of our country. From sheer inertia and cowardice we are impatient of the slightest questioning of that belief, because we cannot bear to set ourselves face to face with the possibility of a great change. But not merely this. The professed leaders of economic thought amongst us have contributed to this stupid unintellectual attitude on the part of the ordinary layman by their own unintellectual attitude. There is not a single economist of note in this country who has ever set himself down to study with patience and impartiality and humility the history of the trade policy of our country with the object of arriving at an independent opinion on this vital question. The English economist of to-day is still repeating the opinions advanced by Adam Smith on the mercantilist system, and his condemnation of bounties, and what not. As if, forsooth, our economic history began with the eighteenth century. And if these so-called leaders of economic thought condescend to argue the question of Free Trade at all it is in a high and abstract a priori way. They posit their axioms, and set out their postulates, and propound their theory of international trade, and so proceed easily and majestically to their conclusion. If they make any reference to history at all—that divine touchstone of the truth of all theory-it is only to the experience of England in the last half-century; and that is done in so uncritical a way that the reference is worse than misleading. Now, this is not the way in which our economic history ought to be handled. Nor is this the way in which a vitally important question such as that of Free Trade ought to be threshed out. Whilst we are lulling ourselves to sleep under such impotent chop-logic abstractions other nations are passing us in the race of efficiency. Why? Let the theorist answer if he can. But indeed we may be sure that he cannot. Not merely, however, does the method of the professed economist of to-day fail to throw light upon the actual economic system of to-day, it also precludes any possibility of true perception as to the near future. As an empire we are on the threshold of the greatest change which our history has ever known. If England is to become the heart of a federated Empire, it will be absolutely essential as a condition precedent that we here in England should be free to consider with unfettered eye and mind our economic system. A federated Empire without a federated trade system is a simple impossibility. We must be free to make up our minds on the subject, to take our economic system into calm and unprejudiced debate, and to mould it to the needs of the Empire as a whole. If not, we might as well drop once and for ever any idea of imperial federation. If our politicians were honest they would tell us so. Now, as a contribution to such debate I have written this final chapter, and I maintain that it is the only possible way by which we can gain a real insight into the problem. How was it that the Dutch rose to the commercial supremacy of the world in the seventeenth century? How was it that, although a Free-Trade nation, they lost that supremacy in the eighteenth century? How was it that Great Britain, herself a strongly protectionist nation, wrested the commercial supremacy from the Dutch? And how is it that now, in the time of our greatest vigour and growth, that supremacy is passing from us to a nation which is in its turn as strongly protectionist as England was in the eighteenth century? There is no room here for chop-logic. Nothing but plain, ungarnished, uncoloured statement of fact will suffice; and if we can attain that, we can safely leave the theorists to spin their theories and admire themselves. I cannot hope to have given a full and decisive answer to this question. It is the most serious one at present before my country, and the man would be presumption incarnate who should expect to settle it offhand with a single pot of ink. All that I can do I have honestly sought to do-viz. to assist my countrymen to a true appreciation of the situation of the problem historically. It is of very little use to keep re-stating the merely theoretical arguments for and against Free Trade. It would be of still less use to spend my pages in depicting the actual commercial situation of the moment. The daily press does that for us sufficiently well, and, indeed, it is a matter of common knowledge. I have rather chosen to trace out the lines of development in the past in different commercial countries with the object of arriving at a comparative estimate as to the efficiency of their commercial policies. I feel convinced that such a method is more valuable for my purpose than a merely statistical statement, and far more valuable again than any merely deductive argument on the principles of Free Trade. CHAPTER I THE WAGE-FUND THEORY AND THE ENGLISH TRADES UNIONS Origin of the Theory-The Theory in the Hands of the Trades Unions-Criticism and Rejection of the Theory -Real Source of Wages - The Economy of High Wages - The Mistake of the Trades Unions - The British Workman's True Policy THE wage-fund theory has played a large part in English economics. Stated nakedly this theory asserts (1) That industry is limited by Capital. (3) That wages therefore depend on the pro- |