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CHAPTER VI: the labour question - Wordsworth Donisthorpe, Individualism: A System of Politics 
Individualism: A System of Politics (London: Macmillan and Co., 1889).
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the labour question
“CAN'T you let things alone? " asks the comfortable capitalist in his easy-chair. “Let sleeping dogs lie. All is fairly well, if only reformers would but sit still.” No! there is a time for rest and a time for action. When the social forces are gradually shaping themselves, and their eventual tendency is undiscernible, the social tinker is out of place. His suggestions for change, though frequently prompted by kindly feeling, are all based on rule of thumb. He would amend the laws of nature on superior principles evolved from his own inner consciousness. Sometimes he labours in vain. His efforts end in naught. Sometimes he is successful in his immediate aims, and then his efforts end in untold mischief.
But when the body politic is in unstable equilibrium– when the fabric of society is shaken to its foundations; when all the signs of the times point to imminent change, for better or for worse—then the true statesman is he who, before the inevitable crash comes, can so forecast the resultant of apparently conflicting forces as to be able to guide them at once and without unnecessary waste of energy and time into their destined channel. The navigator cannot make the wind, and the statesman cannot create the social current, but both can so utilise the force supplied by nature as to make for salvation rather than wreck. To-day presents such an occasion. To sit still and “wish for the day ” means ruin. All over the civilised world he that hath ears to hear may listen to the mutterings of the coming storm. Riots in America; riots in Belgium; riots in France; riots in Holland; riots even in tranquil London,—all originating not with the scum and refuse of society, but with honest, despairing workers clamouring for bread and for work, and not knowing whither to turn; depression in trade (despite the rose-coloured reports of Royal Commissions) of an intensity and duration unprecedented in the history of industrialism: here a strike, brought to a close by the slow starvation of the strikers, only to be followed by another due to impossible wages; there a lock-out, rendered necessary by vanishing profits; everywhere discontent and wretchedness, aggravated by class envy and glaring inequalities of distribution: all these and a hundred other signs bode revolution. It must come. It is for us to decide whether it shall be short, sharp, and bloody, or peaceful and thorough. There is no alternative, and now that the people have taken the tiller into their own hands, it is upon the people that the responsibility must lie.
Probably the first thing in this country to strike an observer, unused all his life to the strange phenomenon, would be the spectacle of a large majority of human beings toiling all day long and every day of their dreary existence in order that a small minority may enjoy the proceeds of their work- toiling, too, at wages avowedly based on a calculation of the cost of “keeping body and soul together.” Surely, if it were not so tragical, the situation would be almost comical. Yet we are asked to tremble at the approach of the revolution. Of whom ? Of those who tamely submit, almost without protest, to this anomalous, this monstrous system of wagedom? Of men who stand passively by to see the lives of their wives and mothers and sisters crushed out of them beneath the car wheels of Juggernaut Plutax? And this, too, is an age of cheap literature, of gratis education, of rapid communication, and of free meeting? Is it that the Englishman of to-day has too much sense and too little pluck for revolution of the “blood and iron ” type? Or is it that he has hopes of a peaceful revolution and courage to wait for it? Perhaps.
But, first, what is the explanation of this singular economic system? In accordance with what principle of justice does one of two partners take all the profits and the other none? It was many years ago pointed out by Ricardo, and has long been a well-established doctrine of political economy, that under the competitive system of trade, wages have a tendency to gravitate down to a certain limit which may be called the cost of subsistence. No sooner has a temporary rise taken place than it is immediately swallowed up by the increase of population. In short, population is limited by the demand for wage labour, and therefore it is absurd to suppose that average wages can for any considerable period of time exceed their normal amount. That amount, to be perfectly accurate, is simply this: the amount requisite to keep the workman in sufficient health, plus enough to enable him to rear up children to take his place when he is used up; and by “sufficient health ” is meant, not enough for happiness, but enough to enable him to go through the average task required of him and the like of him. As Mill himself admits, “when by improvements in agriculture, the repeal of the corn-laws, or other such causes, the necessaries of life are cheapened. . . wages will fall at last, so as to leave the labourers no better off than before.” So that whatever a workman may suppose himself to be saving and putting away over and above his cost of living must not be mistaken for profit. It is merely the refunding of the money spent on his own youth and training, or a sinking fund to pay for the unremunerative youth and training of his children, from whichever point of view we choose to regard it. In neither case can it be regarded as profit. He has no more to call his own at the end of the process than he had at the beginning. He has his own body for what it is worth; but so also the capitalist has his engine and fixed capital. True, he has been fed and kept during the process, but so has the engine been kept in repair and supplied with fuel. Again, if the capitalist is wise he has written off a certain sum-say ten per cent—for wear and tear of the engine, i.e. as a sinking fund wherewith to buy a new one when it is worn out. In all respects the economic position of the two is identical. The labourer and the engine are treated precisely alike. Then in what respect is the free labourer better off' than the slave? Let us face this question honestly. If we do not, posterity will. The truth is that economically the free labourer is no better off than a slave. The whole of the profits of his contribution to production are appropriated by the capitalist. The fruits of labour do not, under the existing system, pass to the wage receiver. Moreover, in one respect he is worse off than the slaves or even than the horses of his employer. In the case of costly slaves on a sugar plantation, and in the case of an English capitalist's horses, it is found more economical to keep them in good condition and to get a moderate amount of work out of them, rather than to overwork and underfeed them and buy new ones when they are worn out. With free men in an over-stocked labour market this is not the case, or at least it is not believed to be the case by the majority of employers, and the consequence is the workers are usually worse treated than if they had to be bought and sold outright.
Of course it is not necessary to remind English workers that in spite of all this, wagedom is a great advance upon slavery. Liberty is worth not only fighting for, but suffering for. And after all, the European worker can choose his own work and his own employer, and can in comparatively rare cases even break the fetters of wagedom and himself become an employer. Indeed, as will be seen, wagedom is a necessary and beneficent transitional system between the serfdom of the past and the freedom of the future. The history of the conversion of the serf into the wage receiver is a proud chapter in the story of civilisation.
But though a necessary state, wagedom is not a permanent state. Signs of a new order of industrialism are already apparent on all sides. The workers are chafing under the unfair distribution of wealth which clearly results from the present arrangement. Even the orthodox economists are trying hard to explain it away, while a few independent thinkers are busy seeking for the foundations of the new order.
And what is it which the orthodox school have discovered as a palliative for the “iron law of wages”? They have established the beautiful doctrine of the “standard of comfort.” This bewitching tribute to sentiment is one of the masterpieces of modern economics. According to this soothing theory each class of workers tends to fix on some standard of living below which it will not condescend to exist. Rather than live at a lower scale of luxury individual members of the class will pass out of existence altogether, or, at least, they will cease to increase and multiply.
The observation on which the doctrine is supposed to be based is that certain classes of workers appear to exercise this self-restraint. Medical men, lawyers, engineers, bankers, etc., do not allow competition so to swell their ranks that their incomes are driven down to the cost of subsistence, or, as a class, anywhere near it. Now, if this is so with highly skilled workers such as those named, it must be so, it is urged, in a less noticeable degree with workers of less skilled grades.
It does not occur to these academic writers that there is a simpler explanation of the observed fact than that of a tacit class-determination not to sink beneath a fixed standard of luxury. A very little reflection will suffice to satisfy us that the main reason why the competition between, say, railway contractors is not keen enough to reduce the whole class to starvation pay is that only persons with a very large reserve of capital to start with can compete at all. The same remark applies to bankers and merchants, and as for lawyers and medical men, quite apart from their State-guaranteed monopoly, a considerable initial outlay is necessary before any one is in a position to enter the lists of competitors, and that initial outlay means sunk capital, so that that which keeps up their average remuneration is not any fixed resolve on the part of these classes of workers to prevent competition from lowering their standard of comfort, but the inability of those not already enjoying such standard to swell the roll of competitors.
“When we come down to that class of work which does not at present require the possession of any capital (beyond the worker's own body) the case is very different. The mere exercise of a little imagination might have saved the professors from falling into this absurd fallacy. Let us suppose that wool-sorters (for example) form the excellent resolution not to allow their wages to fall below five shillings a day. What happens? Trade is depressed; wages fall; wool-sorters are obstinate. Men out of work troop in and offer their services at four-and-six. It is clear there are more sorters than there is wool to be sorted. Now, are we asked to suppose that those who are out of work are to starve rather than to lower the wage of their class? or that those who have work are to retire and starve in their stead? or that both are to stand out solid for the old wage or go on strike? This is only the dream of the unionist, not the fact of real life. But, says the economist, so long as wages remain below five shillings the sorters must refrain from marriage, so as to keep down their numbers. Can he really believe that this is dune by any class of men, any particular class of workers? and if it were—if the wages of wool-sorters could be maintained at a higher rate than the wages of those occupied in kindred pursuits—does he suppose that there would be no flow from the ranks of outsiders into an occupation better paid and requiring no more skill than their own?
The more we examine this sublimated hypothesis the clearer it becomes that in order to give it a shadow of credibility we must at least include the whole of the unskilled workers in a single class, and even hesitate to place in a different class those whose work requires but little skill or original outlay; but when this is done the doctrine falls to the ground. Facts are all against it. And even regarded as a bit of good advice it is simply disgusting in its cruel cynicism.
One of the most pitiful spectacles in the labour controversy is that presented by certain economists who are constantly piling figures on figures to show that the lot of the working classes has materially improved within the last forty years. They seldom choose a shorter period, and never choose a longer. Whoever presents these periodic budgets, they are invariably received by a delighted circle of capitalists with a willing conviction. Vainly do the workers protest that they cannot see it, that the memory of the oldest amongst them fails to bear out the contention; vainly do the socialists and others point out that the improvement is more in appearance than in reality—that three shoddy coats of to-day last no longer than one of the olden times, that rents are higher and meat dearer. The late Mr. Lloyd Jones may knock the whole fabric of “evidence” into a cocked hat, as he did at the Industrial Remueration Conference of 1885. No matter. on the next occasion up comes the brazen image and down go the worshippers in adoration before it, and even trade unionists cry Amen.
It is duseless to point out to them that even if their statements were true of the last forty years their conclusion would not be warranted. The immense strides in the applied sciences, and more especially in the means of locomotion, of quickly-distributed information, and of world-wide commerce, are alone sufficient to account for any observed temporary aberration from the Ricardian law during the period chosen. Let these disturbing causes disappear and the effects must disappear with them. Water is not always level, but when the storm has passed away, and the atmospheric disturbances abated, the waves settle down again into the old plane. Then, again, these theorists forget to compare the wages of the whole working population of to-day with those of forty years ago. They single out a few trades, and those chiefly in which machinery has wrought great and sudden changes. And they forget also to take into account the perquisites and privileges which pertain to the state of decaying serfdom. These are not to be mourned for, because they savour of slavery, but they had their economic value.
But the best answer to the allegation that wages are better than they were, and tend permanently to become so, is this: it is a priori impossible. The mathematical enthusiast who sits up night after night measuring disc after disc, plate after plate, hoop after hoop, in the vain endeavour to square the circle by exhaustive induction, receives his fair share of ridicule. It has been proved a priori that the ratio of the circumference to the radius of a circle is incommensurable, and there the matter ends.
