TUNING UP THE INDUSTRIAL SYSTEM.

LIE is a bold man who claims to be original in the realm

a economics, and Mr. Martin's great discovery proves to be familiar enough. It is true that there is reshuffling and

restatement, the diagnosis of one economist is followed by the remedy of others, but all this is far from amounting to " a new theory worked out along rather unusual lines." The first contention takes the form of a presentation of Mr.

Hobson's well-known theory of over-production and under- consumption as an explanation of periodical trade depressions.

By reason of " a simple mechanical defect," says Mr. Martin, industry under normal conditions of progress cannot sell all it produces at prices making production " worth while."

In order to indicate this simple mechanical defect, Mr. Martin parts company with Mr. Hobson and joins himself to the currency and credit reformers, and tells us that if it were

possible tO increase the quantity of money at a rate exactly sufficient to buy goods coming on the market, trade crises need never occur. He recognizes that numerous other people desire a more scientific regulation of the volume of money, but they are concerned with the stabilization of prices, while Mr. Martin wishes " to maintain under all circumstances effective demand for the whole product of industry."

That the connexion between the two ideals is remarkably

close all will agree, and, indeed, Mr. R. G. Hawtrey, in his Monetary Reconstruction, alleges that unemployment is due to

a maladjustment of the monetary machine. All that Mr. Martin is advocating, in fact, although he varies his terms, is a contraction and expansion of credit according to the guidance offered by an index price number. But surely it must be clear to everybody that when such an index number remained steady, it would not inevitably follow that all is well with each of the particular industries represented by the selected

commodities. It could easily be that low prices in one direction would be offset by high prices in another, if the index were truly representative. As we have seen, to give

a simple example, it is quite possible under modern conditions of trade to have a boom in coal and a slump in cotton goods. Indeed, unless we are to have a sort of universal price index number universally accepted, it is difficult to see how the fluctuations in international purchasing power are to be controlled, and it is the variation in this factor which chiefly

affects England as a foreign trader. Mr. Martin, however, does not work his theory out into practice and, incidentally, he gives no statistical evidence for his belief in the much challenged explanation of over-production as the cause of trade depressions. He prefers to rely upon a description of

the flaw, working in a simplified community, the principal example being the Children of Israel gathering manna. Under such hypothetical conditions the flaw works beautifully, but there is not a close analogy between a simplified community and the highly complex civilization of to-day.

Mr. Kidd has something really fresh to say. He sees, as we all do, that many of our industrial problems are caused by the elimination of the human element brought about by the extensive use of machinery. In the olden days master and man were in closer contact and each knew the other for what he was—a human being like to himself. It is obvious that in these days, when employees of a single concern are numbered by thousands, the old relations of' master and man can never return, but an effective substitute would be found if we could

bring a common mind to the consideration of any industrial difficulty. This, says Mr. Kidd, is impossible, unless we have a common appreciation with regard to the function of capital. In spite of co-partnership and profit-sharing schemes, the understanding by the worker of this function is very limited,

and it may truly be said that many of his leaders need con- siderable education in the practical difficulties of business. The stage has been too long occupied by the wicked capitalist and the righteous worker, or, it may be, the other way about.

Mr. Kidd pleads for realities. Since it is evident, he argues, that at our present stage the standard of living does not enable every workman to be also a capitalist, what is: wanted is an amendment of the law making it possible for. Trades Unions not only to invest, but to be assured of their holdings in the companies in which they may desire to become shareholders, and—where their investments are sufficient— to make their representation in the management a certainty. We greatly doubt whether those who direct Trade Unions would be at all disposed thus to participate in the risks of industry and certainly not in their present flush of power. But as many of the Socialistic ideas collapse through dis- illusionment, there may well be increased opportunity for advocating such a partnership as Mr. Kidd suggests. If converts are to be secured, much sweet reasonableness will have to be exercised, and we therefore must regret some of the criticisms of Socialists in a book often attractively -written. We approve of hard hitting with regard to Socialism, but knocking down the Aunt Sally type of Socialist is poor sport and could well be left out of a volume containing shrewd criticism of economic fallacies.

We must now leave mere reformers to refer briefly to Mr. Hook, who is no apostle of compromise. Here are fierce accusations and partial recantations, exaggerations and subsequent modifications, and the exact outcome of it all we cannot profess to know. We gather, however, that unem- ployment is caused by capitalism, and would be removed if only we would adopt a brand of Socialism specially designed to eliminate the imperfections of State ownership. Well, it is very pleasant to think that through a change of our social system, Germany and other countries would cease to under- cut us and, in a general trade revival, orders would flow in from all parts of the world. This must be the result antici- pated, unless Mr. Hook believes that we can maintain our population upon internal resources, if idle non-producers were removed. He is certainly opposed to emigration. It is regrettable, but in our opinion Mr. Hook's cause and cure