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All that it is desired to emphasize here is
that for the benefit of our wages system, to say
nothing of the substantial improvement which would
enure in social and industrial conditions, we should
undertake without delay the study and organization
of subsidiary and supplementary callings. Their in-
fluence upon health and economic efficiency would
be pronounced. And it is certain that the output from
them would be considerable enough to have a marked
effect on the prices of most commodities, and thus a
beneficial reaction upon real wages. Keeping in mind
the gain in efficiency, there would appear to be little
ground for the suggestion that any attempt would be
made to use the existence of such callings as a pretext
for the depression of wage levels.

Again, remuneration is still influenced to a con-

Nature of the Wages System

siderable extent by popular attitude towards the occu-
pation. Professor Marshall alludes to the importance
of looking beyond the mere earnings in a trade in
the desire to ascertain its net advantages. There are
personal factors which are always of importance. Many
people of proved ability prefer to live in rural dis-
tricts with a relatively small weekly income, to which
they always add the advantages of their quiet, healthy
and beautiful environment. On the other hand there
are many workpeople with considerable weekly in-
come who prefer to live in one or two rooms in order
that larger sums may be available for recreation, or
amusement, or other purposes. Similar tendencies
are found in dealing with disagreeable occupations
and the wages they offer. No matter how hard
economic conditions may be, people would rather
have lower weekly income and remain out of them,
and there is thus in certain callings such human
restriction of the supply of labour, as it may be de-
scribed, as will make it certain that wages will for
the most part tend to remain high. On the other
hand certain callings are habitually so poorly re-
munerated that only workers of very low intelligence,
or people compelled by circumstances of poverty
and physique, consent to enter them; the supply of
labour is usually considerable, if erratic; there is
rarely any organization, either of workers or em-
ployers. The work is no doubt disagreeable, but
that fact has little or no influence in raising the


The Wages of Labour

amount of remuneration offered for it. That is
due to the fact that it can be done by people of
poor industrial ability. From this, says Professor
Marshall, arises the strange and paradoxical result
that the dirtiness of some occupations is the cause
of the lowness of the wages earned in them. " For
employers," he added, " find that this dirtiness adds
much to the wages they would have to pay to get
the work done by skilled men of high character work-
ing with improved appliances; and so they often
adhere to old methods which require only unskilled
workers of but indifferent character, and who can
be hired for low (time) wages, because they are not
worth much to any employer. There is no more
urgent social need than that labour of this kind should
be made scarce and dear." Labour should take
every step to hasten the introduction of better
methods. There is nothing permanent either in dirty
occupations themselves or in the low remuneration
often attached to them. Strictly speaking, they
should have been the first to be reformed, as their
need was undoubtedly the most urgent. That they
have persisted in such strength and variety after
more than a century of the application of scientific
device to industry is a reminder of the lop-sided
character of even outstanding economic progress.

In educational circles there is at the moment a
certain disappointment when effort is made to ascer-
tain how far capital is being definitely invested in


Nature of the Wages System

the preparation of young people to carry the load
of industry and commerce in the near future. By
preparation is meant not merely vocational or general
education, but rather the provision of an environment
in home, in healthy and refining influences, and in
a width of outlook and experience. For very large
numbers of well-meaning British people the oppor-
tunity for such investment of capital, perhaps the
most productive investment that can be made, is
limited by insufficient resources. Among the wealthy
classes the limitation presumably does not apply, but
the unfortunate fact in their case is that, for the most
part, they will not enter industry or commerce in
the spheres where the need of trained and disciplined
minds is greatest, if, indeed, they enter any form
of business at all. It is conceded that the sons and
daughters of many men who, however narrow their
conception of wealth and welfare, nevertheless were
not afraid of hard work, frequently prefer the luxuri-
ous habits of ample leisure, and have a certain pride
in being numbered with drawing-room loafers and
pampered idlers who are, if anything, more objection-
able than their collarless fellows of the underworld
who announce, with commendable honesty, that for
the greater part of their lives they have succeeded in
just avoiding work. With such waste where the
financial resources are not in doubt, there is corre-
sponding increase in the responsibility which is cast
upon the professional and higher artisan classes.


The Wages of Labour

Perhaps more than any other section of the com-
munity they, of their own accord as well as by force
of circumstances, look to the future. There is a
certain legitimate and healthy competition in the
investment of capital in their children, and pride in
their scholastic and other achievements. There are
few things more remarkable than the sacrifice of many
working parents in the interests of a University educa-
tion ; the growing influence of young people so trained
is recasting the whole problem of democracy and its
application to British conditions. To this must be
added the increasing power of adult education. For
those in manhood and womanhood it will redress
much of the deficiency of earlier years, but its effect
upon their children should be even more pronounced
than it is upon themselves. The ideal they have in
view is a rounded and generous life.

