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A CRITICAL

EXAMINATION OF

SOCIALISM

BY W. H. MALLOCK

LONDON
JOHN MURRAY, ALBEMARLE STREET, W.
1908

PRINTED BY
HAZELL, WATSON AND VINEY, LD.,
LONDON AND AYLESBURY.

PREFACE

The Civic Federation of New York, an influential body which aims, in various ways, at harmonising apparently divergent industrial interests in America, having decided on supplementing its other activities by a campaign of political and economic education, invited me, at the beginning of the year 1907, to initiate a scientific discussion of socialism in a series of lectures or speeches, to be delivered under the auspices of certain of the great Universities in the United States. This invitation I accepted, but, the project being a new one, some difficulty arose as to the manner in which it might best be carried out—whether the speeches or lectures should in each case be new, dealing with some fresh aspect of the subject, or whether they should be arranged in a single series to be repeated without substantial alteration in each of the cities visited by me. The latter plan was ultimately adopted, as tending to render the discussion of the subject more generally comprehensible to each local audience. A series of five lectures, substantially the same, was accordingly delivered by me in New York, Cambridge, Chicago, Philadelphia, and Baltimore. But whilst this plan secured continuity of treatment, it secured it at the expense of comprehensiveness. Certain important points had to be passed over. In the present volume the substance of the original lectures has been entirely rearranged and rewritten, and more than half the matter is new. Even in the present volume, however, it has been impossible to treat the subject otherwise than in a general way. At almost every point a really complete discussion would necessitate a much fuller analysis of facts than it has been practicable to give here. Arguments here necessarily confined to a few pages or to a chapter, would each, for their complete elucidation, require a separate monograph. Most readers, however, will be able to supply much of what is missing, by the light of their own common sense; and general arguments, in which, as in block plans of buildings, many details are suppressed, have for practical purposes the great advantage of being generally and easily intelligible, whereas, if stated in fuller and more complex form, they might confuse rather than enlighten a large number of readers.

The fact that the fundamental arguments of this volume were disseminated throughout the United States, not only at the meetings addressed, but also in all the leading newspapers, has had the valuable result, by means of the mass of criticisms which they elicited, of illustrating the manner in which socialists attempt to meet them; and has enabled me to revise, with a view to farther clearness, certain passages which were intentionally or unintentionally misunderstood, and also to emphasise the curious confusions of thought into which various critics have been driven in their efforts to controvert or get round them. I may specially mention a small volume by Mr. G. Wilshire of New York—a leading publisher and disseminator of socialistic literature—which was devoted to examining my own arguments seriatim. To the principal criticisms of this writer allusions will be found in the following pages. Most of my socialistic opponents (though to this rule there were amusing exceptions) wrote, according to their varying degrees of intelligence and education, with remarkable candour, and also with great courtesy. Mr. Wilshire, in particular, whilst seeking to refute my arguments as a whole, admitted the force of many of them; and did his best, in his elaborate résumé of them, to state them all fairly.

The contentions, and even the phraseology of socialists are in all countries (with the possible exception of Russia) identical. All are vitiated by the same distinctive errors, and it is indifferent whether, for purposes of detail criticism, we go to speakers and writers in this country or America. Except for the correction of a few verbal errors which have escaped my notice in the American edition, and which obscure the meaning of perhaps four or five sentences, for the introduction of a few additional notes, and for the translation of dollars and cents into pounds and shillings, the English and the American editions are the same.

W. H. M.

January, 1908.

