CHAPTER XXI: COOPERATION.

§ 833. Social life in its entirety is carried on by cooperation, and the use of the word to distinguish a special form of social life is a narrow use of it. As was pointed out when treating of Political Institutions (§ 441), a nation’s activities are divisible into two leading kinds of cooperation, distinguishable as the conscious and the unconscious—the one being militant and the other industrial. The commander, officers, and common soldiers forming an army, consciously act together to achieve a given end. The men engaged in businesses of all kinds, severally pursuing private ends, act together to achieve a public end unthought of by them. Considered in the aggregate, their actions subserve the wants of the whole society; but they are not dictated by an authority, and they are carried on by each with a view to his own welfare, and not with a view to the welfare of all.

In our days, however, there have arisen sundry modes of working together for industrial purposes, accompanied by consciousness of a common end, like the working together for militant purposes. There is first that mode lately described under the title of “Compound Capital”—the cooperation of shareholders in joint-stock companies. Though such shareholders do not themselves achieve the ends for which they unite, yet, both by jointly contributing money and by forming an administration, they consciously cooperate. Under another form we see cooperation in the actions Edition: current; Page: [554] of trade-unions. Though their members do not work together for purposes of production, yet their trade-regulations form a factor in production; and their working together is conspicuously of the conscious kind.

But in this chapter our topic is that mode of consciously working together for industrial purposes, which now monopolizes the word cooperation. The question here tacitly raised is whether social sustentation can be carried on best by that unconscious cooperation which has naturally evolved itself in the course of civilization, or whether it can be carried on best by this special form of conscious cooperation at present advocated and to some extent practised.

§ 834. Conscious cooperation for industrial purposes is, in the earliest stages of social life, closely associated with conscious cooperation for militant purposes. The habit of acting together against human enemies, naturally passes into the habit of acting together against brute enemies or prey. Even among intelligent animals, as wolves, we see this kind of cooperation; and it is common among hunting tribes, as those of North America, where herds of buffalo, for instance, are dealt with by combined attacks. Occasionally, cooperation for the capture of animals is of a much higher order. Barrow and Galton tell us that in South Africa elaborately constructed traps of vast extent, into which beasts are driven, are formed by the combined efforts of many Bushmen.

Among others of the uncivilized and semi-civilized there are incipient cooperations more properly to be classed as industrial. Of the Bodo and Dhimáls Hodgson says—

Similarly Grange tells us of the Nagas that—

Usages of kindred characters exist among the Araucanians, concerning whom Thompson, after speaking of their funeral and marriage feasts as open gratis to all, adds:—

In these cases, however, cooperation is merely prefigured. There is reciprocity of aid under a combined form, and the idea of exchange is dominant; as is shown more clearly in the case of the ancient Yucantanese.

But though here there is a bartering of labour, yet, as there is a working in concert, the consciousness of cooperation is nascent, and readily passes into a definite form where joint advantage prompts. A good instance is furnished by the Padam, who, as we saw (§ 783) live in a kind of qualified communism. Says Dalton—

Among a more civilized people, the ancient Singhalese, cooperation for a kindred purpose was highly developed. Tennent writes concerning them:—

Another instance occurs in North America. Says Bancroft, writing about the Papagos—

Thus it seems a safe inference that generally, among semi-civilized peoples who practise irrigation, the required works have resulted from the joint labours of many.

§ 835. When we ignore those narrow limits commonly given to the title cooperation, we see that, beyond those already named, there are many social structures which are rightly comprehended under it, and must here be noticed.

The most familiar of them are the multitudinous friendly societies, from village sick-clubs up to the vast organizations which from time to time hold their congresses. Next above the purely local ones, come those which take whole counties for their spheres; as in Essex, Hampshire, Wiltshire, Berkshire, &c., having county-towns as their centres. Larger still are the affiliated orders, numbering 70 in the United Kingdom, which take wider ranges: the largest being the Manchester Unity of Oddfellows, and the Ancient Order of Foresters, together numbering nearly a million members. Certain other bodies of kindred natures, chiefly burial societies, have extensive ramifications—“Industrial Assurance Societies,” they have been called; doing for the poor what the more conspicuous institutions for averaging the risks of fire, accidents, wrecks, &c., do for the better off. Excluding such of these as are carried on to gain dividends on invested capital, and including all which afford mutually-assured benefits, we see that they are pervaded by the spirit of cooperation: there is acting together though not working together.

