The record-union., 1894-08-02
CLosING quotations.
THE ETHICAL SCHOOL.
What It Claims About Wages-The
Fallacy Of it Shown.
New York Evening Post.l

New York Evening Post
The gist of what used to be known as
the "wages-fund theory was that wages
were paid out Of previously accumulated
capital. 1t was further laid down that at
any particular time the amount of capital
intended to be applied to the payment of
wages was a fixed quantity. 1t followed
from this that whatever tended to in
crease the amount OF capital applicable in
this matter was good thing for those
who earned their living by selling their
labor Provided their numbers did not
increase in the same proportion as capital
their wages necessarily would increase.
1t was also cOrouary that whatever in
duced the people to devote large part of
their wealth to productive enterprises
was advantageous to the working classes.
The expectation OF profit, therefore, was
the mother of wages.
When the ''ethical school" took hold of
political economy, the first thing they
attacked was the wage-fund theory, and
they succeeded, according to their state
ments, in exploding" il. 1t was too
mathematical in character for sentimental
purposes. They said that all the theory
amounted to was the identical proposition
that with certain dividend and certain
diyisor you will get a certain quotient.
Instead OF this dry and heartless way OF
looking at things, ,sthey proposed to es-
tablish an industrial partnership" be-
tween the workman and the master, in
which the profits were to be divided in a
more equitable manner than of old. The
scientific basis assumed for this partner
ship was found III the doctrine that the
workman's wages came out of the product
OF his industry. Thus, if a man was
hired 10 build boat, certain portion OF
the boat, as fast as ii was constructed. be-
came ethically his, as the embodiment oi
his labor. In other words, workmen
were rightfully entitled to share in the
profits OF their labor; ana when this doc
trine became diffused among them
which it naturally did with great ra.
1 pidIty-they at once felt that they were
! suffering great injustice because their
share was not larger.
The weak spot in the new theory was
always the possibility of there being nc
( profits, and we have never been able to
/ discover that the ethical professors were
willing to explain how this difficulty
! could be overcome. But the strike of the
/ Pullman workmen throws the whole mat.
/ ter into the clearest light. The Pullman
! Company asserted positively that it was
making no profits at all. even after it had
reduced wages, and that therefore it wonlo
! not raise wages. But the workmen sale
] that that made no difference: that if ths
/ company could not pay wages out of its
! future profits, IL must pay them cut OF it:
4 past profits. These profits had either
I been fixed in the business or had beer
distributed to stock holders as dividends
( but that did not affect the demands of th,
workmen. Wages, they had been told
came out OF profits. and they no doub
thought it immaterial whether these wer,
present, past, or future.
In this, 1t must be admitted, the work.
men exceeded their instructions; bu
this only makes 1t clearer how impracti
cable the theory of those instruction:
men naturally hy back to what is no
only the common-seHse view, but alst
the sctual and necessary fact, that wages
are paid out OF accumulated capital M
doubt wages are paid because the cnpital-
ist expects to make profit by paying
them; butthey must be paid in adYanc'
OF tie profit; before II Is certain that any