connected. A man is closely related with his fellow
workers in the trade by which he earns his living. He
is associated with his fellow church members, club
members, benefit society members, athletic association
members, and so on. It is, however, with the members
of his particular industry that he is most closely
related. This means that the association is not partic-
ularly with the craft which he exercises. A man may
be a carpenter and be more closely related to the brick-
layers who are employed in the same business unit than
with carpenters belonging to a different unit. The
unit is rather the industry than the trade. It is
becoming more and more recognized that the actual
workers in an industry must have a greater say in the
conduct of that industry than has hitherto been the
A satisfactory trade organization will include among
its management not only the organizers but also
those who are engaged in carrying out the organization,
or their representatives. Some of the foremost of the
French political thinkers believe that society is tending
to become more and more organized into trade groups,
each group organizing and controlling its own trade
the railway men controlling the railways, the spinners,
weavers, and dyers controlling the textile trades, and
PROPOSALS FOR SOCIAL RECONSTRUCTION 443
so forth. Already we find the professional classes
organized in this manner ; the lawyers actually control
the legal profession; the doctors lay down the rules
under which the medical profession is conducted.
Now there is only a difference in degree between control
and actual ownership. If all those engaged in the
building trades, that is, the bricklayers, carpenters,
plumbers, with their executive heads, actually control
the industry so that they can lay down the prices to be
charged for their product, and the wages to be paid
to the members, this amounts to practical ownership
of the industry.
The guild socialists of England have had experience
of government control and do not wish to add to that
experience. They demand the nationalization of the
principal industries of the country, but they object
to government management. They ask that the
industry be controlled by those employed in the
industry the railway workers (using the term workers
in its broad sense) controlling the railways, and mine
workers the mines, the transport workers managing
the transport industries in each of the main groups of
In America we see the development of this idea in
the suggestion of the railway brotherhoods in regard to
the future control of the American railways. They
desire a strong representation on the management
board for the railway unions, the whole system being
worked so that a good living wage can be paid to all
employees and the profits of the system used to reduce
rates to shippers.
It is outside our province at present either to praise
444 AN INTRODUCTION TO ECONOMICS
or criticize these schemes. It might be suggested,
however, that too much stress is laid by guild socialists
on the importance of the producers in connection with
the industries of a country. After all, the industry does
not exist for the sake of the workers, but for the sake
of the consumers, and it would hardly seem right to
place the consumers at the entire mercy of the pro-
ducers. Even the suggestion, true as it is, that the
producers themselves are the consumers, does not
affect the argument. If there is to be such an arrange-
ment as will remove the profit stimulus, there should
be representatives on the management who will see
that the interests of the consumers are cared for.
Conclusion In an introductory book it is quite im-
possible to give adequate consideration to the infinite
variety of suggestions for the improvement of economic
society. We have attempted to describe society as it is,
and to point out the laws under which it works. We
have admitted that the results are far from being all that
could be desired, and the realization of this fact should
in itself be a stimulus to the search for a better organ-
ization. There only remains to be said the fact that,
whatever be our present suggestions for improvement,
they are bound to change as conditions change and as
experience shows them to be unsatisfactory. It is
just as bad, however, to denounce all new schemes
as to accept blindly one panacea or another. Names,
whether they be the names of socialism, anarch-
ism, bolshevism, or individualism mean, in them-
selves, simply nothing. No one is prepared with
a satisfactory definition which really covers the whole
content of the terms. What we must seek is the
PROPOSALS FOR SOCIAL RECONSTRUCTION 445
reality behind the label, using careful scientific judg-
ment and not blind passion.
Tub thumping at street corners will lead us no
further than ignorant rhetoric in newspapers. In
order to amend our society we must first understand
it. Our study of economics should serve as a basis
upon which to build a real knowledge of the economic
structure of the present civilization. It rests with the
student to fill in the many and deep gaps which have
been left and to apply his knowledge to the task of
so reconstructing society that the evils of which we
are conscious shall be things of the past.
1. GENERAL WORKS
MARSHALL, ALFRED. Principles of Economics. Seventh
edition. New York.
SEAGER, HENRY. Principles of Economics. Second edition.
New York, 1917.
SELIGMAN, E. R. A. Principles of Economics. Seventh
edition. New York, 1916.
TAUSSIG, F. W. Principles of Economics. Second edition.
New York, 1915.
ELY, R. T. Outlines of Economics. Third edition. New
GIDE, C., AND RIST, C. History of Economic Doctrines.
New York, 1915.
MARSHALL, WRIGHT, AND FIELD. Materials for the Study of
Elementary Economics. Chicago, 1916.
