TRANSACTIONS OV SECTION F. 735 



Here rank the elaborate and important researclies into the effects produced by 

 alterations in the rate of wages and the hours of labour, into the causes which 

 condition interest and govern its rate, into the effect of royalties and rents in 

 various industries and under varymg conditions. While as regards general well- 

 being a vast mass of material has been accumulated, and many careful and sug- 

 gestive treatises published. We know infinitely more than was known even a 

 short time back about the effect of occupations on health ; the character of working- 

 class expenditure and the relation between such expenditure and receipts; tlie 

 different modes of payment for labour with their respective consequences ; the 

 experiments in co-operation, in profit-sharing, in socialism, in communism, in 

 municipal and State management, and other different directions ; more about 

 the effect of charity in relation to earnings ; about attempts at arbitration, and 

 the like. We have histories of trade unions, of co-operation, of benefit societies, 

 and of other associations depending on working men's efforts for their maintenance 

 in the various industrial countries. The effects of monopolies and partial mono- 

 poUes resting either on legislative grant or perpetrated in practice have been 

 <;arefully examined. Modes of trading, with tlieir almost invariable fringe of 

 speculation, have been treated of, with the view of ascertaining their influence 

 on the standard employments of the nations. These are but illustrations, but 

 they are sufficient for the purpose. They point to active growth in Economics in 

 regard to this particular subject. On the other hand, they are painfully insuffi- 

 cient in themselves. We may know more, but we want to know more still. 

 Concurrent with the advance in knowledge, the general conceptions of labour and 

 with reference to its treatment have undergone alteration most marked in three 

 directions. Labour power is no longer viewed as a mere aggregate of hard and 

 disconnected units which can be sifted out or increased under the stress or stimulus 

 of unhindered competition. We recognise that the labour which survives may be 

 so aflfected in and by reason of the very process of its selection as to be widely 

 different from the forces contemplated and required. In social evolution de- 

 generation, or at any rate variation in the surviving factor, is an almost regular 

 phenomenon. In the second place, the effects of conditions on efficiency have 

 been established in a variety of directions, a matter of peculiar importance when 

 we pass from the contemplation of the working powers available at any given 

 time to questions of their permanence and their future. In the third place, the 

 economic change in the circumstances of employment has served to introduce to the 

 notice of economists the necessity of certain agencies to counterbalance the lack of 

 self-direction and responsibility, agencies, that is, of education and combination. 



In view of such and other developments, the great need of the present, apparent 

 nowhere more forcibly than with regard to the matter occupying our attention, 

 is on the one hand the careful modification of the general body of economic 

 reasoning in their light, and, on the other hand, continued close inductive study 

 into the circumstances of both the past and the present. This latter is indeed 

 necessary. To recognise this does not imply any disparageinent of other methods 

 required in other stages. In many of the subjects already singled out for notice 

 preliminary deductions have been made and have proved of the highest value. 

 The theory of non-competing groups, the earliest refutation of the wage-fund 

 theory, the theory of the effect upon productivity of altered hours and wages, afford 

 admirable instances of the way in which truths afterwards established on a wide 

 inductive basis were foreshadowed, and an estimate of their importance attempted 

 by writers proceeding along the lines of partial observation and large use of 

 assumption ; but these in common with other hke attempts must be regarded as 

 preliminary. They do not indicate, for instance, the extent to which the element 

 of which they treat is important. Surely it is just here that we see the necessary 

 relation and mutual importance of the different methods of study which have some- 

 times been treated as antagonistic. Preliminary and working theories are neces- 

 sary to the wise conduct of inductive inquiries, but these in their turn are 

 necessary to formulate a theory which may be something more or something other 

 than that which it supplants, which is to be representative in place of being 

 suggestive. But it is a grievous mistake to take the working theory for the necessary 



