H3> LS3I CORNELL UNIVERSITY LIBRARY BOUGHT WITH THE INCOME OF THE SAGE ENDOWMENT FUND GIVEN IN 1891 BY HENRY WILLIAMS SAGE Cornell University Library HD6331 .N62 1892 Effects of machinery on wages by J. Shi olin 3 1924 032 451 035 Cornell University Library The original of tliis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924032451035 OPINIONS OP THE PRESS ON THE 50GIAL SCIENCE SERIES. ' The Principles of State Interference ' is another of the Series of Handhooks on Scientific Social Subjects. It would be fitting to close our remarks on this little work with a word of oommendation of the publishers of so many useful volumes by eminent writers on questions of pressing interest to a large number of the community. We have now received and read a good number of the handbooks which have been published in this series, and can speak in the highest terms of them. 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Ingbab Socialism : Scientific and Utopian. Fred Engbh University Extension. Dr. M. E. Sadlbb The Elements of Socialism. Prof. E. T. Em Communism and Anarchism. R. W. Bubnie Catholic Socialism. Dr. Nimi The Effects of Machinery on Wages. Prof. J. S. Nicholsos. The Fallacy of Saving. John M. Robbbtson SWAN SONNENSCHEIN & CO.: LONDON. CHARLES SCRIBNER'S SONS: NEW YOEK THE EFFECTS OF MACHINERY ON WAGES THE EFFECTS OF MACHINERY ON WAGES BY J, SHIELD NICHOLSON, M.A., D.Sc. PaoFESSOH OF Political Economy is the Univebsity of Edinburgh EXAUItlKR IN THE UNIVERSITY OK LoNDON \EW .4M) BEVISBD BDITIOS "Die Lohnfrage ist eine Culturfrage.'" — Buextano ILonton SWAN SONNBNSCHEIN & CO NEW YOEK: CHAELES SCEIBNEE'S SONS 1892 C) LiBRARV J \ ^, ^^\^ TREFACE TO THE FIRST EDITION. In the following pages greater space has certainly been devoted to the evil than to the good results of machinery, and lest I be supposed to hold pes- simist views on the subject a word of explanation seems desirable. I observed whilst collecting mate- rials for my Essay, that though many writers of repute had clearly and fully discussed the good effects of Machinery, hardly one had noticed the evils inherent in its use. For example, the veteran economist M. Chevalier devotes quite a third part of his Coins d'Economie Politrque (first published I believe in 1840) to an elaborate and detailed eulo- gium of Machinery, but he passes over the dangers, or treats them as if they were of small importance. Instead therefore of attempting to re-write what had been done so well already, I thought it better to give my attention to the parts of the subject prePace to the first edition. wliicli had received but little attention, and merely to notice in their proper place the results already fully treated of by other writers. For example, under the heading "Machinery as auxiliary to labour/' I thought it sufficient simply to state the two important positions that the increased cheap- ness in commodities was so far a rise in real wages, and that the enormous increase in our wealth due to machinery must ceteris pavlbiLs increase the de- mand for labour, and thus raise wages. Further exposition on this part seemed especially unneces- sary since Prof. Cliffe Leslie in his Essay on the course of Agricultural Wages in Europe had de- monstrated historically that wages had risen through these influences. la cases where the good results seemed to me to have been insufficiently stated, I endeavoured to put them in a clearer light; e.g. the increase of skill required by machinery and the better distri- bution of labourers. Still in attemptino- to make a slight advance on previous Avriters, and if possible to write what im'ght be of some practical use, I was PREFACE to THE FIRST EDITION. induced in general to give more consideration to the dangers of Machinery, wliicli appeared to me to have been almost entirely overlooked. The first step towards the amelioration of the evils caused by Machinery is to see distinctly what the evils are. The greatest, I take it, lies in the fluctuations and precariousness of wages, the inevitable result of a system of large industries.-' In many cases the proximate cause of this evil is over-production, and working-men have not unnaturally rushed to the conclusion that limitation of the supply is a remedy for all their troubles. But this is applying to freely produced commodities the laws which govern monopoly values only. Over-production I have pointed out can only exist "relatively to the demand and the means of distribution," and in this sense is very likely to occur. But it is useless to consider one factor to the exclusion of the others j supply can only be perfectly adjusted by a perfect knowledge of the demand and the means of dis- tribution, both of which depend on a number of ' See, however, note on p. 0-j. viii PREFACE TO THE FiRST EDlTlOlf. varying causes. Let working men^ tlien, instead of attempting the impracticable task of regulating supply, consider tlie remedies wliicli lie within their reach ; in the first place, let them imitate the mas- ters in saving when times are good, and secondly let them use their political influence towards the improvement of international relations, for it is to international disturbances that the most serious fluctuations are due. No operation on supply could have been effective in stopping the over-production consequent on the conclusion of the Franco-German war, but the high wages then obtained might have been saved to a greater extent, and if France had not been under personal government the war might never have occurred. My apology for apparently wandering sometimes from the "strictly economic" consideration of the subject lies in mj conviction of the truth of Mill's^ assertion, "that there are perhaps no practical questions, even amongst those which approach nearest to the character of purely economic ques- • Principles of Political Economy, Preface. PREFACE TO THE SECOND EDITWN. ix tions, whicli admit of being decided on economical premises alone." J. S. NICHOLSON. Tkinity College, Cambbidge, 11 June. 1878. PEEFACE TO THE SECOND EDITION. In its original form tliis Essay gained, in 1877, the first Cobden Prize given by the University of Cam- bridge. It was written when I was deeply impressed with the value of the historical method as exem- plified in England by Thorold Sogers and Clifi"e Leslie, and in Germany by Held, Knies, Koscher, Nasse, and Brentano. Now that death has removed so many of them, my obligation seems all the greater. I am glad that under their influence I was induced at the time to lay most stress on the historical aspects of the problem ; for in the detailed search for materials the social history of the era of X PREFACE TO THE SECOND EDITION. Machinery came upon me as an astonisliing revela- tioDj and I learned in a way that I can never forget the importance of verifying theories by an appeal to facts. In the present edition I have made no alteration in the main argument or in the structural arrange- ment, but wherever possible I have brought the facts quoted up to date and referred to recent authorities. The passages taken from foreign- writers have been translated^ various technical terms have been explained or abandoned^ and generally an attempt has been made to make the work more suitable for the general reader. For many of the alterations I am indebted to Dr. Keynes. J. S. NICHOLSON. The LTxivehsity or Edixburgh, ]0 Marcl. 18.92. CONTENTS. PAGE Introduction 1 CHAPTER I. — SuBSTiTi'Tiox OF Maciiixehy roR Labour . . 29 II. — Maciiixery as Auxiliary to Labour . . . h7 IIL^MACHixEHr AS Affecting the Division of Labour . . .... 77 lY. — M.ACHINERY as AfFECTING THE CONCENTRATION OF Labour and Capital . . . .93 T. — ^Iachinehy as Affecting the Mobility of Capital and Labour 104 SujniAEY of Kesults 12] INTRODUCTION. § 1. Scope and Method. In any economic inquiry two perfectly distinct methods are possible, and for making choice of one to the esclusion of the other some justiiication seems necessary. The differences between the two have been expressed in various forms, of which the correlative terms "inductive and deductive" and "positive and hypothetical" seem to mark the implied distinction most clearly. It is true that much has been written to prove on the one hand that the so-called deductive school do not take as premisses ^ " arbitrary figments of the mind formed without reference to concrete existences " ; and, on the other hand, it has been urged that so-called inductive writers are really as ' Cairnes, Log. Meth., ii. p. 48. 1 TJ INTROD UCTION. deductive as their opponents. Again^ tlie positive writers never profess to give all tlie causes of any social phenomena^ and hypothetical writers lay stress on the possibility of disturbing causes wHci may vitiate their results. But whatever may be gaid as to the logical identity of the two methods, it cannot be denied that the regulative ideas whicli i dominate them are essentially opposed : the one '\ lays most stress on facts^ the other on theory.^ ' Cf. On Method; Mill, Auguste Comte and Positivism,] pp. 82-86 ; Brentano, Englische Geicei'kvereine, 2te Theil, I pp. 311-314. j [I have allowed this section on Method to stand as! it was written in 1877, partly because it explains the plan adopted in tlie essay, and partly because the caution implied does not seem altogether uncalled for at presentj It is so easy and so fascinating, with sufficient hypothesesi and assumptions, to elaborate deductions, especially by tk use of mathematical symbolism, that we are apt to forget that the value of the superstructure will depend largely upon the reality of the foundations. The'doctrine of utility, for example, treated in this manner, has given rise to some INTROD UCTION. We may take as an example of the deductive metlaod Ricardo's cliapter on tlie Effects of Ma- cliinery on Wages; or^ still better^ a paper by Tozer published in the Caiiihrulge Ploilosopldcal Transactions (vol vi.). From their point of view machinery has or has not a good effect on the wages-receiving class according as the gross revenue ;is or is not increased. Now no doubt if their •assumptions be granted and distui'bing causes not taken into accountj the solution obtained is per- f ectly correct^ but it passes over many parts of the problem Avhich have the greatest practical impor- tance ; it leaves out of account those effects which . remarkable paradoxes. At the same time I have no desire to tmder-rate the advantages of the mathematical treat- ment of certain problems. The whole question of Method has been admirably treated by Mr. Keynes {Scope and Method of Political Economy), and to prevent misappre- hension I may say that I entirely agree with him on the uses of different methods for different inquiries.] INTRODUCTION. working men are actually discussing at the present time; it does nothing, to use Bacon's phrase, "for the relief of man's estate." With this method of course the question appears at first sight to be con- sidered in a far more scientific spirit. The conolu- sions arrived at apply to all times and places; subject to disturbing causes, it is true, but these are by implication subordinate. As Cairnes says, with practical considerations Political Economy of this sort has no more to do than Geology with coal mines. The inductive method narrows economic inquiries to certain definite times and places ; it looks for its problems in societies either actually existing or which have existed in the historic past, and it con- siders the legal, social, and intellectual conditions of those societies as important factors to be taken into account. For example, instead of assuming perfect freedom of competition and deducing there- INTRODUCTION. from certain results, it attempts to discover how far in any system of industry competition is free and to investigate the force of actual counteracting causes. The former method has given us the doctrine of the Wages Fund/ the latter Brentano's iJngliiih. Trade-Unions. Though fully conscious of the difficulties attending the so-called inductive method, I have ventured to adopt it in the hope that the results obtained, although meagre, may have some bearing on ques- tions which demand a practical solution. In the present condition of Economic History I have found it very often impossible to get in a compendious statement the diiferent classes of facts required, and in some cases I have been compelled simply to ' To the Wages-Fund theory and its applications may be traced most of the hostility of working men to political economy. It is proper to mention that the most powerful criticism on that theory has been from the deductive side, as by Professors Sidgwick and Marshah. INTRODUCTION. indicate positions wliicli demand fartlier investiga- tion. So far as I know, Chevalier [Gonrs d'Economie Politique) is the only writer who has treated tlie question in all its bearings at all adequately, and he writes in an optimist view which appears to me unwarranted. Under the convictioii however that in investigat- ing the effects of Machinery on Wages it would k more profitable to limit the inquiry to a particular time and country, I have only considered that period of economic history which is known as the era of Machinery, and for the most part only the effects produced in England. This period may be said to extend from the time of publication of the Wealtit- of \ Nations (1776) to the ijresent day. Before proceeding to details it is necessary to define what is to be understood by Wages and Machinery, and some discussion of the Wages ques- tion seems requisite partly in order to avoid endless INTRODUCTIOA': repetition^ and partly to indicate in what different ways Machinery may affect Wages. § 2. Wages. ^^ Wages" is usually defined as the reward for any personal exertion, at whatever time and in whatever fonn received by the labourer. According to this definition, the capitalist who undergoes any intellectual exertion in considering whether an investment will pay receives wages ; the "undertaker" (if we adopt Mill's literal ren- dering of "entrepreneur" and " Unternehmer ") receives wages for his exertions in planning work and supervision : clerks, clergymen and school- masters all receive wages, and finally the large class of domestic servants and still larger class of labourers hired by employers are also said to receive wages.^ That a term which includes so much has ^ In the General Eeport of the Census (1881) for England and Wales an analysis is given of tlie " unoccupied class." After deducting children and young persons under fifteen, INTRODUCTION. a meaning wbich. is practically useless in. Political Economy, and at any rate would be useless in this essay, seems evident as soon as stated; and in fact writers wlio have avowedly adopted the above definition have in practice taken a meaning nearer that in popular use. On such a definitiou the Wages-Fund theory, as held by Mill till near his death, could never have been formulated. It was persons over sixty-five years of age, who for the most part had been employed in work of some kind previously, and those between the ages of fifteen and twenty, who might te considered as training for work, there remained 4,641,190 between the ages of twenty and sixty-five without specified occtipation. But of these 4,458,908 were women, of whom by far the greater part were married and engaged in the management of domestic life, and thus the number of males in the working period of life (20-65) of the unoccupied class was reduced to 182,223. Thus, practicalljr, nearly the whole of the efficient male population of the country was engaged in some form of "labour," and in receipt of some form of " wages." INTRODUCTION. only by confining the term " wages " to the two classes last mentioned that the theory could have been enounced. At all events for the present purpose we cannot use ''wages" in the large sense indicated above ; there could only result endless confusion or most cumbrous phraseology. It would surely be misleading to say that general wages at the commencement of the present era were high becausBj though some of the labourers received hardly enough to live on^ others had for "wages of superintendence " several thousands a year. For the problem in hand it seems best to make avowedly with Prof. Walker^ in the most able work on the Wages question in our language, the restriction which Mill makes tacitly, and to define wages as " the reward of those who are employed in produc- tion with a view to the profit of their employers and are paid at stipulated rates." ^ Strictly con- ' Wages Question, p. 217. INTRODUCTION. struedj this definition would exclude domestic ser- vantSj but labour of tliis kind is only indirectly aiJected by macliinery. But if the wages-receiving class may be con- veniently restricted, it seems imiDossible in this inquiry to restrict the meaning of "wages" as equivalent to reward in a similar way. On tlie contrary, I think that the definition should be extended. That is to say, it seems necessary to investigate the eeal not the nominal wages of labour, and to say that wages consist of all tlie desirable things, using the word "thing" in its widest sense, which- accrue to the labourer in virtue of his position as such. Thus real wages may be said to rise,— althougli nominally in money they remain the same,— if com- modities become cheaper, if dwelling-houses are improved, or even if the habits and tastes of the labourers become more cultivated. At any rate, INTRODUCTION. all will allow that improvements in the sanitary conditions of working and still more any reduction in the hours of labour, although the muscular exertion is proportionately increased, really con- stitute a rise in wages. As Adam Smith rather naively remarks,^ " The greater part of the people understand better what is meant by a quantity of a particular commodity than by a cj^uantity of labour. The one is a plain palpable object, the other an abstract notion which although it can be made sufficiently intelligible is not altogether so natural and obvious." In determining the rate of wages it is obvious that we must have regard to the " quantifij of labour," and in any philosophic sense of the term it is clear that a greater quantity of labour is involved in working in an atmosphere stifled with dust and productive of " shoddy fever " than in raising an equal number of foot-pounds in the open. ' Wealth of Nations, p. 14 (MoCuUocli's edition). INTRODUCTION. Under quaulltij of labour there is included every, thing in the nature of pain, inconvenience, irk. someness, strain, etc., — in modern parlance all fclie disutility involved in earning the reward or cor- responding utility. We must especially remember, as Adam Smith says, that there may be more labour in an hour's hard work, than in two hours' easy business; and in general even with this allowance much more than the man's time must be considered. The importance of an adequate conception of a quantity of labour is seen witli reference to such problems as an eight hours' day. Having thus decided what is meant by "wages" in its broadest sense and who receive the wages, it seems desirable to state once for all the position that will be taken up in this essay on the question of the determination of money-wages. The question seems to fall under three heads : — INTRODUCTION. 