money and set against one another. But the full ethical life of man has other values not capable of such estimation, and before these economics has to retire. Yet even in retiring it cannot deny their existence nor even the effect they may have on the simple exchanges of the market. It is for this reason that the student of economics must necessarily move forward to other categories, and that if he rests content with his own, they will themselves exhibit their own insufficiency by failure even in what would seem their proper sphere. The inadequacy of economics has been generally recognized, and has led either to unsuccessful attempts to extend its scope and bring all the facts of human choice under its cognizance, or to somewhat uncertain efforts to define its province more narrowly. This uncertainty cannot altogether be avoided. But the most essential point to remember is that economics deals with exchange. So long as men want a quid pro quo, the basis of economics is there. Where activity is its own reward and there is no real thought of personal gain, economics cannot find a foothold: the mart could not be permeated with such ideas and remain a mart. It is consequently true that simply the noblest elements in human character must present themselves to the economist as influences that disturb or baffle his calculations. It is not true, however, that economics deals with men so far as they are moved merely by natural selfishness. Wherever a reward is demanded for labour, wherever commodities are only given away for a fair return, it can shed the light of its analyses: it does not matter whether the gains thus made are spent on private luxury or given to hospitals. The 'business spirit' and the 'business life' alone interest the economist. But these need not be and

are not purely egoistic. There is no prospect that humanity can safely dispense with them at any rate till its conquest over material nature is far more complete and triumphant than now.

For in the face of the severe criticism that has been dealt out to Manchester' economics by generations of critics, even in later days by the economists themselves, it seems worth asserting that there remains something fundamentally true in Adam Smith's notion of an 'invisible hand' which guides the operations of men bent on private advantages in such a way that the public interest is secured.1 The competition of different sellers or buyers in the same market may appear to the superficial observer a mere scramble for profits to a less hasty examination it reveals itself as a rapid and effective way of supplying people with what they want: often, too, of suggesting the wants to be supplied.2 Where the machine may be most severely criticized is in its ready response to needs of an ignoble kind. Bad art, shoddy clothing, hideous furniture may become the fashion, and the modern international market is not controlled by guilds of conscious artists who could hold out against such corruptions. But the cry that has been raised of the death of craftsmanship, and the disappearance

1 'As every individual endeavours as much as he can both to employ his capital on the support of domestic industry and so to direct that industry that its product may be of the greatest value: every individual necessarily labours to render the annual revenue of the society as great as he can. He generally indeed neither intends to promote the public interest, nor knows how much he is promoting it. By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this as in many other cases led by an invisible hand to promote an end which was no part of his intention.'-Adam Smith, Wealth of Nations, i. 421 (ed. Cannan).

2 See Mr. Diblee's entertaining book The Laws of Supply and Demand.

of beauty under the rule of the economic man, is mere blindness. The ordinary home has access now to stores of beauty that were absolutely hidden to it before the Industrial Revolution. The standard of life has not risen more surely in material things, food, clothing, and housing, than in intellectual and artistic matters: and though it is true that all this advance has not been secured by mere laisser faire individualism, it would scarcely have been. possible without the rapid exploitation of new inventions and discoveries, and the consequent increase of wealth under the influence of economic competition. Those who decry Manchester most are the first to use the benefits that Manchester has conferred upon the world: and those who attack-very fairly—the inequalities and injustices of the present economic system are not always alive to the fact to which I shall revert later, that problems of exchange must somehow be faced and solved, unless human nature is completely renovated, and that any solution must satisfy the 'business instinct' and the 'business desires' whose existence is not the fault either of the present system or of those who expound it in textbooks. Man is something more than a bargainer, seeking the highest return for his labour: but he is that too sometimes, and it is not wholly bad that he should be.

§3. The Legal Subject

THERE is no need therefore to depreciate the importance of exchange and bargaining, or of the science that studies it. The calculating prudence of the successful merchant may do more for humanity than the amiable folly of many philanthropists: and through the tug of war, in which man seems most narrowly confined to his individual interests, the welfare of society

generally may be secured. Association on the terms of buyer and seller is still association, has in it a true element of co-operation, and is not fairly to be discussed as pure anarchic competition. Yet the uncertainty what motives and actions can be classed as economic and what cannot, is itself the index to the inadequacy of economics taken by itself. There continually breaks through the mechanism of exchange a spirit of loyalty and self-sacrifice which does not seek a reward beyond itself, and has no thought of a bargain. Men find themselves unable to realize their powers and aspirations merely in the economic structure of the former. They have various interests not satisfied by their work as producers for the market, nor by the enjoyments that the market can offer them in exchange. These further interests need society for their expression, but not society as the economist studies it: other forms of human life and intercourse in which motives that the economist can at best consider only indirectly, as they bear on the processes of exchange, here freely unfold their riches.

In this wider view of society to which we must now move, the first stage is that at which the terms of law are most readily applicable. From the economic man we pass to the legal subject. Here is to be considered first how law supplements and guides economic machinery, secondly its wider task and province. In the first place then laws may be said to exist in order that the peace and security requisite to the production of wealth may be guaranteed. Even when the freest competition exists, where the socialist would detect complete economic anarchy, the turmoil of the market is possible only if direct physical violence has ceased to be the accepted welcome paid by one gentleman to another.1 The

1 When the first question put to a stranger is 'Are you a pirate?'

fundamental work of law is to give decent people the chance of earning their living quietly, and till recently there were not wanting thinkers who mistrusted every activity of the State that went beyond these simple necessities.

But the law not only has to make a market possible, it often has to interfere in the market, that the final cause of its existence may be realized in spite of itself. For example, beyond a point which no one has ever succeeded in fixing with certainty, exploitation of labour ceases to be profitable even to the exploiter. Future stores of human energy are drained by the premature exhaustion of children in factories. Slaves who ought to be cheap prove to be also ineffective. Hours longer than human energy will bear, payment unfit to sustain physical vitality, in the long run waste labour rather than obfain it at a low price. But men do not always wait for the long run in the noise of the market-place.1 The State must interfere in the interests of the future, for the laws of economic competition will not do so, and there is no time to wait till experience has taught even the short sight of employers that benevolence may be the best policy. The machinery of economic bargaining, in fact, where it works out for the true common weal, does so blindly: each man seeks his own interest and it is, so to speak, an accident that he can only make profits by giving the public fresh utilities. At the stage of law, however, there can be explicit recognition of the aim of this mechanism and readjustments of it when it is international trade has clearly not found it possible to establish itself very securely.

1 It was wittily said à propos of the unemployed: 'The long run is that period of time in which, but only for the economist, all things become equal.'