Mill,unlike his rigid predecessors,is anxious to make out as good a case as he can for trades-unions.His sympathies are with them,if only the logic can be coaxed into approval.To elevate the labouring class is the one worthy object of political action.Yet he is hampered by the inherited scheme.However modified,it always involves the assumption of a fixed sum to be distributed by 'supply and demand.'Limit the supply of labour,and you raise the price.No other plan will really go to the bottom of the problem.The rate of wages is fixed by 'supply and demand';and the phrase seemed to imply that the rate of wages was fixed by a bargain,like the price of corn or cloth at a given time and place.Error,as Mill truly observes,(114)is often caused by not 'looking directly at the realities of phenomena,but attending only to the outward mechanism of buying and selling.'Are we looking directly at realities when we take for granted that 'labour'is bought and sold like corn and cotton?Are we not coming in sight of more fundamental changes,questions of the structure as well as the functions of industrial organism,which cannot be so summarily settled?Thornton argues as though workmen secreted 'labour'as bees secrete honey,and the value of the product were fixed by the proportion between the quantity in the market and the quantity which purchasers are prepared to take at the price.He only tries to show that the price may still be indeterminate.The 'equation'between supply and demand of which Mill had spoken might be brought about at varying rates of exchange.The whole supply might conceivably be taken off either at a high or at a low price.We need not go behind the immediate motives which govern a set of buyers meeting a set of sellers at an auction.Mill accepts the same assumptions.It is quite true,he says,that in the case of wages various rates may satisfy the 'equation.'The whole labouring population may be forced to put up with starvation allowance or may be able to extort enough to raise their standard of life.
This,he says,upsets the 'wage-fund'doctrine,hitherto taught by nearly all economists 'including myself.'(115)Moreover,the employer has the advantage in the 'higgling,'owing to what Adam Smith had already called 'the tacit combination of employers.'(116)This depressing influence can be resisted by a combination of the employed;and therefore the doctrine which declared the necessary incapacity of trades-unions to raise wages must be thrown aside.
Mill has received,and fully deserves,high praise for his candour in this recantation.We must,however,regret the facility with which he abandoned a disagreeable doctrine without sufficiently considering the effects of his admission upon his whole scheme.(117)To what,in fact,does the argument amount to which he thus yielded?He says that the capitalist starts with the 'whole of his accumulated means,all of which is potentially capital.'Out of this he pays both his labourers and his family expenses.No 'law of nature'makes it impossible for him to give to the labourer all 'beyond the necessaries of life',which he had previously spent upon himself.The only limit to possible expenditure on wages is that he must not be ruined or driven out of business.(118)This surely is obvious.No law of nature or of man forbids me from giving all that I have to my labourers,though I cannot give more than I have.If I have a balance at my bankers,I may pay my wage-bill by a cheque for any smaller sum,and live on the difference.Difficulties at once arise when we look at the 'realities'of the phenomena and turn from 'money wages'to 'real wages.'It is easy for an individual to give what he pleases,but not so easy to make such a change in the whole concrete industrial machinery as to apply it all to the production of labourers'commodities.What,in any case,was precisely the economical dogma inconsistent with Mill's statement?According to him,it was the doctrine that,at any given time,there is a certain fund in existence which is 'unconditionally devoted'to the payment of wages.This was taken to 'be at any given moment a predetermined amount.'(119)But how was it supposed to be predetermined?All events are predetermined by their causes,and to treat political economy as a possible science is to assume that wages,among other things,are somehow determinate.Mill means apparently to deny a determination by something in the nature of the capital itself.The capital might mean something which could not,even if everybody wished it,be applied in any other way.The circulating might bear to the fixed capital the same relation as wool,for example,to mutton.Save at all,and a certain part of your savings will be wages,as a certain part of the sheep will be wool.Unless you waste it,you will employ it on the only purpose for which it is adapted.
