Chapter VIII
The Relationship Between Co-operation and Trade Unionism¹

Beatrice Webb

When an intelligent foreigner asks me what there is most of interest in Northumberland and Durham, I generally forget the Roman Wall, and sometimes even the magnificent view from Durham Cathedral. The most significant thing to me about Tyneside in 1892 is that there are no fewer than 153 co-operative stores in the Northern Section, and that 470 trade societies flourish between Blyth and Middlesbrough. No other part of the world can show so great a development of the two main forms of industrial democracy. The relation of trade unionism and co-operation is therefore a very fitting subject for consideration at this Tynemouth conference.

It will be unnecessary for me to tell you once more the oft-told tale of the marvellous extension of the co-operative movement. You' know all about the million members, the twelve millions of capital, the forty millions of annual trade, and last, but by no means least, the three millions of annual ' dividend.' Nor is it needful that I should dilate upon the progress of trade unionism. Times have changed since it was a crime to belong to a working-class combination, and since trade union secretaries received contributions secretly, by night, in the corner of a field. Trade unionism has had its victories, no less glorious than those of co-operation, and counts now a membership of somewhere between one and two millions of as fervent believers in the advantages of their own organisation as the million co-operators themselves. What is the relation between these two great working-class movements?

Now the first question that we have to settle is whether there is any use in trade unionism at all. Perhaps I ought to apologise for raising such a question before an audience of whom a large proportion will be convinced trade unionists. But I do so because I suspect that some ardent apostles of the co-operative faith still cherish the belief that trade unionism is really unnecessary, and that the workman would be better advised if he gave up all attempts at trade combination and contented himself with the advantages offered by co-operation. I do not know that this view is ever distinctly expressed at the present time. But although not explicitly stated, this view of trade unionism still survives, and sometimes, I suspect, hinders that cordial working together of the two movements which is essential for their well-being. I think it is time that it was clearly realised by all intelligent co-operators, not only that strong trade organisations are absolutely necessary to the worker's well-being to-day, but also that no possible extension of the co-operative or even the socialist movement can enable trade unionism to be dispensed with.

I am here face to face with a difficulty. There are, as you know, within the co-operative movement two distinct forms of co-operative industry. On the one hand we have associations of consumers such as the corn mills, the stores, and the Wholesale Societies, who together transact over 95 per cent of the co-operative trade of the country. On the other hand we have a few associations, not of consumers, but of producers, such as the Eagle Brand Boot Works, at Leicester, or the Slipper Makers' Society at Newcastle. The ideal of the associations of consumers is that of the co-operative or socialist state — the management of industry by salaried officials for the profit of the whole community. The ideal of the rival form of industrial co-operation consists of groups of self-governing workers owning alike the instrument and the product of their labour, and competing for profit in the markets of the world. These ideals appear to me antagonistic to each other, and mutually exclusive. . But, however that may be, they most assuredly present separate problems, and are as different in their limitations and their advantages as they are in their aims. We must therefore separately consider the relation of trade unionism, first to the self-governing workshop, and then to the store.

Let us suppose, for instance, that the co-operative corn mills in the North of England were owned and managed, not by associations of consumers, but by the workmen now employed in each of them. It is clear that there would, in that case, be no room for the present millers' trade union, and strikes against employers would be unknown. But should we by this social revolution have achieved industrial peace? Our self-governing corn mills would be forced inevitably to adopt one of two courses. The workers in each mill might, in the first place, preserve their entire independence of the other mills, and they would all compete with each other for the custom of the community. This course is, in fact, the one pursued by such associations of producers as already exist. But, unfortunately, this unrestrained competition inevitably leads, in bad times, to the lengthening of the hours of labour of the associated producers and the reduction of their remuneration. Profit disappears, at any rate for a time, and it becomes a question of working longer and for less than before, in order to avoid running at a positive loss and seeing their whole capital disappear. To resist this downward tendency, and to insist on the loss being borne by the capitalist employer, is just the function of the trade union to-day. At present the constant pressure of the customer for lower prices, which competing capitalists can do nothing to resist, is to some extent checked by the dyke of the trade union rate of wages. If this were absent, the capitalist workers would find themselves driven in bad times to lower indefinitely their own standard of life in order to keep intact the capital which they had accumulated.

