CHAPTER I

EXISTING CHECKS

How it is that some workers are not “sweated”—Non-competitive systems—Co-operation—Public services—Trade unions—Who is to blame for strikes?—How trade unions promote trade—Limits of their success—Factory Acts—How restriction raises wages—An example—How restriction drives the employer into better ways—Limit of legal restrictions in Great Britain.

If it be true that unlimited competition tends to reduce the wage earner to the lowest possible rate of subsistence, how does it happen, some reader may enquire, that under our present competitive system all wage earners are not, in fact, at that low level, but that, on the contrary, there are occupations in which wages tend steadily to rise.

The answer is that the course of competition among ourselves is not unchecked, and that, wherever concerted human action has interposed a check, the downward course of wages has been stayed. Nor, indeed, is the competitive system, though the most widely prevalent, the only system in existence among us.

A very considerable proportion of the trade of these islands is carried on not upon a competitive but upon a co-operative basis. The actual sales of goods made by industrial co-operative societies in the year 1904 amounted to £90,681,406,[69] and this total was “exclusive of the sums (amounting to £11,874,643 in 1904) representing the value of the goods produced by the productive departments of the wholesale and retail societies and transferred to their distributive departments.” The membership of the various societies included in 1904 no less than 2,103,113 persons, an appreciable fraction of the population.

The great movement known as Industrial Co-operation has two forms: (_a_) Associations of Consumers; (_b_) Labour Copartnerships.

The theory of Associations of Consumers is simple in the extreme. It consists in the elimination and reduction of intermediate profits, and the purchase by the retail customer of goods as nearly as possible at prime cost. The method employed is to sell at the usual market price and to return the surplus in the form of a percentage upon the total of purchases—which percentage is usually called a dividend. The fund from which such payments are paid is “the fund commonly known as profit,” and commonly retained under that name by the individual employer. Some writers have pointed out that this fund is in truth not profit but only savings. “‘Wealth is not created, it is only economised by distribution’; but in co-operative distribution it is economised to such effect that, for the workers at any rate, it has appeared to create wealth where none existed nor could exist for them under the old system of competitive trading.”[70] The “fund commonly called profit” is in fact “the margin between the prime cost of an article and the price paid for it over the counter by the individual customer.” The appropriation of this margin, or of a considerable part of it, to the customer is a feature not only of stores belonging to working class members but also of such undertakings as the Civil Service or the Army and Navy Stores. In these instances, however, the method adopted is to diminish the selling price; and this slight difference of procedure has led to a wide difference of results. The ordinary customer of the middle class stores feels himself, for the most part, but a purchaser at an exceptionally good and cheap shop; the customer at a store that follows the plan of the original Rochdale Pioneers feels himself the member of a community and the inheritor of a tradition. The fund, being collected in the hands of the society at large, is recognised more clearly as the property of all members alike; its destination is regulated by the governing body whom those members elect; and it forms a continual object lesson in political economy.

In these cases, it is clear to all persons who understand the processes, that competition has been checked. The margin no longer goes into an employer’s pocket but returns to the customer; and since the working classes are the largest customers, most of it returns to them. In nearly all instances, however, a part of the fund is retained for public uses; few, indeed, are the societies that contribute nothing towards educational or federal purposes.

The other group of co-operators views its members not as consumers but as producers, and by this very fact narrows its range, since every human being is a consumer, but not all of us are, or can be, in the strict sense, producers. There must be clerks, distributors of all kinds, policemen, organisers. The work of such persons is necessary and useful, but it does not produce, like that of the weaver or the engineer, an immediate and apparent increase in the wealth of the world. In theory, the early associations of producers were workers who combined themselves into self governed workshops and divided the profits of their labours. But this ideal is applicable only to industries demanding but a small outlay of capital, and such industries are always growing fewer. “The ideal ... was modified; individual sympathisers outside the workshop were admitted as members ... so too were societies of consumers. Thus, in place of the old self governing workshop, the modern copartnership workshop developed.” Associations of this type have been rapidly growing in the last ten or twelve years, and during the last two or three have spread amazingly in Ireland. All sorts of industries are represented: baking, weaving (of cotton, wool and silk), spinning, building, printing, quarrying, dairying, sick nursing, typewriting, cab-driving and bookbinding among them; there are societies that make wearing apparel of various sorts, pianos, harness, nails, mineral waters, photographs, brushes, watches, cutlery, padlocks and bricks. “Desborough, with its two important productive societies and its flourishing store which owns much of the land and has built most of the houses, is almost a co-operative community.”

