al rate within a certain distance of the natural one, though a
monopoly may make the distance unduly great. If potential competition
works feebly on the employers' side,--if independent producers are
slow to appear even when the price of a product is very high,--there
is a large profit in the industry for some one; and if potential
competition works feebly on the side of labor,--if workmen can safely
strike with little fear that independent laborers will dare to take
their places,--the men can secure a fair-sized share of this profit.
A strong trade union working for a strong monopoly gets wages that
exceed the standard rate by the largest obtainable margin; and yet, as
we have said, even this excess has limits, and adjusting disputes by
conciliation does not alter those limits. The rates agreed upon are
still governed by the standard rate to the same extent as under the
regime of strikes. The strike and the lockout become potential, but
they impend as possibilities and do their work. The board of
conciliation knows that they will occur unless their probable results
are anticipated and forestalled by the decision. The board cannot do
otherwise, therefore, than to restrict the actual strikes. Wages then
become the natural rate with a plus mark, and may be said to be
adjusted in a way that at the bottom is natural, though it works under
vitiating influences.

_Why Voluntary Arbitration does more than Conciliation._--Voluntary
arbitration is an advance over mere conciliation in point of
effectiveness. It departs somewhat from the plan of confining the
action to the family, since it introduces some other parties as
arbitrators and thus invites some recognition of outside interests.
Nevertheless its actual working involves little change in principle,
and its results do not greatly vary from those attained by
conciliation. When we speak of arbitration as voluntary, what we
usually mean is that acceptance of the award is in no way enforced.
Either party may accept it or refuse it, but it may be that both
parties acting together cannot prevent the investigation; and the
economic law of wages acts best when this is the case. How such
voluntary arbitration is provided for,--whether it is established by
free contract between employers and employed, or by statute,--is not
in this connection of importance. The one thing that is important is
that no compulsion is applied to either party to force him to accept
the award.

_A Moral