that a very different state of things exists where man is not civilized, and also where man has removed himself far off from the neighbourhood of his fellows.

We may as well pass by the savage and the barbarian, and fix our attention upon what is being done by our friends and relatives in the interior of Australia, or in the far west of the United States. Each settler makes his own bread, grows his own corn and vegetables, rears, milks, and slaughters his own cattle, makes the candles and soap which he uses, fells and gathers the fuel which he burns, and dwells in the hut which he has himself built. The quality of what he produces is in most cases poor enough, and the quantity very small. There is a patch of brick and stone work where he burns his fuel, the rest of his hut is built of logs, but neither the brick-work nor the wood-work can be compared with those in our dwellings. So well does the settler himself know this, that he is longing for the day when the increased population of his district will enable him to increase the productiveness of his industry, by adopting to a small extent at least, Division of Labour. Meanwhile, it is easy enough to understand what he is about. As well as he can, he is producing the very things which he and his household intend to consume. The brickmaker at home, is on the other hand, producing what he intends other people to consume. Like the colonist, he intends

of course, that the work he is doing shall put him in possession of the things he and his family wish to consume, but he can obtain those things only by interchange, i.e., by giving his bricks in exchange for them. The exchange is managed by the aid of another contrivance, for increasing the productiveness of industry. The bricks are given for money, and the money for those other products of labour which the brickmaker wishes to consume. How greatly money facilitates interchange, we need not stay in this lesson to show. Our business now, is to fix our attention on the fact, that, whether more easily, by employing money as the medium, or more clumsily, by bartering, interchange is necessitated by division of labour.

But this interchange brings in a new and very important thought-Value. "What shall I get in exchange for what I am producing?" must be ever present with the man who confines his attention to some one department of labour. For the phrase, "What shall I get in exchange for my production," the economist

substitutes, "What is its value?" and if he be a logical reasoner, he takes care, whilst handling economical subjects, to use the term "value" with this meaning only. He carefully discriminates between "use" and "value." With him, the use of iron, and the value of it, are questions no more to be confounded, than the colour of the metal and its weight. Unfortunately, however, this scrupulous attention to the using of a term with one meaning only is rare. Men of considerable learning, even when engaged in expounding social questions, use terms with a looseness of meaning that they would regard with horror in a mathematical discussion, and many are the fallacies in which, in consequence, they involve both themselves and their hearers. From the fallacies depending on the equivocal use of the term "value," you may save yourself by substituting for the word, whenever it occurs in an economical discussion, the synonymous phrase, “what it" (the product in question) "will fetch in exchange."

The right use of the term will enable the argument to bear this substitution, but the substitution will in a moment betray equivocation, and will thereby warn you against the impending fallacy.

But to return to the producer: he will be unwilling to produce that which is of small value, and anxious to produce that which is of high value- a state of mind, which will set him producing those things which the people who are to consume them most desire, and that will influence him very seriously in the payment of wages. And now, we may proceed to the consideration

of wages.

On Wages, and the Laws which Regulate them.

We have before us two sets of people-the masters and the workmen, or, as they are usually called in economical treatises, the capitalists and the labourers. The capitalist is so named, from his possession of capital, that is, of the products of labour accumulated and stored in the past, and devoted in the present to consumption in the work of producing for the future. The capitalist hopes by the way in which he is wearing out and consuming his capital now, to reproduce it in the future with increase, and to this increase, the name Profit is given. The capitalist, whilst he is at work for this future good, profit, sup

ports himself out of his capital, and out of it also he supports those whom he engages to assist him in his work, i.e., out of his capital, he pays his labourers their wages. At this stage of the lesson it is important for you to notice,—

1. That capital is something which has been produced in the past and cannot suddenly be increased.

2. That wages are the means by which labourers subsist in the present, and that they must be limited in quantity by the largeness or smallness of the previously produced and stored products of labour (the capital) out of which they are to be paid.

3. That profit is something to be obtained in the future, not something which already exists.

As the mastering of these three fundamental points will make the whole subject easy, I shall be at some pains to illustrate them, in order that you may thoroughly know their truth, and therefore understand how the laws which regulate wages—of which I am to speak presently-depend upon and grow out of them.