Similarly the tendency of wages to sink to the subsistence level has been demonstrated a priori, and those who seek to disprove it by an appeal to experiment or observation are precisely in the foolish position of the squarer of the circle. They deserve an equal share of derision. To refuse to listen to argument is a dangerous habit of mind, and we should be slow to give way to it, but surely when a man gravely undertakes to prove that the earth is flat, or that two and two make five, or that the ratio of circumference to diameter is exactly 3-14159, or that he himself is Noah and remembers building the Ark, in such cases it is a saving of time to laugh him out of Court, especially if his “proof” extends through some folios of statistics and volumes of calculations based on unverifiable estimates and groundless assumptions.
But not only are workers kicking against the wage system; not only are our “economists ” ashamed of it, and reduced to weaving moonbeams to clothe its hideousness; not only are philanthropists trying to devise some new and better system as a substitute for it, but even men of business and employers of labour are themselves beginning to admit, in deed if not in word, that the present arrangement is not quite all that it should be. Employers as well as employed seem to allow to a certain extent that wages should somehow vary with the rate of profits. This admission, opposed though it is to the fundamental doctrine on which the existing system is based, seems to be nearly universal. Arbitrations between masters and men are invariably conducted on the assumption that if profits are higher wages should be higher also. The sliding scale by which wages are made to vary with the price of the product is another instance of the admission of this new principle. So also are the co-operative societies that are springing up on all sides. In fine, there seems to be floating in the air, as it were, a notion (it can hardly be called a theory) that labour payment should somehow vary with profits. The notion is vague, it owns no parentage, it is associated with no great name; it is perhaps the spontaneous outgrowth of an intuitively far-seeing public opinion, which is so often the precursor of the eventually accepted philosophical theory.
Now, one of two things: either this new principle is unsound, vicious, and arbitrary, or else the whole modern system of wagedom is rotten. There is no alternative. Ricardo's position is unassailable. Wages must and always will gravitate to the inevitable limit in spite of all the temporary tinkerings of trade unions and of the legislature. As well try to elude the tendency of water to find its level as that of wages to oscillate about the Ricardian limit. Let us therefore make up our minds to look forward to the eternal semi-starvation of the great majority of our fellow-countrymen as the necessary consequence of the laws of nature, or else set to work to discover some substitute for wagedom.
Ferdinand Lassalle and some others of Ricardo's more intelligent disciples, finding themselves upon the horns of this dilemma, broke away from the orthodox school and proposed to solve the great problem by abolishing property in the agents of production altogether. This is the socialistic solution. English Radicals have proposed and carried out a number of legislative measures calculated or intended to relieve much of the temporary ill effects of keen competition - measures regulating the hours of labour, the ages at which children may perform certain tasks, the modes of carrying on some trades, the seasons of general holiday-making, etc. A strong impulse has also been given in this country (but more especially in France) to the system of “profit-sharing,” as it is styled. Again, co-operative production societies indicate another solution, and finally, there is the “capitalisation of labour” to be explained in these pages. Let us examine these proposed measures of reform in their order, bearing in mind that all alike assume the instability of the existing order, and the necessity for some change in the relation subsisting between the so-called “employer and employed,” that is to say, between the manual workers and the captains or organisers of industry.
And first, what is the remedy put forward by socialism? and what are the grounds on which it is based? It is impossible to go thoroughly into this great question in the space which can here be allotted to it, but in order that there may be No appearance of misrepresentation it may be well to accept the words and arguments of a well-known English exponent of the doctrine. “Socialism,”1 in the opinion of this writer, “founds part of its disapproval of the present industrial system on the very facts pointed out by orthodox economists. It accepts Ricardo's iron law of wages, and recognising that wages tend to fall to the minimum on which the labourer can exist, it declares against the system of the hiring of workers for a fixed wage, and the appropriation of their produce by the hirer.”
So far the socialist and the individualist reformer are at one. But the former draws an inference which the latter is unable to accept:—
“Socialism declares that natural agents ought not to be private property, and that no idle class should be permitted to stand between land and labour and demand payment of a tax before it will permit the production of wealth. . . . What, then, is the remedy proposed by socialism? It is to deal with capital as it deals with land; to abolish the capitalist as well as the landlord, and to bring the means of production as well as the natural agents on which they are used under the control of the community. . . . Interest on capital has no place in socialism.”
This is plain speaking. Socialists differ among themselves as to the precise nature of the end to be aimed at, and still more as to the means to be adopted for the attainment of that end, but the above summary clearly states that which they may be said to hold in common.
It is but just to socialists to admit that if there are any fallacies lurking beneath the arguments on which their creed is founded, those fallacies are shared and were formulated by the orthodox economists themselves, with whose fundamental principles, as the reviewer admits, socialism does not quarrel. Are there any such fallacies? and if so, what are they? I think there are several.
One is. that the present social system (in so far as it is individualistic) recognises absolute proprietary right as something higher than the salus populi. “The whole nation is at the mercy of a comparatively small class so long as it consents to admit that this class has a right to own the ground on which the nation lives.” But the nation consents to nothing of the kind, and never has so consented. The institution of private property (in land and in everything else) is merely maintained as being the best-known arrangement for ensuring the most desirable and equitable distribution of wealth which is possible to humanity. Nor is private property regarded as absolute right. To begin with, land ownership is unknown to Ennglish law, and in practice the wishes of so-called landowners are not allowed to stand between the land and the general welfare, whether a street is to be cut through a congested district, or a railway through an insufficiently opened up part of the country. All that individualism claims for the landowner or the chattelowner is, that after deducting all national claims — when the true, highest interests of the community have all been considered—the residual powers over land and over chattels shall be vested in some person called the proprietor. By this plan it is believed, after an experience of ages, that more utility will be squeezed out of the thing so “owned ” than could be extracted from it under any known form of communal holding. I think it was Dr. Siemens who said that if he found an invention in the gutter he would give it to some one, he would grant him a patent for it, in the certainty that by so doing, by making it private property, it would have a better chance of coming to perfection and benefiting the community than if it were left to such community in common. And the same argument has since been applied to land ownership by Lord Bramwell. How many of the greatest inventions of modern times would have been perfected if there had been no patent law? Whenever anything whatever is owned by two or more persons having diverse interest in it, some of its utilities instead of being enjoyed by all are actually enjoyed by none. Every one's experience must bear witness to this.
It is not only the individualist who holds this view. Some of the most advanced statesmen in this and other countries contend that property in land stimulates the energies of the workers and increases enormously the productivity of the soil. “Peasant proprietorship ” has been the cry of the most zealous land reformers of the century, of whom J. S. Mill was chief. Occupying ownership is now the cure put forward for the incurable by both political parties in Ireland. Socialists consistently denounce it. But even Mr. Henry George protests against any further land nationalisation than a heavy land-tax, for the same reason, viz. that separate ownership in land stimulates production. In fine, rent is the cheapest form in which payment for certain necessary services can be made by the community. Any other mode of obtaining those services would be comparatively extravagant. And the same observation applies in part to the payment of interest on capital of other kinds. It would be impossible for authors to prove an "abstract right" to a monopoly of the copy of their works. All they can show is, that the community gains more than it loses by granting them what is called “copyright.” The hostility of socialists towards absolute rights which have no existence reveals a weak place in their philosophy.
Another socialistic fallacy (though it is not shared by all socialists) is that co-operation is socialistic. It is nothing of the sort, by their own definitions. Co-operation is the origin and sustaining cause of civilisation. There are two kinds, voluntary and compulsory. The latter only is socialistic. In voluntary co-operation there is nothing whatever of socialism. Trade unionism as such is not socialistic. It has frequently adopted socialistic methods, and even now in this country supports socialistic measures, but in itself it is merely voluntary co-operation. This mistake is so commonly made that it is necessary to expose it at every turn.
One of the chief of the socialistic fallacies is that all wealth is the result of labour. It is further held that the value of everything is proportionate to the labour that has been bestowed on. it (two contradictory propositions) and that therefore the labourers have a moral right to all existing wealth, an inference which betrays an amount of logical ineptitude hardly to be expected of serious thinkers.
These three remarkable contentions may be considered together. To begin with, all wealth is not the result of labour. Wealth is everything which is useful to man. Thus air and water are wealth. But it is unfair to impose a definition. Clearly by “wealth” socialists mean that which is useful and also valuable (that is, rare enough to be the subject of contention). So that we have only to add the quality of rarity or difficulty of attainment to any useful thing and straightway it becomes a product of labour. Some defenders of this article of faith seem to consider their case proved if they can show that some slight amount of exertion was necessary to the creation of the thing cited, or even to its enjoyment. If valuable timber is washed down a swollen river it has to be dragged out of the water and cut up before it is useful. If a savage gathers a ripe peach he must reach out his hand, or walk to the tree and open his mouth, and so on. If a large diamond is found by a digger on his first day at the fields, we are told not only that he has to pick it up, but also that we must remember how many other diggers have been toiling for weeks and found nothing.
Of course, apart from all this rubbish, the truth is that a large proportion of valuable things contain a large element of labour in their composition, and almost always some small element of original wealth. A ruby ring contains much original wealth and comparatively little labour. A violin contains much labour and very little original wealth. Other things vary in their composition.
But this abstract theory, baseless though it is, would not deserve mention were it not, firstly, that it is a legacy (a veritable damnosa heditas) from Ricardo, and, secondly, that it has been made the foundation of the ridiculous practical contention in connection with which it is always mentioned, to wit, that all wealth being the result of labour, and labour only, the manual workers of to-day have a moral claim to all wealth.
Now, if we admit that by far the greater portion of wealth contains a vastly predominant proportion of labour element, which is the fact—nay, if we go so far as to admit that all wealth is entirely composed of the labour element, which is not the fact—how docs this affect the practical inference? A century ago, let us suppose, there were two workmen, Smith and Brown. Smith was a good, steady, and industrious worker; Brown was an idle fellow. Smith managed to put by a little money and to leave his son enough to set himself up as an employer. Smith the second inherits his father's good qualities, and converts his competency into a fortune. Brown leaves nothing, and Brown the second follows in his father's footsteps. Now comes the third generation. Smith the third begins life as a wealthy man. He has no occasion to work with his hands. The labour of his ancestors enables him to live in idleness if he chooses, instead of which he applies himself to the study of the sciences, or the tine arts, or politics. He invents an ingenious labour-saving machine, or makes discoveries in astronomy or chemistry which add to the world's stock of knowledge; or he composes a fine epic or a grand oratorio; or he takes a seat in Parliament and labours for the freedom and elevation of his fellow-countrymen. Brown the third begins life as an unskilled labourer: he digs and wheels and carries. Suddenly up springs the socialist. “This won't do,” says he; “you, Brown, have a right to Smith's wealth; it is all the result of labour, and you are a labourer, while he is not; this anomaly must be put right.” Could any contention be more absurd or more unjust? The fallacy consists in concluding that, because the creator of wealth has a right to the fruits of his labour, therefore existing labourers have a right to the fruits of past labour. Xow, the missing link in the chain of this reasoning has not altogether escaped the attention of some of the more logical thinkers of the school. “We admit.” say some of them, that if Smith the first had gone on living and working for a century, and had himself amassed the whole of the fortune, he would have been justified in resting on his oars and enjoying the fruits of his work: but instead of that, this fortune lias come into the hands of Smith the third, who has never done a stitch of bread - winning work in his life. This is unjust to society, upon whom he relies for sustenance.''
