CHAPTER XLV.THE LABOR QUESTION.
Harmony Between the Representatives of Capital and Labor Necessary for Business Prosperity.—If Manufacturers should Combine to Regulate Wages, the Arrangement Could only be Temporary.—The Workingmen are Taken Care of by the Natural Laws of Trade.—Competition Among the Capitalists Sustains the Rate of Wages.—Opinion of John Stuart Mill on this Subject.—Compelling a Uniform Rate of Pay is a Gross Injustice to the Most Skilful Workmen.—The Tendency of the Trades Unions to Debar the Workingman from Social Elevation.—The Power of the Unions Brought to a Test.—The Universal Failure of the Strikes.—Revolutionary Demands of the Knights of Labor.—Gould and the Strikes on the Missouri Pacific, &c., &c.
There is no influence to which business circles are more sensitive than the disruption of harmony between capital and labor. Whatever affects the productiveness of labor affects, more directly than any other cause, the national prosperity and the welfare of all classes of society. The value of the vast aggregate of corporate property represented on the Stock Exchange is vitally dependent on the maintenance of such relations between the employed and employing classes as contribute to the highest welfare of both and to the largest possible national production; and, therefore, whatever tends to imperil such relations becomes a source of serious disturbance to the stock market, to financial interests at large, and to the best interests of labor itself.
There appears to be an idea, in certain quarters, that the modern concentration of capital into large masses has made it necessary for workmen also to organize themselves intolarge bodies, sinking their individual rights and liberties and selling their laboren masse. For my part, I am unable to see the force of this reasoning, although I cannot but respect the ability of some authorities by which it is sanctioned. It seems to assume that large employers of labor have more power to depress wages than smaller ones; and from this it is inferred that it is necessary for workmen to combine to protect themselves against this supposed increased exposure to aggression from capital. But is either the premise or the conclusion sound? In order to concede the assumption we must suppose that large employers can cease to be competitors for labor; for in no other way can they depress wages. But this can never happen; for capitalists will always produce to the fullest extent compatible with an average rate of profit, and this ensures the largest possible demand for labor and, therefore, the highest possible rate of wages. If employers combined to force the rate of wages down, as workmen do to force it up, they would undoubtedly be able to compel a temporary reduction in the remuneration of labor.
But, of necessity, such an artificial depression of wages could only be temporary; for what was thus taken by force from labor would make manufacturing so unusually profitable that new capital would be immediately attracted to it, and the consequent additional demand for labor would necessitate an advance in wages, which the combined manufacturers would be compelled to pay. As a matter of fact, manufacturers do not combine to regulate wages, not only because of the reasons just stated, but also because they know that no such combination could be maintained in the face of the jealousies and conflicting interests that always exist among them. If, then, it is true that manufacturers are compelled by the necessities of competition to pay as much for labor as it is for the time-being worth, and, if they do not and cannot combine to depress wages, I am unable to see where arises the necessity for the workmen to combinefor the purpose of protecting themselves against capital.
The workingmen are taken care of by the natural laws of trade far more perfectly than they can be by any artificial arrangement; and trades unions are simply an intrusion upon the domain of those laws, without the power to supplement or perfect their operation, and with a certainty of obstructing and perverting their tendency, with the inevitable result of mischief to all parties. If the unions do occasionally get an advance in wages, it would have come by the natural laws of competition among the capitalists. It might be delayed for a time, but if you calculate the loss of wages and suffering entailed by the strike, I think the workmen would be safer in the end to wait for the natural advance. I am clearly borne out in this view of the case of the capitalist by that great political economist, philosopher and thinker, John Stuart Mill, who was certainly no enthusiastic friend of the capitalist, and is an acknowledged friend of labor as widely as his writings are known, which is almost as extensive as civilization itself.
