THE LABOUR MOVEMENT
 
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 Cloth, 3s. 64. per Volume. 
 
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 HOLYOAKE. 2 Vols., with front. Portrait. 
 ILL THE LABOTJH MOVEMENT. By L. T. HOBHOCSE. 
 
 With Preface by R. B. HALDANE, M.P. 
 IV. THE LIFE OF SAMUEL BAMFOBD. Introduction by 
 
 HENKY DUNCKLEY. 
 
 OTHER VOLUMES IN PREPARATION. 
 
 LONDON: T. FISHER UNWIN.
 
 Ex Li brig 
 C. K. OGDEN 
 
 THE 
 
 LABOUR MOVEMENT 
 
 BY 
 
 L. T. HOBHOUSE, M.A. 
 
 Fellow of Mertott. College, Oxford 
 
 WITH PREFACE BY R. B. HALDANE, M.P. 
 
 T. FISHER UNWIN 
 
 PATERNOSTER SQUARE 
 
 MDCCCXCIII
 
 LIBRARY 
 
 UNIVERSITY OF CALIFORNIA 
 SANTA BARBARA 
 
 At 
 
 CONTENTS 
 
 CHAPTER I. 
 
 PAGE 
 
 THE AIMS OP LABOUR 1 
 
 CHAPTER II. 
 TBADE UNIONISM AND THE CONTROL OF PRODUCTION . 6 
 
 CHAPTER III. 
 THE AIMS AND METHODS OP CO-OPERATION ... 38 
 
 CHAPTER IV. 
 THE DISTRIBUTION OP WEALTH 55 
 
 CHAPTER V. 
 THE CONTROL OP INDUSTRY AND THE LIBERTY OF THE 
 
 INDIVIDUAL . 80
 
 PBEFATOBY NOTE. 
 
 THE following chapters profess to give neither a history of 
 the Labour Movement nor a statistical account of the 
 present industrial position. Their aim is merely, first, to 
 state and briefly defend certain principles of economic 
 reform ; secondly, to show that under many differences of 
 application and detail these principles are common to 
 various industrial movements of the present day ; and 
 accordingly to argue that the movements in question have 
 a natural basis for a closer alliance with one another and a 
 reasonable claim on the support of all who desire a remedy 
 for economic evils. 
 
 My obligations to several authors will be obvious enough ; 
 but I wish expressly to acknowledge how much I owe to 
 Mrs. Webb's " Co-operative Movement " and Professor Mar- 
 shall's " Principles of Economics." I have also to thank 
 Mrs. Vaughan Nash for several suggestions, and Mr. Tom
 
 viii PEEFATOEY NOTE. 
 
 Mann for many fruitful and stimulating ideas; and I am 
 under a special obligation to Miss Llewelyn Davies (Secre- 
 tary of the Women's Co-operative Guild) for most valuable 
 suggestions and criticisms on points of principle and 
 arrangement, and for drawing my attention to many illus- 
 trative details of Trade Union and Co-operative work.
 
 PEEFACE. 
 
 A DISTINGUISHED colonial statesman once said that it had 
 taken the working classes of his colony ten years to find 
 out the power which the extension of the suffrage had con- 
 ferred on them. Nearly ten years have passed since the 
 franchise was extended to the rural labourers here. In the 
 main they appear to have found their political feet. But the 
 result has hardly been what was looked for by the Eadical 
 leaders of 1885. It is true that the government of this 
 country is, in substance, if not in form, almost completely 
 democratic. But experience has shown that somewhere 
 in the reasoning of the politicians who, like Mr. Chamberlain, 
 predicted that with the new franchise those who remained 
 on earth would witness a political millennium, there lurked 
 a fallacy. That fallacy has now been dragged to light. It 
 turns out to have been a very simple one. It consisted in 
 the assumption that Democracy and Eadicalism were con- 
 vertible terms. That they are not, we now know. We have 
 witnessed a tendency in the working men of the towns to 
 turn Conservative, and so to neutralise that shifting of the 
 balance of political power which took place in 1885. What 
 is the inference ? There are those who decline to believe 
 that the social arrangements of this country are perfect, or 
 even within measurable distance of perfection. They assert
 
 x PBEFACE. 
 
 more loudly than ever that the system under which the pro- 
 ducts of industry continue to be distributed is pervaded by 
 gross and cruel injustice. They declare, too, that the working 
 people are alive to this fact and are prepared to insist upon 
 reform. And they draw the conclusion that the failure of 
 motive power in the machine of progress is to be sought, not 
 in the Democracy, but in the Eadicalism of to-day. 
 
 Let us look more closely at these criticisms of our 
 Eadical politics. " He, whoever he is," said a great Ger- 
 man, "who acts on one maxim is a pedant, and spoils things 
 for himself and others." There is current a tendency 
 to act on one maxim. It is forgotten that what was the 
 truth for the last generation is not necessarily the truth for 
 this. Cobden and Bright proclaimed fifty years ago that 
 the next step was to sweep away the remaining vestiges of 
 legal interference with the import of food. They succeeded 
 in persuading the nation to take that step. They had the 
 requisite force only because they looked at the one maxim, 
 and concentrated themselves on its application. True, when 
 they went further and applied it to labour, as though it also 
 were a commodity, they proved themselves open, in the 
 matter of their opposition to Factory Legislation, to the sus- 
 picion of pedantry. But it is as wrong to-day to decry 
 Cobden and Bright because they took what was undoubtedly 
 the truth as regards the Corn Laws to be the truth for all 
 times and all circumstances, as it would be to invoke their 
 opinions to-day about the relations of Labour and Capital. 
 
 Two things have to be taught to the Democracy of to-day 
 before it is likely to fulfil what was predicted of it in 1885. 
 It is a Democracy of flesh and blood, and it has all that 
 combination of strength and weakness, of desire for pro- 
 gress coupled with attachment to the very traditions that 
 block the highway, which is shown by the numerically less 
 important layers of society which weigh it down. And so 
 it is that our leaders must teach this Democracy that they 
 have a message for it, a message not of mere theoretical
 
 PREFACE. xi 
 
 interest, but of practical import for the bettering of its con- 
 dition. They must convince it, too, of something more than 
 this before they can gain its faith. Our working people have 
 instincts of high-mindedness which are too often over-looked. 
 Their imaginations must be touched and their moral enthu- 
 siasm evoked. And this is only to be done by statesmen who 
 can come before them with clean hands, and for the sake of 
 their cause and not themselves. Those who have seen the 
 working classes most, know best how deep is their regard 
 for character and ethical purpose when they find these 
 qualities in their would-be leaders. 
 
 This second matter, vital as it is, does not come within 
 the scope of any book on the Labour Movement. It belongs 
 to the science of human nature. But the first question, how 
 to reach the working people with a real message, is the sub- 
 ject of this book. Its writer belongs to a school which is 
 rapidly growing, a school the leading tenet of which is that 
 the problem of to-day is distribution and not production, 
 and that better distribution requires the active intervention 
 of the State at every turn. The disciples of this school 
 believe that society is more than a mere aggregate of indi- 
 viduals, and see in it a living whole, which not only does 
 control the lives of its component parts, but must do so if 
 these parts are to remain healthy, and not as to some of 
 them develope into unnatural growths drawing unduly on 
 the common resources, and as to others of them wither up 
 and die of inanition. Such a general control they say is 
 natural, and while they agree that the members must have 
 scope for free development as individuals, they say that such 
 development takes place most healthily when it is kept in 
 consistency with the equally real life of the common whole. 
 They point to the success of the Factory Acts, of the Mines 
 and Merchant Shipping and Truck Acts, and to many other 
 illustrations of their principles, and they demand that this 
 principle shall receive in the future the more extended appli- 
 cation which they think its past history justifies.
 
 xii PREFACE. 
 
 It may be that their path will prove to be beset with diffi- 
 culties and with dangers which they have not foreseen. No 
 political problem was ever adequately solved by the mere 
 dry light of abstract doctrine. Yet it may be that theirs is 
 the truth for the time, just as Free Trade was the truth for 
 the England of half a century since. And if this be so then 
 unquestionably the preachers of the New Gospel do well to 
 look neither to the right nor to the left, but to go unflinch- 
 ingly forward as did the great reformers of the past, at the 
 peril of being regarded as narrow, and with the certainty 
 that in course of time their own teaching will be superseded 
 as no longer adequate, and as inapplicable to a new set of 
 social demands. Not only in politics, but in religion, in 
 philosophy, in science, in literature, and in art have men 
 learned to own that this is so, and that from the ever-de- 
 veloping nature of truth it must be so. 
 
 Such a book as this can never do more than present the 
 problem as it is known, and the solution as it appears to be 
 known. It must of necessity be abstract in its character. 
 But its purpose is justified if it has stated what is ascer- 
 tained of the nature and purpose of the new movement, and 
 has exhibited it as a whole. How difficult are such legis- 
 lative questions as the regulation of the hours of labour, and 
 how crude are some of the plans which have been proposed 
 for dealing with them, the writer is well aware. But to say 
 that the questions are difficult and that none of the plans 
 are satisfactory is not to say that they are to be shelved. 
 We may be far from a state of things which many earnest 
 people hope for and believe in as possible. But a remark 
 able movement has commenced, and these pages will have 
 served their purpose if they show how and why it has arisen, 
 and in what fashion its progress may be accelerated. 
 
 E. B. HALDANE.
 
 THE LABOUR MOVEMENT. 
 
 CHAPTER I. 
 THE AIMS OF LABOUR. 
 
 IT is proverbially difficult to see the wood when the trees 
 obscure it, and the casual observer of the Labour World of 
 to-day is likely enough when he hears of the "Labour Move- 
 ment " to ask, Where is it, and what is it ? There are 
 scores of organisations, hundreds of societies, meetings, 
 processions, denunciations, programmes, leading articles, 
 and placards. But what unity is there? what common 
 principle or aim ? Above all, what result ? 
 
 A little inspection would reveal certain groupings of men 
 and organisations. If not a " movement," certain move- 
 ments, at any rate, would stand out in tolerably definite 
 outline. In Trade Unionism, for example, with its million 
 and a half of adherents, we have a great mass of men, 
 agreeing upon the whole in their aims and methods, united 
 in idea if not always in policy. Then there is the Co- 
 operative World, with its million of members and fourteen 
 hundred stores and societies scattered over the length and 
 Breadth of the land, yet united by its great wholesale 
 ocieties and its congresses. Quite distinct from these, 
 .gain, are various political and municipal organisations, 
 
 2 i
 
 2 THE LABOUE MOVEMENT. 
 
 working apparently on quite different lines, yet also, as 
 they claim, in the interests of labour. 
 
 If we, then, group the great powers of the Labour World 
 after this manner, our original question becomes manage- 
 able, though it is not yet answered. Mutual understanding 
 is not yet complete as between the actual members of these 
 different groups, but to those who believe in the possibility 
 of far-reaching economic reform there is no more hopeful 
 sign than the growing recognition among them of a common 
 aim. 
 
 Time was when Trade Unionists and Co-operators looked 
 on one another with suspicion, while both were decried by 
 the partisans of State action as the Whigs of the Labour 
 Movement who were bent on framing a new aristocracy 
 within the working class. But the era of mutual suspicion 
 is rapidly passing away, partly because each of the move- 
 ments in question is emerging from its primitive limitations 
 and fulfilling wider and higher purposes, and partly because 
 along with this growth comes a better understanding of 
 other methods of reform. 
 
 The truth is, as I hope to show, that Trade Unionism, 
 Co-operation, and State and Municipal Socialism have in 
 essentials one and the same end to serve. Far from being 
 alternative or incompatible methods, each is, I believe, the 
 necessary supplement to the others in the fulfilment of the 
 common purpose, and my present object is to consider what 
 this purpose is and how each will help to work it out. 
 
 In a general way it is easy enough to lay down the objects 
 of any genuine movement of economic reform. That the 
 means of livelihood should be shared by all members of 
 society, and this in such a way that all should have a 
 chance, not merely of living, but of making the best of 
 themselves and their lives thus much must be the desire 
 of every one who considers the subject. And though no 
 economic progress can of itself produce good family life, nor 
 intellectual culture, nor public spirit, yet that all of these
 
 THE AIMS OF LABOUB. B 
 
 may flourish certain economic conditions must be fulfilled, 
 and the object of industrial reform is to bring about these 
 conditions. On the national industry the whole of the 
 national life is based, and whatever powers may build up 
 the fair edifice of the common weal, the economic system 
 is responsible for the soundness of the substructure. This 
 soundness may be said to consist in the provision by honest 
 methods of the material requisites for a good and full life 
 for all members of the community. Probably all would 
 recognise this as desirable, though many would deny its 
 possibility. 
 
 With this denial I shall deal later. Meanwhile I would 
 point out that controversy really begins when we attempt 
 to lay down the necessary prerequisites of our admitted 
 aim. But in all the movements which I am considering it 
 would be agreed that, if the economic basis of social life is 
 to be sound, not increased production, but a better dis- 
 tribution of wealth, is essential. It is true that wealth is 
 not an end in itself. It is true that beyond a certain point 
 increase of wealth does not augment happiness, but rather 
 tends to mar it. It is true that the acquisition of wealth, 
 as such, is a base end to set before a man, or a class, or a 
 nation. It is true that you will never satisfy your " infinite 
 shoeblack " by filling his stomach. It is no less true that a 
 certain moderate amount of material necessaries and com- 
 forts are absolutely indispensable to a decent and happy 
 family life, and that some measure of rest from manual toil 
 is essential to the full development of the faculties and the 
 due enjoyment of life ; and it is equally undeniable that 
 these material necessaries and this leisure are out of the 
 reach of vast numbers in the wealthiest countries of the 
 world. I do not wish to dwell on this. We have had 
 enough and to spare of denunciations of economic injustice 
 and of pictures of social misery. Let us face the fact once 
 for all, and not be blinded to it by the " barren optimistic 
 sophistries of comfortable moles." Having faced it, let us
 
 4 THE LABOUE MOVEMENT. 
 
 consider the remedy, and admit, once for all, that whatever 
 be the character of that remedy, it must fulfil this first 
 condition of distributing the products of industry with more 
 regard to the welfare of the masses than is paid by the blind 
 and sometimes blindly adored forces of competition. 
 
 But a better distribution of wealth means also a better 
 distribution of duties. If we are anxious that all should 
 eat and be filled, we should be equally determined that all 
 should first work. In a healthy society there are neither 
 idlers nor beggars; there is no leisured class, whether of 
 tramps or millionaires. There can be no "Gospel of Eights" 
 apart from that of Duties. But this means simply that we 
 have to work towards a healthier state of social organisa- 
 tion in which each man will find his place in society and 
 will recognise it. The " social organism " is a perfect 
 organism only when its members feel that they depend on 
 one another. Hence no deep or lasting improvement can 
 come without a change in the spirit of our industrial 
 system. Born and bred in the most outspoken indi- 
 vidualist selfishness, the spirit of competitive commer- 
 cialism has never belied its origin. The true source of 
 stock-jobbing and adulteration, of filibustering adventurers 
 and odious traffics enforced at the sword's point, it has 
 made us pay heavily for such advantages as it has brought. 
 No mere change of machinery can undo the moral damage 
 it has done. Machinery laws, administration, organisa- 
 tions are after all valuable only as the lever by which the 
 moral forces of society can work. Mere reform of machinery 
 is worthless unless it is the expression of a change of spirit 
 and feeling. If the change from individualism to socialism 
 meant nothing but an alteration in the methods of organ- 
 ising industry, it would leave the nation no happier or 
 better than before. The same dishonesty, the same mean- 
 ness, the same selfish rapacity would simply find different 
 outlets. But if machinery without moral force is worthless, 
 good intentions without machinery are helpless. If the
 
 TEE AIMS OF LABOUR. 5 
 
 friends of justice and progress cannot come together and 
 frame a concerted course $f action, the good they can do 
 is limited to their own lives. True administrative reform 
 consists simply in such mechanical changes as will put power 
 into the hands of those who will use it best ; and when it is 
 carried out with this intention legislative and administrative 
 advance is the measure of progress. 
 
 Any movement, then, that aims at far-reaching economic 
 reform must, so far as its effects extend, be introducing a 
 new spirit into industry a feeling for the common good, 
 a readiness to forego personal advantage for the general 
 gain, a recognition of mutual dependence. It must* also 
 provide the machinery by which the new spirit can make 
 its mark upon the economic world, and its tendency must 
 be to equalise the rights and duties of mankind. 
 
 Now, taking the movements I have named Trade 
 Unionism, Co-operation, and State and Municipal Social- 
 ism how far does each of these fulfil the above conditions ? 
 What are they respectively doing at the present day ? and 
 considering that each movement is rapidly growing what 
 is their tendency ? what would they achieve supposing their 
 full development attained ? Finally, are they working to- 
 gether or against one another ? Is there (in addition to the 
 general ends above sketched) any common principle on 
 which they work ? The following chapters will attempt to 
 give in outline the answer to these questions.
 
 CHAPTEE II. 
 
 TBADE UNIONISM AND THE CONTROL OF 
 PBODUCTION. 
 
 IF we accept the general definition of ' ' industrial health ' ' 
 just given, the first problem that will occur to us is that of 
 providing suitable conditions of work and adequate remu- 
 neration for the worker. Now, we find a vigorous and 
 growing effort to secure these ends in Trade Unionism, a 
 movement which is no longer confined to the " Aristocracy 
 of Labour," but which embraces workers of every grade. 
 Trade Unionism represents the attempt of the body of pro- 
 ducers to regulate industry in their own interests as a body 
 not the effort of each man to shape the course of trade in 
 the way which best suits himself, but the effort of the united 
 body of workers to arrange the conditions of industry in the 
 way which best suits them all. The Trade Union is, in fact, 
 the association of workers in a given locality or in a given 
 occupation formed with the purpose of regulating the con- 
 ditions of labour in that locality or occupation. It endea- 
 vours, with varying success in different cases, to fix a 
 minimum wage, to define the hours of work suitable to the 
 occupation, and in general to insist on those conditions of 
 employment the universal observance of which is necessary 
 to the health, comfort, and efficiency of the whole body of 
 workers. Such an effort is, of course, liable to errors both 
 of ends and of means. As long as the Trade Union repre-
 
 TBADE UNIONISM. 7 
 
 sents a small section of the community, it may endeavour 
 to establish for itself a monopoly at the expense of the 
 wider public.* Everything human is liable to corruption, 
 but if we are to push the possibility of corruption as an 
 argument against Trade Unionism, we must be consistent 
 and apply the same reasoning to other institutions as well, 
 and it would be difficult to see how such primary social 
 necessities as the maintenance of a political government 
 would escape condemnation. It is more important to in- 
 quire what are the main beneficial functions which Trade 
 Unionism can serve in assisting the organisation of industry. 
 What is the movement actually doing ? what can it legiti- 
 mately aim at ? can it achieve the whole of its aim ? and 
 what are its inherent limitations ? 
 
 Eegarding Trade Unionism from our present point of 
 view as part of a wider movement, its function in that 
 movement is clear. It has the foundation work to do. 
 The workers themselves are the persons immediately 
 affected by the conditions and remuneration of labour, and 
 to the organised body of workers we look accordingly for 
 the due regulation of these fundamental factors of social 
 health. 
 
 There are indeed some conditions of labour of too great 
 importance to be left to any voluntary associations. I 
 mean such as gravely affect the health and safety of the 
 worker. These, as I shall argue later, are, like the main- 
 tenance of the Queen's peace, matters of the first necessity, 
 which must accordingly be regulated by law. In these 
 matters the function of the Trade Union where it exists is 
 mainly to give utterance to the wishes of the workers, 
 to collect information and initiate legislation, and to aid 
 the enforcement of the law when it is once on the Statute 
 Book. But unfortunately the unhealthiest occupations at 
 
 * Instances of success in such a policy would be found rather among 
 old-established Unions in learned professions like the Bar than in the 
 more modern combinations of manual labour.
 
 8 THE LABOUE MOVEMENT. 
 
 the present day are just those in which Unionism is 
 weakest. Hence it is on outside opinion that we have 
 mainly to rely in the work of removing the darkest blots 
 from our industrial life. 
 
 In their actual work at the present day Trade Unions are 
 mainly concerned with the hours of work and its remunera- 
 tion. Their avowed object is to obtain a " fair day's pay 
 for a fair day's work," and that for all workers. But these 
 are terms that require some definition. As to the " fair 
 day's work " it is becoming pretty clearly denned for most 
 trades as an " eight-hours day " eight hours being a time 
 for which an average man can work at an average employ- 
 ment without exhausting himself and without finding 
 himself deprived of all leisure and energy for interesting 
 himself in a wider life outside his work. 
 
 But what is a " fair " wage? This is not quite so easy 
 to determine on any logical and consistent principle. The 
 phrase indeed is used in every trade dispute that arises, 
 but if a precise definition could be attached to it probably 
 there would be fewer disputes than there are. I am not 
 bold enough to attempt such a definition. I wish only to 
 offer a few considerations, all of which may be, and perhaps 
 in part are, taken into account by employers and employed 
 at the present day, and might be more fully acted on by a 
 more developed industrial organisation. In asking what 
 wages are fair, I shall mean by " fair wages " the amount 
 we should fix if we had the fixing in our power, in other 
 words, I shall inquire how a well-ordered society would fix 
 the rate of wages if it had the whole distribution of wealth 
 under its control. 
 
 At present the appeal lies generally to the custom of the 
 trade, or if that is definitely rejected as giving a rate of 
 wage that is " too " high, or lower than is " fair," the rate 
 prevailing in other trades may be looked to. Or, again, 
 such a rate may be thought fair as would leave what is 
 regarded as an average rate of profit to the employer a
 
 TEADE UNIONISM. 9 
 
 view which may be held to justify a sliding-scale. But 
 especially since the advent of Unskilled Labour in the 
 arena of industrial warfare there has been a tendency to 
 refer to the amount on which a man can live as a standard 
 minimum for a fair wage. It is in vain that the Gallios 
 of the middle class reply that they " do not see the 
 necessity " that these poor creatures should live. Like De 
 Quincey's butcher, the poor creatures concerned show a 
 determination to live which is " almost bloodthirsty " and 
 doubtless most unreasonable, but nevertheless, when it finds 
 organised expression, very effective. And looking at the 
 matter from the point of view of the welfare of society as a 
 whole the determination is perfectly justifiable. What ulti- 
 mately is the meaning of "fair" or " reasonable." By the 
 agreement of philosophers of most opposite schools these 
 words mean "that which is good for society" in one form or 
 another. Nothing is fair, nothing reasonable which tends to 
 crampthe life and diminish the happinessof society as a whole. 
 Everything is fair and everything reasonable which, when 
 all its effects are considered, tends to further social develop- 
 ment and augment the happiness of men. Now I ask, is it 
 for the good of society that a large portion of it, say a third, 
 should be unable to provide themselves adequately with the 
 mere material necessaries of life ? Is it well for the millions 
 primarily concerned ? Is it well for the moral health of the 
 remainder who allow this to go on ? Or is it not rather the 
 first and greatest of all blots on the fair face of civilised 
 humanity to be removed at all hazards and at any sacrifice ? 
 I find myself, then, in full agreement with those who hold 
 that the first condition which a " fair " wage must fulfil is 
 that it should provide the worker with the means of living 
 a civilised existence. It is needless to remark that the 
 " fair" wage must be earned by " fair " work, but it may 
 be noted that with the progress of the organisation of 
 industry it will become increasingly easy to penalise 
 idleness whether picturesque and luxurious, or squalid and
 
 10 THE LABOUR MOVEMENT. 
 
 hungry. At present it is always difficult to tell whether a 
 man could get work if he tried. In proportion as it becomes 
 easier for the industrious man to find his proper place and 
 to obtain fitting reward it becomes less difficult to enforce 
 work and punish idleness without compunction. All that 
 I say, then, of the standard of remuneration must be taken 
 as applying to those who do work, and work to the standard 
 required by their foremen or other managers, under limits 
 laid down by their Trade Union. 
 
