economist; and I trust I have been of some service in making that clear. Acting upon this sound doctrine and without in any degree imitating the German militarist system, which I earnestly hope will soon be destroyed, the best system of defence which we can employ against German aggressiveness, i.e. economic militarism, is to develop the nation's productive power. History has clearly demonstrated that nations have only been destroyed through being impotent in that respect. For example, where would the Allied cause have been to-day if we had not been able to rely upon the high productive power possessed by the American nation? Even British productive power had to be assisted by American at the commencement of the war, and it would be dreadful to think of the consequences that must have ensued had America failed us; but no such thought ever occurred to her and we shall gratefully remember it.

Yet America has never been, literally speaking, a military power, but a truly democratic nation, and this is the point I am endeavouring to force home. Nor has she ever been a supporter of the doctrines advocated by the school of Laissez-faire. And nowhere in the world has Labour a more settled, established and happier existence than is to be found in America.

In developing my National System I have seen

fit to make a liberal use of quotations from the best authorities. In the words of Frederick List, "it would be impossible to expect a complete scheme from the head of any single philosopher." My own particular work has been to pick out those doctrines which I believe from my own immediate experience to be known and demonstrated truths, and to place them together as one complete scheme with such improvements as I have myself conceived to be necessary; realising as I do that the public in the immediate years to come will require all the authoritative information it can obtain, in order to be able to fulfil its duties adequately to the State.

In the words of Dr. Ludovici, "opinions are a matter of will, and the opinions we hold concerning life should point to a certain object we see in life," and it is upon this ground I state my case. But as I mentioned at the outset, the work is written in moments ill spared from business, and if, in consequence, there be any imperfections in the manner of presentation, I trust my readers will excuse me in advance.

London,

August 15, 1918.

J. TAYLOR PEddie.

P.S.-The following abbreviation, Stephen Colwell, N.S.P.E., which appears as a footnote

in some of the following pages, refers to a footnote made by Colwell to Frederick List's National System of Political Economy (American edition).

J. T. P.

CHAPTER I

THE MODERN DEFINITION OF CAPITAL. WE ARE

ALL CAPITALISTS

A GREAT deal of interest has been manifested in certain articles which appeared in The Times a few months ago under the title "The Ferment of Revolution," and particularly in the letter written by Mr. A. J. Marriott on the "Destruction of Capitalism." On the whole, the articles in The Times have served a useful purpose, notwithstanding all criticism to the contrary, since they served to focus public attention on certain aspects of the Labour problem that required consideration.

With regard to the letter written by Mr. Marriott, interest centres in the following phrase used by him: "As an active Socialist, I often use the term 'The destruction of Capitalism.' What we mean is the taking over the whole of the capital and using it in the interests of the entire people, destroying the individualist capitalist.”

It would have advanced the discussion considerably if Mr. Marriott had stated precisely what he 1 The Times, Oct. 12, 1917.

29

and other Socialists mean by "The destruction of Capitalism"; what is Capital according to their conception of the accepted meaning of the word? Is not its meaning or sense in its comprehensive form distorted when he begins to involve it with such questions as the welfare of Labour?

Many business men, politicians, and particularly Socialists, use the words " Capital" and Capitalism" in a sense they do not altogether mean. Indeed, they frequently convey the impression that they are not entirely conversant with the derivation or significance of the words they use.

Until the community in general, and particularly those who control the forces of Industry and Labour, acquire in a true sense the proper definition of "Capital," i.e. the functions of money, property, machinery and personal service, a wide gulf will always separate the various sections which serve the nation as a whole. Reference need only be made to the state of society in Russia to-day by way of example. The Extremists are advocating the wild Marxian theories in relation to capital with results that are proving disastrous to Russia's national and international interests.

As a further example reference may be made to a phrase used by one of our most prominent business men in an interview accorded to one of