To understand [Marx's] position it is necessary to consider his law of value. He distinguishes between the 'use value' of a thing and its ' exchange value,' and exchange value, he maintained, can only be created in one way. This way is by labour. All commodities are merely 'masses of congealed labour-time,' and derive their whole exchange value from the labour bestowed on them. ' The value of every commodity is determined by the labour-time necessary to produce it in normal quantity.' 'Commodities in which equal quantities of labour are embodied, or which can be produced in the same time, have the same value.' 'All surplus value, under whatever form it crystallises itself -- interest, rent, or profit' -- is only the ' materialisation' of a certain amount of unpaid labour-time.

Two startling consequences spring from this doctrine. One is, that commerce can never produce a surplus value, or, in other words, increase wealth. It merely moves from one quarter to another a fixed amount of value, or 'congealed' labour-power. ' A. may be clever enough to get the advantage of B. or C. without their being able to retaliate . . . but the value in circulation has not increased by one iota -- it is only distributed differently between A. and B. . . . The same change would have taken place if A., without the formality of an exchange, had directly stolen from B. The sum of the values in circulation can clearly not be augmented by any change in their distribution, any more than the quantity of precious metals in a country by a Jew selling a Queen Anne's farthing for a guinea. ... If equivalents are exchanged, no surplus value results, and if non-equivalents are exchanged, still no surplus value. Circulation, or the exchange of commodities, begets no value.'

And if money devoted to commerce or the mere exchange of commodities is thus incapable of producing a surplus value, the same thing is true of the money-lender's capital, which is employed in loans. Capital is naturally barren. It has no real power of reproduction, or of creating value. Its power of acquiring wealth lies solely in its power of purchasing labour, and enabling its owner to appropriate the proceeds. Interest of money is an essentially unjust thing. The expenditure of labour-time can alone create and measure increase of value, and there is no other way of adding to the wealth of the world. Marx quotes, with complete approbation, the well-known assertion of Aristotle, that 'the usurer is most rightly hated, because money itself is the source of his gain, and is not used for the purpose for which it was invented, for it originated for the exchange of commodities, but interest makes out of money more money. . , . Interest is money of money; so that, of all modes of making a living, this is the most contrary to nature.'

In what way, then, is capital formed? The answer is, that it is simply the unpaid and confiscated labour of the labourer. The capitalist, having obtained command of the means of production and subsistence, is able to buy at the price of a bare subsistence the whole labour-time of the labourer. By right the capitalist has no claim to profit, or to anything beyond the mere sum required for keeping up his machinery. In fact he is able to exact far more. The labourer works, perhaps, for ten hours. In five hours he probably produces an equivalent to his subsistence, and he receives that amount of the produce of his labour in the shape of wages. For the other five hours he receives nothing, and the whole produce of his labour is appropriated by the capitalist. 'Wages by their very nature always imply a certain quantity of unpaid labour on the part of the labourer.' It is an illusion to suppose that the labourer is paid by the capitalist out of his capital. This would, no doubt, be the case if he were paid in advance. As a matter of fact, he is paid only at the end of his day's, or week's, or month's work, and he is paid entirely oat of his own earnings. He receives only what he has himself made, or its equivalent. Every shilling that is made by him is merely the equivalent of commodities which he has already produced; but he has produced many commodities besides, for which he obtains no return, and this constitutes the profit of the capitalist.

The doctrine that a capitalist has no right to derive from the use of his machinery may obviously be farther, and some at least of the Collectivists do not at all flinch from their conclusions. They very consistently maintain that, if a man lives in the house of another man, it is an extortion to ask him to pay a rent. All that the owner is entitled to is that his house should be kept in good repair. One distinguished economist of the party, named Briosnes, has gone a step further. He argues that the owner of the house should not only receive nothing, but should pay the lodger for keeping up his house. It may he left to the common sense of the reader to determine how many men would build houses under these conditions for the accommodation of others, and what would be the fate of the houseless poor.

