The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction.
• Biographical and Critical.
• Author’s Preface to the First French Edition.
• Author’s Preface to the English Edition.
• Book I.: Evolution and Retrogression.
• Chapter I.: Social Retrogression.
• Chapter II.: Socialist Programmes.
• Chapter III.: Character of Political and Intellectual Progress.
• Chapter IV.: Character of Social Progress.
• Chapter V.: The Evolution of Property.
• Chapter VI.: Doctrinal Contradictions of the Socialists.
• Chapter VII.: Practical Self-contradiction of the Socialists.
• Book II.: Socialistic Sophisms.
• Chapter I.: Labour and Wealth.
• Chapter II.: On the Limits of Collectivist Society.
• Chapter III.: The Law of Supply and Demand.
• Chapter IV.: The %u201ciron Law%u201d of Wages.
• Chapter V.: Integral Wages.
• Chapter VI.: To Each According to His Needs.
• Chapter VII.: The Abolition of Wages.
• Chapter VIII.: Machinery.
• Chapter IX.: Excessive Production.
• Chapter X.: Economic Crises.
• Chapter XI.: Cheapness.
• Chapter XII.: The Game of the Gullible.
• Chapter XIII.: Socialistic Methods.
• Chapter XIV.: Facts Compared With Socialist Statements.
• Chapter XV.: Redistribution of Wealth.
• Book III.: Socialistic Legislation.
• Chapter I.: Putting Socialistic Sophisms In Force.
• Chapter II.: The Regulation of Child Labour.
• Chapter III.: Female Labour and the Law.
• Chapter IV.: Compulsory Idleness of Lying-in Women.
• Chapter V.: National Labour and Foreign Workmen.
• Chapter VI.: Trade Syndicates.
• Chapter VII.: Registry Offices.
• Chapter VIII.: Nature of %u201clabour Laws.%u201d
• Book IV.: Socialistic Morality and Respect For the Law.
• Chapter I.: Contempt For the Law.
• Chapter II.: Servile Labour and Free Labour.
• Book V.: Strikes and Social War.
• Chapter I.: Cost and Consequences of Strikes.
• Chapter II.: The Causes of Strikes.
• Chapter III.: During the Strike.
• Chapter IV.: Social War.
• Book VI.: Responsibilities.
• Chapter I.: Parliament and Strikes.
• Chapter II.: Subsidies to Strikers.
• Chapter III.: The Executive, the Judicature, and Strikes.
• Chapter IV.: Liberty and Anarchy.
• Chapter V.: The Socialism of Employers.
• Chapter VI.: Militarism, Protection, and Socialism.
• Conclusion.

CHAPTER XIV.

FACTS COMPARED WITH SOCIALIST STATEMENTS.

Surplus Labour and the Salting Works at Chicago—Profit and Loss in Mines—Overproduction and Fall in Wages—The Iron Law and Comparison of the Rates of Wages—The Iron Law and the Fall in Price of Useful Goods—Progress of Wages—Metallurgy—Cotton Goods—Miners—Shortening of the Hours of Labour—Textile Industry in Italy—Table of Rates of the City of Paris and Equality of Wages—Increase of Comfort—Bastiat’s Law—Mr. Atkinson—Law of Labour.

KarlMarx asserts that capital is only the product of surplus work:1 and that consequently all capital has been stolen from the labourer.

In an examination made by the Labour Bureau of the State of Illinois, of twenty-six industries representing two-thirds of the capital and workmen employed in that State, they have established the connection between the wages of the workmen and of products.

It is found that for 54 salting-houses, representing 53 millions of capital, and employing 10,212 hands, the gross returns are 46,060 francs, as against 1,930 francs wages.

Socialists of the school of Lassalle will not fail to exclaim that this difference between the gross returns and the wages of the workmen, shows all the surplus value of labour by which the master profits.

To this lovely argument there is only one drawback, and here it is:—

These salting works show, not a profit, but a loss of more than 6 millions, which, per workman, may be assessed as follows:—

The famous surplus value is here a minus value; and in how many industries is not this the case?