After laying down the principles of Socialism, Mill says:
“Next, it must be observed that Socialists generally, and even the most enlightened of them, have a very imperfect and one sided notion of the operation of competition. They see half its effects, and overlook the other half; they regard it as an agency for grinding down every one’s remuneration—for obliging every one to accept less wages for his labor, or a less price for his commodities, which would be true only if every one had to dispose of his laboror his commodities to some great monopolist, and the competition were all on one side. They forget that competition is the cause of high prices and values as well as of low; that the buyers of labor and of commodities compete with one another as well as the sellers; and that if it is competitionwhich keeps the prices of labor and commodities as low as they are, it is competition which prevents them from falling still lower. In truth, when competition is perfectly free on both sides, its tendency is not specially either to raise or to lower the price of articles, but to equalize it; to level inequalities of remuneration,and to reduce all to a general average, a result which, in so far as realized (no doubt very imperfectly), is, on Socialistic principles, desirable. But if, disregarding for the time that part of the effects of competition which consists in keeping up prices, we fix our attention on its effect in keeping them down, and contemplate this effect in reference solely to the interest of the laboring classes, it would seem that if competition keeps down wages, and so gives a motive to the laboring classes to withdraw the labor market from the full influence of competition, if they can, it must on the other hand have credit for keeping down the prices of the articles on which wages are expended, to the great advantage of those who depend on wages. To meet this consideration Socialists, as we said in our quotation from M. Louis Blanc, are reduced to affirm that the low prices of commodities produced by competition are delusive, and lead in the end to higher prices than before, because when the richest competitor has got rid of all his rivals, he commands the market and can demand any price he pleases. Now, the commonest experience shows that this state of things, under really free competition, is wholly imaginary. The richest competitor neither does nor can get rid of all his rivals, and establish himself in the exclusive possession of the market; and it is not the fact that any important branch of industry or commerce formerly divided among many has become, or shows any tendency to become, the monopoly of a few.
“The kind of policy described is sometimes possible where, as in the case of railways, the only competition possible is between two or three great companies, the operations being on too vast a scale to be within the reach of individual capitalists; and this is one of the reasons why businesses which require to be carried on by great joint-stock enterprises cannot be trusted to competition, but, when not reserved by the State to itself, ought to be carried on under conditions prescribed, and from time to time, varied by the State, for the purpose of insuring to the public a cheaper supply of its wants than would be afforded by private interest in the absence of sufficient competition. But in the ordinary branches of industry no one rich competitor has it in his power to drive out all the smaller ones. Some businesses show a tendency to pass out of the hands of many small producers and dealers into a smaller number of larger ones; but the cases in which this happens are those in which thepossession of a larger capital permits the adoption of more powerful machinery, more efficient, by more expensive processes, or a better organized and more economical mode of carrying on business, and thus enables the large dealer legitimately and permanently to supply the commodity cheaper than can be done on the small scale; to the great advantage of the consumers, and therefore of the laboring classes, and diminishing,pro tanto, the waste of the resources of the community so much complained of by Socialists, the unnecessary multiplication of mere distributors, and of the various other classes whom Fourier calls the parasites of industry. When this change is effected, the larger capitalists, either individual or joint-stock, among which the business is divided, are seldom, if ever, in any considerable branch of commerce, so few as that competition shall not continue to act between them; so that the saving in cost, which enabled them to undersell the small dealers, continues afterwards, as at first, to be passed on, in lower prices, to their customers. The operation, therefore, of competition in keeping down the prices of commodities, including those on which wages are expended, is not illusive but real, and we may add, is a growing, not a declining fact.”
One principle of the unions is exceedingly unjust to the workingmen to the last degree. It starts with the assumption that all workmen are equal in their capacity as to the quality of service or work and the quantity of production; and upon this false assumption is based the injustice of compelling all members to bind themselves to a uniform rate of pay. A greater injustice and a more flagrant inequity cannot be found in the whole range of the world’s social institutions; nor is the wrong the less culpable because the members voluntarily inflict it upon themselves; for as “no man liveth unto himself” but has dependents for whom he is bound to do the best in his power, so no man is free to throw away to the less industrious or less competent what his superior abilities and industry have earned for himself.
This levelling system is not only in defiance of the law of varied endowment which the Creator has incorporated intothe constitution of humanity, but it tends to bind into one cast-iron man the entire working community, debarring them from all chances of progress and consigning them to a degrading condition of semi-slavery or serfdom. Time was when the way was clear to any workingman in this country to the highest positions of wealth, or of social standing or political influence. As a matter of fact, a large proportion of our present successful merchants, and not a few even of our millionaires, are men who have risen from the ranks of labor. The first steps in their progress were won by the superiority of their skill or faithfulness as workmen, which qualified them to rise step by step to higher achievements. Then, the workman was free to rise according to his abilities and his character; he was the free ruler of his own destiny. Now, it seems the tendency of the trades unions is to obliterate all such distinctions and virtually debar the workman from the possibility of earning a rank among his fellowmen proportioned to his merits; and on this plan the American workman would be as completely cut off from the chances of social elevation, as was the American slave twenty-five years ago. This would be a terrible degradation, of which every man who enjoys the rights of American citizenship should deem himself incapable and feel ashamed.
