He attributes the building up of this large unfunded debt primarily to the intermediation of London, which, he says, has largely assumed financial responsibility for the Continent, and has stood between the United States and the Continent in the process. "London," he says, "has purchased with sterling (or with short term dollar obligations) the great bulk of the franc, lire and other Continental exchanges created in the United States, and has in other ways provided dollars for the use of the Continent. London has also purchased great quantities of goods from the United States and other parts of the non-European world for cash, or on short credits, which she has resold to the Continent on long credits."

This quotation from the pen of an American economist, strikingly testifies to the dominant position which London is still felt to occupy in the world of finance, and emphasizes the remark which I wish to make in conclusion, namely, that for some years to come great importance must be attached to having a large surplus available on the one hand to assist Europe in getting on to its legs again, and on the other hand to pay off our debt and promote new developments in the dominions and in foreign countries.

SUMMARY OF TRADE BALANCE IN 1913 AND 1920.

Excess of Imports (including gold and silver)

Add Invisible Imports, say

Total

Deduct Invisible Exports:

Shipping Earnings

Finance and Insurance

Income from Investments

Miscellaneous, say

Total..

Balance, representing Export of Capital

THE present article aims at making a brief survey of the main schools of Marxism with a view to discovering their most important theoretical differences. The difficulties are twofold; first, the immense volume of Marxist polemics; secondly, the refusal of the participants to confess any deviation from Marx, and the consequent necessity they are under of traversing the whole body of Marx's work, produced during many years, for textual support. In this article attention has been concentrated on the work of Bernstein, Kautsky and Lenin, as most representative of the various tendencies. First, however, it may be useful to recall the principal elements of Marx's doctrines. The main driving forces of history are to be found, not in thought, but the material conditions of life. Of these the most important are the productive forces, labour and invention. These productive forces, however, do not work in vacuo, but within the framework of laws as to property, social classes, and of a definite form of state. Now economic power precedes political power; as the productive forces expand, the older forms of property, old legal and political structures, are no longer suitable, and become fetters to them. The productive forces steadily develop till they burst the old social and political bonds. The actual change takes place through the medium of class struggles. All recorded history is the history of class struggles. The present struggle is between the bourgeoisie-the owners, and the proletarians-the propertyless. The opposition between the productive forces and their social and legal environment is thus transferred to classes. As the capitalist system develops, men are drawn into great factories, use common instruments, do work together, i.e., production is social in form. But at the same time capital is privately appropriated, distribution is private. These two conditions conflict, and by the means of increasing class conflict and crises, the old capitalist bonds to social production are burst asunder, and the new order of society, now with a framework suitable to the state of its productive forces, is ushered in.

We may begin our discussion by noticing two points about this. It has been concluded that this description implies (1) change by revolution, catastrophe; (2) economic determinism, inevitableness. It is true that many Marxians do hold views with those two qualities. Marx's Hegelian training left him with a passion for clear cut opposites, so we find the positive and the negative, thesis, antithesis, and synthesis, even in his treatment of social development, which thus progresses not by the gradual evolution of one form out of

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another, but by catastrophic breaks. And Marx was also guilty of exaggerated language as to the influence of the economic factors of history. He speaks of iron necessity, and even says that "it is not the consciousness of men that determines their mode of existence, but on the contrary their social existence that determines their consciousness." Engels, however-Marx's watchdog-softens these expressions a good deal, and allows that sometimes political, legal and religious ideas may be the preponderant factors in determining the form of historical struggles, that they all react on the economic factors. Marx's forcible phrasing thus led many into a form of economic determinism, and even monism, which have no necessary connection with the kernel of Marx's thought.

It is this sharpened, deterministic form which is taken by much of the crude Marxism current amongst the working classes to-day. The reason for this is clear: such a theory does seem to correspond to their actual experience. In a mining village, practically the entire adult male population will be miners who work with their hands. The remainder will be composed of a few mining officials, tradesmen and professional men. There are thus two classes in their society-men who work in the pits with their hands (the great majority) and a few who do not. Many miners will not only work for the colliery company, but live in a house owned by the company, and overlooking the material equipment of the industry. Their whole lives are dominated by the industry in which they work, by their economic conditions. When a trade depression comes, pits are closed, and they are faced with unemployment and wage reductions. The two million persons on the unemployed register can scarcely hold any other belief than that of economic determinism, or avoid feeling themselves in the grip of impersonal, irresistible economic forces. And if at the same time they see concentrations of capital proceeding apace-like the trustifications of the South Wales coal industry in recent years—their experiences are still more akin to those described by Marxian theory. It is easy to see, therefore, why that theory has so strong a hold in some industries and some districts it does roughly correspond to the actual conditions of life of the workers. And it is not hard to understand how they narrow the meaning of "material conditions" to "economic conditions," tend to make the theory deterministic, and in their resentment seize on the idea of progress by revolution. Given such conditions of economic and social life, there would be Marxism even had there been no Marx. The creed is the expression of deep social want and urgency. Indeed, since the "new technique,' periods of economic and social dislocation have always produced some such theory. For instance, in 1825, Thomas Hodgskin published Labour Defended, and in 1827 Popular Political Economy. Many of the elements of Marxism are already present. The driving forces of society are regarded as increase of population and inventions, the political organization of society depends on the mode in which pro

