But if employers are apt to take too narrow a view of the worth of good wages as a positive source of high production, labourers are apt to take equally narrow views of the worth of high production as a source of good wages. The policy of limiting production is expressly countenanced by a few of their trade unions, with the concurrence, I fear, of a considerable body of working-cla.s.s opinion. This is shown in their idea of "making work," in their prohibition of "chasing"--_i.e._, of a workman exceeding a given average standard of production--and in their prejudice against piecework. Their notion of making work is irrational.

They think they can make work by simply not doing it, by spinning it out, by going half speed, under the impression that they are in this way leaving the more over to const.i.tute a demand for their labour to-morrow.

And so, in the immediate case in hand and for the particular time, it may sometimes be. But if this practice were to be turned into a law universal among working men, if all labourers were to act upon it everywhere, then the general production of the country would be immediately reduced, and the general demand for labour, and the rate of wages, would inevitably fall in a corresponding degree. Instead of making work, they would have unmade half the work there used to be, and have brought their whole cla.s.s to comparative poverty by contracting the ultimate sources from which wages come. The true way to make work for to-morrow is to do as much as one can to-day. For the produce of one man's labour is the demand for the produce of another man's. There is nothing more difficult for any cla.s.s than to reach an enlightened perception of its own general interest.

The objection usually made to "chasing" and piecework is that they always end in enabling employers to extract more work out of the men without giving them any more pay, and that they conduce to overstraining. Now piecework, without a fixed list of prices, is of course liable to the abuse which, it is alleged, masters have made of it. But with a fixed list of prices the labourers ought, with the aid of their unions, to be as able to hold their own against the encroachments of the masters under piecework as under day work, and piecework is so decidedly advantageous, both to masters and to men, that it would be foolish for the former to refuse the reasonable concession of a fixed list of prices; and it would be equally foolish for the latter to oppose the system under the delusive fear of a danger which it is amply in their own power to meet. There is a good deal of force in the view of Mr. William Denny, that piecework will prove the best and most natural transition from the present system to a _regime_ of co-operative production, because it furnishes many kinds of actual opportunities for practising co-operation; but whatever may be the promise of piecework for the age that is to come, there is no question about its promise for the life that now is. Mr. Denny, speaking from experience in his own extensive shipbuilding works at Dumbarton, says that "a workman under piecework generally increases his output in the long run--partly by working hard, but princ.i.p.ally by exercising more intelligence and arranging his work better--by about 75 per cent., while the total amount of his wages increases by about 50 per cent., making a distinct saving in the wages portion of the cost of a given article of about 14 per cent." ("The Worth of Wages," p. 19.)[5] Similar testimony is given by Goltz, Boehmert, and a writer in Engels' _Zeitschrift_ for 1868, as to the effect of the introduction of piecework into continental industries, and Roscher ascribes much of the industrial superiority of England to the prevalence of piecework here. According to Mr. Howell, more than seventy per cent. of the work of this country is done at present by the piece, and the Trades' Union Commission found it the accepted rule in the majority of the industries that came under their investigation; in fact, in all except engineering, ironfounding, and some of the building trades. The engineers entertain a strong objection to it, and their union has sometimes expelled members who have persisted in taking it.

But the system works smoothly enough when an established price-list has become a recognised practice of the trade. The objection that the piece system leads to careless, scamped and inferior work, call hardly be considered a genuine working-cla.s.s objection. That is the look-out of the masters, and they find it easier to check quality than to check quant.i.ty. Another reason sometimes given against piecework is that under it some men get more than their share in the common stock of work, but there lurks in this reason the same fallacy which lies in the notion of "making work," the fallacy of seeking to raise the level of wages by limiting production, and so diminishing the common stock of work of society. Labourers seem sometimes to harbour an impression as if they were losing something when their neighbours were making more than themselves. Work appears to them--no doubt in consequence of the fluctuations and intermittent activity of modern trade--to come in bursts and windfalls, n.o.body knows whence or how, and they are sometimes uneasy to see the harvest being apparently disproportionately appropriated by more active and efficient hands. But in the end, and as a steady general rule, they are gainers and not losers by the efficiency of the more expert workmen, because productivity, so far from drying up the sources of work, is the very thing that sets them loose.

A more important objection is the danger of overstraining, against which of course the working cla.s.s are wise to exercise a most jealous vigilance. But, in the first place, it is easy to exaggerate this danger. It is not really from any deepened drain on the physical powers of the workmen, so much as from a quickening of his mental life in his work, that increase in his productivity is to be expected. Mr. Denny, it will be observed, attributes the additional output under piecework not nearly so much to harder labour as to the exercise of more intelligence and to a better arrangement of the work. But, in the next place, to my mind the great advantage of piecework is that it affords a sound economic reason for shortening the day of labour. The work being intenser, demands a shorter day, and being more productive, justifies it. If the figures I have quoted from Mr. Denny are at all representative, then a labourer, working by the piece, can turn out 40 per cent. more in eight hours than working by the day he can do in ten.

Differences may be expected to obtain in this respect in different trades and kinds of work, so that there possibly cannot be any normal day of labour for all trades alike, and each must adjust the term of its labour to its own circ.u.mstances. But wherever piecework can increase the rate of production to the extent mentioned by Mr. Denny, the day of labour may be shortened with advantage, and it can apparently do so in the very trades that most strongly object to it. A fact mentioned by Mr.

