2. Closely related to this first difficulty is the fact that Mr. Booth provides no real suggestion for a process of discrimination in the treatment of our social failures, which shall distinguish the failure due directly to deep-seated vice of character and habit, from the failure due to unhappy chance or the fault of others. Difficult, almost impossible, as such discrimination between deserving and undeserving is, it is felt that any genuine reform of our present poor law system demands that some attempt in this direction should be made. We must try to distinguish curable from incurable cases, and we must try to cure the former while we preserve society from the contamination of the latter. The mere removal of a class of "very poor" will not suffice.
Since however the scheme of Mr. C. Booth does not proceed beyond the stage of a suggested outline of treatment, it is not fair or profitable to press close criticism. It is, however, a fact of some significance that one who has brought such close study to bear upon the problem of poverty should arrive at the conclusion that "Thorough interference on the part of the State with the lives of a small fraction of the population, would tend to make it possible, ultimately, to dispense with any Socialistic interference in the lives of all the rest."[[33]]
§ 5. Proposed remedies for "Unemployment."--In discussing methods of dealing with "the unemployed," who represent an "over-supply" of labour at a given time, it is often found convenient to distinguish the temporary "unemployment" due to fluctuations rising from the nature of certain trades, and the permanent unemployment or half employment of large numbers of the least efficient town workers. The fluctuations in employment due to changes of season, as in the building trades, and many branches of dock labour, or to changes of fashion, as in the silk and "fancy" woollen trade, or to temporary changes in the field of employment caused by a transformation of industrial processes, are direct causes of a considerable quantity of temporary unemployment. To these must be added the unemployment represented by the interval between the termination of one job and the beginning of another, as in the building trades. Lastly, the wider fluctuations of general trade seem to impose a character of irregularity upon trade, so that the modern System of industry will not work without some unemployed margin, some reserve of labour.
These irregularities and leakages seem to explain why, at any given time, a certain considerable number of fairly efficient and willing workmen may be out of work. It is often urged that this class of "unemployed" must be regarded as quite distinct from the superfluity of low-skilled and inefficient workers found in our towns, and that the two classes present different problems for solution. The character of the "chronic" class of unemployed makes the problem appear to be, not one of economic readjustment, but rather of training and education. But this appearance is deceptive. The connection between the two kinds of "unemployment" is much closer than is supposed. The irregularity of the "season" and "fashion" trades, the periodic spells of bad trade, are continually engaged in degrading and deteriorating the physique, the morale, and the industrial efficiency of the weaker members of each trade: these weaklings are unable to maintain a steady and healthy standard of life under economic conditions which make work and wages irregular, and are constantly dropping out of the more skilled trades to swell the already congested low-skilled labour market. Every period of "depressed trade" feeds the pool of low-skilled labour from a hundred different channels. The connection between the two classes of "unemployed" is, therefore, a close and vital one. To drain off this pool would, in fact, be of little permanent use unless those irregularities of trade, which are constantly feeding it, are also checked.
Still less serviceable are those schemes of rescuing "the unemployed," which, in the very work of rescue, engender an economic force whose operation causes as much unemployment as it cures. A signal example of this futile system of social drainage has been afforded by certain experiments of the Salvation Army in their City Works and Farm Colony. The original draft of the scheme contained in the volume, In Darkest England, clearly recognized the advisability of keeping the bounty-fed products of the Salvation Colonies from competition in the market with the products of outside labour. The design was to withdraw from the competitive labour market certain members of "the unemployed," to train and educate them in efficient labour, and to apply this labour to capital provided out of charitable funds: the produce of this labour was to be consumed by the colonists themselves, who would thus become as far as possible self-supporting; in no case was it to be thrown upon the open market. As a matter of fact these sound, economic conditions of social experiment have been utterly ignored. Matches, firewood, furniture, etc. produced in the City factories have been thrown upon the open market. The Hadleigh Farm Colony, originally designed to give a thorough training in the arts of agriculture so as to educate its members for the Over Sea Colony, has devoted more and more attention to shoemaking, carpentering, and other special mechanical crafts, and less and less to the efficient cultivation of the soil; the boots, chairs, etc. being thrown in large quantities upon the open market. Moreover, the fruit and vegetables raised upon the Farm have been systematically placed upon the outside market. The result of such a line of conduct is evident. Suppose A is a carpenter thrown out of work because there are more carpenters than are required to turn out the current supply of chairs and tables at a profitable price; the Salvation Army takes A in hand, and provides him with capital upon which no interest need be paid. A's chairs, now thrown on the market, can undersell the chairs provided by B, C, D, his former trade competitors. Unless we suppose an increased demand for chairs, the result is that A's chairs displace those of B in the market, and B is thrown out of employment. Thus A, assisted by the Salvation Army, has simply taken B's work. If the Salvation Army now takes B in hand, it can engage him in useful work on condition that he takes away the work of C. If match-makers are thrown out of work by trade conditions, and the Salvation Army places them in a factory, and sells in the open market the matches which they make, the public which buys these matches abstains from buying the matches made by other firms, and these firms are thus prevented from employing as much labour as they would otherwise have done. No net increase of employment is caused by this action of the Salvation Army, and therefore they have done nothing towards the solution of the unemployed problem. They have provided employment for certain known persons at the expense of throwing out of employment certain other unknown persons. Since those who are thrown out of work in the labour market are, on the average, inferior in character and industry to those who are kept in work, the effect of the Salvation Army policy is to substitute inferior for superior workers. The blind philanthropist may perhaps be excused for not seeing beyond his nose, and for ignoring "unseen" in favour of "seen" results. But General Booth was advised of the sound economic conditions of his experiment, and seemed to recognize the value of the advice. The defence of his action sometimes takes the form of a denial that the Salvation Army undersells outside produce in the market. Salvation matches are sold, it is said, rather above than below the ordinary price of matches. If this be true, it affords no answer to the objection raised above. The Salvation matches are bought by persons who would have bought other matches if they had not bought these, and if they choose to pay 3d. for Salvation matches instead of 2½d. for others, the effect of this action is still to take away employment from the 2½d. firm and give it to the Salvation firm. Indeed, it might be urged that a larger amount of unemployment is caused in this case, for persons who now pay 3d. for matches which they formerly bought for 2½d., will diminish their expenditure upon other commodities, and the result will be to diminish employment in those industries engaged in supplying these commodities. Here is another "unseen" result of fallacious philanthropy.
