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I; 
 
 THE EVOLUTION OF THE RELATION BETWEEN 
 CAPITAL AND LABOll. 
 
 The object of this paper is to sketch, as plainly and briefly as 
 possible, the various changes which have taken place in the relation 
 of capitalist and workman, to point out as well the various causes 
 which have led to these changes, and to indicate the significant 
 bearing which these facts have upon the solution of the labor 
 problem of the present day. The relation of capitalist and work- 
 man has gone through some very interesting phases of development 
 during the last century and a half. I hope to be able to show, not 
 as a matter of theory, but as a matter of fact, that the present 
 aspect of it is not a haphazard one, but the necessary outcome of 
 its previous phases. Hence it will be from a careful examination 
 of that evolution that we must hope to determine the future. We 
 may thus be able to avoid some of the disastrous consequences 
 which overtook our not very remote forefathers, much to their 
 surprise. 
 
 To the thinking men and women of the day the restless move- 
 ments of our laboring thousands are of the deepest interest. 
 Most of these will admit that the question of the workman's posi- 
 tion in the industrial world, or his relation to the capital of the 
 country, is the most important which presents itself to modern 
 society for solution. Other questions, such as those of land and 
 population, are certain to have great interest for the future of our 
 
1889.] 
 
 lleldtion between dtpital and Lahor. 
 
 145 
 
 country, as tlu-y are boginning to have for the ])resent of some of 
 the ohler countries. To deternune tlic fnture rehitions of capital 
 an«l labor, however, is the industrial problem which has fallen to 
 our lot for solution. 
 
 The j)resent position of the workinguian is one of unstable 
 equilibrium. The labor and capital of the country are far from 
 being at peace with each other. They are gradually drawing off 
 into separate camps, and organizing their forces for active hostili- 
 ties. From time to time they come into o])en conflict with eacli 
 other. This serves to increase tlu; bad feeling, while it also 
 teaches them much as regards their methods of warfare which 
 will enable them to make a general conflict nutst disastrous. y\Il 
 this while we a/e ever being told by a certain class of persons that 
 there can be no real conflict between capital and lal)or, — that 
 such is impossible on the face of it. They will demonstrate to a 
 certainty that their interests are identical. Doubtless they arr* 
 identical, but it is in the same sense as that in which the interests 
 of the King of France and of the Duke of Burgundv were; 
 identical when they both desired the same town. Stated In gen- 
 eral terms, the present rcdation between caiiital and labor is this : 
 The ciii)italist, on his side, regards the workman as h.i does any 
 other agent in production. It is his object, and a natural one, to 
 get his machinery to turn out as much as possible at the smallest 
 cost; but just in this same light does he regard his workmen. 
 The workmen, on the oth<!r hand, have usually no other object 
 than to make as good a living as possible, with as little exertion 
 as need be. This Is not at all a bad motive In the abstract, but 
 they make no distinction between an employer and a natural 
 agent. Indeed, the great source of conflict is the fact that both 
 capitalists and workmen treat each other as they do natural objects 
 and powers, namely, as sources of wealth or Income. Given 
 ordinary human nature, and the conditions of the wage system, 
 it is impossible that anything but a condition of hostility could 
 be the practical outcome. Under such conditions, no amount of 
 lecturing, or ever so persuasive argument, will bring capital and 
 labor into general harmony. The capitalist is working for his 
 profits, the laborer for his wages. Where both shares have to 
 come out of the same fund, it follows that if one is increased the 
 other must be diminished by just that amount. Where the capi- 
 talist and laborer are so far remo*ed from personal contact with 
 each other and intimate understanding of each other's position as 
 at present, what more natural — what more inevitable — than 
 
 VOL. XI. — NO. 62. 10 
 
146 
 
 lielation between Capital and Labor. [February, 
 
 that there should be difficulty over the division of the joint prod- 
 ucts. Now hero there is need to note carefully that the difficulty 
 is not to be laid at the door of the competitive system. The 
 relation between capitalist and workman is not one of competition. 
 Competition consists in outbidding one another in the purchase of 
 goods, or underselling one another in the disposing of goods, and 
 this applies to whatever a man requires to buy, or whatever he 
 has to sell. Competition, then, takes place between one capitalist 
 and another, or between one workman and another, but not be- 
 tween capitalists and workmen. Employer and employed work 
 together in the production of wealth, hence there is no competi- 
 tion there. They quarrel over the division of the products, and 
 there is no competition there. The difficulty is not to be got 
 over by abolishing competition, however desirable that may be on 
 other grounds. The problem resolves itself into this : J low are 
 we to do away with the absolute antagonism between capitalist and 
 laborer which results from the quite arbitrary division of products 
 which at present prevails ? This principle of division plainly rests 
 on the ground that " might is right, and justice the interest of the 
 stronger." But before we can proceed to suggest any solution for 
 the problem we must ask how long this condition of affairs has 
 prevailed, what it was that brought the industrial world to such a 
 pass, and what it is that keeps it there. For unless we know 
 something of these conditions our attempts at remedy mtist be 
 mere gropings in the dark. They may even tend to aggravate 
 the evil. At any rate, they cannot hope to be lasting and pro- 
 gressive unless we understand the conditions of our progress up to 
 the present. If we find the evil to rest with man alone, if it is a 
 moral or social one, the remedy must be of a moral or social 
 nature. But if the evil is due to the material conditions under 
 which man exists, then it must be our endeavor to modify, as best 
 we can, these material conditions. 
 
