The Sun.
London, England, 1867-02-19 00:00:00

appear to be to limit to a minimum its own inter-
ference with the contracts of its subjects. But
this view of its functions implies much wisdom as
well as humility on the part of government. It
should, consequently, be endued not with a little
sense, as Oxenstiern thought, but with a very
great share of wisdom, in order to understand and
appreciate its true functions and duty, and to limit
its necessarily extensive powers to those affairs
which urgently require its supervision. Had there
never been any restraint upon international trade,
how many wars would not Europe have been saved.
Had our home trade been always free and joint-
stock contracts unfettered, our civilisation would
at the present day be very different from what
it is. However, it is now too late to reverse the
history of past legislation ; yet it will not have
been fruitless if the lessons it has inculcated be

not forgotten. The present great conflict between
labourers and capitalists shows that an important
point in our industrial progress has been teached.
The crisis, we believe, can''be not only weathered,
but even turned into an occasion of great profit

both to employers and employed, provided that no
external compulsion is resorted to. The Legisla-
ture, indeed, is not likely to contemplate the regula-
tion of the rate of wages by law, and to pass a new
statute of labourers for that purpose. Trades
unions, however, exercise legislative powers which
are not the less cogent on account of their occult
operation. It is hard, doubtless, to prohibit
combinations amongst masters or men, though
every combination implies a certain degree of
intimidation. It is equally hard for either pole
of the industrial world to unlearn its old ways
and revolve in a new cycle. Yet all principle,
experience, and analogy prove that, waiving the
ills incidental to mortality in general, a remedy
for all the alleged social and class grievances of
which we hear so much is to be bought for in the
natural action of social life and contract, unfettered
by any bureaucratic intervention. When the wolf
shall lie down with the lamb, the former will
doubtless consider that there is an identity of in-
terest between him and his old enemy. Idem velle
(ague nolle ; ea demum firma amicitia est. If labour-
ON could be induced to consider their interests

identical with those of capitalists, a high rate of
profit would no longer be an object of dislike to
trades unions. Now, to accomplish this so desir-

