Production is an essential condition of human existence; for a cessation of production for a period of nine months would induce general famine.
The two great agencies of production, in addition to the forces of nature, are labor and capital. Labor is the primary agent in supplying human wants; even the spontaneous productions of the earth cannot be utilized without it. Indispensable, however, as labor is, it is comparatively powerless to supply the needs of civilized life unaided by capital. To produce effectively, labor must be supplied with materials to work upon, and be aided by shelter, tools, machinery, and other productive appliances. All of these require capital, that is, an accumulation of previous earnings. Hence it is obvious that whilst capital can do nothing without labor, labor could never rise above a state of barbarism without capital.
But notwithstanding their reciprocal dependence, the idea is prevalent that capital oppresses labor and seeks to deprive it of its natural rights. This error has arisen from a misconception of the laws which govern the relations of labor and capital, and of the conditions under which labor and capital coöperate for the greatest good of the greatest number.
Now, presupposing a due regard to be always had to the dictates of humanity and religion, the highest well-being of the race can be realized only by maximum production united with equitable distribution. The solution of this problem is the goal of social and economic science.
Nevertheless, the relations of the problem are so various and complex that its complete solution may never be accomplished, though human progress tends always in that direction.
It is my purpose here to consider this subject in its twofold aspect, beginning with
As a general truth it is for the advantage of every nation to develop its productive powers to the fullest extent. The more a nation produces, the more its people will have to consume. In a normal condition of business affairs there is, generally speaking, no over-production; it is only when some unusual or artificial cause disturbs the relations of demand and supply that labor is unemployed, and want exists in the presence of surplus productions. I shall consider this proposition farther on. Fully to develop the productive powers of a people, labor and capital must coöperate in conformity with the social and economic laws which govern productive results. Certain conditions, also, must be fulfilled, namely: —
First, labor must be aided by machinery and other productive appliances, wherever practicable.
Second, labor must be educated.
Third, labor must be organized and wisely directed.
The ultimate limit of invention, and its consequent aid to labor, cannot now be foreseen. Since the dawn of civilization man, in his desire to better his condition, has striven for new methods and appliances to assist him in subduing nature and to increase the efficiency of his labor in supplying human wants. The extent to which these efforts have already aided labor cannot be measured accurately, though it is known to be very great.
The following facts in regard to the productive efficiency of certain inventions, discoveries, and improvements may assist us in forming an approximate estimate of it.
Stirring the soil is an essential condition of successful agriculture. The implements used for this purpose in earlier times were very rude. During the last century the improvements in the plow and the harrow have been such as to enable a given number of men and teams to prepare twice as much land for the seed as they could prepare before these improvements were made; and we can gather some idea of the aggregate extent to which these improvements aid labor from the fact that one hundred and eight million acres were tilled in this country last year.
In the production of corn, the more important implements employed after the plow are the corn planter, the cultivator, and the corn sheller. Before any improvements were made in the direction of a corn planter, planting half an acre was considered a good day’s work. Now a man with a two-horse check-rower planter can plant twenty acres in a day. By the modern cultivator the labor of cultivating corn after it is planted is reduced twenty per cent. But it is in shelling the corn that labor is most aided by invention. By the old hand method, a man could shell only five bushels a day, whereas now, two men, with a shelling machine driven by steam or horse power, can shell fifteen hundred bushels a day. To shell by the hand method the thirteen hundred million bushels of corn produced in the United States last year would require over eight hundred and sixty thousand men working three hundred days in a year.
The principal implements or machines employed in the production of wheat, rye, oats, and barley are the seeder, the harvester, and the thresher. In planting grain, the seeder has great advantages over the old mode of broadcast sowing and harrowing. It sows the seed and covers it with soil at one operation; and by distributing the seed more evenly and covering it at a more uniform depth than can be done by the old mode of planting, the crop is rendered more certain and the yield increased from ten to twelve per cent. In harvesting grain, a man with a common sickle can barely reap half an acre in a day, laying the grain in parcels to be bound into sheaves afterwards. With the best harvester a man driving two horses can cut and bind the crop of fifteen acres a day.
Formerly grain was threshed with the flail, and freed from its chaff by a fanning mill operated by hand. The modern thresher, propelled by steam or horse power, performs both of these operations at once. It receives the grain in masses, separates the kernel from its stalk, deposits the chaff and straw in a pile, and delivers the clean grain into sacks ready for the market. Some idea of the extent to which these machines aid labor in the production of grain may be derived from the fact that last year, in this country alone, eight hundred and twenty-two million bushels of wheat, rye, oats, and barley were produced. In cutting and curing hay, the mowing machine, tedder, and horse-rake enable one man to do as much as four can do without them.
