Principles of Political Economy

by Arthur Latham Perry

(d) The probability of success or the opposite in any line of personal services, is a circumstance that has some influence on the rate of wages paid in it, through the action of this probability on the numbers of those who enter upon it. If ultimate success be doubtful, fewer persons will naturally engage in such a business, and those who dare in it and succeed, will probably reap a very high reward. So, also, those who take jobs by the contract, and therein assume more or less of risk, are commonly paid at a higher rate for their services than those who do similar work by the day. It is true, that this is owing partly to the fact that the contractor usually puts in his own capital more or less, and must therefore be paid profits as well as wages, and also that the wages of superintendence are due to him in addition to ordinary wages; still, there is a residuum of difference, which can only be accounted for by the risk he runs of a successful issue of his contract. The general variation in Supply and wages from this fourth cause, would certainly be greater than it is, were it not for the overweening confidence which men in all generations seem to have in their own good luck. This excess of worldly faith is always seen in the rush which is made for newly discovered mining regions. It was seen to perfection in 1889 in the uncontrollable advance of thousands into, and their almost immediate exit out of, the then just opened territory of Oklahoma. The facility with which lottery tickets are sold even yet in many countries proves the prevalence of this over-confidence. It is demonstrable beforehand on the doctrine of Chances, that no person can rationally buy any lottery ticket at its advertised price, because if that person should buy all the tickets advertised he would certainly lose money, since the sum of the prizes is always less than the sum of the prices. Otherwise the projectors of the lottery would always lose money.

(e) The mobility or immobility of laborers as a class acts powerfully upon the Supply of them at any one time and place, and consequently upon the rates of wages then and there. In some countries, notably in the United States, laborers as a class move from place to place with considerable facility under the action of Demand for personal services. According to the Census of 1870, 7,500,000 of the native population dwelt in other States than those in which they were born. Many of these, doubtless, had left their native region to obtain more fertile land, and many also to obtain more remunerative employment as laborers. The native American, more than most other persons, is not only willing to move from place to place in the hope of bettering his condition, but is also willing to change his occupation from time to time in the same hope. There is more freedom of movement locally, and less fixedness of occupation on the part of laborers and others, in this country than in any other industrial country. Even foreign immigrants here,—factory operatives, miners, and other laborers,—seem to catch after a while the spirit of the country in both these respects. There is one considerable advantage in all this, namely, competition becomes more uniform in all places, an unusual demand for laborers at any one point is easily met, and wages neither rise so high nor fall so low at special points as they otherwise would. But there are considerable disadvantages in all this too, chiefly these, the services of laborers floating locally or changing the kind of their labor can never become so excellent as service more steady in place and time; and, especially, thorough apprenticeships, or whatever may be equivalent to these, are held in too little esteem by public opinion, and are too little requisite in order to obtain transient employment. To meet the obvious pressure of these disadvantages, an admirable device is now being hit on, namely, to introduce into our public schools something in the way of "manual training" for the various trades. Public institutions also, some of them on a great scale, as the Cooper Union in New York and a more recent munificent foundation in Philadelphia, have been established on purpose to train boys and girls both in eye and hand to render skilfully those artisan services of the various kinds which will always be in demand among men, and which have certainly deteriorated among us owing in part to the disuse of the old apprenticeship-system.

In Europe, on the other hand, the laborers as a class are far less mobile than here; and in Asia still less so. There is said to be no country in Europe in which the proportion of foreigners to the native population exceeds three per centum. In England, which is a small country, the difference in Wages between the northern and southern counties is very remarkable. Professor Fawcett is authority for the statement, that an ordinary agricultural laborer in Yorkshire during the winter months earns 13 shillings a week, while a Wiltshire or Dorsetshire laborer doing similar work during the same number of hours earns but 9 shillings. The contrast in general between the Wages of English agricultural laborers and those paid in mills and mines and furnaces is still more striking. And so more or less, in respect to the Value of Commodities: competition is yet by no means perfect in distributing these so as to make their price uniform in the same country or even in the same county; but the immobility of laborers for an obvious reason is much greater than the immobility of goods. While laborers should certainly be free to go wherever their services may be in greater Demand, the natural reluctance of most men to leave their native haunts, enables each of the nations to work out its freely chosen ends without wholesale interference from abroad. If China should precipitate itself upon the United States, or India upon England, as the mere economical impulse might indicate, it would be disastrous to the western nations; but men are everywhere under other influences besides the economical one, although this is strong and distinct and pervasive; Political Economy deals with men as they are all things considered, and with Buying and Selling as this actually takes place over the world, or rather as it would take place if factitious economical restraints were removed; and Providence has other great ends in view besides commercial prosperity, vital as that is to all other progress, and often holds one impulse in check by a stronger one.

(f) Custom, with its cognates Prejudice and Fashion, has still a good deal to do with the Supply of laborers in certain departments of effort, and of course with the rates of wages in them. In former times in this country and in the older countries particularly, Custom and decree were dominant in determining, for example, the current fees of lawyers and doctors, competition coming in to decide how many such fees a professional laborer should get, rather than the amount of each particular fee. The shares of the produce going respectively to the agricultural tenant and to the landowner, were specially under the dominion of Custom; as the mode (now decadent) of taking farms "at the halves," once universally prevalent in New England, sufficiently shows. In certain other matters relating to land and trade, Custom has long been gradually hardening into express law, as, for instance, the famous "Ulster Right" in Ireland. Prejudice, which is only another name for Custom, has some voice still in adjusting rates of wages, as may be seen in women's wages crowded down apparently to a point unreasonably low as compared with the wages of men; and also in the rate of John Chinaman's wages in those parts of the United States where he ventures to offer his services in the teeth of public opinion and hostile legislation. It may be spoken with general truth and satisfaction, that competition seems now to be breaking down mere custom and prejudice in all directions, and may perhaps in the good time coming reign supreme over the economic field; while Fashion, which bears indeed on one side of its shield the motto "custom," carries too on the other the bold word "competition," and this second side is likely to be presented to the public mostly in the future, because, they who lead the styles in any department whatsoever will always offer their services to Society at an advantage to themselves, that being one form of competition, and their rate of compensation will be legitimately higher than the average rate of their fellows, of which a good instance was the marked worldly prosperity during the decade of the Eighties of Worth, the man-dressmaker of Paris.

