden by the Church. 3. The Mercantile Theory. — Growth of the idea of nation- alit}', and consequent effect upon economic theory. Connection of the mercantile system with the contemporary theory of the State and with the rapid expansion of trade with monej'. According to Roscher the theory tends to exaggerate the importance of five elements: — (1) Density of population; (2) Quantity of Money; (3) Foreign Commerce; (4) Manu- factures ; (5) State Guardianship of Industry. The idea of the balance of trade and the discoveries of foreign markets and of silver in America foster these overestimations. Effects of adoption of mercantile system upon industry — new in- dustries fostered, and thus industry made more com- yhx. Reaction upon National Policy. Intensification of idea of nationality. Extension of State regulation of In- dustry. Contemporary criticism of Mercantile System. Chief grounds : — (1.) Money, as between one nation and another, is only a commodit3^ 12 f^f (2.) Tlic balance of International Trade tends to equilibrium. Truths recognised by Mercantile School : — (1.) That money occupies, by custom and legislation, a position wliich no otlier commodities occupy. (2.) That the well-being of the people is no necessary consequence of world-wide competition. The relation of modern theories of protection and of bimetallism to mercantilism. The Mercantile System, which was like Feudalism, beneficial in consolidating nationalities, attains the height of its power in the 17th century, and gives way before the »ressure of industrial development, which overthrows artificial barriers and makes isolation impossible. Yet mercantilist conceptions still colour current commercial habits of thinking. I. Plato's Republic ; Aristotle's Polities ; Xenophoii's Economics. 2, Cunn. ; Ingram, ti. National Economy, List. On the Mercantile System, see specially Ciinn. and Ciinn. Pol. Econ.; Smith ; Roscher ; Ingram. h ■ SECTION II. 1. The Mercantile System. — Last days of mercantilism. Groups of critics in France and England. Internal symptoms of decay. The rise of credit, and the establishment of Law's Bank in France (1720). Growth of speculative spirit. The Mississippi Scheme. Abuse of public confidence by ex- cessive rise of public credit. Collapse of Law, and general dislocation of finances (1724). Service of Law. Initiation of Joint Stock enterprise. 2. The Physiocratic School. — Reaction against mercan- tilism. Political Economy came to be studied in some measure by scientific method. I'he Tableau Economique of Quesnay. The Net Product and the Single Tax. Agri- culture alone regarded as productive by majority of school. Commerce and manufactures regarded as sterile. From tliis standpoint the physiocrats made effective criticism of mer- ^r 13 to of i cantile system, and partially developed the idea of freeing industry from State control. " The system of natural liberty." Contradictions of the Physiocrats — tendency to- wards absolutism as a means of obtaining liberty. 3. The Wealth of Nations.— The general scheme of the book. The indebtedness of Smith to the Physiocrats and to David Hume. Smith's criticism of the Mercantile System and of the Physiocratic Theory. His theories of value, of wages, and of rent. His attitude towards State regulation of industry, the taxation of imports, and the i)lay of individual self-interest. German criticism of Smith. Services to Economic Theory — (a) His destructive criticism of the Orthodox System ; (h) His indication of value as a measure of motive (Marshall). The effect of Smith's Avork upon legislation, see notes, pp. 16, 26. 