and never fully analyzed; what was prominent in the thought of men in connection with it was the single element of struggle. Mere effort to survive, the Darwinian feature of the process, was all that, in some uses, the term competition was made to designate. Yet the competitive action of an organized society is systematic; each part of it is limited to a specific field, and tends, within these limits, to self-annihilation.

An effort to attain a conception of competition that should remove some of the confusion was made by Professor Cairnes. His system of "non-competing groups" is a feature of his value theory, which is a noteworthy contribution to economic thought. Mr. Mill had followed Ricardo in teaching that the natural price of commodities is governed by the cost of producing them. Professor Cairnes accepts this statement, but attaches to it a meaning altogether new. He says, in effect:

Commodities do indeed exchange according to their cost of production; but cost is something quite different from what currently passes by that name. That is merely the outlay incurred by the capitalistemployer, for raw materials, labor, etc. The real cost is the personal sacrifice made by the producing parties, workmen as well as employers. It is not a mercantile but a psychological phenomenon, a reaction upon the men themselves occasioned by the effort of the laborer and the abstinence of the capitalist. These personal sacrifices gauge the market value of commodities within the fields in which, in the terms of the theory, competition is free. The adjustment takes place through the spontaneous movement of capital and labor from employments that yield small returns to those that give larger ones. Capital migrates freely from place to place and from occupation to occupation. If one industry is abnormally profitable, capital seeks it, increases and cheapens its product, and reduces its profits to the prevailing level. Profits tend to a general uniformity.

Wages are said to tend to equality only within limits. The transfer of labor from one employment to another is checked by barriers.

What we find, in effect [continues Professor Cairnes], is not a whole population competing indiscriminately for all occupations, but a series of industrial layers, superimposed on one another, within each of which the various candidates for employment possess a real and effective power of

selection, while those occupying the several strata are, for all purposes of effective competition, practically isolated from each other. We may perhaps venture to arrange them in some such order as this: first, at the bottom of the scale there would be the large group of unskilled or nearly unskilled laborers, comprising agricultural laborers, laborers engaged in miscellaneous occupations in towns, or acting in attendance on skilled labor. Secondly, there would be the artisan group, comprising skilled laborers of the secondary order, - carpenters, joiners, smiths, masons, shoemakers, tailors, hatters, etc., etc., with whom might be included the very large class of small retail dealers, whose means and position place them within the reach of the same industrial opportunities as the class of artisans. The third layer would contain producers and dealers of a higher order, whose work would demand qualifications only obtainable by persons of substantial means and fair educational opportunities; for example, civil and mechanical engineers, chemists, opticians, watchmakers, and others of the same industrial grade, in which might also find a place the superior class of retail tradesmen ; while above these there would be a fourth, comprising persons still more favorably circumstanced, whose ampler means would give them a still wider choice. This last group would contain members of the learned professions, as well as persons engaged in the various careers of science and art, and in the higher branches of mercantile business.

It is essential to the theory that not only workmen but their children should be confined to a producing group. The equalizing process may take place even though men do not actually abandon one occupation and enter another; for there exists, in the generation of young men not yet committed to any occupation, a disposable fund of labor, which will gravitate naturally to the occupations that pay the largest wages. It is not necessary that blacksmiths should ever become shoemakers, or vice versa, but only that the children of both classes of artisans should be free to enter the trade that is best rewarded.

Professor Cairnes does not claim that his classification is exhaustive, nor that the demarcation is absolute :

No doubt the various ranks and classes fade into each other by imperceptible gradations, and individuals from all classes are constantly passing up or dropping down; but while this is so, it is nevertheless true that the average workman, from whatever rank he be taken, finds his power of competition limited for practical purposes to a certain range of

occupations, so that, however high the rates of remuneration in those which lie beyond may rise, he is excluded from sharing them. We are thus compelled to recognize the existence of non-competing industrial groups as a feature of our social economy.

It will be seen that the competition which is here under discussion is of an extraordinary kind; and the fact that the general term is applied to it without explanation is a proof of the vagueness of the conceptions of competition with which acute writers have contented themselves. Actual competition con> sists invariably in an effort to undersell a rival producer. A carpenter competes with a carpenter because he creates a similar utility, and offers it in the market. In the theory of Professor Cairnes the carpenter is the competitor of the blacksmith, because his children may enter the blacksmith's calling. In the actual practice of his own trade, the one artisan in nowise affects the other. It is potential competition rather than actual that is here under discussion; and even this depends for its effectiveness on the action of the rising generation.

