Chapter X: Socialism and the Social Question (1)

The renewal of the socialist agitation has not been unproductive of advantage, for it has led to a general recognition that the economic position of the people is far from satisfactory and is not free from peril, and that industrial development, on the lines on which it has hitherto been running, offers much less prospect than was at one time believed of effecting any substantial, steady, and progressive improvement in their condition. It is only too manifest that the immense increase of wealth which has marked the present century has been attended with surprisingly little amelioration in the general lot of the people, and it is in no way remarkable that this fact should tend to dishearten the labouring classes, and fill reflecting minds with serious concern. Under the influence of this experience economists of the present day meet socialism in a very different way from Bastiat and the economists of 1848. They entertain no longer the same absolute confidence in the purely beneficent character of the operation of the principles at present guiding the process of industrial evolution, or in the sovereign virtue of competition, unassisted and unconnected, as an agency for the distribution as well as the production of wealth; and they no longer declare that there is not and cannot possibly be a social question. On the contrary, some of them take almost as unfavourable a view of the road we are on as the socialists themselves. Mr. Cairnes, one of the very ablest of them, says: "The fund available for those who live by labour tends, in the progress of society, while growing actually larger, to become a constantly smaller fraction of the entire national wealth. If, then, the means of any one class of society are to be permanently limited to this fund, it is evident, assuming that the progress of its members keeps pace with that of other classes, that its material condition in relation to theirs cannot but decline. Now, as it would be futile to expect, on the part of the poorest and most ignorant of the population, self-denial and prudence greater than that actually practised by the classes above them, the circumstances of whose life are so much more favourable than theirs for the cultivation of these virtues, the conclusion to which I am brought is this, that unequal as is the distribution of wealth already in this country, the tendency of industrial progress--on the supposition that the present separation between industrial classes is maintained--is towards an inequality greater still. The rich will be growing richer; and the poor, at least relatively, poorer. It seems to me, apart altogether from the question of the labourer's interest, that these are not conditions which furnish a solid basis for a progressive social state; but having regard to that interest, I think the considerations adduced show that the first and indispensable step towards any serious amendment of the labourer's lot is that he should be, in one way or other, lifted out of the groove in which he at present works, and placed in a position compatible with his becoming a sharer in equal proportion with others in the general advantages arising from industrial progress." ("Leading Principles," p. 340.) He thinks it beyond question that the condition of the labouring population is not so linked to the progress of industrial improvements that we may count on it rising _pari passu_ with that progress; because, in the first place, the labourer can only benefit from industrial inventions which cheapen commodities that enter into his expenditure, and the bulk of his expenditure is on agricultural products, which are prevented from being cheapened by the increase of population always increasing the demand for them; and, second, the labourer is practically more and more divorced from the control of capital, and reduced to the position of a recipient of wages, and there is no tendency in wages to grow _pari passu_ with the growth of wealth, because the demand for labour, on which, in the last analysis, the rate of wages depends, is always in an increasing degree supplied by inventions which dispense with labour. He is thus debarred from participating in the advantages of industrial progress either as consumer or as producer: as consumer, by over-population; as producer, by his divorce from capital. Mr. Cairnes, like most economists, differs from socialists in thinking that the first requisite for any material improvement in the condition of the labouring classes lies in effective restraints on population, but he says that "even a very great change in the habits of the labouring classes as bearing upon the increase of population--a change far greater than there seems any solid ground for expecting--would be ineffectual, so long as the labourer remains a mere receiver of wages, to accomplish any great improvement in his state; any improvement at all commensurate with what has taken place and may be expected hereafter to take place in the lot of those who derive their livelihood from the profits of capital" (p. 335). Here he is entirely at one with socialists in believing that the only surety for a sound industrial progress lies in checking the further growth of capitalism by the encouragement of co-operative production, which, by furnishing the labouring classes with a share in the one fund that grows with the growth of wealth, the fund of capital, offers them "the sole means of escape from a harsh and hopeless destiny" (p. 338). Mr. Cairnes, then, agrees with the socialists in declaring that the position of the wage-labourer is becoming less and less securely linked with the progressive improvement of society, and that the only hope of the labourer's future lies in his becoming a capitalist by virtue of co-operation; only, of course, he is completely at issue with them in regard to the means by which this change is to be effected, believing that its introduction by the direct intervention of the State would be unnecessary, ineffectual, and pernicious.

