The legal minimum wage has been carried into effect in only four

states of our own country. It covers practically all the industries

employing women and minors in Oregon and Washington, all the working

women and girls of Utah, and the women and minors of a few trades in

Massachusetts. The rates established for experienced women vary from

$7.50 per week in Utah to ten dollars a week for some classes in

Washington. As the first wage determinations were put into effect only

in 1913, American experience has been too short as well as too narrow

to warrant certain conclusions. So far as it has been applied,

however, the legal minimum wage has been as successful in the United

States as in Australasia or Great Britain. All competent witnesses

agree that it has brought a considerable increase in wages to a

considerable proportion of the women and minors in the industries in

which it is operative, and that it has neither thrown any important

number of workers out of employment nor forced any important concern

out of business. Speaking of the three leading industries in which

minimum wages were first established in Washington, the Industrial

Welfare Commission of that state testifies: "Seldom has any piece of

legislation, in prospect, engendered so much discussion and so much

criticism, as did the minimum wage law, with the intricacies of its

ramifications touching almost every industry in the state, large or

small, and the family of nearly every wage earner; seldom, too, has

any law, in actuality, been so well received, its application been

accomplished with so little open opposition, and, for a law of this

character, has been attended with so little industrial disturbance as

that same minimum wage law. None of the dire predictions made prior to

the passage of the law have come about to an extent that questions the

general efficiency of the law. There has been no wholesale discharge

of women employés, no wholesale levelling of wages, no wholesale

replacing of higher paid workers by cheaper help, no tendency to make

the minimum the maximum, while the employers of the state in general

have been following the letter and spirit of the law, and aiding

greatly in its application.... The law, in other words, has advanced

the wages of practically sixty per cent. of the workers in these

industries, and has done it without serious opposition at a time when

business conditions were none too good."[253] The Bureau of Labour

Statistics of the United States investigated the operation of the

minimum wage in the mercantile establishments of Oregon at the end of

the first year. The conclusions of the investigators were in brief

that both the number and the proportion of women getting the legal

minimum ($9.25 per week) for adults had increased, that the proportion

obtaining more than this rate had likewise increased, that those who

had received a rise in remuneration did not show any decline in

efficiency, that women had not been displaced by men, and that the

average increase in the labour cost resulting from the advance in

wages was only three mills on each dollar of sales.[254] The effects

of the Utah law during the first year of its operation were summarised

by the Labour Commissioner, Mr. H. T. Haines, as follows: a rise in

the wages of a "number of women and girls who most needed the

additional sums of money"; increased efficiency of female workers

admitted by most employers; but few cases of women or girls utterly

deprived of employment by the law; none of the higher paid women

suffered a reduction in wages; and ninety per cent. of the employers

are satisfied with the minimum wage statute.[255] So far as the law

has been applied in Massachusetts, it seems to be relatively as

successful as in the other three states.[256]

_The Question of Constitutionality_

The principal reason why the minimum wage laws on the statute books of

the other seven states have not been carried into effect, is the

uncertainty of the validity of minimum wage legislation in our

constitutional system. In November, 1914, a district judge granted a

writ of injunction, restraining the Minimum Wage Commission of

Minnesota from enforcing their wage determinations, on the ground that

the law attempted to delegate legislative power, and that its

provisions violated that section of the fourteenth amendment to the

United States Constitution which forbids any state to deprive a person

of life, liberty, or property without due process of law. One of the

courts of Arkansas has taken substantially the same position. The

second objection urged by the Minnesota judge is probably much the

more serious of the two, and is the one upon which chief emphasis has

been laid in the briefs filed in various courts by the opponents of

minimum wage legislation. As regards labour legislation, "due process

of law" may be practically translated, "reasonable and necessary

exercise of the State's police power." And the police power means that

indefinite power of the State to legislate for the health, safety,

morals, and welfare of the community.[257] Now it is obvious that a

minimum wage law deprives both employer and employé of some liberty of

contract, and also that it virtually deprives the former of some

property, inasmuch as it generally increases his outlay for wages. On

the other hand, this restriction of liberty and equivalent diminution

of property seem to be carried out in harmony with due process of law,

since they constitute an exercise of the police power of the State on

behalf of the general welfare. Some months before the Minnesota judge

granted the writ of injunction against the enforcement of the minimum

wage law of that state, a lower court and the Supreme Court of Oregon

had pronounced the Oregon statute constitutional, as a legitimate

exercise of the police power. An appeal from this judgment was argued

in the Supreme Court of the United States, Dec. 17, 1914, but no

decision has yet (October, 1916) been rendered. Until the highest

court has spoken on the question of constitutionality, no state is

likely to take any further step toward establishing minimum wages.

Should the decision of the Supreme Court be unfavourable valid minimum

wage legislation will be impossible without an amendment of the United

States Constitution.[258]

_The Ethical and Political Aspects_

Whether it be considered from the viewpoint of ethics, politics, or

economics, the principle of the legal minimum wage is impregnable. The

State has not only the moral right but the moral duty to enact

legislation of this sort, whenever any important group of labourers

are receiving less than living wages. One of the elementary functions

and obligations of the State is to protect citizens in the enjoyment

of their natural rights; and the claim to a living wage is, as we have

seen, one of the natural rights of the person whose wages are his only

means of livelihood. Therefore, the establishment of minimum living

wages is not among the so-called "optional functions" of the State in

our present industrial society. Whenever it can be successfully

performed, it is a primary and necessary function. So far as political

propriety is concerned, the State may as reasonably be expected to

protect the citizen against the physical, mental, and moral injury

resulting from an unjust wage contract, as to safeguard his money

against the thief, his body against the bully, or his life against the

assassin. In all four cases the essential welfare of the individual

is injured or threatened through the abuse of superior force and

cunning. Inasmuch as the legal minimum wage is ethically legitimate,

the question of its enactment is, politically speaking, entirely a

question of expediency.

_The Economic Aspect_

Now the question of expediency is mainly economic. A great deal of

nonsense has been written and spoken about the alleged conflict

between the legal minimum wage and "economic law." Economists have

used no such language, indeed; for they know that economic laws are

merely the expected uniformities of social action in given

circumstances. The economists know that economic laws are no more

opposed to a legal minimum wage than to a legal eight hour day, or

legal regulations of safety and sanitation in work places. All three

of these measures tend to increase the cost of production, and

sometimes carry the tendency into reality. A minimum wage law is

difficult to enforce, but not much more so than most other labour

regulations. At any rate, the practical consideration is whether even

a partial enforcement of it will not result in a marked benefit to

great numbers of underpaid workers. It may throw some persons, the

slower workers, out of employment; but here, again, the important

question relates to the balance of good over evil for the majority of

those who are below the level of decent living. At every point,

therefore, the problem is one of concrete expediency, not of agreement

or disagreement with a real or imaginary economic law.

Some of those who oppose the device on the ground of expediency set up

an argument which runs about as follows: the increase in wages caused

by a minimum wage law will be shifted to the consumer in the form of

higher prices; this result will in turn lead to a falling off in the

demand for products; a lessened demand for goods means a reduced

demand for labour; and this implies a diminished volume of employment,

so that the last state of the workers becomes worse than the first.

Not only is this conception too simple, but it proves too much. If it

were correct every rise in wages, howsoever brought about, would be

ill advised; for every rise would set in motion the same fatal chain

of events. Voluntary increases of remuneration by employers would be

quite as futile as the efforts of a labour union. This is little more

than the old wages fund theory in a new dress. And it is no less

contrary to experience.

The argument is too simple because it is based upon an insufficient

analysis of the facts. There are no less than four sources from which

the increased wages required by a minimum wage law might in whole or

in part be obtained. In the first place, higher wages will often give

the workers both the physical capacity and the spirit that make

possible a larger output. Thus, they could themselves equivalently

provide a part at least of their additional remuneration. When,

secondly, the employer finds that labour is no longer so cheap that it

can be profitably used as a substitute for intelligent management,

better methods of production, and up to date machinery, he will be

compelled to introduce one or more of these improvements, and to

offset increased labour cost by increased managerial and mechanical

efficiency. This is what seems to have happened in the tailoring

industry of England. According to Mr. Tawney, "the increased costs of

production have, on the whole, been met by better organisation of work

and by better machinery."[259] In the third place, a part of the

increased wage cost can be defrayed out of profits, in two ways:

through a reduction in the profits of the majority of business

concerns in an industry; but more frequently through the elimination

of the less efficient, and the consequent increase in the volume of

business done by the more efficient. In the latter establishments the

additional outlay for wages might be fully neutralised by the

diminished managerial expenses and fixed charges per unit of product.