1. Nicholson, Money and Monetary Problems ; Blaiuiui's History of Pol. Econ. 2. Ingram ; Blanqui ; 7'imjol, by Leon Say. For partial restatement of Physiocratic position, see Henry George, Progress and Poverty, .3. Smith, Wealth of Nations, ed. Rogers and ed. Nicholson ; Adam Smith, by R. 15. Haldane ; Hume, Essays; Bagehot, Essays ; Marshall, Scope of Economic Science. SECTION III. 1. The Theory of Population. — Wallace, Stewart, Con- dorcet, William Godwin. Their relation to the current strain of revolutionary thought. Reaction against Ideas of Artificial Social reconstruction. Fresh appeal to natural order. Essay on the principle of population, by Malthus. Its polemical aim. Its leading principles, viz. — (1st) That population tends to outrun subsistence ; (2d) That in so doing it meets with checks, viz. — (a) Positive checks, war, disease, etc. ; (h) Preventative checks, moral restraint, etc. Contemporary criticism of Malthus. Rapid conversion of leading economists to Malthus's views. Darwin's develop- ment of the principle of Malthus, — (1st) Theory of the "Survival of the fittest"; (2d) By (a) Natural selection; (b) Artificial selection. Spencer's qualification. His Laws of 14 Multiplication. " islultiplication iind iiidividiuitiou vary inversely." Bearing of this upon the practical outcome of Malthus's theory. Recent speculations in biology in this connection. Self-regarding and species — regarding instincts (Geddes). 2. The Theory of Rent and the Theory of Wages.— Predecessors of Kicardo — Dr. James Anderson, Malthus, West. Kicardo's method, mainly deductive. His theory of rent. Condensed statement connecting together the Theories of Labour, Capital, and Rent : — (1.) Let it be granted that the produce of any area of land may not be in direct proportion to the labour expended upon it. It follows that some lands may be more productive than others, labour being equal. (2.) Let it be granted that the labourer consumes a part of the produce — this part is AVages. The ratio of this labourer's share to the Avht e pro- duct is subject of investigation under the head — Theory of Labour. (3.) Let it be granted that the owner of the seed and farming implements receives a share of the product — this share is Interest. The ratio of this to the amount of stock is subject of inves- tigation under the head — Theory of Capital. It follows that if all land were of equal fertility, the product would be entirely absorbed in "Wages (Return to Labour) and Interest (Return to Capital) ; but all lands are not of equal fertility, therefore in some lands, assuming mobility of Capital and Laboui*, there is a third share or surplus — this is Rent (Return to Fertility of Land). 3. Disciples of Ricardo in England — James Mill, Senior. Contemporary Criticism of Ricardo — Jones. 1. Ingram; Godwiirs Political Jiiifice; Godmii's Life, by C. KegMi Paul ; Malthus, The. Principles of Pojnilatiou ; Malthus, by James Boiiar ; Ricardo and Malthus, Letters, ed. by James Bonar ; V. M^ 15 Gedtles, Thi Erofiition of Stx, and Iteports, Uritiah Association, 1S85, p. 1167 ; Herbert .Spencer, ^^rlnciph's of Jiiolofjy, vol. ii. pp. 391 et seq. 2. Kicardo ; Malthus ; Pol. Economy ; Posnett's Jiicardian Jient. 3. Ingram. SECTION IV. 1. Recent Economic Theory. — 1st Period. — Political Eco- nomy comes to be regarded as an established science, ■whose principles have been demonstrated once for all. Grounds for this belief — apparent success of free trade. Resulting optimism. Representatives of this period — John Stuart Mill (1848), Bastiat (1845-48), German Smithian School, Ran (1826-32). '2d Period. — Feeling of scepticism as to soundness of the l)revailing Economic Theories. Criticism of current Economic Theory by Auguste Comte (1839). Critics divide themselves into two camps — First, there are those who expound and modify the conclusions of the earlier Economists, and who regard the science as to be studied mainly by the deductive method. Among these is Cairnes (1857). Second, there are those who adopt mainly the method of induction, and who regard of the first importance the study of economic history. Among these is Roscher (1843). 2. The following groups adopt a method which may be fairly described as a union of the deductive and the inductive methods: — English Critical Group. — Longe (Wages Theory re- futed, 1866), Thornton, on Labour (1869), Cliffe Leslie (1879), Marshall (1879), H. Sidgwick (1883), Hearn (1864), Jevons (1871), Rogers (1884). American — Walker (1883). Professorial Socialist Group. — Suhiiffle (1870), Wagner (1871). Socialist Group. —Rodbertus (1850), Mario (1850), Lassalle (1861), Marx (1867), Meyer (1874). 