CONTENTS

A CRITICAL EXAMINATION OF SOCIALISM

CHAPTER I

The best way in which I can make my meaning clear will be by referring to a point with regard to which the earlier socialistic thinkers may be fairly regarded as accurate and original critics. The so-called orthodox economists of the school of Mill and Ricardo accepted the capitalistic system as part of the order of nature, and their object was mainly to analyse the peculiar operations incident to it. The abler among the socialists were foremost in pointing out, on the contrary, a fact which now would not be denied by anybody: that capitalism in its present form is a comparatively modern phenomenon, owing its origin historically to the dissolution of the feudal system, and not having entered on its adolescence, or even on its independent childhood, till a time which may be roughly indicated as the middle of the eighteenth century. The immediate causes of its then accelerated development were, as the socialists insist, the rapid invention of new kinds of machinery, and more especially that of steam as a motor power, which together inaugurated a revolution in the methods of production generally. Production on a small scale gave way to production on a large. The independent weavers, for example, each with his own loom, were wholly unable to compete with the mechanisms of the new factory; their looms, by being superseded, were virtually taken away from them; and these men, formerly their own masters, working with their own implements, and living by the sale of their own individual products, were compelled to pass under the sway of a novel class, the capitalists; to work with implements owned by the capitalists, not themselves; and to live by the wages of their labour, not by their sale of the products of it.

Such, as the socialists insist, was the rise of the capitalistic system; and when once it had been adequately organised, as it first was, in England, it proceeded, they go on to observe, to spread itself with astonishing rapidity, all other methods disappearing before it, through their own comparative inefficiency. But when socialists or their opponents turn from capitalism to socialism, and speak of how socialism has risen and spread likewise, their language, as thus applied, has no meaning whatever unless it is interpreted in a totally new sense. For in the sense in which socialists speak of the rise and spread of capitalism, socialism has, up to the present time, if we except a number of small and unsuccessful experiments, never risen or spread or had any existence at all. Capitalism rose and spread as an actual working system, which multiplied and improved the material appliances of life in a manner beyond the reach of the older system displaced by it. It realised results of which previously mankind had hardly dreamed. Socialism, on the other hand, has risen and spread thus far, not as a system which is threatening to supersede capitalism by its actual success as an alternative system of production, but merely as a theory or belief that such an alternative is possible. Let us take any country or any city we please—for example, let us say Chicago, in which socialism is said to be achieving its most hopeful or most formidable triumphs—and we shall look in vain for a sign that the general productive process has been modified by socialistic principles in any particular whatsoever. Socialism has produced resolutions at endless public meetings; it has produced discontent and strikes; it has hampered production constantly. But socialism has never inaugurated an improved chemical process; it has never bridged an estuary or built an ocean liner; it has never produced or cheapened so much as a lamp or a frying-pan. It is a theory that such things could be accomplished by the practical application of its principles; but, except for the abortive experiments to which I have referred already, it is thus far a theory only, and it is as a theory only that we can examine it.

What, then, as a theory, are the distinctive features of socialism? Here is a question which, if we address it indiscriminately to all the types of people who now call themselves socialists, seems daily more impossible to answer; for every day the number of those is increasing who claim for their own opinions the title of socialistic, but whose quarrel with the existing system is very far from apparent, while less apparent still is the manner in which they propose to alter it. The persons to whom I refer consist mainly of academic students, professors, clergymen, and also of emotional ladies, who enjoy the attention of footmen in faultless liveries, and say their prayers out of prayer-books with jewelled clasps. All these persons unite in the general assertion that, whatever may be amiss with the world, the capitalistic system is responsible for it, and that somehow or other this system ought to be altered. But when we ask them to specify the details as to which alteration is necessary—what precisely are the parts of it which they wish to abolish and what, if these were abolished, they would introduce as a substitute—one of them says one thing, another of them says another, and nobody says anything on which three of them could act in concert.

Now, if socialism were confined to such persons as these, who are in America spoken of as the "parlour socialists," it would not only be impossible to tell what socialism actually was, but what it was or was not would be immaterial to any practical man. As a matter of fact, however, between socialism of this negligible kind—this sheet-lightning of sentiment reflected from a storm elsewhere—and the socialism which is really a factor to be reckoned with in the life of nations, we can start with drawing a line which, when once drawn, is unmistakable. Socialism being avowedly a theory which, in the first instance at all events, addresses itself to the many as distinct from and opposed to the few, it is only or mainly the fact of its adoption by the many which threatens to render it a practical force in politics. Its practical importance accordingly depends upon two things—firstly, on its possessing a form sufficiently definite to unite what would otherwise be a mass of heterogeneous units, by developing in all of them a common temper and purpose; and, secondly, on the number of those who can be taught to adopt and welcome it. The theory of socialism is, therefore, as a practical force, primarily that form of it which is operative among the mass of socialists; and when once we realise this, we shall have no further difficulty in discovering what the doctrines are with which, at all events, we must begin our examination. We are guided to our starting-point by the broad facts of history.

