Principles of Political Economy with some of their Applications to Social Philosophy

John Stuart Mill
Mill, John Stuart
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William J. Ashley, ed.
First Pub. Date
London; Longmans, Green and Co.
Pub. Date
7th edition.
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Book IV, Chapter VII

On the Probable Futurity of the Labouring Classes


§1. The observations in the preceding chapter had for their principal object to deprecate a false ideal of human society. Their applicability to the practical purposes of present times consists in moderating the inordinate importance attached to the mere increase of production, and fixing attention upon improved distribution, and a large remuneration of labour, as the two desiderata. Whether the aggregate produce increases absolutely or not, is a thing in which, after a certain amount has been obtained, neither the legislator nor the philanthropist need feel any strong interest: but, that it should increase relatively to the number of those who share in it, is of the utmost possible importance; and this, (whether the wealth of mankind be stationary, or increasing at the most rapid rate ever known in an old country,) must depend on the opinions and habits of the most numerous class, the class of manual labourers.


*27When I speak, either in this place or elsewhere, of "the labouring classes," or of labourers as a "class," I use those phrases in compliance with custom, and as descriptive of an existing, but by no means a necessary or permanent, state of social relations. I do not recognize as either just or salutary, a state of society in which there is any "class" which is not labouring; any human beings, exempt from bearing their share of the necessary labours of human life, except those unable to labour, or who have fairly earned rest by previous toil. So long, however, as the great social evil exists of a non-labouring class, labourers also constitute a class, and may be spoken of, though only provisionally, in that character.


Considered in its moral and social aspect, the state of the labouring people has latterly been a subject of much more speculation and discussion than formerly; and the opinion that it is not now what it ought to be, has become very general. The suggestions which have been promulgated, and the controversies which have been excited, on detached points rather than on the foundations of the subject, have put in evidence the existence of two conflicting theories, respecting the social position desirable for manual labourers. The one may be called the theory of dependence and protection, the other that of self-dependence.


According to the former theory, the lot of the poor, in all things which affect them collectively, should be regulated for them, not by them. They should not be required or encouraged to think for themselves, or give to their own reflection or forecast an influential voice in the determination of their destiny. It is supposed to be the duty of the higher classes to think for them, and to take the responsibility of their lot, as the commander and officers of an army take that of the soldiers composing it. This function, it is contended, the higher classes should prepare themselves to perform conscientiously, and their whole demeanour should impress the poor with a reliance on it, in order that, while yielding passive and active obedience to the rules prescribed for them, they may resign themselves in all other respects to a trustful insouciance, and repose under the shadow of their protectors. The relation between rich and poor, according to this theory (a theory also applied to the relation between men and women)*28 should be only partly authoritative; it should be amiable, moral, and sentimental: affectionate tutelage on the one side, respectful and grateful deference on the other. The rich should be in loco parentis to the poor, guiding and restraining them like children. Of spontaneous action on their part there should be no need. They should be called on for nothing but to do their day's work, and to be moral and religious. Their morality and religion should be provided for them by their superiors, who should see them properly taught it, and should do all that is necessary to ensure their being, in return for labour and attachment, properly fed, clothed, housed, spiritually edified, and innocently amused.


This is the ideal of the future, in the minds of those whose dissatisfaction with the Present assumes the form of affection and regret towards the Past.*29 Like other ideals, it exercises an unconscious influence on the opinions and sentiments of numbers who never consciously guide themselves by any ideal. It has also this in common with other ideals, that it has never been historically realised. It makes its appeal to our imaginative sympathies in the character of a restoration of the good times of our forefathers. But no times can be pointed out in which the higher classes of this or any other country performed a part even distantly resembling the one assigned to them in this theory. It is an idealization, grounded on the conduct and character of here and there an individual. All privileged and powerful classes, as such, have used their power in the interest of their own selfishness, and have indulged their self-importance in despising, and not in lovingly caring for, those who were, in their estimation, degraded, by being under the necessity of working for their benefit. I do not affirm that what has always been must always be, or that human improvement has no tendency to correct the intensely selfish fillings engendered by power; but though the evil may be lessened, it cannot be eradicated, until the power itself is withdrawn. This, at least, seems to me undeniable, that long before the superior classes could be sufficiently improved to govern in the tutelary manner supposed, the inferior classes would be too much improved to be so governed.


I am quite sensible of all that is seductive in the picture of society which this theory presents. Though the facts of it have no prototype in the past, the feelings have. In them lies all that there is of reality in the conception. As the idea is essentially repulsive of a society only held together by the relations and feelings arising out of pecuniary interests, so there is something naturally attractive in a form of society abounding in strong personal attachments and disinterested self-devotion. Of such feelings it must be admitted that the relation of protector and protected has hitherto been the richest source. The strongest attachments of human beings in general, are towards the things or the persons that stand between them and some dreaded evil. Hence, in an age of lawless violence and insecurity, and general hardness and roughness of manners, in which life is beset with dangers and sufferings at every step, to those who have neither a commanding position of their own, nor a claim on the protection of some one who has—a generous giving of protection, and a grateful receiving of it, are the strongest ties which connect human beings; the feelings arising from that relation are their warmest feelings; all the enthusiasm and tenderness of the most sensitive natures gather round it; loyalty on the one part and chivalry on the other are principles exalted into passions. I do not desire to depreciate these qualities.*30 The error lies in not perceiving, that these virtues and sentiments, like the clanship and the hospitality of the wandering Arab, belong emphatically to a rude and imperfect state of the social union; and that the feelings between protector and protected, whether between kings and subjects, rich and poor, or men and women,*31 can no longer have this beautiful and endearing character where there are no longer any serious dangers from which to protect. What is there in the present state of society to make it natural that human beings, of ordinary strength and courage, should glow with the warmest gratitude and devotion in return for protection? The laws protect them, wherever the laws do not criminally fail in their duty.*32 To be under the power of some one, instead of being as formerly the sole condition of safety, is now, speaking generally, the only situation which exposes to grievous wrong. The so-called protectors are now the only persons against whom, in any ordinary circumstances, protection is needed. The brutality and tyranny with which every police report is filled, are those of husbands to wives, of parents to children. That the law does not prevent these atrocities, that it is only now making a first timid attempt to repress and punish them, is no matter of necessity, but the deep disgrace of those by whom the laws are made and administered. No man or woman who either possesses or is able to earn an independent livelihood, requires any other protection than that which the law could and ought to give. This being the case, it argues great ignorance of human nature to continue taking for granted that relations founded on protection must always subsist, and not to see that the assumption of the part of protector, and of the power which belongs to it, without any of the necessities which justify it, must engender feelings opposite to loyalty.


Of the working men, at least in the more advanced countries of Europe, it may be pronounced certain, that the patriarchal or paternal system of government is one to which they will not again be subject. That question was decided, when they were taught to read, and allowed access to newspapers and political tracts; when dissenting preachers were suffered to go among them, and appeal to their faculties and feelings in opposition to the creeds professed and countenanced by their superiors; when they were brought together in numbers, to work socially under the same roof; when railways enabled them to shift from place to place, and change their patrons and employers as easily as their coats; when they were encouraged to seek a share in the government, by means of the electoral franchise.*33 The working classes have taken their interests into their own hands, and are perpetually showing that they think the interests of their employers not identical with their own, but opposite to them. Some among the higher classes flatter themselves that these tendencies may be counteracted by moral and religious education: but they have let the time go by for giving an education which can serve their purpose. The principles of the Reformation have reached as low down in society as reading and writing, and the poor will not much longer accept morals and religion of other people's prescribing. I speak more particularly of this country, especially the town population, and the districts of the most scientific agriculture or the highest wages, Scotland and the north of England. Among the more inert and less modernized agricultural population of the southern counties, it might be possible for the gentry to retain, for some time longer, something of the ancient deference and submission of the poor, by bribing them with high wages and constant employment; by insuring them support, and never requiring them to do anything which they do not like. But these are two conditions which never have been combined, and never can be, for long together. A guarantee of subsistence can only be practically kept up, when work is enforced and superfluous multiplication restrained by at least a moral compulsion. It is then, that the would-be revivers of old times which they do not understand, would feel practically in how hopeless a task they were engaged. The whole fabric of patriarchal or seignorial influence, attempted to be raised on the foundation of caressing the poor, would be shattered against the necessity of enforcing a stringent Poor-law.


§2. It is on a far other basis that the well-being and well-doing of the labouring people must henceforth rest. The poor have come out of leading-strings, and cannot any longer be governed or treated like children. To their own qualities must now be commended the care of their destiny. Modern nations will have to learn the lesson, that the well-being of a people must exist by means of the justice and self-government, the Greek dikaiosion and Greek sophrosion of the individual citizens. The theory of dependence attempts to dispense with the necessity of these qualities in the dependent classes. But now, when even in position they are becoming less and less dependent, and their minds less and less acquiescent in the degree of dependence which remains, the virtues of independence are those which they stand in need of. Whatever advice, exhortation or guidance is held out to the labouring classes, must henceforth be tendered to them as equals, and accepted by them with their eyes open. The prospect of the future depends on the degree in which they can be made rational beings.


There is no reason to believe that prospect other than hopeful. The progress indeed has hitherto been, and still is, slow. But there is a spontaneous education going on in the minds of the multitude, which may be greatly accelerated and improved by artificial aids. The instruction obtained from newspapers and political tracts may not be the most solid kind of instruction, but it is an immense improvement upon none at all. *34What it does for a people has been admirably exemplified during the cotton crisis, in the case of the Lancashire spinners and weavers, who have acted with the consistent good sense and forbearance so justly applauded, simply because, being readers of newspapers, they understood the causes of the calamity which had befallen them, and knew that it was in no way imputable either to their employers or to the Government. It is not certain that their conduct would have been as rational and exemplary, if the distress had preceded the salutary measure of fiscal emancipation which gave existence to the penny press. The institutions for lectures and discussion, the collective deliberations on questions of common interest, the trade unions, the political agitation, all serve to awaken public spirit, to diffuse variety of ideas among the mass, and to excite thought and reflection in the more intelligent. Although the too early attainment of political franchises by the least educated class might retard, instead of promoting, their improvement, there can be little doubt that it has been greatly stipulated by the attempt to acquire them.*35 In the meantime, the working classes are now part of the public; in all discussions on matters of general interest they, or a portion of them, are now partakers; all who use the press as an instrument may, if it so happens, have them for an audience; the avenues of instruction through which the middle classes acquire such ideas as they have, are accessible to, at least, the operatives in the towns. With these resources, it cannot be doubted that they will increase in intelligence, even by their own unaided efforts; while there is reason to hope that great improvements both in the quality and quantity of school education will be effected by the exertions either of government or of individuals, and that the progress of the mass of the people in mental cultivation, and in the virtues which are dependent on it, will take place more rapidly, and with fewer intermittences and aberrations, than if left to itself.


From this increase of intelligence, several effects may be confidently anticipated. First: that they will become even less willing than at present to be led and governed, and directed into the way they should go, by the mere authority and prestige of superiors. If they have not now, still less will they have hereafter, any deferential awe, or religious principle of obedience, holding them in mental subjection to a class above them. The theory of dependence and protection will be more and more intolerable to them, and they will require that their conduct and condition shall be essentially self-governed. It is, at the same time, quite possible that they may demand, in many cases, the intervention of the legislature in their affairs, and the regulation by law of various things which concern them, often under very mistaken ideas of their interest. Still, it is their own will, their own ideas and suggestions, to which they will demand that effect should be given, and not rules laid down for them by other people. It is quite consistent with this, that they should feel respect for superiority of intellect and knowledge, and defer much to the opinions, on any subject, of those whom they think well acquainted with it. Such deference is deeply grounded in human nature; but they will judge for themselves of the persons who are and are not entitled to it.