 It will be said that the conception of a certain standard of 
 living or comfort as determining the fair wage does not help 
 us much since the standard itself is continually fluctuating. 
 That is true, and there must be an element of indefiniteness 
 which no abstract reasoning can eliminate, but which can only 
 be handled by common sense, treating each particular case 
 on its merits. Yet there are certain necessaries and comforts 
 which can be specified that it is eminently desirable to place 
 within the reach of all, and some of which are out of the 
 reach of the majority in England at the present day. Such are 
 sufficient food and clothing, house-room enough for cleanli- 
 ness and decency, adequate medical attendance and nursing 
 in sickness, the postponement of work in childhood till such 
 education can be given as fits a man to be an active citizen, 
 and sufficient leisure both for study and amusement in adult 
 life. To these must be added a provision of great importance 
 for childhood. I mean that the mother's care should not be 
 diverted from the nursing and home education of her children 
 by the need of contributing to their maintenance. Every 
 career should be open to women without reserve, but it 
 should be made unnecessary that any married woman 
 should occupy her time in bread-winning at the expense of 
 the all-important duties of the home. The "fair" wage, 
 then, should be such as to enable a single bread-winner to 
 support a whole family after the fashion I have described. 
 
 In all this I have been speaking of the minimum-wage 
 the first charge on the produce of industry, and my con-
 
 TRADE UNIONISM. 11 
 
 tention is that it should be regulated primarily by the con- 
 sideration of the possibilities of living. In actual wages 
 other considerations of course enter. The most important 
 of these perhaps are skill, effort, and unpleasantness of 
 occupation. All these do enter into the rate of remunera- 
 tion. How far should they do so? This question is bound 
 to rise into importance with the growth of Trade Unionism, 
 and few problems are more difficult to determine by any 
 theoretical considerations. Let us, however, bear in mind, 
 that whatever remuneration is just is so because it is for 
 the common good that it is awarded. From this point of 
 view it is clear that remuneration should in some degree 
 depend on effort. I do not mean that competition should 
 be reintroduced in the form of piece-work, or that any 
 encouragement whatever should be given to over-exertion ; 
 but that a certain standard of assiduity and of length of 
 work should be exacted as is done at present by the over- 
 seers of every branch of production, with this difference only, 
 that the Trade Union of the producers affected should have 
 a voice in the fixing of the standard. By this means society 
 can call forth the requisite effort on its behalf without 
 mischief to the most important part of its wealth, the 
 health of its workers. Similar considerations determine 
 the treatment of specially unpleasant or unhealthy occupa- 
 tions. In these, due regard for the common good as bound 
 up with the good of the employed, would lead to such a reduc- 
 tion of hours as would leave plenty of time to recuperate. 
 I do not think we shall in any case long continue to allow 
 men to be kept ten or twelve hours in chemical works, 
 where even breathing is a danger. 
 
 Turning next to the wages of skill (under which I 
 include brain power). From the individualist point of 
 view, it seems highly desirable that a man's earnings 
 should be proportional to the value of his product. But 
 such an apportionment may be quite incompatible with 
 the virtue and happiness of society. Eegarding only
 
 12 THE LABOUR MOVEMENT. 
 
 these last considerations, would a well-directed industrial 
 system assign a special reward to high skill? So far as 
 skill is attained by effort, and so far as the requisite effort 
 could only be called forth by direct pay, it would be 
 worth while to pay for it. But what of native or original 
 talent? The best and highest of such talents never yet 
 have been paid for, and perhaps they work better without 
 pay. The attempt to reward genius more often succeeds 
 in vulgarising it. The same holds in some degree of the 
 lesser abilities of inventors, and of the captains of industry. 
 The profits attending success tend to divert their attention 
 to profit-making courses. They make inventions or organise 
 arrangements that will pay, not considering their effect 
 upon society. A man is as eager to invent a new bomb as to 
 construct an improved plough. And possibly we should have 
 less misplaced ingenuity if the credit of the thing were its 
 chief reward. To push this principle to its logical conclu- 
 sion would perhaps be Utopian. There are three reasons 
 for assigning a special reward to skill and brain power. 
 First, it is often practically impossible to distinguish native 
 talent from the results of past effort, and a large proportion 
 of men will therefore neither acquire nor use skill except for 
 a reward. Secondly, it is better to be liberal than niggardly. 
 Men work best on the whole for those who best mark their 
 appreciation of services done by adequate reward, and 
 though many a poet of the first order is and has to be con- 
 tent with less pay than a literary hack " What porridge 
 had John Keats ? " perhaps this is too much to be expected 
 of the mass of able men. Lastly, within certain limits the 
 brainworker requires more comforts and more rest than the 
 manual-worker. He is a more delicate machine, requiring 
 more care, and wearing out more easily. Skill therefore in 
 every form should be liberally rewarded. Only let it be 
 understood that, as a matter of social exigency, its extra 
 reward ranks far below the necessity of providing a minimum 
 for all workers.
 
 TEADE UNIONISM. 13 
 
 A more difficult question arises as the opposite of skill 
 incompetency. At the present day we have a number 
 of sinecures, rents, annuities, charities, endowments, work- 
 houses, gaols, and other admirable arrangements to keep 
 the incompetent from starvation. If society were able to 
 control industry and wealth for the good of its own 
 members as a whole, I imagine that the only differences 
 in this respect would be two. First, it would be only 
 the incompetent and not also the idle who would be 
 allowed thus to live on the surplus products of other 
 men's industry. Idleness would be regarded as a social 
 pest, to be stamped out like crime. Secondly, the mis- 
 cellaneous selection of the incompetent for suitable pro- 
 vision at present effected by birth, fortune, favouritism, 
 intrigue, quackery, and other means, would be superseded 
 by a more scientific adjustment. All who could work 
 would have to work, and those who, after adequate effort, 
 proved incompetent to earn by their work the minimum of 
 a decent livelihood, would have to be treated as a particular 
 class of the infirm. As much as they could do being sternly 
 demanded of them, the common purse must bear the deficit. 
 Nor is this bad economy. To begin with, the burden would 
 not be so great as that which broad-shouldered England 
 bears to-day. We should have no idlers, let us hope, and 
 none of the incompetent would be kept in luxury. Secondly, 
 incompetence is not a constant factor in society. Two 
 things increase it luxury and starvation, both for moral 
 and physiological reasons. Keep all the incompetent in 
 comfort without luxury as the reward of the best work they 
 can do, and you make the best possible arrangements for 
 improving them off the face of the earth. I conclude, then, 
 that a fair reward of labour should not be directly propor- 
 tioned to skill, nor even to effort ; that the best social 
 arrangements would fix a minimum to be paid even to those 
 unable to fully earn it; and that while an increase of 
 remuneration for pure skill is necessary, and within limits
 
 14 THE LABOUR MOVEMENT. 
 
 desirable, this is, on the rule of justice as laid down 
 by social utility, a secondary consideration as compared 
 with the necessity of providing a sufficiency for all, to be 
 attended to when this greater need is satisfied. The 
 primary economic need in the matter of Distribution is the 
 fixing of a sufficient minimum remuneration and a reason- 
 able maximum of hours for all workers in company with 
 the enforcement of the rule that all who can work must 
 work. Secondary to that is the due apportionment of 
 additional remuneration for additional effort and special 
 skill. To raise the wages of all workers to such a rate 
 as will, without involving the exhaustion of the worker, 
 provide the material means of a happy family life for 
 all, is then, to us, the first object, and if it is difficult 
 to say what this rate is, it is easy to say what it is not. 
 It is not the wage paid to agricultural labour throughout 
 the greater part of England. It is not the rate paid to 
 unskilled labourers in towns. It is questionable whether 
 the majority of clerks and skilled artisans may be said to 
 reach it. Wherever we draw the line it is clear that an 
 enormous amount of levelling up remains to be done. Now 
 the main object of Trade Unionism is to enforce this mini- 
 mum standard of comfort for all workers. This duty falls 
 naturally upon it as the organisation of those primarily con- 
 cerned, and up to this point, at least, it works for what we 
 have seen to be the highest interests of society as a whole. 
 
 Can Trade Unionism achieve this object ? 
 
 We have to ask, first, what it is doing, now, as an inde- 
 pendent movement ; and secondly, what it can do as part 
 of a wider movement. First, then, as to what it is doing. 
 Is it making any progress in the direction of its end and 
 aim ? Is it securing for more and more workers a nearer 
 approach to the ideal of a fair day's work for a fair day's 
 wage as above defined ? 
 
 To answer this question it is not enough to point out that 
 in general wages have risen where Unions are strong, as
 
 TEADE UNIONISM. 15 
 
 compared with places or industries in which they are weak. 
 Nor is it enough to show that the period in which Unions 
 have grown has witnessed a great improvement in the whole 
 economic condition of the classes which have formed them. 
 A more promising course is to point to instances in which 
 the Unions have actually agitated or fought for advantages 
 with success. It would be easy enough to pile up lists of 
 successes from all epochs of Trade Unionism, and from 
 every kind of trade. In the "Nine Hours Movement" of 
 twenty years ago as in the advanced skirmishes of the 
 "Eight Hours " battle to-day ; * in the success of the Miners' 
 Federation, first, in raising wages from 30 to 40 per cent., 
 and then in resisting the reduction which has befallen 
 the non-federated districts ; in the famous Docker's Tanner, 
 and in the reduction of hours from twelve to eight effected 
 at a stroke by the Gasworkers Union, we see the power 
 of combination at work, on hours and wages, in skilled 
 trades and unskilled, in the past and in the present, in 
 town and in country, t sometimes moving swiftly, some- 
 times checked, but on the whole making its way, and main- 
 taining the ground that it wins. And we cannot count by 
 victories alone. Though the Union may be defeated the 
 fight may be justified by results. A brave people may be 
 
 * Thus the London building trades have just succeeded after a long 
 struggle in obtaining a forty-eight hour week (on the average of the year) 
 without loss of wages. It is computed that about 100,000 men are 
 affected by this change. The success of the Northumberland and Dur- 
 ham miners in reducing hours is so often quoted by the enemies of the 
 Labour Movement for their own purposes, that it is only fair to recall it 
 here as a case of successful Trade Union action. 
 
 t Notwithstanding the peculiar difficulties of concerted action in 
 scattered villages, the effects of Agricultural Unions, wherever they have 
 had a fair trial, have been immediate and striking. The Oxfordshire 
 labourer still looks back sorrowfully to the days when " Arch's Union " 
 " put up " wages from 2s. to 5s. per week, and still more sorrowfully to 
 his desertion of Union principles, and its prompt punishment, by the 
 loss of all that he had won. This belongs to the " ancient history " of 
 twenty years ago. But the Eastern Counties Labour Federation, working 
 on the seemingly impossible subscription of Id. per week, appears to 
 have obtained substantial concessions in the spring and summer of 1892.
 
 16 THE LABOUR MOVEMENT. 
 
 beaten, but cannot be trampled on and enslaved. So, to 
 put it in the concrete, an Union may fight a reduction of 
 10 per cent, and lose ; but the stubbornness of the battle 
 may stop further reductions which would have stripped 
 unorganised workmen of 20, 30, or 40 per cent. Both sides 
 know this, and hence the seemingly narrow issues on which 
 long and stubborn disputes are often fought. 
 
 But mere figures give a very imperfect idea of the 
 effectiveness of Unionism. Just as the best-armed nation 
 does not get involved in war, so the best-drilled, most 
 effective union does not fight because it has no need. It 
 is by the steady pressure of organised opinion, by the 
 delicate tact of skilled negotiators, by the quietly effective 
 ways about which newspapers are silent, that the best 
 work is done. But when we take this quiet and gradual 
 work into account, no one can tell by any comparison 
 of figures what the effect of Unionism on wages and 
 hours has been, because no one knows what wages and 
 hours would have been to-day but for the Unions. It is 
 not enough to compare the state of non-Union trades, 
 for they too have benefited indirectly by the organisation 
 of the others. The mere dread of combination is itself 
 a force,* and the employer knows that a sufficient margin 
 of loss teaches the lesson of combination even to the stupid 
 and faint-hearted. 
 
 And on the other side many opponents of Unionism 
 would say, "It is easy enough to count up these nominal 
 victories, but what of the permanent results ? Are the 
 workers as a whole permanently benefited ? Does not the 
 employer often manage to take back secretly with one hand 
 concessions which he offered with the other?" These 
 doubts of the enemy are mainly suggested by a rooted dis- 
 
 * Curious instances of this happen to have come under my own notice. 
 During the formation of an agricultural labourers' union in Oxfordshire 
 the farmers in more than one village raised the wages Is. or even 2s. per 
 week during the formation of the branch.
 
 TEADE UNIONISM. 17 
 
 belief in the inherent power of a Trade Union to accom- 
 plish anything. From the nature of the case they can 
 hardly be answered by references and statistics, since they 
 suggest that the gains we see are balanced by hidden losses 
 that we know not of. Let us, then, consider how Trade 
 Unionism works ? What is the nature of the help it gives 
 the worker ? In this way I think we shall be able to see 
 how far the above objections have any force. 
 
 The isolated worker in bargaining with the employer is 
 almost always at a considerable disadvantage. If he 
 refuses work there are almost always others who will do it. 
 He cannot afford to wait, for he has no reserve to fall back 
 upon. He is like a housewife going to a crowded market 
 with only five minutes in which to make many important 
 purchases. She will have to take the first thing that comes, 
 without pausing to look round for a better bargain. And 
 this has more force the lower we go in the scale. The 
 poorer the workman is, the less he can afford to wait, and 
 the more unskilled his occupation, the greater the crowd 
 of competitors for it. Competition of course may be the 
 other way. The " worker " may himself be sought after. 
 There is a continuous gradation from the great lawyer or 
 doctor who can choose his own fee, and, whatever price 
 he names, will be beset by " employers," down through the 
 mass of professional men and artizans who will wait a bit 
 rather than take a second-rate place, to the crowd of 
 "casuals" who throng round you at a railway station to 
 carry your bag for a copper. The point is, that the further 
 we get below the point of which we spoke above, which we 
 may call the minimum of comfort, the keener the competi- 
 tion, and the worse the position of the worker for bargaining. 
 And his sole source of strength is in union. The Union to 
 him is the machinery by which he bargains. If I have a 
 house to sell I employ an agent because I think him likely 
 to obtain better terms than I could do unaided. In all 
 important transactions, when I have no special skill of my 
 
 3
 
 18 THE LABOUR MOVEMENT. 
 
 own, I employ such machinery and such agents as are 
 specially adapted for the work. So the labourer has his 
 work to sell. He cannot sell it advantageously unless he 
 comes to terms with others who have the same commodity 
 to dispose of. Nor does he know the market. Accordingly 
 he forms an union that all sellers of labour may act in con- 
 cert, and chooses as officials the best experts he can find, 
 appoints them to watch the market for him, and pays them 
 for their advice as to his dealings. In these ways the 
 labourer puts himself on an equality with his employer, the 
 employer being already, as Prof. Marshall has pointed out, 
 an absolutely rigid combination to the extent of the number 
 of workers he employs, and being also as a rule well versed 
 in the conditions of the market and the general business of 
 bargaining. 
 
 Now, prima facie, we should assume that if a man is a 
 good bargainer he is likely to be better off through life than 
 a bad one. But we are told by economists that wages, being 
 the price of labour, will tend like all other prices to an 
 equilibrium point. This point is fixed, primarily and for 
 short periods, by two things (a) The demand for labour, 
 i.e., the amount of money employers are ready to spend on 
 hiring labour ; and (&) the supply, i.e., the number of 
 labourers seeking employment at the price employers are 
 willing to pay. To the point so fixed, wages will always be 
 tending slowly or quickly. They may never reach it or rest 
 at it, but they oscillate about it as a pendulum swings about 
 the vertical line. Well, let it be granted that in any market 
 prices are all tending to an equilibrium. That will not alter 
 the fact that the least skilled purchasers in that market 
 will get the least for their money, and if there is one class 
 of purchasers less skilled on the average than another, that 
 class on an average will come off worse. Prices will, if you 
 please ultimately tend to the equilibrium point. Meanwhile 
 the inferior marketers will have bought at the high price, or 
 let goods go at the lower. Here they will hasten to pur-
 
 TRADE UNIONISM. 19 
 
 chase when they might have waited for a fall. There they 
 will wait for a fall while the market is in fact rising. We 
 need hardly labour this point. No one will deny that 
 a good housewife makes a shilling go further than a bad 
 one, and no one can reverse his judgment when it is a 
 question of a class instead of an individual. 
 
 Let it be granted, then, that wages tend of themselves to 
 an equilibrium, and let it be for the moment supposed that 
 no deliberate action can affect this equilibrium, still, the 
 worker who can bargain well will get the advantages of 
 every turn in the market. It takes perhaps twenty or 
 thirty years for an expansion of demand for labour resulting 
 from some new commercial development to work itself out 
 unaided on the rate of wages. Let us concede (we shall 
 see reason subsequently for withdrawing the concession) 
 that no Trade Union action can affect the rate which wages 
 will arrive at by the end of that time. Yet meanwhile the 
 market might admit all along of the higher rate. The 
 pressure of tendency will not make itself felt for years if the 
 party which stands to win is not in a position to make use 
 of his advantages. A little patience in looking round the 
 market and I might get just the joint I want a penny a 
 pound cheaper. There is a tendency to that price against 
 which the butchers cannot hold out much longer. But if 
 I am not aware of the fact and have not the patience I 
 shall pay the extra penny. So with wages. There may be 
 sufficient " buoyancy" in the labour market to admit of a 
 rise years before it takes place if the labourers are neither 
 strong nor farsighted. Now if there were any tendency in 
 bargaining to right itself this would not much matter. If 
 the very fact that I am underpaid to-day set some law 
 of justice or economic harmony into operation which 
 would overpay me to-morrow, we should cry quits all 
 round and leave the market to take care of itself. But 
 since such harmonies figure only in the Mythology of 
 Early Nineteenth-century Science, it will be readily seen
 
 20 THE LABOUR MOVEMENT. 
 
 that to be permanently the weaker in a series of bargains 
 is likely to impoverish you in the long run. If, then, a 
 Trade Union could do no more than merely " anticipate a 
 rise, or delay a fall," and if it did this permanently and con- 
 tinually its existence would be abundantly justified its 
 effect on the average rise of wages would be a very real one. 
 And there is no need at this stage to suppose that the Union 
 gets the better of the bargain, or that it makes "economic fric- 
 tion " work on the side of the employed against the employer. 
 We need not, that is to say, suppose that by combination 
 the worker will get a larger share of the produce than he 
 would as an isolated worker who should be on perfectly equal 
 terms, as to acuteness, power of waiting, and the like, with 
 his employer. Nor need we therefore hold that the rate 
 of profit would be lower than it would be under such a 
 system of perfectly free and equal competition. It is quite 
 enough for the Union to prove that it raises wages to the 
 point obtainable by such competition between equals. The 
 fact is that the Trade Union suppresses free competition in 
 one sense, but institutes it for the first time in another. It 
 abolishes the unrestricted competition of isolated individuals 
 against one another which places all at the mercy of the 
 employer, and substitutes for it a combination of men bar- 
 gaining for employment on free and equal terms. 
 
 So far we have dealt only with the effect of combination 
 on the temporary fluctuations of the Labour Market. 
 Considering the Union as the only effective mechanism of 
 bargaining available for the labourer, we have seen that it 
 enables him to take advantage of the various fluctuations 
 of demand instead of allowing these to take advantage of 
 him. Unionism finds the Labour World in the state of a 
 market where skilful dealers are selling to ignorant customers 
 at enormous profits. And just as such a market is revolu- 
 tionised when the customers become educated and acquire 
 knowledge of goods and their prices, so the old methods 
 of selling the commodity of Labour are all upset by com-
 
 TEADE UNIONISM. 21 
 
 bination. In all this we have assumed with the economists 
 that there is a normal price to which wages tend to return, 
 however violently they may be raised or lowered for a time, 
 and that the Union can have no influence in fixing that 
 price. But the assumption is not accurate because Labour, 
 though a marketable commodity, is not quite like other 
 marketable commodities. 
 
 If the price of coals falls and I get them 2s. or 3s. a ton 
 cheaper, the coals are just as good as they were before and 
 perform their function just as well. But if labour falls, say, 
 in an agricultural district, from 12s. to 10s. per week, the 
 labourer does not do his work so well. The labourer's 
 capacity for work an economic factor of enormous impor- 
 tance on which the present commercial position of the 
 nations of the world may be truly said to rest varies 
 directly up to a certain maximum with the remuneration 
 of his work. Send a man out underfed and scantily clothed 
 to his wintry toil in the frozen farmyard, and bid him return 
 at night to an unwholesome, dirty, drafty cottage, and as 
 the months go by his mental and physical strength are 
 drained. He becomes spoiled goods, and at last has to be 
 thrown away into the workhouse. Meanwhile his chil- 
 dren are growing up under similar conditions, kept merci- 
 lessly alive for a battle they are not fit to fight. 
 
 When we get below the minimum of comfort the price of 
 labour has an immediate and cumulative effect upon its 
 efficiency. The further we go below the minimum the 
 more important is this effect until we reach starvation point. 
 Hence it is clear that anything which affects the reward of 
 Labour for a short period tends to increase its efficiency 
 beyond that period. And the " short period " may be 
 very short. If I take a half -starved tramp off the road and 
 put him to work in my garden, in return for food, clothes, 
 and shelter, for a week, I shall lose on the transaction. If I 
 keep him a second week he will be capable of twice as much 
 work, and I may be the gainer. This is an extreme case.
 