I am disposed to think that Mr. Cairnes takes too despondent a view of the possibilities of progress that are comprised in the position of the wage-labourer, but it is precisely that view that has lent force to the socialist criticism of the present order of things, and to the socialist calls for a radical transformation by State agency. The main charges brought by socialists against the existing economy are the three following, all of which, they allege, are consequences of the capitalistic management of industry and unregulated competition:--1st, that it tends to reduce wages to the minimum required to give the labourer his daily bread, and that it tends to prevent them from rising above that minimum; 2nd, that it has subjected the labourer's life to innumerable vicissitudes, made trade insecure, mutable and oscillatory, and created relative over-population; and, 3rd, that it enables and even forces the capitalist to rob the labourer of the whole increase of value which is the fruit of his labour. These are the three great heads of their philippic against modern society: the hopeless oppression of the "iron and cruel law" of necessary wages, the mischief of incessant crises and changes and of the chaotic _regime_ of chance, and the iniquity of capital in the light of their doctrine of value. Let us examine them in their order.

I. Socialists found their first charge partly on their interpretation of the actual historical tendency of things, and partly on the teaching of Ricardo and other economists on natural wages. Now, to begin with the question of historical fact, the effect which has been produced by the large system of production on the distribution of wealth and the general condition of the working class is greatly misconceived by them. So far as the distribution of wealth is concerned, the principal difference that has occurred may be described as the decadence of the lower middle classes, a decline both in the number of persons in proportion to population who enjoy intermediate incomes, and also in the relative amount of the average income they enjoy. Their individual income may be higher than that of the corresponding class 150 or 200 years ago, but it bears a less ratio to the average income of the nation. The reason of this decline is, of course, obvious. The yeomanry, once a seventh of our population, and the small masters in trade have gradually given way before the economic superiority of the large capital or other causes, and modern industry has as yet produced no other class that can, by position and numbers, fill their room; for though, no doubt, the great industries call into being auxiliary industries of various kinds, which are still best managed on the small scale by independent tradesmen, the number of middling incomes which the greater industries have thus contributed to create has been far short of the number they have extinguished. The same causes have, of course, exercised very important effects on the economic condition of the working class. They have reduced them more and more to the permanent position of wage-labourers, and have left them relatively fewer openings than they once possessed for investing their savings in their own line, and fewer opportunities for the abler and more intelligent of them to rise to a competency. This want may perhaps be ultimately supplied under existing industrial conditions by the modern system of co-operation, which combines some of the advantages of the small capital with some of the advantages of the large, though it lacks one of the chief advantages of both, the energetic, uncontrolled initiative of the individual capitalist. But at present, at any rate, it is premature to expect this, and as things stand, many of the old pathways that linked class with class are now closed without being replaced by modern substitutes, and working men are more purely and permanently wage-labourers than they used to be. But while the wage-labourer has perhaps less chance than before of becoming anything else, it is a mistake to suppose, as is sometimes done, that he is worse off, or even, as is perhaps invariably imagined, that he has a less share in the wealth of the country than he had when the wealth of the country was less. On the contrary, the position of the wage-labourer is really better than it has been for three hundred years. If we turn to the period of the English Revolution, we find that the income which the labourer and his family together were able to earn was habitually insufficient to maintain them in the way they were accustomed to live. Sir M. Hale, in his "Discourse Touching the Poor," published in 1683, says the family of a working man, consisting of husband, wife, and four children, could not be supported in meat, drink, clothing, and house-rent on less than 10s. a week, and that he might possibly be able to make that amount, if he got constant employment, and if two of his children, as well as their mother, could earn something by their labour too. Gregory King classifies the whole labouring population of the country in his time, except a few thousand skilled artisans, among the classes who decrease the wealth of the country, because, not earning enough to keep them, they had to obtain occasional allowances from public funds. We do well to grieve over the pauperism that exists now in England. A few years ago, one person in every twenty received parochial support, and one in thirty does so yet. These figures, of course, refer to those in receipt of relief at one time, and not to all who received relief during a year. But for Scotland we have statistics of both, and the latter come as nearly as possible to twice as many as the former. If the same proportion rules in England, then every fifteenth person receives relief in the course of the year.[4] But in King's time, out of a population of five millions and a half, 600,000 were in receipt of alms, _i.e._, more than one in ten; and if their children under 16 years of age were included, their number would amount to 900,000, or one in six. Now, while the labourers' wages were then, as a rule, unequal to maintain them in the way they lived, we know that their scale of living was much below that which is common among their class to-day. The only thing which was much cheaper then than now was butcher meat, mutton being only 2d. a lb., and beef, 11/4d.; but half the population had meat only twice a week, and a fourth only once. The labourer lived chiefly on bread and beer, and bread was as dear as it is now. Potatoes had not come into general use. Butter and milk were cheaper than now, but were not used to the same extent. Fuel, light, and clothing were all much dearer, and salt was so much so as to form an appreciable element in the weekly bill. When so many of the staple necessaries of life were high in price, the labourer's wages naturally could not afford a meat diet. Nothing can furnish a more decisive proof of the rise in the real remuneration of the wage-labourer since the Revolution than the fact that the wages of that period were insufficient to maintain the lower standard of comfort prevalent then, without parochial aid, while the wages of the same classes to-day are generally able to maintain their higher standard of comfort without such supplementary assistance. Then the hours of labour were, on the whole, longer; the death rate in London was 1 in 27, in place of 1 in 40 now; and all those general advantages of advancing civilization, which are the heritage of all, were either absent or much inferior.

