This vision of a stationary state comes in the book in which Mill passes from the 'statics,'as he calls it,to the 'dynamics'of political economy.His purpose is to trace the influence of industrial progress.His first chapter (92)notices the vast mechanical discoveries,the increased security of society and greater capacity for united action,which give reasons for hoping indefinite growth of aggregate wealth There is,he thinks,'not much reason to apprehend'that population will outrun,though we must sadly admit the possibility that it will keep up with,production and accumulation.This leads to the chapters in which he discusses the effect of progress upon the various classes concerned.(93)How does the 'progress of industry'affect the three classes --landowners,capitalists,and labourers?Land is a fixed quantity;but population may increase,capital may increase,and the arts of production may improve by supposing each to increase separately and then together.A long and careful analysis gives us the general result.It is enough to notice the conclusion.(94)Land represents the fixed 'environment'of the race.The proprietors of the land will be enriched by economical progress and the growing necessity for resort to inferior soils.The cost of raising the labourer's subsistence increases,and profits therefore tend to fall.The improvement of the arts of agricultural production acts as a 'counteracting force.'It relaxes the pressure and postpones the stationary state.For the moment the improvement may diminish (as Ricardo had argued),but in the long run must promote,the 'enrichment of landlords,'and,if population increases,will transfer to them the whole benefit.
Mill,as we have seen,was fully alive to the enormous increase in past times of the general efficiency of labour and to the indefinite possibilities of the future.Yet the improvement seems here,again,to be regarded rather as checking the gravitation towards the stationary state,than as justifying any confident hopes of improvement.Meanwhile the elevation of the labouring classes depends essentially upon their taking advantage of such improvements to raise their standard,instead of treating an addition to their means 'simply as convertible into food for a greater number of children.'(95)
VI.THE WAGE-FUND
This doctrine led to one of the strangest of controversial catastrophes.In his chapter upon 'wages'(96)Mill had begun with an unlucky paragraph.He introduced the word 'wage-fund'to describe the sums spent in 'the direct purchase of labour';and stated that wages necessarily depended upon the proportion of this fund to the labouring population.This doctrine was assailed by Thornton in 1869.(97)Mill,reviewing Thornton,astonished the faithful by a complete recantation;and,though a disciple or two --especially Cairnes and Fawcett --continued to uphold the doctrine,or what they took to be the doctrine,political economists have ever since been confuting it,or treating it as too ridiculous for confutation.If we are to assume that the wage-fund was at once an essential proposition of the old 'classical'economy and a palpable fallacy,the whole structure collapses.The keystone of the arch has crumbled.Nor,again,is it doubtful that this catastrophe marked a critical change in the spirit and methods of political economy.And yet,when the actual discussion is considered,it seems strange that it should have had such importance.What was this 'wage-fund theory'?The answer is generally given by quoting the passage already mentioned from M'Culloch,a paragraph from Mill,and Fawcett's reproduction of Mill.Mill's sentences,says Professor Taussig,'contain all that he ever said directly and explicitly on the theory of the wage-fund.'(98)It is strange that so vital a point should have been so briefly indicated.Then Mill's ablest follower,Cairnes,declares that though he had learned political economy from Mill,he had never understood the wage-fund theory in the sense which Thornton put upon it and which Mill accepted.(99)But for Mill's admission,he says,he would 'have confidently asserted'that not only no economist but 'no reasonable being'had ever asserted the doctrine.We are left to doubt whether it be really a corner-stone of the whole system or an accidental superstructure which had really no great importance.At any rate it was rather assumed than asserted;and yet is so closely connected with the system that I must try to indicate the main issue.