 22 THE LABOUR MOVEMENT. 
 
 But on a wider scale, with more far-reaching effects, though 
 in a lesser degree, every increase in wages that are still 
 below the minimum of comfort tends in the same direction. 
 Now it is easy to understand that the efficiency of Labour 
 reacts on wages ; for it increases the total produce of the 
 country, and with it, though in a lesser degree, the share 
 that falls to the labourer.* Granting then that Trade 
 Unionism raises the price of Labour for short periods by 
 enabling it to take advantage of every turn of the market, 
 it follows that it tends to make a permanent improvement 
 in the condition of the labourer by the best of all methods, 
 the improvement of the labourer himself. 
 
 What effect must this rise in wages have upon profits ? 
 This question is forced upon us not only by general 
 economic considerations, but by the patent fact that in 
 many of the worst paid trades the employers, or some of 
 them, find it difficult to keep their heads above water ; and 
 in some cases, as in some of the so-called " sweating " dens 
 of East London, the employer is actually worse off than his 
 half-starved underlings. At first sight this is a paradox. If in 
 the Labour market, and especially in the unskilled Labour 
 market, the advantage in bargaining is almost without excep- 
 tion on one side, profits should be high, and they should be 
 highest where wages are lowest. As it turns out the case is 
 often the other way. The general discussion of this ques- 
 tion is a matter for the political economist. It concerns us 
 at present only as raising the question how the employer 
 can afford to raise wages. Must not profits suffer, and will 
 not Capital leave the country ? 
 
 An increase of wages acts upon profit mainly by affecting 
 
 * The total produce of the country is really the source of demand 
 you cannot effectively demand labour, whether of employer or em- 
 ployed, until you have the wherewithal to pay for it. How much you 
 demand therefore depends on how much you have. Hence, as econo- 
 mists have shown, the total national dividend is the source of demand 
 for further labour. Hence an increase of production stimulates demand 
 and tends thus to raise the equilibrium wage.
 
 TBADE UNIONISM. ii3 
 
 the cost of producing goods for the market. But how an 
 increase of wages will affect cost in any case, and how a 
 change in cost of production will affect profits, is very un- 
 certain. If the higher wages increases the efficiency of the 
 worker,* cost of production will remain the same, or even 
 fall. Again, a rise of wages may or rather must stimulate 
 demand for goods which workmen consume in particular 
 for such as they purchase when " times are good," and go 
 without when things are slack. In these departments in- 
 creased demand may revolutionise a trade by introducing 
 production on the large scale a change which, if successful, 
 will greatly lower cost and yet allow of higher wages for 
 the worker. Similar results follow if the rise of wages 
 stimulates the employer to better methods. The first cock- 
 crow sets the whole roost going, and the first awakening in a 
 slumberous business calls forth corresponding activities on 
 all sides, with good results to all parties. Nevertheless, there 
 may be cases in which the increased cost of manual labour 
 does raise the price at which a commodity can be sold with 
 profit. If we are to believe the reports of many of our princi- 
 pal railway companies the agitator t has by this means 
 largely increased net expenses of many of them in the last few 
 years. Supposing cost of production to be thus increased, 
 what will happen ? It is held by some economists that the 
 process will be self-defeating. Capital will leave the country 
 and wages will fall. That this may be the result in ex- 
 treme cases, and even has been the result in some instances, 
 it would be rash to deny ; though we may remark, follow- 
 
 * I neglect the case where one class of workers get increased wages at 
 the expense of another class. As I am considering the case of a general 
 rise for manual workers, such " compensation " could only be at the ex- 
 pense of wages of management or of interest i.e., it must fall on the 
 employer or on the capitalist. 
 
 f The "agitator" is not infrequently attacked almost in the same 
 breath (a) for ruining the employer by causing him to pay higher wages, 
 and (b) for humbugging the workman into thinking that he can get 
 wages raised. But this must be one of the ' ' inner contradictions " of 
 Capital spoken of by Karl Marx.
 
 24 THE LABOUE MOVEMENT. 
 
 ing good authority, that it has more probably come about, 
 if at ail, from injudicious disputes * than from simple in- 
 crease of cost. The truth is that it is not very easy for Capital 
 to leave the country. There is much Capital that cannot leave 
 the country at all. You cannot summon a Genie of the 
 Lamp to take up the North- Western Eailway and deposit 
 it in China. And it would not pay if you could. In most 
 cases the process is one which requires a certain tolerably 
 clear margin of advantage to induce it. To the extent of 
 this margin these profits may be reduced without risk of 
 loss by emigration of Capital. Nor is this all. The Labour 
 movement of to-day is not confined to the British Isles. It 
 is cosmopolitan. The leading country in such a movement 
 is always held back to some extent by the laggards in the 
 rear, but at the same time and with an equal force she is 
 pulling them forward. The movement in each nation helps the 
 progress of the whole. This has always been so. You cannot 
 move your foot without displacing the centre of gravity of 
 the world. Nor can you act for good or evil in one country 
 of the Western world without affecting the balance of forces 
 throughout the rest. But if the correlation of cause and 
 effect has always worked without our knowledge of it, it 
 becomes much closer and more direct when men are aware 
 of it, and deliberately set it in motion. That the feeling 
 of a wider brotherhood is dawning on the leaders of the 
 Labour movement the working classes of this island was 
 nobly proved by the warm and generous help given to the 
 German printers in the struggle of 1891. It has been perti- 
 nently asked where was the British capitalist in that dis- 
 pute. He has told us often enough that the cheapness of 
 foreign labour is the one obstacle to better conditions for 
 
 * Trade disputes are in themselves an evil to be deplored, but they 
 may be the lesser of two evils. In any case the common capitalist 
 invectives against them, on the ground that they "drive away trade," 
 are rather double-edged. It takes two to pick a quarrel. The doctrine 
 of " non-resistance " of passive acquiescence in every demand must 
 be preached to both sides if at all.
 
 TRADE UNIONISM. 25 
 
 English workmen. Then he had his opportunity. His 
 gold would have won the battle for the German workman 
 and given an impulse to the whole Labour movement on the 
 Continent. Then was the moment to prove his sincerity. 
 But the opportunity was not taken. 
 
 Let us concede then that in raising herself England is 
 raising the world with her. The effort is the greater, but the 
 prize the more glorious. At worst the check is one that only 
 operates in certain cases, and even so allows a wide margin. 
 Meanwhile, notice a concurrent effect of the improvement in 
 the labourer's condition the disappearance not of Capital 
 from the country, but of the weaker employer from the field of 
 competition. When wages are low and men's time may be 
 had for the asking, it becomes easier to work a business of a 
 certain kind with profit. Men of moderate or inferior abilities 
 are tempted to one of the most difficult of games the 
 management of a modern business concern by the ease with 
 which the pawns are moved. There are hosts of businesses 
 struggling on with no profit to worker, manager, or con- 
 sumer, and which are much better put out of their misery. 
 The natural refuge of these weak business concerns is the 
 weak and underpaid workman, and accordingly competition 
 though continually eliminating them does not even so do 
 its work fast enough. The fixing of a minimum wage 
 destroys employment of this kind, to the great ultimate 
 gain of all classes. 
 
 I conclude that the argument from the "self-defeating" 
 process is substantially unsound and unimportant. A rise of 
 wages has a diverse effect in different cases ; but to sum up 
 the discussion low wages save for the moment, but are un- 
 economical in the long run. Hence they are the refuge of the 
 weak employer, who lives from hand to mouth. Eaise the rate 
 and you eliminate this class of managers and bring grist to 
 the mill of the stronger men, who can pay the higher rate 
 and make as good a profit as before. 
 
 But on the whole subject of the effect on trade of the
 
 26 THE L ABOVE MOVEMENT. 
 
 Unions, and the improved conditions for the worker which, 
 directly or indirectly, they have brought about, no one is 
 better entitled to a hearing than Mr. Mather, M.P. : 
 
 " We employers owe more than, as a body, we are inclined 
 to admit to the improvements in our methods of manu- 
 facture, due to the firmness and independence of trade com- 
 binations. Our industrial steadiness and enterprise are the 
 envy of the world. The energy and pertinacity of Trade 
 Unions have caused Acts of Parliament to be passed which 
 would not otherwise have been promoted by employers or 
 politicians, all of which have tended to improve British com- 
 merce. And it is worthy of note that this improvement 
 has gone on concurrently with great and growing competi- 
 tion of other nations, owing to the development of their own 
 resources. The enormous production of wealth in Great 
 Britain during the present half -century, which is due to 
 natural resources and the labour and skill bestowed upon 
 their development, has grown most rapidly during a period 
 remarkable for the extension of the power of Trade Unionism. 
 Prosperity beyond the dreams of avarice has followed in the 
 wake of our industrial habits and customs, and these have 
 undoubtedly been largely promoted by the great labour 
 organisations. . . . Every intelligent employer will admit that 
 his factory or workshop, when equipped with all the comforts 
 and conveniences and protective appliances prescribed by 
 Parliament for the benefit and protection of his workpeople 
 though great effort, and, it may be, even sacrifice, on his 
 part has been made to procure them has become a more 
 valuable property in every sense of the word, and a profit has 
 accrued to him owing to the improved conditions under which 
 his workpeople have produced. . . ." And speaking of the im- 
 portance of permanence and stability in a trade, he adds : 
 " The keen interest they feel in seeking to secure permanence 
 and progress in the trade they pursue has been strikingly 
 shown by the fact that Trade Unions have agreed to reduc- 
 tions of wages, advocated short time, and offered many
 
 TEADE UNIONISM. 27 
 
 suggestions involving sacrifice on the part of the workers, in 
 order to stem the tide of temporary adversity." * 
 
 Perhaps a majority of employers might be quoted in an 
 opposite sense, but when Saul also is among the prophets 
 he is worth a thousand voices on the other side. 
 
 So far we have studied Trade Unionism as it actually works. 
 We have seen that it regulates the conditions of employment in 
 the interests of all the workers. It puts the manual labourer 
 on an equality with his employer in arranging terms, and 
 accordingly it raises wages and diminishes hours of work. 
 It effects general economy by eliminating incapable em- 
 ployers, and by raising the standard of comfort among work- 
 men it is not only a direct benefit to them, but, by making 
 them more efficient agents in production promotes the 
 general health of the national industry. 
 
 If now we ask what hope there is that Trade Unionism 
 may succeed in establishing what I have called the minimum 
 of comfort for all workers, we shall recognise by far the 
 greatest and most palpable obstacle in the present weakness 
 of Trade Unionism itself. The competition of non-union 
 men, and the mistaken policy and narrow interests of some 
 of the Unions themselves, keep the movement back far more 
 than any inherent weakness in the principle of Unionism. 
 These obstacles are, however, being gradually overcome by 
 the spread of moral and economic education among workmen, 
 and by the consolidation and federation of Unions. The 
 federal principle has the special merit of overcoming sec- 
 tional antagonisms and the tendency to a narrow corporate 
 spirit. The larger Unions are in a position to choose abler 
 men to administer their affairs. They are not wont to pre- 
 cipitate expensive disputes, and they command the respect 
 which is necessary as a basis of negotiation ; and as different 
 trades act together it becomes increasingly difficult to deal 
 with them by bringing in outside labour instead of by an open 
 
 * Article on " Labour and the Hours of Labour," in the Contemporary 
 Review for November, 1892.
 
 28 THE LABOUR MOVEMENT. 
 
 and honourable discussion of difficulties. The first step 
 then for Trade Unionism is to extend and perfect itself as a 
 moral, educational, and economic movement. These three 
 aspects of it are in practice inseparable, and the main 
 immediate hindrance to its achievement of its true ends is 
 the imperfection of its own internal development an imper- 
 fection which its leaders are making every effort to over- 
 come. 
 
 The tendencies set on foot by Trade Unionism itself will 
 help it whenever wages are below the minimum on which 
 the worker can best develop his powers. I mean the 
 economic advantages already explained of raising wages to 
 this minimum. If the Unions were fighting against a con- 
 tinual and ever-increasing economic pressure, one might 
 doubt the permanence of their success. But to a certain 
 point their work gets easier as it goes on. The second 
 advance is sometimes more easily won than the first. This 
 holds just as long as wages remain below the minimum of 
 comfort. Up to that point at least a rise of wages really 
 pays in the long run. 
 
 Lastly, we have been assuming all along that the Union 
 has to fight the employers and the public at every step. 
 This would once have been practically true, but it is true no 
 longer. Even as regards private concerns the education 
 both of Unionists and of their employers has improved of 
 late years, and the employer has come to see that it " pays " 
 in the long run, not only from the humanitarian, but from 
 the business point of view, to employ Union men on Union 
 conditions. Still more fundamental is the change in public 
 feeling. The growing inclination of public bodies and co- 
 operative societies to pay Union rates marks a new era in 
 the history of Unionism. It is the beginning of a definite 
 system of fixing wages by the moral sense of the com- 
 munity. The rate on which the Unions, the ratepayers, 
 and the best employers agree has moral as well as economic 
 forces at its back, which the inferior employer cannot long
 
 TBADE UNIONISM. 29 
 
 resist. As to the justice and desirability of backing the 
 Union, no one who holds the diffusion of the means of the 
 elementary comforts to be the first object of an industrial 
 system can have any possible doubt. 
 
 But it is not only direct help that the Unions require. 
 Admirably as they fulfil the elementary functions of the 
 organisation of industry, there are limits to their work. 
 Let us now consider these, and inquire what further organisa- 
 tions are necessary to get over them and to supplement the 
 efforts of Trade Unionism and complete its work. 
 
 When manual labour is cheaper than machinery, under a 
 system of free competition manual labour will be employed. 
 Conversely, if by any chance machinery in any occupation 
 becomes cheaper than manual labour, employers, in the 
 absence of any artificial restraint, will dismiss workmen and 
 set up machines. Or, if machinery be not available, an in- 
 crease in the price of labour may lead to retrenchment by 
 some other method of substitution. A better class of work- 
 men, for instance, may be found in order that the same 
 amount of work may be done by fewer hands. Hence the 
 increased wages of those who retain their work may tend to 
 throw the less capable labourer out of work altogether. 
 This is a possibility which must be faced. Now, first, let me 
 boldly say that if there is no remedy for it the thing must be 
 done. It is better that three-fourths should earn a decent 
 living and the remaining fourth be left to private charity 
 than that all should struggle with starvation together. It is 
 a terrible alternative, but the better of the two. But, 
 secondly, the thing need not be. The starving remnant want 
 food, clothing, and shelter, and they have muscles and sinews. 
 To set them to work to supply their own demands, or their 
 equivalent, must be possible. It is not that there is a 
 surplus population. It is not that there are too many 
 workers for the demand ; for there is also too much demand 
 for the commodities supplied. The very same persons who 
 could supply the work stand also in need of the products of
 
 80 THE LABOUR MOVEMENT. 
 
 work. There is demand for the products of work on their 
 part, but ineffective demand : there is capacity for supplying 
 work, but ineffective capacity. Why ineffective ? Why do 
 the worker and his work call to one another over a gulf they 
 cannot cross? Because there is no organisation connecting 
 producer and consumer, and setting men to work to supply 
 all needs. Now such an organisation must be found, and 
 the road to it lies through the control of industry by con- 
 sumers. 
 
 We see here the necessary supplement to the Trade Union 
 movement. The need for some such supplement becomes 
 even clearer when we consider the whole function of Trade 
 Unionism in the distribution of wealth. We have seen 
 that its object, after regulating the conditions of industry, is 
 to fix the minimum wage for the worker at an amount which 
 will enable him to attain his full development and to bring 
 up his family in a corresponding way. It thus secures the 
 primary condition of sound economics " fair " remuneration 
 for the worker. 
 
 But there are other social needs not to be met in this way. 
 In dealing with incompetency we have already, in principle, 
 discusssd the support of the helpless, the old and the 
 infirm. This burden falls on the workers in one shape or 
 other at the present day, and will continue to do so until a 
 perfected individualist philosophy pushed to its logical con- 
 clusion has persuaded us to dispose of these encumbrances 
 by the more primitive and drastic method of putting an end 
 to them when most convenient. Pending the application of 
 this theory to practice, we have to regard the support of those 
 who produce nothing because they are unable as a charge 
 upon the community. It might indeed be met, in the main, 
 by a sufficient rise of wages all round, but such a rise could 
 hardly be obtained within any reasonable time by Trade 
 Union action. Besides, experience has shown that we can- 
 not safely leave the helpless to the care of individuals unless 
 we wish to punish them because they are helpless. The
 
 TEADE UNIONISM. 31 
 
 burden is a national one, affecting Society as a whole, for all 
 have been young, and all are liable to the misfortunes of 
 infirmity and old age. We are all of us therefore at one 
 time or another a burden/economically, upon Society ; there- 
 fore, we ourselves, as Society, had better meet the burden. 
 Directly or indirectly the charge must be defrayed out of the 
 surplus left in the pockets of the nation after the mainten- 
 ance of the producers has been met ; and experience shows 
 that it had better be met directly, by a national or municipal 
 tax. There are, further, many things essential to public 
 health, or useful for the general culture or enjoyment, which 
 can be more efficiently carried out by Society collectively. 
 I need not run through the list of these, but merely mention 
 them here as a class of objects which will make increasing 
 calls upon the public purse. 
 
 By merely fixing wages at a suitable amount we do not 
 provide for all these needs. But, the rate of wages being 
 given, there is a considerable surplus of wealth which at 
 present goes into various private pockets in the form of Eent 
 Profits or Interest. It is only by drawing on this surplus, it 
 would appear, that Society can meet the demands upon it. 
 The mass of the surplus* can never be touched by Trade 
 Unionism, nor should we desire it otherwise. If here and 
 there a strong Union wrests part of his large profits from an 
 employer there is no gain to the community at large. There 
 is much profit to a certain body of workers who are thus put 
 at an advantage as compared with others, instead of still 
 greater gain for a single man. But there is no broad collec- 
 tive gain, no improvement of the general economic condition. 
 A bit of profit has been transferred from one pocket to some 
 scores of pockets, that is all. And from our point of 
 view at least, movements to the enrichment of a few are 
 worthless. Trade Unionism then neither can nor should 
 aim at securing profits for the workers. By doing so it will 
 fail in nine cases out of ten, and in the tenth succeed only in 
 creating a small class of workmen-aristocrats. Its legitimate
 
 82 THE LABOUR MOVEMENT. 
 
 function is to settle the hours and condition of work, and the 
 general minimum rate of wage. 
 
 The movements that are to supplement Trade Unionism 
 must accordingly satisfy two conditions. First they must 
 " correlate " demand and supply, and obviate the present 
 waste of work on one side, and human life on the other. 
 Secondly, they must place the surplus of wealth remaining 
 after the producer's claims are " fairly " satisfied at the 
 disposal of the community for the common use. We have 
 now to consider the methods by which this is being effected.
 
 CHAPTEE III. 
 THE AIMS AND METHODS OF CO-OPEBATION. 
 
 IF Trade Unionism represents the control of industry by 
 communities of workers in the interest of all as workers, 
 Co-operation is the system by which production may be 
 organised wholly or in part in the interests of the com- 
 munity as consumers. Let us ask then what Co-operation 
 is doing, and can do, in the way of regulating production, 
 and making a fair distribution of surplus wealth. 
 
 First, as to the power and growth of the Co-operative 
 movement. We have not here to tell again the twice-told 
 tale, but merely to recall half-a-dozen figures to show that 
 whatever be the precise economic value of Co-operation, it 
 is a great and growing power to be reckoned with, and that 
 whatever it can do it probably will do on an ever-increasing 
 scale. 
 
 Not to go back to the days of infancy, there were, in 
 1862, 440 co-operative societies known to exist in England 
 and Wales, with a membership of 90,341 persons. Their 
 sales in that year amounted in round numbers to 2,330,000. 
 They made a profit of about 165,500.* In 1890 there 
 were about 1,303 societies existing in England and Wales, 
 of which 1,092 made returns published in the report of the 
 Co-operative Union. These 1,092 societies had a member- 
 
 * These figures are taken from the evidence of Mr. J. T. W. Mitchell, 
 Chairman of the English Co-operative Wholesale Society, before the 
 Labour Commission. 
 
 4 83
 
 34 THE LABOUR MOVEMENT. 
 
 ship of 883,000, sold goods to the amount of 33,000,000 
 during the year, with a net profit of 3,200,000. In addition 
 there were 333 societies in Scotland, with a membership of 
 171,000, bringing the total membership of the Co-operative 
 State to something considerably over a million persons. * 
 
 Confining our view to England and Wales, we see that in 
 less than thirty years the co-operative population has in- 
 creased nearly tenfold, its business nearly fifteenfold, and 
 its profits almost twentyfold. 
 
 We have now to ask, What is this great movement doing 
 for the interests we have at heart ? What is the economic 
 significance of Co-operation? In most industries at the 
 present day the production of any article is left to any one 
 who chooses to undertake it. A man makes soap, or cotton, 
 or clothes, not because he wants to use all that he turns 
 out from his mill or workshop himself, nor necessarily 
 because some one else who is going to use them has ordered 
 them, but because he guesses or calculates from the general 
 state of the market that some one or other will buy what he 
 makes. The case is not much altered when the actual 
 manufacturer produces for a middleman. The middleman 
 is not a consumer, but an agent in production, and when 
 the speculation and the risk is not undertaken by the maker 
 of goods, it is merely handed over to the merchant, whether 
 he be the large wholesale dealer or finally the shopkeeper. 
 The modern system of commerce, then, will not be greatly 
 misrepresented if we figure it as being carried on between 
 two individuals, A and B, in such a way that A, without 
 consulting B, guesses at what B will want, and spends 
 much labour in making it, B meanwhile doing the like for 
 A. The natural consequence is that when A and B come 
 together to exchange their goods they do not find them- 
 selves altogether suited. For example, instead of A making 
 hats for both, while B made boots, it may have occurred to 
 
 * See the Keport of the Twenty-fourth Annual Co-operative Congress, 
 1892, p. 136.
 
