VII. (2)

It does not seem to be so generally known as it ought to be that, as far as can be ascertained, the real author of the system I am advocating is Mr. Charles Babbage. Nearly forty years ago his admirable work on “The Economy of Manufactures” was published, and it is truly difficult to overrate the genius which it displays. I never look into that work without discovering that it contains the germ of some truth that has since been recognised, or of some truth that is likely to be recognised. No one can read Chapter XXVI. without seeing how entirely he anticipated the advantages which have accrued from this proposal. The chapter is entitled, “On a New System of Manufacturing,” and I shall ask your permission to read considerable extracts from it.

“A most erroneous and unfortunate opinion,” he commences, “prevails among workmen in many manufacturing countries, that their own interests and that of their employers are at variance. The consequences are, that valuable machinery is sometimes neglected and even privately injured—that new improvements, introduced by the masters, do not receive a fair trial—and that the talents and observations of the workmen are not directed to the improvement of the processes in which they are employed. . . .

“Convinced as I am, from my own observation, that the prosperity and success of the master-manufacturer is essential to the welfare of the workman, I am yet compelled to admit that this connection is, in many cases, too remote to be always understood by the latter; and whilst it is perfectly true that workmen, as a class, derive advantage from the prosperity of their employers, I do not think that each individual partakes of that advantage exactly in proportion to the extent to which he contributes towards it; nor do I perceive that the resulting advantage is as immediate as it might become under a different system.

“It would be of great importance if, in every large establishment, the mode of payment could be so arranged, that every person employed should derive advantage from the success of the whole; and that the profits of each individual should advance, as the factory itself produced profit, without the necessity of making any change in the wages.”

Mr. Babbage then points out that the mode of paying for work in the Cornish mines, by which the miners receive a certain part of the value of the ore raised, fulfils to some extent the conditions of a better system. Admirable results have followed wherever this mode of payment was adopted.

“I shall now,” he continues, “present the outline of a system which appears to me to be pregnant with the most important results, both to the class of workmen and to the country at large; and which, if acted upon, would, in my opinion, permanently raise the working-classes and greatly extend the manufacturing system.

“The general principles on which the proposed system is founded, are:

“(1.) That a considerable part of the wages receiced by each person employed should depend on the profits made by the establishment; and,

“(2.) That every person connected with it should derive more advantage from applying any improvement he might discover to the factory in which he is employed, than he could by any other course.”

Thinking that it would be difficult to prevail upon capitalists to try the new system, involving an apparent change in the division of profits, Mr. Babbage suggests that it should be tried by small companies of working-men. He describes a plan not greatly differing from that on which not a few cooperative companies have since been started, the general principle being that every one should be paid proportionately to the services he has rendered towards the success of the company.

He enumerates the following as among the principal results of such an arrangement:

“(1.) That every person engaged in it would have a direct interest in its prosperity; since the effect of any success, or falling off, would almost immediately produce a corresponding change in his own weekly receipts.

“(2.) Every person concerned in the factory would have an immediate interest in preventing any waste or mismanagement in all the departments.

“(3.) The talents of all connected with it would be strongly directed to its improvement in every department.

“(4.) None but workmen of high character and qualifications could obtain admission into such establishments; because, when any additional hands were required, it would be the common interest of all to admit only the most respectable and skilful; and it would be far less easy to impose upon a dozen workmen than upon a single proprietor of a factory.”

The sixth advantage is perhaps the most important, namely, the total removal of all real or imaginary causes for combination.

“The workmen and capitalists,” says Mr. Babbage, “would so shade into each other—would so evidently have a common interest, and their difficulties and distresses would be mutually so well understood, that, instead of combining to oppress one another, the only combination which could exist would be a most powerful union between both parties to overcome their common difficulties.”

To the following remarks I would especially draw the attention of capitalists, since they clearly point out the mistakes into which the Trades Union Commissioners have fallen upon this point.

“One of the difficulties attending such a system is, that capitalists would at first fear to embark in it, imagining that the workmen would receive too large a share of the profits; and it is quite true that the workmen would have a larger share than at present: but, at the same time, it is presumed the effect of the whole system would be, that the total profits of the establishment being much increased, the smaller proportion allowed to capital under this system would yet be greater in actual amount than that which results to it from the larger share in the system now existing.”

It would be impossible more clearly to anticipate the doubts which have been felt, and the solution of those doubts which has been given by actual experience. Mr. Babbage's remarks about the interference of the law of partnership are rendered inapplicable by the alteration of the law, and the difficulty he notices concerning the discharge of incompetent or ill-behaved workmen does not affect the scheme I am advocating, in which the absolute power of management resides in the hands of the proprietors.