Chapter V: The Results of Property (2)

Among the public services they were supposed to render it was claimed that they would pay good wages and furnish steady employment.[102] Even the labor unions themselves were of this opinion. Their leaders testified that they did not fear industrial combination and that if combinations were able by virtue of their savings to increase the profits of industry, workingmen would be able by pressure to "maintain or increase their wages quite as readily as before the combinations were made."[103] Another contention made for trusts was that they would lower prices. With the view of maintaining this contention, the trust magnates themselves testified to the enormous economies effected by combination, for the purpose of persuading us that the consumers would profit by these economies. Mr. Havemeyer was honest enough, however, to admit that he would be guided in fixing the price only by business considerations. But it was believed at that time that business considerations would be sufficient to keep prices down and the experience of the Whisky Trust was cited to prove that it was impossible to maintain prices above a reasonable margin of profit.

The Whisky Trust was organized in 1887 and after having lowered prices for the purpose of eliminating competitors, it brought the prices up to as high a level as had ever been reached before. The result of this was that at the end of 1888 prices fell, owing to a reorganization of the trust and to a subsequent raising of prices by the trust in 1891, only to be followed by a corresponding fall in 1892. And so prices went on reaching a very high level at the close of 1892, only to fall back to a low level in 1893; and again to a high level in 1894, only to go down so low in 1895 as to put the trust into the hands of a receiver. By this time the Whisky Trust had learned its lesson; it learned that if it endeavored to put the price of whisky up to an undue height, new distilleries were started to profit by these high prices, and the only way of avoiding bankruptcy was to maintain the price just high enough to return profits to the trust, but not high enough to encourage outside competition.

Undoubtedly the opinion generally prevailed at the end of the last century that increase in price by the trust was not to be feared. But at that time trusts had not yet acquired the art of handling independent competitors. To-day the art has been acquired. Owing to the enormous capital they control and the enormous extent of territory they cover, they are in a position so to reduce prices in any one spot where competition becomes dangerous as to crush out the competitor in that place. They adopted this method recklessly at first, crushing out all competitors and then raising the price unduly. Now they have learned to maintain a group of competitors about them and to keep these competitors alive, keeping prices high so long as competition is not dangerous and depressing them just enough to crush out competition when it becomes dangerous.

The movement of prices since the end of last century is sufficient to demonstrate that trusts, far from reducing prices, are advancing them.

It must in all fairness to trusts be admitted that the enormous increase in the annual output of gold tends to increase prices, and it is extremely difficult to state just how much of the advance in price since the end of last century is due to the increased output of gold, and how much is due to deliberate advance on the part of the trusts. We have, however, a guide in the relation between increase of wages and increase of prices. If the advance in prices were due entirely to increased output of gold, wages ought to increase in the same proportion. But they do not.

Of the opinion expressed at the end of the last century that trusts would improve the condition of workingmen, there is very little left to-day.

From almost every point of view, trusts have since 1900 disappointed expectations. It was claimed and with every show of reason that trusts would, by their control of the market, be able to adjust supply to demand and thus avoid the gluts that produce unemployment,[104] and that although the economies they practised might result in the shutting down of some factories and the discharge of employees, in the end the workingmen would gain because their employment would be steady and because trade unions would have only one employer to bargain with instead of many.[105]

How far has experience justified these anticipations?

Far from diminishing unemployment, the reign of the trusts has resulted in the most intense and widespread depression that we have any record of.[106] Far from benefiting the unions, trusts have crushed unions out of existence. Far from raising wages and shortening hours, the employees of the Steel Trust in Pittsburg are to-day working twelve hours at $1.80 a day, and once a fortnight twenty-four hours in a single shift; whereas miners in the same district because their union has not yet been crushed by the Coal Trust, are working only eight hours at $2.36 a day.[107] And the Miners' Union has been saved from the trust only by what is still regarded by many as the improper personal intervention of President Roosevelt Oct. 31, 1902.

The conditions of labor under trust rule cannot be better described than in the Survey, an investigation published not by Socialists, nor even by persons inclined towards Socialism, but by believers in and upholders of the competitive system:[108]

"With this number, Charities and The Commons completes its presentation of the findings of the Pittsburg Survey, as to conditions of life and labor of the wage-earners of the American Steel district. The gist of the situation, as we find it, is as follows:

"I. An altogether incredible amount of overwork by everybody, reaching its extreme in the twelve-hour shift for seven days in the week in the steel mills and the railway switchyards.

