Carl Menger’s review article examines negotiated wage arrangements in British industry, with some reference to the United States, through publications by J. E. Crawford Munro. Its central move is to reinterpret workers’ participation in favorable prices and technical improvements as a practical means of preventing wage disputes. These arrangements codify principles already developed in negotiations between manufacturers and trade-union representatives. Their origins in experience distinguish them from speculative schemes, although Menger cautions that institutions arising from particular circumstances may have only a limited range of applicability.
Die in Rede stehenden Einrichtungen sind der Hauptsache nach zweierlei Art: die „gleitenden Lohnsätze“ (sliding scales) und die Lohntabellen, in England kurzweg „lists“ genannt.
English translation: The institutions in question are in the main of two kinds: the "sliding wage rates" (sliding scales) and the wage tables, in England called simply "lists."
This distinction organizes the article. Sliding scales govern wage changes over time; lists specify piece rates under differing production conditions. Both replace recurrent bargaining or discretionary judgments with agreed rules. Menger values Munro’s precise descriptions and statistical evidence while explicitly reserving agreement with his theoretical explanations.
Sliding scales establish a normal product price and corresponding wage. Predetermined increases or reductions then follow price movements, subject to a guaranteed minimum wage. Where products and worker categories differ, the principal product supplies the reference price and adjustments take percentage form. Jointly selected officials can verify average realized net prices through designated firms’ books. The institutional aim is to avoid repeated negotiations and intrusive inquiries into individual enterprises.
Menger allows that raw-material prices and other production costs could enter the calculation, but argues that greater complexity is usually unnecessary. Product prices already provide the customary grounds on which workers demand increases and employers explain reductions:
Zur Beseitigung von Lohnstreitigkeiten, also für den Hauptzweck, welchem die Institution dienen soll, reichen Scalen, welche die Lohn-Aenderungen lediglich in Beziehung zum Preise der Erzeugnisse bringen, regelmäßig aus.
English translation: For the removal of wage disputes, that is, for the chief purpose which the institution is meant to serve, scales which relate wage changes solely to the price of the products are as a rule sufficient.
The criterion is thus practical adequacy for resolving conflict, rather than an exhaustive calculation of profitability. Scales settle only part of the employment contract: working hours remain open, and neither dismissal nor voluntary departure is prohibited. Menger documents their extensive adoption in coal mining and iron manufacture, while also noting their partial abandonment in southern Staffordshire after 1883.
The second half turns to lists, using cotton spinning to explain how standardized piece rates accommodate heterogeneous work. Rates depend on output quantity, yarn fineness, twists per inch, and machinery. Finer yarn does not automatically justify higher total earnings; additional remuneration is intended to reflect the greater skill required. Lists thereby translate technical differences into explicit contractual distinctions, reducing uncertainty over what a particular task should earn.
Their most consequential provision concerns improved machinery. Menger emphasizes that gains from additional spindles and other technical advances should be divided between worker and manufacturer, rather than accruing exclusively to either. This gives concrete institutional form to the opening theme of worker participation in technical progress. Comparable weaving schedules account for material fineness, fabric density, and dimensions.
Sie haben eine gewisse Gleichmäßigkeit der Lohnsätze in ganzen Industrie-Districten herbeigeführt und die Entscheidung über zweifelhafte Lohnansprüche klaren, von beiden Seiten anerkannten, grundsätzlichen Bestimmungen unterworfen.
English translation: They have brought about a certain uniformity of wage rates throughout entire industrial districts and have subjected the decision of doubtful wage claims to clear fundamental provisions recognized by both sides.
For Menger, such standardization benefits both parties. Alongside clearer wage claims, lists precisely delimit workers’ obligations, enabling manufacturers to enforce agreed product specifications despite piece-rate incentives. The article’s broader relevance lies in this account of negotiated institutions: industrial conflict can be moderated through shared, technically specific rules that preserve contractual freedom while distributing gains and making reciprocal obligations determinate.
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