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LABOUR AND CAPITAL

OTHER BOOKS BY OOLDWIN SMITH

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LABOUR AND CAPITAL

A LETTER TO A LABOUR FRIEND

GOLDWIN SMITH, D.C.L.

TStftt ^irA
THE MACMILLAN COMPANY

LONDON: MACMILLAN 4 CO, LTD.

1907

All njf*<i ruimi

COWMGMT, 1907,

Bv GOLDWIN SMITH.
S«up«iidelectrolyp«d FubUtked Januaiy, 190;.

Hnirait Ihnt

J. 8. CaBhlig * Co. — Btmriek ti Smith Co.

Norwood, Ifus., U.S.A.

PREFACE

A LETTER which appeared a short time ago
under the title of " Progress or Revolution ? "
is here amplified, partly in view of some sub-
sequent events.

'ABOUR AND CAPITAL

My Labour Friend,

All round the industrial horizon there are
signs of continuing storm ; and with industrial
strife a good deal of social bitterness and class
hatred is too evidently mingled. The outlook
13 threatening, not to industry and commerce
only, but to the general relations between
classes and even to the unity of the common-
wealth.

Old age is proverbially conservative, though
its interest in the present state of things is
reduced. But I do not think my opinions or
feelings have been greatly changed since, in
England, I defended with my pen the Unions
under the fire drawn on them by the Sheffield
outrages and stood on the platform of the
National Agricultural Union by the side of
Joseph Arch. If a good Labour candidate
has presented himself at an election, I have
voted for him, ever mindful of Pym's saying:

' LABOUR AND CAPITAL

"The best form of government is that which
do h actuate and inspire every part and mem
ber of a state to the common good." wl
Lou,s B anc. when he was in exile I cultiv^^^d
-dsh:p and listened with sympathy. thuS
cacy of National Workshops. Were my old

^17';.f°^"°^>-'^e.whomIlosttheoth^
day. .Ill alive, to his testimony also I might

I address you as my "Labour" Friend, but

hono r, " *''* '''' *'«^- "°- happily
honoured, almost privileged, belongs as much
to those who labour with the biain^asTo Zse
who labour with the hand. LaboureJ^^'
the brain, as well as labourers with the hand,
have their sufferings and their grievances fee^
weannes, would like shorter hours, and are
hable to being underpaid. Of the fo emo

mong the intellectual benefactors of manZd

not a few. m fact, have been greatly underpaid.

There is no denying that the wage-ea^ir

system applied to large works and grLb'I:
of workmen has brought its evils and its per^s
So has almost eveiy great economical chang

LABOUR AND CAPITAL 3

departmental stores, for instance ; which, while
they retrench the expense of distribution by
eliminating the middleman, kill the small
store. In my boyhood I saw the sky in Eng-
land red with the burning of threshing ma-
chines which, in the crisis of transition, were
taking the bread from the threshers. The in-
terest of the village weaver in his own work is
lost. The sharp separation, industrial and
social, between employer and employed is
another evil attendant upon the introduction
of production on the largj scale.

It would be hard to require the employer to
live in the smoke and din of his works. But
the complete separation of dwellings and the
absence of personal intercourse between the
owner of the works and the men have probably
contributed to estrangement. The factory-
hand takes his Sunday stroll to the suburbs
and -ees, perhaps not with the most pleasant
feeling, the mansion of the wealth which Karl
Marx, or a disciple of Karl Marx, has told him
ought to be his own. Often the master is a
corporation. There is no help for this, but
perhaps something might be done to soften

4 LABOUR AND CAPITAL

personal relations. Artisan villages under

antp ,r H "'"'^'°"' ^"^^ ^' S^'^--
cesses S.r-° "' "'" *° ^^^^ ^-" --

for Tt that wt ""u "°' '■ ^'^"S'^ ' "^^^ ^«
for t. that all that benevolence could do was

done The people feel that they are not free
Would ,t be possible that each trade should

have a stand „g conference with a Joint repr.
sentafon of the two orders for the settlen^ent of
ques K,ns con,.on to the interests of boh
Would this, besides its direct purpose, serve to

soften the general relation and reader negotia-
tion on pomts of difference less bitter? I
have been told that there is i„ England an
example of something of this kind

Besides the natural forces, there are two
^acto.m production: Capital and Labour
AH that IS not labour i. capital. The la-
Ws outfit is capita,. The fruits of mony
aid out in preparation for any skilled calling"

e t tied ir! ' '"'"^'°"' ''' -P'^^^ -d
entitled to share under that head. Capital

been erected into an industrial tyrant the
mortal enemy of labour. If capita/co Jd be

LABOUR AND CAPITAL 5

killed or scared away, in what condition can

we suppose that labour would be left? Karl

Marx, deriving his principle from William

Thompson, maintains that all production is the

fruit and the rightful property of labour alone.

