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would act as stewards or trustees for the community,
to the progress and comfort of which the guild must
always be subordinate. In many respects it may be
said that a substantial portion of the guild organiza-
tion is already with us. Where joint industrial
councils are complete and effective they have paved
the way. Where trust or syndicate operation is com-
prehensive, there is another contribution of much
importance.

Recent students of post-war economic conditions
on the Continent have directed attention to two tenden-
cies, notably in Germany and elsewhere the develop-
ment of the trust movement within the country and
the completion of large trade agreements with power-
ful groups outside the country. In Great Britain the
K 151



The Wages of Labour



trust movement has been strengthened by the war.
For the masses of the people the important considera-
tion is that these companies work in association in the
regulation of prices, in the purchase of raw materials,
and in practically all that matters so far as consumers
are concerned. To that extent the trust is therefore
in existence. It has sometimes been suggested that,
just as the American people have accepted this form
of industrial organization, so will the British people
acquiesce in it. But that is a very doubtful assertion.
There is a marked difference in national psychology.
There are profound differences in the organization of
labour in the two countries. In the United States
labour as a force has fallen on somewhat difficult days.
The differences between American and British labour,
more particularly in the growing industrial and
political power of the latter, make it impossible to
believe that trust organization is the system this
country will adopt. It would place in the hands of
a small section of the people an excessive concentra-
tion of economic power. It would be contrary to
the progressive demand for democratic control in
industry and commerce. The British Government
may promise anti-trust legislation, but it is per-
fectly certain that it will be at least as futile and
hopeless as the anti-trust legislation of the United
States.

The trust is an inevitable development of the
economic history of last century. It is a process



A Wages Policy



of conservation and economy in the use of resources ;
for the progress of the people it is indeed in many
ways desirable, because it lays at least a part of
the foundations of a better industrial order. But
if we assume that out of these forces some kind of
guild structure will emerge it is plain that its pro-
gress will depend on at least two conditions. In the
first place it must maintain the place of Great Britain
in the business counsels of the world. Insularity
will destroy not merely the guild but Great Britain,
and it would be false to the best forms of inter-
nationalism, in which British labour is taking a grow-
ing interest. Secondly, the guild must minister to
the increasing comfort, happiness and prosperity of
the people at home.

Let us look, therefore, in conclusion, to its duty
within the State. In the domain of wages or re-
muneration one of its first duties would be to place
at the disposal of the people all the information in
its power. According to the Hon. Sir Charles G.
Wade, K.C., Agent-General for New South Wales,
the importance of such information in the in-
dustrial arbitrations of Australia and New Zealand
has been largely recognized. Compulsory arbitra-
tion, semi-judicial in character, was adopted in New
South Wales. In many cases, however, the members
of the court were deficient in practical knowledge. It
was the practice of the applicants, generally the work-
people, to make as large a claim as possible; the



The Wages of Labour



employers retaliated with counter-claims which were
equally extreme; and the tribunal, often in a con-
dition resembling disgust, split the difference. This
was, of course, thoroughly unsatisfactory. In
the long run new measures on the lines of the
Victorian wages boards were adopted, consisting of
representatives of employers and employees, with the
stipulation that they should all be practical men.
The subsequent history of this arbitration has been
somewhat contradictory, partly because of the
problem of the compulsory recognition and observ-
ance of awards, but the controversy has at least
proved the value of presenting all the facts to
the tribunal and to the public. This is a central
consideration in accurate remuneration, and whether
it is achieved by trade board, joint industrial council
or guild in this country, or by other means, it is
practically certain that a full statement of the capital
held, its use, the annual return flowing to subscribers,
the distribution of profits and other relevant details
will be demanded. Facts are the cure for suspicion.
The acknowledged difficulties of an industry, as has
been seen in several departments of British business
within recent times, are a sound incentive to all
engaged in it, and there appears to be no reason
why any worker should not have all the information
regarding an enterprise towards the success of which
he is asked to contribute. These facts are not trade
secrets. And inasmuch as this duty would be general



A Wages Policy



in industry, there could be no unfair advantage to
competing concerns.

