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The Future of Trades- 
 Unionism and Capitalism 
 in a Democracy 
 
 By 
 Caiarles W. Eliot, LL.D. 
 
 Preiident-Emeritus of Hanrard University 
 
 Being the Larwill Lectures for 1909 
 
 OF THE 
 
 UNIVEBSr 
 
 OF 
 
 LiroP'"' 
 
 G, P. Putnam's Sons 
 
 New York and London 
 
 XTbe ftnlcfterbocfter pte60 
 
 1910 
 

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 COPYXIGMT, Z9Z« 
 BY 
 
 KENYON COLLEGE 
 
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THE LARWILL LECTURESHIP 
 
 This endowrment is the gift of Joseph H. Larwill of 
 the Class of 1855. The object of the endowment it to 
 provide at Gambier for the members of Kenyon College 
 occasional lectures of general interest and also at least once 
 in two years a formal academic course to be published by 
 the Foundation. The donor imposed few conditions, 
 leaving the administration of the Fund and appointments 
 to the Lectureship in charge of the Faculty of Kenyon 
 College. The Fund was given in 1 907 and a number of 
 occasional lectures have since been delivered. These 
 lectures by President Eliot, delivered at Kenyon College 
 October 25 and 27, 1909, constitute the first formal 
 course published by the Foundation. 
 
 m 
 
 oi nfti ^ 
 
CONTENTS 
 
 PART I 
 
 THE FUTURE OF TRADES UNIONISM IN A 
 DEMOCRACY 
 
 PART II 
 
 THE FUTURE OF CAPITALISM IN A DEMO- 
 CRACY . • . . . 70 
 
PART I 
 
 THE FUTURE OF TRADES UNIONISM IN A 
 DEMOCRACY 
 
 THESE lectures are to deal with 
 the effects of democracy on the 
 future of trades unionism and 
 capitalism, two sorts of powerful com- 
 bination which have grown greatly in 
 size and strength in all civilized cotmtries 
 within the past twenty years. The 
 specific question which will frequently 
 recur during the progress of these lec- 
 tures is this: What effect has democratic 
 government had on these two great in- . 
 dustrial combinations or associations, and 
 what effect shotdd it have in the future ? 
 
2 Future of Trades Unionism 
 
 Incidentally, we shall also touch on 
 some effects which these combinations 
 have had on democratic government 
 itself. The interest of the inquiry is 
 all the greater because most Ameri- 
 cans believe that the main source of 
 American efficiency is the high degree 
 of social and industrial liberty which 
 has existed from the beginning in the 
 New World. 
 
 All civilized nations now permit the 
 formation of industrial associations, both 
 of workmen and of proprietors. So much 
 of public liberty has now been won, — a 
 measure of liberty which was imknown 
 before the nineteenth century, so far 
 as workmen were concerned. Companies 
 of merchants or adventiirers, organized 
 for purposes of trade, had long been 
 familiar, like the Hudson Bay Company, 
 
In a Democracy 3 
 
 the East India Company, or the Vir- 
 ginia and North Virginia Joint Stock 
 Companies which were formed in 1606 
 for the estabhshment of two colonies on 
 the Atlantic coast of America. The 
 invention of the corporation with limited 
 liability, near the middle of the nine- 
 teenth century, was, however, the start- 
 ing point of the tremendous expansion 
 of capitalistic association, — so recent is 
 the creation of what we now understand 
 by an industrial or financial corporation, 
 with its capacity to bring together and 
 control great masses of capital, and to 
 give employment to multitudes of la- 
 borers. j[t is the legislation of the most 
 democratic nations which has made legal 
 these huge combinations of workmen / 
 
 and of capital employed in the same ' 
 
 business or trade. Democracy is indeed 
 
^ 
 
 4 Future of Trades Unionism 
 
 respongible for the existence of these 
 formidable combinations, and it is there- 
 fore for democracy to make and keep 
 them contributory to the welfare of the 
 democratic masses. 
 
 It is to be observed, in the second 
 place, that it is the applied science of the 
 last sixty years which has made possible 
 huge associations of workmen or capi- 
 talists, numerous as regards membership, 
 and covering large areas of the national 
 territory, or even the whole of it. The 
 modem means of communication by steam 
 and electricity have made possible quick 
 and simultaneous action by great bodies 
 of men. A common interest, or a com- 
 mon feeling or passion can get expressed 
 in action over half the continent within 
 a few hours. Organized labor and or- 
 ganized capital have both learnt to avail 
 
In a Democracy 5 
 
 themselves of these facilities with prompt- 
 ness and completeness. Both are accus- 
 
 » - — "*■ ' — ' — "■■ 
 
 tomed to act in secret, until an appeal to 
 public opinion becomes necessary; and '^ 
 both combinations desire and seek a / 
 monopol y, or as ne ar an approach to 
 rnqnopoly as circiimstances^ennit. Now 
 democracy must always distrust secret 
 organizations which aim at exerting a 
 strong and even an overwhelming in- 
 fluence on affairs which nearly concern 
 any considerable portion of the popula- 
 tion. Furthermore, freemen have always 
 abhorred rnonopoly, and are likely to 
 continue to abhor it. Every American| 
 citizen who has something to sell hates ' 
 to find, on trial, that there is only one ^ 
 buyer for his commodity; and every ^ 
 citizen who wishes to buy something is 
 vehemently opposed to any pubhc or 
 
6 Future of Trades Unionism 
 
 private arrangement which results in 
 V there being but one seller. | Historical 
 instances of these feelings on the part 
 of men who thought themselves free 
 are abundant, and so are recent ex- 
 hibitions of the same feelings. Many 
 modem governments carry on manu- 
 factures as monopolies in order to raise 
 revenue in an indirect way; but this 
 ancient practice has never commended 
 1 itself to the American democracy. What 
 I pT ' the .democracy asks of its government 
 ^ i s, that it r egulate inevitable monopolies, 
 and prevent any others, or, in other ' 
 words, the democracy expects its govern- 
 ment to prevent monopolies from limit- 
 ing production and determining prices 
 in their own interests without regard to 
 the interest of the community. The 
 labor unions on the one hand and the 
 
In a Democracy 7 
 
 corporations on the other have created 
 such large and extensive combinations 
 that no power but that of government 
 can deal with them successfully. Hence 
 the general democratic demand for the 
 governmental regulation of all public 
 utilities, including mines, and of all the 
 combinations — trusts or unions — ^which 
 deal with necessaries of life. 
 
 In order to appreciate the probable 
 effects of democracy on the future of 
 trades unionism and capitalism, It will 
 be necessary to keep in mind the objects 
 and ends of democracy. These are free- 
 dom and appropriate opportunity for the 
 individual, wide though not equal dis- 
 tribution of property, and the untram- 
 melled pursuit of the durable satisfactions 
 of life. The effective democratic powers 
 for good are the intelligence of the mass 
 
 7 
 
1 
 
 8 Future of Trades Unionism 
 
 of the people increased through universal 
 education, the efficiency of the people 
 at work through the exercise of individual 
 liberty and co-operative good-will, and 
 the maintenance throughout the life of 
 each individual of the hope and expec- 
 tation of improving his own, or his 
 family's lot. We shall have occasion to 
 inquire how far trades unionism on the 
 one hand and capitalism on the other 
 are in sympathy with these ethical and 
 economic principles of modem democracy. 
 We shall also have occasion to con- 
 sider how trusts and tmions have alike 
 abused the new powers of association 
 which free governments have conferred 
 on them. Public liberty gave the rights 
 which these combinations exercise, and 
 is therefore the source of the good they 
 do; but public liberty is also responsible 
 
In a Democracy 9 
 
 for permitting abuses of the powers it- 
 • self conferred. The abuses now tool 
 frequently permitted are very serious, 
 because they restrict or destroy the 
 individual freedom of workman or pro- 
 prietor; and this freedom is the main 
 source of American efficiency. 
 
 The subject of the first lecture is 
 **The Future of Trades Unionism in 
 a Democracy.'' Trades imionism came 
 into being tmder undemocratic forms of 
 government shortly after the new devel- 
 opments of mechanical power changed 
 completely the methods and conditions 
 of many fimdamental industries. While 
 the htmian race gained many advantages 
 from the advent of steam-driven ma- 
 chinery and factory organization, great 
 abuses accompanied these innovations. 
 Good and evil for the producing laborers 
 
10 Future of Trades Unionism 
 
 and for the consumers were intimately 
 blended in all the new factory industries. 
 The methods of the new trades unions, 
 organized to improve the condition of 
 the laboring people, were necessarily the 
 methods of fighting, violence, and war. 
 
 j The conflicts of the employed with the 
 employers were often barbarous and 
 cruel on both sides. Nevertheless, the 
 efforts of the unions were gradually suc- 
 
 1 cessful. Through them higher wages 
 and shorter hours were procured at a 
 time when no disinterested and humane 
 person could doubt that wages were too 
 low and hours too long. This clear 
 success gave the working people confi- 
 dence in the violent methods employed. 
 The United States was slow to import 
 from England trades unions and their 
 practices, because the industries which 
 
In a Democracy ii 
 
 required mechanical power and factory 
 organization were developed later here; 
 but when such industries had been estab- 
 lished in this country in considerable 
 ntmibers, and when, moreover, large 
 numbers of persons of foreign birth came 
 to be employed in those industries, the 
 trades unions became potent in the 
 United States; and for the most part 
 they adopted the same policies which they 
 saw had been successful imder more 
 trying conditions in Europe. Gradually 
 new policies, looking toward the creation 
 of a monopoly of labor in each particular / 
 trade by the union of that trade, came , 
 into use. I invite your attention first 
 to a consideration of these monopolistic 
 policies. 
 
 The first is the Umitation in the num- 
 ber of apprentices that shall be employed 
 
12 Future of Trades Unionism 
 
 in a given trade, or rather in a given 
 manufacturing establishment. The rules 
 of many unions prescribe the number of 
 apprentices that shall be employed in 
 any industrial or producing estabUshment 
 in proportion to the number of journey- 
 men employed, and this limit of the 
 number of apprentices is ordinarily far 
 below the nimiber which it wotild be for 
 the interest of the proprietor to employ. 
 The object of this limitation is to keep 
 down the ntimber of journeymen in the 
 trade, so as to prevent the coming into 
 the trade of a ntimber of persons so great 
 as to affect the rate of wages, or, in other 
 words, to produce within the trade an 
 undesirable competition for employment. 
 With a similar intention, trades unions 
 have in general resisted the introduction 
 of trade schools into public-school sys- 
 
 n 
 
In a Democracy 13 
 
 terns, and have also been disposed to 
 interfere with the work of private or 
 endowed trade schools. They thought 
 they saw in such schools a danger of an 
 over-supply, from their point of view, 
 of competent candidates for admission 
 to the trades. Of late years, however, 
 the attitude of the unions toward trade 
 schools has become less hostile than it 
 formerly was, partly because of the ease 
 with which trades unions have in many 
 communities enlisted the graduates of 
 trade schools, and partly because of the 
 steady rise of wages in most trades in 
 spite of the advent of trade school 
 graduates. The policy of limiting the 
 number of apprentices flies in the face 
 of the American doctrine that education 
 should be free to all, and should furnish 
 a useful training for the practice of any 
 
 / 
 
14 Future of Trades Unionism 
 
 art, trade, or profession. Moreover, it 
 is a selfish and monopolistic policy with- 
 out mitigation. Its object is to keep 
 down the number of workmen in the 
 trade concerned, to raise wages, and 
 thereby to make the product scarcer and 
 dearer. In many imions the rules make 
 apprenticeship tmnecessarily long; so that 
 all the instruction to be obtained as an 
 apprentice has been received long before 
 the apprentice is permitted to become 
 a journeyman. The same lesson is given 
 a thousand times, when the youth can 
 easily assimilate its substance and ac- 
 quire the corresponding skill from only 
 a hundred repetitions. Furthermore, 
 many unions lay down rules which make 
 it hard for a journeyman to become an 
 employer, prescribing, for example, that 
 no one shall become an employer imtil 
 
In a Democracy 15 
 
 he is prepared to employ a specified num- c^^^ 
 ber of journeymen. Such rules tend to 
 stiffen every class or set of mechanics 
 or operatives. Each p 1^s;s ? is hard to get 
 into, and still harcjf^r to S^^ ^^^^- ^\ 
 
 so that the true demorT p),|,]r mnhilify 
 b etween cl asses or sets of working oeo- ^ ,^ X 
 pie is se riously impaired. In the usefufT \^ 
 
 organizations representing the professions ^ lU^ "^ 
 and other liberal callings there is nothing 
 which corresponds to this stiffening of 
 social classes brought about by trades 
 unionism, and in trades unionism itself 
 there is no need of it. It is a survival iLg^^^ 
 of the fighting times of trades unionism. ] f/A ^n 
 Every fighting organization is compelled ^ -saA *^' 
 to sacrifice in large measure the indi- 
 vidual liberty of its members. Herein 
 unionism and demo cracy are in abs olute ^ 
 f}2]2nigjj;ion 
 
 ^ 
 
 indi- v/ 
 
r 
 
 1 6 Future of Trades Unionism 
 
 Two other monopolistic inventions 
 ' have, within years comparatively recent, 
 \ ^ been adopted by trades unionism, the 
 V^ f-x boycott, and the union label. The boy- 
 ' ^ cott is intended to prevent all persons 
 from buying, or even handling com- 
 mercially, articles not made by tmion 
 labor; and the union label is intended to 
 support the boycott, and to enable and 
 induce the public to discriminate against 
 articles which do not bear the label. 
 The object of both policies is to secure 
 all the productive labor in a given trade 
 for union men; to this end articles or 
 goods made by non-union men must find 
 no market. The monopolistic aim of 
 these policies is perfectly plain, although 
 it is often denied by labor leaders, who 
 dislike to have that word applied to 
 their own practices. 
 
