of Factory Acts has not hitherto been to destroy or supersede the market, but to regulate certain conditions that, as a rule, do not enter into the bargain at all. The present proposal, on the other hand, has the appearance of an attempt to supersede the market altogether as being an injurious and inequitable tribunal. This distinction between regulation of condition and regulation of wages may be untenable; but, in any case, the policy now proposed requires consideration, if not because it involves a new principle, then because it is a very large step forward in accordance with a precedent hitherto occasionally rather than universally applied. In no civilised country, so far as we are aware, have statesmen accepted in its entirety the view that exchange involves injustice and robbery, and that wages and occupation must be determined by other than what we may call 'market' considerations. Exchange, we may take it, is the organising principle characteristic of a society which has for long been passing from a condition of status to one of contract. There have been, and are, during this passage, dislocations of industry, the result of inevitable change; and those dislocations may engender explosive force to the danger of society at large. government rests ultimately on force; and responsible rulers have always felt themselves justified in forcibly interfering with property and with the organisation of exchange to avoid, as they argued, worse things. It is for the statesman to determine when and how interference in such crises is necessary to satisfy our humanity and our instinctive desire to remove, by swift, summary action, regardless of remoter consequences, evils which at the time and place seem intolerable. All Hitherto this has been the explanation of Factory Acts and similar legislation. Until now no argument has been put forward that factory legislation can be glorified and expanded into a complete system of industrial policy. Until recently, though theoretical considerations have often been overshadowed by the practical exigencies of the moment, the principle of exchange and the open market has, in the main, been allowed to organise our industry, and has, in the main, been accepted as an inevitable and beneficent guide in conducting society from the condition of status to that of free contract. We are now asked to abandon entirely a view that previously appeared axiomatic, and to welcome a plan of action in which what hitherto has been the exception bids fair to become the rule. This disposition to rely, not on the equitable principle of exchange, but on Factory Acts, collective or coercive bargains, compulsory arbitration. and the enforcement of a legal minimum wage, can only be justified if it can be established that the influence of the open market is detrimental to labour, and, what perhaps is equally important, that it is possible to abandon it. This really brings us to the heart of the question. What defence can be made for the system of exchange and the open market? If our defence is successful, we shall probably be ready to admit that, whether practic able or not, the enforcement of a legal minimum rate of wages is not necessary. These remarks are made to explain why, in the first sentence of this article, we propounded a double question. Is it practicable, and is it necessary? To the first term of the question no very illuminating answer seems possible. In a sense, of course, it is obviously practicable. It is being tried in our own colonies; and an Act of Parliament can oblige us to try it here. This, however, takes us a very little way. It is not disputed that employments which do not give what appears to be adequate remuneration to those employed can be suppressed; but there are other things which we do not know, and which we must know before we form a judgment as to the result of such a policy. What becomes of the people who are forbidden to exercise their ill-requited toil? What is the effect on the industries of the country at large? How far does the disappearance of these low earnings still further diminish demand and employment of labour? How far is the purchasing power of the poorer consumers affected by the rise of prices which presumably follows the adoption of this policy? What is the view of those who, being deprived of their power of earning scanty wages, will earn none at all, and will be thrown on the poor-rate? Are they satisfied, or do they feel that they are being sacrificed to the suscepti bilities of officious sentimentalists? All these and many other questions must be answered before we can admit that the proposed policy is a practic able measure for removing an evil which all admit and all deplore. Detailed evidence on such a subject is not available. In the main, the argument must be decided by theoretical considerations, for it is only by a reference to theory that we are able to picture the inevitable results of such a policy. An arbitrary prohibition of certain exchanges (of labour for wages) must have a widespread effect, not only on production, but on the purchasing power of the community. If, for instance, some particular process in the tailoring trade is ruled out because the workers are receiving inadequate wages, it is almost impossible to follow the fortunes of those who are dispossessed further than the obvious fact that they are deprived of their maintenance, such as it is. Nor, again, can we produce the person who will purchase a garment the less for himself or his family because of the rise of price; but it is perfectly certain that increased cost of production will diminish demand. Nor can we with any certainty identify the worker whose trade has been made slack' by reason of the diminished purchasing power even of those who earn only