Chapter IX: Statistics of Manufacturing. 289 (5)

Efficiency methods, however, cannot be successfully designed or installed by those trained in other lines and prejudiced by other associations. After these methods have been scientifically developed to suit the existing conditions and actually put into operation by those skilled in the art, they may gradually be relinquished into the control of those who have been educated in the process of installation, with some hope of success for their future operation.

THE BRIDGE BETWEEN LABOR AND CAPITAL. 380

BY JOHN MITCHELL.

[Former President United Mine Workers of America.]

If the interests of labor and capital were identical--as some contend--there would be no chasm between them to bridge; and if the interests of labor and capital were irreconcilable--as others contend--any effort to unite them would be futile. From an experience extending over a considerable period, I am quite convinced that neither of the foregoing propositions will stand the test of close analysis. My judgment is that the interests of labor and capital, though divergent in some respects, are nevertheless reciprocal and inter-dependent.

To elucidate in a practical way the subject of the proper relationship between employer and employe, it is necessary to review the activities of these two factors in the field in which their interests are common and to mark the point at which they diverge. The employer and the employe are mutually interested in the successful conduct of industry; the profits of the one and the wages of the other obviously are contingent upon it, as both profits and wages must be paid from the earnings of the enterprise in which the capital of the one and the labor of the other are jointly invested. This being true, the workman and the employer are equally concerned in the character of the product which is manufactured and sold by them, just as they are interested equally in good markets and regularity of employment. Having worked in co-operation up to the point of turning out an article that commands a wide and profitable sale, the question of dividing the earnings of their joint efforts presents itself. It is the failure of the attempt to adjust satisfactorily this controversy that gives rise to the 381 differences between employers and workmen and is the basis of the labor problem as we have it today. True, there are many questions of discord apart from those of wages and profits, which result in serious industrial conflicts, but followed back to their source, it will be found that these issues are inseparably related to those of wages and profits. In other words, the demand for a shorter workday, for healthful, sanitary surroundings, has its origin in the irrepressible desire of the working people for a progressive improvement in their conditions of life and labor.

In ancient and mediaeval times when the structure of society was simple and each family consumed all the things it produced; or even at a later period when the master and the journeyman worked together side by side, and when the master had been a journeyman and the journeyman expected to become a master, there was little cause for controversy, and the problem of labor was not difficult of solution. It was not until the invention of machinery, the advent of the factory system, the use of steam, and the application of new processes that the question of the relationship of employer and employed grew so complex and impersonal that new methods became necessary in the proper adjustment of industrial affairs. As step by step industry developed from the stage of the privately owned factory to the firm and corporation, to the combination and the trust, the real employer was removed further and ever further from personal contact with his employes. As a consequence of this transition, the salaried manager took the place once held by the actual employer, and the simple and friendly relations of early days gave way to the intricate and complex industrial life of this generation.

Coincident with the development of industry which has revolutionized the whole life and history of our people and our civilization, have come the local, the district, the national, and finally the international organizations of labor. These gigantic associations 382 and federations of workmen are the logical and the inevitable consequence of an industrial development which threatened the subjugation of the individual workman and forced him, in self-defense, to merge his interests and his identity with those of his fellow workmen. The momentous change in the status of the workman which accompanied the revolution of industrial processes, transformed the whole problem of labor from the question of production to that of distribution, and it is the effort to find an equitable adjustment of the problem of distribution that is taxing to the utmost the ingenuity of economists, philosophers, and statesmen.

In the search for a panacea to heal the industrial ills against which society so justly complains, many suggestions are made and innumerable remedies proposed. On the one hand are found forces that would deny to labor the right of organization and combination, although exercising and enjoying the benefit of these rights themselves; on the other hand are forces at work advocating and demanding the abolition of the whole competitive system; between these extremes stands a great army of workmen and employers earnestly striving to find grounds of mutual agreement upon which the rights and obligations of each may be defined and brought into harmony. With all due respect to the opinions of others, I submit that the path of safety, progress, and justice lies in the middle course--in the recognition of the right of organization on the part of both labor and capital, by which and through which these factors in our industrial progress may work out their inevitable destiny, contracting freely each with the other upon all questions of mutual concern.

The trade agreement is the bridge between labor and capital. It restores, so far as it is possible to do so, the personal relationship, the mutual interest which existed prior to the advent of the factory system. It is an acknowledgment of the inter-dependence of labor and capital, a recognition of the reciprocal interest of 383 employer and employe. When the right of organization among workmen and employers is fully recognized and freely conceded, and when these forces adopt and practice the policy of collective bargaining, the day of the strike and the lockout, of the boycott and the blacklist, with their attendant evils, losses, and hardships, will have largely passed away.

THE UNEMPLOYED. 384

BY JOHN BASCOM, D. D., LL. D.

[Formerly President University of Wisconsin.]

