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this introduction has resulted in a series of failures. But the old Artel founded on what Dr. Apostol calls its primitive communistic basis has held its ground, especially in rural regions; in fact, Dr. Apostol considers it as an organic form of association universally connected with a certain backward stage of civilisation.

E. CASTELOT

La Participation aux Bénéfices.

Par ÉMILE WAXWEILER. (Paris : Arthur Rousseau.)

The Musée Social, thanks to the generosity of its lamented founder, the Comte de Chambrun, organized in 1895 a competition on the subject named above-profit-sharing—for prizes to the amount of £1,000. Nearly a hundred essays were sent in; four were couronnés, while that of M. Waxweiler, Lecturer at the University of Brussels, was awarded first prize. This flattering distinction was no doubt due in part to the fact that amongst all the competitors M. Waxweiler showed himself the most sympathetic in regard to the share of profits. And it was both natural and legitimate that, in a competition intended to propagate the theory of profit-sharing, the judges should be more particularly disposed to reward the essay which best fulfilled this aim. Nevertheless, apart from the interest attached to a given tendency, the verdict will be ratified by all who give a high place to accuracy of information and precision in argument. Perhaps it will be less appreciated by those who assign greater importance to the art of composition and the charm of readableness. These readers will perhaps be bored by the author's minute analysis, as, for instance, by the enumeration of the twenty-nine objections that can be raised against profit-sharing, each one coupled with its refutation. The reader is apt to lose the thread among all these distinctions.

M. Waxweiler has been careful to keep closely to the limits of his subject. In the first place, and to our thinking advisedly, he discards all that concerns métayage, that agricultural contract which, as much from its origin as by its aim, is outside the industrial contract known as profit-sharing. He discards also, and this we regret, certain very ancient forms of profit-sharing, notably those in use from time immemorial amongst the fishermen of certain maritime regions. He further discards all the modifications of wage-contract, such as sliding scales, premiums, &c., and, finally, all those additional supplementary wages which are not distributed individually to the labourers, but are set apart by the masters for the collective benefit, such as superannuation funds, the building of workmen's dwellings, technical schools, &c.

The ground thus cleared, there remains the contract for sharing properly so called, which the author thus defines : A special system of payment (of labour) in which the price of labour varies with the rate of profits. This definition adapts itself well enough to what is called “ Profit-sharing, but by no means to what is called “Co-partnership.'

As a matter of fact M. Waxweiler does not allude to this; and, I believe, the word is not to be found throughout the entire work. He makes some allusion (p. 48) to that combination by which the wageearner becomes a shareholder, and, by small degrees, a co-proprietor in the enterprise, but he does not appear to think that, for the majority of those who believe in profit-sharing, co-partnership is the topmost grade in the sharing and the end that one should always have in view. This is in M. Waxweiler's book a great omission which will above all disagreeably affect his English readers. It is true that in France we are less preoccupied with this side of the question, notwithstanding that it is precisely in our country that the most famous example is to be found—I mean the Familistère at Guise.

