Another and a totally different kind of combination of labour arises when men arrange to assist each other in doing the same work. Thus, sailors pulling at the same rope combine their labour together; other instances are, carrying the same ladder, rowing the same boat, and so forth. In this case there is said to besimple combination of labour, because the men do the same sort of work. When the men have different operations to perform, there is said to becomplex combination of labour, as when one man points a pin and another makes the head. On board a ship there is both simple and complex combination. When several men work at the same capstan the combination is simple, because one man does exactly the same as the others. But the captain, mate, steersman, carpenter, boatswain, and cook work together in complex combination, since each attends to his own proper duties. Similarly, in a company of soldiers the privates act together in simple combination, but the officers of different ranks have distinct duties to perform, so thatthe combination becomes complex. Men who thus assist each other are usually able to do far more work than if they acted separately.
32. Disadvantages of the Division of Labour.There are certainly some evils which arise out of the great division of labour now existing in civilised countries. These evils are of no account compared with the immense benefits which we receive; still it is well to notice them.
In the first place,division of labour tends to make a man's power narrow and restricted; he does one kind of work so constantly, that he has no time to learn and practice other kinds of work. A man becomes, as it has been said, worth only the tenth part of a pin; that is, there are men who know only how to make, for instance, the head of a pin. In the time of the Romans it was said,ne sutor ultra crepidam, let not the shoemaker go beyond his last. When a man accustomed only to making pins or shoes goes into the far west states of America, he finds himself unfitted for doing all the kinds of hard work required from a settler. The poor peasant from Norway or Sweden, who seems at first sight a less intelligent man, is able to build his own house, till the ground, tend his horse, and in a rough way, make his own carts, implements, and household furniture. Even the Red Indian is much better able to take care of himself in a new country than the educated mechanic. The only thing to be said is that the skilled shoemaker, or mechanic of whatever sort, must endeavour to keep to the trade which he has learnt so well. It is a misfortune both for himself and for other people if he is obliged to undertake work which he cannot do so well.
A second disadvantage of the division of labour is thattrade becomes very complicated, and when deranged the results are ruinous to some people. Each person learns to supply only a particular kind of goods, and if change of fashionor any other cause leads to a falling off in the demand for that kind of goods, the producer is left in poverty, until he can learn another trade. At one time the making of crinoline skirts for ladies was a large and profitable trade; now it has ceased almost entirely, and those who learnt the business have had to seek other employments. But each trade is generally well supplied with hands perfectly trained to the work, and it is very difficult for fresh workmen, especially when old, to learn the new work, and compete with those who have long practised it. In some cases this has been successfully done; thus the Cornish miners, when the mines in Cornwall were no longer profitable, went into the collieries, where more hewers of coal were much wanted. But, generally speaking, it is very difficult to find a new employment in England, and this is a strong reason why trades-unions should make no objection to new men entering a trade to which they have not been brought up.
The colliers tried to keep the Cornish miners out of the coal pits. In order to keep their own wages as high as possible they would let other men starve. But this is a very selfish and hurtful way of acting. If every trade were thus to try and keep all other people away, as if the trade were their own property, there would constantly be a number of unfortunate people brought to the workhouse through no fault of their own. It is most important, therefore, to maintain a man's right to do whatever kind of work he can get. It is one of the first and most necessary rights of a labourer to labour in any honest way he finds most profitable to himself.Labour must be free.
33. What is capital?We will now endeavour to understand the nature ofthe third requisiteof production, called capital, which consists of wealth used to help us in producing more wealth. All capital is wealth, but it is not true that all wealth is capital. If a man has a stock of food, or a stock of money with which he buys food, and he merely lives upon this without doing any labour, his stock is not considered to be capital, because he is not producing wealth in the meantime. But if he is occupied in building a house, or sinking a well, or making a cart, or producing anything which will afterwards save labour and give utility, then his stock is capital.
The great advantage of capital is that it enables us to do work in the least laborious way. If a man wants to convey water from a well to his house, and has very little capital, he can only get a bucket and carry every bucket-full separately; this is very laborious. If he has more capital, he can get a barrel and wheel it on a barrow, which takes off a large part of the weight; thus he saves much labour by the labour spent upon the barrel and barrow. If he has still more capital his best way will be to make a canal, or channel, or even to lay a metal pipe all the way from the well to his house; this costs a great deal of labour at the time, but, when once it is made, the water will perhaps run down by its own weight, and all the rest of his life he will be saved from the trouble of carrying water.
34. Fixed and Circulating Capitals.Capital is usually said to be either fixed or circulating capital, and we ought to learn very thoroughly the difference between these two kinds.Fixed capitalconsists of factories, machines, tools, ships, railways, docks, carts, carriages, and other things, which last a long time, and assist work. It does not include, indeed, all kinds of fixed property. Churches, monuments, pictures, books, ornamental trees, &c., last a long time, but they are not fixed capital, because they are not used to help us in producing new wealth. They maydo good, and give pleasure, and they form a part of the wealth of the kingdom; but they are not capital according to the usual employment of the name.
Circulating capital consists of the food, clothes, fuel, and other things which are required to support labourers while they are engaged in productive work.It is called circulating because it does not last long; potatoes and cabbages are eaten up, and a new supply has to be grown; clothes wear out in a few months or a year, and new ones have to be bought. The circulating capital, which is in the country now, is not the same circulating capital which was in the country two years ago. But the fixed capital is nearly the same: some factories may have been burnt or pulled down; some machines may have become worn out, and have been replaced by new ones. But these changes in fixed capital are comparatively few; whereas the whole or nearly the whole of the circulating capital is changed every year or two.
But the fact is that we cannot distinguish so easily as we may seem to do between fixed and circulating capitals; there may be kinds of capital which are neither quite fixed nor quite circulating, but something between the two. Flour is soon eaten up, and is circulating capital. A flour mill lasts fifty years, perhaps, and may certainly be called fixed capital; a flour sack lasts about ten years on an average. Is such a sack fixed or circulating capital? It seems to me difficult to say. In the case of a railway, the coal and oil wanted for the engine are used up at once, and are clearly circulating capital; the railway wagons last about ten years, the locomotive engines twenty years or more; the railway stations last at least thirty years; there is no reason why the bridges and tunnels and embankments should not last hundreds of years with proper care. Thus we see thatcapital is altogether a question of time, and we must say that capital is more fixed as it endures or continues useful a longer time; it is more circulating in proportion as it is sooner worn out or destroyed, and thus requires to be more frequently replaced.
