162 INDUSTRIAL REVOLUTION AND WAGES
tween wages and labor costs, and had pointed out the fal-
lacy of assuming that low rates of pay to workmen neces-
sarily meant lower costs of production. Adam Smith him-
self had pertinently commented on this fact as follows:?
The wages of labour are the encouragement of industry,
which, like every other human quality, improves in propor-
tion to the encouragement it receives. A plentiful subsistence
increases the bodily strength of the labourer and the com-
fortable hope of bettering his condition, and of ending his
days perhaps in ease and plenty, animates him to exert that
strength to the utmost. Where wages are high, accordingly,
we shall always find the workmen more active, diligent, and
expeditious, than where they are low; in England, for
example, than in Scotland; in the neighbourhood of great
towns, than in remote country places.
John Stuart Mill also discussed the same subject as
follows :2
Wages, and the cost of labor; what labor brings in to the
laborer, and what it costs to the capitalist; are ideas quite
distinct, and which it is of the utmost importance to keep so.
For this purpose it is essential not to designate them, as is
almost always done, by the same name. Wages, in public
discussions, both oral and printed, being looked upon from
the same point of view of the payers, much oftener than
from that of the receivers, nothing is more common than to
say that wages are high or low, meaning only that the cost
of labor is high or low. The reverse of this would be oftener
the truth: the cost of labor is frequently at its highest where
wages are lowest. . . .
We continually hear of the disadvantage under which the
British producer labors, both in foreign markets and even in
his own, through the lower wages paid by his foreign rivals.
These lower wages, we are told, enable, or are always on the
1 “The Wealth of Nations,” Adam Smith, edited by Edwin Cannon. Methuen
& Co., London, 1904; Val. I, p. 83.
2 “Principles of Political Economy,” John Stwart Mill. Appleton, New
York, 1874; p. 512, Vol. I; pp. 251, 252, 254, Vol. II.