13 I. Between what limits, if such can be determinedj must wages permanently remain ? II. How is the actual point normalhj determined? III. What are the principal causes of fluctuations in wages ? I. Firstj then^ what is the superior limit above which wages cannot permanently rise ? The answer is plain : this must depend primarily on the efficienoi/ of the labourer. " The produce of labour/' says Adam Smith, " constitutes the natural recompense or wages of labour"; but he goes on to say that this " original " state of things could not survive the accumulation of stock or capital and the appropriation of taxes. If we take the extreme case and suppose that all capitalists should become so philanthropic as to be content with wages of superintendence of no greater amount than that received by most of their employes, it is manifest that if more is constantly distributed than the 14 INTRODUCTION. industry brings in, tlie capital must gradually dwindle away. This lias frequently been the case ■with co-operative societies for production. But the efficiency of labour only determines the quantity of a commodity which will be produced; something else must be taken into account, viz. the money-value of this product. That money-wages are paid out of the price obtained for the commodity is gradually taking the rank of an axiomatic pro- position, the self-evidence of which seems to have been obscured for so long a time by two circum- stances. In the first place, ever since Adam Smith laid bare the fallacies of the Mercantile System, any statement of an economic law in a money form seems to have been considered ipso facto iallacions: it plainly bore the mark of the beast : if the law were really sound, it should have been stated in terms of cloth and linen: money could only have been introduced to gloss over an error or a difficulty. <<<<<<<<< INTRODUCTION. lu no other Avay does it seem possible to account for the manner in whichj as soon as the inestimable advantages of money as a measure of value in actual commerce have been descanted on, its im- portance as an explicator of ideas in print was overlooked and everything explained on a system of barter. It is only just to say that this stricture does not apply to Cournot, who always works out his problems in terms of money, which he forcibly compares to the "mean sun" of astronomers. But whatever be thought of this historical explanation^ it must be remarked, in the second place, that an important matter of fact has been overlooked or rather looked at in the wrong way : and this again has perhaps arisen from never speaking of the capitalist as having certain funds at his disposal, but a certain command of the necessaries of life. A manufacturer may or may not balance his books at the end of the year, but he certainly does not INTRODUCTION. sell his goods at tlie end of a year and then get paid: he is continually selling and being paid (or at least discounting his bills). The importance of continuity ^ in sale and production cannot be over- estimatedj though of course it is not assumed that it holds of all commodities, when agricultural produce and ironclads are glaring instances to the , contrary. To retvirn from this digression. The first position maintained is that money-wages are paid out of the money received for the product, and this amount after allowing for the up-keep of capital and other necessary expenses, is the superior limil above which money-wages cannot permanently rise; and that further the amount to be divided plainly depends on the amount produced, which ' Professor Marshal], in his Principles of Economics (see p. 9 note, and Preface p, xiv.), has qiioted and followed Cour- EOt's example both as regards "money " and " contimiity." INTRODUCTION. 17 is a function of the efficiency of labour. Ifc would be out of place here to discuss the question how the value of one commodity in reference to another is determined ; this so far as influenced by Machinery will be discussed later. The inferior limit below which wages cannot permanently fall; is in general given in Eicardo's formula of " necessary ivages." Labourers must have enough to live on, or they will not live them- selves : and enough to feed their children^ or their : children will not live. With regard to necessary wages, it is obvious that necessary admits of a variable interpreta- _tion, according to circumstances, as was long ago pointed out by Adam Smith in his well-known ; example of shoes — a necessary for English but not for Scottish women. "What is really intended is perhaps better conveyed by the phrase, " mini- mum standard of comfort," because we must also c iS INTRODUCTION. consider causes affecting tlie birtli-rate as well as those affecting the death-rate. The decline in the marriage-rate in recent j'cars points to a rise in the standard of comfort of the great mass of the people. We must also take into account the effect ot the loTver limit npon the higher^ that is to say of the standard of comfort upon the efficiency oJ labour, a point which has been very well treated and illustrated by Professor "Walker. A man, for example, might live for a long time on two shillings a week, and the consequent degradation might utterly destroy the efficiency of his labour, so that there would not really be more than two shillings to receive. II. Secondly, we must consider the causes wliicli determine what rate, between their extreme limits, will be fixed under normal conditions. (a) That comiietition both as between the la- INTRODUCTION. 19 bourers tliemselves and as between the capitalists has a considerable effect, is so evident that the effect was for a long period over-estimated. This competition must again depend partly on the num- Icrs of labourers and capitalists, partly on the mohilitij of labour and capital from place to place, and from occupation to occupation. (/3) The capitalist wishes to get as large pro- fits as possible : the labourer will not, if he can help it, let wages approach the lower limit. This diversity of interests, which in practice seems greater than it is — for as Mill long ago pointed out, high wages may mean cheap labour — this supposed diversity of interests leads to a struggle of some kind. The combatants may fight with or without certain legal or social restrictions. Taking " quan= tity of labour " in the sense given above, as equiva- lent to all the discomfort involved in working, we see that in England, even at the present day, law INTRODUCTION. and custom both influence wages. Not to mention the prominent cases of factory legislation, the laws regulating the treatment of sailors and the laws against truck, the slightest reflection shows that the laws relating to education and the Poor-laws have a considerable effect on wages. Again, custom aa distinguished from written law is by no means with- out influence. For instance, it makes a difference whether labourers bargain separately for their wages or combine together and make their agree- ments in masses.-^ The opponents of Trades-Unions, for example, say their tendency is to make wages unfair, to pay good and bad alike, that they are opposed to piecework, and make other allegations of the same sort, allowing that in these things at least they are to a certain extent successful. Thus it is > This topic has teen admirably handled since Thornton's Labour called attention to it. See especially Prof. Marshall's Principles of Economics, vol. i. INTRODUCTION. clear^ even on this view, that Trades-Unions have at any rate a considerable effect on wages in par- ticular trades^ whether they can or cannot raise them generally, for on the above showing they affect the way in which the " Wages-fund " is distributed. Probably, however, no economist of repute would now deny that Trades-Unions can to some extent raise general wages at the expense of profits. III. So far the Wages question has been re- garded solely as a statical problem ; it is necessary, thirdly, to glance at the causes of fluctuations in wages. It was noticed above that money-wages are limited by the price of the product less the other necessary expenses. Experience shows that wages vary with this price. We find that wages in a manu- facturing district rise and fall almost invariably with the rise and fall of the market for the manufactures produced by that labour. In many cases the fact is recognised by the adoption of a sliding scale. INTRODUCTION. Thus fluctuations in wages depend on all those complicated causes whicli give rise to tlie fluctua- tions in the price of a commodity. A change of fashion, a distant war, still more a war at our own doors, a change in the mode of production, a good harvest — these, and they are but examples, all influence wages. Thus we get as a general result that Wages depend on a vast complexity of causes wliich it is impossible to put under one grand law. Several attempts have been made in this direction, the most celebi-ated of which is the Wages-Fund theory, and the most curious von Thiinen's law of Hence it is evident that Machinery may influence Money- Wages in many ways : it may affect them by ' In this formula a stands for the necessaries of the labourer, and p for the total results of his labour. The natural rate of wages is supposed to be the geometrical mean between these two extremes. Dtr isolirte Staat, ii. 1, 154, ji ji ji ji ji INTRODUCTION. operating on the superior limit : it may give rise to different relations hetween masters and men : it maj- increase or diminisli tlie mohility of labour : ifc may or may not increase the continuity of employment. But there is still a preliminary difficulty to solve. What is Machinery ? § 3. Machinery. Here, as before in discussing the definition of Wages^ we shall find it the simplest plan to fix the meaning of the term by considering its denotation^ that is to say, the things which it includes. We could of course say broadly that by Machinery we mean any mechanical contrivance which is auxiliary to labour. But in this way we should include the simplest tools and contrivanceSj even those in use in prehistoric ages ; and this would be to discuss the question on abstract grounds, whilst it was distinctly stated at the outset that the aim of the present essay was to trace the effect of those aids and substitutes for labour characteristic 24 INTRODUCTION. of the present age, and to contrast the effects of comples Machinery and of simple tools. Still the distinction aimed at is not altogether the same as that indicated by BabLage ^ as existing between maldng and manufacturing : it is rather my intention to consider those characteristics of Machinery, using the word in its widest sense, that have in any way influenced Wages during the present era, leaving out of account or only introducing by way of contrast those appliances to which labour had before adapted itselfj those which had, so to speak, become per- manent in the industrial economy of the previous era.^ What then are these characteristics of Machinery ■ BabLage, ICcon. of Much, and Man., p. 100. 2 In the same way, in discussing Eicardo's theory of Eent we may consider improvements in land after a certain time as parts of the " original and indestructible powers of the soil." INTRODUCTION. 25 which are to be considered ? Manifestly for the present purpose it would be of little service to describe^ as Babbage does, the different kinds of machines and classify them. The only fruitful method seems to consist in considering in detail the different ways in which Machinery may affect wages as alluded to above. It is true that this mode of procedure involves a certain amount of repetitioUj but the advantages of looking at the subject from different points of view seem so great as to over- balance this inconvenience. When above I speak of confining the subject to the present era, I must not be understood to imply that, to use a mathe- matical term, I shall only consider the dynamics of the subject, i.e. the momentary effects of new inven- tions ; for I think it no less important to discuss the conditions under which our industry has come to be carried on, and which may for the present at least be considered stahle or rather statical. 26 INTRODUCTION. After making trial of various different methods of dividing the subject^ the following division has been adopted, the justification for ■which can only appear in the sequel. I shall accordingly proceed to treat Machinery as affecting Wages in the following Avays : — I. As a suhslitute for labour. II. As auxiliary to labour. III. As affecting the division of lahoiir. IV. As concentrating labour and capital. V. As affecting the mohilitij of labour and capital both from place to place and from occupation to occupation. I must request the reader to bear in mind that throughout this essay I use the term Wages in the large sense defined above, as inclading everything desirable obtained for the work done. I also use the term Quantity of Labour as a convenient expres- sion for all the discomforts, efforts, strain, or dis- INTRODUCTION. utility whicli the labourer is obliged to undergo to obtaiu tbis net reward. It is plain then that real Wages maybe said to rise either through an increase in the reward or by a diminution in the quantity of labour involved. "Very often, no doubt, the most important and always the most obvious element in Wages is the money receivedj and in quantity of labour the num- ber of hours' work done ; but in treating of a period which has witnessed such vast changes in production and organization, it is clear that many other factors are too important to be neglected. CHAPTER I. EfPECTS OF THE SUBSTITUTION OP MACHINEEY EOE LABOUR. In this cliapter I propose to investigate simply t immediate or closeli/ proximate effects of the substit tion of macliinery for labour. It has generally be acknowledged that as labourers are paid out of circ lating capital any increase of fixed at the expense circulating capital must pro tanto temporarily inju the labourers. It is indeed self-evident that if machine does what was before done by men^ t immediate effect, with which we are here alo concerned; is to throw those men out of employmei Chevalier puts very well this objection to the inti THE EFFECTS OF MACHINERY ON WAGES. daction of macliines : If by the aid of macHueiy you can do witli one workman tlie work tkat for- merly required ten^ you throw nine on the street. The usual answer. Chevalier's included, is to lay stress on the temporariiiesS; and to assure workmen that eventually machinery does increase the number of men employed. The validity of this answer must depend entirely on the meaning given to tLe word "■ temporary." It is a small consolation to a working man to be assured that in a year's time he will have plenty of work, if in the meantime he must remain breadless. Loss of work even for a few weeks may exhaust his credit and the affection and means of his friends, and there may remain nothing for him but starvation, unless poor-laws or private charity come to the rescue. Thus it is clear that " temporary " must be interpreted in reference to the general position of the labourer. If he has accumulated a little money, he may emigrate ; if Be SUBSTITUTION OF MACHINERY FOR LABOUR. 