e. The closing of works which are disadvantageously placed or are otherwise unnecessary to furnish the requisite supply at profitable prices.

f. The raising of prices to a level which will give a living basis of steady production and profit.

That all these economies are useful to the capitalists who form Trusts will be obvious. How far they are socially useful is a more difficult question. Reflection, however, will make one thing evident, viz. that though the public may share that part of the advantage derived from the more economical use of large capitals, it cannot share that portion which is derived from the absence of compet.i.tion. If two or more Trusts or aggregations of capital are still in actual or even in potential compet.i.tion, the public will be enabled to reap what gain belongs to larger efficient production, for it will be for the interest of each severally to sell at the lowest prices; but if a single Trust rule the market, though the economic advantage of the Trust will be greater in so far as it escapes the labour of all compet.i.tion, there will be no force to secure for the public any share in this advantage. The advantageous position enjoyed by a Trust will certainly enable its owners at the same time to pay high profits, give high wages, and sell at low prices. But while the force of self-interest will secure the first result, there is nothing to guarantee the second and third. There is no adequate security that in the culminating product of capitalistic growth, the single dominant Trust or Syndicate self-interest will keep down prices, as is often urged by the advocates of Trust. It is true that "they have a direct interest in keeping prices at least sufficiently low not to invite the organization of counter-enterprises which may destroy their existing profits."[39] But this consideration is qualified in two ways:--_a_. Where Trust is formed or a.s.sisted by the possession of a natural monopoly, i.e. land, or some content of land, absolutely limited in quality, such potential compet.i.tion does not exist, and nothing, save the possibility of subst.i.tuting another commodity, places a limit on the rise of price which a Trust may impose on the public.. Although the fear of potential compet.i.tion will prevent the maintenance of an indefinitely high price it will not necessarily prevent such a rise of price as will yield enormous profits, and form a grievous burden on consumers. For a strongly-const.i.tuted Trust will be able to crush any competing combination of ordinary size and strength by a temporary lowering of its prices below the margin of profitable production, the weapon which a strong rich company can always use successfully against a weaker new compet.i.tor.

But though a Trust with a really strong monopoly, and rid of all effective compet.i.tion, will be able to impose exorbitant and oppressive prices on consumers, it must be observed that it is not necessarily to its interest to do so. Every rise of price implies a fall off in quant.i.ty sold; and it may therefore pay a Trust better to sell a large quant.i.ty at a moderate profit than a smaller quant.i.ty at an enormous profit. The exercise of the power possessed by the owners of a monopoly depends upon the proportionate effect a rise of price will have upon the sale. This again depends upon the nature and uses of the commodity in which the Trust deals. In proportion as an article belongs to the "necessaries" of life, a rise of price will have a small effect on the purchase of it, as compared with the effect of a similar rise of price on articles which belong to the "comforts" or "luxuries" of life, or which may be readily replaced by some cheaper subst.i.tute. Thus it will appear that the power of a Trust or monopoly of capital is liable to be detrimental to the public interest--1st. In proportion as there is a want of effective existing compet.i.tion, and a difficulty of potential compet.i.tion. 2nd. In proportion as the commodity dealt in by the Trust belongs to the necessaries of life.

-- 5. Steps in the Organization of labour.--The movements of labour show an order closely correspondent with those of capital. As the units of capital seek relief from the strain and waste of compet.i.tion by uniting into ma.s.ses, and as the fiercer compet.i.tion of these ma.s.ses force them into ever larger and closer aggregates, until they are enabled to obtain partial or total relief from the compet.i.tive strife, so is it with labour. The formation of individual units of labour-power into Trades Unions, the amalgamation of these Unions on a larger scale and in closer co-operation, are movements a.n.a.logous to the concentration of small units of capital traced above. It is not necessary to follow in detail the concentrative process which is gradually welding labour into larger units of compet.i.tion. The uneven pace at which this process works in different places and in various trades has prevented a clear recognition of the law of the movement. The following steps, not always taken however in precisely the same order, mark the progress--

1. Workers in the same trade in a town or locality form a "Union," or limited co-operative society, the economic essence of which consists in the fact that in regard to the price and other conditions of their labour they act as a complex unit. Where such unions are strongly formed, the employer or body of employers deals not with individual workmen, but with the Union of workmen, in matters which the Union considers to be of common interest.