"II. Low wages for the great majority of the laborers employed by the mills, not lower than other large cities, but low compared with the prices--so low as to be inadequate to the maintenance of a normal American standard of living; wages adjusted to the single man in the lodging-house, not to the responsible head of a family.

"III. Still lower wages for women, who receive for example in one of the metal trades in which the proportion of women is great enough to be menacing, one-half as much as unorganized men in the same shops and one-third as much as the men in the union.

"IV. An absentee capitalism, with bad effects strikingly analogous to those of absentee landlordism, of which Pittsburg furnishes noteworthy examples.

"V. A continuous inflow of immigrants with low standards, attracted by a wage which is high by the standards of Southeastern Europe, and which yields a net pecuniary advantage because of abnormally low expenditures for food and shelter; and inadequate provision for the contingencies of sickness, accident, and death.

"VI. The destruction of family life, not in any imaginary or mystical sense, but by the demands of the day's work and by the very demonstrable and material method of typhoid fever and industrial accidents; both preventable, but costing in single years in Pittsburg considerably more than a thousand lives, and irretrievably shattering nearly as many homes.

"VII. Archaic social institutions such as the aldermanic court, the ward school district, the family garbage disposal, and the unregenerate charitable institution, still surviving after the conditions to which they were adapted have disappeared.

"VIII. The contrast--which does not become blurred by familiarity with detail, but on the contrary becomes more vivid as the outlines are filled in--the contrast between the prosperity on the one hand of the most prosperous of all the communities of our western civilization, with its vast natural resources, the generous fostering of government, the human energy, the technical development, the gigantic tonnage of the mines and mills, the enormous capital of which the bank balances afford an indication; and, on the other hand, the neglect of life, of health, of physical vigor, even of the industrial efficiency of the individual. Certainly no community before in America or Europe has ever had such a surplus, and never before has a great community applied what it had so meagerly to the rational purposes of human life. Not by gifts of libraries, galleries, technical schools, and parks, but by the cessation of toil one day in seven, and sixteen hours in the twenty-four, by the increase of wages, by the sparing of lives, by the prevention of accidents, and by raising the standards of domestic life, should the surplus come back to the people of the community in which it is created."

It would be unfair, however, to the trusts not to recognize that in spite of the shameful conditions they create for the majority they do benefit a minority to no small degree. The highly skilled are highly paid; they are fairly safe from unemployment; they are also furnished an opportunity of purchasing stock, of which this minority avails itself. The effect of the trust system on the workingman is very much like that of the trade union; both benefit the highly skilled and highly efficient, but at the expense of all the rest.

Now those who believe in the competitive system regard this as proper; and that the highly skilled and highly efficient should fare better than the lazy and vicious is equally a part of the Socialist creed. All that the Socialist asks is that the punishment for falling short of the highest skill and the highest efficiency be _not so severe_ as that described by the Pittsburg Survey; and this not only in the interest of the victim, but in that of the community of which he forms an essential part. It is because Socialism proposes a plan for giving to the efficient what their efficiency earns without committing the inefficient to a life of degradation, that it is entitled to the consideration of practical business men.

The degradation of the majority is not the only evil that results from the trusts. The rich are accustomed to look upon this evil as necessary and, therefore, one that they cannot hope to do more than mitigate by philanthropy. They seem unconscious of the goal to which this evil is inevitably driving them; and it is to this goal that I want above all to direct their attention.

(_a_) _The Conflict Between the Trust and the Trade Union_

It might seem as though the title for this section ought to be the conflict between capital and labor rather than the conflict between trusts and trade unions. This, however, is a mistake. So long as labor and capital were disorganized, there was not much danger in the conflict between the two. The employer was too strong and he had on his side in case of disturbance, the police, the militia, and the law. The moment, however, that labor became organized, it became too powerful for the police; it became dangerous even to the militia; and it has in England been strong enough to change the law; and this in spite of the fact that the organization of the workingman in unions has compelled the employers to combine in associations and trusts.

