Chapter III.

Regulation of the Conditions of Labor.

At some point the laws of God are outraged, otherwise he who kept the fig tree would eat the fruit thereof, and he who sowed would reap.

That the wrongs of man are susceptible of redress, that bankruptcy must sooner or later sweep down the evil institution or practice, is the confident conviction of the generality of men. Our nature will not permit us to escape the conviction that the leaden weight of constraining circumstances which flattens down the life of the masses will ultimately be lifted. Deeply sensible of injustice somewhere, the unthinking multitude of men are, however, too ready to seize on any proposal which holds out the slenderest of promises of relief. One of these proposals undertakes to cure the defects of the industrial organisation by strict regulations of hours of work, or wages and general conditions of employment. To the futility of such a measure attention must now be addressed. Before attempting to criticise, however, let the due meed of appreciation be offered.

The Factory Acts and other kindred statutes make a chapter of throbbing interest in the history of the betterment of the working classes. They have saved much childhood from being broken on the wheel of labour. The honors of child labour half a century ago were appalling beyond measure. These; Acts have thrown a protecting arm round women, condemned by the misfortune of their lot to earn their daily bread. They have insisted upon sanitary surroundings. They have relieved the strain of excessive toil by reducing the hours of work per day. In some countries, indeed the eight-hours' day has been realised; in others various approximations to it have been reached-The truth is now being borne in upon us that the shorter day gives increased efficiency and increased productivity. The last hours of a long day exhaust the worker, leave him limp and sapless; the night's repose is not sufficient for recuperation: he returns to his work in the morning dispirited and but partially renewed in strength. Consequently his work suffers. The evils of such exhausting toil are cumulative, and the worker at middle life is cast aside to make room for the young man whose natural vigour is unexploited. The fountain of his energy drawn dry the older man, toil-worn and inert passes into the workhouse. Such has been the story of countless thousands of industrial slaves.

A digression here is not unbefitting to remark upon the opposition of interest so often obvious between the employer and the State. There are advocates of the doctrine of laissez-faire who smugly assert that the interest of the employer is coincident in the last resort with that of the State. To augment the wealth of a country is to benefit the people, and we are told that the employer, whose energy and enterprise are directed to increasing his riches, thereby renders the greatest service to the State. The experience of the most casual observer will enable him to confute such a proposition. Not at one, but at a score of points, the antagonism of employer and State can be marked. It is the interest of the State that each citizen shall expend his productive energy with such liberality as shall secure for him the greatest sum of products and satisfaction. It wants each man to exert himself to the utmost in the field of industry. The more riches his muscles and brain compass the better. A community prospers on strenuous toil, not idleness. But in measuring the result of a man's labour the Stale takes as the unit of time the man's lifetime Taking the life of each man as a whole, the State want, to attain the utmost reach of productiveness. The life should be so ordered that, at the end, the accumulated fruits of the whole life's industry shell be the largest sum possible. To wear a man's fibres through, to burn his energy out, in a few years' intense unremitting toil is to sacrifice the future on the altar of the present. Better fifty years' steady industry than ten years' fieree expenditure of energy. To pour out the life's vigor in fifteen or twenty years does not page 17 yield as large results as when, in husbanding the energy, the life's working year are extended in to old age.

The self-interest of the employer dictates otherwise. More profitable to him ten crowded years of fierce, unrelaxed toil, with the human frame straining like an engine under the pressure of full steam than fifty years of labour at a slower, less exhausting pace. It matters not to him if the human machine breaks under the burden; others are waiting for the place with natural powers unimpaired. From the mercenary view-point of profit, it pays to suck the energy from the worker quickly and replace him with a young man full of sap. No obligation is cast upon the employer to care for the man he has wasted. The burden of his maintenance in his premature decline falls upon the State-supported institutions of charity.

Thus arises the urgency and justification of Governmental interference. Labour, the conditions and time of its exertion, must be regulated to prevent this sacrifice of the permanent interests of the future to the greed of the employer. The path of industrial progress is strewn with the wreck of men, struck down, midway on life's journey, by the relentless hand of soulless industry. But what concerns us here is not the base inhumanity of it. We are not concerned in this place with ethical considerations. It is the economic waste which challenges our attention. It is this which appals. All honor then to Trades Unionism, which, standing on the rights of man demanded that this waste should be stopped. The well-being of a people, the wealth of a country, require the regulation of industry with a view to preventing wasteful or uneconomical employment of human energy.

