132 POLITICAL ECONOMY 



when sellers part with few goods at the original price. It is 

 the briskness or slackness of the market which precedes the 

 underselling or outbidding. The underselling and outbidding 

 are tentative processes by which the extent of the change neces- 

 sary to equalise supply and demand is determined ; the necessity 

 for the change is apparent beforehand. Similarly in the labour 

 market the fact that more hands are wanted, or that hands are 

 being discharged, is, even now, notorious enough ; what is re- 

 quired is the tentative process by which we can ascertain 

 what rise or fall of wages will equalise the supply and demand. 

 Now suppose that men, instead of being engaged at weekly 

 wages, were engaged say by the year ; not from term-day 

 to term-day, but from every day or any day at which they 

 happened to be wanted, and suppose that, trade being good, 

 more men were wanted ; it being seen that extra hands were 

 being engaged, it would be quite open to applicants to say ' We 

 will not engage ourselves except at an increase of pay.' Masters 

 might very easily be led to engage a few men, if they wanted 

 them much, at this higher rate, involving a very trifling increase 

 on their total expenditure, but they would not engage so many 

 as they would have taken if no increase had been asked. More- 

 over, as the old engagements gradually came to an end, of course 

 the men would not re-engage except at the new rate. When 

 the masters found it no longer their interest to engage fresh 

 hands at this advance they would decline to do more than simply 

 re-engage old hands at the new rate. There would then be an 

 equilibrium between supply and demand. If the new rate were 

 too high to allow all the old hands to be re-engaged with profit, 

 the masters would decline to receive some of the old hands, the 

 numbers employed would fall off, the labour market would be 

 seen to be falling ; when the refusal of the masters had been 

 ascertained to be genuine by its permanence, the men might 

 tentatively lower their wages and re-engage until a fresh equi- 

 librium was found between supply and demand ; that is to say, 

 until there was neither increase nor decrease in the number of 

 hands employed. There would be no disgrace in working at 

 different rates in the same factory when the difference was 

 clearly seen to be due to the state of the market when the 

 engagement was entered into, and thus the plan suggested would 