These facts sufficiently show that if the rich have got richer since the Revolution, the poor have not got poorer, and that the circumstances of the labouring class have substantially improved with the growth of national wealth. As far as their mere money income is concerned there is some reason for thinking that the improvement has been as near as may be proportional with the increase of wealth. The general impression is the reverse of this. It is usual to hear it said that while the labourers' circumstances have undoubtedly improved absolutely, they have not improved relatively, as compared with the progress in the wealth of the country and the share of it which other classes have succeeded in obtaining. But this impression must be qualified, if not entirely rejected, on closer examination. Data exist by which it can be to some extent tested, and these data show that while considerable alterations have been made in the distribution of wealth since the rise of the great industries, these alterations have not been unfavourable to the labouring classes, but that the proportion of the wealth of the country which falls to the working man to-day is very much the same--is indeed rather better than worse--than the proportion which fell to his share two hundred years ago. Gregory King made an estimate of the distribution of wealth among the various classes of society in England in 1688, founded partly on the poll-books, hearth-books, and other official statistical records, and partly on personal observation and inquiry in the several towns and counties of England; and Dr. C. Davenant, who says he had carefully examined King's statistics himself, checking them by calculations of his own and by the schemes of other persons, pronounces them to be "very accurate and more perhaps to be relied on than anything that has been ever done of a like kind." Now, a comparison of King's figures with the estimate of the distribution of the national income made by Mr. Dudley Baxter from the returns of 1867, will afford some sort of idea--though of course only approximately, and perhaps not very closely so--of the changes that have actually occurred. King takes the family income as the unit of his calculations. Baxter, on the other hand, specifies all bread-winners separately--men, women, and children; but to furnish a basis of comparison, let us take the men as representing a family each, and if so, that would give us 4,006,260 working-class families in the country in 1867. This is certainly a high estimate of their number, because in 1871 there were only five million of families in England; and according to the calculations of Professor Leone Levi, the working class comprises no more than two-thirds of the population, and would consequently consist in 1871 of no more than 3,300,000 families. If we were to take this figure as the ground of our calculations, the result would be still more striking; but let us take the number of working-class families to have been four millions in 1867. The average income of a working-class family in King's time was L12 12s. (including his artisan and handicraft families along with the other labourers); the average income of a working class family now is L81. The average income of English families generally in King's time was L32; the average income of English families generally now is L162. The average income of the country has thus increased five-fold, while the average income of the working class has increased six and a half times. The ratio of the working class income to the general income stood in King's time as 1:21/2, and now as 1:2. In 1688, 74 per cent. of the whole population belonged to the working class, and they earned collectively 26 per cent. of the entire income of the country; in 1867--according to the basis we have adopted, though the proportion is doubtless really less--80 per cent. of the whole population belonged to the working class, and they earned collectively 40 per cent. of the entire income of the country. Their share of the population has increased 6 per cent.; their share of the income 14 per cent.