A striking feature of the industrial world and one well fitted to occasion alarm is the large number of persons thrown, from time to time, out of employment. We are forced by it to accept one or other of two conclusions; that the economic world is mismade, incapable of a quiet and successful run, or that our handling of it has been in some way unskillful and misapplied. This fact of unemployment has become very conspicuous, and to those who suffer from it, and to those who sympathize with them, exceedingly grevious. A certain portion of the human family, and that in the most progressive nations, find themselves superfluous, out of connection with the means of living though others are obtaining support, comfort and luxury. They have nothing to do but to die in their tracks. Like the feeble ones in a forced march through an enemy’s country they first fall behind and then perish. This state of the case does not arise by accident and then pass away, it has periods of severity which frequently return, and stands among those constant dangers which may at any time overtake a few. This evil comes especially to industrious countries, like England, and to portions of our own country, like Pittsburg, noted for their enlarged production. The causes and remedies of this state of things become, therefore, subjects of anxious inquiry. We may assert that the want of employment is due in a general way, to the deficiencies and vices of men, but this assertion does not sufficiently point out the immediate occasion of the difficulty, nor furnish us its remedies.

Failure of the means of livelihood arises from indolence, ignorance, 385 vice and unfavorable conditions on the part of those who suffer from it, conditions often of the nature of accident. But while the recipients of this disaster are plainly recognized, the disaster itself comes to them in a measure independent of their failures. We need to know not only those who are likely to suffer from a given disease, but how the disease itself arises. The central and most productive cause in this series of provocations is indolence; the others accompany indolence and more or less arise from it. By indolence we mean a want of life and hence a weakness of all the functions of life. We may mean physical inactivity or intellectual sluggishness or moral indifference, or may mean them all blended in one or other of the various ways in which a weak and perverted life manifests itself. The tramp is physically indolent, he hates work. This indolence readily extends to intellectual activity; the indolent person is ignorant of the value of success, of its motives and of its means. The world reveals few incentives to him and makes few appeals. This indolence and ignorance do not wholly arrest the wants and desires of men, and hence vice, as in the case of the thief, enters as the most ready and immediate means of gratification. The torpid nature of the moral judgment lends itself to this result, and nothing but fear, itself weak and vacillating, stands between the indolent man and habits of gross indulgence, inconsistent with personal and with social welfare.

The accidents, misjudgments and disappointments which are liable to overtake us all owe the injury which they inflict to the weak personality on which they fall, and so misfortune seems to follow and persecute those who are least able to bear it. The indolent, passive mood is a good medium for the accumulation and transfer of every form of disaster. The class of the helpless is much enlarged by this flow 386 of every form of evil to these low places in conduct and character.

We may clearly recognize these facts and suppose them a sufficient explanation of the farther fact, that so many are thrown out of employment and find themselves the waifs of society with no secure attachment to it. They do, indeed, make conspicuous the failure of occupation and determine the direction it will take. Their numbers are seriously increased by it, and their very presence gives the conditions of its recurrence. They are both causes and effects. They stand on terms of action and reaction with all the embarrassments of production. They help to reduce wages, and when wages are reduced, they are the first to be driven out of employment. They are the symptoms of the disease, the product of the disease and the means by which it is carried farther. All failures in the productive process extend, in their worst results, to this class of defectives. They are the recipients of past evils, of present and of coming evils. They arise in connection with a false form of production, must be treated with it and removed with it. They are a composite product, their faults not being wholly their own but in part the faults of the economic system with which they are associated. They are not the scapegoat on whose head the sins of the people may be laid and then be borne into the wilderness.

In discussing the causes and remedies of unemployment, we shall see how far and in what way these feeblest workers are involved in it. We cannot improve society by simply striking off the evils that have been developed under it. Healthy growth alone can rid itself of failures. It often happens in physical disease that what is accepted as a remedy in the end aggravates the difficulty.

One dislikes to use the word pauper, it so frequently carries with it an unreasonable and cruel contempt. Yet there are paupers in the human household, and when the temper is once present it is most difficult of removal. It is a form of leprosy that eats out all vital power. The 387 pauper temper indicates a disposition to secure immediate ease with no reference to the comfort of others. It accepts any advantage that offers without the slightest wish to return it. Yet even this spirit may offer some excuses for itself. The evils of society which may have originated far off in the action of the leaders of men, are apt to go booming downward till they reach, in their most distinctive form, the pauper class, or those but little above it. Diligence, thrift, skill, ward off the blow and escape with only a partial loss. Those who are always in the way of it are the weak ones, to whom prosperity brings but little and adversity occasions immediate overthrow. When those who at best are but partially occupied, find that labor is altogether failing them, the question of relief becomes most difficult. There is no profitable labor at disposal, and to provide labor means farther loss; it is charity in its most disguised, expensive and unrequited form. The worst lesson we can teach those already inclined to negligence is that a form of labor may be put in the place of real labor, and that the question of adequacy is one to be answered by society, not by the needy, recipient of favor. Whatever we may do for men of feeble productive power we are not to lead them still farther on in the direction of indolence and worthlessness. Actions are not to be separated from their normal results. We may frequently be called on to bear the injury which proceeds from another man’s wrongs, but we are never called on to disguise the wrong itself. A portion of the wrong is our own; that we should correct. While the evils are in the process of infliction we are to bear them sympathetically, but not in a form which disguises their true character.