 In considering the causes which have led up to the present re- 
 lation between capitalist and laborer, our concern is more directly 
 with the industrial development of the last century. But this can 
 be explained only b; going still further back. Let us see, then, 
 what were some of the earlier phases of industrial development. 
 Here, as in other historical matters, we must refer to Europe, and 
 especially to Britain. 
 
 During the Middle Ages industrial competition was almost un- 
 known, except in a few important European centres of distribu- 
 tion, and even there it was limited. The wage system also seems 
 
 ■ 
 
mmnw^m^^^ 
 
 wm 
 
 ipi^i 
 
 m^ 
 
 ^ 
 
 Relation between L ipltal and Labor. 
 
 147 
 
 1889.] 
 
 to have been as little !;novvn. The first dofhiite mention we have 
 of wajres in Britain is about the miikUe oi the thirteenth eentnry. 
 (^oiij)eration, and not individualism, was the rule in the production 
 and distribution of wealth. The great monastie institutions which 
 controlled so much of the land and wealth of the country were 
 nu)re or l(!ss eonununistic, or at least coiiperative, in their indus- 
 trial (fa})acity. The industrial side of the feudal relation was 
 also essentially cooperative. There was, of course, a marked 
 social distinctitm between the feudal lord and his dependants, yet 
 not so marked or so odious as the relation which was afterwards 
 <!stablished, and which Carlyle has aptly termed the " cash-nexus." 
 In England the decline of the feudal system was mark«'d by the 
 growing independence of those who cidtivated the land, and these 
 formed the bulk of the population. Their military service was 
 no longer exacted, and their dues or rent becanu; fixed in amount, 
 though payable in the products of their labor. Such, in outline, 
 was the condition of affairs, particularly in England, at the 
 beginning of the fifteenth century, which is usually supposed to 
 nmrk the close of the Middle Ages. 
 
 The fifteenth century, by the common consent of social histo- 
 rians, contained the golden age of the lower orders in liritain. 
 In the lowfr orders are included all who did not belong to the 
 aristocratic class. Up to this time there were really but two 
 classes in Britain, the aristocracy and the masses. The cultivators 
 of the soil cannot be distinguished from the workmen, who in 
 almost all cases had i)lots of ground, even those in the towns. 
 They had, too, a general right to pasturage on the common lands, 
 which were then extensive. Now we find that never before, or 
 since, did the lower class live in such comfort, and even luxury, as 
 during the fifteenth century. Compared with some of their later 
 representatives, they were " clothed in purple and fine linen, and 
 fared sumptuously every day." Indeed, the government thought 
 it necessary to pass sumptuary laws limiting the extravagance of 
 the lower orders in the matters of clothing and food. Yet, strange 
 as it may appear, this golden age was brought about, in great 
 measure, by no less terrible agencies than war and pestilence. 
 The wars with France and Scotland, together with internal strife, 
 but chiefly those dire epidemics known as the "black death," 
 which, from time to time, had scourged a people of unsanitary 
 habits, had so reduced the population that those who were left 
 found themselves able to make their own terras with the upper 
 class. Besides, the restless, thriftless portion of the men had 
 
 \ 
 
;V 
 
 148 Relation bdwcen Capital ami Labor. [Feliruui-y, 
 
 bofii tjiUt'ii as lotaiiu^rs by tho noblcH who wiTo figlitiii«; tho Wars 
 of tho Kost'H. Those conflicts seem to havo alf'ei'teil hut sli<>;htly 
 the real prosjierity of the country. An extensive exchange of 
 goods would liave been impossible, hut then there was little \wv{\ 
 for it in those days. The jjcople in almost every j)avt of thi' 
 country ])roduced their own food, built their own houses, and 
 made, throughout, their own clothing. What else they required 
 could be obtainctl from the craftsmen in the nearest village. 
 Most nu)dern luxuries were denied theni, but they were cimtent t<» 
 have the necessaries of life in abundance. 
 
 Next we have to ask what it was tliat brought about the fall of 
 the lower class from a position of affluence to one of poverty, 
 accompanied by pauperism. First of all, wo note that the fif- 
 teenth century, with its high wages and low ])riccs, made possible 
 the rise of the middle class by industry and thrift. With thcni 
 there comes the accumulation of capital and the first nuirked 
 influence of a cai)italist class. It was at the close of this century 
 that America was discovered, and that connnevcial enterprise and 
 the shi])ping iiulustry made such rapid progress, all of which 
 partly resulted from and greatly stimulated the rise of the cajji- 
 talist middle (dass. For a long time, however, capital concerned 
 itself mainly with the exchange of goods. Most of the manu- 
 facturing was done by individuals, assisted by apprentices, and 
 perhaps by a few journeymen, all, however, within trade guilds. 
 At that time it was the object of both masters and workmen to 
 keep down conipetition. Their guilds were fenced about by legal 
 enactments and their own regulations, thus making it impossible 
 to work independently of them, and yet difficult to secure an 
 entrance to them. The master workmen in these unions were, 
 of course, among the members of that middle class which began 
 to control the production and exchange of goods. But there was 
 as yet almost no opposition between masters and men. They 
 worked together as a unit, their interests being identical. The 
 beginnings of capitalism were not marked by that antagonism 
 between masters and workmen which is so prominent a mark of 
 its modern form. Neither were there a few masters with a great 
 many workmen, but many masters, with a few men each. This 
 general system, with certain minor changes which we shall note 
 later on, prevailed down to the last century, and represents, in its 
 later form, the first relation of labor an. I capital in America, 
 though the new conditions here made it mo e lax than in England 
 But while the masters i-etained and continued to better their posi- 
 
