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prices, there would at any rate be some security for an immediate expansion of employment and consumption. But with so much of our industry in the clutches of strong combinations there is no safeguard for the interest either of the worker or of the consumer.

But, it may be urged, these arguments against wage reductions, especially the last, are only applicable in their full force to trades working for the home market. Now the most urgent demand for wage reductions is in our trades working for the world-market which find themselves undersold everywhere by the cheaper products of low-waged countries, especially Germany. It is just here that the present reality of 'the limited market' presses us severely. If the economic world went round as smoothly as theorists imagined, and consumption was ready and able at once to take everything that could be produced, there would be no plausibility in the demand that we must cut our wages, because we have forced German wages down to a level on which she can virtually undersell us in all foreign markets. Given a fully effective world-market, there would be nothing to prevent us producing goods for that market on a higher level of wages than that of Germany. We should not produce exactly the same lines of goods, for Germany would specialise in those lines where her cheaper labour gave her the largest margin of gain. We should undertake lines of production and trade in which, though Germany could undersell us if she undertook them, she would not compete because her capital and labour would be more profitably absorbed in the lines where her advantages were