The rights of the many as opposed to the actual position of the few—a society in which all should be equal, not only in political status, but also in social circumstances; ideas such as these are as old as the days of Plato, and they have, from time to time in the ancient and the modern world, resulted in isolated and abortive attempts to realise them. In Europe such ideas were rife during the sixty or seventy years which followed the great political revolution in France. Schemes of society were formulated which were to carry this revolution further, and concentrate effort on industrial rather than political change. Pictures were presented to the imagination, and the world was invited to realise them, of societies in which all were workers on equal terms, and groups of fraternal citizens, separated no longer by the egoisms of the private home, dwelt together in palaces called "phalansteries," which appear to have been imaginary anticipations of the Waldorf-Astoria Hotel. Here lapped in luxury, they were to feast at common tables; and between meals the men were to work in the fields singing, while a lady accompanied their voices on a grand piano under a hedge. These pictures, however, agreeable as they were to the fancy, failed to produce any great effect on the multitudes; for the multitudes felt instinctively that they were too good to be true. That such was the case is admitted by socialistic historians themselves. Socialism during this period was, they say, in its "Utopian stage." It was not even sufficiently coherent to have acquired a distinctive name till the word "socialism" was coined in connection with the views of Owen, which suffered discredit from the failure of his attempts to put them into practice. Socialism in those days was a dream, but it was not science; and in a world which was rapidly coming to look upon science as supreme, nothing could convince men generally—not even the most ignorant—which had not, or was not supposed to have, the authority of science at the back of it.

Such being the situation, as the socialists accurately describe it, an eminent thinker arose who at last supplied what was wanting. He provided the unorganised aspirations, which by this time were known as socialism, with a formula which was at once definite, intelligible, and comprehensive, and had all the air of being rigidly scientific also. By this means thoughts and feelings, previously vague and fluid, like salts held in solution, were crystallised into a clear-cut theory which was absolutely the same for all; which all who accepted it could accept with the same intellectual confidence; and which thus became a moral and mental nucleus around which the efforts and hopes of a coherent party could group themselves.

Such was the feat accomplished by Karl Marx, through his celebrated treatise on Capital, which was published between fifty and sixty years ago, and which has, since then, throughout all Europe and America, been acclaimed as the Magna Charta, or the Bible, of "scientific socialism."

Whatever may be the change which, as a theory, socialism has subsequently undergone—and changes there have been which will presently occupy our attention—it is with the theory of Marx, and the temper of mind resulting from it, that socialism, regarded as a practical force, begins; and among the majority of socialists this theory is predominant still. In view, therefore, of the requirements of logic, of history, and of contemporary facts, our own examination must begin with the theory of Marx likewise.

CHAPTER II

The practical outcome of the scientific reasoning of Marx is summed up in the formula which has figured as the premise and conclusion of every congress of his followers, of every book or manifesto published by them, and of every propagandist oration uttered by them at street-corners, namely, "All wealth is produced by labour, therefore to the labourers all wealth is due"—a doctrine in itself not novel if taken as a pious generality, but presented by Marx as the outcome of an elaborate system of economics.

The efficiency of this doctrine as an instrument of agitation is obvious. It appeals at once to two universal instincts: the instinct of cupidity and the instinct of universal justice. It stimulates the labourers to demand more than they receive already, and it stimulates to demand the more on the ground that they themselves have produced it. It teaches them that the wealth of every man who is not a manual labourer is something stolen from themselves which ought to be and which can be restored to them.

Now, whatever may be the value of such teaching as a contribution to economic science, it illustrates by its success one cardinal truth, and by implication it bears witness to another. The first truth is that, no matter how desirable any object may be which is obtruded on the imagination of anybody, nobody will bestir himself in a practical way to demand it until he can be persuaded to believe that its attainment is practically possible. The other is this: that the possibilities of redistributing wealth depend on the causes by which wealth is produced. All wealth, says Marx, can practically be appropriated by the labourers. But why? Because the labourers themselves comprise in their own labour all the forces that produce it. If its production necessitated the activity of any persons other than themselves, these other persons would inevitably have some control over its distribution; since if it were distributed in a manner of which these other persons disapproved, it would be open to them to refuse to take part in its production any longer; and there would, in consequence, be no wealth, or less wealth, to distribute.

