Somesuchbusinessesorgroupsofbusinessespossessavirtualmonopolyofthemarket，andcancontroloutputandprices，soastosecureabnormaldividends。Suchcontrolis，tobesure，neverabsolute，itscontrolofpricesbeingsubjecttotwochecks，therestrictionofdemandwhichattendseveryriseofprices，andtheincreasingprobabilityofcompetitionspringingupifprofitsaretoohigh。Butqualifiedmonopolies，earningdividendsfarlargerthanareeconomicallynecessarytosupporttherequiredcapital，areeverywhereinevidence。Trusts，cartels，pools，combines，conferences，andtradeagreementsofvariouspotencyandstringency，pervadethemorehighlyorganisedindustries，substitutingtheprincipleofcombinationforthatofcompetition。Inallmajorbranchesofthetransporttradebylandandsea，inlargesectionsoftheminingindustry，intheironandsteelindustryandinmanybranchesofmachine-making，inmanyofthespecialisedtextiletrades，inthechemicalandothermanufactureswherespecialscientificknowledgecounts，inmanydepartmentsofwholesaleandretaildistribution，and，lastnotleast，inbanking，financeandinsurance，freedomofinvestmentandofcompetitionhavevirtuallydisappeared。Toassumethatfreshstreamsofcapital，labourandbusinessability，
　　havelibertytoenterthesefieldsofenterprise，andbytheirequalcompetitionwiththebusinessesalreadyinpossessionsotoincreasetheoutput，lowersellingpricesandkeepinterestandprofitsatabare'costs'level，isachildishtravestyoftheknownconditionofthesetrades。Toaffirmthatsuchmobilityandlibertyofcompetitionisthesolenormal'tendency'，andthatthemonopolisticandcombinativeforcesmerelyrepresentfriction，issograveafalsificationofthefactsastoputoutofcourtthewholemethodofeconomicinterpretationwhichisbasedthereon。Concretecapitalhasnoneofthequalitiesassignedtotheabstractcapitaloftheseeconomists。Itisneitherinfinitelydivisible，norabsolutelymobile，noraccuratelydirected，norlegallyandeconomically'free'todisposeitselfinanypartoftheindustrialsystemwherethecurrentinterestorprofitexceedstheaverage。Overlargetractsofindustrycombinationismorenormalandmorepotentthancompetition，andwherethisisnotthecase，themostcompetitivetradeswillbefoundhoneycombedwithobstructiveclots，businessesenjoyingspecialadvantagesandearningcorrespondinglyhighprofits。
　　§；13。Becausecertainqualitiesofbusinessabilityarerequisite，towitastuteness，keennessofjudgment，calculatingpower，determination，capacityfororganisationandexecutiveability，itissometimesclaimedthatthehighratesofprofitwhichaccruefromsuchbusinessesaswehaveindicatedarereallythecreation，notofmonopolyorcombination，butofthetalentsoftheseentrepreneurs。Buteventhoughitbeadmittedthatsomesuchabilityisessentialtoproduceortomaintainasuccessfulcombination，cantheentireprofitsofsuchacombinationbeimputedtothisabilityorregardedasitsnaturalandproperreward？Takethecommoninstanceofthe'forestaller'，whostopsthesupplyofsomecommodityonitswaytoamarket，securesthewholesupplyatcompetitivepricesfromthevariouscontributors，andthensellsitatamonopolypricefixedbyhimself。Aretheprofitsofthiscorneraproductofabilityandarewardofability，andnota'surplus'representinganartificiallycontrivedscarcityvalue？
　　Ortakethecaseofacontractingfirm，whichpersuadesalltheotherfirmsinapositiontocompetetocomeintoanarrangementastoaminimumtender。
　　Aretheextraprofitsduetosuchanarrangementtoberegardedaswagesofability，becausesometactwasneededtoworkthething？Butsupposewegrantedthewholecontention，andagreedthattheextradividendspaidtoshareholdersinfavouredorprotectedbusinesseswerereallyproducedbytheabilityoftheentrepreneurormanager，whatthen？Itisnotprovedthattheseextraprofitsare'costs'，not'surplus'。Onthecontrary，thefactthattheycanbetakenasextradividendsorbonusesbytheownersofthecapital，insteadofpassingin'wagesofability'totheentrepreneur，isproofpositivethattheyaresurplus。Foriftheywereasubsistencewageofability，orevena'prize'，essentialtoevokesomespecialoutputofskillorenergy，theycouldnotbethusdivertedfromtheentrepreneurtotheshareholders。Infact，thereisnoreasontosupposethatanyveryrareorconspicuousabilityisevincedinworkingasuccessfulpoolorcombine，oreveninorganisingasuccessfulbusiness。Stilllessistherereasontosupposethattheprofitsattendingsuchanenterpriseareinanywayproportionatetotheskillorenergyoftheentrepreneur。Everyoneisawarethatthecontraryisthecase。Indeed，sofarasscientific，professional，andbusinessabilityisindustriallyusefulandhasaclaimtoincome，enquiryshowsthatthereisnobettersecurityformobility，freedomofcompetitionandequalityofpayment，thaninthecaseofcapital。Inequalitiesofeconomicconditionsbetweenvariousclassesofourpopulation，involvinginequalitiesofnurtureandofeducation，andofeveryothersortof'opportunity'
　　relevanttothediscovery，training，equipmentandsuccessof'naturalability'，setupaseriesofalmostimpenetrablebarrierstothefreeflowofnaturalabilitythroughouttheindustrialsystem，andgiverisetoanelaboratehierarchyofrestrictedemploymentswheretheratesofremunerationrepresent，notanyinherentservicesofability，butthedegreeoftherestrictioninrelationtotheimportanceofthework。Allsuchadvantagesofopportunityarereflectedinratesofpaymentfor'ability'whichcarryelementsof'surplus。'Thoughsomeportionofthehigherremunerationpaidtosuccessfulprofessionalworkersmayberegardedasinterestuponthecapital-outlayoftheireducationandtraining，thereisnoreasontoholdthattheextrapaymentisadjustedtothecostsofthisoutlay。Stilllesscananysuchargumentavailinthecaseofhighbusinessprofits。Thoughabilityandexpensivetrainingmaybefavouringconditionstosuchfinancialsuccess，restrictedcompetitionmustbeaccountedtheprincipaldirectdeterminantofallsuchextrapayments。