 I 
 
■ ■■.!■■ 
 
 iVWWi 
 
 l.SSn.] lii'lntlon hctivecn C(i]>ifitl tvid Lalmr. 14!> 
 
 ti«»n lifter the (iftoeiitli contury, the wctikiiicn did not fiiro so well, 
 riioir jKwition wii.s t()lenil)ly j^octd till well on in tlio sixtcuMitli 
 «'«'ntiiry ; then viirious ciuisi's bc^jfan to work which hooii hroiiffht 
 Imiu low indcod, wherever he was not proteeted by the; {guilds. 
 ^Var and pestileiiec had passed away, and |>o|)idati()n rapidly in- 
 c'reased, especially anionij the workin;;-elasses and eidtivators of 
 the soil. The nobles, their wealth {greatly reduced, in many cases 
 wholly <;-onc, in conseqncaiee of their strn^'^ics with each other, 
 were C(»nii)ellcd, both by law and poverty, to disband their hordes 
 <d" retainers. These increased the nuini)er of lab(»rers, or became 
 thieves and vaj>abonds. Then, too, the ;j;reat monastic institutions 
 were abolished, and their lands divided amon<jf the existinc; aris- 
 tocracy or court favorites, who were soon found t(> be nuich harder 
 landlords than the moidis. The troops of han<j;ers-on round these 
 monasteries were also added to the growiufj^ company of laborers. 
 Again, the landed gentry, some eager to repair their fortunes, 
 others influenced by the growing desire for wealth, began to 
 inclose the conmion lands before shared among the laboi-ers, and 
 thus a considerable source of the workinu'man's income was taken 
 away. Under the influence of a growing commerce, the value of 
 Hnglish wool rapidly increased, with the consecpienee that the 
 large land-holders turned as much as possible of their land from 
 agricultural to past^uragi^ uses. Now when we remember that the 
 working ])opulation of England consisted very largely of agri- 
 (udtural laborers, we can imagine the effect which tliose joint 
 influences had upon the position of the working people, ^fany 
 were deprived of the ojtportunity to make a living, or part of it 
 at least, fiom the soil, and many more of the op])ortunity to get 
 employment. Tlit^ general result was that the number of those 
 seeking emi)loymcnt was much greater than the number of those 
 who could fljid it. (^obden clearly summarized the height of 
 good fortune for the workingman as " two masters after one 
 workman," and the depth of his bad fortune as " two workmen 
 after one master." The first was the position of the workingman 
 in Britain at the beginning of the sixteenth century, the latter his 
 position at the close of it. But while in this position, the worst 
 blow of all fell upon him. This was the debasement of the coin- 
 age begun by Henry VIII, and continued during the next two 
 reigns. The immediate effect was to increase the price of every- 
 thing in demand, which meant to increase the price of the neces- 
 saries of life, but not the price of labor. The base money was 
 issued by weight, so that while the laboi-er seemed to get the 
 
 If 
 
) 
 
 loO liilddon hetiveen Capital and Lahor. [ Fiibruary, 
 
 snino wnpjo as before, it wan loally rediuuMl. In the liinf,'iiii};e of 
 " Political I'iCoiKtmy," tho noniiiKil iraijc wuMi'iuvd tlie same, tin; 
 real irat/c was <;n'atly rediuanl. The goveriimt'iit, liowevcr, did 
 not ^('t all tln! advantage of the dcbaseuient of tliu coinajifc. The 
 (uij)itali.st einployin}^ class Hccnred tlio vctnaindci', tlir()ii;;h the 
 increascil piice o their goods in j)ro|)ortion to the cost of lahor. 
 Thus, considerably within ono (icntury, were those who virtually 
 formed one class in society divided into two, and forced so widely 
 apart that th«!y have ever since nMnained distinct, and oidy of 
 late have a minority of the lower class been able to raise them- 
 selves out of their i)recarious position. At that time, too, ])auper- 
 ism first made itsidf felt in Kngland, and has ever since been u 
 curse to the country. When the condition of the waj;e-earninj;' 
 jmrtion of the i)o[)ulation falls below si certain point, it is impos- 
 sible for tl'.em to improvt; their condition throu<>h (U)mpetition 
 with the upper and middle classes, because they have not the 
 necessary capital, and their very competition with each other for 
 the means of living j)revents them from ever acquiring it. 
 
