The Wages Question: A Treatise on Wages and the Wages Class
By Francis A. Walker
Francis A. Walker’s
The Wages Question is generally credited as having demolished the prior, antiquated “wages fund” theory of wages [see Book I, Chapters
IX]. In the process, Walker simultaneously laid the groundwork for
John Bates Clark’s definitive descriptions of the marginal products of labor and capital. His interest in the nature of the firm contributed to
Frank H. Knight’s work by clearly describing the factors of production and how to categorize their rewards into wages, rent, and profits.Walker’s work and influence served as models not only because he discussed production, labor, and wages with unusual clarity for his time, but also because his interest in monetary issues (influenced by his father, also an economist) enabled him to describe the
difference between nominal and real values. His clarifications of monetary issues coincided with concurrent national interests in
the gold/silver/bimetallism parity controversies of the late 1800s, and the meaning of money for an economy. Walker later wrote a textbook that was used in classrooms till the publication of
Principles of Economics.Walker became the first President of the
American Economic Association. His professorships at Yale and MIT changed the courses of their economics programs. His leadership abilities were evident in every realm of his life, including his stint as a General during the Civil War. His devotion to economics as a profession paved the way for many generations of U.S. economists.For all his contributions, Walker’s popularity may also have been one of the main sources of the promulgatation of many current misunderstandings. His views of
Thomas Robert Malthus’s writings may have been the source of the popular subsequent mis-association of Carlyle’s 1849 term, the
“dismal science,” with Malthus. (Walker’s interest in labor and wages naturally led him to consider population, but may also have caused him to emphasize pressures inherent in rapid population growth, race, and class distinctions over
Malthus’s original interest in the economic incentives that deter overpopulation.) Walker’s general views and influence may have led to other underlying divisions behind different strains in macro- and micro-economic research that persist to this day.Lauren F. Landsburg
First Pub. Date
London: Macmillan and Co.
The text of this edition is in the public domain. Picture of Young courtesy of The Warren J. Samuels Portrait Collection at Duke University.
- Front Matter
- Part I, Chapter 1
- Part I, Chapter 2
- Part I, Chapter 3
- Part I, Chapter 4
- Part I, Chapter 5
- Part I, Chapter 6
- Part I, Chapter 7
- Part I, Chapter 8
- Part I, Chapter 9
- Part II, Chapter 10
- Part II, Chapter 11
- Part II, Chapter 12
- Part II, Chapter 13
- Part II, Chapter 14
- Part II, Chapter 15
- Part II, Chapter 16
- Part II, Chapter 17
- Part II, Chapter 18
- Part II, Chapter 19
- Concluding Remarks
I USE the term, degradation of labor, here in the sense of the reduction of the laborer from a higher to a lower industrial grade.
The constant imminence of this change, the smallness of the causes, often accidental in origin and temporary in duration, which may produce it, and the almost irreparable consequences of such a catastrophe, are not sufficiently attended to in discussions of wages. To the contrary, it is the self-protecting power of labor which is dwelt upon. It is shown how, if by any insidious cause, or from any sudden disaster in trade or production, be the same local or general, industry is impaired and employment diminished, labor immediately sets itself, by natural laws, to right itself, by withholding increase of population, or by migrating to more fortunate localities.
The same, if labor be crowded down by the power of capital, or by unjust laws: through economical harmonies which have excited the admiring gratitude of many writers, the vindication of the laboring class is effected automatically and peacefully, without revolution and without machinery. The excessive profits which the employing class are thus enabled for a time to make, increase the capital of the community, and thus give enhanced employment to laborers, so that, in the end, it is quite as well as if the money had gone in wages instead of profits. Thus Prof. Perry says: “If capital gets a relatively too large reward,
nothing can interrupt the tendency that labor shall get, in consequence of that, a larger reward the next time…. If capital takes an undue advantage of labor at any point, as unfortunately it sometimes does, somebody at some other point has, in consequence of that, a stronger desire to employ laborers, and so the wrong tends to right itself. This is the great conservative force in the relations of capital to labor.”
Now, of the degrees of celerity and certainty with which population does, in fact, adapt itself to changes in the seats or in the forms of industry, or assert itself against the encroachments of the employing class or the outrages of legislation, I shall have occasion to speak with some fulness hereafter (Chapter XI.). But I desire at the present time, in close connection with our discussion of the causes which contribute to the efficiency of labor, to point out the consequences of any failure or undue delay on the part of population in thus resenting the loss of employment or the reduction of wages.