There are few productions of greater importance to the welfare of the race than cotton. Its extensive use was rendered possible by the invention of the cotton gin. Before Whitney’s invention, in 1793, a man could gin only five pounds a day. The best cotton gin now turns out four thousand pounds a day. To gin by hand the current cotton crop of the United States would require the constant labor of twelve hundred thousand men. In the manufacture of cotton the principal processes are carding, spinning, and weaving. The modern carding machine enables one person to card in a given time as many pounds of Cotton as sixty can card with hand cards. By the distaff and spindle—which are still in use in India—a good spinner can scarcely complete a skein of yarn a day. By the domestic spinning-wheel from ten to twelve skeins in a day can be spun. In comparison with these results, the efficiency of modern spinning machinery appears marvelous. The spinning frame, with the attendance of one woman and an assistant, will spin forty-seven hundred skeins a day; and the spinning mule, attended by a man and a boy, will spin over six thousand skeins a day.
A weaver of plain cloth by the hand loom could throw his shuttle only about ninety times a minute; whereas now one person can attend five, and sometimes six, power looms, each loom throwing its shuttle one hundred and sixty times a minute. In weaving figured cloth, the power loom aids labor to a still greater extent. One woman can weave as much Brussels carpeting by the carpet power loom as ten men assisted by ten boys can weave by the hand loom. To weave by the hand loom the carpeting that is now woven by the carpet power loom in its various applications would require the labor of fourteen thousand more persons than are now employed.
In the manufacture of wool, flax, and silk, modern machinery aids labor nearly to the same extent that, it does in the manufacture of cotton. The labor-aiding capacity of the sewing machine is well known.
BOOT AND SHOE MANUFACTURE.
This important industry within the last quarter of a century has undergone a great change. Much of the work that was formerly done by handicraft methods is now accomplished by a series of labor-aiding machines organized under the “factory system.” Eighty-five per cent. of the work of making boots and shoes can now be done by machinery.
MINING AND METAL WORK.
Mechanism and the applied sciences largely aid labor in mining and in the working of metals. It has been estimated that in the production of iron one man, aided by all the productive appliances now available, has a productive power of twenty in former times. Within a quarter of a century the cost of steel has been reduced over seventy-five per cent. Modern machine tools for boring, turning, and planing metals greatly aid labor in building other labor-aiding machines, as well as all structures of metal.
PAPER-MAKING MACHINERY AND LETTERPRESS PRINTING.
The diffusion of knowledge is essential to high productive efficiency; and whatever tends to facilitate such diffusion aids labor. The rapidity with which paper is made and printed at the present day is almost incredible. A paper-making machine, attended by one man, makes printing paper six feet, or more, in width, and delivers it upon rolls at the rate of one mile per hour. The power printing press, attended by a man and two boys, receives the paper on rolls, and prints it on both sides at the rate of ten miles an hour; and at the same time cuts the paper into sheets and folds them. The London Times and the leading daily papers in this country are printed at the rate of twelve thousand five hundred copies per hour. By double width presses, in which two papers are printed side by side, twice that number of copies are printed per hour.
In comparison with these means, what could the ancient scribes, with parchment and stylus, do in diffusing knowledge?
The larger part of the labor-aiding machinery above specified is propelled by the force of water or steam. The Boyden turbine wheel gives an effective force of ninety per cent. of the weight of the water passing through it. The Corliss steam-engine with the steam generated by one ton of coal will impart a motive force equal to ninety horse-power during ten hours. A horse-power is held to be equal to the power of five men; whence it follows that one ton of coal is capable of producing a motive force equal to the motive force of four hundred and fifty men exerted ten hours. In the Life of James Watt, published in 1874, it is stated that the steam power of Great Britain is equal to the power (physical force) of four hundred millions of men. This prodigious energy, so far as it is employed productively, aids labor.
