Even in the lowest kinds of work there is no doubt some tendency to stick to the former money wage and thus to raise somewhat the standard of real wages, but where the competition is keenest this vis inertiæ is liable to be overborne, and money wages fall with prices. As we rise to the more highly skilled, paid, and organised grades of labour, we come to workers who are less exposed to the direct constant strain of competition, where there is not a chronic over-supply of labour. Here a fall of retail prices is not necessarily or speedily followed by any corresponding fall of money wages, and the results of the higher real wages enjoyed for a time impress themselves in a higher habitual standard of comfort and strengthen the resistance which is offered to any attempt to lower money wages, even though the attempt may be made at a time when an over-supply of labour does exist.
In proportion as a class of workers is highly paid, educated, and organised, it is able to gain the benefit which improved machinery brings to the consumer, because it is better able to resist the economic tendency to determine wages by reference to a standard of comfort independent of monetary considerations. So far as the lowest waged and most closely competing labourers have gained by the fall of prices, it has been due to the pressure of sentiment on the part of the better class of employers and of the public against the lowering of money wages, even where the smaller sum of money will purchase as much as a larger sum previously.
2. The smaller the income the larger the proportion of it that is spent upon commodities whose expense of production and whose price is less affected by machinery. Machine-production, by the fall of prices it brings, has benefited people in direct proportion to their income. The articles which have fallen most rapidly in price are those comforts and luxuries into which machine-production enters most largely. The aristocracy of the working classes, whose standard of comfort includes watches, pianos, books, and bicycles, has gained much more by the fall of prices than those who are obliged to spend all their wages on the purchase of bare necessaries of life. The gain of the former is manifold and great, the benefit of the latter is confined to the cheapening of bread and groceries—a great benefit when measured in terms of improved livelihood no doubt, but small when compared with the increase of purchasing power conferred by modern production upon the Lancashire factory family, with its £3 or £4 a week, and in large measure counterbalanced by the increased proportion of the income, which, in the case of town operatives, goes as rent and price of vegetables, dairy produce, and other commodities which have risen in price.
3. The highly-paid operatives generally work the shortest hours, the low-paid the longest. So far as this is not compensated by an increased intensity of labour on the part of those working short hours, it implies an increased capacity of making the most out of their wages. Longer leisure enables a worker to make the most of his consumption, he can lay out his wages more carefully, is less tempted to squander his money in excesses directly engendered by the reaction from excessive labour, and can get a fuller enjoyment and benefit from the use of the consumables which he purchases. A large and increasing number of the cheapest and the most intrinsically valuable commodities, of an intellectual, artistic, and spiritual character, are only open to the beneficial consumption of those who have more leisure at their command than is yet the lot of the low-skilled workers in our towns.
§ 2. If we compare the statistics of wages we shall find that the largest proportionate rise of money wages has been in the highly-organised machine industries, and that the benefit which machinery confers upon the workers in the capacity of consumers falls chiefly to the same workers.
It must not, however, be assumed that improved methods of production yield their full benefit through competition to the consuming public. On the contrary, much of the economy of machine-production fails to exercise its full influence upon retail prices. There are two chief reasons for this failure. To one of these adequate attention has been already drawn, the growth of definite forms of capitalist monopoly, which secure at some point or other in the production of a commodity, as higher profits, that which under free competition would pass to the consumer through lower shop prices. The second consists in the abnormal growth of the distributive classes, whose multiplication is caused by the limitation which the economy of machinery imposes upon the amount of capital and labour which can find profitable employment in the extractive and manufacturing processes. A larger and larger number of industrial workers obtain a living by a subdivision of the work of distribution carried to a point far beyond the bounds of social utility. For, on the one hand, when competition of manufacturers and transporters is more and more confined to a small number of large businesses which, because their united power of production largely transcends the consumption at profitable prices, are driven into closer competition, a larger amount of labour is continually engaged in the attempt of each firm to secure for itself the largest share of business at the expense of another firm. On the other hand, shut out from effective or profitable competition in the manufacturing industries, a larger amount of capital and labour seeks to engage in those departments of the distributive trade where new-comers have a better chance, and where by local settlement or otherwise they have an opportunity of sharing the amount of distribution that is to be done. Hence a fall of wholesale prices is usually not reflected in a corresponding fall of retail prices, for competition in retail trade, as J.S. Mill clearly recognised, "often, instead of lowering prices, merely divides the gains of the high price among a greater number of dealers."[238]
§ 3. The wide difference between the economic position of the skilled mechanic and the common labourer shows how fallacious is that treatment of the influence of machinery upon the condition of the working classes which is commonly found in treatises of political economy. To present a comparative picture of the progress of the working classes during the last half century, which assigns to them an increase of money wages, obtained by averaging a number of rises in different employments, and reduces this increase to real wages without any reference to the different use of wages by different classes, is an unscientific and mischievous method of dealing with one of the most important economic questions. The influence of machine-production appears to be widely different upon the skilled mechanic and the common labourer considered both as producers and consumers, and tends to a wide difference in standard of comfort between the two classes. This difference is further enhanced by the indirect assistance which machinery and large-scale industry gives to the skilled workers to combine and thus frequently to secure wages higher than are economically requisite to secure their efficient work. On the other hand, growing feelings of humanity and a vague but genuine feeling of social justice in an ever larger portion of the public often enable the low-skilled worker to secure a higher standard of comfort than the operation of economic competition alone would enable him to reach. But after due allowance is made for this, the conclusion is forced upon us that the gain of machine-production, so far as an increase in real wages is concerned, has been chiefly taken by the highly-skilled and highly-waged workers, and that as the character of work and wages descends, the proportionate gain accruing from the vast increase of productive power rapidly diminishes, the lowest classes of workers obtaining but an insignificant share.
FOOTNOTES:
[238] Principles of Political Economy, Bk. ii., chap. iv. § 3.