This elimination of unfit undertakers would not only be in the

direction of greater social efficiency, but in the interest of better

employment conditions generally; for it is the less competent

employers who are mainly responsible for the evil of "sweating," when

they strive to reduce the cost of production by the only method that

they know; that is, the oppression of labour. Should the three

foregoing factors fall short of providing or neutralising the

increased wages, the recourse would necessarily be to the fourth

source; namely, a rise in the price of products. However, there is no

definite reason for assuming that the rise will in any case be

sufficient to cause a net decrease of demand. In Oregon the increased

labour cost due to the minimum wage law amounted, as we have seen, to

only three mills per dollar of sales in mercantile establishments.

Even if this were all shifted to the consumer--something that is

practically impossible--it would be equivalent to an increase of only

three cents on each ten dollars' worth of purchases, and thirty cents

on each hundred. The reduction in sales on account of such a slight

rise in prices would be infinitesimal. In the case of possibly the

majority of products, the lessened demand on the part of the other

classes might be entirely counterbalanced by the increased demand at

the hands of the workers whose purchasing power had been raised

through the minimum wage law. The effect upon sales, and hence upon

business and production, which follows from an increase in the

effective consuming power of the labouring classes is frequently

ignored or underestimated. So far as consumers' goods are concerned,

it seems certain that a given addition to the income of the

wage-earning classes will lead to a greater increase in the demand

for products than an equal addition to the income of any other section

of the people.

Nevertheless, the possibility must be admitted of some diminution of

employment, owing to higher prices and decreased demand. And it is

certain that some workers would not be worth the legal minimum to

their employers. A part, but probably not all, of these could find

employment at a lower wage, through a system of permits for "slow

workers." Whatever the amount of unemployment resulting from both

these causes, it would undoubtedly be an evil of lesser magnitude than

that which at present follows from the under-payment of a majority of

the labouring population. And it could be remedied by two measures

which are in any case necessary for social welfare, and which would be

hastened by the establishment of a legal minimum wage. These are

adequate and scientific laws and institutions to deal with the general

problem of unemployment, and a comprehensive system of industrial and

vocational training.

These conclusions, then, seem to be justified: the economic objections

to a legal minimum wage are not essentially different from those that

may be urged against any other beneficial labour legislation; and they

have been sufficiently refuted by experience to throw the burden of

proof upon the objectors. Expediency suggests, however, that in the

United States the device should be applied gradually in two respects:

for a few years it ought to be confined to women and minors; and when

it is extended to men, the rates should approach the level of a

complete family living wage by stages, covering, say, three or four

years. The former restriction would enable the law to be carried

through its experimental stages with a minimum disturbance to industry

as a whole, and with a minimum of opposition, and the latter would

greatly reduce the danger of male unemployment.[260]

_Opinions of Economists_

When the present writer made an argument for the legal minimum wage

something more than ten years ago, he was able to find only one

American economist who had touched the subject, and the verdict of

that one was unfavourable.[261] A little over a year ago, Dr. John

O'Grady sent an inquiry to one hundred and sixty economists of the

United States to ascertain their opinions on the same subject. Of the

ninety-four who replied seventy were in favour of a minimum wage law

for women and minors, thirteen were opposed, and eleven were

non-committal; fifty-five favoured such legislation for men, twenty

were against it, and nineteen were disinclined to give a categorical

answer. About three-fourths of those who responded expressed the

opinion that the measure would tend to increase the efficiency both of

the workers and of methods of production.[262]

It is worthy of note that the nine members of the late Federal

Commission on Industrial Relations, although disagreeing widely and

variously on most other important questions and proposals, were all

favourable to a minimum wage law for women and minors.[263]

The most comprehensive and most searching criticism of the legal

minimum wage from the viewpoint of economic theory has been made by

Professor F. W. Taussig.[264] While he does not commit himself

definitely to the assertion that a universal minimum wage of, say,

eight dollars per week, would cause a notable amount of unemployment

among women, he regards this consequence as sufficiently probable to

indicate the "need of going slow in the regulation of women's wages."

Specifically, he would have public wage boards refrain from fixing the

minimum rates high enough to maintain women living away from home. His

final and only serious argument for this position relates to the

marginal effectiveness of women workers. He assumes that all "the

fitful, untrained, indifferent women are got rid of; that all who

offer themselves for work at the age of (say) eighteen years have had

an industrially helpful education,--" and then raises the question

whether all of them will be "able to get distinctly higher wages than

are now current."[265] Obviously the question is not serious unless it

contemplates the probability of unemployment for a _considerable

proportion_. If only one per cent. or less of the women should be

unable to find employment at the higher wages, the net social

advantage of the minimum wage device would be so obvious as to render

Professor Taussig's opposition quite unreasonable. Making the

assumptions quoted above from his pages, let us try to see whether his

apprehensions are economically justifiable.

If they are reasonable or probable they must rest on one of two

fundamental conditions: the occupations available to women are too few

to absorb all that would seek to become wage earners at eight dollars

per week; or a considerable section of them would be unable to produce

such a high wage. Possibly the first of these assumptions is true, but

neither Professor Taussig nor any other authority has presented

evidence to support it, and it is on the face of things not

sufficiently probable to justify hesitation in the advocacy of a

minimum living wage. If the second assumption be correct, if the

product of a considerable section of women (all adequately trained)

would be insufficient to yield them eight dollars per week, in

addition to the other costs of production, the conclusion is

inevitable that the same result would follow the attempt to pay all

male adults (likewise adequately trained) a family living wage of,

say, fifteen dollars per week. For the product of the average man does

not exceed that of the average woman by even as great a ratio as

fifteen to eight. If the average woman is not worth eight dollars a

week to an employer in any kind of woman's occupation, the average man

is not worth fifteen dollars. Therefore, we cannot hope, even with the

aid of a thorough system of industrial and vocational training, to

provide all adult males of average capacity with a family living wage

and the minimum means of living a reasonable life.

This is a veritable counsel of despair. It implies either that the law

of diminishing returns is already operating in this country in such a

way as to prevent the national product from being sufficiently large

to provide a minimum wage of fifteen dollars a week for men, and eight

dollars a week for women; or that the product, though ample for this

purpose, and for all the other necessary payments to the higher priced

workers and to the other agents of production, cannot under our

present industrial system be so distributed as to attain the desired

end. For the first of these hypotheses there is no evidence worthy of

the name. If Professor King is right in his estimate of an average

family income of 1494 dollars annually[266] the difficulty before us

does not lie in the field of production. Professor Taussig seems to

rest his fears on the second hypothesis, on the assumed impossibility

of bringing about the required distribution; for he points out that

increased efficiency of the workers may, like increased efficiency of

the material instrumentalities of production, in the long run redound

mainly to the benefit of the consumers, while wages may be little if

any above the old level. If these fears are justified, if the

difficulty is entirely one of the mechanism of distribution, and if it

cannot be overcome by legal enactment, then is our competitive

organisation of industry bankrupt, and the sooner we find out that

fact definitely the better. If the legal minimum wage will help to

expose such a situation, will show that, no matter how much the

productivity of the workers may be increased, a large proportion of

them must by the very nature of the competitive system be forever

condemned to live below the level of decent existence, then the

minimum wage is worth having merely as an instrument of economic

enlightenment.