2. ECONOMIC HISTORY
BOGART, E. L. Economic History of the United States. New
COMAN, KATHERINE. The Industrial History of the United
States. New York, 1910.
HOBSON, A. The Evolution of Modern Capitalism. New
CUNNINGHAM, W. The Growth of English Industry and
Commerce. Cambridge, England, 1912.
INNES, A. D. England's Industrial Development. London,
448 AN INTRODUCTION TO ECONOMICS
OGG, F. A. The Economic Development of Modern Europe.
New York, 1916.
3. MONEY AND BANKING
JEVONS, W. S. Money and the Mechanism of Exchange.
WITHERS, HARTLEY. The Meaning of Money. New York,
HOLDSWORTH, J. T. Money and Banking. New York, 1917.
WILLIS, H. PARKER. American Banking. Chicago, 1916.
The Federal Reserve System. New York, 1915.
CONWAY AND PATTERSON. The New Bank Act. Philadel-
4. INTERNATIONAL TRADE
BASTABLE, C. F. The Theory of International Trade. New
HOUGH, B. OLNEY. Ocean Traffic and Trade. Chicago,
Practical Exporting. New York, 1918.
HOBSON, J. A. International Trade. New York, 1904.
TAUSSIG, F. W. Tariff History of the United States. New
Some Aspects of the Tariff Problem. Harvard
University Press, 1915.
ESCHER, FRANKLIN. Elements of Foreign Exchange. New
PATTERSON, E. L. S. Domestic and Foreign Exchange.
New York, 1917.
WITHERS, HARTLEY. Money Changing. London, 1913.
5. BUSINESS AND INDUSTRIAL ORGANIZATION
VEBLEN, THORSTEIN B. The Theory of Business Enterprise.
New York, 1904.
DIEMER, HUGO. Industrial Organization and Management.
HIRST, F. W. Monopolies, Trusts, and Cartells. London
ELY, R. T. Monopolies and Trusts. New York, 1912.
CLARK, J. B. The Problem of Monopoly. New York, 1904.
6. LABOR PROBLEMS
ADAMS, T. S., AND SUMNER, H. Labor Problems. New
WEBB, SIDNEY AND BEATRICE. History of Trade Unionism.
New York, 1911.
Industrial Democracy. New York, 1902.
COMMONS, J. R. History of Labor in the United States.
New York, 1918.
HOXIE, R. F. Trade Unionism in the United States. New
COLE, G. D. H. Self-Government in Industry. New York,
7. DISTRIBUTION AND SOCIAL REFORM
VEBLEN, THORSTEIN B. The Theory of the Leisure Class.
New York, 1809.
HOBSON, J. A. Work and Wealth. New York, 1914.
GEORGE, HENRY. Progress and Poverty. New York, 1911.
KIRKUP, THOMAS. The History of Socialism. New York,
ENSOR, R. K. Modern Socialism. New York, 1907.
MARX, KARL. Capital (trans.). London, 1906.
MACDONALD, J. R. The Socialist Movement. New York,
SNOWDEN, PHILIP. Socialism and Syndicalism. London.
ELTZBACHER, PAUL. Anarchism (trans.). New York,
450 AN INTRODUCTION TO ECONOMICS
8. PUBLIC FINANCE
ADAMS, H. C. The Science of Finance. New York, 1899.
BASTABLE, C. F. Public Finance. Third edition. New
PLEHN, C: C. Introduction to Public Finance. New York,
DEWEY, D. R. Financial History of the United States.
New York, 1915.
SELIGMAN, E. R. A. Essays in Taxation. New York, 1913.
Collective bargaining, 379
Accommodation loan, 202
Commercial bills, 283
Commercial loans, 203
Agents of production, 55, et seq.
Communal tillage, 92
Agricultural stage, 18
idea of, 32
American Federation of Labor, 376
meaning of, 33
Competitive system, 34-38
Conditions of labor, 381
Balance of trade, 265, 301
Consular invoice, 278
Bank, 191, et seq.
Consumer's surplus, 139
debtor and creditor, 200
Co-operative production, 398
Bills of lading, 279
Corporations, 85, 88, 106
Craft union, 374
Bonds, 86, 87
Creative instinct, 352
Bonus systems, 367
Credit instruments, 191
Crises and panics, 229
Currency, elastic, 186
future element in, 310
fluctuations in demand for, 185
inflation of, 187
Call loan system, 217
Canadian banking system, 243
United States, 180
Capital, 51, 61, 95, 98
flow of, 147, 306
Deductive method, 8
Cattle as money, 162
Demand, curve of, 137
Chartered companies, 81
elasticity of, 129, 158
Check payments, 269
Clearing house, 197
law of, 133, et seq.
