in the higher branches of mercantile business.

It is essential to the theory that not only workmen but their children
should be confined to a producing group. The equalizing process may take
place even though men do not actually abandon one occupation and enter
another; for there exists, in the generation of young men not yet
committed to any occupation, a disposable fund of labor which will
gravitate naturally to the occupations that pay the largest wages. It is
not necessary that blacksmiths should ever become shoemakers, or vice
versa, but only that the children of both classes of artisans should be
free to enter the trade that is best rewarded.

Professor Cairnes does not claim that his classification is exhaustive,
nor that the demarcation is absolute:

No doubt the various ranks and classes fade into each other by
imperceptible gradations, and individuals from all classes are
constantly passing up or dropping down; but while this is so,
it is nevertheless true that the average workman, from whatever
rank he be taken, finds his power of competition limited for
practical purposes to a certain range of occupations, so that,
however high the rates of remuneration in those which lie
beyond may rise, he is excluded from sharing them. We are thus
compelled to recognize the existence of non-competing
industrial groups as a feature of our social economy.

It will be seen that the competition which is here under discussion is
of an extraordinary kind; and the fact that the general term is applied
to it without explanation is a proof of the vagueness of the conceptions
of competition with which acute writers have contented themselves.
Actual competition consists invariably in an effort to undersell a rival
producer. A carpenter competes with a carpenter because he creates a
similar utility and offers it in the market. In the theory of Professor
Cairnes the carpenter is the competitor of the blacksmith, because his
children may enter the blacksmith's calling. In the actual practice of
his own trade, the one artisan in no wise affects the other. It is
potential competition rather than actual that is here under discussion;
and even this depends for its effectiveness on the action of the rising
generation.

Modern methods of production have obliterated Professor Cairnes's
dividing lines. Potential competition extends to every part of the
industrial field in which men work i