Let him put labour without any capital, with

nothing but its bare sinews, on the most fertile

land or amidst the richest mines and see what

will be the result. The union of the two

elements in production is as necessary as that

of oxygen and hydrogen in the composition of

w.ter. Without capital we should be living in

caves and grubbing up roots with our nails.

Such in fact was the state of primitive man.

The man who first stored up some roots was

the first capitalist; and the man who first

loaned some of his roots on condition of future

repayment with addition was the first investor.

Labour, we are told, adds the value to the

raw material. Undoubtedly it does, and it

receives the price of the value added, in the

form of wages, which are distributed by the

equitable hand of Nature along the whole line

of labourers, from the miner, say, to the artisan

of the metal works, and from the grower of

* t^BOUR AND CAPITAL

cotton to the spinner; not excluding in either
case the master by whom the works haveten
^t up a„d by whose labour as manager and the
d.stnbuter of their products they are'ca J o„

.nH / "T°' ^ ™^S'"^d *h^t this vast
and yaned edifice of civilization and this mu-
tud,„ous march of human progress are en-
t^ly the work of the manual labourer and
that the manual labourer is entitled to the

ilt?^r"^r"^'°"^^-^°--i

It in ?? ?""' '''°"'" ''''"'''' ^---?

allv that I ""'''' ^"' ^^^°"^ g^"^-

ally that the present war has broken out, but

between the capitalist employing a body o

workmen f'"'""'"^' *° ^^S-^^*-- o^
workmen m factories or mines. The agitation

of rural labour in England under Josepf aZ
-med to subside when its victoi^h^adtl

Thf capitalist, besides the money which he
-ks, co„tHbutes labour of an indispens'bl
kmd as organizer and director, and is entitled
to payment for that labour as well as to the

LABOUR AND CAPITAL j

interest on his capital. Labour is entitled to
such wage as the capitalist, allowing for his
risk, can afford to give. A strike is a legiti-
mate engine for enforcing the concession of
such a wage, though not for any exaction
beyond. Further exaction must break the
trade. The capital which the employer puts
into the trade, you will observe, is not a thing
alien to labour, but its accumulated fruit.

It has been questioned whether, if the em-
ployer increases his profit by adding to his
risk of capital or by an improved policy, the
fruit of his own brain, the wage-earner becomes
thereby entitled to an increase of wages, sup-
posing his part in the production to remain
the same. The question is rather subtle, but
the plain answer is that in this as in all cases
wise policy as well as good feeling will lead
the employer to give his men as much interest
as possible in the prosperity of the concern.
Want of inducement to improving effort on
the part of the workman in the shape of a
tangible reward is, it must be owned, a weak-
ness in the factory system. He would be a
great benefactor who could find the cure.

■ LABOUR AND CAPITAL

The labour contributed by the employer in
the shape of direction is indispensable. Lack
of direction appears to have been the cause of
the ill-success of codperative works fully as
much as the lack of funds for their support
while they are waiting on the market. Nor
does the admission of the men to the councils
of the firm appear to have been generally a
success, as it was hoped it would. Besides
lack of identity of interest, there seems to be
too great a disparity of acquaintance with the
calls of the market and the policy which they
render necessary to the firm.

Apparently it can only be said in a general
way that any manifestation of the employer's
confidence in the men, anything that can help
to create a sense of partnership, anything that
can make the men feel more like human agents
of production, less like hammers and spindles
could not fail to do some good.

It is urged that capital is a monopoly and as
such controls wages. I fail to see how capital
IS a monopoly as a general fact, or otherwise
than as skilled labour may be called a mo-
nopoly. At all events I do not understand how

LABOUR AND CAPITAL g

the argument bears on the question of wages.
Comers, which are seldom successful, can hardly
affect that question. We do not hear th.-t the
wages of the Standard Oil Company are particu-
larly low. The larger the business is, the more
moderate will be the rate of profit required to pay
the capitalist his due. The higher consequently
will be the wage which he can afford to give.

