CHAPTER III
Of the Causes owing to which, and the Means by which Labour participates in the growing Products of Ability.
Letme repeat in other words what I have just said. The labouring classes, under the existing condition of things, have acquired more wealth in a given time than the most sanguine Socialist of fifty years ago could have promised them; and this increased wealth has found its way into their pockets owing to causes that are in actual operation round us. These causes, therefore, should be studied for two reasons: firstly, in order that we may avoid hindering their operation; secondly, in order that we may, if possible, accelerate it; and I shall presently point out, as briefly, but as clearly as I can, what the general character of these causes is.
◆1 It is true that there are notorious facts that may make the superficial or excitable observer doubt the reality of this great progress of the labouring classes.
◆¹ But before doing this,—before considering the cause of this progress,—I must for a moment longer dwell and insist upon the reality of it; because unhappily there are certain notorious facts which constantly obtrude themselves on the observation of everybody, and which tend to make many people deny, or at least doubt it. These facts are as follows.
◆1 But when these facts—viz. facts relating to the very poor—are reduced to their true proportions,
Speaking in round numbers, there exists in this country to-day a population consisting of aboutseven hundred thousandfamilies, orthree millionpersons, whose means of subsistence are either insufficient, or barely sufficient, or precarious, and the conditions of whose life generally are either hard or degrading, or both. A considerable portion of them may, without any sentimental exaggeration, be called miserable; and all of them may be called more or less unfortunate. There is, further, this observation to be made. People who are in want of the bare necessaries of life can hardly be worse off absolutely at one period than another; but if, whilst their own poverty remains the same, the riches of other classes increase, they do, in a certain sense, become worse off relatively. The common statement, therefore, that thepoor are getting constantly poorer is, in this relative sense, true of a certain part of the population; and that part is now nearly equal in numbers to the entire population of the country at the time of the Norman Conquest. Such being the case, it is of course obvious that persons who, for purposes of either benevolence or agitation, are concerned to discover want, misfortune, and misery, find it easier to do so now than at any former period. London alone possesses an unfortunate class which is probably as large as the whole population of Glasgow; and an endless procession of rags and tatters might be marched into Hyde Park to demonstrate every Sunday. But if the unfortunate class in London is as large as the whole population of Glasgow, we must not forget that the population of London is greater by nearly amillionthan the population of all Scotland; ◆¹ and the truth is that, although the unfortunate class has, with the increase of population, increased in numbers absolutely, yet relatively, for at least two centuries, it has continued steadily to decrease. In illustration of this fact, it may be mentioned that, whereas in 1850 there wereninepaupersto everytwo hundredinhabitants, in 1882 there were onlyfive; whilst, to turn for a moment to a remoter period, so as to compare the new industrial system with the old, in the year 1615, a survey of Sheffield, already a manufacturing centre, showed that the “begging poor,” who “could not live without the charity of their neighbours,” actually amounted to one-third of the population, orseven hundred and twenty-fivehouseholds out oftwo thousand two hundred and seven. Further, although, as I observed just now, it is in a certain sense true to say that, relatively to other classes, the unfortunate class has been getting poorer, the real tendency of events is expressed in a much truer way by saying that all other classes have been getting more and more removed from poverty.
◆1 We shall find that they have no such significance, nor disprove in any way the extraordinary progress of the vast majority.
◆2 What then are the causes of this progress?
◆¹ What the presence, then, and the persistence of this class really shows us is not that the progress of the labouring classes as a whole has been less rapid and less remarkable than it has just been said to be, but that a certain fraction of the population, for some reason or other, has always remained hitherto outside this general progress; and the one practicallesson which its existence ought to force on us is not to doubt the main movement, still less to interfere with it, but to find some means of drawing these outsiders into it. ◆² This great and grave problem, however, requires to be treated by itself, and does not come within the scope of the present volume. Our business is not with the causes which have shut out one-tenth of the poorer classes from the growing national wealth, but with those which have so signally operated in making nine-tenths of them sharers in it.
