Perhaps the best known recent statement of the opinion that interest is inevitable, appears in Professor Irving Fisher's "The Rate of Interest."[144]While he does not assert explicitly that sufficient capital would not be provided without interest, and even admits that in certain circumstances interest might disappear, the general logic and implications of his argument are decidedly against the supposition that society could ever get along without interest. He lays such stress upon the factor of "impatience," i.e., man's unwillingness to wait for future goods, as to suggest strongly that other causes of interest, and the number of savers free from "impatience," are quite insignificant. Now, if "impatience" were the only cause of interest the latter must continue as long as "impatience" continues; and if practically all savers, actual and possible, are completely dominated by "impatience" the abolition of interest would be socially disastrous. However, neither of these assumptions is demonstrable. We have just seen that the present rate of interest has other causes than "impatience"; that a large proportion of savers insist upon getting the present rate, not because they require it to offset their "impatience," but simply because they can obtain it, and because they prefer it to the lower rate. Therefore, the mere existence of the present rate does not prove it to be necessary. By the same argument it is evident that the existence of any interest does not demonstrate the necessity of some interest.In the second place, the number of savers, present and prospective, whose "impatience" is so weak as to permit them to save without interest, is probably greater than the average reader of Professor Fisher's pages is led to assume. The question whether interest is necessary cannot be answered by reference to the general fact of human "impatience"; it demands a preliminary analysis of the extent to which "impatience" affects the different classes of savers.
With interest abolished, those persons who were willing to subordinate present secondary satisfactions to the primary future needs of themselves and their families, would save at least as much for these purposes as when they could have obtained interest. Most of them would probably save more in order to render their future provision as nearly as possible equal to what it would have been had interest accrued on their annual savings. Whether a person intended to leave all his accumulations, or part of them, or none of them to posterity, he would still desire them to be as large as they might have been in a régime of interest. In order to realise this desire, he would be compelled to increase his savings. And it is reasonable to expect that this is precisely the course that would be followed by men of average thrift and foresight. Such men regard future necessaries and comforts, whether for themselves or their children, as more important than present non-essentials and luxuries. Interest or no interest, prudent men will subordinate the latter goods to the former, and will save money accordingly.
When, however, both future and present goods are of the same order and importance, the future is no longer preferred to the present. In that case the preference is reversed. The luxuries of to-day are more keenly prized than the luxuries of to-morrow. If the latter are to be preferred they must possess some advantage over the luxuries that might be obtained here and now. Such advantagemay arise in various ways; for example, when a man decides that he will have more leisure for a foreign journey two years hence than this year, or when he prefers a large amount of future enjoyment at one time to present satisfactions taken in small doses. But the most general method of conferring advantage upon the secondary satisfactions of the future as compared with those of the present, is to increase the quantity. The majority of foreseeing persons are willing to pass by one hundred dollars' worth of enjoyment now for the sake of one hundred and five dollars' worth one year hence. This advantage of quantity is provided through the receipt of interest. It affects all those persons whose saving, as noted in the last chapter, involves a sacrifice for which the only adequate compensation is interest, and likewise all those persons who are in a position to choose between present and future luxuries. Were interest suppressed these classes of persons would cease to save for this kind of future goods.
According to Professor Taussig, "most saving is done by the well-to-do and the rich."[145]On this hypothesis it seems probable that the abolition of interest would diminish the savings and capital of the community very considerably; for the accumulations of the wealthy are derived mainly from interest rather than from salaries. On the other hand, the suppression of interest should bring about a much wider diffusion of wealth. The sums formerly paid out as interest, would be distributed among the masses of the population as increased wages and reduced costs of living. Hence the masses would possess an immensely increased capacity for saving, which might offset or even exceed the loss of saving-power among those who now receive interest-incomes.[146]
To sum up the results of our inquiry concerning the necessity of interest: The fact that men now receiveinterest does not prove that they would not save without interest. The fact that many men would certainly save without interest does not prove that a sufficient amount would be saved to provide the community with the necessary supply of capital. Whether the savings of those classes that increased their accumulations would counteract the decreases in the saving of the richer classes, is a question that admits of no definite or confident answer.
If we assume that the suppression of interest would cause a considerable decline in saving and capital, we must conclude that the community would be worse off than under the present system. To diminish greatly the instruments of production, and consequently the supply of goods for consumption, would create far more hardship than it would relieve. While "workless" incomes would be suppressed, and personal incomes more nearly equalised, the total amount available for distribution would probably be so much smaller as to cause a deterioration in the condition of every class. In this hypothesis the State would do wrong to abolish the system of interest.
If, however, we assume that no considerable amount of evil would follow, or that the balance of results would be favourable, the question of the proper action of the State becomes somewhat complex. In the first place, interest could not rightfully be suppressed while the private taking of rent remained. To adopt such a course would be to treat the receivers of property incomes inequitably. Landowners would continue to receive an income from their property, while capital owners would not; yet the moral claims of the former to income are no better than those of the latter. In the second place, the State would be obliged to compensate the owners of existing capital instruments for the decline in value which, as we have already seen, would occur when the item of interest waseliminated from the cost of reproducing such capital instruments. It would likewise be under moral obligation to compensate landowners for whatever decrease in value befell their property as a result of the abolition of rent.
Nevertheless, the practical difficulties confronting the legal abolition of interest are apparently so great as to render the attempt socially unwise and futile. In order to be effective the prohibition would have to be international. Were it enforced in only one or in a few countries, these would suffer far more through the flight of capital than they would gain through the abolition of interest. The technical obstacles in any case would be well nigh insuperable. If the attempt were made to suppress interest on producing capital, as well as on loans, the civil authorities would be unable to determine with any degree of precision what part of the gross returns of a business was pure interest, and what part was a necessary compensation for risk and the labour of management. Should the State try to solve this problem by allowing the directors of industry varying salaries to correspond with their comparative degrees of efficiency, and different rates of insurance-payments to represent the different risks, it would inevitably make some allowances so low as to discourage labour and enterprise, and others so high as to give the recipients a considerable amount of pure interest in the guise of profits and salaries. Should it fix a flat rate of salaries and profits, the more efficient undertakers would refuse to put forth their best efforts, and the more perilous enterprises would not be undertaken. The supervision of expenses, receipts, and other details of business that would be required to prevent evasion of the law, would not improbably cost more than the total amount now paid in the form of interest. On the other hand, if the method of suppression were confined to loans it would probably prove only a little less futile than the effort to abolish interest on productive capital. The greatmajority of those who were prevented from lending at interest would invest their money in stocks, land, buildings, and other forms of productive property. Moreover, it is probable that a large volume of loans would be made despite the prohibition. In the Middle Ages, when the amount of money available for lending was comparatively small, and when State and Church and public opinion were unanimous in favour of the policy, the legal prohibition of loans was only partially effective. Now that the supply of and the demand for loans have enormously increased, and interest is not definitely disapproved by the Church or the public, a similar effort by the State would undoubtedly prove a failure. Even if it were entirely successful it would only decrease, not abolish, interest on productive capital.[147]
In view of the manifold and grave uncertainties of the situation, it is practically certain that modern States are justified in permitting interest.
