h efforts would be
advantageous to the state. Our study becomes, therefore, a study of
social physiology.

The principle already postulated, that the state must undertake the
production and distribution of wealth wherever private enterprise is
dangerous, or inefficient, clarifies somewhat the problem of the
industrial organization of the Socialist regime, which is a vastly more
difficult problem than that of its political organization. Socialism by
no means involves the suppression of all private industrial enterprises.
Only when these fail in efficiency or result in injustice and inequality
of opportunities does socialization present itself. There are many
petty, subordinate industries, especially the making of articles of
luxury, which might be well allowed to remain in private hands, subject
only to such general regulation as might be found necessary for the
protection of health and the public order. For example, suppose that the
state undertakes the production of shoes upon a large scale as a result
of the popular conviction that private enterprise in shoemaking is
either inefficient or injurious to society in that the manufacturers
exploit the shoemakers on the one hand, and, through the establishment
of monopoly-prices, the consumers upon the other hand. The state thus
becomes the employer of shoeworkers and the vender of shoes to the
citizens. But A, being a fastidious citizen, does not like the factory
product of the state any more than he formerly did the factory product
of private enterprise. Under the old conditions, he used to employ B, a
shoemaker who does not like factory work, a craftsman who likes to make
the whole shoe. Naturally, B was not willing to work for wages
materially lower than those he could earn in the factory. A willingly
paid enough for his hand-made shoes to insure B as much wages as he
would get in the factory. What reason could the state possibly have for
forbidding the continuance of such an arrangement between two of its
citizens?

Or take the case of a farmer maintaining himself and family upon a
modest acreage, by his own labor. He exploits no one, and the question
of inefficiency does not present itself as a public question, for the
reason that there is plenty of farming land available, and any
inefficiency of the small farmer does not injure the community in any
manner. What object could the state have in taking away that farm and
compelling the farmer to work upon a communal, p