Popular Science Monthly/Volume 52/April 1898/An Industrial Object Lesson

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APRIL, 1898.

By S. N. D. NORTH.

THE past year was one of unusual disturbance in England, in the relations of labor and capital, and the chief of these industrial conflicts possessed a significance never anywhere surpassed. The lockout of the engineers—we call them machinists in this country—marks the new alignment of organized labor and organized capital—what may be called the secondary stage of the labor question—more sharply, more tensely, than ever before. A glance at the underlying causes of the engineering lockout will afford a clear conception of the form in which "the labor question" presents itself for the solution of the twentieth century.

There have been strikes that involved a larger number of workers, as the great coal strike of 1893, and the London dock strike; strikes that have lasted longer; strikes that have been costlier; strikes that have developed more bitterness of feeling. There has been no previous collision which, brushing aside all questions as to wages, reached down so closely to the root of the problem, and spread open to public knowledge the real essence of the difference which threatens the productive forces of modern times. The engineers' strike furnishes a concrete illustration of the immensity and the perplexity of the unsettled issue of modern industrialism.

Broadly speaking, labor strikes are of two kinds. The great mass of them, hitherto, have belonged in the simpler group, and have had to do with the wage question only; they are simple, however serious and complicated they may outwardly be, because they turn upon a single economic fact. When employers insist that certain rates of wages are necessitated by existing business conditions, and the employed deny this, there is a definite fact at issue; and such strikes are coming more and more to be settled in accordance with what that fact is found to be. It is not often that a strike succeeds, when the employers are able to show that the wages demanded can only be paid by carrying on business at a loss. We can prognosticate with certainty about capital, that it will not carry on business indefinitely at a loss—if for no other reason, because it soon eats itself up. Another thing quite as certain is that capital will not indefinitely prolong a conflict with labor at a time when it is possible to effect adjustments by which it can continue to produce at a fair profit. These are two laws which experience has evolved out of this class of labor disputes.

The engineers' strike presented an entirely different phase of the labor problem. It was never a direct quarrel over dollars and cents; the question of wages, while indirectly involved, was subordinated to another, which, if we analyze it carefully, we shall find to be this: Which of the two parties in interest shall control the business that labor and capital jointly carry on? The labor problem in England has reached precisely this stage, and the engineers' strike was, in fact and in essence, a contest for the control of the management of the works, and the conditions under which these enterprises shall be carried on. This is a very broad way of stating the case, but it is essentially fair to both parties. It is always easy to recognize, in any labor dispute, the difference between contention for redress of legitimate grievance, as to wages or otherwise, and contention for control and direction and limitation over the management and conduct of manufacturing enterprises. This difference has distinguished and differentiated the engineers' strike from most of the great labor conflicts which have preceded it in England. It was, from start to finish, a contest over a great economic principle—a principle which lies at the foundation of modern industrialism. The whole long struggle has been singularly free from any collateral questions tending to hide or minimize its real significance. Both sides understood it; both prepared for a battle royal; both were ready to wage it to the bitter end; and thus it has been a dogged, determined, remorseless test of endurance over a vital issue of business economics, while the world looking on has only vaguely sensed its true meaning, or has missed it altogether.

It is impossible not to admire the splendid fidelity with which the engineers carried themselves through the six months in which they locked horns with their employers. Of all the labor organizations in England, the best equipped for such a struggle, both in men and in money, was the Amalgamated Society of Engineers. The organization is quite the aristocracy of English trade unionism. The machinist trade involves a high, grade of intelligence, and its skilled operatives earn the best wages going. Their organization is one of the oldest, most compact, and best disciplined in the island. Its leaders are men of brains, discretion, and nerve. In deliberate preparation for this great contest, the organization had accumulated a maintenance fund of nearly two million dollars. They have been sustained by many evidences of popular sympathy, including generous contributions to their funds, and they have been careful to so conduct themselves as to win rather than alienate public support.

They have regarded themselves as the chosen champions of what is known as the "new unionism," and they knew that the whole status of trades-unionism in the immediate future of English industry turned upon their success or failure. It has thus been, on the part of the engineers, something in the nature of a vicarious struggle. They were giving battle for an abstract proposition, deemed by them vital to the future well-being of organized labor, not merely or chiefly their own group, but all branches of organized labor in England and everywhere. However widely we may differ with these men, however impossible and impracticable we may regard their demands, we must feel a genuine admiration for the grit and doggedness with which they have carried on a battle which for many months past has been seen to be hopeless. If they have failed, and failed disastrously, it is only fair to say for them that they have failed through no lack of courage or endurance.

