oint the same Industrial Commission reports
that "In analyzing the wage fixing problem in connection with scientific
management two matters are considered; one--the "base-rate" sometimes
called the day wage, which constitutes for any group of wage earners the
minimum earnings or indicates the general wage level for that group, and
two--added "efficiency payments" which are supposed to represent special
additional rewards for special adjustments. The investigators sought in
vain for any scientific methods devised or employed by scientific
management for the determination of the base-rate, either as a matter of
justice between the conflicting claims of capital and labor, or between
the relative claims of individual and occupational groups."[19] As a
method of wage payment, of course, the method of scientific management
must be judged by its good and bad effects like other methods of wage
payment. That, however, is not a task which need detain us.

5.--The other group of wage theories that is based upon a similar
misconception of the relation between the productive contribution of
labor and wages cannot be so briefly dealt with. This is the group of
theories which has been named "the fixed group demand theory" and it has
figured prominently in most discussions concerning restriction of
output. This group of theories also rests upon the assumption that there
is a fixed relation between the productive contribution of a group of
workmen and the wages received by these workmen.

The fixed group demand theory has been summarized as follows: "The
demand for the labor of the group is determined by the demand for the
commodity output of the group. The community--wealth and distribution
remaining the same--has a fairly fixed money demand for the commodities
of a group. It will devote about a given proportion of its purchasing
power to these commodities, that is, if the prices of the group
commodity are higher, it will buy less units and vice versa, but expend
about the same purchasing power. Therefore, the demand for the labor of
the group; profits remaining the same, is practically fixed, and
increasing the group commodity output means simply conferring a benefit
on the members of other groups as consumers without gain to the group
itself. Therefore, to increase the efficiency and output of the group
will not increase the group labor demand, and group wages. Decreasing
the efficiency and output of the group will not decrease the