As prompted by a like spirit may be named the Agricultural Credit Banks which have of late years spread in Germany, Austria, and Italy—cooperative loan societies as they may be called. Instead of borrowing money from ordinary banks or from money-lenders, the members of these bodies practically borrow from one another under the guidance of an administration of their own: the administration taking care that only such loans are made as the interests of all permit. Of course everything depends on the judgment and honesty of the officials; but granting these, such banks exhibit a form of cooperation undeniably beneficial.

Among cooperative bodies of other kinds have to be named the Russian “artels.” As defined by Mr. Carnegie of the British Embassy in St. Petersburg, quoting a native authority, one of these bodies is “an association of certain persons who unite their capital and labour, or only the latter, for a certain work, trade, or undertaking.” Each member of the association has an equal share in the duties and work; each member receives an equal share of the profits; and all members are mutually responsible for the work and conduct of each. The system is said to date from the 10th century, when certain Cossacks on the Dnieper “banded themselves together for offensive and defensive purposes and elected a chief, or ataman, for a certain fixed period, who conducted the operations of the tribe and superintended the equal division of the spoil to each member of it.” This statement harmonizes with the inference drawn above, that there is an easy transition from conscious union for militant purposes to conscious union for industrial purposes. These bodies are various in their occupations. “There are artels of carpenters, painters, blacksmiths, masons, porters, bargees, waiters, &c.,” as well as of many less general trades. Great trust is placed in them; even to the extent of placing large sums of money in their charge. One reason for their trustworthiness is that the admission of new members is jealously guarded. But judging from their traditional origin and present constitution, Edition: current; Page: [558] it would seem that these artels are really developments of the primitive compound family, the traits of which we contemplated in the chapter on “Communal Regulation,” and which once prevailed widely in the east of Europe. One of their rules was that those of their members who travelled in search of work had to hand over to the group the profits they made; and if we suppose this rule to have held after the compound household or village-community had dissolved, the “artel” would result.*

In Bulgaria there have existed, and continue to exist, though they are not now flourishing, certain kindred associations. There are cooperative groups of market-gardeners, masons, and bakers. The gardeners’ associations, Jireček says, go from town to town, and sometimes abroad, during a certain part of the year. On inland tours they number 6 to 12 in a group; on foreign tours 40 to 70. Each group is under the lead of a master or elder who keeps the accounts and acts as treasurer.

§ 836. Before passing to cooperation as ordinarily understood, there have still to be noticed some further industrial organizations which in a measure come under the title—organizations which are intermediate between those of the ordinary master-and-workmen form, and those composed of workers who are themselves masters. I refer, of course, to concerns in which profit-sharing is practised.

The adoption of this system, of which there are many instances on the Continent, while in part prompted by regard Edition: current; Page: [559] for the welfare of the workman, appears to have been in part prompted by the belief that work given in return for wages only, is relatively inefficient in respect of quantity or quality, or both; and that the tendency to be lax entails also additional cost of superintendence. Hence the conclusion is that the employer himself profits by giving a share of profits. In the words of Mr. Sedley Taylor, the modes of apportionment “fall into three categories:—1. Those which pay over the workmen’s share in an annual ready-money bonus. 2. Those which retain that share for an assigned period, in order ultimately to apply it, together with its accumulated interest, for the workmen’s benefit. 3. Those which annually distribute a portion of the workmen’s share, and invest the remainder.” M. Bord, pianoforte maker in Paris, who has adopted the first of these methods, considers the effects “extremely satisfactory.” The manager of the Compagnie d’Assurances Générales, which adopts the second method, says:

But most of the “participating houses” adopt neither immediate distribution nor remote postponement, but a mixture of the two. A part of the workmen’s share of profit is paid over to him annually, and a part invested on his behalf. This is the plan followed in the printing, publishing, and bookselling establishment of M. Chaix in Paris. The annual average workman’s dividend is 7½ per cent. on his wages; and as a result M. Chaix says—“Each one takes more interest in the work assigned to him and executes it better and more expeditiously.”

