534 iiEPORT— 1888. 



scribing what we have ventured to call a maximum and a minimum limit 

 to wages. 



Nor are the facts different from this when we turn our attention to 

 the operation of a scale ; for, should particular local circumstances con- 

 spicuously alter, the intervention of the joint committee of masters and 

 men might be solicited to alter the particular local arrangements without 

 interference with the average wage which forms the basis of a scale ; and 

 should the general circumstances of the trade themselves conspicuously 

 alter, or those of the labour market, experience has shown that the basis 

 originally adopted in the scale may be liable, and that more than once, to 

 readjustment. 



Nor must we forget that in some trades — and especially in such trades 

 as the coal and iron mining industries, where the selling price is the sole 

 or paramount consideration — variations in prices may be taken as a toler- 

 ably adequate index of the demand and correct price for labour in those 

 particular trades. And this is likely to be the case in a still higher 

 degree, on account of the fact that the combinations present material 

 hindrances to the entrance of outside competitors into the market, and 

 thus the supply side of the question is in a large degree robbed of its im- 

 portance and the supply becomes stereotyped. 



Where, indeed, the cost of the raw material is an appreciable and 

 fluctuating element, the index afforded by variations in prices becomes 

 deficient. But here I can only remark that the inclusion of changes in 

 the cost of the raw matei-ials among the various factors entering into the 

 determination of a scale may be a matter of time, and may introduce an 

 added complexity, but is certainly in no way incompatible with its esseu- 

 tial characteristics. We are indeed only too liable to forget, on the one 

 hand, that sliding scales possess considerable elasticity, so much so that 

 their complete reconciliation with economic theory, if we allow for the 

 presence of the combinations on which they rest in industrial matters, is at 

 least conceivable ; and on the other that they are as yet in their infancy, 

 and may develop in a manner and degree that it would be folly to attempt 

 to anticipate. They may possibly be reconciled with more completeness 

 to economic theory, and they may also help to modify that theory. There 

 is no doubt that they do present the spectacle of two combinations 

 expressly recognising, and endeavouring to facilitate in its operation, a 

 fundamental principle of competitive economics — the concui-rent variation 

 of wages and prices ; and there is also no doubt that where you have a 

 scale regulating wages there you have two combinations influencing the 

 conditions of the competitive market in such a way that no theory of 

 pure competition will enable you to determine the exact point at 

 which they will agree on a price. The starting-point then of a scale is 

 arbitrary ; its general working is the exemplification of an economic 

 principle. 



And it is, we must not forget, a pi-inciple of great importance. To 

 satisfy, indeed, all the conditions that economic strictness would require, 

 it ought, perhaps, to be elaborated in some such way as Professor Mar- 

 shall has pointed out.' But, presented as it is in its broad and, if you 

 like, unscientific form, had it met with general recognition I think that 

 it is scarcely too great presumption to infer that no Royal Commission 

 would be sitting at present to investigate the ' recent changes in the 



' Industrial Peace, Preface, pp. xx.-xxii. 



