Thereis，however，nofinalconflictbetweentheclaimsofpersonallibertyandthesocialorder。Eventhoughtheprocessofreadjustmentbetweentheclaimsofindustryandleisureshouldinclinegenerallyinfavourofmoreleisure，withtheprimepurposeofnourishingmorefullytheprivatepersonalityandaffordinglargerscopeforhomelifeandrecreation，societyisnottherebytheloser。Forsomeofthefinestandmostprofitableusesofleisurewillconsistofthevoluntaryrenderingofsocialservicesofanon-economicorder。Ialludeinparticulartoafullerparticipationintheactivefunctionsofcitizenship，amoreintelligentinterestinlocalandnationalpolitics，inlocaladministrationandinthenumerousformsofvoluntaryassociationwhicharegenerallysocialintheservicestheyrender。Moreleisureisaprimeessentialofdemocraticgovernment。
Therecanbenoreallyoperativesystemofpopularself-governmentsolongasthebulkofthepeopledonotpossessthesparetimeandenergytoequipthemselvesforeffectiveparticipationinpoliticsandtotakearegularpartindeliberativeandadministrativework。Thisisequallyapplicabletoothermodesofcorporateactivity，thelifeofthechurches，friendlysocieties，tradeunions，cooperativesocieties，clubs，musicalandeducationalassociations，whichgotomakeupthesociallifeandinstitutionsofacountry。Leisure，demandedprimarilyintheinterestsoftheindividualforhispersonalenjoyment，willthusyieldrichnutrimenttotheorganiclifeofsociety，becausetheindividualwillfindhimselfdrawnbythesocialneedsanddesiresembeddedinhispersonalitytodevoteportionsofhisleisuretosocialactivitieswhichcontributetothecommonwealthassurelyasdotheeconomictasksimposeduponhiminhisdailyindustry。
NOTES:
1。Times，23Dec。1912。
2。ThebestthatcanbesaidforthiseducationhasrecentlybeensaidbyMr。GeorgePeel，whowritesofLondonchildrenTheFutureofEngland，p。96:
\'Theyspend28hoursaweekcontinuouslyduringnineyearsunderfairlysatisfactoryconditionsofair，warmthandlight，engagedinwholesomeandstimulatingpursuits。Consideringwhattheirhomesoftenare，thisitselfmustbereckonedanimmensebenefit。\'
CHAPTERXVI:THERECONSTRUCTIONOFINDUSTRY
PartI:CAPITALANDLABOUR
§；1。Sinceindustryisagreatcooperativeprocessforthemutualaidofmembersofsociety，itiswellthatthefactshouldbeheldintheconsciousnessandwillofindividualsasclearlyaspossible。Forthisconsciousrealisationofthemeaningofindustrywillhaveahelpfulinfluenceontheirintelligenceandfeelings。
Nowtherearegeneralrelatedtendenciesinmodernindustrywhicharepowerfulobstaclestothisrealisationofthesocialmeaningofindustry。
Thefirstisthegrowingsubdivisionoflabourwiththerelatedexpansionofmarkets。Whenamanmadeawatchorapairofshoesandsoldthemtoaneighbour，orknowncustomer，hisworkhadforhimadistincthumansignificance。
For，makingthewholeofathing，herealiseditsnatureandutility，while，seeingthemanwhoworehiswatchorshoes，herealisedthehumanvalueofhiswork。Nowheperformsoneofsomeninetyprocesseswhichgotomakemanywatches，orhetrimstheheelsofinnumerableshoes。Theotherprocesseshecannotdo，anddoesnotaccuratelyknowhowtheyaredone。Hisseparatecontributionhasnoclearutility，andyetitsolelyoccupieshisattention。
Notonlydoeshethuslosegraspofthemeaningofhiswork，buthehasnoopportunityofrealisingitsconsumptiveutility。Forhecannotknoworcareanythingabouttheunknownpersoninsomedistantpartoftheworldwhoshallwearthebootsorwatchbehelpedtomake。Thesocialsympathyofcooperativeindustryisthusatrophiedbytheconditionsofhiswork。
Divisionoflabour，initsfirstintent，thusdivideseachworkerintoasectionofaproducer，andseparateseachsetofproducersfromtheconsumersoftheirproducts。
Though，therefore，thisdivisionoflabourisinitselfafinermodeofcooperation，itisnotrealisedassuchbythosewhoaresubjectedtoit。
§；2。Theseconddehumanisingandderationalisinginfluenceisthestresswhichtheoperationsofmodernindustrylayoncompetitionbetweentradeandtrade，businessandbusiness，workerandworker。Nograverinjuryhasbeeninflictedonthemindofman，inthenameofscience，thantheprepotencewhichtheearlyscienceofPoliticalEconomyassignedtothecompetitiveandcombativeaspectsofindustriallife。Torepresentcommercebetweenindividualsandnationsasa\'competitivesystem\'，mainlydependentforitssuccessfuloperationupontheabsorptionofeachmaninseekinghisowngain，andingettingthebetterofothersinhistrade，wasanerrorofthefirstmagnitude。Norwasthiserrorsufficientlycorrectedbythequalifyingtheorythatfromthispursuitbyeachofhisseparategainsthegreatestgoodforallwouldsomehowemerge。For，bylayingthestressuponthecompetitiveaspectofindustry，thisteachingstiedthegrowthofintellectualandmoralsympathybetweenthevarioushumancentresoftheindustrialsystem，andimpairedthesenseofhumansolidaritywhich，apartfromitsspiritualvalue，isthemainspringofefficienteconomicorganisation。Thepresentationofindustryascompetitionwithattendantcooperation，insteadofascooperationwithattendantcompetition，hasgreatlycontributedtothepopularmisunderstandingofcommerce，alikeuponitsdomesticanditsinternationalscales。1
Competition，ifdefendedasasociallyusefulmethodofindustry，must，likedivisionoflabour，beprovedtocontributetocooperativeends。Thegeneralunderlyingassumption，thatitwilldoso，wehaveseentobefalse。
Equallyunjustifiedhavebeentheaccountsofactualindustrywhichassumethegeneralprevalenceoffreecompetition。Atalltimestheareaandlibertyofeffectivecompetitionbetweenbusinessandbusiness，workerandworker，havebeenlimited，andtendinrecenttimestocloserlimitation。