In a Democracy 17 
 
 Any strong union will be very strenu-1 
 ous in resisting any trespasses on what T) A^^^ 
 it regards as its own province or field ryff'*) 
 of labor by members of other trades or . JjJ' 
 indeed of other unions. Thus, for in- )ty ^ [^ 
 stance, if a union man who is putting - v )] I a J 
 into a new building the tubes which 
 enclose electric wires should use a hammer 
 and cold chisel to cut a little recess in ^ 
 a brick wall to accommodate the small ^....^ 
 box through which the direction of the «)f* 
 tubing is often changed, all the brick- ^^.jjs^v''^ 
 layers employed in the building would lay .qju^^ 
 down their tools — the wiring man would tj,^-'^ 
 be trespassing on the province of the 
 Bricklayers' Union. This policy is mono- 
 polistic in the highest degree and, more- . 
 over, increases the total cost of every 
 building which requires the services of 
 members of various crafts. It also tends 
 
1 8 Future of Trades Unionism 
 
 to narrow the field of each trade, thereby 
 diminishing the variety of interest in 
 the work of the trade and the variety 
 of personal capacity to be gratified 
 therein. 
 
 Many unions refuse to handle in their 
 respective trades materials made by non- 
 union labor, or coming from factories 
 which are not conducted exclusively on 
 union rules. This policy, if carried out 
 successfully by a strong union which 
 J^' yi^overs a large area, is capable of forcing 
 Y^rT the manufacturer to unionize his estab- 
 
 ] ' lishment ; whereupon the unfortunate con- 
 
 sjr i sumer is likely to be at the mercy of the 
 
 ^^ L manufacturer and the union combined. 
 These monopolistic combinations are 
 often entirely successful in the United 
 States, or in large parts thereof, par- 
 ticularly in the building trades, and their 
 
In a Democracy 19 
 
 recent successes account for a consider- 
 able portion of the great rise of prices 
 which has taken place in this country 
 during the last five years. The manu- 
 facturer of plumbers' supplies, for exam- 
 ple, makes an agreement that he will sell 
 only to jobbers and to plumbers. The 
 jobber agrees that he will sell only to 
 plumbers. The plumbers are all union 
 men. The owner of a building imder 
 construction cannot buy plumbers' sup- 
 plies unless from some independent manu- 
 facturer who is not in the combination. 
 If he buys of such an independent manu- 
 facturer, the pltimbers at work in his 
 building will not touch the materials he 
 has bought. In the district covered by ^ ajp.t- 
 such an agreement there is no competi- >^ ' 
 tion which is really free. If there are ,^tn^ 
 plumbing materials produced under union , p^ 
 
 r^ 
 
20 Future of Trades Unionism 
 
 rules which differ in merit or availabihty, 
 the owner or builder may have some 
 choice among those various products; 
 
 rbut it is easy for the group of manu- 
 facturers to arrange prices to suit them- 
 selves, and the constimer will probably 
 find himself at their mercy. The root 
 of this serious difficulty for the average 
 constmier is in the policy of the unions not 
 to handle non-union-made materials. It 
 .is a strong monopolistic policy which 
 J a /practically destroys free competition. A 
 ""^ .^r%.^iBxm.eT out on the prairie who with his 
 son can himself screw pipes together and 
 set up a sink or a bowl may be able to 
 buy his materials of independent manu- 
 facturers; but the dweller in towns and 
 cities who does not possess the farmer's 
 skill or enjoy his privacy has no defence 
 against the plumbers' monopoly. As 
 
 r 
 
 
In a Democracy 21 
 
 a nde, the employing or contracting 
 plimiber is equally defenceless. 
 
 It wotild be hard to exaggerate the 
 intense opposition between all these 
 monopolistic policies and the individual 
 freedom in education, in family life, in 
 productive labor, and in trade, which is 
 the object and end of rlrmnrrnry -^ 
 
 The limitation of output is a trades- 
 union practice which combines in an 
 unwholesome way a selfish unfaithful- 
 ness to duty in the individual workman 
 with a deceptive notion of philanthropic 
 interest in fellow-workmen. It seems 
 to be based on the idea that the amount 
 of work to be done in any given trade at 
 any given time is a fixed quantity, and 
 that the smaller the contribution each 
 workman makes to that fixed quantity, 
 the more workmen must be employed to 
 
 X 
 
1^ 
 
 22 Future of Trades Unionism 
 
 accomplish the total task. Therefore, 
 the less each workman does in a day, the 
 ^l" more of his comrades will get employ- 
 ment. Wherever this policy is success- 
 fully carried out, the result is that the 
 individual trades unionist does a day's 
 work much below his reasonable capac- 
 ity, to his own demoralization and the 
 destruction of real good-will between 
 \ employer and employed. It is impos- 
 sible for a workman to preserve his own 
 self-respect or his own personal efficiency, 
 if he habitually works for day's wages at 
 a speed below his natural personal capac- 
 ity. If this policy shotild be successfully 
 carried out in many large-scale indus- 
 tries throughout the United States, the 
 efficiency of the population at work 
 wotild be seriously reduced within ten 
 years, and the reduction would be pro- 
 
In a Democracy 23 
 
 gressive. No man, however well edu- 
 cated, intelligent, and naturally ambi- 
 tious, can long resist the effect on his own 
 character of working in the way pre- 
 scribed by many unions to limit output. 
 He will soon become an indifferent, unam- 
 bitious workman, without any genuine 
 good-will toward either his employer or | fl 
 the public; and the pretended altruistic 
 motive in favor of his feirow-workmen 
 in the same trade will not protect him 
 from this degeneration, because it is 
 vague, uncertain, and selfish for his class, 
 as well as for himself. This limitation 
 of work is the most degrading of all 
 the trades-union doctrines and practices; 
 for it destroys the enjoyment of achiev- 
 ing, and that enthusiastic pursuit of an 
 ideal which makes work done in an 
 artistic spirit and with good will a durable 
 
7 
 
 24 Future of Trades Unionism 
 
 % ( satisfaction throughout life. It defeats 
 the true denaocratic standard for a work- 
 ingman's life — increasing intelligenp^, 
 
 > \^ efficiency, personal liberty, and coopera- 
 
 fT V \ '' I ' ' " " 
 
 '- , X \ tive good-will. In resisting to the utmost 
 ^ ' this doctrine of the limitation of output, 
 Q :he associations of employers are defend- 
 t ing democracy, and promoting the pros- 
 perity and happiness of the laboring 
 multitudes. 
 
 Another trades-union doctrine that has 
 had a very unfortunate effect on individ- 
 ual character is the doctrine or practice 
 of the minimtim wage. All members of 
 a imion — in the carpenter's or mason's 
 trade, for example — ^must receive, when 
 employed, a certain wage called the 
 minimimi. In practice that wage turns 
 out to be a uniform maximtmi wage, and 
 it is ordinarily put at a level above the 
 
c °^ V 
 
 ^"""^"^^Tn a Democracy 25 
 
 worth of the less skilful workmen, and 
 below the worth of the most skilful; and 
 no distinction is made between the yotmg 
 man who has just been admitted to the 
 union and the older man who possesses a 
 much higher degree of skill. This prac- 
 tice is for the pecuniary interest of the 
 younger and least skilful workmen, who, 
 as a rule, predominate in the union, or at 
 least are its most assiduous members. 
 The first effect of this practice is to 
 deprive the yotmger members of a tmion 
 of all motive for improvement. No 
 amount of personal merit can procure for 
 the young member of the union an 
 advance of wages. He receives at the 
 start the uniform wage, and the veteran 
 who is a member of the same union is 
 receiving no more. No effort on his W 
 part can raise his wages. The only way 
 
26 Future of Trades Unionism 
 
 in which a union man's wages can be 
 advanced is through the collective bar- 
 gaining of the imion, and any advance 
 effected by the union will take effect on 
 all workmen, good, bad, and indifferent — 
 \ ^ so far as employment can be procured 
 "1^ X'lf^l for them. No increase of skill or effi- 
 ^ '4( ciency in the individual workman will 
 
 ' ' ^ f avail to increase his income. The dis- 
 ^ astrous effect of this policy of the uniform 
 wage on the desirable and happy increase 
 of intelligence, efficiency, and good will 
 as life goes on, is perfectly apparent. 
 The contrast between the effects on the 
 individual workman of the employments 
 regulated by unions and the effects of the 
 liberal and artistic professions on the 
 individuals comprising them is striking 
 indeed. It is one of the principal attrac- 
 tions of a profession or an artistic calling 
 
 //' 
 
In a Democracy 2^ 
 
 that the progress of the individual depends 
 on his own personal merit and industry. 
 For a successful man in these callings 
 the compensation rises throughout life. 
 It may begin small in comparison with 
 the wages of a young unionist in a trade; 
 but it rises soon and much higher. The 
 professional man or the artist has the 
 joy of personal achievement and the re- 
 wards appropriate to rising merit. Now 
 every successful artisan ought to win 
 that joy, and analogous, if not equal, 
 rewards. The trades-union doctrine of 
 the uniform wage stands squarely in his 
 way. The tmion represses ambition for 
 excellence. It is true that labor leaders 
 and representatives of trades unionism 
 often allege that the unions have no 
 objection to the employer's paying more 
 than the minimum wage; but this state- 
 
28 Future of Trades Unionism 
 
 ment by no means meets the objection to 
 the general policy of uniform wages, and, 
 moreover, that policy is supported by 
 the limitation of output and by the 
 serious objection made by most unionists 
 to ''pace-setters'' and other zealous or 
 unusually rapid workers. The fact is, 
 that the unions think it necessary to 
 sacrifice individual liberty, and all that 
 comes of it, to the necessity of standing 
 together for a higher minimimi wage. 
 Now a true democracy means endless 
 variety of capacity freely developed and 
 appropriately rewarded, Uniformity of 
 wages ignores the diversity of local 
 conditions as well as of personal ca- 
 pacity, obstructs the ambitious workman, 
 cuts off from steady employment those 
 who cannot really earn the minimum 
 wage, and interferes seriously with the 
 
In a Democracy 29 
 
 I 
 
 workman's prospect of improving his 
 lot. 
 
 It is high time it should be generally 
 understood that trades unionism in im- 
 portant respects works against the very- 
 best effects of democracy. It is the 
 practices of the professions, the higher 
 walks of business, and the artistic callings, 
 which best illustrate the fortunate results 
 of genuine democracy on personal char- 
 acter, or, in other words, the effects on 
 individual character of the utmost liberty 
 under law. 
 
 In contending against the tmiform 
 wage and the limitation of output, 
 employers in many highly organized 
 industries have resorted to the method of 
 compensation called piece work^ and to a 
 systematic subletting to a group of work- 
 men who among themselves make their 
 
</. 
 