◆1 They are of two kinds: spontaneous tendencies, and the deliberate and concerted actions of men.
We will accordingly return to these, and consider what they are. ◆¹ We shall find them to be of two kinds: firstly, those which consist of the natural actions of men, each pursuing his own individual interest; and secondly, their concerted actions, which represent some general principle, and are deliberately undertaken for the advantage not of an individual but of a class. We will begin with considering the former; as not only are they the most important, but they also altogether determine and condition the latter, and the latter, indeed, can do little more than assist them.
◆1 We will begin with the spontaneous tendencies—i.e.the natural actions of individuals, each pursuing his own interest.
◆2 There are two ways of getting rich: (1) by abstracting from an existing income, or (2) by adding to it. The rich class of the modern world have, as a whole, become rich in the second way.
◆¹ The natural causes that tend to distribute amongst Labour a large portion of the wealth produced by Ability will be best understood if we first consider for a moment the two ways—and the two only ways—in which a minority can become wealthy. ◆² What these are can be easily realised thus. Let us imagine a community of eight labouring men, who make each of themfifty poundsa year, and who represent Labour; and let us imagine a ninth man,—a man of Ability,—who represents the minority. The ninth man might, if he were strong enough, rob each of the eight men oftwenty-five pounds, compelling them each to live ontwenty-five poundsinstead of onfifty pounds, and appropriate to himself an annualtwo hundred pounds. Or he might reach the same result in a totally different way. He might so direct and assist the Labour of the eight men, that without any extra effort to themselves they each, instead offifty poundsproducedseventy-five pounds, and if, under these circumstances, he tooktwenty-five poundsfrom each, he would gain the same sum as before, namelytwo hundred pounds, but, as I said, in a totally different way. It wouldrepresent what he had added to the original product of the labourers, instead of representing anything he had taken from it. Now whatever may have been true of rich classes in former times and under other social conditions, the riches now enjoyed by the rich class in this country have, with exceptions which are utterly unimportant, been acquired by the latter of these two methods, not by the former. They represent an addition to the product of Labour, not an abstraction from it. This is, of course, clear from what has been said already; but it is necessary here to specially bear it in mind.
◆1 Let us consider the nature of the process,
◆2 By first representing Labour and Ability in their simplest imaginable forms; Ability, or the employing class, being represented as one man.
◆¹ Let us then take a community of eight labourers, each producing commodities worthfifty poundsa year, and each consuming—as he easily might—the whole of them. These men represent the productive power of Labour; ◆² and now let us suppose the advent of Ability in the person of the ninth man, by whose assistance this productive power is multiplied, and consider more particularly what the ninth man does. There is one thing which it is quite plain he does not do. He does not multiply the power of Labour for the sake of merely increasing the output of those actualproducts which he finds the labourers originally producing and consuming, and of appropriating the added quantity; for the things he would thus acquire would be of no possible good to him. He would have more boots and trousers than he could wear, more bread and cheese than he could eat, and spades and implements which he did not want to use. He would not want them himself, and the labourers are already supplied with them. They would be no good to anybody. He does not therefore employ his Ability thus, so as to increase the output of the products that have been produced hitherto; but he enables first, we will say, four men, then three, then two, and lastly one, to produce the same products that were originally produced by eight; and he thus liberates a continually increasing number, whom he sets to produce products of new and quite different kinds.
Let us see how he does this. The eight labourers, when he finds them, make eachfifty poundsa year, orfour hundred poundsin the aggregate; and this represents the normal necessaries of their existence. He, by the assistance which his Ability renders Labour,enables at last, after many stages of progress, these same necessaries to be produced by one single man, who, instead of producing, as formerly, goods worthfifty pounds, finds himself, with the assistance of Ability, producing goods worthfour hundred pounds. There is thus an increase ofthree hundred and fifty pounds, and this increment the man of Ability takes.
