Consumers and Wage-Earners: The Ethics of Buying Cheap

by J. Elliot Ross

The fact, too, that organizations such as trade unions and consumers' leagues can allow the use of their labels to certify that an article has been made under fair conditions, is a striking confirmation of the fact that some manufacturers do maintain proper factories and treat their employees justly.

Nevertheless, competition has a black as well as a silver lining. It is self-evident that for any length of time laborers cannot get more than the total product of their work coupled with the necessary capital. Nor will it be denied that capitalists will always be in a position to appropriate a part of this joint product, how much depending very largely upon the relative supply of capital and labor and the keenness of competition between them. The share that is left and which goes to the laborers is not divided equally. It is distributed competitively. Those who are economically strongest seize what they can, and the weaklings must be content with the remainder. Frequently this is not sufficient to afford them the standard we are considering, but they are helpless to remedy matters.

And there are some things that tend to keep this share at a minimum. Industrial organization is not simply a case of competition between capital and labor, but capitalists are competing with capitalists as well as with laborers, and laborers with each other as well as with capitalists. The result is that the weakest parties to this fray get hit hardest, and their only hope would seem to be the addition of some other check to competition that will prevent the present distressful consequences. This is not to say, as Socialists argue, that competition is to be abolished entirely, for we have seen that it may really have excellent effects for the workman. Rather it is to be harnessed and guided into beneficent channels, as a miller directs a stream to turn a wheel. He does not destroy the stream but makes it do his will.

An analysis of industrial society will show, I think, that despite the good work the stream of competition is doing, there is a little eddy undermining the bank and working havoc in some places. The description of one phase of competition, even though it be isolated from the rest, will probably give a correct enough idea of how this force while working out to the advantage of some, is resulting in harm to others. The considerations that must be omitted in a short sketch do not change the matter essentially. They limit the hardship wrought, but they do not prevent a considerable number of workmen from being mercilessly ground down.

Modern industry, then, is organized for sale, not use. Business men care nothing about what they manufacture so long as they can find a profitable sale for the article. The typical employer makes shoes not because he likes to, as an artist may paint a picture. He does it because he thinks a sufficient number of purchasers will want this commodity at a price paying him for his trouble.

But to get these purchasers he must (unless he have some sort of monopoly) offer his product at a price no higher than other manufacturers are willing to take for the same article. If he deviate only a few cents, the expert buyers of retail stores will know it and go elsewhere. There is a constant demand for cheapness, a universal eagerness to "get your money's worth"; and factories and retail firms must meet it, or see their trade taken away by competitors. The intense desire of individual buyers for minute savings of a cent here or a fraction of a cent there, becomes, in the aggregate, an irresistible Demand with a capital D, "a blood-power stronger than steam," compelling the retailer (who in his turn reacts upon the manufacturer) to sell cheap. "The phenomena of sweating are a standing warning against the dangers that are inherent in unregulated competition.... The underlying cause of the evil," affirms a noted English economist, "is certainly to be found in the indiscriminate preference of the public for that which is low-priced."[41]

The seller, then, must meet the Consumer's demands; and since these are for cheapness, he must sell cheap. But how can cheapness be obtained? Only by cutting down the expenses of production. Other manufacturers possess the same machinery, about the same advantages of location, and approximately the same talent. Given a system of unrestrained competition, each firm will have to count costs to within a fraction of a cent and reduce expenses to the lowest possible amount. To this end wages are often cut, workmen speeded, and the health of employees endangered.

"No one of us," says the manager of a big department store in St. Louis, "has any particular consideration in the purchase price of goods; the ease of communication and the large amount of advertising make it impossible for us to have any serious advantage over others in point of selling price. The women can go from one store to another, effectually preventing one store from being materially higher priced on the same goods than another.

"The great struggle is over the expense account. This brings up the whole question of salaries, the amount that can be paid to employees directly, the amount that is spent by us in caring for them, compensation for length of service.... All these have to be handled from the expense account, and it is on this point that some of the most delicate questions of morals arise, and they involve both the employer and the customer in the treatment of the employee."[42]