CHAPTER XXXVIII.

The Evolution in Industry and the Revolt Against Capital.

Industry in the past centuries was a strikingly different thing from what it has been in the recent period. For a century it has been passing through a great process of evolution, which has by no means reached its culmination, and whose final outcome no man can safely predict.

[=The Conditions of Mediæval Industry=]

For a long period during the mediæval and the subsequent centuries industry existed in a stable condition, or one whose changes were few and none of them revolutionary. Manufacture was in a large sense individual. The great hive of industry known as a factory did not exist, workshops being small and every expert mechanic able to conduct business as a master. Employees were mainly apprentices, each of whom expected to become a master mechanic, or, if he chose to work for a master, did so with an independence that no longer exists. The workshop was usually a portion of the dwelling, where the master worked with his apprentices, teaching them the whole art and mystery of his craft, and giving them knowledge of a complete trade, not of a minor portion of one as in our day.

The trade-union had its prototype in the guild. But this was in no sense a combination of labor for protection against capital, but of master workmen to protect their calling from being swamped by invasion from without. In truth, when we go back into the past centuries, it is to find ourselves in another world of labor, radically different from that which surrounds us to-day.

[=The Cause of the Revolution in the Labor System=]

It was the steam-engine that precipitated the revolution. This great invention rendered possible labor-saving machinery. From working directly upon the material, men began to work indirectly through the medium of machines. As a result the old household industries rapidly disappeared. Engines and machines needed special buildings to contain them and large sums of money to purchase them, the separation of capital and labor began, and the nineteenth century opened with the factory system fully launched upon the world.

[=Present Aspect of the Labor Question=]

The century with which we are concerned is the one of vast accumulations of capital in single hands or under the control of companies, the concentration of labor in factories and workshops, the extraordinary development of labor-saving machines, the growth of monopolies on the one hand and of labor unions on the other, the revolt of labor against the tyranny of capital, the battle for shorter hours and higher wages, the coming of woman into the labor field as a rival of man, the development of economic theories and industrial organizations, and in still other ways the growth of a state of affairs in the world of industry that had no counterpart in the past, and which we hope may not extend far into the future, since it involves a condition of anarchy, injustice, and violence that is certainly not calculated to advance the interests of mankind.

[=A Revolution In Industry=]

In past times wealth was largely accumulated in the hands of the nobility, who had no thought of using it productively. Such of it as lay under the control of the commonalty was applied mainly for commercial purposes and in usury, and comparatively little was used in manufacture. This state of affairs came somewhat suddenly to an end with the invention of the steam-engine and of labor-saving machinery. Capital was largely diverted to purposes of manufacture, wealth grew rapidly as a result of the new methods of production, the making of articles cheaply required costly plants in buildings and machinery which put it beyond the reach of the ordinary artisan, the old individuality in labor disappeared, the number of employers largely diminished and that of employees increased, and the mediæval guild vanished, the workmen finding themselves exposed to a state of affairs unlike that for which their old organizations were devised.

A radically new condition of industrial affairs had come, and the industrial class was not prepared to meet it. Everywhere the employers became supreme and the men were at their mercy. Labor was dismayed. Its unions lost their industrial character and resumed their original form of purely benevolent associations. Such was the state of affairs in the early years of the nineteenth century. Industry was in a stage of transition, and inevitably suffered from the change. It was only at a later date that the idea of mutual aid in industry revived, and the trade union--a new form of association adapted to the new situation--arose as the lineal successor of the old society of artisans.

[=The Trade Union=]

The trade union resembles the old industrial association in general character, and in modes of action, but is much more extensive and concentrated in organization and far-seeing in management, in accordance with the vast expansion of industries and the changed relations of the workingman. The new form of association was not welcomed by the employers, who scented danger afar. They attacked it in the press, in the legislature, and by every means at their command. But the trade union had come to stay, hostile legislation failed to destroy it, and the opposition of employers to check its growth. It slowly, but steadily advanced, increased in strength and unity of purpose, gained legislative recognition, and in time became a legally protected institution and one of the powerful forces in modern industry.

