Part II, Chapter XV Coöperation: Getting Rid of the Employing Class.

IN its first and largest sense, coöperation signifies the union in production of different persons, it may be of different classes of persons, and it may be on the most unequal terms. In this sense, coöperation is compatible with the subordination of the employed to the employer and with the existence of industrial "principalities and powers." In the sense which has been made of late years so popular, and in which alone it will be used in this treatise, coöperation means union in production, upon equal terms. It is democracy introduced into labor.

It is as we turn from discussing the industrial character of the employing class, that we can most advantageously consider the schemes proposed, under the title of coöperation, for the amelioration of the condition of the wages class; and, at the same time, it is as we try to find the real significance of these schemes that we realize most fully the confusion introduced into the theory of distribution by the failure to discriminate the entrepreneur-function, and by the undue extension of the word profits. In my opinion, it is simply not possible to give an intelligible account of coöperation through the use of the definitions by the text-book writers. If what we have called the profits of business are only "the wages of supervision and management," what is it that coöperation aims to effect? Supervision and management must still be exercised, or coöperation will come to a very speedy end. If supervision and management are to be exercised, it must be by some one, and if the present supervisors and managers (the employers, as I call them) are to be turned adrift or reduced to the ranks, then these duties will have to be performed by men now taking some other part in industry, and to them "the wages of supervision and management" will be paid. Wherein have the workmen gained anything? It is fairly to be presumed that these peculiar and difficult duties will not be performed any better by men chosen by caucus and ballot, than by men selected through the stern processes of unremitting business competition.

If the wages of supervision and management are to be paid, in manner and in amount, as heretofore, to supervisors and managers chosen by the workmen themselves, we can readily understand that the pride of the workmen may be gratified (whether that will tend to make them more easily supervised and managed, is a question we need not anticipate); but wherein is the economical advantage? If it is said, wages are not to be paid to the supervisors and managers, under the coöperative system, equal to those paid under the existing industrial organization, while yet the work is done as well, what does this amount to but a confession that the sums now received by the employers are not wages, but something more than, and different from, wages; the difference in amount representing the power given to the employer by his industrial position to wrest an undue share of the products of industry?

To repeat: if, under the coöperative system, the work of "supervision and management" is to be done by a new set of men for the same "wages," the workmen will gain nothing; if, on the other hand, the workmen, controlling the operations of industry for themselves, can get the work done for less (and the great promises held out as to the benefits of coöperation would imply that it must be for very much less), then it must be concluded that employers at present receive something more than and different from wages.

But if we find it difficult to conceive what account one could give of coöperation, using the definitions of the text-books, we find that, if we stand aside and allow the text-book writers to state it in their own way, the result is not a whit the more happy. Prof. Cairnes, so highly distinguished for his justness and clearness of reasoning, stumbles, at the very threshold of the subject, across an obstacle of his own devising. Thus in the very act of bringing forward the scheme of coöperation as a cure for the industrial ills of society, he makes a statement of coöperation which reduces it to a nullity: "It appears to me that the condition of any substantial improvement of a permanent kind in the laborer's lot is that the separation of industrial classes into laborers and capitalists shall not be maintained; that the laborer shall cease to be a mere laborer—in a word, that profits shall be brought to reënforce the wages fund." And again, more tersely: "The characteristic feature of coöperation, looked at from the economic point of view, is that it combines in the same person the two capacities of laborer and capitalist." This needs but to be looked at a moment to reveal its utter fallacy. Remember, this is not the declaration of an irresponsible philanthropist that every workman ought to have a palace and a coach, but the grave statement of an accountable economist as to the manner in which the welfare of the working class may, under economical conditions, be advanced. What is this industrial panacea? Why, the laborers are to become capitalists. A most felicitous result truly; but how is it to be accomplished? By saving their own earnings? But this they can and do accomplish at present; and, through the medium of the bank of savings, they may and do lend their money in vast amounts to the employing class (oftentimes to their individual employers), and thus, under the present system profits (in Prof. Cairnes' sense) may be and are "brought to reënforce" wages. Is it, then, by saving somebody else's earnings, and bringing the profits thereof to "reënforce the wages fund"? But this is spoliation, confiscation, a resort which no one would be before Prof. Cairnes in denouncing, and whose disastrous consequences to the laborers themselves no one could more forcibly portray.

We see, therefore, that Prof. Cairnes' statement is a form utterly without content. Coöperation is to be an admirable thing, because in coöperation the workmen are to be both laborers and capitalists. But if we inquire how they are to become capitalists, otherwise than at present, we fail to find an answer.

No! Coöperation, considered as a question in the distribution of wealth, is nothing more or less than getting rid of the employer, the entrepreneur, the middleman. It does not get rid of the capitalist. In modern industrial society, that society which Prof. Cairnes is contemplating when he finds the condition of the workman hard and requiring relief, there are three functions, not two merely; and the reform to be effected through coöperation, if indeed coöperation be practicable, is by combining in the same person, not the labor function and the capital function, but the labor function and the entrepreneur function.

What then is the attitude of laborers in coöperation? To the employer they say: You have performed an important part in production, and you have performed it well; but you are now relieved. You have charged too high for your services. Your annual profits, taking good years and bad together, are greater than we need to pay to get the work done, if we will take the responsibilities of business on ourselves, and exercise a forethought, patience, and pains we have had no call to exercise while you were in charge. Up to this time the state of the case has been this:

Hereafter the state of the case will be:

One word more before we part. We intend no disrespect. With workmen who are ignorant, dissolute, unwilling to subordinate the present to the future, incapable of organization, such services as you are qualified to render are absolutely indispensable; and we will not say that such remuneration as you exact is excessive. But we profess better things. We are prepared to exercise patience, industry, economy, and to subject our individual desires to the general will, for the sake of dividing among ourselves the profits you have been accustomed to make out of us. We know it will be hard; but we believe it can be done. If men are not fit for an industrial republic, then they must submit to the despot of industry, and they have no right to complain of Civil List and Privy Purse. But we are republicans, cheerfully accepting all the responsibilities of freedom, and boldly laying claim to all its privileges.

This is, in effect, what the laborers, by coöperation, say to the entrepreneur. Do they give the capitalist his congé after the same fashion? Do they assert independence of him, and ability to go along without him? Not in the least. Not a word of it. Coöperation is not going to rid them of dependence on capital. They are to be just as dependent on the capitalist as were their employers whose place they aspire to fill. They know that they must have just as much and just as good machinery, just as abundant and good materials, as competing establishments under entrepreneur management. So far as they themselves have capital, the results of their savings out of past wages, they will employ these and receive the returns therefrom directly, instead of lending it to the entrepreneur through the savings bank and getting interest therefor. So far as they want capital for their operations over what they can scrape together, they must go to the banks or to private lenders, and pay as high a price for its use as their quondam employer was wont to do; indeed, for awhile at least, probably a higher price, as their credit will not be likely to be so good at first as his. And if coöperation should start earliest, and make most progress, in those industries where the amount of capital required is comparatively small, this would be but a recognition [???] the fact that coöperation has no tendency to free the laboring class from any domination of capital, of which complaint may have been made, but that its sole object is to