century. It was for a long time the official creed of the leading governments of the world, and was defended by some of the greatest political thinkers of the eighteenth and nineteenth centuries. According to this theory the state was to interfere as little as possible with the individual in the enjoyment of his rights and privileges. It was to impose few, if any, restrictions upon his business and commercial activities. The theory of non-interference grew into a government philosophy which was widely accepted and practiced in Europe at the time governments were established in America. "It was thought that the rivalry between individuals would develop strength of character and would stimulate originality by offering the rewards of wealth and fame; society would thereby be the gainer, for it would lead to an increased production of wealth." The theory became associated with and was looked upon as a corollary to the developing doctrine of popular sovereignty. In America the doctrine of natural and inherent rights beyond state control served as a basis for a corresponding theory of civil liberty which proposed to limit the functions of government to a minimum necessary to keep the peace. Jefferson characterized the prevailing view in the dictum "that government is best which governs least."

At this time "strong emphasis was laid on the value of individual enterprise, the importance of initiative, upon the significance of self-reliance and responsibility as factors in the growth of the community. It was asserted that these were the typical qualities upon which American prosperity had been based." The theories of independence, individual

1 Among the leading exponents of individualism were Adam Smith, whose work on The Wealth of Nations, and Jeremy Bentham, whose Principles of Legislation served as a philosophic basis for later theories. The doctrines of individualism were chiefly advanced by the Manchester School of Economics under the leadership of such noted writers as David Ricardo, James Mill, John Stuart Mill, and Thomas Robert Malthus.

J. Selwyn Schapiro, Modern and Contemporary European History (Houghton, Mifflin Company, 1918), p. 42.

C. E. Merriam, American Political Ideas (The Macmillan Company, 1920), p. 314.

initiative, and self-reliance which were fostered in the settlement of the American colonies and in the pioneer conditions which prevailed in the United States, led to the conclusion that "the individual should be as little as possible restrained by the law; and that the state should pursue, except in cases of extreme urgency, a policy of non-interference with the development of individual conduct."

Socialism. The extreme position of the individualists and the evils resulting from the fierce economic and industrial competition which ensued led to the development of opposing groups of political thought supporting doctrines commonly designated as socialism, collectivism, and communism. Though there are many different groups of this type holding a variety of opinions, there are certain doctrines which are common to all but a few of the several groups. In the first place, all of the groups criticize the existing industrial order, which they hold is largely based on an individualistic philosophy. The chief criticisms of the social order, based, as is contended, on the theories of individualism and civil liberty, are:

That the invention of machinery and the rise of factories rendered it possible for the capitalist owners of the means of production to become the dominant class and the proletariat composed of propertyless workers, the subject class; that the compensation of the laborer under the capitalist system takes the form of a competitive wage, which, it is the aim of industrial managers, to keep as low as possible; that the capitalist system necessarily involves great losses through duplication of establishments and services and through the advertising of goods; that it fosters poverty on the one hand and extreme accumulation 1 C. E. Merriam, American Political Ideas (The Macmillan Company, 1920), pp. 314, 315.

The theories of the Syndicalists, Bolshevists, and followers of the I. W. W., whose aim is to abolish the present political state and to substitute therefor an industrial state controlled and managed by the workers, have had comparatively little effect upon American governmental policies and need not be considered in this connection.

of wealth on the other hand, with the consequent development of an unproductive leisure class.

The socialist groups have formulated certain theories on which the indictment of the capitalist system is based and the various programs of reform constructed. Chief among these theories are the economic interpretation of history, which maintains that economic factors largely determine ethical standards, legal codes, and religious, moral, and social ideas; the class-struggle theory, which holds that the history of man's development is largely comprised in “a record of struggles between economic classes," and that the modern form of that struggle is a conflict between the capitalist class and the proletariat; and the surplus-value theory, that the difference between the total value produced by labor and the value of the labor power consumed in the production of an article is surplus value and this difference represents the measure of the exploitation of the worker.1

Any attempt to summarize the constructive programs of the socialist groups meets with great difficulties, for their platforms are often vague and contain generalities which require extended explanations or they differ so widely as to render comparisons misleading. A few general characteristics of the programs may be noted. The majority of them provide for the nationalization of the means of production and distribution by which government management would replace private management in all the important economic relations. Individuals according to all but the communists might still have property rights in such things as houses, clothing, and food. Many groups also include the nationalization of the land as the basis of the operations of production and distribution.2

Though the leaders of these groups are constantly working for a complete reorganization of the political and social order, they are willing, in the meantime, to join with

1 Cf. John Spargo and G. L. Arner, Elements of Socialism (The Macmillan Company, 1912), parts i and ii. 'Ibid., part iii.

other parties in securing practical reforms to improve the general conditions of the working classes. Thus among the planks of the reform programs of socialists are such matters as universal suffrage, direct legislation including the initiative, referendum, and recall, and proportional representation. They usually favor the abolition of the powers of the courts which are regarded as protecting class privileges; they favor the abolition of child labor and the reduction of the hours of work per day. Thus many of the features of modern industrial legislation, such as workmen's compensation, social insurance, and legislation regarding wages, hours of labor and sanitary conditions, have been sponsored by the socialist groups.

It is obvious from this brief summary of the principles and policies of socialism that modern governments, with the exception of the soviet system in Russia, are far from accepting the programs of socialism. In the United States these groups have been relatively weak, and with the exception of certain cities have not gained sufficient political power to carry out any more than certain parts of the socialist program. Nor have the principles and policies of the extreme individualists dominated political thinking and practice in the United States. Though the views held by the followers of each of the two extreme groups of the nineteenth century affected in certain respects the organization and administration of government, the course of political development has been along a median line involving the acceptance neither of the program of extreme individualism nor that of socialism. A review of the efforts to regulate business, labor, education, and the social welfare will reveal the shift of political control from a conservative and individualistic regime to a liberal regime which accepts a considerable part of the practical reforms advocated by the socialists.

The regulation of business and economic conditions and some of the significant problems involved in this process cannot be considered in detail in this volume. A large

part of the subject matter relative thereto belongs to the allied studies of economics and sociology. A short consideration of some of the accompanying results upon the operation of government will be given in order to illustrate conflicting theories as to the purpose and functions of government.

REGULATION OF BUSINESS AND COMMERCIAL INTERESTS

Laissez-faire Theory and Regulation.-According to the theories and principles of the individualists, business and economic interests were to be regulated as little as possible. It was assumed that the economic struggle for existence would result in the survival of the fit and that this process would bring about the advancement of the public interests. The function of the state was to be limited to the protection of life and property and there was to be no interference between employer and employee or between buyer and seller, except to prevent fraud or monopoly.

The economists, such as Malthus and Ricardo, defended the rights of the mill owners and upheld the doctrine that there should be "no interference of the legislature with freedom of trade, or with the perfect liberty of every individual to dispose of his time and his labor in the way and on the terms which he may judge conducive to his interests." The investigation of the conditions in factories and workshops in England during the early nineteenth century disillusioned some of the individualists and marked the beginning of a series of laws and regulations affecting labor and industry.

The individualist, or laissez-faire, theory had, in many respects, its greatest development in the United States where the sparsity of population, the immense stretches of free land, and the wealth of natural resources rendered it possible for individuals of sufficient energy and physical vigor to make their way without aid from the govern