Chapter 2

"According to the political economists of the school of Adam Smith and Leon Say,cheapnessis the word in which may be summed up theadvantages of unlimited competition. But why persist in considering the effect of cheapness with a view only to the momentary advantage of the consumer? Cheapness is advantageous to the consumer at the cost of introducing the seeds of ruinous anarchy among the producers. Cheapness is, so to speak, the hammer with which the rich among the producers crush their poorer rivals. Cheapness is the trap into which the daring speculators entice the hard-workers. Cheapness is the sentence of death to the producer on a small scale who has no money to invest in the purchase of machinery that his rich rivals can easily procure. Cheapness is the great instrument in the hands of monopoly; it absorbs the small manufacturer, the small shopkeeper, the small proprietor; it is, in one word, the destruction of the middle classes for the advantage of a few industrial oligarchs."Ought we, then, to consider cheapness as a curse? No one would attempt to maintain such an absurdity. But it is the specialty of wrong principles to turn good into evil and to corrupt all things. Under the system of competition cheapness is only a provisional and fallacious advantage. It is maintained only so long as there is a struggle; no sooner have the rich competitors driven out their poorer rivals than prices rise. Competition leads to monopoly, for the same reason cheapness leads to high prices.Thus, what has been made use of as a weapon in the contest between the producers, sooner or later becomes a cause of impoverishment among the consumers. And if to this cause we add the others we have already enumerated, first among which must be ranked the inordinate increase of the population, we shall be compelled to recognize the impoverishment of the mass of the consumers as a direct consequence of competition."But, on the other hand, this very competition which tends to dry up the sources of demand, urges production to over-supply. The confusion produced by the universal struggle prevents each producer from knowing the state of the market. He must work in the dark, and trust to chance for a sale. Why should he check the supply, especially as he can throw any loss on the workman whose wages are so pre-eminently liable to rise and fall? Even when production is carried on at a loss the manufacturers still often carry it on, because they will not let their machinery, &c., stand idle, or risk the loss of raw material, or lose their customers; and because productive industry as carried on under the competitive system being nothing else than a game of chance, the gambler will not lose his chance of a lucky stroke."Thus, and we cannot too often insist upon it, competition necessarily tends to increase supply and to diminish consumption; its tendencytherefore is precisely the opposite of what is sought by economic science; hence it is not merely oppressive but foolish as well.""And in all this, in order to avoid dwelling on truths which have become commonplaces, and sound declamatory from their very truth, we have said nothing of the frightful moral corruption which industry, organized, or more properly speaking, disorganized, as it is at the present day, has introduced among the middle classes. Everything has become venal, and competition invades even the domain of thought."The factory crushing the workshop; the showy establishment absorbing the humble shop; the artisan who is his own master replaced by the day-laborer; cultivation by the plow superseding that by the spade, and bringing the poor man's field under disgraceful homage to the money-lender; bankruptcies multiplied; manufacturing industry transformed by the ill-regulated extension of credit into a system of gambling where no one, not even the rogue, can be sure of winning; in short a vast confusion calculated to arouse jealousy, mistrust, and hatred, and to stifle, little by little, all generous aspirations, all faith, self-sacrifice, and poetry—such is the hideous but only too faithful picture of theresults obtained by the application of the principle of competition."[2]

"Ought we, then, to consider cheapness as a curse? No one would attempt to maintain such an absurdity. But it is the specialty of wrong principles to turn good into evil and to corrupt all things. Under the system of competition cheapness is only a provisional and fallacious advantage. It is maintained only so long as there is a struggle; no sooner have the rich competitors driven out their poorer rivals than prices rise. Competition leads to monopoly, for the same reason cheapness leads to high prices.Thus, what has been made use of as a weapon in the contest between the producers, sooner or later becomes a cause of impoverishment among the consumers. And if to this cause we add the others we have already enumerated, first among which must be ranked the inordinate increase of the population, we shall be compelled to recognize the impoverishment of the mass of the consumers as a direct consequence of competition.

"But, on the other hand, this very competition which tends to dry up the sources of demand, urges production to over-supply. The confusion produced by the universal struggle prevents each producer from knowing the state of the market. He must work in the dark, and trust to chance for a sale. Why should he check the supply, especially as he can throw any loss on the workman whose wages are so pre-eminently liable to rise and fall? Even when production is carried on at a loss the manufacturers still often carry it on, because they will not let their machinery, &c., stand idle, or risk the loss of raw material, or lose their customers; and because productive industry as carried on under the competitive system being nothing else than a game of chance, the gambler will not lose his chance of a lucky stroke.

"Thus, and we cannot too often insist upon it, competition necessarily tends to increase supply and to diminish consumption; its tendencytherefore is precisely the opposite of what is sought by economic science; hence it is not merely oppressive but foolish as well."

"And in all this, in order to avoid dwelling on truths which have become commonplaces, and sound declamatory from their very truth, we have said nothing of the frightful moral corruption which industry, organized, or more properly speaking, disorganized, as it is at the present day, has introduced among the middle classes. Everything has become venal, and competition invades even the domain of thought.

"The factory crushing the workshop; the showy establishment absorbing the humble shop; the artisan who is his own master replaced by the day-laborer; cultivation by the plow superseding that by the spade, and bringing the poor man's field under disgraceful homage to the money-lender; bankruptcies multiplied; manufacturing industry transformed by the ill-regulated extension of credit into a system of gambling where no one, not even the rogue, can be sure of winning; in short a vast confusion calculated to arouse jealousy, mistrust, and hatred, and to stifle, little by little, all generous aspirations, all faith, self-sacrifice, and poetry—such is the hideous but only too faithful picture of theresults obtained by the application of the principle of competition."[2]

The Fourierists, through their principal organ, M. Considérant, enumerate the evils of the existing civilisation in the following order:—

1. It employs an enormous quantity of labor and of human power unproductively, or in the work of destruction.

"In the first place there is the army, which in France, as in all other countries, absorbs the healthiest and strongest men, a large number of the most talented and intelligent, and a considerable part of the public revenue.... The existing state of society develops in its impure atmosphere innumerable outcasts, whose labor is not merely unproductive, but actually destructive: adventurers, prostitutes, people with no acknowledged means of living, beggars, convicts, swindlers, thieves, and others whose numbers tend rather to increase than to diminish...."To the list of unproductive labor fostered by our state of Society must be added that of the judicature and of the bar, of the courts of law and magistrates, the police, jailers, executioners, &c.,—functions indispensable to the state of society as it is."Also people of what is called 'good society'; those who pass their lives in doing nothing; idlers of all ranks."Also the numberless custom-house officials, tax-gatherers, bailiffs, excise-men; in short, all that army of men which overlooks, brings to account, takes, but produces nothing."Also the labors of sophists, philosophers, metaphysicians, political men, working in mistaken directions, who do nothing to advance science, and produce nothing but disturbance and sterile discussions; the verbiage of advocates, pleaders, witnesses, &c."And finally all the operations of commerce, from those of the bankers and brokers, down to those of the grocer behind his counter."[3]

"To the list of unproductive labor fostered by our state of Society must be added that of the judicature and of the bar, of the courts of law and magistrates, the police, jailers, executioners, &c.,—functions indispensable to the state of society as it is.

"Also people of what is called 'good society'; those who pass their lives in doing nothing; idlers of all ranks.

