THE ECONOMY OF HIGH WAGES.
Sec. 1. _The Economy of Low Wages._
Sec. 2. _Modifications of the Early Doctrine--Sir T. Brassey's
Evidence from Heavy Manual Work._
Sec. 3. _Wages, Hours, and Product in Machine-industry._
Sec. 4. _A General Application of the Economy of High Wages and
Short Hours inadmissible._
Sec. 5. _Mutual Determination of Conditions of Employment and
Productivity._
Sec. 6. _Compressibility of Labour and Intensification of Effort._
Sec. 7. _Effective Consumption dependent upon Spare Energy of the
Worker._
Sec. 8. _Growth of Machinery in relation to Standard of Comfort._
Sec. 9. _Economy of High Wages dependent upon Consumption._
Sec. 1. The theory of a "natural" rate of wages fixed at the bare
subsistence-point which was first clearly formulated in the writings
of Quesnay and the so-called "physiocratic" school was little more
than a rough generalisation of the facts of labour in France. But
these facts, summed up in the phrase, "Il ne gagne que sa vie," and
elevated to the position of a natural law, implied the general belief
that a higher rate of wage would not result in a correspondent
increase of the product of labour, that it would not pay an employer
to give wages above the point of bare sustenance and reproduction.
This dogma of the economy of cheap labour, taught in a slightly
modified form by many of the leading English economists of the first
half of the nineteenth century, has dominated the thought and
indirectly influenced the practice of the business world. It is true
that Adam Smith in a well-known passage had given powerful utterance
to a different view of the relation between work and wages:--"The
liberal reward of labour as it encourages the propagation so it
encourages the industry of the common people. The wages of labour are
the encouragement of industry, which, like every other human quality,
improves in proportion to the encouragement it receives."[225] But the
teaching of Ricardo, and the writers who most closely followed him in
his conception of the industrial system, leaned heavily in favour of
low wages as the sound basis of industrial progress.
The doctrine of the economy of low wages in England scarcely needed
the formal support of the scientific economist. It was already
strongly implanted in the mind of the eighteenth century "business
man," who moralised upon the excesses resulting from high wages much
in the tone of the business man of to-day. It would be scarcely
possible to parody the following line of reflection:--
"The poor in the manufacturing counties will never work any
more time in general than is necessary just to live and
support their weekly debauches. Upon the whole we may fairly
aver that a reduction of wages in the woollen manufactures
would be a national blessing and advantage and no real injury
to the poor. By this means we might keep our trade, uphold our
rents, and reform the people into the bargain." (Smith's
_Memoirs of Wool_, vol. ii. p. 308.)
Compare with this Arthur Young's frequent suggestion that rents should
be raised in order to improve farming.[226] So Dr. Ure, half a century
later, notwithstanding that his main argument is for the "economy of
high wages," both on the ground that it evokes the best quality of
work and because it keeps the workman contented, is unable to avoid
flatly contradicting himself as follows:--
"High wages, instead of leading to thankfulness of temper and
improvement of mind, have, in too many cases, cherished pride
and supplied funds for supporting refractory spirits in
strikes wantonly inflicted upon one set of mill-owners after
another throughout the several districts of Lancashire for the
purpose of degrading them into a state of servitude."
(_Philosophy of Manufactures_, p. 366.)
So again (p. 298):--"In fact, it was their high wages which enabled
them to maintain a stipendary committee in affluence, and to pamper
themselves into nervous ailments by a diet too rich and exciting for
their indoor occupation."
The experiments of Robert Owen in raising wages and shortening
hours in his New Lanark mills failed utterly to convince his
fellow-manufacturers that a high standard of comfort among the workers
would bring a correspondent rise in working efficiency.
The history of the early factory system, under which rapid fortunes
were built out of the excessive toil of children and low-skilled adult
workers paid at rates which were, in many instances, far below true
"subsistence wages," furnished to the commercial mind a convincing
argument in favour of "cheap labour," and set political economy for
half a century at war with the rising sentiments of humanity.[227]
Even now, the fear frequently expressed in the New World regarding the
"competition of cheap labour" attests a strong survival of this
theory, which held it to be the first principle of "good business" to
pay as low wages as possible.
Sec. 2. The trend of more recent thought has been in the direction of a
progressive modification of the doctrine of the "economy of low
wages." The common maxim that "if you want a thing well done you must
expect to pay for it" implies some general belief in a certain
correspondence of work and wages. The clearer formulation of this idea
has been in large measure the work of economic thinkers who have set
themselves to the close study of comparative statistics. The work in
which Mr. Brassey, the great railway contractor, was engaged gave him
an opportunity of making accurate comparison of the work and wages of
workmen of various nationalities, and his son, Sir Thomas Brassey,
collected and published a number of facts bearing upon the subject
which, as regards certain kinds of work, established a new relation
between work and wages. He found that English navvies employed upon
the Grand Trunk Railway in Canada, and receiving from 5s. to 6s. a
day, did a greater amount of work for the money than French-Canadians
paid at 3s. 6d. a day; that it was more profitable to employ
Englishmen at 3s. to 3s. 6d. upon making Irish railways than Irishmen
at 1s. 6d. to 1s. 8d.; that "in India, although the cost of dark
labour ranges from 4-1/2d. to 6d. a day, mile for mile the cost of
railway work is about the same as in England;" that in quarry work,
"in which Frenchmen, Irishmen, and Englishmen were employed side by
side, the Frenchman received three, the Irishman four, and the
Englishman six francs a day. At those different rates the Englishman
was found to be the most advantageous workman of the three." Extending
his inquiries to the building trades, to mining, and to various
departments of manufactures, he found a general consensus of opinion
among employers and other men of practical experience making for a
similar conclusion. In France, Germany, and Belgium, where wages and
the standard of living were considerably lower than in England, the
cost of turning out a given product was not less, but greater. In the
United States and in a few trades of Holland, where the standard of
comfort was as high or higher than in the corresponding English
industries, more or better work was done. In short, the efficiency of
labour was found to vary with tolerable accuracy in accordance with
the standard of comfort or real wages.
