Principles of Political Economy Part 6

[Footnote 163-2: A case in Holstein, in which, in the first half of the eighteenth century, the serfs of a hard master conspired together not to marry, and thus soon forced him to sell his estate. (_Busch_, Darstellung der Handlung, V, 3, II.)]

[Footnote 163-3: On the otherwise remarkable economic advance in Ireland about 1750, see _Orrey_, Letters concerning the Life and Writings of Swift, 1751, 127; _Anderson_, Origin of Commerce, a., 1751.]

[Footnote 163-4: Compare especially _Malthus_, Principles, ch. 4, sec. 2. How little Adam Smith dreamt of this may be best seen in I, 115, Bas. Recently, the average wages per week amounted in England to 22s., in Scotland to 20s., in Ireland to 14s. (_Levi_, Wages and Earnings of the working Cla.s.ses, 1866.)]

[Footnote 163-5: Thus the unheard of long series of excellent harvests in England, between 1715 and 1765, contributed very largely to this favorable transformation.

Day wages expressed in wheat, between 1660 and 1719, amounted on an average to only about 2/3 of a peck; between 1720 and 1750, to an entire peck. In the fifteenth century, a similar series of good harvests contributed very much to the flourishing condition of the "yeomanry." Under Henry VII., workmen earned from two to three times as much corn as they did a century later. And so in France, the great Revolution at the end of the eighteenth century, by setting free a vast quant.i.ty of hitherto bound-up force, enhanced the productiveness of the entire economy of the nation, and made the division of the national income more nearly equal.

There is an essential connection here between the rapidity of the transition and the facts, that the habits of consumption of the working cla.s.s received a powerful impulse, and that population increased much less rapidly than the national income. Compare _John Stuart Mill_, Principles, II, ch. 11, 2. In our own days again, English workmen had a splendid opportunity to raise their standard of life. Emigration to Australia, etc. preponderated over the natural increase of population to such an extent that, in 1852, for instance, only 217,000 more human beings were born in England and Wales than died, and 368,000 emigrated.

At the same time, exports increased: in 1849, they were 63,000,000; in 1850 71,000,000; about the end of 1853, something like 90,000,000.

This golden opportunity was used by the English laboring cla.s.ses to both largely multiply marriages and to enhance the rate of wages. The number of marriages contracted in England yearly, from 1843 to 1847, was 136,200; from 1853 to 1857, 159,000. The number of births annually, from 1843 to 1847, was 544,800; from 1853 to 1857, 640,400. And wages, in a number of industries, rose, between 1839 and 1859, from about 18 to 24 per cent. (Quarterly Review, July, 1860, 86), while the prices of most of the necessaries of life declined. That, in the same time, the condition of English laborers was elevated, both intellectually and morally, is proved by many facts cited in _Jones' and Ludlow's_ work on the social and political condition of the laboring cla.s.ses in England. In Germany, the recent establishment of peace on a firm footing and the French war contributions have given the country an impulse which might be taken advantage of by the laboring cla.s.s with the happiest results if they would accustom themselves to more worthy wants and at the same time preserve their accustomed industry.]

[Footnote 163-6: The cheapening of the necessaries of life, experience shows, is more likely to lead to an increase of population; that of luxuries, to a raising of the standard of life or of comfort.]

SECTION CLXIV.

WAGES.--COST OF PRODUCTION OF LABOR.