Butifdivisionoflabourandcompetition，apartfromarealisationoftheircooperativevalues，aredehumanisingandantisocial，solikewiseisthegrowinganonymityofmodernbusiness。\'CompagnieAnonyme\'isthesignificantFrenchnameforaJointStockCompanywithitsunknownshareholders。
Butthisdepersonalisingprocessiseverywhereinseparablefromthemagnitudeandintricacyofmodernbusinessesandmodernmarkets。Thecapitalbelongingtoacrowdofpersons，whoarestrangerstooneanother，ismassedintoaneffectiveproductiveaggregate，andissettocooperatewithmassesoflabourpowerwhoseownersaredivorcedfromalldirectcontact，eitherwiththeownersofthetoolsandmaterial，orwiththepurchasersoftheproduct。Aneffectivecomradeshipamonglargenumbersofworkers，distributedoverdiverseprocessesandoftenseveredwidelyintheirplacesofwork，isalsodifficulttomaintain。Agreatmodernbusinessisinitsstructurelesseffectivelyhumanthanwasthesmallworkshopwhichitdisplaced。
Oneeffectofthisweakerhumanityofthebusiness，especiallyintherelationsbetweencapitalandlabour，employerandemployee，hasbeentoshiftthesentimentalattachmentoftheworkerfromhisbusinesstohistrade-union。
Heislessamemberofabusinessfirm，servingsomedirectlyproductivefunction，thanamemberofalabour-groupextendingovertheareaofalocalorevenanationaltrade。
§；3。Thisconsiderationbringstothefronttheantagonismbetweencapitalandlabourwhichhasinmoderntimesassumedevergraverdimensionsandclearerconsciousness。Inconsideringtheindustrialsystemasaneffectiveeconomicharmonyitisnoteasytodeterminewhetherthecooperativeorthecompetitiveforcesaregainingground。Ontheonehand，thecompetitionbetweenbusinessesinthesametradeisinallgreatstapletradesgivingplacetocombinations，whichnotonlyunitetheformerlyconflictingbusinesses，butweldintocloseunitythecapitalofvariousrelatedtrades。Trusts，cartels，pools，conferencesandvariousexperimentsinfederalcompacts，forregulatingoutputandsellingprices，areeverywhereengagedinsubstitutingindustrialpeaceforwar。Directandconsciousharmonythusgrowsamongformerlyantagonisticcapitalistsandemployers。Theorganisationoflabourintheseveraltrades，onthebasisofastandardwageupheldbycollectivebargaining，marksasimilarthoughlesscloseharmonyonthesideoflabour。
Buttheseadvancestowardsconsciousharmonyamonghithertocompetingcapitalistsandlabourershavebeenattendedbyawideningandintensificationoftheconsciousantagonismbetweencapitalandlabourwithintheseveraltrades。Indeed，therearesignsofagrowingextensionofcombinationfordefinitelyhostilepurposes，arangingofcapitalontheoneside，labourontheother，animatedbyabroadclassconsciousnesswhichisnewinthehistoryofindustry。
Infact，ithasallalongbeeninevitablethatthecombinatoryforces，whichappearedtomakeforsocialsolidarityinindustry，shouldbebroughtupatwhatappearstobeanimpenetrablebarrier，theclasshostilitybetweentheownersofinstrumentsofproductionandtheworkers。ForthishostilityisinherentinthedistributionwhichevokesanUnproductiveSurplus。Solongaseconomicadvantagespermitsomegroupsofcapitalists，landownersandownersoforganisingpower，totakeforthemselveslargemassesofunearnedincome，whichmighthavegonetoimprovetheconditionsoftheworkers，hadtheybeenabletodivertitintowages，nofalseplatitudesabouttheharmonyofcapitalandlabourwillsecureindustrialpeace。
Forthatharmony，aswehaveseen，onlyextendstotheportionoftheproductdistributedascosts。Now，theenormouslyincreasedproductivityofmodernindustryhasresultedinanincreaseofthesizeandrelativeimportanceofthesurplus，andthelargeproportionofthatsurpluswhichisdistributedunproductivelyin\'unearned\'incomerepresentsagrowingelementofdiscord。
Thisrealdivergenceofeconomicinterestsbetweencapitalandlabourisnotthentobebridgedbyaneconomyofcostsbaseduponthefactthat，sinceeachfactorneedstheother，itisinterestedinitsproperremuneration。
Thecomplaintsoftheexistingsystemmadebytheworkersnotmerelytestifytoagrowingrealisationoftheireconomicweaknessandagrowingsensitivenesstotheinequitablemodesofdistribution。Theyarefoundedonthebeliefthatuponthewholedistributionisbecomingmoreinequitableandmorewasteful。Forthoughtheabsoluteshareoftheworkersandthestandardofrealwageshavebeenrisinginmostcountries，2thatrisehasnotbeencommensuratewiththeaggregateincreaseofwealth。Inotherwords，alargerproportionofthetotalispassingintounproductivesurplus，thefactorofdiscord，asmallerintocosts，thefactorofharmony。Ifthisistrue，itimpliesinevitablyaworseningoftherelationsbetweencapitalandlabour。For，solongastheownersofstrongorscarcefactorsofproductionarerewardedaccordingtotheirstrengthorscarcity，nopeaceispossible。
Theabsorptionoftheunassimilatedmassofwealthinahigherstandardoflifefortheworkersandanenlargementandimprovementofthepublicservicesisessentialtosecurethesubstanceandthesenseofsocialharmonyinindustry。
§；4。LeavingoutforthemomenttheclaimoftheStateforpublicservices，thissociallysounddistributionoftheproductcouldonlybeachievedbyarecastingofthegovernmentalstructureoftheBusiness，theTradeandindustry。Towardsthisgovernmentalreformmanydifferentexperimentsareafoot。Variousmodificationsoftheordinarywage-system，bywayofbonusesuponindividualanddepartmentalefficiencyoflabour，aretried。Moredirectattemptstoharmonisetheinterestsofcapitalandlabourwithinthebusinesstakeshapeinschemesofprofit-sharing，whicharesometimescarriedfurtherintothecloserformofco-partnership，bywhichtheworkersownashareofthecapitaland，byvirtueofthisownershipmaybeadmittedtoashareoftheadministration。
