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between two classes. We now proceed to the hypothesis of a threefold division of the produce among laborers, landlords, and capitalists; and in order to connect the coming discussions as closely as possible with those which have now for some time occupied us, I shall commence with the subject of Wages.

CHAPTER XI.

OF WAGES.

. 1. Under the head of Wages are to be considered,

first, the causes which determine or influence the wages of labor generally, and secondly, the differences that exist between the wages of different employments. It is convenient to keep these two classes of considerations separate; and in discussing the law of wages, to proceed in the first instance as if there were no other kind of labor than common unskilled labor, of the average degree of hardness and disagreeableness.

Wages, like other things, may be regulated either by competition or by custom; but the last is not a common case. A custom on the subject, even if established, could not easily maintain itself unaltered in any other than a stationary state of society, An increase or a falling off in the demand for labor, an increase or diminution of the laboring population, could hardly fail to engender a competition which would break down any custom respecting wages, by giving either to one side or the other a strong direct interest in infringing it. We may at all events speak of the wages of labor as determined, in ordinary circumstances, by competition,

Wages, then, depend upon the demand and supply of labor ; or, as it is often expressed, on the proportion between population and capital. By population is here meant) the number only of the laboring class, or rather of those who work for hire; and by capital, only circulating capital, and not even the whole of that, but the part which is expended in the direct purchase of labor. To this, however, must be added all funds which, without forming a part of capital, are paid in exchange for labor, such as the wages of soldiers, domestic servants, and all other unproductive laborers. There is, unfortunately, no mode of expressing by one familiar term, the aggregate of what may be called the wages-fund of a country; and as the wages of productive labor form nearly the whole of that fund, it is usual to overlook the smaller and less important part, and to say that wages depend on population and capital. It will be convenient to employ this expression, remembering, however, to consider it as elliptical, and not as a literal statement of the entire truth.

With these limitations of the terms, wages not only depend upon the relative amount of capital and population, but cannot be affected by anything else. Wages (meaning, of course, the general rate) cannot rise, but by an increase of the aggregate funds employed in. hiring laborers, or a diminution in the number of the competitors for hire ; nor fall, except either by a diminution of the funds devoted to paying labor, or by an increase in the number of laborers to be paid.

$ 2. There are, however, some facts in apparent contradiction to this doctrine, which it is incumbent on us to consider and explain.

For instance, it is a common saying that wages are high when trade is good. The demand for labor in any particular employment is more pressing, and higher wages are paid, when there is a brisk demand for the commodity produced; and the contrary when there is what is called a stagnation ; then work-people are dismissed, and those who are retained must submit to a reduction of wages; although in these cases there is neither more nor less capital than before. This is true; and is one of those complications in the concrete phenomena, which obscure and disguise the operation of general causes; but it is not really inconsistent with the principles laid down. Capital which the owner does not employ in purchasing labor, but keeps idle in his hands, is the same thing to the laborers, for the time being, as if it did not exist. All capital is, from the variations of trade, occasionally in this state. A manufacturer, finding a slack demand for his commodity, forbears to employ laborers in increasing a stock which he finds it difficult to dispose of; or if he goes on until all his capital is locked up in unsold goods, then at least he must of necessity pause until he can get paid for some of them. But no one expects either of these states to be permanent; if he did, he would at the first opportunity remove his capital to some other occupation, in which it would still continue to employ labor. The capital remains unemployed for a time, during which the labor market is overstocked, and wages fall. Afterwards the demand revives, and perhaps becomes unusually brisk, enabling the manufacturer to sell his commodity even faster than he can produce it; his whole capital is then brought into complete efficiency, and if he is able, he borrows capital in addition, which would otherwise have gone into some other employment. At such times wages, in his particular occupation, rise. If we sup pose, what in strictness is not absolutely impossible, that one of these fits of briskness or of stagnation should affect all occupations at the same time, wages altogether might undergo a rise or a fall. These, however, are but temporary fluctuations; the capital, now lying idle, will next year be

in active employment; that which is this year unable to keep up with the demand will in its turn be locked up in crowded warehouses; and wages in these several departments will ebb and flow accordingly; but nothing can permanently alter general wages, except either an increase or a diminution of capital itself (always meaning by the term, the funds of all sorts, destined for the payment of labor) compared with the quantity of labor offering itself to be hired.

Again, it is another common notion, that high prices make high wages; because the producers and dealers, being better off, can afford to pay more to their laborers. I have already said that a brisk demand, which causes temporary high prices, causes also temporary high wages. But high prices, in themselves, can only raise wages if the dealers, receiving more, are induced to save more, and make an addition to their capital, or at least to their purchases of labor. This is, indeed, likely enough to be the case; and if the high prices came direct from heaven, or even from abroad, the laboring class might be benefited, not by the high prices themselves, but by the increase of capital occasioned by them. The same effect, however, is often attributed to a high price which is the result of restrictive laws, or which is in some way or other to be paid by the remaining members of the community; they having no greater means than before to pay it with. High prices of this sort, if they benefit one class of laborers, can only do so at the expense of others ; since if the dealers by receiving high prices are enabled to make greater "savings, or otherwise increase their purchases of labor, all other people by paying those high prices have their means of saving, or of purchasing labor, reduced in an equal degree ; and it is a matter of accident whether the one alteration or the other will have the greatest effect on the labor market. Wages will probably be temporarily higher in the employment in VOL. I.

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which prices have risen, and somewhat lower in other employments ; in which case, while the first half of the phenomenon excites notice, the other is generally overlooked, or if observed, is not ascribed to the cause which really produced it. Nor will the partial rise of wages last long; for though the dealers in that one employment gain more, it does not follow that there is room to employ a greater amount of savings in their own business; their increasing capital will probably flow over into other employments, and there counterbalance the diminution previously made in the demand for labor by the diminished savings of other classes.

Another opinion often maintained is, that wages vary with the price of food ; rising when it rises, and falling when it falls. This opinion is, I conceive, only partially true; and in so far as true, in no way affects the dependence of wages on the proportion between capital and labor ; since the price of food, when it affects wages at all, affects them through that law. Dear or cheap food caused by variety of seasons does not affect wages (unless they are artificially adjusted to it by law or charity ;) or rather, it has some tendency to affect them in the contrary way to that supposed; since in times of scarcity people generally work harder, and lower the labor market against themselves. But dearness or cheapness of food, when of a permanent character, and capable of being calculated on beforehand, may affect wages. In the first place, if the laborers have, as is often the case, no more than enough to keep them in working condition and enable them barely to support the ordinary number of children, it follows that if food grows permanently dearer without a rise of wages, a greater number of the children will prematurely die; and thus wages will ultimately be higher, but only because the number of people will be smaller, than if food had remained cheap. But, secondly, even though wages were high

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