IN MEMORJAM
JESSICA PEIXOTTO
1864-1941
THE LIMITS OF SOCIALISM
THE MACMILLAN COMPANY
HKW YORK BOSTON CHICAGO DALLAS
ATLANTA SAN FRANCISCO
MACMILLAN & CO., LIMITED
LONDON ' BOMBAY CALCUTTA
MELBOURNE
THE MACMILLAN CO. OF CANADA, Lm
TORONTO
THE
LIMITS OF SOCIALISM
BY
O. FRED BOUCKE
Professor of Economics at Pennsylvania
State College
gotfe
THE MACMILLAN COMPANY
1920
All rights reserved
I
COPYRIGHT, 1920,
BT THE MACMILLAN COMPANY
Set up and elcctrotyped. Published April, 1920.
IN MEMORIAM
PREFACE
At the present time the general reader will, the author
believes, be interested in some of the following questions
which socialism has sought to answer in its own peculiar
way. First, to what extent can the income of the average
man be raised under socialism, as contrasted with the pres-
ent individualistic regime? Second, if any marked change
in national income is to be expected from socialism, in
what direction will it most naturally occur, and what are
the limits set to this endeavor? Third, is it true that so-
cialism can establish a democracy in the political sense such
as individualism has not as yet pretended to have realized?
Fourth, is Marxian economics an indispensable basis to
the program mapped out by socialists, or is the refutation
of such doctrine, as hitherto submitted by professional
economists, a relatively unimportant step which in no wise
invalidates the general outlook of socialists? Fifth, if
socialism is a theory of prosperity, what is the scientific
basis for it, and, more particularly, what data has present
day science to offer in support of the thesis expressed or
implied by socialism, that a rational method for socio-
economic reform exists? Sixth, what are the ultimate
questions which socialism has attempted to answer, or
must feel obliged to discuss hereafter, in order to find a
logical groundwork for its demands?
These and some other outstanding topics have been
given consideration in the following pages, and it is hoped
that in them will be found a review, from partly new
standpoints, of what is most important in socialistic plat-
M141411
PREFACE
forms. The fourth and fifth chapters contain founda-
tions for all later ones. On them the treatment of the
whole subject largely rests. However, it is hoped that the
summary which opens the last chapter will furnish a con-
venient guide to some of the main points advanced, and in
this way make clearer the idea of limits in socialism, within
which socialists hand in hand with social scientists may
continue their studies, but beyond which progress is less
certain and more open to the sort of criticism which up
to date has injured the socialist cause.
State College, Pa.
TABLE OF CONTENTS
PART I
THE LIMITS IN THEORY
CHAPTER ONE PAGE
THE PROBLEM 1-10
CHAPTER TWO
KARL MARX AND THE ECONOMISTS 1143
CHAPTER THREE
THE ECONOMIC INTERPRETATION OF HISTORY . . 44-57
CHAPTER FOUR
THE ECONOMIC INTERPRETATION OF HISTORY (CON-
TINUED) 58-108
CHAPTER FIVE
JUSTICE 109-125
PART II
THE LIMITS IN PRACTICE
CHAPTER SIX
THE LIMITS IN PRODUCTION 126-159
CHAPTER SEVEN
THE LIMITS IN DISTRIBUTION . , 160-189
CONTENTS
CHAPTER EIGHT PAGE
THE LIMITS IN CONSUMPTION 190-210
CHAPTER NINE
THE LIMITS IN GOVERNMENT 211-237
CHAPTER TEN
A PETITION ... . 238-256
LIST OF TABLES
TABLE ONE PAGES
A Comparison of Marxian with Ricardian and
Marginal Economics 267
TABLE Two
Age Distribution in the Population of Different
Countries in 1910 133
TABLE THREE
Possible Changes in the Labor Supply of the
United States for the Year 1910, According to
Socialistic Standards 135-6
TABLE FOUR
Industries with Small-Scale Production, United
States, 1910 142
TABLE FIVE
The Distribution of Incomes in the United States
in 1910 147
TABLE Six
American Manufactures in 1914 Which Were Con-
sumed Chiefly by People Earning Over $1200 a
Year 151
TABLE SEVEN
Number of Gainfully Occupied in the United
States in 1910, to be Reduced or Eliminated Under
Socialism , , 153-4
THE LIMITS OF SOCIALISM
CHAPTER I
THE PROBLEM
i. General Statement of the Problem. Social sci-
ence has to do with social processes. It studies the
facts of social life and seeks to discover whatever prin-
ciples of general validity and permanent operation may
underlie them. The sociologist and economist notably
are interested in this side of the subject. Each studies
the phenomena and looks for laws with a possible view
to application. The basic sciences for them are biology
and psychology. After they have laid down the funda-
mentals obtaining in social life the statesman may try to
make use of them for his own purposes. Politics is then
the science dealing with the application of principles
formulated by sociology and economics.
This is one way of stating the sociological problem
in general. A second is the common sense view which
simply asks: Are there any social evils? Is there any-
thing to correct in the life of individuals or nations? If
so, how may it be done? As regards the evils, are they
inherent in life or are they eradicable? Are they of per-
sonal making or should we look for their explanation in
certain objective conditions over which the individual has
no control? In so far as evils are removable, shall we
rely upon one major remedy relative to which all others
are merely auxiliary, or is the cure to be effected by call-
ing to aid many forces for betterment, no one of them
1
2 THE LIMITS OF SOCIALISM
sufficient by itself, but their joint effect being a regenera-
tion of society?
At all times we have these questions to face, because
evils always have existed and likely always will exist. If
the word evil is rightly understood, its complete elimina-
tion will not be expected by any scientist. There is al-
ways room for improvement; we shall never adjust our-
selves to our surroundings perfectly.
2. The Socialistic Platform in the United States.
Socialism is a doctrine and a movement for reform which
has seen some of the deeper aspects of the problem and
tried to solve them in a rather unique way, by abolishing
capitalism. The core of socialism is the abolition of pri-
vate property in production and distribution, and the sub-
stitution for it of public ownership. The public in gen-
eral, and not particular individuals, are to own the means
by which goods are produced and exchanged. This sub-
version of one regime, and the introduction of another
in which the capitalist is superseded by the state or by
the community, is the central theme of socialists.
Socialism however is more than one single thing. It is
not simply a theory, but also a movement for redress of
evils. It is preaching and practice in one. It is the
enumeration of evils, their explanation, and a prescrip-
tion for betterment. Socialism consists of an indict-
ment, a theory, and a platform for propaganda and
eventual realization. Socialists have a creed which guides
their conduct, and in this respect they are much stronger
than many other would-be reformers. Scientific socialism
is scientific because it properly inquired into the Why of
affairs before proposing to get at the How.
The socialistic attitude may be illustrated from a simile
in a charming book written by Edward Bellamy. 1
i Bellamy, E., "Looking Backward," p. 10.
THE PROBLEM 3
Society there is compared to a coach driven by Hunger
and dragged on a seemingly interminable highway by a
throng of toilers. What a hilly road it is ! What
windings and obstacles ahead. What a wearisome jour-
ney for the common folk!
On top of the coach ride a few privileged ones who en-
joy themselves to their hearts' content. They admire the
beauty of the landscape on each side of the road, and fill
their lungs with exhilarating breezes. They do not gaze
too fondly upon the embarrassment of the team below, for
the spectacle of distress jars on their delicate sensibili-
ties. They are willing of course to dress the wounds of
those bruised by the ceaseless straining in harness, but
they wish to keep the vehicle moving at all costs, and they
spur on the laggards with false words of cheer.
Yet they do not always remain in their seats, nor are
all those below condemned to perpetual toil. An exchange
of seats does take place from time to time. Some of the
throng, perhaps, manage to slough off the shackles which
bind them, and succeed in climbing to the top. They
then join the crowd of joyriders and are received with
more or less coolness. Or some of the privileged ones
suddenly come to the end of their life's journey and be-
queath their rights to those below waiting anxiously for
the favor.
A seat on top is what everybody wants. And yet no
one there is really happy, for all are trembling in ever-
lasting fear of a disaster. At every turn of the road, at
every blocking of the track, they shake with trepidation
lest the coach be upset and a painful ending meet them
below. They enjoy their advantages such as an unequal
assignment of labors may give, but they face the future
pessimistically, because their conscience smites them.
Socialists have accepted the picture as substantially
4 THE LIMITS OF SOCIALISM
true to life. They have called attention to the inequali-
ties in social arrangements and demanded a change for
the better. They have insisted upon an upsetting of the
coach because they see no other way out of the difficulty.
The socialistic theory of progress has been formulated
to make this clear.
Scientific socialism comprises four points of theory
that formerly were considered essentials for its success
as a political party in action. It was the first of so-
ciological doctrines to preach that prosperity must be
measured by wealth, that all social relations turn on
facts of wealtlPand its production or exchange, that
evils are the result of a maladjustment socially grounded,
and that a revolution was impending because of a uni-
versal law which no man and no act of legislation could
defy. This is in large part the significance of socialism.
It taught us to connect our moral ratings with the eco-
nomic facts of life. It pointed out the paramount im-
portance of income for purposes of self realization. It
treated the problem of misery objectively, and yet hu-
manized it by holding man responsible rather than nature.
And finally it exemplified the might of maladjustment by
showing how private property under different systems of
production could have entirely different results for the
masses of the people. From this many things followed,
but one of them notably was the value of sociological
analysis and the need of enlightenment which should rem-
edy evils before a law of evolution did so abruptly.
Marxian economics and Marx's interpretation of his-
tory have been mainly associated with socialism. It has
been held that the economics expounded by Marx in his
Capital was the making or marring of socialism, and
that socialism loses its usefulness, becomes a failure, if
certain contentions in the theory of value or in the eco-
THE PROBLEM 5
nomic interpretation of the past could be proven unten-
able. In this spirit mere details have often been magni-
fied into decisive issues, or what were salient features have
been made the test by which to settle once and for all
the questions of social reform. Yet it is significant, and
it should be well noted by the critics of early let us say
dogmatic socialism, that the arguments of Karl Marx
have been in large part abandoned by his successors with-
out weakening in the least their ardor, or the chance of
their achieving unusual things. This alone should have
disillusioned those who thought that the end of the Marx-
ian system meant the death-knell of the socialistic move-
ment. It manifestly could not mean that.
Since 1890 the German socialists have said little about
surplus value and much about political rights. Oppor-
tunism has diluted scientific socialism, but it has given
a new lease of life to the main assertion of socialists that
great evils exist, that they are widespread and perceived
by the masses; and that the socialization of capital will
alone relieve mankind of its social diseases.
The war has further modernized socialistic demands,
besides putting practice in the foreground; and in the
United States it has widened the vision of reformers, so
that to-day American socialism is stronger theoretically
and practically than ever.
The party platform of 1918 2 calls for the federation
of all nations with a view to ending wars. It pleads for
a uniform monetary system for all the world, for the
devising of machinery to adjust credit to international
needs, for the reduction of armaments, and for an inter-
national minimum wage scale. Those things in particular
are to be made the concern of all nations in an endeavor
to promote universal goodwill and peace.
2 Congressional Platform of the (American) Socialist Party, 1918.
6 THE LIMITS OF SOCIALISM
In addition however many other demands are made,
some of them familiar and approved by the founders of
socialism, and others of recent origin, the result of con-
ditions which Marx could not foresee. We have again,
for instance, the clarion call for a nationalization of priv-
ate capital, without which socialists would lose their most
distinctive mission. Public utilities and basic industries
including mines, grain elevators, stockyards, and banks
are specifically enumerated as preferential subjects for
socialization.
Other items of note are the abolition of child labor,
a reduction of the working day commensurate with tech-
nical progress, the official recognition of a national mini-
mum wage, the extension of the right to strike and to
boycott, the appointment of shop committees with rep-
resentation of labor, the introduction of free vocational
education, gratuitous insurance of all workers, both rural
and urban, against accident and sickness, and the guar-
antee of employment to all who seek it.
These are the main economic rights which socialism
to-day grants to the working classes, and the acknowl-
edgment of which by the state is the goal socialists are
aiming at. They come first and overshadow certain po-
litical reforms that are also urged, but which, we may
be sure, will follow automatically once the economic rights
of the citizen are put into operation.
3. Leading Questions for Socialism. The question
is: Are these demands fair? Do they harmonize with
socialistic theory ? Or more to the point, are they agree-
able to the data of social science which socialism has al-
ways made it a point to consult in the framing of political
and economic platforms?
One may, to begin with, put this more concretely by
asking what socialism promises in case it is given a free
THE PROBLEM 7
hand, and how much of its promise is realizable. Grant-
ing the socialization of capital, what can socialism do to
root out evil and improve our living? According to its
own admission the facts of production, exchange and
control occupy a preeminent place in any scheme of
meliorism. If then the socialist is confident of accom-
plishing by his system what heretofore we have not
managed to do, on what grounds does he make his
promises ?
As to production, e. g., can socialism produce so much
more than individualism? And in what kinds of goods
is the gain to come? As to distribution, what is meant
by a new principle in the pricing of goods and services?
In how far may socialism ensure each man his product,
when the competitive regime fails to do so? What are
the limits in measurement of values and services? What
is to define for us a need, according to which family bud-
gets will be made out?
Or take the problem of consumption and of control.
What will socialism mean by consumption that the ortho-
dox economist has not meant by it? To what extent can
economic income regulate psychic outgo? How far may
we hope for race improvement by means of socialistic re-
forms ? And in what sense can socialism make democracy
real, when up to date it has been a mere sham, or at best
a modest approximation to a lofty ideal? Can the people
be led to direct themselves politically? Is the prospect
of perpetual peace bright enough, so that our time hal-
lowed traditions of nationalism may give way to a more
generous view of mankind?
Such are immediate practical questions that the social-
istic theory inspires. But, in the second place, it prompts
us to meet squarely the far broader problem whether a
rationale of meliorism really exists? Is it possible, and
8 THE LIMITS OF SOCIALISM
why and within what limits, to establish principles of re-
form which shall satisfy our craving for justice and social
welfare at a given moment? Is reform, in other words,
a matter of science, or of whim and hazard without pos-
sibility of guidance? Do we feel wrongs without having
redress elsewhere than in our personal adjustments, or is
there a way for governing people so that the welfare of
the largest number becomes feasible and normal?
This larger phase of the socialistic movement forces us
to search into the nature of knowledge, into the relation
of social aspects which the founders of socialism so bluntly
stated and sought to demonstrate to a critical world. It
is ultimately a matter of psychology and sociology, if by
the latter term we may designate the sum total of investi-
gations into social man; However, the psychological
data may be divided into the logical and the psychological
or biological, and the first then asks : What is our
knowledge, how do we reason, and what is the meaning
of laws and causation? And the second then treats of
the subjective interpretation of the social process. Man
of necessity is in the center of things. The social student
invariably will go wrong unless he considers all sociological
and economic data an expression of living men and
women, whose innermost nature is the key to any prob-
lem that may present itself.
An answer to socialism hence involves an inquiry into
the process of learning by which stimuli become response
and thoughts are converted into actions of enduring
value. It is for the critic of, or sympathizer with, social-
istic teachings to picture the relation between economic
and non-economic conditions as an individual experience.
Only in this manner can the Marxian interpretation be
rectified in the modern scientific spirit. Only by this
route shall we succeed in tracing the real connection be-
THE PROBLEM 9
tween historical events which to some seem not at all re-
lated, and to others are almost identical. If socialists
dwelled on the causative force of methods of production,
"wereTEey wrong or right? Was the relation stated cor-
rectly, or is civilization an organic whole whose parts
the historian may not separate on any excuse?
The wider treatment of the question of meliorism leads
to a conception of progress and prosperity not altogether
opposed to the notions held by early socialists. It must
be part of the would-be reformer's education to define
prosperity, since Marxian philosophy is so incisive on
that point. It is necessary to appreciate its view of
misery as an integral part of an outlook developed not
by economics, but by metaphysics. It is inevitable in-
deed that a contemplation of socialistic ideals and prom-
ises suggests an answer to the query: What is the ulti-
mate good, what is justice, and what is the bearing of
science on norms of life that under individualism as well
as under socialism are reflected in acts of the legislature?
Socialism, since it is a theory of prosperity, implies all
these questions, and more. It compels us to take a long
view of things, not a near at hand view individualistically
trumped up. Socialism is stern and bold. It boasts a
noble intellectual lineage, and will not be put off or
downed by flippant banter. Complacency cannot undo
the ills that are known to exist, and an appeal to national
traditions will deceive none except the thoughtless ones.
Socialism is neither a chimera nor a crime, though by a
few it has been considered both.
The need for reform seems universallv conceded. But
whether it is or not, the reality of the larger problem
no one can deny. It is worth while to know whether
social evils have causes that we can specifically unearth
and offset by remedial measures. It is important to de-
10 THE LIMITS OF SOCIALISM
cide whether politics is more than a game among fight-
ing cocks. It does pique the curiosity of many good
folk to see illegalities and absurd criminality flourishing
in this age of enlightenment. They involuntarily ask:
Is it unavoidable, or may we right things by using our
wits?
The world to-day is in ferment. The war has set
people's teeth on edge, and the post-war effects are not
calculated to soothe their feelings on sundry matters.
The terrible, the unbelievable, the overwhelming fact re-
mains that many millions had to die innocently in a
stupendous struggle that the achievements of the nine-
teenth century should have made impossible. Whatever
we may think of the war just concluded, of its causes
and instigators, of its political consequences or costs in
material and men, the one great question is now before us.
We must know whether the social process logically in-
volves such disasters,, or whether the safety and welfare
of the masses may be procured by rational means at the
disposal of government, supposing social science continues
its labors.
Socialism has many times replied to our questions. It
has placed the blame on a certain form of economic or-
ganization and pledged itself to deliver us from all evil if
we please to listen to its sermon. Social scientists can do
no better than to think of socialists as students who de-
sire to substitute sense for sentiment in reforming man.
Whether they have struck the right path, whether social-
ism alone will do, whether science can espouse a collectiv-
istic program favoring some of the demands voiced by
socialists, these^are questions that at the present moment
confront us. ifljie ultimate place of science in social re-
form cannot be determined just now, hiTt_it.s )->pa.ringr on
socialism is self evident.
CHAPTER II
KARL MARX AND THE ECONOMISTS
i. Marx as an Eclectic Marx's Kapital is consid-
ered an offshoot of English classic economics, whose chief
exponents are Smith, Ricardo, Senior, and J. S. Mill.
The connection between especially Ricardo and Marx is
so obvious that it seems hardly necessary to trace out
other lines of descent. Yet it is by no means true that
the individualistic scheme of economics as it prevailed at
the beginning of the nineteenth century was logically es-
sential to Kapital. Rather, if one excepts the labor
doctrine of value, there is scarcely any point of prime
importance in Ricardo's Principles that reappears in
the German work. The Bible of socialism uses English
< economics mainly to refute or recast it, not to build with
it a theory tor lighting capitalism. That was surely
quite out of the question.
One may explain this difference in another way by
noting Marx's essentials of character, for plainly he was
an iconoclast by inborn temperament who saw everywhere
idols and images where others lingered reverently, and
whose one mission seemed to be to dethrone the false
gods. Marx seldom was satisfied with what he saw about
him. He was an idealist in spite of his crass materialistic
sv > stem of sociological thoughi. To him it was painful
to see people practice quite the opposite of what they
preached, to hear them expound theories that nowhere
squared with the facts, while attempting to hide their real
sentiments under a mask of scholarly impartiality. He
11
12 THE LIMITS OF SOCIALISM
sought to go beneath the surface of things and see what
was really at stake, but in so doing he usually encount-
ered truths that rankled because those most obligated to
honor them proved their worst enemies.
Marx was a man of great acumen and incredible capa-
city for work. He could read hundreds of books within
a short time and digest most of what was significant in
them. He would listen to many men but ultimately go
his own way. He borrowed without plagiarizing, and he
returned with interest the principal which he openly made
use of. Whatever passed through the alembic of his
mind came out as a product distinctly his own. He took
pieces here and there, but never all. Thus from Hegel
he took the dialectic, but inverted his order of syllogisms.
He rejoiced in Bentham's positivism, but scoffed at his
individualistic norm of utilitarianism. Of Proudhon he
had, with respect to some of his preachings, a high
opinion, but see how he ranted at What Is Property!
Feuerbach gave him inspiration and definite ideas as to
the meaning of the dialectic process, but for all that he
turned away from the Essence of Christianity. The
naturalistic philosophy excited his admiration in so far as
it combated transcendentalism, but beyond that he had
as little use for it as Hume or Blackstone. In all in-
stances he listened attentively at first, but before long
found flaws that invalidated most of what to others
seemed valuable.
Thus it was that in spite of the remarkable stage of
perfection which the economic science had reached in
Marx's days, little of it is constructively incorporated
in the Critique of 1859. The physiocrats had written
their ponderous tomes, Smith and Ricardo had estab-
lished firmly the principles of competitive economics, the
reaction against Manchestrianism had yielded some
KARL MARX AND THE ECONOMISTS 13
notable results both among the French and the English,
and in Germany the Historical School was beginning to
develop a philosophy of methods. Yet none of it furn-
ishes foundations for Karl Marx. Instead he takes a bit
here and a bit there. He nibbles and absorbs a detail,
or plows diligently over a vast field and then claims no
fruits whatsoever.
The naturalistic view he could not entertain seriously
because it meant statics, and he saw in the social process
everywhere motion and conflict. The utilitarian norms
were repugnant to him because they smacked of senti-
mentalism, or of professions of faith that had nothing
to do with stern reality. Hi one hobby was the majesty
of logic. The logic of events overawed him, if anything
ever did. He saw regularity and necessity where others
looked for willed plans subjectively valuated. He had no
patience with the slogan which would change the world
by giving it an emotional gruelling. People, he argued,
should not thus be fed and broken in.
As for the movement fostered by Hildebrandt and
Knies, he considered it a children's play because it worked
with nationalistic premises, its chief aim being the
economic development of Germany. Marx detested such
an outlook. The world to him seemed too large to be
bounded by race prejudices, and on the other hand he
could not approve of a school which catered more to
nationalism at any cost than to internationalism on behalf
of helpless masses. So, while taking some note of
Roscher and his colleagues, he bantered with them
lightly, content to pass their notions over with a sar-
castic remark at opportune moments, while immersing
himself deeply in the radical literature of Thompson,
Hodgskin, Bray, and Gray. What these men had penned
in their admiration for the French revolutionary spirit
14 THE LIMITS OF SOCIALISM
he thought over carefully, with consequences known to
students of socialism. But even their suggestions did
not enslave him. He was impressed, it appears, with
their collectivistic treatment of a problem which the dis-
ciples of Ricardo so despised, but he went decidedly
farther, besides bringing in thoughts no mere economist
would have tried to master.
And so, in a most serious sense, also with his use of
Ricardian tenets. He read and digested thoroughly what
this banker had said, but in the end he disagreed with him
on most important points. Much he openly rejected and
criticized as utter nonsense. The rest he put to such
novel uses that Ricardo would probably not have recog-
nized his contributions in " Das Kapital." Living amidst
substantially like environments their teachings yet go far
apart. What Marx saw in his long stay in London did
not give him the convictions voiced so modestly in
Ricardo's Principles. There were similarities between the
two that might have augured well for a correspondence
of views, but there existed differences, no less, that in the
end made them strangers. Their premises were not alto-
gether the same, and for this reason they emphasized dif-
ferent facts in the world about them.
To follow this thought of likeness and unlikeness a little
farther for it is rather interesting Ricardo might
very well be called an optimist, complacently active, who
thought the world the best possible, considering the laws
of nature, and looked after his business on Exchange.
Marx was a pessimist who could see nothing good in the
world that treated the laboring classes so shabbily. But
on the other hand he looked forward to a change brought
about by a law of evolution of universal validity, while
Ricardo for all his serene temperament was the stout de-
fender of a law of diminishing returns which condemned the
KARL MARX AND THE ECONOMISTS 15
masses forever to a hand-to-mouth living. This was cer-
tainly a gloomy outlook. No wonder men spoke of the
" dismal science " of economics.
Both Ricardo and Marx were Jews converted to
Christianity, but neither professed to have understood all
of the adopted creed. Both were men of outstanding
personality and mind, men who could think in abstract
terms and pack a wealth of heterogeneous facts into a few
concepts. Because they towered so far above the general
run of people they had little confidence in its rantings
and judgments. They did not think the average man
capable of sustained mental labors. They despised the
sentimentalities of the mob, however sympathetic they
were toward their hardships which they witnessed with
sorrow and tried sincerely to ease. Both were generous
and modest, unostentatious and averse to publicity.
Both disliked false show, and especially pseudo sentiments
which they sometimes detected where no one else could.
Marx derided the moralism of the Benthamites, but in his
own home he was the most exemplary of husbands and
fathers, punctilious to a fault, and as conventional in mat-
ters of morality as he was a free lance in theorizing.
Like Ricardo he was a formalist, a stickler for niceties in
reasoning, but the most convivial of friends. Like
Ricardo he was a leader among men, a leader in thought,
a prophet who foresaw the future. Like Ricardo he
worked indef atigably on behalf of truth ; only while
Ricardo supported the government Marx labored to sub-
vert it. Marx was only a few years old when Ricardo
died. Had they been contemporaries acquainted with each
other's work, it would seem that they should have gotten
along very well together, even if they parted company as
philosophers.
2. Ricardian Economics. Ricardo in his " Prin-
16 THE LIMITS OF SOCIALISM
ciples of Political Economy " modified at important points
the Smithian tradition. He called attention to many in-
consistencies in his predecessor's statement, but he agreed
with him in one all important respect, namely he accepted
the institution of private property as an indispensable
part of his economic environment. Adam Smith had not
questioned this either. He had thought it sufficiently
justified by the facts of human nature which he studied
at leisure long before he wrote his Inquiry. In stating
his Theory of the Moral Sentiments he had dwelt long on
the innate goodness of man. He was greatly impressed
with the reality of an altruistic instinct in men, which
prompted them to do right even if at times they fell
from grace. To Smith the selfish and the social senti-
ments were pretty well balanced. There was no fear that
society would go to ruin as long as each was left to his
own devices as producer and consumer. Discretion, he
thought, would win the day. But as against the slight
risks of self-assertion he placed the menace of tyrannical
government. Only if men are permitted to enjoy the
fruit of their labor will they strive to please others and to
progress. However unfortunate the disappearance of
communism and he hints now and then at the burdens
of entail and primogeniture private capitalism had its
virtues. It was folly to study wealth relations on any
other basis.
Ricardo was satisfied with this view, and so it was
natural that his definitions of value and capital should be
the competitive concepts which economists have learned to
respect. The determination of price is left to supply and
demand, but the value of a good in the long run is the
amount of labor involved in its production. Labor costs
measure exchange value. This is the rule. The excep-
tions are monopoly, as for instance in the ownership of
KARL MARX AND THE ECONOMISTS 17
non-reproducible articles artworks, old vintage, etc.
and the effect of durable machinery which would vary ac-
cording to its nature and use. Capital as well as land are
genuine producers. They are agents essential to the cre-
ation of values like labor itself. Consequently these fac-
tors are entitled to a share in the national output.
Whatever the income is, that must be divided among the
several agents so that production may continue. From
the competitive standpoint, furthermore, productivity is
a rate of production per unit of cost in labor and material
spent, though the materials embody past labor. It is
therefore with values that Ricardo deals mainly, and not
with concrete stuffs or with service as such. The aim of
the agents is maximum output of values, not of physical
things.
The physical aspect becomes important in only one re-
spect, namely when the ratio of food supply to the popu-
lation is considered ; but here its importance is so engross-
ing that virtually the whole distributive scheme is deter-
mined by it. For ever since the Malthusian doctrine
found acceptance among economists as a law explaining
wars and disease it also furnished the clue to the puzzles
of distribution. It was now perfectly evident that people
had little to eat chiefly because they would marry and rear
children. This alone kept them at starvation's door.
The sex impulses being so much more dominant than any
other appetite men must work harder each generation to
procure a minimum food supply, regardless of what bene-
fits might accrue to them from technical improvements in
another field. The law of diminishing returns in agricul-
ture, after a certain point of maximum yield relative to
the effort had been passed, punished the thoughtless
masses and proved a veritable goldmine to the proprietors
of the one indispensable means of production, to wit land.
18 THE LIMITS OF SOCIALISM
The landlord profited by the stinginess of nature. He
pocketed the difference between the return on the worst
land under cultivation and the yield of his own superior
land. Against the rapacious landlord, therefore, must
be pitted the enterpriser and the wage earner: the former
because competition tended to reduce his profits to a mini-
mum scarcely better than a decent livelihood, and the
latter because in spite of all inventions he could not im-
prove his daily board. He was bound to live frugally,
so the owner of the natural resources might live in splen-
dor. The outlook was a discouraging one, but what
could be done about it ? It seemed, nothing. Our only
hope could be a further diversification of products, and
perhaps in the very distant future a restraint of the sex-
passions, so that the masses might have somewhat more
meat and wheat to consume. But of general affluence
there could be no question.
Ricardo does not differentiate clearly between the shares
going to capital and those of enterprise, but he informs
us that both will gradually shrink, while labor, being al-
ready at its lowest, will hold its own. To try to improve
the wage earner's lot would be folly, for laws of nature
militate against such a plan. " Wages, like other con-
tracts, should be left to the fair and free competition of
the market, and should never be controlled by the inter-
ference of the legislature." l Such is the verdict handed
down from the court of classic economy.
3- Marxian Economist But to Marx all this was
cant, or else nothing but shameful ignorance. He retorts
in a manner the classic economists never approved of.
Namely he refuses to lay social evils at the door of the
individual laborer, and instead holds the capitalist to be
the malfeasant. He begins by denying what Ricardo
i Ricardo, D., " Principles of Political Economy," ch. 5.
KARL MARX AND THE ECONOMISTS 19
took for granted, and ends by asserting what to Ricardo
would have been incomprehensible. In other words, he
starts with the question: What does private capitalism
lead to that socialized capital would not permit? And he
suggests the answer by opening his monumental work with
a discussion of foe exchange process which makes prices
out of utility, and profit out of labor.^
There is some evidence to show that Marx was influ-
enced by the critics of the Ricardian system who wrote in
the first third of the nineteenth century. W. Thompson,
for instance, published his " Inquiry into the Principles of
the Distribution of Wealth " in 1824. Like others on the
continent he had learned from the French Revolution
and continued the work carried on by the naturalists who
harped on the rights of man. But in England liberalism
naturally took jm. ^cpnomic turn. Thompson" thus fol-
lowed the mechanistic concepts of the French encyclo-
pedists chiefly for the purpose of illustrating the nobility
of labor. A common element was to be found in all kinds
of occupation, no matter how intellectual it might be in
fact or in appearance. He writes : " What is thought
but motion produced and felt in the brain ? " 2 and
thereby challenges the opinion that different sorts of
work are incomparable. To Thompson and to Hodgskin,
his colleague, labor is at bottom only one thing. It is
expenditure of energy and therefore measurable for pur-
poses of distribution.
It is not unlikely that Marx obtained some of his ideas
from this group of writers. But, if so, it is certain that
2 Thompson, W., " Inquiry into the Principles of the Distribution
of Wealth, Preliminary Observations," 1824. See also Bray, J.,
" Labor's Wrongs and Labor's Remedies, 1839," from which Marx
quotes at length in his "Misery of Philosophy," written in 1846.
A large part of the Marxian viewpoint is also to be found in Gray,
J., " The Social System, 1831."
20 THE LIMITS OF SOCIALISM
he went much farther in his use of the physical notion of
labor, for he deliberately lumps all classes of labor and
arrives at a unit of " socially necessary labor " by sum-
mation and division. He tells us in the first pages of his
book that " skilled Jabor counts only as simple labor
intensified." 3 That is to say, instead of two measures of
a product the skilled laborer turns out three or four in
the same time ; but otherwise his contribution is on a par
with that of the jack-of -all-trades. He furthermore de-
fines for us the term " socially necessary " labor. He
urges that it comprises three elements always, viz., strictly
human effort, valuable effort, and outlay of energy. 4 All
labor, he insists, is of man. Labor is the source of all
wealth. Nothing is produced, but the hand or mind of
man has exerted energy which roughly is measurable and
may be imputed to joint producers. But he granted that
unless turned to productive uses an expenditure of phys-
ical force (Arbeitskraft) would not yield values.
Production being thus made possible by labor solely it
followed that machinery was not a productive agent, and
hence that capitalists had no just claim to the social divi-
dend. Capital, Marx argued, was but solidified labor.
It was labor in concrete form; labor that had crystal-
lized as salts might crystallize from a solution. Capital
was mere congealed labor, and hence the owner of capi-
tal had no right to its products.
Marx devoted endless pages to showing that capital
was but a by-product of competition and of the contract
system of production which the champions of Laissez Faire
had popularized by their ingenious treatises. To him
capital was nothing if not the fruit of laws whose very ex-
s Marx, K., " Capital," ,as published by Ch. Kerr & Co., vol. 1,
* Ibidem, 'en. T, plfesim.
KARL MARX AND THE ECONOMISTS 21
istence should be justified first, but which the facts of
production could not justify. " Capital," he exclaimed,
" is dead labor that vampire-like fattens on the blood of
living labor." Capital was no more than legalized rob-
bery. It was a wolf in sheepskin, a license .to steal, an
interloper in honest business, a letter patent for mulcting
the real producer of his wealth, and a system of pillage
whose ramifications threatened to undermine the social
order. What Ricar^o had attributed^tothe blind work-
ings of a n]^rjness laaL^of rmt^fpg/J^ffl.-rv inrmpffprl ex-
clusively with, a faulty economic regime,^ albeit one which
could be overthrownand replacecMSy a more logical one,
if the masses ~
In "^Capital" the anomalous position of private prop-
erty is pictured less forcefully than in earlier essays, but
it is still emphasized that private property was once in
its place, and has lost its rights only because the methods
and means of production were changed in principle during
the century immediately preceding the Marxian analysis.
Between 1750 and 1850, it is pointed out, the self-suffi-
ciency of the laborer has given way to a minute division
of labor, so that trade is everything and the handicraft of
the individual little or nothing. While one man could
turn out a finished article, or as long as the joint authors
of a product jointly owned the tools they worked with,
private ownership was natural and harmless. But it
ceased to be innocuous when mechanical power and intri-
cate machinery did away with the need of muscle and
simple tools. 5 To put the ownership of the means of pro-
duction now in the hands of a few men meant to
enslave the worker who had nothing to offer but labor-
power.
5 See, e. g., ibidem, vol. I, pp. 88-91, and wellknown passage in
"Holy Family."
22 THE LIMITS OF SOCIALISM
Henceforth exploitation began and enriched the non-
worker under the protection of contract and law.
Theoretically Marx had only contempt for the Mal-
thusian formula. He could not tolerate its implications
for fear of losing the main plank in his economic plat-
form. Yet it appears ever and anon that the subsistence
wage of the proletariat had no other solid foundation
than its preference for a large family, or at least for sex
indulgence, to a table freighted with good things to eat.
It should, then, be understood that Ricardo after all led
Marx into his central position, even though from a desire
for consistency this was loudly denied. Marx in fact
consents to write : " The wages are regulated on the one
hand by a natural law; their minimum is determined by
the physical minimum required by the laborer for the
conservation of his labor-power and for its reproduc-
tion ; " but " historically developed social needs " 6 help
to fix this minimum. So far the author of " Capital," to
which may be added Engels' stress of the opposite view-
point that " the underconsumption of the masses is a nec-
essary condition of all forms of society in which robbers
and robbed exist, and therefore of the capitalist system." 7
The difficulty of harmonizing these two contentions must
have been apparent to Marx, but it is never candidly
acknowledged.
But if labor is the sole fount of wealth land is not gen-
erically different from capital. This is the point brought
out by Marx, as a result of which he again takes issue with
Ricardo. For he now grants to land a share for the same
reason that he also favors the capitalist. Rent, too, is
part of the loot legalized by the private property regime.
Rent is plunder precisely in the same sense that profits
5 Marx, K., ibidem, vol. 3, p. 1000; or vol. 1, pp. 189-190.
7 Engels, F., Anti-Diihrmg."
KARL MARX AND THE ECONOMISTS 23
were. Capitalist and landlord were two of a kind.
Neither was acting honestly. However, unlike Ricardo
who pointed his accusing finger at the landlord, Marx was
chiefly intent upon exposing the trickery of the capitalist.
Industry had grown since Ricardian days. The city
worker was everywhere in evidence. It seemed natural to
bring the offending industrialist to justice first, and to
let the minor culprit go free for a while. In a sense, the
socialists had to admit, the landlord was the spoiled dar-
ling of mother nature, just as the classic economists had
themselves believed.
But what of the employment of capital and labor in its
effects upon profits, particularly upon the rate of profit?
Marx got into difficulties, as is well known, because his
labor theory of value left no room for the productiveness
of machinery. The employer raised his profits as he in-
creased the number of laborers engaged. This agreed
with Marxian theories and should have prevented the
movements of the dividend, that is of profits which the
market recorded. Some critics of Marx have maintained
that by this test alone the labor notion of price fell down
completely, since facts contradicted it constantly. Either
price and profits were not solely dependent on labor, or
the Marxian analysis failed to take care of one problem
in distribution. The harm, however, was not as great as
may appear. For if Marx had insisted that, while labor
was the sole source of value, it was only one factor com-
bining with capital goods for purposes of production, he
would have been safe. The varying ratios of capital and
labor in a productive act need then not have bothered him
so much. The decisive factor would still have been labor,
though its alliance with capital was a condition of pro-
ductiveness usually, if not always. But for that matter
the case was not nearly so much of a test for socialistic
24 THE LIMITS OF SOCIALISM
philosophy as has been affirmed by its most outspoken ene-
mies. The Marxian system is not shaken by confessions
of error in pricing schemes. Nothing great was at stake.
Marx knew that the rate of profits varied with the volume
of capital used, 8 and remembering it he could admit it
without renouncing his labor theory of value.
The Marxian viewpoint is in other respects self-con-
sistent like the Ricardian which he combats. He believed
that a rising share of the national income had to go to
land and capital. This followed naturally from the sur-
plus notion which pictured the laborer as receiving only
what was necessary to reproduce his labor power, while
the excess of time he worked yielded products stolen by the
owner of capital who thus accumulated huge sums, until
finally a catastrophe would overtake him. But of this
more in a later chapter.
It is worth while to point to the distinction between the
percentage of the aggregate social income accruing to
labor or capital, and the rate of profits or wages. The
latter refers to what the average capitalist or wage
earner gets, the former would mean the share known as
profits or wages distributed among all the capitalists or
workers respectively. As others had long pointed out:
According to the Malthusian principle the labor con-
tingent increases and their total food wages may rise, but
the income of each laborer in foodstuffs cannot rise, and
may shrink. Similarly in the Marxian position. The
average laborer has no prospect of improving his lot,
though there will be a growing number of laborers claim-
ing an absolutely larger amount in wages. Only, Ricardo
s " Die Profitrate nimmt ab im Verhaltnis zur steigenden Akkumu-
lation des Kapitals, und der ihr entsprechenden steigenden Produk-
tivkraft der gesellschaftlichen Arbeit"; in "Capital," vol. 3, p. 384.
But see also pp. 193 & 199.
KARL MARX AND THE ECONOMISTS 25
thought that owing to technical improvements the laborer
would benefit somewhat in the end by gaining on enter-
prise, even if he paid tribute to the landlord. Marx could
not agree to this concession, and drove his premises to
their ultimate conclusion. Marx consequently had to
cast about for other means to save the masses.
That under such circumstances he could not love the
competitive spirit goes without saying; however, he pro-
fessed to like it because its continuance and unhampered
sway would precipitate the proletarian revolt. This was
the nature of his tolerance toward Laissez Faire. He
would vote for it and for free trade since it tended natur-
ally to destroy individualism. It was, therefore, a good
thing to espouse. 9 But Ricardo preached Laissez Faire
because he argued from promises first laid down by Adam
Smith, the acceptance of which inevitably led to con-
clusions out of accord with state interference.
As will be seen from Table One the two philosophies
agree in only eight out of the eighteen points specified.
The departures on the part of Marx from the classic sys-
tem are more marked than his agreements with it, and
the practical consequences are poles asunder.
| 4. Criticism of Marxian Economics. What is to
be said in regard to the position which Marx defended so
strenuously during his lifetime and which since then has
often been restated by his followers?
In the first place, evidently, the Marxian analysis can
no longer satisfy us because the facts go against it. The
lot of the average man has been improved instead of going
from bad to worse as Marx predicted. He has more to
spend and has a greater variety of goods to consume than
a few generations ago. The level of living has risen per-
In a speech delivered on Jan. 1 1849, in Brussels on " Die Lage
des Freihandels."
|3^ 8
sTll-l
*%&**
^Illbl
* 8 f*l|8
" * Z| .2 S j?
fcC
ll
^ S >^^ s s ^
i!
& ^ S 3 Is
1 1
1 *(,*
Mi .
tji|i"
^ O J^ O *S
|| 3 gs
If * |5
~r ll-si
Ilin^
O
c 3
1 1 4S 5 &
^saj.
<- s^^
o * ~ *
H ^ .s a
- g tf aj .s
8 1* us
bC 03 fac
-.S" S'S
'cS S
= 3
S
:i
G PH
^ -ij M O ^_l
>>r-i n3 n ,-1
-a-a -sa
.2
|
9
cu
PH
I
4J t- CU CD
28 THE LIMITS OF SOCIALISM
ceptibly, and the middle class, so far from dying out, has
increased numerically. True, the bulk of the popula-
tion even in the most progressive countries is still work-
ing under contract, the capitalist having usually the upper
hand in the bargaining, but this has not prevented labor
from obtaining a goodly part of the improvements en-
joyed by the wealthy. Cycles of booms and depressions
have recurred as before, but exploitation has not grown in
proportion, as Marxian economics taught. If all, or
even the major portion, of what labor produces above a
bare subsistence fund, had gone to capital the misery of
the multitude would be infinitely greater than it is.
In the second place, the theory of surplus value becomes
logically untenable when competition between laborers,
due to the complete mobility of labor which it assumes,
ends. One cannot accept this thesis of ruthless exploita-
tion without imagining the individual worker left entirely
to his own resources, deserted by his mates and betrayed
by a plutocratic government. But this sort of mobility
never existed, as even Adam Smith was anxious to admit
for all his belief in individualism. Human nature is often
stronger than legal provisions for freedom of contract
and of residence. People become addicted to habits.
They develop a fondness for places and memories. They
will not move, though offered a higher wage. Also, they
have since the rise of socialism learned to combine. The
right of association has not been denied them. The union
has done away with the advantage that men of means, and
particularly of the means of production, used to have, or
reputedly had, in bargaining with labor. A new method
of pricing has arisen that is a long way removed from
the facts of competition and mobility which the classics
pictured.
In the third place capital is not solidified labor, be-
KARL MARX AND THE ECONOMISTS 29
cause matter is not altogether the same as mind. Motion
is not notion. True, we do well in tracing mental phe-
nomena by their physiological equivalents. The plan of
the scientist to ascertain the nature of mental states by
forms of behavior objectively measurable is not a con-
temptible one. The physical correlatives are ordinarily
there to be studied. They enable us to determine the
routine of reactions in man, which otherwise might re-
main undecipherable. But this does not mean the identi-
fication of quantity and quality. Generic differences be-
tween mind and matter should be granted to exist unless
special purposes forbid.
So, by the same token, it is an error to call machines
mere material put together by a working hand. Work for
the economist is not what it is to the physicist. The
physicist defines work as the overcoming of resistance
through space. He is interested in actions and reactions.
He deals with quantities only. The social student, on the
contrary, is primarily engrossed in questions of value.
Values are the subject matter particularly of economics.
And values originate in scarcity, whatever amount of en-
ergy is needed to change the forms of matter.
Goods represent ideas. They are the embodiment of
thoughts infinitely rare at one time, and made cheap only
in the course of social evolution. All labor, to illustrate
our point, may be divided into the repetitive and the in-
novating kind. The former may be quantitatively meas-
ured. It suggests comparisons. If, for instance, I
plow now one acre, and the next time two acres, using
the same tools and methods, I have added' to value and
may anticipate an increased return. But I have created
nothing new. I get more wheat, but it is of the same sort.
I used more implements, but of the same sort. Everything
was repetition or multiplication. But suppose I breed a
30 THE LIMITS OF SOCIALISM
new variety of wheat, suppose I make certain alterations
in the plow-share, suppose I change my principle of fer-
tilizing the soil. Here we have an innovation that leads
to distinct products: Perhaps it is a new sort of wheat,
or wheat in larger amounts for constant effort.
There is a reliable test for invention or innovation.
Namely, if with constant effort, thanks to changes in capi-
tal or in the use of it, I procure a bigger return, then I
have been an inventor. Or, if I create a new article,
something not heretofore on the market, then again I
have shown inventiveness. All things now familiar were
new once upon a time. There is hardly anything on the
market but it was invented once. If an article becomes
cheaper or is improved, that change means an innovation
in the economic sense.
Considering these objective tests for an innovation we
have an excellent way for distinguishing between things
and thoughts. In a printing press we have a combination
of thoughts that may or may not have cost effort-in-time.
It is not always easy to say when or how an idea origi-
nated. In general, to be sure, ideas are the fruit of
much intellectual toil. We must have so much school-
ing and technical training, whether it's as novelists or as
chemists or as mechanics. There is work back of inven-
tion. But at the moment a thought comes it may not
involve a time-element of labor. Effort-in-time is the
sort of effort spent in digging a ditch. We see the mo-
tions and may measure them by the hands on the dial of
a watch. So with most repetitive acts producing wealth.
Yet this is not so applicable to inspirations resulting in
new products or in cheapening methods. What shall we
say of the inventor of rod and reel, of Arabic numbers,
of the alphabet, of the steam engine, or of whatever
KARL MARX AND THE ECONOMISTS 31
innovation in science or economics we may have in mind?
These are the result of immeasurable labors.
Ideas are rare, and therefore fetch a high price. It
was a good principle for Marx to demand the socializa-
tion of ideas, but a bad one to put all sorts of labor into
a single class. " Socially necessary labor " is a concept
as inadequate as we know the concept of averages to be.
Innovations and repetitions should not be put on a level.
They are incomparable. Capital goods are not labors
piled up in a heap, to be assembled and taken apart at
command. The funding of all labor varieties was an
awkward scheme for determining price, which after all was
not Marx's main task.
Let us put the matter in another way by asking what
would become of the surplus if innovation ever ceased.