We should have, in fact, the spectacle on a larger scale of what we to-day call the ' sweating system,' in which the main feature is exactly this unregulated struggle between small masters, or individual workers themselves owning the instruments of production, and competing with each other for a bare subsistence. It will be unnecessary for me to remind you that during the last half-year of bad trade the workers in the Dunston corn mill would not have been earning even subsistence wages, and in order to save the capital they owned, would have been hawking their flour from door to door at cut-throat prices.

But, on the other hand, the self-governing workshops, if they ever came to be the typical form of co-operative industry, might be wise enough to avoid this disastrous competition by learning a lesson from the American capitalist. We might, in fact, have a ' ring ' of flour producers against the consumer. A few years ago there was actually an attempt to form a flour syndicate in the North of England, which broke down through the determined opposition of the mills owned by associations of consumers. If these mills had been owned and governed by the workers in them, they might, in order to avoid the horrors of unrestrained competition, have fallen in with this arrangement. Instead of the spectacle of the sweating system, we should then have before us a gigantic ' ring ' or ' combine ' of capitalist workers, associated to keep up prices against their customers. We should, indeed, have done away with the Millers' Trade Union, with its modest and legitimate desire to maintain the standard of life of its members. But we should have created in its place a body of monopolists exploiting the public for their own private gain. Industrial conflict would have been replaced by industrial oppression.

But in arguing against the substitution of self-governing workshops for trade union action, we are, in fact, fighting a shadow. It will be patent that if the 112 workers in the Dunston corn mill themselves owned the .£100,000 capital sunk in that venture, they would simply be a partnership of little capitalists, who would immediately begin to employ non-members as simple wage labourers. Wherever we find the 'self-governing workshop' successful to-day a close investigation shows that the 'self-government' of the workers is a delusion, and that the association consists, in greater or smaller proportion, of capitalist-members who are not workers, and of wage workers who are not members. Moreover, it is significant that the scattered and imperfect attempts to realise the ideal of self-employing groups of workers all occur in the industries which are as yet untransformed by an extensive use of machinery, and by the transaction of business on a large scale.

In short, the Industrial Revolution, now rapidly extending to all industries, has rendered it practically impossible for the worker to own the instruments of production without himself becoming a capitalist, able to live independent of his own labour. The ideal of associations of producers belongs essentially to the time when industry was carried on mainly by hand labour in domestic establishments. We need not dispute the possible educational advantages of the self-governing workshop. Steam and machinery have killed it as certainly as they have exterminated the hand-loom weaver.

Let us therefore pass on to the relation of trade unionism to the other form of co-operative industry, as carried on by associations of consumers. Unlike the self-governing workshop, the store does not presume to undertake the functions of the trade union. The Newcastle co-operators do not profess to protect the interest of the boilermakcrs or the shipwrights among their number. But there is often an unconscious assumption among co-operators that the worker would gain more by concentrating all his energies on co-operation than by ' frittering them away ' on trade combinations.

