theorists usually designate circulating capital is in the independent household economy merely a store of consumption goods in process of preparation, unfinished, or half-finished products. In the regular course of affairs, moreover, there are no sale goods, no price, no circulation of commodities, no distribution of income, and, therefore, no labour wages, no earnings of management, and no interest as particular varieties of income. Rent alone begins to differentiate itself from the (return from the) soil, still appearing, however, only in combination with other forms of income.

13. [NOTE. Naturally, no one can give an authoritative description of the structure of a possible Socialist state; the selections here presented are to be read as a means of securing suggestions concerning this structure.]

STRUCTURE OF A POSSIBLE SOCIALIST STATE

Α'

The State is to own the land and the fixed capital-or, to express both conveniently in a single phrase, the means of production, production according to economic usage being supposed to include the distribution or circulation of products.

Products in their final shape, in which they are directly consumable, the State will not own. These it will only, keep in its care, in public warehouses or magazines or stores, until the workers of all kinds send in their claims on them, which claims will be measured by the number of hours for which they have worked, and for which they will have received certificates or labour cheques or orders to be presented against goods in their final consumable form as distinct from those intermediate stages in which they would be of no use to the holders under collectivism.

The actual work of production and distribution is to be carried on as at present, namely by large groups or co-operatively, but the directing head is no longer to be the private capitalist employer. He is to be a functionary, a paid official of the State, producing under superior direction and not according to his own judgment, with less risk than at present, but also with much less chance of making a fortune. It is possible that extra merit should be more highly remunerated, but the salaries, it is understood, will be very modest indeed as compared with those of the successful men in business now. How the manager

Adapted by permission from William Graham, Socialism New and Old,

pp. 154-61. (D. Appleton & Co., 1891.)

or leader of industry is to be selected, whether by the suffrages of the workers or by the State-and in the latter case whether through the secretaries or chiefs of the industrial departments, or in the way it now selects officials for the existing branches of the public service-is a point on which collectivism does not seem to have made up its mind, though its principle, being democratic, leans to the former method.

So far we have only been concerned with the labour that results in material things, whether directly consumable, as food, clothes, houses, fuel, light, furniture, etc., or the materials of these in any of their previous stages; under production being included by the Socialists the very considerable labour of transport, as well as the connected labour of distribution. But there is still much labour in the world that is important and indispensable. There is all the labour that consists in rendering services where no material thing results or is worked into more desirable form. There is the labour-often absolutely necessary--that consists in doing some services that someone requires, the labour of the physician, the schoolmaster, the professor, the magistrate, the policeman, the soldier, the domestic servant, or, as he or she will be called in the socialist community, the domestic help, not to speak of the labour that merely ministers to amusement, such as that of the actor, the public singer, or the dancer. There is, too, the higher labour of the man of letters, of the artist, of the man of science, so far as he is an original investigator. There is the labour of the civil as well as of the military service. How is all this labour to be organized under collectivism, and particularly how is it to be paid comparatively with productive labour? As to some of it, there is no question as respects organization, as it is already carried on by co-operation or association of efforts, and is paid by the State. Such is the case with the work of the soldier, of the sailor of the royal navy, and in a less perfect degree with the labour of the civil service in general. But there is labour that cannot be carried on by association or collective effort the labour of the medical man, of the lawyer, of the literary man, of the artist, etc. These forms of labour cannot be organized collectively, but on the strict and central principle of collectivism they should be regulated, rated at their proper value, and paid by the State. All kinds of workers are to be State functionaries and paid by the State. There will be no private enterprise, because, if any were allowed, more would probably come and inequality of wealth would return from that side. A man will no longer be permitted, even if he had the means or capital, to open an educational

establishment, start a journal, undertake any private business on his own account, because the fields of education, journalism, and of all business are to be occupied by the State, and no chance will be allowed to any private competition.

Collectivism does not think it necessary to suppress inheritance; as under it there would be so comparatively little left to inherit, it assumes that there would be no fear of a return of the great inequality of the old system from that side. And it permits private property in consumable goods and in things quae non consumuntur usu, such as pictures, jewellery, houses, which may be bequeathed, but it so far restricts the right of property that no one will be allowed to make an income out of property without work. There must be no lending at interest, or advancing goods on credit to be repaid with interest, no letting of articles for hire, no leasing for rent, no private setting others at work with a view to make a profit out of their labour, though, apart from this case, there does not seem to be any objection to asking another to do a service in return for an agreed-on payment.