　　§；14。Thereremainsonefinaldemurrertoourdoctrineoftheunproductive'surplus'。Ifyoutakeintoconsideration，itisurged，alltheunsuccessfulaswellasthesuccessfulbusinesses，youwillfindthattheaveragereturnforcapitalandforbusinessabilityislowenough，notinfactmorethanrepresentsabare'costs'economy。Similarlywiththehighincomesearnedbythefewsuccessfulmenintheprofessionsandinotherwalksoflife。
　　Setthefailuresfairlyagainstthesuccessesandthereisnonet'surplus'
　　totakeaccountof。
　　Butthiscontentionisonemoreabuseofthemethodofaverages。Tothechargethatonemanisoverpaid，itisnoanswerthatanotherisunderpaid。
　　Tothestatementthatsurplusemergesinthepaymentforsomeordersofcapitalorabilityitisnoanswertosaythatothercapitalandabilitydoesnotevengetitstrue'costs'orsubsistencewages。Theforceofthisrebuttalisstillfurtherstrengthenedwhenitisrealisedtowhatextentthesuccessofthosewhosucceedisdirectlyresponsibleforthefailureofthosewhofail。Fortheeconomicstrengthofthosewhosesuperioradvantageshavesecuredforthemapositionofcontrolwillnecessarilyoperatetomakethecompetitionofoutsidersdifficultandtheirfailureprobable。
　　Indeed，aportionofthegainswhichcombinationyieldswilloftenbeconsciouslyappliedtokillthecompetitionofoutsiders，ortorestricttheirtradetothelessprofitableorthemoreprecariousformsofenterprise。Butevenwherethisbusinesspolicyisnotadopted，theveryfactthatstrongfirmsand'combines'controlmanymarkets，must，bylimitingtheareaoffreecompetition，intensifythecompetitionwithinthatareaandsocausethefailurestobenumerous。
　　Thecontention，thattheexcessiveprofitsofsuccessfulfirmsarebalancedandinsomewaycancelledbythelossesofthosethatfail，isalsocontradictedbythepsychologyofthecase。Ifitcouldbeshownthatthechanceofwinningthesehighgainswasinfactanecessaryinducementtothewinnerstostaketheircapitalandbusinesscapacityinaninherentlyriskylineofenterprise，theremightbesomeforceinthisplea。Buttothemenwhoachievethesesuccessesbusinessisnotasimplegameofhazardinwhichtheyhavemerelythesamechanceastheothers。Successiscommonlyachievedbyforce，strategyandthepossessionofknownadvantages，andisusedtostrengthentheseadvantagesandsotoincreasecontinuouslythe'pull'bywhichtheyaccumulatetheirgainsandruintheirwould-becompetitors。Althoughtightformsofmonopolyareveryrare，looseorpartialrestrictionsuponcompetitionareverynumerousandoftenveryprofitable。
　　Alltheseextragains，issuingfromvariousformsofnaturalorcontrivedscarcityinallsortsofindustries，arerightlyclassedasunproductivesurplus。Manyofthemareasconstantandascertainastheeconomicrentsofland，ariseinthesamewayfromalimitationofsomeproductivefactor，andare'unearned'incomeinthesamesenseofthatterm。Otherofthesegainsaremorefluctuating，proceedingfromlessstableformsofprivilegeorcombination，butwhiletheyexisttheyequallybelongtounproductive'surplus。'8
　　§；15。Thedistinctionbetweenthatportionofthesocialincomewhichgoesasnecessarypaymentstosupportandevoketheenergiesofbodyandmindofwealth-producers，i。e。，costsofproduction，andthatwhichgoesasunproductive'surplus'tothosewho，possessingsomenecessaryinstrumentofproductionthatisrelativelyscarce，canexactascarcityprice，isfundamentalinavaluationofindustry。Forthissurplusnotonlyrepresentssheereconomicwaste，regardedfromthesocialstandpoint，butitcanbeshowntobedirectlyresponsible，asanefficientcause，formostofthoseparticularmaladiesinourcurrentprocessesofproductionandconsumptionwhichimpedetheeconomicandthehumanprogressofthenation。
　　Forifouranalysisofthissurplusiscorrect，itconsistsintheseizureofalargeportionofthefruitsofindividualandsocialproductiveenergies，requiredforthefullsupportandfurtherstimulationoftheseenergiesandforthewiderhumanlifewhichtheyaredesignedtoserve，andtheirassignmenttopersonswhohavenothelpedtomakethem，donotneedthem，andcannotusethem。Thepaymentofsurplustakeslargesectionsoftheincome，neededtoraisetheeconomicandhumanefficiencyoftheworking-classes，ortoenablesocietytoenlargethescopeandtoimprovethequalityofthepublicservices，anddisposestheminwaysthatarenotmerelywastefulbutinjurious。Ineffect，alltheexcessivehumancostsofproductionandallthedefectivehumanutilitiesofconsumption，whichourseparateanalysisofthetwoprocessesdisclosed，findtheirconcreteandcondensedexpressioninthis'surplus'。Thechiefinjuriesitcausesmaybesummarisedasfollows:
　　1。Flowingabundantlyas'unearned'incomeintothepossessionof'wealthy'individualsandclasses，ittherebycauseslargequantitiesofthenationalincometobeconsumedwithlittleornobenefit。Formuch，ifnotmost，ofthissurplus，beingdevotedtoluxury，waste，extravaganceand'illth'，furnishesbyitsexpenditurenothumanutilitybuthuman'cost'，notanenhancementbutadiminutionofthesumofhumanwelfare。
　　2Byenablingitsrecipientstodisobeythesoundbiologicalandmoralprecept，'inthesweatofthyfacethoushalteatbread，'itcallsintobeingandsustainsaleisuredorunemployedclasswhoseexistencerepresentsalossofproductiveenergyandofwealth-productiontothenation。
