This is probably quite true. Once the prices are down, it is difficult to see how wages can be higher. But what brought down the prices? Is it ever the case that the world of consumers, practically, go to the workers and ask them to accept low wages on the ground that they can only afford low prices? Experience does not bear this out. So far as I know, the initiative of reducing prices, as a rule, comes from the producers, not from the public. The history of prices of most commodities of large use is something like this. They are at first dear, and only a small circle of consumers can afford them. As the production becomes organised, and capital brings more and more appliances to bear on the manufacture, the goods become cheaper, and a wider circle of demand is found. But below each circle of actual demand there are endless and widening circles of potential demand ready to take any particular commodity if it can be had cheaper. Thus, as, up to a certain point, large production is cheap production, there is always an inducement to the manufacturer and merchant to produce more cheaply. If they can reduce prices, and get down to a lower circle of consumers, it is well known in practical experience that the increase of trade which follows is out of all proportion to the degree of the reduction of price. But when this movement has gone on for some time, and goods have become very cheap, the demand has a way of appearing imperative, especially if these goods have entered into the standard of comfort of great classes. The goods become "necessary;" the low prices meet a "natural" demand; and these prices are just enough to yield an average profit to the employer--for profit must have its average, or capital, as we are often warned, will fly the country. This is all quite true. The fallacy emerges only when it is suggested that the low prices are the cause of low wages. Here there are two possibilities: (1) All the reduction of cost may have been effected by perfecting machinery, organising production, and bringing producer and consumer together--that is to say, all the cheapening may have come from the side of capital. In this case there is no room for laying low wages at the door of cheapened prices. Or (2) as wages constitute one of the chief costs in all production--in the United States, for instance, they make up on an average a quarter of the manufacturing cost--they may have been reduced along with the capital expenses, and the low prices be partly due to these low wages.