Nasmyth, in his remarkable evidence before the Trades Union Commission, opens a striking view of the possibilities of increasing production through developing the personal efficiency of the labouring cla.s.s, and of doing so without requiring any severe strain. "When I have been watching men in my own work," he says, "I have noticed that at least two-thirds of their time, even in the case of the most careful workmen, is spent, not in work, but in criticising with the square or straight-edge what they have been working, so as to say whether it is right or wrong." And he adds--"I have observed that wherever you meet with a dexterous workman, you will find that he is a man that need not apply in one case in ten to his straight-edge or square." And why are not all dexterous, or, at least, why are they not much more dexterous than they now are? Mr. Nasmyth's answer is, because the faculty of comparison by the eye is undeveloped in them, and he contends that this faculty is capable of being educated in every one to a very much higher degree than exists at present, and that its development ought to be made a primary object of direct training at school. "If you get a boy," he says, "to be able to lay a pea in the middle of two other peas, and in a straight line with these two, that boy is a vast way on in the arts." He has gone through a most valuable industrial apprenticeship before he has entered a workshop at all. If, through training the eye, workmen can save two-thirds of their time, it is manifest that there is abundant scope for increasing productivity and shortening the day of labour at the same time. Industrial efficiency is much more a thing of mind than of muscle. _Jeder Arbeiter ist auch Kopfarbeiter._ All work is also head work. Skill is but a primary labour-saving apparatus engrafted by mind on eye and limb, and it is in developing the mental faculties of the labourers by well-directed training, both general and technical, that the chief conditions for their further improvement lie. Their progress in intelligence may therefore be expected to increase their productivity so as to justify a shortening of their day of labour, and the leisure so acquired may be expected to be used so as to increase their intelligence. Any advance men really make in the scale of moral and mental being tends in this way to create the conditions necessary for its maintenance.

We sometimes hear the same pessimist prophecy about shorter hours as we have heard for centuries about better wages, that they will only seduce the working cla.s.s to increased dissipation. But experience is against this view. Of course more leisure and more pay are merely means which the labourer may according to his habits use for his destruction as easily as for his salvation. But the increase in the number of apprehensions for drunkenness that frequently accompanies a rise in wages proves neither one thing nor another as to the general effect of the rise on the whole cla.s.s of labourers who have obtained it; it proves only that the more dissipated among them are able to get oftener drunk.

Nor can the singular manifestations which the full hand sometimes takes with the less instructed sections of the working cla.s.s, especially when it has been suddenly acquired, furnish any valid inference as to the way it would be used by the working cla.s.s in general, particularly if it were their permanent possession. The evidence laid before the House of Lords Committee on Intemperance shows that the skilled labourers of this country are becoming less drunken as their wages and general position are improving; and Porter, in his "Progress of the Nation," adduces some striking cases of a steady rise of wages making a manifest change for the better in the habits of unskilled labourers. He mentions, on the authority of a gentleman who had the chief direction of the work, that "the formation of a ca.n.a.l in the North of Ireland for some time afforded steady employment to a portion of the peasantry, who before that time were suffering all the evils so common in that country which result from precariousness of employment. Such work as they could previously get came at uncertain intervals, and was sought by so many compet.i.tors that the remuneration was of the scantiest amount. In this condition the men were improvident to recklessness. Their wages, insufficient for the comfortable maintenance of their families, were wasted in procuring for themselves a temporary forgetfulness of their misery at the whisky shop, and the men appeared to be sunk into a state of hopeless degradation.

From the moment, however, that work was offered to them which was constant in its nature and certain in its duration, and on which their weekly earnings would be sufficient to provide for their comfortable support, men who had been idle and dissolute were converted into sober, hardworking labourers, and proved themselves kind and careful husbands and fathers; and it is stated as a fact that, notwithstanding the distribution of several hundred pounds weekly in wages, the whole of which, would be considered as so much additional money placed in their hands, the consumption of whisky was absolutely and permanently diminished in the district. During the comparatively short period in which the construction of this ca.n.a.l was in progress, some of the most careful labourers--men who most probably before then never knew what it was to possess five shillings at any one time--saved sufficient money to enable them to emigrate to Canada, where they are now labouring in independence for the improvement of their own land" (p. 451). It may be difficult to extirpate drunkenness in our climate even with good wages, but it is certainly impossible with bad, for bad wages mean insufficient nourishment, comfortless house accommodation, and a want of that elasticity after work which enables men to find pleasure in any other form of enjoyment. As with better wages, so with shorter hours. The leisure gained may be misused, especially at first; but it is nevertheless a necessary lever for the social amelioration of the labouring cla.s.s, and it will more and more serve this purpose as it becomes one of their permanent acquisitions. There can be no question that long hours and hard work are powerful predisposing causes to drunkenness. Studnitz mentions that several manufacturers in America had informed him that they had invariably remarked, that with solitary exceptions here and there, the men who wrought for the longest number of hours were most p.r.o.ne to dissipation, and that the others were more intelligent, and formed on the whole a better cla.s.s. Part of the prejudice entertained by working men against piecework comes from the fact that it is very often accompanied with overtime, and when that is the case, it generally exerts an unfavourable effect on the habits of the workman. Mr. Applegarth said, in his evidence before the Trades Union Commission, that nothing degraded the labourer like piecework and overtime. Mr. George Potter stated, in his evidence before the Select Committee on Masters and Operatives in 1860, that it was a common saying among working people with regard to a man who works hard by piecework and overtime, that such a man is generally a drunkard. He ascribed much of the intemperance of the labouring cla.s.s to the practice of working "spells"--_i.e._, heats of work at high pressure on the piece and overtime system--instead of steadily; and he says--"When I was at work at the bench, I worked to a firm where there was much overtime and piecework, and I found that the men at piecework were men who generally spent five or six times more money in intoxicating drink, for the purpose of keeping up their physical strength, than the men at day work.

I find, on close observation, that the men working at piecework are generally a worse cla.s.s of men in every way, both in intelligence and education, and in pecuniary matters." Now, the ill effects which issue from piecework combined with overtime could not accrue from piecework combined with shorter hours. Besides, in a case of this kind it is sometimes difficult to say which is cause and which effect, or how much the one acts and reacts on the other. For both Mr. Potter and the manufacturers mentioned by Studnitz represent the men who wrought longest as being not only more drunken, but less intelligent and educated, and, in fact, as being every way inferior; and we can easily understand how men of unsteady habits should prefer to work "spells,"

and try to make up by excessive work three days in the week, for excessive drinking the other three.

