The Americans

by Hugo Münsterberg

Capitalists turned against the trades-unions with the greater consternation, because these latter put not only the independent working-man, but also the companies, in a powerless position. They showed that their right to manage their own property was gone, and that the capitalist was no longer the owner of his own factory the instant he was not able to treat with the individual working-man, but forced to subject himself to the representatives of trades-unions. It was easy to show that while he, as undertaker of the business, had to take all the risks and be always energetic and industrious, the working-men were simply showing their greed and laziness by wanting shorter days, and that they would never be really satisfied. It was affirmed that the best workman was an unwilling party to the strike, and that he would more gladly attend to his work than to trades-union politics, and that as a fact he let his trades-union be run by irresponsible good-for-nothings, who played the part of demagogues. Every man who had ever saved a cent and laid it up, ought to be on the side of the capitalist.

But the public took a rather different attitude, and felt that the group of capitalists had been revealed in a bad light by the strike, and when their representatives came to instruct the President of the United States, in a brusque way, on the rights of property, the public began to revise its traditional ideas. The public came to see that such large corporations as were here in question were no longer private enterprises in the ordinary sense of the word; that a steel trust or coal trust cannot be such an independent factor in the commonwealth as a grocery shop in a country town. It was felt that the tremendous growth of the business was the product of national forces, and in part dependent on public franchises; wherefore, the business itself, although privately owned, nevertheless had a semi-public character, so that the public should not be refused the right to interfere in its management. Belief in state socialism, in state ownership of railroads and mines, made great progress in those days; and the conviction made still greater progress that the working-man has a moral right to take an active hand in managing the business in which he works.

And so public opinion has come round to think that violence on the part of working-men, and refusal to treat with trades-unions on the part of employers, are equally to be condemned. The community will hardly again permit capital and labour to fight out their battles in public and make the whole nation suffer. It demands that, now that labour is actually organized in unions, disputes shall be brought up for settlement before delegates from both sides, and that where these cannot come to a solution the matter shall be brought before a neutral court of arbitration which both sides agree to recognize.

Of course these disputes will continue to arise, since the price of manufactured articles is always changing; the employer will always try to lower wages in dull times, and the labourers will try to force wages up during busy times. But it may be expected that the leaders of trades-unions will be able to consider the whole situation intelligently and to guide the masses of working-men carefully through their ambitions and disappointments. Although the employers of labour continue to assert that, so soon as they are handed over to the mercies of the trades-unions, the spirit of enterprise will be entirely throttled and capital will decline to offer itself, because all profit is sacrificed to the selfish tyranny of the working people, nevertheless, experience does not show this to be true. Trades-unions are convinced that, in these days of machinery, too small a part of the profit falls to the labouring man; but they know perfectly well that they themselves can prosper only when the industry as a whole is prosperous, and that it cannot prosper if it is burdened by too high wages. Trades-unions know also that after all they will be able to gain their point in courts of arbitration and elsewhere only so long as they have the sympathy of the public on their side, and that every undue encroachment on the profits of capital and every discouragement of the spirit of enterprise will quickly lose them the sympathy of the American nation. If they really attack American industry, public opinion will go against them. That they know, and therefore the confidence is justified that, after all, their demands will never endanger the true interests of capital. Capitalists know to-day that they will always have trades-unions to deal with, and that it will be best to adapt themselves to the situation. Many thoughtful captains of industry admit that the discipline of trades-unions has had some salutary effect, and that some of their propositions, such as the sliding wage-scale, have helped on industry.

Thus both parties are about to recognize each other with a considerable understanding. They instinctively feel that the same condition has developed itself on both sides; on the one side capital is combined in trusts, and on the other labour has organized into unions. Trusts suppress the competition of capital, trades-unions kill the non-union competitor. The trusts use as weapons high dividends, preferential rates, and monopoly of raw material; the unions use the weapons of old-age insurance, free aid during illness, the union label, strikes, and boycotts. Both sides have strengthened their position by the consolidation of many interests; just as the steel works are allied with large banks, railroads, steamship lines, copper mines, and oil companies, so the leaders of trades-unions take care to spread the disputes of one industry into other industries.

Moreover, both parties fight alike by means of artificially limiting the market; and this is, perhaps, the most dangerous factor of all. While the trusts are continually abandoning factories or temporarily shutting them down in order to curtail production, so the trades-unions restrict the offering of labour. Not every man who wants to learn a trade is admitted to an apprenticeship; the trades-union does not allow young men to come in while old men who have experience are out of work. The regulation of the flow of labour into the trades which require training, and the refusal of union men to work with non-union men, are certainly the most tyrannical features of the situation; but the trades-unions are not embarrassed to find high-sounding arguments for their course, just as the trusts have found for their own similar doings.

Things will continue in this way on both sides, no doubt; and the nation at large can be content, so far at least as, through this concentration and strict discipline on both sides, the outcome of the labour question is considerably simplified. As long as the mass of capitalists is split up and that of working-men chaotically divided, arbitration is difficult, and the results are not binding. But when two well-organized parties oppose each other in a business-like way, with mutual consideration and respect, the conference will be short, business-like, and effective.

The next thing necessary is simply an arrangement which shall be so far as possible automatic for appointing an unprejudiced court of arbitration in any case when the two parties are not able to agree. In this matter public opinion has gone energetically to work. In December, 1901, at the instigation of the National Civic League, a conference of leading representatives of capital and labour was called, and this appointed a standing commission to pass on disputes between employers and labourers. All three parties were represented here—capital by the presidents of the largest trusts, railroads, and banks, trades-unions by the leaders of their various organizations, and the public by such men as Grover Cleveland, Charles Francis Adams, Archbishop Ireland, President Eliot, and others, who enjoy the confidence and esteem of the whole nation.

It has been objected that the millions of unorganized working-men are not represented, but in fact these neutral leading men of the nation are at the same time the representatives of unorganized labour. If these were in any other way to be represented by delegates, they would have to organize in order to choose such delegates. But this is just what unorganized labour does not wish to do. Everything looks as if this permanent commission would have the confidence of the nation and, although created unofficially, would contribute a good deal to prevent the outbreak of real industrial wars. But there can be no doubt that the nation is ready to go further, and that if the two well-organized parties, together with the men in whom both sides put their confidence, are still not able to come to harmonious agreement, nor even to the appointment of a court of arbitration, then the nation will quite likely appoint an official and legally authorized board for compulsory arbitration.

The example of New Zealand is encouraging in this direction, although the experience of a small country may not be immediately applicable to a large one. Nevertheless, there is some wish to imitate that example, and to disregard the outraged feelings of capitalists who predict that American industry will collapse utterly if the country becomes socialistic enough to appoint arbitrators with the power to prescribe to capital what wages it shall pay, and how otherwise it shall carry on business. The nation has learned a good deal in the last two or three years.