35. How Capital is obtained. Capital is the result of saving or abstinence, that is, it can only be obtained by working to produce wealth, and then not immediately consuming that wealth. The poor savage who has to labour hard every day for fear that he may have to go without food, has no capital; but when he has food in hand, and can employ himself in making bows and arrows to facilitate the capture of animals, he is investing capital in the bows and arrows. Whenever we work in this way for a future purpose, we are living on capital and investing it. The abstinence (Latin,abs, from, andtenens, holding) consists in holding off from the enjoyment of something which we have produced, or might produce with the same labour.To saveis to keep something whole or untouched for future use; we save it as long as we do not consume it. If I have a stock of flour and eat it up, there is an end of the flour, and I cannot be said to save that. But if, while eating the flour, I am engaged in making a plough or a cart, or any other durable thing which will help me in production, I have turned one form of capital into another form. I might have eaten the flour in idleness, in which case it would not have been capital. But, while eating it, I worked for a future purpose. In so doing I am said toinvest capital, which meansto turn circulating into fixed capital, or less durable into more durable capital. Capital, accordingly, is invested for longer or shorter periods according to the durability of the form in which it is invested (Latin,in, on, andvestire, to clothe). A good plough will perhaps last twenty years; all through that time the owner should be getting back by its use the benefit of the labour andcapital spent in making it. When it is worn out, he ought to have all the capital it cost paid back, with some increase or interest. Capital invested in railway wagons should pay itself back during the ten years that the wagons last on an average.
The capital invested in any work may always be said to consist of wages or what is bought with wages. Thus the capital invested in railways really consisted of the food, clothes, and other commodities consumed by the labourers who made the railways. It is true that tools also were needed as well as the iron rails, sleepers, bricks, and other materials required for the work. But as these things had previously been made by labour, we may consider that the capital really invested in them was the wages of the labourers who had already made them. Thus,when we go far enough back, we always find that the capital invested consisted of the maintenance of labourers.
36. Investment of Capital.We have two things to consider with regard to the investment of capital,firstly, the quantity of the capital,and secondly, the length of time for which it is invested. The same quantity of capital will keep more or less men at work, according as it is invested for shorter or longer periods. A man in growing potatoes only needs to wait for the result of his labour during one year on an average. If his food and clothing during one year cost thirty pounds, then capital worth thirty pounds is sufficient to keep him at work in this way. Three men cultivating potatoes will of course require three times as much capital, or ninety pounds worth; ten men will need three hundred pounds worth, and so on in proportion. But in growing vines it is necessary to wait several years after the vines are planted before they begin to bear. Suppose it to require five years waiting, then the labourer will want 5 x 30, or one hundred and fifty pounds worth of capital before he can grow vines. Three vine-growerswill want 3 × 5 × 30, or four hundred and fifty pounds worth of capital; ten men, 10 × 5 × 30, or fifteen hundred pounds worth, and so on in proportion. Thus we see clearly that the capital required in any kind of industry is proportional to the number of men employed, and also to the length of time for which the capital remains locked up, or invested on the average. But there is no fixed proportion whatever between the number of labourers and the capital they require—it entirely depends upon the length of time in which the capital is turned over, that is, invested, and got back again. A poor savage manages to live on a few days' capital in hand; a potato grower on one year's capital. On a modern farm in which many durable improvements are made, the quantity of capital required is very much greater. To employ men upon a railway requires immense capital, because so much of it is sunk in a very fixed and durable form in the embankments, tunnels, stations, rails, and engines.
37. Labour cannot be Capital.It is not uncommon to hear it said thatlabour is the poor man's capital; and then it is argued that the poor man has just as much right to live upon his capital as the rich man upon his. And so he has, if he can do it. If a labourer can go and produce any kind of wealth, and exchange it for food and necessaries, of course he may do so. But, as a general rule, he cannot do this without working for a length of time, waiting till the produce is finished and sold. In order to do this he wants something more than his labour, namely, his food in the meantime, besides materials and tools. These form the required capital, and there is no good in calling labour capital when it is really quite a different thing. At other times I have heard it said thatland is capital, intelligence is capital, and so forth. These are all misleading expressions. The intended meaning seems to be that some people live upon what they get from land, or from intelligence, as other people live upon what theyget as interest upon capital. Nevertheless, land is not capital, nor is intelligence capital. Production requires, as we have seen, three distinct things, namely, land, labour, and capital; and there is much harm in confusing things together by giving them the same name when they are not the same thing.
38. How Wealth is Shared.We have learned what wealth is, how it is to be used, and how it may be produced in the greatest quantities, with the least possible labour, but we have yet to enter on the more difficult parts of our subject. We must now try to make out how wealth is shared among those who have a hand in producing it. The requisites of production, as we have seen, are land, labour, and capital; if these were all supplied by the same person, no doubt the produce ought all to belong to him, with the exception of what is taken by the government as taxes. But, in a state of society such as exists at present, the labourer seldom owns all the land and capital he uses; he goes to work on another man's farm, or in another man's factory; he lives in another man's house, and often eats another man's food; he derives benefits from other men's inventions, and discoveries; and he uses roads, railways, public buildings, &c., furnished at the cost of the community.
The production of wealth, therefore, depends not on the will and exertions of a single man, but on the proper bringing together of land, labour, and capital, by different persons and classes of persons. These different persons must have their several shares of the wealth produced; if they furnish something requisite for producing, they can make a bargain and ask for more or less of the produce. Butit is not mere chance or caprice which governs the sharing of wealth, and we have to learn the natural laws according to which the distribution takes place. We must ascertain how it is that many of the population get so little, and some so much. Men work very hard on a farm and raise crops; the landlord comes and takes away a large part as rent, so that the labourers have barely enough to live upon. When we are able to understand why the labourer gets so little at present, we shall see, perhaps, how he might manage to get more, but in any case we shall see that it is due in great part to the laws of nature.
The part of our subject which we are now going to consider is called thedistribution of wealth, because it teaches us how the wealth produced is distributed (Latin,dis, apart, andtribuere, to allot) between the labourers, the owners of land, the owners of capital, and the government. The part which the labourer gets is calledwages; the share of the land owner is calledrent; that of the capitalist isinterest; and the government taketaxes. We may say that, as a general rule, the produce of work is divided into four shares, which may be thus shown:
produce = wages + rent + interest + taxes.
39. The Labourer's Share—Wages.It ought to be carefully remembered that the nameswages,rent, andinterest, as here used, do not exactly agree in meaning with the names as we employ them in common life. The wages paid to workmen are sometimes more than wages, being partly interest; the rent almost always consists partly of interest; and what is called interest may in some degree be really wages or rent.
