How the Worker Creates His
Wages
THE laborer who receives his wages in money (coined or
printed, it may be, before his labor commenced) really
receives in return for the addition his labor has made to
the general stock of wealth, a draft upon that general
stock, which he may utilize in any particular form of
wealth that will best satisfy his desires; and neither
the money, which is but the draft, nor the particular
form of wealth which he uses it to call for, represents
advances of capital for his maintenance, but on the
contrary represents the wealth, or a portion of the
wealth, his labor has already added to the general stock.
—
Progress & Poverty
— Book I, Chapter 1: Wages and Capital: The Current
Doctrine of Wages — Its Insufficiency
THE miner who, two thousand feet underground in the heart
of the Comstock, is digging out silver ore, is in effect;
by virtue of a thousand exchanges, harvesting crops in
valleys five thousand feet nearer the earth's center;
chasing the whale through Arctic icefields; plucking
tobacco leaves in Virginia; picking coffee berries in
Honduras; cutting sugar cane on the Hawaiian Islands;
gathering cotton in Georgia or weaving it in Manchester
or Lowell; making quaint wooden toys for his children in
the Hartz Mountains; or plucking amid the green and gold
of Los Angeles orchards the oranges which, when his shift
is relieved, he will take home to his sick wife. The
wages which he receives on Saturday night at the mouth of
the shaft, what are they but the certificate to all the
world that he has done these things — the primary
exchange in the long series which transmutes his labor
into the things he has really been laboring for? —
Progress & Poverty
— Book I, Chapter 1: Wages and Capital: The Current
Doctrine of Wages — Its Insufficiency
LABOR always precedes wages. This is as universally true
of wages received by the laborer from an employer as it
is of wages taken directly by the laborer who is his own
employee. In the one class of cases as in the other,
reward is conditioned upon exertion. Paid sometimes by
the day, oftener by the week or month, occasionally by
the year, and in many branches of production by the
piece, the payment of wages by an employer to an employee
always implies the previous rendering of labor by the
employee for the benefit of the employer, for the few
cases in which advance payments are made for personal
services are evidently referable either to charity or to
guarantee and purchase. —
Progress & Poverty
— Book I, Chapter 3: Wages and Capital: Wages not
drawn from capital, but produced by the labor
THE payment of wages always implies the previous
rendering of labor. Now, what does the rendering of labor
in production imply? Evidently the production of wealth,
which, if it is to be exchanged or used in production, is
capital. Therefore, the payment of capital in wages
pre-supposes a production of capital by the labor for
which the wages are paid. And as the employer generally
makes a profit, the payment of wages is, so far as he is
concerned, but the return to the laborer of a portion of
the capital he has received from the labor. So far as the
employee is concerned, it is but the receipt of a portion
of the capital his labor has previously produced. As the
value paid in the wages is thus exchanged for a value
brought into being by the labor, how can it be said that
wages are drawn from capital or advanced by capital? As
in the exchange of labor for wages the employer always
gets the capital created by the labor before he pays out
capital in the wages, at what point is his capital
lessened even temporarily? —
Progress & Poverty
— Book I, Chapter 3: Wages and Capital: Wages not
drawn from capital, but produced by the labor
To recapitulate: The man who works for himself gets his
wages in the things he produces, as he produces them, and
exchanges this value into another form whenever he sells
the produce. The man who works for another for stipulated
wages in money, works under a contract of exchange. He
also creates his wages as he renders his labor, but he
does not get them except at stated times, in stated
amounts and in a different form. In performing the labor
he is advancing in exchange; when he gets his wages the
exchange is completed. During the time he is earning the
wages he is advancing capital to his employer, but at no
time, unless wages are paid before work is done, is the
employer advancing capital to him. Whether the employer
who receives this produce in exchange for the wages,
immediately re-exchanges it, or keeps it for awhile, no
more alters the character of the transaction than does
the final disposition of the product made by the ultimate
receiver, who may, perhaps, be in another quarter of the
globe and at the end of a series of exchanges numbering
hundreds. —
Progress & Poverty
— Book I, Chapter 3: Wages and Capital: Wages not
drawn from capital, but produced by the labor
THE fundamental principle of human action — the
law that is to political economy what the law of
gravitation is to physics — is that men seek to
gratify their desires with the least exertion. . . . Now,
under this principle, what, in conditions of freedom,
will be the terms at which one man can hire others to
work for him? Evidently, they will be fixed by what the
men could make if laboring for themselves. The principle
which will prevent him from having to give anything above
this except what is necessary to induce the change, will
also prevent them from taking less. Did they demand more,
the competition of others would prevent them from getting
employment. Did he offer less, none would accept the
terms, as they could obtain greater results by working
for themselves. Thus, although the employer wishes to pay
as little as possible, and the employee to receive as
much as possible, wages will be fixed by the value or
produce of such labor to the laborers themselves. If
wages are temporarily carried either above or below this
line, a tendency to carry them back at once arises.