"Also the numberless custom-house officials, tax-gatherers, bailiffs, excise-men; in short, all that army of men which overlooks, brings to account, takes, but produces nothing.

"Also the labors of sophists, philosophers, metaphysicians, political men, working in mistaken directions, who do nothing to advance science, and produce nothing but disturbance and sterile discussions; the verbiage of advocates, pleaders, witnesses, &c.

"And finally all the operations of commerce, from those of the bankers and brokers, down to those of the grocer behind his counter."[3]

Secondly, they assert that even the industry and powers which in the present system are devoted to production, do not produce more than a small portion of what they might produce if better employed and directed:—

"Who with any good-will and reflection will not see how much the want of coherence—the disorder, the want of combination, the parcelling out of labor and leaving it wholly to individual action without any organization, without anylarge or general views—are causes which limit the possibilities of production, and destroy, or at least waste, our means of action? Does not disorder give birth to poverty, as order and good management give birth to riches? Is not want of combination a source of weakness, as combination is a source of strength? And who can say that industry, whether agricultural, domestic, manufacturing, scientific, artistic, or commercial, is organized at the present day either in the state or in municipalities? Who can say that all the work which is carried on in any of these departments is executed in subordination to any general views, or with foresight, economy, and order? Or, again, who can say that it is possible in our present state of society to develop, by a good education, all the faculties bestowed by nature on each of its members; to employ each one in functions which he would like, which he would be the most capable of, and which, therefore, he could carry on with the greatest advantage to himself and to others? Has it even been so much as attempted to solve the problems presented by varieties of character so as to regulate and harmonize the varieties of employments in accordance with natural aptitudes? Alas! The Utopia of the most ardent philanthropists is to teach reading and writing to twenty-five millions of the French people! And in the present stateof things we may defy them to succeed even in that!"And is it not a strange spectacle, too, and one which cries out in condemnation of us, to see this state of society where the soil is badly cultivated, and sometimes not cultivated at all; where man is ill lodged, ill clothed, and yet where whole masses are continually in need of work and pining in misery because they cannot find it? Of a truth we are forced to acknowledge that if the nations are poor and starving it is not because nature has denied the means of producing wealth, but because of the anarchy and disorder in our employment of those means; in other words, it is because society is wretchedly constituted and labor unorganized."But this is not all, and you will have but a faint conception of the evil if you do not consider that to all these vices of society, which dry up the sources of wealth and prosperity, must be added the struggle, the discord, the war, in short under many names and many forms which society cherishes and cultivates between the individuals that compose it. These struggles and discords correspond to radical oppositions—deep-seated antinomies between the various interests. Exactly in so far as you are able to establish classes and categories within the nation; in so far, also, you will have opposition of interests and internal warfare either avowed or secret, even if youtake into consideration the industrial system only."[4]

"And is it not a strange spectacle, too, and one which cries out in condemnation of us, to see this state of society where the soil is badly cultivated, and sometimes not cultivated at all; where man is ill lodged, ill clothed, and yet where whole masses are continually in need of work and pining in misery because they cannot find it? Of a truth we are forced to acknowledge that if the nations are poor and starving it is not because nature has denied the means of producing wealth, but because of the anarchy and disorder in our employment of those means; in other words, it is because society is wretchedly constituted and labor unorganized.

"But this is not all, and you will have but a faint conception of the evil if you do not consider that to all these vices of society, which dry up the sources of wealth and prosperity, must be added the struggle, the discord, the war, in short under many names and many forms which society cherishes and cultivates between the individuals that compose it. These struggles and discords correspond to radical oppositions—deep-seated antinomies between the various interests. Exactly in so far as you are able to establish classes and categories within the nation; in so far, also, you will have opposition of interests and internal warfare either avowed or secret, even if youtake into consideration the industrial system only."[4]

One of the leading ideas of this school is the wastefulness and at the same time the immorality of the existing arrangements for distributing the produce of the country among the various consumers, the enormous superfluity in point of number of the agents of distribution, the merchants, dealers, shopkeepers and their innumerable, employés, and the depraving character of such a distribution of occupations.

