Whiletheserequirementscorrespondingtothestandardoflivingremainconstant，wagescannotlongfallbeloworremainabovethecorrespondingstandard。Theimprovement，indeed，ofevenasmallportionwouldbe’whollyamatterofsatisfaction’
ifnogeneralimprovementcouldbeexpected。Butassuchimprovementisnowbecomingpossible，itistobehopedthatthebetterartisanswillseekadvantageincommonwith，or’nottotheexclusionof，theirfellowlabourers。’Thetrades-unionmovement，therefore，istakentobeequivalenttotheformationoflittlemonopoliesthroughwhichparticularclassesoflabourersbenefitattheexpenseofothers。YetMillisevidentlyanxioustomakewhatconcessionshecan。Strikes，hethinks，havebeenthe’bestteachersofthelabouringclasses’astothe’relationbetweenlabourandthedemandandsupplyoflabour。’
Theyshouldnotbecondemnedabsolutely——onlywhentheyaremeanttoraisewagesabovethe’demandandsupply’limit；and，eventhen，heremembersthat’demandandsupply’arenot’physicalagencies’；thatcombinationsarerequiredtohelppoorlabourerstogettheirrightsthe’demandandsupply’ratefromrichemployers；and，thattrades-unionstendtoadvancethetimewhenlabourerswillregularly’participateintheprofitsderivedfromtheirlabour。’Finally，itisdesirable，ashecharacteristicallyadds，that’alleconomicalexperiments，voluntarilyundertaken，shouldhavethefullestlicence。’
Mill，unlikehisrigidpredecessors，isanxioustomakeoutasgoodacaseashecanfortrades-unions。Hissympathiesarewiththem，ifonlythelogiccanbecoaxedintoapproval。Toelevatethelabouringclassistheoneworthyobjectofpoliticalaction。Yetheishamperedbytheinheritedscheme。Howevermodified，italwaysinvolvestheassumptionofafixedsumtobedistributedby’supplyanddemand。’Limitthesupplyoflabour，andyouraisetheprice。Nootherplanwillreallygotothebottomoftheproblem。Therateofwagesisfixedby’supplyanddemand’；andthephraseseemedtoimplythattherateofwageswasfixedbyabargain，likethepriceofcornorclothatagiventimeandplace。Error，asMilltrulyobserves，114*isoftencausedbynot’lookingdirectlyattherealitiesofphenomena，butattendingonlytotheoutwardmechanismofbuyingandselling。’Arewelookingdirectlyatrealitieswhenwetakeforgrantedthat’labour’isboughtandsoldlikecornandcotton？Arewenotcominginsightofmorefundamentalchanges，questionsofthestructureaswellasthefunctionsofindustrialorganism，whichcannotbesosummarilysettled？Thorntonarguesasthoughworkmensecreted’labour’asbeessecretehoney，andthevalueoftheproductwerefixedbytheproportionbetweenthequantityinthemarketandthequantitywhichpurchasersarepreparedtotakeattheprice。Heonlytriestoshowthatthepricemaystillbeindeterminate。The’equation’betweensupplyanddemandofwhichMillhadspokenmightbebroughtaboutatvaryingratesofexchange。Thewholesupplymightconceivablybetakenoffeitheratahighoratalowprice。Weneednotgobehindtheimmediatemotiveswhichgovernasetofbuyersmeetingasetofsellersatanauction。Millacceptsthesameassumptions。Itisquitetrue，hesays，thatinthecaseofwagesvariousratesmaysatisfythe’equation。’Thewholelabouringpopulationmaybeforcedtoputupwithstarvationallowanceormaybeabletoextortenoughtoraisetheirstandardoflife。
This，hesays，upsetsthe’wage-fund’doctrine，hithertotaughtbynearlyalleconomists’includingmyself。’115*Moreover，theemployerhastheadvantageinthe’higgling，’owingtowhatAdamSmithhadalreadycalled’thetacitcombinationofemployers。’116*Thisdepressinginfluencecanberesistedbyacombinationoftheemployed；andthereforethedoctrinewhichdeclaredthenecessaryincapacityoftrades-unionstoraisewagesmustbethrownaside。