§3. It appears to me impossible but that the increase of intelligence, of education, and of the love of independence among the working classes, must be attended with a corresponding growth of the good sense which manifests itself in provident habits of conduct, and that population, therefore, will bear a gradually diminishing ratio to capital and employment. This most desirable result would be much accelerated by another change, which lies in the direct line of the best tendencies of the time; the opening of industrial occupations freely to both sexes. The same reasons which make it no longer necessary that the poor should depend on the rich, make it equally unnecessary that women should depend on men; and the least which justice requires is that law and custom should not enforce dependence (when the correlative protection has become superfluous) by ordaining that a woman, who does not happen to have a provision by inheritance, shall have scarcely any means open to her of gaining a livelihood, except as a wife and mother. Let women who prefer that occupation, adopt it; but that there should be no option, no other carrière possible for the great majority of women, except in the humbler departments of life, is a flagrant social injustice.*36 The ideas and institutions by which the accident of sex is made the groundwork of an inequality of legal rights, and a forced dissimilarity of social functions, must ere long be recognised as the greatest hindrance to moral, social, and even intellectual improvement. On the present occasion I shall only indicate, among the probable consequences of the industrial and social independence of women, a great diminution of the evil of over-population. It is by devoting one-half of the human species to that exclusive function, by making it fill the entire life of one sex, and interweave itself with almost all the objects of the other, that the animal instinct in question is nursed into the disproportionate preponderance which it has hitherto exercised in human life.


§4. The political consequences of the increasing power and importance of the operative classes, and of the growing ascendancy of numbers, which, even in England and under the present institutions, is rapidly giving to the will of the majority at least a negative voice in the acts of government, are too wide a subject to be discussed in this place. But, confining ourselves to economical considerations, and notwithstanding the effect which improved intelligence in the working classes, together with just laws, may have in altering the distribution of the produce to their advantage, I cannot think that they will be permanently contented with the condition of labouring for wages as their ultimate state.*37 They may be willing to pass through the class of servants in their way to that of employers; but not to remain in it all their lives. To begin as hired labourers, then after a few years to work on their own account, and finally employ others, is the normal condition of labourers in a new country, rapidly increasing in wealth and population, like America or Australia. *38But in an old and fully peopled country, those who begin life as labourers for hire, as a general rule, continue such to the end, unless they sink into the still lower grade of recipients of public charity. In the present stage of human progress, when ideas of equality are daily spreading more widely among the poorer classes, and can no longer be checked by anything short of the entire suppression of printed discussion and even of freedom of speech, it is not to be expected that the division of the human race into two hereditary classes, employers and employed, can be permanently maintained. The relation is nearly as unsatisfactory to the payer of wages as to the receiver. If the rich regard the poor as, by a kind of natural law, their servants and dependents, the rich in their turn are regarded as a mere prey and pasture for the poor; the subject of demands and expectations wholly indefinite, increasing in extent with every concession made to them. *39The total absence of regard for justice or fairness in the relations between the two, is as marked on the side of the employed as on that of the employers. We look in vain among the working classes in general for the just pride which will choose to give good work for good wages; for the most part, their sole endeavour is to receive as much, and return as little in the shape of service, as possible. It will sooner or later become insupportable to the employing classes, to live in close and hourly contact with persons whose interests and feelings are in hostility to them. Capitalists are almost as much interested as labourers in placing the operations of industry on such a footing, that those who labour for them may feel the same interest in the work, which is felt by those who labour on their own account.


The opinion expressed in a former part of this treatise respect. ing small landed properties and peasant proprietors, may have made the reader anticipate that a wide diffusion of property in land is the resource on which I rely for exempting at least the agricultural labourers from exclusive dependence on labour for hire. Such, however, is not my opinion. I indeed deem that form of agricultural economy to be most groundlessly cried down, and to be greatly preferable, in its aggregate effects on human happiness, to hired labour in any form in which it exists at present; because the prudential check to population acts more directly, and is shown by experience to be more efficacious; and because, in point of security, of independence, of exercise of any other than the animal faculties, the state of a peasant proprietor is far superior to that of an agricultural labourer in this or any other old country. Where the former system already exists, and works on the whole satisfactorily, I should regret, in the present state of human intelligence, to see it abolished in order to make way for the other, under a pedantic notion of agricultural improvement as a thing necessarily the same in every diversity of circumstances. In a backward state of industrial improvement, as in Ireland, I should urge its introduction, in preference to an exclusive system of hired labour; as a more powerful instrument for raising a population from semi-savage listlessness and recklessness, to persevering industry and prudent calculation.


But a people who have once adopted the large system of production, either in manufactures or in agriculture, are not likely to recede from it; and when population is kept in due proportion to the means of support, it is not desirable that they should. Labour is unquestionably more productive on the system of large industrial enterprises; the produce, if not greater absolutely, is greater in proportion to the labour employed: the same number of persons can be supported equally well with less toil and greater leisure; which will be wholly an advantage, as soon as civilization and improvement have so far advanced, that what is a benefit to the whole shall be a benefit to each individual composing it.*40 And in the moral aspect of the question, which is still more important than the economical, something better should be aimed at as the goal of industrial improvement, than to disperse mankind over the earth in single families, each ruled internally, as families now are, by a patriarchal despot, and having scarcely any community of interest, or necessary mental communion, with other human beings. The domination of the head of the family over the other members, in this state of things, is absolute; while the effect on his own mind tends towards concentration of all interests in the family, considered as an expansion of self, and absorption of all passions in that of exclusive possession, of all cares in those of preservation and acquisition. As a step out of the merely animal state into the human, out of reckless abandonment to brute instincts into prudential foresight and self-government, this moral condition may be seen without displeasure. But if public spirit, generous sentiments, or true justice and equality are desired, association, not isolation, of interests, is the school in which these excellences are nurtured. The aim of improvement should be not solely to place human beings in a condition in which they will be able to do without one another, but to enable them to work with or for one another in relations not involving dependence. Hitherto there has been no alternative for those who lived by their labour, but that of labouring either each for himself alone, or for a master. But the civilizing and improving influences of association, and the efficiency and economy of production on a large scale, may be obtained without dividing the producers into two parties with hostile interests and feelings, the many who do the work being mere servants under the command of the one who supplies the funds, and having no interest of their own in the enterprise except to earn their wages with as little labour as possible. The speculations and discussions of the last fifty years, and the events of the last thirty,*41 are abundantly conclusive on this point. If the improvement which even triumphant military despotism has only retarded, not stopped, shall continue its course,*42 there can be little doubt that the status of hired labourers will gradually tend to confine itself to the description of workpeople whose low moral qualities render them unfit for anything more independent: and that the relation of masters and work-people will be gradually superseded by partnership, in one of two forms: in some cases, association of the labourers with the capitalist; in others, and perhaps finally in all,*43 association of labourers among themselves.


§*445. The first of these forms of association has long been practised, not indeed as a rule, but as an exception. In several departments of industry there are already cases in which every one who contributes to the work, either by labour or by pecuniary resources, has a partner's interest in it, proportional to the value of his contribution. It is already a common practice to remunerate those in whom peculiar trust is reposed, by means of a percentage on the profits: and cases exist in which the principle is, with excellent success, carried down to the class of mere manual labourers. In the American ships trading to China, it has long been the custom for every sailor to have an interest in the profits of the voyage; and to this has been ascribed the general good conduct of those seamen, and the extreme rarity of any collision between them and the government or people of the country. An instance in England, not so well known as it deserves to be, is that of the Cornish miners. "In Cornwall the mines are worked strictly on the system of joint adventure; gangs of miners contracting with the agent, who represents the owner of the mine, to execute a certain portion of a vein and fit the ore for market, at the price of so much in the pound of the sum for which the ore is sold. These contracts are put up at certain regular periods, generally every two months, and taken by a voluntary partnership of men accustomed to the mine. This system has its disadvantages, in consequence of the uncertainty and irregularity of the earnings, and consequent necessity of living for long periods on credit; but it has advantages which more than counterbalance these drawbacks. It produces a degree of intelligence, independence, and moral elevation, which raise the condition and character of the Cornish miner far above that of the generality of the labouring class. We are told by Dr. Barham, that 'they are not only, as a class, intelligent for labourers, but men of considerable knowledge.' Also, that 'they have a character of independence, something American, the system by which the contracts are let giving the takers entire freedom to make arrangements among themselves; so that each man feels, as a partner in his little firm, that he meets his employers on nearly equal terms.'... With this basis of intelligence and independence in their character, we are not surprised when we hear that 'a very great number of miners are now located on possessions of their own, leased for three lives or ninety-nine years, on which they have built houses;' or that "281,541l. are deposited in saving banks in Cornwall, of which two-thirds are estimated to belong to miners.' "*45


Mr. Babbage, who also gives an account of this system, observes that the payment to the crews of whaling ships is governed by a similar principle; and that "the profits arising from fishing with nets on the south coast of England are thus divided: one-half the produce belongs to the owner of the boat and net; the other half is divided in equal portions between the persons using it, who are also bound to assist in repairing the net when required." Mr. Babbage has the great merit of having pointed out the practicability, and the advantage, of extending the principle to manufacturing industry generally.*46 *47


*48Some attention has been excited by an experiment of this nature, commenced above thirty years ago by a Paris tradesman, a house-painter, M. Leclaire,*49 and described by him in a pamphlet published in the year 1842. M. Leclaire, according to his statement, employs on an average two hundred workmen, whom he pays in the usual manner, by fixed wages or salaries. He assigns to himself, besides interest for his capital, a fixed allowance for his labour and responsibility as manager. At the end of the year, the surplus profits are divided among the body, himself included, in the proportion of their salaries.*50 The reasons by which M. Leclaire was led to adopt this system are highly instructive. Finding the conduct of his workmen unsatisfactory, he first tried the effect of giving higher wages, and by this he managed to obtain a body of excellent workmen, who would not quit his service for any other. "Having thus succeeded" (I quote from an abstract of the pamphlet in Chambers' Journal,*51) "in producing some sort of stability in the arrangement of his establishment, M. Leclaire expected, he says, to enjoy greater peace of mind. In this, however, he was disappointed. So long as he was able to superintend everything himself, from the general concerns of his business down to its minutest details, he did enjoy a certain satisfaction; but from the moment that, owing to the increase of his business, he found that he could be nothing more than the centre from which orders were issued, and to which reports were brought in, his former anxiety and discomfort returned upon him." He speaks lightly of the other sources of anxiety to which a tradesman is subject, but describes as an incessant cause of vexation the losses arising from the misconduct of workmen. An employer "will find workmen whose indifference to his interests is such that they do not perform two-thirds of the amount of work which they are capable of; hence the continual fretting of masters, who, seeing their interests neglected, believe themselves entitled to suppose that workmen are constantly conspiring to ruin those from whom they derive their livelihood. If the journeyman were sure of constant employment, his position would in some respects be more enviable than that of the master, because he is assured of a certain amount of day's wages, which he will get whether he works much or little. He runs no risk, and has no other motive to stimulate him to do his best than his own sense of duty. The master, on the other hand, depends greatly on chance for his returns: his position is one of continual irritation and anxiety. This would no longer be the case to the same extent, if the interests of the master and those of the workmen were bound up with each other, connected by some bond of mutual security, such as that which would be obtained by the plan of a yearly division of profits."


