the modern world has been attained under the capitalistic system of
industry. The system was not invented, but has developed and spread
from small beginnings because the experience of centuries has proved
it to be the best known system which is applicable to human industry.
The starting point of all material prosperity has been the gradual
development of government which suppresses violence and fraud, which
enforces contracts, and which makes possible the rise of the
institution of private property. The inception of the Industrial
Revolution, and its spread beyond England to Europe, America, and,
later, to Asia, were possible only because these bases of capitalism
were already laid. To a large extent, thus, the steam engine, the
railroad, the steamship, the electric light, and countless other
inventions which have helped to revolutionize the world we live in,
may be traced directly or indirectly to individual freedom and to the
protection of property rights. In so far as science, art, and
literature depend, to a considerable degree, upon material prosperity,
we may go so far as to say that capitalism is the most important
single basis of modern civilization.

100. DEFECTS OF THE CAPITALISTIC SYSTEM.--But capitalism is not
without its defects. The lack of centralized control in industry
allows of planless production. [Footnote: During our participation in
the World War, it is largely true that much of the productive energy
of the country was organized and directed as a unit. This was a
temporary expedient, however, resorted to for the purpose of winning
the war.] Entrepreneurs frequently produce without adequate knowledge
of demand, and without knowledge of rival production. When business is
booming and profits are high, it often happens that so many
individuals go into business that eventually there is over-production,
i.e. there are more goods at a particular time than can be sold at a