On the other hand, let us look at the attitude of the employers, and the reasons which underlie it. From their point of view it was a struggle for existence, for the right to continue the industries in which their fortunes and future are embarked. To fully understand this it is necessary to explain the ostensible and the real reason of the lockout. It was precipitated on July 24th last, by the formal demand of the London branch of the engineers for the eight-hour day. This demand was the logical aftermath of the successful strike of the engineers for the nine-hour day back in 1870; the Amalgamated Association having been successful in that movement, it was the natural agency through which the eight-hour movement, upon which English trades-unionism has now resolved, should be pushed to an issue. The original demand for eight hours was confined to the London shops in accordance with the well-known trade-unionist plan of campaign. The iron masters of the provinces, realizing that the success of the movement in London must inevitably extend the eight-hour day to all the iron establishments of the kingdom, made common cause, and combined to lock out their employees pending the settlement of the London difficulty. The collision being inevitable, they determined to force into it certain other questions, which the engineers had shrewdly kept in the background, but which were latent in the eight-hour movement, and, from the employers' point of view, inseparable from it—questions which have long been irritating, and the conflict over which could not long be postponed.

In the judgment of the iron masters these questions were lifted far above the range of a mere labor dispute, and involved the broad and national question of the continuance of Great Britain in the race of international competition. We need not enlarge upon the reasons which convince so many Englishmen, and particularly those who are in the thick of the fight, that England's industries and commerce, not merely foreign but domestic, are seriously threatened by the competition of the continental manufacturers, as well as those of the United States. They cite the longer hours, the lower pay, and the superior technical education of continental workmen as three reasons why the products of the latter are gradually superseding goods of English origin in the world's neutral markets. They cite the larger product from improved machinery, and the superior application of this machinery, both on the continent and in the United States, as constituting economic advantages against which they are no longer able to successfully contend. They urge that in the long run these superior advantages mean the gradual surrender of Great Britain before a competition ever closer and fiercer, in which a fraction of difference in the cost of production is sufficient to turn the scale. From their point of view the introduction of the eight-hour day, as against ten and even twelve hours on the continent, would mean industrial hari-kari.

But the complaint reaches further: it insists that English trades-unionism, as developed in the iron trade particularly, is a handicap to industrial progress which is bearing fruit in the continual loss of trade, and the extinction of profits in the conduct of business. Trades-unionism has aimed steadily and successfully at a larger and closer control over the conditions under which work is done in the shops. The masters had lost control over the management of their own business, and, no longer able to adapt themselves to modern methods and economics, they found themselves in a state of dry rot, extrication from which was only possible by heroic measures.

Doubtless there is a degree of exaggeration in this picture, as drawn by the iron masters. Nevertheless, it is true that English trades-unionism has become so strongly organized and intrenched, and has followed lines of policy so aggressive and so potent, that it has long been an open question in England whether the internal management of the shop is not more under the domination of the union than of the employers. Until a comparatively recent date the consequences of suck a situation have not been strikingly apparent. But the mechanical advances in all branches of iron manufacture during the last few years have been marvelous, and the consequent economies equally marvelous. The trades-unionists have carried on a silent, secret, and to a large degree a successful movement against the efficient introduction of these new methods in the shops under their control. There is no good reason to doubt the statement, repeatedly made by the iron masters, that Great Britain is, in consequence, far behind the competing nations in many forms of iron manufacture, in efficiency of equipment, and in product per man.

So far as this fact is due to English trades-unionism, it must be regarded as a triumph for that organization; and it is somewhat difficult to get at the philosophy by which organized labor justifies itself in standing athwart the pathway of mechanical progress. At its basis undoubtedly lies the inherited antipathy of the English workingman to labor-saving machinery. He possesses this antipathy to a degree and extent unknown in any other country. It has come down to him through the generations, and its tenacity is one of many evidences of the narrowing influence of insular conditions. The time has long since passed when this antipathy takes on the form of open violence, the smashing of machines, the burning of mills, and the maltreatment of inventors—things common enough in the days of the Luddites, seventy-five years ago. The modern manifestation of this inborn and inherited antipathy to labor-saving machinery is a species of moral boycott—indefinite, intangible, indirect, felt rather than seen. It frequently takes the form of union regulations, under which the mechanic restrains himself from turning out more than a given product in a day, irrespective of the possibilities of the improved machine he operates. The engineers' strike has inspired a great mass of literature showing how the enforcement of these regulations has tended to limit output, and thus handicap English manufacturers in their struggle against foreign competitors. Here is one of many illustrations given by Colonel Dyer, the chairman of the Federated Employers, in a recent magazine article:

