Adam Smith placed labor in the very arch of his economic philosophy; his book on Wealth of Nations' begins with a discussion of labor as the source of the annual wealth of a nation, and the first chapter describes the divi sion of labor as a means of increasing produc tion. The opening sentence of this book is, 'The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life 1D Labor is both the cause of value and its measure. In spite of the high position thus assigned labor in Smith's economic system, the practical re sults in the hands of his followers were bad. He had insisted upon the need of greater free dom of enterprise and of contract and this doctrine was erected into the principle of by the classical school. Compe tition was given full sway and all restrictive barriers were swept away. This meant the exploitation and degradation of labor. Ricardo and Malthus register in their writings the hopeless attitude of economists as to the im possibility of improving the condition of labor, a view which persists even in John Stuart Mill.
A reaction against this position soon set in. The Socialists insisted upon the rights of labor and the injustice of existing methods of dis tribution. The changes wrought by the Indus trial Revolution brought many industrial re adjustments and serious economic ills such as poverty, unemployment and crises. Increasing attention began to be given to the subject of distribution instead of production or ex change. Social reformers interested them selves in the practical work of abolishing specific abuses. The labor movement became too important to ignore, and not only has it secured an increasing amount of space in recent economic literature, but it has been treated with greater sympathy and understand ing. In many of our colleges and universities courses in labor problems are given, and an increasing amount of study is being devoted to the subject.
Bibliography.— Lauck, W. J., and Syden stricker, Edgar, 'The Conditions of Labor in the American Industries' (1916) • Willoughby, W. F., ed., 'The Principles of Labor Legisla tion' (1916) ; American Labor Year. Book' (Current).