essence of Socialism is the doctrine of the labourer's right to the full produce of his labour: "das Recht auf den vollen Arbeitsertrag." This is its distinctive tenet, marking it off from mere tentatives at Reform. It is to the industrial Revolution of this century, what the idea of absolute equality was to the political Revolution of the last: and it is equally unethical. It involves the doctrine that the worker should receive, from the general produce, the worth of so much as he has contributed by his labour, no share at all of it being given to the possessors of the instruments of industry, whom it would dispossess in favour of the community. Now I fully believe that, speaking generally, the possessors of the instruments of industry take an inequitably large share of the produce. But I am quite sure that they are entitled to some share. The receipt of rent for land, or of interest on capital by individual owners, is not wrong in itself. Labour is, no doubt, the prime source of wealth: but property is accumulated labour. Wages may be taken as the reward of present labour. Interest, profit, rent as the reward of past labour, stored up as capital. Every proprietor who, by machinery or otherwise, renders labour more productive, is entitled to a share of the produce. The question is, What share? What is the just rule of division?

It is a question not to be answered offhand. The master principle of Right is human personality. The ethical idea of man, the spiritual being of

VII.]

THE PROBLEM OF DIVISION.

229

man, furnish its elements. The problem is to apply that principle, which is universal, those elements, which are constant, in particular instances, varying according to physical environment, climate, race, the state of art and of the experimental sciences; in a word, according to the conditions of material civilization. The spheres of human activity are indefinitely various. The empirical matter, so to speak, with which Right deals, is ever changing. The ideal ground of Right is the self-same it does not change. But the question how justly to divide what is produced, though difficult, is not insoluble. And its solution belongs to the province of Political Economy, as properly understood. I notice, with pleasure, that Professor Marshall does not shrink from it. He admits, if I understand him rightly, that the old formula of Supply and Demand is not a sufficient rule for the division of produce: that there is such a thing as a justum pretium-say, for example-of agricultural labour: or, to use his own expression, a "necessary level," below which wages ought not to fall. He appears to hold that the remuneration of the cheapest kind of labour known in this country ought to amount to twenty or twenty-three shillings a week. And he considers the necessaries for the efficiency of an ordinary labourer and his family to consist of "a well-drained dwelling, with several rooms, warm clothing with some changes of underclothing, pure water, a plentiful supply of cereal food, with

C

a moderate allowance of meat and milk, and a little tea, &c., some education and some recreation, and lastly, sufficient freedom for his wife, from other work, to enable her to perform properly her maternal and her household duties."* Such is Professor Marshall's conception of what he calls "the necessaries of efficiency" of the lowest agricultural labourer - a conception not, of course, capable of being at once translated into fact by legislation or otherwise, but to be kept in view and to be strenuously pursued. I may, perhaps, be permitted to express my satisfaction that man counts for much more in his claborate volume than in the writings of the older economists. On the other hand, unless I gravely misunderstand him, which I have taken pains not to do, his criterion of right and wrong is the purely utilitarian one, whether the sum total of human happiness is increased or diminished. That, assuredly, is not a moral criterion at all, although it may, in many cases, indicate the same results as true ethical science. My present contention, however, is that only by realizing and fulfilling their obligations as moral beings, can capitalists and labourers work together for good to themselves and to the State.

For the State-let us not lose sight of this-is vitally interested in the well ordering of economical

* Principles of Economics, Book II. chap. iv. § 2.

VII.]

THE FUNCTION OF THE STATE.

It

231

relations. Truism as it sounds, we are likely to
lose sight of it in an age of rampant individualism,
when the very idea of the social organism has
grown dim in the minds of men. The capitalist,
who puts his trust in the notion of absolute indi-
vidual right, and the socialist seeking to reduce
human society to a machine, are equally destitute
of any true conception of human solidarity.
has never crossed their minds that the State is an
ethical organism, bound to maintain the conditions
without which a free exercise of the human faculties
is impossible. The universal and unrestrained
operation of the law of Supply and Demand is
fatal to those conditions, and issues in the distin-
tegration of society and in the consequent ruin of
each and all. There are, then, cases in which it is
the right and the duty of the State to restrict, or
wholly to set aside, the law of Supply and Demand.
My object in this work is to lay down principles
rather than to apply them. But it may serve to
illustrate my argument if I indicate a few such

cases.

First, as to industrial contracts. There can be no doubt that the law of Supply and Demand may safely be left to operate, and therefore should be so left, when agreements, not in themselves opposed to the general welfare, are really free: that is where the bargainers, meeting upon a footing of economic equality, are competent, no paramount and overmastering distress fettering volition and

choice, on either side. Not so where such competence is wanting, or where moral relations, extrinsic to the bargain, are bound up with it.* Then the State may reasonably interfere, and ought to interfere, for the protection of those who are unable to protect themselves-"Parliament," the younger Pitt finely said, "is omnipotent to protect"-and for the maintenance of its ethical end. And a long series of Truck Acts, Mines Acts, Factory and Workshop Acts, Merchant Shipping Acts, and the like statutes, passed in the teeth of the most determined opposition from the selfishness of capitalists and the superstition of Smithian economists, affords satisfactory evidence that this duty has been increasingly recognized in our country. Nor can it be doubted that the principles thus implicitly rather than explicitly recognized will receive more abundant development.

Secondly, it is unquestionably the duty of the State to put an end to that application of the law of Supply and Demand, which, arising in the internecine warfare of "strikes" and "lock-outs," is becoming a grave peril to national well-being.

*Professor Green well remarks: "We must cease to insist on maintaining the form of free contract where the reality is impossible. . . . . To uphold the sanctity of contract is doubtless a prime business of Government. But it is no less its business to provide against contracts being made, which, from the helplessness of one of the parties to them, instead of being a security for freedom become an instrument of disguised oppression." -Works, vol. iii. p. 382.