Of the great English and Scotch Wholesale Societies made up of federations of societies, of the annual conferences, the annual festivals, the Women’s Co-operative Guild—that greatest and most interesting of working women’s associations—it is not my business here to speak in detail. Readers who desire to become acquainted with co-operation as it exists to-day should procure _Industrial Co-operation_.[71]

It must be enough to say that in the ocean of commercial competition, co-operation lies like a fertile island inhabited by workers who are putting into their own pockets the profits of their buying and selling, and very often also of their labour.

Nor is industrial co-operation the only part of the nation’s business carried on, in part at least, upon non-competitive principles. The whole civil service of any country, the army, navy, hospitals, museums, prisons, endowed schools and municipal undertakings of all kinds are examples of enterprises established on a non-competitive basis, although often influenced as regards internal management by competitive methods. In many of these cases, the payment of workers is fixed otherwise than by competition. Military and naval officers are not asked what is the lowest figure at which they will consent to serve their country; nor do we find in advertisements for town clerks or borough surveyors that preference will be given to candidates willing to accept a reduction of salary.

Even in the wider labour market, competition has not entirely a free course. It is checked by trade organisations, by Factory Acts and by Sanitary Acts. It is even checked in some slight degree by an uneasy feeling that it is not decent to let people work for us in return for obviously inadequate payment.

The avowed aim of trade unions is to check freedom of competition, with the object of obtaining or maintaining for the workers a high level of pay and of comfort. Their attempted method has been, almost invariably, the establishment not of a fixed wage but of a minimum wage. A misconception upon this point is so deeply engrained in the mind of the ordinary middle class Briton that I entirely despair of being believed when I make this statement. If I should live to celebrate a hundredth birthday, I should expect still to hear in the last year of my life the words: “What I really can’t bear about trade unions is that they insist upon all men being paid alike.” Let it be repeated, once again, however vainly, that trade unions do not so insist. I have never known, nor heard of, any trade union that objected to any of its members getting paid as much above the minimum rate as they possibly could. What the union does forbid is the taking of wages below the minimum; and the reason of this prohibition will be clear to any person who has read the chapter: “How Underpayment Comes.”

The means employed by trade unions for securing a minimum wage is the combined refusal of all members to work at any lower rate. In trades of skill, as distinguished from trades of mere practice—trades that is to say which possess in some degree a natural monopoly—unions have often attained considerable success; and wherever they have done so, poverty has been in a measure checked. Not only have the members of the union themselves been comparatively well paid, but the fact of their being so has helped to raise the level around them. Thus, since national poverty is the greatest enemy of trade, the unions have almost invariably, and indeed inevitably, been promoters of trade and prosperity.

At this point the question “How about strikes?” becomes almost physically audible. Certainly, a strike, during its continuance, hinders trade and prosperity in exactly the same way as warfare does. It is in fact warfare on a lesser scale and—in our country—with restrictions upon the weapons that may be employed; and war is always an evil, though sometimes the lesser of two evils. In a strike, as in greater wars, responsibility rests upon both parties, but seldom in equal degrees. The apportionment of blame must largely depend upon the cause in which each is fighting. The employer, in nine cases out of ten, is fighting for cheap labour; the union primarily for access to amenities of life which the employer enjoys already. In nine cases out of ten, therefore, the union is really fighting the battle of the whole nation, while the employer is fighting against it. Mr Schoenhof, a grave State official, sent by his own government to examine economic questions in Europe, declares of the acts of British trade unions that: “economically these acts speak of a high degree of wisdom. On the other hand the attempts of the employing classes to depress the rate of wages show frequently an entire misapprehension of the principles under which production is conducted. Most of the strife would disappear if it were more fully recognised that a high rate of wages has all the time been the powerful lever to reaching the low cost of production which practically rules to-day in the industries of the United States.”[72]

If therefore that combatant is to be held most responsible who is fighting in the worse cause, it is not the trade unionist but the employer, who, on the whole, is chiefly to be blamed for the occurrence of strikes.