Not only has State interference on behalf of the workers been justified in the past, but the duty is incumbent upon Governments of still further interfere nee, at any rate in Europe. A few years ago, the writer stayed a week in a manufacturing village of Yorkshire. It was winter, and at the dark cold hour of six he was awakened every morning by the multitudinous clatter of clogs on the stone pavement. Hundreds of women and girls were making their way to the woollen mills to work for ten hours at the loom. Many of them were married, with families. They left their babies at dark, and returned to tliem at dark. Can' stalwart men be nourished and built by mothers whose best energy is devoted to making cloth? The nation cannot afford to allow" its womanhood to neglect the making of men for the making of anything material. The women of a country should not work for wages; they should be in the home child-bearing and manufacturing character in their children. Britain to-day is neglecting her soils for the sake of victory in the world's markets.' But nowhere is the juggernaut of modern industrialism with its panting passion for profit's at any cost, crushing out move lives than in the United States of America. page 18 The middle-aged man is the old man, the race of life is so fast Industrial supremacy, purchased at this, price, is too costly, and cannot be maintained. A nation cannot continue to flourish by eating up its own children. Yes, there is abundant ground for Government activity in the regulation of industry.

In New Zealand. State interference in the control of industry has gone further than in any other country. The outstanding feature of her advanced legislation is the Arbitration Act. This Act, which has been in force for fifteen years, sets up a Court of Arbitration where all disputes between Trade Unions and Employers are settled. A recent amendment to the Act has made strikes or lock-outs illegal. Thus arbitration in the settlement of disputes is compulsory. Much controversy has raged round this Act. The effects of its operations have been the subject of bitter partizanship. Many allege, and with considerable weight of supporting fact, that the characteristic effect has been the multiplication, not the settlement, of disputes. Undoubtedly, the ease with which the Court can be approached has induced unions to bring the smallest grievances to it for arbitration—grievances which under no circumstances would have led to a strike. Practically every industry in the Dominion is now subject to an award of the Court. These awards are usually operative for three years, and experience shows that, when they expire, the workers file new and enlarged demands, necessitating a revision of the conditions of each industry every three years at least. From this it will be seen that the Arbitration Act has brought no finality.; disputes are endless, with no prospect apparently of industrial peace ever being reached. As a set-off against this constant, irritation, one grand commanding result can be chronicled: New Zealand is a land without strikes. It is true that in March, 1907, the members of the Slaughtermen's Union went out on strike for a week or so but the penalties of the law were invoked; a substantial fine on each man with the alternative of imprisonment brought the men to compliance; they submitted their case to the Court and abided by the result. The Arbitration Act was vindicated in this its time of trial. The experience of its working for fifteen years has brought about a peculiar and unforeseen result: the employers generally are more eager to retain it on the Statute Book than the employes.^* With all its drawbacks, it has saved from the dislocation and ruin of protracted strikes. In this respect alone it has abundantly justified itself.

Its effects upon wages and conditions of labour must also be remarked. For the most part the Court has slightly raised wages, shortened the working day, and improved the lot of factory girls; the over-reaching employer, apt to abuse the advantage of his position to the detriment of his men, has been checked.

Having fairly stated the benefits of regulation, the question which furnishes the keynote of this little book can now be asked: What has this regulation contributed to the solution of the problems or social inequality? Are they any nearer solution? Does success lie along the line of further and stricter regulation Can the industrious poor be amply rewarded and the idle rich be penalised thereby? Can Labour hope to get its fair share of the products of industry by this means? Can unearned increments be diminished and earned increments be augmented? These questions touch the pith of the matter. Regulation has done much, but maybe it is a spent force. Its virtue may be exhausted. It may be that here reforming zeal can achieve nothing further, that energy must be diverted into new channels if large results are to be gained. That, such is the case will appear as the argument proceeds. The regulation of industry has no key with which to unlock the door of just industrial conditions to the workers of the