31 is intelligent^ he may discoYer there is work for him in another part of the country : but supposing he has neither fands nor friends, and has no knowledge worthy of the name except of a few square miles in his immediate neighbourhood, if he looks upon the workhouse in the light of a prison, and his narrow intellect sees nothing in the future but misery and starvation, then, to such an one the introduction of machinery is and must be an evil. In order there- fore to solve the problem for the immediate future of a change, it is worth while attempting to discover the law, if there be one, of the introduction of machinery on the one hand, and on the other what causes tend to increase the mohilitij of labour, under which expression all remedies for the immediate evil seem to fall. The importance attached to this aspect of the question has arisen from the supposition (which itself depends mainly on a misinterpretation of the 32 THE EFFECTS OF MACHINERY ON WAGES. events wliicli occurred at tlie commencement of this century) that a sudden introduction of machinery on a large scale miglit possibly happen. If how- ever it is found tliat in the literal sense of the words such a thing is almost impossibloj and that both the suddenness and the extensive adoption of improve- ments tend to diminish with the progress of society, results founded on the supposition are of little interest and no value, and we may turn to cha- racteristics of greater importance. I am quite aware of the truth which Jevons ^ allows in treating of the progress of invention from another point of view, that " the extension of the sciences and the arts is the last thing that can be subjected to rigorous laws." But I also hold with him that " in a long course of progress, like that which marks the rise of civili- zation in England, we may observe tendencies, not free from exception, of an instructive kind." The ' Jevons, Coal Question, p. 08. SUBSTITUTION OF M.ICHIXERY FOR LJBOUR. 33 law or tendency ^Yllic•ll, as I read it^ History reveals, is-» I. That a radical change made in the methods of invention ^vill be (jradaaJhj and continuousli/ ail'jilcd ; and II. That these radical changes, these discontinu- ous leaps, tend to give place to advances by small inerementi of inventlun. I. Suppose in the first place that a radical change is introduced by some ingenious producer into a certain manufacture, which will lead to the employ- ment of less labour. That this invention will bo adopted in process of time by all other manufac- turers is evident, bat I maintain that in comparison with the mobility of labour the change will be slow. ' For ot'.i3i: exanip'e.5 of tlis principls of continuity, see Cournot's Berue Sommalro, e.g., p. 177, where he quotas " Natxu-a non faoib saltum," vrhich Prof. Marshall has taken for the motto to his rnnclples (q.v. passim). 34 THE EFFECTS OF JJAC/JIXERY ON WAGES. We Lave an instance of radical change in tlie steam- engine. Watt's patent for a "method of lessening the consumption of steam and fuel in fire engines" was published Jan. 5th, 1769, and it may he said that the movement of substituting steam as a motive power is not yet over. Every day we hear of steam being extended to some new employment, and to some out-of-the-way district. The history of the power-loom again shows that the adoption of an invention is comparatively slow. In 1813 there were not more than 2,400 power-looms at work. In 1820 they were increased to 14,150. In 1853 they were 100,000. But the important thing to notice is that in this time the number of hand-looms had increased rather than diminished.^ A striking instance occurred as I was writing this essay (1877). "The introduction of machinery into the watch manufactory of Switzer- ' Porter, Progress of /he Xatioiu p. 18G. SUBSTITUTION OF MACHINERY FOR LABOUR. 35 land must, it is feared, have a disastrous effect on those engaged in tliat industiy. In the cantons of Neufchatel, Geneva, and Berne there are, it is estimated, about 40,000 men and women engaged in watchmaking, and the division of labour has been applied to such an extent that 120 persons are required to produce a complete watch. Each person makes in one year about 40 watches, or one in nine days. Considering the fact that an American factory hand turns out 190 machine-made watches per year, and that 1,000 workmen can make 366 watches per day, it is evident that changes must occur in the Swiss watch trade. If the Swiss employers introduce machinery and the demand for their watches remains as it is, they could afford employment to only 8,400 persons instead of 40,000 as at present. Should they continue to employ hand labour there will be a rapid decline in their trade. It cannot however be reasonably supposed that 36 THE EFFECTS OF MACHINERY ON WAGES. the effects icill he ao nJutrp and dcddeJ. A\"atc]i- making macUiiicry is costly, etc." ^ Tliere was I Lelieve at this time only one large manufactory for Avatches by machinery in England : and it was clear that the adoption of machinery must be gradual.' The more enterprising the capitalist the sooner he will make any change, but the cliange will not iu reference to labour bo sudden. In the instances quoted above, the workmen so to speak receive timely warning, and could prepare against the evil. However highly organized a society becomes, changes of a radical kind are met witli a good deal of resistance. There is the expense involved, there are the vested interests to overcome^ there are the customs and prejudices of customers, and above all there is the intelligence required in the capitalist. ' Capital and Labour, vol. iv. p. 77. - Prof. Marshall {Princtple/s, 2nd edit., p. .SIG) writjs tliat this Swiss industry is now (1591) yielding ground to the American system. SUBSTITUTIO.V OF MACHINERY FOR LABOUl That tlie cLauo-e must come there cau be no cl but that it will come comparatively slowly and the workmen time to get other employment less true. The change will at first be adopte some enterprising capitalist in the centre of a li competitive region^ and will gradually extend t manufactories of less competent masters in remote districts. II. But secondly the law as stated asserts inventions tend to become more contiiiuou advance by "little increments/' not by For iustancCj even in the infancy of power weaving, where we might have expected g rapidity, we bave only gradual improvements, is clearly shown by Porter.' ''A very good weaver 25 or 30 years of age will weave two ; of shirting [of specified quality and dimensions week. In 1823 a steam-loom weaver about 15 ' Porter, Froiji-ass of tha Xaliua, p. Iy3. 3S THE EFFECTS OF MACHINERY ON JVAGES. of age attending 2 looms could weave 9 similar pieces in a week. In 182G a steam-loom weaver about 1-j attending to 4 looms could weave 12 similar pieces in a weekj some 15. In 18oo a steam-loom weaver from 15 to 20^ assisted by a gii-1 of 12^ at- tending to 4 looms could weave 18 pieces." Cer- tainly in one way the changes here noticed are rapid^ but changes can with regard to labour only be called sudden with reference to the mobility of labour. The progressive character of invention might be illustrated ad injinitum. As Porter remarks/ "It would fill many large volumes to describe the numerous inventions which dnriug the present century have imparted facility to our manufacturing processes^ and given perfection to the articles made." There is however one striking proof of the gradual development of improvements. Notwith- standing the chaotic condition of our Patent Laws ' IbiiL, p. 2i;g. SUBSTITUTION Of MACHINERY FOR LAB 01 and the expense connected witli tlieni, no less 5j000 patents are annually registered in Bnglai Examination sliows tliat nearly all are discoveries. A friend informs me tliat in uiauufactnres in this country', improvement made which it is considered not worth wh patent^ but for which the discoverer is amp warded by the manufacturer. An article i /SVit'it/Z/zc .liiierican ' traces the progress of Am invention with similar results. Thus " out of patents issued in the year 1857, 152 wei improved cotton gins and presses, 164 for im ments in the steam engine, and 198 for devices relating to railroads and improveme rolling stock." UesuUs of ilie Law of Coultnnitij. This i progressive nature of invention operates in of the labourer in two ways. In the firsl pi ^ Quoted in Capital and Labour, May 9, 1877. 40 THE EFFECTS OF MACHIXERV ON WAGES. all probability the market by the increased cheap- ness of the commodity conseqaent on the use of machinery ivill he exlended pari 2^'^'-^^^'' with the improvements, and thus the workers will not be thrown out of employment even temjoorarily. And in the second place, supposing there is no extension of the market, the labourers may be absorbed in other employments, or emigrate when the change is not very sudden and extensive. In this they are favoured by everything which tends to promote the mohiUtii of labour, and apart from the increase with civilization of the education of the working classes attention will be drawn to the fact in the sequel that machinery has above everything in- creased this mobilit}'. So far the question relating to the introduction of machinery has been discussed entirely from the orthodox standpoint : the working class has been spoken of as composed of similar units, and Ave have SUBSTITUTION OF MACHINERY FOR LABi considered simply tlie effect of substitufci chinery as " aiomentarily " tlirowiog them employment. lu tlie short investigation, hovveverj whicl] necessary to make concerning wages it we that the determination of wages (between limits) depends partly on the rchtiionsexiding ■masters and men, and we have now to c whether the introduction of machinery maL alteration iu these relations, and further w to examine the effects of machinery in chang diarader of the laliour i-equtreJ. We must consider the labouring class no as consisting of a definite number of simila but of an iudefinite number of sub-classe more or less conflicting interests.' It is at a; ' Iu ISSl the Ceiisu-; authorities found it ncce; make a new dictionary of the 'name'j of occnpatio General Eeport, p. 2'1. 42 The Eri-ECTS of machinery on wages. quite clear that the mere conversion of circulating into fixed capital is only one element^ probably a minor element, in the problem as it "n'as worked out at the commencement of this era. Tlie history of all our textile manufactures shows that the improvements in machinery, by cheapening production and thus extending the market, gave employment to an ever-increaslug numher of hands, and yet with the apparent prosperity, the condition of the working classes got worse and worse. Take for example the cotton iudustrj^ : it was shown by Babbagei that between 1822 and 1832 the total number of workmen increased about one-third, while the amount of manufactured goods was, owing to improvements in machinery, three times as great as before. But he goes on to say, "iu considering this increase of employment it must be admitted that the 2,000 persons thrown out of work are not ' Quoted hi Profj. Xaf., p. ]0H. SUBSTITUTION OF MACIilKERY TOR LAlSO exactly of the same class as tliose callec emplo}'meut by tlie power-loom. A liauJ-\ must possess bodily strength which is not es for a person attending a power-loom : conseq women and young persons of both sexes from 17 years of age find employment in powe factories." He concludes by saying that " the whole of this period the wages and empk of hand-looin weavers have been very preca The same result is arrived at by Brentano detailed examination of all the chief indust the country after they were disorganized by troduction of machinery. It was not becausf hands were employedj bu.t that apprentice; employed instead of journeymen^ and worn girls instead of men. Skllli' I lahoiir of a order became iv_(//( .'/'•.•-■■.■, and if machinery calh being skill of a different kind, that skill was )/ ' Brentano, Gilds and Trader: Unions, part v. (Eng 44 THE EFFECTS OF MACHINERY ON WAGES. and emhocHeJ in the same laliourers as hcfure. This destruction of tlie labourer's ouly capital is one of the most pernicious effects of machinery, and when it happens thei-e is and can be no remedj'. Still if the changes are gradual the evil consequences are not so great, so that hero again we see the iaiport- ance of tlie Law of Contiuuit}'. A radical change in the production of wealth involved a no less radical change in its tUstrihu- tlon, and the latter was no less injurious to the working classes tlian the former. First of all the Statute of Apprentices fell into disuse. Under this statute, according to Brentano, "the position of the workmen was secure. The long term of service assured them the regularity of employment which they desired above everything. The magistrates were, according to the directions of the Act, to assess the wages so as to yield unto the hired person, both in the time of scarcity and in the SUBSTITUTION OF MACHINERY FOR LABOl time of pk'ntvj a conveuicDt proportiou of v The reslrictioiis as to appveutices preveutoJ great competition from loweriug the skilled men to the level of common labourers."^ introduction of the factory system, which necessarily involved in the employment of chinery, destroyed all these restrictions on intei'est. Laisse/:-fairc ruled supreme. Th laws inevitably repealed were not replaced by and combinations on the part of the wor by which alone they could cope with the mi were expressly forbidden. Again, the condlflons under ivJiich the lal ivorlced rendered that work far more exhai They worked in an atmosphere poisoned ' Brentano, Gild.-<, etc. (Eng. eel.), 104. Thoroki {Six Centuries of Worlc and Wages, p. 353) severe damns tliis statute. It is certain, however, tl: labourers petitioned against its repeal. 46 THE EI'IECTS OE MACHINERY ON WAGES. clustj worked for such long hours that it seemi marvellous their race was perpetuated. Wage: fell only more and more with the degradation o: labour, while the "quantity of labour" — the miserj of toil — rose. Children began to work in factorie; at five 3'ears of age, and worked the same hour; as adults. " They look up with tlieir pale fmd sunken faces, And their looks are sad to see ; For the man's hoary anguish draws and presses Down the cheeks of infanov. For all the day, the wheels arc droning, turning, The wind conies in onr faces, Till our hearts turn, our heads with pulsas burning, And the walls turn in their places. Turns the sk^- in the high window blank and reeling Turns the long light that drops adown the wall. Turn the black flies tliat crawl along the ceiling, All are turning, all the day, and we with all. SUBSTITUT'lON OF MACHIXERY FOR LABO And all day the iron -svlieels are droning, And sometimes we could pray, ' 5-e -wheels ' (breaking out in a mad moaninj ' Stop ! be silent for to-day.' '' England's apparent prosperity was lik luxurious vegetation wliioli rises from the poi swamps of the Tropics : at a distance, to the observer, her trade throve and prosperet below it rested on the absolute misery of sands of her inhabitants. It ics not requisit to re-write this saddening page of our hist( recite once more in detail " the crimes com in thy name, Liberty ! " They stand re in Parliamentary reports ; they provoked the and indignation of Byron, and moved by England's greatest poetess wrote her lyric. How this state of things Avas gradually rei may be read in the pages of Ludlow and 4^ THE EFFECTS OF MACHLXERY ON WAGES. Jones : how macliinery, like a tamed wild beast was made to contribute to this good work has been well told by Edler von Plener {Historij Oj Fadurtj Lpgialutioii). For it is a cui-Ious fact thai in ameliorating the condition of the labourers machinery played an important part. It was onlj by the introduction of machinery that manufac- turers were enabled to carry out the provisions of the Factory Laws without lessening the num bers or reward of the labonrers. Thus machinery was, through legislation^ divcdhj heneficidl to tin labourer. It has been too often assumed, under the in fluence in some shape or another of the theory o " necessary Avages," that the capitalist and th "consumer" are the only persons who can b benefited by improvements in production, that th capitalist who first introduces machinery will a first get larger profits, but that competition wi SUSSTlTUTIOi^ OF ArACI/INERY FOJ^ LABOUA finally transfer the benefit to tlie " consumer," if the labourer is to be benefited at all machinery it is in his capacity of "" consur The fallacy of looking at the question ent from the consumption point of view is well pressed by Mr. Thompson,^ one of the Nat Economists of America. " He (the consume: an innocent ens logicun manufactured by the process of abstraction by which the ocouoi derived their economic man, ' a covetous mac impelled to action onlj^ by avarice, and the d for progress.' That is, they cut away or away (abstracted) the better half of the real b and persisted in treating the remaining human : ment, if we can call it human, as a living rea' This language is perhaps rather too rough vigorous, but the writer may be excused i: consider the simple fact that the great maj ' Social Science and National Economy, p. 269 So THE EFFECTS OF MACHINERY ON WAGES. of our populatiou are labourers in the strict sense of tlie term, and are engaged in i^rodud on the average ten hours every day of the ye Surely it is clear that under these circumstaui an improvement in the conditions of the laboure ■work may be of far greater importance than increase in the reward he receives. Cheap cal and plenty of it is a good thing, but moderi liours of labour, a healthy atmosphere, freedom a education for children, are infinitely more i portant. Wages may rise as already explain either by reduction of the quantity of labour or an increase in the reward. And in the case I i now considering tlie former element was operat on by the introduction of machinery. Mill himself has indeed alleged that laboi saving inventions have not lightened the toil any human being : they have only enabled greater number to live the same life of drudge ''ION OP MACHlNEkY FOR LABOUR. 