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Nassau Senior, Professor of Economics at Oxford, maintained that the profits of factory production were made in the last hour of work. His ideas were responsible for holding back factory legislation. In the following extract, he sets out the rationale for the theory.
Under the present law, no mill in which persons under eighteen years of age are employed (and, therefore, scarcely any mill at all) can be worked more than eleven and a half hours a day, that is, twelve hours for five days in the week and nine on Saturday.
Now, the following analysis will show that, in a mill so worked, the whole net profit is derived from the last hour. I will suppose a manufacturer to invest £100,000; £80,000 in his mill and machinery, and £20,000 in raw materials and wages. The annual return of that mill; supposing ... gross profits to be fifteen per cent., ought to be goods worth £115,000 ... Of this £115,000, each of the twenty-three half hours of work produces one twenty-third ... £100,000 out of the £115,000 makes up for the deterioration of the mill and machinery. The remaining 2-23rds., that is the last two of the twenty-three half hours of every day, produce the net profit of ten per cent. If, therefore, (prices remaining the same) the factory could be kept at work thirteen hours instead of eleven and a half, ... the net profit would be destroyed - if they were reduced by an hour and a half, even gross profit would be destroyed ... there would be no fund to compensate the progressive deterioration of the fixed capital ...
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