CO-OPERATION, &c.
#58. Arbitration.# We have now considered at some length the evils
arising from the present separation of interests between the employed
and their employers. The next thing is to discuss the various attempts
which have been made to remedy these evils, and to bring labour and
capital into harmony with each other. In the first place, many people
think that when any dispute takes place, arbitrators or judges should be
appointed to hear all that can be said on both sides of the question,
and then decide what the rate of wages is to be for some time to come.
No doubt a good deal may be said in favour of such a course, but it is
nevertheless inconsistent with the principles of free labour and free
trade. If the judges are to be real arbitrators, they must have power to
compel obedience to their decision, so that they will destroy the
liberty of the workman to work or not as he likes, and of the capitalist
to deal freely with his own capital, and sell goods at whatever price
suits the state of the market. If wages are to be arbitrarily settled in
this way, there is no reason why the same thing should not be done with
the prices of corn, iron, cotton, and other goods. But legislators have
long since discovered the absurdity of attempting to fix prices by law.
These prices depend entirely upon supply and demand, and no one is
really able to decide with certainty what will be the conditions of
supply and demand a month or two hence. Government might almost as
wisely legislate about the weather we are to have next summer as about
the state of trade, which much depends upon the weather, or upon wars
and accidents of various kinds, which no one can foresee. It is
impossible, then, to fix prices and wages beforehand by any kind of law
or compulsory decision. The matter is one of bargain, of buying and
selling, and the employer must be at liberty to buy the labour required
at the lowest price at which he can get it, and the labourers to sell
their labour at the highest price they can get, both subject of course
to the legal notice of a week or fortnight.
#59. Conciliation.# Though the compulsory fixing of wages is evidently
objectionable, much good may be done by #conciliators#, who are men
chosen to conduct a friendly discussion of the matters in dispute. The
business is arranged in various ways; sometimes three or more delegates
of the workmen meet an equal number of delegates from the masters, who
place before the meeting such information as they think proper to give,
and then endeavour to come to terms. In other cases the delegates lay
their respective views before a man of sound and impartial judgment, who
then endeavours to suggest terms to which both sides can accede. If the
two parties previously engage that they will accept the decision of this
conciliator or umpire, the arrangement differs little from arbitration,
except that there is no legal power to compel compliance with the
decision. Discredit has been thrown upon this form of conciliation by
the fact that the workmen have in several instances refused to abide by
the award of the umpire when given against them, and of course it cannot
be expected that masters will accept adverse decisions as binding under
such circumstances. Thus I am led to think that the conciliator should
not attempt to be a judge; he should be merely an impartial friend of
both sides, trying to remove misapprehension and hostile feelings,
enlightening each party as to the views and reasons and demands of the
other--acting, in short, as a go-between, and smoothing down the
business as oil eases the movement of a machine. The final settlement
must take the form of a voluntary bargain directly between the employers
and employed, which will only have compulsory effect during the week or
fortnight for which workmen usually enter into a legal agreement.
Conciliation may in this way do much good, but it cannot remove the
causes of difference--it cannot make the men feel that their interest is
one with the interest of their employers.
#60. Co-operation.# Among the measures proposed for improving the
position of workmen, the best is co-operation, if we understand by this
name #the uniting together of capital and labour#. The name co-operation
is used indeed with various meanings, and some of the arrangements
called by it have really nothing to do with what we are now considering.
#To co-operate means to work together# (Latin, _con_, together, and
_operor_, to work). About thirty-five years ago some workmen of
Rochdale, noticing the great profits made by shopkeepers in retail
trade, resolved to work together by buying their own supplies wholesale,
and distributing them amongst the members of the society which they
established. They called this #a co-operative society#, and a great
number of so-called co-operative stores have since been established.
Most of these are nothing but shops belonging to a society of
purchasers, who agree to buy at the store and divide the profits. They
have on the whole done a great deal of good by leading many men to save
money and to take an interest in the management of affairs. The stores
are also useful, because they compete with shopkeepers, and induce them
to lower their prices and to treat their customers better. We
frequently hear now of shops selling goods at #co-operative prices#.
But such co-operative societies have little or nothing to do with the
subject of capital and labour. Commonly these stores are conducted less
upon the true co-operative principle than ordinary shops. A shop is
usually managed by the owner or by a man who has a large interest in its
success, and has the best reasons for taking trouble. Co-operative
stores, on the contrary, are often managed by men who are paid by salary
or wages only, and have nothing to do with the profits and the capital
of the concern.
