cent. better than the results of tilling in Belgium. It does not lie in any disparity in the hours of daily labour. When a million of our own people produced in a year half what they produce in the same time now, their daily hours were more numerous and their holidays wree fewer. The hours of the manufacturing classes in Switzerland are 26 per cent, more than those of the same classes among ourselves; yet the Swiss product, in proportion to the numbers of men employed, is 28 per cent. less. The cause of the increase of our prosperity is not to be found among the conditions of which, when pressed for explanations, or deeming them necessary, the popular-opinion-mongers in behalf of Socialism make much with assured facility. It lies in something of which they take no heed. Anxious that the end of the century should see the institution of a polity under which the State should be our sole employer, and each of us should be paid out of the nationalised value of our joint production, they assume that the increase in our prosperity would continue; yet they do not know the cause of prosperity, and have no thought as to whether the cause would survive the changed conditions.

When we have realised what the cause of prosperity is, we shall become certain that it will not survive. In order to justify this statement, it is necessary to examine closely the shares in the creation of wealth which are attributable, respectively, to the constituents of production. In the case of Labour and Land, it is comparatively easy to determine the shares in the creation of wealth which are attributable to each. The task is more difficult in the matter of Labour and Capital employed in great manufacturing industries; but abundant statistics are forthcoming, and the difficulty is by no means insuperable. The first step towards this discovery is to realise that industrial capital is in two portions. Part of it is in the form of machinery, which Mr. Mallock calls by the accepted term fixed capital'; part of it is the wages fund, which he calls wages capital.' Fixed capital has contributed to the prosperity of the great industries in shares which are easily ascertainable. Between 1795 and 1800 the cotton produced in the United Kingdom was to the value, on the average, of 37,000,000l. a year; ten years before the yearly output was worth 10,000,000l.; ten years still earlier it was worth 4,000,000l.; during the fifty years which preceded it was worth only 2,500,000l. The extraordinary increase was due to the invention of machines which superseded the one-thread wheel, and to the successive applications of horse-power, water-power, and steam-power. Arkwright's machinery, for example, produced 14 lbs. of cotton for every 1 lb. that had been produced

before.

before. The progress of the iron industry tells a similar tale. Between 1740 and 1780 the produce of each smelting furnace was, on the average, 294 tons a year. In 1788 the produce increased to 595 tons. That was due to the invention of the blast furnace.

are

The importance of circulating capital is equally great. If it were confiscated or otherwise abolished, we could not bridge the Forth, nor enter upon any enterprise the profits of which did not begin with the first day's labour. We could have no great public or private works such as the unemployed now agitating for. We should be unable to pay the workmen from day to day. Circulating capital has a still more useful function. It enables men of exceptional knowledge and ingenuity to devote their brains and their time to the work of improving the methods of industry, and to that of designing and initiating new industries. It is the means by which exceptional intellect is lent to labour. This is illustrated by the rise and progress of every public company which succeeds. In all its distinctively modern applications, capital, as Mr. Mallock says, 'is the exceptional capacities of one set of men applied to the average capacities of another set'; and capital is to be credited with the amount of the increase, or (to put the same thing in another way) with the amount of the decrease which would result if its application were withdrawn.'

By way of discounting the deductions to which those explanations are leading, Socialists often contend that the work of the exceptional set of men is, like that of the average set, labour; and that we ought to apply the name of labour' to work of all kinds. In saying so, the Socialists and the economists ignore the most conspicuous of the phenomena which distinguish one man from another. A work by Turner and an oleograph are both products of labour; but to place them in the same category would not be scientific. Mr. Mallock's illustration should be persuasive with that influential body of reformers who affirm that all artists are Socialists. Let us,' he says, 'take the finest bronze statue that was ever made, and also the worst, the feeblest, the most ridiculous. Both can with equal accuracy be called congealed labour; but to call them this is just as useless a truism as to call them congealed bronze.' The obvious truth is that human exertion, like capital, is of two kinds. There is the exertion of special powers of mental and moral energy, and there is the exertion of normal skill and muscular force. We confuse the problem of economics if we do not note the difference and make a distinction. The one exertion may be truthfully spoken about as that

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of Ability; the other may with equal truth be termed 'Labour.' The distinction is not only in the nature of things. It is commanded by experience. The Labour of a man affects his own task only; the Ability of another man affects the tasks of thousands. That generalisation is so obviously true that it scarcely needs the support of instances beyond the noteworthy ones which we have just cited; but we may mention another. By the discovery of Bakewell, a leisurely agriculturist,' the breed of animals in England,' Mr. Lecky says, was probably more improved in the course of a single fifty years than in all the recorded centuries that preceded it.' Mr. Thorold Rogers pointed the moral of that episode by remarking that the ability and the capital of the class to which Bakewell belonged were 'the pioneers of agricultural progress.' The story of the nation as regards its progress in manufacturing industries is entirely composed of analogous episodes. If there had been no differences in the nature of men and in the characters of their exertions, there would have been practically no progress to recount. If our fathers and forefathers had all been manual labourers merely, we should now have had none of the abounding national prosperity which gives the Socialists the reason for their political being. Ultimately, therefore, the grievance of the Socialists is not, as they suppose, against man's inhumanity to man it is against the bounty of the Providence which, for the welfare of the race, made some men superior to the average.

