F.— ECONOMICS. 99 
ps one of the decisive factors, though not by any means the only one. 
“It is true that the law may be harsh and inhuman in its operation when 
“applied by harsh and inhuman men, but it has often proved of more 
“advantage to the workers themselves than the solicitude of Parliament 
‘or its agents. There is a familiar ring about the history of a wages 
award in the London tailoring trade made by the justices of the peace 
‘in 1771. It can be paralleled in any country in any age. The wages 
of London tailors were settled at 2s. 6d. a day, ‘ but many master tailors 
gaye some of their men 3s. a day; they paid the 15s. at the end of the 
“week openly, and then put 3s. more for a man in some place where he 
“knew where to find it. And if this money was not laid up for him on the 
‘Saturday night the master might be certain not to see his face on the 
Monday morning.’ 
But it must be remembered that in very many cases we are not 
free economic agents, and the open competition which is essential to 
‘the successful functioning of the law of supply and demand is con- 
‘spicuously absent. It is absent, for example, in the case of a general 
‘coal strike or a railway strike, where the whole community is 
“threatened with disaster. It is absent, too, if the employers in any 
‘big industry threaten a lock-out as the alternative to a reduction in 
“wages, because there is no reasonable chance for the men to find other 
‘employment, and starvation may stare them in the face. In such 
cases the law of supply and demand should not be allowed to decide 
the issue, for the economic wage would be either too high or too 
Jow from the standpoint of what is fair and reasonable. State 
intervention therefore becomes necessary. But the law of supply 
and demand always has been one of the chief factors in deter- 
mining the price of labour, and will continue to be so as long as the 
_ existing industrial system lasts. For it is merely another way of 
stating that a free exchange of services, as of commodities, is the 
foundation of all trade. Indeed, no other practicable method has ever 
pbeen devised for determining the relative value of certain services. 
hen a new industry is started, for example, it is necessary to attract 
“workers from those already in existence, and this can only be done 
by offering higher wages or better conditions. Similarly, if there is a 
shortage of workers in any established industry owing to increased 
prosperity, the personnel must be drawn from outside by the offer of 
greater inducements unless the shortage can be made good from the 
anks of the unemployed. Again, if there is a general expansion of 
industry throughout the country, accompanied as it must be by a 
general increase of wealth, the greater demand for workers will cause 
ages to rise. Indeed, as Adam Smith has pointed out, it is in a pro- 
essive society, in which the demand for labour continually rises, that 
wages are highest. ‘ It is not the actual greatness of national wealth,’ 
ne says truly—and we shall do well to take his words to heart in these 
days—‘ but its continued increase which occasions a rise in the wages 
| 4 labour.’ In a stationary or declining society wages are bound to 
fall 
* 
But, important though the part played by the law of supply and 
“demand is in determining wages, there is another equally important 
hi 
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