that the workmen in any particular trade are in distress? Because there is not a sufficient demand for their labour. Because that species of labour is over-abundant. All commercial difficulties arise from over-production, in one form or another, and never from under-production. And all commercial difficulties may be reduced to this general form of expression, that traders have provided, or got on hand, more of some commodity than is suitable for the circumstances of the time. And this is equally true, whether it arises from incautious speculation in that particular article, or whether it arises from some great deficiency in some great staple article of food, as corn. Because, if through a great deficiency of food the price of it rises very high, and takes away the custom from other articles of commerce, which lowers their price, and injures their holders, still the same general expression is true, that they are brought into trouble by having more of certain commodities than is suitable to the circumstances of the time. And this is over-production, no matter from what causes it arises. To provide more of any article then, which is already overabundant, can only aggravate the evil. What is really wanted is more demand. Now the State can, of course, if it pleases, produce, but it never can create demand. Consequently the only result which those who produce, by extraneous assistance, more than is wanted, can effect, is to aggravate and extend still further the area of suffering, and to reduce those who can maintain themselves to the same state as those who are already dependent on the public. Consequently, if the right to labour be admitted, it is indispensably necessary that the work provided should be of some nature wholly different from the workman's usual occupation; and, indeed, it ought to be work which does not come into competition with any independent workman. And this is precisely the difference between the French droit au travail and the English Poor Law. In England the droit au travail is admitted. It is English Law that if persons cannot find work to support them they are entitled to seek work from the State. The sole, but most essential, distinction in principle is, that the French doctrine is that the work provided must be such as the workman pleases, the English doctrine is that it must be such as the State pleases. This is enough on this point for this place. We must defer any further remarks till the Chapter on Poor Laws.

66. We may observe that Mr. R. Kettle, County Court Judge of Worcestershire, a gentleman of great experience and success in adjusting disputes between masters and men, takes exactly the same view of the "Wages Fund" as we have set forth in the preceding paragraphs; that it is not simply existing capital, but the price of the product. He says "In the old established relation between master and men, the experience of many years had fixed the price at which it was safe for the employer to guarantee full work: and for the journeyman to accept a certainty. rather than incur the risk of independent trading. By tacit consent, founded upon long experience, there was a rate from which in good times wages would rise, and in bad times fall. In the shoe trade variations in wages were very small. The journeyman knew well the selling price of the article he made, and what the material cost, and he could easily work the simple arithmetic which would tell him his wages fund. Both parties knew that if the proportions of profit and wages were not fairly adjusted the workman could, by the exercise of a little thrift and self-denial, emancipate himself from the position of a journeyman. There was no trouble about adjusting demand and supply: they were convertible terms with production and consumption, and these two were near neighbours, so that the work of the hands easily balanced the wants of the feet.

"Now, let us look at the factory operative and the mill owner meeting to make a bargain. First as to the normal rate of wages. That will depend upon how you constitute the wages fund. The most fruitful source of disagreement between masters and men at present is the uncertainty as to what portion of the exchangeable value of the joint product of labour and capital-that is, of price -should go into the wages fund. There is a complete unity of interest between masters and men throughout the whole course of production and exchange-their interest is that the combined action of capital and labour shall produce as much as possible, and that the product should exchange for as high a price as possible. Immediately the commodity is converted into price their interests diverge the employer's interest then is that a large portion of price should be reserved for the profit fund-the workman's interest is that a large portion should go into the wages fund.""After making certain payments, such as replacement of material, 1 Masters and Men, p. 18.

maintenance of plant, ordinary interest upon capital, premium to cover risk, and that disputable item, cost of management, the balance of price then in the hands of the master is what should be divided between the wages fund and the profit fund. The crux of the problem is, what portion of this balance should be paid to each."

And again, on receiving a testimonial for his successful arbitration in a question of wages at Middlesborough in 1869, he said"Price is the fund out of which both profit and wages are paid. This fund comes into the hands of the master for distribution."

Thus we may now take it to be an exploded fallacy that the wages fund is simply existing capital: it is the price of the product, subject to the deductions which have been pointed out, and the real question is to determine how the balance of price may be most equitably divided between masters and men; and if either party is dissatisfied with his share, what remedy is there for settling the point. But as this chapter has already extended to so great a length, and the various methods which have been proposed for adjusting the relative claims of Labour and Capital to share the common fund out of which both wages and profits are paid, will require much consideration, it will be more convenient to defer it to a future chapter, especially as such questions come more properly under the title of mixed Economics, as they involve a combination of Morals and Economics. The same observation is true respecting all Laws which regulate the hours of Labour; they involve questions of Moral duty as well as Economical effect, and will be more properly discussed hereafter.

