26 POLITICAL ECONOMY 



clard required as an inducement, both depend on man's own 

 choice and on the standard of comfort once established. Whe- 

 ther, therefore, we look on wages as determined at any given 

 time by the law of demand and supply, or as determined in the 

 long-run by the cost of living, we find that the standard of 

 comfort expected by the men, and the possession of savings 

 sufficient to ward off starvation, may exercise great influence 

 on the value of labour. 



Much has been said on the identity of the interests of capital 

 and labour. Well-meaning but fruitless attempts are made to 

 teach workmen that capital and labour are never in antagonism. 

 No one can deny that each needs the other ; but they have a 

 common interest only as the horse and his rider have a common 

 interest. If the horse starves the rider must walk ; if the horse 

 jibs he must go to the knacker. So the rider feeds the horse, 

 and the horse carries the rider. So far they have common in- 

 terests ; but it is none the less true that they have opposed 

 interests, inasmuch as the horse would like to eat plenty of corn 

 and do as little work as possible ; while the rider, on the con- 

 trary, would be better pleased the less his horse ate and the 

 farther he trotted. Workmen are all the less likely to see the 

 common interest, if they hear the antagonism persistently 

 denied with what seems to them hypocrisy. They think it 

 monstrous that one of two parties to a bargain should be told 

 to shut his eyes, and open his hands and take the wages fixed 

 by Political Economy, which allegorical personage looks very 

 like an employer on pay-day. On this ground of a common 

 interest the workmen might as well require that all profits 

 should be paid to them, and that employers should thankfully 

 accept the share Political Economy, in the shape of a union 

 secretary, might think fit to award them. 



Let us openly face the fact, that wages and profits on capital 

 are matters of bargain between men and master, and then we 

 shall be prepared to consider under what conditions that bar- 

 gain may be most advantageously made in the interests of the 

 whole community. Revising our argument, and confining its 

 application to a stationary community, we find that annually, 

 in addition to fixed capital employed in production, a certain 

 circulating capital is employed in the payment of wages to 