The influence of railroads on production and on the condition and distribution of labor is exerted in so many ways that it can scarcely be estimated. Some idea of it may be gathered from the following facts. The Boston and Albany Railroad in 1876 transported between Boston and Albany, — a distance of two hundred and one miles, eight hundred and thirty-three thousand tons of through freight and seventeen hundred and eight thousand tons of way freight, being the equivalent of fifteen hundred and eight thousand tons carried over the whole road. To transport the same amount of freight on common roads (upon the basis of a horse of average power being able to move one ton fifteen miles a day, three hundred days in a year) would require (in round numbers) sixty-seven thousand horses, and eleven thousand men to groom and drive them. When we consider what a drain such a number of horses and such an army of men would be upon subsistence, and that the above figures apply only to the freighting on one road, irrespective of the passenger traffic, we at once see how impossible it would be now to carry on the business of the country without railroads. Were all the railroads in the United States to suspend operation only for a short time, actual famine would occur in many parts of this land of abundance. This is well illustrated by the famine in China, where there is sufficient food, but for the lack of transportation sixteen millions of people are in a famishing condition, and sixty millions are suffering more or less distress. Apart from their greater efficiency and the saving in the cost of transportation which they effect, railroads have many economic advantages. By reason of their rapid locomotion perishable commodities are safely transported, less capital is in transit, less capital is kept idle in superfluous stock, less time is spent in travel, new markets are opened, and in old markets prices are equalized. Mr. Disraeli gives the following curious example of the saving of time and money to the traveler by increased facility of communication.
“Mr. Robert Weale was twelve years employed as an assistant poor-law commissioner, during which time he traveled in the public service 99,607 miles. Sixty-nine thousand of these miles were traveled by the old conveyance, and thirty thousand by railway. By the old mode the, cost of traveling was 1 s. 6 3/4 d. per mile, and by railway it was only 3 1/4 d.; so that virtually the country saved by the new mode of conveyance five sixths of the cost of traveling. But the saving of time was still more remarkable. If the whole distance had been performed by railway it would have occupied one year, thirty weeks, and six days; if the whole had been performed by the superseded method, it would have occupied four years, thirty-nine weeks, and one day. The result is that three years and nine weeks of Mr. Weale’s life would have been saved, while the advantage to the public would have been that the whole cost would only have been £1344, instead of £7735. So that this active public servant would have saved three years and a half of his life, and the country £5390 in his traveling expenses alone.”
In the foregoing statement I have brought to view some of the labor-aiding inventions and improvements which come under general observation. There are many others of importance—though less conspicuous—which largely aid labor and augment production. Although, as we have seen, the productive result of certain inventions is very large, the aggregate extent to which all of the inventions and productive appliances now available aid labor cannot he formulated, and all statements in regard to it must be more or less conjectural. The real question is as to the extent to which these inventions and productive appliances benefit society in its collective form. Society is the custodian of civilization, and apart from civilization these inventions and appliances could not have been made; nor would their use be possible without social order and societary coöperation. The benefit which they confer, therefore, is not to be measured by their effect on certain industries or classes of laborers, but by the ratio in which they increase the productive power of the nation. In estimating this result we must keep in view the fact that the labor of only a part of the population is directly aided by mechanism; and that many of the important labor-aiding inventions—notably agricultural implements—are used only a small portion of the year.
The productive employments in which labor is chiefly aided by machinery are agriculture and the manufacturing, mechanical, and mining industries. By the United States census for 1870, it appears that in all of these industries but little more than one fifth of the population are employed, and probably less than one half of these are engaged upon the parts of the work to which machinery is applied. Hence the labor of not more than one tenth of the population is aided productively by modern inventions and improvements. Assuming that the labor of this one tenth of the population is thus increased in efficiency in the average ratio of thirty to one, it follows that the productive power of the country is increased thereby threefold. As a general fact, I think it may be said that the people of this country, assisted by labor-aiding inventions and appliances as they now are, have three times the productive power in proportion to numbers that they had a century ago.
I have dwelt long on the extent to which mechanism aids labor, for few realize how large a part of what we daily consume and enjoy we owe to modern inventions. Great as mechanical progress has heretofore been, we are still very far from its ultimate limit. To reap the fullest benefit from the inventions and improvements of the past, as well as to multiply and develop them in the future,
LABOR MUST BE EDUCATED.
Education is the principal means by which the knowledge of one generation is transmitted to and made available by the next. As knowledge increases, successive generations start on a higher and higher plane; hence, education becomes more and more necessary to the continued progress of the race. This is especially true in regard to productive industry. The efficiency of labor, on whatever objects it is exercised, depends not only upon the natural power of the laborer, but also upon his training and general intelligence. As a means, therefore, of high productive efficiency, it should he made possible for every individual to acquire a good general education, directed with a view to invigorate the body, elevate the moral faculties, and strengthen the intellectual powers, or, in other words, to fit the individual for the general duties of life. Thus much should be done without any reference to special pursuits. Practical instruction in the industrial arts and trades, generally speaking, should begin in the workshop, where the learner may be surrounded by all the conditions under which these arts and trades are respectively carried on.
