12 POLITICAL ECONOMY 



are taken. If, it is said, the profits from which savings are 

 made for re-investment diminish, how can we expect savings 

 to increase ? But the renewed savings for re-investment which 

 constitute the great bulk of the wages fund do not come out of 

 profits, but out of gross receipts. Our typical manufacturer 

 does not annually obtain the 80,OOOL or 90,OOOZ. used for wages 

 out of his profits of 10,000. or 20,OOOL, but out of his gross 

 annual receipts of 100, 000. So that diminished profits do not 

 entail a diminution in the fund from which renewed savings are 

 made. They do diminish the fund from which new savings 

 are drawn, and no one will deny that in face of falling profits 

 and rising wages new investments in a particular trade will be 

 checked. 



Hitherto we have assumed that notwithstanding the in- 

 creased cost of production consumers would pay no more for 

 the produce. If they do pay more, the fund from which the 

 renewed savings are drawn will increase also, and the wages 

 fund will or may be increased still further. We took the other 

 case first, as more unfavourable to our views. 



But, it may be urged, the argument as to a possible increase 

 of the wages fund, notwithstanding diminished profits, cannot 

 hold good in those employments which require but little fixed 

 capital. Undoubtedly the more easily capital can be trans- 

 ferred from one business to another, the sooner will any pos- 

 sible increase of wages fund applicable to that business reach 

 its limit; but this same transfer of capital is by no means 

 an easy matter, as any manufacturer or man of business will 

 tell us. 



Some persons in speaking of the wages fund seem to imagine 

 that there would be a material as well as a moral difficulty in 

 paying increased wages. They reason as if wages were limited 

 by the amount of cash which manufacturers hold. It is of no 

 use, they say, that the manufacturer may be willing to pay in- 

 creased wages, if he has not already saved money enough for 

 the purpose. A man cannot give what he has not got. A man 

 who will open his eyes and will look at the way in which wages 

 are paid in practice, will never be deceived by this fallacy. 

 There is a very considerable available sum in the hands of all 

 solvent persons and manufacturers, used to provide agniust 



