Capital and Labor.
(By A. Lee Smith, Dunedin.)
As the industrial forces are clearly destined to be largely influenced by the principles of unionism, it is manifestly desirable that the economic aspect of the question involved by the term capital v. labor should receive attention, and be examined with a view of .ascertaining the | real issues between the two opposing interests, and, if possible, of defining the natural conditions which must ultimately rule as the supreme arbiters between the two. In the first place it should be obviously recognised that there is not the slightest necessity for the alarm and panic which have apparently taken hold of the minds of some employers during the late remarkable development. It should be possible to view the whole movement with no greater concern than is given to any of the several economic disturbances which, m these times, are so common by reason of the changed conditions which constantly affect industrial organisations. It is probable, no doubt, that the sudden and unexpected demands of labor may have a temporary disorganising effect on the current operations of traders, manufacturers, and others, but even this is m most cases being minimised by the recognition which the unions are generally disposed to give to existing engagements. There need, however, be no apprehension of any permanent disadvantage to the interests of employers through unionism, because, by the law of industrial equipoise, the division of the proceeds of the joint efforts of employer and employe will—allowing for other affecting conditions, —sooner or later proceed m the same proportions as those ruling before the existence of unions. Some businesses will permit of increased remuneration, others will not ; m the former it will be the publicj not the employer, who will pay it; m the latter, no attempt to obtain more than natural conditions will warrant can m the long run be successful. , ; A few remarks on the propositions here advanced may possibly give rise to discussion and tend to elucidation of some points of the industrial problem that, amid the general excitement, are apparently being overlooked. Under any circumstances, the sooner a mutual recognition of the possibilities that lie within the reach of both interests is arrived at the more advantageous it will be for the general welfare. There is one aspect of the subject that first requires some notice. It is the changed position which capital now occupies as an industrial factor to that which it formerly did. But for the fact that it is a convenient form of expression, which, by traditional usage, indicates two interests, supposed by many to be naturally antagonistic to each other, the term capital V labour, should be abandoned m favour of that of mental labour v physical labour. It is'quite a fallacy to suppose that capital m itself constitutes a and overpowering influence m the hands of business men, or that its possession is inimical to the interests of labour. In the major portion of the industrial world capital has suffered a gradual dethronement from the powerful position it once occupied. There are, no doubt, some instances m which, by the nature of the business—and distinctly making for the general welfare,—large permanent investments necessiarily carry a preponderating influence, bub m these cases participation m the advantage is attainable by the smallest investor—to wit, m bank, insurance, steamship shares, •fee., &o. Several causes have contributed towards this change. Primarily, of course, it is due to the enormous excess of production over consumption which has characterised the industrial efforts of recent times. This excess being collected and thereafter represented by the various systems of modern finanoe and credit, has afforded facilities and opportunity for widening the circle of business to an extent that formerly did not exist. In this way has arisen the large competition we now witness, the cutting down of the power which capital possessed when it was more exclusively held, and the installation of good business, ability as the chief factor m the production of profitable, results. Concurrently with this there has been a continual forcing upwards of the working classes by the refining effects of education, aided by the relief from the lowest forms'of drudgery which mechanical' appliances have supplied, with the final result that large numbers aye constantly stepping forward with more or less competency to take their places m the employers' ranks. Capital, therefore, by reason of this competition has become much more difficult to profitably handle; and its mere possession, unsupported by good business power, not only is of no great advantage, but very often is a source pi quick disaster. The continuous falling out from the employers' ranks by unsuccessful combatants indicates, and indeed proves, the narrow margin that obtains between success and failure, and theoonsitanfcaooessionof fresh rivals affords the best guarantee against abnormal profits inanyand every business. Failures now bear a much larger proportion to successes than formerly, and this fact alone gives proof of the diminishing average return of profits all round. In almost every branch there are traders carrying on with soarceiy any personal capital, being, what may be termed mental wage earners. In such cases any increased charges, on their business. must either b,e. met h,j- a corresponding, levy, on. fch© community they serve, or if by reason of competition that is impossible, by an equivalent abstraction from their own wage, when there would result a tendency to less competition m those businesses, leading eventually to such a position as would enable the survivors to exact the nec,es« j sary contribution from the p^h^io.. It will thus be seen, that ti»e extraction is not m_ade frqin," tlie employer's capita,!, but either wholly from, the general community or partly from it and partly frqm, the wages of tho,se who employ the.capital of oth^rsj Keeping m view the foregoing considerations, and applying the principle they point to as a guide to investigation, let two concrete cases be taken as Illustrations of the probable effect of the union movement. As Protection plays—and most likely will continue to do so-~an \mportant p^rfc m shaping the course of our industries, jfc is as well tq take i;ts influence into'account. Let the first case, therefore, represent the^ bearing of unionism on the circumstance^ of a'protectedindustry, Uere, |t may he observed, there a.r}se,s, th,e, possibility of a larger differential rate of wages, between those paid m this instance and those m a nonprotected one. Given a loyalty sufficiently intense to secure one class .of employes from aggression by any other, there is no reason why those m a protected business should not enforce continually increasing wages up to the lo : rgef,t po^nfe permitted b^ the, a^naui^ of the*duty. impqse^. ■Musi unionism might be made a very powerful weapon for the advantage of an exclusive class. Apart, however, from his individual loss as a member of the community pflyhxg m,ore for certain requirements through the above cause, the employer as an employer, would not suffer, simply for the reasons mentioned m the preceding paragraph. It is possible that when the highest point had been reached, where further a,dvj\npQ wss impossible, thqre mjghfc b e no'margin, but this w.ould soon rectify itself by the self-adjusting action of non-remunerative occupation to the employer, and then would follow a backing down to the point admitting this. Secondly, take a qase, where the business jq jm.fcyss.ibte of'
protection, one dependent on outside values—say, farming for instance. Here again, irrespective, of the capital engaged, any enforced levy of extra wages must be derived from increased returns, and if j the world's market does not permit of this, then ifc must follow that the increased charges cannot be maintained ; for large numbers of farmers are themselves but wage earners, with no personal | resources from which the increased wages could be drawn. Such must be the inevitable outcome, and the results, ekcept possibly for a very temporary period, will m no wise affect the permanent relations of capital, employer, and employe. There will be a general " passing on" of the charges until the adjusting point is reached which gives each according to his capacity. The great and indeed paramount advantage which unionism, however, will confer on labor will be the protection afforded against arbitrary and harsh treatment by unscrupulous employers. All employers who have recognised the social duty of consideration to those who are not so well off as themselves will look with satisfaction on the prospect that m future they will not be placed at a disadvantage by the unfair exactions of some competitors. But when all this is achieved, and a general settling down of all unionists into their places has been accomplished, it must be manifest that a large residuum of what may be termed "catch labor" will be left out. Further, there will be the widow and the orphan, to whom unionism will be but a name. Consideration for these classes will have to.be taken into account, and it will be interesting to see m what form it will display itself. The march forward of social regeneration has been going on for some time; it is now being accelerated, and m the hurry of the movement it should not be overlooked that there will necessarily be many who, by reason of intellectual, moral, and physical deficiencies, will not be able to keep pace with their fellows. It must be to the cultivation of a more tolerant class feeling, a higher estimate of social duty, that we must look for the prompting whereby employer and unionist alike will be brought to recognise the claims of those who cannot help themselves.
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Capital and Labor., Ashburton Guardian, Volume VII, Issue 2494, 18 August 1890
Capital and Labor. Ashburton Guardian, Volume VII, Issue 2494, 18 August 1890
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