Marx observes that one of the chief abuses of the feudal system was the 'corvee,' or the obligation imposed upon the tenant to labour gratuitously for a certain number of days in every year for the benefit of his landlord, or feudal chief. The same system, he maintains, exists under the capitalist system at the present day, and in a greatly aggravated form. Under the old system the poor man was obliged to give uncompensated labour for a certain number, of days in every week, or month, or year. The only difference between the ancient and the modern system is, that the unpaid labour is now exacted daily, in the shape of several hours of uncompensated work. 'The essential difference between a society based on slave labour and one based on wage labour lies only in the mode in which the surplus labour is in each case extracted from the actual producer and labourer.' Machinery has greatly aggravated the servitude. Previously the workman sold his own labour-power, which he disposed of nominally as a free agent. Now he sells wife and child. He has become a slave-dealer.' The ' brazen ' or ' iron' law of wages prevents the possibility of the workman rising above his slavery. The wealth that is produced may increase, but this will only profit the capitalist; and if for a short time wages rise, the pressure of population will become greater, and soon reduce them to their normal level of a bare subsistence. The prices of the articles of first necessity may fall, but to the labourer the only result will be a corresponding fall of wages, as the cost of his subsistence will be diminished. Under the capitalist system the labourer is unable to purchase with his earnings what he has himself produced, and with the progress of machinery, the impossibility becomes continually greater. There is but one real remedy. It is to place the land and the instruments of production in the hands of the producers. 'The expropriation of the mass of the people from the soil forms the basis of the capitalist mode of production.'

To sum up the position Marx assures us that 'capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.' It is ' the vampire which will not lose its hold on the labourer so long as there is a muscle, a nerve, a drop of blood to be exploited.' 'In proportion as capital accumulates, the lot of the labourer, be his pay high or low, must grow worse. . . . Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation at the opposite pole -- i.e. on the side of the class that produces its own product in the form of capital.' 'As in religion man is governed by the products of his own brain, so in capitalistic production he is governed by the products of his own hand.'

The doctrine of Marx is, in its essential features, the received and recognised doctrine of the great body, not only of German, but of French Socialists. It is the basis of the teaching of Mr. Hyndman and some other Socialist writers in England, and it has a considerable and probably a growing body of adherents in nearly every country. Marx is described by his followers as the new Adam Smith, another and a greater Darwin, the author of 'The Bible of Socialism.'

Burke has noticed that the weakest reasonings are sometimes the most dangerous, because they are united with the strongest passions, and I do not think that the reasonings of Marx would have received these eulogies if they had not led to conclusions appealing strongly to cupidity and to revolutionary passions. Nor are they, I think, ever likely to take deep root in English soil. That curious Teutonic power of framing a picture of the world out of formulae and abstract reasonings, to the neglect of some of the most patent facts, is not an English characteristic; and certainly no one who compared the realities of a manufacturing country with the doctrines of Marx would be likely to find much correspondence between them. It is quite true that, both in the present and in the past, large fortunes are often due to fraud and violence, and perhaps still more frequently to some happy chance; but it is also certain that the normal increase of wealth springs from quite other sources. Superior talent, superior industry, superior thrift, lie at the root of the great accumulations of every civilised age. The true source of the enormous disparities of condition lies in the great natural inequality of men, both moral and intellectual and physical, and in the desire of each man to improve his position. It is a desire which is one of the deepest and most indestructible elements of human nature, though it acts in different men with different degrees of force and of efficiency. "When a workman shows an ability, an industry, or a thrift that marks him out from his fellows; when he spends in work the time and saves the money which others spend in idleness or dissipation, there may be seen the incipient capitalist. Trace the pedigrees of the great fortunes among us, and in how many instances will it be found that we arrive in one, two, or three generations at the superior workman? It is the characteristic of modern saving that it is scarcely ever hoarded, but is at once thrown into circulation in the form of capital, and made productive of more riches; and it is in the enormous scale of this production, going on year by year over the whole surface of the community, that the growing wealth of the country mainly consists.

We have seen the picture Marx gives of the slavery of a nation which lives under the capitalist system; of the steady decrease of wellbeing and of wages that must follow; of the hopelessness of expecting that any increase of manufacturing wealth, or any cheapening of the articles of first necessity, can improve the condition of the labourer. In 1883, the year when Marx died, one of the greatest of living statisticians published his estimate of the condition of the working classes in England during the fifty preceding years. He was writing of the country and the time in which manufactures had most enormously developed, is which machinery had played the greatest part, in which the capitalist system had been most fully tried. He tells us, as the result of a careful and minute investigation of the industrial statistics of the United Kingdom, that in every class of work in which it is possible to make a comparison the wages of the labourers have in those fifty years risen at least 20 per cent., that in most cases they have risen from 50 to 100 per cent,, and in one or two instances more than 100 per cent. 'If,' as he truly says, 'in this interval the average money earnings of the working class have risen between 50 and 100 per cent., there must hare been an enormous change for the better in the means of the working man, unless by some wonderful accident it has happened that his special articles have changed in a different way from the general run of prices.'

