The New International Encyclopædia/Labor

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LABOR (OF. labor, labeur, Fr. labeur, from Lat. labor, toil). Human activity put forth as a means to the production of goods. Two forms, forced or slave labor, induced by the fear of punishment, and contract or free labor, induced by the desire for goods as a means to the satisfaction of wants, are to be sharply distinguished.

The earliest civilizations were based on systems of slave labor, the slaves being either a subject people dominated by a conquering race or prisoners of war. Such systems led inevitably to the degeneration of the governing class, and were overthrown as soon as the peoples establishing them came in contact with more vigorous races which had been forced by circumstances to depend more upon their own exertions. During the Middle Ages, and even down to modern times in some of the countries of Europe, the system of labor was a modified form of slavery known as serfdom. Serfs were bound to the soil, and compelled to obey their feudal lords in all important matters. At the same time they had certain customary rights and privileges which the lords, on their side, were bound to respect. Although adapted to the conditions of a slowly developing agricultural community, serfdom was not at all suited to a manufacturing or commercial people. For this and other reasons it gave place to the system of free labor, at first in England during the fifteenth century; then in France, Germany, and the other countries of Western and Central Europe during the eighteenth and early nineteenth centuries; and finally in Russia during the latter half of the nineteenth century.

With the discovery of America and the opening up of new lands suited to a semi-tropical agriculture, a new form of slavery was devised, that of African negroes, brought across the ocean in slave-ships and made to bear the brunt of the heavy labor connected with the production of tobacco, cotton, and other crops. In the United States there ensued a period of development in which the country was 'half slave and half free,' which proved intolerable to both sections, and culminated in the Civil War and the subsequent abolition of slavery.

The different conceptions of free labor which have played a part in the development of economic thought can best be indicated by reviewing briefly the views of leading economists. It was characteristic of the Mercantilist writers to ignore labor and the other factors in the production of wealth, and to ascribe exaggerated importance to the precious metals. The Physiocrats appreciated more truly the function of the precious metals; but they also gave slight attention to labor, as such, because they ascribed undue importance to the part which land and natural forces play in production. They even went so far as to characterize manufacturing and mercantile labor as unproductive (sterile), and to declare that agricultural labor is alone productive, since it alone creates a surplus of goods over and above those needed to satisfy the laborer's own necessities. Adam Smith, on the other hand, following Petty and Hume, represented labor as the principal factor in the production of wealth. In his treatment, the division of labor is made the chief cause of industrial progress, and the part which nature plays in production is passed over with scant consideration. He distinguished productive from unproductive labor by defining the former as activity which realizes itself in some material form (that is, commodities rather than services). Nevertheless, he followed the Physiocrats in ascribing peculiar productiveness to agricultural labor, for, he says, in agriculture "nature labors along with man." Ricardo gave his attention primarily to the distribution of wealth, and based his theory on the proposition that value is always in proportion to the quantity of labor. He added little to Adam Smith's treatment of labor as a factor in production, except to point out that nature assists man in all his industrial pursuits, and not merely in farming. John Stuart Mill went a step further toward giving scientific precision to economic analysis by pointing out that labor does not create commodities, but merely changes their forms, and in so doing creates utilities.

The progress of economic thought since the days of Ricardo and Mill has been along two distinct lines. Socialists, led by Karl Marx, have accepted the proposition that value tends to be in proportion to quantity of labor, and have deduced from it their 'exploitation theory'—that is, the theory that labor, which creates all value, is deprived of the larger part of its products through the agency of the legalized but unjust institution of private property in land and capital. The other line of development has been away from the view that labor alone regulates value, and toward the conception that value is determined primarily by marginal utility, which measures the intensity of the demand for goods. Economists accepting the latter view recognize that value tends under certain conditions to correspond to the cost of production, as Ricardo argued, but find in the latter remuneration not merely for the sacrifice involved in labor, but also for that involved in saving and investing income in preference to spending it. Value, even under conditions of free competition, does not tend, therefore, to be in proportion to quantity of labor, but to quantities of labor and capital.

John Stuart Mill's observation that labor creates utilities, not matter, exposed the artificial character of Adam Smith's distinction between productive and unproductive labor. It is now recognized on all sides that the labor of physicians, lawyers, actors, etc., is just as productive as the labor of farmers and mechanics. All add to society's fund of consumable utilities, and this is the essence of production. To be sure, the utilities created by the actor are consumed as they are produced by his listening audience; but in this they differ only in degree from the utilities created by the fishman or the green-grocer, whose products must also be consumed promptly to be enjoyed at all. If permanence of results is the test of productiveness, the labor of all three must be considered unproductive in comparison with the labor of the pyramid-builder. In short, the distinction which Adam Smith had in mind is more happily and accurately represented as pertaining not to the relation between labor and its products, but to that between the products themselves and further production. Whether products are destined to become capital (i.e. direct aids to further production), the means of maintaining the economic efficiency of workmen (i.e. indirect aids to further production), or the means of mere idle gratification, is still a matter of considerable importance in economics, but one not pertaining to labor.

