PRINCIPLES OF WAGES 1. The price of labor. 12. The self-directing laborer's income from sale of products. 3. Shifting of labor to the point of highest return to the laborer. 4. Fees for temporary direct services. ˘ 5. The con tinuous wage-contract for personal service. I 6. Price of labor employed on products to sell. II 7. Various grades of labor and rates of wages. 8. Doctrine of non-competing classes. I 9. Basis of the personal bar gaining power in the wage-contract.. 110. Friction in the adjustment of wages. 11. Uniqueness of separate services. § 12. Labor-incomes and wealth-incomes. 13. The wage system. 14. Wages and the general economic situation. Notes on The labor-theory of value, Various methods of remuneration, Real wages in Europe and America, and Value versus utility of labor.
§ 1. The price of labor. In the last chapter have been considered the circumstances affecting the value of human services. The labor has value in the estimation of some per son or persons because the labor yields a psychic income either directly or indirectly. We now turn to consider the price of labor. Just as the value of direct commodities comes to be expressed in a price in sale, and as the value of the uses of durable agents (usance) comes to have a price called rent, so the value of any labor that is capable of being sold, that is performed for another for pay, comes to bear a price called wage, or wages.
Like every price, wage involves a contractual relation more or less temporary, between two persons, the one selling and the other buying labor. The buyer is the employer and the seller is the employee, or the wageworker, or the hired man. All that has been said above of the principles of value in rela tion to labor, holds of course of wages, whenever the labor is 211 being measured in a market and its value is being expressed in terms of something paid for the labor.' § 2. The self-directing laborer's income from sale of products. Before considering the case of contractual wage payment, where one man is hired by another, let us see what occurs when a number of self-directing laborers come together into trading relations with their products. this case there
is a market for goods and there are pri or goods that have been produced by the aid of labor t there are only valua tions and not prices for labor se ices. Such was the state of industry in early and medieval times, and in large measure these conditions still are found in modern society. Each trader would originally come to the market with a scale of valuations for all his different goods, reflecting his own un equal fitness for different tasks, and he would meet men having very different scales of valuation due to the variety and dis parity of their talents. If one man can make arrows and canoes very well but is too slow to hunt, and the other is a good hunter but a poor worker in wood, there is mutual gain in division of labor and barter. (See Chapter 5, section 7.) If several traders are present so that the higgling element of iso lated barter is reduced, a true market-price is found for the goods resulting from each laborer's services. In the presence of this price the individual valuations are adjusted to the whole economic situation, are socialized in the market. (See above, Chapter 7.) Goods exchanged in this way evidently are not valued ac cording to the amount of labor measured by labor-hours, or by painful exertion. They are valued by the strength of de 1 The wage being a tangible market-fact was first studied when economics began to be a science, and it was seen that the wage was but the reflection of a valuable service. So the term wage was ex tended to this value of the service which was called the "natural wage" —more often of late the "economic wage." In this book, however, the term wages is confined to the price aspect of labor, while labor-yield (which is labor-income to some person) is the physical product or the valued service given off by an action.