In his introduction to his work on _Foreign Work and English Wages_,
Sir Thomas Brassey gives countenance to a theory of wages which has
frequently been attributed to him, and has sometimes been accepted as
a final statement of the relation of work and wages--viz., that "the
cost of work, as distinguished from the daily wage of the labourer,
was approximately the same in all countries." In other words, it is
held that, for a given class of work, there is a fixed and uniform
relation between wages and efficiency of labour for different lands
and different races.
Now, to the acceptance of this judgment, considered as a foundation of
a theory of comparative wages, there are certain obvious objections.
In the first place, in the statement of most of the cases which are
adduced to support the theory reference is made exclusively to money
wages, no account being taken of differences of purchasing power in
different countries. In order to establish any rational basis, the
relation must be between real wages or standard of living and
efficiency. Now, though it must be admitted as inherently probable
that some definite relation should subsist between wages and work, or,
in other words, between the standard of consumption and the standard
of production, it is not _a priori_ reasonable to expect this relation
should be uniform as between two such countries as England and India,
so that it should be a matter of economic indifference whether a piece
of work is done by cheap and relatively inefficient Indian labour or
by expensive and efficient English labour. Such a supposition could
only stand upon one of two assumptions.
The first assumption would be that of a direct arithmetical
progression in the relation of wage and work such as would require
every difference in quantity of food, etc., consumed by labourers to
be reflected in an exactly correspondent difference of output of
productive energy--an assumption which needs no refutation, for no one
would maintain that the standard of comfort furnished by wages is the
sole determinant of efficiency, and that race, climate, and social
environment play no part in economic production. The alternative
assumption would be that of an absolute fluidity of capital and
labour, which should reduce to a uniform level throughout the world
the net industrial advantages, so that everywhere there was an exact
quantitative relation between work and wage, production, and
consumption. Though what is called a "tendency" to such uniformity may
be admitted, no one acquainted with facts will be so rash as to
maintain that this uniformity is even approximately reached.
Sec. 3. There is, then, no reason to suppose that wages, either nominal
or real, bear any exact, or even a closely approximate, relation to
the output of efficient work, quantity and quality being both taken
into consideration. But, in truth, the evidence afforded by Sir T.
Brassey does not justify a serious investigation of this theory of
indifference or equivalence of work and wages. For, in the great
majority of instances which he adduces, the advantage is clearly shown
to rest with the labour which is most highly remunerated. The theory
suggested by his evidence is, in fact, a theory of "the economy of
high wages."
This theory, which has been advancing by rapid strides in recent
years, and is now supported by a great quantity of carefully-collected
evidence, requires more serious consideration. The evidence of Sir T.
Brassey was chiefly, though by no means wholly, derived from branches
of industry where muscular strength was an important element, as in
road-making, railway-making, and mining; or from the building trades
where machinery does not play a chief part in directing the pace and
character of productive effort. It would not be unreasonable to expect
that the quantitative relation between work and wages might be closer
in industries where freely expended muscular labour played a more
prominent part than in industries where machinery was a dominating
factor, and where most of the work consisted in tending machinery. It
might well be the case that it would pay to provide a high standard of
physical consumption to navvies, but that it would not pay to the same
extent to give high wages to factory operatives, or even to other
classes of workers less subject to the strain of heavy muscular work.
In so far as the tendency of modern production is to relieve man more
and more of this rough muscular work, it might happen that the true
economy favoured high wages only in those kinds of work which were
tending to occupy a subordinate place in the industry of the future.
The earlier facts, which associated high wages with high productivity,
low wages with low productivity, in textile factories and ironworks,
were of a fragmentary character, and, considered as evidence of a
causal connection between high wages and high productivity, were
vitiated by the wide differences in the development of machinery and
industrial method in the cases compared. In recent years the labours
of many trained economists, some of them with close practical
knowledge of the industrial arts, have collected and tabulated a vast
amount of evidence upon the subject. A large number of American
economists, among them General F.A. Walker, Mr. Gunton, Mr. Schoenhof,
Mr. Gould, Mr. E. Atkinson, have made close researches into the
relation between work and wages in America and in the chief industrial
countries of Europe. A too patent advocacy of tariff reform or a
shorter working day has in some cases prevented the statistics
collected from receiving adequate attention, but there is no reason to
doubt the substantial accuracy of the research.
The most carefully-conducted investigation has been that of Professor
Schulze-Gaevernitz, who, basing his arguments upon a close study of
the cotton industry, has related his conclusion most clearly to the
evolution of modern machine-production. The earlier evidence merely
established the fact of a co-existence between high wages and good
work, low wages and bad work, without attempting scientifically to
explain the connection. Dr. Schulze-Gaevernitz, by his analysis of
cotton spinning and weaving, successfully formulates the observed
relations between wages and product. He compares not only the present
condition of the cotton industry in England and in Germany and other
continental countries, but the conditions of work and wages in the
English cotton industry at various times during the last seventy
years, thus correcting any personal equation of national life which
might to some extent vitiate conclusions based only upon international
comparison. This double method of comparison yields certain definite
results, which Dr. Schulze-Gaevernitz sums up in the following
words:--"Where the cost of labour (_i.e._ piece wages) is lowest the
conditions of labour are most favourable, the working day is shortest,
and the weekly wages of the operatives are highest" (p. 133). The
evolution of improved spinning and weaving machinery in England is
found to be attended by a continuous increase in the product for each
worker, a fall in piece wages reflected in prices of foods, a
shortening of the hours of labour, and a rise in weekly wages. The
following tables, compiled by Dr. Schulze-Gaevernitz, give an accurate
statement of the relations of the different movements, taking the
spinning and weaving industries as wholes in England:--
SPINNING.
