The greatest thinkers of Germany had recognised the noble elements in the French Revolution. To recognise also the noble and promising features of French socialism was a natural thing, especially for Germans who had been in Paris, the great hearth of the new ideas. Here they found themselves definitely and consciously in presence of the last and greatest interest of humanity, the suffering and struggling proletariat of Western Europe, which had so recently made its definite entry in the history of the world. Thus socialism became a social, political, and economic creed to Karl Marx and his associates. But they felt that the theories which preceded them were wanting in scientific basis; and it was henceforward the twofold aim of the school to give scientific form to socialism, and to propagate it in Europe by the best and most effective revolutionary methods. The fundamental principle of the Marx school and of the whole cognate socialism is the theory of ‘surplus value’—the doctrine, namely, that, after the labourer has been paid the wage necessary for the subsistence of himself and family, the surplus produce of his labour is appropriated by the capitalist who exploits it. This theory is an application of the principle that labour is the source of value, which was enunciated by many of the old writers on economics, such as Locke and Petty, which was set forth with some vagueness and inconsistency by Adam Smith, and was more systematically expounded by Ricardo. The socialistic application of the principle in the doctrine of surplus value had been made both by Owenites and Chartists. It was to prevent this appropriation of surplus value by capitalists and middlemen that the Owen school tried the system of exchange by labour notes in 1832, the value of goods being estimated in labour time, represented by labour notes. The principle that labour is the source of value has been accepted in all its logical consequences by Marx, and by him elaborated with extraordinary dialectical skill and historical learning into the most complete presentation of socialism that has ever been offered to the world. A like application of the principle, but in a less comprehensive fashion, has been made by Rodbertus; and it is the same theory that underlies the extravagances and paradoxes of Proudhon. The question whether the priority in the scientific development of the principle is due to Marx or Rodbertus cannot be discussed here. But it may be said that, the theory had been set forth by Rodbertus in his first work in 1842, that the importance of the principle was understood by the Marx school as early as 1845, and that in a broad and general way it had indeed become the common property of socialists. The historical importance and scientific worth of the writings of Rodbertus should not be overlooked; nor are they likely to be when so much attention has been given to him by A. Wagner and other distinguished German economists.