The Tyranny of Shams

by Joseph McCabe

Let us turn to graver matters. The mass of the workers, apart from the more advanced bodies of Socialists and Syndicalists, believe that the solution of the problem of poverty will be found in the development of Trade Unions and of the political power of Labour. By political power, with the aid of sympathetic members of the middle-class, they have won the right of combination and a whole code of labour-laws; by an increased political power, ultimately a political all-power, they will secure all the legislation they deem expedient.

In spite of the distraction of many of the workers by Anarchists and Syndicalists, who despise political action, and in spite of the restrictions of the franchise which are maintained by the older political parties, it seems plain that at some not very remote date the workers will control the world. Ever since the door of the political world was opened to Demos, eighty years ago, he was certain eventually to reach the throne, no matter how long he might be seduced to tarry by the way. Those who think otherwise must put their trust in the permanent unintelligence of the workers. The interests of the mass of workers are so far identical that they must finally combine to promote them. We are plainly moving, all over the world, in this direction. In Australasia, where the virgin soil permitted an exceptionally rapid growth, we see the farthest point yet reached, and within a decade or so Labour will have unshakable power all over Australia, at least. “Conservatism” has already disappeared, or changed its name to “Liberalism.” In Germany and France and Belgium we see the same disposition of the rival parties to unite in face of advancing Demos. In England there are signs that we shall at no distant date see a similar redistribution of political forces, and it is anticipated in the United States. In all countries the political energies are slowly gathering about two poles: Liberal (including the old Conservatives) and Labour. Even in such countries as Spain, Russia, Turkey, Japan, and China the initial stages of the development may be detected. When the workers at last unite and secure an absolute majority-power, they will legislate on familiar lines. Wages will rise, hours of labour will be shortened, and place will be found for larger numbers of workers.

It is little use moralising on this change. It is coming on like the tide. There will, no doubt, be temporary abuses of power, as there have always been, but the workers will learn the vital needs of an industrial order, and they will not starve the roots of their new prosperity. Let us assume that a state of equilibrium has been reached: that the workers have paramount political power, and wages are considerably increased. Does this promise a solution of the problem of poverty?

I am purposely leaving out of account the contemporary growth of rings and trusts. Paradoxical as it may seem to say so, they are not an essential element of the problem. The employers will (as is happening) form unions in face of the men’s unions, and the strain laid on individual employers and small companies will favour the growth of trusts. In so far as these make for economy, they are clearly useful; but no doubt they will be tempted to use their monopoly to dictate arbitrary prices. When, however, the workers have a majority-power, they can either slay the trusts or draw their teeth. On the other hand, a beneficent or labour-saving trust will not afford any advantage to the less skilful workers, who make up the great army of the poor, and it will reduce prices only by an unimportant fraction. The chief significance of trusts is that they tend to annihilate the individualist employer, who was once considered an indispensable institution, and they may thus dispose obstinate admirers of the older industrial order to welcome a radical change. They are more deadly to the middle-class than to the working-class.

The really vital question is whether the raising of wages and reduction of hours, accompanied by a large amount of secondary legislation to the advantage of the worker, will solve the social problem: which is not the problem of the existence of a few thousand prostitutes, but the problem of the existence of, in every country, several million people who live in privation and squalor, and cannot develop human personalities. On this I offer two or three observations.

Does the price of commodities rise in proportion to the rise of wages? If it does, the securing of a nominally higher wage is clearly a delusion. This seems, however, to be our experience. In England, during sixty or seventy years of trade-combination, wages have risen, and hours and conditions of labour have been improved, to a remarkable extent, in spite of open competition in an overcrowded market. But prices and rents also have risen, and it is not clear that there has been a net advantage to the worker. It is very difficult to answer the question precisely, because other factors (such as the application of science) have increased the productiveness of labour and have cheapened certain commodities (books, clothes, pictures, tea, etc.). The workers have shared these advantages, and are in a position of far greater comfort than they were formerly. But in seriously testing the claim and promise of the Trade Unionist and the Labour politician we have to endeavour to subtract the improvement in the workers’ condition which is due to the application of science, and of better methods, to production and distribution. When we make allowance for this, it is certainly not clear that the rise of wages shows a margin over the increased price of commodities: that, in other words, the higher wage is a real advantage.

It is difficult to see how it could be otherwise. When wages are raised, who pays the increment in the cost of production? The employer or the consumer? It is a familiar experience, and an inherent necessity of our industrial order, that the consumer does; and the consumer is the worker—the middle-class or wealthy consumer generally gets the difference in other ways. It would be bold to say that our employers have paid even a fraction of the increased wage out of their own pockets. More usually they put a fifth of a penny on commodities when the worker has secured a sixth. Competition alone restrains them, and this is largely superseded by agreements. We have had innumerable instances of this during the war. Class after class of workers claimed a higher wage, and prices rose higher and higher “on account of the increased cost of production.” If a Labour Government were to prevent employers from increasing the cost of commodities and raising rents in exact proportion to the demand for higher wages—were, in other words, to direct the employers to pay the increase of wage out of their own profits—we should soon see the end of this industrial order. The State would be compelled to become the employer.

This seems to be true of practically all the legislation which a political power of Labour could secure. Compensation, pennons, and insurance are typical instances. The new demand on the employer’s profits is met in one of two ways: he withdraws voluntary contributions to these or similar purposes, or he raises the price of his goods. The larger consumer meets the burden by raising his rents or fees. The unreflecting worker imagines that “the country” pays for these things; he forms, in this respect, a larger proportion of the country than he thinks.

The second and more important consideration is that this power to dictate wages and pass measures in favour of the workers does not hold out a prospect of absorbing that surplusage of labour which is our real problem. I am assuming that even the poorer and unskilled workers will have their unions and their share of the political power. Their wage will rise, and the price of their food and clothing and rooms will rise; but it is of greater consequence to reflect that the less competent workers on the fringe of the industrial army will receive little advantage. Some benefit they will certainly have, since the curtailment of hours and the slowing of the pace of production will make room for more workers in each industry; though we must remember that the pay of these new workers will either be taken from the older workers, whose hours are shortened, or—which comes to the same thing—will be put on the commodities. The total production will not be increased, and the employer will not relinquish his profit. In any case, even this method of finding room for more workers will affect relatively few.

Again I may quote the experience of Australia, where the workers have very great power. In Melbourne, alone, in 1913, I found 30,000 men unemployed; and there and in other cities the tainted area of poverty and distress was increasing. All the elaborate organisation and political power of the workers could not add to the sum of available work and thus absorb the surplus of labour. I am contending that until we do this we do not solve the poverty-problem. The chief cause of this appalling social disease is the inequality of natural endowment—either of muscle or nerve—in face of an unorganised system of production. There is not work, with regular and decent wage, for all. The weaker, the lazier, the more drunken, and the slower of intellect, are crowded out of the ranks and driven to casual employment. This is the tap-root of poverty, and the benefits secured for those who are in regular employment will not affect it.