much money and trouble in trying to make it, with the intention of patenting it, and getting a royalty on each machine that is made. But in fact a very small number of the improvements that are made are patented; and a large manufacturer has greater inducements than a small one to make experiments which are not certain of success. He can spend a large sum on trying a new process or a new kind of machine, without feeling the loss if the experiment fails. If it succeeds, he is much more likely to get a good return on his outlay before others are able to take advantage of it than a smaller manufacturer would be.

But very often the most important advantages to large firms consist in their facilities for buying and selling. The expense involved in buying a large quantity of goods is always smaller in proportion than that of buying a small quantity. A large firm gains in the transport of goods; particularly if it has a railway siding. It gets prompt and trustworthy information from highly paid agents; and thus learns when and from whom to buy, when and what to manufacture, when and to whom to sell, and lastly whom to trust and whom not to trust. It can afford to advertise largely in print and by means of commercial travellers. Something may also be allowed for the confidence which consumers feel that a large house will not descend to petty tricks and dishonesties; it has too much to lose.

In some trades a large firm gains much by the variety of its wares. A builder, who wants a great number of brass fittings, likes to order them of a firm which has a vast number of moulds and can fill up a large and various order from its own resources. A large firm gains often in the matter of superintendence; but not so much as at first sight appears. It is true that in small works the master or manager looks after many things which in large works are left to the care of a foreman or overlooker; but hired overlookers have not the same interest and energy in preventing waste through carelessness or dishonesty that the master himself has. There are

some trades, particularly those concerned with the more valuable metals, in which large firms are on the whole at a disadvantage as compared with small ones in the matter of superintendence.

§ 8. There are many branches of trade in which the advantages of division of labour and specialization of machinery seem to have reached their limit. In cotton spinning, for instance, a large factory contains many rooms which are exactly alike in all respects; so that it resembles several smaller factories joined together. It has then no great advantage over smaller factories in the work of production, but it has those general advantages in buying and selling and organizing which a large capital must

always have over a small one. When the owner of such a factory wants to put more capital into his business, it may answer his purpose to put up looms for making his yarn into calico. He then has an advantage over those who only spin, because he has no trouble about finding a market for his yarns ; and he has an advantage over those who merely weave, because he has no trouble about bargaining for and testing the quality of the yarn that he uses. What used to be the work of several distinct trades is all done now under one roof.

This change is partly due to the modern facilities for the growth of firms which manage vast sums of capital. The number of very wealthy men has increased rapidly of late; and the Limited Liabilities Acts1 have enabled those who are not rich, and who perhaps have no time for business, to take shares in large trading concerns, without imperilling their whole fortunes. This has led to the formation of vast companies in almost every branch of business. Some of them undertake enterprises for which no private capital could suffice. The London and North Western Railway Company wields a capital greater than the whole accumulated wealth of many of the states whose names occupy a large place in history. There does not seem to be any limit to the amount of wealth which a single trading company can profitably manage in a business which can be managed by routine, and does not require the bold enterprise and prompt decision of a single mind.

But this great tendency to the concentration of capitals is opposed by the increasing variety in the number of things. that have to be done, and in the modes of doing them. Industries subsidiary to the old established industries are springing up continually, and when they become well established, other industries subsidiary to these make their appearance. The growing variety of the wants of man, the growing resources of invention by which they are met, continually make openings by which new men edge their way into business. A glance at the Trade Directory of London or almost any other large manufacturing town will discover an astonishing variety of trades which are almost entirely in the hands of small

masters.

§ 9. Whatever may be the result of the contest between large and small factories, it appears certain that the division of labour will continually increase. This increase is one of vital importance. It adds to men's power over nature, and furthers social progress by increasing wealth. Its effects are for the

1 These Acts, passed in 1855-1862, enable a Company by writing "Limited" after its title to secure its shareholders against losing more than the amount of their shares by its failure.

same time. Again the division of labour somet a man to pass easily between trades which used distinct. A country watchmaker could not easily b maker or vice versa: but many of the men in a factory could easily find employment in a large and vice versa. When the late American war cam a famous rifle factory devoted itself to making sewi As we proceed further, we shall find other reason ing that whatever tendency there is to a growing unc dustry, is to be ascribed to other causes than the divis

But division of labour does unquestionably monotony. This is a very great evil in the case of involves continued muscular strain or long hours o bad atmosphere. But when the work is light, an of work not excessive, monotony is not very in Mr Nasmyth says, "If you call for the brute for you will degrade the man. He goes to his house s exhausted that it is an utter absurdity to say to that and improve yourself.' He would fall asleep imme must go and take some excitement. But if you ta who has been superintending some piece of machin in which there is very little or only a minimum of brute force, you will find that that man's intellectual has any at all, will come forth, and he will be a a self cultivated man. I have found that again I think this is the result of machinery, that it t the necessity for brute labour, and very much e intellectual and moral position of the working cl management of machinery requires much judgme source." The experience of Englishmen in backwar shews that costly and delicate machinery cannot profitably by a dull and ignorant people, however be the rate of wages which they are willing to take. of the mechanic, even where it is apparently monoton him shrewd, cautious and prompt.

