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TO MY WIFE. GENERAL PREFACE TO W.E.A. SERIES.

The scarcity of authoritative Australian books on economic, social, and political problems has been severely felt during the development of the Workers' Educational Association in the Commonwealth. On the foundation of the Federal Council of the W.E.A. in 1918, a means of overcoming this difficulty was sought. Among the professors, lecturers, and tutors who have so readily assisted the tutorial class movement, some had collected valuable material bearing on these problems. Through the Federal Council it was thought possible to assemble this material for publication in a series of monographs intended for the use of students in tutorial classes and elsewhere. Thus has the W.E.A. Series of publications been founded, and it is hoped that its utility will extend beyond the immediate needs of members of the W.E.A. to the growing number of students of social problems in Australia.

The chief aim of the series being to encourage investigation in a field of study hitherto surprisingly neglected in Australia, the W.E.A. does not accept responsibility for the views expressed by the writers therein. Its purpose is to stimulate thought, not to propagate doctrines. A disclaimer of this kind may appear odd in a preface, but our experience of the persistency with which our critics insist on attributing to the Association the opinions of those who happen to be connected with it, has convinced us that it is necessary.

G. V. PORTUS,
General Editor, W.E.A. Series.

Tuis volume had its origin in a series of paniphlets published in 1917-18 by the Workers' Educational Association of South Australia, and attempts to provide a historical and descriptive introduction to the study of Economics. Until the establishment of the W.E.A. in the Commonwealth, Economics was almost the Cinderella of University studies, but since 1914 the subject has grown rapidly in popularity, both among undergraduates and among that wider public which has been drawn into the University tutorial classes. Experience with both kinds of students in Australia suggests: (1) That the best approach to the study of Economics lies in a historical and descriptive survey of modern economic life and organization; (2) that for Australian students it is better to concentrate on developments since about 1760 than to give much time to the fascinating but (to Australia) scarcely relevant movements of earlier economic history; (3) that the range of treatment should be world-wide, with special reference to Great Britain, Germany, the United States, and Australia, rather than confined to any one country. For a course so framed there is not one suitable book. Works published in London or New York confine their attention to Great Britain, or Europe, or the United States; often they give the greater part of their space to events before 1800 or 1850, and scamper lightly over recent developments; and in all cases they ignore Australia, or dismiss it in a few lines.

It is hoped, therefore, that the present volume will meet a need felt by Australian teachers and students of Economics. Many of them will criticize my allocation of space to the different subjects, and I shall probably agree with their criticisms. Much is omitted which should be inserted; there is nothing about price movements, little about private finance, and less about public finance. My only excuses are that the book is already too long, that the addition of prices and finance would necessitate the inclusion of much theoretical discussion, which has been well done in such volumes as Clay's “Economics for the General Reader” or Gide’s “Political Economy," and that one cannot deal with everything in a book which is admittedly only, an introduction. Those who wish to continue their studies beyond the point to which this book takes them are recommended to read the two volumes just mentioned, and consult those referred to at the end of each chapter.

For help in reading the proofs I am indebted to Mr. W. Ham, Mr. V. E. Cromer, and Mr. F. A. Bland. For any errors in fact, and for all opinions expressed in the following pages, I alone am responsible. Where the word "to-day' is used in the text it should be understood to mean December, 1920.

H.H. University of Adelaide,

March, 1921.

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Note to Second Edition. The second edition of this book is little inore than a re-print of the first. Typographical errors have been corrected, but I have shrunk from the task of revising the text in order to include the events of 1921. Readers who look for accounts of the trade depression, the weakening of the trade unions, the abandonment of Bolshevik plans in Russia, etc., will therefore be disappointed.

H.H. Christmas, 1921.

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CHAPTER I.

INDUSTRIAL AND COMMERCIAL LIFE IN THE

EIGHTEENTH CENTURY.

THE economic world of to-day is in general the product of centuries of. growth. But in its main features and chief problems it is especially the outcome of great changes which took place between about 1750 and 1850. These changes affected industry, agriculture, commerce, and finance; they reacted on politics. Their origins can all be traced back long before 1750; but after that date they were so accelerated, so fundamental, and so disruptive as to be revolutionary. They produced a new economic and social order, different in appearance from that which preceded it. The difference is not entirely due to new tendencies. Modern economic life is marked by the use of capital at every point, with economic control in the hands of those who own that capital. We live in a capitalist system. Now capital had become fairly important before 1750, and the capitalist controlled those who worked in many industries. But the most fertile fields for profitable use of capital were commerce and finance rather than production. The period of change brought new knowledge, new machines, new sources of power, new markets, new products, new methods of production, new sources of wealth. In order to take advantage of these possibilities the capitalist had to abandon old methods and types of organization and erect a new structure to house them. He had to put big sums of capital into production as well as commerce. Capital was used in 1750; it is the economic technique, the way the capital is used, which is new.