16 M. Main Lines of Current Controversy. — (a) Indiictivo rcrsiis Deductive method in economic thinking; (h) Functions of the State ; (') Division of tlio Product of Collective Labour. 4. Influence of Economic Study upon Legislation. 1. Sidgwick ; .1. S. Mill; Koscher ; Ingram. 2. Cointc ; Ingrain, Hist. Pol, Eeon., and A (Idrenn Brit. Amu. 187S ; Sidgwick, AddrexH />. A. 1885; 'Science' Economic DiHcuHnion \ Ciuuiiiighani, Paper li. A. 1889; Marshall, Scope of Economic Science. 3. Ingram, //?V. Pol. Econ. ; John Rue, Contempomvy Sociafixm ; T. Kirkup, An Enquiry into Socialism ; Marx, Capital, 2 vols. 4. (See ref. 2 ; H. Spencer's Man rersus the State ; Blnntschli, Theory of the State ; Spe:icer's Principlrs of Soc. ; Spencer's Study of Sociolojy ; Donis- thorpe, The Ihmx of Indiridimli'^in,, Cunn. Pol. Ecor. PART IN. ECONOMIC PROCESSES IN MODERN INDUSTRY. SECTION I. Production — 1. Indispensable Conditions of Production : — Time, space, etc. Contingent Conditions of Production : — National Security, and Social Stability. 2. Analysis of Production. (a) (!) Simple form of Production : — Lab"UR acts upon Material. The result is Product. (2) Complex form of Production : — The Product of one operation becomes the Material of the next. Labour acts upon Product-Material, or Capital, in the form of Tools, and upon Product-Material in the form of Raw Material. The result is Pro- LUCT. (6) The Factors of Production are therefore — (1) Material, e.g., Land and Minerals. th Pi D D C 17 (2) Produot-Matkiual, or Capital, being that portion of the result of Production which i.s used in further production. (3) LauouTv. (a) Directive or organising labour; (b) Manual labour, (f) Relative functions of the possessors of the Factors of Production : — (1) The function of the Landholder, who possesses and lets out Raw Material. (2) The function of the Caritalist, who possesses and lets out Product-Material, or Capital. (3) {a) The function of the Employer or Entre- preneur, who possesses and lets out directive or organising labour-force. {h) The function of the Manual Labourer, who possesses and lets out manual labour- force. 3, Stages in Production. (a) Exploitation. {b) Manufacture, (c) Transport. Note. — Product material, though a somewhat cumbrous expression, is suggested as being more self-explanatory than the word Capital. 1. On Production generally, see J. S. Mill, Pul. Econ. ; Hearns' Plutology ; Sidgwick ; Marshall's Economk's of Industry ; Atkhison's Distribution of the Proc^Hct ; Guyot. 2. (o) (.S> (a) Walker, ira^cs Question, and Political Economy. SECTION IL Distribution. L Current method of Distribution of the Product of Collective Labour. (a) Payments out of Product for indispensable and contingent conditions of production, c 18 (1) Taxiition to Government for excrciso of Oovcrn- inentiil functions securing National Security and Social Stability. (Ji) I'ortion of Product withheld by organisers of Distribu- tion in order to secure continuity of production. {'2) Exchange Value of Material or Product-Material consumed in Productive process, including unproductive consumption by destruction through natural agencies. ('•) Share.: of tl-^ Possessors of the Factors of Produc- tion. (See p. 16.) {:]) Landholders' Share— 7iV///. (4) Capitalists' Share — Iiifcirsi. {')) Employers' Share — JFikjcs and Projit. (G) Labourers' Share — IFurjes. 2. Conditions theoretically governing the Kelativc Shares in the Division of the Product specified in — L The ^Theory of Rent. (See p. 13.) 2. The Theory of Interest. 3. The Theory of Profit. 4. The Theory of Wages. 3. Resulting analysis of G^rcw Cost of Production, or the sum of the Remunerations of the Agents in Production. {a) Cost of Conditions of Produc- ( ,^. Ttrd'on tions (see p. 15), J {})) Cost of Continuity of Produc-' tion, or of Replacement of Material and Product- Material consumed in productive })rocess, includ- ing Insurance against loss by Fire, etc., (2) CW of Material (3) Insurance. 