The Theory of Collective Bargaining

 

PART ONE “Labor’s Disadvantage”

 

 

THE OBJECT of this essay is to controvert the suggestions typical of most modern economic text-books,

(a) that there is some portion of the normal remuneration of labor which, in the absence of collective bargaining by labor is, or can be, transferred to the remuneration of other factors of production owing to labor’s “disadvantage in bargaining”; or

(b) that combination, by increasing labor’s “bargaining power,” enables it to acquire a part of the normal remuneration of some other factor.

THE TERM “COLLECTIVE BARGAINING”

The very useful term “Collective Bargaining” was coined in 1891 by Mrs. Sidney Webb in her work on the cooperative movement. The Webbs1 have never given a formal definition but have used it to cover negotiations between employers and workpeople when the work-people act in concert and the employer meets “a collective will.” Collective bargaining may take place in many kinds of negotiating in concert, but it is used here to describe what is probably the most important function of trade unionism.

THE SUPPOSED IMPORTANCE OF THE ABANDONMENT OF THE WAGE-FUND THEORY

It is commonly believed that the overthrow of the “Wage-Fund” theory was the turning-point in regard to the economist’s attitude towards trade unionism. The earlier economists, we are told, held that the level of wages depended on the proportion of the wage-fund or capital in relation to the number of workers. Trade unions could not affect the size of this fund and hence all efforts to raise the general level of wages were futile. Gains by one section of the workers could only be obtained at the expense of other sections. With the abandonment of the wage-fund error, however, and especially after Mill’s renunciation of it in 1869, this view was shown to be untenable, so we are told, and from that time the economic justification of trade unions has been complete. Professor Clay, for instance, tells us that the wage-fund theory was responsible for the belief, common in the middle class, that political economy had found trade unionism to be futile because of the theory that “if wages were fixed by the proportion between population and capital, trade unionism was futile and wicked; it could raise the wages of one section only at the expense of other sections.”2 Successive reiterations by leading economists have caused this belief to become firmly accepted. F. A. Walker, in 1876, declared that under the wage-fund doctrine the striking workman was regarded as “an irrational animal whose instincts, unfortunately, were not politico-economical.”3 Edgeworth, writing in 1881, declared that “in the matter of trade unionism . . . the untutored mind of the workman had gone more straight to the point than economic intelligence misled by a bad method.”4 Cunningham, in 1892 said: “Men were continually regretting the blind stupidity of working men who thought that combinations could raise wages . . . but this was a blunder. Combinations can raise wages; they have done so and may do so again.”5 This belief in a fundamental change having been effected by the giving up of the clumsy wage-fund theory is erroneous and misleading. The realization of the absurdities of the doctrine gave the apologists of the unions something they could attack with the full support of authority; but the productivity theory which, in various forms, arose on its ruins did not in itself contain any justification for collective bargaining. The vague phrases about the “disadvantage” of uncombined labor which constitute its modern defense have existed continuously since the days of Adam Smith.

ATTEMPTS TO RATIONALIZE IDEAS ABOUT “LABOR’S DISADVANTAGE”

The change of doctrine that was supposed to have taken place in the ’seventies was heralded by four mainly independent6 but remarkably similar defenses of workers’ combinations. The authors were: F. D. Longe, Cliffe Leslie, Fleeming Jenkin and W. T. Thornton. Three of them definitely attacked the wage-fund conception, but the principal object of all four, although Longe denied it, was the justification of unionism. These contributions all appeared during the years 1866 to 1869, and were followed in 1869 by an article from Mill (in the Fortnightly Review), who, it seems, had only read the views of his friend Thornton. It was in this article that he formally renounced the wage-fund theory and gave currency to the view that there was some way in which trade unions could gain, not at the expense of other workers but at the expense of the capitalist. An attempt to analyze separately and carefully every single theory put forward by all these writers has led to the conclusion that they consist largely in the rationalization of ideas about labor’s disadvantage in bargaining which, far from being novel, had been held continuously since the time of Adam Smith. For the rest they seem at first to contain little beyond a number of attacks on the general theory of prices based on generalizations induced from the consideration of a number of hypothetical and improbable special cases, and a number of newly coined descriptive phrases which have since served as a substitute for thought in these matters.

THE IDEA OF “LABOR’S DISADVANTAGE” ACCEPTED BY WAGE-FUND THEORISTS

Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.”7 Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.”8 The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.”9 On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.”10 Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .”11 These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.”12 In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch,13 thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day.14 An essay which declared the orthodox political economy of the ‘fifties to be undisputed15 was passed by a large union as a faithful representation of their views.16 Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838)17 to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”18

THE THEORY OF COLLECTIVE BARGAINING A MERE ATTACHMENT TO WHATEVER PARTICULAR WAGE THEORY HAS BEEN HELD

The truth is, that the theory explaining or showing the desirability of collective bargaining has always been quite independent of the wages doctrine that has existed at any time; it has been very similar in form no matter to what particular theory it has been attached; but it has always been a kind of attachment to the theory and not, as we should expect, in view of unionism being the most obvious institution forming part of the wage-determining mechanism, an integral part of it. This fact alone would suggest that nothing very important or fundamental is involved in such a theory. A few economists have ignored it altogether in a way which would suggest that they regard it as empty although they have not directly attacked it.19 For example, Professor Cannan writes: “Modern doctrine teaches plainly enough that combinations of earners can only raise earnings if they can raise the value or quantity of the product . . .”20 This clearly cuts out any theory of collective bargaining, for that is concerned with the distribution and not the size or value of the product. He adds that in practice it is shown by common observation and careful investigation that little can be done by combinations of earners unless they have power to prevent outsiders from entering the trade.21 All that is admitted here is that individual groups may gain at the expense of others by monopoly obtained by the device of exclusion; and that was what the earlier economists appeared, at times, to say. But does direct exclusion supply a sufficient explanation of the effect of combinations on wages? It is desirable briefly to examine this view before discussing the theories which appear to contradict it.

THE INTERESTS OF THE UNIONISTS ARE ANTAGONISTIC TO THOSE OF THE LABORING MASSES

Frederic Harrison described the trade-union movement as “one universal protest against injustice from the whole field of labour.” This identification with the general working-class movement (although very common) may be highly misleading. It probably arose from the fact that typical ignorant upper-class opinion during the nineteenth century was quite unable to appreciate the complexity of the social and economic tendencies operating among the “lower orders.” To them, there was only one working class—an inferior class that, led by demagogues and agitators, was trying to usurp political and economic power. Apart from the economists, a few enlightened industrialists and a few philosophers, they had a vague belief that the drudgery of the masses was necessary for the leisure of the few, that their subservience was the natural order of things, and that low wages were good for trade. They were very glad to have it on the authority of the economists that these evil and rebellious combinations were ineffectual. But this should not allow the modern student to ignore the fact that the interests of the unionists were almost universally antagonistic to those of the laboring masses. Had historians of the trade-union movement been orthodox economic theorists they might have laid the strongest emphasis on this point. As it happens, however, they have been practically without exception persons with an undisguised hostility to orthodox theory; and this may account for their failure to stress what might have struck other economists most forcibly. The Webbs frankly admit the frequent existence of monopolistic tendencies on the part of unions, but the general impression they leave is misleading for they have obviously written as union advocates. However much we may admire their History—a. monumental achievement which it would be presumptuous to praise—we must remind ourselves, whilst we are influenced by its thoroughness and manifest sincerity, that it is yet the special pleading of those who have devoted their lives to the encouragement of the institution whose development they were recording.

To justify the contention that combinations were antagonistic to the interests of the great majority of the laboring classes is impossible by means of ordinary historical method in a mainly theoretical treatment such as this. We can, however, to escape the suspicion of bias or misrepresentation, appeal to the opinions, expressed at different times, of working-class leaders themselves. This is not the most satisfactory way of indicating the position, but it is the most practicable one in the present case.

THE “FOUNDER OF SCIENTIFIC SOCIALISM”

We might appeal first to William Thompson. Described by Menger as “the most eminent founder of modern scientific Socialism,” the originator of the idea of “surplus value,”22 a friend and teacher of Robert Owen, Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were “bloody aristocracies of industry.” “The apprenticeship or excluding system,” he said, “depended on mere force and would not allow other workers to come into the market at any price.” “It matters not,” he said in 1827, “whether that force . . . be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.”23 They demonstrated to him “the inefficiency of force supported regulations, though backed with political power, to keep up generally throughout the country the remuneration of any species of labour; though they certainly have tended . . . to keep up the remuneration of the few within the circle of the combination.” Such gains were always “at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.”24 This is “the founder of scientific Socialism” speaking—not an employer. “Will they then resort to force,” he said, “law supported as to apprenticeships or illegal as to intimidation—in all cases equally hateful—to put down the competition of the great majority of the industrious and thus erect a bloody—for force will lead to blood and without blood no aristocracy can be supported—aristocracy of industry?”25

A SOUTH AFRICAN PARALLEL

The position which raised the ire of Thompson a century ago finds a close and obvious parallel in South Africa today. If he had been writing at the present day, and the South African trade unions had condescended to reply, they would probably have answered: “Those whom we exclude are, on the whole, ‘non-Europeans,’ a morally inferior class to whom we do no harm by our exclusive policy as, owing to their low standard of life, they cannot rise and can merely drag us down.” Curiously enough this was just the view of the English unions of last century towards the “knobsticks” or “scabs,” the great majority of the laboring classes who were outside the unions. Their typical attitude was well summarized by J. S. Mill in his attempted justification of enlightened unionism in 1869. Acting as the unions’ advocate he put the following words into the mouth of their witness: “Those whom we exclude are a morally inferior class of labourers to us; their labour is worthless and their want of prudence and self-restraint makes them more active in adding to the population. We do them no wrong by intrenching ourselves behind a barrier, to exclude those whose competition would bring down our wages, without more than momentarily raising theirs, but only adding to the total numbers in existence.”26 Apart from the Malthusian aspect, this argument seems to be a fair representation of trade-union opinion at the time Mill wrote.

THE APATHY OF DEPRESSED CLASSES

One may wonder why it was that the working classes in England did not protest more at such injustices. To some extent it may have been for the same reason that we get so few protests against unions from “non-Europeans” in South Africa. It often appeared as if the “knobstick” felt and believed himself to be an inferior person. Another friend and defender of the trade-union movement, writing a year before Mill in the passage just quoted, described the knobstick’s position thus: “The wretched knobstick . . . is jeered at and snubbed on all possible occasions . . . he receives none of those little aids by which the other men lighten one another’s labour . . . he is generally an inferior workman, and his work receives its full due of criticism; he is an outcast, a pariah, and fear of personal violence is not required to render this position a wretched one. Some societies will not allow him to work in the same shop with their members, even as though he tainted the air. . . . Odd as it may seem, the knobstick takes much the same view of his position; he feels himself a sneak. . . . He is unskilful, poor, weak and a traitor (for attempting to undercut); they are skilled, rich, strong and noble; yes, even when they morally kick him. . . .”27

PROTESTS AGAINST EXCLUSIVENESS

Mill’s attempts to justify exclusiveness did not pass without criticism. “After all,” said Dr. Stirling, “the knobstick is not an outlaw, to be cut off from personal freedom and the protection of the law. He has his rights like his betters; and though too often treated like the leper of old, his chief offence is, after all, his poverty.”28 And T. S. Cree, referring to the Malthusian backing to Mill’s argument, remarked that Malthus “never proposed the destruction of the weak by the strong, in order that the latter should have more to divide.”29

UNIONIST APATHY TO CHARTISM

Until they obtained political power the great mass of the laboring classes had few friends outside their own ranks. Apart from the fact that there were no classes below them whom they could exploit by exclusion, they could not afford the luxury of unions or any other societies; nor could they pay leaders. Organizations of laborers offered no careers to competent organizers until well on into the century when the course of economic progress had greatly increased their resources. Thus we find that the Chartist Movement, the most prominent genuine working-class movement of the earlier half of the century, received little support from the unions. Their apathy brought fierce denunciation from Feargus O’Connor. “Never,” he wrote, “was there more criminal apathy.” The denunciations of Daniel O’Connell went much deeper. He condemned in the severest language not only the existing practices of the Irish Unions but also the essential exclusiveness of all attempts at the regulation of wages by combination.30 The reply of the London Trades Combination Committee to O’Connell was hardly repentant.31

IN MORE RECENT TIMES THE OLD ANTAGONISMS STILL OCCASIONALLY APPARENT

When at length, owing to the growth in the economic and political power of the masses, unionism began to extend its ranks the hostility to the older interests was obvious. John Burns, in the ’eighties, was contemptuous of existing unions. “Mere middle and upper class rate reducing institutions,” he called them. The “Dockers’ Strike” which he organized heralded a new era which brought into trade unions workers in unskilled occupations. This led to a rapid expansion during the late ’nineties and the early part of this century, during which period the earlier tendency to hostility tended, for many reasons, to die down. Not that the opposition of interest had gone. In the ’nineties exclusiveness still had its unashamed apostles. Miss Clementina Black admitted that no doubt trade unions did “tend to make the battle of life harder for the incompetent and shiftless.” They tend, she said, “to make a boundary line on the one side of which is the well-paid man in work and the other side the absolutely unpaid man out of work.” But this, she argued, brought no real injury to the community.32

THE “NEW UNIONISM” OBSCURED BUT DID NOT DESTROY THE OLD OPPOSITION OF INTEREST BETWEEN ONE CLASS OF WORKERS AND ANOTHER

Nevertheless, as the proportion of organized workers grew the real antagonism between those with effective exclusive power and those without became more and more obscured. Some regarded the “New Unionism” as a movement which completely superseded the old and exclusive system. “‘The Masses’ have been as ready to group themselves in exclusive sections, according to income, as their ‘betters,’” said H. H. Champion in 1890, “and the greatest sinners in this respect have been the Trades Unionists. But of late a different feeling has arisen. . . .”33 Whether exclusive power or desire was checked in the ’nineties is doubtful: but it was certainly not becoming more noticeable. Occasionally, however, we still found an over-earnest or disgruntled leader refusing to deny the existence of the old antagonisms. “The exclusiveness of some of the existing unions,” said Tom Mann in 1911, “must be got rid of . . . the skilled men must throw off that silly notion of superiority. . . . That unionism whose object is to maintain a special preserve for the privileged few must disappear, for it is incompatible with the rights of workmen generally and is a menace to industrial solidarity.” In America we see the same thing. From the I.W.W. we occasionally get the same kind of protests against exclusiveness. And the French “syndicalists” have expressed themselves in almost the same words.

EXCLUDED CLASSES STILL APATHETIC

But from the classes who, in modern society, suffer most from union exclusiveness we get the fewest protests. They accept quietly and unquestioningly their traditional economic inferiority. When the “colored” or “native” workers in South Africa organize, or when women organize in countries which are racially homogeneous, we either find them establishing new exclusions or else adopting the principle of “equal pay for equal work”—thus renouncing the only means in their power of discounting the prejudice against them as a class. Of course, organization of such workers is sometimes necessary in order to get or preserve the effective or even the legal right to a trade.

THE “STANDARD RATE” ESSENTIALLY AN EXCLUDING DEVICE

The exclusive policy of unions is not confined to the obvious method of visible exclusion by apprenticeship restrictions and the like. Every insistence on an artificially high rate will tend to reduce the number it will be profitable to employ. Those within the combination will still benefit at the expense of those outside. This method of obtaining monopoly is more pernicious than that of apprenticeship exclusion as it enables the monopolists to plead that they are acting in the interests of those whom they are in fact excluding. They can claim that they are raising the standard of living of the very ones whose competition they wish to eliminate, and even get the support of legal enactment to enable them to carry out their policy. The evil in labor monopolies lies not only in their driving the less fortunate to relatively badly paid occupations but also in their raising the cost of living to them as well.