In 97 flour-mills, we see the same phenomena. Wages, 2,655 francs; gross returns, 64,250; but deduction being made for raw materials, wages, and other expenses, the loss is 3,400,000 francs, which, divided amongst the 1,838 workmen, represents a loss upon each man of more than 2,000 francs.

In France, when people talk of miners they imagine that in order to grow rich it is only necessary to dig a hole in the earth. But, without mentioning the abandoned grants which represent nearly two-thirds of the mines that have been worked, and which no one will now take over, it is sufficient to glance over the statistics of the Minister of Works to see how the matter stood in 1891:—

In these unprofitable mines workmen have received wages: where is the surplus work given to capital? I know a mine in the Loire, which has not only not yielded a halfpenny’s profit, but not even a halfpenny’s interest, since 1836, upon all the millions which have been swallowed up in it. Where is the surplus-work which Karl Marx and his disciples discover all over the country, feeding the vampire known as capital?

In 1892, M. Lalande wrote a monograph on the porcelain and crockery manufactories of Bacalan, founded in 1782. He showed that the share of capital had been 1,100,000 francs, and the share of labour 37,700,000 francs. Where is the surplus-work?

If over-production were a cause of ruin to the labourers, wages ought to have constantly fallen for the last three quarters of a century, during which time, production has been constantly on the increase. If the Iron Law of Wages were true, wages ought to have steadily fallen for the last thirty years, since the price of the necessaries of life, excepting rent, have steadily fallen.

Now, during the last few years, special inquiries have been made into the position of labourers during different periods and in different countries; and if these inquiries, invalidate, in the distinctest manner the à priori statements of the doctors of Socialism, have we not the right to put this dilemma before them: that either they are speaking in bad faith or in ignorance?

According to E. R. J. Gould’s Labour Table VIII. (January 1893, Baltimore), drawn up after a most minute inquiry into the conditions of labour in the United States and Europe, here is a schedule of the average household expenses of the working miners and metallurgists, collected together and classed according to their nationalities.1

These figures prove that the proportion for food is not the same in all countries, any more than is the proportion paid in rent, clothing, or drink. Finally, it is not true, as the last column shows, that wages remain rigorously at the rate necessary for the existence of each labourer, as the Frenchman saves 12 per cent. of his earnings, the American 10·5, the Englishman 8·1. If for the German the rate of saving falls to less than 1 per cent., what does it prove? That wages there are not so high as in the countries more advanced in economic evolution, and that though the German spends less than the American, English, or French workman, he nevertheless sees nearly the whole of his wages absorbed by the necessaries of life. If the Iron Law were true, when those articles which are the most necessary to life fall in price, wages ought to fall too.

If we look at the wholesale price of 17 articles of first necessity in England, these are the returns we find:—

Wholesale Price of Merchandise in England.

The price of the period from 1845 to 1850 is taken as 100. The figures above and below 100 show the percentage.

Now, contrary to the statements of Socialists, the nominal rate of wages has risen, and one must add to the nominal rate the increased power of purchase which has resulted from the fall in price of manufactured articles, and all articles of food, except meat.

For cotton thread and cotton fabrics, the weekly wages, producing 1093 yards (1000 metres) were, in Lancashire:—

An increase from 1850 to 1889 of 74·69 per cent.

For medium quality, the weekly wages producing 1093 yards were, for 526 persons:—

We beg to call attention to the increase of wages of the unskilled labourer: it proves how thoroughly labour is subject to the Law of Supply and Demand. The earnings of the labourers have increased more rapidly than those of other callings, because their number has a tendency to become restricted in proportion to the advance of education.

Mr. Lord, President of the Manchester Chamber of Commerce, has established the following proportion:—

Increase of Wages per cent. relatively to 1850.

This table also shows how thoroughly wages are subject to the Law of Supply and Demand. After having risen by 43 per cent., they again fell to 39·18 per cent. when trade was slack.

In France, Parliament is overwhelmed with complaints from miners. In spite of this, we see agricultural labourers go unceasingly to swell their numbers, which have increased by 11,000 from 1890 to 1891.