 THE AIMS AND METHODS OF CO-OPEBATION. 35 
 
 each of them to make hats. The result is that they will 
 have four hats between them and no boots, and severe 
 commercial depression will ensue. The superfluous hats 
 will be worthless, and both A and B will go barefoot. Now 
 this is just what happens on a large scale in England to- 
 day. Production is for the most part unregulated. There 
 is no systematic attempt to get what is necessary and good 
 for the community produced, neither more nor less. On 
 the contrary, every man produces what he thinks some one 
 will give a good price for, and if many other people have 
 been thinking the same thing there will be a glut in the 
 market. And hence the paradox of modern industry, that 
 plenty is the cause of starvation.* 
 
 Now, if we go back to A and B we may hope that they 
 will learn wisdom from experience. They have but to take 
 a very simple step. Instead of retiring each to his own 
 abode to work apart, they have merely to consult with one 
 another as to their respective needs, and set about to help 
 one another in supplying them. Instead, then, of A making 
 something that he thinks B will buy, with a view to profit- 
 ing on the exchange, while B works similarly for his profit, 
 A and B will now work together, create a joint product, 
 and share it between them in other words, they will co- 
 operate ; for this is precisely what is effected by the co- 
 operative store. Instead of leaving it to individual millers, 
 and shoemakers, and grocers to supply their needs and 
 make what profit they can, co-operators undertake to 
 
 * It was at one time contended by economists that permanent and 
 general over-production is an impossibility. This is probably true, sup- 
 posing the machinery of exchange social and material perfected. 
 Meanwhile, nothing prevents continual and repeated over-production in 
 many departments of industry at once, over-production being understood 
 relatively to the existing effective demand. From the point of view of 
 good economic organisation there is over-production whenever the price 
 is too low to allow adequate remuneration for producers, whether em- 
 ployers or employed. Such a contingency is not only possible, but 
 frequent, the low price continuing for considerable periods, and varying 
 according to circumstances, i.e., according to the ease with which demand 
 for the article expands, or the supply of it gets contracted.
 
 36 THE LABOUB MOVEMENT. 
 
 supply their own needs, or to direct others to do so. Co- 
 operation accordingly represents the organisation of 
 industry by a community of consumers in the interest of 
 all as consumers. As such it is the natural supplement to 
 organisation by producers. 
 
 Now a Co-operative Society, like a Trade Union, is 
 primarily an association of some of the residents in a 
 particular town or village. As such its scope and influence 
 on the regularity of industry and the distribution of wealth 
 are necessarily limited and partial. It is for one thing 
 almost entirely confined to the business of shopkeeping. 
 It is thus a partial regulation of one form of industry in 
 the interests of a small group of consumers. A wider 
 future opened upon co-operation when the Federal 
 principle was introduced. What Federation will do for 
 the Trade Union movement has yet to be seen. What it 
 has done for Co-operation is clear. It has transformed an 
 aggregate of isolated and comparatively petty shops into an 
 almost national organisation, undertaking wholesale pro- 
 duction and distribution * on a scale large enough to form 
 an appreciable fraction of the commerce of the country, and 
 linking a million men and women all over the island by a 
 common interest. Through the Federal principle then 
 Co-operation and Trade Unionism are growing to be modes 
 of national organisation, and it is only as their development 
 in this direction grows complete that they take their true 
 place as methods of the collective control of industry in the 
 interests of the nation as a whole. 
 
 The Co-operative Society, according to our analysis of its 
 principle, is a community of consumers, undertaking, 
 through their committee and officials, to provide the goods 
 they require for their own use. They find the capital and 
 
 * The two great wholesale societies exist to supply the Retail Stores. 
 They are in fact associations of which the local societies are members. 
 The English Wholesale had, in 1891, a membership of 966 societies, and 
 sold goods to its members to the value of 8,000,000. (Evidence of Mr. 
 Mitchell, p. 8.)
 
 THE AIMS AND METHODS OF CO-OPERATION. 37 
 
 direct the management, and we have thus a form of the 
 control of production by consumers. 
 
 This fact has been in some degree obscured by the 
 tendency of the movement to concentrate itself upon that 
 form of production which is known as retail trade. Many 
 people would hardly consider the retail trader as a producer 
 at all, and are puzzled by the inclusion of shopkeeping 
 among the branches of production. Of course, this is a 
 pure mistake. Everybody is an agent of production who 
 assists in conveying goods to the consumer. The baker's 
 boy who brings my bread round in a cart to my house is no 
 whit less a producer of my bread than the baker who makes 
 the loaf, or the seamen and railway men who carried the 
 wheat from Colorado. What I want is not wheat that is 
 in Colorado, nor bread that is in the bakery, but a loaf 
 on my table, and every one who has assisted in making 
 the loaf out of its original material, and in bringing it to 
 my table, is equally an agent in the production of the loaf 
 which I require. But furthermore, Co-operation is no 
 longer confined to retail trade. It not only, as above 
 shown, does a large wholesale and therefore also a large 
 transport business, but it is steadily extending itself to 
 manufactures of various kinds. Here, then, we have a 
 vigorous and growing movement based on the principle 
 that the customer sets the producer to work, and regulates 
 his industry through his committee. That is, we have in 
 essence the machinery for correlating demand and supply, 
 and by that means doing away with the fluctuations of trade, 
 from which all classes suffer so much.* 
 
 * This result cannot indeed be expected on any great scale until a far 
 larger proportion of the trade of the country is conducted, in one form 
 or another, on co-operative lines. But the tendency is already evident. 
 Both Mr. Mitchell and Mr. Maxwell (Chairman of the Scottish Wholesale 
 Society) dwell on this effect of Co-operation. Mr. Mitchell (Evidence, p. 
 13) expressly attributes the greater continuity of work for the Co-operative 
 employ6 to the fact that " we have an organised market for our produc- 
 tions." Mr. Maxwell (Evidence before Labour Commission, October 25, 
 1892, p. 36) says that, owing to the steady increase of trade, "workmen
 
 88 THE LABOUR MOVEMENT. 
 
 Secondly, the profits of co-operative enterprise (though 
 ultimately distributed on a scientific principle) are primarily 
 comrnunised loss and gain affecting directly the whole 
 co-operative community. Let me repeat Mrs. Webb's 
 explanation of this. At the co-operative store you pay, 
 in the first instance, the ordinary market price for your 
 purchase, and you receive in return a tally for the amount 
 of your payment. At the end of the quarter you send in 
 your tallies, and the available surplus for dividend having 
 been determined, you receive a share of it proportionate to 
 the amount of your purchases as guaranteed by your tallies. 
 To some people this looks like a mere clumsy way of giving 
 to you with one hand and taking away with the other. 
 " Why not lower prices at once ? " they say. Others have 
 attached importance to it as a means of encouraging thrift 
 by putting people in possession of two or three pounds at 
 once, instead of saving for themselves on each purchase. But 
 the fact is that this simple device has succeeded in com- 
 munising profit and dividing it scientifically among the 
 members of the community. A society of consumers has 
 undertaken production. All the producers being paid, cost 
 of production, including management, being met, there 
 remains a surplus. This surplus would be a profit if the 
 community were selling to outsiders. But they are selling 
 to themselves. The surplus therefore remains in the hands 
 of its original possessors, and is ultimately, with the 
 exception of such part of it as is reserved for collective 
 purposes educational or provident distributed among all 
 members of the society on a definite principle. Thus the 
 
 and workwomen have almost a certainty of constant employment in the 
 Society." In the clothing factories, he says, " during the slack season 
 we are so certain of an outlet for our productions, we make up larger 
 stocks, thus giving employment all the year round." There is, again, a 
 confidence in the relations of the Wholesale Society and its customers, 
 which prevents injury from the small accidents of commerce, and tends 
 to stability. And this result would be more marked if Co-operative trade 
 were large enough to set the tone to industry as a whole.
 
 THE AIMS AND METHODS OF CO-OPERATION. 39 
 
 whole community gains and loses together, and not at the 
 expense of one another. 
 
 Hence, thirdly, "Profit on Price," profit properly so 
 called is not communised, but abolished. The surplus 
 of the value produced over the cost of production passes 
 to the community the producer's surplus is communised. 
 But there are no separate business establishments effecting 
 exchange, and therefore no profit. Hence competition for 
 profit disappears. 
 
 Thus the Co-operative Movement admirably achieves all 
 that is required of the collective control of Industry in the 
 matter of directing Production, communising the surplus, 
 and accordingly restricting competition. And with every 
 stage of its growth the movement will become more effectual 
 in each direction. The Federal principle is gathering the 
 isolated Co-operative Societies together into a great whole of 
 almost national extent ; so that when we speak of the Co- 
 operative community, we no longer mean a small local 
 group, but a million of men and women in all parts of Great 
 Britain. The Co-operative community is becoming a mode 
 of national organisation, with results of national import- 
 ance. 
 
 It may, nevertheless, be objected to Co-operation that, 
 fast as it may grow, it can never absorb the whole of our 
 industry. Perhaps not; but meanwhile the Co-operative 
 principle can at this moment be still more rapidly extended 
 in another direction. There are many things which prac- 
 tically all the members of a community require. Such are 
 security to life and property, good roads, means of convey- 
 ance and communication, light, fresh air in open spaces, 
 water, and the rest. And as to these, notice that demand 
 is very constant, and people are very nearly unanimous as 
 to the quality of the article desired. There is little room 
 for variation of taste in the matter of drinking-water, or 
 even railway travelling. In these cases, then, where all, 
 or nearly all, people require a commodity, and where iudi-
 
 40 THE LABOUR MOVEMENT. 
 
 viduals do not differ much in their tastes, a different form 
 of co-operation has been growing up. I mean the co-opera- 
 tion that makes use of legally established machinery. The 
 dwellers in any thriving town which provides itself through 
 its corporate government with the requisites mentioned, 
 are, industrially considered, members of a large co-operative 
 society. They find that as a body they have certain needs 
 in common ; they direct their servants, the mayor and the 
 councillors, to make arrangements to supply these needs, 
 and they raise the necessary capital by a rate upon them- 
 selves. This is Co-operation, or, if you prefer it, Socialism. 
 On this side the two ideas are one. In each case the 
 persons who are to use the product set the producer in 
 motion, and determine the quantity and quality of the 
 product. 
 
 In this, as in voluntary Co-operation, we have the com- 
 munity of consumers directing production ; we have a sur- 
 plus over the cost of production, which can be used for 
 collective purposes in improving the locality ; and for this 
 area of industry once more we eliminate "profit on ex- 
 change " and competition for profit. Here we have one- 
 half of the case for a " progressive " municipal policy. It 
 is simply a step to the collective control of industry in the 
 interests of all. And it differs from voluntary co-operation 
 solely in the employment of legal machinery a difference 
 justified by the nature of the commodities provided. 
 
 It remains only to be pointed out that the State and the 
 municipality differ primarily in size ; and if the dwellers in 
 a municipality may with advantage co-operate for producing 
 what is needed for their town, a whole nation may, with 
 equal advantage, set its central government to work for 
 things pertaining to the country as a whole. Thus if we 
 municipalise tramways, we may with equal reason nationalise 
 railways. It is commonly urged that a State department is 
 a bad manager. This may be so in certain cases ; but there 
 is no need for it to be so. In the Post Office, for example,
 
 THE AIMS AND METHODS OF CO-OPERATION. 41 
 
 we have one of the largest business organisations in the 
 country conducted, on the whole, cheaply and efficiently, 
 with a large profit to the nation. And this is not the only 
 point gained by our " socialistic" postal system. Suppose 
 the service handed over unconditionally to private com- 
 panies, we should have tremendous competition for the 
 mails between large centres and in busy, populous districts, 
 together with high tariffs or perhaps total neglect in out- 
 lying places. The uniform rate, which is the making of the 
 Post Office as a national institution, would go, and with it 
 the means of uniformly cheap and speedy communication, 
 which at present unites friends and kindred the whole 
 country over. Of course, at the same time, the profit which 
 now goes to meet the general expenditure of the nation 
 would pass into private hands. In general, it may be held 
 that the State will manage a business well if the public at 
 large are immediately and directly interested in its manage- 
 ment. If the military and naval departments are badly 
 administered, the public has its own want of interest in the 
 matter to thank. Work will not be well done, as a rule, 
 unless those for whom it is done keep awake. 
 
 Put the municipality in command of that which is muni- 
 cipal in extent and the nation in control of that which is 
 national. In this way the principle of control by the body 
 of consumers proceeds most easily and speedily by several 
 converging roads. And on each method the effects are the 
 same. We avoid the waste and friction at present involved 
 in the adjustment of demand and supply ; and we put the 
 surplus revenue into the pockets, not of individuals, but of 
 the community. Lastly, we introduce a new spirit and a 
 new principle into industry. 
 
 Those who at the present day carry on business for per- 
 sonal profit or wages, are unintentionally performing a 
 social function of the first importance. I say uninten- 
 tionally, because, as things now stand, neither employers 
 nor workmen exercise themselves much, as a rule, about
 
 42 THE LABOUR MOVEMENT. 
 
 the social usefulness of the commodity they are producing 
 or distributing. For them the one thing needful is to find 
 sufficient purchasers, and the true commercialist spirit cares 
 little for the destiny or usefulness of the commodity it has 
 produced when the sale is once made. Of course there are 
 honourable exceptions to this rule. There are men who 
 would rather starve than engage in a socially noxious traffic 
 of any kind, and there are many who would bear consider- 
 able loss rather than turn out an unsound article. Never- 
 theless, the difficulty of stirring any social feeling against 
 trades, or forms of conducting trade, which cost the lives or 
 impair the health of millions, is a sufficient evidence of the 
 fact that, however important be the actual function sub- 
 served by producers under an individualist system, the per- 
 formance of that function is not the motive of production, 
 and, certain honourable exceptions apart, bears no relation 
 to that motive at all. 
 
 Since, then, the all-important work of supplying the 
 material and other needs of society is left to nature or to 
 chance, there is little need for wonder if the said work is 
 ill performed. Nor is it of the slightest use to hurl denun- 
 ciations at the head of any particular class at present en- 
 gaged in production. If over-pressure of work alternates 
 with enforced idleness ; if 50 per cent, profits are found side 
 by side with ruin ; if shoddy or adulterated goods fill the 
 market, society has no one but itself to blame. It counten- 
 ances and upholds a certain system or rather absence of 
 system and it must take the consequences. 
 
 The reform needed, then, is a quite different method of 
 producing wealth. We want a new spirit in economics 
 the spirit of mutual help, the sense of a common good. 
 We want each man to feel that his daily work is a service 
 to his kind, and that idleness or anti-social work are a 
 disgrace. This new spirit, and the practical arrange- 
 ment for giving it effect, we have seen growing up from 
 small beginnings, with many drawbacks and limitations,
 
 THE AIMS AND METHODS OF CO-OPERATION. 43 
 
 in the movements here reviewed, and we see accordingly 
 in their development the best hope for the immediate 
 future. 
 
 But now, supposing this control of industry by consumers 
 completed, with all the results above enumerated fully 
 realised, what guarantee is there, it may be asked, that the 
 worker will be adequately paid or good conditions of work 
 secured ? We may steady trade, and so increase our total 
 product, and we may cornmunise our surplus ; but all with- 
 out adequately remunerating the worker. This is particu- 
 larly obvious where the communities of consumers and 
 producers are not the same i.e., when men consume who do 
 not produce. Take a co-operative society employing work- 
 men, shop assistants, &c. These employes need not be 
 members of the society, and if they are, they may be a very 
 small minority. What is to safeguard their interest ? How 
 can we be sure that the society will not be as anxious to in- 
 crease the common profit at the expense of the workers as 
 an ordinary Joint Stock Company, which would rather see its 
 men work eighteen hours a day than abandon per cent, of 
 its dividend ? 
 
 There are two answers to this. First, the spirit of co- 
 operation is opposed to " sweating " in any form. The 
 movement never has been, and never can be, worked by 
 mere " dividend hunters." It rests on public spirit and the 
 sense of community; and the co-operative community is 
 not a narrow corporation, such as fosters sinister interests, 
 but is as open as the air to all dwellers in the land. Hence 
 co-operators have, in more than one instance, taken a lead- 
 ing part in reforming the conditions of employment. Thus 
 in thirteen large societies in Oldham, the hours worked by 
 employes in the shops average, according to Mr. Hardern, 
 56' 16 per week* (exclusive of meal times). The same 
 authority estimates the average for ordinary shops in Old- 
 ham at 70 hours. The south country stores do not quite 
 * Evidence given before the Shop Hours Committee. Report, p. 208.
 
 44 THE LABOUR MOVEMENT. 
 
 reach the Oldham level ; but the average hours for the 
 whole number of societies investigated by Mr. Hardern 
 come to 57 per week, or 9 per diem. And in Northumber- 
 land certain stores have already instituted a 48-hour week. 
 Thus the Northern Co-operative Societies are becoming the 
 pioneers of the eight-hour day for shop assistants, just as they 
 led the van in the weekly half-holiday movement thirty years 
 ago.* No doubt there have been disputes, and even strikes, 
 in the co-operative world. Disputes are " common to the 
 race." Common also is the black sheep, and no doubt there 
 have been black sheep among co-operative societies regarded 
 as employers. Meanwhile, the growing alliance with Trade 
 Unionism will strengthen the hands and back the eloquence 
 of every co-operator who pleads for dealing out the measure 
 of justice and generosity to those in his employ which he 
 himself as a workman demands from his employer. 
 
 What is true of co-operation proper holds also of the 
 other forms of "compulsory co-operation." The mainspring 
 of the new municipal activity is the desire to brighten the 
 life of our towns, not outwardly alone, but in the homes of 
 the people. The force behind the movement is the belief 
 in it as a means, not merely of supplying gas and water 
 cheap, but of raising the condition of the worker. Hence 
 the demand that Trade Union rates should be paid, and 
 Trade Union conditions observed in all municipal employ- 
 ment, even when, because of the hardness of our hearts, we 
 still call in the middleman to take our profit from us. While 
 this spirit lasts in the Co-operative World and among the 
 leaders of reform in our municipalities, there is no fear for the 
 future of either movement, or of the workman under them. 
 
 But, it may be urged, this is all very well for the present, 
 and will be all very well as long as the movement is in the 
 hands of the enthusiasts. But what guarantee is there of 
 permanence ? There is nothing in the constitution of the 
 Co-operative Society as such to safeguard the worker. Just 
 * Op. cit., p. 209.
 
 THE AIMS AND METHODS OF CO-OPEEATION. 45 
 
 the same holds of the municipality and the State. The 
 tramway men may be voters, but they form altogether a 
 tiny fraction of a municipal constituency. What, then, is 
 to prevent the majority from combining to oppress them. 
 Here, then, is the second answer : The Trade Union. Here 
 we have the natural organ for expressing the interests of 
 the working community an organisation separate from 
 the society of consumers, and resting on a different basis. 
 I do not mean that all is at once settled when we have a- 
 strong Trade Union. We may in the future have disputes 
 between Union and Union, and, as I have already insisted, 
 we want definite ethical principles to form the ultimate 
 standard of appeal. But I mean that the Union is the 
 needed supplement to the other forms of the collective con- 
 trol of industry. Even when all work as well as eat, our 
 interests as consumers, as purchasers of labour, will not 
 always be identical with our requirements as producers or 
 labourers, and we want the appropriate organisations to 
 represent each interest and provide an amicable and just 
 settlement of differences. In the last chapter we saw that 
 control by consumers was the necessary supplement to 
 Trade Unionism; we now see that, conversely, Trade 
 Unionism, or the control by the producer, fills the gap left 
 by Co-operation, voluntary, municipal, and national. 
 
 We shall now be better able to take a general view of the 
 different forms of the Labour movement and see what 
 unites them. It is not only as to ultimate ends that they 
 make common cause. That a better distribution of wealth 
 and a higher tone in business enterprise are both desirable 
 would be agreed, by many people who are neither Trade 
 Unionists nor Co-operators nor supporters of State Socialism 
 in any form. Many benevolent and philanthropic people 
 see and deplore the evils of the existing state of things 
 without joining any of the three movements in question. 
 What really unites these movements is the general character
 
 46 THE LABOUR MOVEMENT. 
 
 of the means they adopt for the furtherance of their ends. 
 In one form or another all three alike are introducing the 
 principle of the collective control of industry by the com- 
 munity in the interests of all its members. They are seek- 
 ing to replace competition and the forces of individual 
 self-interest as the arbiters of industry, by a deliberate and 
 systematic arrangement of labour and commerce in the best 
 interests of society as a whole. They are all at present in 
 an inchoate or incomplete condition which, to some extent, 
 disguises this common character, but this none the less 
 expresses their essential tendencies and the secret of their 
 life and vigour. 
 
 Within its own sphere, and so far as it is able to carry 
 out its objects, the Trade Union entirely supersedes free 
 competition between individuals actuated by their own 
 interests as the controlling force of industrial life. Where 
 the Union is strong the individual workman is powerless 
 against it. He has to conform to its regulations as to 
 wages, hours, and conditions of work, no matter how much 
 better a bargain he may think that he could drive on his 
 own account. It might pay him on occasion to take work 
 below the standard wage, but the Union will prevent him. 
 He may be able to work beyond the regulation hours with- 
 out injury to himself. He is forbidden by an association 
 of men of average strength. He might be willing and able to 
 take risks which others shun, but it is not allowed him. In 
 every direction he is limited and confined. It matters not 
 in the least that the compulsion is not put upon him by the 
 law or any legally constituted authority. His "liberty" 
 is " interfered with" every bit as much wherever the Union 
 is sufficiently strong for the purpose. He has to learn the 
 lesson that a man must put up with some losses and incon- 
 veniences for the general good of his neighbours. He is 
 confronted with the authority and power of the judgment 
 of the community as to its common welfare. The com- 
 munity is here not the state, but a body of workers, and its
 
 THE AIMS AND METHODS OF CO-OPEBATION. 47 
 
 decisions are enforced, not by officials in uniform, but by 
 duly appointed committees and officers taken from the ranks 
 of the workers themselves. But the principle of common 
 action for common good imposing limits on individual 
 action for personal good is apparent here, just as it is 
 apparent in every law passed by the Houses of Parliament. 
 There is, however, an important difference. Parliament 
 represents, or should represent, the people as a whole. 
 The Trade Union represents a certain section of the 
 people, and hitherto these sections have been relatively 
 small and isolated. This accounts at once for the com- 
 parative weakness of the Union's authority and for the 
 sectional interests by which it is sometimes dominated. 
 The true principle of the collective control of industry 
 means a control exercised, if not by the whole nation, yet 
 in the interests of the whole nation. No other is either 
 desirable or permanently practicable. The Trade Union 
 then sins against its own vital principles when it lays down 
 rules in its own interests to the damage of the public, just 
 as Parliament abrogates its own moral authority when it 
 passes a law in the interests of a class to the detriment of 
 the commonwealth. Now while the Union is confined to 
 an isolated trade or locality, it is particularly liable to this 
 weakness. But in the great national Unions of to-day, 
 very diverse interests of many localities have to be weighed 
 against one another, and the merits of disputes may be 
 adjudged coolly and dispassionately by persons living at a 
 distance, and responsible to many ther branches than the 
 one affected. In this way the sectional character of Trade 
 Unionism grows less and its resolves have the weight, the 
 deliberateness, and the power of a national decision. Still 
 more will this be the case as the Federation of Unions is 
 established. How far this federation is to go, or what form 
 it will ultimately take, no one can yet tell, but at each step 
 it enlarges, and therefore strengthens, the basis of Trade 
 Union action. It removes the narrowness and pettiness,
 
 48 THE LABOUE MOVEMENT. 
 
 and the tendency to foster sinister interests which were 
 almost inseparable from the original form of Union, while 
 it gives free play and full encouragement to the broader 
 public spirit which recognises the true identity of interest 
 for all workers. 
 