Professor Taussig's argument and illustrations[267] seem to

contemplate a condition in which the number of women who become fitted

for a certain trade is excessive relatively to the demand for its

products, and to the supply of women in other industries. Were

industrial training thus misdirected, and were the trained persons

unable or unwilling to distribute themselves over other occupations,

they would, indeed, face precisely the same dilemma as do the

unskilled workers to-day. That is; a majority would be condemned to

insufficient wages, or a minority to unemployment. But we have been

assuming an _adequate_ system of industrial and vocational training, a

well-balanced system, one that would enable the workers to adjust

their supply to the demand throughout the various occupations. In

these conditions the economic axiom that a supply of goods is a demand

for goods should become beneficently effective: the workers should all

be able to find employment, and to obtain the greater part of their

increased product. Surely Professor Taussig does not mean to commit

himself to the view that every increase in the productive power of the

workers will in the long run help them only inasmuch as they are

consumers, the lion's share of the additional product being taken by

other classes. Probably such is the usual result in a régime of

unregulated competition, and unlimited freedom as regards the wage

contract. But this is precisely what we expect a minimum wage law to

correct and prevent. We rely upon this device to enable the workers to

retain for themselves that share of the product which under free

competition would automatically go to the non-labouring consumers. We

hope that blind and destructive economic force can be held in check by

deliberate and beneficent social control.

The fact of the matter seems to be that Professor Taussig's argument

is too hypothetical and conjectural to justify his pessimistic

conclusions. It is unpleasantly suggestive of the reasoning by which

the classical economists tried to show the English labourers the folly

and futility of trade unionism.

_Other Legislative Proposals_

The ideal standard of a minimum wage law is a scale of remuneration

adequate not only to the present needs of individuals and families,

but to savings for the contingencies of the future. Until such time as

the compensation of all labourers has been brought up to this level,

the State should make provision for cheap housing, and for insurance

against accidents, sickness, invalidity, old age, and unemployment.

The theory underlying such measures is that they would merely

supplement insufficient remuneration, and indirectly contribute to the

establishment of genuine living wages. In Europe, housing and

insurance legislation is so common that no reasonable and intelligent

person any longer questions the competency or propriety of such action

by the State.

If an adequate legal minimum wage, in the sense just defined, were

universally established, the State would not be required to do

anything further to effectuate wage justice, except in the matter of

vocational and industrial education. This would qualify practically

all persons to earn at least a living wage, and would enable those

who underwent unusual sacrifices either before or during their

employment to command something over and above. In other words, all

workers would then be able to obtain what we have called "the

equitable minimum." And the labouring class as a whole would possess

sufficient economic power to secure substantially all that was due by

any of the canons of distributive justice.

_Labour Unions_

The general benefits and achievements of labour organisations in the

United States down to the beginning of the present century, cannot be

more succinctly nor more authoritatively stated than in the words of

the United States Industrial Commission: "An overwhelming

preponderance of testimony before the Industrial Commission indicates

that the organisation of labour has resulted in a marked improvement

in the economic condition of the workers."[268] Some of the most

conspicuous and unquestionable proofs of rises in wages effected by

the unions are afforded by the building trades, the printing trades,

the coal mining industry, and the more skilled occupations on the

railroads. Between 1890 and 1907 wages increased considerably more in

the organised than in the unorganised trades.[269]

Nevertheless, when all due credit is given to the unions for their

part in augmenting the share of the product received by labour, there

remain two important obstacles which seriously lessen their efficacy

as a means of raising the wages of the underpaid.

The first is the fact that the unions still embrace only a small

portion of the total number of wage earners. According to Professor

Leo Wolman, a little more than twenty-seven million of the

thirty-eight million persons engaged in "gainful occupations" in the

United States in 1910 were wage earners in the ordinary sense of that

phrase, and of these twenty-seven million only 2,116,317, or 7.7 per

cent., were members of labour organisations.[270] The membership

to-day is about two and three quarter millions. If the total number of

wage earners increased between 1910 and 1916 at the same rate as

during the preceding decade, the organised portion is now somewhat

less than 7.7 per cent. of the whole. Evidently the labour unions have

not grown with sufficient rapidity, nor are they sufficiently powerful

to warrant the hope that they will be soon able to lift even a

majority of the underpaid workers to the level of living wage

conditions.

The second obstacle is the fact that only a small minority of the

members of labour unions are drawn from the unskilled and underpaid

classes, who stand most in need of organisation. The per cent. of

those getting less than living wages that is in the unions is almost

negligible. With the exception of a few industries, the unskilled and

the underpaid show very little tendency to increase notably their

organised proportion. The fundamental reason of this condition has

been well stated by John A. Hobson: "The great problem of poverty ...

resides in the conditions of the low-skilled workman. To live

industrially under the new order he must organise. He cannot organise

because he is so poor, so ignorant, so weak. Because he is not

organised he continues to be poor, ignorant, weak. Here is a great

dilemma, of which whoever shall have found the key will have done much

to solve the problem of poverty."[271]

The most effective and expeditious method of raising the wages of the

underpaid through organisation is by means of the "industrial," as

distinguished from the "trade," or "craft," union. In the former all

the trades of a given industry are united in one compact organisation,

while the latter includes only those who work at a certain trade or

occupation. For example: the United Mine Workers embrace all persons

employed in coal mines, from the most highly skilled to the lowest

grade of unspecialised labour; while the craft union is exemplified in

the engineers, firemen, conductors, switchmen, and other groups having

their separate organisations in the railroad industry. The industrial

union is as much concerned with the welfare of its unskilled as of its

skilled members, and exerts the whole of its organised force on behalf

of each and every group of workers throughout the industry which it

covers. The superior suitability of the industrial type of union to

the needs of the unskilled labourers is seen in the fact that more of

them are organised in the coal mining than in any other industry, and

have received greater benefits from organisation than their unskilled

fellow workers in any other industry. Were the various classes of

railway employés combined in one union, instead of being organised

along the lines of their separate crafts, it is quite improbable that

the unskilled majority would be getting, as they now are getting, less

than living wages. While it is true that the various craft unions in

an industry are often federated into a comprehensive association, the

bond uniting them is not nearly so close, nor so helpful to the weaker

groups of workers as in the case of the industrial unions.

Human nature being what it is, however, the members of the skilled

crafts cannot all be induced or compelled to adopt the industrial type

of organisation. The Knights of Labour attempted to accomplish this,

and for a time enjoyed a considerable measure of success, but in the

end the organisation was unable to withstand those fundamental

inclinations which impel men to prefer the more narrow, homogeneous,

and exclusive type of association. The skilled workers refused to

merge their local and craft interests in the wider interests of men

with whom they had no strong nor immediate bonds of sympathy. Among

labourers, as well as among other persons, the capacity for altruism

is limited by distance in space and occupational condition. The

passion for distinction likewise affects the wage earner, impelling

the higher groups consciously or unconsciously to oppose association

that tends to break down the barrier of superiority. Owing to their

greater resources and greater scarcity, the skilled members of an

industrial union are less dependent upon the assistance of the

unskilled than the latter are dependent upon the former; yet the

skilled membership is always in a minority, and therefore in danger of

being subordinated to the interests of the unskilled majority.

For these and many other reasons it is quite improbable that the

majority of union labourers can be amalgamated into industrial unions

in the near future. The most that can be expected is that the various

occupational unions within each industry should become federated in a

more compact and effective way than now prevails, thus conserving the

main advantages of the local and craft association, while assuring to

the unskilled workers some of the benefits of the industrial union.

_Organisation Versus Legislation_

In the opinion of some labour leaders, the underpaid workers should

place their entire reliance upon organisation. The arguments for this

position are mainly based upon three contentions: it is better that

men should do things for themselves than to call in the intervention

of the State; if the workers secure living wages by law they will be

less likely to organise, or to remain efficiently organised; and if

the State fixes a minimum wage it may some day decide to fix a

maximum.

Within certain limits the first of these propositions is

incontestable. The self education, self reliance, and other

experiences obtained by the workers through an organised struggle for

improvements of any kind, are too valuable to be lightly passed over

for the sake of the easier method of State assistance. Indeed, it

would be better to accept somewhat less, or to wait somewhat longer,

in order that the advantages might be secured through organisation.

However, these hypotheses are not verified as regards the minimum wage

problem. The legal method promises with a high degree of probability

to bring about universal living wages within ten or fifteen years. The

champions of organisation can point to no solid reasons for indulging

the hope that their method would achieve the same result within a half

a century. Therefore, the advantages of the device of organisation are

much more than neutralised by its disadvantages.