51 ment. Yet what is more natural tban lat otlier things remaining m slala quo 3 in production might be turned to aent of the condition of the labourer ? Now not only is this supposition jle in theorj', but it has actually fact. When factory legislation was ed, the manufacturers offered a most istance : they extolled the advantages letition; they apjDealed to "the funda- 1 of political economy " ; they made aternal government ; they insisted on ' a man to be free ; they said such vas an indignity put on the human Dth masters and men : all these things as reasons for their opposition^, but that IS really founded on another economic his factoiy legislation "appeared to m with a serious Ioes^ both through a p THE EFFECTS OP MACHIXERV ON IVAOES. dLmioution iu tlie number of goods mauufact and an increase of expenditure." ^ That class legislation may be carried too that paternal government is at best the lesst two evils, that self-reliance is an inestimable b ing worth some sacrifice to attain, are proposi in political philosophy too obvious to be dispti nay more, I would say, they require to be spec emphasized at the present a.&yr But by ample time had been given to Laissez-fair develop freedom and self-reliance, and what been the result ? The feelings between the lal ing and employing classes had become more more embittered, and the old reliance on LaAV been replaced in the workmen by the new reli on Trades-Unions. ' von Plencr, \). 9G. ' More so now than in 1877, to wliicli the ''present originally referred. ■ION OF MACHINERY FOR LABOUR. 53 iuoh. vast evils as wore alluded to s-Unions were as unable to cope as petition. Hence in the determination .able natural wage " in the sense in 3S '^ has been used throughout this (071 was ahsohitdy necessary. legislation improved the condition of mcerned is recorded in von Plener's ady referred to, a work which but for f the subject-matter might be called iteresting, so little is the historian ught but facts. "When," he says, had learned to bow before unavoid- j, they endeavoui'ed to regain in the e law what they were in danger of ;s being acted upon. In order to the shorter working day the same ;-oods as hitherto, the system of work- ' von Plene". Ih'sf. Fact. Leg. 5+ THE EFFECTS OF AL-ICIIJA'EKY ON WAGES. ing had to be made more productiA^o of gre results. This could be done in two ways : firsi an increased amount of work done by the op torSj and next by the introdudiun of better faster macJiinery." Again he writes (p. 98), " reduction of the working day could only be balai by an increase of productiveness tlirourjli the eJiinenj, and though the astonishing progress machinery in the first half of the present cen . . . was to a great extent caused by the ger condition of production, it is an indisputable that it was factory legislation which gave direct impuls3 to the introduction of the t saving machines." Thus once at least in our history the inti'o tion of labour-saving machinery directly s. the labour of the labourer and thus raised real wages. ^ It ii true that commodities did ' It is verj' remarkable that in the evidence of 'TION OF MACHINERY FOR LABOUR. 55 3lieap as they miglit otherwise have must be remembered that the greatest oousLimers are taken from the labour- that in this instance the " cousmner " s capacity of producer. Brentano has noticed that when im- are made in machinerj^^ the Unions try ie advantages^ and in certain conditions ustifiable. -il Prohlem. So far I have considered te consequences of the introduction of r more properly of the transition from tors before the Labour Commission now (1892) tated that tlie labourers themselves do all in warn the masters when the inspectors are conceal any infiiugemeut of the Factory itever cause this hostile attitude of thosa is to be attributed, it emiihasizes the need nspsction, especially iu the interests of 56 THE EFFECTS OF MACHINERY ON WAGES. one mode of production to the other. But if suppose the industrial organization of societ; have become stable, we may still examine effects of machinery as one of the most impoi factors. It is accordingly necessary to exar the question as one of economic statics, and of the effects of machinery as auxiliary to lab CHAPTER II. MACHIXEEY AS AUXILIARY TO LABO0E. 'UL distinction was drawn by Ricbard Jones ^ as since been generally adopted between iry and sustaining capital^ and a similar dis- n may be made between tbe labour- savinj uxiliary characters of machinery. Not only ;he actual introduction of machinery as a ;ute for labour affect wages at the moment, le fact that man's labour is increased in icy by mechanical aids has important bear- in the reward of that labour. I first of allj we may just glance at the tre- ;. Hem. (edit, Whewell), p. G3, Cf. Bageliot, rontii- T, 67 SS THE EFFECTS OF MACHINERY ON WAGES. mendoiis increase in tlie eflficiency of laboui* w arises from the use of macliinery. Chevalier ^ made some interesting investigations on the ductive powers of this century, compared those of an earlier period. His results are course very rough, and still greater changes 1 been made since the work was written (IS but they present the matter in a startling i For instance, he deduces that one workman forms at the present time (1840), in spinning cot an amount of work equivalent to that of 320 i before 1 769. In a note '- appended to the edition (185")), he says that, owing to subseqi improvements, the ratio should be expressed 700. Striking as Chevalier's results are, howei they pale before those obtained by Dr. Er (quoted in Economist, ]\larch 10, 1877). '" ' Cf. Hearn, riiitolofjij, 170. Babbage, Kcon. Man. G ChevJvlier, C'ours cVEcon. Polit., i. )i. 819, \rACHmERV AS AUXILIARY TO LABOUR. 59 >'ate steam power ia use iu the world is at ifc oi millions liorse power employed iu lary engines^ and 10 millions liorse power in Dtive engines. This force is maintained witli- le consumption of animal food^ except by tlie 3 wlio dig the coal, and the force maintained ;ir muscles is to the force generated by the ct of their labour as 1 to l^OOO. This steam is equal to the working force of 20 millions rses^ and a horso consumes three times as food as one man. The steam power is there- squivalent to the saving of food for 75 millions iman beings. Farther, three power-looms [ed by one man pi'oduce 78 pieces of cotton , against 4 pieces produced by one hand- worked by one man in the year 1800. A iter's planing machine does the work of 20 A McCormick's corn reaper doubled the produce in the United States by enabling 6o THE EFFECTS OF MACIIINEKY O.V IJ'JCE.b. the available labour to harvest the exteu crops." 1 I. The most obvious result of this wonderful crease in the expenditure of human toil in ] ducing commodities^ is that these commodities in price. This fall means^ cderis fiarlhuit, a in icages, i.e. real wages. Even supposing labourers, by excessive multiplication of numl and competition, reduced their wages to anji'tl approximating to the "necessary wages" Eicardo, they would still gain by the inci-ef cheapness of commodities ; for any economy necessaries, — and some economy is alwaj's possi — gives an increased command over luxuries. [ result is so obvious in itself, and has been develc to such an extent by all the ojitimist writers machinery, that it seems unnecessary to dwell it further. Definite tables of the relative v.n ' See Dr. Engel's later work, Daf: ZcitaUer ilos Dam for a iiia=;p of interesting facts, )lACniXEKy AS AUXILIARY TO lABOVl\ 6l •n and manufactures at different periods liave obtained by Tliorold Rogers and Young 'ir in Europe and America) ; and tliat tlie ng classes caUj if they clioose, buy these es, is shown by the amount of alcoholic s annually consumed by them. Increase of productive power necessarily in- '., human nature remaining the same, increased ulation of capital, and as Adam Smith ^ ob- 1, "It is not the actual greatness of national 1, but its continual increase, wliich occasions I in the wages of labour. It is not accord- in the I'ichest countries, bat in the most ig, and in those which are growing rich the ;, that the wages of labour are highest." acrease of wealth iu England, for instance, s century, has been enormous : and, unless dustrial conditions attendant on the present of production have given more power to ' Page 31 (McCuUooh edit.). 62 THE JEFISCTS OF MACHINERY ON K'AGES. the employer than the employed iu the que; of distribution, it is evident that the Avage ceiving' class must have benefited. lliat have done so, is shown partly by their sav (iu Savings Banks, etc.), partly by their consi tion of luxuries. Here again it seems unneceE to go further into detail, for the proposition n tained is simply that part of the Wages- theory which has never been contradicted — raore circulating capital there is engaged trade, the higher, ceteris puribiis, will wages III. So far nothing but good seems to r from the use of the auxiliaiy machinery, but se evils have been pointed out as inherent in large system of production, and these musi carefully considered. The power of machinei from one point of view too great and contiur machines breathing fire and smoke, those s of iron and steel, as Cournot calls them cai MACHINEkY AS AUXILIARY TO LABOUR. 63 flit and day at high pressure. Hence results mdency of machinery to add enormously to ill of the labourers by iacreasing the day's ' both in lenglli and intensity. Trades-Unions object to piecework because^ to use a rowing i, the best men set too fast a stroke for the rt of the average workman, but the strength e strongest is as water compared with the 'th of machinery. This objectiou to machines 5en forcibly stated by Chevalier ' : " Machinery es on man a crushing task. Feeble appendage mighty force, a tiny engine bound to an engine mense power, the workman must bow to its tioDS, give way to the rapidity of its move- , follow it in its incessant pace — iu a word, jst tui'u, twist, and toil just as much as the ag machinery pleases." Experience shows the objection thus stated should not be dis' ' fours iVEcon. I'ulit,. u oGii. 64 THE EFFECTS OF MACIimERY ON WAGE: missedj as Clievalier contemptuously dots, the commeut that it is pui-e rhetoric' Th lowing facts from Robert Owen ^ may be add those given above under " Substitution/' o excessive hours of labour produced by tlie u machinery : " As a rule we find children c j-ears old worked regularly 14 hours a day, but half an hour's interval for the midday Avliich was eaten at the factory. ... In cases mills were run 15, and in exceptional i IG hours a day witli a single set of hands, the owners do not scruple to employ childn both sexes from the age of eight." It ii necessary to repeat what was said above oi necessity of factory legislation; fortunately seem to have approached the limit of Govern interference, and amongst the masters a 1: ' See note at the end of the chapter. Ap. Young, Labour Eur. and Am., p. 180, note. ■£/!Y AS AUXILIARY TO LABOUR. 65 Dg has grown up in relation to tlieii' mother danger of an entirely opposite n this immense power of machinery, tinually showing its reality, and reme- ch will; it is to be feared, be the years of tentative adaptation to the aent.i What all sensible working men the advocates of the Trades-Unions chief object, is to get a " steady suffi- )ut it has been proved inductively that tions in price occur in those commodi- ) principal point in the essay which I have I and which I am inclined to modify still ig from the Labour Eeturns compiled by ir the Board of Trade, the average of un- ng the year of representative Trades-Unions [y from 3 to 4 per cent., and to a considerable accounted for by strikes. The reports of I wages in many industries seem also exag- 66 THE EFFECTS OF MACHINERY ON WAG. ties which require for their production i proportion of fixed capita]. These fluctuat prices are accompanied by corresponding : tions in wages and irregularity of emplc But fluctuations in wages and discontinui employment are two of the greatest evils can befall the labouring classes. To sho the dangers here alluded to are not fane will be necessary to examine briefly the the orer-production. In a celebrated chapter of Mill's Frinci^lt maintained that a general excess of supply, ether words, general over-production, is impc Mill allows that there may be over-supply gerated. I have treated the general question in as paper. (See Economic Journal for June, 1892) C( however, Prof. Foxwell's Essay on Irregidarity of E ment and Fluctuations in Prices. ' Bk. iii. ch. xiv. -IHINERY AS AUXILIARY TO LABOUR. 67 ny one commodity whatever, with the con- that the producer or the dealer may suffer inconvenience J but he denies that there a similar over-supply of all commodities, ment is an interesting piece of deductive \, and also a good example of the merits ots of that method. Briefly stated, it is as Demand depends upon two elements — the I possess, and the means of purchase. If 1 there is an excess of supply over demand, be owing to a deficiency in one or both factors. Suppose first that there is no defi- a desire, then, says Mill, there can be no y in the means of payment, because com- pay for commodities. Buying and selling, and supply, are • in the last resort recip- their action. The more commodities there 3II, so much the more are there also to pay • all exchange is ultimately barter. Thus 68 THE EFFECTS OF MACHINERY ON WAG. there can be no difficulty, tlirough general of supply, in the means of payment. Next c the other element in demand, namely, the to possess. Here Mill is obliged to admit is abstractedly conceivable that more mi produced than people would desire to c( but then he maintains that the mere fa people go on producing shoAvs that they " exchange their produce, that is to say, th wish to demand other commodities. Now, there is no doubt a basis of truth general argument that is too often ove; Commodities in the end pay for commodit: producers are also consumers. The grea annual production or supply so much grea be the annual consumption or demand. At the same time, however, to men o: this denial of the possibility of general o duction can never appear other than para Machinery as auxiliary to labour. 69 a the language of theoretical economists the 'hing causes are of greater importance than •iginal hypothesis. d it must be observed that Mill lays stress le importance of his conclusions practically, point is fundamental," he writes ; " any 3nce of opinion on it involves radically different ptions of political economy^ esj^ecially in the cal aspects." Here^ it seems to me, we hare if the most striking examples of the dangers e deductive method. Mill thought he had into account all the elements of the question, n the face of facts, and in spite of verifica- spoke of the opposite doctrine of Sismondi, Lus, and Chalmers, as self-contradictory, and il misconception. And yet the element over- 1 is so obvious, that Chevalier, who is, how- not fully aware of its importance, does not it requisite to go to the trouble of proof. 76 THE EFFECTS OE MACHINERY ON JVA( " Industry on a large scale was born ye and like all social forces in process of deve is badly organized." If capital and labour f perfect mobility, if tbey could be transfei mediately from one employment where t' not wanted to another where they are, il commodities manufactured could find ] organized markets where they could be ex at once, and if no other " disturbing " caui fered, then Mill's doctrine might be not ( hypothetically but be of great value in its tical aspects." It is curious to note that Mill him attempting to explain how such an " irr doctrine (viz. that of general over-productic have been supported, makes the remarkabl siou that in times of commercial crisis there an excess of all commodities above the demand. But he forgets that demand MACHINERY AS AUXILIARY TO LABOUR. d at a price, and tBat the Oflly effective id is the money-demand, tainly tlie question of over-production is one i most important in Economics, and owes its , as Sismondi pointed out, to tlie introduction icliinery. Take, for example, the condition lustry in 1876. The restricted confidence, the )us application of reduction and economies, led wages, and failures of numberless com- al and manufacturing concerns, -were mainly according to the Commercial Review of that in the Economist,^ to the over-production I ensued after the Franco-German war. Xo ; this over-production began in the coal and trades, but it did not end there; industry is 30 sensitive that what affects one branch ipso affects all the rest. I do not think that some people call "gluts" are due entirely ' Issue of March 10, 1877. 72 THE EFFECTS OF MACHINERY ON WAG. to the existence of machinery, or are even w in its use; credit, free trade, and politica ences are important factors, but still it is i ably true that but for the tremendous pov machinery, a great depression of trade woi be so long or severe. Machinery operates ways. In the jiid place, " when supply is ov by the demand, prices fly up out of all pre to the deficiency," ^ and as a consequence ma is put to its greatest productive use, so t] capitalist may make hay while the sun Wages rise, and if it is an important bra industry such as coal or iron, the number employed makes an appreciable difference demand for other commodities. The demai not be very greatly in excess of the demand ; that makes no difference, prices ' Ration. Mark. Fliicfiis., p. 12. CHINERY AS AUXILIARY TO LABOUR. 