108 SECTIONAL ADDRESSES. 
feature of successful industrial development, and the individual liberty 
which this implies can only be found in countries where the law is 
respected and there is a strong Government. For, as has been truly 
said, ‘ Where order reigns her sister liberty cannot be far.’ The out- 
standing feature in the history of our own Empire, as of every successful 
commercial community, and the lesson of Europe to-day, is that indus- 
trial prosperity depends upon stable political conditions combined with 
individual liberty. The absence of either always has resulted and 
always will result in industrial stagnation and disaster. 
The conclusions, then, that I would put before you are these: There 
is no simple and straightforward system applicable to the division of 
the proceeds of industry between labour and capital. Both are essential 
to industry, and therefore to each other; hence the deeper interests of 
both lie in co-operation, and the task before the leaders of labour and 
of capital consists in promoting the interests of both, not in selfishly 
pursuing the advantage of the one at the expense of the other. Both 
must recognise the need of contenting the other, for if capitai is nov 
satisfied its springs will dry up and the industrial body will wither 
away, whilst if labour is discontented and the members of the industrial 
body war against each other the end is death. The real solution of 
the problem is a moral one, and can be achieved only if justice and 
virtue govern the lives of the members of the community, for all 
human organisations must reflect the character of those who work 
them. Arbitration offers no immediate solution of the difficulty, for 
to be effective it must be voluntarily accepted by the majority on both 
sides, and the principles by which arbitrators are to be guided must 
first be clearly expressed and accepted. But it is the goal at which 
civilisation must aim, and as a step in this direction public inquiries 
into all disputes between labour and capital should be encouraged 
after all attempts at mutual agreement have failed. 
A clearer understanding of economic truths in the industrial world 
is essential if disputes are to be avoided. It must be recognised that 
the wealth available for wages depends on the total production of the 
country, and that whilst, if production increases, wages will go up, 
if it falls wages must come down. It must be recognised, too, that 
where foreign competition is concerned the wages paid in one industrial 
country must have an important bearing on those paid in others. 
So long as the present industrial system continues—and no alter- 
native system that is practicable at any rate within a measurable 
distance of time has ever been suggested—the wages system must 
prevail. Profit-sharing is no substitute for it, since, amongst other 
reasons which I have referred to, the amount necessary to provide a 
living wage will and should absorb practically the whole of the share 
available for labour, leaving only a reasonable return to capital sufficient 
to encourage its production. 
The fundamental wage, or the wage of unskilled labour, should be 
a living wage—that is, a wage suitable to the development of the 
physical, moral, and intellectual attributes of the citizens of a free 
country. But it must be recognised that the degree to which this ideal 
can be attained must depend on the skill and endeavour of the people, 