 And there is nothing to regret in the course which the 
 development of Unionism has taken. Eegarded as a moral 
 and educational force, it has begun quite rightly with the 
 elements of the subject. It starts with the workshop and 
 teaches the doctrine of fellowship and brotherhood for all 
 who work at the same bench. The lessons of public spirit 
 and public action are thus first learnt by the Trade Unionist 
 in relation to the comrades with whom he is actually asso- 
 ciated in his work and daily life. But the training once 
 perfect, the principle is easily applied to a wider area. He 
 who is faithful in small things will be faithful also in great, 
 and he who loves and will serve his brother whom he hath 
 seen will learn to aid his brother whom he hath not seen. 
 This is working from the base upwards there is no other 
 safe method. Just as the Trade Union represents the 
 limitation of each man's freedom by the whole body of 
 workers, so it depends for its very existence on the loyalty 
 of each member to the common cause. Every advance in 
 Trade Unionism involves a progress in the intelligence and 
 public spirit of the workers. No Union can exist unless 
 the mass of its members are prepared for mutual help and 
 forbearance, unless they have unlearnt the lesson of self- 
 seeking and are ready to make sacrifices for the good of 
 aU. 
 
 Trade Unionism, then, as it grows and broadens, intro- 
 duces little by little a new spirit into industry and becomes 
 the means of regulating it in the interest of the working 
 community. And as in a healthy community all are 
 workers who are capable of work, the interests Trade 
 Unionism considers are those of the community at large. 
 It is of course a mere vulgar error to regard the principle
 
 THE AIMS AND METHODS OF CO-OPEBATION. 49 
 
 of Trade Unionism as limited to manual work. The 
 majority of the learned professions form closer Trade 
 Unions either voluntary or supported and incorporated by 
 law than are yet to be found in the world of Labour. It 
 is true that these Unions of professional men leave much 
 to be desired in their constitution and regulation. It is true 
 that, alike in narrowness and selfishness of aim, and in 
 hide-bound adherence to tradition, Trade Unions like the 
 Bar rank far below the average Society of manual labourers. 
 But there is no reason why this should always be so. On 
 the contrary, there is every ground to hope that the public 
 spirit so rapidly growing among manual workers will spread 
 with increasing rapidity through other occupations and turn 
 professional regulations to the general benefit at once of the 
 profession and the public. 
 
 We have already tried to show that, as Trade Unionism 
 represents the control of industry by the body of producers, 
 so Co-operation represents the control by the body of con- 
 sumers. So far as its influence extends, it supersedes the 
 anarchy of competition, introduces steadiness and con- 
 tinuity of employment, and secures the enjoyment of the 
 surplus product for all who join in promoting it. Like 
 Trade Unionism also it rests on the public spirit of its 
 members, and their readiness to sacrifice personal profit for 
 the common good. It controls industry, so to say, from the 
 other end, and hence its action is complementary to that of 
 the Unions, securing for the community as consumers the 
 benefits which as workers they could hardly obtain. 
 
 Now both the Trade Union and the Co-operative Society 
 are voluntary associations of men consciously formed for 
 securing certain common ends. But if we inquire a little 
 more deeply than usual what the State is, why it has come 
 into being, and what justifies its existence, the answer must 
 be that the State also is an association of all the dwellers 
 in a country, an association that has no doubt grown up 
 unconsciously, but which has grown because it has secured 
 
 5
 
 50 THE LABOUE MOVEMENT. 
 
 certain valuable results for all its members. And in the 
 democratic state we get the true principle of association 
 clearly worked out, namely, that all citizens shall be called 
 On to serve the common weal, and, on the other side, that 
 the State shall serve not the interest of the Few, nor even 
 of the Many, but the interest of All. 
 
 Like the State, the municipality is a kind of association, 
 but exercising a more limited authority over a smaller area. 
 And the difference between the State or the municipality 
 and other associations formed by men, is mainly that to 
 these two every man living in a given locality must belong, 
 whether he likes it or not. He must support them by his 
 contributions and he must submit to their authority. In 
 the case of the Trade Union or Co-operative Society he 
 need not belong to the Association unless he chooses, 
 though, at least, in the case of the Union, he may often be 
 controlled by the common power notwithstanding that he 
 denies its authority. That the Union is a voluntary 
 association makes no difference whatever to the reality of 
 the control which it exercises over individuals, nor does it 
 diminish by one jot the sternness of its " interference " with 
 the " liberty of the subject " when the said liberty is judged 
 hostile to the common good. The apostles of liberty in the 
 abstract of the right divine of all men to do wrong would 
 be perfectly logical in attacking the Trade Union just as 
 much as the "Progressive" municipal policy. And con- 
 versely those who believe that the collective control of 
 industry is necessary to the economic welfare of society need 
 trouble themselves little as to the name of the body by 
 which that control is exercised. 
 
 This much being premised, it is clear that the progress of 
 what is often called Municipal Socialism, but might just as 
 well be called municipal life, is simply the growth of the 
 collective control of industry under a special form. Municipal 
 Socialism aims, as we have seen, at a special kind of Co- 
 operation the Co-operation of all the dwellers in a district
 
 THE AIMS AND METHODS OF CO-OPEBATION. 51 
 
 to supply themselves with their common requirements by 
 means of certain legally constituted machinery, and enforc- 
 ing their decisions by legal powers. In doing this, of course, 
 they interfere with the liberty of the individual. An indi- 
 vidualist philosopher may not want to wash, but must pay 
 his water-rate all the same. The majority who do want 
 to wash, enforce an equal rate of payment on the unwashed 
 minority. Tyrannical, perhaps, but necessary. Grant that 
 washing is generally desirable, and that the means thereto 
 can be most efficiently and economically provided for the 
 dwellers in a town by the collective action of the town 
 involving a contribution from all members of the same, then 
 the anti-washing minority must submit. This is no new 
 principle. It is a principle as old as human society. The 
 weakest tribe of bushmen could not hold together, unless 
 the interests of the tribe as a whole were preferred in some 
 degree to the interests or desires of individuals. What is 
 new, in modern applications of the principle, is nothing but 
 the wider and deeper conception of the welfare of society. 
 
 The municipal control of production, then, is analogous in 
 principle, and result to ordinary Co-operation, and has, as I 
 have tried to show, a peculiar and appropriate sphere of its 
 own, in which Co-operation has shown no tendency to get a 
 footing. And as with the municipality, so with the State. 
 There is no reason why the railways, or any other business 
 of national magnitude should not like the Post Office, the 
 National Defence, and the Coinage, be undertaken by a 
 committee sitting at Whitehall and representing the whole 
 nation. To certain forms of production, this mode of control 
 is most appropriate, while to others it is entirely unsuited. 
 
 But after all, the main function of the State in industry, 
 as in all other things, is to be the supreme regulative 
 authority. Every lesser community may be dominated by 
 sectional interests, and as the power of such sections grows, 
 the supreme authority of the central power is needed to 
 balance and harmonise them. Again, there are certain
 
 52 THE LABOUR MOVEMENT. 
 
 conditions of work most appropriately regulated by the 
 State, while others are best left to the control of the 
 industry concerned. The prime necessities of industrial 
 life ought not to be left to the care of subordinate 
 authorities, or the uncertain effectiveness of voluntary 
 organisations. They are matters of too urgent a necessity. 
 Such, for example, is the limitation of hours.* It is a prime 
 social necessity to secure some degree of leisure for all 
 citizens even tramway men and to prevent the deteriora- 
 tion of the worker, through long hours in unhealthy 
 employment. Thus, by almost universal consent, the State 
 was more than justified in undertaking to limit the hours of 
 work for women and children in the textile trades. This 
 might have been left to Trade Union action and delayed 
 half a century to the physical deterioration of two genera- 
 tions of operatives, to the saving of no principle worth 
 saving, and the preserving of no interest worth preserving. 
 As a matter of fact, it was accomplished speedily and satis- 
 factorily by law. Similarly the provisions of the Factory 
 Acts may be, and should be, extended as far as possible to 
 all other trades, and the State may with equal advantage 
 limit the hours of men in unhealthy employments, and 
 even within wider limits, in all employments, on the same 
 principle, and with the same results as though the regula- 
 tion were enforced by Trade Union action. No less 
 necessary than the limitation of hours is the careful 
 supervision of the condition of work in all unhealthy and 
 dangerous trades. To risk other men's lives unnecessarily 
 for the sake of gain is a form of murder, and murder by 
 free contract has hitherto been safe and profitable, but 
 
 * It may be useful here to distinguish what is necessary from what is 
 desirable. A certain limit (say eleven or twelve hours) might be regarded 
 as an absolute maximum and fixed once for all for every employment alike, 
 while a lower maximum (eight hours, or less) might be fixed for un- 
 healthy occupations. Thus much might fairly be regarded as essential. 
 Beyond this, it is surely desirable to effect a general reduction to eight 
 hours, and here the law might help the various trades to reach this end 
 for themselves by the principle of local and trade option.
 
 THE AIMS AND METHODS OF CO-OPERATION. 53 
 
 Society has to see that murder is not done with its per- 
 mission.* 
 
 Such are some of the conditions of industry which it is 
 the special province of the State to prescribe, and in these 
 directions its industrial activity is most likely to develop 
 in the immediate future. The central government is not 
 destined to be merely the largest of employers. Above and 
 beyond that, lies its great work of regulating all that is 
 most vital to society, and prescribing the unity in things 
 essential, without which a nation cannot live. And this 
 ideal of the State is no modern " Socialist fad," but is as 
 old as Aristotle, holding with him that the State " comes 
 into being that men may live, but exists that they may live 
 well." 
 
 In four different ways, then, we have seen the principle of 
 collective control at work. And in this principle we recognise 
 the natural base of alliance for all who have gone to work 
 in any one of these different ways. Not only are there many 
 mansions in the City of God, but there are many paths that 
 lead thereto, even though each be narrow. And so there 
 are many ways to social welfare the noblest goal that man 
 can set before him but all trend in one direction and at 
 last they meet. And we stand now at the point where the 
 unity of principle that has guided us all along is becoming 
 clear. That principle is simple. It assumes that intelligence 
 is better than blind force, and reaches its end more speedily 
 and surely. It holds that the economic well-being of society 
 is the true end of industry, and that this end will therefore 
 be reached better by an intelligent organisation of industry, 
 than by the haphazard interaction of unintelligent forces. 
 It holds, that self-interest acts intelligently enough for self, 
 
 * As a step to a completer organisation of industry, it should be made 
 the rule that all public " concessions " to private companies should 
 stipulate for " fair " conditions for the worker as a part of the agreement. 
 If we still persist in allowing private persons to make a profit on our gas 
 and water supply, we can at least insist that they should employ their 
 men on Union conditions.
 
 54 THE L ABOVE MOVEMENT. 
 
 but inasmuch as it totally disregards the welfare of others, 
 it is to be regarded, relatively to that welfare, as a blind and 
 often destructive force. It holds that, apart from the control 
 of industry by the community for its own ends, there is no 
 force but that of self-interest to impel and guide production, 
 and that therefore the withdrawal of collective control leaves 
 industry to the interaction of blind forces producing mixed 
 good and evil, with no necessary tendency to progress, no pre- 
 established " economic harmony " between self-interest and 
 the common weal. Accordingly, on the ground that intelli- 
 gence is more effective than brute matter, and that the 
 control of the community is the only possible intelligent 
 agency which can direct the course of economic progress, it 
 advocates the substitution of such control for the present 
 chaos of the economic world.
 
 CHAPTEE IV. 
 THE DISTBIBUTION OF WEALTH. 
 
 LET us now try to sum up the joint economic result of the 
 movements under consideration. We have seen that each is 
 attacking its appropriate part of the problem of industrial 
 organisation. Let us now consider how far, taken together, 
 they give hope of an adequate solution of that problem as a 
 whole. We shall get some light on this point if we examine 
 the present " system " of unregulated industry and compare 
 its main results, point by point, with those which our methods 
 of organisation are tending to put in their place. 
 
 In drawing the broad outlines of a system of private 
 enterprise, such as on the whole prevails in England at the 
 present day, we shall simplify our task if we follow the 
 ordinary method of economists, and assume for the moment 
 that the competitive system described is really a system of 
 free competition. And when we speak of competition as 
 free, we imply, be it remembered, a good deal more than 
 absence of any legal or other collectively imposed restraint. 
 We imply equality of advantage, i.e., that all bargainers in 
 the markets of the country are equal in position and in 
 knowledge of their own interests. That being understood, 
 it will be seen at once that our assumption is a large one, 
 and not fully realised in any existing state of society. 
 Certain results of this will be considered in their place. 
 Meanwhile, it will be convenient to proceed as though the 
 assumption were justified, precisely as in many problems 
 of mechanics it is convenient to assume that bodies are 
 
 55
 
 66 TEE LABOUR MOVEMENT. 
 
 perfectly rigid, or move without friction. In this way 
 we get certain broad truths first, and can introduce the 
 necessary limitations and corrections afterwards. 
 
 The central fact of modern industry is the Division of 
 Labour, and the consequent production of goods not for the 
 use of the producers, but for Exchange. In the regulation 
 of industry everything depends on the way in which the Ex- 
 change value of goods is determined. Think, first, for a 
 moment, how we should determine Exchange value, if we had 
 it in our power to do so, on the principles above determined, 
 that is to say, with a view to justice and social utility. Suppos- 
 ing the commodity to be useful to society,* we should try to 
 reward the producer in proportion to the time, effort, and 
 skill applied in making it. And in considering the reward 
 due for a given quantity of time, effort, and skill, we should 
 be guided by the amount it would be possible to give to all 
 workers, so that the weakest would have enough for a 
 civilised existence. In apportioning our reward, then, we 
 have taken into account the social utility of the product, 
 and the amount and character of the work done upon it, 
 and the result will be that we shall get what we want done, 
 and the producer will make as good a living as may be 
 compatible with the wealth of society. 
 
 t Turning to the actual effect of competition, we find first 
 that the value of things as estimated in money is con- 
 tinually fluctuating, and that when we ask what is the 
 normal value of a thing and how is it fixed, we must make 
 it clear whether we are referring to short or long periods. 
 Consider a " market " for a day, and you find very likely 
 that prices are different in different places or at different 
 
 * From the point of view of abstract justice, this is obviously the first 
 consideration. If my time and skill are spent in devising an infernal 
 machine for use in a public building, my just reward is penal servitude. 
 
 f In what follows I am guided mainly by Prof. Marshall, whose account 
 is the most comprehensive. But it will be at once understood that I am 
 not attempting even to sketch a theory of value as a whole. I wish 
 merely to bring put certain points with regard to exchange which explain 
 some of the obvious evils of our industrial system.
 
 TEE DISTBIBUTION OF WEALTH. 57 
 
 hours. But you can strike an average and call it the 
 normal price for the day some prices being higher and 
 some lower than the normal. Take the same market for 
 a week, and you will find prices differ from day to day. 
 The average price of Monday may be higher or lower than 
 the average for Tuesday. But you can, of course, strike an 
 average for the week as a whole, and speak of the prices 
 for each day as above or below, as " fluctuating round " 
 the normal level for the week. In the same way the week's 
 average fluctuates about the normal level for the year and 
 so on for any period, as Professor Marshall has ably shown. 
 When we speak of the normal price of a commodity we 
 mean the normal or average price for the period we are 
 considering, whether that period be short or long. 
 
 Consider first a short period. There is a certain quantity 
 of goods in a market,* and an effective demand for a certain 
 quantity on the part of the purchasers in the market taken 
 as a whole. No one can calculate either quantity precisely, 
 though an acute dealer can make a good guess. But, what 
 is important, the extent of the demand may vary with the 
 price of the goods. More people will be likely to buy good 
 fish at Is. then at Is. 6d. the pound. I shall buy another 
 pair of boots if I can get them cheap, if not, I shall make 
 this pair do for another month. Now if you can sell off 
 all your fish at Is. 6d. you will do so, and I, who cannot 
 afford to go beyond Is., will go without. But if you cannot 
 find purchasers who will take off all your fish at Is. 6d., it 
 vf ill pay you to lower the price. If all your fish goes off at 
 Is., you get more in the long run than if you sell half at 
 Is. 6d. You have to consider this, and your aim being to 
 get the maximum return, you will all the time be feeling 
 after a price at which you will get off so much that 
 multiplying price into quantity your takings are greater than 
 they would be at any other price. Suppose this price to be 
 
 * We need not here complicate the question by referring to expected 
 goods.
 
 58 THE LABOUR MOVEMENT. 
 
 Is. 3d.,* then Is. 3d. would be an equilibrium point to which 
 the price will be constantly tending, though it may never 
 reach it. 
 
 Now, the important point to notice is that the price thus 
 fixed by the equilibrium of demand and supply bears no 
 relation whatever to the cost of production. One man, 
 favoured by circumstances or by ability, may find his fish 
 only cost him 9d. per Ib. to bring into the market, and, 
 accordingly, he takes a profit of 6d. on the price of Is. 3d. 
 roughly, 66 per cent, on his outlay. Another, by ill-luck 
 or mismanagement, finds it cost him 2s. to bring the self- 
 same fish to the self-same market, and his time, labour, and 
 anxiety are rewarded by a loss of some 37 per cent, on his 
 transaction. Nevertheless, notice, he will not be able to 
 sell one penny higher than his neighbour, or, if he does, 
 he will only lose the more, supposing Is. 3d. to be the 
 equilibrium price. 
 
 Now the question is what is to become of this man, 
 supposing his ill-luck or mismanagement to continue. It 
 is clear that he must eventually go under water, and that 
 the longer he struggles the worse off he will be. Now this 
 introduces us to the determination of long-period values. 
 For the disappearance of the unsuccessful competitors 
 diminishes the quantity of goods in the market, and given 
 the same demand as before with a decreased supply, the 
 equilibrium price will rise.t It is clear, then, that, in the 
 long run taking an average of prices extending over a 
 sufficient time to cause an extension of production when 
 the market is good or a contraction of it when bad, this 
 average will be sufficient to compensate every producer in 
 
 * Suppose, e.g., you can sell 60 Ib. at Is. 3d. your total return is 3 15s. , 
 and suppose you could only get off 40 Ib. at Is. 6d. you could get only 3 at 
 that price, while again 70 Ib. at Is. gives you 3 10s. In such a condition 
 of the market Is. 3d. gives you the best return. 
 
 t For if I have only 40 Ib. to sell, and if as before I can find buyers for 
 40 Ib. at Is. 6d. then Is. 6d. gives me a better return than Is. 3d. (viz. 
 3 instead of 2 10s.) It may even pay to raise the price further, as if 
 I can find thirty-five buyers at 2s.
 
 TEE DISTRIBUTION OF WEALTH. 59 
 
 the market for his expenditure of time, trouble, capital, and 
 the like. The average price over a long period tends, then, 
 to equal the cost of production. But we have seen that 
 the cost of production differs for each producer. A and B 
 are both farmers. A is an able man, farming rich land near 
 a great town. B a bad farmer on poor soil at a considerable 
 distance. But the state of demand is such as to require all 
 B's corn as well as A's. Then if this state of things is to 
 continue permanently the price of corn must be sufficient 
 to remunerate B, i.e., to allow B to pay the average rate to 
 his labourers and to receive the average rate of interest on his 
 capital, and the average return for his own risk, anxiety, 
 management, and the like the average in each case being 
 determined by relation to the rate obtainable in other 
 occupations open to men of the stamp of B. But it is 
 clear that if the price is thus high enough to give an 
 average reward to B, it will give something very much 
 above the average to A unless, indeed, A has already had 
 to pay a landlord or the community for the privilege of 
 farming rich land in a good situation. In this case the 
 surplus that goes primarily to A will ultimately find its way 
 into other pockets. But notice first that price is thus 
 determined (on the average of a long period) by the cost of 
 producing that part of the commodities sold which are 
 brought to market under the greatest disadvantages. These 
 goods being, as it were, on the margin of the market, so 
 that a further fall in price would exclude them from it, they 
 are spoken of as on the margin of production,* and the 
 cost of producing them is the marginal cost of production 
 for that market. This being understood, it holds that when 
 men are very wise in their own interests and competition 
 very free, the average cost of a commodity in a long period 
 is determined by the marginal cost of production. Notice, 
 secondly, that this being so a surplus remains over to every 
 
 * The phrase was, of course, suggested by land supposed to be physi- 
 cally on the margin of cultivation.
 
 60 THE LABOUR MOVEMENT. 
 
 producer except those on the margin the surplus which, 
 in our instance, was left to farmer A by the price which 
 just satisfied farmer B. The existence of this surplus 
 depending on the inequalities in human and non-human 
 nature, it must remain in existence as long as human 
 industry persists. Its existence is not one of, the hypo- 
 thetical laws of political economy, but one of its categorical 
 or unconditional generalisations. But the disposal of the 
 surplus is a very different matter, depending very largely on 
 human institutions. 
 
 We have now before us two main elements in the returns 
 which a farmer or manufacturer gets for his labour. A certain 
 portion of the return reimburses him for the cost of pro- 
 ducing his article. Another portion, which may vary from 
 zero * to any quantity, is a surplus over and above the cost 
 of production. We must consider, then, the elements which 
 make up both these divisions of the return. To do this 
 fully would be to write a book on political economy. But 
 consider for a moment very briefly what goes to build up 
 the cost of producing an article. We may distinguish the 
 elements of ordinary manual labour and of skilled labour. 
 The price of these, it must be remembered, is determined, 
 not immediately by the value of their product but rather by 
 the average amount that the same labour and skill can get 
 elsewhere. Next come earnings of management, and under 
 them we must include not only salaries paid to clerks, foremen, 
 overlookers, or managers, but a sufficient recompense to the 
 employer himself for his trouble and anxiety. A man of 
 capital will not permanently occupy himself in a business 
 which gives him no return for his trouble beyond what he 
 could safely get for his capital if invested in something else. 
 This brings us to the last element in cost viz., interest 
 on the capital employed. Now of all these elements there 
 is a certain average which goes to determine the marginal 
 cost of production, and through it the average price of the 
 * Or as I shall notice presently from a minus quantity.
 
