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The Evolution of the State


§ 20. There are few points at which the historical conception of social life has so completely carried the day against the notions of natural right as in the debate about the beginnings of the state. It is true the favorite analogy of a plant-like or " organic " growth is not to be taken too literally. Also, it is undoubtedly true that after a certain advanced stage of culture has been reached the foundation of a state by contract is not only possible, but is substantiated by historical fact. But the essential point is not touched by such objections as these. The essential fact is that long before a " contract " in the sense required by the abstract conceptions involved in the notion of natural right, could have been entered into, that is to say, long before the peoples had attained the stage of culture at which such a conscious recogni tion of the developed idea of a political organization is possible, an instinctive banding together is brought about by the pressure -of the natural course of development,—a banding together of kindred for protection against common danger and common enemies.

This is the fundamental fact in the formation of all states. The principle of self-preservation which urges every living being to defend himself against every other being from whom danger threatens, leads, through the action of the natural bond existing between individuals connected by ties of blood, to concerted action in defense of a common existence.

All that comes to pass in the long course of the subsequent development of the state is traceable, finally, to this fundamental fact. None of the higher developed civilized states has yet been able to eradicate the traces of its childhood in respect of the fundamental importance which the need of a common defense and a common organization of force continues to claim.

And in this fundamental fact there is given the primarily democratic character of every primitive political body. This is not a national characteristic and does not distinguish any one people above others—a view which for obvious reasons has been acceptable to our historical school, whether they have been pleased to find that this peculiar feature characterized the Roman or the German people—but it is something that arises by universal neces sity from universally efficient causes. What is related by African travelers, as for example by Henry M. Stanley,' concerning the peoples of the interior of Africa, agrees, as respects this funda mental characteristic, with what we know of the earliest stages of development of the Romans and of the Germans, however great may have been the difference in point of race descent and later culture.

What Tacitus relates of the Germans is therefore something that holds true without regard to national lines of demarkation, and describes in its essential features a typical fact.

Here we find the state a living identity of people and army. Army and People were not discrete concepts in the early days.' The army was nothing more than the people under arms. The population, constantly armed as they when they were assembled, also constituted the army. Therefore the words which denote the army were used, even in later times, to desig nate simply the populace.

Accoutred with their weapons they congregate in the popular assembly where they transact such business as may be necessary even in the primitive commonwealth, in addition to the use of arms : determination on war or peace, punishment of offences and the like. Only matters of lesser importance are decided by the leaders alone ; the more important by the whole body.

This participation of the individual members of the community in public affairs is so profound that their life-activity may be said to be made up of war and the popular assembly. Between whiles they sleep and eat and idle, while house and fields are left to the care of the women, the aged and the infirm. Such is the life of these men.' § 21. For the purposes of a discussion introductory to the Science of Finance the meaning of this primitive form of the political structure may be indicated as follows : It is the embryonic form of public obligation which con tains the germs from which the various elements of the devel oped public economy are evolved by a process of differentiation.

In the first place, the personal factor is, at this rudimentary stage, still undifferentiated from the material [sachliche] factor. The individual member of the community not only contributes his personal service in the army, he also brings with him into the field whatever is required in the way of arms and accoutre ments ; for these he carries as his own from the day when, hav ing reached manhood, he is publicly invested with them in the assembly of the people as a symbol of his public dignity and obligation—as a mark that he has become part and parcel of the state.

A second fact is closely related to this first. The man's participation in the affairs of the commonwealth has not yet been differentiated into honor or privilege on the one hand and burden or obligation on the other. It is true, we are told by the writers on law that public law is distinguished from private law by the fact that in the former every right on part of the individual is at the same time a duty, and every duty a right. It follows from the nature of an abstract conception of the state which is guided by the requirements of certain accepted ideals rather than by the facts, that it should more or less con sciously blur the clearest distinctions that are brought home in a very sensible degree to men of the modern state. In the pri mitive state this distinction is not present, or at any rate it is but faintly perceptible. The great functions through which the state becomes a living entity in the activity of its members—military service and the popular assembly —are still, at this point of devel opment, both privilege and obligation alike. The opening of the assembly may be subject to delay for some two or three days because the men do not assemble punctually at the appointed time (this is evidence of a lack of discipline according to Tacitus, a result of liberty, of the absence of authority) ,—but so little does this go to show the contrary, that the significance attached to participation in the popular assembly by the free men of that time is to be taken as evidence of its being considered both an honor and a burden. Later on we find that the laws of the Ger man people impose severe penalties for absence from the popular assembly, relics of which have survived down to modern times ; but this again is but evidence to the same effect, though it does at the same time indicate a decreasing appreciation of the element of honor and privilege involved.