----------+-----------+-------------+---------+---------+------------
| Product | Number of | Product | Cost of | Average
| of yarn | workers | per | labour | yearly
| in | in spinning | worker | per lb. | wages.
| 1000 lbs. | mills. | in lbs. | |
----------+-----------+-------------+---------+---------+------------
| | | | s. d. | L s. d.
1819-21 | 106,500 | 111,000 | 968 | 6 4 | 26 13 0
1829-31 | 216,500 | 140,000 | 1546 | 4 2 | 27 6 0
1844-46 | 523,300 | 190,000 | 2754 | 2 3 | 28 12 0
1859-61 | 910,000 | 248,000 | 3671 | 2 1 | 32 10 0
1880-82 | 1,324,000 | 240,000 | 5520 | 1 9 | 44 4 0[228]
----------+-----------+-------------+---------+---------+------------
WEAVING.
--------+------------+-----------+------------+---------+------------
| Products | Number of | Product | Cost of | Average
| in | workers. | per worker | labour | yearly
| 1000 lbs. | | in lbs. | per lb. | income.
--------+------------+-----------+------------+---------+------------
| | | | s. d. | L s. d.
1819-21 | 80,620 | 250,000 | 322 | 15 5 | 20 18 0
1829-31 | 143,200 | 275,000 | 521 | 9 0 | 19 18 0[229]
1844-46 | 348,110 | 210,000 | 1658 | 3 5 | 24 10 0
1859-61 | 650,870 | 203,000 | 3206 | 2 9 | 30 15 0
1880-82 | 993,540 | 246,000 | 4039 | 2 3 | 39 0 0
--------+------------+-----------+------------+---------+------------
The same holds good of the growth of the cotton-weaving industry in
America, as the following table shows:--
+------+-------------+-----------+-------------+
| | Yearly | Cost of | Yearly |
| | product | labour | earnings |
| | per worker. | per yard. | per worker. |
+------+-------------+-----------+-------------+
| | Yards. | Cents. | Dollars. |
| 1830 | 4,321 | 1.9 | 164 |
| 1850 | 12,164 | 1.55 | 190 |
| 1870 | 19,293 | 1.24 | 240 |
| 1884 | 28,032 | 1.07 | 290 |
+------+-------------+-----------+-------------+
Of Germany and Switzerland the same holds. Every improvement of
machinery increasing the number of spindles or looms a worker can
tend, or increasing the pace of the machinery and thus enlarging the
output per worker, is attended by a higher weekly wage, and in general
by a shortening of the hours of labour.
A detailed comparison of England, the United States, and the
Continent, as regards the present condition of the cotton industry,
yields the same general results. A comparison between England and the
United States shows that in weaving, where wages are much higher in
America, the labour is so much more efficient as to make the cost of
production considerably lower than in England; in spinning, where
English wages are about as highly paid, the cost of production is
lower than in America (p. 156). A comparison between Switzerland and
Germany, England, and America, as regards weaving, yields the
following results (p. 151):--
---------------------+-------------+-----------+----------+--------
| Weekly | | |
| product | Cost | Hours of | Weekly
| per worker. | per yard. | labour. | wage.
---------------------+-------------+-----------+----------+--------
| Yards. | | | s. d.
Switzerland and | | | |
Germany | 466 | 0.303 | 12 | 11 8
England | 706 | 0.275 | 9 | 16 3
America | 1200 | 0.2 | 10 | 20 3
---------------------+-------------+-----------+----------+--------
The low-paid, long-houred labourers of the Italian factories are
easily undersold by the higher paid and more effective labour of
England or America. So also a comparison between Mulhausen and the
factories of the Vosges valleys shows that the more highly-paid labour
of the former is the more productive.
In Russia the better-paid labour in the factories near Petersburg and
in Esthland can outcompete the lower paid labour of the central
governments of Vladimir and Moscow.
Schulze-Gaevernitz goes so far as to maintain that under existing
conditions of low wages and long hours, the Indian factories cannot
undersell their Lancashire competitors, and maintains that the
stringent factory laws which are demanded for India are likely to
injure Lancashire,[230] instead of giving her an advantage. The most
vital points of the subject are thus summarised, after an elaborate
comparison of the cotton-spinning of England and of those parts of
Germany which use English machinery:--
"In England the worker tends nearly twice as much machinery as
in Germany; the machines work more quickly; the loss as
compared with the theoretic output (_i.e._, waste of time and
material) is smaller. Finally, there comes the consideration
that in England the taking-off and putting-on from the
spindles occupies a shorter time; there is less breaking of
threads, and the piecing of broken threads requires less time.
The result is that the cost of labour per pound of
yarn--especially when the work of supervision is taken into
account--is decidedly smaller in England than in Germany. So
the wages of the English spinners are nearly twice as high as
in Germany, while the working day occupies a little over 9
hours as compared with 11 to 11-1/2 in Germany." (P. 136.)