Have they, then, done so? The answer is, that while the prices of wheat and sugar have immensely decreased; while the price of clothing, and most of the other articles of working men's consumption, have diminished in a less, but still considerable, proportion, the only articles in which the workman is specially interested which have risen are meat and house rent. And at the beginning of this period meat, which now enters largely into an English working man's diet, was almost unknown in that capacity, with the exception of bacon, which has not increased sensibly in price; while 'there is reason to believe that the increased house rent is merely the higher price for a superior article which the workman can afford.'

On the whole, Sir Robert Giffen considers it a moderate statement of an incontestable truth to say, that 'the increase of the money wages of the working man in the last fifty years corresponds to a real gain.'

And this increase of wages has coincided with a great diminution in the hours of work. Sir Robert Giffen observes that it is difficult or impossible to state with absolute precision the amount of this reduction in the United Kingdom, but he concludes from the data we possess that it is nearly 20 per cent. 'There has been at least this reduction in the textile, engineering, and house-building trades. The workman gets from 50 to 100 per cent, more money for 20 per cent. less work.'

Other and not less decisive evidence is to be found in the returns of the savings banks, which represent more faithfully than, perhaps, any other test the savings of the wage-earning class. In the fifty years of which we are speaking the depositors in the savings banks of the United Kingdom multiplied nearly tenfold, and the amount of the deposits more than fivefold, while the population had not increased more than 30 per cent. In 1881, which is the last yew on the lists of Sir Robert Giffen, the amount deposited in the savings banks amounted to the enormous sum of 80,334,000 pounds. And this increase has taken place in spite of a vast multiplication of the kind of investments in which the savings of poor men are chiefly placed. Giffen gives some statistics of the progress of industrial and provident co-operative societies in England and Wales. They extend only over the period from 1862 to 1881. In that short period the members of these societies rose from 90,000 to 525,000, and their capital from 428,0002. to 5,881,000 pounds.

The reader may refer to the valuable paper I am quoting for further evidence on this subject. He will observe the marked decline in the amount of pauperism in all parts of the United Kingdom during the last fifty years, the reduction in the rate of mortality, and the increased duration of average life. These things do not, it is true, absolutely prove a general increase in material wellbeing, but they are at least wholly inconsistent with generally increasing misery. I shall not here follow Sir Robert Giffen in his very instructive examination of the proportionate share of the different classes in the great increase in national wealth, as shown on the one hand by the Income tax returns and the Probate duties, and on the other by the changes in the rate of wages; His conclusion may be given in his own words. It is that, 'allowing for the increase of population, the growth of capital and income-tax income is really much smaller than the growth of the money income of the working classes; … that the number of owners of personal property liable to probate duty has increased in the last fifty years more than the increase of population, and that, on an average, these owners are only about 15 per cent, richer than they were, while the individual income of the working classes has increased from 50 to 100 per cent.'

All this is compatible with the fact that there is still much that is deplorable in the condition of the working classes, especially at the period when their strength has failed. It is compatible with the fact that, in the vast agglomerations of population that grow up around every great manufacture, there is always to be found a broad though it is hoped, a diminishing fringe of abject poverty, misery, and vice. Drink, and vagrancy, and idle habits, criminal or at least vicious lives, imprudent marriages, and a total absence among great multitudes of all disposition to save, account for much. But much also springs from causes that bring with them no moral blame -- from disease and the incapacity for work that follows it; from misfortunes which no human providence could have foreseen dissipating in a few weeks the savings of an industrious life; from the want of employment that too constantly follows great fluctuations in demand, great and sudden changes in the course of industry, or commerce, or population. Millions of human beings exist in the chief manufacturing countries who would never have been called into being if these manufactures had not been established, and in this vast increase of population there will always be too many sunk in misery. How strange it seems, a great writer once wrote, that the sternest sentence pronounced on the traitor of the Gospels was, that it had been better for him if he had never been born! How common, to our finite wisdom, such a lot appears to be!

