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。