The unreality of the whole theory becomes obvious when we give it the wider interpretation.The excuse of 'friction'becomes insufficient.That may be applicable when the error is simply due to a permissible simplification of the data;not when the data are themselves wrongly stated.Ricardo,we have seen,had virtually made an assumption as to the social order.The labourers,we may say,are a structureless mass;a multitude of independent units,varying in numbers but otherwise of constant quality;the value of labour was thus dependent simply on the abundance or scarcity of the supply,and the labourers were assumed to be wholly dependent for support upon the capitalist.
The formula applicable upon such a hypothesis might be correct so far as the data were correct.They would require a complete revision when we consider the actual and far more complex social state.Every difference of social structure will affect the play of competition;the degree in which population is stimulated or retarded;and the general efficiency of industry.A lowering of wages instead of producing an increase of profit and an accumulation of capital may lead to social degeneration,in which labour is less efficient and the whole organism is slack and demoralised.Conversely,rise of wages may lead to a more than corresponding increase of production.The effect,again,of accumulation of capital cannot be expressed simply by the increased demand for labour.That seems plausible only so long as capital is identified with money.It really implies an alteration of the industrial system and conditions under which the bargain is made.It may,again,be true that in any particular trade,capital will be attracted or repelled by fluctuations in the rate of profit;but it is by no means clear that we can infer that a general rise or fall of profit will have the same effect upon accumulation generally.For such reasons,as I take it,an investigation of the laws of distribution would require us to go beyond the abstractions about 'supply and demand,'however appropriate they may be to immediate oscillations or relatively superficial changes.No such short cut is possible to a real sociological result.'To follow out all the causes or conditions involved would be,'as Professor Taussig says,(131)'to write a book not only on distribution but on social philosophy at large.'
Mill,and especially Cairnes,were sensible of the need of taking a wider set of considerations.Still no satisfactory conclusion could be reached so long as it was virtually attempted to solve the problem by bringing it under the market formula,instead of admitting that the play of market is itself determined by the structure behind the market.You have really assumed an abnormally simple structure,and erroneously suppose that you have avoided the necessity of considering the structure at all.
The wage-fund controversy brought out the inadequacy of the method.One result has perhaps been to encourage some writers to fall back into simple empiricism;to assume that because the supposed laws were not rightly stated there are no laws at all;that the justice of the peace can after all fix wages arbitrarily;and that political economy should shrink back to be 'political arithmetic,'or a mere collection of statistics.The more desirable method,one must hope,would be to assign the proper sphere to the old method,and incorporate the sound elements in a wider system.
VII.SOCIALISM
Meanwhile,the over-confidence of the economists only encouraged Socialists to revolt against the whole doctrine.It might be a true account of actual facts;but,if so,demonstrated that the existing social order was an abomination and a systematic exploitation of the poor by the rich.The 'iron necessity'was a necessity imposed by human law --not,that is,a legitimate development of social order,but something imposed by force and fraud.In some directions Mill sympathised with such doctrines.He professed to be in some sense a 'Socialist,'though he was not acquainted with some of the works published during his lifetime.He makes no reference to Marx or Lassalle and other German writers.Possibly a study of their writings might have led to modifications of his teaching.To him the name suggested Owen,Fourier,St.Simon,or his friend Louis Blanc.(132)Socialism,as understood by the early leaders,commended itself to Mill,because it proposed the formation of voluntary communities,like Fourier's Phalansteries or Owen's New Harmony.They are capable of being tried on a moderate scale,with no risk to any one but the triers.(133)They involve simply social experiments which could only injure those who tried them.But a different view was showing itself.Cairnes,commenting upon his master's so-called Socialism,says that the name now implies the direct interference of the state for the instant realisation of 'ideal schemes.'(134)He objects to this,and therefore,by anticipation,to 'state Socialism.'Here Mill's position is ambiguous.In the first place,while agreeing with the aims of the Socialists,he 'utterly dissents from the most conspicuous and vehement part of their teaching,their declamations against competition.'(135)'Where competition is not,'he adds,'monopoly is';and monopoly means 'the taxation of the industrious for the support of indolence,if not of plunder.'
