1. In the Slave-owning Society, or SERVILE STATE, a certain minority owns a determining amount of the wealth and also of land--that is, the means of production (land and capital) and the wealth ready for consumption in enjoyment. The rest of the community is compelled by positive law to give its labour for the advantage of these few owners; and this rest of the community are, by economic definition, (whether they call themselves by the actual name or not) slaves: that is, they can be compelled to work for the owners, and can be punished by law if they do not work for the owners. 2. In the CAPITALIST STATE a determining number of the families or individuals are free; that is, they cannot be compelled by positive law to work for anybody. They are at liberty to make a contract. Each can say to an owner of land or capital: “I will work for you for so much reward, such and such a proportion of the wealth I produce. If you will not give me that I will not work at all,” and no one can punish him for the refusal. But the mark of the Capitalist State is that a determining amount of land and capital is owned by a small number of people, and that the rest of the people--much the greater number--though free, cannot get food or housing or clothing except in so far as the owners of these things (that is, of the means of production) choose to give it them. In such a state of society the people who own nothing, or next to nothing, are free to make a contract and to say: “I will work on your farm” (for instance) “if you will give me half or three-quarters of the harvest. If you will not, I will not work for you.” But this contract is bound by a very hard condition, for if they push their refusal to the limit and continue not to work they will starve, and they will not be able to get housing against the weather or clothes to wear. We are living to-day, in England especially, in such a Capitalist State. In such a state the free men who contract to sell their labour often have a certain very small proportion of things on which they can live for a short time. They have a suit of clothes and perhaps a little money with which they can purchase a few days’ livelihood--some of them more, some of them less. But the tone or colour of the society is given by the fact that _the great majority, though free, are dispossessed of the means of production, and therefore of livelihood, and that a small minority controls these things_. The word “Capitalism” does not mean that there exists capital in such a society. Capital exists in all societies. It is a necessary part of human society and of the production of wealth, without which no society can live at all. The word “Capitalism” is only “shorthand” for the condition we have just described: a condition where capital and land are in few hands though all men are free.