M. Waxweiler skilfully defends profit-sharing against the numerousobjections with which practical men and orthodox economists have overwhelmed it, and especially against the most serious attack, that on which M. Paul Leroy-Beaulieu, for example, most strongly insists, namely, that the labourer has no part in the profits because the profits are not created by the workers, but solely by the master. He replies that in all industrial enterprise it is impossible to determine who is the originator of profits, nor even whether there is a single person who can lay claim to any individual right as originator whatever. Long ago, for that matter, Stanley Jevons compared industrial enterprise to the witches' cauldron in Macbeth, in which everything was boiled hotch-potch. In fact, more often it is not the head of the enterprise, the manager, who gets the profits, but the speculator, that is to say, the share holding capitalist. Therefore, why among all the associates should the manual worker be the only one who is unable to claim any rights in the general proceeds of the enterprise ? Another objection, more serious, because it is practical and not theoretical, is that the results afforded by the sharing of profits have hitherto been singularly meagre. According to the figures cited and borrowed from Mr. Schloss's inquiry (Report on Profit-sharing, 1896), out of 83 enterprises. where profit-sharing had been adopted, the general average of the distributed portion only represented 4:4 per cent. of the wages. However, according to the Labour Gazette, the average has risen in the last few years to nearly 5 per cent. It is, therefore, less than the distributive societies can procure. Is this enough to alter the feeling of the wageearner, institute the reign of social peace in the factory, augment the productivity of labour and other benefits that optimists expect of the participation system? It is doubtful. Fortunately, it does not do, in my opinion, to attach great importance to averages. Averages are but formed by summing both the successes and the failures. When we wish to judge of the future of a new institution we should take into account only those experiments which have succeeded. Now we know of a dozen who have distributed to their workers, under the name of a share of profits, supplementary payment varying from 10 to 13 per cent. on their wages.

At the Godin Familistère it amounted to 18 per

cent.; in the Maison Leclaire to 21 per cent. These are admirable results.

In fine, the author has faith in the future of profit-sharing. And the ground for this confidence is that it appears to him to remedy in a happy manner the vices of the wage-system, and consequently to harmonise with the general tendency of industrial evolution. In effect the wage-system has this double vice. First, that of making of the worker a mere commodity, the price of which is determined solely by the law of supply and demand ; secondly, to make the worker pay too heavy a premium on security against the industrial risks that his master undertakes. Profit-sharing, in transforming the wage-contract into a quasi-contract of partnership, corrects this twin defect.

One of the most interesting and novel chapters in the book is that devoted to State intervention. The State may intervene either : a by imposing profit-sharing in certain cases, as in the contracts for public works, or in the charter of incorporation of certain societies (for example, in France a Bill which has not yet become law, imposes it upon co-operative societies in favour of their employés); or (b) by making it a rule with its own employés; or (c) simply by inserting in the general law a model form of contract for profit-sharing (like the contract of community of goods in marriage in the code Napoléon), notwithstanding for the contracting parties the liberty to disregard it if they so desire. The author does not show himself favourable to any of these forms of State intervention.

We regret that he has not treated of the question, so warmly discussed in England, of profit-sharing for the employés of distributive societies and of the Co-operative Wholesale Societies, more especially as they bring into play highly important principles for the understanding of the subject.

There will be found in an appendix the rules governing the organisation of profit-sharing in twenty or so of the most interesting establishments.

Ch. GIDE

The Shifting and Incidence of Taxation. By Professor EDWIN

R. A. SELIGMAN. Second Edition, revised and enlarged. (New York: The Macmillan Co. 1899.)

The appearance of a second edition of Professor Seligman's elaborate study of the most difficult problem in taxation, shows that there is a real revival of interest in the theoretical side of public finance, and that the minutest critical and historical inquiries will find attentive readers. As the work in its earlier form was reviewed in this JOURNAL (January, 1893), our task must now be limited to stating the changes and expansions that further reflection and the comments of other workers in the same field have produced.

First of all, the greater space allotted to the earlier writers may be noted. Instead of a single chapter, a whole Book is devoted to tracing

the doctrines of incidence in their rudimentary form, with a number of important quotations from many scarce, in some cases almost in. accessible, works. In noticing the first edition we felt bound to protest against the scanty space assigned to the Physiocrats. Professor Seligman has removed this objection by opening the second book of his historical part with a chapter of nearly twenty pages on "The Physiocratic Theory," in which he sketches the main positions of the school on the question of incidence with somewhat fuller detail than can be found in any other English work.