Now in such classes there is an undeniable in-
vestment, not nearly so great as it might be, but still
remarkable, in the rising generation, and in due
course that should tell in the direction of the pro-
gressive improvement and stability of remuneration.
It will be much more scientific in its analysis of the
advantages and disadvantages of an occupation ; it
will be able with far greater clearness finally to deter-
mine the net advantages; and it should be able to
receive, on the investment made on its behalf, the
highest form of return in life itself. But unfortunately
conditions among poorer wage-earners and the smaller


Nature of the Wages System

professional classes are not nearly so encour-
aging. In the densely populated urban centres
and in many of the rural districts social conditions
are so appalling that there is not now, and probably
will not be for generations, even that physical or
moral health which would render possible the very
contemplation of sustained effort in any form of in-
vestment worth while. Millions of people in such
circumstances are governed almost exclusively by
immediate considerations; rent day is often the
melancholy limit of human vision and the morbid
goal of a despairing toil. Of all the factors which
impress men and women who have striven to save
what to-morrow will be the social underworld, there
is not one which is more distressing than the almost
complete absence of vision and hope; that is, vision
and hope of the right kind. It is possible to do
something with men and women who can think of
next year, or the one beyond, but little can be accom-
plished when everything is bounded by four narrow
walls, to-night or the week-end, and the satisfaction
of the crudest of material needs. In passing, let it
be remembered that it is this section of the popula-
tion primarily, and not the wealthy or the influential,
that fills British labour with despair. Yet it is from
this layer of society, so to speak, that large numbers
are being recruited year by year for industrial and
commercial occupations of all kinds. It is true that
it possesses its exceptions. Members of Parliament
" 55

The Wages of Labour

have been born in workhouses, and great leaders of
the people began in what are called the slums. But
normally there is crucifixion of the faculties and
abilities. Every year there is a large contribution to
the under-developed and undeveloped. And, as has
been shown beyond dispute, if they had enjoyed even
half or three-quarters of a chance it is a full chance
that is asked for they could have added to the
material wealth of the country far more than would
have met the cost of providing adequate opportunity
for their training and development. The annual con-
tribution of such concentrated moral, physical and
industrial inefficiency is the dead-weight lying upon
the shoulders of British remuneration. The aim is
high-paid labour trained in such a manner that in
ministry to the needs of all the people it is in reality
cheap. To that end health and vigour in physique,
morality and industry are necessary. But it is in
the depressed section of the people that the birth rate
is highest, and so from generation to generation, not-
withstanding the efforts of social and sanitary science,
which can do little more than pretend to salve a
portion of the wreckage, the weaknesses tend to



THE number of strict Marxians in Great Britain
is comparatively small, and they are so acutely
divided amongst themselves in theoretical
issues that they have very little time to take notice of
this world. The theory of the steady appropriation of
the so-called surplus value due to labour by an
exploiting class is current in popular forms in the
thought of large numbers of workers. Most of the
leading collectivists recognize that the surplus cannot
be accurately attributed to one section in industry or
commerce; it is at least to some extent also the
product of management, and machinery, and the
organization of capital. Besides, they recognize that
analysis of the wage system on the lines adopted by
Marx is not necessary for the purposes of the case
they desire to establish. They look more to the
physical, moral and social results of an economic
system, to the waste which the lack of proper
organization involves. In the main it is agreed to
distinguish three groups those who actually accu-
mulate and own capital, those who merely use it
and pay for the use of it, and those who may be
described as dependent on both the owners and users


The Wages of Labour

for the opportunity to take part in the production of
wealth. It is also acknowledged that the owners
may be people of comparatively small means, and
many of them are in fact very often poorer than the
users of their accumulation. The terms on which
capital is available for use in industry naturally affect
the rate of wage remuneration offered. When money
is plentiful and cheap it may be presumed that the
needs of trustworthy people are met. Even then
there are doubtless individual users who will find
the terms onerous, particularly where the businesses
in which they engage have an uphill task. The
effect of dear money or restrictions on credit depends
upon the form of undertaking which uses it. If it
is of the nature of a trust, combine or monopoly
the presumption is that it will have power to increase
the price of its products, that it will have all the
initial advantages of large scale organization and
economy in management to which a heavier burden
in payment of interest can be much better adjusted,
and that a return upon the capital subscribed may
be quickly available. In such circumstances, labour
employed by the undertaking may hardly be con-
scious of any extra strain upon its finance, and there
may be little or no increase of strife among, those
entitled to participate in the annual yield of the

On the other hand, the small scale business which
is penalized by dear money may be driven to seek


Criticism of the Wages System

cheap labour, and to tolerate inferior skill in order to
reduce working costs. Finally, it may have to reduce
its staff and so swell the ranks of the unemployed.
Can the nation afford a laisses-faire attitude in
the face of such controllable and preventable
disorders ?