 THE DISTBIBUTION OF WEALTH. 61 
 
 commodity. In the long run, probably the price of these 
 elements determines that of the commodity and not vice versa. 
 Some of them act more slowly than others, and all act 
 clumsily and roughly ; but all probably act in the long run. 
 It is different when we turn to the surplus left to each 
 producer. Here we have to do with rewards determined 
 by price and not determining it. It is sometimes difficult 
 to say what earns these rewards. Sometimes they seem 
 due to pure luck. Others depend on the special abilities or 
 sagacity of a captain of industry. Others on the monopoly 
 of an invention. Others again on situation. We may, 
 however, distinguish the persons who receive the surplus. 
 One in general is the ground landlord on whose land the 
 undertaking is carried on, and as situation is an important 
 factor in success, ground rents, whether in country* or 
 town, take up an important part of the surplus. The other re- 
 cipient is in general the entrepreneur, who undertakes the risk 
 of the enterprise. But of course entrepreneur and landlord 
 may be one individual (as in the case of a peasant proprietor), 
 or there may be many recipients, as in some profit-sharing 
 schemes. And it is important to notice that some factors 
 in the production of the surplus are tangible, their value 
 measurable, and the returns to them nearly constant. Such, 
 for instance, is situation. Other factors, like keen business 
 sagacity, are less easy to measure, and get a variable return. 
 This distinction becomes of practical importance when 
 any attempt is made to control the distribution of the 
 surplus. 
 
 For the average producer, then, the returns of his industry 
 may be theoretically divided into two portions that which 
 reimburses the expenses of production and a surplus over 
 and above, varying in amount. This division, we have seen, 
 is independent of human institutions, though human insti- 
 tutions may determine who shall receive it. In one way 
 
 * In the country of course the value of the land and hence the rent, 
 depends largely on previous investments of capital in the soil.
 
 62 THE LABOUR MOVEMENT. 
 
 human institutions or efforts also affect the amount of the 
 surplus. Not only may they increase or decrease the 
 productivity of labour, but they affect the cost of production. 
 For example, if interest is lowered by the general progress 
 of social security, one element in the cost of production is 
 reduced and it tends to fall, leaving an increased producer's 
 surplus for the entrepreneur, landlord, or other recipient. 
 Conversely, a rise in the price of any of the elements 
 determining cost of production tends to raise that cost and 
 lower the surplus. In this way only, it appears, can 
 alterations in the supply prices of any general agents of 
 production affect the quantity of the producer's surplus. 
 
 Having thus briefly sketched the effect of free competition 
 on the distribution of wealth, let us consider how it affects 
 the welfare of society. We have seen that the two first 
 essentials of a thoroughly economical system of production 
 would be that only good and useful commodities should be 
 produced, and that all the producers of such commodities 
 should be remunerated at a suitable rate the elements for 
 determining which we discussed in Chapter II. Now, at 
 first sight, it would appear that both these conditions are 
 satisfied by the competitive system. To begin with, under 
 such a system, nothing can be repeatedly and continually 
 produced in excess of the demand for it. The actual con- 
 sumers, it would appear, call forth and regulate the supply, 
 and each man being the best judge of his own interests, 
 who can be so fit to determine how many shoes are to be 
 made as those who are going to wear them ? In the second 
 place, the price of an article cannot permanently fall short 
 of the cost of producing it, that is, it must be at least 
 enough to give a " fair " rate of remuneration to all parties 
 engaged in producing it, and that, be it remembered, to the 
 parties who produce it under the greatest possible dis- 
 advantages, our generous system leaving an ample surplus 
 to more favoured or gifted individuals. 
 
 So much for the credit account. What of the per contra?
 
 THE DISTRIBUTION OF WEALTH. 63 
 
 Take first the correlation of Demand and Supply on which 
 all hinges. The salient fact here is that this correlation 
 is effected indirectly and almost unconsciously. There are 
 few things more capricious and incalculable than the modern 
 market. Cotton is "flat" and wool is " brisk," and nobody 
 really knows why. Shrewd men can make a guess ; they 
 can look forward a little way, but at best they are like men 
 groping in the dark, who know the road to be clear as far as 
 the hand can reach, but can never tell what blank wall they 
 may not touch at any step. The truth is, that though 
 demand ultimately governs supply, it has to use very indirect 
 means, and very rough means. To use an old comparison, 
 it is like a force working under a great deal of friction. The 
 individualist producer of old days was a market to himself. 
 He lived, as it were, apart, not only " Cyclops-wise, govern- 
 ing wife and children," but also in true Cyclops fashion, 
 producing just his own needs. He delved and his wife span 
 as they required. They knew what they wanted, and pro- 
 cured it by their toil, and they had the fruits of their toil as 
 its reward. A very uneconomical system of industry from 
 the point of view of production, but presenting some merits 
 from that of distribution. In modern industry we have 
 changed all that. The modern individualist producer sows 
 that another may reap, and that whether he is wage- 
 earner or employer. The essence of the modern system, of 
 which Exchange is the central feature, is that I produce 
 what I think you will buy at an advantage to myself. 
 Whether I am a farmer, merchant, millowner, or shopkeeper, 
 the same holds. You do not set me to work, but I set to 
 work myself in the hope that you will want what I make.* 
 Meanwhile others are setting to work in the same way. 
 
 * The truth of this is not sensibly affected by the fact that a large 
 number of goods are made to order. For a whole apparatus human 
 and inanimate is kept in readiness for orders, and the amount kept is 
 based on calculation of the probable amount of the orders. Hence the 
 loss, if orders do not come, is nearly as great as though the finished pro- 
 duct had been already turned out.
 
 64 THE LABOUR MOVEMENT. 
 
 Now if I have made a good guess at what you want, I make 
 a large profit. If a bad one, I may be ruined. In the first 
 case, too little of the desired commodity is being produced ; 
 in the second, too much. In either case the discrepancy 
 from the required amount tends to right itself, but in the 
 meanwhile one set of men are ruined while others retire with 
 a fortune. This is the nature of the friction under which 
 competition acts in adjusting supply to demand. Men's 
 lives are the brake upon the wheel. 
 
 Let us consider this in close connection with the theory of 
 value. We have seen that for short periods value is de- 
 termined by the equilibrium of demand and supply and has 
 no connection with cost of production. We have seen that 
 the price thus fixed may be too low to remunerate certain of 
 the producers, and that in the long run these will retire from 
 the market. But at what time and at what cost ? If 
 the operation of competition were swift and decisive we 
 should have little to charge against it on this count, but the 
 "long period" in question may extend over years during 
 which time a whole trade is disorganised, employers are 
 contending miserably with forces that are too strong for 
 them and wage-earners are pinched. See how this works 
 out. The price of an article is fixed for a short period, say 
 three months, by the equilibration of demand and supply at 
 a price which does not remunerate a millowner. If he 
 could at once contract his production or close his mill and 
 transfer his capital elsewhere, all would work well. Supply 
 would fall off to the required amount and the remaining 
 members of the trade would receive a good profit. But he 
 is not in a position to do anything of the sort. His capital 
 is locked up. He has acquired certain special business 
 aptitudes and a certain connection. You cannot turn a 
 cotton manufacturer into a farmer, nor a cotton mill into a 
 coal mine. When you are able to do that, competition will 
 begin to work without friction. The result is that the mill- 
 owner will make a desperate effort to struggle on. Not only
 
 THE DISTRIBUTION OF WEALTH. 65 
 
 so, but he may resort to desperate expedients, endeavouring 
 to make up for diminished prices by increasing his output, 
 or to attract customers by underselling. Each step plunges 
 him deeper into the mire. In both ways he still further 
 diminishes the price of the article and he plunges others 
 into the same difficulties. The struggle may, if the gods 
 are merciful, be short and sharp, and in that case ruin and 
 bankruptcy follow at once. Eich men lose everything ; 
 large stocks of machinery and costly buildings become 
 worthless, hundreds of workmen are turned out into the 
 street. Yet nobody really was in fault. The crisis is worse 
 the further it is prolonged, for it means years of depres- 
 sion of trade, irregularity of employment, falling wages, and 
 vanishing profits. Such is the "friction" which attends 
 the working of competition. It does not last for a time 
 and then cease, but is continually going on ; it is the peren- 
 nial sore of the body politic ; the source of haggard 
 anxiety, beggary, and confusion. In point of simple pounds, 
 shillings, and pence, the loss it inflicts on the nation is incal- 
 culable. It all depends on the non-adjustment of supply to 
 demand. From the absence of any machinery for correlating 
 these it follows that prices may for months, or even for 
 years, remain below cost of production to the continual loss 
 of the producer, bearing effects which we all see. 
 
 The first object, then, of a wise regulation of industry 
 would be to adjust supply to demand, and to fix the price 
 of every article at its marginal supply cost. It may be impos- 
 sible to do this directly, but it is easier to smooth over the 
 friction of the adjustment. And this, as we have seen, is 
 being done by Co-operation, voluntary, " municipal," or 
 national, i.e., through the control of production by con- 
 sumers. Meanwhile we have other defects to notice in the 
 competitive system. 
 
 Let us suppose the marginal cost of production deter- 
 mined and maintained without fluctuation by competition 
 so that the losses attendant on fluctuation may be put out of 
 
 6
 
 66 THE LABOUR MOVEMENT. 
 
 mind for the moment. Will everything then go smoothly ? 
 Cost of production, remember, includes the elements of wages 
 for labour, skill, and management ; the compensation for Eisk 
 and the interest on Capital. Now will the cost of produc- 
 tion be fixed at a rate which will provide due remuneration 
 for all of these? And, again, supposing this condition 
 satisfied, will the competition of these several factors for 
 their portion of the price distribute it in the justest way, 
 that is, in the way most useful to the community ? Not to 
 go into the full theory of this aspect of distribution, con- 
 sider the operation of unrestricted self-interest on one 
 factor in the cost of production, the wages of labour, and 
 contrast it with the effect of combination already considered. 
 To understand this we must, as in Chapter II., regard 
 Labour as a commodity -which the labourers possess and 
 are ready to sell to the highest bidder. Now supposing 
 the labourer and the employer in an equally advantageous 
 position for bargaining, wages will be fixed for short periods 
 by the equilibrium of demand and supply. And we saw 
 that in the case of material commodities the equilibrium 
 price bore no relation to cost of production, and might leave 
 the producer in a bad plight. So it is with wages. The market 
 wage for short periods bears very little relation * to the 
 needs and comforts of the labourer who sells his work and 
 may leave him in a very bad plight. In practice the iron 
 rule of demand and supply is relaxed in the case of wages 
 by two causes. The first is the charity of such employers 
 as pay more for labour than the condition of the market 
 compels them. The second is the vast economic advantage 
 which the great majority of employers have over average 
 unorganised labourers, an advantage parallel to those of a 
 horsedealer over a tyro, and enabling the employer as a 
 rule to buy labour very much cheaper than would be pos- 
 sible if the labourer were equally able to forecast the market 
 
 * It is too much to say there is no relation. The wage even for a week 
 must, as a rule, be enough to keep the labourer from starving.
 
 THE DISTRIBUTION OF WEALTH. 67 
 
 and to await a favourable turn. This acts as a permanent 
 force depressing the rate of wages, and we have, in short, 
 one of the most important cases in which " free " competition 
 as above defined in a delusion. And now notice further two 
 peculiarities about labour as a marketable commodity. First 
 the long period in which its price is adjusted to the " cost 
 of producing it " is abnormally long. A low rate of wage 
 in a given trade tends to discourage the supply of labour for 
 that trade, but especially if the low rate be spread over 
 many trades or all the trades of a country, the operation of 
 this tendency occupies something like a generation in work- 
 ing itself out, being achieved in the latter case, partly by dis- 
 couragement of marriage, more by emigration, and most of 
 all by increased mortality, especially among young children. 
 This, of course, is simply a form of economic friction. How- 
 ever, whether quick or slow, by pestilence or famine, the 
 tendency probably does work itself out and supply is re- 
 duced to meet a lowered demand. But meanwhile a second 
 important peculiarity of labour as a marketable commodity 
 has been manifesting itself, viz., the effect already insisted on, 
 of wages on the efficiency of the labourer. 
 
 Confining ourselves to the economic aspect of this we shall 
 find that the productivity of labour is diminished by every 
 drain upon the labourer's strength due to insufficient food, 
 bad housing, or unhealthy occupations. And the productivity 
 of labour is one factor in determining its reward, inasmuch as 
 it determines the total of which labour receives a portion. 
 Hence decreased productivity tends to further decrease of 
 wages, and we have, in fine, one of those cases of cumulative 
 action to which Professor Marshall has carefully drawn atten- 
 tion. Observe : a low rate of wages diminishes the produc- 
 tivity of labour ; diminished productivity tends in turn to lower 
 wages, and so on, in a vicious circle. Conversely, increased 
 wages and increased productivity tend to augment one 
 another, and so on, in a circle of hope. Economic injuries, 
 as General Walker has shown us, tend to perpetuate them-
 
 68 THE LABOUR MOVEMENT. 
 
 selves, and the same may be said of economic gains. The 
 result is that under a competitive system, the wages of 
 labour do not necessarily right themselves at all. Supply 
 will, indeed, slowly tend to adjust itself to demand, but, to 
 say nothing of the bloodshed by the way, if the labourer's 
 remuneration is below the minimum necessary to a certain 
 development in mind and body, the tendency of free competi- 
 tion will be not to raise him to a level with that mini- 
 mum, but to depress him further below it. The equilibrium 
 wage will sink. I conclude, then, that while it is of the last 
 importance that the mass of workers should have a suffi- 
 ciency for health of mind and body, there is no necessary 
 tendency in the action of competition to assign them such a 
 sufficiency, and I appeal to common experience to decide 
 whether it does assign a sufficiency to half the workers in 
 the United Kingdom to-day. 
 
 For these deficiencies of free competition we have already 
 discussed the remedy. The grand cause depressing " free 
 labour " is here seen to be the economic weakness of the 
 labourer himself, and it is precisely this that Trade Unionism 
 corrects. The more clearly it is seen that industrial anarchy 
 tends to depress great masses of the workers and exclude 
 them from their due reward as servants of society the 
 greater is the need for the control of work and wages by 
 Trade Unionism. 
 
 Now supposing the rate of remuneration fixed ; supposing 
 that workers of every class have obtained for themselves a 
 " fair " average remuneration, taking into account, in 
 accordance with our original principles, not only the neces- 
 saries of life, but also the claims of effort, skill, and brain 
 power ; supposing, therefore, that the employing class has 
 also fixed a " fair " average wage for itself there will still 
 be a considerable surplus of wealth to consider not absorbed 
 by the payment of wages. 
 
 The first element in the surplus is profit proper, and con- 
 sists in what Professor Marshall has called the quasi Bent
 
 THE DISTBIBUTION OF WEALTH. 69 
 
 of commercial ability and monopoly, to which we should add 
 good fortune. We have seen that the individualist employer 
 after paying labour, rent, and interest, and after receiving a 
 sufficient wage for his own extremely hard work of manage- 
 ment, may or may not find himself in possession of a surplus, 
 large or small. This surplus depends partly on his skill and 
 efforts, partly on mere luck. It actually varies in amount, 
 as we have seen, from zero to any quantity. It is the 
 " fringe " of the national dividend where expansion and con- 
 traction have their first effects. If we could bring together 
 all the industries of the country into a single hand, this 
 fringe would take the form of a very large surplus ; if, 
 however, we conceive the industrial management of the 
 country to remain in its present condition the "fringe" 
 will present itself as though cut very irregularly along 
 the surface of industry. In one business the surplus 
 will be enormous, in another there will be none at all, in 
 a third will be a positive loss. This we can see is a very 
 uneconomical arrangement, enriching some people beyond 
 what is needful for the highest happiness, and ruining 
 others to their own misery and the derangement of trade. 
 A small difference of ability, a slight turn of luck, and one 
 man makes his fortune while another is ruined. The result 
 is that neither is happy. Neither beggary nor princely 
 wealth conduce best to a happy and well-ordered life. For 
 the wealth made there is no tangible increase of happiness 
 or development to show. Meanwhile the lure of profit- 
 making corrupts all industry and changes honest work into 
 a constant struggle to get more and more, and an unceasing 
 effort to over-reach others. Nor does the evil cease with 
 the producer. When money becomes the test of success, 
 and I am held to have proved myself a better man than you 
 if I have earned more, then the signs of wealth are held the 
 proofs of merit and ability, and display becomes the first 
 object for men of means. There is not one class in England 
 at this day that is not infested by this taint. It corrupts
 
 70 THE LABOUR MOVEMENT. 
 
 the life, inars the comfort, poisons the social gatherings, 
 destroys the simplicity of men and women from the cottage 
 to the castle. It fills the world with ugliness and discomfort. 
 And if in part it is due to a permanent human weakness, it 
 is fostered and cherished into a hideous growth by the 
 modern development of the profit-seeking spirit. We have 
 to quarrel, then, both with the distribution of the producer's 
 surplus as affected by competition, and with the results to 
 character which such a mode of distribution brings about. 
 Now what are the compensatory benefits of the system of 
 private profit. Eegarding profit as the wages of the employer 
 the wages allowed him by society under the economic 
 system which it supports we have to ask, Is it the most 
 economical method of payment ? So far as the employer's 
 profit depends on luck i.e., on causes beyond his control 
 there is clearly no economic advantage to society whatsoever 
 in awarding it to him ; so far as the prospect of additional 
 gain stimulates him to socially useful exertion society does 
 obtain a certain quid pro quo. But, in the first place, the 
 individual employer, aiming at his own profit, does not neces- 
 sarily use means thereto which contribute to the general 
 welfare. If, for example, he is able by skilful advertisement 
 to palm off inferior goods on the public, his profit is due to 
 his sagacity or cunning, but not to any real social service. 
 To lie well requires consummate art to which in some 
 departments of modern industry a life-time may be profit- 
 ably devoted, but it does not conduce to the general comfort. 
 Thus, if honest employers make an honourable profit by 
 useful work directed with great ability, and are paid less 
 than the value of their services, we must set against them 
 the dishonest traders who profit at the expense of their own 
 uprightness and the general well-being, and who are en- 
 couraged thereto by many of the circumstances of modern 
 commerce. 
 
 But further, it may be doubted if the individualist system 
 either checks the bad or encourages the good in the best
 
 THE DISTRIBUTION OF WEALTH. 71 
 
 way. The stakes are too high. Men stand to win or lose 
 their all. They oscillate between riches and beggary. As 
 a class our modern captains of industry are not to be envied. 
 They bear the first brunt of commercial storms. They are 
 subject to repeated periods of strain and over-pressure. 
 The ups and downs of fortune tell on their mental and 
 physical health. It has even been doubted whether the 
 individualist system of industry does not most afflict those 
 who are generally supposed to gain by it most. 
 
 We see, then, that the system which leaves the producers' 
 surplus as a prize to be fought for may stimulate good work, 
 but it also cherishes sinister arts. It distributes its rewards 
 in a way that causes over- strain and worry, even to the 
 favoured ones. It produces a competitive spirit concen- 
 trated on personal gain instead of public good. And in the 
 train of all this come the evils we discussed before, the 
 repeated disorganisation of industry, and the consequent loss 
 of capital and deterioration of labour. What is needed, then, 
 is to communise the surplus products of industry. The 
 losses of industrial enterprise will then be balanced against 
 its gains. Loss will still be loss, but it will not spell ruin. 
 The community has broader shoulders than the individual. 
 And since in the long run the products of industry do exceed 
 the cost of producing them by a very large amount, this 
 net gain will fall to society at large. Distributed by com- 
 petition, it is a source of net unhappiness. Cornmunised, it 
 is an advantage to every one. Let me not be understood to 
 advocate the under-paying of the employer or business- 
 manager. His work to be well done requires great industry 
 and high ability, and we shall not gain as a community by 
 niggardliness in rewarding it. I assume only that we can 
 get good work done for fixed salaries suitably determined by 
 the quantity and quality of the work required. It is an 
 assumption which is indeed denied by laissez faire econo- 
 mists, but warranted by all knowledge of human nature 
 working under good institutions. There is no reason why
 
 72 THE LABOUR MOVEMENT. 
 
 Mill's ideal should not yet be realised and men learn to dig 
 and weave for their country as well as to fight for it. And 
 if men can dig and weave for a fixed wage and exert them- 
 selves to earn it well, men can also follow earnestly and 
 strenuously the higher calling of guiding those who dig and 
 weave. This is not a dream, nor even a supposition. It is 
 matter of fact realised in many departments of industry to- 
 day. In medicine, in the churches, in education, wherever 
 men feel an interest in the work as well as in its wage, work 
 is given gladly and willingly to the utmost of a man's power 
 for a fixed reward. And the same holds in industry pure 
 and simple. Take the co-operative world where as Mrs. 
 Webb has well pointed out we have men dealing with 
 millions of money, carrying on complicated operations on 
 a vast scale for the salary of a clerk. There are in truth 
 other motives to action than those of direct and pro- 
 portionate pecuniary reward. There is the prospect of 
 advancement, of social esteem, of the pure love of work, and 
 of the desire to serve society. There are motives mercenary, 
 and motives of devotion. These last are indeed diminished 
 by a social system which makes material success the main 
 object of respect, and tends to regard devotion to the public 
 service as either humbug or simplicity. But they can never 
 be extinct, and we have but to curtail the field of the other 
 impulses which compete with them in human nature, and 
 they will of themselves expand to all their original vigour. 
 
 Thus free competition distributes the profits of industry 
 so as to do the minimum of good at the maximum of cost. 
 To be made socially useful " profits " must be communised, 
 and as above shown profits are being communised by every 
 extension of co-operation and of national or municipal enter- 
 prise. 
 
 But besides " Profit " in the narrower sense, there is a 
 second element in the surplus product not yet considered. 
 While profits are fickle and variable a great portion of the 
 excess of value produced over the cost of producing it goes
 
 THE DISTRIBUTION OF WEALTH. 73 
 
 to private pockets in fixed charges. And it will continue to 
 do so however much you communise profit. A Co-operative 
 Society must pay interest on its capital and rent on its 
 premises. A municipality must purchase or rent land for 
 its public works. Now Eent is the price paid for differential 
 advantages in production to those who own such advantages. 
 And " economic Eent " there always is and always must be. 
 For, as we have shown, some goods are bound to be pro- 
 duced under more favourable circumstances than others 
 which are brought to the same market. This advantage 
 may be due to various things, such as fertility or situation, 
 and the owners of such advantages can exact a price for the 
 use of them. No legislation can abolish economic rent. 
 But the law can and does determine who shall receive it. 
 And the question is, Does the law do wisely in allowing 
 private individuals to absorb this enormous portion of the 
 national produce? In answering this we need make no 
 attack on the owners of Eents. They may be most estim- 
 able men, and many of them may, of their free choice, be 
 doing good service to society. But the point is that they 
 form a permanent charge upon the " National Dividend," 
 for which no adequate return is made and for which no 
 return need be made at all. 
 