Even in the first year during which M. Leclaire's experiment was in complete operation, the success was remarkable. Not one of his journeymen who worked as many as three hundred days, earned in that year less than 1500 francs, and some considerably more. His highest rate of daily wages being four francs, or 1200 francs for 300 days, the remaining 300 francs, or 12l., must have been the smallest amount which any journeyman, who worked that number of days, obtained as his proportion of the surplus profit. M. Leclaire describes in strong terms the improvement which was already manifest in the habits and demeanour of his workmen, not merely when at work, and in their relations with their employer, but at other times and in other relations, showing increased respect both for others and for themselves. *52M. Chevalier, in a work published in 1848,*53 stated on M. Leclaire's authority, that the increased zeal of the workpeople continued to be a full compensation to him, even in a pecuniary sense, for the share of profit which he renounced in their favour. *54And M. Villiaumé, in 1857,*55 observes:—"Though he has always kept himself free from the frauds which are but too frequent in his profession, he has always been able to hold his ground against competition, and has acquired a handsome competency in spite of the relinquishment of so great a portion of his profits. Assuredly he has been only thus successful because the unusual activity of his workpeople, and the watch which they kept over one another, have compensated him for the sacrifice made in contenting himself with only a share of the gain."*56


The beneficent example set by M. Leclaire has been followed, with brilliant success, by other employers of labour on a large scale at Paris; and I annex, from the work last referred to (one of the ablest of the many able treatises on political economy produced by the present generation of the political economists of France), some signal examples of the economical and moral benefit arising from this admirable arrangement.*57


*58Until the passing of the Limited Liability Act, it was held that an arrangement similar to M. Leclaire's would have been impossible in England, as the workmen could not, in the previous state of the law, have been associated in the profits, without being liable for losses. One of the many benefits of that great legislative improvement has been to render partnerships of this description possible, and we may now expect to see them carried into practice. Messrs Briggs, of the Whitwood and Methley collieries, near Normanton in Yorkshire, have taken the first step. They now work these mines by a company, two-thirds of the capital of which they themselves continue to hold, but undertake, in the allotment of the remaining third, to give the preference to the "officials and operatives employed in the concern;" and, what is of still greater importance, whenever the annual profit exceeds 10 per cent, one-half the excess is divided among the work-people and employés, whether shareholders or not, in proportion to their earnings during the year. It is highly honourable to these important employers of labour to have initiated a system so full of benefit both to the operatives employed and to the general interest of social improvement: and they express no more than a just confidence in the principle when they say, that "the adoption of the mode of appropriation thus recommended would, it is believed, add so great an element of success to the undertaking as to increase rather than diminish the dividend to the shareholders."*59


§*606. The form of association, however, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves. So long as this idea remained in a state of theory, in the writings of Owen or of Louis Blanc, it may have appeared, to the common modes of judgment, incapable of being realised, and not likely to be tried unless by seizing on the existing capital, and confiscating it for the benefit of the labourers; which is even now imagined by many persons, and pretended by more, both in England and on the Continent, to be the meaning and purpose of Socialism. But there is a capacity of exertion and self-denial in the masses of mankind, which is never known but on the rare occasions on which it is appealed to in the name of some great idea or elevated sentiment. Such an appeal was made by the French Revolution of 1848. For the first time it then seemed to the intelligent and generous of the working classes of a great nation, that they had obtained a government who sincerely desired the freedom and dignity of the many, and who did not look upon it as their natural and legitimate state to be instruments of production, worked for the benefit of the possessors of capital. Under this encouragement, the ideas sown by Socialist writers, of an emancipation of labour to be effected by means of association, throve and fructified; and many working people came to the resolution, not only that they would work for one another, instead of working for a master tradesman or manufacturer, but that they would also free themselves, at whatever cost of labour or privation, from the necessity of paying, out of the produce of their industry, a heavy tribute for the use of capital; that they would extinguish this tax, not by robbing the capitalists of what they or their predecessors had acquired by labour and preserved by economy, but by honestly acquiring capital for themselves. If only a few operatives had attempted this arduous task, or if, while many attempted it, a few only had succeeded, their success might have been deemed to furnish no argument for their system as a permanent mode of industrial organization. But, excluding all the instances of failure, there exist, or existed a short time ago,*61 upwards of a hundred successful, and many eminently prosperous, associations of operatives in Paris alone, besides a considerable number in the departments. An instructive sketch of their history and principles has been published, under the title of L'Association Ouvrière Industrielle et Agricole, by H. Feugueray: and as it is frequently affirmed in English newspapers that the associations at Paris have failed, by writers who appear to mistake the predictions of their enemies at their first formation for the testimonies of subsequent experience, I think it important to show by quotations from M. Feugueray's volume, strengthened by still later testimonies,*62 that these representations are not only wide of the truth, but the extreme contrary of it.


The capital of most of the associations was originally confined to the few tools belonging to the founders, and the small sums which could be collected from their savings, or which were lent to them by other workpeople as poor as themselves. In some cases, however, loans of capital were made to them by the republican government: but the associations which obtained these advances, or at least which obtained them before they had already achieved success, are, it appears, in general by no means the most prosperous. The most striking instances of prosperity are in the case of those who have had nothing to rely on but their own slender means and the small loans of fellow-workmen, and who lived on bread and water while they devoted the whole surplus of their gains to the formation of a capital.


"Often," says M. Feugueray,*63 "there was no money at all in hand, and no wages could be paid. The goods did not go off, the payments did not come in, bills could not get discounted, the warehouse of materials was empty; they had to submit to privation, to reduce all expenses to the minimum, to live sometimes on bread and water.... It is at the price of these hardships and anxieties that men who began with hardly any resource but their good will and their hands, succeeded in creating customers, in acquiring credit, forming at last a joint capital, and thus founding associations whose futurity now seems to be assured."


I will quote at length the remarkable history of one of these associations.*64


"The necessity of a large capital for the establishment of a pianoforte manufactory was so fully recognised in the trade, that in 1848 the delegates of several hundred workmen who had combined to form a great association, solicited from the government a subvention of 300,000 francs [12,000l.], being a tenth part of the whole sum voted by the National Assembly. I remember that, as one of the Commission charged with the distribution of the fund, I tried in vain for two hours to convince the two delegates with whom the Commission conferred, that their request was exorbitant. They answered imperturbably, that their trade was a peculiar one; that the association could only have a chance of success on a very large scale and with a considerable capital; that 300,000 francs were the smallest sum which could sufffice them, and that they could not reduce the demand by a single sou. The Commission refused.


"Now, after this refusal, the project of a great association being abandoned, what happened was this. Fourteen workmen, and it is singular that among them was one of the two delegates, resolved to set up by themselves a pianoforte-making association. The project was hazardous on the part of men who had neither money nor credit: but faith does not reason—it acts.


"Our fourteen men therefore went to work, and I borrow from an excellent article by M. Cochut in the National, the accuracy of which I can attest, the following account of their first proceedings.


"Some of them, who had worked on their own account, brought with them in tools and materials the value of about 2000 francs [80l.]. There was needed besides a circulating capital. Each member, not without difficulty, managed to subscribe 10 francs [8s.]. A certain number of workmen not interested in the society gave their adhesion by bringing small contributions. On March 10, 1849, a sum of 229½ francs [9l. 3s.d.] having been realized, the association was declared constituted.


"This sum was not even sufficient for setting up, and for the small expenses required from day to day for the service of a workshop. There being nothing left for wages, nearly two months elapsed without their touching a farthing. How did they subsist during this interval? As workmen live when out of employment, by sharing the portion of a comrade who is in work; by selling or pawning bit by bit the few articles they possess.


"They had executed some orders. They received the payment on the 4th of May. That day was for them like a victory at the opening of a campaign, and they determined to celebrate it. After paying all debts that had fallen due, the dividend of each member amounted to 6 francs 61 centimes. They agreed to allow to each 5 francs [4s.] on account of his wages, and to devote the surplus to a fraternal repast. The fourteen shareholders, most of whom had not tasted wine for a year past, met, along with their wives and children. They expended 32 sous [1s. 4d.] per family. This day is still spoken of in their workshops with an emotion which it is difficult not to share.


"For a month longer it was necessary to content themselves with the receipt of five franca per week. In the course of June a baker, either from love of music or on speculation, offered to buy a piano, paying for it in bread. The bargain was made at the price of 480 francs. It was a piece of good luck to the association. They had now at least what was indispensable. They determined not to reckon the bread in the account of wages. Each ate according to his appetite, or rather to that of his family; for the married shareholders were allowed to take away bread freely for their wives and children.


"Meanwhile the association, being composed of excellent workmen, gradually surmounted the obstacles and privations which had embarrassed its starting. Its account-books offer the best proof of the progress which its pianos had made in the estimation of buyers. From August 1849 the weekly contingent rises to 10, 15, and 20 francs per week; and this last sum does not represent all their profits, each partner having left in the common stock much more than he received from it. Indeed it is not by the sum which the member receives weekly that his situation can be judged, but by the share acquired in the ownership of a property already considerable. The following was the position of the association when it took stock on the 30th December 1850.


"At this period the number of shareholders was thirty-two. Large workshops and warehouses, rented for 2000 francs, were no longer sufficient for the business.

Frs. Cents.
Independent of tools, valued at 5,922 60
They possessed in goods and especially in materials, the value of 22,972 28
They had in cash 1,021 10
    "     in bills 3,540
There was due to them*65 5,861 90

They had thus to their credit 39,317 88
Against this are only to be debited 4737 francs
86 centimes due to creditors, and 1650 francs to eighty adherents;*66 in all
6,387 86

  Remaining 32,930 02
[£1319 4s.]

which formed their indivisible capital and the reserve of the individual members. At this period the association had 76 pianos under construction, and received more orders than they could execute."


From a later report we learn that this society subsequently divided itself into two separate associations, one of which, in 1854, already possessed a circulating capital of 56,000 francs*67 [2240l.]. In 1863 its total capital was 6520l.


The same admirable qualities by which the associations were carried through their early struggles, maintained them in their increasing prosperity. Their rules of discipline, instead of being more lax, are stricter than those of ordinary workshops; but being rules self-imposed, for the manifest good of the community, and not for the convenience of an employer regarded as having an opposite interest, they are far more scrupulously obeyed, and the voluntary obedience carries with it a sense of personal worth and dignity. With wonderful rapidity the associated workpeople have learnt to correct those of the ideas they set out with which are in opposition to the teaching of reason and experience. Almost all the associations, at first, excluded piece-work, and gave equal wages whether the work done was more or less. Almost all have abandoned this system, and after allowing to every one a fixed minimum, sufficient for subsistence, they apportion all further remuneration according to the work done: most of them even dividing the profits at the end of the year, in the same proportion as the earnings.*68


It is the declared principle of most of these associations that they do not exist for the mere private benefit of the individual members, but for the promotion of the co-operative cause. With every extension, therefore, of their business, they take in additional members, not (when they remain faithful to their original plan) to receive wages from them as hired labourers, but to enter at once into the full benefits of the association, without being required to bring anything in, except their labour: the only condition imposed is that of receiving during a few years a smaller share in the annual division of profits, as some equivalent for the sacrifices of the founders. When members quit the association, which they are always at liberty to do, they carry none of the capital with them: it remains an indivisible property, of which the members for the time being have the use, but not the arbitrary disposal: by the stipulations of most of the contracts, even if the association breaks up, the capital cannot be divided, but must be devoted entire to some work of beneficence or of public utility. A fixed, and generally a considerable, proportion of the annual profits, is not shared among the members, but added to the capital of the association, or devoted to the repayment of advances previously made to it: another portion is set aside to provide for the sick and disabled, and another to form a fund for extending the practice of association, or aiding other associations in their need. The managers are paid, like other members, for the time which is occupied in management, usually at the rate of the highest paid labour: but the rule is adhered to, that the exercise of power shall never be an occasion of profit.