　　3Theevilprestigeandattractionofthelifeofsensationalfrivolitythisidleclassisdisposedtoleadtendsbysuggestiontosapthewholesomerespectforworkinthestandardsoftherestofthecommunity，andtoencouragebyservileimitationinjuriousorwastefulmethodsofexpenditure。
　　4Theeconomicnecessityofproducingthissurplusimposesexcessivetoilupontheproductiveclasses，beingdirectlyresponsibleforthelonghoursandspeeding-upwhichconstitutetheheaviestburdenofhumancosts。
　　Thedirectionwhichtheexpenditureofthesurplusgivestocapitalandlabourdegradesthecharacteroflargebodiesofworkersbysettingthemtofutile，frivolous，viciousorserviletasks。
　　5Thedisturbingirregularityofthetradeswhichsupplythecapriciousandever-shiftingconsumption，uponwhichthe'surplus'issolargelyspent，imposesupontheworkersagreatcostintheshapeofirregularityofemployment，andaconsiderableburdenofcostlysavingbywayofinsuranceagainstthisirregularity。
　　6Bystampingwiththebadgeofirrationalityandinequitythegeneralprocessofapportionmentofincome，thesurplusimpairsthatspiritofhumanconfidenceandthatconsciousnessofhumansolidarityofinterestswhicharethebeststimuliofindividualandsocialprogress。
　　Thesurpluselementinprivateincomethusrepresentsthehumanlossfromdefectsinthecurrentdistributionofwealth，notonlythelossfromwastefulandinjuriousconsumptionbutfromwastefulandinjuriousproduction，anexaggerationofhumancostsandadiminutionofhumanutilities。Theprimaryobjectofallsocial-economicreformsshouldbetodissipatethissurplusandtosecureitsapportionmentpartlyasusefulincomeforindividualproducers，partlyasusefulincomeforsociety，sothat，insteadofpoisoningthesocialorganismasitdoesnow，itmaysupplyfullernourishmentandstimulustothelifeofthatorganismanditscells。
　　Thusdirected，partlyintohigherwagesofefficiencyforworkers，partlyintofurtherincomefortheenrichmentofthecommonlife，the'surplus'
　　willineffectceasetobesurplus，beingcompletelyabsorbedinsatisfyingthehumanrequirementsofindividualsandsociety。Fornotonlywillitfurnishtheexpenditurerequiredtobringthestandardofconsumptionofallgradesofworkersuptothelevelofafullsatisfactionofhumanneeds，butitwillestablishanentirelynewconceptionofpublicincome。Foritwillberecognisedthatthepublicrevenue，takeneitherbytaxationorasprofitsofpublicindustry，isearnedbypublicworkpreciselyastherevenueofindividualsisearnedbyprivatework，andisrequiredforpublicconsumptionjustasprivateincomeisrequiredforprivateconsumption。
　　Thusthewholeofwhatnowfiguresasawasteful'surplus'wouldbeappliedinproductiveconsumption。
　　Thescopeoftheoperationofthisorganiclaw，ofcourse，widelytranscendsthisspecialapplicationtothedistributionofeconomicincome。Itisthegenerallawoforderandofprogressinalldepartmentsoforganicactivity。Butforourtask，thatofahumanvaluationofindustry，itsworthissupreme。ForintheapplicationoftheorganiclawofdistributionallthegreatantagonismswhichloomsobigassocialProblems，LuxuryandPoverty，Toilandidleness，TheindividualandSociety，AuthorityandLiberty，findtheirsolution。9
　　NOTES:
　　1。Eventhereheisnotseparatedinphysicalfunctions。Thesexual，philoprogenitive，andthegregariousinstincts，whicharerootedinphysicalstructure，negatephysicalindividualism。Sodoesthestructureofhisbrain，whichinsolitudedecaysorbecomesdiseased。
　　2。TheCommon-senseofPoliticalEconomy，p。698。
　　3。p。345。
　　4。WorkandWages，Vol。I，p。14。
　　5。ProfessorPigouWealthandWelfare，p。176，thoughadoptingthegeneralpositionofmarginalism，makesaconcession，astoitsapplicability，whichisavirtualadmissionofitsfutility。Forbyshowingthatonlyin'industriesofconstantreturns'are'supplyprice'and'marginalsupplyprice'equal，andthatinindustriesof'decreasing'orof'increasing'
　　returnsthereexistsatendencytoexceedortofallshortof'themarginalnetproductyieldedinindustriesingeneral，'hevirtuallyendorsesthecriticismthat'marginalism'assumesastaticalconditionofindustry。
　　Foronlyinastaticalconditionwouldallindustriesbefoundconformingtoconstantreturns:theoperationofincreasingordiminishingreturnsmeansnothingelsethanthatchangesinvolumeormethodsofproductionareraisingorloweringproductivityandremunerationaboveorbelowtheequallevelwhich'marginalism'desiderates。
　　6。Fromthestandpointoftheindividualbusinessfirm'costsofproduction'
　　mayincludemanyhigherratesofpayments，necessaryundertheactualconditionsofcompetitiveindustrytosecuretheuseoftherequiredagents。
　　7。Foritmustbekeptinmindthatthe'productiveexpenditure'towhichreferenceisheremadereferultimatelytoastandardnotofmarketbutofhumanvalues。
　　8。Economists，followingtheclassicaldistinctionmadebyAdamSmithinthecaseoflandvalues，maybreakupthesurplusintovariousspeciesofscarcityrentsontheonehandanddifferentialrentsontheother。
　　Ascarcityor'specific'rentwilloccurwhenthewholesupplyofsomefactorofproduction，e。g。，allthelandavailableforsomeparticularuse，orallthecapitalemployedinsometrade，isinapositiontotakeapaymenthigherthanisobtainablewheremorelandorcapitalisavailableforthisparticularusethanisrequiredtoturnoutthesupplyofgoodsthatisactuallysold。TheworsthoplandinuseinEnglandobtainsapositiverent，theworstequippedshipsintheAtlanticcombineobtainasurplus-profit:
　　betteracresofhopland，better-equippedshipsobtainadifferentialrentorprofitinaddition。Bothspecificgainanddifferentialgainaresurplus，andthebasisofeachisascarcityofsupplyandarestraintofcompetition。