There may, indeed, have been cases—I believe there has, in our own day and country, been at least one—in which a union has followed a mistaken course, has restricted output, and so lessened the volume of trade, and to that degree injured the country. In so far as unions have occasionally done this, they have been blind to the larger issues; but not so blind, even thus, as those employers who thought to cheapen production by lowering wages. Poverty, always and everywhere, hinders production; the wise employer desires to see more money in the pockets of working class purchasers, and the wise statesman more money in the pockets of working class taxpayers. Some day, when the history of Great Britain comes to be seen in the truer perspective of retrospect, it will be the leaders of trade unionism and the promoters of Factory Acts who will stand out among the real makers of this nation’s wealth.

But trade unions have seldom been really successful among unskilled workers—precisely those who, having no natural monopoly, are most liable to the pressure of economic competition and most likely to be underpaid. Women workers, too, have always been difficult to organise; not primarily, as is sometimes supposed, because they are women; but partly because women, in our present social state, expect to leave the labour market upon marriage, and therefore are comparatively indifferent about earning high wages; and partly because women have, as a rule, less of companionship with one another and of common social life out of working hours than men, and therefore less opportunity of that “talking over” of affairs out of which concerted action grows. Home workers are, of course, especially isolated; and the successful organisation of a union among unskilled female home workers would be an industrial miracle not looked for by the most sanguine toiler in the industrial field.

Co-operation and trade unionism have both been, in the main, working class movements, and both are examples of that curious inarticulate instinct for right collective action which seems to be inherent in the English democracy. From an assembly of average English artisans—I say, English, not British—you will not get logically reasoned statements; you will very seldom get a clear exposition of principles; but you will, very generally, get that main line of conduct which true principles and sound logic would dictate.

Not all the checks, however, in the course of free competition have come from the workers. The direct interposition of the law was invoked and secured by men whose personal concern in the question was only that of fellow citizens. These men were actuated by a horror of the sufferings undergone by the poorest workers; they felt that moral order was outraged and the nation disgraced by the existing industrial conditions. Restriction of hours was the first check imposed by British law, which has shrunk hitherto from directly fixing a rate of wages.[73]

But since prolonged hours of labour are in fact but a form of diminished wages, the law has, as it were despite itself, led to a real, and often also to a nominal, rise of wages. The way in which this comes about was exemplified with singular completeness in a case that occurred some years ago in London. The managers of a girl’s club, enquiring into the non-attendance of a certain member of the club, learned that her employer was giving every day to her and to her fellow workers a considerable number of articles to be made at home after the closing of the work room and to be brought in next morning. In order to complete this task, she was often, she declared, obliged to work till two in the morning. The articles were accessories of dress, and were paid for, by the dozen, at such a rate that the girls (there were seven of them) earned each about seven shillings a week, or about 1s. 2d. a day for a working day of from 14 to 16 hours. The ladies of the club reported the case to the Women’s Industrial Council, the members of which knew—as the girls did not—that the Factory Act forbade such employment at home after a working day on the employer’s premises. Now this, it will be seen, was just the kind of case in which, to people who have but little industrial experience, the interference of the law seems harsh, and its strict enforcement disastrous. If, working 14 to 16 hours a day, these poor girls earned but 1s. 2d., how cruel to let them work but 10 hours, and so earn but ninepence or tenpence! The Women’s Industrial Council, however, ruthlessly reported the facts to the Factory inspectors; and one evening, shortly afterwards, a lady inspector appeared at the workshop door just as the girls were leaving. Each girl carried a parcel. The inspector enquired the contents, and on learning them, turned the girls back and made each leave behind her the work which should have occupied her until after midnight. She herself interviewed the employer and no doubt expounded to him the provisions of the Act. Next morning—or possibly a day or two later—this ingenious gentleman presented to his employees a statement for their signature which declared that they carried home work to be done, not by themselves but by their relatives. They all signed; girls who work part of the night as well as all day and who receive but seven shillings a week are not persons likely to have spirit for much resistance. But they told the club leaders, and the club leaders told the Women’s Industrial Council, and the Industrial Council hastened to tell the Factory inspectors. Again the lady inspector appeared and met the girls coming out with parcels. Again she bade them return the work, and again she went in and saw their employer. What she said to him can only be surmised; for neither Factory inspectors nor employers report these things to the outer world. Whatever it may have been, it was effectual. No more work was given out to be carried home and the girls were thenceforward able to spend their evenings, if they chose, at the club and their nights in sleep. But, at the week’s end, every girl had done much less work, and being paid at the usual piece work rate, received considerably less than her weekly average. Thereupon, they represented to their employer their hard case. The inspector had forbidden them to work at night, and they could not live upon the proceeds of their work by day. Would he therefore be pleased to raise their pay; otherwise, they would be obliged to seek work elsewhere. The employer did raise their wages, paying them at a rate per dozen which, while still but a very few pence, was yet somewhere between 40 and 45 per cent. higher than he had paid before. Nor was this all. Finding that seven girls were now unable to accomplish all his work, he enlarged his workshop and took on six more. There were now therefore thirteen girls at work instead of seven, and all thirteen were receiving wages a shade higher for ten hours’ work than the seven had received for about fifteen hours. Nor did the retail selling price of the goods advance by so much as the fraction of a penny. In such ways as this do legal checks tend to impede the course of free competition and to prevent the extremity of underpayment.

