We had lately occasion to proceed by an omnibus from a country town to
a station on a railway, by which we were to return to the city where
we have our customary abode. On arriving at the station, we learned
that we should have to wait an hour for an _up_ train, the omnibus
being timed in relation to a _down_ one, which was about to pass. Had
this arrangement been the only one readily practicable, in the case,
we should have felt it necessary to submit uncomplainingly to the loss
of our hour; but it really was not so. We had come in one of three
omnibuses, none of which had more than two or three passengers. Why
should not one have come at this hour with _down_ passengers, and
another come an hour later with _up_ ones, thus by the same trouble
giving more accommodation? We found that the three omnibuses are run
by so many hotels, and that an arrangement for general convenience was
impossible, as it might have interfered with the hotel business. On
the continent, the government would have ordered matters otherwise:
with us, the genius of _laissez faire_ permits them to be as we
describe.
It is in the same part of the country that a system exists amongst
bakers, which we described many years ago in these pages. There are
three towns, triangularly arranged, about ten miles from each other.
One or more bakers in each has a van, in which he sends bread every
day to the other two. As there is no witchcraft in the making of
bread, it might be as well for the inhabitants of each town to be
supplied by the bakers of their own place exclusively, and then the
expense of the carriage would be saved. Such, however, is the keenness
of competition in the case, that each baker strives to get supporters
in the neighbouring towns, and willingly pays for van, horse, and
driver in order to retain their custom. We presume each van goes
thirty miles a day, and that there is not much less than 2000 miles of
this unprofitable travelling weekly in connection with the three
towns.
Any one who has a sincere respect for the principle of untrammelled
industry, must lament to see these its abuses or drawbacks. But our
commercial world is full of such anomalies. The cause is readily
traced in the excessive number of persons engaged in the various
trades. Not many years ago, the number of bakers in a town known to
us, of the same size as one of those above referred to, was fourteen,
while everybody acknowledged that four might have sufficed. In such
circumstances, it is not wonderful that expedients like that of the
van are resorted to, notwithstanding that it can only diminish the
aggregate of profit derived by an already starving trade.
Few persons who walk along a street of nicely-decorated and apparently
well-stocked shops, have the slightest conception of the hollowness of
many of the appearances. The reality has been tested in part by the
income-tax inquisition, which shews a surprising number of
respectable-looking shops not reaching that degree of profit which
brings the owner within the scope of the exaction. It may be that some
men who are liable, contrive to make themselves appear as not so; but
this cannot be to such an extent as greatly to affect the general
fact. In the assessing of the tax, no result comes out oftener than
one of this kind: Receipts for the year, L.2200; estimated profit at
15 per cent., L.330; deductions for rent of shop, taxes, shopmen's
wages, and bad debts, L.193; leaving, as net profit, L.137. The
commissioners are left to wonder how the trader can support his family
in a decent manner upon so small a return, till they reflect that
possibly a son brings in a little as a shopman, or a daughter as a
day-governess; or that possibly an old female relative lives with the
family, and throws her little income into the general stock. It is,
after all, a fact capable of the clearest demonstration, that a vast
number of shopkeepers' families maintain decent appearances upon an
income below that enjoyed by many artisans--what goes, in the one
case, for the decent appearances, being enjoyed in substantial
comforts in the other, or else misapplied, to the degradation of body
and mind.
The evil primarily lies in an erroneous distribution of industry.
Where twenty men offer themselves to do a duty to society for which
three are sufficient, it cannot be good for any party; whereas, were
the extra seventeen to apply themselves to other departments of the
labour required for all, it would be better times for the whole
twenty. The light, easy, and pleasant occupations are those most apt
to be beset by superfluous hands. Shopkeeping is generally easy, and
often pleasant; hence the excessive number of individuals applying
themselves to it. In the difficulties of the case, conspicuousness of
situation, extravagant decoration, and abundant advertising, are
resorted to, as means of obtaining a preference. Many, to help out
profits, resort to tricks and cheating. The expense thus incurred,
above what is necessary, in distributing certain goods, must be
enormous. To bring most articles to the hands of the consumer should
be a simple business. Every member of the public must feel that his
clothes will be as good, coming from a wareroom on a third floor at
L.30 a year, as from a flashy corner shop which costs L.300. He will
feel that to make him buy a new hat when he needs one, it is not
necessary that an advertising van should be continually rumbling along
the streets. His tea and sugar from the nearest grocer cannot be any
better because of there being fifty other grocers within two miles of
his residence, and forty of these not required. Yet, by reason of the
great competition in nearly all trades, these vast expenses, which do
nothing for the public, are continually incurred. Means misapplied are
means lost. The community is just so much the poorer. And we must
pronounce the superfluous shopkeepers, those who live by the rents of
fine shops, and those who are concerned in the business of advertising
beyond what is strictly necessary for the information of the public,
as incumbrances on the industry of the country.