Again, a single chapter on “The Equal-diffusion Theory” is formed by combining the sections on the “optimistic" and “pessimistic" theories, and this is also an improvement. But we believe that further progress might have been made in this direction. By a slight alteration of title Held's agnostic theory could have been brought into the chapter just referred to. It seems, too, that writers who use the mathematical method could easily have been distributed under different categories. If Ricardo had employed mathematical symbols instead of clumsy language and arithmetical illustrations, would he have ceased to be a member of what Professor Seligman calls the "absolute" school ? Finally, as a personal matter we may demur to the inclusion of writers of financial text-books under the head of " eclectics,” even though we derive consolation from the fact that our author would appear to place himself under the same heading (p. 160).

In the second part, devoted to the exposition of “The Doctrine of Incidence," there are also important improvements. A new chapter, containing, however, some of the material formerly placed in the section dealing with " taxes on profits,” opens the part and deals with "General Principles." After the assertion that the problem of the shifting of taxation is primarily a question of prices (p. 179), and therefore a “part of the wider theory of value” (ib.), there follows an exhaustive enumeration of the circumstances that affect the incidence of a tax on commodities. In succeeding chapters the more prominent forms of taxation are considered in respect to the shiftings that they undergo and their ultimate incidence. From some of the conclusions reached we have already expressed dissent (ECONOMIC JOURNAL, vol. iii., pp. 97-8), and we may therefore select one point on which it seems that an undue extension of the modern theory of profits has been the cause of error. “Profitable production at the same cost implies,” says Professor Seligman, " in the long run a monopoly” (p. 196), and in a note he criticises the distinguished Italian writers, Pantaleoni and Graziani, for not recognising this as a necessary condition. But the reasoning in support of the position seems extraordinarily weak, coming from an economist of Professor Seligman's eminence. It is simply, “There could not then be any permanent profits to all the producers, because prices could not permanently

remain above the mere rate of production ” (p. 186). But it may be asked in reply, “Would not cost of production include profits sufficient No. 34.- VOL. IX.

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to retain producers in the business ?" By regarding profits as altogether a differential return, Professor Seligman exaggerates Walker's well-known theory, and at the same time leaves out that writer's conception of the no, or, as we should prefer to say, minimum, profits employer. That there may be a uniform cost of production at which producers receive interest on their capital, and proportional wages of superintendence (the two elements of profit on the older view), appears a perfectly possible condition of things. There is no adequate reason given why some one producer should be led by competition to lower his price with the probability of initial loss.

The theory of incidence, however, derives a good deal of its attractiveness from the difficulty and uncertainty of so many of its doctrines, and each fresh attempt at expansion is sure to present objects for criticism. One great merit of Professor Seligman's work is found in his clear presentation of accepted truths, but another is the brilliant and incisive mode in which it brings some doubtful propositions into notice.

C. F. BASTABLE

Saggi di Economia e Finanza. By A. DE VITI DE MARCO.

(“Giornale degli Economisti.” Rome. $. a.)

This volume consists of three studies, one belonging to the history of economics, the others to State finance. Following the laudable German custom the disciple of the erudite and amiable Luigi Cossa prepared a series of essays to celebrate his thirty years of devotion to economic science. Signor Viti de Marco took the theories of Serra (a topic after Cossa's own heart) as his theme. After criticising the earlier critics of his subject the writer shows that Serra is dealing with a theoretic problem, that his work is not on international trade in general, or still less on political economy, but on the special problems of international payments and the causes governing the value of money. Our author contends, however, that Serra had not reached the principle of comparative cost, and consequently the true conditions of the territorial division of industry (pp. 27-8). In like manner he failed to grasp the quantity theory of money value. His real merits consist in his clear statements respecting international payments, and his recognition of the regulation of the quantity of money in a country by definite causes. It is also in his favour that he advocated the free export of money, though he was not a free trader (p. 49). A brief notice of another writer-Biblia—who is used as a foil to raise Serra's reputation concludes the essay.

The second study deals with the oft-debated question as to the relative effects of taxation and borrowing ; but it enters into a detailed discussion of the way in which the interests of different economic classes and of successive generations are affected by the system of a public debt.

In a closing essay the position of the state domain is considered,

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