l
with them.

But this, it will be said, is not Liberalism but Socialism. Pursuing the
economic rights of the individual we have been led to contemplate a
Socialistic organization of industry. But a word like Socialism has many
meanings, and it is possible that there should be a Liberal Socialism,
as well as a Socialism that is illiberal. Let us, then, without sticking
at a word, seek to follow out the Liberal view of the State in the
sphere of economics. Let us try to determine in very general terms what
is involved in realizing those primary conditions of industrial
well-being which have been laid down, and how they consort with the
rights of property and the claims of free industrial enterprise.

FOOTNOTES:

[10] The objection most often taken to "undenominationalism" itself is
that it is in reality a form of doctrinal teaching seeking State
endowment.

[11] I do not include those living in "secondary poverty," as defined by
Mr. Rowntree, as the responsibility in this case is partly personal. It
must, however, be remembered that great poverty increases the difficulty
of efficient management.

CHAPTER VIII

ECONOMIC LIBERALISM

There are two forms of Socialism with which Liberalism has nothing to
do. These I will call the mechanical and the official. Mechanical
Socialism is founded on a false interpretation of history. It attributes
the phenomena of social life and development to the sole operation of
the economic factor, whereas the beginning of sound sociology is to
conceive society as a whole in which all the parts interact. The
economic factor, to take a single point, is at least as much the effect
as it is the cause of scientific invention. There would be no world-wide
system of telegraphy if there was no need of world-wide
intercommunication. But there would be no electric telegraph at all but
for the scientific interest which determined the experiments of Gauss
and Weber. Mechanical Socialism, further, is founded on a false economic
analysis which attributes all value to labour, denying, confounding or
distorting the distinct functions of the direction of enterprise, the
unavoidable payment for the use of capital, the productivity of nature,
and the very complex social forces which, by determining the movements
of demand and supply actually fix the rates at which goods exchange with
one another. Politically, mechanical Socialism supposes a class war,
resting on a clear-cut distinction of class