which the advocates of trade unionism have with too much truth directed against “the verdict of the
economists” respecting trade unions.117 Let us not be as trenchant in act as we have been in thought.
Let us be cautious in applying our abstract theory to flesh and blood.
To one seeking a representation at once clear and appropriate, the actual conditions of
industry present the appearance of a viscous and deliquescent body,118 not so easy to be treated by
simple formulae as a perfect liquid or a perfect solid. An adequate theory of Distribution must in
these days take some account of the action proper to combinations, effecting collective treaties
between employers and employed: competition pure and simple no longer constitutes an adequate
hypothesis. Exactly how these twos principles are to be conceived as coexistent it is premature to
state dogmatically: the economist whose aim is to “teach, not preach,” to show what is or will be
rather than what ought to be, may well hesitate to pronounce on this question. He can at best invent
hypotheses which may facilitate the conception of a compromise between the opposed principles of
competition and combination. For example, the required compromise might be attained if it were
arranged that the agreement between employers and employed under some heads might be settled
by collective treaty between combinations, but under other heads by competitive bargaining between
individuals,—as the German students in their duels expose only certain parts, not all parts, of the
body to the brunt of the combat.119 To determine what matters should be the subject of treaty would
indeed itself require some sort of treaty.120 But it would be a kind of treaty for which there is good
precedent in laws and institutions. For instance, there might grow up, or be enacted by law, the
practice that the hours of labour in a trade should be a matter for collective treaty between a trade
union and a combination of employers, the particular number of hours to be settled by such treaty,
while other terms, such as the rate of wages, should be settled by the play of competition.
So far as competition has free play, the received theory of supply and demand, even in its
severest mathematical form, would be applicable. Indeed, severer forms would be peculiarly
appropriate in that they do not lend themselves to the contemplation of cornering and other dodges
of the market, but assume the “true price”121 to be worked out honestly. Presumably, the competition
which all parties agreed to retain would have to be conducted in a similar spirit. The conditions of
the duel, already prescribed, would be further limited by forbidding certain strokes.
A similar regulation may be suggested for the working of an imaginary sort of competition
which seems to be contemplated by some who are conversant with the practical problems of
117. Sidney and Beatrice Webb, Industrial Democracy, Part III. chap. i.
118. Cp. J. B. Clark, Philosophy of Wealth : “The present state of industrial society is transitional and
chaotic.... The consolidation of labour is incomplete,” that of capital also (p. 148 and context).
119. Cp. J. B. Clark, op. cit., p. 208: “A spirit of Justice is ever standing over the contestants, and
bidding them compete only thus and thus.”
120. “No individual competitor can lay down the rules of combat.” Sidney Webb, Contemporary
Review (1889), p. 869.
121. Condillac's phrase, appropriate to the ideal market above described.