2. Next comes the establishment of provincial or national relations between these local Unions. The Northumberland and Durham miners will connect their various branches, and will, if necessary, enter into relations with the Unions of other mining districts. The local Unions of engineers, of carpenters, &c., are related closely by means of elected representatives in national Unions. In the strongest Unions the central control is absolute in reference to the more important objects of union, the pressure for higher wages, shorter hours, and other industrial advantages, or the resistance of attempts to impose reductions of wages, &c.

3. Along with the movement towards a national organization of the workers in a trade, or in some cases prior to it, is the growth of combined action between allied industries, that is to say, trades which are closely related in work and interests. In the building trades, for example, bricklayers, masons, carpenters, plasterers, plumbers, painters and decorators, find that their respective trade interests meet, and are interwoven at a score of different points. The sympathetic action thus set up is beginning to find its way to the establishment of closer co- operation between the Unions of these several trades. The different industries engaged in river-side work are rapidly forming into closer union. So also the various mining cla.s.ses, the railway workers, civil servants, are moving gradually but surely towards a recognition of common interests, and of the advantage of close common action.

4. The fact of the innumerable delicate but important relations which subsist among cla.s.ses of workers, whose work appears on the surface but distantly related, is leading to Trade Councils representative of all the Trade Unions in a district. In the midland counties and in London these general Trade Councils are engaged in the gigantic task of welding into some single unity the complex conflicting interests of large bodies of workmen.

5. An allusion to the attempts to establish international relations between the Unions of English workmen and those of foreign countries is important, more as indicating the probable line of future labour movement, than as indicating the early probability of effective international union of labour. Though slight spasmodic international co- operation of workers may even now be possible, especially among members of English-speaking races, the divergent immediate interests, the different stages of industrial development reached in the various industrial countries, seem likely for a long time at any rate to preclude the possibility of close co-operation between the united workers of different nations.

-- 6. Parallelism of the Movements in Capital and Labour.--Now this movement in labour, irregular, partial, and incomplete as it is, is strictly parallel with the movement of capital. In both, the smaller units become merged and concentrated into larger units, driven by self- interest to combine for more effective compet.i.tion in larger ma.s.ses. The fact that in the case of capital the concentration is more complete, does not really impair the accuracy of the a.n.a.logy. Small capitals, when they have co-operated or formed a union, are absolutely merged, and cease to exist or act as individual units at all. A "share" in a business has no separate existence so long as it is kept in that business. But the small units of labour cannot so absolutely merge their individuality. The capital-unit being impersonal can be absolutely merged for common action with like units. The labour-unit being personal only surrenders part of his freedom of action and compet.i.tion to the Union, which henceforth represents the social side of his industrial self. How far the necessity of close social action between labour-units in the future may compel the labourer to merge more of his industrial individuality in the Union, is an open question which the future history of labour-movements will decide.

The slow, intermittent, and fragmentary manner in which labour-unions have been hitherto conducted even in the stronger trades, is a fact which has perhaps done more to hide the true parallelism in the evolution of capital and labour. The path traced above has not yet been traversed by the bulk of English working men, while, as has been shown, working women have hardly begun to contemplate the first step. But the uneven rate of development, in the case of capital and labour, should not blind us to the law which is operating in both movements. The representative relation between capital and labour is no longer that between a single employer and a number of individual working men, each of the latter making his own terms with the former for the sale of his labour, but between a large company or union of employers on the one hand, and a union of workmen on the other. The last few years have consolidated and secured this relation in the case of such powerful staple industries in England as mining, ship-building, iron-work, and even in the weaker low-skilled industries the relation is gradually winning recognition.

