Fifty years in Wall Street
thereby strengthen our international position in this question.
Europe, and especially England, would then be compelled to
earnestly consider measures for placing the double standard upon
a broad and lasting international basis; and as such a
disposition began to manifest itself, the silver market would so
far sympathize as to amply compensate producers for any losses
they might suffer from a temporary fall in bullion.
HENRY CLEWS.
Bad as the situation is, in respect to this vast mass of the world’s
circulating medium, yet it is far from being a hopeless one. The more
serious it becomes, the nearer will be the remedy. The derangements to
commerce and to immense vested interests must ultimately become so
serious, that the nations which now obstruct the application of a remedy
will be compelled to submit to the necessities of an imperative danger,
and the end will probably be that a coinage union will be established
between the great nations, on a basis broad enough to give stability to
this form of money beyond all possibility of future disturbance.
------------------------------------------------------------------------
CHAPTER XLV.
THE LABOR QUESTION.
HARMONY BETWEEN THE REPRESENTATIVES OF CAPITAL AND LABOR NECESSARY FOR
BUSINESS PROSPERITY.—IF MANUFACTURERS SHOULD COMBINE TO REGULATE
WAGES, THE ARRANGEMENT COULD ONLY BE TEMPORARY.—THE WORKINGMEN ARE
TAKEN CARE OF BY THE NATURAL LAWS OF TRADE.—COMPETITION AMONG THE
CAPITALISTS SUSTAINS THE RATE OF WAGES.—OPINION OF JOHN STUART MILL
ON THIS SUBJECT.—COMPELLING A UNIFORM RATE OF PAY IS A GROSS
INJUSTICE TO THE MOST SKILFUL WORKMEN.—THE TENDENCY OF THE TRADES
UNIONS TO DEBAR THE WORKINGMAN FROM SOCIAL ELEVATION.—THE POWER OF
THE UNIONS BROUGHT TO A TEST.—THE UNIVERSAL FAILURE OF THE
STRIKES.—REVOLUTIONARY DEMANDS OF THE KNIGHTS OF LABOR.—GOULD AND
THE STRIKES ON THE MISSOURI PACIFIC, &c., &c.
There is no influence to which business circles are more sensitive than
the disruption of harmony between capital and labor. Whatever affects
the productiveness of labor affects, more directly than any other cause,
the national prosperity and the welfare of all classes of society. The
value of the vast aggregate of corporate property represented on the
Stock Exchange is vitally dependent on the maintenance of such relations
between the employed and employing classes as contribute to the highest
welfare of both and to the largest possible national production; and,
therefore, whatever tends to imperil such relations becomes a source of
serious disturbance to the stock market, to financial interests at
large, and to the best interests of labor itself.
There appears to be an idea, in certain quarters, that the modern
concentration of capital into large masses has made it necessary for
workmen also to organize themselves into large bodies, sinking their
individual rights and liberties and selling their labor _en masse_. For
my part, I am unable to see the force of this reasoning, although I
cannot but respect the ability of some authorities by which it is
sanctioned. It seems to assume that large employers of labor have more
power to depress wages than smaller ones; and from this it is inferred
that it is necessary for workmen to combine to protect themselves
against this supposed increased exposure to aggression from capital. But
is either the premise or the conclusion sound? In order to concede the
assumption we must suppose that large employers can cease to be
competitors for labor; for in no other way can they depress wages. But
this can never happen; for capitalists will always produce to the
fullest extent compatible with an average rate of profit, and this
ensures the largest possible demand for labor and, therefore, the
highest possible rate of wages. If employers combined to force the rate
of wages down, as workmen do to force it up, they would undoubtedly be
able to compel a temporary reduction in the remuneration of labor.
But, of necessity, such an artificial depression of wages could only be
temporary; for what was thus taken by force from labor would make
manufacturing so unusually profitable that new capital would be
immediately attracted to it, and the consequent additional demand for
labor would necessitate an advance in wages, which the combined
manufacturers would be compelled to pay. As a matter of fact,
manufacturers do not combine to regulate wages, not only because of the
reasons just stated, but also because they know that no such combination
could be maintained in the face of the jealousies and conflicting
interests that always exist among them. If, then, it is true that
manufacturers are compelled by the necessities of competition to pay as
much for labor as it is for the time-being worth, and, if they do not
and cannot combine to depress wages, I am unable to see where arises the
necessity for the workmen to combine for the purpose of protecting
themselves against capital.
