and their own sagacity to produce goods which they themselves do not require. This imaginary economic sorites is aggravated by the growing cost of producing raw material, by the fluctuations of harvests, and by the repeated panic and pressure to sell caused by the credit basis of modern industry.

Rodbertus's own theory is no nearer to reality than his friend's. It is based upon the still narrower conception that labour is the sole source of value; it is further disfigured by a rhetorical tone and by complete absence of thoroughgoing analysis of actual industry. Incidentally there is an attack upon pure individualism and Smithianism, and a somewhat hazy attempt to emphasize the organic view of political economy. The book has further interest as foreshadowing, and indeed giving substance to part of Karl Marx's work, but, judged as a whole, its merit to the student of economic theory is historical, its positive value almost nothing. The tract in its present form is preceded by a most clear and instructive preface by Professor J. B. Clark, embodying the result of modern research into the cause of crises.

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It remains to suggest one or two places where the translation, otherwise lucid and excellent, might be improved. On p. 21, either "once for all " or " already" may be expunged; on p. 37 the sentence beginning "all the miseries " suffers from needless inversion; on p. 44, line 17, and p. 108, line 18, there are small slips; and on p. 64, line 5, a curious vulgarism has got into the text.

SPENSER FARQUHARSON.

THE THIRD FACTOR OF PRODUCTION.

By A. J. OGILVY, With an Introductory Note by A. R. WALLACE, D.C.L. [272 pp. Crown 8vo. 2s. 6d. Sonnenschein. London, 1898.]

This book may be fairly described as a propaganda pamphlet in the interests of the Land Nationalization Society. The author is a Tasmanian landowner, and though he deals in this book with various problems of political economy, still Dr. Wallace states that on these points he cannot "claim to speak with such practical experience as he possesses in regard to the land." I therefore have directed my attention mainly to the chapters and references which in any way bear on land and what may be termed its agricultural value, especially as Dr. Wallace in his introductory note states that Mr. Ogilvy in this book "explodes one of the commonest fallacies of our opponents that large farms lead to better cultivation and higher production than small farms or peasant holdings."

Mr. Ogilvy states that "profit is no test of productiveness," and that "there are businesses that bring no profit to the promoters, but

yet are highly productive, though, unfortunately, the promoters do not often continue them long." The example given in support of this assertion is rather startling, and it is that "the gentleman farmer, who loses two or three hundred a year by what is called fancy farming, is often putting his land to more productive use, adding more to the stock of goods and enjoyments, than the shrewd tenant farmer alongside who is turning a good penny." In other words, the claim here made is that bad farming is better than good farming.

Considering that the author is a landlord and supposed to be conversant with agricultural details, not only the above statement, but many more of his examples appear to be rather peculiar. In one of these, for instance, he assumes that a farmer who lays down land in grass, which when it produced corn gave £440, now gets only £50 worth of meat instead. To any one acquainted with the details of practical agriculture such an assumption is an absurdity. Again, he apparently judges of the productiveness of land solely by the value of corn grown. Why should the old standard be used nowadays? There are other crops besides corn that can now be grown and other uses to which land can be put under modern methods of scientific agriculture, which will enhance both the fertility and the productiveness of land, yet Mr. Ogilvy would have us to believe that if a farmer does not grow corn he reduces the productiveness of the land.

In another illustration of what is termed "Capital as Instruments," the author says, "Let A. with a team of horses and full supply of instruments settle alongside B. who has only a spade, each having as much land as he can cultivate. Then A.'s superior appliances will give him a greater command over nature (enabling him to get a greater return from the soil to the same labour), but it gives him no power over B. Say that A. can put in a hundred acres with one ploughing, getting twenty bushels to the acre (= two thousand bushels), while B. can only put in five acres with one digging, getting forty bushels to the acre (two hundred bushels)." Further quotation is unnecessary. It will be noticed that it is acknowledged that "A.'s superior appliances will give him a greater command over nature," yet A. is only permitted to get twenty bushels to the acre, while B. with his spade gets forty bushels per acre. The delusion that a man with his spade on a small area can get more out of the soil than a man with the command of better equipment on a large area is one that has become so common in a certain line of argument that it is too often accepted as a fact. To it constant reference is made by reformers of the communistic and socialistic type. Yet what are the facts? All of us are aware that in England a farmer, with, say, a hundred acres and the command of

superior appliances, actually gets a larger return per acre out of his land than the man who only holds five to ten acres. Compare again the average return per acre of any crop that is obtained in England with the average return per acre received in a country of small holdings like France or Belgium, and it will be seen that the men with large holdings, as in England, get each crop they grow to give better returns per acre than those with small holdings are able to obtain. But the effect of small holdings on returns can be best seen in Belgium. During the past quarter of a century or more small holdings there have increased immensely, but during the same period the average returns per acre have steadily diminished. To state that if one man with a hundred acres gets twenty bushels per acre (= two thousand bushels), twenty men with five acres each will get forty bushels per acre (=four thousand bushels), is to any practical man the height of absurdity.