Of the ability of the associations to compete successfully with individual capitalists, even at an early period of their existence, M. Feugueray said, "The associations which have been founded in the last two years" (M. Feugueray wrote in 1851) "had many obstacles to overcome; the majority of them were almost entirely without capital: all were treading in a path previously unexplored; they ran the risks which always threaten innovators and beginners. Nevertheless, in many of the trades in which they have been established, they are already formidable competitors of the old houses, and are even complained of on that account by a part of the bourgeoisie. This is not only true of the cooks, the lemonade sellers, and hair-dressers, trades the nature of which enables the associations to rely on democratic custom, but also in other trades where they have not the same advantages. One has only to consult the makers of chairs, of arm-chairs, of files, and one will learn from them if the most important establishments in their respective trades are not those of the associated workmen."


*69The vitality of these associations must indeed be great, to have enabled about twenty of them to survive not only the anti-socialist reaction, which for the time discredited all attempts to enable workpeople to be their own employers—not only the tracasseries of the police, and the hostile policy of the government since the usurpation—but in addition to these obstacles, all the difficulties arising from the trying condition of financial and commercial affairs from 1854 to 1858. Of the prosperity attained by some of them even while passing through this difficult period, I have given examples which must be conclusive to all minds as to the brilliant future reserved for the principle of co-operation.*70


*71It is not in France alone that these associations have commenced a career of prosperity. To say nothing at present of Germany, Piedmont, and Switzerland (where the Konsum-Verein of Zürich is one of the most prosperous co-operative associations in Europe), England can produce cases of success rivalling even those which I have cited from France. Under the impulse commenced by Mr. Owen, and more recently propagated by the writings and personal efforts of a band of friends, chiefly clergymen and barristers, to whose noble exertions too much praise can scarcely be given, the good seed was widely sown; the necessary alterations in the English law of partnership were obtained from Parliament, on the benevolent and public-spirited initiative of Mr. Slaney; many industrial associations, and a still greater number of co-operative stores for retail purchases, were founded. Among these are already many instances of remarkable prosperity, the most signal of which are the Leeds Flour Mill, and the Rochdale Society of Equitable Pioneers. Of this last association, the most successful of all, the history has been written in a very interesting manner by Mr. Holyoake;*72 and the notoriety which by this and other means has been given to facts so encouraging, is causing a rapid extension of associations with similar objects in Lancashire, Yorkshire, London, and elsewhere.


The original capital of the Rochdale Society consisted of 28l.; brought together by the unassisted economy of about forty labourers, through the slow process of a subscription of twopence (afterwards raised to threepence) per week. With this sum they established in 1844 a small shop, or store, for the supply of a few common articles for the consumption of their own families. As their carefulness and honesty brought them an increase of customers and of subscribers, they extended their operations to a greater number of articles of consumption, and in a few years were able to make a large investment in shares of a Co-operative Corn Mill. Mr. Holyoake thus relates the stages of their progress up to 1857:—


"The Equitable Pioneers' Society is divided into seven departments : Grocery, Drapery, Butchering, Shoemaking, Clogging, Tailoring, Wholesale.


"A separate account is kept of each business, and a general account is given each quarter, showing the position of the whole.


"The grocery business was commenced, as we have related, in December 1844, with only four articles to sell. It now includes whatever a grocer's shop should include.


"The drapery business was started in 1847, with an humble array of attractions. In 1854 it was erected into a separate department.


"A year earlier, 1846, the Store began to sell butcher's meat, buying eighty or one hundred pounds of a tradesman in the town. After a while the sales were discontinued until 1850, when the Society had a warehouse of its own. Mr. John Moorhouse, who has now two assistants, buys and kills for the Society three oxen, eight sheep, sundry porkers and calves, which are on the average converted into 130l. of cash per week.


"Shoemaking commenced in 1852. Three men and an apprentice make, and a stock is kept on sale.


"Clogging and tailoring commenced also in this year.


"The wholesale department commenced in 1852, and marls an important development of the Pioneers' proceedings. This department has been created for supplying any members requiring large quantities, and with a view to supply the co-operative stores of Lancashire and Yorkshire, whose small capitals do not enable them to buy in the best markets, nor command the services of what is otherwise indispensable to every store—a good buyer, who knows the markets and his business, who knows what, how, and where to buy. The wholesale department guarantees purity, quality, fair prices, standard weight and measure, but all on the never-failing principle, cash payment."


In consequence of the number of members who now reside at a distance, and the difficulty of serving the great increase of customers, "Branch Stores have been opened. In 1856 the first Branch was opened in the Oldham Road; about a mile from the centre of Rochdale. In 1857 the Castleton Branch, and another in the Whitworth Road, were established, and a fourth Branch in Pinfold."


The warehouse, of which their original Store was a single apartment, was taken on lease by the Society, very much out of repair, in 1849. "Every part has undergone neat refitting and modest decoration, and now wears the air of a thoroughly respectable place of business. One room is now handsomely fitted up as a news room. Another is neatly fitted up as a library.... Their news room is as well supplied as that of a London club." It is now "free to members, and supported from the Education Fund," a fund consisting of 2½ per cent of all the profits divided, which is set apart for educational purposes. "The Library contains 2200 volumes of the best, and among them, many of the most expensive books published. The Library is free. From 1850 to 1855, a school for young persons was conducted at a charge of twopence per month. Since 1855, a room has been granted by the Board for the use of from twenty to thirty persons, from the ages of fourteen to forty, for mutual instruction on Sundays and Tuesdays....


"The corn-mill was of course rented, and stood at Small Bridge, some distance from the town—one mile and a half. The Society have since built in the town an entirely new mill for themselves. The engine and the machinery are of the moat substantial and improved kind. The capital invested in the corn-mill is 8450l., of which 3731l. 15s. 2d. is subscribed by the Equitable Pioneers' Society. The corn-mill employs eleven men."


At a later period they extended their operations to the staple manufacture itself. From the success of the Pioneers' Society grew not only the co-operative corn-mill, but a co-operative association for cotton and woollen manufacturing. "The capital in this department is 4000l., of which sum 2042l. has been subscribed by the Equitable Pioneers' Society. This Manufacturing Society has ninety-six power-looms at work, and employs twenty-six men, seven women, four boys, and five girls—in all forty-two persons...."


"In 1853 the Store purchased for 745l.; a warehouse (freehold) on the opposite side of the street, where they keep and retail their stores of flour, butcher's meat, potatoes, and kindred articles. Their committee-rooms and offices are fitted up in the same building. They rent other houses adjoining for calico and hosiery and shoe stores. In their wilderness of rooms, the visitor stumbles upon shoemakers and tailors at work under healthy conditions, and in perfect peace of mind as to the result on Saturday night. Their warehouses are everywhere as bountifully stocked as Noah's Ark, and cheerful customers literally crowd Toad Lane at night, swarming like bees to every counter. The industrial districts of England have not such another sight as the Rochdale Co-operative Store on Saturday night."*73 Since the disgraceful failure of the Rochdale Savings Bank in 1849, the Society's Store has become the virtual Savings Bank of the place.


The following Table, completed to 11360 from the Almanack published by the Society, shows the pecuniary result of its operations from the commencement.

Year. No. of members. Amount of Capital. Amount of cash sales in store (annual). Amount of profit (annual).

£ s. d. £ s. d. £ s. d.
1844 28 28 0 0

1845 74 181 12 5 710 6 5 32 17 6
1846 86 252 7 1,146 17 7 80 16
1847 110 286 5 1,924 13 10 72 2 10
1848 140 397 0 0 2,276 6 117 16 10½
1849 390 1,193 19 1 6,611 18 0 561 3 9
1850 600 2,299 10 5 13,179 17 0 889 12 5
1851 630 2,785 0 17,638 4 0 990 19
1852 680 3,471 0 6 16,352 5 0 1,206 15
1853 720 5,848 3 11 22,760 0 0 1,674 18 11½
1854 900 7,172 15 7 33,364 0 0 1,763 11
1855 1400 11,032 12 10½ 44,902 12 0 3,106 8
1856 1600 12,920 13 63,197 10 0 3,921 13
1857 1850 15,142 1 2 79,788 0 0 5,470 6
1858 1950 18,160 5 4 71,689 0 0 6,284 17
1859 2703 27,060 14 2 104,012 0 0 10,739 18
1860*74 3450 37,710 9 0 152,063 0 0 15,906 9 11


I need not enter into similar particulars respecting the Corn-Mill Society, and will merely state that in 1860 its capital is set down, on the same authority, at 26,618l. 14s. 6d., and the profit for that single year at 10,164l. 12s. 5d. For the manufacturing establishment I have no certified information later than that of Mr. Holyoake, who states the capital of the concern, in 1857, to be 5500l. But a letter in the Rochdale Observer of May 26, 1860, editorially announced as by a person of good information, says that the capital had at that time reached 50,000l.: and the same letter gives highly satisfactory statements respecting other similar associations; the Rosendale Industrial Company, capital 40,000l.; the Walsden Co-operative Company, capital 8000l.; the Bacup and Wardle Commercial Company, with a capital of 40,000l.; "of which more than one-third is borrowed at 5 per cent, and this circumstance, be reduced to during the last two years of unexampled commercial prosperity, has caused the rate of dividend to shareholders to rise to an almost fabulous height."


*75It is not necessary to enter into any details respecting the subsequent history of English Co-operation; the less so, as it is now one of the recognised elements in the progressive movement of the age, and, as such, has latterly been the subject of elaborate articles in most of our leading periodicals, one of the most recent and best of which was in the Edinburgh Review for October 1864: and the progress of Co-operation from month to month is regularly chronicled in the Co-operator. I must not, however, omit to mention the last great step in advance in reference to the Co-operative Stores, the formation in the North of England (and another is in course of formation in London) of a Wholesale Society, to dispense with the services of the wholesale merchant as well as of the retail dealer, and extend to the Societies the advantage which each society gives to its own members, by an agency for co-operative purchases, of foreign as well as domestic commodities, direct from the producers.


*76It is hardly possible to take any but a hopeful view of the prospects of mankind, when, in two leading countries of the world, the obscure depths of society contain simple working men whose integrity, good sense, self-command, and honourable confidence in one another, have enabled them to carry these noble experiments to the triumphant issue which the facts recorded in the preceding pages attest.


From the progressive advance of the co-operative movement, a great increase may be looked for even in the aggregate productiveness of industry. The sources of the increase are twofold. In the first place, the class of mere distributors, who are not producers but auxiliaries of production, and whose inordinate numbers, far more than the gains of capitalists, are the cause why so great a portion of the wealth produced does not reach the producers—will be reduced to more modest dimensions. Distributors differ from producers in this, that when producers increase, even though in any given department of industry they may be too numerous, they actually produce more: but the multiplication of distributors does not make more distribution to be done, more wealth to be distributed; it does but divide the same work among a greater number of persons, seldom even cheapening the process. By limiting the distributors to the number really required for making the commodities accessible to the consumers-which is the direct effect of the co-operative system—a vast number of hands will be set free for production, and the capital which feeds and the gains which remunerate them will be applied to feed and remunerate producers. This great economy of the world's resources would be realized even if co-operation stopped at associations for purchase and consumption, without extending to production.