In all these cases the relation between employer and employed is like the ordinary relation, save in respect of the bonus given in one or other form. “There are, however, a few houses which admit their work-people to part-ownership in the capital, and to a share in the administrative control.” Edition: current; Page: [560] Of these the best known, of which some account was given 50 years ago in Mill’s Political Economy, is the “Maison Leclaire”—a house-painting and decorating establishment, which commenced the profit-sharing system in 1842 and developed it in various directions. Since the founder’s death it has continued to prosper, even at an increasing rate; so that its success of late years is described as “little short of marvellous.” A workman’s share of profit in 1880 was 18 per cent. on his year’s wages, in addition to large advantages from the associated Mutual Aid and Pension Society.

But along with a hundred or more successful profit-sharing establishments on the Continent, there have to be placed the many establishments of the kind which have failed; and failures have been especially common in England.

Among defects of the system which Mr. Halsey, manager of certain Mining Machinery Works in Canada, points out, before describing a system of his own, are these:—1. Profit in many cases results from inventions, improvements, economies, with which the workman has nothing to do, and if he is given a share of it, this, not being due in any way to his labour, is a gift. 2. A share of the total profit, when divided among all the workmen, gives to one more, and another less, than he deserves; since in ability and diligence they are unequal. 3. The reward for extra labour and care is distant, even when the division is annually made, and still more when the employés’ share is invested. 4. There cannot rightly be profit-sharing unless there is also loss-sharing, and any arrangement under which the worker had to surrender back part of his wages would evidently never be tolerated, even if practicable. 5. Inevitably there must be more or less distrust on the part of the employés. Even were they allowed to see the books they could not understand them, and they must feel that they are in the hands of their employers, who may so represent matters that they do not get the promised shares: they may have been led to work harder and then get no adequate returns.

The “premium plan” which Mr. Halsey introduced, and alleges to be successful, is one which takes a tolerably well-known time-cost of a certain piece of work, and gives to the workman extra pay proportionate to the diminished time in which he completes it—a premium of so much on each hour economized. This system is akin to one adopted in England by Willans and Robinson, Limited, under which a “reference rate” (or standard rate) for a specified task having been settled, if the cost as measured in time-wages is less, then the workman receives half the difference between the standard cost and the lowered cost resulting from his skill and industry. A kindred system is adopted by the Yale and Towne Manufacturing Company of Connecticut. Setting out with a standard cost, not of labour upon special pieces of work, but of labour and materials throughout the entire business, summed up into an aggregate, they measure, at the end of the year, the difference between the estimated standard cost and the actual reduced cost consequent upon diligence, skill, and care on the part of the employés, and divide this “gain” equally between employer and employed: the difference between these allied methods being that under the last the individual workman does not benefit so fully and distinctly by his superiority as he does under the first.

Speaking generally of these several methods of profit-sharing and gain-sharing, it must suffice here to recognize considerable advantages joined with serious defects; and concerning the last group of methods it may be observed that though approaching more nearly to an ideal system of apportioning out reward to merit, they have the disadvantage of great complication in the making of estimates and keeping of accounts—a complication which, entailing labour to be paid for, entails a certain deduction from the benefits resulting.

§ 837. We come now to those forms of industrial organization Edition: current; Page: [562] usually classed as cooperative, though whether all are rightly so classed may be questioned. It must suffice here to recognize such only of them as have arisen in England.*

Conforming to the general process of evolution, the germs of them were but vaguely cooperative; and they foreshadowed the two different forms of cooperation, so called, which have since differentiated. Swayed by a delusion like that which in times of scarcity leads mobs to smash the windows of those who sell bread, working men, at the close of the last century and beginning of this, ascribing the distress they suffered to the proximate agents inflicting it—the millers and bakers—against whom they made also the probably just complaint that they adulterated flour, determined to grind and bake for themselves. Mills were established at Hull, Whitby, Devonport, while baking-societies were formed at Sheerness and in Scotland. In these cases, though production and distribution were both carried on, yet the mass of those who sought and reaped the benefits were not themselves the workers in the mills or bakeries; nor did they, as a body, occupy themselves in the business of distributing the products. They simply, while trying to secure good food, set up establishments for the purpose of escaping from the payments made to the ordinary producer and distributor.