This justification of the attitude of the State does not of itself demonstrate that the capitalist has a right to accept interest. The civil law tolerates many actions which are morally wrong in the individual; for example, the payment of starvation wages, the extortion of unjust prices, and the traffic in immorality. Obviously legal toleration does notper senor always exonerate the individual offender. How, then, shall we justify the individual receiver of interest?
As already pointed out more than once, those persons who would not save without interest are justified on the ground of sacrifice. So long as the community desirestheir savings, and is willing to pay interest on them, the savers may take interest as the fair equivalent of the inconvenience that they undergo in performing this social service. The precise problem before us, then, is the justification of those savers and capitalists who do not need the inducement of interest, and whose functions of saving and conserving capital are sufficiently compensated without interest.
It is a fact that the civil law can sometimes create moral rights and obligations. For example; the statute requiring a person to repair losses that he has unintentionally inflicted upon his neighbour is held by the moral theologians to be bindingin conscience, as soon as the matter has been adjudicated by the court. In other words, this civil regulation confers on the injured man property rights, and imposes on the morally inculpable injurer property obligations. The civil statutes also give moral validity to the title of prescription, or adverse possession. When the alien possessor has complied with the legal provisions that apply, he has a moral right to the property, even though the original owner should assert his claim at a later time. Some moral theologians maintain that a legal discharge in bankruptcy liberates the bankrupt from the moral obligation of satisfying his unpaid debts. Several other situations might be cited in which the State admittedly creates moral rights of individual ownership which would have no definite existence in the absence of such legal action and authorisation.[148]
This principle would seem to have received a particularly pertinent application for our inquiry in the doctrine ofpræmiumlegale as a title of interest on loans. In the "Opus Morale" of Ballerini-Palmieri can be found a long list of moral theologians living in the seventeenth and eighteenth centuries who maintained that the mere legal sanction of a certain rate of interest was a sufficientmoral justification for the lender.[149]While holding to the traditional doctrine that interest was not capable of being justified on intrinsic grounds, these writers contended that by virtue of its power of eminent domain the State could transfer from the borrower to the lender the right to the interest paid on a loan. They did not mean that the State could arbitrarily take one man's property and hand it over to another, but only that, when it sanctioned interest for the public welfare, this extrinsic circumstance (like the other "extrinsic titles" approved by moralists) annulled the claim of the borrower in favour of the lender. In other words, they maintained that the money paid in loan-interest did not belong to either borrower or lender with certainty or definiteness until the matter was determined by economic conditions and extrinsic circumstances. Hence legal authorisation for the common good was morally sufficient to award it to the lender. More than one of them declared that the State had the same right to determine this indeterminate property, to assign the ownership to the lender, that it had to transfer property titles by the device of prescription. And their general position seems to have been confirmed by the response of the Congregation of the Poenitentiaria, Feb., 1832, to the Bishop of Verona, the substance of which was that a confessor might adopt and act upon this position.[150]
And yet, neither this nor any of the other precedents cited above, are sufficient to give certain moral sanction to the practice of interest-taking by those persons who would continue to save if interest were abolished. All the acts of legal authorisation that we have been considering relate to practices which are beneficial and necessary to society. Only in such cases has the State the moral authority to create or annul property rights. In the seventeenth and eighteenth centuries the legal authorisationof a certain rate of interest made that rate morally lawful simply because this legal act gave formal and authoritative testimony to the social utility of interest-taking. The State merely declared the reasonableness, and fixed the proper limits of the practice. The beneficent effect of interest-taking upon society was its underlying justification, was the ultimate fact which made it reasonable, and which gave to the action of the State moral value. Had the taking of interest on loans not been allowed the bulk of possible savings would either not have been saved at all, or would have been hoarded instead of converted into capital. And that money was badly needed in the commercial and industrial operations of the time. Hence the owners of it were in the position of persons who regarded saving and investing as a sacrifice for which interest was a necessary and proper compensation. To-day, however, there are millions of persons who would continue to perform both these functions without the inducement of interest. Therefore, the public good does not require that they should receive interest, nor that the State should have the power to clothe their interest-incomes with moral lawfulness. Inasmuch as the State is not certain that the abolition of interest would be socially expedient or practically possible, it is justified in permitting the institution to continue; but it has no power to affect the morality of interest-taking as an individual action.
Although the interest received by the non-sacrifice savers is not clearly justifiable on either intrinsic or social grounds, it is not utterly lacking in moral sanctions. In the first place, we have not contended that the intrinsic factors of productivity and service arecertainlyinvalid morally. We have merely insisted that the moral worth of these titles has never been satisfactorily demonstrated. Possibly they have a greater and more definite efficacythan has yet been shown by their advocates. In more concrete terms, we admit that the productivity of capital and the service of the capitalist to the community, are possible and doubtful titles to interest. A doubtful title to property is, indeed, insufficient by itself. In the case of the interest receiver, however, the doubtful titles of productivity and service are reinforced by the fact of possession. Thus supplemented, they are sufficient to justify the non-sacrifice saver in giving himself the benefit of the doubt as regards the validity of his right to take interest. To be sure, this indefinite and uncertain claim would be overthrown by a more definite and positive title. But no such antagonistic title exists. Neither the consumer nor the labourer can show any conclusive reason why interest should go to him rather than to the capitalist. Hence the latter has at least a presumptive title. In the circumstances this is morally sufficient.
