John A. Hobson.

Problems of Poverty online

. (page 10 of 17)
Online LibraryJohn A. HobsonProblems of Poverty → online text (page 10 of 17)
Font size
QR-code for this ebook


United Kingdom is in practice almost the only exception."[32]

The greater contrast between the customary standard of living of the
immigrants and that of the native workers with whom they would compete,
has naturally made the question seem a more vital one for our colonies,
and for the United States than for us. There can, however, be little
doubt that if a few shiploads of Chinese labourers were emptied into the
wharves of East London, whatever Government chanced to be in power would
be compelled to adopt immediate measures of restraint on immigration, so
terrible would the effect be upon the low class European labourers in
our midst. Whether any such Alien legislation will be adopted to meet
the inroad of continental labour depends in large measure on the course
of continental history. It is, however, not improbable that if the
organization of the workers proceeds along the present lines, when they
come to realize their ability to use political power for securing their
industrial position, they may decide that it will be advisable to limit
the supply of labour by excluding foreigners. Those, however, who are
already prepared to adopt such a step, do not always realize as clearly
as they should, that the exclusion of cheap foreigners from our labour-
market will be in all probability accompanied by an exclusion from our
markets of the cheap goods made by these foreigners in their own
country, the admission of which, while it increases the aggregate wealth
of England, inflicts a direct injury on those particular workers, the
demand for whose labour is diminished by the introduction of foreign
goods which can undersell them. If an Alien law is passed, it will bring
both logically and historically in its wake such protective measures as
will constitute a reversal of our present Free Trade policy. Whether
such new and hazardous changes in our national policy are likely to be
made, depends in large measure upon the success of other schemes for
treating the condition of over-supply of low-skilled labour. If no
relief is found from these, it seems not unlikely that a democratic
government will some day decide that such artificial prohibition of
foreign labour, and the foreign goods which compete with the goods
produced by low-skilled English labour, will benefit the low-skilled
workers in their capacity as wage-earners, more than the consequent rise
of prices will injure them in their capacity as consumers.

§ 10. The "Eight Hours Day" Argument. - The last proposal which deserves
attention, is that which seeks to shorten the average working-day. The
attempt to secure by legislation or by combination an eight hours day,
or its equivalent, might seem to affect the "sweating system" most
directly, as a restriction on excessive hours of labour. But so far as
it claims to strike a blow at the industrial oppression of low-skilled
labour, its importance will depend upon its effect on the demand and
supply of that low-skilled labour. The result which the advocates of an
eight hours day claim for their measure, may be stated as follows -

Assuming that low-skilled workers now work on an average twelve hours a
day, a compulsory reduction to eight hours would mean that one-third
more men were required to perform the same amount of work, leaving out
for convenience the question whether an eight hours day would be more
productive than the first eight hours of a twelve hours day. Since the
same quantity of low-skilled work would require to be done, employment
would now be provided for a large number of those who would otherwise
have been unemployed. In fact, if the shorter day is accompanied by an
absolute prohibition of over-time, it seems possible that work would
thus be found for the whole army of "unemployed." Nor is this all. The
existence of a constant standing "pool" of unemployed was, as we saw,
responsible for keeping the wages of low-skilled labour down to a bare
subsistence wage. Let this "pool" be once drained off, wages will
rapidly rise, since the combined action of workers will no longer be
able to be defeated by the eagerness of "outsiders" to take their work
and wages. Thus an eight hours day would at once solve the problem of
the "work-less," and raise the wages of low-skilled labour. The effect
would be precisely the same as if the number of competitors for work
were suddenly reduced. For the price of labour, as of all else, depends
on the relation between the demand for it and the supply, and the price
will rise if the demand is increased while the supply remains the same,
or if the supply is decreased while the demand remains the same. A
compulsory eight hours day would practically mean a shrinkage in the
supply of labour offered in the market, and the first effect would
indisputably be a rise in the price of labour. To reduce by one-third at
a single blow the amount of labour put forth in a day by any class of
workers, is precisely equivalent to a sudden removal of one-third of
these workers from the field of labour. We know from history that the
result of a disastrous epidemic, like the Black Plague, has been to
raise the wages and improve the general condition of the labourer even
in the teeth of legal attempts to keep down wages. The advocates of an
Eight Hours Act assert that the same effect would follow from that
measure.