Sec. 4. From the evidence adduced by Schulze-Gaevernitz, modern
industrial progress is expressed, so far as its effects on labour are
concerned, in seven results: (_a_) Shorter hours of labour. (_b_)
Higher weekly wage. (_c_) Lower piece-wage. (_d_) Cheaper product.
(_e_) Increased product per worker. (_f_) Increased speed of
machinery. (_g_) Increased number and size of machines to the worker.
All these factors must be taken into consideration before a full
judgment of the net results of machinery upon the worker can be
formed. The evidence above recorded, conclusive as it is regarding the
existence of some causal connection between a high standard of living
and high productivity of labour, does not necessarily justify the
conclusion that a business, or a federation of employers, may go ahead
increasing wages and shortening hours of labour _ad libitum_ in sure
and certain expectation of a corresponding increase in the net
productivity of labour.
Before such a conclusion is warranted, we must grasp more clearly the
nature of the causal relation between high standard of living and
efficiency. How far are we entitled to regard high wages and other
good conditions of employment as the cause, how far as the effect of
efficiency of labour? The evidence adduced simply proves that _a_ _b_
_c_, certain phenomena relating to efficiency--as size of product,
speed of workmanship, quantity of machines tended--vary directly with
_d_ _e_ _f_, certain other phenomena relating to wages, hours of
labour, and other conditions of employment. So far as such evidence
goes, we are only able to assert that the two sets of phenomena are
causally related, and cannot surely determine whether variations in
_a_ _b_ _c_ are causes, or effects of concomitant variations in _d_
_e_ _f_, or whether both sets of phenomena are or are not governed by
some third set, the variations of which affect simultaneously and
proportionately the other two.
The moral which writers like Mr. Gunton and Mr. Schoenhof have sought
to extract, and which has been accepted by not a few leaders in the
"labour movement," is that every rise of wages and every shortening of
hours will necessarily be followed by an equivalent or a more than
equivalent rise in the efficiency of labour. In seeking to establish
this position, special stress is laid upon the evidence of the
comparative statistics of textile industries. But, in the first place,
it must be pointed out that the evidence adduced does not support any
such sweeping generalisation. The statistics of Mr. Gould and Mr.
Schoenhof, for instance, show many cases where higher money and real
wages of American operatives are not accompanied by a correspondingly
larger productivity. In such cases the "cheap" labour of England is
really cheap.
Again, in other cases where the higher wages of American workers are
accompanied by an equivalent, or more than equivalent, increase of
product, that increased product is not due entirely or chiefly to
greater intensity or efficiency of labour, but to the use of more
highly elaborated labour-saving machinery. The difference between the
labour-cost of making and maintaining this improved machinery, and
that of making and maintaining the inferior machinery it has
displaced, ought clearly to be added in, where a comparison is made
between the relation of net labour-cost to product in different
countries, or in different stages of industrial development in the
same country. The omission of this invalidates much of the reasoning
of Schulze-Gaevernitz, Brentano, Rae, and other prophets of "the
economy of high wages." The direct labour-cost of each commodity may
be as little, or even less, than in England, but the total cost of
production[231] and the selling price may be higher. Lastly, in that
comparison between England and America, which is in many respects the
most serviceable, because the two countries are nearest in their
development of industrial methods as well as in the character of their
labourers, the difference of money and of real wage is not commonly
accompanied by a difference in hours of labour.
The evidence we possess does not warrant any universal or even general
application of the theory of the economy of high wages. If it was
generally true that by increasing wages and by shortening working
hours the daily product of each labourer could be increased or even
maintained, the social problem, so far as it relates to the
alleviation of the poverty and misery of the lower grades of workers,
would admit of an easy solution. But though it will be generally
admitted that a rise of wages or of the general standard of comfort of
most classes of workers will be followed by increased efficiency of
labour, and that a shortening of hours will not be followed by a
corresponding diminution in output, it by no means follows that it
will be profitable to increase wages and shorten hours indefinitely.
Just as it is admitted that the result of an equal shortening of hours
will be different in every trade, so will the result of a given rise
in standard of comfort be different. In some cases highly-paid labour
and short hours will pay, in other cases cheaper labour and longer
hours. It is not possible by dwelling upon the concomitance of high
wages and good work, low wages and bad work, in many of the most
highly-developed industries to appeal to the enlightened self-interest
of employers for the adoption of a general rise in wages and a general
shortening of hours. Because the most profitable business may often be
conducted on a system which involves high wages for short intense work
with highly evolved machinery, it by no means follows that other
businesses may not be more profitably conducted by employing low-paid
workers for long hours with simpler machinery. We are not at liberty
to conclude that the early Lancashire mill-owners adopted a
short-sighted policy in employing children and feeble adult labour at
starvation wages.
The evidence, in particular, of Schulze-Gaevernitz certainly shows
that the economy of high wages and short hours is closely linked with
the development of machinery, and that when machinery is complex and
capable of being worked at high pressure a net economy of high wages
and short hours emerges. In this light modern machinery is seen as the
direct cause of high wages and short hours. For though the object of
introducing machinery is to substitute machine-tenders at low wages
for skilled handicraftsmen, and though the tireless machine could be
profitably worked continuously, when due regard is had to human nature
it is found more profitable to work at high pressure for shorter hours
and to purchase such intense work at a higher price. It must, of
course, be kept in mind that high wages are often the direct cause of
the introduction of improved machinery, and are an ever-present
incentive to fresh mechanical inventions. This was clearly recognised
half a century ago by Dr. Ure, who names the lengthened mules, the
invention of the self-acting mule, and some of the early improvements
in calico-printing as directly attributable to this cause.[232]
But, admitting these tendencies in certain machine industries, we are
not justified in relying confidently upon the ability of a rise of
wages, obtained by organisation of labour or otherwise, to bring about
such improvements of industrial methods as will enable the higher
wages to be paid without injuring the trade, or reducing the profits
below the minimum socially required for the maintenance of a privately
conducted industry.
