Page:The Economics of Unemployment.djvu/96

of labour to accept reductions is a psychological condition of these other economies whose social and economic advantages are far greater. To lower costs of production by reducing wages is to take a backward step in civilisation: to achieve the same result by some improvement in machinery or process, some economy of the use of power, by discovering and developing a market for some by-product, by better book-keeping, cost taking, and management, is to take a forward step in civilisation. The former method, by degrading the standards of working-class life, not merely impedes the productivity of labour, but by breeding discontent makes it more difficult to introduce and operate successfully all technical and administrative reforms. The latter method operates immediately to increase the volume of output per unit of capital and labour employed, and harmonises high wages with high profits. My point here is that the better method will only be adopted if the worse is not available. In America it is generally recognised that the high wages obtainable by all skilled and much unskilled labour in industry operated as the potent stimulus to the great economies in mass production, mass-transport, and larger use of machines and mechanical power, which distinguish their industrial system. So long as Germany was a low-wage country of unorganised workers, her industrial development was low and slow. Only in the latter years of last century and the opening years of this did the socialist and trade-union organisation for higher wages and better labour conditions incite the great industrialists and organisers to apply to industry the