December 30, 1904.] 



SCIENCE. 



901 



the wage fund, because if the wage-fund 

 were increased and wages were temporarily 

 raised, population, according to Malthus, 

 always pressing on the limits of subsistence, 

 would be enabled to expand, and the in- 

 crease in the number of laborers would in- 

 crease the supply relatively to the wage 

 fund, and therefore lower wages. Ricardo 

 held substantially this doctrine, as also did 

 Senior, James Mill, John Stuart Mill, and 

 most of the older writers of the classical 

 school, though on this subject, as on others, 

 John Stuart Mill later somewhat modified 

 his views, and was, perhaps, often incon- 

 sistent. 



As a result of more scientific considera- 

 tion, this theory was practically abrogated, 

 and a new one arose, which, in brief, is the 

 theory that production furnishes the true 

 measure of wages. Curiously enough, this 

 theory was first clearly advocated in our 

 own country, and by the late President 

 Francis A. Walker, when he argued that 

 the wage-fund theory and its socialistic 

 corollary were wholly false ; that wages de- 

 pended upon the productivity of labor and 

 not upon capital. He says, in his work on 

 the 'Wages Question,' that the popular 

 theory of wages is based upon the assump- 

 tion that wages are paid out of capital, the 

 saved results of the industry of the past. 

 Hence, it is argued that capital must fur- 

 nish the measure of wages. Walker held, 

 on the contrary, that wages are, in a philo- 

 sophical view of the subject, paid out of 

 the product of present industry, and hence 

 that production furnishes the true measure 

 of wages, the employer purchasing labor 

 with a view to the product of labor, and 

 the kind and amount of that product de- 

 termining what wages he can afford to pay. 



This view has been very widely accepted, 

 both here and abroad, Mr. Atkinson accept- 

 ing and urging that the only way to raise 

 wages is to raise the prodiict; and apply- 

 ing his power of analysis, he says that in 



treating this question it must constantly be 

 kept in mind that money is but the instru- 

 ment of exchange, that real wages are what 

 the money will buy, and that there can not 

 be more real wages than the whole product 

 less the share of capital. If then, we can 

 even approximate the value of the product 

 and divide by the known number of per- 

 sons employed, we then approximate the 

 annual measure or average rate of wages in 

 terms of money. In other words, to state 

 it briefly, he says that capital must be paid 

 first in order to induce it to contribute, but 

 it is paid only just what is necessary in the 

 market to obtain it, and the rest of the 

 product goes to wages. 



The formula of Adam Smith, indorsed 

 and advocated by his followers, is now re- 

 vised, and should read, instead of as 

 quoted, as follows : ' ' The demand for those 

 who live by wages, it is evident, can not 

 increase but in proportion to the increase 

 of product which is destined for the pay- 

 ment of wages." There have been many 

 laws promulgated relating to wages, but I 

 think that the scientific attitude of the 

 present-day economists rests upon this the- 

 ory; and it must stand until science re- 

 states it, and restates it in such a way that 

 all or the majority of all economists will 

 accept the formula. Certainly we must 

 claim, and truthfully, that science has 

 either abrogated or very largely modified 

 the old theories relating to wages. 



Another line of inqiairy suggested by my 

 topic relates to the ever-present, irritating 

 and much-controverted questions in regard 

 to a tariff on imports. As yet science has 

 done but little in this respect, but I con- 

 ceive that it may and will do much in modi- 

 fying the extreme views on either side that 

 are held by economists, politicians and 

 statesmen. It may be granted that tariff 

 legislation relates entirely to the question 

 of expediency; that there is little, if any, 

 principle involved in the doctrines of either 