—
Progress & Poverty
Book III, Chapter 6 — The Laws of Distribution:
Wages and the Law of Wages
THE effect of all the circumstances which give rise to
the differences between wages in different occupations
may be included as supply and demand, and it is perfectly
correct to say that the wages in different occupations
will vary relatively according to differences in the
supply and demand of labor — meaning by demand the
call which the community as a whole makes for services of
the particular kind, and by supply the relative amount of
labor which, under the existing conditions, can be
determined to the performance of those particular
services. But though this is true as to the relative
differences of wages, when it is said, as is commonly
said, that the general rate of wages is determined by
supply and demand, the words are meaningless. For supply
and demand are but relative terms. The supply of labor
can only mean labor offered in exchange for labor, or the
produce of labor, and the demand for labor can only mean
labor or the produce of labor offered in exchange for
labor. Supply is thus demand, and demand supply, and in
the whole community, one must be coextensive with the
other. —
Progress & Poverty
Book III, Chapter 6 — The Laws of Distribution:
Wages and the Law of Wages
THUS, although they may from time to time alter in
relation to each other, as the circumstances which
determine relative levels change, yet it is evident that
wages in all strata must ultimately depend upon wages in
the lowest and widest stratum — the general rate of
wages rising or falling as these rise or fall.
Now, the primary and fundamental occupations, upon which,
so to speak, all others are built up, are evidently those
which procure wealth directly from nature; hence the law
of wages in them must be the general law of wages. And,
as wages in such occupations clearly depend upon what
labor can produce at the lowest point of natural
productiveness to which it is habitually applied;
therefore, wages generally depend upon the margin of
cultivation, or, to put it more exactly, upon the highest
point of natural productiveness to which labor is free to
apply itself without the payment of rent. —
Progress & Poverty
Book III, Chapter 6 — The Laws of Distribution:
Wages and the Law of Wages
NOW, why is it that men, have to work for such low wages?
Because, if they were to demand higher wages, there are
plenty of unemployed men ready to step into their places.
