CHAPTER XIV. THE CAUSES WHICH AFFECT THE RATE OF WAGES. THE doctrine of the English economists respecting wages may be easily inferred from their two theories, which have just been considered, respecting population and rent. Putting aside the consideration of wages reckoned in money, as these are subject to merely nominal variations, according as the value of money rises or falls, they say that wages rated in commodities, or the quantity of produce apportioned to each laborer, is determined by the ratio which the capital of the country bears to its laboring population, or to the number of those who work for hire. By capital, however, they here mean "only circulating capital, and not even the whole of that, but the part which is expended in the direct purchase of labor. To this, however, must be added all funds which, without forming a part of capital, are paid in exchange for labor, such as the wages of soldiers, domestic servants, and all other unproductive laborers."* The aggregate of capital or wealth devoted to this purpose, to the payment of productive or unproductive labor, may be termed the wages-fund of a country; and the share of it which each laborer receives will evidently be determined by its amount, compared with the whole number of persons seeking employment. Thus explained, the doctrine is a mere truism. We obtain no insight into the causes which regulate the rate of wages, when we are merely told that this rate depends upon the whole sum annually expended for wages, divided by the whole number of persons who share this sum among them. But as it is intended to be understood, this proposition is merely a covert statement of the theory of Malthus. Assuming it to be impossible, by any measure of legislation or government policy, to increase the aggregate funds employed in hiring laborers, it is affirmed that a "diminution in the number of competitors for * J. S. Mill's Political Economy, Vol. I. p. 401. hire" is the sole means of raising wages, and that the power and responsibility are thus placed in the hands of the laborers themselves. If they will refrain from overstocking the labor market, their condition as a class may be bettered; but "every scheme for their benefit, which does not proceed on this as its foundation, is, for all permanent purposes, a delusion." "It is impossible," continues Mr. Mill, "that population should increase at its utmost rate without lowering wages. Nor will the fall be stopped at any point short of that which, either by its physical or its moral operation, checks the increase of population." Here is the great mistake of confounding the undue relative number of a class, with a general excess of the whole population. The former evil might be corrected by portioning out society anew, through the gradual influence of altered laws, so that the divisions or castes which are too thin in number, might be recruited from those which are in excess, and the proper balance be thus restored without the necessity of adopting any measures which would affect the bulk of the people. The latter evil, if it ever really existed, could be removed only by war, pestilence, famine, or a general adoption of the doctrine of Malthus. If it were as easy in England as it is in this country for a common laborer to become a master-mechanic, or a small tradesman, or to buy a farm; or if, as in most countries on the Continent, the bulk of the laboring community possessed either peasant properties, or a kind of prescriptive right to farm the land of another "on shares," as métayers, there would be no need of preaching abstinence from marriage to them; they would not compete with each other in the labor market, if the rate of wages were not high enough to tempt them to forsake their independent occupations. The number of persons in Great Britain who are entirely dependent on the wages of hired labor is unquestionably much too great; the proportion of this class to the whole people is probably five times as large as in any country in Continental Europe. Diminish their number, then, by all means. But how? The Malthusian economists assume that the only mode of effecting this end is to check the natural growth of the whole population, to lessen the yearly average of marriages and births. But would it not be equally effectual, and more practicable, to re cruit from them the classes which are strikingly deficient in numbers, and thus restore the proper balance of society? It is certainly an anomaly and an evil, that more than half of the people of Great Britain should be hired laborers, who have neither capital nor land; but it is equally anomalous and injurious to the welfare of the whole nation, that only about 60,000 persons should own nearly all the land, and less than 300,000 possess four fifths of the whole property, both real and personal. If the greater part of the hired laborers in England could be converted into peasant proprietors, we should hear no * Samuel Laing, Esq., the distinguished traveller, tells us that "the class of landed proprietors in Scotland does not, it is said, exceed five or six thousand individnals"; and in Ireland, before the recent proceedings of the Commission for the Sale of Encumbered Estates, The Times newspaper, with the best means of information, estimated the number of landholders at only eight thousand. If fourteen thousand persons own all Scotland and Ireland, it may seem extravagant to admit that there are as many as 46,000 proprietors in England and Wales. But this number includes many who own only small lots of land, sufficient for a residence and a garden; and also a few "statesmen," as they are called, in Cumberland county, who cultivate their own little farms, and are the small remains, every day diminishing in number, of the ancient "yeomanry" of England. Undoubtedly, far the greater part of the land devoted to tillage is owned by a much smaller number of persons than is here allowed. M. Léonce de Lavergne, who will not allow that property in England is so much concentrated as is commonly imagined, admits that "a certain number" of proprietors, "at most 2,000, possess among them one third of the land and total revenue; and of these 2,000, there are 50 having princely fortunes. Some of the English dukes possess entire counties, and have a revenue of millions of francs." These 