But though the field which lies open for philanthropic effort and judicious legislation is very large, the plain, palpable facts of English life are abundantly sufficient to prove the gross and enormous falsehood of the estimate which Marx has given of the effects of the growth of capital and the increase of machinery on the wellbeing of the labouring poor. The evidence of all other countries agrees with that of England, though in no other are the phenomena exhibited on so gigantic a scale. M. Leroy-Beaulieu has dealt with the continental aspects of the question with a fulness and a competence that leave little to desire. He shows how, whenever one nation obtains a marked ascendency in any form of industry, whenever an extraordinary proportion of capital is attracted to its development, the invariable result will be that in this particular branch the level of the workmen's wages will be the highest. In a work published in 1881 he examines the history of working men's wages and expenditure in France during a period almost exactly coinciding with that which had been the subject of the inquiry of Sir Robert Giffen in England. France, of all continental countries, most closely rivals England in wealth, but her industrial conditions are widely different. She differs greatly in the proportion which agriculture' bears to manufacturing industry; she has not experienced, to the same degree, the revolution in the price of agricultural produce which has taken place in England, and her population increases more slowly than that of any other great continental nation. Leroy-Beaulieu computes that in forty or fifty years the cost of life in a French working man's family has probably increased from 25 to 33 per cent., but that the generality of wages in France have risen at least from 80 to 100 per cent. In Paris, where capital is most largely agglomerated, real wages rose in the. short period between 1875 and 1882 from 50 to 60 per cent. Between 1854 and 1876 the number of members of the Societes de Secours Mutuel increased from 315,000 to 901,000, and the sums invested in them rose from thirteen to seventy-six millions of francs. In 1882, the sums placed in the French savings banks are officially stated to have amounted to 1,745 millions of francs. The whole annual saving of France is estimated by the best statisticians at something between one and a half and two milliards of francs - that is, between sixty and eighty millions sterling.

Taking a wide survey of the subject, M. Leroy-Beaulieu shows by a vast accumulation of evidence that the steady tendency in the great industrial centres of Europe is not, as the Socialists aver, towards greater disparity, but towards greater equality of fortune. The number of colossal fortunes augments slowly, and they bear but an insignificant proportion to the great aggregate of wealth. The fall in the rate of interest; the effect of increased means of locomotion and of telegraphic intercourse in stimulating competition and destroying trade inequalities springing from advantages of situation or priority of knowledge; the rise of the joint-stock company system; the special severity with which periods of depression fall upon the large fortunes, all tend to diminish them, or at least to retard their progress. On the other hand, moderate and small fortunes have in the present century enormously multiplied, and in all countries Which are in the stream of industrial progress the wages of the labourer have materially risen.

To anyone who looks on the question with a mind undistorted by the sophistries of Socialism this conclusion will seem very natural. There may be much that is obscure, much that is inequitable, in the proportionate distribution of profits between the manufacturer and the labourer, but above all these controversies one great fact is sufficiently apparent: when an industry is flourishing and growing, all classes connected with it will more or less benefit by its prosperity. When an industry is failing and dwindling, all classes connected with it will suffer. It is often said, with truth, that the older political economists confined their attention too much to the accumulation of wealth, and did not sufficiently consider the manner of its distribution. But it is no paradox to say that, to the working man, the question of accumulation is really the more important. With a progressive industry and abundant employment, questions of wages and profits will easily adjust themselves. With a declining industry and a stationary or increasing population no possible change of distribution will prevent all classes from suffering.

In their whole treatment of wages, Marx and his school fall into the grossest fallacies. They announce as a great discovery, that the labourer is not paid out of capital, but out of his own earnings, because he produces the equivalent, or more than the equivalent, of his wages before he receives them. This statement is most obviously untrue in a vast proportion of industrial employments. The labourer who is employed in laying down a railway, or building a house or a ship, or constructing a machine, or preparing a field for the harvest of the ensuing year, or contributing his part in the beginning of any one of the countless enterprises which only produce profit in a more or less distant future, is certainly paid from capital, and not out of what he has himself produced. His work may or may not hereafter produce its equivalent, but it has not done so yet. If capital is not there to pay him, his labour will never be required. It is true that the work of a miner who raises daily a given amount of coal, or of the factory labourer who turns out daily a given number of manufactured commodities, rests on a somewhat different basis; but it is not less true that the mine would never have been opened, that the factory would never have been built, if capital had not been there to do it, and to provide the costly machinery on which the whole of the labour depends. Nor is this a complete statement of the case. The commodities which the workman has produced can pay no wages as long as they are unsold. It is the error of Marx and his school that they treat the question of wages as if it depended only on two parties -- the manufacturer and the labourer. A third party -- the consumer -- must come upon the scene, and wages, profits, and employment will alike fluctuate according to his demand.