　　9。Foradetailedandmoretechnicaldefenceofthefundamentallyimportantdistinctionbetween'costs'and'surplus'andforacloseranalysisofthesourcesof'unproductivesurplus，'readersmaybereferredtotheauthor'searlierwork，TheIndustrialSystem:anenquiryintoearnedandunearnedincome。Longman's2ndandrevisededition，1909。CHAPTERXIII:THEHUMANCLAIMSOF
　　LABOUR
　　§；1。ThevalidityofthehumanlawofdistributioniswelltestedbyconsideringthelightitshedsuponthemodernclaimsofLabourandtheMovementwhichisendeavouringtorealisetheseclaims。ForthesignificanceoftheLabourMovementwillcontinuetobemisunderstoodsolongasitisregardedasameredemandforalargerquantityofwagesandofleisure，importantastheseobjectsare。TherealdemandofLabourisatoncemoreradicalandmorehuman。ItisademandthatLabourshallnolongerbeboughtandsoldasadeadcommoditysubjecttothefluctuationsofDemandandSupplyinthemarket，butthatitsremunerationshallberegulatedonthebasisofthehumanneedsofafamilylivinginacivilisedcountry。
　　Atpresentmostsortsoflabourersarepaidaccordingtothequantityoflabour-powertheygiveout，andaccordingtothemarket-pricesetuponaunitofeachseveralsortoflabour-power。Thismeansthattheactual
　　weeklyearningsofsomegradesoflaboureraremuchhigherthanthoseofothergrades，notbecausetheworktakesmoreoutofthem，orbecauseitinvolvesahigherstandardofliving，butbecausesomenatural，somefortuitous，orsomeorganisedscarcityofsupplyexistsintheformergrades，whilethereisabundanceofsupplyinthelatter。1Moreover，theweeklyearningsforanyofthesesortsoflabourwillvaryfromweektoweek，frommonthtomonth，oryeartoyear，withthevariationsofSupplyandDemandintheLabourMarket。Theincomeoftheworkingfamilywillthusvaryforreasonsutterlybeyonditscontrol，thoughitsrequirementsforeconomicandhumanefficiencyshownosuchvariation。Thusthereisnosecurityforanyclassstandardofliving。
　　Withineachclassorgradeoflabourtherewillbevariationsoftheindividualfamilywage，basedontheamountoflabour-poweractuallygivenoutintheweek。Alesseffectiveworker，eventhoughheputsoutasmucheffort，willearnlessmoneythanamoreeffective。Thisseemsnecessary，reasonableandevenjust，solongasweaccepttheordinaryviewthatlabourshouldbeboughtandsoldlikeanyothercommodity。
　　Butonceaccepttheviewthattobuylabour-power，likeothercommodities，atapricedeterminedpurelybyrelationsofSupplyandDemand，isapolicydangeroustothelifeandwell-beingoftheindividualwhoselabour-poweristhusboughtandsold，tothoseofhisfamilyandofsociety，yourattitudetowardsthelabour-movementingeneral，andeventocertaindemandswhichatfirstsightseemunreasonable，willundergoagreatchange。
　　ThefundamentalassumptionoftheLabourMovement，initsdemandsforreformedremuneration，isthattheprivatehumanneedsofaworkingfamilyshouldberegularlyandsecurelymetoutofweeklypay。Thelifeandhealthofthefamily，andthatsenseofsecuritywhichisessentialtosoundcharacterandregularhabits，totheexerciseofreasonableforesight，andtheformationandexecutionofreasonableplans，allhingeuponthiscentraldemandforasufficiencyandregularityofweeklyincomebaseduponthehumanneedsofafamily。
　　§；2。Thisexplainsaliketheworking-classobjectionstopiecework，thedemandforaminimumwage，andthepolicyoflimitationofindividualoutput。Forpiece-work，evenmorethantime-work，isbaseduponatotalignoringofthehumanconditionswhichaffectthegivingoutoflabour-power。
　　Itistheplainestandmostlogicalassertionofthecommodityviewoflabour，themostcompletedenialthatthehumanneedsoftheworkerhaveanyclaimtodeterminewhatheshouldbepaid。
　　Sofirmly-rootedinthebreastoftheordinarynon-workingman，andofmanyworking-men，isthenotionthataman，whohasproducedtwiceaslargeanoutputasanotherman，ought，asasimplematterofrightorjustice，toreceiveapaymenttwiceaslarge，thatitisverydifficulttodislodgeit。Itrepresentsthegreatesttriumphofthebusinesspointofviewoverhumanity。Ifamanhasdonetwiceasmuch，ofcoursebeoughttoreceivetwiceasmuch!Itseemsanethicaltruism。AndyetIventuretoaffirmthatithasnothingethicalinit。Ithasassumedthismoralguisebecauseofadeepdistrustofhumannaturewhichitexpresses。Howwillyougetamantodohisbestunlessyoupayhimaccordingtotheamounthedoes？
　　Itisthispurelypracticalconsiderationthathasimposeduponthepiece-worksystemtheappearanceofaxiomaticjustice。
　　Itisnotdifficulttostripoffthespuriousethicsoftheprinciple。
　　Yousaythatpiece-wagesorpaymentbyresultisrightbecauseitinducesmentodotheirbest。Butwhatdowemeanby'doingtheirbest。'？Aweakmanmayhewonetonofcoalswhileastrongmanmayhewtwo。Hasnottheformer'donehisbest'equallywiththelatter？Thestrengthofastrongman，thenaturaloreventheacquiredskillofaskilfulman，cannotbeassumedasapersonalmeritwhichdeservesrewardinthetermsofpayment。
　　Ifthereismeritanywhere，itisintheeffort，notintheachievementorproduct，andpiece-wagesmeasureonlythelatter。
　　No!thereisnothinginherentlyjustinthepiece-wagesystem。Itsrealdefenceisthatitisthemostpracticalwayofgettingmentoworkashardastheycan:itisacheckonskulkingandsugaring。Itassumesthatnoothereffectivemotivecanbemadeoperativeinbusinessexceptquantityofpayment。