"It is evident that the interest of the trader is opposed to that of the consumer and of the producer. Has he not bought cheap and under-valued as much as possible in all his dealings with the producer, the very same article which, vaunting its excellence, he sells to you as dear as he can? Thus the interest of the commercial body, collectively and individually, is contrary to that of the producer and of the consumer—that is to say, to the interest of the whole body of society."The trader is a go-between, who profits by the general anarchy and the non-organization ofindustry. The trader buys up products, he buys up everything; he owns and detains everything, in such sort that:—"1stly. He holds both Production and Consumptionunder his yoke, because both must come to him either finally for the products to be consumed, or at first for the raw materials to be worked up. Commerce with all its methods of buying, and of raising and lowering prices, its innumerable devices, and its holding everything in the hands ofmiddle-men, levies toll right and left; it despotically gives the law to Production and Consumption, of which it ought to be only the subordinate."2ndly. It robs society by itsenormous profits—profits levied upon the consumer and the producer, and altogether out of proportion to the services rendered, for which a twentieth of the persons actually employed would be sufficient."3rdly. It robs society by the subtraction of its productive forces; taking off from productive labor nineteen-twentieths of the agents of trade who are mere parasites. Thus, not only does commerce rob society by appropriating an exorbitant share of the common wealth, but also by considerably diminishing the productive energy of the human beehive. The great majority of traders would return to productive work if a rational system of commercial organization weresubstituted for the inextricable chaos of the present state of things."4thly. It robs society by theadulterationof products, pushed at the present day beyond all bounds. And in fact, if a hundred grocers establish themselves in a town where before there were only twenty, it is plain that people will not begin to consume five times as many groceries. Hereupon the hundred virtuous grocers have to dispute between them the profits which before were honestly made by the twenty; competition obliges them to make it up at the expense of the consumer, either by raising the prices as sometimes happens, or by adulterating the goods as always happens. In such a state of things there is an end to good faith. Inferior or adulterated goods are sold for articles of good quality whenever the credulous customer is not too experienced to be deceived. And when the customer has been thoroughly imposed upon, the trading conscience consoles itself by saying, 'I state my price; people can take or leave; no one is obliged to buy.' The losses imposed on the consumers by the bad quality or the adulteration of goods are incalculable."5thly. It robs society byaccumulations, artificial or not, in consequence of which vast quantities of goods, collected in one place, are damaged and destroyed for want of a sale. Fourier (Th. des Quat. Mouv., p. 334, 1st ed.) says: 'Thefundamental principle of the commercial systems, that ofleaving full liberty to the merchants, gives them absolute right of property over the goods in which they deal: they have the right to withdraw them altogether, to withhold or even to burn them, as happened more than once with the Oriental Company of Amsterdam, which publicly burnt stores of cinnamon in order to raise the price. What it did with cinnamon it would have done with corn; but for the fear of being stoned by the populace, it would have burnt some corn in order to sell the rest at four times its value. Indeed, it actually is of daily occurrence in ports, for provisions of grains to be thrown into the sea because the merchants have allowed them to rot while waiting for a rise. I myself, when I was a clerk, have had to superintend these infamous proceedings, and in one day caused to be thrown into the sea some forty thousand bushels of rice, which might have been sold at a fair profit had the withholder been less greedy of gain. It is society that bears the cost of this waste, which takes place daily under shelter of the philosophical maxim offull liberty for the merchants.'"6thly. Commerce robs society, moreover, by all the loss, damage, and waste that follows from the extreme scattering of products in millions of shops, and by the multiplication and complication of carriage."7thly. It robs society by shameless and unlimitedusury—usury absolutely appalling. The trader carries on operations with fictitious capital, much higher in amount than his real capital. A trader with a capital of twelve hundred pounds will carry on operations, by means of bills and credit, on a scale of four, eight, or twelve thousand pounds. Thus he draws from capitalwhich he does not possess, usurious interest, out of all proportion with the capital he actually owns."8thly. It robs society by innumerablebankruptcies, for the daily accidents of our commercial system, political events, and any kind of disturbance, must usher in a day when the trader, having incurred obligations beyond his means, is no longer able to meet them; his failure, whether fraudulent or not, must be a severe blow to his creditors. The bankruptcy of some entails that of others, so that bankruptcies follow one upon another, causing widespread ruin. And it is always the producer and the consumer who suffer; for commerce, considered as a whole, does not produce wealth, and invests very little in proportion to the wealth which passes through its hands. How many are the manufactures crushed by these blows! how many fertile sources of wealth dried up by these devices, with all their disastrous consequences!"The producer furnishes the goods, the consumer the money. Trade furnishes credit,founded on little or no actual capital, and the different members of the commercial body are in no way responsible for one another. This, in a few words, is the whole theory of the thing."9thly. Commerce robs society by theindependenceandirresponsibilitywhich permits it to buy at the epochs when the producers are forced to sell and compete with one another, in order to procure money for their rent and necessary expenses of production. When the markets are overstocked and goods cheap, trade purchases. Then it creates a rise, and by this simple manœuvre despoils both producer and consumer."10thly. It robs society by a considerabledrawing offofcapital, which will return to productive industry when commerce plays its proper subordinate part, and is only an agency carrying on transactions between the producers (more or less distant) and the great centres of consumption—the communistic societies. Thus the capital engaged in the speculations of commerce (which, small as it is, compared to the immense wealth which passes through its hands, consists nevertheless of sums enormous in themselves), would return to stimulate production if commerce was deprived of the intermediate property in goods, and their distribution became a matter of administrative organization. Stock-jobbing is the most odious form of this vice of commerce."11thly. It robs society by themonopolisingor buying up of raw materials. 'For' (says Fourier, Th. des Quat. Mouv., p. 359, 1st ed.), 'the rise in price on articles that are bought up, is borne ultimately by the consumer, although in the first place by the manufacturers, who, being obliged to keep up their establishments, must make pecuniary sacrifices, and manufacture at small profits in the hope of better days; and it is often long before they can repay themselves the rise in prices which the monopoliser has compelled them to support in the first instance....""In short, all these vices, besides many others which I omit, are multiplied by the extreme complication of mercantile affairs; for products do not pass once only through the greedy clutches of commerce; there are some which pass and repass twenty or thirty times before reaching the consumer. In the first place, the raw material passes through the grasp of commerce before reaching the manufacturer who first works it up; then it returns to commerce to be sent out again to be worked up in a second form; and so on until it receives its final shape. Then it passes into the hands of merchants, who sell to the wholesale dealers, and these to the great retail dealers of towns, and these again to the little dealers and to the country shops; and each time that it changes hands, it leaves something behind it."... One of my friends who was lately exploring the Jura, where much working in metal is done, had occasion to enter the house of a peasant who was a manufacturer of shovels. He asked the price. 'Let us come to an understanding,' answered the poor laborer, not an economist at all, but a man of common sense; 'I sell them for 8d.to the trade, which retails them at 1s.8d.in the towns. If you could find a means of opening a direct communication between the workman and the consumer, you might have them for 1s.2d., and we should each gain 6d.by the transaction.'"[5]

"The trader is a go-between, who profits by the general anarchy and the non-organization ofindustry. The trader buys up products, he buys up everything; he owns and detains everything, in such sort that:—

"1stly. He holds both Production and Consumptionunder his yoke, because both must come to him either finally for the products to be consumed, or at first for the raw materials to be worked up. Commerce with all its methods of buying, and of raising and lowering prices, its innumerable devices, and its holding everything in the hands ofmiddle-men, levies toll right and left; it despotically gives the law to Production and Consumption, of which it ought to be only the subordinate.

"2ndly. It robs society by itsenormous profits—profits levied upon the consumer and the producer, and altogether out of proportion to the services rendered, for which a twentieth of the persons actually employed would be sufficient.

"3rdly. It robs society by the subtraction of its productive forces; taking off from productive labor nineteen-twentieths of the agents of trade who are mere parasites. Thus, not only does commerce rob society by appropriating an exorbitant share of the common wealth, but also by considerably diminishing the productive energy of the human beehive. The great majority of traders would return to productive work if a rational system of commercial organization weresubstituted for the inextricable chaos of the present state of things.

"4thly. It robs society by theadulterationof products, pushed at the present day beyond all bounds. And in fact, if a hundred grocers establish themselves in a town where before there were only twenty, it is plain that people will not begin to consume five times as many groceries. Hereupon the hundred virtuous grocers have to dispute between them the profits which before were honestly made by the twenty; competition obliges them to make it up at the expense of the consumer, either by raising the prices as sometimes happens, or by adulterating the goods as always happens. In such a state of things there is an end to good faith. Inferior or adulterated goods are sold for articles of good quality whenever the credulous customer is not too experienced to be deceived. And when the customer has been thoroughly imposed upon, the trading conscience consoles itself by saying, 'I state my price; people can take or leave; no one is obliged to buy.' The losses imposed on the consumers by the bad quality or the adulteration of goods are incalculable.

"5thly. It robs society byaccumulations, artificial or not, in consequence of which vast quantities of goods, collected in one place, are damaged and destroyed for want of a sale. Fourier (Th. des Quat. Mouv., p. 334, 1st ed.) says: 'Thefundamental principle of the commercial systems, that ofleaving full liberty to the merchants, gives them absolute right of property over the goods in which they deal: they have the right to withdraw them altogether, to withhold or even to burn them, as happened more than once with the Oriental Company of Amsterdam, which publicly burnt stores of cinnamon in order to raise the price. What it did with cinnamon it would have done with corn; but for the fear of being stoned by the populace, it would have burnt some corn in order to sell the rest at four times its value. Indeed, it actually is of daily occurrence in ports, for provisions of grains to be thrown into the sea because the merchants have allowed them to rot while waiting for a rise. I myself, when I was a clerk, have had to superintend these infamous proceedings, and in one day caused to be thrown into the sea some forty thousand bushels of rice, which might have been sold at a fair profit had the withholder been less greedy of gain. It is society that bears the cost of this waste, which takes place daily under shelter of the philosophical maxim offull liberty for the merchants.'

"6thly. Commerce robs society, moreover, by all the loss, damage, and waste that follows from the extreme scattering of products in millions of shops, and by the multiplication and complication of carriage.

"7thly. It robs society by shameless and unlimitedusury—usury absolutely appalling. The trader carries on operations with fictitious capital, much higher in amount than his real capital. A trader with a capital of twelve hundred pounds will carry on operations, by means of bills and credit, on a scale of four, eight, or twelve thousand pounds. Thus he draws from capitalwhich he does not possess, usurious interest, out of all proportion with the capital he actually owns.

