durability, and we can base upon it no such valuable philosophical classification as can be based upon the distinction between essentially and accidentally consumed capital. And here I may point out that this very distinction is the one which underlies the division of capital into tools and materials. Tools are exactly what I have defined as fixed or accidentally consumed capital. Materials are our circulating or essentially consumed capital. This discovery of identity, and the conception upon which the classes have hitherto been instinctively based, are of immense importance in the study of Plutology.

And now, in conclusion, we may here review, and, with the aid of our new light, with advantage scrutinise, Mill's four theorems concerning capital.

The first is that industry is limited by capital. Now if this means that the creation of new wealth is limited by the quantity of the materials which enter into its constitution, the so-called theorem is merely a truism. But if it means that it is limited by the quantity of capital other than human (which it evidently must do consistently with Mill's doctrines) it amounts to saying generally that where one of the elements is wanting the compound containing it cannot be produced: also a truism. However, it so happens that there are such compounds as combinations of labourers and not-capital, as, for example, a stone statue. Sculpture, provided the material used be not valuable, is an industry not limited by any capital other than labourers. According to Mill's own notion of capital, therefore, his first theorem is false.

The second theorem is that capital is the result of saving. Now in what conceivable sense can it be said of a new and useful invention that it is the result of saving? And yet it may be, and usually is, capital in the highest degree. Or how is a newly-found oil well the result of saving? And yet it is unquestionably capital. No doubt, in so far as articles capable of affording immediate gratification are by preference combined with others for the purpose of producing more valuable products these products are the result of saving; and it is also true that most products do contain such saved elements. But we do not want half truths or accidental truths to stand for general or necessary truths; and so judged the second theorem is false.

This pro

The third theorem is that capital is consumed. position we have already discussed in treating of the division into fixed and circulating capital. I have shown that it is not of the essence of fixed capital to be consumed. All things

are ever changing of course. But it is no more essential to fixed capital to wear out than it is to a silver teapot to contain a small quantity of lead, indisputable though the fact may be as a merely accidental fact. So that here we have a universal but accidental proposition standing for an essential truth.

The fourth theorem is that a demand for commodities is not a demand for labour. It is difficult to translate this into scientific language, but, so far as it is intelligible, it seems to be either a truism or misleading. Consider the two following statements: A demand for iron ore is not a demand for limestone and coal. A demand for grapes is not a demand for apples. There is a wide difference between the two negations, for in the first case a demand for iron ore is accompanied by a demand for limestone and coal invariably, and it may roughly be said that a demand for the one is a demand for the other two. To say that it is not so is to state a truism of the weakest order, being based simply on the literal meaning of the words. But in the case of the grapes the negation is of a different character. A demand for grapes is not accompanied by a demand for apples, which is in nowise affected thereby. If we criticise Mill's theorem in the first sense then we have a miserable truism to deal with. A demand for one thing is not, and cannot be, a demand for another. But if we regard it in the second sense, and inquire whether a demand for commodities is or is not invariably accompanied by a demand for labourers, I contend that it depends, in any given case, upon the answer to the question, whether the commodities demanded are or are not capital requiring the assistance of labourers in order to become capable of affording gratification. If they are such capital, then a demand for them is virtually a demand for labourers. If they are not such capital, then a demand for them is not a demand for labourers. We must condemn this theorem as being either a truism or misleading.

There cannot be stronger testimony to the harmfulness of

loose thought and corresponding phraseology than is afforded by the spectacle of a great logician like Mill propounding four fundamental theorems as the basis of his work, of which it must be said that the first is false, the second is false, the third non-essential, and the fourth either a truism or misleading.

CHAPTER VI

THE LABOUR QUESTION

"CAN'T you let things alone?" asks the comfortable capitalist in his easy-chair. "Let sleeping dogs lie. All is fairly well, if only reformers would but sit still." No! there is a time for rest and a time for action. When the social forces are gradually shaping themselves, and their eventual tendency is undiscernible, the social tinker is out of place. His suggestions for change, though frequently prompted by kindly feeling, are all based on rule of thumb. He would amend the laws of nature on superior principles evolved from his own inner consciousness. Sometimes he labours in vain. His efforts end in naught. Sometimes he is successful in his immediate aims, and then his efforts end in untold mischief.

But when the body politic is in unstable equilibriumwhen the fabric of society is shaken to its foundations; when all the signs of the times point to imminent change, for better or for worse-then the true statesman is he who, before the inevitable crash comes, can so forecast the resultant of apparently conflicting forces as to be able to guide them at once and without unnecessary waste of energy and time into their destined channel. The navigator cannot make the wind, and the statesman cannot create the social current, but both can so utilise the force supplied by nature as to make for salvation rather than wreck. To-day presents such an occasion. To sit still and "wish for the day" means ruin. All over the civilised world he that hath ears to hear may listen to the mutterings of the coming storm. Riots in America; riots in Belgium;

riots in France; riots in Holland; riots even in tranquil London, all originating not with the scum and refuse of society, but with honest, despairing workers clamouring for bread and for work, and not knowing whither to turn; depression in trade (despite the rose-coloured reports of Royal Commissions) of an intensity and duration unprecedented in the history of industrialism: here a strike, brought to a close by the slow starvation of the strikers, only to be followed by another due to impossible wages; there a lock-out, rendered necessary by vanishing profits; everywhere discontent and wretchedness, aggravated by class envy and glaring inequalities of distribution; all these and a hundred other signs bode revolution. It must come. It is for us to decide whether it shall be short, sharp, and bloody, or peaceful and thorough. There is no alternative, and now that the people have taken the tiller into their own hands, it is upon the people that the responsibility must lie.

Probably the first thing in this country to strike an observer, unused all his life to the strange phenomenon, would be the spectacle of a large majority of human beings toiling all day long and every day of their dreary existence in order that a small minority may enjoy the proceeds of their work— toiling, too, at wages avowedly based on a calculation of the cost of "keeping body and soul together." Surely, if it were not so tragical, the situation would be almost comical. Yet we are asked to tremble at the approach of the revolution. Of whom? Of those who tamely submit, almost without protest, to this anomalous, this monstrous system of wagedom? men who stand passively by to see the lives of their wives and mothers and sisters crushed out of them beneath the car wheels of Juggernaut Plutax? And this, too, is an age of cheap literature, of gratis education, of rapid communication, and of free meeting? Is it that the Englishman of to-day has too much sense and too little pluck for revolution of the "blood and iron" type? type? Or is it that he has hopes of a peaceful revolution and courage to wait for it? Perhaps.

Of

But, first, what is the explanation of this singular economic system? In accordance with what principle of justice does one of two partners take all the profits and the other none?

It