§ 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 given powerful 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's Memoirs 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:—