Something of the same danger inheres in old-age pensions. Workmen of usual diligence should receive a return for their labor which would enable them to provide for age. As long as workmen, reaching the age 388 of three score, generally become dependent on the public, it is perfectly plain that their wages are too low, that the returns of production are not fairly distributed. A pension acknowledges the evil, but does not remove it, it tends rather to confirm it. That the losses which accompany industrial accidents should be divided between workmen, managers and the community at large is plainly just, and is no temptation to remissness. The accident is not the fault of any one person or class of persons. If it falls upon a large number, it is more readily borne and increases the motives to care. Our machinery is operated for the benefit of the entire community, and it is only fair that the entire community should help to bear the increased dangers. That injuries should be still left with the workmen on whom they have accidentally fallen is another proof of the slight hold they have on the public mind.

Any remedy for the lack of employment which is prompted simply by compassion and still leaves the evil to overtake the workman is not social hygiene; is not a recognition of the partiality and disproportion which still inhere in our productive methods. Labor should be successful and rewardful when left to its own development. It is bad to create a pauper temper and most difficult to contend with it when it has once been called out. Men should be subject to their own incentives of hope and fear, success and failure, as far as possible. The same discipline which comes to the active, is the natural spring of action in the sluggish. Any compassion which reduces the motives of effort that should come to the entire community, or which leaves the community satisfied with a maladjustment of duties, can never provide an adequate correction of bad distribution. We are placed between a narrow and a wide humanity, between an immediate reduction of suffering and a removing of its conditions. The final result is the test of our wisdom and good will.

There are partial remedies of the failure of employment which are 389 fitted to give relief without endangering the future or disturbing the general conditions of employment. Occupations especially irregular, like that of the stevedore, may receive especial attention, or may be united to other forms of labor so as to secure greater uniformity. In these occupations the employer may frequently have but little motive to correct an evil from which he prospers by reduced wages. Excess and deficiency in the various branches of work should be made, as far as possible, to correct each other. Workmen are often not in a position to meet successfully these evils. They accept the drift of the labor market with small power to control it.

Bureaus of intelligence should be established so that the variable demands for labor of different localities may be quickly met. This is a public service, and should have the ease and certainty of such service. The same reasons which lead the Government to take the direction of immigrants should lead it to render similar aid to workmen. Workmen are often ignorant of the extent and character of the employment offered in the distance, and are subject to the exactions which arise in connection with this want of knowledge. The greater one’s want the more difficult is the change of locality. Quickness of response demands both intelligence and nobility.

Savings banks and insurance, while not directly affecting the demand for labor, tend to equalize and reduce the losses which accompany variability. They also tend strongly to call out that forecast of evil and preparation for it which belong to thoughtfulness. The strokes of fortune lose something of their unexpected and injurious character, and men are put on voluntary and better terms with the world.

We are not, however, to look on these reductions of danger as covering the whole problem. Life has its accidents and we can greatly reduce the evil results of them by patience and prudence, but there still 390 remains the more thoroughgoing effort by which the evil is anticipated and turned aside.

There should be that general harmony of effort, that proportion of its several parts to each other, that recognition of the common welfare, which fortify us against disaster, and force it in the background when it comes. There is a wise method in production, and a just relation of its agents to each other, which should greatly reduce the liability of a want of labor, and should ultimately remove it altogether. A true democracy should be exempt from this general failure in the results of activity. Much of our political economy has rested on inferences drawn from a faulty state of society, as if it and the conclusions contained in it expressed the real laws of our being. Society, in its most civilized forms, has always developed a proletariat, it has suffered drainage, and we have come to think this a sort of necessity, a natural result of social growth. With this starting point and expectation we are ready for periods of unemployment, and look at the misery which arises from them as a corrective. Superfluous lives cannot be gotten rid of on cheaper terms. We might as well suppose that disease is an inevitable attachment of physical life and must be left to go with it. Society never has too many workers, and when they are not wanted it is because they have been in some way misdirected. Strong men, industrious and intelligent men, are the wealth of society. There is never a time in which there is little or nothing to do in the world; if we think so it is because we cannot see, or see falsely. Our intelligence determines what is to be done and our diligence performs it. The world is never deficient in occasions for labor, no matter how defective we may be in performing it. Nor is well-devised labor wanting in its returns; intelligence and diligence, in full exercise, always contradict the notion. The world could not be the home of man on any other terms. Human life begins to be superfluous 391 the moment labor miscarries, and the miscarriage sinks down to those who have the least intelligence and industry. The constitutional disease of society, that which it has propagated with most show of knowledge, is ignorance and indolence. When we reach this stratum we are always in difficulty; the more in difficulty because we come to it in a sluggish rather than in a corrective temper.