Twenty years later arose, first at Brighton and afterwards elsewhere, “union shops;” which were stores of such commodities as their working-class members chiefly needed: the ultimate purpose, however, being the ambitious one of adding profit to capital until a sum sufficient for establishing communistic societies had been raised. Presently, certain Edition: current; Page: [563] of them prospered so far as to employ some of their own members in manufacturing a few of the common articles sold; and then there came the “labour exchanges”—places for disposing of the surplus products of these small cooperative bodies, on the basis of the respective labour-values of the things exchanged. Nearly all of them disappeared in a few years; partly from lack of variety in the products they offered to the wives of their members, partly because they gave little or no credit, partly, as it proved, from a defect in their economic policy.

After an interval of nearly 20 years, during which political agitation had mainly absorbed the attentions and energies of working-class leaders, there came a revival of the cooperative movement, again prompted by a communistic ideal. This occurred at Rochdale, among those who called themselves “Equitable Pioneers.” Their scheme was distinguished from preceding schemes by an essential trait. The profits of the store were divided neither among those who subscribed the capital, nor among those engaged in the work of distribution, but among its customers in proportion to the money-values of their purchases. “The effect of the Rochdale persistent application of the principle of dividing profits on purchases” was first of all great prosperity of the local store, and then a spreading of the system to other towns, similarly followed by prosperity; so that in less than 50 years the body of cooperators in the kingdom had “its million members, thirty-six millions of annual trade, three millions of yearly ‘profits,’ and twelve millions of accumulated capital.”

Along with the idea of supplying consumers cheaply, there had gone the idea of buying cheaply the commodities supplied to them. From time to time had been made suggestions for a wholesale cooperative society, from which the retail stores might get what they required on advantageous terms. After sundry abortive attempts, an agency of this kind was established at Manchester in 1864. While fulfilling Edition: current; Page: [564] its immediate purpose, this also formed a centre of federation—a place in which the cooperative organization became integrated. And then, presently, was joined with it a cooperative bank; further facilitating transactions throughout the organization, and serving to integrate it still more closely.

Some other essential traits have to be named. The first is that though for a time the business of the Rochdale store (and presumably of other early stores) was carried on gratis by the cooperators themselves, who undertook duties in rotation, there arose, as the business grew, the need for salaried officials. After the appointment of men who served the cooperative body as wage-earners, there went the resolution that none such should be members of the governing body; and later came the resolution that none such should vote in the election of the governing body. Duly recognizing these cardinal distinctions, let us now ask what is the true nature of one of these so-called cooperative stores.

To the middle-class imitations of them the name “cooperative” is obviously not appropriate. Having capitals raised by shares on which interest is either paid or invested for the benefit of the holders, and, though at first selling only to shareholders, having fallen into the practice of selling to non-shareholders and even to non-ticket-holders, they are simply joint-stock distributing agencies. The proprietors, employing salaried buyers, clerks, and shopmen, constitute a many-headed shopkeeper. How entirely without claim to the title “cooperators” they are, is manifest on remembering that no shareholder is himself a worker in the concern. The shareholders may be said to act together but they cannot be said to work together. The members of a West-end Club are just as properly to be called cooperators. They unite for the better or cheaper fulfilment of certain wants, as the civil servants and others unite for the better or cheaper fulfilment of certain other wants.

Though cooperative stores of the Rochdale type, not dividing Edition: current; Page: [565] profits in the ordinary way, are not subject to the whole of this criticism, yet they are subject to part of it. When those who formed the first of them ceased to be workers in the process of distribution, they ceased to be cooperators in that limited sense of the word with which we are here concerned. When they appointed paid servants, the members became wholly, as they were from the beginning mainly, associated consumers, adopting an economical method of supplying themselves. To provide that profits shall be divided among customers in proportion to their purchases, is simply to provide that they shall have what they purchase at cost price plus the actual cost of distribution—the cost of shop-rent, wages, and interest on capital.