§ 22. Finally there is the third fact, of a division of labor in the work of the State—if we may employ the expression in its broadest sense—which comes in to disturb the primordial type of the primitive commonwealth and develops differences and contrasts which are absent at the outset, or at most are present only as imperceptible beginnings.

There are elected leaders, there are illustrious families, but there are no rulers and no subjects. The element of authority finds its field within the household of each individual citizen. The head of the household rules over wife and child, over the aged and infirm, over servants and slaves, but in the state there is no such sovereign authority. What there is of authority and subordination is nothing more than that necessary minimum of order that is indispensable even under conditions of the greatest and crudest freedom, if anything in the way of a commonwealth is to be possible at all.

On all hands there are visible the initial stages of a differen tiation that speaks of future culture, and without which even a very low form of social life is impossible. But the fundamental and characteristic fact remains that the work of the community is done directly by the members of the community, and without separation into a class to whom service is rendered and another class by whom the work is performed.

Incipient differentiation is perceptible in the consideration shown the priests, as also in the influence exercised in the popu lar assembly by those who are distinguished for deeds of valor or for superior sagacity. The decisive word, however, still lies with the assembly as such ; the speakers are listened to and the decision is then made.' In war there is of course a leader at the head of the expedi tion, but the leader and those whom he leads compete on com mon ground for the palm of bravery. It is a lifelong disgrace to outlive one's leader—" the leaders fight for victory, the follow ers for the leader." § 23. No doubt this delineation of a primitive commonwealth, even apart from the Roman historian's studied contrasts, has a charm for any thoughtful observer of political and social life. It appeals to us with all the bracing vigor of a breath from the primeval forest. Unfortunately it is impossible—it is contrary to the nature of all normal, historical evolution that this primitive community should ever meet the demands of advancing culture.

Let us first take up the point last mentioned.

If it is true, as our best thinkers claim, that history is to be con ceived of as a record of the education of the human race, then there is little hope that any autonomous association of peasants should ever be able to rise from their primitive rudeness to the full fruition of the potentialities immanent in humanity simply by a spontaneous exercise of their sovereign will.

Stanley' relates of Mtesa, the despot of Uganda, that he stood high above the plane of culture occupied by his people. To him alone was it due that a stranger could enter the kingdom of Uganda, as his people had not the slightest regard for human life or human right. The revolting atrocities of the despot were necessary in order to hold the plundering, thieving, bloodthirsty people in check. As a companion piece we have the account given by another traveler,' of the cannibalism raging in the free republic of Hayti, against which the authorities were afraid to take any measures because of the republican institutions of the country.

More fortunate circumstances in the way of culture or of natural surroundings may have availed to raise one people to a plane of development as much above the plane of others as the Germans of Tacitus stood above the Negro tribes of Africa; but the interval is never so wide that the salient fact expressed in this contrast loses its significance for any people whatever.

That is to say in other words : the relation of ruler and sub jects is a condition indispensable to any people that has an his toric mission to fulfill.

§ 24. While this contrast may originate in the difference everywhere observable between the higher endowments or nobler descent of certain individuals than of the majority of the people, it is also true that a progressive division of labor takes place, to correspond with the growth of the mass and the increase of the duties of the commonwealth, beyond what may suffice for the first crude beginnings.

