F.—ECONOMICS. 103 
in the true sense of the word a unit. In my opinion the State has 
already gone too far in the direction of taking over the duties of parents, 
and I regard as deplorable the present tendeney to throw more and 
more of the burden in respect of housing, medical attendance, dentistry, 
food, clothing, and education on the State, thus relieving parents of 
“what should in large measure be their own responsibility. This policy 
breeds up a race of slaves—not free men. 
I have dealt so far with two principles by which wages are deter- 
mined—the law of supply and demand, and the principle of a living 
wage. I will now pass on to a third—the principle that wages should 
be proportioned to the service rendered. In some respects this result 
is achieved through the operation of the law of supply and demand, 
and in the last resort the price that one man is prepared to take and 
another to give for labour is the only practical criterion of its value. 
But the value of the service rendered is not merely the result of a 
haggling match. It is clearly just, for example, that a good worker 
should receive higher wages than a bad one, that the man who produces 
much should be paid more than the man who produces little. By far 
the best way of securing this end is through the establishment wherever 
possible of a piece-work or premium bonus system. Under such a 
system not only does the payment received bear a direct relation to the 
results attained, it also acts as an incentive to greater effort. It might 
naturally be expected therefore that the Trade Union Movement would 
encourage a system thai has such obvious advantages. Unfortunately, 
owever, some of the leading Trade Unions are opposed to payment by 
results, and, if they cannot suppress it altogether, are successful in 
preventing its extension. The explanation of “their attitude, of course, 
is a fear, often well justified by past experience, that payment by results 
will lead to speeding-up followed by an arbitrary reduction in the rates. 
‘It will lead me too far afield if I attempt a detailed discussion of this 
question, and I will merely say the objections, though serious, are by no 
‘means insuperable. Some firms, for example, have agreed that if an 
alteration is made in their piece-work list the saving shall always be 
used to increase the wages of some other section of their workers. In 
other cases a piece-work list is mutually agreed by representatives of 
employers and workers, and can only be altered after negotiation. I 
‘should like to emphasise the importance to our national industries of 
“encouraging payment by results, because it is one of the surest ways of 
‘Increasing efficiency. If the principle were accepted by both labour 
and capital, as it should be, a frank discussion would disclose the 
‘means of overcoming the abuses that experience has proved to exist. 
> 
But there will always be many classes of work where payment by 
‘results is not practicable, and where a time rate must be adhered to. 
Should some differentiation be attempted in respect of time rates? The 
iod of maximum efficiency lies between the ages of thirty and fifty, 
and it has been suggested that wages should be based on a sliding scale 
: according to age, reaching a maximum at the age of thirty and tapering 
off after the age of fifty. Any cut-and-dried rule of this description 
‘would be most objectionable and work with great harshness. There are 
Many men over fifty who are far more efficient than younger men, and 
