would otherwise have gone into some other employment [not necessarily so]. At such time wages in his particular occupation rise. If we suppose, what in strictness is not absolutely impossible, that one of these fits of briskness or stagnation should affect all occupations at the same time, wages altogether might undergo a rise or a fall."

Now what can be more contradictory to the doctrine that "demand for commodities is not a demand for labour, and does not affect wages," than these two last passages? What need have we to refute Mill when he has done so effectually himself?

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This doctrine of Mill's is so contrary to common sense that it would seem waste of time to refute it. But if it wanted refutation, what more excellent example of it can be had than the evidence and report of the Coal Committee? It was there distinctly proved that the price of iron rose immensely from the enormous demand for it; the immense demand for iron caused an immense demand for coal, and accordingly its price rose immensely the increased demand for coal, and its increased price, caused an immense demand for labourers, and their wages, too, rose very greatly, though not in proportion to the rise of coal. Who after this can say that a demand for commodities is not a demand for labour? Who can say that an increased demand for the commodity does not lead to a rise of wages? We have already shewn that it is now well understood by the workmen that the "wages fund" is not existing capital, but the Price of the commodity produced; and their wages must rise and fall according to that price. We have shewn that agreements are regularly made that wages shall rise and fall with the price of iron and coal.

Mill's doctrine is founded on the exploded fallacy of Ricardo that it is "cost of production" or "quantity of labour" which regulates Value: without at least denying that it sometimes does so, we have irrefragably proved that it is as often just the reverse: and that it is the increased price of the product which provides an increased fund to be divided between masters and workmen : and of this the report of the Coal Committee is a pregnant and decisive instance.

We have thus shewn that Mill's fourth fundamental proposition regarding Capital is as baseless and untrue as the preceding three: and therefore it is wholly unnecessary to consider any more

illustrations he may give. But there is one doctrine of his so extraordinary that we cannot pass it over

"The consumer has been accustomed to buy velvet, but resolves to discontinue that expense, and to employ the same annual sum in hiring bricklayers. If the common opinion be correct this change in the mode of his expenditure gives no additional employment to labour, but only transfers employment from velvet makers to bricklayers. On closer inspection, however, it will be seen that there is an increase of the total sum applied to the remuneration of labour. The velvet manufacturer, supposing him aware of the diminished demand for his commodity, diminishes the production and sets at liberty a corresponding portion of the capital employed in the manufacture. This capital thus withdrawn from the maintenance of velvet makers, is not the same fund with that which the customer employs in maintaining bricklayers: it is a second fund. There are therefore two funds to be employed in the maintenance and remuneration of labour, where before there was only one. There is not a transfer of employment from velvet makers to bricklayers (?): there is a new employment created for bricklayers, and a transfer of employment from velvet makers to some other labourers, most probably those who produce the food and other things which the bricklayers consume."

We pause for our readers to examine this astounding doctrine. According to Mill, if all the buyers of commodities were suddenly to discontinue buying them, and employ those very funds which were previously used in buying commodities in hiring labour, it would double the labour fund!! Is it necessary to point out the obvious arithmetical blunder on which it rests? The reader will perceive that by Mill's own supposition the velvet makers are left unemployed. The labourers who are called upon to provide the food and necessaries for the bricklayers, previously provided that food for the velvet makers. Of course, if the velvet makers are left without wages they must starve, and cannot buy food: but the bricklayers can, because the very fund which formerly bought the velvet makers' food is now given to the bricklayers, and buys their food. To the producers of food it makes no difference whether they sell it to bricklayers or velvet makers. But by Mill's arrangement he has simply taken away the funds from the velvet makers, whom he has left to starve, and given them to the

bricklayers, and by doing this he says the labour fund is doubled !! It is plain that so far as regards the food-producers it is only substituting bricklayers for velvet makers, and there is therefore no increased demand for food. Thus, according to Mill, to take away a fund from one set of persons, and to give the very same fund to another set, is to double the fund!! Most wonderful logic! This is truly the discovery of the Philosopher's Stone.

We have now found the grand secret to multiply a fund any number of times. According to this doctrine, robbing Peter to pay Paul doubles the fund. If taking away the fund from velvet makers and giving it to bricklayers doubles the fund, then taking it away from bricklayers and giving it to carpenters, triples it: taking it away from the carpenters and giving it to ploughmen, quadruples it, and so on to any extent. Why should there ever be any want of funds to employ labour when they can be found so easily, simply by taking them away from some one else?