Higher technical instruction is of but little practical value except to those who have decided aptitudes in certain directions, and for such persons every possible means of instruction should be provided; for it is to them or their influence that we are to look mainly for the advancement of civilization. While they plan and direct, the others must execute. The commercial value of education is well set forth in the Journal of the Statistical Society, in England, by Mr. Chadwick. He states that “he has been at much pains to ascertain from employers the comparative efficiency of educated and uneducated laborers, and that all intelligent witnesses of wide experience and observation unanimously agree that education, even in its present rude and in many respects objectionable condition, is highly remunerative. Masters who have been at the expense of schools on high religious and social grounds concur in saying that success is great on economical grounds. They find the readiness with which a well-educated man comprehends instructions, the willingness and the intelligence with which he makes trial of unaccustomed processes, the quickness with which he notes the facts that come under his observation and the facility with which he reports them, the suggestions for the improvement of his business that he is able to offer, the diminished amount of superintendence that he requires, and the saving of waste from untrustworthiness, from blundering, from misconduct, and from misdirected labor, are advantages which the mercantile mind is not slow to appreciate.”
Whatever may be the natural powers or the degree of intelligence that laborers possess, they cannot achieve high results when working separately. To work with the greatest efficiency,
LABOR MUST BE ORGANIZED AND WISELY DIRECTED.
It has been said that the civilization of a nation is measured by the capacity of its people for association. Certain it is that their greatest achievements are the results of associated effort. Common schools, the higher institutions of learning, the church, the state and the several departments of its government, all owe their success to organization. The same is especially true of industrial operations, for in most cases they require the implements of production to be organized as well as the labor employed to operate them. Machinery for the production of an article involving several processes must be organized in departments so co-related as to act in unison. In a cotton mill, for instance, the weaving department must keep pace with the spinning department, and the spinning department with the carding department, so that the several departments, with all their complex mechanism, will coöperate for a common result. However perfectly the machinery of production may be organized, a successful result is unattainable unless the labor which operates it is also properly organized and wisely directed. A skillful sub-agent or overseer must have charge of each of the several departments, and the operatives be assigned to their allotted tasks according to their respective capabilities, while the working of the whole establishment is placed under the watchful care and supervision of an experienced general manager. The number of persons possessing this organizing and administrative faculty is comparatively small; hence a large amount of human effort is wasted by misdirection, and failures are nearly as numerous as successes. The bearing of this fact on the condition of labor will be more fully considered when treating of the other aspect of the subject.
We have seen that maximum production can be achieved only by labor and capital coöperating in conformity with social and economic laws. Distribution, to be equitable, must be governed by similar laws. When, in their efforts to satisfy human wants, all obey these laws under a sense of moral obligation, the problem of uniting equitable distribution with maximum production will be solved; and not otherwise. Equitable distribution consists, not in an equal pro-rata division of the produce of labor and capital, but in allotting to all a share proportionate to the decree in which they have respectively aided production, directly or indirectly. This is just, and is what every one who aids production by mental or manual labor, or by capital, has a right to demand.
Production and distribution are so related to each other that they cannot be treated separately; and any system which may be devised for their accomplishment, to be permanent, must embody the conditions essential to their joint success. The principal systems for this end which have excited discussion are the socialistic or communistic system, which, for convenience, I shall designate communism; the coöperative system; and the competitive system.
in theory is in conflict with the laws of our being. Were it put in practice, it would increase rather than diminish the evils of which its advocates complain, and create others of graver import. As compared with the present order of things, it would diminish production and distribute what would be produced unjustly. Says Herbert Spencer, “A desire for property is one of the elements of our nature,” and “The right of private property harmonizes with the human constitution as divinely ordained.” By denying this right and holding the produce of labor as common stock, communism takes away one of the strongest motives for human effort. To labor energetically the laborer must be sure of receiving the fruits of his industry in a form which he can appropriate as his own. The communistic idea of equality is also wholly at variance with the principles on which labor, to work effectively, must be organized and directed. It is, moreover, at variance with the principles of equitable distribution. There is nothing more manifest in the constitution and course of nature than the law of diversification. In the animal and vegetable kingdoms there have been found no two organisms exactly alike. Of the millions of human beings, the features of each one are so unlike the features of all the others as to be distinguishable; and observation and experience prove a similar diversity to exist in their mental organization and aptitudes. Now, to assign to the services of every one an equal value, and allot to every one an equal share of the produce of labor, would be manifestly unjust; and, as Herbert Spencer says, “to ascertain the respective amounts of help given by different kinds of mental and bodily laborers towards procuring the general stock of the necessaries of life is an utter impossibility. We have no means of making such a division save that afforded by the law of supply and demand.” Communism has no root in the nature of things. It is a parasite on the body politic; and it is for the interest of every citizen, be he laborer or capitalist, to exterminate it.
