Some Words on the Ethics of Coöperative Production

I HAVE endeavored in a former paper to give some idea of the development in the United Kingdom of coöperation for productive purposes. It will have been seen that two different methods are being pursued : one, in which production simply springs out of coöperative consumption, being set on foot with the capital economized by its means, and carried on, chiefly by the great Wholesale Societies, for the primary benefit of the consumer, whether or not any share of profit is allowed to the producer : the other, in which production is set on foot with capital supplied or raised by the producer, and carried on primarily for his benefit, whether or not any share of profit is allowed to the consumer.

The former method is evidently the wide gate, the broad way, to success. The capital has made itself ; it has grown out of the unfelt savings which result from coöperative distribution. The custom which is to make that capital fruitful is to a large extent ready found. In treating the producer as a mere earner of wages, even though you should make his position an exceptionally favorable one, you remain in the ordinary groove of competitive trade. The other gate is narrow, the way strait. To raise capital implies effort, self-discipline, self-sacrifice, on the part of the workers. They have no assured market beforehand, even though they may hope for support from a portion, at least, of the coöperative world. They cannot, like the consumers, buy labor and skill in the open market. They must, in the main, themselves supply both, and take up the difficult task of adjusting their claims as workers, which alone they have considered hitherto, to the position of employers. Accordingly, we saw that even the most prominent of the producers’ associations, that of the Leicester boot and shoe makers, fell, in point of extent of production, far short of the Leicester boot and shoe factory of the Coöperative Wholesale Society, out of which it sprang. But this already shows the higher ethical, educative value of the latter form of production. The former may develop, in the person of the manager of the particular works, an honorable and benevolent employer, at the cost of an infinitesimally small amount of self-sacrifice on the part of the hundreds of thousands of members of the societies constituting the Coöperative Wholesale. The latter can live only by the justice, patience, self-restraint, self-sacrifice, if need be, of all concerned in it. The wonder is, not that societies of self-governed producers should fail, but that they should succeed ; and it is to the highest credit of our British working class that, undeterred by previous failures, they should still be struggling onward by the narrow way, and, it must be admitted, with increasing success.

That the narrow way was in fact also the better way was formerly recognized on all hands. The seventeen original coöperators of Rochdale looked forward to setting themselves to work out of the saved profits on consumption. But when store after store slid into production without heed of any claim of the worker upon the profits of his labor ; when the Coöperative Wholesale Society suppressed bonus to labor, and in course of time claimed and exercised the right of trampling upon existing productive societies in order to establish its own workshops, the old idea of the worker’s right to claim a share in the profits of his labor fell more and more into the background. And at last the great discovery was made — it is one that is apt to be made by the successful — that the wide gate and the broad way were the right ones after all; that the consumers’ appropriation of all the proceeds of labor beyond a fair maintenance was the democratic ideal ; that social harmony was to be the result of a perpetual tug of war between societies for cooperative consumption, producing all that could be produced by them, and trade unions.

The apostle of this new doctrine was a lady, whose sincerity and earnestness, I hasten to say, are beyond all question, the present Mrs. Sidney Webb, who as Miss Beatrice Potter set it forth explicitly in her work on The Coöperative Movement in Great Britain (1891). Whilst restricting the term “ democratic ” to that form of coöperation which starts from consumption, she says, indeed, with perfect candor, that "the coöperative store and its dependent federations may either be used as a great engine in the oppression of one worker by another, or as one of the levers whereby the British working class may secure sovereign power in industry as in politics, establishing on a firm basis industrial as well as political democracy. But,” she continues, “ to bring forth this child of promise we must witness the intermarriage of the coöperative and trade-union movements ; not the dissolution of one by the other, but the voluntary interdependence, on terms of equality, of two opposite but complementary corporations, — the citizens organized as consumers, and the workers organized as producers.”

