134 president's address— section f. 



and profits depend upon circumstances. It is not within my 

 purpose to discuss these now ; it is sufficient that I should 

 indicate them. 



There is another point which is not always kept in view, 

 but which will be seen to be of considerable importance when 

 I come to deal with Mr. Henry George, and that is the 

 relative importance of capital and labour in the production of 

 wealth. Accepting the usual definition that the sources of 

 wealth are land, labour, and capital, we shall readily see that 

 while the first is invariable, the two latter vary sometimes 

 directly, sometimes inversely. In the manufacturing centres 

 of old and densely-peopled countries like Great Britain 

 labour is undoubtedly the great instrument of production, 

 but in the case of these colonies, with their enormous areas of 

 available land and their meagre populations, the converse is 

 frequently seen to be true. Take, as an example, one of our 

 great pastoral properties, where luxuriant grass and never- 

 failing water are supplied by nature and the stock is supplied 

 by capital. In such a case enormous wealth is sometimes 

 produced with a minimum of labour, — a few boundary riders, 

 with the addition of shearers and carriers in season, are all 

 that are needed. In such a case there is practically no 

 occasion for a wages fund : the wealth is produced by land 

 and capital, and the profit surely belongs to capital. A rise 

 or fall of wages, even of a marked character, would have 

 practically little effect on the profits produced. The old 

 economists appear to have ignored or to have attached slight 

 importance to this possible variation of circumstances, and, 

 consequently, to have argued from premises which were not 

 universally true. 



The Kicardian theory of the relation of wages and profit 

 has more or less affected the views and influenced the con- 

 clusions of all the political economists who have succeeded 

 him. It is not difficult to understand how the acceptance of 

 this theory has created discontent in the breasts of those 

 especially who have been compelled to earn their bread by 

 the sweat of their brows. The great masses of the labouring 

 classes, seeing, as they believed, the rich growing richer day 

 by day ; feeling, as they instinctively felt, their hard lot was 

 not of their own creation ; taught by political economists that 

 what was being added to the wealth of the already wealthy 

 was being abstracted from the fund available for their sup- 

 port, could not fail to become possessed by the conviction 

 that employers and employed were engaged in mortal 