THE COÖPERATIVE SYSTEM,
although having some features in common with the joint stock corporation system in general use, is essentially different from it. The object of the former system is to organize labor and capital on a basis which gives labor the control and management of affairs. The object of the latter system is to aggregate capital in amounts sufficient to prosecute business to the best advantage, irrespective of the labor element. There is no reason why people should not adopt either one of these systems as their interest may dictate. It is the unquestioned right of laborers to strive by all legitimate means to better their condition, and the duty of society to give them every possible aid in doing so. The question here is as to the extent to which we can reasonably look to the coöperative system as a means of improving the condition of labor. Judging from experience and from the nature of the case, we have to confess, however much we may regret it, that the outlook in that direction is not very encouraging. The system is, in some respects, at variance with social and economic laws, and can never be extensively adopted. Small undertakings are more likely to be successful under it than large ones; and, for obvious reasons, coöperative distribution may succeed when coöperative production would fail.
In a large association of workmen, inexperienced in business affairs, it is impossible to command the organizing and administrative ability necessary to success; nor is it to be expected that the essential unity of policy and action can be secured. Moreover, the relative value of the services of the workmen employed in the different departments of a cooperative establishment must always be a source of jealousy and discontent. On account of the density of her population, and her comparatively settled course of business, England is as favorable a place for testing the merits of the coöperative system as can be found; yet its use there furnishes no proof of its fitness for business generally. Mr. Thomas Brassey, in his excellent lectures on the Labor Question, makes the following statements in regard to societies for coöperative distribution, and for coöperative production. “The number of societies for coöperative distribution in England and Wales is 746; the number of members, 300,587; of whom sixty thousand were admitted, and thirty-two thousand withdrew, in 1872. … The management of a coöperative store is a task not without difficulties. The members who withdrew from these societies in 1872 were half as many as those who joined. … The most recent report shows that the number of societies for coöperative production may almost be counted on the fingers. Though some of the experiments actually tried have been successful, the failures have been more numerous than the successes. Coöperative societies for production would doubtless have been established far more rapidly, unless there had been formidable difficulties to be surmounted. … The most important experiment in coöperative production hitherto attempted in this country [England] is that of the Ouseburn Engine Works. But this company has sustained a severe loss; and, strange to say, there has been a strike for higher wages on the part of the workmen employed in one department of the concern. The occurrence of a strike in a coöperative establishment proves the difficulty, though not the impossibility, of conducting an undertaking on a democratic system, when you have to deal with many classes of workmen, possessing different and unequal qualifications.” In other countries the history of coöperative societies is no more encouraging. The general result is that they either fail or, sooner or later, adopt the usual systems and methods of business. In France, several years ago, M. Reybaud, a member of the Institute, in behalf of the Academy of Moral Science, made inquiries in regard to the condition of workmen in the woolen industry. In his report he gives an account of the formation, and temporary success of several coöperative societies for spinning worsted in Fourmies in the north of France, and after narrating the steps by which these societies passed from the coöperative to the competitive system in the conduct of their affairs, he makes the following philosophical remarks: “In these ephemeral communities, that which emerges insensibly is a return towards the demand and respect for individual faculties. Among these workmen some absorb, others are absorbed. The rights after trial become fixed according to merits and proportions of interest. The control follows the same progress, so that after a circuit, more or less long, there is a return to society in its collective name, and to the régime of wages, that is to say, to the ordinary form of this kind of contracts. Fourmies has given us the last word which we shall seek for in this direction. We see, then, in what manner associations for community of labor commence, and we see how they end. Through artifices and equivocations, other associations of the same kind may continue longer; but their inevitable dénoûment is only a question of time. A work of industry can never be anything else than an affair of speculation; disinterestedness slips in only on occasions and by calculation. Sooner or later the nature of things takes its revenge, and shakes or overturns whatever does not conform to it.”
THE COMPETITIVE SYSTEM
is, in all civilized countries, the principal system which has heretofore regulated, and in the nature of things must continue to regulate, the varied and complex social interests involved in the processes of production and distribution. Its universality is sufficient proof of its being an expression of some natural law; and all experience goes to show that that law is the law of demand and supply.
