F.— ECONOMIC SCIENCE AND STATISTICS. 137 



employment, there will be excluded a mass of workers who must either 

 be absorbed by new industries, or remain unemployed. If there are new 

 industries capable of absorbing them, well and good ; but at the present 

 time it would seem that there are not. The index or barometer, therefore, 

 to which trade union and arbitration authorities' attention should be 

 directed, is not solely, or even principally, unemployment in the industry 

 immediately imder consideration, but the rate of expansion of industry 

 as a whole. 



A wage-rate is a price, and every price i.s a function of every other 

 price in the same field of demand and the same area of supply. The 

 fixing of a wage-rate may, therefore, affect the demand-price and supply- 

 price of every other kind of labour working for the same market. The 

 organic nature of the system of wage-rates was abundantly illustrated 

 during the war, when public intervention at one point led to reactions 

 that compelled intervention at other points, and finally to the attempt 

 to control all wages. It has received a more painful illustration since the 

 war in the persistent unemployment and check to expansion that have 

 accompanied the purely sectional handUng of wage-problems. The task 

 of co-ordinating wage-settlements in different industries, and of securing 

 in each the consideration of such apparently remote factors as the 

 productivity and rate of expansion of industry as a whole, may be too 

 much for the spontaneous democratic machinery by which collective 

 settlements are negotiated at present ; but the alternative is almost 

 certainly a breakdown of that machinery under the pressure of a growing 

 problem of unemployment. 



