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profit. No doubt certain practical objections can be urged against the plan: for instance, a machine is not so well cared for when two men share the responsibility of keeping it in order as when one man has the whole management of it; again, there would be a little difficulty in readjusting the office arrangements to suit a day of sixteen hours. But employers and their foremen do not seem to regard these difficulties as insuperable; and experience shews that workmen soon overcome the repugnance which they feel at first to double shifts. One set might end its work at noon, and the other begin then; or what would perhaps be better, one shift might work, say, from 5 a.m. to II a.m. and from 1.30 p.m. to 3.30 p.m., the second set working from 11.15 a.m. to 1.15 p.m. and from 3.45 p.m. to 9.45 p.m.; the two sets might change places at the end of each week or month. There is not enough labour in England to allow such a plan to be adopted at once in all the workshops and factories for which it is suited: but as machinery is gradually worn out or antiquated, it might be replaced on a smaller scale. On the other hand, much new machinery that cannot be profitably introduced for a ten hours' day, would be introduced for a sixteen hours' day: being once introduced it would be improved on: the art of production would progress more rapidly; the Wages-and-profits Fund would increase; working men would be able to earn higher wages without tempting capital to migrate to countries where wages are lower, and all classes of society would reap benefit from the change.

§ 12. There seem to be very few unions that try to control the amount of work that each man does. But in many workshops social pressure is brought to bear on any one who works so hard as to set a standard of work higher than the others like; and no doubt the organization of unions often increases this social pressure. Again a foreman, if a member of the union, is apt to conceal the faults of the unionist workman, and to give them an undue preference over abler non-unionists. The control of a branch of a union has sometimes got into the hands of men who have used its machinery to obtain full wages for very little work; and though such cases are rare, the mischief which they cause is perhaps greater than that due to other kinds of union action which have attracted a larger share of public attention.

§13. Unions are rapidly growing out of the habit of rattening; that is of hiding, stealing or destroying the tools of an employer or a workman who offends against their rules. There is no sign of the disuse of the habit of picketing a place where the men have struck; that is of surrounding all entrances to it with men appointed to represent the interests of the union; but cases of intimidation on the part of these pickets are become rarer :

they now confine themselves almost entirely to explaining to workmen who may be seeking employment, the nature and cause of the strike. The pickets appeal to their feelings of class patriotism, and endeavour to dissuade them from siding with the employers against the employed; offering them on the part of the union the repayment of all the expenses to which they may be put by abandoning their purpose.

The leaders of the unions have done good service in dissuading their followers from resisting the introduction of improved processes and machinery in many trades, particularly in those which are subject to foreign competition. When an employer displaces by a machine the special skill which men have spent their lifetime in acquiring, and which constitutes their whole capital, he generally exerts himself to prevent their sinking down to the level of unskilled labourers; if this were universally done the last plea for resistance to machinery would be removed. It is said that a union as intelligent as that of the compositors is inclined to resist the introduction of type-setting machines. And it is said that lawyers, who though not formally organized, are yet a more powerful body than any trades union, are not as energetic as they might be in the endeavour to simplify legal processes.

So far nothing has been said of the ambition which some unionists have to regulate trade so as to make it less liable to extreme fluctuations. It is quite true that if a plan for doing this can be discovered, working men are more likely to exert themselves to carry it through than employers are. For employers are very unwilling to submit to the restraint and control that would be necessary for carrying out such a plan; and, while vicissitudes of trade bring nothing but evil to working men, the excitements and the chances of sudden gains which they afford have an attraction for some employers. But no such plan has yet been proposed which seems to have any chance of




§ 1. WE have already seen how there is a continual contest between the different industrial classes as to the distribution of the produce of their joint labour; we have now to inquire how this contest is affected by trade combinations. Let us neglect for a time the conflicting interests of different classes of hired labour; and suppose that producers can be divided into one great class of employers and another of employed. And let us inquire whether it would be possible for the employed by combining among themselves to raise wages generally at the expense of profits.

We know that, other things being equal, it will be to the interest of an employer to pay wages equal to the net value of the labourer's work, if he cannot get a sufficient supply of labour on cheaper terms. If a farmer for instance calculates that the work of an additional labourer would add to the produce of his farm enough to repay with profits the outlay of 14s. a week in wages, it will be to his interest, other things being equal, to offer these wages rather than go without the extra assistance. But other things are very likely not to be equal. If the current rate in the parish is 12s. a week, he could not bid 145. without incurring odium among his brother farmers, and perhaps tempting the labourers already in his employ to demand 14s. So he will probably offer only 12s., and complain of the scarcity of labour. The price of 125. will be maintained because competition is not perfectly free; because the labourers have not much choice as to the market in which they sell their labour, and because they cannot hold back their labour at a reserve price equal to the highest wage which the employer can afford to pay.

