In the first place,the 'wage-fund'is Mill's equivalent for Adam Smith's 'fund which is destined for the maintenance of servants';(100)and Mill,again,starts from a proposition inherited from Smith.'Industry,'he says,'is limited by capital'--a doctrine,as he adds,perfectly obvious though constantly neglected.(101)Undoubtedly an industrial army requires its commissariat:its food,clothes,and weapons.Its very existence presupposes an accumulation of such supplies in order to the discharge of its functions.A more doubtful assumption is stated by Adam Smith.'The demand,'he says,(102)'for those who live by wages naturally increases with the increase of national wealth,and cannot possibly increase without it.'The growth of the national wealth,that is,'naturally'involves the growth of the wealth of every class.Machinery increases the efficiency of labour and therefore increases the power at least of supporting labourers.Moreover,in the long run,and generally at the moment,this power will certainly be exercised.(103)The interests of the capitalist will lead him to support more labourers.The identity of interest between the classes concerned might thus be taken for granted.Hence,we may trust to the spontaneous or 'natural'order of things to bring to all classes the benefit of improved industrial methods.This natural order,again,including the rate of wages,is understood to imply,at least,the absence of state interference.Political rulers must not tamper with the industrial mechanism.It will spontaneously work out the prosperity of the whole nation and of each class.Left to itself the industrial organism generates those economic harmonies upon which the optimist delighted to dwell.'Natural'seems to take the sense of 'providential.'The 'economic harmonies'are,like the harmonies perceived by Paley or the Bridgewater Treatise writers in external nature,so many proofs of the divine benevolence;any attempt to interfere with them could only lead to disaster.To show in detail the mischiefs involved,to expose the charlatans whose schemes implied such interference,was the grand aim of most economists.Mill,as we shall see,was very far from accepting this view without qualification.He thought with the Utilitarians generally that the 'sovereign'had enormous powers,and moreover was bound to apply them for the redress of social evils.Society,he held,was full of injustice.Laws aggravated many evils and could suppress others.Still the normal function of government is to prevent violence,see fair play,and enforce voluntary contracts.When it exceeds these functions,and tries by sheer force to obtain results without considering the means,it may do infinite mischief.It acts like an ignorant mechanic,who violently moves the hands of the clock without regard to the mechanism.Erroneous conceptions of the very nature of the machinery had led to the pestilent fallacies which Smith and his successors had been labouring to confute.The free-traders(104)had often to expose one sophistry which deluded the vulgar.Its essence is,as Mill puts it,that we attend to one half of the phenomenon and overlook the other.(105)The protectionist thinks of the producer and forgets the consumer.Half the popular fallacies imply the failure to take into account all the actions and reactions which are implied by a given change.The processes by which industry adapts itself to varying conditions --compensating for an ebb in one quarter by a flow in another --is mistaken for a change in the whole volume.From the neglect to trace out the more remote,though necessary consequences,all manner of absurd doctrines had arisen.The doctrine of 'gluts'and 'over-production'confounded the case of a production of the wrong things with an excess of production in general.Improved machinery was supposed not merely to displace one class of labourers for a time,but to supersede 'labour'in general.We should forbid the substitution of power-looms and steam-ploughs for hand-weaving and spades,or try to increase wealth by depriving workmen of their tools.A strange confusion of ideas is involved.People,said Whately,(106)ask for 'work'when what they want is really 'wages.'They assume that because more labour is required,more wages will be forthcoming.The fire of London,as Mandeville observed,was an excellent thing for the builders.
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