There is nothing strange or invidious in
treating labour as a commodity, the value, and
consequently the wages, of which must be
regulated by the market. This is the case
with all labour, that of the statesman, the man
of science, the writer, as well as that of the
artisan; though the statesman, the man of
science, and the writer may draw their wages
in a different form. The right of an artisan to
a living wage cannot be asserted unless value
in labour can be given for the wage. Nor can
the right to employment be asserted when no
employment offers, in the case of an artisan
any more than in that of a lawyer for whom
there are no clients or a physician for whom
there are no patients. Another market must
be sought. This is the common lot

LABOUR AND CAPITAL

The capitalist, It is important to observe,
though the organizer, director, and paymaster,
is not the real employer. The real employer
is the purchaser of the goods, who cannot be
forced ' v any strike or pressure to give more
for the goods than he chooses and can afford.
Carried beyond a certain point, therefore, pres-
sure for an increased wage must either fail or
break the trade.

That capital can be rapacious and unjust to
those in its employ is too certain. It can be
worse than rapacious and unjust, it can be ter-
ribly heartless and cruel. Proof of this may
be read in the reports recording the treatment
of children in factories and of men, women,
and children in coal mines which horrified the
British people and compelled the interference
of the British Parliament. Men who were
guilty of such things may have been humane
and even amiable in other walks of life. The
lust of gain hardened their hearts. One of the
great mine-owners was a wealthy peer who de-
served to be sent to work in his own mines.
For self-defence on the part of the working-
man there wai in former days bitter need.

LABOUR AND CAPITAL

And there is need still. In marking the errors
and successes oi the industrial insurrection, we
will not forget the injustice of the previous
state of things. Nor will we forget that the
Protectionist manufacturer is as truly a mo-
nopolist in his way as the artisan who tries to
confine the right of labour to his union.

The masters are naturally combined in the
effort to keep down wages. In England the
me*' were formerly forbidden by law to com-
bine. They had to negotiate singly with the
employer, who had breakfasted, while they had
not Seven Devonshire labourers were sen-
tenced to transportation for administering a
combination oath. Liberalism coming into
power in England repealed the Combination
Laws. The Unions were formed and took
the field for the rights of the employed. Man-
ufacturing districts, where the employed were
gathered in masses, were the chief field of
Unionist effort. But the National Agricul-
tural Union was formed and wisely guided
to a peaceful victory by a leader whose prac-
tical motto was, as it ought to be that of us
all, Peace with Justice.

LABOUR AND CAPITAL

Unquestionably a large measure of justice
in the way of rectification of wages has been
won by Unionist effort, though at a terrible
sacrifice of peace as well as of money and of
the products of labour. Yet a dispute about
wages still threatens this continent with a depri-
vation of coal which would stop the wheels
of manufacturing industry, besides bringing
suffering into our homes.

Organizations formed for an aggressive pur-
pose are naturally apt to fall into the hands
of the most aggressive and least responsible
section. There would be fewer strikes if the
votes were always taken by ballot and every
married man had two. There is also a danger
of falling into the hands of aspiring leaders
whose field is industrial war. This danger
increases with the extension of the field, and
still further when to leadership in industrial
war is added leadership in political agitation,
with the importance which it bestows and the
prospects of advancement which it opens.

Power newly won and flushed with victory
seldom stops exactly at the line of right. From
enabling the wage-owner to treat on fair terms

LABOUR AND CAPITAL

with the employer, Unions seem now to be
going on to create for themselves a monopoly
of labour. To this the community never has
submitted and never can submit. Freedom of
labour is the rightful inheritance of every man
and the vital interest of all. The defensive
forces of the community are slow in gathering
to resist usurpation. But they will gather at
last, and when they do the end is certain. I
see it announced, with apparent complacency,
that a man has lost his trade and his liveli-
hood, with that of his family, if he has one,
because he sold goods without the Union label.
What more oppressive could the master class
in the time of its tyranny have done? A
Union is a self-constituted power. If a man
could be ruined by the edict of self-constituted
power for doing that which the law sanctions
him in doing, where would commercial liberty
or the general principle of liberty be? No
community can permit a self-constituted au-
thority to arrogate to itself such powers beyond
the law.

That age makes us conservative, I have
owned. But apart from conservatism or lib-

LABOUR AND CAPITAL

i;
i I '

eralism, there are principles of natural and civil
right to which I should seem to myself utterly
disloyal if I failed heartily to deprecate the use
of violence, insult, persecution, or annoyance of
any kind for the purpose of deterring any man
from making his bread and that of his family
by such honest calling as he may think fit, and
under any employer that he may choose, or
from making for that purpose a perfectly free
use of all his powers. Persuasion is, in all its
forms, of course, open to the promoters of
Unionism, and it surely has a good text in the
advantages of union, which are by no means
confined to the mere question of wages, but
may extend to all the common rights and
general relations of the members. Refusal to
work with non-union men is undeniably lawful,
though far from kind. One man's labour is
worth more than that of another in the same
craft, and every man has a right to work for
the wage, be it high or low, that his labour is
worth. To fix a rate of wage and say that no
man shall be allowed to work for less, thus
debarring from work all the value of those whose
labour is not up to that arbitrary mark, would

LABOUR AND CAPITAL ij

manifestly be unreasonable and unjust. Are
any of the "unemployed" who are crying in
British streets for work and bread the victims
of such arbitrary regulations? Might it be
practicable for the Unions to keep themselves
clear of any wrong-doing of this kind by grad-
ing labour ?