 I have directed attention at some length to the condition of 
 the workingman duiing the fifteenth and sixteenth centuries, for 
 it shows us, on the one baud, that it is possible for socit^ty to exist 
 without a large portion of the working population being in 
 poverty, and, on the othei* hand, that it was throiigh no fault of 
 his own, nor from auy direct necessity of Nature, that the working- 
 man was brought low. But, being once brought down, it was im- 
 possible for him to regain his old position. It was doubly hard 
 for him in Britain, for, being once reduced, he was held down b^ 
 stringent acts of Parliament. lie could not combine to raise 
 wages ; he could not move about from one part of the country to 
 another to seek employment ; he could not even emigrate, except 
 as a virtual slave. There was but one possible course left, an«l 
 that was for the lower class to restrict its numbers until wages 
 increased, from the demand for labor, and independence was once 
 more made possible. This course we could hardly expect the labor- 
 ers to follow, and hence they remained in their low position right 
 on to the present century. This general position I fiiul verified 
 by Professor Thorold Rogers, in his " Six Centuries of Work and 
 Wages.*" Speaking of the laborer's position, he says: "For 
 more than two centuries and a half the English law, and those 
 who administered the law, were engaged in grinding the English 
 workman down to the lowest pittance, in stamping out every ex- 
 pression or act which indicated any organized discontent, and in 
 
'zm^mmm 
 
 lary, 
 
 ! of 
 tll<> 
 
 the 
 Dor. 
 iUy 
 
 1889.] 
 
 lieliition between Capital and Labor, 
 
 If)! 
 
 imiltiplyin;^ , iMiiiltioi upon liiiii when ho tlunifjfht of his naturul 
 vightH." A;>iiinst tlicrto conditions tno laborer had Ko appeal, and 
 thoy hav(! bt'(!n n'moved only witli'n tho last sovonty yeai'H. 
 
 W(! havo lu'for«! us the general relation of capital and labor 
 down to about the niiddh) of last century. We may now note briefly 
 the next ])hase in the evolutioit of that relation. A-, I havo Htatod, 
 inanufaeturlnj; for the most part was done by master-workmen, 
 thoii a|)j)ronticos, and journeymen. Ordinary lal)orers were on- 
 gajj;ed to ])ro('uro raw materials and perform tho various siTvicos 
 not immediately connected with tho techni(!al part of production. 
 There Wiwa thus a groat many manufacturers in proportion to 
 tho quantity of goods produced. As communication between tho 
 various j)arts of tho country was improved and tho trading class 
 increased in importance, competiticm began to exert its influonco 
 and to break uj) tho power of the old guilds. Tho writings of 
 Adam Smith and other early economists hastened this change. It 
 was pointed out that these artificial arrangements hampered 
 trade ; and under i\\i\ changing conditions of trade they certainly 
 did. Tho principlo of IdlHxcx-fuh'e, of absolute freedom in all 
 matters of trade and production, was advocated, and soon hold all 
 but complete sway. Not long after tho time of Adam Smith com- 
 petition reached its zenith. As the mechanical contrivances for 
 aiding production wore as yet simple and inexi)ensive, tho number 
 of manufacturers was very large. On the other hand, a great 
 many dealers were compe*;ing with each other for tho profits of 
 distributing the manufactured articles. These manufacturers and 
 merchants, though numerous, were able to become, if not wealthy, 
 yet very well to do. Very few of them needed to suffer from 
 want if they were reasonably industi'ious. They formed the great 
 body of the middle class whose rise we have already noticed. 
 We are now considering them when competition has become the 
 ruling principle in all industry. The old form of cooperation was 
 found to be too binding, and discredit had been thrown upon it by 
 the many cumbersome acts of Parliament with which industry had 
 been fenced about. The cry for freedom had prevailed. The re- 
 sults justified the demand. The assumption was natural that the 
 gieatest good was to be secured to each and all by allowing every 
 one to take his own way to make money, provided that he re- 
 spected the ordinary laws of property. This is akin to the moral 
 argument that if each one seeks his own greatest happiness the 
 greatest happiness of the whole community cannot fail to be 
 secured. This, however, is in both cases to make the individual 
 
162 
 
 lii'lntinn hvtuuwn Citpital ntid L(il>ot'. [Ki'lu'iuiry, 
 
 i'vorytliiii^, ti> ti'iiclt iii:in that HflfiHlinrsH im the watcliwonl of life. 
 Still, this |>ri««i|>l»' of ftiisx^y.-fairc wuh a hcftiT oiu» than that 
 which had preceded it. It iiitnxliKMMl a necessary sta;;e in iiidns- 
 trial evolution. It did nothin;;, however, to Ixttter the lot of the 
 too nnnieroiis workers. The workman was not on a eoinpetitivo 
 fo()tii>;i; with his master, lie coidd eompet-? only with his fellow- 
 workmt!!!, and tlu; moru vi^'orons this competition the worsu 
 li(>('ame his lot. Ihit free competition Ixttween mannfaeturers du- 
 velo|>ed modern enterprise and invention, Ixu-anse the mannfac' 
 tiii'er conid elTectnally ap|)eal to Natnre tor lielp if only Ih( liad 
 the art to persnadi; her. Natnre eonid help him with steam and 
 water power, and hy means of an indefinite ntunher of mechanical 
 contrivant'C's known as macliines he eonhl jj^et Natnre to helj» him 
 to u trnly wonderful extent in his competition with his fellow-pro- 
 dncors. ThM:4 free competition both tlrovo men to seek out theso 
 inventions and enabled them to nniku the best nso of them whttn 
 discovered. Bnt the fact of a man bein}:^ able to get Natnre to 
 exert her powers for liinx made it jmssible for him to (piito sur- 
 pass his competitors. For a time the power of comj.etition was 
 arrested by the actual monopoly which the num with Nature for 
 Ins ally had secured. Tims did competition bring about its own 
 defeat. 
 