Incident to indolence and ignorance are those vices of temper by which we wish to reach results without labor, or to reach them by the labor of others rather than by our own labor. As long as these vices are prevalent among men, whether in the upper or the lower strata of society, or, as is sure to be the case, in both, periods of arrest will come. Men will be baffled in their narrow aims, and will have no broader, more generous ones to put in their place. For a time they will lie idle till the customary impulses revive and once more set them in action. Industrial inactivity is like a financial panic. It is the result of the transient suspension of habitual feelings, and does not relax till men return to their usual frame of mind. These distrustful and apprehensive periods are liable to return as long as men are not pursuing sound purposes in a sober way. Any deficiency in fairness, integrity and mutual confidence divides society against itself, and renders a portion of its efforts futile. This is the more true as the division and subdivision of labor increases, and the final adjustment of returns is made by complicated exchanges. When a portion of the community finds its share of good things much reduced, when in the distribution of the rewards of labor, custom or cunning or force has robbed them of a reasonable portion, the motives of labor are greatly lessened, the means of exchange are lessened and the sense of unity and integrity of society is lost. There is in civilized society a large body of just and honest production which goes far to sustain the mind in renewed effort, and keep firm the ties which bind men 392 together. Yet the element of distrust, as in a financial crisis, extends through the community and weakens the points of life.

The first condition of social, economic strength is that all the members of society shall find suitable occupation and by means of it become the givers and receivers of aid. This plain, simple fact has been much obscured by accepting competition, often in an unethical and unsocial form, as the general law of economic activity. This law it is not; and it needs at all times to be held in check by ethical impulses and by the welfare of the community. It is this welfare which is the supreme law. Labor owes much of its degradation to a rigid and unreasonable application of competition. As we go down in the scale of occupations, and in efficiency in those occupations, the greater is the injustice and injury that attend on competition till we reach a point at which large numbers are pressed by it to the very verge of life. Then comes in that mischievous generalization which tends to make human degradation a permanent product of nature. The increase of human life is said to be geometrical, the increase of the means of life arithmetical, and so the two tendencies grind eternally against each other. Our best sympathy is expressed in letting this collision come to the quickest, shortest results. Some of this crushing process obtains between ill-trained and sluggish, well-trained and active men. Let it have way.

Yet the agricultural products of the world have not only never given out, they have never been brought near a maximum. Food, raiment and shelter are most varied in kind and abundant in quantity where men are most numerous. The Algonquin Indian wandered in the forest in the winter, unfed and unsheltered. The foundation of his trouble was his indolence and ignorance. The inhabitants of India may perish by famine in large numbers. The distress arises not from the fact that the people have outstripped the productive power of the world, but 393 because they have outstripped their wisdom in handling those powers.

Let men covet wealth, and at the same time use narrowly and competitively the means of attaining it, and the two strata of society, upper and lower, will shape between them a human life in which want will stand over against luxury, hatred over against contempt, and the two classes, oppressed by spiritual destitution and physical poverty, will wage with each a variable and hopeless warfare such as wisdom and good will can alone leave behind us.

A first remedy for unemployment is to make employment remunerative; so remunerative that the workman shall be the buyer of many things as well as the seller of one thing. When his single sale of labor stands in equipoise over against his many purchases, we shall have buyers as well as sellers and our production and traffic will never cease. We have in trade-unions a first step in the adjustment of exchange. Workmen strive to escape the competition of the incompetent and shiftless, to redirect distribution in ways more just and equal, and by this means to be able to play their own part in economic life more advantageously for themselves and for all. This effort is new in its breadth of application, but has never been new with the wise and thrifty. Personal skill and professional attainments have always lifted themselves above the storm-swept plain of competition, and gathered about themselves a prosperity and comfort resting on special and superior exertion. So long as we subject ourselves to the fortunes of the indolent and set up our standards of life at the very foot of the slope, we shall have a competition like that of the Chinese to contend with. We shall march so near the verge of the precipice that many will be pushed over it, and the least flurry will be disastrous. A sufficient return for diligence is the first claim and the safety of labor; it enhances its motives and fortifies it in the 394 possession of what it holds.

With paucity of pay on the one side goes the superabundance of profits on the other side. The returns of management should be more moderate, more uniform, more consonant with the general welfare. We can hardly doubt that an industrial community, well-organized, with a fair share of intelligence, diligence and honesty, will commend reasonable prosperity extending to all its members. Indeed this is what actually takes place in the midway forms of effort. The very poor and the very rich complement each other. Healthy and wholesome activity is as possible to the community as to the individual. The chief difference lies in the increased complexity of communal action and the ease with which results are misunderstood and misinterpreted. The instinctive and voluntary life of the individual is replaced in the community by divided counsels. Men shape opinion and interpret results in view of their own interests rather than in view of the public welfare. The public welfare is as much within the scope of human thought, when attention is directed to it, as is individual well-being. Indeed the universal and stable prosperity of economic society is as much dependent on the diligence and sobriety of its members as is individual welfare on well-ordered labor. The qualities which enhance success in the one direction are much the same as those which cause it in the other direction. Extreme and intemperate action work the same mischief in the one field as in the other. Society is sufficient unto itself when its purposes and methods are truly social. A sudden suspension of labor, a large number out of employment, are the result of disturbing causes which have found their way into the ordinary processes of production. These causes are an unreasonable accumulation of power in single hands, speculative ventures and a social philosophy which holds in light esteem the immediate interests of the mass of 395 the community. I have in mind a peculiar manufacture which had provided the needed buildings, and surrounded itself with the homes and help called for. There came a combination of those engaged in this industry. The works, comparatively new, were discontinued. Production sought a new center and the old community was left to suffer the loss of slow dispersion.

