708 KEPORT— 1889. 



of that organisation, if attained, being used for the peaceful settlement of labour 

 disputes ? 



The present important movements in unskilled labour tend towards organisa- 

 tion. The ruling demand is for greater certainty of employment. The movement* 

 are partly due to the spread of education. With experience, employment, and 

 education, organisation must become easier. 



With good organisation the possibility of peace is increased. The unskilled 

 labour employed in industries which have joint boards will be attended to by 

 them. The overplus is divided amongst many different kinds of employment. 

 But the relationship of employers to unskilled labour is probably the same what- 

 ever the trade. It might be classified under certain heads, each of which might 

 have its joint board. There is theoretically no difficulty in the unskilled labour of 

 each trade in each town or district having its own joint board, but practically only 

 that employed in industries which had no joint board for skilled labour, or in 

 which only unskilled labour was employed, would need to combine and have a 

 board of its own. 



3. On the Relation hetweenWages and the Remainder of the Economic Product. 



By Sidney Webb, LL.B. 



1. The Problem one of Classification not of Distribution. — The scientific deter- 

 mination of the varipus divisions of the wealth product is primarily a problem, not 

 of distribution, as it has usually been treated, but of classification. The economic 

 product, obviously heterogeneous in its non-economic attributes, is economically 

 homogeneous only in its attribute of valuableness. This aggregate wealth product 

 is open, quite irrespective of its objective distribution, to scientific analysis and 

 classification, based upon essential differences of economic attributes. The actual 

 or potential objective distribution of the product among consumers, the outcome of 

 all the circumstances — historic, industrial, and ethical — of each community, is 

 largely effected by this natural classification, but never wholly coincides with it. 

 In economic wealth classification wage has no more to do with the hiring of 

 laboui'ers, or interest with the borrowing of money, than economic rent with the 

 hiring of land. 



The main classes of the product are : (1) reproduced capital, and (2) income. 

 Income can be classified into : {a) rent of immovable capital ; (h) rent of movable 

 capital ; (c) rent of (scarce) personal ability ; and (d) wages. 



2. The Class Wages necessarily determinate. — The reaction against the wage- 

 fund theory has been carried too far. The rejection of the limits of a predeter- 

 mined fund has often led to the assumption of the potential illimitability of the 

 share of wages within the total of the product. Or wages have been regarded as 

 the residual element in a potentially illimitable total, only the three other classes 

 of income being determinate. More careful definitions of the four classes of 

 income should enable wages to be as strictly determined as the three others. 



3. The Income Classes individual Variants. — The economic product is univer- 

 sally resultant from a combination of the factors of production, and no part of it 

 can be ascribed to any particular one among those factors. The total varies 

 according to the aggregate effectiveness of the combination of the factors, but the 

 classification of the total according to their relation among themselves. 



4. Marginal Effectiveness. — The relation among the factors of production is 

 expressed by their marginal effectiveness. The limit of each income class is deter- 

 mined by (1) the marginal effectiveness of the corresponding factor in production, 

 and (2) the excess of its total over its marginal effectiveness. The marginal 

 effectiveness of land and skill is usually nil, and that of mobile capital is measured 

 by the rate of (loan) interest ; but in all these cases the excess of the total over 

 the marginal effectiveness is great : the marginal and the total effectiveness of 

 labour as such are necessarily identical, being the product of labour on the contem- 

 porary margin of utilisation of land, capital, and skill. 



The class wages can accordingly never include any part of the result of the 

 existence of immovable or movable material capital, or (scarce) personal capital, 