The wealth of the world is enormous, and ample to supply the real needs of all its inhabitants. By the operation of subtle economic laws this wealth is unevenly distributed: many are glutted with riches: the producers of these riches are generally stinted. It was thought that Trade Unionism, in adding to the power of Labour in bargaining with the employer by the substitution of combination for competition, would secure to labour that share of the produce of industry to which it was justly entitled. That it has failed of its main purpose must he admitted. This failure is noticeable whether the principles of Trade Unionism are applied directly by the unions or through the medium of the State. New Zealand offers the best illustration of the failure because she has made the most liberal concessions to Labour ideals. Wages have been raised in almost all trades, but the purchasing power of those wages has been reduced in greater proportion. After sixteen years of Labour Legislation, after sixteen years of earnest effort after reform, real wages are less than at the beginning of the reforming period. By real wages are meant the commodities and satisfactions which money wages can purchase. Wages have gone up, but prices have increased still more. If the labourer now gets £3 a week where formerly he got only £2 he is worse off if his £3 will not purchase as many consumable goods as the £2 were wont to do. Very significant conclusions were published about three year ago by Mr Coghlan statistician of the New South Wales Government. He said that during the past fifteen years page 20 in New Zealand wages had risen 8½ per cent., meat 10 per cent, house rent 30 to 50 per cent., and other items from 10 to 50 per cent. These figures have been confirmed by Mr Tregear, Chief Secretary of the Labour Department of the Government of New Zealand. This gentleman has on several occasions, of recent years, in his annual report to Parliament, drawn attention to the burden which the great increase in the cost of living has put upon the working class. This increase in the cost of living is not due wholly to the activity of the Arbitration Court or Labour Legislation One of the prime factors, indeed, is the high prices that have prevailed so long in English markets for New Zealand butter, meat and wool. A sustained high price for a staple product tends to lift up the prices of other commodities Nevertheless, the fact is conspicuous that the purchasing power of the workers has been diminished during a period of unexampled reforming activity and during a period also of continuous prosperity. Somehow the mark has been missed. Certain subsidiary benefits have been secured, but the social problems still stand like the riddle of the Sphinx, defying solution. It is not pleasant, to admit failure, and there are many who allege that the remedy lies in more regulation.

A common plank in the platform of immediately desirable reforms adopted by the Trades Unions of New Zealand at their annual conferences is the following:—" That the hours of labour per day be gradually reduced until employment be found for all." The unemployed difficulty has never suffered in new Zealand that acuteness which is its normal condition in older lands. Yet there has always been a residuum of unemployed. As a country advances in population and wealth, the unemployed problem becomes accentuated. The wealth per head of a newly-settled country is less than that of an old country. Yet there is comparatively no poverty in the new country and no lack of employment. In the older country these evils are pronounced to a degree that appals. The Labour conference seeks a remedy in the gradual reduction of the length of the working day. The remedy is so crude that the possibility of its ever receiving legislative expression is, indeed, hardly conceivable. The reason for adverting to it is that it is rooted in ideas which exercise so vereignty over the minds of thousands of people in New Zealand and millions of people throughout the world. These ideas with draw attention from reforms which have in them the prospect of success. Our task is still to clear the path of progress from the futile measures of reform which encumber it. There is much rubbish to be removed before any real advance can be made.

That any body of opinion should be found in support of such and kindred proposals among the leaders of thought in the ranks of Labour reveals an ignorance of the root principles of economics which one would scarcely have expected from intelligent men. It shows a disregard of the laws of production which, persisted in, must lead to calamity. The fallacy can be readily exploded. Let the page 21 argument be carefully noted, for more is involved than the refutation of the particular proposition under discussion.

A fair statement of the case for the proposed reform is first required With plausibility of superficial reasoning, it iaccute;s argued that if one hundred men working eight hours, a day can make all the boots needed by a community, and there are 200 men seeking employment as bootmakers, then if the working day were contracted to four hours, employment would be found for the whole 200. It is therefore suggested that a sort of sliding scale should be adopted whereby the hours of work in an industry might be lessened in number until the unemployed in that industry were absorbed. The mere statement of the ease reveals its amazing absurdity! The least critical suggests innumerable interrogations for the defenders of the proposal to answer. If 200 men are required to do the work formerly done by 100, are their individual wages reduced, or do they remain the same? Doing only half the work, must not their wages be reduced by half, if the boots are to be sold at the same price as formerly? If wages, however, remain the same, must not the price of the product be raised sufficiently to pay for the added cost of production? If the price is raised, will not the consumer have to bear the burden? If the consumer has to pay more for his boots, will be not economise his use of them and thus lessen the demand, or will be not have less of his earnings to spend on other commodities and thus lessen the demand for those other commodities? Is it not true that if a man with fixed wages or income has to pay more for an article he has been in the habit of using, he will have less money for the purchase of other articles? If the demand for commodities is lessened, must not the demand for the labour which produces the commodities be lessened also? The demand for boots being diminished, how can our two hundred men find employment even at four hours a day? Must not the hours still further be reduced? And must not that, by further enhancing price, necessitate a still further reduction of hours? And so on, until we arrive at the reductio and absurdum—when the price is so high that the boots cannot be purchased at all and bootmakers have no employment. But suppose the demand for boots at the high price were maintained, would not the diminished demand in other branches of industry embarrass labor and lessen employment? In short, it is impossible to pursue this policy of gradually shortening the working day without causing one of two results—either there will be a rise of prices, which, by lessening general purchasing power, will weaken the demand for commodities in some direction and thereby contract the aggregate amount of employment; or there will be a maintenance of prices at their old level, with the purchasing power of the general consumers unabated, in which case our bootmakers must submit to a reduction of wages commensurate with the reduction of their output. On one horn of the dilemma Labour must be impaled. A merely artificial increase of employment in one trade cannot be effected without either a diminution of wages in that page 22 trade, or a diminution of employment in other trades. Neither result would be gratifying to the advocates of a gradual shortening of the working day until employment be found for all.