Regardedasmethodsofharmonisingcapitalandlabourinthebusinessstructure，mostoftheseschemesappeartobeofdubiousworth，whenweapplythepropertest，viz。，theabilitytodivertintowagesaportionoftheunproductivesurplus。For，thoughthestimulusofa\'bonus\'oraso-called3shareofprofitmayincreasetheabsolutewageoftheworkersinthebusiness，ifatthesametimeitproportionatelyincreasesthedividendorprofit，itdoesnothingtoreduceeithertheaggregateortheproportionofunproductivesurplus。Moreover，iftheincreasedproductivityoflabourundersuchastimulusisattendedbyenhancedintensificationofeffortinmuscleorinnerve，withaccompanyingexhaustion，thetotalutilityoftheprocesstotheworkermaybeanegativequantity，whentheincreasedhumancostofproductionhasbeensetagainsttheutilityofthehigherincome，lessadvantageouslyconsumedbyreasonoftheexhaustion。Again，thoughmanyoftheseschemesexpresslyinducetheworkerstobecomesmallshareholdersinthebusiness，byapplyingthe\'bonus\'or\'profit\'tothepurchaseofshares，nowherehasthisownershipbytheworkersbeenpermittedtogosofarastogivethemanydeterminantvoiceintheadministrationofthebusiness。Finally，manyoftheseschemesbyexpressintention，nearlyalloftheminactualtendency，weakentheattachmentoftheworkersinthesebusinessestotheirfellow-workersinotherbusinessesbelongingtothetrade。So，whateverpowerproceedsfromcollectivebargaining，forraisingwagesandimprovingtheotherconditionsofemployment，isdiminishedbytheseattemptstoharmonisethecapitalandlabourwithintheareaofthesinglebusiness。
Itissignificantthatnearlyallthebusinesseswhereco-partnershipshowssignsofenduringsuccessarelegalmonopolies，orareotherwiseprotectedfromfreecompetition，sothatthepricesforthecommoditiesorservicestheysellcontainaconsiderableelementofsurplus。Afractionofthissurplusisdivertedfromunproductiveintoproductivepurposesbyasubsidytowages。Inthecaseofgas-works，themostconspicuousexample，thisprocessisfurtheredbythefactthatlegalrestrictionsupondividendsmakewhatatfirstsightappearsapolicyofgenerositytolabour，costlesstocapital。
§；5。Thiscriticismofthedefectsoftheseprivateexperimentsinindustrialpeaceisreinforcedbytheexperienceofcooperativemovements。
Ofthecompletelyself-governingworkshoporotherbusinessinwhichthewholebodyoftheworkersaresoleownersofthewholecapitaltheyemploy，therehavebeentoofewexamplestoenableanyconclusiontobedrawn。
Butnearlyallthecaseswheretheactualfulladministrationofabusinesshasbeeninthehandsofthoseemployedhavebeensignalfailures，saveinrareinstanceswherethepossessionofsomeskillorsituationendowedwithascarcityvaluehasassistedthem。Experimentsintheself-governingworkshopmakeitevidentthatdirectgovernmentbytheworkersintheircapacityofproducersistechnicallyworsethangovernmentbytheownersofthecapital。Theselectionandtheremunerationofabilityofmanagementarealwaysfounddefective，andtheemployeesareoftenunwillingtosubmittoproperdiscipline，evenwhentheyhaveelectedthepersonswhoshallexerciseit。Afewsuccessfulexperimentsconductedinfavourablecircumstances，i。e。，whereaspecialmarketisavailable，orwhereonlyasectionoftheemployeeswieldthepowerofadministration，affordnoconsiderablegroundsofhopeforthismodeofcooperativesettlement。
Thusthereseemsnogroundforholdingthatanyreallysatisfactorysettlementoftheconflictsbetweencapitalandlabourcanbegotbyprivatearrangementsofaprofit-sharingoracooperativecharacter。
PartII:PRODUCERANDCONSUMER
§；6。Beforeconsideringmoredefinitely\'socialistic\'remedies，itisbest，however，toopenouttheotherconflictofinterest，betweenproducerandconsumer。Itis，ofcourse，oftenheld，evenbythosewhorecognisesomerealityintheoppositionbetweencapitalandlabour，thatthesupposedoppositionbetweenproducerandconsumerhasnorealfoundation。
Whenproducerscompete，thegainsofsuchcompetitioninlowerprices，betterquality，etc。，dropintotheconsumer\'slap。Evenwhereproducerscombine，orasinglebusinessholdsthemarket，itissupposedthatthemonopolistwillgenerallyfinditmostprofitabletofurnishasoundarticleatamoderateprice。
Butthisnaturalharmonybetweenproducerandconsumerissubjecttopreciselythesamequalificationasthatbetweencapitalandlabour。Producerandconsumerarenecessarytooneanother，thereiscommunityofinterestsuptoalimit。Butbeyondthatlimitthereisanequallynaturalconflict。
Itistruethatwhereproducerscompetefreelypricesarecutdownfortheconsumer。Butitisbynomeanstruethathetendstogetthecheapestgoodswhichcurrentartsofproductionrenderpossible。Fortheexpensesofcompetition，whichareenormous，aredefrayedbyhiminthepricehepays。Nordoesfreecompetitionsecurequalityofproduct。Itstimulatestheartsofadulterationanddeceit，andsetsthecunningoftheskilledproduceragainstthesimplicityoftheunskilledpurchaser。While，therefore，itmaybeurgedthatwherecompetitionofproducersiseffective，comparativelylittle\'surplus\'passesintotheirhands，thewasteofindustrialpowerthroughthemaintenanceofexcessivemachineryofproductionandofdistributionisagravesocialloss。
