Supply and Demand eBook

This eBook from the Gutenberg Project consists of approximately 178 pages of information about Supply and Demand.

Supply and Demand eBook

This eBook from the Gutenberg Project consists of approximately 178 pages of information about Supply and Demand.
should be so associated far more closely than in fact they are.  They are also associated with differences of remuneration even within the same occupation; “what should be” here is a question which we may excuse ourselves from discussing.  The principle which, however vague, is sufficient for our present purpose is that the same natural ability should command the same reward in all occupations, subject to differences which should not exceed the differences of educational cost and initial waiting they involve.  We cannot assert, as an economic law, that this is generally true in fact.  If ever it becomes true, it will be due not to “laissez-faire,” or “free competition,” but to social arrangements, which express a sense of what is right.

Sec.7. The Apportionment of Labor among Occupations.  When we pass to the apportionment of labor among different occupations in the same social grade, the same principle as to “what should be” applies in a simpler form.  Equal natural ability should command an equal reward in all occupations; assuming that differences in cost of training can be ignored.  The reward must, of course, be interpreted not in terms of money only but of “real wages,” with allowance for the varying amenities of different tasks.  Now it was here that the extreme advocates of laissez-faire made one of their cardinal mistakes.  They assumed that this ideal would be best secured by “perfect competition.”  The employer would choose the worker who would come for the lowest wage; the worker would choose the employer who would pay him the highest wage; and so, by a process similar to the higgling of a commodity market, the desirable uniform wage-level would become established.  But in fact the conditions of the labor market differ greatly from those of a commodity market.  People are ignorant, do not look ahead, cannot afford to risk the loss of a job, however wretched, which they happen to have got.  For reasons such as these, a considerable departure from laissez-faire is necessary in order to realize the theoretical results of laissez-faire.  To prevent the putting of boys in large numbers into “blind alley” occupations, you must supplement the foresight of parents with Juvenile Employment Exchanges and After-Care Committees.  To secure a proper uniformity of wages within the same occupation, you must have trade unions.  To secure a proper uniformity between different occupations, you must have again trade unions, or, failing them, Trade Boards.

That the actions of trade unions are very largely of this type is a fact insufficiently appreciated by the middle-class public.  The elaborate system of piece-rate lists which has been evolved in the Lancashire cotton industry is primarily designed to secure the same wage for workers of equal efficiency in all mills, irrespective of the degree to which the machinery is antiquated or up to date.  This result is wholly to the good:  not only does it

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Supply and Demand from Project Gutenberg. Public domain.