Again even when division of labour makes the v individual monotonous and uniform, it makes the w country at large changeful and various. The worker

enth Report of Trades Union Commissioners, 1868

whose mental and physical energies are not strained by his work can hardly fail to be educated by the variety and excitement of the various work that is going on around him. His neighbours have interests in life sufficiently like his, and yet sufficiently different, to enable him to learn from them new ways of looking at things.

There is more division of labour in the town than in the country; but the agricultural labourer lags behind the town workman in intelligence. The advances that have recently been made in agricultural science are chiefly due to the mental activity of towns-people.

§ 10. It will be useful to refer to the Law of Division of Labour, which may be stated thus :

When the demand for a commodity becomes very large, the process of making it is generally divided among several distinct classes of workers, each with its proper appliances, and each aided by Subsidiary industries; for such a division diminishes the difficulty of making the commodity.

Anticipating a term which will be defined later on, we may

say:

The Cost of production of a manufactured commodity is diminished whenever an increase in the demand for it leads to an increased division of labour in making it.

The Law of Division of Labour implies that an increase in the amount of capital and labour which is applied to any process of manufacture is likely to cause a more than proportionately increased return. It is therefore sometimes called the Law of Increasing Return, so as to bring out the contrast in which it stands to the Law of Diminishing Return which applies to agriculture.

§ II. The largest industry is that of agriculture; but there is scarcely any other industry which is able to make so little use of the advantages of division of labour and of production on a large scale. For agricultural labourers cannot be grouped together in large masses; they must be scattered over the country. And each season of the year has its special work: a man cannot spend his life in reaping. So that the work of agriculture cannot be broken up into a vast number of parts each of which is performed by a band of labourers who devote their lives to acquiring a special skill in this class of work.

Agriculture, however, seems to be following in the steps of manufacture. Field steam-engines are becoming common, and new machines to be worked by them or by horse power are appearing in rapid succession. The fields demand every day a smaller number of dull labourers and a greater number of intelligent mechanics.

This change is exercising an important influence in the competition between small and large farms. The small farmer cannot always afford to have a field steam-engine; he cannot afford to have a great number of machines for occasional use. Thus every year puts him at a greater disadvantage relatively to the large farmer. This disadvantage is diminished but not removed by the rapid growth of a subsidiary industry, which undertakes steam ploughing threshing, &c. for farmers. The growth of this industry is the most important step towards obtaining the advantages of division of labour that has ever been made by agriculture.

In comparison with a small farmer a large farmer gains something in economy of buildings, and in economy of materials. He is able to have a better rotation of crops; he can send a great many labourers into a field in which there is anything to be done quickly. He can, as a rule, borrow capital from the banks more easily than a small farmer can. Lastly, the large farmer is likely to have more knowledge and greater skill and enterprise than the smail farmer. He probably received a better education at starting; and he can afford to leave to subordinates much work that the small farmer does himself, so that he has more time and opportunity for increasing his knowledge. And as farms change hands from time to time, the ablest farmers are likely to find their way to the largest farms. Thus the economy of skill is carried further under a system of large, than under one of small, farms. On the other hand the large farmer loses in the matter of superintendence. The small farmer works hard himself: he watches for every trifling gain and every small saving and those who work under him have little opportunity of being idle or dishonest.

§ 12. These advantages enable spade husbandry to be as successful on small holdings as on large. A large market garden has few advantages over a small one except in buying and selling. An intelligent market gardener who cultivates a few acres by the labour of himself, his family, and perhaps one or two hired labourers, can pay a high rent for his garden, and yet earn very good wages for himself and very good profits on his capital. Similarly a well managed small vineyard in Southern Europe seems to be able to hold its own against the competition of larger vineyards. Each vine has its own history, the soil is seldom exactly of the same character for many consecutive yards; and the cultivator of a large vineyard could not carry in his head many of the trifling details that guide the action of him who devotes all his life to one little plot of ground.

But the greater part of the small holdings on the continent have generally the advantage of being owned by those who