BOOKS.
MR. HOWELL ON CAPITAL AND LABOUR.*
THE well-worn subject of the relations of Capital and Labour has been invested by the recent occurrences in Lancashire with a new interest for the moment, and no more opportune time could have been chosen for the publication of an elaborate defence of the aims and methods of Trade Unions. For Mr. Howell's book, though in form an "historical and economical" investigation of the "Conflicts of Capital and Labour," is in substance and in tone an apologetic work, written to vindicate the Trade Unions from the unfavourable criticism of outsiders, and especially of political economists. Few persons possess greater qualifications for the task which be has set himself than the author, and we may say at once that notwithstanding an occasional asperity, which generally displays itself when the argument is a little dis- posed to halt, the subject is treated throughout in a spirit of fairness and moderation for which we were much less prepared than for the ability of the reasoning and the vigour of the style.
The machinery of a Trade Union is directed to two main objects,—on the one hand, it insures its members against the ordinary accidents and vicissitudes of a workman's life ; on the other, it guards the interests of labour in that particular trade, taking now the aggressive and now the defensive, according to the changes produced in the attitude of capital by variations in the state of business. We gather from what Mr. Howell says that the last twenty or thirty years have witnessed a large develop- ment among the Unions of the policy of amalgamation, the result of which has been that in many of the most important trades the local societies have been incorporated into one general organisa- tion, with branches and subdivisions in all the centres of in- dustry. This has, no doubt, greatly increased the efficiency of the Unions for both their main purposes, and the figures cited in this book testify to a remarkable growth in their influence and prosperity. Thus the total number of independent Societies (without reckoning the local branches of the greater Unions separately) is said to be about 3,000 ; the aggregate number of Trade Unionists is 1,250,000; and the annual income of the Unions is not far short of £2,000,000. It appears probable that by far the greater part of this sum is devoted in ordinary times to those purposes which the Unions have in common with other friendly and mutual- insurance societies, though the manner in which the accounts are kept renders it difficult to define the exact proportion. Taking the Amalgamated Engineers, the richest and most powerful of all the Societies, as a sample of the rest, we find that in 1876, out of a total expenditure of about £110,000, there was appropriated.to then head " Donations" (which includes the " out-of-work " fund and the fund for "travelling relief "), £45,000; to the sick, 123,000; to superannuation, £12,500; to funerals, £7,500, and so on. The grants for trade purposes, including contributions to other trades, for the same period are only £1,800, and the expenses of management are about £13,700, or something like 12 per cent, of the whole expenditure. The total income for the year 1876 was £120,000, the average contribution per member being £2 14s. 6d., or about is. a week, and the reserve fund at the end of the year amounted to £275,000. In so far as Trade Unions employ their machinery for the purposes of mutual insurance, there can be no real question as to the value of the service which they render both to the workmen and to the com- munity at large. The extent of that service will be better appreciated, if we refer again to the accounts of the Amalgamated Engineers. In 1873, before the depression in trade had begun to make itself felt, the number of members was 42,000, and the donation fund (which is mainly spent on members out of work) for the year was £15,500; in 1876, the number of members was 44,500, and the donation fund was £45,000,—in other words, while the total number of members had only risen in the three years a little more than five per cent., the amount devoted to the relief of members out of work had increased nearly two hundred per cent. Of course, the evidence before us does not enable us to say how far the four or five great societies whose accounts are here presented are fair representatives of the Trade Unions as a whole ; but the existence even in a few trades only of such an insurance fund as that just described involves, in times of de- pression like these, an immense saving of outlay to the State and of self-respect to the individual workman.
• The Centflices qf Capital and Labour. By George Howell. London: Chatto and Windt'*. 1878.