　　§；3。AsRuskinandmanyothershaveremarked，thelieisgiventothisassumptioninanincreasingnumberofkindsofworkwherethehighestqualitiesofhumanpower，thefinestsortsofmentalskillandresponsibility，areinvolved。Publicservantsofallgrades，fromCabinetMastersandJudgesdowntomunicipaldustmen，arepaidbysalaries，notbypiece-wages。Thesameistrueofthemoreremunerativeandmoreresponsibleworkinprivatebusinesses。NoGovernment，noprivatefirm，buystheservicesofitsmostvaluableemployeesatthelowestmarket-price，orattemptstoapplytothemapiece-workscale。Itwouldnotpaythemtodoso，andtheyknowit。Noristhismerelybecausesomesortsofworkdonoteasilyadmitofbeingmeasuredbythepiece。ItwouldbepossibletopayJudges，ascounselarepaid，bythecase。CabinetMinistersmightbepaidonpiece-wagesforLawsmeasuredbythenumberorlengthoftheirclauses。Thechiefreasonforadoptingpaymentbyfixedsalaryisthatitisreckonedawisemodeofsecuringgoodindividualservices。Itisrecognisedthat
　　eachpieceofworkwillbebetterdone，iftheworkerssetaboutitinathoroughlydisinterestedmanner，concentratedintheirthoughtsandfeelingsentirelyontheworkitself，andnotentangledintheconsiderationofwhattheyaretogetoutofit。Thisissupposedtobethedifferencebetweentheprofessionalmanandthetradesman，thattheformerperformsafunctionandincidentallyreceivesafee，whilethelatter，bytheveryactsofbuyingandsellingthatconstitutehisbusiness，keepshismindsetupontheprofitfromeachseveraltransaction。
　　Butthefixedandguaranteedsalaryforpublicservantshasanotherground。Itmayprofitabusinessfirmtopractiseaneconomyofsweating，todriveitsemployeesandconsumetheirhealthandstrengthbyafewyears'
　　excessivetoil，totakeonnewcasualworkersforbriefspurtsoftrade，tosackemployeesruthlessly，assoonastradebeginstoflag，ortheirindividualpowersofworkareimpairedbyage。Apiece-worksystem，withnoguaranteeofemploymentorofweeklywage，maybeasoundbusinesseconomyforaprivatefirm。ItcannotbeasoundeconomyforaStateoraMunicipality。
　　ForalargeandincreasingshareoftheworkandtheexpenditureofmostStatesandMunicipalitiesisappliedintryingtomendoralleviatedamagesordangerstothehealth，security，intelligence，andcharacteroftheworkersandtheirfamilies，arisingfrominsufficiencyofworkandwagesorotherdefectsofprivateindustrialism。Itwouldobviouslybebadpubliceconomytobreakdownthelivesandhomesofpublicemployeesbyunderpayingoroverworkingthem，orbydismissingandleavingthemtostarvewhenworkwasslack。Forwhatwassavedinthewage-billoftheparticulardepartment，wouldbesquanderedinpoor-law，police，hospitals，old-agepensions，invalidityandemploymentrelief。Noristhatall。A
　　massofill-paid，ill-housedworkers，alternatelyoverworkedandoutofwork，standsasachiefbarrierineveryoneofthosepathsofsocialprogressandnationaldevelopmentwhichmodernstatecraftsetsitselftofollow。
　　Thelowwageofunskilledlabouristo-dayasourceofinfinitewasteoftheforcesofnationaleducation。Stillkeepingourargumentuponthenarrowestlinesofeconomy，weplainlyrealisethatthefinancialresources，uponwhichtheStatecandrawforallherservices，dependinthelastresortuponthegeneraleconomicefficiencyoftheworkingpopulation，andthatasystemofpublicemploymentwhichwas，howeverindirectly，detrimentaltothishealth，longevityandintelligence，wouldrankasbadbusinessfromthepublicstandpoint。
　　Itispossiblethatinthiscountrythesalarymodeofpaymentisgainingground。Apartfromthepublicservices，nationalandmunicipal，whichnowemploysome7percentofthetotalemployedpopulation，thegreattransportandthedistributiveindustriesarealmostentirelyrunuponthesalarybasis。Thesedepartmentsofindustryareconstantlyincreasing，notonlyinabsolutesize，butintheproportionofthetotalemploymenttheyafford。
　　Tothemmustbeaddedthelargeclassofdomesticservice。Suchgreatsalariedservicescannot，indeed，beclaimedastriumphsfortheorganicprincipleofdistribution，orpaymentaccordingtoneeds。Forthemostparttheyareveryunsatisfactorymodificationsofthepiece-wageorcommodityviewoflabour。For，exceptforthesmallhighergradesofofficials，theymostlyretainthetwochiefdefectsoftheordinarywage-system，apaymentofweeklyincomenotbasedonapropercomputationofhumanneeds，andalackofadequatesecurityoftenure。Overalargepartofthefieldofindustryandcommercewhereweeklyfixedsalariesarepaid，thereexistsaflagrantdisregardforallconsiderationsofhumansubsistence。Someoftheworse，thoughnottheworst，formsof'sweating'arefoundinshops，workshopsandfactorieswherewomenareemployedonweeklysalaries。
　　Nonetheless，itremainstruethatthesalaryisamorerationalformofpaymentforlabourthanthetimeorpiecewage，andthat，asthehumanisationofindustryproceeds，itwillmoreandmoredisplacethewage-system。Forwheresalariesarepaid，theconsiderationofneedsorsubsistencedoestendalwaystoqualifythemerecommodityviewoflabour。
　　Piece-wageortime-wageignorestheworkerasahumanbeingandthesupporterofafamily:itignoreshimasapersonalityandregardshimmerelyasaninstrumentforgivingoutunitsofproductivepowertobepaidforonthesametermsastheunitsofmechanicalpowerusedinworkingmachinery。
　　§；4。TheLabourMovementinsiststhatthepersonalandhumanfactorisfundamentalasaconditioninthelabourbargain。Iflabouristreatedasamerecommodity，itspriceaffordsnosecurityoflifetothelabourer。
　　Itmaynotfindacustomeratall，andsohestarvesandwithhimhisfamily，thefuturesupplyoflabour。Or，lefttothefluctuationsofthemarket，itmaysellatapricewhichisinsufficientforhismaintenance。Thefluctuationsofpriceinallothermarketsinvolveonlythepecuniaryprofitorlossofthosewhosell，fluctuationsofthepriceoflabourinvolvetheexistenceandwell-beingofhumanfamiliesandofthenation。Hencetheattackoforganisedlabouronthiswholeconceptionofthelabour-market，andthedemandthattheremunerationoflabourshallnotbelefttothehigglingofamarket。
