734 REPOKT— 1897. 



manual exertion has not been realised. On the contrary, these classes have shared 

 to the full in the increased results attending production. Accordiug to the most 

 reliable estimates, their condition has undergone not only absolute but relative 

 improvement ; and this is due largely, if not altogether, to the opportunities con- 

 cealed in the bosom of the economic causes which affected employment so ominously. 

 The true remedies are those which arise out of the historical circumstances of 

 the complaint. 



The points which have demanded attention are these. Firstly, the causes, 

 primarily economic, which have made labour difficulties so prominent ; secondly, 

 the nature of the great economic change resulting in the separation of the labour 

 under employment from that determining and directing industry ; and thirdly, the 

 extent to which this has furnished opportunities for the formation of labour 

 associations, and the development of a State policy for regulating the conditions of 

 employment. With regard to the latter point much has been said. It has, for 

 instance, been argued by some that the great modern interdependence of labour of 

 different kinds, the growth of State control, and the supersession in many directions 

 of the private employer by large companies, trusts, and syndicates, are indications 

 of the necessity and possibility of the monopoly and entire management of industry 

 and commerce by the State. But the simplicity of this remedy, which has proved so 

 attractive to many who dwell in a world of ideas as far removed as possible from 

 fact, is an indication of weakness in the eyes of the student of social and historical 

 phenomena. As he examines the varying moods and forces which unite in the 

 tano-led complex of modern industry and society, as he traces from their growth 

 the tendencies which have made them what they are, interweaving, counteracting, 

 modifying and coalescing in the pages of history, he grows aware of the intricacies 

 ■of the economic constitution and mistrustful of simple theories based on the 

 -confident recognition of some elements and the neglect, equally confident, of 

 many others. The one-sided solution is no solution at all. Similarly insufficient 

 is the reading which finds a confirmation of unrestricted individualistic competition 

 in the increased social demand for enterprise and individual energy. The careful 

 study of the past two centuries enforces several conclusions as to economic tenden- 

 cies all of which require recognition. In the first place, with the growth of intricacy 

 and the extension of the area of production and distribution, the free exchange of 

 •commodities has become more and more the one effective means of ascertaining 

 what is wanted and what are the requirements of the community. In the second 

 place, so far from there being a diminution, there has been an increase in the 

 urgent need for eliciting and stimulating individual ability. While, in the third 

 place, the necessity for State regulation has been enforced and new opportunities 

 for it provided. 



In turning to the secojid matter for consideration, the treatment by economists 

 and in economic writings of Labour and the circumstances of employment, 

 and its results in providing better means of forming correct judgment and 

 judiciously guiding action, will occupy our attention. On the importance, in 

 "this respect, of researches into economic history, little need be added. Its 

 value is felt in every direction. Not only does it discountenance premature 

 generalisation based on insufficient, and, ii' I may use the expression, fleeting 

 data, but it guards us against the still greater danger of first forming con- 

 clusions on hypotheses, and then forgetfully assuming that these conclusions are 

 based on observed facts. Viewed more positively, it adds the conception of 

 organic development and furnishes a large share of the knowledge which forms a 

 preliminary to judgment, and which should form a preliminary to social action. 

 But the point to be insisted on here is the enormous recent advance achieved in 

 this direction. Again, the abstract theory of distribution, dealing with the relation 

 between various classes of payments, as rent, profits, interest and wages, has 

 nndergone considerable change, owing to the labours of the mathematical school 

 and other economists, who, starting from the qualitative conceptions first promi- 

 nently employed by Ricardo, have dealt with the inter-relation of these and their 

 connection with value. But by far the most notable progress has been in 

 matters involving quantitative, as well as, or in place of, qualitative admeasurement. 