It is divinely ordained that man, in common with other animate beings, shall struggle for existence. He is by nature a competing animal. In the social state, all are free to act according to their judgment and preferences, provided they do not trench on the rights of others. In competing with each other, the law of demand and supply is the means by which their mutual interests are adjusted. It determines the prices of the things they desire, and allows all to acquire them according to their preferences and ability. If, then, it is divinely ordained that the race shall compete for subsistence, the relations of labor and capital must necessarily conform to the divine scheme. Yet, notwithstanding that competition, under the law of demand and supply, is the inevitable and chief means whereby the natural interests of labor and capital can be equitably adjusted, there is a growing misapprehension and consequent discontent in regard to the existing state of affairs. The alleged grounds of this discontent are various. It is believed by many that the general use of labor-aiding machinery has so augmented production as to cause the present depressed state of business; and tends permanently to prevent the full employment of labor. These views are unsustained by facts. The extent to which labor is unemployed is much less than has been represented. Hon. Carroll D. Wright, chief of the Massachusetts Bureau of Labor Statistics, says that while it has been reported that there are from two hundred thousand to three hundred thousand people out of employment in this State, he has ascertained by a careful investigation, in June last, that the actual number, including both sexes, is less than twenty-nine thousand; and that the estimated number of the unemployed in the United States is seven hundred and fifty thousand instead of three millions as has been reported. This last figure he says has been quoted in papers, works on political economy, speeches in Congress, and political resolutions, till it has come to be believed everywhere. I hardly need say that these exaggerated reports have done much harm. They have misled the public judgment, and given rise to various unsound theories in regard to the condition of labor and the means for its relief. The causes which led to the present depression are of a general nature, affecting all departments of business, some departments more than others, according to their respective conditions. When we consider the enormous shrinkage that has taken place in the value of almost all kinds of property, the number of failures that have occurred, and the consequent general distress, we see no evidence that labor has suffered disproportionately to other interests. Commercial crises or periods of business depression were known anterior to the era of productive mechanism. They are the product, not of labor-aiding machinery, but of financial machinery. Capital is the basis of business, and credit, though not the equivalent of capital, is essential to its complete employment. Whenever the amount of capital employed is in proper proportion to the amount of business done, and the amount of credit employed is in proper proportion to the amount of capital, business affairs assume their normal condition, and, as I have before stated, there is no over-production. In such a state of affairs, the various interests develop in harmony, and whatever labor-aiding machines may exist, they are used only to the extent to which they can be made profitable. It is only when the intricate machinery of credit is run at undue speed that over-production and over-trading ensue, and lay the foundation of the crises which sooner or later inevitably follow. The contrivances by which men strive to extend their business in disproportion to their capital are various; but whether they work in the direction of a redundancy of greenbacks, an irredeemable currency, long time credits, or “kiteing,” the result is the same, namely, excess of credit and consequent disaster. Were the present depression due to labor-aiding machinery, we might expect to find the greatest depression in the departments of business to which such machinery is directly applied; but real estate is as much depressed as manufacturing, and railroading as grain growing.
Five or six years ago, business generally was active, and the demand for labor in some industries was renter than the supply. Is it conceivable that labor-aiding machinery has been so much increased during this interval of time as to displace the laborers now out of employment? No. Anterior events led to their displacement. It was the natural result of the disarrangement of business affairs consequent upon the late war and the subsequent undue extension of railroads. The demand created by the war for hundreds upon hundreds of millions of dollars’ worth of commodities was superadded to the normal wants of the people, and had the same stimulating effect on the business interests of the country as though that demand had come from abroad. (Its effect on national wealth is another question.) The consequence was that the productive forces of the country were brought to the highest state of activity. Productive machinery was increased, new factories and work-shops were built, and labor pressed into service to meet this urgent, though temporary, demand. When this demand ceased, as it did largely at the close of the war, these productive agencies were out of harmony with the requirements of peace. Thea came the unprecedented and premature extension of railroads, which brought in its train similar consequences, Rolling-mills, locomotive works, car-shops, and shops for the various railroad supplies were built largely in excess of the regular requirements; and now that the building of new railroads has ceased, those works are partially or wholly stopped, and the workmen thus abnormally drawn together are out of employment. Concurrently with the war and the railroad mania, the machinery of credit was in full operation, turning out delusive financial facilities for speculation. The panic of 1873 disclosed the actual state of affairs. It was then seen that the capital and labor of the country had been largely misapplied; that railroads had been built which were not needed; that the machinery of production had been increased beyond the legitimate demand; that the amount of credit employed was largely in disproportion to the amount of capital; that the excessive use of credit had raised the prices of most kinds of property above their actual value; and that, in short, business affairs generally were disarranged and out of joint. Under these circumstances it would have been strange indeed if labor had found continuous employment. The hard times, as they are called, are the result of the violation of natural laws; and under the operation of the same laws—unless unwise legislation is interposed—they will, at no distant day, disappear. When values are brought within the measure of actual capital supplemented by a proper relative amount of credit, and the normal relation between demand and supply is reëstablished, — now gradually taking place, — confidence will return, business will revive, general prosperity will ensue, and labor, as heretofore, will find full employment. No one of the curious theories which have been advanced to account for the present business depression is more unsound and misleading than that which—erroneously, as I have shown—attributes it to the influence of labor-aiding machinery. Its indorsement by the American Social Science Association does not relieve it of its absurdity, nor lessen its mischievous tendencies.
