202 INDUSTRIAL REVOLUTION AND WAGES

put forward the claim that high wages and increased purchasing
 power of wage-earners constitute the basis of our
prosperity, and, in reality, are “profit and prosperity insurance.”
 In a recent article he said :?

It is not enough, in other words, merely to reduce costs. If
that were sufficient, China, with its 900 millions, would be the
world’s greatest consumer. The truth is that the advance of
civilization throughout the history of the world has been controlled
 to an equal or greater extent by the rise of wage levels,
and our discovery of the importance of high wages in maintaining
 markets has had more to do with the making and the
maintenance of our prosperity than any other single element.
Any one who cares to look into the records of business will
find that this discovery is a complete and revolutionary reversal
 of the old theory, persisting for thousands of years,
that high profits come from low wages. We are not wholly
rid of this theory yet, and, altho it is declared to be abandoned,
 it is this which is responsible for the idea that business
may be made better by curtailment.
When you come right down to it, therefore, the fundamental
 reason why certain of our large industries are now
and have been for some years unable to sell their entire production
 is because too many workers are unable to buy. . . .
For approximately two and a half times as much wages, in
other words, he becomes ten times as good a customer for the
textile industry, and so much better proportionately for the
furniture and carpet makers, for the food dealer and the real
estate man and everybody else with things or services to sell.
[ know that this sounds like a mathematical impossibility at
first thought, but it is simple enough when we remember that
every cent of the lower wages must go to the absolute necessities
 of life, and new clothing is not a necessity until food has
been provided for. The worker whose pay is $900 a year is
getting a bare existence, and the percentage of profit to those
from whom he buys is necessarily low because he must buy
1 Article in The Executive, entitled “High Wages Is Profit Insurance.”