Marx declares that by making the laborer work for longer
hours than are needed to supply him with the essentials
of life the capitalist reaps a rich harvest. It is said he
takes the extra hours' product and uses it to employ more
labor to continue his unfair practices. Thus he waxes
rich, and labor is cheated of its belongings. One is
tempted to give ear to the argument, were it not for the
accumulation of the surplus. If at the beginning this sur-
plus is wheat, what do we use it for? The answer can
not be that it is to employ more labor to cultivate more
land so as to produce more wheat. For, in the first
place, this is not the record of economic achievements, and
in the second place it does not appeal to our sense of pro-
portions. Ere long we should have enormous stocks of
wheat; but what for? It is easy to provide for a rainy
day, and it is natural to hoard some things. But an
endless accumulation of one commodity does not help
much. The end of life is variation. The spice of life is
32 THE LIMITS OF SOCIALISM
variety. The march of progress is toward diversification.
Ever new things, this is the motto : not an excess of some
one staple like wheat. A surplus, originally of foods
perhaps, could be valuable only if part of it were used to
feed men, not to till the fields to produce wheat, but to
produce another kind of food product, or more likely
something not to eat, but to wear. And later on each
year's surplus of a given class of goods should serve only
to dedicate energy to new endeavors. An increase of
labor is necessary for the diversification of products.
Growth of population is neither an end, nor always an
incident, in economic progress. Not multiplication of
men and materials, not this primarily, but diversification
of products is the chief aim. A larger number of goods
produced at less cost !
What is the moral? This, that exploitation in itself
could not help the captialists if they were not assured of
new methods and new products, that is of ideas, of inven-
tions which might have been their own, or the laborer's.
The surplus view of Marx must either recognize classes of
work distinct in a value analysis, or it preaches a silly
accumulation of goods that nobody wants because they
would soon exceed all possible needs.
But, in the fourth place, value itself is not measurable
by the amount of labor spent in its creation. That fol-
lows from what has just been said. But it also is shown
by everyday experience, and besides, it was admitted by
Marx. Marx indeed had two ways of stating his atti-
tude. He could say: Under competitive individualism
value is determined by something else than labor cost.
True, but I disapprove it. And he could argue: Under
socialism prices will vary with costs as defined, that is
with socially necessary labor. The latter is the only cor-
rect pricing principle. But as we know, Marx did not
KARL MARX AND THE ECONOMISTS 33
commit himself in that manner. Instead he pictured
prices as labor results quantitatively measurable and com-
parable, while insisting also upon a standard of living
which according to his surplus theory of value did not
exist under capitalism. That under socialism as well as
on present terms costs of labor cannot always fix values
appears at first moment, but Marx thought the excep-
tion to his rule inconsequential.
5. Marginal Economics. The Marxian economics
should be taken seriously and hence criticized where mod-
ern science urges it. But it is easy to belittle the Marx-
ian concept without remembering its great merits and the
influence it has wielded over later minds. More particu-
larly one may make sport of some Marxian notions, for-
getting that our current economic viewpoint does not
rise much above them. The group of economists who
stood out in arms against the socialists also attacked the
historical movement in general, and of course they had in-
creasingly occasion to revise the classic version to Smith,
Senior, Ricardo, and of the two Mills. The prevailing
economics, though no longer as homogeneous as at the
opening of this century, is therefore a reaction against
both Ricardianism and against historism. The hope of
deducting permanent principles from an exhaustive
searching into economic history has been pretty well
abandoned. A number of factors contributed to the de-
cline of the historical methods, though we may regard
J. S. Mill's Logis, which appeared in 1842, as a turning
point for economic method; for Mill's own Principles of
Economics show no trace of a method distinctive of social
science, as presaged in the Logic. If the acute J. S. Mill
returned to deduction, what could others expect from his-
torism? The Austrian economists combated historism
because of their training under philosophers who sep-
34, THE LIMITS OF SOCIALISM
arated rigidly deduction from induction, and had no con-
fidence in Hegelian prophecies. Hence men like Menger
and Wieser, Boehm-Bawerk and Sax were ready to re-
claim the field of investigation, which the Historical
School, like scientific socialism, had declared barren and
unfit for use.
But in fact, the marginal approach was in thorough
agreement with the psychological movement of the second
and third quarters of the nineteenth century. The trend
was distinctly toward introspective analysis supplemented
and corrected by exact measurement of reactions to ex-
ternally applied stimuli. Psychology rapidly established
itself as an objective science, with the result that the
facts of human nature were definitely classified and char-
acterized.
This way of redefining values marks also the marginal
school of economists who, beginning with Gossen, Walras,
and Jevons, revamped the Ricardian notions by shifting
the emphasis from work to wants, and from materials to
margins of response. Much of the classic structure was
left untouched, but the nomenclature changed greatly.
The marginal viewpoint abandoned the attempt of ex-
plaining prices through expenses in time and effort. It
went directly to the question of wants, and by compar-
ing their different intensities tried to explain prices. It
showed that we care relatively the less for a stock of
goods the larger it is, and that we constantly seek to
equalize our supplies of different kinds of commodities.
Hence the marginal procedure led away from costs to
sacrifice, and from production of stuffs to creation of
values, no matter whether they took palpable form or not.
Like the Ricardian the marginal view is static. It pic-
tures a process at rest in a given moment, much as a pho-
tograph reveals certain facial expressions. The advan-
KARL MARX AND THE ECONOMISTS 35
tages of a moving picture over a snapshot compare ap-
proximately with the superiorities of a dynamic over a
static method of dissection.
Like Ricardo, the Marginists, too, assume competition,
private property, and freedom of contract. It is not for
them to question the worth of our social order. They
take it as it is and proceed to define their terms accord-
ingly. Everything hinges on competition and on the mo-
bility of labor and capital. Since, furthermore, capital is
a right under the law it is entitled to a share of the na-
tional product. But here the Marginists became bold in
making out of capital goods a bundle of property rights
rather than a work of ideas. Rights were continually
stressed, and social aspects subordinated to them. Capi-
tal, even if not taking concrete shape, they called a
factor of production just as truly as manual labor or soil
fertility. There existed consequently at least three " fac-
tors " of production, though toward the end of the century
enterprise was segregated from labor upon due recog-
nition of its unique functions under individualism. Thus
we get really four agents in production, all of which had a
share in the social dividend according to some principle of
distribution.
The notion of cost was materially modified, for as
against the classics the Marginists did not begin with
labor. They started with desires. They asked: Why is
so much labor spent in producing an article, and instead
of answering as the older men would have, that the tech-
nique of production could not do it in less time, they
pointed to the intensity of our want. Man, it now ap-
peared, was willing to give so much labor to the creation
of a certain commodity because compared with others he
wanted it so much that the labor did not seem excessive.
The need of food, shelter, and clothing comes first. Noth-
36 THE LIMITS OF SOCIALISM
ing can take precedence over it, and hence any amount of
toil necessary to produce them will be expended. But for
the remainder of our level of living we are governed by
different rates of wants, some being intense enough to fol-
low immediately after the essentials, and others being
classed as luxuries. The march of progress is the exten-
sion of wants and the thinning of the margins at which we
choose to buy one article instead of another. When we
have decided on this matter, then the amount of effort de-
voted to the production of an article will be revealed.
Costs are the proof of valuation measured by our willing-
ness to sacrifice one good for another. Time and energy,
materials and thought, are secondary facts in the explana-
tion of price.
The whole subject of cost versus want was finally
worked over and the true relation between the two dis-
closed. It could hardly escape the notice of observant
students that expenses as treated by the marginal view
were valuations of the past, and that therefore in a sense
all costs were values. But by the same ruling expenses
could be admitted as a certain objective way of measur-
ing subjective aspects, and so, in stretching the static
outlook to cover decades at a time, costs and wants be-
came complementary. " In the long run " they could be
pictured as two sides of one and the same thing. The
reconciliation seemed opportune, and served to give a new
lease of life to the individualistic conception of product
and price.
As shown in our Table, productivity according to the
Marginists is a rate of return in goods per outgo of other
goods, each good being defined as a scarce transferable
utility, and a utility as anything satisfying any want.
From this followed the interesting development of the con-
cept of diminishing returns which no Ricardian would
KARL MARX AND THE ECONOMISTS 37
have understood. It was shown that since production is
a competitive concept referring to values, the costs of
production could not fall merely in agriculture. For one
thing, the yield in concrete things did not mean every-
thing because economics reckons in values, in dollars and
cents. If the farmer, for instance, sold a smaller crop
at a larger aggregate gain than a larger crop in the
previous year, then his rate of return had risen. And in
the next place it became more and more apparent that in
all fields of endeavor there is a right and a wrong way
of doing things. The terrifying law of diminishing re-
turns thus was converted into the perfectly harmless prin-
ciple of a proportionality of factors. It was shown, as
everybody indeed knew, that temperance is a virtue, that
a sense of proportions will do wonders, that too much
of one element in a compound will spoil it. The marginal
view made land, labor, capital and enterprise the four
factors of production. Let them be mixed in one way,
and maximum return results for the business manager ; let
him violate the law of proportions and he will obtain less
than the maximum. Space and time also entered into the
situation, and all in all the purification of Ricardian no-
tions left the economist little better off than he had been
before.
But the marginal definition of productivity helped in
one respect. Namely the rule of margins in valuation
was applied to the services of the agents in production,
the rate of pay depending on the marginal product of
each agent. On a short-time view the least effectively
employed unit of labor or capital set the pace for the
remaining units. None could get more than the marginal
one, for the same reason that the least valued dose in a
stock of homogeneous goods fixed the value of the whole
stock. One had only to multiply the number of units
38 THE LIMITS OF SOCIALISM
in a stock by the utility or value of the marginal
item to compute the value of the whole stock. Incomes
varied on the same principle. On a long-time view how-
ever the better worker was a blessing to the inferior,
for competition would sooner or later force a distribution
of the additional product, the marginal man benefiting
with the rest. Each factor received his " product " as
per definition. Profits were the only exception, because
they tended toward a minimum. Or rather, as some an-
nounced, there were no profits under perfect competition,
only a wage of management.
Consequently land and labor benefited most by technical
improvements. Interest rates were also subject to the
general law, but meant less to the practical-minded
student of distribution. Laborers would obtain a grow-
ing share of the national dividend because of the effect of
invention on productivity. The landlord could not claim
it all, as Ricardo had apprehended. The economic process
was less cruel than the classics had made it out to be.
Hence the Marginists favored frankly the competitive
principle and tolerated interference only where it was
proven absolutely indispensable. They had shown that
each gets what he deserves according to definitions of
utility, value, and capital, so no occasion arose for com-
plaint.
A glance at Table One informs us that the marginal
and the Ricardian viewpoints are not as far apart as
either compared with the socialistic. In spite of im-
portant revisions the Ricardian doctrine survived the ad-
vent of Marginism. The modern orthodox economic
standpoint marks a step in advance, but its logic is the
old. The competitive principle colors everything. Ab-
stractions rule as before. Ricardo like the Marginists
approved of the world as he found it. As the Table
KARL MARX AND THE ECONOMISTS 39
shows they agreed in nine out of the eighteen points, while
Marx and the Marginists had only five in common. Four
of the eighteen points were held in common by Ricardians,
Marxians, and Marginists, but of course Marx's defini-
tions of value are only provisional. He is opposed to the
individualistic norms. He uses them solely to arraign the
capitalist. His chief aim is the annihilation of what the
other two groups wished to leave undisturbed.
The question then is not merely one of logic. One will
ask : How much more satisfactory was the marginal view
than the heresies of socialism? Or, more to the point,
what oddities of reasoning appear in it that orthodox
economics is not guilty of, too?
| 6. Criticism of Marginal Economics. The Marxian
like the Ricardian view emphasizes labor as the source of
values, and it measures them by the amounts of labor
spent in the creation of a value. This is one way of mak-
ing values objective and is naturally thought of first be-
cause time and effort are facts every one is acquainted
with. Marx saw no reason for rejecting the labor
standard, though he enlarged upon the concept by social-
izing labor. He not only proposed to attribute all values
in exchang^ to the labor needed for the production of
scarce utilities, but he furthermore averaged different
rates of production. He made three points : He de-
clared labor to be the sole fount of all values ; he reduced
all kinds of effort, manual and mental, to a homogeneous
stock (what he called labor power) and he standardized
costs in labor by establishing an arithmetical average of
different amounts of labor applied, in terms of hours of
work, by different individuals or groups to the produc-
tion of equal values. This latter procedure was
peculiarly Marxian.
Now, the marginal procedure is different in one sense,
40 THE LIMITS OF SOCIALISM
but much like it in another, for while it displaces labor
by valuations, it none the less averages different valua-
tions just as Marx averaged different productivities
measured by effort-in-time. According to the marginal
view different want intensities of different individuals with
different tastes and different incomes, that is purchasing
powers, may be reduced to an average which expresses
itself in the bidding of buyers and sellers in a competitive
market. It has been pointed out by critics that such is
not an admissible device, because logically no such average
can be proven to exist. Individuals as averages are a
piece of fiction anyway. But it deserves mention here
that the marginal economists made this average a central
feature in their price determination.
What is more, the Marxian assumption of a fairly con-
stant labor-power per average individual has the ad-
vantage of making one cost do for several sales at differ-
ent times. But if the Marginists are right, valuations
fluctuate constantly so that really an article is sold at a
valuation of the present moment which in all probability
differs from the valuations embodied in the article at the
time it was produced. That is, we must resort to another
averaging of variations of want in order to establish
some fixed relation between the price of a finished com-
modity, which by the way represents as many prices as
it has constituent costs, and the productivity-rate of re-
turn. To the Marginists this relation is a very definite
one. It is one of identity. Prices measure factorial
shares. But the averaging is as risky for the pro-
ductivity-theory of incomes as it is inadequate for the
explanation of commodity prices.
Marx was not so embarrassed, for in adopting im-
plicitly, though not expressedly, the Malthusian formula
he simplified distribution as Ricardo had done. There
KARJL MARX AND THE ECONOMISTS 41
were only three factors. One was paid a subsistence
wage, the other received a supra-marginal product from
the soil, and the third took the leavings. Very simple !
The marginal standpoint, however, led to other predic-
aments, some of them not more amusing than impressive.
For instance, according to the concept of consumer's sur-
plus a man saved the more the less he saved. In the
great majority of cases a purchase was a saving because
the article was worth more to the buyer than he was
forced under competition to pay for it. He had all kinds
of units of utility left after he got his money's worth.
Let him, therefore, spend more and enjoy more consumer's
surplus.
On the other hand there was the bugbear of alternative
costs which no entrepreneur could escape. He was rarely
sure of having invested his funds the best possible way.
Every advantage in employment of capital was offset, by
the sacrifice of investment elsewhere. The option was a
nagging thought that should figure in the ledger when
investment was not the most lucrative possible. A farmer
too should reckon as costs for fodder the price at which
he would have had to buy it hadn't he produced it himself
at a lower cost. And the interest charge grew every
minute, for everything reconvertible into pure capital, or
what once was in the shape of liquid capital, ate up in-
terest. All consumption goods, indeed, might have been
used as capital. Since they were not, a loss could be
claimed. The individualistic outlook permitted such cost
accounting.
It also gave birth to the famous paradox of value which
the Austrian economists first expounded, and which has
often since served to illustrate the principle of marginal
utilities. But note what one might flippantly infer from
it : It apparently makes it possible to destroy and create
4 THE LIMITS OF SOCIALISM
capital in the same act. If the spice-importers, for in-
stance, feared the effect of large supplies on price they
could save themselves by sinking a portion of the cargo
of spices. They would sink the ships and raise the prices
and probably aggregate profits. Such is the test of
monopoly. They used the cargo as part of their working
capital, say of their " circulating " capital. They de-
stroyed part of this capital by casting spices overboard.
But the same act also increased the value of the residual
of spices. Capital was therefore created while it was
destroyed.
Or notice the curiosity of the marginal capital defini-
tion, by which one and the same article became alternately
capital and non-capital, that is a consumption good.
The piano in the baker's shop was capital while used to
attract customers. It was part of his earning assets
then. But if used to entertain the same people after
closing hours it became a mere utility. The baker's fam-
ily listened to an instrument forming part of his wages of
management ; the customers were regaled by the employ-
ment of capital. Likewise cocaine sold illicitly at a drug-
store was capital, while mother's care of her children was
non-productive labor, since it was not offered for sale in
the open market.
Finally, it deserves mention that Marx was at least con-
sistent in his position as ethicist. He did better than the
marginal group for two reasons. Namely, in the first
place he did not incorporate moral topics in his Capital.
True, like his followers, he hinted plainly at a moral
issue. Nobody could condemn private capital and not
plead guilty to a charge of moralism. But Marx kept
reform programs out of his text. He did not profess
to purge economics of all ethical background and then
proceed to discuss at great length many questions of re-
KARL MARX AND THE ECONOMISTS 43
form and legislation such as frequently characterize
modern texts for school use.
In the second place he grounded his ethics more se-
curely than the Marginists who were drilled in the meta-
physical style of moralizing. If economics declines to
deal with moral matters, pretending that somebody else
has preempted that field, it is guilty of a contradiction
of terms. It was socialism which first drove home this
point, and familiarized the man of the street with the
social aspects of religion and ethics. The Marxian
economics excels in that it makes ethics part of social
science. It reduces all knowledge to experience, that of
"the moralist included. Largely to demonstrate this
unity of thought and to give reform movements a solid
basis the founders of socialism elaborated their concept
of history, thus preparing the way for a view of life
which must unify all sciences, however distinct their sub-
jects.
CHAPTER III
THE ECONOMIC INTERPRETATION OF
HISTORY
i. Main Roots of the Economic Interpretation of
History Back of Marx's " Kapital " is his economic in-
terpretation of history. It is hardly possible to under-
stand fully what he meant to say in his ponderous econo-
mic treatise without looking into his other views of a some-
what philosophic nature. In regard to Marx we have
here a situation that not infrequently is true of other
great minds. We read one of their works and judge them
by it, or at least consider it something complete in itself,
forgetting that, if more was written, it probably bears
on the very book we are studying. For mind is a unit,
and eminent thinkers have given perspective to their
thought so that what appears at one place is more or
less closely connected with everything else. As we grow
we frequently change our interests and write on subjects
originally not at all in our mind. We are driven from
one problem to another, and so ultimately arrive at ideas
that will influence us the rest of our life in treating of
anything, no matter how far apart the topics. Thus it
is difficult to appreciate Aristotle's " Politics " unless one
is familiar with his Metaphysics and Ethics. Thus
we may read Adam Smith on the " Wealth of Nations,"
but fail to get its total range without some knowledge
of his " Theory of the Moral Sentiments." Thus again
one is entitled to judge John Stuart Mill by his " Prin-
ciples of Political Economy." That work should stand
44
INTEPRETATION OF HISTORY 45
or fall by its contents. But how much may easily be
missed if his " Logic " has not been given a thorough in-
spection beforehand!
And so with Marx and Engels as founders of social-
ism. Their criticism of the individualistic economics of
their day is one thing. We may understand it and draw
our conclusions. But what Marx said in his " Kapital,"
and how he said it, that is a point to be inquired into by
an independent study of his earlier expositions on history
and Hegelianism. Huge growths have remote beginnings.
Giant trees send out their main roots deep into the soil,
and far from the trunk feeders are still to be found
whose function is to give life to the very trunk that seems
so majestically self-sufficient. Great rivers similarly
have their headwaters in perhaps far off, inaccessible
regions. In lofty heights the stream is born that later
on we find so useful and overpowering in its grandeur.
We do not possibly care to explore the upper reaches,
but in this distant ancestry that gives rise to so many
tributaries we have the explanation of the end result it-
self.
The founders of socialism were no mean men. They
were extraordinary men who worked like titans and
pierced the surface of things. They went far for their
raw material out of which the socialistic creed was slowly
built. They consulted many sources and drew inspiration
from thinkers that in their time had no interest in matters
economic. Thus the intellectual labors of preceding cen-
turies bore fruit in the controversial writings of Marx
and Engels, and in their propaganda which since has
given so much food for thought to an inquiring age. One
must read Marx's articles in the Rheinische Zeitung, or
his books against Proudhon and the Feuerbach group, to
divine some of the thoughts basic to socialism. In his
46 THE LIMITS OF SOCIALISM
" Misery of Philosophy " and " Holy Family " are ele-
ments reconstructed later in the " Critique of Political
Economy," but utilized also in the " Communist Mani-
festo," as well as in the " Kapital." Of Engels the out-
put is in a sense not so important because it was for the
most part written after the economic interpretation of
history had been formulated. Yet there is much of value
in the " Anti-Diihring " and in the " Essay on Feuerbach,"
both of which represent answers to critics of scientific
socialism as it flourished in the last quarter of the nine-
teenth century. Engels was the philosopher, if Marx was
the economist. However, on the one hand, Marx could
think philosophically himself, though he had done with it
comparatively early in life, and on the other hand Engels
never forgot the economic background whose disagreeable
features had prompted him to describe the condition of
the working classes in England, as they existed in the
second quarter of his century. Strictly speaking both
were incapable of the sort of thinking which character-
izes professional philosophers. We do not find any evi-
dence that they could follow Hegel, e. g., through the
maze of his reasoning which led from " Logic " to the
" Philosophy of History." In perusing the youthful
works of Marx one is struck with what he didn't notice
in Hegel rather than with what he selected for criticism.
However, while he made no pretense of fathoming the full
depth of metaphysical problems, he took care to seize
upon salient points that could prove useful to his sociolo-
gical outlook. Hence the transcendental thought of
Hegel's time is part of scientific socialism. Hence the
" Critique of Political Economy " really begins with
searchings into matters not now recognized as scientific.
Whether the economic interpretation of history is
peculiarly the product of Marx and Engels is perhaps
INTEPRETATION OF HISTORY 47
not an important question. Those who have delved some-
what into the genesis of that mighty concept will prob-
ably concede to the founders of socialism a large measure
of originality in this respect. One may make many ex-
cursions into the relevant literature of those days with-
out meeting any such formula as Marx and Engels made
famous in their " Manifesto of 1848." On the whole it
seems fair to grant these two men the lion share of the
glory, and to distinguish generously between the in-
gredients they found at hand and the product they turned
out with them. There had been materialism before, as
everybody knows, but it had not been given a historical
application. There had been economic interpretations of
life from the early eighteenth century on, but they had
not been cloaked in a metaphysical form. Historio-
graphy is of ancient origin, and the notion of change
dates from early Greek speculation, but none of it yielded
a Marxian recipe.
Again, the genetic standpoint which socialism has al-
ways so ardently defended predominated when Marx
was born. The Romantic movement was essentially
genetic. One looked back to forget the present, or to
understand it. The great names of that age are known
as. well for their views on the social process as for their
literary creations. But, once more, this does not rob
Marx and Engels of their supreme merit as first expound-
ers of a materialistic view of history.
We might say : England is the cradle of materialism
as the metaphysician understands the term. From there
it went to France and gave rise to a school of thought
whose culminating achievement is, in a way, the Mecha-
nique Celeste of La Place. The writings of Cabanis and
Diderot and Helvetius familiarized people with a ma-
terialistic valuation of life. The Baron d'Holbach also
48 THE LIMITS OF SOCIALISM
contributed his mite. But this type of materialism was
too mechanical to suit Marx. Like Engels he relied more
upon Hobbes and Locke than upon the French. On the
other hand, the historical viewpoint had gained ground
notably in France. Lamarck and Condorcet were great
figures. And again, if from England came Spencer,
Darwin, and Wallace, Germany furnished a Herder,
Humboldt and Goethe. Thus three countries provided the
streams of thought that finally converged in the socialistic
movement. The biological aspect is English, the his-
torical aspect first gained repute in France, and the so-
ciological or economic aspect was most cultivated in Ger-
many. Together these nations developed the evolution-
ary standpoint. Thanks to such beginnings the social-
ists could go ahead. Hegel completed for Marx what
Hobbes and Montesquieu had begun.
The German materialistic view of Biichner and his
ilk was of no great moment for Marx. It came some-
what too late. Furthermore, Marx wanted concepts of
motion, not pronouncements on matter or space. The
achievements of chemistry therefore did not greatly im-
press him aa, a student in quest of a masterkey which
should open the doors to social progress The inclination
for a matter of fact view of life existed early in him
no less than in Engels, but the impetus that moved him
onward till death came from the last of the philosophic
critics ! Hegel " made " Marx !
2. Influence of Hegel It is of no import here
what Hegel preached and how he reacted upon the
" Critique of Pure Reason." But we must keep in mind
some of the main tenets on which he erected his phe-
nomenal reputation as a metaphysician. Hegel was a
Platonian absolutist, for one thing. In the second place
his analysis of mind and knowledge led him to the evolv-
INTEPRETATION OF HISTORY 49
ing of a concept of progress and reality which is unique
in philosophic history. Hegel not only believed in a
reality transcending our sense experience, but he pictured
the processes of cognition as focussed upon a single point
which marked the terminal of social evolution. To
Hegel there was a design in history. The teleological
assumption pervades all his reasoning. And with this he
coupled a theory of State that has astonished those who
dwell fondly on his Logic. Hegel, then, was a theist
with monarchical leanings, an exponent of idealistic
values, and a firm believer in the scientific character of
introspection, of what he called the science of all sciences,
to wit Logic.
Marx was not enamored with this side of the great
teacher at Berlin. But he, like Engels, took readily to
the other side in Hegelian teachings which later on gave
rise to diverse empirical movements in philosophy.
Hegel namely sought to establish the identity of nature
and mind in a manner not attempted by Kant. He bore
in mind more consistently than his illustrious predeces-
sors the maxim that whatever we know is limited by a
knoweiv Intelligibility rests on the intelligence, and to
look beyond this is a task distinct from the first prin-
ciples in logic. The first principles must seek to explain
how we know anything and how our experiences may
change without losing continuity. This problem drove
Hegel to his dialectic by which he connected the object
with the subject. He admitted that in reflecting upon
our experiences we actually alter their contents, but he
also pointed to the connecting link between steps of cog-
nition. We do get ahold of the world about us, though
our conclusions change as we shift viewpoint and alter
premises. A contrasting and compounding of judgments
ever takes place. By it we secure new truths, but move
50 THE LIMITS OF SOCIALISM
in pendulum swings that turn truth into falsehood. We
go from thesis to antithesis, and hence to synthesis. In
an Aufhebung der Momente, as Hegel styles the process,
we add to our knowledge while losing part of what we have
felt. Thus, logically viewed, learning is given movement
and direction. All things become relative. We live in a
world of contradictions. What the old logicians said
about laws of Identity and Excluded Middle is only under
certain reservations acceptable, for a thing may both be
and not be. It may be good and bad also. If it is not, it
may become. If it is, there exists a raison d'etre, but as
against this we have the prospect of decay and a resur-
rection of the old in totally different forms.
This idea that all things are relative to each in the
sense that one judgment necessarily grows out of a pre-
ceding one a thought Hegel seems to have distilled from
studies in Greek metaphysics this idea suited the tem-
perament and needs of Marx and Engels. They poked
fun at the absolutistic phase of Hegelian beliefs, but they
were deeply impressed with the weight of his main con-
tention.
When Hegel wrote that " the State represents God's
progress in the world, it rests on the power of will taking
embodiment in Reason. The State must not be identified
with any particular nation, but with God himself " l -
Marx could not give assent. As early as 1843 he sug-
gests that " the worst enemy of real humanism (that
is of socialism) in Germany is speculative idealism." 2
And in the " Holy Family " Feuerbach is lauded because
he put Man in the place of " all this f olderol about the in-
1 Hegel, " Enzyklopaedie," 258; 272.
2 Marx, K., " Heilige Familie," Preface, printed in Mehring, F.
Aus dem Literarischen Nachlass von Karl Marx, Friedrich Engels,
und Ferdinand Lassalle, Volume I.
INTEPRETATION OF HISTORY 51
finite self-consciousness," 3 which Hegel made the center
of his Logic. Idealism was not to the liking of men who
were engrossed in economic studies and sought a remedy
for existing evils. More particularly Marx was not
satisfied with the type of historism he read out of the
Enzyklopaedie. He exclaims : " Hegel's historical con-
cept is nothing but a speculative expression of the Chris-
tian-Teutonic dogma of opposition between spirit and mat-
ter, between God and the world." 4 Such a construc-
tion was alien, perhaps, to the mind of a converted Jew.
But all the more glad, then, were the founders of scien-
tific socialism when after HegePs death one grow) of
disciples turned radical and exploited/the relativisticl side
rather than the idealistic. Hegel's* Immense range and
generalizing applications admitted naturally of a great
variety of interpretations. Those who saw the force of
the first and second part of his Logic agreed to ignore
the third, thus getting rid of absolutism. The pragmatic
penchant in the master was now boldly emphasized and
quickly elaborated into a new sort of humanism. We
have men who like the brothers Feuerbach, like Bauer
and Strauss transferred the logical relativity into a
sociological one. Feuerbach especially created a stir with
his " Essence of Christianity " in which religion was hu-
manized and Christianity expounded in metaphysical
fashion. In the end Ludwig Feuerbach turned away
from the materialistic position that at first his readers
placed him in, but Marx kept what he found good and
used it for his historical interpretation.
Hegel himself had furnished part of the Marxian view,
as was frankly admitted. As Engels at a later date put
it: "From this (the Hegelian) point of view the history
a Ibidem, Chapter VI.
* Ibidem, Chapter V.
52 THE LIMITS OF SOCIALISM
of mankind no longer appeared as a wild whirl of sense-
less deeds of violence, all equally condemnable at the judg-
ment seat of mature philosophic reason, as deeds which
are best forgotten, but as the process of evolution of man
himself. It was now the task of the intellect to follow
the gradual march of this process through all its devious
ways, and to trace out the inner law running through all
its apparently accidental phenomena." 5 And when
Feuerbach added to this the humanistic concept by which
man was made the center of things, the sole judge and
jury of all values in science and philosophy, then his-
torism assumed definite meaning. The hedonistic view of
Friedrich Feuerbach prevailed over the theism of his elder
brother. 6
Hegel's devotion to an Absolute was ridiculed. His
transcendentalism evoked only the scorn of Marx who
concluded that the metaphysical procedure turned things
upside down, making a phantom out of what was real,
and worshipful truth out of what man had known and
never could sense. To Hegel, we read in Engels' " So-
cialism Utopian and Scientific," " the thoughts within his
brain were not the more or less abstract pictures of
actual things and processes, but conversely things and
their evolution were only the realized picture of the Idea
existing somewhere from eternity, before the world was.
This way of thinking turned everything upside down and
completely reversed the actual connection of things in the
world " 7 About the same time this was in 1873
Marx wrote in the Preface to the first volume of his Kapi-
5 Engels, F., "Socialism, Utopian and Scientific," p. 95. A popu-
lar version in English dress of the same author's " Anti-Diihring."
See especially Friedrich Feuerbach, "Die Religion der Zukunft."
7 Engels, F., "Socialism, Utopian and Scientific," p. 86, and in
"Anti-Diihring," p. 30.
INTEPRETATION OF HISTORY 53
tal : " To Hegel the life process of the human brain, i. e.,
the process of thinking which, under the name of the Idea
he even transformed into an independent subject, is the
demiurgos of the real world, and the world is only the
external, phenomenal form of the Idea. With me, on the
contrary, the ideal is nothing else than the material world
reflected by'Tlie Human mind, and translated into forms of
thought."
The dialectic now became a simple affair. It was, as
Engels observes in his " Anti-Duhring," " nothing but the
science of the universal laws of motion and evolution in
nature, human society, and thought." That is to say,
Marx and Engels transferred the thought of relativity
from the field of psychology, or better still of induction,
to the field of historiography. It was clear to them that
what Hegel treated only as a mode of individual reason-
ing was really a principle of progress by which past and
future might be explained. If one judgment gives rise
to an opposite the fusion of the two being a new truth,
then surely historical epochs could similarly move by ex-
tremes. If contradiction was the leading characteristic of
cognition, why not overlapping of ideas and conditions the
core of history ? If we have partial identity in a continu-
ous flux of realities, why should not different historical
epochs be linked by institutions only partly in harmony
with them ? The predetermination of conclusions by their
premises surely had a counterpart in the casual connec-
tion between successive environments, their particulars
and interlaced aspects.
3. The Marxian Statement of the Economic Inter-
pretation of History. Thus the Logic of Hegel was con-
verted by Marx and Engels into a temporal process gov-
erning the life of nations. What some have dubbed Eco-
nomic Determinism is the outgrowth of Hegelian dialec-
54 THE LIMITS OF SOCIALISM
tics. 8 From the Enzyklopsedie to " Das Kapital," this is
a true line of descent ! The Hegelian method, some have
argued, was vigorously applied in Marx's analysis of ex-
change and surplus value. No doubt one may defend that
view. But more direct is the relation between Hegelian
metaphysics and the prosaic, empirical concept of his-
tory by which the indictment spread before us in Kapital
is reduced to a mere detail.
The economic version of history develops rapidly in
Marx's mind after Hegel and the Hegelian Left had chal-
lenged his attention. His intimate associations with the
radicals in philosophy furthered greatly his intellectual
progress. As early as 1843, a propos of a review of
Hegel's Rechtsphilosophie, Marx says : " Theories among
people are put into realization only so far as its practical
needs demand. It isn't enough that ideas urge us to
action ; the actualities about us must generate the
thoughts themselves before they may become prac-
ticable." " We insist," adds Engels at a much later
date, " that all hitherto formulated theories on ethics are
the outgrowth, at last analysis, of the economic condi-
tions ruling during the period in question." Eighteenth
century materialism was thus reapplied in a novel man-
ner. The static view was displaced by the dynamic.
Motion was given to a play of forces once pictured as at
rest. Social facts are classified and compared as to their
antecedents and stage of evolution relative to a given
epoch. The economic interpretation is rounded out, and
s Compare the Marxian view with Feuerbach, L., in " Essence of
Christianity" (translated by N. Evans), p. 23: "Time, and not the
Hegelian dialectic, is the medium for uniting opposites in one and
the same subject."
Reprint in Mehring, F. Nachlass, Volume I.
10 Engels, F., " Anti-Diihring."
INTEPRETATION OF HISTORY 55
by the time that Marx left the continent, to spend the
remainder of his busy life on English soil, the materialis-
tic conception of history is already full-blown. Modifi-
cations were later allowed by Engels, 11 doubtless as a sop
to party demands, and also by way of defense against
accusations hurled at his revered friend, but for all un-
biased students the passage in Marx's " Critique of Politi-
cal Economy " will rank as the most authoritative and
most complete statement of scientific socialism.
We read in the Critique, 12 published many years before
the first volume of Kapital came from the press : " In the
social production which men carry on they enter into defi-
nite relations that are indispensable and independent of
their will. These relations of production correspond to a
definite stage of development of their material powers of
production. The sum total of these relations of produc-
tion constitutes the economic structure of society the
real foundation, on which legal and political superstruc-
tures arise, and to which correspond definite forms of so-
cial consciousness. The mode of production in material
life determines the general character of the social, polit-
ical, and spiritual processes of life. It is not the con-
sciousness of men that determines their existence, but on
the contrary their social existence determines their con-
sciousness."
Let us note, before quoting further, that the material
basis of life is said to consist of the means and modes of
production, and that these give rise to " relations of pro-
duction " which in turn furnish the substratum for all
non-economic relations. Thus law and religion, art and
11 Engels, F., " Der StOzialistische Akademiker," 1895 (Zwei
Briefe).
12 Marx, K., "Critique of Political Economy," Preface, 1859.
English translation by N. I. Stone, published by Ch. Kerr & Co.
56 THE LIMITS OF SOCIALISM
science receive their impress from the mold into which
they are (according to Marx) necessarily cast.
But Marx goes on to show how economic relations are
everchanging, the superstructure therefore becoming like-
wise unstable. Different rates of change are virtually re-
ferred to. A maladaptation of customs to conditions in
the concrete is the result which is generally accompanied
by social unrest. The Zeitgeist " must be explained from
the contradictions in our collective living, from the exist-
ing conflict between the social forces of production and the
relations of production." These latter are known to us
as " the property relations " because of the stage of eco-
nomic development that mankind has now arrived at.
When the faultline in these strata of social life becomes
too marked an upheaval may naturally be expected.
Changes then will come rapidly. In the facts of the pres-
ent moment we have the part determiners of a future
crisis, a thought put by Marx as follows : " No social or-
der ever disappears before all the productive forces, for
which there is room in it, have been developed; and hew,
higher relations of production never appear before the ma-
terial conditions of their existence have matured in the
womb of the old society. Therefore mankind always
takes up only such problems as it can solve, since, looking
at the matter more closely, we will always find that the
problem itself arises only when the material conditions
necessary to its solution already exist, or at least are in
the process of formation."
By this route then Marx has finally reached the point
which relates most closely to his practical aims. He re-
minds us of the cosmic principle governing all life, and
adds : " The bourgeois relations of production are the
last antagonistic form of the social process of production
antagonistic not in the sense of individual antagonism,
INTEPRETATION OF HISTORY 57
but antagonism arising from conditions surrounding the
life of individuals in society. But at the same time the
productive forces developing in the work of bourgeois so-
ciety create the material conditions for the solution of
that antagonism."
The economic analysis thus becomes simply a monu-
mental proof of a theorem regarding historical evolution.
Surplus theory and the socialization of capital are con-
cepts centering about the Economic Interpretation of His-
tory. The misery of the masses, Marx demonstrates, is
bound to end because beliefs and laws change with the
material, economic environment. The case of the prole-
tariat rests with the gods who laid down a mighty prin-
ciple of life, but also with man to the extent that he is
able to utilize the principle. Things move in a cycle, or
perhaps we should say, in a spiral course leading upward.
Capitalism is doomed, for it leads to exploitation of labor,
to overproduction and unemployment, to vast combina-
tions of capital destructive of small enterprise, and hence
to rebellion on the part of an outraged populace.
The Marxian idea of history, for this reason, could not
fail to buoy up the spirits of those who, resentful of their
employers' tactics, yet saw no way of regenerating them
by peaceful methods.
CHAPTER IV
THE ECONOMIC INTERPRETATION OF
HISTORY (Continued)
| i. Importance of the Economic Interpretation of
History. A correct interpretation of history is im-
portant because of its bearing on our future conduct.
Logically we should be guided by events of the past, for
history is only a record of past events which resulted from
the interaction of human nature and of environment. If
as a result of certain actions a situation developed which,
in reviewing it, we dislike we should feel prompted to do
differently next time. This is the significance of all in-
terpretations of the past, the Marxian not excluded.
Marx chose three points in his contemplation of history
and made these his loadstar for speculations on the fu-
ture. They were first, a division of events into the eco-
nomic and non-economic, second, the establishment of a
causal relation between the two, and third the explanation
of misery as a maladjustment of past and present. Grant
these features, and the paramount importance of his at-
tempt must appear at once. History consists of records
of past events, and these were once the present. The
historian, then, treats of social processes as well as the
sociologist or economist, only he studies them as some-
thing old and completed. The historian speaks of com-
pleted series of events; the student of contemporary
events regards them as processes still under way.
A critique of the Marxian economic interpretation of
history will turn on the points made by Marx himself, but
58
INTEPRETATION OF HISTORY 59
it will also aim to restate, when necessary, those facts of
the social process which relate to the Marxian program
of reform. If socialism wishes to change the social order
it must acquaint dtself with the precise meaning of mal-
adjustment, of causal relation, and of the economic inter-
pretation of history in general. Only thus can it obtain
elements for a theory of prosperity which it seeks to for-
mulate; only thus can concepts of justice, democracy, and
progress assume definiteness. The limits as well as the
possibilities of socialism are given by the analysis of the
social process which the Marxian interpretation of history
involves.
Marx speaks of cause and effect. He held the economic
data responsible for the character of the superstructure.
There was no equivocation on that subject. He is very
plain in his statements. But what is cause and correla-
tion? If the economic and non-economic facts are re-
lated, of what sort is this correlation? And how do we
find such interrelations? The Marxian theorem compels
us to face these questions. It is a step in our general
appreciation of the socialistic platform to ascertain the
nature of cause and correlation. Correlation has to do
with the grouping of events that fill our life. Cause has
to do with classifying the events for future use. The
study of cause and effect turns on a selection of elements
in a situation with a view to forecasting future correla-
tions or to controlling them, if we dare and care.
2. The Problem of Correlation All our experi-
ence is of events happening in groups. We do not sense
things as units entirely segregated from other units any
more than we see individuals living as hermits, secluded
from the rest of the world. Events come in series, in suc-
cession or in coexistence. We see lightning and hear
thunder. We look out into the street and behold in-
60 THE LIMITS OF SOCIALISM.
numerable facts related in various ways : the children play-
ing by groups, the traffic in a certain order, the array of
houses and the framing of it all in an environment of sky
and nature and conditions of the weather, in space and
in time. Everything thus appears to us as happening
either simultaneously or successively. In the former case,
as when I see a tree with its trunk and foliage, its color
and size, or the shape of its leaves, the logician speaks
of coexistence of facts. In the latter case, when for in-
stance the clouds gather before a storm, the streets next
begin to be pelted with big drops of rain, and eventually
a gust blows amid flashes from the sky, the logician speaks
of sequences. The events happen in a certain order in
time.
The problem of correlation, which leads up to the ques-
tion of causation, consists of two parts. The first is the
facts of remembrance of correlations, and the second is
the method of discovering new correlations which are not
obvious to the sense. The picture I get of the street is
one presented immediately to my eye. The correlations
are discovered by being seen. That is all. We learn in
this manner to adjust ourselves to the facts present. But
without memory the adjustment would be incomplete, since
instinctive reactions do not always answer. The differ-
ence between animal and man is largely the difference in
memory, though of course animals also remember things.
Our ability to remember is grounded in the facts of
metabolism and of a nervous mechanism which have been
disclosed chiefly during the nineteenth century. For the
psychologist the fundamental facts in consciousness are
sensation, selection, and memory. We have the principle
of sensing things, of being stimulated and responding, of
responding not to all stimuli, but only to some, and of
storing impressions so they may color future impressions.
INTEPRETATION OF HISTORY 61
This trio of principles forms the foundation on which
most facts of consciousness and behavior rest. But for
the purposes in hand it is more convenient to take sensa-
tion for granted, and to single out for special mention the
nature of association, before trying to understand cause
and effect.
We are stimulated from the outside, that is peripherally,
o*r from within, that is centrally. Anything calculated
to produce physico-chemical changes, no matter how
minute, in our body, represents a stimulus. We live in
the midst of such excitations, and we respond to them
often. One stimulus may produce several distinct reac-
tions, or one reaction may be the result of several stimuli.
This follows from the interlacing of the carriers of excita-
tion.
- The human body, in one aspect, is a vast network of
nerves, and the nervous mechanism is a system of conduc-
tion units by which stimuli are converted into more or less
complex responses. The unit is the neurone of which bil-
lions exist, and over which stimuli are transmitted to
reach the proper centers and connections that ensure
suitable reaction. The end of life is action ; the purpose
of the neurone is the conduction of stimuli for right reac-
tion. In a reflex action the stimulus is carried over a
simple arc connecting receptor with motor organ. The
twitch of a muscle is a case in hand. But the great ma-
jority of reactions are established more circuitously, by
means of switchings of excitation, of redirection in the
spine and in the cortex, so that highly elaborated series of
movements, of ideas and feelings become possible.
And this is particularly made possible by the capacity
of the organism to remember. Man remembers experi-
ences. His nervous mechanism is said to respond in the
sense that it carries stimuli, and carries them the more
62 THE LIMITS OF SOCIALISM
readily the oftener they come, though other principles
also decide. Physiologically the explanation is a lessen-
ing of resistance to the current that travels over the neu-
rones. It is inconsequential whether we imagine the trans-
mission as one akin to the burning of a fuse leading to
discharge and detonation, or whether the transmission
partakes of the nature of an electric current. But it is
important to note the effect of repetition upon the nerve
cells. The places at which the neurones connect the
synapses yield more readily to a second or third than
to a first excitation, other things being equal. It is like
folding a garment. Gradually a crease is made, and sub-
sequent folding is easy; it follows the old crease. Thus
paths are made from continual walking in the same line.
Thus rivers dig their channel through solid rock. And
similarly the excitation of the optical nerve survives the
stimulus itself. After-images are somewhat like memory.
The effect outlasts the cause.
We learn by remembering, that is by reducing the re-
sistance originally offered to stimuli and to their passages.
Either we are naturally predisposed toward the accept-
ance of a stimulus, or we acquire the ability to receive and
transmit it. " Learning," in the words of a psychologist,
" is a process of making easier the passage of an impulse
from neurone to neurone." 1 The function of education
is to control the stimuli reaching us, at the beginning of
life, from the outside, and later from within also. It is
to cull out the bad, to strengthen the desirable, and to
redirect them so as to effectuate the best possible adjust-
ments, that we receive instruction.
The outward proof of memorizing, of lessening the re-
sistance to impulses and their transmission, is the forming
iPillsbury, W. B., "Essentials of Psychology." Revised Edition,
p. 55.
INTEPRETATION OF HISTORY 63
of habits. Habituation is one of the most fruitful of all
capacities. It is the most common of traits. ': We all be-
come addicted to things ; we all learn to react habitually.
We learn, in short, to do things without paying attention,
without noticeable effort, without being conscious of the
act of doing. Thus with walking, eating, dressing, play-
ing an instrument, etc., etc. Habituation means a sense
of comfort because of the ease with which things are done
and reacted to. It is not merely a question of motor re-
actions, however ; a response in belief and ideals is equally
in point. What we are used to we commonly like and
prefer to strange things. The strange is usually distaste-
ful to us, unless some features in it, reminding us of
features in familiar things, break down our instinctive or
acquired aversion.
The effect of frequent repetition is therefore an atti-
tude of expectancy. We are keyed up to anticipate
events, and to react suitably. Experience permits us thus
to save time and energy. Habituation means looking for-
ward to events because they happened in the past. If
they suddenly cease to happen, we feel disappointed or
queer. Nothing jars like habits broken off at short no-
tice, like regularities ending of a sudden. The converse
to this jarring of unforeseen interruption upon our nerves,
upon our consciousness, is our disposition to believe the
familiar things, and to believe that they will occur again.
So many successions of day and night, for instance, have
occurred in our individual lives, that the non-recurrence
is thought impossible. It is only when other experiences
directly, or by a process of reasoning soon to be discussed,
induce us to consider the possibility of a non-recurrence
that we fail to believe in its necessity. Thus with the
repeated appearance of a certain number in the throw of
the dice. Here contrary experiences tend to weaken our
64 THE LIMITS OF SOCIALISM
attitude of expectation. But in general repetition means
anticipation, or as the logician has put it : We infer things
by way of enumeration. We number events and then
cherish beliefs accordingly. If winter has always, or so
many times, brought snow and ice, we expect more ice
and snow the next winter. We learn to induce future oc-
currences from the past.
