The foregoing comparison between the gold and the labour market establishes a presumption in favour of the view that, in an absolutely free market, the price of labour must tend to rise. The trade unionist, however, will not trust himself to the open market, and seeks to raise the price of his labour by combination and by various restrictions on the right of Free Exchange. Let us consider this opinion somewhat more in detail.

The attitude of the trade unionist would seem to rest on a certain phase of the Malthusian terror. As a general proposition, the doctrine attributed to Malthus has lost its force. If a really effective labour exchange were established, all labour would be passed into currency. Malthus' theory can only be true in markets which are artificially limited. There is unfortunately congestion of population in certain industries, and when relief is sought, as it too often is, by action which results merely in limiting production, it may occasionally be true that population increases more rapidly than subsistence. Still, if there is no absolute mobility of labour, there is certainly no absolute immobility, and Mr. Henry George is, I think, right in arguing, not perhaps that subsistence actually does increase more rapidly than population, but that with a better organization of the labour market it certainly would so increase. The idea of the trade unionist that there is a limited amount of work to be done, is parallel to the Malthusian fallacy that there is a limit to the increase of subsistence. There is no truth in either proposition so long as no artificial impediment is put on those Free Exchanges which at once employ labour and increase subsistence.

To what extent under existing circumstances are labour, and the capital necessary to its employment, distributed in the industries most proper to them by the operation of Free Exchange?

Dr. G. B. Longstaff, in an elaborate paper on Rural Depopulation, read before the Statistical Society on June 20, 1893, sums up the matter as follows. 'Reduced to a sentence, what does this mean? It means that the dream of the free-trader is being fast realized. That we are more and more learning

to do in each place that for which each place is most advantageously circumstanced.' As between the town and the country we have already reached a point where it is a somewhat nice calculation to determine whether the higher wages of the town are really preferable to the lower wages, lower rents and allotments of the country. The migration to the town has to some extent levelled up the rate of wages all over the country. An expression of this opinion does not debar one from thinking that a greater freedom of exchange in the matter of land values might turn the tide of migration back again to the country. The phenomenon of labour and capital migrating in search of greater freedom of enterprise is nothing new. It is the motive of the colonization of America and Australia. Hitherto these countries have for the most part taken our unskilled population only. We have preserved our market for skilled labour, because of our international free trade. It is suggested, however, by Mr. Maitland, that in the event of the United States adopting a policy of Free Trade, the greater internal freedom of American industry would attract both skilled labour and capital to a country where a career is open to talent, just as in mediaeval times industry deserted the chartered towns, where it was protected and regulated, for the open villages which grew to be the great manufacturing centres of to-day.

Nor in this connexion should it be forgotten that the worst incidents of our feudal laws of settlement lasted down to the end of the last century, and that up to 1795 no poor man could come into a parish in search of work without being liable to removal to the place of his settlement, not because he was chargeable to the poor rate, but lest he should become so.

Considering the many impediments to its mobility, the wonder rather is that labour has acquired even its present measure of fluidity. When we speak of the mobility of labour as between the town and the country, we do not, of course, mean that each labourer is able to transfer his labour from one market to another. A curious demographer might find in a Dorsetshire village a labourer who had never heard of

Yorkshire, but there is probably not a village in England from which there has not been some migration, some dispersion of the young labour that comes each year to the market, and this is all that is needed to relieve an overstocked market.

Again, it is sometimes argued that the great specialization of employment in modern industry is inimical to the mobility of labour. This, however, seems by no means to be the case. Some interesting information on the subject has been collected by Mr. Llewellyn Smith, in a pamphlet on 'Modern Changes in the Mobility of Labour.' From this it would appear that ability to manage machinery increases rather than diminishes a labourer's power to change his employment. A remarkable instance of this is mentioned, in which, at the close of the American war, a gun factory was turned without change of staff into a sewing machine factory. Although we are still very far from the time when there is one market and one price for all competent and employable labour, those who see no other solution of our social difficulties than that which involves a natural organization of society on a basis of Free Exchange may find some comfort in the progress already made.