Let us, then, examine the precise sense and manner in which this theory of labour as the sole producer of wealth is elaborated and defended by Marx in his Bible of Scientific Socialism. His argument, though the expression of it is very often pedantic and encumbered with superfluous mathematical formulæ, is ingenious and interesting, and is associated with historical criticism which, in spite of its defects, is valuable. Marx was, indeed, foremost among those thinkers already referred to who first insisted on the fact that the economic conditions of to-day are mainly a novel development of others which went before them, and that, having their roots in history, they must be studied by the historical method. He recognised, however, that for practical purposes each age must concern itself with its own environment; and his logical starting-point is an analysis of wealth-production as it exists to-day. He begins by insisting on the fact that labour in the modern world is divided with such a general and such an increasing minuteness that each labour produces one kind of product only, of which he himself can consume but a small fraction, and often consumes nothing. His own product, therefore, has for him the character of wealth only because he is able to exchange it for commodities of other kinds; and the amount of wealth represented by it depends upon what the quantity of other assorted commodities, which he can get in exchange for it, is. What, then, is the common measure, in accordance with which, as a fact, one kind of commodity will exchange for any other, or any others? For his answer to this question Marx goes to the orthodox economists of his time—the recognised exponents of the system against which his own arguments were directed—and notably, among these, to Ricardo; and, adopting Ricardo's conclusions, as though they were axiomatic, he asserts that the measure of exchange between one class of commodities and another—such, for example, as cigars, printed books, and chronometers—is the amount of manual labour, estimated in terms of time, which is on an average necessary to the production of each of them. His meaning in this respect is illustrated with pictorial vividness by his teaching with regard to the form in which the measure of exchange should embody itself. This, he said, ought not to be gold or silver, but "labour-certificates," which would indicate that whoever possessed them had laboured for so many hours in producing no matter what, and which would purchase anything else, or any quantity of anything else, representing an equal expenditure of labour of any other kind.

Having thus settled, as it seemed to him beyond dispute, that manual labour, estimated in terms of time, is the sole source and measure of economic values or of wealth, Marx goes on to point out that, by the improvement of industrial methods, labour in the modern world has been growing more and more productive, so that each labour-hour results in an increased yield of commodities. Thus a man who a couple of centuries ago could have only just kept himself alive by the products of his entire labour-day, can now keep himself alive by the products of half or a quarter of it. The products of the remainder of his labour-day are what Marx called a "surplus value," meaning by this phrase all that output of wealth which is beyond what is practically necessary to keep the labourer alive. But what, he asks, becomes of this surplus? Does it go to the labourers who have produced it? No, he replies. On the contrary, as fast as it is produced, it is abstracted from the labourer in a manner, which he goes on to analyse, by the capitalist.

Marx here advances to the second stage of his argument. Capital, as he conceives of it, is the tools or instruments of production; and modern capital for him means those vast aggregates of machinery by the use of which in most industries the earlier implements have been displaced. Now, here, says Marx, the capitalist is sure to interpose with the objection that the increased output of wealth is due, not to labour, but to the machinery, and that the labourer, as such, has consequently no claim on it. But to this objection Marx is ready with the following answer—that the machinery itself is nothing but past labour in disguise. It is past labour crystallised, or embodied in an external form, and used by present labour to assist itself in its own operations. Every wheel, crank, and connecting-rod, every rivet in every boiler, owes its shape and its place to labour, and labour only. Labour, therefore—the labour of the average multitude—remains the sole agent in the production of wealth, after all.

