Weston had asked the audience to imagine what a rise of English agricultural wages, from 9 shillings (£0.45) to 18 shillings (£0.90) would mean, as a result of a sharp rise in demand for necessaries, and of their price. But, Marx points out that, in the United States, agricultural wages were double those in England, and yet the price of agricultural products was lower, in the US, than in England. In Capital I, Marx made a similar comparison of textile wages in Britain and Europe. In Britain, textile workers wages were 50% higher than in Europe, because textile production was far more productive, due to the use of far more, and more advanced machinery.
Marx also refers to the effects of The Ten Hours Act, which economists like Ure and Senior, representing the views of capitalists, had claimed would result in profits disappearing. Again, Marx had dealt at length, in Capital I, with why those arguments were false. It did, indeed, result in a general rise in wages, but not the predicted collapse of profits, and nor a rise in prices. In Capital I, Marx describes how the earthenware manufacturers, for example, had claimed that the Act would put them out of business, but, instead, it prompted them to introduce new, more efficient methods, with the consequence that costs were reduced, demand and supply increased, and their profits grew as a result.
“If our friend Weston's fixed idea of a fixed amount of wages, a fixed amount of production, a fixed degree of the productive power of labour, a fixed and permanent will of the capitalist, and all his other fixedness and finality were correct, Professor Senior's woeful forebodings would been right, and Robert Owen, who already in 1816 proclaimed a general limitation of the working day the first preparatory step to the emancipation of the working class, and actually in the teeth of the general prejudice inaugurated it on his own hook in his cotton factory at New Lanark, would have been wrong.” (p 22-3)
Marx also sets out the danger of being misled by percentages and averages. Suppose 10 workers receive £0.10 per week, 5 £0.25 per week, and 5 £0.55 per week. The total is £5. If there is an average rise of 20%, this becomes £6, yet this may hide the fact that the wages of the 10 remain constant, the wages of 5 go from £0.25 to £0.30, and of the other five from £0.55 to £0.70. This is what is known as compositional effects, as I have discussed in relation to the misleading nature of average hourly earnings data.
Between 1849 to 1859, Marx says, agricultural wages, in Britain, rose, on average, by 40%. During the same period, industrial wages also rose, for the reasons previously described, resulting from the Ten Hours Act, which limited the working-day to 10 hours, resulted in an increased demand for labour, and consequent rise in wages. As agricultural products constituted the bulk of necessities, this rise in wages should have resulted in much higher prices.
“But what is the fact? Despite the Russian war, and the consecutive unfavourable harvests from 1854 to 1856, the average price of wheat, which is the leading agricultural produce of England, fell from about 3 Pounds per quarter for the years 1838 to 1848 to about 2 Pounds 10 Shillings per quarter for the years 1849 to 1859. This constitutes a fall in the price of wheat of more than 16 percent simultaneously with an average rise of agricultural wages of 40 percent. During the same period, if we compare its end with its beginning, 1859 with 1849, there was a decrease of official pauperism from 934,419 to 860,470, the difference being 73,949; a very small decrease, I grant, and which in the following years was again lost, but still a decrease.” (p 25-6)
Of course, after 1848, the Repeal of The Corn Laws, meant that wheat imports from Europe doubled, but, then, this huge additional demand should have sent European grain prices soaring. But,
“Apart from some years of failing harvests, during all that period the ruinous fall in the price of corn formed a standing theme of declamation in France; the Americans were again and again compelled to burn their surplus produce; and Russia, if we are to believe Mr. Urquhart, prompted the Civil War in the United States because her agricultural exports were crippled by the Yankee competition in the markets of Europe.” (p 26)
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