Now, I am far from adducing these considerations with the view of suggesting that the present condition of the working classes or the present distribution of wealth is even approximately satisfactory, but I think they ought to be sufficient to disperse the gloomy apprehensions which trouble many minds as if, with all our national prosperity, the condition of the poorer classes were growing ever worse and could not possibly, under existing industrial conditions, grow any better; to prevent us from prematurely condemning a system of society, whose possibilities for answering the legitimate aspirations of the working class are so far from being exhausted, that it may rather be said that a real beginning has hardly as yet been made to accomplish them; and to give ground for the hope that the existing economy, which all admit to be a most efficient instrument for the production of wealth, may, by wise correction and management, be made a not inadequate agency for its distribution.

The socialists are not more fortunate in their argument from the teaching of economists than in their account of the actual facts and tendency of history. The "iron and cruel law" of necessary wages is, as expounded by economists, neither so iron nor so cruel as Lassalle represented it to be. They taught that the price of labour, like the price of everything else, tended to settle at the level of the relative cost of its production, and that the cost of its production meant the cost of producing the subsistence required to maintain the labourer in working vigour and to rear his family to continue the work of society after his day; but they always represented this as a minimum below which wages would not permanently settle, but above which they might from other causes remain for a continuity considerably elevated, and which, even as a minimum, was in an essential way ruled by the consent of the labouring classes themselves, and dependent on the standard of living they chose habitually to adopt. If the rate of wages were forced down below the amount necessary to maintain that customary standard of living, the marriage rate of the labouring classes would tend to fall and the rate of mortality to rise till the supply of labour diminished sufficiently to restore the rate of wages to its old level. And conversely, if the price of labour rose above that limit, the marriage rate among the labouring class would tend to rise and the rate of mortality to fall, till the numbers of the working population increased to such an extent as to bring it down again. But the rate of marriage depended on the will and consent of the labouring class, and their consent was supposed to be given or withheld according as they themselves considered the current wages sufficient or insufficient to support a family upon. The amount of the labourer's "necessary" subsistence was never thought to be a hard and fast limit inflexibly fixed by physical conditions. It was not a bare living; it was the living which had become customary or was considered necessary by the labourer. Its amount might be permanently raised, if in consequence of a durable rise of wages a higher standard of comfort came to be habitual and to be counted essential, and the addition so made to it would then become as real an element of natural or necessary wages in the economic sense as the rest. Its amount might also permanently fall, if the labourers ceased to think it necessary and contentedly accommodated their habits to the reduced standard, and there might thus ensue a permanent degradation of the labourer, such as took place in Ireland in the present century, when the labouring class adjusted themselves to reduction after reduction till their lower standard of living served, in the first place, to operate as an inducement to marriage instead of a check on it, because marriage could not make things worse, and at least lightened the burdens of life by the sympathy that shared them; and served, in the second place, to impair the industrial efficiency of the labourer till he was hardly worth better wages if he could have got them. So far then was the doctrine of economists from involving any "iron or cruel" limit that they always drew from it the lesson that it was in the power of the labouring classes to elevate themselves by the pleasant, if somewhat paradoxical, expedient of first enlarging their scale of expenditure. "Pitch your standard of comfort high, and your income will look after itself," is scarcely an unfair description of the rule of prudent imprudence they inculcated on working people. They believed that the chief danger to which that class was exposed was their own excessive and too rapid multiplication, and they considered the best protection against this danger to lie in the powerful preventive of a high scale of habitual requirements.

Moreover, Ricardo distinctly maintained that though the natural rate of wages was determined as he had explained, yet the operation of that natural law might be practically suspended in a progressive community for an indefinite period, and that the rate of wages actually given might even keep on advancing the whole time, because capital was capable of increasing much more rapidly than population. The price of labour, he taught, would in that case be always settled by the demand for it which was created by the accumulation of capital, and the sole condition of the accumulation of capital was the productive power of labour. The rate of wages in a progressive community might therefore almost never be in actual fact determined by this "iron and cruel law" at all, and so there is not the smallest ground for representing economists as teaching that the present system compels the rate of wages or the labourer's remuneration to hover to and fro over the margin of indigence.