The other mode in which co-operation tends, still more efficaciously, to increase the productiveness of labour, consists in the vast stimulus given to productive energies, by placing the labourers, as a mass, in a relation to their work which would make it their principle and their interest—at present it is neither—to do the utmost, instead of the least possible, in exchange for their remuneration. *77It is scarcely possible to rate too highly this material benefit, which yet is as nothing compared with the moral revolution in society that would accompany it: the healing of the standing feud between capital and labour; the transformation of human life, from a conflict of classes struggling for opposite interests, to a friendly rivalry in the pursuit of a good common to all; the elevation of the dignity of labour; a new sense of security and independence in the labouring class; and the conversion of each human being's daily occupation into a school of the social sympathies and the practical intelligence.


Such is the noble idea which the promoters of Co-operation should have before them. But to attain, in any degree, these objects, it is indispensable that all, and not some only, of those who do the work should be identified in interest with the prosperity of the undertaking. Associations which, when they have been successful, renounce the essential principle of the system, and become joint-stock companies of a limited number of shareholders, who differ from those of other companies only in being working men; associations which employ hired labourers without any interest in the profits (and I grieve to say that the Manufacturing Society even of Rochdale has thus degenerated) are, no doubt, exercising a lawful right in honestly employing the existing system of society to improve their position as individuals, but it is not from them that anything need be expected towards replacing that system by a better. Neither will such societies, in the long run, succeed in keeping their ground against individual competition. Individual management, by the one person principally interested, has great advantages over every description of collective management. Co-operation has but one thing to oppose to those advantages—the common interest of all the workers in the work. When individual capitalists, as they will certainly do, add this to their other points of advantage; when, even if only to increase their gains, they take up the practice which these co-operative societies have dropped, and connect the pecuniary interest of every person in their employment with the most efficient and most economical management of the concern; they are likely to gain an easy victory over societies which retain the defects, while they cannot possess the full advantages, of the old system.


Under the most favourable supposition, it will be desirable, and perhaps for a considerable length of time, that individual capitalists, associating their work-people in the profits, should coexist with even those co-operative societies which are faithful to the co-operative principle. Unity of authority makes many things possible, which could not or would not be undertaken subject to the chance of divided councils or changes in the management. A private capitalist, exempt from the control of a body, if he is a person of capacity, is considerably more likely than almost any association to run judicious risks, and originate costly improvements. Co-operative societies may be depended on for adopting improvements after they have been tested by success, but individuals are more likely to commence things previously untried. Even in ordinary business, the competition of capable persons who in the event of failure are to have all the loss, and in the case of success the greater part of the gain, will be very useful in keeping the managers of co-operative societies up to the due pitch of activity and vigilance.


When, however, co-operative societies shall have sufficiently multiplied, it is not probable that any but the least valuable work-people will any longer consent to work all their lives for wages merely; both private capitalists and associations will gradually find it necessary to make the entire body of labourers participants in profits. Eventually, and in perhaps a less remote future than may be supposed, we may, through the co-operative principle, see our way to *78a change in society, which would combine the freedom and independence of the individual, with the moral, intellectual, and economical advantages of aggregate production; and which, without violence or spoliation, or even any sudden disturbance of existing habits and expectations, would realize, at least in the industrial department, the best aspirations of the democratic spirit, by putting an end to the division of society into the industrious and the idle, and effacing all social distinctions but those fairly earned by personal services and exertions. Associations like those which we have described, by the very process of their success, are a course of education in those moral and active qualities by which alone success can be either deserved or attained. As associations multiplied, they would tend more and more to absorb all work-people, except those who have too little understanding, or too little virtue, to be capable of learning to act on any other system than that of narrow selfishness. As this change proceeded, owners of capital would gradually find it to their advantage, instead of maintaining the struggle of the old system with work-people of only the worst description, to lend their capital to the associations; to do this at a diminishing rate of interest, and at last, perhaps, even to exchange their capital for terminable annuities. In this or some such mode, the existing accumulations of capital might honestly, and by a kind of spontaneous process, become in the end the joint property of all who participate in their productive employment: a transformation which, thus effected, (and assuming of course that both sexes participate equally in the rights and in the government of the association)*79 would be the nearest approach to social justice, and the most beneficial ordering of industrial affairs for the universal good, which it is possible at present to foresee.


§*807. I agree, then with the Socialist writers in their conception of the form which industrial operations tend to assume in the advance of improvement; and I entirely share their opinion that the time is ripe for commencing this transformation, and that it should by all just and effectual means be aided and encouraged. But while I agree and sympathize with Socialists in this practical portion of their aims, I utterly dissent from the most conspicuous and vehement part of their teaching, their declamations against competition. With moral conceptions in many respects far ahead of the existing arrangements of society, they have in general very confused and erroneous notions of its actual working; and one of their greatest errors, as I conceive, is to charge upon competition all the economical evils which at present exist. They forget that wherever competition is not, monopoly is; and that monopoly, in all its forms, is the taxation of the industrious for the support of indolence, if not of plunder. They forget, too, that with the exception of competition among labourers, all other competition is for the benefit of the labourers, by cheapening the articles they consume; that competition even in the labour market is a source not of low but of high wages, wherever the competition for labour exceeds the competition of labour, as in America, in the colonies, and in the skilled trades; and never could be a cause of low wages, save by the overstocking of the labour market through the too great numbers of the labourers' families; while, if the supply of labourers is excessive, not even Socialism can prevent their remuneration from being low. Besides, if association were universal, there would be no competition between labourer and labourer; and that between association and association would be for the benefit of the consumers, that is, of the associations; of the industrious classes generally.


I do not pretend that there are no inconveniences in competition, or that the moral objections urged against it by Socialist writers, as a source of jealousy and hostility among those engaged in the same occupation, are altogether groundless. But if competition has its evils, it prevents greater evils. As M. Feugueray well says,*81 "The deepest root of the evils and iniquities which fill the industrial world, is not competition, but the subjection of labour to capital, and the enormous share which the possessors of the instruments of industry are able to take from the produce.... If competition has great power for evil, it is no less fertile of good, especially in what regards the development of the individual faculties, and the success of innovations." It is the common error of Socialists to overlook the natural indolence of mankind; their tendency to be passive, to be the slaves of habit, to persist indefinitely in a course once chosen. Let them once attain any state of existence which they consider tolerable, and the danger to be apprehended is that they will thenceforth stagnate; will not exert themselves to improve, and by letting their faculties rust, will lose even the energy required to preserve them from deterioration. Competition may not be the best conceivable stimulus, but it is at present a necessary one, and no one can foresee the time when it will not be indispensable to progress. Even confining ourselves to the industrial department, in which, more than in any other, the majority may be supposed to be competent judges of improvements; it would be difficult to induce the general assembly of an association to submit to the trouble and inconvenience of altering their habits by adopting some new and promising invention, unless their knowledge of the existence of rival associations made them apprehend that what they would not consent to do, others would, and that they would be left behind in the race.


Instead of looking upon competition as the baneful and anti-social principle which it is held to be by the generality of Socialists, I conceive that, even in the present state of society and industry, every restriction of it is an evil, and every extension of it, even if for the time injuriously affecting some class of labourers, is always an ultimate good. To be protected against competition is to be protected in idleness, in mental dulness; to be saved the necessity of being as active and as intelligent as other people; and if it is also to be protected against being underbid for employment by a less highly paid class of labourers, this is only where old custom, or local and partial monopoly, has placed some particular class of artisans in a privileged position as compared with the rest; and the time has come when the interest of universal improvement is no longer promoted by prolonging the privileges of a few. If the slop-sellers and others *82of their class have lowered the wages of tailors, and some other artisans, by making them an affair of competition instead of custom, so much the better in the end. What is now required is not to bolster up old customs, whereby limited classes of labouring people obtain partial gains which interest them in keeping up the present organization of society, but to introduce new general practices beneficial to all; and there is reason to rejoice at whatever makes the privileged classes of skilled artisans feel that they have the same interests, and depend for their remuneration on the same general causes, and must resort for the improvement of their condition to the same remedies, as the less fortunately circumstanced and comparatively helpless multitude.*83

Notes for this chapter

[This paragraph replaced in the 3rd ed. (1852) the following paragraph of the original (1848) text:

"The economic condition of that class, and along with it of all society, depends therefore essentially on its moral and intellectual, and that again on its social, condition. In the details of political economy, general views of society and politics are out of place; but in the more comprehensive inquiries it is impossible to exclude them; since the various leading departments of human life do not develop themselves separately, but each depends on all, or is profoundly modified by them. To obtain any light on the great economic question of the future, which gives the chief interest to the phenomena of the present—the physical condition of the labouring classes—we must consider it, not separately, but in conjunction with all other points of their condition."]

[Parenthesis inserted in 3rd ed. (1852).]
[Carlyle's Past and Present appeared in 1843.]
[In the 3rd ed. (1852) "qualities" replaced "virtues," and the next sentence was omitted: "That the most beautiful developments of feeling and character often grow out of the most painful, and in many respects the most hardening and corrupting, circumstances of our condition, is now, and probably will long be, one of the chief stumbling-blocks both in the theory and in the practice of morals and education."]
["Whether... women" inserted in 3rd ed.]
[So since the 3rd ed. The original text ran: "The laws protect them: where laws do not reach, manners and opinion shield them." The reference to police reports and atrocities later in the paragraph was introduced in the 3rd ed., and "the protection of the law" was expanded into the protection which the law "ought to give."]
[The last clause inserted in 3rd ed. (1852).]

Book IV. Chapter VII. Section 2

[This and the following sentence were inserted in the 6th ed. (1865).]
[Here was omitted from the 2nd ed. (1849) the following passage of the 1st (1848): "It is of little importance that some of them may, at a certain stage of their progress, adopt mistaken opinions. Communists are already numerous, and are likely to increase in number; but nothing tends more to the mental development of the working classes than that all the questions which Communism raises should be largely and freely discussed by them; nothing could be more instructive than that some should actually form communities, and try practically what it is to live without the institution of property."]

Book IV. Chapter VII. Section 3

[The original (1848) text ran: "that there should be no other carrière possible... is one of those social injustices which call loudest for remedy. Among the salutary consequences of correcting it, one of the most probable would be a great diminution," &c.

In the 2nd ed. (1849) the following sentence was inserted after "remedy": "The ramifications of this subject are far too numerous and intricate to be pursued here. The social and political equality of the sexes is not a question of economical detail, but one of principle, so intimately connected with all the more vital points of human improvement, that none of them can be thoroughly discussed independently of it. But for this very reason it cannot be disposed of by way of parenthesis, in a treatise devoted to other subjects. It is sufficient for the immediate purpose, to point out, among the probable consequences of the industrial and social independence of women, a great diminution," &c.

This was replaced in the 3rd ed. (1852) by the present text, and a note attached: "It is truly disgraceful that in a woman's reign not one step has been made by law towards removing even the smallest portion of the existing injustice to women. The brutal part of the populace can still maltreat, not to say kill, their wives, with the next thing to impunity; and as to civil and social status, in framing a new reform bill for the extension of the elective franchise, the opportunity was not taken for so small a recognition of something like equality of rights, as would have been made by admitting to the suffrage women of the same class and the same householding and tax-paying qualifications as the men who already possess it."

Further comments were added to the note in the 4th ed. (1857): "Mr. Fitzroy's Act for the Better Protection of Women and Children against Assaults, is a well-meant though inadequate attempt to wipe off the former reproach. The second is more flagrant than ever, another Reform Bill having been since presented, largely extending the franchise among many classes of men, but leaving all women in their existing state of political as well as social servitude."

The whole note disappeared in the 5th ed. (1862).]

