Parents are extremely anxious to direct their children to the career open to talent; but the restrictive policy of the time obscures the signs of the market and obstructs elementary arrangements for technical education. Much of the competence of labour must always depend on this exercise of parental responsibility. In the interest therefore of a better distribution of labour, artificial monopolies of the right to labour, as claimed by a certain section of Trade Unionists, ought to be strenuously resisted.

Again, when a man passes from parental control he still must study his market and seek to offer the quality of labour most in request. He must not simply deposit himself as a lump of unskilled labour, or think that society is disordered because permanent and profitable employment does not come to him unsought. He will be wrong to assume that the world has use for nothing but his mere labour, that it is not prepared to give additional reward to intelligence, sobriety, trustworthiness and skill. One of the few points on which all economists seem to agree is that effective and highly paid labour is the cheapest to the employer. The practical man has never doubted the fact. The testimony of the elder Brassey has long been on record. Even in the matter of agricultural labour, often erroneously described as unskilled, superior quality is appreciated and sought after. Very recently I was assured by a skilful agriculturist that there were labourers whose labour he could not profitably employ, even if he got it for nothing. He preferred, he said, looking merely to his own interest, to hire the very best men and to secure them by paying as much as 25 per cent. or 30 per cent. over the market rate. It is these transactions which pioneer the way to higher conditions for all. The attempt to restrict competition, with the object of obtaining for the less competent labour the same wage as for the more competent, is a policy likely to defeat itself. It prevents the pioneer movement of the best, and in the long run is by no means a benefit to the inferior workman. Competition makes war on the person of no man, it acts rather as a friendly pedagogue for the repression of unprofitable habits and for

the inculcation of serviceable social character. To withdraw a class from the educative influence of this force is to leave it at the mercy of those ever-present lower motives of selfindulgence which in the interest of progress should be controlled if not eradicated.

Important as these considerations are, the coping stone cannot be set on the edifice of industrial competence till the labourer learns something of the art of capitalization. Under certain conditions responsible character, even such as is attainable in the humblest ranks of labour, is capital. Under the popular banking system already mentioned the German and Italian peasant is enabled to exchange his mere promise to pay for the most material form of capital, paid in the currency of the country. This is an effort of industrial enterprise, a triumph of social organization, to be distinguished from thrift and saving. The development of working-class credit is still in its infancy; but it is obvious that, if a reputation for character and skill can give a man a command of capital, the property which every man has in his own labour has received a vast addition to its value.

A sound system of commercial business, based on the willingness of a successful banking association to give cash on equitable terms in exchange for the poor man's mere promise to pay, is, perhaps, the most highly developed harmony of a system of Free Exchange.

The ordinary thrift of the working class is, however, distinct from this. In depositing in a savings bank it is the poor man who makes what the Roman lawyers called an emptio spei, the purchase of a hope; and to complete our survey of the causes that affect the value of labour something must be said of the advantages which accrue to labour from the responsible temperament gained by the practice of frugality and thrift and from the stronger position in the labour market which savings give to their possessor. The point is best illustrated by the following comparison.

It has been contended (and there cannot really be much doubt about the matter) that outdoor relief, more especially as paid in former times to the able-bodied man and now to the able-bodied

widow with children and to persons only partially disabled from work, has a tendency to lower the wages of unskilled labour. Some keen but not very wise controversialists have argued that this is excusable, on the ground that the same result is brought about by the work of those in possession of a small amount of savings, and of married women and others not wholly dependent on earnings for their support. Even if this were true it would be no justification for supplementing wages out of the poor rate; but, of course, it is the very reverse of true. In nine cases out of ten, application to the poor rate comes from a class accustomed to live a purely proletariate life, from hand to mouth. Those who have had anything to do with the pauper class know that the whole problem of pauperism is one of character and not of income. When the expectation of a class has for long been fixed on the rates as a source of income, it is extremely difficult to detach it and to indoctrinate it with any appreciation of the advantages to be derived from saving and self-control. To have nothing is the well-advertised qualification precedent to receiving something from the rates. To the class, therefore, which has not detached itself from the influence of the Poor Law there is an artificial impetus given to the natural tendency to consider the present rather than the future. An addition, from whatever source, to the income of this class is, unfortunately, no occasion for rising to a higher level, for it is used merely to allow the hand-to-mouth life to be for the time a little more lavish.