Setting aside as foreign to our discussion all consideration of the
difficulties in passing and enforcing an Eight Hours Act, or in applying
it to certain industries, the following economic objection is raised by
opponents to the eight hours movement -

The larger aggregate of wages, which must be paid under an eight hours
day, will increase the expanses of production in each industry. For the
increased wage cannot in general be obtained by reducing profits, for
any such reduction will drive freshly-accumulated capital more and more
to seek foreign investments, and managing ability will in some measure
tend to follow it. The higher aggregate of wages must therefore be
represented in a general rise of prices. This rise of prices will have
two effects. In the first place it will tend to largely negative the
higher aggregate of money wages. Or if organized labour, free from the
competition of unemployed, is able to maintain a higher rate of real
wages, the general rise in prices will enable foreign producers to
undersell us in our own market (unless we adopted a Protective Tariff),
and will disable us from competing in foreign markets. This constitutes
the pith of the economic objection raised against an eight hours day.
The eight hours advocates meet the objection in the following ways -
First, they deny that prices will rise in consequence of the increased
aggregate of wages. A reduction in interest and in wages of
superintendence will take place in many branches of industry, without
any appreciable tendency to diminish the application of capital, or to
drive it out of the country.

Secondly, the result of an increased expenditure in wages will be to
crush the small factories and workshops, which are the backbone of the
sweating System, and to assist the industrial evolution which makes in
favour of large well-organized factories working with the newest
machinery.

Thirdly, it is claimed that we shall not be ousted either from our own
or from foreign markets by foreign competition, because the eight hours
movement in England must be regarded as part of a larger industrial
movement which is proceeding _pari passu_ among the competing nations.
If the wages of German, French, and American workers are advancing at
the same rate as English wages, or if other industrial restrictions in
those countries are otherwise increasing the expenses of production at a
corresponding rate, the argument of foreign competition falls to the
ground.

These leading arguments of the advocates of an eight hours day are of
very unequal value. The first argument is really based upon the
supposition that the increased aggregate of wages can be "got out of
capital" by lowering interest and profits. The general validity of this
argument may be questioned. In its application a distinction must be
drawn between those businesses which by means of the possession of some
monopoly, patent, or other trade advantage are screened from the full
force of competition, and are thus enabled to earn profits above the
average, and those businesses where the constant stress of close
competition keeps interest and profits down to the lowest point which
suffices to induce the continued application of capital and organizing
ability. In the former cases the "cost" of an Eight Hours Day might be
got out of capital, assuming an effective organization of labour, in the
latter cases it could not.

As to the second argument, it is probable enough that the legal eight
hours day would accelerate the industrial evolution, which is enabling
the large well-equipped factory to crush out the smaller factory. As we
have seen that the worst evils of "sweating" are associated with a lower
order of industrial organization, any cause which assisted to destroy
the small workshop and the out-work system, would be a benefit. But as
the economic motive of such improved organization with increased use of
machinery, would be to save human labour, it is doubtful whether a
quickening of this process would not act as a continual feeder to the
band of unemployed, by enabling employers to dispense with the services
of even this or that body of workers whose work is taken over by brute
machinery.

The net value of these two eight hours arguments is doubtful. The real
weight of the discussion seems to rest on the third.

If the movement for improving the industrial condition of the working
classes does proceed as rapidly in other industrial countries as in our
own, we shall have nothing to fear from foreign competition, since
expenses of production and prices will be rising equally among our own.
If there is no such equal progress in other nations, then the industrial
gain sought for the working classes of this country by a shorter day
cannot be obtained, though any special class or classes of workers may
be relieved of excessive toil at the expense of the community as a
whole. Government employés, and that large number of workers who cannot
be brought into direct competition with foreign labour, can receive the
same wages for shorter hours, provided the public is willing to pay a
higher price for their protected labour.

In conclusion, it may be well to add that the economic difficulties
which beset this question cannot be lightly set aside by an assertion
that the same difficulties were raised by economists against earlier
factory legislation, and that experience has shown that they may be
safely disregarded. It is impossible to say how far the introduction of
humane restrictions upon the exploitation of cheap human labour has
affected the aggregate production of wealth in England. It has not
prevented the growth of our trade, but very possibly it has checked the
rate of growth. If the mere accumulation of material wealth, regardless
alike of the mode of production or of the distribution, be regarded as
the industrial goal, it is quite conceivable that a policy of utter
_laissez faire_ might be the best means of securing that end. Although
healthy and happy workers are more efficient than the half-starved and
wholly degraded beings who slaved in the uninspected factories and mines
during the earlier period of the factory system, and still slave in the
sweater's den, it may still be to the interest of employers to pay
starvation wages for relatively inefficient work, rather than pay high
wages for a shorter day's work to more efficient workers. It is to the
capitalist a mere sum in arithmetic; and we cannot predict that the
result will always turn in favour of humanity and justice.

At the same time, even if it is uncertain whether a shorter working day
could be secured without a fall of wages, it is still open to advocates
of a shorter working day to urge that it is worth while to purchase
leisure at such a price. If a shorter working day could cure or abate
the evil of "the unemployed," and help to raise the industrial condition
of the low-skilled workers, the community might well afford to pay the
cost.




Chapter VII.

Over-Supply of Low-Skilled Labour.