We are protected against theft and criminal violence, but we are not protected against the unprovoked losses which come to us from the speculative aims of the adventuresome capitalist, though these losses may greatly exceed those of robbery. The stability of labor and the returns of labor are often affected in the great centers of production by opportunities, fanciful or real, which offer themselves to a few of achieving large wealth; opportunities not so much of creating wealth as of raking it together. The mass of men do not so much as conceive that they have any ground of complaint of operations which sweep out from under them the supports of well-devised industry. Wealth which in its making and use tends to break up the ordinary methods of industry, to throw off the minds of men from the familiar reconciliations of industry and, above all, to weaken the sense of responsibility which lies between labor and capital, must, from time to time, issue in industrial disaster to the confusion and loss of labor. Do the best we may and we cannot anticipate every disturbance, but we are inexcusable for overlooking the disasters we bring upon others who are working with us. Much of what is called enterprise renders those engaged in it almost wholly negligent of the incidental injuries which fall to those about them. The equilibrium of labor is dependent on the equilibrium of productive enterprises, and when these accept no restraints the disturbance will reappear here and there in the productive world very much at random. Labor presses at one point and is relaxed at another, subject to the speculative schemes of capital. Extreme wealth in the hands of a few lacks the economic and social and moral motives which 396 make it a calculable and reliable means in the hands of many. When it is in the process of accumulation it is lawless; when it is accumulated it sinks into indolence.

While some gains are pretty sure to accompany the acquisition of great wealth, once acquired, it disturbs the even flow of economic forces, and may easily give rise to irregular occupation that brings serious disturbance to those whose daily wants are to be supplied by labor. It may be thought that these fluctuations in production arise from its very nature, and that if we leave men of very different degrees of intelligence to contend with each other for the prizes of industry, great inequalities of prosperity are sure to appear. We can escape them only by forcing back enterprise and making the moderate, medium men the standards of achievement. This presentation seems plausible, and will always be urged by those who are willing or eager to take large risks. Men of large productive power are easily stimulated, and their resources are kept, in reference to the community at large, in the most fruitful form when they are compelled to moderate their efforts, and are not left to the extreme and eccentric ways normal to them. The community is interested in habitual lines of industry more than in those which disturb the minds by sudden profits which cannot be emulated or repeated. Men will separate themselves from their fellows in the rivalries of production. Only thus is the power of intelligence fully disclosed, yet the ordinary arrangements of society, its privileges and opportunities, should be made as equal as possible; no unfair advantage should be given to one or another form of production; nor methods be allowed to the successful in achieving wealth which are not admissible in the community at large. The laws of the game should be wisely framed and firmly preserved. It is the able and ambitious who bring the most strain to safe restrictions, and for whom they are chiefly made. Equality of opportunity is the cardinal 397 principle, and cannot be sacrificed in favor of enterprise. The enterprise that is wholesome keeps within this law. It may also be thought that this rigid restraint would deprive the community of some of the most prevalent means of welfare as well as of some of the most illustrious agents in prosperity, and that those great and efficient combinations which we have come to designate as trusts would be lost to us; that as the result of this loss we should quickly settle down into a sluggish routine, mediocre ideas ruling the public mind, and so miss that very prosperity of which we are in search. Industrial corporations are most efficient agents in wealth-making. We cannot for a moment think of throwing any real obstacle in the way of their formation. But while we need their aid, we should also remember the evils which are liable to come with them. They are the creatures of law, and the law in giving birth to them should assign them the form and restrictions which are most consistent with the public welfare. They are not to be allowed to fall into speculative hands, an instrument of unrestrained power.

