Profit and Wage Inequality from Economic Policy

⁵⁶ The policy of Europe prevents perfect liberty and creates other more important inequalities.

⁵⁷ Inequality is done in 3 ways:

1. By restraining the competition to fewer than natural.
2. By increasing the competition beyond the natural.
3. By obstructing the free circulation of labour and stock from employment to employment and from place to place.

A. The Economic Policy that Reduces Competition leading to Inequality

⁵⁸ The policy of Europe creates a very important inequality in the employments of labour and stock by reducing competition.

⁵⁹ This is done primarily through the exclusive privileges of corporations.

⁶⁰ The exclusive privilege of an incorporated business restrains the competition in the town where it is established, to those who are qualified or free of the trade. This freedom is obtained by finishing an apprenticeship under a qualified master.

The corporation by-laws regulate=

• the number of apprentices per master
• the number of years each one is obliged to serve

Such by-laws intend to restrain the competition in the trade.

• The limitation of the number of apprentices restrains it directly.
• A long term of apprenticeship restrains it indirectly by increasing the cost of education.

Reducing the Competition Through Long University Apprenticeships

⁶¹ In Sheffield, a corporation by-law states that no master cutler can have more than one apprentice at a time.

In Norfolk and Norwich, no master weaver can have more than two apprentices. Otherwise, he forfeits £5 a month to the king. No master hatter can have more than two apprentices in England, or in the English plantations. Otherwise, he forfeits £5 a month, half to the king, half his plaintiff. Both these regulations were confirmed by a public law. They are evidently dictated by the same corporation spirit which enacted the Sheffield by-law. The silk weavers in London were only incorporated for a year when they enacted a by-law restraining any master from having more than two apprentices at a time.

It required an act of parliament to rescind this by-law.

⁶² Since ancient times in Europe, the apprenticeships in most of the incorporated trades last for 7 years.

All such incorporations were called universities, from its Latin origin which referred to any incorporation.

The old charters of ancient towns called:

• the incorporations of smiths as the university of smiths
• the incorporations of tailors as the university of tailors

Those incorporations are now called universities.

When they were first established, the length of study needed to obtain the degree of master of arts was copied from the ancient term of apprenticeship in common trades.

• 7 years under a qualified master is needed to become a master, teacher, or doctor (words anciently synonymous) in the liberal arts, just as 7 years was necessary to qualify as a master in a common trade.

⁶³ The Statute of Apprenticeship was from the 5th of Elizabeth, Chapter 4 in 1563.

It enacted that no person should exercise any trade, craft, or mystery in England, unless he had previously served at least 7 years of apprenticeship.

The by-laws of many corporations became the general and public law of all trades in the market towns in England.

Although this statute was applicable to all of Great Britain, it was interpreted to be limited to market towns.

In rural villages, a person was allowed to exercise several different trades even without apprenticeship to each.

• This was caused by the deficiency of labour there.

⁶⁴ This statute was also strictly interpreted to be limited to those trades established in England before 1563.

This limitation created rules of police which appear very foolish.

For example, it was ruled that a coach-maker cannot employ journeymen to make his coach-wheels or make them by himself.

He must buy them of a master wheel-maker because this trade was exercised before 1563.

But a wheel-maker who had never been an apprentice to a coach-maker, can employ journeymen or himself to make coaches because the trade of a coach-maker was not exercised in England in 1563.

The manufactures of Manchester, Birmingham, and Wolverhampton were not exercised before 1563.

They are not included in this statute.

⁶⁵ In France, the duration of apprenticeships is different in different towns and in different trades.

In Paris, 5 years is the usual term.

• But an apprentice must serve 5 years more as a journeyman before he can be a master.
• He is called a companion of his master, in a companionship.

⁶⁶ In Scotland, there is no general law on the duration of apprenticeships.

The term is different in different corporations.

It may be paid off through a small fine if the term is long. In most towns, a very small fine is enough to buy the freedom of any corporation. The weavers of linen and hempen cloth and their related trades, wheel-makers, reel-makers, etc. may exercise their trades in any town corporate without paying any fine.

In all towns corporate, all persons are free to sell meat on any lawful day. In Scotland, three years is a common term of apprenticeship. It is the least oppressive of any European country.

⁶⁷ A person’s own labour is the most sacred and inviolable of all his property, as it is the foundation of all of his other properties.

The patrimony of a poor man lies in the strength and dexterity of his own hands. Hindering him from employing his strength and dexterity in the way he wishes, without injuring his neighbour, is a violation of this most sacred property.

It is an encroachment on the liberty of the worker his potential employer. It hinders the worker from working and the employer from employing what they think proper. His employability should be entrusted to his employers instead of to lawgivers. The lawgiver’s concern that the improper worker might be employed, is impertinent and oppressive.

⁶⁸ Long apprenticeships do not guarantee sufficient workmanship.

Insufficient workmanship is generally the effect of fraud, not of inability. The longest apprenticeship can give no security against fraud.

Different regulations are necessary to prevent this abuse:

• the sterling mark on plate
• the stamps on linen and woollen cloth

These give the buyer greater security than any statute of apprenticeship. The buyer looks at these and never asks whether the worker had seven years apprenticeship.

⁶⁹ Long apprenticeships has no tendency to form young people to industry.

A journeyman who works by the piece is likely to be industrious because he derives a benefit from his industry. An apprentice is likely to be idle because he has no immediate interest to be otherwise. In the inferior employments, the sweets of labour all consist in the recompence of labour. They who are soonest able to enjoy the sweets of labour are likely the soonest to conceive a relish for it. They are likely to acquire the early habit of industry.

A young man naturally becomes averse to labour when he receives no benefit from it for a long time. The boys who are put out as apprentices from public charities are generally bound for more than the usual number of years, They generally turned out very idle and worthless.

⁷⁹ Apprenticeships were unknown to the ancients.

The reciprocal duties of master and apprentice form a big article in every modern code. The Roman law is silent with regard to them. There is no Greek or Latin word equal to ‘apprentice’. It is currently defined as a servant bound to work for a master at a particular trade for a term of years, provided that the master shall teach him that trade.

Better Practical Education

⁷¹ Long apprenticeships are unnecessary.

Clock-making and watch-making do not need a long course of instruction.

• The first invention of such machines came from deep and long thought.

But when such machines have been invented and well understood, it only requires a few weeks of lessons to explain completely how to use and make them.

In the common mechanic trades, a few days instruction might be enough.

Dexterity cannot be acquired without much practice and experience.

A young man’s education would be more effective, less tedious, and less expensive if he began working diligently as a journeyman. He would:

• be paid in proportion to the little work he could do.
• pay for the materials that he might spoil.

The master would be a loser because:

• he would lose 7 years of wages to his apprentice
• the apprentice would save 7 years of apprenticeship expence

In the end, the apprentice himself might be a loser because:

• his trade could be so easily learned that he would have more competitors
• his wages as a complete worker would be much less than without competition

The increased competition would reduce the profits of the masters and the wages of the worker

• The trades, the crafts, the mysteries, would all be losers.
• But the public would be a gainer because the work of all craftsmen would become cheaper this way.