As the cheapening of the means of subsistence, when the circle of wants of the laboring cla.s.s has not correspondingly increased, leads to a decline of wages, so an enhancement of their price must, when wages are already so low as only to be able to satisfy indispensable wants, produce an increase in the rate of wages. The transition in the former case is as pleasing as in the latter it is replete with the saddest crises.[164-1] The slower the rise in the price of the means of subsistence is, the more it is to be feared that the working cla.s.ses will seek to meet it, not by emigration or by a diminished number of marriages, but by decreasing the measure of their wants, the introduction of a poorer quality of food, etc.[164-2]

However, all this is true only of permanent changes in the average price of the means of subsistence, such as are produced, for instance, by the development of agriculture, by taxation etc. Transitory fluctuations, such as result, for instance, from a single good or bad harvest, cannot have this result.[164-3] It is, in poor countries at least, one of the worst effects of a bad harvest, that it tends to positively lower the rate of wages. A mult.i.tude of persons who would otherwise be able to purchase much labor are now deterred from doing so, by the enhancement of the price of food.[164-4] On the other hand, the supply increases: many men who before would not work even for money, see themselves now compelled to do so. Those who have been workmen hitherto are compelled by want to make still greater exertions.[164-5]

In very cheap years, all this is naturally reversed.[164-6]

[Footnote 164-1: According to _McCulloch_, Edition of _Adam Smith_, 472, the food of a day laborer's family const.i.tutes between 40 and 60 per cent. of their entire support. In the case of Prussian field hands, it is generally 54 per cent.

greatest in the province of Saxony, viz., 58 per cent. and lowest in Posen, 43 per cent. Compare _Rau_, Lehrbuch, I, -- 191. This may serve as a point of departure, from which to measure the influence of a given enhancement of the price of corn. In opposition to _Buchanan_ (Edition of _Adam Smith_, 1817, 59), who had denied the influence of the price of the means of subsistence on the rate of wages, see _Ricardo_, Principles, ch. 16.]

[Footnote 164-2: How easily English farmers have accustomed themselves to the consequences of momentary calamities, may be seen from _John Stuart Mill_, Principles, II, ch. 11, 5 seq.; _Thornton_, Population and its Remedy, 1846, pa.s.sim.

_Malthus_, Principles, sec. 8, shows in opposition to _Ricardo_, Principles, ch. 8, that it is not all one to the laboring cla.s.ses whether their wages rise while the price of the means of subsistence remains the same, or whether the rate of wages remaining nominally the same, the commodities to be purchased decline in price. If for instance, potato-food, physiologically considered, was just as good as flesh-food and wheat bread, yet an unmarried workman or a father with a number of children below the average would be able to save less from the former for the reason that it possesses less value in exchange. (Edinburg Rev., XII, 341.) Thus, e. g., in Ireland, between _A. Young_ and _Newenham_ (1778-1808), the rate of wages increased more than the price of potatoes, but all other means of subsistence in a still greater ratio. (_Newenham_, A view of Ireland, 1808.) Compare _Malthus_, On the Policy of Restricting the Importation of foreign Corn, 1815, 24 ff.; contra.

_Torrens_, on the Corn trade, 1820, 374 ff.]

[Footnote 164-3: Compare _Garve_ in _MacFarlan_, On Pauperism, 1785, 77. Thus, in the United States, the same quant.i.ties of coffee, leather, pork, rice, salt, sugar, cheese, tobacco, wool, etc., could be earned in 1836 by 23.5 days' labor; in 1840, by 20.75; in 1843, by 14.8; in 1864, by 34.6. (_Walker_, Science of Wealth, 256.)]

[Footnote 164-4: The person who formerly consumed perhaps four suits of clothes in a year now limits himself to two, and forces the tailor to dismiss one journeyman. In Bavaria, the dear times, 1846-47, and probably also the disturbances of 1848-49, caused officials, pensioners, annuitants and professional men to discharge one-tenth of the female domestics they employed in 1840. (_Hermann_, Staatsw.

Unters, II, Aufl., 467.)]

[Footnote 164-5: The labor of digging during the time of scarcity in England was paid one-third of the price usually paid in good years. (_Porter_, Progress of the Nation, III, 14, 454.) On the Slavic portions of Silesia, see _Hildebrand's_ Jahrb., 1872, I, 292. According to _Rogers_, I, 227 ff., 315 ff., and the table of prices in the appendix to _Eden_, State of the Poor, the price in England of a quarter of wheat and a day's wages was, in--

1287, 2s. 10d. 3d.