Industrial corporations afford ready means by which small capital and moderate men are compacted into a service quite beyond the range of individual producers. The difficulty has been that much dishonesty has entered into the formation of corporations, and that unreasonable power has been exercised by those who have had them in charge. The responsibility of a corporation to the community, expressed in a sound financial organization and in the relation of its officers to its stockholders, would in no way restrain the usefulness of these industrial agencies, and would make them wholly consistent with extended and equal opportunities in production. Immense wealth has often been acquired in connection with corporations whose usefulness to the public has been thereby restricted and the profits of stockholders disregarded. Nowhere is the eagerness of personal enterprise so tempted, nowhere does it display itself more 398 disadvantageously than in the large and oftentimes obscure undertakings of corporations. It is not in reduction of these agencies, but in behalf of their safe and profitable use, that the claim arises for uniform and well-regulated action. In large corporations, as in insurance companies, when the business itself has fallen into routine, extravagant salaries have been resorted to as a means of increasing the returns of officers. Oftentimes the plea for raising salaries is one which is self-propagating. Expenses have been greatly enlarged and the remuneration must keep pace with them. Yes, but will not this very increase lead to increased expenditure? Industrial corporations have been, in the present generation, a conspicuous means of production, but they have also conspicuously promoted a bad distribution of wealth, and so helped to promote irregularity and ultimate suspension in the productive process. There may never come a time in which the adventuresome capitalist will not magnify his own usefulness to the community, but there may come a time in which men shall see that the wealth of a few may be purchased at the expense of that general comfort which is the proper return of industry.

A possible rapidity in the acquisition of wealth inflames the speculative temper. We mean by the speculative temper, purchase and sale, not in reference to production but with the hope of making large profits independently of production. Speculation is an expression of a venturesome spirit which, in its impatience, lays light emphasis on the usually slow methods of increase, and promises itself a rapid road to success. This hope is often disappointed, and when disappointed carries with it a more or less extended retardation of business. When the annual losses by bankruptcy in the United States reach $200,000,000, the distress of those whose means of livelihood have been involved in this overthrow must become a very sensible factor. 399 Such a sum would, in its successful use, provide for many households.

The temper which goes with sanguine and unscrupulous methods is a careless, and often a cruel, one. The democratic notion of equality is overridden, is pushed aside as of no significance in the business world. The same persons who insist on an open shop, and give free play to competition when it depresses labor, regarding it as a familiar and convenient principle in determining wages, may combine with each other to control products and enhance profits. The general welfare, which is the controlling idea, is lost sight of or readily forgotten. They have one standard when they look out on the community at large, and another standard when they are preparing the way to make and hold fast their own gains. The directors of business come easily to think that the welfare of the community is identical with their own welfare, and that the enterprise with which they sustain their own affairs is identical with that on which the public prosperity depends. They readily come to the conclusion that their activity, so essential to the community, should be cherished by the community. How possibly can production progress without them. Discrimination in their favor is a short cut to the common prosperity. Men of comfortable means and the poor even owe what they have to the enterprise which scatters wealth everywhere. There is sufficient truth in this feeling, when not too boldly put, to hide its failures. The expenditures of the very rich in the purchases and exchanges they involve do carry a measure of advantage to all, but they also bear with them an unjust distribution, a luxury and a poverty, which weaken the unity and sap the strength of society. It is the very gist of democracy that each man shall count one; that in spite of the diversities and the advantages among men they shall still remain units of the same value in the freedom and propagating power by which the gains of the race are stored. It is neither identity nor 400 arbitrary difference that is admissible, but every man and every class of men carry with them the potentialities, the social and spiritual possibilities, which are the germs of historic development. This is the principle with which all petty social distinctions and all civic tyrannies have been at war.

While, therefore, the evil of monopolies may appear in various forms and be met in different ways, they cannot be permanently removed except by social conditions which equalize opportunities and compel wealth and power, in all their activity, to conform to general safety. Production in all its forms and in all its agents must be subject to that temper of fairness, and come under those principles of equal rights, which bind the parts of the community together, and make them one producing and one enjoying agency. Every assertion of settled superiority in persons, classes and races must be set aside, and the world in its physical, intellectual and spiritual wealth be left open to all. Thus history has treated men, and is more and more treating them, in their claims to consideration. This birthright of men is not to be denied or stolen; for they who steal it have nothing more than this same birthright to plead in extenuation, the combinations which look to the defense and extension of these original gifts are in order, and all combinations which carry them beyond the bounds of their own territory are another outbreak of anarchy.

The soundness of this assertion has been recently exemplified in the history of Pittsburg. Pittsburg is the center of an industry which has come, perhaps more than any other, under the domination of a few leading men. In the Homestead strike they succeeded in dealing a heavy blow to workmen in their efforts to secure something like a fair hold on production. A little inquiry into a community built up for a few and ordered by them discloses conditions quite at war with general well-being. Wages are kept down by the constant presence of the unemployed: the accidents of a dangerous occupation are left to fall 401 upon workmen; the health of the community suffers great neglect, the remonstrances of workmen are met with the response, If they do not like the method let them quit; and the general good order and comfort of citizens receive but little attention. Here is an object lesson in which work, sure, skilful and unflinching; wealth, eager, unscrupulous and unsympathetic, have divided the world between them; no right gained, no power lost. Men may make wealth under these conditions, withdrawing it from the fitting returns of labor, but they cannot, wise as they may be or generous as they may seem to be, restore that wealth to the community in a form in which it will subserve the same living purpose it might have subserved if it had never been withdrawn. The life of a community is achieved where its activity is most intense and constant. Failing in our service at these vital centers, no extraneous effort will cover our fault. We might as well draw sap from a tree and then pour it out on its roots.

