SOME BOOKS ON POLITICAL ECONOMY.*
THE Dismal Science would be well worthy of its nick name if it were all composed in the same style as the terribly dull and almost necessarily discursive letters from Ricardo to Malthus which have now been given to a long-suffering public. But, in truth, the science was never livelier, to judge from the vast number of works on it that are poured forth from the press year by year and month by month. Nor does it seem. to show signs of immobility, however much it may be doubted whether it shows those signs of progress which are charac- teristic of a true science. Some one or other is always to be • (I.) Wealth and Program. By George Gunton. London : Macmillan an Co.—(2.) Industrial Peace. By L. L. F. H. Price. London : Macmillan an no.—(5.) Letters of Ricardo to Malthus. Edited by James Boner. Oxford University Press.—(4.) The Saver Pound. B• A. Dana Horton. London Macmillan and Co.—(5.) Inductive Political Economy. By W. L. Sargent. London : Simpkin. Marshall. and Co.—(d) Political Economy. By J. E. fijmes. London : Rilingttme.—(7.) Political Economy. By E. C. K. Gonner. London : B. Sutton and Co.-18.) Industrial Instruction. By Robert Seid Translated by Margaret K. smith. Huston, U.S.A. : D. O. Heath and Co.
found ready to tear up by the roots propositions hitherto held to be fundamental in Political Economy, and revert to a new edition of first principles. There is no lack of this militant spirit in the works before us. Apart from the two text-books of Mr. Symes and Mr. Gonner, which seem to be both pro- duced rather because teachers in political economy wish to have their lectures in print than for any particular novelty in thought, style, or treatment, and from Mr. Price's very useful and able book on arbitration as a substitute for strikes, which is a contribution rather to our knowledge of facts in economic history than of principles of economic science, all the books before us attack one or other of the fundamental doctrines of Political Economy.
Mr. Dana Horton, in a very elaborate style, and with a still more elaborate array of historical research, delivers an attack on the gold standard, or " outlawry of silver," as he calls it, and an argument in favour of bimetallism. As bimetallism is a question on which every expert accuses every other who differs from him of hopeless idiocy or interested blindness, we will only say that the history of the past and the arguments for the future would be more readable and forcible if they were not couched in such an intricate style. And further, after reading what is to be said on both sides, one cannot help doubting whether either the advantages or disadvantages of a monometallic or a bimetallic legal tender are quite so great as the advocates on either side contend.
Mr. Sargant, in Inductive Political Economy, gives us in his preface a letter from the late Lord Derby in 1871, referring to a former work of his, in which he says that Mr. Sargant's essays are " full of original thought and practical good sense : rare qualities separately, and very rare indeed in combina- tion." The late Lord Derby was not, perhaps, precisely an authority on Political Economy, and we have not read Mr. Sargant's former essays ; but the rare combination of qualities which Lord Derby found in them seems not to be reproduced in this book to any striking extent. The book is a collection of gushing exclamatioile on subjects more or less connected with Political Economy. The value of the arguments in it, which are intended as an attack chiefly on the principle of laisser faire, may be measured by the fact that he thinks Mr. Sargant has annihilated Herbert Spencer's principle (with which we do not agree), that free libraries. &c., ought not to be provided by local authorities out of forced contributions, by saying that " Mr. Spencer, a recluse, probably knows nothing of the working of Free Libraries; he does not enjoy the pleasant sight of artisans flocking to read the morning-papers in a lofty and well-lighted room : he is perhaps ignorant of the fact that in the reference library there are on the shelves such works as Dugdale's Mona:diem, various editions of Shakespeare, the Acta Sanctorum : if he had known all this, he would have seen that these libraries, as they are paid for by all classes, so are they for the benefit of all classes."