It is clear that this further contention strikes at the root of gift and bequest. According to this view it logically follows that no man has the right to enjoy the fruits of another man's labour even with the consent and by the desire of that other, not even though the two men are father and son; and the reason alleged is that a man who appears to be living on his capital is in reality living on the labour of those around him. At this point socialists are divided in counsel. Some would (most illogically) permit gift but prohibit bequest. They fail to see the impossibility of distinguishing in practice between the two. Of donatio mortis causa they have probably never heard, nor of the numerous devices by which legacy and succession duty have been eluded. But perhaps these questions are a little too practical for the bulk of that somewhat dreamy school.1 However this may be, those who would prohibit either gift or bequest, or both, base their action on what may be styled the socialist fallacy par excellence, viz. that interest is necessarily paid out of the fruits of the labour of to-day. On this point I must be pardoned for again quoting from our Westminster reviewer:—
“If a man possesses three or four thousand pounds he can invest them, and live all his life long on the interest without ever doing a stroke of honest work, and can then bequeath to some one else the right to live in idleness, and so on in perpetuity. Money in the capitalist system is like the miraculous oil in the widow's cruse—it can always be spent and never exhausted. A man in sixty years will have received in interest at five per cent three times his original fortune, and although he may have spent the interest, and thus have spent every penny of his fortune three times over, he will yet possess his fortune as large as it was when he began. He has consumed in commodities three times the sum originally owned, and yet is not one penny the worse. Other people have laboured for him, fed him, clothed him. housed him, and he has done nothing in exchange.”
Here truly we have the socialist fallacy in a nut-shell. The illustration is a good one. Capital is compared to the oil in the widow's cruse in the story. A truer comparison could not be found. Capital fructifies. A man who lives on the interest on his capital costs nobody else anything whatever. If he and his capital were annihilated to-day nobody would be any the richer to-morrow. If he lived on half the interest on his capital his wealth would go on increasing year by year at no cost to any one. It is not true that “it can only be increased by other people's labour being left unpaid for while he is paid twice over for his.” It is not true that it can only be increased by other people's labour being left even partly unpaid for. It grows of itself like a tree.
Again, I find myself at issue not only with socialists, but with our “orthodox political economists.” When the socialist triumphantly asserts that “capital always has been, and always must be, obtained by the partial confiscation of the results of labour,” there is not a single economist living or dead who can be called to refute the statement. All their writings without exception, from Adam Smith downwards, either imply the conclusion or express the premises froni which the conclusion must logically follow. There is no escape. The reasoning is faultless. Marx has strung the links together in a chain without a flaw. Yet what is the consequence of accepting the proposition? Two courses of action only are open to us. We may go on on our present lines, recognising the fact that capitalists are robbers living on the extorted toil of others, that le propniéte c'est le vol, or we may abolish property. Political economists, which shall we do? You leave us no alternative. All capital you tell us is the result of labour arid abstinence. Xow, abstinence cannot create; it can leave unconsumed, but it cannot increase what exists. Therefore, all capital whatever, on your own showing, must be the result of labour. If so, clearly the increment of capital which results from a successful industrial operation, and which you are pleased to call profits, must really be the result of labour alone. Capital left to accumulate at interest must increase, on your own arguments, by having laid upon it layer after layer of the fruits of labour-the labour not of the owner of the capital, but of other people.
Leaving our orthodox friends to get out of the mess as best they can, let us pass at once to the true solution.
Capital fructifies. On the average in this country the total wealth employed in production (not counting the value of the thirty millions of workers at slave prices) increases annually by about three per cent. In order that wealth may increase it is necessary that, instead of being enjoyed, it should be destroyed-that each portion should be thrown into the crucible, so to speak, together with other portions. The compound resulting from the synthesis is worth either more or less than the original elements. If less, the process is not likely to be often repeated; if more, the increment of value is called profit. One of the elements cast into the melting-pot, not without risk, is labour force. The proportion of this element is sometimes large and sometimes small. Whoever undertakes the risk of casting bread upon the waters must suffer the loss, if there is a loss, and must pocket the profit if there is a profit. This seems just, and its expediency is demonstrated by experience. Naturally profiting by experience, cautious men engage in those processes which have heretofore resulted in a profit, and therefore the balance on all the operations in the year is a favourable one. On the avcraye every £100 worth of wealth employed in production rather than consumption comes" out worth about £103.1 Clearly, if it were a mere “toss-up ” whether profit or loss would accrue, the average would be nil: wealth would be stationary; capital would not be invested: and the national consumption would destroy the whole of it within a few years.
Now, if an idle man, not caring to take even the trouble to look into the chances of his investments, were to divide his capital up into as many fractions as there are industries (a hypothetical supposition, of course), and to invest one fraction in eacli industry, he would lose on some ventures and gain on others: on the balance, the chances are that he would gain about three per cent on the whole lot, taking good and bad together. Now this operation of investing without risk (i.e. with no greater risk than is involved in trusting to the national sanity) is called “putting out at interest.” By investing on what is called absolute security we are really investing at average national profit. Economic interest is average profit-average profit after the elimination of the element of risk.
Any increased gain over and above interest on capital is the reward of, not abstinence, but risk. Business men as a rule write off a certain part of gross profits as interest, because they well know that such portion does not represent the reward of risk or of skill in planning the investment, but merely the normal average growth of capital. This custom of business men has led political economists to invent the most fantastic and misleading definitions and explanations of interest. No wonder our captains of industry make common cause with the working classes in denouncing and despising the methods and conclusions of this pseudo-science. Practical men have long since ceased to attach any importance to the slip-shod twaddle of those who pose as the theorists of the art of wealth-producing: but, oddly enough, the socialists have hastened to detect and take advantage of their convenient and suitable vapourings and sententious dogmas. Amongst other handy weapons they have seized upon the “orthodox ” definition of capital. “What is capital? ” asks the socialist reviewer, “and how has it come into existence ''' The answer is supplied at once by the ” orthodox.'' “Capital is any wealth which is employed for profit. On this there is no dispute.” Is there not? A glance at the conflicting definitions of a dozen of the chief representatives of political economy would somewhat shatter this comfortable faith. Why, Mill, Say, Fawcett, M'Culloch, Bastiat, and a whole crowd of other accepted authorities all give definitions, and no two an alike. I refer not to the wording but to the sense and meaning. However, Senior is chosen, and he says, “Economists are agreed that whatever gives a profit is called capital.” In the first place they are not agreed, and in the second it would not matter if they were, as the proposition is unintelligible. What does he mean by "gives a profit “? Does he mean to say that those particular things which, having been employed for the purpose of production, actually have resulted in a profit, were or might have been called capital, while similar things employed in a losing speculation were not capital? Or does he mean that certain general classes of things which are fit to be employed in production are capital? Or does he (with Fawcett) mean that things which are intended to be devoted to production, whether suitable or not, by being exchanged for suitable things, are capital? Or does he mean anything at all? 1 suppose the wind that propels the ship or drives the mill-sail "gives a profit.” Is it capital? Money spent in sinking a shaft in the expectation of finding coal, and finding none, gives no profit. Is it capital? The time spent in analysing such "definitions " as this and the like of it certainly gives no profit. I must be pardoned therefore for stating dogmatically what I have shown in the foregoing chapter that capital is all that wealth whose value is due to the demand for it as an element of production, and not for the purposes of direct consumption. It follows that labourers (or labour force, if preferred) are themselves capital, and every labourer is himself a capitalist to the extent of possessing a valuable machine whose market value is due to the demand for workers as agents of production.
This effectually disposes of one logical objection to supplanting wage payment by any form of profit-sharing. “Capital and labour being two distinct and, in a sense, opposed agents of production, there must be something wrong about a practical plan which confounds them together in respect of their remuneration.” And if we admit the truth of the premiss we cannot well refuse to accept the inference. If capital and labour actually are distinct agents of production, as political economists assure us, then there is something unphilosophical in classing them together for the purpose of apportioning their respective shares in the new product. In that case labour must be content with its wages, and capital must take the whole of the profits, and the situation resulting is the one we all see before us, and which is so graphically described by Mrs. Besant.
'' Here is this unpropertied class, this naked proletariat, face to face with landlord and capitalist, who huld in their grip the means of subsistence. It must reach those means of subsistence or starve. The terms laid down for its acceptance are clear and decisive: ' We will place within your hands the means of existence if you will produce sufficient to support us as well as yourselves, and if you will consent that the whole of your produce, over that which is sufficient to support you in a hardy, frugal life, shall lie the property of us and of our children. If yon are very thrifty, very self-denying, and very lucky, you may be able to save enough out of your small share of your produce to feed yourself in your old age, and so avoid falling back on us. Your children will tread the same mill-round, and we hope you will remain contented with the position in which Providence has placed you, and not envy those born to a higher lot.' Needless to say, the terms are accepted by a proletariat ignorant of its own strength, and the way to profit is open to landlord and capitalist.”
Having examined the socialist remedy and the arguments on which it is based, let us now turn to the neo-radical remedy. The neo-radieal is of the thoroughly English type of thinker who never accepts any principle except “to a certain limited extent, don't you know.” He is always pointing out that “a line must be drawn somewhere,” but where he never seems to know or care, so that it is drawn somewhere. He believes in self-help and laissez-faire “to a certain limited extent.” He also believes in State interference and socialism “to a certain limited extent.” He is the incarnation of the spirit of compromise, even where compromise is impossible. But being the resultant, so to speak, of robust English common sense and of crass ignorance and lopsided education, he naturally finds himself in an increasing majority in the country along with the successive passing of the three great Reform Acts. Consequently we have to deal with the neo-radieal remedy not as the consistent and well-thought-out nostrum of doctrinaires, but a the half-hammered-out jumble of conflicting schemes and “dodges” of practical politicians. Of course, if these were confined to paper, no one would give them so much as a passing glance. One would as soon think of catechising Hodge as to his theory of the Cosmos, as of inquiring into the political principlis of the neo-radical. the muddle-headed, knee-deep State socialist. He has none, of course; but he has succeeded in carrying into effect what we must, 1 suppose, call his ideas. We have had some half century of increasing State socialism, not in the form of a creed to addle the brains of fanatics, but in the form of actual operative legislation—of practical politics. Perhaps on a survey of all these odds and ends of "beneficent legislation “one is able to extract something like a pervading notion, viz. the principle of attacking evil on the spot wherever it shows itself, whether in the form of want, of misery, of crime, of discontent, or of sin. If a hole appears fill it up; if an excrescence shows itself cut it off. Direct local application, as opposed to general hygienic treatment, is the nee-radical's watchword. '' Are you suffering from headache. '” he asks, '' then have a pick-me-up." "Is that a wart? Cut it off." “There is a rash on your chest. A cold douche will throw it in and cause it to disappear.” Arid so on. He never inquires whether you are sutl'ering from bad diet or unhealthy habits of life, or whether all your ailments may not be effects of the same cause. He has assumed the name of Radical on the Incus a non luccndo principle, because he never goes to the roots of the malady. "With him to arrest the symptoms is to cure the disease. If some parents send their little ones too young into the dark mines and clattering factories, he sends inspectors to turn them out again. It never occurs to him to inquire what dire necessities have concurred to drive parents to such cruel extremities, or whether, if due to sheer hard-heartedness, the demoralisation of the workers may not be attributed to some deep-seated social disorder. If parental love is not strong enough to ensure the welfare of the children he has no hesitation in substituting State love for it. The effects of weakening the family affections are unknown to him as recorded in the history of the past. He has probably never even heard of Sparta. As to its probable effects in the future they do not present themselves to his frigid imagination. Naturally, if he is not afraid to meddle with the delicate framework of family life, it is not likely that he will keep his hands off the somewhat rougher systems of industrial co-operation. Every trade has some screw loose; growing organisations take time and experience to attain to perfection. But the neo-radical has no patience to wait: he will cure the defects at once himself. Are sailors occasionally drowned at sea? It is clearly due to overriding. He will cure all that, so he takes his bit of chalk and draws his load-line. “Now,” says he to the ship-owner, “you may not load above that.” A few years elapse; the new legislation has been in full working order all the time, and lo. ' the number of seamen lost at sea has increased. What is to be done? Oh ' it is all as plain as a pike-staff to our neo-radical: it is over-insurance that does it. "We must pass a short Act of Parliament to stop that. It is a noteworthy fact that if the matter to be dealt with is shipping, it is sure to be taken in hand by some one (perhaps a Derbyshire coal-owner) who has never seen the sea in his life. If factories want looking to, the work is undertaken by some noble earl whose experience of factory work is limited to being “shown round the premises,” as Catherine of Russia was shown round the happy village greens during the famine. If shop hours want regulating the proper neo-radical for the job is some barrister out of work. The education of the people falls to the care of some self-made lace manufacturer, whose own education reflects more credit on himself than on his teachers. I well remember that the demand for more mines regulation legislation was most strenuously advocated by a London journeyman tailor; while most of the happy ideas for reforming agricultural relations emanate from Birmingham.