-- 7. Probabilities of Industrial Peace.--This concentrative process at work in both capital and labour, consolidating the smaller industrial units into larger ones, and tending to a unification of the ma.s.ses of capital and of labour engaged respectively in the several industries, is at the present time by far the most important factor of industrial history. How far these two movements in capital and in labour react on one another for peace or for strife is a delicate and difficult question. Consideration of the common interest of capital and labour dependent on their necessary co-operation in industry might lead us to suppose that along with the growing organization of the two forces there would come an increased recognition of this community of interest which would make constantly and rapidly for industrial peace. But we must not be misled by the stress which is rightly laid on the ident.i.ty of interest between capital and labour. The ident.i.ty which is based on the general consideration that capital and labour are both required in the conduct of a given business, is no effective guarantee against a genuine clash of interests between the actual forms of capital and the labourers engaged at a given time in that particular business. To a body of employes who are seeking to extract a rise of wages from their employers, or to resist a reduction of wages, it is no argument to point out that if they gain their point the fall of profit in their employers'

business will have some effect in lowering the average interest on invested capital, and will thus prevent the acc.u.mulation of some capital which would have helped to find employment for some more working men.

The immediate direct interests of a particular body of workmen and a particular company of employers may, and frequently will, impel them to a course directly opposed to the wider interests of their fellow- capitalists or fellow-workers. But it is evident that the smaller the industrial unit, the more frequent will these conflicts between the immediate special interest and the wider cla.s.s interest be. Since this is so, it would follow that the establishment of larger industrial units, such as workmen's unions and employers' unions, based on a cancelling of minor conflicting interests, will diminish the aggregate quant.i.ty of friction between capital and labour. If there were a close union between all the river-side and carrying trades of the country, it is far less likely that a particular local body of dock-labourers would, in order to seize some temporary advantage for themselves, be allowed to take a course which might throw out of work, or otherwise injure, the other workers concerned in the industries allied to theirs. One of the important educative effects of labour organizations will be a growing recognition of the intricate _rapport_ which subsists not only between the interests of different cla.s.ses of workers, but between capital and labour in its more general aspect. This lesson again is driven home by the dramatic scale of the terrible though less frequent conflicts which still occur between capital and labour. Industrial war seems to follow the same law of change as military war. As the incessant bickering of private guerilla warfare has given way in modern times to occasional, large, organized, brief, and terribly destructive campaigns, so it is in trade. In both cases the aggregate of friction and waste is probably much less under the modern _regime_, but the dread of these dramatic lessons is growing ever greater, and the tendency to postponement and conciliation grows apace. But just as the fact of a growing ident.i.ty in the interest of different nations, the growing recognition of that fact, and the growing horror of war, potent factors as they seem to reasonable men, make very slow progress towards the subst.i.tution of international arbitration for appeals to the sword, so in industry we cannot presume that the existence of reasonable grounds for conciliation will speedily rid us of the terror and waste of industrial conflicts. It is even possible that just as the speedy formation of a strong national unity, like that of Prussia under Frederick the Great, out of weak, disordered, smaller units, may engender for a time a bellicose spirit which works itself out in strife, so the rapid rise and union of weak and oppressed bodies of poorer labourers make for a shortsighted policy of blind aggression. Such considerations as this must, at any rate, temper the hopes of speedy industrial pacification we may form from dwelling on the more reasonable effects and teaching of organization. Although the very growth and existence of the larger industrial units implies, as we saw, a laying aside of smaller conflicts, we cannot a.s.sume that the forces at present working directly for the pacification of capital and labour, and for their ultimate fusion, are at all commensurate in importance with the concentrative forces operating in the two industrial elements respectively. It is indisputably true that the recent development of organization, especially of labour unions, acts as a direct restraint of industrial warfare, and a facilitation of peaceable settlements of trade disputes. Mr. Burnett, in his Report to the Board of Trade, on Strikes and Lock-outs in 1888, remarks _a propos_ of the various modes of arbitration, that "these methods of arranging difficulties have only been made possible by organization of the forces on both sides, and have, as it were, been gradually evolved from the general progress of the combination movement."[40]