This is the first important circumstance in a study of
our inference and correlation. The second is selection
and attention.
Not all things are noticed and remembered. Our en-
vironment consists really only of the facts we react upon.
We sense things according to definite principles and ig-
nore more or less fulty everything else. Or we see things,
but do not pay particular attention to them, that is we
do not make them the center of things, we do not focus our
mental eye upon them to the exclusion of much else. Only
for particular purposes do we single out events for pro-
longed study. Only because the reaction to stimuli serves
to protect and develop our interests do we select our
stimuli. Selection is a necessary corollary to spec-
ialization of means and ends in species, each specie hav-
, ing its own characteristics of needs and habits.
Our selection of possible stimuli is governed by objective
and subjective conditions. The intensity of the stimulus
is an example of the first kind ; the facts of training, of
the second. According to our general schooling and ex-
perience, according to purposes at the moment when the
stimulus is present, according to immediately preceding
sensations, to predispositions inherited, or to pressure
brought to bear upon us by our fellowmen, we notice or
ignore things, treat them indifferently or make them the
special subject of our investigation. We shut out most
INTEPRETATION OF HISTORY 65
elements in a given situation from our vision. This is
true not only in an optical sense, but likewise of our
method of learning.
From the general law of selection follows our habit of
comparing things. Our system becomes attuned to simi-
lar stimuli in different ensembles of facts, or to different
stimuli in like ensemble of factsAxJLt is essential to the
maintenance of life to discriminate and to compare.
From infancy on we classify stimuli and develop our re-
sponses specifically. Classification may not be conspicu-
ously carried on ; no more than motor reactions always de-
pend on concentration of effort. But comparison and
grouping of data are daily practices without which the en-
vironment could not be mastered. We remember to se-
lect and compare, and we also select our stimuli in order
to learn the right reactions.
But note that as a result of this eternal process of at-
tention a group of events never really embraces all of the
factors in the group. In a thunder storm, e. g., I see
many things, but not nearly all. I select only as my in-
stincts command, or as experiences seem to justify. In-
numerable elements in the situation called a thunderstorm
remain unobserved by me. I may at a later date see more
of them, or I may have reasons for looking for more. Or
I may have seen a greater number at an earlier date, but
forgotten. All this varies and depends on the principles
of selection and remembering already referred to. In this
survey the only notable fact is the variable number of
facts constituting a complete situation what we call
the correlation regularly recurring, such as the aforesaid
thunderstorm. We seem to have the complete situation,
but do not, as later experiences may prove. For practi-
cal ends at a given moment the correlation may be per-
66 THE LIMITS OF SOCIALISM
*C"~
feet, but it does not remain so. Our perception, in short,
is of selected materials in a structure.^/ We perceive sali-
ent features, what to us seems essential according to par-
ticular, perhaps practical, ends, but this subjective pic-
ture may not correspond to reality, or what at another
time seems reality. Percepts are always abstractions.
But before fully understanding the percept the prin-
ciple of association must be invoked. It is through as-
sociations that we greatly enrich our power of reactions
and facilitate our search for new truths.
The theory of association may be stated as the belief
everywhere held, and by science duly recognized as a fact,
that our ideas are governed by the past. Connections of
the past govern the reproduction of ideas. To have per-
ceived means not only to recognize by force of memory,
but also to see anew in the light of experiences not per-
haps directly connected with the prototype of the par-
ticular new experience. If for instance I have seen the
striking of a match to lead to ignition I may remember
this, and the motions involved in the act of striking will
become the easier the oftener I repeat the performance.
This is simply a case of memory. But the effect of asso-
ciation is the recall of events not happening at the time of
recall. To see a match struck, for instance, and to recall
the sound it usually makes, without hearing it at the time,
that is memorizing by association.
The physiological aspect of this important fact lies in
the intertwining of nerve paths, and in the existence of
association areas in the cortex, whose function is primarily
the connecting of different sensations, or of movements
with sensations for adjustment to the largest possible
number of stimuli. To quote from an authority : " When
a group of neurones was active at the time of the original
experience, paths of connection were formed, synapses
INTEPRETATION OF HISTORY 67
were opened between them, and later, when any element of
the complex is aroused in any way, the impulse tends to
spread over the partially open synapses to the other ele-
ments of the whole." 2 That is to say, we may imagine
different nerve paths to have part of their course in com-
mon. They converge and part again. Excitations from
different sources travel partly over the same path, and at
the points of contiguity of the neurones they are connected
so that one stimulus may arouse others, and lead to a long
series of reactions. The stimuli may be aroused peripher-
ally or centrally. Ideas are for the purpose of the psy-
chologist as truly sensations as those generated by out-
side facts.
The principles of association are those first suggested
by the Greeks, namely of association by resemblance, con-
trast, contiguity or continuity. But evidently this is a
mere classification, not an explanation of the process.
Nor are the four truly distinct, since resemblance and con-
trast imply comparisons in space and time, which prob-
ably account for all rearousals. And again, as our writer
admits, the association is more truly one of neurones than
of ideas, the association not following strictly the prin-
ciples laid down by the ancients. Thus " not only must
we limit the application of the doctrine of associations by
the assertion that it is the neurones at the basis of the
elements of ideas that are associated rather than the ideas
themselves, but we must also recognize that associations
give only the possibility of recall, and that selection must
be made between the possibilities by more remote fac-
tors." 3 We do not associate all things seen together in
space or time. Inhibitions come naturally, and are spec-
ially cultivated by education. Thus attention becomes
2Pillsbury, W. B., "Fundamentals of Psychology," p. 223.
3 Ibidem, p. 227.
68 THE LIMITS OF SOCIALISM
fruitful, and adjustment rapid and exact. In other
words, the selective forces affect association as well as
memory itself.
Yet the fundamental fact is as stated. We are again
and again led to recall the past by stimuli in the present
somehow related to stimuli in an earlier situation. The
principle reminds one of the Lamarckian contention ac-
cording to which acquired traits are inherited. The son,
it is said, will act somewhat as the environment made the
father act, even though the son lives in a different en-
vironment. It is again a case of memory and habitua-
tion, but this time by indirect stimulation. Recall in this
manner enlarges our capacity for learning. " Learning,"
we are told, " is always the formation of connections be-
tween neurones ; retention is always the persistence of the
connection, or the partial openness of synapses which per-
mits an impression to pass from one to the other of the
connected elements : recall is the rearousal of the whole
complex by some one of the elements that may be stimu-
lated from the outside world, directly or indirectly." 4
A part suffices to arouse the whole; that is the main
characteristic of association.
A distinction should, however, be made between recall of
events regularly correlated, and a recall of events which
only in part recur regularly. If, to return to the illustra-
tion of the match, I expect ignition at the striking of a
match because it has always resulted in ignition, this is
direct association of events invariably coupled. They
belong together as integral parts of a series, and have so
been classified. But if, on hearing a melody, I am re-
minded of childhood scenes, and then perhaps of a long
chain of happenings covering many years, relating to
places and persons nowhere before me now while I hear
* Ibidem, p. 225.
INTEPRETATION OF HISTORY 69
the melody, then the association is indirect, of things not
regularly recurring or correlated. The only binding link
is perchance a single quality of tone, or a mistake made in
playing the instrument, or a peculiar way of ending the
performance, and so on. A few elements are sufficient to
reconstruct all the elements, or at least a great many ele-
ments, in the older situation. The one thing held in com-
mon by the old and tho new series of events is responsible
for the recall of all the rest in the old series. Thus ideas
skip and travel at an amazing rate. Thus in the twinkle
of an eye one may traverse the universe and rehearse a
lifetime of struggles. Indirect association is the import-
ant principle for the extension of our knowledge, and for
the understanding of trifles in our daily conduct. It is
the transfer of ideas that counts, more than the recol-
lection of events experienced together regularly. Or, to
put it differently, the association by resemblance (or con-
trast) is far more important than association by con-
tiguity and succession. The latter helps to explain ex-
pectation and beliefs, but the former is instrumental in
multiplying the data for belief.
Just what elements in the new sensations guide my con-
catenation of thoughts, and in what direction it ultimately
leads me, depends, as already remarked, to some extent
upon the general laws of selection. I am sure to be in-
fluenced by previous associations, by moods of the moment,
by ideas uppermost in my mind, by facts of temperament
and of training. They all determine the scope and nature
of my transfer of ideas, they all influence us in our search
for new facts.
The principles of finding a new correlation connect with
this circumstance. If the correlation is not one directly
submitted to my senses, such as the sequence of work and
fatigue, or the coexistence of flame and heat, special ef-
70 THE LIMITS OF SOCIALISM
forts must be made to find it. This is our task from birth
to death. We continually look for new groups of events,
see them repeat themselves, and add one correlation to the
next by virtue of memory and selection.
One way of ascertaining new correlations is to try out
alternatives. If, for instance, I cannot open a door which
I have opened often and expect to be able to open by the
usual method, I will be puzzled for a while and then look
for the cause. That is, since just now we are not in-
terested in cause per se I will try to get the complete
set of facts connected with the impossibility of opening
the door. I may try to lift it by the knob, or press it
downward or push it toward me or from me, or shake it,
or look for obstructions on either side if I can do so. I
go on the supposition that many elements go into the
situation which is new to me, and that I may hit upon
some elements essential to its not opening, just as I had
known some elements to be essential to its opening. I
may come upon the factors and remember them.
Or suppose I have a watch which keeps good time in
one place, but loses time in another. If I feel so inclined
I may ascertain the pertinent facts at random. Let us
assume, at any rate, that I am guided by no prior experi-
ence of any kind, an abstraction permissible for the pur-
pose. I then might use my developed powers of selection
and attention. I begin to compare two different situ-
ations and to classify events according to resemblance and
difference. I say, here is my habit of wearing the watch,
the way it lies in my pocket, the way and time in and at
which I wind it up, the facts about the watch itself, my
way of walking and using it when consulting the dial.
And so on. I may enumerate and put in two columns the
facts I hold alike and those peculiar to each situation. It
INTEPRETATION OF HISTORY 71
is likely that I find many similarities and some differences.
The whole procedure so far is that made famous by
Mill's canons of induction. I compare and tabulate re-
sults. Mill pointed out that where all things except one
are held in common by two or more different situations
the one differential assumes unusual significance. But let
us note simply that at last I have found some differences
which I think sufficient to round out the new situation in
which the watch does not keep time. I may now take the
watch several times from one place to the other and note
that each time in place A it runs accurately, and in place
B it falls behind. If I repeat this often enough, what will
be the effect on my opinion about the watch? I shall
simply come to believe that in the future also the watch
will fail me in one situation, but respond well in the other.
The force of repetition will set in as usual. On the prin-
ciple of induction by enumeration I shall develop a belief
that past correlations will recur. I shall speak of a law,
for the watch, of keeping time and losing time respectively
in two different places. Laws are nothing but such regu-
lar recurrences of sequences and coexistences, as logicians
found out centuries ago.
Very well. But it is not likely that I shall experiment in
that fashion. Scientists particularly do not ascertain
new correlations, that elude the five senses, in such a hap-
hazard manner. They proceed with some eye to economy.
They select the facts to be watched, and shape before-
hand their plans. How, then, are thinkers as a rule
guided? What is the modus operandi in reasoning?
What is the approved and common method of inference?
It is reasoning ~by analogy. It is by resort to mem-
ory and association. Instead of dwelling long on deduc-
tion and canons of induction Mill, as modern psychology
72 THE LIMITS OF SOCIALISM
sees it, might have better put analogies in the foreground
of his discussion. Inference by analogy is the rule rather
than the exception. And not only that, it also marks the
nature and limits of most of our knowledge.
In the case of my watch, then, I shall do as I did when
trying to open the door. I shall proceed by hypotheca-
tion in accord with the dictates of association and mem-
ory. I tried to open the door by lifting or downward
pressing at the knob, because I knew that wood swelled,
and that this might make the opening difficult. Only
after these expedients failed would I normally look for
other faults, or for some one on the other side holding the
door, or for its being locked contrary to orders.
As to the watch, I cast about for explanations also.
That is, I cast about for groups of events which in their
entirety would give the experienced result. I am influ-
enced by the principle of association. I look for a factor
which other situations share with the new one. Or rather,
one or more elements in the new situation remind me of
other situations containing many more than the particu-
lar factors. I am led to make comparison in a certain
direction. Guided by knowledge, we say. Yes, guided
by knowledge, or by a fund of associations, which is much
the same thing. Instead of finding the differentials there-
fore by piecemeal classification and enumeration I resort
to a circuitous method. I do in reasoning what the en-
terpriser does when he substitutes machinery for manual
work. I take indirect routes which at first have cost
much effort and time, but by their aid I can now achieve
results more expeditiously.
I am willing to look for differences and resemblances by
comparing a former situation with the present, because in
the past such partial resemblances have meant resemblance
m toto. Association directs me; but it does not affect
INTEPBETATION OF HISTORY 73
us all equally. Association leads to observation of like-
nesses and unlikenesses. A few of them are quickly noted
and kept in mind. And now I fall back again on the prin-
ciple of enumeration. Since up to date situations have
proven alike in all parts when only some of them were for-
merly observed to be alike, and since I have witnessed long
chains of happenings to recur exactly as I predicted after
having found some of the happenings similar to some no-
ticed at other times, I infer a like aggregate result for
similar future chains of happenings. And furthermore,
the fact that part resemblances often mean complete re-
semblance, and that a recurrence of a former entire series
is the likelier the more nearly its beginning events resemble
those of an older correlation, also induces me to compare
the nature of the resemblance.
But my faith is reenforced from still another quarter.
Namely, it is a common observation that the distribu-
tion of events is either regular or irregular. If regular I
attribute it to a law of nature which comprises the regu-
larities just discussed correlations which form the bulk
of scientific knowledge. Or I attribute it to human inter-
ference and design. Man always places himself in the
middle of a situation. He feels himself to be the planner
and architect of his fortunes. When he acts, the results
of regularity are of his making and hence, he avers, ex-
plained. But when neither a natural law nor the hand of
man can be predicated as part of the regularity of events
their distribution is felt to be a chance event. An ir-
regularity is expected. We see irregularity where we do
not refer one group of facts to another group, just as we
ascribe to chance what is really an unknown principle
about which perhaps we care nothing.
Probability then is a forecast based on retrospects.
The chance of regularity is the greater the more definite
74 THE LIMITS OF SOCIALISM
our comprehension of laws or of human design back of it.
And my belief that a whole series of events will recur
when some of them have in the past proven to be part of
a particular larger series, is the stronger the greater the
number of events common to both situations. The more
resemblances pile up, and the oftener they recur, the more
convinced I am that the entire series is of the old sort ;
and I am willing to predict accordingly. This is the
reason for my inferring things by analogy. In this man-
ner I am led to discover the new correlation centering
about my watch when it loses time. Thuswise the prin-
ciples of association, selection, and memory collaborate to
help me discover new truths.
Reasoning by analogy indeed becomes so habitual that
often we are unaware of using it. Thus recognition of
things may be regarded as much as an act of inference as
of mere perception. A physician, for instance, may not
diagnose a case by exhaustive, systematic enumeration of
symptoms as observed in the study of my watch. As-
sociation may be direct and suggest at once the nature of
the disease. He sees certain events or characteristics, is
reminded of similar ones connecting with a malady called
scarlet fever, and at once pronounces the new case to be
one of scarlet fever. The tendency to recognize things as
alike is always strong, when some one element of similarity
exists. And the fact that a disease is in question
strengthens the inclination to infer from analogy. But
of course, this first recognition may soon be superseded by
cautious study. If contradictory evidence presents itself
new lines of associations and of reasoning will be opened.
If I see some objects on a table, looking round and red-
dish, of a certain texture and size or shape, I will imme-
diately call them apples, and all of them apples, without
having compared them carefully with another object
INTEPRETATION OF HISTORY 75
known to be an apple, or even without rehearsing my own
experiences with like objects. Recognition, that is " the
reference of an event or object to some earlier time and
place," 5 satisfies the needs of the case. Thus also, if a
boy should be run over by a vehicle, or somebody fall down
the stairway and appear to be seriously injured. I have
seen no details, but infer so quickly by association that
the recognition is almost a single act. I believe the entire
situation to be such and such because part of it resembles
an earlier one of a certain kind. In brief, my perception
is a partial summary of events which are rearoused by new
events.
The percept is a compound much as water is one. The
joint result of individual actions is no mere summation,
but a new product. Perception is more than association
if that is to mean a stringing together of sensations, as
we might thread pearls. The Herbartian doctrine of ap-
perception was a great step in advance precisely because
it realized this characteristic Q perception and freed us
from the older mechanistic notion./
"Percepts," according to'^one psychologist, "are se-
lected groups of sensations in which images are incor-
porated as an integral part of the whole process." 6 In
the words of another competent authority, quoted several
times before, " the world that we have in memory or in
reason is not the sum of particular experiences; it is al-
ways the mass of particular experiences worked over, and
crystallized about standards." 7 " What is perceived is
not merely a mass of sensations nor is it a single sensation
that suggests some other single sensation or group of sen-
sations ; rather is it a type, an organized product of many
s Ibidem, p. 366.
Titchener, E. B., "Textbook of Psychology," p. 367.
7 Pillsbury, W. B., " Psychology of Reasoning," p. 76.
76 THE LIMITS OF SOCIALISM
experiences which have finally given rise to a construct
consistent with all of our different related experiences." 8
The percept, then, is the result of many correlations not
having all events in common, but many of them. Percepts
are averages, so to say. Roughly speaking they describe
situations, but each new situation will have its own pecu-
liarities, and each new act of sensing will reckon with the
differences.
I perceive what is important, and I sense what is con-
spicuous. A picture is an abstract for that reason. It
has meaning because I see only part of the lines and planes
in it, and not all, and because I see them in certain rela-
tions of space to each other. My perspective is spoiled
when I step too close. The picture goes and a tangle of
lines and dots is left, but it conveys no idea. It only ir-
ritates me. Thus everything perceived is a cluster of ele-
ments many of which recur over and over again, in ap-
proximately the same juxtaposition of time and space.
But the fact that percepts are only approximations is of
great importance to our analysis of correlation and cause,
for by virtue of it science becomes fallible and plastic,
subject to correlation and growth, an estimate rather than
a set of laws immutable for all times.
It is not necessary to preach phenomenalism in order
to agree to the relativity of scientific truths. Nor will all
assent to William James' dictum that pragmatists are
necessarily realists. The core of the epistemological
problem is the fact of reasoning, which is based on data
of psychology. The Beyond need not detain us, espec-
ially since all philosophies of the absolute have broken
down by assuming part of what they sought to demon-
strate independently.
sPillsbury, W. B., "Fundamentals of Psychology," pp. 395-96.
See also the same writer's " Psychology of Reasoning," pp. 90 & 97.
INTEPRETATION OF HISTORY 77
But there is no doubt that inference by analogy ac-
counts for most of our beliefs and of our knowledge even
such as is verified in an objective sense. The thought of
chance distribution and of probability is doubtless a prod-
uct of such reasoning. The explanation here offered of
the method for discovering new correlations is itself an
instance of inference from analogy. And mathematics
and history are almost entirely limited to such procedure,
the latter admitting it frankly, while the latter was long
held to work with instruments infallible and inscrutable.
Historians reason by reference to occurrences in their own
environment, or by deductions from human nature, that
is by analogy. The great bulk of verities that the social
student and ethicists of the old type gave to the world
were unprovable. They were true in so far as they ac-
corded with the principles of thinking just mentioned.
Put otherwise: They were and always will be true in so
far as modes of thinking among men are the same, due to
millions of years of environments shared in common by our
ancestors. Evolution has made us in some things alike,
and our reasoning process is part of this universal hu-
man nature, though our funds of knowledge and of as-
sociations, and hence the trend and power of our reason-
i/ng vary enormously. Sociological events are scattered in
time and place. Besides, they are non-reproducible in
their entirety. We express this by admitting that an in-
determinate number of factors enter into a given situa-
tion, whose control is ordinarily beyond us. In this sense
most sociological events cannot be " proven." Yet we
can measure by averages and rejoice in the recurrence of
averages approximately and for limited period of time
or areas or groups of people. Insurance rates thus be-
come possible, though rates will change with conditions.
Mortality figures thus assume much definiteness. and are
78 THE LIMITS OF SOCIALISM
deemed reliable, though they change in time and place.
Averages, for that matter, prevail everywhere, both in
natural and social science.
Is there no proof, then? Or better: What is proof?
When is something absolutely true? The question is
natural because deduction is supposed to furnish irrefut-
able proofs such as should satisfy the most ambitious of
metaphysicians.
We may answer yes or no according to the nature of
facts in question, and according to our notion of truth.
Proof namely is in the eating of the pudding, which means
that all so-called verification (" making true ") is by ap-
peal to the senses. But in as much as the senses differ we
cannot believe that all things are true in exactly the same
way to all people. We can only say that some elements
in a situation will be perceived by all in like manner, and
that this rough correspondence is equivalent to proof. A
proposition is proven when demonstrated to the eye or ear
or taste, etc. It is proven true when it " works well,"
when the application of science, e. g., brings desired re-
sults. This does not mean that truth depends on appli-
cation, or science on commercialization. No, it means
simply that some judgments are true to all in so far as
our sensing or perceptions veer about types common to
us all.
But where objective verification is impossible, as in the
case with most of the verdicts of social science, there be-
lief of experts is tantamount to proof. The general run
of people will accept expert advice as truth because they
are swayed naturally by superiority or by the socialized
agents of control. . And if both verification and expert-
ness are lacking, then the opinion of the majority becomes
the standard. Mere number wins in many cases. For
want of better evidence we go to the multitude. Thus
INTEPRETATION OF HISTORY 79
public opinion becomes truth, and thus our ideals seem to
us indisputable truths. We have arrived at them by much
the same methods of reasoning that the scientist uses.
The ways of common sense are the ways of science.
The chief difference between the layman and the scien-
tist is therefore not one of methods, but one of instru-
ments and results. Science has inestimable advantages
in control, measurement, and associations. It may iso-
late phenomena, select its facts carefully and place them
in surroundings that make observation of details possible
and easy. It uses artificial means of reproducing events
so as to be able to know exactly what is going on. This
power of rehearsing the course of events in a given correla-
tion leads to the establishment of new correlations by
elimination and introduction of factors chosen for special
purposes. A plan of action characterizes the investiga-
tions of the professional which the tyro rarely knows of.
And besides, there are means of measurement vastly su-
perior to the ordinary. An indirect method is here the
chief advantage. Differences in weight and length, in
force and volume that could not be detected by the naked
eye become marked as soon as special devices are called
into service. The micrometer and the seismograph, the
stop-watch and galvanometer, or the vacuum-balance are
invaluable aids in minute differentiations that may lead to
a new conception of the situation studied.
The fund of associations grows steadily ; partly be-
cause records are filed for future reference so that the
memory of science is made more reliable than that of the
average individual, and partly because incessant spec-
ialized study enlarges the fund of known facts that will
serve to stimulate further inference. From the known to
the unknown is always the course in learning, but it has
special significance for the trained investigator who de-
80 THE LIMITS OF SOCIALISM
liberately sets himself problems remote from everyday ex-
periences. A large fund of associations is indispensable in
his undertaking. The greater the number of correla-
tions, the larger is the choice of resemblances and differ-
ences, and consequently the less liable to error the reason-
ing from analogy. Verification may or may not be de-
finitive, but the subsumption of a new particular under
an old generality is facilitated by the increase of facts as
such.
' People frequently are called illogical when they are only
ignorant. They are incapable of reasoning on a certain
subject because their fund of associations is too small.
They may do better somewhere else. They may also lack
the kind of memory type that aids in specialized pursuits
of knowledge. It is well known that not all are equally
adepts in the same field. We differ, but need not be
dunces because we fail in one direction. According to our
powers of visualization our associations may promote in-
ventiveness or stifle it. Some are the prey of their as-
sociations which make them roam aimlessly without focus-
ing on a point. Others gain by their memory and culti-
vate a habit of thought, of fruitful thinking. This is
really possible, though not often practiced.
Sciences also grow. Sciences shift their boundary lines
and the centers of emphasis which from period to period
characterize their inquiries. They start out with well de-
fined lines for subject matter and scope, but eventually
feel less sure about the divisions. Chemistry and physics
thus have points in common, where workers meet and find
problems overlapping. Biology is no longer considered
to be worlds apart from psychology, and the social sci-
ences have always been at odds over the precise demar-
cation of their borders.
The correlations grow, and the factors in each correla-
INTEPRETATION OF HISTORY 81
tion increase. The tendency is commonly toward further
reduction of apparent irreducibles. We are driven from
one ultimate to another. We divide more minutely and
distinguish things by finer lines. Physics for instance
adds the corpuscle to the atom and makes gravity a func-
tion of motion. Chemistry no longer reckons with atoms
and molecules merely. It recognizes in addition isomer-
ism, and wonders about the relation of the elements, the
transmutation of matter being an observed fact. New
elements in a narrow sense, and new constituents of a cor-
relation in a wider sense have crept into the chemist's
range of vision.
What was once held to be the make-up of a good soil
now seems like an inadequate analysis. We consider much
more than the ratio in which chemical elements are com-
bined, and the ratio in which such compounds appear in
the soil. We figure on many other things before pro-
nouncing on the worth of it. Similarly the biologist has
gone from one reduction to another. The cell has
ceased to be a homogeneous unit. We now regard it as a
highly elaborate mechanism for bodily functions or for
reproduction. We have gone from plasm to nucleus, and
from nucleus to, say, chromatin, and from that to chro-
mosomes, and thence to determinants in the chromosomes
which we think are the bearers of heredity. An indeter-
minate number of factors is said to be lodged in the chro-
mosomes, the combination and placements of which vary,
and lead to varying results in the individual. Psychology
no longer speaks of " faculties," as if they were entities
functioning in separate compartments. Consciousness is
too complex a thing for that. The percept is recognized
as a joint effect of innumerable sensations present di-
rectly or by recall. It is like a mosaic that for all its
variegation and numberless bits presents a unified whole,
82 THE LIMITS OF SOCIALISM
an agreeable picture and a plan adaptable to definite ends.
And so with most sciences. The substitution by the
economist of the law of the proportionality of factors for
the Ricardian notion of diminishing returns is a further
instance of growth in factors and correlations. There
is no need for expatiating on a familiar fact. Every-
where the sense of simplicity in correlations is lost. We
see a greater number of elements, a larger number of
variables whose measurement becomes increasingly diffi-
cult. The impression of preciseness and absolute regu-
larity is lost in proportion as we see and know more.
Science is not as cocksure and dogmatic as it used to be.
" The progress of science," as one philosopher puts it,
" is a proces-s of successive approximations, in which new
and more precise, more probable and more extended in-
ductions result from partially verified deductions, and
from those contradictions that correct the implicit hy-
potheses." 9
That is the true state of affairs. Science approximates
and revises. It must periodically face discrepancies and
contradictions. Doubt alternates with belief. Doubt is
a feeling resulting from a conflict of ideas, of associations.
Any one who has tried to solve a problem in the abstract,
or to overcome an unexpected practical obstacle, knows
what misery accompanies a clash of trains of reasoning,
each good in itself, but in discord with others. When
such memory associations come to blows, as it were, the
mind suffers as a whole. It means misery and sleepless
nights, perhaps loss of appetite and incapacity for routine
actions. Doubt is the opposite of belief which is the fruit
of habituations developed at leisure.
Science, then, has limitations which bear on all matters
of study and are of significance even for the socialist who
Enriques, F., " Problems of Science," p. 166.
INTEPRETATION OF HISTORY 83
would reform the world. Science is not the simple de-
vice for ascertaining irrefutable truths that socialism has
often pictured it to be. It is a case of change in venue.
Laws are mutable, though of many things we all
obtain like impressions. Mill's canons erred in promising
science more than it has accomplished. In particular is
the Canon of Difference no more infallible than any of
the others, for the missing link or cause may be much
more than a single agent. Its reduction may be impend-
ing.
What we are sure of, so far as modern psychological
evidence is concerned, is the existence of one method of
reasoning employed by all sciences. The number of sci-
ences may be increased indefinitely according to our con-
ception of correlations of events, but they all resort to the
same mode of discovery and of generalization. Deduc-
tion and induction, for the same reason, are not two dis-
tinct methods, but two aspects of one single process of
reasoning. In the syllogism the conclusion follows from
the premises because we have always known a part of a
thing to be smaller than the whole. This axiom decides
in the end. But the rules of distribution result from the
principles of association that are used in collocating two
premises so as to make their bearing upon the conclusion
plain. Induction underlies the construction of the syllo-
gism, though after the premises are laid down a purely
deductive act takes place. But it remains true, as was
stated over a century ago, that the syllogism in itself can-
not extend knowledge, because it assumes what at the mo-
ment is not verified or perhaps cannot be verified.
3. The Meaning of Causation These things being
so the meaning of cause and effect also becomes clear. In
the words of J. S. Mill : Cause is " The sum total of con-
ditions, positive and negative, taken together; the whole
84 THE LIMITS OF SOCIALISM
of the contingencies of every description, which being
realized the consequent invariably follows." 10 And to
quote from two later writers : " There is no particular
difference between knowledge of causes, and our general
knowledge of the combinations, or succession of combina-
tions, in which the phenomena of nature are presented to
us, or found to occur in experimental inquiry." J1
" Things are not either independent, or causative. All
classes of phenomena are linked together, and the prob-
lem in each case is how close is the degree of association." 12
That is to say, every factor in a given situation no
matter how far we may go in our choice of factors, is
either cause or effect according to viewpoint and need.
Objectively they function in this respect all in the same
way, but our subjective choice leads to the designation of
some 'particular facts as causes. All sequences and co-
existences consist necessarily of causal relations, no matter
how obscure. Even the random arrangement of furniture
in a room represents cause and effect if one wishes to
speak accurately. Any set of facts is cause and effect, of
which some facts become causes in a narrow sense.
We select particulars on the principle of attention al-
ready discussed. Stimuli interest us in different ways.
We react not in like ways to things. Our life is a process
of adjustmet to physical and economic environment, such
that some elements in a situation will seem vital while
others are negligible. Causation is a selective act. To
ascribe cause to something is to give it a special value for
particular purposes. For instance, to say that cold
freezes water into ice is a way of calling attention to a
10 Mill, J. S., "Logic," Book III, Chapter 5, No. 3. Similarly
also Venn, J., in his " Empirical Logic," p. 67.
11 Jevons, W. S., " Principles of Science," Book II, Chapter 1.
12 Pearson, K., "Grammar of Science," Edit. 1911, Volume 1, p.
166. See also p. 177.
INTEPRETATION OF HISTORY 85
factor influencing our behavior at the time. Many things
go into the situation : The location of water, the atmos-
pheric conditions, the qualities of matter in general and
of water in particular, such as expansion, weight, trans-
lucency, etc., etc. But one group in the ensemble known
as cold gets the credit or blame for the entire complex.
Except by reference to will and will-to-live our designa-
tion of cause and effect must appear quite arbitrary.
Nietzsche, the German prophet of a revaluation of
values, remarks in his " Will to Power " that " the so-
called instinct of causality is nothing more than the fear
of the unfamiliar, and the attempt at finding something
in it which is already known." That is a pithy way of
stating one of the principles governing our designation of
cause. We see ourselves as agents and call the facts
about us frequently the effects of our action, we being the
cause. The Ego is a unit. Its expressions are results of
a will. We are cause and bring about effects. And just
as people from time immemorial have personalized unex-
plained facts, making out of them gods in human shape or
powers of human capacity magnified many times, so by
reasoning from analogy we attribute a causative function
to other live or moving factors in a situation. Fear
prompts us, and introspection guides us in this step. Ani-
mals are pictured as agents, and inanimate things become
causes when made conspicuous in some way.
A second principle in our choice of cause, then, is mo-
tion. In the midst of immobile things the moving appear
more commonly as cause, if no other principle interferes.
The falling of a leaf from a tree, for instance, is said to
result from a gust of wind. The wind was felt or heard.
The rotting of the stem of the leaf, the extra weight of
it due to an excrescence on the underside, the condition of
is "The Will to Power, Aphorism," No. 551.
86 THE LIMITS OF SOCIALISM
the twig whence it came, the law of gravitation these
and more facts were overlooked or taken for granted.
The idea of force impelled us to hold the breeze re-
sponsible. Again. We say motion causes friction, not
friction motion. This seems reasonable; but why? The
two form a coexistence. We cannot set the moment at
which friction ensues after motion has commenced. The
two coincide absolutely. But motion is more apparent
than friction, and back of motion is noticed, or under-
stood to act, an agent who really is the causative fact
we allude to.
4 Often, however, and in the third place, we distinguish
etween things controllable by man and those not so con-
trollable. The former are then the causes, and the latter
the effects, or the subliminal facts of no consequence.
What cannot be changed we do not attack in a plan of
action. We divide the world say for purposes of re-
form into variables and constants, thinking of the lat-
ter as facts unalterable. Thus the law of gravitation is
taken for granted. We expect men to protect themselves
against it in certain situations. We provide means of
support for objects. Buildings and chairs are devices for
utilizing or offsetting the general law. We do not blame
the law when something falls. We ask people to be more
careful and hold on to things, or to build better founda-
tions.
Or suppose a man is found destitute of the means of
livelihood. We can assign this to a hundred facts, but
probably will not think of the man's stupidity first. Or,
if we do, we proceed to emphasize another fact as cause.
The pauper himself may complain of unemployment or
illness in the family, or of an accident, and what not.
Or we find him indolent, inattentive, intemperate, etc.
Or we speak of hard times, of bad politics, of unfavorable
INTEPRETATION OF HISTORY 87
weather for the sort of work the poor man wanted. The
factors we can control or believe we can change become
cause ; the rest is ignored.
In the fourth place special purposes may guide us. 14
We speak of prejudices and axes to grind, of malice and
ulterior motives, and like things that color our judgment
and decide our choice of cause. Or it is the event nearest
in time or place that looms up as cause, as when a crowd
gathers in a street and I notice a boy looking for a coin.
I make him the starting point of my location of cause and
effect because I saw him and watched the number of on-
lookers grow after his loss. I do not ask why he dropped
the coin, whether he was day-dreaming or had a nervous fit,
or what led to day-dreaming. And so on. The nearest
concrete and active factor becomes the cause. The mur-
derer is arraigned and condemned partly for this reason.
We either disdain searching into his history or that of
the victim, in order to extend the chain of factors, or we
take refuge in a postulate of freewill and then pronounce
judgment.
We cannot trace all the intervening links in a lengthy
chain of facts constituting a correlation regularly recur-
ring. When a cow gives birth to a calf we ascribe the
flow of milk to that event. We do not go back to the
facts of fertilization that would logically form a more
correct starting point for the whole correlation. Or say
a war breaks out. Will not the cause be the occasion
that historians distinguish from the " underlying " causes ?
And are not the remote " causes " certain facts preceding
the declaration of war? Is it not plain that only a few
i* What is known as the pragmatic movement in philosophy has
developed this point into a system of thought, of which Schiller,
F. C. S., is a typical representative. See this writer's " Formal
Logic," pp. 277 & 283. Likewise: Enriques, F., "Problems of
Science," p. 142; James W., " Pragmatism."
88 THE LIMITS OF SOCIALISM
out of the whole number of facts in a situation are rather
arbitrarily selected as the cause?
The most obvious and nearest incidents impress us as
causes, but in reality the situation is not so simple.
Especially in the organic and social sciences the number
of relevant factors is legion. We may pounce on par-
ticulars, but no proof for such cause and effect will be
forthcoming. For not only is reproduction of the situa-
tion technically impossible, but what is more, we shall not
all classify cause and effect in the same way. It is often
a case of weighing trained knowledge against amateur
views, with the understanding that in the end either may
feel right. Where no direct appeal to the senses whose
reactions we all share in common is possible, the rule of
public opinion or of reputed authority begins.
4. Causation and Economic History. If, now, we
apply this analysis of correlation and causation to the
Marxian statement of the economic interpretation of his-
tory, or to the question of the relation between economic
and non-economic facts, we shall see that causal connec-
tions such as socialism has commonly asserted do not
exist. The economic world embodies stimuli that act
upon man, but so do many non-economic facts. And man
himself is needed in the situation to give contents to both.
The economic facts are part of our thinking and feeling.
If any one fact is a cause in such an ensemble it should be
man whose mind is a unit, and whose facts of conscious-
ness are all inextricably interwoven.
From the psychological standpoint, that is to say, the
Marxian superstructure of law and philosophy is merely
a set of interests somewhat farther from the primitive
man, from the center of attention and striving, than the
acts of production and exchange. Man's needs are
graded because of the facts of his evolution and physical
INTEPRETATION OF HISTORY 89
constitution. Some of our reactions, correspondingly,
will suit the immediate needs of survival or social devel-
opments ; others may persist even when primary needs
catering to survival have changed.
To illustrate. It should not be difficult to trace a con-
nection between prohibition and the value of sobriety in
modern production, or between the sanctioning of fe'male
modern rights and women's industrial activities, or be-
tween our present praise of thrift and the debt of the
United States or our fear of propertyless masses. Such
" ethical " facts may be thought to rest directly on eco-
nomic facts, though the causal chain runs both ways.
But, on the other hand, the economics of the ancient
Hindoos could only faintly be reconstructed from the
Vedas. Our idea of Chinese economic environment can-
not be properly derived from a study of their voluminous
literary works. The art of all ages shows considerable
uniformity of ideas and technique, and but little pe-
culiarity indicative of particular modes of living. Simi-
larly with scientific speculation, philosophy, and con-
cepts of government or morality. The principles of
sociation which sociology and economics study rest on
facts of human nature, and these are so constant that
certain rules of conduct are valid for all times, however
variable their form and economic expression.
To speak of interaction of economic and non-economic
facts is chiefly to use a figure of speech, for what is in-
teraction? If I see a cat and dog fighting I can follow the
movements of each and see each acting upon the other,
with results visible perhaps to the eye. That is interac-
tion in the real sense of the word. But in social affairs
the relation is more nearly one of force according to the
physicist's use of the term. The physicist can describe
force only as a product of two factors ; or, to be quite ac-
90 THE LIMITS OF SOCIALISM
curate, force to him is simply a ratio, a function of vari-
ables. Force refers to couples never reducible to entities.
So it is with economic and non-economic aspects. We
have never seen them apart. We can only say, as the
phychologist sometimes says, that two sets of events move
in unison, parallel to each other. Whether interaction in
the strict sense of the term takes place he may be loth to
decide. He pleads ignorance and goes ahead confident of
results from his labors. So with the student of social
events. In speaking of their interactions he really has
in mind only coexistences which, in any given correlation,
appear to him as an organic whole. He cannot reduce it
to independent units, though he may picture the parts as
functioning like the parts, say, of the human body. The
picture helps us to understand, to get meaning out of our
words.
But the relation of economic to so-called non-economic
events may be still better elucidated by modern psychol-
ogy, whose conclusions are important for all phases of
sociological analysis.
Three fundamental facts need to be remembered in this
connection. The first is that all objects, not merely the
economic, may act as stimuli. The second is the differ-
ences in reactions by different men upon like stimuli, or
conversely the fact that different men react upon differ-
ent things.
Our environment may be defined as the things we con-
sciously or unconsciously react upon. It is what we re-
spond to in a physical or mental way that constitutes part
of our life, not everything about us in space. Shake-
speare, thus, becomes part of my experience, while people
still alive, but many miles away and in no wise brought in
touch with me personally or indirectly, are strangers that
do not figure in my environment. Again, since our life
INTEPRETATION OF HISTORY 91
is a cycle of growth and decay, it is natural that at dif-
ferent ages different things should enter into our psychic
world. The boy does not see what interests an adult, but
he observes much else that grown-ups overlook. Sex and
age and profession and congenital proclivities aVe deter-
minants of environment psychologically viewed.
But from this follows the individuality of thought and
feeling, and more especially the independence of both from
the external world. Thirdly, then, the effect of memory
and associations stands in no measurable relation to the
objects about us, and furthermore, centrally aroused sen-
sations become more and more important with age and
historical development of races, so that correlations be-
tween economic data and mentality are altogether inde-
terminate. One cannot infer from external facts what
precise value our thought will take. Inventions, e. g.,
start commonly with economic facts, but their direction
depends on memory associations which in their turn are
governed by predisposition, by the laws governing per-
ception, immediate purpose, etc., etc. As the psycholo-
gist expresses it : " It is seldom that an act or thought is
controlled merely by a single stimulus or even by the
stimuli that are being received at the moment of action.
The laws of facilitation and inhibition of one set of cor-
tical activities by others that are going on simultaneously
in other paths and in other areas are needed if we are to
obtain any accurate picture of cortical action," 15 and
that means also of concepts in general. Attitude is a
great deal. Whether the picture in the book looks to me
like a rabbit or like a duck's bill depends on angle of vision
and on subconscious activities within me. The thought of
a seismograph on seeing a crisscross of lines may only oc-
cur to a person after other facts have suggested earth-
is Pillsbury, W. B., "Fundamentals of Psychology," p. 91.
92 THE LIMITS OF SOCIALISM
quakes, as an actual experience has shown. My trend of
reasoning and the direction of discovering vary with pre-
vious training and general interests. This is the over-
whelming evidence of the history of science. Thoughts
have their own history, and their economic ef-
fects are consequents in point of time rather than
coexistences, though the historian expands his con-
cept of simultaneity and thus obtains a comparison
of economic and non-economic events. " The movement
of thought might be regarded as an interaction of pur-
poses and environment, each of which in some measure
modifies the other. At least no interpretation and no
improvement can be considered as a discrete event. It
has its meaning in, and its appearance and development
is controlled by, wider mental and physical contexts.
These serve to determine the nature of the appreciation
and to give the desire that leads to the particular im-
provements. In this way the progress of thought is one
continuous operation. No part can be understood unless
it is considered with the whole." 16
The independence of thought is real. Economic facts
do not make or mold the non-economic, nor must a history
of religion or of jurisprudence be referred to particular
and corresponding economic epochs. Such a cross refer-
ence may form a part of an historical study, but cannot
be essential except in a few cases. The study of legis-
lation regulative of economic relations, including property
relations, is an economic subject, though legislation is a
political function. Politics is the application of the prin-
ciples of sociology and economics toward social better-
ment. In this sense jurisprudence and law are best un-
derstood in the light of economic data, but this is no in-
stance of the economic man making our non-economic his-
, W. B., "Psychology of Reasoning," p. 286.
INTEPRETATION OF HISTORY 93
tory. It shows the possibility merely of studying eco-
nomic relations from two view-points, the individual and
the collective.
5. The Law of Maladjustment The Marxian in-
terpretation of history takes due notice of a conflict be-
tween individuals and ideas, and makes it the basis for a
theory of revolution and progress which is more in accord
with scientific thought than his subordination of the in-
tellectual and moral force to the economic. He an-
nounced the impending doom of capitalism on two grounds,
first because systematic exploitation would ultimately
consolidate all property into the hands of a few who,
while having no competitors to fear, would be faced by
a hungry proletariat that would claim what was right-
fully theirs, and secondly because economic and non-eco-
nomic achievements~and norms tend to overlap at certain
times, the maladjustment growing until a break was in-
evitable, which would restore an adjustment between the
two fields of thought and action. The exact manner in
which this periodic maladjustment is brought about does
not appear to have been described anywhere, but one must
infer that differences arising between new ideas and old
traditions were meant.
In a sociological sense conflicts are ordinarily of two
kinds. Men fight each other in the peaceful way that
modern economics exemplifies so strikingly, or they are
torn by inner conflicts. We either have to contend with
others, or with ourselves. The underlying reasons are
often the same for both cases, but the feeling created is
far from the same. We cannot hate ourselves, though
we sometimes think so. On the other hand it is hard to
forgive our enemies, though there is much to excuse them.
Misery has these aspects. It is objective when disease and
poverty stalk among the masses and make their life a
94 THE LIMITS OF SOCIALISM
burden. It is objective in so far as the economic rela-
tions between men have been regulated by laws open to
inspection. It becomes subjective when we think of one
set of men holding ideas scorned by a second set, the two
quarreling about their rights and duties. And it again
takes a subjective hue when we look into our own self and
find doubt and scruples, ideals falsely focussed, practices
incompatible with resolutions made and cherished.
The law of progress enunciated by Marx is a reflex of
these several forms of conflict, and it agrees partly with
the facts of correlation and causation considered a while
ago. Maladjustment does occur pretty regularly. Per-
haps it would not be wrong to make it a part of human
history as much as reversion is part of evolution. A cut-
ting back is no worse, no more irregular, than a cutting
ahead. Tne recapitulation theory for that reason has
been revised by careful biologists.
Conflict always accompanies control, and is a result of
two sorts of differences between men, namely those that
appear when we compare them at an instant of time, and
those due to afferent rates of reaction and growth cover-
ing a longer j^ej-iod.
The social process is one of interaction between man
and environment. The environment is physical and social,
and for reasons already suggested it may at times be ad-
vantageous to separate social activities into the economic
and non-economic. Physical environments exercise a
great influence over men, and they differ from place to
place. The* environment is chiefly climate, but climate
comprises many factors such as temperature, humidity,
solar radiation, length of day and season, wind pressure
and direction, variability per month and day, extremes of
range during the year, the combination of temperature
with humidity and wind pressure, and so on. The effect
INTEPRETATION OF HISTORY 95
of such variations upon man, and in particular upon
labor capacities, has been carefully studied. That cli-
mate has much to do with temperament is well known.
That literature and art no less than economic achieve-
ments or the nature of scientific endeavors bear testimony
to the influence of climate has also been admitted for many
decades. But it is a more recent opinion that energy and
inventiveness are functions of climate, and that the his-
tory of civilizations is largely one of climatological
changes now hidden from view, but powerful in their
day. 17
Climate is part of latitude and topography, but the
latter has direct bearings, too, on the development of
transportation and travel. Facilities for communication
vary with the lay of the land, with coastal contour and
the characteristics of river and lake systems. Mountain
ranges and plateaus, drainage basins and passes, the slop-
ing of ranges and their passes, these and other features
count in history. They form the outer limits, so to say,
beyond which human will dare not move. What the earth
provides in minerals and timber, soil fertility and water
power, that is a maximum man can seldom ignore. If,
therefore, men live in greatly different physical environ-
ments their capacities and wants cannot correspond favor-
ably. There will arise opposing viewpoints.
Yet it has been to many thinkers axiomatic that malad-
justment is not a product of nature conditions, but in-
stead a social excrescence. Man nmlcps hjyn^plf miserable: '._
he is not made so by nature. The trouble ordinarily
lies then in economic conditions, relative to which differ-
ences in physical environs and in human nature may be
discounted. Men are congenitally very different and will
17 See especially Huntington, F., in his " Civilization and Climate,"
and his more recent : " World Power and Evolution."