The fear that the devotion of the workers to the union would decline

as soon as living wages had been secured by law, seems to have no

adequate basis either in experience or in probability. Speaking of the

establishment of minimum wages in the tailoring industry of Great

Britain, Mr. Tawney declares that it "has given an impetus to trade

unionism among both men and women. The membership of the societies

connected with the tailoring trade has increased, and in several

districts the trade unions have secured agreements fixing the standard

rate considerably above the minimum contained in the Trade Board's

determination."[272] Similar testimony comes from Australasia. Indeed,

this is precisely what we should be inclined to expect; for the

workers whose wages had been raised would for the first time possess

the money and the courage to support unions; and would have sufficient

incentives thereto in the natural desire to obtain something more than

the legal minimum, and in the realisation that organisation was

necessary to give them a voice in the determination of the minimum,

and to enable them to co-operate in compelling its enforcement.

Indeed, general experience shows that organisation becomes normally

efficient and produces its best results only among workers who have

already approximated the level of living wages.

To be sure, the State could set up maximum instead of minimum

wages,--if the employing classes were sufficiently powerful. But all

indications point to a decline rather than an increase in their

political influence, and to a corresponding expansion in the

governmental influence of the labouring classes and their

sympathisers. Moreover, the labour leaders who urge this objection are

inconsistent, inasmuch as they advocate other beneficial labour

legislation. The distinction which they profess to find between laws

that merely remove unfair legal and judicial disabilities and laws

that reduce the length of the working day or fix minimum wages, has no

importance in practical politics or in the mind of the average

legislature. If the political influence of labour should ever become

so weak and that of capital so strong as to make restrictive labour

legislation generally feasible, legislators would not confine their

unfriendly action to the field of positive measures. They would be

quite as ready to pass a law prohibiting strikes as to enact a statute

fixing maximum wages. The formal legalisation of strikes, picketing,

and the primary boycott which is contained in the Clayton Act, and for

which the labour unions worked long and patiently, could conceivably

be seized upon by some future unfriendly Congress as a precedent and

provocation for legislation which would not only repeal all the

favourable provisions of the Clayton Act, but subject labour to

entirely new and far more odious restraints and interferences. The

fact that governments passed maximum wage laws in the past is utterly

irrelevant to the question of wage legislation to-day. A legal minimum

wage, and a multitude of other protective labour laws are desirable

and wise in the twentieth century for the simple reason that labour

and the friends of labour are sufficiently powerful to utilise this

method, and because their influence seems destined to increase rather

than decrease. The contrary hypothesis is too improbable for serious

consideration.

The conclusions that seem justified by a comprehensive and critical

view of all the facts of the situation, are that organisation is not

of itself an adequate means of bringing about living wages for the

underpaid, but that it ought nevertheless to be promoted and extended

among these classes, not only for its direct effect upon wages, but

for its bearing upon legislation. The method of organisation and the

method of legislation are not only not mutually opposed, but are in a

very natural and practical manner complementary.

_Participation in Capital Ownership_

While those workers whose remuneration is below the level of decent

maintenance are not ordinarily in a position to become owners of any

kind of capital, many of them, especially among the unmarried men, can

accumulate savings by making large sacrifices. As a matter of fact,

hundreds of thousands of the underpaid have become interest receivers

through the medium of savings banks, real estate possessions, and

insurance policies. Every effort in this direction is distinctly worth

while, and deserving of encouragement. Labourers who are above the

minimum wage level can, of course, save much larger amounts, and with

less sacrifices than the underpaid classes. In all cases the main

desideratum is that the workers should derive some income from

capital; but it is almost equally important that their capital

ownership should wherever possible take the form of shares in the

industry in which they are employed, or the store at which they buy

their goods. This means co-operative production and co-operative

distribution. The general benefits of the co-operative enterprise

have already been described in chapter xiv. For the wage earner

proprietorship in a co-operative concern is preferable to any other

kind of capital ownership because of the training that it affords in

business management and responsibility, in industrial democracy, and

in the capacity to subordinate his immediate and selfish interests to

his more remote and larger welfare.

Co-operative ownership of the tools with which men work has advantages

of its own over co-operative ownership of the stores from which they

made their purchases, inasmuch as it increases their control over the

conditions of employment, and gives them incentives to efficiency

which results in a larger social product and a larger share thereof

for themselves. As already pointed out in chapter xiv, the ideal type

of productive co-operation is that known as the "perfect" form, in

which the workers are the exclusive owners of the concern where they

exercise their labour. Nevertheless, the "federal" type, in which the

productive concern is directly owned by a wholesale co-operative,

indirectly by the retail co-operative store, and ultimately by the

co-operative consumers,--presents one important advantage. It could be

so modified as to enable the employés of the productive enterprise to

share the ownership of the latter with the wholesale establishment.

Such an arrangement would at once give the workers the benefits of

productive co-operation mentioned above, and render probable a

satisfactory adjustment of the conflicting claims of producers and

consumers. As intimated in chapter xxiv, such a conflict is inherent

in every system of industrial organisation, and will become more

evident and more acute in proportion to the strengthening of the

position of labour.

A final reason for ownership of capital by labour deserves mention

here, even though it has no immediate bearing upon the question of

remuneration. Were all labourers receiving the full measure of wages

to which they are entitled by the canons of distributive justice, it

would still be highly desirable that the majority if not all of them

should possess some capital, preferably in the productive and

distributive concerns in which they were immediately interested. It

does not seem probable that our economic system as now constituted,

with the capital owners and the capital operators for the most part in

two distinct classes, will be the final form of industrial

organisation. Particularly does this arrangement seem undesirable,

incongruous, and unstable in a society whose political form is that of

democracy. Ultimately the workers must become not merely wage earners

but capitalists. Any other system will always contain and develop the

seeds of social discontent and social disorder.

REFERENCES ON SECTION IV

ADAMS AND SUMNER: Labour Problems. Macmillan; 1905.

COMMONS AND ANDREWS: Principles of Labour Legislation.

Harpers; 1916.

WALKER: The Wages Question. New York; 1876.

RYAN: A Living Wage. Macmillan; 1906.

SNOWDEN: The Living Wage. London; Hodder & Stoughton.

O'GRADY: A Legal Minimum Wage. Washington; 1915.

BRODA: La Fixation Légale des Salaires. Paris; 1912.

N. Y. FACTORY INVESTIGATING COMMISSION. Appendix to Vol. III.

TAWNEY: Minimum Rates in the Chain-Making Industry. London;

1914.

Minimum Rates in the Tailoring Industry. London; 1915.

TURMAN: Le Catholicisme Social. Paris; 1900.

POTTIER: De Jure et Justitia. Liege; 1900.

POLIER: L'Idée du Juste Salaire. Paris; 1903.

MENGER: The Right to the Whole Produce of Labour. London;

1899.

GARRIGUET: Régime du Travail. Paris; 1908.

NEARING: Reducing the Cost of Living. Philadelphia; 1914.

CHAPIN: The Standard of Living in New York City. New York;

1909.

Also the works on co-operation cited in connection with

Section II, and those of Hobson, Carver, Nearing and

Streightoff.

FOOTNOTES:

[251] See articles by Hammond in the _American Economic Review_, June,

1913, and in the _Annals of the American Academy of Political and

Social Science_, July, 1913; and page 62 of the Appendix to the third

volume of the Report of the New York State Factory Investigating

Commission.

[252] See the replies of the London Board of Trade to the N. Y.

Factory Investigating Commission, on pages 77, 78 of the volume cited

above; and especially the two monographs by R. H. Tawney, "The

Establishment of Minimum Rates in the Chain-Making Industry," and "The

Establishment of Minimum Rates in the Tailoring Industry." London;

1914 and 1915.

[253] "First Biennial Report of the Industrial Welfare Commission of

Washington," pp. 13, 15.

[254] "Effect of Minimum Wage Determinations in Oregon." Bulletin No.

176 of United States Bureau of Labour Statistics.

[255] From a paper read before the National Convention of the

Association of Government Labour Officials, Nashville, Tenn., June 9,

1914.

