F.— ECONOMIC SCIENCE AND STATISTICS. 111 
wages but for fluctuations in nominal wages are commonly enforced by 
Trade Union action. In so far as such standards are adjusted to meet 
changes in the general price-level due to fluctuations in the quantity of 
currency they tend to restore and maintain the normal rates of real 
wages; but when they are adjusted to meet changes in the general price- 
level due to an increase or decrease in the production of wealth, or to 
maintain for as many workers as before ina given occupation the standard 
of living formerly enjoyed by itsmembers when the conditions of ordemands 
for their work have changed, the position is different. If, for instance, the 
price-level falls because there is greater production in the country, there 
is no reason why the worker should not share in that increased wealth 
by retaining at least his former nominal wage, and so be enabled to raise 
his standard of living. It is also to be feared that the better-paid workers 
at least should share in the lessened wealth which is represented by a 
higher price-level when prices rise because wealth is scarce. Finally, 
with changing conditions the relative numbers of workers required for 
work of different types will vary, and if the relative wage rates may not 
vary labour will not be discouraged from entering occupations where it is 
not needed or encouraged sufficiently to enter those in which the demand 
for it has increased. This may lead to an increase in unemployment, 
acting in the same way as mistaken investments of capital in attracting 
labour to and locking it up in industries in which it cannot be absorbed 
at rates equivalent to those paid for similar labour elsewhere. 
This is well-trodden ground, from which we may pass to the disputed 
fields of subsidies, allowances, and contributory insurance schemes. For 
a wage which is ‘ above the normal’ is in effect a subsidy given to the 
_ worker in respect of a particular type of work. In a sense, nomenclature 
- matters little. We tend to call anything a wage which is given by an 
employer to a worker, and to call anything a subsidy which is given to a 
worker or an industry or anyone or anything else by the State, and to 
dub as taxes revenue collected by the State. For practical purposes this 
is the most convenient definition. But when we come to analyse payments 
above or below normal wages, we find that we are generally tracing their 
incidence and dealing with transferences of wealth rather than with costs. 
Sir Alfred Mond’s scheme is frankly a subsidy. It is better, he suggests, 
~to use available funds for paying the employed rather than the unemployed. 
For the sake of production, for the sake of preserving skill, and for the 
sake of ‘restoring normality,’ we are urged temporarily to subsidise 
employment wherever employers are prepared to add to the numbers of 
workers engaged. The source of the proposed subsidy will be discussed 
in another connection. 
Nor is there in effect much disguise about the ‘tax and subsidy’ 
nature of the family allowance system. Bachelors are to be taxed, or 
to tax themselves, for the sake of men who have families. It is recognised 
that it is on the whole unwise to put the administration of the ‘ tax and 
subsidy ’ in the hands of the employer, lest he should mistake a tax and 
subsidy scheme for a new wage system under which it would be greatly to 
his advantage to employ bachelors instead of married men. Once it is 
frankly admitted that large families neither force nor enable employers 
to pay high wages, we can if we wish settle down to a discussion of the 
ethical and economic advantages of family endowment. And we can 
