202 INDUSTRIAL REVOLUTION AND WAGES 
put forward the claim that high wages and increased pur- 
chasing power of wage-earners constitute the basis of our 
prosperity, and, in reality, are “profit and prosperity in- 
surance.” 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 con- 
trolled to an equal or greater extent by the rise of wage levels, 
and our discovery of the importance of high wages in main- 
taining 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 re- 
versal 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 aban- 
doned, 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 funda- 
mental reason why certain of our large industries are now 
and have been for some years unable to sell their entire pro- 
duction 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 necessi- 
ties 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.”