This let-alone contention is nothing less than the assumption that might is right, but with the limitation that the collective might of all must not be used to protect the common interest of all against the individual might of the strong in their contest against the weak. "Let things alone" means, don't interfere to stop the athletic thief from robbing a crippled beggar.

The might of greater strength, greater cunning or the accumulating power of greater or better organized industrial equipment in private hands may as ruthlessly rob as an outright highwayman, and society could justify its protection of the highwayman as easily as it could justify its protection of the greater strength, cunning or economic equipment of the private masters of the shop or market, in their economic war against those with inferior equipment, or entirely without the means of producing the means of life.19

401. The Iron Law of Wages.-9. The capitalist assumes that there is no possible provision for working men beyond the smallest wages for which the workers will consent to work in numbers large enough to do the work required.

The answer is that this is true under capitalism, but under Socialism there will be no such iron law of wages.

Under capitalism the private owners will always be striving to make the share of the products which falls to the workers the smallest possible. The competition

19. "Seventy-five years ago scarcely a single law existed in any country of Europe for regulating the contract for services in the interest of the laboring classes. At the same time the contract for commodities was everywhere subject to minute and incessant regulation. Can there be any wonder that statesmen and the mass of the people entertain slight regard for political economy, whose professors refuse even to entertain consideration of the difference between services and commodities in exchange, and whose representatives in legislation have opposed almost every limitation upon the contract for labor as unnecessary and mischievous?"-F. A. Walker, Quoted by Wright in Some Ethical Phases of the Labor Problem, pp. 65-66.

for employment among the workers in the face of this effort to reduce wages on the part of employers establishes this tendency of wages always to reach the lowest level possible and still provide for the existence of the workers. This is the gist of the iron law of wages. It is obvious that it will remain a factor in the distribution of the products of labor only so long as the private owners of the means of production can continue to force the workers to compete with each other for the opportunity to live at all.

Under Socialism the total of the largest product which the workers are willing to produce will be the smallest reward for the workers themselves, for under Socialism those who are workers will no longer be compelled "to divide up" with those who are idlers in order to obtain their consent to become workers at all.

402. Summary.-1. All schools of economists, whether assuming the existence of an "economic man” or undertaking to observe the conduct of the ordinary man under capitalism, come to the same "dismal” conclusions as to the lot of man under capitalism.

2. Present institutions can be understood only by studying their origin and the processes of their development.

3. The capitalists assume all the leading features of capitalism as belonging to the normal and lasting lot of man:

(a) They assume that the wage system is the natural method of production. In the same sense, so was slavery natural.

(b) They assume capitalism always to have existed. It is of recent origin.

(c) They assume that capital originated in saving, thrift and enterprise. It owes its origin to war.

(d) They assume that labor may be properly bought

and sold. But labor cannot be sold except the laborer be sold with his labor.

(e) They assume that the sole and only motive in economics is individual self-interest. The collective self and the collective self-interest must also be considered.

(f) They assume the existence and the justness of competition. Free competition does not exist. By its own activities it has destroyed itself.

(g) They assume the wisdom of the "let-alone policy." But they let nothing alone involving their own interests. Society ought to act in behalf of all in all matters where the interests of all are involved.

(h) They assume the necessary existence of the "iron law of wages." This law holds only under capitalism. There will be no such law under Socialism.

REVIEW QUESTIONS.

1. State difference between English and historical schools of economists.

2. Why are the conclusions of both schools so nearly to the same effect?

3. From what sources can the materials be obtained for study in economics?

4.

What are some of the necessary limitations?

5. Is the wage system natural?

6. How old is capitalism?

7. What is the origin of capital?

8. Discuss positions of Walker, Mill and the Duke of Argyll.

9. On what is human progress now waiting?

10. Can economic justice exist under capitalism?

11. Shall society "let things alone?" Why?

12. Will the "iron law of wages" prevail under Socialism? Why?

CHAPTER XXV

THEORIES OF VALUE

403. The Exchange of Products.-The workers of the world are now producing goods to be sold in the world's market. Goods produced for the market are called commodities. In the sale and purchase of goods the fixing of a price at which the purchase or sale is made is necessary.

The purpose of all production and sale of goods is in order to be able to purchase other goods. All purchase and sale of goods is of the nature of exchanging products which one has produced in excess of what he wishes to use, for the products of others which he also wishes to use. All purchases and sales which would seem to be exceptions are merely steps in the process by which the producer and consumer "get together," and are therefore parts of this process of exchange.

404. Power in Exchange.-What determines the power of any given article to exchange itself for other articles in the market?1 How many caps, shawls, coats

1. "It is not money that renders commodities commensurable. Just the contrary. It is because all commodities, as values, are realized human labor, and therefore commensurable, that their values can

of a certain kind can be obtained for a wagon load of wheat of a certain grade? This question is determined by learning the value of the wheat, and the value of the caps, shawls and coats to be exchanged. It is said that many things have value which cannot be exchanged in the market for anything at all. The air is the usual illustration of this sort of value. This is called "use value" and is not a matter of importance in this discussion.

Value, then, is the power which an article has to exchange itself in the market for other articles. It is quite likely that no other subject has been more hotly disputed by the economists than this subject of value; the question of controversy being, "What creates value?"

405. The Economists and Socialism.-Beginning with John Locke in the last decade of the seventeenth century,2 Sir William Petty, Adam Smith, Benjamin Franklin, Ricardo, John Stuart Mill, Karl Marx, Henry George, and all the English economists prior to the work of Prof. Jevons, maintained in substantial

be measured by one and the same special commodity, and the latter be converted into the common measure of their values, i. e., into money." -Marx: Capital, p. 66.

2. "And thus, without supposing any private dominion and property in Adam over the world, exclusive of all other men, which can no way be proved, nor any one's property be made out from it, but supposing the world, given as it was to the children of men in common, we see how labor could make men distinct titles to several parcels of it for their private uses, wherein there could be no doubt of right, no room for quarrel.

"Nor is it so strange as perhaps, before consideration, it may appear, that the property of labor should be able to overbalance the community of land, for it is labor, indeed, that puts the difference of value in anything; and let any one consider what the difference is between an acre of land planted with barley or sugar, sown with wheat or barley, and an acre lying in common without any husbandry upon it, and he will find that the improvement of labor makes the far greater part of the value. I think it will be but a very modest computation to say, that of the products of the earth useful to the life of man, ninetenths are the effects of labor. Nay, if we will rightly estimate things as they come to our use, and cast up the several expenses about them— what in them is purely owing to nature and what to labor—we shall