TRADE-UNIONS 9 



wages fund be persuaded to increase for their benefit ? How- 

 does it happen to be exactly the amount it is ? What will 

 make it rise, what will make it fall ? The stock answer is, My 

 poor fellows, do not delude yourselves ; the wages fund depends 

 on the profits of capital ; if profits are large the fund may in- 

 crease, but everything tending to diminish the profits dimin- 

 ishes the wages fund, so if you or some of you for a little while 

 get increased wages, diminishing our profits, the fund to be 

 divided among you next year will be smaller; and so, however 

 much we may regret it, you will infallibly get less than you do 

 now ; what you are now getting is the market price of your 

 labour the laws of political economy say so.' Workmen do not 

 always believe this, and sometimes do get an increase of wages ; 

 but the argument of the economists is elastic they say the 

 wages fund has increased ; your new wages are now the market 

 price of labour ; you would have got it without asking. But all 

 workmen are not quite sure that this is true, nor are we. The 

 fallacy lies in the premiss that everything which diminishes 

 profits diminishes the wages fund, or the saving which the 

 capitalist applies to the purchase of labour. Of course the 

 tendency in that direction must be admitted, but the motion of 

 a bodv is not determined by one force onlv : to deduce its motion 



v i/ w * 



by calculation from the forces in action, we must take all the 

 forces into account, all the tendencies : and we venture to say 

 that in a large number of cases diminished profits on capital 

 may cause an increase in the saving applied to the purposes of 

 production. Take a concrete case first. A manufacturer having 

 a large fixed capital in the form of a factory, has for some years 

 cleared as gross receipts 100, 0001. he has paid as wages 

 80,000/. per annum ; for simplicity's sake we may assume that 

 he pays for his raw material and tools in wages only ; he has 

 spent 20,OOOZ. per annum on his personal establishment. 

 Under pressure from trade-unions he has thought it wise to 

 give an increase of wages to his workmen for one year, though 

 they have neither diminished in numbers nor have his profits 

 increased ; he would rather not face the loss entailed by a 

 strike. Such things do happen. That year he pays his work- 

 men 90,000/., and finds he has only 10,0007. clear profits. 

 "V\ hat will this man do ? Will he next year pay a smaller 