Apart altogether from the question of remunera-
tion there are social disadvantages. One of the
unhappiest features of the post-war period has been
the flotation of numerous companies in "luxury"
trades, while the State, the local authorities and
private individuals have found it difficult to get
money for healthy and beneficent enterprises, such
as housing, electrical power and improved transport

Cheaper money in this sphere, even if some
form of compulsion had been necessary, would have
been a sound investment for the community. Not
only would the numbers of people employed have
been much greater, but essential services would have
been provided at a time when they were urgently
required; we should, by so doing, have been
laying the foundation for a wide development of
commercial and business enterprise generally ; and we
should have done much to improve the efficiency of
labour, both in its domestic environment and in the
appliances available for its use, and thus have safe-
guarded remuneration by one of the healthiest steps
that could be taken to that end. At a time of economic


The Wages of Labour

crisis we proved ourselves incapable of putting first
things first. Much of the war-time regulation had
occasioned annoyance and was in effect in restraint
of trade, but we fell back too quickly on the quasi-
individualism which holds it safe and wise to leave
capital to find its most remunerative use. In nine
cases out of ten this was interpreted solely in the
sense of monetary gain, whereas what was really at
stake was the efficiency, health and happiness of the
people. Anything in the nature of compulsory loan
presents many difficulties. In many respects, how-
ever, the crisis following the war is greater than the
financial crisis of the war itself, and it would be no
great hardship for proprietors to accept, at all events
for the time being, a little less for their money, if
it were directed to objects really essential to rapid
economic recovery. It would be at worst a mild
form of taxation. And it would have the advantage
of stopping waste at the source, and not after the
luxury goods had been placed on the market to tempt
purchasers whose resources should have been devoted
to much more urgent and important things. The
community as a whole is vitally concerned, and it
must face this problem of economic reorganization.
It would appear to point to a sound increase in the
"revenue and stock" of every country, that is, sound
in the sense of ministering most efficiently to popular
comfort and efficiency. Adam Smith points out that
it is not the actual greatness of national wealth but its


Criticism of the Wages System

continual increase which occasions a rise in the wages
of labour. Investments in luxury businesses may
bring monetary profit to the investor by tempting,
others to wasteful extravagance and without pro-
ducing anything of public advantage. The motive
of private gain unchecked has made it too difficult
for Dives to invest his wealth in the foundation of a
"new and better world after the war."

Much of the most strenuous but by no means the
most accurate criticism of the wages system has been
offered by advocates of national guilds. Like other
schools the guildsmen are themselves seriously
divided in doctrine. Later in this book it will be
indicated that its conclusion is that some form of
guild is the next stage in economic progress, and
it is all the more regrettable, therefore, that men
and women who hold similar opinions should dis-
figure their case by statements which, in the light
of present-day facts, can hardly be defended. It is
fashionable, of course, to smile at political labour
and at trade union leaders, and to say that in the
long run their best efforts can only result in the
perpetuation and refinement of wage-slavery, as it
is called. The attack made upon them is often one
which is really in the interests of direct action, and
against political effort at large. In this attitude
several advocates of national guilds have, in their
reference to the wages system, been less than just.
There are very few labour thinkers or workers who


The Wages of Labour

are not well aware that there is nothing necessarily
permanent in the present form of remuneration. And
if there is any form of slavery to-day it might be
worth while to remember that the "slaves " have
political power in the franchise, that they themselves
own millions of pounds worth of capital, that we
have had fifty years of popular education, which at
least provides a foundation for self-development, and
that if freedom has not been won a considerable
measure of responsibility for that must rest upon the
shoulders of those who are still in bondage.

In what was understood to be an authoritative
statement in the interests of national guilds, it was
laid down first of all that wages were the price paid
for labour power considered as a commodity. Let
us ask whether anything will be gained to-day
by emphasizing the commodity theory. In his
examination of the nature of wages Professor
Seligman remarked that labour as a commodity
had four chief peculiarities. In the first place, com-
modities were produced for the sake of the services
which they render, but the increased supply of human
beings could hardly be attributed to any such con-
sideration ; secondly, a commodity once in existence
continued to give its services unbidden, whereas
labour might withdraw or refuse its service; thirdly,
labour is perishable, while many commodities are
durable ; and fourthly, labour is inseparable from the
labourer while the commodity may be separated from


