Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-13
By ROBERT s. BROOKINGs,
President OF the Institute Of Economics.

Fresluent OF the INSTITUTE Oh Economics
Within the short period of a decade
or two we have developed in this coun-
try a change in the relation of ca pital
TO labor which enormously broadens
the influence and effects Of our tariff
and immigration laws.
The development of the economic
efficiency of this country, which has
resulted in what is known as "big
business" or large corporations, whose
securities are widely distributed
among investors, has so divorced own
ership from management as to dis
tinguish more clearly between the con-
tributions which capital, management,
labor and the public each make to
production.
AS q result we have developed a re-
lation between capital and labor under
which capital is recognized as a com.
modify entitled to such COMPENSATION
for it's use, risk considered. as the
money market may determine from
time to time, just as other commodi-
ties find their value in the marke.
price regulated by supply and demand
New Theory Of Wages.
Under this development it has be.
come practically a national policy
with us to favor a wage sufficiently
higher than the subsistence needs of
the workers to enable them to accumu-
late a reserve, which is gradually con.
verting the great mass Of our people
into part owners of the Nations in.
dustries, or what might be called the
capitalistic class. BY many corpora.
tons the thrift or saving habit of the
people is being promoted by various
schemes assisting the worker to be-
come a stakeholder.
1t must be perfectly obvious that
this relation of capital to labor could
not be maintained if we permitted
the unlimited flow of either labor or
labor's products into our country.
Hence we have the tariff and immi.
grafton laws. 1t is, however, prac-
tically. impossible for us, with our
machinery Of government as at pres
ent developed, to formulate tariff
schedules which do not seem unwisely
to favor certain interests at the ex-
pense of certain other interests.
Even If we had before us all the
facts which would enable us to de.
velop comprehensive national
policy. securing as nearly as possible
equality of opportunity for all of our
numerous working groups, we should
still have difficult problem to solve.
| But when the tariff is made the foot
ball of politics, as at present, it is
not strange that it has become our
most controversial subject.
Proposal for Subsidies.
The controversy has recently cen
! tered into a discussion which more
especially involves the relation of the
agricultural group to the manufacture
| ing, transportation, mining and num-
erous other groups 1t has been sug.
gested that the way to equaliZe certain
! inequalities developed by the tariff is
for the Government to subsidiZe
those interests which are apparently
Disseminated against. 1t is believed
by most economists. however, that
any form of subsidy which places a
| direct premium on the production of
an article is fundamentally unsound
| as 1t ignores certain basic laws OF
supply and demand and acts as an i'm
pediment to the development of eff
| cheney 1t also opens a door to SINH
lar appeals without number. The SO
luton Is not in such suggested iegis
| lation, but will be found in placing
the tariff on a scientific basis.
The Institute of Economics has pub
lished a number Of books dealing with
the making IF a. tariff and, more spe