73 the same, and masters will strain every t realize fclie consequent high profits. But pply is found to have more than satisfied and, there is a tendency to depress prices disproportionately. Wages are reduced; a depression ensues, and then the second ' machinery appears. The capitalist cannot ) let his machines stand idle, for then he only lose his "' minimum of profits " but ihinery itself will deteriorate, and when revulsion occurs he will not be able to c his old hands. Thus the continuity of 'Alt caused by machinery is not altogether itageous as has been supposed : ouly part abourers are employed at reduced wages, .' employment onlj prolongs the depression. ',5 not seem necessai-y to discuss further lis division of the subject the fluctuations ariousness of wages to which machinery has 74 THE EFFECTS OF MACHINERY ON IVAGl given rise : the question will be farther dis from the point of view of the distribution of tries. ^ ' The following from the Cotton Factory Times ill very forcibly the influence of machinery in setting to pace : — " We have frequently heard spinners in cott talk about being worked up, and made such th; could neither enjoy food nor rest, and their livei burden to them, and after leaving the mills at nig can be seen wending their way to places where t quench their thirst, and liquids take precedence o'v which the appetite does not call for when the system is overworked and overheated, and the mind disturbed by the difficulties and hardships which s the workmen in their employments. It is quite a occurrence to hear young men who are on the I of thirty years of age declare they are so worked tbe long mules, coarse counts, quick speeds, and material that they are fit for nothing at night on! to bed and taking as much rest as circumstan^ permit. There are few people who will credit sue ments, nevertheless they are true, and can be any day in the great majority of the mills in the i 'ACHINERY AS AUXILIARY TO LABOUR. 7? . The system of competition which prevails be- nanagers in the diflerent mills as to which can ■ the greatest number of hanks per spindle for the unts of yarn, has led up to the practice of driving, I men and their piecers are compelled to keep up le never-tiring machinery, or fall behind in the ir of work required from the mules, and they know lat means ; hence, to avoid the exposure and threat usually follows a reduced production of hanks, the and his piecers are induced to work past their 1, and it is in this manner they are thoroughly p when they leave their work in the evenings. is some truth in the statement about young men vorked up, as it was stated the other week at a ; of the Oldham Board of Guardians that there ; sufficient accommodation for the rapidly increasing ' of inmates, caused through workmen being worked heir system when at the age of forty to fifty years, ose who had not been able to save money found i^ay to the workhouse. Such information, coming uardians of the poor, confirms the statement that men are now worked up much earlier than for- and from what we can observe the evil is likely ease rather than decrease, as the industrial strife 1 nations is stire to become keener as time rolli 76 THE EPFkCTS OF MACHINERY ON WAG onwards. Therefore it behoves workmen gene make the best iise of their opportunities while ir tion for doing so, to provide against the evil c not squander their earnings in a foolish manner." Factory Times, 5th Feb., 1892. CHAPTER III. NEEY AS AFPECTING THE DITISIOX OF LABOTTE. the most obvious results of the emplovmem hinery is the ever-increasing subdivision of but the consequences of this subdivision as 1 wages are not so self-evident. It will be inveuient to consider this part of the subject iwo heads : (i.) in relation to the qaantUt/ of involved in a day's work under the new as compared with the old; (ii.) in relation reward obtained^ quantity of labour bein;/ ed constant. Ivision of labour as affecHvg quantity of lalour. the full explanation of this phrase see pp. 11, 12. jj. 7S THE EFFECTS OF MACHINERY ON fFAC Some economic writers have supposed that of labour naturally degrades the labourer, for instance^, writes : " The advantages of of Labour, one must admit, are subject serious drawback. Few things tend so efi to dwarf the mind and stunt the faculties incessant and long-continued repetition of simple task — a mechanical movement whicl peated with as little effort of thought as if perfoi'med by a machine." The same object been crystallized in a Diot of Lemontez : '' sad account for a man to give of himself has spent his life in opening a valve oi made anything but the eighteenth pari pin." Mr. Euskin has expressed the same i greater length. "We have much studied an perfected of late the great civilized inventior ' A7nerican Pol. Econ., p. 51. BFECTING THE DIVISION OF LABOUR. 79 of labour; only we give it a false name, truly speaking, tlie labour that is divided, lien :— divided into mere segments of men, into small fragments and crumbs of life; 11 the little piece of intelligence that is left n is not enougb to make a pin or a nail, austs itself in making tbe point of a pin, lead of a nail. Now it is a good and desir- ing truly to make many pins in a day ; but iould only see with wbat crystal sand their vere polished — sand of human soul much to :nified before it can be discerned for what ,ve should think there might be some loss [so. And the great cry that rises from all -nufacturing cities, louder than their furnace 3 all in very deed for this, — that we manu- I everything there except men ; we blanch and strengthen steel, and refine sugar, and pottery; but to brighten to strengthen to 8o THE EFFECTS OF MACHINERY ON IVAGES. refine or to form a single living spirit never enters into our estimate of advantages." ^ How far these allegations are true tlieoi-etically or practically lias never been fully examined. Chevalier passes by the difficulty on the other side ; he simply says the workmen of Paris are as a matter of fact more intelligent than the country people. But this seems scarcely sufficient answer, and we may quote Adam Smith to the opposite effect on the comparative intelligence of artizans and agricultural labourers. It is well known too that sailors, fishermeuj and mountaineers are far more intelligent than those of an equal rank who are not exposed to an environment so constantly changing. Here, I think, we have the clue to the right answer to the question. Machinery of itself docs not tend to develop the mind as the sea and mountains do, but still it does not necessarily ' The Stones of Venice, II, ch. vi. AS AFFECTING THE DIVISION OF LABOUR. 8l involve deterioration of general mental ability. Surely it must fro tanto be considered a blessing that tlie energy of tlie labourer is not exhausted in his day's work : that his thoughts are free to wander though his hands are tied: and that after his work is over he is not too exhausted to betake himself to mental improvement. A more forcible objection might be drawn from the physical side. Bodily exercise is in itself bene- ficial, and labour-saving apparatus may be carried too far for the health of the labourer. The sani- tary conditions under which machinery places the labourers certainly require the careful attention of the legislator. Take, for example, the carding pro- cess in cotton. "The operatives who had to carry it on showed the effect of the dust in their pale, emaciated faces and in the bronchial affections from which they constantly suffered, causing cough, anemia, debility, and other formidable sjnnptoL G 82 THE EFFECTS OF MACHINERV ON WAGES. of pulmonary mischief." ' Again, tliere are diseases and discomforts incident on the use of particular machines. These have to a certain extent been remedied by factory legislation and G-overnment inspection, and above all by the development of higher notions of morality among the masters. Thus it is clear that the use of machines though apparently labour-saving often leads to an increase in the quant it 1/ of lahour ; negatively by not develop- ing the mind, jDositively by doing harm to the body. II. Let us examine now the effects of Division of Labour so far as arising from machinery on the reward of the labourer. The acquired skill of a labourer partakes partly of the nature of capital, partly of monopoly; and in both respects the law holds, the greater the skill the greater^ ceteris l)arihus, the reward. Hence it is important to examine how far machinery dispenses with techni- ' Bevan, Ituhistrial Classes, etc., p. 18. AS AFFkCriNG THE DIVISION OF LABOUR. 83 cal ikill, and how far it leads to its farther de- velopment. It was pointed out in the first division of this essay that one of the chief causes of the industrial distress at the commencement of the century was the substitution of unskilled for skilled labour caused by the introduction of machinery : here I propose to consider the statical side of the same question, i.e. how far the present system of industry, with its great division of labour due to machinery, affects the skill of the workmen and thus their wages. I must confess that this is a part of the subject where I have been unable to obtain results as general and accurate as could be desired. Such an undertaking to be thoioaghly carried out would indeed take years of research and practical experience of workshops. That one of the tendencies of division of labour is to simplify labour has often been pointed out a priori, and an esaTuination of some of our most 84 THE EFFECTS OF MACHINERY ON WAGES. important industries confirms this opinion. In the textile branches in particular this has occurred without exception, and the process is still going on. Abundant proof of this is to be found in Industrial Classes and Industrial Statistics, edited by Bevan (Stanford, 1877). In the cotton'^ trade, for example, we find this passage : " Here we see that while the development of self-acting ma- chinery has diminished the employment of the more expensive kind of labour (males above 18), it has increased that of cheaper labour, such as females and children. The proportion of the dif- ferent classes is thus ; — 1850 1875 Children Males, 13 to 18 „ aliove 18 Females 6-4 10-3 27-4 55'9 14 8 24 54 P.O. AS AFFECTING THE DIVISION OF lABOUR. S5 Again in the fiax'^ factories the increase in the number of children is shown by the fact that whilst in 1850 the proportion of childi-en employed was 2'3, in 1875 it was 7. The employment of females is now 66 per cent, of the total. In woollens and u-orsted/^ out of a total of 238,241, only 71,892 are males above 18. In lace^ the majority of the workers are females, and the statistics show a great proportion of juvenile labour. In the silk * manufacture, out of a total number of workers of about 45,000, only 8,466 are males above 18. Even in the manufacture of ioots and shoes ^ we read: '^ Although mainly the occupation of a man, women have of late years largely found employ- ment, owing to the universal use of the sewing machine, which can be applied to stiff leathers just as well as to the most delicate muslins." Here, ' P. .38. - P. 57. ^ P. 9B. ' P. 82. = P. 142. S6 THE EFFECTS OF MACHINERY ON WAGES. if we may be allowed to make a slight digression^ the question naturally ariyes^ What has become of the males above 18 ? The same volumes of statis- tics show (pp. 1, 19, 2o, ol, 67) that the large mining industries and foundries absoi-b a large number, while railway service and the army and navy employ the great mass of the rest.^ As a subsidiary result, we may notice that the increasing subdivision of labour tends to a greater employ- ment of women and children in employments to which they are adapted, whilst the men find occu- pation where greater strength and (at present) skill is required. That such a result is of great advantage to the labourers as a class cannot be disputed for a moment, especially if we consider the familtj as the wages-receiving unit; but still this does not settle the question under discussion. ' Compare for later returns, Marshall's Principles p. 385. JS AFFECTING THE DIVISION OF LABOUR. S; What we wish to discover is how far this simpli- fication of labour has dispensed, with skill con- sidered as capital or monopoly. The supposition of some writers that no skill or intelligence is required by machinery is evidently untenable. The fact that in all trades the masters ivefcr piece' work, and the consequent variations in the luagcs of loorhmen (which are far greater now than in the time of Adam Smith), prove this. The fol- lowing extracts from a letter I have received from Mr. Start, president of the Nottingham Cobden Club, will serve to illustrate this point : " The use of a complicated lace machine may require years before an intelligent person may be said to have learnt it." Then he continues : " Take the stocking frame : I have known lads to learn the use of the stocking frame and to be able to compete with men in six or eight weeks, and I have known men who have worked at the SS THE EFFECTS OF MACHINERY ON WAGES. trade for years and can scarcely get a living. I know at this time a case of four men working in one roonij and one of the four does as much work as the other three, and earns and receives as much money as the other three." Thus we see that as a matter of fact in many cases the use of even simple machinery involves both technical skill and general intelligence. Still there is no doubt that the introduction of machinery has, in the industries examined above, led to less skill being required, and that in these employments labourers are so far relatively worse off than before. But with increasing simplification of labour in some branches of manufacture, there has been increasing conqilcwitj in others. For instance, the making of machines and tools has become an important industry employing thousands.i On ' In England and Wales, between 1871 and 1881 tlie AS AFFECTING THE DIVISION OF lABOUR. S9 this point I would refer to au article iu CiipitnJ and Labour,^ quoted from the Scientijic American. The writer, while allowing the fact that in the majority of cases the use of special machines re- quires far less skill than the same special work done by hand, asserts that in many cases just as great skill is required, for instance in the use of the axle lathe, and iu putting together the parts of large machines. Again, it is important to notice that machinery cannot do repairs; the utmost it can do is to work on the plan of " interchange- ability of parts." - Eepair-shops for this reason are in general demand, and in view of the neces- sity which calls for the highest manipulative skill, number of makers of machines increased 28 per cent. — up to 160,797. The total number working and dealing in machines and implements in England and "Wales (18S1) was 207,970, almost exclusively males. ' Cajy. and Lab., iv. p. 65. Issue of IMarcli 7, 1877. - Compare Marshall's Frinc/t'les, p. .315, 90 THE EFFECTS OF MACHINERY ON WAGES. tliey generally contain tlie best of workmen who are paid tlie highest rates of wages. Thus we see that the Divii-ion of Labonr caused by Machinery has two ojDposite tendencies : on the one hand it leads to simplification of labour and loss of skillj and on the other it involves in some branches far greater skill than before. Contrary to what might be expected k priori, experience shows that on tlte luhole far (jreater slciU is required now than formerlij. This is shown by the import- ance now attaching to Technical Education, an im- portance never before felt. It seems to be the unanimous opinion of competent observers that England must be eventually undersold unless she adopts a system of industrial education similar at least in its effects to that of France and Germany. In Mr. Twining's work on Technical Traininq,'^ the summary of opinions of men such as Prof. Tyndall, ' Technical Training. Introduction, p. xv. AS AFFECTING THE DIVJSIOX OF LABOUR. 91 Sir L. Playfaii-j and M. Avuold seems to bo snfficieufc to proYo tliisj and Mr. Scott Eiissell/ in a work on the same subject, asserts that England is the worst educated coLintry in tho civilized ■worlds and draws the same conclusions as to the pros- pects of our industries unless this state of things is altered. Tho same writer' enumerates in three tables the classes for whom systematic education is an industrial necessity. In the first table, in which the education might be called jDrofessional, there are l'> sub-classes, in the second we have 21, and in the third 18. In the last two we have included nearly all the industries of the nation. Thus to assume, as some writers have done, that the use of machinery on the whole dispenses with skill is false as a matter of fact and pro- ductive of most pernicious consequences. The ' Syaiematic Teclin. Ethic, p. 4. " Ihid.. p. 9. 