128 SECTIONAL ADDRESSES. 



Before tlie war the policy of maintaining wage-rates in spite of 

 unemployment could be practised only by the organised minority of 

 wage-earners. The majority were unable to resist reductions that were 

 needed to maintain employment ; and any workers excluded by the 

 policy of the stronger unions could compete for employment in industries 

 in which wages were not held above absorption level. To-day there are 

 no imorganised industries in this sense ; wages are held up, either by 

 trade union or Government support, generally, and workers excluded 

 from employment by a general holding up of wage-rates above absorption 

 level have no resort except unemployment relief. Before the war, again, 

 in the absence of any general unemployment relief, it was impossible to 

 maintain wage-rates generally at a level that restricted employment 

 throughout industry ; somewhere, usually at many points, wages (in 

 relation to efficiency) would be reduced to the level at which expansion 

 could take place ; the condition ' in relation to efficiency ' is necessary, 

 because in fact expansion took place in the high-wage rather than the 

 low-wage industries. Has the extension of collective bargaining destroyed 

 this plasticity, this automatic adaptation of wage-rates to opportunities 

 of employment ? 



The mere substitution of regular for informal discussion does not by 

 itself make it more or less difficult to adjust wage-rates to varying condi- 

 tions. The change is one of procedure only ; it should, if it has any effect, 

 tend to bring under notice more comprehensively and display more 

 accurately the factors that have to be taken into account in finding the 

 ' right ' wage. If this is taken to be the wage that measures the marginal 

 productivity of the number of workers available, it is just as likely that 

 the right figure would emerge from the deliberations of a representative 

 joint committee or an experienced arbitrator, as from the unco-ordinated 

 bargainings of a multitude of isolated individuals. Moreover, as we have 

 seen, individual bargaining is usually impracticable. The choice is 

 rather between adjustment by discussion between representatives of 

 organised bodies of employers and workpeople, and a guerrilla warfare 

 waged by individual employers against the combined resistance of un- 

 organised, but not necessarily demoralised, workers, fighting for what 

 they conceive to be their ' rights.' The largest concessions by wage- 

 earners to meet changed economic conditions since the war have been 

 made by some of the most strongly unionised trades, such as iron and 

 steel, engineering and shipbuilding. It is true that the wage-reductions 



class to secure an increased share of the product of the nation's economic activity at 

 the expense of other, still unorganised, classes. In the United Kingdom this 

 possibility is of less importance than elsewhere, since wage -earners are so large a part 

 of the community ; though there has been some redistribution since 1914 in favour of 

 wage-earners as a class at the expense of the rentier class, particularly the land-owning 

 section of it. In other countries, where industrial wage-earners alone enjoy the 

 advantages of trade union or Government regulation of their remuneration, backed 

 up often by Protective tarifis, and there are large numbers in the ' unprotected ' 

 classes, particularly in agriculture, the possibility is important. With other influences 

 the public regulation of industrial wages helps to account for the world-wide 

 divergence of industrial and agricultural prices. Cf. an article by the present writer 

 on World Prices and Trade Barriers in The Journal of the Textile Institute, 1928, No. 6. 