"8thly. It robs society by innumerablebankruptcies, for the daily accidents of our commercial system, political events, and any kind of disturbance, must usher in a day when the trader, having incurred obligations beyond his means, is no longer able to meet them; his failure, whether fraudulent or not, must be a severe blow to his creditors. The bankruptcy of some entails that of others, so that bankruptcies follow one upon another, causing widespread ruin. And it is always the producer and the consumer who suffer; for commerce, considered as a whole, does not produce wealth, and invests very little in proportion to the wealth which passes through its hands. How many are the manufactures crushed by these blows! how many fertile sources of wealth dried up by these devices, with all their disastrous consequences!

"The producer furnishes the goods, the consumer the money. Trade furnishes credit,founded on little or no actual capital, and the different members of the commercial body are in no way responsible for one another. This, in a few words, is the whole theory of the thing.

"9thly. Commerce robs society by theindependenceandirresponsibilitywhich permits it to buy at the epochs when the producers are forced to sell and compete with one another, in order to procure money for their rent and necessary expenses of production. When the markets are overstocked and goods cheap, trade purchases. Then it creates a rise, and by this simple manœuvre despoils both producer and consumer.

"10thly. It robs society by a considerabledrawing offofcapital, which will return to productive industry when commerce plays its proper subordinate part, and is only an agency carrying on transactions between the producers (more or less distant) and the great centres of consumption—the communistic societies. Thus the capital engaged in the speculations of commerce (which, small as it is, compared to the immense wealth which passes through its hands, consists nevertheless of sums enormous in themselves), would return to stimulate production if commerce was deprived of the intermediate property in goods, and their distribution became a matter of administrative organization. Stock-jobbing is the most odious form of this vice of commerce.

"11thly. It robs society by themonopolisingor buying up of raw materials. 'For' (says Fourier, Th. des Quat. Mouv., p. 359, 1st ed.), 'the rise in price on articles that are bought up, is borne ultimately by the consumer, although in the first place by the manufacturers, who, being obliged to keep up their establishments, must make pecuniary sacrifices, and manufacture at small profits in the hope of better days; and it is often long before they can repay themselves the rise in prices which the monopoliser has compelled them to support in the first instance...."

"In short, all these vices, besides many others which I omit, are multiplied by the extreme complication of mercantile affairs; for products do not pass once only through the greedy clutches of commerce; there are some which pass and repass twenty or thirty times before reaching the consumer. In the first place, the raw material passes through the grasp of commerce before reaching the manufacturer who first works it up; then it returns to commerce to be sent out again to be worked up in a second form; and so on until it receives its final shape. Then it passes into the hands of merchants, who sell to the wholesale dealers, and these to the great retail dealers of towns, and these again to the little dealers and to the country shops; and each time that it changes hands, it leaves something behind it.

"... One of my friends who was lately exploring the Jura, where much working in metal is done, had occasion to enter the house of a peasant who was a manufacturer of shovels. He asked the price. 'Let us come to an understanding,' answered the poor laborer, not an economist at all, but a man of common sense; 'I sell them for 8d.to the trade, which retails them at 1s.8d.in the towns. If you could find a means of opening a direct communication between the workman and the consumer, you might have them for 1s.2d., and we should each gain 6d.by the transaction.'"[5]

To a similar effect Owen, in theBook of the New Moral World, part 2, chap. iii.

"The principle now in practice is to induce a large portion of society to devote their lives to distribute wealth upon a large, a medium, and a small scale, and to have it conveyed from place to place in larger or smaller quantities, to meet the means and wants of various divisions of society and individuals, as they are now situated in cities, towns, villages, and country places. This principle of distribution makes a class in society whose business is tobuy fromsome parties and tosell toothers. By this proceeding they are placed under circumstances whichinduce them to endeavor to buy at what appears at the time a low price in the market, and to sell again at the greatest permanent profit which they can obtain. Their real object being to get as much profit as gain between the seller to, and the buyer from them, as can be effected in their transactions."There are innumerable errors in principle and evils in practice which necessarily proceed from this mode of distributing the wealth of society."1st. A general class of distributers is formed, whose interest is separated from, and apparently opposed to, that of the individual from whom they buy and to whom they sell."2nd. Three classes of distributers are made, the small, the medium, and the large buyers and sellers; or the retailers, the wholesale dealers, and the extensive merchants."3rd. Three classes of buyers thus created constitute the small, the medium, and the large purchasers."By this arrangement into various classes of buyers and sellers, the parties are easily trained to learn that they have separate and opposing interests, and different ranks and stations in society. An inequality of feeling and condition is thus created and maintained, with all the servility and pride which these unequal arrangements are sure to produce. The parties are regularly trained in a general system of deception,in order that they may be the more successful in buying cheap and selling dear."The smaller sellers acquire habits of injurious idleness, waiting often for hours for customers. And this evil is experienced to a considerable extent even amongst the class of wholesale dealers."There are, also, by this arrangement, many more establishments for selling than are necessary in the villages, towns, and cities; and a very large capital is thus wasted without benefit to society. And from their number opposed to each other all over the country to obtain customers, they endeavor to undersell each other, and are therefore continually endeavoring to injure the producer by the establishment of what are called cheap shops and warehouses; and to support their character the master or his servants must be continually on the watch to buy bargains, that is, to procure wealth for less than the cost of its production."The distributers, small, medium, and large, have all to be supported by the producers, and the greater the number of the former compared with the latter, the greater will be the burden which the producer has to sustain; for as the number of distributers increases, the accumulation of wealth must decrease, and more must be required from the producer."The distributers of wealth, under the presentsystem, are a dead weight upon the producers, and are most active demoralisers of society. Their dependent condition, at the commencement of their task, teaches or induces them to be servile to their customers, and to continue to be so as long as they are accumulating wealth by their cheap buying and dear selling. But when they have secured sufficient to be what they imagine to be an independence—to live without business—they are too often filled with a most ignorant pride, and become insolent to their dependents."The arrangement is altogether a most improvident one for society, whose interest it is to produce the greatest amount of wealth of the best qualities; while the existing system of distribution is not only to withdraw great numbers from producing to become distributers, but to add to the cost of the consumer all the expense of a most wasteful and extravagant distribution; the distribution costing to the consumer many times the price of the original cost of the wealth purchased."Then, by the position in which the seller is placed by his created desire for gain on the one hand, and the competition he meets with from opponents selling similar productions on the other, he is strongly tempted to deteriorate the articles which he has for sale; and when these are provisions, either of home production or of foreign importation, the effects upon the health,and consequent comfort and happiness of the consumers, are often most injurious, and productive of much premature death, especially among the working classes, who, in this respect, are perhaps made to be the greatest sufferers, by purchasing the inferior or low-priced articles."The expense of thus distributing wealth in Great Britain and Ireland, including transit from place to place, and all the agents directly and indirectly engaged in this department, is, perhaps, little short of one hundred millions annually, without taking into consideration the deterioration of the quality of many of the articles constituting this wealth, by carriage, and by being divided into small quantities, and kept in improper stores and places, in which the atmosphere is unfavorable to the keeping of such articles in a tolerably good, and much less in the best, condition for use."

"There are innumerable errors in principle and evils in practice which necessarily proceed from this mode of distributing the wealth of society.

"1st. A general class of distributers is formed, whose interest is separated from, and apparently opposed to, that of the individual from whom they buy and to whom they sell.

"2nd. Three classes of distributers are made, the small, the medium, and the large buyers and sellers; or the retailers, the wholesale dealers, and the extensive merchants.

