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

out as woven cotton fabrics it is of so much more value, because of the additional human labour that came in contact with the yarn-which additional labour is now crystallized, objectified, or "congealed," to use the expression of Marx, in the cotton cloth, The machinery confers no additional exchange value on the raw materials; or only as much as itself loses in wear and tear. Nor can the added value come from the act of exchange, which merely gives value for value, which is a mere swopping of equivalents. Consequently, human labour alone confers additional or surplus value. He goes on to show that for part of this new value conferred, the workman has been paid in his wages (which, however, he maintains always tend to the Ricardian minimum), for the remainder, or surplus value proper, he has not been paid. This, which is generally called profits, has been confiscated by the capitalist.

This surplus value may otherwise be defined as all above the minimum of bare subsistence. Marx is fond of putting the case in another way. Suppose, he says, the working day to consist of twelve hours, during the first six of which the worker confers as much value as would amount to his own subsistence, the amount he actually receives; then during the remaining six hours he works for the master for nothing. And the worst of it is that any improvements which reduce the cost of the labourer's necessaries only result in making him work a greater number of hours gratis. The worker's case is the old case of the serf, working so many days for himself and so many for his lord, only that there is no such

palpable division of the modern "wage-slave's " hours, so that you could say when he was working for himself and when for the master. In fact, slavery, serfage, the corvée, modern rack-renting, and capitalist appropriation of surplus value, are all at bottom identical, according to Marx, since all consist in the superior exacting whatever is produced above the necessary means of subsistence of the worker."

Now as to this argument of Marx's regarding the cause of exchange value, there would have been more force in it during the stage of the handicraft industry, because the workman's efforts, aided by his traditional tools, did confer the additional value on the materials on which his craft was exercised. The labour of the carpenter, aided by plane and chisel, did confer on the planks the additional exchange value they had in the form of a box or table, and there is reason to say, though it is rather a verbal subtlety, that the work was the work of the carpenter and not also the work of the plane and chisel. At any rate, if the tools were his as well as the materials, the whole product was his. In this case he is, as Adam Smith says, both master and workman, and enjoys the whole produce of his own labour, or the whole value which it adds to the materials on which it is bestowed.

But as Adam Smith goes on to say, there were in his time few such independent workmen; the greater proportion served under a master, who furnished the more expensive instruments of production-in fact the considerable capital which was necessary, which

7" Capital," vol. i. p. 218 (Eng. Tr.).

the workers did not possess, and without which in the possession of someone they could not find employment. Can it any longer be said that all the value is due to the labourers solely, and that therefore they should receive the total product, deducting only the master's materials? Doubtless their labour was necessary, and it, aided by the tools and appliances, did the work, made the changes of value in the materials; but can it therefore be said that they are to get all the new value of the product, and to have the same advantage as if all the instruments of production were theirs? Must they not in fairness allow some deduction because they do not possess the necessary tools and appliances; or can they expect to be in the same position as they would have been in had all the means of production been their own? Unless the employer receives a portion as profits he would have no inducement to employ them, as Adam Smith says. Besides, he who furnished the fixed capital had also generally founded the business. Without his energy, intelligence, eye for an opportunity, in addition to his capital, this employment and means of livelihood would not have existed at all at that place and time.

This capitalist when he arose was a benefactor to them as much as to himself. Without this type of man arising, seeing an opening, finding somehow the capital and risking it, the thing could not have been started at all. Who was to do it if he had failed to arise? The Government, in England at least, would not; the labourers could not; the capitalist came. Having already been one in a small way, and having