Bywageswe mean, in political economy, nothing but what goes to pay for the trouble of labour. But many workmen own their own tools; masons have a boxful of chisels, mallets, rules, &c.; carpenters often require twenty or thirty pounds' worth of planes and other implements; a pianoforte maker sometimes owns seventy pounds' worth of tools; even gardeners require spades, rakes, a barrow, scythe, or perhaps a mowing machine and a roller. Now, all such tools represent so much invested capital, and a certain amount of interest must be paid for this capital. A pianoforte maker might expect five pounds a year as interest upon the cost of his tools. But true wages, are what remains after allowance has been made for such interest, and it would be proper to subtract also what is paid to the government as taxes.
40. The Land Owner's Share—Rent, the second part of the produce, means, in political economy, what is paid for the use of a natural agent, whether land, or beds of minerals, or rivers, or lakes. The rent of a house or factory is, therefore, not all rent in our meaning of the word. Capital has been spent in building the house or factory, and interest must be paid on this capital; we must then deduct this interest from what is commonly called the rent, before we can find out what is really rent. The ground rent of a house is the rent paid for the ground on which it stands, and this will be more nearly the true rent, apart from interest. Similarly, the ordinary rent of a farm will usually include interest upon the capital spent on the farm buildings, roads, gates, fences, drains, and other improvements. We shall afterwards learn exactly how true rent arises.
41. The Capitalist's Share.The proper share of the capitalist isinterest; but this is usually a good deal less than what actually remains in the hands of the capitalist. Business is generally carried on by some capitalist who rents a piece of land, builds a factory, purchases machinery, and then employs men to work the machinery, paying them wages. The capitalist himself often acts as manager, and works every day almost as long as the workmen. When the goods are finished and sold, he keeps the whole of the money he gets for them; but then he has already paid out a large sum as wages, while the goods were being made; another part goes to pay therent of the land which he has hired. Having struck off these portions, there ought to remain a certainprofit, part of which he uses to live upon. But even this profit consists of more than interest upon his capital. It should include also a payment for his labour in superintending the business. The manager of a factory may seldom touch the cotton, flax, iron, or other material, which is manufactured; nevertheless, he works with his head and his pen, calculating the prices at which he can produce goods, inquiring where he can buy the materials most cheaply, choosing good workmen, keeping the accounts straight, and so on. Severe mental labour is really far more difficult and exhausting than manual labour; and in raising up a good business, and carrying it through times of danger, a manager has to undergo great anxiety and mental fatigue. Thus, it is necessary that a successful manager should receive a considerable share of the produce, so as to make it worth his while to give this labour. His share is calledthe wages of superintendence, and, although usually much larger than the share of a common labourer, it is really wages of the same nature.
Another part of the capitalist's so-called profit ought to be laid aside asrecompense for risk. There is always more or less uncertainty in trade, and even the most skilful and careful manager may lose money by circumstances over which he has no control. Sometimes, after building a factory, the demand for the goods which he is going to produce falls off; sometimes the materials cannot be bought; perhaps it is discovered, when too late, that the factory has been built in an unsuitable place; occasionally, too, the workmen are discontented, and refuse to work for such wages as the capitalist can afford to pay. Now, whenever any of these mistakes or misfortunes happen, it is the capitalist who mainly suffers, because he loses a great deal of money, on which he might otherwise have livedcomfortably. Sometimes men who have worked hard all their lives, and grown rich by degrees, lose all their wealth again in the end, by some error of judgment or by some unfortunate event due to no fault of their own.
A capitalist, then, must have some inducement for running into these disagreeable risks; by lending his capital to the government he might get interest for it, and be nearly sure not to lose. If, then, he puts it into trade, and runs the risk of loss, he must have a recompense for the risk. This ought to be at least enough to make the profits of the successful business balance the losses of the unfortunate ones, so that on the average capitalists will get the interest of capital and the wages of superintendence free from loss. We may say, then, that—
profit = wages of superintendence + interest + recompense for risk.
42. About Interest.That which is paid for the use of capital altogether apart from what is due for the trouble and risk of the person conducting the business, is calledinterest. This interest, of course, will be greater or less according as the amount of capital is greater or less; it will also be greater or less according as the capital is employed for a longer or shorter time. Thus the rate of interest is always stated in proportion to the capital sum and to the time;five per cent. per annummeans that, for every hundred pounds of capital, five pounds are paid during every year in which the capital is used, and in the same proportion for longer or shorter times.
The rates of interest actually paid in business vary very much, from one or two per cent. up to fifty per cent. or more. When the rate is above five or six per cent., it will be to some extent not true interest, but compensation for the risk of losing the capital altogether. To learn the true average rate of interest, we must inquire what is paid for money lent to those who are sure to pay it back, and who give property inpledge, so that there may be no doubt about the matter. It seems probable that the true average rate of interest in England is at present about four per cent., but it varies in different countries, being lower in England and Holland than anywhere else. In the United States it is probably six or seven per cent.
The most important fact aboutinterestis thatit is the same in one business as in another. The rates of profit differ very much, it is true, but this is because the labour of superintendence is different, or because there is greater risk in one trade than another. But the true interest is the same, because capital, being lent in the form of money, can be lent to one trade just as easily as to another. There is nothing in circulating capital which fits it for one trade more than another: accordingly it will be lent to that trade which offers ever so little more interest than other trades. Thusthere is a constant tendency to the equality of interest in all branches of industry.
43. Money Wages and Real Wages.Wages, as we have already learnt, are the payments received by a labourer in return for his labour. It does not matter whether these payments are received daily, weekly, monthly, quarterly, or yearly. A day gardener is, perhaps, paid every evening; an artisan is usually paid on Saturday or Friday night, or sometimes fortnightly; clerks receive their salaries monthly; managers, officers, secretaries, and others, are paid quarterly, or sometimes half-yearly. When the wages are paid monthly, or at longer intervals, they are generally calledsalary(Latin,salarium, money given to Roman soldiers for salt); but if the salary is paid for labour and nothing else, it is exactly the same in nature as wages.
I said, in the last chapter, that wages consist of a share of the produce of labour, land, and capital; in the preceding paragraph, I have been saying that it consists of payments. Here arises one of the great difficulties of our subject. As a matter of fact, the wages received by labourers, in the present day, consist almost always of money. A person working in a cotton mill produces cotton yarn; but he does not receive at the end of the week so much cotton yarn; he receives so many shillings. This is much more convenient; for if the labourer received cotton yarn, or any other commodity which he produces, he would have to go and sell it in order to buy food and clothes, and to pay the rent of his house. Instead, then, of receiving an actual share of the produce, he receives from the capitalist as much money as is supposed to be equal in value to his share.
