The True Line of Deliverance
by Hon. Auberon Herbert
Most of the evils, even those which in the end may destroy, have a remedial character in the earlier stages. They are the useful, though often unpleasant, instruments of bringing us back into the true path, if we have left it, or of stimulating us to new endeavors' in seeking for it. Amongst these scourges, disagreeable for the moment, but useful as regards the future, the New Unionism, with its crude doctrines of sheer force, constraint of anybody and everybody who stand in the way of the immediate end, limitation of numbers and excessive prices built up on monopoly, ingenious dovetailing of political action into unionist action, universal federation with rigid centralisation and strict dependence of all parts on the centre, must take its place. Few people of clear insight are ready to suppose that good of the truest kind is likely to come to the workmen enrolled under these principles. Centralisation, coercion and monopoly, always have been the advance guard of eventual failure and suffering, and always will be; though indirect good, by way of experience and healthy reaction, may come from them. No man raises, in a country that is not in decadence, the banner of retrogression, without influencing others to raise the banner of advance. Evil, it is true, provokes evil, but it also provokes good; and perhaps the New Unionism has its own special service to perform by leading workmen to reconsider the whole question of trades-unions, their relation to capital, and to that better future on which we all fasten our eyes. The old Trades-Unionism, like many another movement, has been useful in its day to the workmen, even though founded on shaky principles. It came into existence in a bitter time, when probably no truer system could have lived; it was to the men a first lesson in association, developing powers of administration and responsibility; it has done much in the way of benefit services; it gave a spirit of independence, and yet was an anti-revolutionary force; and it has taught capital the sharp lesson which was needed, at all events during one period of its history, that unless the fair claims of the men were respected, Trades-Unionism could throw the whole thing out of gear, and make a general mess for everybody concerned. But having said so much, it must be confessed that the old Trades-Unionism—with its many excellent points—has been, as regards great results, a failure, and that the New Unionism comes to help to make that failure evident. Let us see exactly what is happening now. The old Trades-Unionism, so far as it was restrictive, represented a dam. On the one side of it was skilled labour, organised and well paid; on the other side unskilled labour, unorganised and badly paid. As long as that state of things lasted, Trades-Unionism was in a sort of way a success—for the trades unionist. He was, as was sometimes reproachfully said, the privileged class, the aristocracy of labour; and of course the more a union could restrict the admission of members into the trade by limiting the number of apprentices, or in other ways, the more it could for the moment (for there are always reactions in these things) keep up or raise its rate of wages. But the time was sure to come when the effort would be made to raise the waters on the other side of the dam, and then how would it be with the dam? If the unskilled labour could be organised and its price raised, that would mean (employers' profits remaining the same, as they are likely to do, being dependent on causes very hard to fight against, and adjusted in each trade by what obtains in other trades) that the skilled unionist labour would get a lower reward, so far as his wage depended not upon his higher skill, but on trade-union action. The effect of all restriction is to diminish production and raise prices. The trade which previously had a dam, when other trades had not, was at an advantage; for it was exchanging its restricted production against the unrestricted production of other trades,—a state of things, which was good for it, but bad for all others. It was taking more and giving less. For this reason, as the New Unionists restrict production, the old trades will suffer. To give an example,—the effect of the Dockers' monopoly is to lessen for all other trades the advantages of free-trade. Imported articles will be dearer in price, and the labour of other trades will exchange for less.
To-day the New Unionists are bettering the teaching of the Old Unionists; and much as my sympathies go with the sober part of the Old Unionists, I should be obliged to confess that the New Unionists would be right, if the underlying principles of Unionism itself were right. Let us see what the New Unionists appear to be aiming at. All trades are to be unionised,—the unions being sufficiently strong to disregard and coerce, when necessary, the outside labour, and yet not too large so as to depress the price of labour in the trade itself. Those whom it is desirable to bring into the union will be brought in by summary methods; those whom it is desirable to leave outside will be left outside. But as these outsiders are always a menace to the unionist, measures will be taken to provide at least for a part of them. Of course it is obvious that the common rule of a minimum wage acts harshly both on old labour and on second-class labour; since both these classes lose all employment where the minimum can be universally enforced. It is then at this point that the action of the State is rather cleverly brought in to make good the gap which Unionism fails to cover. Workshops are to be provided by municipalities and County Councils for the inefficient labour, which, left in the employers' hands, would only drag the union price down. What is to be done with the product of such labour, which would be produced irrespective of demand, and independently of market price, is a problem which, as far as I know, is not yet solved. At the same time the State is to be made to serve another purpose. Municipalities and County Councils are to pay union price in all their contracts, thus giving the key-note of wage. An ordinary employer might not be screwed up to the true pitch. He or his customers might decline the article at the union price; but the municipality or Council which has once been captured, can be made to undertake certain work, and in doing it to strike almost any key-note that is desired. The body which spends public funds is independent of the market rate, and is therefore admirably suited for forcing the pace.
The crown of the system is the federation of the unions. When once federated, the power of all will be lent to one; and the area of subscription being made co-terminous with the whole country, and the boycott being duly systematized, both the non-conforming employer and the nonconforming workman will be satisfactorily reduced to submission.
The dream goes still further. What is to be done in one country is to be done in all countries; and just as the trades of a country are to be linked together as a whole, so are the countries themselves to be linked together. When that is done, then and there begins the millennium of labour.
Now it is a great advantage, in criticizing separate measures, when we are able to see before us the perfect whole, into which the separate measures are some day to be combined. For example, we should never judge our socialistic future rightly, if we persisted in scanning each measure, that leads towards it, separately by itself. It is the same with the details of Unionism. We must not simply look to the detached struggles of to-day between labour and capital, as expressing what Unionism is, but also to the system in its triumph, as it will be when, complete in all its parts, it governs the world.
Having said so much, before reviewing what perfect Unionism would mean, let us try and solve the simpler problem by seeing what Unionism means in the detached and unconsolidated form in which it exists to-day. Before doing so we may all start on the same road. Unionist or non-unionist, we are agreed that labour has to win for itself a different and a better future. The smooth places of the world are not permanently reserved for some of us, and the rough places for others. Enormous is the amount of insincere speech that flows from the lips and pens of to-day upon this subject. The subject is a profitable one in the political market of our time, and therefore, as we may be sure, receives its full homage from politicians and professional philanthropists; but still no amount of insincerity can alter the great truth, written in the destinies of the world, that for everybody's sake the labourer has to climb not only to competence and comfort, but to the knowledge, refinement and higher civilisation, which at present are so much more easily reached by those who do not labour with their hands. That is the work we have to accomplish; the only question is, 'in what manner?'
There are two roads, and only two roads, which offer themselves to us. One is the road of restriction, regulation, monopoly, and absolute power entrusted to the hands which have to win the successive positions, and defend them when won; the other is the road of free action, unlimited competition, and voluntary association. Now I want to contrast these methods, because I believe it only wants time and full discussion to convince the greater number of our workmen, with their strong instincts in favour of liberty, that all the methods of restriction, whether perfect or imperfect, whether new or old, are wrong and will only end in disappointment after a grievous loss of effort and time. I believe that the weight of argument is strongly on the side of liberty of action and unrestricted competition, and that we lovers of liberty can win the battle, into which we are entering, if we only plead our cause efficiently. The coercionists of every kind can offer the bribe of immediate results; but we have in our hands the appeal to the truer reason and the higher motives, and the battle must at last make for us, if we know how to use our weapons.
