CHAPTER X.ToC

[198]Cf.supra, chap. iii. § 2.

[199]Karl Marx ranks the chief economies of machinery under two heads—(1) Machinery supersedes the skill of men working with tools. "The machine, which is the starting-point of the industrial revolution, supersedes the workman, who handles a single tool, by a mechanism operating with a number of similar tools, and set in motion by a single motive power, whatever the form of that power may be." (2) Machinery supersedes the strength of man. "Increase in the size of a machine, and in the number of its working tools, calls for a more massive mechanism to drive it; and this mechanism requires, in order to overcome its resistance, a mightier moving power than that of man." (Capital, vol. ii. pp. 370, 371.)

[200]Principles of Economics, 2nd edit., pp. 314, 322.

[201]Der Grossbetrieb, p. 120.

[202]Ibid., p. 117.

[203]Evidence given by Mr. T. Birtwistle.

[204]Op. cit., p. 82. Babbage, in laying stress on one of the "advantages" of machinery, makes an ingenuous admission of this "forcing" power. "One of the most singular advantages we derive from machinery is the check it affords against the inattention, the idleness, or the knavery of human agents." (Economy of Machinery, p. 39; cf. also Ure,Philosophy of Manufactures, p. 30.)

[205]Porter,Progress of the Nation, p. 590.

[206]Cf. Schulze-Gaevernitz, p. 115.

[207]For a fuller treatment of this subject, see the next chapter.

[208]Cf. Patten,The Theory of Dynamic Economics, chap. xi.

[209]Uses and Abuses of Money, p. 111.

[210]Principles, p. 315.

[211]Ibid., p. 316.

[212]Page 435.

[213]A similar difficulty in distinguishing town influences from specific trade influences confronted Dr. Arlidge in his investigation into diseases of employments. "It is a most difficult problem to solve, especially in the case of an industrial town population, how far the diseases met with are town-made and how far trade-made; the former almost always predominates." (Diseases of Occupation, p. 33.)

[214]Mulhall,Dictionary of Statistics, p. 545.

[215]Cf. Marshall,Principles of Economics, vol. i. p. 315.

[216]D.A. Wells,Contemporary Review, 1889, p. 392.

[217]Taylor,Modern Factory System, p. 435.

[218]Cf. the comparison of conditions of town and country labour in Adam Smith'sWealth of Nations, Bk. I., chap. x., part 2.

[219]Diseases of Occupations, pp. 25, 26.

[220]The Social Horizon, p. 22.

[221]Ure,Philosophy of Manufactures, chap. i. p. 19.

[222]Marshall,Principles of Economics, p. 265.

[223]Cf. chap. x.

[224]Cf. Marshall, p. 265.

§ 1.The Economy of Low Wages.§ 2.Modifications of the Early Doctrine—Sir T. Brassey's Evidence from Heavy Manual Work.§ 3.Wages, Hours, and Product in Machine-industry.§ 4.A General Application of the Economy of High Wages and Short Hours inadmissible.§ 5.Mutual Determination of Conditions of Employment and Productivity.§ 6.Compressibility of Labour and Intensification of Effort.§ 7.Effective Consumption dependent upon Spare Energy of the Worker.§ 8.Growth of Machinery in relation to Standard of Comfort.§ 9.Economy of High Wages dependent upon Consumption.

§ 1.The Economy of Low Wages.

§ 2.Modifications of the Early Doctrine—Sir T. Brassey's Evidence from Heavy Manual Work.

§ 3.Wages, Hours, and Product in Machine-industry.

§ 4.A General Application of the Economy of High Wages and Short Hours inadmissible.

§ 5.Mutual Determination of Conditions of Employment and Productivity.

§ 6.Compressibility of Labour and Intensification of Effort.

§ 7.Effective Consumption dependent upon Spare Energy of the Worker.

§ 8.Growth of Machinery in relation to Standard of Comfort.

§ 9.Economy of High Wages dependent upon Consumption.

§ 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 givenpowerful 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'sMemoirs 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.

§ 2. The trend of more recent thought has been in thedirection 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 onForeign Work andEnglish 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 notà priorireasonable 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, andconsumption. 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.

§ 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 textilefactories 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 inEngland 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:—

Product of yarn in 1000 lbs.Number of workers in spinning mills.Product per worker in lbs.Cost of labourper lb.Average yearly wages.s. d.£ s. d.1819-21106,500111,0009686 426 13 01829-31216,500140,00015464 227 6 01844-46523,300190,00027542 328 12 01859-61910,000248,00036712 132 10 01880-821,324,000240,00055201 944 4 0[228]

Product of yarn in 1000 lbs.Number of workers in spinning mills.Product per worker in lbs.Cost of labourper lb.Average yearly wages.s.nbsp; d.£ s. d.1819-2180,620250,00032215 520 18 01829-31143,200275,0005219 019 18 0[229]1844-46348,110210,00016583 524 10 01859-61650,870203,00032062 930 15 01880-82993,540246,00040392 339 0 0

The same holds good of the growth of the cotton-weaving industry in America, as the following table shows:—

Yearly product per worker.Cost of labour per yard.Yearly earnings per worker.Yards.Cents.Dollars.18304,3211.9164185012,1641.55190187019,2931.24240188428,0321.07290

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 per worker.Cost per yard.Hours of labour.Weekly wage.Yardss. d.Switzerland and Germany4660.3031211 8England7060.275916 3America12000.21020 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.)

§ 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 labourad libitumin 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 thatabc, certain phenomena relating to efficiency—as size of product, speed of workmanship, quantity of machines tended—vary directly withdef, 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 inabcare causes, or effects of concomitant variations indef, 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 notaccompanied 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.

§ 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, andvice versâ; 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.

§ 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 eachrise 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 (paceKarl 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.

§ 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 thehigher 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.

§ 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 twoindustries. 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,à 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 ofmachinery 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 isso, 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.

§ 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, butwas "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.

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