ECONOMIC THEORY IN A NEW RELATION 51 



recorded in statistical tables, need to be appealed to. Population is 

 increasing, capital is accumulating, and new methods of production 

 are' coming into use. The most important single result of any one of 

 these is a change in the productive power of labor, which sets the 

 standard of its pay. By way of illustration we may notice each of 

 these changes with reference to this single effect. 



On the basis afforded by common observation the effect of 

 each of these changes on the rate of pay for labor is now known. An 

 increase of population in itself and apart from any accompanying 

 change tends to reduce the productive power of a unit of labor and 

 thus to lower the standard of its pay. The more men there are 

 working in a field of a given extent and richness, the less each one 

 of them can create, and the less he can expect to get. 



On the other hand, an increase in the amount of capital tends 

 to raise the standard of wages. If we enrich the field in which a 

 force of men is at work, leaving the size of the force unchanged, the 

 more each one of the men will create, and the more, in the absence 

 of excessive friction, he will actually get. 



An improvement in the methods used in producing commodities 

 works, as far as wages go, in the same direction as an increase of 

 capital, in that it enlarges the amount which a single worker can 

 create and secure. If population grows moderately while capital 

 accumulates and methods improve rapidly, the standard of wages 

 moves upward at an encouraging rate, and the actual pay of working 

 men pursues this rising standard, though lagging somewhat behind it. 

 A check on the growth of population and a stimulus for the accumu- 

 lation of capital and for industrial discovery and invention would 

 together produce a result that is ideally desirable. By reason of the 

 enlarged total amount of his fund the capitalist would get an enlarged 

 total income, though the rate of interest would have somewhat fallen. 

 The entrepreneur, by means of the improved methods of production 

 put at his disposal, would have increased profits, and the laborer, by 

 a compounding of the various influences at w r ork, would get a large 

 increase of pay. 



Will these gains be neutralized, as an old view of the law of 

 population would have led us to suppose, or will they be perman- 

 ent? Will the worker who has gained something be in a position 

 to gain more? 



It is already beginning to be evident that the latter effect is a 

 probable one, and there is pressing need of statistics that will fully 

 test this probability. An increase of general prosperity means the 

 promotion of men from an ill-paid class to a better paid one and a 

 numerical shrinking of the worst-paid class. This reduces the pro- 

 portion of population belonging to the class which shows a high 

 birth-rate and increases the proportion belonging to those which 



