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than they would probably have had from either if it had been their sole occupation. . . For the same reason it is found that, capteris paribus, those trades are generally the worst paid, in which the wife and children of the artizan aid in the work. The income which the habits of the class demand, and down to which they are almost sure to multiply, is made up, in those trades, by the earnings of the whole family, while in others the same income must be obtained by the labour of the man alone. It is even probable that their collective earnings will amount to a smaller sum than those of the man alone in other trades; because the prudential restraint on marriage is unusually weak when the only consequence immediately felt is an improvement of circumstances, the joint earnings of the two going further in their domestic economy after marriage than before. Such accordingly is the fact, in the case of hand-loom weavers. In most kinds of weaving, women can and do earn as much as men, and children are employed at a very early age; but the aggregate earnings of a family are lower than in almost any other kind of industry, and the marriages earlier. It is noticeable also that there are certain branches of hand-loom weaving in which wages are much above the rate common in the trade, and that these are the branches in which neither women nor young persons are employed. These facts were authenticated by the inquiries of the Handloom Weavers Commission, which made its report in 1841. No argument can be hence derived for the exclusion of women from the liberty of competing in the labour market; since even when no more is earned by the labour of a man and a woman than would have been earned by the man alone, the advantage to the woman of not depending on a master for subsistence may be more than an equivalent. It cannot, however, be considered desirable as a permanent element in the condition of a labouring class, that the mother of the family (the case of single women is totally different) should

be under the necessity of working for subsistence, at least elsewhere than in their place of abode. In the case of children, who are necessarily dependent, the influence of their competition in depressing the labour market is an important element in the question of limiting their labour, in order to prowide better for their education.

- $ 5. It deserves consideration, why the wages of women are generally lower, and very much lower, than those of men. They are not universally so. Where men and women work at the same employment, if it be one for which they are equally fitted in point of physical power, they are not always unequally paid. Women, in factories, sometimes earn as much as men; and so they do in hand-loom weaving, which, being paid by the piece, brings their efficiency to a sure test. When the efficiency is equal, but the pay unequal, the only explanation that can be given is custom; grounded either in a prejudice, or in the present constitution of society, which, making almost every woman, socially speaking, an appendage of some man, enables men to take systematically the lion's share of whatever belongs to both. But the principal question relates to the peculiar employments of women. The remuneration of these is always, I believe, greatly below that of employments of equal skill and equal disagreeableness, carried on by men. In some of these cases the explanation is evidently that already given: as in the case of domestic servants, whose wages, speaking generally, are not determined by competition, but are greatly in excess of the market value of the labour, and in this excess, as in almost all things which are regulated by custom, the male sex obtains by far the largest share. In the occupations in which employers take full advantage of competition, the low wages of women as compared with the ordinary earnings of men, are a proof that the employments are overstocked: that although so much smaller a number of women, than of men, support themselves by wages, the occupations which

aw and usage make accessible to them are comparatively so few, that the field of their employment is still more overcrowded. It must be observed, that as matters now stand, a sufficient degree of overcrowding may depress the wages of women to a much lower minimum than those of men. ..The wages, at least of single women, must be equal to their support; but need not be more than equal to it; the minimum, in their case, is the pittance absolutely requisite for the sustenance of one human being. Now the lowest point to which the most superabundant competition can permanently depress the wages of a man, is always somewhat more than this. Where the wife of a labouring man does not by general custom contribute to his earnings, the man's wages must be at least sufficient to support himself, a wife, and a number of children adequate to keep up the population, since if it were less, the population would not be kept up. And even if the wife earns something, their joint wages must be sufficient to support, not only themselves, but (at least for some years) their children also. The me plus ultra of low wages, therefore, (except during some transitory crisis, or in some decaying employment,) can hardly occur in any occupation which the person employed has to live by, except the occupations of women.