Few things in modern industrial life are more wonderful than that parts of England with no great natural advantages have become the emporia from which the most distant countries are provided with articles made out of cotton grown in the far-off plantations of America and India. These hives of prosperous industry are justly regarded as among the most marvellous monuments of skilful and well-directed labour. Yet, if we look to their origin, the fructifying influence of capital is at once seen. A few men found themselves in possession of superfluous wealth. They might have spent it in gambling or dissipation. They might have simply hoarded it, doing neither good nor harm to their neighbours. They might have invested it in the funds of a foreign nation, and it would probably have been wasted in some pernicious war. Instead of this they combined together. They brought over cotton across the ocean, they laid down railways, they established factories, they founded a great industry. It would be absurd to praise them as if they had acted from philanthropic motives, and not through a regard to their own interests; but it is a simple truth that all the wealth that has been created, all the industry that is supported, all the happy families that exist in that spot, may be traced to their action as the flower to the seed. And if some vicissitude of opinion or affairs leads the capitalist to believe that his capital has become insecure; if he makes it his object to contract instead of to expand his business, and to draw his money as much as possible from it, all this industry will gradually wither, wages and profits will sink, and the number of the unemployed will increase, until population, finding no sufficient means of subsistence, has ebbed away.

Capital, indeed, which is denounced as the special enemy of the working man, is mainly that portion of wealth which is diverted from wasteful and unprofitable expenditure to those productive forms which give him permanent employment. The mediaeval fallacy that money is not a productive thing, and that interest is therefore an extortion, might have been supposed a few years ago to have been sufficiently exploded. As Bentham long since said, if a man expends a sum of money in the purchase of a bull and of a heifer, and if as the result he finds himself in a few years the possessor of a herd of cattle, it can hardly be said that his money has been 'unproductive.' If he expends it in stocking his lake with salmon or his woods with some valuable wild animal which needs no human care, this increased value may be created without the intervention of any human labour. The wine in a rich man's cellar, the trees upon his mountains, the works of art in his gallery, will often acquire a vastly enhanced value by simple efflux of time. Usually, however, capital and labour are indissolubly united in the creation of wealth, and in all the larger industries each is indispensable to the other. It may be truly said that it is not the steam-engine, but the steam, that propels the train so swiftly over the land; bat statement would be a very misleading one if it were not added that the steam would be as powerless without the engine as the engine without the steam. If a map by the possession of a sum of money is able to start a business which gives a profit of 8 or 10 per cent., and if he borrows this sum at 4 or 5 per cent., can it be denied that the transaction is a legitimate one, and beneficial to both parties? If a workman is able to produce by the aid of a machine 100, or perhaps 1,000, times as much as he could produce by his unassisted hands, is it unnatural that some part of the profit should go to the capitalist who has supplied the machine, or to the inventor who conceived it? The great evil of the capitalist system, the Socialists say, is that the workman is more and more unable to purchase by his earnings the result of his own labour. The answer is, that by his unassisted labour he could barely have produced the means of living, while by the aid of machinery his powers of production are incalculably multiplied. Commerce, according to Marx, can produce no surplus value, for the labour-time spent on what is exchanged remains unaltered. But if Newcastle coal wbich is worth 1,000 pounds at the pit's mouth is exchanged for Brazilian coffee which costs 1,000 pounds on the plantation, can it be said that the coalowner the coffee-planter have gained nothing by a transaction which gives each of them a rare and valuable commodity, instead of one which was cheap and redundant? Can any statement be more palpably untrue than that equal quantities of labour produce equal values -- the labour of Raphael, and the labour of a signboard painter; the labour which is employed in the manufacture of some rare and delicate instrument, and that which is employed in carrying bricks or sweeping roads; the labour which taxes the highest faculties of the human mind, and the labour of a plodding fool; the labour which involves grave danger to the labourer, and the labour which asks nothing but patience and brute strength?

Another great fallacy which pervades the teaching of Marx and of his school is to be found in their enormous exaggeration of the proportion of the produce of labour which, in every manufacturing industry, falls to the share of the capitalist. If their estimate was a just one, every manufacture which employs much labour would prove lucrative, and every addition of salaried labour would largely increase profit. It is one of the most patent of facts that this is not the case, and that a vast proportion of the employers of labour end in bankruptcy. If the profits of capital, as distinguished from labour, were what Socialists represent them, co-operative working-men's associations would speedily multiply, for, by placing labour and capital in the same hands, they would almost inevitably succeed. The co-operative movement has, no doubt, largely extended, and it is one of the most hopeful signs of the industrial future. But can any one who has followed its history, who has observed the great multitude of these societies that have totally failed, and has computed the gains of those which have succeeded, conclude that their success has been on such a scale as to show that those who participate in them gain far more than salaried labourers? Perhaps their greatest economical superiority is to be found in the lessened probability of wasteful strikes.

