Constitutionalism in the Factory
Reproduced from The International
WHILE the economic development of modern times has destroyed feudalism as a form of government and replaced the personal command of the ruler by the impersonal will of the State, that is, of the community, the last few decades again have created ties which bind the workmen in any given factory like a body of subjects to the individual will of the manufacturer. In many cases, again, patriarchal relations were developed, as formerly in feudal times. Charitable institutions were established for the workmen by the spontaneous and benevolent intentions of the employer. But in general it must be asserted that in the initial period of capitalistic industry the conditions and hours of labor, the wages and general situation of the workmen were affected by two sets of arbitrary influences : on the one hand, the caprice of the manufacturer, on whose personal disposition it depended whether he did or did not give sick funds, old-age pensions or workmen’s dwellings, and on the other hand, the arbitrary action of the impersonal law of supply and demand, which regulated wages without regard to that minimum of subsistence, which might be represented as the purely physical heating of the human machine for a fresh day’s toil.
Under the influence of this last-named law many classes of workmen might, when trade was brisk, temporarily obtain an advantageous rate of wages, while others might be compelled to work for very low wages and be exposed to the deepest distress. Those social and human considerations which demand a
minimum wage and a maximum working
day, in order to prevent race degeneration and enable the workmen to participate like civilized beings in the duties of a democratic community, were utterly ignored under this system. Anarchy tempered by a dash of feudalism reigned in the department of labor conditions.
The individual workman could not save himself by his personal powers from the destiny of his class. An isolated unit, he was but a drop, as it were, in the ocean of the above-named economic law. It was only his combination with his fellow-workmen for joint resistance to the manufacturer that introduced the worker’s personal will and moral energy as a factor capable of substantially altering the combined resultant of all the different factors. This was the first step towards collective bargaining and compulsory arbitration, and so towards the true constitutionalism of the factory.
But a strike was and indeed still is only a weapon against certain excessively injurious consequences of industrial anarchy: as soon as it is over the relation between workman and employer is again one of inequality : there is no longer between them the equality of two parties negotiating a treaty of peace.
As development advances further and creates trade unions, which render permanent the advantages of a strike, the relation between the two parties is certainly altered. The employer may de jure but no longer de facto alter the conditions of labor at his arbitrary will, because if he does he conjures up the danger of a fresh strike. But it is at once evident that even this is not a rightful or even a peaceful state of affairs, but that the normal condition of the factory
ma}r be characterized rather as one of latent strife restrained for the moment by the equilibrium of opposing forces. Every one knows what ruinous interruption to trade, and what loss of wages to the workmen are caused by the constant recurrence of strikes. But it should be observed, further, how much bitterness is aroused in both parties by the numerous industrial struggles over wages, and how the community is split up into hostile and disunited groups. Let it not be urged that this is due to the mere opposition of interests between workmen and employers, for these are precisely two classes which have very important interests in common. Every crisis spells loss to the employer and unemployment to the workmen ; every extension of markets brings profit to the former and to the latter the possibility of getting higher wages. Nevertheless, between the two classes hatred and bitterness exist. If we look at other classes of the community, whose interests clash on important points, traders, for instance and their customers, or even two merchants, each of whom would naturally claim for himself the advantages of a transaction, we nevertheless find as a rule that these disputes are discussed and settled in a sober and dispassionate manner. Each merely seeks to secure his own advantage as far as possible, and once the bargain is concluded it is regarded as a point of honor to carry out faithfully under all circumstances the transaction or contract that has been agreed to.
If the relations between workmen and employers are to be placed on this footing, then in this sphere also the same purely commercial principle must be brought into force. The agreement must be concluded after sober and dispassionate negotiation (let it be ever so wide awake and tenacious) and then there must be the complete fulfilment of obligations freely undertaken.
Between the individual workman and employer such agreements, by which as resulting from their own unfettered wills both parties would consider themselves bound, are impossible, because their positions are unlike. Again and again the workman finds himself tempted to
enforce by the collective step of ceasing work simultaneously with his comrades what he would be unable to obtain in his unfavorable position as an individual. The collective, not the individual labor agreement will represent in its stipulations the real and permanent balance of powers between the contracting parties. Therefore in the overwhelming majority of cases the collective labor agreement would actually hold good for the whole period for which it was entered into. Moreover, it is an easy task to clothe it like every enforceable commercial contract with all the sanctions of law. Not only employers but also trade unions, if they were empowered by statute to enter into such legal contracts, could be made liable for breach of contract, and damages could be enforced by execution on their property. As a matter of fact, in all European industrial States there is a strong tendency towards collective labor agreements, and it would be easy by the introduction of sliding scales to meet the fluctuations of trade, to arrange in the scale for an automatic rise in wages, in good times, when the trade is capable of paying higher wages, requires more workmen and would therefore be forced to pay higher wages even under the operation of the law of supply and demand, and to settle lower figures for slack times. The longer the periods for which such arrangements were concluded the more stable would be the conditions of labor, and the better would employers and employed be protected from the depreciation in values and the loss of wages which are produced by strikes.