19 (lllC- (4) lUnL (5) ////( /v'.s/. (c) Cost of Hire of Material — Land. (1) Paymciit for use of NatiiraK Agents — Economic Kent, . (2) Payment for a(lvant;iii;e of position — • Kent of situation, . . '' {(l) Costof llireof I'roiluct-Material \ or Capital, . . I (^) Cost of Hire of Directive) (C)) JTikjcs o/Siiprr- Liilionr, . . . ) hiicndcHce. (J) Cost of Hire of Manual Labour, {'i)Wag<'sofL(ihvui'. (g) There is, usually, in i)ro(lnctivc industry a (litlerence between the sum of these items of cost and the exchange value of the product. When this ditler- ence is a plus quantity, it is Pkofit ; when it is a iiiiiius (piantity, it is Loss. Li the first case it is at the disi)osal of, and in the second it is initially borne by, the organiser of the productive enter- prise—viz. tlie employer. 4. The Net Cost of Production is the Sum of the Sacuifices of the Agents in Production. The difllerence between the Gross Cost and the Net Cost is the measure of Productivit}-. There is thus an analogy between Rent, Interest, and Wages, in the sense that there is an actual physical return to each successive increment of fertility, of capital and of labour, and this return is Kent, Interest, and Wages respectively. These quantities are, however, economic quantities alone, and the amounts of Kent. Interest, and Wages, paid at any time, only more or less nearly approximate to the economic quantities. It is important to notice that these economic quantities are simultaneously determined (see Edgeworth, B. A. Keport, 1889, Section F, p. 17. When payments were made in kind, the constituents of distribution were actually so expressed. For note on historical evolution of distribu- 20 tion in terms of product, see expressly, Seeb. p. 121, and p. 70. Distribution. — Sidgwick. Theory of Rent. — Ricardo ; Mill; Pos- nett, RicanUan Theory of Rent ; Walker, Land and its limit. Theory of Interest. — Jevons. Theory of Wages. —Ricardo ; Walker, Wagex Question; Marshall's Econ. of Industry ; Thornton, On Labour ; Indus- trial Remuneration Conference Repoi t (Cassells) ; Atkinson, op. cit. Gunton, Wealth and Progress. See, however, Biilnn-Bawerk's analysis in Capital and Interest, Smart's Translation ; and James Bonar, The Aust7'ia7i Economists, and The Positive llieory of Capital, Quar. Jour. Econ. vol. iii. SECTION III. A. Consumption or use of Product. 1. For Social Use. — (a) Legislative : — Civic and National consumption. (b) Voluntary : — Foundations, endowments, etc. 2. For Personal Use. — (a) Standard of comfort or normal level of consump tion of — (1) "Working class. (2) Employing class. (3) Capitalist class. (4) Landholding class. (h) Luxurious consumption by each class. 3. For Productive Use or Saving. (a) The Law of Increase of Capital. (b) The return to Capital — Interest. B. Consumption of Human Life and Energy in Production. (a) Industrial Pathology. (b) Economic Value of Population. (1) Physiological conditions pre-determiuing choice of occupation. (2) Physiological effects of certain occupations. Life tables of occupations. V r^' 21 (c) The mobility of labour. Reaction of Consumption upon — (a) Production, as regards^ , (j^,.^, ^^ U (1) Quality of Products. (2) Quantity of Products (over or under-pro- duction). (b) Distribution, as regards (1) Relation of Rent, Interest, etc, and Prices. (2) Relation of Wages and Prices. (See p. 22.) (c) Exchange, as regards (1) Normal Trade. (2) Inflation of Trade. (3) Depression of Trade. Note. — That Economics is based upon consumption, and upon the biological conceptions which this involves, is recog- nised among others by Malthus, Doubleday, and Jevons (see e.g. Jevons, p. 43). The biological theory of Economics has been fully developed b}'' Geddes, Oj). cit. A. 2. (a) 3Tass. Bur. Reports, 1885 ; Booth, East London ; (6) Wylie's Labour, Leisure, and Luxury ; Carpenter, Civilisation, its Cause and Cure. 3. (a) Mill. B. (a) Industrial Pathology — Cantor Lectures, by Dr. B. W. Richardson ; (6) Chadwick, The Health of Nations ; Memo- rial Volume, Dr. Farr ; Guyot ; Supplementary Report, Reg. Gen. 1885, Parliamentary Paper, G 4564 ; (c) Reports Commission on De- pression of Trade ; Booth, op. cit. ^ i * rl SECTION IV. Exchange. 