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I have divided the present volume into two parts: a first, of five chapters, containing a statement at large of my own views on the relation of capital to wages, and on the wages fund doctrine; and a second, of nine further chapters, in which the history of the wages fund discussion from its beginning to the present time is followed. At the close, a final chapter gives a brief summary of both parts. In this arrangement I have departed from the traditional plan, and perhaps from the strictly logical plan. It has been customary, in critical and historical inquiries as to one or another phase of economic theory, to begin with the history and criticism, and to close with the statement of the author's final conclusions. But criticism and comment proceed inevitably from the thinker's own point of view; and to weigh the conclusions of others, without having explained one's own, necessitates either an incidental and thus unsatisfactory statement of the grounds of an opinion, or a considerable anticipation of views whose full exposition is nevertheless postponed. I have accordingly adopted the reverse order, and trust I have been able thereby to make at once a briefer and a clearer presentation of my opinions.
I am sensible that in the first part, in which my own views are stated, there is some elaborateness of exposition and some liberal reaching-out to related topics. I have endeavored to make my meaning clear not only to those who have already given some attention to economic theory, but to those who are new to such discussions; and hence I may have been prolix, and may have explained at needless length matters that to many readers will seem very simple. The historical and critical discussions of the second part are addressed more particularly to special students of economic theory. While not essential for following the reasoning or for weighing the conclusions of the first part, they yet consider aspects of the wages fund controversy not to be neglected by those who would reach an opinion on the subject as a whole.
I have to express my warm thanks to Professor Maffeo Pantaleoni, who generously put his well-stocked library at my disposal in Rome during the winter of 1894–95; to Mr. James Bonar, of London, who read the manuscript of some of the earlier chapters, and greatly aided me by his criticism; and to my colleague Professor W. J. Ashley, who has read all the proofs of the volume, and offered many helpful suggestions.
Two chapters have already appeared in print. Almost the whole of Chapter III was published, under the title "The Employer's Place in Distribution," in the Quarterly Journal of Economics for October, 1895. Chapter XIII, on the wages fund at the hands of German economists, was published, in essentials, in the same journal for October, 1894.
Harvard University, November, 1895