The trade union had its origin in England, in which country the modern conditions of industry rapidly gained a great development. It appeared in a crude form near the end of the eighteenth century, one of the earliest societies known being the "Institution," established by the cloth-workers of Halifax in 1796. Many other unions were formed during the first twenty years of the nineteenth century, in spite of persecution and attempts at repression. It was not until 1825, however, that they gained legal recognition, and not until 1871 that they obtained permanent protection for their property and funds. Some of the earlier unions still survive, though many changes have taken place in their constitution.

[=Progress and Purpose of the Unions=]

In 1850 a new departure was taken, in the formation of the Amalgamated Society of Engineers, one of the most perfect types of a trade union in the world. It is organized for the mutual benefit of its members as well as for protection against oppression by employers, and the annual tax upon its members for various purposes amounts to as much as $15.00 per year, often more. Others of the same character followed, and in all there are about 2,000 trade unions in Great Britain and Ireland, with a membership of nearly 2,250,000, and an annual income of about $10,000,000.

The purposes of the union are various. The mutual aid and benefit feature is secondary to the protective purpose, which is to secure the most favorable conditions of labor that can be obtained. This includes efforts to raise wages and to prevent their fall, reduction of hours of labor and prevention of their increase, the regulation of apprentices, overtime, piecework, and many other difficulties which arise in the complicated relations of labor and capital.

It is generally acknowledged that the trade union has reached its highest state of organization and power in Great Britain, and that the British workman, in consequence, controls the situation more fully than in any other country. This form of organization has only of late years appeared on the continent of Europe, freedom to combine have been denied to workmen in most countries until late in the century. There are excellent unions in the Australian colonies, both these and those of the mother country being superior in organization and influence to the trade unions of the United States, though those of the latter country have gained much in power and cohesion in recent years.

[=The International Workingmen's Association=]

The first great combination of all trades was the International Workingmen's Association, founded in London in 1847, and intended to combine the industrial classes throughout Europe. Dr. Karl Marx gave it a definite organization on the continent in 1864, but it was there warped widely from its original purpose, became a field for anarchists, and came to an end in 1872. In the United States a general organization called the Knights of Labor was formed in 1869, and at one time had a membership of a million, but has now greatly decreased, being largely replaced by the American Federation of Labor, an association of trade unions of very large membership. Of single trade organizations probably the most powerful in this country is the Brotherhood of Carpenters and Joiners, with more than 60,000 members. The International Typographical Union, the oldest in America, has a membership of over 40,000, and there are many others of great strength.

The weapon of offense with which the labor organization seeks to gain its ends is the strike, in which the artisans quit work for the purpose of forcing employers to grant their demands, and endeavor to prevent others from taking their place. The reverse of this is the lock-out, an expedient adopted by capitalists for the purpose of obliging workmen to yield to their demands.

[=The System of the Strike=]

[=Great American Strikes=]

During the century under consideration strikes have been very numerous both in England and America, many of them of great dimensions and serious results. It must suffice to speak of some of the more important of those within the United States. In 1803 occurred a strike of sailors in New York, often spoken of as the first strike in this country, though there seem to have been several in the preceding century. A strike of Philadelphia shoemakers took place in 1805 and one of New York cordwainers in 1809, while as time went on strikes became frequent, with varying results of success and failure. Violence was at times resorted to, and in the early days strikers were tried for conspiracy. As population increased and labor associations became stronger, strikes grew greatly in dimensions, and were frequently attended with bloodshed and destruction. Such was the case with the famous railroad strike of 1877, which interrupted traffic over great part of the country for a week, and resulted in acts of sanguinary violence at Pittsburg. There a lawless mob joined the strikers, the militia were attacked and lives were lost, and the railroad buildings and cars were burned, the total loss being estimated at $5,000,000. The coal miners of Pennsylvania joined the strike, and in all about 150,000 men stopped work.

Since that date strikes have been very numerous and some of them of great proportions. Among these, one of the most notable was that which began in Chicago on May 1, 1886, in which fully 40,000 men took part. On the 4th, when the disorder was at its height, a meeting of Anarchists was held, in the streets, which the police attempted to disperse on account of the violent and threatening language used. While doing so a dynamite bomb was thrown in their midst, which killed several and wounded about sixty of the officers. This action was denounced by workingmen throughout the country and excited general horror and detestation.

