THEORY OF PRODUCTIVE EFFICIENCY 163
point of enabling them to sell at lower prices, and to dislodge
the English manufacturer from all markets in which he is
not artificially protected.
Before examining this opinion on grounds of principle, it
is worth while to bestow a moment’s consideration upon it as
a question of fact. Is it true that the wages of manufacturing
labor are lower in foreign countries than in England, in
any sense in which low wages are an advantage to the
capitalist? The artisan of Ghent or Lyons may earn less
wages in a day, but does he not do less work? Degrees of
efficiency considered, does his labor cost less to his employer?
Tho wages may be lower on the Continent, is not the Cost
of Labor, which is the real element in the competition, very
nearly the same? That it is so seems the opinion of comsetent
judges, and is confirmed by the very little difference
in the rate of profit between England and the Continental
countries. But, if so, the opinion is absurd that English producers
can be undersold by their Continental rivals from this
cause. It is only in America that the supposition is prima
facie admissible. In America wages are much higher than
in England, if we mean by wages the daily earnings of a
laborer; but the productive power of American labor is so
great—its efficiency, combined with the favorable circumstances
in which it is exerted, makes it worth so much to the
purchaser—that the Cost of Labor is lower in America than
in England; as is proved by the fact that the general rate of
orofits and of interest is very much higher.
General low wages never caused any country to undersell
its rivals, nor did general high wages ever hinder it from
loing so.
Henry Fawcett, Professor of Political Economy in the
University of Cambridge, in discussing the same subject
more than fifty years ago, pointed out the relatively higher
productiveness of labor in the United States :!
. . . The difficulty arises from confusing wages with cost
“1 “Manual of Political Economy,” Henry Fawcett, M.P.; Macmillan. London.
1876: pp. 173-174. 231.