Dissipation and overtime generally go together, but neither of them is a necessary accompaniment of piecework. The best check to both is probably the spread of general education among the working cla.s.s, for the better educated workmen are even at present usually found against them; and the spread of general education--I do not speak here of technical--among the working cla.s.s is more fruitful than even piecework itself in opening up fresh reserves of industrial efficiency in our labouring manhood. Roscher has pointed out how a stimulant like piecework produces in a fairly well-educated district twice the result it produces in a comparatively illiterate one. Taking the figures of Goltz on rural labour in different German States, he shows that while the earnings of pieceworkers were only 11 per cent. higher than the earnings of day-workers in Osnabruck, they were as much as 23 per cent.

higher in Hesse. Mr. Peshine Smith mentions that the Board of Education in Ma.s.sachusetts procured from overseers of factories in that State a return of the different amounts of wages paid and the degree of education of those who received them. Most of the work was done by the piece, and it was found that the wages earned rose in exact ratio with the degree of education, from the foreigners at the bottom who made their mark as the signature of their weekly receipts to the girls at the top who did school in winter and worked in factories in summer. In some branches of industry many new improvements remain unused because the workpeople are too ignorant to work them properly. Moreover, for the supreme quality of resourcefulness, education is like hands and feet, and if we may judge from the number of useful labour-saving inventions which working men give us even now, we cannot set limits to the number they will give when the whole labouring cla.s.s will have got the use of their mind by an adequate measure of general education, and when, as we may hope, they will have got leisure to use it in through a shortening of the day of labour. The possibilities of this last source are very well ill.u.s.trated by an experiment of Messrs. Denny. In 1880 they established in their ship-building yard at Dumbarton an award scheme for recompensing inventions made by their workmen for improving existing machinery or applying it to a new cla.s.s of work, or introducing new machinery in place of hand labour, or discovering any new method of arranging or securing work that either improved its quality or economized its cost. Mr. William Denny stated, after the scheme had been nearly seven years in operation, that in that time as many as 196 awards had been given for inventions which were thought useful to adopt, that three times that number had been submitted for consideration, and that besides being beneficial in causing so many useful improvements to be made, the scheme had the effect of making the workmen of all departments into active thinking and planning beings instead of mere flesh and blood machines.

I cannot, therefore, take so dark a view as is sometimes entertained of the futurity of the wage-labourer, even if he were compelled to remain purely and permanently such. His position has substantially improved in the past, and contains considerable capabilities for continued improvement in the future. Of course the action of trade unions, besides being confined to the limits I have described, is subject to the further restriction, that it can only avail for the labourers who belong to them, and is indeed founded on the exclusion or diminution of the compet.i.tion of others. They impose limitations on the number of apprentices, and prescribe a certain standard of efficiency, loosely ascertained, as a condition of membership. There can be no manner of objection to the latter measure, nor does the former, though it is manifestly liable to abuse and is sometimes vexatious in its operation, seem to be practically worked so as to diminish the labour in any particular industry beneath the due requirements of trade, or to create an unhealthy monopoly. Then, though the trade unionists gather their gains by keeping off the compet.i.tion of others, it cannot be said that these others are necessarily in any worse position than they would have occupied if trade unions had never come into existence. It may even be that through the operation of custom, which will always have an influence in settling the price of labour, a certain benefit may be reflected upon them from a rise in the usual price effected by trade union agency. But in any case, it is no sound objection to an agency of social amelioration that its efficiency is only partial, for it is not so much to any single panacea, as to the application of a mult.i.tude of partial remedies, that we can most wisely trust for the accomplishment of our great aim.

II. The second main count in the socialist indictment of the present industrial system is that it has multiplied the vicissitudes of trade, and so imposed an incurable and distressing insecurity upon the labourer's lot. The rapidity of technical transformation and the frequency of commercial crises create, it is alleged, a perpetual over-population, driving ever-increasing proportions of the labourers out of active employment into what Marx calls the industrial reserve, the hungry battalions of the half-employed or the altogether unemployed.

In regard to technical transformation, the effects of machinery on the working cla.s.s are now tolerably well understood. Individuals suffer in the first instance, but the cla.s.s, as a whole, is eventually a great gainer. Machinery has always been the means of employing far more hands than it superseded, when it did supersede any (for it has by no means invariably done so). There is no way of "making work" like producing wealth. The increased production due to machinery cheapens the particular commodities produced by it, and thus enables the purchasers of these commodities to spend more of their income on other things, and so practically to make work for other labourers. But even in the trades into which the machinery has been imported, the effect of its introduction has been to multiply, instead of curtailing, employment.

Take the textile trades--much the most important of the machine industries. Mr. Mulhall, in his "Dictionary of Statistics" (p. 338), gives the following statistics of the textile operatives in the United Kingdom at various dates:--

Year. Men. Women. Children. Total.

1835 82,000 167,000 104,000 353,000 1850 158,000 329,000 109,000 596,000 1880 232,000 543,000 201,000 976,000

Marx and others dwell much on the fact, that machinery leads frequently to the subst.i.tution of female for male labour; but the preceding table shows that while female labour has been largely multiplied, male labour has been scarcely less so, and besides, a more extensive engagement of women is in itself no public disadvantage. For half the question of our pauperism is really the question of employment for women, it being so much more difficult to find work for unemployed women than for unemployed men; and if the course of industrial transformation opens up new occupations that are suitable for them, it is so far entirely a social gain, and no loss. No doubt, though the good accruing from industrial transformation far outweighs the evil, yet evil does accrue from it, and evil of the kind alleged, the tendency to develop local or temporary redundancies of labour. But then that is an evil with which we have never yet tried to cope, and it may probably be dealt with as effectively on the present system as on any other. Socialism would stop it by stopping the progress which it happens to accompany, and would therefore envelop society in much more serious distress than it sought to remove. In Marx's remarkable survey of English industrial history almost every conquest of modern civilization is viewed with regret; but it is manifestly idle to think of forcing society back now to a state in which there should be no producing for profit, but only for private use, no subdivision of labour, no machinery, no steam, for these are the very means without which it would be impossible for our vastly increased population to exist at all. What may be done to meet the redundancies of labour that are always with us is a difficult but pressing question which I cannot enter upon here. State provision of work--even in producing commodities which are imported from abroad, and which might therefore be produced in State workshops without hurting home producers--has many drawbacks, but the problem is one that ought to be faced, and something more must be provided for the case than workhouse and prison.