Stilllesscanitbeadmitted，thatwherecombinationhasdisplacedcompetition，theconsumer\'sinterestsaresafe。Onthecontrary，itisrecognisedbyalleconomiststhatwhereanyeffectivemonopolyisestablished，thesellingpricestoconsumerswillalwaysbesuchastosecureasurplusprofittotheproducer。Pricesmaynotalwaysbeashighas，orhigherthan，theywouldhavebeenifawastefulcompetitionweremaintained，buttheywillalwaysbesuchastoextractahigherprofitthanisneededfortheremunerationofcapitalandability。Wherethearticlessoldarenecessariesorprimeconveniencesoflife，anddonotadmitofeffectivesubstitutes，thepriceswillbeindefinitelyhigherthanundercompetition，andtheconflictbetweenproducerandconsumermoreacute。Sinceundermoderncapitalismanever-increasingnumberof\'routine\'requirements，coveringthechiefnecessariesoflargepopulations，arepassingundersomeformorotherofeffectivecombination，itisclearthattheproblemofindustrialpeacemustcometoconcernitselfmoreandmorewiththeconflictsofproducerandconsumer。Atpresenttheconsumer，atanyrateinEngland，largelyrealisesthisconflictasaby-productofthestrugglebetweencapitalandlabour。Thoughthestrikesandlock-outs，whichexpressthatstruggle，disastrouslyaffecthiswelfare，heistoldthattheyarenothisbusiness，andhehasnorighttointerfere。Whereasettlementhastakenplacebetweencapitalandlabouronabasisofhigherwagesorshorterhours，hefindsthecostofthissettlementisusuallypassedontohiminhigherratesorprices。
Asjoint-agreementsbetweenemployers，federationsandtradeunionsbecomemorecommonandmoreeffective，asmethodsofconciliationandarbitrationreceivelegalsanctionandassistance，aswage-boardsextendtonewfieldsofindustry，thefalsehoodandthesocialwrongwhichunderliethemaxim\'caveatemptor\'becomemoremanifest。Theconsumerwillbecomeincreasinglymoreimpotenttoprotecthimselfagainstthedepredationsoforganisedgroupsofproducers。Indeed，experienceprovesthatevenwherecombinationsaresubjecttothesanctionandcontroloftheState，whichtheoreticallyisdedicatedtotheserviceofthepublicasawhole，andmightatleastbeexpectedtoholdthebalanceevenbetweenproducerandconsumer，producers，interestsarepreferred。InthepresentpolicyofstatecontrolofRailways，andinthevariousschemesfortheextensionofWageBoardlegislation，thereisnoproperrecognitionoftheinterestsoftheconsumer。Anill-devisedlopsidedSocialismisspringingup，thelikelyresultofwhichappearstobetosetupgroupsofselectedandpreferredemployments，whosehigherwage-billwillinrealitybedefrayednotoutofrents，surplusprofitsoranyotherunearnedincome，butinlargemeasureoutofthereductionofrealwageswhicharbitraryrisesofconsumers，priceswillimposeuponotherwage-earners。Aflagrantinstanceofthisdefectivesocialpolicyissuppliedbytherecentarrangementbywhichtherailwaysofthiscountryhavebeenempoweredbygovernmenttoraisethewagesoftheiremployeesbyreducingtherealwagesofthegeneralbodyofthewage-earners，whoarecalledupontobearalargepartofthecostinthehigherpricesofcommoditieswhichfollowsupontheriseofrailwayrates。
§；7。Now，admitting，aswemust，thatarealdivergenceofinterestsbetweenproducersandconsumersmayandmustariseintheordinarycourseofindustry，whatremedyispossible？
Thereisonelargeworking-classmovementwhichseemsexpresslydesignedfortheprotectionoftheconsumingpublic。IalludeofcoursetothegreatCooperativeMovementontheRochdaleplan，inwhichthesupremecontrolisvestedintheconsumersandtheirrepresentatives。Howfardoesthisschemerepresentatruereconcilementofproducers\'andconsumers，interests？
Averylittleinvestigationwillshowthat，howeverexcellenttheotherservicesitrenderstotheworking-classes，itsconductofbusinessaffordsnocompleteharmonyoftheinterestsoftheseveralfactors。
Foritsentirestructureandworkingaremotivedbytheintentiontoabsorbinrealwagesbymeansofdividendsonpurchasesthe\'profits\'
towhichinordinarytrademostoftheunproductivesurplusseemstoadhere。
Bydispensingwiththeprofitsofvariousgradesofmiddlemen，byreducingtheexpensesofmanagement，bysavingmostofthecostsofadvertisingandotherincidentalcostsofdistribution，muchsurplusisdivertedintorealwages。But，regardingthisschemefromthestandpointwhichimmediatelyconcernsus，asareconcilementofcapitalandlabourwithinthebusiness，wefindanobviousdefect。Thereisnothinginthetheory，orcommonlyinthepractice，ofthecooperativestoreorworkshop，toevokefromtheemployeesanyspecialinterestinitssuccessfulconduct。Iftheyaremembers，theydoindeedgetinthiscapacityagainequaltothatenjoyedbyothermembersnotemployedinthebusiness。But，asemployees，theyhavenovoiceintheadministrationandnoshareinthegains。Where，asintheScottishWholesale，aprofit-sharingschemeisattached，thisschemeisexposedtothesamecriticismthatwehaveappliedtootherprofit-sharingschemes。
Thereisnosecurityaffordedbythiscooperativeformofbusinessforthefullreconcilementoftheclaimsofcapitalandlabourwithinthebusiness。
But，afterall，itmightbeobjected，thatdoesnotreallymatter。For，iftheworkerinacooperativemillorstoreisalsoacooperativeconsumer，hewill，assuch，enjoyacollectivegainasgreatashecouldhopetogainifhewereassignedaspeciallienuponthesurplusthatemergedfromthesuccessfulconductoftheparticularbusinessinwhichheworked。Itwillbehisintelligentinterest，asconsumer，tohelptoelectandtomaintainaneffectiveadministrationinallthevariousproductiveanddistributivebusinessesfromwhicharederivedthehalf-yearlydividendonpurchaseswhichhereceives。
Nowiftheworking-classesofthenationmadealltheirpurchasesthroughcooperativestores，andifthesestores，intheirturn，boughtwhattheysellexclusivelyfromcooperativeproductivebusinesses，andifallworking-classconsumerswereemployedinthesecooperativebusinesses，asolutionofthesocialproblemoncooperativelinesmightbeplausible。Foranysurplusmadeatanystagewouldflowintheordinarycourseofeventsintoconsumers\'
