84 INDUSTRIAL REVOLUTION AND WAGES

ing the enthusiastic support of the organized labor movement
 itself. Increased productivity of labor and industry,
advancing wages, higher living standards and greater
consuming or purchasing power, rapidly became the
avowed policy and practical program of American industry.
This new constructive program was primarily developed
as the way toward the revival of prosperity in trade and
industry. From these new teachings, however, and their
practical application, inevitably came sweeping conclusions
as to living standards and theories regarding the determination
 of wages—conclusions which, from a practical
standpoint, completely overthrew preexisting theories and
policies. In the light of the new attitude, it was at once
perfectly clear that the cost of living as a wage adjustment
factor was no longer tenable except for the maintenance
of existing standards. The “productive efficiency” theory
of wages, on the other hand, took the dominant place. If
labor and other costs of production could be lowered,
wages, it was held, could be increased indefinitely without
disturbing margins of profit. As a consequence, living
standards could be constantly elevated. Expressed in
another form, lower costs made possible higher wages, and
this greater compensation to workers, in turn, meant the
establishment of better living standards, with the result
that the increasing demand for commodities thus created
by the expansion in purchasing power arising from higher
wages and living standards would inevitably produce the
objective desired by all, namely, general activity and prosperity
 in commerce, manufacturing, transportation, and
finance. The self-interest of those engaged in economic
undertakings, as well as of those dependent upon these
factors, therefore, directly stimulated all groups and classes
eagerly to accept and apply the new doctrines once their
soundness had been practically demonstrated.