When these are once in hand, careful study will be given them in many quarters, and good must result.

"Fortune leaves always some door open to come at a remedy," and there is need, serious need, for our country to be relieved of the wasteful burden of annually producing and distributing an amount of periodical literature that is one and one-half times greater than the aggregate produced in all other civilized nations of the entire globe, while at the same time we have as a nation sunk so low, intellectually, that even Russia surpasses us in the number of new books and pamphlets published per million inhabitants per annum. CHARLES WILLIAM BURROWS.

Cleveland, Ohio.

BOOK REVIEWS.

The Cost of Competition. An Effort at the Understanding of Familiar Facts. By Sidney A. Reeve. New York: McClure, Phillips & Co., 1906-8vo, pp. xix +617.

By the Cost of Competition Mr. Reeve means the same as would be signified by the Cost of Business Enterprise; and cost means primarily waste of goods and work, but secondarily, also, the evil consequences of the régime of business in the way of hardship and moral, aesthetic, and intellectual corruption. There is relatively little in the presentation which is not in substance more or less familiar to economic students, although the whole is put in a more than commonly cogent and forceful way, and the analysis is more detailed and consistent than any that has, perhaps, ever before been given to the same topic. Mr. Reeve's apprehension of the facts with which he deals is not substantially different from views held more loosely by many of the younger generation of economists, though it stands out in sheer contrast with the views of business traffic current among the older generation of economists, particularly among those older economists who adhere to the scheme of the classical political economy. It is not that the economists of the schools are not aware of the range of facts with which the volume deals, nor is it that they are not aware of the general run of forces and effects that occupies Mr. Reeve's attention, but other things are felt to be of graver importance for economic theory. Economists currently find themselves less vitally interested in these facts of everyday traffic and growth and change, than in academic research into the hidden nature of things. It is not that economists are unable to see or even perhaps to appreciate the stupendous sweep of events in the modern market-place, nor even that they are averse to a consideration of the achievements of modern "capitalism," which Mr. Reeve makes so much of; but there is felt to be more weight for the science in the questions as to whether capital is to be conceived as a fund or as a flow, whether normal credit affects prices, whether rent is of the nature of interest or interest of the nature of rent, whether value is determined by marginal utility or by marginal disutility, etc. The present volume, therefore, is more novel in appearance than unfamiliar in substance.

Indeed, Mr. Reeve is apparently no more acquainted with current economic discussion than current economic discussion is with Mr. Reeve's subject matter. So, at least, one would infer from his nonconformity in the use of terms, as well as from the outline of economic theory with which the volume opens. For the fundamental principles, as expounded in the first 230 pages, Mr. Reeve avows his indebtedness to Henry George, and shows a degree of relationship to the physiocratic school that might even be called affiliation. Like them, he postulates a providential design, whereby the natural universe is conceived to work toward the fulness of human life. He defines "value" as "the potentiality of a thing for the support of human life and growth" (p. 16), reminding one of Adam Smith's "value in use", and gives the name "valuation" to what is commonly covered by the term "value." "Exchange" in Mr. Reeve's usage means a transfer of goods from hand to hand, whereas what is currently covered by the term "exchange" is here technically designated by the term "barter". There are a few more of these apparently gratuitous violations of usage, which have no visible justification. Indeed, they can only be a stumbling-block to any cursory reader without serving any useful purpose for a more attentive student.

The point of departure for the main argument is a distinction drawn between "productive" and "competitive" activity. This distinction is the same as has elsewhere been made between industry and business. Industry, productive activity, is the source of all wealth, whereas competitive business simply dissipates wealth, in so far as it is competitive. Occupations are classified under four heads (pp. 243-4), according as they are "entirely competitive", "chiefly competitive, but partly productive", "productive by nature, but contributive to competition", or "entirely productive". In the degree in which they are competitive their effect is "dissipation". In the chapter on "The Growth of Dissipation", Mr. Reeve finds, by an analysis of statistics, that during the last half of the nineteenth century the dissipation (loss) due to competitive business rose from about fifty per cent. of the total annual product in 1850 to about seventy per cent. in 1900. This conclusion is reached by comparing the incomes of the productive and the competitive classes at each of the two dates chosen. There need probably be no serious question as to the substantial accuracy. of Mr. Reeve's figures in this connection. It is, indeed, highly probable on the face of things that in the distribution of the product

