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THE WAGES QUESTION.
CHAPTER I. WAGES A QUESTION IN THE DISTRIBUTION OF WEALTH.
All the questions of Political Economy may, both conveniently and appropriately, be grouped under four titles, namely, the Production, the Distribution, the Exchange, and the Consumption of Wealth. All wealth has, of course, to be produced, in the first place; and, moreover, it is produced to be consumed, and for this end alone. Production and Consumption, therefore, are concerned with the entire sum of wealth.
All wealth, however, is not exchanged'; nor is all wealth distributed. Exchange and Distribution, therefore, have not to deal with the entire sum of wealth. Nor is that part of wealth which is excluded from Exchange identical with that which is excluded from Distribution. Vast amounts of wealth are exchanged which are not distributed ; vast amounts are distributed which are not exchanged.
1 Not only is not, but could not be. I say this to meet the suggestion that wealth, though actually not exchanged, is yet always subject to exchange in the sense that, if that particular form of wealth were to rise, or some possible substitute for it in use were to fall markedly in price, exchange would then take place, so that such wealth should still be regarded as within the domain of exchange. But the state of facts assumed is not real. No matter how much rice might advance, or other food decline in price, no human power could take all the crop out of India and bring back a food-substitute to the people, even were it Liebig's extract. The whole transportation system of India, reinforced by the revenues of the British Government, broke down under the effort, in 1873–4, to distribute to the people of certain districts of India an amount of rice equivalent to but a small portion of their usual crop. The railroads and water-courses of the United States could not take all the crops from the farms where they were raised.
The term Production of Wealth does not need, for our present purposes, to be defined.
Consumption, in the economical sense, is the use of wealth. The actual destruction of wealth thereby may be total or partial, rapid or slow, according to the nature of the material and the object to which it is directed. The Consumption begins when the use begins.
“ That almost all that is produced is destroyed, is true; but we can not admit that it is produced for the purpose of being destroyed. It is produced for the purpose of being made use of. Its destruction is an incident to its use; not only not intended, but, as far as possible, avoided.”'
Wealth is exchanged, in the meaning of the political economist, when the producer and the consumer of it are different persons; and this, whether different persons have united in the production of it or not.
On the other hand, wealth must be distributed when dif. ferent persons (having separate legal interests) unite in production; and this, whether the product is to be ex. changed or not.
In illustration of the latter case, let us suppose that a dozen persons unite in a fishing venture, on equal or unequal shares. Upon their return the product is distributed—that is, divided into shares among them. It may be that each of the producers will desire all the fish thus falling to his share for his own immediate consumption, or to be salted down for winter use: then none of the product will be exchanged, though all of it has been subject to distribution.
Or, again, some of the fishermen may desire to sell the whole, others portions only, of their fish, in order to pur. chase articles more adapted to their necessities : then we should have a product distributed wholly and exchanged in part.
In illustration of the former case, let us take a small farmer, in the American sense of that term,' a peasant proprietor in the phrase of Europe, cultivating his land by his own labor and that of his minor children, and perhaps of his wife as well. The product here is not distributed, because it is all his, the children and, for that matter, the wife, having no separate interests legally, and the avails of their labor going entire to the father and husband. The product, therefore, not being divisible into shares representing the claims of different producers, Distribution is not concerned at all with it; yet a part of it, or the whole, may be exchanged. If the farm were situated in one of our North-eastern States, and the product were chiefly pork, corn, potatoes, and garden vegetables, the greater part would presumably go to the support of the family, and but little would be exchanged for other articles. If, on the
1" When we speak of an American farmer, we generally mean one who is the absolute owner of the land and every thing on it.”—T. Sedgwick, Pol. Econ., p. 54.
* It may be said that the father and husband is bound, both morally and legally, to support his wife and children out of the product ; and that the subsistence thus derived by them constitutes, in effect, their wages. To this it will be sufficient to answer, first, that the amount and character of that subsistence are not determined by contract between the parties, as in the case of what may properly be called wages, but, within the limits of the mere support of life, are wholly at the will and discretion of the head of the family, having no relation to what other persons, rendering the same character and amount of service, may be receiving next door ; and, second, which settles the question, that the head of the family is equally bound to supply subsistence whether the wife and children labor or not. In the case of children too young to labor, or of an invalid wife, the obligation of the head of the family, in respect to subsistence, is precisely the same.
other hand, it were situated in one of the Southern seaboard States, and the product were cotton, the whole of it, though not distributed, would be exchanged, being sold to purchase breadstuffs, clothing, West-India goods, etc.
Both the Exchange and the Distribution of Wealth may be, according to subject and circumstance, either simple and obvious, or effected through most complicated and roundabout processes. Thus, Exchange may take place in the form of direct barter between two neighbors, each giving some of what he has for some of what he wants; or it may involve the services of railroad, steamship, and ocean telegraph, with the mediation of importers, jobbers, wholesalers, and retailers.
In like manner, Distribution may take the form of a simple division of a product into two or three equal shares; or it may involve the partition of the annual avails of a factory among five hundred persons having claims upon the product, in shares varying from that of the nine-year-old “half-timer," working under the Factory acts, to that of the employer or the owner of the mill.
The distinction which I have sought here to illustrate between the Exchange and the Distribution of Wealth is not of importance in the general theory of political economy only, but it is of immediate application to the problem of Wages. I shall seek to showl that the fact that a large portion of the wealth produced is not distributed, while yet it is exchanged, may have a powerful influence on the condition of those classes who produce distributed wealth. In my opinion, one can no more explain all the phenomena of distribution without reference to the fact of a vast undistributed product, than one could explain the movement of the Gulf Stream without reference to the colder waters through which and over which it flows.
These brief remarks upon the scope of the four departments of Political Economy will be sufficiently connected with the special topic of this work by the remark that the question of Wages is a question in the Distribution of Wealth.
Now it is clear that in treating of the Production of Wealth we need to distinguish industrial functions ; and this the systematic writers have done with great success, and we have the laws of production developed early in the history of economical investigation with great completeness, little being left to be added by later writers.
But is it not equally clear that in treating of the Distribution of Wealth, we need to distinguish industrial classes, recognizing industrial functions only as they serve to characterize such classes? This the systematic writers in economics have generally failed to do; and I venture to think there is in this the explanation of the little progress made towards the settlement of the important questions in this department of the science.
Thus the political economist, having shown, by careful analysis and apt illustration, the parts taken in production by labor and by capital, carries the same classification forward into Distribution, and speaks of the shares of the product received by labor and by capital respectively. Now it does not follow at all, as a matter of course, that because labor and capital perform parts which can be clearly aistinguished in production, they will receive separate shares in the distribution of the product. That will depend on whether these functions are or are not united in the same persons. In the distribution of wealth, shares go to persons, who may be grouped in larger or smaller classes, having less or more in common. So far as the function performed in production may serve to characterize the industrial class, so far the function may be recognized in treating the questions of Distribution, but only so far. Beyond this it becomes as idle to refer in distribution to functions performed in production as it would be to seek