Before comparing the two methods, one word as regards the Unionism of the past. I have already said how much I think we owe to it, and personally it is pleasant to me to recall my friendship in former years with some of the old leaders, Mr. Guile, Mr. Allan, Mr. Applegarth, Mr. Howell, Mr. Broadhurst and others, whom it was my privilege to know, and of whom I shall always think and speak with kindness; but in forming a deliberate judgment upon the subject, I can only say that the past is not the present, and the circumstances that once made Unionism, in the old depressed days of labour, of use to the workmen, are so wholly changed, that the time has come when it is right to preach a reformation in the unions themselves, and a change in the direction of the efforts and hopes of the workmen.
The question to face is, can Unionism, as we know it, achieve the new future of the workmen? I answer no, because, speaking of it as a whole, it is founded on distinctly wrong principles. If we examine ordinary Unionism and the full development of the new Unionism as we have sketched it, we shall find the same principles running through both. Unionism essentially means the sacrifice of one section of the labourers to another section—it means this in more than one sense; it means the setting aside of the desires and the judgment of the individual for the sake of a common end; it means temptations to coerce; it means regulation, restriction, and centralisation, with all the evils that flow from these fatal methods.
Let us take the simplest example. 100,000 workmen in a trade are negotiating with their employers. Is there any reason why the workmen should not act in a body as regards their wages? Every lover of fair play would be inclined to say, certainly not; and if the negotiation were really for the whole body, all the units of which were quite voluntarily acting together, one serious part at least of the present mischief of Unionism would disappear. But the unionist only bargains for a part of the 100,000. A union is formed with a certain subscription in preparation for emergencies; and from that moment, although certain common interests continue to exist, there begins to be a divergence of certain other interests between those who are in the union and those outside the union. The union, intent on raising wages, finds it must fix a minimum of pay below which its members must not go. But either this minimum is so low that it is of no service, or else it cuts off from employment the old worker and the second-class worker. These men are naturally below the minimum. Then, as a minimum tends always to be a maximum, it cuts off the best worker, who naturally looks for a larger return from his skill and industry. These three classes, however, are not so important from the unionist point of view as the class of ordinary workman who for many different reasons prefers to be outside the union. He is a real danger to the unionist, as when any quarrel occurs, he may take his place. He therefore must be brought in, until the number outside the union is sufficiently reduced so as not to be dangerous. Here begins the temptation to coerce. The quickest way of securing this end is to make life uncomfortable for the outsider who works in the same shop with unionists; finally, unless he joins the union, tools may be thrown down, and the employer have to choose between standing by a few men on principle or finding himself involved in a strike. But whilst it is necessary for the stability of the union to bring a certain proportion of the ordinary outsiders into the union, an artificial rate of wages cannot be maintained, if labour flows freely in the trade. Therefore the inflow into the trade must be restricted—it must be borne in mind that what I am saying applies only to certain trades, and that it would be an unfair description of many other trades—and this can be done by declaring that only he who has served his apprenticeship,—or worked for a certain number of years successively in the trade,—can be admitted, whilst at the same time the number of apprentices in a shop is limited. Here—as so often happens with restrictions—there arises a difficulty, not easily got over. If only those who have served their apprenticeship or worked so many years are admitted into the union, the man who has not done so, remains a thorn in the side of the unionist; if he who has not fulfilled such conditions is admitted, the unionist has lost one important means of controlling the entrance. That the New Unionism has other means we see by the action of the dockers, who simply, after limiting their own numbers, refused to allow any man to work who did not possess the union ticket.
But then what does this control of the entrance mean? It means war on other kinds of labour. Just as the union means a kind of war upon those in the same trade whom it is important to bring in and yet themselves do not wish to be admitted, so it also means war on outside labour. It means that the labourers in other less well paid trades cannot find free access to the better paid trades, that the dam is preventing the true level being found, and that those inside the dam are profiting by keeping others out. Now that is a bad arrangement for all concerned. It is certain that artificial privilege works badly in the end for those who possess it, and carries in itself the seed of its own decay; but this arrangement works badly not only remotely but also immediately and directly. In a restricted trade a parent may be unable to introduce his own child into the shop where he works. The thing which of all others he would most wish to do, to have his boy near him, under his eye, learning his trade, is the thing that is made difficult to him, where a system of restriction exists,—a restriction that is increased at present by the stupid interference of our education laws. Never was a heavier price paid for a possible improvement of wage than this sacrifice of this most natural and healthy arrangement. But so it always is. The restriction we forge against others is always to our own grievous hurt. What I want to press upon those Trade Unionists, whose minds are open in this great matter, is that all systems of restriction hurt more than they advantage; that even the better forms of Unionism are always lending themselves to a certain amount of restriction, if they are to be effective for raising wages. We see that Unionism may mean interference and coercion as regards certain outside labour in the same trade; that it tends to cut off from itself the most pushing and the best men; that in some cases it dams back the labour that would flow into the more highly paid trades from less highly paid occupations; that it puts difficulties in the way of the instruction by the father of his son in his own trade; but besides these there are many other forms of restriction which are apt to spring up whenever men begin regulating for each other the conditions of their labour. The close delimitations of the labour of each trade, the rigid boundaries between mason, bricklayer, plasterer, and carpenter, often leading to much inconvenience and expense,—such as we see in the case of the carpenter, who was fined because he was seen enlarging the holes in the wall in which his joists were to be placed; the rule, that existed in one part of England, that bricks laid in a district should be made in the same district, a rule that has stopped work for want of bricks, though bricks in abundance were to be had close by; the rule that stone dressed in the quarry must be dressed only on one side; that stone already dressed must be defaced and dressed over again by the men employed at the works; the rule that an employer building in another town must take half the men from his own town, even if he cannot get them; rules regulating what the bricklayer's assistant may do, and forbidding his rise, however competent, into the rank above him; the rules forbidding piece work; the rules forbidding certain methods of work and payment, which are not the authorised method, even if those in the factory or shop prefer the method in question and are earning more money under it; the rules enforcing a rigid uniformity in the method of doing work; the rules that a man is not to run or to sweat himself in his employer's time; rules against besting his fellows;—all these are examples of how thick and fast restriction is apt to grow when once men begin to employ it as their instrument. It is only what we ought to expect. Restriction will always breed restriction, both because the first restriction is found to be incomplete without the second, and the second without the third; and because men who once lend themselves to restriction acquire the temper of betaking themselves to restriction in face of every difficulty.
