narrowed, and liberty of thought and speech there could not be if the State were the sole owner of the printing presses.

Mill's main objection to socialism, however, is that under it there would be no asylum left for individuality of character. He fears that public opinion would be a tyrannical yoke; and doubts "whether the absolute dependence of each on all and surveillance of each by all would not grind all down into a tame uniformity of thoughts, feelings, and actions." We should thus, all, cast in monotonous moulds, become as like as sheep in a flock. The "general average" would become utterly weary, flat, and unprofitable.

Doubts have been frequently expressed whether culture would not be in danger under Socialism. Would the mass of the people in a democratic society, appreciate a thing they had not got, and did not know? Would they recognize the necessity of setting aside funds for its support and encouragement? Sidgwick says, "It is only in a society of comparatively rich and leisured persons that these capacities for culture are likely to be developed and transmitted in any high degree."

375. Socialism and the Factors of Production

In fervid attempts to correct the inequalities in distribution, we are very likely to overlook the social importance of production. Only what is produced can be distributed; consequently the larger the production, the greater the average distributive share. Therefore, before a scheme of social reform can win our approval, it must show either that it will not decrease production, or that the decrease will be more than balanced by gains in the distributive system. Production must not be overlooked.

The amount of the "social dividend" is contingent, among other things, upon the proportion maintained between the factors of production. The greatest steps in material progress have been associated with a decrease in the amount of labor used in proportion to the non-human elements in production. The economic importance of the Black Death lies in its decrease of the population; of the settlement of America, in its increase of natural resources; and of the Industrial Revolution in its increase of accumulated capital. In the "socialistic future" the state will find itself in the "stage of diminishing returns"; for the cry for socialism will remain an unheeded wail so long as "increasing returns" yield abundance. Relief from the pressure of population on resources cannot be found in the utilization of new lands, for no new continent will be left for ex-. ploitation. As a result the maintenance of a high standard of living can be achieved only, either by a strict limitation of numbers, or by

an increase in capital. It is necessary, therefore, to inquire what influence socialism is likely to have upon the increase or decrease of these factors of production.

To be quite fair, let us assume that socialism, once achieved, will realize the dreams of its advocates: that it will substantially reduce the inequalities in the ownership of wealth, and materially increase the incomes of the classes at the bottom. Granted a temporary increase, the important question is whether these incomes can remain permanent. We have no reason for thinking that socialism will make us creatures of different passions, and that in this ideal state maids will cease to look fair to youths. The larger income will make marriage possible to many who cannot now "afford it." For others marriage will be possible at earlier ages. The result will be an increase in the birth rate. Likewise the larger incomes and the temporarily better way of living should mean for a time a decrease in the rate of infant mortality. Both causes would tend to increase the number of laborers in the next generation, to lower the margin of industry, and to establish lower rates of wages, and lower standards of living. There is no reason why this tendency should not be continued until wages and standards were as low as-or lower than-under the older system. The conditions of the "workers" would, therefore, be improved only during the transition period during which the "surplus" wealth of the "classes" was being transferred. In the end the lower classes would be no better off. The only appreciable gain would be in a larger number of souls to be saved.

But what about the increase of capital? Under our present system thrift is voluntary, not compulsory. Society relies for its capital upon the temptation to accumulation offered by private property and by inheritance and the opportunity for saving residing in the unequal distribution of income which showers upon the privileged few more than they can spend and forces large aggregates of wealth to be reinvested in the productive process. A stratifying society presents ideal conditions for the accumulation of capital. Democratic equality and rigid class distinction are alike inimical to the rapid piling up of productive wealth. However, if individual thrift proves inefficient, the socialist state is in position to substitute compulsory thrift. Let us see what use a socialistic society can make of each of these methods.

Voluntary thrift would not suffice. If no interest were offered on savings, and moral encouragement alone was used, the tangible wealth accumulated would be negligible. If interest were offered,

either by a payment on bank deposits or by the sale of interestbearing bonds, some capital would be formed. But if inheritance were not allowed, the disposition to spend would increase with advancing years, and a rather high rate of interest would be necessary fo secure adequate results. If inheritance were allowed, the system would be very similar to our own. In fact these methods involve making use of the individualistic incentives to thrift. But, without raising this question, the chief incentives to individual accumulation would be absent. The large fortunes, which are the basis of so much current accumulation, would be no longer present. Again, the emphasis which a socialistic state would place upon life in the present, together with the greater equality in station and possessions, would cause expenditure closely to approach income.