1. The Theory of Exchange. A. Theory of Utility. B. Theory of Exchange Value or Price, (a) Cost of Production. (See p. 17.) (b) Market Price. 22 ! I c. Theory of Money. 1. The functions of Money. (a) Medium of Exchange. (b) Common measure of price. 2. The Status of Money. (a) The Fiat Theory. (h) The La'^iser-faire Theory. D. The Theory of International Exchange, (a) Barter of commodities. (J) Export of Coin, (c) Transfer of instruments of credit. 2. Practice of Exchange. A. Barter. B. Money. C. Instruments of credit. {a) Granted by Government. (J) Granted by bankers. (c) Granted by private persons. Payable in Money. («) On Demand — Bank notes, cheques, telegraphic transfers, etc. ih) On Specified Dates — Exchequer Bills, bank post bills, drafts, promissory notes, etc. i q C V / 1 11 V 1 3. The History of Exchange. The History of Money. {a) Coinage. {h) Gresham's Law. (c) Silver as money. {d) Gold as money. (e) Monometallism. (/) Bimetallism. {g) Appreciation and depreciation. ill) The question of a fixed ratio. I Lpliic bank 1 23 (i) Monetary legislation. (/) Practicability of a multiple standard. Exchange. — 1. Jevons' Theory of Political Economy ; Cliflfe Leslie's Essays ; Cairnes, Principles of Political Economy ; DanaHorton, Position oj Law in the Doctrine of Money ; Barbour, Theory of Bi-metallism ; Goschen, Theory of Exchanges ; Jevons' Money ; Macleod's Banling ; Marshall ; Bagehot, Lombard Street. 2. Jevons' Money ; Edge- worth, Monetary Standard Report, B, A. 1887 ; Nicholson, Monetary Problems ; Dana Horton, The Silver Pound, etc. 3. Roscher ; Jevons' Livestifjations into Ctirrency and Finance; Report Monetary Com- mission, Paris, 1878 ; Reports Silver Commission, 1876, 1888 ; Edge- worth, Memorandum, B. A. Report, 1887. B. The History of Eent, Interest, Wages, and Profits. (ft) General Retrospect. (&) Wages in America and England. (c) Wages Disputes. (d) Influence of Trade Unions. (e) Arbitration. (/) Sliding Scales. [g) Agriculture and Eent. (li) Movements in rate of Interest. (i) Movements in Profits. c. History of Prices. (ft) Purchasing Power of Remunerations. (See p. 17.) {h) General Retrospect, (c) Trade cycles. {d) The Course of Prices, (e) Chief causes of Price movements. 1. Climatic and similar physical variations resulting in varied productivity of harvests, etc. 2. Changes in political conditions. 3. Speculation on the probability of varia- tions in conditions affecting prices. 4. Expansion and contraction of credit. 24 5. Changes of monetary law. 6. Variations in the quantities of the precious metals available for use as money. 7. Alterations in the productivity of labour in consequence of diminishing returns, varying natural advantages, discovery of new sources, and invention of new tools. 8. Variations in demand for consumption due to increase or decrease in population (quantitatively and qualitatively — num- bers and health), change of fashion, variation of standard of comfort. 9. Variation of relations of members of complementary groups of commodities. 10. Alterations in geographical relations by opening or closing of means of transit — ejj., opening of Suez Canal and diminish- ing use of Cape route. 11. Competition and its opposite — monopo- lisation. 12. Legislation — Customs and Excise duties, Acts of Parliament affecting hours of labour in particular industries. 3. B. Price, Industrial Peace ; Jevons' Investigations on Currency and Finance', Reports of American Statistical Bur eatix ; Labour Statistics, B. of T. c. Prof. Foxwell. Fhictuations in Prices, Clainia of Labour Series. GifFen, Essays in Finance, First and Second Series. Jevons, ojJ. cit. Sauerbeck, On Prices, Journal of Statistical Society, vol. XLlx. p. 581. R. H. Inglis Palgrave, Memorandum, Third Pteport of Commission on Depression of Trade, Appendix B. Tooke and Newmarch's History of Prices. PART IV. National Economy. A. The Relations of the State to Industry and Commerce. {a) The State may let Industry and Commerce alone. This is kiisser /aire. 25 (b) It may attempt to confine competition in trading to the