We have a very large boring machine at Elswick; this boring machine is eighty feet long. We do very rough work on it—i. e., we take the center out of the shaft by means of a trepanning tool. We took the center out of a shaft the other day seventy feet long. The whole center was trepanned out. We selected a man for working the machine; a man came round, a very intelligent-looking man, and that was all we had to judge by—we can not ask him what society he belongs to. We asked him if he could work this machine. He said of course he could. We put him on the machine, and he worked it about six or seven months. We could never get more than four or five inches an hour out of the machine. We pressed him, and begged him to do better; we were very busy at the time, but we could never get above four. At last we could go on no longer; we knew that the machine should do more, and we said the machine was not giving satisfaction, and he was discharged. We then selected a boy, a very intelligent-looking young fellow, but he knew absolutely nothing about machines. We said, "Will you learn this machine?" He said he was most anxious to do so. He buckled to, and the lad in three weeks had increased the production of the machine up to six inches an hour, and the other day I got a note that the machine was doing eleven inches an hour.

Hiram S. Maxim, the great gun maker, who has had experience in manufacturing in three countries, declares that a given amount of labor in the iron trade produces a smaller product in England than in France, Germany, or the United States; and that a given machine has a greater productive capacity in each of these countries, and particularly in the United States, where the system of payment by the piece generally exists. The Amalgamated Society has generally successfully resisted the piece-payment system, and has managed in many other ways to practically control the internal management of the shop.

In a word, the purpose of the manufacturers has been to so change the basis of their industry that they can increase production by reducing costs, not through reduced wages, but through the more complete utilization of modern mechanical inventions. They have insisted that the individual workman would, in consequence, earn much higher wages. The movement on the part of their employees was one to limit production by the shorter working day and by the increased cost of increased overtime work at overtime wages. The ends aimed at were diametrically opposite, and the intensity and the prolongation of the struggle are thus explained. It was an issue which admitted of no compromise. A truce might, indeed, have been patched up, and the battle declared a draw; but any conclusion short of the complete surrender of one side or the other would have left the vital issue as unsettled as at the start.

As that issue has been stated, the impartial student finds it difficult to understand why it should exist at all. If the iron masters are right in their contention that reduced costs of production, through greater machinery efficiency, are necessary for the preservation of English manufacturing against foreign encroachment, the welfare of their workmen is as vitally involved as their own. This is only another way of stating the time-worn truism that the interests of capital and labor are identical, in any true analysis of their relationship.

But the English trades-unionist does not see the matter in any such light; nor is his point of view at all obscured. Apart from the latent antipathy to labor-saving machinery, which is not avowed, is the dominant idea, strongly accentuated in all unionist literature, that there is a given amount of work to be done in this world, and not enough to go around; that the unionist, by arbitrarily limiting individual output, can thereby increase the demand for labor, and thus increase the number and the wages of the employed. This postulate of trades-unionism is as old as trades-unionism itself. It has a basis in humanitarianism which renders it praiseworthy as an abstract proposition. But it is an abstraction which belongs to the past century; which had its origin in the days when England held undisputed supremacy in the industrial world, and no combination of events seemed likely to dislodge her from that vantage. It has become an anachronism, just as England's supremacy has become a myth; and the same causes have produced the two results. If the commercial isolation of nations which formerly existed continued, the postulate of the engineers would be understandable. If English workmen still made machines for all the world, these hard-headed workmen might well have staked their all upon such an issue with hopeful hearts. But the direct results of their six months' idleness help to illustrate how far beyond their position the world has moved. The suspension of work has been an enormously expensive affair, not merely to the masters and the men, but to the nation. A great hole has been made in British commerce, and it will never be filled. Orders for machinery which the idle works in England could not fill have gone to the continent, and in many instances have come to the United States. The work has been done as well as in England; in most instances it has been done cheaper than England could have done it. The trade thus lost has gone for good. The engineers have not merely lost six months' wages; they have seriously crippled the wage-paying power of their industry. From their own standpoint, instead of increasing the opportunities for labor in England, they have reduced them. The abstract thing they fought for they have lost; but their ultimate loss would have been even greater had they won their battle instead of losing it.

The difficulty with the English trades-unionist view, then, is the failure to realize that the march of civilization has made the labor question an international question. Their contest was not so much with their employers as with their fellow-laborers in other lands. It is the competition of the latter which makes it impossible for the English iron masters to grant the eight-hour day, or to drag behind the rest of the world in the application of labor-saving machinery.

