528 ^ hepoet — 1888. 



scales ■ for there must be oi'ganised repi-esentation on either side if there 

 is to bQ any authoritative or binding agreement, and organised represen- 

 tation u but an alternative expression for combination. 



Nor does my critic seem to me to succeed in showing a way of escape 

 fi'om this conclusion ; and, if I might be allowed to put my own inter- 

 pretation upon his language, and to supply the missing parentheses, I 

 imagine that the difference between us might be reduced to the 

 narrowest limits, even if it did not disappear altogether. Let me quote 

 bis words : — 'As a matter of fact,' he argues, ' political economy does supply 

 the principle — which is, that the ai'bitrator should endeavour- to award such 

 wages as would be obtained if combination on either side were absent. 

 If he fixes them appreciably above or below this level, economic theory 

 shows that his award will have veiy soon to be revised. So, too, economic 

 theory shows that if a sliding scale has the effect of making the wages 

 paid under it differ much from competitive wages it must break down.' 



Now, looking at the matter for a moment from a practical stand- 

 point — although, indeed, I freely confess that for the immediate purposes 

 of this discussion this mode of regarding the question is chiefly important 

 for the side-light it may throw upon the theoretical aspect — but adopting 

 for the moment this practical standpoint, I am afraid that my critic's 

 argument does not carry us very far. For where, let me ask, is the un- 

 happy arbitrator to discover this ideal standard ? If he confines his con- 

 sideration within the limits of the two organisations which are represented 

 before him, he manifestly can discover no such standard. He cannot 

 arrive at anything save a particular relation between wages and prices, 

 which is held by both parties to be fair ; and the fact that they both con- 

 sist of combinations whose express purpose is to secure better terms than 

 could be obtained by individual competition, establishes a strong pre- 

 sumption against the belief that any standard could have become tradi- 

 tional which was determined merely by the influences affecting competi- 

 tive wages. Nor, for the very same reason — and of this point the history 

 of industrial conciliation supplies more than one striking and instructive 

 illustration — will they be inclined to accept an appeal to the standard of 

 wages prevailing outside the limits of their own, or at least of some, com- 

 bination ; for by doing this they would virtually nullify the raison d'etre of 

 their own organisation. 



Nor, indeed, is it possible for the arbitrator himself to penetrate, as 

 it were, beneath the stratum of combination and to reach that of pure 

 competition. Within the limits of the combinations before him he cannot 

 do this ; for he cannot strip off so much and declare that what is left is 

 what would be the case ' if combination on either side were absent.' He 

 cannot, in fact, isolate the competitive wage from the action and inter- 

 action of the two combinations. The rate of wages is the result — to use 

 a metaphor with which students of logic are familiar — of chemical rather 

 than mechanical action, and the effects of the causes are intermixed. 



Nor, again, can he succeed in this aim by having recourse to the 

 labour market outside these limits ; for he cannot really pass beyond the 

 influence of the forces originating within them. The so-called competi- 

 tive market itself must be influenced by the action of the combinations. 

 If you have a strong buyer and a strong seller — and what are combinations 

 but strong buyers and sellers ? — at any particular time in a market, they 

 will, for good or for evil, affect the market price ; and if the permanent 

 condition of affairs be that of a strong buyer confronting a strong seller, 