"3rd. Three classes of buyers thus created constitute the small, the medium, and the large purchasers.

"By this arrangement into various classes of buyers and sellers, the parties are easily trained to learn that they have separate and opposing interests, and different ranks and stations in society. An inequality of feeling and condition is thus created and maintained, with all the servility and pride which these unequal arrangements are sure to produce. The parties are regularly trained in a general system of deception,in order that they may be the more successful in buying cheap and selling dear.

"The smaller sellers acquire habits of injurious idleness, waiting often for hours for customers. And this evil is experienced to a considerable extent even amongst the class of wholesale dealers.

"There are, also, by this arrangement, many more establishments for selling than are necessary in the villages, towns, and cities; and a very large capital is thus wasted without benefit to society. And from their number opposed to each other all over the country to obtain customers, they endeavor to undersell each other, and are therefore continually endeavoring to injure the producer by the establishment of what are called cheap shops and warehouses; and to support their character the master or his servants must be continually on the watch to buy bargains, that is, to procure wealth for less than the cost of its production.

"The distributers, small, medium, and large, have all to be supported by the producers, and the greater the number of the former compared with the latter, the greater will be the burden which the producer has to sustain; for as the number of distributers increases, the accumulation of wealth must decrease, and more must be required from the producer.

"The distributers of wealth, under the presentsystem, are a dead weight upon the producers, and are most active demoralisers of society. Their dependent condition, at the commencement of their task, teaches or induces them to be servile to their customers, and to continue to be so as long as they are accumulating wealth by their cheap buying and dear selling. But when they have secured sufficient to be what they imagine to be an independence—to live without business—they are too often filled with a most ignorant pride, and become insolent to their dependents.

"The arrangement is altogether a most improvident one for society, whose interest it is to produce the greatest amount of wealth of the best qualities; while the existing system of distribution is not only to withdraw great numbers from producing to become distributers, but to add to the cost of the consumer all the expense of a most wasteful and extravagant distribution; the distribution costing to the consumer many times the price of the original cost of the wealth purchased.

"Then, by the position in which the seller is placed by his created desire for gain on the one hand, and the competition he meets with from opponents selling similar productions on the other, he is strongly tempted to deteriorate the articles which he has for sale; and when these are provisions, either of home production or of foreign importation, the effects upon the health,and consequent comfort and happiness of the consumers, are often most injurious, and productive of much premature death, especially among the working classes, who, in this respect, are perhaps made to be the greatest sufferers, by purchasing the inferior or low-priced articles.

"The expense of thus distributing wealth in Great Britain and Ireland, including transit from place to place, and all the agents directly and indirectly engaged in this department, is, perhaps, little short of one hundred millions annually, without taking into consideration the deterioration of the quality of many of the articles constituting this wealth, by carriage, and by being divided into small quantities, and kept in improper stores and places, in which the atmosphere is unfavorable to the keeping of such articles in a tolerably good, and much less in the best, condition for use."

In further illustration of the contrariety of interests between person and person, class and class, which pervades the present constitution of society, M. Considérant adds:—

"If the wine-growers wish for free trade, this freedom ruins the producer of corn, the manufacturers of iron, of cloth, of cotton, and—we are compelled to add—the smuggler and the customs'officer. If it is the interest of the consumer that machines should be invented which lower prices by rendering production less costly, these same machines throw out of work thousands of workmen who do not know how to, and cannot at once, find other work. Here, then, again is one of the innumerablevicious circlesof civilisation ... for there are a thousand facts which prove cumulatively that in our existing social system the introduction of any good brings always along with it some evil."In short, if we go lower down and come to vulgar details, we find that it is the interest of the tailor, the shoemaker, and the hatter that coats, shoes, and hats should be soon worn out; that the glazier profits by the hail-storms which break windows; that the mason and the architect profit by fires; the lawyer is enriched by law-suits; the doctor by disease; the wine-seller by drunkenness; the prostitute by debauchery. And what a disaster it would be for the judges, the police, and the jailers, as well as for the barristers and the solicitors, and all the lawyers' clerks, if crimes, offences, and law-suits were all at once to come to an end!"[6]

"In short, if we go lower down and come to vulgar details, we find that it is the interest of the tailor, the shoemaker, and the hatter that coats, shoes, and hats should be soon worn out; that the glazier profits by the hail-storms which break windows; that the mason and the architect profit by fires; the lawyer is enriched by law-suits; the doctor by disease; the wine-seller by drunkenness; the prostitute by debauchery. And what a disaster it would be for the judges, the police, and the jailers, as well as for the barristers and the solicitors, and all the lawyers' clerks, if crimes, offences, and law-suits were all at once to come to an end!"[6]

The following is one of the cardinal points of this school:—

"Add to all this, that civilisation, which sows dissension andwar on every side; which employs a great part of its powers in unproductive labor or even in destruction; which furthermore diminishes the public wealth by the unnecessary friction and discord it introduces into industry; add to all this, I say, that this same social system has for its special characteristic to produce a repugnance for work—a disgust for labor."Everywhere you hear the laborer, the artisan, the clerk complain of his position and his occupation, while they long for the time when they can retire from work imposed upon them by necessity. To be repugnant, to have for its motive and pivot nothing but the fear of starvation, is the great, the fatal, characteristic of civilised labor. The civilised workman is condemned to penal servitude. So long as productive labor is so organized that instead of being associated with pleasure it is associated with pain, weariness and dislike, it will always happen that all will avoid it who are able. With few exceptions, those only will consent to work who are compelled to it by want. Hence the most numerous classes, the artificers of social wealth, the active and direct creators of all comfort and luxury, will always be condemned to touch closely on poverty and hunger; they will always be the slaves to ignorance and degradation; they will continue to be always that huge herd ofmere beasts of burden whom we see ill-grown, decimated by disease, bowed down in the great workshop of society over the plow or over the counter, that they may prepare the delicate food, and the sumptuous enjoyments of the upper and idle classes."So long as no method of attractive labor has been devised, it will continue to be true that 'there must be many poor in order that there may be a few rich;' a mean and hateful saying, which we hear every day quoted as an eternal truth from the mouths of people who call themselves Christians or philosophers. It is very easy to understand that oppression, trickery, and especially poverty, are the permanent and fatal appanage of every state of society characterized by the dislike of work, for, in this case, there is nothing but poverty that will force men to labor. And the proof of this is, that if every one of all the workers were to become suddenly rich, nineteen-twentieths of all the work now done would be abandoned."[7]

"Everywhere you hear the laborer, the artisan, the clerk complain of his position and his occupation, while they long for the time when they can retire from work imposed upon them by necessity. To be repugnant, to have for its motive and pivot nothing but the fear of starvation, is the great, the fatal, characteristic of civilised labor. The civilised workman is condemned to penal servitude. So long as productive labor is so organized that instead of being associated with pleasure it is associated with pain, weariness and dislike, it will always happen that all will avoid it who are able. With few exceptions, those only will consent to work who are compelled to it by want. Hence the most numerous classes, the artificers of social wealth, the active and direct creators of all comfort and luxury, will always be condemned to touch closely on poverty and hunger; they will always be the slaves to ignorance and degradation; they will continue to be always that huge herd ofmere beasts of burden whom we see ill-grown, decimated by disease, bowed down in the great workshop of society over the plow or over the counter, that they may prepare the delicate food, and the sumptuous enjoyments of the upper and idle classes.

