Page:Encyclopædia Britannica, Ninth Edition, v. 24.djvu/331

Rh 307 history in the reigns of Henry VIII. and Edward VI. Prof. Thorold Rogers has ascribed much of the degra dation of labour which ensued to this fact ; and Lord Macaulay has given a graphic account of the evils suffered by the labouring classes prior to the recoinage of 1696. The issues of inconvertible paper notes in excess have frequently caused a disturbance of real wages, and it is generally asserted that in this case wages as a rule do not rise so quickly as commodities. A general rise in prices due to great discoveries of the precious metals would, if nominal wages remained the same, of course cause a fall in real wages. There are, however, good grounds for suppos ing that the stimulus given to trade in this case would raise wages at least in proportion ; and certainly the great gold discoveries in Australia and California raised wages in England, as is shown in Tooke s History of Prices, vol. v. p. 284. Similarly it is possible that a general fall in prices, owing to a relative scarcity of the precious metals, may lower the prices of commodities before it lowers the price of labour, in which case there is a rise in real wages. In the controversy as to the possible advantages of bi metallism this is one of the points most frequently dis cussed. It is impossible to say a priori whether a rise or fall in general prices, or a change in the value of money, will raise or lower real wages, since the result is effected principally by indirect influences. But, apart from these general movements in prices, we must, in order to find the real value of nominal wages, consider variations in local prices, and in making this estimate we must notice the principal items in the expenditure of the labourers. Much attention has been given recently by statisticians to this subject, with the view of finding a good &quot; index number&quot; for real wages. (2) Varieties in the form of payment require careful attention. Sometimes the payment is only partly in money, especially in agriculture in some places. In many parts of Scotland the labourers receive meal, peats, potatoes, &c. (3) Opportunities for extra earnings are sometimes of much importance, especially if we take as the wage-earning unit the family and not the individual. At tho end of last century Arthur Young, in his celebrated tours, often calls attention to this fact. At the present time, in Northumberland and other counties a &quot; hind &quot; (i.e., agricultural labourer) is more valued if he has a large working family, and the family earnings are relatively large. (4) Regularity of employment is always, especially in modern times, one of the most important points to be considered. Apart from such obvious causes of fluctuation as the nature of the employment, e.g., in the case of fisher men, guides, &c., there are various social and industrial causes (for a particular and able investigation of which the reader may consult Prof. Fox well s essay on the subject). Under the system of production on a large scale for foreign markets, with widely-extended division of labour, it seems impossible to adjust accurately the supply to the demand, and there are in consequence constant fluctuations in the employment of labour. A striking example, happily rare, is furnished by the cotton famine during the American civil war. (5) In forming a scientific conception of real wages we ought to take into account the longer or the shorter duration of the power to labour: the man whose employment is healthy and who lives more comfortably and longer at the same nominal rate of wages may be held to obtain a higher real wage than his less fortunate com petitor. It is worth noting, in this respect, that in nearly every special industry there is a liability to some special form of disease: e.y., lace-workers often suffer from diseases of the eyes, miners from diseases of the lungs, &c. (For further illustration the reader may consult the excellent works of Mr Bevan on Industrial Classes and Inchistrial Statistics.) Thus, in attempting to estimate real wages, we have to consider all the various discomforts involved in the &quot; quantity of labour &quot; as well as all the conveniences which the nominal wages will purchase and all the supple ments in kind. In a systematic treatment of the wages question it General would be natural to examine next the causes which rate of. determine the general rate of wages in any country at any time. This is a problem to which economists have try at given much attention, and is one of great complexity, any time. It is difficult, when we consider the immense variety of &quot; occupations &quot; in any civilized country and the constant changes which are taking place, even to form an adequate conception of the general rate of wages. At the census in 1881 in the United Kingdom, the commissioners found it necessary to make a small dictionary of the words by which different classes of workers described their callings, and without a special dictionary it would be impossible to classify such as the following : &quot; blabber,&quot; &quot; doctor-maker,&quot; &quot;fluker,&quot; &quot;egger,&quot; &quot;hirer,&quot; &quot;toother,&quot; &c., &c. There are thousands of occupations of various kinds, and at first sight it may seem impossible to determine, in a manner sufficiently accurate for any useful purpose, an average or general rate of wages, especially if we attempt to take real and not merely nominal wages. At the same time, how ever, in estimating the progress of the working-classes, or in comparing their relative positions in different countries, it is necessary to use this conception of a general rate of wages in a practical manner. The difficulties presented are of the same kind as those met with in the determina tion of the value of money or the general level of prices, and may be overcome to some extent by the same methods. An &quot; index number &quot; may be formed by taking various kinds of labour as fair samples, and the nominal wages thus obtained may be corrected by a consideration of the elements in the real wages to which they correspond. Care must be taken, however, that the quantity and quality of labour taken at different times and places are the same, just as in the case of commodities similar precautions are necessary. Practically, for example, errors are constantly made by taking the rate of wages for a short time (say an hour), and then, without regard to regularity of employ ment, constructing the annual rate on this basis ; and again, insufficient attention is paid to Adam Smith s pithy caution that &quot; there may be more labour in an hour s hard work than in two hours easy business.&quot; But, however difficult it may be to obtain an accurate measure of the general rate of wages for practical purposes, there can be no doubt as to the value and necessity of the conception in the theory of political economy. For, as soon as it is assumed that industrial competition is the principal economic force in the distribution of the wealth of a com munity, and this is in reality the fundamental assumption of modern economic science, a distinction must be drawn between the most general causes which affect all wages and the particular causes which lead to differences of wages in different employments. In other words, the actual rate of wages obtained in any particular occupation depends partly on causes affecting that group compared with others, and partly on the general conditions which determine the relations between labour, capital, and production over the whole area in which the industrial competition is effective. Thus the theory of the wages question consists of two Wages- parts, or gives the answers to two questions: (1) What fulltl are the causes which determine the general rate of wages 1 (2) Why are wages in some occupations and at some times and places above or below this general rate ? With regard to the first question, Adam Smith, as in almost every important economic theory, gives an answer which combines two views which were subsequently