96 THE LIMITS OF SOCIALISM
never sympathize with each other on all points. They are
bound to part company somewhere. So also the differ-
ences of climate develop their peculiarities. But we must
assume these facts and, making them our constants, at-
tempt to adapt economic facts and personal relations to
them. An offsetting policy would be always opportune.
If, however, the economic differences in wealth and up-
bringing, in aptitudes and daily occupation, in modes of
living and social control, if these facts, too, separate men,
their interests may become irreconcilable.
And to this source of misunderstanding and friction we
are bound to add the effect of different rates of change in
the several factors, physical, personal, and economic.
The physical environment changes but slowly : so slowly
that, barring earthquakes and floods or such like, it ap-
pears to us stagnant. Only the geologist is interested
in the imperceptible movements that are part of our
earth's record.
But since men are so differently constituted some will
keep abreast of their times, and many will not. The in-
ventive man who helps to reconstruct our economic
mechanism is, along some lines, likely to adjust himself
to each moment, but to the average man the trend of
economic affairs is only a means to greater creature com-
forts, and beyond that a source of annoyances, his habits
being jolted by new demands arising from he wonders
where. However, even the innovator, the man chiefly in-
strumental in translating ideas into a concrete world of
goods, will retain many habits as of old, even when they
are affected by his own scientific contributions. Man is
a unit. Yes. But his mental associations need not
therefore all move on one level. A master mind in science
or merchandising is often a mediocre in his appraisal of
non-professional facts. He has for the first score of
INTEPRETATION OF HISTORY 97
years been under guidance that impregnated him with
ideas not all adaptable to the new conditions which he
himself assists in creating. For one thing some memory
associations antedate our creative life, and that has pro-
found significance for the facts of maladjustment. And
for another thing, even during the creative period of life
men remain conservative in many respects. Ideas move
in groups. Many groups will not be directly involved in
the process of thought filling our professional life. Oth-
ers will be gradually revised, and some ideals as well as
habits will not budge a bit. Thus each man, the most
richly gifted not excluded, may be pictured as keeping
only here and there pace with his outer world. Ideas
radiate changes in many directions, but within us the
change moves more nearly in certain specialized fields.
The realignment of stimuli from the outside, though
forced by our innovations, calls for a wider range of adap-
tation in response and habits of thinking than we are
capable of. The result is a testing within, which may
eventually spell skepticism and revolt, misery objective no
less than subjective. It is again a matter of difference
in degree as between different social groups. None are
altogether exempt from the ordeal.
But furthermore, the lines of cleavage socially are ac-
centuated by the power of custom. Custom is habit
viewed socially. Habit dies with the individual : custom
does not. Custom is opinion preserved and transmitted
from generation to generation, the modifications being;
hardly noticeable, though marked at last. If all men were
equally endowed with intelligence and energy custom would
be less important and conviction more. But as things are,
the norms of a minority are sure to impress the majority,
and Personality survives person.
Habits are standardized. Ideals are habits of thought
98 THE LIMITS OF SOCIALISM
on certain matters. Ideals are norms governing our con-
duct, or tending to do so on the average. These norms
become frequently traditions handed from father to son,
from one age to another. They have been called sanctions
because only by popular sanction can these practices in
thought and action exercise such control over our lives.
Many of these norms are institutionalized in church and
school, family and government, or in business etiquette.
They envelop us from the very beginning and do not
leave us until death. They gather momentum which tri-
umphs over reason. That is to say, just as our strictly
personal views and habits are more or less mobile, some
making for changes in our environment and some failing
to move in unison with them, so social heredity may make
a fetich of norms after they have ceased to correspond
closely with the world about us. Or, to state the situa-
tion differently: Some of our views and habits change
more slowly than others, not only by nature, but because
of the daily impress of authority from without. The
power of parental control should be distinguished from
the control of law or government, and the joint effect of
all must be compared with the associational process con-
stituting our mental life, which for some is so productive
of tangible economic results, while to others it means
little either in creativeness or in feelings of conflict.
If then we speak of being out of harmony with our
environment we mean these three things, first that our
mental development has progressed unevenly in different
directions ; secondly that some of us have grown while
others have stagnated, content to accept matters as they
are, regardless of the demands of the more progressive;
and third, that our fellowmen are to us an objective real
influence in different degrees.
As to this social environment. In one sense the
INTEPRETATION OF HISTORY 99
phrase " social environment " is inapt, for society is a
unit, and from the collectivist standpoint of the sociolo-
gist a social environment can only mean society con-
fronted with nature. But that is not the sense in which
the phrase is commonly used. So it must express an indi-
vidual standpoint. The individual calls all his fellowmen
his environment. But is this a correct attitude? In so
far as all individuals are substantially alike, one cannot
make or mar the other. Nature conditions set real limits
to human striving, but my average compatriot cannot.
Or, at any rate, if he is my environment so am I his.
Hence the term has a dual aspect which may easily be for-
gotten.
Nevertheless does it refer to something very definite in
another sense. For since men are not all equal, since
some exercise lasting influence over others it follows that
much of the average man's environment is the superior
man of talent or genius. To those supermen the social
environment is, in its living members, a minor factor, al-
beit not a negligible one. But to their mediocre contem-
poraries they themselves are major factors, a social en-
vironment in a much more serious sense. The great men
originate and propagate ideas. They prescribe rules of
conduct, even if the observance thereof rests mainly with
the imitators. The supermen alter conditions and often
defy the sanctions. They induce the less gifted to ques-
tion the traditional, perhaps to make sport of long hal-
lowed customs. Thus the course of maladjustment be-
tween social groups is hastened, and finally a movement
becomes visible whose aim is confessedly the assault upon
social heritage. Something like this effect is produced by
migrations. If many millions move from one physical and
economic environment into a very different, they are likely
to receive a shock, because their habits and ideals cannot
100 THE LIMITS OF SOCIALISM
migrate in the same way. They are firmly lodged and
offer a wall of resistance to whatever demands a new
outer world makes. The result is disconcerting, and for
some individuals may spell disaster. The Scotchman's
thrift may look like niggardliness when he migrates from
his inhospitable heath to the fertile plains of America.
The European who is taught to flatter and fawn if he
would succeed, finds his habits unprofitable in a land where
mobility of rank and power is no less understood than the
mobility of labor and capital.
Maladjustment, however, results from innate predispo-
sitions as well as from a conflict of ideas representing dif-
ferent interests acquired during the individual's life.
People are congenitally conservative and radical with re-
gard to different norms of living, or some are predomi-
nantly conservative while others tend strongly toward
radicalism. The conservative clings to existing institu-
tions and customs, and is naturally suspicious of all in-
novations whose practical value is not immediately ap-
parent. The radical is disposed to doubt the goodness of
practices generally approved, but is greatly impressed
with the need of reform along intellectual or moral lines.
The one type seems to build up only harmonious associa-
tions of thought, that lead to further developments of a
line of reasoning, but are incapable of reconstruction into
new valuations ; the other type, on the contrary, means in
professional pursuits a novel selection of data and theo-
ries, with the result that new vistas of thought are opened
up, sometimes perhaps to cause a revolution in science and
economic activities.
The radicals are apt to get the worst of it in the early
parts of a transition period; the conservatives seem out
of place in the latter stages when people have become
sufficiently acclimated in a new environment of thought to
INTEPRETATION OF HISTORY* 101
see the shortcomings of the pas"t: ' "Tite >illacTj<uste<J 'in,
either case are punished for their minority views when the
dominant group of the ruling class objects to them. Im-
prisonment and fines are ordinary methods of chastise-
ment. Or more frequently still we express our disap-
proval by dubbing the maladjusted ones iconoclasts and
rebels, cranks and fogeys, freaks and maniacs. The in-
novator in science and art will be put down as a phantast
or a charlatan until he has found an audience whose sym-
pathy gives " tone " to his creations. In politics the most
defiant of traditions are known as radicals or progressives,
or, as nowadays, they become bolshevists whose teachings
infuriate the standpatter. But not infrequently such dar-
ing spirits have immortalized themselves. They have died
on the scaffold only to be praised in song and oratory
thereafter. As patriots and fathers of their country
some of them have gained undying fame, when during
their lifetime they were but an object for derision and
slander. In all fields of achievement this- turn-about in
valuations has repeatedly come, and it will come again.
The daring business man who at the outset seemed a
crackbrained plunger makes good eventually as pioneer
and founder of a firm. The visionaries and the heretics
who become respectively prophets and saints, the rebel
whose treason inspires later generations, they are all
examples of maladjustment brought about by large social
movements.
6. The Theory of Prosperity. However, though
overlappings of ideals new and old occur continually, this
does not do away in the slightest degree with the reality
of an objective standard for measuring welfare. The
economic interpretation, on the contrary, includes such a
test, and the Marxian view implies it even though the idea
was not anywhere elaborated. Human history, from this
102 THE LIMITS OF SOCIALISM
standpoint, has meant for the most part progress and
social betterment. In spite of recurring periods of mal-
adjustment the trend has been steadily toward the attain-
ment of a higher plane of prosperity. The world is
truly becoming better, and social science, having estab-
lished its norm, may consciously promote the wellbeing of
men. It would be fatal for us to assent to John Stuart
Mill's dictum that " questions of ultimate ends are not
amenable to direct proof. Whatever can be proved to be
good must be so by being shown to be a means to some-
thing admitted to be good without proof." 18 If he were
correct in believing that " the sole evidence it is possible
to produce that anything is desirable is that people do ac-
tually desire it " 19 if this were so, then social science in
a very serious sense had lost its mission.
The failure of utilitarianism as once understood is
clearly presaged in this essay of a mighty thinker. How-
ever, on the one hand, we are convinced these days that
Mill himself need not have rejected the economic tests be-
cause he started with pleasure and pain, and on the other
hand it is not necessary to abjure all personal tests be-
cause of a social approach to the problem.
The objective tests of prosperity may be given first
consideration even if we feel bound to believe in an Abso-
lute such as happiness, pleasure, salvation of the soul, god-
liness, etc. It is essentially a question of coupling a
measurable sort of welfare with the immeasurable. The
concepts of a supreme good which the Asiatics and Greeks
first formulated, and whose history is virtually the history
of all speculative thought, do not lend themselves to meas-
urement. We cannot tell when a man is happy ; we can-
not measure different amounts of pleasure and pain,
is Mill, J. S., " Utilitarianism," Chapter 1.
i Ibidem, Chapter 4.
INTEPRETATION OF HISTORY 103
though the hedonists once hoped to find principles for
measurements. It is impossible to gauge the goodness of
a man if his innermost creed as to world and infinity is to
serve as a criterion. The salvation of the soul may be
the greatest of human achievements and the sine qua non
of peace here on earth, but its roots and course of devel-
opment escapes our vigilance, no matter how we watch it.
Old norms then have failed in the sense that we have not
been able to prove their existence in individual cases, nor
found any means of measuring them and comparing them.
It is not an unreasonable conjecture to make, seeing what
we know of the evolution of men, that the cavedweller was
as happy or as good, in the conventional ethical sense, as
the modern man. But if we compare their respective
achievements and social organization, or if we should be
able to test their respective efficiency and modes of living,
the gains of civilization would stand out boldly enough.
The poorest may be happy and virtuous, if the two words
are defined suitably, but so may the wealthy and pro-
ficient, the healthy and intelligent.
An idiot is guiltless ? Probably. But we do not there-
fore put him on a par with the gifted. The sick are good
and willing? No doubt, but their pains and foibles em-
barrass them nonetheless. The paupers have merry mo-
ments and cultivate their soul? Certainly, but their
distress is real for all that, calling for redress on the part
of a legislator or friend who would add health, wealth,
and efficiency to all the possible kinds of goodness the
human mind has dreamed of. The need of an empirical
&nd economic standard of prosperity is therefore our need
_for a goal, in the attainment of which society at large
"shall rest satisfiedTand strong. The need is for the pos-
session of goods that make possible learning and leisure,
variety of experience and a full mete of self-realization.
104 THE LIMITS OF SOCIALISM
The functions of an economic concept of prosperity
may be illustrated from the relation of art to life. Art
is an ideal as well as a fact taking sens-ible forms.
Art has always been lauded as one of the highest manifes-
tations of reason and genius. The world has produced
much art, and certain nations have excelled in wonderful
creations of music or painting, architecture, literature,
and sculpture. But the criteria of art are elusive. What
is real art and what is banality or shallow imitation few
will decide. Opinions are nowhere more subjective than
in the realm of art where canons change continually.
Art also has no value at a supreme moment, in a
struggle of nations, in the contest between social groups
fighting for power and happiness as they understand
them. The nations most productive of art have had their
ascendancy and their decline. A people totally devoid of
art may easily score a victory over a foe than whom none
has achieved finer things judged aesthetically. The vulgar
view of art, then, is at odds with man's intense desire for
life and supremacy. Art goes for nought when a battle
opens.
The ethical norms, too, may appear inferior to none,
but if they do not issue in appropriate social expression
they leave no impress. Whether a group or a nation shall
live depends on its equipment in peace and war, on its
treasure of goods, their volume and nature, their distribu-
tion and use. He who is healthy has an advantage over
the ailing. He who has wealth is better off than the poor,
if otherwise their lots are equal. He who can do things
is superior to the helpless and ignorant.
But the economic norm of prosperity is social. Only
for large groups of people living together can efficiency,
health, and wealth be tested. Individual training is not
the only factor of importance in the productiveness of a
INTEPRETATION OF HISTORY 105
nation, as history has shown from earliest days on. As
soon as individual self-sufficiency came to an end, as a
result oFT;he economies of division of labor, proficiency
took on a social meaning. Thereafter the usefulness of a
man was shown best when he produced jointly with others.
And so with health and wealth. They count most when
related to communities as a whole, to nations and races.
Wars are won by nations whose social organization per-
mits them, in various ways, to promote the norms of pros-
perity more generally than their opponents are capable of.
Virtue is, at a crucial moment, good citizenship. It
points to the right place for the individual among his
fellowmen whose wellbeing is ordinarily his own. Such
virtues are consequently measurable by particular forms
of conduct. We can tell whether a man has sinned against
the rules of health and efficiency when we have no means
of finding out whether he believes all that's in a cate-
chism.
Wealth in tangible goods is as essential to progress as
it is fit for measurement and comparison. The inherent
ingenuity of man accounts for the first steps toward civ-
ilization, but once wealth was acquired it became a further
guarantee of progress. For surplus means leisure and
JT|nj_pfi.3iTig specialization of workers, ^and this in turn en-
hances social productiveness. Education is impossible
without leisure. The modern forms of research could not
continue if our regular surplus of goods were suddenly to
disappear. Much work would then stop. Production it-
self, however, necessitates also technical cooperation, a
corollary of which is a sense of interdependence and a
social conscience, that is a feeling of worth in our fellow-
men, our rivals or friends. Wealth brings cumulatively
the means of communication which perpetuate knowledge
and help disseminate it among the masses. And since the
106 THE LIMITS OF SOCIALISM
power of our association of ideas varies largely with their
range and character, early training and selection become
important. Thus methods of production stand in some
ratio to existing wealth. We learn to " find " ourselves,
to trace correlation expressive of health and illness. Our
hygienic and sanitary measures are prophylactic as well as
corrective. The general round of wealth, leisure, knowl-
edge, proficiency, health, vigor, and production repeats
itself endlessly. There is no other way of attaining pros-
perity than the economic, though we may translate this
into visions of personal value, into precepts of conduct
sanctioning what the biological and psychological facts
have already urged. The sociologist, thus, will utilize
their data for purposes of understanding social inter-
course in general, but the economist has to add the rides
of production and exchange by which wealth, health, and
efficiency are procured most abundantly.
7. Summary on the Economic Interpretation of
History. To conclude. The economic interpretation of
history comprises several noteworthy points. Fir^fef- the
tracing of a causal relation between economic and non-
economTc events is an idle undertaking because all life is
a unit and all economics the product of a mental unit:
manhimself. The concept of causation is evidence merely
6~F~our penchant for selection and concentration. All
events are interrelated, but it is as correct to write a his-
tory of religion without resort to economics as to record
economic developments without injecting a dissertation
on religion. The precise bearing of one on the other is a
rather personal matter.
In the second-place, the sufficiency of a purely empiri-
cal viewpoint cannot be doubted. We can never do with-
out premises in one respect, but all the attempts of the
INTEPRETATION OF HISTORY 107
metaphysician have presumed upon our credulity by tak-
ing for granted much of what was to be explained and
proven. Socialism has done better, therefore, by con-
fining its investigations to a world realistically conceived
and familiar to all. The materialistic viewpoint has
proven useful, for it has helped us to think of society as
governed by fundamental instincts instead of its being the
pet of Providence.
In the thirdj^lace, maladjustment is a regular part of
life springing from the'veTy^foundations of human nature
w and~its~relation to a changeable environment.. We shall
perhaps never eliminate it completely. For this reason
alone, if for no other, the Marxian aim at a millennium
must lead to disillusionment. Misery, tho best understood
as a social excrescence, is yet something for which science
has so far found no single antidote. We cannot expect a
cure by one step, nor a curing of evils by one means ap-
plied to all times.
In the fourth place^ the facts of biological and social
sciences lead us to the adoption of a utilitarian stand-
point, but utility is then not defined as pleasure or ab-
sence of pain. The norms of welfare are not individual
whose aggregate sums make prosperity for the nation at
large. Our norms, rather, must be objective even for the
individual. Not his feeling's, but facts of health, wealth,
^Hi^*-~ c-i / . ^
and efficiency decide the question. In part individually,
in part socially measdi'able, Llity Tell us what degree of
wellbeing a people has reached, and how it compares with
other social units. Correspondingly virtue is not creed,
but conduct. The test of virtue is not suffering, as the
Flagellants and like-minded folk preached, but service, as
taught by the Christ.
The economic interpretation of history comprises this
108 THE LIMITS OF SOCIALISM
view of goodness and righteousness. It embraces the
whole field of conduct associated formally with ethics, and
logically compels socialism to redefine justice. Pros-
perity is the result of just relations between men, but that
they are just is shown by the objective realities studied
chiefly by economists.
CHAPTER V
JUSTICE
i. The Principle of Differentiation. The founders
of socialism said little about justice, but a great deal
about the evils of an unequal distribution of wealth.
They were interested in the principles of sociation and of
economics, not in abstract questions of right and wrong.
Their works abound in passages criticizing theoretical
positions of an opponent, while to the sentimental plead-
ings of the Utopians they turned a deaf ear. Since then
the attitude of socialists has remained about the same.
They have insisted on an objective treatment of socio-
logical subjects. They have sought to lay bare the foun-
dations of the social structure rather than launch reforms
from a sense of morality or fair dealing. Scientific so-
cialism has endeavored to understand the laws of nature
rather than individualistic concepts of justice and good-
ness.
Yet the definition of justice is a corollary to the eco-
nomic interpretation of history proclaimed by Marx and
Engels, and the idea of a better world in which equity
v should rule for the protection of all is really prominent
in the teachings of socialism. What is popularly sep-
arated from matters of fact as a distinct question of
ethics has been by socialists incorporated with social sci-
ence. Ethics and economics have been fused into one
single topic. There is no way of answering the questions
first put by Marx without reaching also some definite con-
109
110 THE LIMITS OF SOCIALISM
elusions on the ends of government and the nature of
justice.
But the definition is implied rather than stated in so
many words. And again, the modern view of history or
of social processes and of prosperity does away with the
old-time notion of a distinct science of ethics detachable
from social sciences, such as sociology and economics are.
Justice cannot be defined in general terms. To try it is
even less profitable than defining fundamentals in other
sciences. As soon as we seek to embrace all in a single
sentence we lose the meaningfulness of words. They be-
come nondescript and unsatisfactory to all but a few of
the initiated. And to them the broadest definitions are
useful only because supported by a wealth of particulars
held in the background of consciousness.
What is justice? The definition would resemble the
vagueness of definitions on matter and force, life and
space, electricity and motion, mind and value and time.
We define such words, but make mental reservations. Our
ideas change, and we have to redefine. Science changes its
point of view and stresses new facts. The life of a thinker
is a quest for definitions. He would give contents to the
vehicles of expression that the man on the street uses so
lightly. It is the mark of a thinking man that he knows
what his words mean, and differentiates nicely between
their exact meanings. But the largest concepts cannot
be defined so as to have lasting value for science. Jus-
tice may be defined a half a dozen ways without giving us
an idea of its relation to everyday experience. Justice
should be referred to particulars.
There is another approach to the problem of justice
which agrees well with the scientific viewpoint of social-
ism. We may go over all the cases of justice or injustice
that we can remember, and we shall then notice that the
JUSTICE 111
question always turns on a comparison of inequalities.
Life is nothing if not inequalities as to things, and be-
tween men. No two things are exactly alike. This is a
trite saying. Differences are the rule, and resemblances
are only of a degree. In physical environment, in the
characters of men, and in the institutions of society the
fact of inequality attracts our attention.
The world's resources for instance are very unequally
divided between nations, some having an abundance of
mineral and good soil, and others practically nothing of
either. The Eskimo might compare his fate with the
Frenchman's or American's, and bewail his fate. Or the
Patagonian might gaze with envy upon the riches be-
stowed by nature upon his northern neighbors in the Ar-
gentine. Races in prehistoric times settled in different
parts of the globe, or migrated several times since then.
They cannot be said to have chosen their abode with an
eye to resources excepting fertility of soil, for the kinds
of wealth which are now prized most highly were then un-
known as an instrument for progress. It is chance that
gave to some great resources, while others were allotted a
meager store of bare necessities.
So with the differences among humans. Sex itself is a
differentiation of far reaching import. We might com-
pare the characteristic activities, the burdens and privi-
leges, of male and female and find much that seems unjust
in a sense. At times we have been so told. Or there are
race traits to compare ; the superiorities of a white man
over the Hottentot and the mode of living which, in part
resulting from these differences, drives the two groups far
apart. History is colored deeply by racial characteris-
tics. It is folly to overlook them in a larger survey.
And what of the inborn differences traced to heredity or
to variation ? What of the strong in body and mind, and
THE LIMITS OF SOCIALISM
the frail? What of the subnormal and the super-normal,
the types of personality that are to be met everywhere in
life? The variety is bewildering and is said to lend charm
to life. Probably so. But the fact of such differences
remains and cannot be attributed to any particular, meas-
urable action of those possessing the advantages or the
handicaps. We simply accept the differences. We know
that some are born lucky and others unlucky. We know
that some will struggle throughout life without achieving
anything unusual, while others will succeed virtually with-
out effort. We know that the pretty girl is surrounded
by admirers and looks forward to all sorts of blessings,
when her less comely sister is left to walk alone. We know
that some will work creatively and reap rewards, while the
less gifted but perhaps more industrious will live in pen-
ury, forgotten and cheerless.
History is itself a record of differences sometimes ap-
palling to behold. What cruelties and hardships have be-
fallen millions of innocent people ! We read of catas-
trophes wiping out the lives of thousands. We hear of
cripples and the demented, or of miserable wretches
stricken with loathsome diseases. We read that an ex-
plosion has killed so many miners in a second. We think
of the wars that have killed and maimed hundreds of
millions for no reason except that life seems to be a battle
in which some fight and suffer more than others. We
turn the pages of a History of the World and are im-
pressed with nothing so much as with the inequalities of
men and their fates. And many have endured horrible
pains. Indeed, one might add that the path of human
progress is strewn with the wrecks of men and women who
suffered without guilt. Some were put to horrible tor-
tures or consigned to the flames. Some were immured
JUSTICE 113
alive or flayed to death. Some died on the rack, and
others were butchered as a sacrifice to false gods. Many
perished from famine, and others again fell a prey to wild
beasts. If differences as such are to count in the problem
of justice, why should we not muse over the mysteries of
Fate that let some live amidst the comforts of the twentieth
century while the great majority lived a coarse struggling
life in the earlier stages of human development? As the
believer in justice sees it, these differences form a dis-
enchanting chapter in the history of the world.
And yet this is not all. For we have still two other
types of disparity to remember, to wit, the socio-economic
stratification, and the suffering of the innocent for the
guilty.
As to the former, the evidence is about us abundantly.
It forms the chief theme of reformers, and is a cardinal
point in the program of socialism. The world's goods,
they say, are too unevenly divided. Some are born rich
and others never save a penny. Some toil but remain
poor, while others bask in affluence without turning a
finger. As goods are distributed, so are the pleasures
and privileges that money can buy or that it procures in-
directly. It is for some to walk in the best of society
however understood and to shape the destiny of mil-
lions, while the multitude follows and sees little of what
their age represents. Some will shoulder burdens to re-
lieve others who tread lightly and carefree. In a war,
for instance, one group goes to the front, perhaps never
to return, or worse yet, to return crippled and helpless.
But another group stays at home because its services are
needed there, or for some less pressing reason. The stay-
at-homes may be getting their deserts, but note that they
live in comforts and grow rich while their compatriots go
114* THE LIMITS OF SOCIALISM
into a living death. And often the brave are slain, and
the pretenders thrive. How common indeed that heroes
are buried by hypocrites !
The innocent also get the worst of it when the offender
goes scot free. We see defenseless nations insulted and
abused by unscrupulous neighbors, by the Goliaths who
are itching for a fight. We see a neutral nation pay for
the follies of the combatants. We see a whole nation suf-
fer for the wrongs of its government which after all is
not truly representative. Or perhaps the children pay
for the sins of their fathers, or we must make good the
losses incurred by careless friends.
All this and more is common knowledge. The inequali-
ties have always existed and must be expected to recur on
general principles of induction. We cannot eradicate all
of them. There are some beyond our control, as well as
others that we may consider the expressions of will on
the part of men.
We shall have to discriminate but we shall also feel
compelled to admit that life without inequalities is un-
thinkable. The task of the reformer is not the uni-
formization, but the coordination of specialized forms of
living so that the largest number of people may live in
relative peace and contentment. Not a leveling for its
own sake, but leveling with a view to progress, this is the
task before us. To level rights and duties for classes of
people rather than for all people, this must be our aim.
Differentiations are the prime characteristic of life, and
the price of evolution. We cannot abolish them. But
we can divide society into groups with specialized func-
tions, and then assign to each its burdens and privileges.
Equality for all in a given class, such leveling is feasible.
Equal rights for all members in a certain occupational
class, or of an age group, or per sex, or relative to civic
JUSTICE 115
status, and so on. This is the sort of uniformity com-
patible with economic advancement and urged by our ob-
jective norms of prosperity. All self-imposed or socially
induced forms of pain should be eliminated.
2. The Nature of Justice Such a view of equaliz-
ation suggests also several negative answers to the prob-
lems of justice. It is clear, for instance, that the promise
of heavenly rewards cannot hush the protests of the un-
lucky, for according to this promise the fortunate here on
earth will fare equally well in the hereafter. Where, then,
is the logic of inequality during this life?
Again, justice cannot be called rightly an institution
of nature, as was held by the ancients and by philosophers
since. This idea that nature is peace and happiness, and
society a decline and fall from virtue, is pure superstition,
however revered it may be by some who are more influ-
enced by religious promptings than by facts. There is
nothing to show that the jungle life is more pleasant than
ours. On the contrary, we have proof of its being every-
where a harsh struggle, and most so among the brutes.
Nature has not set the table for men. What they want
they must for the most part earn. Life is a battle, not
a frolic and minstrel show. The naturalistic view of
origins of injustice is as fanciful as its conclusions on the
founts of constitutional government.
In thethird place, we may also be sure that norms of
equity cannot be based on mere intuitions. No more
than men by nature are altruistic are they capable of
distinguishing between right and wrong. The history of
morals, which has been studied by many men with great
diligence, shows the relativity of ethical norms and the
immense variety of conceptions on right and wrong. At
different times different codes of conduct have arisen.
Any one who observes has profited in this respect from his
116 THE LIMITS OF SOCIALISM
travels. We see much dissension among people on identi-
cal points. Customs vary, and laws reflect the economic
setting of officially sanctioned demands for justice. Laws
cannot be understood to make justice, for what is held
just at one time may become unsatisfactory long before
the lawmaker adapts himself to the change. This phase
of maladjustment has been discussed in an earlier chap-
ter. Laws do not create justice, but they give evidence
of norms accepted by people as right or fair. Law is a
derivative whose original is science or the mores or the
standard set by exceptional men.
Justice, then, is this one positive thing, whatever else
may be said about it: Justice refers to human institu-
tions and to facts of life unknown to barbarism. Justice
is an ideal presupposing a reasoning man, a willing being,
a responsible being. Justice is for thinking men on an
advanced level of living. Only when somehow we be-
lieve ourselves as individuals capable of willed action, only
when we possess the ability to foresee certain events or
to master a set of relations, only then are we fit to de-
velop a notion of justice and to govern ourselves accord-
ingly. Justice is a general policy comprising actions
suited to reason and responsibility. The things we can
control become subjects for reform. The facts utterly
beyond our guidance we leave out of the equation. Jus-
tice always is a social norm that deals with the relations
between thinking and striving members of a large whole.
That is just which subserves the end of the largest possible
number, after the end has been defined according to the
dictates of social science. Justice is an ideal of social
relations and of aims varying with times.
" Right," the author of * 4 Folkways " informs us, " can
never be natural, or God-given, or absolute in any sense.
The morality of a group at a time is the sum of the
JUSTICE 117
folkways by which right conduct is defined. Therefore
morals can never be intuitive. They are historical, insti-
tutional, and empirical." * The just act is one which is
conducive to the welfare of the largest possible number,
welfare having previously been rated by the economic tests
compared to which all other norms are subjective and in-
capable of measurement. " The problem of morality is
the formation, out of the body of original instinctive im-
pulses which compose the natural self, of a voluntary self
in which socialized desires and affections are dominant,
and in which the last and controlling principle of delib-
eration is the love of the objects which will make this
transformation possible."
We repeat, justice has connotations of reason and re-
sponsibility socially utilized. Irrational people cannot
be expected to deal squarely with their fellowmen. Or,
since this test of reason itself is the power of coordinating
efforts, we had better admit that justice is reason, and
that the objective tests of social welfare furnish the best
proof for the existence of either. When society pro-
gresses and th,e need of the average man is reflected in the
strength of the larger unit, then justice prevails. It is
justice in the long run, in large categories, in vital affairs
that matters. Sacrifices of self and of detail is insepar-
able from justice properly conceived. " Justice may be
defined as such an adjustment of the conflicting interests
of the citizens as will interfere least with, and contribute
most to, the strength of the nation." 2 The might of the
many, measured in terms of health, wealth and efficiency,
is the sole available proof of the general prevalence of
justice. And in a struggle between different social groups
or between nations it will appear soon enough as to where
iSumner, W. G., "Folkways," p. 29.
2 Carver, Th. N., " Essays in Social Justice," p. 9.
118 THE LIMITS OF SOCIALISM
justice has asserted itself most completely. There are
degrees of justice from the social standpoint, whatever
our opinion about justice in a particular. We may con-
sider a man either right or wrong, a verdict either just or
unjust, disdaining to bicker about shades and shares.
But since justice is for individual cases and since life
comprises so many duties and rights it is inevitable that,
while in some respects we are just to each other, in others
we are not. The ideals of politics and economics center
about such weighing of pros and cons, our choice finding
expression in social structure and economic or military
power.
Grant the will-to-live, and you must grant the worth of
social strength. Grant reason in man and you will want
to hold him responsible for his action. Grant norms of
conduct however evolved or formulated, and you will con-
sult them before long when passing judgment on par-
ticulars. Will is assumed as a means of eliminating the
unfit. The freedom of the will is a tactical device by
which we can compare the good with the bad and endeavor
an adjustment of conflicting wishes. 3 Will is basic to
justice, just as the law of averages is back of our notion of
the ought. But will, the psychologist knows, is the sub-
jective aspect of a condition as suitable for examination
as the facts of motion. To say that one ought to do a
certain thing merely means that as a rule such acts will
prove beneficial according to definition, or that out of a
hundred men, put in a given situation, a certain per-
centage would act as the particular one " ought to."
What the majority does conformable to the needs of so-
ciety, to needs that sometimes are objectively verifiable
3 Mill, J. S., in his "Logic" (Book Six, Chapter 2, No. 2) gives
a definition of determinism which seems still the most lucid and
comprehensive of many offered by logicians.
JUSTICE 119
and measurable but at other times are accepted by rea-
soning from analogy without careful testing, that becomes
moral. The injunction to act, the assertion that a
certain thing ought to be or ought to be done, rests
on a belief that in most cases justice will thereby
triumph.
The much mooted topic of motives versus results loses
its vexatious character when treated as a matter of aver-
ages. If, e. g., I am instrumental in a child being run
over through my attempting to save it from that very
fate, the result is taken to be an exception to the rule.
Extenuating circumstances will be pleaded because I acted
in good faith, i. e., with the intention of saving the child
from impending danger. It will be argued that in most
cases such a policy on my part brings good results, and
that consequently my failure in a particular instance is
a contingency to be reckoned with. The principle is
deemed more vital than any one application of it, be it
successful or not. Thus the law may condemn me, but
my sin is pardonable in the eyes of most witnesses. Leni-
ent treatment will be urged.
Motives, therefore, assume a moral aspect only in the
sense that they are forecasts of events which in them-
selves are either social or anti-social. If the former,
motives are excusable though leading to undesirable re-
sults in one instance; if the latter, motives are repre-
hensible though leading accidentally to good results. Mo-
tives in this respect are like efforts spent in doing a piece
of work. I may work hard and get results not com-
mensurate with my efforts and unsatisfactory by ob-
jective tests. My reward will agree with the net result,
not with the labor expended. But in the long run, it is
true, a man is the more likely to accomplish great things,
the harder he tries, the more tireless his striving. Hence
120 THE LIMITS OF SOCIALISM
it is not unfair or illogical to rate men somewhat by their
tenacity and diligence.
3. Justice and Competition If we apply this
maxim of average results and of reasoning by analogy,
for an individual act, to the relation between religion and
economics, or of might to right, we shall be able to solve
what otherwise may appear an unsolvable proposition.
It has often been argued that Christianity, for instance,
is irreconcilable with economics or with common practice,
and similarly that socialism is incompatible with religion.
However, the antinomy is not one given by two contrast-
ing viewpoints, but rather it results from one-sided in-
terpretations and abstractions.
The Christian creed is of course a mixture of many
tenets not all of which belong to the Gospel as
originally preached so far as historical investigation has
been able to ascertain. We have the eschatology and the
golden rule, the one chiefly, though not entirely, developed
after the death of the founder of Christianity, and the
other antedating even the advent of the Christ.
The preachings on a .monotheistic world order, on an
absolute God, his fatherhood, and the endowment of man
by God with faculties of reason and with infallible intu-
itions of right and wrong, these teachings which are
grouped about the doctrine of an immortal soul and re-
demption by proxy may be conveniently detached from
the moral code. The Sermon on the Mount has a value
independent of the theological superstructure. The idea
of a forgiving father and of a final court of appeal above
human jurisdiction anchors deep in the human breast.
It will be true in all ages that the leveling of rights as
preached in the brotherhood of men has salutary social
effects. It is an axiom, also, among scientists that their
own conclusions are subject to error and to occasional
JUSTICE
correction, and that all inquiries of the mind have limits
beyond which men may still hope and aspire to unknown
things.
But on the other hand, the moral precepts of all great
religious teachers have been one-sided. They have looked
to only one out of several relations existing with regard
to any problem. Thus the precepts of Christianity are
bold abstractions from concrete instances. They are the
fruit of reasoning by analogy. For instance, it is good
to treat others as we would treat our own self, but, to
begin with, human nature is not altogether of that in-
clination, and in the second place a rigid regard for this
ruling would lead not infrequently to self-effacement. Bi-
ologists are not sure that evolution could have operated
exclusively on that principle.
The way out of the apparent conflict between religion
and reality is not a campaign for changing human nature,
but a return to other facts in the situation, and to a re-
construction of our religious beliefs. There is a social
basis for religion. In the measure that our abstractions
are reconverted to the concrete conditions whence they
sprang shall we succeed in uniting theory and practice
without destroying the social fabric. Economics, for in-
stance, will be able to adopt a collectivistic viewpoint
without ceasing to be scientific if it abandons some of its
problems which an earlier age, before natural and social
sciences had far progressed, had set, and if it subordinates
ethics to social science instead of borrowing from meta-
physicians. The stand taken by classic economics to-
ward questions of morality, which once were associated
with metaphysics, is responsible for the seeming heartless-
ness which some critics detected in professional economists.
It made John Ruskin say : " I neither impugn nor doubt
the conclusion of the science [he refers to economics], if
THE LIMITS OF SOCIALISM
its terms are accepted. I am simply uninterested in them,
as I should be in those of a science of gymnastics which
assumed that men had no skeletons." It elicited from
Carlyle the characteristic exclamation : " All this Mam-
mon Gospel of Supply and Demand, Competition, Laissez
Faire, and the Devil take the hindmost, begins to be one of
the shabbiest Gospels ever preached, or altogether the
shabbiest." 5
The " economic man " was somewhat of an abstraction,
but even more so is the definition of justice and of the ul-
timate good whose study the economists wished to leave
to another line of thinking.
Competition need not be what the " dismal science "
made it. It need not incite the admirer of the Christian
creed to the thought that " competitive industry and
commerce are based on selfishness as the dominant instinct
and duty, just as Christianity is based on love." 6 If
the fault were as grave as pictured, if " our whole socio-
economic structure rests theoretically upon the appeal to
the selfish ," 7 then socialism would logically be the only
alternative to individualism.
It may be so anyhow, though for different reasons.
But recent interpretations of fair competition have sug-
gested a way out, and the conception of the Ought as an
estimate of average results desirable to society as a whole,
does a similar service.
Competition has by the courts been considered fair
when, first, the inequalities between competing parties are
* Ruskin, J., in his " Unto This Last."
s Carlyle, Th., "Essays, Past and Present: The Working Aristoc-
racy."
e Rauschenbusch, W., " Christianity and the Social Crisis," p. 310.
See also the same author's " Christianizing the Social Order."
7 Murdoch, J. G., " Economics as a Basis of Living Ethics," p.
47.
JUSTICE
natural, as for instance the innate differences of ability
and temperament, or when secondly, the differences arise
accidentally, as at the outbreak of the war, which gave
some dealers a great advantage over those not stocked up
with European products ; or in the third place, when the
differences are not sufficiently great to make the result of
the struggle between rivals a foregone conclusion, or
when, in the fourth place, the price and quality alone de-
cide in the sale of goods ; or when, finally, goods are mar-
keted by rivals at a price which generally speaking yields
a profit permitting of a continuance of business.
To define competition as " fair " under such circum-
stances is to admit the impossibility of equalizing all facts.
It does not dictate an abandonment of the principle of
striving among producers and consumers, but it hints at
limitations that in the long run safeguard both competi-
tor and the public.
Some sort of inequality and hence of injustice, as popu-
larly understood, is bound to linger among us. Right
cannot be right to all contending parties. Might always
exists, if by that term we mean the superiority in some
respects of force over mere good will, or of law over com-
mon sense.
4. Might versus Right. But if we inspect the mat-
ter of might versus right more closely we shall find that
might means nothing except by reference to something
else. Might may mean either muscular strength or me-
chanical power, or such brain powers as are exercised in-
dividually or by dint of social organization. If the force
is physical the individual ordinarily is the active agent,
as when pugilists settle a question of superiority. Na-
tions also fight, though armies nowadays represent much
more than skill or muscle strength. In all such cases
might may consist of physical force only, and it deserves
THE LIMITS OF SOCIALISM
mention that ultimately all other values will stand or fall
according to the issue of a physical combat.
But manifestly such struggles have nothing to do with
social values unless we first posit the latter as occasion for
the former. Might strictly speaking is right only when
a predominating opinion cannot be upheld by physical
force. In that case our disappointment is voiced in the
remark that might has triumphed over right. When ex-
pert opinion is defied, or the will of the majority is dis-
obeyed (particularly on the confession of the offender
himself) then his exercise of physical power is reproved.
Might is right, therefore, when the majority sanctions
the force used to uphold its views, whether science sup-
ports public opinion or not ; or when in the absence of any
social values physical force alone governs ; or when, in the
third place, approved norms of conduct prevail indepen-
dent of physical coercion. In the long run the will of the
majority, however inspired, carries the day. Right, con-
sequently, must triumph as a general rule even though for
groups of people and for limited periods of time condi-
tions may be at variance with public opinion.
The law of approximations and of averages thus
equates the two sides of right and might for the same
reason that it brings into logical relation the fields of re-
ligion and of social science, or of economics and of ethics.
There is no impassable gulf between socialism even as
taught by Marx and the religious beliefs. It is not
necessary to oust competition from the field of economic
endeavor. But on the other hand it is doubtful whether a
categorical exclusion of the collectivistic standpoint from
economic science will further the interests of economics
itself. Justice must be socially conceived and measured.
Socialism has first called attention to the need of such a
JUSTICE 125
gauging of right and wrong. The future development of
social science seems bound to fuse ethics and economics
into one single problem, so that people will more nearly
than at the present be in accord with scientific conclusions.
CHAPTER VI
THE LIMITS IN PRODUCTION
i. National Income and Consumption of Goods.
TJigjiath-to progress is through plenty. There is no way
in which the condition of the average man can be bettered
except we raise his income first. Whatever the limita-
tions of mere wealth may be, if we have no wealth, if man-
kind lives uncertainly from hand to mouth, everything else
will also be lacking that is typical of a civilized state. All
history so far has forced us to take this attitude. Hu-
man development from beginning to end has been a piling
up of economic goods the consumption of which has been
accompanied regularly by advances in art and science,
in speculation and moral judgments.
It is then no trifle if socialism declares to have found
a short cut to wealth. If it is true that national in-
come may be greatly increased by abolishing private prop-
erty we should favor the revolution even though it entail
much personal effort and sacrifice. If, as an eminent
socialist leader avers, " the transformation of the capi-
talist system of production into the socialist system
must inevitably result in a rapid increase of the quantity
of wealth produced " * an important question is happily
settled. The raising of the general level of living is the
concern of all statesmen and reformers. ^Nothing is so
palpably desirable as a doubling of wages, if by it we mean
a doubling of the average person's purchasing power./
I. ,*/
1 Kautsky, K., " Class Struggle," a running commentary on the
Erfurt Program of the German Sozial-demokratische Partei, trans-
lated by Bohn, W. E., p. 145.
126
THE LIMITS IN PRODUCTION 127
Socialism hopes to accomplish this miracle in two ways,
namely first by augmenting the national aggregate of
goods, and secondly by changing the ratio in which neces-
sities and luxuries are now commonly turned out. The
first is no doubt the more important step in the long run,
but the second could be attempted at shorter notice.
And it deserves mention again that this change is to con-
cern, not the monetary values in which we now measure
wealth, but the latter itself, that is the amount by weight
or volume of the goods that enter into the market. Let
the tons or quarts or cubic feet of consumables be doubled
or tripled, that is the proposition before us.
We may introduce the nature of this problem by making
a distinction between consumables and non-consumables
which also figure in the national dividend.
People have often referred to the income, in dollars
and cents, of the American nation, with the idea of show-
ing how the average man would fare if the principle of
equality were applied. It has been pointed out that, on
such a basis, the laborer would have perhaps twice as
much as he enjoys to-day. If the total national income
in 1918, for instance, amounted to $75,000,000,000 and
we assume a population of one hundred million, then the
per capita income averaged $750. For a family of five
that would mean $3,750, a sum certainly not earned by
most families, though enormously below what the richest
can boast of.
Such a view, however, is from the very outset mislead-
ing because a nation's total annual output of goods is not
so to be divided. There are three kinds of funds to be
taken into consideration, only one of which becomes avail-
able for personal use. ^PfeeJIcstJs the fund needed to re-
place capital goods worn out in the process of production,
or otherwise subject to deterioration. The second is our
128 THE LIMITS OF SOCIALISM
savings fund which normally swells our national wealth
and makes industrial growth as well as a rising level of
living, that is a rising fund of consumables, possible.
Ajid the third onljk. namely the consumables just alluded
to, constitute the real income which people have in mind
when wishing for greater riches. A loaf of bread is part
of my consumables. The service rendered by actors
whose art I see displayed on the moving picture screen
is another such item of income for personal use. Many
properties held by governments, though used collectively,
serve the same purpose.
But the replacing of capital used in the production of
consumables does not gratify me in the same sense, nor
is the surplus devoted to the enlargement of capital a
genuine part of my income. They are merely means to
an end which, at last analysis, is national development.
The relative size of the shares varies with the economic
resources of the country, with its stage of economic de-
velopment, growth of population, habits of living, etc.
A land richly endowed with resources can evidently main-
tain a high level of living and yet set aside a large sur-
plus. A country poor in resources may save a relatively
large portion of the total income by consuming little.
Frugal habits may lead either to a rapidly growing popu-
lation, or to the accumulation of an investment fund
which may be placed either abroad or at home. If re-
sources are lacking it is not likely that the surplus will
be large, nor that it finds employment at home. In gen-
eral the surplus is the larger the greater the total na-
tional income, and the replacement fund will grow of
course more or less proportionate to the growth of in-
vestments. In " young " countries where resources are
plentiful and labor scarce the level of living will be high
if reckoned by foodstuffs, but low by other standards.
THE LIMITS IN PRODUCTION 129
Capital will be imported, that is machinery and ideas will
be bought at a high interest rate. The interest will be
paid in rawstuffs and rights to natural resources, or the
payment will be postponed until suitable consumption
goods can be added to the export of raw materials. In
such countries the investment fund will grow more rapidly
than the flow of consumers' goods, while advanced stages
of economic development usually mean a relatively large
fundof consumption goods. Legislation, however, may
regulate the ratios somewhat so as to promote the in-
terests of the largest number. It is possible to neglect
the cultivation of the soil in an endeavor to multiply in-
dustrial goods or personal services. In the United States
the recent trend has been toward a rapid industrializa-
tion of capital. The farmer received probably less than
his share. The consumer consequently could not keep
as good a table as formerly, though he gained in other
directions. It is for the government or the individual
to decide which is th^moye preferable/ cheap food or a
variety of industrial goods ancTbT services.
Socialism will no doubt decide in favor of foods before
investing heavily in the industries. The aim of socialists
is to raisethe income of the poor. If then to return
to our little problem we must deduct some fifteen bil-
lion dollars a year for replacing worn out capital and
expanding business we get instead of $750 per capita
only $600 annually in consumables. To raise this, so
that the masses will have what ten per cent, now get,
means not only to increase the national aggregate, but .
jajsojbochange tne ratios of investment, replacements, and
consumption Tunds irT" some measure. This socialism
hopes to do. It will try to better conditions by substitut-
ing necessities for luxuries as well as by adding to the
total.
