ed that the trouble is due to a genuine
clash of individual interests in a competitive industrial society,
where the frequent, large, and quite incalculable effects of improved
machinery and methods of production give now to this, now to that
group of competitors a temporary advantage in the struggle. It was
formerly believed that this bracing competition, this free clash of
individual interests, was able to strike out harmony, that the steady
and intelligent pursuit by each of his own separate interest formed a
sure basis of industrial order and induced the most effective and
serviceable disposition of the productive powers of a community.

It now appears that this is not the case, and that the failure cannot
in the main be attributed to an imperfect understanding by individuals
of the means by which their several interests may be best subserved,
but is due to the power vested in individuals or groups of individuals
to secure for themselves advantages arising from improved methods of
production without regard for the vested interests of other
individuals or of society as a whole.

APPENDIX I.

ARE GOODS IN THE POSSESSION OF CONSUMERS CAPITAL?

The question whether food, clothing, etc., which are "capital" so long
as they form part of the stock of a shopkeeper, are to be regarded as
ceasing to be capital when they pass into the possession of consumers
has seldom been definitely faced by English economists. Jevons was
perhaps the first to clearly recognise the issues involved. He
writes:--"I feel quite unable to adopt the opinion that the moment
goods pass into the possession of the consumer they cease altogether
to have the attributes of capital. This doctrine descends to us from
the time of Adam Smith, and has generally received the undoubting
assent of his followers. Adam Smith, although he denied the
possessions of a consumer the name of capital, took care to enumerate
them as part of the stock of the community." (_The Theory of Political
Economy_, 2nd edit., p. 280.)

As a historical judgment this is very misleading. Adam Smith, chiefly
impressed by the necessity of separating consumptive goods from goods
used as a means of making an income--_e.g._, commercial capital, quite
logically severed revenue from capital as a distinct species of the
community's stock. His "followers," however, differed very widely, and
usually expressed themselves obscurely. Generally speaking, the
English economists of the first ha