Without investigating the validity of the figures too closely, it may safely be affirmed that the movement of wages has been distinctly upward, and that the rise was certainly not less than 50 per cent. For the United States the increase has not been so great, probably because wages started at a higher level. According to the Aldrich report, if wages and prices in 1860 in the United States be taken as 100, relative wages in 1840 were 82.5 and relative prices 98.5; in 1880, they were respectively 143 and 103.4; in 1903, they were 187 and 103. That is to say, relative wages showed a marked advance and real wages, owing to the fact that general prices remained almost stationary, an even greater improvement. So, too, the hours of labor appear to have been shortened in Great Britain about two hours a day (from 10 to 14 hours to 8 to 12), and in the United States probably as much, the average length of the working
day in certain employments decreasing from 10.3 hours in 1880 to 9.6 hours in 1903.
In the field of production the most dramatic and striking advances have been achieved. The application of steam and more recently of electricity as the motive power for the newly invented and constantly improved machinery has permitted an enormous expansion of production, which has been made still greater by the opening up of new mines and new lands and improvements in the machinery of transportation and exchange and in the organization of business. Especially in the United States where the natural resources were especially rich and the people energetic and ingenious, has the growth of wealth been marvelous. And yet almost a century after the beginning of the Industrial Revolution in England, Mill alleged that labor-saving inventions had not lightened the toil of any human being; they have only enabled a greater number to live the same life of drudgery and imprisonment. What answer can we make to this indictment today? Why is it that the working class still has so little of this vast increase of wealth and still lives so close to the border line of poverty?
To answer this question thoroughly would require an analysis of the subject of distribution, but a few reasons may be briefly suggested.[51] While the social income has been greatly increased by these improvements the amount paid in rent to owners of land, water powers, etc., has also grown. If we approve of private property in land as best adapted to stimulate its use for society, then we must admit the justice of rent, and of its payment to present land owners. Similarly, too, the payment of interest to the owners of capital has absorbed a large part of the increased income of society, though the proportion going to this factor is probably growing smaller owing to the fall in the rate of interest. But as we have seen, modern industry
is essentially capitalistic, that is, it depends upon the use of capital for its operations. Since we allow private property in capital and believe that to be the best method yet devised for securing its accumulation, we must justify interest. Profits in general are fairly earned by industrial organizers and others who manage our businesses, and are necessary to enlist their services. Probably in most cases society does not overpay these leaders of industry. But some forms of profit, as those derived solely from monopoly, especially from the monopoly of limited natural resources, are both too large and socially unearned. These society should clearly control and absorb.
One reason then why labor has not profited more by the great increase in wealth is that the other factors in production have laid claim to their shares also. There is good reason for believing, however, that the share of labor has been steadily growing greater all the time, and that it today gets a larger proportion of the social income than ever before. This fact is obscured by the great growth in population, which has more than doubled in the last hundred years in Europe and has shown a twentyfold increase in the United States. The larger income is divided among more people, and though each today gets more than his grandfather, there is not yet enough produced to make all rich. Indeed, if the wealth of the United States were divided equally, it would not provide a competence for anybody. The difficulty is not merely that there is inequality in distribution, but that the need of a much greater production of wealth must also be met. Inequalities may be adjusted by such measures as progressive inheritance taxes, but resort to this or similar methods must not be so severe as to weaken the motives for the accumulation of capital. That must form one of the strongest reasons for rejecting the drastic proposals of socialism.
Improvements in production have, however, not merely increased the total output; they have greatly reduced the
cost of many articles and have brought within the reach of the poorest consumers others which a century ago would have been unattainable. Improvements in transportation have served to bring an ever-increasing variety of products to market. The material progress of a people can be gaged fairly well by their consumption of certain semi-luxuries, such as tea, coffee, sugar, tobacco, beer, etc.; these show a steady increase during the past century. “Thus in the United States between 1871 and 1903 inclusive, the per capita consumption of coffee increased from 7.91 to 10.79 pounds, that of sugar from 36.2 pounds to 71.1 pounds, that of malt liquors from 6.1 gallons to 18.04 gallons, that of wheat and flour from 4.69 bushels to 5.81 bushels.”[52] A similar investigation for Great Britain shows an average increase in a considerably larger list of the same character of 40 per cent between 1860-64 and 1895-96. It must be admitted that there is much lack of economy in present consumption; there is often wasteful and positively injurious consumption, an illustration of which would be found by many persons in the increased consumption of malt liquors cited above. From a purely economic standpoint the enormous waste of war and the burdensome cost of military and naval armament must also be condemned.
The task of prophecy is usually a fruitless one, but at least it is now possible for us to indicate some of the lines along which reform is needed, and the goal towards which the future of progress will probably move. The natural resources of the nation must be more carefully conserved and reckless destruction prevented; at the same time the monopolization of limited resources by private individuals or corporations must be rigidly restricted. The growth of trusts seems but the last step in a steady growth in size of the business unit and may be accepted as an economical method of industrial organization, but the evils of corporate financial management must be carefully guarded
against. The growth of labor organizations, on the other hand, must be admitted to be equally logical and desirable. While they often display monopolistic tendencies, yet our main reliance must be placed upon these agencies to secure bargains for laborers on terms of equality with their employers. But on behalf of wage-earners not easily organized we must resort to state interference by means of factory and labor legislation in order to secure equitable labor contracts. Free competition which exposes women and children to the greed of unscrupulous employers is defended by no one today, and it is clearly recognized that legislation along these lines must be further extended, as for instance in the direction of industrial insurance, old age pensions, adequate care for the unemployable, etc.