Sec. 14. #The wage-system.# Viewed in another aspect the present economic and social order is called the wage-system.[9] The wage-contract, like the use of money, is not essential to the existence of a system of private property.  Communities such as the American colonies and as many of the newly settled states, may consist almost entirely of self-employed owners of land.  Bulgaria, before the Balkan wars called the peasant state, presented this organization (tho of course with some wage-payment), as did also its neighbor Serbia.  But given the institution of private property with competition (freedom to buy and sell), let manufactures and commerce develop to any extent, and inequalities of fortunes increase while an increasing number of persons work for wages.  It is noteworthy that as this goes on (as it has done in America at an increasing rate since the middle of the nineteenth century) it is the agricultural and rural hand industries that continue to be mainly worked by owner-managers and workers, while it is the manufacturing, transporting, and large commercial enterprises in which the labor is done for wages.  The acceptance of the wage-system thus far has been the inevitable price to be paid for manufacturing and industrial development; and one of our economic problems is to determine whether this must continue, and if so, whether in the same measure as in the past.

[Footnote 1:  The exceptions are probably unstated amounts of exempt real estate (owned by municipalities, state, and nation), some of the irrigation plants, part of the canals, and that part of the gold and silver which is in the public treasury.]

[Footnote 2:  See Vol.  I, pp. 264-267.  The law makes between property rights and equitable rights some subtle distinctions, which have their reason in the history, if not in the logic, of the law but which are not essential to economic discussion.  In some states this distinction has been in large measure abolished.  What interests us are the rights (claims) that men have to the control of wealth and services, whether by technical law these are called legal or equitable, and this right is what is meant by “property” in our discussion of it.]

[Footnote:  3 This confusion has had important practical consequences in the field of taxation.  See Vol.  I, pp. 265-267, and below, ch. 17.]

[Footnote 4:  These claims mutually delimit each other (whether they be called equitable claims, or liens, or property rights), and wealth is not multiplied by multiplying the claims, as is unfortunately sometimes assumed to be the case.  See above, sec. 3.]

[Footnote 5:  See Vol.  I, p. 51.]

[Footnote 6:  See Vol.  I, p. 73.]

[Footnote 7:  This will appear in comparing the competitive method of distribution with other methods in ch. 31.]

[Footnote 8:  See Vol.  I, p. 143, on medieval land tenures; p. 158, on customary rents; p. 190, on the effect of caste.]