Lassalle, then, built his agitation on a combination of errors. He was wrong in his interpretation of the tendency of actual historical development; he was wrong in his interpretation of the doctrine of economists; and now, to complete the confusion, that doctrine is itself wrong. If we are at all to distinguish a natural or normal rate of wages from the fluctuating rates of the market, that natural or normal rate will be found really to depend, not on the cost of producing subsistence, but on the amount or rate of general production, or the amount of production _per capita_ in the community, or, in other words, on the average productivity of labour. It is manifest that this would be so in a primitive condition of society in which industry was as yet conducted without the intervention of a special employing class, for then the wages of labour would consist of its product, and be, in fact, as Smith says, only another name for it. It would depend, however, not exclusively on the individual labourer's own efficiency, but also on the fertility of the soil and the general efficiency of the rest of the labouring community. While according to his own efficiency he would possess a greater or smaller stock of articles, which, after providing for his own wants, he might exchange for other articles produced by his neighbours; the quantity he would get in exchange for them would be great or small according to the degree of his neighbour's efficiency. The average real remuneration of labour, or the average rate of wages, in such a community would therefore correspond with the average productivity of its labour. But the same principle holds good in the more complex organization of industrial society that now exists, though its operation is more difficult to trace.

The price of labour is now determined by a struggle between the labourer and the employer, and the fortunes of the struggle move between two very real, if not very definitely marked, limits, the lower of which is constituted by the smallest amount which the labourer can afford to take, and the higher by the largest amount which the employer can afford to give. The former is determined by the amount necessary to support life, and the latter by the amount necessary to secure an adequate profit. Now the space between these two limits will be always great or small in proportion to the general productivity of labour in the community. The general productivity of labour acts upon the rate of wages in two ways, immediately and mediately. Immediately, because, as is manifest, efficient labour is worth more to the employer than inefficient; and mediately, as I shall presently show, because it conduces to a greater diversion of wealth for productive purposes, and so increases the general demand for labour. In modern society, as in primitive, the labourer not only obtains a higher remuneration if he is efficient himself, but gathers a higher remuneration from the efficiency of his neighbours.

This will be obvious at once to any one who reflects on the improved remuneration of the common unskilled labourers. The man who works with pick and shovel makes, according to Mr. Mulhall's estimate, L30 a year now, while he only made L12 a year in 1800, when bread was about twice as dear, and yet he probably did quite as good a day's work then as he does now, except so far as his better wages have themselves helped his powers of labour, through affording him a more liberal diet, and in that case the same question is raised, How did he come to get these better wages? It was not on account of an increase in his own production, for that was the effect, not the cause; it was on account of the general increase in the productivity of all labour round about him. The great improvement in industrial processes have brought in more plentiful times, and he shares in the general plenty, though he may not have directly contributed to its production. He gets more for the same work, not merely because people in general, with their larger surplus, can afford to give him more, but because, having more to devote to industrial investment, they increase the demand for labour till they are obliged to give him more.

The proximate demand for labour is, of course, capital, but the amount of capital which a community tends to possess--in other words, the amount of wealth it tends to detach for industrial investment--bears a constant relation to the amount of its general production. There is a disposition among economists to speak of the quantity of a nation's savings, as if it was something given and complete that springs up independently of industrial conditions, and as irrespectively of the purpose to which it is to be applied as the number of eggs a fowl lays or the amount of fruit a tree bears. But, in reality, it is not so. The amount of a nation's savings is no affair of chance; it is governed much more by commercial reasons than is sometimes supposed. It is no sufficient account of the matter to say that men save because they have a disposition to save, because there is a strong cumulative propensity in the national character. They save because they think to get a profit by saving, and the point at which the nation stops saving is the point at which this expectation ceases to be gratified, the point at which enough has been accumulated to occupy the entire field of profitable investment which the community offers at the time. Some part of a nation's savings will always have originated in a desire to provide security for the future, but, as this part is less subject to fluctuation, it exercises less influence in determining the extent of the whole than the more variable part, which is only saved when there is sufficient hope of gain from investing it. There may be said to be a natural amount of capital in a country, in at least as true a sense as there is a natural price of labour, or a natural price of commodities. Capital has its bounds in the general industrial conditions and stature of the community, but it moves and answers these conditions with much more elasticity than the wage-fund theory used to acknowledge. It is, as Hermann said, a mere medium of conveyance between consumer and consumer, and has its size decreed for it by the quantities it has to convey. The general demand for commodities is a demand for capital. It creates the expectation of profit which capital is diverted from expenditure to gratify, and since it is itself in another aspect the general supply of commodities, it furnishes the possibilities for meeting the demand for capital which it creates. This whole argument may seem to be reasoning in a circle or wheeling round a pivot, and so in a sense it may be, for the wheel of industry is circular. The rate of wages depends on the demand for labour; the demand for labour depends on the amount of capital; the amount of capital depends on the aggregate production of and demand for commodities; and the amount of aggregate production depends on the average productivity of labour. It is but a more circuitous way of saying the same thing as the older economists said, when they declared the rate of wages to depend on the supply of capital, as compared with population; but it shows that the supply of capital is a more elastic element than they conceived, that it adjusts and re-adjusts itself more easily and sensitively to industrial conditions, including perhaps even those of population, and that it is governed in a very real way by the great primary factor that determines the whole size and scale of the industrial system in all its parts, the general productivity of labour. Taking one country with another, the rate of wages will be found to observe a certain proportion to the amount of production _per capita_ in the community.