Cost, in the sense of personal sacrifice, governing prices within the fields in which potential competition exists, is the summary of this noteworthy theory. The criticism to be made upon it is that the application of its more fundamental principle, that which connects the prices of commodities with the sacrifices involved in producing them, is, in modern industry, far wider than the author of the theory supposed, and wider than it was, in fact, in European countries at the time when he published his work. The limitations which he imposed on the action of this principle are no longer necessary, and the fourfold grouping of laborers according to their personal qualities no longer corresponds with anything in actual life.

Modern methods of production have obliterated Professor Cairnes' dividing lines. Potential competition extends to every part of the industrial field in which men work in organized companies. Throwing out of account the professions, a few trades of the highest sort, and the class of labor which is performed by employers themselves and their salaried assistants, it is practically true that labor is in a universal ebb and flow; it

passes freely to occupations which are, for the time being, highly paid, and reduces their rewards to the general level.

This objection to the proposed grouping is not theoretical. The question is one of fact; it is the development of actual industry that has invalidated the theory which, ten years ago, expressed an important truth concerning economic relations in England. Moreover, the author of the theory anticipated one change which would somewhat lessen its applicability to future conditions. He recorded his belief that education would prove a leveller, and that it would merge to some extent the strata of industrial society. The children of hod-carriers might become machinists, accountants, or lawyers when they could acquire the needed education. He admitted also that new countries afford conditions in which the lines of demarcation are faint. He was not in a position to appreciate the chief levelling agency, namely, the machine method of production as now extended and perfected. Education makes the laborer capable of things relatively difficult, and machines render the processes which he needs to master relatively easy. The so-called unskilled workmen stand on a higher personal level than those of former times; and the new methods of manufacturing are reducing class after class to that level. Mechanical labor is resolving itself into processes so simple that any one may learn them. An old-time shoemaker could not become a watchmaker, and even his children would have found difficulties in their way had they attempted to master the higher trade; but a laster in a Lynn shoe factory can, if he will, learn one of the minute trades that are involved in the making of a Waltham watch. His children may do so without difficulty; and this is all that is necessary for maintaining the normal balance between the trades.

The largest surviving differences between workmen are moral. Bodily strength still counts for something, and mental strength for more; but the consideration which chiefly determines the value of a workman to the employer who entrusts to him costly materials and a delicate machine is the question of fidelity. Character is not monopolized by any social class; it

is of universal growth, and tends, by the prominent part which it plays in modern industry, to reduce to their lowest terms the class differences of the former era.

The rewards of professional life are gauged primarily by character and native endowment, and are, to this extent, open to the children of workmen. New barriers, however, arise here in the ampler education which, as time advances, is demanded of persons in these pursuits; and these barriers give to a part of the fourth and highest class in the scheme that we are criticising a permanent basis of existence. Another variety of labor retains a pre-eminence based on native adaptations and special opportunities. It is the work of the employer himself. It is an organizing and directing function, and in large industries is performed only in part by the owners. A portion of this work is committed to hired assistants. Strictly speaking, the entrepreneur, or employer, of a great establishment is not one man, but many, who work in a collective capacity, and who receive a reward that, taken in the aggregate, constitutes the "wages of superintendence." To some members of this administrative body the returns come in the form of salaries, while to others they come partly in the form of dividends; but if we regard their work in its entirety, and consider their wages in a single sum, we must class it with entrepreneur's profits rather than with ordinary wages. It is a different part of the product from the sum distributed among day-laborers; and this fact separates the administrative group from the class considered in our present inquiry. Positions of the higher sort are usually gained either through the possession of capital, or through relations to persons who possess it. Though clerkships of the lower grade demand no attainments which the children of workmen cannot gain, and though promotion to the higher grades is still open, the tendency of the time is to make the transition from the ranks of labor to those of administration more and more difficult. The true laboring class is merging its subdivisions, while it is separating more sharply from the class whose interests, in test questions, place them on the side of capital.