524 REPORT — 1888. 



And yet, narrow and definite as are the limits I have prescribed, the 

 subject almost of necessity presents some points of wider interest and of 

 larger importance than might at first be supposed. It necessarily involves 

 the examination from an economic standpoint of the nature and conse- 

 quences of those combinations which seem to be occupying, and to be 

 destined to occupy, a more and more prominent position in the industrial 

 "world as time moves on. For the adoption and the continued observ- 

 ance of a sliding scale appear to presuppose some sort of organised repre- 

 sentation on either side ; and organised representation is but another 

 name for combination. 



The subject, again, almost of necessity compels the consideration of 

 some of the chief changes which have taken place in the economic theory 

 of wages, as it appears to have been conceived by Ricardo, and as it is 

 now generally accepted. And, lastly, it has certainly some indirect bearing 

 on the relation between economic theory and practice. 



If I may be permited to do so, I should like to preface my examina- 

 tion of the question by a brief account of the circumstances which origin, 

 ally induced me to attempt it. Some months ago there appeared in the 

 pages of a periodical — the name of which would, I imagine, be of little or 

 no interest to the members of the Section, and I therefore withhold — two 

 able and indulgent criticisms on certain views I had ventured to put for- 

 ward in a recent publication ' on the subject of this paper. These criti- 

 cisms led me to reconsider the attitude I had adopted with some little 

 care, and it is the general results of that reconsideration which I venture 

 now to submit ; and I have given this explanation in order to afford some 

 excuse at the outset for the egotistic form which the paper will take. 



The first of these critics — who, I may remark in passing, was a 

 strenuous adherent of what I suppose we must call the ' historical ' 

 method — observed that the work he was criticising, which contained these 

 views, was the ' outcome of common sense working upon historical and 

 statistical material rmadded ^ by economic theory.' The other critic, 

 who lent his support rather to the abstract or deductive method, rejoined 

 that the * neglect ' ^ of that theory was the ' one grave defect ' of the book. 

 Now, it appeared to me, perhaps not unnaturally, that both these criti- 

 cisms were wrong. It seemed to me that it was impossible to discuss 

 Avith adequate completeness the facts and the principles of sliding scales 

 ' unaided ' by economic theory ; and on the other hand I hoped that I 

 had not been guilty of the unpardonable sin, as it would seem to me, of 

 the ' neglect ' of that theory. I was firmly of opinion, in opposition to 

 my first critic, that such knowledge of theory as I might have possessed 

 had ' appreciably helped ' me in the discussion of sliding scales ; that 

 it had ' supplied ' me with ' points of view ; ' that it had given me 

 ' guidance in the arrangement of material ; ' and that the 'facts of real 

 life and the theories of economists ' had not ' been kept, as it were, in 

 two separate compartments of my 'mind.' And yet I could not agree 

 entirely with my other critic when he asserted that ' Political Economy 

 does supply the principle ' on which an arbitrator should act, or a sliding 

 scale proceed ; and that that principle was that he or it should endeavour 

 to award such wages as would be obtained if ' combination on either side 

 were absent.' This criticism indeed appeared to me to be nearer the 

 truth, as I held it, than the other, but I did not think that it had entirely 



' Indiittrial Peace. » The italics are my own. 



