94 POLITICAL ECONOMY 



as is supposed, fixed by some natural law depending for its 

 action in no wise on the will of men, but solely on the number 

 of labourers and the amount of capital which is ready to be spent 

 on labour. The natural deduction from this hypothesis is, that 

 whatever wages happen to be paid are the right wages, and that 

 men should thankfully accept them, abandoning all attempt to 

 bargain as a useless waste of time and trouble in contending 

 against the inevitable law of nature. 



What is true of wages is true of other commodities, and it 

 would be just as difficult to persuade the holders of any mer- 

 chandise to desist from bargaining about the price of goods, as 

 to persuade labourers to refrain from bargaining about wages. 

 Nevertheless, it is certainly true that by competition among 

 buyers, a market-price would be settled both for wages and 

 other commodities, as at an auction with unreserved price even 

 if the sellers did not bargain at all ; and this is precisely what 

 the more reasonable opponents of trade-unions mean when they 

 assert that wages are fixed by the laws of supply and demand. It 

 is unnecessary now to refute the other absurd form of the doc- 

 trine by which it was assumed that, the wages fund being fixed, 

 and the number of labourers fixed, you had only to compute 

 the mean wages by a simple sum in division it being clearly 

 understood that the wages fund is a fluctuating quantity, altered 

 by every circumstance which affects the minds of capitalists. In 

 an article in the North British Review, 1 the writer dwelt at much 

 length on this fallacy, and nearly the same arguments, sub- 

 sequently used by Mr. Thornton, have been acknowledged as 

 just by Mr. John Stuart Mill. The theory of wages, therefore, 

 presents two questions only : 



1. Does the power of bargaining give the labourer any 

 advantage ? 



2. What is the cost of production of a labourer in a given 

 trade ? 



If we can settle these two questions we may feel certain of 

 being able to answer all contingent questions, for we have found 

 that the cost of production ultimately regulates the average of 

 all prices, and therefore the average rate of wages ; and in a 

 given market we have found how the fluctuations in the average 

 1 Nortli British Itcricw, March 1S58. ' Trade- Union s : how far legitimate.' 