Every widening of the extent of a small commonwealth of itself gives rise to the problem of the state, in that it removes the individual farther from the periphery of the aggregate. The problem lies in the question, whether the individual, from the standpoint of his own daily life, is capable of comprehending the interests of the aggregate. All the past experience of humanity has gone to enforce the fact that whenever a common wealth of free citizens has made any approach to a realization of its ideal, the indispensable condition of success has been that of small extent, and that every increase beyond the original nar row limits has also carried with it a dissolution of the primitive constitution of the state. Such has been the course of events in Greece and Italy ; such also in the countries of Germanic Europe.

This distance between the individual member and the environ ment of the community is further increased by the changes that take place at the other end of the scale, in that the course of evolution of the life of the individual results in an intensive culture. The indolent hunting tribe, which has not yet achieved steady habits of labor and knows no other activity than that of war and the chase, finds in this crudest form of participation in the affairs of the commonwealth the gratification of its impulse to action. An agricultural people with habits of industry, which has mingled its sweat with the soil and which guards house and home with a jealous hand, has therewith made so much of an investment, and this the interested individual balances against the claims of the commonwealth.

An intenser culture and an increase in the extent of the commonwealth accentuates the problem of the identity of the state and its individual members. The result is that with every step in the growth of these two factors the inherent contrast between man and the state finds expression in corresponding institutions calculated to bridge the interval. The sentiments, capacities, services, which the state requires are, as it were, segregated out from the body of citizens as such, and make their appearance as a plastic precipitate in the form of distinct classes and professions which the state sets apart for its own purposes. It is true, they continue to be constituent parts of the people ; but they are parts specialized for political functions, and differen tiate themselves continually more and more from the mass of the people, who for their part continually lose more and more of their civil character.

§ 25. The course of the resulting development varies from one period to another and from one people to another, but the essential features are everywhere the same. To the extent to which the conditions are present, to that extent the consequences will also follow.

In every case it is a gradual transformation in which certain features of earlier times long continue recognizable, in spite of constant change, but in which the successive stages are always closely linked together.

Whether we pass in review the thousand years between the founding of Rome and the final full development of the bureau cracy of the Roman Empire, or trace the permutations of the Germanic constitution in the states of Europe from the fall of the Roman Empire down through the Middle Ages to modern times ; whether in the one case we examine in detail the con trast between the plebeian and the patrician classes of Rome, between the optimates and the mass of the people, between the emperor, senators and bureaucracy on the one hand and the pop ulace of Italy and the Roman provinces on the other ; or whether in the other case we watch the development of the aristocracy and the professional official class out of the germ of nobilitas and trincipes among the Germans of Tacitus as organized in the service of the king after the Roman model, or bound to the glebe in the legal bonds of the feudal state, or under the form of the profes sional official class of the oncoming regime of absolutism, in peace or war, in judicial or executive office ;—all is but the outgrowth of a single fundamental idea.

A consideration of all these facts brings out two points of importance to the modern state : first the necessity of a high degree of division of labor in the work of the state, which results in a constantly increasing separation between the body of citi zens and the actual, effective political activity ; second the inex tinguishable reminiscence of a primordial union of citizen and state. The historical development has brought about a progress ive evolution of the former, at the same time that the latter has never ceased to be present to the eyes of humanity. During the very same centuries of the Middle Ages when the way was being prepared for the monarchical state and professional officialism, there arose in the mountains of Switzerland a reconstructed model of the primitive democratic commonwealth, while at the same time a different type of a free community, more nearly approaching the requirements of modern life, grew up in the mediaeval towns.

§ 26. Viewed from the financial standpoint, the division of labor in the work of the state results in a relation of the individ ual to the commonwealth in virtue of which the individual figures as the beneficiary of a number of services rendered by the state ; services which in the primitive form of organization are performed directly by the individual members of the commu nity.

It now becomes a problem how these offices of the state which serve the needs of each individual citizen, are to be com passed by extraneous means, after the direct and spontaneous participation of the citizen in public affairs has apparently ceased.

These extraneous means may be of various kinds. The simplest is the adoption and consistent application of the method which the division of labor has brought into vogue in indus trial intercourse in all the economic relations of life : paid service for which a compensation is rendered in economic goods.