1315, 14s. 10-7/8d. 3d.

1316, 15s. 11-7/8d. 3-7/8d.

1392, 3s. 2-5/8d. 5d.

1407, 3s. 4d. 3d.

1439, 8s.-26s. 8d. 4d.

1466, 5s. 8d. 4-6d.

1505, 6s. 8d. 4d.

1575, 20s. 8d.

1590, 21s. 3-6d.

1600, 10d.]

[Footnote 164-6: _Petty_, Several Essays on Political Arithmetic, 133 ff. _Adam Smith_, Wealth of Nat., I, ch. 8.

_Ricardo_, Principles, ch. 9. In Hesse, in consequence of a series of many rich harvests from 1240 to 1247, no servants could be had at all, so that the n.o.bility and clergy were obliged to till their own lands. (_Anton_, Gesch. der deutschen Landwirthschaft, 111, 209.)]

SECTION CLXV.

WAGES.--THE DEMAND FOR LABOR.

The demand for labor, as for every other commodity, depends, on the one hand, on the value in use of it, and on the other, on the purchaser's capacity to pay for it (his solvability), These two elements determine the maximum limit of wages, as the means of support considered indispensable by the workmen determine the minimum. There are circ.u.mstances conceivable under which the rise in wages might entirely eat up rents; but there must always be a portion of the national income reserved to reward capital (its profit). If wages were to absorb the latter also, the mere owner of capital would cease to have any interest in the progress of production. Capital would then be withdrawn from employment and consumed.[165-1] Obviously, no man engaged in any enterprise can give more as wages to his workmen than their work is worth to him.[165-2] Hence the additional product in any branch of industry, due to the labor of the workman last employed, has a controlling influence on the rate of the wages which can be paid to his fellow workmen. If the additional products of the workmen successively last employed const.i.tute a diverging series,[165-3] the last term in the series is the natural expression of the unsurpa.s.sable maximum of wages; if they const.i.tute a converging series, men the employer can pay the last workman higher wages than the additional product due to him; provided, however, that the reduction which is to be expected in the case of the workmen previously employed to the same level still leaves him a sufficiently high rate of profit.[165-4] Hence the growing skill of a workman, in and of itself, makes an increase of his wages possible;[165-5] while, conversely, if he can be replaced by capital, which always relatively decreases the value in use of his labor, there is a consequent pressure on his wages.

[Footnote 165-1: _Storch_, Handbuch, I, 205 seq.]

[Footnote 165-2: Higher wages promised, for instance, as a reward for saving a human life or some other very precious thing in great danger of being destroyed. In the case of material production, labor is worth to the party engaged in the enterprise, at most, as much as the price of the product after the remaining cost of reproducing it is deducted.]

[Footnote 165-3: Possibly in consequence of a better division of labor or of some other advance made in the technic arts.]

[Footnote 165-4: Thus, for instance, in harvesting potatoes, if, after they have been ploughed up, only those nearest the surface are collected, a laborer can gather over thirty Prussian _scheffels_ in a day. But the fuller and completer the gathering of potatoes desired is, the smaller will be the product of one workman and of one day's labor. If, therefore, a man wants to gather even the last bushel in a potato field of 100 square rods, so much labor would be required to accomplish it that the workman would not gather enough to feed him during his work, to say nothing of supplying his other wants. Supposing that 100 _scheffels_ of potatoes had grown on 100 square rods, and that of these were harvested--

_When the number of _Then the additional yield men employed in obtained by the gathering them was_ last workman employed is_

4, 80 scheffels, 5, 86.6 " 6.6 scheffels.

6, 91 " 4.4 "

7, 94 " 3 "

8, 96 " 2 "

(_von Thunen_, Der isolirte Staat, II, 174 ff.)]

