Chapter XIV. Aggregation Of Industry.
Great combinations.—The tendency toward improvement by combination of laborers through the possibilities of division of labor leads to still larger combinations in so-called factory systems, and even to a combination of factories in large corporations. This tendency has been especially marked since the multiplication of labor-saving machines and more perfect systems of transportation. Indeed, the possibility of extensive machine using, as well as extended division of labor, rests upon a combination of many forces under one general management. Beyond these advantages, saving is found in the necessary care for waste products, which often may be turned into profit, greater freedom of action from closer community of interests, greatly enlarged facilities for marketing, and the best possible devices for handling and transporting products.
All these advantages in great establishments are readily perceived, yet some have doubted whether the gains are so distributed as actually to increase the general welfare. Farmers, perhaps, as readily as any persons, distrust the power of great corporations. Wage earners, generally, in the expression, “corporations have no souls,” express their distrust of results. Yet so far [pg 192] as they actually introduce improvement in production so that variety of products is increased and the cost of production reduced, the whole community gains in large measure the total saving. Any one can realize the advantage by study of a single article of every-day use. In the middle ages the cloth in a garment was worth eight times the wool from which it was made. Now the value is chiefly in the raw product. The price of iron affects every farmer through the cost of his tools and implements or the quality of either. Compare the modern steel hoe, first in quality and then in cost, with the hoe of fifty years since. Then measure that cost in its relation to a day's work, as compared with the same measure in 1850. All are in this way benefited by reducing the exertion needed to procure any one article of use, since more exertion may be left for meeting other wants. If machinery and improved methods have entered less into the farmer's home life, he can find his own advantage from the range of such improvements in other directions by thinking what a pound of butter will buy for him today as compared with what it would buy before the period of machinery. (Chart No. [XIV], p. [106].)
The introduction of labor-saving machines is a direct addition to human power and economy of time, and a means of converting useless material to meet human wants. That a new machine throws out of employment workers in that particular field brings a hardship which ought to be shared by the multitude who are benefited; but the probabilities are great that the improved method of manufacture will so increase the uses for the product as to bring into employment a far larger number of [pg 193] laborers. The spinning jenny threw out of employment several thousand spinners in the old way, but in twenty-five years the cloth-makers in England had increased from less than eight thousand to three hundred and twenty thousand. The machines which in 1760 were thought to have ruined some eight thousand cloth-makers, in 1833 employed two million persons. This is only a striking illustration of what has happened in every direction. It is perfectly evident that communities using the most machinery pay larger wages and far larger welfare to every laborer. It is not too much to say that the actual comforts within the reach of every laborer have been more than doubled within the last hundred years.
A few illustrations of the actual saving in cost of production and distribution may be interesting. Complicated machinery can never be used in producing upon a small scale, just as a small farmer can never afford the use of a harvester. All the benefits of invention applied to machinery have come through its use on a large scale. A factory making a thousand pairs of shoes each year cannot use such machinery as the one making a million pairs will need. Each one of the million pairs, therefore, costs the world less than each one of the thousand pairs. Again the large establishment, like an immense saw mill, being obliged to care for its sawdust, may devise a way of making this waste product of use in pressed blocks for kindling, or possibly in buttons or wood ornaments. The waste of the shoe shop is only a nuisance, but the waste of a great shoe factory is ground and pressed into all sorts of useful forms. All such saving of [pg 194] waste is so much added to the world's store of wealth.
That the large establishment saves unnecessary friction is shown in the order of any great mercantile establishment. It is still more noticeable in immense iron works separated from every other form of industry for the sake of freedom of motion. In these ways, principally, there is a saving of labor in the huge department stores, although the facilities for advertising, advantages for transportation in large bulk and the employment of expert salesmen in every department contribute to the same result. The general expenses of an ordinary store are estimated at nearly 40 per cent of the difference between wholesale and retail prices. The same expenses in the great coöperative store at Paris, the Bon Marché, are only 14 per cent. While the controllers of capital in the large enterprises have the first advantage of such saving, the very necessities of their business compel a sharing with their employés and with the public.
Even the so-called trusts, supposed to be contrivances for controlling the market, have really served in many instances the welfare of the whole community. A biscuit trust, in handling the most of the crackers in the market, saves great expense of advertising, a still greater expense in sales by traveling salesmen, or drummers, and immense waste of stock on hand through condensation into fewer warehouses, reduces its insurance to actual cost, and has brought to the public by means of all these savings a greater variety of crackers of almost uniform quality suited to the fluctuations of demand at a reduced price. No one doubts that even the Standard Oil Company, [pg 195] by means of its savings through consolidation, has at the same time preserved the general supply of oil from waste and brought it to every man's door, with a great improvement in quality, comparative safety in use, and an almost constantly diminishing price.
The record of facts shows that with all the tendency to great aggregations, and so to concentration of power, masses of wage-earners have had their hours of labor shortened, have gained facilities for culture in libraries, lectures and voluntary associations, have gained habits more systematic, and regular methods of life with greater constancy of employment, have better protection of civil rights, better provision for education of children, a larger insurance against accident, and a better provision for hospital care when disabled. The same system has provided methods for economical use of savings in joint stock companies, and cultivated a general unity of purpose and appreciation of others' welfare. Withal it has given to the mothers of families an immense increase of leisure for home-making, and at the same time has opened ranges of employment for women without homes. Even the rate of wages has not been diminished, but rather increased, as is shown also by actual records. That the great establishments cannot pay less than average rates is evident from the multitudes seeking to enter their employment. Moreover, they must pay their workmen regularly or appear bankrupt. Employers on a small scale can easily postpone upon all sorts of pretences, and failures are frequent. Suppose the distribution of milk in New York city were under a single management. A systematic division of territory would at once reduce the [pg 196] number of milk wagons by at least one-half. The certainty of responsibility would insure uniform purity, and means of transportation could be brought to perfection, so that the amount now delivered would actually cost perhaps not more than two-thirds the present price. While at present prices the profit would be large, the necessity for investing those profits would at once call for extension of the trade by reducing the price, and at the same time increasing the proceeds to farmers somewhere who furnish the larger supply. The better quality and larger quantity for the same money would certainly increase the demand, and probably with direct benefit to the milk-raisers. The essential element of distrust of individual management in large enterprises as to fair distribution of the profits stands in the way of such a combination.