weaving was not generally done in factories, but by men and women in their own homes working on their own account, although in some cases, especially in the woollen trade, there were employers who had 20, 50, or even 100 paid hands."

The revolution which totally changed this relatively simple organization of labour began in the middle of last century, and was brought about by a remarkable series of inventions and discoveries, partly referable to increased scientific knowledge, partly to the genius of individuals. This spirit of invention and discovery, which has since extended to every industry-some being even wholly created by it-at first directed. itself to the staple textile industries of Great Britain, the cotton, linen, woollen, and others; and these were revolutionized from top to bottom. The essence of the change effected by the new inventions was briefly this: the new invention usually took the form of a machine which could produce more in the same time than could be produced by an equal number of workers without its aid; perhaps it could produce two or three, or even five times as much, and if this could only be sold at the old price, or a trifle lower so as to draw new customers, the owner could, before the price fell, make great extra profits—after making good to himself the interest on the money invested in the machine.

Or the advantage of the machine may be thus stated: If the machine produces twice as much in the same time with the same number of hands, then with half or a little more than half the number of hands,

See Toynbee's "Industrial Revolution."

and with a less large and less expensive machine, there will be the same turn-out as by the old number without the machine; in other words, the employer will get the same result with half the labourers, and the wages of the displaced half might be put in his pocket as extra profit-minus, of course, the interest of the capital sunk in the machine.

"But whence," it may be asked, "came the capital sunk in the machine?" In the first case (when the same hands were kept on), it was either borrowed or saved out of previous profits, or most likely it came from both sources; in the second case the necessary capital can come from the saved wages, being borrowed in the first instance. In the first case the great additional profits soon enabled the employer to extinguish both borrowed principal and interest, after which, the extra profits continuing, he was in a position to still further enlarge the scale of his enterprise, as he usually did. He did not often, until later times, under Trades Union strikes, turn part of his circulating capital into fixed, thereby displacing part of his hands; because the larger the scale of production, the more easily he could undersell not merely the producer by the old and ruder methods, but the producer by machinery on a smaller scale in a smaller factory. He could well afford to sell cheaper, and yet have higher profit. Besides, cheapness widens the circle of customers, enlarges the demand, and the enlarged demand reacting on expenses of production lessens them, thus stimulating him to produce in ever larger quantity.

With the incoming of the new machinery there was a great race for wealth and fortune. Whoever got

the machinery first could undersell rivals, drive them from the field, and step into their custom. It was a grand case of the survival of the strongest, or the fittest-the fittest being a strange mixture of good and bad types. The small producers were devoured by the large. Moreover, the period of struggle being prolonged, as ever newer and more potent or more cunning machines were invented, the large were in turn liable to be devoured by the still larger, a risk in the business sphere which continues down to our own time.

Instead of hands being turned adrift by the new machinery, more and more were needed in the cotton, woollen, and other industries. Then came the conquest and temporary monopoly of the Continental market, which resulted in a demand for more hands. and the pressure into the service of women, married and unmarried, girls, boys, infants of both sexes. By the monopoly of the Continental market, as much as by the labour, graduated in cheapness, of women, young people, and children, the profits of the successful capitalist became something extraordinary, being swollen by the conquest of his home and foreign competitors, by excessive working hours, by monopoly prices, sometimes by his own special genius and aptitude for business.

The general introduction of steam power into manufactures between 1830 and 1850, and the demands of the new foreign markets in the East and in America, carried the tendency to large production still farther, and the latter date, or 1848, the date of the political revolution, we might roughly fix upon as the com

pletion of the industrial revolution, and the establishment of the capitalistic regime in England, the like phenomena following after some time in France, the United States, Germany, and all civilized nations.

III.

WE are now in a position to see the essence of the new Socialism and of Karl Marx's indictment of the capitalists, on which chiefly the Socialist's argument rests. All wealth, and all exchange value, according to Marx, is the result of labour, and of labour only, and to the labourers, the real producers, all wealth should belong. Labour of head, directing and superintending labour, is allowed; how far it contributes to the result he does not attempt to tell us, though the implication is that the labour is neither difficult nor important. But certain it is that it receives an extravagantly exaggerated reward, in addition to interest on capital. Capital, Marx also allows, is necessary as well as labour, and even increasingly necessary, on account of the ever-increasing machinery required by modern industry. But then this capital should belong to the labourers in the total, to the collectivity of labourers, and not to private persons or to limited companies. And why? Because, according to him, capital is the result of spoliation of the capitalists withholding wages due to the labourers; and secondly, if labourers do not own the capital, they must continue as now, the slaves of the capitalist, the financier, and the receiver

of interest,-the slaves of the classes who live by their labour. Their condition will even grow worse, since more fixed capital will be required. Capital is not the result of a virtuous abstinence on the part of the capitalist, as Senior, a middle-class economist, anxious to make out a good case for the capitalist, maintained. Or, if it is the result of saving, it is saving from a previous plunder taken from the working classes. Such is Marx's view.

To represent capital as the result of saving, as Senior and others do, is to misrepresent fact and history. Capital came and comes from profits, accumulations made at the expense of the workers, and these came, and still come, from surplus value conferred by the workers on the materials given them. To prove that this surplus value is solely conferred by the labourers is, according to Marx, easy; and, it must be allowed, if we grant his premises and his argument, they will go far to prove the case of the Socialists-from the moral point at least. A close attention should therefore be given to his reasoning here, as involving the central issue in the whole Socialistic controversy, and because on it rests German. Socialism, and indeed all modern Socialism.

According to Marx-as according to Ricardo, who is the declared rock of the Socialistic faith-the exchange value of any manufactured product depends on the total quantity of labour necessary to produce it, and bring it to market. And the additional value conferred on any materials is due solely to the additional human labour exerted on them. The yarn of the spinner costs so much. When it turns