 30 Future of Trades Unionism 
 
 own bargains, of the labor of constructing 
 some part of the total machine, garment, 
 piece of furniture, or other object, which 
 is the product of the factory concerned. 
 Either of these arrangements makes it 
 possible for the employer to determine 
 with an approach to accuracy the labor 
 cost of the article he produces, and 
 makes him independent of the imion's 
 scale or schedule of wages. Either of 
 these methods affords scope for the 
 meritorious or able individual, and is 
 . Jc therefore much to be preferred by the 
 I workman, unless the stimulation to the 
 individual is so intense, and the piece or 
 contract work so limited and monoton- 
 ous as to become imwholesome. Unfor- 
 ttmately there are many industries to 
 which piece work and contract work are 
 not easily applicable. Moreover, the 
 
In a Democracy 31 
 
 unions^s a rule, oppose the use of these 
 methods of compensation. . /} 
 
 The multiplication of trades unions / y^U^ 
 
 and their strength atjast compelled manu- ^ fT 
 
 9 
 
 facturers to form associations capable of 
 resisting the powerful unions. It was 
 much more difficult to form strong asso- 
 ciations of owners or employers than to 
 form trades unions, and it was only 
 recently that the manufacturers' and 
 employers' associations really came into 
 effective existence. The fact seems to 
 I be, that neither combination, if vast and 
 I successful, is endurable in civilized so- 
 ciety without the other. Either alone 
 would be intolerably tyrannical. A sin- 
 gle manufacturer, or a single railroad, 
 I finds it very difficult to resist the strike 
 or the boycott; and the imions became 
 ingenious in attacking one proprietor or 
 
 ^ 
 
S: 
 
 32 Future of Trades Unionism 
 
 one corporation at a time, or in attacking 
 a public-utility corporation in one city 
 at a time, or the railroads in only one 
 section of the country at a time. In 
 short, they learned how to conquer by 
 dividing or distributing their attacks. 
 
 The necessity of encountering associa- 
 tions of employers which were as wide- 
 spread and comprehensive as the unions, 
 and fully as strong, led the unions to the 
 invention and development of the joint 
 agreement which is an agreement con- 
 cerning wages, hours, and conditions of 
 labor, covering a specified period, and 
 made after conference between a union 
 or imions and a manufacturer or an 
 association or group of manufacturers. 
 . It has often been said of late that the 
 joint agreement is the real goal of 
 unionism. The capitalist, or the associa- 
 
In a Democracy 33 
 
 tion of capitalists, is forced to deal with 
 the iinion, and not with individual work- 
 men. The union secures collective bar- 
 gaining, and is much more vigorous in 
 that bargaining than the individual work- 
 man could possibly be. The parties to 
 the agreement are strong and resolute, 
 and yet both dread a stoppage of work. 
 Evidently this sort of negotiation, what- 
 ever its outcome, is much to be preferred 
 to destruction of property, fighting be- 
 tween union men and non-union, and the 
 arrest of production, particularly if the 
 industry concerned has to do with neces- 
 saries of life or with transportation. In 
 short, the joint agreement is an improve- 
 ment on industrial war; but its plain 
 tendency is to determine wages and con- 
 ditions of work on the one hand, and 
 profits on the other, with the least pos- 
 
 yf\ 
 
34 Future of Trades Unionism 
 
 ^^^^^^^''^^''sible regard to the consumers. In the 
 ^^j^/f^y^ discussion of any joint agreement the 
 fimdamental question must always be — 
 what terms can the two parties acting 
 together exact from the community at 
 large? The two combinations are both 
 monopolistic in desire and tendency. 
 Can they settle their differences by a 
 compromise, and force the community at 
 large to pay the cost? If they think they 
 can, they will ; for that is by far the easiest 
 way to adjust their differences and keep 
 the industry going, which is for the inter- 
 est of both the contending parties. 
 
 In democratic society, however, the 
 effects of the combined action of these 
 two powerful organizations, of labor on 
 the one hand and capital on the other, 
 can be checked in three ways, which 
 involve the use of no autocratic power, 
 
In a Democracy 35 
 
 but depend on the voluntary action of 
 the mass of the consumers, which is also 
 the mass of the voters. 
 
 The first way of resisting the monopo- 
 listic force of such a combination of a 
 corporation with a trades tmion is the 
 immediate and widespread reduction in 
 the consumption of the article affected 
 by the monopoly. The constiming power 
 of the American people for any given 
 article of food or clothing or building 
 material is distinctly limited, and much 
 more closely limited than people sup- 
 pose. A considerable rise of prices forces 
 multitudes of the common people to give 
 up using articles to which they have been 
 accustomed, or to reduce the amount 
 they use. Prices easily become pro- 
 hibitive for a large portion of the popu- 
 lation. Cheaper materials thereupon 
 
36 Future of Trades Unionism 
 
 replace the dearer. Thus cheaper and 
 poorer woods replace pine, soft stones re- 
 place hard, concrete comes into use instead 
 of brick or stone, stews replace roasts, and 
 cotton fabrics take the place of woollen. 
 This all means that in an intelligent and 
 wide-awake democratic society, which 
 does not dread but rather likes the new 
 or novel, and is not the slave of tradition, 
 the constraiption of any article which has 
 become subject to a monopoly may be 
 suddenly and effectively reduced. Even 
 the most solid monopolies fear the absti- 
 nence of the constimer. 
 
 The second method of resistance to 
 monopolies in the United States depends 
 on American inventiveness. In this 
 country invention progressively develops 
 new materials, tools, machines, and struct- 
 tires, which may impair the value of the 
 
In a Democracy 37 
 
 stock-in-trade of established industries 
 and trades, and ultimately compel modi- 
 fications of their plants, products, and 
 policies. Thus, the invention of mercer- 
 ized cotton and the great extension of its 
 applications in the arts have in recent 
 years equipped the American people to 
 defend themselves against the high prices 
 of silk goods. The mass of the people 
 have replaced silk goods in large measure 
 with cotton goods, made to look and feel 
 like silk. Again, the high wages in the 
 building trades and in the trades which 
 prepare btiilding materials, and the high 
 price of land have developed the tall 
 apartment house and the tenement house 
 in closely built cities where land is 
 dearest, and the wooden three-decker in 
 suburbs. The ordinary American family, 
 whose bread-winner earns from fifteen to 
 
38 Future of Trades Unionism 
 
 twenty-five dollars a week, has thus been 
 forced into much smaller quarters than 
 it used to occupy in its separate house 
 with a bit of land about it. Tolerably 
 effective resistance has thus been made 
 to the rise in the cost of building, and 
 therefore in rents; and this resistance has 
 been made possible through a long series 
 of inventions and contrivances worked 
 out by architects and builders. The 
 ultimate result — ^the crowding of the 
 family into a few small rooms — ^is much 
 to be deplored; but the American con- 
 sumer has demonstrated on a large scale 
 that he knows how to take advantage 
 of new inventions and contrivances to 
 meet the adverse conditions forced on him 
 by monopolistic combinations of laborers 
 and capitalists acting together under 
 joint agreements. This check on mon- 
 
In a Democracy 39 
 
 opoly is, however, less effective in the 
 United States than it is in England; 
 because American law permits an indus- 1 
 trial corporation or partnership to buy 
 and pocket any patent which threatens 
 to modify its business; whereas in Eng- 
 land the buyer of a patent must make 
 use of it within a reasonable time, or 
 the patent is invalidated. There is urg- 
 ent need of a change of American law in 
 this respect. 
 
 The third democratic remedy for the ' y 
 evils brought upon the community by 
 monopolistic combinations is legislative 
 regulation. This remedy has been 
 brought into use in the United States 
 because of the attempts of monopolistic 
 combinations to control the supply or 
 price of necessaries of life, such as water, 
 light, fuel, food, and steam and electric 
 
 1>5 
 
40 Future of Trades Unionism 
 
 transportation. The intervention of gov- 
 ernment has oftenest taken place con- 
 cerning fuel, light, and transportation; 
 but it is always at hand ready to be 
 called on to limit monopolies, and able 
 to enforce its orders through courts and 
 special commissions. Those perfect mon- 
 opolies, patents and copyrights, have 
 shown legislators and lawyers how mon- 
 opolies in general, either nattiral or 
 artificial, may best be regulated. They 
 may be limited to specified periods of time 
 or to specified areas, or, as in the case of 
 railroads, to specified rates. Democracy 
 will probably take more kindly to the 
 regulation of monopolies than any other 
 form of government; because it takes 
 more thought than any other form of 
 government for the welfare of the silent 
 but voting masses. 
 
In a Democracy 41 
 
 It is under these limitations, then, 
 that any industrial combination, whether 
 of laborers or of capitalists, must work in 
 a democracy. Under earlier forms of 
 government, the worst monopolist was 
 often the government itself. Under de- 
 mocracy, the government may, through 
 its tax laws, including tariffs, become the 
 protector or promoter of some monopo- 
 lies, but does not itself conduct any 
 monopolized industry for a profit. 
 
 A very undemocratic element in the 
 conduct of both labor unions and em- 
 ployers' associations is the secrecy with 
 which the business they think important 
 is conducted. The object of this secrecy 
 is in both cases preparation for war. 
 The labor imion which is planning a 
 campaign for higher wages, shorter hours, 
 or improved conditions under which to 
 
42 Future of Trades Unionism 
 
 perform their labor, thinks that the blow 
 they are preparing to deliver must be 
 struck on a sudden without warning to 
 the employing person or corporation. 
 A proprietor, personal or corporate, who 
 is contemplating a lockout or a re- 
 duction in wages feels in the same way 
 about the necessary suddenness of the 
 announcement. In either case the blow 
 must be struck without giving the other 
 party time to prepare a defense. In all 
 such cases the industrial dispute begins 
 in the most disadvantageous manner, 
 that is, with a deep sense of injury on the 
 part of the party surprised. One of the 
 objects of the admirable Canadian Act 
 called the Industrial Disputes Investi- 
 gation Act was to prevent this sudden- 
 ness of attack by either party to a 
 dispute. It provides that no strike and 
 
In a Democracy 43 
 
 no lockout shall be legal until the dispute 
 has been thoroughly investigated by an 
 impartial tribunal, and the finding of the 
 tribunal made public. The Act pro- 
 vides for no arbitration whatever, and 
 depends wholly upon the complete pub- 
 licity which either party to a dispute 
 may secure. The Act, however, does 
 prevent a sudden strike or a sudden 
 lockout, because the appointment of a 
 tribunal and its action usually requires 
 from fotir to six weeks. Meantime, 
 public opinion has been thoroughly in- 
 formed concerning the causes of the dis- 
 pute, having received the report of a 
 special tribunal appointed in an equit- 
 able manner to investigate the dispute 
 with all possible publicity. This Act 
 has now been in force for three years, 
 and the experience of Canada tmder it 
 
44 Future of Trades Unionism 
 
 is in the highest degree promising. If 
 any party to an industrial dispute ex- 
 hibits distrust of publicity, the probabil- 
 ity is that there has been something in its 
 conduct which it fears the public will 
 not approve; it is not sure of the real 
 equity of its conduct. The whole re- 
 liance of this Canadian invention is on 
 the effect of publicity concerning indus- 
 , trial disputes. This accoimts for the 
 provision that either party to a dispute 
 may secure the appointment of an impar- 
 
 rtial tribunal. The consent of the other 
 party is not necessary, though it is desir- 
 able. For preventing industrial war- 
 fare, the provisions of this Investigation 
 Act are much wiser than those of ^ny 
 arbitration procedure thus far devised. 
 / Experience has proved that arbitration 
 means compromise between opposing 
 
 ) 
 
In a Democracy 45 
 
 claims, and it is nniform experience that 
 the prospect of a compromise exaggerates 
 the claims of both parties. Moreover, 
 there are many industrial disputes which 
 should not be settled by any compromis- 
 ing adjustment. The arbitration method 
 as practised in industrial warfare is an 
 actual promoter of hostile relations and 
 future strife. 
 
 A discredited method in industrial 
 strife is the sympathetic strike, or the 
 strike of men who, having themselves no 
 grievance or subject of complaint, aban- 
 don their work to support a imion or 
 tmions in some other trade in which war 
 is going on between employers and 
 employed. The sympathetic strike was 
 used frequently a few years ago as a for- 
 midable weapon of offense against em- 
 ployers as a class; but it turned out that 
 
46 Future of Trades Unionism 
 
 this proceeding did not commend itself 
 to the popular judgment; so that instead 
 of strengthening the position of the 
 strikers who had a grievance it really- 
 weakened it. The comparative disuse 
 of the sympathetic strike is a good 
 illustration of the effect of pubUc opinion 
 on labor-union policies. The frequent 
 failure of boycotts is another illustration 
 of the real control of public opinion 
 over trades-union policies, when those 
 policies run counter to the average judg- 
 ment of the democratic masses. The 
 boycotts ordered and maintained by the 
 American Federation of Labor have fre- 
 quently failed of their object, although it 
 is only in recent years that the courts 
 have begtm to defend society from these 
 O outrageous interferences with industrial 
 liberty. 
 
