is to demand higher wages for the services it renders in production, but this was never anticipated, nor is it provided for in the theoretical conceptions of the school of Laissez-faire. Yet we now know that high wages has a reflex, and favourable action upon production. It stimulates consumption and reconsumption. But experience only has taught us this great truth; it was never possible for the school to give it a moment's consideration. If it had done so it would have wrecked the whole system of Laissezfaire; inasmuch as the foundation of their system is cheap labour. Laissez-faire is a science of wealth-man and his necessities are not considered. Man, as Reed bluntly puts it, is regarded as being "merely a fraction of a horse-power."

The demand by labour for an adequate means of subsistence is, after all is said, a natural tendency, and every tendency is natural; but our business is to choose the moral ones from the immoral. As Smith says, humanity does not desire to be great but to be beloved and respected. But these virtues are not to be found in the doctrines of Laissez-faire. Humanity is not supposed to expect anything more than the effect which the cause ought to produce, no matter how harmful the effect may be to its own material interests. It must consent to be bound hand and foot to the theoretical result. If the school deny this

argument they repudiate their system; it falls to the ground.

A striking example of what I mean by the development of a natural tendency is, for instance, the growing desire by the Dominions and Colonies for the formation of a British Imperial Customs Union. The growth of this sound natural sentiment, let it be said, is based on sound technical considerations. The true ideal has discovered itself, being the product of the effect of things, wholly unconnected with theory. Men, like nations, soon discover what is best for their own material interests, happiness and prosperity, and are not easily diverted from the true ideal they see in life. It cannot be said that British policy has been instrumental in creating the conception for closer unity in matters of a military, moral and economic nature between the Dominions, Colonies and United Kingdom. On the contrary, British statesmen have on more than one occasion "banged, bolted and barred" the door to the idea. But truth will ever assert itself and theory will, sooner or later, have to be discarded. In other words, an unsound system invariably has to give way to a natural growth of things.

Nothing can be determined, or ought to be determined, until we are in possession of all the facts, until we know the effect of things.

And no man is capable of formulating a policy, or, of adjudicating correctly, until he is in possession of this knowledge. But on the other hand there can be no greater wisdom than that which endeavours intelligently to anticipate events in the light of experience, so as to time well, as Bacon would say, all necessary changes and so avoid all revolutionary ferment against ordered Government. As I have more than once stated, a crisis will always occur at unexpected moments. But it will only arise when an adjustment, long overdue, is necessary to regularise an inequality. If, therefore, we concentrate our minds on these essential facts, the probability is that no crises will occur. This philosophy of life is intended not only for men of business, but for the leaders of organised labour as well. It should be a guide to the many problems they will have to consider together, for their mutual advantage, relating to, and arising out of, the long economic struggle that lies ahead.

If further support be required to maintain my contention that the method of reasoning à posteriori is by far the sounder in dealing with the problems of life, let us turn to other great departments of thought. If we turn to poetry, we find Goethe exclaiming thus :

"He only gains his freedom and existence
Who daily conquers them anew."

We are here taught that man must decide his destiny from his immediate experience of things; that each day brings forth its own problems which must be conquered anew if man is to gain or keep his freedom and existence. Goethe further teaches us, if we read him aright, that man cannot shape his life by theory constructed à priori. He must guide his life by the effect of things; and not from a cause to a probable effect. In vulgar parlance man is taught to grasp the substance and not to chase the shadow.

If we turn to politics we find that Lord Grey of Falloden in the last paragraph of his pamphlet on The League of Nations provides another rule of life as follows:

“Learn by experience or suffer is the rule of life. We have all of us seen individuals becoming more and more a misery to themselves and others, because they cannot understand or will not accept this rule. Is it not applicable to nations as well? And if so, have not nations come to great crises in which for them the rule 'Learn or perish' will prove inexorable?"

It is sincerely to be hoped that Lord Grey will have the wisdom to apply this admirable rule of life economically as well as politically. Lord Grey is a free trader, but the maxim he gives us is really the basic principle of National Economics. In so far as he is concerned, the future, at any

rate, seems to be encouraging, and it is earnestly to be hoped that others will follow his rule of life, which, by the way, is not original; but it is significant considering the source from which it

emanates.

Mr. H. A. L. Fisher, the Minister of Education, is to be congratulated on the able manner in which he secured the passage of his Education Bill through the House of Commons, and the country is to be congratulated on having obtained it. In the future the development of Industry, Commerce and Banking will depend more than ever upon brain power. And if we are to have a rich fertile field in this respect, the advancement of primary and secondary education which the Education Bill provides is most essential, and the sooner it is made completely effective the better will it be for all concerned. Advanced education is of as much importance to the country as the building of railways, steamships and battleships, and, as Sir Norman Lockyer has said, "it is on this ground that our university conditions become of the highest national concern, and all the more because our industries are not alone in question." I am thinking more of the future relations of Capital, Management and Labour, which should be made more harmonious by the greater dissemination of knowledge. In this connection I recall to mind the great principle