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Experience suggests to us a case where the application of this doctrine would be highly satisfactory. When Paterfamilias has a lot of boys clamouring for pocket money, he has only to take half-a-crown out of his pocket and give it to Roderick: Roderick is paid. Paterfamilas then takes away the half-crown from Roderick and gives it to Crichton: Crichton is paid. Paterfamilias then takes away the half-crown from Crichton and gives it to Keith Keith is paid. Paterfamilias then takes away the halfcrown from Keith and replaces it in his own pocket. By this means each of the boys has been paid his pocket money, and Paterfamilias has got it in his own pocket as well. It is possible that Roderick, Crichton, and Keith may not fully comprehend the nature of this operation: at all events, Paterfamilias is quite satisfied with it. If the boys feel any difficulty about it, if they have an imaginary vacancy in their pockets, where the half-crown is not, Paterfamilias simply refers them to Mill, the logical Pope of the British people, who will explain to them quite satisfactorily that by this operation the fund has been quadrupled, and that they have each had their pocket money, and leaves them to digest this elementary lesson in Logic and Economics as best they may. And this is a principle of very extensive application; which shews that Economics is well worth the study of all Patrumfamiliarum.

We may, therefore, dismiss Mill's fourth fundamental proposition regarding Capital to the same limbo as the other three.

And we cannot help observing that this is a striking example of the folly of literary men writing on subjects of which they have no knowledge. Here is a whole chapter of Mill, containing 30 pages, which is a complete mass of errors in itself, and on each separate part of it we have shewn that Mill has contradicted himself. And thus the young student's mind is filled with erroneous notions on the fundamental principles of the subject, which he must utterly exterminate if he would understand modern

commerce.

On the WORKMAN'S SHARE OF THE PRICE.

62. We have seen that the rough, coarse statement that the "Wages Fund" is simply existing Capital, and that the average Rate of Wages is simply the ratio between this capital and population, and that all the labourers in the kingdom-lawyers, medical men, carpenters, artists, clerks, ploughmen, artisans, &c.— are competing for this fund, and so obtain an average of about £2 a year, is a simple absurdity. Smith long ago observed that the same piece of money pays different persons' incomes in succession" The amount of the metal pieces which are annually paid to an individual is often precisely equal to his revenue, and is upon that account the shortest and best account of its value. But the amount of the metal pieces which circulate in a society can never be equal to the revenue of all its members. As the same guinea which pays the weekly pension of one man to-day may pay that of another to-morrow, and that of a third the day thereafter, the amount of the metal pieces which annually circulate in any country must always be of much less value than the whole money pensions annually paid to them." If writers had only thought of this obvious truth of Smith's, they never would have committed such an error as saying that the average rate of wages is simply the ratio between population and capital. At all events, even supposing that it consisted of nothing but specie, it would be the amount of specie multiplied by the number of times it is paid away in the course of the year. However, even that is a very inadequate account of the Wages Fund. And to suppose that the average rate of wages is simply the ratio between capital and workmen is as absurd as to suppose that the average price of goods is simply the ratio between goods and specie.

1 Wealth of Nations, B. II., ch. 2.

The true fund which provides for Wages, Profits, Rent, Cost of Materials, or anything else, is the Price of the product: and in case of necessity this fund is anticipated by means of Banking Credits.

This is the fund, and, in ordinary times, this only is the fund, which Capitalists and Workmen have to divide between them: it can by no possibility be exceeded, and, of course, the higher the price, the greater is the fund for division.

But the whole of this fund is not available for division: first of all there must be deducted a sum sufficient to maintain all the fixed and circulating capital in efficient repair and full working order. Then there must be also deducted a fair interest on the sum invested as fixed and circulating capital. Every intelligent workman must admit that the capital must be maintained in full efficiency, and also produce the average rate of interest, or else it would be removed from that species of occupation to something else. So the payment of rent must also come out of it, which is only another name for interest on capital. After making these deductions from the price of the product, the remainder is the fund available for division between masters and workmen, as the reward of their labour-labour, of course, including skill as well as manual industry.

Masters and workmen, however, often take different views as to the principle on which this fund should be divided.

The masters' view often is, that Labour is simply a commodity, which has its market value like any other, governed by the general law of Demand and Supply: and that the workmen have no right to inquire into the profits which they make by their skill and foresight, or which may accrue to them by a favorable turn in the market.

Workmen, however, are often far from agreeing to this view of the matter. They, or at least the reasonable ones, admit that the Capitalist is entitled to fair profits on the capital engaged, and also to a reasonable reward for skill, management, superintendence, &c. After that, however, they think that the remainder should be divided among themselves as wages.

To which the masters reply, that in many cases in certain trades, the business is often carried on at a heavy loss, and that if the workmen are to appropriate all the profits to themselves, they must also be called upon to share the losses: which is, as a