But development goes further. Even the collective labour agreement is in a certain sense merely a treaty of peace, the conditions of which are dictated by the relative strength of the two quasibelligerent parties. For educated workmen, who know how to combine in powerful organizations, like the printers in all industrial countries, it is an effectual weapon for gaining stable and suitable conditions of labour. For uneducated workmen less capable of organisation, and particularly for women, it is out of the question. For all these groups of workmen it is only the gradual develop-
ment of the idea of industrial Arbitration Courts that paves the way for conditions of labour which guarantee a suitable minimum of subsistence and in fixing that minimum take into account the requirements of society and humanity.
The intervention of Governments for the settlement of such strikes as particularly threaten the general interests of the State or the population, such as traffic, public lighting or the food supply, may be regarded as the first move in this direction. As often as the Governments in different States brought their influence to bear on the contending parties for the settlement of these conflicts the conditions suggested by them as a basis for conclusion of peace were naturally the outcome of general social consideraations. Thus for the first time factors were introduced which had nothing to do with the comparative strength of the two parties. In dangerous occupations, particularly such as mining, new conditions of labor more thoroughly satisfying the demands of public opinion have been repeatedly introduced by such intervention. The shortening of the hour' of labor in the Austrian coal mines, which the workers could not have enforced through their own powers, was accomplished after a strike, by the passing of a proposal to this effect in Parliament. In several European States legal Conciliation Boards have been recently set up, which, with the addition of impartial assessors, have to give their decision in the event of labor conflicts. This decision is, of course, not binding on the disputants, but as an expression of public opinion brings the powerful opposition of that opinion against that party to the dispute which will not accept the decision of the Board. These Boards have existed in France since IQOI, and a few weeks ago Mr. Churchill, the President of the Board of Trade, made the same provision in England. In Canada these Arbitration Courts have existed since March, 1907. They were introduced to begin with for such industries as are of particular importance to the general interests of the population, railways, telegraphs, coal mines, gas and electric lighting. As regards these industries it is enacted that employers or employed,
dissatisfied with the existing conditions of labor and requiring their alteration, have in the first place to communicate with the other side. If direct negotiations are fruitless an Arbitration Court is appointed, in which one representative of each of the contending parties, and an impartial person nominated by the Government, sit and vote.
During the time that the Arbitration Court is holding its investigation, but for at least thirty days from the first notice, neither strike nor lock-out may take place, and the law inflicts heavy penalties for non-compliance. When the Arbitration Court has given its decision it is published in the Labor Gazette and all the reasons for the decision are submitted to the judgment of public opinion.
The decision of the Court has no coercive force of itself. If workmen or employers are not satisfied with it, and wish to declare a strike or lock-out, they are free to do so. The law secures the great advantage of the unconditional prohibition of hostilities during the thirty days’ grace, and thus shuts out the dangerous consequences of the first impulse of passion. The disputants can then more easily arrange a peaceful settlement by quiet reflection, and, as a matter of fact, the results of the law are extremely favorable. From the coming into force of the law in March, 1907, down to December of the same year, twenty-two disputes were submitted to arbitration, and a peaceful settlement was arrived at in twenty cases. In the two remaining cases a strike certainly was declared, but soon settled through the influence of public opinion.
New Zealand and New South Wales go even further. In these two States, in all disputes between workmen and employers, the decisions of the industrial Arbitration Courts are binding. The results in general have been favorable, but certainly several cases have occurred in which a trade union has not accepted the decision and declared a strike in defiance of it. In New Zealand the exasperation of public opinion at this led, a few weeks ago, to "the acceptance of a law inflicting heavy fines and imprisonment on such employers or workmen as have recourse to lock-outs or strikes. The
law is based on the assumption that a systematic consideration on the one hand of the circumstances necessary for the maintenance of the industry, and on the other hand of an adequate subsistence for the workmen, regard being had to race preservation and the possibility of the workmen enjoying a civilized existence, had to decide conditions of labor, and that impartial tribunals should alone be invited to undertake the task. The weapons of economic war, lock-outs and strikes, are regarded as a violation of the existing legal order and punished as such. On the whole, both employers and workmen are satisfied with the new system and look back on the age of strikes as a period of barbarism. To what extent the latest conflict in New Zealand must modify this opinion the immediate future will show.