THE WAGE-FUND THEORY ITSELF DID NOT JUSTIFY THE POPULAR BELIEF OF THE TIME THAT POLITICAL ECONOMY CONDEMNED ALL STRIKES AS IRRATIONAL

In view of the obviously purely monopolistic nature of workmen’s combinations in their day, there is nothing surprising in the classical economists’ failure to give much attention to the question as to whether or not the members of a union could increase their incomes otherwise than at the expense of other workers. An elaborate theory of collective bargaining would not have been much more than the merest academic abstraction in their day. Where they can be blamed is in not having faced more boldly this question of exclusiveness. It is true that on the whole they condemned it, but they seemed rather reluctant to admit its power. They often appear to have been trying to leave the impression that all strikes must necessarily fail in the long run and that no group of workers could gain permanently by strike action. This sort of thing was very comforting to the employers and the Press, and until the ’seventies it was made use of in the most careless manner. The economists were said to have declared that combinations could not raise wages. If they were right the workers were fools. But surely what the economists (apart from their sophism about labor’s disadvantage) had been saying or trying to say was that unions could not raise wages in general: it had never been explicitly denied that those particular groups could, by combination, increase their own share of the wage-fund at the expense of others, although it was sometimes argued that such monopolies were bound to break down in the end through the competition of other workers (generally from abroad), or through capital being driven elsewhere. The inadequacy of the wage-fund conception allowed this careless thinking to persist—comforting employers yet having no effect in preventing strikes. But modern theories would credit unions with some power of benefiting their members without the exercise of exclusiveness. Let us examine how the various ideas contained in these modern theories came to be held.

THE IDEA OF “LABOR’S DISADVANTAGE” IS FOUND IN “THE WEALTH OF NATIONS”

The distinctive ideas that lie behind still-persisting theories which seek, without defending monopoly, to justify collective bargaining, originated, as has already been pointed out, with Adam Smith. They arose in connection with the subsistence theory he put forward. Mr. C. M. Lloyd, a leading advocate and historian of unionism, either does not realize this or is very ungrateful for it. “The influence of manufacturers,” he writes, “. . . bore heavily upon Parliament . . . in 1776, this influence was reinforced by Adam Smith’s Wealth of Nations, from which it appeared that the creed of unrestricted exploitation was really a new gospel for humanity.”34 This is a strange way of referring to one of whom it has been said: “(his) sympathies, indeed, seem to have been wholly with the industrious wage-earner, and especially with the poorest.”35 To suggest that Adam Smith favored low wages is entirely false. The suggestion is constantly reiterated that the classical economists generally “defended subsistence wages.” “Of all the libels upon them invented by socialist and semi-socialist writers,” says Professor Cannan, “this is about the worst. They may have been, they certainly were, wrong about the causes of high wages, but they were always in favour of them.”36 The real evil in the subsistence theory lay in its hopelessness, and the attitude of self-pity and dependence which it tended, right against the spirit of the age, to instil in the minds of the laboring classes. Harriett Martineau, whose views are so often misrepresented as harsh, was attacked by the Edinburgh Review for her sentimentalism. They wrote: “From a wish, we suppose, to address the men in conciliatory language, she condoles with them as a suffering race who were induced to strike by the depression of their wages to the lowest point.”

ADAM SMITH LIMITED HIS THEORY (WHICH CONTAINED THREE IDEAS) TO “ORDINARY OCCASIONS”

Adam Smith’s views bearing on what became later the theory of collective bargaining arose then out of the subsistence theory. “Upon all ordinary occasions,” he wrote, “the masters have the advantage in the dispute,” and can force the men “into a compliance with their terms.” His explanation of this vague power can be analyzed into three separate ideas. First, there existed particular combinations of masters who agreed to force down wages to subsistence level. Second, there was “a tacit but uniform combination” among employers to keep wages down. Third, that although in the long run the workmen might be “as necessary to his master as his master is to him,” the necessity is “not so immediate.” Whereas masters, “though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired,” many workmen “could not subsist a week, few could subsist a month, and scarce any a year without employment.”37 These factors, he thought, accounted for the employers’ power to force wages down to the subsistence level. He seems to have assumed that how they gave the employers this remarkable power was self-evident, for no further explanation of them was given. The emptiness of the theory becomes clear when we consider the limits he assigned to the employers’ power in this respect. The limits were determined, not by the individual’s minimum requirements for survival, but by those of his family, because otherwise, said Smith, “it would be impossible for him to bring up a family, and the race of workmen could not last beyond the first generation.” But as Professor Cannan asks, if the masters have this power why should they concern themselves about the labor supply of the next generation? “Trade rings,” he says, “usually adopt the motto, ‘After us the deluge,’” and he points out that Adam Smith himself probably thought the doctrine was weak as evidenced by his dragging in an irrelevant reference to such wages being the lowest “consistent with common humanity.”38 Moreover, observing that in practice wages were often considerably higher than subsistence level, Smith limited the application of his theory to “ordinary occasions.”

ADAM SMITH HIMSELF SEEMS TO HAVE UNCONSCIOUSLY GIVEN UP THE IDEA

Do the exceptional occasions help us to understand the theory? He mentioned only one exceptional occasion, and that was an “increase of revenue or stock” which would “sometimes give the labourers an advantage, and enable them to raise their wages.” They could do this because the masters would then “bid against one another in order to get workmen, and thus voluntarily break through the natural combination of masters not to raise wages.” This, he thought, would happen while expansion was in progress. Thus we arrive at the really remarkable conclusion that an increase of stock loses the masters their relative advantage, a conclusion which could be made to look like a direct contradiction to the previous contention that it was the greater stocks held by the master which gave him his advantage. The truth is that Adam Smith had really unconsciously given up his earlier theory. In Professor Cannan’s words: “The power of the masters to depress wages to the subsistence level by combination, and their ‘common humanity’ which prevents them killing the goose that laid the golden eggs, by depressing them below that level, both disappear. . . . So little room is left for the subsistence theory that Adam Smith seems, towards the end of his work, to have forgotten that he had ever held it.”39 But the ideas about the employer’s advantage and his power to force down wages indefinitely and the workman’s corresponding disadvantage which originated thus have persisted right through to the present day, although the basis on which Adam Smith himself had founded them had been tacitly renounced.

MASTERS’ COMBINATIONS FOR DEALING WITH WAGES SEEM TO HAVE BEEN RELUCTANT AND RETALIATORY UNTIL LATE IN THE NINETEENTH CENTURY

We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous,40 and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.”41 Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders.42 It is difficult at times to know what observers understood by “masters’ combination.”43 Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.”44 “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.”45 “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.”46 A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail.47 Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.”48 In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take.49 In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.”50 Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.”51 Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.”52 And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?”53 The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.”54 Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.”55 A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”56

THE QUESTION IS OF LESS SIGNIFICANCE IN MODERN TIMES

This rapid historical survey is based on a more or less arbitrary selection of opinions expressed by competent observers at different times during the last century. But again and again the writer has found evidence of the extreme reluctance with which competing interests have agreed to cooperate in their own defense and of the ephemeral nature of any associations which have thereby resulted. Since the late ’eighties other causes have led to the aggregation of capital on such a large scale that an inquiry as to whether employers’ associations are primarily bodies which take initiative in labor questions or merely retaliatory, loses its significance.

JOINT SUPPORT BY OPPOSED COMBINATIONS

The motive for these combinations of masters was probably something more than mere direct defense, the opposing of the coercive device of “the strike” by that of the “lock-out.” We have early evidence of workmen’s societies being countenanced by the masters and used as instruments against factories which were “underselling.” And we find unions claiming that their sole object was “to protect the upright manufacturer against the unfair competition of the avaricious one, and to secure a fair remuneration for labour.”57 But this very important phenomenon can be best discussed at a later stage.

“TACIT COMBINATION” BY MASTERS

Let us turn now to the rather vaguer but frequently quoted suggestion of Adam Smith’s, that the employers were everywhere in a tacit but uniform combination to keep down wages. This has probably been more frequently quoted because, in its vagueness, it is more difficult to refute. It is quite understandable that in the time of Adam Smith masters had a kind of conception of the wages of a laborer as something definite, fixed and natural. Wages then varied slowly, and any master would naturally resent having to pay more than he had been accustomed to; but this would not prevent wages from rising. If there had been a tendency for wages to rise, it is quite certain that masters would have compared notes on meeting one another and complained of the iniquity of it. They would have done all in their power to avoid paying more; but the point is, could they have succeeded in keeping wages stationary? Pepys recorded how he paid his first maid three pounds a year and her clothes. A new cook who came later demanded four pounds, and he wrote: “. . . the first time I ever did give so much.” Later still he wrote: “Wages are very considerable; a fat Welsh girl who has just come out of the country, scarce understood a word of English, capable of nothing but washing, scouring and sweeping the rooms . . . (received) six guineas a year, besides a guinea for her tea” (Pepys’ Diary). And Defoe in 1725 deplored the fact that “women servants are now so scarce that . . . their wages are of late increased to six, seven, nay eight pounds per annum and upwards. . . . But the greatest abuse of all is that these creatures are become their own lawgivers; they hire themselves to you by their own will. That is, a month’s wages or a month’s warning” (Everybody’s Business, Nobody’s Business). However, the indignation and disgust of these gentlemen did not enable them to escape paying the higher wages caused by the scarcity; and we have no reason to suppose that they acted any differently from other masters of their day. It was the very futility of such “tacit combinations” which led to the seventeenth-century attempts to get the Justices to force maids into service and to assess their wages.58 And the same thing applies to the alleged tacit combination on the part of the farmers. The typical farmer is still notoriously stupid over the matter of wages—constantly complaining of the shortage of labor, and when asked why he does not offer higher wages, indignantly replying that laborers ought to be only too grateful to get work at the wage he is offering. But this spirit does not lower the price of labor: it simply results in the farmer’s demand being some-what less than it might otherwise be, for the shortage of which he complains remains. If he prefers that “shortage” to raising wages, presumably the existing rate is the economic one. Ultimately, all the dictum about a tacit combination comes to is that masters will not pay more than they believe to be necessary to get the labor they desire; and this does not operate solely on the employers’ side. Laborers similarly will not offer to work for less than they believe they can get: the “Clay-Martin” Report of the South African Economic and Wage Commission 1925 alleges a tacit combination on the part of natives not to accept less than a certain rate of wages. This merely means that they know what they can get; the phrase simply sums up a typical attitude of mind, an attitude which may perhaps help to maintain stability or may act as an unavailing resistance to necessary change.59

THE MASTERS’ NECESSITIES “NOT SO IMMEDIATE”

If the “tacit combination” theory exercised much influence because of its vagueness, still more does this seem to be the case with the third idea which we have seen sprang from the Wealth of Nations. To Adam Smith the masters had the advantage because their necessity for the men was “not so immediate” as that of the men for them, for while the master could subsist for a long time upon stocks acquired, many men “could not exist for a week, few could subsist a month, and scarce any a year without employment.” Although writing in the eighteenth century he put it much more mildly than many modern writers, who talk as though any unemployed worker is faced with immediate starvation. We must remember, however, that this idea was held by Smith as a sort of appurtenance to and amplification of his subsistence theory which, as has already been shown, was quite erroneous and, moreover, apparently given up by himself. The theory was kept alive in a general way by the Socialists, whose “exploitation theory” may have been the source from which the idea was so strongly reinforced in the late ’sixties. “Who so blind,” said Louis Blanc, “as not to see that, under its domination (competition), the continuous fall of wages, far from being exceptional, is necessarily universal.” Many of the economists who condemned the exploitation theory put forward, nevertheless, the rather milder theory of “the employers’ advantage”; and it appears as if they were not uninfluenced by it. The theory of the employers’ advantage causes the worker, as one writer put it, to visualize the capitalist as a “Gulliver of labour, only to be mastered by the united efforts of Lilliputian numbers.”60 It is surprising that the idea obtained such a wide acceptance. Appeal to facts could have given little support to it. “Nine-tenths of the cotton-workers,” said Tufnell, criticizing the theory, “never think of forming Unions, and the alleged advantage has never been taken of them.”61 Said another writer: To tell a “baffled contractor” wanting to get labor that “nothing but a close combination” can give workers “even a chance of successfully contending with employers must sound in his ears like dismal mockery.”62 And in the words of yet another critic: “The labourer . . . is at no disadvantage in bargaining with the employer, who is tied to his machines, which he must keep fully employed, or perish financially.”63 In the writings of Thornton and the other authors of the late ’sixties mentioned above, attempts to justify or rationalize the theory took various forms, only some of which is it worth while examining. As has been suggested, these attempts appear to be little more than inventions of vague phrases, which, if conveying a clear meaning to some economists, have served as mere catchwords and substitutes for thinking by others.

“ON TERMS OF EQUALITY”

One of the most common is that combination puts the worker “on terms of equality” or “on an equal footing” with the employer; it gives him “equality of bargaining strength.”64 Can we give any definite meaning to this term “equality”? Thornton tried to. He took an example of a product created by the joint contributions of one worker and one employer and assumed that if they were on “an equal footing” the product would be divided equally between them. This is so absurd that one wonders that he ever allowed it to get into print, but it gave him an opportunity of himself criticizing the vague phrases used by others. He thought that he had dealt with it satisfactorily merely by contradicting it. “Nothing is easier than to show,” he added, “that if labourers were really on the same footing as their employers, the equality between them would after all be but a sham and a cloak for the extremest inequality.”65

THE WORKER “HAS NO RESERVE”

The idea is made a little more explicit when it is developed into the theory that the worker is at a disadvantage because he has no reserve. The derivation from Adam Smith is obvious. The capitalist “has the advantage of past accumulations in striking his bargain” runs the formula; he can “discharge a single workman with comparatively slight inconvenience, while the workman loses the whole means of subsistence.”66 The employer, it is held, “can generally wait longer for labour than labourers can wait for wages. . . . This is why the price of labour is generally so much depressed.”67

EXAGGERATIONS AND CONFUSIONS INTRODUCED BY THESE IDEAS

Without the subsistence theory to rest upon such conceptions appear to be the emptiest of sophisms. Sometimes Smith’s moderate dictum about the relative urgencies of the master’s and workman’s necessities is exaggerated into the statement that the latter must take whatever the employer offers or starve. Thornton, trying to justify this view, was led into the wildest exaggerations. He contended first that the individual laborer could not “carry his labour to a better market or spare the time to go elsewhere,” a contention that the slightest examination of the labor mobility of his day would have upset; and to this argument he added, that savings would avail him little.68 Possibly, he had noticed that workers with savings were getting no more wages for the same work than those without, but with this admission what becomes of the “labourer has no reserve” theory? We are forced to the conclusion that there is some distinction between collective saving by the union and individual saving, or that individual reserve funds are no reserves at all. If this is the case, Thornton’s attempted expansion and generalization of the particular theory also falls to the ground. “Price,” he said, “in any particular instance will be greater or less according as it is the buyer or seller who is best in a position to take advantage of the other’s necessities.”69 But the only explicit meaning given for “necessities” is lack of a reserve, so that if savings “avail little” the whole idea is meaningless. If the argument had been that poverty acted as a restriction on the mobility of the laborer, and so prevented him from selling his services in the most profitable market, it would have appeared more plausible. There is a suspicion of this idea in the passage just quoted, but it is confused with the “reserve fund” idea, and suggests that the disadvantage arising from lack of mobility can be overcome without restoring mobility. Surely the plain truth is that we can make no useful generalizations on this matter at all. It might be argued with equal justification that the worker without savings has an advantage over the worker with savings because he has nothing to lose.

THE “DEPENDENCE” AND “INSECURITY” OF THE WORKER

Most writers who use these ideas are less explicit than Thornton, and so less easy to criticize. With some, the worker’s disadvantage seems to be implicit in the relationship of “employer and employed” (as it is called), and the alleged “dependence” of the worker resulting therefrom. The phrase “employer and employed” is in itself greatly misleading, for the ultimate employers of labor are the consumers, and it is on their demand that the workers are dependent.70 The development of this relationship did not bring, however, any obvious new disadvantages. On the contrary, the security of the working class was greatly increased. The Edinburgh Review in 1837 could speak about “the comparatively perfect security of the working classes in later times”; and Nicholson could point out, towards the end of the century, that “the wage-earners of this country as a whole . . . have a much more stable income than the mass of peasant proprietors in other countries; the yield to labour on the large system of industry is much more certain than the yield to land of the petite culture.”71 There is no reason for supposing that the relationship of the wage-earner to society is less stable than that of the poor proprietor.