"So long as no method of attractive labor has been devised, it will continue to be true that 'there must be many poor in order that there may be a few rich;' a mean and hateful saying, which we hear every day quoted as an eternal truth from the mouths of people who call themselves Christians or philosophers. It is very easy to understand that oppression, trickery, and especially poverty, are the permanent and fatal appanage of every state of society characterized by the dislike of work, for, in this case, there is nothing but poverty that will force men to labor. And the proof of this is, that if every one of all the workers were to become suddenly rich, nineteen-twentieths of all the work now done would be abandoned."[7]

In the opinion of the Fourierists, the tendency of the present order of society is to a concentration of wealth in the hands of a comparatively few immensely rich individuals or companies, and the reduction of all the rest of thecommunity into a complete dependence on them. This was termed by Fourierla jeodalite industrielle.

"This feudalism," says M. Considérant, "would be constituted as soon as the largest part of the industrial and territorial property of the nation belongs to a minority which absorbs all its revenues, while the great majority, chained to the work-bench or laboring on the soil, must be content to gnaw the pittance which is cast to them."[8]

This disastrous result is to be brought about partly by the mere progress of competition, as sketched in our previous extract by M. Louis Blanc; assisted by the progress of national debts, which M. Considérant regards as mortgages of the whole land and capital of the country, of which "les capitalistes prêteurs" become, in a greater and greater measure, co-proprietors, receiving without labor or risk an increasing portion of the revenues.

It is impossible to deny that the considerations brought to notice in the preceding chapter make out a frightful case either against the existing order of society, or against the position of man himself in this world. How much of the evils should be referred to the one, and how much to the other, is the principal theoretic question which has to be resolved. But the strongest case is susceptible of exaggeration; and it will have been evident to many readers, even from the passages I have quoted, that such exaggeration is not wanting in the representations of the ablest and most candid Socialists. Though much of their allegations is unanswerable, not a little is the result of errors in political economy; by which, let me say once for all, I do not mean the rejection of any practical rules of policy which have been laid down by political economists, I mean ignorance of economic facts, and of the causes by which the economicphenomena of society as it is, are actually determined.

In the first place it is unhappily true that the wages of ordinary labor, in all the countries of Europe, are wretchedly insufficient to supply the physical and moral necessities of the population in any tolerable measure. But, when it is further alleged that even this insufficient remuneration has a tendency to diminish; that there is, in the words of M. Louis Blanc,une baisse continue des salaires; the assertion is in opposition to all accurate information, and to many notorious facts. It has yet to be proved that there is any country in the civilized world where the ordinary wages of labor, estimated either in money or in articles of consumption, are declining; while in many they are, on the whole, on the increase; and an increase which is becoming, not slower, but more rapid. There are, occasionally, branches of industry which are being gradually superseded by something else, and, in those, until production accommodates itself to demand, wages are depressed; which is an evil, but atemporary one, and would admit of great alleviation even in the present system of social economy. A diminution thus produced of the reward of labor in some particular employment is the effect and the evidence of increased remuneration, or of a new source of remuneration, in some other; the total and the average remuneration being undiminished, or even increased. To make out an appearance of diminution in the rate of wages in any leading branch of industry, it is always found necessary to compare some month or year of special and temporary depression at the present time, with the average rate, or even some exceptionally high rate, at an earlier time. The vicissitudes are no doubt a great evil, but they were as frequent and as severe in former periods of economical history as now. The greater scale of the transactions, and the greater number of persons involved in each fluctuation, may make the fluctuation appear greater, but though a larger population affords more sufferers, the evil does not weigh heavier on each of them individually. There is much evidence of improvement, andnone, that is at all trustworthy, of deterioration, in the mode of living of the laboring population of the countries of Europe; when there is any appearance to the contrary it is local or partial, and can always be traced either to the pressure of some temporary calamity, or to some bad law or unwise act of government which admits of being corrected, while the permanent causes all operate in the direction of improvement.

M. Louis Blanc, therefore, while showing himself much more enlightened than the older school of levellers and democrats, inasmuch as he recognizes the connection between low wages and the over-rapid increase of population, appears to have fallen into the same error which was at first committed by Malthus and his followers, that of supposing that because population has a greater power of increase than subsistence, its pressure upon subsistence must be always growing more severe. The difference is that the early Malthusians thought this an irrepressible tendency, while M. Louis Blanc thinks that it canbe repressed, but only under a system of Communism. It is a great point gained for truth when it comes to be seen that the tendency to over-population is a fact which Communism, as well as the existing order of society, would have to deal with. And it is much to be rejoiced at that this necessity is admitted by the most considerable chiefs of all existing schools of Socialism. Owen and Fourier, no less than M. Louis Blanc, admitted it, and claimed for their respective systems a pre-eminent power of dealing with this difficulty. However this may be, experience shows that in the existing state of society the pressure of population on subsistence, which is the principal cause of low wages, though a great, is not an increasing evil; on the contrary, the progress of all that is called civilization has a tendency to diminish it, partly by the more rapid increase of the means of employing and maintaining labor, partly by the increased facilities opened to labor for transporting itself to new countries and unoccupied fields of employment, and partly by a general improvementin the intelligence and prudence of the population. This progress, no doubt, is slow; but it is much that such progress should take place at all, while we are still only in the first stage of that public movement for the education of the whole people, which when more advanced must add greatly to the force of all the two causes of improvement specified above. It is, of course, open to discussion what form of society has the greatest power of dealing successfully with the pressure of population on subsistence, and on this question there is much to be said for Socialism; what was long thought to be its weakest point will, perhaps, prove to be one of its strongest. But it has no just claim to be considered as the sole means of preventing the general and growing degradation of the mass of mankind through the peculiar tendency of poverty to produce over-population. Society as at present constituted is not descending into that abyss, but gradually, though slowly, rising out of it, and this improvement is likely to be progressive if bad laws do not interfere with it.

Next, it must be observed that Socialists generally, and even the most enlightened of them, have a very imperfect and one-sided notion of the operation of competition. They see half its effects, and overlook the other half; they regard it as an agency for grinding down every one's remuneration—for obliging every one to accept less wages for his labor, or a less price for his commodities, which would be true only if every one had to dispose of his labor or his commodities to some great monopolist, and the competition were all on one side. They forget that competition is a cause of high prices and values as well as of low; that the buyers of labor and of commodities compete with one another as well as the sellers; and that if it is competition which keeps the prices of labor and commodities as low as they are, it is competition which prevents them from falling still lower. In truth, when competition is perfectly free on both sides, its tendency is not specially either to raise or to lower the price of articles, but to equalize it; to level inequalities of remuneration, and to reduceall to a general average, a result which, in so far as realized (no doubt very imperfectly), is, on Socialistic principles, desirable. But if, disregarding for the time that part of the effects of competition which consists in keeping up prices, we fix our attention on its effect in keeping them down, and contemplate this effect in reference solely to the interest of the laboring classes, it would seem that if competition keeps down wages, and so gives a motive to the laboring classes to withdraw the labor market from the full influence of competition, if they can, it must on the other hand have credit for keeping down the prices of the articles on which wages are expended, to the great advantage of those who depend on wages. To meet this consideration Socialists, as we said in our quotation from M. Louis Blanc, are reduced to affirm that the low prices of commodities produced by competition are delusive and lead in the end to higher prices than before, because when the richest competitor has got rid of all his rivals, he commands the market and can demand any price he pleases. Now, thecommonest experience shows that this state of things, under really free competition, is wholly imaginary. The richest competitor neither does nor can get rid of all his rivals, and establish himself in exclusive possession of the market; and it is not the fact that any important branch of industry or commerce formerly divided among many has become, or shows any tendency to become, the monopoly of a few.