Capital, however, as thus understood, has, he says, this peculiarity—that, being labour in an externalised and also in a permanent form, it is capable of being detached from the labourers and appropriated by other people; and the essence of modern capitalism is neither more nor less than this—the appropriation of the instruments of production by a minority who are not producers. So long as the implements of production were small and simple, and such that each could be used by one man or family, the divorce between the labourer and his implements was not easy to accomplish; but in proportion as these simple implements were developed into the aggregated mechanisms of the factory, each of which aggregates was used in common by hundreds and even by thousands of labourers, the link between the implement and the user was broken by an automatic process; for a single organised mechanism used by a thousand men could not, in the nature of things, be owned by each one of the thousand individually, and collective ownership by all of them was an idea as yet unborn. Under these circumstances, with the growth of modern machinery, the ownership of the implements of production passed, by what Marx looked upon as a kind of historical fatality, into the hands of a class whose activities were purely acquisitive, and had no true connection with the process of production at all; and this class, he said, constitutes the capitalists of the modern world.

The results of this process have, according to him, been as follows: Society has become divided into two contrasted groups—an enormous group, and a small one. The enormous group—the great body of every nation—the people—the labouring mass—the one true producing power—has been left without any implements by means of which its labour can exert itself, and these implements have been monopolised by the small group alone. The people at large, in fact, have become like the employés of a single mill-owner, who have no choice but to work within the walls of that mill or starve; and the possessing class at large has become like the owner of such a single mill, who, holding the keys of life and death in his hands, is able to impose on the mill-workers almost any terms he pleases as the price of admission to his premises and to the privilege of using his machinery; and the price which such an owner, so situated, will exact (such was the contention of Marx) inevitably must come, and historically has come, to this—namely, the entire amount of goods which the labouring class produces, except such a minimum as will just enable its members to keep themselves in working order, and to reproduce their kind. Thus all capital, as at present owned, all profits, and all interest on capital, are neither more nor less than thefts from the labouring class of commodities which are produced by the labouring class alone.

The argument of Marx is not, however, finished yet. There remains a third part of it which we still have to consider. Writing as he did, almost half a century ago, he said that the process of capitalistic appropriation had not—yet completed itself. A remnant of producers on a restricted scale survived, still forming a middle class, which was neither rich nor poor. But, he continued, in all capitalistic countries, a new movement, inevitable from the first, had set in, and its pace was daily accelerating. Just as the earlier capitalists swallowed up most of the small producers, so were the great capitalists swallowing up the smaller, and the middle class which survived was disappearing day by day. Wages, meanwhile, were regulated by an iron law. Under the system of capitalism it was an absolute impossibility that they could rise. As he put it, in language which has since become proverbial, "The rich are getting richer, the poor poorer, the middle class is being crushed out," and the time, he continued, was in sight already—it would arrive, according to him, before the end of the nineteenth century—when nothing would be left but a handful of idle and preposterous millionaires on the one hand, and a mass of miserable ragamuffins who provided all the millions on the other, having for themselves only enough food and clothing to enable them to move their muscles and protect their nakedness from the frost. Then, said Marx, when this contrast has completed itself, the situation will be no longer tolerable. "Then the knell of the capitalistic system will have sounded." The producers will assert themselves under the pressure of an irresistible impulse; they will repossess themselves of the implements of production of which they have been so long deprived. "The expropriators will in their turn be expropriated," and the labourers thenceforth owning the implements of production collectively, all the wealth of the world will forever afterwards be theirs.

This concluding portion of the gospel of Marx—its prophecies—has been in many of its details so completely falsified by events that even his most ardent disciples no longer insist on it. I have only mentioned it here because of the further light which it throws on what alone, in this discussion, concerns us—namely, the Marxian theory of labour as the sole producer of wealth, and the absolute nullity, so far as production goes, of every form of activity associated with the possession of capital, or with any class but the labouring.

This theory of production, then, which has been the foundation of socialism as a party—or, as Gronlünd, a disciple of Marx, calls it, "its idée mère"—and which is still its foundation for the great majority of socialists, we will now examine in detail, and, considering how complex are the processes of production in the modern world, ask how far it gives us, or fails to give us, even an approximately complete account of them.