In regard to commercial crises, they are rather lessening than increasing. They may be more numerous, for trade is more extensive and ramified, but they are manifestly less violent than they used to be. The commercial and financial crises of the present century have been moderate in their effects as compared with the Darien scheme, Law's speculations in France, or the Tulip mania in the Low Countries, and under the influence of the beneficial expansion of international commerce and the equally beneficial principle of free trade, we enjoy now an absolute immunity from the great periodical visitation of famine which was so terrible a scourge to our ancestors. Facts like these are particularly rea.s.suring for this reason, that they are the result, partly of better acquaintance with the principles of sound commercial and financial success, and partly of the equalizing effect of international ramifications of trade, and that these are causes from which even greater things may be expected in the future, because they are themselves progressive. There is no social system that can absolutely abolish vicissitudes, because many of them depend on causes over which man has no possible control, such as the harvests of the world, and others on causes over which no single society of men has any control, such as wars; and, besides, it is possible to do a great deal more under the existing system than is at present done, to mitigate and neutralize some of their worst effects. To provide the labouring population with the security of existence, which is one of their pressing needs, a sound system of working cla.s.s insurance must be devised, which shall indemnify them against all the accidents and reverses of life, including temporary loss of work as well as sickness and age, and it is not too much to hope, from the amount of attention which the subject is at present attracting, that such a system will be obtained. As far as yet appears, the scheme proposed by Professor Lujo Brentano, to which I have already referred, is, on the whole, the soundest and most satisfactory in its general principles that has been advanced.

Again, much of the instability of trade arises from the want of commercial statistics, and the consequent ignorance and darkness in which it must be conducted. More light would lessen at once the mistakes of well-meaning manufacturers and the opportunities of illegitimate and designing speculation. Socialists count all speculation illegitimate, because they fail to see that speculation, conducted in good faith, exercises a moderating influence upon the oscillations of prices, preventing them from falling so low, or rising so high, as they would otherwise do. Speculation has thus a legitimate and beneficial work to perform in the industrial system, and if it performed its work rightly, it ought to have the opposite effect from that ascribed to it by socialists, and to conduce to the stability of trade, instead of shaking it. But unhappily an unscrupulous and fraudulent spirit too often presides over this work. Schaeffle, who is not only an eminent political economist, but has been Minister of Commerce to one of the great powers of Europe, says that when he got acquainted with the bourse, he gave up believing any longer in the economic harmonies, and declared theft to be the principle of modern European commerce. Socialists always take the bourse to be the type of capitalistic society, and the fraudulent speculator to be the type of the bourse, and however they may err in this, there is one point at any rate which it is almost impossible for them to exaggerate, and that is the mischief accruing to the whole community--and, as is usual with all general evils, to the working cla.s.s more than any other--from the prevalence of unsound trading and inflated speculation. Confidence is the very quick of modern trade. The least vibration of distrust paralyzes some of its movements and depresses its circulation. Enterprise in opening new investments is indeed more and more indispensable to the vitality of modern industry, but the mischiefs of misdirected enterprise are as great as the benefits of well-directed.

Illegitimate speculation is very difficult to deal with. It can never be reached by a public opinion which worships success and bows to wealth with questionless devotion. Nor is it practicable for the State to put it down by direct measures. But the State may perhaps mitigate it somewhat by helping to procure a good system of commercial statistics, for unsound speculation thrives in ignorance, and may be to some extent prevented by better knowledge. The socialist demand for commercial statistics is therefore to be approved. They would benefit everybody but the dishonest dealer. They would not only be a corrective against unsound speculation, but they would tend to smooth the conflicts between capital and labour about the rate of wages, and the working cla.s.s in America press the demand on the ground of their experience of the benefits they have already derived from the Labour Statistical Bureaux established in certain of the States there. Some of our own most weighty economic authorities are strongly in favour of a measure of this kind.

Mr. Jevons, for example, says: "So essential is a knowledge of the real state of supply and demand to the smooth procedure of trade, and the real good of the community, that I conceive it would be quite legitimate to compel the publication of requisite statistics. Secrecy can only conduce to the profit of speculators who gain from great fluctuations of prices. Speculation is advantageous to the public only so far as it tends to equalize prices, and it is therefore against the public good to allow speculators to foster artificially the inequalities of prices by which they profit. The welfare of millions, both of consumers and producers, depends on an accurate knowledge of the stocks of cattle and corn, and it would therefore be no unwarrantable interference with the liberty of the subject to require any information as to the stock in hand. In Billingsgate fish-market it has been a regulation that salesmen shall fix up in a conspicuous place every morning a statement of the kind and amount of their stock; and such a regulation, whenever it could be enforced on other markets, would always be to the advantage of every one except a few traders." ("Theory of Political Economy," p. 88.)

III. The next princ.i.p.al charge brought by socialists against the present order of things is that it commits a signal injustice against the labouring cla.s.s, by suffering the capitalists who employ them to appropriate the whole increase of value which results from the process of production, and which, as is alleged, is contributed entirely by the labour of the artizans engaged in the process. I have already exposed the fallacy of the theory of value on which this claim is founded, and I need not repeat here what for convenience sake has been stated in another place. (See chap. iii. pp. 160-6). Value is not const.i.tuted by time of labour alone, except in the case of commodities admitting of indefinite multiplication; it is const.i.tuted in all other cases by social utility; and the importance of this distinction is especially manifest in treating of the very point that comes before us here--the value of labour. Why is one kind of labour paid dearer than another? Why is an organizer of manual labour better paid than the manual labourer himself? Why is the railway chairman better paid than the railway porter? Or why has the judge a better salary than the policeman? Is it because he exerts more labour, more socially necessary time of labour?