Our evidence leads to the conclusion that, while a rise of wages is
nearly always attended by a rise of efficiency of labour and of the
product, the proportion which the increased productivity will bear to
the rise of wage will differ in every employment. Hence it is not
possible to make a general declaration in favour of a policy of high
wages or of low wages.
Sec. 5. The economically profitable wages and hours will vary in
accordance with many conditions, among the most important being the
development of machinery, the strain upon muscles and nerves imposed
by the work, the indoor and sedentary character of the work, the
various hygienic conditions which attend it, the age, sex, race, and
class of the workers.
In cotton-weaving in America it pays better to employ women at high
wages to tend six, seven, or even eight looms for short hours, than to
pay lower wages to inferior workers such as are found in Germany,
Switzerland, or even in Lancashire. But in coal-mining it appears that
the American wages are economically too high--that is to say, the
difference between American and English wages is not compensated by an
equivalent difference of output. The gross number of tons mined by
United States miners working at wages of $326 per annum is 377,
yielding a cost of 86-1/2 cents per ton, as compared with 79 cents per
ton, the cost of North Staffordshire coal produced by miners earning
$253, and turning out 322 tons per head.[233] So also a ton of
Bessemer pig iron costs in labour about 50 cents more in America than
in England, the American wages being about 40 per cent. higher.[234]
It is, indeed, evident from the aggregate of evidence that no
determinable relation exists between cost in labour and wages for any
single group of commodities.
Just as little can a general acceptance be given to the opposite
contention that it is the increased efficiency of labour which causes
the high wages. This is commonly the view of those business men and
those economists who start from the assumption that there is some law
of competition in accordance with whose operation every worker
necessarily receives as much as he is worth, the full value of the
product of his labour. Only by the increased efficiency of labour can
wages rise, argue these people; where wages are high the efficiency of
labour is found to be high, and _vice versa_; therefore efficiency
determines wages. Just as the advocates of the economy of high-wages
theory seek by means of trade-unionism, legislation, and public
opinion to raise wages and shorten hours, trusting that the increased
efficiency which ensues will justify such conduct, so the others
insist that technical education and an elevation of the moral and
industrial character of the workers must precede and justify any rise
of wages or shortening of hours, by increasing the efficiency of
labour. Setting aside the assumption here involved that the share of
the workers in the joint product of capital and labour is a fixed and
immovable proportion, this view rests upon a mere denial of the effect
which it is alleged that high wages and a rise in standard of comfort
have in increasing efficiency.
The relation between wages and other conditions of employment, on the
one hand, and efficiency of labour or size of product on the other, is
clearly one of mutual determination. Every rise in wages, leisure, and
in general standard of comfort will increase the efficiency of labour;
every increased efficiency, whether due directly to these or to other
causes, will enable higher wages to be paid and shorter hours to be
worked.
Sec. 6. One further point emerges from the evidence relating to
efficiency and high wages. According to Schulze-Gaevernitz's formula,
every fall in piece wages is attended by a rise in weekly wages. But
it should be kept in mind that a rise in time wages does not
necessarily mean that the price of labour measured in terms of effort
has been raised. Intenser labour undergone for a shorter time may
obtain a higher money wage per unit of time, but the price per unit of
effort may be lower. It has been recognised that a general tendency of
the later evolution of machinery has been to compress and intensify
labour. In certain classes of textile labour the amount of muscular or
manual labour given out in a day is larger than formerly. This is the
case with the work of children employed as piecers. In Ure's day
(1830) he was able to claim that during three-fourths of the time
spent by children in the factory they had nothing to do. The increased
quantity of spindles and the increased speed have made their labour
more continuous. The same is true of the mule spinners, whose labour,
even within the last few years, has been intensified by increased size
of the mule. Though as a rule machinery tends to take over the heavier
forms of muscular work, it also tends to multiply the minor calls upon
the muscles, until the total strain is not much less than before. What
relief is obtained from muscular effort is compensated by a growing
strain upon the nerves and upon the attention. Moreover, as the
machinery grows more complex, numerous, and costly, the responsibility
of the machine-tender is increased. To some considerable extent the
new effort imposed upon the worker is of a more refined order than the
heavy muscular work it has replaced. But its tax upon the physique is
an ever-growing one. "A hand-loom weaver can work thirteen hours a
day, but to get a six-loom weaver to work thirteen hours is a physical
impossibility."[235] The complexity of modern machinery and the
superhuman celerity of which it is capable suggest continually an
increased compression of human labour, an increased output of effort
per unit of time. This has been rendered possible by acquired skill
and improved physique ensuing on a higher standard of living. But it
is evident that, where it appears that each rise in the standard of
living and each shortening of the working-day has been accompanied by
a severer strain either upon muscles, nerves, or mental energy during
the shorter working day, we are not entitled to regard the higher
wages and shorter hours as clear gain for the worker. Some limits are
necessarily imposed upon this compressibility of working effort. It
would clearly be impossible by a number of rapid reductions of the
working day and increases of time wages to force the effectiveness of
an hour's labour beyond a certain limit for the workers. Human nature
must place limits upon the compression. Though it may be better for a
weaver to tend four looms during the English factory day for the
moderate wage of 16s. a week than to earn 11s. 8d. by tending two
looms in Germany for twelve hours a day, it does not follow that it is
better to earn 20s. 3d. in America by tending six, seven, or even
eight looms for a ten-hours day,[236] or that the American's condition
would be improved if the eight-hours day was purchased at the expense
of adding another loom for each worker.
