SOME EFFECTS OF MODERN INDUSTRY UPON THE WORKERS AS CONSUMERS.
Sec. 1. _How far the different Working Classes gain from the Fall of
Prices._
Sec. 2. _Part of the Economy of Machine-production compensated by the
growing Work of Distribution._
Sec. 3. _The Lowest Class of Workers gains least from
Machine-production._
Sec. 1. In considering the effect of machine-production upon a body of
workers engaged in some particular industry we are not confined to
tracing the effects of improvements in the arts and methods of that
single branch of production. As consumers they share in the
improvements introduced into other industries reflected in a fall of
retail prices. Insomuch as all English workers consume bread they are
benefited by the establishment of a new American railway or the
invention of new milling machinery which lowers the price of bread; as
all consume boots the advantage which the introduction of boot-making
machinery confers upon the workers is not confined to the higher wages
which may be paid to some operatives in the boot factory, but is
extended to all the workers who can buy cheaper boots.
How far do methods of modern capitalist production tend to benefit the
labourer in his capacity as consumer?
Economic theory is in tolerably close accord with experience in the
answer it gives to this question. Each portion of the working classes
gains in its capacity of consumer from improved methods of production
in proportion to the amount by which its income exceeds the bare
subsistence wage of unskilled workers. The highly-paid mechanic gains
most, the sweated worker least. The worker earning forty shillings per
week gains much more than twice as much as the worker earning twenty
shillings from each general cheapening in the cost of production.
There are several reasons why this is so.
1. Where there exists a constant over-supply of labour competing for
what must be regarded at any particular time as a fixed quantity of
employment, wages are determined with tolerably close reference to the
lowest standard of living among that class of workers, and not by any
fixed or customary money wage. This is particularly the case in the
"sweating" trades of large towns. Here such improvements in machinery
and methods of industry as lower the price of articles which fall
within the "standard of living" of this class are liable to be
speedily reflected in a fall of money wages paid for such low-skilled
work. In other words, a "bare subsistence wage" does not gain by a
fall in the price of the articles which belong to its standard of
comfort.
Even in the lowest kinds of work there is no doubt some tendency to
stick to the former money wage and thus to raise somewhat the standard
of real wages, but where the competition is keenest this _vis inertiae_
is liable to be overborne, and money wages fall with prices. As we
rise to the more highly skilled, paid, and organised grades of labour,
we come to workers who are less exposed to the direct constant strain
of competition, where there is not a chronic over-supply of labour.
Here a fall of retail prices is not necessarily or speedily followed
by any corresponding fall of money wages, and the results of the
higher real wages enjoyed for a time impress themselves in a higher
habitual standard of comfort and strengthen the resistance which is
offered to any attempt to lower money wages, even though the attempt
may be made at a time when an over-supply of labour does exist.
In proportion as a class of workers is highly paid, educated, and
organised, it is able to gain the benefit which improved machinery
brings to the consumer, because it is better able to resist the
economic tendency to determine wages by reference to a standard of
comfort independent of monetary considerations. So far as the lowest
waged and most closely competing labourers have gained by the fall of
prices, it has been due to the pressure of sentiment on the part of
the better class of employers and of the public against the lowering
of money wages, even where the smaller sum of money will purchase as
much as a larger sum previously.
2. The smaller the income the larger the proportion of it that is
spent upon commodities whose expense of production and whose price is
less affected by machinery. Machine-production, by the fall of prices
it brings, has benefited people in direct proportion to their income.
The articles which have fallen most rapidly in price are those
comforts and luxuries into which machine-production enters most
largely. The aristocracy of the working classes, whose standard of
comfort includes watches, pianos, books, and bicycles, has gained much
more by the fall of prices than those who are obliged to spend all
their wages on the purchase of bare necessaries of life. The gain of
the former is manifold and great, the benefit of the latter is
confined to the cheapening of bread and groceries--a great benefit
when measured in terms of improved livelihood no doubt, but small when
compared with the increase of purchasing power conferred by modern
production upon the Lancashire factory family, with its L3 or L4 a
week, and in large measure counterbalanced by the increased proportion
of the income, which, in the case of town operatives, goes as rent and
price of vegetables, dairy produce, and other commodities which have
risen in price.