The measure of the superiority is, as we said, ascertainable. At the end of the last century the annual income of Great Britain, the population of which was 10,000,000, was 140,000,000. To-day, when the population is 38,000,000, the income of the country is 1300,000,000l. At the one period there was 147. a head of income; now there is 351. For the sake of generosity in contention, we will, temporarily ignoring Arkwright and all other inventors of the centuries preceding this, allow that the whole of the 147. a head is to be credited to Labour alone. On the assumption, then, that Capital and Ability did not count for anything until 1800, we have to find what is to be attributed to them since then. The calculation is simple. Balancing the increase of population against the increase of wealth, we find that of every 350,000,000l. of the national income at present Labour produces 140,000,0007., and that Capital and Ability produce 210,000,000l. Of the whole 1300,000,0007., Labour is to be credited with 500,000,0007.; Capital and Ability account for 800,000,000l. In short, withdrawing our argumentative concession, and giving to Capital and Labour precedent to 1800 what could be statistically

shown

shown to be their due, we find that one-third of the national income is due to the labouring classes, and that two-thirds are due to the class which works with Ability and Capital.

It becomes plain, then, that Ability is chief of the constituents in the production of wealth. We speak of Ability, instead of naming Ability and Capital together, because, as has been becoming evident, Capital is the creation of Ability. Labour, the equal effort of the average man, produces, as the histories of all communities, savage and civilised, show, no more than is needed for the subsistence of the labourer and his immediate dependents. If, therefore, there had been no men whose capacities were above those of the average man, we should have had no capital. All the products of industry would have been consumed immediately after their realisation. Now, the Socialist State, which is the anxious desire of our reformers, and the vague anticipation of many thousands among us who fancy that Socialism is bound to triumph because so many earnest Liberals hear of it without disapproval, would introduce a new influence into civilisation. It would make all men socially equal. It would give to all men incomes of the same amount. This may seem an ex cathedrá utterance on our part. One sect of Socialists may say that the motto of Socialism is 'To each man according to his deserts'; another, that it is 'To each man according to his needs'; another, that it is 'To each man according to his strength and luck in the general scramble.' It is not for us to say which of the sects contains the true prophet of Social Reform; but we must take the liberty of pointing out that, unless the Socialist State is to be as we say, it is not to be at all. If Socialism means a desire that all men should be requited according to their deserts, it does not imply a necessity for any reform. Misfortune and good-luck apart, the majority of us are already treated according to our deserts. Although belief in State control is wide-spread, we can scarcely imagine that there is any one whose belief is strong enough to give him hope that the State could abolish the good fortunes and the adversities of chance. If the true prophets are they who say that the Socialist State is to give to each man according to his needs, the great bulk of the labouring classes may be trusted to oppose its establishment. The State, as we have shown, could not supply the needs of the very poor without diminishing the income of the average working-man, and there is not a Liberal Three Hundred in the country which would not denounce that prospect as one of insufferable injustice. If, again, the true inwardness' of Socialism is a desire for a general scramble in which the Devil

shall

shall be welcome to the hindmost, the reform, when the definition of it gets into the heads of the people, will be contemptuously dismissed as the task of the Anarchists alone. In short, the only reform of which the sense of the country allows the most shadowy possibility is, as we have said, the establishment of a polity under which, the means of production having been nationalised, all men shall be equal in the obligation of work, and equal in the requital of pay. It is impossible to conceive any other polity against which there would not instantly appear objections which would commend themselves to the mass of the very people who are not unwilling to think of a reform of some kind. There is no other polity by which the doctrine that all men are born free and equal could be translated into the actualities of life.

That, then, is the hypothetical prospect. We have shown that under the Socialist State there would be no increment of happiness in relation to our daily work. The State as taskmaster would be as exacting as any private employer, and, from the nature of things, incapacitated from exercising the humanity which many employers indulge. We have now to contemplate the hypothetical prospect of a much graver trouble. Progress in comfort would cease whenever the dream of the Social Reformer was translated into fact. The function of Ability, which, as we have seen, is the main constituent in the production of wealth, which is the means of comfort, would be paralysed. Men exert themselves only when they have a reasonable assurance of being rewarded according to the measure of the talents which they use. We are speaking of what may be called the talents of mechanic contrivance. In a domain still higher than that of the Ability which has been spoken of in this writing, men work without thought of reward. Poets do, it is said; and, as poesy seems to suffer no solution of continuity in the mutations of either science or society, we grant that the Socialist State would not be lacking in bards. That, however, is a casual consideration. A wealth of song, great beyond the dreams of all the prospective Laureates, would not atone for lack of the wealth which is material. We could not live on it. It would not appease the hunger of our crying children, nor lengthen the days of our parents too old to work. Our destitution would be very real. Heretical in many respects, the Social Reformer is a model of orthodoxy in his devotion to the command that his species shall be multiplied and the earth replenished; and it is not for a moment to be supposed that the Socialist State would deprive him of the liberties of that faith. The population would go on increasing; but what of the means

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