 This defeat brings us to the second great change in industrial 
 society. The conditions of the sixteenth century had divided the 
 lower portion of society, depressing the peasant and laborer, and 
 elevating the middle class. In the first half of this century the 
 conditions which brought about the defeat of competition pro- 
 duced a similar division in the middle class, chiefly in the manu- 
 facturing, and to a less extent in the distributing, portions of it. 
 The mechanical devices and machines which were introduced, 
 along with the ap])lication of steam power, enabled some of the 
 wealthier or more ingenious manufacturers to drive their fellows 
 out of the field of production. The number of producers was 
 thus greatly diminished. Then came the question, What must 
 the others do ? They could not remain idle and starve, hence 
 they were forced by the very pressure of circumstances out of the 
 master class into the laboring class. They had now to seek em- 
 ployment from their former competitors and to increase the com- 
 petition in the ranks of labor. A few of them would find employ- 
 ment as foremen and managers, and, as sometimes happened, 
 might regain an entrance to the employing class as partners in 
 the business. Certainly the wealth of the country was enor 
 
 
 
 I 
 
1889.] 
 
 ffrlidliin hrlici'm Ciiplliif and Lohor. 
 
 1*)3 
 
 iiioiisly inot'ciisod, lint it in not li:inl to «lis(Mivur who iM'iiclitcil hy 
 it. Thu cupitiilists soon l)<'ciunt> viM'y rich, uh vu (IikI in hoth 
 lli'itiiin and America, and yet the hdiorers w(>r(! not greatly hcne- 
 lited. In Hritain they were for Honio time worse off than ever, 
 and wotiM have heen in America had popidation been exces- 
 sive. 
 
 Now the {irimnph^ of competition had tenih-d to make men 
 indiviihnilistic, seUlsh, cariii;;- for no ono else. It had also (ended 
 to mak(! them f,'reedy of f,'ain and emnlons of each other. Tlieir 
 snec<'ss oidy Iei<fhtt!ned the ])assiou for wealth and distinction. 
 They seemcil to care nothinj; as to how they <;ronnd down theii' 
 workmen. Indeed, they were Ix'in^' further and further removed 
 from a trne knowled^u of their ])osition, and kmtw them only as 
 instrnmeuts of prodnction. The sole idea of the (iapitalist was 
 tho rcdnction of the cost of manufacture. This is <jnite a praisis- 
 worthy pnrposo as regards the a<,'ency of Nature, for Nature (?an 
 stand HUidi redui^tion to any extent. Man, however, (fantjot (jii- 
 dure a constant reduction in his wa<>es without ho(.>u ceasinj^ to 
 exist, and, worst of all, enduring a great deal of misery before he 
 actually gets to the ceasing point. Not many, howevei, actually 
 get to that extreme directly ; they usually remain at the miserable 
 stage. This was the case of tlu; ICnglish workmen at the time of 
 the developnient of modern industry. When they appealed to 
 their empl.<yers they were met with the not very encou aging re- 
 ply, that the uiatter was all in their own hands. "The fact is," 
 said the em))loyers, " you are too numerous. At any tinui t'^Me is, 
 according to an economic law, so much money to be sjient as 
 wages. Thus the wages of each workman will bo determined by 
 the number oJ workmen among whom the whole amount is to bo 
 distributed. Political economy tells us," they urged, " that tho 
 wage fund cannot be increased, therefore, our dear fiiends, you 
 will clearly perceive that wo cannot help you. Your only rem- 
 edy is to diminish your numbers." Having thus shifted the 
 responsibility from themselves to Nature, or to the workingman 
 himself, they could enjoy the prospect of their ev(!r-increasing 
 thousands without any qualms of conscience. But, as Carlyle 
 says in " Sartor Resartus," " there must bo something wrong. A 
 full-formed horse will in any market bring from twenty to as high 
 as two hundred Friedrichs-d'or ; such is his worth to the world. 
 A full-formed man is not only worth nothing to the world but the 
 world could afford him a round sum would he simply engage 
 to go and hang himself." Yes, there was something wrong ; the 
 
154 
 
 Relation between Capital and Labor. [Fobriiary, 
 
 I! 
 