We shall find that, in spite of the plausibility with which the talent of Marx invested it, this basic doctrine of so-called scientific socialism is the greatest intellectual mare's-nest of the century which has just ended; and when once we have realised with precision on what, in the modern world, the actual efficiency of the productive process depends, we shall see that the analysis of Marx bears about the same relation to the economic facts of to-day that the child's analysis of matter into the four traditional elements, or the doctrine of Thales that everything is made of water, bears to the facts of chemistry as modern science has revealed them to us.

CHAPTER III

It is, moreover, easy to point out actual cases in which all the wealth that is produced is produced by labour only. The simplest of such cases are supplied us by the lowest savages, who manage, by their utmost exertions, to provide themselves with the barest necessaries. Such cases show that labour, wherever it exists, produces at least a minimum of what men require; for if it were not so there would be no men to labour. Such cases show also another thing. The most primitive races possess rude implements of some kind, which any pair of hands can fashion, just as any pair of hands can use them. These rude implements are capital in its embryonic form; and so far as they go, they verify the Marxian theory that capital is nothing but past labour crystallised.

But we need not, in order to see labour, past and present, operating and producing in a practically unalloyed condition, go to savage or even semi-civilised countries. The same thing may be seen among groups of peasant proprietors, which still survive here and there in the remoter parts of Europe. These men and their families, by their own unaided labour, produce nearly everything which they eat and wear and use. Mill, in his treatise on Political Economy, gives us an account of this condition of things, as prevailing among the peasants in certain districts of Germany. "They labour early and late," he says, quoting from a German eulogist. "They plod on from day to day and from year to year, the most untirable of human animals." The German writer admires them as men who are their own masters. Mill holds them up as a shining and instructive example of the magic effect of ownership in intensifying human labour. In any case such men are examples of two things—of labour operating as the sole productive agency, and also of such labour self-intensified to its utmost pitch. And what does the labour of these men produce? According to the authority from which Mill quotes, it produces just enough to keep them above the level of actual want. Here, then, we have an unexceptionable example of the wealth-producing power of labour pure and simple; and if we imagine an entire nation of men who, as their own masters, worked under liked conditions, we should have an example of the same thing on a larger and more instructive scale. We should have a whole nation which produced only just enough to keep it above the level of actual bodily want.

And now let us turn from production in an imaginary nation such as this, and compare it with production at large among the civilised nations of to-day. Nobody could insist on the contrast between the efficiency of the two processes more strongly than do the socialists themselves. The aggregate wealth of the civilised nations to-day is, they say, so enormous—it consists of such a multitude of daily renewed goods and services—that luxuries undreamed of by the labourer of earlier times might easily be made as abundant for every household as water. In other words, if we take a million men, admittedly consisting of labourers pure and simple in the first place, and the same number of men exerting themselves under modern conditions in the second place, the industrial efforts of the second million are, hour for hour, infinitely more productive than the industrial efforts of the first. If, for example, we take the case of England, and compare the product produced per head of the industrial population towards the close of the seventeenth century, with the product produced less than two centuries afterwards, at the time when Marx was writing his work on Capital, the later product will, according to the estimate of statisticians, stand to the earlier in the proportion of thirty-three to seven.

Now, if we adopt the scientific theory of Marx that labour pure and simple is the sole producer of wealth, and that labour is productive in proportion to the hours devoted to it, how has it happened—this is our crucial question—that the amount of labour which produced seven at one period should produce thirty-three at another? How are we to explain the presence of the additional twenty-six?

The answer of Marx, and of those who reason like him, is that, owing to the development of knowledge, mechanical and chemical especially, and the consequent development of industrial methods and machinery, labour as a whole has itself become more productive. But to say this is merely begging the question. To what is this development of knowledge, of methods, and of machinery due? Is it due to such labour as that of the "untirable human animals," to which Mill refers as an example of labour in its intensest form? In a word, does ordinary labour, or the industrial effort of the majority, contain in itself any principle of advance at all?

We must, in order to do justice to any theory, consider not only the points on which its exponents lay the greatest stress, but also those which they recognise as implied in it, or which we may see to be implied in it ourselves. And if we consider the theory of Marx in this way, we shall see that labour, in the sense in which he understands the word, does contain principles of advance which are of two distinguishable kinds.