dividends，forminganadditiontotherealwageswhichtheyearnedasproducers。
Norneeditmatterthatthecooperativeconsumerswerenotfullownersofallthecapitaltheyneededtoemploy，providedtheycouldborrowitinafreemarket。Iftheagriculturalandmininglands，whoseproducetheyrequired，didnotbelongtothem，therewouldindeedremainalargeleakageintheshapeofeconomicrent。Butthenatureoftheso-calledlandmonopolyisnotsuchastopreventthecooperativeconsumersfromtakinginrealwagesthegreatbulkofthesurpluswhichotherwisewouldhavegonetocapitalistsandentrepreneursinunearnedincome。
Unfortunately，largeandimportantasisthisCooperativeMovement，itfallsfarshortofthefullconditionsherelaiddown。Themajorityofthewage-earnersarenotmembersofCooperativeStores:thosewhoaremembersonlypurchasecertainsortsofgoodsatthestore:owingtotheslighterdevelopmentofproductivecooperation，alargeproportionofthegoodssoldinthestoresareboughtintheordinarymarkets:comparativelyfewofthecooperativeconsumersareemployedincooperativebusinesses。
Therearelargetractsofindustry，suchasagriculture，mining，transport，building，4metal-workingandmachine-making，whichtheCooperativeMovementhashardlytouched，noraretheresignsofanyrapidextensioninthesefieldsofenterprise。Inpointoffact，cooperationhasalmostentirelyconfineditselftotradesandindustrieswherecompetitionisnormallyfree，andwheretheobjectofcooperationhasratherbeentosaveandsecureas\'divi\'certainordinaryexpensesofcompetitivebusinessesthantoinvadethestrongholdsofhighlyprofitablecapitalismwhereunearnedsurplusesarelarge。While，then，aconsiderableproportionofthetotalworking-classincomeisexpendeduponarticlesboughtinthestores5andvaluableeconomiesareaffected，onlyasmallproportionoftheelevenmillionspaidindividendsandinteresttoconsumerscanbetakentorepresentunproductivesurplusabsorbedintowages。While，therefore，theadvanceoftheCooperativeMovementinrecentyears，alikeinmembership，involumeoftradeandinprofits，hasbeenrapid，acarefulexaminationofthefieldofcooperativeprogressdoesnotindicateanysolutionofthemainproblemofdistributionalongtheselines。TheareasofreallyprofitableprivateenterprisearetoallappearanceunassailablebytheCooperativeMovement。
§；8。ButwefindwithintheCooperativeMovementsomeexperienceswhichshedlightupontheproblemofbusinessadministration。Ifthetrulysocialnatureofthe\'business\'istobeexpressedinitsgovernment，theRochdaleplan，uponwhichthemaincooperativestructurehasbeenerected，contributesanelementofreallyvitalimportance。Itassertsthatabusinessexists，nottofurnishprofittothecapitalistemployerorwagestotheworkers，butcommoditiestoconsumers。Theconsumer，beingtheendandfurnishingbyhispurchase-powerthestimulus，shouldholdthereinsofgovernment。Heistheowner，heshallrule，heshallreceivethewholegain。Thisisacompletereversaloftheordinaryideaofthebusinessworld，towhichabusinessexiststosecureprofitstobusinessmen，theworkerandthemarketconsumerbeingmereinstrumentsinprofit-making。
Hardlylessdoesitcounterworktheordinaryideasandfeelingsoftheworking-man，forwhomthebusinessexistsmerelyasameansofremunerativeemployment，andwhosesoleideaofreformistosecureinhigherwagesandimprovedconditionsoflabourasmuchoftheprofitsaspossible。Toneitherdoesitforonemomentseemreasonablethattheconsumershouldinterfereintheadministrationofthebusiness，ortakeanyshareinitsgains，savesuchasmustcometohimintheordinarycourseoftrade。
ThusthesuccessoftheRochdaleplanisadramaticassertionofarevolutionaryideaintheorganisationofbusiness。Itisprovedthatlargenumbersofroutinebusinessescanbeconductedbyandforconsumers。Butitcannotbeassumedthatthisconcentrationofthemeaning，theutilityandthegovernmentofindustryintheconsumer，hascompletevalidity。
Itmaybecalledconsumers，socialism，asdistinguishedfromthesortofproducers，socialismwhichprevailsamongtradeunionists。Asthelatteraimsatcontrollingbusinessesinordertodivertdirectlyintowagesallsurplusprofit，sotheformeraimsatcontrollingbusinessesinordertodivertthesamefundintoconsumers\'dividends。Now，iftheproducersandtheconsumersofthegoodsproducedinanybusinesswerethesame，itmightseemamatterofindifferenceinwhichcapacitytheytookthegain。Buttheyarenot。Theworkersinaparticularmillorstorebuyfortheirownuseaveryminutefractionofthegoodsthereproduced。Eveniftheworkers，bymeansoftheirunionsortheircooperativesocieties，couldcapturethewholeindustrialmachinery，itwouldstillremainamatterofimportancehowfartheypaidthemselvesinhigherwages，howfarinconsumers，dividends。
Forunlesstheirclaimsasproducersandasconsumerswereproperlyadjustedinthecontroloftheseveralbusinesses，therewouldbelittleornothingtodistribute。
Fewthoughtfulcooperatorswillclaimfinalityandall-sufficiencyforthecooperativeideaasembodiedinthepresentmovement。
Thepersistentstrugglesinthemovementitselftotempertheabsolutismoftheconsumerbytheassertionofcooperativeemployeestoahigherrateofpaythanobtainsintheoutsidelabourmarketandtoashareoftheprofits，isaninterestingcommentaryontheproblemofsocialadministrationofthebusiness。Itiswidelyfeltthattheviewthatabusinessexistsinordertosupplyutilitiestoconsumersisdefectiveasaprincipleofbusinessgovernment。Theclaimoftheownersofthefactorsofproductionemployedinthebusinesstosomevoiceintheconductofthatbusinessisnotlightlytobesetasidebyassertingthatthefactorsofproductionaremeremeanstotheconsumer\'send。Iftheconsumersthemselvesowntheshare-capitalorborrowothercapitalatmarketrateswithgoodsecurity，theissueofthecontrolofcapitalneednotarise。Butthelabouremployedinacooperativebusinesshasahumaninterestintheconductofthebusinessseparatefromthatoftheconsumers。Invirtueofthishumaninterest，theseworkersimpugnthedoctrinethatthebusinessexistssolelyfortheconsumers，andinsistthattheirhumaninterestshallbeadequatelyrepresentedintheconductofthebusinessandthedistributionofitsgains。