As a matter of fact this simplest of all methods, consistently with the general course of economic development, does find an ever wider acceptance as time goes on. Every highly developed commonwealth gives evidence of the presence of this relation of bargain and sale in an ever increasing degree.

But this is not all.

For one thing, there are to be found at every epoch certain survivals of direct political activity by the body of citizens. In the midst of that process of erosion by which a professional army grows out of the folk-army, some remnant of the universal liability to military service continues to assert itself. In the midst of state absolutism which negatives all participation by the citizen in affairs of the commonwealth, the idea retains its vitality in the towns that it is the business of the entire body of citizens to decide on the management of municipal affairs.' Where the antecedents in the way of race character and histor ical experience of the people have favorably influenced the development of a commonwealth, the element of primitive pop ular autonomy retains a larger share of power and asserts itself in the struggle against the progressive division of labor.

Especially, the element of initiative and direct participation on the part of the body of citizens is awakened to a new life by any popular movement,—which is at its best nothing but an awakening on a large scale of the national spirit that has long lain dormant. And precisely this is the characteristic phenom enon of the present century. Not that this national sentiment has already attained a full consciousness of its own significance— we shall find in what follows that one of the chief difficulties of our finances consists in the inadequacy of that sentiment—but it can at any rate be said that a beginning has been made in our modern states which must either be a false step or must lead to further development in the direction indicated.

§ 27. The political activity of the body of citizens in the modern state ramifies itself in the following manner.

The substructure consists, significantly enough, of the group of activities which proceed on the supposition that the relation of the state to the citizen is that of an apparatus created to perform certain services for him. These activities are an exercise of the rights of suffrage and election, which can have no effect beyond a controlling interposition, and whose immediate office is simply to afford the aggregate of citizens a means of supervising the course of political affairs through the agency of their representa tives. But a rational exercise of the suffrage and the right of election, and more especially an adequate supervision of the affairs of state through their representatives, does not necessarily follow from the bare fact of the possession of civil rights by the body of citizens ; as a matter of fact the capacity for an ade quate exercise of these functions has to be acquired. This fun damental fact of political action therefore leads naturally up to a consideration of the facts relating to participation in the con duct of the every-day business of the state.

This brings us to that broad field of activity which we are accustomed to call " self-government." Within this field the citizen of the modern state is actually directly occupied with a multitude of public duties, quite in contravention of the principle of division of labor that dominates both private and public life, or at least his activity supplements the action of that principle.

The simpler the duties, the more moderate the requirements in the way of capacity and energy on the part of the citizen, and the more independent the working of self-government ; the more serious the duties, the greater the requirements, the more will the local self-government have to depend on the skilled and organized forces of the national administration. The administra tion of a small rural commune to this day rests in, or has at the present day reverted into the hands of men chosen from among the inhabitants of the place. In the administration of an urban commune, the larger the commune the more help does the ele ment of self-government require from the highly differentiated professional element, and the greater, consequently, the demands on its administration.

A third field is the great and burdensome one of military ser vice. All the way down from the beginnings of German antiq uity, with its folk-army gradually transformed by elevation and depression of classes, differentiated into a contrast of armed free men and unarmed bondmen, then developed into a military pro fession for the upper classes, followed in turn by an epoch of mercenary armies and professional soldiers,—through all these mutations in the development of the state, military service has remained a duty incumbent on the entire male population. Only, with the new era it has been reclaimed from its lowly and degen erate state, transfused with a new life and invested with a new dignity. After it had for centuries served to characterize the lowest social class, it has become again what it originally was— 'a universal duty of all able-bodied citizens.

In view of the difficulty of the problem involved in securing the defense of a modern state, the relation of this portion of the citizen's public duties to the unavoidable demands of a division of labor is naturally a very peculiar one. A juryman or a justice of the peace on whom the local self-government devolves the administration of justice, is, according to the premises of local self-government, endowed with an average capacity for the office simply in virtue of his character as citizen. The conscript on the other hand is so far subjected to the demands of a division of laber and of the professional nature of military service, as to be held for a long series of years to the strict discipline of the army very much after the fashion of the professional soldier. Division of labor in the work of the state here trenches so far on the domain of division.of labor in private life as to take the citi zen away from house and home for years together, simply in order to teach him what belongs to the adequate performance of military duty.