Another source of discontent is the vague impression—now quite prevalent—that capital tyrannizes over labor and deprives it of its just share of their joint produce. Rightly to understand this aspect of the labor question, we must consider it, not in the light of what we could wish to see realized, but in the light of what it is possible to achieve. Our sympathies would lead us to wish that every human being might enjoy ease and abundance; but it has been otherwise divinely ordained.
It is for the interest of all, as I have before stated, that production should be carried to its maximum; for the more that is produced of the articles necessary to subsistence, the greater will be the supply thereof to be distributed. We have also seen that to obtain this result labor must be aided by labor-aiding machinery; that capital is necessary to provide machinery, shelter, and materials for labor to work upon; and that the machinery as well as the labor to operate it must be duly organized and wisely directed. Fully to appreciate the difficulties to be surmounted in fulfilling these conditions we must take into view the diversity that obtains in the mental endowments and aptitudes of the race.
Mr. Henry Thomas Buckle says that “an immense majority of men must always remain in a middle state, neither very foolish nor very able, neither very virtuous nor very vicious, but slumbering on in a peaceful and decent mediocrity.” Upon the same subject Professor Huxley remarks that “the great mass of mankind have neither the liking nor the aptitude for either literary, scientific, or artistic pursuits, nor indeed for excellence of any sort. Their ambition is to go through life with moderate exertion and a fair share of ease, doing common things in a common way.” It is equally true that the portion of the human race endowed with organizing and administrative faculties in marked degree is not very large. To avoid waste of labor by misdirection it is for the interest of laborers as well as of capitalists that the producing and the distributing organizations should be in the hands of those who are best fitted for such responsibilities. Under the laws of competition, capital, generally speaking, naturally falls to those who have the largest business capacity; and as a matter of course such men become the men of business. Nevertheless, the demand for business talent is always greater than the supply. One of the greatest difficulties experienced in forming or in maintaining a business organization is in finding competent persons to take charge of the various departments. In view of these facts, and of the conditions under which the race must struggle for subsistence, the practical inquiry is whether or not human wants can be more fully or more equitably supplied than under the existing order of things.
In all the discussions of the labor question which have taken place, an affirmative answer to this inquiry, sustained by proof, has never been given; nor is it likely that one ever will be given. The existing system is founded in the nature of things. Under it, civilization progresses and the condition of labor is constantly improving. In the history of the world there has been no time when the needs of the people have been so fully met as now. The law of equal freedom removes all just ground of complaint. All are at liberty to compete for position, for capital, and for the produce of labor and capital, according to their preferences and ability. Certain it is that where there is perfect freedom there can be no tyranny.
It is often asserted that in view of the extent to which modern improvements aid labor, laborers do not derive the benefit therefrom to which they are entitled. I have estimated, as we have already seen, that the productive power of the people of this country has been increased by labor-aiding mechanism during the last century threefold. Were it possible to bring to view a clear picture of the manner in which people lived a century ago, and contrast it with the manner in which they live now, I think it would be found that the amenities of life have increased in a greater ratio than the power of production. The results of this increased power of production are better general education, wider diffusion of intelligence, larger charities, and the general elevation of the condition of the whole people. Laborers have not only participated in those benefits, but have derived special advantages. During the past century the wages of labor have generally advanced over fifty per cent., and in some employments one hundred per cent.; the daily hours of labor have been lessened nearly one third; and the prices of many of the necessaries of life have been largely reduced. The changes in these items which have taken place within the past forty years—years fruitful in labor-aiding inventions—are well exemplified by the cotton mills at Lowell, as the general system of business under which those mills have been run during that period has not been materially changed.
Mr. Burke, who has had official relations with one or another of the manufacturing corporations at Lowell since 1836, states that since 1838 the wages of women paid in the cotton mills at Lowell have been increased forty per cent., and the wages of men thirty per cent.; that the hours of labor for both sexes have been reduced from seventy-six and a half hours to sixty hours per week; and that the prices of cotton goods have been reduced over thirty per cent. The advance in wages which has taken place concurrently with the increasing use of labor-aiding machinery is conclusive proof that such machinery, in the long run, increases rather than diminishes the demand for labor; hence the term “labor-saving” as applied to inventions is a misnomer. In the present abnormal state of business, the facts which obtain in regard to the employment of labor are exceptional, and afford no just criterion of the merits of the general question.
