If their wages had simply dropped out of the skies,it might have been good for everybody.So,again,Mill has to labour the point (107)that society does not gain by unproductive expenditure,that is,by the support of horses and hounds,but by 'production';that is,by expenditure on mines and railways.He lays down a principle which,he says,is most frequently overlooked,that ,demand for commodities is not demand for labour.'His doctrine has been ridiculed and treated as paradoxical.It implies at any rate an important distinction.It is intended to draw the line between changes which merely mean that a different employment is being found for labourers,and changes which mean that a greater sum is being devoted to the support of labourers in general.(108)The argument against such fallacies might naturally be summed up by saying that the real point to be considered was the effect of any change upon the 'wage-fund.'The error,common to all,is the confusion between the superficial and the more fundamental --the functional,we may say,and the organic changes.They are exposed by tracing the secondary results,which have been overlooked in attending to the more palpable but less conspicuous part of the phenomenon.Then we see that some changes imply not a change in the quantity of labour supported;only a redistribution of the particular energies.They do not affect the 'wage-fund.'The phrase was useful as emphasising this point;and useful,though it might be in some sense a truism.Truisms are required so long as self-contradictory propositions are accepted.But a further problem is suggested.What,after all,is the wage-fund?What determines its amount?If this or that phenomenon does not imply a change in the fund,what does imply a change,and what are its laws?To this we get,in the first place,the old Malthusian answer.Whatever the fund may precisely be,the share of each man will be determined by the whole number depending upon it.This is obviously true,but does not answer the question,What actually fixes the sum to be divided?That problem seems to drop out of sight or to be taken as somehow implicitly answered.The answer should,however,be indicated by Mill's treatment of the most important cases.
The distribution problem,made prominent by Ricardo,was emphasised by controversies over the poor-law or the factory acts and trades-unionism.The economists had been constantly endeavouring to expose quack remedies for poverty.The old attempts to regulate wages by direct legislation had been too long discredited to be worth powder and shot.Mill,in discussing 'popular remedies for low wages,'(109)argues that competition 'distributes the whole wage-fund among the whole labouring population.'If wages were below the point at which this happens there would be 'unemployed capital';capitalists would therefore compete and wages would be raised.If,on the other hand,law or 'opinion'fixes wages above the point,some labourers will be unemployed,or the 'wage-fund'must be forcibly increased.
'Popular sentiment,'however,claimed that 'reasonable wages'should be found for everybody.Nobody,he says,would support a proposal to this effect more strenuously than he himself,were the claim made on behalf of the existing generation.(110)But when the claim extends to all whom that generation or its descendants chooses 'to call into existence'the case is altered.
The result would be that the poor-rate would swallow up the whole national income,and the check to population be annihilated.
