F.— ECONOMICS. 109 
and due regard must be had to the progress, maintenance, and well- 
being of the industries of the country. It is idle to hope that the 
- living wage can be based permanently on any given standard of clvilisa- 
tion; it is bound to fluctuate at different periods, and will depend 
_ largely on whether the industries of a country are progressive, stagnant, 
or retrogressive. Wages above the minimum or living wage are 
determined mainly by the law of supply and demand, but certain other 
factors enter into their determination, notably the principle that wages 
should be proportioned to the value of the service rendered, implying 
_ payment by results. There never was a time when it was more impor- 
tant that all should grasp, not merely what is possible, but what is 
reasonable as regards wages. For the artificial prosperity and trade 
activity that followed upon the War are at an end, and the reaction 
has begun. How long it will last no one can tell, but it is reasonably 
certain that we must expect a period of depression and falling wages 
and profits. It is essential that the wage-earners should recognise 
that reductions are inevitable, and not the fault of the capitalists ; 
they should be satisfied that all reductions proposed are reasonable. 
The capitalist, on his side, must be prepared to accept his full share 
of sacrifice, and be ready, if need be, as a temporary measure, not 
merely to receive no profits, but to face a loss, in order that our 
difficulties may be tided over until our trade recovers and prosperity 
returns. 