CONTRADICTION OF THESE IDEAS BY “THE PIN MONEY” ARGUMENT

It is enlightening to oppose to these arguments another one, curiously enough often naively used by the same writers, which completely contradicts them. It argues that the possession of a reserve, or the relative absence of necessities (i.e., a lower conventional standard of life), far from causing higher wages to come to the possessor, leads to lower wages. In one of its forms it is sometimes called “the pin money” argument. The contention is that those who have some other source of income or some alternative income can, on this account, have their wages forced down. In another of its forms it might be called “the standard of living theory of wages.” The suggestion is that a certain body of workers (usually alien immigrants or non-white residents among European peoples), on account of their being accustomed to a lower standard of living, find themselves earning lower wages. They get less, it is said, because they have fewer requirements. According to the particular sentiment attaching to the people concerned, we are either told that they are “exploited” or that they are themselves the evil party in persisting in undercutting. But the economics of the phenomenon are wholly explicable in terms of the effect of the characteristics of the workers upon their supply.

LABOR SOLD “WITHOUT RESERVE”

Thornton put forward also a rather different form of the conception of the laborer’s lack of a reserve. He declared that the price of labor was determined on different principles from that of other commodities because it was “sold without reserve.” “Isolated labour,” he said, “is almost always sold without reserve, whereas tangible commodities are scarcely ever so sold.” How is it that high prices are secured? “Plainly, by not selling unreservedly.” That is true enough if it merely means that some part of the supply is held back; but as will be seen when we come to the form of the theory which says that “labor is perishable,” the phrase is probably based on fallacious reasoning. Even Mill, who showered extravagant praise on Thornton’s book, pointed out that “reserving a price is, to all intents and purposes, withdrawing supply.”72 The most careful analysis does not reveal that it means anything more than that uncombined labor cannot exploit monopoly power. Quite often this is clearly all that is meant when it is said that the workers are “at the employers’ mercy.” For example, the executive of an American trade union declares that if skilled work could be obtained without the necessity of years of experience, “any craft would be thrown open to the competition of an almost unlimited labour supply; and the craftsmen in it would be practically at the mercy of the employer.”73

LABOR IS “A PERISHABLE COMMODITY”

Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came.74 Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,”75 and partly upon a contention that the buyer of labor was in precisely the same position.76 “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.”77 By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.”78 One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.”79 Probably through his influence the idea has become sanctified in current economic jargon;80 thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.”81 He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”82

THE SURVIVAL OF THE “SUBSISTENCE THEORY”

The persistence of all these theories seems to be in part due to the survival of the subsistence theory superstition, the idea that wages tend “naturally” or through competition to fall to “the lowest point” or “a minimum,” although as we have seen, Adam Smith gave no logical explanation for the belief, but merely assumed that because wages could not be below that level they could not be above. Thornton and Mill, we have seen, were influenced by it. Even Walker was led by a similar kind of belief to justify unionism. He argued first that imperfect competition, which operated against the worker, might lead to a disadvantageous bargain in the first place and that the low wage resulting would become perpetuated through consequent inefficiency. In such circumstances, he said, there was no “tendency in any economical forces to repair the mischief.” After an illustration of how this worked he brought in a theory of a different kind. Not only was there no tendency in purely economic forces to right the evil, but they themselves tended to perpetuate it. “Such disasters aside,” he said (referring to his illustration), “the tendency of purely economical forces is continually to aggravate the disadvantages from which any person or class may suffer. . . . Every gain which one party makes at the expense of another, provides the thews and sinews of war for further aggressions.”83 Yet, like other economists, Walker probably had misgivings on this subject, as evidenced by his reversing the apparent original meaning of the passage last quoted in the otherwise identical passage in his Political Economy, published later. He inserted the words: “under impaired competition,” which considerably weakened the suggestion that purely economic forces tend to perpetuate rather than to counteract the results of originally disadvantageous bargains.84 Out-side the ranks of the more orthodox economists we find a host of prolific writers who have blamed competition itself rather than its impairment, for “the tendency of wages to a minimum.” The idea probably found its crudest expression in the writings of Charles Kingsley and the Christian Socialists, and undoubtedly exercised a great deal of influence through the anti-sweating movements. It has received lengthy and deliberate treatment in the Webbs’ Industrial Democracy, and is one of the main bases of their advocacy of unionism. Marshall’s treatment of the idea certainly did not give authority to the view that “economic forces” or competition tended to depress the worker, but it was similar to Walker’s in holding that the disadvantageous position of the worker was cumulative. “It lowers his wages,” he wrote, “and as we have seen, this lowers his efficiency as a worker, and thereby lowers the normal value of his labour.”85 This amounts to saying that there is a dynamic force tending to cause wages to fall through the decreased efficiency of labor. Views of this sort are popular, but are usually accepted very uncritically. Economists have always noticed that where the standard of living is low there is low efficiency; and there is no doubt that a low standard of living is often an important factor causing that low efficiency; but this does not in itself allow that there is a dynamic tendency downwards. Surely this generalization puts the cart before the horse. In so far as low wages are due to inefficiency, from whatever cause, the right thing to do is to tackle that inefficiency directly. Interference with the price mechanism seems to be the very worst way of trying to deal with it. There is, however, no theoretical solution to this particular question—it must be answered by appeal to experience; and yet, if there were anything in the idea, would not employers have discovered it? Few of them are unaware of the effect on efficiency of the stimulus of piece work, of making increased income the certain reward of improved efficiency. May not their general doubt that increased reward will automatically bring greater efficiency be due to the simple fact that in general it does not?

______________

86. This is the only sensible way of referring to Lord Passfield and Mrs. Webb. No disrespect is intended. It is the penalty of their greatness.

87. Economics for the General Reader, p. 313.

88. The Wages Question, p. 144.

89. Mathematical Psychics, p. 45.

90. Economic Journal, 1892, p. 14.

91. Leslie had read Longe, some articles by Thornton and Jenkin, and Jacob Waley’s paper (referred to later).

92. Treatise on Wages, p. 79.

93. Economic Position of the British Labourer, 1865, p. 173.

94. Principles, Chap. X.

95. Criticism of the Theory of Trade Unionism, 1891, p. 24.

96. Quoted by Crook, German Wage Theories, p. 28.

97. In an earlier draft of part of this essay, circulated to a number of friends, I wrongly included C. Morrison as a wage-fund economist accepting the doctrine of “labor’s disadvantage.”–W. H. H.

98. E.g. “Articles of the West Riding Fancy Union. . . . 1824.” Quoted in Report of the Select Committee on the Combination Laws, 1825, p. 27. Cf. a London Trades Committee report in 1838 (p. 5), in the Place Add. MSS. 27835:104.

99. E.g. See Place Add. MSS. 27803:294, 347, 478, 516.

100. T. J. Dunning, Trade Unions and Strikes, 1859, pp. 4-5.

101. A recent writer puts the date of the change in the attitude of unionism in the ‘nineties. Hitherto, “. . . it had taken for rgranted the current doctrines of ‘the wages fund,’ ‘the law of supply and demand’ and so forth.” (Rayner, The Story of Trade Unionism, p. 63).

102. Q. 1956.

103. Rep. of the Nat. Assn. for the From, of Social Science, i860.

104. The recent publication of Cannan’s Review of Economic Theory provides an exception to this statement.

105. Theories of Production and Distribution, Third Edn., p. 404.

106. Op. cit., p. 404.

107. According to Menger. It has been disputed by Dr. Bonar among others.

108. Labour Rewarded, 1827, p. 75.

109. Ibid., pp. 76-77.

110. Ibid., p. 81.

111. Fortnightly Review, 1869.

112. Fleeming Jenkin, “Trade Unions,” in North British Review, 1868. Reprinted in his Collected Papers. Compare Webb, History, p. 296.

113. Stirling, “Mr. Mill on Trades Unions” in Recess Studies, 1870, p. 330.

114. Cree, op. cit., p. 28.

115. Cf. Ryan, The Irish Labour Movement, pp. 89, 90.

116. Combinations Defended, 1839, p. 42.

117. Contemporary Review, 1892.

118. The Great Dock Strike, 1890.

119. C. M. Lloyd, Trade Unionism, p. 4.

120. Cannan, Economist’s Protests, p. 422.

121. Ibid., p. 423.

122. Wealth of Nations, Book I, Chap. VIII,

123. See Cannan, Theories . . ., op. cit., p. 235.

124. Ibid., p. 237.

125. Econ, Jour. History Supp., 1927, p. 214.

126. Character, Objects and Effects of Trade Unionism, 1834, p. 09. Tufnell is criticizing the phrase about “tacit combination,” but he undoubtedly had formal combinations in mind.

127. A great deal of further evidence could be brought forward to support this point, but an adequate analysis of it would necessitate lengthy treatment. (The Select Committee on Artisans and Machinery 1824; the Select Committee on the Combination Laws of 1825; and the Place Collection contain a large store of evidence on the point.)

128. There is no suggestion, of course, that the accounts of capitalist combination in the eighteenth and nineteenth centuries in Levy’s Monopolies, Trusts and Cartells and other works are in any way misleading.

129. Stirling, Trade Unionism. Reprint from Second Edn. (1869), 1889, p. 40.

130. Buchanan’s Editorial note to the Wealth of Nations, Vol. I, p. 210.

131. Wealth of Nations, Vol. I, pp. 206-7, note.

132. Tufnell, Character . . . etc., pp. 101-2.

133. Science of Social Opulence, p. 404.

134. On the Relations of Labour and Capital, 1854, pp. 98-99.

135. Refutation of the Wages Fund Theory.

136. On Labour, Second Edn., 1870, p. 271.

137. Samuelson, Friendly Hints to Trade Unionists, 1867.

138. Capital and Labour, 1867. By a Member of the Manchester Chamber of Commerce.

139. Commerce and Industry, p. 333.

140. H. H. Champion, in The Nineteenth Century, Feb. 1891.

141. Econ. Jour., 1891, p. 716.

142. John Wade, History of the Middle and Working Classes, 1833, p. 284.

143. E.g. See Brown, Bland & Tawney, Select Documents . . ., pp. 360, 361.

144. There is no suggestion, of course, that the psychological phenomenon of a group of competitors tacitly endeavoring “not to spoil” a buying or selling market (in a time of change) does not exist.

145. Stirling, “Mr. Mill on Trades Unions,” in Recess Studies, 1870, p. 317.

146. Character. . . etc., op. cit., p. 96.

147. Stirling, op. cit., p. 319.

148. Cree, op. cit., p. 20.

149. The use of the terms “strong” and “weak” in economic literature was criticized by Pantaleoni in the Economic Journal, 1898, p. 193.

150. Thornton, op. cit., p. 192.

151. “Committee on Trade Societies of the Nat. Assn. for the Prom, of Soc. Sci.” in Transactions, 1860.

152. Thornton, op. cit., p. 175.

153. Ibid., p. 102.

154. Ibid., p. 143.

155. See Cannan, Review of Economic Theory, pp. 433-443.

156. Econ. Jour., 1892, p. 482.

157. Fortnightly Review, 1869.

158. Quoted in L. C. Marshall, Industrial Society, p. 562.

159. Cairnes criticized the theory privately to Thornton.

160. The Wages Question, 1876, p. 292.

161. Ibid., p. 294.

162. Econ. Jour., 1892, p. 480.

163. Pierson, Principles, Vol. I, p. 270.

164. Marshall, Principles, Third Edn., p. 647.

165. The extent of the hold which this idea possesses is seen in the erroneous attributing of the phrase: that “a strike fund would make labour less perishable, and therefore, as far as bargaining strength was concerned, more on a par with capital,” to a workman in 1831. See the Economic History Supplement of the Economic Journal, No. 3, p. 388. The passage in the Cambrian (1st October, 1831) on which the above words are based reads as follows: “. . . that if they had been associated with the clubs in time past, they might have opposed a reduction in wages and obtained relief if the attempts to reduce (wages) had been persisted in.”

166. Hawtrey, The Economic Problem, p. 29.

167. Mr. Hawtrey’s discussion involves a point about the worker’s disadvantage in not being “a specialist in the art of selling,” and the phrase “properly approached” may have had the whole of this idea in mind. In essence, however, the argument appears to be the same as that which Pierson criticized.

168. The Wages Question, pp. 165-166.

169. The revised passage reads: “Irrespective of anything catastrophic, the tendency of purely economic forces, under impaired competition, is continually to aggravate the disadvantages, etc.” (Politicai Economy, Third Edition, p. 265.)

