Performance of Locomotives. Relation of Wages to Total Cost per Mile Run.
| Years. | Cost of wages of engineers and firemen per mile run. | Total cost per mile run. | Years. | Cost of wages of engineers and firemen per mile run. | Total cost per mile run. | ||
| Cents. | Cents. | Cents. | Cents. | ||||
| 1857 | Gold. | 4.51 | 26.22 | 1872 | Currency. | 5.77 | 21.76 |
| 1858 | 3.97 | 19.81 | 1873 | 5.84 | 21.10 | ||
| 1859 | 3.81 | 20.78 | 1874 | 6.02 | 19.57 | ||
| 1860 | 3.96 | 20.17 | 1875 | 6.03 | 19.57 | ||
| 1861 | 3.84 | 18.92 | 1876 | 5.79 | 18.81 | ||
| 1862 | Currency. | 3.85 | 17.42 | 1877 | 5.54 | 17.21 | |
| 1863 | 3.93 | 22.28 | 1878 | 5.46 | 15.29 | ||
| 1864 | 5.56 | 33.52 | 1879 | Gold. | 5.41 | 14.15 | |
| 1865 | 5.65 | 37.44 | 1880 | 5.41 | 14.95 | ||
| 1866 | 5.78 | 32.67 | 1881 | 5.54 | 16.58 | ||
| 1867 | 6.18 | 29.62 | 1882 | 5.09 | 15.82 | ||
| 1868 | 6.11 | 27.57 | 1883 | 5.35 | 15.57 | ||
| 1869 | 5.88 | 25.49 | 1884 | 5.28 | 14.45 | ||
| 1870 | 5.95 | 25.15 | 1885 | 5.49 | 15.02 | ||
| 1871 | 5.72 | 21.50 | 1886 | 5.52 | 13.93 | ||
In 1857 the engineers and firemen received 17 201⁄1000 per cent. of total cost.
In 1865 the engineers and firemen received 15 91⁄1000 per cent. of total cost.
In 1867 the engineers and firemen received 20 865⁄1000 per cent. of total cost.
In 1886 the engineers and firemen received 39 627⁄1000 per cent. of total cost.
These illustrations from the railroads are plainly indicative of a general truth of the utmost importance in Political Economy, namely, that all increase of Capital and all inventions and improvements in its practical application, while it redounds to the benefit of capitalists as a class, redounds in a still higher degree to the benefit of laborers as a class. Let us now attend for a moment to the convincing Proof of this truth in two phases of such proof, and also to a cheering conclusion that follows it.
(a) As any country grows older in time and richer through abstinence, and as the whole world thus grows older and richer, the tendency there and everywhere towards a general decline in the rate per centum for the use of capital becomes patent and universal. The rate of interest on money loaned, and the rate of profits on capital used, tend all the while to go down as and because capital accumulates. No one will dispute this as a simple fact of history. And no economist will dispute, that this is just what we might expect beforehand as a corollary from the admitted proposition, that, other things being equal, an increased Supply of anything means a lessened Value for any specific part of it. Three centuries ago in England the legal rate of interest was 10%, while now the current rate is about 4% in that country, and has been considerably lower than that in Holland, although in both countries and everywhere else there are temporary interruptions and reactions in the constant tendency now being considered. During the first years of mining operations in California, from 8% to 15% per month with security of real estate was paid for the use of money, which enormous rates long ago declined to rates not much higher than those paid in the States along the Mississippi River, and in these also the rates are all the while approximating those current in the older Eastern States, whose own rates too are slowly declining. But, while there is a less rate of profit or interest on each 100 invested, there are many more hundreds capitalized; consequently, there is an absolute gain to capitalists as a class, at once in the aggregate amount of the capital and in the aggregate sum of the profits from it, since no capitalist would have a motive to capitalize further under the smaller rates of profit, unless the aggregate of profits under the new conditions were greater than under the old condition of higher rates; and, as much of this accumulating capital in order to become productive must now be offered to laborers in the form of wages, we might almost pronounce beforehand, that it would prove both an absolute and also a relative gain to laborers as a class. And so it is.
