as not abolished until the first half of the
nineteenth century in Austria and southeastern Europe, and not until
the last half in Russia. Many economic and cultured forces furthered
this movement, but the most powerful intellectual force in its favor
was the work of Adam Smith. So strong an impression did Smith's book
make, that in the minds of men "free trade" became almost identical
in thought with political economy, whereas that was but the temporary
economic problem of the eighteenth century.

Many men then thought that in "free and unlimited competition" had
been found a solution of all economic problems for all time. But soon,
it was apparent that it was no such simple and absolute solution.
Indeed many of the present economic problems--in one sense all of
them--center around this one: to determine the proper forms and limits
of competition. The varied aspects that this problem takes will appear
in every portion of the following pages.

Sec. 14. #The wage-system.# Viewed in another aspect the present economic
and social order is called the wage-system.[9] The wage-contract, like
the use of money, is not essential to the existence of a system of
private property. Communities such as the American colonies and as
many of the newly settled states, may consist almost entirely of
self-employed owners of land. Bulgaria, before the Balkan wars called
the peasant state, presented this organization (tho of course with
some wage-payment), as did also its neighbor Serbia. But given the
institution of private property with competition (freedom to buy
and sell), let manufactures and commerce develop to any extent,
and inequalities of fortunes increase while an increasing number of
persons work for wages. It is noteworthy that as this goes on (as
it has done in America at an increasing rate since the middle of the
nineteenth century) it is the agricultural and rural hand industries
that continue to be mainly worked by owner-managers and workers,
while it is the manufacturing, transporting, and large commercial
enterprises in which the labor is done for wages. The acceptance of
the wage-system thus far has been the inevitable price to be paid
for manufacturing and industrial development; and one of our economic
problems is to determine whether this must continue, and if so,
whether in the same measure as in the past.

[Footnote 1: The exceptions are probably unstated amounts of exempt
real estate (owned by municipalities, s