Search results

The Legislature of Alberta has distinguished itself by enacting the most drastic reform measures ever seen in Canada. Supported by a very large body of public opinion, it has reduced debts, both public and private, has attempted to take several matters out of the hands of the Courts, and has, so far as legal enactment could do so, substituted the people's own credit—Social Credit—for the financial credit which has hitherto been relied on. It is thought that this substitution is possible and might be complete. Whether or not this belief is sound, time only can tell. The present, however, offers a good opportunity to survey the situation in the light of the circumstances of the province and the general characteristics of its people.

The purpose of observation is to discover laws. The word "law" I use in Hegel's sense of a generalization, a determination of categories, which enables experience to be classified and rationally interpreted. We can never arrive at a complete knowledge of laws in this sense. If we could, the future would be known to us with as much certainty as the past. Hegel said that forecasting is not the province of the philosopher, and some of his own attempts in that direction, such as the subjugation of Asia by Europe and a monarchy for the United States, do not appear fortunate. The difficulties, however, are two: that laws are not truly or completely known; and that experience is not assigned to the proper categories. These conceptions, however, point the way. It would seem that economics has as much need as any other branch of knowledge for seeking laws in this sense. Although its steps may be faltering, they will be in the right direction if truth is sought by observation conceived as a quest for the laws which experience obeys.I propose in this paper to present a short attempt along these lines, my data being taken from Canadian and United States economic statistics since the War. The following, therefore, is intended primarily as an illustration of method. It is hoped, however, that the conceptions which will emerge are also worth notice for their own sakes.

In a few economics text-books the labour market is still an area in which the free play of supply and demand brings about the equation of wages to the marginal product of labour. But the modern economist knows very well that "free competition" and "a living wage" are often incompatible, and that free competition itself is to-day little more than an expository device. The determination of wages, and of labour conditions generally, must take into account two important sets of influences, (a) the circumstances which affect the wage bargain between employers and employees, and (b) the extent to which "minimum wages" and basic living and working standards are fixed by the state. To the economic historian each of these opens up long chapters of social movements and state legislation which are more complete in most of the older industrial countries but to which many new pages have been added on this continent in recent times.This experience has established the recognition of two main methods, and their accompanying sets of principles, by which wages and working conditions have been raised irrespective of the rate set in theory or practice "by the market". The first is that of collective as distinct from individual bargaining. Collective—which is for all practical purposes, trade union— negotiation involves two principles, of which one is better known than the other. The first is that the ordinary wage-earner, even vis à vis the small employer, has little or no bargaining power on his own: not only is his labour a perishable commodity, but also his employer is likely to be a great corporation and he is beset by the potential competition of the army of the unemployed—and it may be added, even in the best of times by the potential competition of the migrant from the farm, the real "marginal worker" of an agricultural country.