170. Marshall, Principles, Third Edn., p. 649.

• 1. This is the only sensible way of referring to Lord Passfield and Mrs. Webb. No disrespect is intended. It is the penalty of their greatness.
• 2. Economics for the General Reader, p. 313.
• 3. The Wages Question, p. 144.
• 4. Mathematical Psychics, p. 45.
• 5. Economic Journal, 1892, p. 14.
• 6. Leslie had read Longe, some articles by Thornton and Jenkin, and Jacob Waley’s paper (referred to later).
• 7. Treatise on Wages, p. 79.
• 8. Economic Position of the British Labourer, 1865, p. 173.
• 9. Principles, Chap. X.
• 10. Criticism of the Theory of Trade Unionism, 1891, p. 24.
• 11. Quoted by Crook, German Wage Theories, p. 28.
• 12. In an earlier draft of part of this essay, circulated to a number of friends, I wrongly included C. Morrison as a wage-fund economist accepting the doctrine of “labor’s disadvantage.”–W. H. H.
• 13. E.g. “Articles of the West Riding Fancy Union. . . . 1824.” Quoted in Report of the Select Committee on the Combination Laws, 1825, p. 27. Cf. a London Trades Committee report in 1838 (p. 5), in the Place Add. MSS. 27835:104.
• 14. E.g. See Place Add. MSS. 27803:294, 347, 478, 516.
• 15. T. J. Dunning, Trade Unions and Strikes, 1859, pp. 4-5.
• 16. A recent writer puts the date of the change in the attitude of unionism in the ‘nineties. Hitherto, “. . . it had taken for rgranted the current doctrines of ‘the wages fund,’ ‘the law of supply and demand’ and so forth.” (Rayner, The Story of Trade Unionism, p. 63).
• 17. Q. 1956.
• 18. Rep. of the Nat. Assn. for the From, of Social Science, i860.
• 19. The recent publication of Cannan’s Review of Economic Theory provides an exception to this statement.
• 20. Theories of Production and Distribution, Third Edn., p. 404.
• 21. Op. cit., p. 404.
• 22. According to Menger. It has been disputed by Dr. Bonar among others.
• 23. Labour Rewarded, 1827, p. 75.
• 24. Ibid., pp. 76-77.
• 25. Ibid., p. 81.
• 26. Fortnightly Review, 1869.
• 27. Fleeming Jenkin, “Trade Unions,” in North British Review, 1868. Reprinted in his Collected Papers. Compare Webb, History, p. 296.
• 28. Stirling, “Mr. Mill on Trades Unions” in Recess Studies, 1870, p. 330.
• 29. Cree, op. cit., p. 28.
• 30. Cf. Ryan, The Irish Labour Movement, pp. 89, 90.
• 31. Combinations Defended, 1839, p. 42.
• 32. Contemporary Review, 1892.
• 33. The Great Dock Strike, 1890.
• 34. C. M. Lloyd, Trade Unionism, p. 4.
• 35. Cannan, Economist’s Protests, p. 422.
• 36. Ibid., p. 423.
• 37. Wealth of Nations, Book I, Chap. VIII,
• 38. See Cannan, Theories . . ., op. cit., p. 235.
• 39. Ibid., p. 237.
• 40. Econ, Jour. History Supp., 1927, p. 214.
• 41. Character, Objects and Effects of Trade Unionism, 1834, p. 09. Tufnell is criticizing the phrase about “tacit combination,” but he undoubtedly had formal combinations in mind.
• 42. A great deal of further evidence could be brought forward to support this point, but an adequate analysis of it would necessitate lengthy treatment. (The Select Committee on Artisans and Machinery 1824; the Select Committee on the Combination Laws of 1825; and the Place Collection contain a large store of evidence on the point.)
• 43. There is no suggestion, of course, that the accounts of capitalist combination in the eighteenth and nineteenth centuries in Levy’s Monopolies, Trusts and Cartells and other works are in any way misleading.
• 44. Stirling, Trade Unionism. Reprint from Second Edn. (1869), 1889, p. 40.
• 45. Buchanan’s Editorial note to the Wealth of Nations, Vol. I, p. 210.
• 46. Wealth of Nations, Vol. I, pp. 206-7, note.
• 47. Tufnell, Character . . . etc., pp. 101-2.
• 48. Science of Social Opulence, p. 404.
• 49. On the Relations of Labour and Capital, 1854, pp. 98-99.
• 50. Refutation of the Wages Fund Theory.
• 51. On Labour, Second Edn., 1870, p. 271.
• 52. Samuelson, Friendly Hints to Trade Unionists, 1867.
• 53. Capital and Labour, 1867. By a Member of the Manchester Chamber of Commerce.
• 54. Commerce and Industry, p. 333.
• 55. H. H. Champion, in The Nineteenth Century, Feb. 1891.
• 56. Econ. Jour., 1891, p. 716.
• 57. John Wade, History of the Middle and Working Classes, 1833, p. 284.
• 58. E.g. See Brown, Bland & Tawney, Select Documents . . ., pp. 360, 361.
• 59. There is no suggestion, of course, that the psychological phenomenon of a group of competitors tacitly endeavoring “not to spoil” a buying or selling market (in a time of change) does not exist.
• 60. Stirling, “Mr. Mill on Trades Unions,” in Recess Studies, 1870, p. 317.
• 61. Character. . . etc., op. cit., p. 96.
• 62. Stirling, op. cit., p. 319.
• 63. Cree, op. cit., p. 20.
• 64. The use of the terms “strong” and “weak” in economic literature was criticized by Pantaleoni in the Economic Journal, 1898, p. 193.
• 65. Thornton, op. cit., p. 192.
• 66. “Committee on Trade Societies of the Nat. Assn. for the Prom, of Soc. Sci.” in Transactions, 1860.
• 67. Thornton, op. cit., p. 175.
• 68. Ibid., p. 102.
• 69. Ibid., p. 143.
• 70. See Cannan, Review of Economic Theory, pp. 433-443.
• 71. Econ. Jour., 1892, p. 482.
• 72. Fortnightly Review, 1869.
• 73. Quoted in L. C. Marshall, Industrial Society, p. 562.
• 74. Cairnes criticized the theory privately to Thornton.
• 75. The Wages Question, 1876, p. 292.
• 76. Ibid., p. 294.
• 77. Econ. Jour., 1892, p. 480.
• 78. Pierson, Principles, Vol. I, p. 270.
• 79. Marshall, Principles, Third Edn., p. 647.
• 80. The extent of the hold which this idea possesses is seen in the erroneous attributing of the phrase: that “a strike fund would make labour less perishable, and therefore, as far as bargaining strength was concerned, more on a par with capital,” to a workman in 1831. See the Economic History Supplement of the Economic Journal, No. 3, p. 388. The passage in the Cambrian (1st October, 1831) on which the above words are based reads as follows: “. . . that if they had been associated with the clubs in time past, they might have opposed a reduction in wages and obtained relief if the attempts to reduce (wages) had been persisted in.”
• 81. Hawtrey, The Economic Problem, p. 29.
• 82. Mr. Hawtrey’s discussion involves a point about the worker’s disadvantage in not being “a specialist in the art of selling,” and the phrase “properly approached” may have had the whole of this idea in mind. In essence, however, the argument appears to be the same as that which Pierson criticized.
• 83. The Wages Question, pp. 165-166.
• 84. The revised passage reads: “Irrespective of anything catastrophic, the tendency of purely economic forces, under impaired competition, is continually to aggravate the disadvantages, etc.” (Politicai Economy, Third Edition, p. 265.)
• 85. Marshall, Principles, Third Edn., p. 649.
• 86The very useful term “Collective Bargaining” was coined in 1891 by Mrs. Sidney Webb in her work on the cooperative movement. The Webbs have never given a formal definition but have used it to cover negotiations between employers and workpeople when the work-people act in concert and the employer meets “a collective will.” Collective bargaining may take place in many kinds of negotiating in concert, but it is used here to describe what is probably the most important function of trade unionism.
• 87It is commonly believed that the overthrow of the “Wage-Fund” theory was the turning-point in regard to the economist’s attitude towards trade unionism. The earlier economists, we are told, held that the level of wages depended on the proportion of the wage-fund or capital in relation to the number of workers. Trade unions could not affect the size of this fund and hence all efforts to raise the general level of wages were futile. Gains by one section of the workers could only be obtained at the expense of other sections. With the abandonment of the wage-fund error, however, and especially after Mill’s renunciation of it in 1869, this view was shown to be untenable, so we are told, and from that time the economic justification of trade unions has been complete. Professor Clay, for instance, tells us that the wage-fund theory was responsible for the belief, common in the middle class, that political economy had found trade unionism to be futile because of the theory that “if wages were fixed by the proportion between population and capital, trade unionism was futile and wicked; it could raise the wages of one section only at the expense of other sections.” Successive reiterations by leading economists have caused this belief to become firmly accepted. F. A. Walker, in 1876, declared that under the wage-fund doctrine the striking workman was regarded as “an irrational animal whose instincts, unfortunately, were not politico-economical.” Edgeworth, writing in 1881, declared that “in the matter of trade unionism . . . the untutored mind of the workman had gone more straight to the point than economic intelligence misled by a bad method.” Cunningham, in 1892 said: “Men were continually regretting the blind stupidity of working men who thought that combinations could raise wages . . . but this was a blunder. Combinations can raise wages; they have done so and may do so again.” This belief in a fundamental change having been effected by the giving up of the clumsy wage-fund theory is erroneous and misleading. The realization of the absurdities of the doctrine gave the apologists of the unions something they could attack with the full support of authority; but the productivity theory which, in various forms, arose on its ruins did not in itself contain any justification for collective bargaining. The vague phrases about the “disadvantage” of uncombined labor which constitute its modern defense have existed continuously since the days of Adam Smith.
• 88It is commonly believed that the overthrow of the “Wage-Fund” theory was the turning-point in regard to the economist’s attitude towards trade unionism. The earlier economists, we are told, held that the level of wages depended on the proportion of the wage-fund or capital in relation to the number of workers. Trade unions could not affect the size of this fund and hence all efforts to raise the general level of wages were futile. Gains by one section of the workers could only be obtained at the expense of other sections. With the abandonment of the wage-fund error, however, and especially after Mill’s renunciation of it in 1869, this view was shown to be untenable, so we are told, and from that time the economic justification of trade unions has been complete. Professor Clay, for instance, tells us that the wage-fund theory was responsible for the belief, common in the middle class, that political economy had found trade unionism to be futile because of the theory that “if wages were fixed by the proportion between population and capital, trade unionism was futile and wicked; it could raise the wages of one section only at the expense of other sections.” Successive reiterations by leading economists have caused this belief to become firmly accepted. F. A. Walker, in 1876, declared that under the wage-fund doctrine the striking workman was regarded as “an irrational animal whose instincts, unfortunately, were not politico-economical.” Edgeworth, writing in 1881, declared that “in the matter of trade unionism . . . the untutored mind of the workman had gone more straight to the point than economic intelligence misled by a bad method.” Cunningham, in 1892 said: “Men were continually regretting the blind stupidity of working men who thought that combinations could raise wages . . . but this was a blunder. Combinations can raise wages; they have done so and may do so again.” This belief in a fundamental change having been effected by the giving up of the clumsy wage-fund theory is erroneous and misleading. The realization of the absurdities of the doctrine gave the apologists of the unions something they could attack with the full support of authority; but the productivity theory which, in various forms, arose on its ruins did not in itself contain any justification for collective bargaining. The vague phrases about the “disadvantage” of uncombined labor which constitute its modern defense have existed continuously since the days of Adam Smith.
• 89It is commonly believed that the overthrow of the “Wage-Fund” theory was the turning-point in regard to the economist’s attitude towards trade unionism. The earlier economists, we are told, held that the level of wages depended on the proportion of the wage-fund or capital in relation to the number of workers. Trade unions could not affect the size of this fund and hence all efforts to raise the general level of wages were futile. Gains by one section of the workers could only be obtained at the expense of other sections. With the abandonment of the wage-fund error, however, and especially after Mill’s renunciation of it in 1869, this view was shown to be untenable, so we are told, and from that time the economic justification of trade unions has been complete. Professor Clay, for instance, tells us that the wage-fund theory was responsible for the belief, common in the middle class, that political economy had found trade unionism to be futile because of the theory that “if wages were fixed by the proportion between population and capital, trade unionism was futile and wicked; it could raise the wages of one section only at the expense of other sections.” Successive reiterations by leading economists have caused this belief to become firmly accepted. F. A. Walker, in 1876, declared that under the wage-fund doctrine the striking workman was regarded as “an irrational animal whose instincts, unfortunately, were not politico-economical.” Edgeworth, writing in 1881, declared that “in the matter of trade unionism . . . the untutored mind of the workman had gone more straight to the point than economic intelligence misled by a bad method.” Cunningham, in 1892 said: “Men were continually regretting the blind stupidity of working men who thought that combinations could raise wages . . . but this was a blunder. Combinations can raise wages; they have done so and may do so again.” This belief in a fundamental change having been effected by the giving up of the clumsy wage-fund theory is erroneous and misleading. The realization of the absurdities of the doctrine gave the apologists of the unions something they could attack with the full support of authority; but the productivity theory which, in various forms, arose on its ruins did not in itself contain any justification for collective bargaining. The vague phrases about the “disadvantage” of uncombined labor which constitute its modern defense have existed continuously since the days of Adam Smith.
• 90It is commonly believed that the overthrow of the “Wage-Fund” theory was the turning-point in regard to the economist’s attitude towards trade unionism. The earlier economists, we are told, held that the level of wages depended on the proportion of the wage-fund or capital in relation to the number of workers. Trade unions could not affect the size of this fund and hence all efforts to raise the general level of wages were futile. Gains by one section of the workers could only be obtained at the expense of other sections. With the abandonment of the wage-fund error, however, and especially after Mill’s renunciation of it in 1869, this view was shown to be untenable, so we are told, and from that time the economic justification of trade unions has been complete. Professor Clay, for instance, tells us that the wage-fund theory was responsible for the belief, common in the middle class, that political economy had found trade unionism to be futile because of the theory that “if wages were fixed by the proportion between population and capital, trade unionism was futile and wicked; it could raise the wages of one section only at the expense of other sections.” Successive reiterations by leading economists have caused this belief to become firmly accepted. F. A. Walker, in 1876, declared that under the wage-fund doctrine the striking workman was regarded as “an irrational animal whose instincts, unfortunately, were not politico-economical.” Edgeworth, writing in 1881, declared that “in the matter of trade unionism . . . the untutored mind of the workman had gone more straight to the point than economic intelligence misled by a bad method.” Cunningham, in 1892 said: “Men were continually regretting the blind stupidity of working men who thought that combinations could raise wages . . . but this was a blunder. Combinations can raise wages; they have done so and may do so again.” This belief in a fundamental change having been effected by the giving up of the clumsy wage-fund theory is erroneous and misleading. The realization of the absurdities of the doctrine gave the apologists of the unions something they could attack with the full support of authority; but the productivity theory which, in various forms, arose on its ruins did not in itself contain any justification for collective bargaining. The vague phrases about the “disadvantage” of uncombined labor which constitute its modern defense have existed continuously since the days of Adam Smith.
• 91The change of doctrine that was supposed to have taken place in the ’seventies was heralded by four mainly independent but remarkably similar defenses of workers’ combinations. The authors were: F. D. Longe, Cliffe Leslie, Fleeming Jenkin and W. T. Thornton. Three of them definitely attacked the wage-fund conception, but the principal object of all four, although Longe denied it, was the justification of unionism. These contributions all appeared during the years 1866 to 1869, and were followed in 1869 by an article from Mill (in the Fortnightly Review), who, it seems, had only read the views of his friend Thornton. It was in this article that he formally renounced the wage-fund theory and gave currency to the view that there was some way in which trade unions could gain, not at the expense of other workers but at the expense of the capitalist. An attempt to analyze separately and carefully every single theory put forward by all these writers has led to the conclusion that they consist largely in the rationalization of ideas about labor’s disadvantage in bargaining which, far from being novel, had been held continuously since the time of Adam Smith. For the rest they seem at first to contain little beyond a number of attacks on the general theory of prices based on generalizations induced from the consideration of a number of hypothetical and improbable special cases, and a number of newly coined descriptive phrases which have since served as a substitute for thought in these matters.
• 92Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 93Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 94Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 95Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 96Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 97Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 98Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 99Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 100Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 101Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 102Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 103Adam Smith, who was the first to talk about “the funds destined for the payment of labour,” held views about the laborer’s disadvantage which were not unlike those of Marshall. M‘Culloch had a typical defense of workers’ combinations. It is only when workers act, he said, “in that simultaneous manner which is equivalent to a combination . . . that it becomes the immediate interest of the masters to comply with their demand.” (Without) “an open or avowed, or (of) a tacit and real combination, workmen would not be able to obtain a rise of wages by their own exertion, but would be left to depend on the competition of their masters.” Even Fawcett, the wage-fund die-hard who, for many years after Mill, his master, had given up the theory still clung affectionately to it, held quite the usual sort of views justifying collective bargaining. “I believe it can be easily shown,” he wrote, “that the labourer is placed at a disadvantage, if he attempts simply as an individual to arrange this bargain, and I further believe that labourers must show that they have the power of combining, in order at all times to be able to sell their labour on the best possible terms.” The ultimate defense of unionism in Mill’s 1869 article—the bold justification of monopoly—differed in no respect from the justification which he put forward in his Principles while he still believed in the wage-fund. Those excluded did not suffer for their wages would, in any case, have been kept down to subsistence level. “Combinations to keep up wages,” he wrote, “are therefore not only permissible, but useful, whenever really calculated to have that effect.” On the other hand, the chief critic of the supposed new tendencies, T. S. Cree, in an essay praised but not heeded by Marshall, declared that “the correctness of the wages fund is not at all necessary for my position.” Curiously enough, the two authorities whose condemnation of unionism was almost unconditional objected also to the wage-fund conception. Mountifort Longfield’s Lectures on Political Economy, 1834, is notable chiefly for its anticipation of the productivity theory; yet its object was, to use his own words, “to show how impossible it is to regulate wages generally either by combinations of workmen, or by legislative enactments.” And Hermann in Germany blamed the wage-fund error for encouraging unionism and causing strikes “by its doctrine that the source of wages is the capital of the ‘entrepreneur.’ . . .” These facts seem to have been overlooked by the Webbs or else regarded by them as of no importance at all. For, in seventeen references to M‘Culloch and three to Fawcett in their Industrial Democracy, they make no mention of the grounds on which these economists sought to justify unionism; and they are two of the three authorities quoted in a footnote (on page 606) to support the contention that belief in the wage-fund theory as enunciated by them was the reason why public opinion “unhesitatingly refuted Trade Unionism.” In twenty-five references to Mill they do not quote the grounds on which he approved of their monopolistic policy. Neither do they notice the arguments of Mountifort Longfield, whose name appears in a footnote. And they quote a passage suggesting the wage-fund formula from Cree, but do not mention his claim that the theory was irrelevant to his criticisms. Articulate trade-union leaders accepted readily the wage-fund formula. At least two sets of trade-union rules actually quoted M‘Culloch, thousands of whose pamphlets circulated among and were approved of by working-class leaders of his day. An essay which declared the orthodox political economy of the ‘fifties to be undisputed was passed by a large union as a faithful representation of their views. Even the supposed enemies of unions had often absorbed the typical belief in their beneficence. Sheriff Alison, detested by the unions for his stern suppression of the disorders of the famous Glasgow cotton spinners’ strike of 1838, gave evidence (before the Parliamentary Enquiry on Combinations, 1838) to the effect that workmen’s combinations enabled the “members to a certain degree to compensate and to enter with equality into the lists with capital,” and by 1860, as Sir Archibald Alison, his views had not changed. “Without combinations,” he said, “competition would force wages down and workers would be reduced to the condition of serfs in Russia or the Ryots of Hindostan.”