§ 28. While this enumeration covers the chief kinds of per sonal services rendered the state by the modern citizen, there are certain further considerations to be brought out in the same con nection.

In the first place there really is in the modern state, as in the states of the past, a sphere within which what we have held up as contraries are to be found united. It happens even to this day, under a peculiarly favorable conjunction of circumstances, that the demands of modern public life in the way of professional devotion to the public service, meet with sentiments and condi tions such that this vocation is not only adequately recognized to be the logical consummation of the duties of citizenship, but this recognition is also adequately carried out in practice. Where ever there exists an aristocracy which is possessed of an adequate comprehension of its own mission—the devoting of its energies to the conduct of public affairs—and is at the same time pos sessed of such economic means as will enable it to put forth its energies, not in the character of a paid official class, but with the independence that goes with an " honorary office," there the point is attained where the primitive ideal of civic duty coincides with the intensity of application required in the work of the modern state.

While among the rude men of the commonwealth of Tacitus the charm attaching to adventuresome deeds of violence was a dominant factor in determining the direction taken by the peo ple's activity, it may surely be hoped that at our present advanced stage of culture habituation to work through a period of a couple thousands of years has extended this charm to other activities as well. In point of fact, amidst the great complexity and intricate gradation of activities in the modern state it is not to be overlooked that there is a decided variation in attractive ness as between the different kinds of activities.

I may here refer back to the conclusions reached in the gen eral portion of this work (vol. i. secs. 135-137.) The intrinsic attractiveness as well as the dignity attaching to the work varies according to the nature of the occupation. The " honor ary office " [Ehrenamt] will therefore begin only at a point where a certain measure of this element is reached. The office of member bf parliament, or of the head of the affairs of state will partake of this character ; whereas the designation can have but a negative application when the office of juryman or justice of the peace is spoken of as an honorary office,—that is to say, negative in the sense of denoting the absence of compensation rather than implying a positive sense of dignity that leads the citizen to seek the office. Still lower in the scale of occupations, in the services performed by the constable or policeman, no efficacy whatever can be ascribed to the pleasure or dignity of office. And even of the grave duty of the defense of the fatherland an effective sentiment of this sort can be counted on, if at all, only in seasons of patriotic exaltation, certainly not through the tedi ous years of preparation and training.

The consequence is this. The aggregate of personal services required of the citizen by the commonwealth must appeal to different psychological motives according to the different tastes and sentiments of the citizens.

§ 29. As to details we find considerable variation from one country to another. Political usages, inherited differences in the tenure of property and in the social features connected with it, the form of the constitution of the state and the administrative mechanism, and other like causes, have resulted in variations which come to figure in the eyes of the one state as national peculiarities attaching to other states. The practical working of the state mechanism within the lines imposed by these pecu liarities, then, suggests the question whether this or that existing institution is the more serviceable. But after allowing for these national variations there remains for any given epoch a certain essentially common ground, in consequence of which services of a similar character come to be performed by means of similar contrivances.

The great contrast in point of psychological motives that is brought out in political institutions is the contrast between vol untarism and coercion.

Not that the system of voluntarism on the one hand and that of coercion on the other comprehend each a homogeneous mass of sentiments ; there is no such uniformity either as regards the sentiments of the individual citizen or as regards the different classes of activities. But this much is true, that there are cer tain comprehensive groups of activities with respect to which we can say that in order to a given result a given pressure is required, whether the motives appealed to be external or subject ive. And just as the subjective motive has at its disposal impulses of greater or less intensity, so also may the appeal from without, the factor of coercion, be of different degrees of energy. In the former case we have the great attractiveness of the foremost offices of the state contrasted with the feeble inducements offered by obscure honorary positions in the everj7 day service of the community ; in the latter case we have the slight penalties attaching to neglect of jury duty as contrasted with the severe penalties of the military code against deserters.