§ 1. Restatement of the "Low-skilled Labour" Question. - Our inquiry into
Factory Legislation and Trade Unionism as cures for sweating have served
to emphasize the economic nature of the disease, the over-supply of low-
skilled labour. Factory legislation, while it may abate many of the
symptoms of the disease, cannot directly touch the centre of the malady,
low wages, though by securing publicity it may be of indirect assistance
in preventing the payment of wages which public opinion would condemn as
insufficient for a decent livelihood. Trade Unionism as an effective
agent in securing the industrial welfare of workers, is seen to rest
upon the basis of restriction of labour supply, and its total
effectiveness is limited by the fact that each exercise of this
restriction in the interest of a class of workers weakens the position
of the unemployed who are seeking work. The industrial degradation of
the "sweated" workers arises from the fact that they are working
surrounded by a pool of unemployed or superfluous supply of labour. So
long as there remains this standing pool of excessive labour, it is
difficult to see how the wages of low unskilled workers can be
materially raised. The most intelligent social reformers are naturally
directing their attention to the question, how to drain these lowlands
of labour of the superfluous supply, or in other words to keep down the
population of the low-skilled working class. Among the many population
drainage schemes, the following deserve close attention -

§ 2. Checks on growth of population. - We need not discuss in its wider
aspect the question whether our population tends to increase faster than
the means of subsistence. Disciples of Malthus, who urge the growing
pressure of population on the food supply, are sometimes told that so
far as this argument applies to England, the growth of wealth is faster
than the growth of population, and that as modern facilities for
exchange enable any quantity of this wealth to be transferred into food
and other necessaries, their alarm is groundless. Now these rival
contentions have no concern for us. We are interested not in the
pressure of the whole population upon an actual or possible food supply,
but with the pressure of a certain portion of that population upon a
relatively fixed supply of work. It is approximately true to say that at
any given time there exists a certain quality of unskilled or low-
skilled work to be done. If there are at hand just enough workers to do
it, the wages will be sufficiently high to allow a decent standard of
living. If, on the other hand, there are present more than enough
workers willing to do the work, a number of them must remain without
work and wages, while those who are employed get the lowest wages they
will consent to take. Thus it will seem of prime importance to keep down
the population of low-skilled workers to the point which leaves a merely
nominal margin of superfluous labour. The Malthusian question has in its
modern practical aspect narrowed down to this. The working classes by
abstinence from early or improvident marriages, or by the exercise of
moral restraints after marriage can, it is urged, check that tendency of
the working population to outgrow the increase of the work for which
they compete. There can be no doubt that the more intelligent classes of
skilled labourers have already profited by this consideration, and as
education and intelligence are more widely diffused, we may expect these
prudential checks on "over-population" will operate with increased
effect among the whole body of workers. But precisely because these
checks are moral and reasonable, they must be of very slow acceptance
among that class whose industrial condition forms a stubborn barrier to
moral and intellectual progress. Those who would gain most by the
practice of prudential checks, are least capable of practising them. The
ordinary "labourer" earns full wages as soon as he attains manhood's
strength; he is as able to support a wife and family at twenty as he
will ever be; indeed he is more so, for while he is young his work is
more regular, and less liable to interruption by ill-health. The
reflection that an early marriage means the probability of a larger
family, and that a large family helps to keep wages low, cannot at
present be expected to make a deep impression upon the young unskilled
labourer. The value of restraint after marriage could probably be
inculcated with more effect, because it would appeal more intelligibly
to the immediate interest of the labourer. But it is to the growing
education and intelligence of women, rather than to that of men, that we
must look for a recognition of the importance of restraint on early
marriages and large families.