Most of Mr. Ogilvy's farming illustrations, however, seem to be based on this conception. To give another illustration: In support of his argument that "land monopoly not only absorbs the fruit of industry, but also hinders its progress," he supposes an estate divided into five farms. No acreage is given, but we are told that each of the five farmers raises £400 worth of produce; then we are asked to suppose this unknown area divided amongst a hundred cottier labourers, and are told they produce £50 worth of produce each. The five farmers thus produce £2000 worth, while the hundred cottiers produce £5000 worth. If we assume that this estate was five hundred acres in extent, it is evident that we are asked to believe that in the hands of a hundred labourers it will produce £10 per acre, but in the hands of five farmers only £4 per acre. In the author's opinion, the occupier of a hundred acres "produces nothing. It is the labourers who produce all. . . . If he decides to apply manure, they fetch and spread it; if he keeps the ground clean and well worked, it is their arms that do it; when he sells his produce, it is they who gather and deliver it. I count it nothing that he finds the tools, that he arranges the work, that he keeps the accounts, that he takes the risk." Comment is superfluous, and passages such as this make one rather doubt Dr. Wallace's statement in the introduction, that the author "has claims on our attention as an acute reasoner."

"The

On the question of the unearned increment the author writes increase of value in my land has arisen from the execution of public works and increase of population, causing an increased demand for the land-in other words, it has arisen from the national progress; and I, so far from aiding in this progress, have actually hindered it by keeping my property locked up, and so forcing on intending producers

to inferior lands." But in the chapter on "Resort to Inferior Lands," Mr. Ogilvy states that "the orthodox explanation of this movement is that, as population increases, it presses on subsistence, and compels resort to inferior lands, subsistence becoming more difficult owing to the diminishing return. The true explanation, we submit, is that as knowledge and skill improve and appliances multiply, lands that formerly could not be cultivated with profit now become worth cultivating, and so invite resort to them, no matter whether subsistence be short or not." Agreeing as I do with the author's explanation on this point, I fail to see how he can reconcile it with the previous statement as to producers being forced to inferior lands.

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Writing on the subject of land nationalization, Mr. Ogilvy says, Suppose a trade union of farm labourers were to say to the farmer, 'You have been accustomed to employ two men only on this farm. Well, not a man shall take service with you unless you undertake to engage four, and at the same wages.' Does anybody doubt that the two extra men could produce more than they consume and use up, and so be productively employed? . . . The labourer's maintenance, so long as he replaces what he receives, is not cost of production, but profit. . . If an industry does nothing more than maintain one man continuously, it is to that extent productive." The author's proposal here can be plainly put by utilizing his illustration: In effect, he says to a farmer, At the present moment, through the labour of two men whose wages and keep cost about £100 a year, you realize about £270, and of this you pay £20 in rates and taxes, and £150 as rent, and you reserve for yourself as your profit £100. But I want you to engage four men instead of two, and thus pay £200 a year for keep, etc., instead of £100. The four men's labour will only realize the same amount as you obtained formerly, i.e. £270, and you will still pay £20 for rates and taxes, but you must offer less to the landlord, and be content with less for yourself, so as to square your accounts, while you can console yourself with the dictum that "labourers' maintenance is not cost of production, but profit."

Though disappointment has been expressed, yet it should not deter any one from studying this book. It is in itself very readable, and there is a freshness about the views promulgated that is attractive. Even as an attempt to solve the land problem it merits attention, while of course it requires no recommendation to those who hold the laudable desire of restoring the land to the people and the people to the land. The author does not do, however, what Dr. Wallace claims for him, i.e. explode one of the commonest fallacies," for the simple reason that it is an indisputable fact that the best returns from the soil are not obtained by peasant holdings.

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R. HEDGER WALLACE.

DIE ARBEITERVERSICHERUNG IN OESTERREICH UND Von DR. ZACHER, kaiserlichem Geheimen Regie

UNGARN.

rungsrath. [133 pp. 8vo. Troschel. Berlin, 1899.]

This is the latest volume of a series, reviewing in detail the legislation adopted in various countries for the protection of working men and working women from every variety of mishaps, which has appeared from the pen of Dr. Zacher, one of the heads of the German State Insurance Department, and, of course, a most competent authority upon his subject, as well as a remarkably lucid expositor. All the world is so full of proposals aiming at equitable working men's insurance, that every new ray of light thrown upon the subject ought to be welcome.

Austrian and Hungarian working men's insurance is, to a great extent, shaped on the model of German. Nevertheless in respect of some very important points it has struck out new paths. Dr. Zacher holds the German legislation to be the better. Austrian writers, like Dr. Kaan and Dr. Kögler, give the preference to their own. Who shall decide between these rival advocates? It is curious to note that, by a reaction which, perhaps, after all, is not surprising, Germans now find the thirteen weeks' delay, which must elapse before a claim to compensation for accident arises, too long, and propose that it should be shortened to four weeks, as in Austria, at the very time when Austrians complain that four weeks is too short, and ask for an extension to thirteen weeks, as in Germany.

Administration appears to be cheapest in Austria. But, in view of the proposals made in this country in respect of inadequate old-age pensions, it may be well to take note of the lesson which Dr. Zacher draws from Austrian experience in respect of accident insurance. The insufficient compensation granted makes the burden imposed appear lighter, but only at the cost of a heavy draft upon the rates, and a general pauperizing of pensioners. That is what we should have to expect if similar pensions were granted here. Austria and Hungary have not yet adopted old-age pensions. But the party in power appear desirous of following on that line also in German footsteps, and it is curious to note, that of all schemes suggested, that which seems to please them best is one having many features in common with Mr. Charles Booth's. Our author breaks a lance boldly on behalf of the principle of compulsory insurance, as being preferable to voluntary. But it does not appear to me that in respect of sick and old-age insurance he makes out his case. His argument is, however, decidedly worth considering.

HENRY W. WOLFF.