t have occurred in
society, and this failure is due, in large measure, to the limitations
contained within the capitalist system.

Like all social systems which attain to positions of consequence, the
capitalist system has played an important role in the development of
society, and like all such systems, it has had its day. The needs of the
community have advanced to a point at which they cannot be met under
capitalism, whose chief failure to function more effectively in the
present crisis may be traced to:

1. _Excessive centralization of the determining control of industry
in the hands of financial manipulators, who do not even enjoy the
advantage of owning the industries which they dominate._

Through shrewd financial dealing they have maneuvered themselves into
positions of importance, which they hold because of their ability to
manipulate, a political rather than an industrial virtue. The necessary
result of this concentration of authority is a denial of local
self-determination and a corresponding loss of local initiative. The
less local initiative there is, the more centralization is required to
keep the machinery running, until a point is reached where all power and
authority are exercised from the centre, and the local group is as
devoid of spontaneity as it is of authority. At somewhere about this
point, the friction involved in administration becomes so great that the
whole of the social energy is consumed in the routine of keeping the
social machinery running, and there is no surplus, either for leisure or
improvement. This was the outcome of a similar centralization of
authority under Feudalism, and it shows itself in any organization that
permits itself to drift into the danger-zone of bureaucracy.

2. _A second obstacle to the further development of the present
economic system is nationalism._

The political state has become an adjunct to the capitalist economic
system. It relies for one of its sources of driving power upon a concept
of nationalism which places the political boundary lines that happen to
surround a people first among the public limitations on conduct. "My
country, right or wrong," becomes a catch phrase on the lips of school
children. Whatever transpires inside these political boundary lines is
sanctified by its association with the fatherland, while events having
their origin outside of the country must be correspondingly discounted.

Since the middle of the nineteen