92 THE EFFECTS OF MACHINERY ON IVAGES. error has probably arisen from comparing without sufficient care the labour required in some of the textile trades at present with the skilled labour of former times required in those branches. The point will be further discussed under ''Machinery as affecting foreign trade." Note. — This account of the effects of machinery on skill stands as written in 1877. It is gratifying to find that since then technical education in this country has made consider- able progress. Compare Marshall's Principles^ pp. 268-270 ; and on the general increase of skill, see the essaj- by Mr. GifFen on the " Progress of the Working Classes " [Easays on Finance, Second Series). CHAPTER IV. MACHINERY AS AFFECTING THE CONCBNTKATION OP LABOUK AND CAPITAL. That tlie division of labour involved in using machinery necessarily leads to concentration of in- dustry, was first distinctly sliown by Babbage ^ in his chapter on the " Causes and Consequences of Large Factories." What Babbage proved only theoretically, has since been amply verified by ex- perience. Take, for example, the cotton industry ; " To show how much more relatively productive factories are now than they were formerly, the proportion of spindles was 10,857 in 1850 to 14,130 in 1875, and of power-looms, 127 in 1850 to 174 ' Econ. of Mach. and Hdniif. 93 94 THE EFFECTS OP MACHINERY ON WAGES. iu 1875. This proves that the factories in the last quarter of a century have been augmented in size, and there has been a tendency to concentrate ma- chinerij in one mill^ and also that machinery has become more and more self-acting and requires less manual labour." ■' Similar results hold of flax and wool.^ Wool is made into stockings and carpets in the same factory, and I have been in- formed of cases in which the india-rubber required for the combs for carding wool is prepared in the same manufactory^ The concentrating influence of machinery is also illustrated in the increasing size of steamers, and by the fact that farms tend to increase in size, through the use of expensive machinery. The gradual extinction of small industries, in cases where machinery is employed and the demand ex- tensive, has been so fully described by Porter ' Industrial Classes, p. '.\ ' Ibid,, pp. 37 5g_ CONCENTRATION OF LABOUR AND CAPITAL. 95 Young, and Brentano, that it would be pedantic to dwell further ou the point. A striking confir- mation of the law is afforded by America.' ]\Ias- sachusetts and Ehode Island, two manufacturing states, with a population of only 1,405,686, have nearly as large a civic population as ten agri- cultural states with an aggregate population of 10 millions. There is, however, another tendency of an op- posite kind, which has been generally overlooked : Brentauo,- for instance, asserts that it is the ten- dency of all industries more and more to fall into the hands of a few capitalists. The counter- acting tendency I allude to, arises from the increasing wealth of all classes of the community, chiefly due to machinery, giving rise to a vast number of small industrtes. ' Bowen, Amer. Pol. Econ., p. 78, ^ Englische Getcerkvereine, ii. 336, 96 ?■//£ EFFECTS OF MACniNERV ON WAGES. The man who Ccan invent a new Inxury is sure of large and immediate profits. For instance, the discovery of a new dye^ or the invention of new ornaments or toys, may be the foundation of a new industry. And, in fact, instances are not wanting of entirely new trades springing up. All luxuries are, as a rule, produced on a small scale; the best fishing-rods and golf-clubs are made by particular makers in private workshops, and the arts of photography and pattern-designing illustrate the tendency. Again, the number of professional men has largely increased. The importance to a country of having a varied industry is very great, and there seems to be no reason why there should not exist in England, for example, as great a variety of small industries as there was formerly, side by side with the immense capital which is required in the factory system. To return from this digression, it must also be CONCENTRATION OF LABOUR AND CAPITAL. 97 remarked that there is a further tendency of large factories to be concentrated in large, cities. Our manufacturing towns have grown pari passu with our factories; this is proved by tables in a con- venient form by Jevons/ who addsj "our manu- facturing population has more than quadrupled in sixty years." Taking it for granted^ then, that machinery tends to concentration of both capital and labour, — in other words, to the increase of factories and towns, — we have now to examine the results of this con- centration on wages. Here, again, it will be most convenient to consider the question (i.) in relation to quantity of lahour, (ii.) in relation to reivard. I. The evils which characterized the introduction of large factories, and the sudden growth of towns, have been already discussed under " Substitution," ^ and it is only necessary here once more to lay ' Coal Question. ' Ch, I. H 98 THE EFFECTS OF MACHINERY ON WAGES. stress on the legitimacy of the interference of the legislature, in comioelling the masters, to some extent at least, to consider the sanitary and mora conditions under Avhich their people work. That Grovernment interference was necessary, is shown by the fact that France and Germany have found it expedient to follow the example of England. Still, whatever legal precautions are taken, it is clear that the qnantiti/ of labour required to do a certain amount of work can only be reduced to a minimum by the growth of higher moral principles. The relation between masters and men is very different under a small system of production and a large. To a large manufacturer, unless he be a highly sympathetic man, his work-people tend to become mere ^'s and B'a of an economic pro- blem, embodied forces, which can raise so many foot-pounds, or "do" so much "work." The use of the term "hands" is suggestive of Aristotle's CONCENTRATION OF LABOUR AND CAPITAL. 99 remark, that a slave is an animate tool, and a tool an inanimate slave, and that no friendship can be between masters and slaves. Apart from this concentration in factories, the concentration in ?arjre towns has at first a pernicious effect on the workman. No doubt there are ad- vantages connected with life in cities. Education may be carried on to a greater extent than in the country, and many comforts may be obtained, which a scattered population must do without. But to preserve or cultivate independence of mind and vigour of understanding is far more diffictdt : still more difficult is it to develop testhetic emotions. Take, for instance, the old ballad literature of England, and compare it with the music-hall pro- ductions which have taken its place. Still it may be replied that "operatives" are in every way better off than the agricultural labourers, and this is certainly true at the present day. All I wish 100 THE EFFECTS OF MACHINERY ON WAGES. to point out is, that to live well in a large city requires far more conscious rational action, and no doubt this will in the end serve to develop a better system of morality and habits of life than it dis- placed ; but the history of all large cities warns us, that the social problems involved in their very existence demand for their solution earnest thought and life-long devotion. II. But it is necessary to examine more par- ticularly the effect of concentration on the reward of the labourer. The genial relations between masters and men, which under the old system had become fixed by law and custom, gave place, on the introduction of machinery, to a struggle of power. To this fact, as Brentano has most clearly shown, was due the origin of Trades-Unions. The principle of their action briefly stated is, that wages shall, so far as the labourer is concerned, be fixed by large masses of men, not by individuals, and it CONCENTRATION OF LABOUR AND CAPITAL, ici is to the concentration of labour and capital that they owe all their power^ and^ as the labourers would sajj the necessity of their existence. Trades-Unions again have given rise to a further widening of the gulf between emplojers and em- ployed. The masters in their turn have answered combination by combination. The conseqaence is that when prices begin to fall^ the masters be^-i:: to reduce wages; when prices rise^. :":ie Uni'::is. whatever their professions, deiiia:id a rise cf wages : and thus the market value of labour \k-- a pricCj like every other commodity. Lcri Brassev - maintains that "the labour market is se::}s::.!e :: every fluctuation of trade." It may be tne. as Brentano asserts, that what the leaders of the Trades- Unions desire is a steaiij suificient wage, but with the concentration of labour and capital now domi- nant, owing to machinery, this seems impossible. ' Work and Wages, p. 78. 102 THE EFFECTS OF MACHINERY ON WAGES. This result is so important, that it may be well to show how it follows, by treating the question from another point of view. It is well known that all large manufacturers carry on their business, to a great extent, on borrowed capital, by discounting bills when trade is good. It has however been forgotten, that just as surely as modern industry requires a large mass of floating capital on which it may draw in case of need, so also it requires a large amount of what may be called floating lahour. In the very birth of large industries, ''the opulent clothiers made it a rule to have a third more men than tJtey could emijloy, and these had to stand still part of their time." ^ And this is partially the case now : in all large industries the number of hands in full work is never the same for any length of time.^ And unfortunately for the labourers, they ' Brentano, Gilds and T. U. Eng. edn. p. 109. " Compare p. 65, note. CONCENTRATION OF LABOUR AND CAPITAL. 103 cannot separate themselves from tlieir labour; capital is cosmopolitan^ but however much the mobihty of labour may be increased, it can never approximate to the mobility of capital. "What Adam Smith said is true now, and always will be true—" man is of all baggage the most difficult to be transported." Note. — In the original edition a criticism was introduced on co-operation for production as a remedy for industrial strife. Although it may be shown by statistics that co- operative production forms a very small part of our in- dustrial system, and has often failed, I am reluctant to say anything adverse to a plan which is morally so at- tractive. Besides, the subject, with the allied subject of Profit-Sharing, is too large for adequate discussion in this essaj^ See my article in the Contemporary Reviev:, Januarv, 1890. CHAPTER V. MACHINERY AS AFFECTING THE MOBILITY OF CAPITAL AND LABOUE. The mobility of capital and labour depends on two factors, (a) means of transport, {h) hioivleJge of markets. Both of these elements have been in- fluenced by machinery, and have in turn had im- portant effects on wages, as has already been shown by implication in the previous divisions of the sub- ject. Let us now consider how machinery has affected the two factors above mentioned. {a) The effect of machinery in facilitating trans- port may be illustrated by comparing the means of communication existing at the present time between Preston and Wigan, and those which were available 104 THE MOBILITY OF CAPITAL AND LABOUR. 105 when Arthur Young made his Northern Tour, one hundred years ago. " I know not/' he writes, " in the whole range of language, terms sufficiently ex- pressive to describe this infernal road. Travellers will here meet with ruts, which I actually measured, four feet deep, and floating with mud only from a wet summer; what, therefore, must it be after a winter ? " That the improvements in the methods of trans- port have been to a large extent taken advantage of, is proved by the astonishing results of Dr. Engel's calculation, quoted above, that tliree times as much horse power is used in locomotu:e as in fixed engines. (h) The effects of machinery in accelerating and promoting the diffusion of hnowltdge requisiie to mohility, are no less evident and startling. Steamers and railways make an " organized market " of the civilized world. The mail service in the remotest io6 THE EFFECTS OF MACHINERY ON WAGES. part of tlie country is better tliaii it was, before the era of machinery, in the most densely popu- lated district. Not content with availing them- selves of the ordinary trains, newspaper proprietors run special trains for their own business. A print- ing press is in itself a wonder of mechanism^ com- pared with its progenitor of some fifty years ago. Without steam and improved machinery, no daily paper could print a sufficient number of copies to satisfy the demand. Again, the telegraph is a system of machinery which has still further in- creased the organization of markets. The greater part of machines at this time use steam as a motive power, so that there is a tendency to confine the use of the term to steam engines and their direct applications, but this is altogether unjustifiable. The telegraph is, in any scientific sense of the term, machinery just as much as the power-loom. Babbage, in his standard work^ which may in this THE MOBILITY OF CAPITAL AND LABOUR. 107 subject be called a " classic/^ gives as tbe cliief characteristics of macliinery, tliat it saxes labour and saves time. The telegrapli does bothj and being a mechanical constructionj comes under the ce- nomination. Mobility is an economic term of very wide app'i- catiouj and particular cases have alreadv been discussed. When machinery was subsrirated for labour, the only remedy we discovered was clian^e of place or occupation,! and again we saw that ilie possibility of a glut is due to want of or?anLza::or!. It is clear that in these cases any improvement in mobility is of service directly to eapiualisrs and labourers alike. But wages and profits are eorre- htive terms, and both depend on prices."- Hence one of the most important factors in determining wages is the belative moUUtij of lahour and capital, ' Cf. ante, Division of Labour, iii. ^ Cf, ante, Introduction. loS THE EFFECTS OF MACHINERY ON WAGES. especially that part of both which has above been termed "floating." I. First then, in ohtaining information, how far has the progress of invention aided the capitalist in comparison with the labourer ? The extreme complexity of the problem of mobility has in general been overlooked. The ordinary dedactivo school seems to think the problem is solved by merely quoting an axiom on which the solution is in part founded. If, it is said, wages and profits are higher in one place than another or in one employment than another, the capital and labour will rush in and bring them down to the ordinary level by com- petition. That there is such a tendency in modern industry is, I take it, self-evident, but the law of its action is by no means so clear.i We may take an analogy from another science, which like Political ' Cf. Cliffe Leslie, "Course of Agricultural Wages in Europe." Fortnightly Beview, June 1, 1874. THE MOBILITY OF CAPITAL AND LABOUR. 109 Economy is in its infancy : I allude to Meteorology. The ordinary teacliing of the old Physical Geo- graphies is that if the atmospheric pressure is lower at one place than another, air -will rush m, and calm will be restored on the equalization of pressure. But in practice, it is not a certain de- duction that a south wind is blowing because the weather charts inform us that the barometer is higher in London than in Edinburgh. "We must consider not merely two points but a wide area, and the whole theory of cyclones and anti-cyclones. So it seems to me that the tendency to equality of profits stands to the phenomena of fluctuations in industry in the same relation as the tendency to equalization of atmospheric pressure does to the phenomena of storms : neither is an explanation, but rather an assumption or axiom on whicb an explanation may be based. Eicardo's farmer does not take to making cloth because cloth-makers are no THE EFFECTS OF MACHINERY ON WAGES. getting high, profits. Why should he? Why not to any othei' of a thousand industries if they too are getting higher profits ? Why not devote his capital to all equally ? For this same reason, that if the barometer at Edinburgh is higher than any- where else, it does not follow that a gentle breeze is blowing from that city to every point of the compass. To return then to the question how far the new modes of obtaining information introduced by machinery have altered the relative positions of capital and labour, it is, I think, clear that the capitalist has gained by far the most. Of all marJcets the labour marlcet is the least organized. In other markets the future is considered as much as the present. The rumour of a war, the possibility of a bad harvest, a change of ministry, and a mul- titude of similar facts are all discounted by the capitalist, and though they have just as important THE MOBILITY OF CAPITAL AND LABOUR, in effects on wages, hardly one of them is considei'ed even by the most intelligent workmen before its effect is felt. Thus Capital has taken full advan- tage of its increased means of obtaining knowledge, Labour scarcely at all.^ II. If again we consider the imp-ovement in transport, we shall find the same result. Capital passes rapidly from one place to another, and un- less locked up in plant, from one employment to another. It does not matter to the capitalist in the least where his manufactured articles go : China or Peru is all the same to him. Again, commodities are sold once for all as far as he is concerned: the labourer must always carry his labour with him. Thus we see in taking advantage alike of im- ' The bureau of industries in New Zealand is an in- teresting experiment. See Board of Trade Journal, Feb., 1892, p. 165. 