frontiers of the nation by imposing tariffs upon foreign commodities. This is Protection. (c) It may attempt to secure international competition in trading by abolishing tariffs and by entering into commercial treaties based on the reduction or abolition of tariffs. This is Free Tri,de. (d) It may, while adopting (b) or (c), control industry by such legislation as Factory Acts, Mines Acts, Margarine Acts, Merchandise Marks Acts, etc. etc. This may be described as Opportunism. (e) It may organise industry by making it a govern- ment department or series of departments — e.g. the Post Office in most countries, and the tobacco manufacture in France. AVhen all industries are thus organised, this is State Socialism. B. Public (State) Finance. The Budget. 1. The Revenue. (a) Taxation, Incidence of Taxation. Current Methods of Taxation. (b) Payments for direct services rendered b}' Government, or for industries undertaken by it. 2. The Expenditure. (a) Interest on Debt. (b) Army and Navy. (c) Civil Services. (d) Education. 3. Capital Expenditure. The National Debt . c. Public (Municipal) Finance. 1. Local Taxation. D 26 2. Expenditure. Public Health. Education, etc. etc. D. Services required of Citizens by Government. (a) Forced labour. (b) Military Services (Conscription). (c) Services in administration of justice. (d) In Municipal Councils. (e) In Parliament. A. Smith, W. of N. ; Spencer's Man v. the State, Study of Sociology , and Essays ; Aub. Herbert, For Liberty ; Huxley's Critiques and Addresses ; List, National System of Political Economy ; Jevons, The State in relation to Labour ; Cunn. l^ol. Econ. ; Farrer, Free Trade and Fair Trade, b. The Annual Budgets of the Chancellor of the Exchequer ; Wilson, The National Income, Expenditure, and Debt ; Dowell's History of Taxation, c. Local Gocernment, Cobdeu Club. 1 t 1 -V. I •27 PART v.— GENERAL SUMMARY. and , The Crade f the Debt; b. r I 1. In the preceding series of charts a course of reading has been mapped out, by following which it is possible to obtain a general survey of English economic history, of economic- opinion, and of industrial and commercial legislation. Such a general survey would disclose how chauges in agricultural methods, how alteration in industrial processes have affected the development of our country, and have made now one district prosper and now another. It would disclose how the varying conditions of industry and commerce are reflected in the fluctuations of economic opinion, how prevailing views of the functions of the State fluctuate between partial patri archalism and partial laisscr /aire, how custom and legisla- tion mutuallj' hang upon each other, and how political move- ments and economic movements are closely related. 2. The suggested analysis of the economic processes in modern industry will result in the discovery of certain definite relations between those processes, and now, by way of bringing these into focus, the following brief summary is offered. The remark of Jevons " that Economics rests upon the laws of human enjoyment ; and that if those laws are developed by no other science, they must be developed by economists " (Jevons, p. 43), may be taken as a starting-point. Referring to the context, and to the writings of Mill, Sidgwick, and others quoted above, for full discussion of the subject, it may be noted generally that this view involves the conception that Economic Science has to do with that part of life which consists in the experience and satisfaction of needs con- sidered in relation to the resources available for this satis- faction. Round human needs as a, centre, all the recondite questions of supply and demand, of final utilit}^, of value, of exchange, of consumption, i)roduction, and distribution, range 28 themselves in definite relations. The extent and urgency of our needs constitutes demand. The relation of one set of needs to another set brings about exchange, and determines value. The existence of our needs necessitates production, and the satisfaction of them is consumption. Economics is thus concerned with a three-cornered