§ 3. The "Emigration" Remedy. - The most direct and obvious drainage
scheme is by emigration. If there are more workers than there is work
for them to do, why not remove those who are not wanted, and put them
where there is work to do? The thing sounds very simple, but the
simplicity is somewhat delusive. The old _laissez faire_ political
economist would ask, "Why, since labour is always moving towards the
place where it can be most profitably employed, is it necessary to do
anything but let it flow? Why should the State or philanthropic people
busy themselves about the matter? If labour is not wanted in one place,
and is wanted in another, it will and must leave the one place and go to
the other. If you assist the process by compulsion, or by any artificial
aid, you may be removing the wrong people, or you may be removing them
to the wrong place." Now the reply to the main _laissez faire_ position
is conclusive. Just as water, though always tending to find its own
level, does not actually find it when it is dammed up in some pool by
natural or artificial earthworks, so labour stored in the persons of
poor and ignorant men and women is not in fact free to seek the place of
most profitable employment. The highlands of labour are drained by this
natural flow; even the strain of competition in skilled hand-labour
finds sensible relief by the voluntary emigration of the more
adventurous artisans, but the poor low-skilled workers suffer here again
by reason of their poverty: no natural movement can relieve the plethora
of labour-power in low-class employments. The fluidity of low-skilled
labour seldom exceeds the power of moving from one town to a
neighbouring town, or from a country district to the nearest market
towns, or to London in search of work. If the lowlands are to be drained
at all, it must be done by an artificial system. Now all such systems
are in fact open to the mistakes mentioned above. If we look too
exclusively to the requirements of new colonies, and the opportunities
of work they present, we may be induced to remove from England a class
of men and women whose services we can ill afford to lose, and who are
not in any true sense superfluous labour. To assist sturdy and shrewd
Scotch farmers, or a body of skilled artisans thrown out of work by a
temporary trade depression, to transfer themselves and their families to
America or Australia, is a policy the net advantage of which is open to
grave doubt. Of course by removing any body of workers you make room for
others, but this fact does not make it a matter of indifference which
class is removed. On the other hand, if we look exclusively to the
interests of the whole mass of labour in England, we should probably be
led to assist the emigration of large bodies of the lowest and least
competent workers. This course, though doubtless for the advantage of
the low class labour, directly relieved, is detrimental to the interest
of the new country, which is flooded with inefficient workers, and
confers little benefit upon these workers themselves, since they are
totally incapable of making their way in a new country. The reckless
drafting off of our social failures into new lands is a criminal policy,
which has been only too rife in the State-aided emigration of the past,
and which is now rendered more and more difficult each year by the
refusal of foreign lands to receive our "wreckage." Here, then, is the
crux of emigration. The class we can best afford to lose, is the class
our colonies and foreign nations can least afford to take, and if they
consent to receive them they only assume the burden we escape. The age
of loose promiscuous pauper emigration has gone by. If we are to use
foreign emigration as a mode of relief for our congested population in
the future, it will be on condition that we select or educate our
colonists before we send them out. Whether the State or private
organizations undertake the work, our colonizing process must begin at
home. The necessity of dealing directly with our weak surplus population
of low-skilled workers is gaining more clear recognition every year, as
the reluctance to interfere with the supposed freedom of the subject
even where the subject is "unfree" is giving way before the urgency of
the situation.

§ 4. Mr. Charles Booth's "Drainage Scheme." - The terrible examples our
history presents to us of the effects of unwise poor law administration,
rightly enjoin the strictest caution in contemplating new experiments.
But the growing recognition of the duty of the State to protect its
members who are unable to protect themselves, and to secure fair
opportunities of self-support and self-improvement, as well as the
danger of handing over their protection to the conflicting claims of
private and often misguided philanthropy, is rapidly gaining ground
against the advocates of _laissez faire_. It is beginning to be felt
that the State cannot afford to allow the right of private social
experiment on the part of charitable organizations. The relief of
destitution has for centuries been recognized as the proper business of
the State. Our present poor law practically fails to relieve the bulk of
the really destitute. Even were it successful it would be doing nothing
to prevent destitution. Since neither existing legislation nor the
forces of private charity are competent to cope with the evils of
"sweating," engendered by an excess of low-class labour, it is probable
that the pressure of democratic government will make more and more in
favour of some large new experiment of social drainage. In view of this
it may not be out of place to describe briefly two schemes proposed by
private students of the problem of poverty.

Mr. Charles Booth, recognizing that the superfluity of cheap inefficient
labour lies at the root of the matter, suggests the removal of the most
helpless and degraded class from the strain of a struggle which is fatal
not merely to themselves, but to the class immediately above them. The
reason for this removal is given as follows -

"To effectually deal with the whole of class B - for the State to nurse
the helpless and incompetent as we in our own families nurse the old,
the young, and the sick, and provide for those who are not competent to
provide for themselves - may seem an impossible undertaking; but nothing
less than this will enable self-respecting labour to obtain its full
remuneration, and the nation its raised standard of life. The
difficulties, which are certainly great, do not consist in the cost. As
it is, these unfortunate people cost the community one way or another
considerably more than they contribute. I do not refer solely to the
fact that they cost the State more than they pay directly or indirectly
in taxes. I mean that altogether, ill-paid and half-starved as they are,
they consume, or waste, or have expended on them, more wealth than they
produce."

Mr. Booth would remove the "very poor," and plant them in industrial
communities under proper government supervision.

"Put practically, my idea is that these people should be allowed to live
as families in industrial groups, planted wherever land and building
materials were cheap; being well-housed and well-warmed, and taught,
trained, and employed from morning to night on work, indoors or out, for
themselves, or on Government account."

The Government should provide material and tools, and having the people
entirely on its hands, get out of them what it can. Wages should be paid
at a "fair proportionate rate," so as to admit comparison of earnings of


1 2 3 4 5 6 7 8 10 12 13 14 15 16 17

Online LibraryJohn A. HobsonProblems of Poverty → online text (page 10 of 17)