Society is revolting against trusts and com-
bines. Use of political power to enforce a
great monopoly of labour is surely what it
cannot be expected to bear.

Strikers should remember that they are con-
sumers as well as producers, buyers as well
as makers. A striker in exacting increased
wages makes the article dear to his own class
as well as to the other classes. He may raise
the price of his own product to himself. The
long strike of the building trade in Toronto
seems to have raised the price of artisan
dwellings.

Labour, if it is tempted to be unmeasured in
its demands, will do well to bear it in mind
that formidable competition may be coming on
the scene. In China there is a highly indus-
trial population reckoned at four hundred

LABOUR AND CAPITAL

I ',

millions to which these troubles apparently are
unknown, whose labour is steady and reliable.
The influence may not be directly felt, though
China and Japan are gaining a footing on the
western coast of America. But it is pretty
sure to work round. Besides, capital has wings.
Nor will mechanical invention sleep.

Desire of shorter hours of work is natural on
the part of the artisan and would not be less
natural in other callings, which also feel fa-
tigue. Nor is it at all unlikely that in callings
which tax the strength, the work of eight hours
may be worth as much as that of ten. Im-
provement in this line has been already made.
Every man may shorten his hours of work if
he thinks fit ; but no man can expect or in the
end will have power to draw pay for work
which is not done. In Ir.nds where socialism
prevails Unions seem inclined to vote them-
selves more and more freedom from work and
leisure for sport at the expense of what is called
"the State"; that is practically the tax-payer
or the class of tax-payers which has most
money and fewest votes. It is impossible that
to progress in this direction there should not

LABOUR AND CAPITAL

be an end. The over-taxed class will disap-
pear. That if less work is done, there will be
less in the aggregate to be sold and to pay
wages, needs no showing.

The State is constantly invoked as a sort of
Supreme Being with paternal duties and a fund
of its own for their fulfilment, while in reality
J: is either a mere abstraction or nothing but
the government of the day, without any fund
for its paternal bounty but that which it draws
by taxation from the community and on which
no class can have a special claim.

We were told to look for the cure of indus-
trial war and the end of strikes in judicial
arbitration. The result appears to have been
disappointing. It seems impossible tor a court
to forecast the changes of the market on which
the value of labour and the just rate of pay-
ment for it must depend. While the market is
rising and the court h s only to register the
fair demand for a proportionate rise in wages,
to which the employer readily consents, all goes
well. But when a fall in the market calls for a
reduction of wages, trouble, it would seem, is
sure to begin. Can any court by its award

LABOUR AND CAPITAL

ri'i' '

compel the employer to carry on business at a
loss, or the artisan to go on working for less
wages than he could get elsewhere ? Has there
been any clear case of practical enforcement of
such an award t Mediation may, of course, be
useful in bringing disputants together and
inducing reflection on both sides. The famous
agreement between the coal-owners and the
men appears not to have been a case of arbitra-
tion, properly speaking, but of mediation, though
brought about and morally enforced by public
opinion. It was not the award of a court of
law.

There has seemed to me sometimes to be a
needless air of peremptoriness in the demands
for increase of wages or other terms, and
generally a needless air of mistrust and hostility
toward employers which must enhance the
difficulty of concession. The best of tempers
can hardly fail to be tried by the intrusion of
a walking delegate. Why aggravate by dis-
courtesy the perils of the industrial situation ?
Capital and Labour must settle down in har-
mony at last, or both must be ruined.

Earnestly to be deprecated is the habit of

LABOUR AND CAPITAL

»9

giving the question of employer and employed
the aspect of a war between classes and repre-
senting the artisan as " a slave " ground down
by the tyranny of the class above him. No
one in his cooler moments can believe that a
man who is perfectly at liberty to dispose of
his own labour and has full political rights is
a slave.

