to the old system of decentralized control. And since the only
substitute for the old system of individual control is collective
control, it appears to be inevitable that government regulation of
business will become a fixed policy in all democratic states.

The _laissez faire_ policy is supposed to favor progress by allowing
producers to make such changes in business methods as may be prompted by
the desire for larger profits. The doctrine as ordinarily accepted
contains at least two erroneous assumptions, viz., (1) that any
innovation in production which makes it possible for the capitalist to
secure a larger return is necessarily an improvement in the sense of
augmenting the average efficiency of labor, and (2) that policies are to
be judged solely by their economic effects. Even if non-interference
resulted in industrial changes which in all cases increase the
efficiency of labor, it would not follow that such changes are, broadly
considered, always beneficial. Before drawing any sweeping conclusion we
must consider all the consequences direct and indirect, immediate and
remote, political and social as well as economic. Hence the ordinary
test--the direct and immediate effect upon productive efficiency--is not
a satisfactory one. Moreover, many changes in the methods or
organization of business are designed primarily to alter distribution in
the interest of the capitalist by decreasing wages or by raising
prices. In so far as a policy of non-interference permits changes of
this sort, it is clearly harmful to the community at large, though
advantageous to a small class.

In all democratic countries the conservative classes are beginning to
realize that their ascendency in production is imperiled by the
ascendency of the masses in the state. It thus happens that in the hope
of checking or retarding the movement toward regulation of business in
the interest of the people generally, they have taken refuge behind that
abandoned tenet of democracy, the doctrine of non-interference.

At the same time they strongly favor any deviation from this policy
which will benefit themselves. This is exemplified in their attitude in
this country toward our protective tariff system, which, as originally
adopted, was designed to encourage the development of our national
resources by offering the prospect of larger profit to those who would
invest their capital in the protected industries. Under a capitalistic
system development natura