WAGES are of prime importance in any advanced economy such as ours. They affect us all far more than seems evidenced in our concern about them.

Everyone buys wages, in a sense, with every purchase he makes. And three-fourths of all incomes in the United States represent pay for work done in the employ of another. So nearly every one of us is on both sides of the wage exchange, in one way or another.

Wage rates are higher in the United States than in any other country. And they are about five times as high here as they were a century ago, in purchasing power.

An employee of General Motors is likely to wonder at times why his pay can’t be raised. “Even if it were doubled or trebled,” he may complain to his wife, “it would never be felt by GM.”

Higher wages come from increased output per hour of work. This is not a new or profound discovery. For how could consumption be greater than production?

Wages, however, are not the only part of the economic pie. Why, then, couldn’t wages be raised by giving the employee a larger share?

All life on earth is developed, sustained, and powered by energy from the sun. And that is the beginning of the story of how man has harnessed energy to improve his level of living.

Man cannot use the sun’s energy directly, except as it warms him and thus conserves the fuel already in his body for other uses. Were it possible to do this, the earth probably would be populated in unbelievable numbers; for the amount of energy coming from the sun is fantastically great.

The creation and use of tools has been possible only because of a method of cooperation which has developed.

Apparently man is created in endless variety. We are told that no two persons are identical biologically. Nor are any two persons identical in their ability to do things, in their aptitudes of mind and body with which deeds are done and things are produced for economic betterment.

In the market we find persons trading the fruits of their special abilities with one another. Each does whatever economic task he can do best. He creates a surplus beyond his own needs. He then trades this with others who are in a similar position of surplus, having things he wants. So by trading rather than by working harder, both sides of the exchange greatly increase the satisfaction of their wants. Human differences can in this way be made to yield a more bounteous living for every participant.

Money, the lubricant for exchange, makes widespread trade possible. Without it our present high level of wages could hardly have come to be. Yet, serious inflation and deflation can cause money to lose its capacity to lubricate exchange.

Wages have been spoken of as though they were entirely composed of money in the pay envelope which you could spend as you wish. They have been discussed as though each dollar could be spent for a loaf of your favorite brand of bread, or for peanuts, or for a new car; or given to your church, or to your favorite charity; or turned over to your wife to spend as she deems wise; or whatever.

But this ignores an important fact. Not all your wages are available to you for free choice of spending in this way.

When you can’t use your income for things of your choice, its worth is lessened to you.

The greatest opportunity now for a quick increase in the worth of wages is to reduce the cost of governing ourselves so that more of the wage can be kept.

But there is another aspect of free choice in the spending of wages, by which it is possible to raise the worth of wages even further.