• 104The truth is, that the theory explaining or showing the desirability of collective bargaining has always been quite independent of the wages doctrine that has existed at any time; it has been very similar in form no matter to what particular theory it has been attached; but it has always been a kind of attachment to the theory and not, as we should expect, in view of unionism being the most obvious institution forming part of the wage-determining mechanism, an integral part of it. This fact alone would suggest that nothing very important or fundamental is involved in such a theory. A few economists have ignored it altogether in a way which would suggest that they regard it as empty although they have not directly attacked it. For example, Professor Cannan writes: “Modern doctrine teaches plainly enough that combinations of earners can only raise earnings if they can raise the value or quantity of the product . . .” This clearly cuts out any theory of collective bargaining, for that is concerned with the distribution and not the size or value of the product. He adds that in practice it is shown by common observation and careful investigation that little can be done by combinations of earners unless they have power to prevent outsiders from entering the trade. All that is admitted here is that individual groups may gain at the expense of others by monopoly obtained by the device of exclusion; and that was what the earlier economists appeared, at times, to say. But does direct exclusion supply a sufficient explanation of the effect of combinations on wages? It is desirable briefly to examine this view before discussing the theories which appear to contradict it.
• 105The truth is, that the theory explaining or showing the desirability of collective bargaining has always been quite independent of the wages doctrine that has existed at any time; it has been very similar in form no matter to what particular theory it has been attached; but it has always been a kind of attachment to the theory and not, as we should expect, in view of unionism being the most obvious institution forming part of the wage-determining mechanism, an integral part of it. This fact alone would suggest that nothing very important or fundamental is involved in such a theory. A few economists have ignored it altogether in a way which would suggest that they regard it as empty although they have not directly attacked it. For example, Professor Cannan writes: “Modern doctrine teaches plainly enough that combinations of earners can only raise earnings if they can raise the value or quantity of the product . . .” This clearly cuts out any theory of collective bargaining, for that is concerned with the distribution and not the size or value of the product. He adds that in practice it is shown by common observation and careful investigation that little can be done by combinations of earners unless they have power to prevent outsiders from entering the trade. All that is admitted here is that individual groups may gain at the expense of others by monopoly obtained by the device of exclusion; and that was what the earlier economists appeared, at times, to say. But does direct exclusion supply a sufficient explanation of the effect of combinations on wages? It is desirable briefly to examine this view before discussing the theories which appear to contradict it.
• 106The truth is, that the theory explaining or showing the desirability of collective bargaining has always been quite independent of the wages doctrine that has existed at any time; it has been very similar in form no matter to what particular theory it has been attached; but it has always been a kind of attachment to the theory and not, as we should expect, in view of unionism being the most obvious institution forming part of the wage-determining mechanism, an integral part of it. This fact alone would suggest that nothing very important or fundamental is involved in such a theory. A few economists have ignored it altogether in a way which would suggest that they regard it as empty although they have not directly attacked it. For example, Professor Cannan writes: “Modern doctrine teaches plainly enough that combinations of earners can only raise earnings if they can raise the value or quantity of the product . . .” This clearly cuts out any theory of collective bargaining, for that is concerned with the distribution and not the size or value of the product. He adds that in practice it is shown by common observation and careful investigation that little can be done by combinations of earners unless they have power to prevent outsiders from entering the trade. All that is admitted here is that individual groups may gain at the expense of others by monopoly obtained by the device of exclusion; and that was what the earlier economists appeared, at times, to say. But does direct exclusion supply a sufficient explanation of the effect of combinations on wages? It is desirable briefly to examine this view before discussing the theories which appear to contradict it.
• 107We might appeal first to William Thompson. Described by Menger as “the most eminent founder of modern scientific Socialism,” the originator of the idea of “surplus value,” a friend and teacher of Robert Owen, Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were “bloody aristocracies of industry.” “The apprenticeship or excluding system,” he said, “depended on mere force and would not allow other workers to come into the market at any price.” “It matters not,” he said in 1827, “whether that force . . . be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.” They demonstrated to him “the inefficiency of force supported regulations, though backed with political power, to keep up generally throughout the country the remuneration of any species of labour; though they certainly have tended . . . to keep up the remuneration of the few within the circle of the combination.” Such gains were always “at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.” This is “the founder of scientific Socialism” speaking—not an employer. “Will they then resort to force,” he said, “law supported as to apprenticeships or illegal as to intimidation—in all cases equally hateful—to put down the competition of the great majority of the industrious and thus erect a bloody—for force will lead to blood and without blood no aristocracy can be supported—aristocracy of industry?”
• 108We might appeal first to William Thompson. Described by Menger as “the most eminent founder of modern scientific Socialism,” the originator of the idea of “surplus value,” a friend and teacher of Robert Owen, Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were “bloody aristocracies of industry.” “The apprenticeship or excluding system,” he said, “depended on mere force and would not allow other workers to come into the market at any price.” “It matters not,” he said in 1827, “whether that force . . . be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.” They demonstrated to him “the inefficiency of force supported regulations, though backed with political power, to keep up generally throughout the country the remuneration of any species of labour; though they certainly have tended . . . to keep up the remuneration of the few within the circle of the combination.” Such gains were always “at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.” This is “the founder of scientific Socialism” speaking—not an employer. “Will they then resort to force,” he said, “law supported as to apprenticeships or illegal as to intimidation—in all cases equally hateful—to put down the competition of the great majority of the industrious and thus erect a bloody—for force will lead to blood and without blood no aristocracy can be supported—aristocracy of industry?”
• 109We might appeal first to William Thompson. Described by Menger as “the most eminent founder of modern scientific Socialism,” the originator of the idea of “surplus value,” a friend and teacher of Robert Owen, Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were “bloody aristocracies of industry.” “The apprenticeship or excluding system,” he said, “depended on mere force and would not allow other workers to come into the market at any price.” “It matters not,” he said in 1827, “whether that force . . . be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.” They demonstrated to him “the inefficiency of force supported regulations, though backed with political power, to keep up generally throughout the country the remuneration of any species of labour; though they certainly have tended . . . to keep up the remuneration of the few within the circle of the combination.” Such gains were always “at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.” This is “the founder of scientific Socialism” speaking—not an employer. “Will they then resort to force,” he said, “law supported as to apprenticeships or illegal as to intimidation—in all cases equally hateful—to put down the competition of the great majority of the industrious and thus erect a bloody—for force will lead to blood and without blood no aristocracy can be supported—aristocracy of industry?”
• 110We might appeal first to William Thompson. Described by Menger as “the most eminent founder of modern scientific Socialism,” the originator of the idea of “surplus value,” a friend and teacher of Robert Owen, Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were “bloody aristocracies of industry.” “The apprenticeship or excluding system,” he said, “depended on mere force and would not allow other workers to come into the market at any price.” “It matters not,” he said in 1827, “whether that force . . . be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.” They demonstrated to him “the inefficiency of force supported regulations, though backed with political power, to keep up generally throughout the country the remuneration of any species of labour; though they certainly have tended . . . to keep up the remuneration of the few within the circle of the combination.” Such gains were always “at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.” This is “the founder of scientific Socialism” speaking—not an employer. “Will they then resort to force,” he said, “law supported as to apprenticeships or illegal as to intimidation—in all cases equally hateful—to put down the competition of the great majority of the industrious and thus erect a bloody—for force will lead to blood and without blood no aristocracy can be supported—aristocracy of industry?”
• 111The position which raised the ire of Thompson a century ago finds a close and obvious parallel in South Africa today. If he had been writing at the present day, and the South African trade unions had condescended to reply, they would probably have answered: “Those whom we exclude are, on the whole, ‘non-Europeans,’ a morally inferior class to whom we do no harm by our exclusive policy as, owing to their low standard of life, they cannot rise and can merely drag us down.” Curiously enough this was just the view of the English unions of last century towards the “knobsticks” or “scabs,” the great majority of the laboring classes who were outside the unions. Their typical attitude was well summarized by J. S. Mill in his attempted justification of enlightened unionism in 1869. Acting as the unions’ advocate he put the following words into the mouth of their witness: “Those whom we exclude are a morally inferior class of labourers to us; their labour is worthless and their want of prudence and self-restraint makes them more active in adding to the population. We do them no wrong by intrenching ourselves behind a barrier, to exclude those whose competition would bring down our wages, without more than momentarily raising theirs, but only adding to the total numbers in existence.” Apart from the Malthusian aspect, this argument seems to be a fair representation of trade-union opinion at the time Mill wrote.
• 112One may wonder why it was that the working classes in England did not protest more at such injustices. To some extent it may have been for the same reason that we get so few protests against unions from “non-Europeans” in South Africa. It often appeared as if the “knobstick” felt and believed himself to be an inferior person. Another friend and defender of the trade-union movement, writing a year before Mill in the passage just quoted, described the knobstick’s position thus: “The wretched knobstick . . . is jeered at and snubbed on all possible occasions . . . he receives none of those little aids by which the other men lighten one another’s labour . . . he is generally an inferior workman, and his work receives its full due of criticism; he is an outcast, a pariah, and fear of personal violence is not required to render this position a wretched one. Some societies will not allow him to work in the same shop with their members, even as though he tainted the air. . . . Odd as it may seem, the knobstick takes much the same view of his position; he feels himself a sneak. . . . He is unskilful, poor, weak and a traitor (for attempting to undercut); they are skilled, rich, strong and noble; yes, even when they morally kick him. . . .”
• 113Mill’s attempts to justify exclusiveness did not pass without criticism. “After all,” said Dr. Stirling, “the knobstick is not an outlaw, to be cut off from personal freedom and the protection of the law. He has his rights like his betters; and though too often treated like the leper of old, his chief offence is, after all, his poverty.” And T. S. Cree, referring to the Malthusian backing to Mill’s argument, remarked that Malthus “never proposed the destruction of the weak by the strong, in order that the latter should have more to divide.”
• 114Mill’s attempts to justify exclusiveness did not pass without criticism. “After all,” said Dr. Stirling, “the knobstick is not an outlaw, to be cut off from personal freedom and the protection of the law. He has his rights like his betters; and though too often treated like the leper of old, his chief offence is, after all, his poverty.” And T. S. Cree, referring to the Malthusian backing to Mill’s argument, remarked that Malthus “never proposed the destruction of the weak by the strong, in order that the latter should have more to divide.”
• 115Until they obtained political power the great mass of the laboring classes had few friends outside their own ranks. Apart from the fact that there were no classes below them whom they could exploit by exclusion, they could not afford the luxury of unions or any other societies; nor could they pay leaders. Organizations of laborers offered no careers to competent organizers until well on into the century when the course of economic progress had greatly increased their resources. Thus we find that the Chartist Movement, the most prominent genuine working-class movement of the earlier half of the century, received little support from the unions. Their apathy brought fierce denunciation from Feargus O’Connor. “Never,” he wrote, “was there more criminal apathy.” The denunciations of Daniel O’Connell went much deeper. He condemned in the severest language not only the existing practices of the Irish Unions but also the essential exclusiveness of all attempts at the regulation of wages by combination. The reply of the London Trades Combination Committee to O’Connell was hardly repentant.
• 116Until they obtained political power the great mass of the laboring classes had few friends outside their own ranks. Apart from the fact that there were no classes below them whom they could exploit by exclusion, they could not afford the luxury of unions or any other societies; nor could they pay leaders. Organizations of laborers offered no careers to competent organizers until well on into the century when the course of economic progress had greatly increased their resources. Thus we find that the Chartist Movement, the most prominent genuine working-class movement of the earlier half of the century, received little support from the unions. Their apathy brought fierce denunciation from Feargus O’Connor. “Never,” he wrote, “was there more criminal apathy.” The denunciations of Daniel O’Connell went much deeper. He condemned in the severest language not only the existing practices of the Irish Unions but also the essential exclusiveness of all attempts at the regulation of wages by combination. The reply of the London Trades Combination Committee to O’Connell was hardly repentant.
• 117When at length, owing to the growth in the economic and political power of the masses, unionism began to extend its ranks the hostility to the older interests was obvious. John Burns, in the ’eighties, was contemptuous of existing unions. “Mere middle and upper class rate reducing institutions,” he called them. The “Dockers’ Strike” which he organized heralded a new era which brought into trade unions workers in unskilled occupations. This led to a rapid expansion during the late ’nineties and the early part of this century, during which period the earlier tendency to hostility tended, for many reasons, to die down. Not that the opposition of interest had gone. In the ’nineties exclusiveness still had its unashamed apostles. Miss Clementina Black admitted that no doubt trade unions did “tend to make the battle of life harder for the incompetent and shiftless.” They tend, she said, “to make a boundary line on the one side of which is the well-paid man in work and the other side the absolutely unpaid man out of work.” But this, she argued, brought no real injury to the community.
• 118Nevertheless, as the proportion of organized workers grew the real antagonism between those with effective exclusive power and those without became more and more obscured. Some regarded the “New Unionism” as a movement which completely superseded the old and exclusive system. “‘The Masses’ have been as ready to group themselves in exclusive sections, according to income, as their ‘betters,’” said H. H. Champion in 1890, “and the greatest sinners in this respect have been the Trades Unionists. But of late a different feeling has arisen. . . .” Whether exclusive power or desire was checked in the ’nineties is doubtful: but it was certainly not becoming more noticeable. Occasionally, however, we still found an over-earnest or disgruntled leader refusing to deny the existence of the old antagonisms. “The exclusiveness of some of the existing unions,” said Tom Mann in 1911, “must be got rid of . . . the skilled men must throw off that silly notion of superiority. . . . That unionism whose object is to maintain a special preserve for the privileged few must disappear, for it is incompatible with the rights of workmen generally and is a menace to industrial solidarity.” In America we see the same thing. From the I.W.W. we occasionally get the same kind of protests against exclusiveness. And the French “syndicalists” have expressed themselves in almost the same words.
• 119The distinctive ideas that lie behind still-persisting theories which seek, without defending monopoly, to justify collective bargaining, originated, as has already been pointed out, with Adam Smith. They arose in connection with the subsistence theory he put forward. Mr. C. M. Lloyd, a leading advocate and historian of unionism, either does not realize this or is very ungrateful for it. “The influence of manufacturers,” he writes, “. . . bore heavily upon Parliament . . . in 1776, this influence was reinforced by Adam Smith’s Wealth of Nations, from which it appeared that the creed of unrestricted exploitation was really a new gospel for humanity.” This is a strange way of referring to one of whom it has been said: “(his) sympathies, indeed, seem to have been wholly with the industrious wage-earner, and especially with the poorest.” To suggest that Adam Smith favored low wages is entirely false. The suggestion is constantly reiterated that the classical economists generally “defended subsistence wages.” “Of all the libels upon them invented by socialist and semi-socialist writers,” says Professor Cannan, “this is about the worst. They may have been, they certainly were, wrong about the causes of high wages, but they were always in favour of them.” The real evil in the subsistence theory lay in its hopelessness, and the attitude of self-pity and dependence which it tended, right against the spirit of the age, to instil in the minds of the laboring classes. Harriett Martineau, whose views are so often misrepresented as harsh, was attacked by the Edinburgh Review for her sentimentalism. They wrote: “From a wish, we suppose, to address the men in conciliatory language, she condoles with them as a suffering race who were induced to strike by the depression of their wages to the lowest point.”