Now, we shall see that it is requisite to distinguish betweenmoney wagesandreal wages. What a labourer really works for is the bread, clothes, beer, tobacco, or other things which he consumes; these form the real wages. If he gets more of these, it does not matter whether he gets more or less money wages; he cannot eat money, or use it in any way except to spend it at shops. If corn or cotton becomes dearer, the wages of every workman are really lessened; because he can buy less corn or cotton with his money wages. On the other hand, everything which makes goods cheaper, increases the real wages of workmen; because they can get more of the goods in exchange for the same money wages. People are accustomed to think far too much about the number of shillings they get for a day's work; they fancy that, if they get 25 per cent. more money wages, they must be 25 per cent. more wealthy. But this is not necessarily the case; for if the prices of goods on the average have also risen 25 per cent, they will be really no richer nor poorer than before.
We now begin to see that to increase the productiveness of labour is really the important thing for everybody. For if anything, such as cotton cloth, can be made with less labour, it can be sold more cheaply, and everybody can buy more of it for the same money, and thus be better clothed. If the same were the case with other goods, so that linen, stockings, boots, bricks, houses, chairs, tables, clocks, books, &c., were all made in larger quantities than before, with the same labour, everybody in the country would be better supplied with the things which he really wishes to have.
It is certain thata real increase of wages to the people at large is to be obtained only by making things cheaply. No doubt a tradesman gains sometimes when the goods he deals in become dearer, but to the extent that they are dearer, all consumers of the goods lose, because they can enjoy less comforts and necessaries. But, if goods are made cheaply, all consumers gain thereby, and, all people being consumers, all gain so far as they use the cheapened articles. Nor does it follow that artisans and tradespeople suffer by the cheapening of goods. If, owing to some invention, much greater quantities are made with the same labour, the artisan will probably be able to sell his share of the produce for more than before, that is, his wages will rise instead of falling by the cheapening of the produce. The tradesman, again, may gain less on each separate article that he sells, but he may sell so much more than before, that his total profits may be increased. The result to which we come is, then, thatall increase of produce, and cheapening of goods tends to the benefit of the public, and this is the true way in which people are made richer.
44. How Differences of Wages arise.It is very important to understand rightly the reasons of the great differences which exist between the rates of wages paid in different occupations. Some kinds oflabourers are paid a hundred or even a thousand times as much for a day's work as others, and it may seem very unfair that there should be such great differences. We must learn to see that this is the necessary result of the various characters and abilities of persons, partly arising from the actual strength of mind and body with which they were born, partly from the opportunities of education and experience which they have happened to enjoy. We are often told that all men are born free and equal; however this may be in a legal point of view, it is not true in other ways. One child is often strong and stout from its earliest years; another weakly and unfit for the same exertion. In mind there are still more remarkable differences.
The rates of wages in different employments are governed bythe laws of supply and demandwhich we shall afterwards consider. Just as goods rise in price when there is little in the market and much is wanted, so the price of men's labour rises when much of any particular kind is wanted and little is to be had. It does not matter much whether we speak of demand for goods or demand for the labour, which is necessary to make the goods. If more things of a certain sort are wanted, then more men able to make them must be found. If I buy an aneroid barometer, I use up the labour of a man able to make such a barometer; if many people take a fancy to have aneroid barometers, and only a few workmen have the necessary skill to make them, they can ask a high price for their labour. It is true that people buying barometers do not usually pay the workmen for making them; a man with capital gets the barometers made beforehand and puts them in shops ready for sale. The capitalist advances the wages of the workmen, but this is only for a few weeks or months, and according as the demand for barometers is brisk or slow, he employs more or fewer workmen. Thus,demand for commodities comes to nearly, though not quite, the same thing as demandfor labour. There is the profit of the capitalist to be considered as well; but, with this exception,rates of wages are governed by the same laws of supply and demand as the prices of goods.
Anything, then, which affects the numbers of men able and willing to do a particular kind of work, affects the wages of such men. Thus the principal circumstance governing wages is the comparative numbers of persons brought up with various degrees of strength, both of body and mind. The greater number of ordinary men, while in good health, have sufficient strength of arms and legs to do common work; the supply of such men is consequently very large, and, unless they can acquire some peculiar knowledge or skill, they cannot expect high wages. Dwarfs and giants are always much less common than men of average size; if there happened to be any work of importance which could only be done by dwarfs or giants, they could demand high wages. Dwarfs, however, are of no special use except to exhibit as curiosities; very large strong men, too, are not generally speaking of any particular use, because most heavy work is now done by machinery. They can, however, still get very high wages in hewing coal, or puddling iron, because this is work, requiring great strength and endurance, which is not yet commonly done by machinery. Iron puddlers sometimes earn as much as £250 a year.
It is great skill and knowledge which generally enable a man to earn large wages. Rich people like to get the best of everything, and thus the few people who can do things in the best possible way can ask very high prices. Almost any one can sing badly; but hardly any one can sing as well as Mr. Sims Reeves: thus he can get perhaps £20 or £30 for every song which he sings. It is the same with the best artists, actors, barristers, engineers. An artist is usually his own capitalist, for he maintains himself during many months, or even years, while he is painting a great picture; if he succeeds in doing it excellently well, he can sell the picture for thousands of pounds, because there are many rich people who wish to possess good pictures.
45. Adam Smith on Wages.There are, however, various circumstances which cause wages in any particular employment to be higher or lower than in other employments, and we had better attend to what Adam Smith has said on this subject. He mentioned five principal circumstances which make up for small wages in some occupations, and balance great wages in other ones, as follows:
(1.)The Agreeableness or Disagreeableness of the Employments themselves.If an employment is in itself comparatively pleasant, it attracts many who would not otherwise go into it at the current wages. Thus, officers of the army and navy are not on the average highly paid; but there is never any difficulty in finding men willing to be officers, because the work is thought to be easy, and there is honour and power attaching to it. On the other hand, a good butcher makes high wages, because his business is a greasy one, besides being thought to be cruel, and a clever man must be attracted to it by good earnings.
(2.)The Easiness and Cheapness, or the Difficulty and Expense of learning the Occupation.This circumstance always has much importance, because the greater number of the people are poor, and are consequently unable to give their children a long good education. Thus, the larger part of the young men who grow up are only fit for common manual employments, and therefore get low wages. To learn a profession, like that of an architect or engineer, it is requisite to pay a high premium, and become a pupil in a good office, and then there are many years to be spent in practising and waiting before profit begins to be made. Hence the comparatively few who succeed in the difficult professions gain very high wages.