The exacting coercive measures adopted as regards the fundamental—and the greatest—duty of the citizen contrast sig nificantly with the conditions that prevailed during the early stages of political development. In the early days war was the man's chief occupation, invested as it was with all the charm which its contrast to steady work lends it during those ruder stages of culture ; while today peaceful industry is the central fact of life, and military service is an unusual employment which the peace able citizen avoids as far as may be.

The exacting demands of a highly developed military art also require a strictness of discipline which cannot at this day be enforced without forcible coercion, except in cases where an unusual degree of national sentiment is present.

§ 30. It is moreover highly characteristic of the develop ment of the sobial substructure of a modern state, that the exer cise of precisely this most important of all the functions of citi zenship cannot be required at the hands of the modern citizen without the intermediation of an economic factor.

True, the new era, with its rehabilitation of citizenship, has infused a new spirit into the duty of military service handed down from past centuries. Liability to cantonment on part of the lower classes of the population has, by virtue of the new demo cratic ideas, been developed into the general liability of all citi zens to bear arms. But the development of this ignoble service into a duty of citizenship, the conversion of what was a one sided burden into a privilege belonging to all citizens alike, has not altered the traditional economic basis on which the structure of modern life in state and society rests. The altered spirit, the altered sense of dignity with which the majority of the people meet the requirements of the common defense today, still leaves the fact unaltered that this same majority are economically incapable of rendering their personal service to the state, unless the livelihood for which they usually depend on a society organ ized on a basis of division of labor is furnished them by a similarly organized state.

At this point, therefore, the material factor enters as a men struum into the system of civil activities and duties. Only for a small portion of the aggregate body of citizens is it possible to offer their personal service to the state on the basis of their own possessions, as is seen in the so-called volunteer service. For the great majority, who are accustomed to live by the labor of their own hands and who lose their livelihood as soon as their labor ceases, means of subsistence furnished by the state must be supplied.

We have, consequently, a combination of the personal serv ice of the citizen with a material factor which has to be drawn from contribution made by the entire body of citizens.

This is the point at which the modern concept of democracy diverges from that of antiquity. The early, original view con ceived the state to consist in the equal participation of all men ; this equal participation being possible on the basis of an equal ity of social conditions. The modern concept of a democracy on the other hand sets out with the undeniable fact of social inequality, the fact of the pecuniary feebleness of the majority, and those measures are now-a-days called "democratic" by which the state seeks to come to the aid of this economic inca pability. Where the ancient concept of democracy, owing to specially favorable circumstances, has maintained itself down into modern times, as in the cantons of Switzerland, the ancient usage has continued in force down to the present, the man who is liable to do military duty being required to provide his own equipment, and only very lately has the old usage yielded before the neo-democratic principle. In ancient Rome it was, signifi cantly enough, the Gracchi who were the advocates of this neo democratic While the senate had enacted, in laws dat ing from the years 406, 403, 401 B.C., that citizens serving in the infantry were to be paid out of the public funds, it is a law of Caius Gracchus that for the first time directs that the clothing of citizens liable to military service is to be furnished them gra tuitously by the state.' § 31. This undermining of the earlier democratic concept of the state by the modern social organization and its division of labor comes out even more distinctly when we consider that not only has the great body of the lower classes become unable to contribute their service to the state without pay, but that even for the higher classes a system of payments for all kinds of pub lic service gains ground continually more and more, in so far as this service interferes with the everyday business of private life beyond a brief occasional interruption. Hence the payment (allowances, mileages) even for the highest and most honorable activities in political life,—a payment due to the exigencies of modern society which continually leaves a relatively smaller num ber of its members the leisure required for the business of the state, at the same time that it finds it desirable to afford a con tinually larger number of its members access to a participation in the state's business.

Modern society has not yet passed through the final stage of this development, though antiquity has done so in the decline of its republican institutions, both in Rome and Greece. The point is reached when even the last shriveled residue of public activity, the bare attendance in the popular assembly, is paid for out of the public funds ; when the place of the privileges of citi zenship is finally usurped by a public alms.

