to determine its wisdom or unwisdom would appear to be to give it a trial under terms and conditions laid down by a legislative body which could change those conditions, if the act proved unwise after a fair trial. "The economic wisdom or folly of minimum wage legislation can of course be better demonstrated by experience than by theoretical argument." For the court to prevent such experimentation, with the care, foresight and experience manifested in the enactment and administration of labor laws, under an attenuated view of due process of law, protecting both liberty and property, is to place too heavy a burden upon the judiciary and to throttle the avenues of advance for government to meet the growing needs of modern economic and industrial society. It seems pertinent to quote in conclusion from the article on this subject by Dean Pound published more than fifteen years ago. After summing up some of the propositions which the courts had insisted upon in upholding the inviolability of freedom of contract, and after calling attention to some of the criticisms of courts resulting from the maintenance of these propositions, Dean Pound observed: Some of the statutes passed upon in the foregoing cases may have gone too far. Some of them involved bad or careless classifications. Some of them ran counter to local constitutional provisions, requiring general laws wherever possible. But one cannot read the cases in detail without feeling that the great majority of the decisions are simply wrong, not only in consti tutional law, but from the standpoint of the common. law, and even from that of a sane individualism. Looking at them upon common law principles, we must first of all recognize that there never has been at common law any such freedom of contract as they postulate. . . . ... The attitude of many of our courts on the subject of liberty of contract is so certain to be misapprehended, is so out of range of ordinary understanding, the decisions themselves are so academic and so artificial in their reasoning that they cannot fail to engender such feelings. Thus those decisions themselves do an injury beyond the failure of a few acts. These acts can be replaced as legislatures learn how to comply with the letter of the decisions and to evade the spirit of them. But the lost respect for courts and law cannot be replaced. The evil of those cases will live after them in impaired authority of the courts long after the decisions themselves are forgotten. 23 23 "Liberty of Contract," 18 YALE L. JOUR. 472. ECONOMIC WAGE AND LEGAL WAGE GEORGE GORHAM GROAT Yale Law Journal It is a trite saying that this is an era of discontent. It is equally trite, perhaps, to say that its causes are numerous and complex. Possibly the triteness is the most satisfactory evidence of the truth. Among the causes of restlessness and agitation one of the most important, undoubtedly, is the employer-employee relation. This may conveniently be expressed as the "wage question." It is becoming increasingly clear that upon the way in which the difficulties involved in this issue are met rest not alone the welfare of the people of the United States but as well the permanency of the very foundations of our industrial -political-social institutions. Unfortunately some groups interested in effecting a remedy are defeating the purpose sought by the method adopted. One of these groups is made up of employers who insist upon a thorough-going individualistic, laissez-faire policy; a policy of personal ownership and management with no assistance or "interference" from outside. Another group is composed of the "agitator" type of worker who would deprive all others of a voice in business control and take over and manage industry unaided; the radical forms of policy represented by the numerous “isms" into which socialism has recently been divided. A third group consists of the well-disposed but troublesome members of society who, without much knowledge and with much less judgment, talk of some plan to be universally adopted as a sure guaranty of the millennium. Thus confusion of method and confusion of understanding inevitably result. In the presence of such an introduction, it may appear presumptuous to speak of a remedy, and to avoid such an impression it must be said that what follows is not offered as a "solution," or as in any sense a dogmatic statement of a method or plan of procedure. It does appear clear, however, that there are some issues of economics that must be cleared up and some issues of law to be clarified before definite progress of a permanent character can be made. The economist has had his opportunity to make a contribution, but whether or not he has succeeded, is an open question. His theoretical offerings have not been impressive to outsiders. Similarly the law has often been called on for assistance and again it must be said that some of the offerings from this source also lack impressiveness among laymen. Yet from these sources must come, if they come at all, the guiding principles by which a transition may be effected from the troublesome present with its inequalities and its discontent to a better future with greater degree of general welfare and common strivings for mutually satisfactory relations. Thinkers in economics have long sought a principle that would at once explain and justify the wages of labor as they develop in the economics of distribution. Likewise jurists and lawyers have sought the legal principles involved in wage bargaining. Success has not yet crowned these efforts. The history of wage theories is a fascinating study, and while much is learned from its pursuit, it must be said that the conclusions are not convincing either in logical or in scientific method to those who look for a working basis in principle. If the successive economic interpretations of wage principles are reviewed, each interpretation in turn will appear either to one or the other bargainer or to both bargainers as unacceptable. Not to undertake any such full review, reference to three such theories must suffice. Malthus and Ricardo contributed the earliest of these during the first quarter of the nineteenth century. In name it is known as the "iron law" of wages and sought to establish in principle that the wages of labor would tend toward the minimum of subsistence necessary for the laborer's family. A wage below this amount would increase the death rate and decrease the birth rate and consequently give rise to a scarcity of labor. |