For the increased wage cannot in general be obtained by reducing profits, for any such reduction will drive freshly-accumulated capital more and more to seek foreign investments, and managing ability will in some measure tend to follow it.

The higher aggregate of wages must therefore be represented in a general rise of prices.

This rise of prices will have two effects.

In the first place it will tend to largely negative the higher aggregate of money wages.

Or if organized labour, free from the competition of unemployed, is able to maintain a higher rate of real wages, the general rise in prices will enable foreign producers to undersell us in our own market (unless we adopted a Protective Tariff), and will disable us from competing in foreign markets.