#44. How Differences of Wages arise.# It is very important to understand rightly the reasons of the great differences which exist between the rates of wages paid in different occupations. Some kinds of labourers are paid a hundred or even a thousand times as much for a day's work as others, and it may seem very unfair that there should be such great differences. We must learn to see that this is the necessary result of the various characters and abilities of persons, partly arising from the actual strength of mind and body with which they were born, partly from the opportunities of education and experience which they have happened to enjoy. We are often told that all men are born free and equal; however this may be in a legal point of view, it is not true in other ways. One child is often strong and stout from its earliest years; another weakly and unfit for the same exertion. In mind there are still more remarkable differences.
The rates of wages in different employments are governed by #the laws of supply and demand# which we shall afterwards consider. Just as goods rise in price when there is little in the market and much is wanted, so the price of men's labour rises when much of any particular kind is wanted and little is to be had. It does not matter much whether we speak of demand for goods or demand for the labour, which is necessary to make the goods. If more things of a certain sort are wanted, then more men able to make them must be found. If I buy an aneroid barometer, I use up the labour of a man able to make such a barometer; if many people take a fancy to have aneroid barometers, and only a few workmen have the necessary skill to make them, they can ask a high price for their labour. It is true that people buying barometers do not usually pay the workmen for making them; a man with capital gets the barometers made beforehand and puts them in shops ready for sale. The capitalist advances the wages of the workmen, but this is only for a few weeks or months, and according as the demand for barometers is brisk or slow, he employs more or fewer workmen. Thus, #demand for commodities comes to nearly, though not quite, the same thing as demand for labour#. There is the profit of the capitalist to be considered as well; but, with this exception, #rates of wages are governed by the same laws of supply and demand as the prices of goods#.