674.) It has been called the psychological school, because it seeks the causes of things in the subjective disposition of men. It has exerted a certain influence on economic thought.

(8) Mathematical School. - The Mathematical School, which deals largely in statistics, is still another branch. Supply and demand, value, wealth, and all the various factors that enter into economics, are submitted to statistics, and the law of probabilities is derived and held to be absolute. This method is practiced in France by Cournot, in England by Edgeworth, Wicksteed, Walras, Jevons, and Marshall, and in the United States by Irving Fisher.

The.

The Socialist School; Explanation and Definition. Socialist School is radically opposed to the Liberal School. Society as it exists to-day is not, according to the Socialists, a natural product, the effect of the working out of forces intrinsic to things, but rather the result of injustice and spoliation.

They say that the sources of the many evils now existing in society are individualism, free competition, and the right of private property. The principle "everybody for self" works to the detriment of all. An individual may begin on an equality with his fellows, but soon, through injustice, fraud, a greater degree of unscrupulousness, through advantages secured by force, chicanery, or conditions wholly social and independent of all personal effort, may secure an immense amount of wealth, set himself apart from his fellow men, and destroy the equality which is the natural right of all. Classes are thus formed, the property owner, the wealthy capitalist on the one hand, and on the other hand the laborer who owns nothing but his labor capacity.

Under the régime of individualism advocated by the Liberal School, there has arisen an ever-widening division between the capitalistic and the laboring classes, the rich and the poor. It is claimed that the rich are becoming richer and the poor poorer. The great army of the unemployed is growing larger. The difficulty of making a living has gradually increased, though the sum of the wealth of the world has been multiplied a hundredfold

since the beginning of the great development of industry due to the introduction of machinery and the employment of laborsaving inventions in industrial processes.

To bring about amelioration in the condition of the proletariat, to do away with the slavery of the wage system, to raise the laborer to a plane of freedom and of equality with the envied capitalist, is the proposed purpose of modern Socialism.

That there exists a natural tendency towards a change in society, towards a communistic ownership of all property, is, in the opinion of Socialists, evidenced by the gradual concentration of all industries, the small or medium industries becoming absorbed in the giant industrial combinations. It is seen also, they declare, in the extensive growth of trusts and great corporations that are destroying the individual independent artisan class; in the increasing application of machinery to all kinds of labor, whereby the manual worker is driven out of the field and made more and more dependent on the capitalists; in the rapid spread of municipal ownership of public utilities, all of which are but the forerunners of Socialism, the intermediary steps that will lead ultimately to the introduction of a universal commune.

Socialism is principally an economic system; secondarily and subordinately it is a political system, which treats of society in general, the state, the family, and other topics of Sociology. (Cathrein-Gettelmann, Socialism, 1904, p. 18.)

In Germany, where the Socialists have their greatest strength and where they constitute a powerful political party, they are known as Social Democrats and their system is called Social Democracy. In the United States they also constitute a political organization and are known as the Socialist party. During the past thirty years, American Socialists have gradually increased in strength, and in the presidential election of 1912, they, together with the Socialist Labor party, were able to poll a total of over 900,000 votes.

In other countries, the Socialist forces are growing stronger in each decade. An active propagandism is carried on by

Socialist teachers on the platform and through the press, and strenuous efforts are made to bring the mass of the laboring classes within the fold of Socialism.

Socialism or "social democracy may be defined as that system of Political Economy which advocates the inalienable ownership on the part of the state of all capital or materials of labor, as also the public administration of all economic goods and the distribution of all produce by the democratic state." (CathreinGettelmann, Socialism, 1904, p. 17.)

According to the definition, the state is to become the sole possessor of capital, land, mines, factories, raw materials, implements, and machinery. It is to become the owner of all means of transportation and communication and all other public utilities, and to administer all the mechanism of exchange. It is to become the distributor of all the produce which results from the various factors of production. (Ib., p. 92 et al.)

