242 TRANSACTIONS OF SECTION F. 



management even of so simfile a business as that of collecting and distributing 

 letters and parcels has not been an unqualified success. Where the business 

 is more complicated, as in the other examples, the success has been even less 

 conspicuous. What reason have we to hope then in such intricate matters as 

 the Railv^ays or the Mines better results wrill follow ? 



The incentive of individual gain will have disappeared and with it the readi- 

 ness to accept such risks as those to which reference has already been made. 

 We may easily find that the developments needed to find employment for our 

 young people is not forthcoming, for without such risks being taken no growth 

 of employment will take place. Unless I am much mistaken a great temptation 

 will be put before politicians to make concessions to the huge army of voters 

 who will be in the direct employment of the Govermnent. 



The experience of these five years has failed to t-each the lesson that you 

 cannot touch one branch of labour without affecting all others. An advance of 

 wages given to one section will inevitably be demanded by all others. The 

 result will be prejudicial to the whole community. As regards each individual 

 trade it may be of little moment what we call the wages, the wage earner has 

 in the past obtained a certain (very large) percentage of the whole value of 

 the product ; whether it is called one hundred or two hundred is of little moment 

 unless indeed he can succeed in obtaining for himself higher rates of wage than 

 those prevailing in other industries. But as regards international trade the 

 position may be very different, and we may find ourselves shut out of foreign 

 markets because our wages are made artificially high, just as we should be 

 excluded if, for example, the shipowners could compel lis to pay inordinate 

 freights on some indispensable raw material like cotton. 



A cure will speedily come, but it may come after great suffering has been 

 inflicted on the whole community. Parliament can easily impose on the em- 

 ployer, whether a private individual or the State, the payment of a certain 

 wage if a man is employed, but one thing it cannot do and that is compel the 

 employment of the man at a wage which the price of the article he produces 

 will not suffice to pay. The man will remain unemployed. That is the drastic 

 remedy which economic law imposes. We may escape it by making up from 

 some other source the deficiency if we insist on having the article and refuse to 

 pay the cost. But this remedy is only applicable to some small part of our totai 

 product. When we come to such industries as those now talked of it is 

 impossible. We must make the industry self-contained. 



The hope that by transferring its ownership to the State from the individual 

 will enable us to pay more is foredoomed to disappointment. There is indeed 

 one — and only, one — ^way in which higher wages can be obtained. That is by a 

 greater product per unit of capita] and per unit of wage. If ?n article now 

 produced at a combined capital and labour cost of, say, 100 can by improved 

 methods be produced at, say, 80 and still sold for 100, and if capital is still 

 satisfied with its former share, then the whole of the extra 20 will come to 

 labour. Long experience teaches me that it is in this way that wages have 

 advanced in the past and that in this way alone can they be further increased 

 in the future. 



But it may be said that those most concerned are not striving alone, or even 

 chiefly, for higher wages, but desire to participate in the management and to 

 bear their part in deciding the questions of policy which up to now have been 

 in the hands of the employers. To this no fundamental objection can be raised. 

 The more completely the men engaged in any enterprise understand it the better 

 it will probably be for the whole. But large questions of policy require know- 

 ledge and appreciation of circumstances which can with diflRculty be acquired by 

 persons whose life is necessarily passed in quite other surroundings. That the 

 fullest information should be given to the persons in question cannot be denied. 

 The claim to deal with matters of management lying quite beyond their com- 

 petence cannot be conceded. The final impulse comes from one mind which cannot 

 divest itself of its responsibility nor exercise it under such conditions as those 

 suggested would impose. 



In the brief compass of an hour I have sought to describe the difficult 

 situation in which we are placed and to enumerate some of the intricate economic 

 and social problems which call for solution. It is impossible to view the future 