The reason for this strange allotment of duties is obvious. The man who knows most about the business to be reformed, knows too well the difficulties to be overcome and the impossibility of effecting the end aimed at. The young subaltern, who bungles his theodolite and votes fortification stultification, would undertake the conquest of China with a light heart. Have you never heard a little boy of ten summers say what he would do if he found himself surrounded in a wood by a gang of robbers? If not, ask one, and you will find the germ of neo-radiealism: it is a compound of self-confidence and blissful ignorance.
It is usually taken for granted that neo-radical legislation, whether good or bad for the country as a whole, is at least an unqualified boon to the wage receivers. Without inquiring into the general results of such measures, let us see how the working classes are affected by them. To begin with the Poor Law, apart from its possible utility as a safety-valve against revolution, there can be no doubt that nothing operates with so deadening effect upon charity as compulsion; and, after all, true charity is sometimes good for both giver and receiver.
But neither should the demoralising effects of State charity upon its recipients be lost sight of. In the present state of the Poor Law these effects are somewhat toned down, and for a vivid and unmistakable illustration of the consequences of pauperisation we should refer to the times when the principle was carried out consistently, that is to say, before 1834.
The famous 43d of Elizabeth had been amplified by the passing of East's Act in 1815, under which relief was granted by the justices as a matter of course on the mere application of the pauper or professing pauper. "The administration and operation of the state of the law thus established quickly absorbed so large and so increasing a part of the public resources, and brought about so prevailing an amount of idleness, improvidence, insolence, turbulence, and vice, that nineteen years from the passing of East's Act it was found necessary to pass a large remedial measure in order to prevent the destruction of lauded property, the diversion of capital from the cultivation of the land, and the utter demoralisation and pauperisation of the great mass of the population-to prevent, in short, national ruin."1
The same writer expresses the opinion that the Report of the Poor Law Inquiry Commission, together with the evidence appended, deserves to be read by every one who wishes to learn the manner in which a law of compulsory relief affects the material and social welfare of the poorer classes. In the words of the Report," It appears to the pauper that Government has undertaken to repeal in his favour the ordinary laws of nature; to enact that children shall not suffer for the misconduct of their parents; that no one shall lose the means of comfortable subsistence, whatever be his indolence, prodigality, or vice: in short, that the penalty which after all must be paid by some one for idleness and improvidence is to fall, not on the guilty party or on his family, but on the ratepayers.”
Nor does all this apply only to a time when the principle of compulsory charity was carried to an inordinate extreme. “Still,” to follow Mr. Pretyman, “the man who might find employment if he felt that it were necessary to his subsistence, or the man who is reduced to want by self-indulgence, can tax the public for his support. Still the woman who has parted with her virtue can cast upon the ratepayers the burden of maintaining her offspring. Still men who are in receipt of permanent parish relief marry with the result that child after child is born and reared in a state of pauperism, and frequently to an inheritance of disease. Still is early and improvident marriage encouraged by the law. Still the husband can, by deserting his wife and children, throw their maintenance upon the public.”
Next in importance to the State supply of the necessaries of life to those who are individually in a state of absolute destitution conies the supply at less than cost price of certain necessaries and commodities, and even luxuries, to the poor as a whole class. It is a fact, for instance, that in some poor neighbourhoods like the East End of London, water is supplied at less than cost price. It is obvious that the water companies are compelled to charge their other customers more than they otherwise would in order to cover this loss. The argument put forward in defence of this course is a very strong one, whether we regard it as sufficient or not. It is said that if the poor have to pay for water ad valorem they naturally economise as much as possible, and more than is consistent with the sanitary condition of the neighbourhood. If so, it may possibly be a wise insurance on the part of society to supply the water at less than the cost of delivery. But the inhabitants of these poor localities must not suppose that they obtain any pecuniary gain by the arrangement.
Similarly with cheap trains and cheap dwellings, which may be considered together. Whenever the optimists begin to glory over enhanced wages “during the last forty years.” the workers (especially London workers) very properly reply: Yes, but look at the enhanced rents. It ought to be obvious to the workers that if an employer wants hands at a particular spot he must pay such wages as will enable his workpeople to pay the rent demanded at or near that spot, or else to pay the railway fare from a more distant and cheaper locality. If rents in the neighbourhood come down, down come wages. If by competition, or improvements in mechanical knowledge, or by compulsory Cheap Trains Acts, or any other cause, railway travelling to and from the spot is rendered cheaper, down go wages. That neo-radicals should offer Artisans' Dwellings Acts to the people is intelligible enough, but that they should be backed up by intelligent socialists who accept the “iron law of wages,” and wlio therefore must know that the employer will necessarily gobble up all that his workpeople may appear to gain from low rents or cheap trains, passes all understanding. However, so it is. To the workman himself who will but consider the question in the light of common sense it must appear abundantly evident that so long as the manual workers put up with the wage system, all neo-radical sops of this nature are the merest mockery. To be plain, the employer of labour, who votes for measures of this character in the House of Commons, while he is offering fine phrases to his victims with his tongue in his cheek, is in reality merely offering himself a handsome present at the expense of the nation. But if he thus pleases the working-class voters, and puts money into his pocket at the same time without incurring the censure of any one, who shall find fault with him? He is asked for bread and he gives a stone; he is asked for an egg and he gives a scorpion; but he gets the donee's best thanks for his generosity, and pockets a round sum into the bargain. Verily make to yourselves friends of the mammon of unrighteousness, i'or they know on which side their bread is buttered.
When we come to what may be called State-doled luxuries the advantage to the working classes becomes still less apparent. Free libraries, free picture galleries, free museums, all paid for out of the State treasury or out of the rates, are probably a boon to those who have time and leisure to make ample use of them. But whether the Northumbrian miner or the Galway peasant ever receives his quid pro yun for the hundreds of thousands of pounds raised by taxation and spout on "pictures of national interest" is a question which the miner and the peasant must answer for themselves. It may be that membership of a community which possesses such treasures, even without the hope of ever catching a glimpse of them, is in itself a sufficient reward.
I forget how much over eighty thousand pounds was spent by this nation, with its million paupers, on the fiasco expedition to the North Pole a few years ago under Captain Nares. But all-important as scientific exploration and experiment undoubtedly are, it is a question whether.-if those who have had the necessary educational opportunities to interest themselves iii these matters are not numerous enough or public-spirited enough to find the sinews of war out of their own pockets without exacting a contribution from those who are struggling to put bread into their children's mouths,—it might not be as well to let such inquiries stand over till the rich are in a position to dispense with the assistance of the poor.
Apart from these considerations it may, I think, be affirmed that aii artificial supply—that is, a supply which is not in response to a natural demand—has a tendency to induce a morbid appetite. For example, “in nearly all the free public libraries prose fiction is in most demand, religion in least.”1 The latter part of the indictment is serious or not, according as the people of whom it is true is a professedly religious people or not; but in any case it seems a sad waste of public money to provide the lazy with a mental pabulum which, in the words of Sir Theodore Martin, “brings creeping paralysis upon their brains, by steeping them in the trivialities of flimsy magazines and catch-penny novels that grow up and perish like the summer fly.”
Our picture galleries have hardly yet come so far under the like influences as to become depraved by pandering to the tastes of the listless, but the time cannot be fur distant. As for free museums, one might almost as correctly speak of free out-door winter midnight services. They are not popular. As a frequent visitor to the Natural History Museum at South Kensington I am bound to say that, considering its rich and varied treasures, and the care which has been bestowed upon them, the emptiness of its well-arranged galleries is simply deplorable.
In favour of public State-aided baths and wash-houses the same argument applies which is urged on behalf of cheap water —water under cost price—namely, that they are safeguards against dirt and disease. This may be so, but the time will come in which the respectable poor will resent the implication that, unless they are washed at the expense of their richer neighbours, they will remain dirty. Similarly their self-respect will rebel against such degrading charity as Cheap Trains Acts and Education Acts confer. Clearly, if certain third-class passengers are carried at less than the normal profit on railway investments, the remaining passengers must pay the balance- not the shareholders and not the nation. The indirect effect may be to restrict the operations of the company, but directly the only effect is to compel one class to pay part of the fares of the other class.
What are the arguments for State education? The first is that education is good, which is true or not according to the meaning of the word “education.” If it means teaching Greek to a child who will soon want to know something of agriculture, or teaching plumbing to one who is going to be a solicitor's clerk, or any similar substitution of that which is good for that which is better, then I should say decidedly that education is a bad thing. Whether the School Boards provide the suitable or the unsuitable at the present time may be an open question, but we must remember that the State department as now constituted is young and fresh, and like all new brooms it ought prime facie to sweep- clean. The very worst quality of razor shaves well at first. Time only discloses its inferiority. At present in line with the more advanced thinkers, what will it be in a hundred years, when, like all State institutions, it has fallen behind the age—when it has been fastened upon by parasitic officialism, and represents the “authorised ” creed of a bygone generation? Have we forgotten that the State has undertaken the education of the people before? that a tax of one-tenth of the produce of the land was imposed for that purpose? that the education provided was “free and compulsory,” just as hanging is at the present day for all who are duly qualified? No doubt in the days of Charlemagne and Alfred such education was up to the level of the age, but whether it still fulfils all the requirements of an educational curriculum is a question which is answered by the establishment of a new and improved national organ.