However much political leaders, and even some who rejoice in the reputation of economists, may feel disposed to regard these combinations as a social necessity of the time, and an institution that has come to stay, I cannot resist the conviction that the trades-union movement has already seen its culmination and is destined to a steady disintegration, unless the system is greatly modified. The principle of combination is useless unless it can be successfully employed to compel employers to accept the terms of the employees. In fact, it has been almost the sole object of the unions to employ it, through the agency of strikes, to compel the acquiescence of capital. Up to a recent period, it has been largely successful in this sense. So long as employerscould at all afford to comply with the demands of labor, they would make considerable sacrifices to avoid the inconvenience and loss connected with the interruption of their operations involved in a strike. At last, however, the workingmen advanced their demands to a pitch so seriously threatening to industry and so vitally dangerous to the material interests of the country at large, that employers saw, with common consent, that the time had come when a square issue must be made with this modern invasion on their rights.
The spring of 1886 will always be memorable, for its having brought to a fair test the power and principles of trades-unionism. Strikes were suddenly initiated on a stupendous scale, upon the railroads, among the western factories, and among the larger employers in the Middle States, partly to enforce demands for higher wages, partly to shorten the time of work to eight hours a day, and above all, to compel employers to recognize the leaders of the unions in determining the conditions of employment and to submit all disputes between the two parties to arbitration. Employers, simultaneously, but without any concert of action, met the challenge squarely. They refused to concede the demands made; they in many instances declined to recognize the officers of the unions; they proceeded promptly to fill the places of the strikers with non-union men, and refused to make formal conditions with returning strikers; they brought to bear upon the leaders of the strikes the laws against conspiracy; and they took the “boycotters” before the courts. The result of this treatment was an almost universal failure of the strikers; the declaration by the courts that the compulsory methods of the unions are illegal, and in the nature of conspiracies; the throwing out of employment of tens of thousands of union employees, and the exhaustion of the funds raised by the unions for enforcing their coercive tactics.
The result of the contest was that, within one brief month,the power of the unions was shown to be weakness itself; employers everywhere discovered the intrinsic importance of the combinations they had so much before dreaded, and very many respectable and reflecting members of the unions felt themselves discredited in the eyes of the public, while their faith in the efficiency of their system of supposed protection was seriously shaken. After this, if I am not seriously mistaken, employers will find that they have much less to fear from trades-unions than they had once supposed. A defeat so fundamental as this, is likely to be followed by the gradual dispersion of the formidable array of united workmen. Such a result is no more than is to be reasonably expected from an organization based upon no great truth and no sound principle, but resting upon popular ignorance and misconception of the natural laws governing society.
During the progress of the recent strikes, I had occasion to make frequent allusions to the course of events, from which I may be permitted to make the following quotations:
(The following appeared on the 3d of May.)
“The Knights of Labor have undertaken to test, upon a large scale, the application of compulsion as a means of enforcing their demands. The point to be determined is, whether capital or labor shall, in future, determine the terms upon which the invested resources of the nation are to be employed.
“To the employer it is a question whether his individual rights as to the control of his property shall be so far overborne as not only to deprive him of his freedom, but also expose him to interference seriously impairing the value of his capital. To the employees, it is a question whether, by the force of coercion, they can wrest, to their own profit, powers and control, which, in every civilized community, are secured as the most sacred and inalienable rights of the employer.
“This issue is so absolutely revolutionary of the moral relations between labor and capital, that it has naturally produced a partial paralysis of business, especially among industries whose operations involve contracts extending intothe future. There has been at no time any serious apprehensions that such an anarchical movement could succeed, so long as American citizens have a clear perception of their rights and their true interests; but it has been distinctly perceived that this war could not fail to create a divided, if not a hostile feeling, between the two great classes of society; that it must hold in check not only a large extent of ordinary business operations, but also the undertaking of those new enterprises which contribute to our national progress, and that the commercial markets must be subjected to serious embarrassments.