(3.)The Constancy or Inconstancy of Employment.When a man is sure of being employed and paid regularly all the year round, he is usually willing on that account to accept a less rate of wages. Thus, there is little difficulty in finding men to be policemen at about 25 shillings a week; for though they have to go on duty at night, and their work is often tedious and disagreeable, yet policemen are nearly sure to have employment as long as they behave well. A carpenter or bricklayer, on the contrary, is sometimes thrown out of work, and becomes anxious as to the means of keeping his family. Masons and bricklayers, who cannot work during frosty weather, ought of course to have higher wages during the rest of the year, so as to make up a good average. Dock-labourers, who are simply strong men without any particular skill, earn large wages when trade is brisk and many ships come into the docks; at other times, when trade is slack, or when contrary winds keep ships out of port, they often fall into destitution through want of employment.
(4.)The Small or Great Trust which must be reposed in those who exercise the Employments.This circumstance considerably affects the supply of people suitable for certain occupations. A man cannot expect to get employment in a bank, or in a jeweller's shop, unless he has a good character. Nothing is more difficult than for a person convicted of dishonesty to find desirable employment. Thus, a good character is often worth a great deal of money. Honesty, indeed, is so far common that it does not alone command high wages; but it is one requisite. The cleverest man would never be made the manager of a large business, if there was reason to think that he had committed fraud.
(5.) Lastly,The Probability or Improbability of Success in Employments greatly affects the Wages of those who succeed. In some cases, a man can hardly avoid succeeding; if he once enlists, he is made into a soldier whether he likes it or not. Almost all, too, who become clerks in banks, counting-houses, or public offices, can succeed in doing some of the work required in such offices. Accordingly clerks are seldom highly paid. But of those who become barristers, only a few have the peculiar knowledge, tact, and skill required to make them successful; these few make very large gains, and the unsuccessful men have to seek for other employments.
Some occupations are very badly paid, because they can be taken up by men who fail in other work. Frequently a person who has learnt a trade or profession finds that he is unfit for it; in other cases, there is a failure in the demand for a commodity, which obliges its manufacturers to seek other work. Such people are usually too old and too poor to begin again from the beginning, and learn a new difficult trade. Thus they have to take to the first work they can do. Educated men who have not been successful become secretaries, house-agents, insurance-agents, small wine merchants, and the like. Uneducated men have to drive cabs, or go into the army, or break stones; poor women become seamstresses, or go out charing. Here again we see the need of leaving everybody at perfect liberty to enter any trade which he can manage to carry on; it is not only injurious to the public, but it is most unfair to people in misfortune, if they are shut out of employments by the artificial restrictions of those who already carry on those employments.
46. What is a Fair Day's Wages?It is a favourite saying thata man should have a fair day's wages for a fair day's work; but this is a fallacious saying. Nothing, at first sight, can seem more reasonable and just; but when you examine its meaning, you soon find that there is no real meaning at all. It amounts merely to saying, thata man ought to have what he ought to have. There is no way of deciding what is a fair day's wages. Some workmen receive only a shilling a day; others two, three, four, or five shillings; a few receive as much as ten, or even twenty shillings a day; which of these rates is fair? If the saying means that all should receive thesamefair wages, then all the different characters and powers of men would first have to be made the same, and exactly equalised. We have seen that wages vary according to the laws of supply and demand, and as long as workmen differ in skill, and strength, and the kind of goods they can produce, there must be differences of demand for their products. Accordingly, there is no more a fair rate of wages than there is a fair price of cotton or iron. It is all a matter of bargain; he who has corn or cotton or iron or any other goods in his possession, does quite right in selling it for the best price he can get, provided he does not prevent other people from selling their goods as they think best. So, any workman does quite right in selling his labour for the highest rate of wages he can get, provided that he does not interfere with the similar right of other workmen to sell their labour as they like.
47. The Purposes of Trades-Unions.Working-men commonly think that the best way to raise their earnings is to form trades-unions, and oblige their employers to pay better wages.A trades-union is a society of men belonging to any one kind of trade, who agree to act together as they are directed by their elected council, and who subscribe money to pay the expenses.Some trades-unions are very different fromothers, and they are not all well conducted nor all badly conducted, any more than people are all well behaved or all badly behaved. Moreover, the same trades-union often does different kinds of business. Usually they act as benefit or friendly societies, that is to say, if a member of a trades-union pays his subscription of say one shilling weekly, together with an entrance-fee and other small payments, he has a right, after a little time, to receive say twelve shillings a week in case of illness; he gets back the value of his tools if they should happen to be burnt or lost; when thrown out of work he will enjoy say ten shillings a week for a certain length of time; if he is so unfortunate as to be disabled by accident, he receives a good sum of money as an accident benefit; and when he dies he is buried at the expense of the union. All these arrangements are very good, for they insure a man against events which are not usually under his own control, and they prevent workmen from becoming paupers. So far as trades-unions occupy themselves in this way, it is impossible not to approve of them very warmly.
Then, again, trades-unions are able to take care of their members by insisting that employers shall make their factories wholesome and safe. If a single workman were to complain that the workshops were too hot, or that a machine was dangerous, or a mine not properly ventilated, he would probably not be listened to, or would be told to go about his business. But if all the workmen complain at once, and let it be known that they do not intend to go on working unless things are made better, the employer will think about the matter seriously, and will do anything that is reasonable to avoid disputes and trouble. Everybody is justified in taking good care of his own life and health, and in making things as convenient to himself as possible. Therefore we cannot find fault with workmen for discussing such matters among themselves, and agreeing upon the improvements theythink right to demand. It is quite proper that they should do so.
But nobody is perfectly wise, and those who have not much time to get knowledge, and learn science and political economy, will often not see the effects of what they demand. They may ask for something which is impossible, or would cost so much as to stop the trade altogether. In all such matters, therefore, working-men should proceed cautiously, hearing what their employers have to say, and taking note especially of what the public opinion is, because it is the opinion of many who have nothing to lose or gain in the matter.
48. The Regulation of Hours.One of the principal subjects of dispute is usually the number of hours in the day that a workman should work. In some trades a man is paid by the hour or by the work done, so that each man can labour a longer or shorter time as he prefers. When this is the case, each man is the best judge of what suits him, and no trades-union ought to interfere. But in factories, generally speaking, it would not do to let the men come and go when they liked; they must work while the engines and machines are moving, and while other men need their assistance. Accordingly, somebody must settle whether the factory is to work for twelve, or ten, or nine, or eight hours a day. The employer would generally prefer long hours, because he would get more work and profit out of his buildings and machines, and he need not usually be on the spot all the time himself. It seems reasonable, then, that the workmen should have their opinion, and have a voice in deciding how long they will work.