When, however, the imagination is detached from reliance on poor law relief, and is exercised in the accumulation and management of savings, an entirely different tone is created. The possession of savings as a possible source of income is a cause of firmness rather than of weakness in the labour market. The possession of savings makes men, as it is termed, 'very independent.' I have argued that it is to the interest of labour to preserve a sensitive market by allowing transactions both at higher and lower prices to take place freely. The use of a common strike fund, a perfectly legitimate weapon, is apt to destroy this

sensitiveness. What is required is something of the nature of a universal private strike fund at the disposal of every man. This is supplied potentially by the savings bank account. The personal independence of the units of which labour is made up, is a securer basis to build upon than any conceivable form of combination imposed from without.

Leaving, then, the question of the property which every man has in his own labour and the various influences which affect its value, let us now turn to a consideration of the other property in which the working class is interested and see how far in this matter also it is to their interest to rely on a policy of Free Exchange. Labour, though the most important of a man's possessions, is not coextensive with his life. There are times when he is sick and old and unable to work. Labour, moreover, is an expenditure of force more or less painful; and he therefore desires leisure and rest. These are legitimate motives urging him to action. To satisfy them he has again made use of the principle of exchange. He has long outgrown the stage when, to provide for periods of sickness, old age and leisure, he has hoarded provisions. He now makes use of a pure form of exchange. To take the simplest instance: he goes to a savings bank and exchanges a portion of his wages for a credit. His property in the coin deposited ceases, and he accepts as an equivalent the bank's promise to pay. He goes to a friendly society or to an insurance company and he exchanges a series of premiums paid and to be paid by him for the promise of the association to pay him an allowance in sickness or a round sum on his attaining a certain age or at death, as the case may be. The purchase of a share in a railway company or in a co-operative store is of essentially the same nature.

It is most important to realize that all this creation of saving is effected by a series of exchanges. The only new feature in the transaction is the willingness of the wage-earner to exchange the material of his wages for some immaterial instrument of credit. The motive which impels men to this form of activity (which is just as much a phase of human

energy as manual labour) is common to all the race. It is a desire to purchase the power of deferred consumption or to economize the painfulness of labour.

This juncture is important, for it is at this point that the Socialist raises his revolt against the principle of Free Exchange. It has not been possible to deny a man's right of exchange over his own wages when used to buy articles for immediate consumption. The attack is on what, with invidious intent, is called Capitalism.'

Obviously two men cannot eat the same portion of food or occupy the same cubic space of shelter. In the act of consumption complete private property is ipso facto established. In the act of consumption a common enjoyment of property is an unthinkable condition. No one, as far as I am aware, has been bold enough to deny a man a right of exclusive use in his own dinner and in his own clothes. The contention of the Socialist is, however, that private property in capital is something different and for a variety of reasons a thing to be prohibited.

A man may exchange his wages for his day's dinner; may he, one is tempted to ask, exchange them for to-morrow's dinner? If so, at what point does it become wrong for him to exchange his wages for a promise of another man to pay the wherewithal to purchase dinners twenty years hence? Or again, it is permissible to purchase and use exclusively a suit of clothes. Is it permissible to buy a diving dress or a spade, to make or cause to be made a bit of labour-saving machinery or an irrigation work, and to retain the exclusive use and benefit of such action? If not, at what point between the suit of clothes and the erection of a factory does the illegality come in?

In truth there is no logical distinction to be drawn between the simpler and the more complicated forms of exchange. The Socialist, seeing what we all admit, that the beneficent action of Free Exchange is not perfected, rejects its assistance altogether, and seeks for some different, and, as he thinks, more equitable principle. He proposes, therefore, the socialization of capital. He ignores the socialization which is being brought about by the slow and certain organization of society on the absolutely democratic basis of Free Exchange.