Yet, even if individual thrift were inadequate, it must be admitted that the state could compel accumulation. Under a money economy, it could accomplish this, either by placing a tax upon the income of its citizens with the object of paying for the production of capital goods, or by raising the prices of consumptive goods and using the surplus in the same way. Without a money economy, the same object could be effected by a simple distribution of men between occupations turning out "present" and "future" goods. An analogy is found in the distribution of work in military societies, where a part of the labor force is sent out to fight and a part is kept at home to supply the fighters with munitions and provisions. But could the state enforce accumulation? Suffrage would be democratic. Democracy is a short-sighted and wasteful institution that is too much of a luxury for any country save one with large and virgin resources. Under our system little attention is given to the necessity of conserving the supply of capital. Recall, if you can, a consideration of this question in a political speech. Socialists show little appreciation of the rôle of capital in production. They fail to appreciate the importance of keeping up its supply. It seems extremely doubtful whether a party committed to an increase of capital, attended as such an increase necessarily is by a sacrifice in immediate consumption, could survive in a socialistic state. The opposing party, promising immediate prosperity and higher incomes-of course at the expense of the future-would be almost certain to enjoy popular support. Socialism, therefore, still further threatens to lower the margin of industry, wages, and the standard of living, by failure to induce a sufficient supply of capital.

It must not be denied that these difficulties are not insuperable. The lower classes may, in course of time, learn to control their numbers. The electorate may learn that individual and immediate

gain must often be sacrificed if more ultimate social good is to be achieved. It may even learn the importance of keeping up the supply of capital. But as yet these lessons have not been learned. And when society attains this measure of wisdom, the problem of the "classes at the bottom" will have lost much of its importance. The severity of their distress will have disappeared. The magic of socialism will be no longer necessary. In short, socialism is too individualistic and too short-sighted to meet our needs.

H. SOCIAL PANACEAS

376. Stable Money and the Future32

BY GEORGE H. SHIBLEY

With a return to the more stable bimetallic standard of prices and with the principle established that "stability in the measure of prices (exchange value) is the desideratum," the people of the United States will insist that the measure be kept practically unfluctuating through the government controlling the volume of paper money. THIS WILL MAKE STABLE THE MEASURE OF PRICES THROUGHOUT THE SPECIE-USING COUNTRIES. ́ ́ In a short time, then, the principle will become deeply rooted in the ethics of all the advanced peoples that stability in the measure of prices is just right. Then shall we have such co-operation among nations as will keep specie in the money of the several countries, and by so doing keep an equilibrium in the export and import prices of these countries through using the specie in paying balances in trade.

With a stable measure of prices there will be added "a wholly new degree of stability to social relations." This is equivalent to saying that with general prices stable there will be steady employment and the consequent good times and the dropping away of nearly all the tariff wars. THEN WILL THE DISARMING OF EUROPE SPEEDILY

COME ABOUT AND THE ARBITRATION OF ALL FUTURE DIFFERENCES BE AGREED UPON BY THE LEADING NATIONS. AND WHEN THIS OCCURS THE LESSER NATIONS WILL BE COMPELLED TO SUBMIT THEIR DISPUTES TO ARBITRATION.

This is not visionary. It is the direction toward which past events point. Are we to progress? Reader, you are one of the íactors. Is it in you to help along the car of progress?

Adapted from "The 50 Per Cent Fall in General Prices, the Evil Effects, the Remedy," "Bimetallism at 16 to 1, and Governmental Control of Paper Money, in Order to Secure a Stable Measure of Prices," in Stable Money: Monetary History, 1850–1896, 722-723. Copyright by the Stable Money Publishing Co. (1896).

377. The Way Out3

BY JOHN RAYMOND CUMMINGS

In the following pages I undertake to prove these propositions: That there is a natural money.

That its adoption will make panics impossible.

That after a term of years natural money will bring our banking system to such condition that every bank will be able to pay all its obligations instantly. Banks will then be the accountants, custodians, and clearing-houses for all the people.

That in the course of time (probably within fifty years) natural money will put all business on a cash basis.

That in a like period the interest rate for property loans will fall to I or 2 per cent, and probably will disappear from money loans. Natural money will enable the government to take over all the land and all the privately owned public utilities on terms very liberal to present owners, without issuing a bond and without hardship and injustice.

It will enable the government to build during the same period a million miles of highway at a cost of $10,000 the mile.

To irrigate and drain a large proportion of the area needing irrigation and drainage.

To develop tens of millions of horse power from water and distribute it throughout the country.

To develop internal waterways on a scale hitherto unattempted and undreamed of.

It will raise wages and end strikes and lockouts.

It will establish natural wages and secure equity as between employers and employees.

It will pay off the government debt and make future debt impossible.

It will end our present industrial warfare and bring now discordant classes into harmonious co-operation, inaugurating an era of progress and prosperity such as the world has not even conceived of.

378. Universal Federation3*

BY KING C. GILLETTE

"World Corporation" will result in a new civilization, new in every part of its structure of mind and matter. The whole aspect

Adapted from Natural Money: The Peaceful Solution, 5-6. Copyright by the Bankers Publishing Co. (1912). See also the author's Social Autonomy: The New Economic Dispensation.

"Adapted from World Corporation, 216–219. Copyright by the author (1910).