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that the industrial desires are constantly multiplying and intensifying among a people where political freedom and social ambition exist, such desires extending themselves rapidly even among new coiners or persons just released from thraldom; that decent and comfortable homes, with yards and gardens, schoolhouses and churches, may become just as "necessary" in such a community as food and drink; that parents in such a community will gladly deny themselves the wages their children might earn, in order to send them to school, and the husband gladly deny himself the wages his wife might earn, in order that she may "keep the house."1 When such desires and aspirations are once enkindled, any cheapening of the food of the people merely releases just so much wealth to be bestowed on-other and higher objects.

Let me not be understood as objecting to the proposition that the use of the potato by any people as the sole article of food is injurious and dangerous, but only as taking exception to the reason assigned therefor. It is because this crop is a most precarious one, and because the potato, while forming an admirable element in a diversified diet, is not fitted physiologically to be the sole nutriment of human beings, that its exclusive use is undesirable. So far as it is to be used, its cheapness is a recommendation; and if all other articles of food used with it could be cheapened to its level, it would be so much the better in any community where laws are free and education general. Given these, the native desires and aspirations of men will find objects enough1 on which to expend the labor which is released from the slavery of ministering to the merely animal necessities of the body. I say "slavery," for that labor is only truly free which is exercised as the result of a choice. So far as a man is driven by brutal hunger to work he differs not much from a slave; when he works because he chooses exertion rather than privation of things agreeable and honorable, his labor is that of the free man. CHAPTER YIIL

1 The proportion of breadwinners to dependants will of course varygreatly with the habits and dispositions of the people in the respects mentioned in the text.

The results of Cantillon's computations are thus stated by Adam Smith: "Mr. Cantillon seems to suppose that the lowest species of common laborers must everywhere earn at least double their own maintenance in order that, one with another, they may be enabled to bring up two children; the labor of the wife, on account of her necessary attendance on the children, being supposed no more than sufficient to provide for herself. But one half the children born, it is computed, die before the age of manhood. The poorest laborers, therefore, according to this account, must, one with another, attempt to rear at least four children in order that two may have an equal chance of living to that age. But the necessary maintenance of four children, it is supposed, may be nearly equal to that of one man."—Pol. Econ. i. 71. The rudeness of these computations appears on the face. In Belgium, in 1856, 49.3 per cent of the population were reported as pursuing gainful occupations; in the United States, in 1870, only 32.4 per cent; in England and Wales, in 1871, 51 per cent; in Scotland, 43.7 per cent.

1 Contrast the Swiss and the Russian. Consul Egerton reports that an incentive to labor is the great desideratum in Russia. "In the truly agricultural districts the peasant, earning enough for his wants during the summer months, remains idle throughout the winter."—Report of 1873 (Textile Factories), p. 92, note. So much for a land where the people are universally ignorant, and are despotically governed. In Switzerland, to the contrary, Mr. Gould reports, "Men who during the short tourist season frequently earn as guides, porters, etc., enough to keep themselves and their families in comfort during the remainder of the year, may nevertheless be seen in winter willingly exposing themselves to the severest hardships for the small sum of a franc or two a day."—Report on the Condition of the Industrial Classes, 1872, p. 346.


A Popular theory of wages, of which we shall have hereafter to speak, is based upon the -assumption that wages are paid out of capital, the saved results of the industry of the past. Hence, it is argued, capital must furnish the measure of wages. On the contrary, I hold that wages are, in a philosophical view of the subject, paid out of the product of present industry, and hence that production furnishes the true measure of wages. The difference may be found to be an important one; and I will therefore state the grounds of my belief.

An employer pays wages to purchase labo^ not to expend a fund of which he may be in possession. He purchases labor not because he desires to keep it employed, but as a means to the production of wealth. He produces wealth not for the sake of producing it, but with a view to a profit to himself, individually, in that production. Doubtless there is a satisfaction in conferring benefits on the dependent, a pride in directing great operations, an enthusiasm of work, which make up a part of the compensation of many employers; but it is evident that these can not be relied upon to any great extent as motives to the systematic and sustained production of wealth through wage-labor. Individual profit is, and must remain, the great reason for production. If a person have wealth, that of itself constitutes no reason at all to him why he should expend any portion of it on labor, on machinery, or on materials. It is only as he sees that he can increase that wealth through production that the impulse to employ it in those directions is felt. But for the profits by which he hopes thus to increase his store, it would be alike easier and safer for him to keep his wealth at rest than to put it in motion for the" benefit of others.

1 The substance of this and the following chapter appeared in the North American Review for January, 1875; art., The Wage-Fund, Theory.

It is true that an employer may for a time produce without profits, or even at a loss; but this will be for the sake of holding together his working force, or his body of customers, in the hope of better times when he can make himself good for present hardship, or because he has formed contracts or engagements which law or business-honor compel him to fill at any sacrifice. These cases do not constitute a substantial exception to the principle that the motive to the purchase of labor is found in the profits of production.

But again it is evident that an employer will be disposed to produce, within the limits of the agencies at his command, all that he can produce at a profit to himself. So long as additional profits are to be made by the employment of additional labor, so long a sufficient reason for production exists; when profit is no longer expected, the reason for production ceases. At this point the mere fact that the employer has capital at his command no more constitutes a reason why he should use it in production when he can get no profits, than the fact that the laborer has legs and arms constitutes a reason why he should work when he can get no wages.

We repeat, the employer purchases labor with a view to the product of the labor; and the kind and amount of that product determine what wages he can afford to pay. He must, in the long run, pay less than that product, less by a sum which is to constitute his own profits. If that product is to be greater, he can afford to pay more; if it is to be smaller, he must, for his own interest, pay less. It is, then, for the sake of future production that the laborers are employed, not at all because the employer has possession of a fund which he must disburse; and it is the value of the product, such as it is likely to prove, which determines the amount of the wages that can be paid, not at all the amount of wealth which the employer has in possession or can command. Thus it is production, not capital, which furnishes the motive for employment and the measure of wages.

But it may be said, we grant that wages are really paid out of the product of current industry, and that capital only affects wages as it first affects production, so that wages stand related to product in the first degree and to capital in the second degree only; still, does not production bear a certain and necessary ratio to capital? and hence may not the measure of wages be derived from capital virtually—though not, it is true, directly—through its determination of the product? By no means. It would be easy to adduce many successive reasons why capital bears no certain or constant ratio to production, but two will abundantly serve our turn.

(a) The ratio which capital bears to the product of industry varies, all other things remaining equal, with the scantiness or abundance of natural agents. One hundred laborers having the use of a capital which we will represent by 10a? may not, in one set of circumstances, be able to produce anywhere near twice as much as 50 laborers using the same amount of capital; or, under a different set of circumstances, they may be able to produce far more than twice as much. With unlimited natural agents, as in new countries like America and Australia, the 100 may, through the minuter subdivision of labor and the more effective co-operation which their numbers allow, produce twice as much as 50 with a capital of 12%, or as 60 with a capital

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