our evening journals, viz: "It is absolutely essential that Labour and Capital should work together." In a strict sense this is an impossible conception, for capital cannot in any conceivable circumstance work together with Labour, for the reason that the various forms of capital as defined hereafter, are merely agents of production. What this gentleman really meant to say was, " It is absolutely essential that Labour and Management should work together." There is a distinct difference.

The value of Labour, as we have more than once stated, is not determined by the wages which each individual workman receives, but by the efficiency of the services which he renders in return for wages received. In other words, the worker who employs nothing but his muscular strength, ordinary intelligence, energy and crude implements in production is of little value as a wealth producer. But the worker who applies systematic research, experience and knowledge, intelligence and judgment, as well as muscular strength and energy in production, is of great value as a wealth producer, and should be remunerated accordingly; and in the present discussion, this distinction should be carefully noted.

It follows, therefore, that personal ability, experience and knowledge, whether possessed by

the manager or the worker, may logically be termed Personal Capital; and that, in consequence, the greatest freedom should be accorded to all such individuals to develop their natural attributes to the utmost possible extent. Crude Labour, as described in the former case, may be classified as Labour Power, but, as outlined in the latter case, it may be termed Productive Labour Power.

Whilst it is necessary to draw this distinction between Labour Power and Productive Labour Power in the present discussion, it should not be assumed that crude Labour is of no value as a wealth producer as compared with skilled Labour. On the contrary it assists considerably to that end. Up to a point we cannot draw any distinction, but as economic science is designed for the advancement of human welfare, at any rate it ought to be so, we cannot exclude considerations of morality and humanity. We have to begin from the starting-point that every man must earn sufficient in wages to purchase the means of subsistence for himself, his wife and family; and clearly the only solution to this problem is to concede to all men, as a national obligation of right, irrespective of the employment they may be engaged in, the principle of a minimum wage. But having justly conceded the principle of equal opportunity in this respect, productive

Labour Power should be given free scope for the display of talent and enterprise beyond this limit. If we were ever to admit the doctrine that crude Labour was of equal service in wealth production as skilled Labour, we should also have to agree that the wealthiest producers in the world ought to be the primitive races.

If, therefore, the productive power of the worker is his personal capital, may we not logically all be called "Capitalists"? If A only possesses money, it is of no value to him without the services of B, the producing agent: and, similarly, the producing agent cannot avail of his opportunities in production and commerce without the aid of money. Therefore the distribution of the wealth produced from the co-operation of these two forces ought to be in proportion to the influence which each agent may have had in producing the total result.

The most effective medium available for the distribution of wealth produced is that of wages; but the proportion to be so distributed should be decided by a mutual reciprocal agreement between Management and Labour. In the case of business management there are other factors to be considered, viz. provision has to be made for the payment of interest on the money employed in the conduct of the business, and other credit facilities extended to it, without

D

which, labour and business management could not survive, or, at any rate, find profitable employment.

Therefore it can be seen that the measure of success of business management is largely determined by the skill with which it applies its collective experience, knowledge and intelligence, in the development of its opportunities and responsibilities, which must, naturally, be very much greater than those of the individual worker. The wealth of a nation may therefore be defined as follows:

1. Personal Capital; i.e. the productive power

of the individual.

2. Fixed Capital; i.e. property, machinery, natural materials, manufactured articles of utility, and commodities; or the securities which represent them.

3. Liquid Capital; i.e. money and credit.

Capital, in its comprehensive sense, is used for the purpose of producing wealth, from which further liquid or fixed capital is created, and all that is wasted or destroyed is replenished; and when we discuss the distribution of wealth through the medium of wages, we do not mean the distribution of existing liquid and fixed Capital which is essential to production, but the

new wealth created daily by Management and Labour.

The origin of strikes is due in many cases to the employers of Labour, or their representatives, expressly excluding all moral considerations in their dealings with the men ; or to external

considerations over which either side have no control; or to the objections by the workmen themselves as to the wages paid for services rendered, or the hours worked per day; but, in all such controversy, in no instance can Capital be held to blame, for, in reality, it is a non-combative force.

Money is used in the conduct of a business, and its successful control or employment entirely depends on the wisdom and discretion exercised by the business management. The currency or the cheque are merely the instruments that are used to give effect to all transactions, whether in the buying or selling of goods, or in the payment of wages; but it is entirely wrong to convert them into a force called " Capital " and represent them, by the use of careless phraseology, as the ostensible enemy of Labour. The general position occupied by Money in the controversies that arise between Labour and business management has no relevancy whatever to the points at issue beyond being the instrument which gives legal effect to such