Mr. Thornton enters into a minute examination of the limits to the efficacy of Trades' Unions--the circumstances in which increased wages may be claimed with a prospect of success, and, if successful, of permanence. These discussions I must content myself with recommending to the attention of the reader, who will find in them much matter of great value. In the present article there is only room for the most general considerations, either of political economy or of morals. Under the former aspect, there is a view of the question, not overlooked by the author, but hardly, perhaps, made sufficiently prominent by him. From the necessity of the case, the only fund out of which an increase of wages can possibly be obtained by the labouring classes considered as a whole, is profits. This is contrary to the common opinion, both of the general public and of the workmen themselves, who think that there is a second source from which it is possible for the augmentation to come, namely, prices. The employer, they think, can, if foreign or other competition will let him, indemnify himself for the additional wages demanded of him, by charging an increased price to the consumer. And this may certainly happen in single trades, and even in large branches of trade, under conditions which are carefully investigated by Mr. Thornton. The building trade, in its numerous subdivisions, is one of the most salient instances. But though a rise of wages in a given trade may be compensated to the masters by a rise of the price of their commodity, a rise of general wages cannot be compensated to employers generally by a general rise of prices. This distinction is never understood by those who have not considered the subject, but there are few truths more obvious to all who have. There cannot be a general rise of prices unless there is more money expended. But the rise of wages does not cause more money to be expended. It takes from the incomes of the masters and adds to those of the workmen; the former have less to spend, the latter have more; but the general sum of the money incomes of the community remains what it was, and it is upon that sum that money prices depend.
There cannot be more money expended on everything, when there is not more money to be expended altogether. In the second place, even if there did happen a rise of all prices, the only effect would be that money, having become of less value in the particular country, while it remained of its former value everywhere else, would be exported until prices were brought down to nearly or quite their former level. But thirdly: even on the impossible supposition that the rise of prices could be kept up, yet, being general, it would not compensate the employer; for though his money returns would be greater, his outgoings (except the fixed payments to those to whom he is in debt) would be increased in the same proportion. Finally, if when wages rose all prices rose in the same ratio, the labourers would be no better off with high wages than with low; their wages would not command more of any article of consumption; a real rise of wages, therefore, would be an impossibility.
It being obvious, from these accumulated considerations, that a real rise of general wages cannot be thrown on the consumer by a rise of prices; it follows also that a real rise even of partial wages--of wages in one or a few employments--when thrown on the consumer by an increased price of the articles produced, is generally a gain made, wholly or in part, at the expense of the remainder of the labouring classes. For, the aggregate incomes of the purchasing public not being increased, if more is spent on some articles of consumption, less will be spent on others. There are two possible suppositions. The public may either reduce its consumption of the articles which have risen, or it may retrench by preference in other articles. In the former case, ff the consumption falls off in full proportion to the rise of price, there is no more money than before expended in the article, and no more, therefore, to be divided between the labourers and their employers; but the labourers may possibly retain their improved wages, at the expense of profits, until the employers, weary of having less profit than other people, withdraw part of their capital. But if the consumption does not fall off, or falls off in a less degree, so that more is really spent on the articles after than before the rise, the prices of some other things will fall from diminished demand; the producers of those other things will have less to divide, and either wages or profits must suffer. It will usually be wages; for as there will not be employment in those departments for so many labourers as before, some labourers will be thrown out of work.
As Mr. Thornton remarks, the general increase of the incomes of the community through the progress of wealth may make up to the other branches of the productive classes for what they thus lose, and convert it from an absolute loss, to the loss of a gain--the gain which as a body they would have derived from the general increase of wealth, but of which the whole, or more than the fair share, has been drawn off by a single branch. Still, the rise of wages in any department is necessarily at the expense either of wages in other departments or of profits, and in general both will contribute to it. So long, at least, as there are any classes of labourers who are not unionised, the successes of the Unions will generally be a cause of loss to the labourers in the non-unionist occupations.
From the recognition of this fact arises a serious question of right and wrong, as between Unionists and the remainder of the labouring classes.
