918 REPORT—1890. 
articles made and gets their price, while the labourer gets a stated or stipu- 
lated sum for the making of them. The employer may regard labour as a com- 
modity, but it is not so in the same sense as his other means of production. 
The position of free men is sui generts; and the power of a wages-earner to mutiny 
or desert is the germ of all improvement in his condition. He binds himself to work 
by a free contract, though, in the lowest forms of work for wages, his real dependence, 
through ignorance and poverty, makes the freedom merely nominal. Combination 
gives him a real power of choice, and may even make him stronger than the 
employer. The wages of salaried managers of a company are to be treated as 
similar; but wages of management are usually difficult to distinguish from profits. 
In what way are all such wages related to cost and price? Not as other means of 
production ; for there is no market for labour in the sense in which there is for 
capital and commodities. The employer values the labourer by his contribution 
to the product, but what is the relation of the labourer’s retribution to his con- 
tribution? The theory of a wages fund defined his retribution by a general law, 
according to which the wages were predetermined by the employer’s capital or 
a stated portion of it. The theory was used too much as a statement of facts 
instead of tendencies, and it depended on wrong assumptions about the equality of 
the rate of profits, &e. A more recent theory that wages are determined by the 
successful or unsuccessful competition of machinery with hand-labour does not 
explain all the facts. There is a sense in which wages are limited by capital and 
are advanced out of capital. The burning question is as to the precise extent of 
the limitation, There is a margin within which wages may vary favourably or 
unfavourably to the labourer in proportion to his strength through combination or 
other resources. Even the theory that wages depend on the productiveness of 
labour cannot ignore this margin, It is difficult in all cases to allocate to the 
workman and to the co-operating means of production their exact respective shares 
in the product. Even the theory of Jevons does not escape the difficulty, and 
President Walker's really inverts the relations of employer and employed. The 
existence of piecework, the sliding scale, and attempts at profit-sharing are an 
acknowledgment that wages do not at present vary with productiveness. The 
notion of final utility is of less use here than elsewhere, because (owing to labourers’ 
combinations and the probability of their increasing strength) wages are determined 
rather by and for groups than individuals, and labour cannot be used in great and 
small quantities at the pleasure of the employer. The cost of living, again, will 
not furnish an adequate theory of wages; and, finally, though labour is part of the 
employer’s cost, neither labour nor any other part of the cost can, strictly speaking, 
be said to determine the value; it is the anticipated value that makes the cost 
seem worth incurring. The author’s conclusions were that general theory can do 
no more than lay down certain physical and moral limits within which wages 
will be fixed. The employer’s power to pay ‘wages’ (as such) is limited by the 
capital at his disposal for that purpose, and his will to pay them is limited by his 
calculations of the value of the product. On their part the employed cannot take 
less than what secures them bare life, and will not take less than what secures 
them the conventional standard of living, while their power to secure more than 
this will depend on their general resources as compared with the employer's. 
4. Progressive Tawation. By C. F, Bastasre, DL.D. 
Growing importance of the question. The older economists (with some excep- 
tions) in favour of proportional taxation. New influences in recent years, viz. : 
(1) Increased popular power, with tendency to place the burden of taxation on 
the rich; (2) modern economic theories as to (a) capacity of taxpayers, and (6) 
the nature of value and utility. Necessity for distinguishing apparent from real 
progression. Chief examples of former: (1) Freedom of the minimum of sub- 
sistence from taxation; (2) exemptions and abatements in favour of small incomes 
in order to counterbalance the undue pressure of indirect taxation. Real pro- 
gression: its forms; usually that of an income or ‘property’ tax. Principal 
objections: (1) Arbitrariness; (2) risk of evasion; (3) hindrance to accumulation 
a 