The disadvantage under which labourers lie in such a case as this, may be seen by considering the position of a shopkeeper in like circumstances. As a rule a shopkeeper fixes the price of his goods; and if the customers who come into his shop on

one day refuse to pay that price, he waits till others come who will pay it. But if at any time he were compelled to sell off his goods quickly, taking whatever offers he could get, and not holding back for any reserve price, he might have to sell them at much less than their real value, at all events if he had access to only a few buyers. For these few might not happen to have much occasion for his goods, so that it might not be worth their while to pay him a good price; and they might even combine to take advantage of his necessity, and force him to sell at a lower price than it would have been worth their while to pay1.

In the same way, if the labourer has no savings of his own, and does not belong to a trade combination, he may have to sell his labour at whatever price the employers in his neighbourhood may agree to offer; and this price may be considerably less than they would have been willing to pay rather than go without his labour. If these local agreements among employers are common to nearly all places and nearly all trades, profits in all trades alike may be a little higher and wages a little lower, than if they had been determined by that perfectly free competition which is assumed in the theory of Normal value. It is true that profits could not be very much higher than their Normal value, because if they were, the inducement to employers to extend their businesses by hiring more labour at a higher price, would be very strong; the tacit agreements among employers would continually be broken through, and wages would rise and profits would fall nearly to their Normal level. But still it is clear that if the labourers throughout a country have been in the habit of selling their labour without reserve, they may have received among them a smaller share of the Wages-and-profits Fund than they would have got if there had been perfectly free competition among employers, or than they would have got if they had been able to offer their labour at a reserve price.

If then the labourers enter into local trade combinations, and refuse to sell their labour except at a reserve price, it is quite possible that they may increase their share of the Wagesand-profits Fund, and raise wages at the expense of profits.

1 If there are very few buyers in a market, it may make a great difference whether goods are sold by Dutch or English auction. In a Dutch auction the salesman starts with a high price and lowers it till he comes to a price, say 20s., which some one is willing to pay rather than go without the thing. But in an English auction, the salesman would have started with a low price, and raised it till no one would bid any higher: and if there had been only one person willing to pay 185., and he bid 18s., no bid beyond this would be made, and the thing would have been sold for 25. less by English than by Dutch auction. See Thornton On Labour, 2nd ed. pp. 56, 7.

But to what extent can they do this? Will their action so check the demand for their labour as to cause a reaction in which profits rise at the expense of wages?

§ 2. To answer this question we must start from the fact that wages are labour's share of the Wages-and-profits Fund, which is the net produce of land, labour and capital, after deducting rent and taxes. Therefore a rise in wages is at all events in some danger of bringing about its own destruction, if it is obtained in such a way as to diminish this Fund. Now the rate of profits is one of many causes that govern the accumulation of capital; and a fall in the rate of profits, unless counteracted by some other cause, tends to diminish the Wages-and-profits Fund, or at least to check its growth.

It is true that this diminution may be of little importance for some years; and meanwhile the advantage which combination gives labourers in bargaining with their employers, may possibly enable them to get so large a share of the diminished Fund as to maintain their wages. But though the effects which the fall in profits exerts on the Wages-and-profits Fund may be small at first, they will increase steadily, unless the rise in wages exercises some compensatory effect. If in one year they cause the Fund to be one per cent. less than it otherwise would have been, this loss will have increased to two per cent. at the end of the second year, to three per cent. at the end of the third year, to ten per cent. at the end of the tenth year, and so on1. While this loss increases steadily year by year, there will be no corresponding increase in the advantage which combination gives to labourers in their bargaining; and sooner or later the competition of capital for the aid of labour in production will be diminished; wages will fall, and will probably go on falling until the removal of the causes which checked the growth of the Wages-and-profits Fund.

It is then clear that if a rise of wages is obtained simply at the expense of profits, if it lowers profits without exerting any compensatory effect on the Wages-and-profits Fund, it must

1 The case in the text is understated. Even if the rate of profits remained unchanged without any further fall throughout the ten years, the loss to the Wages-and-profits Fund would increase in geometric, not in arithmetic progression. But further, wages could not be kept at their raised level without throwing a continually increasing burden on profits; and therefore the diminution (or check to the growth) of the Wages-and-profits Fund would be very much greater in the second year than in the first, very much greater in the third year than in the second, and so on. Further, a fall in the rate of interest promotes the use of machinery, and tends to increase Auxiliary-capital at the expense of Wage-capital, and thus to lower wages. An exact treatment of the problem here indicated requires the aid of mathematics.

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