Principles of Socialism. - The general principles of Socialism may be put in more detailed form as follows:

1. The right of individual and private property in the various means of production shall cease. To-day, in the progress of industrial methods, all the means of production, land, capital, machinery, implements, have come into the possession of the capitalist. The great mass of the laborers possess nothing but their labor, which is useless without the means of production. This right of property is the inherent evil of present conditions in society and must be done away with before there can be any betterment of the working class.

2. The state shall be constituted in the form of a democracy. Any other form of government (monarchy, e.g.) would be incompatible with the perfect leveling of all classes and the conditions of equality demanded by the principles of Socialism.

3. The state shall own all capital, land, mines, factories, raw materials, implements, machinery; all means of transportation (railroads, express companies, and the like), and of communication (telegraph, telephone); all public utilities (water works, gas and electric lighting plants, street railways, and so on).

4. Production shall be regulated by the state. All the citizens shall be obliged to work. (Cathrein-Gettelmann, Socialism, p. 201.) They will, however, have arrived through education at such a degree of human perfection, that work will be looked upon as a pleasure and will be accepted willingly.

There will be national workshops, and committees will determine the nature of the work and the amount to be done. There will be no overproduction. Just enough will be produced to satisfy the needs of the citizens.

5. The mechanism of exchange shall be regulated and carried on by the state. There will be public stores where the products of labor may be disposed of by the laborers, in exchange for bonds the value of which will be stated in hours of labor.

6. Labor is the sole standard of value. A commodity has exchange value only on account of the human labor expended on it, and the measure of labor embodied in the commodity determines also its relative value in exchange. (Ib., p. 46.)

7. There will be no metal money. It shall be replaced by labor coupons, which will represent different amounts of labor hours, and which can be exchanged by the holders for commodities containing in their production an equal amount of hours of labor.

8. Consumption of goods shall be free with regard to objects of ordinary use. Wills shall be allowed only in the matter of personal goods. Implements of labor shall return to the state.

9. The distribution of all the produce of labor shall be in the hands of the state. This distribution shall be apportioned according to the work done or the services rendered and according to the needs of the individual citizens. (See under Distribution, p. 387.)

(For the origin and growth of Socialism, the fundamental principles on which it rests, and its dictates relative to the family, education, religion, and other details more particularly pertaining to social organization, we must refer to the extensive literature on Socialism.)

Defenders of Socialism. The principal propagators of

Socialism are in Germany - Rodbertus, Ferdinand Lassalle, F. Engels, Karl Marx, Bebel, Liebknecht; in France - Cabet, Babeuf, Count Henri de Saint-Simon, Fourier, Proudhon, Bazard, Louis Blanc; in England - Robert Owen, Wm. Morris, Wm. Thompson; in Belgium - Colins, De Paepe, Vandervelde.

The chief founder of modern Socialism is Karl Marx (18181883). In his books Criticism of Political Economy (1859) and Capital (1867), he lays down the principles which have become the foundation of modern Socialism, and have generally been accepted by the great mass of Socialists in all countries.

Branches of Socialism.

Besides the Socialist School just described, there are several other branches of Socialists or nearSocialists, who adopt principles differing materially from those of the Marxian Socialists.

(1) Agrarian Socialists. — Agrarian Socialists, followers of Henry George (d. 1897), hold:

I. That all the land should belong to the community. The government should receive the economic rent from land.

2. That tax on land should replace all other taxes. This is the doctrine of the "single tax." single tax." All other government taxes, with all their attendant evils, multiplicity, cost of collection, inequality, and injustice, would be abolished. Henry George protests that the "single tax " is not a tax on land, but on the value of land. All lands may be conceived as having a fundamental value. An added accidental value may accrue to certain parcels of land, owing to various causes over which the landowner has no control. Such causes are increase of population, of exchanges, scientific discoveries and inventions, social education, the general advancement of society. These causes bring about an unearned increment" in the value of land. This "unearned increment" should be the property of society, since it is wholly the result of social conditions. The means by which to effect this state appropriation of the "unearned increment," and indeed of all "rent," is taxation. (Progress and Poverty, Bk. VIII, ch. 2.)

POL. ECON. 2