ABSTRACT
Economic theories may be placed in four groups according to the remedies proposed for unemployment and business depression, as follows: reduction of wages, reduction of profits, rent and interest, free banking, and bank regulation. The inequality-of-ownership group of theorists, with their remedy of reduction or elimination of the rents, profits, and interest that arise from inequalities of private property, have, as their outstanding economist, Karl Marx, followed by the entire socialistic school, the leading modern representative of which, from the standpoint of economic theory, is J. A. Hobson. Hobson’s mechanism calls for a thoroughgoing action of government in all lines of industry: an obligatory minimum wage in all employments, government ownership or at least control of wages, prices and other conditions, and taxation of surplus earnings. Hobson’s principal criticism of the business economists is that their remedy of reduction of wages in time of depression overlooks the preceding lag of wages in time of prosperity.
