MR. HOBSON is not the least of a group shall we call them super-economists? - whose criticism of the current system of economic life and thought is rendering valuable service in the cause of truth. In the present book he gives

us his own theory of value and distribution, filling out the outline offered in the concluding chapter of an earlier volume entitled "The Industrial System." It is, of course, a theory of ideal value and distribution, for the actual system has already been made the target of his criticism. When a critic turns reformer and begins to construct, his friends may well fear for him and his adversaries thank him for giving them a better chance than ever before to hit back. And yet to return Hobson's fire in the name of science is like attacking Bergson for not being logical, since Hobson has renounced science as powerless to render a final decision in social disputes. Nevertheless, it is as a work of social science that Hobson's book must be appraised.

As such, the first striking feature it presents to the reader is the undefined and controversial nature of its fundamental concept; its value-yardstick. The author himself trusts that the idea of "organic welfare," which he takes as the standard of value, may assume definite shape in the mind of the reader by dint of many concrete cases, and that the reader, even if he disagrees with the author as to what, in any given case, the highest good of society demands, may still accept the same method of analysis and follow it in his own

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A Human Valuation, by J. A. Hobson, The Macmillan Co.,

thinking. In other words, each separate discussion must stand on its own merits as an attempt to discover what course of action will best serve the social welfare in each particular situation.

Cost, in this scheme

It includes the necesand this in turn in

Two features of this standard of value stand out sharply. It must arbitrate between good and bad desires; and it must include all the social consequences of everything it considers. Vicious consumption is thus a cost, and healthful labor a utility regardless of the pleasures of vice or the temporary fatigues of salutary work. of valuation, assumes many aspects. sary "keep" of the worker (page 44) cludes (1) the restoration of vital force spent in labor, and (2) the minimum reward necessary to induce the laborer to work a very different thing, be it noted. Cost includes also such things as the "repression of personality" (page 50), the "surrender of (his) personal judgment" (page 53) and the "degradation of (his) highest quality" (page 45). One feels almost as if the millennium had been placed on the debit side of the ledger and one were invited to produce assets enough to balance the books.

The rule adopted for the reform of society is that of distribution according to needs, and the elimination of the heaviest human costs of production by direct social control, the goal being a condition of minimum cost and maximum welfare. Hobson's ideal man is so perfectly socialized that he will work as hard as is good for him, if his reasonable wants are provided for. Further incentives gauged according to efficiency will have no effect on him. "But as human nature actually stands, this stimulus to do a 'best' that is better than the average, must be regarded as a moral 'need' to be counted for purposes of remuneration along with the physiological needs" (page 168). Thus the two conflicting standards are made one by a logical tour de force. Certainly, since social welfare is the ultimate standard, and since even for the individual the highest welfare lies in achieving the finest relationship to society, the man who demands an efficiency bonus is the farther from his highest possibilities;

he "needs

more to make him perfect.

But this is a need that can hardly be met by giving him his bonus, for that would be a reward of badness, and tend to harden him in the error of his ways. What he "needs" is not more money, but the services of a social evangelist; possibly he needs both. But any extra wage that is granted him must, in common fairness, be granted also to his comrade who is altruistic enough to do his best work even without this stimulus. It will hardly do to leave the ninety and nine permanently in the wilderness. The net result would seem to be that with men as they are, an efficiency distribution is necessary, tho it may be superimposed on a minimum wage based on need. Further than this, Hobson's effort to reconcile the two standards fails to carry conviction, and this failure is probably the most serious weakness in the book.

In assessing the costs of production the dominant note is Tarde's distinction between creation and repetition. The ultimate conclusion is that work of the first kind which is its own reward may safely be left to private enterprise, while routine production, which is costly, must be socialized. "How can the creative work of the entrepreneur be entrusted to private enterprise while the routine work of his employees is under social control?" the reader may ask. The answer is that Hobson minimizes the creative element in the entrepreneur's work. To him, creative activities are chiefly those of art, research and invention, and the field of private enterprise is correspondingly narrow.

To many readers the worst fault of the book will undoubtedly appear to be the dearth of positive suggestion as to methods of installing the millennial system, involving as it does nothing less than a moderate form of collectivism. This lack is emphasized by the author's criticisms of state socialism on the one hand and of the industrial federation of the syndicalists on the other. Even on the fundamental question of interest no definite program is offered. We are told that there is much saving on the part of the poor which costs more than it is worth, and should not be undertaken at all. Other saving is " costless" and we may be able to

get all the capital we need from such sources without paying for it. But this would only be possible if the output of industry proved more than enough for all wants, short of those whose satisfaction is useless or positively harmful. Short of that happy state, Hobson's philosophy would seem to leave room for much giving and taking of interest. However, his purpose is not to prescribe the details of the millennium, but to make men see our industrial system as he sees it and to want a truly "human " distribution as he outlines it. This in itself is probably a sufficiently arduous undertaking. The book as it is traverses a marvelously wide range of material and draws on the work of many investigators, perhaps a bit superficially here and there, but most suggestively. Part of the material may be newer to English readers than to American, especially the citations from Veblen and Goldmark and the comments on scientific management. One phase of the latter subject which the author has neglected is the defense it offers against slack work in socialized industries, through its absolute measurement of a fair day's performance. Hobson prefers to rely on a developed "social will." The book will render service in many ways, but most of all, perhaps, by showing most forcibly that there are truly economic values more fundamental than those derived from exchange or measured by it, and that it is by these more fundamental values that we must test the institutions of property, contract, and the rest of the environment in which our 66 market values" have their being. Concretely, it might make an employer (if any employer of labor should chance to read it) realize that his most important product is in the minds and bodies of his laboring force.






THE war in Europe immediately subjected the United States to severe financial strain, because this is a debtor country in the international short-time loan market as well as on account of more permanent investments of foreign capital. Unlike London, the New York money market possessed no resources the liquidation of which would serve to offset payment for the enormous volume of securities which were sold on foreign account on the New York Stock Exchange during the week preceding the outbreak of hostilities. Before these sales began, the New York money market was in its normal mid-summer position. The banks held a surplus reserve of about 26 million dollars not enough to be of much use under a system in which the required reserves are never fully utilized, but still almost as large as at the same date in the preceding year and somewhat larger than in July of 1912. Foreign balances were at a low level and a considerable amount had been borrowed in London by means of finance bills anticipating the proceeds of the cotton and grain bills of the autumn months. Past experience warranted the feeling that this practice, in moderation, involved no serious element of weakness. All former periods of severe financial strain had been primarily the result of unsound domestic conditions; and by means of temporary loans and sales of securities, additional funds from foreign sources had always been forthcoming.

The prospect of a general European war, to say nothing of its outbreak, created an entirely novel situation. Foreign lenders and investors endeavored to liquidate American as well as other securities with little regard to the sacrifice entailed. Since it was impossible to secure new loans in Europe, every maturing bill of exchange or short-time note

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