But workmen are likely to be mistaken, and imagine that they may get as much wages for nine hours' work as for ten. They think that the employer can raise the price of his goods, or that he can well afford to pay the difference out of his own great profits. But if political economy is to be believed, the wages ofworkmen are really the value of the goods produced, after the necessary rent of land and interest of capital have been paid. If factories, then, produce less goods in nine hours than in ten, as is usually the case, there cannot, in the long run, be so much wages to receive. On the other hand, as machinery is improved, labour becomes more productive, and it is quite right that those who are sufficiently well paid should prefer, within reasonable limits, to lessen their hours of work rather than increase their earnings. This is a matter which depends upon many considerations, and it cannot be settled in this Primer. What I should conclude is, that when workmen want to lessen their hours of work, they ought not to ask the same wages for the day's work as before. It is one thing to lessen the hours of work; it is another thing to increase the rate of wages per hour, and though both of these things may be rightly claimed in some circumstances, they should not be confused together.
49. The Raising of Wages.The principal object of trades-unions, however, is to increase the rate of wages. Working men seem to believe that, if they do not take care, their employers will carry off the main part of the produce, and pay very low wages. They think that capitalists have it all their own way unless they are constantly watched, and obliged to pay by fear of strikes. Employers are regarded as tyrants who can do just as they like. But this is altogether a mistake. No capitalists can for more than a year or two make unusual profits, because, if they do, other capitalists are sure to hear of it, and try to do likewise. The result will be that the demand for labourers in that kind of trade will increase; the capitalists will bid against each other for workmen, and they will not, generally speaking, be able to get enough without raising the rate of wages.
There is no reason whatever to think that trades-unions have had any permanent effect in raising wages in the majority of trades. No doubt wages are nowmuch higher than they were thirty or forty years ago; but to a certain extent this is only a rise of money wages, due to the abundance of gold discovered in California and Australia. The rest of the increase can be easily accounted for by the great improvements in machinery, and the general prosperity of the country. It is certain, too, that the increase of wages is not confined to those trades which have unions; even common labourers who have no unions receive considerably more money wages than they did, and domestic servants, who never strike in a body, but simply leave one place when they can get a better, have raised their own wages quite as much as any union could have done it for them.
50. Strikes and Lockouts.Workmen are said to strike, that is, to strike work, when a number of them agree together to cease working on a certain day for certain employers, in order to oblige these employers to pay better wages, or in some way to yield to their demands. When one or more employers suddenly dismiss their workpeople altogether, in order to oblige them to take lower wages, or agree to some alteration of work, it is calleda lockout, and alockout is nearly the same as a strike of the employers. Strikes sometimes last for many months, the workmen living on what savings they have, and on contributions sent to them by workmen or unions in the same or other trades. The employers at the same time lose much money by their factories standing still, and they sometimes receive aid from other employers.
There is nothing legally or morally wrong in a strike or lockout when properly conducted. A man, when free from promises or contracts, has a right to work or not to work, as he thinks best, that is to say, the law regards it as beneficial to the country, on the whole, that people should be free to do so. Similarly, employers are free to work their mills or not as they like. Neither employers nor employed, indeed, must breakengagements; men who have promised to work to the end of the week must of course do so; they are not free till their promise is performed. Again, nobody should be allowed suddenly to stop work in a way endangering other people. Enginedrivers and guards in America sometimes strike when a train is halfway on its journey, and leave the passengers to get to the next town as they best can. This is little better than manslaughter. Neither the owners nor the workmen in gasworks, waterworks, or any other establishment on which the public depends for necessaries of life, should be allowed suddenly to stop work without notice. The safety of the public is the first consideration. The law ought therefore to punish those who make such strikes.
51. The General Effect of Strikes.There is not space in this little work to argue the matter out in detail, but I have not the least doubt thatstrikes, on the whole, produce a dead loss of wages to those who strike, and to many others. I believe that if there had not been a strike during the last thirty years, wages would now be higher in general than they are, and an immense amount of loss and privation would also have been saved. It has, in fact, been shown by Dr. John Watts of Manchester, in his "Catechism of Wages and Capital," that even a successful strike usually occasions loss. He has said, "Allowing for accidental stoppages, there will not be in the most regular trades above fifty working weeks in the year, and one week will therefore represent two per cent. of the year. If a strike for four per cent. rise on wages succeeds in a fortnight, it will take twelve months' work at the improved rate to make up for the lost fortnight; and if a strike for eight per cent. lasts four weeks, the workmen will be none the richer at the end of twelve months; so that it frequently happens that, even when a strike succeeds, another revision of wages takes place before the last loss is made up; a successful strike is, therefore, like a successful lawsuit—only less ruinous than an unsuccessful one." If we remember that a large proportion of strikes are unsuccessful, in which case of course there is simple loss to every one concerned; that when successful, the rise of wages might probably have been gradually obtained without a strike; that the loss by strikes is not restricted to the simple loss of wages, but that there is also injury to the employers' business and capital, which is sure to injure the men also in the end; it is impossible to doubt that the nett result of strikes is a dead loss. The conclusion to which I come is that,as a general rule, to strike is an act of folly.
52. Intimidation in Strikes.Those who strike work have no right to prevent other workmen from coming and taking their places. If there are unemployed people, able and willing to work at the lower wages, it is for the benefit of everybody, excepting the strikers, that they should be employed. It is a question of supply and demand. The employer, generally speaking, is right in getting work done at the lowest possible cost; and, if there is a supply of labour forthcoming at lower rates of wages, it would not be wise of him to pay higher rates.
But it is unfortunately common for those who strike to endeavour to persuade or even frighten workmen from coming to take their places. This is as much as to claim a right to the trade of a particular place, which no law and no principle gives to them. A strike is only proper and legal as long as it is entirely voluntary on the part of all concerned in refusing to work. When a striker begins to threaten or in any way prevent other people from working as they like, he commits a crime, by interfering with their proper liberty, and at the same time injuring the public. Men are free to refuse to labour, but it is absolutely necessary to maintain at the same time the freedom of other men to labour if they like. The same considerations, of course, apply to lockouts; no employer who locks outhis workmen has any right to intimidate, or in any way to oblige other employers to do the same. No doubt voluntary agreements are made between employers, and lockouts are jointly arranged, just as extensive strikes are arranged beforehand. If any employers were to go beyond this and threaten to injure other employers if they did not join in the lockout, they should be severely punished. But such a case seldom or never occurs. Thus, strikes and lockouts are proper only as mere trials, to ascertain whether labour will be forthcoming at a certain rate of wages, or under certain conditions.