Another serious strike took place at the Carnegie Steel-Works, at Homestead, Pa., in 1892, which was also attended with bloodshed, the workmen firing on a force of detectives hired to protect the works. The disturbance became so great that the whole military force of Pennsylvania had to be called out. Two years afterwards Chicago was the scene of a great railroad strike, directed against the Pullman Car Works of that city. The movement of trains was greatly interfered with, and in the end President Cleveland sent United States troops to Chicago to maintain order and protect the movement of the mails.

[=Arbitration and Profit Sharing=]

That the difficulty between capital and labor will ever be settled by the strike and the lock-out cannot be expected, though these methods of warfare have had the effect of producing some degree of wholesome fear on both sides, and of rendering each more likely to offer concessions than to indulge in a costly and doubtful strife. A disposition to replace violent measures by peaceful arbitration is growing up, while in some instances employers have agreed to share a portion of their profits with their employees. This system of profit sharing, originating in France, has been extended to other countries, and appears to have proved very generally successful. Workmen act as if they were real partners in the business, and had their own interests to serve. They do more and better work, and are more careful in the use of tools and materials, so that in some instances the increased profit arising from their carefulness and diligence has covered their share of the proceeds, leaving that of their employers undiminished. Strikes have almost ceased to exist in such institutions, and the future of profit-sharing is full of promise.

[=Experiments and Theories in Economics=]

But expedients which leave the existing system practically unchanged can have only a temporary and partial utility. The cause of the difficulty appears to lie deeper and to call for more radical changes. It is not easy to believe that a system of perpetual protest and frequent strife is a natural one, and it seems as if it must in the future be replaced by some more peaceful and satisfactory relation between capital and labor. During the nineteenth century the labor problem has given rise to a number of experiments and theories looking towards its solution, an account of which is here in place.

The chief of the experiments alluded to is that of co-operation, the association of workingmen as producers, a democratic organization of labor calculated, if successfully instituted, to bring the present system to an end, and replace it by one in which the division into employer and employee, capitalist and artisan, will cease to exist, each workman embracing both of these in his single person, the combined property of the group representing the capital of the concern and the profits being equitably divided. This seemingly promising solution of the problem has not hitherto proved satisfactory in practice. In most cases experience and skill in management have been wanting, and the placing of ambitious and influential members of the association in the positions of business manager and financier, regardless of their adaptation to these duties, has wrecked more than one promising co-operative concern.

[=Co-operative Associations=]

But while most of such manufacturing associations of workingmen have failed, some have succeeded, and the story of the latter seems to show that there is nothing false in the principle, the failure being due to the results of injudicious management, as above indicated. The successful associations have accumulated large capital, pay good dividends, and are noted for the honesty of their operations and the unusual industry of their members, each of whom feels that the profit from increased or superior product will come to himself. Of co-operative institutions now in existence, the most famous is that of the Rochdale Pioneers, founded at Rochdale, England, in 1844. This association, organized by twenty-eight poor weavers with a capital of twenty-eight pounds, at first as a distributive enterprise, is now a rich and flourishing institution, which adds manufacturing to its distributive interests.

At first these poor pioneers, who had very slowly collected their small capital of one pound each, opened a store to supply themselves with provisions, having only four articles to sell--flour, butter, sugar and oatmeal. They limited interest on shares to five per cent., and divided profits among members in proportion to their purchases, a system which proved highly advantageous. From the first this organization was successful, and by 1857 it had 1,850 members, a capital of £15,000, and annual sales of £80,000. Since then its growth has continued rapid, and it is now in a high state of prosperity.

There were co-operative societies in Great Britain long before the date of this, and many have been started since, nearly all of them being in the form of co-operative stores, of which the Army and Navy Stores are among the most flourishing. There are now in that country probably over 1,500 of these associations, with a million of members, a capital of more than £10,000,000, and profits of over £3,000,000 annually. In 1864 there was founded at Manchester a Wholesale Society to supply goods to these stores, and a second at Glasgow in 1869--the two being now practically one institution. This society purchases and forwards goods, and owns a number of steamships of its own, which traffic with cities on the continent. Its manufacturing industries are also large, including boot and shoe factories at Leicester, soap works at Durham, woolen-cloth mills at Batley, and other factories elsewhere. There are in addition mills and factories carried on by retail societies, the annual production by these associations being probably considerably over £5,000,000. It will be perceived from the above statement that the workmen's co-operative enterprises in Great Britain comprise one of the important institutions of the country, one that has become firmly established during the latter half of the nineteenth century, and may grow enormously in importance during the twentieth. It is likely to play a prominent part in the solution of the labor question.