#Real co-operation consists in making all those who work share in the
profits.# At present a workman sells his labour for the best price he
can get, and has nothing further to do with the results. If he does his
work well, his master gets the benefit, and if he works badly his master
is injured. It is true that he must not be very lazy or negligent for
fear of being discharged; but if he takes care to be moderately careful
and active, it is all that he need do for his own interests. No doubt it
would be a good thing to reward the more active workmen with higher
wages, and a wise employer endeavours to do this when he can, and to put
the best workmen into the best places. But the trades-unions usually
prevent it as far as they can, by insisting that men doing the same kind
of work in the same place shall be paid alike. Moreover, as we have
seen, many men are under the mistaken belief that if they work hard they
decrease the demand for employment, and tend to take away the bread from
their fellow-men. Thus it is not uncommon for workmen to study #how not
to do the work too quickly#, instead of striving to make the most goods
in the least time with the least trouble. Workmen do not see that what
they produce forms in the long run their wages, so that if all workmen
could be incited to activity and carefulness, wages would rise in all
trades.
#61. Industrial Partnerships.# The best way of reconciling labour and
capital would be to give every workman a share in the profits of his
factory when trade is so prosperous as to allow of it. Charles Babbage
proposed, in the year 1832, that a part of the wages of every person
employed should depend on the profits of the employers. In recent years
this has been tried in several large works, especially in Messrs.
Briggs' collieries, and in Messrs. Fox, Head & Co.'s iron-works. The
arrangement generally made with the men was that the capitalists should
first take enough of the profits to pay 10 per cent. interest on the
capital, together with fair salaries for the managers as wages of
superintendence, a sum to meet bad debts, the repairs and depreciation
of the machinery, and all other ordinary causes of loss. Such profit as
remained was then divided into two equal parts, one of which went to the
employers, while the other was divided among the workpeople in
proportion to the amounts of wages which they had received during the
year. Many workmen under such a scheme found themselves at Christmas in
possession of five or ten pounds, in addition to the ordinary wages of
the trade received weekly during the year.
This kind of co-operation has been called #industrial partnership#, and,
if it could be widely carried into effect, there would arise many
advantages. The workmen, feeling that their Christmas bonuses depended
upon the success of the works, would not favour idleness, and would have
some inducement for preventing needless waste whether of time or
materials. By degrees they would learn that #the best trades-union is a
union with their employers#. Strikes and lockouts would be for the most
part a thing of the past, because, if wages were too low, the
balance-sheet would prove the fact at the end of the year, and half the
surplus would go to the workmen. To be free from the danger of strikes
would be a very great advantage to the employers, and any portion of
profits which they might seem to give up would be more than repaid by
the increased care and activity of the workmen. The employers would
continue to manage the business entirely according to their own
judgment, and they need not make their affairs or accounts known to the
men. All that is requisite is that skilful accountants should examine
the books at the end of the year, and certify the amount of profits due
to the men. If this plan were thoroughly carried out, the men would feel
that they were really working for themselves as much as for their
masters, and the troubles which at present exist would be nearly
unknown.
There are great difficulties in the way of this kind of co-operation:
most capitalists do not like it, because they needlessly fear to make
known their profits to their men, and they do not understand the
advantages which would arise from a better state of things. The workmen
also do not like the arrangement, because the trades-unions oppose
co-operation, fearing that it will overthrow their own power. Where the
scheme has been tried, it has usually succeeded well, until the men,
urged by their trades-unions, refused to go on with it. Thus are people,
through prejudice and want of knowledge, made blind to the best
interests of themselves and the country.
It is to be feared, then, that industrial partnerships will not make
much progress just at present, so great is the dislike to them felt both
by trades-unions and by prejudiced employers. Nevertheless, the
arrangement is in accordance with the principles of political economy,
and it will probably be widely adopted by some future generation.
Already, indeed, many banks, mercantile firms, and public companies
practically recognise the value of the principle, by giving bonuses or
presents to their clerks at the end of a profitable year. A French
railway company adopted this practice forty years ago, and as business
falls more and more into the hands of companies whose profits are
matters of general knowledge, there seems to be no reason whatever why
the principle of industrial partnership should not be adopted. Somewhat
the same principle is said to be carried into effect in the very
extensive and successful newspaper business of Messrs. W. H. Smith &
Son.
#62. Joint-Stock Co-operation.# Another mode of co-operation consists in
working men saving up their wages until they have got small capitals, so
that they can unite together and own the factories, machines, and
materials with which they work. They then become their own capitalists
and employers, and secure all the profit to themselves. Co-operative
societies of this kind are simply Joint-Stock Companies, the shares of
which are held by the men employed. Of course the shareholders must
choose directors from among themselves, and they must also have managers
to arrange the business. The managers and directors ought to be well
paid for what they do, and have a considerable share of the profits, in
order to make them interested in the success of the works, and therefore
active and careful. Incompetent or negligent management will soon ruin
the best business.