This view will be confirmed by a comparison of the actual rate of wages prevalent in different countries. Lord Brassey has published an important body of positive evidence tending to show that the cost of labour is the same all over the world, that for the same wages you get everywhere the same work, and that the higher price of labour in some countries than in others is simply due to its higher efficiency. Mr. Cairnes, who did not accept this conclusion unconditionally, had, however, himself previously estimated that a day's labour in America produced as much as a day and a third's in Great Britain, to a day and a half's in Belgium, a day and three-fourths' or two days' in France and Germany, and to five days' labour in India. Now, when due regard is had for the influence of special historical circumstances, it will be found that the rate of wages observes very similar proportions in these several countries. In America it is higher than the relative productivity of the country would explain, because a new country with boundless natural resources creates a permanently exceptional demand for labour; because the facilities with which land can be acquired and wrought, even by men without previous agricultural training, affords a ready correction to temporary redundancies of labour; and because the labour itself is more mobile, versatile, and energetic in a nation largely composed of immigrants. Other modifying influences also interfere to preclude the possibility of a precise correspondence between national rates of wages and national amounts of production _per capita_, for different countries vary much in the extent of the fixed capital they employ to economize personal labour. But enough has been said to show that, if a natural rate of wages is to be sought at all, it must be looked for, not in the cost of the production of subsistence, but in the rate of the production of commodities; and while the standard of living and the price of labour tend to some extent to keep one another up, the higher standard of living prevalent among labourers in some countries is a consequence much more than a condition of the higher rate of wages, which the higher productivity of labour in those countries occasions.

There is therefore no ground for Lassalle's representation that the law of necessary wages condemns ninety-six persons in every hundred to an existence of hopeless misery to enable the other four to ride in luxury. The principles that govern the rate of wages are much more flexible than he supposed, and the experience of trade unions has sufficiently demonstrated that it is within the power of the wage-labourers themselves to effect by combination a material increase in the price of their labour. Trade unions have taken away the shadow of despondency that lay over the hired labourer's lot. Their margin of effective operation is strictly limited; still such a margin exists, and they have turned it to account. They have put the labourer in a position to hold out for his price; they have converted the question of wages from the question, how little the labourer can afford to take, into the question, how much the employer can afford to give. They have been able, in trades not subject to foreign competition, to effect a permanent rise in wages at the expense of prices, and they can probably, in all trades, succeed in keeping the rate of wages well up to its superior limit, viz., to the point at which, while the skilful employers might still afford to give more, the unskilful could not do so without ceasing to conduct a profitable business and being driven out of the field altogether. For unskilful management tells as ill on wages as inefficient labour. On the other hand, high wages, like many other difficult conditions, undoubtedly tend to develop skilful management. The employer is put on his mettle, and all his administrative resource is called into action and keen play. They who, like socialists, inveigh against this modern despot, ought to reflect how much less possible it would have been for wages to have risen, if industry had been in the hands of hired managers who were not put to their mettle, because they had no personal stake in the result. It must not be forgotten, however, that while trade unions are able to keep the rate of wages up to its superior limit, they have no power to raise that limit itself. This can only be done by an increase in the general productivity of labour, and, in fact, the action of trade unions could not have been so effective as it has been, unless the high production of the country afforded them the conditions for success. And since, in consequence of their action and vigilance, the rate of wages in the trades they represent may be now taken as usually standing close to its superior limit, the chief hope of any further substantial improvement in the future must now be placed in the possibility of raising that limit by an increased productivity.

