128 POLITICAL ECONOMY 



as to the category in which a man was to be classed, this would 

 not ascertain the rate of wages of any one category. You cannot 

 tell how tall a child is by learning that he grew an inch last year. 

 The fact that in consequence of competition Tom is to get five per 

 cent, more than Jack, does not settle the wages of either. The 

 fallacy may perhaps be seen by considering whether it is the least 

 necessary in an egg market that in order to determine the market 

 price there should be many qualities of eggs. It may be, and is de- 

 sirable that good and bad eggs should be sorted and sold separately, 

 but if they were not, but were simply all mixed, the average merit 

 would be quite well known, and a market price fixed quite as 

 easily as if the eggs were sorted in lots each containing eggs 

 of one quality. It is not competition between different qualities 

 that is required, but competition in the case of each quality. 



The fallacy on this subject is so wide-spread that space will 

 not be thrown away in endeavouring to explain it. The fallacy 

 lies in using the word { competition ' in two different senses, in 

 some such way as the following. Without free competition 

 between individual men, the market price for labour cannot be 

 ascertained ; there is no competition when men belong to a 

 trade-union, because all its members receive equal wages. 

 Therefore trade-unions prevent the market rate of wages from 

 being ascertained by the natural tentative process. The first 

 proposition may be accepted as true, or at least true enough for 

 our present purpose. The first part of the second proposition is 

 also true, but the reason given, ' because they receive equal 

 wages,' is false, inasmuch as it treats competition as a competi- 

 tion in respect of excellence of work, whereas ' competition ' in 

 the first clause is used to denote readiness on the part of men 

 to undersell one another. Competition in excellence and com- 

 petition in price are two different ideas, which have got entangled 

 together because buyers and sellers who are competing in price 

 also compete in excellence, urging that two apparently similar 

 qualities are really different. Moreover, the tentative process by 

 which the price of each quality of a thing is fixed serves to 

 arrange the goods in categories of excellence, but the mental 

 process of judging the relative merits of two classes is a different 

 one from that of fixing how much you will give for either ; you 

 mav fix in your mind that one article is worth ten shillings more 