Book IV. Chapter VII. Section 4

[At this point was omitted from the 3rd ed. (1852) the following passage of the original (1848) text: "To work at the bidding and for the profit of another, without any interest in the work—the price of their labour being adjusted by hostile competition, one side demanding as much and the other paying as little as possible—is not, even when wages are high, a satisfactory state to human beings of educated intelligence, who have ceased to think themselves naturally inferior to those whom they serve."]
[The rest of the paragraph, with the exception of the two sentences indicated in the next note, replaced in the 3rd ed. (1852) the following single sentence of the original text: "But something else is required when wealth increases slowly, or has reached the stationary state, when positions, instead of being more mobile, would tend to be much more permanent than at present, and the condition of any portion of mankind could only be desirable, if made desirable from the first."]
[This and the following sentence are an expansion in the 4th ed. (1857) of the clause in the 3rd: "while the return given in the shape of service is sought to be reduced to the lowest minimum."]
[The remainder of this paragraph (subjected subsequently to verbal alterations) replaced in the 3rd ed. (1852) the following original (1848) text: "The problem is, to obtain the efficiency and economy of production on a large scale, without dividing the producers into two parties with hostile interests, employers and employed, the many who do the work being mere servants under the command of the one who supplies the funds, and having no interest of their own in the enterprise, except to fulfil their contract and earn their wages."]
[3rd ed. (1852), "five"; 4th (1857), "ten"; 6th (1865), "twenty"; 7th (1871), "thirty."]
[So since 5th ed. (1862). In the 3rd and 4th, "Unless the military despotism now triumphant on the Continent should succeed in its nefarious attempts to throw back the human mind."]
[In 3rd ed.: "temporarily and in some cases..., in other cases and finally in all." In 5th ed. (1862): "perhaps finally in all." In 6th ed. (1865), "temporarily" omitted.]

Book IV. Chapter VII. Section 5

[The following passage, inserted at this point in the 2nd ed. (1849) disappeared from the 3rd (1852).

"§ 5. It is this feeling, of the nature of the problem" (see supra, p. 761, n. 1), "almost as much as despair of the improvement of the condition of the labouring masses by other means, which has caused so great a multiplication of projects for the 'organization of industry' by the extension and development of the co-operative or joint stock principle: some of the more conspicuous of which have been described and characterized in an early chapter of this work. It is most desirable that all these schemes should have opportunity and encouragement to test their capabilities by actual experiment. There are, in almost all of them, many features, in themselves well worth submitting to that test; while, on the other hand, the exaggerated expectations entertained by large and growing multitudes in all the principal nations of the world, concerning what it is possible, in the present state of human improvement, to effect by such means, have no chance of being corrected except by a fair trial in practice. The French Revolution of February 1848, at first seemed to have opened a fair field for the trial of such experiments, on a perfectly safe scale, and with every advantage that could be derived from the countenance of a government which sincerely desired their success. It is much to be regretted that these prospects have been frustrated, and that the reaction of the middle class against anti-property doctrines has engendered for the present an unreasoning and undiscriminating antipathy to all ideas, however harmless or however just, which have the smallest savour of Socialism. This is a disposition of mind, of which the influential classes, both in France and elsewhere, will find it necessary to divest themselves. Socialism has now become irrevocably one of the leading elements in European politics. The questions raised by it will not be set at rest by merely refusing to listen to it; but only by a more and more complete realization of the ends which Socialism aims at, not neglecting its means so far as they can be employed with advantage."]

This passage is from the Prize Essay on the Causes and Remedies of National Distress, by Mr. Samuel Laing. The extracts which it includes are from the Appendix to the Report of the Children's Employment Commission.
Economy of Machinery and Manufactures, 3rd edition, ch. 26.
[The long quotation from Babbage, which appeared in the 1st and 2nd eds. (1848, 1849), disappeared from the 3rd (1852): "I venture to quote the principal part of his observations on the subject.

'The general principles on which the proposed system is founded, are—1st. That a considerable part of the wages received by each person employed, should depend on the profits made by the establishment; and 2nd. That every person connected with it should derive more advantage from applying any improvement he might discover, to the factory in which he is employed, than he could by any other course.

'It would be difficult to prevail on the large capitalist to enter upon any system, which would change the division of the profits arising from the employment of his capital in setting skill and labour in action; any alteration, therefore, must be expected rather from the small capitalist, or from the higher class of workmen, who combine the two characters; and to these latter classes, whose welfare will be first affected, the change is most important. I shall therefore first point out the course to be pursued in making the experiment; and then, taking a particular branch of trade as an illustration, I shall examine the merits and defects of the proposed system as applied to it.

'Let us suppose, in some large manufacturing town, ten or twelve of the most intelligent and skilful workmen to unite, whose characters for sobriety and steadiness are good, and are well known among their class. Such persons will each possess some small portion of capital; and let them join with one or two others who have raised themselves into the class of small master-manufacturers, and therefore possess rather a larger portion of capital. Let these persons, after well considering the subject, agree to establish a manufactory of fire-irons and fenders; and let us suppose that each of the ten workmen can command forty pounds, and each of the small capitalists possesses two hundred pounds: thus they have a capital of 800l. with which to commence business, and for the sake of simplifying, let us further suppose the labour of each of these twelve persons to be worth two pounds a week. One portion of their capital will be expended in procuring the tools necessary for their trade, which we shall take at 400l., and this must be considered as their fixed capital. The remaining 400l. must be employed as circulating capital, in purchasing the iron with which their articles are made, in paying the rent of their workshops, and in supporting themselves and their families until some portion of it is replaced by the sale of the goods produced.

'Now the first question to be settled is, what proportion of the profit should be allowed for the use of capital, and what for skill and labour? It does not seem possible to decide this question by any abstract reasoning: if the capital supplied by each partner is equal, all difficulty will be removed; if otherwise, the proportion must be left to find its level, and will be discovered by experience; and it is probable that it will not fluctuate much. Suppose it to be agreed that the capital of 800l. shall receive the wages of one workman. At the end of each week, every workman is to receive one pound as wages, and one pound is to be divided amongst the owners of the capital. After a few weeks the returns will begin to come in; and they will soon become nearly uniform. Accurate accounts should be kept of every expense and of all the sales; and at the end of each week the profit should be divided. A certain portion should be laid aside as a reserved fund, another portion for repair of the tools, and the remainder being divided into thirteen parts, one of these parts would be divided amongst the capitalists and one belong to each workman. Thus each man would, in ordinary circumstances, make up his usual wages of two pounds weekly. If the factory went on prosperously, the wages of the men would increase; if the sales fell off, they would be diminished. It is important that every person employed in the establishment, whatever might be the amount paid for his services, whether he act as labourer or porter, or as the clerk who keeps the accounts, or as book-keeper employed for a few hours once a week to superintend them, should receive one-half of what his service is worth in fixed salary, the other part varying with the success of the undertaking.

'The result of such arrangements in a factory would be,

'1. That every person engaged in it would have a direct interest in its prosperity; since the effect of any success, or falling off, would almost immediately produce a corresponding change in his own weekly receipts.

'2. Every person concerned in the factory would have an immediate interest in preventing any waste or mismanagement in all the departments.

'3. The talents of all connected with it would be strongly directed to improvement in every department.

'4. None but workmen of high character and qualifications could obtain admission into such establishments, because when any additional hands were required, it would be the common interest of all to admit only the most respectable and skilful, and it would be far less easy to impose upon a dozen workmen than upon the single proprietor of a factory.

'5. When any circumstance produced a glut in the market, more skill would be directed to diminishing the cost of production; and a portion of the time of the men might then be occupied in repairing and improving their tools, for which a reserved fund would pay, thus checking present, and at the same time facilitating future, production.

'6. Another advantage, of no small importance, would be the total removal of all real or imaginary causes for combinations. The workmen and the capitalist would so shade into each other—would so evidently have a common interest, and their difficulties and distresses would be mutually so well understood, that instead of combining to oppress one another, the only combination which could exist would be a most powerful union between both parties to overcome their common difficulties.

'One of the difficulties attending such a system is, that capitalists would at first fear to embark in it, imagining that the workmen would receive too large a share of the profits: and it is quite true that the workmen would have a larger share than at present: but at the same time, it is presumed the effect of the whole system would be, that the total profits of the establishment being much increased, the smaller proportion allowed to capital under this system would yet be greater in actual amount, than that which results to it from the larger share in the system now existing.

'A difficulty would occur also in discharging workmen who behaved ill, or who were not competent to their work; this would arise from their having a certain interest in the reserved fund, and perhaps from their possessing a certain portion of the capital employed; but without entering into detail, it may be observed, that such cases might be determined on by meetings of the whole establishment; and that if the policy of the laws favoured such establishments, it would scarcely be more difficult to enforce just regulations than it now is to enforce some which are unjust, by means of combinations either amongst the masters or the men.' "]

[In the original ed. (1849) this paragraph began thus: "In this imaginary case" described by Babbage, see supra, p. 766, n. 1, "it is supposed that each labourer brings some small portion of capital into the concern: but the principle is equally applicable to the ordinary case in which the whole capital belongs to an individual capitalist. An application of it to such a case is actually in progress by a Paris tradesman," &c. The present text, but with "about ten years ago," dates from the 3rd ed. (1852). The 4th, 5th, and 6th eds. (1857, 1862, 1865) have "about sixteen years ago"; the 7th (1871) "above thirty."]
His establishment is 11, Rue Saint Georges.
[1849] It appears, however, that the workmen whom M. Leclaire had admitted to this participation of profits, were only a portion (rather less than half) of the whole number whom he employed. This is explained by another part of his system. M. Leclaire pays the full market rate of wages to all his workmen. The share of profit assigned to them is, therefore, a clear addition to the ordinary gains of their class, which he very laudably uses as an instrument of improvement, by making it the reward of desert, or the recompense for peculiar trust.
For September 27, 1845.
[Added in 2nd ed. (1849).]
Lettres sur l'Organisation du Travail, by Michel Chevalier, lettre xiv.
[The concluding sentence of this paragraph, together with the next paragraph and the examples quoted in the note, were added in the 5th ed. (1862).]
Nouveau Traité d'Economie Politique.
[1865] At the present time M. Leclaire's establishment is conducted on a somewhat altered system, though the principle of dividing the profits is maintained. There are now three partners in the concern: M. Leclaire himself, one other person (M. Defournaux), and a Provident Society (Société de Secours Mutuels), of which all persons in his employment are the members. (This Society owns an excellent library, and has scientific, technical, and other lectures regularly delivered to it.) Each of the three partners has 100,000 francs invested in the concern; M. Leclaire having advanced to the Provident Society as much as was necessary to supply the original insufficiency of their own funds. The partnership, on the part of the Society, is limited; on that of M. Leclaire and M. Defournaux, unlimited. These two receive 6000 francs (240l.) per annum each as wages of superintendence. Of the annual profits they receive half, though owning two-thirds of the capital. The remaining half belongs to the employés and workpeople; two-fifths of it being paid to the Provident Society, and the other three-fifths divided among the body. M. Leclaire, however, now reserves to himself the right of deciding who shall share in the distribution, and to what amount; only binding himself never to retain any part, but to bestow whatever has not been awarded to individuals, on the Provident Society. It is further provided that in case of the retirement of both the private partners, the goodwill and plant shall become, without payment, the property of the Society.
"In March 1847, M. Paul Dupont, the head of a Paris printing-office, had the idea of taking his workmen into partnership by assigning to them a tenth of the profits. He habitually employs three hundred; two hundred of them on piece work, and a hundred by the day. He also employs a hundred extra hands, who are not included in the association. The portion of profit which falls to the workmen does not bring them in, on the average, more than the amount of a fortnight's wages; but they receive their ordinary pay according to the rates established in all the great Paris printing offices; and have, besides, the advantage of medical attendance in illness at the expense of the association, and a franc and a half per day while incapacitated for work. The workmen cannot draw out their share of profit except on quitting the association. It is left at interest (sometimes invested in the public funds), and forms an accumulating reserve of savings for its owners.