at least seventy per cent. to-day goes to those who are occupied with competitive business, leaving not more than thirty per cent. of the whole as the remuneration of productive effort, taking the word "productive" in its most liberal sense. It seems even possible to generalize a step beyond Mr. Reeve's position, and say that under any free and consistent business régime the share of competitive business, as contrasted with productive industry, must grow at such a rate as to take up any amount by which the total product exceeds the minimum necessary to induce the productive classes to go on with the work.

But while few critics who appreciate the run of facts with which Mr. Reeve deals would question the legitimacy of his conclusions as regards the distribution of income, yet the question is likely to be raised whether the distribution of a given share of income to the competitive classes means the dissipation of that share of income by these classes. Mr. Reeve holds (p. 255) that under the competitive régime "the wealth actually lost to the community by dissipation is measured by" the income which goes to the competitive classes, the business men. But the old-fashioned objection here arises, that the business men do not dissipate the greater part of their incomes, but turn it to productive use as capital; whereby the community gains in increased future productivity all and more than it loses in yielding this income to the business men. The business men save and invest, and the community gets the benefit of the increased production due to the increase of capital.

A further consideration, however, not taken account of by the old-fashioned critics, will leave the point in doubt. While Mr. Reeve might well concede that the saving and reinvestment of income by the business men heightens the industrial efficiency of the community, and so increases the total output, the resulting increased investment on their part gives them a valid claim to a correspondingly increased share of the total output and leaves the rest of the community about as well off as they would be without such increased investment. The total output is increased, but the increment goes to the investing business men. As regards the fortunes of the productive classes, therefore, the direct and immediate effect of such saving and investment is substantially the same as if the business men in question had dissipated their share of the total income. Such is the drift of the main argument, the merits of which will, no doubt, be rated very differently by different critics. Whatever the

of the volume may be conceived to be, it is at least a

painstaking, fearless, and ingenious examination of the current economic situation. Yet mention is to be made of certain less commendable features of the book. The diction is lucid and cogent, but it is somewhat marred by recurrent outbursts of indignation, and there are long passages that would more fittingly find a place in a volume of sermons than in an economic treatise. Such passages are more frequent in the second (concluding) part of the volume, on "The Ethical Cost of Competition and the Future". Indeed, the bulk of the second part (pp. 347-607) is of this character. There are, also, occasional slips of logic, as where Mr. Reeve (p. 150) formulates his law of "The Conservation of Economic Energy" in the proposition that "The aggregate value [in use] currently produced in a community is equal to the aggregate valuation [price] currently distributed throughout its membership." He has previously shown (pp. 9-15, 149-150) that "value" and "valuation" are incommensurable.

But the greatest shortcoming of the argument is probably its failure to take any adequate account of the elaborately wasteful consumption of wealth that is inseparable from the régime of competitive business. Wealth is acquired competitively in order to be consumed competitively, that is to say, in order to be wasted competitively. Due attention to this side of competition would have strengthened Mr. Reeve's position, both as regards the wastefulness of the current régime, and as regards his optimistic appreciation of a conceivable non-competitive future.

Stanford University.

THORSTEIN VEBLEN.

Modern Social Conditions. By William B. Bailey, Assistant Professor of Political Economy in Yale University. New York: The Century Company, 1906 pp. 377.

As is suggested in the preface, this is an attempt to bring down to date Mayo-Smith's excellent "Statistics and Sociology." For this there was a real demand, as the data of Mayo-Smith's book have become so antiquated as to render the work unsuitable for further use as a college text.

Professor Bailey has abundantly supplied later data. He has also wisely discarded Mayo-Smith's cumbersome and formal method of treatment, and for his unsatisfactory introductory chapters substituted a good elementary account of the history and theory of statistics.