Mr. Gunton's book is of a very different stamp. With great clearness and force of style and thought, he has set himself in this, the first of two volumes, to attack two of the most long-standing doctrines of Political Economy,—the doctrine of the wages fund, and the determination of wages by supply and demand. As regards the first, we have more than once protested in these columns against the old high-and-dry theory, that the wages fund is a fixed and limited proportion of existing capital, the product of past labour set aside before- hand to assist future production, and of so definite a character that the only way to increase the amount received by the individual labourer is to diminish the number of the individuals to receive it. It is true, of course, that the labourers cannot be kept alive till the product on which they are engaged is finished or sold, except on a portion of the already accumulated -stocks of food. But, in the first place, what will keep them alive, and wages, are very different things ; and even what will keep them alive is no fixed and predeterminate quantity, but, especially in these days of universal commerce, something that varies from day to day and hour to hour, as corn and beef and alcohol are drawn from Russia, Australia, North and South America, with crops ripening from one day to another. There is no fixed and predetermined quantity of capital set aside. Even if the wages fund were, in fact, drawn from only one country, it would not be so; but the fund might be and would be increased or diminished to the extent of the whole existing capital of the country at the option of the employer, as the political outlook or the state of the seasons gave a greater or less hope of profit from day to day. And even on the old view, so far from the wages fund being fixed and incapable of increase, the smallest change of taste in the capitalist classes, a rise or fall in their standard of living, would at once increase or diminish the wages fund. But, as Mr. F. A. Walker, the eminent American economist, has well shown, the quantity of the wages fund is not determined by a fixed quantity of past capital devoted to production, but by the indeter- minate quantity of the product on which the labourer is engaged. Wages, in other words, are not measured by the realised past, but by the unrealised future. And Mr. Gunton, also an American economist, has produced striking proof of this by showing that in new countries, where the actually accumulated stocks of food or fixed capital are small, the labourer works, except for his actual keep, on credit, and is engaged for wages at a rate corresponding not to his portion of the existing capital, but to the much larger share which his labours are estimated to produce. So far, Mr. Gunton is merely reinforcing Mr. Walker. But he goes a step further. Mr. Walker followed his attack on the wages-fund theory by saying that wages, being paid out of the product, are deter- mined by the product. Mr. Gunton remarks that this is true to some extent as to their upward limit,—they cannot, in the long-run, be more than the product. But to say that they are determined by the product is to confound wages with profits. Mr. Mill and others had already determined the lower limit of wages, the amount necessary to enable the labourer to live. Mr. Gunton aims at finding what determines the actual amount of wages between these two limits. He finds it not in supply and demand, the greater or less quantity of labour in the market, but in the cost of production, which in the case of labour means the standard of living. Wages on the whole are, in fact, determined by what it costs to produce the labourer. Where the standard is high—as in the case, say, of barristers and journalists—the wages are high. Where the standard is low—as in the case of Polish Jews in the East End, or Hindoos in the East—the wages are low. This, how- ever, only removes the question one step further back. What determines the standard of living? Mr. Gunton's answer is, —The price and quantity of commodities (material or other- wise) consumed, the former determining the nominal cost and the latter the real cost of living. Mr. Gunton seems to con- sider this a solution of the whole question. But it is an argu- ment in a circle. Wages are determined by the standard of living. Admit it. But the standard of living is determined by the cost and quantity or quality of consumption. But that, again, as he in effect admits, depends on wages. For the demand—the effective demand, that is—for commodities is determined by the purchasing power—that is, again, by wages. The only solution is, Solvitur ambulando. The wages of the past have determined the standard of living of the past. With the natural tendency of people to struggle upwards, each suc- ceeding generation wants things a little better than its fathers wanted them. The mere effort creates a further demand for commodities, which in its turn creates a further demand for labour to create them. And in the result, while Augustus Caesar had not a shirt to his back nor a pane of glass to his bedroom window, all but the dregs of modern society—who are not labourers—enjoy them both. To elevate the position of the labouring classes, therefore, you must raise their standard of living, and, as Mr. Gunton endeavours to prove by an elaborate historical review drawn from the facts of English industrial history, the best way to do this is by gradually shortening the hours of labour, and so giving leisure for the acquisition of new tastes and the development of new wants. He argues for an eight-hour day, and, though we are far from thinking that with the competition of European labour working much longer hours, against us, this limit could at present be safely adopted, we have no doubt that as labourers in different countries raise their standard of taste, education, and skill, they will gradually shorten their hours of labour till an eight-hours' day may become possible.
As Mr. Gunton, with able pertinacity, is never tired of insisting, in these days it is the masses of producers that are also the consumers ; and the demands of the masses that make good times for the classes. Give them a larger share of the products of induetry, and more leisure to enjoy it, and you will indefinitely increase the demand for commodities and
the employment of labour, and pari passu will increase capital if not net profits.. The doctrine is certainly an inviting one, and well worthy of longer and more serious consideration than we can give it here. If part of the increased leisure in boyhood —for a prolongation of school-life Mr. Gunton advocates for similar reasons—were spent in the industrial instruction ably advocated by R. Seidel (who has suffered much at the hands of his translator) the product and the wages would certainly not be diminished.
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