§；9。Thosewhohavefollowedandacceptthegeneralprinciplesofouranalysisofindustryintohumancostsofproductionandhumanutilitiesofconsumptionwillbedisposedaprioritoaccepttheviewthat，intheequitablecontrolofeverybusiness，theinterestsoftheworkeraswellasoftheconsumersshouldberepresented。Regardedfromthesocialstandpoint，itisasimportantthatgoodconditionsofemploymentshallprevailinabusiness，asthatgoodarticlesshallbefurnishedcheaplytoconsumers。
Nor，aswerecognise，canweassumethatanenlightenedbusinessgovernmentbyconsumers，anymorethanbycapitalists，willnecessarilysecurethesegoodconditionsforemployees。Definiteandnotinconsiderableinstancesofsweatinginsidethecooperativemovementitselftestifytotherealityofthisneed。Butitisurgednotmerelyongroundsofequity，asaprotectionagainstpossibleabusesofpowerbyconsumersortheirrepresentatives，butongroundsofsoundeconomy。Forifitbeadmittedthattheemployeesinacooperativebusinesshaveaspecialhumaninterest，itisidletoarguethatitissociallyadvantageoustoleavethisinterestwithoutrepresentationintheconductofthebusiness。
Thecooperationwhichassignsallpowerandallgaintotheconsumerisinfactvitiatedbythesamesocialfallacyasthesyndicalismwhichwouldassignthesamemonopolytotheemployee，orasthecapitalismwhichdoesassignittotheprofit-monger。Equityandeconomyalikedemandthattheinterestsofallthreeshallbeadequatelyrepresented。Socialremunerationinitsapplicationtothebusinessunitmustproceeduponthisfundamentalprinciple。Abusinessconsistsofcapital，labour，andthemarket。Toplaceunlimitedcontrolinthehandsofanyofthosefactorsiswastefulanddangerous。Thehumandefectsofuncontrolledcapitalismhavebeenmadesufficientlyapparent。Anyadequateexperimentinuncontrolledtrade-unionismorinsyndicalismwoulddisclosesimilarabuses。Theideaoftheminersrunningthemine，orthefactory-handsthefactory，therailwayworkerstherailway，isnotsomuchunsoundinthesensethattheymustfailtorunitproperly。Forthoughunlikely，itisatleastconceivablethattheymighthaveenoughintelligenceandcharactertobuycompetentmanagersandcarryouttheirdetailedinstructions。Itsfundamentalviceconsistsinignoringthefactorofthemarket，andinbuildingupanumberofseparateindustrialstructuresinwhichtheconsumers，interestsareunrepresented。
Itmayappearplausibletoarguethatthecontrolofeachprocessofproductionshouldbelefttotheproducerswhomaybepresumedtoknowitbest。Butitbecomesevident，eventothesyndicalist，thatnobusinesscouldbeconducteduponthispolicyunmodified。Nohouse-buildingcouldproceed，iftheplasterers，thebricklayers，thecarpenters，hadeachfullpowertodeterminewhentheywouldwork，atwhatpacetheywouldwork，andwhatremunerationtheyshouldexact。Theremustbeadefinitearrangementbetweenthegroupsofworkersintheseveralprocesseswithineachbusiness，whichwillqualifythecontrolofplasteringbytheplasterers，bricklayingbythebricklayers，byawidercontrolthatrepresentsthecommon。Interestsofthebusiness。Notmerelydoesthesyndicalistidearecognisethiscooperationoftheprocesseswithinabusiness，butitextendsthecooperativecharacterofthecontroltothetradeasawhole。Undersyndicalismthebuildingtradewouldnotbebrokenintoanumberofbusinessesineachofwhichwouldbemadeaseparatearrangementbetweenthecarpenters，bricklayers，etc。，employedinit。Thearrangementsastohoursandpaceandremuneration，etc。，wouldbedeterminedbyrepresentativesofthevariouscraftsonatradebasis。andwouldbethesameforallbusinessesandalljobs。Buttheorganisationofproducerscouldnotstopthere。Eachtradecouldnomorebeentirelyself-governingthaneachbusinessoreachprocessinabusiness。Thetrade-organisationoftheminerscouldnot，havingregardtotheinterestsandneedsofothertrades，besafelyentrustedwiththeabsolutecontrolofmining，ortherailwayworkerswiththeabsolutecontroloftherailways。Theremustbesomepowertopreventtheminersreducingtheiramountofworkandtheiroutputtoanextentwhichwillcrippletheothertradeswhichneedcoal，andtocompeltherailwayworkerstoaffordreasonablefacilitiesoftransportonreasonabletermstoshippersandtravellers。For，otherwise，therewouldbesubstitutedfortheconflictofcapitalandlabourwithineachbusinessoreachtrade，aconflictoftrades，eachstrivingtodoaslittleandtogetasmuchaspossibleoutoftheaggregatewealth。Norcanitbeassumedthattheintelligentself-interestorsocialsympathyoftheminers，orrailwaymen，orothertrades，wouldbeadequatesafeguardsagainstsuchabuses。Thisisevidentwhenwebearinmindthecentralconcreteproblembeforeus，thesocialdistributionandutilisationofthesurplus。Foritwillbetechnicallypossibleforanystrongly-placedspecialgroupofworkers，suchastheminersorrailwayworkers，totaketothemselves，inremunerationorinleisure，anexcessiveproportionofthissurplus，leavingverylittleforanyothergroupofworkers。Theguild-feeling，uponwhichsyndicalismmainlyrelies，notmerelysuppliesnosafeguardagainstthisabuseofpower，butwouldalmostcertainlyevokeit，unlessapotentcontrol，representingindustryingeneral，wereestablishedovertheindividualtradesorguilds。Experienceofcaseswherelocaltrade-unionsareoccasionallyplacedinapositionoftyrannyshowsthattheywillplayfortheirownhandwithadisregardtotheinterestsoftheirfellow-workersinothertradesascallousasisdisplayedbyanytrustofcapitalists。Assuming，then，thatitwerepossibleforguild-societiestodeveloptothepointthattheworkersineachtradewereinpossessionofalltheinstrumentsofproduction，andwereabletoconducttheprocessesefficiently，theproblemofdistributingthe\'surplus\'amongtheseveraltradesorguilds，intheshapeofpayorleisure，wouldstillremainunsolved。