That such a monstrous proposition should engage the energy of men earnest for social betterment emphasises the urgency of familiarising the general public with the elementary principles of the production and distribution of wealth. Gross misconception of these principles has led to an expenditure of misguided effort, which, rightly directed, would have shifted the hand on the dial-plate; progress much further on. What is the leading principle governing wages, the reward of labour?

The source from which wages are drawn is the aggregate pro duct of the factors of production—the national output, or tie national dividend. It matters not what phrase is used, so long as the meaning is clear that Labour can only draw its wages from what is produced by Labour. Consequently, anything that diminishes the national output lessens the fund from which Labour is paid That the effect which the reduction of the day's working hours will tend to have upon the national output may be fully appreciated let an extreme raise be taken.

Suppose the working hours in all trades are reduced to four per day—a supposition not unreasonable, since such a reduction has been earnestly advocated by a president of a New Zealand trades Hall. What will be the effect? It cannot be contended that a man will produce as much in four hours as in eight. True, it his been established by experience that workers will do as much in eight or nine hours as in eleven or twelve. Indeed, so far as the reduction of hours has gone, the efficiency and productiveness of Labour may be said to have been increased. But it is false reasoning to argue that the same tendency must manifest itself at every further reduction. There is a limit below which any shortening of the working day must lessen the productivity of the worker. To lessen that is to diminish the total produce. And to diminish the total produce is to encroach upon and contract the only fund from which Labour can obtain wages. If the national output were diminished very substantially it is difficult to see how Labour could avoid sustaining a reduction of wages. At least, this is certain, the national output provides the only fund out of which the various factors of production can be remunerated. Land. Labour, and Capital have to share among them this aggregate output. If it is lessened, one of them must suffer. Land will receive less rent or Labour less wages, or Capital less interest. The natural effect of a diminished output would be to lessen the return to each factor Thus landowners, labourers, and capitalists would all suffer a pro-portionate reduction of income. But such is not the desire of these who advocate the shortened working day. If it is to be purchased at the cost of diminished wages, it is not wanted. It may be laid down, as possessing the self-evident truth of an axiom, that the average able-bodied worker would rather work eight hours a day at page 23 one shilling an hour than four hours a day at one shilling or even one shilling and sixpence, an hour. He is more solicitous for a rise in wages than a reduction of hours below eight per day.

But the question here obtrudes itself: Cannot the whole loss of the diminished output be thrown upon the capitalist or the land-owner? cannot Labour get the benefit of a shortened day with the maintenance of an undiminished rate of wages? This leads us to the domain of distribution. The problem of problems here presses into the foreground. Is there some hard necessity, some undeviating law which condemns Labour to a fixed proportionate share of the products of industry? Without regard to the volume of the national output at all, are there no measures whereby Labour may obtain a greater share than it has hitherto enjoyed? This question it is the function of subsequent chapters to answer. It will suffice here to state the conclusion which is there reasoned out. Labour can, and in justice ought to, receive a larger proportion of the products of industry—of the national output—than it does under the present industrial organiaccute;sation. But no assistance is rendered to the Solution of this problem by diminishing productive energy and restricting its output. The injustices and inequalities of distribution are not remedied by lessening the amount to be distributed. No salvation lies along the line of restricted production. Such a course leaves the problem of distribution still untouched. Let Labour exert itself to augment the national wealth consistent with an avoidance of "sweating" and undue fatigue. The more energy thrown into production the better. A country cannot be encumbered with too much wealth whilst an innumerable variety of wants remains unsatisfied.