Before outlining the chief developments of the economic revolution, and describing the conditions which emerged from it, let us glance in this chapter at the chief features of industrial and commercial organization on the eve of the great change.

The Domestic Workshop. The big factory, in which thousands of people may be employed, is essentially a modern product. In the 18th century the congregation of any large rumber of workers under one roof was so rare that travellers went miles out of their course to see this industrial curio. Further, the industrial town and the intense localization of industry in certair, areas were almost unknown. The worker lived in the suburbs of towns which were predominantly commercial or political centres, in industrial villages, or in houses scattered broadcast over the countryside. Usually he had a few acres of land attached to the cottage, or possessed the right to turn live-stock on to some common pasture; hence farming was frequently a by-occupation, to which he could turn in spare moments or when the industrial market was slack. He had two strings to his bow, and his livelihood came from agriculture and industry alike.

The cottage was also the workshop, and often the living-room and bedroom were used for some industrial purpose. All the members of the family, from the child of four or five ars to the old men and women, were enrolled in the labour army. These domestic conditions were liable to produce two unpleasant results. (1) The cottage was usually low, dark,

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damp, and ill-ventilated to begin with. If to these faults we add those arising from the use of oil, evil-smelling substances and charcoal fumes, and the presence of chemical and metallic dust or wool “fluff" in the air, it is evident that conditions might often be as bad and unhealthy as they were in the early factories. The family never got far away from its working environment. (2) The employment of women and children opened the way to infinite abuse. When necessary, the housewife had to do a full day's industrial work, and then find time for domestic duties. How she did it was known only to herself. Meanwhile, every child, as soon as it could understand instructions, was set to work at a task which may not-or mayhave been too heavy for it. “Scarcely anything above four years old but its hands were sufficient for its own support, says

Daniel Defoe. The child paid for its keep, but at what a cost to the future manhood of the nation! And yet no voice was raised in protest.

Production was carried on with the aid of tools or primitive machines. For most industries the equipment was crude, and so small that it could be driven by manual power. Hence the worker had to supply not merely the skill required for his task, but also the physical strength required to work his machinery or wield his tools. This placed a great strain upon his physique, especially as many tasks could only be done by standing or sitting in a stooping position. Industrial fatigue was a very real thing, and its severity was accentuated by the long hours of labour and the scarcity of holidays. The minimum hours of labour were from 5 a.m. to 7 or 8 p.m. in summer, and from dawn to dusk in winter. They were fixed by law, an] even longer hours might be worked when pressure of business demanded them. In fact, life for most workers was a dreary round of work, eat, and sleep. No wonder, therefore, if men occasionally ran amok and indulged in a few days' drinking bout.

It is sometimes claimed by critics of capitalist production that the application of manual skill used to give the old workman an interest and pride in his task. He is said to have experienced the joy of creation and the satisfaction of seeing the product of his labour gradually evolving under his hands. It is claimed that he was able to impress his work with the stamp of his individuality and to express his soul and ideals in the material under his care. This might be true in the case of men engaged in artistic work, such as carving in wood and stone, or weaving tapestries. But the great mass of men, in the 18th as in other centuries, were not employed in that way. They were working from dawn till dusk, in unhealthy surroundings, producing yard after yard of cloth, every inch of which must be like

Or they were making cheap crockery, or digging coal by candle-light in a mine innocent of any efficient pumping plant. Or they were making hundreds of nails or chain links, each one like the rest—and ail for small wages or profit. In this monotonous, physically-exhausting and repetition work there was little room for the joy of creation or the expression of one's individuality.

Industrial Organization. When we get behind the work to the economic structure, we find very varied types and sizes of organization. In some parts and some industries—e.9., the Yorkshire woollen manufacturethere was the small employer, whose family was the firm. He went to the market to purchase his week's supply of raw material, which was then worked up in the cottage by the members of the household into a saleable

every other.

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