Secondly, it would be the duty of the guild
organization to consider carefully, and in a new and
better industrial environment, the relation of wages
and prices. Our connexion with world markets in-
volves, of course, calculation of price fluctuations as
far ahead as we can safely look. Let us take, for ex-
ample, a period of rising prices. There are those who
benefit, including those whose goods rise in price
more rapidly than their expenses ; many producers can
keep down their costs of production at least for a time
in a period of rise in general prices. Secondly, there
are those who are unaffected by rising prices, where
the cost of production rises at the same rate as prices.
Thirdly, there are those who suffer from rising prices,
together with the large numbers in receipt of fixed
incomes. Making all allowance for the changes in in-
dustry and commerce which gurld or other organiza-
tion would involve, a considerable proportion of the
British people would depend for protection against
a rise in prices on small subsidiary callings pur-
sued by themselves, or they would be in the
position of people with fixed incomes. What the
guild would have to undertake would be the task
of safeguarding real income and maintaining the
standard of living in the midst of highly important
causes of economic fluctuation. It would be neces-
sary to distinguish between what was due to funda-



The Wages of Labour



mental difficulties of production, or of distribution,
and those which were attributable to monetary
stringency. Certain modifications in the system of
currency might be necessary if it was decided to take
every step to check a long-continued upward move-
ment of prices, or it might be desirable to adjust
machinery for the more rapid alteration of wages,
or for the application of wage-awards to larger groups
of people.

Among the wider national and international func-
tions of the new organization would be the determina-
tion of the proper division of capital and of labour
between agriculture and other industry. The question
is notoriously complex. It has been urged that
we have over-developed manufactures in Great
Britain within the past ten or fifteen years, and
that it is now necessary to divert both capital
and labour into employments which undertake
the exploitation of natural resources. But comparison
of conditions in this country and in the United States
suggests that it is difficult to vary the conclusion of
Mr. Layton that, "whereas a general rise in prices
due to monetary considerations may fairly be taken
as establishing a case for a rise of wages, an upward
movement of food and materials not accompanied by
a similar rise in other goods cannot always be so
regarded. In the latter case it is necessary to look
at the reward of labour not merely as a means of
consumption, but as a remuneration for production.

156



A Wages Policy



Unless there is a continuous increase in efficiency,
industrial workers under such conditions cannot in
the long run maintain the level of their real wages.
The balance can only be restored either by improve-
ment in the methods of agriculture, resulting in lower
prices, by the increased efficiency of industrial labour
to such an extent that it may command the same
agricultural product as before, or by the transference
of labour as well as capital from industry to agricul-
ture." Antecedent to the payment of wages at all is
the use of capital and labour in the enterprises likely
to be most productive of useful commodities and
services. As we have seen, the failure scientifically
to direct both capital and labour into the genuinely
remunerative channels is having serious results, and
this problem is one of the first with which economic
reformers are confronted. It goes to the root of
remuneration.

Thirdly, even if the fullest measure of democratic
ownership and control were conceded within the next
few years the difficulties of British industrial effort will
be enormous. Apart from changed conditions in
Japan, China, the United States, and certain
European countries which will be serious competitors,
our own domestic experience since the end of the war
has been discouraging. Numerous industries of the
most important character are of doubtful solvency.
They are suffering from the disastrous effects of
subsidy during the war. The Government is rapidly



The Wages of Labour



removing control, and workers foresee, if they have
not already experienced, substantial reductions in
wages. One of the remedies suggested is the
continuance of subsidy. Save as a brief emergency
expedient no course could be more unsound. When
an industry is subsidized it is impossible to ascertain
its exact position; waste is encouraged; and lack of
enterprise is endowed at the expense of the people.

The remedy lies, first, in a strong economic
programme under the League of Nations; secondly,
in the conclusion of such trading agreements
as can be completed at the moment; and, thirdly,
in the progressive improvement of the efficiency
of the industry itself. Coal is perhaps the out-
standing example. To subsidize the wages of
the miners from national funds is to give a
preference to one set of workers at the expense of
all the rest. If sound methods of recovery were
adopted, we should get a larger output; it is quite
possible that there would be no need to reduce to
any appreciable extent the remuneration of the
miners; and we should be in a position to take effec-
tive steps to regain world markets. But, while one
industry might take such steps, they are hardly likely
to bring a full reward unless the co-operation of other
industries is secured. For the recovery of overseas
markets the contribution of all interested in merchant
shipping is essential. This suggests the possibility,
at all events during the period of crisis in the recovery

158



A Wages Policy



of industry and commerce, of combined effort on
the part of industries complementary to one another,
and certainly of those immediately complementary.
For any guild organization this would be in all likeli-
hood one of the most fruitful fields. It may be urged
that much of the associated effort which is in mind
is already achieved either by trusts or other combina-
tions of capital. That may be true up to a point, but
the waste of unnecessary competition is still obvious,
and with a national indebtedness of eight thousand
millions we cannot afford a penny of it. It is the
opinion of most of the younger men and women in the
ranks of British labour that they will receive equitable
treatment only under a reformed industrial and
commercial system.