Of this the prospect is really considerable and promising. Of course labourers will never benefit to the full from improvements in the productive arts, until by some arrangement, or by many arrangements, they are made sharers in industrial capital; but they will benefit from these improvements, though in less measure, even as pure wage-labourers. Their unions will be on the watch to prevent the whole advantage of the improvement from going towards a reduction of the price of the commodity they produce, and such reduction in the price of the commodity as actually takes place will enable its consumers to spend so much the more of their means on commodities made by other labourers, and to that extent to increase the demand for the labour of the latter. But the field from which I expect the most direct and extensive harvest to the working class is the development of their own personal efficiency. At present neither employers nor labourers seem fully alive to the resources which this field is capable of yielding, if it were wisely and fairly cultivated. Both classes are often so bent on immediate advantage that they lose sight of their real and enduring interest. It is doubtful whether employers are more slow to see how much inadequate remuneration and uncomfortable circumstances impair efficiency and retard production, or labourers to perceive how much limiting the general rate of production tends to reduce the general rate of wages. In labour requiring mainly physical strength, contractors sufficiently appreciate the fact that their navvies must be well fed if they are to stand to their work, and that an extra shilling a day makes a material difference in the output. But in all forms of skilled labour, likewise, analogous conditions prevail. Just as slave-labour is inefficient because it is reluctantly given, and is wanting in the versatility and resourcefulness that comes from general intelligence, so is free labour less efficient or more efficient in exact proportion to its fertility of resource and to the hopefulness and cheerfulness with which it is exerted; and both conditions are developed in the working class in precise ratio with their general comfort. The intelligent workman takes less time to learn his trade, needs less superintendence at his work, and is less wasteful of materials; and the cheerful workman, besides these merits, expends more energy with less exhaustion. But men can have no hope in their work while they live purely from hand to mouth, and you cannot spread habits of intelligence among the labouring class, if their means are too poor or their leisure too short to enable them to participate in the culture that is going on around them.

But if employers are apt to take too narrow a view of the worth of good wages as a positive source of high production, labourers are apt to take equally narrow views of the worth of high production as a source of good wages. The policy of limiting production is expressly countenanced by a few of their trade unions, with the concurrence, I fear, of a considerable body of working-class opinion. This is shown in their idea of "making work," in their prohibition of "chasing"--_i.e._, of a workman exceeding a given average standard of production--and in their prejudice against piecework. Their notion of making work is irrational. They think they can make work by simply not doing it, by spinning it out, by going half speed, under the impression that they are in this way leaving the more over to constitute a demand for their labour to-morrow. And so, in the immediate case in hand and for the particular time, it may sometimes be. But if this practice were to be turned into a law universal among working men, if all labourers were to act upon it everywhere, then the general production of the country would be immediately reduced, and the general demand for labour, and the rate of wages, would inevitably fall in a corresponding degree. Instead of making work, they would have unmade half the work there used to be, and have brought their whole class to comparative poverty by contracting the ultimate sources from which wages come. The true way to make work for to-morrow is to do as much as one can to-day. For the produce of one man's labour is the demand for the produce of another man's. There is nothing more difficult for any class than to reach an enlightened perception of its own general interest.

The objection usually made to "chasing" and piecework is that they always end in enabling employers to extract more work out of the men without giving them any more pay, and that they conduce to overstraining. Now piecework, without a fixed list of prices, is of course liable to the abuse which, it is alleged, masters have made of it. But with a fixed list of prices the labourers ought, with the aid of their unions, to be as able to hold their own against the encroachments of the masters under piecework as under day work, and piecework is so decidedly advantageous, both to masters and to men, that it would be foolish for the former to refuse the reasonable concession of a fixed list of prices; and it would be equally foolish for the latter to oppose the system under the delusive fear of a danger which it is amply in their own power to meet. There is a good deal of force in the view of Mr. William Denny, that piecework will prove the best and most natural transition from the present system to a _regime_ of co-operative production, because it furnishes many kinds of actual opportunities for practising co-operation; but whatever may be the promise of piecework for the age that is to come, there is no question about its promise for the life that now is. Mr. Denny, speaking from experience in his own extensive shipbuilding works at Dumbarton, says that "a workman under piecework generally increases his output in the long run--partly by working hard, but principally by exercising more intelligence and arranging his work better--by about 75 per cent., while the total amount of his wages increases by about 50 per cent., making a distinct saving in the wages portion of the cost of a given article of about 14 per cent." ("The Worth of Wages," p. 19.)[5] Similar testimony is given by Goltz, Boehmert, and a writer in Engels' _Zeitschrift_ for 1868, as to the effect of the introduction of piecework into continental industries, and Roscher ascribes much of the industrial superiority of England to the prevalence of piecework here. According to Mr. Howell, more than seventy per cent. of the work of this country is done at present by the piece, and the Trades' Union Commission found it the accepted rule in the majority of the industries that came under their investigation; in fact, in all except engineering, ironfounding, and some of the building trades. The engineers entertain a strong objection to it, and their union has sometimes expelled members who have persisted in taking it. But the system works smoothly enough when an established price-list has become a recognised practice of the trade. The objection that the piece system leads to careless, scamped and inferior work, call hardly be considered a genuine working-class objection. That is the look-out of the masters, and they find it easier to check quality than to check quantity. Another reason sometimes given against piecework is that under it some men get more than their share in the common stock of work, but there lurks in this reason the same fallacy which lies in the notion of "making work," the fallacy of seeking to raise the level of wages by limiting production, and so diminishing the common stock of work of society. Labourers seem sometimes to harbour an impression as if they were losing something when their neighbours were making more than themselves. Work appears to them--no doubt in consequence of the fluctuations and intermittent activity of modern trade--to come in bursts and windfalls, nobody knows whence or how, and they are sometimes uneasy to see the harvest being apparently disproportionately appropriated by more active and efficient hands. But in the end, and as a steady general rule, they are gainers and not losers by the efficiency of the more expert workmen, because productivity, so far from drying up the sources of work, is the very thing that sets them loose.