"M. Dupont and his partners find this association a source of great additional profit to them: the workmen, on their side, congratulate themselves daily on the happy idea of their employer. Several of them have by their exertions caused the establishment to gain a gold medal in 1849, and an honorary medal at the Universal Exhibition of 1855: some even have personally received the recompense of their inventions and of their labours. Under an ordinary employer, these excellent people would not have had leisure to prosecute their inventions, unless by leaving the whole honour to one who was not the author of them: but, associated as they were, if the employer had been unjust, two hundred men would have obliged him to repair the wrong.

"I have visited this establishment, and have been able to see for myself the improvement which the partnership produces in the habits of the workpeople.

"M. Gisquet, formerly Prefect of Police, has long been the proprietor of an oil manufactory at St. Denis, the most important one in France next to that of M. Darblay, of Corbeil. When in 1848 he took the personal management of it, he found workmen who got drunk several days in the week, and during their work sung, smoked, and sometimes quarrelled with one another. Many unsuccessful attempts had been made to alter this state of things: he accomplished it by forbidding his workmen to get drunk on working days, on pain of dismissal, and at the same time promising to share with them, by way of annual gratuity, five per cent of his net profits, in shares proportioned to wages, which are fixed at the current rates. From that time the reformation has been complete, and he is surrounded by a hundred workmen full of zeal and devotion. Their comforts have been increased by what they have ceased to spend in drink, and what they gain by their punctuality at work. The annual gratuity has amounted, on the average, to the equivalent of six weeks' wages.

"M. Beslay, a member of the Chamber of Deputies from 1830 to 1839, and afterwards of the Constituent Assembly, has founded an important manufactory of steam engines at Paris, in the Faubourg of the Temple. He has taken his workpeople into partnership ever since the beginning of 1847, and the contract of association is one of the most complete which have been made between employers and workpeople."

The practical sagacity of Chinese emigrants long ago suggested to them, according to the report of a recent visitor to Manilla, a similar constitution of the relation between an employer and labourers. "In these Chinese shops" (at Manilla) "the owner usually engages all the activity of his countrymen employed by him in them, by giving each of them a share in the profits of the concern, or in fact by making them all small partners in the business, of which he of course takes care to retain the lion's share, so that while doing good for him by managing it well, they are also benefiting themselves. To such an extent is this principle carried that it is usual to give even their coolies a share in the profits of the business in lieu of fixed wages, and the plan appears to suit their temper well; for although they are in general most complete eye-servants when working for a fixed wage, they are found to be most industrious and useful ones when interested even for the smallest share."—McMicking's Recollections of Manilla and the Philippines during 1848, 1849, and 1850, p. 24.

[This paragraph was added in the 6th ed. (1865); and it was said that Messrs. Briggs "have issued a proposal to work"; changed to "They now work" &c., in the 7th ed. (1871).]
[For the abandonment of the Briggs experiment in 1875 see Schloss, Methods of Industrial Remuneration (2nd ed.), p. 282.]

Book IV. Chapter VII. Section 6

[The opening paragraphs of this section and the account of French cooperative societies which follows were added in the 3rd ed. (1852). At the same time the following paragraph and section of the original (1848) text were removed:

"Under this system," of M. Leclaire, "as well as under that recommended by Mr. Babbage, the labourers are, in reality, taken into partnership with their employer. Bringing nothing into the common concern but their labour, while he brings not only his labour of direction and superintendence but his capital also, they have justly a smaller share of the profits; this, however, is a matter of private arrangement in all partnerships; one partner has a large, another a small share, according to their agreement, grounded on the equivalent which is given by each. The essence, however, of a partnership is obtained, since each benefits by all things that are beneficial to the concern, and loses by all which are injurious. It is, in the fullest sense, the common concern of all.

"§ 6. To this principle, in whatever form embodied, it seems to me that futurity has to look for obtaining the benefits of co-operation, without constituting the numerical majority of the co-operators an inferior caste. The objections that apply to a 'co-operative society,' in the Communist or Owenite sense, in which, by force of giving to every member of the body a share in the common interest, no one has a greater share in it than another, are not applicable to what is now suggested. It is expedient that those, whose performance of the part assigned to them is the most essential to the common end, should have a greater amount of personal interest in the issue of the enterprise. If those who supply the funds, and incur the whole risk of the undertaking, obtained no greater reward or more influential voice than the rest, few would practise the abstinence through which those funds are acquired and kept in existence. Up to a certain point, however, the principle of giving to every person concerned an interest in the profits is an actual benefit to the capitalist, not only (as M. Leclaire has testified) in point of ease and comfort, but even in pecuniary advantage. And after the point of greatest benefit to the employers has been attained, the participation of the labourers may be carried somewhat further without any material abatement from that maximum of benefit. At what point, in each employment of capital, this ultimatum is to be found, will one day be known and understood from experience; and up to that point it is not unreasonable to expect that the partnership principle will be, at no very distant time, extended.

"The value of this 'organization of industry,' for healing the widening and embittering feud between the class of labourers and the class of capitalists, must, I think, impress itself by degrees on all who habitually reflect on the condition and tendencies of modern society. I cannot conceive how any such person can persuade himself that the majority of the community will for ever, or even for much longer, consent to hew wood and draw water all their lives in the service and for the benefit of others; or can doubt, that they will be less and less willing to co-operate as subordinate agents in any work, when they have no interest in the result, and that it will be more and more difficult to obtain the best work-people, or the best services of any work-people, except on conditions similar in principle to those of M. Leclaire. Although, therefore, arrangements of this sort are now in their infancy, their multiplication and growth, when once they enter into the general domain of popular discussion, are among the things which may most confidently be expected."]

[So since 4th ed. (1857). Originally, in 3rd ed. (1852), "a few months ago."]
["Strengthened" &c., added in 5th ed. (1862).]
P. 112.
Pp. 113-6.
"The last two items consisted of safe securities, nearly all of which have since been realized."
"These adherents are workmen of the trade, who subscribed small sums to the association at its commencement: a portion of them were reimbursed in the beginning of 1851. The sum due to creditors has also been much reduced: on the 23rd of April it only amounted to 113 francs 59 centimes."
Article by M. Cherbuliez on "Operative Associations," in the Journal des Economistes for November 1860.

I subjoin, from M. Villiaumé and M. Cherbuliez, detailed particulars of other eminently successful experiments by associated workpeople.

"We will first cite," says M. Cherbuliez, "as having attained its object and arrived at a definitive result, the Association Remquet, of the Rue Garancière, at Paris, whose founder, in 1848, was a foreman in M. Renouard's printing establishment. That firm being under the necessity of winding up, he proposed to his fellow-workmen to join with him in continuing the enterprise on their own account, asking a subvention from the government to cover the purchase-money of the business and the first expenses. Fifteen of them accepted the proposal, and formed an association, whose statutes fixed the wages for every kind of work, and provided for the gradual formation of a working capital by a deduction of 25 per cent from all wages and salaries, on which deduction no dividend or interest was to be allowed during the ten years that the association was intended to last. Remquet asked and obtained for himself the entire direction of the enterprise, at a very moderate fixed salary. At the winding up, the entire profits were to be divided among all the members, proportionally to their share in the capital, that is, to the work they had done. A subvention of 80,000 francs was granted by the State, not without great difficulty, and on very onerous conditions. In spite of these conditions, and of the unfavourable circumstances resulting from the political situation of the country, the association prospered so well, that on the winding up, after repaying the advance made by the State, it was in possession of a clear capital of 155,000 francs [6200l.], the division of which gave on the average between ten and eleven thousand francs to each partner; 7000 being the smallest and 18,000 the largest share.

"The Fraternal Association of Working Tinmen and Lampmakers had been founded in March 1848 by 500 operatives, comprising nearly the whole body of the trade. This first attempt, inspired by unpractical ideas, not having survived the fatal days of June, a new association was formed of more modest proportions. Originally composed of forty members, it commenced business in 1849 with a capital composed of the subscriptions of its members, without asking for a subvention. After various vicissitudes, which reduced the number of partners to three, then brought it back to fourteen, then again sunk it to three, it ended by keeping together forty-six members, who quietly remodelled their statutes in the points which experience had shown to be faulty, and their number having been raised by successive steps to 100, they possessed, in 1858, a joint property of 50,000 francs, and were in a condition to divide annually 20,000 francs.

"The Association of Operative Jewellers, the oldest of all, had been founded in 1831 by eight workmen, with a capital of 200 francs [8l.] derived from their united savings. A subvention of 24,000 francs enabled them in 1849 greatly to extend their operations, which in 1858 had already attained the value of 140,000 francs, and gave to each partner an annual dividend equal to double his wages."

The following are from M. Villiaumé:—

"After the insurrection of June 1848, work was suspended in the Faubourg St. Antoine, which, as we know, is principally occupied by furniture-makers. Some operative arm-chair makers made an appeal to those who might be willing to combine with them. Out of six or seven hundred composing the trade, four hundred gave in their names. But capital being wanting, nine of the most zealous began the association with all that they possessed; being a value of 369 francs in tools, and 135 francs 20 centimes in money.

"Their good taste, honesty, and punctuality having increased their business, they soon numbered 108 members. They received from the State an advance of 25,000 francs, reimbursable in 14 years by way of annuity, with interest at 3¾ per cent.

"In 1857 the number of partners is 65, the auxiliaries average 100. All the partners vote at the election of a council of eight members, and a manager whose name represents the firm. The distribution and superintendence of all the works is entrusted to foremen chosen by the manager and council. There is a foreman to every 20 or 25 workmen.

"The payment is by the piece, at rates determined in general assembly. The earnings vary from 3 to 7 francs a day, according to zeal and ability. The average is 50 francs [2l.] a fortnight, and no one gains much less than 40 francs per fortnight, while many earn 80. Some of the carvers and moulders make as much as 100 francs, being 200 francs [8l.] a month. Each binds himself to work 120 hours per fortnight, equal to ten per day. By the regulations, every hour short of the number subjects the delinquent to a penalty of 10 centimes [one penny] per hour up to thirty hours, and 15 centimes [1½d.] beyond. The object of this rule was to abolish Saint Monday, and it succeeded in its effort. For the last two years the conduct of the members has been so good, that fines have fallen into disuse.

"Though the partners started with only 359 francs, the value of the plant (Rue de Chavonne, Cour St. Joseph, Faubourg St. Antoine) already in 1851 amounted to 5713 francs, and the assets of the association, debts due to them included, to 24,000 francs. Since then the association has become still more flourishing, having resisted all the attempts made to impede its progress. It does the largest business, and is the most considered, of all the houses in Paris in the trade. Its business amounts to 400,000 francs a year." Its inventory in December 1855 showed, according to M. Villiaumé, a balance of 100,398 francs 90 centimes in favour of the association, but it possessed, he says, in reality, 123,000 francs.

But the most important association of all is that of the Masons. "The Association of Masons was founded August 10th, 1848. Its address is Rue St. Victor, 155. Its number of members is 85, and its auxiliaries from three to four hundred. There are two managers, one for the building department, the other for the pecuniary administration: these are regarded as the ablest master-masons in Paris, and are content with a moderate salary. This association has lately constructed three or four of the most remarkable mansions in the metropolis. Though it does its work more economically than ordinary contractors, yet as it has to give long credits, it is called upon for considerable advances: it prospers, however, as is proved by the dividend of 56 per cent which has been paid this year on its capital, including in the payment those who have associated themselves in its operations. It consists of workmen who bring only their labour, of others who bring their labour and a capital of some sort, and of a third class who do not work, but contribute capital only.