Amongthegroupsofproducers，inaword，therewouldremaindivergenciesofinterest，whichwouldbeincapable，uponaproducers\'policy，ofsolution。
Syndicalists，confrontedwiththisphaseoftheirproblem，plungeintovagueassurancesthattheprocessofagreementwhichhadtakenplacebetweentheworkersintheseveralprocessesandtheseveralbusinessesinatrade，couldbeextendedtotheworkersgroupedinthelargertrade-units，andthattherealsolidarityofworking-classinterestswouldsomehowinstinctivelyexpressitselfinequitableanddurablearrangements。Butthemomentonepassesfromtheregionofphrasestothatofconcretefactsthedifficultiesthicken。Anelectedcouncilofnationalworkerswouldhavetodevisesomepracticablemethodofcomparingunitsofrailwayservicewithunitsofmining，bricklaying，doctoring，acting，waiting，etc。，soastoapplytoeachproductiveprocessthesupportandstimulusneededtoinducetheworkersengagedinittodotheirshareofworkandtoreceivetheirshareofwealth。
Nomeretimebasisforsuchcompetitionwouldbepracticable。Itwouldbenecessarytoinduceabodyoflabourandcapitaltoapplyitselftoeachprocessofeachoccupation，sufficientinquantityandinefficiencytosupplytherequirementsoftheworkingcommunityasawhole，andtodeviseamodeofremuneration，ordistributionofproducts，whichwouldsatisfythisrequirement。
Itisquiteevidentthatallthisadjustmentoftheclaimsandneedsofindividualswithinaprocessinabusiness，ofbusinessesinatrade，oftradesinindustry，wouldneedanelaboratehierachyofrepresentativegovernment，withasupremelegislatureandexecutive，whosewillmustover-rulethewillofthenationalorlocalgroupswithintheseveraltrades，astothequantityandmethodofworktobedoneineachconcreteprocess，andastotheremunerationofeachsortofwork。Inotherwords，society，asawhole，wouldhaveimposeditsfinalcontroluponeachgroupofworkers，diminishingtothatextenttheirpowertodeterminetheconditionsunderwhichtheywouldwork，andtheireffectiveseparateownershipoftheinstrumentsofproduction。Theidealoftheself-governingmine，orfactory，orrailwaywouldthusbeover-riddenbythesuperioridealofaself-governingsociety。
Butthatself-governmentbysociety，thesupremelegislationofindustry，couldnotperformitsworkbyconfiningitsattentiontothevariousproductiveprocesses，andthebusinessesandtradesinwhichtheywereconducted。
Itwouldbecompelledtostudythewantsandwilloftheconsumers，or，ifitbepreferred，oftheworkersintheircapacityofconsumers。For，onlybythestudyoftheconsumer，orthemarket，couldtheworkofadjustingtheapplicationofproductivepoweratthedifferentproductivepoints，andtheprocessofremunerationbywhichthatdistributionwasachieved，possiblybeaccomplished。Thus，althoughthewholebodyofthissyndicalistlegislaturemighthavebeenelectedtorepresenttheinterestsofseparategroupsofproducers，ortrades，itwouldbecompelledtogiveequalattentiontothewantsandthewilloftheconsumingpublic。Butitwoulddiscoverthat，justinproportionasitwasaccuratelyrepresentativeoftheseparateinterestsofgroupsofproducers，tothatextentwasitdisqualifiedforsafe-guardingtheinterestsoftheconsumingpublic，whichineachconcreteproblemwouldbeliabletocutacrosstheinterestsofspecialgroupsofproducers。Inotherwords，itwouldbeimpossibleproperlytoregulatetherailwayservicewithoutdirectregardtotheinterestsofthetravellingandtradingpublicasawhole，toregulatetheminingindustrywithoutregardtothelocal，seasonalandotherneedsofcoalconsumers。Buttheseconsumers，interestscouldnotbeproperlyconsideredinalegislaturechosenentirelybyseparategroupsofproducers，withtheobjectofpromotingthespecialinterestsofthesegroups。Theimpossibilityofsyndicalismthusturnsuponignoringinthecontrolofbusinessthewilloftheconsumer。
§；10。Thuswearecompelledtorecognisethatinasoundsocialorganisationoftheindustrialsystem，andofeachpartofit，thebusiness，thetrade，orthegroupoftradesandtheconsumerormarketmustbeintroducedasintegralfactorsofgovernment。Wecannotcontentourselveswiththeviewthataproducer，oranycompositebodyofproducers，isnecessarilyimpelledbyitsself-interesttosafeguardtheinterestsoftheconsumer。
Norcantheconsumersafeguardhisinterestsadequatelythroughtheguidanceorstimulushebringstobearthroughhisseparateindividualactsofdemand。
Heisincapableofprotectinghimselfproperly，evenwhenproducersarenotcombinedbutarecompeting。Whentheyarecombinedheishelpless。
Thecleavagesofimmediateeconomicinterestbetweentheworkerandtheconsumeraresonumerousthatnoabstractidentityofinterestsinacommunitywhereallconsumerswerealsoworkers，allparasitesbeingexcluded，wouldsufficetosecuretherequisiteeconomyandharmony。Thiseconomyandharmonycanonlybesecuredbygivingtheconsumeradirectvoiceinthegovernmentofindustry。
SyndicalismisinlargemeasureareactionagainstformsofstatesocialismwhicharevitiatedbyadefectsimilartothatwhichwefindintheRochdalecooperativeplan。Sofarasthepublicservicesarehonestlyandefficientlyadministeredbypublicofficials，thepublicwhichtheseofficialsrepresentisprimarilythecitizeninhiscapacityofconsumer。Themunicipalservicesarerun，eithertogivehimcheaptransportorlightingofsoundstandardquality，orelsetoenablehimtogetpolice，street-cleaningorsomeotherservicewhichhecouldnototherwisehavegot。Butthisbureaucraticsocialismisapttoneglectortoignoretheinterestsofitsemployees，andtodenythemanyinfluenceindeterminingtheconditionsoftheiremployment，otherthanthatwhichtheycanbringtobearascitizen-consumers。Thusarefoundcaseswherepublicdepartments，orthecontractorstheyemploy，areallowedtopaywagessolowortooffersuchirregularemployment，astocontributetothatinefficiencyanddestitutionforwhichthesamepublicissubsequentlycalledupontomakefinancialandadministrativeprovision。Thisisaninevitabledefectofaone-sidedorconsumers，socialism。Norisitlikelytoberemediedbyanygeneralperfunctoryrecognitionofthedutyofthepublicemployertoobservestandardconditions。Forinmostcasespublicemploymentwill，byvirtueofitsmonopolisticcharacter，containfeaturesthathavenopreciseanalogyintheoutsidebusinessworld，sothatsomeseparatemethodofdeterminingtheapplicationofstandardconditionsisnecessary。Unlessthatmethodadmitsdirectrepresentationoftheinterestsoftheemployees，therecanbenosufficientsecuritythattheseinterestsshallreceiveproperconsideration。
Thisisnotademandthattheemployeesshall\'interfere\'withthepublicmanagement，or\'dictate\'thetermsoftheiremployment。Onthecontrary，itisclearthattheofficialmanagersmust，intheordinarycourseofbusiness，securetheexecutionoftheirorders。But，consideringthattheirstandpointmustalwaysbebiassedtowardsaspecialinterpretationofthepublicinterestinthesenseofefficiencyandeconomyofaparticularoutput，thisnarrowerpublicinterestmustbecheckedbyreferencetoawiderpublicinterestinwhichthehumancostsofproductionshallberepresented。Anaccumulatingweightofrecentexperienceinvariouscountriesmakesitevidentthatstate-socialismmustfailunlessadequateprovisionismadeforsafe-guardingtheinterestofparticulargroupsofpublicemployees。Thissafeguardcannot，ofcourse，begivenbyanymereconcessionoftherightofcombinationandofcollectivebargaining。
Forwhilecollectivebargainingmayenabletheemployeestosecurefairtermswheretheyaredealingwithcompetingprivatebusinesses，itcannotwherethesoleemployeristheStateorMunicipality。Thelatteristechnicallyabletoimposeitstermsuponanygroupofworkerswhoarespecialisedfortheworkitoffers。RecognitionoftheUnion，andanadmissionbythemanagementoftherightofunion-officialstoconsultationanddiscussionofconditionsofemployment，donotreallyfurnishanybasisofsettlement，thoughtheymayofteneaseadifficultyandremovemisunderstanding。
Whatisrequiredisastatutoryrightofappealtoapublicauthority，outsideofandindependentoftheparticulardepartment，competenttotakethatwiderviewofpublicinterestfromwhichthedepartmentalpublicofficialis，bythenecessityofhissituation，precluded。Thatclaimofthepublicemployeeisfrequentlymisunderstood。Itdoesnotarisefromanyrealorpretendedoppositionofinterestsbetweenthepublicandagroupofitsemployees，andaclaimonthepartofthelatterthatthepublicshallmakesomeconcessionorsacrificetotheirparticulargroupinterest。Thereisnosuchrealoppositionofinterests。Thevalidclaimforanappealfromthearbitrarydecisionsofthepublicdepartmentalmanagersisbaseduponthefactthatthelatteraredisqualifiedforafullimpartialviewofthepublicinterest，sofarasthatpublicinterestisaffectedbytheconditionsofemploymentoftheemployeesunderthem。Thefactthattheemployeesareoftenlikelytomakeunreasonabledemandsandtoclaiminwages，hoursandotherconditions，anexcessiveshareofthepublicrevenue，doesnotaffectthevalidityofthiscontention。Forpracticalconvenienceofficialdepartmentalismexists。Butthisdepartmentalisminvolvesabusinessmanagementessentiallydefectivefromthestandpointofpublicwelfare，inasmuchasittendstodepreciateoroverlooktheinterestwhichthepublichasinthetotalwelfareofthatsectionofthepublicwhichisinitsdirectemployment。
§；11。Ofcourse，intreatingtheissueofapublicbusinessasifitconsistedsimplyinreconcilingtheimmediateinterestsoftheconsumingpublicwiththoseofthepublicemployees，wehaveintentionallyexcludedanotherviewwhichmayoftenbemoreimportant。Statesocialismmayberunprimarilyintheinterests，neitherofthecitizen-consumernoroftheemployer，butofthebureaucracy，whohereoccupytheplaceofthecapitalist-managersunderprivateenterprise。Theofficialmaybeheldtobenaturallydisposedtomagnifyhisofficeandtoabuseanypowerwhichcanbemadetosubservehispersonalorclassinterests。Practicalpermanencyoftenureofhisoffice，andthespecialknowledgewhichitbrings，enablehim，withsafety，eithertoneglecthispublicduties，ortoencroachuponthelibertiesofcitizens，accordingasheislethargicorself-assertive。
Hemaysquandertheresourcesofthepublicuponill-consideredprojects，orinservingtheprivateinterestsofhisfriends。Or，hemaypracticeatyrannicaloraniggardlypolicytowardshisemployees，notthroughanarrowinterpretationofpubliceconomy，butfromsheercarelessnessorfromdefectivesympathy。Thesechargesagainstofficialismaretoofamiliartoneedexpansionhere。Howevercarefullythepublicserviceisrecruited，suchabuseswillbeliablefrequentlytooccur，andthestructureofgovernmentshouldbesuchastosupplyeffectivechecksandremedies。