Victoria goes even iurther in the systematic settlement by law of labor conditions. There the interested representatives of workmen and employers are not permitted to appeal to the authorities to settle by arbitration some conflict that has broken out, but the conditions of labor are settled in a binding manner at the outset by Commissions on which the delegates of employers and employed sit and vote. These delegates choose an impartial chairman, and if they cannot agree on one he is nominated by the Government. Generally the chairman is an official, clergyman, professor or writer. While it is the function of the chairman to represent the interests of the community and the claims of equity and humanity, the delegates are selected by the workers and employers of that particular industry, the conditions of which are to be laid down. They are therefore experts, brought daily into direct contact with the problems they have to consider: they understand one another, because they know all the details of the matter under consideration, and they never raise outrageous demands, because they would thereby run the risk of alienating the chairman and his casting vote and throwing both into the scales of the opposite party. Hence the decisions are nearly always unanimous. In 1906 I was present at a meeting in Melbourne of the Wages Board of the Carpenters, and the
chairman told me that in all the 3-ears he had held his office not once had he been obliged to give a vote in the determination of a final settlement.
For the very reason that these Wages Boards are not summoned to settle disputes that have already broken out, but meet in a time of peace when passion plays no part and they can conduct their deliberations in unruffled calm, mature decisions are formed which are accepted without demur by the parties concerned for several years, until at last an alteration in the general conditions of life or the position of the industry makes a new deliberation and fixing of fresh wages and conditions of labor desirable.
Under this system the employer has no longer any sort of arbitrary power over the labor and remuneration of his employees. These are settled by the decision of the Commission or the law. To the employer the conditions of labor are as much an established fact as the price of raw materials or the transport charges DÍ the railway. The scope of the law extends also to uneducated and female workers ; and these, who otherwise would never have had of themselves a power commensurate with that of their employers, come equally under the protection of the law. The very weakest are protected from poverty and sweating.
We have reached the end of the line of development, at the beginning of which the caprice of the employer and the arbitrary working of the law of supply and demand settled the conditions of labor and the question of the prosperity or the misery of the worker. Through the trade union and collective labor agreement, the discretionary and obligatory Arbitration Court, development has led up to pure industrial constitutionalism —representative bodies, which may De compared to Parliamentary institutions, settle the conditions of labor. Inasmuch as the first principle of these Commissions is to fix such a minimum wage and a maximum working day as to ensure the material and moral welfare of the laboring classes, inasmuch as the law, to which these Commissions owe their creation, takes this point of view as the principal basis of the decisions, the darkest side of industrial life is removed at once.
The social question of course is not altogether solved by this. It comprises not merely the regulation of the conditions of labor, but the far greater problem of the ownership of the instruments of production. The problem of industrial concentration, the danger of economic life being dominated by powerful private monopolies, the necessity of controlling these by the nationalization of such wholesale production as has reached its highest development, all this applies as fully to Victoria, where industrial constitutionalism is established, as to Europe with its conditions of industrial anarchy. But even when this development has reached its goal, and railways, mines or other industries have passed into the hands of the State, that is, the community, there still remains the problem of the regulation of the conditions of labor, and it calls for a settlement in the spirit described above just as earnestly as in the case of private industry. To-day the relations of the State, for example, the administrations of the State Railways in various countries, to their workmen are substantially the same as those of a private employer to his employes. The question, in fact, is even more acute, because important general considerations show the serious-
ness of conceding to the employes of the State the same right to strike as the employes in private industry. The introduction of constitutional arrangements, in the Australian sense, which regulate the conditions of labor in the nationalized industries influenced neither by the whims of managers and officials, nor by the dangerous independence of the employes, appears to be urgently necessary. Only in this way can the serious objection to all nationalization, that after all there is no change at any rate in the position of the employe, be seriously encountered or dealt with. Nationalization alone, as usually carried out to-day, cannot supply the full satisfaction of social demands. Nationalization, combined with industrial constitutionalism, gives that branch of industry which enjoys it the harmony which drowns all the discords of the present time.
To the friend of the present economic system industrial constitutionalism means a solution of the pressing problem of industrial labor, a stage of development that satisfies him ; but to the man that looks forward to a Socialistic future it means the solution of that problem of labor which would otherwise be evolved once more in that future State of which he dreams.