To this justification by presumption must be added a justification by analogy. The non-sacrifice savers seem to be in about the same position as those other agents of production whose rewards are out of proportion to their sacrifices. For example; the labourer of superior native ability gets as much compensation for the same quality and quantity of work as his companion who has only ordinary ability; and the exceptionally intelligent business man stands in the same relation to his less efficient competitor; yet the sacrifices undergone by the former of each pair is less than that suffered by the latter. It would seem that if the more efficient men may properly take the same rewards as those who make larger sacrifices, the non-sacrifice capitalist might lawfully accept the same interest as the man whose saving involves some sacrifice. On this principle the lenders who would not have invested their money in a productive enterprise were nevertheless permitted by the moralists of the post-mediæval period to take advantage of the title oflucrum cessans. Althoughthey had relinquished no opportunity of gain, nor made any sacrifice, they were put on the same moral level as sacrificing lenders, and were allowed to take the same interest.
As a determinant of ownership, possession is the feeblest of all factors, and yet it is of considerable importance for a large proportion of incomes and property. In the distribution of the national product, as well as in the division of the original heritage of the earth, a large part is played by the title of first occupancy. Much of the product of industry is assigned to the agents of production mainly on the basis of inculpable possession. That is; it goes to its receivers automatically, in exchange for benefits to those who hand it over, and without excessive exploitation of their needs. Just as the first arrival on a piece of land may regard it as a no-man's territory, and make it his own by the mere device of appropriation, so the capitalist may get morally valid possession of interest. Sometimes, indeed, this debatable share, this no-man's share of the product of industry, is secured in some part by the consumer of the labourer. In such cases their title to it is just as valid as the title of the capitalist, notwithstanding the doubtful titles of productivity and service which the latter has in his favour. First occupancy and possession are the more decisive factors. In the great majority of instances, however, the capitalist is the first occupant, and therefore the lawful possessor of the interest-share.
The general justification of interest set forth in the immediately preceding paragraphs is supplemented in the case of the great majority of capital owners by the fact that their income from this source is relatively insignificant. The average income of the farmers of the United States is only 724 dollars per year, and of this 322 dollars is interest on the capital invested in the farm.[151]Even when we make due allowance for the high purchasing power of farm incomes, due to the lower cost of foodstuffs and house rent, the total amount of 724 dollars provides only a very moderate living. Consequently the great majority of farmers can regard the interest that they receive as a necessary part of the remuneration that is fairly due them on account of their labour, sacrifices, and risks. So far as they are concerned, the justification of interest, as interest, is not a practical question. The same observation applies to the majority of urban business men, such as small merchants and manufacturers. Their interest can be justified as not more than fair wages and profits.
Again, there is a large number of interest receivers who are entirely dependent upon this kind of income, and who obtain therefrom only a moderate livelihood. They are mainly children, aged persons, and invalids. Unlike the classes just described, they cannot justify their interest as a fair supplement to wages; however, they may reasonably claim it as their equitable or charitable share of the common heritage of the earth. If they did not receive this interest-income they would have to be supported by their relatives or by the State. For many reasons this would be a much less desirable arrangement. Consequently their general claim to interest is supplemented by considerations of human welfare.
The difference between the ethical character of the interest discussed in the last two paragraphs and of that received by persons who possess large incomes, is too often overlooked in technical treatises. Every man owning any productive goods is reckoned as a capitalist, and assumed to receive interest. If, however, a man's total interest-income is so small that when combined with all his other revenues it merely completes the equivalent of a decent living, it is surely of very little significance as interest. It stands in no such need of justification as theinterest obtained by men whose incomes amount to, say, ten thousand dollars a year and upwards.
Still another confirmatory title of interest is suggested by the following well known declaration of St. Thomas Aquinas: "The possession of riches is not in itself unlawful if the order of reason be observed: that a man should possess justly what he owns, anduseit in a proper manner for himself and others."[152]Neither just acquisition nor proper use is alone sufficient to render private possessions morally good. Both must be present. As we have seen above, the capitalist can appeal to certain presumptive and analogous titles which justify practically his acquisition of interest; but there can be no doubt that his claim and his moral power of disposal are considerably strengthened when he puts his interest-income to a proper use. One way of so using it is for a reasonable livelihood, as exemplified in the case of the farmers, business men, and non-workers whom we considered above. Those persons who receive incomes in excess of their reasonable needs could devote the surplus to religion, charity, education, and a great variety of altruistic purposes. We shall deal with this matter specifically in the chapter on the "Duty of Distributing Superfluous Wealth." In the meantime it is sufficient to note that the rich man who makes a benevolent use of his interest-income has a special reason for believing that his receipt of interest is justified.
The decisive value attributed to presumption, analogy, possession, and doubtful titles in our vindication of the capitalist's claim to interest, is no doubt disappointing to those persons who desire clear-cut mathematical rules and principles. Nevertheless, they are the only factors that seem to be available. While the title that they confer upon the interest receiver is not as definite nor as noble as that by which the labourer claims his wages or the business manhis profits, it is morally sufficient. It will remain logically and ethically unshaken until more cogent arguments have been brought against it than have yet appeared in the denunciations of the income of the capitalist. And what is true of him is likewise true of the rent receiver, and of the person who profits by the "unearned increment" of land values. In all three cases the presumptive justification of "workless" incomes will probably remain valid as long as the present industrial system endures.
Interest is not a return for labour. The majority of interest receivers are, indeed, regularly engaged at some active task, whether as day labourers, salaried employés, directors of industry, or members of the professions; but for these services they obtain specific and distinct compensation. The interest that they get comes to them solely in their capacity as owners of capital, independently of any personal activity. From the viewpoint of economic distribution, interest is a "workless" income. As such, it seems to challenge that ethical intuition which connects reward with effort and which inclines to regard income from any other source as not quite normal. Moreover, interest absorbs a large part of the national income, and perpetuates grave economic inequalities.[153]
Nevertheless, interest cannot be wholly abolished. As long as capital remains in private hands, its owners will demand and obtain interest. The only way of escape is by the road of Socialism, and this would prove a blind alley. As we have seen in a preceding chapter, Socialism is ethically and economically impossible.
May not the burdens and disadvantages of interest be mitigated or minimised? Such a result could conceivably be reached in two ways: the sum total of interest might be reduced, and the incomes derived from interest might be more widely distributed.
No considerable diminution of the interest-volume can be expected through a decline in the interest rate. As far back as the middle of the eighteenth century, England and Holland were able to borrow money at three per cent. During the period that has since intervened, the rate has varied from three to six per cent. on this class of loans. Between 1870 and 1890, the general rate of interest declined about two per cent., but it has risen since the latter date about one per cent. The Great War now (1916) in action is destroying an enormous amount of capital, and it will, as in the case of all previous military conflicts of importance, undoubtedly be followed by a marked rise in the rate of interest.