[=Co-operation in Europe and the United States=]

In no other country has this form of association flourished. In France profit-sharing has made a much greater progress, and ordinary co-operation has met with slight success. In Germany and Austria co-operation has taken the form of people's banks. These originated in 1849 at the little town of Delitzsch, in Saxony, and have flourished greatly, there being several thousand societies in the German states, with probably two million members and a very large business. There are also in Germany a considerable number of productive associations and co-operative dairies, while the latter have greatly flourished in Denmark. In Italy the people's banks have made marked progress, and there are several hundred co-operative dairies, bakeries and other enterprises.

Co-operation has made no decided progress in the United States, it being most developed in New England, where it takes the form of associations of fishermen, of creameries and banks. In Philadelphia co-operative building societies have provided workmen with more than 100,000 homes. The co-operative store has not flourished, and associated manufacture has made little progress, though profit-sharing has been introduced into many large stores and factories.

[=The Theories of Socialism and Anarchism=]

Such is the status of the experimental development in associated manufacturing and distributive enterprise. The theoretical phase of this question has gone much further, and has given rise to an extensive popular movement whose final outcome it is not easy to predict. This is really, in its way, an extension of the co-operative idea, being an attempt to make co-operation national, the entire nation becoming one great co-operative association, and the functions of government being extended to cover production and distribution of the necessaries of life, in addition to its present duties. This theory is most commonly known as Socialism, though also entitled Nationalism and Collectivism. Its main purpose is industrial reform, but it seeks to produce by political means what the trade union has attempted to do by non-political agitation. An opposite doctrine, which has many adherents, is known as Anarchism, whose platform contemplates the overthrow of existing institutions and the rebuilding of society from its elements upon the basis of local grouping. This doctrine has attracted to itself much of the ignorant and violent element of the European populations, and has been seriously discredited by the outrages committed by its members. Prominent examples of these were the massacre of the police in Chicago, already mentioned, the excesses of the Commune in Paris, and the acts of violence of the Russian Nihilists. The theory itself is philosophical, even if impracticable, and has been advocated by a number of able men who cannot be charged with its excesses.

[=Communistic Societies=]

Returning to the doctrines of Socialism, it may be said that it was preceded by the conception of Communism, or equal distribution of the proceeds of labor among the members of a community. This has long since passed from the stage of belief to that of experiment, many Communistic societies having been founded in both ancient and modern times. The Essenes, prominent in Palestine in the time of Christ, were one of the ancient examples. In modern times the United States has been a favorite field for the founding of Communistic societies, probably from the reason that they were less likely to come into conflict with existing institutions than in Europe.

The best known of those societies of a religious character comprise the Dunkers, founded at Ephrata, Pennsylvania, in 1713; the Harmony Society, established in 1824, and still in existence at Economy, near Pittsburg; the Separatist Community, established at Zoar, Ohio, in 1817; the Shakers, first organized at Watervliet, N. Y., in 1774; and the Perfectionists, founded by John H. Noyes, at Putney, Vermont, in 1837. Several others, less well known, might be named, but it must be said that the persistence of several of these organizations has been mainly due to the religious enthusiasm of their members, and is in no sense a proof of the economic correctness of their principle. Many of them require celibacy of their members, while the Perfectionist Society practiced free love until broken up by the strong disapproval of the community.

[=Secular Communistic Experiments=]

In addition to these religious experiments in Communism, a number of secular communistic societies have been founded in this country. Prominent among these was that established by Robert Owen, in 1824, at New Harmony, Indiana. Every effort was made to promote the success of this enterprise, and ten other communities on the same principle were organized elsewhere, but they all failed in a few years, and the Owenite movement came to an end in this country by 1832.

A second example was the celebrated Brook Farm enterprise, first suggested by Dr. Channing, and founded at West Roxbury, Mass., in 1841. It included the most remarkable group of men and women ever embraced in such an undertaking, among its members being Emerson, Hawthorne, Dana, Ripley, Alcott, and other well known literary men. Its business management was anything but practical, and it came to an end in 1847. The form of community suggested by Fourier, the French theorist, was abundantly tried in the United States, where thirty-three communities or "phalanxes" were founded in the years 1842-53. They had all failed by 1855.