pitiful wages. We know, however, perfectly well that we cannot withdraw from circulation the articles produced by and the wages earned by those we call 'sweated' workers without diminishing the general trade of the country. Cumulatively, the purchase power of even low wages counts for much; and, ex hypothesi, the value of the work done is in excess of the value of the wages paid. We cannot, otherwise than by reference to theory, indicate that the policy advocated diminishes, in these two respects, sources for the stimulation of industry. It may be arguable to insist that in some cases no wages are better than low wages; but, if we take this line, we must not overlook the fact that industry is to that extent crippled by the disappearance of the work done and the wages earned, and that a double source of demand for the products of industry has been destroyed. Passing from this more general consideration, let us examine the nature of the proposal in more detail. The full demand is for a general or national minimum rate of wages; but at present it is proposed to begin with trades which are known by that question-begging title of 'sweated' industries, Generally, we may take it, the necessity of fixing a minimum wages-rate will appear most urgent in decaying trades, or in trades which as a whole may be flourishing, but where certain subsidiary processes are being superseded by new and improved machinery, and very generally also in trades and sections of trades where handlabour has to compete with the machine. Now, if the wages in industries or branches of industry so handicapped are raised, the fact will accentuate the dis advantage at which the less efficient process is carried on. In all probability this will give an additional stimulus to the introduction of the new and competing process, and must ultimately result in increasing the unemployment of the less efficient workers in that particular branch of trade. The dispossessed workers will then be driven to seek employment in the open trades (if any). (The open trades will be those which are not covered by an effective trade union protection or by a minimum-wages board. The influx of the less efficient labour into such trades will presumably give rise to employment at lower wages. The policy proposed will then require us, to use Mr Charles Booth's phrase, to 'harry' these poor people out of this refuge by extending the scope of the minimum-wages legislation to the trade into which they have fled. Suppose that, eventually, this 'harrying' policy is made really effective and all the holes are stopped; we have then a crowd of the less efficient workers, all excluded from any chance of working, and waiting with expectancy to see what the legisla ture which has brought them to this pass will do next. Can we induce the employer to give employment to these persons? There is only one way, as far as we can see, of giving the employer this inducement; and that is by promising him protection-protection, of course, from foreign competition, but also from home or domestic competition. In other words, if we commit ourselves to an attempt to enforce this minimum wagesrate, we are irresistibly drawn into legislation to deprive the community of the advantage held out by the superior climatic and industrial conditions of foreign countries, and into a series of enactments to prevent the adoption of new machinery and improved processes in our home industries. Our object must be to keep industry in a stationary condition, and to rule out competition as the most fruitful source of change. Is Protection of this stringent character a possible policy? Even enthusiastic tariff-reformers are ready to admit raw material and food; and, so far as we know, no one has demanded a prohibitive tax on new machinery and improvements of industry. But, if protection of an inefficient application of labour is our policy, the activity of the Legislature in penalising every disturbing influence in industry must be stimulated to the utmost extent. There is, moreover, the difficulty of providing employment for the natural increment of the labouring population that comes each year into the market. On the stationary basis of industry, which is a necessary part in the policy of a state-regulation of wages, the problem seems insuperable. The retirement of the old and the enlistment of the young are things which have hitherto been regulated by market considerations. If, however, a minimum or living wages-rate is imposed, the considerations which tend to disperse labour at the call of the market are deprived of their force, and the conditions which make for congestion in thickly-populated neighbourhoods and in unskilled trades are bound to exercise more than their legitimate influence. In fine, though there may be much to be said in favour of socialism and its frank advocacy of the state-organisation of labour, we do not suppose that any serious economist would argue that, under a system of private enterprise, a policy of progressive protection would prove a cure for unemployment; for this really is the proposition which this project involves. When and if Another alternative remains for consideration, namely, that the dispossessed inefficient workers, finding it impossible to obtain work at the required rate of wages, shall throw themselves on the poor-rate. This, it is submitted, can hardly be called a solution. this result comes to pass, the State will inevitably be asked to organise employments for the dispossessed and less efficient class. It will then be found impossible to do any really marketable work with a staff made up of the fringes of inefficiency from our whole industrial system. Competent labour and machinery will have to be hired to give backbone, so to speak, to this shiftless, |