On the other hand, the only definite grounds upon which a decline in the rate can be hoped for are either uncertain or unimportant. They are the rapid increase of capital, and the extension of government ownership and operation of natural monopolies.
The first is uncertain in its effects upon the rate of interest because the increased supply of capital is often neutralised by the process of substitution. That is, a large part of the new capital does not compete with and bring down the price of the old capital. Instead, it is absorbed in new inventions, new types of machinery, and new processes of production, all of which take the place of labour, thus tending to increase rather than diminish the demand for capital and the rate of interest. To be sure, the demand for capital thus arising has not always been sufficient to offset the enlarged supply. Since the Industrial Revolution capital has at certain periods and in certain regions increased so rapidly that it could not all find employment in new forms and in old forms at the old rate. In some instances a decline in the rate of interest can be clearly traced to the disproportionately quick growth of capital. But this phenomenon has been far from uniform, and there is no indication that it will become so in the future. The possibilities of the process of substitution have been by no means exhausted.
The effects of government ownership are even more problematical. States and cities are, indeed, able to obtain capital more cheaply than private corporations for such public utilities as railways, telegraphs, tramways, and street lighting; and public ownership of all such concerns will probably become general in the not remote future. Nevertheless the social gain is not likely to be proportionate to the reduction of interest on this section of capital. A part, possibly a considerable part, of the saving in interest will be neutralised by the lower efficiency and greater cost of operation; for in this respect publicly managed are inferior to privately managed enterprises. Consequently, the charges to the public for the services rendered by these utilities cannot be reduced to the same degree as the rate of interest on the capital. On the other hand, the exclusion of private operating capital from thisvery large field of public utilities should increase competition among the various units of capital, and thus bring down its rewards. To what extent this would happen cannot be estimated even approximately. The only safe statement is that the decline in the general rate of interest would probably be slight.
The main hope of lightening the social burden of interest lies in the possible reduction in the necessary volume of capital, and especially in a wider distribution of interest-incomes. In many parts of the industrial field there is a considerable waste of capital through unnecessary duplication. This means that a large amount of unnecessary interest is paid by the consumer in the form of unnecessarily high prices. Again, the owners of capital and receivers of interest constitute only a minority of the population of all countries, with the possible exception of the United States. The great majority of the wage earners in all lands possess no capital, and obtain no interest. Not only are their incomes small, often pitiably small, but their lack of capital deprives them of the security, confidence, and independence which are required for comfortable existence and efficient citizenship. They have no income from productive property to protect them against the cessation of wages. During periods of unemployment they are frequently compelled to have recourse to charity, and to forego many of the necessary comforts of life. So long as the bulk of the means of production remains in the hands of a distinct capitalist class, this demoralising insecurity of the workers must continue as an essential part of our industrial system. While it might conceivably be eliminated through a comprehensive scheme of State insurance, this arrangement would substitute dependence upon the State for dependence upon the capitalist, and be much less desirable than ownership of income-bearing property.
The workers who possess no capital do not enjoy a normal and reasonable degree of independence, self respect, or self confidence. They have not sufficient control over the wage contract and the other conditions of employment, and they have nothing at all to say concerning the goods that they shall produce, or the persons to whom their product shall be sold. They lack the incentive to put forth their best efforts in production. They cannot satisfy adequately the instinct of property, the desire to control some of the determining forms of material possession. They are deprived of that consciousness of power which is generated exclusively by property, and which contributes so powerfully toward the making of a contended and efficient life. They do not possess a normal amount of freedom in politics, nor in those civic and social relations which lie outside the spheres of industry and politics. In a word, the worker without capital has not sufficient power over the ordering of his own life.
The most effective means of lessening the volume of interest, and bringing about a wider distribution of capital, is to be found in co-operative enterprise. Co-operation in general denotes the unified action of a group of persons for a common end. A church, a debating club, a joint stock company, exemplifies co-operation in this sense. In the strict and technical sense, it has received various definitions. Professor Taussig declares that it "consists essentially in getting rid of the managing employer"; but this description is applicable only to co-operatives of production. "A combination of individuals to economise by buying in common, or increase their profits by selling in common" (Encyclopedia Britannica) is likewise too narrow, since it fits only distributive and agricultural co-operation. According to C. R. Fay, a co-operative society is "an association for the purpose of joint trading, originatingamong the weak, and conducted always in an unselfish spirit." If the word, "trading" be stretched to comprehend manufacturing as well as commercial activities, Fay's definition is fairly satisfactory. The distinguishing circumstance, "originating among the weak," is also emphasised by Father Pesch in his statement that the essence, aim, and meaning of co-operation are to be found in "a combination of the economically weak in common efforts for the security and betterment of their condition."[154]In order to give the proper connotation for our purpose, we shall define co-operation as, that joint economic action which seeks to obtain for a relatively weak group all or part of the profits and interest which in the ordinary capitalist enterprise are taken by a smaller and different group. This formula puts in the foreground the important fact that in every form of co-operative effort, some interest or profits, or both, are diverted from those who would have received them under purely capitalistic arrangements, and distributed among a larger number of persons. Thus it indicates the bearing of co-operation upon the problem of lightening the social burden of interest.
From the viewpoint of economic function, co-operation may be divided into two general kinds, producers' and consumers'. The best example of the former is a wage earners' productive society; of the latter, a co-operative store. Credit co-operatives and agricultural co-operatives fall mainly under the former head, inasmuch as their principal object is to assist production, and to benefit men as producers rather than as consumers. Hence from the viewpoint of type, co-operation may be classified as credit, agricultural, distributive, and productive.
A co-operative credit society is a bank controlled by the persons who patronise it, and lending on personal rather than material security. Such banks are intended almost exclusively for the relatively helpless borrower, as, the small farmer, artisan, shopkeeper, and the small man generally. Fundamentally they are associations of neighbours who combine their resources and their credit in order to obtain loans on better terms than are accorded by the ordinary commercial banks. The capital is derived partly from the sale of shares of stock, partly from deposits, and partly from borrowed money. In Germany, where credit associations have been more widely extended and more highly developed than in any other country, they are of two kinds, named after their respective founders, Schulze-Delitzsch and Raiffeisen. The former operates chiefly in the cities, serves the middle classes rather than the very poor, requires all its members to subscribe for capital stock, commits them to a long course of saving, and thus develops their interest as lenders. The Raiffeisen societies have, as a rule, very little share capital, exist chiefly in the country districts, especially among the poorest of the peasantry, are based mostly on personal credit, and do not profess to encourage greatly the saving and lending activities of their members. Both forms of association loan money to their members at lower rates of interest than these persons could obtain elsewhere. Hence credit co-operation directly reduces the burden of interest.
