F.— ECONOMIC SCIENCE AND STATISTICS. 121 



first Trade Boards in some cases established minima that were double 

 the rate of earnings ruling in important districts before. But the 

 significant and essential change was the change in procedure. Wage- 

 rates in any case have to be adjusted to changes in the demand for 

 different kinds of labour, changes in the purchasing power of money, 

 changes in the general prosperity and activity of industry. Before the 

 war, outside the organised industries, the adjustment was made by the 

 individual action of the employers, who first felt the need ; to-day the 

 process of general wage-changes has, we may say, been constitutionalised. 



It is the system resulting from this change that I refer to as ' the 

 public regulation of wages.' It is only partially due to the direct inter- 

 vention of the State, although the legalising of trade union activity was 

 essential to the development of effective collective bargaining without 

 the State's direct intervention. Whether, however, wage-changes are 

 negotiated by voluntary industrial councils, spontaneous negotiations 

 between trade unions and employers' associations, or statutory Trade 

 Boards and Agricultural Wages Boards, the result is the same. A change 

 cannot be effected without public discussion between representatives ; 

 when effected, it applies generally to the trades and occupations repre- 

 sented ; it is the outcome of an attempt to allow for all the economic 

 factors in the situation, not of an attempt to impose a priori principles of 

 social justice upon industry ; it is a procedure for adjusting wages by 

 agreement, rather than a policy aimed at over-riding the commercial 

 considerations that have determined wages in the past. It is ' public ' 

 in the sense that it involves formal discussion by representatives, and 

 results in publicly formulated standards ; it is ' regulation,' only in the 

 sense that it provides in this way for the formal consideration of the 

 factors affecting wages by the representatives of employers and wage- 

 earners, and the embodiment of the result in a formal agreement. 



Although I am concerned here only with British experience, I may 

 note that the change is not confined to Great Britain. The pioneers of 

 this new procedure are the States of the Australasian Dominions, whose 

 example influenced Great Britain, in spite of the difference in conditions. 

 There the change took the form rather of the substitution of arbitral 

 determination of wage-changes than of the extension of collective 

 bargaining, and the results are the subject of controversy. There is, 

 however, a good deal of evidence to support the view, that there also 

 the change was one of procedure only. Arbitration did not, because it 

 could not, materially affect the economic factors that ultimately deter- 

 mine what wages can be paid ; and the course of wages, as formulated 

 by arbitration, was much the same as it would have been — with a time- 

 lag and less uniformity — had there been no arbitration. In other words, 

 the arbitration authorities interpreted — and interpreted with fair accuracy 

 — forces which they could not in any case control.^ 



* Cf. F. C. Beuham in London Essays in Economics (1927), p. 226: "Our 

 conclusion is that in the main average real wages have not been fixed much higher 

 that! they would in the absence of wage-regulation." Cf. Report of Proceedings of 

 the National Conference (1928) : New Zealand, papers by Professors Fisher and 

 Belshaw. 



