ECONOMIC LAWS.

Press, Volume LVII, Issue 17295, 5 November 1921, Page 7

ECONOMIC LAWS.

WORK AND WAGES. ' PROFITS AND LOSSES. (from oub own conrasroNDENT.) LONDON, September 20. In his presidential address in the Section of Economic Science and Statistics, at the Edinburgh meeting of the British Association, Mr W. L. Hichins remarked it was continually being said that the standard wage should be the 1914 wage, plus a percentage equivalent to the increase in the cost of living since that date. "And yet," he proceeded, "we are obviously poorer thou wo were in 1914, and it is equally obvious that our foreign trade is slipping ii'om our grasp, owing to the competition of Germany and America. From a practical point of view what is necessary is not to work out a standard wage which wo should like to pay if we could, but to determine what wages we can afford to pay in each industry without losing our foreign markets. This can only be settled by a frank discussion between employers and employed, and it is essential that employers should disclose all the facts. This would reveal that in many industries prices have fallen faster .than costs, and that work is being taken at a loss. "It is idlo to hope that the living wage can be based permanently on any <;iven standard of civilisation; it is bound to fluctuate at different periods, and will depend largely on whether the industries or a country are progressive, stagnant, or retrogressive. Wages above the minimum or living wage are determined mainly by the law of supply and demand, but certain other factors enter into their determination, notably the principle that wages should be proportioned to the value of the service rendered, implying payment by results. The artificial prosperity and trade activity that followed upon the war are at an end, and the reaction has begun. ' How long it will last no one can toll, but it is reasonably certain that we must expect a period of depression and falling wages and profits. It is essential that tho wage-earners should recognise that reductions are inevitable, and not the fault of the capitalists; they should be satisfied that all reductions proposed, are reasonable. The capitalist, on his side, must be prepared to accept his full share of sacrifice, and be ready, if need be, as a-temporary measure, not merely to receive no profits, nut to face a loss, in order that our difficulties may be tided over until our trade recovers and prosperity returns." The Fallacy of a Pull Stomach". An animated discussion followed. Mr Austin Hopkinson, M.P.. expressed a want of faith in industrial arbitration, and condemned "the tendency to jolt into the blind alley of Whitleyism. He added:—-"The right theory of industry is the team, master and men, and competition is between groups rather than between classes. It Bplits industry vertically instead of horizontally. Wherever in history man wanted to develop a higher life the first thing he did was to go hungrv or cut down his material comfort. . By seoking to maintain th e higher standard obtained during the war Laboui is to-day eating the seed corn. The man I am endeavouring to down in business and industry is not the man 1 employ, but the rival employer. Provided employers observe the rules of the game, it is only competition and not warfare. If my rival aoes not play the game, and, let us say, bribes the order clerk of my customer, then I smash him if I can." (Laughter.) Mr Hopkinson next turned to the question of the living wage, and said there was not much hope for civilisation while we had a supposition that progress came simply through fuller stomachs. Whenever a man in the past had wished to live a higher life, the first thing he did was to reduce his material comfort ub far as possible. (Laughter.) Much of our trouble and unemployment at the present time were due to the errors of those who directed organised labour. Unemployment was due to the fact that we endeavoured to maintain a higher standard of living than the economic situation could justify. He went on to describe the system of profit-sharing which ho had introduced into his own works, and said that this had resulted in turning the works into a practical school of economics for the training of trade unionists. Some of his men had learned that an employer, when he kept his profits for himself, did not spend the money in riotous living, but put a good deal of it back into tne business in the form of new buildings and new tools. They had also realised that if the money was shared among the workers the majority of the men spent what they got, and were neither able nor willing to use it as capital for the extension of the business. The capitalist was a man who would do the necessary saving for the people who themselves would not save. While the workers had gained liberty from their employers, they had delivered up that liberty to the trade anions, and economically they were no more free now than they wore before. Until a man had some individual capital under his own control he could not regard himself as economically a free man. Standard Wage for Employers. Mr H. J. Burgess urged that there ougbt to be a standard wage for employers as well as for workers, and that employers should be compelled to do a, certain amount of work for their money; Mr Arnold Lupton argued that there was no real antagonism between employed and employer, but that trade union- leaders sought to promote, a feeling of antagonism; Sir W. Beveridge said the whole wage system was now on its trial. He would like to see universal publicity as to profits. A new and revolutionary method of determining wages was outlined by Professor A, W. Kirkcaldy. Under bis scheme the ability of the worker is graded, and he is paid a wage according to his skill and ability. Trade unions themselvesj said the Professor, would be responsible for the grading of their members, and if the initial experiments proved a success Labour would tend more and more to grade itself. He suggested that an experiment might bo made with the method in one of our industries.