The second argument for State education is, that the supply of the desired quality through independent channels is not forthcoming; that the instruction administered to the children in the voluntary schools was unduly admixed with effete matter. There is much truth in this, but the neo-radical action based on the observation was hasty and ill-considered. The mind of the country was steadily expanding, and this well-meant attempt at compulsory evolution will probably in the end operate rather as a check than as an impetus.
But a third contention implied in State education is that even when supplied in good condition the demand for education is restricted. Having artificially created a supply, the neoradical proceeds to create an artificial demand. When provided by the State, the “lower orders ” will not purchase it at cost price. Such is the weakness of parental love that parents will not confer upon their children what kind neo-radicals consider good for them. What is to be done now? Clearly State love must be substituted for parental love. Parents must be coerced to supply their little ones with the approved mental food. Education is made “compulsory.” A little experience soon convinces our philanthropists that it is not so much a lack of parental love as a lack of parental funds that stands between the children and the good things provided for them. Education must be free, that is to say, everybody must be educated for nothing, which means, being interpreted, that everybody must pay for everybody else's education and get his own gratis.
When education has been “free and compulsory ” for a few years it will be found that a large number of persons do not want it at any price. They will rebel against compulsory attendance just as they now rebel against compulsory fees. They can in many eases provide a better and more suitable education for their children from their own point of view than is provided by the State schools, and they will prefer to bring them up as well-trained agriculturists, or plumbers, or farriers, rather than to have them trained as clerks in the Government mould with the ignominious condition imposed of accepting compulsory alms. The strongest argument in favour of all these forms of State charity is that if the classes thus insultingly pauperised do not see the insult, the act loses its contumely and becomes a mere act of patronage. It is sometimes a relief when the respectable man whom one has diffidently “tipped,” pockets the tip and the insult, touches his hat, and expresses his thanks.
The next class of nee-radical State interferences, ostensibly in favour of the wage receivers (though they glide imperceptibly one into the other) embraces compulsory rest, compulsory insurance, and compulsory security. The first is provided for by a number of Acts relating to Factories, Bank Holidays, Shop Hours Regulation, Sunday Closing, Lord's Day Observance, and the like: the effect of which is to prescribe fixed limits to the working hours of women, children, and young persons, at all times and in all occupations: and in the case of men, on specified days and in certain occupations. Indirectly, of course, the Factory Acts have the effect, by turning out the female hands, of compelling owners to close their factories, and so to force the full-grown men to rest, if not to be thankful. Whether they have cause to be thankful must depend on the financial position of the worker. As a specimen of the light in which workmen as a class regard compulsory idleness (or say rest) I will quote one letter written by a dock labourer to the Editor of a Radical newspaper:—
“sir—In your ' Topics of the Day' of last week you refer to the closing of the banks at two on Saturdays, and make some remarks about the bank employes, in which I quite agree; but what I want to call your attention to is another class of employes, and that is dock labourers, and how it may affect them. I remind you that the docks are under the control of the Customs, and I am told that it is being mooted to extend the favour to the Customs. If they get it, how will it affect tens of thousands of poor dock labourers ? It is only the permanent staff in the docks that get paid for holidays, which does not amount to more than 5 per cent, the other 95 being paid by the hour. At the present time eight hours per day is the time for work, but after this month seven hours per day for the next four months. It may seem a small matter, but is a great matter to those concerned in it. If a man is fortunate enough to get a day's work in the winter, he gets 2s. lid., and should the docks close at two o'clock, he will only get 2s. Id., so that it will affect the whole of the dock labourers (extra men) of the country.
And now I will say a word as to how Bank Holidays affect dock labourers. In the past the Act of Parliament got it for the banks first, after which it was extended to the Customs, and so closed the docks, and closed the dock labourers' mouths—for it is little they get to put in them on those days. And while I am writing I will mention the extra holiday the Customs have, viz. the Queen's Birthday, which is supposed to be a day of rejoicing, but I can assure you that it is a day of moaning and cursing amongst the class I am speaking about, and to which I belong. I hope this will meet the eye of some of your M.P.'s, and that they will give us a little consideration. I am, Sir, yours, etc. A DOCK LABOURER."1
The writer naturally makes the mistake of supposing that the 5 per cent of employes on the permanent staff “get paid for holidays.” This is a common error. Work is paid according to its value; and if fifty days in the year are added to the compulsory holidays, one-seventh is struck off the pay of the workers.
It seems hard that in a country where an owner of dumb animals can be prosecuted for overworking them, a parent or an employer should be allowed to overwork human beings. And this is of some force in defending these Acts so far as children and young persons are concerned; though the implication must be distinctly borne in mind that working-class parents are cruel enough for the sake of gain to overwork their children. I do not believe it. The class as a class, so long as wagedom lasts, is bound, parent and child, to do more work, or rather to work for a longer time, than is good for health of mind or body; but I deny that the working classes, as a rule, allow their children to be overworked from the standpoint of their permanent necessities. In any case, to remove the care of the children from the shoulders of parents on to the shoulders of the State is to still further weaken the parental sense of responsibility. A little good may possibly accrue to the rising generation, but the ultimate and permanent effect must be to demoralise and degrade the race.
There are certain other indirect evil consequences of this kind of legislation which the neo-radical has clearly overlooked. It is often pointed out that if the working hours of English operatives are shortened, the foreigner will have an immense advantage in competition. To which the reply always is. that the labour question is an international one, and that if all civilised nations put a compulsory limit on the hours of work no one would lose. Meantime, apart from the untruth of this last statement, while the neo-radical is in a hurry, other nations are in no hurry, and the consequence is that whether the labour question should be international or not, the foreigner is at present taking advantage of the short hours of the British workman. I have already pointed out that I regard even those hours as too long, but I maintain that they cannot be shortened wisely under a system of labour payment which offers no inducement to make up in intensity for what is lost in time. A free English workman under a system of capitalisation could do in six hours more than a foreign wage-slave would do in twelve. Meantime he works in the same way and the country pays a hundred millions a year for his extra two hours' rest a day.
Why, again, in these days of electric lighting should capital rest in the night time? Journalists, actors, some cab-drivers, railway servants, postmen, policemen, and hundreds of others do the major portion of their work when the rest of the world is snoring. Why not some factory operatives? In the mines and the furnaces where there are no women, and where consequently the Factory Acts do not apply, we have a succession of shifts. It is not proposed that the hands should work twenty-four hours a day, but there should be three shifts of eight hours each; by which the dream of the rhyming workman would be realised:—
This consummation (with the exception of the last item) has actually been reached in benighted and despotic Russia, where no foolish kindly -intentioned Factory Acts interfere with private enterprise.
Again, are the following suggestions worth a little reflection? I have no intention of entering into a theological controversy, but I suppose few persons have conceived the idea of calculating the cost in pounds, shillings, and pence of Sunday, as it is at present observed in this country. Such a calculation is not a very difficult one, while it presents several features of interest.
Before coming to figures, however, let us pave the way by an inquiry into the nature and foundation of our English institution of Sunday observance. Two reasons are commonly alleged. The first is, of course, the religious one that to rest on the seventh day is a divine ordinance; the second is that workers of all classes are all the better for a rest or holiday once a week. With respect to the first, every one knows that according to the authority the day appointed to be kept holy is the Saturday or Jewish Sabbath; nor is there any passage in the Testaments which can be adduced in support of the substitution of the first for the seventh day.
Without going farther into this part of the question probably most enlightened Christians will admit that what is required is that every person shall set apart one day in the week as a holiday, into the mode of spending which there may be differences of opinion. Some persons will go farther, and contend that one day in the week is too little for some kinds of work and too much for other kinds. For the present purpose I may accept the uniform system of one day in seven. Now if it is immaterial, even from a Christian point of view, upon which particular day of the week we fix, it is clearly of equal unimportance whether all of us fix upon the same day or upon different days.
With respect to the second or hygienic reason above referred to, these observations apply with even greater force, for it obviously cannot signify whether we rest on the first, fourth, or seventh day, provided we get the amount of recreation required.
Now what again, if any, would accrue from the establishment of seven Sabbaths in the week? in other words, from a division of the days of the week among the labouring classes in suchwise that one-seventh of our workers are always enjoying a holiday. Some would have the Mondays, others the Tuesdays, others the Wednesdays, and so on throughout the week. It may seem at first sight that such an arrangement would make no difference to the work done or to the value of the work, but this is a mistake. It is true that no more hours' work would be performed than now, but the labour would be both better paid and more productive. And the reason is this. Under the present system we give our labourers a weekly holiday, and we also give our capital a weekly holiday—our engines, our warehouses, our stock our plant, etc. This is pure waste,. Not even the most scrupulous Sabbatarian will maintain that an engine ought to rest for one whole day in the week. Now, roughly speaking, capital may be said to contribute two-thirds towards production against one-third contributed by labour (in more correct parlance, the non-human capital contributes about twice as much as the human). The immediate effect of depriving this non-human capital of its rest-day would be virtually to increase its quantity by one-seventh. Thus, the present proportion between the values of the two elements of production would be modified. By the law of value relating to co-elements we see that this would bring about a considerable rise in the price of labour. The law is as follows: Other things equal, a rise in the value of one co-element is followed by a. fall in the values of all the other co-elements, and a fall by a rise, but not necessarily at the same rate. Now, labourers and machinery, etc., are co-elements; the old theory of rivalry has been long ago exploded. Hence, together with a cheapening of production all along the line, we should have the equally satisfactory concomitant of a rise in wages. This stimulated demand would eventually call into existence an increase of population equal to about one-seventh of the number of the labouring class. A more immediate result would be an increase in production, equal to about two-thirds of one-seventh of the present amount, in round numbers an increase of one-tenth, or over a hundred million pounds a year—a sum sufficient to provide the whole of the revenue without any taxation whatever. England can therefore at any moment virtually abolish taxation by the simple expedient of distributing the Sabbath all over the week. We may here mention an incidental advantage of this reform. It would reconcile the possibilities of our modern civilisation with the absoluteness and rigidity of the old institution. At present it is matter of common observation that Sunday is a holiday rather in name than in fact to large sections of the community. Postmen, railway officials, policemen, hotel servants and domestics generally, with many more, can hardly boast of fulfilling the letter of the law. But under the proposed system all members of all classes would be enabled to enjoy a complete holiday once a week, without in the least inconveniencing the remainder of the population. We should be able to send and receive our letters as usual in the metropolis without misgivings as to the postman's sufferings. We should not be left in ignorance of accidents and the dying wishes of distant friends, for want of telegraph accommodation on the Sunday; nor would the trite argument continue to apply against opening museums and galleries on the Sunday, based on sympathy with overworked officials. To sum up, the new arrangement would perfect our holidays and render them of universal application; would raise the price of labour throughout the country, and would pay the whole sum now annually levied by taxation.
