It is therefore like a fiery steed which begins at a trot, is whipped up into a gallop, takes the bit between its teeth, and in the end collapses in a ditch, where it lies until it gets its wind or is mended, and as soon as it is on its legs again goes through the same processes, leading to the same collapse. That is a plain and sober description of the inevitable working of competitive Capitalism. It can do no other. When competitive it scrambles, when combined it exploits.

Nothing reveals the inadequacy and inefficiency of Capitalism more clearly than a comparison between it as a machine and any of the machines used in production. If the machines and mechanical contrivances which labour uses in production were as badly constructed, were as unskilfully used, and broke down as frequently as the economic system of Capitalism, production would still be in a primitive condition, industry would still be hand-work, and agriculture would be the only considerable occupation of our people. It is not that Capitalism breaks down now and again, but that it never works. Let us imagine a machine built for the making of boots, which is guaranteed to start, to gather speed which the workman cannot control, to become groggy, to collapse, to be mended by engineers, to start again and then go through the same process. What manufacturer would ever think of building up his business on such a machine? Into what a condition would the general use of such contrivances bring the boot and shoe trade? And yet, such a machine is the model of Capitalism as a working system.

It is said that unemployment is due to various causes. There is always the personal factor. Labour is employed so long as its product is not less in value than some marginal utility or cost. That

means that labour must have a certain standard of efficiency, and if, owing to age, or infirmity, or economic character (supposing, for instance, it has been deteriorated by drunkenness) it does not come up to that standard, it either cannot be used at all, or used only in a limited way. The personal factor has, however, an insignificant influence upon what Society knows as the recurring crises of unemployment when neither labour nor capital is in demand though their products are in demand for use if the economic power to purchase them were also available.

Unemployment can also come from a failure in nature, great droughts, destroyed harvests and such like, and, from what has the same economic effect, widespread destruction owing to war. Then the channels of commerce are destroyed and their economic levels are altered so that the flow along them is interrupted. Then there is much poverty, much work requiring to be done, but an insufficient power of economic demand and an insufficient freedom in exchange to permit te work being done. Under all these circumstances, Society has to go through a troublesome time of readjustment during which the system is out of order. The organization of world supplies, however, has vastly diminished the evil effects of a natural shortage by pouring in the good local harvests to adjust the shortage of the poor local harvests. We work more and more on world supplies except where the follies of statesmen erect new barriers to the natural flow of commerce. As to the destruction of war, though it is largely responsible for the intensity of the unemployment which is rife whilst this is being written, and though the blinded passions of people and the in

competence and cowardliness of statesmen have added to it by policies which are an offspring of the war and augment the evil economic consequences of the destruction, the infrequency of war means that it is only an occasional cause of a phenomenon which is universal and which appears with almost the mathematical regularity of a comet or a new moon.

Unemployment may also come from temporary and unavoidable breakdowns such as happen in the best equipped factories. A change in fashion or in taste affecting demand; a reorganization of any of the processes of production by the introduction of new machinery, or a different co-ordination of labour, reducing waste perhaps; a supplanting of one form of production by another like the transference of home work to factory work; an increase in the cost of labour altering its marginal utilities, and throwing certain types of labour over the border line which divides economical from uneconomical labour-all these may temporarily cause unemployment. But again, these are continuous and insignificant wastages, and they do not burst out into a crisis periodically. They do not cause, and indeed contribute practically nothing to, the social phenomenon of a cyclical state of unemployment of efficient labour at a time when its products are wanted if they can be purchased.

Finally, the machine of production and distribution can perhaps never be so finely adjusted that one hundred per cent. of the labour available will always be employed. There must be a small margin of perhaps two or three per cent. temporarily out of work. Once more, however, this is not the problem of unemployment as we know it under Capitalism.

I repeat, unemployment crises are inherent in the industrial system of Capitalism, and are a proof that Capitalism as a system of production and distribution cannot run steadily and smoothly, and therefore cannot be accepted by Society as a satisfactory method of supplying the needs of the people.

Just as under any satisfactory system the surplus profits of industry will be used collectively to improve the wealth enjoyed by all the individuals of a community, so, under such a system, the necessary waste of unemployment will be a cost upon the industry just as a renewal of its capital is a cost upon it. To-day, Capitalism provides that its temporarily unused margin of capital will be a charge upon production because it is its proper interest to make such provisions. The deterioration of an unused machine which is kept for future contingencies finds a place in the business expenses. The deterioration of an unused man is not taken into the accounts at all. It ought to be. Industry should provide for its inevitably unemployed margins. Under Socialism this cost will be comparatively small because the unworkable machine of Capitalism will be improved out of existence, and by the co-ordination of production, distribution and demand-by making supply not a haphazard but a scientifically calculated thing -the crises of unemployment will disappear. In any event, the assumption that a person out of employment is nobody's man except, in extremity, the Guardians', is going the way of many ideas which were prevalent before we reached the conception of production and distribution as communal functions and interests, and no scheme of industrial organization, except that which I have been outlining, will allow the admitted responsibility for the

workless man to be taken up with safety to the community. The system of insurance is a halfway house. It divides the responsibility between three interests, the man's own, that of the capitalist employer, and the State's. Its working necessitates large reserves of inefficiently used capital and its use must always be very limited both as regards the help given and the time for which it is given. We need a much simpler and more scientific system. Insurance is a makeshift to cover capitalist risks by imposing burdens on wages which do not fall properly on wages at all. The economic margin of unemployment and the trade risks to labour which any industry requires should be a charge upon the finances of the trade.

THE DISTRIBUTIVE SYSTEM

Thus far I have been discussing the distribution of wealth, and I now turn to the distribution of goods. As regards the mechanism of distribution of goods, Socialist ideas, though quite well defined in general outlines, can only be tentative in some important details. There are so many unknown and undiscoverable influences in social advance, that no Einstein can appear in the realm of social science. It is not a mathematical but an experimental science, and ought unblushingly to confess that the policy of "wait and see" is to it more than a silly catchword for the delectation of the easily pleased. Working on hypotheses and studying results are its methods. It turns past experience into a guide for future improvement, and in the process it watches vigilantly for every influence that shows itself. Its mind may be on ideal things,