　　Thechieffightisforasecureweeklyincome，orforconditionsofemploymentwhichleaduptothis。Aminimumoralivingwageistheusualnamegiventothisdemand。Complaintismadeofthevaguenessofthedemand。
　　Butthisvaguenessdoesnotmakethedemandunreasonable。Alivingwageindeediselasticaslifeitself:itexpandsandwillcontinuetoexpand，withthedevelopmentoflifefortheworkers。Butwhatineffectismeantatthepresentbyalivingorsubsistencewageissucharegularweeklysumassufficestomaintaintheordinaryworkingfamilyinhealthandeconomicefficiency。
　　Itiscontendedthatnopurchaseoflabourshouldbepermittedwhichentailsthedegradationofthatstandard。Whenaminimumrateofpiece-wagesisdemanded，theimplicitunderstandingisthatitissuchaswillyieldundernormalconditionstheordinaryweeklysubsistenceorstandardwage。
　　Sincepiece-wagesaresofirmlyestablishedinmanytradesthatitisimpracticabletodemandtheirimmediateabolition，theactualstrugglebetweenemployeesandemployersisastowhetherthesepiece-wagesshallbeallowedtofluctuateindefinitely，beingdraggedattheheelsofthepricesofcommodities，orwhetheranabsolutelimitshallbesetupontheirfall。Theemployersays，'Whentradeisgoodandpricesandprofitshigh，labourwillsharetheprosperityinhighratesofwageandlargeweeklyearnings:so，whentradeisbadandpricesandprofitslow，labourmustsharethisadversityandtakelow。pay，Organisedlabourreplies，'No，thereisnoparitybetweenthepowerofcapitalandoflabourtobeardepressions:capitalisstrongandcanbearupagainstlowprofitswithoutperishing，labourisweakandcannotbearupagainstlowwages。Wewillonlysellourlabour-poweronconditionthatalowerlimitissetuponitsprice，suchalimitaswillenablethelabourertokeepbodyandsoultogether，andtomaintainthatefficiencywhichconstituteshisworkingcapital。Thisminimumwageshouldberegardedasafixedcostinyourproduction。Atpresentthepricesofyourgoodsoscillatewithoutanyassignedlimit。Youacceptlowcontractsforwork，andthenadducethislowpriceasareasonforreducingwages。
　　Letaminimumwageoncebeadoptedinthetrade，andcontractpricescannotbeacceptedonsolowalevel。Theminimumwagewillthushelptosteadysellingpricesandtoregulateemploymentandoutput。'
　　Boththeeconomicsandthesocialethicsofthislabourcontentionareinsubstancesound。Solongasthepriceoflabourislefttohigglinginacompetitivemarket，thereisnothingtopreventthewagesfallingtothelowestlevelatwhichasufficientnumberofworkerscanbeinducedtoconsenttowork，andthatlevelmayinvolveareductionofthestandardoflivingintheirfamiliesbelowthetruesubsistencepoint。Thefixingofwagesbyso-calledfreecompetitionaffordsnosecurityforafamilywageofefficiencyorevenofsubsistence。Thereshouldbenomistakeuponthisessentialmatter。Thedoctrineof'economyofhighwages'hasnosuchgeneralefficacyasissometimessuggested。Thoughinmanycaseshighwagesareessentialtomaintainandevoketheenergyandefficiencyrequired，inothercasestheyarenot。Fromthestandpointoftheimmediateprofitsofemployers'sweating'oftenpays。Butfromthestandpointofsocietyitneverpays。
　　Therefore，thepolicyoftheorganisedworkers，inseekingtoenforcethedoctrineofaminimumwage，isnotonlyapolicyofself-preservationfortheworking-classesbutasalutarysocialpolicy。ItisforthisreasonthattheStateintervenesinfavourofthepractice，establishingTradeBoardstoenforceitsapplicationinso-called'sweatedtrades'，andacknowledges，intheoryatanyrate，itsvalidityinallpublicemploymentsandpubliccontracts。
　　§；5。Althoughthisminimumwageistolerablyremotefromtheidealofafixedweeklysalaryinmosttrades，itisatruestepinthisdirection。
　　Themostcontroverteditemintrade-unionpolicy，thelimitationofindividualoutput，isalsopartlyactuatedbythesamemotive。Fewthingsmaketheordinarybusinessmanmoreindignantthanthetrade-unionregulationsincertaintradeswhichrestrainstrongerorquickerworkersfromputtingforththeirfullproductiveenergy。Theydenouncealikeitsdishonestyanditsbadeconomy。Itisbased，theysay，uponthe'lumpoflabour'fallacy，thefalsenotionthatthereexistsanabsolutelylimitedamountofemployment，orworktobedone，andthatifthestrongerorquickermendomorethantheirshare，theotherswillgoshort。Thisrefusaltoalloweachmantodohisbest，liketherelatedrefusalto
　　getthefullworkoutofnewlabour-savingmachinery，appearsmonstrouslyperverseandwicked。But，thoughpartlyanimatedbyshort-sightedeconomicviews，thispolicyisnotentirelytobethusexplained。Thelevellingdownoftheoutputofallworkerstoastandardhaspartlyforitsobjecttheestablishmentofgreaterevennessofincomeamongtheworkersinatrade。Atanygiventimeinagivenmill，orfactorytown，theactualamountofavailableemploymentislimited，andforthetimeitistruethatbylimitationofindividualoutputalargernumberofworkersareemployed，andalargernumberofworkingfamiliesareprovidedwithanormalwage，thanwouldhavebeenthecaseifacertainnumberofmenwereencouragedtoanunrestrictedenergyandunlimitedovertime。
　　Inthelongrun，itmaybebettertoencouragefullindividuallibertyofoutput，evenintheinterestoftheaggregateofemployment，buttherestraintstowhichiherealludebecomemoreintelligiblewhentheyareregardedasattemptstoenforceacommonclassweeklywagebymeansofanevendistributionofemployment。