[256] See Bulletins of Massachusetts Minimum Wage Commission.

[257] See the excellent and varied series of papers on the subject in

Orth's "The Relation of Government to Property and Industry," pp.

103-178. Ginn & Company; 1915.

[258] The arguments for and against the constitutionality of a legal

minimum wage are adequately presented in the briefs, respectively, of

Louis D. Brandeis and Rome G. Brown, in the cases of Stettler _vs._

O'Hara and Simpson _vs._ O'Hara. The former is published by the

National Consumers' League, New York, and the latter by the Review

Publishing Company, Minneapolis.

[259] "Minimum Rates in the Tailoring Industry," p. 161.

[260] One of the best statements of the economic aspect of the minimum

wage is that by Sidney Webb, in the _Journal of Political Economy_,

Dec., 1912. Probably the most varied and comprehensive general

discussion is the symposium in the _Survey_, Feb. 6, 1915. See

especially the excellent presentation in Commons and Andrews'

"Principles of Labour Legislation," pp. 167-200.

[261] See pages 303, 304 of "A Living Wage"; Macmillan, 1906.

[262] O'Grady, "A Legal Minimum Wage"; Washington, 1915.

[263] "Final Report," pp. 101, 255, 364.

[264] _The Quarterly Journal of Economics_, May, 1916. A somewhat less

unfavourable criticism is contained in the paper by Professor John

Bates Clark in the _Atlantic Monthly_, September, 1913.

[265] Page 436.

[266] "The Wealth and Income of the People of the United States," p.

129.

[267] Page 437.

[268] "Final Report," p. 802. Washington, 1902.

[269] See article by Professor Commons in "The New Encyclopedia of

Social Reform," p. 1233.

[270] _The Quarterly Journal of Economics_, May, 1916, p. 502.

[271] "Problems of Poverty," p. 227. London, 1891.

[272] "Minimum Rates in the Tailoring Industry," p. 96.

CHAPTER XXVI

SUMMARY AND CONCLUSION

Throughout this book we have been concerned with a two-fold problem:

to apply the principles of justice to the workings of the present

distributive system, and to point out the modifications of the system

that seemed to promise a larger measure of actual justice. The

mechanism of distribution was described in the introductory chapter as

apportioning the national product among the four classes that

contribute the necessary factors to the process of production, and the

first part of the problem was stated as that of ascertaining the size

of the share which ought to go to each of these classes.

_The Landowner and Rent_

We began this inquiry with the landowner and his share of the product,

i.e., rent. We found that private ownership of land has prevailed

throughout the world with practical universality ever since men began

to till the soil in settled communities. The arguments of Henry George

against the justice of the institution are invalid because they do not

prove that labour is the only title of property, nor that men's equal

rights to the earth are incompatible with private landownership, nor

that the so-called social production of land values confers upon the

community a right to rent. Private ownership is not only socially

preferable to the Socialist and the Single Tax systems of land tenure,

but it is, as compared with Socialism certainly, and as compared with

the Single Tax probably, among man's natural rights. On the other

hand, the landowner's right to take rent is no stronger than the

capitalist's right to take interest; and in any case it is inferior to

the right of the tenant to a decent livelihood, and of the employé to

a living wage.

Nevertheless, the present system of land tenure is not perfect. Its

principal defects are: the promotion of certain monopolies, as,

anthracite coal, steel, natural gas, petroleum, water power, and

lumber; the diversion of excessive gains to landowners, as indicated

by the recent great increases in the value of land, and the very large

holdings by individuals and corporations; and the exclusion of large

masses of men from the land because the owners will not sell it at its

present economic value. The remedies for these evils fall mainly under

the heads of ownership and taxation. All mineral, timber, gas, oil,

grazing, and water-power lands that are now publicly owned, should

remain the property of the states and the nation, and be brought into

use through a system of leases to private individuals and

corporations. Cities should purchase land, and lease it for long

periods to persons who wish to erect business buildings and dwellings.

By means of taxation the State might appropriate the future increases

of land values, subject to the reimbursement of private owners for

resulting decreases in value; and it could transfer the taxes on

improvements and personal property to land, provided that the process

were sufficiently gradual to prevent any substantial decline in land

values. In some cases the State might hasten the dissolution of

exceptionally large and valuable estates through the imposition of a

supertax.

_The Capitalist and Interest_

The Socialist contention that the labourer has a right to the entire

product of industry, and therefore that the capitalist has no right to

interest, is invalid unless the former alleged right can be

effectuated in a reasonable scheme of distribution; and we know that

the contemplated Socialist scheme is impracticable. Nevertheless, the

refutation of the Socialist position does not automatically prove that

the capitalist has a right to take interest. Of the titles ordinarily

alleged in support of such a right, productivity and service are

inconclusive, while abstinence is valid only in the case of those

capital owners to whom interest was a necessary inducement for saving.

Since it is uncertain whether sufficient capital would be provided

without interest, and since the legal suppression of interest is

impracticable, the State is justified in permitting the practice of

taking interest. But this legal permission does not justify the

individual interest-receiver. His main and sufficient justification is

to be found in the presumptive title which arises out of possession,

in the absence of any adverse claimant with a stronger title to this

particular share of the product.

The only available methods of lessening the burden of interest are a

reduction in the rate, and a wider diffusion of capital through

co-operative enterprise. Of these the former presents no definite or

considerable reasons for hope, either through the rapid increase of

capital or the inevitable extension of the industrial function of

government. The second proposal contains great possibilities of

betterment in the fields of banking, agriculture, stores, and

manufacture. Through co-operation the weaker farmers, merchants, and

consumers can do business and obtain goods at lower costs, and save

money for investment with greater facility, while the labourers can

slowly but surely become capitalists and interest-receivers, as well

as employés and wage-receivers.

_The Business Man and Profits_

Just remuneration for the active agents of production, whether they be

directors of industry or employés, depends fundamentally upon five

canons of distribution; namely, needs, efforts and sacrifices,

productivity, scarcity, and human welfare. In the light of these

principles it is evident that business men who use fair methods in

competitive conditions, have a right to all the profits that they can

obtain. On the other hand, no business man has a strict right to a

minimum living profit, since that would imply an obligation on the

part of consumers to support superfluous and inefficient directors of

industry. Those who possess a monopoly of their products or

commodities have no right to more than the prevailing or competitive

rate of interest on their capital, though they have the same right as

competitive business men to any surplus gains that may be due to

superior efficiency. The principal unfair methods of competition; that

is, discriminative underselling, exclusive-selling contracts, and

discrimination in transportation, are all unjust.

The remedies for unjust profits are to be found mainly in the action

of government. The State should either own and operate all natural

monopolies, or so regulate their charges that the owners would obtain

only the competitive rate of interest on the actual investment, and

only such surplus gains as are clearly due to superior efficiency. It

should prevent artificial monopolies from practising extortion toward

either consumers or competitors. Should the method of dissolution

prove inadequate to this end, the State ought to fix maximum prices.

Inasmuch as overcapitalisation has frequently enabled monopolistic

concerns to obtain unjust profits, and always presents a strong

temptation in this direction, it should be legally prohibited. A

considerable part of the excessive profits already accumulated can be

subjected to a better distribution by progressive income and

inheritance taxes. Finally, the possessors of large fortunes and

incomes could help to bring about a more equitable distribution by

voluntarily complying with the Christian duty of bestowing their

superfluous goods upon needy persons and objects.