It should be added that the prosperity of these institutions, working-class or middle-class, has been in large measure due to other causes than their so-called cooperative character. By making it a rule to sell for cash only, they, in the first place, diminish the amount of capital required, and, in the second place, exclude bad debts and a large amount of bookkeeping: obviously being so enabled to sell at lower rates. With the large middle-class stores in London a further cause operates. People who deal with a local shopkeeper (who must charge high prices to get a living out of a relatively small amount of business), are saved the time, trouble, and cost of a journey. If, by going to the Civil Service Stores or other such agency (where on a large turnover a small profit suffices) they take on themselves this time, trouble, and cost, they may naturally have their commodities at lower rates than they give to the local distributor, who rightly asks payment for the work he does for them.

§ 838. Attempts to carry on cooperation strictly so called, have now to be considered. From the various kinds of acting together which have been grouped under the name, either improperly or with but partial propriety, we come at Edition: current; Page: [566] length to the literal working together for mutual benefit. Says Mr. Schloss in his Methods of Industrial Remuneration—

As already pointed out, the idea of cooperative production dates far back. Abortive attempts to put it in practice were made during the earlier stages of the general movement; and, during its later stages, have been associated with the more successful plans for what is distinguished as cooperative distribution. It will suffice here to name the efforts made by the “Christian Socialists”—a title quite appropriate, since they were in large measure prompted by beliefs concerning man and conduct like those embodied in the Christian ethical doctrine. Though they did not propose to “take no thought for the morrow,” or enjoin as a duty—“Sell all thou hast and give to the poor;” yet their conception of social re-organization on a cooperative basis, was pervaded by kindred disregard of economic principles and the essential facts of human nature. The dozen bodies of cooperators in one or other trade, formed in London by Mr. F. D. Maurice and his friends, quickly displayed “the demons of internal discord and external rivalry.” They “were actuated by a thoroughly mercenary competitive spirit.” Each of the three associations first formed “had quarrelled with, and turned out, its original manager within six months.” Within a year all three had broken up; and within a few years the entire dozen had “either dissolved without trace, or degenerated into the profit-making undertakings of small masters.” In sundry places in the provinces like combinations were formed; but “they failed as the others had failed.” In Lancashire, however, where the combinations for distribution had succeeded so well, partial success attended the combinations for production. Cotton manufacture was entered upon.

But these, and kindred establishments, soon went the same way as the rest. At Rochdale, however, better results were achieved by a corn-mill, which, while it started with the profit-sharing principle, contained many shareholders who were not employés, and presently abandoned the “bounty to labour.” Similarly a mill at Oldham, founded by co-operators “to enable working men to be their own masters,” and in which, at first, the “workers were largely shareholders,” though it prospered and has survived, has now become a concern in which “few if any of its employés happen to be shareholders.” Profit-sharing was eventually discontinued; and it then turned out that “the recipients of bonus had been reduced in their wages,” and, “on its discontinuance their wages were raised 20 per cent.” Gradually these concerns have lapsed into qualified joint-stock companies—“Working-class Limiteds,” as they have been called. From Miss Potter’s digest and tables, it appears that in 1891, when her book was published, there were, out of a total of 59 groups of manufacturing cooperators, only eight, most of them small and young (5¾ years on the average), which carried out with some consistency the scheme of labour-copartnership (to adopt the pleonastic term now used for distinction). The rest fall short of it either as having given up their self-government, or as consisting of small working-class masters employing non-members as wage-earners (and often treating them hardly), or as being associations in which the capital is held by outside shareholders, while the employés have no part in the management. Thus the designed structure has proved unstable. The salvation has been proportionate to the backsliding.

Quite different, however, is the belief of Mr. Holyoake, and quite different his version of the facts. The August number of Labour Copartnership contains the following table:—

That believers and disbelievers habitually take widely divergent views of evidence, is a familiar experience. Perhaps the incongruity between the groups of statements above given might in large measure disappear if the ages of the bodies just enumerated were set down. Possibly there is a continual dying out of older societies, along with rise of newer ones which are more numerous.

