THE PROBLEM OF WAGES 121

progressive diminution, falls below the level of the current
wage-rate, there is lacking any inducement, of profit to the
employer, to add to the number he employs. Thus, the
demand for more men is active or not according as the
current rate of wages is below the value of the net product
of the marginal worker or not, and, in seeking his own
interest, the employer acts in a way tending to make
marginal net product correspond in amount with current
wages, In a state of equilibrium, where no inducement for
further change was left, this correspondence would be
complete. It is, further, clear that, in seeking to secure more
men, employers tend to raise wages, so that, apart from the
decreasing marginal productivity of labour, the rise of wages
in response to an active demand for labour acts to bring
about the correspondence in question between the wageslevel
 and marginal productivity.
The third possibility is that the increase of members in
an industrial group adds to its product in a greater proportion
 than that in which its numbers are increased. If the
net product of the marginal worker steadily increase, it must
be in excess of the average product of the group. But this
average must be increasing also. To secure additional men,
it would be worth while offering them the equivalent of more
than the average product assignable to the labour of the
group, were it not for their interchangeability, This feature
makes it necessary to restrict offers for additional men to
the average product of the group at least. All that can be
said in this case is that, while such conditions continue to
prevail, the extension of employment of this kind offers
advantages so long as wages do not rise to a point where
they absorb the whole benefit of the increase of productiveness
 of labour. This situation is one calculated to lead to
continued demand for labour, the response to which, in
demand for increased wages, has already been pointed out.
There is no assignable limit to the rise of wages, though
there is an obvious limit to the rate at which the rise may
occur, It is not going too far to say that this state of things
can be, as a rule, only temporary, In the expansion of the
enterprise in question a point will be reached after which