130 THE LIMITS OF SOCIALISM
2. What Determines National Income Now pro-
duction depends on three factors, namely, on natural re-
sources, labor-supply, and efficiency. It is by whatever
changes will occur in these factors that socialism will bring
about the betterment of income. If it can add to our re-
sources, if it can increase the stock of labor-power either
by adding to the number of workers or by lengthening the
work-day, and if in the third place it can make men more
proficient, whether as individuals or as cogs in a great in-
dustrial machine, then its promises of a higher level of
living may be fulfilled. If not, the promises can mean
nothing.
The answer to our question is not, however, easily
given, for the data at hand are extremely limited and not
always reliable. It is only with reference to the labor
supply that our information is approximately correct.
Possible gains or losses in social efficiency cannot be de-
duced directly from statistics on education or health or
socialistic programs, and the effect of socialism on natural
resources can be stated only negatively.
It is certain that socialism cannot produce natural re-
sources. It can only look for them and then use them.
But since socialists have not claimed a greater ability in
locating resources than our experts possess now the chief
question is that of using them.
The producer distinguishes between physically existent
resources and those he can exploit at prevailing prices.
He will not work a mine if the vein is too thin or the ore
of low yield. He will keep his property but wait for
rising prices. When demand has increased and prices
rise faster than expenses he is likely to reach for his
reserve stocks. He will work less rich tracts of land or
deposits of coal and ore if he has to, provided his own
profits are not diminished materially. This principle of
THE LIMITS IN PRODUCTION 131
diminishing returns governs all production and is re-
spected by socialists.
On the other hand they urge that much land and other
riches are withheld that should be used now. They argue
that to increase these stores is part of their program, and
that they will enlarge our resources in the sense that they
will not wait for profits as the capitalist undoubtedly
does. Let us grant the proposition and add temporarily
ten per cent, to our productive power by this route. Yet
it deserves noting that the gain will be only temporary.
For competitive principles will make an end of specula-
tive reservations sooner or later. In Europe the idea of
^ waste through disuse could hardly come in question. In
thlPTJmtect states, indeed 'throughout the world, the
tendency is steadily toward exploitation of what is in
sight. Either, therefore, the gain has been of brief dura-
tion or we face the still less pleasant fact that we may
hasten development unnecessarily.
Socialism deals with long stretches of time. It is not
interested merely in the immediate future. It will not
care, therefore, to raise our level of living by working
resources at maximum speed, if as a result of this policy
the stock is exhausted the sooner. Yet this has happened
before, and may happen again. The world's mineral
stocks, notably, are only theoretically inexhaustible.
They appear endless when they are not. It is not ad-
visable to use them up prodigally when we know that they
are unreplaceable. Substitutes cannot always be found.
The depletion of our natural stores is a piece of folly
that no one will encourage, socialists least of all. To
have a nation grow rapidly is a questionable advantage,
since the law of decreasing returns obtains everywhere.
It is possible to develop power and prestige at the expense
of posterity. To skim from the top has been a tempta-
132 THE LIMITS OF SOCIALISM
tion for many settlers of virgin lands with riches beck-
oning on all sides, but ere long the exploiting nation pays
the penalty. Socialism, precisely because it sees far
ahead, will discountenance ruthless exploitation and will
husband our resource?.
A gain in natural resources is therefore not well pos-
sible. If income is to be raised 4t-.will be by. changes jn
labor supply and its efficiency.
| 3. Effects of Age Distribution on Production. But
before passing to a consideration of such changes in the
amount of labor-power which socialism may bring about,
let us see what important features of population social-
ism cannot directly, nor perhaps indirectly, affect. It
will teach us to appreciate the uncontrollable factor in
population, while otherwise we might exaggerate the
powers of socialism.
Different populations show very different distributions
of age, and this is important because not all ages are
equally productive. Rather, we may divide life into sev-
eral periods according to their economic productiveness.
The first ten years, e. g., represent a clear loss, for at this
time the child consumes without producing anything. In
the second period, say from the tenth to the twentieth
year, it begins to produce, but less than it consumes.
There are of course exceptions, and besides it is difficult
to rate productivity as soon as we refer to values-in-ex-
change. But roughly a balance between income and out-
go, between what is produced and what is consumed, may
be struck. Let us then call the third period from twenty
to sixty or seventy years the most valuable for the nation.
In these years the average man produces more than he
consumes, and certainly much more than the biologically
necessary things. He raises his income by raising his
productiveness. It is the time of rearing children and
THE LIMITS IN PRODUCTION
laying aside savings for a rainy day. Production some-
where between thirty and sixty years of age is at top-
notch. After the sixtieth or seventieth year we note a
TABLE Two
AGE DISTRIBUTION IK THE POPULATION OF DIFFERENT COUNTRIES IN
1910
(Distribution in Percentages of the Total Population)
Countries
Ger-
Austra- United
Age Periods
U.S.A.
France
many
Austria
lia
Kingdom
1-10 Years
. . .22.2%
17.2%
23.1%
26.3%
41.1%
20.7%
10-20 Years
...19.8%
16.6%
20.3%
20 %
19 %
20-30 Years
.7. 18.7%
15.9%
16.3%
15.4%
32 %
8.9%
30-40 Years
.,,,14.6%
14.8%
15.2%
12.6%
16.1%
40-50 Years
...10.6%
13.6%
10.2%
10.5%
18.8%
13.3%
50-60 Years
... 7.2%
10.5%
7.7%
7.7%
9.7%
Over Sixty
Years
69%
12.4%
7.2%
7.5%
7.7%
6.4%
Total Population "'//
in Millions
...92
39.2
65
28.5
4.45
45.4
Note: Age-Periods for the United Kingdom are the following:
One to Ten Years; Ten to Twenty Years; Twenty to Twenty-Five
Years; Twenty-Five to Thirty-Five Years; Thirty-Five to Forty-
Five Years; Forty-Five to Fifty- Five Years; Fifty-Five to Sixty-
Five Years; Over Sixty-Five Years.
Reference: Statistical Yearbooks of United States, France, Ger-
many, Austria, Australia, United Kingdom.
decline. The curve of productiveness falls visibly. Man
once more becomes a deficit producer and eventually de-
pends entirely upon others for his living. But consump-
tion of course drops off also.
Now Table Two is designed to show some striking dif-
ferences between such powers as the United States and
Germany, and smaller nations like France or Austria
on the other hand. The size of the population is not
however the point in question. Rather, it is the effect
134 THE LIMITS OF SOCIALISM
of net birth-rates and of migration. It will be noted that
the first two nations mentioned boast a large percentage
of young ages, while their proportion of advanced ages
is relatively small. In the United States immigration was
always a dominant factor. In Germany the natural in-
crease counts most up to 1900, and after that decreas-
ingly so, while immigration increases. The period of
twenty to forty years is well represented in both countries.
Labor is cheap relative to resources, and there's enough
to make rapid internal development possible. /Powers
grow great and rich when the demographic pyramid
bulges at the bottom and is contracted at the top, for then
the surplus producers or, from a given time standpoint,
the prospective surplus producers provide an ample in-
vestment funcT) The condition of France and Austria
is serious. France suffered most through a decline of the
birth-rate; Austria through emigration. Her best men
left in the prime of manhood. No nation can easily off-
set such a drain.
There is no need of developing further this point. The
differences of age distribution are sufficiently wellknown,
but they are recalled here as significant by comparison
with such changes in the labor-supply as socialism may
at will bring about. The factors not so controllable in-
fluence the supply at least as much, and possibly more.
| 4. Possible Increase of the Labor Supply. The
possibilities of socialistic readjustment are tabulated in
Table Three. The estimate is of course only a rough one,
for statistics are not always on a strictly comparative
basis. There is plenty of room for error. Classifica-
tions do not correspond exactly, and the statistical serv-
ice is not for all countries equally reliable and complete.
But so far as the numerical changes in the labor supply
are concerned the appended table is suggestive. It shows
THE LIMITS IN PRODUCTION
135
TABLE THREE
Possible Changes in the Labor Supply of the United
States for the Year 1910, according to Socialistic
Standards
(References: Thirteenth Census of the United States, Census
Bureau, Volumes on Population and on Occupations.)
A. NUMBER OF GAINFULLY OCCUPIED AND NON-OCCUPIED IN 1910
(Millions omitted)
Total population 92
Gainfully occupied 38.2
Not gainfully occupied 53.8
Of these were:
Married women 16.1
Children under 20 years 31.2
Females over 65 years 2.1
Males over 70 years 1.1
Youths attending school
over 20 years of age 0.6^
Widows under 65 years 1.6
Inmates of benevolent in-
stitutions 0.6
Inmates of prisons 0.1
Idle rich, etc 0.4
after deduction
occupied.
of gainfully
B. CHANGES IN LABOR SUPPLY CONFORMING TO SOCIALISTIC
STANDARDS
(Millions omitted)
Losses
1. Abolition of work for
children under 20.
(Count their efficiency
at one-half) 3.7
2. Pensions for all over 60.
(Count four-fifths of all
males, and one-half of
females over 60 as gain-
fully occupied in 1910) . 4.1
Gains
1. Industrial employment
of married women un-
der 60 years of age.
(Count their present ef-
ficiency as two-thirds
that developed under
socialism) 4.8
2. Employment of all be-
tween 20 and 60 years
of age not gainfully oc-
cupied in 1910 (except-
ing disabled, etc.) 2.1
136
THE LIMITS OF SOCIALISM
Losses
Gross loss 7.8
In per cent, of gainfully
occupied 20.4%
3. Loss through reduction
of work hours per
week 20 %
Total gross loss in per-
centages 40.4%
Gains
3. Reduction of involun-
tary unemployment, ex-
cept through illness .... 0.6
Gross gain 7.5
In per cent, of gainfully
occupied 19.6%
4. Gain through educa-
tional extension, etc.,
say 25 %
Total gross gain 44.6%
Deducting gross loss. .40.4%
Net gain
Allow for errors, giving so-
cialism the benefit of
the doubt . ..10
Final net gain possible 14.2%
that more than a ten or fifteen per cent, gain, even when
we speculate on the effects of education, should not be ex-
pected by socialists. The losses incident to the introduc-
tion of socialistic ideals almost counterbalance the gains.
If we figure the possible gains and losses for the United
States on the basis of occupation statistics for 1910 the
account would run about as follows.
The population of the United States in 1910 was
ninety-two million. Of these slightly over thirty-eight
million were gainfully occupied. That is, they supported
themselves entirely or mainly by their own earnings, the
remainder of the population depending upon them for a
living. The majority thus was not gainfully occupied
officially, though many of them doubtless helped to pro-
duce values sold in the open market. In addition, we
note, there were nearly eighteen million married women
exclusively of those gainfully occupied, plus the following
THE LIMITS IN PRODUCTION 137
non-producers who earned neither money nor otherwise
contributed directly to the nation's fund of utilities.
Namely, we have first all children under twenty years of
age, of whom there were thirty million ; secondly the aged
who account for three million, third, young men and
women attending educational institutions, fourth, widows
not gainfully occupied but less than sixty-five years of
age, and finally such other groups as criminals, cripples,
and the idle rich. The classification will point out which
of these several classes are available for industrial em-
ployment, and which are not.
Socialism hopes to gain most by industrializing the
work of women. ^The abolition of the home is understood.
by_most socialists in this sense. It is not that they wish
to break up"fne personal relation between the married and
their offspring, but that they advocate the consolidation
of homes into larger units of social life, or if not that, the
"conversion of individual work into team work so that un-
necessary duplication and waste may be minimized. It is
difficult to decide just what socialists propose to do, as
current events in Russia show. But it seems best to grant
socialists a gain of one-third by their new methods of
utilizingjemale labor. The question of home ties and
legal relations may then be ignored entirely. It will be
noted however that the gain refers only to women not now
industrially employed, and then only to those under sixty
years of age*_ -
This second restriction of age follows from the social-
istic norm of leisure. An organic law of the Russian-
Socialist Federal Soviet Republic, e. g., has classified men
nypr sivfy .nrl wrnnpn nvpr fifty years of ape as unable
jo work., [Jo these age groups it grants a pension, and
expects no work except it be voluntarily done which it
doubtless often is. It seems not unreasonable to figure
138 THE LIMITS OF SOCIALISM
on a loss, therefore, in our calculation of all over sixty
who are now gainfully occupied or working as wives and
mothers. If we count them as normally efficient this
means a loss of over four million workers.
But to return to the sources of gain. There is in the
second place, the employment under socialism of all be-
tween twenty and sixty years of age on our supposi-
tion that pensions begin with the sixtieth year. No
professional loafers will be tolerated. Wealth will be
no excuse for idleness, and aversion to work no passport
for tramps. A great many widows under sixty years
of age that now live on their income will go to work, too ;
and perhaps some of those now attending school will not
do so after socialism has improved the lower school system.
The total gain thus will amount to over two million, as
indicated in the Table.
But this~is" not all. In the third place unemployment
may be materially reduced. In 1910 about one-half mil-
lion men and women were out of work throughout the
year. In some years the loss is still greater, in others
much smaller. It is a debatable point indeed whether
socialism will improve the productive organization enough
to eliminate all this waste. Not many will agree that
it can be done. But in order to make the argument as
strong as possible we may for the moment grant the ad-
justment of supply to demand in goods and labor that
socialists demand. An improvement is certainly desir-
able, and, what is more to the point, seems practicable.
This leaves us, in the fourth plaej L _a__gain_diie_to edu-
cation. In allowing for this change we are passing from
purely quantitative to qualitative aspects of the labor-
supply. It is not certain that any kind of estimate is
worth while, since efficiency depends on so much else be-
sides technical training. But as a rule an advancement of
THE LIMITS IN PRODUCTION
learning must be held to have perceptible effects. The
gain should be real, and in excess of what prevailing con-
ditions will lead to. Hence a 25% addition to the gains
already registered is proposed in the Table.
If now we turn to the loss we have first the effect of
protection for old age, which was referred to above, and
secondly the shrinkage of labor-power due to a prohibi-
tion of child labor. One of the most fundamental assets
of the socialistic doctrine is its educational program.
Knowledge is to be popularized and made free. The
average man will have a chance to learn and think as he
has not had heretofore. Technical instruction and a lib-
eral education in the arts and social inquiries will develop
the mind, .while recreation and hygiene will develop the
body. ( Without education leisure means little, and with-
out leisure education is impossible. The abolition of child
labor has thus several motivesr~Ji looks to the intel-
lectual uplift of the masses, and it aims at health and
vigor. The dissemination of knowledge is only to be ac-
companied by a greater regard for physical welfare.
Just at what age industrial employment is to begin we
cannot tell. It has been urged that all youths should
have a college education, in which case the period of
leisure would have to be extended to the twenty-second
year. Others have been content to stop at fifteen. But
in as much as the present common school education is
found so woefully wanting by all parties, even though it
includes eight years of training^jt seems proper to credit
the socialistic scheme with an extension of schooling at
least up to the twentieth yearT) The less it approaches
this goal the weaker its argument, and the smaller of
course the gain in productiveness which we have already
put on the right side of the ledger.
If then we combine these two reductions in labor sup-
140 THE LIMITS OF SOCIALISM
ply we have a total of seven million eight hundred thou-
sand, against which must be set a gain of seven million
five hundred thousand. This leaves a net preliminary loss
of three hundred thousand workers. However, the gain
in efficiency, which was rated at 25%, more than counter-
balances it. A loss of three hundred thousand workers
equals not quite one per cent, of the total number of gain-
fully occupied who, it will be remembered, made up about
thirty-eight million out of a total population of ninety-
two million. Deduct this loss of 0.8% from a gain of
25% and you obtain an apparent net gain of 24.2%.
But the gain is apparent only. For in the third place
socialism loses by curtailing the number of work-hours
per day, week, and year. In 1918 the standard day had
about eight hours. Yet many millions worked ten hours
a day or over. In 1910 the eight hour schedule was still
the exception rather than the rule. Under socialism it
may be the rule at first, but the avowed intention of all
socialists is the reduction of labor-hours proportionate to
technical advance. The more machinery displaces the
hand, and the greater the output of goods per hour or
month, the shorter the work day. This is the slogan
with which socialists fight. It is logical in a way, and
should serve to benefit the carefree masses./ But the loss
counts and means a shrinkage of goods, that is, not an
absolute shrinkage, but one relative to maximum possi-
bilities, or to what is now being done. -If we take an
average weekly schedule of fifty hours, and clip off one-
fifth, we lose in commodities what we gain in freedom.
Socialism is willing apparently to reckon with six or seven
hours of work a day, and so our deduction of 20% is
Ifair.
We conclude then that nominally the gain in labor-
power is less than 5%. However, as remarked, there is
THE LIMITS IN PRODUCTION 141
no need of sticking too closely to our figures, since there
is so much chance for error. Let us, therefore, return
to our first announced gain of ten to fifteen per cent.,
which would be a maximum compatible with the ideals of
socialism. More than that it cannot look forward to
without becoming untrue to its own professions.
| 5. Possible Economy in Technical Organization.
There remain thus for brief consideration two other sets
of facts, namely, first the continuance of disagreeable
types of labor, and secondly certain savings due to or-
ganization such as socialism hopes to perfect.
Irksome and dirty work will always have to be done,
for as fast as machines in one place relieve men of it,
needs in another place reintroduce it. It is likely that
in the future occupational diseases and accidents will al-
most entirely disappear. Science increasingly finds means
for protecting the laborer against the poisons amidst
which he plies his trade. Safety devices will be multi-
plied and employees properly taught the use of machines.
Ignorance, carelessness, and fatigue have been found to
be the most common sources of fatal accidents. Social-
ism is no doubt right if it claims that the perils of work
can be largely eliminated by right precautionary
measures. But this is not doing away with crude labor
as such.
Disagreeable labor will always have to be done because
man's wants are never completely satisfied. There's
always something to attend to, to invent and to produce.
As fast as men are displaced by one machine they find
employment in some other quarter. Crude labor means
energy, and a certain amount of human muscular energy
is an indispensable part of the productive organization.
The ratio between rough work and the more refined, be-
tween manual labor and machino-facture, technical
THE LIMITS OF SOCIALISM
progress cannot materially change. In the Census
figures for 1910 crude labor is just about as prominent
numerically as twenty or thirty years earlier. There is
no perceptible decline of unskilled occupations or of hard
work in the building trades, in engineering, mining and
farming. Machines liberate labor for less essential uses,
but they do not end cheerless toil. If socialism then
TABLE FOUR
Industries With Small-Scale Production (U. ., 1910)
Per cent, of Wage-Earners
in Establishments Employing
Industries No Wage-Earners, or
Less than Twenty (20)
Bakery products 75%
Butter, cheese, and milk 80%
Canning and preserving 31%
Carriage and wagons 40%
Cooperage 31%
Flour mill products 82%
Unspecified food preparations 40%
Fur goods 57%
Manufactured ice 65%
Leather goods 32%
Marble works 34%
Mattresses and beds 43%
Mineral and soda waters 99%
Cottonseed oil 34%
Patent medicines 62%
Printing 58%
Tobacco manufactures 52%
Carved wood 45%
Reference: Thirteenth Census, 1910, V. 8, Manufactures, P. 186,
U. S. Bureau of Census.
wishes to relieve the masses in this respect, it will have to
alternate types of work for given individuals, or else take
the sting out of the most dreaded kinds of labor by pay-
ing extra wages.
THE LIMITS IN PRODUCTION 143
This would of course mean some impairment of social
efficiency, but it might be worth while nonetheless. Be-
sides, there is some room for economy in another field,
namely in the organization of capital and labor forces.
Socialists commonly dwell on this possibility and point to
the immense loss now incurred by the public due to over-
production, to unnecessary duplication of plant, small-
scale output, and extravagance in the use of machinery
as well as of consumption goods.
The first kind of waste is of course attributed to the
lack of correlation between demand and supply, and is
therefore a distributive problem which connects closely
with the problem of income, of which more hereafter.
Waste through useless duplication of effort and wealth
results naturally from the individualistic principle and
cannot be altogether avoided until the entire nation is
treated as one market for one single producer, the gov-
ernment acting on behalf of the people. At the present
an enterpriser is chiefly influenced by personal consid-
erations. He will be willing to invest funds if they
promise returns, even though the waste for the consuming
public is perfectly apparent. Railroads, telephones,
street car lines, ships and pikes, factories and office
buildings have been needlessly duplicated in this manner.
I The waste occasionally has raised a storm of protest, but
1 usually the charge upon the consumer has been borne with
V^equanimity, as a sort of toll levied by Dame Liberty^;
Socialism proposes to substitute a collectivistic prin-
ciple for the competitive, and thus to end the drain on
national resources that selfish duplication entails. It
hopes to effect a noticeable saving by a better disposition
of labor forces, and it seems reasonable to grant it all
the credit that such a change may give the consumer.
The policy of consolidation, however, not merely leads
144 THE LIMITS OF SOCIALISM
to a reduction of waste, it also is believed by some to lower
costs on the principle that rates of return rise with in-
crease of the scale of production.
In the United States in 1910 there were still a good
many industries in which the number of .employees per
plant was less than twenty. Indeed, in many of them it
was less than ten. Table Four shows typical instances of
such small scale production. Three quarters of the
bakeries, it will be seen, employed less than twenty work-
ers. In the soda water production the percentage is
highest, and creameries come next. Goods in these in-
dustries may be said to be produced on a small scale, but
whether this means waste is another question. It is
probable that the manufacturer has adjusted himself to
the competitive conditions surrounding him and either
cannot extend his business greatly, or else is tending in
that direction without our noticing it at once. A bakery,
for instance, is no longer a one-man affair. Machines
have largely displaced manual labor. Some concerns sup-
ply many thousands of customers each day. The man
who once had only one or two apprentices now employs
ten or fifteen, installing machinery which gives him the
largest return in profits. He has enlarged his scale of
production, but it seems small compared to the methods
used in iron and steel, or in mining.
The general answer is, however, the old one. Namely,
fine work will always be in demand. There are crafts
that call for high personal skill, individuality, and ex-
treme care in workmanship. For such products large-
scale production is out of the question. Their existence
is simply evidence of wealth and high prices paid for
special quality. Socialism will make an end, possibly,
of some of these industries, but this gain of labor-power
for uses elsewhere is a detail.
THE LIMITS IN PRODUCTION 145
On the other hand, if scrapping of machinery and of
labor which now is carried on extravagantly can be
stopped by collectivistic norms of valuation, a notable
saving will be effected. It has been freely admitted by
magnates of business that the competitive struggle in-
volves a large waste through rapid obsolescence of capital
goods. A slight improvement may lead to the abandon-
ment of an old process and of the tools going with it.
The fear of a competitor who may himself introduce im-
provements at any cost to win the market is a factor de-
ciding the issue. It is not the cheapening of production
that counts, but the difference in sales resulting from any
degree of cheapening. If the machine means only a five
per cent, saving in " socially necessary labor," to use
Marx's expression, the old machine will not be scrapped
on socialistic principles. But if between competitors a
five per cent, cost reduction means the difference of hold-
ing or losing a market the new machine will be installed
regardless of what society loses by the substitution.
Capitalism not only tolerates but encourages fads and
fashions, the discarding of the old, and the frequent re-
newal of both production and consumption goods. It is
not for most people a question of wearing out apparel,
but of being in style. The adventitious values of fashion
and elegance which human nature makes possible and
social organization has assiduously cultivated for ulterior
motives, these values move us to spend our money when
we know we shouldn't. Utility is no longer primary, but
secondary. We wear clothes not to be warm and com-
fortable, but to look well or at any rate look up to date.
Waste is not illogically taken to be circumstantial evi-
dence of wealth. We may fool our good friends and
really have less than they are led to believe, but the im-
pression we make repays us for our reckless outlays.
146 THE LIMITS OF SOCIALISM
Socialism may put a curb to this sort of display and
waste. Of course, it would be hard to decide whether,
for one thing, it can be done, and for another thing,
whether the saving would mount up sufficiently, but it is
well to grant socialism a gain of labor-power on this
score.
6. Possible Recomposition of the National Income.
Savings of this kind however bring us to the second
means of a general character for raising the incomes of
the masses. The first, we noted, was an increase of labor,
natural resources, or of efficiency tested per individual or
socially. By these methods we have found an increase of
ten or fifteen per cent, in wages to be made possible. But
since this is not enough a change in the composition of the
national output of goods will have to accompany a change
in volume. If we can get rid of all useless types of labor
which do not cater to the average wage earner, and con-
vert this energy into more generally useful services, then
the gain will be real, even though a few rich people are
hard hit.
The extent of this change in the ratio of necessities and
luxuries may be gauged in several ways. We may con-
sult first, the distribution of income, secondly the statistics
on manufactures in which many of the luxuries appear,
and thirdly the occupation statistics in which may be
found most of the services figuring in large incomes.
Table Five will serve to indicate the main facts of
distribution for 1910. It will be noticed that it is quite
unequal, the great majority having less than $1000 a
year, while a few boast an income of several millions.
Forty per cent of all the families in the United States
had less than $700 annually, seven-tenths had not over
$1000, and only about ten per cent, had in excess of
$1500. Yet the national income at that time was about
THE LIMITS IN PRODUCTION
147
$32,000,000,000, of which probably some twenty-five
billion represented consumable goods for personal use.
The remainder consisted of capital goods. If then we
divide this smaller sum of $25,000,000,000 by a popula-
TABLE FIVE
The Distribution of Incomes in the United States
in 1910
(Estimates of Dr. W. I. King, in his " Wealth and Income of the
People of the United States," pages 224-228.)
Cumulative Number of Cumulative Amount
Family Income Income-receiving Units, of Income, in
of not over in Thousands Millions of Dollars
$700
$1,000
$1,200
$1,500
$4,000
$5,200
$10,000
$100,000
$1,000,000
Family Income
of not over
$700
$1,000
$1,500
$2,400
10,878 5,807
19,402 12,969
22,830 16,703
25,243 19,867
27,016 33,158
27,496 24,660
27,644 25,326
27,818 26,514
37,941.6 29,521
27,945 30,038
Grand Total 27,945.2 30,529
THE DISTRIBUTION IN PERCENTAGES
Cumulative Percentage
Cumulative Percentage of Total Income
of Families Having Received by Given
Given Income Class of Families
19.02$,
42.48%
90.31%
96.18%
74.71%
tion of ninety-two million we obtain a per capita income
of approximately $270. Multiply this by five, and the
average family would have an income of $1350. This
might, according to socialistic standards, be called the
148 THE LIMITS OF SOCIALISM
normal income at that date. The standard of living is
not fixed rigidly any more by socialists than by econo-
mists. It varies with time and place, and above all it
varies with the productiveness of the nation. There is an
objective standard set by the requirements of physical
and mental vigor, and a subjective one kept in mind by
the individual. Socialism may consider that income nor-
mal which at any time embraces the largest class of con-
sumers. In that case $1000 annually would be more
nearly the goal to steer for than $1350. But it is cer-
tain that socialists aim at a marked improvement of the
general mode of living. Their ambitions are well known.
The quantitative aspect of this desire for betterment will
doubtless involve a thorough revision of family budgets.
A reapportioning of goods and services will take place,
so that all families have the luxuries now (1910) enjoyed
by those with $1500 a year or more.
Four-fifths of the American people in 1910 had not
over $1200 income. Luxuries for them were but a small
part of their budget. It is indeed doubtful whether at
the purchasing power of money for 1910 a family with
a hundred dollars a month could have spent more than
five per cent, on luxuries. But the other fifth of the
population had so much the more. The great bulk of its
expenses consisted, according to our definition of a
standard of living at that time, of luxuries. Thus, i
we make due allowance for what the rich spend in the
purchase of necessities, we have about one-fifth of the
national income represented by luxuries. It is this fifth
which socialism will turn over to the poor. Or rather
it is the labor and capital required for producing these
luxuries that socialism will turn into other channels.
The output of necessities and comforts will increase, and
that of extreme luxuries will end.
THE LIMITS IN PRODUCTION 149
The statistics on manufactures throw further light on
the matter. They do not, to be sure, contain all of the
luxuries consumed by the wealthy. A variety of things
for the use of which the rich are noted is not enumerated
by the census taker. There are magnificent mansions, for
instance, and golf links and racing stables and Pekingese
dogs, and rare viands and art works and pleasure yachts
and private Pullmans, and display-fountains and liveried
servants and curios and opera seats, fancy dress balls and
silver plate, and tiaras and mausoleums, none of which
will be found in the official records. Yet they figure in
the budgets of the plutocrats.
Again, it is impossible to tell from the official classifica-
tion whether an article is really a luxury or not. The
output of woolen mills, for instance, may be luxury or
necessity according to quality of the fabric. The choice
of tailor and of trimmings will further guide us in defining
the finished suit. It may either prove to be a high-class
luxury or if the material was made up in the sweatshop,
we may be able to buy the suit at such a low figure that
we refuse to class it among the luxuries. Shape and
style, finish and quality of ingredient, time and place of
purchase, these and other items decide whether the com-
modity is a necessity or not.
But even if the limitations of a statistical compilation
are glaring, the appended Table Six will have some use-
fulness. Whether we agree on all the articles or not,
the omitted items will probably somewhere near balance
those listed wrongly. Within ten or fifteen per cent, the
list of manufactured luxuries will agree with facts. With
this understanding it is instructive to note that 10 A%
of the aggregate of manufactures consisted of luxuries,
the production of which required !!.% of the total
labor-force, entrepreneurs and superintendents, etc., in-
150 THE LIMITS OF SOCIALISM
eluded. These figures apply to' the year 1914 when the
total national income was about thirty-five billion dollars.
In terms of that total, therefore, the luxuries amounted
to 7%, while the producing forces made up about 2.5%
of all gainfully occupied in that year.
Most of this material and energy can no doubt be
turned to better uses. Socialism has a large field to cul-
tivate, and great are the possibilities for reform by way
of a recomposition of our national budget.
It is possible, e. g., to build cottages with the product
of brickyards and quarries that now help to build palaces
and accessory edifices on the estates of the multi-million-
aire. It might even be possible to furnish every family
a decent apartment to live in, or a house and lot such as
the middle classes now point to with pride ! In 1910 there
were over twenty million families in the United States, of
which nearly eleven million rented their homes. It is dif-
ficult to get at the number of houses occupied by one
family or a single tenant because the Census Bureau
classed every sort of sleeping quarters as a dwelling,
while conversely every dwelling place figured as one fam-
ily. 2 Thus a single occupant of a tent or way-car or
boathouse was rated as a family, but so were all the
inmates of a hotel. They too were counted as one family.
Owing to such irresponsible procedure in classification
there is no direct way for finding out how many families
had an individual home of their own. However, it is
significant that only nine million out of twenty million
families owned the place they lived in. Judging from
that circumstance we can hardly count on more than one
dwelling house for every two families in the country. And
2 "Thirteenth Census of U. S.," Census Bureau, Volume 1, p.
1285.
THE LIMITS IN PRODUCTION
151
TABLE Six
American Manufactures in 1914 Which Were Consumed
Chiefly by People Earning Over $1200 a Year
(Reference: U. S. Census Bureau, Manufactures in 1914.)
(Thousands omitted)
Number of Value of
Industry Persons Engaged Product
in Industry $
Artificial flowers 9,300 19,000
Artists' materials 1,000 3,000
Automobile and parts 146,000 633,000
Fancy boxes 50,600 75,000
Carpets not rag carpets 33,000 69,000
Chocolate 5,000 36,000
Clocks and watches 35,000 34,000
Fancy articles, not elsewhere specified.... 13,300 25,000
Fireworks 1,500 2,300
Fur goods 15,200 46,400
Leather gloves 12,300 21,600
Haircloth and hairwork 2,300 5,700
Jewelry 46,000 119,000
Millinery and lace 54,000 114,000
Mineral waters 25,000 58,000
Motorcycles 7,700 22,000
Musical instruments 55,000 120,000
Fountain pens 5,200 7,500
Photographic apparatus 11,300 39,000
Rubber goods, not elsewhere specified 62,000 224,000
Silk goods 116,000 254,000
Silverware 18,400 38,200
Sporting goods 6,300 13,000
Stationery, n<ot elsewhere specified 9,000 32,000
Stationery and art goods 2,400 4,000
Toys and games 9,000 14,000
Upholstering materials 5,000 16,000
Washing machines 3,000 7,600
Carved woods 13,400 19,000
Woolen goods 170,000 395,000
Total here listed 930,000 2,516,000
Absolute total 8,265,000 24,200,000
Percentage of listed workers and values.. 11.2% 10.4%
152 THE LIMITS OF SOCIALISM
of these many live in crowded quarters, a few rooms to the
family with small regard for sanitation.
Considering all things it seems therefore best not to ex-
pect too much at once from a regrouping of concrete
commodities entering into the average family budget.
But there is more chance for doing away with useless types
of labor such as now cater mainly to the wealthy. The
producers of intangible goods, that is of personal serv-
ices, are alljoo numerous from the standpoint of the small
earner. Much energy might be liberated by shifting these
producers to new fields, by rearranging the ratios of dif-
ferent kinds of personal service now rendered. On social-
ist principles this change should certainly be strongly
urged.
Table Seven gives the main facts relating to this ques-
tion. It will be seen that in 1910 nearly two-fifths of the
people gainfully occupied were not producing concrete
goods, the majority figuring under the professions or as
traders, domestic servants. Out of a total of 38,000,000
the professional group teachers, lawyers, etc. ac-
counts for nearly 5%, the domestic and personal services
for more than 12%, and the personnel employed in trans-
portation and trade for another 20%. These are the
workers that did not produce food or clothing, but con-
sumed both in rendering a different sort of value. Some
of them of course were indispensable to the methods of
production and to the scale of production which made
food and clothing so plentiful. It would be folly to con-
sider the employment of all of them as unnecessary to the
production of tangible goods. Socialism does not assert
this, nor will any one expect socialism to abolish such
services altogether.
The chief task is a reduction of this number, so that
the army of farmers and manufacturers is increased. In
THE LIMITS IN PRODUCTION
153
TABLE SEVEN
Number of Gainfully Occupied in the United States m
1910, to be Reduced or Eliminated Under Socialism
(Reference: United States Census on Occupations for 1910.)
A. THE GAINFULLY OCCUPIED IN SPECIFIED SERVICES
(Thousands omitted)
Engaged in Transportation 2,637
Trade 3,615
Public services 459
Professional services. 1,664
Domestic and per-
sonal services 3,772
Clerical occupations. 1,737
Note: This represents
labor not engaged di-
rectly in the Production
of concrete goods.
Total 13,884
B. ESTIMATED SAVINGS IN CERTAIN OCCUPATIONS
(Thousands omitted)
In Transportation
Carriage drivers 35
Chauffeurs
Garage keepers
Hostlers, etc ,
46
5
63
Livery stables 35
Teamsters, etc 16
Railroad employees 1,247
Express, telegraph, etc 314
Others 322
Total
Estimate saving at
2,083
694
In Trade
Bankers ................. 56
Brokers of all kinds ...... 49
Store clerks, salespersons,
etc .................. 1,368
Commercial travelers ..... 164
Window-dressers, etc ..... 5
Deliverymen ............. 230
Floor walkers, etc ........ 21
Samplers, etc ............ 13
Insurance agents 98
Porters, etc 102
Newsboys 30
Employment office owners,
elevators, etc 22
Real estate agents 126
Retailers 1,195
Wholesalers 51
Canvassers, etc 105
Book-keepers, etc 487
Other clerks 720
Total 4,842
Estimate saving at %
In Public Services
Marshals, sheriffs, etc. . . .
Policemen
Soldiers, sailors
24
64
77
Total 163
Estimate saving at ^ 55
154 THE LIMITS OF SOCIALISM
In Professional Services
Lawyers, etc 115 Janitors and sextons 113
Notaries' 7 Hotelkeepers, etc 65
Keepers of charitable insti- Housekeepers (lodging,
tutions, etc 23 etc.) 189
Laborers, unspecified 53
Total 145 Personal servants 1,572
Estimate saving at % 100 Waiters, etc 188
Total 2,631
In Personal and Domestic Estimate saving at % 2,000
Services Total saving 6,075
Barbers, etc 195 All gainfully occupied in
Bartenders and barkeepers 231 1910 38,200
Elevator boys, etc 25 Per cent, of saving 15.9%
1910 about three-fifths of the population furnished all
the commodities. Whatever the entire population needed,
that was produced by 6%% of it. No more eloquent testi-
mony to the wealth of the United States and to the
efficiency of its people could be given. It is the result
of the same conditions that made it possible for twelve
million farmers and farm-laborers to feed the remaining
eighty-five million, besides having something left for ex-
portation. A rich country will naturally add many per-
sonal services to its fund of concrete consumables. The
trend toward non-necessities is thus illustrated, and no
one would wish a return to the costlier system of the
" simple life."
Yet it is plain that a notable portion of this intangible
wealth benefits only a very few, and that much of it is
either quite useless, or outright injurious and demoraliz-
ing for the general run of people. It is not well that so
much energy is wasted in the rendering of trivial serv-
ices. Hundreds of thousands of domestic servants are not
needed, especially among those who employ them in large
numbers. Neither will socialism have much use for the
millions that now are engaged in commerce or in some of
THE LIMITS IN PRODUCTION 155
the professions. We find in the list, for instance, com-
mercial travelers and book agents, floor walkers and
private secretaries, clerks and typists, teamsters and
messenger boys, advertising agents and curb brokers,
printers and journalists, janitors and watchmen, body
guards and doorkeepers, manicures and maids-in-waiting,
charity workers and chauffeurs for private families. A
certain percentage of these will and should be retained,
but many of them socialism will place in other positions.
If, as suggested in the Table, we select certain occupa-
tions and then decide upon a curtailment according to
the nature of the services now rendered, we shall find that
somewhere about one-half of the total number of gainfully
occupied not producing concrete goods may be cut off.
About 16% of all gainfully occupied in 1910 would thus
go into new lines of work.
It should be noted in passing that our three tests of
luxury consumption and therefore of the possibility for
a rise of the average man's income correspond roughly.
In each case we find a difference of about one-fifth. The
redistribution of this fifth marks the extent to which
socialism is tolerably sure of helping the masses who in
1910 earned less than $1000 or $1200 per year.
7. Other Limits in Production. Whether all of the
poor would hail the readjustment with delight, however,
is a question, for the change will involve some losses as
well as a great gain. It is ever so. The well-to-do, of
course, will suffer most, since the recomposition of the
national budget also means a redistribution of incomes.
To them the elimination of luxuries in goods and services
will bring the greatest sacrifices. But it will also have a
drawback for the masses of the people who have long been
used to the glamor of city life as competitive principles
engendered it. There are some features about the present
156 THE LIMITS OF SOCIALISM
method of retailing goods that those who bother not
about maximum welfare will prefer to the socialistic
scheme. And one cannot altogether blame them.
The possession of concrete goods is not everything even
to those of limited means. There is some satisfaction in
seeing what one cannot own, and there are many who pre-
fer the courtesies of a competitive business to the preci-
sion of a public service controlled by the state. Thus
some will feel that little is gained by having an extra
pair of shoes or twice the allowance in furniture, if the
goods must be bought from a government-owned ware-
house where the clerk cares nothing about the customer,
but on the contrary is conscious of rights which place him
at an advantage. Shopping is now made a pleasure by
those who wish to attract patrons and expand business
regardless of social welfare, or perhaps in full harmony
with it. The down-town districts of a large city are
a commentary on the spirit of modern enterprises.
Everything is subordinated to the maxim for profits.
The customer is always right as long as he pays the
price. Many people enjoy this situation and would
rather have the window displays of a fashionable depart-
ment store than cheaper ribbon or better housing condi-
tions.-. And so with the services of newsboy and shoeblack
and hotel-porter and all the rest of servitors catering to
the rich chiefly, but to the poor also in some measure.
And lastly, it is likely that the law of diminishing re-
turns will set limits to the output of comforts regardless
of what socialism decrees or the people may desire. The
staples of life are most subject to decrease in accordance
with the principle first enunciated by the Ricardians.
We cannot add to our agricultural stores at random as
we may increase the output of minerals. These latter
returns need not fall off for long times to come, but in so
THE LIMITS IN PRODUCTION 157
far as farm-products furnish the basis for manufacturing,
or supply the population with foods, the national labor-
power is always at its mercy. Thus in European coun-
tries the peak of productivity has long been reached. In
the United States, whatever increases in acre-yield may
come, will be expensive. The farmer is sure to sell at a
rising price. The gain will be smaller than the cost in
labor and capital. The yield per acre may rise, but ex-
penses will rise even more. dThe more luxuries of one kind
the socialist demands, the more of another kind he will
have to forego, or else do without a corresponding amount
of necessaries.^
The nineteenth century established many records that
will not be repeated for a long while. Thanks to them
the white race has multiplied its income in goods, learn-
ing to cherish precisely such ideals of future development
as socialism stands for. But it is not likely that the next
few hundred years will witness a similar growth in till-
able acreage, in timber supply, and in the output of
minerals. Science and organization have done their ut-
most. They have made the nineteenth century the
wonder of all ages. Yet the level of living has for the
masses not risen as much as socialists expect to raise it
hereafter, nor has the flow of luxuries sufficed to satisfy
the masses. In Europe foreign trade proved a valuable
means for the diversification of living. The output of
factory and mine was exchanged for raw materials bought
abroad, and the teeming millions were fed with stocks
grown in the Americas or in the plains of Siberia and
Australia. Even the East Indies and the dark continent
furnished a quota.
This, then, is the secret of a high level of living among
the minority of Europeans. By exporting large values
in tiny packages they managed to obtain the basic ma-
158 THE LIMITS OF SOCIALISM
terials or rare luxuries. In the future, however, this will
not be so easy. The more densely populated the erstwhile
frontier lands, that were the granaries of Europe, the less
certain their exports of foods, and more self sufficient the
European nations must become. The regulation of the
birthrate is one means of frustrating the designs of a
sinister law of nature, but this is not a peculiarly social-
istic means. Nor do wars solve the problem. The war
just closed e. g., has slain many millions, but it has also
exterminated the ablest instead of the worst, and that re-
acts disadvantageously upon both agriculture and in-
dustry. The only alternative to a reduced food allow-
ance, consequently, is an increased acre yield at the cost
of comforts and luxuries. In the long run nobody can
escape this situation.
People in the United States do not entertain such fears
of a reduction in food. Yet there are indications that for
them, too, future gains will mean a more than propor-
tionate expense of human and mechanical energy. True,
if the United Kingdom can produce thirty-five bushels
of wheat per acre, so can we. But this is nothing to gloat
over. On the contrary we should regret the step.
Furthermore, it will particularly interfere with socialistic
plans, since the workers set free by the elimination of use-
less services will increasingly be drawn to the farm in-
stead of producing manufactures.
Within a few generations such a turn for the worse is
certain unless, as remarked before, birth-control is popu-
larized as one may expect it will be. But in any case it
deserves notice that in the distant future the over-popu-
lated countries will not be able to fall back upon machino-
factures for a supply of necessities. The world is becom-
ing rapidly settled. Frontier regions still exist, but may
not have foodstuffs to export in such amounts as the
THE LIMITS IN PRODUCTION 159
nineteenth century Europe needed. When that date ar-
rives socialism will have only one refuge for the poorly
endowed countries. Namely, it will have to fund the
world's supplies so as to maintain a high level of living
among the least favored nations. The increase of luxuries
may then continue, but it will not reach the proportions
some hope for, and the funding process which is after all
the logical goal of economic socialism will encroach
further upon the luxury rations of the inhabitants in the
richest lands. Thus will production have found its limits.
CHAPTER VH
THE LIMITS IN DISTRIBUTION
i. The Spending Power of the Rich Production
determines distribution. A nation cannot distribute
more among its members than it has at its disposal per
annum in goods and services. To the extent, therefore,
that socialism fails in augmenting the social dividend it
must also fail in raising the level of living of the average
man. This is on the understanding that the total na-
tional income is divided evenly between all the citizens.
But of course, this equality never existed and is not con-
templated by socialism.
There is consequently much room for a change of in-
dividual or family incomes without altering materially the
productiveness of the nation. In 1910 two-fifths of the
earning population received less than one-fifth of the na-
tional income, and one-fifth of the people claimed over
one-half of the aggregate. To-day the distribution can-
not be greatly different, though as a result of the war
just brought to a conclusion some groups of labor have
raised their purchasing power slightly, while some of the
formerly well-to-do have lost heavily. Wars always
mean a redistribution of incomes.
But the general fact is the same for all nations. We
shall perhaps always have the poor with us if no radical
change in economic organization takes place. The poor
always have been in the majority so far, and because of
this disparity existing everywhere the task of socialism
is clearly defined. It may try, and it solemnly promises,
to redistribute goods so that all have the necessities, and
160
THE LIMITS IN DISTRIBUTION 161
none sj)end greatly in excess of what the average man is
allowed.
It should, however, be understood that the present un-
equal distribution is no worse than it has been in the past,
that the largest incomes do not measure spending power,
and that without state aid a slow diffusion of national
wealth among all the inhabitants does take place. Social-
istic literature has been somewhat misleading on these
points.
The poor are to-day no worse off than they were in
olden times. On the contrary, there is plenty of evidence;
to show that unmitigated pauperism is on the wane, j
Among the ancients wealth was unevenly distributed be-
cause land was the chief natural resource, and this be-
longed to a few. When the level of living comprised not
much more than food and clothing even for the rich, then
the chief privilege of the wealthy was leisure and power
over the body. Slavery with all its attendant rights of
the owner furnished a sense of power such as nowadays un-
doubtedly comes with the control of large industrial
plants or public undertakings. All through the Middle
Ages this division of privileges and duties was continued.
The Church did not discourage it, though it preached now
and then of the brotherhood of man. The line of divi-
sion between lord and vassal, between freeman and serf,
between noble and burgher was distinctly drawn and ob-
served in social intercourse. The minority of nobles and
clergy owned the land or held it in fee simple from the
Crown or Holy See respectively, while the bulk of the
population owned no more than the food they ate and the
clothes on their back. It was not till the end of the four-
teenth century that private ownership among the unnoble
became important. Fortunes then were amassed with
which eventually the middle class made itself master of
162 THE LIMITS OF SOCIALISM
political affairs. But the concentration of wealth was
continued as before, except that new forms of wealth ap-
peared, and that hereditary rights to office were over-
shadowed by inheritance of wealth. When this change
came capitalism had won the day for the plebeian ma-
jority, even though income itself still fell into the hands of
a small group of enterprisers.