Speaking of Trade Unions, he sums up--"In fact the executive committees of all the chief Unions are to a very large extent hostile to strikes, and exercise a restraining influence"--a judgment the truth of which has been largely exemplified during the last two or three years. But our hopes and desires must not lead us to exaggerate the size of these peaceable factors. _Conseils de prud'hommes_ on the continent, boards of arbitration and conciliation in this country, profit-sharing schemes in Europe and America, are laudable attempts to bridge over the antagonism which exists between separate concrete ma.s.ses of capital and labour. The growth of piecework and of sliding scales has effected something. But the success of the Board of Conciliation and Arbitration in the manufactured iron trade of the north of England has not yet led to much successful imitation in other industries. Recent experience of formal methods of conciliation and of sliding scales, especially in the mining, engineering, and metal industries, as well as the failure of some of the most important profit-sharing experiments, shows that we must be satisfied with slow progress in these direct endeavours after arbitration. The difficulty of finding an enduring scale of values which will retain the adherence of both interests amidst industrial movements which continually tend to upset the previously accepted "fair rates," is the deeper economic cause which breaks down many of these attempts. The direct fusion of the interests of employers and employed, and in some measure of capital and labour, which is the object of the co-operative movement, is a steadily growing force, whose successes may serve perhaps better than any other landmark as a measure of the improving _morale_ of the several grades of workers who show themselves able to adopt its methods. But while co-operative distribution has thriven, the success of co-operative workshops and mills has. .h.i.therto been extremely slow. A considerable expansion of the productive work of the co-operative wholesale societies within the last few years offers indeed more encouragement. But at present only about 2 per cent. of English industry and commerce, as tested by profits, is under the conduct of co- operative societies. Hence, while it seems possible that the slow growth in productive co-operation, and the more rapid progress of distributive co-operation, may serve to point the true line of successful advance in the future, the present condition of the co-operative movement does not ent.i.tle it to rank as one of the most powerful and prominent industrial forces. Though it may be hoped and even predicted that each movement in the agglomerative development of capital and labour which presents the two agents in larger and more organized shape, will render the work of conciliation more peremptory and more feasible, it must be admitted that all these conciliatory movements making for the direct fusion of capital and labour, are of an importance subordinate to the larger evolutionary force on which we have laid stress.

We see then the mult.i.tudinous units of capital and labour crystallizing ever into larger and larger ma.s.ses, moving towards an ideal goal which would present a single body of organized capital and a single body of organized labour. The process in each case is stimulated by the similar process in the other. Each step in the organization of labour forces a corresponding move towards organization of capital, and _vice versa_.

Striking examples of this imitative strategic movement have been presented by the rapid temporary organization of Australian capital, and by the effect of Dock Labourers' Unions in England in promoting the closer co-operation of the capital of shipowners. By this interaction of the two forces, the development in the organization of capital and labour presents itself as a _pari pa.s.su_ progress; or perhaps more strictly it goes by the a.n.a.logy of a game of draughts; the normal state is a series of alternate moves; but when one side has gained a victory, that is, taken a piece, it can make another move.

-- 8. Relation of Low-skilled Labour to the wider Movement.--The relation in which this large industrial evolution stands to our problem of the poor low-skilled worker is not obscure. In comparing the movement of capital with that of labour we saw that in one respect the former was clearer and more perfect. The weaker capitalist, he who fails to keep pace with industrial progress, and will not avail himself of the advantage which union gives to contending pieces of capital, is simply snuffed out; that is, he ceases to have an independent existence as a capitalist when he can no longer make profit. The laggard, ill-managed piece of capital is swept off the board. This is possible, for the capital is a property separable from its owner. The case of labour is different. The labour-power is not separable from the person of the labourer. So the labourer left behind in the evolution of labour organization does not at once perish, but continues to struggle on in a position which is ever becoming weaker. "Organize or starve," is the law of modern labour movements. The ma.s.s of low-skilled workers find themselves fighting the industrial battle for existence, each for himself, in the old-fashioned way, without any of the advantages which organization gives their more prosperous brothers. They represent the survival of an earlier industrial stage. If the crudest form of the struggle were permitted to rage with unabated force, large numbers of them would be swept out of life, thereby rendering successful organization and industrial advance more possible to the survivors. But modern notions of humanity insist upon the retention of these superfluous, low-skilled workers, while at the same time failing to recognize, and making no real attempt to provide against, the inevitable result of that retention. By allowing the continuance of the crude struggle for existence which is the form industrial compet.i.tion takes when applied to the low-skilled workers, and at the same time forbidding the proved "unfittest" to be cleared out of the world, we seem to perpetuate and intensify the struggle. The elimination of the "unfit" is the necessary means of progress enforced by the law of compet.i.tion. An insistence on the survival, and a permission of continued struggle to the unfit, cuts off the natural avenue of progress for their more fit compet.i.tors. So long as the crude industrial struggle is permitted on these unnatural terms, the effective organization and progress of the main body of low-skilled workers seems a logical impossibility. If the upper strata of low-cla.s.s workers are enabled to organize, and, what is more difficult, to protect themselves against incursions of outsiders, the position of the lower strata will become even more hopeless and helpless. If one by one all the avenues of regular low-skilled labour are closed by securing a practical monopoly of this and that work for the members of a Union, the superfluous body of labourers will be driven more and more to depend on irregular jobs, and forced more and more into concentrated ma.s.ses of city dwellers, will present an ever-growing difficulty and danger to national order and national health.