With the broadening of the conception of productive labor, more attention has been given to the interdependence of different groups of workers. It is recognized that unskilled manual laborers owe much to skilled or mechanical laborers, and that both would be worse off but for the guidance and direction of the business men or entrepreneurs who perform the 'labor of management.' At the same time there is still a tendency to draw a distinction between workers who work for wages and independent business or professional men who work for profits. When such phrases as 'the laboring class,' 'the labor problem,' 'the labor movement,' 'labor laws,' etc., are used, reference is made to the wage-earning class, whose rise to its present prominence dates from the industrial revolution at the end of the eighteenth and the beginning of the nineteenth centuries. The most significant phases of this development have been the growth of labor organizations intended to promote the interests of the wage-earning class (see Trade Unions), and the enactment of laws regulating the hours and other conditions of employment of certain members of this class, particularly women and children. See Labor Legislation.

Other aspects of labor to which increasing attention is given by economists are the circumstances which determine the worker's industrial efficiency. It is now recognized that the food, clothing, housing, etc., of the working classes are important, not merely because they affect the happiness of those classes, but because upon them depends the amount and quality of the work that can be performed. The standard of living influences wages not merely through the control which it may exercise over the rate at which population increases, but also because it determines the standard of efficiency. It is this consideration that has done most to transform economics from the 'dismal science' that was taught by the classical economists to the hopeful study that is pursued to-day. If rising wages bring with them increased efficiency, which becomes in turn a cause of still higher wages, there is no assignable limit in a progressive country to the possible progress of the working classes.

The progress of economic thought is shown also in the greater attention that is now paid to the psychological side of labor. Adam Smith asserted that in a day's labor the laborer "must always lay down the same portion of his ease, his liberty, and his happiness." Later writers assumed also that labor was disagreeable, if not painful, and would only be undertaken in the hope of reward. Professor Jevons first stated clearly that different kinds of labor and different hours of labor involve different degrees of sacrifice. He emphasized the thought that some labor is a source of positive pleasure to the laborer, and that it is usually only because labor is carried to excess that it becomes painful. Following this lead, later writers have begun to speculate in regard to the relations that would prevail in an industrial society in which excessive hours were cut off and labor-saving devices were utilized for the performance of all tasks that are inherently disagreeable. Under such ideal conditions it is obvious that all labor would be pleasurable, and that the only ground for distinguishing different kinds of labor or different hours of labor would be that some would afford more pleasure to the laborer than others. Men would be paid in such a society, not because they did disagreeable things, but because they produced want-satisfying goods, and to do so refrained from other lines of activity or relaxation that promised even more pleasure than the work in hand. Production, instead of figuring in the economic calculus as a sum of pains to be weighed against the pleasures of consumption, would appear in such a society as a sum of pleasures to be added in determining the full joy of living. It is hardly necessary to point out that such a condition is far in advance of the real situation even in the most progressive communities; but the world has certainly advanced to a stage in which economists and other thoughtful people have definitely discarded the idea that labor is a 'curse,' and in its place have set up the ideal of labor as a necessary means to the fullest self-realization and self-development of the laborer.

Consult: Thorold Rogers, Six Centuries of Work and Wages; Cairnes, The Slave Power; Thornton, On Labour; Brassey, Work and Wages; Walker, The Wages Question; Schoenhof, The Economy of High Wages; Patten, The Theory of Prosperity; Webb, Industrial Democracy; Levasseur, The American Workman. The establishment of departments or bureaus of labor by all progressive countries has swelled the official literature on labor to gigantic proportions. Among the most notable recent Government reports on the subject are: Report of the Royal Commission [British] on Labour (1894); Report of the United States Industrial Commission (1900-02); reports of the Board of Trade (British) on labor statistics, trade unions, etc., and annual and special reports of the United States Department of Labor. For current events, consult the (British) Labour Gazette, published by the Board of Trade, and the (United States) Bulletin of the Department of Labor. See Labor Legislation; Machinery, Economic Effects of; Division of Labor; Trade Unions; Wages; Coöperation; Profit-Sharing; etc.