The workingmen are taken care of by the natural laws of trade far more
perfectly than they can be by any artificial arrangement; and trades
unions are simply an intrusion upon the domain of those laws, without
the power to supplement or perfect their operation, and with a certainty
of obstructing and perverting their tendency, with the inevitable result
of mischief to all parties. If the unions do occasionally get an advance
in wages, it would have come by the natural laws of competition among
the capitalists. It might be delayed for a time, but if you calculate
the loss of wages and suffering entailed by the strike, I think the
workmen would be safer in the end to wait for the natural advance. I am
clearly borne out in this view of the case of the capitalist by that
great political economist, philosopher and thinker, John Stuart Mill,
who was certainly no enthusiastic friend of the capitalist, and is an
acknowledged friend of labor as widely as his writings are known, which
is almost as extensive as civilization itself.
After laying down the principles of Socialism, Mill says:
“Next, it must be observed that Socialists generally, and even
the most enlightened of them, have a very imperfect and one
sided notion of the operation of competition. They see half its
effects, and overlook the other half; they regard it as an
agency for grinding down every one’s remuneration—for obliging
every one to accept less wages for his labor, or a less price
for his commodities, which would be true only if every one had
to dispose of his labor _or his commodities to some great
monopolist, and the competition were all on one side_. They
forget that competition is the cause of high prices and values
as well as of low; that the buyers of labor and of commodities
compete with one another as well as the sellers; and that if it
is competition _which keeps the prices of labor and commodities
as low as they are_, it is competition which prevents them from
falling still lower. In truth, when competition is perfectly
free on both sides, its tendency is not specially either to
raise or to lower the price of articles, but to equalize it; to
level inequalities of remuneration, and to reduce all to a
general average, a result which, in so far as realized (no doubt
very imperfectly), is, on Socialistic principles, desirable. But
if, disregarding for the time that part of the effects of
competition which consists in keeping up prices, we fix our
attention on its effect in keeping them down, and contemplate
this effect in reference solely to the interest of the laboring
classes, it would seem that if competition keeps down wages, and
so gives a motive to the laboring classes to withdraw the labor
market from the full influence of competition, if they can, it
must on the other hand have credit for keeping down the prices
of the articles on which wages are expended, to the great
advantage of those who depend on wages. To meet this
consideration Socialists, as we said in our quotation from M.
Louis Blanc, are reduced to affirm that the low prices of
commodities produced by competition are delusive, and lead in
the end to higher prices than before, because when the richest
competitor has got rid of all his rivals, he commands the market
and can demand any price he pleases. Now, the commonest
experience shows that this state of things, under really free
competition, is wholly imaginary. The richest competitor neither
does nor can get rid of all his rivals, and establish himself in
the exclusive possession of the market; and it is not the fact
that any important branch of industry or commerce formerly
divided among many has become, or shows any tendency to become,
the monopoly of a few.
“The kind of policy described is sometimes possible where, as in
the case of railways, the only competition possible is between
two or three great companies, the operations being on too vast a
scale to be within the reach of individual capitalists; and this
is one of the reasons why businesses which require to be carried
on by great joint-stock enterprises cannot be trusted to
competition, but, when not reserved by the State to itself,
ought to be carried on under conditions prescribed, and from
time to time, varied by the State, for the purpose of insuring
to the public a cheaper supply of its wants than would be
afforded by private interest in the absence of sufficient
competition. But in the ordinary branches of industry no one
rich competitor has it in his power to drive out all the smaller
ones. Some businesses show a tendency to pass out of the hands
of many small producers and dealers into a smaller number of
larger ones; but the cases in which this happens are those in
which the possession of a larger capital permits the adoption of
more powerful machinery, more efficient, by more expensive
processes, or a better organized and more economical mode of
carrying on business, and thus enables the large dealer
legitimately and permanently to supply the commodity cheaper
than can be done on the small scale; to the great advantage of
the consumers, and therefore of the laboring classes, and
diminishing, _pro tanto_, the waste of the resources of the
community so much complained of by Socialists, the unnecessary
multiplication of mere distributors, and of the various other
classes whom Fourier calls the parasites of industry. When this
change is effected, the larger capitalists, either individual or
joint-stock, among which the business is divided, are seldom, if
ever, in any considerable branch of commerce, so few as that
competition shall not continue to act between them; so that the
saving in cost, which enabled them to undersell the small
dealers, continues afterwards, as at first, to be passed on, in
lower prices, to their customers. The operation, therefore, of
competition in keeping down the prices of commodities, including
those on which wages are expended, is not illusive but real, and
we may add, is a growing, not a declining fact.”
One principle of the unions is exceedingly unjust to the workingmen to
the last degree. It starts with the assumption that all workmen are
equal in their capacity as to the quality of service or work and the
quantity of production; and upon this false assumption is based the
injustice of compelling all members to bind themselves to a uniform rate