　　Aminimumpiece-wage，basedonamoderatecomputationoftheweeklyoutputperworker，andaccompaniedbyasubstantialsecurityoffullregularemployment，wouldineffectplacethepiece-workerinthepositionofasalariedemployee。But，ofcourse，aminimumpiece-wage，howeverhigh，doesnotgofartothisend，unlesssecurityoftenureatfairlyfullemploymentisobtained。Theproblemofun-andunder-employmentandofirregularemploymentisnowbeginningtoberecognisedinitsfullsocialgravity。Aweeklywageofbareefficiencywithregularemploymentissociallyfarsuperiortoahigheraveragewageaccompaniedbygreatirregularityofwork。Theformeradmitsstabilityofmodesoflivingandreadymoneypayments:itconducestosteadinessofcharacterandprovisionforthefuturewithoutanxiety。Rapidandconsiderablefluctuationsofwages，evenwithfullemployment，aredamagingtocharacterandstabilityofstandards:butirregularityofemploymentisthemostdestructiveagencytothecharacter，thestandardofcomfort，thehealthandsanityofwage-earners。Theknowledgethatheisliableatanytime，fromcommercialornaturalcausesthatlieentirelyoutsidehiscontrol，tolosetheopportunitytoworkandearnhislivelihood，takesoutofamanthatconfidenceinthefundamentalrationalityoflifewhichisessentialtosoundnessofcharacter。Religion，ethics，education，canhavelittleholduponworkersexposedtosuchpowerfulillustrationsoftheunreasonandinjusticeofindustryandofsociety。
　　Theregularisationofindustry，soastoaffordsubstantialguaranteesoffullregularemployment，thusrankswiththeminimumwageasthemostsubstantialcontributiontowardsthesubstitutionofsalaryforwages，whichtheorganiclawofDistributionrequires。TheStateisbeginningtocooperatewiththeLabourMovementfortheattainmentofthissocialobject，stimulatingemployerstoorganisetheirindustriessoastofurnishamoreevenvolumeofemployment。
　　§；6。ThisinterpretationoftheLabourMovementasahalf-consciousmanifoldendeavourtorescuetheremunerationofLabourfromtherisksanddefectsofthecompetitivelabourmarket，andtoestablishitonaneconomyofhumanneeds，isnotfullyunderstoodwithoutsomefurtherreferencetotheactionoforganisedsociety。TheLabourMovement，initsendeavourtogetabetterdistributionoftheincome，isnotconfinedtotryingtosecureasatisfactoryminimumorstandardwage，fortifiedbygreatersecurityofworkandpersonalinsuranceagainstunemployment。Itseeksalsotosupplementitswagesbycooperativeandpublicprovisions。
　　Thecooperativemovementisanattempttoconvertintorealwagessomeoftheprofitsofemployersandshareholdersinmanufacturingandcommercialbusinesses，soenlargingtheproportionoftherealincomeofthenationwhichgoestotheremunerationoflabour。ButthegrowingattachmentoftheLabourOrganisationstopoliticsisequallymotivedbytheendeavourtosecurefromtheState，notmerelylegalsupportsforhigherwagesandimprovedconditionsofemployment，butactualsupplementstowagesintheshapeofcontributionsfromthepublicservicestotheirstandardofliving。
　　Freeeducation，old-agepensions，andpublicsubsidiestowardsinsuranceareadirectcontributionfromtheStatetothehigherstandardoflifewhichmoderncivilisedsocietydemands。Health，education，recreation，andprovisionagainstemergencies，arecomingmoreandmoretoberecognisedasproperobjectsofgovernmentalaction，andotherimportantservices，suchastransport，credit，art，musicandliterature，arefaronthewaytobecomingcommunal
　　supplies。Althoughthesemodesofsocialprovisionmaybechieflymotivedbyconsiderationsofpublichealthandothercommongoods，theyneverthelessmustrankascontributionstothestandardofcomfortandwell-beingoftheworking-classfamilieswhoarethespecialbeneficiaries。Relieving，astheydoinmanyinstances，theprivateincomesoftheworkersfromexpenditurewhichotherwisethefamilywouldfindittoitsprivateinteresttoincur，thesegrowingpublicservicesformagenuineandaconsiderablecontributiontotheavailablerealincomeoftheworking-classes。Sofarasbytaxationdirectorindirectthecostofsuchpublicservicescanbeconsideredaburdenupon，oradeductionfromthewage-incomeoftheworkers，itforms，ofcourse，nonetadditiontotheirshare，butisonlyapubliccontrolovermethodsofexpenditure。
　　Butinasmuchasthedistincttendencyofmoderntaxationistowardsanincreasingtaxationoftheincomesandpropertyofthenon-workingclasses，thesepublicservicesrankassupplementaryincome，paidinkind，andtendingtoequalisethestandardoflivingofindividualworkersandgradesofworkers。ThecriticismsometimesdirectedagainstthisStatesocialism，uponthegroundthatittendstoweakentheforceofwage-bargainingandtransferstotheshouldersof'society'costswhichemployerswouldotherwisehavetobearintheshapeofhighermoneywages，wouldhaveconsiderableforce，iftheoldlaissez-faireprincipleof'freecontract'wereallowedotherwisetoworkunimpeded。Butthis，aswesee，isnotthecase。Thegrowingpolicyofminimumandstandardrates，supportedbypublicopinionand，wherenecessary，bypubliclaw，andhardeningintoapolicyoffixedsalaries，isnowiseinconsistentwithasimultaneousdevelopmentofcommunalsuppliesofgoodsandserviceswhichusuallyliealittleabovethenormalstandardofcomfortofthosewhoarethechiefbeneficiaries。
　　ThegrowingpoliticalactivitiesofalabourmovementwhichonceeschewedStateaidsnotmerelyattestthegeneralgrowthofconsciousdemocracybutimplyarecognitionofthedirectcontributionwhichtheStateismakingtowardsageneraldistributionofthenationalincomeinaccordancewithaneconomyofhumanneeds。
　　NOTES:
　　1。Thewidthofvariationsintheweeklyearnings，involvinginmostinstancesanearlycorrespondingvarietyoffamilyincome，maybeillustratedbythefollowingestimatecompiledbyMr。Webb，fromacarefulanalysisofofficialwagereturns。NewStatesman，May10，1913。
　　CHAPTERXIV:SCIENTIFICMANAGEMENT
