with a new object will make certain of his first approximation,—will consider, for example, whether
an ellipse or a parabola fits better to the orbit of a new comet,—so it behaves us to consider whether
the classical hypothesis presupposed in the preceding pages—two-sided competition—is appropriate
to the conditions of modern industry. The hypothesis of two-sided monopoly99 is strongly suggested
by what we see before us,—consolidated capital confronted by consolidated trade unions. But it is
alleged that beneath that appearance the forces of competition are effectively at work; that the
settlement which is apt to be, and ought to be, agreed to between a combination of Capital and a
combination of Labour is no other than that which would have been determined by competition if
the individuals now combined had been free to act competitively. No one has expressed this view
with more authority and decision than Walker:—
“Competition, perfect competition, affords the ideal condition for the distribution of
wealth.”100
“Competition affords the only absolute security possible for the equitable and beneficial
distribution of the products of industry.”101
To the same effect, Professor Clark, when he teaches that—
“The question whether the labourer is exploited and robbed depends on the question whether
he gets his product.”102
What is meant by getting his product appears from the following passages:—
“What we are able to produce by means of labour is determined by what a final unit of mere
labour can add to the product that can be created without its aid.”103
“If each productive function is paid for according to the amount of its product [thus
reckoned], then each man gets what he himself produces.”
The ideal of just arbitration is that—
“Men should get something approximating the part of that joint product which they may
fairly regard as solely the fruit of their own labour.104 The basis of the claim that a workman makes
is that his presence in a mill causes a certain increase in the output of it.”105
If these views are generally accepted, the analysis of bargains in a regime of competition will
its importance. But it may well be doubted whether these views will be generally accepted, even by
the thoughtful few, much less by the more numerous of the concerned parties. First, it may be
objected that the same principle will give very different results according to the relative numbers of
the parties. Put a case which has actually existed, or at least may be well supposed to have existed,
in order to test the general application of the principle,—the case in which the number of the
99. The useful phrases of Dr. Bohm-Bawerk.
100. Political Economy, par. 466.
101. Ibid., par. 467. Cp. par. 343 et seq.
102. The Distribution of Wealth, chap. i.
103. Ibid., p. 180.
104. “Authoritative Arbitration,” Political Science Quarterly, December, 1892, p. 559.
105. Ibid., p. 559.