SPECIAL PROBLEMS OF WAGES 139

Before leaving the subject of wages, some reference must
be made to the doctrine of the wages fund. In its extremest
form this was stated somewhat as follows: —The total
amount of wages is dependent on the amount of capital in
existence, and on that alone: when this amount of capital is
determined, therefore, the wages total is also determined:
the average wage therefore depends simply on the number
of wage-earners.
While this doctrine of wages was held, it necessarily
followed that the only way to add to wages was to add to
capital. Increase of wages to one group of labourers meant
necessarily a decrease to other labourers.
The wages of labour are very largely expended on
commodities for immediate consumption. The supplies of
these commodities must therefore form the real wages,
received in exchange for the money-wages. The proportion
of the total capital of a community which will take the form
of goods ready for consumption is not liable to rapid change.
Thus there is a good deal of truth in the idea that wages,
real wages that is to say, are related to the volume of the
fund of capital.
But there is enough of elasticity in each of the statements
of the preceding paragraph to deprive the general statement,
of the dependence of wages on capital, of the importance
formerly attached to it as a doctrine of wages. As has
been repeatedly pointed out by critics of the doctrine, wages
are a part of the income of society, while capital is a fund
of wealth, Income is of the nature of a stream, the volume
of which is doubtless influenced powerfully by the quantity
of capita] accumulated. But the stream may vary in volume
a good deal without preliminary change in the amount of
the capital fund, just as the stream from a reservoir may be
Mcreased in volume without waiting for an enlargement in
the size of the reservoir. An increased flow of sufficient
Amount into the reservoir will maintain its contents in the
face of increased outflow. This corresponds to the modern
View of wages, as dependent on the product of labour.
Labour secures a larger stream of income on condition of,
and in recognition of, supplying a fuller stream of goods.