On he does this by taking wealth from other people. the contrary, by accumulating capital, by building mills, warehouses, railways, docks, and by skilfully organising trades, he often enables thousands of men to produce wealth, and to earn wages to an extent before impossible. The profits of a capitalist are usually but a small fraction of what he pays in wages, and he cannot become rich without assisting many workmen to increase the value of their labour and to earn a comfortable subsistence. 58. Arbitration. We have now considered at some length the evils arising from the present separation of interests between the employed and their employers. The next thing is to discuss the various attempts which have been made to remedy these evils, and to bring labour and capital into harmony with each other. In the first place, many people think that when any dispute takes place, arbitrators or judges should be appointed to hear all that can be said on both sides of the question, and then decide what the rate of wages is to be for some time to come. No doubt a good deal may be said in favour of such a course, but it is nevertheless inconsistent with the principles of free labour and free trade. If the judges are to be real arbitrators, they must have power to compel obedience to their decision, so that they will destroy the liberty of the workman to work or not as he likes, and of the capitalist to deal freely with his own capital, and sell goods at whatever price suits the state of the market. If wages are to be arbitrarily settled in this way, there is no reason why the same thing should not be done with the prices of corn, iron, cotton, and other goods. But legislators have long since discovered the absurdity of attempting to fix prices by law. These prices depend entirely upon supply and demand, and no one is really able to decide with certainty what will be the conditions of supply and demand a month or two hence. Government might almost as wisely legislate about the weather we are to have next summer as about the state of trade, which much depends upon the weather, or upon wars and accidents of various kinds, which no one can foresee. It is impossible, then, to fix prices and wages beforehand by any kind of law or compulsory decision. The matter is one of bargain, of buying and selling, and the employer must be at liberty to buy the labour required at the lowest price at which he can get it, and the labourers to sell their labour at the highest price they can get, both subject of course to the legal notice of a week or fortnight. 59. Conciliation. Though the compulsory fixing of wages is evidently objectionable, much good may be done by conciliators, who are men chosen to conduct a friendly discussion of the matters in dispute. The business is arranged in various ways; sometimes three or more delegates of the workmen meet an equal number of delegates from the masters, who place before the meeting such information as they think proper to give, and then endeavour to come to terms. In other cases the delegates lay their respective views before a man of sound and impartial judgment, who then endeavours to suggest terms to which both sides can accede. If the two parties previously engage that they will accept the decision of this conciliator or umpire, the arrangement differs little from arbitration, except that there is no legal power to compel compliance with the decision. Discredit has been thrown upon this form of conciliation by the fact that the workmen have in several instances refused to abide by the award of the umpire when given against them, and of course it cannot be expected that masters will accept adverse decisions as binding under such circumstances. Thus I am led to think that the con ciliator should not attempt to be a judge; he should be merely an impartial friend of both sides, trying to remove misapprehension and hostile feelings, enlightening each party as to the views and reasons and demands of the other-acting, in short, as a gobetween, and smoothing down the business as oil eases the movement of a machine. The final settlement must take the form of a voluntary bargain directly between the employers and employed, which will only have compulsory effect during the week or fortnight for which workmen usually enter into a legal agreement. Conciliation may in this way do much good, but it cannot remove the causes of differenceit cannot make the men feel that their interest is one with the interest of their employers. 60. Co-operation. Among the measures proposed for improving the position of workmen, the best is co-operation, if we understand by this name the uniting together of capital and labour. The name co-operation is used indeed with various meanings, and some of the arrangements called by it have really nothing to do with what we are now considering. To co-operate means to work together (Latin, con, together, and operor, to work). About thirty-five years ago some workmen of Rochdale, noticing the great profits made by shopkeepers in retail trade, resolved to work together by buying their own supplies wholesale, and distributing them amongst the members of the society which they established. They called this a co-operative society, and a great number of so-called co-operative stores have since been established. Most of these are nothing but shops belonging to a society of purchasers, who agree to buy at the store and divide the profits. They have on the whole done a great deal of good by leading many men to save money and to take an interest in the management of affairs. The stores are also useful, because they compete with shopkeepers, and induce them to lower their prices and to treat their customers better. We frequently hear now of shops selling goods at cooperative prices. But such co-operative societies have little or nothing to do with the subject of capital and labour. Commonly these stores are conducted less upon the true co-operative principle than ordinary shops. A shop is usually managed by the owner or by a man who has a large interest in its success, and has the best reasons for taking trouble. Co-operative stores, on the contrary, are often managed by men who are paid by salary or wages only, and have nothing to do with the profits and the capital of the concern. Real co-operation consists in making all those who work share in the profits. At present a workman sells his labour for the best price he can get, and has nothing further to do with the results. If he does his work well, his master gets the benefit, and if he works badly his master is injured. It is true that he must not be very lazy or negligent for fear of being discharged; but if he takes care to be moderately careful and active, it is all that he need do for his own interests. No doubt it would be a good thing to reward the more active workmen with higher wages, and a wise employer endeavours to do this when he can, and to put the best workmen into the best places. But the trades-unions usually prevent it as far as they can, by insisting that men doing the same kind of work in the same place shall be paid alike. Moreover, as we have seen, many men are under the mistaken belief that if they work hard they decrease the demand for employment, and tend to take away the bread from their fellow-men. Thus it is not uncommon for workmen to study how not to do the work too quickly, instead of striving to make the most goods in the least time with the least trouble. Workmen do not see that what they produce forms in the long run their wages, so that if all workmen could be incited to activity and carefulness, wages would rise in all trades. The best way 61. Industrial Partnerships. of reconciling labour and capital would be to give every workman a share in the profits of his factory when trade is so prosperous as to allow of it. Charles Babbage proposed, in the year 1832, that a part of the wages of every person employed should depend on the profits of the employers. In recent years this has been tried in several large works, especially in Messrs. Briggs' collieries, and in Messrs. Fox, Head & Co.'s iron-works. The arrangement generally made with the men was that the capitalists should first take enough of the profits to pay 10 per cent. interest on the capital, together with fair salaries for the managers as wages of superintendence, a sum to meet bad debts, the repairs and depreciation of the machinery, and all other ordinary causes of loss. Such profit as remained was then divided into two equal parts, one of which went to the employers, while the other was divided among the workpeople in proportion to the amounts of wages which they had received during the year. Many workmen under such a scheme found themselves at Christmas in possession of five or ten pounds, in addition to the ordinary wages of the trade received weekly during the year. This kind of co-operation has been called industrial partnership, and, if it could be widely carried into effect, there would arise many advantages. The workmen, feeling that their Christmas bonuses depended upon the success of the works, would not favour idleness, and would have some inducement for preventing needless waste whether of time or materials. By degrees they would learn that the best trades-union is a union with their employers. Strikes and lock-outs would be for the most part a thing of the past, because, if wages were too low, the balance-sheet would prove the fact at the end of the year, and half the surplus would go to the workmen. To be free from the danger of strikes would be a very great advantage to the employers, and any portion of |