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towards excessive "class-consciousness" Australia must be arrested. So far has it already gone that many workers seem to believe vaguely in the possibility of a Bolshevist State which consists entirely of proletarians and determines every issue by a popular vote. This tendency is carefully nourished by the Labour press for political party reasons, with the result that the economic aspect of the social problem is never fairly discussed. Statements such as the following are greatly in vogue:-" Rent, Interest and Profitthe three bugbears that cause all the want, misery and suffering in the world to-day. Substitute Socialism, and they would vanish as a dream." It is always easy to be rid of difficulties by assuming a world in which they do not exist, but the proceeding solves no problems, and is, practically speaking, useless. Socialism, treated as a matter of practical politics, suggests public ownership and the political control of industries. There is no reason at all for supposing that Socialism would do away with rent, interest and profit. Payment would still have to be made for a factory site, also in order to induce people to save money for governmental and industrial purposes. And the industry which did not show some sort of credit in its financial statement would probably show a debit -a result which would not tend to decrease the want, misery and suffering in the world."

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Capitalism and Industrialism in Australia have taken possession of the political as of the economic field, and have rent the social fabric asunder. They are actively engaged in endeavouring mutually to suppress each other, and, meanwhile, the interests of society as such are disregarded. Capitalism tends to assume that superior skill implies a right to ownership and absolute control, also, conversely, that ownership implies superior skill; Industrialism tends to discount the factor of skill altogether-in the effort to be "democratic."

In all this Australia is making payment for ignorance and a defective social philosophy. The

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social studies of the nineteenth century were political economy and political science. Political economy concentrated its attention upon the economics of competition rather than collaboration. Political science tried vaguely to equate the principle of majority rule with the doctrine of the general will." What could be more natural than to suppose, when the principle of competition failed, that the principle of majority rule must be applied? Since the advent of Socialistic theories there has been an increasing tendency to identify national organisation and political control. "Liberalism" dislikes the idea, but the tendency, none the less, affects all political parties in Australia. Socialism, by reason of its humanitarian bias and its dictum that the general interest comes first, has always possessed a strong attraction for the social reformer and the working-class. Yet, when all is said, Socialism is, in the main, a muddled " way of thinking about political and economic problems. The central thesis of laissez faire was that the politician must keep his hands off trade and commerce. It was this doctrine which made possible the industrial expansion of the nineteenth century, and we need its counterpart now. The defect of laissez faire was that it saw no alternative to the "political " organisation of industries but individualism—a competitive chaos. As a corrective of this industrial chaos, Socialism can suggest no better expedient than a return to political control. This suggestion entirely misses the importance of the distinction, which laissez faire drew, between the political and economic functions of society.

The political function-the State-is relatively passive and critical; it is, or should be, a moral function. The economic is the active, energetic aspect of the national life. From the political standpoint, properly so-called, society consists of individuals, all of whom count alike before the bar of public morality. From the economic

standpoint, society consists of individuals organised

in groups, each group fulfilling an economic function for the society. The politician cannot actively direct the group, because it is his duty to criticise, and to record in statutes, the relations between individuals and groups. Should a politician attempt to control an industry he must either fail to do his duty as a politician or delegate his industrial powers to another. In the latter event the relation between the politician and his deputy can serve only to hamper the industry, to hinder its proper development. In all probability it is only those social functions which have become stereotyped social habits that are capable of being successfully administered as a civil service.

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There is no need to suppose that national organisation implies the necessity of a direct political control of industry. Our lack of social unity is due to the fact that the majority of the larger economic groups are internally at variance and in conflict. In the first place, there is no collaboration amongst producers; and, in the second, there is the conflict between employers and employed described above. So long as this condition of affairs persists, no single industry is likely to develop a sense of unity or social function, nor is it likely to develop the intelligence and vision which the international situation imperatively demands. If`" national organisation" means anything, it means the organisation of every social function as such. Gierke and Maitland point out that social growth is growth in respect of the groups which together make up the society. Unless every social function is allowed a full measure of self-control, subject to political criticism, social growth must cease.

Political class-division does not, however, show itself only in Australian public affairs. In a more subtle form it appears as a Court of Industrial Arbitration. This device is employed in Australia to an extent far greater than in any other country

except, perhaps, New Zealand. So far as arbitration encourages the mutual discussion of difficulties by masters and men, the effect is excellent. Every social writer from Bagehot to Tarde has recognised the importance of rational discussion as a factor in social progress. But the notion of an Arbitration Court goes far beyond this. The Court comes upon the scene armed with all the panoply and majesty of law and judgment. Its primary assumption is that the interests of masters and men cannot be made identical, that the intervention of an intermediary is necessary in the general interest. This assumption may be sufficiently true in a particular case; it does not follow that the generalisation of an intermediary into a permanent social institution is a wise proceeding. So much at least is certain, that since the advent of Arbitration Courts, trade unions have tended to devote their meetings mainly to discussion of the arbitration "log" of wages and working conditions and to give up all pretence of interest in technical trade problems. So far as arbitration is responsible for this, it must be held to have widened the social chasm separating masters and men and to have countenanced the notion of the class-war." In effect, arbitration recognises and legalises social disintegration.

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But this is not all. The arbitration Judge is set the hopeless task of producing by regulation that which can only be spontaneous--growth. The incessant multiplication of restrictions-" two hundred typewritten pages "-does not aid an industrial function to develop to new powers; it serves only to hinder it. Progress cannot be achieved by prohibition. Decisions of the Court may restrain unruly growth or prohibit undesirable practices; they possess no power of initiative or leadership. The real problem which faces Australia and the civilised world is how to set each social function free to do its best for society. The remedy of the worker's ills will be accomplished

not by regulation but by making him share the responsibility as a partner and a citizen in the broadest sense.

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III.

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But social disunity will not be remedied until society realises that a chaos of petty competitors, sundered by a false conception of a class-war," cannot be united by a sense of social collaboration. Mr. Justice Jethro Brown, President of the South Australian Arbitration Court, has entitled a recent treatise, The Prevention and Control of Monopoly. If monopoly is prevented, then the development of a consciousness of social function is prevented, social unity becomes impossible of achievement, and social disintegration must continue. Of late, however, "trusts " and "industrial unions have been increasingly in evidence. This dual movement represents a great improvement upon earlier Socialisms; both definitely economic moves in the direction of economic unity. Both, unfortunately, have come under suspicion of being inspired by class-interest; this by reason of the unduly partisan form industrial discussion publicly assumes. Trusts and industrial unions might very well be considered as pointing the forward path to society. Both alike. aim at the organisation of a social activity as such, and would, therefore, tend to bring a sense of social function to consciousness.

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Social organisation upon such a scale will, however, only widen the area of disaster unless we learn to face our problems with clear eyes. If, as Professor C. A. Ellwood has said, "the world of our forefathers has, within a generation, enlarged and burst its bounds," then it follows that our vision, within a generation, must be correspondingly enlarged. The alternative is the road of ignorance, of social disintegration and decadence. The triumph of one social group or class over another means disaster for all; no group stands alone. The more complex our society becomes, the more necessary is it for us to be able to brush party