Coinage, 171, 172
Department stores, 89
debasement of, 172
Dependent period, 16
Deposit reserves, 195
system, 192, 194
Diminishing utility, 122
rate, 221, 230
Division of labor, 19, 61-63
Documented draft, 280
Domestic exchange, 269, et seq.
Dominating instinct, 353
Dose of capital and labor, 69
Draft payments, 271
Duties, protective and revenue, 288
Dynamic civilization, 22
Economic freedom, 27, 37
Economic functions of government,
407, et seq.
Economic history, 15
Economic laws, 0-7
Economic problem stated, 25
Economic unit, 19
Economics, defined, 2, et seq.
Effective demand, 126
Elasticity of currency, 235
Elasticity of demand, 129
Equality of sacrifice, 402
Equation of indebtedness, 265
Excess profits, tax, 405
Exchange, factors of, 133-136
mechanism of, 249
rate of, 284
Factory organization, 103
Federal Reserve Act, 224, et seq.
Federal Reserve bank notes, 237
Federal Reserve notes, 231
Fiat money, 187
Finance bills, 284
Foreign exchange, 273, et seq.
Foreign payments, method of, 276
Gild socialism, 441
Gild system, 27, 96
Gold, 181, 182
causes of, 286
shipments, cost of, 274
Government ownership, 412, et seq.,
Gresham's Law, 175
Holding company, 113-116
Hours of labor, '382
Index numbers, 188
Inductive method, 10
government regulation of, 27-28,
location of, 61
Industrial stage, 13
Industrial Union, 373
International, definition of, 254
Iron law, 359
I. W. W., 378
Joint-stock companies, 84
as a commodity, 34, 357
definition of, 355
division of, 19, 61-63
organizations, 370, 374
Law of comparative cost, 256
Law of demand, 136
Law of diminishing returns, 73
Law of increasing returns, 71-72
Law of supply, 137
Letter of credit, 278
Low wages, a cause of poverty, 345
Margin of cultivation, 324
Marginal utility, 123
Market, definition of, 143
Metallic money, 169-170
Mint par, 273
Money, 162, et seq.
and price, 181
as a measure of value, 167
Monopoly, 80, 111, 116-118, 146,
151-156, 340, 410
Monopoly price, 157-159
Nation, definition of, 254
National banking act, 207, et seq.
National bank notes, 210-213
National system, 298
Necessities, physical and conven-
tional, 23, 24, 40
Normal price, 144
Organizing instinct, 353
Partnerships, 79, 82
Pastoral period, 17
Payment by tale, 174
Perverse elasticity, 212
Piece wages, 365
Poverty, causes of, 341
Price agreements, 107
Price, definition of, 127
Price, equation of, 184-185
measurement of, 188
par and investment, CC9
stability, 149, 317
Producer's surplus, 140
Production, 28, 49 et seq., 66, 101,
Profits, 66, 329
Profit sharing, 369, 391
Progress, definition of, 24
Progressive taxation, 405
Proportional taxation, 405
Protection of young industries, 292
Protection and cheap labor, 302
Protective taxation, 287
Real wages, 362
Regulated companies, 80
Rent, 322, 325
Reserves, control of, 220
cost of, 240
under National banking act, 213-
Revenue taxation, 287
Revolutionary Socialism, 436
Right to organize, 372
Right to work, 351
Rochdale pioneers, 395
Satisfaction, present and future, 124
Scientific management, 64, 104
Selling bureaus, 110
Shop steward, 378
Silver dollars, 179
Socialism, 426, et seq.
objections to, 440
Society dynamic, not static, 424
control of, 318
Standard of living, 361
Standard wage, 380
State Socialism, 438
Stock exchange speculation, 314
Stocks and shares, 312
Supply curve, 140
Supply, demand and price, 129
law of, 137, et seq.
Taxation, equality of, 401
revenue and protective, 287
Thriftlessness, a cause of poverty,
Time wages, 364
Token money, 177
Trade acceptance, 250
Trade, early, 78
nature of, 247
union methods, 384
Transport, cost of, 264
Union label, 387
United States Shipping Board.
Utilities, 44, 52, 53
Utility, diminishing, 122
Value, definition of, 120
in use, 163
Velocity of circulation, 183-184
Wages, iron law of, 358
and labor cost, 302
method of payment, J5G4
War, lessons of, 415
Waste, 101, 432
Wealth, causes of, 335
definition of, 42
incentives to, 348
W T ork, incentives to, 351
M 000027415 9