As to distribution, each will receive in proportion to the amount and kind of his work: the amount to be measured in time, by the number of hours of work of "average labour," skilled labour to rate at so many time average labour.

There will be no market in the Socialist kingdom, and no money. Markets and market prices are now useful to adjust supply and demand; this will be unnecessary under collectivism, because the State will do it through labour bureaus and statistics. At present markets afford the grand chances to the speculator and the cornerer, who can act on prices for their own profit but to the detriment of the public. The speculator and the cornerer, the engrosser (accapareur) of former times, will for the first time receive his effectual quietus, it is confidently believed, with the suppression of the market.

Even more important is the suppression of money, of gold, silver, and their representatives-bank-notes, bills of exchange, etc. It is easy to some to accumulate money, and thence would come back inequalities; it is not so easy to accumulate consumable goods. In the Socialist State you will get for your work or your special services the desired thing without the instrumentality of gold or silver or notes, simply by presenting your labour cheques at the 'State stores, or in some cases for your services you will get labour cheques directly from the purchaser. The only thing resembling money will be the labour cheque.

With money will go all private bankers and bill discounters, who now fulfil a useful function in lending at interest to borrowers, productive or unproductive, and in adapting supply of money to demand by altering the market rate of interest, but who would be unnecessary if there was no money, and who, by the power of extending or contracting their credit, have great power to encourage speculation, which sometimes ends in loss and ruin and crises, which would be impossible in the Socialist State.

As the State will undertake all industry, and will save the necessary collective capital, there will be no private investments. There will be no investment of money (or of labour cheques) at interest in companies' shares. There will be no borrowing by Government at interest. There will be no stock or share market any more than money market or produce market; no quotations; no buying or selling, real or fictitious. The old familiar social types, the banker, the stockholder, and the comparatively new ones, the financier, the company promoter, the speculator on the Stock Exchange, will disappear, as well as the much larger class who live on the interest or dividends of their investments.

Socialism, when analyzed, is found to embrace four main elements. The first of these is the common ownership of the material instruments of production. It is not stated precisely how this common ownership is to be brought about or exactly what form it is to take. Opinions may and do differ about the practical steps which are to be taken to secure the desired end and also about the nature of the collective organization in which this ownership is to be vested. But no one can be called a socialist in the modern technical sense who does not accept the doctrine of the common ownership of the material instruments of production. The collectivity, that is, society as a whole, is to take the place of individuals and private associations of individuals as owners of land and capital, in order that the advantages of ownership may accrue to the whole, and not merely to a part of the whole. The private receipt of rent and interest in the economic sense then ceases, for rent and interest are the remuneration of ownership.

It is said substantially all land and capital, because it is held that it is not necessary that the common ownership should be absolutely Adapted by permission from R. T. Ely, Socialism and Social Reform (6th edition), pp. 9-17. (Thomas Y. Crowell Co.)

all-inclusive. It is a weakness of the extremists to insist on allinclusiveness in common ownership, which much damages their What is necessary is that the collective ownership should become dominant in such manner as to control all other ownership and confine it within narrow limits. All the great instruments of production, like telegraphs, telephones, railways, forests, arable lands, and large manufacturing plants, must become collective property; but socialism does not imply that it is necessary to restrict individuals in the acquisition of the instruments of production on a small scale, for example, a wheelbarrow or a cart.

The second element in socialism is the common management of production. Not only are the material instruments of production to be owned in common, but they are to be managed by the collectivity, in order that to the people as a whole may accrue all the benefits of management, that is, all those gains of enterprise called profits, as distinguished from interest, and in order that the management may be conducted in accordance with the public need rather than in accordance with the advantage of private captains of industry. Production is to be carried on to satisfy our wants for material things and not for the sake of private profits. The distinction is undoubtedly a marked one. Production now ceases when those who manage it are unable to derive profits therefrom.

This common management of production means that the collectivity must furnish work for all who desire it. As the socialist state assumes the charge of production, leaving only very minor functions to individuals, it rests upon it, of course, to make the industrial society all-inclusive. How many could find employment in private service it is not easy to say. Under socialism we should expect a social organization of medical attendance and the supply of medicines, which would be simply carrying further tendencies already at work; and yet some might prefer to employ private physicians. Should the members of the socialistic society be willing to give part of their income in return for private medical services, there is no reason why they should be hindered in so doing. Similarly, religious services might be maintained by private contributions, and in the churches there could be large numbers of preachers outside of public employment. Possibly, also, room could be found for remunerative employment, of a private character, of a great many persons in the aggregate, who would concern themselves with the smaller branches of production. Yet if socialism works as well as it is