ON SLIDING SCALES AND ECONOMIC THEORY. 533 



tion of wages and prices — is an economic principle ; and I do not know 

 myself how it can be satisfactorily or completely investigated without the 

 aid of economic theory. And so, looking at sliding scales, as I have done 

 throughout this paper, as they have been employed in the regulation of 

 wages alone, I have endeavoured to show ^ that the practice hitherto 

 followed in connection with their construction and operation is ' in a 

 measure in accord' with the modern economic theory of wages. I do 

 not think, indeed, that it is at present possible to effect a complete 

 reconciliation between the economic theory of wages and the factors 

 entering into the determination of a scale ; but I do think that, if we 

 make such allowance for the consequences resulting fi'om the presence 

 of rival combinations as the previous course of the argument has indi- 

 cated, our emphasis would rather be laid on the points of agreement than 

 on the points of difference. 



For there is — and we cannot ignore it — the broad fact of a concurrent 

 variation of wages and prices. That is an element common both to the 

 scale and to the theory. It is true that the prices in the theory ai^e in the 

 present or the future, while the prices in the scale are in the past ; that 

 the former are, as I have said elsewhere,^ 'realisable,' while the latter are 

 realised. But this difference arises from a practical necessity, which may 

 surely be regarded as one of those conditions which generally attach to 

 the putting of theory into practice, but do not on that account make the 

 theory untrue to the practice. You must ascertain the variation that has 

 taken place in prices before you can determine what variation should be 

 made in wages ; and your particular practical mechanism for ascertaining 

 prices does not allow you to do so until they have actually been realised. 

 The fundamental principle, then, on which the sliding scale and the 

 theory of wages alike are based, is not affected by this difference ; nor is 

 it — if the period of ascertaining the prices be frequent — a difference of 

 any great magnitude. And here it is relevant to add that, in the iron 

 trade at least, the competitive forces on which the theory of wages rests 

 have, as a matter of actual fact, been adduced and accepted as a reason 

 for the more frequent ascertainment of prices. 



It is true, again, that the economic theory of wages takes iuto account 

 the question of the supply of labour and the demand for its services, and 

 that this element is not explicitly recognised in a sliding scale. But here 

 again the difference is in i-eality less considerable than might be imagined, 

 and is only such as the previous course of the argument in this paper 

 might lead us to expect. The economic theory of wages is based on 

 competition, and the sliding scale on combination. But, as we have already 

 seen, combinations are not entirely emancipated from the influences of 

 competition ; and it may fairly be argued that, as a matter of actual fact, 

 competition is implicitly, if it is not explicitly, taken into account in the 

 construction and operation of a scale. 



In the construction this is the case, for the basis from which a scale 

 starts is, as Professor Munro has said, ' historically ' connected ^ with com- 

 petitive influences, so far as they have not been modified by combination. 

 The general basis, again, is only the centre of a number of particular 

 local arrangements, which in their turn start from a time when competi- 

 tive influences were at woi'k through the medium of combination, pre- 



' Industrial Peace, p. 94. - Tbid. 



' Sliding Scales in the Coal Industry, p. 19. 



