cedent sub-products, with a view to afterwards selling them, with the addition of his own. Each bargain includes, not all the parties in the entire productive operation, but two of them. The farmer deals with the wool merchant, and he with the manufacturer. In effect, however, each shares with all the others; and the total amount to be shared is kept constantly in view. The ultimate value of the garment fixes the maximum value of the cloth, and thus, indirectly, the maximum value of the wool.

The increment of value which we have termed a sub-product is always a distinct thing, easily recognized and separated from what may be called the elementary value, which resides in the raw material. It is indifferent whether at any time, the transformation is complete or incomplete; wool partly woven has received a form value as easily detected as that of the finished cloth. The entire distributing process involves, first, the dividing of the total value of a product, as completed and ready for consumption, among the different agents who have worked successively to create it; this, as we have seen, is equivalent to assigning to each independent producer or company of producers the market value of a sub-product. It involves, secondly, the dividing of the value of the sub-product itself among those who have acted simultaneously to create it.

The wage contract and its fulfillment constitute a part of each of these processes. The agents which create the sub-product are labor and fixed capital; and workmen and employer have each a certain ownership in the joint result. The division of the value of it between them is an act of direct distribution. The relation of the parties is analogous to that of the owner and the crew of the whaling ship; in each case there is a contract which arranges the division of the product before the product exists; the actual sharing process takes place when each party receives his portion.

It is not practicable, in most industries, to divide the product in kind, as is done in the whale fishery; and it is necessary that one of the owners should buy the interest of the other. The employer is, of course, the purchaser. The wage contract arranges the terms of the purchase; the thing to be transferred is an undivided share in a sub-product, and the wage contract

performs the double function of separating that sub-product into shares, and of arranging for the purchase of one share by the owner of the other. The division is an act of direct distribution, while the purchase of the one share is an act in indirect distribution. It is one of the series of exchanges which, as a whole, divide the value of the ultimate product, in finished garments or otherwise, among all engaged in creating it. The employer becomes virtually, the customer of the workman; and his relation to him, in this one respect, is analogous to the relation of the wholesale merchant to the employer.

The direct reward of each productive operation is the product created; this has value before it is sold, and the sale only transmutes that value into a form convenient for farther use. The form value imparted to wool repays all parties engaged in manufacturing cloth; and a share in it repays the laborer. It comes to him in forms adapted for his use, and the particular things which are given to him are taken from his employer's capital. Yet the transaction, as a whole, causes no diminution of that capital, and does not, therefore, consume it; the amount taken from the fund by the payment of wages is simultaneously added to it by the transfer from the workman to his employer of the fractional product for which wages are a payment. The workman puts into the fund as much as he withdraws; and the figure which best indicates the function of capital is not that of a reservoir diminished by draughts representing wage payments, and simultaneously replenished from an ulterior source; it is rather that of a reservoir into which the laborer himself pumps water, that he may receive, for use, other water which is thus made to overflow from it. If, by wages, we mean the particular commodities which the laborer receives, they come from capital; the water which, in the figure, is drawn for use comes from the reservoir. If, by wages, we mean a value, an abstract quantum of wealth which repays the workman for his efforts, they do not come from capital, but are an immediate creation of labor itself; in this more essential meaning of the terms the relation of wages to products is one of identity. In a sense which includes both meanings and accords with current use, wages are the immediate product of labor, transmuted in form by the intervention of capital.

They are a value received for a value created and transferred in fulfillment of an antecedent contract.

We are now prepared to appreciate the essential truth and to guard against one misleading error contained in the former of the two theories of wages above cited, that, namely, of Mr. George. It is true that a substantial product is the immediate result of labor; it is not true that that product includes the entire result of the industry. It is true that wages, considered as an abstract value, independently of the form in which they are embodied, are identical with the product of the labor for which they are a payment; but the identity extends to quantity; they are the whole product, and not a part of it. Under the present system wages are the entire market value of the real result of labor. We should neither claim for the laborer too much nor concede to him too little; it is equally undiscerning to claim for him the total returns of the creative process in which he assists, and to deny his title to the fractional sub-product which is a component element in that total. He is one of two creators, and he sells his share at the prevaleut rate and receives its exact value.