Apparently, however, there is more reason to accept the unfavourable interpretation of the evidence than the favourable interpretation; since both a priori and a posteriori it is manifest that destructive causes, hard to withstand, are ever at work. To secure business-management adequately intelligent and honest, is a chronic difficulty. Even supposing external transactions to be well and equitably conducted, adverse criticisms upon them are almost certain to be made by some of the members: perhaps leading to change of management. Then come the difficulties of preserving internal harmony. In cooperative workshops the members receive weekly wages at trade-union rates, and are ranked as higher or lower by the foreman. Officials are paid at better rates according to their values and responsibilities, and these rates are fixed by the committee. When the profits have been ascertained, they are divided among all in proportion Edition: current; Page: [569] to the amounts they have earned in wages or salaries. Causes of dissension are obvious. One who receives the lowest wages is dissatisfied—holds that he is as good a worker as one who gets higher wages, and resents the decision of the foreman: probably ascribing it to favouritism. Officials, too, are apt to disagree with one another, alike in respect of power and remuneration. Then among the hand-workers in general there is pretty certain to be jealousy of the brain-workers, whose values they under-estimate; and with their jealousies go reflections on the committee as unfair or as unwise. In these various ways the equilibrium of the body is frequently disturbed, and in course of time is very likely to be destroyed.

§ 839. Must we then say that self-governing combinations of workers will never answer? The reply is that one class of the difficulties above set forth must ever continue to be great, though perhaps not insuperable, but that the other and more serious class may probably be evaded.

These members of industrial copartnerships, paying themselves trade-union wages, are mostly imbued with trade-union ideas and feelings. Among these is a prejudice against piece-work, quite naturally resulting from experience. Finding what a given piece of work ordinarily costs in day-wages, the employer offers to pay the workman for it at a certain lower rate; leaving him to get, by extra diligence, more work done and a larger payment. Immediately, the quantity executed is greatly increased, and the workman receives considerably more than he did in wages—so much more that the employer becomes dissatisfied, thinks he is giving too large a sum by the piece, and cuts down the rate. Action and reaction go on until, very generally, there is an approximation to the earnings by day-wages: the tendency, meanwhile, having been so to raise the employer’s standard, that he expects to get more work out of the workman for the same sum.

But now, has not the resulting aversion to piece-work been unawares carried into another sphere, in which its effects must be quite different? Evils like those arising from antagonistic interests, cannot arise where there are no antagonistic interests. Each cooperator exists in a double capacity. He is a unit in an incorporated body standing in the place of employer; and he is a worker employed by this incorporated body. Manifestly, when, instead of an employing master, alien to the workers, there is an employing master compounded of the workers, the mischiefs ordinarily caused by piece-work can no longer be caused. Consider how the arrangement will work.

The incorporated body, acting through its deputed committee, gives to the individual members work at a settled rate for an assigned quantity—such rate being somewhat lower than that which, at the ordinary speed of production, would yield the ordinary wages. The individual members, severally put into their work such ability as they can and such energy as they please; and there comes from them an output, here of twenty, there of twenty-five, and occasionally of thirty per cent. greater than before. What are the pecuniary results? Each earns in a given time a greater sum, while the many-headed master has a larger quantity of goods to dispose of, which can be offered to buyers at somewhat lower prices than before; with the effect of obtaining a ready sale and increased returns. Presently comes one of the recurring occasions for division of profits. Through the managing body, the many-headed master gives to every worker a share which, while larger all round, is proportionate in each case to the sum earned. What now will happen in respect of the rate paid for piece-work? The composite master has no motive to cut down this rate: the interests of the incorporated members being identical with the interests of the members individually taken. But should there arise any reason for lowering the piece-work price, the result must be that what is lost to each in payment for labour, is Edition: current; Page: [571] regained by him in the shape of additional profit. Thus while each obtains exactly the remuneration due for his work, minus only the cost of administration, the productive power of the concern is greatly increased, with proportionate increase of returns to all: there is an equitable division of a larger sum.

Consider now the moral effects. Jealousies among the workers disappear. A cannot think his remuneration too low as compared with that of B, since each is now paid just as much as his work brings. Resentment against a foreman, who ranks some above others, no longer finds any place. Overlooking to check idleness becomes superfluous: the idling almost disappears, and another cause of dissension ceases. Not only do the irritations which superintendence excites decrease, but the cost of it decreases also; and the official element in the concern bears a reduced ratio to the other elements. The governing functions of the committee, too, and the relations of the workers to it, become fewer; thus removing other sources of internal discord: the chief remaining source being the inspection of work by the manager or committee, and refusal to pass that which is bad.