A list of such Union sins—and let it be well understood that they only apply to certain trades, and some at least, I hope, are growing obsolete—is to be found in Mr. Thornton's interesting book on Labour (p. 326). He himself considers that all such restrictions are not of the essence of Unionism. That maybe true in the sense, that they are principally found in unions which have something of the nature of a monopoly. In trades, such as the cotton trade, where there is keen foreign competition and intelligent appreciation of the position amongst the workers, such restrictions are likely to be at a minimum; but the moment you have entered the path of restriction, you may be sure that whatever further restrictions are necessary to make your first restrictions efficient, will presently be employed. That is the danger of all restriction; there are so many steps waiting to succeed to the first.
Let us look quickly at some other faults of Trades Unions. It not only surrounds a man with restrictions, which every frank person will admit to be an evil, even if an evil accompanied with good, but it does much harm by disregarding natural variety, by tending to throw men into one class, and treating them as if they were all alike. Men are not alike in strength, endurance, or character; and it is much happier and better for them when these differences find their true expression. There are some men who prefer long hours and slow work; some who prefer few hours and sharp work; some who prefer long hours and sharp work, receiving for it higher reward; and it is a wrong and cruel system which ignores all these differences and dictates the same uniform work and same uniform pay to all men. If the life of labour is to be a happy life, one of the principal things to be done is to give every opportunity that is possible to the worker to follow his own manner and hours of work. At the British Association this year Professor A. Hadley mentioned an interesting fact. In America he found that in one factory, where the hours were longer, less work was done than in another factory where the hours were shorter. Why? Because the slower workers could not live the pace of the quicker workers, and preferred to work longer hours at the pace that suited them. Thus a natural sifting took place, which adjusted the work of the men according to their own likings. This is what the workers have to aim at. Not rigid uniformity, not an established number of hours, or one orthodox method, but infinite variety, meeting the varying wants of different natures.
Let it be remembered that there is no living man who can measure the full result of restrictions. They are always clumsy things, and though some of their results can be foreseen, they always produce some startling and unexpected results. In the case of Trades Unions they interfere rudely with the motives that influence a man's desire to do his best. Where piece-work is forbidden, the better worker, as we have seen, has to adjust himself to the pace of the slower man, he has to think whether or not he will do more than his comrades consider right. Most of us are more or less familiar with examples where difficulties with unions have checked attempts on the part of enterprising manufacturers to take a special branch of trade out of the hands of competing foreign countries by impeding adaptations that were necessary for the purpose; they are apt to lead to centralised management—one of the greatest curses in the world—placing the arrangements of the men in a particular shop with the employer at the mercy of some established system and the officers who enforce it; they sometimes hang like a thundercloud over the head of the best employers who desire to try new paths; and they are apt to destroy the possibility of a close alliance and partnership growing up between such employers and their men, and thus to prevent the energies of the country being freely given to production.
I am not bringing these charges, which for the most part are very old, because I think in labour disputes the men are wrong and the employers right. I only bring them because these evils seem to me the necessary result of restrictive methods. I think all restriction—wherever and by whomsoever employed—works out badly; and I feel sure that the workmen will never gain the inheritance waiting for them, as long as they seek to advance along that line.
Ahead a still graver evil lurks in these restrictions. As I have already said, no person who once enters the road of restriction ever stands still. Either, conquering all former scruples, he goes on supplementing the old restrictions with new restrictions in order to make them efficient, or, disgusted with the odiousness of compelling men to act against their own wishes and of reducing them to cyphers by regulation, he throws up the whole attempt and retraces his steps. We are now reaching a point where unionists must make their choice. If they are to persevere in the path of restriction, they must be prepared to put themselves and their brother-workmen under a system in which their own individual wish, and even the wish of their own particular trade, can count for almost nothing. You cannot form the 1/100th or 1/500th part of a huge fighting system, and keep any real control over yourself. The necessities of the system as a whole will govern your action, and you will be carried forward with the general movement, whether you approve or disapprove. I ask unionists to judge present Unionism, not simply by what we see to-day, not simply by the restrictions and coercions which they are occasionally tempted to employ towards their fellow-workmen either at the moment of a strike or when it is thought necessary to force men into union, but by the threatened development of Trade Unionism,—all trades being federated into one body and negotiating with all employers, federated into another body. I ask them if they are willing to help forward such an organisation of society into these two hostile camps. I ask them to think of the tremendous power that must be lodged in a few hands; of all the countless struggles and intrigues to obtain that power; of the worthless men who will succeed in obtaining it; of the fatal mistakes that will be made even by good and true men, holding this power in their hands; and of the harsh unscrupulous use that will be made of this power to destroy all individual resistance that is inconvenient. I ask them if this is an ideal to which they are ready to devote such part of their lives and energies as still remain to them, to organise society into two great armies, always watching each other, and always preparing for bitter struggle; and I ask them, even if, after the struggle, labour prove successful, if employers and capitalists were thoroughly worsted and obliged to take such terms as might be dictated to them, would such a defeat be good for labour itself, would it make for its progress and its happiness? Does not the sense of absolute power in the end wreck all those who possess it; are there any amongst us who are not destined to be corrupted by it, more surely than by any defeat or reverse that can happen to us?
Now let me turn to the economical side. Can a system of restrictions really better the men's position? can it better wages? can it take from the employers and give to the men? I venture to say that the mass of evidence is distinctly against any true and permanent bettering of the men's position by such means. Certain things may be conceded at once. I think it was Mr. Mill who summed up the power of trades unions in altering wages, by saying that they could bring about the rise of wage quicker, and delay the fall somewhat longer; and a Midland manufacturer has lately (Free Life, 24 May) pointed out their equalizing and averaging effect. Under their influence small masters on the one side, and some of the men on the other, do not grasp at every little turn of the market that takes place in their favour. Grant also, as Mr. Thornton points out, that if tremendous battles have been lost by the men, still they have led to after-concessions on the part of the masters in order to avoid a recurrence of such struggles; and that there has been this good effect in certain strikes, that they have allowed over-large stocks to be decreased. Grant also that where a trade is in the nature of a monopoly, as in the case of the London Dockers, or in a less degree the building trades, that wages may be pushed up for a time considerably higher than they would have gone, or than they can healthily go, as regards the trade itself; grant all this, yet is this a sufficient compensation for the state of war that is established between men of the same trade, between different trades, and between employer and employed; for all the individual inconvenience and restriction, and the loss of individual free action; for all the arbitrary things done by those in power, and the temptations towards coercing others; for all the sums that go daily and hourly in war-subscriptions, for such sums as the £427,000 of wages lost in the great Preston strike, or the £325,000 of the London building labourers in 1869, or, as the Economist reckons it, the millions that have been lost, all things counted, in the late Australian strike; for all the time and energy of the men spent on the unions; and, last of all, for the coming perfection of Unionism, when society will be split into two sections, living, like France and Germany, in the highest state of tension towards each other? If it can be shown that Unionism cannot permanently alter the wage of labour, and that economical injury constantly results from its action, would it not be wise and right for every unionist to reconsider the whole matter, and ask himself if he cannot spend the very limited amount of time and energy, that each man possesses, to serve the cause of labour in some other fashion?