The result of these efforts to establish societies where everything shall be in common between the members, of which hundreds have been founded and none persisted for more than a few years, except where sustained by religious fanaticism, does not speak well for the practical nature of communism. The mass of the people have always kept away from it, and its abrogation of the principle of personal reward for personal effort seems likely to prevent its ever becoming successful.

[=Development of Socialism=]

Socialism was originally similar to Communism, but as now understood and advocated differs essentially from it, since the principle of equal division of property or products is no longer maintained. Nationalism, or the ownership of all productive property and all manufactures and their products by the nation, with the complete distribution of profits among the people, on the basis of the value to the community of the labor or service of each person, is the existing form of Socialism. Originated and developed within the nineteenth century, it has now become one of the prominent social and political movements of the age, and some brief description of it is here in order.

France is the birth place of Socialism in its primary form. Two writers, Mably and Morelly, advanced a scheme for a communistic reorganization of society about the middle of the eighteenth century, and in 1796 a communistic conspiracy to revolutionize the government, organized by a man named Babeuf, at the head of a society called the Equals, was discovered and suppressed. Later arose Robert Owen in England, with his communistic scheme, and St. Simon and Fourier in France, whose plans were only in part communistic. A more properly Socialistic movement was attempted by Louis Blanc in Paris during the revolution of 1848, when national workshops for the industrial classes of France were established. In Paris 150,000 workmen were employed in these shops, but they were closed after a brief trial. Their failure, it is claimed, was largely the result of bad management. Of recent English Socialistic movements may be named that of Maurice and Kingsley, the originators of Christian Socialism, which continues to exercise an important influence.

[=Lasalle and Karl Marx=]

After 1850 the socialistic movement temporarily declined in France and Great Britain, but it gained a great impetus in Germany, under the teachings of certain able and skillful advocates. German Socialism first became active in 1863, through the efforts of Ferdinand Lasalle, though it had earlier supporters. He proposed to establish a German workman's republic, with himself as president; but ended his career in the following year, being killed in a duel. After his death his system of "social democracy" fell under the control of the notable Karl Marx, a writer of original genius, to whom Socialism as it exists to-day is largely due. The International Association of Workingmen, as reorganized by him in 1864, changed its purpose from an industrial to a political one, and soon became a threatening compound of dangerous elements. It was socialistic in aim, having, below its declared purpose of the protection and emancipation of the working classes, schemes for the abolition of the wages system, the state control of all property, and the grading of compensation for labor on the basis of time occupied, instead of on the more logical basis of ability and industry shown and value of product.

[=The Literature of Socialism=]

Karl Marx's famous work "Capital," is the ablest and most logical exposition of the socialistic theory yet produced, and has exerted a powerful influence on recent thought. It set in motion a great political and social movement which has grown with extraordinary rapidity, in spite of repressive laws against it, and has given rise to a large number of volumes dealing with the subject, some of which have had a phenomenal sale. The popular little volume entitled "Merrie England" is said to have sold to the number of considerably more than a million copies, while Bellamy's "Looking Backward," which advocates a communistic organization of society, has had a sale of several hundred thousands.

[=Growth of the Socialist Party in Germany=]

In recent years Socialism has spread upward from the working classes and gained many advocates among the leaders of thought. It has had a considerable development in all western Europe, and particularly in Germany, in which country the Socialists form a powerful political party, which as early as 1887 polled eleven per cent. of the total vote, and gained a considerable membership in the Reichstag. By 1890 its vote had so largely increased that liberalism obtained a majority in the Reichstag. At the end of the century the Social Democrat party had 56 members in the Reichstag as contrasted with 54 members of the German Conservatives. The remainder of the 396 members were divided among a number of parties, the Clericals or Centre being the strongest, with 104 members. As will be seen from these figures, Socialism has made a remarkable advance in that country, having within less than forty years become a power in Parliament. The time may come in the near future when it will be the controlling party in legislature and government.

