CHAPTER VI.

WAGES.

I.

We have now arrived at a subject which in the actual position of society throughout the civilised world is, along with free trade, the most important and at the same time, in some respects, the most difficult in all Political Economy. The prosperity of nations and the welfare of all classes of the community are most closely associated with the direction which public feeling and national legislation may take on these two paramount questions. Yet here precisely, in reference to these very matters, we are driven to re-echo the lamentation which Mr Goschen poured forth in the House of Commons on June 29, 1877. Democratic feeling throughout the world rejects Political Economy. It is held to be hostile to the interests of the mass of the people. It is looked upon with indifference, as something unreal, as ignorant of the ways of human life. It is regarded as the idle talk of a set of doctrinaires, who know nothing of human nature, nor of its position in the actual world. People refuse to listen to what it has to say. Why busy one's self with that which has no claim to be considered? Even the House of Commons has learned to sympathise with popular feeling. The authority of

Political Economy is on the wane there. It has gone into philanthropy. Its legislation has sought to protect the toiling labourers, who produce all the wealth the nation possesses, against the oppression of unfeeling theorists. It passes laws which rescue the poor man from the greedy tyranny of the capitalist.

This is a grave matter indeed—none can well be graver. A very plain and direct issue is raised. Political Economy is true or false. Let the question be tried with the utmost severity and sternness. But it must be tried at the bar of reason, not of sentiment. Much spurious science, as was shown in the first Chapter, has been thrust upon Political Economy. By all means let it be refuted and cleared away. That is not Political Economy. True Political Economy professes to recognise certain conditions imposed by the Creator on human existence on earth, and to analyse what is implied in them. If it does these two operations badly, if it mistakes error for truth, fond imagination for accurate fact, let it be rejected. Its teaching can then be only mischievous. But let the error be established by proof. If these conditions are the laws of human life in respect of its material well-being, sentiment cannot get rid of them by giving them bad names. Political Economy has exhibited false theory in plenty, but is false theory, theory contradicted by fact and having its root solely in the sense of the agreeable, unknown to philanthropy? Nay, is it not eminently rampant and peremptory in this very region of capital and labour over which democratic feeling claims such commanding authority? Sentiment might insist how nice it would be to forbid the day's work ever to exceed four hours. Would

Political Economy deserve to be reviled, if it declared that in that case multitudes of human beings must go out of existence? Does sentiment refute the assertion by disliking it? In this most serious matter of the relations of the labouring classes to society, democratic sentiment finds powerful motives for the selfish side of human nature to fling contempt on Political Economy, and to invent doctrine and theory of its own; but where the very terms of existence are at stake, there can be but one supreme issue between Political Economy and its despisers. Are the assertions made on either side, -not generous, or philanthropic, or noble,--but true or false, as judged by the realities of man's nature, and of his position in the world? To err here, and to construct conduct on the error may mean for countless millions, misery, sickness and death.

Political Economy, however, and philanthropy have each of them their legitimate spheres by the side of one another. Political Economy is a subordinate body of knowledge only. It assumes wealth as its end, but does not compare that end with the other objects of human life. The pursuit of wealth is not the paramount duty of mankind to which everything else must give way. On the contrary philanthropy and morality and social philosophy are authorised to declare that there are states of life and practices which must be avoided at the cost of loss of wealth, or even of poverty. Political Economy can show with the greatest ease that nothing is more antagonistic to the production of wealth than war. Yet every nation at times prefers war to riches, and the voice of humanity does not condemn them. There might be social arrangements enacted for the

visible than in that of interest and loans. The stock exchanges of Europe are full of the stocks of distant countries: the railway, the public press, the telegraph, and the steamship, have bound peoples together as if they were provinces of one universal state. Of this vast state London has become the capital. To be able to borrow in London, to stand in good repute with its capitalists, is a strength coveted by mighty empires. If discount rises or falls in London, the effect vibrates through every other stock exchange. Funds for the money market are rapidly sent to or from the English market. The consequences of this unity of movement are diverse. The supply of the means of investing are enlarged. French, German, Austrian, and other monies, as they are called, appear in London: a change supervenes and the streams pour back to Paris, Vienna, and Berlin. On one side, the tendency of this financial fraternity is to diminish the rate of interest; there is more to lend in all the markets. In relatively poor countries means are acquired more cheaply for industry. The development of their production is facilitated, English and other loans come to their help, and interest points towards a fall. But how will it be in England and the richer countries? It might seem as if a market already gorged with resources difficult to employ would be oppressed yet more severely; this effect, undoubtedly, has been felt in London. The Germans lodged large sums in the London banking world, and told heavily at times on the money market.

But it would be to take a narrow view of the facts to suppose that a lowering of interest is the necessary consequence of the appearance of foreign funds in

London. The increased sense of fraternity and security, which led to the intercommunion of the money markets, generated also a very strong desire in lessdeveloped countries to acquire the fitting machinery for creating wealth, to obtain capital for agriculture, for manufactures, for shipping and harbours, and above all, for railways. They became eager to borrow in England, and Englishmen were willing to lend. The being able to lend was of infinitely greater importance to England than the gain of additional power to borrow.

This view has been controverted in many quarters. It isadmitted that the purely investing portion of the British public, men who have purchasing power which they cannot themselves make use of, but which they are willing to transfer on loan to foreigners, may be largely benefited by the appearance of additional borrowers; but the people of England itself, it is argued, especially the labourers, are injured by the process; the capital, that is the commodities sent abroad, are a loss to them. They are, as it were, made non-existent, they create no call for English labour, they bring no gain to England save the interest received. How different would the effect have been had these commodities been applied to the extension of English industry!

The answer to these objections depends, in no small degree, on a broad and very important principle. Political Economy has not for its aim the enrichment of a particular people. Its subject is the wealth of nations. It knows nothing of the distinction between natives and foreigners, except so far as the distribution of mankind into nationalities tends to create laws in various countries, which oppose freedom of industry