Again, although all violence is injurious to individuals, the violence to which unorganized workingmen resort in local disputes with their employers, however injurious to local interests, tends to be essentially temporary and does not tend to overthrow economic or social institutions. The effect of organization, however, expresses itself in the magnitude of the conflicts to which it gives rise; as for example, the Homestead strike in 1892, the Pullman strike in 1894, and what was practically equivalent to a civil war in Colorado during 1903.

It is generally believed that violence is the peculiar weapon of the workingman. This again is a mistake. Employers have often been the first to have recourse to violence and under conditions which hardly seem pardonable. That a striking employee should be enraged at seeing his place taken by strikebreakers and should be driven by his rage to violence, is easily understood; but that employers, merely for the sake of keeping down wages and making more profit, should have recourse to it seems altogether unjustifiable. It is a matter of official record that the Carnegie Steel Company opened negotiations with Robert A. Pinkerton for armed men nineteen days before any strike occurred.[109] The report also says that there was "no evidence to show that the slightest damage was done or was attempted to be done to property on the part of the strikers,"[110] and so far as acts of violence are concerned, a personal investigation of the Colorado strike satisfied me that the Employers' Association was just as guilty as the miners. An impartial account of this struggle is to be found in the _Political Science Quarterly_[111] published by a board of which J. Pierpont Morgan is a member, and which cannot be accused therefore of tenderness to miners or leanings towards Socialism. It is difficult to justify the action of the mine owners in removing Moyer, Haywood, and Pettibone under the circumstances described by Judge McKenna in his dissenting opinion.[112]

If the trust managers have deliberate recourse to violence and questionable methods in their conflict with labor which involve merely a question of more or less profit, is there not excuse for the workingman who has at stake his very livelihood and that of his wife and children?

There are elements, however, in the coming conflict which to my mind make it clear that notwithstanding the enormous advantages which capital has over labor, it is labor and not capital that in the end will triumph. To understand these elements it is indispensable to consider the character of the advantages which the trusts have over the trade unions, and the character of the advantages which the unions have over the trusts.

(_b_) _Advantages of Trusts over Unions_

So far in America the conflict between trusts and unions has been confined to the economic field, and in the economic field it must be admitted that trusts have the advantage. In the first place, as has already been intimated, the trusts have at stake merely a matter of more or less profit. The trust can for the purpose of crushing the union, sacrifice part of its profit without material damage. The trust in this respect is in an infinitely better condition than the isolated employer, for whom a strike very often means bankruptcy. This is not the case with the trust. Its capital is too large and its operations are conducted over too great an area for any strike to threaten insolvency.[113]

Moreover, an isolated employer is far more at the mercy of the employees than a trust, because a strike very often deprives him of custom. The orders he cannot fill are filled elsewhere and he may never recover the custom he has in this manner lost. The trust, however, can allow a strike to take place in one factory without for that reason failing to fill all its orders; for it can transfer them to another of its numerous factories in another place. That this is regularly done by the trust is a matter of common knowledge. The case cited by the Industrial Commission[114] is that of the American Smelting and Refining Company which "continued its business in the districts where there was no strike, transferring the work as far as possible."

In America, at any rate, the trusts have also on their side not only the police and the militia, but the law. The courts have decided that in the case of strikes and boycotts the courts can by injunction commit for contempt and punish by imprisonment those who violate their orders. These questions have been carried to the highest court and all further attempts on the part of labor to fight these questions in the courts are practically certain to be unavailing. The remedy of the Federation of Labor is not to dispute these decisions in the courts, but to secure new legislation reversing existing decisions on this subject.

The English unions have discovered this and, by the organization of their Labor party, have wrested from the British Government the trades dispute law which has settled these questions in their favor.

So long as unions persist in fighting trusts exclusively on the economic field and in the law courts, the unions seem bound to suffer defeat.

There is one weakness in the armor of the trusts to which attention has not yet been sufficiently directed. Trusts suffer more from their victories than from their defeats; for a defeat as to the length of hours or rate of wages, while it strengthens labor a little, does not weaken the trust much. But every victory of the trust is the greatest calamity to which it seems at present exposed; for every victory tends to shift the arena from the economic field, where the trust is invincible, to the political field, where labor has every advantage. This will become clear when we examine the advantages of unions over trusts.