[=The Populist Party in the United States=]

In the United States Socialism has grown with less rapidity, yet within recent years it has sprung into political importance in the rapid growth of the Populist party, organized in 1892. This new organization gained five senators and eleven representatives in Congress in the year of its origin. In 1896, while its success was no greater, it had the striking effect of gaining the adhesion of the Democratic party, not only to the Free Silver plank in its platform, but to some of its more socialistic features. There are probably very many citizens of this country of strongly socialistic views who are opposed to the radical measures advocated by the Populists, and the real strength of Socialism in the United States may be much greater than is commonly supposed. It is shown in other directions than that of party affiliation, and at the end of the century was particularly indicated in the movement for the municipal ownership of street railways, gas works, and other forms of what are known as public utilities. This movement has gone farther in Europe than in this country, several nations owning their railway and telegraph plants, while municipal control of street railways and other public utilities is becoming general. In short, it would be difficult to point to a popular movement in the history of the world that has made a more rapid and substantial advance than has Socialism within the past forty years.

[=The Development of the Trust=]

As the nineteenth century approached its end a new element in the economic situation, which had been displaying itself in some measure for a considerable number of years, suddenly assumed a striking prominence in the United States, and remarkably transformed the industrial situation. This was the element of the combination of distributive and manufacturing enterprises, shown at first in the growth of the department stores and the pooling of manufacturing interests, and later in the formation of trusts and monopolies, powerful corporations of industrial interests, which assumed gigantic proportions in 1898 and the succeeding years.

Several of these great organizations, absorbing all the factories or plants of the special trades concerned into single vast corporations, have been in existence for years. Most prominent of these are the Sugar Trust and the Standard Oil Company, which have eliminated the element of competition from those industries and accumulated their profits in the hands of a few great capitalists.

The complete control of important productive interests gained by these groups of capitalists has instigated those connected with other lines of production to similar methods, and the formation of trusts has gone on at an accelerating ratio, until all the great and many of the minor industries of the country have formed trust organizations, while a large number of establishments have been closed, and thousands of workmen and other employees dismissed.

[=Probable Effect of Trusts=]

The result of all this has been to produce a state of affairs in which competition, so long considered the life of trade, is practically eliminated from many branches of industry, while the opportunities for individual enterprise, which have been active for so many centuries, have in great part vanished. An economic situation seems at hand in which the mass of the community will be obliged to assume the position of employees, the class of employers being reduced to a few very rich men, absorbing the profits of industry and holding the remainder of the community in a condition of galling servitude.

[=To What the Trust Must Lead=]

Such an undesirable condition of industrial affairs as is here threatened has naturally aroused a strong feeling of opposition, and the forces of the community are being marshalled to prevent such a radical revolution in industry. Just how the brake is to be applied is not clear. It is not easy to prevent capital from pooling its forces, and legislation may fail to find a remedy which will reach the root of the disease. Yet a cure must come, in one way or the other--the trust movement being either reversed or carried forward to its logical conclusion. It is being widely recognized and acknowledged, even by some of the trust potentates themselves, that the movement thus inaugurated is likely to hasten the advent of socialistic institutions. The abolition of individual enterprise under the trust must eventually become almost as extreme as it would be in a socialistic community, and if the trust movement continues the principal objection to socialism will be removed. It must be evident to all that the tyranny of a group of irresponsible and grasping capitalists, ambitious to obtain enormous wealth, will be much greater than that of officials chosen as the servants of the people, and subject to removal at their will, can ever become.

[=An Industrial Revolution=]

The Roman despot wished that all the Roman people had but one neck, that he might cut it off with a single blow. Capital is in a measure reducing itself to this condition, and the people may in time cut off its head in a similar manner. It is easier to deal with the few than with the many, and the relation into which capital and labor has now come can have, sooner or later, only one or the other of two endings. As above said, the evolution now in operation must go forward or go backward; go backward until the former state of affairs is regained, or go forward until industrial slavery grows complete, in which case the people will, in the end, inevitably rebel. It is impossible for such a movement to stop half way, one result or the other must inevitably come, either a return to individualism or a progress to collectivism. Which it shall be depends upon the people themselves. The power is in their hands the moment they elect to cast aside their differences and act in concert, and the presence of a great danger or an intolerable situation is the one thing to bring them to this common action. In such a case it will rest with themselves which status of industry they prefer, the old state of individualism and competition or a new state of collectivism and industrial alliance. Though it is but dimly recognized, the world of industry is in the throes of a revolution, the final result of nineteenth century development, and it must be left for the twentieth century to decide what the outcome of this revolution is to be.