If the workmen in a trade are persuaded that their wages are too low, then a strike will show whether it is the case or not; if their employers find themselves unable to get equally good workmen at the same wages, they will have to offer more; but if equally good can be got at the old rate, then it is a proof that the strikers made a mistake. Their wages were as good as the state of trade warranted. It is all a matter of bargain, and of supply and demand. Those who strike work are in the position of those who, having a stock of goods, refuse to sell it, hoping to get a better price. If they make a mistake, they must suffer for it, and those who choose to sell their goods in the meantime will have the benefit. But it is plain that it would never do to allow one holder of goods to intimidate and prevent other holders from selling to the public. It is worthy of consideration whether even voluntary combinations of dealers should not be prohibited, because they are often little better than conspiracies to rob the public. The good of consumers, that is, of the whole people, is what we must always look to, and this is best secured when men act freely and compete with each other to sell things at the cheapest rates.
53. Trades-Union Monopolies.It cannot be denied that, in certain trades, the men may succeed to some extent in keeping their wages above the natural level by union. Wages, like the prices of goods, aregoverned by the laws of supply and demand. Accordingly, if the number of hat-makers can be kept down it reduces the number of hats that can be made, raises their prices, and enables the hat-makers to demand higher wages than they otherwise could do. Many unions try thus to limit production by refusing to admit more than a fixed number of apprentices, and by declining to work with any man who has not been brought up to the trade. It is probable that, where a trade is a small one, and the union powerful, there may be some success. The trade becomes a monopoly, and gets higher wages by making other people pay dearer for the goods they produce. They raise a tax from the rest of the nation, including all the workmen of other trades. This is a thoroughly selfish and injurious thing, and the laws ought by all reasonable means to discourage such monopolies. Moreover, monopoly is extremely hurtful in the long run to the working classes, because all the trades try to imitate those which are successful. Finding that the hatters have a strong union, the shoemakers, the tailors, and the seamstresses try to make similar unions, and to restrict the numbers employed. If they could succeed in doing so, the result would be absurd;they would all be trying to grow richer by beggaring each other. As I have pointed out in theLogic Primer(section 177, p. 117), this is a logical fallacy, arising from the confusion between a general and a collective term.Because any trade separately considered may grow richer by taxing other trades, it does not follow that all trades taken together, and doing the same thing, can grow richer.
No doubt, working men think that, when their wages are raised, the increase comes out of the pockets of their employers. But this is usually a complete mistake; their employers would not carry on business unless they could raise the prices of their goods, and thus get back from purchasers the increased sum whichthey pay in wages. They will even want a little more to recompense them for the risk of dealing with workmen who strike at intervals, and thus interrupt business. It is the consumers of goods who ultimately pay the increased wages, and though wealthy people no doubt pay a part of the cost, it is mainly the working people who contribute to the higher wages of some of their own class.
The general result of trades-union monopolies to the working people themselves is altogether disastrous. If one in a hundred, or one in a thousand is benefited, the remainder are grievously injured. The restrictions upon work which they set up tend to keep men from doing that which they are ready and willing to do. The lucky fatten at the cost of those whom they shut out in want of work, and the strikes and interruptions of trade, occasioned by efforts to keep up monopolies, diminish the produce distributed as wages.
54. Professional Trades-Unions.We often hear the proceedings of trades-unions upheld on the ground that lawyers, doctors, and other professional men have their societies, Inns of Court, or other unions, which are no better than trades-unions. This is what may be called atu quoque(thou also) argument. "We may form unions because you form unions." It is a poor kind of argument at best; one man acting unwisely is no excuse for another doing so likewise. I am quite willing to allow that many of the rules of barristers and solicitors are no better than those of trades-unions. That a barrister must begin to be a barrister by eating certain dinners; that he must never take a fee under a certain amount; that he must never communicate with a client except through a solicitor; that a senior counsel must always have a junior; and most of the rules of the so-calledetiquetteare clearly intended to raise the profits of the legal profession. Many things of this kind want reform. But, on the other hand, these unions avoid many of the faults of trades-unions. There is no limit to the number ofpersons who may enter them; all men of good character and sufficient knowledge can become barristers and solicitors. Moreover, the entrance to the legal, medical, and several other professions is being more and more regulated by examinations, which are intended purely to secure able men for the service of the public. Nor is any attempt made in these professional trades-unions to prevent men from exerting themselves as much as they can, so as to serve the public to the utmost of their ability. These professional trades-unions are thus free fromsomeof the evils which other unions produce.
55. The Fallacy of Making Work.One of the commonest and worst fallacies into which people fall in political economy is to imagine that wages may be increased by doing work slowly, so that more hands shall be wanted. Workmen think they see plainly that the more men a job requires, the more wages must be paid by their employers, and the more money comes from the capitalists to the labourers. It seems, therefore, that any machine, invention, or new arrangement which gets through the work more quickly than before, tends to decrease their earnings. With this idea, bricklayers' labourers refuse (or did lately refuse) to raise bricks to the upper parts of a building by a rope and winch; they preferred the old, laborious, and dangerous mode of carrying the bricks up ladders in hods, because the work then required more hands. Similarly, brickmakers refused to use any machinery; masons totally declined to set stones shaped and dressed by machinery; some compositors still object to work in offices where type-composing machines are introduced. They are all afraid that if the work is done too easily and rapidly, they will not be wanted to do it; they think that there will be more men than there are berths for, and so wages will fall. In almost every case this is an absurd and most unfortunate mistake.
No doubt, if men insist on sticking to a worse way of doing work after a better one has been invented,they may get bad wages, and perhaps go to the workhouse in old age. Thus, the hand-weavers in Spitalfields would continue weaving by hand, instead of learning to weave by steam power, and the case is somewhat the same with the hand-nailers of South Staffordshire. But when the younger workmen of a trade are wise and foreseeing enough to adopt a new invention as soon as it is successful, they are never injured, and usually much benefited by it. Seamstresses in England received wretchedly poor wages before the introduction of the American sewing machine, and they thought they would be starved altogether when the same work could be done twenty times as fast by machine as by hand. The effect, however, has been just of the opposite kind. Those who were not young, skilful or wise enough to learn machine-sewing, receive better wages for hand-sewing than they would formerly have done. The machine sewers earn still more, as much in many cases as 20s. a week. The explanation of this is that, when work is cheapened, people want much more of it. When sewing can be done so easily, more sewing is put into garments, and the garments being cheapened, more are bought. At the same time a good deal of the sewing, and finishing, and fitting, cannot be done by machinery, and this furnishes plenty of employment for those who cannot work machines.
