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Rh erased from the record of capitalism before it can claim to have produced a system which is really worthy of what is called civili- zation. If capitalism is to continue it will clearly have to remedy this evil and others which have already been mentioned. The leading spirits among those who are interested in its maintenance are fully aware that these things have to be remedied. In fact the change of attitude on this point among employers in recent years almost amounts to a revolution, though there are still too many obstructive exceptions. Associations formed, for the face- to-face discussion of these points by employers and employed are already common, and, on the side of the employers, it is certainly true that (perhaps under the spur of self-interest) they are earn- estly trying to repair the weaknesses in the system which they have to work. Their difficulty is to know what it is that labour really wants; what concessions can be made which will induce labour to work the capitalistic system with hearty cooperation. Improved conditions, higher wages, and greater influence on problems of management, the best of them are more than ready to grant if only they can secure in return for them active work during the time when the manual labourers are engaged on their job, and the renunciation of the policy of the restriction of out- put. It would appear from the utterances of those who consider themselves entitled to speak for labour, such as Mr. Sidney Webb and Mr. Cole in England, that labour has made up its mind that it is not going to work in future to put profits into the pockets of private employers; in other words, it is determined to end the capitalistic system. Whether the rank and file of manual workers have really adopted this extreme view may very well be doubted, but they are extremely likely to adopt it unless they can be granted greater security. This is certainly a demand on the part of the manual worker which will have to be met by capitalism if it is to survive. The anxieties of the ordinary manual worker, who does not know how soon he may be told that he is no longer wanted at his job, should always be present in the minds of the employers, and if the schemes now being mooted by which every industry should make itself re- sponsible for its own unemployed can be brought into practical effect, there can be no doubt that one of the worst evils of capitalism will have been abolished.

Another reform on which the manual workers seem likely to insist is a clearer statement of the costs and profits of in- dustry. At present the accounts published by joint stock com- panies usually only succeed in making darkness visible. Labour has so often been misled as to the capacity of industry to stand concessions to it, that employers will be well advised to produce a more scientific system of accounting, by which they can be able to prove to demonstration what the true costs of industry really are, how much is required for depreciation and upkeep, how much goes to labour and management and how much is taken by capital.

As to the sordid ugliness with which capitalism is usually charged, everyone who has visited an English north-country in- dustrial town must admit that the system in its craving for cheap production has ignored many things which make life tolerable for those who work for it, and has therein shown only another example of short-sightedness for which it now has to pay. Even on this point, however, one feels a certain doubt whether any alternative scheme of state socialism or guild socialism would provide the community with the necessary leisure and surplus wealth that could be devoted to the beautification of the country which adopted it, as is too usually assumed. If every- body is to have a nice house and live in pleasant surroundings, production has to be organized so as to be not only comfortable for those who are engaged in it, but efficient in the matter of out- put. And, on this subject, as has already been shown, there is good reason to doubt the efficiency of alternative schemes.

Inherited Wealth. Another of the weaknesses of the capitalistic system is the power that it gives to owners of wealth to continue to accumulate it and pass it on to their heirs and assigns, with the result that a class is created which is able to live in great luxury on the past efforts of their ancestors, relatives, or friends, without making any effort to justify their own existence. There

can be no doubt that the existence of these huge fortunes, accumulating and being passed on, are a source of great bitter- ness among the classes which do not possess them. Much might be done to alleviate this bitterness if all the owners of this wealth, and not only a certain number of them, were careful to make a more public-spirited use of it. It is true that they owe it to the work and exertions of others who have passed on this wealth to them, but this is only partially so. A large part of it they really owe to the existence of an ordered society providing a market and outlet for the efforts of those who accumulate the wealth and a machinery for investing it and reinvesting it, and so increasing it from generation to generation. From this point of view a large part of their great wealth they owe to the community in which they live, and the assumption that it is their own to do what they like with is a dangerous one which will cost them dear if put into practice too logically. It is possible, however, that this evil may be cured, at least to a great extent, by the develop- ment of death duties and inheritance taxes, which seems likely to be an increasingly important part of the fiscal arrangements of civilized nations in time to come. Here again, however, there is danger that if this remedy is exercised too freely the process of accumulation which is required to provide the community with capital for fresh enterprise may be dangerously checked. For the evil of huge fortunes is balanced by the fact that it is largely from them that accumulations of new capital on a great scale are effected; and it is highly dangerous to diminish them by the use of the fiscal weapon, before the duty of saving and accumulating has been effectually brought home to those classes of the community which are now accustomed to spend all that they earn or receive.

Need of Extended Capitalism by Sailings. The efforts made in England and America and elsewhere, during the war, to try to induce everybody to save for victory have had effects which astonished those who were most closely acquainted with the thrift - lessness of ordinary human nature (see SAVINGS MOVEMENT). Long before then the cooperative movement had already devel- oped a new and very interesting form of capitalism among the wage-earning classes. Cooperation is sometimes described by its own champions as an effort directed to the overthrow of private capitalism, but it is in fact merely a variation of it. Cooperation assembles the shillings and pounds of the wage-earners and puts them into productive and distributive industry, especially the latter, with marked success. The division of the profits is effected on different lines, those of the retail shops being divided among the purchasers in accordance with the amount of their purchases. So far its successes have been won on a somewhat narrow field, but there is no reason why they should not go ahead at a greatly accelerated pace as the higher earnings of the workers give them a larger margin available for saving. If this tendency could be continued, if good work, rapid production, and high wages could be accompanied by individually small accumulations of capital by the great mass of the wage-earners, and if they could thus be induced to become not only wage-earners but themselves also capitalists, and if, at the same time, the large capitalists could be induced to see that the use they make of their incomes and of their leisure is a matter which concerns the community as well as themselves, -then it might be possible to arrive at a state of affairs in which every worker was a capitalist and every capitalist a worker, and capitalism, shorn of many of its worst evils, might work miracles of industrial production.

Authorities. Gustav Cassel, The Nature and Necessity of Interest (1906); Prof. Shield Nicholson, The Revival of Marxism (1920); Philip Snowden, Socialism and Syndicalism (1913) ; J. Ramsay Macdonald, The Socialist Movement (1911); G. D. H. Cole, Self- Government in Industry (1917) ; Reckitt and Bechhofer, The Meaning of National Guilds (1918, 2nd ed. 1920); Harold Cox, Economic Liberty (1920) ; H. Withers, The Case for Capitalism (1920) ; Gerald Gould, The Coming Revolution in Great Britain (1920) ; Hugh Dalton, The Inequality of Incomes (1920) ; J. G. Brooks, Labor's Challenge to the Social Order (1920). (H. W.)

CAPORETTO, BATTLE OF. The Italian offensive 1 of Aug-Sept. 1917 had reduced Boroevic's armies to the limit of resist-

'See generally under ITALIAN CAMPAIGNS.