 In many cases the value for which rent is paid is due to 
 natural causes and not to human effort. Of this Mining 
 Eoyalties are a conspicuous example. In other cases it is 
 due to the growth of society, as instanced by the price of 
 land in the City of London. Whenever we pay for value so 
 created we get no compensatory service rendered, and we 
 thus violate the first principle of a sound economic system. 
 Another portion of the value for which rent is paid may 
 indeed be due to human effort, as in the case of wise im- 
 provements carried out on his estate by a good landlord. 
 But here again the law of inheritance makes it possible to 
 hand on the fruits of such work to heirs who have done 
 nothing. And the community is thus saddled with the sup-
 
 74 THE LABOUR MOVEMENT. 
 
 port of men who need do nothing in return for it. The same 
 holds of interest. If capital is first created by human skill 
 and forethought, the heirs of capital may be wise or foolish, 
 able or incompetent, but as long as their capital stands in 
 their names they will get the same rate of interest proper. 
 In the case, then, of the majority of the rent and interest 
 paid by society no compensatory social services need be 
 rendered in return. And it is important to remember that 
 the same truth holds whether we pay 100,000 a year to a 
 Duke or cut up his estate and pay 100 a year to a thousand 
 petty yeomen. The yeoman is able to hand on his property 
 in the same way, and thus, even if he first gave it its value, 
 we shall have to pay his heirs to the ding of doom for the 
 condescension of allowing themselves to be born. Nothing 
 is gained by substituting a number of petty owners who 
 are not always found to make better use of their position 
 for the one big owner. 
 
 An objection may be raised here that Eent and Interest 
 do not stand on the same footing. Interest, it may be said, 
 is earned by the previous accumulation of capital. Thus it 
 is paid not for services immediately rendered, but for services 
 that have been rendered. Eent, on the other hand, is paid 
 for the use of gifts of nature or for value due purely to the 
 growth of society, and the rent-owner may never have per- 
 formed any service whatever. He may be a mere burden 
 on the land. Again, 'it may be urged that as economic factors 
 they are very different. Interest enters into cost of pro- 
 duction, and goes to determine price, while Eent is deter- 
 mined by price. This last point is true,* and may serve to 
 point the necessity for a difference in the practical method 
 of treatment. Interest is only part of the " surplus " of 
 wealth, if in the surplus we include everything that remains 
 when the actual workers (managers included) are paid. But 
 the question now before us is whether there is any ethical 
 
 * At least of such portions of " actual rent " as correspond to 
 "economic rent."
 
 TEE DISTRIBUTION OF WEALTH. 75 
 
 difference between Eent and Interest. Free competition 
 places both in private hands, often accumulating enormous 
 quantities of both in the hands of one man. Is this desir- 
 able ? And is it any more desirable in one case than in the 
 other ? 
 
 So far as Eent is really " Unearned " the case against it 
 may be considered stronger. If any practical method can 
 be found of fixing the point from which we are to begin 
 calculating the Unearned Increment, well and good. There 
 would be a strong case for attacking this part of the surplus 
 first. It would be the clearest of all the many cases in 
 which society obligingly hands over a handsome present to 
 a few fortunate individuals. Similarly it is eminently desir- 
 able that we should take immediate steps to secure all such 
 future increment to ourselves as a community. 
 
 But the problem does not end with the confiscation of the 
 Unearned Increment. A great quantity of Eent is practi- 
 cally indistinguishable from Interest on Capital, and Interest 
 itself takes an enormous share of the national income. 
 Now morally and economically it can make little difference 
 whether these large sums are paid for past services or not. 
 By far the greater amount is not now paid to those who 
 did the services. The principle of the inheritance of private 
 property creates a lien on the industry of all future time 
 for the descendants of every man who accumulates wealth. 
 This is too great a price to pay for thrift. It is too 
 heavy a burden for society to bear. The whole economic 
 system groans under the load. 
 
 We have seen that the movement hitherto considered 
 would not really touch this part of the national wealth. 
 The difficulty is not met either by raising wages to a 
 "Trades Union level" or by the utmost extension of co- 
 operative and municipal enterprise. However far we go in 
 this direction we should still be paying toll to the amount 
 of nearly half our annual income for the privilege of living 
 in England and using the stock of wealth accumulated by
 
 76 THE LABOUE MOVEMENT. 
 
 our fathers. But we may indicate the principles on which 
 the problem of Eent and Interest as a whole may be, and 
 probably soon will be, dealt with by the State, in further- 
 ance of the collective control of industry and its products 
 by the community, which, as we have tried to show, is the 
 underlying idea of all forms of the Labour movement. We 
 confine ourselves merely to the statement of principles, 
 which are in themselves comparatively simple, though their 
 application is endlessly complex, and will no doubt form 
 one of the chief practical difficulties of the coming years. 
 
 An economically worked system of industry would, I 
 think, establish the principle that payment should be made 
 for services rendered and to those by whom they are 
 rendered. The surplus left over it would communise. We 
 should not advocate this on the ground of any objection to 
 wealth as such. It would matter little how wealthy the 
 few might be so long as the many were not poor, and so 
 long as provision was made for all socially useful objects. 
 There is no spite in the Labour movement of to-day, but 
 there is a strong sense of the poverty and misery around us, 
 and a clear conviction that a better use might be made of 
 our enormous wealth. We have no wish to send the rich 
 empty away, but cost what it may, we are determined to 
 fill the hungry with some of the good things of life. 
 
 Thus we do not object to wealth as wealth. Nor do we 
 object to the present system on the ground of equity, though 
 if there be such a thing as equity surely its simplest canons 
 are violated by the extremes of fortune and the accidents of 
 inheritance. Nor is it merely that the existence of idle 
 luxury conflicts with the democratic ideal of society as 
 an association in which rights and duties fall to all alike, 
 though it does flagrantly conflict with such an ideal. It is 
 simply that society cannot bear the burden. We cannot 
 afford to pay 500,000,000 a year to a number of individuals 
 for wealth that is due partly to nature and partly to efforts 
 of their fathers. We must go as nearly as is practicable on
 
 THE DISTRIBUTION OF WEALTH. 77 
 
 the principle of paying only for services rendered and only 
 to him who renders them, or we cannot adequately fulfil the 
 purposes for which, as a society, we exist. These purposes 
 I have already indicated, and all I have to say about them 
 here is that they have a higher sanctity than any vested 
 interests or private rights. 
 
 Our principle, then, is simply that of practical social 
 exigency. The good economy necessary to social welfare 
 is inconsistent with this system of tribute. But how are 
 we to get rid of it? How can we deal with the actual 
 proprietors of Eent and Interest who have grown, as it 
 were, to their present place in the economic system, and 
 could hardly now fit themselves into another? Every 
 possible method of dealing with the problem presents great 
 difficulties, but two things may be laid down as matters of 
 principle. We shall avoid dealing hardly with existing 
 owners, but when there is a conflict of claims we shall set 
 justice to the community above the established interests of 
 a class. 
 
 No sweeping interference with private property is either 
 possible or desirable. We do not in England proceed by 
 the crude methods of revolution and confiscation. We 
 could not, without gross hardships to individuals and 
 danger to the public, confiscate at a blow the Land and 
 Capital of the country, and we should not know what to do 
 with it if we could. In time the community will become 
 the chief, perhaps the sole owner, of Capital and Land. 
 But it will be by gradual steps. The progress of public 
 enterprise admits of indefinite extension, and at each step 
 some fragment of Land or Capital passes to the community. 
 And on each occasion fair compensation will be given. But 
 it may be asked, " How does this rid us of the burden? " 
 If compensation is to be given, surely Capital and Kent 
 remain in essence, drawing an undiminished tribute from 
 the worker. 
 
 The answer is, first, that the compensation in question is
 
 78 THE LABOUR MOVEMENT. 
 
 raised by taxation, and we can adjust taxation as we please. 
 If we take the view of Eent, Interest, and Profits advanced in 
 this chapter, we shall regard them as the natural reservoir 
 from which wealth is to be drawn for all public purposes. 
 That is, we should adjust taxation to fall exclusively on the 
 surplus of industry, and not at all on "wages" in their 
 broadest sense. Leaving the smaller incomes as free as pos- 
 sible, we should graduate the income tax so as to fall most 
 heavily on those who are getting the largest share of Kent, 
 Interest, and Profit.* We should find another point for the ap- 
 plication of our principle in the death duties, and (if we do not 
 deal more drastically with the Unearned Increment) in the 
 taxation of Ground Eents. In this way we should make 
 Eent and Interest pay for their own extinction. We should 
 inflict no overwhelming loss on any individuals or any class 
 of living persons, as would happen if we pitched on one 
 particular form of property say Land or Eailways and 
 took them without compensation. There would be no 
 spoliation, but readjustment of taxation on a new principle. 
 And the ground landlord has no more right to complain 
 when the tax collector comes his way than I have to cry out 
 when the Chancellor of the Exchequer puts an extra penny 
 on my income tax. 
 
 It might further be suggested that compensation should 
 take the form of terminable annuities. With every respect 
 for the rights of the living, I do not know that we need 
 weep for the losses of generations yet unborn. If instead of 
 giving a lump sum or 2 per cent, on that sum for ever we 
 allowed such higher percentage as might be considered fair to 
 the owner for his life (or even for the life of his next heir), 
 the temporary burden would be slightly increased, but the 
 
 * This would in part apply even to the smaller owners of Interest. The 
 reasonable thrift which provides for old age and sickness, and we might 
 add for wife and child, performs at present a social function of the first 
 importance. Until the State is prepared to undertake this duty in its 
 entirety, it must be careful not to discourage such individuals as are now 
 performing it for themselves and those dependent on them.
 
 THE DISTRIBUTION OF WEALTH. 79 
 
 future would be entirely free. I conclude that it is possible 
 gradually to communise Land and Capital without recourse to 
 revolutionary methods, by the extension of public enterprise 
 and the readjustment of taxation. I do not profess to do 
 more than indicate the broad principles upon which such 
 " communising" is advocated, and on which it might con- 
 ceivably be carried out with the least amount of friction and 
 hardship. The real difficulty is, of course, in the practical 
 applications, with which we are not dealing at present. It 
 is our business merely to discuss the results to which we are 
 led by applying the principles of the collective control of 
 industry for the common good to the case of private pro- 
 perty in Eent and Interest, and one result is simply that the 
 principle of collective ownership will have to be very greatly 
 extended in this direction if the movement to economic 
 reform is to achieve all that it promises. 
 
 We have now considered all the main elements in the 
 disposition of the national dividend, and we have tried to 
 show that the various forms of the "Labour Movement" 
 previously discussed would deal far better with them, in the 
 interests of society, than the forces of Private Enterprise 
 and Free Competition. The Eemuneration of the Workers 
 (of every kind) being fixed by the Trade Unions in agree- 
 ment with the public at large, the surplus remaining would 
 pass to the community for common purposes ; the profits of 
 enterprise going to communities of consumers, whether in 
 the form of Co-operative Societies, Municipal Bodies, or the 
 State; while Kent and Interest would go directly to the 
 Municipality or the Nation. Thus each branch of the 
 Labour Movement has its appropriate part of the general 
 problem to work out, and united they give hope of a complete 
 solution.
 
 CHAPTEE V. 
 
 THE CONTEOL OF INDUSTBY AND THE LIBEBTY 
 OF THE INDIVIDUAL. 
 
 LET us now review our position. Let us suppose the 
 principles we have advocated to be recognised and carried 
 out to their logical conclusion, and let us try to picture the 
 resulting state of industry. The work of the nation would 
 then be carried on under the direction of communities of 
 consumers. There would be the great national works 
 developed from those which exist at present. There would 
 be probably a still greater development of municipal works, 
 and there would be, supplementing these, voluntarily formed 
 co-operative associations on the existing model, united by the 
 Federal principle and, ultimately, co-extensive with the com- 
 munity. We shall advance in all three directions with 
 varying rapidity, but steadily and simultaneously. In each 
 case suitable remuneration and healthy conditions of work 
 will be ensured for all classes of producers by good legisla- 
 tion, backed up and supplemented by strong Trade Union 
 action. The surplus product when this charge is met will 
 be in the hands of the community for common purposes, 
 that there may be the means of life for the infirm, and of 
 culture and enjoyment for all, and the ceaseless wearying 
 roar of the great engine of competition would be still. 
 
 Will such an ideal ever become actual ? As to its com- 
 plete realisation I answer, " No one can tell, and it is not 
 
 80
 
 THE CONTROL OF INDUSTRY. 81 
 
 our business to find out." What concerns us to-day is, not 
 the possibility of a complete ideal, but the practical value 
 and immediate promise of certain existing tendencies. 
 Here are certain great economic evils which all deplore, and 
 here are certain movements aiming at reform. Are these 
 movements actually doing good? Do they promise, if 
 developed along the same lines, to go to the root of the 
 matter ? These are the questions which we have tried to 
 answer, and which we have seen reason to answer in the 
 affirmative. If this answer be justified, then, whatever 
 changes the future may necessitate, these movements form 
 for the present the means of progress. 
 
 Thus we may readily admit difficulties in applying the co- 
 operative form of industry to every department of production. 
 In the case of foreign trade, for example, co-operation of 
 consumers to arrange for production * would seem almost 
 out of the question, unless in some far-off Federation of the 
 world which is yet but a dream. Again, in the case of some 
 professions and other occupations, the principle seems some- 
 what out of place, and is not likely to be realised unless in 
 some modified form. In short, wherever the industrial revo- 
 lution has not set its mark, and where industry passes beyond 
 the limits of the nation, collective control by consumers 
 becomes a difficult matter. The case of Agriculture is one 
 of special interest in this relation, and it is worth while to 
 discuss a little more fully the way in which our principles 
 seem capable of application in its case. Co-operative farm- 
 ing has made some progress, though not much. Last year 
 thirty-eight co-operative societies farmed 3,315 acres in 
 Great Britain, t And perhaps the co-operative mills of to-day 
 will take their corn from co-operative farms to-morrow. 
 
 * Transport, however, is already undertaken by the Wholesale Societies 
 iu ships of their own. 
 
 t See the Report of the Twenty-fourth Co-operative Congress, 1892, 
 pp. 23 and 32. The figures given exclude " Individualist " (profit-sharing) 
 Societies, i.e., refer to farms worked ultimately by " distributive stores." 
 Stores occupying less than ten acres are also excluded. 
 
 7
 
 82 THE LABOUB MOVEMENT. 
 
 But it is too early to form any idea of the progress possible 
 or likely in this direction. 
 
 Meanwhile there is, at first sight, a strong drift of things 
 in the other direction. We seem to be rapidly sprinkling 
 England with individualist producers of the old mediaeval 
 type. Allotments and Small Holdings seem to many people 
 opposed not only to every principle of " Collectivism," but 
 to the whole tendency of the Industrial Eevolution. But 
 this is not altogether the case. The small occupier himself 
 is an individualist producer no doubt. And a system of 
 yeomanry or peasant proprietorship would doubtless bring 
 back many of the evils, ethical and economical, of primitive 
 individualism. But with communal ownership a very dif- 
 ferent system is introduced, and com-munal ownership is 
 already adopted as the principle of a great political p^rty 
 even though that party has not yet taken the final step of repu- 
 diating every opposing principle. In the case of agriculture 
 rent takes the greater share of the surplus product. As 
 owners and rent- receivers, then, the community will exercise 
 some of the most important rights and duties of collective 
 control. Of course this supposes that we are not to be 
 satisfied with a simple quit rent to be fixed once and for 
 ever. Such a plan would be only one degree better than a 
 system of complete purchase. We have surely learnt 
 enough by sad experience of the folly of fixing payments for 
 variable values. Agricultural values are constantly shifting 
 in relation to money, and if we fixed rents to-day, thirty 
 years hence our tenants might be in possession of great un- 
 earned increments, or what is just as likely on their knees 
 to us to relieve them of an overgrown burden. The small- 
 holder must have fixity of tenure, but subject to revision of 
 rents at stated periods of considerable length, with allow- 
 ance for all improvements made by the occupier. In this 
 way the community will absorb its due share of the produce 
 the surplus over the remuneration of the worker. 
 
 In the case of agriculture, then, our principle can be
 
 THE CONTROL OF INDUSTRY. 83 
 
 carried out in some of its most important features. As to 
 the other cases mentioned it might not be impossible to sug- 
 gest means for its application ; but, as we have tried to make 
 clear, our purpose is to discuss existing tendencies and their 
 value when completely carried out. If we go beyond them 
 we are in danger of imagining a vain thing. Nor need we 
 be at pains to work out in our heads a perfectly finished 
 political order, rounded off in every direction. Of such 
 Utopias the only thing that can be predicted with certainty 
 is that they will always be Utopias. It is sufficient to show 
 the tendencies of a system, tendencies even now clearly 
 visible, and which will work out wider and greater results at 
 every stage of their realisation, though that realisation may 
 never be completed. And let us, above all, remember that 
 the accomplishment of any considerable part of our hopes 
 will open wider vistas of progress, will create new problems 
 of its own, and demand undreamt-of methods of solution. 
 No human system ever yet existed in completeness. One 
 after another has grown and decayed, and none has stood 
 still in self-satisfied fulness of development. Like "the 
 waves in the moonlit solitudes mild of the mid-most ocean," 
 they swell and pass before we have measured the height of 
 their crest. Only human society under wise human direc- 
 tion does not rise to fall again with the ceaseless iteration of 
 the ocean waves. The tide of movement sweeps us higher 
 at each great pulsation ; it pauses, but it does not sink, and 
 it changes its course only to find easier inlets to the shore. 
 
 We must then content ourselves with a limited view of 
 the future, and must not strain our eyes to see the invisible. 
 It is enough for us to trace the tendencies of our principles 
 to the farthest point discernible, to see how they harmonise 
 and supplement each other, and how the application of them 
 would meet the economic evils of the day. If we never get 
 perfection it is well to get as near it as possible. 
 
 We ought however to meet in advance one or two theo- 
 retical objections which are almost certain to arise. It will
 
 84 THE LABOUR MOVEMENT. 
 
 be said, first, that economic laws render our ideals impos- 
 sible. This objection may mean two or three things. It 
 may mean generally that sound economics are opposed to 
 such views. If that is so we must of course have the par- 
 ticular discrepancies pointed out before we can reply to them. 
 It may mean again that economic laws are as inevitable as 
 those of arithmetic or astronomy, that it is equally hopeless 
 to contend against them ; that these laws have produced the 
 present state of society, and that the said state of society 
 cannot therefore be modified by human effort. Against this 
 hypothetical but not unlikely objection, the reply simply is 
 that it rests on a misconception of the idea of law. A law 
 in economics, as in any other science, simply states what 
 has resulted, and is expected to result, from certain condi- 
 tions what will be the effect of a given cause. Political 
 economy traces the existing state of industry, distribution 
 of wealth, &c., to certain causes, and says that given those 
 causes the effects follow inevitably. Very likely, but sup- 
 pose we can control the causes ? Given free competition, 
 enormous inequalities of wealth are inevitable. Doubtless, 
 but suppose we can supersede competition by an intelligent 
 control of industry ? We cannot argue from what happens 
 now to what would happen under changed conditions. The 
 fields of economic and much other scientific thought are 
 strewn with the bones of those who have tried to reach 
 truth by this method, and have perished intellectually in 
 the attempt. 
 
 In a somewhat similar spirit it is sometimes said that 
 political economy favours free competition. This idea still 
 seems to work confusedly in the inner fogs of many minds, 
 but it is about as intelligible as to say that physiology 
 favours disease, or astronomy the motion of the earth round 
 the sun. Political economy has emerged as a science at a 
 period when free industrial enterprise has been more widely 
 extended than heretofore, and accordingly it has been mainly 
 concerned to examine the phenomena that arise under a
 
 THE CONTROL OF INDUSTRY. 85 
 
 competitive regime. But political economy is concerned 
 purely with the ascertainment of facts. It tells us, or tries 
 to tell us, what happens under given economic conditions. 
 It does not tell us what ought to happen, what would be 
 most desirable in the general interests. It does not, as a 
 pure science, favour any one form of industrial organisation 
 rather than another. And if any political economist does 
 show such favour we can only say, that qua political 
 economist he has no business to do any such thing. The 
 whole notion implies an entire misunderstanding of the 
 nature of science as an attempt to interpret existing facts 
 as it finds them. The ordinary " scientific " objections to 
 collectivist reforms are, in fact, the objections of pseudo- 
 science. 
 
 There is however one specific form of the economic objec- 
 tion which we can hardly expect to escape. The population- 
 theory has been erected into a bulwark against almost all 
 theories of progress since the days of Malthus, and it is hardly 
 to be supposed that the Labour movement of to-day will be 
 allowed to pass unchallenged. I shall be told that this reck- 
 less ministering to human life and comfort, this monstrous 
 preservation of the incompetent, will have as its inevitable 
 result the increase of population which must infallibly lead 
 to increased poverty. Observe the reasoning here. There 
 are more mouths to fill; therefore there is less for each. 
 Quite so, if the whole stock of food remains the same, but 
 how if the supply of food increases as fast as the population, 
 or faster ? Is not this possible since each new consumer is 
 (or is to be) also a new producer. No, I shall be told ; the 
 Law of Diminishing Eeturns prevents this. Put ten men 
 to labour on a farm and you get a certain return. Add ten 
 more next year and you get a larger return, but not twice as 
 large. You have doubled your labour, but you will find the 
 produce less than double. And this gets worse the further 
 we go on. Ten men, say, could produce enough from the 
 farm to live in comfort. Twenty men produce enough to keep
 
 86 THE LABOUE MOVEMENT. 
 
 fifteen in comfort. Then five will be underfed. Thirty men's 
 labour will keep eighteen in comfort and twelve will be in 
 rags, and so it goes on getting worse and worse. Now, all 
 England and all England's industry may be looked at thus. 
 Ten million (say) could live comfortably in England. At 
 twenty millions, five will be submerged. At thirty twelve 
 will be in want, and so on. 
 