One of these is recognised by Marx himself. Just as, when he says that labour is the sole productive agency, he assumes the gifts of nature, which provide it with something to work upon, so, when he conceives of labour as the effort of hand and muscle, he assumes a human mind behind these by which hand and muscle are directed. Such being the case, he expressly admits also that mind is in some cases a more efficient director than in others, and is able to train the hands and muscles of the labourer, so that these acquire the quality which is commonly called skill. Ruskin, who asserted, like Marx, that labour is the sole producer, used in this respect a precisely similar argument. He defined skill as faculty which exceptional powers of mind impart to the hands of those by whom such powers are possessed, from the bricklayer who, in virtue of mere alertness and patience, can lay in an hour more bricks than his fellows, up to a Raphael, whose hands can paint a Madonna, while another man's could hardly be trusted to distemper a wall evenly.

Now, in skill, as thus defined, we have doubtless a correct explanation of how mere labour—the manual effort of the individual—may produce, in the case of some men, goods whose value is great, and goods, in the case of other men, whose value is comparatively small; and since some epochs are more fertile in developed skill than others, an equal amount of labour on the part of the same community may produce, in one century, goods of greater aggregate value than it was able to produce in the century that went before it. But these goods, whose superior value is due to exceptional skill—or, as would commonly be said, to qualities of superior craftsmanship—though they form some of the most coveted articles of the wealth of the modern world, are not typical of it; and from the point of view of the majority, they are the part of it which is least important. The goods whose value is due to exceptional craftsmanship—such as an illuminated manuscript, for example, or a vase by Benvenuto Cellini—are always few in number, and can be possessed by the few only. The distinctive feature of wealth-production in the modern world, on the contrary, is the multiplication of goods relatively to the number of the producers of them, and the consequent cheapening of each article individually. The skill of the craftsman gives an exceptional value to the particular articles on which his own hands are engaged. It does not communicate itself to the labour of the ordinary men around him. The agency which causes the increasing and sustains the increased output of necessaries, comforts, and conveniences in the progressive nations of to-day must necessarily be an agency of some kind or other which raises the productivity of industrial exertion as a whole. Those, therefore, who, in spite of the fact that the productivity of modern communities has, relatively to their numbers, undergone an increase which is general, still maintain that the sole productive agency is labour, must seek for an explanation of this increase in some other fact than skill.

And without transgressing the limits which the theory of Marx imposes on us, such a further fact is very easy to find. Adam Smith opens his Wealth of Nations with a discussion of it. The chief cause, he says, which in all progressive countries increases the productive power of the individual labourer, is not the development among a few of potentialities which are above the average, but a more effective development of potentialities common to all, in consequence of labour being divided, so that each man devotes his life to the doing of some one thing. Thus if ten ordinary men were to engage in the business of pin-making, each making every part of every pin for himself, each man would probably complete but one pin in a day. But if each man makes one part, and nothing else but that, thus repeating incessantly a single series of motions, each will acquire the knack of working with such rapidity that the ten together will make daily, not ten pins, but some thousands. Here we have labour divided by its different applications, but not requiring different degrees of capacity. We have the average labour of the average man still. And here we have a fact which, unlike the fact of skill—a thing in its nature confined to the few only—affords a real explanation, up to a certain point, of how ordinary labour as a whole, without ceasing to be ordinary labour, may rise from a lower to a higher grade of efficiency.

But such simple divisions of labour as those which are here in question fail, for a reason which will be specified in another moment, to carry us far in the history of industrial progress. They do but bring us to the starting-point of production as it exists to-day. The efficiency of productive effort has made all its most astounding advances since the precise time at which the Wealth of Nations was written; and these advances we shall find that it is quite impossible to explain merely by a further division of average and equal labour. Such a further division has no doubt been an element of the process; but it is an explanation which itself requires explaining. Even in Adam Smith's time two other factors were at work, which have ever since been growing in magnitude and importance; and the secret of modern production lies, we shall find, in these. I call them two, but fundamentally there is only one, for that which is most obvious, and of which I shall speak first, is explainable only as the direct result of the second. This, the most obvious factor, is the modern development of machinery. The other is the growing application of exceptional mental powers, not to the manual labour of the men by whom these powers are possessed, but to the process of directing and co-ordinating the divided labours of others.