If masons were to employ machines for cutting stone, they would be benefited like the seamstresses, instead of being injured. The cost of cutting stone by hand is now so great that people cannot build many stone buildings, nor use stone to decorate brick buildings, unless they are wealthy people. Were the dressing of stone much cheapened by the aid of machinery, a great deal more stone would be used, and the masons, instead of labouring at the dull work of cutting flat surfaces, would find plenty of employment in finishing, and carving, and setting the machine-shaped stones. I have not the least doubt that, inaddition to those engaged in working the machines, there would in the end be more masons wanted after the general introduction of machines than before. With type-setters the same thing will happen, if they take betimes to the new type-composing machines. It is true that a man with the aid of a good machine can set types several times as fast as without. But though the wages paid for setting a certain number of types might thus be reduced, so many more books, pamphlets, newspapers, and documents of various kinds would be printed, that no want of employment could be felt. Much of the work, too, such as the justifying, correcting, making into pages, &c., cannot be done by machinery, or not profitably, so that there would be plenty of work even for those who would not consent to work machines.
The fact is thatwages are increased by increasing the produce of labour, not by decreasing the produce. The wages of the whole working population consist of the total produce remaining after the subtraction of rent, interest, and taxes. People get high wages in Lancashire because they use spinning machinery, which can do an immense quantity of work compared with the number of hands employed. If they refused to use machinery, they would have to spin cotton by hand like the poor inhabitants of Cashmere. Were there no machinery of any kind in England we should, nearly all of us, be as poor as the agricultural labourers of Wiltshire lately were.
People lose sight of the fact thatwe do not work for the sake of working, but for the sake of what we produce by working. The work itself is the disagreeable price paid for the wages earned, and these wages consist of the greater part of the value of the goods produced. It is absurd to suppose that people can become richer by having less riches. To become richer we must make more riches, and the object of every workman should be not to make work,but to make goods as rapidly and abundantly as possible.
56. Piece-Work.Some trades unions endeavour to prevent their members from earning wages by piece work, that is, by payment for the quantity of work done, instead of payment for the time spent in doing it. If a man is paid tenpence an hour, whether he work quickly or slowly, it is evidently for his interest to work slowly rather than quickly, provided that he be not so lazy as to run a risk of being discharged. It is a well known fact that men employed on piece-work do much more work in the same time than those employed on time jobs, and it is altogether better that they should be paid by the piece when the work done can be exactly measured and paid for. The men earn better wages because they are incited to do so much more, and they earn it more fairly, as a general rule. Trades-unions, however, sometimes object to piece-work, the reason given being that it makes the men work too hard, and thus injures their health. But this is an absurd reason; for men must generally be supposed capable of taking care of their own health. There are many trades and professions in which people are practically paid by the piece, but it is not found necessary to have trades-unions to keep them from killing themselves. There is more fear that people will work too little rather than too much.
The real objection which trades-unionists feel to piece-work is that it gets the work done quickly, and thus tends, as they think, to take employment away from other men. But, as I have already explained, men do not work for the sake of working, but for the sake of what they produce, and the more men in general produce, the higher wages in general will be. Trades-unionists put forward their views on the ground of unselfishness. They would say that it is selfish of Tom to work so as to take away employment from Dick and Harry; but they overlook the thousands of Toms, Dicks, and Harrys in other employments who getsmall wages indeed, and who are perhaps prevented by their rules from earning more. If the nation as a whole is to be wealthy and happy, we must each of us work to the best of our powers, producing the wealth which we can best produce, and not grudging others a greater success, if Providence has given them superior powers. People can seldom produce wealth for themselves without spreading a greater benefit over society in general, by cheapening commodities and lightening toil.
57. The Fallacy of Equality.Workmen often show a dislike to allowing one man to earn more than another in the same shop, and at the same kind of work. This feeling is partly due to the mistaken notion that in doing more work than others he takes employment from them. It partly, however, arises from a dislike to see one man better off than his mates. This feeling is not confined to workmen. Any one who reflects upon the state of society must regret that the few are so rich, and the many so poor. It might seem that the laws must be wrong which allow such differences to exist. It is needful to reflect, therefore, that such differences of wealth are not for the most part produced by the laws. All men, it has been said, are born free and equal; it is difficult to see how they can be born free, when, for many years after birth, they are helpless and dependent on their parents, and are properly under their governance. No doubt they ought to become free when grown up, but then they are seldom equal. One youth is stout, healthy and energetic; another puny and weak; one bright and intelligent; another dull and slow. Over these differences of body and mind the laws have no power. An Act of Parliament cannot make a weak frame strong. It follows that in after life some men must be capable of earning more than others. Out of every thousand men and women, too, there will be a few who are distinguished by remarkable talents or inventive genius. One man by patient labour andgreat sagacity invents a sewing machine, a telegraph, or a telephone, and he thus confers the greatest possible advantage upon other men for centuries after.
It is obviously to the advantage of everybody that those who are capable of benefiting society should be encouraged to do so by giving them all the reward possible, by patents, copyright, and the laws of property generally. To prevent or discourage a clever man in doing the best work he can, is certainly no benefit to other men. It tends to level all down to a low standard, and to retard progress altogether. Every man, on the contrary, who is incited to work, and study, and invent to the utmost of his powers, not only earns welfare for himself, but confers welfare upon other people. He shows how wealth may be created abundantly, and how toil may be lessened. What is true of great ability and great inventions is true, also, of the smallest differences of power or the slightest improvements. If one bricklayer's labourer can carry up more bricks than another, why should he be prevented from doing it? The ability is his property, and it is for the benefit of all that he should be allowed to use it. If he finds a better way of carrying bricks, of course it should be adopted in preference to worse ways. The purpose of carrying bricks is to get them carried and benefit those who want houses. Everything which makes it difficult and expensive to build houses, causes people to be lodged worse than they otherwise would be. We can only get things made well and cheaply if every man does his best, and is incited to do so by gaining the reward of his excellence.
Every man then should not only be allowed, but should be encouraged to do and to earn all that he can; we must then allow the greatest inequalities of wealth; for a man who has once begun to grow rich, acquires capital, and experience, and means which enable him to earn more and more. Moreover, it is altogether false to suppose that, as a general rule,he does this by taking wealth from other people. On the contrary, by accumulating capital, by building, mills, warehouses, railways, docks, and by skilfully organising trades, he often enables thousands of men to produce wealth, and to earn wages to an extent before impossible. The profits of a capitalist are usually but a small fraction of what he pays in wages, and he cannot become rich without assisting many workmen to increase the value of their labour and to earn a comfortable subsistence.