3. The highly-paid operatives generally work the shortest hours, the
low-paid the longest. So far as this is not compensated by an
increased intensity of labour on the part of those working short
hours, it implies an increased capacity of making the most out of
their wages. Longer leisure enables a worker to make the most of his
consumption, he can lay out his wages more carefully, is less tempted
to squander his money in excesses directly engendered by the reaction
from excessive labour, and can get a fuller enjoyment and benefit from
the use of the consumables which he purchases. A large and increasing
number of the cheapest and the most intrinsically valuable
commodities, of an intellectual, artistic, and spiritual character,
are only open to the beneficial consumption of those who have more
leisure at their command than is yet the lot of the low-skilled
workers in our towns.
Sec. 2. If we compare the statistics of wages we shall find that the
largest proportionate rise of money wages has been in the
highly-organised machine industries, and that the benefit which
machinery confers upon the workers in the capacity of consumers falls
chiefly to the same workers.
It must not, however, be assumed that improved methods of production
yield their full benefit through competition to the consuming public.
On the contrary, much of the economy of machine-production fails to
exercise its full influence upon retail prices. There are two chief
reasons for this failure. To one of these adequate attention has been
already drawn, the growth of definite forms of capitalist monopoly,
which secure at some point or other in the production of a commodity,
as higher profits, that which under free competition would pass to the
consumer through lower shop prices. The second consists in the
abnormal growth of the distributive classes, whose multiplication is
caused by the limitation which the economy of machinery imposes upon
the amount of capital and labour which can find profitable employment
in the extractive and manufacturing processes. A larger and larger
number of industrial workers obtain a living by a subdivision of the
work of distribution carried to a point far beyond the bounds of
social utility. For, on the one hand, when competition of
manufacturers and transporters is more and more confined to a small
number of large businesses which, because their united power of
production largely transcends the consumption at profitable prices,
are driven into closer competition, a larger amount of labour is
continually engaged in the attempt of each firm to secure for itself
the largest share of business at the expense of another firm. On the
other hand, shut out from effective or profitable competition in the
manufacturing industries, a larger amount of capital and labour seeks
to engage in those departments of the distributive trade where
new-comers have a better chance, and where by local settlement or
otherwise they have an opportunity of sharing the amount of
distribution that is to be done. Hence a fall of wholesale prices is
usually not reflected in a corresponding fall of retail prices, for
competition in retail trade, as J.S. Mill clearly recognised, "often,
instead of lowering prices, merely divides the gains of the high price
among a greater number of dealers."[238]
Sec. 3. The wide difference between the economic position of the skilled
mechanic and the common labourer shows how fallacious is that
treatment of the influence of machinery upon the condition of the
working classes which is commonly found in treatises of political
economy. To present a comparative picture of the progress of the
working classes during the last half century, which assigns to them an
increase of money wages, obtained by averaging a number of rises in
different employments, and reduces this increase to real wages without
any reference to the different use of wages by different classes, is
an unscientific and mischievous method of dealing with one of the most
important economic questions. The influence of machine-production
appears to be widely different upon the skilled mechanic and the
common labourer considered both as producers and consumers, and tends
to a wide difference in standard of comfort between the two classes.
This difference is further enhanced by the indirect assistance which
machinery and large-scale industry gives to the skilled workers to
combine and thus frequently to secure wages higher than are
economically requisite to secure their efficient work. On the other
hand, growing feelings of humanity and a vague but genuine feeling of
social justice in an ever larger portion of the public often enable
the low-skilled worker to secure a higher standard of comfort than the
operation of economic competition alone would enable him to reach. But
after due allowance is made for this, the conclusion is forced upon us
that the gain of machine-production, so far as an increase in real
wages is concerned, has been chiefly taken by the highly-skilled and
highly-waged workers, and that as the character of work and wages
descends, the proportionate gain accruing from the vast increase of
productive power rapidly diminishes, the lowest classes of workers
obtaining but an insignificant share.
FOOTNOTES:
[238] _Principles of Political Economy_, Bk. ii., chap. iv. Sec. 3.