112 THE EFFECTS OF MACHINERY ON WAGES. proved meaus of obtaining knowledge and of trans- portj Capital has been favoured far more tban Labour. It was pointed out under " Substitution "^ tliat improvements tend to become continuous^ and tbat Labour migbt fairly hope to attain to sufficient mobility to adapt itself to the gradual changes. In this case the improvements in locomotive and what I may term organizing machinery continually add to the adaptability of Labour. But in the case before us, i.e. if capital be more mohile than labour, it is clear that the labourers are so far ivorse off than they were before. If floating capital can be readily transferred to places where it is wanted, the wages-fund theory applied to a particular in- dustry falls to the ground in its most essential part. The only part of it which holds good — that part which considers the number of labourers as fixed for a particular trade and time — points inevit- ' P. 33, THE MOBILITY OF CAPITAL AND LABOUR. 113 ably to the conclusion that in fluctuations of in- dustry the labourers are at a disadvantage. The rationale of fluctuations in prices and wages can only be properly completed by discussing InteiTiational Trade. It would be out of place to examine the question here at lengthy but the gene- ral effects of machinery on international trade are so important in their reaction on wageSj that an outline of the effects seems necessary to complete the plan of this essay. The changes effected by machinery are partly due to those characteristics discussed under the heading "Auxiliary," partly to those under "Mo- bility." The result may be summed up in a sen- tence. Machinery has enabled England to turn out a sufficient amount of certain articles for the markets of the world, and machinery of a diff'erent kind has enabled her to distribute this enormous produce. Partly through being the first to adopt 114 THE EFFECTS OF MACHINERY ON WAGES. the new processeSj partly througli the greater enter- prise of her capitalists^ English manufacturers at first monopolized the markets. This monopoly led to large profits in the first place^ and consequently to the greater employment of labour and capital in a few important manufactures (cf. Porter and Jevons). Our agricultural population has steadily diminished^ and our imports of necessaries have steadily increased^ all this century. It is calculated that at least two millions of people depend directly or indirectly on the cotton industry alone. The important thing to notice is that what rules " international trade " is Reciprocal Demand, and this demand again depends on a multitude of variable elements. The imposition of a protective duty or any new tax by a foreign country may throw an industry into a state of depression; with a crisis the pressure may become extreme, and with a war the industry may be utterly ruined. HE MOBILITY OF CAPITAL AND LABOUR. 115 i not only are our markets liable to fluctua- from demandj but it must be observed tbat iw materials are for tbe most part of foreign hj and tbat coal and iron^ the necessaries of ineSj are of limited extent. With the cotton e not yet forgotten, and the increased rise in jrice of coal after the Franco-Prussian war in our memory, it is superfluous to give fur- illustration. The conclusion from this point of is manifest : macMnery lias given rise to more n and extensive fluctuations, and to greater pre- isness of labour, than was the case in a simpler nore stable state of society} is result may seem to contradict an opinion ?ally held that foreign trade by increasing the )er of markets tends to steady prices. The er of depending on one foreign market has forcibly stated by Adam Smith ^ :— " The in- Compare, however, p. 65. ^ P. 272 (MoCuUoch). ii6 THE EFFECTS OF MACHINERY ON WAGES. dustry of Great Britain, instead of being accommo- dated to a great number of small markets, bas been principally suited to one great market. Her commerce, instead of running in a great number of small channels, has been taught to run principally in one great channel; but the whole system of her industry and commerce has thereby been rendered less secure, the whole state of her body politic less healthful than it otherwise would have been. In her present condition Great Britain resembles one of those unwholesome bodies in which some of the vital parts are overgrown, and which upon that account are liable to many dangerous disorders scarce incident to those in which all the parts arp more properly proportioned. A small stop in that great blood-vessel which has been artificially swelled beyond its natural dimensions, and through which an unnatural proportion of the industry and commerce of the country has been forced to circu- THE MOBILITY OF CAPITAL AND LABOUR, n? late, is veiy likely to bring on the most dangerous disorders upon tlie wliole body politic. The expec- tation of a rupture with the colonies, accordingly, has struck the people of England with more terror than they ever felt for a Spanish Armada or a French inrasion." This opinion — that the greater the number of markets the greater the steadiness of price — seems to me to be only true under certain conditions, con- ditions which are liable to be disturbed. The enormous development of steam communica- tion and the spread of the telegraph over the whole globe have caused modern industry to develop from a gigantic star-fish, any of whose members might be destroyed without affecting the rest, into a yik'^a t,mov which is convulsed in agony by a slight injury in one part. A depression of trade is now felt just as acutely in America and even in our colonies as at home. Still in the process of time, with the ii8 THE EFFECTS OF MACHINERY ON WAGES. increase of organization and decrease of unsound speculation^ tliis extension of the market must lead to greater stability in prices, but at present tlie disturbing forces often outweigh altogether the supposed principal elements. Another danger, to which our merchants are continually calling atten- tion, attends the dependence of our industry on foreign markets. England may be undersold. Against this there is one remedy which is entirely in our own power. Many capitalists cry out against Trades-Unions and assert that they will ruin our industries. The adequacy of the cause to the effect does not appear] very evident, and the real danger is overlooked. Attention has already been called to the importance of technical education, and if we are undersold, the contemptuous neglect which Englishmen compared with foreigners still appear to entertain for this means of increasino- the effi- ciency of labour, will be far more to blame. The THE MOBILITY OF CAPITAL AND LABOUR. 119 whole questioa is most fully discussed in Mr. Scott Russell's work on Systematic Technical Mncation, ell. iv. In fhis chapter is given a summary of the opinions of the most celebrated men, representing learned professions, applied science, engineering, education and manufacture. It is to be hoped that the opinion expressed by Mr. Samuelson, M.P., is warranted when he says, " To the evils of such a condition not only our statesmen but also onr people are rapidly awakening, and the disease once acknow- ledged, the remedy will soon be applied." This statement is certainly borne out by the action of men like Mason and Whitworth and the members of the City Guild, and that the working classes are not insensible to the want is shown in the same work.^ 'Scott Eussell, Syst. Tech. Educ, pp. 101, sqq. See also the Eeport of the Commissioners on Technical Education (1884), 120 THE EFFECTS OF MACHINERY ON WAGES. Our race, climate^ and insulai' position^ are guarantees that the process of underselling will not be very speedy, provided only we increase the efficiency of our labourers ; and the organization — if I may use the phrase — the democracy of our capi- tal gives us advantages which other nations will take years to surpass. SUMMAEY OF RESULTS. The complexity of tlie problem and the method adopted of regarding the question from different points of view render it necessary to present in outline the results obtained, to compare generally the good and evil effects of machinery on the welfare of the labouring classes in the past and present, and, peering a little way into the obscurity of the future, to consider what prospects there are of the evil being eliminated and the good increased. In the introductory remarhs on icages an examina- tion of the terms reward and quantity of labour led to the rejection at once of the method of comparing prices and nominal wages at different times as giving any criteria of "real" wages. " Quant It y of 122 THE EFFECTS OF MACHINERY ON WAGES. labour " was defined in a similar way to tliat adopted by some Grerman writers as equivalent to " ex- penditure of life-force " : reward received a definition equally broad, as including all the desirable tilings accruing to the labourer in virtue of his position as such. With these definitions it followed at once that it was impossible to give any simple law for the determination of wages, and an examination of the term Macldnery led to the conclusion that machinery (defined historically, not abstractly) might influence wages in many different ways. I. The immediate and proximate effects of the substitution of machinery for labour were first ex- amined ; — those effects which are due to the transi- tion from one system to another. The sudden introduction on a large scale of labour-saving machinery has always been considered an evil, but the evil varies with the suddenness and the ex- tensiveness of the change on the one hand, and SUMMARY OF RESULTS. 123 tlie extension of the market and Uie mohiUhj of labour on the other. I attempted to show that both the invention and adoption of labour-saving machines tend to become more continuous, the increments of change becoming smaller. And it is clear under these conditions that if there is any extension of the market on the reduction of prices effected by introducing machinery, the labourers may not be injured even temporarily. Still it was admitted that discontinuities would always occur, and then the only remedy appears to consist in increased mobility of labour. The preceding is the simplest case of the problem, and of comparatively small interest and importance compared with the consideration of the complex social results which ensued on the intro- duction of large factories. The old relations between masters and men, which had become comparatively stable by law and custom, were suddenly thrown 124 THE EFFECTS OF MACHINERY ON WAGES. out of gear ; sWiUedi labour of a certain kind was replaced by unskilled ; the skill wbicli was required was noi e77ihodied in ilie same worhmen as before ; and finally tbe conditions, physical, intellectual and moral, in which the labourers were now compelled to work, led to a fearful degradation of labour. These results, it may be said, are by no means matured, even at the present day. The relations between masters and men are not by any means in a satisfactory condition ; technical education (in England at least) is only in its infancy; and al- though factory legislation has done a great deal, the conditions of work in large industries are still capable of vast improvement : in a word, industry lias not yet adapted itself to the changes in the en- vironment produced by machinery. It was noticed as a subsidiary result that some- times the labourers had succeeded in obtaining for themselves all the advantages caused by the SUMMARY OF RESULTS. 125 improved macliineryj that labour-saving machinery hadj in certain instances^ led to a reduction of the working hours, and of the quantity of labour. II. The remainder of the discussion was mainly devoted to the examination of the statical side of the question, though of course it was not prerended that the two questions can be discussed quire Siza.- rately. (1) Considering the effects of the e-ormous increase in the productive power of labcor cause! by machinery as auxiliary to labour, we sa-R- [a] That the working classes were bene5:ei ^::1 the rest of the community by the increased clear- ness of manufactured articles j that this fall cf price of commodities constituted a rise in real mi^a-. 3 That the accumulation of capital was increased, and consequently the demand for labour. (7) Against these advantages it was proved that the use of machinery tends to excessive hours of labour; and 126 THE EFFECTS OF MACHINERY ON WAGES. statistics were adduced to show that this allegation against machinery is not a mere offspring of the imagination. This evil has, however, been remedied to a great extent, partly by law, partly by custom. (S) Another danger inherent in the use of pro- ductive agents of such power as those now in vogne consists in the possibility of over-production in re- lation to the means of organization. Here it seems to me we have one of the most important effects of machinery. Wages are liable to fluctuations such as were not experienced under the system of small industries, and are more precarious. Against this evil modern industry is still badly armed, and in the meantime all the labourer can do is to save when wages are high, so as to be prepared for a fall. (2) The effects of machinery on Division of Labour were nest considered, with the following results : (a) Quantity of Labour (or stress of toil) seems SUMMARY OF KESCirS. 127 to have been increasid in many en:plovri:e:i::s Vy the increased division of labour consequent on ilie use of machinery, not however so maeh on the mental side, as some writers have maintained, as on the pliysical. (;3) The use of machinery allows of a letter distrihutlon of labourers than formerly. Women and children find suitable employment in light work, whilst males above IS devcie them- selves to industries requiring greater energv. (7) The fact that masters all prefer piece-work, and actual statistics of the difference in wages in the same employment, with other considerations, were adduced to show that even in the use of simple machinery skill and tjmeral inteUigeace are required still more tJiaii formerhj. (2j In connection with more complicated machinery the importance of technical education, by the aid of which the work- man might hope to take a position equal if not superior to the small master of earlier times, was 128 THE EFFECTS OF MACHINERY ON WAGES. insisted on, and at the same time it was pointed out that the only safeguard, in case of the de- sti'uction of his jixeil skill by new improvements, lay in the general cultivation of his intellectual and moral faculties. (3) The effects of machinery in concentrating labour and capital were then examined : (a) It was proved both theoretically and his- torically that concentration naturally follows divi- sion of labour, though at the same time, in a short digression, attention was drawn to the fact that increase of national wealth consequent on the use of machinery naturally leads to the development of a number of small industries. (/3) The evils in- herent in the system of large industries, and the consequent life in towns, so far as quantity of labour is concerned, were weighed, with results lamentable in the past, doubtful for the present but promising for the future. Here again the SUMMARY OF RESULTS. 129 necessity of legislation became apparent, and above all the development of a liigber morality in both masters and men. (7) As regards the reivai\l of the labourer, we sa\Y that it was liable to severe fluducdions owing to the employment of a large amount of floating labour and capital. (S) The question was then considered whether the work- men could hope to avoid these fluctuations ; and it was shown that the action of Trades-Unions, whatever their professions, intensified the effects last noticed and caused wages to vary with prices still more exactly, and this, it was remarked, is in reality equivalent to saying that the labourers get a share of the profits. (4) Here it was natural to make a transition to the general question of moUlity of labour and capital, as affected by machinery. (a) This mobility was shown to depend on two factors, hiioioledge and means of transport ; and 130 THE EFFECTS OF MACHINERY ON WAGES. facts were brought forward to sliow that both elements had, through what was called locomotlce and organizing machinery^ been enormously de- veloped. (/3) The effects of this general develop- ment having by implication been noticed before, attention was directed to the relative mobilitij of labour and capita], and it was shown that, to the disadvantage of the labourer, capital had gained in both 233'1'ticulars more than labour, the labour market being less organized than any other, and maiL the most difficult baggage to transport. (7) The special case of mobility in connection with international trade was then briefly examined, especially in relation to fluctuations of luages ; and here again serious dangers to the labourers be- came manifest. (S) The dangers of being under- ■iold were then considei'ed, and once more the importance of general and technical education be' came evident. StJMiMAkY OP RESi'LTS. ijl Such are tlio particular results for the particular era considered. These results have justified the method adopted, according to which it was said at the outset that a general answer applying to all times and places was impossible, for the answer must depend on the systems of industrial organization, law, and morality dominant in the society we wish to consider. That every accession to man's empire over Nature may be productive of good to mankind at large no one will deny ; but we must never forget that any increase in the material forces at our disposal involves an in- crease of intellectual and moral energy. " The state of every part of the social whole at any time is intimately connected with the contempor- aneous state of all the others. Religious belief, philosophy, science, the fine arts, commerce, navi- gation, government, all are in close mutual de- pendence on one another, insomuch that when 132 THE EFFECTS OF MACHINERY ON WAGES. any considerable change takes place m one we may know that a parallel change in all the others has preceded or will follow it." "^ If this be true, it is clear that an abstract treat- ment of the commercial conditions apart from the rest can lead to no trustworthy results. But re- stricting the answer to the Era of Machinery which we have here considered, a comparatively general result may be given. Tlw past. In reference to the past, for fifty years after the introduction of the improved processes of production which marked the commencement of the era, the working classes instead of benefit un- doubtedly received injury. The civilized nations, England in particular, had developed forces they Dould not control ; the established laws and nsao-es fell into desuetude, and there followed a general disorganization of industrial society. ^ Mill's Aiiguste Comta caul Positivism, p. ^7, SUMMARY OF RESULTS. 