In a Democracy 47 
 
 In the United States the so-called 
 general strike has never been attempted, 
 although in one recent instance it has 
 been threatened. Such strikes have been 
 attempted several times in Europe, but 
 usually with some purpose of a reforma- 
 tory or revolutionary sort. American 
 labor leaders have seen clearly, first, that 
 the general or universal strike is impos- 
 sible for any length of time, and secondly, 
 that democracy would not tolerate a 
 general suspension of industries with no 
 other object than to promote the pecimi- 
 ary interest of a single class, or of any set 
 or group of workmen however large. 
 
 It has been the greatest reproach of ) 
 trades unionism that it does nothing to i ^v 
 prevent the use of violence in industrial A y 
 disputes. A hundred years ago, or even j ^ 
 fifty years ago, in Europe violence and 
 
48 . Future of Trades Unionism 
 
 disorder were the inevitable accompani- 
 ments of all strikes, and the public force 
 of police or soldiery that stopped violence 
 and prevented the destruction of property- 
 was directed by autocratic or oligarchic 
 governments which represented the opin- 
 ions of only the upper classes of society. 
 p( It is very different in this country. It 
 
 is the great mass of the people in a de- 
 mocracy like that of the United States 
 which resents mob violence, the de- 
 struction of property, and the breaking 
 of the public peace; and in consequence a 
 strong public opinion at once begins to set 
 against any striking union or group of 
 unions which takes to violence. It is 
 only a question of time when this public 
 opinion will get expression in the vigorous 
 use of the public protective force. In 
 remote or sparsely settled regions, where 
 
In a Democracy 49 
 
 no adequate public protective force exists, 
 violence in strikes may be for a time 
 successful; but it is almost sure to be 
 defeated in the end by a superior force 
 which fights for order and the publig 
 peace. In the repression of public dis- 
 order of any sort a democratic govern- 
 ment will often use the public force sooner 
 and more severely than a despotic or aris- 
 tocratic government would dare to do. 
 The reason is that the public force used 
 is itself a democratic force, commanding 
 the sympathy and support of the great . 
 body of the people. Exceptions to this / 
 general principle sometimes occur; buf 
 they are almost always cases in which 
 mob violence is used in support of a 
 widespread popular prejudice or in sym- 
 pathy with some popular passion. It 
 may reasonably be expected that trades 
 
 k 
 
^ jiP^ 50 Future of Trades Unionism 
 
 ^ \y^ unionism will more and more give over 
 the use of violence during strikes; and 
 the reason will be that the democracy is 
 offended by violence, and the cause of 
 the strikers is weakened thereby. 
 
 Any one who has been long engaged 
 in the work of teaching will necessarily 
 have a strong sympathy with much of 
 the work that labor unions have done in 
 the world, and with some of the prin- 
 ciples which still animate them and make 
 their strength. A teacher or an educa- 
 tional administrator has probably been 
 himself employed under humane con- 
 ditions, and the work to which he has 
 been devoted is prestmiably a process of 
 gradually uplifting htmian society, or 
 that part of it which is within his field 
 of influence. Now the members of trades 
 imions, as a rule, believe that the work of 
 
In a Democracy 51 
 
 the unions tends to uplift the laboring 
 masses. They believe that when they 
 engage in industrial warfare to get more 
 pay or more leisure they are also fighting Q 
 to improve the general condition of their 
 class, though at a present sacrifice. The 
 complaint that the hand-worker does 
 not get his share of comfort and enjoy- 
 ment in this world is centuries old, and 
 has often been well-founded; and the 
 efforts which trades unions have made 
 to improve the conditions of employment 
 in all the chief industries which support 
 civilized society are so commendable that 
 society at large ought to be patient with 
 the false theories or bad practices which 
 have impaired or counteracted the good 
 effects of their work, such, for example, 
 as restrictions on apprenticeship, limita- 
 tion of output, advocacy of the boycott 
 
 
52 Future of Trades Unionism 
 
 and the union label, failure to punish 
 violence on the part of their own mem- 
 bers, and the persistent effort to drive 
 all the workmen in a given trade into the 
 union in order to secure a monopoly of 
 labor in that trade. A further illustra- 
 tion of the mixed good and evil in their 
 work is their administration of their 
 benefit ftmds. Many unions offer sick- 
 ness and death benefits to their mem- 
 bers, particularly to members who have 
 maintained membership during a con- 
 siderable number of years. These bene- 
 fits, however, are sacrificed if the old 
 member withdraws from the union or is 
 expelled. The benefits acquired there- 
 fore by long membership in a union may 
 be used and are used as means of disci- 
 pline to enforce the payment of fine* 
 and to prevent withdrawals. Such a 
 
In a Democracy 53 
 
 loss of rights acquired by payments 
 made through many years is not allowed 
 in the life-insurance business or in any 
 well-conducted benefit society. More-^ 
 over, funds held by unions, which ought 
 to be appropriated to securing the pay- 
 ment of benefits to which their members 
 have acquired a right are often sacrificed 
 in the emergencies of a long strike — that 
 is, they are used for war purposes at the 
 discretion of the officers of the union. 
 Under such circumstances the union will 
 spend any money within its reach for 
 what it calls defence. 
 
 The motives of trades tmions during 
 the first two-thirds of the nineteenth 
 century might in general have been 
 accurately described as humanitarian; 
 but of late, since high wages and short 
 hours of labor have been secured, the 
 
 9 
 
 ^ 
 
cv 
 
 54 Future of Trades Unionism 
 
 motive most frequently in evidence has 
 been the desire for higher pay. The 
 democracy is not deceived on this point. 
 I It sees clearly that the common object 
 of a imion in striking is now to secure 
 higher pay by the hour or day, or higher 
 pay for work done in overtime, any vig- 
 orous man or woman being perfectly 
 competent to work overtime. The sym- 
 pathy of the democratic masses with the 
 unions has therefore diminished in recent 
 years, because a selfish pecuniary motive 
 is not so attractive to the democracy as a 
 humanitarian motive. The democracy 
 also perceives that the working of some 
 of the union rules is not htmiane, but 
 harsh or even cruel. Thus, the pre- 
 scription of a uniform wage is cruel to the 
 inferior workman who is not worth that 
 Vo. wage. He cannot satisfy his employer 
 
 /.^ ^ 
 
 
In a Democracy 55 
 
 at that rate, and though he may get spas- 
 modic employment when his industry 
 is in a prosperous state he finds himself 
 out of work whenever a downward turn 
 in that industry occurs. In short, the 
 uniform wage is cruel to the journeyman 
 who is not worth it, and to the old man 
 
 ijjiJ^ 
 
 whose capacity is diminishing. The IffiP] 
 form wage is also the means of keeping! ^ /y^i 
 women out of many employments which ; /^ 
 the unions think should be reserved for ■^' 
 men. The unions will consent to the 
 employment of women only on the con- 
 dition that women receive as much pay / 
 as men. Now many a time women are A 
 really not worth as much as men; there- ^ 
 fore they are not employed at all. 
 
 The belief on the part of the leaders 
 of trades unionism that the length of 
 the day's work should be universally 
 
;K 
 
 56 Future of Trades Unionism 
 
 the same has led them to advocate 
 uniform legislation applicable to a great 
 variety of trades as to the number of 
 hours which should constitute a day's 
 work. The fact is, however, that dif- 
 ferent trades are very unlike as regards 
 the intensity of attention demanded 
 from the workmen and the amount of 
 muscular exertion required of them; so 
 that it is not reasonable that the same 
 number of hours should constitute a 
 day's work in such different employ- 
 ments. The amount of variety occur- 
 ring in a day's work should always affect 
 the length of the day's work. In the 
 carpenter's trade, for example, or the 
 plumber's, or the motorman's, there is 
 change from hour to hour, or even from 
 moment to moment in the things to be 
 done, whereas piece work in a shoe 
 
i. 
 
 In a Democracy 57 
 
 factory or a machine shop may be extra- 
 ordinarily monotonous and incessant in 
 its quality. Thus, farm labor, house 
 work, teaming, mining, quarrying, and 
 many building trades present great 
 variety, whereas tending machines is 
 usually monotonous. Some industries 
 require absolutely continuous operation 
 through the twenty-four hours and day 
 after day, as, for instance, pig-iron fur- 
 naces, lime-burning, and carrying vessels 
 across seas. Others can be profitably 
 conducted eight, nine, or ten hours out 
 of the twenty-four. The workmen in 
 some trades have no intervals of com- 
 parative repose; in others the day*s work 
 is broken by many such intervals. Many 
 industries are much affected by the 
 season of the year, so that they must be 
 very active part of the year, with a long 
 
 
58 Future of Trades Unionism 
 
 day's work, and comparatively quiescent 
 at another season, with a short day's 
 work. These diversities make it very 
 unwise to prescribe the same num.ber of 
 hours for a day's work in all industries. 
 ' The reasonable amount of labor for a 
 man or a woman cannot be put in all 
 industries into the same nimiber of 
 hours per day; so that uniformity in 
 that respect is not a rational or expedient 
 aim. 
 
 Trades unionism formerly endeavored 
 to prevent the substitution of machinery 
 for hand labor, and to restrict, so far as 
 possible, the use of machinery in all 
 unionized trades. This policy has, how- 
 ever, undergone many favorable modifi- 
 cations, although a belief in it lingers 
 and occasionally finds forcible expression. 
 The introduction of the linotype and 
 
In a Democracy 59 
 
 monotype into the printing trade was 
 resisted in many ways, direct and indi- 
 rect, and some of these resistances still 
 linger. An employing printer whose shop 
 was unionized could hardly use a small 
 number of these tj^esetting machines, 
 because the imions prescribed that the 
 operator of one of these machines should 
 never himself repair or put in order his 
 machine temporarily disordered. The 
 operator whose machine gave out must 
 lie back and call for the machinist, 
 although he knew perfectly what was 
 the matter with his machine, and could 
 himself rectify it. The employer, there- 
 fore, must have use for machines enough 
 to warrant the steady employment of 
 a competent machinist. This was an 
 ingenious application for restrictive pur- 
 poses of the principle that one trade 
 
6o Future of Trades Unionism 
 
 must not interfere with the province of 
 another. 
 
 The unionist demand for the exclusion 
 of independent workmen from shops in 
 which union men are employed has been 
 enforced successfully in many American 
 industries in which the ''closed shop'' 
 has come to prevail; but in recent years 
 many large employers are making head 
 against this monopolistic practice on 
 the part of unions. The closed shop is 
 supported by two results of experience; 
 the first is the admitted fact that in 
 many trades it is impossible to employ 
 in the same room two sets or sorts of 
 men who are not on good terms. It is 
 easy to spoil maliciously the work of a 
 man whom one wishes to disturb or 
 
 annoy. Benjamin Franklin in his Auto- 
 biography points out that in the printer's 
 
In a Democracy , 6i 
 
 business it is impracticable for a journey- 
 man to resist the demands of a majority 
 of his fellow journeymen. He refused 
 to treat to beer when he first got employ- 
 ment in a compositors' room in London, 
 but found his position so uncomfortable, 
 or rather so impossible, that he procured 
 his transfer into a press room, and there 
 treated his fellow pressmen to beer in 
 accordance with custom, although he 
 took none himself. In working under- 
 ground it is essential that the men who 
 work in the same crew should feel no 
 habitual hostility one toward another. 
 Another support of the closed shop is 
 the preference of some employers for 
 securing through a union the delivery of 
 a certain number of laborers for an 
 agreed-upon period and at a specified 
 price. There are some industries in 
 
62 Future of Trades Unionism 
 
 which this kind of contract has great 
 conveniences, because it promotes 
 promptness and certainty in delivering 
 their product, and enables the employer 
 to reduce to a minimimi the pecuniary 
 risks of contracting to make articles 
 which cannot be delivered for some 
 months after the signing of the contract. 
 Such employers prefer to deal not with 
 individual workmen, but with the head 
 of an international union, or with a 
 padrone or other labor contractor. The 
 ''open shop" is supposed to be a shop in 
 which tmion men or non-union men are 
 hired indifferently; but the so-called open 
 shops are, as a matter of fact, often 
 entirely filled with union men, the em- 
 ployers proclaiming a good general prin- 
 ciple under the phrase ''open shop,'* but 
 taking no pains to carry that principle I 
 