Consideration of the general progress of the working-cla.s.ses has no force to set aside this problem. It seems not unlikely that we are entering on a new phase of the poverty question. The upper strata of low-skilled labour are learning to organize. If they succeed in forming and maintaining strong Unions, that is to say, in lifting themselves from the chaotic struggle of an earlier industrial epoch, so as to get fairly on the road of modern industrial progress, the condition of those left behind will press the illogicality of our present national economy upon us with a dramatic force which will be more convincing than logic, for it will appeal to a growing national sentiment of pity and humanity which will take no denial, and will find itself driven for the first time to a serious recognition of poverty as a national, industrial disease, requiring a national, industrial remedy.

The great problem of poverty thus resides in the conditions of the low- skilled workman. To live industrially under the new order he must organize. He cannot organize because he is so poor, so ignorant, so weak. Because he is not organized he continues to be poor, ignorant, weak. Here is a great dilemma, of which whoever shall have found the key will have done much to solve the problem of poverty.

List of Authorities.

By far the most valuable general work of reference upon _Problems of Poverty_ is Charles Booth's _Labour and Life of the People_ (Williams & Norgate). By the side of this work on London may be set Mr Rowntree's _Poverty: A Story of Town Life_ (Macmillan). A large quant.i.ty of valuable material exists in _The Report of the Industrial Remuneration Conference_, and in the _Reports of the Lords' Committee on the Sweating System_ and of the _Labour Commission_. Among shorter and more accessible works dealing with the industrial causes of poverty and the application of industrial remedies, Toynbee's _Industrial Revolution_ (Rivington); Gibbins' _Industrial History of England (University Extension Series_, Methuen & Co.); and Jevons'_The State in Relation to Labour (English Citizen Series)_, will be found most useful. For a clear understanding of the relation of economic theory to the facts of labour and poverty, J.E. Symes' _Political Economy_ (Rivington), and Marshall's _Economies of Industry_are specially recommended.

Among the large ma.s.s of books and pamphlets bearing on special subjects connected with _Problems of Poverty_, the following are most useful. An asterisk is placed against the names of those which deserve special attention, and which are easily accessible.

Sweating and Its Causes.

* Booth, _Labour and Life of the People_.

* _Final Report of Lords' Committee on the Sweating System._

Marx, "Capital," chap. xv., _Machinery and Modern Industry_ (Sonnenschein).

Burnett, _Report to the Board of Trade on Sweating_ (Blue-Book, 1887).

"Socialism," _Fabian Essays_ (Walter Scott).

Booth, _Pauperism and the Endowment of Old Age_ (Macmillan).

J. A. Spender, _The State and Pensions in Old Age_ (Sonnenschein).

J. T. Arlidge, _Hygiene of Occupations_ (Rivington).

Co-Operation and Labour Organization.

* Webb, _History of Trade Unionism_ (Longman).

* Howell, _Conflicts of Capital and Labour_ (Chatto & Windus).

* Burnett, _Report of Trade Unions_ (Blue-Book).

Brentano, _Gilds and Trade Unions_ (Trubner).

* Baernreither, _a.s.sociations of English Working-men_.

Acland and Jones, _Working-men Co-operators_.

Gilman, _Profit-sharing between Employer and Employed_ (Macmillan).

_Co-operative Wholesale Society's Annual_.

Potter, _Co-operative Movement in Great Britain_ (Sonnenschein).

* Webb, _Industrial Democracy_ (Longman).

* Schloss, _Methods of Industrial Remuneration_ (Williams & Norgate).