Progress surely there has been, and its pace
has been greatly quickened during the last three
generations, notably in what concerns the posi-
tion and welfare of the wage-earning class.
Wages have risen, while improvements in pro-
duction and increased facilities of traffic have
added greatly to their purchasing range and
power. Education has been made free to the
people in England and elsewhere. Class legis-
lation, such as the Combination Law, has been
swept away ; with it has gone the class iniquity
of the old penal code. Factory laws, mining
laws, and other laws for the protection of the
labourer's life, health, and interest, have been
passed. Philanthropy has been active in pro-
viding means of health and enjoyment, such
as public parks, and the facilities for innocent

LABOUR AND CAPITAL

pleasure have largely increased. The political
franchise has been extended to the artisan, who
is no longer a ward of the State, suing to it for
paternal care and protection, but is a part of
the State himself, "Labour" has become a
title of distinction. Unionism has had its share
in this, but .o assuredly have good feeling
and the sense of duty in other quarters.

Greater way would have been made but for
wars and protective tariffs, of neither of which
can the artisan say that he has himself been
entireless guiltless. Artisans not a few in Eng-
land voted for the Boer War; and the Alien
Labour Laws and the Manufacturing Clause of
the American Copyright Act are due to the
pressure of the same class.

The existence of misery on a terrible scale
cannot be denied, and must touch the heart of
any man who has studied the history of his
ind. We can only trust that this is not the
end. But even as things are, there seems
reason to hope th-\t the inequality of happiness
is not nearly so great as the inequality of
wealth. Wealth cannot command health,
peace of mind, or domestic affection. A

LABOUR AND CAPITAL

mechanic skilled in his work and taking
pride in his skill, earning good wages and own-
ing his home, with a loving family round him,
is, we may fairly hope, a happy man ; not less
happy perhaps than the owner of millions.

In estimating the rate of progress, we have
to allow for an immense, in some cases reck-
less, increase of population, as well as for the
retarding influence of human faults and vices
which have not been confined to the moneyed
class.

The author of "Progress and Poverty"
absumes that poverty has increased with pro-
gress. He wrote in the country in which the
progr-;ss has been the greatest and the poverty
least.

Popular education, also, it must be admitted,
has increased sensibility to social disadvantage
and generated dista^vC for manual labour.
Distaste for manual labour is becoming dan-
gerous. But th'"- is the attendant shadow of
what all the world counts a blessing and a
gain.

It might probably be said that the envy
naturally kindled in the poorer orders by the

LABOUR AND CAPITAL

nearer view of the enjoyment of wealth given
them through the increase of their intelligence
and information is an ingredient in the present
discontent. The perception of the evil may be
clearer and keener, yet the grievance itself may
be, and surely is, in this case, less.

It ill becomes those who are living in the
enjoyment of opulence to preach prudence and
self-denial to those who are not. The grinding
monotony of factory work, making of the
worker a mere part of the machine, with its
unlovely surroundings, inevitably disposes to
expenditure on sensual pleasures and excite-
ments. But there is little doubt that wages
might be practically increased in many cases
by thrift and judicious expenditure on the part
of the earner. When we are told of miners
paying extravagant prices for rare viands, or
of a multitude of artisans going hundreds of
miles to see a football match, we allow for the
natural craving on he part of men bound to a
rough trade like mining for the gratification of
the appetite, and of men bound to a dull and
monotonous trade for excitement. But neither
class is laying up ease and comfort for old age.

LABOUR AND CAPITAL

Unionism is not Socialism. The two things
are perfectly distinct, though apt to be found
together as elements of the general ferment
and alike significant of the growing disposition
of the wage-earner to use his political power
for the purpose of transferring wealth from the
hands of the present possessors into his own.
Socialism if it prevailed would put an end to
Trade Unions.

Socialism is a natural growth; and, so far
as it has abstained from revolutionary methods
or incitements to violence, may have been not
only deserving of sympathy but useful as a
stimulant to us all. There has been a suc-
cession of Utopian visions from Plato to Sir
Thomas More, and from Sir Thomas More
to Bulwer and Bellamy. We have had social-
istic experiments. Those set on foot or origi-
nated by the excellent Robert Owen failed
mainly, it seems, through the disintegrating
action of the family on the community. Celi-
bate communities under a religious dictator,
such as the Oneida Community, had a transi-
tory success in their pe-uliar way, but taught
us nothing. There has been a variety of so-

S4 LABOUR AND CAPITAL

cialist organizations : Saint-Simonians, Fourier-
ists, Icarians, differing from each other in their
plans of universal regeneration, holding to-
gether in themselves for the destructive pro-
cess, but when it came to the constructive,
splitting and passing away. The last-born of
the series. Nihilism, by its name proclaims
itself destructive and has been presenting im-
pressive proof of its character.