perty is distributed, economics precedes politics, laws are made, not by labourers, but by other persons, who use them to appropriate wealth, the subjection of labour is due to the legally sanctioned demands of capital, and there is a fierce contest between capital and labour because the workman is deprived of all the produce of his labour but bare subsistence. Marx did not write his theory in 1825, but Thomas Hodgskin did. When economic dislocation is great, and social conflict intensified, the incipient Marxism of the working classes crystallizes into a theory.

How far are these qualities found in the various schools of Marxists? It will be found that the main points of conflict concern historic necessity, social catastrophe, and the place of democracy in the class struggle.

Bernstein, in Evolutionary Socialism, commences his discussion by distinguishing pure science, principles held to be true generally, and applied science, the application of these to particular cases. This enables him to cut away the inessential, variable elements of Marxism, so as to leave the stable elements. The latter consist of historical materialism, the theory of class struggles, and the theory of surplus value. He then rejects definitely the idea of the inevitableness of social revolution. Historical necessity, in the Marxian sense, depends on the assumption that economic factors only determine the course of historical changes. Not only did Marx and Engels admit the importance of other influences (as we have seen above), but in modern life economic factors are playing a smaller part than formerly. As man learns the control of natural forces, discovers how to feed and clothe himself better and more easily, he frees his cultural life-art, morals, science-from the shackles of material need. Further, as we acquire more and more insight into the laws of social evolution, we steadily develop our power of directing its course.

But he also refuses to believe that social democracy will come by a catastrophe. Two factors essential to the theory of catastrophethe lining up of society into two hostile classes, proletarians and capitalists, and the concentration of industry—are not operating as Marx suggested. On the one hand, owing to the rise of joint stock companies, the numbers of the possessing classes have increased and not decreased. Recent developments show "not a decreasing number of large capitalists, but an increasing number of capitalists of all degrees." The middle class does not disappear, but merely changes its form, older elements now being replaced by technicians, civil servants and professional men. Nor is the concentration of industry being carried out with equal speed and thoroughness in all branches; the movement is still slow in agriculture, while in businesses dependent on personal service, or subsidiary to great staple industries, small and middle-sized firms abound and prosper. Finally, democracy has made a catastrophe unnecessary. Its growth has synchronized with the development of collectivism. On the

one hand, the worst extravagances of capitalism have been removed, on the other, working class organizations-unions and co-operatives -have been given scope for development, thus placing increasing limitations on autocracy in the factory, and gradually wresting some part of the economic machine from the capitalist.

There are difficulties in the way of a brief survey of Kautsky's position-the volume of his work and the fact that his views have undergone changes. Social Revolution (1902), The Dictatorship of the Proletariat (1918), and Terrorism and Communism (1919), are, however, typical.

As against Bernstein, Kautsky upholds the theory of the destruction of capitalism by catastrophe. He likens the change from capitalism to socialism to birth. At birth we have an entirely new functioning of organs which are the result of slow development: the child's lungs, etc., are of slow growth within the mother, but at birth they take on new and independent functions. Similarly, whilst the social organs develop slowly, their functions can be changed by revolution. A railway takes time to build up, but it can be made to function for the labouring, instead of the capitalist class, by a sudden transformation. One could not change it piecemeal, i.e., by socializing first the engineers, then the clerks, and so on, but only at one stroke, because the various functions are so intimately connected that they must be revolutionized simultaneously.

Kautsky denies that class antagonisms are softening. The new middle classes mentioned by Bernstein, the "intellectuals," have no class consciousness, are sympathetic to socialism in increasing numbers, but they are the least combative of the bourgeoisie, and, as they have no organized force, like the proletariat, can fight only with intellectual weapons. They do not form a barrier to revolution. The small property owners mostly identify themselves with capitalists. While they need democracy to protect their own interests against encroachments by the capitalists, they can maintain their position only by exploitation of the worst kind-they are hit most by labour legislation, and so form a bitter, hostile, reactionary democracy. The increase of their numbers increases class antagonisms. Large farmers are increasingly hostile because socialists secure shorter hours and higher wages for farm labourers. Finally, the capitalist class is more and more hostile. Increased trustification has increased their powers of resistance to the working class, increased international competition is carried on by depressing wages. Most important of all, the antagonism of the capitalist class is increased by the growing control of the financial capitalist over the industrial capitalist. The latter is interested in peace, external and internal; wars and internal disputes disturb trade, and load him with taxes and debt. On the other hand, the great financier is interested in war and militarism, as they give him many opportunities to increase his wealth and power. The development of joint stock