exclusive significance; or, to express the same thing from the other point of view, it failed to make due allowance for the subjective and social factors in value and price. All this has meanwhile been made evident by the economists themselves, though it is equally evident that the last word has not been said, and that the psychologists and sociologists have a function in tracing the facts to their ultimate elements.

When Smith touches upon the relation of wealth to anything beyond the immediate technicalities of economic processes, his propositions affect the modern reader as relatively less applicable to the real world of today than they were to his own time.16 They are approximations to truth, but the approach was so much closer when he wrote, that, under the operation of present conditions, some of the paragraphs, when applied to our world, read almost like satire. For example, in immediate connection with the sentences just quoted, he continues:

Wealth, as Mr. Hobbes says, is power. But the person who either acquires or succeeds to a great fortune does not necessarily acquire or succeed to any political power, either civil or military. His fortune may, perhaps, afford him the means of acquiring both, but the mere possession of that fortune does not necessarily convey to him either. 16 Again strengthening Bagehot's indictment. See above,

p. 68.

The power which that possession immediately and directly conveys to him, is the power of purchasing; a certain command over all the labour, or over all the produce of labour which is then in the market. His fortune is greater or less, precisely in proportion to the extent of his power; or to the quantity either of other men's labour, or, what is the same thing, of the produce of other men's labour, which it enables him to purchase or command. The exchangeable value of everything must always be precisely equal to the extent of this power which it conveys to its owner.17

At first glance we are tempted to say that all this is literally true. Upon second thought we are impelled to add that it is true only with heavy emphasis upon the adverbs "necessarily," "immediately," "directly," etc. Upon reconsideration of the second thought, we conclude that even with this proviso the propositions are far from adequate.

In the first place, the possession of wealth in large quantities, in our modern world, almost of necessity commits the owner to participation in affairs, for the sake of preserving, if not of increasing, his wealth, to an extent that adds to his political or social influence in ways which could not be achieved by his bare personality. In the second place, it is not true that the total power over men exerted by a syndicate controlling, a hundred million dollars is merely equal to

17 P. 31.

the sum of the powers exerted by a million detached men, each controlling one hundred dollars.18 Through the single factor of suggestibility, to take but a single instance, massed wealth becomes a social force which the logic of the labor necessary to produce or to reproduce it utterly fails to explain. Similar factors might be scheduled in large numbers.19

Smith advances from his premises of labor as the ultimate norm of value, to money as the representative of labor in the work of measuring value in actual exchanges. Thus:

But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is more

natural, therefore, to estimate its exchangeable value by the quantity of some other commodity than by that of the labour which it purchases. . . . . But when barter ceases, and money has become the common instrument of commerce, every particular commodity is more frequently exchanged for money than for any other commodity.20

18 If it were, there would be no more sense in public attention to the few men who form a trust, than in the same sort of public attention to the unorganized men in a given population whose combined wealth would equal the capital of that

trust.

19 Cf. the case cited at the beginning of The Wealth of Nations, Chap. VI, p. 47. Such trade is not a measure of comparative quantities of labor at all, but, on one side at least, almost purely of childish desire for novelties.

20 Pp. 31, 32.

With this the argument becomes more strictly technical, from the purely commercial point of view, and it thus passes out of the range of our present inquiry.

In Chapter VI, on "The Component Parts of Commodities," we come upon a turn of the argument which it is by no means easy to understand or to appraise. The first reason for this is that we cannot be sure how clearly Smith drew the distinction between what is and what ought to be in the processes of industry. That is, it is by no means certain that he always confined himself to bare analysis of the occurrences in commerce, and we are not always able to tell when he wanted to be understood as merely formulating the facts, and when he adds to the facts his own appraisals.

For instance, speaking of labor, in an "advanced state of society," he says: "In this state of things, the whole produce of labour does not always belong to the labourer.” 21 As a bald statement of fact, this is literally true. Does Smith, or does he not, mean to imply that the extent to which it is true is strictly in accordance with equity? We can answer this question only vaguely. Smith certainly had no thought of any such radical injustice as Marx afterward

21 P. 50.

alleged in this connection. It is not certain that he would assert that there was any injustice at all in the system of distribution operated by the society of his day. This in spite of the fact that in certain concrete cases, like those of the colliers or the salters, he protested against abuses. He had not generalized such items into an indictment against the industrial system at large. Apparently he assumed that the more complicated system of production, consequent upon division of labor, automatically invented a corresponding system of distribution, in which the reward of each participant in production was assigned in strict ratio with the value of his labor in creating the product. Whether he would have asserted precisely this or not, if the question had been distinctly proposed, it is evident that in his mind there was not yet a problem of distribution which was not settled in advance by the technique of production. In the paragraph from which the last quotation was made Smith goes on to say:

Neither is the quantity of labour commonly employed in acquiring or producing any commodity the only circumstance which can regulate the quantity which it ought commonly to purchase, command or exchange for. And additional quantity, it is evident, must be due for the profits of the stock which advanced wages and furnished the materials of that labour.

We may not be able to divest our minds of