(3) The economic order is the basis of all social order; the entire legal and political structures of society, religion, and philosophy are to be explained in accordance with the economic basis. (4) The historic evolution of capitalism; how, from the fifteenth century onwards, the capitalist class was developed, and how a corresponding proletariat was created. (5) The capitalist class grows by the appropriation and accumulation of the surplus value contained in the product of labour, whilst the proletariat is reduced to a subsistence wage. It is social production and capitalistic appropriation. (6) Organisation in the factory; anarchy in society as a whole. (7) This anarchy is intensified, especially in the great commercial crises, showing that the middle class are no longer able to control the productive forces. (8) All these contradictions can be solved only by an explicit recognition of the social character of production. The proletariat seizes political power and transforms the means of production into social property. (9) The State, which has hitherto been an arrangement for holding the producing class in subjection, will become superfluous, and die a natural death. Henceforward, government will consist simply in the control of industrial processes. The work of Marx is a natural history of capital, especially in its relation to labour, and in its most essential features is a development of two of the leading principles of the classic economics—that labour is the source of value, but that of this value the labourer obtains for himself merely a subsistence wage, the surplus being appropriated by the exploiting capitalist. Marx’s great work may be described as an elaborate historical development of this glaring fundamental contradiction of the Ricardian economics, the contradiction between the Iron Law of Wages and the great principle that labour is the source of wealth. Marx’s conception of labour is the same as that of Ricardo, and as a logical exposition of the historic contradiction between the two principles, on the basis of Ricardo, the work of Marx is quite unanswerable. It is obvious, however, that the definition of labour assumed both in Ricardo and Marx is too narrow. The labour they broadly posit as the source of wealth is manual labour. In the early stages of industry, when the market was small and limited, and the technique was of the simplest and rudest description, labour in that sense might correctly enough be described as the source of value. But in modern industry, when the market is world-wide, the technique most complex, and the competition most severe, when inventiveness, sagacity, courage, and decision in initiative, and skill in management, are factors so important, no such exclusive place as has been claimed can be assigned to labour. The Ricardian principle, therefore, falls to the ground.