clude all who produce on shares, and all who are paid or subsisted out of the revenues of their employers. We have left the wages class proper, including all persons who are employed in production with a view to the profit of their employers, and are paid at stipulated rates. This is the class whose economical position and interests it is proposed here to discuss. With such limitations as have been imposed, the wages question is not of that wide interest which is given to it when pretty much the whole human race is brought within its scope; but it may be that by this limitation our inquiries will become more fruitful. 1

But though the wage class includes but a fraction of humanity, it is perhaps as large as can be comfortably treated in a work of a single volume. Of the eighty millions of English-speaking people, three-fourths probably, two-thirds certainly, subsist on wages.

It may be well here to anticipate a hostile criticism. It may be said that we have made our analysis of the laboring population an essential part of our theory of wages, while yet, in fact, no inconsiderable number of persons sustain economical relations which refuse to submit to such a classification. Thus there are persons belonging alternately to the wages and to the stipend class, now employed for profit, now paid out of revenue. In like manner there are persons in every community who are employed as hired laborers during portions of the year, while at other seasons they are engaged in production on their own account in their own shops or on their own small holdings of land.

To this it may be replied that while the recognition of

"The (third) class of hired laborers, paid from capital, has so exclusively met the eyes and occupied the thoughts of English writers on wages, that it has led them into some serious and very unfor. tunate mistakes as to the nature, extent, and formation of the funds out of which the laboring population of the globe is fed, and, as usua!, They have misled foreign writers.”—R. Jones, Pol. Econ., p. 15

vast bodies of undistributed wealth which are yet subject to exchange, is here asserted to be necessary to a right understanding of some of the phenomena of wages, the validity of this position does not depend on the possibility of an exact enumeration of the several classes defined. On this point I cannot do better than quote from the admirable chapter on Economic Definition, which Prof. Cairnes, just before his lamented death, added to his treat ise on the Logical Method of Political Economy.

"In controversies about definitions, nothing is more. common than to meet objections founded on the assumption that the attribute on which a definition turns, ought to be one which does not admit of degrees. This being assumed, the objector goes on to show that the facts or objects placed within the boundary line of some definition. to which objection is taken, cannot, in their extreme instances be clearly discriminated from those which lie without. Some equivocal example is then taken, and the framer of the definition is challenged to say in which category it is to be placed. Now it seems to me that an objection of this kind ignores the inevitable conditions under which a scientific nomenclature is constructed, alike in political economy and in all the positive sciences. In such sciences, nomenclature, and therefore definition, is based on classification, and to admit of degrees is the character of all natural facts. As has been said, there are no hard lines in nature. Between the animal and vegetable kingdoms, for example, where is the line to be drawn? ... It is, therefore, no valid objection to a classification, nor consequently, to the definition founded upon it, that instances may be found which fall, or seem to fall, on our lines of demarcation. This is inevitable in the nature of things. But this notwithstanding, the classification, and therefore the definition, is a good one, if, in those instances which do not fall on the line, the distinctions marked by the definition are such as it is important to mark, such

that the recognition of them will help the inquirer for ward toward the desiderated goal." 1

THE EXCHANGE OF DISTRIBUTED FOR UNDISTRIBUTED

WEALTH.

BUT it may be asked, what avails it to show that the wages classes, instead of being co-extensive with the labor class, as is assumed in the current theories respecting wages, is only a small fraction of it, communicating with those other great masses of labor, only in the exchange of its completed and marketed products? How can this fact bear on the question, whether wages may be increased actually and permanently? Are not wages governed by exactly the same principles as if the wages class constituted the whole of the labor class, instead of one-fifth, one-sixth, or one-seventh?

I answer, in the first place, that if the wages class is only a fraction of the labor class, that fact should be clearly set forth in discussions of the wages question, and the extent of the interests involved should be, as nearly as possible, indicated. The reader has a right to know whether the principles laid down govern the fortunes of substantially the whole human race, or of only one-fifth or one-seventh of it. The confusion of the labor question with the wages question, is as unnecessary as it is unscientific.

But secondly, I answer that the fact of the production of a vast body of undistributed wealth, portions of which are subject to exchange with distributed wealth, may, and does, powerfully affect the condition of the wages class.

Let us discriminate. So far as undistributed wealth, that is, wealth which is produced entire by one person,3

With the assistance, it may be, of his wife and minor children whose labor is, in the eye of the law, his own.

who owns the whole product, is not exchanged but is consumed by the producer, as is the case with probably the major part of such wealth, the world over, no effect on the wages class can be wrought thereby. That wealth, being neither distributed nor exchanged, neither its production nor its consumption concerns other classes of producers. But so far as undistributed wealth is exchanged against distributed wealth, there is a distinct possibility, therein, of gain or loss to the wages class.

It was remarked in our first chapter, that it is as truly impossible to explain all the phenomena of wages, without reference to this outside body of undistributed wealth, as it would be to account for the Gulf Stream, without reference to the colder waters between which, and over which, it flows. We are now in a position to justify this remark. We have seen (chap. x,) that the theory that all burdens are divided and all benefits diffused equally throughout industrial society, rests on the assumption of perfect competition. Industrial society is taken, for the purposes of this reasoning, as composed of economical atoms, absolutely equivalent, possessing complete mobility and elasticity. Given this condition, all that Bastiat has claimed for the economical harmonies, is happily true. The laborer and the employer feel the force of competition equally, and neither has a natural advantage over the other. The laborer feels the force of competition alike as seller of labor and as buyer of commodities. Labor and capital flow freely to their best market. The highest price which any employer can afford to give will be the lowest which any laborer will consent to receive; while, as between any two departments of production, the advantages enjoyed by the laborers, capitalists and employees engaged will be absolutely equalized.

But, on the other hand, it is evident that the least viscosity of material, the slightest idiosyncrasy of structure must, in a degree, defer, if not entirely defeat, the tend

ency to the propagation, through economic media, of any economic impulse. Just so far as men differ in their industrial quality, or are diversely organized in natural or artificial groups, just so far there is the possibility that one person or class of persons may be disproportionately affected by an economic force; may receive more or receive less of the benefit, may suffer less or suffer more of the burden, than his or their just distributive share.

Now the division of the body of laborers into the employed and the non-employed, or independent workmen, is a great structural fact which cannot but profoundly influence the propagation of economic impulses. Doubtless there are compensations in the condition of the wages class; while nothing could exceed the misery of whole nations of peasant proprietors or tenant occupiers, where the government fails to render the protection to which the subject is entitled, or where, as too often happens, the government becomes the plunderer of the people. Yet, through all, we discern in the fact that the wages class are dependent on others for the opportunity and the means to labor, not having, in their own right, possession of the agencies and instrumentalities of production, the possibility of deep and lasting detriment.

I have already expressed the opinion, in criticism of Prof. Cairnes' doctrine of non-competing groups, that competition never becomes nil, for practical purposes. But let us for the moment inquire what would be the effects, did the employed and the non-employed constitute two great non-competing groups; that is, did not the employed ever become an independent workman; or the independent workman ever seek employment. We will also suppose, competition to be perfect within the employed class.

It is evident that upon these assumptions any economical impulse, for good or for evil, which should be experienced anywhere in the latter class, would extend at once and without loss through the whole body of the employed,