relation, viz. a relation between man and man and materials. This may be expressed in the following diagiam : — T o o o Man SOCIAL SCIENCE. (o) Ethics. (ft) Economics. Value. Matkrials. PHYSICAL SCIENCE. So far as materials are concerned there is that part ot economics which is known as the Statistics of Production, or the quantitative statement of the grain, iron, coal, money, available at any particular time, or made available during any period. As regards the relations between man and materials, we have the phenomena of production and consumption both involving direct contact of man with materials. And here statistics and technology divide the field with economics proper. Then we have the relations of man with man as o o M fe o (3 u v -fi»- 29 regards materials, involving the play of needs against needs, and from this arises the question of exchange value, the quantitative statement of need. Then there is the relation of man to man involving the rendering of service by one man to another in satisfying needs ; and there, again, the play of individual needs determines value, and gives rise to questions of distribution. In these relations biology and ethics share the field Avith economics. It is thus possible to look at any human action from three points of view at least — from a biological point of view, from an economic point of view, or from an ethical point of view. To clear vision these ditt'erent points of view do not yield contradictory results, any more than chemistry and geology yield contradictory results, though each regards a piece of rock in a manner appropriate to itself. All of the sciences, Avhose relations to each other have been indicated, take cognisance of certain human social forces and certain extra human forces, and when they fully understand these, a task sufficiently enormous, they are each doing their proper work. The paramount need of the time is a co-ordination as adequate as the specialisation which, up till now, has been the charac- teristic of scientific research on every plane. It is for the student of human life, or the sociologist, to co-ordinate the results of biologist, economist, and moralist alike ; and for the administrator or social reformer to shape his action in con- formity with this co-ordination. 3. The following diagrams of Social Dynamics are intended to show in brief outline the bearings of the theories and schemes of social progress that are now current, many of these in one form or another having appeared and reappeared during our historic survey. Each of the theories and schemes incidentally offers a criticism of the theory and the scheme by which the world wags now ; and these criticisms, varying in value as they do, are to be regarded as an integral part of the subject-matter of our study, since they indicate certain definite tendencies in economic opinion. If they do not now ])revail, some of them have prevailed, and may again do so. 30 In any case it is our duty to study tlieni, their perpetual recurrence alone raising them out of the region of mere useless hypotheses. Present opinion on economical questions is undoubtedly more or less affected by all of the theories classified, and may, indeed, generally be said to be an eclectic acceptance of some contribution from each of tl)cm. \ w^flf*^ J •'4IIP' 9. - % is .s s ■*-• > Si? ;s. c 5 .-S 2J 3 ^ •51 X -^ ^^ X y !a '-^ J --; o - CO o 0.2* S ^ (0 CI ;^ 1-^ p u 1?^ ^- s "5^ >> 72 "" < z >- o ^ cj rt o ^ -J Ii S 5 i ,;'^l < -3 .H 5 o > c S -M ■y. i^ J o o CO ^-- a *-^ "^ "--; ^ i: « ►^ - '/. ■t^ ^ \\ u. H ^ - T 'jZ -3^ ii, _ o < en o ^ u 2^ ! S ^ 2 . CO '.^ 1 o < D 1 ^s vi 03 — ' o <5 J.2 k12 o 1— 1 Eh 1— 1 OS's o - »-l Q o :r 02 - o 5 I' ' •}on[»().i,i jo uoisi.xip JO p()i|)om (^uo.i.iii.) Ill uoi;u.io:(p! oil 0Aio.\ii| W •(joupai,! J° "oiRi. 7i 1« a ^^ o a **" o en .M u ,. a 2 -j =3^: 'C .2 S rt -*-• > M ss CLi n .3 £ -4-1 ;?.^ o CC-- CO •n L III O .•-> U 73 c! ■M C/J >> .