it might therefore have appeared appropriate to discuss the laws of the distribution of wealth among certain classes and persons, previous to explaining that which is comprehended under the term "exchange of wealth." The opposite course has however been here adopted because until the meanings of the words "value" and "price" are properly understood, and until the causes which regulate the value of commodities are thoroughly grasped, it will be difficult to present in a short space a clear view of the circumstances which determine the distribution of wealth into rent, wages, and profits. It is therefore proposed in this section to explain the meaning of the terms value, price, and cost of production, and to state the causes which determine the value of three classes of commodities, viz. those whose number is absolutely limited; those which cannot be increased without increasing the cost of producing them; and those which can be increased without becoming more expensive. The nature and functions of money will also be explained.

Before closing these preliminary remarks it is perhaps desirable to revert to the subject of socialism alluded to on the previous page. The fundamental idea of socialism is that individual property ought not to exist; that all ought to labour to the extent of their capabilities, and to receive in proportion to their needs, not in proportion to work done.

The economic defects of Socialism. There are many economic objections to be urged against socialistic schemes. In the first place self-interest, one of the most powerful of all the incentives to exertion, is only partially operative; a man will not work with the same energy and zeal if the results of his labour are to be shared by the whole community of which he is a member, as he will if he is able to secure the whole fruit of his toil for himself and his family. In the second place the existing checks to im

providence and recklessness, with regard to the future, are withdrawn. All the members of a socialistic society are supposed to be actuated by the loftiest sense of duty to their fellow-labourers. In the present order of things a poor man has to work hard to keep himself and his family, if he has one, from want; he knows that every additional child that he has will for some years be a constant source of expense; he therefore has the most powerful incentives to exertion and providence. But in a socialistic society such a man would know, whether he worked energetically and unceasingly or slowly and irregularly, that he and his family, however numerous it was, would be maintained; he would also know that it was quite unnecessary to make any provision in case of his own death, for his family would never be allowed to want. Ebenezer Elliott, the Corn Law Rhymer, satirised the defects of communism in the following verse:

"What is a Communist? One who hath yearnings
For equal division of unequal earnings;

Idler or bungler, or both, he is willing

To fork out his penny and pocket your shilling."

A recognition of the tendency of socialism to weaken the prudential restraints on population has led to the adoption in all the American communistic societies of the most absolute control over marriage and the number of births. Two of the most prosperous of the American communities are strictly celibate; in others celibacy is honoured and encouraged and even in those societies where the opposite principle prevails the governing body limits or promotes the natural growth of population as the prosperity of the community declines or increases, with as much ease as an English Chancellor of the Exchequer increases or reduces the income tax. It would therefore seem that in avoiding the economic defect of weakening the pru

dential restraints on population, practical communism runs into the equally serious political defect of destroying individual liberty, and encouraging an amount and kind of government control which a free people would find quite intolerable.

Notwithstanding these radical defects in socialism the upholders of the present state of things ought not to condemn it as a monstrous and wicked absurdity. The present system does not work so well as to be absolutely incapable of improvement; and though it may not be thought desirable that an alteration of existing economic arrangements should be made in the direction of socialism, we ought to be ready to admit that some improvement is necessary in a community in which one out of every five-and-twenty is a pauper. It ought also to be remembered that some of the characteristic defects of communism are embodied in the existing state of society. The Poor Law system is practically socialistic. The system of paying workmen fixed weekly wages stimulates the motive of self-interest even less than it is stimulated in a communistic society. It is often remarked that workmen paid in this way only seem to care how little work they can do, and at the same time avoid dismissal. The remuneration of many of the servants of the state does not depend upon work done. Clergymen and even ministers of state receive the same pecuniary rewards, whether they do their work ill or well, and in some cases if they leave it undone altogether. These remarks are not made in order to uphold socialism, but to show that the proposals of the socialists should not be looked upon with hatred and derision, but should receive respectful consideration from all who desire freedom of discussion and action. If the defects of the existing system were borne in mind, and if it were also remembered that the apostles were the founders of socialism, it may reasonably be sup

posed that the denunciation of socialistic doctrines would be less passionate and declamatory.

Space does not permit a description of the various modifications of socialistic doctrines which have been propounded in France by Fourier and St Simon, and in England by Robert Owen. For a detailed and most interesting account of these schemes, and of the manner in which modifications of them have been carried into practice in the American Communistic Societies, the reader is recommended to turn to M. Reybaud's Les Réformateurs Modernes, to Mr A. J. Booth's works on Saint-Simon and Robert Owen, and to Mr Nordhoff's Communistic Societies of the United States. There is also a short and

interesting sketch of the leading socialistic schemes of the present century in Mr J. S. Mill's Principles of Political Economy (pp. 245-263, vol. 1). It is important to remember that socialism, or, as it is sometimes called, communism, has no connection with the principles of the commune of Paris. The name that was given to the section of the French people who, in the year 1871, resisted the authority of the Versailles Government, was derived from the demand they made for the communal, i.e. municipal independence of Paris. None of the leaders of that party upheld socialistic principles.

QUESTIONS ON THE INTRODUCTORY REMARKS OF
SECTION II. On the Exchange of Wealth.

1. What is Socialism?

2. What economic disadvantages are connected with Socialism?

3. Name some of the principal promoters of socialistic theories.

I. Do you think Socialism would interfere with the present division of labour? If every one received the same reward, who would do the disagreeable work?

2. If Socialism caused diminished production and a multiplication of the consumers of wealth, would it ultimately benefit even the very poorest?

CHAPTER I. Value and Price.

A thorough comprehension of the terms "value" and "price," their difference and their relation to each other, is essential to a firm grasp of nearly all economic truths.

Definition of Value. The value of any commodity is estimated by comparing it with other commodities, or by ascertaining the quantity of other commodities for which it will exchange. Thus if a pound of tea will exchange for four pounds of beef, it may be said that the value of a pound of tea is four pounds of beef. It is therefore evident that the term "value" implies a comparison; for when it is said that the value of a pound of tea is four pounds of beef a comparison is made between beef and tea.

As value implies a comparison, it is also evident that the value of a commodity varies from either of two causes -from something having its source in the particular commodity, or from something having its source in the commodities for which it is exchanged; or, as it has elsewhere been expressed, the value of a commodity varies from either intrinsic or extrinsic causes. For instance, tea may increase in value through a diminution in the supply; this would be a variation produced by an intrinsic cause. Or it may increase in value owing to a decrease in the value of some commodity for which it is exchanged, such as cloth; this would be a variation produced by an extrinsic cause. From this conception of value as a relation existing among commodities in general, it necessarily