67. In the preceding remarks we have only considered the exchangeable relations between labour and wages, or the money paid for it. Of course, the quantity of money paid for labour affords no indication of the well being or comfort of the labourers. The real reward or revenue of the labourers consists, not in the metal or paper pieces paid to them, but in what these signs or tokens will exchange for; in the lodging, food, clothing, and other necessaries or enjoyments the labourer can buy with them. Some writers, therefore, call the money wages, nominal wages, and the necessaries and comforts of life they will purchase, real wages. Again, Ricardo speaks of another kind of wages-proportional wages, namely the proportion of the produce of labour which the

labourer receives, and these various kinds of wages, natural wages, market wages, nominal wages, real wages, and proportional wages, are so mixed up together in his discussions, that it is frequently extremely difficult to disentangle these perplexed and complicated considerations.

No doubt it is very interesting and important to ascertain the relative position of the labouring classes, whether it ameliorates or deteriorates from century to century. But such an inquiry is not precisely Economics. Such comparisons can only be made by obtaining the most elaborate statistical tables of the Rate of Wages of all classes, and in all localities, and the prices of all sorts of commodities, and comparing them together. These, no doubt, are deeply interesting to the Statesman and the Economist; but they are Statistics, and not Economics. The relative values of money, wages, and commodities at different periods are statistical facts, and Economics only investigates the theory, or the causes why they change from time to time.

In the same way it is no part of Medical Science to know that there were all sorts of horrible diseases in the Middle Ages, black death, plague, sweating sickness, which are happily unknown now. That is Medical Statistics. It is the duty of Medical Science to investigate the causes of these frightful pests, and to point out the remedy for them if possible, not to register the facts.

Now an inquiry of the nature spoken of above would not be properly within the purpose of this work, which is intended to investigate the principles which determine changes of value. To be of any use it would require to be of very large extent. Smith has given some slight tables of the price of corn and a few statistics. But they are so meagre and imperfect as to be of no practical use. Most of the tables which have hitherto been used by Economists are now acknowledged to be entirely unreliable. If any persons wish to pursue such inquiries, they must consult Professor Thorold Rogers's laborious and extensive work, The History of Agriculture and Prices; for a later period Tooke's History of Prices; and for recent times, the volumes of the Economist will form an unequalled repertory of statistical information for all future inquirers. We may be quite certain that the exchangeable relations between Labour and Wages, and between Wages and Commodities, are each governed by the same general law of Economics. The real wages of the labourer will always

increase when the demand for his labour and the ratio of the quantity of the produce to labourers increases; and they will diminish when labourers increase faster than the demand for them, and the quantity of produce; and the only thing is to observe how this law acts in any particular cases.

68. We must now bring this long chapter to an end, not because its applications are exhausted, but rather, on the contrary, because they are so extensive and various, that to exhaust them would be far too long for a general elementary treatise such as this. Having set forth the general principles which can be shewn to apply to all cases, the further application of these general principles must be left to those who care to pursue the subject more minutely and exhaustively. We may simply remark that, as of everything else, Demand is the sole cause of the value of labour, and of its produce. It is Demand only which causes labour and its produce to be Wealth. In recent times far too much attention has been given to the Producer, and far too little to the Consumer. Working men are constantly in the habit of proclaiming themselves to be the creators of all Wealth. But working men are not the creators of all Wealth. Was it working men who created corn, or made it grow? Did working men create cattle and all sorts of flocks? Did working men ever create any material substance whatever? Did they create the stone of which palaces are built? Did working men create the great sciences which have done so much for mankind, and by which so much of their labour is directed? Did they create the land? Did they create the skill, the foresight, and the Credit, by means of which modern commerce is carried on? They did none of these things. They bring nothing but their labour to transform and transport the materials furnished by nature, to supply the wants of others. And whatever they may do, it is not their labour which constitutes a thing wealth, but the demand of the Consumer. The Producer and the Consumer are both indispensably necessary to each other; and it is only by their joint action that anything is wealth. Wealth, says Arthur Young most truly, consists in circulation and consumption. Of what use would it be for working men to build miles of palaces if nobody wanted to live in them? Or to grow corn and bake bread, if there were no consumers to eat it? Or to make furniture, clothes, or watches, if there were no one to buy