Mr. Howell enters upon more disputable ground when he comes to deal with the other and more familiar aspect of Trade Unions as instruments for keeping up the wages of labour, and resisting the encroachments of capital. We have already said that, having regard to the difficulties of the subject and the stand-point of the writer, we consider his book, as a whole, singularly fair in tone and able in argument. We sympathise heartily with his protest against the prevailing tendency to treat all controversies that arise between labourers and their employers as mere questions of bargain and sale, to be settled by the higgling of the market. We quite agree with the general drift of the passage which he quotes from Mr. Frederick Harrison,—that there are moral considera- tions which enter into and determine the relation of master and workman, and which are quite foreign to the lower relation of vendor and purchaser. We freely admit that the powerlessness -of the individual labourer to meet the capitalist on equal terms is an ample justification for combination among workmen ; that in a trade where there is a Union, wages are, as a rule, more rapidly adjusted, to the proper standard than in one where there is not ; and that a strike may, under certain conditions, be a perfectly fair, and at the same time a thoroughly efficient, means of bringing about such an adjustment. Fully assenting, as we
to all these propositions, and believing as fully that there is no political economist of any weight who would deny any one of them, we regret all the more that Mr. Howell, with a misappre- hension of the teachings of political economy which would be extraordinary, were it not apparently shared by most of the working-class leaders, should have allowed himself to fall foul of that science in a manner which, without doing the least harm to it, is very damaging to his own argument. His chapter on "Political Economy and Trade Unions" reproduces a number of fallacies which have been exploded over and over again, notably by that most able and accurate writer, the late Professor Cairnes, whose Leading Principles of Political Economy Newly Expounded contains a refutation so lucid and so cogent of the very errors which we find here that there was really no excuse for their reappearance. We put aside altogether matters of taste, such as Mr. Howell's not very pointed definition of political economy as the "grab- all science," and his sneers at the "air of infinite wisdom" and the "overweening confidence" with which the economists "propound their crude notions" (p. 197). Nor do we lay much stress on the author's curious incapacity to understand that the " laws " of political economy, like those of any other science, only profess to formulate certain general tendencies, which are always liable to be counteracted. Mr. Howell, for instance, seems to imagine that In has sufficiently refuted the law of wages, when he has shown (as can easily be done) that there are cases in which wages are not regulated wholly, if at all, by supply and demand. The ascent of a balloon, or the arrest of a falling ball by the hands of a cricketer, might just as reasonably be adduced to dis- prove the law of gravitation. But after every allowance has been made for misconceptions of this kind, we do not deny that there is a real and an irreconcilable chasm between the conclusions of political economy and the creed of the Trade Unionist. The Trade Unionist believes that by means of Trade Unions a general rise of wages may be brought about, or a general fall averted. The economist, on the other hand, admitting that when the conditions which naturally lead to a rise or fall are pre- sent, the one may be hastened and the other retarded by combina- tion among the wage-receiving class, asserts that those conditions are determined by causes which it is altogether beyond the power of the Unions as now constituted, and worked, to affect. The statement that, in a country where there is free industrial com- petition, and where men's conduct in their business relations is in the main governed by commercial motives, the general or average rate of wages depends on the demand for labour, as compared with the supply of it, is, so far from being the paradox which it appears to Mr. Howell, little more than an arithmetical truism. The demand for labour means the amount -of capital which, having regard to the state of trade, can be pro- fitably employed in the direct payment of labour. When trade is good—that is, when profits are high—more capital can be so em- ployed than before ; when trade is bad and profits low, less. The -causes which lead to variations in this factor must, therefore, be sought among those general conditions which make the industry of a country at one time more, and at another time less, productive than before. The supply of labour, on the other hand, means the number of persons who, having to choose between working with their hands, and either sinking in the social scale, or living at the expense of the community, or starving, prefer the former to any of the latter alternatives. Trade Unions admittedly con- tribute nothing to the fund from which labour is paid,—in other words, add nothing to the demand for labour. Do they or can they raise general wages in the only other way in which they can be raised, by limiting the supply? Now in a growing and settled community, the supply of labour, using the term in the sense just indicated, can only be contracted in one of two ways,—either by emigration, or by artificial restraints upon population. We are not aware that the ftrmer of these expedients is in favour with Trade Unions, and from what Mr. Howell says (p. 217), there can be no doubt that they strongly condemn and reprobate the latter. Mr. Howell, however, evidently thinks, and in this we believe he faithfully represents the views of his clients, that there are other ways in which the supply of labour may be limited. "'Why," he asks (p. 216), "should not the workmen limit the supply of their labour, either by withdrawing the surplus hands out of the market, or by working less hours, and thereby giving others a chance of sharing in the amount of work, and consequently, of the wages offered by employers ?" Let us con- sider separately the two methods here suggested. First, as to the withdrawal of the surplus hands ; if this means the withdrawal of them out of the country, and therefore out of the range of competition, no doubt the supply of labour would be then diminished, and general wages pro tanto would rise. If on the other hand, as we rather suspect, it means the withdrawal of them out of one particular market or trade (and this is what the restrictive rules of the various Trade Unions really aim at), wages, in that trade, would rise, but wages in other trades would sink in exactly the same proportion, from the influx of the labour so with- drawn, and general wages would thus remain unaffected ; or else the men would continue unemployed, and become chargeable either to their Trade-Union or to the parish, and the rise in general wages would be in this way counterbalanced. The other scheme suggested is vitiated by an equally patent fallacy. The men who work shorter hours either work at the same wages as before, or at lower wages. If they work at the same wages as before, the question whether their employer will or will not hire more men to fill up the vacant time will depend upon whether or not there has been some such change in the general conditions of the trade as will make it profitable for him to pay more in wages than he did before. If such a change has occurred, the extra wages must sooner or later have been paid, independently of the shorter hours ; and the rise in wages is due, not to a limitation in the supply of labour, but to an increase in the demand for it. If the men work at lower wages than before, and the conditions of the trade remain the same, it will be profitable for the employer to pay to additional labourers in the form of wages exactly the difference between the late and the present wages of his old labourers. It makes no difference to him whether he pays 30s. a week each to ten men, or 25s. a week each to twelve men. It is obvious, however, in this case that, so far from the supply of labour having been limited by the shorter hours, it has been in- creased, and the /15 which was formerly paid to ten men being now paid to twelve, general or average wages have actually fallen.
We should have been glad to have followed Mr. Howell in his interesting discussion of such topics as piece-work, overtime, the restrictive rules of Trade Unions, arbitration, and the prospects of our foreign frade. But we must here take leave of him, com- mending his valuable book to all mho wish to understand the form in which our chief industrial problems present themselves to a most intelligent and well-informed observer, from the workman's point of view.
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