Until quite recent times wealth was less powerful and
conspicuous also in the sense that it could not buy what
the rich now display so lavishly. The basis of national
subsistence was agriculture. Manufactures made up the
smallest part of the social dividend, so that income was
spent mainly in the building of castles, and in viands and
costly raiments. The materials were expensive enough,
but the total effect of such extravagances was not as
obvious as it is to-day. Palaces were for protection
rather than for comfort, or if meant for comfort the
limitations, at any rate, of the value of money were much
more apparent than to-day. Science had not yet made
the discoveries that furnished the immense variety of com-
forts now so highly prized. The rich had more candles
to burn, but the light was about the same. They had
wood in the winter, but so had most of the tenants on
the estate. Rich food and gorgeous though ill fitting ap-
parel, security against the enemy in early ages such as
the poor could not get, an abundance of silver and gold
plate, and perhaps precious jewels from the Orient
such were the means by which the millionaires formerly
made themselves envied. The forms of display were not
as ostentatious as to-day, and the people were not as close
to them. The chase and the feud were pastimes the multi-
tude did not care for anyway. A difference in learning
either did not exist or did not challenge attention be-
cause of the limits of science. And besides, the multitude
THE LIMITS IN DISTRIBUTION 163
until a few generations ago did not aspire to a status
such as now is deemed the proof of well-being and democ-
racy.
Again, however, it would be a mistake to assume that
the excessively wealthy can spend all they have. The
notion that a million dollar income is actually spent for
comforts and luxuries, or might be so spent, is erroneous.
It has already been shown in a previous chapter that the
statistical data disprove such a contention. They show
plainly that not over one-fifth of our national product
consists of the non-necessities, and that more than one-
half of this takes the shape of goods consumed almost en-
tirely by incomes ranging between $1000 and $2500 for
1910, in the United States. Attention has been called
also to the fact that a large portion of every nation's in-
come represents capital goods used for producing con-
crete or inconcrete consumption goods. Hence this part
of the total is not available for consumption. But it is
owned mainly by the rich. The small earners save rarely
more than one-fifth or tenth of their income. They can-
not or will not do so. But the corporation making a
25% net profit, the man with a hundred thousand dollar
income, these are the centers of financial power. From
them the replacement and investment fund flows. They
maintain the status quo of industry or expand business
so as to raise the next year's social dividend. Out of the
millionaire's income thus all but a minor fraction remains
normally in productive condition. \ If all incomes over
five thousand a year were to be spent in the purchase of
luxuries, as has occasionally been suggested, our economic
system would collapse./ There would be no labor and
capital to provide the necessities ; nor could the plan for
the rich men work out well. Such spending would prove
to be impossible.
164* THE LIMITS OF SOCIALISM
Large incomes then do not mean the scale of living
that many associate with them. Nor should it be forgot-
ten that nearly all wealth eventually redounds to the ad-
vantage of the masses. There is no discovery made by
science, no invention patented by the manufacturer, no
improvement introduced in the realm of exchange, but it
sooner or later benefits the average man. It is not pos-
sible to secrete ideas forever, vjj, is impossible to with-
hold permanently from the people the advantages first en-
joyed by the wealthy^;; Most luxuries some day become
necessities. Novelties in the course of time become an-
tiquities and curiosities of science, commonplaces. A
watch to-day is bought for a few dollars, though the work
of many great men was necessary to produce it. A Gali-
leo had to formulate laws of motion before we could meas-
ure time accurately. The dial contains figures that some-
body many thousands of years ago invented. The pro-
cesses for refining the ore used in the case cover many
achievements scientific and mechanic. The purchaser of
the watch does not pay for all he buys at the time. He,
on the contrary, expects to get the benefit of ideas and
efforts made by others, a few of them living, but most of
them long dead. Social heredity is the main source of
unearned increments. We profit by accepting the knowl-
edge of our forebears. We all, in the long run, get the
benefit of individual endeavor if it is extraordinary and of
lasting value. The rich cannot corner the market of
luxuries except for a short while.
Their own fortunes indeed crumble. From shirtsleeve
to shirtsleeve is but three generations, according to an
old adage. That does not seem to be true, and it cer-
tainly need not apply to the circulation of wealth. But it
is true that many huge fortunes are dissipated soon after
the founder has gone. In a hundred ways the hoard melts
THE LIMITS IN DISTRIBUTION 165
to nothing. Periodically some rich men become paupers,
and some of the poor accumulate wealth.
Yet in general there is a permanent concentration of
income. The disparity is lasting. The well-to-do con-
tinue to be so, and the wage earner of a thousand dollars
or two per year continues to stay at that figure. From
father to son we have wealth and poverty transmitted.
This is the fact that socialism is conscious of and wishes
to change. It wishes to hasten the natural diffusion of
incomes which the laws of consumption bring about. It
insists upon helping the laws of sociation here as at other
points in the field of economic relations.
2. Causes and Consequences of Concentration of
Incomes. Socialism has answered the question, why such
gross inequalities of income exist, in the spirit of certain
British writers whom Marx respected highly. The ques-
tion of one and the reply of another will help to make
clear the socialistic attitude, which from the days of Marx
on has remained the same in this matter.
| W. Thompson wrote in 1824 : " How comes it that a
nation abounding more than any other [he refers to Eng-
land, of course] in the crude materials of wealth in ma-
chinery, dwellings and food, in intelligent and industrious
producers, with all the apparent means of happiness, with
all the outward semblance of happiness exhibited by a
small and rich portion of the community, should pine still
in privation? How comes it that the fruits of the labor
of the industrious, after years of incessant and successful
exertion, are mysteriously and without any imputation
of fault tojthem, without any convulsion of nature swept
away?" 1 \
Conditions to-day are not as gloomy as those depicted
i Thompson, W., "Inquiry into the Principles of Distribution,"
Introduction.
166 THE LIMITS OF SOCIALISM
by this critic of the individualistic system, but with some
modification the challenge might be repeated to-day. And
the answer would still have to be what a contemporary of
Thompson, namely Hodgskin, thought it was. He de-
clared that " the distress our people suffer and the pov-
erty we all complain of, is not caused by nature, but by
some social institutions which either will not allow the
laborer to exert his productive power, or which rob him
of its fruits." 2
Hodgskin demurred to the charge of the Ricardians that
nature was at fault, that the law of diminishing returns
explained everything, or that sexual passion gave civ-
ilization no chance. The socialists from Marx on have
supported this criticism of the English radicals and
pointed with an accusing finger to capitalism. The more
modern view will not accept the whole of the socialistic
indictment, but it is indisputably true that a change
should and can be made.
The unequal distribution so far has been the result of
innate differences between men, and of other differences
less constant, more controllable. The superiorities of
some will necessarily bring them victory in any battle.
Physical strength and valor win in a hand-to-hand en-
counter. Great mental powers bring riches to men. But
in addition we have had legal monopolies, the might of
socio-economic organization gathered into a few hands,
the ownership, by a small group, of natural resources
which furnish the staples of consumption, and the right
of inheritance, by which the wealthy could perpetuate
their holdings not only in consumables but also in the
rawstuffs. When the non-productive materials such as
mineral and timber and soil fertility and water-power are
deeded away to a few, whether by purchase or free gift
2 Hodgskin, Th., "Popular Political Economy," 1827; pp. 267-68.
THE LIMITS IN DISTRIBUTION 167
does not matter, then unusual chances for gain are
opened. Organization is the fruit of brain and property
rights. It is virtually invincible, barring state action.
We can defeat brain by itself, and there is always a
method for controlling mere wealth. But let the two com-
bine, and the partnership becomes nigh invincible.
The socialist has his eye on this combination, and de-
sires to separate brain from monopoly in the extremely
scarce resources of the world. He favors a redistribu-
tion of incomes to help the less gifted by nature, and in
this he has the approval of science no less than of moral
sentiments.
A theory of prosperity such as social science to-day
recommends is incompatible with extremes in distribution.
As long as income is a condition to leisure and education,
as long as an economic leveling is a prerequisite to a feel-
ing of fellowship in matters civic, moral, religious and in-
tellectual, so long the juxtaposition of plutocrat and pro-
letariat is full of menace. We can develop dormant pow-
ers of reasoning and of production or of enjoyment in
man. This modern psychology and biology prove. We
can produce more than we need to sustain the body. This
history has shown. We can produce most by joint enter-
prise and capitalistic methods, meaning thereby round-
about methods and the use of machinery, no matter who
owns it. Since then, according to the verdict of natural
science health depends on food supplies and protection
against bacterial diseases, and since an economic surplus
is necessary to the specialization which makes modern
science and discovery possible, it follows that wealth well
distributed is most conducive to progress. The same
economic interpretation of history which socialism first
formulated as a sweeping law of evolution provides also
part of our argument for urging equalization of fortunes.
168 THE LIMITS OF SOCIALISM
Approximate leveling must be part of our plan for de-
mocratization of all rights and efforts.
However, we may look at the situation from another
angle. We may emphasize the undoubted fact that distri-
bution reacts upon production in two ways, viz., by af-
fecting our choice of goods, and by influencing the volume
of goods turned out, and that for these two reasons a
marked concentration of income is reprehensible. This
viewpoint has commonly been taken by socialists, and it
agrees with the analysis of price advanced by profes-
sional economists. People disagree chiefly as to the place
of competition in national productiveness.^
That an extreme concentration of wealth must influence
the enterpriser in his choice of goods to be produced
should be self-evident. But if not, it follows logically
from the very facts of utility and pricing which most
economists content themselves to describe.
The rich will encourage the production of luxuries when
millions lack the necessities. They will do this because
of the principle of unlimited wants and of diminishing
utility. They will do this because, in equalizing our
margins of enjoyment of goods, we are able to offer differ-
ent amounts of money for goods, once income is unevenly
divided among the consumers. The prices are then for
all the same, but the sacrifices are not. This is the cir-
cumstance that socialism most deplores.
Our wants are illimitable. Thanks to our imagination
and power of inference we are able to wish for much
more than we possess. We are never satisfied ; which is on
the whole a good thing. But since there seems always
room for things besides those we already own and enjoy,
we make unequal efforts or sacrifices to obtain additional
goods when our possessions are unequal.
And we shall ask for different things, not merely for
THE LIMITS IN DISTRIBUTION 169
larger amounts of any one article. \ We tire of one ar-
ticle as we increase our supply of it. We cease to value
an over abundance of good things. Too much dinner
sates our appetites. One or two musical instruments sat-
isfy our longing for music. After we have bought so much
of clothing or books or furniture we want no more of it,
or we want very different types of each, so that we have
virtually something different.
We therefore always spend our money deliberately in ;
that we weigh the desirability of one commodity relative
to another. We have options to buy things, but cannot
ordinarily buy everything. We must decide what we
want, how much of each class of goods, and in what order.
If, for instance, a community has a supply of water it will
allot it for different uses according to the total supply
on hand. We may be sure that our thirst will first be
quenched from the supply. We shall put drinking water
before everything else. Then, if something is left, we
shall perhaps use it for washing purposes and for the
laundry. If still more remains we may decide to sprinkle
the streets with it, so as to lay the dust. Or possibly
our garden back of the house needs it, so we shall use it
there. And only if all these needs are looked after shall
we think of swimming pools, of public fountains and like
details.
In some such order all our articles of consumption are
used. An astonishing uniformity of tastes will manifest
itself in the arrangement of broad classes of goods, how-
ever infinite the variations in detail. We all know what
are the essentials of life on a physical plane. We all at
first prefer clothing and shelter to bric-a-brac or sightsee-
ing tours abroad. We cannot indulge in trivial comforts
antil a minimum for bodily sustenance is provided. Then,
beyond that point, and in the finer grading of preferences.
170 THE LIMITS OF SOCIALISM
the individuality of the purchaser appears. The farmer
does not value things like the urbanite. A clergyman has
a scale of choices different from that of a hard manual
worker or a scientist perchance. Our temperaments de-
termine our choices. Some would have more food and
others more books. Some will like to spend a great deal
for pastimes, while others are eager to own a home first
or to acquire a college education. Tastes differ in the
particulars.
But let it be noted that the unequal division of wealth
greatly accentuates the natural differences in taste. For
now one man has much more to compare with his pros-
pective purchase than the other. The rich man has a
long line of wants already satisfied, consequently thinks
little of his potential possessions, that is of his money.
He will be willing to give much for trifles which the poor
man dare not think of buying, since more important needs
would then remain unfilled. The wealthy person thus is
apt to demand goods which no one else wants, and which
are not really a part of a sound standard of living. He
will divert labor and material from employment that would
raise the level of living of small earners to others which
cannot raise it.
The overly rich are systematically catered to by all
kinds of people anxious to earn a fat living irrespective of
social welfare. As the saying is: Money talks and will
command anything and, one might add, will command
to be obeyed. The rich man pays no more for the ne-
cessities than the poor because, being a rare exception, he
cannot greatly influence popular demand, that is the ma-
jority of valuations and of costs in terms of sacrifice. He
will pay ten cents for a pound of sugar, though he could
give a hundred times that sum. Physicians, to be sure,
have introduced a scale of fees proportionate to earnings
THE LIMITS IN DISTRIBUTION 171
real or alleged. This is at times held to be an act of jus-
tice. And it is, if we single out the services of the phy-
sician from all others as being more vital, and hence the
most valuable to the poor who on a competitive basis might
have to do without them. The scale of prices is there-
fore logical. But plainly, if all producers and sellers
were to scale their prices according to the purchasing
power of the customer, the end result would be simply the
maintenance of present distribution. The adjusting of
prices, including wages, to ability to pay would prevent a
further concentration of wealth, particularly if it were
made exactly and consistently for all services. But it
could not abolish the present inequalities which socialism
condemns.
The effect of a marked concentration of wealth on pro-
ductiveness has been variously estimated. Some have held
that it is an essential to maximum effort, while many oth-
ers are convinced that the national income is thereby re-
duced.
Sidgwick, the noted English ethicist and economist, be-
lieved the former. He feared for the British level of liv-
ing if the masses were to get their rights as the socialists
saw them. He wrote : " Any great equalization of wealth
would probably dimmish the accumulation of capital on
which the progress of industry depends ; and would de-
teriorate the administration of the capital accumulated."
He was afraid, for one thing, of the people spending their
additional earnings due to a redistribution of wealth. He
no doubt thought that improvidence would get the better
of common people and induce them to keep servants or
make gluttons of themselves. The capital-fund, as de-
fined by competitive economics, would thus shrink, and
gradually the flow of concrete goods would end.
3 Sidgwick, H., " Elements of Politics," p. 153.
172 THE LIMITS OF SOCIALISM
Whether this is a good view to take of the habits of the
average man is hard to say. We have no direct evidence
to prove that socialism will decidedly increase the product-
ive powers of the nation. But on the other hand we
know of sumptuary laws and of education which have
taught men moderation without hurting their feelings.
In the end there will not be a great deal of waste because
the ratio of capital to consumption goods is, with the ex-
ception of a good possibility for extending personal serv-
ices almost indefinitely, fairly constant. It is really im-
possible to provide luxuries for those with large incomes
unless they themselves or others save, that is see to the
production of a suitable amount of capital which is to
turn out the luxuries. Only a few may at any given time
draw heavily upon their total nominal income in dollars
and cents, the majority must be content with investments,
so the future flow of consumables may grow.
As against this fact, however, we must acknowledge
that personal services may easily expand unduly, for
which reason partly an extreme concentration of wealth is
undesirable. As has been shown elsewhere, socialism will
increase our labor-power chiefly by making use of this
principle. The hosts of men and women now employed
in the rendering of trifling services will be turned into
socially necessary workers, providing services more in
keeping with the needs of the great majority, and rentiers
will have to work also.
As socialists have often remarked, there are at present
too many idlers feasting at a table set by others. Heirs
and prospective heirs, the children of wealthy folk, grown
up men and women, and not least of all married women
in affluent circumstances, these are the parasites who de-
pend upon others for their fat living. \It is not the money
earner himself who spends vast sums, out his family or
THE LIMITS IN DISTRIBUTION 173
relatives. \ Big producers at all times have been compara-
tively sm^ll consumers. Those who give most take the
least, and gladly continue to give their services, or at any
rate to follow their gainful pursuits. But comumption
by proxy becomes a pleasant, because respectable, kind of
a debauch. Habitual idleness thus perpetuates itself from
one generation to the next.
Let us admit then that the socialist possibly has exag-
gerated the effects of the leisure class on national out-
put. But if so he seems to have the better of it when de-
fending his principle of collectivistic enterprise against
the plea for competition which the friends of the present
regime usually bring up first.
It has been argued that to decrease profits will mean a
lowering of our level of living, because the .average busi-
nessman will not do his best unless he can keep all he can
get. The champions of ruthless individualism have again
and again reverted to this position. It has seemed to
them axiomatic that the present regime is efficient because
the ablest are prodded on by rewards which socialism
would withhold from them. If this be so, then of course
competition should have no fetters, since the reduction of
our income hampers progress, as socialists admit.
3. Private Property and Efficiency. But what is
competition, and what has the past taught us in this re-
spect? It is evident that much depends on the definition
of our term, to say nothing of the bearing of experience
on our topic.
Now, in the first place, one may retort with the irrefut-
able fact that the majority of the producers lack that
supposedly necessary incentive already, The "g
jority of workers for a wage cannot increase income as
they increase their output. Their day's work is roughly
fixed, and their day's income is in most cases fixed exactly.
174 THE LIMITS OF SOCIALISM
Piecework has been tried out, and many produce under
that system to-day. But it has not always raised produc-
tivity, nor has the advantage of a larger output invari-
ably offset the disadvantages in other lines. The indirect
effects of speeding, whether urged by profit-sharing or by
piece wages, have set both labor and legislators against it.
But, for that matter, it would be difficult to prove that
men have produced poorly because they received a con-
tractual income. Wages have not prevented us from rais-
ing our level of living more in the nineteenth century than
before. Many hundreds of thousands have for years
worked for salaries and done their best. Corporations
have submitted to a restriction of earnings in percentages
of their investment and not ceased therefore to serve the
public. We have minimum prices and maximum wages,
franchise taxes for net profits above a normal interest rate,
and fees absolutely independent of demand or of values
delivered. If a physician can pursue his practice without
charging all the traffic will bear, why should not a busi-
ness firm selling rawstuffs or finished goods? It would
seem that either we have to divide the population into two
groups, namely the greedy and the generous, or else re-
define our concept of competition. If, and to the extent
that, it is true that some will exert themselves only for
the pelf to be gained, while others find their reward in
something besides pelf, incomes should be uncontrolled in
one case, and curbed in another. But this is not the
most obvious way of meeting our dilemma.
Rather it should be plain that competition involves
much more than a lust for maximum earnings. Hodgskin,
whom we have quoted several times before, wrote : " I can
understand how a right to appropriate the produce of
other men, under the name of interest or profit, may be a
stimulus to cupidity, but I cannot understand how lessen-
THE LIMITS IN DISTRIBUTION 175
ing the reward of the laborer, to add to the wealth of the
idle, can increase industry or accelerate the progress of
society in wealth." This is one kind of rebuttal the
socialist might use. But the more scientific one is a cor-
rect analysis of the competitive spirit.
Competition is not simply a struggle for riches, as
economics frequently has made it out to be ; nor is it a
trial of the pyx by which the pure is separated from the
impure.
The fittest in society is not the fittest among animals.
This is the first now universally recognized fact which the
individualist has to remember. Evolution is not progress,
for man has developed powers of speech and of reasoning,
of memory and of associations, which permitted him to
master nature rather than live by exploiting his fellowmen.
When man began to unfold his learning faculties and to
wrest from nature her innermost secrets he was in a fair
way to substitute surplus for deficit, and to displace in-
ternecine strife by intellectual research.
Or we may put the matter thus.
Competition originally had to do with sex and self
preservation in a struggle for sheer existence, but later on
other factors became more important. Altruism had al-
ways been a natural concomitant of sexual reproduction
and of parental responsibilities. From it the first un-
selfish instincts must have gathered strength. But gradu-
ally the enlargement of the individual's environs developed
group consciousness in addition to blood ties. The selfish
instincts of pugnacity and acquisitiveness which relate
closely to the reproductive functions were tempered by
feelings for others. A solidarity of interests arose and
was cultivated by the requisites of production. Division
of labor and technical cooperation could mean nothing
* Hodgskin, op. cit., p. 254.
176 THE LIMITS OF SOCIALISM
else, however stimulating in some respects it was for the
most individualistically inclined. \ As the material level
rose the so-called moral did, too.'' Passion came to be
blended with compassion, self-assertion with a suscepti-
bility to the approval of outsiders, and the vying for
booty with the penchant for achievement. The whole
course of civilization is a conversion of the physical self
into a social self, and of products into personality.
The cave-man is still with us, but not in large numbers.
He is likely to be a movie hero, or a felon in prison. The
pirate of old has turned profiteer perhaps, but most of the
profiteers are producers nonetheless. The marauders of
the economic world no longer pillage and destroy merely ;
they also build or replace in part what they have undone.
The chieftain who led his hordes into the bloody fray has
given way to the business magnate who excels in the man-
aging of labor forces. Not all highwaymen have died
out to leave us unmolested, but the surviving must be
clever to elude the law, or they must give a quid pro quo
of some kind.
In other words competition, if it ever was merely a
struggle for loot, has long ceased to be such. In modern
times it has increasingly meant a desire to create as well
as a bent for acquisition. The hardest fighters do not^yv,
want the enjoyment of their possessions. They do not
feast at banquets or spend their day in carousals. The
most competitively spirited compete for power which
wealth brings, for the prestige that it means, but also for t
the joy of the game.
We love to compare our deeds. Competition is this
vying for superiority regardless of emoluments. It is not
merely the seeking after rare things money can buy.
Some scarcities not in the money market are equally en-
trancing, and most of them stand for social order.
THE LIMITS IN DISTRIBUTION 177
People do their utmost because energy needs a vent. Or
they plod along from habit, doing day by day their duty,
perhaps unthinkingly. Habit and enerfiy T pride in
achievements and the instinct for approval, these are the,
elements in competition that count more in the aggregate
than the lust for profits.
Men wish to identify themselves with a piece of work.
They crave leadership or distinction measurable by indi-
vidual creations. Socialism, therefore, should put a
premium of praise and a badge of distinction on the ex-
ceptional deed. This all statesmanship will respect, and
within a limited sphere always has applied. If under
socialism the exceptional producers are permitted to do
their own work, to follow up their conceptions and en-
deavors, to bring to public notice what they have done,
then the curtailment of profits will do no great harm. It
will not restrain the most meritorious, though some may
desist at the outset. Socialists should make sure of con-
necting men with their work wherever possible and in
such a way that the two may be identified. It is this
which the finest of men will wish. Incentive to produce by
mastering the subject, and by demonstrating the results to
an admiring or at least to a sympathetic public such
is the most fundamental significance of competition. Men
of preeminence always will lead. JThe fiffht to lead and
to do substantially as we please in creating values will
remain for all times to come. We cannot abolish it by a
fiat of law. But the right to earn as much as, and by
any method, we please is bound to be circumscribed the
more, the more advanced scientific thought.
It might be objected that taxation can take the place of
socialization, so our present regime may be left intact.
This thought has often been broached, and of course con-
tains much truth. But it should also be remembered that
178 THE LIMITS OF SOCIALISM
the final result of greatly increased taxation cannot but
be a curb to individual enterprise.
Taxes are never the most desirable means for rectify-
ing distributive errors, for to take taxes is to admit that
somebody owns, and this implied or explicit admission of
earnings on the part of the tax payer is an injustice to
the bulk of the wage earners. In the second place, tax-
ation is a roundabout way of leveling incomes, much as
Prohibition once labored indirectly because it agitated
against consumption long before it argued against the
production of liquors. Indirect methods of that sort
mean leakage and lost motion. They mean uncertainties
and protests that are falsely grounded.
But, in the third place, it is difficult to see what the
central or local governments would do with the receipts if
they were to take from the rich by taxes what socialism
wishes to give the masses of the people more directly. A
revenue four or five times as large as now needed for
routine administration would call for investments in an
unusual way. In the United States, for instance, the
total public revenue, federal and local, was for the year
1912 equal to about six per cent, of the social dividend.
For every dollar of national income the authorities col-
lected six cents in taxes. If the socialistic principles of
leveling were to be realized by taxation the revenue would
approximate twenty per cent, or more of the total national
income. This would possibly look like a nice gain for both
government and the poor man who was taxed little or noth-
ing. But what would be done with the receipts? They
would either have to be redistributed directly among the
most needv, or they would mean a vast extension of gov-
ernment functions with the result that enterprise would
increasingly become a public business. Taxation conso-
THE LIMITS IN DISTRIBUTION 179
nant with the distributive norms of socialism would thus
lead to government ownership anyway.
| 4. Pricing under Socialism. Socialism, however,
would mean more than the socialization of capital. It
would not merely prevent the rich from becoming richer,
but in addition it plans a revaluation of goods and serv-
ices, so that none can earn the hugejsums which now are
said to represent their " product." Under socialism there
will be no inheritance of _ capital, and .only limited inheri-
tance o^^onsumer^goods. This source of rentals then
being taken away, and the work of all being valued at a
newT^cale, incomes would not "vary "a great deal, though
some differences would continue to exist. But at any rate
the incomes^ would all be earned. Rent, interest, and
profits would have no place in the new regime. All pro-
ducers would be wage-earners.. All workers, no matter
what their profession or trade, would receive wages by
stipulation with the government. \The aleatory gains of
the entrepreneur would end, and contractual earnings
would alone prevail.
It would of course be possible t_Q ration out the goods
which each worker or head of a family is entitled to.
Instead of paying him in token money with which to pur-
chase his needs he could be paid in amounts of commodi-
ties constituting the value of his labors. In this way the
government, or the locally managed public industries,
would know exactly what to produce of each kind of good,
and the possibilities of foolish spending were removed.
To apportion income in this manner has some advantages
particularly when we are dealing with irresponsible par-
ties. But it also offers great administrative difficulties,
and besides, it has not been seriously proposed by social-
ists. It is intended, if one may judge by the dominant
180 THE LIMITS OF SOCIALISM
tone of writings on this neglected subject, to retain the
use of money in so far as it serves simply as a medium of
exchange. Money will be chiefly a claim to values with-
out having itself intrinsic value. Paper money will pre-
dominate. It will, like poker chips in a game of cards,
represent titles to real values, but will have none itself.
And trade thus will mean only a moving of goods. Com-
merce will at bottom mean regional distribution involving
the transportation of commodities. The public central
warehouses will supply the stores at which the consumer
cashes in his token money. The exchange of goods for
services rendered will thus be simplified, and much dupli-
cation of effort stop.
But at what rates will goods exchange? Price is a
ratio of exchange. If a bushel of wheat sells to-day for
two dollars which buy five pounds of meat, the price of a
bushel of wheat is five pounds of meat. Value is price
when values are exchanged. Price is the amount of one
article given for a unit amount of another, that unit be-
ing most commonly known as money. The dollar, e. g.,
is the unit in terms of which the American people meas-
ure Ujeir exchange ratios.
Their) are jour possibilities of pricing^ one of which
socialism will adopt. We may fix the price of commo-
dities, but not the wages paid for services. We may fix
the wage, but not the price of commodities. We may fix
both prices for commodities and wages. And finally we
may fix neither prices nor incomes, that is wages.
At last analysis of course all prices are incomes, and
vice versa. If I buy a pair of shoes I have to pay a
price, and if a clerk sells them to me he also charges his
employer a price for his work. The employer calls the
TV age of the clerk a price which forms part of his busi-
ness expenses ; but the clerk speaks of wages as income.
THE LIMITS IN DISTRIBUTION 181
To him it is coming in, though for the owner of the store
it is going out. Income and outgo constitute couples
that in practice cannot be separated into individual acts.
But according to viewpoint one and the same value is
either price or income. A price contains the incomes of
all those involved in the creation of the article back of the
price. In a pair of shoes, for instance, are incorporated
many incomes, which in minute amounts went to all those
who helped make the shoe, from farm hand tending the
steer that furnished the hide to the clerk in the store sell-
ing the finished article.
At present the great bulk of prices, i. e., of prices for
commodities and of incomes for services, are determined
competitively. We have an open market, and let the
forces of supply and demand decide what a commodity
shall sell for. This is the theory on which the science of
economics proceeded to correlate product ^nd income, and
in large measure this is actual fact. VHowever, purely
competitive pricing has 'ceased in many fiems of production
and exchange. Monopoly has supplanted competition,
and public regulation has put limits to both competitive
and monopoly-pricing. We might therefore acknowledge
frankly that to-day public control of prices^js gaining,
though competition still holds part of the field. Freight
rates and the price of coal or bread are publicly fixed.
Urban traction companies may not earn more than a cer-
tain per cent, on their investment, and employees of the
government of course have as such a publicly set annual
income. If necessary their salaries will be adjusted to
labor conditions in private business, but roughly speaking
the government fixes a wage without regard to competi-
tion from outside. Against this rule, however, must be
placed the unionization of labor, the upshot of which is
the determination of all wages by agreement with the em-
182 THE LIMITS OF SOCIALISM
ployer. Hence a growing part of wage-earners reduces
the force of individual competition and puts in place of it
what socialism virtually aims at, namely payment in ac-
cord with public opinion. A socialistic wage-law will,
like any act of legislature, meet the sanction of the ma-
jority, but public opinion will be guided from the head-
quarters of business.
Incomes under socialism will be fixed per work hour or
per year, but the prices of commodities will vary with de-
mand just as they do to-day. This seems to be the plan
advocated by most defenders of the new order. Consumers
will be allowed to bid for goods as they do now, but in the
first place there will be minima and maxima, and in the
second place the effect upon production will not be the
present one, because incomes will be put more nearly on a
par with each other.
From the standpoint of adjustment of supply to de-
mand, however, the free pricing of goods will under social-
ism have nothing ahead of the now prevailing system.
Nor does there seem any way out of the difficulty unless
a rationing of goods takes the place of purchase with
money paid by the government for services. If, namely,
the government sets prices too high the people may not
buy, or buy but little, so that great stocks are left at the
end of the year which cannot be used up. But if prices
are set too low, the demand will exceed supplies on hand,
and, unless maxima prices are decreed, a ruthless bidding
will set in. Even though incomes are equally or fairly
evenly assigned, many then will still go without the goods
they should have as part of a right standard of living.
Tastes differ enormously. The ideal of public welfare can
only be guarded by specifying all those articles which are
part of a normal level of living, and the use of which in
stated maximum and minimum amounts is publicly recom-
THE LIMITS IN DISTRIBUTION 183
mended or ordered. But in either case supply and de-
mand will not agree closely. And if no price fixation is
planned the discrepancy will be even greater. There will
always be too much of some commodities and not enough
of others. It will not be possible to ascertain beforehand
what people want. The averages of demand will be dis-
covered slowly, and perhaps change as fast as they have
been tabulated for use in production. At present a deli-
cate mechanism of exchange > wholesale and retail, attends
to the equilibration which is never perfect, but moves not
too far from the median line of adjustment. We have
trade journals and government crop reports, international
news service and statistical surveys privately conducted.
We have brokers and bourses looking after the fluctuations
of supply and demand. There is buying and selling in
the harvest field, and of harvested crops for delivery many
months ahead. And most important of all, we have the
pressure of rising prices and the license of falling prices,
by which device demand is suited to supplies and price is
suited to willingness to pay, the poorest dropping out of
the market first.
It is not likely that socialistic organization will do
much better in this respect, than the one now in effect.
It will be far more just to the average consumer, but it
will not avoid altogether the waste attending the distribu-
tion of goods over large areas, among many millions of
people. Nor will it be easy to obtain rawstuffs at short
notice from abroad, in case demand moves that way, or to
find labor in the home market to increase the supply of
particular articles. The more socialism seeks to inter-
nationalize levels of living, the more it will have to reckon
with waste, and with sacrifices for those nations which are
most prosperous and technically best administered.
5. Costs under Socialism. In so far, however, as
184 THE LIMITS OF SOCIALISM
demand is not to fix the price of commodities another prin-
ciple will doubtless be invoked, and socialists have often
spoken of costs in this connection. It has by some been
hinted that goods will be sold at cost, and by others that
costs will measure roughly the price of goods. But how
far may this rule really be enforced?
As to sales at cost, the phrase is misleading if it is to
convey the thought of prices below the present, because no
profits will be made. The sale at cost would be no gain,
because socialistic costs would comprise more or less than
competitive costs, according as we look at them.
In general cost is a ratio. Budgets are ratios of in-
come and outgo, and cost and return are the two aspects
of this mutual relation. If, for instance, I lose one bushel
of seedwheat in producing five bushels of harvested wheat
I may say that the cost of the five bushels is the one
bushel put .into the ground. Cost is outgo measured in
terms of income, and the rate of return (or the profit)
is income compared with outgo.
Cost may be expressed either in goods, by weight and
volume, or in money. The example of wheat just given is
one of cost measurement by weight and tale. But in-
stead of referring the five bushels of wheat harvested to
one bushel of seed I might also have reckoned the return
by the time it took to produce them. I might have said :
I produced five bushels in four months. Next year I shall
try to produce them in three months, and I shall then
have increased my rate of return or decreased my costs.
The time element evidently is sometimes important for
cost accounting, and it figures prominently in national
budgets. But we might, in the third place, measure rates
of return or costs by income per capita of the popula-
tion. If the output of wheat per capita is ten bushels in
one year, and twelve the next, we may call this gain the
THE LIMITS IN DISTRIBUTION 185
equivalent of cost reduction. We may feel that it reduces
our cost of living. We may measure our purchasing
power in that way, and feel downcast or elated according
to productiveness per average inhabitant.
But if we pass over to the competitive norm, the rate
of return in concrete goods becomes less significant than
the income of dollars and cents per outgo of the same.
The farmer, thus, may not care whether he grows more
wheat per acre, or even more wheat per outlay in goods
and services. He may simply ask: What will I get in
money for money spent? If I grow less wheat, but sell it
at a higher price I shall have raised my profits. My
costs will be relatively lower. My income having grown
while my expenses remained constant, my expenses have
practically shrunk.
The correct analysis of cost thus leads us to the con-
clusion which Marx himself could not escape, but on the
contrary placed candidly before his readers. To wit,
socialism cannot decrease costs unless it raises efficiency.
It will not really confer a benefit upon the consumer,
though nominally it sells commodities at cost. The list
of costs will have changed. The names may not be the
old. But the ratio of income to outgo for the nation as
a whole is no better except invention and organization
reduce the outgo of effort and material relative to returns
in material.
There will be probably no insurance of capital such as
we know to-day. There will be no profits going to a small
group of entrepreneurs. But there will be the outgo of
raw-materials, of wages in the shape of goods, most of it
being paid to the producers of concrete commodities or
of personal services, but some of it to officials looking
after the non-economic duties such as maintenance of army,
of the department of justice, etc. There will furthermore
186 THE LIMITS OF SOCIALISM
be reserves for unforeseen losses, for replacement of capi-
tal goods, for expansion of business when and where nec-
essary, and for charity and pensions. The cripples in
body or mind will be taken care of, and the aged will re-
ceive regular remittances which will be paid out of prices
and products figuring in socialistic costs.
But the costs, though determinable in general, will not
be measurable for a particular article. The use of ma-
chinery precludes such a possibility, and besides, there is
the joint product, the by-product, for which costs cannot
be computed except very indirectly. The imputation of
values to services and to commodities will be as arbitrary
under socialism as it ever was. The number of hours it
took to create a certain article or its value will in most
cases not be ascertainable, since many men have worked
together and simultaneously to produce it, to say nothing
of overhead expenses and the costs in work hours, of
machinery and management and of particular inventions
basic to the productive act.
Prices, in fine, will be fixed somewhat arbitrarily to
agree with the ideals of living. The socialistic standard
of living will keep some articles cheap so all may buy them,
and raise the price of high grade luxuries, supposing they
are produced at all.
6. The Socialistic Principle of Distribution. To
assure the average man a decent livelihood prices for serv-
ices too will be put nearly on one plane. The revaluation
will not only cheapen necessities, but it will give the
humblest laborer a return in wages sufficient for all ap-
proved wants. Socialism will measure productivity by
work hours. The worker, with certain exceptions, will
be paid according to the time he puts in at the work
bench. It will be assumed that the rate of work, that is
of actual achievement, is for men in like occupations uni-
THE LIMITS IN DISTRIBUTION 187
form, even though some differences may in practice ap-
pear. No other method for valuating services can exist
under socialism. Ten hours of work will be worth twice
as much as five hours.
Exceptions will do justice to striking differences in the
nature of work done. Inventors and novelists, for in-
stance, will be rewarded in a lump sum, or on the install-
ment plan, for creations of unusual and abiding merit.
Managers will receive more than underlings. Those
highly trained in science or skilled in handicrafts will have
more to spend than crude labor. But the latter will at
least have enough for a living standardized by the ob-
jective tests of individual and social welfare. It will, in
general, be argued as Adam Smith did a hundred and fifty
years ago, that " by nature a philosopher is not in genius
and disposition half so different from a street porter, as a
mastiff is from a greyhound ." 5 This viewpoint will
guide the socialist. He will emphasize resemblance in men
more than their differences. He will seek to democratize
effort and rights. He will differentiate with care, but
tolerate no extremes of income. Unlike services, but ap-
proximately like pay for all ! The brainiest will give, and
the numskulls will take. Those who now by mere cunning
and astuteness garner riches will obtain less. What they
lack in creativeness will reduce their income as much as
now the possession of shrewdness raises it above the aver-
age.
Distribution according to need will, if necessary, take
the place of distribution according to number of hours at
work. The least gifted will get more than their product
even as measured by socialism. The standard of living
will be raised for the masses. It will include many items
5 "Wealth of Nations," Book I, Chapter 2. See also Thompson,
W., "Inquiry into the Principles of Distribution," p. 4.
188 THE LIMITS OF SOCIALISM
not now figuring in a wage-earner's budget, and it will allot
some of the essentials in a somewhat better proportion
than seems now practicable.
A Minimum Wage Board recently estimated the wage
necessary for self-supporting women in the printing in-
dustry at sixteen dollars a week. This in the summer of
1919 ! It wished to be just, and itemized the expenses for
each class of wants. It did the best it could to allow for
all essentials, and the showing is not bad at first glance.
But when one notices that for charity and organization
(union-fee?) each it allowed per year five dollars, for the
services of physician or dentist or oculist twenty-five, and
about thirty dollars for recreation, amusement, and self-
improvement, one wonders how much solace the adjust-
ment really brought to the workers. Sixteen dollars a
week is not enough by any norm of living scientifically
sanctioned. It may be the best possible under prevailing
conditions, but it cannot satisfy our sense of fairness, or
the demands of those who compare individual earnings
with the aggregate social dividend.
Actual needs are not, furthermore, the same for all
people. If distribution is to meet needs rather than pro-
ductivity however measured the differences in men
and their occupations will have to be duly considered. It
will be one of the trying questions of socialism to find out
what is best for different people. When the variety of
goods is as great as in modern times the individuality of
taste has plenty of room for exhibition. There will be
differences according to temperament or sex, according to
age and condition of body and mind, according to climate
and season, and according to types of occupation. It
is not simply a matter of preferences such as may prop-
erly be ignored, but rather of habits the indulgence in
which may play a vital part in the productiveness of the
THE LIMITS IN DISTRIBUTION 189
worker. It is a matter first of educating tastes correctly
by positive and negative means of control, and secondly
of adjusting the price of goods so that variety of taste
may be met to the satisfaction of the largest number.
For this reason price fixation will have but limited use-
fulness. It will be the duty of socialists to permit the
individual as much freedom in his purchase as seems to
agree with his personal welfare or with social efficiency,
but just where the two conflict it will not always be easy
to determine.
CHAPTER VIII
THE LIMITS IN CONSUMPTION
i. The Nature of Consumption The subject of
consumption occupies a peculiar place in the history of
economic thought. It has from early times on been re-
garded as an integral part of the science of economics,
and yet its treatment has varied greatly. Some have
viewed consumption as a value aspect, some have ap-
pended it to treatises with the thought of showing the
bearing of extravagance on public revenues. Some have
given it scant courtesy in a discussion of wages, and oth-
ers have made it the key to distributive facts in general.
It does not matter what consumption means to the or-
thodox economist. The socialist is professedly governed
by the ethical interpretation which Ruskin summed up
sententiously if obscurely, in the phrase : " There is no
wealth but life." What life, we ask?
Socialism has helped men to find the objective tests of
social prosperity. It also has promoted a fitting regard
for the non-economic expressions of economic principles,
it some limits of consumption remain that socialists
often overlook, or deem extraneous to their subject mat-
Consumption should not be defined primarily as a loss of
values incurred m ttie production Ol 6theT Vklues, Of as 1
destruction of values or of physical things, though the
destruction of food for instance has deep significance for
the farmer who must replace it annually. A great many
commodities are not used up in the act of consumption,
190
THE LIMITS IN CONSUMPTION 191
books and paintings and musical compositions and radium
and water power being examples. On the other hand,
wealth will deteriorate and crumble whether we use it or
not, and values competitively calculated may shrink and
expand, for instance the price of stocks, independent of
even the influence of weathering.
The real meaning of consumption from a social stand-
point is use for reaction physical and psychic. Whatever
we react upon is part of our environment. Whatever we
respond to has been in a sense an item for our consump-
tion. To consume by responding to stimuli, this is the
gravamen of life. Social science can do no more than
study the relation of stimuli from without and from within
in so far as they proceed from, or influence, our wealth re-
lations. Consumption is the act of absorbing and assimi-
lating things economic, food being converted into blood,
communication into knowledge applied, experiments into
habits becoming second nature. Consumption is the pro-
cess socially directed by which product is converted into
personality.
2. Consumption and Human Nature But the ef-
fetfts of consumption on human nature are not measurable
in the degree that socialists have now and then believed.
The economic interpretation of history may emphasize
the relation between economic income and psychic outgo,
but it should not induce us to expect the impossible.
Evolution is a process almost too slow for human com-
prehension. We might indicate its course by a line a foot
long and then add a wee speck to mark the historical
epoch of which man is, through records more or less re-
liable, a witness. The momentum of that long line of
tendencies is so great that no one century of reform can
overcome it. We must not count on the mutability of
human nature, because eons of time have gradually made
192 THE LIMITS OF SOCIALISM
it what it is. The economic interpretation of the past is
right when, judging by present experiences, it traces an
interrelation between environment and man, between food
conditions and physique or mental development; but it
errs if it ascribes to our historical economics an influence
over the shaping of human traits. These traits are much
older than history. They cannot be re-made by environ-
mental control, but only be used in such ways as will suit
the needs of the moment.
Socialism will not change human nature, though it turn
upside down the present order of things. The La-
marckian thought of the transmission of acquired charac-
ters has not so far met with a cordial reception, though
it has been put to many tests and made some friends
among authorities. For one thing, socialism is little af-
fected by the acceptance or rejection of Lamarckianism ;
for another the doctrine is, in its original and most con-
sequential form, discarded by modern biology.
Socialists like social scientists in general can afford to
ignore the Lamarckian idea because it revolves about pe-
riods of time in which contemporary science is not directly
interested. If acquired traits were immediately hered-
itary in a determinable way the socialist would have to
create his economic environment for each generation anew,
so as to offset what traits might have been transmitted
from parent to offspring. Either he does this, or he must
stabilize his environment so completely that all inherited
traits originated in an environment would suit all future
environments. But since life is continuous change
through interaction, and since all man-made environment
changes from decade to decade, the adjustment for each
generation would have to be made independent of the prior
one. New characters, new economic conditions, this would
be the recipe.
THE LIMITS IN CONSUMPTION 196
But it appears at once that such a rapid acquisition of
traits would, first, make man much less stable than we
know him to be, and secondly, would give the reformer no
advantage, since good traits might speedily degenerate
into undesirable ones through a lack of proper environ-
ment control during one single generation. The breeder
of animals and plants would be similarly embarrassed if
Lamarckianism were so construed, and eugenics, of course,
could never hope to evolve a right mankind, because many
uncontrollable environmental influences would botch his
selections and cultures.
So it can only be a question as to what the environ-
ment accomplishes in the long run, say in the course of
millions of years. This view of Lamarckianism seems
the only logical one and has been given wide recognition
by experts.
3. The Biological View of Environment A bi-
ologist of note has defined an acquired character as a
" structural change in the body of a multicellular organ-
ism, involving a deviation from the normal and induced
during the individual lifetime by a change in environment
or in function, and such that it transcends the limits of
organic elasticity and therefore persists after the factors
inducing it have ceased to operate." In other words,
the proof of transmission by organic descent of an ac-
quired trait is the fact that it continues to function after
the factors responsible for its emergence have disappeared.
If the son acts as the father did, because of traits aroused
by the father's environment which, however, does not act
on the son, then the particular trait is inherited and the
acquired one has become organic. The precise problem
of biology is: Does such a transmission commonly take
place? Is the effect of environment upon offspring
i Thompson, J. A., "Heredity," p. 173.
194 THE LIMITS OF SOCIALISM
specific or general, direct through the germ-cell or indi-
rect via the body-cell, cumulative or non-cumulative in
the sense that the inherited trait is not intensified without
further environmental influences?
Now, the facts of cytology advise us against the ac-
ceptance of Lamarckianism. The view " that the germ-
plasm responds directly to the experiences of the body
has no substantial evidence in its support." And the
writer of these words adds : " I know of course that the
whole Lamarckian school rests its argument on the as-
sumption that the germ-plasm responds to all profound
changes in the soma ; but despite the very large literature
that has grown up dealing with this matter proof is still
lacking. And there is abundant evidence to the con-
trary." 2
Experiments speak in favor of, rather than against,
Weismann's doctrine of non-inheritance. The impossi-
bility of knowing, especially as regards human beings,
whether a trait is really congenital, and whether certain
environmental data are essential in the development of an
inherited trait acquired by the parent, militates indirectly
against Lamarckianism. But the facts first gathered by
Mendel, the Austrian amateur biologist, in his experi-
ments with the edible pea have enlarged our understanding
of the functions of bi-sexual reproduction so that to-
day, after years of investigation, agreement seems to have
been reached on the points most significant for social sci-
ence.
The seat of heredity has been traced to minute, ultra-
microscopic entities imbedded in the chromosomes which
in turn are part of the nucleus of every germ cell. It is
held that such unit factors must exist because without
them the results of hybridization remain inexplicable,
2 Morgan, Th. H., " Heredity and Sex," p. 17.
THE LIMITS IN CONSUMPTION 195
while with them nearly the whole mystery of heredity, sex
determination not excepted, appears solved. Three pos-
tulates, according to an eminent authority, lie back of
the doctrine of unit-factors which determine plant and
animal traits, including those of the specie homo sapiens.