Now we are always being told of what I may call the cash value of co-operative consumption — the hundreds of thousands of pounds distributed every quarter in dividends, the millions saved up out of the accumulation of these. Great and good as is all this side of co-operation, I sometimes think that far too much is made of it. It would be a fatal error if the million members of co-operative societies allowed their comparatively small interests as dividend-receivers for one moment to divert their attention from their much vaster interests as wage-earners and citizens. The dividends of a co-operator amount on an average to about £3 a year, or just about a farthing per hour on his wages. A ' good ' co-operator, dealing pretty constantly at the store, will make perhaps double this amount, or a halfpenny per hour of his working time. Now I need not remind you how very easy it is to lose a halfpenny per hour in wages for the want of a strong trade union. Take, for instance, the Amalgamated Society of Carpenters, with its five hundred branches all over the kingdom. Their standard rates of wages vary from 5d. per hour in some towns up to $9\frac{1}{2}d$. per hour in others — a difference equal to no less than eighteen times as much as the average co-operator makes out of his store. In a score of towns last year the carpenters gained a rise or suffered a fall of a halfpenny an hour on their wages — more than they stood to gain in cash if they could have suddenly sprung at one bound into as successful co-operators as the men of Durham themselves. Or compare the rates of wages earned by members of the Operative Bricklayers' Society in its two hundred branches, which show an equally great divergence. Difference in the cost of living may partly explain why a London bricklayer gets $9\frac{1}{2}d$. an hour, and one at Cromer or Taunton only 5d.; but it is scarcely difference in the cost of living which makes a Newcastle man get 9d. an hour and a Sunderland man only $8\frac{1}{4}d$., a Stockton man 8d., and a York man $7\frac{1}{2}d$. I do not, of course, contend that these differences are entirely caused by the comparative strength or weakness of the local trade union branches. But it is quite certain that the relative strength of local trade unionism is a very large factor in determining the standard rate in industries which extend throughout a country. Co-operators must not, in their zeal for their own movement, lose sight of the vital importance of maintaining, all along the line, the dyke of the standard rate of wages. If the co-operative artisans in any town lag behind their fellows elsewhere, even to the extent of an advance of a farthing an hour which might have been gained by strong trade unionism, they will probably have lost as much in actual cash by the end of the year as they will have gained by all their devotion to the co-operative store. The engineers at Keighley, for instance, a strongly co-operative town, are earning at least 10s. a week less than the engineers at Manchester; a fact which can, I think, only be accounted for by the superior capacity for trade combination exhibited by Lancashire mechanics. It will hardly be maintained that the .£5 a-year dividend of the Keighley ' good co-operator' is equivalent to the £26 a-year additional wages earned by the Manchester ' good trade-unionist.' We co-operators point the finger of pity and of scorn at London, as a co-operative desert; but the London rate of wages in the well-organised trades is usually considerably above that of most co-operative towns; and the hundred thousand artisans in the London building trades have just secured, solely through their strong trade unions, and without a strike, a rise in wages more than equal to all the dividends that the Tyncside artisans will this year draw from their flourishing stores.

I do not mean to deny that the quarterly dividend from the store may not often go further than an equivalent addition to weekly wages, and we should, of course, be wrong if we measured either co-operation or trade unionism exclusively by the cash benefits that it secures to its adherents. But both co-operators and trade unionists so frequently refer to this side of the argument that it is necessary to remind each of them of the claims of the other in this respect. Far more important in both cases is the moral value of the movement. Wages rise and fall, dividends fluctuate and disappear, but the educational result on the individual remains. No man can be either a good trade unionist or a good co-operator without possessing no small share of all the social virtues. Rut when we are on the cash value of co-operative consumption it is very important that we should not lose sight of the fact that it amounts to but a small proportion of a mechanic's weekly wages.

Nor must we forget, in this discussion of facts as they are, that the modern advocates of co-operative consumption are as much 'dreamers of dreams' as the more old-fashioned prophets of the self-governing workshop. Those who insist on the necessity for trade unions are often referred to a vague co-operative Utopia, in which the federation of stores and wholesales will have become the universal provider, and consequently the universal employer. In this millennium of universal co-operation, it is urged, the worker may safely be indifferent whether the advantage comes to him in increased wages or in high quarterly " dividends " on his total expenditure. But let us thoroughly realise, once for all, the absolute barriers set by the very nature of things to any universal extension of the store system.

In the first place, the entire export trade, which now employs whole districts of England, is necessarily for ever excluded from the sphere of associations of consumers. Not even Mr. Mitchell² would expect the workers for the export trade to abandon their trade unions in the vain hope that the African negro and the Heathen Chinee will become responsible and conscientious members of a Universal Wholesale Society.

Secondly, there are vast areas of industrial operations for our own consumption, which no mere voluntary association could ever undertake. No one proposes that the railway service of the country, or its network of telegraphs or canals, should be governed by voluntary associations of the customers or users of these public conveniences. Indeed, who are the customers of these essentially national services, and how could they form themselves into a voluntary representative body of administrators? Where consumption is universal and practically compulsory, as in the case of the post-office, or of a municipal water supply, we have necessarily to choose between a close corporation of monopolists making profit, or the compulsory co-operation of the consumers organised as citizens of the municipality or the State. The alternative to capitalism in these services is not voluntary association of consumers, but State or municipal socialism.³ There are, in short, whole sections of the working class whom the store and the Wholesale can never hope to employ.