Millhasreceived，andfullydeserves，highpraiseforhiscandourinthisrecantation。Wemust，however，regretthefacilitywithwhichheabandonedadisagreeabledoctrinewithoutsufficientlyconsideringtheeffectsofhisadmissionuponhiswholescheme。117*Towhat，infact，doestheargumentamounttowhichhethusyielded？Hesaysthatthecapitaliststartswiththe’wholeofhisaccumulatedmeans，allofwhichispotentiallycapital。’Outofthishepaysbothhislabourersandhisfamilyexpenses。No’lawofnature’makesitimpossibleforhimtogivetothelabourerall’beyondthenecessariesoflife’，whichhehadpreviouslyspentuponhimself。Theonlylimittopossibleexpenditureonwagesisthathemustnotberuinedordrivenoutofbusiness。118*
Thissurelyisobvious。NolawofnatureorofmanforbidsmefromgivingallthatIhavetomylabourers，thoughIcannotgivemorethanIhave。IfIhaveabalanceatmybankers，Imaypaymywage-billbyachequeforanysmallersum，andliveonthedifference。Difficultiesatoncearisewhenwelookatthe’realities’ofthephenomenaandturnfrom’moneywages’to’realwages。’Itiseasyforanindividualtogivewhathepleases，butnotsoeasytomakesuchachangeinthewholeconcreteindustrialmachineryastoapplyitalltotheproductionoflabourers’commodities。What，inanycase，waspreciselytheeconomicaldogmainconsistentwithMill’sstatement？Accordingtohim，itwasthedoctrinethat，atanygiventime，thereisacertainfundinexistencewhichis’unconditionallydevoted’tothepaymentofwages。Thiswastakento’beatanygivenmomentapredeterminedamount。’119*Buthowwasitsupposedtobepredetermined？Alleventsarepredeterminedbytheircauses，andtotreatpoliticaleconomyasapossiblescienceistoassumethatwages，amongotherthings，aresomehowdeterminate。Millmeansapparentlytodenyadeterminationbysomethinginthenatureofthecapitalitself。Thecapitalmightmeansomethingwhichcouldnot，evenifeverybodywishedit，beappliedinanyotherway。Thecirculatingmightbeartothefixedcapitalthesamerelationaswool，forexample，tomutton。Saveatall，andacertainpartofyoursavingswillbewages，asacertainpartofthesheepwillbewool。Unlessyouwasteit，youwillemployitontheonlypurposeforwhichitisadapted。
Sucha’predetermination’isofcourseafiction。Wasitevertakenforafact？120*Itwasrather，Ibelieve，anassumptionwhichhasslippedintotheirreasoningunawares。Startingfromtheoldpropositionthat’industryislimitedbycapital，’andremarkingthatsomecapitaldidnotgodirectlytowages，theysimplyamendedthepropositionbysayingthatwagesdependedon’circulating’capital，andthoughtthatthecorrectedformulawoulddoaswellastheold。Perhapstheyassumedroughlythat’circulating’mustbearafixedproportiontocapitalingeneral；
orthat，atanyrate，theproportionwassomehowdeterminedbygeneralcauses。Thedoctrinethusunderstoodtendstobecomeamerelyidenticalproposition：the’wage-fund’meanssimplythewages，andtherateofwagesisgivenbythetotalpaiddividedbythenumberofreceivers。Theeconomistscontinuedtolecturethelabourersuponthefutilityoftheiraimswiththeairsofprofessorsexplodingtheabsurdityofschemesforperpetualmotion。Itmust，however，beobservedthatneitherMillnorhisdisciplesheldthattherateofwageswasunalterable。Theyhadthestrongestbeliefthatitcouldberaised，andraisedthroughtheagencyoftrades-unions。Mill’sdisciple，Fawcett，asProfessorTaussigremarks，121*laysdowntheoldwage-fundformula，andyetproceedstoargueaboutstrikesraisingwageswithoutreferencetothissupposedimpossibility。Inanearlyarticle，122*highlypraisedbyMill，Fawcettdiscussedstrikes。
Heappealstothewage-funddoctrinethroughout，andyetheapprovesoftrades-unions，andonlyexhortsmentostrikewhentradeisimproving，insteadofstrikingwhenitisfallingoff。
Itdoesnotforamomentoccurtohimthat’supplyanddemand’orthewage-fundtheorydetermineeveryparticularcase。Undoubtedlymen，bycombiningandtakingadvantageofthe’conjuncture’，maygetthebestofabargain。Fawcettholds，indeed，thattheimmediateadvantagewillbetemporaryorlimitedtoonetrade。