Working miners, underground and on the surface, earned:—

The increase is therefore close upon 100 per cent. in 47 years. And this figure is too low, because it mixes up the underground labourers with those on the surface, and the wages of those underground are 4 fr. 62. The rate of money wages per ton of coals was, in 1885, 5 fr. 39. In 1890 it rose to 5 fr. 62, and, in 1891, to 6 fr. 09. In Germany, during the last fifteen years, wages have risen from 75 to 150 per cent.

To the increase of money wages, and to the ease with which workmen can now obtain more articles for the same money, must be added the reduction of their hours of labour. Mr. Robert Giffen estimates that in England it must be reckoned as additional increase of 20 per cent. on wages. He showed, in 1884, that the same man who fifteen years ago, after having paid his rent, had a balance of 15s. per week, now has a surplus of 27s. 6d.

M. Bodio has made the following calculation relating to the workers in the textile industries of Italy:—

Annual Table of Italian Statistics, 1887–1888.

The members of the Tours Congress demanded equality of wages. The workmen of Paris, who demand the application of the graduated scale, do not desire this. Here is that scale, with its inequalities:—

The Graduated Scale of the City of Paris.

If we glance at certain figures which show our economic progress, we see that the “iron law” has never ceased to leave an ever-increasing margin between the needs and the resources of the labourer.

In England, the figures of imports and exports combined, which from 1855 to 1859 stood at 275 francs per head, had increased from 1885 to 1887 to 435 francs, thus rising more than 54 per cent. In France, the consumption of meat, which in 1812 was 17·16 kilog. per head, had reached to 33 kilog. in 1882. The consumption of cotton per inhabitant was 1·80 kilog. in 1849, and 1·31 kilog. during the period from 1889–1891. Wool had passed in the same time from 4·624 kilog. to 5·509 kilog.

These are not signs of misery and decay such as are announced so clamorously by the seers of Socialism. When we compare the present mode of living among workmen, with that of only thirty years ago, their clothes, shoes, the women’s dresses, even down to the very appointments of the table, there is no honest person who will not recognise and admit the progress that has been made. In short, the working man gratuitously enjoys all the fruits of progress, and he can, for a few halfpence, by entering a railway train, give himself the luxury of a journey at speed, to which Napoleon at the height of his power could not attain. Machinery works for him. Whilst he watches it, it supplies a want which would have required the labour of twenty men. Instead of himself labouring, he simply directs it. The muscles which were formerly his instruments of labour, are now only the supports of his intellectual activity.

So far from facts having confirmed Lassalle’s imagined law, it is the law that Bastiat formulated in the following manner, which has been distinctly confirmed:—

“In proportion as their capital grows, does the actual capitalists’ share in the total product increase, whilst their relative share diminishes. The workmen on the contrary see their share increase in both senses.”

Mr. Atkinson, in a book based on some monographs on implements, in the United States, and published in 1884, has demonstrated the truth of this law. In a very striking diagram he points out that the tendency of wages is towards a maximum, and the tendency of profits towards a minimum. There have, no doubt, been fluctuations, the results of crises. A tendency towards a fall in money wages showed itself from 1883–1885; but if workmen lost thus, the purchasing power of their salaries having been increased by the general fall in prices, they were in reality better off than they had ever been before.

In a word we may conclude:

Man is a fixed capital, obeying the law of the relative value of fixed capital and circulating capital. The value of man is in proportion to the power of his tools. His value increases in proportion to the amount of circulating capital and to the power of fixed capital.

The price of labour is in direct proportion to the abundance and cheapness of circulating capital, the value, power, and total income from fixed capital, and in inverse ratio to the rate of income.

[1]That is, work which, as he contends, has not been paid for—Ed.

[1]I shall not reproduce the statistics which have been published by numerous writers, and by myself, in numerous documents. I take the actual figures in the paper which Mr. J. S. Jeans used before the London Statistical Society, in May, 1892; in that which Mr. Robert Giffen read before the same society, in 1888, upon Prices and Income; in M. Maurice Block’s book upon l’Europe Politique et Sociale; and in The Social Condition of Labour, by Mr. E. R. J. Gould, Lecturer on Social Science in the John Hopkins University; and in the last inquiries. The dollar is calculated at 5 francs 20 centimes.