incorporated in it. Will it be the number of hours in the cotton goods that were exchanged for it? Yes, Mill and Ricardo would say, for that is what deter-. mines it now; it is the cost of production measured in the amount of labour, or in the number of days of labour time in the things exported which fixes the value of the imported goods. We will suppose the orthodox theory correct; that a certain amount of cotton and

9 Ricardo's theory of foreign trade, amended by Mill, is far from satisfactory. According to Mill, the value of an imported commodity in England does not depend on its cost of production in the foreign country, but on the cost of production of the exported goods given for it. "The exchange value of a pipe of wine in England will not depend upon what the production of the wine may have cost in Spain, but on what the production of the cloth exchanged for it has cost in England." But as a matter of fact the value of a pipe of wine in England does depend on its cost of production in Spain measured in money, plus something due to cost of carriage, customs' duty, and importer's profit. But by "cost of production in Spain," Mill means the number of days of labour spent in production; by cost of production in England in like manner he means the time taken; in short, he measures value and cost of production by time or quantity of labour, which was the wrong theory of Ricardo, corrected by himself into his own, that value depends on cost of production, measured by wages and profits-that is by money. The value of the wine in England does then depend on the money cost of production in Spain; on the wages and profits which fix its price in Spain; it does not depend on the hours or days of labour taken to produce the cloth any more than the wine, both of which would be nearly impossible to estimate, as we have seen in the text. In all cases the money estimate or price is in the minds of importers and exporters, even when they appear to barter directly (supposing both countries to have money) it is the state of prices which determines the ratio of exchange. If there were no money prices, foreign trade would

other goods, without any money, has been exchanged for the tea; the total value of the tea will then equal the total value of the cotton and other goods, from which the value of a pound of tea can be found. Thus, if the cotton and other goods, the result of a quarter of million days of average social labour, have been exchanged for one million pounds of tea, the value of a pound of tea will be a quarter of a day's labour; or one day's normal labour will command, or be equal to, four pounds of tea. The State may fix values ac cordingly. But now, suppose only half the amount of tea is demanded at that value or rate. The State officials, the Bureau of Trade would have to lower the value to call out extra demand; that is, do what changes in market value now do ; or if they adhere to the fixed value, they must import less next year or next half-year, which would imply less exports of cotton, etc. It would have to lessen purchases, that is lessen exports of cotton, and lessen the labour employed at the cotton manufacture, otherwise there would be too much produced, and values of cotton would fall at home, or if arbitrarily kept up the goods would not be consumed. We have the old difficulty, or rather impossibility, of keeping values fixed.

The values of things can only be kept fixed by changing, in some cases, the quantity produced, according as changes occur in human fancies or habits; in other cases, as in that of a necessary of life, like corn, where a tolerably fixed quantity is strongly desired,

become nearly impossible, or would be reduced to very small compass.

and will be had before all else, but where more than that is comparatively useless, a deficiency in the quantity must necessitate a rise in value, a rise in what people would be willing to offer, and a superfluity a fall, and even a rapid fall-if all is to be consumed. The fall could only be prevented by the State setting aside for future needs the superfluity from a prosperous harvest; the former could not be prevented by the State, because so long as private arrangements could be made between parties, the persons with the strongest desires would find means to get as much as they wanted. The rise of value might, however, be mitigated to the general good by the State's preventing certain speculators and monopolists taking advantage of the deficiency and turning it to their special profit. Wherever there are rings, combinations or syndicates controlling a necessary of life, who would thus have the power of aggravating a real scarcity, and by acting on the fear or imagination might create a greater rise than otherwise would take place, or who might produce an artificial scarcity, the State, by controlling such, or stepping into their place, could minimize the evils of the scarcity, and prevent a great rise of value to the general advantage, especially if it had saved from former years. But it could not keep values fixed unless it could alter human nature.

IV.

THUS, then, finally the Marxian theory of value and "theoretical basis of Socialism" is vicious as a theory and inapplicable in practice: the values of things in a

Socialistic community would have to be arbitrarily

fixed by the authorities.

Even when arbitrarily fixed

they could not be kept so, any more than now, though it would be necessary to keep them fixed, much more than now. There is no principle of distribution contained in the theory of value, because to get the value of any product, the comparative worth of the different kinds of labour must be presupposed. The values of things cannot be pronounced till we have already decided how many times skilled labour is more than unskilled. The principle of distribution is assumed, when we lay down the proportion between the different kinds of skilled and common labour. If my skilled labour is rated three times common labour, then my day's labour, or my year's labour, will command three times as much, that is, the Law of Distribution is already assumed, and, as before said, it must be assumed arbitrarily, since there is no common measure of the comparative quantities of labour. I by no means say that Socialism, even in the form of Collectivism, might not lay down some principle or scheme of distribution juster than the present, and which might be practically applicable. I only

say that there is none contained in Marx's principles or in his theory of value, while the one vaguely foreshadowed by some Collectivists of something

like

a rude equality would be absolutely impracticable, though if it could even conceivably be carried

out by a relentless despotism, in which chiefs more ascetic than St. Just or Robespierre, and officials more incorruptible, all willingly accepted the rule of equal shares, and determined to carry it out, the

result would be to bring society speedily to poverty, and to send civilization back to its cradle.

The equality would certainly not bring liberty with it, still less fraternity. It would not bring contentment nor peace, assuming that human nature had so far changed as to acquiesce in the thing even for a short space of time.

I by no means imply that the great inequality of the present system is all for the best; nor that the existing distribution of wealth, dependent partly on Free Contracts, partly on our property laws, is ideally just or perfect; far from it; but it is better and juster than the rule of equality would be, which is one principle of distribution proposed by the Socialists, while it is at least practicable, which cannot be said of the other Socialist principle of, "To each in proportion to his works."

A better distribution than the present, and having more reference to equality, is possible, without breaking so completely with the present system as Collectivism proposes. It can be done by the State; by taxation, legislation, and otherwise, while still leaving large Freedom of enterprise, as well as Freedom of Contract between employer and employed. And though equality of reward would be bad, something like equality of start and of opportunity would be good, and could be secured for the competitors by the State. The State, moreover, in its own interest and for the general good, could favour Nature's inequalities, even at the risk of levelling a little social inequalities or the inequalities of fortune; it could sift out and select Talent of all kinds, even assisting it if