The' progress of economic thought since the days of Iticardo and 11i11 has been along two distinct lines. Socialists, led by Karl Alarx, have accepted the proposition that value tends to he in proportion to quantity of labor, and leave deduced from it their 'exploitation theory'—that is, the theory that labor, which creates all value. is deprived of the larger part. of its products through the agency of the legalized but unjust institution of private property in land and capi tal. The other line of development has been away from the view that labor alone regulates value, and toward the conception that value is deter mined primarily by marginal utility. which meas ures the intensity of the demand for goods. Economists accepting the latter view recognize that value tends under certain conditions to cor respond to the cost of as 1Zieardlo argued, but find in the latter remuneration not merely for the sacrifice involved in labor, but also for that involved in savimr and investing income in preference tee spending it. Value. even under conditions of free competition, does not tend, therefore, to he in proportion to quantity of labor, hut to quantities of labor am/ capital.
John Stuart obs-tervation that labor creates utilities, not matter, exposed the artificial character of Adam Smith's distinction between productive and unproductive labor. it is now rec ognized on all sides that the labor of physicians, lawyers, actors, etc., is just as productive' as the labor of farmers and mechanics. All add to society's fund of consumable utilities, and this is the essence of production. To be sure. the utilities created by the actor are consuined as they are produced her his listening audience; but in this they (litre,- oniy in degree from the utili ties created by the fishman or the green-grocer, whose products innst. also be consumed promptly to lee enjoyed at all. If permanence of results is the test of productiveness, the labor of all three must lee considered unprodnetive in comparison with the labor of the pyramid-beeilde•. In short, the (list inet ion which Adana Smith had in mind is more happily and accurately represented as per taining, not. to the relation between labor and its products, but to that between the products themselves and further production. Whether products are destined to become capital (i.e. direct aids to further production), the means of maintaining the economic efficiency of workmen Ii.e. indirect aids to further production). or the means of mere idle gratification, is still a matter of considerable importance in economies, hilt one not pertaining to labor.
With the broadening of the conception of pro ductive labor. more attention has been given to the interdependence of different groups of work ers. Tt is recognized flat Im,kilicel manual labor ers owe much to skilled or mechanieal laborers, and that both would lee worse off but for the guidance and direction of the business men or entrepreneurs who perform the 'labor of man agement.' At the same time there is still a ten dency to draw a distinction between workers who work for wages and independent business or pro fessional men who work for profits. When such phrases as 'the laboring class.' the labor prob lem,' 'the labor movement.' labor etc., are used, reference is made to flue wage-earning class, whose rise to its present prominence dates from the industrial revolution at the end of the eigh teenth and the beginning of the nineteenth cen turies. The most significant phases of this de velopment have been the growth of labor organi zation; intended to promote the interests of the wage-earning class (see TRADE UNIONS ) and the enactment of laws regulating the hours and other conditions of employment of certain mem bers of this class, particularly women and dren. See LAnon LEd;isa.ATIox.
Other aspects of labor to which increasing at tention is given by economists are the circum stances which determine the worker's industrial efficiency. It is now recognized that the food,
clothing, etc., of the working classes are important, not merely because they affect the happiness of those classes, but, because upon them depends the amount and quality of the work that can be performed. The standard of living influ ences wages not merely through the control which it may exercise over the rate at which popula tion inereasi.es, but also because it determines the stand:1rd of efficiency. It is this considlera tion that has done most to transform economies from the 'dismal science' that was taught by the classical economists to the hopeful study that is pursued to-day. If rising wages bring with them ineremed efficiency, which becomes in turn a cause of still higher wages, there is no assign able limit in a progressive country to the possible progress of the working classes.
The progress; of economic thought is shown also in the greater attention that is now paid to the psychological side of labor. Adam Smith assert ed that in a day's labor the laborer "must al NV:1 ys lay down the same portion of his ease, his lib ( rty, and his happiness." Later writers assumed also that labor was disagreeable, if not painful, and would only he undertaken in the hope of re ward. Professor .Tevons first stated clearly that different kinds of labor and different hours of labor involve different degrees of sacrifice. Ile emphasized the thought that some labor is a source of positive pleasure to the laborer, and that it is usually only because labor is carried to excess that it becomes painful. Following, this lead, later writers have begun to speculate in re gard to the relations that would prevail in an society in which excessive hours were rut off and labor-saving devices were utilized for the performance of all tasks that are inherently disagreeable. Under such ideal conditions it is obvious that all labor would be pleasurable, and that the only ground for distinguishing different kinds of labor or different hours of labor would he that some w-mild afford more pleasure to the laborer than others. Men wrath] be paid in such a soeiety, not because they did disagreeable things. hut because they produced want-satisfy ing goods, and to do so refrained from other lines of activity or relaxation that promised even more pleasure than the work in hand. Produc tion, instead of figuring in the economic calculus as a sum of pains to he weighed against the pleasures of consumption, would appear in such a society as a sum of pleasures to be added in determining the full joy of living. It is hardly necessary to point out that such a condition is far in advance of the real situation even in the most progressive communities; but the world has certainly advanced to a stage in which econo mists and other thoughtful people have definitely discarded the idea that labor is a `curse,' and in its place have set up the ideal of labor as a neces sa•y means to the fullest self-realization and self development of the laborer.
Consult: Thorold lingers, ,Sir Cent It ries of Work and II'oyes; ('airnes, Starr Poirer; Thornton, (hi Labour: lira.,ey, I l'ork and Way's: Walker, Tile Wages Qmslioir: Schoen hof, The Economy of Moil Wages; fatten, The Theory of l'rosperity: Webb, buil/stria/ Democ racy; Levasscmf, The 1 Forkition. The stablishinent of departments or bureau, of labor by all progressive countries has swelled the olli vial literature on labor to gigantic proportions. Among the most notable recent Government re rorts on the subjeet are: Report of the Royal Commission [British] on Labour( 1594) ; Report of the United States Industrial Commission I 1900-02); reports of the 13oard of Trade (Brit ish) on labor statistics, trade unions, etc., and annual and special reports of the United States Department of Labor. For current events, eon stilt the (British) Labour Gy.-:ette, published by the Board of Trade, and the (United States) Bulletin of the Department of Labor. See LABOR