_The Labourer and Wages_

None of the theories of fair wages that have been examined under the

heads of "the prevailing rate," "exchange-equivalence," or

"productivity" is in full harmony with the principles of justice. The

minimum of wage justice can, however, be described with sufficient

definiteness and certainty. The adult male labourer has a right to a

wage sufficient to provide himself and family with a decent

livelihood, and the adult female has a right to remuneration that will

enable her to live decently as a self supporting individual. At the

basis of this right are three ethical principles: all persons are

equal in their inherent claims upon the bounty of nature; this general

right of access to the earth becomes concretely valid through the

expenditure of useful labour; and those persons who are in control of

the goods and opportunities of the earth are morally bound to permit

access thereto on reasonable terms by all who are willing to work. In

the case of the labourer, this right of reasonable access can be

effectuated only through a living wage. The obligation of paying this

wage falls upon the employer because of his function in the industrial

organism. And the labourer's right to a living wage is morally

superior to the employer's right to interest on his capital. Labourers

who put forth unusual efforts or make unusual sacrifices have a right

to a proportionate excess over living wages, and those who are

exceptionally productive or exceptionally scarce have a right to the

extra compensation that goes to them under the operation of

competition. Labourers who are receiving the "equitable minimum"

described in the last sentence have a right to still higher wages at

the expense of the capitalist and the consumer, if they can secure

them through the processes of competition; for the additional amount

is an ethically unassigned or ownerless property which may be taken

by either labourer, capitalist, or consumer, provided that there is

no artificial limitation of supply.

The methods of increasing wages are mainly three: a minimum wage by

law, labour unions, and co-operative enterprise. The first has been

fairly well approved by experience, and is in no wise contrary to the

principles of either ethics, politics, or economics. The second has

likewise been vindicated in practice, though it is of only small

efficacy in the case of those workers who are receiving less than

living wages. The third would enable labourers to supplement their

wage incomes by interest incomes, and would render our industrial

system more stable by giving the workers an influential voice in the

conditions of employment, and laying the foundation of that

contentment and conservatism which arise naturally out of the

possession of property.

As a matter of convenience, the foregoing paragraphs may be further

summarised in the following abridgment: The landowner has a right to

all the economic rent, modified by the right of his tenants and

employés to a decent livelihood, and by the right of the State to levy

taxes which do not substantially lower the value of the land. The

capitalist has a right to the prevailing rate of interest, modified by

the right of his employés to the "equitable minimum" of wages. The

business man in competitive conditions has a right to all the profits

that he can obtain, but corporations possessing a monopoly have no

right to unusual gains except those due to unusual efficiency. The

labourer has a right to living wages, and to as much more as he can

get by competition with the other agents of production and with his

fellow labourers.

_Concluding Observations_

No doubt many of those who have taken up this volume with the

expectation of finding therein a satisfactory formula of distributive

justice, and who have patiently followed the discussion to the end,

are disappointed and dissatisfied at the final conclusions. Both the

particular applications of the rules of justice and the proposals for

reform, must have seemed complex and indefinite. They are not nearly

so simple and definite as the principles of Socialism or the Single

Tax. And yet, there is no escape from these limitations. Neither the

principles of industrial justice nor the constitution of our

socio-economic system is simple. Therefore, it is impossible to give

our ethical conclusions anything like mathematical accuracy. The only

claim that is made for the discussion is that the moral judgments are

fairly reasonable, and the proposed remedies fairly efficacious. When

both have been realised in practice, the next step in the direction of

wider distributive justice will be much clearer than it is to-day.

Although the attainment of greater justice in distribution is the

primary and most urgent need of our time, it is not the only one that

is of great importance. No conceivable method of distributing the

present national product would provide every family with the means of

supporting an automobile, or any equivalent symbol of comfort. Indeed,

there are indications that the present amount of product per capita

cannot long be maintained without better conservation of our natural

resources, the abandonment of our national habits of wastefulness,

more scientific methods of soil cultivation, and vastly greater

efficiency on the part of both capital and labour. Nor is this all.

Neither just distribution, nor increased production, nor both

combined, will insure a stable and satisfactory social order without a

considerable change in human hearts and ideals. The rich must cease to

put their faith in material things, and rise to a simpler and saner

plane of living; the middle classes and the poor must give up their

envy and snobbish imitation of the false and degrading standards of

the opulent classes; and all must learn the elementary lesson that

the path to achievements worth while leads through the field of hard

and honest labour, not of lucky "deals" or gouging of the neighbour,

and that the only life worth living is that in which one's cherished

wants are few, simple, and noble. For the adoption and pursuit of

these ideals the most necessary requisite is a revival of genuine

religion.

INDEX

Abstinence: as a title to interest, 182-186.

Adams, T. S.: 301, 302.

Adam Smith: 331, 341.

Agriculture: co-operation in, 217-220.

Alaska: leasing system in, 96.

Altruism: efficacy of under Socialism, 165-167;

promoted by co-operation, 229.

Ambrose, Saint: 305.

American Sugar Refining Company: 267, 272, 289.

American Tobacco Company: 263, 267, 288.

Analogy: economic, as justifying interest, 205, 206.

Anthracite coal: a monopoly, 75, 78, 95, 132.

Antoine, Charles: 337-340.

Antoninus, Saint: 270.

Aquinas, Saint Thomas: 63, 64, 175, 181, 208, 304, 306, 307, 333.

Arbitration: failure of, 324.

Ashley, W. J.: 9.

Astor estate: 88, 89.

Augustine, Saint: 305.

Australasia: special land taxes in, 118-120, 131;

minimum wage in, 401, 402.

Authorities: Catholic and Protestant, on living wage, 277, 278.

Basil, Saint: 305.

Bible, the: on the duty of benevolence, 303, 304, 316, 317.

Brandeis, Louis D.: 265, 275.

Business man: functions and rewards of, 237-239, 255-258;

no right of to minimum profits, 258-260, 362, 363;

the superfluous, 260, 261.

Canada: special land taxes in, 117-120.

Canonist: doctrine of wage justice, 333-336.

Canons of distributive justice: 243-253.

Capital: meaning of, 137, 138;

power of to create value, 146-148;

Catholic teaching concerning interest on, 175-177;

titles of to interest, 177-186;

value of in a no-interest régime, 188-190;

need for a wider distribution of, 213, 214;

need for ownership of by labour, 214, 229, 230.

Capitalists: two kinds of, 138;

expropriation of, 154-158;

right of to take interest, 201-209;

claims of, versus claims of labourers, 367-369, 390-393, 396.

Carnegie, Andrew: 300.

Carver, T. N.: 351-355.

Catholic Church: attitude of toward interest, 172-176.

Child workers: right of to a living wage, 373.

Christian conception of welfare: 316-318.

Clark, J. B.: 271, 347-351.

Compensation: to landowners, 34-39;

to capitalists under Socialism, 154-158.

Competition: alleged failure of, 275-278.

Confiscation: of land values under the Single Tax, 34-39;

of capital under Socialism, 154-158;

of wealth by taxation, 297, 298.

Constitutionality of minimum wage laws: 405-407.

Consumer: injury to through stockwatering, 282-288;

obligations of to business man, 258, 259, 362, 363;

versus labourer, 393-398.

Contract: onerous, 326;

free, as a rule of wage justice, 328-330, 370-372.

Co-operation: as a partial solvent of capitalism, 210-233;

essence and kinds of, 214, 215;

in banking, 216, 217;

in agriculture, 217-220;

in stores, 220-222;

in production, 222-228;

effect of on social stability, 229, 230;

as compared with individualism and Socialism, 230, 231;

province and limitations of, 231-233;

bearing of on the superfluous business man, 260, 261;

and on the labouring classes, 423-425.

Co-partnership: 223, 224.

Corporation: profits of a, 241, 242, 257, 258, 262, 389.

Cost of living: 378, 379.

Cost of production: of capital, 188, 189.

Credit societies: co-operative, 216, 217.

Defects of our land system: 74-93;

monopoly, 75-80;

excessive gains, 80-89;

exclusion, 90-93.

Devas, Charles: 184.

Disagreeable tasks: 384, 385.

Dixon, F. H.: 323.

Discriminative transportation contracts: 272, 273.

Discriminative underselling: 267-270.

Distribution of superfluous wealth: 303-319.

Distributive justice: canons of, 243-253, 381, 382.

Earth: right of access to, 358-360.

Economic determinism: inconsistent with ethical judgments, 20, 145,

146, 343, 344.

Efficiency: monopolistic, 265-267, 275-277, 279;

exceptional, 388-390.

Efforts: exceptional, as claim to rewards, 382-383.

Efforts and sacrifices: as canons of distribution, 245-247.

Ely, R. T.: 330.

Employer: gains of from wage contract, 327, 328;

obligation of to pay a living wage, 365-372.

