Unfortunately, during the years 1904–1905 there was a very severe economic crisis which was the cause of widespread unemployment, and Glasgow and the West suffered severely. Such economic crises had been periodic during the past century, and differed materially from those which occurred in earlier centuries. Until the beginning of the nineteenth century economic crises were really due to actual scarcity of foodstuffs, and people went hungry as much because there was not enough food to go round as because they had no money with which to buy their share of what there was. Thus, in Scotland, until about the close of the Napoleonic wars, the periods of comparative plenty or of scarcity depended largely on the character of the seasons. While it is true that the common people were always in want, in bad seasons they died of starvation.
With the coming of the industrial era, however, there took place a gradual change. While prices still depended on the seasons, and were moderately or extravagantly high as the seasons were good or bad, there entered into the problem a new factor, and the people became poor and were unable to purchase because they had produced too much and there was not an effective market for the goods. As it has been tersely put: “The shoemaker’s children went barefoot because their father had produced too many boots; and the tailor’s, naked, because he had made too many clothes.”
This was a new phenomenon for which history provides no parallel, and it has persisted, ever increasing in intensity, until towards the end of the first decade of the twentieth century as many as 42 per cent. of the breadwinners in a respectable working-class district in the East-End of Glasgow have been found to be unemployed at the same time.
These periods of unemployment seem to be in the form of more or less regularly recurring cycles. There is first a gradually increasing inflation of the volume of trade. New works are started, old works are enlarged, and everywhere there is a boom, until the zenith is reached. Then comes a gradual slackening off. The supply of goods has outstripped the limits of effective demand and sales gradually decline as warehouses become full. The rate of slackening increases; statisticians begin to watch the rapidly ascending unemployment curve, which in itself does not record the full slackening, as many workers are on short time. This increase of unemployment still further weakens the effective demand for goods and still further accelerates the growth of unemployment, with the result that in about another year the unemployment crisis is reached, soup kitchens and relief works open; thousands of hitherto steady workmen become derelicts—and the huge commercial and industrial concerns take advantage of the slackness to squeeze small rivals out of business or to swallow them up, while at the same time improving their own machinery of production.
Another feature of these industrial phenomena is the acceleration of their periodicity. During the decades which marked the end of the nineteenth century and the beginning of the twentieth, the number of years which elapsed between one crisis and the next was becoming smaller and the periods were appreciably shorter than those of the earlier cycles. Fourteen, twelve, or ten years used to be the intervals between crises, but in the last forty years this interval has gradually shortened, until only three years intervened between the end of one crisis and the beginning of the next. This is in strict accordance with what we would expect to find. The means of supplying the effective demand of the people for goods has increased out of all proportion to the increase in that effective demand, with the natural result that the market gets choked full to overflowing in an ever-shortening time. When to this is added the continuous perfecting of processes and equally continuous speeding up of production, we see that under the conditions which obtain it necessarily follows that the periods which must elapse before the markets are choked up with goods must get progressively shorter, while the periods necessary to relieve the glut again grow gradually longer. Thus, we had a crisis in the late “’seventies,” another in 1888–89; another in 1893, of a milder type; another in 1898; another, very acute, in 1904–05; and another, the worst the industrial world in Britain has known, in 1908–09–10; while evidences were not wanting when war broke out that we were again on the downward sweep of the cycle.
THE EFFECT ON CO-OPERATION.
The Co-operative movement in general is profoundly influenced by conditions of unemployment, which is our excuse for what has been written above. The vast majority of Co-operators depend for their incomes on their being employed in ordinary industrial undertakings, and when the machinery of industry breaks down their spending power is affected. Those in fortunate positions can carry on economically for a longer or shorter period on their investments in their societies, but those fortunate individuals constitute but a small proportion of the whole membership. When an unemployment crisis comes it means distress to a large number of Co-operators, for those who have large savings to fall back on are usually in more or less important positions in the concerns by which they are employed and are amongst the last to be dismissed—are, in fact, rarely out of employment at all. Sales of Co-operative societies go down, while working expenses continue. In this respect, however, the Baking Society has always been the last to suffer, for people continue to buy bread when they have almost ceased to be able to purchase anything else. But there is always during such crises a proportion of Co-operators, varying in different districts, whose incomes are barely sufficient to meet physical needs while they are in constant employment and who are thrown on their beam ends by even a fortnight of unemployment, and the hardship of these crises is that this is the class of people on whom the curse of unemployment falls first and on whom it rests longest.
Fortunately, the milk of human kindness is not quite dried up in Co-operators, and so soon as genuine cases of distress are known steps are taken to ameliorate the condition. In this process of amelioration the Baking Society has always played a big part. We have already seen that during the miners’ and engineers’ strikes and during periods of distress due to unemployment the Society distributed thousands of pounds worth of bread, and now, during 1904–05, the same policy was pursued.
If one was inclined to moralise much might be said about the mentality of a people who continue content to endure such straits in a country where wealth abounds in superabundance, and also about the mentality of statesmen who could find no remedy for such a constantly recurring cancer of the body politic; but this is hardly the place for that, and all that can be done is to suggest that in a country in which the Co-operative principle was predominant a remedy would be found. The sufferers themselves, and those who act for them, have tried to do something through limitation of output and the shortening of the working day, but in normal times the onward march of production has more than kept pace with such crude attempts to outwit it. The remedies had the fatal defect of attempting to deal with a symptom while leaving the root disease untouched, and the result, necessarily, has been failure.