Meanwhile, seven men are left idle, and with them the man of Ability makes the following bargain. Out of thethree hundred and fifty poundsworth of necessaries which he possesses, he offers each of themfifty poundsworth—the amount which originally they each made for themselves, on condition that they will make other things for him, or put their time at his disposal. They accordingly make luxuries for him, or become his personal servants. For thethree hundred and fifty poundshe pays them in the shape of necessaries, they return him anotherthree hundred and fifty poundsin the shape of commodities or of service; and this new wealth constitutes the able man’s income.
◆1 In this case, there being no competition of employers, there would be no natural distribution of the increasing products amongst the labourers.
Such, reduced to its simplest elements, is the process on which the riches of the rich in the modern world depend. ◆¹ It will be seen,however, that in the case we have just supposed, the labourers, by the process in question, gain absolutely nothing. Each of them originally madefifty poundsa year. He now receives the same sum in wages. But the total product has increased bythree hundred and fifty pounds, and of this the labourers acquire no share whatever. Nor, supposing them to be inexperienced in the art of combination, is there any means by which they could ever do so. And if our imaginary community were a complete representation of reality, the same would be the case with the labourers in real life.
◆1 But let us introduce a second man of Ability competing with the first, and the process of distribution of the increased product amongst the labourers begins at once.
◆¹ But it must now be pointed out that in one important respect, as a representation of reality, our community is incomplete. It represents the main process by which the riches of the rich are produced; but it offers no parallel to one factor in the real situation, owing to which the labourers inevitably acquire a share in them. In that community the rich classes are represented by a single person, who has no conflicting interests analogous to his own to contend against. But in actual life, so far as this point is concerned, the condition of the rich is different altogether. As lookedat from without, they are, indeed, a single body, which may with accuracy be represented as one man; but as looked at from within, they are a multitude of different bodies, whose interests, within certain limits, are diametrically opposed to each other. In order, therefore, to make our illustration complete, instead of one man of Ability we must imagine two. The first, whose fortunes we have just followed, and whom, for the sake of distinctness, we will christen John, has already brought production to the state that has been just described. He has managed to get seven men out of eight to produce luxuries for himself,—luxuries, we will say, such as wine, cigars, and butter,—paying these seven men with the surplus necessaries which, with his assistance, are produced by the eighth man. But of these luxuries the seven men keep none; nor can they give any of them to the eighth man, their fellow. John takes all. But now let us suppose that a second man of Ability, whom we will christen James, appears upon the scene, just as anxious as John to direct Labour by his Ability, and just as capable of making Labour productive. But all the labourers are at present in the payof John. James therefore must set himself to detach them from John’s service; and he accordingly engages that if they will work for him they shall not only each receive the necessaries that John gives them, but a share of the other things that they produce—of the butter, of the cigars, and of the wine—as well. The moment this occurs, John has to make a similar offer; and thus the wages of Labour at once begin to rise. When they have been forced up to a certain point, James and John cease to bid against one another, and each employs a certain number of labourers, till one or other of them makes some new discovery which enables the same amount of some commodity—we will say cigars—as has hitherto been produced by two men, to be produced by one; and thus a new labourer is set free, and is available for some new employment. We must assume that James and John could both employ this man profitably—that is, that they could set him to produce some new object of desire—let us say strawberries; and, this being so, there is again a competition for his labour. He is offered by both employers as much as he has received hitherto, and as the otherlabourers receive; and he is offered besides a certain number of strawberries. Whichever employer ultimately secures his services, the man has secured some further addition to his income. He has some share in the increasing wealth of the community; and, as John and James continue to compete in increasing the production of all other commodities, some share of each increase will in time go to all the labourers.
◆1 And nothing can stop this process except an increase of populationin excess of the increasein the productive powers of Ability.