Engels, F.: 20.

Ensor, E. K.: 50.

Equal gains: as a canon of wage justice, 326-328.

Equality: as a canon of justice, 243, 244;

of men's claims to the bounty of nature, 358, 359;

of rights to a decent livelihood, 360-363.

"Equitable minimum": of wages, 388, 390, 392, 393, 395, 397, 398,

399, 417.

Equity: meaning of, 256.

Exchange-equivalence: theories of, 326-340;

equal gains, 326-328;

free contract, 328-330;

market value, 330-332;

mediæval, 332-336;

modern, 336-340.

Exclusion from the land: 90-93.

Exclusive-sales contracts: 270-272.

Expropriation: of capitalists under Socialism, 154-158.

Extrinsic titles: of interest, 172.

Family living wage: 373-376.

Fathers of the Church: on private property in land, 62;

on duty of beneficence, 305, 306.

Fay, C. R.: 214, 221, 227.

Fisher, Irving: 196.

Fortunes: legal limitation of, 291-302;

directly, 292-295;

by taxation, 296-302.

France: co-operative production in, 223.

Fustel de Coulanges: 9.

Gains: excessive from land, 80-89;

from monopolies, 263-265.

Germany: co-operation in, 216.

Giffen, Sir Robert: 189.

Godwin, W.: 341.

Government ownership: 93-95;

limitations of, 163-165;

and rate of interest, 212.

Great Britain: co-operation in, 220-222;

income taxes in, 299-300;

minimum wage in, 401, 402.

Haines, H. T.: 405.

Hammond, M. B.: 402.

Henry George: on primitive common ownership, 17;

on first occupancy, 21-24;

on title of labour, 24-29;

on natural right to land, 30-39;

on right of community to land values and rent, 39-47;

on Single Tax, 51, 52.

Hillquit, Morris: 159.

Hobson, J. A.: 418.

Howe, F. C.: 76-78.

Human welfare: the test of property rights in land, 36-38;

and of a system of land tenure, 74;

and of increment taxes, 109-111;

and of titles of property, 150, 151, 244, 293-295;

as a canon of distributive justice, 252, 253;

as justifying profits, 256, 257, 389;

as justifying higher than living wages, 386.

Hyndman and Morris: 20.

Income: distribution of national, 81-83.

Incomes: injustice of equal, 244;

progressive taxation of, 297-302.

Increment taxes: 102-117.

Inefficiency: of leadership and labour under Socialism, 158-168.

Inheritance: legal limitation of, 293-295;

progressive taxation of, 296-302.

Interest: nature of, 137-140;

rate of, 141-144;

alleged intrinsic justifications of, 171-186;

attitude of Church toward, 172-176;

extrinsic titles of, 172;

and the title of productivity, 176-181;

and the title of service, 181, 182;

and the title of abstinence, 182-186;

social and presumptive justifications of, 187-209;

necessity of, 191-199;

civil authorization, 201-204;

how justified, 204-209, a "workless" income, 210;

possibility of reducing rate, 211-213;

distinguished from profits, 238, 239;

versus wages, 390-393.

Investor: the "innocent," 286, 287.

Ireland: reduction of rents in, 69-71;

compulsory sale of land in, 110;

co-operation in, 217-219.

Italy: co-operation in, 223.

Justice: dependence of on charity, 318;

not found in prevailing-rate theory, 325;

nor in exchange equivalence theories, 326-340;

nor in productivity theories, 340-355;

and the wage contract, 370-372;

and the legal minimum wage, 407.

Kautsky, Karl: 153.

King, W. I: 82, 83, 122, 123, 155, 240, 310, 414.

Labour: as a title to land, 24-29;

and to products, 45;

and to the entire product of industry, 145-152;

341-347;

productivity of, 178, 179;

inefficiency of under Socialism, 162-167;

mediæval measure of cost of, 336, 337;

claims of different groups of, 381-387;

legislative proposals for, 416, 417.

Labour unions: efficacy and limitations of, 417-420;

and legislation, 420-423.

Labourer, the: claim of to rent, 71-73;

right of to his product, 25, 26, 28, 43, 45, 149, 150, 179, 180;

gains of from wage contract, 327, 328;

right of to a living wage, 363-369, 373;

versus the capitalist, 390-393, 396;

versus the consumer, 393-398;

and co-operative enterprise, 423-425.

Land: distribution of, 16, 17, 87-89;

large holdings of, 89, 90;

accessibility to, 91-95;

the leasing system, 95-97;

public ownership of, 98-100.

Landowner: right of to rent, 67-73;

his share of product, 80-89.

Landownership: in history, 8-18;

two theories of, 8, 9;

in pre-agricultural conditions, 10-12;

origin of private, 12-14;

prevalence and benefits of, 15-18;

arguments against private, 19-47,

by Socialists, 19-21,

by Henry George, 21-47;

private, the best system of tenure, 48-55;

four elements of, 48;

a natural right, 55-56.

See Henry George, Occupancy, Labour, Right, Compensation,

Confiscation, Defects, Rent.

Land System: defects of the existing, 74-93.

Land values: how created by the community, 40-47;

increase of, 83-86;

taxation of, 117-130.

Langenstein: 335.

Lassalle, F.: 183.

Large estates: special taxation of, 130-132.

Leadership: industrial, under Socialism, 158-167.

Leasing system: 95-97.

Legislation: for labour, 120-123, 416.

Liberty: under Socialism, 168-170.

Liebknecht, W.: 152.

Life: right to, 57;

true conception of, 317.

Limitation of fortunes: 291-302;

directly, 292-295;

by taxation, 296-302.

Livelihood, decent: 360-363;

the labourer's right to, 363-365;

the employer's, 366.

Living wage: the minimum of wage justice, 356-380;

three fundamental principles, 358-360;

and a decent livelihood, 360-363;

right of labourer to, 363-369;

obligation of employer to pay, 365-372;

for a family, 373-376;

and social welfare, 376, 377;

authorities for, 377, 378;

money measure of, 378-380;

versus other titles of reward, 381, 382, 386.

Loan capitalist: and the claims of the labourer, 366, 367, 390, 391.

Loans: attitude of Church toward interest on, 172-174;

and productive capital, 174, 175.

Maine, Sir Henry: 17.

Market value: and wage justice, 330-332, 370, 375.

Marriage: right to, 57, 58;

and reasonable life, 374.

Marx, Karl: 145-148, 342, 343, 374.

Materialism: in current conception of welfare, 314-318.

Meade, E. S.: 265, 266.

Menger, A.: 342.

Middle Ages, doctrines of: on interest, 172, 175, 176, 201;

on titles of gain, 175;

on wage justice, 332-336.

Minimum: of wage justice, 356-380.

Minimum profits: question of right to, 258-260.

Minimum wage: 353-355, 400-423;

in operation, 400-405;

ethical and political aspects of, 407, 408;

economic aspect of, 408-416;

opinions of economists on, 412-416, 420-423.

Modern: version of exchange-equivalence, 336-340.

Monopoly: in relation to land, 75-80;

moral aspect of, 262-278;

excessive gains of, 263-265;

efficiency of, 265-267, 275-277;

discriminative underselling by, 267-270;

favors to by railroads, 262, 273;

natural, 273-275;

suppression versus regulation of, 275-278;

by labour, 390, 397.

Natural monopolies: 273-275.

Natural rights: 57-59. See Rights.

Nearing, Scott: 83-85;

154, 210, footnote.

Needs: as a canon of justice, 244, 246, 356-358;

classification of, 308, 309;

exaggerated conception of, 314-318;

a standard of wage justice in Middle Ages, 335, 336.

Occupancy, first: as a title to land, 21-24;

as exemplified in increment taxes, 109.

Occupation: question of right to a livelihood from a present, 362,

363.

Original titles: See Occupancy, Labour.

Overcapitalization: 279-290. See Stockwatering.

Ownership: titles of determined by reasonable distribution, 150,

151.

Perkins, G. W.: 276.

Personality: as basis of industrial rights, 358-371, 374.

Pesch, H.: 215.

Pope Benedict XIV: 173.

Clement IV: 23.