In a Democracy 63 
 
 into practice. On the part of the more 
 venturesome employers and associations 
 
 of employers the resistance to the closed 
 shop sometimes takes the form of main- 
 taining shops open only to non-union 
 men. Other manufacturers successfully 
 maintain separate factories or establish- 
 ments for union men on the one hand, 
 and for non-union men on the other; 
 so that they can give employment to both 
 classes of workmen — ^but keep them sep- 
 arate — and observe year by year which 
 sort of labor produces the best results. 
 It is unnecessary to say that the closed \^ j^ IJ^ 
 shop is far from being a democratic inven- o ^v 
 tion. It is a means of promoting the 
 
 interests of a certain group or class 
 against the interests of the mass. \ 
 
 A characteristic policy of trades union- v ^ 
 ism has been to prevent competition in 
 
64 Future of Trades Unionism 
 
 the trades it controls. This is, of course, 
 a part of its monopolistic policy. This 
 /.policy has been supported in the educa- 
 '^' tional and philanthropic world by much 
 denimciation of competition in general. 
 Many people, indeed, have talked about 
 competition as an evil which ought 
 everywhere to be resisted and prevented. 
 Respectable business men have thought 
 it right to defeat the attempts of govern- 
 ments, corporations, partnerships, and 
 individual owners to get competitive 
 bids on work to be done by contract. It 
 has been asserted that competition was 
 cruel and also likelv to put into action 
 men*s most selfish and hateful passions. 
 .y \ Now the fact about competition is that 
 j>- ^J^ it is a prime means of improvement, not 
 y^ - V^ ^ only in industries but in the develop- 
 ment of personal character. Competi- 
 
 ^^ 
 
In a Democracy 
 
 65 
 
 tion is the great revealer to the individual 
 of his own power and capacity. To 
 know himself is impossible without active 
 competition with other people. A nation 
 protected from competition will soon 
 prove itself tmprogressive, sure to decline 
 when its progress comes to depend, not 
 on undeveloped natural resources, but 
 on the trained skill and capacity of the 
 population. In family, school, and col- 
 lege, generous rivalry and emulation are 
 wholesome and animating forces. So 
 they are in the national industries. To 
 defeat competition in any way is there- 
 fore to inflect a serious injury on society 
 at large. 
 
 In looking forward to the future of 
 trades tmionism in a democracy it is 
 interesting to imagine the permanent 
 functions in a wisely conducted union. 
 
 :>rt 
 
 b 
 
66 Future of Trades Unionism 
 
 The unions are sure to continue to exist; 
 for the desire among men of the same 
 caUing to form sympathetic associations 
 to promote their common interests seems 
 to have become well-nigh universal. 
 What policies will remain when the 
 unwise policies have been done away 
 with by intimate contact with free 
 institutions, and by growing experience 
 .^^r^ of the precious results of industrial and 
 K riocial liberty? (i) Wherever a senti- 
 ' ment of mutual confidence exists between 
 employees and employer the discipline 
 /{J" of a factory or shop can safely be en- 
 
 trusted to an association of the employees 
 as regards complaints, fines, promotions, 
 and even dismissals. It is reasonable 
 that the working regulations in a factory, 
 mine, railroad, or shop, should commend 
 themselves as just and necessary to the 
 
 / 
 
In a Democracy 67 
 
 employees who are required to submit to 
 them. (2) The unions will in many 
 industries exercise the right of collective 
 discussion and bargaining concerning 
 wages, hours of labor, shop rules, and pro- 
 visions for the health and comfort of the 
 work people. All these matters are fair 
 subjects for discussion between owners 
 or managers and workmen, provided that 
 the discussions regard always not only 
 the improvement of the workmen's con- 
 dition, but also the improvement of the 
 product of the works in quality or quan- 
 tity, and the maintenance of a stable 
 and profitable business. (3) Unions 
 could perform a valuable function toward 
 society as a whole by urging and pro- 
 curing the utmost publicity concerning 
 industrial conditions and results, through 
 the publication of annual reports to gov- 
 
68 Future of Trades Unionism 
 
 emment on that subject. In all the 
 industries which employ great ntmibers 
 of people, particularly if they deal with 
 the necessaries of life, the public at large 
 has a right to complete information about 
 both processes and results. (4) The 
 tmions might make it their prime busi- 
 ness to secure training for their trades at 
 public expense, to develop the skill of 
 their members, and to classify them 
 according to experience and skill, pro- 
 moting in every way the adoption of a 
 wage rising with age and merit. (5) 
 The unions might be active in promoting 
 cooperative good-will from bottom to top 
 of the factory, mill, or works in which 
 each union is interested, inculcating earn- 
 estness and alertness in work, a steady 
 profit for capital and management, and 
 a prevailing spirit of liberty, generous 
 
In a Democracy 69 
 
 rivalry, and justice. With such func- 
 tions the union might be fairiy expected 
 to contribute greatly not only to the 
 happy development each of its own trade, 
 but to the contentment and productive- 
 ness of industrial society as a whole. 
 They will in time cease to resist in- 
 corporation, to act secretly, to break 
 contracts, to seek monopoly, to restrict 
 output, and to oppose industrial educa- 
 tion. They will trust to discussion and \ 
 publicity, and have no occasion for fight- i 
 ing of any sort. Far from trying to 
 arrest or destroy industries, one of their 
 strongest interests will be to keep all the 
 national industries moderately profitable, 
 and therefore continuous and free from 
 serious fluctuations. 
 
PART II 
 
 THE FUTURE OF CAPITALISM IN A 
 DEMOCRACY 
 
 THE public liberty which procured 
 for workmen the right of combina- 
 tion or association secured to 
 capitalists the same right. Now capital 
 is more mobile than labor and more 
 readily concentrated in the hands of a 
 few leaders. Hence, associations of capi- 
 talists in corporations, trusts, and syndi- 
 cates have more fighting force than 
 unions in a serious contest, and are more 
 formidable in democratic society. The 
 unions, though secret, are after all 
 
 governed by a majority vote, and by 
 70 
 
Future of Capitalism 71 
 
 officers elected for short terms ; the capi- 
 talistic organizations tend strongly to oli- 
 garchic methods and practices. The 
 individual capitalist, however, or the 
 single manager of an agglomeration of 
 capital, is apt to value his individual 
 liberty of action much more highly than 
 the single workman values his measure 
 of liberty, and accordingly effective / 
 capitalistic associations came into ex- Y 
 istence much later than effective trades 
 unions. Indeed, as has already been 
 pointed out, capital was compelled to 
 organize in extensive combinations by 
 the comprehensiveness and strength | 
 of the labor unions. When once or- \ 
 ganized, however, the capitalistic asso- 
 ciations develop greater fighting power 
 than the trades unions. They can better 
 endure a stopping of income; they can 
 
72 Future of Capitalism 
 
 avail themselves of new inventions or 
 discoveries; and they can enlist the pro- 
 tective forces of society against the 
 violations of public peace and security 
 which seem to be the inevitable accom- 
 paniments of industrial warfare on any 
 considerable scale. In short, in carrying 
 on industrial war, corporations, trusts, 
 i syndicates, and other capitalistic asso- 
 ciations have decided advantages over 
 'labor trusts or combinations. The pos- 
 session of these advantages on the part 
 of capitalists, however, tends to make 
 the general public sympathize with the 
 weaker party in the industrial strife, and 
 this sympathy is often a determining 
 consideration in the ultimate settlement 
 of a specific conflict. To be sure, the 
 sympathy of the public may be mis- 
 directed, but that misdirection may not 
 
In a Democracy 73 
 
 prevent it from being effective, par- 
 tictilarly in short though grave contests. 
 It is, therefore, for the interest of capital- 
 istic combinations to consider how they 
 can win and keep the confidence of a 
 democratic community. Let us then 
 consider first what the democracy de- 
 mands, and is likely to demand, of capi- 
 talists, singly or in combination. 
 
 The first thing the democracy expects 
 of its capitalists is sympathy with demo- 
 cratic ideals, and the consequent aban- 
 donment of autocratic and feudal-system 
 ideals. It also expects of capital a ra- 
 tional altruism, or at least an enlightened 
 egotism. To the questions of the selfish 
 or narrow-minded financier, manufac- 
 turer, or merchant — '*May I not man- 
 age my own business as I please; may I 
 not do what I will with mine own?" 
 
y 74 Future of Capitalism 
 
 f J^democracy answers — '*No/' Democracy 
 maintains, on the contrary, that whoever 
 JT^ conducts a large business which requires 
 many workmen has a direct responsibility 
 to society as a whole for the himiane con- 
 duct of his business. He becomes respon- 
 sible for the health and cheerfulness of 
 thousands of persons. Democracy means 
 to magnify and enforce this responsibility 
 of the capitalist. It will not trust the 
 welfare of thousands of families merely 
 to the capitalist's possible acceptance of 
 the opinion that humanity is true econ- 
 omy, and that healthy and cheerful 
 laborers are the only efficient and eco- 
 nomical ones. There is a mass of modem 
 legislation in all the freer countries which 
 bears witness to the democratic intention 
 to enforce on employers himiane conditions 
 of employment. AH the legislation relat- 
 
In a Democracy 75 
 
 ing to the niimber of hours in a day's 
 work, holding an employer or owner liable 
 for the accidents which happen to people 
 in his employ, prescribing the cubical 
 space to be allotted to each workman in 
 the shop or factory, prohibiting the use 
 as shops of cellars and rooms without 
 windows, insisting on the provision of 
 fire-escapes and similar precautions, and 
 limiting the work of women and children, 
 bears witness to the strong democratic 
 purpose in this regard. 
 
 The supremacy of the collective right 
 over the rights of the individual owner or 
 proprietor is recognized in a great variety 
 of modem legislation, which interferes 
 with the liberty of the individual in the 
 interest of the mass. Democratic legis- 
 lation insists that dirty foods shall not 
 be manufactured, or, if manufactured^ 
 
76 Future of Capitalism 
 
 shall not be sold; that impure drugs shall 
 be neither made nor sold; that the sale 
 of patent medicines shall be in some cases 
 prohibited, in others regulated, and in still 
 others permitted only with a label which 
 gives the composition of the medicine. 
 Nowadays an individual owner cannot 
 even build his own house in a city or 
 suburb just as he chooses. He must 
 conform to the local building laws. In 
 certain parts of a city, for example, there 
 must be no wooden structtu'es. In the 
 wooden structures permitted in suburbs, 
 precautions specified by statute must be 
 taken against the communication of fire. 
 All wiring and plvimbing in new buildings * 
 must be made satisfactory to public- 
 inspectors. Democracy limits closely the- 
 freedom of the individual capitalist in- 
 building his house, his shop, or his 
 
In a Democracy 77 
 
 factory; and the capitalist has already 
 accepted many such limitations on his 
 individual liberty. It is altogether likely 
 that in the future democracy will go 
 much farther in these respects, in order 
 to protect the interests of the mass of the 
 people against the adverse interest of the 
 individual producer or manufacturer. 
 The milk industry well illustrates .the 
 tendency of democratic society in these 
 respects; for it is more and more con- 
 trolled, supervised, and regulated, and 
 with good results on the public well-being. 
 Capital, as represented by the farmer and 
 the middle-man, accepts this public con- 
 trol. Democratic legislation is always 
 finding new ways of protecting the wel- 
 fare of the mass of the people against 
 injuries proceeding from individual capi- 
 talists or from capitalistic associations 
 
78 Future of Capitalism 
 
 which carry on productive businesses 
 capable of doing injury by their products 
 or by-products to the population as a 
 whole, or to some large portion of the 
 population. Thus, the fouling of streams 
 and ponds by sewerage or by the rejected 
 materials of factories has been effectively 
 controlled in many States of the Union 
 by legislation which strongly commended 
 itself to the democracy ; and the offenders 
 themselves no longer claim that they 
 have a right to do such mischiefs. In 
 short, iiidividual capitalists and capital- 
 istic associations recognize the fact that 
 in democratic society they must take 
 account of the influence of their acts on. 
 oj^hers. 
 
 -pother democratic ideal which demo- 
 cratic society may confidently be expected 
 to enforce in the long nm on both capital 
 
In a Democracy 79 
 
 and labor is r esistance to monopoly. 
 Democracy is demanding of capital in 
 plainer and plainer terms, first, that it 
 shoiild not seek a monopoly of its own, 
 either by open force or by indirect means, 
 and secondly, that it should resist the 
 monopolies of the different . kinds of 
 labor which trades unionism aims at 
 creating; because every labor monopoly 
 abridges seriously the just liberty of the 
 individual workman. More and more 
 in this country capital recognizes the 
 justice of this demand made by de- 
 mocracy. In the case of inevitable mon- 
 opolies, like the right of way on public 
 highways, or a complicated telephone 
 exchange, or a useful combination of 
 widespread telegraph and telephone lines, 
 or a widely distributed hydro-electric 
 power generated by a single waterfall. 
 