In the discussion of the wages system, as in every
other sphere of economic conflict, two schools of
thought stand out. There are those who suggest that
the only hope is revolution. The form of the revolu-
tion, however, differs with each exponent of the
doctrine. They speak of wage-slaves and the
abolition of the wages system, but they conveniently
forget that in any type of society, collectivist or in-
dividualist, income and remuneration and some form
of, at least, implied contract will remain, although
the precise methods may change. The second
school looks to the facts. It remembers the four
million co-operators, the eight millions in the
trade unions affiliated to the Trades Union Congress,



The Wages of Labour



the thirty-six thousand friendly societies with
seven millions of members, and the possession of
the Parliamentary franchise by approximately one-
half of the total population of the country. It notes
that the present economic order is changing rapidly.
It realizes that remuneration is only one of the issues
involved, and by no means the most important. And
it falls back upon revisionist methods, a vigorous
"constitutionalism," and better education for the
people. Sad as the reflection may be, in wages, as
in almost everything else, we are at the beginning
rather than at the end of civilization. Spectacular
revolutions may provide orators and their audiences
with a night's intoxication, but cold facts, impartial
study, patient enterprise await the workers in the
morning.



160



INDEX



ABSTINENCE theory of wealth ac-
cumulation, 6
Agricultural labourers, and a

sliding scale, 75
Allocation, problem of, 101, 102
America, scientific management
in, 114 et seq.

, the trust movement in, 152

American and British wages

compared, 45

Anti-trust legislation, 127, 152
Apprenticeship system, break-
down of, 27, 28, 47

, wisdom of, 26

Arbitration, compulsory, 153

courts, and their awards,

*4> 153

, lack of uniformity in de-
cisions by, 139

, rate-fixing by, 138

Australasia, movement for shor-
ter hours in, 84

Australia, arbitration courts in,

84, 153
, experience of introduction

of minimum wage in, 81
, the miners' demand, 85

BONUS schemes, 116 et seq.

, and unskilled work-
ers, 132

Boot and shoe industry, 86

Bowley, Mr., 68

Brain work versus hand work, i

Bricklayers and restriction of
output, 40

British and American wages,
comparison of, 45

British currency, war deprecia-
tion of, 67

CANADA adopts minimum wage
principle, 82



Canada, demand for a forty-
four hours week in, 83

Canning industry, profits and
labour costs in, 88

Capital and Labour, a complex
question for, 156

, misdirection of,

13 et seq.

} mutuality of in-
terest between, 9

and population, 9

, federated, 95

, frequent strikes of, 19

, two views of, 4

Census of production, 39, 78
Chain-making industry, 76, 78
Cigar workers, women, 87
Clerical labour, 29

, organization of, 30

Coal industry, effect of subsidy

on, 158
Collective bargaining, 93, 95

between employers

and trade unions, 140

, new opportunities

for, 133, 146

, payment by results

and, 131

, trade union insist-
ence on a standard wage, 96

Collectivist views on the wages

system, 57, 144

Collie, Western Australia, min-
ers 1 demand in, 85
Combination Laws, 107
Combines, growth of, 95, 151, 152
Committee of Production, 138-9
Commodity theory, the, 62
Companies, industrial, divi-
dends of, 103

Compulsory arbitration, 153
Confectionery workers, Ameri-
can, and their wages, 87



161



Index



Constructional trades, Austral-
asian, 84

Co-operative societies, and accu-
mulation of wealth, 7

, membership, 15, 159

Co-partnership and adjustment

of remuneration, 109

, definition of, no \

, national guilds and, 72

, syndicalist objections to,

144
Cotton factories, American, 86

, profits and lab-
our costs in, 88

Cotton-weavers, sacrifices by, 90
Coventry, regulation of wages in

i5 2 4> in, 74

Cradley Heath, chain-making
industry of, 78-9

DECENTRALIZATION, views of Mr.
and Mrs. Webb on, 144, 150
Demand and supply, law of, 20

and wages, n

, necessity of redirection of,

13 et seq.