No; the porter works as long as the chairman, and the policeman as long as the judge. Is it because more time of labour has been expended in the preparation and apprenticeship of the higher paid functionaries? No; because the railway chairman may have undergone no special training that thousands of persons with much poorer incomes have not also undergone, and the education of the judge cost no more than the education of other barristers who do not earn a twentieth part of his salary. The explanation of differences of remuneration like these is not to be found in different quant.i.ties of labour, but in different qualities of labour.

One man's work is higher, rarer, more excellent, possesses, in short, more social utility than another's, and for that reason is more valuable, as value is at present const.i.tuted. It is thus manifest that the theory which declares value to be nothing but quant.i.ty of labour, nothing but time of labour, is inconsistent with some of the most obvious and important phenomena of the value of different kinds of labour. Many forms of labour are much more remunerative than others, nay, much more remunerative than many applications of capital, and the difference of remuneration is in no way whatever connected with the quant.i.ty of labour or the time of labour undergone in earning it.

Socialists may perhaps answer that this _ought not_ to be so; that if things were as they should be, the railway chairman, the station-master, the inspector, the guard, and the porter would be paid by the same simple standard of the duration of their labour in the service of the line--a standard which would probably reverse the present gradation of their respective salaries; but if they make that answer, they change their ground; they no longer base their claim for justice to the labourer on value _as it is const.i.tuted_, but on value _as they think it ought to be const.i.tuted_. Their theory of value would in that case not be what it pretends to be, a scientific theory of the actual const.i.tution of value, but a utopian theory of its proper and just const.i.tution. It would be tantamount to saying, Every man, according to our ideas of of justice, ought to be paid according to the value of his work, and the value of his work, according to our ideas of justice, ought to be measured by the time--the socially necessary time--it occupied. But this whole argument is manifestly based on nothing better than their own arbitrary conceptions of justice, and it needs no great perspicacity to perceive that these conceptions of justice are entirely wrong. In fact, the common sense of men everywhere would unhesitatingly p.r.o.nounce it unjust to requite the manager who contrives, organizes, directs, with only the same salary as the labourer who executes under his direction, because, while both may spend the same time of labour, the service rendered by the one is much more _valuable_ than the service rendered by the other. Let every man have according to his work, if you will; but then, in measuring work, the true standard of its value is not its duration but its social utility, the social importance of the service it is calculated to render.

This criterion of social utility is the principle that ought to guide us in answering the question that is really raised by the particular socialist charge now under consideration, the question of the justice of interest on capital. Interest is just because capital is socially useful, and because the owner of capital, in applying it to productive purposes, renders a service to society which is valuable in the measure of its social utility. Of course the State might perform this service itself. It might compulsorily abstract from the produce of each year a sufficient portion to const.i.tute the raw materials and instruments of future production; but, as a matter of fact, the State does not do so.

It leaves the service to be rendered spontaneously by private persons out of their private means. The service rendered by these persons to production is as indispensable as the service rendered by the labourers, and the justice of interest stands on exactly the same ground as the justice of wages. The labourer cannot produce by labour alone, without materials and implements, any more than the capitalist can produce by materials and implements alone, without labour; and the possessor of capital needs a reward to induce him to advance materials and implements just as much as the labourer needs a reward to induce him to labour.

n.o.body will set aside a portion of his property to provide for future production if he is to reap no advantage from doing so, and if the produce will be distributed in exactly the same way whether he sets it apart or not. It would be as unjust as it would be suicidal to withhold the recompense to which this service is ent.i.tled, and without which n.o.body would do it.

The real question for socialists to answer is, not whether it is just to pay private capitalists for the service society accepts at their hands, but whether society can perform this service better, or more economically, without them; whether, in short, the abolition of interest would conduce to any real saving in the end? This practical question, crucial though it be, is one, however, to which they seldom address themselves--they prefer expatiating in cloudier regions. The question may not, with our present experience, admit of a definitive and authoritative answer; but the probabilities all point to the conclusion that capitalistic management of production, costly as it may seem to be, is really cheaper than that by which socialism would supersede it.

Capitalistic management is proverbially unrivalled for two qualities in which bureaucratic management is as proverbially deficient--economy and enterprise. Socialists complain much of the hosts of middlemen who are nourished on the present system, the heartless parasites who eat the bread of society without doing a hand's turn of real good; but their own plan would multiply vastly the number of unnecessary intermediaries depending on industry. Under the _regime_ of the capitalist there are, we may feel sure, no useless clerks or overseers, for he has the strongest personal interest in working his business as economically as possible. But with the socialist mandarinate, the interest lies the other way, and the tendency of the head officials would be to multiply their subordinates and a.s.sistants, so that by abolishing the capitalist, society would not by any means have got rid of middlemen and parasites.

There would be as much waste of labour as before. Lord Bra.s.sey is certainly right in attributing the industrial superiority of Great Britain as much to the administrative skill and economy of her employers as to the efficiency of her labourers. Individual capitalists are more enterprising, as well as more economical managers, than boards. Their keenly interested eyes and ears are ever on the watch for opportunities, for improvements, for new openings; and having to consult nothing but their own judgment, they are much quicker in adapting themselves to situations and taking advantage of turns of trade. They will undertake risks that a board would not agree to, and they will have entered the field and established a footing long before a manager can get his directors to stir a finger. Now this habit of being always on the alert for new extensions, and new processes, and new investments, is of the utmost value to a progressive community, and it cannot be found to such purpose anywhere as with the capitalistic despot the socialists denounce, whose zeal and judgment are alike sharpened by his hope of personal gain and risk of personal loss. Studnitz informs us that in 1878 he found the mills of New York standing idle, but those of Philadelphia all going, and his explanation is that the former were under joint-stock management and the latter belonged to private owners.

