labor; utility ranking with scarcity as a key to value; wage as a rate or as a share assigned to labor in general during a year. It is impossible to tell how much market prices are allowed to deviate from the "natural,” or whether prices cover incomes, or not.

In trying to cover all the facts, especially the variety of exceptions for every rule, Smith was enticed into admissions that made a strict logic of methods impossible. There was no doubt that a new vision had been given to the world in his "Wealth of Nations," but it might have been predicted also that a science of what is could not succeed, until the last remnants of a doctrine of Ought, which still clung to Smith, had been disowned as something incongruous and detrimental. And this was a step taken by his successors who understood him only to a certain extent.

CHAPTER FOUR

UTILITARIANISM.

I. PREMISES

Environmental Changes from 1776-1900.-Since 1776, when Smith's "Inquiry into the Nature and Causes of the Wealth of Nations" was given to an expectant world, our social environment has changed so as to make a comparison of the two eras difficult. When Smith wrote his main work agriculture was still the dominant industry of England. The soil still fed the entire population and even left a slight surplus for export. The population was less than a quarter of what it is to-day. The vestiges of the manor system had not yet disappeared from the landscape, nor from the statute books. The people were, with the exception of a few localities, scattered thinly over the land. Privilege was for the nobility, and the House of Lords kept on disputing supremacy with the Lower House. To gauge the prosperity of the country one traveled over the highways and byways in a coach, estimating crops, reporting on the improvements made on glebe or the commons. The journals of the day and the better known surveys of A. Young remind one of this rural, Merrie Old England. It was not unnatural for Smith to have thought only of wage-earner, landlord, and enterpriser as long as economic organization was simple and the status of each class definitely determined. On the continent too wealth consisted chiefly of land.

That is, there too agriculture was, barring certain restricted regions of manufacture, the mainstay of the people. Manu-facture was not yet a misnomer for the production of most commodities, for mechanical power was unknown; the hand did nearly all the fashioning, the implements were few whether one worked as a farmer or as an artisan or miner. Indeed, the conditions for a marked change were more nearly ripe in the British Isles than elsewhere, as the trend of history soon made clear. It was not difficult to arrive at a conclusion as to the circulation of goods or the price-making factors while the village was still largely self-sufficient, the organization of business simple, and the right of each claimant to the social dividend traditionally defined. If government interference had lost vogue it was largely because markets were still of a restricted area, because local self-sufficiency was a real economic factor, and because the interdependence of nations was grouped about non-essentials mainly. Necessities had not yet become a notable part of over

seas commerce.

But all this was changed during the next hundred years. By the time J. S. Mill composed his "Principles of Political Economy" the world had undergone decided changes; new characteristics had displaced those Adam Smith knew so well.

Just a few years before the publication of the "Wealth of Nations" Australia was discovered. Since then no great mass of land has been added to our map-unless we include the antarctic regions-but exploration opened up the interior of the continents whose coastal lines earlier adventurers had sketched in the rough. Enormous riches came to view in the course of this surveying and applying of modern science. All our expectations were exceeded by the developments in the Americas and in Africa. The

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yields of gold and silver that most impressed the sixteenth century ceased to figure prominently in modern accounts, in spite of their unprecedented volume and weight. Other natural resources came to mean so much more to us: Timber and iron and coal, the catch of the fishing fleets, the fertility of virgin soils extending over vast drainage basins, the commercial value of waterways, hydraulic power, and the appearance of rare minerals indispensable to modern industry and warfare. As a general result of such accessions new in kind and quantity nations swung themselves up to higher material levels of living. What was once the privilege of the few by degrees became the property of the many. Luxuries became necessities, and the annual wage that formerly would have sustained a large family now sufficed scarcely for a single laborer, however crude the services he might render.

Correspondingly, too, density of population was measured by different standards, for two square-miles now harbor as many people as five once. In England where economics first became a subject for popular study the number of inhabitants, not counting Ireland, increased from nine to thirty-five millions. In France the increase amounted at least to fifty per cent, in Germany to about one hundred and fifty per cent, and for all Europe to nearly one hundred per cent. The United States of America had a little more than three million inhabitants when the first census was taken (1790), ten times that number at the outbreak of the Civil War, and over a hundred million in 1920. Big cities have sprung up in the Old and in the New World, some of them growing from country towns to the dimensions of a metropolis. Enormous congestion at these centers, and a general gain of the urban element have contributed to the feeling that economic and legal relations must be nicely defined and

constantly supervised if peace among individuals or among nations is to be preserved.

However, science and industry did much to counterbalance the pressure of population. Discoveries and inventions have enabled us to do what was impossible to the contemporaries of Adam Smith, or on the other hand to do it in only a fraction of the time, improving on quality and serviceability besides. What seemed like a unique Industrial Revolution at the end of the eighteenth century in England has since been followed by changes just as momentous and spread over a far larger area in Europe and in the western hemisphere. The substitution of mechanical for human or animal power was the first step toward an incalculable development of natural resources. Machino-facture displaced manu-facture; the domestic system was replaced by the factory system; personal ties between employer and employee gave way to purely legal ties; division of labor to specialization and integration of processes multiplying wonderfully the productivity of men, though also cramping their faculties of mind. Large-scale production seemed to demand this sacrifice. Capital intervened between producers so as to divide them into groups with distinct, often irreconcilable, interests. Saving was still important, but ingenuity and captaincy vastly more so. Investments counted, and land no longer measured wealth. To own a surplus was everything, but how it was acquired was less than ever a question of personal diligence or mastery of a craft. The metamorphosis that was so evident to the eye called also for a metamorphosis of minds, or at least for a shifting of emphasis from the mastery of subjects to a mastery of men! He who knew how to organize material and men in their legal relations under freedom of contract did