• 120The distinctive ideas that lie behind still-persisting theories which seek, without defending monopoly, to justify collective bargaining, originated, as has already been pointed out, with Adam Smith. They arose in connection with the subsistence theory he put forward. Mr. C. M. Lloyd, a leading advocate and historian of unionism, either does not realize this or is very ungrateful for it. “The influence of manufacturers,” he writes, “. . . bore heavily upon Parliament . . . in 1776, this influence was reinforced by Adam Smith’s Wealth of Nations, from which it appeared that the creed of unrestricted exploitation was really a new gospel for humanity.” This is a strange way of referring to one of whom it has been said: “(his) sympathies, indeed, seem to have been wholly with the industrious wage-earner, and especially with the poorest.” To suggest that Adam Smith favored low wages is entirely false. The suggestion is constantly reiterated that the classical economists generally “defended subsistence wages.” “Of all the libels upon them invented by socialist and semi-socialist writers,” says Professor Cannan, “this is about the worst. They may have been, they certainly were, wrong about the causes of high wages, but they were always in favour of them.” The real evil in the subsistence theory lay in its hopelessness, and the attitude of self-pity and dependence which it tended, right against the spirit of the age, to instil in the minds of the laboring classes. Harriett Martineau, whose views are so often misrepresented as harsh, was attacked by the Edinburgh Review for her sentimentalism. They wrote: “From a wish, we suppose, to address the men in conciliatory language, she condoles with them as a suffering race who were induced to strike by the depression of their wages to the lowest point.”
• 121The distinctive ideas that lie behind still-persisting theories which seek, without defending monopoly, to justify collective bargaining, originated, as has already been pointed out, with Adam Smith. They arose in connection with the subsistence theory he put forward. Mr. C. M. Lloyd, a leading advocate and historian of unionism, either does not realize this or is very ungrateful for it. “The influence of manufacturers,” he writes, “. . . bore heavily upon Parliament . . . in 1776, this influence was reinforced by Adam Smith’s Wealth of Nations, from which it appeared that the creed of unrestricted exploitation was really a new gospel for humanity.” This is a strange way of referring to one of whom it has been said: “(his) sympathies, indeed, seem to have been wholly with the industrious wage-earner, and especially with the poorest.” To suggest that Adam Smith favored low wages is entirely false. The suggestion is constantly reiterated that the classical economists generally “defended subsistence wages.” “Of all the libels upon them invented by socialist and semi-socialist writers,” says Professor Cannan, “this is about the worst. They may have been, they certainly were, wrong about the causes of high wages, but they were always in favour of them.” The real evil in the subsistence theory lay in its hopelessness, and the attitude of self-pity and dependence which it tended, right against the spirit of the age, to instil in the minds of the laboring classes. Harriett Martineau, whose views are so often misrepresented as harsh, was attacked by the Edinburgh Review for her sentimentalism. They wrote: “From a wish, we suppose, to address the men in conciliatory language, she condoles with them as a suffering race who were induced to strike by the depression of their wages to the lowest point.”
• 122Adam Smith’s views bearing on what became later the theory of collective bargaining arose then out of the subsistence theory. “Upon all ordinary occasions,” he wrote, “the masters have the advantage in the dispute,” and can force the men “into a compliance with their terms.” His explanation of this vague power can be analyzed into three separate ideas. First, there existed particular combinations of masters who agreed to force down wages to subsistence level. Second, there was “a tacit but uniform combination” among employers to keep wages down. Third, that although in the long run the workmen might be “as necessary to his master as his master is to him,” the necessity is “not so immediate.” Whereas masters, “though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired,” many workmen “could not subsist a week, few could subsist a month, and scarce any a year without employment.” These factors, he thought, accounted for the employers’ power to force wages down to the subsistence level. He seems to have assumed that how they gave the employers this remarkable power was self-evident, for no further explanation of them was given. The emptiness of the theory becomes clear when we consider the limits he assigned to the employers’ power in this respect. The limits were determined, not by the individual’s minimum requirements for survival, but by those of his family, because otherwise, said Smith, “it would be impossible for him to bring up a family, and the race of workmen could not last beyond the first generation.” But as Professor Cannan asks, if the masters have this power why should they concern themselves about the labor supply of the next generation? “Trade rings,” he says, “usually adopt the motto, ‘After us the deluge,’” and he points out that Adam Smith himself probably thought the doctrine was weak as evidenced by his dragging in an irrelevant reference to such wages being the lowest “consistent with common humanity.” Moreover, observing that in practice wages were often considerably higher than subsistence level, Smith limited the application of his theory to “ordinary occasions.”
• 123Adam Smith’s views bearing on what became later the theory of collective bargaining arose then out of the subsistence theory. “Upon all ordinary occasions,” he wrote, “the masters have the advantage in the dispute,” and can force the men “into a compliance with their terms.” His explanation of this vague power can be analyzed into three separate ideas. First, there existed particular combinations of masters who agreed to force down wages to subsistence level. Second, there was “a tacit but uniform combination” among employers to keep wages down. Third, that although in the long run the workmen might be “as necessary to his master as his master is to him,” the necessity is “not so immediate.” Whereas masters, “though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired,” many workmen “could not subsist a week, few could subsist a month, and scarce any a year without employment.” These factors, he thought, accounted for the employers’ power to force wages down to the subsistence level. He seems to have assumed that how they gave the employers this remarkable power was self-evident, for no further explanation of them was given. The emptiness of the theory becomes clear when we consider the limits he assigned to the employers’ power in this respect. The limits were determined, not by the individual’s minimum requirements for survival, but by those of his family, because otherwise, said Smith, “it would be impossible for him to bring up a family, and the race of workmen could not last beyond the first generation.” But as Professor Cannan asks, if the masters have this power why should they concern themselves about the labor supply of the next generation? “Trade rings,” he says, “usually adopt the motto, ‘After us the deluge,’” and he points out that Adam Smith himself probably thought the doctrine was weak as evidenced by his dragging in an irrelevant reference to such wages being the lowest “consistent with common humanity.” Moreover, observing that in practice wages were often considerably higher than subsistence level, Smith limited the application of his theory to “ordinary occasions.”
• 124Do the exceptional occasions help us to understand the theory? He mentioned only one exceptional occasion, and that was an “increase of revenue or stock” which would “sometimes give the labourers an advantage, and enable them to raise their wages.” They could do this because the masters would then “bid against one another in order to get workmen, and thus voluntarily break through the natural combination of masters not to raise wages.” This, he thought, would happen while expansion was in progress. Thus we arrive at the really remarkable conclusion that an increase of stock loses the masters their relative advantage, a conclusion which could be made to look like a direct contradiction to the previous contention that it was the greater stocks held by the master which gave him his advantage. The truth is that Adam Smith had really unconsciously given up his earlier theory. In Professor Cannan’s words: “The power of the masters to depress wages to the subsistence level by combination, and their ‘common humanity’ which prevents them killing the goose that laid the golden eggs, by depressing them below that level, both disappear. . . . So little room is left for the subsistence theory that Adam Smith seems, towards the end of his work, to have forgotten that he had ever held it.” But the ideas about the employer’s advantage and his power to force down wages indefinitely and the workman’s corresponding disadvantage which originated thus have persisted right through to the present day, although the basis on which Adam Smith himself had founded them had been tacitly renounced.
• 125We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 126We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 127We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 128We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 129We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 130We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 131We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 132We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 133We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 134We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 135We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 136We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 137We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 138We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 139We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 140We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 141We shall now proceed to examine the history and development of the three ideas that were connected with his statement of the subsistence theory. We shall deal first with the allegation that masters habitually formed themselves into combinations to force wages down. (The power of masters’ combinations to force down wages will be discussed at a later stage.) Some informal combinations of masters undoubtedly occasionally got together in his day; and there is no reason for believing that these combinations were anything new. More’s Utopia talks about a “conspiracy of rich men,” discussing “how to hire and abuse the work and labour of the poor for as little money as may be.” This kind of idea probably recurred from time to time right up to the time of Adam Smith. Nevertheless, his contention is misleading. Workmen’s combinations equally existed in his day, and it is a question of some importance whether masters’ combinations led to the formation of unions or whether it worked the other way. A recent article by Mrs. Dorothy George has shown that the long-held belief that the Combination Laws were used in a grossly partial way against organizations of working-men is erroneous, and it is the writer’s impression that throughout the greater part of the nineteenth century the extent of combination of capitalists for the express purpose of settling wages was negligible. Adam Smith’s contention was repeated by J. B. Say, but it did not pass without criticism. It was categorically denied in 1834, by E. C. Tufnell, a very able observer with an almost unrivalled knowledge of English industrial and labor conditions. “What may have been the case in the time of Adam Smith,” he wrote, “we have no means of ascertaining, but certainly for a long period back there is no reason to suppose such a state of things to have existed.” Right through the century we find similar denials from trustworthy observers. The Committee on Artisans and Machinery of 1824 could find only one instance of a perfect combination of masters—twelve type-founders. It is difficult at times to know what observers understood by “masters’ combination.” Certainly, however, deliberately organized bodies on the lines of the unions were almost nonexistent until late into the century. The early industrialists were imbued with a sturdy individualism that was repugnant to association. As Dr. Stirling pointed out: “The oft-quoted dictum of Adam Smith, that it is easy for a few capitalists to combine, is a grievous error . . . (they are) necessarily competitors, and therefore kept apart by natural rivalries.” “A combination of rival traders,” said Buchanan, “is a phenomenon which, until human nature is changed, will never be exhibited.” “The same principle of selfishness which prompts them to form the league, prompts them also to break it. . . . Rival traders have no confidence in each other; no two of them will ever act in concert.” A similar attitude was taken by M‘Culloch and others. Until the ’eighties this attitude was, to a superficial observer at any rate, correct. The aversion of employers to enter even into protective or defensive associations was brought out in evidence before the Trade Union Commission of 1867. That evidence suggested that the motive of employers’ associations—reluctantly entered into—was self-defense. Very early in their history, combined workers had discovered the utility, as a coercive weapon, of the device so aptly named by the Webbs, “the strike in detail.” Practically all the combinations among employers that were revealed by the inquiries in 1824 or 1825 were either retaliatory against unions exploiting “the strike in detail” or else the employers’ side of “joint monopolies” operating with the encouragement and connivance of the workers. We shall discuss the latter later on. A good example of “the strike in detail” occurred immediately after the Repeal of the Combination Laws, when the Linen Weavers of Barnsley planned to compel workers, factory by factory, to strike, selecting the order by lot. The object was to coerce employers one by one, thus enabling the strikers to be supported out of contributions from those still working for other employers. The Edinburgh Review, commenting on this device in 1838, said that those who adopted it were generally victorious, and that this caused them to acquire the habit of considering themselves irresistible. “They produce,” said the Review, “a universal conviction of the necessity of a combined resistance.” Tufnell gave a description of the reluctant formation of a masters’ association at Leeds following a strike in detail. Many trustworthy observers gave this reason for such employers’ combinations as then existed. In the middle of the century we find the same opinion held. W. L. Sargant, a student with an intimate knowledge of working-class movements, wrote in 1851: “I have shown that combinations among the men are inevitable, and where the workmen combine, masters will and must do the same.” In 1854 Morrison expressed a similar opinion and described the forms that employers’ counter-combinations could take. In the late ’sixties even trade-union advocates spoke of masters’ associations as though they were novelties. “In the last dispute in the iron trade,” said Longe, “employers taught an unruly and high-paid class of workmen the wholesome lesson that employers can combine as well as labourers.” Thornton, in a passage largely contradictory of other parts of his work, wrote: “Hitherto want of concert between individual masters has placed them at a great disadvantage as compared with the men,” and “The lock-out is never initiative—it is always retaliatory.” Another friend of the unionists was sufficiently naïve to attribute inconsistency to employers who during a strike had entered into a combination “such as they did not hesitate to stigmatise in those who were not so well educated as themselves.” And the cry of an employer of about the same time has a sincere ring. “As yet war has only been declared on one side. . . . As yet capital has been passive, but it will not remain so long; it must soon, in self-defence, combine to defeat the tyranny of labour, and who then can doubt the result?” The studies of Mr. W. Page for the period 1886 to 1890 seem to have suggested to him the same ephemeral and retaliatory character of employers’ combinations. He states quite simply: “The combination for bargaining purposes of all classes of workers necessarily resulted in a like movement among the employers.” Contemporary observers of the rapidly developing trade-union movement in the British Dominions in the early ’nineties of last century tell the same story. Referring to a great strike which had just failed owing to the employers getting together, a writer from Australia said that it proved that, “difficult as it was for employers to risk their rival interests against a common enemy, they will do so and receive public support in the most democratic countries, so long as labour makes a demand which the public holds to be arbitrary or unfair.” A New Zealand observer about the same time, writing on “Labour Troubles in New Zealand,” declared that, apart from a shipowners’ association “no other combination of employers was formed in this country until after the strike commenced. The natural conclusion is that the aggression of labour forced employers to combine in self-defence.”
• 142The motive for these combinations of masters was probably something more than mere direct defense, the opposing of the coercive device of “the strike” by that of the “lock-out.” We have early evidence of workmen’s societies being countenanced by the masters and used as instruments against factories which were “underselling.” And we find unions claiming that their sole object was “to protect the upright manufacturer against the unfair competition of the avaricious one, and to secure a fair remuneration for labour.” But this very important phenomenon can be best discussed at a later stage.
• 143Let us turn now to the rather vaguer but frequently quoted suggestion of Adam Smith’s, that the employers were everywhere in a tacit but uniform combination to keep down wages. This has probably been more frequently quoted because, in its vagueness, it is more difficult to refute. It is quite understandable that in the time of Adam Smith masters had a kind of conception of the wages of a laborer as something definite, fixed and natural. Wages then varied slowly, and any master would naturally resent having to pay more than he had been accustomed to; but this would not prevent wages from rising. If there had been a tendency for wages to rise, it is quite certain that masters would have compared notes on meeting one another and complained of the iniquity of it. They would have done all in their power to avoid paying more; but the point is, could they have succeeded in keeping wages stationary? Pepys recorded how he paid his first maid three pounds a year and her clothes. A new cook who came later demanded four pounds, and he wrote: “. . . the first time I ever did give so much.” Later still he wrote: “Wages are very considerable; a fat Welsh girl who has just come out of the country, scarce understood a word of English, capable of nothing but washing, scouring and sweeping the rooms . . . (received) six guineas a year, besides a guinea for her tea” (Pepys’ Diary). And Defoe in 1725 deplored the fact that “women servants are now so scarce that . . . their wages are of late increased to six, seven, nay eight pounds per annum and upwards. . . . But the greatest abuse of all is that these creatures are become their own lawgivers; they hire themselves to you by their own will. That is, a month’s wages or a month’s warning” (Everybody’s Business, Nobody’s Business). However, the indignation and disgust of these gentlemen did not enable them to escape paying the higher wages caused by the scarcity; and we have no reason to suppose that they acted any differently from other masters of their day. It was the very futility of such “tacit combinations” which led to the seventeenth-century attempts to get the Justices to force maids into service and to assess their wages. And the same thing applies to the alleged tacit combination on the part of the farmers. The typical farmer is still notoriously stupid over the matter of wages—constantly complaining of the shortage of labor, and when asked why he does not offer higher wages, indignantly replying that laborers ought to be only too grateful to get work at the wage he is offering. But this spirit does not lower the price of labor: it simply results in the farmer’s demand being some-what less than it might otherwise be, for the shortage of which he complains remains. If he prefers that “shortage” to raising wages, presumably the existing rate is the economic one. Ultimately, all the dictum about a tacit combination comes to is that masters will not pay more than they believe to be necessary to get the labor they desire; and this does not operate solely on the employers’ side. Laborers similarly will not offer to work for less than they believe they can get: the “Clay-Martin” Report of the South African Economic and Wage Commission 1925 alleges a tacit combination on the part of natives not to accept less than a certain rate of wages. This merely means that they know what they can get; the phrase simply sums up a typical attitude of mind, an attitude which may perhaps help to maintain stability or may act as an unavailing resistance to necessary change.