One unfortunate concomitant of competition is, that it prompts in the
individual trader an idea which places him in a false position towards
the general interest. It is the general interest that all things fit
for use should be abundant; but when a man is concerned in producing
any of those things, he sees it to be for his immediate interest that
they should be scarce, because what he has to sell will then bring a
greater price. It is the general interest that all useful things
should be produced and distributed as cheaply as possible; but each
individual producer and distributer feels that the dearer they are, it
is the better for him. It is thus that a trade comes to regard itself
as something detached from the community; that a man also views his
peculiar trading interest as a first principle, to which everything
else must give way. It might, indeed, be easily shewn, that whatever
is good for the whole community, must be in the long-run beneficial to
each member. He either cannot look far enough for that, or he feels
himself unable to dispense with the immediate benefit from that which
is bad for the public. In short, each trade considers the world as
living for it, not it as living for the world--a mistake so monstrous,
that there is little reason to wonder at the enormous misexpenditure
to which it gives rise.
The idea essentially connected with these false positions, that
_because_ there are certain persons in a trade in a particular place,
they _ought_ to be there, and that the primary consideration regarding
them is how to enable them to continue living by that trade--as if
they were fixed there by some decree of Providence--is one of the most
perverse and difficult to deal with in political economy. The
assertion of any principle ruling to the contrary purpose, seems to
the multitude of superficial thinkers as a kind of cruelty to the
persons, the severity of the natural law being, by an easy slide of
thought, laid to the charge of the mere philosopher who detects and
announces its operation. In reality, those are the cruel people who
would contentedly see a great number of their fellow-creatures going
on from year to year in a misery, which, being brought upon themselves
by ignorance, and the want of a right spirit of enterprise, can only
be banished or lessened by their being rightly informed, and induced
to enter upon a proper course.
If there were a right knowledge and just views of these subjects
diffused through the community, a man would be ashamed to enter upon a
business in which a sufficient number of persons was already engaged,
knowing that he was thereby trifling with his time and fortunes, and
perhaps encouraging in himself a love of ease, or some other desire
which he was not entitled to gratify. He would rather go to some new
country, where he might eat in rough independence the rewards of an
actual toil. What is really required, however, is not that men should
leave their own country, but enter upon such pursuits there as may
preserve an equal instead of an unequal distribution of industry
throughout the various fields in which there is something to be done
for the general advantage. Distribution should be less a favourite
department, and production more so. With more producers and fewer
distributers, the waste we have endeavoured to describe would be so
far saved, and there would be fewer miserable people on the earth.
Even amidst all the delusions which prevail upon the subject, it is
curious to observe that there is a strong current towards a
rectification of what is amiss. The interests of the individual, which
produce so much fallacy, after all bring a correction. The active,
original-minded tradesman, seeing that, with an ordinary share of the
entire business of his department, he can scarcely make bread and
butter, bethinks him of setting up a leviathan shop, in which he may
serve the whole town with mercery at a comparatively small profit to
himself, looking to large and frequent returns for his remuneration.
The public, with all its sentimentalisms, never fails to take the
article, quality being equal, at the lowest price, and accordingly the
leviathan dealer thrives, while nearly all the small dealers are
extirpated. Now this is a course of things which produces partial
inconveniences; but its general effect is good. It lessens the cost of
distribution for the consumer, and it decides many to take to new and
more hopeful courses, who otherwise might cling to a branch of
business that had become nearly sapless. Underselling generally has
the same results. When in a trade in which distribution usually costs
43 per cent., one man announces himself as willing to lessen this by
15 or 20 per cent., his conduct is apt to appear unbrotherly and
selfish to the rest; but the fact is, that for goods of any kind to
cost 43 per cent., in mere distribution, is a monstrosity; and he who
can in any measure lessen that cost, will be regarded by the community
as acting in the spirit of a just economy, and as deserving of their
gratitude. These may be considered as the rude struggles of
competition towards a righting of its own evils. The public sees two
selfishnesses working in the case, and it naturally patronises that
which subserves its own interest.
The waste arising from an over-costly system of distribution, will
probably lead to other correctives of even a more sweeping kind than
that of underselling, or the setting up of leviathan shops. For the
greater number of the articles required for daily use, men begin to
find that a simple co-operative arrangement is sufficient. A certain
number agree to combine in order to obtain articles at wholesale
prices; after which a clerk, shopman, and porter suffice to distribute
them. They thus save, in many trades, as much as 15 per cent. So far
from their being under any peculiar disadvantage as to the quality of
the articles, they are rather safer than usual in that respect; and
indeed a freedom from the danger of getting adulterated or inferior
goods is one of the recommendations of the system. It would probably
extend more rapidly, were it not for the difficulties attending the
law of partnership, which, however, will in all likelihood be speedily
removed.
We make these remarks on distribution mainly in the hope of saving
individuals from entering upon a career in which, not being truly
useful to their fellow-creatures, they have little to expect of good
for themselves. At present, shopkeeping is limited by what an able
writer of the day calls the _bankruptcy check_;[1] that is, men go
into it, and remain in it, while they can just barely sustain
themselves, not regarding that they do not and cannot thrive, and that
they are only adding to a mass of idleness already burdensome to the
community. What we desire is, to see men so far enlightened in the
principles of economy, that they will be at least less apt to rush
into fields where their help is not wanted. We wish to assist in
creating a public opinion on this subject, which, fixing on
shopkeeping in such circumstances the odium of a masked idleness, will
tend to send the undecided into courses of real activity and
serviceableness; thus securing their own good by the only plan which
can be safely depended upon--that of first securing the good of the
entire community.