It has been often said by economists that, as wages are paid out of that part of capital called the wage-fund, the true method of increasing wages is to increase the whole body of capital. This doctrine has been bitterly attacked, but it has never been substantially shaken. It is true that some part of wages maybe deferred, and not paid until the product of labour has been realised, but that only means that the wages fund at a given moment may be looked on as consisting in part of new capital as well as old capital; it is also true that some products of labour may become capital in a few days or weeks; it is also true that at certain moments the capital that has been produced may be increased from what has already gone into consumption, as if everybody who had three coats determined to put one of them into the market; but the all-important fact—which in reality is a mere truism—remains, that only as the methods of production are improved and more is produced at less cost, can more be divided between employer and employed. Let it be clearly seen how the worker is benefited by increasing production, and by better and cheaper methods of production. Wages may remain the same; employers' profits may remain the same; and yet the labourer's condition be wholly changed by better production. Suppose that the employer and workman divide the product in the proportion of three to seven, three to the employer and seven to the workman, and suppose that the day's work to-day produces four, where yesterday it produced one. Then both the employer and workman get the advantage of seven and three multiplied by four instead of one. It is only necessary for this improvement in production to affect all articles used by the workman, and then as regards all such articles, his wages remaining the same, he is better off as four to one. [See note A at end]. A clear perception of this method by which labour is benefited, shows us several great truths; how fatal is all protection; how unfair to the rest of labour are any forms of restriction and monopoly in certain trades, inasmuch as these trades take more and give less in the general exchange; and how unwise are the struggles over the ratio or proportion in which the product is divided, when the matter of prime importance is to improve production, and thus increase the share falling both to employer and employed.
The question will however be asked, in face of modem industrial improvements, Why then are not our labourers better off? Amongst other reasons, the first and foremost reason must be that capital is not produced fast enough, or economically enough, which itself arises from various reasons,—for instance, because of the stupid struggles between labour and capital; of the far too great luxury on the part of many of the rich, and their lavish expenditure on perishable articles, which when destroyed leave the world no richer,—an expenditure, which, as they do not perceive, employs but wastes labour [if every rich person would religiously invest in industrial concerns £1 for every £4 spent on himself, the change would be enormous in our prosperity]; of imperfect systems of saving amongst the workmen; of imperfect free-trade in several directions, especially in the matter of land; of the restrictions and jealousies of trades unions; of the imperfect direction of joint-stock enterprise, which is as yet only young in the world; of considerable quantities of badly trained labour,—our reformers not paying enough attention to offering facilities for third-class men to improve themselves; of the present fashion of sanitary reforms, applied officially and compulsorily, and the neglect of the individual intelligence of the people, on which far more depends; of the imperfect development of our moral qualities in every class which leads to bad and untrue work of every description and to waste; of the meddling and muddling of big and little Governments, which sends capital abroad, hinders the workmen learning how to associate for their own purposes, wastes an enormous amount of energy in political struggles, and weakens the productive machinery of the nation, on which everything depends; and, lastly,—though many other reasons might be given,—that many of our ablest men do not go into trade, which is one of the best and noblest occupations, partly because we have foolish superstitions in favour of the professions, partly because Government exactions and restrictions, joined to labour troubles, not only lessen the reward of the employer, which is naturally but small in an old country and age of sharp competition, but tends to deprive the trade life of its enjoyable character.
Is it therefore worth while, I would ask of all open-minded trade unionists, to be quarreling about the proportion in which the product is to be divided, when the great aim must be to make the course of production easier and smoother, get more brains and invention devoted to the work, and everywhere increase the points of concord and lessen the points of fiction? Universal Unionism would not help matters; for successful production depends upon the willingness and, so to speak, good temper of capital,—its readiness to run risks and try new methods,—and the theory of universal Unionism—if candidly stated—is to get capital into a corner, and make a mere labour's drudge of it. Partial Unionism—even if effective—is only the momentary (not the permanent) bettering of certain trades at the expense of other trades. Of course a trade unionist might reply that the advance of wage maybe taken, without raising prices, from the profits of the employers. But that is in itself unlikely to happen, and not even permanently profitable to the men if it does happen. The profits of one trade are in strict relation to the profits of another trade,—capital, just as labour, always trading to an equality, and every trade expanding by the inflow of capital when profits rise above the ordinary level. It may be replied that this is true, allowing for some lapse of time, but that the profits of the employer begin to rise the moment that some turn in the market favours a special trade. That also is true; but let us see what happens, first, if no trade union interferes; and secondly, if it does interfere. Let us suppose that the price of pig iron advances, that trade becomes brisker, and more iron is manufactured. The first result of this is that unemployed men are brought in, and half-time becomes full time for the employed men. Good for the men in either case, even though for the moment there is no rise in wages. But increased production means lower prices, and though these lower prices check the employers' desire to produce, they also enlarge the demand of purchasers, so that we may suppose that the trade still goes on expanding. But this second expansion must result in higher wages. The unfilled cisterns have now been filled, and there must bean overflow. The unemployed have been brought in, and the competition amongst the masters for the men must carry the wage up. And notice in this instance that the rise has come about in a perfectly healthy natural manner. There have been no disputes; contracts have come in and been accepted; the trade has expanded and contracted according to natural requirements; whilst in the case of the men the unemployed have first been brought in, and then wages have moved slowly but surely up with the expanding trade. Suppose also that the men have not at first secured the whole rise that ought to come to them. Are they injured? No. For if the profit of the masters is at all in excess it produces the very thing that is most in the interest of the men. They borrow capital and enlarge their turn-out, whilst, if the upward movement seems likely to last, new employers begin to enter the trade.
Now, take the other example. The same favorable movement of trade has taken place; but this time the union, on the alert, has insisted on a rise of wages. This rise of wages, perhaps slightly in excess of what the rise in prices justifies, may check the enterprise of the employer. Deprived of a part of the extra profit, he is less inclined to enlarge his business; he is puzzled about the future action of the men as regards the contracts which are offered him; at the same time the rise in prices following upon both the original movement in the trade and the subsequent rise in wages, is checking consumption and therefore checking the expanding condition of the trade, although so far as it exceeds the rise in wages it is tempting the employer to enlarge his operations.
Now I think it is hardly possible to review the two processes, remembering how all strain between employers and employed checks production, remembering the unwise things that will be done on both sides, the mistakes made on both sides, the waste of time and energy on both sides, in offensive and defensive preparations, and the fatal effect of a fight at the moment when trade is becoming favorable, without believing that the workman would actually gain more in wages (I do not speak of a trade where there is a monopoly, which stands on a different footing) if his Union abstains from all interference in the matter. The Union is so liable to make mistakes; the market, left to itself, will not make mistakes. I suspect the union often acts like a fisherman, who snatches the bait out of the fish's mouth, in his hurry to secure his prize, instead of waiting for the fish to pouch it. The first rise in a trade is the bait to the employer to enlarge his business, put on more hands, and accept contracts. When he has once taken those steps, the wage must rise; even if the workman's share in the profit does not come to him quite as quickly as, strictly speaking, it ought, he has no occasion to repent it. It is probably the very best investment that he could have made. It is ground-bait, and with moderate patience will bring far more to his basket than what he loses at the moment.