 \\ 
 
 laborer felt sure of it ; and when he was allowed to combine with 
 his fellows in order to sell his labor as dear as might be, he was 
 not long in discovering that those laws styled " natural " and " in- 
 exorable " were not so adamantine after all. lie made the impor- 
 tant discovery that wages could be increased without diujinishing 
 population, increased, namely, at the expense of the employer's 
 ])r(;tits. Naturally enough, the workingman began to look on 
 Political Economy as no friend of his, but as simply an organized 
 defcuBC; of the rich man's position and methods with regard to 
 wealth. It is only recently that the workingman is beginning to 
 recognize that true Political Pjconomy is not his foe, but considers 
 his case quite impartially, and that the study of economic principles 
 is as much to his advantage as to that of his employer. Of course 
 he must recognize that there is a ground of truth in the position 
 that his wages may be affected by his numbers, and that even com- 
 bination will not save him when they are too large ; but all this on 
 diifcront principles than those urged by the capitalists who took 
 refuge in the wages-fund theory. 
 
 Now the repeal of the laws against the combination of laborers, 
 which took place in 1824, marl he end of general competition 
 auiong laborers. So long as there were more laborers than could 
 find employment easily, so long it was impossible for any advance 
 in wages to take place, because no individual could induce an 
 emj^loycr to raise his wages wheu the employer could get others 
 to take his place. The engaging or not of in individual work- 
 man made no difference to the employer who had plenty of men 
 seeking to enter his service. Bpt the having or not having em- 
 ployment was a most serious matter to the individual workman. 
 So from the sixteenth century to the nineteenth the employer had 
 it all his own way, and would have had it even yet had not the 
 laborer been allowed by combination to produce an artificial 
 dearth of laborers, and thus cause wages to rise. 
 
 But tlirough the operation of trades unions, following the break- 
 ing up of the old system of production, a feeling of antagonism 
 has been developed between workmen and employers. This 
 is partly due, also, to the utter lack, in these days, and espe- 
 cially in America, of such personal interest in each other as for- 
 merly existed, and which made it an inhuman thing for an em- 
 ployer to set his workmen adrift whenever he pleased. All 
 social bonds between the two have been severed. All fellow- 
 feeling, all human sympathy, is gone. Many an employer takes 
 less interest in his workmen than in his machines. His machines 
 
1889.] Relation between Capital and Labor. 15') 
 
 are his and their injury or tlesiruetion brings loss to him. Ilis 
 workmen, however, are like hired machines, out of which the 
 most that is j)ossible is to be taken, and for whose loss or injury 
 he is not responsible. The cash-nexus has taken the place of 
 all other bonds. Its conveniences are that it may be very easily 
 broken, and it carries v»^ith it no responsibility beyond a cash 
 payment. Such is the state of things against which Carlyle so 
 vehemently protests in his " Past and Present." Look at some 
 of his statements on this point. " It must be owned, we for the 
 present with our Mammon-Gospel, have conu? to strange conclu- 
 sions. We call it a society ; and go about professing opeidy the 
 totalest separation, isolation. Our life is not a mutual helpfulness ; 
 but rather, cloaked under due laws-of-war, named ' fair competi- 
 tion ' and so forth, it is a mutual hostility. We have profoundly 
 forgotten everywhere that cash-payment is not the solo relation 
 of human beings ; we think, nothing doubting, that it absolv<!s 
 and liquidates all engagements of man. ' My starving workers ? ' 
 answers the rich mill-owner. ' Did not I hire them fairly in the 
 market ? Did I not pay them to the last sixpence, the sum cove- 
 nanted for ? What have I to do with them more ? ' — verily Mam- 
 mon-worship is a melancholy creed. When Cain, for his own 
 behoof, had killed Abel, and was questioned ' Where is thy 
 brother ? ' he too made answer, ' Am I my brother's keeper ? ' Did 
 I not pay my brother his wages, the thing he had merited from 
 me?" Again with prophetic insight he says: "In brief, all this 
 Mammon-Gospel of Supply and Demand, Competition, Laissez- 
 faire, and Devil take the hindmost, begins to be one of the shab- 
 biest gospels ever preached, or altogether the shabbiest. . . . 
 Laissez-faire, Supply and Demand, one begins to be weary of all 
 that. Leave all to egoism, to ravenous greed of money, of pleas- 
 ure, of applause I it is the Gospel of Despair ! Man is a Patent- 
 Digester, then ; only give him Free Trade, free digesting room : 
 and each of us digest what he can come at, leaving the rest to Fate ! 
 My unhappy brethren of the Working Mammonism, my unhappy 
 brethren of the Idle Dilettanteism, no world was ever held together 
 in that way for long. A world of mere Patent-Digesters will soon 
 have nothing to digest ; such world ends and bv Law of Nature 
 must end in ' over- population ; ' in howling universal famine, im- 
 possibility, and suicidal madness as of endless dog kennels run 
 rabid." Nowadays things are somewhat changed. As Carlyle 
 8av«r, the world could not remain in a condition of money-hunting 
 and pleasure -hunting by the capitalist and land-holding classes 
 

 .;■ » 
 
 ••'■""<'• Tl,c„-„,.i,- , "'"""'" "'"'X-.W. rp, 
 
 '""■•"•<>■. ^otn'e", "V"'' "'" ''"tterin. of?;''.""""-' ''*. began 
 
 ■'•™« Las be on „ , y°'y "f "'e nL;'"7 '." """'Iftition, b,„ 
 
 ''""■'".vafr™e°i?„ '".'"■'-■. ■"•■•»■'/ oqnaJ 7 i' '"'■• T'us make, 
 ••'""■-' bur,-., 'i ;:"';^' '-"ore J be C cf ',f "''' "'"* 
 
