d be inadequate 'sociologically,' or as
a formula which would enable us to predict the future distribution of
wealth. It omits essential factors in the process, and therefore
supposes forces to act automatically and invariably which will in fact
be profoundly modified in societies differently organised and
composed of individuals differing in character. The very fundamental
assumptions as to the elasticity of population, and the accumulation
of capital as wages and profits fluctuate, are clearly not absolute
truths. An increase of the capitalist's share, for example, at the
expense of wages, may lead to the lowered efficiency of the labourer;
and, instead of the compensating process supposed to result from the
stimulus to accumulation, the actual result may be a general
degeneration of the industry. Or, again, the capacity of labourers to
combine both depends and reacts upon their intelligence and moral
character, and will profoundly modify the results of the general
competition.[334] Such remarks, now familiar enough, are enough to
suggest that a full explanation of the economic phenomena would
require reference to considerations which lie beyond the proper sphere
of the economist. Yet the economist may urge that he is making a fair
and perhaps necessary abstraction. He may consider the forces to be
constant, although he may be fully aware that the assumption requires
to be corrected when his formulae are applied to facts. He may consider
what is the play at any given time of the operations of the market,
though the market organisation is itself dependent upon the larger
organisation of which it is a product. He does not profess to deal in
'sociology,' but 'pure political economy.' In that more limited
sphere he may accept Ricardo's postulates. The rate of wages is fixed
at any given moment by the 'labour market.' That is the immediate
organ through which the adjustment is effected. Wages rise and fall
like the price of commodities, when for any reason the number of
hirers or the number of purchasers varies. The 'supply and demand'
formula, however, could not, as Ricardo saw, be summarily identified
with labour and capital. We must go behind the immediate phenomena to
consider how they are regulated by the ultimate moving power. Then,
with the help of the theories of population and rent, we find that the
wages are one product of the whole industrial process. We must look
beyond the immediate market fluctuation to the ef