Modern states will be wise enough to avoid this final conse quence of deterioration. But in the situation as we find it, the unavoidable necessity for any modern state of employing a system of material compensation in order to insure the exercise of the per sonal duties of citizenship is manifest. This material compensa tion is nothing but the economic equivalent of those personal activities which, having themselves come to bear an economic character, require an economic return.

§ 32. The considerations brought out in the last few pages bring us face to face with that great system of economic ways and means [Leistungen] on which all modern states rest. How ever imperative the need of participation in political affairs in the present century may be ; however indubitably every reason able gratification of this demand may lead and may have led to a progressive development of the citizens' political activity ; the fact remains after all that the growth of the economic character of modern state activity comes constantly more and more into the foreground. In other words, the state is developing a con stantly growing public economy, based on the exchange and circulation of economic goods.

It lies in the nature of the division of labor that it acts con stantly and progressively to erect each particular form of activity that serves the purpose of society into a distinct trade stand ing in economic relation to all other occupations. And the state itself partakes of this development, in that the special services it renders are offered in the form of professional per formance of the work of the public economy, in exchange for all other kinds of work. But since the underlying principle of industry requires that these services be paid, there arises the need of material wealth (money) that will serve as an equivalent for this work in this as in any other business transaction.

But this covers only one category of the offices incumbent on the state.

A second category is constituted by the material apparatus required in order to the proper exercise of the personal activities that make up the state's work. It is only in the early beginnings of political organization that courts of justice are held under the open sky ; a civilized state requires extensive structures for the purposes of the administration of justice. It is only in the first rude beginnings (of which, it is true, survivals may be found here and there in our civilized communities to this day) that offenders are punished with the summary severity that dispenses with the expensive structures and maintenance of prisons. It is only the folk-army of primitive days that is acquainted with no breast works but what are thrown up on the spur of the moment ; the progress of the art of war, and more distinctly still the stupend ous development of military science in modern times, involves the sinking of a continually greater portion of the nation's wealth in fortifications, strategic roads, naval vessels. The mod ern phase of public economy is characterized throughout by an increase of the capital invested in material appliances, and these serve to indicate what is the current conception of the state's function. Our schools, universities, museums, libraries, archives, etc., may be called to mind.

§ 33. We shall accordingly have to conceive of the public economy after a fashion analogous to what we already know to be true of the economy of the people in general. In the fore ground we find a great mass of industrial goods, industrial exchange, industrial capital, growing greater with eveiy fresh advance of civilization ; in these latest times so markedly occupying the foreground that current popular opinion sees nothing but this phase of the matter. Beside this and diffused through it, barely manifest, or at any rate quantitatively incon spicuous, we have that multitude of non-economic potentialities which derive their force from motives of a higher order and figure as the gratuitous effects of civilization. It is also not progress simply as such that fosters this relatively great development of the economic factor in the state ; this phenomenon is referable to a one-sided progress within the particular epoch of cultural development in which we live. A development of a higher form, which shall leave this stage behind, is not only possible ; it lies within the sweep of the modern concept of the state, and it is even distinctly foreshadowed by the contradictions existing in modern national life.

However, for all practical purposes, and for any period of time that it is necessary here to take into consideration, the pub lic economy remains the central fact of national life. Indeed, the most immediate problem in actual practical affairs concerns the inculcation of such an intelligent insight as shall comprehend the reasonableness and the necessity of this traffic on the part of the state, in order that the individual citizens may come to live up to their duty as loyal members of the commonwealth.

For, spite of all declamation about political liberty and the dignity of citizenship with which our century resounds, the modern man still falls so far short of the true political disposition and political insight, that it will yet for a long time continue a difficult and necessary task to impress on his stubborn spirit the utter necessity of the state, and, since he is neither willing nor able to devote his energies to the service of the state, to bring him to an honest recognition of the economic consequences for the state, that result from the modern system of division of labor in private and public affairs.

The following pages are an attempt to contribute what I may oward this end.

modern, public, people, service and political