(g) Legal Restrictions are another cause acting on wages, by acting directly on the Supply of laborers. Laws inhibiting or promoting immigration; laws appointing the fees and salaries of officials; tariff-taxes, whether prohibitory or only restrictive; laws creating privileged classes of any kind, which is only another designation for laws restricting the rights of the masses; unequal modes of taxation, whether adopted in ignorance or by design; all have a direct and powerful agency upon the distribution of laborers, upon the supply of them at given points, and upon the rates of their wages. Governments are coming, however, much more freely than formerly, but never through their natural choice and drift as governments, only by the gradual and oft-disappointed compulsion of their citizens, to leave all these matters Economical except the wages of their own servants and those commodities which they choose to tax, to the simple and safe action of Supply and Demand.

(h) Voluntary Associations for that avowed purpose were a mediæval, and have come to be again a modern, agency in adjusting the Supply of laborers to their respective markets, and in regulating the wages of various classes of them. The Guilds of the Middle Ages, and particularly the old guilds of London, had a remarkable history, upon which we can not here even touch. Their local importance is sufficiently attested by the fact, that the City Hall of London is to this day the "Guildhall." King Edward III. humored the civic feeling of his time by becoming himself a member of the Guild of Armorers. "A seven years' apprenticeship formed the necessary prelude to full membership of any trade-guild. Their regulations were of the minutest character; the quality and value of work was rigidly prescribed, the hours of toil fixed from daybreak to curfew, and strict provision made against competition in labor. At each meeting of these guilds their members gathered round the Craft-box, which contained the rules of their Society, and stood with bared heads as it was opened. The warden and a quorum of guild-brothers formed a court which enforced the ordinances of the guild, inspected all work done by its members, confiscated unlawful tools or unworthy goods; and disobedience to their orders was punished by fines, or in the last resort by expulsion, which involved the loss of right to trade. A common fund was raised by contributions among the members, which not only provided for the trade objects of the guild, but sufficed to found chantries and masses, and set up painted windows in the church of their patron saint. Even at the present day the arms of the craft-guild may often be seen blazoned in cathedrals, side by side with those of prelates and kings."[6]

The Trades-Unions and Brotherhoods of the present day cannot plead the provocations and justifications of their mediæval predecessors. It cannot be denied, however, that they have some provocations and justifications in the bad example set before them by the various combinations (implied or explicit) of the Wages-payers as a class. If the Wages-payers combine, then the Wages-takers would seem to have no resource but in combination. Both alike are wrong in this. Both alike oppose in this the spirit of Political Economy, which is ever the spirit of Freedom, and is ever against such factitious associations for such purposes, because they tend to destroy the independence of personal action on the part of both payers and takers of wages, and tend also to bring all the workmen of any one general grade down to one level of effort and reward.

(i) Lastly, we must note the influence of Casual Events upon wages, as these events affect the Supply of laborers. For example, in 1348, a terrible plague, called the Black Death, invaded England and swept away more than one-half of its population. "Even when the first burst of panic was over, the sudden rise of wages consequent on the enormous diminution in the supply of free labor, though accompanied by a corresponding rise in the price of food, rudely disturbed the course of industrial employments; harvests rotted on the ground, and fields were left untilled, not merely from scarcity of hands, but from the strife which now for the first time revealed itself between Capital and Labor" (Green). The landowners of the country districts, and the craftsmen of the towns, not understanding the law of Wages as an invariable resultant of the Demand and Supply of laborers, were scandalized by what seemed to them the extravagant demands of the new labor-class. Parliament equally ignorant with the People of the natural economic law, enacted as follows: "Every man or woman of whatsoever condition, free or bond, able in body, and within the age of threescore years, and not having of his own whereof he may live, nor land of his own about the tillage of which he may occupy himself, and not serving any other, shall be bound to serve the employer who shall require him to do so, and shall take only the wages which were accustomed to be taken in the neighborhood where he is bound to serve two years before the plague began." Afterwards, the runaway laborer was ordered by Parliamentary enactment to be branded in the forehead by a hot iron, and the harboring of the country serfs in the towns, in which under their civic rules a serf keeping himself a year and a day was thereafter free, was rigorously forbidden. These acts of Parliament, and many more of the same kind, were powerless to keep down wages to the old standard, but were powerful to keep up ill-blood and social discontent. They prepared the way for agitators like John Ball, for the poet-agitator Piers Ploughman, and for the great Peasant Revolt of 1381. John Ball's famous rhyme condensed the scorn for the nobles, the longing for just rule, and the resentment at oppression, of the peasants of that time and of all times:—

"When Adam delved and Eve span,
Who was then the gentleman?"

A hundred years after the Black Death the wages of a common English laborer—we have the highest authority for the statement—commanded twice the amount of the necessaries of life which could have been obtained for the wages paid under Edward III.