The practical importance of these principles affords the excuse, if any is needed, for pursuing thus minutely the analysis of the nature of wages; for not only do the particular conclusions above cited depend on it, but the attitude toward each other of the two great classes of modern society is determined by it. The practical question of the present and future is that of justice in the distribution of the rewards of social effort. On the part of the discontented there is a disposition to challenge the justice of present methods, and to appeal from existing laws to a principle of ultimate equity. There is a resort to "higher law" doctrines, for the sake of justifying assaults on existing law; socialism seeks diligently for moral grounds for its action. There is, therefore, on the part of many conservative economists, a disposition to avoid the recognition of moral forces in economic affairs, and even to associate the infusing of an ethical element into political economy, with ultra-progressive tendencies. According to this view there should be no questions of justice raised where the law of demand and supply is in control. The theory which separates wages from

products affords a ground for such a course; for if nothing is divided between employers and men, there is, of course, no question as to an equitable division. The Article which we have cited expressly states that "wages do not belong in distribution," that they "involve no social question, or struggle of class with class," and that principles of justice, as commonly understood, have no application to them.

Can it possibly be the part of safety to shun moral issues in economic discussion? Should we refer everything to the law of demand and supply, without attempting to give to that law itself a ground of existence? Would not such a course render us liable to the accusation of making of demand and supply a Juggernaut car which overrides principles as well as men? Property may once have existed solely de facto; a man may once have owned only that which he could conceal or forcibly guard. The institution now exists de jure, and a man owns all that, in the opinion of society, as expressed in its laws, it is just that he should retain. Moral forces which created property have had an increasing minuteness of application in defining and enforcing it. They have taken cognizance of the modes of acquiring it. Originally all was left to an unrestricted competitive struggle, in which the contestants spared neither life nor limb. Murder and assault were first interdicted, and then injuries of a less gross and material sort. The modes of competition are subject to progressive restraints, and this process is by no means completed. We may still do that to our competitors which ideal morality condemns, and which positive law may, at some time, interdict. We may not lie unrestrainedly; the statutes against obtaining property by false pretenses will see to it that mercantile falsehood has limits; but, by avoiding the statute, we may still deceive. We may not place our competitor in the river and, by frequent submergings, compel him to sell his homestead for half its value; but we may place him in commercial exigencies, and extort a portion of his property. We may do much that, in an ideal state, we could not do; and it is not only competent to compare both the methods and the results of the present system with a perfect standard, but our hope lies in the fact that the comparison is constantly made, and that the existing

order is compelled into increasing conformity with the best that human reason can conceive. The system will bear the comparison. It is not perfect, nor as perfect as it will be; but it is better than any substitute offered, and its continuance is, for that reason, certain. If socialism were to be introduced for a night, competition would return in the morning.

Here and there competition works exceptionally ill, something else works unusually well, and voluntary coöperation, or some form of public agency takes a particular industry out of the competitive field. The province of non-competitive industries is real and increasing; but never, until a moral millennium shall come, can it embrace the entire economic life of a nation.

While there is no danger that any theory may establish a permanent reign of practical socialism, there is a general and not unfounded fear of agitations and attempts in this direction; and systems of economic science must submit to be judged, not merely by their correctness or incorrectness, but by their seeming tendency to strengthen or to weaken the social fabric. In this view can that theory be the one desired which in any way obscures the action of moral forces in originating, developing and sustaining the institution of property, and which tends, however remotely, to place that institution again on a de facto basis?

If theories must be judged by their effects, practical measures must certainly be so; and here, also, are opportunities for differences of view. If mere stability be the object of consideration, opinions will differ as to the best mode of ensuring it. The general principle holds true, in the economic as well as in the political sphere, that, when revolutionary movements are imminent, a sound practical policy takes a middle course between anarchism, on the one hand, and the Bourbonism that learns nothing and forgets nothing, on the other. Progress is imperative, and the choice offered is between different methods of obtaining it.

There is one force the agency of which tends both to stability and to progress; it is the sense of right in men. It is the ultimate socializing power, creating, preserving and perfecting economic society. It should be given the freest play, in prac