• 144Let us turn now to the rather vaguer but frequently quoted suggestion of Adam Smith’s, that the employers were everywhere in a tacit but uniform combination to keep down wages. This has probably been more frequently quoted because, in its vagueness, it is more difficult to refute. It is quite understandable that in the time of Adam Smith masters had a kind of conception of the wages of a laborer as something definite, fixed and natural. Wages then varied slowly, and any master would naturally resent having to pay more than he had been accustomed to; but this would not prevent wages from rising. If there had been a tendency for wages to rise, it is quite certain that masters would have compared notes on meeting one another and complained of the iniquity of it. They would have done all in their power to avoid paying more; but the point is, could they have succeeded in keeping wages stationary? Pepys recorded how he paid his first maid three pounds a year and her clothes. A new cook who came later demanded four pounds, and he wrote: “. . . the first time I ever did give so much.” Later still he wrote: “Wages are very considerable; a fat Welsh girl who has just come out of the country, scarce understood a word of English, capable of nothing but washing, scouring and sweeping the rooms . . . (received) six guineas a year, besides a guinea for her tea” (Pepys’ Diary). And Defoe in 1725 deplored the fact that “women servants are now so scarce that . . . their wages are of late increased to six, seven, nay eight pounds per annum and upwards. . . . But the greatest abuse of all is that these creatures are become their own lawgivers; they hire themselves to you by their own will. That is, a month’s wages or a month’s warning” (Everybody’s Business, Nobody’s Business). However, the indignation and disgust of these gentlemen did not enable them to escape paying the higher wages caused by the scarcity; and we have no reason to suppose that they acted any differently from other masters of their day. It was the very futility of such “tacit combinations” which led to the seventeenth-century attempts to get the Justices to force maids into service and to assess their wages. And the same thing applies to the alleged tacit combination on the part of the farmers. The typical farmer is still notoriously stupid over the matter of wages—constantly complaining of the shortage of labor, and when asked why he does not offer higher wages, indignantly replying that laborers ought to be only too grateful to get work at the wage he is offering. But this spirit does not lower the price of labor: it simply results in the farmer’s demand being some-what less than it might otherwise be, for the shortage of which he complains remains. If he prefers that “shortage” to raising wages, presumably the existing rate is the economic one. Ultimately, all the dictum about a tacit combination comes to is that masters will not pay more than they believe to be necessary to get the labor they desire; and this does not operate solely on the employers’ side. Laborers similarly will not offer to work for less than they believe they can get: the “Clay-Martin” Report of the South African Economic and Wage Commission 1925 alleges a tacit combination on the part of natives not to accept less than a certain rate of wages. This merely means that they know what they can get; the phrase simply sums up a typical attitude of mind, an attitude which may perhaps help to maintain stability or may act as an unavailing resistance to necessary change.
• 145If the “tacit combination” theory exercised much influence because of its vagueness, still more does this seem to be the case with the third idea which we have seen sprang from the Wealth of Nations. To Adam Smith the masters had the advantage because their necessity for the men was “not so immediate” as that of the men for them, for while the master could subsist for a long time upon stocks acquired, many men “could not exist for a week, few could subsist a month, and scarce any a year without employment.” Although writing in the eighteenth century he put it much more mildly than many modern writers, who talk as though any unemployed worker is faced with immediate starvation. We must remember, however, that this idea was held by Smith as a sort of appurtenance to and amplification of his subsistence theory which, as has already been shown, was quite erroneous and, moreover, apparently given up by himself. The theory was kept alive in a general way by the Socialists, whose “exploitation theory” may have been the source from which the idea was so strongly reinforced in the late ’sixties. “Who so blind,” said Louis Blanc, “as not to see that, under its domination (competition), the continuous fall of wages, far from being exceptional, is necessarily universal.” Many of the economists who condemned the exploitation theory put forward, nevertheless, the rather milder theory of “the employers’ advantage”; and it appears as if they were not uninfluenced by it. The theory of the employers’ advantage causes the worker, as one writer put it, to visualize the capitalist as a “Gulliver of labour, only to be mastered by the united efforts of Lilliputian numbers.” It is surprising that the idea obtained such a wide acceptance. Appeal to facts could have given little support to it. “Nine-tenths of the cotton-workers,” said Tufnell, criticizing the theory, “never think of forming Unions, and the alleged advantage has never been taken of them.” Said another writer: To tell a “baffled contractor” wanting to get labor that “nothing but a close combination” can give workers “even a chance of successfully contending with employers must sound in his ears like dismal mockery.” And in the words of yet another critic: “The labourer . . . is at no disadvantage in bargaining with the employer, who is tied to his machines, which he must keep fully employed, or perish financially.” In the writings of Thornton and the other authors of the late ’sixties mentioned above, attempts to justify or rationalize the theory took various forms, only some of which is it worth while examining. As has been suggested, these attempts appear to be little more than inventions of vague phrases, which, if conveying a clear meaning to some economists, have served as mere catchwords and substitutes for thinking by others.
• 146If the “tacit combination” theory exercised much influence because of its vagueness, still more does this seem to be the case with the third idea which we have seen sprang from the Wealth of Nations. To Adam Smith the masters had the advantage because their necessity for the men was “not so immediate” as that of the men for them, for while the master could subsist for a long time upon stocks acquired, many men “could not exist for a week, few could subsist a month, and scarce any a year without employment.” Although writing in the eighteenth century he put it much more mildly than many modern writers, who talk as though any unemployed worker is faced with immediate starvation. We must remember, however, that this idea was held by Smith as a sort of appurtenance to and amplification of his subsistence theory which, as has already been shown, was quite erroneous and, moreover, apparently given up by himself. The theory was kept alive in a general way by the Socialists, whose “exploitation theory” may have been the source from which the idea was so strongly reinforced in the late ’sixties. “Who so blind,” said Louis Blanc, “as not to see that, under its domination (competition), the continuous fall of wages, far from being exceptional, is necessarily universal.” Many of the economists who condemned the exploitation theory put forward, nevertheless, the rather milder theory of “the employers’ advantage”; and it appears as if they were not uninfluenced by it. The theory of the employers’ advantage causes the worker, as one writer put it, to visualize the capitalist as a “Gulliver of labour, only to be mastered by the united efforts of Lilliputian numbers.” It is surprising that the idea obtained such a wide acceptance. Appeal to facts could have given little support to it. “Nine-tenths of the cotton-workers,” said Tufnell, criticizing the theory, “never think of forming Unions, and the alleged advantage has never been taken of them.” Said another writer: To tell a “baffled contractor” wanting to get labor that “nothing but a close combination” can give workers “even a chance of successfully contending with employers must sound in his ears like dismal mockery.” And in the words of yet another critic: “The labourer . . . is at no disadvantage in bargaining with the employer, who is tied to his machines, which he must keep fully employed, or perish financially.” In the writings of Thornton and the other authors of the late ’sixties mentioned above, attempts to justify or rationalize the theory took various forms, only some of which is it worth while examining. As has been suggested, these attempts appear to be little more than inventions of vague phrases, which, if conveying a clear meaning to some economists, have served as mere catchwords and substitutes for thinking by others.
• 147If the “tacit combination” theory exercised much influence because of its vagueness, still more does this seem to be the case with the third idea which we have seen sprang from the Wealth of Nations. To Adam Smith the masters had the advantage because their necessity for the men was “not so immediate” as that of the men for them, for while the master could subsist for a long time upon stocks acquired, many men “could not exist for a week, few could subsist a month, and scarce any a year without employment.” Although writing in the eighteenth century he put it much more mildly than many modern writers, who talk as though any unemployed worker is faced with immediate starvation. We must remember, however, that this idea was held by Smith as a sort of appurtenance to and amplification of his subsistence theory which, as has already been shown, was quite erroneous and, moreover, apparently given up by himself. The theory was kept alive in a general way by the Socialists, whose “exploitation theory” may have been the source from which the idea was so strongly reinforced in the late ’sixties. “Who so blind,” said Louis Blanc, “as not to see that, under its domination (competition), the continuous fall of wages, far from being exceptional, is necessarily universal.” Many of the economists who condemned the exploitation theory put forward, nevertheless, the rather milder theory of “the employers’ advantage”; and it appears as if they were not uninfluenced by it. The theory of the employers’ advantage causes the worker, as one writer put it, to visualize the capitalist as a “Gulliver of labour, only to be mastered by the united efforts of Lilliputian numbers.” It is surprising that the idea obtained such a wide acceptance. Appeal to facts could have given little support to it. “Nine-tenths of the cotton-workers,” said Tufnell, criticizing the theory, “never think of forming Unions, and the alleged advantage has never been taken of them.” Said another writer: To tell a “baffled contractor” wanting to get labor that “nothing but a close combination” can give workers “even a chance of successfully contending with employers must sound in his ears like dismal mockery.” And in the words of yet another critic: “The labourer . . . is at no disadvantage in bargaining with the employer, who is tied to his machines, which he must keep fully employed, or perish financially.” In the writings of Thornton and the other authors of the late ’sixties mentioned above, attempts to justify or rationalize the theory took various forms, only some of which is it worth while examining. As has been suggested, these attempts appear to be little more than inventions of vague phrases, which, if conveying a clear meaning to some economists, have served as mere catchwords and substitutes for thinking by others.
• 148If the “tacit combination” theory exercised much influence because of its vagueness, still more does this seem to be the case with the third idea which we have seen sprang from the Wealth of Nations. To Adam Smith the masters had the advantage because their necessity for the men was “not so immediate” as that of the men for them, for while the master could subsist for a long time upon stocks acquired, many men “could not exist for a week, few could subsist a month, and scarce any a year without employment.” Although writing in the eighteenth century he put it much more mildly than many modern writers, who talk as though any unemployed worker is faced with immediate starvation. We must remember, however, that this idea was held by Smith as a sort of appurtenance to and amplification of his subsistence theory which, as has already been shown, was quite erroneous and, moreover, apparently given up by himself. The theory was kept alive in a general way by the Socialists, whose “exploitation theory” may have been the source from which the idea was so strongly reinforced in the late ’sixties. “Who so blind,” said Louis Blanc, “as not to see that, under its domination (competition), the continuous fall of wages, far from being exceptional, is necessarily universal.” Many of the economists who condemned the exploitation theory put forward, nevertheless, the rather milder theory of “the employers’ advantage”; and it appears as if they were not uninfluenced by it. The theory of the employers’ advantage causes the worker, as one writer put it, to visualize the capitalist as a “Gulliver of labour, only to be mastered by the united efforts of Lilliputian numbers.” It is surprising that the idea obtained such a wide acceptance. Appeal to facts could have given little support to it. “Nine-tenths of the cotton-workers,” said Tufnell, criticizing the theory, “never think of forming Unions, and the alleged advantage has never been taken of them.” Said another writer: To tell a “baffled contractor” wanting to get labor that “nothing but a close combination” can give workers “even a chance of successfully contending with employers must sound in his ears like dismal mockery.” And in the words of yet another critic: “The labourer . . . is at no disadvantage in bargaining with the employer, who is tied to his machines, which he must keep fully employed, or perish financially.” In the writings of Thornton and the other authors of the late ’sixties mentioned above, attempts to justify or rationalize the theory took various forms, only some of which is it worth while examining. As has been suggested, these attempts appear to be little more than inventions of vague phrases, which, if conveying a clear meaning to some economists, have served as mere catchwords and substitutes for thinking by others.
• 149One of the most common is that combination puts the worker “on terms of equality” or “on an equal footing” with the employer; it gives him “equality of bargaining strength.” Can we give any definite meaning to this term “equality”? Thornton tried to. He took an example of a product created by the joint contributions of one worker and one employer and assumed that if they were on “an equal footing” the product would be divided equally between them. This is so absurd that one wonders that he ever allowed it to get into print, but it gave him an opportunity of himself criticizing the vague phrases used by others. He thought that he had dealt with it satisfactorily merely by contradicting it. “Nothing is easier than to show,” he added, “that if labourers were really on the same footing as their employers, the equality between them would after all be but a sham and a cloak for the extremest inequality.”
• 150One of the most common is that combination puts the worker “on terms of equality” or “on an equal footing” with the employer; it gives him “equality of bargaining strength.” Can we give any definite meaning to this term “equality”? Thornton tried to. He took an example of a product created by the joint contributions of one worker and one employer and assumed that if they were on “an equal footing” the product would be divided equally between them. This is so absurd that one wonders that he ever allowed it to get into print, but it gave him an opportunity of himself criticizing the vague phrases used by others. He thought that he had dealt with it satisfactorily merely by contradicting it. “Nothing is easier than to show,” he added, “that if labourers were really on the same footing as their employers, the equality between them would after all be but a sham and a cloak for the extremest inequality.”
• 151The idea is made a little more explicit when it is developed into the theory that the worker is at a disadvantage because he has no reserve. The derivation from Adam Smith is obvious. The capitalist “has the advantage of past accumulations in striking his bargain” runs the formula; he can “discharge a single workman with comparatively slight inconvenience, while the workman loses the whole means of subsistence.” The employer, it is held, “can generally wait longer for labour than labourers can wait for wages. . . . This is why the price of labour is generally so much depressed.”
• 152The idea is made a little more explicit when it is developed into the theory that the worker is at a disadvantage because he has no reserve. The derivation from Adam Smith is obvious. The capitalist “has the advantage of past accumulations in striking his bargain” runs the formula; he can “discharge a single workman with comparatively slight inconvenience, while the workman loses the whole means of subsistence.” The employer, it is held, “can generally wait longer for labour than labourers can wait for wages. . . . This is why the price of labour is generally so much depressed.”
• 153Without the subsistence theory to rest upon such conceptions appear to be the emptiest of sophisms. Sometimes Smith’s moderate dictum about the relative urgencies of the master’s and workman’s necessities is exaggerated into the statement that the latter must take whatever the employer offers or starve. Thornton, trying to justify this view, was led into the wildest exaggerations. He contended first that the individual laborer could not “carry his labour to a better market or spare the time to go elsewhere,” a contention that the slightest examination of the labor mobility of his day would have upset; and to this argument he added, that savings would avail him little. Possibly, he had noticed that workers with savings were getting no more wages for the same work than those without, but with this admission what becomes of the “labourer has no reserve” theory? We are forced to the conclusion that there is some distinction between collective saving by the union and individual saving, or that individual reserve funds are no reserves at all. If this is the case, Thornton’s attempted expansion and generalization of the particular theory also falls to the ground. “Price,” he said, “in any particular instance will be greater or less according as it is the buyer or seller who is best in a position to take advantage of the other’s necessities.” But the only explicit meaning given for “necessities” is lack of a reserve, so that if savings “avail little” the whole idea is meaningless. If the argument had been that poverty acted as a restriction on the mobility of the laborer, and so prevented him from selling his services in the most profitable market, it would have appeared more plausible. There is a suspicion of this idea in the passage just quoted, but it is confused with the “reserve fund” idea, and suggests that the disadvantage arising from lack of mobility can be overcome without restoring mobility. Surely the plain truth is that we can make no useful generalizations on this matter at all. It might be argued with equal justification that the worker without savings has an advantage over the worker with savings because he has nothing to lose.
• 154Without the subsistence theory to rest upon such conceptions appear to be the emptiest of sophisms. Sometimes Smith’s moderate dictum about the relative urgencies of the master’s and workman’s necessities is exaggerated into the statement that the latter must take whatever the employer offers or starve. Thornton, trying to justify this view, was led into the wildest exaggerations. He contended first that the individual laborer could not “carry his labour to a better market or spare the time to go elsewhere,” a contention that the slightest examination of the labor mobility of his day would have upset; and to this argument he added, that savings would avail him little. Possibly, he had noticed that workers with savings were getting no more wages for the same work than those without, but with this admission what becomes of the “labourer has no reserve” theory? We are forced to the conclusion that there is some distinction between collective saving by the union and individual saving, or that individual reserve funds are no reserves at all. If this is the case, Thornton’s attempted expansion and generalization of the particular theory also falls to the ground. “Price,” he said, “in any particular instance will be greater or less according as it is the buyer or seller who is best in a position to take advantage of the other’s necessities.” But the only explicit meaning given for “necessities” is lack of a reserve, so that if savings “avail little” the whole idea is meaningless. If the argument had been that poverty acted as a restriction on the mobility of the laborer, and so prevented him from selling his services in the most profitable market, it would have appeared more plausible. There is a suspicion of this idea in the passage just quoted, but it is confused with the “reserve fund” idea, and suggests that the disadvantage arising from lack of mobility can be overcome without restoring mobility. Surely the plain truth is that we can make no useful generalizations on this matter at all. It might be argued with equal justification that the worker without savings has an advantage over the worker with savings because he has nothing to lose.
