has hitherto failed to attain its object simply because it has been upon
the wrong road--that is, that the principles of political economy are
erroneous because, in deducing them from the economic phenomena, some fact
has been overlooked, some mistake in reasoning has been committed. There
_must_ be a correct solution of the problem of political economy; and the
solution of the social problem derived from the theory of social evolution
offers at once the key to the other.

The correct answer to the question, 'Why are we not richer in proportion to
the increase in our productive capacity?' is this: _Because wealth does not
consist in what can be produced, but in what is actually produced; the
actual production, however, depends not merely upon the amount of
productive power, but also upon the extent of what is required, not merely
upon the possible supply, but also upon the possible demand: the current
social arrangements, however, prevent the demand from increasing to the
same extent as the productive capacity._ In other words: We do not produce
that wealth which our present capacity makes it possible for us to produce,
but only so much as we have use for; and this use depends, not upon our
capacity of producing, but upon our capacity of consuming.

It is now plain why the economic problem of the disparity between the
possible and the actual increase of wealth is of so comparatively recent a
date. Antiquity and the middle ages knew nothing of this problem, because
human labour was not then productive enough to do more than provide and
maintain the means of production after covering the consumption of the
masses and the possessors of property. There was in those ages a demand for
all the things which labour was then able to produce; full employment could
be made of any increase of capacity to create wealth; no one could for a
moment be in doubt as to the purpose which the increased power of producing
had served; there was no economic problem to call into existence a special