^ t*-! o o '-i 01 'A o 13 •+-» rs d > &H ^3 45 .S 73 o w "3 s r-i l«! s rt o •^ H .? ^ s 73 m o > a m u a o 2 a o c .2 «fl a. a o ll 2 6 EP 33 'p^ §-5 .3 a a y ^■/T f , O «8 t: a « »i 7i u a OT^:^ a ■•^ rt o '3- •43 ^ o >>a — y:3 73 'a a a OS a >,« •p a^ »3 " rr to Tc.a a 01 b .a tM b ,-J « u ^ o OJ c 3= O rt i2^ !r> 2 (0 es a ^ a ^ a i^ o'^.S &< H D SO a ■73 "^ 01 0) rt o to a a « a^^ 'o'H- a S .2 y a a 5J f/3 -4-» 73 ,a 73 '-G « O tO!- -^2 ■M ra « o rt o o . a 01 rt,i:i 5 ■= > ,^ CO <-« ^:5 a O a o^ y . S a a 73 ^ jn c3 C"'-*3 ■^■^^ U 04 r-J CJ ^ S 3 o a-^ rj r— ■ -M •- y 2 .S ^ 3 O f^ *> C4.H s ■*i' 73 .- O . '^ . ri ^ Z 'n •-> uic/n of on join r-*-Cr3 .2 S-o a f^- b D 73 a to »3 u V y 2'y a !h ■xj a P s^ .3 S y y £ o »: •-* 73 y; 3^ I Hi a— a o y 0) i '^ o 3 a ^ 5;„«3 — Pm 15 W3 £ 72 c O 73- > y -^ ■*? . y eg ;^ o _y o X '^ i-s >. 2. sec 15 S .'^ .•ti o c^ 2 = 5 I a o 3 ■4-) o rt '^ g rt ^ H (-« a , o ts CJ f to •43 O a 73 c Q 4J rt ri o a 0) o ;^ o O - a ,3 a o rt .2'i3 ^3 ^a'« iiri y o O o a?'c -My.- o ■*^ iM e<5 •.l.lOHf^ •.•I.Mi^T)OS•SV — •« •;0111HU,| jO UOlBjAlp p pomOlU !JUi)J.inD JO UOl^mO^Jl! 0A|OAlli 01 •^ t! ^ O 3 ^« tn y it o Qi u '/I tk a a o > ^ u "y lii 0) o a u n ■r. y •4 u s t*4 y v > y 0) 'o'Hh a S .a o' a O O o a o) -! ., a y -H y (— ^ |i ^ 2 — y r3 "I = =2 y y 3 S3 Q* 'fi o .1 ^ —I ^ S y o 'i I— ' -M '■- •» =" 73 ij .2 1- o a Oh-3 •o" « rt o CO y &i c >i:. ^ y o| u u s o a +* .* B !3 p 13 60 in V y ti a p ft a a s^ y o a O 03 is o ^ ° y .3 a -a X y . y^ •^^ 2 to ai •5 £ to S^ 1:3 ■%•% y a o o y o to 6.S y s-i y "o? '■*j +!> :3 o a P< a • «3 ;S to . 'w 3 to ay ^ a w liJ 4! S "o =P y^ 1 2 - 3 a "•.§ a-2 i to rt y a -a a »5 ^ "s i»-i >> s T! a = -2 %^^Z y rt rt i O o a y a a.S c3 a 4J •— ' nn to y ^:5 ■^ a i* .22 rt . ra ^ a. Sag fii 4^ to t^ to 3 S ° i^ . 2 y CD 1* . 2't;:S y -^ y to t? >,>*H 132^3 »^a a o ^ s a -a 2 -a .5 .a y ^ O .23 y rt ■43 '^ •« 73 fteo 5 y r> to X a 3-^ ;-! a S ^ i^ 22 § a to o y o g « 1J^ 'Ti'^ a u 73 ? ^ y ., 22 y ra a &<^ .a o a a £ rp 03 g -^ g « » a' 5P » ^ 3 2 fl^ •5 i.2 »- " 2 '-^ g I a J y ? a '^ ^-3 o 2 .2 -l-> -M » o^ J^ F^ -<-> -tJ . ■Jl f a = U to 3 y a s'^ 3 rt rt ..H : c^ W •J3 O Ph a o 3 a "^ .2P y -u Ai y ?P4 o •^ '.to _ a ,3 a o rt O • rt ».< % 3^3 o O « y a ?■ rt -a o.;5-r y " o O ,0' o y a c3 y o y s a •73 y a a o y e ■5 ,c ^ * ** " .— . y S «3 rt P'y - O a "* y rrt, y a IS rt +J _ y a a "^ ^' _^ w "^ w 'd Tr .;; a _a ? ti J s •- .5. -5 s rt a 5 '■'^■::.^:c5t ,_, S = K o 2 = -^ ;f.-5 ^.^ 5 o 2 : .« -Sv, ., ' :£ -< i5 1: L- a-s - y .2 a 5 rt - rt y to ■% y O to^ o - 2 i: r- ^ a, 3 T ~ /v s ^ 2 o »< 5-^ S a o ■ a c o 32 c X MiKlHf) MAIiATJOSSy — 'a Vhl(>;ij[) DixsnviDos — '0 .- ^ .^ .^ ? .- C — . e! i i i ^ ■r ./;•/. o r-- s a •_= .t i- M :- a a = •§:?..: gf f^- ^ ^ ^^ V rt ^ i 3 «.> S .• = S £C . ".s'sg-.-uH X- ? ^ " = = ^ ^S 5-^ o 2 g C ^ Cjs ~ rt is ** "i - "^ .. 5 '^ C i- ^ • .£■ b >•.=' "S 1° C" '' ~ ~ ^ t/2 S = '^ 'I ^ - = 31 I. DIAGRAM OF SOCIAL DYNAMICS, Showing effect of the adoption of some Schemes of Social Progress. Classes pre- sently exercising Function. Reward. Function. 55 State. Government. Taxation. O A ^ 1. § 1 \ o M EH Landholders. Landholding. Rent. 0. Q < CO 5 o i • o H O D Capitalists. Holding of Interest. ^ O Capital. 1 > Employers. Organisation Salaries and H of Labour. Profits. 'EASAN t O Labourers. Labour. Wages. P. I a V V V Land Nationalisation involves the transference of the function of landholding and the reward of its exercise from the landholders to the State, and does not necessarily involve anything else. State Socialism involves the transference of the functions of land- holding, capital-holding, and in extreme forms also of the organisation of labour, from those who exercise these function . at present to the State — the officials of the State exercising the functions and being paid for their service. Peasant Proprietary involves the transference of the function of landholding to the labourer. Co-operative Production with Profit-sharing involves the trans- ference of the function of the employer to the labourers collectively, and in extreme forms also the function of the capitalist. Co-operative Distribution and Co-operative Production (Feder- ALiSTic) involve no transference of function from one class to another.