The Schulze-Delitzsch societies have more than half a million members in the cities and towns of Germany, sixty per cent. of whom take advantage of the borrowing facilities. The Raiffeisen banks comprise about one-half of all the independent German agriculturists. Some form of co-operative banking is well established in every important country of Europe, except Denmark and Great Britain.In the former country its place seems to be satisfactorily filled by the ordinary commercial banks. Its absence from Great Britain is apparently due to the credit system provided by the large landholders, to the scarcity of peasant proprietors, and to general lack of initiative. It is especially strong in Italy, Belgium, and Austria, and it has made a promising beginning in Ireland. In every country in which it has obtained a foothold, it gives indication of steady and continuous progress. Nevertheless it is subject to definite limits. It can never make much headway among that class of persons whose material resources are sufficiently large and palpable to command loans on the usual terms offered by the commercial banks. As a rule, these terms are quite as favourable as those available through the co-operative credit associations. It is only because the poorer men cannot obtain loans from the commercial banks on the prevailing conditions that they are impelled to have recourse to the co-operative associations.
The chief operations of agricultural co-operative societies are manufacturing, marketing, and purchasing. In the first named field the most important example is the co-operative dairy. The owners of cows hold the stock or shares of the concern, and in addition to dividends receive profits in proportion to the amount of milk that they supply. In Ireland and some other countries, a portion of the profits goes to the employés of the dairy as a dividend on wages. Other productive co-operatives of agriculture are found in cheese making, bacon curing, distilling, and wine making. All are conducted on the same general principles as the co-operative dairy.
Through the marketing societies and purchasing societies, the farmers are enabled to sell their products to better advantage, and to obtain materials needed for carrying on agricultural operations more cheaply than would bepossible by isolated individual action. Some of the products marketed by the selling societies are eggs, milk, poultry, fruit, vegetables, live stock, and various kinds of grain. The purchasing societies supply for the most part manures, seeds, and machinery. Occasionally they buy the most costly machinery in such a way that the association becomes the corporate owner of the implements. In these cases the individual members have only the use of the machines, but they would be unable to enjoy even that advantage were it not for the intervention of the co-operative society. Where such arrangements exist, the society exemplifies not only co-operative buying but co-operative ownership.
Agricultural co-operation has become most widely extended in Denmark, and has displayed its most striking possibilities in Ireland. Relatively to its population, the former country has more farmers in co-operative societies, and has derived more profit therefrom, than any other nation. The rapid growth and achievements of agricultural co-operation in the peculiarly unfavourable circumstances of Ireland constitute the most convincing proof to be found anywhere of the essential soundness and efficacy of the movement. Various forms of rural co-operative societies are solidly established in Germany, France, Belgium, Italy, and Switzerland. In recent years the movement has made some progress in the United States, especially in relation to dairies, grain elevators, the marketing of live stock and fruit, and various forms of rural insurance. The co-operative insurance companies effect a saving to the Minnesota farmers of $700,000 annually, and the co-operative elevators handle about 30 per cent. of the grain marketed in that state. In 1915 the business transacted by the co-operative marketing and purchasing organisations of the farmers of the United States amounted to $1,400,000,000.
The transformation in the rural life of more than oneEuropean community through co-operation has amounted to little less than a revolution. Higher standards of agricultural products and production have been set up and maintained, better methods of farming have been inculcated and enforced, and the whole social, moral, and civic life of the people has been raised to a higher level. From the viewpoint of material gain, the chief benefits of agricultural co-operation have been the elimination of unnecessary middlemen, and the economies of buying in large quantities, selling in the best markets, and employing the most efficient implements. As compared with farming conducted on a large scale, the small farm possesses certain advantages, and is subject to certain disadvantages. It is less wasteful, permits greater attention to details, and makes a greater appeal to the self interest of the cultivator; but the small farmer cannot afford to buy the best machinery, nor is he in a position to carry on to the best advantage the commercial features of his occupation, such as borrowing, buying, and marketing. Co-operation frees him from all these handicaps. "The co-operative community ... is one in which groups of humble men combine their efforts, and to some extent their resources, in order to secure for themselves those advantages in industry which the masters of capital derive from the organisation of labour, from the use of costly machinery, and from the economies of business when done on a large scale. They apply in their industry the methods by which the fortunes of the magnates in commerce and manufacture are made." These words, uttered by a prominent member of the Irish co-operative movement, summarise the aims and achievements of agricultural co-operation in every country of Europe in which it has obtained a strong foothold. In every such community the small farm has gained at the expense of the large farm system. Finally, agricultural co-operation reduces the burden of interest by eliminating some unnecessary capital, stimulates savingamong the tillers of the soil by providing a ready and safe means of investment, and in manifold ways contributes materially toward a better distribution of wealth.
Co-operative stores are organised by and for consumers. In every country they follow rather closely the Rochdale system, so called from the English town in which the first store of this kind was established in 1844. The members of the co-operative society furnish the capital, and receive thereon interest at the prevailing rate, usually five per cent. The stores sell goods at about the same prices as their privately owned competitors, but return a dividend on the purchases of all those customers who are members of the society. The dividends are provided from the surplus which remains after wages, interest on the capital stock, and all other expenses have been paid. In some co-operative stores non-members receive a dividend on their purchases at half the rate accorded to members of the society, but only on condition that these payments shall be invested in the capital stock of the enterprise. And the members themselves are strongly urged to make this disposition of their purchase-dividends. Since the latter are paid only quarterly, the co-operative store exercises a considerable influence toward inducing its patrons to save and to become small capitalists.
In Great Britain the vast majority of the retail stores have been federated into two great wholesale societies, one in England and the other in Scotland. The retail stores provide the capital, and participate in the profits according to the amounts purchased, just as the individual consumers furnish the capital and share the profits of the retail establishments. The Scottish Wholesale Society divides a part of the profits among its employés. Besides their operations as jobbers, the wholesale societies are bankers for the retail stores, and own and operate factories, farms,warehouses, and steamships. Many of the retail co-operatives likewise carry on productive enterprises, such as milling, tailoring, bread making, and the manufacture of boots, shoes, and other commodities, and some of them build, sell, and rent cottages, and lend money to members who desire to obtain homes.