“From the nature of the case, however, this labor disease must soon end one way or another; and there is not much difficulty in foreseeing what its termination will be. The demands of the Knights and their sympathizers, whether openly expressed or temporarily concealed, are so utterly revolutionary of the inalienable rights of the citizen, and so completely subversive of social order, that the whole community has come to a firm conclusion that those pretensions must be resisted to the last extremity of endurance and authority; and that the present is the best opportunity for meeting the issue firmly and upon its merits. The organizations have sacrificed the sympathy which lately was entertained for them, on account of inequities existing in certain employments; they stand discredited and distrusted before the community at large as impracticable, unjust and reckless; and, occupying this attitude before the public, their cause is gone and their organization doomed to failure. They have opened the flood gates to the immigration of foreign labor, which is already pouring in by tens of thousands; and they have set a premium on non-union labor, which will be more sought after than ever, and will not be slow to secure superior earnings by making arrangements with employers upon such terms and for such hours as may best suit their interests. Thus, one great advantage will incidentally come out of this crisis beneficial to the workingman, who, by standing aloof from the dead-level system of the unions, will be able to earn according to his capacity, and thereby maintain his chances for rising from the rank of the employee to that of the employer. This result cannot be long delayed, because not only is loss and suffering following close upon the heels of the strikers, but the imprudences of their leaders are breeding dissatisfaction among the rankand file of the organizations, which if much further protracted, will gravely threaten their cohesion. It is by no means certain that we may not see a further spread of strikes, and possibly with even worse forms of violence than we have yet witnessed; but, so long as a way to the end is seen, with a chance of that end demonstrating to the organizations that their aspirations to control capital are impossible dreams, the temporary evils will be borne with equanimity. The coolness with which the past phases of the strikes have been endured, shows that the steady judgment of our people may be trusted to keep them calm under any further disturbance that may arise.
“Prior to the strike in the Missouri Pacific, Jay Gould was one of the most hated men in the people. He was anxious to have public respect and sympathy. He had made all the money he wanted, and was willing to spend part of it in gaining the respect and honor of the country. What his money could not do for him this strike on the Missouri Pacific has done. The sympathy and good-will which previously were with the strikers have been shifted from them to him. There is no doubt that the strikers selected the Missouri Pacific because it was a property with which Gould was known to be most largely identified, and because they thought that general execration would be poured out on him in any event. But, instead of injuring Mr. Gould, they have done him inestimable service.
“The timely and forcible action of Mayor Harrison, of Chicago, will put dynamiters and rioters where they belong, and thus divide the sheep from the goats in a very short time. If officials would sink political bias, the country would soon be rid of law-breakers and disturbers of the peace. As this plan of treatment has now been adopted, it will be far reaching in its effect, and stop mob gatherings, riotous speech-making, and other such bad incentives, which recently have been so conspicuous in Chicago, Milwaukee, St. Louis, and elsewhere. The laboring classes, who are parties to the strike, will now have an opportunity to retire to their homes, where there will be more safety than in the streets, which will bring to them reflection. They will then soon become satisfied that they are the aggrieved parties, and the not unlikely result will be their turning upon their leaders, who have deceived them.
“There have been numerous vacancies created by the strikersvoluntarily resigning. There has been no difficulty in filling these vacancies by those who are equally capable, if not more so, from other countries flocking to our shores. The steam ferry between this country and Europe has demonstrated this by the steamer just arrived in six days and ten hours from European shores to our own. As the separation between the oppressed operatives of the Old World and America is thus reduced to hours, Europe will quickly send to us all the labor we need to meet all such emergencies.
“The laboring man in this bounteous and hospitable country has no ground for complaint. His vote is potential, and he is elevated thereby to the position of man. Under the government of this nation, the effect is to elevate the standard of the human race and not to degrade it. In too many other nations it is the reverse. What, therefore, has the laborer to complain of in America? By exciting strikes and encouraging discontent he stands in the way of the elevation of his class and of mankind.
“The tide of emigration to this country, now so large, makes peaceful strikes perfectly harmless in themselves, because the places of those who vacate good situations are easily filled by newcomers. When disturbances occur under the cloak of strikes it is a different matter, as law and order are then set at defiance. The recent outbreaks in Chicago, which resulted in the assassination of a number of valiant policemen through a few cowardly Polish Nihilists firing a bomb of dynamite in their midst, was the worst thing that could have been done for the cause of the present labor agitation, as it alienates all sympathy from them. It is much to the credit, however, of Americans and Irishmen that, during the recent uprisings, none of them have taken part in any violent measures whatsoever, nor have they shown any sympathy with such conduct.
“If the labor troubles are to be regarded as only a transient interruption of the course of events, it is next to be asked, what may be anticipated when those obstructions disappear? We have still our magnificent country, with all the resources that have made it so prosperous and so progressive beyond the record of all nations. There is no abatement of our past ratio of increase of population; no limitation of the new sources of wealth awaiting development; no diminution of the means necessary to the utilizationof the unbounded riches of the soil, the mine, and the forest. Our inventive genius has suffered no eclipse. In the practical application of what may be called the commercial sciences, we retain our lead of the world. As pioneers of new sources of wealth, we are producing greater results than all the combined new colonizing efforts which have recently excited the aspirations of European governments. To the over-crowded populations of the Old World the United States still presents attractions superior to those of any other country, as is demonstrated by the recent sudden revival of emigration from Great Britain and the continent to our shores.”