2,000 families, he estimates, possess 25,000,000 acres of land, and £20,000,000 of income. The whole number of acres in the three kingdoms is 78,000,000; so that 2,000 persons own nearly one third of the land in the British Isles. According to the census of 1851, those who returned themselves as “landed proprietors," for all Great Britain, were less than 20,000 males and 15,000 females. Of course, some were owners of land who did not return themselves in the census as such, but under the head of some occupation, as barristers, physicians, officers in the army or navy, &c. On the other hand, the rank and social importance attached to the ownership of real estate probably induced many to class themselves among the "landed proprietors," though they did not own more than a house and garden. The whole number of separate farm-holdings in Great Britain, according to the census of 1851, is 285,936. If we allow an average of six farms to an estate, which is little enough, as many noble proprietors count their tenants by fifties, we have less than 48,000 land-owners for all England and Scotland. The estimate that less than 300,000 persons own four fifths of all the property, both real and personal, is rather vague; but as Mr. Farr, the eminent actuary, in his evidence before a committee of the House of Commons, computes from the returns under the Income Tax that there are but 236,000 persons in Great Britain who possess an income of £200 or upwards, the estimate probably errs only on the safe side. more complaints about the lowness of wages, or the over-populousness of the country. The true mode of raising the rate of wages is to alter the relative numbers of employers and employed, not to diminish the total population. According to the English theory, however, there are certain limits to the extent to which wages may be reduced. "The cost of producing labor," says McCulloch, "like that of everything else, must be paid by the purchasers. The race of laborers would become extinct, were they not supplied with the food and other articles sufficient, at least, for their support and that of their families. This is the lowest limit to which the rate of wages can be permanently reduced; and for this reason, it has been called the natural or necessary rate of wages. The market, or actual, rate of wages may sink to the level of this rate, but it is impossible it should continue below it. It is not on the quantity of money received by the laborer, but on the quantity of food and other articles which that money will buy, that his ability to maintain himself, and rear children, must depend. Hence the natural or necessary rate of wages is determined by the cost of the food, clothes, fuel, &c. required for the use and accommodation of laborers. And though a rise in the market or current rate of wages be seldom exactly coincident with a rise in the price of necessaries, they can never, except when the market rate of wages greatly exceeds the natural or necessary rate, be far separated. However high its price, the laborers must always receive a supply of produce adequate for their support; if they did not obtain thus much, they would be destitute; and disease and death would continue to thin the population, until the reduced numbers bore such a proportion to the national capital as enabled them to obtain the means of subsistence." The standard of natural wages, however, does not always mean the smallest amount of food and other necessaries that is absolutely requisite to preserve the lives of a laborer's family. As we have seen, what are accounted necessaries in one country, may be esteemed in another the decencies, and, in a third, the luxuries, of life. In England, the custom of the country requires that the laborer should have beer; his family, tea; and all must have daily provision of bread, and occasionally taste meat. Only in Ireland, before the recent exodus, was the standard of natural wages generally reduced to the cost of the absolute necessaries of existence, to a few potatoes and a little buttermilk, the scantiest provision of the coarsest and cheapest food that would support life. In such case, of course, no retrenchment is possible; and whenever a partial failure of the crops, as in 1847, or any other adverse circumstance, produces the slightest enhancement of the price of these necessaries, the laborer must starve, if public munificence does not come to his relief. But in England, if wages are temporarily reduced, or if food for a short time be of higher cost, the working classes can dispense with meat, beer, and tea, and still subsist. But the standard of living being established by long custom, the laborers will not submit, or need not submit, to such a reduction of their comforts as a permanent arrangement, but will rather throw themselves, or their families, upon the poor laws for support. Hence the importance which is attributed by the Malthusian Economists to the preservation of as high a standard of living as possible for the laboring classes. Those who work for hire, they argue, are themselves to blame, if, in their eagerness to burden themselves with families, they submit to lower wages and a poorer style of living than that established by their forefathers; they must blame themselves if they do not even take advantage of a temporary increase in the demand for labor, or a temporary reduction in the price of food, to improve their condition permanently, by refusing to go back to the low wages and diminished comforts of their former life. "Unfor tunately," says Mr. J. S. Mill, "this salutary effect is by no means to be counted upon; it is a much more difficult thing to raise, than to lower, the scale of living which the laborers will consider as more indispensable than marrying and having a family. If they content themselves with enjoying the greater comfort while it lasts, but do not learn to require it, they will people down to their old scale of living. If, from poverty, their children had previously been insufficiently fed or improperly nursed, a greater number will now be reared, and the competition of these, when they grow up, will depress wages, probably in full proportion to the greater cheapness of food. If the effect is not produced in this mode, it will be produced by earlier and more numerous marriages, or by an increased |