The trouble is, these changes which are to set labor right always require time, and often a very long time. There is danger, great danger, that meanwhile men will simply drop down in the industrial and social scale, accept their lot, and adapt themselves to the newly-imposed conditions of life and labor.
*77 If this most melancholy result
takes place, then, it should be observed,
the restorative changes which have been spoken of need not be effected at all. All things settle to the new level; industrial society goes on as before, except that there is a lower class of citizens and a lower class of laborers. There is thereafter no virtue at all, no tendency even, in strictly industrial forces or relations to make good that great loss. In a word, much of the reasoning of the schools and the books on this subject assumes that the laboring class will resent an industrial injury, and will either actively seek to right themselves, or will at least abide in their place without surrender until the economical harmonies have time to bring about their retribution. But the human fact (so often to be distinguished from the economical assumption) is, there is a fatal facility in submitting to industrial injuries which too often does not allow time for the operation of these beneficent principles of relief and restoration. The industrial opportunity comes around again, it may be, but it does not find the same man it left: he is no longer capable of rendering the same service; the wages he now receives are perhaps quite as much as he earns.
Let us take successively the cases of a reduction of wages and of a failure of employment. Let it be supposed that a combination of employers seeking their own immediate interests, that is, to get labor as cheaply as possible, perhaps under some pressure brought on them by the state of the market, succeeds in effecting a reduction of the wages of common labor, in a given community, from $1 to 75 cents per day. If the $1 previously received has allowed comforts and luxuries and left a margin for saving, and especially if intelligence and social ambition prevail in the community,
this reduction will probably be resented in the sense that population will be reduced by migration or by abstinence from propagation until the former wages are, if possible, restored. But if the previous wages have been barely enough to furnish the necessaries of life, with no margin for saving, and especially if the body of laborers are ignorant and unambitious, the probabilities are quite the other way. The falling off in the quantity or quality of food and clothing, and in the convenience and healthfulness of the shelter enjoyed, will at once affect the efficiency of the laborer. With less food, which is the fuel of the human machine, less force will be generated; with less clothing, more force will be wasted by cold; with scantier and meaner quarters, a fouler air and diminished access to the light will prevent the food from being duly digested in the stomach, and the blood from being duly oxydized in the lungs; will lower the tone of the system, and expose the subject increasingly to the ravages of disease. Now, in all these ways the laborer becomes less efficient simply through the reduction of his wages. The current economy asserts that whatever is taken off from wages is added to profits, and that hence a reduction of wages will increase capital and hence quicken employment, and hence, in turn, heighten wages. But we have seen it to be quite possible that what is taken from wages no man shall gain. It is lost to the laborer and to the world. Now, so far as strictly economic forces are concerned, where enters the restorative principle? The employer is not getting excessive profits, to be expended subsequently in wages. The laborer is not underpaid: he earns what he gets now no better than he formerly did his larger wages.
This image of the degraded laborer is not a fanciful one. There are in England great bodies of population, communities counting scores of thousands, which have come, in just this way, to be pauperized and brutalized; the inhabitants weakened and diseased by underfeeding and foul air until, in the second generation, blindness, lameness, and
scrofula become abnormally prevalent; hopeless and lost to all self-respect so that they can scarcely be said to desire a better condition, for they know no better; and still bringing children into the world to fill their miserable places in garrets and cellars, and, in time, in the wards of the workhouse.
Such a region is Spitalfields, where a large population, once reasonably prosperous and self-respectful, was ruined by a great change in the conditions of the silk manufacture. The severity of the industrial blows dealt them in quick succession was so great that the restorative principles never began to operate at all. Spitalfields succumbed to its fate. Instead of it being true that the misery of the weavers was a reason to them to emigrate, it constituted the very reason why they could not emigrate, or would not. Instead of it being true that their misery was a reason to them not to propagate, the more miserable they became, the more reckless, also, and the heavier grew their burdens. As a consequence, in a single human generation the inhabitants of Spitalfields took on a type suited to their condition. Short-lived at best, weakness, decrepitude, and deformity made their labor, while they lasted, ineffective and wasteful. So long ago as 1842 the Poor-Law Commissioners reported that it was almost a thing unknown that a candidate from this district for appointment in the police was found to possess the requisite physical qualifications for the force.
*78 “You could not,” says another witness, “raise a grenadier company among them all.” Yet it is recorded that the Spitalfields volunteers during the French wars were “good-looking bodies of men.”