But it may be urged that all this danger may be prevented by the sliding scale. The sliding scale has many virtues, as it removes to a great extent that uncertainty from the mind of the employer which is so fatal to successful production. But the sliding scale has special difficulties of its own, as, for example, where different elements are concerned in the price, so that a higher price may not mean a higher profit to the employer.
Of course, Trades Unions have a power to raise wages for a time in trades which are a monopoly, as in the Dockers' Union, or in trades which are partly a monopoly, as the building trades. But this power is both hurtful to others and limited in its own extent. In the first place, such extra wage is taken from the pockets of their fellow-labourers. It is in fact nothing but war against labour. Taking advantage of their position, these monopolists accept the labour of their fellow-workmen at a lower price, whilst they charge a higher price for their own. And does it profit them? The trade is pinched and starved by the high prices; there is perpetual war between employers and employed, wasting the extra gains of labour; capital arms itself at all points, and retaliates; quick brains begin to devise new methods of circumventing the monopoly and working through other trades or through other channels; whilst the men succumb to the universal fate which overtakes all those, poor or rich, who are artificially protected, and begin to deteriorate in their own character. There is also another consideration. The men not only hurt themselves as consumers, by restricting their own trade, but they may throw out of gear other allied trades, and by depressing the production of these other trades still further, hurt both themselves and all other workmen by reducing the general product. Under a free-trade system, it is impossible to measure the amount of disturbance that maybe caused by even one dam being thrown across the supply of some particular labour. It is the interest of all other trades, as well as of the public, to discourage all such dams, and to make the free-trade footing universal for all. I do not mean that A and B should accept work on any terms other than those that they themselves approve; but that they should throw no dam round their labour by preventing C from taking a share in their work or from accepting terms which they decline. That is the true labour principle, universal individual choice, and no pressure exerted upon others.
Mr. Thornton (On Labour, p. 281) has supposed that in several cases the pressure of Trades Unions can permanently raise wages. Whilst I respect much that he has written, I do not think he has thought any of these cases thoroughly out. Excluding a monopoly or half-monopoly, and taking the case of expanding trade, or of an increased product, it can be shown that under a free system the extra profit must eventually come to the men, whilst the restriction or the pressure, employed to gain that profit, is likely in the end to destroy the extra profit by lessening the vigour and expansion of the trade. In the case of a universal rise of wage, he argues that capital would have no choice, no power of helping itself; but a universal rise in wage, without a universal rise in price—which latter rise would benefit nobody, but leave us all, with some momentary exceptions, as we were—is very unlikely to take place. The fact that capital goes so largely abroad shows that, as things are, we are near the margin of profit; and a slight unfriendly pressure exercised upon capital, a slight discouragement to its investment, would probably do far more in reducing wages by reducing the amount of capital employed, than in raising wages by raising the proportion of the product which comes to the labourer. Independently of this, the truth is, that the greater becomes the pressure of Trade Unions, the greater tends to be the rate of profit demanded by capital, in order to recoup risks and inconveniences, just as the existence of usury laws drives up instead of lowering the rate of interest; whilst the less the pressure and interference of the Unions, the lower tends to sink the rate of profit. Lastly, Mr. Thornton instances the case of much capital invested in buildings and plant, which could be nipped safely by the union because it could not be withdrawn without great loss. But that is profit for the moment at the cost of sacrificing the profit for the future. 'Once bit, twice shy.' The capital which is so treated avoids the trade in question, like a plague-infested district, and the trade suffers grievously instead of profiting by such folly. Nor is it right to say a trades union could permanently raise wages in the case of increased product. If such increase were general over the whole field of production, all the labourers would profit, with or without Trade Unions, for there would be a larger product-fund to be divided amongst them, and each man's labour would exchange for more. It should however be remarked that an increased product in one trade, other trades remaining undeveloped and inactive, would not directly benefit the labourers of that trade,—except so far as they consumed their own product—since they would receive only small quantities of the products of other trades in exchange for their own larger product. It would, however, benefit them indirectly, for it would imply that their trade was in a vigorous and expanding condition, and was probably in the hands of a higher and more efficient class of employer. Mr. Thornton also says (276) that if in an expanding trade with rising prices, the employers were to raise wages, then there would be no need for capital to come in (and thus reduce prices and presently wages, by restoring the balance of supply and demand); but that the employer would go on receiving only normal profits, whilst the trade remained stationary. He forgets, however, that the labourer, having got the whole rise, is at once placed in an abnormal position, and that other labourers would be attracted to his trade. The consequence would be that the labourer with the extra profit must either dam back by some artifice the inflowing labour, or lose his extra profit. He therefore would not be profited except at the expense of other labour.
Moreover, at the same time Mr. Thornton ignores the meaning of the rise in price. The rise in price almost always indicates greater demand, in some form, and as all large works pay better when fully employed, the production would be at once increased and new capital be necessarily brought in. Each employer would know that another employer would begin to run full time; and if he did not, it would be at the expense of the whole public, who would run short of their supply, and pay higher prices than they need pay.
Perhaps here it is right to say one word about high wages. They may be the truest sign of national health and vigour; or they may be just the reverse. If they are the result of monopoly, because in some special field labour has cornered capital, and by violence has driven other labour out of competition, or the result of the high prices existing under a protective tariff, they only indicate unhealth of the body economical, and are sure to be accompanied or followed by disturbances of various kinds; if they are the result of perfectly free competition existing everywhere, then they are the truest sign of health, for they show that capital is abundant; that being safe and unharassed, it is content with a small reward; that the labour itself is of high quality and therefore rightly commands a high reward, and that the product which is being turned out is sufficient to give this high reward to the labourer. Blessed would be such a country; for one could safely say of it, that the good sense, the self-restraint, the friendliness between classes, and the intelligence of its people were as fully expressed in those high wages as its adherence to that perfect free-trade and perfect competition which are the only equitable conditions for all.
Here however it might be urged, as it would be by some economists, that all this is true, demonstrably true, that it is only a truism to say that the labour of the country never can obtain for itself, except at the expense of other labour, more than the free and open market will yield, but that such a regulation of wages belongs to a state of perfect competition; that competition is still very far from perfect; that the labourer cannot take his labour to the best market and make the best price of it; that often ignorance on his part and other difficulties stand in his way; that there is amongst employers that 'tacit combination' of which Adam Smith spoke; and therefore that the Union of the workman is the necessary answer to the imperfections of the market [see note B at end]. Granted, if you like; granted, that competition is not perfect, that there are many obstacles in the way of the labourer obtaining the perfectly just rate—just as declared by competition—in the open market, yet what is the true course to follow? To turn our backs on the method which must be pronounced to be the true one, because it is still imperfect, and plunge into an interminable morass of restriction and regulation, through which we can only make our way by guess-work and reckless adventure; or, instead of this, press steadily on in what we know is the true direction, and gradually remove the obstacles in our way? What we have to fear is not competition, but imperfect competition. No man, whether he is street-sweeper or writer of the highest philosophy, can reasonably claim more than what his work is worth to his fellow-men. Suppose that every man's work could be put up at a national auction, and sold with the whole nation as bidder, could any man reasonably complain of the result? He would have obtained the highest that his fellow-countrymen were willing to give; he has no title to more; and if by any device he succeeds in extracting more, he is behaving with something that is very near to dishonesty, since he is forcing this higher price at the expense of others.