A further development may be named. Where the things produced are easily divisible and tolerably uniform in kind, work by the piece may be taken by single individuals; but where the things are so large, and perhaps complex (as in machinery), that an unaided man becomes incapable, work by the piece may be taken by groups of members. In such cases, too, in which the proper rate is difficult to assign, the price may be settled by an inverted Dutch auction, pursuing a method allied to that of the Cornish miners. Among them—

In the case now supposed, sundry pieces of work, after similar inspection, would be bid for on one of the recurring occasions appointed. Offering each in turn at some very low price, and meeting with no response, the manager would, step by step, raise the price, until presently one of the groups would accept. The pieces of work thus put up to auction, would be so arranged in number that towards the close, bidding would be stimulated by the thought of having no piece of work to undertake: the penalty being employment by one or other of the groups at day-wages. Now good bargains and now bad bargains, made by each group, would average one another; but always the good or bad bargain of any group would be a bad or good bargain for the entire body.

What would be the character of these arrangements considered as stages in industrial evolution? We have seen that, in common with political regulation and ecclesiastical regulation, the regulation of labour becomes less coercive as society assumes a higher type. Here we reach a form in which the coerciveness has diminished to the smallest degree consistent with combined action. Each member is his own master in respect of the work he does; and is subject only to such rules, established by majority of the members, as are needful for maintaining order. The transition from the compulsory cooperation of militancy to the voluntary cooperation of industrialism is completed. Under present arrangements it is incomplete. A wage-earner, while he voluntarily agrees to give so many hours work for so much pay, does not, during performance of his work, act in a purely voluntary way: he is coerced by the consciousness that discharge will follow if he idles, and is sometimes more manifestly coerced by an overlooker. But under the arrangement described, his activity becomes entirely voluntary.

Otherwise presenting the facts, and using Sir Henry Maine’s terms, we see that the transition from status to contract reaches its limit. So long as the worker remains a Edition: current; Page: [573] wage-earner, the marks of status do not wholly disappear. For so many hours daily he makes over his faculties to a master, or to a cooperative group, for so much money, and is for the time owned by him or it. He is temporarily in the position of a slave, and his overlooker stands in the position of a slave-driver. Further, a remnant of the régime of status is seen in the fact that he and other workers are placed in ranks, receiving different rates of pay. But under such a mode of cooperation as that above contemplated, the system of contract becomes unqualified. Each member agrees with the body of members to perform certain work for a certain sum, and is free from dictation and authoritative classing. The entire organization is based on contract, and each transaction is based on contract.

One more aspect of the arrangement must be named. It conforms to the general law of species-life, and the law implied in our conception of justice—the law that reward shall be proportionate to merit. Far more than by the primitive slave-system of coerced labour and assigned sustenance—far more than by the later system under which the serf received a certain share of produce—more even than by the wage-earning system under which payment, though partially proportioned to work, is but imperfectly proportioned, would the system above described bring merit and reward into adjustment. Excluding all arbitrariness it would enable reward and merit to adjust themselves.

But now, while contending that cooperation carried on by piece-work, would achieve the desideratum that the manual worker shall have for his product all which remains after due remuneration of the brain-worker, it must be admitted that the practicability of such a system depends on character. Throughout this volume it has been variously shown that higher types of society are made possible only by higher types of nature; and the implication is that the best industrial institutions are possible only with the best men. Judging from that temporary success which has been Edition: current; Page: [574] reached under the ordinary form of cooperative production, it is inferable that permanent success might be reached were one set of the difficulties removed; leaving only the difficulty of obtaining honest and skilful management. Not in many cases, however, at present. The requisite “sweet reasonableness,” to use Matthew Arnold’s phrase, is not yet sufficiently prevalent. But such few cooperative bodies of the kind described as survived, might be the germs of a spreading organization. Admission into them would be the goal of working-class ambition. They would tend continually to absorb the superior, leaving outside the inferior to work as wage-earners; and the first would slowly grow at the expense of the last. Obviously, too, the growth would become increasingly rapid; since the master-and-workman type of industrial organization could not withstand competition with this cooperative type, so much more productive and costing so much less in superintendence.