8o Future of Capitalism 
 
 democracy intends that the management 
 of that inevitable monopoly shall be 
 regulated by the democratic government 
 in the interest of the whole commimity, 
 or of the constimers of the monopolistic 
 product; and more and more capital 
 itself recognizes the justice of this demo- 
 cratic demand in all the freer cotmtries. 
 Thirty or even twenty years ago it was 
 not imcommon for a city or a state to 
 grant to a corporation a perpetual fran- 
 chise in the streets of a city or the high- 
 ways of a town; and it was urged in 
 defence of such gifts made in perpetuity 
 that capital could not be induced to pro- 
 vide desirable transportation facilities, 
 or the gas or electric plants needed by 
 urban communities for the best forms of 
 lighting, or the facilities for convenient 
 communication by telephone unless the 
 
In a Democracy 8i 
 
 corporation or company providing such 
 facilities received a franchise in per- 
 pettiity. The collective interest of the 
 democratic community has now so com- 
 pletely asserted itself with- regard to the 
 occupation of the streets and highways 
 by monopolistic corporations that capital 
 no longer expects to be given perpetual 
 franchises. It has been found possible 
 to raise the money needed for such enter- 
 prises on charters limited to a definite 
 period, like twenty, thirty, or forty years. 
 The democratic doctrine that neither 
 capital nor labor should seek monopolies 
 involves, the maintenance of competition; 
 but the democracy , while recognizing 
 that competition is indispensable to pro- 
 gress in education, in industries, and in 
 commerce, d oes not believe in competi- 
 tion without limit. It distrusts the com- 
 
82 Future of Capitalism 
 
 petition which is pressed to the abandon- 
 ment of profit. It perceives that the 
 competition which is essential to freedom 
 and progress may be maintained without 
 hostility to competitors or destructive- 
 ness. As the President of the United 
 States Steel Corporation expressed it at 
 a dinner given by an association of coop- 
 erating and competing companies or 
 establishments in the iron and steel indus- 
 tries: '*You believe in competition, but 
 not hostility; in rivalry, but not antag- 
 ^ onism; in progress and success for all, 
 \ but not in the punishment or destruction 
 Q(y of any." This recognition by capital of 
 W ViSt^' *^^ true" democratic doctrine of competi- 
 L ^^^V^jJj^tio^ over against monopoly is a striking 
 r^^ manifestation of the effects of democracy 
 ^ on capitalism. 
 
 One of the most intelligent and far- 
 
 f£> 
 
 K 
 
In a Democracy 83 
 
 reaching of democratic ideals is the ideal 
 of an improving lot throughout life for 
 every faithful workman and good citizen, 
 a lot improving as regards earnings, com- 
 fort, and the consideration in which he is 
 held by his fellows. Democratic society, 
 valuing this ideal, insists and will insist 
 that capital shall promote it, and advance 
 toward it in all its dealings with labor. 
 To carry out this ideal of the democracy 
 will require much good planning and 
 invention on the part of capital, par- 
 ticularly in the highly organized indus- 
 tries which use machinery and mechan- 
 ical power. The workman who hopes 
 to improve his lot throughout life must ^^ 
 
 see before him the prospect of a rising h^ ^ f^*^ 
 wage. He must not receive at twenty- . y'v<-*^ 
 one as large a wage as he can earn bX>^^j%a^ ^^ 
 forty or fifty. He must see clearly from f^>^^^^^ 
 
i*^!^ ^^^y84 Future of Capitalism 
 
 y the beginning that he can improve his 
 
 Q r earnings and his condition by being intel- 
 
 K ligent, zealous, and inventive at his work. 
 
 <^ He must see that every improvement in 
 i his own personal skill or capacity is 
 i "^ ' ^ likely to improve his earnings and the 
 ^ */ respect in which he is held by his employer 
 and his comrades. He must feel sure 
 y^ that all the conditions of his productive 
 
 labor favor an upright life on his own 
 part and the attainment of happy family 
 life. He must have good grounds for 
 believing that, with good health and no 
 more than the common exemption from 
 calamity, he can himself command an 
 improving lot and an honorable career 
 imder the established rules and condi- 
 tions of the industry to which he has 
 chosen to devote himself. 
 
 Under the existing conditions of the 
 
In a Democracy 85 
 
 great industries, and particularly of the 
 mechanical industries, capital must make 
 possible the realization of this demo- 
 cratic ideal, if democracy and capital are 
 to be thoroughly reconciled. It is capital 
 that nowadays must provide systemati- 
 cally a rising wage for the individual 
 workman, carry on a continuous sorting 
 of employees with advancement for the 
 profitable employee, make provision for 
 prolonging the full earning capacity of 
 the individual workman, and for keeping 
 at work in appropriate ways employees 
 whose productiveness is declining through 
 age or infirmity. To do this requires, 
 first, an invention of methods capable of 
 yielding these results, and, secondly, a 
 constant supervision intelligent enough 
 and humane enough to win these results 
 on an immense scale and yet through just 
 
86 Future of Capitalism 
 
 rl dealing with individual workmen. This 
 ^ ' sort of action is within the competency 
 j/^ \ of capitalistic organizations, independ- 
 y t ^^^ ently of government, or trades unions, 
 or any other social power capable of 
 exerting a pressure on large-scale em- 
 ^ ployers. In the future, capital, jwhen 
 ^ — under intelligent direction, is likely to 
 share the democratic interest in the wel- 
 fare of the mass of the population, and 
 therefore is likely to devote more and 
 more attention to the realization of the 
 democratic ideal of an improving lot. 
 
 One element in an improving lot is a 
 sure provision, gradually made, against 
 premature disability and the probable 
 infirmities of age, a provision which 
 begins to be made in early life, and is 
 sectu^ed by long and faithful service. 
 Some parts of the public service and 
 
In a Democracy 87 
 
 many semi-public and private corpora- U).^ (^ 
 tions are already providing such ^^^^^^^^^^^i 
 of protection against calamity and infirm-p"^ 
 ity through pension or annuity systems; 
 and such provisions will soon be regular 
 parts of the conscientious employer's 
 function, whether the employer be gov- 
 ernment, corporation, or partnership. 
 The methods of making this systematic 
 contribution from capital to the welfare 
 of the employee have already been worked 
 out in Europe. They, of course, present 
 a considerable degree of variety, because 
 of the different conditions of the indus- 
 tries in which they are applied; but the 
 best and most generally applied method 
 seems to be the provision of an annuity 
 after a specified number of years of ser- 
 vice, an annuity purchased with money 
 withdrawn during a long period of years 
 
88 Future of Capitalism 
 
 from the wages of the employee, increased 
 by a direct contribution each year, or by 
 contributions at stated periods, from 
 the employer, and kept at compound 
 interest in individual accounts. This 
 method cultivates in the employee the 
 habit of saving a portion of his income, 
 gives him a comfortable sense of security 
 for the future, and increases his desire to 
 earn a rising wage. It also makes it his 
 interest to remain long in the service of 
 
 . the same employer, and to contribute in 
 i^ every way in his power to make the busi- 
 ness of that employer stable and profit- 
 ^ ^ able. The contributions of the employer 
 ^r to the fund which buys the annuity are 
 
 an essential part of this system. With- 
 out them the annuity purchasable at the 
 end of a long term of service would be 
 too small. Moreover, the contribution 
 
In a Democracy 89 
 
 of the employer is just, because he will 
 
 gain much from the satisfactory work- ^^^ \/j 
 
 ing of such an annuity system. In l'''^ m^,"^ 
 
 f^^ 
 
 c^^ 
 
 the upper grades of a service which is ^^^A yt, 
 not subject to ordinary business risks, *" 
 
 and which maintains long probationary ^t^^ 
 periods before admitting to its permanent 
 places, the direct pension system is to be 
 preferred to an annuity system; but 
 in industrial employments the annuity 
 method with contributions from both 
 employer and employed is more generally 
 and securely applicable, and has decided 
 
 advantages in regard to the development 
 
 ft 
 of sound independent character in work- 
 ing men and women by the thousand 
 and the hundred thousand. This is a 
 field for the best kind of democratic 
 cooperation between capital and labor. 
 Another ideal of modem democracy 
 
i 90 Future of Capitalism 
 
 S^ ,is imivers^L... education,, education for 
 
 
 every child, and education all through 
 life, and not during the school age, or 
 the school and college age alone. The 
 national industries and politics give far 
 the greater part of the education which 
 ordinary citizens receive. It is of little 
 avail to bring up children well through 
 good schools if they are to be stupefied 
 by monotonous and unimproving labor 
 as soon as they enter upon the industries 
 in which they are to earn their liveli- 
 hood, and demoralized by low politics 
 as soon as they can vote. Hence the 
 grave responsibility of capital for the 
 education of the masses in a free country. 
 The managers of great industrial estab- 
 lishments can be quite as directly and 
 strongly teachers of the people as the 
 schoolmasters and college professors. 
 
 I 
 
In a Democracy 91 
 
 The responsibility of rich men and cor- 
 porations for the ethical training of their 
 employees grows heavier and heavier 
 with every new generation that comes 
 forward into the factory system. Well- 
 managed factories, railroads, mines, and 
 shops are capable of providing admi- 
 rable training in obedience, neatness, 
 temperance, courtesy, fidelity, and hon- 
 esty. In all urban communities this 
 ethical training through the industries 
 of the people should succeed the train- 
 ing in the public schools. Capital, 
 helped by skill in industrial manage- 
 ment, now supplies a great part of 
 this training for the mass of the urban 
 population; and in the future under -^ 
 democratic government capital will do W^ "^"^'^y 
 more and more of this admirable work, ^ ^^ ^ 
 and will do it better and better. The ^:p4,' U^>^^ 
 
92 Future of Capitalism 
 
 possibilities for educational improvement 
 in the mechanical industries are very- 
 great. The extreme division of labor 
 and the prevailing use of mechanical 
 power have reduced the educational 
 effect of the single workman's job by 
 making his actual performance mon- 
 otonous and in a high degree repetitive. 
 Capital aided by skilful management 
 must contend against this evil for the 
 individual, which has accompanied an 
 increase of productive power highly pro- 
 fitable to the community as a whole. 
 To invent the means of giving varied and 
 progressive work to the individual work- 
 man, while utilizing machinery to the 
 highest degree possible and developing 
 cooperative simultaneousness in pro- 
 ducing each of the many parts of one 
 complex whole, is the important task of 
 
UNIVERSiTY ) 
 
 ^ OF ^ 
 
 \^^ur^v^;^>>In a Democracy 93 
 
 the manager of corporate capital in the 
 future under a democracy. In this way 
 capital can become a democratic agency 
 for making the great body of the people 
 employed in the national industries more 
 intelligent, and righteous, and happier. 
 
 The democracy of the future is likely 1 
 to force on great agglomerations of ' 
 capital a complete publicity as to their 
 doings and their results; and through this 
 publicity capital may expect to obtain 
 a degree of security against suspicion , 
 and injustice which it has never yet j 
 enjoyed. The argument in favor of 
 publicity for the receipts, expenditures, 
 profits, dividends, and maintenance and 
 depreciation charges for corporations to 
 which public law gives the immense 
 advantage of limited liability, is irre- 
 sistible. Already the justice of this 
 
94 Future of Capitalism 
 
 publicity is well recognized with regard 
 to fiduciary companies and public fran- 
 chise companies, including all those whose 
 principal function is the transportation 
 of persons and goods. The principle is 
 not so well recognized or so extensively 
 acted on with regard to manufacturing 
 companies; but within the near future 
 this principle will probably be extended 
 to corporations of every nature which 
 employ large bodies of men, and which 
 are imder the frequent necessity of pro- 
 curing new capital in large amoimts from 
 the public. In a democratic society it is 
 emphatically the interest of the corpora- 
 tions themselves to make all their doings 
 public, for the reason that by so doing 
 they will avoid distrust, secure con- 
 fidence, and make plain their educational 
 function, and their indispensableness as 
 
In a Democracy 95 
 
 ptirveyors of opportunities for steady 
 productive labor for a large portion of 
 the population. The industrial warfare 
 that has been going on for more than 
 three generations of men has obscured the 
 right relation between capital and labor, 
 when it has not actually established 
 wrong or contentious relations between 
 the two indispensable partners in pro- 
 duction; and much of this very injurious 
 obscuring of the good and developing of 
 evil has been due to the secrecy with 
 which capital has endeavored to envelop 
 its operations. Democratic society ought 
 to be enabled to witness all the admir- 
 able effects of massed capital intelligently 1 ( 
 managed. Under such circimistances the\ 
 democracy will not be jealous of or averse 
 to reasonable profits for capital. A large 
 proportion of the democratic mass become 
 
96 Future of Capitalism 
 
 themselves capitalists — that is, they own 
 their houses, or their farms, or a deposit 
 in a savings bank, or some shares in a 
 railroad or an industrial corporation. 
 This wide distribution of property is the 
 sure defence of the American people 
 against Socialism. 
 