(b) Let us take to figures. An hypothesis or supposed case, whenever it may easily become an overt fact, may be reasoned from just as logically and securely as the overt fact itself. Let $100,000,000, while the rate of profit is 6%, and $500,000,000, when the rate has fallen to 4%, be expended in payment of simple wages. So far forth as that one element of cost goes, the value of the products to be divided yearly between capitalists and laborers will become respectively $106,000,000 and $520,000,000. In the first case, $6,000,000 is profits and $100,000,000 is wages; in the second case, $20,000,000 is profits and $500,000,000 is wages. Here is an absolute gain to the capitalists, since profits have gone up from $6,000,000 to $20,000,000, and so are more than three times as great as before. But wages have gone up both absolutely and relatively to the rise of profits. They have risen from $100,000,000 to $500,000,000, and are five times as great as before. Profits have risen as in the ratio 1:3+, but wages in the ratio of 1:5. This arithmetical example is put for the sake of illustration merely, but the principle of it holds good in every case, in which the rate per centum goes down in consequence of the increase of capital in business; and, therefore, the advantages of ever-enlarging Capital are even greater to laborers as a class than to the capitalists themselves. Most assuredly, if the capitalists take less out of each hundred of the swelling hundreds now than before, the laborers must take more out of each hundred than before. Profits and Wages are reciprocally the leavings of each other, because the aggregate products created by the joint agency of Capitalist and Laborer are wholly to be divided between the two. There can be no other claimant even.
(c) This demonstration is extremely important in Political Economy, and consequently in Social Life; for it proves beyond the possibility of a cavil, the Value of personal services tends constantly to rise, not only as compared with the Value of the material commodities which by the aid of capital they help to create (a truth we have seen before), but also as compared with the Value of the use of its co-partner capital itself; and therefore, that there is inwrought into the very substance of things in this world a tendency towards an equality of economical condition among men. God has ordered it, and men cannot radically alter it. Self-interest is indeed the mainspring of movement in the economic world; but the beauty of it and the wonder of it is, that no man can labor intelligently and productively under the influence of self-interest without at the same time benefiting the masses of men. His fair exchanges benefit the parties of the other part as much as they benefit himself. His very savings productively employed are poor men's livings. Only under the blessed freedom of universal Buying and Selling, subject only to the taxation of a good Government for public purposes purely, can these broad benefits designed by a wise Providence be fully realized in action; and the power of individual greed and corporate privilege and governmental perversion to thwart the beneficent though complicated workings of these laws of Capital and Labor towards the common weal and universal progress of mankind is shortlived and soon punished.
4. How comes it about, then, if these laws of mutual inter-dependence between capitalists and laborers are so well-placed and Providentially balanced, that there always have been and are still so many misunderstandings and ill-feelings and actual collisions between employers and skilled laborers, whose interests are at bottom one and whose relations ought to be so cordial? This is the last topic in our Chapter on Personal Services. Here we must look around narrowly and tread carefully. But there is a path. We can find it if we will. It leads through many short-comings in men's characters and through much ignorance of plain economical truths and past unreasoning jealousies and aggregated action on the part of both classes, and over the needful distinctions between impulsive selfishness and a true self-interest back to the same old laws of God laid down at once in the constitution of things and in the constitution of men.
Labor-troubles are almost as old as Civilization. The Greek poet Euripides in his play of the "Supplicants" both indicates facts as they were then, and points out a future hope in which we may share, that these middle classes by a better harmony preordained and mutually beneficial may yet "save the State":—
"In each State
Are marked three classes: of the public good
The rich are listless, all their thoughts to more
Aspiring; they that struggle with their wants,
Short of the means of life, are clamorous, rude,
To envy much addicted, 'gainst the rich
Aiming their bitter shafts, and led away
By the false glosses of their wily leaders.
'Twixt these extremes there are who save the State,
Guardians of order, and their country's laws."