The kind of policy described is sometimes possible where, as in the case of railways, the only competition possible is between two or three great companies, the operations being on too vast a scale to be within the reach of individual capitalists; and this is one of the reasons why businesses which require to be carried on by great joint-stock enterprises cannot be trusted to competition, but, when not reserved by the State to itself, ought to be carried on under conditions prescribed, and, from time to time, varied by the State, for the purpose of insuring to the public a cheaper supply of its wants than would be afforded by private interest in the absence of sufficientcompetition. But in the ordinary branches of industry no one rich competitor has it in his power to drive out all the smaller ones. Some businesses show a tendency to pass out of the hands of many small producers or dealers into a smaller number of larger ones; but the cases in which this happens are those in which the possession of a larger capital permits the adoption of more powerful machinery, more efficient by more expensive processes, or a better organized and more economical mode of carrying on business, and thus enables the large dealer legitimately and permanently to supply the commodity cheaper than can be done on the small scale; to the great advantage of the consumers, and therefore of the laboring classes, and diminishing,pro tanto, that waste of the resources of the community so much complained of by Socialists, the unnecessary multiplication of mere distributors, and of the various other classes whom Fourier calls the parasites of industry. When this change is effected, the larger capitalists, either individual or joint stock, among which the business isdivided, are seldom, if ever, in any considerable branch of commerce, so few as that competition shall not continue to act between them; so that the saving in cost, which enabled them to undersell the small dealers, continues afterwards, as at first, to be passed on, in lower prices, to their customers. The operation, therefore, of competition in keeping down the prices of commodities, including those on which wages are expended, is not illusive but real, and, we may add, is a growing, not a declining, fact.

But there are other respects, equally important, in which the charges brought by Socialists against competition do not admit of so complete an answer. Competition is the best security for cheapness, but by no means a security for quality. In former times, when producers and consumers were less numerous, it was a security for both. The market was not large enough nor the means of publicity sufficient to enable a dealer to make a fortune by continually attracting new customers: his success depended on his retaining those that he had; and when a dealer furnishedgood articles, or when he did not, the fact was soon known to those whom it concerned, and he acquired a character for honest or dishonest dealing of more importance to him than the gain that would be made by cheating casual purchasers. But on the great scale of modern transactions, with the great multiplication of competition and the immense increase in the quantity of business competed for, dealers are so little dependent on permanent customers that character is much less essential to them, while there is also far less certainty of their obtaining the character they deserve. The low prices which a tradesman advertises are known, to a thousand for one who has discovered for himself or learned from others, that the bad quality of the goods is more than an equivalent for their cheapness; while at the same time the much greater fortunes now made by some dealers excite the cupidity of all, and the greed of rapid gain substitutes itself for the modest desire to make a living by their business. In this manner, as wealth increases and greater prizes seem to be within reach, moreand more of a gambling spirit is introduced into commerce; and where this prevails not only are the simplest maxims of prudence disregarded, but all, even the most perilous, forms of pecuniary improbity receive a terrible stimulus. This is the meaning of what is called the intensity of modern competition. It is further to be mentioned that when this intensity has reached a certain height, and when a portion of the producers of an article or the dealers in it have resorted to any of the modes of fraud, such as adulteration, giving short measure, &c., of the increase of which there is now so much complaint, the temptation is immense on these to adopt the fraudulent practises, who would not have originated them; for the public are aware of the low prices fallaciously produced by the frauds, but do not find out at first, if ever, that the article is not worth the lower price, and they will not go on paying a higher price for a better article, and the honest dealer is placed at a terrible disadvantage. Thus the frauds, begun by a few, become customs ofthe trade, and the morality of the trading classes is more and more deteriorated.

On this point, therefore, Socialists have really made out the existence not only of a great evil, but of one which grows and tends to grow with the growth of population and wealth. It must be said, however, that society has never yet used the means which are already in its power of grappling with this evil. The laws against commercial frauds are very defective, and their execution still more so. Laws of this description have no chance of being really enforced unless it is the special duty of some one to enforce them. They are specially in need of a public prosecutor. It is still to be discovered how far it is possible to repress by means of the criminal law a class of misdeeds which are now seldom brought before the tribunals, and to which, when brought, the judicial administration of this country is most unduly lenient. The most important class, however, of these frauds, to the mass of the people, those which affect the price or quality of articles of daily consumption, can be in a great measureovercome by the institution of co-operative stores. By this plan any body of consumers who form themselves into an association for the purpose, are enabled to pass over the retail dealers and obtain their articles direct from the wholesale merchants, or, what is better (now that wholesale co-operative agencies have been established), from the producers, thus freeing themselves from the heavy tax now paid to the distributing classes and at the same time eliminate the usual perpetrators of adulterations and other frauds. Distribution thus becomes a work performed by agents selected and paid by those who have no interest in anything but the cheapness and goodness of the article; and the distributors are capable of being thus reduced to the numbers which the quantity of work to be done really requires. The difficulties of the plan consist in the skill and trustworthiness required in the managers, and the imperfect nature of the control which can be exercised over them by the body at large. The great success and rapid growth of the system prove, however, that these difficultiesare, in some tolerable degree, overcome. At all events, if the beneficial tendency of the competition of retailers in promoting cheapness is fore-gone, and has to be replaced by other securities, the mischievous tendency of the same competition in deteriorating quality is at any rate got rid of; and the prosperity of the co-operative stores shows that this benefit is obtained not only without detriment to cheapness, but with great advantage to it, since the profits of the concerns enable them to return to the consumers a large percentage on the price of every article supplied to them. So far, therefore, as this class of evils is concerned, an effectual remedy is already in operation, which, though suggested by and partly grounded on socialistic principles, is consistent with the existing constitution of property.

With regard to those greater and more conspicuous economical frauds, or malpractices equivalent to frauds, of which so many deplorable cases have become notorious—committed by merchants and bankers betweenthemselves or between them and those who have trusted them with money, such a remedy as above described is not available, and the only resources which the present constitution of society affords against them are a sterner reprobation by opinion, and a more efficient repression by the law. Neither of these remedies has had any approach to an effectual trial. It is on the occurrence of insolvencies that these dishonest practices usually come to light; the perpetrators take their place, not in the class of malefactors, but in that of insolvent debtors; and the laws of this and other countries were formerly so savage against simple insolvency, that by one of those reactions to which the opinions of mankind are liable, insolvents came to be regarded mainly as objects of compassion, and it seemed to be thought that the hand both of law and of public opinion could hardly press too lightly upon them. By an error in a contrary direction to the ordinary one of our law, which in the punishment of offences in general wholly neglects the question of reparation to the sufferer,our bankruptcy laws have for some time treated the recovery for creditors of what is left of their property as almost the sole object, scarcely any importance being attached to the punishment of the bankrupt for any misconduct which does not directly interfere with that primary purpose. For three or four years past there has been a slight counter-reaction, and more than one bankruptcy act has been passed, somewhat less indulgent to the bankrupt; but the primary object regarded has still been the pecuniary interest of the creditors, and criminality in the bankrupt himself, with the exception of a small number of well-marked offences, gets off almost with impunity. It may be confidently affirmed, therefore, that, at least in this country, society has not exerted the power it possesses of making mercantile dishonesty dangerous to the perpetrator. On the contrary, it is a gambling trick in which all the advantage is on the side of the trickster: if the trick succeeds it makes his fortune, or preserves it; if it fails, he is at most reduced to poverty, which was perhapsalready impending when he determined to run the chance, and he is classed by those who have not looked closely into the matter, and even by many who have, not among the infamous but among the unfortunate. Until a more moral and rational mode of dealing with culpable insolvency has been tried and failed, commercial dishonesty cannot be ranked among evils the prevalence of which is inseparable from commercial competition.

