The Secret of "High" Wages (1926)

From the April 1926 issue of the Socialist Standard

Quite a number of people appear to have discovered America, including the "Daily Mail" and Mr. Oswald Mosley. "Why is it," they ask, “that the American workman is paid at a higher rate than the Englishman, yet his employers make considerable profits?" The "Daily Mail" apparently considers the subject interesting enough to dispatch a special commission of trade unionists to investigate; while Mr. Oswald Mosley has already returned with the information that better machinery is the secret. This was pointed out in the "Socialist Standard" some fifteen or sixteen years ago by our contributor A. E. J.; in fact, an acquaintance with Marxian economics would predispose one to draw that conclusion in advance of the actual evidence.

What is not pointed out, however, by these discoverers is the fact that, in spite of his higher wages, the American worker is relatively in a worse position than his British compeer. This was illustrated by the existence of six million unemployed in the U.S.A. less than five years ago. It is illustrated by such facts as are described on page 24 of our new pamphlet on "Socialism." The mode of organisation in American bread factories is to divide the plant into two sets of machinery operated by two gangs of men who are pitted against one another in the endeavour to obtain the maximum speed. The net result is that the American workers are faced with greater insecurity as a reward for greater productivity while the master class of America enjoys the fruits of their labour on a scale which arouses the envy of their British competitors.

The facts of American production give the lie to the oft repeated claim that lower wages in Britain will bring prosperity to all; but, correctly understood, they also illustrate the futility of the propaganda of the "Daily Herald” and the Labour leaders on behalf of American methods. These gentry, of course, pretend that higher wages are the solution of the unemployed problem through the restoration of the home markets; five seconds' reflection, however, will reveal the absurdity of this argument.

The master class do not control production simply to supply the markets; they do not employ workers to produce goods merely in order to sell them again. They do these things in order to obtain a profit! Consequently, they will adopt a policy of higher wages only when they can see the possibility of more profits arising as a consequence. The "Herald” and its satellites are fond of arguing as though the American employers paid higher wages in order to avoid slumps; but, as pointed out in our pamphlet, the higher wage-rate of America is the result of the fact that capitalism there commenced with the workers occupying a more favourable social position than they did in Europe. Their ability to settle on the land as independent proprietors resulted in a scarcity of labour-power in the industrial centres. Hence the more rapid strides which the machine has made in that country.

The most important point to bear in mind, however, is that wherever capitalism exists, no matter what standard of life the workers possess, that standard tends to fall in relation to that of the master class. In other words, the share of the workers in the total product of their labour grows smaller with every advance in the powers of production, whether it be the result of improved machinery, better organisation, speeding up, technical education, or the like. According to Prof. Hansen, of Minnesota University: "From 1897 to 1915 real wages were falling in spite of an enormous increase in national production.” (American Economic Review, March, 1925.)

Increased production, either with high wages or without, leads to no improvement of the working-class position; on the contrary, every boom leads inevitably to the slump. In its issue of March 20th, the “Daily Herald” insults the intelligence by comparing Colonel Willey’s observations upon slumps and waste with the analysis presented in "Capital,” and expresses its gratitude for the fatuous suggestion that the elimination of waste means "less labour for the workers, more recreation and no attack on wages.” If Colonel Willey means by "less labour,” an increase in the unemployed, if by "recreation,” he means promenading the streets asking for work or maintenance, and if he means that the unemployed have no wages to be attacked, then, we may, of course, agree with him; but it cannot be too often emphasised that all economy under the existing system benefits the masters at the expense of the workers.

The "Rooster" thus demonstrates once more the fact that capitalist economics dominate its outlook. It wishes to teach our masters how to run their own system. As an agent of confusion it is a worthy rival of its Tory competitors.

Eric Boden