"The masons, in the evening, carry on mutual instruction. They, as well as the arm-chair makers, give medical attendance at the expense of the association, and an allowance to its sick members. They extend their protection over every member in every action of his life. The arm-chair makers will soon each possess a capital of two or three thousand francs, with which to portion their daughters or commence a reserve for future years. Of the masons, some have already 4000 francs, which are left in the common stock.

"Before they were associated, these workmen were poorly clad in jackets and blouses; because, for want of forethought, and still more from want of work, they had never 60 francs beforehand to buy an overcoat. Most of them are now as well dressed as shopkeepers, and sometimes more tastefully. For the workman, having always a credit with the association, can get whatever he wants by signing an order; and the association reimburses itself by fortnightly stoppages,making him save as it were in spite of himself. Some workmen who are not in debt to the concern, sign orders payable to themselves at five months date, to resist the temptation of needless expense. They are put under stoppages of 10 francs per fortnight, and thus at the end of five months they have saved the amount."

The following table, taken by M. Cherbuliez from a work (Die gewerblichen und wirthschaftlichen Genossenschaften der arbeitenden Classen in England, Frankreich und Deutschland), published at Tübingen in 1860, by Professor Huber (one of the most ardent and high-principled apostles of this kind of cooperation) shows the rapidly progressive growth in prosperity of the Masons' Association up to 1858:—

Year Amount of
business done.
1852 45,530 1,000
1853 297,208 7,000
1854 344,240 20,000
1855 614,694 46,000
1856 998,240 80,000
1857 1,330,000 100,000
1858 1,231,461 130,000

"Of this last dividend," says M. Cherbuliez, "30,000 francs were taken for the reserve fund, and the remaining 100,000, divided among the shareholders, gave to each from 500 to 1500 francs, besides their wages or salaries, and their share in the fixed capital of the concern."

Of the management of the associations generally, M. Villíaumé says, "I have been able to satisfy myself personally of the ability of the managers and councils of the operative associations. The managers are far superior in intelligence, in zeal, and even in politeness, to most of the private masters in their respective trades. And among the associated workmen, the fatal habit of intemperance is gradually disappearing, along with the coarseness and rudeness which are the consequence of the too imperfect education of the class."

Even the association founded by M. Louis Blane, that of the tailors of Clichy, after eighteen months' trial of this system, adopted piece-work. One of the reasons given by them for abandoning the original system is well worth extracting. "Besides the vices I have mentioned, the tailors complained that it caused incessant disputes and quarrels, through the interest which each had in making his neighbours work. Their mutual watchfulness degenerated into a real slavery; nobody had the free control of his time and his actions. These dissensions have disappeared since piece-work was introduced."—Feugueray, p. 88. One of the most discreditable indications of a low moral condition given of late by part of the English working classes, is the opposition to piece-work. When the payment per piece is not sufficiently high, that is a just ground of objection. But dislike to piece-work in itself, except under mistaken notions, must be dislike to justice and fairness; a desire to cheat, by not giving work in proportion to pay. Piece-work is the perfection of contract; and contract, in all work, and in the most minute detail—the principle of so much pay for so much service, carried out to the utmost extremity—is the system, of all others, in the present state of society and degree of civilization, most favourable to the worker; though most unfavourable to the non-worker who wishes to be paid for being idle.
[This paragraph dates from the 5th ed. (1862), and replaced the following passages of the 3rd (1852): "It is painful to think that these bodies, formed by the heroism and maintained by the public spirit and good sense of the working people of Paris, are in danger of being involved in the same ruin with everything free, popular, or tending to improvement in French institutions. The unprincipled adventurer who has for the present succeeded in reducing France to the political condition of Russia, knows that two or three persons cannot meet together to discuss, though it be only the affairs of a workshop, without danger to his power. He has therefore already suppressed most of the provincial associations, and many of those of Paris, and the remainder, instead of waiting to be dissolved by despotism, are, it is said, preparing to emigrate. Before this calamity overtook France, the associations could be spoken of not with the hope merely, but with positive evidence, of their being able to compete successfully with individual capitalists. 'The associations,' says M. Feugueray," &c., as in the present text, supra, p. 781.

"Though the existing associations may be dissolved, or driven to expatriaté, their experience will not be lost. They have existed long enough to furnish the type of future improvement: they have exemplified the process for bringing about a change in society, which would combine the freedom and independence of the individual," &c., as in the present text, infra, p. 791.

To the 4th ed. (1857) was added this note: "It appears however from subsequent accounts that in 1854 twenty-five associations still existed in Paris and several in the provinces, and that many of these were in a most flourishing condition. This number is exclusive of Co-operative Stores, which have greatly multiplied, especially in the South of France, and are not understood to be discouraged by the Government."]

[1865] In the last few years the co-operative movement among the French working classes has taken a fresh start. An interesting account of the Provision Association (Association Alimentaire) of Grenoble has been given in a pamphlet by M. Casimir Périer (Les Sociétés de Co-opération); and in the Times of November 24, 1864, we read the following passage:—"While a certain number of operatives stand out for more wages, or fewer hours of labour, others, who have also seceded, have associated for the purpose of carrying on their respective trades on their own account, and have collected funds for the purchase of instruments of labour. They have founded a society, 'Société Générale d'Approvisionnement et de Consommation.' It numbers between 300 and 400 members, who have already opened a 'co-operative store' at Passy, which is now within the limits of Paris. They calculate that by May next, fifteen new self-supporting associations of the same kind will be ready to commence operations; so that the number will be for Paris alone from 50 to 60."
[This paragraph and the subsequent account of the Rochdale Pioneers date from the 5th ed. (1862), though the reference to the Zürich society and to Mr. Plummer in the footnote were added in the 6th ed. (1865). From the 4th (1857) disappeared the following footnote:

"Though this beneficent movement has been so seriously checked in the country in which it originated, it is rapidly spreading in those other countries which have acquired, and still retain, any political freedom. It forms already an important feature in the social improvement which is proceeding at a most rapid pace in Piedmont. In England also, under the impulse given by the writings and personal exertions of a band of friends, chiefly clergymen and barristers, the movement has made some progress. On the 15th of February, 1856, there had been registered under the Industrial and Provident Societies' Act, thirty-three associations, seventeen of which were industrial societies, the remainder being associations for co-operative consumption only: without reckoning Scotland, where, also, these associations were rapidly spreading. It is believed that all such societies are now registered under the Limited Liabilities Act. From later information it appears that the productive associations (excluding the flour mills, which partake more of the nature of stores) have fallen off in number since their first start; and their progress, in the present moral condition of the bulk of the population, cannot possibly be rapid. But those which subsist, continue to do as much business as they ever did: and there are in the North of England instances of brilliant and steadily progressive success. Co-operative stores are increasing both in number and prosperity, especially in the North; and they are the best preparation for a wider application of the principle."]

Self-help by the People—History of Co-operation in Rochdale. An instructive account of this and other co-operative associations has also been written in the Companion to the Almanack for 1862, by Mr. John Plummer, of Kettering; himself one of the most inspiring examples of mental cultivation and high principle in a self-instructed working man.
"But it is not," adds Mr. Holyoake, "the brilliancy of commercial activity in which either writer or reader will take the deepest interest; it is in the new and improved spirit animating this intercourse of trade. Buyer and seller meet as friends; there is no overreaching on one side, and no suspicion on the other.... These crowds of humble working men, who never knew before when they put good food in their mouths, whose every dinner was adulterated, whose shoes let in the water a month too soon, whose waistcoats shone with devil's dust, and whose wives wore calico that would not wash, now buy in the markets like millionaires, and as far as pureness of food goes, live like lords." Far better, probably, in that particular; for assuredly lords are not the customers least cheated in the present race of dishonest competition. "They are weaving their own stuffs, making their own shoes, sewing their own garments, and grinding their own corn. They buy the purest sugar and the best tea, and grind their own coffee. They slaughter their own cattle, and the finest beasts of the land waddle down the streets of Rochdale for the consumption of flannel weavers and cobblers. (Last year the Society advertised for a Provision Agent to make purchases in Ireland, and to devote his whole time to that duty.) When did competition give poor men these advantages? And will any man say that the moral character of these people is not improved under these influences? The teetotallers of Rochdale acknowledge that the Store has made more sober men since it commenced than all their efforts have been able to make in the same time. Husbands who never knew what it was to be out of debt, and poor wives who during forty years never had sixpence uncondemned in their pockets, now possess little stores of money sufficient to build them cottages, and go every week into their own market with money jingling in their pockets; and in that market there is no distrust and no deception; there is no adulteration, and no second prices. The whole atmosphere is honest. Those who serve neither hurry, finesse, nor flatter. They have no interest in chicanery. They have but one duty to perform—that of giving fair measure, full weight, and a pure article. In other parts of the town, where competition is the principle of trade, all the preaching in Rochdale cannot produce moral effects like these.

"As the Store has made no debts, it has incurred no losses; and during thirteen years' transactions, and receipts amounting to 303,852l., it has had no law-suits. The Arbitrators of the Societies, during all their years of office, have never had a case to decide, and are discontented that nobody quarrels."

[1865] The latest report to which I have access is that for the quarter ending September 20, 1864, of which I take the following abstract from the November number of that valuable periodical the Co-operator, conducted by Mr. Henry Pitman, one of the most active and judicious apostles of the Co-operative cause:—"The number of members is 4580, being an increase of 132 for the three months. The capital or assets of the society is 59,536l. 10s. 1d., or more than last quarter by 3687l. 13s. 7d. The cash received for sale of goods is 45,806l. 0s. 10½d., being an increase of 2283l. 12s.d. as compared with the previous three months. The profit realized is 5713l. 2s.d., which, after depreciating fixed stock account 182l. 2s.d., paying interest on share capital 598l. 17s. 6d., applying 2½ per cent to an educational fund, viz. 122l. 17s. 9d., leaves a dividend to members on their purchases of 2s. 4d. in the pound. Non-members have received 261l. 18s. 4d., at 1s. 8d. in the pound on their purchases, leaving 8d. in the pound profit to the society, which increases the reserve fund 104l. 15s. 4d. This fund now stands at 1352l. 7s. 11½d., the accumulation of profits from the trade of the public with the store since September 1862, over and above the 1s. 8d. in the pound allowed to such purchasers."
[This paragraph added in 6th ed. (1865).]
[This paragraph is from the 5th ed. (1862), and so is the explanation, in the next paragraph but one, of the increase in the productiveness of industry. The argument as to the limitation of the number of distributors was inserted in the 6th ed. (1865).]
[The present text from this point to the point indicated in the next paragraph but two dates from the 6th ed. (1865).]
[The rest of this paragraph dates from the 3rd ed. (1852).]
[1865] In this respect also the Rochdale Society has given an example of reason and justice, worthy of the good sense and good feeling manifested in their general proceedings. "The Rochdale Store," says Mr. Holyoake, "renders incidental but valuable aid towards realizing the civil independence of women. Women may be members of this Store, and vote in its proceedings. Single and married women join. Many married women become members because their husbands will not take the trouble, and others join it in self-defence to prevent the husband from spending their money in drink. The husband cannot withdraw the savings at the Store standing in the wife's name unless she signs the order."

Book IV. Chapter VII. Section 7

[This section added in 3rd ed. (1852).]
P. 90.
["Of their class" was inserted in 4th ed. (1857); and the words of the 3rd ed. (1852), "so unjustly and illiberally railed at—as if they were one iota worse in their motives or practices than other people, in the existing state of society,—" were omitted.]
[See Appendix DD. The Subsequent History of Co-operation.]

Book V. Chapter I. Section 1

End of Notes

67 of 79

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