Supposing, however, that, for the sake of argument, we include under co-operation the compulsory associations of the municipality and State. Then, indeed, we might conceive of a time when the entire industry of the community should be governed by the representatives of the public. But even with this complete elimination of the profit-maker, trade combinations would, it appears to me, still remain a necessary part of social organisation. In our enterprises of national and municipal co-operation, such as the post-office and the supply of gas and water, where no private capitalist reigns, we still find divergence of interest between the community of consumers and its servants. The Leeds gasworkers struck against the gas committee of the Leeds Town Council with just the same fierce sense of injustice as animated the revolt of their fellows against a capitalist gas company in London. Indeed, have we not this very conflict in the store itself — consumers eager for low working expenses and high dividends on the one hand, store managers and assistants anxious for increased salaries and early closing on the other? And as more of the manufacturing industry of the country passes from individual to collective control — whether it be that of the State, or the municipality, or the store — does it not become ever clearer that this transfer, good and desirable as it is, leaves untouched the fundamental divergence of pecuniary interest between the maker of an article and its consumer? This divergence of interest need not, in a wholly democratised industry, take the form of industrial conflict. What is and will always remain necessary is a due representation of the special requirements of each class of workers. The store committee or the town council, representing the whole body of consumers, will meet in conference the trade union committee, cognisant of the special circumstances of particular branches of production. With the elimination of the private capitalist, intent only on his own gain, and frequently defrauding both the producer and the consumer, the way will be left clear for a peaceful understanding between the officials of the community and the representatives of the trades. But to suggest that a true republic of industry can be achieved by a mere committee of consumers, without adequate representation of the interests of each trade, is, I suggest, to misconceive both the nature of man and the character of democratic government.

I contend, therefore, that the co-operative and trade union movements are the necessary complement of each other. In the co-operative society or the municipality the citizen-consumer unites with his fellows to control and manage for their common benefit as much as possible of the industry which supplies their needs. Their aim must necessarily be to obtain good articles at a low expense of production. But as they themselves are also producers, it is easy for them to realise the truth of Owen's great principle, that the community is in the long run injured, not profited, by any beating down of the standard of life of its members. These same citizen -consumers combine, therefore, among themselves in a second organisation, according to industries, in order that in no case may the heedlessness of the consuming majority depress the condition of the minority in which any one set of producers is bound to find itself. Without co-operation, voluntary or municipal, there is no guarantee that any industry will be carried on for the public benefit; without trade unionism there is no security that this public benefit will not be made a source of injury to the minority of producers. Combinations of workers may, therefore, be regarded as a permanent element in the democratic State, whether the control over industry be in the hands of voluntary associations of consumers or in those of the State or municipality itself.

