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8: Of Wages - Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship [1776]

Edition used:

Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


8

Of Wages

A merchant has made some advances. They consist in the price he gave for the things he wants to sell again, in carriage costs, in the costs of the warehouse, and in the day-to-day expenses of keeping the merchandise.

Now, not only does he have to be reimbursed for all these advances, but he also has to find a gain in carrying on his trade.

This gain is rightly what we call a wage [salaire]. One conceives that it must be made and portioned out turn by turn on all the goods he has for sale; and that it must be enough for his subsistence, that is to say to obtain for him the use of things of primary and secondary need.

But to what extent should the merchants enjoy these things? That is a matter which will regulate itself unaided, given that competition will force the merchants to live more or less economically; and since this competition will apply to all equally, we will know, in accordance with the general custom, the pleasures to which each of them can lay claim. They will calculate for themselves what wage they need for the pleasures which custom allows them, to obtain these for their families, to raise their children; and because they would have very little foresight if they were content with gaining the means to live from one day to the next, they will also calculate what they need to cope with accidents and, if possible, to improve their condition. They will try to bring all these gains into their wage. Those who would like to buy will try to beat down these gains; and they will beat them down all the more easily as an ever-increasing number of merchants will be eager to sell. The wage will be regulated on the one hand by the sellers’ rivalry, and by the buyers’ competition on the other.

The artisan’s wage will be self-regulated in the same way. Suppose that there are only six tailors in the tribe and they cannot meet the demand for clothes, they will themselves fix their wage, or the price of their labour, and that price will be high.

That is a disadvantage, and they will fall into another when the lure of gain has multiplied the tailors beyond the tribe’s needs. Then they will all find themselves reduced to lesser gains, those who have no custom will offer to work for the lowest price, and will force those who have custom to work also for a smaller wage. There will even be those who do not have enough to live on, and who will be forced to find another trade. The number of tailors will thus gradually come into line with the demand for them; and that is the moment when their wage will be regulated as it should be.

But there are trades which call for more intelligence, and trades which call for more skill; it takes more time to become skilful at them; one must bring more effort and more care to them. Therefore those who distinguish themselves at them will be authorised to demand better wages, and one will be forced to give these to them; because, as they will be few in number, they will have fewer competitors. People will get used to seeing them with a greater abundance of things of primary and secondary need; and in consequence custom will give them rights to this abundance. As they have greater and rarer talents, it is fair that they also make greater gains.

So it is that, when wages are regulated, they in their turn regulate consumption, to which everyone has a claim according to his status; and then one knows what are the primary and secondary needs which belong to each class. All the citizens do not share the same pleasures equally, but all have subsistence from their work; and though there are some richer people among them, no one is poor. There you have what happens in civil society, where order establishes itself freely, according to the particular and combined interests of all the citizens. Note that I say freely.

If I have only spoken, in this chapter, of the wage due to the artisan and the merchant, it is that by showing how prices regulate themselves in the market place, I have given a sufficient explanation of how the farmer’s wage is regulated. It will do to note here that all the citizens [apart from those of the landowners who do nothing: 1798] are given a wage with regard to each other. If the artisan and the merchant are paid by the farmer to whom they sell, the farmer is in his turn paid by the artisan and the merchant to whom he sells, and each of them gets paid for his work.