Gregory the Great: 306.

Innocent XI: 316.

Leo XIII: 64-66, 306, 309, 377.

Sixtus V: 176.

Population: excessive increase of urban, 86.

Possession: as a partial justification of interest: 205, 206.

Possessors: obligation of to non-possessors, 359, 360.

Presumption: as a partial justification of interest, 205;

and the canon of productivity, 248.

Prevailing rate theory: of wage justice, 323-325.

Prices: test of extortionate, 269, 270;

legalized agreements fixing, 277, 278;

versus wages, 393-399.

Principles: three fundamental to living wage doctrine, 358-360.

Product: distribution of national, 181-183. See Labour, Labourer,

Right.

Production: of land values by the community, 39-47;

co-operation in, 222-228.

Productivity: as a title to the product, 25, 26, 28, 43, 45, 149,

150, 179;

as a title to interest, 172, 173, 176-181, 204, 205;

of labour and capital, 178-180;

as a canon of distribution, 246-249, 350, 351;

as justifying large profits, 255-258, 262, 388, 389;

as a title to wages, 341-355, 385;

Clark's theory of, 347-351;

Carver's theory of, 351-355.

Profits: nature of, 237-242;

as compared with interest and rent, 139, 140, 238, 239;

amount of, 239, 240;

in a corporation, 241, 242;

in conditions of competition, 254-261;

indefinitely large, 255-258;

minimum, 258-260;

surplus and excessive, 263-265;

in natural monopolies, 273, 274;

versus wages, 388-390.

"Progress and Poverty": 21, 22, 24, 25, 30, 34, 39, 51, 52.

Proudhon: 342.

Public honour: efficacy of under Socialism: 165-167.

Pullman Company: 289.

Reform: versus revolution, 94.

Rent: economic, 3-7;

commercial, 5;

how produced by society, 39-47;

right of landowner to, 67-75;

right of tenant and labourer to, 69-73, 396;

increase and amount of, 80-87;

distribution of, 87-89;

in United States, 122.

Rent charges: attitude of theologians toward, 175, 176.

"Res fructificat domina":

limitations of this formula, 60, 61, 104, 105, 111, 180, 345.

Revolution: versus reform, 94.

Riches: from land, 88, 89.

Right: of the individual to land, 30-39;

of the community to land values and rent, 39-47;

of the producer to his product, see productivity;

of private landownership, 56-66;

to take rent, 67-73;

of access to the earth, 358-360;

to a decent livelihood, 360-363;

to a living wage, 363-369, 372, 376.

Rights: three principal kinds of natural, 57-59;

of property, as created by the State, 202.

Rodbertus, K.: 342.

Roman Congregations: on lawfulness of interest taking, 173, 174.

Saint-Simon: 342.

Sacrifice: principle of in taxation, 131, 297;

as a title to interest, 185-188;

as a title of reward, 383-385.

Savers: three kinds of, 183-185.

Scarcity: effect of on rewards of productive agents, 80;

as a canon of distributive justice, 250, 251;

as justifying very large profits, and more than a living wage,

255-258.

Schmoller: 253.

Schoolmen: doctrines of on wage justice, 333-336.

Seligman, E. R. A.: 101, 296, 297.

Service: as a title to interest, 181, 182, 204, 205.

Shifting: of land taxes, 102, 103.

Sidgwick, H.: 329.

Single Tax: injustice of, 33-39, 100;

proposals and defects of, 51, 54, 108.

Skelton, O. D.: 165.

Small, A. W.: 171.

Social benefits: of special taxes on land, 127-130.

Socialism: as regards land, 49, 51;

not inevitable, 153;

expropriation of capitalists by, 154-158;

inefficiency of, 158-168;

hostile to individual liberty, 168-170;

not co-operation, 230, 231.

Socialists: on private landownership, 19-21;

on interest, value, and labour, 145-148;

on the collectivist State, 152, 153;

on morality of profits, 254;

on wage justice, 341-347;

on the principle of needs, 356.

Socialist party: of the United States, on landownership, 51.

Spargo, John: 51.

Specific productivity: as a measure of wage justice, 347-351.

Speculation: effect of on land values, 92, 93, 103.

Spencer, Herbert: 23.

Standard Oil Company: 76, 263, 267.

State, the: should permit interest, 199-201;

power of to create property rights, 202-204;

not obliged to guarantee living profits, 259;

fixing of maximum prices by, 275-278;

and the "innocent" investor, 286, 287;

and the prevention of stockwatering, 289, 290;

and the limitation of fortunes, 291-302;

and payment of living wages, 365;

and minimum wage, 407, 408, 420-423;

and other labour legislation, 416, 417.

Stockholders: claim of to surplus gains, 257, 258, 262;

as related to stockwatering, 279-281, 285.

Stockwatering: moral aspect of, 279-290;

definition of, 280;

injurious effects of, 281-286 and the "innocent" investor, 286,

287;

magnitude of, 288, 289;

prevention of, 289, 290.

Stores: co-operation in, 220-222.

Superfluous wealth: duty of distributing, 303-319;

kinds of, 308, 309;

a false conception of, 314-316;

true conception of, 318, 319.

See Wealth.

Supertax: on large landed estates, 130-132.

Supply and demand: as determining rent, 80;

as determining interest, 143, 144.

Taussig, F. W.: 198, 214, 282, 289, 290;

on minimum wage, 412-416.

Tawney, R. H.: 421.

Taxation: as a social instrument, 101, 102;

of increases in land value, 102-117;

faculty theory of, 107, 108;

progressive, as a method of limiting fortunes, 296-302.

Taxes: shifting of to land, 117-130;

social benefits of, 127-130.

Tenant: claim of to rent, 69-71.

Theologians: on private landownership, 62-64;

on interest, 172-176, 202-204;

on civil creation of property rights, 202;

on duty of benevolent distribution, 308, 309.

Thompson, W.: 341.

Undertaker: See Business man.

United States: special land taxes in, 119;

co-operation in, 218, 263;

minimum wage in, 401, 403-407.

United States Commissioner of Corporations, reports of: on Standard

Oil Company, 76, 263, 267, 268, 272;

on Steel Corporation, 79, 89, 263, 267, 285;

on water power ownership, 79, 95;

on the lumber industry, 85, 89, 94, 132;

on American Tobacco Company, 263, 267, 288;

on American Sugar Refining Company, 267, 272, 289.

United States Shipbuilding Company: 288, 289.

United States Steel Corporation: 79, 89, 267, 285, 289.

Use: right, as a confirmatory justification of interest taking,

206-208.

Value: Marxian theory of, 145-148, 333, 343, 344;

relation of to wage justice, 330-340;

and to a living wage, 370, 375.

Van Hise, C. R.: 266, 267, 277, 278, 288.

Wage justice: unacceptable theories of, 323-355;

prevailing rate theory, 323-325;

exchange equivalence theory, 326-340;

productivity theories, 341-355;

the minimum of, 356-380;

problem of complete, 381-399;

claims of different labour groups, 381-387;

wages versus profits, 388-390;

wages versus interest, 390-393;

wages versus prices, 393-399.

Wages: versus profits, 388-390;

"equitable minimum" of, 388;

versus interest, 390-393;

versus prices, 393-399;

methods of increasing, 400-425;

legal minimum, 400-416;

other legislation for, 416, 417;

labour unions, 417-423;

co-operative enterprise, 423-425.

Wagner, A.: 342.

Watered stock: 279-290. See Stockwatering.

Water power: in the United States, 79, 95.

Wealth, superfluous: duty of distributing, 303-319;

as regards a part, 303-307;

as regards the whole, 308-314;

a duty of charity or of justice, 305-307;

the supply of capital and business ability, 311-313;

false and true conceptions of, 314-316.

Welfare: a false conception of, 314-316;

true conception of, 316-318;

social, demands a living wage for all, 376, 377.

See Human welfare.

Whittaker, Sir Thomas: 10, 14, 28.

Wicker, G. R.: 350, 351.

Williams, A.: 232.

Wolman, L.: 417, 418.

Women: right of to a living wage, 373.

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Socialism: Promise or Menace

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_270 pp., 12mo, $1.25_

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