This is manifestly an imperfect world, recog-
nizable as the work of omnipotent beneficence
only in so far as it may be tending toward a
goal. No man not devoid of sensibility can
have failed to reflect with sadness on the ter-
rible inequalities of the human lot. Why is
the life of one man a life of opulence, ease,
and refinement, that of another man Sv sadly
the reverse? Why are the gifts of nature,
health, strength, brain power, good looks, long
life, so unequally bestowed? Why is one
man born in a civilized and happy, another in
a barbarous and unhappy age? There is not
only "something," but a good deal, in the
world that is "amiss," and may, and we hope
will, be "unriddled by and by." Meantime,

LABOUR AND CAPITAL aj

the cottage, so long as it has bread and domes-
tic affection, might, if it could look into the
mansion, see that which would help to recon-
cile it to its lot.

The sharp line between rich and poor, on
which so much revolutionary rhetoric is
founded, has at our stage of civilization no
real existence. Many of the people classed as
"rich" by the spokesmen of labour, because
they are not mechanics, are, considering the
necessities of their social position, in reality
poor. The municipal demagogue who prom-
ises to take the taxes off the poor and -^ut
them on the rich is undertaking to Ly fresh
burdens on many people who are already
struggling with want. The millionnaire feels
the increase of a municipal tax comparatively
little. A professional man or tradesman strug-
gling with difficulties feels it much, and it is
at the special expense of these people that the
demagogue's bribe is paid.

By this impression about classes labour
organizations are led to put themselves out-
side the community and avow that they hold
and will use their political powers in the inter-

LABOUR AND CAPITAL

est of their own class alone. Thus to put
ourselves out of the community is to make
ourselves political and social outlaws. What
hope is there of general progress but in com-
mon effort for the common weal ?

That a monopoly of all wealth has been
usurped by a class which may rightfully be
despoiled of its prey, once more is an angry
dream. Social history tells of no such usurpa-
tion ; though aristocracies created by conquest
have for the time partitioned the land. The
present state of things, with all its inequalities,
deplorable as they sometimes are, has been
evolved by a gradual process in which varieties
of opportunity and capacity have played the
greatest part. In industrial and commercial
communities there is, in fact, no such sharp
division of classes as to give one class a pre-
tence for making war upon the other. Of the
millionnaires who are the special objects of
hostilitj' it would probably be found that far the
greater number, in the United States at least,
had sprung from that which fancies itself the
despoiled and down-trodden class.

For opposition on the part of the class

LABOUR AND CAPITAL 27

which he hates and seeks ro despc'l, tie level-
ler must be prepared. No -.ould th.> opposi-
tion be merely that of class-interest. Levelling,
it would seem, must be the end of progress for
all. It would be at once the end of trades
which supply the special demands of the mon-
eyed class and of the livelihoods of the artisans
of those trades.

Socialism has never told us distinctly, if it
has tried to tell us at all, what its form of gov-
ernment is to be. Can it devise a government
which shall hold all the instruments of produc-
tion, distribute our industrial parts, regulate
our remuneration, yet leave us free ? Without
freedom and personal choice of callings, how
could there be progress, how could there be
invention, how could there be dedication to
intellectual pursuits? Can the government
pick out inventors, scientific discoverers, phi-
losophers, men of letters, artists, set them to
work and assign them their rewards? By
what standard will it measure remuneration ?
The products of manual labour it might con-
ceivably measure ; but apparently those alone.
Nor is there anything to show us plainly

LABOUR AND CAPITAL

that the revolution would be made universal or
that unless it could be made universal it would
be a complete success. Suppose one or two
nations were to hold out for the principle of
private property, declaring themselves the
refuge of honest earnings and savings from
confiscation; is it not possible that these
nations might become the greatest seats of
wealth and commercial progress in the world ?

There is no use in applying to a whole class
epithets of abuse which only the worst mem-
bers of it can deserve. There is no use in
saying that any set of men have been " stealing
from another set their right to health, home,
and happiness." This is not the road to re-
form, it is the road to class-hatred, which indeed
some of the most violent Socialists do not shrink
from avowing; it is the road to social strife;
it is the road, if an attempt is made to despoil
and destroy a powerful class, to civil war.

The inequality of wealth is aggravated at
present both in its economical and moral aspect
by the accumulation of enormous fortunes.
Unquestionably this is an evil. But may it
not turn out a transient evil attending vast

I'i

LABOUR AND CAPITAL

speculations in great works and enterprises, in
themselves fruitful of good to the world at
large ? Mr. Brassey, that model of a captain of
industry, made a fortune of several millions
sterling ; but he made it by a moderate gain
on all his ventures, and by the extension of
the means of international communications he
conferred a great benefit in more ways than
one upon the world. The evil is partly
balanced by large benefactions to public insti-
tutions. The worst, as a rule, is not the
millionnaire, but his heir, often an idle sybarite,
who is a disgrace, and now, when the rumblings
of social earthquake are heard, a serious danger,
to society.

