Page:The Economics of Unemployment.djvu/89

sold so as to yield this minimum profit. A larger total product will be produced and sold. A smaller proportion of this larger product will go to labour, than of the smaller product under the higher wage rate. For, though the capital brought into productive use by the wage-cut may only earn a bare minimum profit, the better placed capital, which it was worth while to employ before the wage-cut, will now be earning a higher rate of profit. But though a smaller proportion of the enlarged product thus goes to the workers, the actual amount they receive as a body will be larger than before the cut, though they will have to do more work to get it.

The distribution of the smaller product before the wage cut was more favourable to labour than to capital, the distribution afterwards returns to the normal position, which is favourable to capital. But since workers suffer more severely from unemployment and low incomes than do capitalists, it may be worth their while to accept a wage-cut which increases their aggregate real income, although it involves more output of labour power and gives capital a larger share of the increased product. For, after all, the stoppage of work and unemployment were caused directly by the inability of some of the capital to earn the necessary minimum of profit, and no remedy could be effective that did not remove this inability and restore the profit-earning power of this idle capital.

This, I think, is the economic case made by capital for wage-reduction as a cure for depression and unemployment in trades working for the home-market.