[Footnote 165-5: In Manchester, in 1828, the wages paid for spinning one pound of cotton yarn, No. 200, was 4s. 1d.; in 1831, only from 2s. 5d. to 2s. 8d. But, in the former year, the spinner worked with only 312 spools; in the latter, with 648; so that his wages increased in the ratio of 1274 to 1566. (_Senior_, Outlines.)]

SECTION CLXVI.

WAGES.--PRICE OF COMMON LABOR.

In the case of a commodity as universally desired as human labor is, the idea of the purchasers' capacity to pay (solvability) must be nearly commensurate with the national income, or to speak more correctly, with the world's income.[166-1] In regard to the different kinds of labor, and especially to common labor, it is evident that the different kinds of consumption require very different quant.i.ties of them. Here, therefore, we depend on the direction which national consumption takes, and this in turn is most intimately related to the distribution of the national income.[166-2] If all workmen were employed in nothing but the production of articles consumed by workmen, the rate of wages would be determined almost exclusively by the ratio between the number of the working population and the amount of the national income. But, if this were the case, landowners and capitalists would be obliged to live just as workmen do, and their highest luxury would have to consist in feeding idlers. (-- 226). The effect must be much the same, when the wealthy are exceedingly frugal and employ their savings as rapidly as possible in the employment of common home labor; while, on the other hand, the exportation of wheat, wood, and other articles, which the working cla.s.ses consume, in exchange for diamonds, lace, champagne, diminishes the efficient demand for common labor in a country.[166-3]

The a.s.sumption frequently made, that the demand for labor depends on the size of the national capital, is far from exact.[166-4] Thus, for instance, every transformation of circulating into fixed capital, especially when the labor used in effecting this transformation is ended, diminishes the demand for other labor. That principle is not unconditionally true, even in the case of circulating capital. Thus, for instance, the rate of wages is wont to be raised by the transfer of capital from such businesses as require little labor into such as require much.[166-5] Only that part of circulating capital can have any weight here which is intended, directly or indirectly, for the purchase of labor and for the purchase of each kind of labor in particular.[166-6]

The capital of the employer is, by no means, the real source[166-7] of the wages of even the workmen employed by him, It is only the immediate reservoir through which wages are paid out, until the purchasers of the commodities produced by that labor make good the advance, and thereby encourage the undertaker to purchase additional labor. Correlated to this is the fact, that other circ.u.mstances being the same, those workmen usually receive the highest wages who have to do most immediately with the consumer.[166-8]

[Footnote 166-1: _Senior_ denies this. Let us suppose that agriculture in Ireland employs on every 200 acres ten working men's families, one-half of whom are used to satisfy the aggregate wants of the working people, and the other half in the production of wheat to be exported to England.

If now the English market requires meat and wool instead of wheat, the Irish landowner will, perhaps, find it advantageous, of the ten laboring families, to employ one in stock raising, a second in obtaining food, etc. to support the laborers, and to discharge all the others. If, then, the increased net product is employed in the purchase of other Irish labor, all goes on well enough; but if, instead of this, the landowners should import articles of English manufacture, the demand for labor in Ireland would doubtless decrease, notwithstanding the increase of its income.

(Outlines, I, 154.) _Senior_ here overlooks two things: first, that in the supposed case, if eight-ninths of Irish laborers are thrown out of employment, spite of the increased income of the owners of landed estates, Ireland's national income is on the whole probably diminished (-- 146), and secondly, that, possibly, the demand for labor in England experiences a greater increase than the decrease in Ireland; since, with the addition to the world-income, there would be an increase in the world-demand for labor.]

[Footnote 166-2: Compare _Hermann_, Staatswirthsch.

Untersuch., 280 ff. Earlier yet, _Malthus_, Principle of Population, II, ch. 13.]

[Footnote 166-3: Thus, _Thomas More_, Utopia, 96, 197, thinks that if every one was industrious and engaged in only really useful business, no one would need to fatigue himself very much; while, as it is now, the few real laborers there are wear themselves out in the service of the vanity of the rich, are poorly fed and worked exceedingly hard.]