Proposals to forfeit to the State fortunes im-
morally made require for their safe application
an infallible test of morality. The attempt
would otherwise result in sweeping confiscation,
which perhaps in truth is what some of its
advocates desire ; and the end would be general
insecurity of property, with the inevitable con-
sequences to enterprise and production. If
gains are to be forfeited, losses must be made
good, or investment will cease. A millionnaire,

LABOUR AND CAPITAL

I •

however, if he has a social conscience, may
hesitate before he bequeaths powers of great
social mischief to his idle and profligate son.

As to the brood of financial brigands, gener-
ated in an age of the greed attending vast
speculations, it is to be hoped that public
justice is on their track. But public justice to
be effectual must be impartial. There will be
no reform if, while the common thief goes to
jail, the thief the extent of whose marauding
and whose guilt are far above the common, can
be received again into society and even wel-
comed back to his seat in the Senate.

That wealth or accumulated wealth is in it-
self an evil, let cynics or poets say what they
may, will hardly be said by any one who asks
himself how without wealth and accumulated
wealth there could have been any great under-
taking, it might almost be said, beyond mere
self-sustenance, any undertaking at all.

The heirs of wealth, on the other hand, if
they tender their own safety in these troublous
times, will try to make their privileges less in-
vidious, at the same time elevating themselves
and enhancing their enjoyment, as they would,

LABOUR AND CAPITAL

by mingling with the cup of pleasure some
drops at least of social duty. Let the owner of
wealth which he has not earned count it wages
for service due from him to the community.
He will find happiness in so doing.

In its industrial aspect Socialism apparently
aims at casting industry in a new mould, substi-
tuting cooperation for competition, putting an
end to wage-earning, making over all the instru-
ments of production to the State for the benefit
of those who are now the wage-earners, and
according to one version of the doctrine giving
to each man, not according to his work, but
according to his needs.

Under such a system, the State owning all
instruments of production, instead of there be-
ing an end of wage-earning, all the world would
be practically wage-earners, while savin" indis-
pensable to the increase of production, would
apparently cease.

Let our industrial Socialist friends figure
to themselves and explain to us the process of
taking all the instruments of production, which
apparently would ir.clude tools, out of the
hands in which they at present are and trans-

LABOUR AND CAPITAL

|i I

|l, '

r( '

,' I

ferring them to the State. Let them tell us at
the same time what their "State" is, how it
would differ from a government more despotic
than any government has ever been.

In the employers, organizers, and directors of
labour in its various spheres, including com-
munication by land and sea, the world has a
skilled staff on a vast scale. When all the
instruments of production are transferred, si-
multaneously, it would seem, to the socialist
organization, how would that staff be replaced ?

Competition, of which the ardent Communist
hopes to get rid, has no doubt its harsh aspect,
and we should be glad to change it for universal
cooperation. But it has been hitherto and so
far as we can see is likely to remain the indis-
pensable spur. After all, there is more of co-
operation already than we commonly suppose.
Let the Communist take any manufactured
article and trace out, as far as thought will go,
the industries which, in various ways, and in
different parts of the world, have contributed to
its production, including the making of machin-
ery, ship-building, and all the employments and
branches of trade ancillary to these; let him

LABOUR AND CAPITAL

consider how, by the operation of economic law,
under the system of industrial liberty, the price,
it may be a single penny, is distributed justly
among all these industries, and then let him ask
himself whether his government or his group of
governments is likely to do better than nature.

Cooperative stores in England have been a
splendid success, and a success unalloyed by
strife or antagonism of any kind, so that they
form an exceptionally pleasant incident in the
chequered course of industrial evolution. But
they are founded on no new principle, so far
as economical laws are concerned. They buy
goods and hire service in the cheapest and best
market, recognizing thereby the ordinary prin-
ciple of competition.

Something of a socialistic sentiment perhaps
enters into the sudden passion for objects in
themselves not novel or connected with social
revolution, such as public ownership of public
utilities: railroads, street cars, telegraphs, and
electric powers. These cases differ i.ot in
principle from those of post-offices or water-
works. To extension in this direction there is
no limit of principle. The only limits are that

LABOUR AND CAPITAL

ill i

Ill] I

of confidence in the trustworthiness of the gov-
emments, general or municipal, and that of
respect for the rights of those who have been
allowed to invest their capital under the pro-
tection of the law and disregard of whose
rights would be public rapine. It is not neces-
sary here to go into the question of municipal
enterprise or to present the financial condition
into which, by the prevailing fashion, British
cities have been led, and which is now creating
a reaction against the Progressist party.