 It is a mistake to suppose that the 
 democracy dislikes rich men, provided it 
 believes their riches have been honestly 
 and fairly acquired. The democracy is 
 beginning to see, and will soon fully 
 understand, that inequality, not equality, 
 of possessions is the inevitable result of 
 freedom. Democracy will not interfere 
 in the future with the pursuits of the rich 
 man. It will approve of appropriate 
 splendors in the private life of rich people, 
 such as galleries, libraries, yachts, equi- 
 pages, and great houses and estates. 
 
In a Democracy 97 
 
 Indeed, the actual democracy of to-day 
 positively dislikes a stingy rich man, and 
 approves of the free-handed rich man who 
 spends liberally on his family and his 
 household, provides for himself and his 
 friends refined pleasures, and gives away 
 money for good objects with generosity 
 and a personal interest in the recipients. j 1 ' 
 Capital which buys and sells fairly and \ ^P*"^ 
 publishes all its doings has nothing to [Jjt^ 
 fear from democracy in the future. OA v 
 the contrary, it has much to gain from a 
 thorough publicity in regard to all its 
 proceedings. At present the public is 
 far from comprehending how rapid the 
 destruction of capital is in the great 
 modem industries, how much of the 
 accumulated savings of each generation 
 is destroyed by fire, by wear, by the sub- 
 stitution of improved machinery for 
 7 
 
98 Future of Capitalism 
 
 that actually in use, and by thoughtless 
 waste. Knowledge of these incessant 
 destructions should be brought home to 
 the democracy; so that they may realize 
 what the pressing need of new capital 
 means in all great undertakings, and how 
 much intelligence and energy must con- 
 stantly be brought into play to secure 
 the new capital needed, and to make use 
 of it to the best advantage. 
 
 In another respect capital will derive 
 great advantage from publicity in accord- 
 ance with law. If accompanied by sound 
 public accounting, it will tend to make 
 profits steadier and business therefore 
 more stable. This greater stability or 
 steadiness is a great object for capital as 
 well as for labor. For the 'employees the 
 stability of an industry means steady 
 work, and that steady work is a great 
 
In a Democracy 99 
 
 moral as well as material object. In 
 many industries the mass of the laboring 
 people already perceive that it is their 
 interest that the capital necessarily em- 
 ployed in the industry should receive a 
 steady and adequate return. Nobody 
 likes to work for a person, firm, or cor- 
 poration whose business is fluctuating 
 and insecure. The employer must have 
 a steady income, in order that the em- 
 ployee should feel a comfortable security 
 for his own earnings. In the absence of 
 publicity, employees may suspect their 
 employer of making an tmreasonable or ^cJ^ 
 imfair profit at their expense. Under aj 
 r6gime of publicity there would be no 
 possibility of this distrust or suspicion, 
 and all employees would wish for evidence 
 that their employer was doing a soimd 
 and profitable business. Already some 
 
 i 
 
100 Future of Capitalism 
 
 American industries in which strict 
 accotmting and a moderate degree of 
 publicity have been introduced supply 
 evidence that the employees desire that 
 the capital invested receive a fair return. 
 Thus, railroad employees are inclined 
 to resist imreasonable reduction of pas- 
 senger and freight rates on the railroads 
 where they are employed. They prefer 
 to work for a railroad which earns a profit, 
 and whose stock has a good standing in 
 the market. In short, publicity concern- 
 ing the management of corporations and 
 concerning the use made of other masses 
 of capital is not only essential to the ab- 
 olition of industrial strife, but also to the 
 establishment of right cooperative rela- 
 tions between capital and labor; and from 
 that publicity capital as well as labor 
 would reap large and solid advantages. 
 
In a Democracy loi 
 
 When the capitalist class as a whole is 
 strongly influenced by the desire to pro- 
 mote the real welfare and happiness of the 
 workmen they employ, they will invari- 
 ably take thought for the means of pro- 
 viding their workmen with permanent 
 homes which are not only wholesome, 
 but cheerful, and suitable for the bringing 
 up of a family. This provision means 
 much more than the building of good 
 cottages, although that is an essential 
 feature of it. It covers a careful layout 
 of the manufacturing suburb with good 
 streets well-paved, well-lighted, and pro- 
 vided with serviceable sewers and a 
 trustworthy water supply. It means an 
 adequate ntimber of playgroimds and pub- 
 lic gardens. It means also contributions 
 to schools, churches, and buildings for 
 recreation and social enjoyment. It is 
 
102 Future of Capitalism 
 
 not expedient, however, that the same 
 corporation which owns and carries on 
 the mill, the shop, or the works, should 
 also own the houses occupied by the 
 workmen. Either the workmen should 
 be encouraged and helped to own their 
 houses, or a separate corporation should 
 build the houses and lease them to 
 the workmen. Moreover, houses should 
 never be let to workmen at rents which 
 do not yield a fair return on the capital 
 invested in the houses. If rents are 
 below real value, the owners are either 
 exercising charity towards their tenants, 
 or they are substituting an indirect 
 payment of wages through a reduced 
 rent for payment in cash of the wages 
 earned. Either course of conduct is in 
 the highest degree inexpedient. Self- 
 respecting workmen do not want charity, 
 
In a Democracy 103 
 
 and they greatly prefer the direct pay- 
 ment of their fiill wages to any indirect 
 payment of a part of them. 
 
 Much of the so-called welfare work 
 now done by corporations, partnerships, 
 or persons who carry on large industrial 
 establishments, is partially vitiated by 
 the apprehension on the part of the 
 employees that it has a charitable or 
 patronizing quality rather than a real 
 economic value. As a matter of fact it 
 is emphatically the interest of the em- 
 ployer to contribute in every possible 
 way to the keeping of his establishment 
 wholesome, tidy, and cheerful. It is his 
 interest to do so, because thereby his 
 working force is made more efficient. 
 In democratic society capital and labor 
 should be absolutely of one mind on this 
 subject; but to this end it must be dis- 
 
104 Future of Capitalism 
 
 tinctly understood on both sides that 
 welfare work is not only a matter of 
 good will and humanity, but also an 
 effective mode of promoting efficiency 
 and productiveness. 
 
 Interference with steady work by bad 
 financial management, by insistence on 
 exercising the power of instant dismissal, 
 or by making arbitrary dismissals for no 
 assignable cause, are very serious mis- 
 chievous influences which may proceed 
 from unwise employers. The unneces- 
 sary closing of some works belonging to a 
 syndicate or trust, in order to increase 
 the profits in other works selected to be 
 maintained, is another grave injury to 
 employees, because the apprehension of 
 such closings tends to prevent the em- 
 ployees from acquiring permanent homes 
 and local attachments. It is impossible 
 
In a Democracy 105 
 
 for any factory or shop to build up a 
 trustworthy and permanent set of skilled 
 employees, if there is no certainty that 
 the factory or shop is itself to be perma- 
 nent. In all the higher employments, 
 such as those furnished by well-estab- 
 lished banks, insurance companies, rail- 
 roads, and mills, the employees may 
 reasonably feel that the employer is a 
 durable or permanent one, and this sense 
 of security is a large element in their 
 well-being. 
 
 A frequent cause of contentions be- 
 tween employers and employed is the 
 lack of a proper system throughout the 
 employer's establishment of dealing with 
 complaints and grievances. The prudent 
 and just employer will always be careful 
 to provide his employees with ready 
 access to a disinterested official whenever 
 
io6 Future of Capitalism 
 
 the employee feels that he has been 
 unjustly treated by his immediate su- 
 perior, or by any of his mates; and there 
 should always be an appeal from the 
 decision of the first official, to whom the 
 complaint is brought, to a higher officer. 
 In many well-conducted commercial and 
 industrial establishments it has already 
 been foimd possible to refer complaints 
 and grievances in the first instance to a 
 committee chosen from the employees 
 by the employees. In some instances the 
 final decision on complaints is given by 
 such a committee. This is a democratic 
 method which is desirable in all indus- 
 tries in which the necessary discipline can 
 be maintained in that manner. There 
 are tmquestionably some industries which 
 require such a high degree of cooperation 
 and such a strict discipline that it would 
 
In a Democracy 107 
 
 not be safe to give final power for the 
 
 adjustment of complaints and grievances 
 
 to a committee of the employees, tmless 
 
 that committee contained several grades 
 
 of employees. Recognizing clearly the 
 
 fact that the discipline needed in different 
 
 industries must necessarily have different 
 
 degrees of strictness and inflexibility, 
 
 capital will still find ample room for a 
 
 large increase of considerate dealing 
 
 with complaints and grievances, and 
 
 will find its interest in accepting to the 
 
 utmost possible limit democratic ideas 
 
 on this subject. In particular, it is # 
 
 almost invariably wise to procure the^^^^^ 
 
 assistance of the employees in making ^^^,^,^1,^,,.^ ^ 
 
 shop regulations, because the working 
 
 regulations of an industrial establishment 
 
 may be so conceived — ^indeed they often 
 
 are — as to kill the spirit of cooperation 
 
io8 Future of Capitalism 
 
 and loyalty between employers and em- 
 ployed. The capitalist who really desires 
 to secure content and good feeling 
 throughout his establishment will always 
 consult his employees frankly and freely 
 with regard to shop regulations. Such 
 consultation is as much his interest as 
 theirs. On the other hand, special in- 
 stances of effective loyalty and good 
 will among employees should always be 
 promptly noticed and rewarded, as should 
 also be inventive contributions to the 
 intelligent conduct of the* works or of any 
 department thereof. 
 
 Much has already been said of the 
 educational function of managers of great 
 industries. There is an important part 
 of this educational function which is not 
 always thought of in that way, namely, 
 the protection of the mass of employees 
 
In a Democracy 109 
 
 from temptation to do unfaithful work, 
 or to rob the employer by wasting the 
 time he pays for, or by pilfering from the 
 establishment. It is the bounden duty 
 of all employers to protect the people 
 they employ from all these temptations 
 to wrong-doing. In particular, all em- 
 ployees who of necessity handle money 
 belonging to the employer should be pro- 
 tected against the temptation to take 
 some of it. It is the duty of the em- 
 ployer to provide every possible restraint 
 and check on those dishonestly inclined, 
 and every possible means of demonstrat- 
 ing and maintaining the honesty of the 
 upright. Cash registers and all other 
 contrivances for recording audibly and 
 , visibly cash receipts, time clocks and 
 r watchmen's clocks, and all methods of 
 accounting for the exact number of 
 
no Future of Capitalism 
 
 tickets sold, for pieces of goods issued, or 
 for the daily expenses and sales of travel- 
 ling agents, are means toward the dis- 
 charge of this duty of employers to make 
 stealing and unfaithfulness difficult if 
 not impossible, and to give the faithful 
 man the means of demonstrating his 
 fidelity. For similar reasons it is the 
 duty of employers to provide an adequate 
 amount of supervision of the daily labor 
 of their workmen, and to resist strenu- 
 ously all tendencies towards shiftless, 
 sluggish, uninterested, and therefore in- 
 efficient, labor. This is a duty towards 
 the employees themselves, and not merely 
 towards the proprietors or shareholders 
 whose capital is employed in the busi- 
 ness. All this is only one application of 
 the general democratic doctrine that 
 capital should take thought for the true 
 
In a Democracy m 
 
 welfare of all the men and women it 
 employs, and should therefore promote 
 steadily the honor and fidelity of all its 
 employees. 
 