It is not, however, only by preventing undue hours of labour but also by insisting upon reasonable sanitary conditions that the law promotes better wages and improved trade. An employer who can no longer either overwork or overcrowd his “hands” is driven to seek other channels of saving. He demands some method of getting more work done in an hour, and finds it worth his while to pay for the best possible machinery. All sorts of improved processes are introduced, some of which may demand increased skill and attention from the workers. The workers as soon as they have leisure enough to think, and health enough to develop initiative, begin to insist upon better payment, and because they are better paid are able to respond to demands for better work. The improved methods of production, where introduced, lead to an increase of production which renders possible a lowering of selling price, while the rise in wages at the same time increases the buying power of the workers. Trade expands and finds a ready outlet.[74]

The profits of the manufacturer, in these circumstances, are greatly increased, no longer at the cost of increased hardship to the workers but with advantage to the whole community. Thus the law has already, in various ways, interfered with the free course of competition, and its interference has been beneficial all round. The grounds of its intervention have always been moral; legislators and constituents alike have felt that certain evils must be suppressed at whatever loss of profits or of trade. But the results have been, not only morally but also economically, of immense national benefit. Slowly the great truth is emerging into recognition that the enforcement of good conditions and good payment for the workers of a nation is not only the humane but also the profitable policy. Slowly, step by step, in that piecemeal, groping and wasteful manner which seems to be a part of the English nature, and which, while so maddening to some of us who happen to possess an infusion of more logical but hotter blood, yet, on the whole, works out so well in practice, the British law goes forward, setting check after check in the path of unlimited competition. Almost every step has been taken amid outcries of opposition and prophecies of ruin. At every advance, the “practical man” has assured the government of the day, beforehand, that his particular trade would be destroyed, and, afterwards, that he had lost nothing.

In spite of all these steps and all these consequences, the vast majority of English people still believe themselves to be living under a _régime_ of pure competition and are ready to declare such a _régime_ not only beneficial but inevitable. In fact, however, modern life, even in our own small islands, comprises not one _régime_ only but many. Every stage, from a modified feudalism up to an almost undiluted socialism, is represented by existing conditions in Great Britain. Some stages are dwindling; some are growing; and it is well within the power of concerted human action to determine which shall grow and which shall dwindle.

As far as we have gone, our law has directly stopped many gross forms of overwork and oppression. The home worker it has helped, if at all, only in so far as it has enforced certain provisions as to housing and sanitation. Indirectly, the Factory Acts have served to raise wages by forming a basis of minimum comfort upon which trade union organisation could be built. In Great Britain, the law has never yet intervened, directly and of set purpose, to raise wages. In parts indeed of Greater Britain the law has directly so intervened; but the history of that intervention belongs to another chapter.