Hitherto we have been describing the limitations of co-operation. But the limitations of trade unionism are even more striking. Trade unionism, even if it became universal, would fail to secure for the workers the rent and profit now made out of their labour. These go at present, under our system of private property, to those who own the land or the machinery, or possess the business talent. The essential principle upon which a standard rate of wages is based cuts it off from sharing in profits just as much as from sharing in losses. Against the rock of economic rent, whether from capital or land, all the storms of trade unionism beat in vain. Something more than mere trade combination is, therefore, required if we are to realise the ideal of a community of workers obtaining the full fruits of their labour. The good trade unionist must supplement his trade unionism by co-operation, local and national, and seek to substitute the community in one or other of its organisations for the private absentee proprietor or rent-receiver. Nor can the community of workers itself allow trade combination to go too far. Any particular trade exists, not for the benefit of the workers employed in it, but for the whole nation. The hand-loom weavers could not have been allowed to decide the question of the introduction of the power-loom. The opinion of a Tyneside shipwright of the last generation would not have been conclusive as to the social utility of iron shipbuilding. And to-day we cannot afford to let the repugnance of the skilled hand-tailor stand in the way of the constiuction of clothing factories making the utmost use of machinery and division of labour. In short, the ultimate decision upon trade processes and industrial organisation must inevitably rest, not with the producers of the commodity, but with the consumers of it. We may approve the association of the workers in any particular trade to protect themselves from oppression, whether that oppression comes from an individual capitalist or, as in our post-office, from the heedless neglect of the whole community. But beyond that we cannot go. The combination of producers of a particular article, in order to resist the introduction of machinery, or to raise prices against the community, would be as intolerable a tyranny in the hands of a trade union as in that of a capitalist ' ring.' The vague dream of investing trade unions with control over their respective industries must be dismissed as a false ideal. As a worker the citizen is the servant of the community, not its master. He is rightfully owner of the means of production, and co-director of the nation's industries, but in his capacity as citizen, not in that of miner or mill-hand. We may rebel against individual ownership of land or capital, but no one would trouble to displace Lord Londonderry in order to set several thousands of little Lord Londonderrys in his stead. We no longer claim the land for the labourer, or the mine for the miner, any more than the school for the schoolmaster, or the sewer for the sewer men. These are the notions of a bygone individualism, as much out of date as peasant proprietorship or the hand-loom. What we seek to substitute for the personal rule of the private owner or trader is the control not of the trade or class, but of the whole community. The trade union goes, therefore, outside of its legitimate sphere, where it seeks to obtain any further control over the industry of its members than is needed for their maintenance of their standard of life, according to the requirements of their trade or the normal social level of the time. Trade unionists who are nothing but trade unionists are giving up half their rights and half their responsibilities; they are organising only the servant side of their lives, and ignoring that richer sphere of collective mastership which is now, in store membership and democratic citizenship, opening out so gloriously before them.

My conclusion, therefore, is that trade unionists and co-operators are in duty bound to swell and maintain each other's organisations in every possible way. The artisan co-operator, who is not also a member of his trade society, is a traitor to all the essential principles of the co-operative' faith. The trade unionist who is not a co-operator is hugging his chains as a wage-slave without taking his part in the struggle towards the democratic control of industry. And both trade unionist and co-operator, let me add, are forgetful of their rightful duties and responsibilities unless they are also active citizen politicians, eager to secure their full share of control over those branches of co-operation in which the proper unit of administration is not the store or the trade society, but the municipality or the State.

As between trade unionism and co-operation, great harm is constantly done to both movements by the grudging spirit in which the sphere and work of each is often regarded by eager apostles of the other. It is all very well to be enthusiastic about the virtues of one's own particular panacea, but I hope that the time will very shortly come when no co-operative meeting will omit its meed of praise of the sister movement of trade unionism; and when no gathering of trade unionists will neglect to record its appreciation of the advantages of co-operation. We ought not to be content with sending a formal deputation to each other's annual Congress. Every branch of either movement ought to be avowedly made a recruiting ground for the other. When a workman enters a strange town, and seeks his trade union lodge, there is no reason why his branch secretary should not hand him a card giving the address of the nearest co-operative store, and report his name to the secretary thereof. When the store receives a new member, his address and occupation might, in turn, be automatically passed on to the secretary of the local trades council, for report to the trade union concerned. It would be an act of far-sighted generosity if the co-operative society would place such of its committee-rooms as could be spared, gratuitously at the disposal of the local trade unions for their lodge meetings. To make the co-operative store, instead of some low public-house, the home of the local trades council, would be at once a gain to co-operation and to trade unionism. At Nottingham, the Mayor grants the trades council the free use of a room in the Municipal Buildings for its meetings. I should like to hear of the Newcastle Co-operative Society cutting out the crowded beerhouses in the Groat Market in a similar way.

Store committees ought to be in more constant communication with the local trade unions with regard to rates of wages and fair contractors. The store, like the town council, must obviously set a good example to other employers, not a bad one. Co-operators must therefore see to it that they pay in all departments the standard rate of wages of the district; that they work their servants for not more than the standard hours of labours in each industry; and, above all, that they give out no contract to any firm which does not observe the same conditions. These principles cannot be rigidly adhered to without close and frequent communication with the local trade union leaders; and it has been chiefly for want of such communication that a few co-operative stores have in the past unwittingly employed ' rat-shop ' printers, or gone to ' sweating ' contractors.