It is this mass of unemployed men who compel that fierce
competition that drives wages down to the point of bare
subsistence. Why is it that there are men who cannot get
employment? Did you ever think what a strange thing it is
that men cannot find employment? If men cannot find
an employer, why can they not employ themselves? Simply
because they are shut out from the element on which human
labor can alone be exerted; men are compelled to compete
with each other for the wages of an employer, because
they have been robbed of the natural opportunities of
employing themselves; because they cannot find a piece of
God's world on which to work without paying some other
human creature for the privilege. —
The Crime of Poverty
WE laud as public benefactors those who, as we say,
"furnish employment." We are constantly talking as though
this "furnishing of employment," this "giving of work"
were the greatest boon that could be conferred upon
society. To listen to much that is talked and much that
is written, one would think that the cause of poverty is
that there is not work enough for so many people, and
that if the Creator had made the rock harder, the soil
less fertile, iron as scarce as gold, and gold as
diamonds; or if ships would sink and cities burn down
oftener, there would be less poverty, because there would
be more work to do. —
Social Problems,
Chapter 8 — That We All Might Be Rich
YOU assert the right of laborers to employment and their
right to receive from their employers a certain
indefinite wage. No such rights exist. No one has a right
to demand employment of another, or to demand higher
wages than the other is willing to give, or in any way to
put pressure on another to make him raise such wages
against his will. There can be no better moral
justification for such demands on employers by
working-men than there would be for employers demanding
that working-men shall be compelled to work for them when
they do not want to, and to accept wages lower than they
are willing to take. —
The Condition of Labor, an Open Letter to Pope Leo
XIII
THE natural right which each man has, is not that of
demanding employment or wages from another man, but that
of employing himself — that of applying by his own
labor to the inexhaustible storehouse which the Creator
has in the land provided for all men. Were that
storehouse open, as by the single tax we would open it,
the natural demand for labor would keep pace with the
supply, the man who sold labor and the man who bought it
would become free exchangers for mutual advantage, and
all cause for dispute between workman and employer would
be gone. For then, all being free to employ themselves,
the mere opportunity to labor would cease to seem a boon;
and since no one would work for another for less, all
things considered, than he could earn by working for
himself, wages would necessarily rise to their full
value, and the relations of workman and employer be
regulated by mutual interest and convenience. —
The Condition of Labor, an Open Letter to Pope Leo
XIII
AND will not the community gain by thus refusing to kill
the goose that lays the golden eggs; by thus refraining
from muzzling the ox that treadeth out the corn; by thus
leaving to industry, and thrift, and skill, their natural
reward, full and unimpaired? For there is to the
community also a natural reward. The law of society is,
each for all, as well as all for each. No one can keep to
himself the good he may do, any more than he can keep the
bad. Every productive enterprise, besides its return to
those who undertake it, yields collateral advantages to
others. If a man plant a fruit tree, his gain is that he
gathers the fruit in its time and season. But in addition
to his gain, there is a gain to the whole community.
Others than the owner are benefited by the increased
supply of fruit; the birds which it shelters fly far and
wide; the rain which it helps to attract falls not alone
on his field; and, even to the eye which rests upon it
from a distance, it brings a sense of beauty. And so with
everything else. The building of a house, a factory, a
ship, or a railroad, benefits others besides those who
get the direct profits. Nature laughs at a miser. He is
like the squirrel who buries his nuts and refrains from
digging them up again. Lo! they sprout and grow into
trees. In fine linen, steeped in costly spices, the mummy
is laid away. Thousands and thousands of years
thereafter, the Bedouin cooks his food by a fire of its
encasings, it generates the steam by which the traveler
is whirled on his way, or it passes into far-off lands to
gratify the curiosity of another race. The bee fills the
hollow tree with honey, and along comes the bear or the
man. —
Progress & Poverty
— Book IX, Chapter 1, Effects of the Remedy: Of the
Effect upon the Production of Wealth
CONSIDER the effect of such a change upon the labor
market. Competition would no longer be one-sided, as now.
Instead of laborers competing with each other for
employment, and in their competition cutting down wages
to the point of bare subsistence, employers would
everywhere be competing for laborers, and wages would
rise to the fair earnings of labor. For into the labor
market would have entered the greatest of all competitors
for the employment of labor, a competitor whose demand
cannot be satisfied until want is satisfied — the
demand of labor itself. The employers of labor would not
have merely to bid against other employers, all feeling
the stimulus of greater trade and increased profits, but
against the ability of laborers to become their own
employers upon the natural opportunities freely opened to
them by the tax which prevented monopolization. —
Progress & Poverty
— Book IX, Chapter 1, Effects of the Remedy: Of the
Effect upon the Production of Wealth
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