Whatever allowance may be made for the effects of increased intensity of labour, and the indirect influences of machinery, the bulk of evidence clearly indicates that machine-tenders are better fed, clothed, and housed than the hand-workers whose place they take, and that every increase in the efficiency and complexity of machinery is attended by a rise in real wages. The best machinery requires for its economical use a fair standard of living among the workers who co-operate with it, and with the further development of machinery in each industry we may anticipate a further rise of this standard, though we are not entitled to assume that this natural and necessary progress of comfort among machine-workers has no fixed limit, and that it is equally applicable to all industries and all countries.
It might, therefore, appear that as one industry after another fell under machine-production, the tendency of machine-development must necessarily make for a general elevation of the standard of comfort among the working classes. It may very well be the case that the net influence of machinery is in this direction. But it must not be forgotten that the increased spread of machine-production does not appear to engage a larger proportion of the working population in machine-tending. Indeed, if we may judge by the recent history of the most highly-evolved textile industries, we are entitled to expect that, when machinery has got firm hold of all those industries which lend themselves easily to routine production, the proportion of the whole working population engaged directly in machine-tending will continually decrease, a larger and larger proportion being occupied in those parts of the transport and distributing industries which do not lend themselves conveniently to machinery, and in personal services. If this is so, we cannot look upon the evolution of machinery, with its demand for intenser and more efficient labour, as an adequate guarantee of a necessary improvement in the standard of comfort of the working classes as a whole. To put the matter shortly, we have no evidence to show that a rise in the standard of material comfort of shopmen, writing clerks, school-teachers, 'busmen, agents, warehousemen, dockers, policemen, sandwich-men, and other classes of labour whose proportion is increasing in our industrial society, will be attended by so considerable a rise in the efficiency of their labour as to stimulate a series of such rises. The automatic movement which Schulze-Gaevernitz and others trace in the typical machine-industries is not shown to apply to industry as a whole, and if the tendency of machine-development is to absorb a larger proportion of the work but a smaller proportion of the workers, it is not possible to found large hopes for the future of the working classes upon this movement of the earning of high wages in machine-industry.
§ 9. But though the individual self-interest of the producer cannot be relied upon to favour progressive wages, except in certain industries and up to a certain point, the collective interest of consumers lends stronger support to "the economy of high wages." We have seen that the possession of an excessive proportion of "power to consume" by classes who, because their normal healthy wants are already fully satisfied, refuse to exert this power, and insist upon storing it in unneeded forms of capital, is directly responsible for the slack employment of capital and labour. If the operation of industrial forces throw an increased proportion of the "power to consume" into the hands of the working classes, who will use it not to postpone consumption but to raise their standard of material and intellectual comfort, a fuller and more regular employment of labour and capital must follow. If the stronger organisation of labour is able to raise wages, and the higher wages are used to demand more and better articles of consumption, a direct stimulus to the efficiency of capital and labour is thus applied. The true issue, however, must not be shirked. If the power of purchase now "saved" by the wealthier classes passed into the hands of the workers in higher money wages, and was not spent by them in raising their standard of comfort, but was "invested" in various forms of capital, no stimulus to industry would be afforded; the "savings" of one class would have fallen into the hands of another class, and their excess would operate to restrict industry precisely as it now operates. Though we would gladly see in the possession of the working classes an increased proportion of those forms of capital which are socially useful, this simple act of transfer, however brought about, would furnish no stimulus to the aggregate industry. From the standpoint of the community nothing else than a rise in the average standard of current consumption can stimulate industry. When it is clearly grasped that a demand for commodities is the only demand for the use of labour and of capital, and not merely determines in what particular direction these requisites of production shall be applied, the hope of the future of our industry is seen to rest largely upon the confident belief that the working classes will use their higher wages not to draw interest from investments (a self-destructive policy) but to raise their standard of life by the current satisfaction of all those wholesome desires of body and mind which lie latent under an "economy of low wages." The satisfaction of new good human desires, by endowing life with more hope and interest, will render all intelligent exertion more effective, by distributing demand over a larger variety of commodities will give a fuller utilisation both of natural and human resources, and by redressing the dislocated balance of production and consumption due to inequality of purchasing power, will justify high wages by increased fulness and regularity of work. But it must be clearly recognised that however desirable "saving" may seem to be as a moral virtue of the working classes, any large practice of saving undertaken before and in preference to an elevation of current consumption, will necessarily cancel the economic advantages just dwelt upon. Just as the wise individual will see he cannot afford to "save" until he has made full provision for the maintenance of his family in full physical efficiency, so the wise working class will insist upon utilising earlier accesses of wages in promoting the physical and intellectual efficiency of themselves and their families before they endeavour to "invest" any considerable portion of their increased wages. Mr. Gould puts this point very plainly and convincingly: "Where economic gains are small, savings mean a relatively low plane of social existence. A parsimonious people are never progressive, neither are they, as a rule, industrially efficient. It is the man with many wants—not luxurious fancies, but real legitimate wants—who works hard to satisfy his aspirations, and he it is who is worth hiring. Let economists still teach the utility and the necessity of saving, but let the sociologist as firmly insist that to so far practise economy as to prevent in the nineteenth century a corresponding advance in civilisation of the working with the other classes is morally inequitable and industrially bad policy. I am not sorry that the American does not save more. Neither am I sure but that if many working-class communities I have visited on the Continent were socially more ambitious, there would not be less danger from Radical theories. One of the most intelligent manufacturers I ever met told me a few years ago he would be only too glad to pay higher wages to his working people, provided they would spend the excess legitimately and not hoard it. He knew that in the end he should gain thereby, since the ministering to new wants only begets others."[237] If there are theoretic economists who still hold that "a demand for commodities is not a demand for labour," they may be reminded that a paradox is not necessarily true. In fact, this particular paradox is seen to be sustained by a combination of slipshod reasoning and moral prejudice. The growing opinion of economic students is veering round to register in theory the firm empirical judgment from which the business world has never swerved, that a high rate of consumption is the surest guarantee of progressive trade. The surest support of the "economy of high wages" is the conviction that it will operate as a stimulus to industry through increased consumption. The working classes, especially in the United States and in England, show a growing tendency to employ their higher wages in progressive consumption. Upon the steady operation of this tendency the economic future of the working classes, and of industry in general, largely depends.
FOOTNOTES:
[225] Wealth of Nations, vol. i. p. 86.
[226] Cf. Northern Tour, vol. ii. p. 86.
[227] It is true that out-and-out defenders of the factories against early legislation sometimes had the audacity to assert the "economy of high wages," and to maintain that it governed the practice of early mill-owners. So Ure, "The main reason why they (i.e. wages) are so high is, that they form a small part of the value of the manufactured article, so that if reduced too low by a sordid master, they would render his operatives less careful, and thereby injure the quality of their work more than could be compensated by his saving in wages. The less proportion wages bear to the value of the goods, the higher, generally speaking, is the recompense of labour. The prudent master of a fine spinning-mill is most reluctant to tamper with the earnings of his spinners, and never consents to reduce them till absolutely forced to it by a want of remuneration for the capital and skill embarked in his business" (Philosophy of Manufactures, p. 330). This does not, however, prevent Dr. Ure from pointing out a little later the grave danger into which trade-union endeavours to raise wages drive a trade subject to the competition of "the more frugal and docile labour of the Continent and United States" (p. 363). Nor do Dr. Ure's statements regarding the high wages paid in cotton-mills, which he places at three times the agricultural wages, tally with the statistics given in the appendix of his own book (cf. p. 515). Male spinners alone received the "high wages" he names, and out of them had to pay for the labour of the assistants whom they hired to help them.
[228] Der Grossbetrieb, p. 132. In regarding the advance of recent average wages it should be borne in mind that the later years contain a larger proportion of adults. In considering the net yearly wages a deduction for unemployment should be made from the sums named in the table.
[229] Account must be taken of the depressed condition of hand-loom weavers, who had not yet disappeared.