Year: 1874

In truth, Prof. Walker has something new
to say, and something very important to be
said; although, in our Judgment, he does not
successfully accomplish the precise thing
which he undertakes to do-which is, to
break down the law of wages as it has been
stated by most English and American econo-
mslts. That law is, for substance ofdoctrine,
thls: That there is in every country, for each
business season, certain aggregate portion
OF capital destined in the minds of its owners
for the payment of wages, which may be
called wages-fund; and that, so far as there
is current rate OF wages in that country for
that season, that rate is determined by a di-
vision of this wages-fund by the number of
laborers then and there present at work
This so-caled wages iund is not an inflexible
fund, defnitiyey determined beforehand:
neither is it, as some have very unwisely said,
the whole circulating capital of the country:
neither is it necessarily all created before
hand, but, on the contrary, is always either
taken from or replaced by the results of cur
rent work; still for al this, which many
others have seen as clearly as Prof. Walker
sees it, there is what may be properly called a
wages-fund, whose exact limits are deter
mined, as all other values are determined. by
the minds OF men, and the division of which
among those who compete to share it con-
stitutes the general rate OF wages.


To deny this is, virtually, to deny the law
OF supply and demand, since such wages
fund constitutes the only demand for labor
and must exert controlling influence over
the price of labor, which is the rate of wages;
is to deny that hope or fear on the part of
capitalists influences the current rate OF wages
through an influence exerted ON destined
wages-fund; and also to deny that drafting
laborers into an army in the field, or their
wholesale emigration into other countries,
will not, other things as before, lift the rate
of wages in that country.


Professor Walker affirms that this law. IL
true, proves that whatever is in wages is
right. Not at all does that follow. The law,
If true, proves that whatever il, in wages,
will continue, till there is some change either
in the wages-fund or in the number OF the la
borers. But the wages-fund tends to in
crease by all improvement in the general pro-
ductiveDess of labor and capital, by all pro-
gress of the laborers in intelligence and efii-
cheney, and even also by all use of labor-say-
ing appliances; and the best parts of this very
address are those which display the intimate
connection between moral Considerations and
economical progress. 1t is conclusively
shown that credit plays an important part in
wages; it is also conclusively shown that
profits might sometimes share more literally
with wages the joint product of capital and
labor, since that is nothing more than to say
that the wage-fund might sometimes be larg-
Cl tudu ~ 10 WituOub WOlhiuS dDJ ulSCOuld1t-
meDt to capital; but nothing is said to weak
en- De Qlincey's admirable proposition that
profits are the leavings of wages;'' and
nothing is said to fundamentally weaken, as
we look at it, the law, important, if true, that
the current rate of wages is the result of
division.


Capital is any product outside of man him.
self reserved for further production. The
wages-fund, of course, is entirely capital.
Tho r1 for ha ahcfip inv -.
use of capital is profits. But capital cannot
maintain itself as such without being con-
stantly united with labor. The presence of
capital anywhere is itself a demand for labor;
and the more capital there is anywhere the
greater is the demand for labor. If, In the
division between profits and wages at the end
of any industrial cycle, profits get more than
their due share, these very profits will wish
to become capital and will thus become an
extra demand for labor, and the next wages
fund will be larger than the last. If capital
gets a relatively too large reward, nothing can
interrupt the tendency that labor shall get in
consequence of that larger reward the next
time. The absolute dependence of capital
for its continuance and increase upon labor is
not emphasized in this address as we think it
ought to belin a radical discussion of the
wages question; and the results are less sound
and satisfactory than they would have been
if this principle had been kept steadily and
prominently in view.


If capital takes an undue advantage of
labor at any point, as unfortunately it some
times does, somebody at some other point
has in consequence of that a stronger desire
to employ laborers; and so the wrong tends
to right itself. This is the great conserva-
tive force in the relations of capital to labor.
God has appointed it, and man cannot
abolish it. The principle is equally impor-
tant, conversely applied. If labor at any
point obtains an undue advantage over capt.
tal,as it unfortunately does, by means of strikes
and otherwise, somebody at some other point
feels in consequence less desire to employ
laborers, and the temporary advantage be-
comes disadvantage to laborers. Labor and
capital are copartners, and any attempt on.
the part of either to overreach the other
weakens the firm and lessons the business
done.


Prof. Walkers definition of profits Is not
clear, inasmuch as he does not distinguish
the two distinct elements in gross profits,
namely, that part that is due to supervision
and management, which is in reality wages;
and that part that is due to mere abstinence,
which alone is strictly profit. If it be allowa-
BILE to say it, we will venture mcst kindly 10
say it, that the author of this excellent ad-
dress, excellent taken as whole, will never
do for political economy all that he is obvious
ly capable of doing for it, all which what he
has already done gives abundant promise of,
this very address in its acumen foreshadows,
until he takes greater care with his funda-
mental conceptions and definitions. In one
word, he is not throughout so clear as so able
thinker is bound to be.