, unlimited nature of, 12

Differential rate, Taylor's, 115
Distribution, inequality of, 100

, the problem of, 72, 98

Dockers' wages, 105
Drury, Dr., his work on scien-
tific management, 114

on the Rowan premium

bonus system, 118

ECONOMIC history and slave lab-
our, 44
Economics and the curse of the

static, 17, 20
Efficiency earnings, 33
" Efficiency per cent." rate, 116
Elizabeth, wages legislation in

reign of, 75

Emerson, Harrington, 114
Employers as rate-fixers, 134, 140
Engineering trades, an increase

of wages in, 106
" Evenness," fallacy of prin-
ciple of, 23



Exchange, the, influence of, on

prices, 45, 47
Exhaustion of workers and how

caused, 34, 128 et seq.

FACTORIES, changes needed in,
130-1

, the works committee, 146

Factory Acts, early, 75

Fatigue, 34, 129

Federal Bureau of Labour Sta-
tistics. 87

Feudalism, Continental, 3

Fixed wages, evil of, 35

Flax-spinners and a minimum
wage, 91-2

Flint glass makers and a mini-
mum wage, 91

Friendly societies, and wealth
accumulation, 7, 15

, membership, 15, 160

GANTT, Henry L., and Taylor's

system, 115
Germany, development of trust

movement in, 151
Great Britain, co-partnership

schemes in, in et seq.

, growth of social

legislation in, 113

, post-war conditions

in, 68 et seq., 157

, the trust movement

in, 151, 152

, waste in, during the

war, 121, 122, 136

Guilds and the wages system,
61 et seq., 72, 143, 156

, functions that might be

entrusted to, 151 et seq.

, objects of the mediaeval, 27

HALSEY, F. A., his premium

bonus system, 117
Hand work -versus brain work, i
Handloom weavers, wages-board

scheme for, 75
Harding, President, 17
Housing question, the, 14, 59
Hoxie, Mr., 140



162



Index



INCOME as remuneration, 65, 73

- - , economic conception of, 2,

J 4S

- tax, loss to Exchequer by
fraud and evasion, 104

- - , Royal Commission's
recommendation on, 99

Index numbers and the sliding

scale, 104

Individual rate-fixing, 137
Industrial companies, dividends

paid by, 103

- councils, 148

- Court, the, 106-7

- Fatigue Research Board,
the, 129

Industries, British, post-war



conditions in, 158
Industry, democratization



of,



- , physical and mental strain
of, 34 et seq., 129

- , total values created in,
and how distributed, 100

Inge, Dean, on progress, 37
Iron, British, high price of, 70

JOINT control, movement in fav-
our of, 146

- industrial councils, their
work, 148

- rate-fixing, 138, 140
Jones, Dr. E. D., on psychology

of Americans, 117
Justices of the peace as wage ad-
judicators, 74

LABOUR and distribution, 101

- and wage reductions, 46

- as a commodity, 62

- dislike of varying district
rates, 83

- , division of, present-day, 26

- , federated, 95

- , human restriction of sup-
ply of, 51

- , wages of, and salaries, i
Layton, W. T., 3, 101, 156
League of Nations, the, 94, 95,



London, Ontario, a tramway-
men's strike in, 82-3
Luxury pursuits, 13, 16

trades, investment in, 59,

61

MACHINERY and enhanced pro-
duction, 126

Macrosty, H. W., and the trust
movement, 22

Malthus, 9

Man, primitive, and how re-
munerated, 3

Marshall, Professor, 4, 6, 43, 51

, and wages-fund theory, 10

on economics, 18

on efficiency earnings, 33

on the Combination Laws,

107

Marxians, divisions among, 57
Mediaeval guilds and modern

trade unions, 27
Metal industry, American, 86
Middle Ages, the, economic

teaching of, 4, 17
Mill, John Stuart, and wages-
fund theory, 10

Miners, Australian, and why
they demanded an increase
of wages, 85

, British, a subsidy to, 158

Minimum wage, advantages and
benefits of, 81, 146

, Canada adopts prin-
ciple of, 82

, sacrifices by workers

to secure, 90

, world-wide demand

for, 81, 82, 145

Wage Bill, Whitbread's, 75

Conference, the, re-
commendations of, regard-
ing women's wages, 88

Minimum-of -subsistence theory
of wages, 64

Minimum rate and standard
wage, 74 et seq., 90 et seq.

