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NOTE Wage Earners and Employers

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To answer that question, we must first look at a little history.

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In the pre-capitalistic ages, a nation's social order and economic system were based upon the military superiority of an elite.

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The victorious conqueror appropriated to himself all the country's utilizable land, retained

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the part for himself and distributed the rest among his retinue. Some got more, others less

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and the great majority nothing. In the England of the early Plantagenets, a Saxon was right

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I am poor because there are normals to whom more was given than is needed for the support of their families.

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In those days the affluence of the rich was the cause of the poverty of the poor.

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Conditions in a capitalistic society are different.

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are different. In the market economy, the only way left to the more gifted individuals

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to take advantage of their superior abilities is to serve the masses of their fellow men.

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Profits go to those who succeed in filling the most urgent of the not yet satisfied wants

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The Profits Saved, Accumulated and Ploughed Back into the Plant Benefit the Common Man

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Twice.

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First, in his capacity as a wage earner, activity of labor, and thereby real wage rates, fine

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jobs.

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Capacity as a consumer, when the product, the additional capital, are the lowest possible prices.

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The characteristic principle of capitalism is that it is mass production to supply the masses.

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Big business serves the many.

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Those outfits that are producing for the special tastes of the rich never outgrow medium or even small size.

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Under such conditions, those anxious to get a joint interest in the prosperity of the business enterprises.

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For only the prosperous firm or corporation has the opportunity to invest,

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That is, to expand and to improve its activities by the employment of ever better and more

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efficient tools and machines.

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The better equipped the plant is, the more can the individual worker produce within a

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unit of time.

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The higher is what the economist called the marginal productivity of his labor, and thereby

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The Real Wages He Gets

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The fundamental difference between the conditions of an economically underdeveloped country

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like India and those of the United States is that in India the per headquarter of capital

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invested and thereby the marginal productivity of labor and consequently wage rates are much

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lower than in this country.

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The capital of the capitalist benefits not only those who own it, but also those who

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work in the plant and those who buy and consume the goods produced.

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And then there is one very important fact to keep in mind.

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When, as we did in the preceding observations, one distinguishes between the concerns of

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of the Capitalists and those of the people employed in the plants owned by the capitalists.

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One must not forget that this is a simplification that does not correctly describe the real

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state of present-day American affairs. For the typical American wage earner is not penniless.

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He is a saver and investor. He owns savings accounts, United States savings bonds and other

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bonds and first of all insurance policies. But he is also a stockholder. At the end of

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Since the last year, the accumulated personal savings reach $338 billion. A considerable

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part of this sum is lent to business by the banks, savings banks and insurance companies.

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Thus, the average American household owns well over $6,000 that are invested in American

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and Business. The typical family stake in the flourishing of the nation's business enterprises

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consists not only in the fact that these firms and corporations are employing the head of

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the family. There is a second fact that counts for them to wit, that the principal and interest

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of their savings are saved only as far as the American free enterprise is in good shape

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and Prosperity. It is a myth that there prevails a conflict between the interests of the corporations

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and firms and those of the people employed by them. In fact, good profits and high real

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wages were hanged in hand.