But if the people cannot be trusted to take sufficient rest for health how can they be trusted to insure themselves against misfortune? Hence an Employers' Liability Act must be passed, and a Bill brought in to make life assurance compulsory. The agitation for the latter object is fortunately as yet unsuccessful, but the former became law some few years ago. The principle of it is simple enough. Wages cannot be forced up by legislation however cunningly conceived: that is now generally admitted. In case of accident to a workman under the old system the loss came out of savings from past wages or a draft on future wages. The average wage necessarily covered the loss from accidents, and prudent workmen contributed towards an accident insurance fund. By the Act the burden of providing against accidents (of certain kinds) is now cast on the employer. The insurance fund is no longer needed. In other words, the employer keeps back (as by law compelled) that small portion of the wage which went to cover the average risk of accident. This he virtually puts into an accident insurance fund, from which from time to time he pays out what he is called upon to pay by law. The consequence is that the improvident man is obliged to insure. The annual premium is extorted from him by force. Of course, this is a good thing, if we take it for granted that human nature is organically improvident, and that not even by the experience of generations is providence to be hoped for. Unless we assume this, the effect of the Act must be to counteract the teachings of nature by disturbing the sequence of cause and effect. But not only are the provident and the improvident thrust together into one boat; the same thing is done for the careless and the cautious. The ungainly lout, who stumbles over any unusual object in his way, is as well provided for, at as little cost to himself, as the careful man who keeps his eyes open. Under the individualist system of old the latter could put away a smaller sum per annum than the former to form a fund to meet possible accidents. His own habit of caution lessened the risk. This habit was good for himself, good for his employer, and good for the community. The Act tends, of course, to weaken the habit. A workman nowadays almost feels that he has a right to an accident. Why should a set of careless fellows draw pounds and pounds for doing nothing while he, just because he examines ropes and rungs before trusting them, has his wages reduced to cover his employer's loss?
The best excuse for the ignorant promoters of this Act is that they really did not know that it must have the effect of lowering wages by exactly the amount required to cover the employer's liability.
A large number of workmen have already discovered what their legislating benefactors fail to see, and the consequence is that they have contracted with their employers “out of the Act.” To meet this difficulty the neo-radicals now propose to render such contract void. The workman is to be permitted to accept a contribution from his employer towards the accident fund in consideration of foregoing any claim which at any future time may arise under the Act, and then, when the claim has arisen, to snap his fingers at the other party to the bargain and demand full compensation. In other words, he is to be allowed to receive compensation twice over for the same injury, once by contract and once by fraud.
It is unnecessary to go into the demoralising effects of this so-called Employers' Liability Act Amendment Bill. All Bills which contain the dishonourable clause enabling a man to enter into a binding engagement to-day and to break it with impunity and advantage to-morrow—a clause which is but too frequently met with in these days—are the unmistakable offspring of neo-radicalism.
Individualists know full well that the cost of labour under the wage system includes the risk of the work to be performed. Wages necessarily vary with the risk. Adam Smith pointed that out over a hundred years ago. Consequently they have never condemned the original Act of 1881 on the ground that it taxed the employer. They know that it merely compels him to undertake the functions of an accident insurance company. The law compels him to compel his workpeople to insure against accidents.
The Act is condemned because it puts on an equal footing the provident and the improvident, the careful and the careless, and because it removes the incentives to constant watchfulness and prudence which tend, if let alone, to become hardened into congenital habits. The Amendment Bill, on the other hand, they condemn as a contemptible and immoral proposal.
In addition to compulsory rest and compulsory insurance, the neo-radical hastens to confer compulsory security upon the workers of the country. We have seen the effect of his efforts in the first two directions: how far has he been successful in the third? Ships are to be absolutely sea-worthy; mines are to be ventilated, and explosions rendered impossible; machinery in factories is to be fenced round; workshops are to be kept in perfect sanitary condition; railway trains are to adopt the block system and the automatic continuous brake; and level crossings are to be abolished. The men in the whitelead works are to wear suitable clothing, and to drink suitable squashes; bakers are no longer- to carry on their calling in a basement; dogs are all to be put into muzzles; acrobats are not to perform on the trapeze without proper neo-radical precautions; and. doubtless, in a few years, hunting, cricket, and football will be forbidden as too dangerous to life and limb.
Meantime, what is the result of all this striving after security? The Mines' Regulation Act was passed in 1872. It is alleged, on the high authority of its friends and admirers, that it has been the means of saving a few dozen lives a year, which is more than doubtful. Well, that is important: lives are valuable, and cannot be evaluated in terms of £ s. d. But look on the debit side of the account. For the five years following that in which the Act came into operation, over 12,000 workers were on an average each year thrown out of employment in the branch of industry affected, so that at the end of five years over 62,000 persons had been thrown out of work—cast on to an overstocked labour market, to compete in other departments of trade at a disadvantage, and, if the whole truth could be told, to perish of slow starvation. Sixty persons saved from a miner's grave—60,000 starved to death by the Act!1
And the same disproportion between the direct good and the indirect evil wrought by neo-radical legislation of this character holds throughout. The little benefit conferred is a prominent and noticeable little benefit, while the immense mischief done is remote and not always easily traceable to its true cause. It may be doubted whether anything has tended to undermine England's industrial superiority so much as the Factory Legislation of the last fifty years. Perhaps it is malicious to unearth the forgotten motives which brought them into existence. But that they were the progeny of the mean revengefulness of the landed classes for the liberal reforms of the day is proved beyond doubt by Roebuck, who pointed out that the division list on Feilden's Act of 1847 coincided almost exactly with the division list on the Repeal of the Corn-Laws in 1846. Nearly every member of Parliament who voted for State interference with factories voted also against the cheap loaf. This opinion is confirmed by a letter from Mr. Bright himself, which appeared in the Times much more recently. “A large section of Tories,” says he, “voted for the Factory Bill to revenge themselves upon the manufacturers, who were opposing the Corn-Laws.” This is significant. It entirely precludes the theory of the philanthropic origin of these measures, and helps to explain the anomaly of a Tory saint bringing in a popular measure, to be resisted tooth and nail by the best friend of the people. The effects of the Acts have fully justified Mr. Bright's opposition. Mr. Bright, in opposing Feilden's Ten Hours' Bill, predicted that “it must promote that depression which has for many years prevailed in the great interests of the country; and was calculated to destroy the manufacturing supremacy of the country. . . . That instead of conferring a benefit on the working classes, as they supposed, it would cause a greater evil to them than perhaps any measure which that House had ever passed."1 He described the Bill as “a delusion practised on the working classes,” and as “one of the worst measures ever passed.” Some half-dozen years before the passing of the first Factory Act,2 trade unionism was showing such strength that it had been deemed necessary by the anti-popular party to pass a very rigorous measure directed against it.3 “If you want any change,” this Act virtually said to the proletariat, “apply to us, the aristocracy and your friends, and we will bring pressure to bear on your masters; but do not dare to put forward demands in your own name, or we will join your masters in crushing you.”
And just as democracies, torn asunder by faction, will sometimes entrust their liberties to the guardianship of a military dictator; just as the down-trodden peasants of Russia pray for protection against the greed of the landowner to the holy Czar; so in a weak moment the workpeople of England delegated their own growing power to the non-progressive party, to be used ostensibly against the employers of labour, but really against the free-traders. The originator of this hypocritical and dishonest piece of statecraft has been apotheosised by the people; and the laying of the first stone of the fabric of State socialism in this country is nowadays commemorated by both parties as an epoch in the history of civilisation.4
The consequences of the surrender of the workers of their right of initiation into the hands of their self-appointed patrons were manifold. Instead of relying on combination and on direct compromise with their employers-a system which was already beginning to bear fruits, as the Act of 1826 shows— they have ever since turned their eyes toward the supposed fountain of favours—Parliament. The very trade unionists themselves at their annual congresses deliberate on, not what they shall do for themselves, but what Parliament shall be asked to do for them. If the sight of a glass of beer is too tempting to be resisted by those who receive their wages in a public-house, instead of advising their followers to band themselves together and refuse to accept their wages in such places, as the east-coast fishermen did, these leaders of labour go down on their knees to the legislature for a “Payment of Wages in Public-houses Prohibition Bill.”
But the poor helpless creatures who cannot toddle on without clinging to the petticoats of the great national nurse must not expect to be trusted even to look after their own private affairs. Like babies they must be protected against themselves. If they do not go to Church on Sunday there is an old Act on the Statute-book which subjects them to a fine of five shillings—an Act which many are thirsting to put in force. And they must not go to museums or picture galleries on Sunday. Mr. Broadhurst tells the goody-goodies who gave him his under-secretaryship that they do not desire it. Well, if not, they need not go; but both those who do (Mr. Broadhurst will admit that there are three or four) and those who do not might be allowed to express their views by the simple process of going or staying away, without calling upon Mr. Broadhurst for an opinion, or upon the saints who have the legislature in leading-strings. Again, the shiftless wage receiver may not have a glass of beer before such an hour, or after such an hour, or on such a day, without a certificate in the form of a railway ticket, or a lie on his tongue. The particular hour fixed varies with the ebb and flow of saintly influence in the House of Commons. Then the “people” must not assemble in the streets to talk politics obnoxious to their rulers. They may cant and sing, but if they talk politics they are “obstructing the thoroughfare” and must go to prison for two months. Places of amusement may be opened on all days except the poor man's weekly holiday. The “classes” may drink and play billiards all night long in Pall Mall, but the “masses — must go to bed at regulation hour, or drink water and play “solitaire ” at home. Such is the final consummation of neo-radicalism; the people dubbed “the masses” and treated as masses-all. without regard to their individuality, run in one mould, and branded with one brand.
The net result of the patchings and tinkerings, the meddlings and muddlings of this well-meaning set of incapables is just what might have been expected of it. By nibbling at the liberties first of one class and then of another; by violating all those rules of government the soundness of which have been demonstrated by the experience of ages; by increasing and entangling all the duties of Parliament and the Executive; by loading the Statute-book with long, tedious, and stupid Acts of Parliament, too prolix and heterogeneous for even trained lawyers to digest; by multiplying policemen and inspectors and examiners and State-officials of one sort and another, till no man can take a pinch of snuff without being asked to show his license, or chop faggots without a Government certificate; by this, that, and the other readjustment of the order of nature by rule of thumb, a state of things has been brought about in which the workers of England, without being made one whit the healthier or the happier, have been reduced to the last degree of inefficiency, poverty, and dependence.
Fortunately the beliefs of these semi-socialists sit lightly on them. If their first scheme is a failure it is thrown overboard without remorse: a clean sweep is made and a fresh start. They are amenable to reason if it is brought home to them through the channel of personal experience; and consequently it may be predicted that when the country has been brought to the brink of ruin, and when they themselves have tasted the bitter fruit of their own fooling, they will wheel round and set briskly to work to undo it. Even now there are signs of this reaction.
But while the neo-radical would be a comparatively harmless creature but for his unparalleled opportunities for mischief, and while, like the bull in the china shop, he is not" in himself a dangerous or vicious animal, there is a certain sect of genuine and consistent socialists who regard the attainment of their Utopia as possible only on constitutional lines, and who see in neo-radicalism the thin end of their own peculiar wedge being steadily driven home by the huge force of national thick headedness. And these theorists find themselves aided not only by the milk-and-water socialists of the neo-radical school, but even more effectually by a third and more reprehensible set of politicians, dishonest, self-seeking demagogues, who without either faith in the methods, or interest in the ultimate effects of the doctrine they preach, trade on the credulity of their fellow-countrymen, for their own mean personal aggrandisement, posing as philanthropists and friends of the people for the sake of popularity and its rewards—place and pelf. Such are the men who aspire to lead the credulous and ignorant in order that they may some day barter their delegated power and betray their followers to the enemy for an under-secretaryship or a snug berth as county-court judge. There is no need to name names. Those who have been found out are well known, and if I were to name some of those who have not yet been found out, their poor trusty supporters would disbelieve and denounce me—yet a little while. Meanwhile neo-radicalism is triumphant, trade is stagnant, and the workers work and work and die, and their children take their places, without hope or opportunity of betterment.