◆¹ One thing only could interfere with this process; and that has been excluded from our supposed community: namely, an increase in its numbers. And a mere increase in the numbers would in itself not be enough. It must be an increase which outstrips the discovery of new ways in which labour may be employed profitably. Let us suppose that to our original eight labourers, eight new labourers are added, who if left to themselves could do just what the first eight could do, namely, produce annual subsistence for themselves to the value offifty poundseach. If, under the management of James or John, the productivity of these men could be multiplied eight-fold, as was the case with the first eight, James andJohn would be soon competing for their services, and the second eight, like the first eight, would share in the increased product. But if, owing to all the best land being occupied, and few improvements having been discovered in the methods of any new industries, the productivity of the new men could be increased not eight-fold, but only by one-eighth—that is to say, if what each man produces by his unaided Labour could be raised by Ability fromfifty pounds, not tofour hundred pounds, but to no more thanfifty-six pounds ten shillings,—fifty-six pounds ten shillingswould be the utmost these men would get, even if the Ability of James or John got no remuneration whatever. Meanwhile, however, the first set of workmen are, as we have seen, receiving much more than this. They are receiving each, we will say,one hundred pounds. The second set, therefore, naturally envy them their situations, and endeavour to secure these for themselves by offering their Labour at a considerably lower price. They offer it atninety pounds, atseventy pounds, or even atsixty pounds; for they would be bettering their present situation by accepting even this last sum. This beingthe case, the original eight labourers have necessarily to offer their Labour at reduced terms also; and thus the wages of Labour are diminished all round.
Such is the inevitable result under such circumstances, if each man—employer and employed alike—follows his own interest at the bidding of common sense. One man is not more selfish than another; indeed, in a bad sense, nobody is selfish at all; and for the result nobody is to blame. The average wages of Labour are diminished for this simple reason, and for no other—that the average product is diminished which each labourer assists in producing. The community is richer absolutely; but it is poorer in proportion to its numbers.[53]Let us see how this works out. The original product of the first eight labourers wasfifty poundsa head, orfour hundred poundsin the aggregate. This was raised by the co-operation of Ability tofour hundred poundsa head, orthree thousand two hundredpoundsin the aggregate. But the second set of labourers, whatever Ability may do for them, cannot be made to produce more thanfifty-six pounds ten shillingsa head, or an aggregate offour hundred and fifty-two pounds; and thus, whereas eight labourers producedthree thousand two hundred pounds, sixteen labourers produce onlythree thousand six hundred and fifty-two pounds, and the average product is lowered fromfour hundred poundstotwo hundred and twenty-eight pounds.[54]
◆1 This natural power, however, can be regulated by deliberate action, political and other, and made more beneficial to the labourers;
◆2 Which action takes two chief forms—legislation, and combinations amongst the labourers. We will discuss both in the next chapter.
Wages naturally decline then, owing to an increase of population, when relatively to the population wealth declines also; but only then. ◆¹ On the other hand,—and this is the important point to consider,—so long as a country, under the existing system of production, continues, like our own, to grow richer in proportion to the number of labourers, of every fresh increase in riches the labourers will obtain a share, without any political action or corporate struggle on their part, merely by means of a natural and spontaneous process. And we have now seen in a broad and general way what the character of this process is. It may seem, however, to many people that a study of it and of its results can teach no lesson but the lesson oflaisser faire, which practically means that the labourers have no interest in politicsat all, and that all social legislation and corporate action of their own is no better than a waste of trouble, and is very possibly worse. But to think this is to completely misconceive the matter. Even a study of this process of natural distribution by itself would be fruitful of suggestions of a highly practical kind; but if we would understand the actual forces to which distribution is due, it must, as I have said already, not be studied by itself, but taken in connection with others by which its operation has been accelerated. I spoke of these as consisting of deliberate and concerted actions in contradistinction to individual and spontaneous actions; ◆² and these, speaking broadly, have been of two kinds—the one represented by the organisation of Labour in Trade Unions, the other by certain legislative measures, which, in a vague and misleading way, are popularly described as “Socialistic.” Let us proceed to consider these.