Tuesday, August 12, 2014

Thornton Hatches a "Who?"

William Thomas Thornton's essay, "On Labour, its Wrongful Claims and Rightful Dues; its Actual Present and Possible Future," was the occasion for John Stuart Mill's famous recantation of the wages-fund doctrine. In the course of his discussion, Thornton inadvertently invoked the very doctrine that he was debunking, a discrepancy noted by a reviewer in July 1869 The Edinburgh Review:
As he had attacked the doctrine of supply and demand in reference to price, Mr. Thornton assails, with even greater impetuosity, that monstrous figment, as he regards it, of the economists, the wages fund. The book is written, on the whole, in a good humoured spirit; but if ever an irritation of temper is betrayed, it is when the writer is brought into contact with this bête noire of his social philosophy. That the rate of wages is governed, as Adam Smith and his followers have conceived, by the proportion between the capital disposable for the payment of labour and the number of the recipients of that capital, is a notion that Mr. Thornton scouts with contempt, and he consigns the chimerical 'wages-fund' to the lowest limbo of unrealities. Yet, while attacking the name, we find him occasionally, under the pressure of facts, using language which virtually admits the thing, as when he says, 'that at any given time the whole quantity of work to be done is a fixed quantity, and the uttermost which employers can afford to pay for having it done is a fixed amount'; and in other places his language recognises the inevitable fact that employment must be limited by the amount of capital which at the time being sets it in motion, that amount being the thing to which Smith, McCulloch, Fawcett, and other writers have assigned the offensive name.

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