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312 time, however, it can hardly be questioned that through the unions nominal wages have on the whole risen at the expense of profits, that is to say, that combinations of labourers can make better bargains than individuals. But the debatable margin which may make either extra profits or extra wages is itself small (cf. Atkinson on the Distribution of Products), and at present the principal direct effect of trade unions is to make wages fluctuate with prices, a rise at one time being compensated by a fall at another. The unions can, however, look after the interests of their members in many ways which improve their general condition or raise the real rate of wages, and when nominal wages have attained a natural maximum, and some method of arbitration or sliding-scale is in force, this indirect action seems the principal function of trade unions. The effects of industrial partnership (cf. Sedley Taylor s Profit Sharing) and of productive co-operation (cf. Holyoake s History of Co-operation) are at present small in amount (compared with the total industry of any country) though excellent in kind, and there seem to be no signs of the decay of the entrepreneur system. Effects of The industrial revolution which took place about the machi- en( j o } as cen tury, involving radical changes in pro- wagea duction, destroyed the old relations between capital and labour, and perhaps the most interesting part of the history of wages is that covered by the present century. For fifty years after the introduction of production on a large scale, the condition of the working-classes was on the whole deplorable, but during the last fifty years great progress has been made. The principal results may be summed up under the effects of machinery on wages, taking both words in their widest sense. Machinery affects the condition of the working-classes in many ways. The most obvious mode is the direct substitution of machinery for labour. It is clear that any sudden and extensive adoption of labour-saving machinery may, by throwing the labourers out of employment, lower the rate of wages, and it is easy to understand how riots arose repeatedly owing to this cause. But as a rule the effect of labour-saving machinery in diminishing employment has been greatly exaggerated, because two important practical considerations have been overlooked. In the first place, any radical change made in the methods of production will be only gradually and continuously adopted throughout the industrial world; and in the second place these radical changes, these discontinuous leaps, tend to give place to advances by small increments of invention. We have an instance of a great radical change in the steam-engine. Watt s patent for "a method of lessening " the consumption of steam and fuel in fire- engines was published on January 5, 1769, and it may be said that the movement of substituting steam as a motive power is not yet over. Every day we hear of steam being extended to some new employment and to some out-of- the-way district. The history of the power-loom again shows that the adoption of an invention is comparatively slow. In 1813 there were not more than 2400 power- looms at work in England. In 1820 they increased to 14,150. In 1853 there were 100,000, but the curious thing is that during this time the number of hand-looms had actually increased to some extent (Porter s Progress of the Nation, p. 186). The power-loom also illustrates the gradual continuous growth of improvements. This is clearly shown by Porter. A very good hand-weaver, twenty-five or thirty years of age, could weave two pieces of shirting per week. In 1823 a steam-loom weaver, about fifteen years of age, attending two looms, could weave nine similar pieces in a week. In 1826 a steam- loom weaver, about fifteen, attending to four looms, could weave twelve similar pieces a week. In 1833 a steam- loom weaver, from fifteen to twenty, assisted by a girl of twelve, attending to four looms, could weave eighteen pieces. This is only one example, for, as Porter remarks, it would fill many large volumes to describe the numerous inventions which during the present century imparted facility to manufacturing processes, and in every case we find a continuity in the improvements. This twofold progressive character of invention operates in favour of the labourer, in the first place, because in most cases the increased cheapness of the commodity consequent on the use of machinery causes a corresponding extension of the market and the amount produced, and thus there may be no actual diminution of employment even temporarily ; and secondly, if the improvement takes place slowly, there is time for. the absorption of the redundant labour in other employments. It is quite clear that on balance the great increase in population in this century has been largely caused, or rather rendered possible, by the increased use of labour-saving machinery. The way in which the working-classes were at first injured by the adoption of machinery was not so much by a diminution in the number of hands required as by a change in the nature of the employment. Skilled labour of a certain kind lost its peculiar value, and children and women were able to do work formerly only done by men. But the principal evils resulted from the wretched conditions under which, before the factory legislation, the work was performed ; and there is good reason to believe that a deterioration of the type of labourer, both moral and physical, was effected. It is, however, a mistake to suppose that on the whole the use of machinery tends to dispense with skill. On the contrary, everything goes to prove that under the Progress present system of production on a large scale there is on of the the whole far more skill required than formerly, a fact wo which has been well brought out by Mr Giffen in his essay on the progress of the working-classes (Essays on Finance, vol. ii. p. 365). The two lowest classes of labour, which constituted each about one-third of the whole manual-labour class of the United Kingdom fifty years ago, now constitute only one-eighth each, and the remaining highest-paid class, which was only one-third fifty years ago, is now three-fourths of the whole. Taking this fact into consideration, it is easy to understand the estimate that the money wages of labour have on the whole risen 100 per cent, during this period. There seems every reason to believe that this rise in real wages will continue with every extension of the power of man over nature. For, taking the most general view of the subject, the more Tendency there is produced or acquired in exchange from other of profits countries, so much more is there to consume. But this very improvement in the production and acquisition of wealth facilitates the creation of new capital, and increases the rate of accumulation, and thus there is a greater intensity in the demand of capital for labour, and the rate of profits falls whilst the rate of wages rises. 1 (j. s. N|.) LAW RELATING TO WAGES. The legislature has often dealt with wages in a manner which modern political economy would not endorse. The amount was fixed by the Statute of Labourers in 1349, and by many succeeding statutes (see LABOUR). The policy of these Acts is now obsolete, although the British parliament has never gone as far as the con stitution of Louisiana, and expressly provided that no law is to fix the price of manual labour. To conspire to effect an alteration in wages is now no longer an offence. It was formerly punished very severely both at common law and under the provisions of various statutes, especially 2 and 3 Edw. VI. c. 15. Existing legislation on the subject of wages deals with the mode of their payment and recovery, and their protection from attachment and from the 1 For further information on this branch of the subject compare Atkinson, Distribution of Products and The Margin of Profits; Leroy-Beaulieu, repartition des Richesses ; Nicholson, Effects of

Machinery on Wages ; and Marshall, Economics of Industry.