 '" combining l„T "'"' ''<' '"ove? I. .,,7 •''™" "'• In 
 
 '*°- "ot the :,t^ •■: '"'^ -»"- ? We" ::«","»■"»" j-'">e<> 
 
 P'«*"m most em„l , '"'■■>' °f '"'s Positi„r ' ''™^ """ be is 
 
 ■-"■■". a.s be l,a, ' "^"'' '■''••«'«o» to bri„„.' ! ""." ''"«'i°n too 
 "'^ P»" tb oaSi?t ""' '°^ "'0 P™«e .t l"??- ^» "«■ oap.-- 
 
 ""■'"' '""'■•'..•sl.e.l, ,!:,!•" ; "" '" "-'""'o. as al '"r/. ""^ ff'-"""- 
 "'°"»P»b-e.s, bavc b ' ' '^' ""'' ''« Profl s „ "'" P"*"' « ' 
 
 T '■•»' ^e;« CO, :",;.'" '"-vn. n„rClXT'" " "'0 ease of 
 
 ';™">"nes, a„<I t„" ° '^f°'« and more of t! l '" '""'"J.' "■<'- 
 
 ^' oombi„at> 'crr "»"' P-O.S "tr"-™ -" 
 
 "" precisely tbi, „"'"""''«' at tbe be-i,^ • "''P"'" «'e 
 
 I'^o^^n' PositC of T""^;-""'" in both eZr 7""^' ""'^ ?"?«■•. 
 "-'■■'''le, and ,, e „„! w" "" ''*««. o"P.a7'™* "akes the 
 ws evfv held ! !u ^'"' «"= f"ture\r' "'"' '"''»'• verv 
 
 """""S moi-e .'„,,,„? " '""' of 'var T?" " *"' « "ot 
 
^■1 
 
 1889.] 
 
 Rdation between Capital and Labor. 
 
 i: 
 
 )i 
 
 gets him in his power lie tloes not spare liini. This is not quite to 
 the credit of the workman, but it is the natural outcome of the 
 war relation in vvhit'h the two forces stand to each other. When 
 the workman finds his employer in a position favorable for attack, 
 with large contracts on his hands, with brisk demands for goods, 
 then the screws are applied, and wages are either increased or great 
 loss ensues to the producer, and even, through him, to the workman 
 himself. But the capitalist has his opportunity when business is 
 «lull. When there is temj)oraiy over-production, and the manu- 
 facturer does not need to care much whether he shuts down or 
 not, then he either lowers wages or throws the workman out of 
 employment. 
 
 What, then, nuist be the remedy for this ? Can we return to 
 the peaceful though primitive condition of the fifteenth century, 
 or to the indejjendent though small producing stage of the last 
 century? Evidently not. The perplexities of manhood are not 
 to be escaped by a return to the careless condition of the child. 
 Our safety lies in pi-ogress, our salvation nuist be wrought out. 
 Perfect competition is evidently a thing of the past. We an; 
 movinii' in the direction of c'ond)ination. The extensive use of 
 machinery has made it impossible for small industries to live in 
 competition with the larger, (ireat factories and mills filled with 
 machiner}', minute division of labor, centralization in production, 
 will be the rule for the future. If, then, the workmen are not to 
 give in to the capitalist, if they cannot return to the condition of 
 small, independent producers, and if the present attitude of hos- 
 tility is disastrous and wasteful now, with a worse outlook for tiie 
 future, what is to be done ? What else than for the opposing 
 forces to combine, and, instead of wasting their energies in the 
 endeavor to circumvent and overcome one another, to unite in 
 overcoming natural powers and agents, conquering them for their 
 mutual benefit. W^hat millions are lost to America every year 
 through strikes and lockouts I What millions, too, are lost through 
 bad work, carelessness, lack of interest, and want of industry in 
 working for au enemy ! Does it not appear plain that there is 
 everything to be gained by the combining of capitalists and laborers 
 in a common production ? 
 
 Before considering how this is to be brought about, let us look 
 at two other proposals for overcoming the existing difficulties. 
 First, it is proposed to set up boards of arbitration to mediate 
 between capitalists and workmen, to settle their disputes, to say 
 when wages must be incieased and when they must be lowered, to 
 
 i I 
 
r 
 
 
 ') 
 
 158 
 
 delation hettveen O^^u i 
 
 ■"-y i'-i-„ ti,e ,::.t; : p","-f off of ti,e „vi :;"'^ 'v^:-- 
 
 t-cessarytorthem toT)a«« fi, , ' '^een successf„i t. " 
 
 
1889.] Relation between Capital and Labor. 159 
 
 best advantage. It is here that we find the function of the cap- 
 tains of industry. The successful manager, if not a capitalist 
 when he begins, invariably ends by being one, cither for himself 
 or in i)artnership with his employer. This latter circumstaniic is 
 (juite common now. The manager who proves his ability is almost 
 invariably admitted to a share in the business, and this is every- 
 where admitted to be an advantage to both parties. Now if it is 
 of advantage to the capitalist to admit his higher employees to a 
 share in the business, will it not pay him, from a purely mer- 
 cenary point of view, to admit at least all his competent employees 
 to a share in it also ? I am quite aware that, in the })resent state 
 of society, it is of little use to present any higher motive than 
 a purely mercenary one, either to employers or workmen, as an 
 inducement to change their business methods. Only when indus- 
 trial society has reached a less hostile state of existence than the 
 present, can we begin to present higher motives of action with 
 any hope of success. 
 