The co-operative store movement has made greatest progress in its original home, Great Britain. In 1913 about one person in every three was to some degree interested in or a beneficiary of these institutions. The profits of the stores amounted to about $71,302,070, which was about 35 per cent. on the capital. The employés numbered about 145,000, and the sales for the year aggregated $650,000,000. The English Wholesale Society was the largest flour miller and shoe manufacturer in Great Britain, and its total business amounted to $150,000,000. Outside of Great Britain, co-operative distribution has been most successful in Germany, Belgium, and Switzerland. It has had a fair measure of development in Italy, but has failed to assume any importance in France. "There is every sign that within the near future—except in France—the stores will come to include the great majority of the wage earning class, which is a constantly growing percentage of the total population."[155]Within recent years a respectable number of stores have been established on a sound basis in Canada and the United States. Owing, however, to the marked individualism and the better economic conditions of these two countries, the co-operative movement will continue for some time to be relatively slow.
As in the case of agricultural co-operation, the money benefits accruing to the members of the co-operative stores consist mainly of profits rather than interest. In the absence of the store societies, these profits would have gone for the most part to middlemen as payments for therisks and labour of conducting privately owned establishments. Forty-seven of the sixty million dollars profits of the British co-operative stores in 1910 were divided among more than two and one-half million members of these institutions, instead of going to a comparatively small number of private merchants. The other thirteen million dollars were interest on the capital stock. Had the members invested an equal amount in other enterprises they could, indeed, have obtained about the same rate and amount of interest, but in the absence of the co-operative stores their inducements and opportunities to save would have been much smaller. For it must be kept in mind that a very large part of the capital stock in the co-operative stores is derived from the members' dividends on their purchases at such stores, and would not have come into existence at all without these establishments. The gains of the co-operative stores, whether classified as profits or as interest, are evidently a not inconsiderable indication of a better distribution of wealth.
Co-operative production has occasionally been pronounced a failure. This judgment is too sweeping and too severe. "As a matter of fact," says a prominent London weekly, "the co-operators' success has been even more remarkable in production than in distribution. The co-operative movement runs five of the largest of our flour mills; it has, amongst others, the very largest of our boot factories; it makes cotton cloth and woollens, and all sorts of clothing; it has even a corset factory of its own; it turns out huge quantities of soap; it makes every article of household furniture; it produces cocoa and confectionery; it grows its own fruit and makes its own jams; it has one of the largest tobacco factories, and so on." Obviously this passage refers to that kind of productive co-operation which is carried on by the stores, not to productiveconcerns owned and managed by the workers therein employed. Nevertheless the enterprises in question are co-operatively managed, and hence exemplify co-operation rather than private and competitive industry. They ought not to be left out of any statement of the field occupied by co-operative production. The limitations and possibilities of co-operation in production can best be set forth by considering its three different forms separately.
The "perfect" form occurs when all the workers engaged in a concern own all the share capital, control the entire management, and receive the whole of the wages, profits, and interest. In this field the failures have been much more numerous and conspicuous than the successes. Godin's stove works at Guise, France, is the only important enterprise of this kind that is now in existence. Great Britain has several establishments in which the workers own a large part of the capital, but apparently none in which they are the sole proprietors and managers. The "labour societies" of Italy, consisting mostly of diggers, masons, and bricklayers, co-operatively enter into contracts for the performance of public works, and share in the profits of the undertaking in addition to their wages; but the only capital that they provide consists of comparatively simple and inexpensive tools. The raw material and other capital is furnished by the public authority which gives the contract.
A second kind of productive co-operation is found in the arrangement known as co-partnership. This is "the system under which, in the first place, a substantial and known share of the profit of a business belongs to the workers in it, not by right of any shares they may hold, or any other title, but simply by right of the labour they have contributed to make the profit; and, in the second place, every worker is at liberty to invest his profit, or any other savings, in shares of the society or company, and so become a member entitled to vote on the affairs of thebody which employs him."[156]So far as its first, or profit sharing, feature is concerned, co-partnership is not genuine co-operation, for it includes neither ownership of capital nor management of the business. Co-operative action begins only with the adoption of the second element. In most of the existing co-partnership concerns, all the employés are urged, and many of them required to invest at least a part of their profits in the capital stock. The most notable and successful of these experiments is that carried on by the South Metropolitan Gas Company of London. Practically all the company's 6,000 employés are now among its stockholders. Although their combined holdings are only about one-twenty-eighth of the total, they are empowered to select two of the ten members of the board of directors. Essentially the same co-partnership arrangements have been adopted by about one-half the privately owned gas companies of Great Britain. In none of them, however, have the workers obtained as yet such a large percentage of either ownership or control as in the South Metropolitan. Co-partnership exists in several other enterprises in Great Britain, and is found in a considerable number of French concerns. There are a few instances in the United States, the most thoroughgoing being that of N. O. Nelson & Co. at Le Claire, Ill.
As already noted, the co-operative stores exemplify a third type of co-operative production. In some cases the productive concern is under the management of a local retail establishment, but the great majority of them are conducted by the English and Scottish Wholesale Societies. As regards the employés of these enterprises, the arrangement is not true co-operation, since they have no part in the ownership of the capital. The Scottish Wholesale Society, as we have seen, permits the employés of its productive works to share in the profits thereof; nevertheless it does not admit them as stockholders, nor give them anyvoice in the management. In all cases the workers may, indeed, become owners of stock in their local retail stores. Since the latter are stockholders in the wholesale societies, which in turn own the productive enterprises, the workers have a certain indirect and attenuated proprietorship in the productive concerns. But they derive therefrom no dividends. All the interest and most of the profits of the productive establishments are taken by the wholesale and retail stores. For it is the theory of the wholesale societies that the employés in the works of production should share in the gains thereof only as consumers. They are to profit only in the same way and to the same extent as other consumer-members of the local retail establishments.
The most effective and beneficial form of co-operative production is evidently that which has been described as the "perfect" type. Were all production organised on this plan, the social burden of interest would be insignificant, industrial despotism would be ended, and industrial democracy realised. As things are, however, the establishments exemplifying this type are of small importance. Their increase and expansion are impeded by lack of directive ability and of capital, and the risk to the workers' savings. Yet none of these obstacles is necessarily insuperable. Directive ability can be developed in the course of time, just as it was in the co-operative stores. Capital can be obtained fast enough perhaps to keep pace with the supply of directive ability and the spirit of co-operation. The risk undertaken by workers who put their savings into productive concerns owned and managed by themselves need not be greater than that now borne by investors in private enterprises of the same kind. There is no essential reason why the former should not provide the same profits and insurance against business risks as the latter. While the employés assume none of the risks of capitalistic industry, neither do they receive any of the profits. If the co-operative factory exhibits the same degreeof business efficiency as the private enterprise it will necessarily afford the workers adequate protection for their savings and capital. Indeed, if "perfect" co-operative production is to be successful at all its profits will be larger than those of the capitalistic concern, owing to the greater interest taken by the workers in their tasks, and in the management of the business.