Now let us see how far such perfect competition as I have sketched, a competition, under which men could realise the true value of their labour according to the wants of their fellow-men, is possible. In old days it was not possible. When villages and country towns lay cut off from each other, and ignorant of each other's doings, there could only be local not general competition. Now all is changed. Now-a-days we have both publicity and mobility. The spread of the press, the post that penetrates everywhere, the railways that link us together, all these are making it more and more possible for men to know the value of their labour and to offer it in the best market. Of course there are still left many restrictions and impediments, and many things still left to do to perfect the free labour mart—that outcome of a very high civilisation. Amongst these restrictions are the restrictions of trades unions, at which I have already glanced, which may limit the numbers engaged in a trade, which may disallow the non-unionist working with the unionist, and prevent a man acquiring a trade at any moment of his life. Till these restrictions are done away with, there can be no true labour mart. To get rid of these restrictions must be the work of a reforming party within the unions themselves; whilst the employers go on steadily with their present policy of opening registers of what. is called 'free-labour,' and then of organizing the free-labour men into unions for their own protection. To be weak is miserable indeed, and the non-union men will only take their proper place by acting together. But when these restrictions are removed, there is a good deal to be done. Every place should weekly report the state and the wants of its labour market,—one statement being made by employers, one by the men; the Gazette of the Unions might contain notice of every shop and the number of men employed in it, with notes both by the men and the employer as to wages offered and the class of labour wanted. Unions might also probably do something in the way of owning and letting lodgings for their own members in search of work; and different trades could be combined for the same purpose. Once the great mass of our workmen recognise that the true and fair policy for all is making the labour-market as free of access as possible to all, of diffusing the widest information, and leaving every class of labour in the same trade to accept its own rate of pay and work its own number of hours, much can be done to help this object. The needful thing is to get effort into the right direction. To make it clear, let me sketch what would be the attitude of the men under the new state of things, and the part which their unions would play. They would stand on this ground. They would leave every man free to settle his own price of labour, just as every shopkeeper settles his own prices, though all prices would be published and some might be recommended. They would let every man follow his own inclination as to the number of hours he worked, or the character of his work,—the result of which would be that a natural differentiation would take place, some workshops running longer, some shorter hours; some containing the pick of the workers, some the second-class and some the third-class men. They would break down every fence that prevented a man acquiring a trade for which he had an aptitude, and there would be nothing to prevent clever men, as happens even now in a limited way, following different trades at cliff erent times. There would be no minimum of wage, except such as each man chose to fix for himself, and there would be no strikes, such as exist to-day. In the case of a serious disagreement between an employer and his men, the union would remove all such men as wished to leave, giving them an allowance for so many weeks whilst they were finding new employment. But there would be no effort to prevent the employer obtaining new hands. All that had happened would be stated in the Union Gazette, and it would be left for those who chose to engage themselves at the vacant shop, to do so. There would be no strike, no picketing, no coercion of other men, no stigmatizing another fellow-workman as 'scab,' or 'knobstick,' or 'blackleg,' because he was ready to take a lower wage,—all this would be left perfectly free for each man to do according to what was right in his own judgment. If the employer had behaved badly, the true penalty would fall upon him; those who wished to leave his service would do so; and the facts of the case would be published. That would be at once the true penalty and the true remedy. Further than that in labour disputes has no man a right to go. He can throw up his own work, but he has no right to prevent others accepting that work.
Under this system there would be no unions of exactly the present type, but there would be far more association amongst the men. The probability is that almost every man would belong to some form of union. Information would be the first great purpose. Information would not only be supplied about labour and the state of the market, but about the character of the shops. The employers would state their terms and the quality of the labour they required. Publicity would be an important agent of improvement; those workshops in which the comfort and health of the worker were specially cared for would be described, and the effect of their good example would be to bring others slowly up from their lower level. At the same time the men, now that they had ceased to pile up great funds which might at any time be dissipated in war, would invest far more in remunerative undertakings. The Union being no longer a war-machine would serve many great purposes. One great object that lies before every workman is to have two sources of revenue; his labour earnings, and his return from industrial investments. If all the money wasted in labour-war had been invested in industrial concerns, wages would be higher than they are now, and the men would be part owners of a considerable amount of the industrial machinery of the country, having gained the increased wealth, the business knowledge, and the influence, which would follow from such part ownership. Investment for their members will be a leading function of the new unions. By means of the weekly subscriptions they will be always buying shares in the industries of the district, in water, gas, omnibus, tramcar, dock and railway companies, in the great industrial concerns where their members work, and then passing these shares onto the individual members, as the small weekly payment comes up to the required amount. So also with land and houses. The Unions would act as house-building societies, building or purchasing houses, and then passing them on in return for small monthly payments to their members. Those members who did not wish to purchase would hire direct from the Union, which would itself become a larger owner of house property for this purpose, of a better and more convenient character than those houses in which workmen now live. More than this, every Union of town-workers would have its farm in the country,—held in good fee-simple, and not under any imperfect land-nationalisation tenure,—which would provide pleasant and healthful change for its members in turn. Members would erect their own wooden rooms for the summer; there would be a sanatorium, and possibly certain articles, like fresh eggs and milk, would be regularly supplied to those who cared to make such an arrangement. The Union would also offer certain training advantages. When work was slack and men were unemployed, workshops would be open where men would acquire a facility in the use of certain tools, and the power of taking up other kinds of work. It is hardly too much to say that every man would be more independent in life if he were up to a certain point a carpenter. At times of depression there are many simple things for his own domestic use that each man might make; and just as so many Norwegian farmers work in silver or make boats during the long winter evenings, so should the great bulk of English workmen have other occupations to fall back upon in times of non-employment. Besides the workshops, there would be educational opportunities, so that no unemployed man would let his time be wasted, as so cruelly happens at present. The New Union, like some of the London workmen's clubs, would have many different funds,—each purpose, at which I have glanced, having its own fund, to which each member would subscribe or not as he chose; the out-of-employment fund, the benefit fund, the intelligence fund, the investing fund, the house-owning fund, the land-owning fund, the educational or workshop fund, and such other funds as were found desirable. Those who had chosen to subscribe to the educational fund, might in a serious time of depression be altogether withdrawn for some months from the labour-market,—a voluntary levy of the other workers being added to their own fund.
I cannot follow any further, as I should like to do, the useful operations which the New Union would perform for the men. Once relieved from the miserable duty of fighting the employer, its energies would be called out in many directions, which are scarcely in the region of imagination at present. There is no want, intellectual or physical, which they would not strive to supply, often in competition with the open market,—as can be seen to-day from what the best of the London clubs are beginning to do for the men. Sometimes, perhaps often, they would be beaten by what the trader offered, sometimes they would beat the trader; but the outcome would be for the ever-increasing advantage of the men. That is the true use of co-operation, to act as another competitive force, and thus to improve, not to replace, the competitive forces that are already in existence, whilst it is itself continually improved by them.
