cheap, and thereby actually deprive other labourers of a share of what remains.

effects of

One more illustration of economic beneficence, and Different I have done. It is a well-ascertained fact on capital that when any commodity in general demand and labour. rises in price (money alone excepted, in regard to which the opposite effect takes place), the price of other commodities falls in proportion, owing to the fact that the income of consumers does not increase with the increase in prices. The consequence is, that when the price of a commodity of this description, say bread, is high, consumers economize in other directions, in order to make good the deficiency in their income caused by the additional expenditure on this particular article. There is, therefore, less demand for those other commodities, as well as for labour, which is a commodity in general demand, and the price of them consequently falls. The wealthy man, however, is scarcely affected by the high price of bread, as this forms only a small proportion of his expenditure, and the increase in price is, to a great extent, compensated by the fall in the price of the other commodities, labour included, which he purchases. But with the poor man the case is different. Bread being with him the chief article of expenditure, when the price is high it bears heavily on his income, while his labour, at the same time, shares in the general depreciation. Thus the poor suffer in two ways; first, in the increased price of the necessaries of life, and, secondly, in the decrease in the value of their labour.

These anomalies are all the more striking when we consider the relation of capital to labour. Capital is an instrument that costs nothing to keep; it is not subject to tear and wear; it never loses bulk, and if lent out at interest it doubles itself in the course of so many years. It is far otherwise with the instrument of labour. The labourer has to be maintained at considerable cost, whether earning wages. or not; he has to make provision for sickness and old age, and the worn-out instrument has to be replaced. Whichever way we look at it, indeed, we shall find that capital has the advantage. The man whose necessities are great will have to pay more for what he requires than the man whose wants are less urgent. The trader of limited means, if he buys on credit, will be charged more for his goods than the man who has a good balance at his bankers. The poor man, who buys his necessaries in small quantities, will have to pay a higher price for them than the rich man who purchases on a larger scale.

The less consideration a man requires the more he gets, and the more he needs the less is shown to him. In the economic world honesty counts as nothing, and help comes in the inverse order of a man's needs.

With such glaring inequalities staring them in the face, it is not to be wondered at that economic writers repudiate the idea that the principles of their science are in accordance with our notions of a just administration of the scheme of things. Prof. Cairnes, in his latest

and most ambitious work, frankly confesses that he is unable to see, in the results flowing from the action of economic laws, any realization of the principles of abstract justice.1

1 "I am unable to find in the maxims of abstract justice any key to the practical problems of the distribution of wealth; and I am bound to add that just as little can I discover in the actual results flowing from the action of economical laws a realization of the principles of abstract justice.”—Some Leading Questions of Political Economy, p. 320.

Prof. Walker makes a similar admission :-" It cannot be controverted," he says, "that the tendency of purely economic forces is to widen the differences existing in the constitution of industrial society, and to subject any and every person and class of persons who may, from any cause, be at disadvantage in respect to selling his or their service or product, to constantly increasing burdens." - The Wages Question, p. 166.

CHAPTER V.

ON COMPETITION.

of self

stricted

tion.

Indeed,

THE sufficiency of self-interest once granted, freedom of contract, or unrestricted Competition, follows as a matter of course, as it would be absurd Sufficiency to assert that this principle was all-sufficient, interest implies and at the same time set limits to its ope- unreration. Unrestricted competition is therefore competi regarded by the English school of economists as the foundation-stone of their whole system. Mill goes so far as to say that it is only on this basis that Political Economy is entitled to be called a science.1 This is a principle, therefore, that admits of no compromise with the disciples of this school; and it is but fair to say that, in theory at least, they have accepted it without the slightest reservation. With them Competition is the grand regulator of industrial action. It is "beneficent, just, and equalizing.” 2 It is in the market of the world "what gravitation is in the

1 Principles, vol. ii. book iv. ch. iv. 2.

2 Plutology, p. 339.

mechanism of the heavens, an all-combining, all-balancing, and beneficent law."1 It is "the most progressive, the most equalizing, and the most communistic of all the provisions to which Providence has confided the direction of human progress." 2 This language, however, is scarcely justified by facts, for there are many circumstances in which competition is the reverse of beneficent, just, or equalizing; and so far from its being the all-balancing, all-combining law they represent it to be, the principle itself is a provision which requires adjustment. Every one knows that excessive competition produces enormous waste, and that it leads to the perpetration of fraud, the extent of which is generally in proportion to the intensity or keenness of the competition.

tition.

We shall get rid of the high-flowing sentiment that surrounds this subject as soon as we have ascerThe object of compe- tained what the object of competition really is. The vulgar idea is that the object of competition, or, at all events, one of its results, is to reduce prices. But this is neither its object nor a necessary effect of its operation, as a moment's consideration will show. Competitors do not desire to lower or to raise prices, but to obtain possession of something some one else has, and which some one else desires. Sellers compete in order to secure a market; buyers compete in order to secure possession of some commodity. There is nothing just

1 Newman's Lectures on Political Economy, p. 119.

2 Bastiat's Harmonie Economique, p. 407.