We have now given three constitutional remedies for the want of employment. The first is a more equal distribution of the rewards of production, thus making the demand for products as extended and uniform as their production. The second is increased restraints, especially in connection with corporations, in the action of the leaders of industry, rendering them more amenable to the wants of the community to which they belong. The third, arising from the other two and supporting them, is more unity, more harmony between the several agents of production.

There was a report not long since in England of an industrial commission, which had given protracted attention to the irregular demand for labor. The remedies offered were chiefly palliative. It may be thought that this form of cure is all within our reach; that what is here offered as constitutional correctives are beyond our power. There is some truth in the feeling, and would be much truth in it, 402 were not the actions and the sentiments now enforced under urgent consideration for reasons of public welfare, not directly involved in unemployment. We cannot expect to remove so grave an evil as this, the wavering demand for labor, short of some important change in the organization of society. Society is a structure of so many and such delicate dependencies that its perfect action must include the general integrity of the current relations between men. Unwholesome results of frequent recurrence are the most direct proof of an unsound system. Palliatives may soften the evil but cannot overcome it. We should aim immediately to reduce the difficulty and ultimately to remove its causes.

QUESTIONS IN BUSINESS ADMINISTRATION. 403

BUSINESS ECONOMICS.

The Modern Industrial System.

1. Describe the three-field system of agriculture. Page 2.

2. What were the significant characteristics of a manorial
society? Page 2.

3. What is said to justify the institution of private
property? Page 4.

4. What is competition in modern industrial life? Page 4.

5. Why has the name “capitalistic production” been applied
to modern industry? Page 6.

6. Compare the domestic system of industry with the
factory system. Page 7.

7. What are the fundamental conditions of our economic
life? Page 8.

The Agricultural Resources of the United States.

1. What has been the policy of the Government in its
disposition of the public domain? Illustrate. Page 9.

2. What has been the unique and characteristic feature
of the land policy of the United States? Page 9.

3. What has been the result of the land policy of the
United States? Page 10.

4. What was the first effort toward the solution of
farming in the arid soils of the West? Page 10.

5. Explain what is meant by dry-farming. Page 11.

6. How do the farms of the United States compare in 404
size with those of European countries? To what is
this difference due? Page 11.

7. What does the movement of the population from the
farm to the city indicate? Page 13.

8. What change in method is agriculture undergoing in
the United States? Give the reason for this change. Page 14.

9. Discuss the cereal production of the United States. Page 15.

10. Upon what question does the future of the cotton
production depend? Page 17.

11. What movement is now put forth to aid in the
preservation of our forests? Page 18.

The Mineral Resources of the United States.

1. Into what groups may the natural resources of a
country be divided? Illustrate. Page 19.

2. What two answers are given to the problem of the
conservation of a limited supply of resources? Page 20.

3. What steps have been taken towards stopping the
devastation of our resources? Page 21.

4. What estimates are given as to the amount of coal
in the United States and as to how long this supply
will last? Page 22.

5. What is the most favorable situation for iron deposits?
State reasons. Page 24.

6. Where is the most wonderful iron-mining region in
the United States? What makes it such a remarkable
region? Page 24.

7. Of what importance are the precious metals? What
is the practical problem confronting American
gold-mining companies at present? Page 25.

8. To what use was copper put in Homeric times? What has 405
caused it to rise to the front rank in recent years? Page 26.

9. How does the present-day application of water power
to machinery differ from its application prior to
1890? Page 28.

Capitalistic Production.

1. What five causes does the census report give for the
rapid industrial development in the United States? Page 30.

2. Give Carroll D. Wright’s definition of a factory. Page 31.

3. Illustrate the two meanings which “division of labor”
may indicate. Page 32.

4. Show how the subdivision of labor brings about the
extension of labor-saving machinery. Page 33.

5. Name the economies of a large-scale production. Page 36.

6. What improvements have made large-scale production
possible? Page 36.

7. In what lines of business is there little or no
development toward large-scale methods? State the
reasons. Page 37.

8. What is meant by standardization? What are the
advantages of such a system? Page 38.

Trusts and Monopolies.

1. Enumerate the phases through which combinations for
the purpose of fixing prices, have passed. Page 40.

2. What is the advantage of the corporation? Page 41.

3. Give a brief history of the trust movement. Page 42.

4. What economies are secured by a combined or federated
industry? Page 43.

5. Name some of the savings which are peculiar to
trusts. Page 44.

6. Give an illustration showing the profits of a 406
successful trust promoter. Page 45.

7. What is the effect of industrial combinations upon
competitors? Upon producers of raw material? Page 46.

8. Explain the two phases of the relation between trusts
and labor. Page 47.

9. What conclusion as to the power of the combination
over prices, does the Industrial Commission reach? Page 48.

10. From what two sources do the evils of combination
come? What remedies have been suggested to meet
both classes of evils? Page 50.

Speculation and Crises.