Let us fix upon some one capitalist, say a ship-builder, and let us suppose, when we begin to observe his operations, he is already in possession of the site on which, and of the timber and metal and tools and machinery with which to build a ship. And further, we will suppose that when the ship is built, he intends to sell her, hoping of course to get for her what will replace all he has consumed in her construction, and leave him something besides his profit. Clearly, the timber which has been felled, lopped, and carried to the ship, the copper and the iron which have been produced from their ores, the tools and machinery which have been produced from previously prepared wood and metal, are the results of labour which has been done in time past. These things constitute a part of the ship-builder's capital, but besides these, he needs other capital; he needs the means of keeping his labourers whilst at work; he needs the means of paying wages.

We may ask ourselves here, why does the capitalist work for profit? Why do the workmen work for wages? It is very plain that the capitalist might, if he chose, work for wages, by engaging himself in any work for which he is competent, to some other capitalist, and whilst so working, might yet derive benefit from his capital, by lending it at interest to some one else. We can have no doubt then, that in choosing to work for a profit, he feels

sure that he secures for himself more than he could obtain from wages and interest put together; and for the purposes of our lesson, we may suppose him right in his decision, and that his workmen know him to be right. Why then do they not also work for profit instead of wages? In free and enlightened countries the laws do not prevent them, and for the sake of argument, we will grant that they have the necessary skill. What is it then that stops them? They do not possess the necessary capital. They are not only without the premises, the building materials, and the machinery, but they cannot even wait for the profit. They (and those depending on them) must be fed, clothed, &c., whilst the profit is being earned. They need out of the products of past labour, which are not their own, the means of supporting themselves now. The products of past labour, the capitalist either has in hand, or the other portion of his capital of which we spoke above, will exchange for them. Hence the bargain for wages; and hence, as we see, wages must be regarded as a payment made in the present for the present sustentation of the workmen out of the stored products of labour done in the past, in order that profit may be earned in the future. It need occasion us no difficulty that wages are usually paid in money. To make the payment thus, is an obvious convenience to both parties, but we must observe that the money which is received by the workmen, is, as it were, simply an order which will be attended to by the baker, the butcher, the coal dealer, the landlord of the house in which he lives in short, by all capitalists to whom he may present it. Not the money, but the commodities he procures with the money, are his real wages, as much so, as if the master ship-builder had in his yard a bread store, a meat store, a fuel store, &c., and sent the workman with a ticket or token to each of the store-keepers for portions of the capital under their care. We shall not then trouble ourselves much at present with the money wages, but fix our attention on the real wages-on those portions of the storedup products of past labour, which the workman, by his labour for the capitalist, has now made his own, and is depending upon for his and his family's present support.

There is, however, one peculiarity of money wages that may as well be noticed here: they may remain as they were, and yet the real wages be seriously altered. Every boy knows that a sum of money will at one time buy more than at another, that, for in

stance, sometimes 1s. will buy two loaves, and sometimes but one; and his father will tell him that money wages do not rise when prices do-that much the same quantity of work will be done for a sovereign when bread is at a shilling a loaf, and other food dear in proportion, as was done when bread and other necessaries were at much lower prices, and perhaps he will add, that as a rule, work is rather more difficult to be obtained when food is very dear. If now we drop the money out of sight, and revert again to the real wages, the case stands thus: the capitalist, when he now sends his workmen to the various store-keepers, writes an order for a half loaf instead of a whole one, and yet is rather less willing to give employment than when he was giving the whole loaf.

How shall we account for this alteration in the rate of wages ? or, to put this inquiry into a better form: What regulates the rate of wages? I answer, The quantity of capital available for the payment of real wages, divided by the number of labourers who must subsist out of it. We must carefully investigate this answer. That we may do so, it will be necessary that I expose some fallacies with regard to profit with which workmen ordinarily delude themselves. They in their trades-union speeches are continually asserting, "We, the workmen it is, who earn for capitalists their profit." "Our wages are paid out of profit." “Large profit for the capitalist means small wages for the workman, and increased wages for the workman means diminished profit for the capitalist."

Whilst workmen are talking thus, we see around us capitalists of two essentially different kinds-those who make profit, and those who lose their own capital, and (too frequently) some portion of their neighbour's. Does any one affect to say that the ruin of the one man is due to his workmen ? If not, how does it happen that when profit is earned they are to step forth and claim the credit? Any one who will investigate the subject will see, that besides the well-doing of the manual labour, it is necessary, in order to make a profit, that there should be a thoroughly enlightened organization of the means of production. Organization and administration are the talents required in the capitalist. Where they exist in a high degree, large profits are made; where they are wanting, loss will assuredly occur. How foolish then as well as false is this boasting on the part of the workmen! Does the