Namely the assumption that the factors are constants, that
two factors for each trait are lodged in the cell, and that
these factors segregate, or remain segregated in the ma-
turing germ-cell. Grant this, as the facts of the case urge
us to, and the riddle of inheritance offers no insurmount-
able difficulties. As Professor Morgan puts it : " The
validity of the unit-factor conception rests upon the fact
that whenever (as often happens) all other conditions,
external and internal that modify characters, remain con-
stant, then clear-cut ratios are obtained which can be ex-
plained only as due to segregation, in definite ways, of
particular hereditary factors that perpetuate themselves
unchanged from generation to generation." 3
The " factor " in the chromosome therefore is the fash-
ioner of human traits and in a sense, of history. Human
traits are built out of them, and each factor affects others
while it in turn may be affected from several sides. " A
single factor may have several effects, and a single char-
acter may depend on many factors ." 4 But " the real
unit in heredity is the factor, while the character is the
product of a number of genetic factors and of environ-
mental conditions." 5 Which is to say, what practically
all geneticists admit, that the influence of the environ-
ment is real, though indeterminate and indirect. To
quote once more from Professor Morgan : " There is a
small amount of evidence, very incomplete and insufficient
s Morgan, Th. H., " The Mechanism of Mendelian Heredity," p. 47.
* Ibidem, p. 210.
s Ibidem.
196 THE LIMITS OF , SOCIALISM
at present, to show that changes in the environment reach
through the soma and modify the germinal material." 6
The extreme view, therefore, that " by the shuffle and deal
of the hereditary factors in the formation of two of these
cells in fertilization our hereditary natures were forever
sealed " 7 should give way to more moderate notions of
a primary influence working hand in hand with a sec-
ondary from outside.
The fundamental fact is the interaction of the de-
terminers in the chromosomes. Each factor will bear on
the other. " An overstatement to the effect that each fac-
tor may affect the entire body is less likely to do harm
than to state that each factor affects only a particular
character." 8 But in addition we have the circuitous
route of outside forces in reaching the germ-cell. Human
nature is affected from the outside, by post-natal experi-
ences, so that the offspring will manifest the result; but
the effects are general. No ratio between experience and
variation in particular traits can be established. " The
effect is general rather than specific, and the result as
seen in the offspring has no discoverable correlation with
any particular part or structure of the parental soma." 9
Furthermore, the number of possible combinations by
these factors is so immense that, if their shuffling and
permutations fashion the characters recognized by man,
it is well possible to obtain countless shades and varia-
tions, even supposing the environment had no force what-
soever. The chief result of bisexual reproduction is a
Morgan, Th. H., " Heredity and Sex," p. 18.
7Conklin, E. G., "Heredity and Environment," p. 463. (I. Edit.)
s Morgan. Th. H., " Critique of the Theory of Evolution," p. 72.
Guyer, M. F., " Being Wellborn," p. 135. Similarly Thorndike,
E. L., "Educational Psychology," Volume III, p. 310. But for a
leading authority against the Weismannian view see Cope, E. D.,
"Primary Factors of Organic Evolution," especially pp. 392-443.
THE LIMITS IN CONSUMPTION 197
much greater diversification of traits than a sexual life
permitted. But it also brings about the ratios first ob-
served by Mendel, and other ratios which, though orig-
inally interpreted as exceptions to the rule, soon were
explained as results of combinations unsuspected by
Mendel. In the long run, on the principle of chance vari-
ations, regularity in appearance of traits was inevitable.
Dependent upon the number of factors, and upon their
bundling in the formation of unit-characters, parents
would bequeath traits to their offspring in fixed propor-
tion. Per thousand or million of inhabitants such and
such traits would recur with astonishing regularity. In-
deed, the logical bearing of the laws of probability and
error upon genetics has been acknowledged with en-
thusiasm in support of eugenic programs. In the words
of one geneticist : " Nothing is clearer than that the
inevitable consequences of bisexual reproduction and of
the manner of growth by the halving of the cell-con-
tents is to insure that character-combinations, effected in
this manner, are brought together in definite mathematical
proportions not far from those expressed in the expan-
sion of the binomial. This is the real foundation of
Mendel's law for characters that do not blend, and it also
expresses the relative proportions of characters that do
blend." 10
The latter is the most important point for socialism.
It does not matter whether a human trait is deemed a
unit in the cytological sense or not. All traits recur on
the principle of average and frequency of errors as
mathematicians understand the terms. " The differences
in hereditary endowment of strength or intelligence,
of stature or longevity, of fertility or social disposition,
have a certain regularity of distribution, so far as we can
10 Davenport, E., " Principles of Breeding," p. 546.
198 THE LIMITS OF SOCIALISM
measure them at all. They conform to what is called the
Normal Law of Frequency ." n In this sense, there-
fore, human nature is constant. Our experiences in
everyday life are confirmed. Historians hear their own
verdict repeated, and reformers know what not to expect
from reforms.
It is not likely that the abolition of private property
will affect posterity through the living generation, ex-
cept by way of social heredity. Organic heredity will
play no part in the change. Genius will be more plenti-
ful perhaps, and certainly types of subnormality ought
to become rarer, but we can no more measure a crop of
genius by economic income than we can improve the
human race unerringly by the application of genetics to
society.
In the case of genius we have still to acknowledge that
the occupation of parents and grandparents seems to
have exercised no measurable influence upon the direction
genius took, and that the characteristics of one eco-
nomic period have never given us a clue as to the sorts
of genius born in the next epoch. We only know that
superior civilizations have excelled in the production of
genius, and that these titans of intellect themselves ad-
vanced the thought of their age. We do not know
whether genius is a mutation in the biological sense,
or whether it should be classed as a normal fluctuation,
non-hereditary and insignificant for evolutionary pur-
poses.
Fluctuations have been defined as continuous variations
" which are graded, the extremes being connected by a
complete series of intermediate conditions." 12 A Muta-
tion according to one authority, is " a discontinuous
11 Thompson, J. A., "Heredity" (2nd Edit.), p. 523.
12 Castle, W. E., " Genetics and Eugenics," p. 56.
THE LIMITS IN CONSUMPTION 199
germinal change arising from a physical or chemical alter-
ation in the structure of the organism, or of one or both
of the germ-cells which produce a new individual, or from
such a change arising in certain cells elsewhere in the life-
cycle of the organism, this change being capable of com-
plete inheritance at least in some of the offspring,
although reversion may occur in others." 13 What is
known of genius might be classed with either definition,
but it does not matter much because mental traits are not
known to be subject to Mendelian laws of heredity. The
cultivation of genius, that is of types of men most in-
fluential in the development of races, cannot as yet be
considered a subject for science.
The scope and usefulness of eugenics is, in fact, seri-
ously limited by several gaps in our knowledge of the or-
ganism. We do not know exactly what constitutes a
human unit character, though it is agreed that a single
mental trait is compounded of probably many factors in
the germ-cell. 14 It is of first importance to ascertain the
correlation of good characters, or of the good with the
bad, so the latter may be culled out if possible; but the
data for such procedure are altogether lacking. It is
admitted that human beings, unlike lower forms of life,
continue to grow mentally long after physical growth has
stopped. In many cases mentality develops most rapidly
after the mating age has normally passed, say from the
thirtieth year on. It would therefore be a mistake to
judge the fitness or excellence of a mating couple purely
by its qualifications at the date of marriage. And again,
the means of detecting inherent faults and of regulating
marriage are exceedingly uncertain. It will always be
is Gates, R. R., " Tne Mutation Factor in Evolution."
i* See e.g., Thorndike, E. L., "Educational Psychology," Volume
III, p. 268.
200 THE LIMITS OF SOCIALISM
difficult to accomplish in the breeding of humans what the
animal breeder has already achieved.
And finally there will be much disputing as to what
the desired type of manhood or womanhood is. What
kind of man is wanted? This is the paramount question
which the combined training of natural and social
scientists may not enable us to answer. There exist no
records by which we may be guided. Each group of ex-
perts will describe the ideal man, and in many points the
agreement of groups will be ample. 15j But on others no
unanimity will be reached. History and sociology only
teach the predominance of several types of men, and the
apparent necessity of a large number of types for the at-
tainment of unusual things. Civilization needs many
kinds of people. Specialization should not be coun-
selled merely as a precept in education, but if it were
possible the eugenist should seek to produce strains highly
specialized, so our learning period may be shortened or
natural aptitude bring greater results.
A change of the proportion in which different types of
men now are born must plainly have a momentous effect
upon future history. But the eugenist seems as help-
less in this matter as the socialist. Both must acknowl-
edge their limitations. Genetics has not yet furnished
us a clue to the elimination of all the unfit, and socialism
cannot hope to root out all evils in social life by rooting
out private capital. Socialists, however, have the ad-
vantage in that the direct and indirect influence of the en-
vironment upon the living organism is known and often
measurable. Socialists will always have a large field for
is For leading classifications of People according to dominant
traits see, for instance, Ratzenhofer, G., " Soziologische Erkenntnis";
Patten, S. N., "Development of English Thought"; and Giddings,
F. H., " Inductive Sociology."
THE LIMITS IN CONSUMPTION 201
action regardless of what eugenics may claim for itself.
The more fickle human nature, the more important a
right economic environment for each living generation.
The more constant human nature, the more pressing mani-
festly our duty to adapt man to his environment and to
redirect his inclinations as the facts of social science ad-
vise. The economist, like the socialist, cannot lose by
any answer finally given to the Lamarckian query, but
in the light of current investigations the necessity of
sound economy and of wise government seems more obvious
than ever before. The variables lie outside of man viewed
socially, for while variation is fully as significant as
heredity, the law of probability applied to the workings
of the hereditary mechanism assures us of a fairly con-
stant distribution of departures from type. Some traits
are shared by all men. The instincts may be classed
among them, though their degree of strength varies.
About the more universal we group the less universal
human traits. Special deviations occur, but not fre-
quently. The more marked a deviation the rarer it is.
Thus the core of human nature seems to remain the same.
Doubtless it only seems to, for everything changes, the
fundamental traits of man not excluded. But the change
is so gradual that we do not notice it. It is as with the
sun which is said to move toward a far out point in the
cosmos. We picture it in motion, and yet make it a con-
stant because of the revolution and rotation of the earth,
which is so much more in evidence. We ignore the move-
ment of the central body and heed only those of our own
planet. Human nature may be called a constant for
much the same reason.
4. Income and Efficiency What we can do with
men by raising their income is a problem each generation
202 THE LIMITS OF SOCIALISM
must solve anew, 16 but the uncontrollable recurrence of
types manifestly sets bounds to our reforms. We should
not expect to double efficiency because we double library
facilities, and we should not guarantee people happiness
because we have added to their creature comforts. The
powers of response to economic stimuli such as goods em-
body cannot be arbitrarily developed, though something
may be done with them. The circumstance thfct all ex-
periences are interrelations should convince us of the
fatuity of adjustments in one quarter only. It takes
more than one element in education to arouse our dor-
mant faculties, and it takes many combinations of per-
sonal traits and objective facts to make man contented.
Perhaps we shall succeed in mastering some of them, but
not all.
In so far as the end of consumption is the development
of innate powers for actI6rT7"a sufficient economic income
is of course a prerequisite. But since only that is part
of our world which we react to. consciously or uncon-
sciously, much income is sure to be wasted. It will bring
no psychic returns. It may ufldeT special direction b'e
used to stimulate reactions and intensify them, but in it-
self it may remain inert. Either the initiative is inborn,
or it must come from outside through the facts of socia-
tion in general and of education in particular.
Nothing is more familiar than the sight of people who
command wealth, but stand helpless not knowing what to
do with it. People are surrounded with art treasures,
but derive no benefit from them. Opportunity beckons
them on all sides, but they will not be inspired. Exten-
iThe effect of social environment on genius and achievement is
stressed notably by Ward, L. F., in his "Pure Sociology," and in
his later "Applied Sociology," where Chapter 9 deals with an
eminent French study on this subject.
THE LIMITS IN CONSUMPTION 203
sive travels yield no lasting productive impressions.
They see but do not understand. They listen, but do not
heed. They associate with the best, but fail to assimilate
the best. Suggestions come to them from all sides, but
nothing valuable is constructed out of them.
Many scientists worked without funds or apparatus and
laboratory, yet they opened up new and large fields of
investigatfon the results of which we call modern civiliza-
tion. It is not the number of facts mastered by Aristotle
that put him in a class by himself, for many a youth to-
day has more of them at his fingers' ends than the in-
ventor of the syllogism had ever heard of. Rather it was |
what he put into the few facts he knew, the meaning he
gave them by properly correlating them, and the rules of
conduct he deduced from them in his search for a richer
life. A Newton could invent calculus to solve self-imposed
problems of physics and astronomy. A Galileo or
Lavoisier or Faraday or Helmholz could found a new
science without the aid of expensive instruments.
We shall always have with us the thinkers and the
tinkers, those who blaze a trail and lead us to new realms
of wonder, and those who patch up matters for a while,
but are useful in no finer sense. We shall probably al-
ways have men of renown and the mediocre who shine by
reflected light. Education will help the slow-witted but
it cannot lift them far above their level. Curricula do not
make scholars, nor can tutors make wise men out of fools.
The progress of science and of educational facilities
during the last hundred years testifies eloquently to the
worth of great men. In some measure, too, it has bene-
fited the man of average ability, though he has not been
given the chance that he should have. It is not then a
point of questioning the importance of education. On the
contrary, leaders in the future will wish to vulgarize it
204 THE LIMITS OF SOCIALISM
more than ever, and do it in a thoroughly democratic
manner. Even if much time is wasted in culling the
talented from the incompetent, even if the best pupils
should suffer from the partialities shown to the dunces, it
is better that we raise the general level of intelligence an
inch than that of a chosen few a foot.
But on the other hand it must be admitted that school-
ing has limited functions. The recent multiplication of
institutions of learning, of art works and museums, of
public libraries and of free lectures for the delectation of
curious folk has not brought the results that might have
been offhand expected. The response often has been half-
hearted and insincere. The fruits have not repaid for the
labors of cultivation. The instructor has not found his
audience react in a scientific spirit. Education has even
spoiled some for lines of work they were naturally fitted
for, while many who went without a long drilling in techni-
cal subjects have nonetheless emerged out of the struggle
for life with a creditable showing, both in earning money
and in contributing toward the world's welfare. At all
times, it may be said, education has played a less vital
part in the development of exceptional personalities than
the friends of erudition have liked to confess.
Printing has practically done away with illiteracy, but
not with paucity of ideas. Books nowadays are cheap,
but thinking is still rare. People have garnered rich
stores of fact, but failed to build with them. They have
remembered, but not applied knowledge intelligently. In-
telligence comes slowly. Intelligence is the power of con-
quering unforeseen obstacles in theory or practice. In-
telligence is the chief weapon of modern times for defense
and offense in production. The number of those who have
learned to imitate or to understand what was taught at
school grows steadily, but the ability to formulate new
THE LIMITS IN CONSUMPTION 205
problems calling for new solutions is always rare.
Yet, because education is so important and leisure a
prerequisite to it, socialists rightly insist upon an exten-
sion of both. The question thus arises: How shall the
additional amount of spare time be used? For rest and
entertainment, yes. But also for development of the
self and of a social sense. Increasingly the last genera-
tion of workers has had spare time for all of these pur-
poses, but past experience does not permit one to hope
that the granting in itself of leisure will suffice. The
cheapening of consumption goods has sometimes cheap-
ened also our appreciations of art and science. And
similarly additional leisure may be abused unless socialism
provides the right sort of guidance. One is impressed
with the limitations of possession, that is of income, when
one watches the way in which people utilize it. To listen
to popular music played on the automatic piano, for in-
stance, or to the graphophone is to lose faith in the power
of riches. Taste has been little improved, but shallow-
ness is daily encouraged. The magazines still pander to
frivolous inclinations and thoughtless readers. The
" best seller " is proverbially an inferior piece of litera-
ture, and no doubt will remain so. The masses do not fre-
quent our museums, though they have plenty of time for
trivialities. The stage does not appeal unless music is
reduced to oddities of rhythm and the play made a farce
or a melodrama. Everywhere we see tricks of trade
prosper, but true art perish.
Up to the present this may have been an inevitable
result of our educational system, or of the stigma put
upon serious endeavor in pastimes. But if socialism is
to elevate social welfare to its noblest heights and give
maximum health and intellectual vigor to all, it will have
to revise the leisure schedule also. Much teaching in this
206 THE LIMITS OF SOCIALISM
direction will be needed; much patience and sacrifice on
the part of the most highly gifted. Formal schooling will
help, but a public supervision of amusements, a fostering
of a community spirit for mutual enjoyment and aid will
do even more. The socializing functions of play and art
have not yet been fully recognized. The charm of en-
joying goods in common has not been sufficiently revealed
to us because the private property concept has made
us suspicious where we should have been open-minded.
Leisure may invigorate body and mind, or it may cloy our
senses and kill ambition. The habits of the wealthy
should be a warning in this respect. They, too, have
made less use of their opportunities than seems right.
Even among them time drags and ennui is a malady. For
lack of natural capacities income and leisure have re-
mained sterile. It has brought no fruit because the inner
means of response were not developed.
5. Income and Happiness. What is true of the
limits of consumption in developing efficiency and a proper
use of consumables is also true of the relation between
pleasure and riches. Socialism will not add greatly to
happiness, though by objective tests our level of living
will be higher. But as remarked before, the objective
tests may disagree with the subjective. It is time that
people dissociate pleasure from prosperity and judge
each by its own indications.
Pleasure as the opposite of pain has of course been
eulogized ever since men have breathed and pondered on
final values. The cynics of old thought nothing worth
while. They belonged to an age in which the old faith
was crumbling and the new knowledge was not able to fill
an emotional void. When belief in the gods goes and
doubt permeates all fields of inquiry a resort to cynicism
is natural. Energy must have an outlet somewhere. But
THE LIMITS IN CONSUMPTION 207
it might seem strange that even in modern days
philosophers have returned to the calculus of pleasure and
pain, were it not that they kept in mind the need of uni-
versalizing pleasure, instead of centering it in the in-
dividual, and that they reasoned from premises no longer
accepted by science. They hoped to make all states of
feeling quantitatively measurable so that avoidance of
pain became the equivalent of pleasure. They sought to
please the largest possible number, and aimed at better-
ment for that reason, seeing that the masses then had
many duties and few privileges.
Hedonism, however, has gone the way of other dogmas.
It rendered the eighteenth century a service, since it pre-
pared the way for Enlightenment and the French Revolu-
tion, but it no longer meets our requirements because we
know that not all feelings can be classified and compared
like so many yards of ribbon. The weakness of every
subjective norm is its elusiveness. We cannot tell when
people are happy. Or if we do dare to, we may be as-
sured quite to the contrary. States of feeling cannot
satisfy the student of welfare unless they have an ob-
jective correlate, the ratio of the two being more or less
definite. But such is not the case.
There are pains akin to pleasure, and states of happi-
ness that bring an undercurrent of chagrin. Just as sick
men have been known to work creatively and enjoy life
though stricken with agonizing diseases, so trying ex-
ternal conditions have at times been forgotten over the
pleasures of work or of buoyant energy. Brief pleasures
have brought lasting misery to some, and painful moments
have been deliberately courted because they promised en-
joyment thereafter. The miser rejoices in the misery of
his greed, and the prodigal bemoans his fate while squand-
ering all.
208 THE LIMITS OF SOCIALISM
Pleasures cannot be measured by income alone, and if
they could be it would not mean anything for science, for
socialism, of for social welfare. Happiness is not always
the same as pleasure, if by the latter we mean sensa-
tions externally stimulated. But for the most part those
who are pleased are happy. It is difficult to tell one from
the other, unless we arbitrarily consider one a selfish in-
dulgence, and the second an emotion socially sanctioned.
But such distinctions are of little import.
The main fact is our inability to create happy states
of being at will. We can promote happiness only by pop-
ularizing health, wealth, and efficiency. In the long run
health means enjoyment. On an average the well-fed and
properly clothed suffer less pain than the paupers who
have nothing. As a general rule the most intelligent and
efficient have sources of happiness not possessed by the
helpless.
Yet, whether education and intelligence offer compen-
sations in the way of happiness for the pleasures common
among the ignorant is doubtful. Perhaps it would not
be too much to say that happiness is essentially an attri-
bute of youth. When we are young and strong, when
energy is at a maximum and the power of resisting hard-
ships great, then we enjoy life. Happiness is for those
in the early stages of life when the blood flows swift in
our veins and the metabolic process quickly replaces waste
tissue and poisons. Youth means ignorance and in-
nocence, and both are sources of contentment. Happi-
ness should not be felt, to be real. When we begin to rea-
son about it we probably have lost it. In this sense
happiness is youth remembered by old age.
In later life however many sources of happiness arise
that childhood is a stranger to. The compensations for
toil and duress, for doubt and worries, come in the shape
THE LIMITS IN CONSUMPTION 209
of creative work or of success in conquering a self-im-
posed difficulty. Self-measured success is the acme of
happiness. We learn to master ourselves and to help
others. There is leadership and a happy home, or friend-
ship and convivialities intellectual or otherwise. There is
relaxation and a venting of energy at games. We have
the applause of the multitude, and affection for and from
others. All these are types of contentment constituting
in the aggregate a happy state of life. If the Jefferson-
ian phrase ever meant anything it must have meant such
things, although the thought of rating public welfare by
such personal rights and reactions spoiled much of the
effect which this creed had upon a later generation.
But if happiness may come so independent of income it
clearly may vanish also without regard to income. There
are occasions for unhappiness that no one system of pro-
duction or consumption will remove. Most of our
troubles, indeed, come from within. At any rate we may
call the environment, in this connection, a constant and
declare our feelings variable according to our inborn pre-
dispositions. We are annoyed by trifles in personal re-
lations. We chafe at restraints and slights that even the
equalization of wealth and ability cannot rid us of.
Human traits are such as to make a certain amount of
friction unavoidable. We are bound to struggle and
suffer in a measure. Comparisons will always be odious,
and failure to accomplish what we set out to do will irri-
tate us to the quick. Envy and suspicion, peevishness and
false pride embitter the life of many. There is no cure
except through gradual adjustment with the aid of edu-
cation ; or perhaps still more so, through breeding accord-
ing to temperament. Eugenics might in this regard ac-
complish what economics and socialism must give up as a
hopeless task.
210 THE LIMITS OF SOCIALISM
Socialism, in fine, can help the masses greatly by
economic control since leisure, education, health and
efficiency go inseparably together. But it would be folly
to expect a millennium of happiness for people simply
because we have bettered the objective facts of living.
The aim of the reformer cannot be happiness; it must be
achievement and welfare socially measured. But that is
far from ensuring the average man greater bliss con-
sciously felt.
CHAPTER IX
THE LIMITS IN GOVERNMENT
i. The Relation of Empiricism to Political Democ-
racy. The Communist Manifesto of 1848 concluded with
the memorable words : " Workingmen of all the world,
unite." It was the final and most stirring appeal of the
founders of socialism to the masses whose slavery they
hoped to end by a revolution. The nation was not
recognized by Marx as the indispensable unit of social
life. The fact of the brotherhood of men everywhere was
to displace it and make nationalism unnecessary.
Yet it was significant that the fiery words of Engels
and Marx were addressed to the international proletariat
for a battle against capitalism. The call was not for
peace; it was for war on the exploiters who must be
subjugated first before the brotherhood of men could be-
come real. Socialism, thus, introduced the idea of cos-
mopolitanism with a reminder of class struggle, and it ex-
pected to establish democracy only by throwing out of
the saddle the proud managers of big business. This
was a gain and a loss both. It marked an advance over
old ideals because the test of democracy was sought in
something more important than the right to cast a
ballot, and it seemed a step backward because a supposed
iron law of wages was to be abrogated by iron force.
So the adherents of socialism long interpreted the Mani-
festo, and with this thought of a revolution quickening
the pace of evolution they went to work.
Socialism is a clarion call to action for liberating the
211
THE LIMITS OF SOCIALISM
masses. The proof of true socialism is the fraternizing
of all men regardless of race or color or nationality, and
the extension of the principle of equal rights to all
spheres of social activity. Socialism is nothing if not
economic democracy internationalized.
What can be said for democracy and internationalism?
The thought of democracy doubtless is as old as
history, though the word was not coined till the Greeks
learned to reflect on the problems of city government.
Aristotle then made his distinctions of types of govern-
ment and gave reasons for preferring a moderate form of
democracy in which the people had a nominal share, but
which was really in the hands of a selected few, to
monarchy. Democracy as the rule of the people was thus
early construed to mean a government by the few for the
many.
It was important, however, that the Greeks were the
first to trace the origin of society, for in this way they
hit upon the ideal of a state of nature in which all men
had been free and equal. The sovereign, they averred,
was in those primordial days either the father of the
family, or the strongest, most assertive and capable at a
crisis. Sovereignty therefore came to signify absolute
power, and this has been its main attribute ever since.
He is sovereign who has no superior, who exercises his
power as he pleases, and who rules by his own initiative,
whatever assent expressed or tacit may come from the
governed.
The ingenious notion of a compact whereby the free-
men living in a state of nature, protected solely by their
personal strength and cunning, relinquished their liberties
for the sake of ending interminable feuds, added ma-
terially to the reputation of Greek philosophy, besides ex-
ercising a lasting influence over the development of modern
THE LIMITS IN GOVERNMENT 213
politics. From the seventeenth to the latter part of the
eighteenth century nothing seemed so self evident as that
people, having been originally endowed by their creator
with certain inalienable rights, could have given them up
only on terms suitable to themselves, self -protection and
the promotion of the social welfare being plainly among
the aims of government. It followed from this amplifica-
tion of an ancient doctrine that the overthrow of the
divine right theory of kings was a duty rather than an
act of sedition.
The development of natural science strengthened this
view of the situation. The founders of physics,
astronomy, and biology were men who had little patience
with the metaphysical viewpoint. Their concern was the
investigation of facts and the establishment of laws by
the experimental methods. Where induction was out of
the question, the time-honored syllogism did its work, but
it was understood that no matter how philosophy might
proceed it would start with certain assumptions that
begged the ultimate questions professedly answered. In
this spirit the empiricists before long became materialists
who considered the world a huge mechanism, and some-
what in harmony with this realistic attitude they also
treated problems in social life. They favored the utili-
tarian notion that government is for the governed. They
found in the theory of a compact between people and
sovereign nothing very objectionable. They were with-
out exception opposed to crass monarchism and took for
granted the limitations that gradually were placed upon
the Crown.
The idealists in philosophy, on the contrary, stood with
the exception of the gentle Spinoza for state-rights, that
is to say for the supremacy of the body politic whose head
wielded unrestricted powers. Descartes, Leibniz, Wolff,
214 THE LIMITS OF SOCIALISM
Kant and Hegel all belonged to this class of thinkers
whose tracts on government reflected the absolutistic
spirit, not only of their political masters, but also of their
own metaphysical doctrines. The difference in this re-
spect between the idealists and empiricists has not been
widely noticed or frankly admitted, but the materials for a
testing can be easily collected. Broadly speaking one may
draw the line of demarcation as suggested: The one
group unfailingly championed constitutionalism in prac-
tice no less than in theory, the other, namely the meta-
physicians, leaned toward political absolutism, even if
ostensibly with some reservations in the other direction.
But needless to say, the advocates of popular sovereignty
had the better of it. Rousseau's notion of the general will
of the people won out.
It carried the day first because it fell in logically with
the general trend of scientific investigations, and secondly
because of the change in economic conditions that is some-
times described by the phrase The Industrial Revolution.
This event inevitably favored the laboring classes in that
its success presupposed certain individual economic rights,
whose counterpart was the principle of universal suffrage
and of legislation in accord with public opinion. Autoc-
racy could not hold itself in the face of such changes,
though as against this it must be confessed that democ-
racy soon received a setback also.
For it lay in the nature of the new economic situation
that the propertied classes held sway over the masses.
To be sure, the qualifications for voting or holding a seat
in the legislature were soon removed or, as in the United
States, never obtained legal recognition. But the en-
franchisement was at bottom more nominal than real,
since there was as yet no possibility for the poor people
to hold office or to swing a vote against the concerted
THE LIMITS IN GOVERNMENT 215
action of the rich industrials and the landed aristocracy.
Those who held the purse controlled the government more
than ever. The vaunted signs of popular sovereignty
proved to be pleasant deceptions that could not compen-
sate the masses for their impotence in the legislative halls.
As the decades have rolled by observers have become more
and more convinced that something else is needed than
the universal ballot to ensure a rule of the people by the
people, supposing that such a motto is really recommend-
able.
As one American writer has recently put it : " Uni-
versal suffrage has not given us a democratic industrial
system. The enfranchised many have failed to translate
their democratic ideals into economic fact." * If it is
true, as W. Godwin believed in his own day, that " de-
mocracy is a system of government according to which
every member of society is considered as a man, and noth-
ing more," 2 then we are not anywhere near our goal, the
use of the representative principle of government notwith-
standing.
But of course the real question is: How far should
government be turned over to the populace, to a plebiscite
on public problems, and what is the verdict of social
science as to the scope of popular rule?
The pamphleteers of the period of Enlightenment, it is
evident, had no appreciation of the real nature of the sub-
ject they discussed so glibly now to vindicate absolutism,
now to forfend the rights of the citizen. To them man
was a finished product of reason chiefly, and society a
state designed calculatingly by its members at an early
1 Hamilton, W. H., "The Price System and Social Policy," in
Journal of Political Economy for Jan., 1918.
2 Godwin, W., " Inquiry Concerning Political Justice," Book Five,
Chapter 14, where Aristotle's famous definition of democracy is cited
with approval.
216 THE LIMITS OF SOCIALISM
stage of human development. The historical sense had
not yet been cultivated. The perspective was that of the
artist who studies a completed picture, rather than that
of a traveler who beholds everchanging scenes and new
possibilities for investigation. To the absolutists, if gov-
ernment was divinely ordained, harmony between monarch
and subject must in the long run prevail. As for the con-
stitutionalist, especially if he accepted the theory of a
social contract, a clash of interests could be quickly set-
tled by a resort to arms, but he supposed after all that
the contract had been so lucidly drawn up, in full view
of the inborn and inalienable rights of man, that an
estrangement between the two parties was not to be ex-
pected.
But the modern view of the situation cannot be quite
so simple.
Manifestly government and people cannot associate so
fraternally on a level as the publicists pictured it.
Rather, the two will unavoidably, in a certain sense, be-
come strangers for the same reason that boards of di-
rectors over a large corporation move in a world differ-
ent from that of the employees. It is not a question of
class privileges or of social stratification, but of special-
ization in work and interests.
A government becomes a piece of social machinery
apart from the general run of people because of the type
of men composing it and because of its duties which eo
ipso imply unique viewpoints. A government, if it func-
tions long enough undisturbedly, will accumulate secrets
of trade just as truly as a business concern, and in addi-
tion it is bound, in the very nature of its work, to guard
important secrets of international relations. Within
limits all governments are self-perpetuating bodies, for no
change of party or power of ballot can prevent the rise
THE LIMITS IN GOVERNMENT
of an elite which, on account of its capacities and experi-
ence, tends to keep close to the throne, distributing offices
among its members. Government cannot be anything else
than a business, if by that term we designate a routine
of work and a center of interests relative to which all
others appear secondary. The governors must act fre-
quently as though their interests were undeniably the con-
cern of all the governed, even when a difference of opinion
might arise at a testing. This is the fundamental fact in
the handling of international matters, and on this score
the monarchists of old condemned popular sovereignty.
But furthermore, Government ere long means for any
nation a set of rules solemnly recorded and carefully pre-
served. It becomes a code of conduct revered by the
people, who are taught to regard nothing more sacred
than the laws of the land, even though they challenge
science and common sense. Government to many people
becomes an institution and a habit, a court of wisdom and
a seat of coercive power from which there is no appeal.
The average man gives his assent by obeying. That is his
way of proving his rights of citizenship unless a special
occasion arises.
2. The Premises of Democracy. But in a deeper
sense the millions can only be indirect agents of govern-
ment, not the immediate supervisors of it, as once was
believed.
Democracy is an ideal of government essential to the
progress of man, but based on assumptions for the most
part in conflict with known facts. The value of democ-
racy is therefore not its literal interpretation, but its psy-
chological effect upon people who would do more than they
can, who need encouragement the more marked their limit-
ation, and who should have the abstraction of justice on
their side no matter how difficult its realization in details.
218 THE LIMITS OF SOCIALISM
The premises of democracy are, first, that all people
know what is needed for public welfare, second, that all
people express their will at the voting booth, and third,
that all those elected to office will do the bidding of the
people. If we grant these three points we are safe in de-
manding an unreserved literal exercising of popular
sovereignty, but the less faith we have in the postulates
the more we shall be inclined to favor a democracy for the
people by some, but not by all, of the people. If the
great majority were qualified to pass judgment on politi-
cal problems, and if, having formed a judicious opinion,
they proceeded to express that and nothing else with the
understanding that their nominees would carry out to the
fullest of their abilities the opinion and wishes recorded in
the ballot, then the more truly representative a govern-
ment would be, the finer the results for all parties con-
cerned. The theory of democracy allows itself consid-
erable license in the premises for the sale of a noble wish !
The obstacles to such unhampered democracy are how-
ever many; and they are of a kind calculated to instill
much respect.
For as to the first premise we can admittedly not rely
on intuitions. What is sound policy for a nation can-
not be inferred from scruples of conscience, nor is it to
be read from the heavens above. Social phenomena are
of all correlations the most complex. We have not yet
progressed far in mastering them. We may never feel
toward them as the physicist feels about his facts of
matter and force or motion. It requires long training
and deep attention to seeming trifles to form an opinion
of worth on matters sociological. Many facts must be
balanced and compared; far more facts than the natural
scientist ordinarily reckons with. Hence the uncertainty
THE LIMITS IN GOVERNMENT
of some rules in social inquiries, and hence the need of
prolonged study for the would be citizen.
But the schooling of the masses has been hitherto un-
fair to them. It has been faulty for several reasons, one
being a one-sided emphasis on subjects remote from our
present environment, and a second the exclusion of the
great majority from the higher curricula. Education
uptodate could never have been adequate to all ideals or
needs, for our limits in production unavoidably debarred
millions from its blessings. As was shown earlier, if we
wish to extend to all children what we now grant ten
per cent, of them we shall have to work much harder and
greatly improve our methods of work in factory and home.
To-day only ten out of each hundred enter high school,
and less than two per cent, matriculate for college work.
The remainder, the overwhelming majority, is sent to the
workbench at the age of fourteen or fifteen, equipped with
a scant reading and writing knowledge, but not taught to
think closely, to connect cause and effect, to survey a
wide gamut of facts, to pierce the shell of things in order
to reach a sympathetic understanding of what at first
sight may seem gross injustice or a trite detail. We have
given the masses the ability to read, but not to compre-
hend things. We have trained them in the crafts, but not
in the sciences nor in the supreme art of living. Their
abilities, such as they are, have not been unfolded accord-
ing to the best prescriptions of the pedagogue. Accurate
information is always scarce, but the exclusion of many
millions of willing students from the higher branches of
learning has made doubly precarious the hold of democ-
racy.
It is acknowledged by one scholar that a true public
opinion " can be formed where the bulk of the people
220 THE LIMITS OF SOCIALISM
are in a position to determine of their own knowledge or
by weighing evidence a substantial part of the facts re-
quired for a rational decision," but he adds that " knowl-
edge of facts becomes increasingly difficult." 3 A grow-
ing complexity of life and widening of economic interests
has accentuated the difficulties of old, while our educa-
tional system has failed to take due account of them in
preparing people for true democracy.
Socialists may of course promise to remedy this defect
so that everybody will be able to know what is going on,
anxious as well as able to participate actively in politics.
One is involuntarily captivated by the prospect of a social
order in which all of us get a chance to master the es-
sentials in natural or social science. However, it would be
a grievous mistake to bank extravagantly on the possibili-
ties of formal schooling. We may extend educational
facilities to a marked degree without obtaining propor-
tionate returns in intelligence. It is not true that a fixed
ratio of the one to the other exists. Rather, we all know
of types of human beings, some of them bound to succeed
in life while others fall by the wayside. Human nature
comes in types more or less fixed and regularly recur-
rent, as the biologist knows. We have the strong and the
frail, the clever and the stupid, the imitators and the in-
novators, the crafty and the naive, the energetic and the
indolent, the courageous and the craven, the stubborn and
the docile, and so forth. These classes of people get dif-
ferent results out of the same instructional course. It
is not to be supposed that all will benefit by guidance re-
ceived in the study of social problems, or that, having
been informed as to the relevant facts, they will all draw
the conclusions most important for the exercise of the
rights of citizenship. We may count on many ignora-
3 Lowell, A. L., " Public Opinion and Popular Government," p. 46.
THE LIMITS IN GOVERNMENT
muses even when science is more conscientiously dissemin-
ated. People do not entirely select their data from a
social standpoint. Though cognizant of certain facts
they will ignore them for the sake of emphasizing their
own needs. This is the obstacle mainly interfering with an
impartial application of knowledge to practical politics.
The masses succumb to emotions when reason alone should
govern. The type that acts on analysis is in the minority
distinctly, and this type will do the directing whether
education has enlightened the populace or not.
The second premise, therefore, loses force also, for just
because of the predominance of the strong, calculating,
far-seeing minority the great majority seldom remains
true to its convictions. Or rather, it receives its ideas
from a small group whose word and suggestion superin-
tends the casting of the vote. Social control reigns
everywhere. The average man does not spend his time
thinking out any particular problem in production or
government, but he expects somebody else to give him
a problem ready made, much of the solution being already
outlined. Under those conditions he will work cheerfuUy
and deliver a product, but not otherwise.
Imitation and suggestion thus become staple devices
for learning and for exerting influence. The masses
absorb the opinions of leaders as a sponge absorbs water.
They fall a prey to suggestibility and follow out com-
mands adroitly administered. From the press or from
the pulpit, from the employer and from friends, from the
political machine and relatives the most of us get our
ideas as to what is right and what we should vote for.
The press especially wields an enormous influence over
people's minds. It molds opinion more than it passively
reflects it, for the brain of the editorial staff is superior
to that of the majority, and where the staff is under the
THE LIMITS OF SOCIALISM
control of industrialists or public officials it at any rate
still spreads views not primarily developed by the gen-
eral run of subscribers.
Ward bosses similarly may move us to vote regardless
of our personal desires. We listen to them and feel
prompted to credit them with superior wisdom. Or we
make of political creed a family affair, the son follow-
ing his father's party, actuated partly by a sense of
loyalty or the propriety of things, and partly by the
force of habit. Thus we do not ask why certain men
are nominated in the convention, or why their names ap-
pear on the ballot. We do not go into the history of the
candidates, except that the party leaders will consider
it somewhat in their proposal for nomination. The
wishes of the employer may mean more to us than our pri-
vate views, for there are avenues that lead to distant goals,
and blind alleys that lead us nowhere. Nobody likes to
risk much without a chance of gain. Whether it be
bribery or promises of advancement, whether it be a mere
whim or the innuendos of relatives, whether it be from
indifference or because of pressure brought to bear upon
men illicitly, men have voted regardless of what they
believed, and they will do so again. Few act on decisions
painstakingly grounded. Not all are in a position to
vote precisely as they please, even if the law protects them.
The ballot reflects public opinion, of course, but it
originates with a small minority whose powers of percep-
tion and of control are plainly in view.
Democracy, thus, is the will of the majority radiating
from select groups who, by courting the consent of the
masses, succeed in legalizing what once did not need the
sanction of law. Political theory, in other words, is far
ahead of practice. " No government," wrote Mill in his
magnificent essay on Liberty, " by a democracy or a
THE LIMITS IN GOVERNMENT
numerical aristocracy, either in its political acts or in the
opinions, qualities, and tone of mind which it fosters, aver
did or could rise above mediocrity except in so far as the
sovereign Many have let themselves be guided, which
in their best times they always have done, by the counsels
and influence of a more highly gifted and instructed One
or Few. The initiative of all wise or noble things comes
and must come from individuals ; generally at first from
some one individual. The honor and glory of the average
man is that he is capable of following that initiative ." 4
And in the words of a contemporary writer : " We are
governed by minorities just as industries are controlled
by them. The problem is not to escape control, but to
transform society so that wisdom dominates." 5
As to the third premise. The people look naturally
to leadership, even though at times they are disappointed.
They take for granted that their wishes will in the main
be honored by the legislator. Yet the pledges for such
obedience on the part of men in office are few and in-
definite. Party platforms promise much, but are notable
for lack of clarity in expression, of precision in the
enumeration of particulars. The particulars cannot
often be given, for most needs arise after men have been
installed in office. The barest outline of policies is
offered, but one cannot judge from that as to the final
interpretation to be put upon them. Either the measures
to be acted on cannot be discussed beforehand to any ex-
tent, or the thoughts are couched in phrases susceptible
of several constructions. Once the governors begin their
work the means of checking them up prove strikingly in-
effective. There is no way of judging except to obey im-
pulses of the moment. A hostile press may open our eyes,
* Mill, J. S., " On Liberty," Chapter 3.
s Patten, S. N., " The Reconstruction of Economic Theory," p. 75.
THE LIMITS OF SOCIALISM
or an honest opponent may point out errors and de-
linquencies, but beyond that the axiom of responsible
ministry is purely nominal. Responsibility is to public
opinion, not to wishes registered at the poll. It is to de-
mands agitated among the reigning economic classes, not
to principles formulated by science. The latter so far
has enjoyed but a passive share in the administration of
public affairs.
Whichever way we look at the situation we cannot get
away from the limitations inherent in popular control.
Democracy always will turn out to be a set of rules by
which the minority is permitted, willy nilly, to govern
the majority. A few outline the policies, that the multi-
tudes may put the stamp .of their approval upon them
and thus, by rights of suffrage and representation, become
parties to a transaction which few of them really com-
prehend. The value of political democracy, therefore, is
not the equalization of powers of judgment, for that lies
far in the future, but the submission of the mighty, always
in theory, and in practice now and then, to the will of
the weak. For the same reasons that a part of our social
surplus of goods produced by exceptional talents should
go to the normal or deficit producers, the civic rights
and duties should be substantially equalized, so each may
feel worthy of a place in the social order. To humble the
mighty may at times be necessary. The vote and the
election campaigns preceding the voting help to fortify
the masses against too deep a sense of their own in-
feriority. What an excess of self-assertion leads to we
are told often enough, but immoderate subjection of the
Self to class standards is equally reprehensible.
The casting of a vote is symbolic of the power of
numbers which the average voter represents. To know
that certain offices are legally open to us even when we
THE LIMITS IN GOVERNMENT
do not aspire to them is consoling, and a spur to our
spirit of enterprise. Democracy politically draped is
valuable for these reasons. It puts a premium on social
cohesion, on united action by all regardless of differen-
tiations. It harmonizes with our knowledge of human
nature. For the lowly are not impotent unless we deny
them assistance. The slow-witted need not be a burden
until we belittle their ambitions. All of us feel obliga-
tions until we are declared irresponsible. The bane of
aristocracy is its tendency to declare inert what is quick
with life, and to curb development among the mediocre.
In a democracy like the socialistic all will have a right to
do the unexpected, provided it helps the public at large.
It will be for the governors to encourage every effort to-
ward self betterment and to use the data of science so that
self and society become one.
3. Obstacles to Internationalism For a long time
to come, however, governments will have to combine
science with strategy, for nationalism implies two
policies very different in principle. As trustees of the
people a government should act honestly, with the re-
gard that one member in a partnership has for the
other. But as soon as we scent a conflict of interests be-
tween nations we must admit the value of statecraft in a
competitive sense.
The scientist should be first of all creative and truth-
ful. Nothing counts but the facts. Service is the key-
note of labor, and candor a supreme virtue among col-
laborators. The government is such an agent of truth
and service when it deals with its own constituency. But
in its dealings with a hostile outside world it must show
discretion regardless of rights of duties. It must add
the cunning of the fox to the strength of the lion. It
must seek to achieve by circumlocution or by a ruse what
226 THE LIMITS OF SOCIALISM
it could not gain by frankness or amicable advances.
Governments are necessarily suspicious of each other as
long as they claim sovereignty amidst radically different
conditions for prosperity. A nation therefore needs two
sorts of men and several criteria of conduct ; one to govern
it at home and the other to guard it against lurking foes.
The partnership of truth and falsehood can scarcely be
dissolved as long as nationalism prevails and different
sovereignties compete for supremacy.
As for the rights of its own citizens a government
should subordinate them to the welfare of the great ma-
jority. The functions of government, in this respect,
will vary with time and place. No one principle can be
laid down by which the people are to ensure to themselves
utmost personal liberty or a maximum of social striking
power.
It is true, as H. Spencer emphasized, that social jus-
tice consists in that " every man has freedom to do all
that he wills, provided he infringes not the equal free-
dom of any other man," 6 but just when the infringement
takes place we do not know, except at a given time and
place. Similarly, when J. S. Mill observes that " the
only part of the conduct of any one for which he is amen-
able to society is that which concerns others " 7 we will
agree offhand. But how shall we determine what actions
are of social import, and which concern solely the indi-
vidual? The proper sphere of government is not found
as easily as was thought by the Manchestrians. We have
abandoned the theorem that government is an evil and
self-expression naturally a virtue. We have individually
perhaps held control to be a sad duty, a necessary evil,
Spencer, H., " Ethics," Part Four, Justice, Chapter 6, No. 27.
T Mill, J. S., " On Liberty," Introductory.
THE LIMITS IN GOVERNMENT
but at the same time we have found out that liberty is
not so much a reservation of rights to say and do things
as one of duties by the observance of which the largest
possible number of people in a given area can master the
complexity of civilization.
The history of American ideals of democracy is an in-
structive example of this relativity of freedom. Pater-
nalism was once decried as something un-American, as
smacking of monarchy. But increasingly as the western
frontier has disappeared, as city life has encroached on
the country side, as density of population has increased
and our economic organization has expanded and become
more intricate, increasingly in about the same measure we
have added to our functions of federal and local govern-
ment, until to-day warnings to do and not to do certain
things greet us on all sides. Laws have been passed on
behalf of the citizen which two generations ago would
have seemed as ridiculous as indeed they would have been
inappropriate. What twenty million agriculturally en-
gaged Americans considered good government is one thing,
and what a seething mass of urbanites without land, hud-
dled together like sheep in a pen, deem adequate govern-
ment is quite another thing. It would not be an exaggera-
tion to say that functions of government grow in propor-
tion to density of population and to per capita production
of goods.