A great number of co-operative companies of this kind have been formed
in the last twenty years in England, France, America, and elsewhere; but
most of them have failed from want of good direction. The working-men
shareholders do not generally understand what a great deal of skill and
judgment is required in the conduct of a business; they are accustomed
to see work going on as if it went of its own accord, but they do not
see the constant anxiety and the careful calculation which is requisite
to make the work profitable. Hence they usually fail to secure good
managers, and they do not sufficiently trust those whom they appoint.
Moreover, many of the so-called co-operative companies are not really
co-operative; they frequently employ men who are neither shareholders
nor receivers of a share of profits, and they pay their managers by a
small fixed salary. #Such co-operative societies are badly-managed
joint-stock companies, and cannot be expected to succeed well.#
Another difficulty with such companies is, that they rarely have enough
capital, and, when bad trade comes, they are unable to bear the losses
which will sometimes occur for several years in succession. They can
borrow money by the mortgage of the buildings and machinery belonging to
the company, and this is usually done; but no banker will give credit to
such companies without the security of fixed property. Thus they
frequently fail when bad trade comes, and those who buy up their
property cheaply reap advantage. It is to be hoped that at a future time
all working-men will become capitalists on a small scale, and when
education and experience have been acquired, co-operative factories of
working-men may succeed. At present it would be better to leave the
management of business in the hands of capitalists, who are not only
experienced and clever men, but have the best reason to be careful and
active, because their fortunes depend upon success.
#63. Providence.# It is most deeply to be regretted that the
working-people of England will not, for the most part, see the necessity
of saving a portion of their wages in order to have something to live
upon when trade is bad, or when ill-health and misfortune come upon
them. Too many working-men's families spend all that is earned while
trade is brisk, and when employment fails they are as badly off as ever.
#There are several distinct reasons why every man or woman should save
up some property when possible#:--
(1) It forms a provision in case of ill-health, accident, want of
employment, or other misfortune; it is also wanted for support in old
age, or for the helpless widow and orphans of a workman who dies
early.
(2) It yields interest, and adds to a workman's income.
(3) It enables a man to go into trade, to buy good tools, and to
enjoy good credit in case he sees an opportunity of setting up
business on his own account.
No man and no woman, who is in the prime of life and earning fair wages,
should spend the whole. Even an unmarried person will generally reach a
time of life when, through ill health, old age, or other unavoidable
causes, it is no longer possible to get a living. By that time enough
ought to have been saved to avoid the need of charity or the degradation
of the poor-house. When there is a wife and young family, the need of
saving is evidently greater still. Every great storm, colliery
explosion, or other great accident leaves a number of helpless children
to be brought up by a struggling widow, or to go on the parish. No doubt
people may meet with disasters so unexpected and so great that they
cannot be blamed for not providing against them. A man who is blinded,
or crippled, or otherwise disabled in early life, is a proper object of
charity, but there would be plenty of benevolent institutions to provide
for such exceptional cases, if those who are more fortunate would
provide properly for themselves.
It is often said that working men really cannot save out of the small
wages they receive; the expenses of living are too great. We cannot deny
that there are labourers, especially agricultural labourers in the South
of England, whose wages will not do more than barely provide necessary
food and clothing for their families. The weekly earnings of a family in
some parts are not more than 12 or 15 shillings on the average of the
year, and sometimes even less. Such people can hardly be expected to
save. But this is not the case with the artisans and labourers in the
manufacturing districts. They seldom earn less than a pound a week, and
often two pounds. The boys and girls, and sometimes the mother of the
family, also earn wages, so that when trade is brisk a family in
Manchester or Leicester, or other manufacturing town, will get
altogether L150 a year, or more. Some kinds of workmen, especially
coal-hewers, and iron-puddlers, earn twice that amount in good years,
and are in fact better paid than schoolmasters, ministers of religion,
and upper clerks. It is idle to say that the better-paid working men
cannot save, and though we cannot make any strict rule, it is probable
that #all who earn more than a pound (five dollars, or 25 francs) a
week, might save something#.
It is easy to prove this assertion by the fact that when a strike
occurs, men voluntarily live on a half, or a third of their ordinary
wages. Sometimes they will live for three or four months on 12 or 15
shillings a week, which is paid for their support by their trades-union,
or by other unions, which subscribe money to assist them. It is quite
common for workmen to pay #levies#, that is, almost compulsory
subscriptions of a shilling or more a week, to be spent by other workmen
who are #playing#, as it is called, during a long strike. Nobody wishes
working people to live on the half of their wages, but #if, for the
purpose of carrying on struggles against their employers, they can spare
these levies, it is evident that they could spare them for the purpose
of saving#. Then, again, we know that the money spent on drink is
enormous in amount; in this country it is about L140,000,000 a year, or
about four pounds a year for every man, woman, and child. To say the
least, half of this might be saved, with the greatest advantage to the
health and morals of the savers, and thus the working classes would be
able to lay by an annual sum not much less than the revenue of the
nation.