cate with some fullness of detail the nature of the modifications and additions that have been made.
On the "Wages Question," Mill's statement of the "Wages-Fund Theory" is supplemented by the results of the thinking started by Longe, Thornton, Walker, and Cairnes. The conclusion is still retained that the relation between numbers and that part of capital which is necessarily devoted to wages (although not absolutely fixed in amount) determines the average rate of wages, supposing that there is free competition among laborers. Then the adaptation of this theory to the facts of practical life, in which free competition does not exist between distinct occupations, is arrived at by introducing Mr. Cairnes's doctrine of non-competing groups in the discussion of the varying rates of wages in different employments. These additions are inserted so as to naturally supplement and closely connect with Mr. Mill's system, thus introducing the results of study in the generation since Mill wrote his two volumes. These parts are necessarily brief and condensed, but the reader is given references in foot-notes to the writers themselves, which he can consult as he goes on.
Mr. Mill included wages of superintendence under profits, and thereby gave some excuse for much of the wrong talk about a conflict of labor and capital. In this edition it is made apparent by Mill's own showing that wages of superintendence should be classed with other wages of labor, and so the high returns of managers are explained as arising from the same causes which influence the wages of other skilled laborers—the possession of a natural monopoly. This is only an extension of the doctrine of non-competing groups; and profit is then confined properly to interest for abstinence and insurance for risk.
Since Mr. Mill's day the modern form of socialism, whose essential doctrine is state help, has spread from France to Germany through the teachings of Marx and Lasalle, and pervaded our own country. A statement of their position is incorporated into the book, and Mr. Mill's later views on socialism, as expressed in his posthumous chapters (written in 1869), are printed in connection with his earlier views.
The chief weakness of Mr. Mill's book was undoubtedly his treatment of cost of production. The admirable study of Mr. Cairnes has cleared this ground, and the results of that work are given in this edition, so that the reader can get the right conception of this fundamental matter in connection with the remainder of the economic system. This in its turn then makes international trade, as expounded by Mr. Mill, more simple and more easily understood.
The whole lively discussion on bimetalism arose since Mill's day, although he touches somewhat on the double standard. His omission is filled by a considerable study on the experience of the United States since 1792. The history of that experience with gold and silver and the working of our legislation on this subject are stated and explained; and in the Appendix a bibliography of two pages for the subject in general is given.
Mr. Mill's book, of course, contained nothing treating of our own experiments in paper money, but much on English currency discussions. These latter have been omitted; and the experience of the province of Massachusetts, the issues of Continental currency, and the greenback issues from 1862 to resumption of specie payments in 1879, are considered with a view to the lessons that may be learned from this kind of currency.
International values presented unnecessary difficulties to the reader in the form it assumed under Mr. Mill's pen. This was largely omitted, and a very much simpler exposition given of the laws of reciprocal demand and supply, as a supplement to the previous exposition of value.
The connection of wages with prices and the doctrine of comparative cost as affecting foreign competition are added at some length in the chapter on foreign competition. The connection of wages with foreign competition had not risen in Mill's day to its present factitious importance in the vulgar mind.
Mr. Mill's (or rather Mrs. Mill's) chapter on the future of the laboring-classes was rambling and quite obsolete. An entirely new chapter was put in its place, pointing out the very considerable gain of the laboring-classes in wages during the last fifty years in England and America as disclosed