Stillcombinationwill，forthetime，enablethementogetanearliershareoftheimprovedprofits。Then，heargues，anditisofthisthatMillapproves，thatsuchasystem，byinterestingthemeninbusinessandlettingthemperceivetheconditionsofsuccess，willleadtotheconsummationmostardentlydesiredbyMillandhimself；toaperceptionofanultimateidentityofinterestsandafinalacceptanceofsomesystemofco-operation。
Thus，bylisteningtoMalthusandraisingthestandardoflife，theartisanwillhimselfbecomeacapitalistorasharerinprofits。
Thewage-funddoctrine，sounderstood，includedareferencenottotheimmediatebargainalonebuttoamoreremoteseriesofconsequences。The’predetermination’referstothewholesetofindustrialforceswhichworkgraduallyandtentatively。Theablestdefenderofthewage-fund，understoodinthissense，wasJ。E。Cairnes1823-1875，123*who，likeThornton，wasapersonalfriendofMill；and，thoughanacuteandindependentthinker，wasanadmiringdisciple。HemetMill’srecantationbyapplyingMill’searlierfaith。Hedoesnotbelieveinthat’economicwill-o’-the-wisp，’124*asThorntoncallsit，thewage-fund，whichsupposesthatinthebargainbetweenmenandmastersthereisa’predetermined’amountwhichmustbespentinwages。Itisonlypredetermined，hesays，insofarasallmenactfromcertainmotiveswhich，undergivencircumstances，mustbringaboutcertainresults。Thornton，hesays，hastalkedasif’supplyanddemand’meantapowerwhichforcedmentoactinacertainway，insteadofbeingmerelyageneralphraseindicatingthenormaloperationofthesemotives。Todeterminethegeneralrateofwageswehavetolookatthewholemechanism，notatthespecialbargain。ToexplainthatactionCairnesstartsagainfromtheRicardianscheme。Ontheonehandwehave，ofcourse，Malthus；andontheother，therelationbetweenwagesandprofits，theeffectivedesireofaccumulation，thenecessityofresortingtoinferiorsoils，withtheconsequent’tendencyofprofitstoaminimum’fortheproofofwhichhereferstoMillhimself，andtheacceptedstatementthatprofitsarealreadywithinahand’s-breadthoftheminimum。125*Cairnesmodifiestheschemeinvariousways，uponwhichIneednotdwell：asbyadmitting，non-competingindustrialgroups，’andarguingthattheamountofthefixedandcirculatingcapitalismoreorlessdeterminedbythedirectionofthenationalindustries。Suchconditions，heargues，determinethepermanentrateofgages，thoughforatimeoscillationswithincomparativelynarrowlimitsmayofcoursetakeplace。Mill，inhisunregeneratedays，hadargued，aswehaveseen，thatthewhole’wage-fund’mustbedistributed，withoutgivinganyprecisereasonforthenecessity。
Henowheld，withThornton，thata’conspiracyofemployers，mightretainanypartofit。Cairnesholdsthisconspiracytobeafiction。Itisnot，asisoftensaid，aquestionofrichmenbargainingwithpoormen，butofrichmencompetingwitheachother。Thecompetitionofcapitalists，asheholds，willalwaystakeplace，notfromanymysteriouscharacteristicof’circulatingcapital，’butbecause，asthingsare，theyarealwaysonthelook-outforprofitableemploymentoftheircapital。Thatprocesskeepswagesupasthecompetitionoflabourerskeepsthemdown，and，thoughitmayactslowly，willinevitablykeepwagesapproximatingtoanaverage。126*
InthisviewCairnestakeshimselftobeonlyexpandingthedoctrinewhichpervadesMill’swholetreatise：inspiteoftheoccasionalobiterdictaaboutthewage-fund。Hedoesnotabandon——hedeclaresthatnobodyeverheld——the’will-o’-the-wisp，——
theabsolutepredetermination。127*Certainlyadoctrinewhichstrucksothoroughastudentasoneofwhichhehadneverevenheard，andwhichappearedtohimtobepalpablyabsurd，couldhardlyhavehadtheprominenceusuallyassignedtoit。Whenithasdisappeared，therealpointatissueischanged。CairnesmaintainsthatThornton，thoughdenouncingtheshamdoctrine，stillvirtuallyholdstheolddoctrine。Thorntonsaid128*that’unionismcouldnotkeepuptherateofwagesinonetradewithoutkeepingitdowninothers。’Andthis，asCairnessays，impliessomesortof’predetermination，’thoughnottheabsolutepredeterminationoftheabandonedwage-fund。ThemaindifferenceisthatCairnesholdsthatcapitalistswillalwayscompete；