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ber of producers can dispose of all they produce. . In most civilized countries, the restrictions of this kind which once existed have been either abolished or very much relaxed, and will, no doubt, soon disappear entirely. In some trades, however, and to some extent, the combinations of workmen roduce a similar effect. Those cominations always fail to uphold wages at an artificial rate, unless they also limit the number of competitors. But they do occasionally succeed in accomplishing this. In several trades the workmen have been able to make it almost impracticable for strangers to obtain admission either as journeymen or as apprentices, except in limited numbers, and under such restrictions as they choose to impose. It was given in evidence to the Hand-loom Weavers Commission, that this is one of the hardships which aggravate the grievous condition of that depressed class. Their own employment is overstocked and almost ruined; but there are many other trades which it would not be dif. ficult for them to learn: to this, however, the combinations of workmen in those other trades are said to interpose an obstacle hitherto insurmountable. Notwithstanding, however, the cruel manner in which the exclusive principle of these combinations operates in a case of this peculiar nature, the question, whether they are on the whole more useful or mischievous, requires to be decided on an enlarged consideration of consequences, among which such a fact as this is not one of the most important items. Putting aside the atrocities sometimes committed by workmen in the way of per. sonal outrage or intimidation, which cannot be too rigidly repressed; if the present state of the general habits of the people were to remain for ever unimproved, these partial combinations, in so far as they do succeed in keeping up the wages of any trade by limiting its numbers, might be looked upon as simply intrenchings round a particular spot against the inroads of over-population, and making the wages of the class depend upon their own rate of increase, instead of dormio on that 2

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of a more reckless and improvident class than themselves. What at first sight seems the injustice of excluding the more numerous body from sharing the gains of a comparatively few, disappears when we consider that by being admitted, they would not be made better off, for more than a short time; the only permanent effect which their admission would produce, would be to lower the others to their own level. To what extent the force of this consideration is annulled when a tendency commences towards diminished over-crowding in the labouring classes generally, and what grounds of a different nature there may be for regarding the existence of trade combinations as rather to be desired than deprecated, will be considered in a subsequent chapter of this work, with the subject of Combination Laws.

§ 7. To conclude this subject, I must repeat an observation, already made, that there are kinds of labour of which the wages are fixed by custom, and not by competition. Such are the fees or charges of professional persons: of physicians, surgeons, barristers, and even attorneys. These, as a general rule, do not vary, and though competition operates upon those classes as much as upon any others, it is by dividing the to, not, in general, by diminishing the rate at which it is |. The cause of this, perhaps, has een the prevalence of an opinion that such persons are more trustworthy if paid highly in proportion to the work they perform; insomuch that if a lawyer or a physician offered his services at less than the ordinary rate, instead of gaining more practice, he would probably lose that which he already had. For analogous reasons it is usual to

pay greatly beyond the market price of their labour, all persons in whom the employer wishes to place peculiar trust, or from whom he requires something besides their mere services. For example, most persons who can afford it, pay to their domestic servants higher wages than would purchase in the market the labour of persons fully as competent to the work required. They do this, not merely from ostentation, but also from more reasonable motives; either because they desire that those they employ should serve them cheerfully, and be anxious to remain in their service; or because they do not like to drive a hard bargain with people whom they are in constant intercourse with ; or because they dislike to have near their persons, and continually in their sight, people with the appearance and habits which are the usual accompaniments of a mean remuneration. Similar feelings operate in the minds of persons in business, with respect to their clerks and other employés. Liberality, generosity, and the credit of the employer, are motives which, to whatever extent they operate, preclude taking the utmost advantage of competition: and doubtless such motives might, and even now do, operate on employers of labour in all the great departments of industry; and most desirable is it that they should. But they can never raise the average wages of labour beyond the ratio of population to capital. . By giving more to each person employed, they limit the power of giving employment to numbers; and however, excellent their moral effect, they do little good economically, unless the pauperism of those who are shut out, leads indirectly to a readjustment by means of an increased restraint on population.

CHAPTER XV.

OF PROFITS.

§ 1. HAviNG treated of the labourer's share of the produce, we next proceed to the share of the capitalist; the profits of capital or stock; the gains of the person who advances the exenses of production—who, from funds in his possession, pays the wages of the labourers, or supports them during the work; who supplies the requisite buildings, materials, and tools or machinery; and to whom, by the usual terms of the contract, the produce belongs, to be disposed of at his pleasure. After indemnifying him for his outlay, there commonly remains a surplus, which is his profit; the net income from his capital: the amount which he can afford to expend in necessaries or pleasures, or from which by further saving he can add to his wealth. As the wages of the labourer are the remuneration of labour, so the profits of the capitalist are properly, according to Mr. Senior's well-chosen expression, the remuneration of abstinence. They wre what he gains by forbearing to consume his capital for his own uses, and allowing it to be consumed by po labourers for their uses. or this forbearance he requires a recompense. Very often in personal enjoyment he would be a gainer by squandering his capital, the capital amounting to more than the sum of the profits which it will yield during the so he can expect to live. But while e retains it undiminished, he has always the power of consuming it if he wishes or needs; he can bestow it upon others at his death; and in the meantime he derives from it an income, which he can without impoverishment apply to the satisfaction of his own wants or inclinations. Of the gains, however, which the possession of a capital enables a person to make, a part only is properly an equivalent for the use of the capital itself; namely, as much as a solvent