　　§；1。Nohumanisttreatmentofmodernindustrycanignoretherecentadvancesofscientificmethodsintotheregulationbothofstandardsofproductionandstandardsofconsumption。Inbothartsalikethecrudeempiricismofthepastisgivingplacetoamoreordered，consciousrationalism。Asisonlynatural，theadvanceofscienceismorerapidintheproductivearts。
　　Inrecentyearsmanyscatteredattemptshavebeenmadetoapplyphysiologyandpsychologytoeconomicprocesses。Businessmenbyscientificobservationandexperimenthavebroughtcriticismtobearuponthetraditionalandempiricalmodesoforganisingandconductingbusinesses。Themoreorlesshand-to-mouthmethodswhichwerepossibleinsmallbusinesseswherethemanagerwasowner，andcouldkeepaclosepersonalsupervisionofhisemployeesandalltheirwork，werefoundincreasinglyunsuitabletomoderntypesoflargecapitalistbusiness。Itwasnecessarytodeviseregularmethodsforcorrelatingtheworkofthedifferentdepartments，andforenablingasinglecentralpurposetooperatebycomplexdelegationthroughseveralgradesofsubordinateofficialswithautomaticchecksandregisters。Moreaccuratemethodsofbook-keeping，especiallyofcost-taking，weredevised；
　　experimentsweremadeinbonuses，profit-sharing，fines，pace-makingandvariousmodificationsofthewage-systemsappliedtoevokemoreenergy，skill，orcarefromtheworkersandofficials；hoursoflabourandshift-systemsweresubjectedtomeasuredtests。Stillmorerecentlythedetailedtechnologyofmanualandmentallabourhasbeenmadematerialofphysiologicalandpsychologicalinvestigation。ScientificManagementhasbecomeaconsciousart。BusinesscollegesinAmericaandgermanygivecoursesofinstructioninthisart，andanewprofessionhasarisenofexpertadviserswhoarecalledinasspecialiststodiagnosethedeficienciesorwastesofindustrialorfinancialpowerinparticularbusinessesandtoprescriberemedies。
　　Economicprogress，regardedfromthestandpointofthebusinessman，consistsingettingagivenquantityofsaleablegoodsturnedoutatalowercostofproduction。Thatcostofproductionconsistsofthesalariesandwagespaidtovariousgradesofemployeesformentalandmanuallabour，costofmaterialsandpower，standingexpensesformaintenanceofplantandpremises，includingreplacementandinsurance，andinterestuponcapital。
　　Anythingthatreducesanyoneofthesecosts，withoutacorrespondingincreaseofanother，isprofitablefromthestandpointoftheindividualemployer，orofallemployersinthetrade，ifitbegenerallyadopted，oroftheconsumingpublic，ifitwhollyorpartlygoestotheminlowersellingprices。Wherethereductionofcostssimplytakestheshapeofreducedwagesforthesamework，however，itcausesnonetincreaseofconcretewealth，butmerelydistributesthesameamountorlessbyreasonofreducedefficiencyoflabourinadifferentmanner。Suchareductioncannotthenberegardedaseconomicprogress，fromthenationalstandpoint。
　　Buteveryotherreductionofcostcarrieswithitprimafacieevidenceofanetincreaseofconcretewealth。Inventionsofmachinery，improvedchemicalorothertreatmentofmaterials，betterbusinessorganisationandsubdivisionoflabour，improvedskillandenergyinemployees，betterbook-keeping，credit，marketingarrangements，——allsuchtechnicalimprovementspromotetheincreaseofconcretewealth。Inallthesewaysmanygreatadvanceshavebeenmadeinvariousindustries。But，alikeininventionandinorganisation，toomuchhasbeenlefttochance，ortothepressureofsomeemergency，toolittleistheresultoforderedthought。Businesshasbeenconductedtoomuchinthespiritofanart，toolittleinthatofappliedscience。
　　Themoderntendencyistointroducetheexactermethodsofscience。Themodernlargemanufacturingorminingenterpriseemploysexpertengineersandchemists，notonlytotestandcontroltheoperationofexistingprocesses，buttoinventnewandcheaperwaysofcarryingoutaprocess，todiscovernewproductsandnewusesforby-products。Itemploysexpertaccountantstooverhaulitsbook-keepingandfinanceandtosuggestimprovements。Initiativeandeconomyaretobestudied，evokedandappliedalongeverypath。
　　§；2。Butuntillatelythedetailedorganisationoflabouranditsutilisationforparticulartechnicalprocesseshadreceivedlittleattentioninthegreatroutineindustries。Evensuchtechnicalinstructionashasbeengiventobeginnersinsuchtradesasbuilding，engineering，weaving，shoemaking，etc。，hasusuallytakenforgrantedtheexistingtools，theacceptedmethodsofusingthemandthematerialtowhichtheyareapplied。
　　Tomakeeachsortofjobthesubject-matterofacloseanalysisandofelaborateexperiment，soastoascertainhowitcouldbedonemostquicklyandaccuratelyandwiththeleastexpenditureofneedlessenergy，comesasanovelcontributionofbusinessenterprise。TogettherightmantousetherighttoolsintherightwayisafairaccountoftheobjectofScientificManagement。Atpresentamanentersaparticulartradepartlybyuninstructedchoice，partlybychance，seldombecauseheisknownbyhimselfandhisemployertohaveanaturaloracquiredaptitudeforit。
　　Hehandlesthetoolsthataretraditionalandareingeneraluse，copyingthewaysinwhichothersusethem，receivingchancetipsorsuggestionsfromacomradeoraforeman，andlearningfrompersonalexperiencehowtodotheparticularworkinawaywhichappearstobeleasttroublesome，dangerous，orexhausting。Bothmodeofworkandpacearethoseofprevailingusage，moreorlessaffectedbymachineryorothertechnicalconditions。
　　Thescientificmanagerdiscoversenormouswastesinthiswayofworking。
　　Partofthewastehefindsduetoimpropertoolsandimpropermodesofworking，arisingfrommereignorance；partheattributestosystematicorhabitualslacking，moreorlessconsciousandintentionalonthepartoftheworkers。Thenaturaldispositionoftheworkerto"takeiteasy"