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are now in a position to discuss the practical working of capitalist industry. We start from the assumption that the processes of production are undertaken for the purpose of ministering to the needs of the people. Clothes are made to clothe, houses to house, food preparations to feed; the products of foreign lands are imported to add to our comforts. The test which must be always imposed upon any system of production is: Does it fulfil those ends? And that must be supplemented by another test: Does the system under consideration do its work economically or wastefully? Let us apply the second test first of all.

We shall arrive at clear ideas on this point most readily and conveniently if we consider how various economic classes gain an income, and we shall deal with the owner of land—the rent receiver—first of all.

Income from land is not of the nature of reward for services rendered. It used to be. Land was granted by the sovereign to his captains who, in return for their possessions, rendered military service to the state, and in addition paid certain taxes so as to provide the king—who was the embodiment of the state—with what income he required. The land was then held in trust for the state,