Such would be a part of the result of the abandonment by the men of their war-organisations. The whole result I cannot sketch here; I can only lay stress upon the vast effect of transferring the energy and intelligence that are spent to-day upon war-purposes to the direct purpose of reconstructing the circumstances of the workman's life. Now let us look in another direction,—at the effect upon capital of substituting peace for war. Capital relieved of all attacks and of all misgivings would become intensely active. The same wise spirit in the men which had led them to abandon all attacks upon it through their organisations, would also lead them to put a sharp curb upon the mischievous activities of the politician, and to prevent his happy-go-lucky interference with it. Capital would thus have that sense of complete security, which is beyond all value to it. It would know that under all circumstances it would receive its full market reward, however small it might be. The consequences would be that this country would become the home and storehouse of capital. Capital, which now so largely drifts abroad 'into very speculative enterprises, because in so many matters it feels uncertain about the future, would prefer to develop new home enterprises; and not only would wages rise, but many useful commercial undertakings would be carried out on behalf of the workmen which now are left undone. In two senses the workmen, if they so choose it, may become the masters of capital. They may encourage capital to such an extent, that the competition of capitalists will drive the reward of labour up to the highest point, and the reward of capital down to the lowest point; and secondly, being the largest body of consumers, they may have capital at their feet, trying to find out and discover their every will and pleasure. We have had lately a significant example of this new disposition of capital in railway traveling. The third-class passenger is found to be of more importance to the railway company than any other passenger; henceforth his convenience and his pleasure will be more and more appreciated, whilst the first and second-class passenger will sink in the scale of consideration. Then the ready inflow of capital does so much to keep all trades in a healthy and vigorous condition, and thus to raise the general product, and thus to raise wages. With capital come in new brains, new methods, new machinery. The old, cramped and perhaps unwholesome factory, with its obsolete machinery, cannot live alongside of its new rival, and is gradually weeded out. The second-class employer and unthrifty manager is removed in the same way. Thus both efficiency is always obtaining, where capital flows freely in, and the product is always tending to increase. Let it be said again and again that upon the increase of this product depends the prosperity of the workmen, as a body. If this product is small, no earthly ingenuity, no organisation, no government systems, no grants in aid, no form of protection, can make the general condition of the labourers good. It is altogether past praying for. If, on the other hand, this product is large, and goes on steadily increasing beyond the increase of population, whilst all industrial processes are being improved in themselves, nothing can prevent the material prosperity of the workmen. Of course, as happens with every class, we may through mental and moral deficiencies throw away a large part of such prosperity; but with time will come the development of the qualities that are still lacking. One thing however—before alluded to—is worth repeating. A special trade may be working on free-trade principles and producing largely, and yet its members may not be better off than the members of other trades. They are not better off, just because other trades are cramped and restricted, are repelling capital, are not doing their duty in the general work of production. The first trade adds bountifully to the general wealth, but receives in poor proportion from the others; these others profit by its large production, whilst it itself suffers from their restricted production. It is the workmen's interest therefore that no trade-monopoly should exist anywhere, that every trade should be free from restrictions, should be attracting capital, should be producing largely and efficiently, so that in every direction where each man exchanges the product of his own labour, he should receive much in return. Moreover, the efficient direction of labour and the efficient production which take place where capital flows in freely help the workman in another manner. The middleman tends to be eliminated, and then there is more to be divided. He can only be safely eliminated by natural processes. Sometimes he is of real use and helps production; sometimes he is not; but this cannot be decided by a blind strike, but only by allowing the forces of competition to act upon him.
The point then that I urge upon Trade Unionists and all workmen is the same point I should urge upon nations. Seek to get rid of war. Seek to get rid of the war-organisation, which is a terrible hindrance to all developments of a higher kind. Give up attacking capital. Leave capital to reduce its own reward, which it will do far more effectually than you can do, by competition with itself. Create for it the most favorable atmosphere. Cultivate with all the better employers friendly personal relations. Disregard stories of excessive profits. Here and there some men, possessing powers of a very high order, and excelling in commercial judgment and aptitude for organisation, may build up great fortunes. Don't grudge such man a single penny of their wealth. They are the true servants and helpers of all. Remember that all ordinary profits are tending to fall. Indeed some economists go so far as to believe that in the future money will cease to pay interest. Be this true or not, let us suppose for a moment that by giving up Trade Union war the workmen should see, if it were only for a time, a large profit left in the hands of capitalists, whilst no rise took place in their own wages; would that be an unmixed evil for them? The answer must be 'No.' Because not only, as we have seen, would such trade be increasingly prosperous, but because the high profit is the very stimulus that is wanted to develop the workmen's co-operative and joint-stock association. The difficulty that now stands in the way of these associations is that small trade profits are not easily made, large trade profits with difficulty. If a large profit could be made easily in any trade, workmen's combinations could at once come into existence. Thus, looked at in every way, the workman has the ball at his feet, if only he will not kick it away from him. As the wealth of the country increases, larger and larger shares of it must come to him. He has only to let the natural processes go on, to resist all temptation to fight, or to rely upon artificial protection for his labour, and thus to shield himself from the stimulus which we all want to keep our good qualities free from rust, whilst he turns his spare energies in the direction of carrying out the things which most affect his comfort and happiness, and puts all his spare cash religiously into industrial investments, to become, as he is probably entitled to be, the true owner of this world and all that therein is,—with a few spare corners perhaps left for the rest of us idlers. Honestly, happily, with no hurt and no oppression of others, he can obtain all that the State-Socialist vainly promises at the end of useless crime and revolution,—for crime and revolution will not bring it; they are instruments that defeat themselves,—and far more, for he can obtain it, whilst he preserves that priceless gift of remaining the master of his own actions, and not being under the regulation of other men. See note C at end.