1. How does the speculator reduce for the merchant the
speculative risk attaching to price fluctuations?
Illustrate. Page 52.

2. What social value lies in the service of the speculator?
Illustrate. Page 53.

3. Explain the difference between legitimate speculation
and illegitimate speculation (gambling). Page 54.

4. What is a crisis? Page 55.

5. Discuss the immediate occasion of a crisis. Page 56.

6. What is W. S. Jevons’ theory as to the causes of
crises? Page 58.

7. Explain the over-production theory which is given
as a cause for crises. Page 58.

8. What is the credit theory of the cause of a crisis? Page 59.

9. Where is the true explanation of a crisis to be found? Page 60.

10. Is it possible to prevent the recurrence of crises? Page 60.

The Modern Wage System. 407

1. Give some beneficial results and some abuses of the
factory system. Page 61.

2. Name five points which Mr. Hobson gives to show that,
in the transition to the factory system, the position
of the laborer has been one of increasing dependence. Page 62.

3. How does President Hadley define wages? Page 63.

4. Describe the systems of labor which preceded the
modern wage system. Page 64.

5. How has the extreme individualism of Adam Smith’s
theory been modified? Page 65.

6. What are the three peculiarities of the sale of labor? Page 66.

Labor Organizations and Collective Bargaining.

1. Why have labor organizations grown more rapidly in
the United States and England than on the Continent
of Europe? Page 69.

2. What are the two types of trade unions in the United
States? Page 69.

3. Describe the two most important national organizations
which have been in this country. Page 70.

4. What are the methods by which labor organizations
monopolize the labor market? Page 71.

5. Why do labor leaders object to piece work? Page 72.

6. What are the two arguments in favor of shorter
hours put forth by the trade unionist? Page 73.

7. What is the economic justification of the shorter
working day? Page 74.

8. Give illustrations where unions have directly limited
the amount of output. Page 75.

9. What is the attitude of the majority of the employers
in the United States toward collective bargaining? Page 77.

10. What erroneous ideas exist as to the purpose of labor 408
organizations? Page 78.

11. Describe the method of settling an industrial dispute
by conciliation. Why is the principle of arbitration
fast going out of favor? Page 79.

Women and Children at Work.

1. Describe the evils of the early factory system in
England. Page 80.

2. Are the women crowding the men out of their
occupations and taking their places? Page 81.

3. What is the most important reason for the low economic
position which woman occupies in the industrial
world? Page 83.

4. How does George L. Bolen justify the employment
of women? Page 86.

5. How can the evil arising from child labor be cured? Page 87.

6. What obstacles have been in the way of efforts to
improve labor conditions by legislation? Page 88.

7. Name, and give examples of, the two classes into
which the factory acts may be divided. Page 88.

8. What has been accomplished in the United States in
the way of labor legislation? Page 89.

Unemployment and Insurance.

1. Classify the unemployed. Page 91.

2. What are personal causes of unemployment? Page 92.

3. Name some industrial causes of unemployment. Page 93.

4. In what does the remedy for the normal unemployment
in modern industry lie? Page 95.

5. Suggest some methods of alleviation of the evils of
unemployment. Page 96.

6. State briefly the common law doctrine regarding 409
liability for accident. Page 98.

7. What have foreign countries done toward placing the
burden of industrial accidents upon the industry itself
and not upon the laborer? Page 99.

8. Describe the establishment of compulsory insurance
against sickness and old age in Germany; in Great
Britain. Page 100.

Machinery and Industrial Efficiency.

1. What three evils are charged against machinery? Page 101.

2. How does the reabsorption of labor displaced by
machinery depend upon the demand for an article? Page 102.

3. How may machine methods cause irregularities in
wages and employment? Page 104.

4. Show the need of a system of industrial education
in the United States. Page 107.

5. Describe the system of industrial education which
exists in Germany. Page 107.

6. How does the English system of industrial education
differ from the German? Page 108.

7. What is the character of the industrial schools of
the United States? Page 108.

8. How have the people of the United States been aided
in their industrial development? Page 109.

9. What two obstacles have been met by the movement
for better industrial education in the United States? Page 109.

Profit-Sharing and Co-Operation.

1. Name the three principal methods of profit-sharing. Page 110.

2. What is the economic theory of profit-sharing? Page 111.

3. What are the objections against the profit-sharing 410
system? Page 112.

4. Why is the system of profit-sharing comparatively
limited? Page 113.

5. According to President Hadley, where is there more
chance for the success of profit-sharing? Page 113.

6. How does co-operation differ from profit-sharing? Page 114.

7. What are the reasons for the lack of success of
co-operation in this country? Page 115.

8. Describe the methods of the Rochdale Society. Page 115.

9. How does producers’ co-operation differ from
consumers’ co-operation? Page 116.

10. Give three examples of successful productive
co-operation in the United States. Page 116.

11. Enumerate the advantages of co-operation. Page 116.

12. What is the ultimate ideal of enthusiastic
co-operators? Page 117.

13. Discuss the defects of co-operation. Page 117.