The inevitable result of the Salvation Army placing goods in the open market is to increase the supply relatively to the demand; in order that the larger supply may be sold prices must fall, and it makes no difference whether or no the Salvation Army takes the lead in reducing the price. If the fall of price enables the whole of the increased supply to be taken off at the lower price, then an increase of employment has been obtained in this trade, though, in this case, it should be remembered that in all probability the lower level of prices means a reduction of wages in the outside labour market. If the increased supply is not taken off at the lower prices, then the Salvation goods can only be sold on condition that some others remain unsold, employment of Salvationists thus displacing employment of other workers. The roundabout nature of much of this competition does not impair one whit the inevitability of this result.
This objection is applicable not only to the method of the Salvation Army, but to many other industrial experiments conducted on a philanthropic basis. Directly or indirectly bounty-fed labour is brought into competition with self-supporting labour to the detriment of the latter. It is sometimes sought to evade the difficulty by confining the produce which the assisted labour puts upon the open market to classes of articles which are not for the most part produced in this country, but which are largely imported from abroad. It is urged that although shoes and furniture and matches ought not to be produced by assisted labour for the outside market, it is permissible for an agricultural colony to replace by home products the large imports in the shape of cheese, fruit, bacon, poultry, etc., which we now receive from abroad. Those who maintain this position commonly fail to take into consideration the exports which go out from this country to pay for these imports. If this export trade is diminished the trades engaged in manufacturing the exported goods will suffer, and labour employed in these trades may be thrown out of employment. This objection may be met by showing that the goods formerly exported, or an equivalent quantity of other goods, will be demanded for the increased consumption of the labourers in the agricultural colony. This is a valid answer if the home consumption rises sufficiently to absorb the goods formerly exported to pay for agricultural imports. But even where this just balance is maintained, allowance must be made for some disturbance of established trades owing to the fact that the new demand created at home will probably be for different classes of articles from those which formed the exports now displaced. The safest use of assisted labour, where the products are designed for the open market, is in the production of articles for which there is a steadily growing demand within this country. Even in this case the utmost care should be exercised to prevent the products of assisted labour from so depressing prices as to injure the wages of outside labour engaged in similar productions.
Since the existence of an unemployed class who are unemployed because they are unable, not because they are unwilling, to get work, is proof of an insufficiency of employment, it is apparent that nothing is of real assistance which does not increase the net amount of employment. Since the amount of employment is determined by, and varies with, the consumption of the community, the only sure method of increasing the amount of employment is by raising the standard of consumption for the community. Where, as is common in times of trade depression, unemployment of labour is attended by unemployment of capital, this joint excess of the two requisites of production is only to be explained by the low standard of consumption of the community. Since the working-classes form a vast majority of the community, and their standard of consumption is low compared with that of the upper classes, it is to a progressive standard of comfort among the workers that we must look for a guarantee of increasing employment. It may be urged that the luxurious expenditure of the rich provides as much employment as the more necessary expenditure of the poor. But, setting aside all considerations of the inutility or noxious character of luxury, there is one vital difference between the employment afforded in the two cases. The demand for luxuries is essentially capricious and irregular, and this irregularity must always be reflected in the employment of the trades which supply them. On the other hand, a general rise in the standard of comfort of the workers creates an increased demand of a steady and habitual kind, the new elements of consumption belonging to the order of necessaries or primary comforts become ingrained in the habits of large classes of consumers, and the employment they afford is regular and reliable. When this simple principle is once clearly grasped by social reformers, it will enable them to see that the only effective remedy for unemployment lies in a general policy of social and economic reform, which aims at placing a larger and larger proportion of the "consuming power" of the community in the hands of those who, having received it as the earnings of their effort, will learn to use it in building up a higher standard of wholesome consumption.