But if this loss may be suffered in respect to the physical powers of the laborer through a reduction of wages, quite as certainly and quite as quickly may his usefulness be impaired through the moral effects of such a calamity. And just as the greatest possibilities of industrial efficiency lie
in the creation of hopefulness, self-respect, and social ambition among the laboring class, so the chief possibilities of loss lie in the discouragement or the destruction of these qualities. We have seen through what a scale the laborer may rise in his progress to productive power; by looking back we may see through what spaces it is always possible he may fall under the force of purely industrial disasters.
“The wages of labor,” says Adam Smith, “are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives.” If this be true, every reduction of wages must, in some degree, diminish the efficiency of labor. But it is when the reduction begins to affect the power of the workman to maintain himself according to the standard of decency which he has set for himself that the decline in industrial quality goes on most rapidly. The fact that he is driven to squalid conditions does not merely lower his physical tone: almost inevitably it impairs his sense of self-respect and social ambition, that sense which it is so difficult to awaken, so fatally easy to destroy. Especially as the pinching of want forces his family into quarters where cleanliness and a decent privacy become impossible does the degradation of labor proceed with fearful rapidity.
*79 Ambition soon fails the laborer utterly; self-respect disappears amid the beastly surroundings of his life; the spring of effort is broken; it may be he becomes dissipated and irregular, and his employer can not afford his beggarly pittance
now so well as formerly the wages of his hopeful labor.
All such effects tend to remain and perpetuate themselves. When people are down, economical forces solely are more likely to keep them down, or push them lower down, than to raise them up. It is only on the assumption that labor will resent industrial injuries, either by seeking a better market or by abstaining from reproduction, that it can be asserted that economical laws have a tendency to protect the laboring class and secure their interests. Just so far as laborers abide in their lot, and bring forth after their kind, while suffering industrial hardship, no matter how in the first place incurred, the whole effect and tendency of purely economical forces is to perpetuate, and not to remove, that hardship, either in the next year or in the next generation. Moral and intellectual causes only can repair any portion of the loss and waste occasioned.
If such are the unfortunate liabilities of a violent reduction of wages, it will of course appear, without any extended illustration, that the effects of a protracted failure of employment must be even more injurious to the efficiency of labor where the margin of life is at the best narrow and no accumulation of savings has been effected. All the hardships of the conditions described are here aggravated to an intolerable degree, and it is more than is to be expected of human nature if despondency and despair do not drive the unhappy laborer to the dram-shop
*80 to drown his sorrows and his fears in indulgences which will leave him worse in character and weaker in nerve and sinew. However industry may revive, the shattered industrial manhood can never be fully restored.
But perhaps even more than in the miserable resort to the dram-shop, the fatal effects of a cessation of employment
upon the industrial quality are seen in the readiness with which, when once he has had experience of public support, the laborer takes refuge in charity. Rarely is character found robust enough to throw off this taint. Let a man once be brought to that painful and most humiliating necessity, it is scarcely an exaggeration to say that ever after he must be counted as industrially dead. Where first he was driven, as to the bitterness of death, only by extremity of suffering, only after desperate efforts and long endurance, he now resorts with a fatal facility on the first suggestion of want. Known to his comrades as having received relief, his children bearing the pauper-brand among their playmates, all ingenuous sensibility soon disappears. “We can not,” says Mr. McCullagh Torrens, in his work ” The Lancashire Lesson,” dealing with the experiences of England during the Cotton Famine incident to our war—”we can not help marking the readiness with which, on the first cessation of adequate wages, large numbers of persons now resort to rates and subscription funds, many of whom three years ago would have shrunk instinctively from such public avowal of indigence.” This is the despair of industry. The pauper lies below the slave in the industrial scale. No lower depth opens downward from this.
My object, I repeat, in treating here this topic of “the degradation of labor” is to point out the constantly imminent danger that bodies of laborers will not soon enough or amply enough resent industrial injuries which may be wrought by the concerted action of employers, or by slow and gradual changes in production, or by catastrophes in business, such as commercial panics; and upon this, and in immediate connection with the discussion of the causes which contribute to the efficiency of labor, to show the self-perpetuating nature of such industrial injuries under the operation of the very economical principles which, with alert and mobile labor intelligently seeking its interests, would secure relief and restoration.
Mr. Mill here explains the whole permanent effect upon the grounds of Malthus, overlooking the equally important consideration that, without respect to the numbers of the laboring class, the efficiency of labor must have been seriously impaired by inadequate food and clothing, unhealthy dwellings, and, more than all, by the loss of hopefulness, cheerfulness, and self-respect.
the picture is drawn from life.“—Appendix to the First Report of the Poor-Law Commissioners, p. 34.
Part I, Chapter V