But there is a bright side to even neo-radicalism. It is by no means an unmixed evil. It serves as the safety-valve for the forces of ignorant rebellion, which would otherwise be pent up and attain a dangerous and explosive degree of intensity. It owes its existence partly, as I have said, to the common sense as distinguished from the severe logicality of Englishmen. In France if there is such a safety-valve it is always out of order; it will not act. It jammed in 1789; it jammed in 1848; and it jammed in 1870. It is never to be depended on. In England revolutionary forces were stronger in the days of the Chartist movement than they have ever been in France. The love of justice and liberty has always been stronger on this side of the channel. But the great Radical leaders of the day got control of the boiler and let off the steam in dribblets. Rebellion fizzled out in neo-radical legislation which, beyond lowering the pressure of the forces of discontent, did no good to any one. (Yet, surely, this in itself was a great good !) Socialists who look with favour on neo-radicalism mistake the blowing off of steam for the effective exercise of motive power. While the socialists are getting up steam they forget to sit on the safety-valve. It is true some of the wiser heads among them are beginning to look askance at neo-radicalism. Individualists do the same, but for another reason: they believe that the “subterranean forces ” of society might be turned to better account than making discordant noises. Both parties are agreed in lamenting the waste of power; but while socialists would burst the boiler, individualists would get the engine in motion along the lines of civilisation. Semi-socialists are content to pile on fuel with one hand “to a certain limited extent, don't you know,” and to let off steam with the other, also “to a certain limited extent.” However, perhaps we may trust these trimmers to thwart the aims and disappoint the expectations of their more consistent brethren.
“Just as the French workers have already nearly captured the municipal management of Paris, so it is our duty to leave no stone unturned in order to obtain control of either the reformed or unreformed municipal bodies of London. We see how much we could do to help on the socialist cause if we had only a determined and persistent minority, as the French socialists have, upon the municipal council.”
So writes the editor of the organ of social democracy in London, and he ventures to predict the outcome of his policy in these words:—
“When next the people marshal themselves in battle array against their oppressors, London will help Paris and Paris London to begin and carry on in earnest the world-wide international revolution. The memories of the great Civil War and the Chartist movement on this side of the Channel will be blended with those of '89 and the Commune on the other as the two greatest cities of the civilised world combine their forces in one final effort."1
Never! Long before that, the neo-radicals of the day will blow off steam enough to reduce the pressure far below bursting point. Even neo-radicals, to use a teleological metaphor, were not created without a purpose.
Under the head of neo-radicalism must on no account be included the radicalism of the old Manchester school, which was merely advanced Liberalism. Indeed the old and the new Radical are more widely separated by principle than the Conservative and Liberal. They stand at opposite poles. The old Radical was all for freedom and was opposed to State interference; the new Radical is for despotism and Government control in everything. Just as in Protestant countries the Roman Catholics preach religious liberty and equality, while in Catholic countries they practise religious intolerance, so those renegades who have passed over into the new camp never loved liberty for its own sake, but merely because they were themselves in a minority: and now that the reins are in their own hands they are as ready as the most selfish tyrant to impose their own despotic yoke on their fellow-countrymen. Let-be was an excellent ladder on which to mount to power, but now they have got there, they are the first to kick it down. Not a single word of what I have written about the new school (if an academy of ignorance can fairly be called a school) is intended to apply to those champions of freedom who fought for civil equality and for civil liberty, who abolished religious disqualifications and gave us free trade.
Unfortunately the race is wellnigh extinct. Mr. Bright is gone and his coadjutors of the Anti-Corn Law League have most of them passed away, and with them the spirit which inspired them. The League itself, it is true, has been resuscitated under a new title and with a wider aim, but the names of the Liberal leaders of to-day do not appeal on the roll of its members. Among modern Radicals one solitary figure stands out as an advocate of true freedom. To his honour be it said, Mr. Bradlaugh has never stooped to promise prosperity to the incompetent and luxury to the lazy. So strong is the temptation in these democratic days to offer political bribes to the voter, that one has need of great popularity, of considerable self-restraint, and of singular political honesty to steer clear of class privilege on the one hand and majority despotism on the other. “To my mind,” 1 said the member for Northampton to his constituents, “to my mind the great danger, especially to the democracies of Europe—I hope not to the democracy of America—is to look to the State to do things for you. The State is only you. It is often less than you, and it can never be more than you. . . . Democracies should leave as little as possible for the State to do. Every citizen should prevent, as much as possible, any control 1 The Northamptonshire Guardian, September 4, 1886. over individual energy.” How many Liberal members dare say ditto to that in presence of their own constituents?
It is a relief to turn to a third remedy for the present unjust system of distribution. What is called the system of “profit-sharing” is advocated by men who are actuated by a sense of justice and sympathy, and whose suggestions are based on experiment and observation. The advocates of "profit-sharing" accept the principle which 1 have described as floating in the air—that somehow wages should vary with profits, that when the employer is making large gains, his workpeople ought to enjoy a corresponding prosperity. But the method they propose is this: the employer should be persuaded to put by a certain percentage of his trade profits for division by way of bonus among his employees in proportion to their ordinary wages. In this way the workers will be in a position to save if they are thrifty, and so in good tune to become themselves capitalists. But why should he, the employer asks, rob himself of his proper profits in order to enrich his workmen? Might he not as well give a tithe of his income to the poor-box? To which the “profit-sharers” answer. “No: it is true that the workers have no claim upon you, either moral or economic, for a share; but you will find that if you give them such bonus as we suggest they will work harder and make the total net profits so much larger that you will not lose but rather gain by the process. They will perceive that the harder and better they work the more they will get, and so while they toil for their own good they will necessarily at the same time toil for yours.” As to what percentage should be divided among the “hands,” profit-sharers differ in opinion. Nearly all agree that the share should be small: and it is clear that according to the principles of the system only the net profits, after payment of wages and interest, can be devoted to the purpose.
There is no doubt that a great deal can be said for profit-sharing. It has a decided tendency to allay the spirit of hostile rivalry between employers and employed. It seems to exercise a salutary influence in preventing strikes and trade disputes. It certainly stimulates the workers to greater and better work. The hands are more careful to guard against mistakes, and that the interest taken in the business by the hands is much increased is shown, says M. Godin, the founder of the “Familistère,” by the constant new inventions and improvements made by the men. “Since they were made partners ” (not true partners?), says he, “a great number of patents have been taken out by the Familistere.”
Again, as Mr. Egerton1 tells us, “those working for a share of the profits rarely ask for a Monday holiday, as do most other (French) workmen. Thus their houses are able to execute orders with greater rapidity. When there was a strike amongst the painters, the workmen at M. Leclaire's worked fourteen and even more hours per day without the slightest complaint.”
Again, writing of these same men, he says: “The idea of equality of pay would be looked upon by them (Leclaire's men) as ridiculous.”
M. Laroche Joubert, who founded the profit-sharing paper mills in Angouleme, is so enthusiastic with regard to the system that he brought a Bill into the Chamber to make it compulsory upon all who tendered for public works. According to his own account, his house has made profits even in the worst of times. M. Joubert contends that his business is not liable to strikes, and that there is great zeal displayed by the hands, who rarely leave the house. But the practical commercial success of such profit-sharing houses as those of Leclaire, of M. Godin, and of M. Joubert no more justify us in eulogising the system as such, than do the failures of Herr Borchert justify us in condemning it. All alike were based on an arrangement arbitrary, paternal, and in all respects characteristically continental.
Let us see what there is to be urged against it. In the first place it is demoralising to the workpeople. They become the recipients of the employer's generosity. “The graduated divisions of profits are conferred as favours, not as rights.” In the second place it begs the question as to the true and rightful ownership of the profits of industry: and in the third place so long as the percentage to be divided remains arbitrary and is left to the discretion of the master, the inevitable result of competition (under the law of population) will be to bring wages and bonus together down to the subsistence level. As Herr Borchert, who has had fifteen years' practical experience of it, says, “it cannot but retain the character of an exceptional measure, being at best a mere experiment among a number of others that crop up and disappear with every fresh turn of the social problem.” If the bonus increases in any one trade the wages will correspondingly diminish. speak of the time when the system shall have been adopted not only by kind-hearted and large-minded men, like those who have already tried it, but by the general run of cheeseparing capitalists. When competition is keen—when trade is bad—when profits are small—when a hungry population is clamouring for work and bread—then the strain will come. Those who try to give more than the old wage in any form will have to close their works or forego the normal reward of risk. The more selfish (or, say, prudent) among them will prefer to invest their money on absolute security rather than at great risk for an equal return. Why spin cotton for 3 per cent with a prospect of less or even of loss when the like amount can be obtained from consols without any anxiety whatever? Again, when the workman's share of the bonus is small compared with his wage the stimulus to increased exertion is not so great as might be supposed, and it is doubtful whether 5 or 10 per cent of the net profits all along the line, even if wages remained the same, would have any appreciable effect on production; and if it had not, the system could not be permanent or even of long duration. Lastly, the ownership by the labourers of no matter how small a share in the employer's fixed capital (and that is how most profit-sharers insist on the workman's share being invested) forms a bond between the two which places the small and compulsory shareholder in a position of dependence on the large and free shareholder.1 The resulting system, as was clearly shown in the Maison Ledaire, is one of a patriarchal character. The employer becomes a little monarch, a bureaucracy develops itself, laws are made affecting the workers such as no free man should submit to, and the rights of the several parties become increasingly difficult of demarcation. When disputes arise it is found that the rules have been drafted in the interest rather of the lion than of the fox and the ass, and in case of litigation the latter go to the wall. In fact these establishments are despotic little industrial communes, and as such are quite unfitted for acclimatisation in the hardy soil of British freedom.1
Between the theory of profit-sharing and the theory of cooperation there is this fundamental difference: the former regards the whole of the profits of industry as morally and economically the property of the capitalist; the latter regards the whole of the profits (as such) as morally the property of the manual workers. Consequently it is not surprising that all profit-sharing businesses have been founded by employers, mostly with philanthropic intentions, while co-operative factories have been mostly started by the men themselves without any aid ab extra. Again, the men in profit-sharing houses are usually of a pronounced conservative type, while “co-operators” are notorious for their aggressive radicalism. (I do not use these terms in the party sense.) Thus Lord Vivian, writing from Belgium, says: “The Vooruit and all the Ghent societies have been established by the working classes alone, all attempts to found such associations on the invitation or with the assistance of the employers having failed. This is probably due in great part to the action of the Belgian socialists, who maintain that the working classes can only rely on themselves to obtain their rights and improve their condition, and that these societies must therefore consist exclusively of working men. The last socialist program lays down that ' the enfranchisement of labour should be the work of the working classes themselves; since the other classes of society cannot seriously help on this object, the working men's party should always work separately.”2
In treating of co-operation we must not fail to distinguish between co-operative distribution and co-operative production. Beyond the fact that they are known by the name of cooperation these two systems have little or nothing in common. The principles on which they are based differ, the objects with which they originated differ, and they are justified (if at all) on quite different grounds. And yet such is the confusion produced by mere names that those persons who approve of the one almost always express approval of the other.