Ministry of Labour, the, 76, 138

Monopoly system and wealth ac-
cumulation, 6



163



Index



Municipal ownership, views of
Mr. and Mrs. Webb on, 144

regulation of wages, 74

Munition workers, bonus schemes

for, 121

, wages of, 68, 135

Myers, Dr. Charles S., 34, 39

NATIONAL guilds, criticism of
wages system by, 61 et seq.,
72 (see also Guilds)

health insurance, 113

Industrial Conference

Board, U.S.A., 85

Union of Railway men,

sliding scale of, 104

Newmarch lectures, 98

New York, wages of women
workers in, 87

New Zealand Arbitration Court,
the, 84

j compulsory arbitra-
tion in, 153

Nominal wages and real wages,
rise and fall in, 67-8, 71

" Normalcy," 17

Nova Scotia and a minimum
wage, 82

OCCUPATIONS, disagreeable, cause

of low wages in, 52
Ontario, a tramwaymen's strike

in, 82-3
Output, effect of reduction of

hours on, 86

, remuneration based on, 31

, restriction of, some causes

of. 39 et seq.
, schemes to ensure increase

of, 115 et seq.

PAPER box -makers, women, wages
of, 87

currency, the, 67

Part-time employment, and why

necessary, 48
Payment by results, 31 et seq.

, and the prin-
ciple of collective bargain-
ing, 131



Payment by results, considera-
tions underlying, 32

, duty of impar-
tial consideration of, 142

, necessity of

publicity for, 103-4, 122,
125, 141

, objections to

system of, 36

, schemes for, 115

Personal capital, its dependence

on remuneration, 4 et seq.
Piece-work, alleged exhausting

nature of, 34, 128
, objections to system of,

127, 128

, payment for, 21

, various kinds of, 119

Pig-iron, British and American,

cost of, 45

Population and capital, 9
Post-war conditions in Great

Britain, 68 et seq., 157
Premium bonus systems, 116, 117
Price associations, growth of, 95
Prices, high rate of, during the

war, 69

in periods of depression,

70

, rise and fall of, influence

on real and nominal wages,

67-8, 155

Production, census of, 39, 78

, expansion of, share of

capital and labour in, 101

Profit, how it should be re-
garded, 102

Profit-sharing and adjustment
of remuneration, 109

, causes of discontinuance

of schemes for, in et seq.

, official definition of, 109

, why distrusted by the

worker, 112

Progress, Dean Inge on, 37

RATE-FIXING, an ideal system of,

138, 140
and rate-cutting, 134

by arbitration, 138



164



Index



Rate-fixing by employers, 134, 140

, individual, 137

, joint, 138

, the Halsey system and, 118

, untrustworthiness of war

experience in, 135, 136
Real wages and nominal wages,

rise and fall in, 67-8, 71
Remuneration, improvement in,

necessary for efficiency, 98

, methods of, 19 et seq.

Rest, intervals for, in daily oc-
cupations, 129, 131
Ricardo, 9
Richard II., labour legislation

in reign of, 74
Rings, growth of, 95
Rowan premium bonus system,

117, 118
Royal Commission on Income

Tax, 99, 103

SALARIES, unreal distinction be-
tween wages and, i

Saskatchewan and the minimum
wage, 82

Scientific management and ad-
justment of remuneration,
109 et seq., 124 et seq.

, apathy of employers

towards, 124, 126

in development of

American industry, 114 et
seq.

, necessity of, and

what it must be, 37 et seq.,

47> '47

, workers' objections

to, 124, 126 et seq.

Scottish textile industry, the, 93
Seligman, Professor, 69, 70

on labour as a commodity,

62

Separation allowances, 68

Silk industry, American, reduc-
tion of hours in, 86

Slave labour the dearest of all
forms of labour, 44

Sliding scale, a, agricultural
labourers and, 75



Sliding scales based on variation
in cost of living, 104 et seq.,
146

Smith, Adam, 9

on causes of wage rises, 60

South Africa, Union of, wage

boards in, 84

Stamp, Sir Josiah, and the pro-
blem of distribution, 98-9

Standard wage and minimum
rate, 74 et seq., 90 et seq.

, labour's view on, 101

, weaknesses of, 108

State ownership, views of Mr.

and Mrs. Webb on, 144, 150
Statistical research, British,

weakness in, 105
Steel, British, why prices are

high, 70

Corporation of U.S.A., 88-9

corporations, American, re-
fuse shorter hours, 85

Strikes and how they might be

averted, 147
Subsidies, unsoundness of, 157,

158

Super-tax, the, institution of, 99
Supplementary earnings, 48
Supply and demand, law of, 20
Surplus value, theory of appro-


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