We cannot discuss the economic position of the workers under the capitalist system, or use terms such as "exploitation," "pauperism" and "surplus," without facing the arguments drawn from the high wages paid in the United States. The worshippers of progress, led by Henry Ford the king of progress, chorus together that the American working man earns more money than a European of the middle classes. They call it ridiculous and absurd to speak of exploitation while concerns exist of which the shares, up to 40 per cent, of the shares, are in the hands of the workers. They ridicule the statement that the labourer is unable to save money, to become a capitalist himself; since there are very many labourers' banks, labourers' insurance companies and other organizations of the kind. And they continue this line of thought until they reach the moral that the condition of the working man depends upon the productivity of labour. Wages are so much higher in the U.S.A. than they are in Europe because the American labourer is actually "working," because the efficiency of labour is so much greater than in Europe. The American labourer can save money because he is so highly efficient. And then comes the watchword for the future: increased production does away with social conflict.
The employer and the employed naturally regard the problem of high wages from different standpoints. In the country where they really are paid, in the U.S.A., the employer has to pay them. Nevertheless, his profit increases - if there is a possibility of selling his goods. For it has been proved that higher wages actually increase production.
It did not take a Henry Ford to discover the principle. In 1890 the great English economist, Marshall, already saw the cause of American progress in the fact that Americans had found a connection between growing wages, growing production and growing profit. Dr. Marshall proposed to measure wages, not in reference to the costs of rearing and sustaining a class of labourers, but in reference to their efficiency. The cheapest wages are not the lowest wages - i.e., the minimum budget of health and decency - but those bearing the highest ratio between their amount and the value of the produce resulting from the labourer's work. There is the solution of a problem which no Marxist on earth can explain: because the maximum of productivity is reached by employing a smaller number of labourers than could be employed, who are paid higher wages than the employer is forced to pay.
The capitalists do not, indeed, suffer any harm by paying these high wages.
On the other hand, the working people reap no advantage. For the wages are calculated in time earnings - earnings of a week or a day. It would be an appropriate test, however, to calculate how much the worker actually earns in the course of his life. The very surprising fact would emerge that the American labourer at the end of his career, has not on the whole earned more money than the European. The periods of his employment are considerably shorter than those of the European working man. When he receives higher wages it only means that he gets in twenty years an amount which the European labourer earns in forty. And the rapid tempo of American "progress" proves that he accomplishes as much as the European in half the time. It is a pity, however, that there are not statistics to give some information as to the periods of employment in industrial America.
It is said that a bricklayer in New York, who earns a fantastically high wage, can only stand the work for about eight years; after that time he is so worn out that nobody will give him a job. Therefore, he has to save out of his high wages and retire to some occupation such as poultry-farming in the country. Some of the mass-production operations ruin the workers in an even shorter time. Investigators have reported that the worker in Ford's factories can only stand the abuse for four or five months. It is true that the wages there are higher than the average, but only during the period of employment; and as the worker spends the rest of the year in agricultural employment at a lower wage, it would appear that Ford's "high wages," spread over the whole year, are lower than other wages of industry.
Nor does this only apply to Ford's employees. The swift exhaustion of human endurance (which is definitely exploitation, just as the exhaustion of fertility in the ground is exploitation), serves in the end to reduce wages to a lower average level. And that is the whole meaning of increased productivity it does not result from the machine, but from the adaptation of the labourer to the machine's tempo.
Then there is a further point, that social insurance does not exist in fact. Of course the labourer buys shares and bonds, he has a deposit in the bank, he has a private insurance; for he must safeguard himself against the time when he will be broken down. But how can we believe that this means a real improvement in his position? The bonds and shares in the hands of the working people are the employer's social insurance only, for this capital is invested productivity in his own plant. The position is the same even when 40 per cent, of the shares are in the hands of the workers. For the real capital controlled by the workers is so little, proportionately, that there is no possibility of a stand being made against the financial forces which rule the market in the raw materials, and agents of production, such as oil, coal and iron. There is no question of a social struggle on the Stock Exchange.
Lastly, allusion must be made to the so-called "hope of advancement" for the efficient labourer, which is a catchword also in Europe; creating a comparison with the parliamentary system: a director's share in the profit being on a par with a ministerial salary. Indeed, the "advanced" working man in America may be compared with a Socialist M.P. in Europe. From the economic viewpoint these two stand for the same type, both participating modestly in the privileges of a class of capitalists which originally sprang out of a concentration of the wealth owned by the whole body of working people.