from time to time supplement its service of bank regulation and supervision by enabling, if not requiring, the banks to effect insurance in a state-administered fund for the benefit of depositors. Such insurance is more needed in some localities than in others and should be optional with the banks. If an old bank with large deposits is satisfied to rest on the reputation it has been years in building, it would be wrong to make it pay taxes or premiums to provide for the depositors of other banks. It is safe to say that once such legislation is in force, there will be banks to take the insurance or accept the guaranty. The state for the present will be doing enough for depositors when it enables those who are not sure of the stability of banks to do business with banks whose deposits are insured. The insurance should not be paid or the guaranty redeemed, until, as in Kansas, the assets are finally liquidated and the bank wound up. To try to pay when the banks close is to attempt the impossible. Economy and social policy alike favor the Kansas plan, for the delay stipulated in payment will keep the depositor from such carelessness in choosing his banker as has been seen in Oklahoma. This is true even if the depositor believes that other bankers would probably cash his guaranty fund certificates in case his own bank failed. The fund must be large, not less than two per cent of deposits and larger than that in states where there are several banks with deposits many times the average. Other features desirable in deposit guaranty legislation have been sufficiently discussed in the foregoing pages. Bank failures have not been the chief defect in American banking. The immobility of reserves and the lack of proper mechanism for the seasonal expansion and contraction of credits have been far greater. Mobilizing the reserves and providing elastic credits will solve many problems. Our banking system, nevertheless, will remain individual, and our banks numerous and independent beyond anything known abroad. The possibility of failures will be ever in the thought of many, and occasional failures will be inevitable. How to minimize the resulting social and financial loss will remain a problem worthy of the efforts of banker and economist. THORNTON COOKE. FIDELITY TRUST COMPANY, KANSAS CITY, Mo. THE SOCIAL POINT OF VIEW IN ECONOMICS. I SUMMARY I. Importance of the distinction between individual and social points of view, 115. - II. General meaning of the social point of view, (1) Social-contract theory, 122. (3) Common-consciousness theory, 121.1. What is society? 121. (2) Social-organism theory, 123. 126.— (4) Conscious-commonness theory, 128.2. The application of the concept of society, 132. (1) Society as a whole, 133. - (2) The social individual, 133. III. The special meaning of the social point of view in economics, 136. I. IMPORTANCE OF THE DISTINCTION BETWEEN ECONOMICS is beset with "nice distinctions," leading well nigh to strangulation by definitions. Some of these, however, are of fundamental importance, and among such is the distinction between the individual and the social points of view. In this paper an attempt is made to demonstrate the fundamental importance of this distinction, and to indicate its logical significance. In another paper the distinction will be further developed in an applied way, and an attempt will be made to work out a true and consistent use of "the social point of view," with regard to the main economic concepts. At the very threshold of economic analysis we are met by the troublesome concept of "wealth," and almost immediately, as we attempt to gain a measurable material with which to work, we realize that what is regarded as wealth by the individual is not necessarily regarded as wealth from the point of view of the whole group of which the individual is a member. In defining wealth to an inquiring class, what teacher has not had to fall back upon difference in point of view? And so it is with "income." Of course the idea of production of wealth must vary where the concept of wealth itself varies, and from the beginning of economic science differences of opinion as to what activities are productive " have existed. Those who have insisted that wealth is material have logically enough taken an individual point of view; for, according to that point of view, the significance of exchangeability among individuals is emphasized. The same thinkers have frequently ascribed productivity solely to those who work on tangible commodities.1 It will be observed, too, that it is in accord with the fact that generally material things alone are the object of theft, that your thorogoing individualist can class predatory activities as productive. At the other extreme stand those whom we may call societists. These men generally include a great variety of intangible elements and services in wealth, and logically enough they emphasize not a stock of material goods but productive power or capacity (as a source of income). Their concept of production is correspondingly broad. Such ideas are represented by the Nationalist, Friedrich List. Again, the problem of value has been called the heart of economic analysis; and is it not? But who 1 According to an individual point of view, wealth must be exchangeable and appropriable by individuals. These qualities, together, almost necessitate the exclusion of immaterial items. Of course, there is a fringe of such intangible items as good-will, franchises, and other claims to things: but these are recognized by all to be in a different class, as their transferability is more limited and their possession more precarious. Moreover, an individualist does not necessarily mean one who entirely overlooks society (in a certain sense, as an aggregate of individuals) and so the duplication involved in including claims with material things has been seen by most individualists. does not know that some economists have regarded value as an objective quality or ratio derived from a comparison of unrelated individual estimates, while others speak of "social value" and regard it as caused and determined directly by estimations of society. And, following the same bents, one group considers marginal utility as a purely individual phenomenon and demand as the sum of individual demands, while another group considers marginal utility and demand as more or less purely social phenomena. Now wealth and value are fundamental concepts, the very basis of economic science. These two points of view cannot exist with regard to the fundamentals without permeating the whole science. Accordingly, in less fundamental concepts and principles, we find differences among economists, and discrepancies in usage by the same economists, which a little analysis shows to be based upon the difference between the social and the individual points of view. Take the idea of capital, for instance. Capital being a form of wealth, the tendency to correlate material and individual on the one hand, and intangible and social on the other hand, works in a way similar to that found in the treatment of wealth, and there is a similar fringe of appropriable intangibles that are in a doubtful category. The distinction, however, has appeared most notably of late in a tendency toward regarding capital as an abstract fund of income-yielding property which may be embodied in land, machines, or other concrete goods. This, we are told, is in accordance with the usage of the business man. True. And the business man is an individual, an individual whose usage is not wont to be based upon a realization of the beauties of society. Those economists, however, who hold to the idea that capital consists of concrete |