Before leaving this aspect of the question, it is worth noticing that there is an alternative to the mobility of labour, it is the mobility of capital. We shall have occasion later on to discuss the question of popular banks. I may, however, so far anticipate, as to suggest that the Dorsetshire labourer who never heard of Yorkshire may be a competent and trustworthy agriculturalist, that if by means of a co-operative bank he could obtain the use of capital, his ignorance of geography would not interfere with the profitable cultivation of his allotment any more than the Lord Chief Justice's indifference to the fame of music hall singers stands in the way of the due discharge of his judicial functions. The Dorsetshire labourer may refuse to move, but the capital may come to him. The thing required is not mere mobility, but a certain character of economic competence. The career opened to the humblest agricultural talent by the system of popular co-operative banks in Germany and Italy is an element in the problem worthy of careful attention.

The following practical instance will illustrate my contention that Free Exchange is the best available distributor of labour, and that it is to the interest of the labourer more than any one else to allow his labour to be directed by its influence.

The wages of domestic service are a familiar but often neglected instance of the rapid rise in the value of labour in an open market. Within the experience of many people still living the wages of domestic servants have at least doubled. This result has come about in a market in which transactions have all been made in detail. No person willing to accept wages has been prevented from so doing by any labour organization. Undoubtedly here and there persons have served for very low wages, but the general result has been a great advance in the average price paid for the various qualities of domestic labour. No harm has come to the interest of labour, because some transactions, rather than not take place at all, have taken place at a very low rate of exchange. The tendency of the market has been upward, and continues to be upward. The balance of advantage is certainly with the servant rather than the housekeeper.

This, I contend, is largely due to the fact that domestic servants have done their bargaining in detail, and in a free market. The free bargain in detail, far from being a cause of low wages, is the only method by which an impersonal market can be organized without at the same time depriving it of its sensitiveness and power of expansion. The wages of a good cook or housemaid are just as well understood, and just as impersonal, as if they had been settled by the arbitration of a chamber of commerce or a long series of strikes. Servants' agencies, the advertisement columns of the papers, the good offices of friends, are sufficient to constitute an open labour exchange in which domestic servants have more than held their own. Any other organization of the market would have deprived it of its sensitiveness, for wages rise not because the whole bulk of the labour in a particular trade can at once command a higher price, but because in virtue of the bargain in detail the better class of labour gets a rise first, and establishes a precedent which others follow. Any other

arrangement would have prevented the expansion of the market, and this perhaps is the most important point of all. If, by means of a trade union combination, attempt had been made to force the market in order to give to the servant something over the free market rate, it would of course have prevented many people from employing servants. This actually has occurred in America, where the high wages of labour, and the greater equality of condition, have justly enough enabled domestic servants to set up higher pretensions. As a consequence, hotel life has been adopted by many American households which otherwise would have employed servants. In America this is a natural and legitimate adjustment, for the free market enables those who would otherwise be servants to make a better use of their labour. In this country the conditions are different. To have kept persons willing to enter domestic service out of the market, without providing them with some equally good occupation, would have been most mischievous.

The modern trade unionist is inclined to overlook these advantages of the free market, and to ignore the objections to the organization of the market by forced combination.

Looked at from another point of view, it may be said that the favourable conditions of the domestic service market are due to the fact that the demand has always been in excess of the supply. This, again, is due to the continuous increase of wealth, and to the ever-growing number of persons who can afford to keep servants. This same increase of wealth gives rise to greater demand for all articles of consumption. Under a proper organization, therefore, there should be no break in the continuity of demand, for then the man who 'demands,' makes his demand effective by 'supplying' something in exchange. Only a free self-adjusting employment of labour and capital can discover what that 'something' is, and what quantity of it is required. If by coercion of the market a higher price is kept up, say in miners' wages, than employers can for long afford to give, we lose the valuable warning of the free market which says, 'there is too much labour here already, let it be diverted elsewhere.' If, as must, I think, be