able a consummation it is necessary that wages
should participate in every increase of profits.
This is obviously only what is fair ; and trades
unions allege, not without some grounds of fact,
that this is their sole object. A settled proportion
between an increase of profits and wages, how-
ever, is a matter that would meet with great oppo-
sition from some employers, and so in some dis-
tricts widen the existing gulph between employ-
ers and employed. Besides, any unvarying pro-
portion of this sort would operate unfairly in
respect of labourers who were employed in trades
where much manual labour was required in pro-
portion to machinery. Suppose, for instance, that
capitalist A has £lO,OOO invested in machinery,
and employs 50 labourers at a salary of £5O a
year each, and that the rate of profit is 10 per
cent.—the figures we here use are, of course,
hypothetical—A's gross annual returns will be
£13,750. Let us further suppose that all excess of
profits beyond 5 per cent. are divided equally
between A and his 50 employe's. A's annual net
profits will then amount to £937 10s., and the 50
employes will have the balance £312 10s. Let
us now extend our inquiry to capitalist B, who
has no capital sunk in machinery, but pays away
his whole £12,500 capital amongst not merely 50
but 300 employe's at a salary of £5O a year each.
As these 300 receive, in addition to their wages,
only £312 10s. profits, they- are only a third as
well off in this latter respect as A's employes. As
all wages tend, cceteris paribus, to the same level,
wages would rise in B's trade and fall in A's.
Perpetual disturbance of the rate of wages would,
therefore, be the result of fixing a settled propor-
tion according to which profits should be divided
between employers and employed. Every bureau-
cratic or empirical restriction upon the freedom of
contract is thus sure to produce various anoma-
lies and inequalities that cannot be easily excogi-
tated h priori. A company formed on the basis
we have considered would, nevertheless, be,
doubtless, vastly superior, in every industrial re-
spect, to companies which apportioned no profits
to their labourers. Yet, previously to the pass-
ing of the Partnership Law Amendment Act of
1865 this description of companies was virtually
proscribed by law. For down to that date any
employg whose remuneration rose or fell with the
rate of profit realised by his employers was, in
point of law, a partner, and as such liable for all
the debts of the concern. Happily, the Act re-
ferred to has altered this, and adopted the same
principles of free trade and contract in respect of
dealings between private employers and employes
which it had, by the Limited Liability Acts of
1855 and 1862, recognised in respect of joint-
stock companies. A vast number of co-operative
associations, founded on the principle we have
described, have already sprung up ; and, what
forms a pleasing contrast to the " Limited"
bubbles, they are all, we believe, without a single
exception, in the most prosperous condition. The
usual planlis for the masters, first of all, to Yeserve
a certain per centage out of the profits as interest
on capital, then a slight additional per centage
to constitute a reserve fund, and, finally, to di-
vide all remaining profits between themselves and
their operatives. These, therefore, participate in
every increase of profits consequent upon a rise of
prices or a reduction in the cost of manufacture.
There is, perhaps, reason to contend that the
labourers ought to get more than half of every
increase of profits. It is consolatory, at all events,
to every hater of Qurism, St. Simonism, and
every other description of socialism, to perceive
that industrial problems are undergoing a solution
by persons who are unconscious of the import-
ance of their undertakings to society in general,
and that these problem are being worked out
not through any bureaucratic empiricism, but by
the ordinary action and development of free con-
tract. There appears, however, to be a still
more excellent way than that which we have de-
scribed for retaining labour in permanent harmony
with capital. Everyone knows what the labouring
classes can effect by combination in respect of po-
litical matters. Political power, in fact, always
has its ultimate foundations in numbers. This
will, perhaps, be readily admitted. But what is
equally true, though not so obvious, is, that wealth
•is essentially derived from the same source. Were
all the capital of England annihilated--yet, if the
population could live, suppose, by means of credit
for a couple of years—the country would again
present the same plethora of wealth that, it does
now. Indeed, wars have often completely anni-
hilated an the wealth of extensive provinces. Yet,
a few years restored there the status quo. Labour,
in short, is the immediate and effective source of
wealth, of which capital is but a condition. In
the contest, then, which is at present being waged
between labour and capital (and we cannot, indeed,
refer to a time or place where the same industrial
forces were not in some degree of antagonism), the
ultimate victory will be on the side of labour ;
or, rather, labour will be associated in the em-
pire of trade with its present opulent rival. It
is only when the Partnership Law Amendment Act
and the Limited Liability Acts shall have been a
reasonable time in operation that the labour power
shall begin to exhibit its native and indomitable
strength. The income of the labouring class in
England is supposed to amount to about 400
millions a year. The savings which each labourer
can make, indeed, are trilling, yet if they com-
bined to save with as much earnestness as they do
occasionally to strike or to reform the Constitu-
tion, they could in a few years accumulate as much
capital as would accomplish their redemption from
their present supposed bondage. In order to con-
trol the rate of wages (assuming that such an
object requires any active effort beyond the or-
dinary play of demand and supply), it is not neces-
sary that labourers should monopolise all the capi-
tal in the kingdom. It is sufficient for this purpose
that they can compete with capital and with its
own arms, wealth. Having achieved this result
in any one leading department of trade, they
would either embarrass their rivals by the supe-
rior attractions they had for workmen in their
line ; or else, by paying only the same rate of
wages, they could, by relinquishing a portion of
the existing rate of profit (which they allege to
be excessive) ; undersell all competitors. The
prosperity of such companies would be unparal-
leled, and capitalists would be compelled to follow
in their wake. We are assuming that the success
of these companies finds a subjective reflexin the
justice of the principles on which they are con-
ducted. As, then, such companies would employ
other persons besides shareholders as labourers,
and as few of the latter would perform precisely
the same amount of work in any one month, a just
basis for settling the rate of wages, as dis-
tinguished from profit on capital, would be soon
discovered. At all events, a rate long acqui-
esced in by shareholders who worked less than the
average might be fairly considered the proper
rate. Such a common measure of the rates of
'wages and profits would be sure to be evolved on
the
.periodical settlements of accounts. Compa-
nies thus conducted bona fide would act as practical
arbitrators of the proper rates of wages and
profits. Like the middle term in logic, they would
reconcile the long antagonist elements of labour
and capital, and apportion to each its due allow-
ance of the general produce of industry. Whether
examined externally or internally, they thus appear
to constitute the true remedies for low wages.