The Pamphlet Collection of Sir Robert Stout: Volume 71
Competition is the plan
By which man strives as best he can,
To ruinate his fellowman.
Whilst the capitalistic employer is enthusiastically clamorous for the "rights" of the free labourer, it is interesting to note that, with singular magnanimity, he puts forward no claim for freedom for himself. If freedom is held to be a blessing as well as a right for labour, and for society through labour, why should not a similar blessing he extended to capital? It is sad, however, to reflect upon the rigorous manner in which in this liberal age the operations of capital have come to be hampered and bound. If the capitalist proposes investment in mining, there are Mining Acts with which a strict observance is required; if he contemplates going into manufacture, then the State insists that his buildings must provide certain breathing spaces for his employes, and be well ventilated and drained; if he could have ships to sail the seas, there are Shipping and Plimsoll Acts and Navigation Laws to which regard page 16 must be paid; there are inspectors and other inconvenient officials appointed to look after his boilers and his engines, and they must be satisfied if he would not have his movements brought to a full stop Over all this fabric of restrictive legislation, which is of quite recent development, there are troublesome general laws which fix upon him responsibilities, and under which, in certain contingencies, he is liable to be cast in damages. Even in the choice of the materials of a house in which to dwell he is not left wholly free, and in the size of some of the apartments, the drainage, and other matters he is not suffered to be without control. In short, it is difficult now to discover any branch of production, manufacture, or industry in which it can be claimed for the capitalist that a thoughtful and jealous legislature has left him without care, obligation, or restriction. But this view of the actual situation vexes the soul of the capitalist not at all; he surveys and endures his slavery to enactments with a patient and high-minded shrug entitling him to unqualified admiration; but, when it is proposed in any way interfere with rights and liberties of the free labourer then and only then, his emotions overcome him, and he surges into passionate indignation—wholly untainted by any consideration for supposed interests affecting his class—against such an intolerable most atrocious, outrage!
Here it may not be without advantage to bestow a little attention to the remark that fell from Earl Granville in the speech (already quoted), which he made in reply to the utterance of Lord Brougham: "Wages could only be paid out of the capital of the employer, and by diminishing the number of the working hours, and paying the same wages, the employer could not afford an extra shilling to those who Were out of employment." Now, at the time these words were spoke there were certainly logical grounds for believing in their everlasting truth. The logical grounds remain, and the statement of the noble lord is repeated over and over again in different forms, and it might receive unreserved acceptance but for the circumstance that facts [unclear: are] against it. Of course it is reasonable to suppose that a reduction [unclear: is] the hours of labour, and a rise in the amount payable for wages, would have the effect of making the outlay in turning out manufactures very great deal higher. So no doubt it does, but the manufacture meets the altered circumstances of his position by raising the price of his manufactured article. It is not the manufacturer, therefore, [unclear: but] the consumer that has to pay the additional cost of [unclear: production] "Yes," it is urged, "that is all very fine, but the raising of the cost of production at Home lets in the competitor from abroad, [unclear: and the] manufacture locally in consequence suffers total extinction." It [unclear: is] admitted that, logically, that is the justifiable conclusion; the [unclear: conclusion] which forced itself upon the mind of Earl Granville, and [unclear: has] forced itself upon the minds of many thousands of other intelligence people at that time and since.
But facts are more powerful than even the laws of logic. It is [unclear: perhaps] page 17 not too much to assert that wages in England have always been a trifle higher than the rates paid in continental countries, yet English production and manufactures have in no way suffered. Wages of late years have been considerably raised, whilst the hours of labour have been decreased, and instead of the ruin that was to have befallen the country, the great and grand old Mother Land was never more prosperous. In the colonies of Australasia the rates of wages are at feast 100 per cent, higher than in the Mother Country, whore the capital required for erection of buildings, machinery, other appliances, and coal is very much less, yet, singularly enough, manufactures are not unknown in these southern lands. Of course, there are freight, wharfage, cartage, Customs and other charges to keep the British manufacturer from our markets, but nevertheless they are not sufficient to sweep away wholly the local disadvantages under which the Colonial manufacturer labours. The freetraders of New South Wales claim that even without protective duties manufactures in their colony have kept at least equal progress with those of Victoria, but of course, logically, that is impossible to be correct. But the case by no means ends here. In addition to the comparatively cheap labour machinery, coal, &c., of the Mother Land, Colonial manufactures have to compete with the still cheaper labour, &c, of France and Germany, for the Messageries Maritimes of the former country, and the Norddeutscher Lloyds of the latter (subsidised lines), have for some years been running fleets of large and powerful steamers to Australia. Under such circumstances it is evident that, logically, there should be no manufacturing industries in Australia. How it comes about that, despite the very much cheaper labour, &c., in other lands, local manufacturers, taken as a whole, are fairly thriving, is one of the mysteries. The simple facts are sufficient, however, to base a suspicion that those who work themselves into a state of alarm over the supposed dangers arising from the competition of outside cheap labour are disturbing their minds with legends belonging to a bygone period of the world's history,