Now, as to machinery, Marx and his followers, as we have seen, maintain that it represents nothing but the average labour of the past; and so long as it exists only in its smaller and simpler forms, the devising and constructing of which are not referable to any faculties which we are able to distinguish from those of the average labourer, we have further seen that the theory of Marx holds good. Labour produces alike both the finished goods and its implements. But in proportion as machines or other contrivances, such as vessels, grow in size or complexity, and embody, as they do in their more modern developments, ingenuity of the highest and knowledge of the most abstruse kinds, the situation changes; and we are able to identify certain faculties as essential to the ultimate result, which affect the work of the labourers, but which do not emanate from themselves. Any three men of average strength and intelligence might make a potter's wheel together, or build a small boat together, as they frequently do now, their several tasks being interchangeable, or assigned to each of them by easy mutual agreement. The business of directing labour has not separated itself from the actual business of labouring. Each man knows the object of what he does, and can co-ordinate that object with the object of what is done by his fellows. But when the ultimate result is something so vast and complicated that a thousand men instead of three have to co-operate in the production of it, when a million pieces of metal, some large and some minute, have to be cast, filed, turned, rolled, or bent, so that finally they may all coalesce into a single mechanical organism, no one labourer sees further than the task which he performs himself. He cannot adjust his work to that of another man, who is probably working a quarter of a mile away from him, and he has in most cases no idea whatever of how the two pieces of work are related to each other. Each labourer has simply to perform his work in accordance with directions which emanate from some mind other than his own, and the whole practical value of what the labourers do depends on the quality of the directions which are thus given to each.

In other words, in proportion as the industrial process is enhanced in productivity by the concentration on it of the higher faculties of mankind, there is an increasing fission of this process as a whole into two kinds of activity represented by two different groups. We have no longer merely—although we have this still—an increasing division of labour; but we have the labourers of all kinds and grades separating themselves into one group on the one hand, and the men who direct their labour, as a separate group, on the other hand.

The function of the directive faculties, as applied thus to the operations of modern labour, can perhaps be most easily illustrated by the case of a printed book. Let us take two editions of ten thousand copies each, similarly printed, and priced at six shillings a copy; the one being an edition of a book so dull that but twenty copies can be sold of it, the other of a book so interesting that the public buys the whole ten thousand. Now, apart from its negligible value as so many tons of waste paper, each pile of books represents economic wealth only in proportion to the quantity of it for which the vendors can find purchasers. Hence we have in the present case two piles of printed paper which, regarded as paper patterned with printer's ink, are similar, but one of which is wealth to the extent of three thousand pounds, while the other is wealth to the extent of no more than six pounds. And to what is the difference between these two values due? It obviously cannot be due to the manual labour of the compositors, for this, both in kind and quantity, is in each case the same. It is due to the special directions under which the labour of the compositors is performed. But these directions do not emanate from the men by whose hands the types are arranged in a given order.

They come from the author, who conveys them to the compositors through his manuscript; which manuscript, considered under its economic aspect, is neither more nor less than a series of minute orders, which modify from second to second every movement of the compositors' hands, and determine the subsequent results of every impress of the type on paper; one mind thus, by directing the labour of others, imparting the quality of much wealth or of little or of none, to every one of the ten thousand copies of which the edition is composed.

Similarly when a man invents, and brings into practical use, some new and successful apparatus such, let us say, as the telephone, the same situation repeats itself. The new apparatus is an addition to the world's wealth, not because so many scraps of wood, brass, nickel, vulcanite, and such and such lengths of wire are shaped, stretched, and connected with sufficient manual dexterity—for the highest dexterity is very often employed in the making of contrivances which turn out to be futile—but because each of its parts is fashioned in obedience to certain designs with which this dexterity, as such, has nothing at all to do. The apparatus is successful, and an addition to the world's wealth, because the designs of the inventor, just like the author's manuscript, constitute a multitude of injunctions proceeding from a master-mind, which is not the mind of those by whose hands they are carried into execution.