The gain which accrues from high wages and a larger amount of leisure,
over which the higher consumption shall be spread, may be more than
counteracted by an undue strain upon the nerves or muscles during the
shorter day. This difficulty, as we have seen, is not adequately met
by assigning the heavier muscular work more and more to machinery, if
the possible activity of this same machinery is made a pretext for
forcing the pace of such work as devolves upon machine-tenders.
In many kinds of work, though by no means in all, an increase of the
amount of work packed into an hour could be obtained by a reduction of
the working-day; but two considerations should act in determining the
progressive movement in this direction: first, the objective economic
question of the quantitative relation between the successive
decrements of the working-day and the increments of labour put into
each hour; second, the subjective economic question of the effect of
the more compressed labour upon the worker considered both as worker
and as consumer.
There is not wanting evidence to show that increased leisure and
higher wages can be bought too dear.
In drawing attention to this consideration it must not, however, be
assumed that the increase of real wages and shortening of hours traced
in progressive industries are necessarily accompanied by a
corresponding increase in the compression of labour. In the textile
and iron industries, for example, it is evident (_pace_ Karl Marx)
that the operatives had obtained some portion of the increased
productivity of improved machinery in a rise of wages. Even where more
machinery is tended we are not entitled to assume a correspondent
increase in felt effort or strain upon the worker. A real growth of
skill or efficiency will enable an increased amount of machinery to be
tended with no greater subjective effort than a smaller amount
formerly required. But while allowance should be made for this, the
history of the factory system, both in England and in other countries,
clearly indicates that factory labour is more intense than formerly,
not, perhaps, in its tax upon the muscles, but in the growing strain
it imposes upon the nervous system of the operatives.
The importance of this point is frequently ignored alike by advocates
of a shorter working-day and by those who insist that the chief aim of
workers should be to make their labour more productive. So far as the
higher efficiency simply means more skill and involves no increased
effort it is pure gain, but where increased effort is required the
question is one requiring close and detailed consideration.
Sec. 7. Another effect of over-compressed labour deserves a word.
The close relation between higher wages and shorter hours is generally
acknowledged. A rise of money wages which affects the standard of
living by introducing such changes in consumption as require for their
full yield of benefit or satisfaction an increase of consuming-time
can only be made effective by a diminution in the producing time or
hours of labour. When, for example, the new wants, whose satisfaction
would be naturally sought from a rise of the standard living, are of
an intellectual order, involving not merely the purchase of books,
etc., but the time to read such books, this benefit requires that the
higher wages should be supplemented by a diminution in the hours of
labour in cases where the latter are unduly long. But it is not so
clearly recognised that such questions cannot be determined without
reference to the question of intensity of labour. Yet it is evident
that an eight-hours day of more compressed labour might be of a more
exhausting character than a ten-hours day of less intense labour and
disqualify a worker from receiving the benefits of the opportunities
of education open to him more than the longer hours of less intense
labour. The advantage of the addition of two hours of leisure might be
outweighed by the diminished value attached to each leisure hour. In
other words, the excess of intense work might be worse in its effects
than the excess of more extended work. This possibility is often
overlooked in the arguments of those who support the movement towards
a shorter working-day by maintaining that each unit of labour-time
will be more productive. When the argument concerns itself merely with
alleging the influence of higher wages, without shorter hours, upon
the efficiency of labour, this neglect of the consideration of intense
labour has a more urgent importance. It may be gravely doubted whether
the benefit of the higher wages of the Massachusetts weavers is not
overbalanced by the increased effort of tending so large a number of
looms for hours which are longer than the English factory day. The
exhausting character of such labour is likely to leave its mark in
diminishing the real utility or satisfaction of the nominally higher
standard of living which the high wages render possible. Where the
increased productivity of labour is largely due to the improved
machinery or methods of production which are stimulated by high wages
without a corresponding intensification of the labour itself, the gain
to labour is clear. But the possibility that short hours and high
wages may stimulate an injurious compression of the output of
productive effort is one which must not be overlooked in considering
the influence of new industrial methods upon labour.
Sec. 8. Duration of labour, intensity of labour, and wages, in their
mutual relations, must be studied together in any attempt to estimate
the tendencies of capitalist production. Nor can we expect their
relations to be the same in any two industries. Where labour is
thinly extended over an inordinately long working-day, as in the
Indian mills, it is probable that such improvements of organisation as
might shorten the hours to those of an ordinary English factory day,
and intensify the labour, would be a benefit, and the rise of wages
which might follow would bring a double gain to the workers. But any
endeavour to further shorten and intensify the working-day might
injure the workers, even though their output were increased. Such an
instance, however, may serve well to bring home the relativity which
is involved in all such questions. The net benefit derived from a
particular quantitative relation between hours of labour, intensity,
and earnings would probably be widely different for English and for
Indian textile workers. It would, _a priori_, be unreasonable to
expect that the working-day which would bring the greatest net
advantage to both should be of the same duration. So also it may well
be possible that the more energetic nervous temperament of the
American operative may qualify him or her for a shorter and intenser
working-day than would suit the Lancashire operative. It is the
inseparable relation of the three factors--duration, intensity, and
earnings--which is the important point. But in considering earnings,
not merely the money wage, nor even the purchasing power of the money,
but the net advantage which can be obtained by consuming what is
purchased must be understood, if we are to take a scientific view of
the question.
