The new industrial revolution and wages

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Monograph

Identifikator:: 1804651486

URN:: urn:nbn:de:zbw-retromon-193069

Document type:: Monograph

Author:: Lauck, William Jett http://d-nb.info/gnd/173237126

Title:: The new industrial revolution and wages

Place of publication:: New York

Publisher:: Funk & Wagnalls

Year of publication:: 1929

Scope:: ix, 308 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

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Title:: Chapter VIII. Acceptance and general application of the theory of productive efficiency

Collection:: Economics Books

2 NN, », Ty THEORY OF PRODUCTIVE EFFICIHNGY 161 eR TPleths, 2 labor and management, it was claimed that cits’; © opera- & | rion had been reduced, and that both employes " con- Soy sumers should share in the lower costs by receiv. Hee rates of pay and reductions in prices. The way to restore prosperity, it was claimed in 1921, was to increase wages and purchasing power and at the same time reduce prices in order to stimulate demand and to make quantity pro- duction at low costs possible. No practical consideration was given to these theories either before the war or during the depression of the years 1920-1921. Industrial leaders, financiers, and statesmen held fast to the old beliefs that industry and trade could be revived only by a double deflation of both prices and wages. Two years later, however, in 1923, the “pro- ductive efficiency” theory, along with its corollary that high wages made for greater consumption of goods and corre- sponding expansion of industrial and commercial activity, became the foundation for the new industrial order which completely reversed all past theories and traditions as to methods of wage determination. Under the new con- structive program it was held by leaders in industry that wages might be increased indefinitely, prices of commodi- ties simultaneously lowered and profits enhanced, provided that, through the proper cooperation of capital, labor, and management, costs of production were reduced. High wages were also further accepted as a fundamental of prosperity, on the ground that a high level of compensa- tion increased purchasing power, which in turn found expression in greater consumption or demand for com- modities nn \ J v- Jo iy THE PropucTivity THEORY OF WAGES From the very beginnings of the science of economics, ts leading exponents had made a clear-cut distinction be-

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