I hope that it may become possible for co-operators and trade unionists to recognise a ' union label/ at any rate, for certain articles; and if you would instruct your delegates to the Wholesale quarterly meetings and your own store committees to insist that certain kinds of matches and certain makes of jam should no longer be dealt in by co-operative societies, it would do more to promote proper conditions of labour in these industries than any amount of mere sympathy for the unfortunate producers of 'sweated ' articles. Co-operators must not expect to get the full and cordial support of ardent trade unionists until they show that they are really in earnest in their crusade against bad employers of labour.

On the other hand the trade unions owe to the store a loyal support. There is, I am sorry to say, too much short-sighted hypocrisy in these matters. The secretary of a trade society, who is paid to organise and agitate in favour of fair conditions of labour, will allow his wife to desert the ' co-op. shop,' and encourage her to buy elsewhere commodities of which the price is a patent label of the sweating system. If the democratic control of industry is to be made really effective, every trade unionist must be an ardent co-operator. And the trade unions must treat the store fairly. As an employer the co-operative society cannot go far beyond the average private capitalist, with whom it has to compete. The trade union must not demand more from the store than a willing and honourable observance of the standard rate, whatever that may be. Above all, there must be no taking advantage of the vulnerability to slander against which a co-operative society cannot protect itself. The recent strike of some of the bootmakers in the magnificent new works of the Wholesale, at Leicester, is an instance of what I mean. A certain class of workers chose to feel aggrieved on some pretext so slight that their own union authorities unhesitatingly condemned them. But relying on the desire of the Wholesale to avoid disputes, the malcontents persisted in their demand, and (although it was not granted) caused much inconvenience and loss to the million fellow-workmen who are their employers. To attempt in this way to ' take advantage ' of a co-operative society is to be disloyal both to trade unionism and to co-operation.

My appeal to both co-operators and trade unionists alike is, therefore, for mutual recognition of each other's proper sphere. There has been in the past too much division, too much jealousy, too much friction between what are two necessary branches of the same democratic movement. Now, with a broader understanding of the complementary character of the two movements, a larger-hearted appreciation by the officials of both organisations of each other's difficulties, the wage-earners in each town, organised as consumers, and the workers in each trade, organised as producers, might rapidly become an irresistible twin power for the democratic control of industry. The Parliamentary Committee of the Trade Union Congress, and the Parliamentary Committee of the Co-operative Union, represent to-day to a large extent the same persons, or at least the same families. Whether they regard as their special client the wage-earning trade unionist husband or the housekeeping co-operative wife, it is obvious that their real interests must be identical. Both bodies represent the whole community of manual workers, as opposed to any particular section of it. Both are interested in maintaining a high standard of quality and a high level of workmanship. Both have a struggle to wage with those who, as idle landlords or capitalists, levy a tribute upon the working community without necessarily rendering it any service in return.

Finally, neither can achieve its full development without the loyal co-operation of the other, in those wider social reforms which lie beyond the scope of this paper. It seems to me that the leaders of the trade union and the co-operative movements, with their millions of constituents, have a noble opportunity before them. If they will confer together as to the common needs of the two movements, and loyally support each other in working for these, ' sweating ' might rapidly be driven out of the land; excessive hours of labour and other forms of industrial oppression might be made impossible; industry might be freed from taxation, and the labourer from tyranny; and trade unionism and co-operation, each in its own legitimate sphere, would spring forward with a bound to conquests more glorious than any yet achieved. But without a true union based on mutual respect, further progress will be difficult, if not impossible. The proper relationship of trade unionism and co-operation is, as it seems to me, that of an ideal marriage, in which each partner respects the individuality and assists the work of the other, whilst both cordially join forces to secure their common end — the Co-operative State.

Notes

1. A paper read at a conference of Trade Union Officials and Co-operators, Tynemouth, 15th August 1892. ↩
2. The late respected Chairman of the Co-operative Wholesale Society. ↩
3. Other limits to the possible extension of voluntary associations of consumers are pointed out in the last chapter of The Co-operative Movement in Great Britain. ↩