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186. Piece wages and time wages.-The stimulating power of piece-wages is greater than that of time-wages, simply because the laborer who works by the piece is in hopes of winning a larger wage; and because the connection between his work and its reward is closer. Smith objects to piece-wages on account of their too stimulating effect. He says that workmen, "when they are liberally paid by the piece, are very apt to overwork themselves, and to ruin their health and constitution in a few years." Engel, the German statistician, affirms that the introduction of piece-wages into lower Silesia increased the daily earnings of workmen by one third, one half, and even more. Roscher quotes Brassey as stating that the same workmen, engaged in grading and digging on a railroad, "cost eighteen pence per yard when paid by the day, and seven pence when paid by the piece." The closer the connection between the labor and its reward, the more powerful the stimulus of that reward.

On the other hand, the more distant and uncertain the wages, the less their effect on the work done. Jules Simon, in his book on the work-women of France, states that employers sometimes adopted the plan of paying their workmen once a fortnight, as a means of breaking up the Sunday debauch; but it was found that the labor of the first week showed the effect of the delay. The laborer would not exert himself for the distant wages; his energy awoke only at the last moment to recover the time lost.

187. Self-employed labor.-But if wages by the piece are more stimulating than wages by the day, and still more than wages by the month, or the year, the enjoyment of the full product of his own labor is most stimulating of all to the laborer. Economists frequently quote, with approval of its truthfulness, the saying of Arthur Young: "Give a man the secure possession of a bleak rock and he will turn it into a garden." The small farmers of France, whose little fields give such a patch-work look to the country, have, by the tireless

diligence of their self-employed labors, produced harvests which are astonishing to our American farmers. Many of our merchants and manufacturers, recognizing the influence of personal interest in the laborer, have tried the plan of giving to their employes, in addition to their set wages, a percentage of the profits of the year's business; and it is reported that they have found it to quicken sensibly the energy and effectiveness of the labors.

188. Distribution of labor.-The distribution of laborers to the different employments has its economic side, as affecting the applications of labor; and its social side, as affecting the condition of the laborer in society. The number of laborers required in each employment is naturally limited by the demand for the goods or services of that employment.

In very primitive, as also in old and crowded communities, little choice of labor is afforded. In the former, because the range of labor is narrow; in the latter, because the employments are all crowded. In both of these cases, the young are, to some extent, compelled to follow the trade of their fathers. But where the conditions of society and the intelligence of the individual permit a large freedom of choice, two classes of considerations chiefly determine the selection: 1. The supposed advantages of the employment for gaining a livelihood and accumulating wealth; 2. The social esteem in which the proposed employment is held, and the personal and social advantages secured to those who practice it.

Under the first, the mercantile and manufacturing employments, especially in our own land, would attract an undue proportion of labor, were it not that mercantile employments demand an accumulation of capital to begin with, and that the mechanical labors are supposed to require a long apprenticeship to fit one to follow them successfully.

Next to the pay offered, the ease or hardship of the labor to be performed influences the choice. Employments imposing much and disagreeable drudgery are accepted only under

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strong necessity, or under the temptation of large wages. Thus, common hard work falls to the lot of those who ordinarily have too little intelligence to do any thing else. Stone and brick masons are tempted to their trades by the larger wages they receive over those of the equally skillful but more pleasantly employed carpenters.

Among the personal and social considerations which determine the choice of business, may be enumerated: 1. The social esteem in which the work is held. This drives young American women from domestic service and impels them into the school-rooms, as it also leads their brothers from the farms to the law offices, or the physician's post. 2. The prospect of future advancement. 3. The social companionship afforded either in the workshops and places of labor, or in the residence secured. 4. The personal pleasure and progress resulting from the occupation. The artist, the author, and sometimes those of the other professions find their motives of choice in these last considerations.

It is evident that that employment will be best and most efficiently served which attracts to it the best and most intelligent and energetic laborers. But wages or profits will also be controlled by the competitions for the work to be done, or the business afforded, and hence favorite occupations, by the very crowds they attract, may become unremunerative and lose something of their popularity.

CHAPTER XVII.

CAPITAL.

189. General divisions. In passing from labor to capital, we enter another of the great battle-fields of Economic Science. Count Rossi called it one of the most thorny parts of Political Economy. What is capital? What does it do? What are its forms and functions? and, What are the laws of its increase and of its reward? These are questions which have engaged not only the attention of men of science, but also of those who seek industrial reforms or revolutions.

Dismissing, as in the case of labor, all the social problems connected with capital, to their appropriate place in Social Economy, our present concern lies with its functions as one of the three great factors of work. These factors were shown to be nature's gifts, labor, and capital. Two have been sufficiently explained; the third remains to be studied.

The field is somewhat broad and comptex; and the following chart of its territory will be useful to the reader and student:

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False antagonism.

190. True nature of capital.-Capital is wealth; but all wealth is not capital. This must be remembered, for a gateway of error lies here.

Taken as wealth, or goods, the origin of capital is the same as that of all other wealth. It is the preserved product of past labors. It does not seem necessary or useful to repeat the old stories, showing that the fisherman found that with a net he could catch more fish, and thus discovered capital, or learned its value.

Taken as wealth, capital is also of the nature of all other wealth. Its values have the same elements, and it is subject to the same laws and fluctuations. It may be bought, sold, exchanged, and consumed like all other goods. As property it is like all other property; and hence it is frequently confounded with property in general.*

But capital, as capital, is not simply property or goods. Here lies the key to its secret, missed by so many economists.

To make its real nature, as capital, clear, let it be noticed that wealth has three distinct aspects under which men count it to possess value :

1. Looking towards the consumer, it is valuable for the satisfactions it yields. He buys goods because they can gratify

his desires.

Whether all wealth, saved from immediate consumption, is capital, has long been one of the debated questions among economists. J. B. Say and MacCulloch held that all wealth, of whatever kind, is capital, and the " Dictionnaire de l'Economie Politique" follows their opinion. On the other hand, Adam Smith, followed by Rossi, and in this country by Amasa Walker and Prof. Perry, counts as capital only those goods which are used in production. The debate concerns only the use of the word capital, for those who call all wealth capital divide capital into productive and non-productive, and in their description of the former class virtually concede that it alone has the functions of true capital.

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