 On grounds of pure mammonism, then, here are some of the 
 advantages to be derived from profit sharing, which I take to be 
 the most jjractieable, and yet, at the same time, most progressive 
 and permanent method of solving our industrial problem. It is 
 well known among business men that when manufacturers under- 
 take to fill large contracts, and especially when they undertake to 
 fill them within a given time, they nnist take into consideration the 
 possibility, and even the probability, of a strike among their work- 
 men. They must, therefore, insure themselves against such risks, 
 and tender at a higher rate than the normal one. If, now, a firm 
 or single capitalist is working on the profit-sharing principle, there 
 is no such risk to be considered ; for now it is as nnich to the 
 workman's interest as to his employer's that the contract shouhl 
 be filled within the specified time. Such an employer and his 
 men are therefore able to take the contract away from the others 
 without risk of loss. Then, again, in the ordinary manufacture 
 of goods for the market, the profit-sharing producers can sell 
 cheaper, and yet make more for both capitalist and workmen than 
 the others. They are delivered from all the loss, on both sides, 
 incident to strikes and the machinery connected with them. Be- 
 sides, the efficiency of the workmen would be greatly increased. 
 Knowing that they were to share in the profits of their work, 
 they would have every inducement to work diligently and cheer- 
 fully. They would be careful of the machines or other instru- 
 ments of production which now represent so much capital. They 
 
«««m^ 
 
 ♦I 
 
 I . 
 
 I 
 
 !■■ 
 
 J 
 a. 
 
 V 
 
 i" 
 
 it 
 
 } 
 I 
 
 100 Relation betiveen Capital and Labor. [Fehniary, 
 
 woiiM avoid all possible waste of material, either in the raw con- 
 dition or in the manufactured state. There woidd be no difficulty 
 in getting" them to do extra work when business was pressing, or 
 to lose a little time each day when it was slack. Besides, they 
 would not only bo industrious and careful themselves, but they 
 would see to it that their coni])anions were so also. As things 
 now are, manufacturers or other emidoyers are often unable to 
 discliarge useless workmen, or even to lower their wages, because 
 a strike would bo the result. If it is asked what is to beconu' of 
 the useless or incapable woikmcn, I reply, that, while tho transi- 
 tion is going on from the ordinary wage system to the profit- 
 sharing system, they will simply fall to the lot of the non-profit- 
 sharers. Jiy the time the transition is con»plete, thej' will either 
 have learned the necessity of becoming cajjable and reliable, or 
 will simply sink into the lower grades of unskilled workmen, and 
 be left to find a living as best they can. Profit sharing is not 
 ])resonted as a cure for all social evils. It is simply offered as a 
 solution for the difficulty which exists between laborers who an; 
 capable of recognizing their ratioiu^l interests and the capitalists 
 who cmpl<>y them. As to what is to be done with social incapa- 
 bles introduces an entirely new question. Profit sharing simply 
 aims at saving to the two hostile forces what they spend in fight- 
 ing each other, and what is lost through lack of interest on the 
 })art of workmen in the work whicli they are performing. The 
 workmen's unions need not be broken up ; but they could put 
 off their warlike character and become mutual insurance and 
 benevolent associations. They might even develop into associa- 
 tions for the improvement of their intellectual and social life, or 
 for the discussion of various j)ractical and scientific questions 
 bearing on their occupations. When the whole of their atten- 
 tion was no longer taken up with fighting capitalists and devising 
 means for their circumvention, they would have time for these; 
 other matters. Socially, the improvements brought about by 
 protit-sharing would be very great. Consider what a different 
 country America would be if the antagonism between workmen 
 and capitalists were removed, and in its place a common interest 
 established. The present position also tends to exaggerate the 
 importance of mere wealth, and to make the getting of money 
 the great object of life. Carlyle has well said that the English- 
 man's hell is the failing to get money, his heaven the securing 
 of it. It seems to be even more true as applied to Americans. 
 Mammonism is here, indeed, the only whole-souled worship, with 
 
1889.] 
 
 " The Intellectual Life of America'' 
 
 161 
 
 its heaven of getting money and its hell of failing to get it. But 
 with the disappearance of the opposition between capital and 
 labor mammon-worship would receive a severe cheek, and the ad- 
 vancement of a higher worship be made possibli The initiative 
 to profit-sharing must, of course, come from the capitalists, and if 
 they would but simply consider fairly its advantages, there is every 
 reason to believe that it would soon be adopted. I know of no 
 cases where the system has been given a fair trial and has failed. 
 No doubt there are many who cannot be brought to accept it 
 voluntarily; but if a considerable number of capitalists take it 
 up, as of late they seem more inclined to do, the others will be 
 forced to follow, or go down to the hell of Mammonism. 
 
 Adam Shortt. 
 Queen's Univeksitv, Kingston, Canada.