222 president's address — section g (i.). 



wherever it exists, implies and is a standing proof of the validity of 

 economic laws, although it may sometimes afford a practical disproof 

 of the false deductions made by short-sighted economists. It may 

 he true, for example, that labor combinations are unable permanently 

 to maintain the remuneration of labor above a point which it would 

 have reached under favorable circumstances without such combination. 

 But the laborer himself is more concerned with the unfavorable circum- 

 stances, and with the fact that combination has in many cases kept 

 the rate of wages from sinking to a level which it would inevitably have 

 touched without such combination. And this may be granted without 

 admitting the validity of Marx's supposed iron law of wages. A law, 

 in the scientific sense, is nothing more or less than a necessary relation 

 between any event and the conditions in which it takes place, and it 

 has been the misfortune, alike of the old economist and of the new 

 socialist, that they have been too much intent on the hypothetical 

 event, and too little observant of the actual conditions. The old 

 economists were at once too optimistic and too pessimistic. They 

 were too optimistic in their view of the good which would result from 

 a regime of unrestricted competition, from the operation of the " natural 

 economic laws " which were supposed to govern society. They were 

 too pessimistic with regard to the powers of man and society over those 

 natural laws. When the free play of economic forces seemed to produce 

 results which offended the moral sense of the community, the economists 

 for the most part contented themselves with saying that nothing could 

 be done to counteract them. The result, in the field of practical 

 politics, was that when the negative programme of the Liberal Party 

 was accomplished, liberalism found itself without any positive policy 

 for the future. It had maintained itself by attack in the past, and in 

 default of any positive scheme of social reconstruction it is now sug- 

 gested that liberalism may continue to live and fight under a banner 

 with a negative device — Anti- Socialism. 



It is a tendency of human nature — especially of religious and 

 political human nature — when it loses faith in one set of dogmas to 

 take refuge in another set, and to assert them with the same extrava- 

 gance and disregard of facts. The politician in search of a eospel to 

 take the place of the discredited doctrine of laissez-faire is offered the 

 gospel according to Karl Marx as a substitute for the gospel according 

 to Adam Smith. I have hitherto spoken of liberalism and socialism 

 as general tendencies of social and political life, rather than as fixed 

 and stereotyped forms of political creed. To avoid ambiguity, I shall 

 henceforth use the word " collectivism " to denote that definite doctrine 

 which opposes the assertion that the functions of the State should be 

 reduced to a minimum, with the counter assertion, equally sweeping 

 and equally dogmatic, that the functions of the State should be ex- 

 tended until the difference between society and the State is abolished, 

 at any rate in everything that pertains to the economic sphere. If 

 this extravagant state absolutism were to be regarded as identical 

 with the practical state socialism which promises to become the guiding 

 principle of the politics of the future, then anti-socialism might well 