We have had some more limited schemes of
magical improvement on which it is needless
here to dwell. One reformer proposed to turn
all private holders of land, even those who have
recently purchased from the State, out of their
freeholds and restore the title of nature; a
rather alarming undertaking, considering the
chance of resistance, to say nothing of the
injustice ; while it does not appear by whom
the land is thenceforth to be reclaimed and
tilled. Others have proposed to make us
rich by the issue of an unlimited amount of
paper currency, which they take for money.
They fail to see that a paper dollar is not

LABOUR AND CAPITAL

money but a promissory note, payable by the
bank of issue, at which, when the note changes
hands, gold passes from the credit of the giver
to that of the taker. But both nationalization
of land and paper currency have fallen probably
into a long sleep.

Mr. Henry George, if words have their ordi-
nary meaning, preached abolition of private pro-
perty in land and resumption of the land by
the State.* His disciples have come down to
preaching the Single Tax; that is, throwing
upon the land the whole burden of taxation.
The equity of this proposal it seems difficult
to discern, considering that of all kinds of pro-
perty land seems least to require the protec-
tion of the government for the maintenance of
which taxes are raised, since it cannot, like
other kinds of property, be stolen or destroyed.
Does equity really demand that a cottage with
a curtilage should pay, while a palace or a sky-

» It is curious that any doubt about Mr. Henry George's theory
should have been expressed. « The truth is, and from this truth
there can be no escape, that there is and can be no just tiUe to
an exclusive possession of the soil ; and that private property in
land is a bold, bare, enormous wrong, like that of chattel slar
very." — Progress and Poverty, Book VII, chapter iii.

30 LABOUR AND CAPITAL

scraper escapes ? Or is equity to be banished
from the relations between the tax-payer and
the government? The advocates of Single
Tax seem to direct their attention exclusively
to land not built upon in cities, whereas the
existence of such land, as it gives a breathing
space, besides keeping a reserve of ground for
future growth, might be thought rather benefi-
cial. It seems likely, however, that in this case
motives other than economical may bear a part.
It is true that peculiar responsibility attaches
to large property in land. It is true also that
very large estates, such as those which in
England grew out of the confiscations of the
Abbey land by Henry VIII and his donations
to his courtiers, are an evil, and the evil is
increased if the same man holds estates in dif-
ferent parts of the country. Entails of land
also are an evil. Land-ownership on a large
scale involves duties, and the large land-owner
who merely draws rent burdens the commu-
nity. But larga land-ownership within bounds
is not necessarily evil. It has helped improve-
ment, as did the estate of Coke of Norfolk in
England and that of the Due de Rochefou-

LABOUR AND CAPITAL

cauld was doing in France when it was over-
taken by the storm of the Revolution. To
improvement, insecurity of tenure, whether pro-
duced by a statutory claim of the State, as in
New Zealand, or from any other cause, caa
hardly fail to be a bar.

What we all want of the land is that it shall
produce bread, and the universal experience of
the world has pronounced that land produces
most bread when private ownership speeds the
plough. Tenancy is a share in private ownership
under the same legal guarantee as free-hold.

Human society m its general structure and
features appears to be an ordinance of nature,
and while it is capable of gradual improvement,
far beyond our present ken, not capable of
sudden and violent transformation.

The French Revolution, however volcanic,
was not socialist or communist but political. It
formally recognized private property. Its polit-
ical object has in a measure been gained, though
at a price which should warn us against hasty
resort to violent revolution. The other element
showed its character in the terrible Days of
June and the more terrible war of the Com-

I.ABOUR AND CAPITAL

«l

mune. The relations between the capitalist
and the wage^rner in France do not seem to
have been much improved. There are still
strikes and sometimes outbreaks of violence.

It would seem, then, that there is something
to be said for acquiescing, provisionally at least,
in our industrial system, based as it is on the
general relation between capital and labour,
and trying to continue the improvement of
that relation in a peaceful way, without class
war and havoc. Progress, in a word, seems
more hopeful than revolution. When the
socialist ideal, perfect brotherhood, is realized,
there will be social happiness compared with
which the highest pleasure attainable in this
world of inequality, strife, and self-interest
would be mean; but all the attempts to rush
into that state have proved failures, some of
them much worse. It is conceivable, let us
hope not unlikely, that all who contribute to
progress may be destined in some way to share
its ultimate fruits; but there is no leaping into
the millennium.

Yours faithfully,

^^Ci>C^ Jfttt^LT

WO«n ■¥ raoPBMOK

OOLOWIN miTM.

THE UNITED STATES.

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