 I do not suppose that this argument would now be used 
 by any competent economist. But it may be well to explain 
 briefly the nature of the mistake. The simple truth is 
 that the Law of Diminishing Eeturns is a misnomer. At 
 one stage returns increase proportionately to the amount of 
 labour applied ; i.e., a given addition of labour brings a more 
 than proportionate increase of product. At another stage 
 returns decrease proportionately to the amount of labour ; 
 i.e., a given addition of labour brings a less than proportion- 
 ate increase. Thus a farmer working single handed in a 
 Western state reaps a certain harvest. If he is able to hire 
 one labourer his return is more than doubled. A second 
 labourer adds yet more than the first, and so on up to a 
 certain maximum, after which the addition of a fresh 
 labourer makes a smaller addition of produce than is 
 obtained from the average of preceding labourers. At this 
 point Increasing Keturns give way to Diminishing Keturns. 
 And so it is in all industry. There is a period of Increasing 
 and a period of Diminishing Eeturns and even an inter- 
 weaving of the two, so that we pass from one to the other 
 and back again. And thus considered the conception must 
 be applied to manufacture, mining, transport, and other 
 industries, as well as to agricultural land. Let it be granted 
 I doubt whether any human being knows it to be true 
 that English agriculture is now permanently in the period 
 of Diminishing Eeturns, it must be remembered that Eng- 
 land's population does not depend for its food on England's 
 soil. And it has yet to be shown that an increase in the 
 population does not produce such an increasing return in
 
 THE CONTROL OF INDUSTRY. 87 
 
 manufactures and transport as more than counterbalances 
 the diminishing return from agriculture. That this has 
 been so up till the present time seems to be agreed. Thus 
 Professor Marshall says : 
 
 " Political arithmetic may be said to have begun in Eng- 
 land in the seventeenth century ; and from that time 
 onwards we find a constant and nearly steady increase in 
 the amount of accumulated wealth per head of the popula- 
 tion " (" Principles of Economics," vol. i. p. 729, 2nd edition, 
 1891). 
 
 Eemembering the enormous increase in the population 
 which has taken place during the same time, we see here the 
 action of Increasing Eeturns on a large scale. In fact, the 
 pressure of population on subsistence may some day become 
 a difficulty. But that it in any way contributes to our diffi- 
 culties at present, or is likely to do so within any period for 
 which we are called upon to make provision, there is no 
 evidence to show. What evidence we have points the other 
 way. And for those who look forward with anxiety to the 
 time when even standing room will be difficult to find on this 
 earth, let us in Platonic fashion crown them with garlands 
 as the wisest and most far-seeing of men, and at the same 
 time suggest to them that they would find a more congenial 
 society among the philosophers of Laputa than among the 
 legislators of our city. 
 
 A somewhat similar objection may be put in a simpler 
 form. It may be said " You propose that every occupation 
 should be made as safe and healthy as possible, that it 
 should never be carried to the point of exhaustion, but 
 should leave reasonable leisure for every worker, and yet 
 that every man should have enough to maintain himself and 
 his family in a way befitting a civilised being, and that the 
 old and infirm should be made comfortable. But where is 
 the money to come from ? Quite apart from the growth of 
 pouplation, where, at the present day, is the wealth that will 
 meet this enormous charge ? "
 
 88 THE LABOUR MOVEMENT. 
 
 No doubt our wages bill will be much increased if we are 
 to support all the workers of the nation in comfort at the 
 price of moderate toil. But it is not at present found im- 
 possible to support a considerable number of people in a 
 great deal more than comfort at the price of no toil what- 
 ever. Next, I would admit our task to be difficult, but I 
 would infer that it requires our whole energy, and that we 
 must accordingly get rid of every obstacle to its achieve- 
 ment. If certain persons hold a lien on the produce of the 
 nation and exact a toll for which they make no adequate 
 return, our difficulties are certainly increased ; but my 
 inference would be not that we should abandon our task, 
 but that we should reconsider the position of these persons. 
 Every argument from the "impossible" urged by the friends 
 of vested interests makes the case against vested interests 
 stronger. The more difficult it is to satisfy the primary 
 needs, the more necessary it becomes to apply the whole of 
 our revenue to that purpose. And the first need of all is 
 life for the worker. In a true social state every citizen 
 counts for something, all alike must be considered ; but the 
 servants of society must be considered first. If there were 
 to be before and after at all in a true state, those would be 
 before who whether with brain or muscle have done the 
 hardest, most unpleasant, most dangerous, most self-denying 
 work for the common good. And next to the worker would 
 come the helpless. Not till these first needs are satisfied 
 can we consider any other claims. Individualist economics 
 put the cart before the horse and then are surprised that 
 there is no progress. We intend to reverse the order and 
 see if many " impossible " things do not become possible. 
 
 I conclude, on the whole, that the economic objections to 
 the collective control of industry are not sound. 
 
 But one question remains to be raised. In all this advo- 
 cacy of collective control are we not leaving one side of life 
 out of account altogether ? Does not the growth of the 
 central authority militate fatally against the liberty of indi-
 
 THE CONTEOL OF INDUSTBY. 89 
 
 vidual citizens which is essential to progress? This is a 
 consideration which would have had more weight in Eng- 
 land twenty, or even ten, years ago than it has to-day, and 
 I deal with it not so much because I think it will be con- 
 sidered, as because I hold that it ought to be considered. 
 I shall not, therefore, attempt an exhaustive discussion of 
 the arguments for individualism. I will content myself with 
 one or two as representative, and will then pass to the more 
 positive treatment of the subject. 
 
 First, then, the idea of the "rights" of the individual as 
 opposed to the good of society, though it would hardly find 
 countenance from any competent thinker, still appears to 
 lurk obscurely in certain minds from which it emerges from 
 time to time into the twilight of confused platform speeches 
 or magazine articles. We still hear of the rights of property, 
 the right to free labour, the right to drink when and where 
 you please, as though these rights were not merely the 
 creation of society, sustained by society for its own con- 
 venience, and having no other moral justification in the 
 world, but superior to social welfare and competent to give 
 it the law. But a " natural right " independent of the wel- 
 fare of society is as much a contradiction in terms as a legal 
 right independent of a law enforcing it. On this point 
 philosophers speak with one voice. That it is the view of 
 utilitarians, like Mill, holding as they do that the greatest 
 happiness of mankind is the test of right and wrong, goes 
 of course without saying. Let us hear, then, one of the 
 greatest English representatives of a quite opposite school of 
 thought : 
 
 " The dissociation of innate rights from innate duties has 
 gone along with the delusion that such rights existed apart 
 from society. Men were supposed to have existed in a 
 state of nature which was not a state of society, but in 
 which certain rights attached to them as individuals, and 
 then to have formed societies by contract or covenant. 
 Society having been formed, certain other rights arose
 
 90 THE LABOUR MOVEMENT. 
 
 through positive enactment ; but none of these, it was held, 
 could interfere with the natural rights which belonged to 
 men antecedently to the social contract or survived it. 
 
 " Such a theory can only be stated by an application to 
 an imaginary state of things, prior to the formation of 
 societies as regulated by custom or law, of terms that have 
 no meaning except in relation to such societies. ' Natural 
 right/ as right in a state of nature which is not a state of 
 society, is a contradiction. There can be no right without 
 a consciousness of common interest on the part of members 
 of a society. Without this there might be certain powers 
 on the part of individuals, but no recognition of these 
 powers by others as powers of which they allow the exer- 
 cise, nor any claim to such recognition ; and without this 
 recognition or claim to recognition there can be no right." ' 
 
 On this point, then, Utilitarian and Transcendentalist 
 join hands. A right is nothing but what the good of society 
 makes it. If it were well for society as a whole to destroy 
 every right of private property to-morrow, it would be just 
 to do so, and the owners would have no right to object. 
 They might resist with physical force, but they would have 
 no moral ground to stand upon. If, therefore, any right to 
 any form of property or freedom no longer serves a good 
 social purpose, it must go. And whatever tenderness we 
 show to the interests of individuals, remember that we do 
 this, too, in the name of the common welfare. 
 
 This being understood, we pass to the scientific argu- 
 ments for individualism. The chief of these arguments is 
 an application to human progress of ideas derived from 
 the organic world at large. The struggle for existence 
 among plants and animals is continually eliminating the 
 majority of those which are born, and the survivors are 
 only able to maintain their ground by superiority to the 
 remainder in strength, swiftness, cunning, endurance, or 
 
 * T. H. Green, " Principles of Political Obligation," Philosophical 
 Works, vol. ii. p. 354, 2nd ed., 1890.
 
 THE CONTROL OF INDUSTRY. 91 
 
 some similar quality. Hence the natural result of the 
 struggle is the survival of the fittest, which is the means of 
 the gradual evolution of higher from lower forms. So in 
 human life success is to the strong, the swift, the cunning, and 
 the patient. Let natural forces play, and these shall inherit 
 the earth, the weak and feeble being rooted out. In this 
 way by slow degrees we attain to a higher type. But if by 
 artificial means we preserve the impotent and the help- 
 less, we hinder this beneficent natural process. We prolong 
 the misery of their extinction and lower the average of 
 human excellence. Happiness and perfection are reached 
 by men and by other organisms when they are thoroughly 
 well adapted to their environment, and the supreme law 
 of progress is that the ill-adapted being should be left to 
 die : 
 
 " Thou shalt not kill, but needst not strive 
 Officiously to keep alive." 
 
 Now we fully agree with the evolutionists in their main 
 position. It is desirable that the fit should succeed and 
 the unfit fail ; we are ready even to exclude the utterly 
 unfit from society altogether by enclosing them in prison 
 walls. But who are the unfit? "Those who are ill-adapted 
 to their environment," say the evolutionists. Quite so; and 
 what is the environment of man ? The society of other 
 men. Then who is the fit man ? Clearly the man who is 
 best adapted for social life. And who again is he ? Is he 
 the bold, unscrupulous man of force, the exacting, the 
 merciless, the ungenerous. Such is the man who succeeds 
 in the anarchical struggle for existence. Or is he the 
 merciful and generous man of justice, whose hardest fights 
 are fought for others' lives, who would rather, with Plato, 
 suffer wrong than inflict it, and who will lay down his life to 
 serve mankind ? The first is fittest actually to survive in 
 the unregulated contest of individuals. The second is 
 fittest morally to survive in a society of mutually depen-
 
 92 THE LABOUR MOVEMENT. 
 
 dent human beings. And that the morally fittest shall 
 actually survive and prosper is the object of good social 
 institutions.* 
 
 This society of the just may be an unattainable ideal 
 upon earth; it may be destined to exist only in some 
 heavenly place among the gods. But according as we are 
 brave or faint-hearted, wise or foolish, virtuous or corrupt, 
 we approach it or fall off from it. There is not, and may 
 never be, a heaven upon earth, but that is no reason why 
 we should not strive to realise as much of heaven as we 
 can. We can approach, if we can never reach, the rule of 
 Right and of Justice, that those shall prosper who deserve it. 
 We can at least institute and maintain conditions which 
 favour this result, which therefore promote the survival of 
 the fittest in the only sense in which that end is desirable. 
 But even the halt and the lame, if they bear their trouble 
 bravely, may be fitter for the social state, and serve it 
 better by their patient lives than the bold and strong, who, 
 in the pursuit of their own end, turn the earth into a hell. 
 Better to preserve the physically weak and their offspring 
 than the morally bad and their brood of evil. Better to 
 keep alive a maimed deformity than the human monsters 
 who, if the tale be true, " grow " these deformities for gain. 
 But we have no such sad alternatives before us. A due 
 regulation of economic conditions would provide for physical 
 
 * It is almost superfluous to point out the ambiguity in the word fit. 
 In any struggle the fittest survives. He would not have survived had 
 he not been the fittest to meet the particular conditions of that particular 
 struggle. It does not follow that he is the fittest from a moral point of 
 view, i.e., that he is the competitor for whom a moral man, weighing the 
 merits of the rivals from a moral point of view, would desire the victory. 
 Very immoral qualities may be the condition of success in certain states 
 of social or non-social existence. If, then, we wish to preserve the 
 morally fit, we must make submission to moral laws the main condition 
 of success. Then the two meanings of fitness coincide. The morally 
 fit become the best fitted to survive. Again, in the first meaning of the 
 word, the survival of the fittest is a fact. In the second it is a desidera- 
 tum. But the fact is not always a desideratum, nor the desideratum 
 always a fact. We wish the desideratum to become fact.
 
 TEE CONTROL OF INDUSTRY. 93 
 
 as for moral health, and far from scorning the teachings 
 of biology would use them to promote the evolution of a 
 nobler species.* The evolutionist argument thus correctly 
 understood makes straight for collective control. 
 
 The true value of liberty was, I venture to think, better 
 understood by older writers like J. S. Mill. That, in his 
 phrase, " individuality is an element of well-being " is, I 
 believe, a permanent truth. We do not want to run 
 everybody into one mould. We do not wish to turn our 
 national institutions into a Procrustes bed, in which every 
 man's nature is to be cut to one length. But then we entirely 
 deny that the regulation of industrial life tends in this 
 direction. If it were proposed to impose an uniform 
 religion, to dictate a system of thought, to interfere with a 
 man's leisure, even to regulate his minor tastes in dress or 
 furniture, then, indeed, we should be cramping individuality 
 and inaugurating an era of stagnation. And when such 
 things are advocated we, for our part, shall be found among 
 the ranks of the Individualists. But an active social life 
 has no connection with the rule of bigotry and intolerance. 
 The best social life consists precisely in the harmonious 
 working out to their fullest possible development of the 
 best capacities of all members of the community. And true 
 liberty, to quote Professor Green again, is found when each 
 man has the greatest possible opportunity for making the 
 best of himself. And the problem for society is so far as 
 possible to ensure such liberty for all its members. To do 
 this undoubtedly involves the curtailment of individuals in 
 some of their actions. But some such limitations are 
 essential to the very existence of society. We cannot 
 allow people to discharge pistols in Piccadilly or bombs at 
 the base of our public buildings, however much they may be 
 
 * So much has been said by evolutionists of the danger of keeping 
 alive tendencies injurious to society, that it is surprising that they should 
 not notice the tendency of individualism to foster selfishness and callous- 
 ness to suffering the most directly antisocial of all tendencies.
 
 94 THE LABOUB MOVEMENT. 
 
 convinced that they are but following their best impulses in 
 so doing. We have to curtail the free play of their aspira- 
 tions for the safety of ourselves and our fellow-citizens. 
 The curtailment of the liberties of some, then, may mean 
 the maximum of liberty upon the whole. And this maxi- 
 mum it is our object to ensure. Thus free competition for 
 employment is a form of uncurtailed liberty, and it results 
 in working hours of twelve, fourteen, or sixteen a day, with 
 full liberty for self -development in the hours that remain. 
 If we curtail the liberty on one side, and so obtain an eight- 
 hour day for a group of workers, with four, six, or eight 
 hours' additional leisure, do we add to liberty or subtract 
 from it upon the whole ? If we compel so much education 
 as puts a child in a position in which he has all the best 
 thoughts that have been expressed in his mother-tongue at 
 his command, do we give him a worse or a better chance of 
 developing his nature in the long run ? In a word, if we 
 exercise control where the health and other material needs 
 of society are concerned, do we augment or diminish the 
 power of satisfying higher needs ? I should reply that all 
 depends on the wisdom of our control. If you govern 
 badly or unwisely, probably enough you will get bad results. 
 But it is a bad government indeed that would not be better 
 than anarchy, just as it is a very poor brain that is no 
 better to its possessor than an empty skull. The actual 
 control itself is, in fact, a small obstacle to liberty in its 
 higher aspects. Just as it matters little to control the 
 body if you leave the spirit free, so it is a small thing to 
 order man's doings in the way of providing material needs 
 if you leave him to roam unfettered in the larger field of 
 mental and spiritual development. And as our object is to 
 enable men to realise such development, and find in it their 
 greatest happiness, we insist at one and the same time 
 on perfect freedom in this direction, and perfect organisa- 
 tion of all the material basis of society which forms the 
 foundation of the wider life.
 
 THE CONTROL OF INDUSTRY. 95 
 
 We do not, then, attack liberty, but defend it. But we dis- 
 tinguish kinds, or, if you like, spheres, of liberty as of very 
 different importance. And we advocate curtailment of the 
 lower kinds in the interests of the higher. It may be asked 
 who is the judge of higher and lower, and who decides what is 
 essential to the interests of the higher ? Only one answer 
 can be given the majority of the citizens, and this brings 
 us to the second of Mill's pleas for liberty the fallibility of 
 any human authority. Here again we have a consideration 
 of great and permanent importance. No human being, and, 
 therefore, no collection of human beings, can be perfectly 
 wise. If we admit, with Aristotle, that the wisdom of a 
 body of men in their collective decisions may be greater 
 than the average wisdom of the component individuals, we 
 must yet allow that it is imperfect. The court of appeal to 
 the people is the highest human court, because none higher 
 and none safer can be devised. But the voice of the people 
 is not the voice of God. And a whole generation may 
 follow a mistaken idea about its own best interests. To 
 ignore this is the mere weakness of fanaticism. 
 
 But we have a corrective to all mistakes the only 
 correction open to mankind of free criticism ; we must in 
 many ways control action, we cannot control thought, we 
 should not control speech. In all curtailment of freedom, 
 let this field be left open, and the main danger of govern- 
 ment persistence in a wrong course is avoided. We shall 
 lose, we do lose something by toleration in this form. The 
 promulgation of error is pro tante harmful. But Mill has 
 shown that the open advocacy of error is far less prejudicial 
 to the cause of truth than the suppression of divergences of 
 opinion. Free discussion is the best corrective of stagna- 
 tion, and free discussion involves some error. And there 
 is a suitable point at which the repression of erroneous 
 doctrines should begin, the point that is when it issues in 
 action to the hurt of society. At that point repress it if you 
 please, but still leave men free to talk. This distinction is
 
 96 THE LABOUR MOVEMENT. 
 
 of course recognised in law. It is open to a man to advocate 
 Mormonism in England, but it is not open to him to be a 
 bigamist. In most respects the law already holds that it is 
 best to let men talk out their thoughts and to meet them by 
 reason and persuasion, rather than with a whiff of grapeshot. 
 And so far from advocating an extension of collective control 
 in this direction, we would rather see a clearer line of demar- 
 cation drawn, and the rule of free discussion made as nearly 
 absolute as any rule can be.* Let the fresh air of criti- 
 cism move over the face of the waters and keep them 
 astir. Then at least we shall avoid stagnation. It is 
 difficult to many people to combine toleration and zeal 
 difficult, but necessary. Half the progressive movements of 
 the world have failed in the long run through this defect. 
 To raise men one step on the upward path, they have built 
 up a machinery which has prevented all further movement ; 
 and the next stage has had to begin with the breaking 
 down of this cumbersome mechanism. If for the future 
 this error can be avoided, progressive movements will no 
 longer contain the causes of stagnation or relapse within 
 themselves. And the single general principle which can be 
 laid down to help us here is the principle of free thought and 
 free discussion. It may be asked, " If you admit the State 
 fallible, how can you insist that we should let it judge for 
 us?" I purposely put the question in this form, because I 
 think, that however phrased, it rests on an unanalysed idea 
 of the State as something outside ourselves. The truth of 
 course is that we are the State, and when we judge and 
 decide things as a state, we are in no worse position for 
 judging than in the practical affairs of daily life. I cannot 
 get an infaUible judgment from any source on earth, whether 
 on my own affairs or to assist anybody else. Even if it is 
 
 * It is, I think, consistent with this to regulate, in some degree, the 
 manner of expression in certain subjects. Since in this case the use of 
 some expressions produces an effect on the hearer without altering his 
 opinion, and the absolute rule we want is that any attempt to modify 
 opinion should be permissible.
 
 THE CONTROL OF INDUSTRY. 97 
 
 contended that every one from Solomon to the village fool 
 is the best judge of his own interest, it cannot be held that 
 either Solomon or the fool are infallible even on this point. 
 The argument then cuts both ways. If the State is fallible 
 in dealing with the individual, the individual is fallible in 
 acting for himself. And it has to be considered that each 
 man's action affects other people, and however well he may 
 be able to judge for them and for himself, there is no 
 guarantee that so far as they are concerned, he has the will 
 to judge well. The democratic state, on the other hand, 
 represents the resultant judgment, so to say, of the conflict- 
 ing views of all its adult and sane members, and in this 
 resultant judgment we get the nearest approach to a 
 collective judgment of the social organism upon its col- 
 lective interests, parallel to the judgment of the individual 
 man on his private interests. 
 
 There are those who allow the uncertainty of things to 
 weigh so heavily upon them as to paralyse their will in their 
 own private affairs. They exaggerate caution, and allow 
 the one-thousandth chance of failure to outweigh the 
 999 probabilities of success. They do not count the cost 
 before acting. They never act at all. The thing in some 
 instances, I believe, becomes a kind of mania, ending in a 
 sort of general paralysis. Many people suffer from a similar 
 paralysis when they approach public affairs, and the only 
 active principle they appear to retain is that of spreading 
 the same paralysis throughout society. But society must 
 judge and act, as individuals must judge and act. Inaction 
 no more saves us from responsibility, than the ostrich 
 secures itself from its enemy by burying its head in the 
 sand. If we decline to act, we are responsible for all that 
 follows from inaction, as surely as we must take the conse- 
 quences of action when we do act. If we do not put down 
 gambling, if we do not limit the hours of industry, if we do 
 not punish criminals, we must be held responsible for all 
 that follows from our passivity. Besponsibility is hung
 
 98 THE LABOUR MOVEMENT. 
 
 about our necks, and we cannot shake it off. For better or 
 for worse, in private and in public, at each emergency of 
 life on each new question forced on us, we have to judge 
 as best we can, using all available light, listening to every 
 instructed teacher, and, finally, coming to a decision not less 
 resolute because delayed. Consciousness of weakness and 
 limitation is all good if it leads to open-miadedness and 
 toleration, all bad if its result is the paralysis of doubt. 
 And in the great matters of life, it is our imperative duty 
 not only to hear all sides, but also having heard them, to 
 form opinions of our own. The duty of having convictions 
 is correlative and supplementary to the duty of tolerance 
 and open-rnindedness. 
 
 Both duties may be recognised in our public action, and 
 the due balance of both can alone secure a continuous 
 forward movement of mankind, and in it lies the solution of 
 the old question between liberty and authority. Using 
 every available means of obtaining true ideas of what is 
 necessary as the fundamental condition of social health, it 
 is our right and duty to enforce that by any and every 
 form of collective authority, legally or voluntarily consti- 
 tuted. It is equally right and good to leave a fair field of 
 discussion open to all who consider themselves aggrieved, or 
 who think we are in the wrong path. And, finally, collective 
 control has not so much to make people good and happy, 
 as to establish the necessary conditions of goodness and 
 happiness, leaving it to individual effort and voluntary 
 association to develop freely and spontaneously all the fair 
 flower and fruit of human intercourse and knowledge and 
 beauty, which can spring from a sound root firmly planted 
 in life-giving earth. 
 
 THE END. 
 
 LIPHAHY 
 
 CAJJPOHNH 
 
 SA -xBARA
 
 U1TWIN BEOTHEES, 
 OHILWOBTH AND LONDON.
 
 THE LIBRARY
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
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