(_c_) _Advantages of Unions over Trusts_

The larger the number of workers in every industry, the weaker are they on the economic field. It has been pointed out that unions tend to divide labor. They not only separate the labor world into two bitterly hostile classes--organized and unorganized--but by the high rate of wages that they demand they tend also to create jealousy within the trade union between the efficient who can earn these high wages and the less efficient who cannot. If the working population were so small that the demand for labor was greater than the supply, then indeed the unions might control the situation. But experience has shown that, without accepting the exaggerations of Malthus, there is always a greater supply of labor than demand. Even in the most prosperous times between 3 and 4 per cent of the trade unions are unemployed and, outside the unions, there is a mass of unorganized labor, a great part of which is either working for wages insufficient to support life or is not working at all. These things inevitably produce hostility between the prosperous and highly paid members of the union and all the rest; and this hostility is a source of weakness in the economic struggle of capital against labor. The unions, too, instead of being able to apply their funds to maintain strikes, have to apply a large part of these funds to the support of unemployed, whether through sickness or through industrial depression.

Upon the economic field, therefore, numbers tend to cripple the worker in his fight against capital. On the political field, on the contrary, the larger the number of workers, the stronger they are; for every wage-earning man has his vote, and the vote of every wage-earner counts as much as that of every capitalist. On the political field there need be no division in the ranks of labor--organized and unorganized labor can unite on a platform looking to the political subjection of their common master. Indeed, if the trusts and employers were to succeed in the task which they seem to have set themselves--the destruction of every trade union--they would by so doing put an end to the principal obstacle which now prevents workingmen from uniting upon a common platform, for the suppression of unions would mean two things: it would persuade the defeated unionists that their only chance of successfully fighting capital was on the political field; and it would put an end to the hostility between organized and unorganized labor that is the principal obstacle at this moment to united action of any kind. Moreover, the workingman could so frame his political program as to secure the alliance of the whole exploited class; the small farmer, the domestic, the clerk, and all those who, out of interest or sympathy, find themselves arrayed against the exploiting class.

The discovery that the workingman is no match for his employer on the economic field having already been made in England, the Labor party there has no less than 40 members in Parliament, and this small contingent has been strong enough to obtain the legislation above referred to. It is the sense of inferiority on the economic field that has organized the millions who are every year swelling the ranks of the Socialist party in Europe.

The shortsightedness of employers in failing to take account of this fact has its humorous side. The employee was not very long ago ignorant and incapable of organization--economic or political--and without any vote on public affairs. It was only upon condition that he should remain ignorant and incapable of political organization and without any voice in public affairs that he could continue to suffer the domination of his employer--such as is described in the Pittsburg Survey. Yet the employer has given to every employee an equal vote with himself in public affairs, so that to-day the employees outvote the employers. Not content with this, and fearful lest the employee should not be able adequately to use his vote, the employer has covered the country with school-houses for the purpose of teaching the employee how to use it. Yet employers proceed upon the assumption that the intelligent, educated workingman of to-day, armed with a vote and capable of the organization displayed in his unions, will continue to endure such conditions as are described in the Pittsburg Survey as patiently in the future as he has done in the past!

So trusts continue complacently to crush out unions, oblivious of the fact that every union crushed drives its members to Populism, Socialism, Anarchism, pauperism, and crime.

Of all the folds ready to receive the unfortunates driven out of their unions by the trusts, which is the one least likely to prove dangerous to the state? This question does not seem to concern the trusts at all. They consider all these "isms" as equally vile, impractical, and obnoxious. Yet, if they would only give to this matter one-half the attention that they give to their business affairs, they could not fail to see that every union they crush raises for them a crop of political enemies who, if they show as much ability in political organization as they have shown in economic organization--and there is no reason why they should not--cannot but eventually secure a large majority in our legislatures. When they have done this; when they have the writing of a new constitution; when the police, the militia, the army, and the law courts are on their side, is it not better that this majority be intelligent and educated, as it might if Socialism were rightly understood, and not uneducated and violent, as it will certainly be if Socialism is not rightly understood? The conclusion to which we seem to be driven is that, so long as labor struggles with capital on the economic field through strikes, boycotts, and litigation, it is bound to be beaten; but that every victory of capital on the economic field shortens its reign; for it drives labor to abandon the economic field, where it is weak, for the political field, where it is strong; and that the evidence of constructive ability and self-restraint exhibited by labor in the organization and administration of the unions, indicates that that same ability exercised in the political field will make it invincible there:

"We are many; they are few."