133 The present. Tliougli many advanc3es towards stability have been made^ the severe fluctuations in trade, the strikes and lock-outs, ^ the recognised defects in the sanitary conditions of work, all point to inadequate adjustment even in the present. The process of adaptation to the new environment has been rendered less speedy than it might have been by the absurd extremes to which the doctrine of laissez-faire has been carried. This dogma, first enounced at a time when the laws affecting in- dustry were so bad, that the greatest licence con- ceivable would have been better, was naturally received with great favour ; it was supposed to be perfectly verified by the success of Free Trade ; and has since been supported by a misinterpreta- ' Acoorduig to Mr. Burnst's Report of the Strikes and Look-outs of 1890 (the last return to hand), there were iu that j'ear 1,023 strikes, and the loss to the nation was actual to 19 '88 days' work Ijv 373,650 persons. i:4 THE EFFECTS OF MACHIXERY ON WAGES. tion of the theory of evolution. Under the iufluence of this theory the followers of Mr. Herbert Spencer feel inclined to trust to " survival of the fittest " to bring about the best state of things possible. But this is trQstino- to the lower instincts to do what Reason^ "the highest of all instincts," is unable to perform ; it is an optimism more degrading and less justifiable than the fatalism of enervated Orientals. As Aristotle saj-s : — "Law possesses a compulsory power, since it is reason proceeding from a certain prudence and intelligence; and the law is not odious when it prescribes what is good." Yet even now, instead of regarding law as the highest product of progressive societies, some people seem to imagine legislation is a return to tyranny or paternal government.^ ' I confess that at the present time (1892) I do not think the utility of reliance upon Law and Government needs the emphasis it required in 1877. SUMMARY OF RESULTS. In the words of James Martiueau ■} "Two metliods exist of aiming- at liuman improvement : by adjust- ing circumstances witliout, and by addressing tlie afiections within j by creating facilities of position^ or by developing force of character; by mechanism or by mind." Although " mechanism " has done much, and this has been fully insisted upon, still I maintain that both Law and Morality, the in- fluences affecting " force of charactei-," must make great advances in tlie future before the working classes obtain all the benefits improved machinery renders possible. The future. The practical importance of the sub- ject prevents us from resting content with indicat- ing the probable effects of elements now existing, but compels us to inquire what new elements we should consciously strive to introduce in order to attain this end. ' Quoted in J. Yeats, Technical IJistory of Comvierce, p. 430. 136 THE EFFECTS OF MACHINERY ON WAGES. I. First of all, then, let us glance at wliat remains for goyernments to perform. If it is taken for granted that we have reached the limits beyond which legislation on sanitary conditions is not needed ; if we suppose that the recent act on the liability of employers for the injuries re- ceived by their workmen is, as Harriet Martineau would say, " the result of a pseudo-philanthropy which is one of the disgraces of our time " ; if we suppose that no further laws on the employ- ment of women and children are required ; still with all this, there are important matters which demand the consideration of governments. (1) In the first place, a better scheme of general and technical education is necessary. In respect to general education, taking the words in their narrowest signification, something has already been done, but technical education is still left to competition and survival of the fittest. And yet. SUMMARY OF RESULTS. 137 as Mr. Twining ^ writes after the fullest examina- tion of tlio subject, " For giving our national in- dustries a rate of progression equal to that of the age, no less motive power will suffice than that of an institution on a national scale effectu- ally supported, or still better, actually constituted, by Government." Again, the patent laws are in a chaotic condition, and yet it would be a great advantage to the nation if artizans were enabled to reap some of the fruits of their invention. Further, nothing is more destructive of the energies and the morality of working men, than for them to imagine they are bound down by iron chains in the lowest grades of a modern caste sys- tem. It is no doubt true that there must always be hewers of wood and drawers of water, but no state of society can be considered incapable of im- provement in which facilities are not offered to the ' Tediniccd Training, p. 49, 13S THE EFFECTS OF MACHINERY ON WAGES. Lest specimens of the lowest class to rise to any occupation for wliicli tliey are adapted. Even Plato with all his aristocratic leanings admitted that if a golden child happened to be born of iron parents, he should be allowed to pass into the rank intended for him by Nature. It is clear that with- out a national system of education this promotion^ except in rare cases^ is impossible. (2) The New Era involves radical changes in ia- ttriiationcd 2'ioUci/. It is a curious fact that Political Economy in its most rudimentary state arose from international relations. "In order to undei'stand what a market originally was, you must try to picture to yourselves a territory occupied by village communities, self-acting, and as yet autonomous, each cultivating its arable ground in the middle of its waste, and each, I fear I must add, at perpetual war with its neighbour. But at several points points pi'obably where the doniains of two or three SIJ.VM.IAT Of RESULTS. 139 villages converged — there appears to have been spaces of what we should now call neutral ground. These were the markets." ^ The writer goes on to remind his readers how the Roman Jus Gentium^ the foundation of modern International Law^ was in part originally a Market Law. It is no less true, in these days, that Political Economy in its most important aspects — that is, when it attempts to solve completely practical problems — involves the study of international relations more highly differentiated. The doctrines of value, foreign trade, and by con- sequeuce the most important parts of the theory of taxation, manifestly rest on the relations sub- sisting between different countries ; capital has long since become cosmopolitan, and wages current in any one country are intimately connected with events occurring in different parts of the world. V/hat direction legislation in these matters should ' Maine, Yill. Comm.. p. 192, 140 THE EFFECTS OF MACHINERY ON WAGES. take, it would be presumptuous to discuss in a superficial way at the conclusion of an essay on a special subject. Still attention may be drawn to the factj that international relations are far behind the wants of the age. No one would recommend a return to a policy of isolation with an improved "balance of trade." Still we see every day a farther organization of capital and labour, — we see one country, notably our own, permitting the exist- ence of its industry to depend on the passions of other nations, and with no security that a quarrel which it does nothing to originate may not lead to the destruction of its commerce and the misery of its inhabitants. II. But if there is much left for law, there is wanting, still more, a higher development of moralifif. "Legislation has nearly expressed its inability to keep pace with the activity of man in discovery, in invention, and in the manipulation of SUMAJARY OF RESULTS. 141 accumulated wealth; and the law even of tlie most advanced communities tends move and more to become a mere sui'face-stream, having under it an ever-changing assemblage of contractual rules with which it rarely interferes, except to compel com- pliance with a few fundamental principles, or unless it be called in to punish the violation of good failh."^ Men have a natural disinclination to regard morality as advancing; they seem to imagine that the morality of one age is perfectly adapted to the wants of another. But morality has advanced un- doubtedly, and this development must be fostered now more than ever. Theoretically many equally plausible schemes of distribution may be maintained; but these are the days of machinery and large capitals, and I cannot but think that if speculative philanthropists like ' Mnine, Ancient Laic,. ^. QOoi 142 THE EFFECTS OP AlACtilNERV ON WAGES. the Social-Democrats would endeavour to remedy the defects of the present edifice rather than at- tempt a new construction on its ruins^ they would probably do some practical good in the present, and at any rate they would, in case of failure^ have the intellectual consolation of feeling assured that by this method alone has anj^ veritable progress taken place. Much good might be done to the working classes if a higher standard of morality and of life were set before them : as the motto at the head of this essay states : — The Wages Question is a question of Culture — using the term in its best and broadest sense. '•' It is not enough that by a decrease in the hours of labour actual hindrances in the way of the ele- vation of the working classes have been set aside. It is necessary that still more than ever positive contrivances and methods of culture .should be created, in order to throw open to the Avorkino- SUMMARY OF kESULTS. 143 classes the benefits of tlie progress of maukind ill civilization.'' ^ And in the masters no less than in the men, higher notions of morality are requisite. It is not denied that England can boast of many merchants who are fully alive to the social requirements of the day, and who have hearts that respond to the ap- peal. There is, however, still room for the moral necessities of the age to be impressed npon our capitalists, whether by the calm historical method of Brentano or by the passionate vehemence of Carlyle.- "The leaders of industry, if industry is ever to be led, are virtually the captains of the world ; if there be no nobleness in them, there will never be an aristocracy more . . ." ' Brentano, Englisclie Geicerkvereine, 2te Th., p. 339. ^ Carlyle, Past and Present, p. 233. Eutler i Tanner, The Sehvood Prlutlng Worku, Ttomi, and Loudon, In Crown 8uo. Price 10s. 6c/. A Treatise on Money AND ESSAYS ON MONETARY EROBLEilS. BY J. SHIELD NICHOLSON, M.A.,~D.Sc., Professor of Political Economy in the TJniversitu of Edinhtbrgli ; Examiner in Political Econoviy in the Universitii of London ; and formerly Examiner in the I 'niversity of Cambridge and the Victoria TJniversitij. THE TREATISE ON MONEY is a popular statement of the general principles of the subject, and is strictly non-controversial. THE ESSAYS give the author's opinions on various llonetary Problems— especially the Recent Fall in Prices and Bimetallism — and are entitled -. — John Law of Lauriston : and the greatest Speculative Mania on Record — One-Pound Notes for England— The ESects of Great Discoveries of the Precious Metals — Bimetallism both Advantageous and Praoticab'e — The Morality of Bimetallism— Stability of the Fixed Ratio between Gold and Silver under International Bimetallism^The Measurement of Variations in the Value of the Monetary Standard — Causes of Movements in Gsneral Prices. Opinions of the press, &g. " Thougli we do not share the leaning to hi-metallism wHich P o- fessor Nicholson feels, yet we are perfectly able to welcome ^ a uiy the studies that he has made of the difficult and "^'Pf '« ^"^^J;^^ which form the staple of his publication. . . .• It is to tne essay on the ' Causes of Movements in General Prices,' that Professor Nicholson calls especial attention in his preface. . _. • J- he argu- ment is extremely ingenious, and places before us in a remarkably vivid manner the possibihty of the effect of the recent fluctuations m the exchanges between India and England and other gold and silver- using countries being world-wide." — Athenaum. "In the essay, 'The Treatise on Money,' Protessoi; Nicholson attempts to ' recast the general principles of mone'ary -science.' We can congratulate him most heartily on the success of his attempt. He has expressed himself with admirable clearness and candour, and the concluding chapters, in which he discusses ihe relation of the quantity of money to general prices . . . seem to us to contain the best exposition of the subject that we remember to have seen." — Journal of the Boyal Statistical Socieltj. " For the purpose for which it is designed this ' Treatise ' is admir- able. To any one who seeks for a cltar, straightforward, and fair- minded statement of the bi-metallist position, we cordially commend this work. In no other work with which we are acquainted is the case so clearly put and so fairly argued," — Saturday Review. " However opinions may differ on some of the points dealt with, it is clearly and aptly illustrated, and its perusal may be recommended to intending candidates for our examinations." — Journal of the Insti- tute of Bankers. " The beginner will find this little ' Treatise ' more compact, lucid, and interesting than any other of its kind that we are acquainted with." — Westminster lieview. " One half of Professor Nicholson's volume is taken up with a short Treatise on Money, the best elementary exposition we have seen of those monetary doctrines which are generally accepted. The other half of the volume is controversial. . . . Professor Nicholson's luminous statement of bi-metallic doctrine will create no small stir among the large classes whom depression has brought to their wits' end."— Pa;; Mall Gazette. "Whatever the issue of Professor Nicholson's contentions, and even if the cause which he has so ardently supported is doomed to failure, it will still be true that he has made a splendid fight for it ; aud that, if ti-metallisin could have been defended, it would have been by him." — Academy. " Mr. Nicholson's work deserves to be read with attention. The subject is one in which all are more or less interested." — Morning Post. " Few works of the kind are written in a style so attractive and so well calculated to arrest the attention and fix in the mind the author's ideas. . . . The work is one of unusual merit and value, and will be accepted by numerous classes of thinkers as a handbook on money and cognate topics." — Bullionist. " Professor Nicholson has succeeded in explaining to the man in the street the group of questions upon which he writes, and the reader may safely accept him as a cautious guide." — Echo. " The author contrives to make a subject, which is usually con- sidered typically arid and repellent, not merely tolerable, but posi- tively refreshing, from the clearness and simplicity of his style." — hlectrician. " The ' Treatise on Money ' gives a fair view of the chief arguments on both sides. . , . Written with abundant clearness. . . The hookas a whole is eminently readable." — Scotsman. "Professor Nicholson has already distinguished himself as a fresh aud vigorous thinker on economic subjects, and many portions of his latest work on monetary problems will fully sustain his justly high reputation." — Glasgow Hemld. "All will find in it much stimulating and profitable reading." — Scottish Leader. " The writer has not only a thorough mastery of the principles of economic science and economic history, but has also a considerable acquaintance with practical business. Searchers after light upon this question cannot be directed to a better source than the book just oppoi-tuuely published."— J/a7ic/,estjf«f^i - - , . ■•■■'; :< ■•■ ■ ■ <;!, r, >;•'*•, 'j>>n',t , •.' ' "' ;