For a long time to come, however, it is probable that "perfect" co-operative production will be confined to relatively small and local industries. The difficulty of finding sufficient workers' capital and ability to carry on, for example, a transcontinental railroad or a nationwide steel business, is not likely to be overcome for one or two generations.[157]
The labour co-partnership form of co-operation is susceptible of much wider and more rapid extension. It can be adapted readily to the very large as well as to the small and medium sized concerns. Since it requires the workers to own but a part of the capital, it can be established in any enterprise in which the capitalists show themselves willing and sympathetic. In every industrial corporation there are some employés who possess savings, and these can be considerably increased through the profit sharing feature of co-partnership. A very long time must, indeed, elapse before the workers in any of the larger enterprises could get possession of all, or even of a controlling share of the capital, and a considerable time would be needed to educate and fit them for successful management.
Production under the direction of the co-operative stores can be extended faster than either of the other two forms, and it has before it a very wide even though definitely limited field. The British wholesale societies have already shown themselves able to conduct with great success large manufacturing concerns, have trained and attracted anadequate number of competent leaders, and have accumulated so much capital that they have been obliged to invest several million pounds in other enterprises. The possible scope of the stores and their co-operative production has been well described by C. R. Fay: "distribution of goods for personal consumption, first, among the working class population, secondly, among the salaried classes who feel a homogeneity of professional interest; production by working class organisations alone (with rare exceptions in Italy) of all the goods which they distribute to their members. But this is its limit. Distribution among the remaining sections of the industrial population; production for distribution to these members; production of the instruments of production, and production for international trade; the services of transport and exchange: all these industrial departments are, so far as can be seen, permanently outside the domain of a store movement."[158]
The theory by which the stores attempt to justify the exclusion of the employés of their productive concerns from a share of the profits thereof is that all profits come ultimately from the pockets of the consumer, and should all return to that source. The defect in this theory is that it ignores the question whether the consumers ought not to be required to pay a sufficiently high price for their goods to provide the producers with profits in addition to wages. While the wholesale stores are the owners and managers of the capital in the productive enterprises, and on the capitalistic principle should obtain the profits, the question remains whether this is necessarily a sound principle, and whether it is in harmony with the theory and ideals of co-operation. In those concerns which have adopted the labour co-partnership scheme, the workers, even when they own none of the capital, are accorded a part of the profits. It is assumed that this is a fairer and wiser method of distribution than that which gives thelabourer only wages, leaving all the profits to the manager-capitalist. This feature of co-partnership rests on the theory that the workers can, if they will, increase their efficiency and reduce the friction between themselves and their employer to such an extent as to make the profit sharing arrangement a good thing for both parties. Consequently the profits obtained by the workers are a payment for this specific contribution to the prosperity of the business. Why should not this theory find recognition in productive enterprises conducted by the co-operative stores?
In the second place, the workers in these concerns ought to be permitted to participate in the capital ownership and management. They would thus be strongly encouraged to become better workers, to save more money, and to increase their capacity for initiative and self government. Moreover, this arrangement would go farther than any other system toward reconciling the interests of producer and consumer. As producer, the worker would obtain, besides his wages, interest and profits up to the limit set by the competition of private productive concerns. As consumer, he would share in the profits and interest which would otherwise have gone to the private distributive enterprises. In this way the producer and consumer would each get the gains that were due specifically and respectively to his activity and efficiency.
At this point it will perhaps be well to sum up the advantages and to estimate the prospects of the co-operative movement. In all its forms co-operation eliminates some waste of capital and energy, and therefore transfers some interest and profits from a special capitalist and undertaking class to a larger and economically weaker group of persons. For it must be borne in mind that all co-operative enterprises are conducted mainly by and for labourersor small farmers. Hence the system always makes directly for a better distribution of wealth. To a considerable extent it transfers capital ownership from those who do not themselves work with or upon capital to those who are so engaged; namely, the labourers and the farmers; thus it diminishes the unhealthy separation now existing between the owners and the users of the instruments of production. Co-operation has, in the second place, a very great educational value. It enables and induces the weaker members of economic society to combine and utilise energies and resources that would otherwise remain unused and undeveloped; and it greatly stimulates and fosters initiative, self confidence, self restraint, self government, and the capacity for democracy. In other words, it vastly increases the development and efficiency of the individual. It likewise induces him to practise thrift, and frequently provides better fields for investment than would be open to him outside the co-operative movement. It diminishes selfishness and inculcates altruism; for no co-operative enterprise can succeed in which the individual members are not willing to make greater sacrifices for the common good than are ordinarily evoked by private enterprise. Precisely because co-operation makes such heavy demands upon the capacity for altruism, its progress always has been and must always continue to be relatively slow. Its fundamental and perhaps chief merit is that it does provide the mechanism and the atmosphere for a greater development of the altruistic spirit than is possible under any other economic system that has ever been tried or devised.
By putting productive property into the hands of those who now possess little or nothing, co-operation promotes social stability and social progress. This statement is true in some degree of all forms of co-operation, but it applies with particular force to those forms which are carried on by the working classes. A steadily growing number ofkeen-sighted social students are coming to realise that an industrial system which permits a comparatively small section of society to own the means of production and the instrumentalities of distribution, leaving to the great majority of the workers nothing but their labour power, is fundamentally unstable, and contains within itself the germs of inevitable dissolution. No mere adequacy of wages and other working conditions, and no mere security of the workers' livelihood, can permanently avert this danger, nor compensate the individual for the lack of power to determine those activities of life which depend upon the possession of property. Through co-operation this unnatural divorce of the users from the owners of capital can be minimised. The worker is converted from a mere wage earner to a wage earner plus a property owner, thus becoming a safer and more useful member of society. In a word, co-operation produces all the well recognised individual and social benefits which have in all ages been evoked by the "magic of property."
