STATE INTERFERENCE IN SOCIAL AFFAIRS. 197 



himself indicated some of the most important of these exceptions, 

 and the list has been extended by his successors. But these ex- 

 ceptions were all based upon reasoned principles, such as the in- 

 capacity of the persons concerned, e. g., children to make fair con- 

 tracts ; the lack of individual interest in public works, e. g., the 

 maintenance of roads, and the importance of the highest security, 

 as in the regulation of the issues of bank notes. And in spite of 

 all these exceptions strengthened and purified by these excep- 

 tions the presumption remained undisturbed. Recently, how- 

 ever, some writers, under the influence of the ideal of maximum 

 happiness and impressed by the power "of the state, have sought 

 to extend its interference far beyond these admitted principles- 

 But, so far as this movement has any theoretical support, the re- 

 action has already begun. The fundamental importance of free- 

 dom of contract has become more apparent than ever through the 

 application of the comparative and historical methods to juris- 

 prudence ; the proposition that the progress of society has been 

 from status to contract has almost acquired the force of an axiom. 

 The analysis, too, of modern industrial systems in which division 

 of labor has become more and more intricate and interdependent 

 has shown the hopelessness of the attempt to transfer the man- 

 agement and control to the state. Changes in the methods of pro- 

 duction, in the diffusion of knowledge, and in the transport of 

 material commodities have been so rapid and so great that no 

 executive government could have overtaken them. In the most 

 advanced communities even that legislation which is necessary 

 for the new conditions lags behind; even those elementary 

 forms which simply aim at giving an interpretation to contracts 

 in doubtful cases, or which are necessary for the adjustment of 

 responsibility (as in bankruptcy and partnership), are behind the 

 times. The growth of joint-stock enterprises has outstripped the 

 development of the law of companies, and there is a crop of new 

 frauds without corresponding penalties. Turning to the execu- 

 tive and administrative functions of government, the analysis of 

 existing conditions shows that we have not yet overtaken those 

 exceptions admitted by the strongest supporters of laisser faire. 

 The British Government has, it is true, wasted its energies in 

 devising temporary expedients of various kinds, but it has not 

 yet accomplished the programme of Adam Smith. Not only are 

 there privileges and restrictions that ought to have been abol- 

 ished long ago, but on the positive side the programme is not 

 complete. We have just begun universal education on the lines 

 laid down by Adam Smith, but his scheme for imperial federa- 

 tion is not yet within the range of practical politics. We have 

 effected great financial reforms, but we still fall far short of the 

 full development of his principles. Even in matters of currency 