There are two elements which, in estimating the capitalist system, Marx and his followers systematically ignore. One is the many risks that attend industrial enterprise. These risks depend not merely on the misconduct or mistakes of those who conduct them, but also on causes over which they have no possible control. Famines, wars, changes of fashion and demand, new inventions, injudicious legislation, commercial crises, sudden suspensions, or displacements, or expansions of other industries, continually ruin the best conceived and best organised enterprises. If wealth and earnings are often greatly enhanced, they are perhaps quite as often fatally depreciated by surrounding circumstances, and as many fortunes are lost as gained through causes which the owner could neither influence nor foresee. Too often, also, it is the very men who have deserved best of the community who suffer. How often does an original inventor find his great idea appropriated by another who, by devising some improvement in detail, some simplification and economy of mechanism, is able to drive him ruined from the field? What can be more melancholy than the history of many industrial enterprises that have proved ultimately most successful and most beneficial to the world ? The original company foresaw the ultimate advantage; they planned and executed the enterprise, and bore the cost. But profits developed more slowly than they expected, unforeseen obstacles arose, the expenses exceeded the first estimate, and before long the company was overwhelmed and ruined. Other men, who had no part in the work, then came in. They bought up the works at a fraction of their original cost and real value, and they soon reaped a vast harvest from their purchase.

Risks of the most multifarious kinds, indeed, surround industrial enterprises, and the path of progress is abundantly strewn with wrecks. It is the habit of Marx and his followers to concentrate attention wholly on the few instances of great gain; to represent them as due to the robbery of the workman by his employer, and altogether to ignore the plain fact that great occasional gains are the inevitable accompaniment of great risks. No one would incur the one who had not at least a prospect of obtaining the other. They at the same time systematically depreciate or neglect the intellectual element in industry. They write as if all wealth were produced by mere manual labour, and as if the men who organised and directed it had no part in the matter, except that of appropriating its fruits. It would be as reasonable to refuse to Napoleon and Moltke all share in the victories of Austerlitz and Sedan, ascribing the whole merit to the privates who fought in the ranks.

In truth, the part which has been played by the great captains of industry in the wealth formation of the world can hardly be exaggerated, and, in most cases, the success or failure of an important industrial enterprise will be found to depend far more on its organisation and its administration than on any difference in the quality of its labour. The man who discovers among a thousand possible paths of industry that which is really profitable; who possesses in a high degree promptitude and tact in seizing opportunities and foreseeing change; who meets most successfully a popular taste or supplies most efficiently a widespread want; who invents a new machine, or a new medicine, or a new comfort or convenience; who discovers and opens out a new field of commerce; who enlarges the bounds of fruitful knowledge; who paints, among a thousand pictures, the one that fascinates the world; who writes, amid a thousand books, the one which finds a multitude of readers, is surely a far greater wealth-producer than the average labourer who is toiling with his hands. It is by such men that, in modern times, great fortunes are most frequently made, and the skill that determines the wise application of manual labour is as much needed as the labour itself.

The delusion that all wealth is the creation of manual labour may be supported by great names, but it is one of those which a careful analysis most conclusively disproves. The true sources of wealth are to be found in all those conditions which are essential to its production, and in the great and complex industries of modern life these conditions are often very numerous. The Duke of Argyll, in a book which is a valuable contribution to economical science, has examined this subject with much fulness, analysing in many particular instances the elements which contributed, in addition to manual labour, to the production of wealth. There is the conceiving mind that devised the enterprise. There is the capital, without which it never could have been started. There is the administrative and organising talent that renders manual labour really efficient. There is the inventive skill which is embodied in the machinery, without which the enterprise would have been impossible. There is the demand, without which it could never have been profitable; and it is no paradox to place in the same category the political, administrative, and military conditions which are essential to that security of industry, property, and credit on which all great works ultimately depend. All these elements enter into the production of wealth, and some of them ordinary extent. The Duke has hardly exaggerated when he asserts that 'the single brain of James Watt, was, and still is, the biggest wage-fund that has ever arisen in the world.'

Considerations of this kind are wholly neglected by Marx. The gross sophisms and the enormous exaggerations he has diffused would probably have had little importance if they had not been found useful to disguise the naked dishonesty of designs for the spoliation of realised and inherited property which have found supporters in many lands. …

In France, Socialism was much thrown back by the events of 1848, and in the vast mass of peasant proprietors, imbued with the strongest sense of private property, it encounters the most formidable of obstacles. …