Finally, co-operation is a golden mean between individualism and Socialism. It includes all the good features and excludes all the evil features of both. On the one hand, it demands and develops individual initiative and self reliance, makes the rewards of the individual depend upon his own efforts and efficiency, and gives him full ownership of specific pieces of property. On the other hand, it compels him to submerge much of the selfishness and indifference to the welfare of his fellows which characterise our individual economy. It embraces all the good that is claimed for Socialism because it induces men to consider and to work earnestly for the common good, eliminates much of the waste of competitive industry, reduces and redistributes the burdens of profits and interest, and puts the workers in control of capital and industry. At the same time, it avoids the evils of an industrial despotism, of bureaucratic inefficiency, of individual indifference,and of an all pervading collective ownership. The resemblances that Socialists sometimes profess to see between their system and co-operation are superficial and far less important than the differences. Under both arrangements the workers would, we are told, own and control the means of production; but the members of a co-operative society directly own and immediately control adefinite amount of specific capital, which is essentiallyprivateproperty. In a Socialist régime the workers' ownership of capital would be collective not private, general not specific, while their control of the productive instruments with which they worked would be shared with other citizens. The latter would vastly outnumber the workers in any particular industry, and would be interested therein not as producers but as consumers. No less obvious and fundamental are the differences in favour of co-operation as regards the vital matters of freedom, opportunity, and efficiency.
In so far as the future of co-operation can be predicted from its past, the outlook is distinctly encouraging. The success attained in credit, agriculture, and distribution, is a sufficient guarantee for these departments. While productive co-operation has experienced more failures than successes, it has finally shown itself to be sound in principle, and feasible in practice. Its extension will necessarily be slow, but this is exactly what should be expected by any one who is acquainted with the limitations of human nature, and the history of human progress. If a movement that is capable of modifying so profoundly the condition of the workers as is co-operative production, gave indications of increasing rapidly, we should be inclined to question its soundness and permanence. Experience has given us abundant proof that no mere system or machinery can effect a revolutionary improvement in economic conditions. No social system can do more than provide a favourable environment for the development of those individualcapacities and energies which are the true and the only causal forces of betterment.
Nor is it to be expected that any of the other three forms of co-operation will ever cover the entire field to which it might, absolutely speaking, be extended; or that co-operation as a whole will become the one industrial system of the future. Even if the latter contingency were possible it would not be desirable. The elements of our economic life, and the capacities of human nature, are too varied and too complex to be forced with advantage into any one system, whether capitalism, Socialism, or co-operation. Any single system or form of socio-economic organisation would prove an intolerable obstacle to individual opportunity and social progress. Multiplicity and variety in social and industrial orders are required for an effective range of choices, and an adequate scope for human effort. In a general way the limits of co-operation in relation to the other forms of economic organisation have been satisfactorily stated by Mr. Aneurin Williams: "I suggest, therefore, that where there are great monopolies, either natural or created by the combination of businesses, there you have a presumption in favour of State and municipal ownership. In those forms of industry where individuality is everything; where there are new inventions to make, or to develop or put on the market, or merely to adopt in some rapidly transformed industry; where the eye of the master is everything; where reference to a committee, or appeals from one official to another, would cause fatal delay: there is the natural sphere of individual enterprise pure and simple. Between these two extremes there is surely a great sphere for voluntary association to carry on commerce, manufacture, and retail trade, in circumstances where there is no natural monopoly, and where the routine of work is not rapidly changing, but on the whole fairly well established and constant."[159]
The province open to co-operation is, indeed, very large. If it were fully occupied the danger of a social revolution would be non-existent, and what remained of the socio-industrial problem would be relatively undisturbing and unimportant. The "specialisation of function" in industrial organisation, as outlined by Mr. Williams, would give a balanced economy in which the three great socio-economic systems and principles would have full play, and each would be required to do its best in fair competition with the other two. Economic life would exhibit a diversity making strongly for social satisfaction and stability, inasmuch as no very large section of the industrial population would desire to overthrow the existing order. Finally, the choice of three great systems of industry would offer the utmost opportunity and scope for the energies and the development of the individual. And this, when all is said, remains the supreme end of a just and efficient socio-industrial organisation.
REFERENCES ON SECTION II
Fisher: The Rate of Interest. New York; 1907.Cassel: Nature and Necessity of Interest. London; 1903.Gonner: Interest and Saving. London; 1906.Landry:L'Intérêt du Capital. Paris; 1904.Menger: The Right to the Whole Produce of Labour. London; 1899.Cathrein-Gettelman: Socialism. St. Louis; 1904.Skelton: Socialism: A Critical Analysis. New York; 1911.Spargo: Socialism. Macmillan; 1906.Walling: Socialism As It Is. New York; 1912.Hillquit-Ryan: Socialism: Promise or Menace? Macmillan; 1914.Savatier:La Théorie Moderne du Capital et la Justice. Paris; 1898.Garriguet:Régime du Travail. Paris; 1908.Funk:Zins und Wucher. Tübingen; 1868.Holyoake: The History of Co-operation. London; 1906.Fay: Co-operation at Home and Abroad. London; 1908.Williams: Copartnership and Profit-Sharing. Henry Holt & Co.; 1913.Mann, Sievers, Cox: The Real Democracy. London; 1913.Also the works of Taussig, Devas, Antoine, Hobson, Nearing, Willoughby, and Hitze, which were given at the end of the introductory chapter.
Fisher: The Rate of Interest. New York; 1907.
Cassel: Nature and Necessity of Interest. London; 1903.
Gonner: Interest and Saving. London; 1906.
Landry:L'Intérêt du Capital. Paris; 1904.
Menger: The Right to the Whole Produce of Labour. London; 1899.
Cathrein-Gettelman: Socialism. St. Louis; 1904.
Skelton: Socialism: A Critical Analysis. New York; 1911.
Spargo: Socialism. Macmillan; 1906.
Walling: Socialism As It Is. New York; 1912.
Hillquit-Ryan: Socialism: Promise or Menace? Macmillan; 1914.
Savatier:La Théorie Moderne du Capital et la Justice. Paris; 1898.
Garriguet:Régime du Travail. Paris; 1908.
Funk:Zins und Wucher. Tübingen; 1868.
Holyoake: The History of Co-operation. London; 1906.
Fay: Co-operation at Home and Abroad. London; 1908.
Williams: Copartnership and Profit-Sharing. Henry Holt & Co.; 1913.
Mann, Sievers, Cox: The Real Democracy. London; 1913.
Also the works of Taussig, Devas, Antoine, Hobson, Nearing, Willoughby, and Hitze, which were given at the end of the introductory chapter.