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The Pamphlet Collection of Sir Robert Stout: Volume 76


page 16


Mr Macgregor devotes the longest of his articles to an exposition of what he calls the ecconomic fallacy of a minimum wage, and according to the old school of ecconomists he is right. If, for example, a man obtains a contract from a public body, and takes advantage of a depression in the labour market to employ men at 8s 6d a day; that also is quite right from the point of view of the ecconomist. The ecconimist is simply buying in the cheapest and selling in the dearest market. If a large firm of drapers employ a girl for nothing a week during the first 12 months, and at the end of that period discharge her, taking on another at the same wages, that is also quite right, and another illustration of the divine law of supply and demand. And if a humane legislature, more concerned about the welfare of humanity than with the sophistry of the schools, steps in and says to public bodies that they shall not let a contract unless the contractor undertakes to pay a living wage, and tells the draper that he must either be content with smaller profits or charge more for the dresses, that is wrong, according to Mr Macgregor. Be it so, and let us see whether it will load us.

If it is wrong to intervene in the matter of wages, it is also wrong to meddle in other conditions of labour that may enhance prices. Sanitation, overcrowding, provision for decency, the adoption of health preserving precautions—these are all matters that should be left to the individual grace of the employer, or the law of supply and demand. Whence it follows that all labour legislation, though it has taken boys and girls from slavery in coal mines, though it has admitted a ray of sunlight to the mills of Lancashire, though it has enfranchised the woman chain makers of Cradley is a huge blunder from an ecconomic point of view, and ought not to have been entered upon because it increases the cost of production. If this involves the principle that we must produce goods as cheaply as we can, without regard to the condition of the workers who produce them, then we ought to employ the cheapest labour of all, which is slave labour, obtained merely for the cost of subsistence. It is not to page 17 be supposed that even Mr Macgregor's clients would go so far as to admit this openly, but this is the logical deduction from his contention. And if they are not prepared to go so far, but are willing to admit that some restriction should be placed on employers, how can it be shown that a living or minimum wage is not a reasonable restriction?

Undoubtedly the tendency of a minimum wage is to become a maximum one. It is especially liable to become so when there are more men than jobs for them to do. But it is humanitarian in its intention, and is the admission of a principle that one man has no right to employ another under conditions that will not yield him a comfortable subsistence. If an industry will not do this, then it were better that it perished.

A great deal has been heard of the enhanced cost of living, which is attributed to the demands of the unions Mr Macgregor's illustration is the rent of houses in Dunedin. "The landlord may have to pay almost one third more for material in order that the worker may receive higher wages, but he must not raise the rent." Raise what rent? If a man builds a house he fixes a rent which will presumably give him a sufficient return for his capital. He is quite within his rights in doing so. But that p'.ea does not justify him in raising the rent of houses already built. He may raise them because there is a demand for bouses, and they have been raised in some cases 25 per cent in the city, on tenants who have been occupants for many years, but the landlord is not honest enough to fall back on the law of supply and demand. By his advocate he attributes his piracy to the higher prices of labour and material. And the demand for municipal dwellings is to place the supply of shelter, which is almost as great a necessity as food, above the law of supply and demand, which unrestricted leads to the slums that are the despair of social reformers.

As a matter of fact, the increase in the price of living is the result of a conspiracy among retailers, who have learned the lesson of combination too well. Specific instances can be quoed where the baker compelled to pay an additional 30s a week to a man and a youth, has raised by a halfpenny each the 2000 loaves they produced and thus recouped himself nearly fourfold, The butchers played the same game, though they were to some extent, but not nearly so much as alleged, justified by the price of stock.

The case of the coal merchants, raising the price by a shilling because of the operation of workman's compensation is page 18 already familiar. The foolish and injudicious remark of the Premier, though afterwards qualified and explained, lent momentum to the cry, and not only gave every petty retailer from Auckland to the Bluff an opportunity to bawl out against the labour laws, but travelled to Australia, and furnished the opponents of industrial Arbitration with a timely and potent weapon.

The bogey of Mr Macgregor, the labour leader, the Lycurgus, as he calls him, is not the fool he is assumed to be. He is not ignorant of the laws of capital, and is very far from imagining a capatalist to be an enemy. But the capitalist is an enemy not only to the worker, but to mankind at large, when he enslaves labour so that he may exact an undue share of profit. If Mr Macgregor will examine the list of properties for sale in Dunedin for one week and note the price asked and the return offered by way of rents, he will see that house property is expected to yield from 10 to 20 per cent on the outlay.

If it were possible to examine the books of some of the largest firms, he would find that the capital, originally borrowed at high rates from outside sources, is doled out three or four times over to subsidiary firms, each posing as an independent employer, and each levying his quota of blackmail, until it reaches the lowest stratum in the man who deals direct with the worker. The toil of the worker has to yield three or four profits, and his is the only medium that is supposed to be elastic. All the successive middlemen must have their four or five per cent on the turn over; it is the workman's wage only that must obey the law of supply and demand.

A typical case may here be mentioned. A group of money lenders hold money for investment. They employ an agent, who in turn secretely pulls the strings of a factory, or several factories. The nominal proprietor of each factory poses as the employing principle, but the workers have to maintain (1) themselves, (2) their nominal employer, (3) the lenders' agent, and (4) the lenders. And all the intermediaries wear purple and fine linen and fare sumptuously every day, while the workers earn a bare and precarious subsistence. A beautiful instance of the law of supply and demand.

This has come about simply because labour was disorganised, and children must eat. This disorganisation first permitted of the accumulation of capital in alien hands. Labour was indispensable to its accumulation; it is indispensable in its use, and its claims to the first consideration in the allocation of the results are undeniable, for they are sanctioned by the dictates page 19 of humanity. There is a point at which pressure must cease. That point is the decent subsistence of the worker—in other words a minimum wage. This implies a constant pressure downward. But in the clearer day to come, when the rights and claims and duties of each—labour and capital—are better defined and better understood, the right to a decent subsistence will be tacitly conceded, and the minimum wage, with its undeniable imperfections, will be regarded as the Brown Bess of industrial warfare. In that day, which will be one of international and industrial peace, brought about alike by perfection in the arts of war, the moanings of such critics as the one we are now replying to will be as silent as bis native Banshee.