532 BEPOET— 1888. 



us from supposing that in the labour market at any particular time — and 

 still more so in any particular trade — there may be what we may call a 

 competitive maximum and a competitive minimum limit of wages — the 

 former lying at the point where more wages would mean such a low rate 

 of profit that there would be a pressing danger that the requisite busi- 

 ness management and enterprise would fail to appear and the requisite 

 capital cease to be forthcoming, and the latter being found in a similar 

 way at the point where more profits would mean such a low rate of wages 

 that there would be an imminent prospect that labour of the requisite 

 efficiency would not be available. Nor are we debarred from examining 

 the causes which niay influence the fluctuation of market wages between 

 these two points, and the market wages, we must remember, will in their 

 turn exercise a reflex influence on normal wages. 



Our combination of workmen, then, enjoys the advantages of a strong 

 seller in the market, and within the competitive minimum they may be 

 conceived to have set up, as it were, a minimum limit of their own. 

 Were they not confronted by a rival combination of masters they might 

 conceivably have made this minimum coincide with the competitive maxi- 

 mum. But they are confronted by this combination, which in its turn 

 endeavours to set up, as it were, a maximum limit of its own within the 

 competitive maximum. Were it unopposed it might, in the same way as 

 the combination of the men, efi'ect a coincidence between this maximum 

 and the competitive minimum. But as the case stands neither of the two 

 combinations is unopposed. Neither of the two can secure the terms 

 which it might otherwise have obtained. A compromise is inevitable, 

 and on the one side or the other a greater or less concession must be 

 made. The point at which the agreement is effected will lie between 

 what we have called the competitive minimum and the competitive maxi- 

 mum — understanding by these terms the extreme points of the area 

 covered by the elastic expressions ' the cost of production of labour ' and 

 ' the avei'age rate of profits.' But it will probably coincide with neither 

 of tbe two ; and no theory of pure competition, based as it essentiall}' is 

 on the possibility of infinite subdivision, will enable you to determine at 

 what precise point between these two extreme competitive limits the two 

 combinations, dealing as they are ex hypotliesi with commodities or ser- 

 vices incapable of infinite subdivision, will come to an agreement and 

 effect an exchange. All that you can safely infer is that the point of 

 agreement will not lie outside these limits, unless indeed — though this is 

 not an impossible supposition — either of the two parties is blind to its 

 economic intei'ests. 



I have endeavoured to reply to the argument advanced, as I think, 

 erroneously by one of my critics ; and I believe that, without undue pre- 

 sumption, I may claim to have answered the other by implication. For 

 while I have tried to show that theoretic economics cannot determine 

 the exact basis of a scale, I have, I think, incidentally indicated the 

 reasons for my opinion that they may have something to say about the 

 general character of that basis. Combinations are, as we have seen, 

 in some degree subject to the influence of competition, which pre- 

 scribes the extreme limits within which they act ; and it is probable, 

 therefoi'e, that economic theory, based as it is on competition, may not 

 be entirely foreign to a treatise on sliding scales, based as they are on 

 combination. 



The fundamental principle, indeed, of a scale — the concurrent varia- 