The present tendency towards a multiplication of joint-stock companies is a perfectly good one, because, for one thing, it helps to a better distribution of wealth; but society would suffer if this tendency were to be carried so far as to supersede independent private enterprise altogether, and if joint-stock companies were to become the only form of conducting business. And if private enterprise is more advantageous than joint-stock management, because it has more initiative and adaptability, so joint-stock management is for the same reason more advantageous than the official centralized management of all industry.[6]

If there is any force in these considerations, it seems likely that we should make a bad bargain, if we dismissed our capitalists and private employers, in the expectation that we could do the work more cheaply by our own public administration. And the mistake would be especially disappointing for this reason, that in the ordinary progress of society in wealth and security the rate of interest always tends to fall, and that various forces are already in operation that may not unreasonably be expected to reduce the rate of profits as well. Profits, as distinguished from interest, are the earnings of management, and the minimum which employers will be content to take is at present largely determined by the entirely wrong principle that their amount ought to bear a direct proportion to the amount of capital invested in the business. In spite of compet.i.tion, customary standards of this kind are very influential in the adjustment of such matters; they are the usual criteria of what are called fair profits and fair wages; they always carry with them strong persuasives to acquiescence; and then, from their very nature, they are very dependent on public opinion. I am not sanguine enough to believe with the American economist, President F. A.

Walker, that employers will ever come to be content with no other reward than the gratification of power in the management of a great industrial undertaking; but there is nothing extravagant in expecting that, through the influence of public opinion and the constant pressure of trade unions, a fairer standard of profits may be generally adopted, with the natural consequence of allowing a rise of wages.

But whether these expectations are well grounded or no, one thing is plain,--the only thing really material to the precise issue at present before us,--and that is, that while interest and profits may be both unfair in amount, just as rent may be, or wages, or judicial penalties, neither of them is unjust in essence, because they are merely particular forms of remunerating particular services, which are now actually performed by the persons who receive the remuneration, and which, under the socialist scheme, would have to be performed--and in all probability neither so well nor so cheaply--by salaried functionaries.

With these remarks, we may dismiss the specific charge of injustice brought by socialists against the present order of things, and the specific claim of right for the labouring cla.s.s which they prefer. Let us now submit their proposals to a more practical and decisive test--will they or will they not realize the legitimate aspirations, the ideal of the working cla.s.s? Does socialism offer a better guarantee for the realization of that ideal than the existing economy? I believe it does not. What is the ideal of the working cla.s.s? It may be said to be that they shall share _pari pa.s.su_ in the progressive conquests of civilization, and grow in comfort and refinement of life as other cla.s.ses of the community have done. Now this involves two things--first, progress; second, diffusion of progress; and socialism is so intent on the second that it fails to see how completely it would cut the springs of the first. Some of its adherents do a.s.sert that production would be increased and progress accelerated under a socialistic economy, but they offer nothing in support of the a.s.sertion, and certainly our past experience of human nature would lead us to expect precisely the opposite result. The incentives and energy of production would be relaxed. I have already spoken of the loss that would probably be sustained in exchanging the interested zeal and keen eye of the responsible capitalist employer for the perfunctory administration of a State officer. A like loss would be suffered from lightening the responsibility of the labourers and lessening their power of acquisition. Under a socialist _regime_ they cannot by any merit acquire more property than they enjoy in daily use, and they cannot by any fault fail to possess that. Now socialist labourers are not supposed, any more than socialist officials, to be angels from heaven; they are to carry on the work of society with the ordinary human nature which we at present possess; and in circ.u.mstances like those just described, unstirred either by hope or fear, our ordinary human nature would undoubtedly take its ease and bask contentedly in the kind providence of the State which relieved it of all necessity for taking thought or pains. The inevitable result would be a great diminution of production, which, with a rapidly increasing population (and socialism generally scouts the idea of restraining it), would soon prove seriously embarra.s.sing, and could only be obviated by a resort to the lash; in a word, by a return to industrial slavery. Now, with a lessening production, progress is clearly impossible, and the more evenly the produce was distributed, the more certain would be the general decline.

Socialists ignore the civilizing value of private property and inheritance, because they think of property only as a means of immediate enjoyment, and not as a means of progress and moral development. They would allow private property only in what is sometimes termed consumers'

wealth. You might still own your clothes, or even purchase your house and garden. But producers' wealth, they hold, should be common property, and neither be owned nor inherited by individuals. If this theory were to be enforced, it would be fatal to progress. Private property has all along been a great factor in civilization, but the private property that has been so has been much more producers' than consumers'. Consumers'

wealth is a limited instrument of enjoyment; producers' is a power of immense capability in the hands of the competent. Socialists are really more individualistic than their opponents in the view they take of the function of property. They look upon it purely as a means for gratifying the desires of individuals, and ignore the immense social value it possesses as a nurse of the industrial virtues and an agency in the progressive development of society from generation to generation.

There is still another and even more important spring of progress that would be stifled by socialism--freedom. Freedom is, of course, a direct and integral element in any worthy human ideal, for it is an indispensable condition for individual development, but here it comes into consideration as an equally indispensable condition of social progress. Political philosophers, like W. von Humboldt and J. S. Mill, who have pled strongly for the widest possible extension of individual freedom, have made their plea in the interests of society itself. They looked on individuality as the living seed of progress; without individuality no variation of type or differentiation of function would be possible; and without freedom there could be no individuality. Under a _regime_ of socialism freedom would be choked. Take, for example, a point of great importance both for personal and for social development, the choice of occupations. Socialism promises a free choice of occupations; but that is vain, for the relative numbers that are now required in any particular occupation are necessarily determined by the demands of consumers for the particular commodity the occupation in question sets itself to supply. Freedom of choice is, therefore, limited at present by natural conditions, which cause no murmuring; but these natural conditions would still exist under the socialist _regime_, and yet they would perforce appear in the guise of legal and artificial restrictions. It would be the choice of the State that would determine who should enter the more desirable occupations, and not the choice of the individuals themselves. The accepted would seem favourites; the rejected would complain of tyranny and wrong. Selection could not be made by compet.i.tive examination without treason against the principles of a socialist state, nor by lot without a sacrifice of efficiency. The same difficulties would attend the distribution of the fertile and the poor soils. Even consumption would not escape State inquisition and guidance, for an economy that pretended to do away with commercial vicissitudes must take care that a change of fashion does not extinguish a particular industry by superseding the articles it produces. Socialism would introduce, indeed, the most vexatious and all-encompa.s.sing absolutist government ever invented. It would impose on its central executive functions that would require omniscience for their discharge, and an authority so excessive that E. von Hartmann is probably right in thinking that obedience could only be secured by fabricating for it the illusion of a Divine origin and reinforcing loyalty by superst.i.tion. The extensive centralized authority given to government in France has undoubtedly been one of the main causes of the instability of the political system of that State, and a socialist rule, with its vastly greater prerogatives, could only maintain its ascendancy by being fabulously hedged with the divinity of a Grand Lama. A military despotism would be at least more consistent with modern conditions; but a military despotism socialists abjure, and yet believe that they can exact from free and equal citizens an almost animal submission to an authority they elect themselves.