Sometimes men speak of over-production as though such a thing in a general sense were possible. The consuming capacity of mankind is practically illimitable. Satiety is scarcely conceivable. Upon the gratification of one desire another emerges with almost equal importunity. There may be overproduction of one commodity; at a particular time the supply may be in excess of the demand. But so long as men are wanting satisfactions which only the products of labour can supply, there can be no overproduction of wealth. Should it arise that the markets of commodities generally were glutted, that goods offered for sale were unable to secure buyers we should find the explanation of the phenomenon not in overproduction, but in impediments to exchange, or in the unequal operation of the laws of distribution. Again, we come on to the problem of distribution. To talk of an overproduction of wheat in the world while millions are insufficiently nourished seems paradoxical. No doubt it has an intelligible meaning in the economic sense, for producers will he unable to dispose profitably of their goods unless consumers not only have the desire to consume, but have the general purchasing power which will make their desire an effective demand for the goods. The solution, then, of so-railed overproduction is page 24 not less production, but the conversion of impotent desire to consume into effective demand, or power to purchase the things wanted. In short, buying and selling is nothing but exchanging of commodities, and if, by the laws of distribution, the fruits of industry were more evenly divided, buying and selling, or trade, would necessarily be brisk. Markets are glutted when wealth is aggregated in the hands of a few and the many have nothing to offer in exchange.

Again, Labour has often assumed an attitude of hostility to machinery. Machinery, it is urged, has displaced labour. By doing the work of ten men, nine have been supplanted. It is assumed, therefore, that the tendency of machinery and labour saving devices generally is to accentuate the lack of work and swell the ranks of that most distressed class, the unemployed. The industrial history of Great Britain during the last 100 years furnishes abundant evidence of the misery and straitening wrought by the sudden introduction of elaborate machinery. The riots whirl: swept over Britain, smashing the hated machines which had displaced labour, still live in the memory of men. However emphatically we may insist on their futility, we cannot but be filled with, compassion for the desperate plight of the labouring class which gave them birth. Unfortunately, the process of transforming industries by the use of machinery was not gradual enough. With a callousness for which the business world is notorious, the human factors of production were cast out as rubbish to make room forth steam-energised arms and hands of steel. The transition to the era of machinery came with something of the suddenness of a revolution. Insufficient time was given to prepare for the change and abate its evils. The usual distresses of a revolution afflicted the industrial classes. But the displacement of labour occasioned by the introduction of machinery is never more than temporary Machinery never supplants labour except it lessens the cost of production. To lessen the cost of production is to reduce the price of the commodity. To reduce the price is to reduce the amount of the consumers earnings needed to be spent on that commodity; and to do that is to release money for expenditure in other directions. The introduction of machinery in one industry, therefore, occasions an increased demand for the products of other industries, and consequently of the labour required to produce those other commodities.

Whilst in some cases the introduction of new machines has come by continuous leaps, for the most part labour-saving appliances have made their way by small increments of invention. Indeed, as a general rule, machinery displaces labour only slowly and gradually. Porter tells us, for instance, that in 1813 there were not more than 2,400 power looms at work in England. In 1820 there were 14,150. In 1850 the number had increased to 100,000. But the curious fact is that during time the number of hand looms had somewhat increased. Porter shows page 25 also how the power loom illustrates the gradual continuous growth of improvements. A very good hand-weaver twenty-five or thirty years of age could weave two pieces of shirting per week. A steam-loom weaver fifteen years of age could weave in 1823 nine similar pieces in a week; in 1826 he could weave twelve pieces; and in 1833, assisted by a girl of twelve, he could weave eighteen pieces.

But whether machinery comes in gradually or suddenly, it ought to be a benefit to labour. After all, the masses do not want work: they want the results of it. If by invention some of the strain of toil can be shifted upon the shoulders of Nature and the productiveness of industry be augmented, so much the better. With a little less toil and more to consume the world would be happier. What eases labour whilst it multiplies its power cannot be inherently injurious to the working classes. If there are still poor, the fault lies not with machinery, but with the laws which distribute the products of machinery. It were disastrous misdirection of effort to assail that which increases Labour's efficiency. We only work to obtain goods for consumption. Let us obtain those goods as easily and in as large abundance as possible. We want not less goods, but better distribution of them. No benefit is to be gained by multiplying the obstacles and difficulties in the way of obtainng commodities for satisfaction. No blessing falls by doubling the amount of labour required to achieve a given end. Once again, we are led to the conclusion that it were a delusion to expert amelioration by making production more costly and less effective. The great desideratum is the utmost energy and efficiency of industry coupled with distribution of its teeming products on just principles.