The vast systems for production and distribution which now minister to the wants of the people are among the grandest monuments of civilization. Yet there are many at the present time who, with a strange perversity of judgment, denounce them as the cause of their sufferings, when in fact they are the very means by which they subsist. In this country the social pyramid rises in such just proportions that there is no marked line which separates the laborer from the capitalist. But if we class as laborers those who depend on wages for their principal means of support, we include in that category probably seven eighths of the adult population. Now, as the laboring population and their families constitute the bulk of the consumers, it follows that seven eighths of the results of the great systems of production and distribution go to supply their needs. Therefore, when a laborer, or any combination of laborers, in their hostility to capital attack these systems, they attack their own interests; and, so far as those interests involve the means of subsistence, the consequences of such attacks fall upon laborers to the extent of seven eighths, and upon “bloated capitalists” to the extent of one eighth.
Much confusion of thought in regard to the labor question has resulted from ascribing effects to wrong causes. There is a prevalent feeling that, in the existing relations of labor and capital, there is something radically wrong. This is an error. These relations are founded in the nature of things, and are as much controlled by natural laws as is the planetary system. Although, through ignorance and prejudice, they may be temporarily disturbed, no human effort can change their character. Whatever of hardship or injustice comes to laborers is caused by the general course of human affairs, which affects the rights and interests of men in all the relations of life. Bad laws, bad faith, vicious modes of doing business, undue use of credit, and fluctuations of trade affect the whole community, — the interests of labor in common with other interests. The condition of laborers can be improved only by reforming the modes of doing business and elevating the general condition of society, of which they form a part. Much may be done to soften the asperities of life by judicious charity and timely sympathy. The claims of the unfortunate and the needy should be promptly met; but sympathy for labor on account of its existing relations with capital is out of place, and unavailing. If a man carelessly walks off a precipice and breaks a limb, he is entitled to our sympathy, but nothing can be gained by attacking the law of gravity.
There is no agency more detrimental to the interests of labor than the undue use of credit. It is essential to the prosperity of labor that it should have steady employment. Moderate wages which are constant are far better than occasional high wages succeeded by low wages and—as often occurs after a financial crisis—a temporary cessation of employment. People generally adapt their expenses to their current income. When a laborer in good times is receiving high wages be adopts a corresponding standard of living, which becomes habitual. Then, when a change of times compels a reduction of his wages, he is disappointed, and if his employment ceases, even temporarily, he is in distress. It is at such times of depression that the discontent of laborers is chiefly manifested, and the labor question most earnestly discussed. It is at such times, also, that political charlatans bring forward their quack remedies for alleged evils, as they have done during the past few years. As I have before stated, in a normal condition of business affairs, that is, when credit is employed to a proper extent relatively to the amount of capital, all departments of business develop in harmony, and labor finds full employment. The loss to labor, the loss to capital, the loss to the country, which an undue use of credit has caused, can scarcely be estimated. It has been reported that “since the panic in 1873 the shrinkage in values has caused failures in this country amounting to ten hundred and fifty million dollars, and has reduced by forty per cent. the money valuation of the aggregate assets of the country.”
Although some kinds of property have depreciated forty per cent. and over, it is not probable that the aggregate has depreciated to that extent. The census of 1870—a year of high inflation—gives the total assessed value of the property of the country, in round numbers, at fourteen thousand million dollars. If we take the low rate of twenty per cent. as the average rate of shrinkage on this vast sum, it follows that the total depreciation amounts to twenty-eight hundred million dollars; or, in other words, the people of this country are not as rich by that sum as they thought they were a few years ago. The consequences of this depreciation are widely distributed. There is scarcely an individual in the country who has not directly or indirectly suffered thereby. Under the stimulus of undue credit enterprises were pushed forward in ten years which should have occupied twelve or fourteen years. By this untimely action a vast amount of labor has been wasted. Had enterprise been limited to actual capital, supplemented by a proper relative amount of credit, the prosperity of the country would have been real instead of being largely fictitious, and the fruits of labor would now be represented by actual wealth. I know of no means whereby the use of credit can be properly limited other than the good sense and prudent judgment of the people. But deliberately to seek to extend the use of credit by an irredeemable currency or any other scheme of inflation is a crime. With the evil consequences of this excessive use of credit fresh before us, it is unaccountable that, just as we are entering upon a career of substantial prosperity, there should be so many among us urging upon government inflation schemes which, if adopted, would inevitably reproduce the evils from which we have been suffering. Capital is the laborer’s best friend; excessive credit his worst enemy.