• 155Most writers who use these ideas are less explicit than Thornton, and so less easy to criticize. With some, the worker’s disadvantage seems to be implicit in the relationship of “employer and employed” (as it is called), and the alleged “dependence” of the worker resulting therefrom. The phrase “employer and employed” is in itself greatly misleading, for the ultimate employers of labor are the consumers, and it is on their demand that the workers are dependent. The development of this relationship did not bring, however, any obvious new disadvantages. On the contrary, the security of the working class was greatly increased. The Edinburgh Review in 1837 could speak about “the comparatively perfect security of the working classes in later times”; and Nicholson could point out, towards the end of the century, that “the wage-earners of this country as a whole . . . have a much more stable income than the mass of peasant proprietors in other countries; the yield to labour on the large system of industry is much more certain than the yield to land of the petite culture.” There is no reason for supposing that the relationship of the wage-earner to society is less stable than that of the poor proprietor.
• 156Most writers who use these ideas are less explicit than Thornton, and so less easy to criticize. With some, the worker’s disadvantage seems to be implicit in the relationship of “employer and employed” (as it is called), and the alleged “dependence” of the worker resulting therefrom. The phrase “employer and employed” is in itself greatly misleading, for the ultimate employers of labor are the consumers, and it is on their demand that the workers are dependent. The development of this relationship did not bring, however, any obvious new disadvantages. On the contrary, the security of the working class was greatly increased. The Edinburgh Review in 1837 could speak about “the comparatively perfect security of the working classes in later times”; and Nicholson could point out, towards the end of the century, that “the wage-earners of this country as a whole . . . have a much more stable income than the mass of peasant proprietors in other countries; the yield to labour on the large system of industry is much more certain than the yield to land of the petite culture.” There is no reason for supposing that the relationship of the wage-earner to society is less stable than that of the poor proprietor.
• 157Thornton put forward also a rather different form of the conception of the laborer’s lack of a reserve. He declared that the price of labor was determined on different principles from that of other commodities because it was “sold without reserve.” “Isolated labour,” he said, “is almost always sold without reserve, whereas tangible commodities are scarcely ever so sold.” How is it that high prices are secured? “Plainly, by not selling unreservedly.” That is true enough if it merely means that some part of the supply is held back; but as will be seen when we come to the form of the theory which says that “labor is perishable,” the phrase is probably based on fallacious reasoning. Even Mill, who showered extravagant praise on Thornton’s book, pointed out that “reserving a price is, to all intents and purposes, withdrawing supply.” The most careful analysis does not reveal that it means anything more than that uncombined labor cannot exploit monopoly power. Quite often this is clearly all that is meant when it is said that the workers are “at the employers’ mercy.” For example, the executive of an American trade union declares that if skilled work could be obtained without the necessity of years of experience, “any craft would be thrown open to the competition of an almost unlimited labour supply; and the craftsmen in it would be practically at the mercy of the employer.”
• 158Thornton put forward also a rather different form of the conception of the laborer’s lack of a reserve. He declared that the price of labor was determined on different principles from that of other commodities because it was “sold without reserve.” “Isolated labour,” he said, “is almost always sold without reserve, whereas tangible commodities are scarcely ever so sold.” How is it that high prices are secured? “Plainly, by not selling unreservedly.” That is true enough if it merely means that some part of the supply is held back; but as will be seen when we come to the form of the theory which says that “labor is perishable,” the phrase is probably based on fallacious reasoning. Even Mill, who showered extravagant praise on Thornton’s book, pointed out that “reserving a price is, to all intents and purposes, withdrawing supply.” The most careful analysis does not reveal that it means anything more than that uncombined labor cannot exploit monopoly power. Quite often this is clearly all that is meant when it is said that the workers are “at the employers’ mercy.” For example, the executive of an American trade union declares that if skilled work could be obtained without the necessity of years of experience, “any craft would be thrown open to the competition of an almost unlimited labour supply; and the craftsmen in it would be practically at the mercy of the employer.”
• 159Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 160Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 161Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 162Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 163Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 164Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 165Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 166Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 167Another form taken by the idea that labor is exploited because it cannot wait is that which says that labor is a perishable commodity. We have to thank or blame Thornton for this form of the idea. “Labour,” he said, “. . . will not keep.” Criticism soon came. Even General Walker, who believed that in his final overthrow of the wage-fund theory he had provided a justification of trade unionism, attacked the idea. His criticism was not altogether satisfactory. It was based partly upon a hair-splitting point about time spent in rest not resulting in waste, but in labor being “stored up,” and partly upon a contention that the buyer of labor was in precisely the same position. “If he does not buy today’s labour today,” wrote Walker, “he surely can not buy it tomorrow”; and he went on to say that with a cessation of industry the employer would become “industrially defunct” when he had eaten up his capital, whereas the laborer in “preserving his thews and sinews preserved also his stock in trade and his industrial ability.” A criticism by Nicholson in 1892 went nearer to the point. “. . . A man who cannot employ his capital,” he wrote, “loses his income as surely as a labourer out of work loses his wages. . . . If the one is perishable, so is the other. We are constantly reminded that a labourer is liable to dismissal, and thus indirectly to starvation and death. But though this may be true of a labourer it is not true of labour. To say that all the labour of a country, or even a considerable part, could be dismissed by capital, is palpably absurd.” By all odds the best criticism came from Pierson. “Thornton’s argument,” he pointed out, “is defective. The ‘keeping’ of labour—supposing it could be kept—would not diminish the supply of labour; it would simply delay it. At a given moment there would be fewer people offering to sell their labour; but their number would be all the greater later on. Organisation in a particular trade is capable of achieving its purposes, because, in a particular trade, it is capable of permanently limiting the supply of labour. But this limitation leads to an increase in the supply of labour in other trades; and if all work-people were organised, the conditions under which alone a Trade Union can exercise a permanent influence upon the rate of wages would nowhere be fulfilled.” One would have thought, after such criticism as Pierson’s, that the phrase “labor will not keep” would have disappeared for ever from the economic text-books; but it cheerfully persists. Marshall continued to explain that labor was at a disadvantage in bargaining because it was “perishable.” Probably through his influence the idea has become sanctified in current economic jargon; thousands of students have repeated it parrot-wise in examinations; and when Mr. R. G. Hawtrey in 1926 ornaments the idea with flowers and epigram we do not feel shocked. “What he withholds today,” says Mr. Hawtrey, “cannot be sold tomorrow, for labour is more perishable than cut flowers. Tomorrow, today’s labour will no longer exist.” He does not merely mean that if the laborer (from his own fault or owing to the defects of economic organization) does not work, the time he has wasted cannot be regained. He holds that because the worker cannot acquire an accumulated stock of his labor and defer selling when the market seems to require it “he is only too likely to sell his services at a price below that which the market, properly approached, might yield him.”
• 168The persistence of all these theories seems to be in part due to the survival of the subsistence theory superstition, the idea that wages tend “naturally” or through competition to fall to “the lowest point” or “a minimum,” although as we have seen, Adam Smith gave no logical explanation for the belief, but merely assumed that because wages could not be below that level they could not be above. Thornton and Mill, we have seen, were influenced by it. Even Walker was led by a similar kind of belief to justify unionism. He argued first that imperfect competition, which operated against the worker, might lead to a disadvantageous bargain in the first place and that the low wage resulting would become perpetuated through consequent inefficiency. In such circumstances, he said, there was no “tendency in any economical forces to repair the mischief.” After an illustration of how this worked he brought in a theory of a different kind. Not only was there no tendency in purely economic forces to right the evil, but they themselves tended to perpetuate it. “Such disasters aside,” he said (referring to his illustration), “the tendency of purely economical forces is continually to aggravate the disadvantages from which any person or class may suffer. . . . Every gain which one party makes at the expense of another, provides the thews and sinews of war for further aggressions.” Yet, like other economists, Walker probably had misgivings on this subject, as evidenced by his reversing the apparent original meaning of the passage last quoted in the otherwise identical passage in his Political Economy, published later. He inserted the words: “under impaired competition,” which considerably weakened the suggestion that purely economic forces tend to perpetuate rather than to counteract the results of originally disadvantageous bargains. Out-side the ranks of the more orthodox economists we find a host of prolific writers who have blamed competition itself rather than its impairment, for “the tendency of wages to a minimum.” The idea probably found its crudest expression in the writings of Charles Kingsley and the Christian Socialists, and undoubtedly exercised a great deal of influence through the anti-sweating movements. It has received lengthy and deliberate treatment in the Webbs’ Industrial Democracy, and is one of the main bases of their advocacy of unionism. Marshall’s treatment of the idea certainly did not give authority to the view that “economic forces” or competition tended to depress the worker, but it was similar to Walker’s in holding that the disadvantageous position of the worker was cumulative. “It lowers his wages,” he wrote, “and as we have seen, this lowers his efficiency as a worker, and thereby lowers the normal value of his labour.” This amounts to saying that there is a dynamic force tending to cause wages to fall through the decreased efficiency of labor. Views of this sort are popular, but are usually accepted very uncritically. Economists have always noticed that where the standard of living is low there is low efficiency; and there is no doubt that a low standard of living is often an important factor causing that low efficiency; but this does not in itself allow that there is a dynamic tendency downwards. Surely this generalization puts the cart before the horse. In so far as low wages are due to inefficiency, from whatever cause, the right thing to do is to tackle that inefficiency directly. Interference with the price mechanism seems to be the very worst way of trying to deal with it. There is, however, no theoretical solution to this particular question—it must be answered by appeal to experience; and yet, if there were anything in the idea, would not employers have discovered it? Few of them are unaware of the effect on efficiency of the stimulus of piece work, of making increased income the certain reward of improved efficiency. May not their general doubt that increased reward will automatically bring greater efficiency be due to the simple fact that in general it does not?
• 169The persistence of all these theories seems to be in part due to the survival of the subsistence theory superstition, the idea that wages tend “naturally” or through competition to fall to “the lowest point” or “a minimum,” although as we have seen, Adam Smith gave no logical explanation for the belief, but merely assumed that because wages could not be below that level they could not be above. Thornton and Mill, we have seen, were influenced by it. Even Walker was led by a similar kind of belief to justify unionism. He argued first that imperfect competition, which operated against the worker, might lead to a disadvantageous bargain in the first place and that the low wage resulting would become perpetuated through consequent inefficiency. In such circumstances, he said, there was no “tendency in any economical forces to repair the mischief.” After an illustration of how this worked he brought in a theory of a different kind. Not only was there no tendency in purely economic forces to right the evil, but they themselves tended to perpetuate it. “Such disasters aside,” he said (referring to his illustration), “the tendency of purely economical forces is continually to aggravate the disadvantages from which any person or class may suffer. . . . Every gain which one party makes at the expense of another, provides the thews and sinews of war for further aggressions.” Yet, like other economists, Walker probably had misgivings on this subject, as evidenced by his reversing the apparent original meaning of the passage last quoted in the otherwise identical passage in his Political Economy, published later. He inserted the words: “under impaired competition,” which considerably weakened the suggestion that purely economic forces tend to perpetuate rather than to counteract the results of originally disadvantageous bargains. Out-side the ranks of the more orthodox economists we find a host of prolific writers who have blamed competition itself rather than its impairment, for “the tendency of wages to a minimum.” The idea probably found its crudest expression in the writings of Charles Kingsley and the Christian Socialists, and undoubtedly exercised a great deal of influence through the anti-sweating movements. It has received lengthy and deliberate treatment in the Webbs’ Industrial Democracy, and is one of the main bases of their advocacy of unionism. Marshall’s treatment of the idea certainly did not give authority to the view that “economic forces” or competition tended to depress the worker, but it was similar to Walker’s in holding that the disadvantageous position of the worker was cumulative. “It lowers his wages,” he wrote, “and as we have seen, this lowers his efficiency as a worker, and thereby lowers the normal value of his labour.” This amounts to saying that there is a dynamic force tending to cause wages to fall through the decreased efficiency of labor. Views of this sort are popular, but are usually accepted very uncritically. Economists have always noticed that where the standard of living is low there is low efficiency; and there is no doubt that a low standard of living is often an important factor causing that low efficiency; but this does not in itself allow that there is a dynamic tendency downwards. Surely this generalization puts the cart before the horse. In so far as low wages are due to inefficiency, from whatever cause, the right thing to do is to tackle that inefficiency directly. Interference with the price mechanism seems to be the very worst way of trying to deal with it. There is, however, no theoretical solution to this particular question—it must be answered by appeal to experience; and yet, if there were anything in the idea, would not employers have discovered it? Few of them are unaware of the effect on efficiency of the stimulus of piece work, of making increased income the certain reward of improved efficiency. May not their general doubt that increased reward will automatically bring greater efficiency be due to the simple fact that in general it does not?
• 170The persistence of all these theories seems to be in part due to the survival of the subsistence theory superstition, the idea that wages tend “naturally” or through competition to fall to “the lowest point” or “a minimum,” although as we have seen, Adam Smith gave no logical explanation for the belief, but merely assumed that because wages could not be below that level they could not be above. Thornton and Mill, we have seen, were influenced by it. Even Walker was led by a similar kind of belief to justify unionism. He argued first that imperfect competition, which operated against the worker, might lead to a disadvantageous bargain in the first place and that the low wage resulting would become perpetuated through consequent inefficiency. In such circumstances, he said, there was no “tendency in any economical forces to repair the mischief.” After an illustration of how this worked he brought in a theory of a different kind. Not only was there no tendency in purely economic forces to right the evil, but they themselves tended to perpetuate it. “Such disasters aside,” he said (referring to his illustration), “the tendency of purely economical forces is continually to aggravate the disadvantages from which any person or class may suffer. . . . Every gain which one party makes at the expense of another, provides the thews and sinews of war for further aggressions.” Yet, like other economists, Walker probably had misgivings on this subject, as evidenced by his reversing the apparent original meaning of the passage last quoted in the otherwise identical passage in his Political Economy, published later. He inserted the words: “under impaired competition,” which considerably weakened the suggestion that purely economic forces tend to perpetuate rather than to counteract the results of originally disadvantageous bargains. Out-side the ranks of the more orthodox economists we find a host of prolific writers who have blamed competition itself rather than its impairment, for “the tendency of wages to a minimum.” The idea probably found its crudest expression in the writings of Charles Kingsley and the Christian Socialists, and undoubtedly exercised a great deal of influence through the anti-sweating movements. It has received lengthy and deliberate treatment in the Webbs’ Industrial Democracy, and is one of the main bases of their advocacy of unionism. Marshall’s treatment of the idea certainly did not give authority to the view that “economic forces” or competition tended to depress the worker, but it was similar to Walker’s in holding that the disadvantageous position of the worker was cumulative. “It lowers his wages,” he wrote, “and as we have seen, this lowers his efficiency as a worker, and thereby lowers the normal value of his labour.” This amounts to saying that there is a dynamic force tending to cause wages to fall through the decreased efficiency of labor. Views of this sort are popular, but are usually accepted very uncritically. Economists have always noticed that where the standard of living is low there is low efficiency; and there is no doubt that a low standard of living is often an important factor causing that low efficiency; but this does not in itself allow that there is a dynamic tendency downwards. Surely this generalization puts the cart before the horse. In so far as low wages are due to inefficiency, from whatever cause, the right thing to do is to tackle that inefficiency directly. Interference with the price mechanism seems to be the very worst way of trying to deal with it. There is, however, no theoretical solution to this particular question—it must be answered by appeal to experience; and yet, if there were anything in the idea, would not employers have discovered it? Few of them are unaware of the effect on efficiency of the stimulus of piece work, of making increased income the certain reward of improved efficiency. May not their general doubt that increased reward will automatically bring greater efficiency be due to the simple fact that in general it does not?