Progress is only possible on the basis of industrial freedom and private property; and in the socialist controversy there is no question about the necessity of progress. That is an a.s.sumption common to both sides; socialists of the present day acknowledge it as implicitly as the general opinion of the time. They are no sharers in Mill's admiration for the stationary state; they utterly ridicule his Malthusian horror of a progressive population; and, profoundly impressed as they are with the vital need for a better distribution of wealth, they hesitate to sacrifice for it an increasing production. On the contrary, they claim for their system that it would stimulate progress, as well as spread its blessings, better than the system that exists, and La.s.salle at all events frankly declared that unless socialism increased production, it would not be economically justifiable. But tried by this test, we have seen reason to find it wanting. The problem to which it addresses itself, the inst.i.tution of a sound and healthy distribution of wealth, is probably the greatest social problem of the time; but socialism fails to solve it, because no distribution can be sound and healthy which destroys the conditions of further progress. The true solution must adhere to the lines of the present industrial system, the lines of industrial freedom and private property.

It is one thing, however, to say that the principles of industrial freedom and private property are essential to a healthy distribution, and it is quite another thing to hold that the distribution is then healthiest and most perfect when these principles enjoy the most absolute and unconditional operation. If socialism errs by suppressing them, _laissez-faire_ runs into the opposite error of giving them unlimited authority. _Laissez-faire_ is perhaps hardly any longer a living faith. But even when men still believed in the economic harmonies, they always taught that the best and justest distribution of wealth was that which issued out of the free compet.i.tion of individuals, and that if this distribution ever turned out to be really faulty or partial, it was only because the compet.i.tion was not free or perfect enough; because some of the compet.i.tors were not sufficiently enlightened as compared with others, or not sufficiently mobile with their labour or capital; in other words, because the compet.i.tion was not conducted on equal terms. This theory manifestly makes the justice of the distribution effected by free compet.i.tion to depend on the false a.s.sumption of the natural equality of the compet.i.tors, and therefore as manifestly implies that unless men are equal in talents and opportunities, the system of unlimited freedom may produce a distribution that is seriously unjust. _Laissez-faire_ thus had a germ of socialism in its being, and even when its ascendancy seemed to be highest, it was already being practically replaced by a larger and more energetic theory of social politics which imposed on the State the duty of correcting many of the evils of the present distribution of wealth, and promoting, if not equality of all conditions, yet certainly amelioration of the inferior conditions. Instead of maintaining equal freedom for weak and strong, the State was to take the part of the weak against the strong, in order to secure to all citizens a real partic.i.p.ation in progressive civilization. It is said truly enough that the effect of such interferences is not to destroy liberty, but to fulfil it, because, apart from them, the labour contract is no more a free contract for labourers living from hand to mouth than the capitulation of a beleaguered garrison when their provisions have run down is a free capitulation, and the legal intervention is necessary in order to make the men first really free. Legal freedom is no more an end in itself than legal intervention; both are merely means of giving men real freedom and enabling them effectually to work out their complete and normal vocation as human beings. I shall treat more fully of the true theory of social politics in a subsequent chapter on State Socialism; but here, in connection with its relation to industrial freedom, it will be enough to say that the restraints it proposes are neither meant nor calculated to impair real freedom, and that it is separated from socialism by its constant care to develop rather than supersede individual responsibility, to facilitate the spread of private property rather than suppress it, and to remove obstacles that are making men's own efforts a nullity rather than to subst.i.tute for those efforts the providence of the State.

If, then, there is any truth in these considerations--if the general acquisition of private property, and not its universal abolition, is the demand of the working-cla.s.s ideal--then the business of social reform at present ought to be to facilitate the acquisition of private property; to multiply the opportunities of industrial investment open to the labouring cla.s.ses, and to devise means for credit, for saving, for insurance, and the like. While, for reasons already explained, I have been unable to agree with Mr. Cairnes' despondent view of the economic position of the wage-paid labourers, I am entirely at one with him in conceiving the surest means to their progressive amelioration to lie in partic.i.p.ation, by one means or another, in industrial capital. Much good may be done by a wider extension of trade unions, and a better organization of working cla.s.s insurance; but the labourers must not rest content till they have found their way, under the new conditions of modern trade, to become capitalists as well as labourers. Co-operative production seems the most obvious solution of this problem; but it is a mischievous, though a common mistake, to regard it as the only solution.

