F ECONOMICS. 109 



to every other mind, and no common denominator of feeling seems 

 to be possible' ('Theory of Political Economy,' p. 15). The second 

 inquiry presupposes the faculty which forms the main theme of Adam 

 Smith's ' Theory of Moral Sentiments,' Sympathy; in addition to the 

 self-interest which is prominent in his ' Wealth of Nations.' Tho first 

 inquiry belongs to pOiRtical economy in a strict or ' proper ' sense, which 

 we may call pure economics. The second inquiry belongs to political 

 economy in a larger sense, which includes the satisfactions attending 

 the possession and use of wealth — say the economics oi welfare. The 

 second inquiry is wider than and comprehends the first ; since an increase 

 in welfare is, ceteris paribus, apt to attend an increase in wealth. As 

 equality in the first sense, concerned with production only, tends to 

 maximise the national income, so equality in the second sense, affecting 

 distribution, tends to maximise that aggregate of welfare which the 

 utilitarian legislation increases, which wise taxation diminishes as little 

 as possible. 



Above both these aims, higher even than economic welfare, is well- 

 being other than econo'mic- — mo'ral or spiritual good ; a hurt to which 

 may well outweigh a gain in satisfactions less independent oi material 

 conditions. But the ' should ' in the question with which we started 

 is to be interpreted as referring only to advisability in the first or second 

 sense. The answers to the question thus limited may at least afford 

 materials for the answer to it in all its bearings. For the present I 

 confine myself to the question in its first sense. In a sequel I hope 

 to consider the question in its second sense. 



3. To the question (A) whether competition between 'the sexes 

 should be restricted it may seem sufficient to reply that competition 

 between all classes should be unrestricted. In the immortal words of 

 Adam Smith, ' all systems, either of preference or of restraint, being 

 completely taken away, the obvious and simple system of natural liberty 

 establishes itself. Every man, so long as he does not violate the laws of 

 justice, is left perfectly free toi pursue his own interest in his own way, 

 and to bring both his industry and capital into competition with those 

 of any other man or order of men.' This system tends to increase 

 ' the real value oi the annual produce of its (the society's) land and 

 labour,' or, as we now say, the national income. It is pointed out 

 by Professor Pigou that, in order to secure a maximum of produce, 

 productive resources must be so distributed that the net product O'f the 

 unit last applied in each branch of itidustiy — the marginal productivity 

 — may be tlie same for all branches. To this proximate end laisscz 

 faire is a means. A maximum of wealth will thus in general be attained 

 by unrestricted competition. 



4. But a viaxivium is not always the greatest possible value of which 

 a quantity is susceptible. The top of a hillock presents a maximum ; 

 but it is not always the highest attainable height. Half-way up Mount 

 Everest is higher than the top of Snowdon. So it may happen that 

 the unrestricted play of competition between short-sighted, self- 

 interested employers and desperately poor workers, though securing a 

 temporary maximum of production, may bring a.bout that deij nida- 

 tion of labour which the warmest champions of competition have 



