usion that a business, or a federation of employers, may go ahead
increasing wages and shortening hours of labour _ad libitum_ in sure
and certain expectation of a corresponding increase in the net
productivity of labour.

Before such a conclusion is warranted, we must grasp more clearly the
nature of the causal relation between high standard of living and
efficiency. How far are we entitled to regard high wages and other
good conditions of employment as the cause, how far as the effect of
efficiency of labour? The evidence adduced simply proves that _a_ _b_
_c_, certain phenomena relating to efficiency--as size of product,
speed of workmanship, quantity of machines tended--vary directly with
_d_ _e_ _f_, certain other phenomena relating to wages, hours of
labour, and other conditions of employment. So far as such evidence
goes, we are only able to assert that the two sets of phenomena are
causally related, and cannot surely determine whether variations in
_a_ _b_ _c_ are causes, or effects of concomitant variations in _d_
_e_ _f_, or whether both sets of phenomena are or are not governed by
some third set, the variations of which affect simultaneously and
proportionately the other two.

The moral which writers like Mr. Gunton and Mr. Schoenhof have sought
to extract, and which has been accepted by not a few leaders in the
"labour movement," is that every rise of wages and every shortening of
hours will necessarily be followed by an equivalent or a more than
equivalent rise in the efficiency of labour. In seeking to establish
this position, special stress is laid upon the evidence of the
comparative statistics of textile industries. But, in the first place,
it must be pointed out that the evidence adduced does not support any
such sweeping generalisation. The statistics of Mr. Gould and Mr.
Schoenhof, for instance, show many cases where higher money and real
wages of American operatives are not accompanied by a correspondingly
larger productivity. In such cases the "cheap" labour of England is
really cheap.

Again, in other cases where the higher wages of American workers are
accompanied by an equivalent, or more than equivalent, increase of
product, that increased product is not due entirely or chiefly to
greater intensity or efficiency of labour, but to the use of more
highly elaborated labour-saving machinery. The difference between the
labour-cost of making and maintaining this improved machinery, and
that of ma