It should be clearly recognised that in the consideration of all
practical reforms affecting the conditions of labour, the "wages"
question cannot be dissociated from the "hours" question, nor both
from the "intensity of labour" question; and that any endeavour to
simplify discussion, or to facilitate "labour movements," by seeking a
separate solution for each is futile, because it is unscientific. When
any industrial change is contemplated, it should be regarded, from the
"labour" point of view, in its influence upon the net welfare of the
workers, due regard being given, not merely to its effect upon wage,
hours, and intensity, but to the complex and changing relations which
subsist in each trade, in each country, and in each stage of
industrial development between the three.
But although, when we bear in mind the effects of machinery in
imparting intensity and monotony to labour, in increasing the number
of workers engaged in sedentary indoor occupations, and in compelling
an ever larger proportion of the working population to live in crowded
and unhealthy towns, the net benefit of machinery to the working
classes may be questioned, the growth of machinery has been clearly
attended by an improved standard of material comfort among the
machine-workers, taking the objective measurement of comfort.
Whatever allowance may be made for the effects of increased intensity
of labour, and the indirect influences of machinery, the bulk of
evidence clearly indicates that machine-tenders are better fed,
clothed, and housed than the hand-workers whose place they take, and
that every increase in the efficiency and complexity of machinery is
attended by a rise in real wages. The best machinery requires for its
economical use a fair standard of living among the workers who
co-operate with it, and with the further development of machinery in
each industry we may anticipate a further rise of this standard,
though we are not entitled to assume that this natural and necessary
progress of comfort among machine-workers has no fixed limit, and that
it is equally applicable to all industries and all countries.
It might, therefore, appear that as one industry after another fell
under machine-production, the tendency of machine-development must
necessarily make for a general elevation of the standard of comfort
among the working classes. It may very well be the case that the net
influence of machinery is in this direction. But it must not be
forgotten that the increased spread of machine-production does not
appear to engage a larger proportion of the working population in
machine-tending. Indeed, if we may judge by the recent history of the
most highly-evolved textile industries, we are entitled to expect
that, when machinery has got firm hold of all those industries which
lend themselves easily to routine production, the proportion of the
whole working population engaged directly in machine-tending will
continually decrease, a larger and larger proportion being occupied in
those parts of the transport and distributing industries which do not
lend themselves conveniently to machinery, and in personal services.
If this is so, we cannot look upon the evolution of machinery, with
its demand for intenser and more efficient labour, as an adequate
guarantee of a necessary improvement in the standard of comfort of the
working classes as a whole. To put the matter shortly, we have no
evidence to show that a rise in the standard of material comfort of
shopmen, writing clerks, school-teachers, 'busmen, agents,
warehousemen, dockers, policemen, sandwich-men, and other classes of
labour whose proportion is increasing in our industrial society, will
be attended by so considerable a rise in the efficiency of their
labour as to stimulate a series of such rises. The automatic movement
which Schulze-Gaevernitz and others trace in the typical
machine-industries is not shown to apply to industry as a whole, and
if the tendency of machine-development is to absorb a larger
proportion of the work but a smaller proportion of the workers, it is
not possible to found large hopes for the future of the working
classes upon this movement of the earning of high wages in
machine-industry.
Sec. 9. But though the individual self-interest of the producer cannot be
relied upon to favour progressive wages, except in certain industries
and up to a certain point, the collective interest of consumers lends
stronger support to "the economy of high wages." We have seen that the
possession of an excessive proportion of "power to consume" by classes
who, because their normal healthy wants are already fully satisfied,
refuse to exert this power, and insist upon storing it in unneeded
forms of capital, is directly responsible for the slack employment of
capital and labour. If the operation of industrial forces throw an
increased proportion of the "power to consume" into the hands of the
working classes, who will use it not to postpone consumption but to
raise their standard of material and intellectual comfort, a fuller
and more regular employment of labour and capital must follow. If the
stronger organisation of labour is able to raise wages, and the higher
wages are used to demand more and better articles of consumption, a
direct stimulus to the efficiency of capital and labour is thus
applied. The true issue, however, must not be shirked. If the power of
purchase now "saved" by the wealthier classes passed into the hands of
the workers in higher money wages, and was not spent by them in
raising their standard of comfort, but was "invested" in various
forms of capital, no stimulus to industry would be afforded; the
"savings" of one class would have fallen into the hands of another
class, and their excess would operate to restrict industry precisely
as it now operates. Though we would gladly see in the possession of
the working classes an increased proportion of those forms of capital
which are socially useful, this simple act of transfer, however
brought about, would furnish no stimulus to the aggregate industry.