A few last words. Of course this abandonment of industrial war on the part of the workmen would be nearly in vain, if the politician is still allowed to play his usual high antics upon his own stage, if capital is to be harassed by ill-considered laws, its reward filched from it, and thus the growing inclination to invest is to be checked, if land is to be rated in such fashion, that the tenth part or the fifth part, or more, is taken of its yearly value, if it is to be tied up in a new form of settlement by such stupidities as compulsory Compensation for improvement Acts, if everybody who climbs to power is to indulge his fancies and speculations at the expense of other people, if public departments are to spend without any real control from the public, if every new interest is to have its own department and its own minister, with the special office of securing to it a share of the public doles that are going, if the number of officials is to mount higher every year, and the area of regimentation is to grow larger, if municipalities and county councils are to be encouraged to undertake trade on their own account, and to be the instruments of preserving monopolies for certain favoured bodies of workmen, if local debts are steadily to increase, with little or nothing to show of permanent value in return, if splendid salaries are to be the politician's dazzling reward, if huge showy reforms, affecting only the outside of things, are to be encouraged, and all the healthy conditions for personal improvement to be made light of by the lawmakers, if free arrangements between employers and employed are to be prevented, and schemes like Employers' Liability (with all the mischief of uniformity about them) are to be forced on the whole nation, if lawyers and doctors are to enjoy monopolies, with all the vices and few of the apologies of trades unions about them, if every blessed occupation in turn, including accountants, teachers, journalists, and I presume at last street-sweepers, are to ask for charters and are to regulate their own numbers, under the flimsy plea of saving the public from incompetence, if the workmen's thoughts and energies are all to be given to these worthless political methods and to the barren struggle for power over each other, if the lies, self-seeking and hypocrisy of party warfare are to reign supreme in our hearts,—then the immense gain which would come from a cessation of industrial war will be neutralised both by other forms of monopoly and by the continuance of political war. Both forms are equally mischievous. Both in due time will destroy the nations that give themselves up to them, for both are opposed to the great principle on which alone happy and progressive society can be founded,—the unflinching respect for every man's will about his own actions.
Note A, p. 393.
As Professor Cairnes pointed out, whilst all improvements in manufactures help the workman, what tells against him is that his special article of consumption, food, gets dearer, as population increases, and lower-class soils are called into requisition. Against this, however, a good deal has to be set off. We have probably nearly as much room left for new knowledge and improvement in method, as regards the growth of food, and the use and preparation of food, as there is in other directions. We have only to think of unsettled questions, as regards sewage, the possibilities of certain plants storing up nitrogen from the air, and the growth of vegetarianism as a diet, to realise what changes the food question may undergo. Moreover, the workmen's wants are now extending in so many directions. Clothing, literature of all kinds, implements, better house accommodation, materials of culture and amusement, locomotion from railways to bicycles, and many other things, now begin to form a regular part of his budget; and as regards all these articles, he takes his enlarged share that results from improved production. The effect of modern years has been to call into existence an increasing number of articles, which are of increasing importance to him.
Professor Cairnes also laid stress upon another point adverse to the workman. A large quantity of capital in a manufacturing country tends to take a fixed form, to be invested in machinery and buildings; and such fixed capital represents the profits of employers, and a permanent tax, therefore, that has to be paid to them. It is true; and for that reason I so earnestly desire to see a regular organised movement amongst workmen for investment, so that they might gradually become the part-owners of this fixed capital. Every workman should religiously invest something, if only 2d. a week, for this object; and every workman should belong to a Union that would make the investment for him. One other point, however, of an opposite tendency should be considered. As capital flows plentifully into a trade, bringing with it better machinery and better buildings, at first the owner of such better equipment obtains a higher profit than the owner of second-rate working material. He is like the owner of a better soil, and gets the difference of profit that exists between the two soils. But presently in manufacture the second-rate man tends to be eliminated, and the competition is then between men, who once were the best men in the trade, but after a few years only represent the average,—having yielded the first place to later comers, who in their turn bring in later improvements. The consequence of this is that production is improved, the whole product is increased, and all concerned—except the manufacturer, who has fallen from the first to the second place—get a larger quantity as their share. The workman's share of the product is not increased in proportion (as regards the employer), but it is increased in actual quantity, because the product itself is increased. In this way fixed capital is on the side of the workman; as a tax, it is always tending to disappear; always tending to drive inferior and old-fashioned industrial apparatus out of existence, and thus to lessen the cost of production, and to give larger amounts of the product both to the employer and the employed, though the proportions that go to them respectively are unchanged. Here lies the whole gist of the matter. The workman has simply to care about the increase of the product, leaving the market to arrange the proportions that come to him. They will be increasingly in his favour. It is indeed to the workman more than to any other person that free-trade is of vital importance. The man who wants to be protected is the second-rate employer, with backward methods, who feels that he is being squeezed out by the better methods. One can only be very sorry for his position, which is often a hard one; but to protect him is to sacrifice general prosperity.
Note B, p. 400.
As regards combinations of masters, it must not be forgotten that it is in the interest of masters in some trades to preserve a state of restriction and monopoly; since, partly owing to the restricted numbers of the men, trade secrets, &c., they are able to make it difficult for new capital to enter such trades. It is in these cases that combinations of masters for settling wages are likely to be successfully carried out. In open trades the new employer is unlikely to enter into any such combination. He brings with him the advantage of all new improvements, probably has considerable capital behind him, and is determined to get good labour, even if he pays a slightly higher price than the market price. If the men would resolutely determine in their own general interest to discountenance a close or restricted trade anywhere, they might depend, under the circumstances of to-day, upon the influx of new capital for making any combination of masters in the long run untenable. Should such combination be maintained, no better field could be found for a co-operative association, or a joint-stock company, run by the men.
Note C, p. 409.
It might be well to summarise here the two things which seem of paramount importance to the workmen. First, the carrying out of a reform within the Unions, in the direction of giving to each man a much wider choice as regards his own conduct. For example, no central authority should override the terms which any shop chooses to make with the employer and only those who individually wish to strike should do so. Secondly, the abandonment of struggles with capital over wages. It must be remembered that everything turns upon the willing temper of capital. Capital stands on this vantage ground, that to set production going, or to increase it, it must be attracted, eager, and filled with confidence. We have therefore to insist upon these general truths,—that all war between capital and labour is fatal to the general good; that it cannot permanently increase wages, seeing that higher wages can only permanently come from larger and cheaper production, and that capital must be coaxed, not bullied, into the perfect performance of its true service; that capital should be thoroughly secure and at ease, so that on account of this ease it should be content with a lower reward, itself by competition with itself reducing that reward; that no violence or threat of violence from any quarter should be offered it; that employers should be constantly tempted to invest their profits in their business, thus enlarging their operations and increasing the fund that gives employment; that a certain part of the capital that now goes abroad should by this increased sense of security be kept at home; that the fullest encouragement should be given to employers to introduce improved processes and improved machinery, no employer being afraid to invest the largest sums of money permanently in his business; that by such improved processes all articles should be manufactured at the lowest possible price, thus ensuring to the workman the highest return from his wages, and thus favouring this country as regards the exportation of articles; that in no trade should there be any restriction or monopoly, seeing that the higher prices derived from such restriction and monopoly are obtained at the expense of other workmen, who only receive free trade prices for their labour, whilst themselves paying to such monopolists protective prices; that all labour should be free to move in such channels as best suited it, and that efforts should be directed to perfect the competition of the open market, as offering both the truest and justest return for the labour of each,—such return being measured by the wants of the public; that workmen should be more and more induced to invest in industrial concerns, thus becoming the owners of the fixed capital of the country, and thus possessing a second source of income in addition to wages; that investing Unions should be formed for this purpose; that no foolish legislative steps should be taken to restrict or impede joint-stock enterprise, and thus to throw fresh difficulties in the path of the workman becoming possessed of capital; and that the politician should not be allowed either to come between the employer and the employed, in the arrangement of their affairs, or to interfere with the profits of the employer, upon which the whole fabric of production rests, and with it the prosperity of the workmen.