The fortunes of the working cla.s.s are not all embarked in one bottom, and their salvation may be expected to fulfil itself in many ways. I cannot share in the lamentation sometimes made because some of the earlier productive a.s.sociations have departed from the strict and original form of co-operation, under which all the shareholders in the business were labourers and all the labourers shareholders. In the present situation of affairs, variety of experiment is desirable, for only out of many various experiments can we eventually discover which are most suitable to the conditions and fittest to survive. Co-operative production would perhaps have been further advanced to-day, if co-operators had not been so faithful in their idolatry of their original ideal, and had fostered instead of discouraging variations of type, which may yet justify their superiority by persisting and multiplying. As it is, co-operative production has not been such a complete failure as it is sometimes represented; it can show at least a few very signal tokens of success and great promise. It is often declared to be inapplicable to the great industries, because they require more capital and better management than co-operative working men are usually able to furnish. But in the town and neighbourhood of Oldham there are 100 co-operative spinning mills, with a capital of close on 8,000,000. They are managed entirely by working men, their capital is contributed in 5 shares by working men, and they have during the last ten years paid dividends varying from 10 to 45 per cent. These are joint-stock companies rather than co-operative societies in the stricter sense; but they are joint-stock companies of working men, and they furnish to working men in an effective and successful way that partic.i.p.ation in the industrial capital of the country which is really what is wanted. The Oldham workman prefers to hold shares in a different mill from that he works in, because he feels himself more free to exercise his voice as a shareholder there, and he prefers to carry his labour to the mill where he gets the best wages and the best treatment, without being obliged to change his investment when he changes his workshop. The advantage of the Oldham system over the stricter co-operative type is therefore the old advantage of freedom. It suits the English character better, and the only wonder is why it is still, after more than sixteen years' successful experience, confined exclusively to a single locality. It has been stated that there are a thousand operatives working at these mills who are worth 1000 to 2000, and besides the mills, there are co-operative stores, building societies, and other working-cla.s.s companies in Oldham, with a combined capital of 3,500,000. In all these ways the zone of partic.i.p.ators in property broadens, and hope and stimulus are introduced into the labourer's life. The truth seems to be that the great need of the working man is not so much money to invest as opportunity and motive for investment. The amount lodged in savings banks, the amount raised by trade unions, the amount wasted in drink, the amount wasted in inefficient household economy, which might be much lessened by better instruction in the arts of cookery and household management--all show that large numbers of the working cla.s.s possess means at their disposal to const.i.tute at least the beginnings of their emanc.i.p.ation, if good opportunities were open to them of using it advantageously in productive enterprise. Co-operation and profit-sharing are not the only means by which this might be realized. Private firms might initiate a practice of reserving a certain amount of their capital to const.i.tute a kind of stock for their workmen to invest their savings in, under--if that were legalized--limited liability. One advantage of this plan over the ordinary industrial partnership would be, that while, like it, it would enhance the workmen's zeal in their work, it could not possibly have the effect of reducing wages, because the stock would be a free investment, and would probably not be taken up by all or by more than a majority of the workmen. Again, with a reform of our land laws, small investments in land will certainly be facilitated, especially among the agricultural cla.s.s.

Socialists would no doubt condemn all such investments for the same reason as they generally condemn the co-operative movement, because they would tend to create "a new cla.s.s with one foot in the camp of the _bourgeoisie_ and the other in the camp of the proletariat." But that is precisely one of their chief advantages, and in making this objection socialists only betray how completely they ignore the operation of those portions of human nature that are the real forces and factors of social progress. It is only by linking a lower cla.s.s to a higher that you can raise the level of the whole, and every pathway the working cla.s.s makes into a comfortable equality with the lower _bourgeoisie_ will const.i.tute at once an opportunity and a spur for others to follow them, which will exercise an elevating effect upon the entire body. If it were generally open to all the labouring cla.s.ses to begin by being wage-labourers and end by sharing in some degree in the industrial capital of the country, this would raise the level of the whole--of those who after all remained wage-labourers still, as well as of those who succeeded in gaining a better competency. It would give them all something to keep looking forward to during their working life, something to save for and strive after, and a higher standard of comfort would get diffused and considered necessary in the cla.s.s generally through the example of the better off. For the more comfortably situated working men--whether they have won their comfort by co-operation or otherwise--have not pa.s.sed out of their cla.s.s. They have, as is alleged, one foot in the camp of the proletariat still. They live and move and have their being among working people, and const.i.tute by their presence and social connections a stimulating and elevating agency. It is through connections like these that the ideas of comfort and culture that prevail among an upper cla.s.s permeate through to a lower, and thus elevate the general standard of living upon which the level of wages so much depends. Even the minor inequalities in the ranks of the working cla.s.s are not without their use in quickening their exertions to maintain the standard of respectability which they have won or inherited. Economists were not wrong in ascribing so much influence as they always have done to men's tenacity in adhering to their customary standard of life. Many striking ill.u.s.trations of its beneficial operation might be mentioned. I select one, because it concerns an aspect of the condition of the labouring cla.s.ses of this country that is at present attracting much attention--their house accommodation. In all our large cities, the house accommodation of the working cla.s.s has. .h.i.therto been about as bad as bad could be, but there is one singular exception--it is Sheffield. Porter drew attention to the fact many years ago. "The town itself," he says, "is ill built and dirty beyond the usual condition of English towns, but it is the custom for each family among the labouring population to occupy a separate dwelling, the rooms of which are furnished in a very comfortable manner.

The floors are carpeted, and the tables are usually of mahogany. Chests of drawers of the same material are commonly seen, and so in many cases is a clock also, the possession of which article of furniture has often been pointed out as the certain indication of prosperity and of personal responsibility on the part of the working man." ("Progress of the Nation," p. 523.) The same condition of things still prevails, for at the meeting of the British a.s.sociation in Sheffield in 1879 Dr. Hime read a paper on the vital statistics of the town, in which he says:--"Although handsome public buildings are not a prominent feature in the town, still there are few towns in England where the great bulk of the population is so well provided for in the way of domestic architecture. Overcrowding is very rare; cellar dwellings are unknown; and almost every family has an entire house, a most important agent in securing physical as well as moral health." (Transactions of British a.s.sociation, 1879.) Now this is a fact of the highest interest, and we naturally ask what peculiarity there is in the trade or circ.u.mstances of Sheffield, in the first place, to create such an exceptional excellence in the standard of working cla.s.s house accommodation, and, in the next place, to maintain it. One thing is certain: it is not due to better wages. There are trades in Sheffield very highly paid, but the labourers belonging to them are described by the anonymous author of "An Inquiry into the Moral, Social, and Intellectual Condition of the Industrious Cla.s.ses of Sheffield" (London, 1839), as being much less comfortable in their circ.u.mstances than the others. This writer speaks of some trades in which "the workmen are steady, intelligent, and orderly, seldom the recipients of charity or parochial relief. They depend on their own exertions for the respectable maintenance of their families, and