“How is it it is asked, “that, while co-operative distribution has made such amazing strides, co-operative production is nearly stationary? ” But for this accidental confusion it would have been unnecessary to have referred to co-operative distribution in this place at all. As it is, however, it may be as well to say a word or two on the subject of co-operation, as vulgarly understood, before proceeding to consider co-operation in its more accurate sense.
Co-operative distribution is based on the principle of rolling into one, consumer and worker, demander and supplier—a principle which traverses the law of the division of labour. A deal of cackling has been done over some of the earlier cooperative societies, and doubtless the stores of to-day in England are a remarkable and an interesting study. Monster mushroom growths of sudden and luxuriant expansion, their existence goes to show that there is a screw loose somewhere, and that the present system of retail trade is out of equilibrium with society. And that this is so might have been seen beforehand. The enormous advances made in the art of transport during the last generation have defeated all the calculations of the retail traders. One can telegraph to Constantinople for a few pounds of Turkish tobacco, and get it for hardly more than the cost of an equal amount at the nearest tobacconist's, and with a better chance of obtaining the precise article required. It is no uncommon thing for people in the provinces to obtain the whole of their groceries from London instead of from the retail grocer hard by. The very existence of small retailers is threatened. The value of the service they render is not equal to their cost of living and the rent of their business premises. Clearly, retailing on a gigantic scale tends, like large farming on corn-growing and pasture lands, to elbow out the small people. There is an enormous saving in cost of staff, and a still greater in carriage, and there is a smaller proportion of surplus stock. Small traders finding themselves thus hard pressed by a rival organisation, which began with the wage-receiving classes and rapidly extended upwards to the “upmost” classes, had recourse to various expedients for keeping and gaining custom, of which one was the obvious one of giving long credits. And they developed the carrying branch of their business very considerably. But when orders were called for, goods left at the required hour, and a year's credit given, it was not to be expected that apparent prices could remain the same. The price of the article must cover the interest on the accounts and also the resulting bad debts, and the services of the extra hands required; and the difference between retailers' prices and store prices would become daily accentuated. Of course if the consumer imagines that by foregoing the interest on his domestic expenditure, and by putting his shoulder to the wheel and carrying his own parcels, he is really getting his things cheaper, it is a happy delusion which does no one much harm, but it is not a delusion on which stores can thrive for ever. The old lady who bought a herring for a farthing and engaged a cab to carry it home, would probably discover the flaw in her household economy after a dozen or so of experiments. For a time, no doubt, aggregations of men, working on new and improved principles, may beat the representatives of the ancient régime out of the field, but meantime they must act through some form of organisation, and the men who do the organising part of the business are mortal—a fact which co-operationists (like socialists) appear to forget. Other things equal, the private trader must have a considerable advantage over a company of associated traders, still more over a motley crew of ignorant persons whose affairs are in the hands of paid officials.
The abolition of long credits by retail traders, and the improvements taking place in the independent systems of small parcels delivery,1 together with the more general recognition of the doctrine of “small profits and quick returns,” will soon more than equalise the conditions. Retail traders will many of them be killed out, but others who carry on business in the large way required by modern social arrangements will sooner or later outstrip the co-operative societies, beat them on their own ground, arid compel them to wind up their affairs. Even now it is only necessary to compare the prices and quality of goods supplied by the Civil Service or Army and Navy Stores with similar goods supplied by Whiteley, or other large retail provider, to discover that the system of co-operative distribution, having drawn attention to a real defect in retail trade organisation, is wellnigh played out. Five or ten years hence no such amateur bazaars as those now flourishing in Victoria Street and the Haymarket will remain to excite the envy and hatred of the retailer. They will die a natural death.
But since the object was originally to dispense with the costly services of the “middleman ” or “retailer,” the movement was clearly justified by success. Beginning with workmen, the contagion rapidly spread to the ranks of the capitalists and all classes of society, and from one country to another, and it still continues to vindicate its existence. In one sense, no doubt, co-operation as here understood can be extended to production, as indeed it was by the Rochdale pioneers, who ground their own flour and made their own bread. The same thing was clone by several of the French co-operative bakeries, and so long as the co-operators made only for their own consumption, so as to evade the miller's profits, the principle was the same as that on which co-operative distribution rests. But the justification was wanting. While the small and numerous local retailers were and are a useless anachronism, the manufacturer is nothing of the kind. I am not aware that any association has supplied its own members exclusively with boots, or pianos, or chairs, so that the appearance of co-operative societies of piano-makers and the like brings us face to face with the other form of co-operation, in which members are not regarded as demanders.
Co-operative production, in this sense, is a very different matter. It has a separate origin, a separate object, and a separate justification. It is based on the observed fact that the contributor of capital (so-called) walks off, not only with the profits of capital but also with the profits of labour. This is so, and some of the more clear-sighted among the working classes see that it is so. Furthermore, they cannot see why the capitalist should take any profit at all. His contribution, they say, being dead matter, cannot add to the value of the new product; whatever is so added is the result of labour, and of labour alone. So they argue. Thus if the workers could only scrape together enough wealth to make a start, the profits could be divided in proportion to the labour contributed; or if capital must for some invisible reason have a reward, then it should take the form of interest on value lent. It is unnecessary to point out that this reasoning involves the socialist fallacy that dead capital cannot yield a profit. In fine, the systems of co-operative production which have been started in this country are all based on an avowed recognition of this mistaken doctrine, the effect of which is simply to put the boot on the other leg. Under the present system of wagedom the capitalist takes the whole of the profits and the contributor of labour none. Under the proposed system of co-operation the labourer takes the whole of the profits and the contributor of dead capital none. One arrangement is as unfair and as inexpedient as the other. Each should properly take profits in proportion to the value of his original contribution. The borrowing of capital at a fixed interest is open to many of the objections which can be urged against paying the workman a fixed wage.
Like profit-sharing, like socialism, like trade unionism, cooperative production is based on a good deal that is true but considerably adulterated with fiction and fallacy. Frequently the good outweighs the evil. Consider the effect of co-operative production in the following cases:1 —
Fourteen Paris piano-makers in 1848, without any means of their own, or Government aid, after great hardships and difficulties in starting, founded and carried on successfully a business which two years afterwards owned 40,000 francs' worth of property.
A co-operative association of fifteen furniture-turners started with 313 francs as their entire capital. After having at first to content themselves with wages—87- cents per day—they made their enterprise a complete success.
A small association of arm-chair makers, which started in 1849 with 135 francs, made 37,000 francs of net profits, and could afford to pay rent of 5500 francs per annum for their workshop.
An association of curriers started with only four working members: in two years, 8 6 members were at work.
A co-operation of filemakers, starting with fourteen members and 500 francs, acquired a capital of 150,000 francs and two houses of business—one in Paris, the other in the provinces.
A successful co-operation of boot-form makers began with two francs.
One of spectacle-makers, with 650 francs, had in 1883 a capital of over 1,270,000 francs.
Of course the difficulties with which co-operation has to deal are those which might be expected from the refusal of the workers to work in harmony and partnership with the owners of wealth. As Mr. Egertou points out in the French Report. "it has been found by experience that co-operative associations on a large scale are difficult to start. . . . Really good men are required at first. It is difficult to find the sums necessary to begin co-operation on a large scale. . . . Owing to the difficulty in finding sufficiently large premises, only a small number of members can generally work together at first.''
The admission of the capitalist within the ranks on equal terms would solve all these difficulties. Mr. Egertou adds: “The very strict obedience to regulations exacted and enforced, and their discipline—greater far than could have been maintained by masters-are considered to be in great measure the cause of the success of these co-operative societies.”
It is hardly necessary to point out that the spirit of self-help manifested in all forms of co-operation is exceedingly distasteful to the socialists. In the first workmen's congress held in Paris, in 1876, the general opinion was for co-operation. though men such as M. Isidore Finance, a house-painter by trade, and a prominent speaker at working men's meetings, expressed himself strongly against it, not so much on the ground of the many failures in 1848, and after the collapse of the Credit an trarail in 1868, but on account of the selfishness of the system, the members of co-operative societies becoming, he said, nothing better than capitalists.
Co-operative production as thus understood, and based on the theory that dead capital is not entitled to profits, has the support of no less an authority than J. S. Mill. Looking forward into the distant future, he is of opinion that the time will come when “owners of capital will gradually find it to their advantage, instead of maintaining the struggle of the old system with workpeople 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, 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.”1 This remarkable passage shows that Mill himself did not recognise the moral right of the owner of wealth to the fruits of that wealth Hence his denunciations of the “unearned increment ” were at least consistent.
“The Socialist Movement,” by Annie Besant, Westminster Review, July 1886.
I do not wish to be too sweeping in these charges. I have read some very ingenious suggestions on this subject published by the Fabian Society, but though ingenious they are to my mind highly unsatisf'actory and impracticable.
I assume for the sake of simplicity that the operation lasts a year, like most agricultural processes. When the operation is quicker the average profit is proportionately smaller, and when the operation is lengthier the protit is proportionately higher. Average profits, however, in the several well-tried processes vary for other reasons which need not be gone into here-v. Wealth of Nations.
Dispauperisation, by J. R. Pretyman, M.A. . Longmans, Green, and Co.
Westminster Review, July 1886.
Weekly Dispatch, October 10, 1886.
The Act came into force in 1873. In 1874 there were employed in and about the coal mines, 538,829 persons. Five years later, in 1879, the mining population had decreased to 476,810, showing a loss of no less than 62,019 persons.” Where did they go? The other markets were all overstocked. These poor people understood mining operations, but probably were but ill-fitted to compete in other branches of industry. Let us not blink matters. They were slowly but surely murdered by Act of Parliament—starved to death! Meantime the decrease in fatal accidents in the mines during the same period is fixed by the same authority at 83. These figures are taken from the Report of the Royal Commission on Accidents in Mines. 1881.
Hansard, vol. Ixxxix., p. 486.
Lord Ashley's Act, passed in 1833.
6 Geo. IV., c. 129.
The new street which has been named after the father of the Factory Acts is fairly emblematic of the tortuous gait of party spite in the guise of philanthropy. Why cannot our streets and statesmen he straight?
Justice, September 4, 1886.
TheNorthamptonshire Guardian, September 4, 1886.
Government Report on Co-operation in Foreign Countries.
E.g. it is compulsory in the Familistère.
Those who wish to see the results of profit-sharing in actual working order should read Mr. Sedley Taylor's writings on the subject.
Report on Co-operation in Foreign Countries—Belgium.
An improvement too likely to be retarded by recent Government competition.
Reports by Her Majesty's Representatives abroad on the system of Co-operation in Foreign Countries. Presented to both Houses of Parliament by command of Her Majesty, June 1886.
Principles of Political Economy, by J. S. Mill.