One writer, commenting upon the outcome of this strike, declares that trades-unionism has lost by its defeat all that it has gained by fifty years of constant contest. On the contrary, it would seem possible that it may gain, by reason of its defeat, a clearer conception of the real forces against which labor has to contend, in the realignment of industrial conditions. If this shall come, the gain will be greater than the loss. At the bottom of the engineers' movement was a remarkable misreading of the operation of economic cause and effect. The labor question of to-day is not the labor question of fifty years ago; it turns now on broader considerations than those which local environment can control. It is no longer a question that has chiefly to do with the relative share of the proceeds of industry which shall go to labor and to capital. In the preliminary stages of the evolution which has brought the factory system to its present perfection, this was practically the only question which underlaid the strike; and it may safely be conceded that in many instances of conflict which arose over this question the strikers were right, even when they failed. The law of industrial competition under which this evolution has progressed has so operated that profits have decreased as wages have increased; and so rapid has been the evolution, so strenuous has become the competition which the increase of capital has brought about in all industries and in all manufacturing nations, and more particularly in England, that the point is already reached where the problem has come to be largely one of how to keep the earnings of capital and the earnings of labor in that status of equilibrium which shall be equitable to both. It is a development in industry which was not dreamed of when trades-unionism was getting under way; a development the end of which no man can to-day foresee; a development which has brought about an increase in the producing capacity of the world which has far outstripped the increase in population, and with which consumption can keep abreast only in spasms and by jerks. Under these new conditions, wherever and whenever an oligarchy of labor succeeds in so fortifying itself that it can establish terms under which it is no longer possible for the capital employing it to earn a fair return, then it will have killed the goose which lays the golden egg.

The English engineers resolutely shut their eyes to this aspect of the case. From their point of view it had nothing to do with the controversy. From the masters' point of view it was all there was of the controversy. To the masters it was purely an economic question; to the engineers it was one which vitally involved the social advance of the wage-earning classes. It is not necessary to believe that this social advance and economics are hopelesssly at variance in the present stage of industrialism. It is better to say that while employers have much to learn from the humanitarian point of view, trades-unionism is equally in need of instruction from the economic point of view.

Does this great strike throw any new light upon the possible solution of such troubles for the future? Unfortunately, the method of settlement of labor disputes by arbitration has not gained prestige from the experience, but has rather lost it. Arbitration was never more advantageously introduced than when the initiative was taken in the engineers' strike last November by the Right Hon. T. C. Ritchie, president of the Board of Trade, and one of the most influential members of the Salisbury Cabinet. It was left for him to arrange the "pour parlers" of the conference, and the moral influence outside the committee room for a settlement was tremendous. The only result was to strengthen the position of the engineers, for they shrewdly consented to submit to their union certain propositions made by the employers, and they were rewarded by a vote of forty thousand in opposition, with only one hundred and fifty in favor of acceptance. If this had been purely a question of wages, arbitration would have doubtless settled it. Wages involve questions of fact, and conference and discussion are increasingly successful in bringing employers and employed together on a basis which knowledge of the facts shows to be mutually equitable. But bound up in this controversy was the whole question of the economic conditions of modern industrialism, both national and international, as well as the question of that indefinite, indefinable line where the rights of the employer end and those of his workmen begin. The more the conference discussed these questions, the farther apart the parties to it found themselves. They are beyond settlement, except a temporary armistice, by any scheme of arbitration under any auspices, private or governmental. There is no middle ground, in such a dispute as this one was.

But time and the sequence of events will work out a solution, as has been the case with all the great problems which have successively confronted civilization. We can not see into the future, nor can we even vaguely outline the ground upon which employer and employed will ultimately agree to live at peace with each other. But we need not despair of its finding, nor need we fear that it is hopelessly distant. The world moves faster in a modern decade than in three centuries of the middle ages. A hundred years ago the world did not dream of such a thing as the labor question in the form in which it now presents itself. This present phase is only a transitional episode of conditions quickly developed, but not yet sufficiently advanced to have worked themselves into their final forms. Every great controversy like the engineers' strike throws a flood of light upon the problem by bringing all its elements into clearer relationship, and unconsciously leads the world a step nearer to the ultimate solution. An all-sufficient reason for this hopeful view of the matter is the fact that larger knowledge is always coming to those who are parties to these controversies. It is impossible to doubt that the wide diffusion of education is always helping to clarify the situation. It has done much already to relieve the industrial strike of its uglier features. Riot and bloodshed now rarely mark it where the parties to a contest are men of average intelligence and education, like the English engineers. So the evolution will advance, step by step, and point by point, until the time shall come when exact justice to all concerned, in harmonious accord with the economic laws of modern business, shall have worked itself out.