Another point on which there is much misapprehension on the part of Socialists, as well as of Trades Unionists and other partisans of Labor against Capital, relates to the proportions in which the produce of the country is really shared and the amount of what is actually diverted from those who produce it, to enrich other persons. I forbear for the present to speak of the land, which is a subject apart. But with respect to capital employed in business, there is in the popular notions a great deal of illusion. When, for instance, a capitalist invests £20,000 in his business, and draws from it an income of(suppose) £2,000 a year, the common impression is as if he was the beneficial owner both of the £20,000 and of the £2,000, while the laborers own nothing but their wages. The truth, however, is, that he only obtains the £2,000 on condition of applying no part of the £20,000 to his own use. He has the legal control over it, and might squander it if he chose, but if he did he would not have the £2,000 a year also. As long as he derives an income from his capital he has not the option of withholding it from the use of others. As much of his invested capital as consists of buildings, machinery, and other instruments of production, are applied to production and are not applicable to the support or enjoyment of any one. What is so applicable (including what is laid out in keeping up or renewing the buildings and instruments) is paid away to laborers, forming their remuneration and their share in the division of the produce. For all personal purposes they have the capital and he has but the profits, which it only yields to him on condition that the capital itself is employed in satisfyingnot his own wants, but those of laborers. The proportion which the profits of capital usually bear to capital itself (or rather to the circulating portion of it) is the ratio which the capitalist's share of the produce bears to the aggregate share of the laborers. Even of his own share a small part only belongs to him as the owner of capital. The portion of the produce which falls to capital merely as capital is measured by the interest of money, since that is all that the owner of capital obtains when he contributes nothing to production except the capital itself. Now the interest of capital in the public funds, which are considered to be the best security, is at the present prices (which have not varied much for many years) about three and one-third per cent. Even in this investment there is some little risk—risk of repudiation, risk of being obliged to sell out at a low price in some commercial crisis.

Estimating these risks at 1/3 per cent., the remaining 3 per cent. may be considered as the remuneration of capital, apart from insurance against loss. On the security of a mortgage4 per cent. is generally obtained, but in this transaction there are considerably greater risks—the uncertainty of titles to land under our bad system of law; the chance of having to realize the security at a great cost in law charges; and liability to delay in the receipt of the interest even when the principal is safe. When mere money independently of exertion yields a larger income, as it sometimes does, for example, by shares in railway or other companies, the surplus is hardly ever an equivalent for the risk of losing the whole, or part, of the capital by mismanagement, as in the case of the Brighton Railway, the dividend of which, after having been 6 per cent. per annum, sunk to from nothing to 1-1/2 per cent., and shares which had been bought at 120 could not be sold for more than about 43. When money is lent at the high rates of interest one occasionally hears of, rates only given by spend-thrifts and needy persons, it is because the risk of loss is so great that few who possess money can be induced to lend to them at all. So little reason is there for the outcry against "usury"as one of the grievous burthens of the working-classes. Of the profits, therefore, which a manufacturer or other person in business obtains from his capital no more than about 3 per cent. can be set down to the capital itself. If he were able and willing to give up the whole of this to his laborers, who already share among them the whole of his capital as it is annually reproduced from year to year, the addition to their weekly wages would be inconsiderable. Of what he obtains beyond 3 per cent. a great part is insurance against the manifold losses he is exposed to, and cannot safely be applied to his own use, but requires to be kept in reserve to cover those losses when they occur. The remainder is properly the remuneration of his skill and industry—the wages of his labor of superintendence. No doubt if he is very successful in business these wages of his are extremely liberal, and quite out of proportion to what the same skill and industry would command if offered for hire. But, on the other hand, he runs a worse risk than that of being out of employment; that of doing thework without earning anything by it, of having the labor and anxiety without the wages. I do not say that the drawbacks balance the privileges, or that he derives no advantage from the position which makes him a capitalist and employer of labor, instead of a skilled superintendent letting out his services to others; but the amount of his advantage must not be estimated by the great prizes alone. If we subtract from the gains of some the losses of others, and deduct from the balance a fair compensation for the anxiety, skill, and labor of both, grounded on the market price of skilled superintendence, what remains will be, no doubt, considerable, but yet, when compared to the entire capital of the country, annually reproduced and dispensed in wages, it is very much smaller than it appears to the popular imagination; and were the whole of it added to the share of the laborers it would make a less addition to that share than would be made by any important invention in machinery, or by the suppression of unnecessary distributors and other "parasites ofindustry." To complete the estimate, however, of the portion of the produce of industry which goes to remunerate capital we must not stop at the interest earned out of the produce by the capital actually employed in producing it, but must include that which is paid to the former owners of capital which has been unproductively spent and no longer exists, and is paid, of course, out of the produce of other capital. Of this nature is the interest of national debts, which is the cost a nation is burthened with for past difficulties and dangers, or for past folly or profligacy of its rulers, more or less shared by the nation itself. To this must be added the interest on the debts of landowners and other unproductive consumers; except so far as the money borrowed may have been spent in remunerative improvement of the productive powers of the land. As for landed property itself—the appropriation of the rent of land by private individuals—I reserve, as I have said, this question for discussion hereafter; for the tenure of land might be varied in any mannerconsidered desirable, all the land might be declared the property of the State, without interfering with the right of property in anything which is the product of human labor and abstinence.

It seemed desirable to begin the discussion of the Socialist question by these remarks in abatement of Socialist exaggerations, in order that the true issues between Socialism and the existing state of society might be correctly conceived. The present system is not, as many Socialists believe, hurrying us into a state of general indigence and slavery from which only Socialism can save us. The evils and injustices suffered under the present system are great, but they are not increasing; on the contrary, the general tendency is towards their slow diminution. Moreover the inequalities in the distribution of the produce between capital and labor, however they may shock the feeling of natural justice, would not by their mere equalisation afford by any means so large a fund for raising the lower levels of remuneration as Socialists,and many besides Socialists, are apt to suppose. There is not any one abuse or injustice now prevailing in society by merely abolishing which the human race would pass out of suffering into happiness. What is incumbent on us is a calm comparison between two different systems of society, with a view of determining which of them affords the greatest resources for overcoming the inevitable difficulties of life. And if we find the answer to this question more difficult, and more dependent upon intellectual and moral conditions, than is usually thought, it is satisfactory to reflect that there is time before us for the question to work itself out on an experimental scale, by actual trial. I believe we shall find that no other test is possible of the practicability or beneficial operation of Socialist arrangements; but that the intellectual and moral grounds of Socialism deserve the most attentive study, as affording in many cases the guiding principles of the improvements necessary to give the present economic system of society its best chance.

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