(4.) Companies with limited liability resemble the preceding, with the exception that no previous authorisation is necessary for their constitution. It is sufficient to comply with the rules laid down by the law.

The contributions of the members in these different forms of association can be, and usually are, represented by documents called bonds.

(5.) Co-operative societies differ from others in the number of shareholders being variable, as also is the amount of their shares. They take as their aim the forming associations of workmen and artisans. The subscription, which is usually very small, can be paid in instalments to suit the convenience of small savers. The combination of these petty savings, which in isolation would have been powerless, constitutes a capital sufficiently large to obtain credit or to form the funds of an industrial enterprise.

The multiplication of joint stock companies is incredible. They are daily being started in every quarter and for every purpose. All new enterprises

and most old ones are constituted in this form, and methods of possession have been really transformed. Of the causes of this astonishing success we have already indicated the first in the ease with which a great capital may be formed by the combination of small capitals and a division of risks. But, in the second place, joint stock companies obtain the most capable men to direct their affairs, and their managers, instead of being appointed by the chance

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of birth, are chosen by election from among the most capable administrators. Again, these companies give to industrial property that democratic form which our era demands. The manufacturing industries, as they develop, take the form of immense enterprises, which oust the smaller workshops and artisans from the market. Of themselves they thus tend to constitute a kind of industrial feudalism. But joint stock companies, by dividing and partitioning the proprietorship of large enterprises into a vast number of shares, each of a small amount, enable even working men to participate in their success. Since property is the necessary complement of freedom, the aim of civilisation should be to render the head of each household the proprietor of the instrument of his labour-the farmer of his field, the workman of his tool, or a share of the colossal machine into which the tool is often transformed. If a labourer purchase a share in the industrial company which employs him, the problem is at once solved. The conflict between labour and capital comes to an end.

By one of those frequent and natural harmonies between the changes introduced in the methods of production and the methods of possession, the joint stock company has become common at the moment of the development of industry on a large scale. It thus favours a sub-division of property increasingly democratic.

BOOK III.

DISTRIBUTION AND CIRCULATION.

PART I.-DISTRIBUTION.

CHAPTER I.

DISTRIBUTION: RENT, WAGES, INTEREST.

THREE factors contribute to the production of commodities-nature, labour and capital. Each must have a share of the product as its reward, and this share, if it is to be just, must be proportionate to the several contributions.

The share of the natural agents is Rent. The share of labour, Wages. The share of capital,

Interest.

The clerk receives a salary; the lawyer and doctor, fees; the manufacturer, profits: salary, fees, and profits are so many forms of wages for services rendered.

As soon as the contributors have been rewarded with their several shares, they are able to make exchanges, and exchanges constitute the circulation of wealth. Distribution, therefore, precedes circulation.

CHAPTER II.

HOW DISTRIBUTION IS ACCOMPLISHED.

IN primitive societies such as existed before the rise of Rome, among the Italian tribes, and are still found in Norway and among the Slavs on the Danube, each father of a family cultivates his own patrimony, and produces all he consumes. Here there is no place for distribution; labour, capital, and natural materials are all in the same hands. Remuneration is always fair. Each man gathers that which he sowed. Energy is rewarded, and indolence punished.

When, however, the three factors are in the hands of different persons, and, in consequence of the division of labour, each depends on a process of exchange for obtaining what he consumes, distribution is no longer an easy matter, and no longer in such strict proportion to the several contributions. It is now brought about by the agency of an "employer," who pays each "factor of production" just as much as competition forces him to give, retaining the surplus as his own profit.

Let us follow the fortunes of a loaf of bread. The farmer pays rent to his landlord, wages to his labourers, interest to the banker from whom he borrows; the surplus left when all payments have been made is his profit. The corn arrives at the miller's. He, in his turn, makes a similar distribution to reward the labour used in grinding it. The baker, who turns the flour into bread, does the same. Last of all, the consumer who buys the loaf pays a price sufficient to replace the advances which farmer, miller, and baker have successively made by way of rewarding the three factors.

Obviously, if the employer owns either the natural materials or the capital he pays himself in the one case the rent, in the other the interest, or reckons it among his expenses.

CHAPTER III.

PRINCIPLES REGULATING DISTRIBUTION.

DISTRIBUTION is determined firstly by the civil institutions fixing the rights of individuals and the acquisition and inheritance of wealth; secondly, and subordinately to these, by authority, by custom, or by free contract regulated by competition.

The influence of the institutions of the state is plain. As in Egypt, the land, the great factories, and