Criticism of the Wages System

its owner. He points out that it is therefore not
necessary to resort to obvious ethical considerations
in order to recognize the difference between human
beings and inanimate objects. Now these distinctions
are fundamental, and it is noteworthy that after
the guildsmen in question emphasize labour power
as a commodity, they immediately proceed to out-
line their own doctrine by admitting that "there are
animate qualities in labour which render foolish any
economic theory which classes it with inanimate com-

Yet their attack on the wage system persists,
because "the wage system will continue on the
same basis until organized labour, operating in the
economic sphere . . . wills to end the wage
system by undertaking itself to perform, not only
the function of supplying labour power, but, by
a proper adaptation of its qualities, also the func-
tions now allotted to rent, interest and profits." It
is further suggested that it can fulfil these functions
only by abrogating the wage system, and that "so
long as it accepts wages, it accepts the implications
of wages, the most important of these being that in
selling its labour power it also sells its birthright in
the industrial fabric, reared by itself, but sold by itself
for a mess of wage pottage." In this contention, and
also in other parts of the same work, it is plain that
the theory of surplus value has an important place.
Of itself that would vitiate the case, but there is also

The Wages of Labour

the erroneous assertion that the fabric has been raised
exclusively by a section of the community narrowly
described as engaged in labour rather than by the
common effort of all who in any capacity make some
kind of contribution to popular progress, The case
rests also upon a definite assumption that the price
paid for labour is based upon the cost of subsistence
necessary to the maintenance of that labour power
and its reproduction. This in turn is modified by the
statement that the price will be varied by the quality,
scarcity or organization of the labour power. Now,
whatever the authors may have had in mind, this is
merely a version of the iron law of wages, and we
have only to turn to the admitted progress of the
people in accumulated possessions and in conventional
comforts to see that much more than mere subsistence
and reproduction has been achieved. With the con-
current rise of wages and of population during the
nineteenth century the minimum-of-subsistence
theory of wages finally broke down. It is therefore
unfortunate that in face of economic facts a section
of guildsmen should deem it necessary to lay the
foundations of their case by attacking, the wages
system with arguments which are obsolete.

What they have really in mind may be gathered
from their own argument. They speak of organized
labour undertaking to perform not only the function of
supplying labour power but, with proper adaptation of
its qualities, also the functions now allotted to rent,


Criticism of the Wages System

interest and profits, or, as it may be put, what is
contributed by the proprietors and users of capital.
In this connexion, and especially at a time when the
labour movement is emphasizing the catholic char-
acter of its appeal, the phrase " labour " can only
be properly applied to the whole of the people of
the country. It is obviously not the intention to
exclude any class. But the people to-day, in ways
inextricably mingled, are providing capital and using
it as well as labouring to give themselves and others
interest upon it. The suggestion is that the way
out of this chaos, if it may be so described, is the
abolition of the wage system. But surely such a
contention indicates confusion of thought. What is
really wanted, as the authors themselves appear to
recognize, is reorganization of economic and other
resources, and it can hardly be contended that that
would be achieved or facilitated by the abolition of
a system of remuneration. The confusion arises
from the habit of thinking in terms of narrow wages
instead of in terms of broader incomings. Even if
the guild or any other system were complete to-day
there would still be family and individual incomings,
still some proportionate recognition of human need
and human service, and there is nothing to be gained
by artificial distinctions or verbal quibbling. It is
quite true that both employers and labour organiza-
tions have thought too much of money wages, and
it is frankly recognized that large numbers of


The Wages of Labour

people in all ranks and grades of effort are
satisfied when they obtain an advance in remunera-
tion, and that that satisfaction, in reality temporary
and often lacking foundation in fact of improve-
ment, unfits them for examination of more im-
portant and more permanent issues. But let money
wages vanish. Human need in infinite variety,
of course, remains, and under a reorganized system
it must be provided with the commodities and the
services which it requires. With the most complete
decentralization we can imagine, would the time ever
come when some voucher of entitlement would be un-
necessary ? Probably not. And in practice it would
not be essentially different from the Treasury note or
metallic coin. There would appear to be no point in
evading the problem of income, in the sense of some
form of remuneration.

What is apparently intended is a firm suggestion
that the wage system in any form is a standing barrier
which prevents the establishment of a better economic
order. The people are deluded by mere money. Each
nominal increase, whatever the real position may be,
saps their interest in constructive alternative. Many
of the trade unions, it is argued, think exclusively of
remuneration. It is becoming the leading issue in
professional employment as well ; clergymen and
teachers have joined the ranks of the disaffected. No
doubt there is much in current controversy to lend
colour to such assertions. A little more examination,


Criticism of the Wages System

however, would appear to indicate that the people
are better than they are commonly represented. The
heavy depreciation of British currency during the war,
the manufacture of credit, the light which has been

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Online LibraryWilliam GrahamThe wages of labour → online text (page 4 of 11)