THE INSURANCE BILL.
[To THE EDITOR OF THE "SPECTATOR."]
Stu,—In your article on Insurance against Unemployment there occurs this statement : " From the economic point of view it matters very little in the long run whether t1.0 whole compulsion is placed upon one of the parties or whether it is shared between the two, for in the long run wages will adjust themselves to the new conditions." In view of the insurance scheme now before the country it seems desirable that this economic point should be emphasized, and that the probable nature of the adjustment of wages should be made as clear as our present knowledge of economics will allow.
My own view is that rates of wages are governed by economic laws which are as much beyond the control of even the cleverest Chancellor of the Exchequer as the laws of gravita- tion itself, and that wages will so adjust themselves that the workman bears, if not the whole cost of the insurance, at any rate those parts of the cost which are proposed to be placed on himself and on his employer. How far the contribution of the general taxpayer may be expected to influence real wages is no doubt more difficult to determine, but a discussion of the whole problem by a recognised authority on economics would throw desirable light on the subject.
It is specially important that this point should be under- stood by the general public for two reasons : A good deal of uneasiness is being felt and expressed in business circles as to the effect on trade generally of the enormous burden which it is proposed suddenly to throw upon industry, and if there is one thing certain to injure trade it is uneasiness as to the future. If the view expressed above is correct, there need be no uneasiness. A temporary dislocation and a fluctuation of prices may be expected, but in the long run the workman will be paid, as at present, the rate of wages to which he is economically entitled ; he will merely take something between sevenpence and a shilling a week in insurance benefits instead of in cash.
The second reason for desiring a clear view on this subject is even more important. The attempt will be made to use the insurance scheme as a gigantic piece of class bribery. The workmen will be told that the Liberal Party has forced the employers to pay them nine million pounds a year in addition to their wages and has given them some further millions from the public treasury, and it will be represented as a plain duty to vote for the Liberal Party in return for this piece of generosity. Already I see it surmised in a Liberal paper that the insurance scheme will carry Home Rule and Welsh Disestablishment on its back. Class bribery of this kind is becoming an alarming feature in our political life. It will be deprived of much of its poison if it comes to be clearly understood that the class which benefits is in the long run the class that pays. The workman wants increased wages, and he wants to be relieved of all the risks of life without troubling himself in the matter, but he cannot have it both
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