is added to as it passes through the hands of the wholesale and retail merchants, and the surplus value taken up gradually as it is being added to, share by share, along its course.

Misconceptions of Theory. Marxists are wont to defend the economics of Marx against a number of misconceptions. They declare that Marx never denied that nature is a factor in the production of wealth.81 The Marxists contend that the fact that a lump of gold, falling as a meteor on the land of a proprietor, or a silver mine, accidentally discovered, would have value, does not contradict the general laws of value as laid down by Marx. According to Marx's theory, the value of these articles, like that of all commodities, is the socially necessary labor which must be spent in their reproduction. If the particular lump of gold described were lost or wasted, it could not be obtained again from the clouds, but would have to be reproduced by labor, and its value would be the socially necessary labor spent in its reproduction.82

81 See Boudin, The Theoretical System of Karl Marx, p. 101 et seq. Marx used the word wealth in the sense of that which has utility, rather than in the sense of the orthodox economists, that which has value.

82 It is here impossible to deal at length with many of the controversial points in regard to the correctness of this theory. All students of the subject should read Marx's analysis in Capital, his greatest work (this monumental work is produced in three volumes, Vol. I published in 1867, Vol. II in 1885, and Vol. III in 1894), and his short pamphlet on Value, Price and Profit. Undoubtedly the best defense of Marxian economics published in English is The Theoretical System of Karl Marx, by Louis B. Boudin. Dr. Hughan, in her American Socialism, etc., analyzes the position of various schools of thought on this problem, Edward Bernstein in Evolutionary Socialism presents the criticism of the theory from the revisionist socialist point of view, while Boehm-Bawerk in Karl Marx and the Close of His System, and Simkhovitch, in Marxism vs. Socialism, Chs. I and XII, endeavor to show the inadequacies of Marx's economic system. The alleged great contradiction" in the law of

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Facts of Surplus Value.- As Dr. Hughan brings out,s the "socialist claim to the existence of surplus value does not depend of necessity upon the Marxian labor theory." Socialists point out that, in this country only a portion of the social product goes to labor. They cite, for instance, the estimate of the statistician, Dr. W. I. King of the University of Wisconsin, that, in 1910, but 46.9 per cent. of the total national income went to wages and salaries, while 53.1 per cent. was distributed as interest, rent and profits (16.8 per cent., 8.8 per cent., and 27.5 per cent. respectively).84 Expressed in money, Dr. King estimated that, in 1910, $11,309,900,000 were distributed in wages, and $12,827,100,000 in rent, profit and interest. The socialist would, in general, describe this 53.1 per cent. in rent, interest and profits, minus, perhaps, that part of the profits which went into insurance and wages of ability, as surplus value.

Is Private Capital Socially Advantageous? - Whether or not the above portion distributed in interest, rent and profit is looked upon as surplus value in the Marxian sense depends on the acceptance or rejection of the Marxian theory that labor has created the whole of value. If capital is unproductive, as Marx contended, then the amount here termed surplus value would correspond with the amount mulcted from labor. If, on the other hand, the productivity theory is accepted, and capital is regarded as a creative agent, then the question of the socialist becomes, as Dr. Hughan has again expressed it, “not,

surplus value is exposed at length by Boehm-Bawerk and Simkhovitch, and answered by Boudin, op. cit., (Ch. VI). For a defense of Marxian economics see also Cahn, Capital To-day; Haller, Why the Capitalist; Spargo's Socialism, Ch. VIII.

88 Hughan, op. cit., p. 80.

84 King, The Wealth and Income of the People of the United States, p. 160.

'Is the profit of the capitalist a surplus value extracted solely from the product of labor?' but, Is there social advantage in the private ownership of capital, which has the power to create value without exertion on the part of the owner?"" 85 It is this question which today receives the chief attention from leading socialists.

Summary. According to the Marxian theory of economic advance, socialism is thus seen to be the logical next step in economic development. The present order gives rise to industrial concentration and to periodic crises. It plunges large numbers of the middle and upper classes into the proletariat. It develops among the workers a spirit of solidarity and a will to industrial power. A struggle between the capitalist class and the proletariat for a larger part of the social product and for industrial control ensues. This struggle can have but one result the socialization of industry.

Underlying this analysis is the concept of the economic interpretation of history and the class struggle. Although modern socialists have made a number of modifications in the Marxian sociological theory, they still adhere in the main to the foregoing analysis. Greater controversy exists within socialist ranks regarding Marx's economic theory of surplus value, which many believe to be an unessential part of socialist theory. There is little controversy, however, concerning the facts of surplus value.

85 Hughan, op. cit., pp. 80-1. See also Murdoch, Economics and Ethics. An attempt to show the unethical character of those schools of economic thought which attempt to justify the private appropriation of interest.

CHAPTER V

THE SOCIALIST COMMONWEALTH

The Aims of Socialism.-As is the case with every other great economic, political or religious movement, it is impossible to convey to the outsider in the space of a few sentences an adequate idea of the socialist ideal. One must be a part of the movement to sense its real purport. Broadly speaking, the socialist movement aims to bring about a condition of society under which equality of opportunity, justice, freedom, democracy, brotherhood will be the heritage of the mass of mankind. In this it does not differ essentially from certain other great movements. It differs fundamentally, however, in the means proposed for realizing these ideals the abolition of the present capitalist system and the substitution therefor of a system of collective ownership and democratic management 1 The words "collective ownership" usually imply ownership by the organized community, by the local and federal state, if the word "state" is not used in the Marxist sense - implying an instrument of class rule — but in the sense of some machinery through which the community of consumers may be able to express itself effectively, industrially and politically. To some who call themselves socialists such "collective ownership" means ownership by some organization representative of the producers, as opposed to the consumers. Technically, however, this latter form of ownership would be more syndicalist than socialist in its nature. The words “coöperative ownership" are generally used by socialists as interchangeable with "collective ownership," although coöperative ownership in this sense must be distinguished from ownership by voluntary coöperative groups, found in the British and other consumers' coöperative movements.

of the socially necessary means of production and distribution; a system of society under which the exploitation of one class by another will cease and the wage system, as we know it today, will be a thing of the past; under which production will be carried on for use rather than for profit; under which the producing class then the one class in society will control the economic life of the nation.

Fear Utopianism. When asked to describe the socialist aim in greater detail, some socialists demur on the ground that to do so would be to repeat the error of the early utopians; that, inasmuch as society is a living organism, not an inanimate mechanism, it is possible only to predict certain general tendencies. As for details, they must be left to the future citizens who will be in a much better position to work them out than are the socialists of today. "Never has our party," declared Wilhelm Liebknecht, "told the workingmen about a state of the future,' never in any way than as a mere Utopia."

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There is now, however, a general tendency on the part of scientific socialists to picture in the rough the socialist society. The predictions are based on known tendencies that already exist in present society, and on what are believed to be the probable or inevitable results of a proletarian victory. Karl Kautsky, the leading theorist of scientific socialism abroad, has given, for instance, some notable contributions regarding a probable state of the future. His predictions are not based on what he would like to see result, but what must inevitably result, given a triumphant producing class with the education, discipline, organization and ideals which the present working class is developing.

2 Quoted in Spargo's Elements of Socialism, p. 212.