If this be so, then capital can no longer afford to disregard or misrepresent the political aspirations of the army of labor. It may indeed turn out in the words of the Cumaean Sybil:

"Via prima salutis
Qua minime reris Graia pandetur ab urbe."

Our way of safety may be--not in the defeat of labor--but in its enlightenment.

We have before us two alternatives: We can continue to fight labor; to crush it; to create unemployment one day and wring our hands over it the next; to arm labor, educate it, and force it to organize an army of discontent that will eventually outvote capital and, with little or no preparation for its task, seize the reins of government. Or we can leave the fighting of labor to the trusts from which the whole public suffers as well as the workingman, and ourselves join in a reorganization of political forces that will make the legitimate demands of the disinherited our own, and at last lay the foundations of the Democracy that Lincoln through the smoke of the Civil War dimly foresaw.

FOOTNOTES:

[78] Since writing this I see that Jaures makes exactly the same observation in _Van Norden's Magazine_, August, 1909.

[79] The metronymic tribes were tribes in which there was practically no paternal relation. The mother was the head of the family and the offspring took her name. This condition of things prevailed for some time in ancient Egypt.

[80] This is elaborated in "Government or Human Evolution," Vol. II, p. 96.

[81] "Government or Human Evolution," Vol. II, p. 102.

[82] Translation, see Appendix p. 422.

[83] Article 414 of the French Penal Code and Law of 1799 of the British Parliament.

[84] Book III, Chapter III.

[85] "Organized Labor." By John Mitchell, p. 4.

[86] Ibid., p. 3.

[87] Report of the Industrial Commission, 1901, Vol. XVII, page 1.

[88] Bulletin of the Dept. of Labor, 1898, pp. 714-717.

[89] Andrew Carnegie's article on the Steel Industry in the Encyclopedia Americana, Vol. XIV.

[90] Statistical Abstract, 1908, p. 445.

[91] Report of the Industrial Commission, 1901, Vol. XVII, p. 1.

[92] Report of the Industrial Commission, 1901, Vol. XVII, p. lii.

[93] Ibid., p. liii, 1901.

[94] "Organized Labor," Chapter XXX.

[95] "Organized Labor," p. 240.

[96] Ibid., p. 163.

[97] "Organized Labor," p. 163.

[98] "English Socialism of To-day," pp. 99-100.

[99] Letter of Police Commissioner Bingham, New York city, N.Y. _Times_, Jan. 5, 1908. See Appendix, p. 423.

[100] Book II, Chapter III.

[101] Report of the Industrial Commission, 1901, Vol. I, p. 18.

[102] Report of the Industrial Commission, 1901, Vol. I, p. 29.

[103] Ibid., p. 31.

[104] "Most members of combinations feel that the tendency is to make work more permanent under the combination form of doing business, inasmuch as the combination is better able to adjust the supply of goods to the demand, and thus to secure regularity in their productive conditions." Report of the Industrial Commission, Vol. XIII, p. xxxi.

[105] "Some of the witnesses are of the opinion that the industrial combinations give to the labor unions a decided advantage, inasmuch as it enable them to deal with the trade as a whole instead of with separate manufacturers." Report of the Industrial Commission, Vol. XIII, p. xxxii.

[106] Book II, Chapter I, Unemployment.

[107] Pittsburg Survey, Charities, XXI, p. 1063.

[108] Charities, XXI, p. 1035.

[109] Senate Reports, 52d Congress, 2d session, Vol. I, Rept. No. 1280, p. xiv.

[110] Ibid., p. xiii.

[111] _Political Science Quarterly_, March, 1908.

[112] See Appendix, p. 424.

[113] Many workingmen still believe in the possibility of strikes and even of a general strike. I do not take account of such strikes, because they have not yet occurred and labor does not seem organized upon a sufficiently comprehensive scale to make such strikes possible.

[114] Report of the Industrial Commission, Vol. XIII, p. xxxi.