Fo would be willing to pay for the oan of it. This, which as everybody knows is called interest, is all that a person is enabled to get by merely abstaining from the immediate consumption of his capital, and allowing it to be used for productive purposes, by others. The remuneration which is obtained in any country for mere abstinence, is measured by the current rate of interest on the best security; such security as o: any appreciable chance of losing the principal. What a person expects to gain, who superintends the employment of his own capital, is always more, and generally much more, than this. The rate of profit greatly exceeds the rate of interest. The surplus is partly compensation for risk. By lending his capital, on unexceptionable security, he runs little or no risk. But if he embarks in business on his own account, he always exposes his capital to some, and in many cases to very great, danger of o or total loss. For this danger e must be compensated, otherwise he will not incur it. He must likewise be remunerated for the devotion of his time and labour. The control of the operations of industry usually belongs to the person who supplies the whole or the greatest part of the funds by which they are carried on, and who, according to the ordinary arrangement, is either alone interested, or is the person most interested (at least directly), in the result. To exercise this control with efficiency, if the concern is large and complicated, requires great assiduity, and often, no ordinary skill. This assiduity and skill must be remunerated. The gross profits from capital, the ; returned to those who o the unds for production, must suffice for these three purposes. . They must afford a sufficient equivalent for abstinence, indemnity for risk, and remuneration for the labour and skill required for superintendence. These different compensations may be either paid to the same, or to different persons. The capital, or some part of it, may be borrowed: may belong to some one who does not undertake the risks or the trouble of business. In that case, the lender, or owner, is the penson who practises the abstinence; and is remunerated for it by the interest paid to him, while the difference between the interest and the gross profit remunerates the exertions and risks of the undertaker.* Sometimes, again, the capital, or a part of it, is supplied by what is called a sleeping partner; who shares the risks of the employment, but not the trouble, and who, in consideration of those risks, receives not a mere interest, but a stipulated share of the gross profits. Sometimes the capital is supplied and the risk incurred by one person, and the business carried on exclusively in his name, while the trouble of management is made over to another, who is engaged for that purpose at a fixed salary. Management, however, by hired servants, who have no interest in the result but that of preserving their salaries, is o inefficient, unless they act under the inspecting eye, if not the controlling hand, of the person chiefly interested: and prudence almost always recommends giving to a manager not thus controlled, a remuneration partly dependent on the profits; which virtually reduces the case to that of a sleeping partner. Or finally, the same person may own the capital, and conduct, the business; adding, if he will and can, to the management of his own capital, that of as much more as the owners may be willing to trust him with. But under any and all of these arrangements, the same three things require their remuneration, and must obtain it from the gross profit: abstinence, risk, exertion. And the three parts into which profit may be considered as resolving itself,

* It is to be regretted that this word, in this sense, is not familiar to an English ear. French political economists enjoy a great advantage in being able to speak currently ofles profits de l'entrepreneur.

may be described respectively as interest, insurance, and wages of superintendence.

§ 2. The lowest rate of profit which can permanently exist, is that which is barely adequate, at the given place and time, to afford an equivalent for the abstinence, risk, and exertion imlied in the employment of capital. from the gross profit, has first to be deducted as much as will form a fund sufficient on the average to cover all losses incident to the employment. Next, it must afford such an equivalent to the owner of the capital for forbearing to consume it, as is then and there a sufficient motive to him to persist in his abstinence. How much will be required to form this equivalent, depends on the comparative value placed, in the given society, upon the resent and the future: (in the words ormerly used) on the strength of the effective desire of accumulation. Further, after covering all losses, and re. the owner for ...; to consume, there must be something left to recompense the labour and skill of the person who devotes his time to the business. This recompense too must be sufficient to enable at least, the owners of the larger capitals to receive for their trouble, or to pay to some manager for his, what to them or him will be a sufficient inducement for undergoing it. If the surplus is no more than this, none but large masses of capital will be employed productively, and if it did not even amount to this, capital would be withdrawn from production, and unproductively consumed, until, by an indirect consequence of its diminished amount, to be explained hereafter, the rate of profit was raised. Such, then, is the minimum of profits: but that minimum is exceed; ingly variable, and at some times and places extremely low; on account of the great variableness of two out of its three elements. That the rate of necessary remuneration for abstinence, or in other words the effective desire of accumulation, differs widely in dif. ferent states of society and civilization, has been seen in a former chapter.

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