The repeal of the Combination Laws at once left both employers and workmen free to unite their several elements of strength for the accomplishment of such common ends and beneficial purposes as to them seemed best. Artisans and labourers have constituted Trades Unions, the avowed objects of which are to maintain the advantages which have been already secured, and to attain other benefits of a similar nature, as occasion may present through the abrogation of competition. Competition, it has been felt, in all the different branches of manual employment, has resulted in the sinking of wages to extremely low rates, and the debasement of the labourer to a level very little removed from that of the brute. On the other hand, for a century or so, competition has been held to be in the highest degree to the interest of the general public. But is competition really so? Is it not possible that competition may be carried too far, and page 18 assume a very unhealthy shape? For example, there have [unclear: been] employers of labour who have followed what is known as [unclear: the] "cutting" business; that is to say they have "cut" the prices [unclear: of] their goods down to such figures as to leave the smallest margin [unclear: and] profit. The hope which has animated them was that they might, [unclear: by] pursuing such a policy, attract the purchasing public and build up [unclear: for] themselves a large connection; they have been possessed of the [unclear: idea] that, in consequence of their selling cheap, crowds would flock to [unclear: their] places of business, and the quantity of goods they would thereby dis pose of would yield the same financial return, if not a greater, than [unclear: if] they sold at the legitimate prices of the trade. Such efforts [unclear: have] generally ended in disastrous failure, and those who have supplied [unclear: the] "cutters" with goods, together with those who have been [unclear: employed] by them, have suffered loss. Then, experience having failed to bring wisdom to the "cutters," they have gone to other towns pursuing their cutting tactics; for a time demoralising legitimate traders' businesses, failing again and again, bringing loss to too confiding merchants. Now, it is affirmed by the advocates of free competition that in [unclear: all] such cases, if merchants and others lose, the general public gain [unclear: inasmuch] as the prices of goods having been reduced to a very low rate, cheapness has been secured, and thus the principle of competitions [unclear: has] been justified.
It is, however, quite a popular mistake to suppose that the general public approve of the cutting principle. No doubt there are a few [unclear: in] every community who are always on the search for cheapness; [unclear: to] whom the securing of bargains constitutes the business of a [unclear: lifetime;] who are unattached to any business house or particular trader, and [unclear: as] long as the cutter is enabled to carry on it is to be expected that [unclear: he] will have the business support—whatever it may be worth—of [unclear: such] people. But if cheapness really was the talismanic magnet that it [unclear: is] erroneously supposed to be, how is it that the labouring and the poorer classes are not found hurrying in dense masses to the business premises of the "cutter?" How is it that the shops still maintaing legitmate prices are not all deserted and the proprietors do not fail. As a matter of hard fact the general public are not consumed with the ravenous hunger after cheapness that has for so long been supposed Certainly, it is not to the interest of the public that the conduct of the business of legitimate and fair-dealing tradesmen should be suddenly demoralised by the irruption of reckless eheapmen; nor does the general community gain by losses sustained by the merchant. The people neither gain anything from nor desire anything of the sort. To the legitimate tradesman, the merchant and the capitalist, the "cutter" stands in almost precisely the same relationship that the "sweater" does to the mechanic, and the time has about arrived when this position should be distinctly recognised. The Trades [unclear: Unions] have waged an active and not wholly unsuccessful warfare against the one, and the Employers' Unions will shortly have to attempt [unclear: the] page 19 suppression of the other. In thin mattor the capitalist has a large interest, and no one could blame him for exorcising his powerful inlluence in the direction indicated, Labour has entered into combinations to fix and maintain standards of remmunration for the performance of almost every kind of manual work, and the efforts which labour has put forward, taken as a whole, have proved successful; why then should not standards of prices be fixed for the advantage and protection of the trader, producer, manufacturer, capitalist? Of course, there are difficulties standing like lions in the way, but difficulties were only ordained for the purpose of being overcome. The licensed victuallers afford an instance of an occupation in which uniformity of prices can be established and maintained.
In the different Legislatures of the Colonies Bills are being introduced (in New South Wales an Act is in operation) for the settlement of disputes between Labour and Capital by the establishment of Courts of Conciliation and Arbitration, and there can be little doubt that through the operation of these measures peace, for a considerable time at least, will be sustained. Employers' Unions will therefore be shortly released from the necessity of bestowing the whole of their energies on resistance to labour claims, and will be in a position of being able to give some little attention to questions affecting their interests in other directions. Should they decide to attempt the establishment of standards of prices of all goods to be charged to the consumer, there can be little doubt that the assistance of the Labour Unions will be frankly extended to them, indeed, it is difficult to conceive upon what grounds those who have so stoutly, so warmly, and so successfully insisted upon a standard of prices for themselves, could refuse to cooperate in assisting others to achieve the same end. The result of these considerations therefore is that a mitigation, if not an entire abrogation, of the principle of unrestricted freedom in competition, promises to constitute a prominent future of the new condition of thing to which society is rapidly progressing.