From the standpoint of the community nothing else than a rise in the
average standard of current consumption can stimulate industry. When
it is clearly grasped that a demand for commodities is the only demand
for the use of labour and of capital, and not merely determines in
what particular direction these requisites of production shall be
applied, the hope of the future of our industry is seen to rest
largely upon the confident belief that the working classes will use
their higher wages not to draw interest from investments (a
self-destructive policy) but to raise their standard of life by the
current satisfaction of all those wholesome desires of body and mind
which lie latent under an "economy of low wages." The satisfaction of
new good human desires, by endowing life with more hope and interest,
will render all intelligent exertion more effective, by distributing
demand over a larger variety of commodities will give a fuller
utilisation both of natural and human resources, and by redressing the
dislocated balance of production and consumption due to inequality of
purchasing power, will justify high wages by increased fulness and
regularity of work. But it must be clearly recognised that however
desirable "saving" may seem to be as a moral virtue of the working
classes, any large practice of saving undertaken before and in
preference to an elevation of current consumption, will necessarily
cancel the economic advantages just dwelt upon. Just as the wise
individual will see he cannot afford to "save" until he has made full
provision for the maintenance of his family in full physical
efficiency, so the wise working class will insist upon utilising
earlier accesses of wages in promoting the physical and intellectual
efficiency of themselves and their families before they endeavour to
"invest" any considerable portion of their increased wages. Mr. Gould
puts this point very plainly and convincingly: "Where economic gains
are small, savings mean a relatively low plane of social existence. A
parsimonious people are never progressive, neither are they, as a
rule, industrially efficient. It is the man with many wants--not
luxurious fancies, but real legitimate wants--who works hard to
satisfy his aspirations, and he it is who is worth hiring. Let
economists still teach the utility and the necessity of saving, but
let the sociologist as firmly insist that to so far practise economy
as to prevent in the nineteenth century a corresponding advance in
civilisation of the working with the other classes is morally
inequitable and industrially bad policy. I am not sorry that the
American does not save more. Neither am I sure but that if many
working-class communities I have visited on the Continent were
socially more ambitious, there would not be less danger from Radical
theories. One of the most intelligent manufacturers I ever met told me
a few years ago he would be only too glad to pay higher wages to his
working people, provided they would spend the excess legitimately and
not hoard it. He knew that in the end he should gain thereby, since
the ministering to new wants only begets others."[237] If there are
theoretic economists who still hold that "a demand for commodities is
not a demand for labour," they may be reminded that a paradox is not
necessarily true. In fact, this particular paradox is seen to be
sustained by a combination of slipshod reasoning and moral prejudice.
The growing opinion of economic students is veering round to register
in theory the firm empirical judgment from which the business world
has never swerved, that a high rate of consumption is the surest
guarantee of progressive trade. The surest support of the "economy of
high wages" is the conviction that it will operate as a stimulus to
industry through increased consumption. The working classes,
especially in the United States and in England, show a growing
tendency to employ their higher wages in progressive consumption. Upon
the steady operation of this tendency the economic future of the
working classes, and of industry in general, largely depends.
FOOTNOTES:
[225] _Wealth of Nations_, vol. i. p. 86.
[226] Cf. _Northern Tour_, vol. ii. p. 86.
[227] It is true that out-and-out defenders of the factories against
early legislation sometimes had the audacity to assert the "economy of
high wages," and to maintain that it governed the practice of early
mill-owners. So Ure, "The main reason why they (_i.e._ wages) are so
high is, that they form a small part of the value of the manufactured
article, so that if reduced too low by a sordid master, they would
render his operatives less careful, and thereby injure the quality of
their work more than could be compensated by his saving in wages. The
less proportion wages bear to the value of the goods, the higher,
generally speaking, is the recompense of labour. The prudent master of
a fine spinning-mill is most reluctant to tamper with the earnings of
his spinners, and never consents to reduce them till absolutely forced
to it by a want of remuneration for the capital and skill embarked in
his business" (_Philosophy of Manufactures_, p. 330). This does not,
however, prevent Dr. Ure from pointing out a little later the grave
danger into which trade-union endeavours to raise wages drive a trade
subject to the competition of "the more frugal and docile labour of
the Continent and United States" (p. 363). Nor do Dr. Ure's statements
regarding the high wages paid in cotton-mills, which he places at
three times the agricultural wages, tally with the statistics given in
the appendix of his own book (cf. p. 515). Male spinners alone
received the "high wages" he names, and out of them had to pay for the
labour of the assistants whom they hired to help them.
[228] _Der Grossbetrieb_, p. 132. In regarding the advance of recent
average wages it should be borne in mind that the later years contain
a larger proportion of adults. In considering the net yearly wages a
deduction for unemployment should be made from the sums named in the
table.
[229] Account must be taken of the depressed condition of hand-loom
weavers, who had not yet disappeared.
[230] Here Schulze-Gaevernitz appears to strain his argument. Though
official reports lay stress upon the silver question as an important
factor in the rise of Bombay mills, there seems no doubt of the
ability of Bombay cheap labour, independently of this, to undersell
English labour for low counts of cotton in Asiatic markets. Brentano
in his work, _Hours and Wages in Relation to Production_, supports
Schulze-Gaevernitz.
[231] Mr. Gould's general conclusion, from his comparison of American
and European production, is "that higher daily wages in America _do
not mean a correspondingly enhanced labour-cost to the manufacturers_"
(_Contemporary Review_, Jan. 1893). This he holds to be partly due to
superior mechanical agencies, which owe their existence to high wages,
partly to superior physical force in the workers. But Mr. Gould's
evidence and his conclusion here stated, taken as testimony to the
"economy of high wages," are insufficient, for they only show that
high wages are attended by increased output of labour, not by an
increase _correspondent_ to this higher wage.
[232] Ure's _Philosophy of Manufactures_, pp. 367-369. Dr. Ure
regarded mechanical inventions as the means whereby capital should
keep labour in subjection. In describing how the "self-acting mule"
came into use he adds triumphantly: "This invention comprises the
great doctrine already propounded, that when capital enlists science
in her service the refractory hand of labour will always be taught
docility" (p. 368).
[233] "No. 64 Consular Report" (quoted Schoenhof, p. 209).
[234] Schoenhof, p. 216.
[235] _Der Grossbetrieb_, p. 167.
[236] _Vide supra_, p. 269. These wages, however, are the average of
all the labour employed in the weaving-sheds, not of "weavers" alone.
[237] E.R.L. Gould, _Contemporary Review_, January 1893.