A more important objection is the danger of overstraining, against which of course the working class are wise to exercise a most jealous vigilance. But, in the first place, it is easy to exaggerate this danger. It is not really from any deepened drain on the physical powers of the workmen, so much as from a quickening of his mental life in his work, that increase in his productivity is to be expected. Mr. Denny, it will be observed, attributes the additional output under piecework not nearly so much to harder labour as to the exercise of more intelligence and to a better arrangement of the work. But, in the next place, to my mind the great advantage of piecework is that it affords a sound economic reason for shortening the day of labour. The work being intenser, demands a shorter day, and being more productive, justifies it. If the figures I have quoted from Mr. Denny are at all representative, then a labourer, working by the piece, can turn out 40 per cent. more in eight hours than working by the day he can do in ten. Differences may be expected to obtain in this respect in different trades and kinds of work, so that there possibly cannot be any normal day of labour for all trades alike, and each must adjust the term of its labour to its own circumstances. But wherever piecework can increase the rate of production to the extent mentioned by Mr. Denny, the day of labour may be shortened with advantage, and it can apparently do so in the very trades that most strongly object to it. A fact mentioned by Mr. Nasmyth, in his remarkable evidence before the Trades Union Commission, opens a striking view of the possibilities of increasing production through developing the personal efficiency of the labouring class, and of doing so without requiring any severe strain. "When I have been watching men in my own work," he says, "I have noticed that at least two-thirds of their time, even in the case of the most careful workmen, is spent, not in work, but in criticising with the square or straight-edge what they have been working, so as to say whether it is right or wrong." And he adds--"I have observed that wherever you meet with a dexterous workman, you will find that he is a man that need not apply in one case in ten to his straight-edge or square." And why are not all dexterous, or, at least, why are they not much more dexterous than they now are? Mr. Nasmyth's answer is, because the faculty of comparison by the eye is undeveloped in them, and he contends that this faculty is capable of being educated in every one to a very much higher degree than exists at present, and that its development ought to be made a primary object of direct training at school. "If you get a boy," he says, "to be able to lay a pea in the middle of two other peas, and in a straight line with these two, that boy is a vast way on in the arts." He has gone through a most valuable industrial apprenticeship before he has entered a workshop at all. If, through training the eye, workmen can save two-thirds of their time, it is manifest that there is abundant scope for increasing productivity and shortening the day of labour at the same time. Industrial efficiency is much more a thing of mind than of muscle. _Jeder Arbeiter ist auch Kopfarbeiter._ All work is also head work. Skill is but a primary labour-saving apparatus engrafted by mind on eye and limb, and it is in developing the mental faculties of the labourers by well-directed training, both general and technical, that the chief conditions for their further improvement lie. Their progress in intelligence may therefore be expected to increase their productivity so as to justify a shortening of their day of labour, and the leisure so acquired may be expected to be used so as to increase their intelligence. Any advance men really make in the scale of moral and mental being tends in this way to create the conditions necessary for its maintenance.