 It is interesting to note that the true 
 principles of satisfactory employment in 
 the great national productive industries, 
 such as the textile, mining, and metal 
 industries, are those which already obtain 
 in the highest employments, such as the 
 learned and scientific professions, and 
 the professorial function in colleges and 
 universities. In those occupations one 
 finds the _possibility and probability of 
 e stablishing a permanent home and fam- 
 ily life, of obtaining a n increasing income 
 as life advances, of winning a n improving 
 lot, of profitinfy bv one's own intelligenc e, 
 alertness, and fidelity, and of exhibiting 
 l oyalty and good wil l at work, and so 
 
112 Future of Capitalism 
 
 obtaining an increasing consideration 
 among one's fellows and employers. 
 These being the very things which make 
 the higher occupations desirable, they 
 must be the things which would make 
 the lower occupations more desirable. 
 It is only by the combined efforts of capi- 
 tal and labor, working harmoniously to 
 ethical and democratic ends, that this 
 result can be attained. 
 
 In order to be truly serviceable in the 
 best sense to democratic society, capital 
 must not only abandon monopoly seeking 
 and uncontrolled monopolistic manage- 
 ment itself, but must also support de- 
 mocracy in its resistance to monopolies in 
 general. The most dangerous monopo- 
 lies for democratic society are the mon- 
 opolies of all the labor in a great variety 
 of trades, monopolies which have come 
 
In a Democracy 113 
 
 into existence on a formidable scale within 
 recent years. They are doubly formid- 
 able because when successfully organized 
 they not only control prices, but also 
 admission to the trades. It is the duty, 
 therefore, of capital in a democracy to 
 resist steadily the monopolies of labor 
 created by trades unions, and to deprive 
 those monopolies of the means and 
 instnmients through the use of which (U-^^'^^^ 
 they obtain such monopolistic powers. 
 These means or instnmients are the 
 closed shop, the boycott, and the tmion 
 label. It is in the interest of democracy^ ^ tJU^ ^ 
 itself that capital should oppose these 
 monopolistic tendencies of labor; for the 
 strongest and most comprehensive desire 
 of democracy is for the progressive 
 development of freedom for the individ- 
 ual, and of free institutions, and the 
 
 8 
 
 f'^'Sjt^ 
 
1 14 Future of Capitalism 
 
 thoughtful democracy of to-day accepts 
 absolutely Louis Pasteur's definition of 
 freedom — a state in which every one is 
 permitted to develop freely and to apply 
 his utmost powers. 
 
 Modem democracy believes also that 
 every person can and should promote 
 the interests of all while seeking his own, 
 and that all can and should promote the 
 interests of each. Democracy believes 
 in the free pursuit of natural happiness 
 and durable satisfactions; but that free 
 pursuit becomes impossible if the pro- 
 ductive labor of the community is divided 
 into rigid monopolistic groups, whi^h 
 limit admission to the several trades, con- 
 trol prices, and at pleasure order their 
 members to stop working. The mass of 
 the consumers are not in condition . to 
 control effectively the policies and move- 
 
In a Democracy 115 
 
 ments of monopolistic labor organiza- 
 tions, because they are an unorganized 
 mass. Capital through its numerous 
 firm organizations can effectively resist 
 labor monopolies, and should do so in 
 the interest of the constmiers and of the 
 community at large. In order to resist 
 effectively they must appeal to public 
 opinion through the best channels of 
 publicity, and must bring into play the . 
 slow-moving forces of courts and legis- 
 latures. In taking such measures capi- 
 tal should be recognized as the friend j;^^J\r * 
 and servant of democracy — that is, of 
 freedom and the rights of man. 
 i The resistance of capital to labor mon- 
 opolies is already manifested in several 
 different ways. In some industries it is 
 possible to maintain successfully the 
 open shop — that is, shops or works in 
 
ii6 Future of Capitalism 
 
 which union men and non-union men can 
 work succCwSsfuUy side by side. In other 
 industries it is possible for trusts, cor- 
 porations, or partnerships, to maintain 
 unionized factories or works, and also 
 factories or works having the same 
 product in which all the hands are non- 
 imion, each sort being in competition 
 with the other. In other words, the 
 same owner may carry on some unionized 
 shops or factories and some in which all 
 the labor is non-union. This method has 
 the advantage of permitting the owner 
 to find out in the course of years which 
 sort of labor is the most profitable — a 
 question concerning which there are 
 many opinions or guesses, but few facts 
 based on long experience. A third mode 
 in which capital can resist labor mon- 
 opoly is also already in evidence. Be- 
 
In a Democracy 117 
 
 cause of the present wide distribution 
 of mechanical power through electricity, 
 and of the very common use of the tele- 
 graph and telephone, manufacturers are 
 much freer than they used to be to 
 establish their ''plants" outside of cities 
 and in the open country, where the men 
 and women who work in the factories can 
 make permanent homes and have a more 
 wholesome life than is possible for opera- 
 tives in crowded cities. A manufactur- 
 ing poptolation placed in the cotmtry is 
 much more likely to be independent and 
 frugal, and to develop strong local attach- 
 ments, than a population crowded into 
 tenements and city streets. The spread- 
 ing out of a mantifacturing population 
 over large areas under the leadership of 
 capitalistic associations will in time build 
 a strong defence against labor monopolies. 
 
ii8 Future of Capitalism 
 
 y 
 
 
 This doctrine of the duty of capital to 
 resist the monopoHstic features of trades 
 unionism assimies that trades unionism 
 no longer needs to resort to strikes, 
 attacks on non-union men, boycotts, and 
 union labels in order to obtain fair wages, 
 reasonable hours of labor, and the whole- 
 someness of the places where work is 
 done. Publicity will accomplish these 
 and all other reasonable ends which 
 trades imions have proposed for them- 
 selves. In these days the object of the 
 monopolistic policies of trades imions is 
 to get higher and always higher wages, 
 in short, to make more money; but so 
 far as this object is a reasonable one, it 
 can best be obtained through pubHcity 
 and through the development of a truly 
 cooperative spirit between capital and 
 labor. 
 
In a Democracy 119 
 
 That democracy will in the future 
 take all necessary steps to secure as far 
 as possible the welfare of workmen in all 
 the great industries of the country may 
 be safely inferred from what democracy 
 has already done in that direction. It 
 has already imposed wise limits to the iu^^ 
 hours of work of men, women, and,^^}^;^^ 
 children by the day and the week. It ^"^^^^ 
 has passed laws securing adequate ven- 
 tilation in mills and shops, proper sani- 
 tary arrangements, guards for dangerous 
 machinery, and seats for workpeople 
 who can sit at their work. It has made 
 employers responsible for injuries to 
 employees, and has thereby created a 
 new branch of insurance, casualty insur- 
 ance; and the managers of this new 
 insurance business employ numerous in- 
 spectors of boilers, engines, elevators, 
 
I20 Future of Capitalism 
 
 fly-wheels, and machine tools, and dis- 
 triboite information about safety devices 
 and the means of preventing accidents. 
 To be sure, the United States is far 
 behind Germany in regard to workmen's 
 compensation insurance; but this is only 
 due to the comparative slowness of 
 democratic government in adopting novel 
 legislation, even that which is obviously 
 beneficial. Democracy has already given 
 mechanics and other workmen special 
 advantages in collecting the money due 
 them — ^witness the numerous acts relat- 
 ing to mechanicsLljens. Public provision 
 has been made in many States for the 
 inspection of fact ories and small shops, 
 and although this public service is not 
 yet as efficient as it ought to be, it clearly 
 indicates that democratic government 
 can be relied on in the future to exercise 
 
In a Democracy 121 
 
 efficiently this useful supervision. The 
 
 boards of health established by demo- 
 
 T — — — — " — -~* 
 
 cratic legislation in many States prophesy 
 the enlargement in the future of medical 
 supervision of many trades and arts in 
 the interest of the whole body of con- 
 stimers as well as of the workmen em- 
 ployed in those trades. The supervision 
 by public offic ials of bakeries and slaugh- 
 ter-houses, and of the marketing of 
 animals, meats, vegetables, and fniits, 
 warrants a confident expectation that 
 wholesome conditions of productive 
 labor are going to be insisted upon by 
 democratic government. So much in 
 regard to the future may be safely 
 inferred from the experience of recent 
 years. These good ends are to be accom- 
 plished in the future by legislation made 
 effective by public officials. There will be 
 
122 Future of Capitalism 
 
 no causes of dispute of this sort between 
 employers and employed, and neither 
 strikes nor any other forms of violence 
 will be necessary to secure wholesome 
 and equitable conditions of labor. The 
 only weapon needed to secure suitable 
 conditions of labor in either old or new 
 - ^ industries will be publicity, 
 .c/^ \^ The proper proportion of the wages 
 y y^^/^ of labor to the interest on capital will be 
 H ^ in the future the main cause for conten- 
 
 tion between employees and employers. 
 On this subject j%int agreements will 
 doubtless be useful, and arbitration may 
 sometimes be resorted to when a dispute 
 over wages has reached the stage of 
 active warfare; but it is to be hoped 
 that industrial disputes will result in 
 warfare less frequently in the future 
 than in the past, partly because of the 
 
 '^^ 
 
In a Democracy 123 
 
 abandonment by unions of their monopo- 
 listic practices, and partly because of 
 the increased publicity given to the ac- 
 counts and methods of manufacturing 
 establishments. 
 
 The wages boards and industrial courts 
 which have been tried in Australia have 
 not yet proved their usefulness as means 
 of preventing industrial war even in that 
 exceptional commtmity; and they are 
 unpromising, because they presuppose 
 strong unions which have succeeded in 
 enforcing a preference for tmion over 
 non-union men. Australian legislation 
 on old-age pensions is unattractive to 
 people who have confidence in the ftmda- 
 mental good effects of democracy, not 
 only on industrial life but on social and 
 family life. A law which provides for a 
 person sixty-five years of age, who has 
 
124 Future of Capitalism 
 
 been resident in the state for twenty-five 
 years, a pension of $2.50 a week, but 
 undertakes to compel near relatives to 
 contribute to this pension by conducting 
 a public inquiry into the circtmistances 
 of the pensioner, is not attractive to per- 
 sons who believe democratic society likely 
 to be more prosperous and more moral 
 than any other. Modern political phil- 
 osophers hope that democracy will root 
 out the physical and moral causes of 
 inefficiency, poverty, and misery, so that 
 the number of the defective and depend- 
 ent classes shall be largely reduced. It 
 is reasonable to hope that preventive 
 medicine will make even greater pro- 
 gress in the twentieth century than it 
 did in the last quarter of the nine- 
 teenth, and by its efficient service reduce\ 
 the amount of sickness and the number 
 
In a Democracy 125 
 
 of premature deaths which now bring 
 many families temporarily or permanently 
 to destitution. 
 
 The motto of Switzerland — each for 
 all and all for each — expresses concisely 
 the fundamental belief of democracy that 
 every one can and should promote the 
 interests of all while he seeks his own, 
 and that all can and should promote the 
 interests of each. This belief is incon- 
 sistent with the conception that there 
 is real antagonism between the inter- 
 ests of capital and of labor. The 
 last ten years have witnessed much 
 progress toward the abolition of that 
 deplorable conception. It is for the 
 democracy of the future to abolish it 
 altogether. 
 
 The establishment of right relations 
 between capital and labor will not pre- 
 
126 Future of Capitalism 
 
 vent — indeed may promote — the pro- 
 duction in every generation of a small 
 number of rich men, the men who have a 
 natural gift for money-getting and busi- 
 ness administration. What will the de- 
 mocracy ask and expect of these rich men? 
 First, that they share their peculiar 
 pleasures and privileges with the public 
 to the utmost degree possible without 
 destroying their own enjoyments. Sec- 
 ondly, that they use for the public bene- 
 fit a fair proportion of the wealth they 
 owe in part to free institutions and the 
 collective action of the communities to 
 which they have severally belonged. In 
 other words, democratic society will 
 expect that great fortunes, which have 
 been made under the protection of public 
 law out of natural public resources and 
 the needs and habits of the total poptila- 
 
In a Democracy 127 
 
 tion, shall be unselfishly used in part 
 for the promotion of public interests. 
 The democracy will expect its rich men 
 to contribute liberally to hospitals, asy- 
 lums, dispensaries, schools, museums, 
 churches, theatres, music, and the fine 
 arts, and to help secure to public use 
 gardens, groves, shore paths, mountain 
 trails, ponds and streams, parks, and 
 wide prospects. Already in the United 
 States many rich men, sharing the 
 democratic ideals, meet generously these 
 expectations of the democracy. The 
 future will see the extension of these 
 good works of the rich in democratic 
 society. 
 
 The democratic ideals and tendencies 
 concerning capital and labor are not to 
 be realized to-morrow. That realization 
 needs time and patience. The present 
 
128 Future of Capitalism 
 
 duty of patriots is to comprehend them, 
 pursue them, and look forward with 
 confident expectation to their ultimate 
 fulfilment. 
 
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