ABSTRACT
The theory of wages, like all other economic theories, ic; only a means to an end. The economist desires to understand the forces influencing the quantity of goods and services enjoyed by individuals, but so complicated are the economic relationships of the world that he ic; forced to make broad classifications, and at most he can hope correctly to interpret those phenomena which at any given time are of particular significance to his problem. One of the most obvious facts of the world of to-day is that individuals obtain incomes, i.e., the right to goods and services, in return for participation in the productive process. Production is carried on by means of a large number of factors, land, labour, material and non-material equipment, etc., nearly all of which are capable of becoming objects of property. Most Western countries recognize the institutions of private property and free labour, and have evolved a system of inducements to persuade owners of labour or property to co~operate in production, People thus
get incomes because they work or lend property, and since the majority of those who receive relatively small incomes roughly coincide with the classes who perform labour, it is clear that a theory which explains the wages people receive will go a long way towards answering the major question regarding the distribution of wealth among individuals.