Democracy certainly must anticipate dark days when
social relations become too interlaced; for it may mean
that social stratification is sanctioned and the an-
tagonism of economic groups openly recognized. It is
when this stage of structural development has been reached
that international relations, too, assume a sinister aspect.
The functions of government will then proclaim a new
228 THE LIMITS OF SOCIALISM
norm of individualism, one that would outrage the in-
dividualistic sense of the primitive man, say of the col-
onist in Jacksonian days.
The prerogatives of sovereignty, however, are most
fully invoked in international relations. It is here that
the individual is nothing and the state everything. The
government acts on behalf of all its citizens against the
presumption of outsiders. It speaks as though the citi-
zens were temporarily a means to an end, the end being
the promotion of interests as understood by the gover-
nors. Minority rule is then most in evidence. Leader-
ship and might carry the day. The weal and woe of un-
told millions rests in the hands of a very few men steering
the ship of state. The principle of competition holds
sway, and nations match their rights as they ordinarily
match their goods in a search for markets.
The nation is not presumably as old as the race or tribal
unit. It depends upon our definitions of both. But
there is ample evidence to show that blood ties have never
limited the expansion of groups. Whatever race charac-
teristics may be, peoples of different physical make-up
of different languages and literatures, have been united
under one common rule and fought shoulder to shoulder
against their own kinsmen as well as against aliens. The
nation has always proven to be a union of individuals
welded by exceptional leadership. Leaders of men have
fought each other, and external circumstances have
prompted people to side with one or the other. Groups
have been made strong by a minority which, taking upon
itself the onus of battle and vigilance, wa's given the con-
trol of internal affairs no less than of warfare.
A nation is the product of force. Leadership has made
it. Sovereignty is the absolute right of leaders to safe-
guard their nation against the attacks of rival nations.
THE LIMITS IN GOVERNMENT 229
Such were the original attributes of the sovereign, along-
side of which the rights of jurisdiction and of taxation
developed early. A nation may not be economically self-
sufficient. It rarely has been. But it always represents
an organization of fighters who will place their own wel-
fare above that of any outsider. This is a rule the ex-
ceptions to which are few and far between.
The .more advanced our methods of production the
larger a nation may grow, for plainly it requires either
physical force or solidarity of interests to govern mil-
lions from a single center. The Ancients, and notably the
Romans, succeeded in building vast empires covering mil-
lions of square miles because their organization of fighters
had no equal. On the other hand, nations may become
strong numerically if they are able to find enough food on
a small area, or to purchase it with finished products.
This was commonly the case since the discovery of new
continents, with immense natural resources awaiting ex-
ploitation, has furnished European nations a welcome out-
let for manufactures. Race ideals have always been an
impediment to aggressive nations, but not an invincible
one. Differences in language and intellectual traditions,
in religion and in physical traits such as color and stature
have tended to keep people apart. Yet these natural
barriers have not always prevented a conqueror from
gathering under his scepter a mighty host of subjects.
What must determine the size of nations is chiefly tech-
nical means of communication, travel, and transportation,
methods of production, the disposition of natural re-
sources, and principles of government. As long as topo-
graphical conditions vary greatly, as long as mountains
and water could separate people by making travel impos-
sible, as long as sparsity of resources kept people poor
and widely scattered, so long the agglomeration of many
230 THE LIMITS OF SOCIALISM
millions under a single flag was out of the question. And
for precisely these reasons nationality will be a dominant
factor for centuries to come.
There will never be enough time and wealth to permit mi-
gration at regular intervals for the exchange of interests,
thoughts, and manners. Physiographic differences are
bound to differentiate peoples in different continents, or
even within one continent. The historical background of
the ancient world is so much a part of its modern inhabi-
tants that they can never hope to rid themselves entirely
of its fatal effects for purposes of internationalism.
There is no promise of an amalgamation of races or of na-
tionalized groups. The socialists admit this, and others
assume it is a matter of course.
If socialism then speaks of cosmopolitanism it cannot be
with the desire to abrogate nationalism, but only to the
end that a better understanding between the several sov-
ereign units may be attained. Socialism is eager to fund
sentiments, as it has professed great faith in the funding
of goods. The most ardent of socialists would abridge
sovereign rights so as to make individual nations amen-
able to an international tribunal representing the whole
world. The underlying thought is the liberation of the
masses from the yoke of capitalism, but the incidental
feature is the abolition of wars. Socialism pins its faith
in the goodness of human nature as found in the average
man. It places the responsibility for class struggle and
international strife with the magnates of business, con-
fident that a reorganization of the industrial system would
disarm them and free mankind from a horrible incubus.
Socialism wishes to limit sovereignty, but not the duties
of government. In this respect its aims are diametrically
opposed to those of Laissez Faire and of competitive capi-
talism, which stress the need of nationalism as over and
THE LIMITS IN GOVERNMENT
against the rights of the individual within each nation.
The issue is clearly defined.
But in order to agree to the limits of socialistic govern-
ment we must first distinguish between superficial and
basic causes of war. Lack of communication cannot ex-
plain them, for in the very century that the means of
communication and travel were most perfected, intelligence
being flashed across continents and oceans with lightning
speed, wars have been as common as ever, besides being
conducted on a much larger scale. Nor is the type of
government apparently a decisive factor, considering that
democracies have fought as lustily as autocracies. The
overthrow of absolutism did not spare France or England
any wars. Neither have the South American republics or
the United States escaped them entirely, though thanks
to their youth, perhaps, and to their remoteness from the
centers of trade they suffered less than the Europeans.
And in the third place it would be folly to attribute
wars to economic pressure if that is to mean lack of food
or of the necessaries of life as the masses know them.
Wars have been as plentiful in the days of cavedwellers
as to-day. Density of population has not multiplied
them, nor has the modern abundance of necessities made
them impossible. Regardless of an abundance of supplies
nations have entered upon costly wars ; regardless of
needs, measurable by individual standards, governments
have declared themselves constrained to levy armies either
in self defense, or on behalf of third parties.
Hence the meaning of the indisputable fact that wars
must be traced to economic pressure is somewhat different
from the one commonly accepted. It has to do not only
with the " economic man " that economics has so often al-
luded to, but likewise with types of men and their role in
social growth.
THE LIMITS OF SOCIALISM
The economic man is a product of evolution. The uni-
versal surplus of seed coupled with the scarcity of foods
brought about a struggle in which pugnacity and ac-
quisitiveness became invaluable assets. Those who would
or could not fight to acquire a subsistence were inevi-
tably killed off. The instinct of self-preservation could
express itself in no other way than in willingness and abil-
ity to fight for the biologically essential things. The sex
struggle was an accompaniment of the contest for self-
preservation, the two being inseparably connected.
The course of history points to the effect of economic
conditions upon the development of social norms, but the
innate faculties of man were in turn the means for en-
larging the economic environment. Thus the selfish in-
stincts eventually aided in the arousal of a group con-
sciousness almost as strong as parental love and sex
passion. The original need of food ceased to preoccupy
men. They specialized more and more for the accumula-
tion of non-necessities which their imagination made de-
sirable, and the possession of which meant power. That
is to say, since strength like everything else is relative,
the means to survival were not simply an abundance of
food, but all those instruments by which an enemy could
be subjugated in a battle. Not the mere muscular
strength, but ax and arrow, sword and scimitar became
important, and again not weapons but means of defense,
like walls and citadels, moats and armor, decided the issue.
And later on subtler devices warded off the foe. The
power of body was dwarfed by the force of explosives.
Armor plate, instead of shielding the knights, was used to
clad ships and fortresses. Industry supplied the govern-
ment with weapons vastly superior to anything the primi-
tive man had known, but the victory still went to those
who relatively excelled in men and arms. Iron and coal
THE LIMITS IN GOVERNMENT
and chemistry and Kartells came to count as much in an
international struggle as personal strength and nimbleness
for prehistoric tribes.
The economic man cultivated his powers of reasoning,
but he could not divest himself of reflex actions and in-
stincts bred in countless ages of ferocious combat with
animals and fellowmen. The test for superiority changed,
but the instincts remained the same. Instead of foods the
desideratum became a surplus of capital goods with which
to produce enjoyable consumption goods in times of peace,
and weapons of defense in times of war. In his eagerness
to acquire creative comforts our ingenious man also ad-
vanced the methods of warfare. His prosperity which
once turned on the sufficiency of food and clothing now
varied with his possession of a large stock of raw ma-
terials and finished articles.
The social group expanded, but leadership became more
precarious. Individual might had to be buttressed more
and more by the approval of rival companions. Prestige
hinged on wealth because everybody valued wealth for its
own sake, besides desiring it as token of providential
favor or of unusual ability, of privilege and power.
Wealth meant leisure in peace, and victory in war. The
control of riches in land or in capital enabled man to
command respect and obedience where the weight of per-
sonality alone might not have sufficed. The economic
man, in this sense, is an imperishable product of evolution
and progress, a fact all science and sentiment must take
into account. While wealth has its uses in war it will be
doubly valuable also in days of peace.
But the accumulation of wealth rests largely with ex-
ceptional men. The inventors and managers of capital,
the organizers of men for productive purposes, and the
proprietors of natural resources these form the nu-
THE LIMITS OF SOCIALISM
cleus from which social growth must be deduced, just as
premises give rise to a conclusion. The correlations of
social phenomena are many, and what is cause or effect
may never be completely determinable. Yet it is certain
that without the right sort of natural resources and right
leadership for production or public control nothing great
can be achieved. The place of one nation among others
varies with the use of resources in material and men made
by the small minority now dominating business. When
a nation boasts many great leaders it is likely to grow
rapidly, to increase its population by selling manufac-
tures for foodstuffs, to raise its level of living, to widen
its horizon of thought and politics, and to search the
world for greater riches.
If physical barriers do not forbid, an aggressive atti-
tude toward outsiders is thus sure to find approval. The
leaders want power and empire, the masses demand com-
forts and glory, i. e., such glory as the fear of rivals or
the consciousness of past triumphs may bring. War, in
brief, is a means of equilibrating differentials of power be-
tween nations who rank as sovereign units, but whose
real might is lodged in the hands of a few who by virtue
of office or of inborn superiorities decide the fate of the
multitudes. It is hardly an error to call the leaders the
creators and destroyers of life, in that their sagacity and
energy alone provides the means to an increase of popula-
tion. But their struggle for shining supremacy also en-
gulfs the masses periodically in bloody wars, wars that
decimate the population and redistribute sovereign powers
so that another period of growth for somebody may fol-
low.
Differentials of national power will always exist because
inventions change the value of natural resources. What
at one time means little, may be highly prized and coveted
THE LIMITS IN GOVERNMENT 235
at another. In ancient days soil fertility was a prime
asset. To-day coal and iron stand out prominently.
During the later middle ages commerce with the far east
helped nations to a lordly position. A century hence
maritime facilities may be less significant than circum-
stances favoring aerial navigation. Just now oil and
copper are items of maximum valuation, but there is no
gainsaying that countries now obscure and despised for
their backwardness may rise to eminence because of dis-
coveries yet to be made by now leading civilizations. The
notion of a balance of power dates from days when two
or three nations were the arbiters of Europe, but it is
doubtful whether it will ever mean anything else than the
division of power among a few, whose policy is law for all
others.
No nation is as yet ready to renounce its sovereign
rights. All nations have reserved for themselves the right
of autonomy in internal affairs, even if elsewhere they had
nothing to say. The spirit of nationalism is rampant
these days. It has been fed and feted by the latest war,
instead of being restrained by it. Even now nations are
preparing for rehabilitation commercially, for the ex-
pansion of business at the other's expense, for the delimi-
tation of spheres of influence. Investments and colonies,
mandates and protectorates, alliances and tariff conven-
tions figure prominently in the daily press. Sovereignty
is still regarded as absolute and inviolable. What kings
once claimed is now fitly ascribed to the people, but if
nationalism is to continue on competitive lines natural
differences will not only be accentuated, but the motto of
particularism will estrange nations so that arbitration of
clashing claims becomes difficult.
Human nature gives us no ground for expecting per-
petual peace by the introduction of the plebiscite or of
236 THE LIMITS OF SOCIALISM
female suffrage. Women at all times have supported men
in a combat. The sex relation is so entirely mutual that
it is folly to expect from women what men cannot do.
The passions of the multitude are easily aroused to ungov-
ernable fury. Nothing appeals like an argumentum ad
hominem. If the leading classes give moral support to a
martial government it is sure to find a vent. Patriotism
covers a multitude of sins. Nationalism is a growth that
thrives on secrecy and on centralization of powers. What
is a domestic question and what a justiciable case, what an
attribute of sovereignty and what a question for adjudica-
tion? What are the obligations of a protectorate and
what the limits of armament internationally permitted?
These are problems not to be solved with science or law,
but with combats or concessions.
Socialism has a hard road to travel in many respects,
but it is particularly embarrassed in its attempts at in-
ternationalism and enduring we won't say perpetual
peace. The safest preventives at its disposal are educa-
tion and publicity, decentralization of economic powers,
and a leveling of incomes. If by equalization of oppor-
tunities and economic rights we can teach the average man
to think ; if in the wake of enlightenment morality will
gradually subordinate feelings of race and nationality to
the concept of humanity ; if in giving the masses an active
share in government we can banish camarillas of Machia-
vellianism, bringing into the light of day the precise facts
at issue then we may hope to chain grim Mars and
smooth the path for Peace. But socialism has not yet de-
clared itself willing or able to redistribute the world's
goods irrespective of national boundaries; nor are the
means near at hand that make such an equalization of re-
sources and policies possible. Tried in only one or two
THE LIMITS IN GOVERNMENT 237
countries socialism might meet the fate of bi-metallism
which could not hold itself in the midst of gold standards.
To conclude. The weaker system of production, if
international trade is to follow competitive principles, is
assuredly the socialistic. Costs can be lowered if we have
no conscience. Markets may be conquered at the sacri-
fice of millions at home, provided the law does not inter-
fere. Socialism will value personality above product. It
may raise the social dividend without cheapening particu-
lar types of goods fit for exportation. It might be com-
pelled to buy imports at prices costly to the consumer.
In rich countries socialism will tend to lower levels of liv-
ing if it wishes to aid poorer countries. The gain will
come some day, if all cooperate on one principle, but for
the present the outlook for internationalism is disquieting.
The limits of government point to nationalism in spite of
its perils, in spite of grievous experiences in the past.
CHAPTER X
A PETITION
i. Foundations in Social Science Restated. What
has so far been said should now enable us to summarize as
follows :
Social reform manifestly must be based on social sci-
% ence. The physician in this respect sets a good example
to the socialist and to other prophets of a better world.
He does not suggest cures until he has analyzed his case.
Diagnosis and prognosis go together. What is more, a
careful record of the course of the malady is kept, and
only in the light of past experiences, which are compared
with the individual case, is treatment offered. The phy-
sician relies upon the facts of physiology and allied sci-
ences for his power of aiding the sick.
The would-be healer of social ills can do no better than
look to the foundations of social processes before going to
work. The data of biology and psychology, of sociology
and of economics furnish the light by which eventually a
prescription may be filled for the curing of social patients.
The diagnosis may not be perfect. The symptoms may
mislead us. The issue of the disease may be most un-
expected. But in spite of the limitations to which all
science is subject, and which the reformer must bear in
mind, his plans have a chance of success only in so far as
they square with actualities. Whether we are dealing
with a political platform, or with a petition of rights for
the people, each must be based on facts, and accept the
restraints which facts impose.
238
A PETITION 239
For purposes of reform as well as for research in gen-
eral the empirical standpoint alone can satisfy. There is
no gain in postulating sources of truth which lie beyond
the ken of our senses. To predicate innate ideas about
anything is useless, for the predication itself is not innate,
and if it were it could not change the nature of our know-
ing. The distinction between things and things-in-them-
selves is entirely gratuitous. It is useless except to call
our attention to the sources of our knowledge and to the
methods we employ in reasoning.
There is no way of learning except by our power of
sensing things, by our ability to respond selectively to,
and to remember, the stimuli acting from without and
from within. Our senses furnish the basis for knowledge.
The data of our consciousness and its reactions measure
the scope of our learning. We receive stimulations and
respond in certain ways. We remember and construct
associations which according to purpose and setting ter-
minate in action, or perhaps do not.
The outside world is one of regularities because of our
ability to perceive, select, and remember. Associations
alone make possible the connections by which we bring or-
der into chaos. It is through inference by enumeration
and by comparison of resemblances and differences that
we obtain classes of things and laws of nature. The laws
that science speaks of are sequences and coexistences re-
curring with different degrees of regularity. We can
control them in a measure. We can modify some of the
laws, but only by changing ourselves. Everything for
that matter is subject to change. Nothing is absolutely
rigid or definitive. The groups of events which we bind
together and experience as correlatives or laws change in
scope and contents. As students we add to, and subtract
from, such facts involved in a given situation according
240 THE LIMITS OF SOCIALISM
to time and circumstance. From time to time all our
knowledge must be restated. Its values have undergone a
change without our at first being conscious of it. Thus
sciences grow, and in this sense all sciences are inter-
related, the boundary lines shifting and becoming clear
and blurred by turns.
But our knowledge is also relative in this respect that
not all people judge facts alike. They have many char-
acteristics in common, but in different degrees. Our
anatomy, for instance, is substantially the same for all.
In instincts tending to survival we are much alike. Our
sense perceptions in general correspond so that we all see
or hear the objects or noises about us. But increasingly,
as we move away from the most fundamental traits of
human nature, we notice differences in men, in their inter-
ests and methods of valuation. / The number and the sig-
nificance of factors in a given situation appear differently
to different people. The events may be called variables
whose functioning is the subject of science. The fact of
interrelation is observed by all, and will be agreed to from
the start, but its nature or functioning challenges the
acumen of the ablest, indeed cannot often be established
indisputably.
The variables of events, or experiences that fill our life
and become the special concern of scientists, are all either
causes or effects according to viewpoint and needs of the
moment. It is not that the two are generically distinct,
but that some factors in a situation are considered as
constants, relative to which all others are treated as vari-
ables. We understand things by cross reference. We
explain the obscure by comparing it with the clear, or
what seems clear. We select our subjects for observation,
and by focussing our attention upon particulars get the
truth which at the time is sought. Purposes and circum-
A PETITION
stances govern all our searches for law in nature and for
rule in personal conduct or social policy.
It follows then that sciences are not only intercon-
nected, but also that for all sciences there is but one
method. The man on the street who is not specially
trained will yet, in the main, use the modes of reasoning
employed by the professional student. The two stand in
this respect on a level because both are products of one
course of evolution. Just as man is a unit and therefore
all social phenomena interrelated, so scientific and un-
scientific methods of thinking have much in common.
The chief difference between the untutored man and the
scientist is the latter's enlarged fund of associations which
permits him to extend greatly his comparisons and test
thoroughly his inferences by enumeration and analogy.
He practices a more careful selection of data, makes ex-
acter measurements thanks to the use of instruments not
possessed by the layman, and hence, as final result, boasts
a wider scope of investigation and of generalization. The
scientist stands on a higher plane because he excels in
association and measurement. The scientist does not al-
low himself to be hindered by irrelevant premises. He
assumes only the will to live. That given, his world of
experience and truth is mechanistically pictured or at any
rate understood.
Science is necessarily mechanistic. But this does not
prevent it from accepting that viewpoint as correct which
makes man appear self-directing and responsible accord-
ing to socially instituted standards. The notion of free-
will is no impediment to the scientist. He may grant it,
and then pursue his studies as though it did not exist.
Freewill is a way of looking at the outside world from
within. It is an egotistic norm of valuation. It enables
us to refer events to ourselves, or one part of a situation
THE LIMITS OF SOCIALISM
to another. In social sciences notably the assumption of
a freewill is a prospective way of viewing plans of action,
i. e., coming events. There is no objection to considering
each man the maker of his own fortune, as though
he were lord over his Self and the fashioner of his des-
tinies. But statistics show that events, though sup-
posedly willed, happen with considerable regularity, and
that what a man really does is far different from the
things he believes he could do if necessary. A belief in
illimitable will is usually a picturing of possibilities with
the aid of the imagination. Associations outstrip action !
Similarly science does not conflict with ethics or re-
ligion. The latter two may be deemed independent fields
for investigation if it's found profitable, but the evidence
of natural and social sciences favors the subordination of
moral norms to the general scheme of consciousness and
sociation. What we think right, and what we wish of an
unknown future, these are facts that are an integral part
of our whole being. There is no method for understand-
ing the Ought and the Soul except by analyzing self and
society as the scientist is wont to.
If we apply some of these fundamentals to social sci-
ence we shall find at once the limits of all social movements
and of all reform schemes. No one can work without the
right basis for physical reactions. No one can excogitate
a world entirely apart from his surroundings. No one
will propose betterments, except he is bound by the tra-
ditions back of him and by the shortcomings of science as
they exist at his time. All social events are conceived as
knit together. The relations are intimate or remote, but
they may be proven to exist if we trace events far enough.
Yet for the same reason all truths are relative to time,
place, and circumstance, or to put it more accurately, to
place, period, and people. It is the environment in gen-
A PETITION 243
eral and particular, it is the epoch of social development
or of national growth, it is the group experiencing the
events, be it large or small it is in the midst of these
facts that all social principles find their bounds. There
are too many variables to permit an exhaustive interpre-
tation. There are many events functioning as variables,
because human nature is so much more complex than either
animal or plant, or than any of the relations of the in-
organic world.
On the other hand, the main facts of human nature are
definitely ascertainable and virtually immutable. The
changes in man come so slowly that we can scarcely per-
ceive them. To ourselves we are the constant by refer-
ence to which the events about us appear as variables
which, more or less completely, we may control. Human
nature is practically a constant, though per individual
the force of variation is as great as that of heredity is
self evident.
Precisely because of this substantial definiteness of our
make-up the data of psychology and of biology furnish
us a clue to standards of prosperity. A theory of pros-
perity depends on the knowledge of those two sciences.
The principles of sociology and of economics are the last
auxiliaries toward a science of social welfare which poli-
tics should apply. But the social sciences cannot go
ahead until the more fundamental inquiries have attained
a certain mastery of facts. Psychology, because it
studies the individual, serves to clarify our notions of
reasoning, and because it is basic to social studies, it may
serve also to help formulate our norms of right and wrong.
Right and wrong are criteria of social origin whose indi-
vidual aspects are treated by psychology.
Without the combined action of natural and social sci-
ence, then, we cannot hope to arrive at clear ideas of
244 THE LIMITS OF SOCIALISM
prosperity or of reform. Socialism was among the first
movements for betterment to recognize this cardinal fact.
Hence, if for no other reason, it deserves a conspicuous
place in the history of human thought. But, indeed,
socialism has a mission for other reasons still. It is not
only the logical continuation of doctrines first enunciated
by Comte the Positivist and Mill the Utilitarian, but in
addition it broached for the first time in unmistakable
tones the relation of economics to non-economics, or, as
we might say, of wealth to weal.
2. Errors in Socialism. Socialists committed mis-
takes in action, and they espoused for a long time (in
part still espouse) teachings not tenable in the light of
current science. Socialism, for instance, was wrong in
promising to eliminate all maladjustment and give to men
a millennium. It was wrong in declaring conditions of
production and of exchange to be causative of all other
facts of sociation, as though one was the maker of the
other. It will not help us, as we have seen, to trace a chain
of events in one direction only. The relation of events
would be warped. It is not a question of economic man
building all the rest in man, but one of lines of thought and
action radiating from one center. Man is a single whole,
and all life's experiences must be interlaced as a result of it.
Without this conception life becomes a mystery, or else a
mere catalogue of facts as meaningless as the variegation
of a kaleidoscope.
Socialism furthermore erred in attributing all values to
one factor, and particularly in comparing effort-in-time
with the market values of a competitive regime. Prices
are not measured by labor except in a very general way,
and what is more important : Prices cannot in this way
be identified with incomes. Socialism, by the same token,
failed in trying to correlate prices of goods with personal
A PETITION 245
incomes, or even with factorial incomes. We can some-
times impute values to each one of many elements con-
tributing toward a single product. The physicist does
it, and other sciences may do the same. But in the realm
of exchange the imputation is indirect and can lead to no
nice measurements. To declare labor an essential in pro-
duction is one thing, and to measure wants by work is
another thing. The socialist aimed at the wrong thing,
to begin with, when he proposed to explain incomes by
prices, and he failed again because, having set his target,
he did not aim well.
The founders of socialism similarly erred in expecting
everything good from the abolition of capitalism, for pri-
vate ownership of the means of production and of ex-
change does not explain all evils. They were proven false
prophets also by future events, for misery, while it has
perhaps not abated a great deal, has certainly not in-
creased to the degree that was apprehended. The Marx-
ian theory of misery contains an element of truth, but it
can be found only in Marx's " Economic Interpretation of
History," and there it is marred by the fond belief that
nationalization of capital would remove all evils.
Lastly, socialists laid themselves open to charges when
they promised the world a much higher level of living than
is now assured to the bulk of the people. They expect
a gain in productiveness, thanks to the abolition of private
capitalism, which cannot be logically deduced from the
facts of population and environment, nor agrees with
socialistic ideals of self development. The limits in race
improvement are also much in evidence, whether we appeal
to our own powers of observation or to the verdict of sci-
ence. Everywhere we find bounds prescribed that social-
ism has often overlooked, or promised to set at nought by
the application of one general principle, to wit the aboli-
246 THE LIMITS OF SOCIALISM
tion of private property. But such optimism is never
fruitful. It can only prompt some people to misunder-
stand the nature of democracy and to look forward to
change such as science knows nothing of. Democracy is
more than a distributive norm, and less than a complete
equalization of governors and the governed. The same
differences among men that prevent us from fixing a ratio
between property and personality, or between economic
income and psychic outgo, also point to limits in govern-
ment, no matter how liberally we scatter rights of voting
and of office holding.
3. Merits in the Viewpoint of Socialism Social-
ism, then, may be criticized from many standpoints, since
its premises and conclusions partly belong to a period
which science has left far behind. But as against these
blanks we must note, too, the winning numbers in the
game. The founders of socialism have conferred great
benefits upon us, because they were exceptional men who
saw far and gathered wisdom from many founts. It
would be strange if they had not discovered new truths
in all their quest for betterment, or failed to enhance the
value of old truths. Men like Marx and Engels or Las-
salle will always prove a boon to society, for any deter-
mined defense of scientific endeavor leads to moral as well
as to intellectual regeneration.
Socialism was right in adopting an empirical position,
in emancipating itself from all hankerings for a transcen-
dental universe. Socialists were among the first to preach
relativism and to apply the principle of instability to
human history. The evolution of our thoughts and ac-
tions was shown to be a law pervading our whole social de-
velopment. The dual aspect of eternal truth was revealed
sharply. Thus dogmatism was dealt a severe blow, the
A PETITION 247
absolutism of Hegel becoming a brief on behalf of the
masses.
Socialism is right in correlating science and reform:
It was the earliest of the great movements for reform on
a purely scientific basis. True, to divorce science from
sentiment is not always possible, nor will all agree to its
being a lofty ideal. It is much the same thing when art
and morality are coupled. Some object, and others ap-
plaud. But it is important for the reformer that he curb
his desires in accordance with scientifically established
limits, and this the socialists sought first to do. They
hoped for betterment through the workings of a cosmic
law. They argued for sweeping changes and at times
took refuge in rebellion and hyperboles of speech. But
on the other hand they did not demand redress merely
because their conscience drove them, or because somebody
urged them to protect the weak. ^The chief principle from
the outset was the connecting of revolution with evolu-
tion. J)
This likewise enabled the founders of socialism to in-
corporate ethics with economics. The socialistic theory
of prosperity harmonizes with modern science in that it
insists upon verification. The proof of conduct is held
superior to protestations of creed. Whenever this is
done, whenever service is placed above suffering the road
is opened for progress. By objective tests the good and
the bad should be defined. This socialism has aimed to do
from the start. Ethics was recognized as part of social
science. The empirical, or if you will, the pragmatic
viewpoint was thus given a specific meaning that all could
understand and criticize as they pleased.
The socialization of religion is a by-product of this
mode of reasoning. Socialists have always championed
248 THE LIMITS OF SOCIALISM
the Golden Rule as the quintessence of holy communion.
They have stood by those who brought religion to earth
and gave it a social mission. That ideals are of the earth
and yet may rise above the earthy, this is the stand taken
by the positivists, and this attitude socialism has con-
sistently supported.
But socialism was also right in stressing the social roots
of evil. The older thought that man fell from grace or
that nature was to blame if people lived in pain and pov-
erty was calculated to encourage pessimism. It drove
men to despair and granted an easy sinecure to privileged
classes. Compared to this soothing sirup the socialistic
medicine had real merit and promised a cure. It agreed
with the gospel of prosperity which science now is inter-
ested in, and called attention to the predominance of the
instincts over our habits of reasoning. That man was
first an animal and next a being of reason was always ad-
mitted by socialists. The economic interpretation means
partly this. But it also hints at the possibilities for self
development. Reason enthroned is as true a symbol for
socialism as the tiger stalking for prey. The balancing
of primordial selfishness with socialized altruism, this is
the task of the future, and to this task socialists have
ever bent their energy.
Socialism is not averse to recognizing the beast in man.
The veneer of civilization fools least of all the socialist.
But for all that he has declined to subscribe to the teach-
ings of competitive economics. The founders of socialism
were pioneers in social science and advanced critics of the
classical system which made a fetich of individualism.
They did well in exposing the logical consequences of
Ricardianism, and they made some contributions to the
critique of marginal economics which until recently held
almost undisputed sway. A stress on collectivism may
A PETITION 249
lead to extravagant, pyppctatjons^ An exclusive reliance
on state ownership will disappoint its sincerest friends.
But that evils exist and reforms are needed no one will
deny. Yet it was socialism which first systematized the
business of meliorism and opened our eyes to the signifi-
cance of private property. To take nothing for granted
is a sound maxim in science. Socialists learned it early.
They did not take private property, e. g., for granted.
We can do no better than follow in their footsteps and
search into the grounds of an institution which exercises
such an incalculable influence over our weal and woe.
4. Existing Evils in Our Economic System. Re-
form undoubtedly is needed. Evils exist in plenty, and
not all of them are necessary even at this stage of social
development. We may agree to the old saw that nothing
is perfect and yet apply ourselves with zest to the task of
bettering socio-economic conditions.
The evils are known to all and need no lengthy discus-
sion. We have among us the diseased and the cripples,
the subnormal in mind and the totally disabled. We have
criminals of many types and vice that goes unpunished by
law. There is cruel hunger that cannot be stilled, and
y pauperism no philanthropist can root out. Some over-
^work or suffer from the effectsToT "exxfessive^specialization.
Others again are treated unfairly in a personal way and
resent the insults thrust at them. We know of many
who are kept unfit for civic duties, who cannot be made
desirable members of a democratically governed country.
Class struggle is real, and discontent widespread.
All these evils have existed for centuries and in part
cannot be removed. It is not possible for instance to en-
sure everybody good health by safeguarding him when at
work, or by scientific sanitary engineering. Gluttony and
bad habits are as common a source of illness as accidents
250 THE LIMITS OF SOCIALISM
or bad housing conditions. The congenitally disfigured
and disabled we shall perhaps have always with us, for the
problems of genetics have not yet suggested ways and
means for controlling natural variations. The blind and
the deaf and dumb are a burden that society must shoulder
with resignation. The demented or the moron, that aris-
tocrat of the feeble-minded, may be helped by trained
guardians, but they will for long times to come form a
certain percentage of our population. And so with the
rest of the shortcomings. Not all crime is traceable to
social surroundings. There is some evidence to show that
born criminals exist, and that vicious habits may be in-
herited as well as acquired in unobtrusive ways.
Among the rich, too, there is much profligacy and bar-
renness, both of the physical and the intellectual kind.
Money rules not uncommonly at the expense of mentality
and manhood. The reign of money is plutocracy, whose
undesirable features have been sufficiently explained.
Even in a political democracy the money-king has some
power. And power breeds arrogance, and arrogance
leads to friction and class consciousness. Idleness is the
fruit of wealth as well as of inherited lethargy. Too
many nowadays prosper in languor, supinely enjoying ill-
gotten gains. Complacency and egoism flourish among
the rich who control a large portion of the national in-
come. Extreme concentration of income is as obnoxious
from the standpoint of comradeship and solidarity of in-
terests as it may seem unjust to the defenders of a high
material level of living. It is in the competitive regime
as heretofore prevailing that unearned increments enrich
the one, while hard laborers are rewarded insufficiently.
The unearned portion crops out at all sorts of places.
We see it in the appreciations of natural resources, of real
estate, in the winnings of the profiteer and stock broker,
A PETITION 351
in the scoop made by the keeper of roulette tables, in
rentals squeezed out of the toiler's weekly pittance, in
usury rates levied by the small capitalist, in the collection
of royalties and patent rights, in gifts and briberies re-
ceived by young and old, with or without their under-
standing of the evils involved.
A further result of past competitive practices has been
an absurd valuation of goods and a disproportionate out-
put of luxuries, considering the needs of the great ma-
jority. The lawyer, for instance, who helps his client in
the criminal circumvention of the statutes enacted in de-
fense of the consumer is repaid richly for his effort. A
princely retainer-fee perhaps is his share of the bargain.
He has, for his purposes, made good use of his position.
Pandects and precedents at court have to him been not
merely a mine of information, but also of gold which
many others, covetous of success, will envy him. The
farmer on the contrary, who with his toil produces the es-
sentials wherewith to feed his nation, is fortunate if he
makes a living. Indeed, not infrequently he had less than
a standard wage. Again, trivial personal services ren-
dered to the wealthy bring a magnificent largess, while the
most deserving must get along in beggarly fashion. The
businessman knows how to cater to the rich and glean from
their table many a crumb. The lowly are naturally in-
clined to make the most of an anomalous situation. They
cannot change the economic order, so the best thing is
servile adaptation, a regard for the wishes of those that
have, so they themselves may pocket some gains. For
ridiculous services exorbitant prices, and with the price a
shower of tips even more generous !
Gross inequality in the distribution of incomes has thus
led to pompous displays on the one hand, and to sad
\ wants on the other. The contrasts of rich and poor
252 THE LIMITS OF SOCIALISM
evoke dismay and wonder. V It is what the masses do not
get rather than what the opulent display that impresses
one. One sees what progress so far has not accom-
plished. Crowded and filthy tenements not only repel
those of cleanly habits, they also are an indictment for
those who by their extravagances turn labor into wrong
channels. The regalia of West End cannot make us for-
get the ragamuffins of East End. The fascinations of
Fifth Avenue relieve in no wise the squalor a few blocks
away. Slums are an evil, whether we live in them our-
selves or not.
The time for a thorough study of social processes is
now. Now is the time to think and act on matters socio-
logical. These are the days when reform must interest
alert men and women. The European upheaval is an in-
stance both of evils fatally ignored and of experiments
in social regeneration. Circumstances alter cases. A
readjustment to conditions precipitated by the war is im-
pending. Whether all of the changes now advocated will
meet the test of time no one can tell, but that betterments
are under way should be manifest to all. The Old World
is rapidly becoming a new world.
The United States, too, is in a favorable position for a
retesting of social norms. It represents the largest block
of natural resources ever placed under one flag. No other
belt on this globe of ours equals it in richness or in the
efficiency of its population. We have minerals and water-
power, timber lands and vast plains yielding bountiful
harvests. We have untold wealth aiding us in production,
a high level of living that may still be raised higher by
right methods, and a stock of people whose full capacities
have not yet been put to a trial. With so much to act
on, with such assets to manage for the best of all, the
cause of social science should not be deserted. A disin-
A PETITION 253
terested but wholehearted application of knowledge can
nowhere bring richer rewards.
The socialist addresses himself in this spirit to all
classes of people. Not merely to the professional stu-
dent or to statesmen, but to all workers, and in particu-
lar to the average wage earner who has most at stake in
this movement for a redress of wrongs. Without definite
knowledge nothing can be achieved. Without the goodwill
of the majority no public action can be taken. Without
enthusiasm no sustained effort is likely. But if in the
future the average man applies himself diligently to prob-
lems of social welfare extraordinary achievements are in
store for us.
5. A Petition. A petition for redress of existing
evils rests on this assumption. It takes for granted that
the data of social science are duly consulted, and that
only a joint effort of all can net lasting benefits. This
is the characteristic of a theory of prosperity weaned
from the conceits of bygone centuries.
The socialist, and with him the student of social pro-
cesses, pleads for equalization of rights and duties every-
where so far as the norms of maximum welfare permit.
We must equalize that is make less uneven the dis-
tribution of income by virtual, if not actual, abolition of
the right of inheritance, by taxation, and by increasing
the public ownership of industrial plants and of natural
resources. Inheritance, as J. S. Mill acknowledged in his
" Principles of Political Economy," is no logical adjunct
of private property. Its praiseworthy features are few,
but its demerits stand out boldly.
Taxes also may be revised so as to conform to a collectiv-
istic rather than to an individualistic standard. In the
past the faculty theory of taxation took for granted
what socialism denied. Tax rates were meant to rectify
254 THE LIMITS OF SOCIALISM
errors of ruthless competition, but the roots of the evil
were not thereby disturbed. To tax the financially able
means to define ability to earn as well as ability to pay
taxes. This is the consideration which should govern us
from now on. In this way distributive justice may be
more nearly achieved than at present. But greatly in-
creased taxes necessitate extension of government func-
tions. Both local and central agencies will find more to
do, and try to solve problems increasingly by appropri-
ating the visible means of production. Equalization of
income thus means eventually a restriction of private
property as well as a revelation of services. Sumptuary
laws may also help in equalizing incomes, but the greatest
power for good at all times is education. Socialists
therefore insist upon the universalization of enlighten-
ment, and our friends of reform, whether socialistic or
otherwise, will support this view. Education is the
means of social advancement. More education, and edu-
cation for more people. Both are needed. Education
should be made compulsory and free. It should be open
to all regardless of wealth or parentage or aims in life or
physical prowess, and it should be in the hands of experts
whose services are inferior to none. It is necessary that
vocational guidance play a part in the placement of men.
It is absolutely essential that technical training be sup-
plemented by instruction in the arts and sciences, natural
or social, and there is hardly any doubt but that education
up to the twenty-first year should form our minimum of
demands, if democracy is to be more than a name.
With this right and duty to learn should be coupled the
right and duty to work, after schooling and practicum
has duly prepared men for their career. Production at
most points is a profession as truly as if it were based on
A PETITION 255
the Liberal Arts. To work well is a duty none can shirk,
but the chance to work well must form part of the con-
tract. All should be obliged to toil. Idleness is never a
gain, but may often turn out to be a vice. Idleness is
consumption without production. Leisure is consumption
with a view to increased production. Leisure is more than
that, but so much at least it means which the life of a
wastrel does not mean. There is no excuse for loitering
and lolling about in these days of opportunity. The
masses should not be expected to work at a treadmill so
a few may lead a parasitic existence. Parasites are not
necessary in a well-ordered community. But on the other
hand, those who have done their share should be allowed
,VK to rest in old age. Leisure for rest, for recreation, and
for regeneration of productive powers. Leisure for
amusement and sport. Leisure for the young, and re-
cuperation for the aged when their strength is on the
wane! N
These and some other rights to be claimed on behalf of
the common folk make up the platform of democracy.
Socialists have long adopted it, and friends of progress
in all walks of life will call it their own. Democracy
should profit by social science, not ignore it in the fatuous
belief that because its values are not measurable by phys-
ical standards they do not exist. The values of life and
of sociation are patent enough to those taking the trouble
to study them. They form part of the equipment without
which men in charge of public affairs are sure to fail.
Socialists have understood them in large measure, but
must now agree to further amendments of their original
creed, if they wish to enlist the sympathies of thinking
people. Revision is wholesome according to their own
teachings. Revision is a step in the onward march of
256 THE LIMITS OF SOCIALISM
civilization. Science itself is nothing if not continual
growth and redefinition of terms, whose finest fruit is the
advancement of humanism.
It is therefore no disgrace for socialism to have fallen
short of its mark, but it would be sad if the lessons it
first taught so brilliantly were to be forgotten by re-
formers to come.
INDEX
Achievement versus happiness,
210
Age, distribution in different
countries, 132-34
Alternative costs, 41
Art, versus the social good, 104
Association, a factor in reason-
ing, 66 ff.
Averages, as price determinants,
20; 40
Capital, according to Marx, 21, 23
capital goods as ideas, 29-31
paradox of wealth, 42-2
compared with consumables,
12S-29
Causality a question in history,
59, 89 ff
based on correlation, 60 ff
Causation an act of imputation,
84-88
Christianity and competition,
120-21
Climate, effect on social life, 95
Communist manifesto, 211
Compact, originating govern-
ment, 212-13
Competition and Christianity,
120
fair competition, 122
and efficiency, 173-77
Conditions, and social institu-
tions or ideas, 91-2
Conflict, a part of social process,
94
Consumption, denned, 191
a part of environment, 192
and happiness, 206 ff
Correlation a basis in reasoning,
60ff
Cosmopolitanism and socialism,
230
Cost, Marxian notion, 20-1
marginal idea, 35-6
257
Cost, socialistic costs, 184-86
Democracy, upheld by empiri-
cists, 214
premises of, 218
and government functions, 227
and war, 234
and economic reform, 254 ff
Dialectics, Hegelian, 49-51
Differentiation, 111
a principle in progress, 114
Diminishing returns in the fu-
ture, 156-58
Distribution, Ricardian view, 17-
18
Marxian view, 20, 22-24
marginal view, 37-8
to-day of incomes in U. S.,
146-48
and invention, 164
causes of unequal incomes, 166
unequal and productiveness,
171
and taxation, 178
under socialism, 186 ff
Economic interpretation of his-
tory, 53-56
restated, 106-07
Education, limits of, 203-04
and democracy, 219
Efficiency due to competition,
173-77
versus income, 202-04
Employment, possible savings in,
138
changes under socialism, 152
Engels, and the socialist theory,
49-55
Environment, denned, 90; 99
effect on human nature, 192;
195
Ethics, and economic interpreta-
tion of history, 102-06
258
INDEX
Eugenics, 199-200
Evils now existing, 249 ff
Factors, in germ-cell, 195
and variation, 197
Feuerbach, L., and Marx, 51
Government, as professional
group, 216-17
by minority, 222 ff
Habituation and memory, 62-64
Happiness and salvation, 102-03
Hedonism, defects of, 207
Hegel, influence on Marx, 46.
49 ff
Heredity, and germ-cell, 194 ff
Historical school of economics,
33-4,
Human nature, is constant, 197-
98
types of, 220
and peace, 235-36
Idealism in political philosophv,
213-14
Ideas versus conditions, 91-92
Income, national, 127-29
sources of, 130
how to be raised under social-
ism, 134
present distribution in the U.
S., 146-48
not all available for consump-
tion, 163
why so unequal, 166
determines pricing, 170
is a price, 180
as part of enviroment, 192
and efficiency, 202
and happiness, 206 ff.
Induction, principles of, 68 ff.
why making agreements possi-
ble, 77
Intelligence, versus knowledge,
-^04*
Internationalism, 226 ff.
Invention, 30-31
Justice, presupposes reason, 116-
17
aims at social strength, 118
and competition, 120 ff.
and government, 226
under socialism, 255
Labor power, gain under social-
ism, 140
use of, in U. S. to-day, 152-55
Labor theory of value, 20
criticized, 28-9
Lamarckianism, 192-93
bearing on economics, 201
attitude of biologists to-day,
Leisure, how to use it, 205
its role in progress, 255
Luxuries, in the U. S., 149
as personal services, 152-54
Maladjustment, 93
how brought about, 96-100
Malthusianism, 22
Marginism (see also Table 1),
3-40
attitude toward Historical eco-
nomics, 34
premises, 35
notion of cost and price, 35-6
on distribution, 37-8
criticism of, 39 ff.
Marx (see also Table 1), his in-
dependence of thought, 12-3
and Ricardo, 14-5
and W. Thompson, 19
his labor-theory, 20-1; 23
on private property, 21-2
as Malthusianist, 22
notion of profit-rate, 24
stand on free-trade, 25
criticism of Marx, 28-33
roots of his philosophy, 45; 54
Materialism, and Marx, 47-49
Mill, J. S., his Logic, 33
Morgan, Th. H., on Lamarck,
194 ff.
Motives versus deeds, 119
Mutation, versus fluctuations,
198-99
Justice, and inequalities, 111-14 Nation, a unit of force, 208
INDEX
259
Nationalism as unit of social life,
235
(Percepts, physiological basis,
61-4
defined, 75
Platform, of socialism in the U.
S. to-day, 5-6
Political philosophy and empiri-
cism, 213-14
Price, Marxian notion, 20-1
marginal notion, 35-6
governed by income, 170
under socialism, 179 ff.
Private property,
Marx's justification of, 21
and efficiency, 173-77
Probability and enumeration,
73-4
Productivity, marginal view,
36-7
Proof, 78
Proportionality of factors, 37
Prosperity, theory of questions
raised by it, 8-9
stated fully, 102 ff.
Production, socialist promise of
increase, 126-27; 131
probable actual increase, 134 ff.
how affected by distribution,
171=72
Recall, and inference, 68 ff.
Recomposition of national in-
come, 146 ff.
Religion, social basis of, 121
Ricardo (see also Table 1), main
points of doctrine, 17
Right versus might, 123-24
Savings, contrasted with inven-
tion, 31-2
under socialism, 143-55
Science (see also Correlation and
Causation)
growth of, 80-82
Smith, A., notion of individual-
ism, 16
on equality of men, 187
Socialism, platform in U. S. to-
day, 5-6
questions raised by, 7-8
plan for raising social income,
131; 134 ff.
and leisure, 139; 205
and changes in employment of
labor forces, 150 ff.
and competition, 175-77
and cost of production, 184-85
and improvement of human na-
ture, 194 ff.
and eugenics, 199 ff.
and cosmopolitanism, 230
its merits and defects, 244-49
principle of distribution, 186-
87
Sovereignty, 212; 228
Suffering, a problem in justice,
Taxation, and distributive justice,
177
limits of under individualism,
178
Utility, marginal view, 36
Valuation, wrong to-day, 251
how to correct it, 254
Variation, biological view, 195 ff.
and sex, 197
and mutation, 199
War, causes of, 231-34
Waste, avoidance under socialism,
143-55
Wealth, and progress, 104-06
and war, 233
PRINTED IN THE UNITED STATES OF AMERICA
UNIVERSITY OF CALIFORNIA LIBRARY
BERKELEY
Co desjt from it nidi bouowed.
This book is DUE on the Last date stamped below.
'D LD
.'-
OCT
-r"
'D LD
1
OCT 1 4 '6
RE
LD
a
B 66308
M141411
THE UNIVERSITY OF CALIFORNIA LIBRARY