Now, before considering the question on the ethical side, let us look at it for a moment from the practical. Who are the consumers ? The producers and the nonproducers. Who are the non-producers ? Children, the old, helpless invalids, idiots, lunatics, loafers, criminals, except so far as child labor, asylum labor, prison labor, may add to the mass of production. Who maintains the non-producers ? The producers. According to the new ideal, then, those who are merely dependent upon the producers are to share in fixing the conditions of their labor, and the producers, even if enrolled to the last man in a trade union, must be always numerically the weaker party. But is there the least chance that all producers will ever be enrolled in trade unions ? What do Mr. and Mrs. Sidney Webb say themselves in their History of Trade Unionism ? They state the total number of ascertained trade unionists within the United Kingdom in 1892 at 1,507,026, or only 3.98 per cent of the population. No doubt the proportion of members of coöperative societies is smaller still. But what a difference as to resources ! The total funds of registered trade unions in England making returns at the end of 1892, according to the last Report of the Chief Registrar of Friendly Societies, were £1,546,306, an increase of £13,989 during the year. Let us assume that the non-registered unions had an equal amount of funds (which most assuredly they had not). The result will be a total of under £3,100,000. The share and loan capital of cooperative societies making returns for England (excluding loan societies and trading banks) was £14,468,714, an increase of £997,717 over the previous year. Let us deduct from this the £310,459 stated by Labour Copartnership, the organ of coöperative production, as the capital of productive societies, although several of these are registered under the Companies Acts. There will remain £14,158,285. According to these figures, societies for coöperative consumption in England have nearly five times the capital of English trade unions, but I have put the latter at what must be a greatly exaggerated estimate, since, with very few exceptions, the unregistered unions are far poorer than the registered ones. And this capital is increasing for the consumers, in proportion to that of the trade unions, at the rate of over three thousand per cent. Nor is this all. It is idle to look for any great increase in the funds of trade unions, for the simple reason that all the skilled, wellpaid trades may be said to be now in union. And already, through, the bringing of the unions of unskilled workers upon the register, the average amount per member of trade-union funds tends to decrease. This appears by a most valuable table in the Report of the Chief Registrar of Friendly Societies for 1893, page 56, showing that the extra diligence of the last two years in enforcing the returns of trade unions has had the effect of reducing the average reported amount of funds per member. In 1890, when only 164 returns were received from 405 unions, the average per member was £1821. In 1891, when there were 356 returns from 493 unions, the average fell to £1517. In 1892, when 428 returns were received from 441 unions, it fell still further to £1476. Mr. and Mrs. Webb say most truly that “ the influence of trade unionism on working-class life cannot be measured by the members actually contributing to the union funds at any one time.” But they candidly tell us that “ there are many occupations in which trade unionism is non-existent ;” that “ whole classes of manual workers are practically excluded from the tradeunion ranks by the fact that they are not hired workers at wages ; ” that in “ the trades in which the small master survives, or in which home work prevails, we find another region almost devoid of trade unionism ; ” that “ the great army of laborers, as distinguished from mechanics, miners, or factory operatives, are, in normal times, as unorganized as the women workers ; ” that, except in certain counties, . . . trade unionism among the farm laborers can scarcely be said to exist;” that “ the large class of tramway and omnibus workers have, after a brief rally, reverted to a state of disorganization,” while “ the great army of warehousemen, porters, and other kinds of city laborers counts only a few hundred trade unionists in all the kingdom ; ” and again, that “ the branches of a labor union are, for one reason or another, always crumbling away, and the total membership is only maintained by perpetually breaking fresh ground.” Surely this shows that trade unionism, as a social force, has nearly reached its limits of influence ; that its expansion among the laboring class proper has limits which it can hardly pass, and adds but little to its strength. Thus, if coöperative consumption, claiming to regulate production for its sole benefit, continues to develop itself at the present rate, whilst trade unionism must remain substantially confined within its present limits, there can be no possible “ interdependence, on terms of equality, of . . . the citizens organized as consumers, and the workers organized as producers,” since the organized producers can never, under the tradeunion system, embody more than a fraction of the whole. It is quite possible that the strong artisans’ unions may — at all events, for a time — hold their own against the coöperative consumers ; the weaker laborers’ unions, the unorganized labor masses beyond, must go to the wall before them. The so-called “ intermarriage of the coöperative and trade-union movements ” means simply a new form of social war, to the great disadvantage of at least the poorer producers.

But let us turn now to the ethical side of the question. We must never, indeed, overlook the fact that production and consumption are married in indissoluble union. They represent the systole and diastole of all life. Man produces to consume ; consumes, if he deserves the name of man, to produce. This is true even of the highest and most spiritual production, the production of Good ; true of our blessed Lord himself. His "meat” was to do the will of Him that sent him, and to finish his work. He did not thus merely do good ; he fed upon the doing of it. And so it is true of every humblest worker under him. Every human spirit is nourished, like that of Christ, by its own right doings in fulfillment of the Father’s will.

Nevertheless, as I have argued elsewhere before this, the divine element in man is the productive one ; the consuming element is the terrene. The former he shares with God, the eternal producer ; the latter he shares with all created things. Production is essentially unselfish ; the producer, even if he be a rascal, gives away something of himself in the act of production. Consumption is primarily selfish; the consumer, even if he be a saint, takes something to himself. There is, no doubt, an evil production, — of the burglar’s and forger’s tools, the coiner’s dies, the poisoner’s drugs, the false weight and scant measure, the jerry - builder’s house, the lie tea and wooden nutmeg, and all the foul products of adulteration and swindling trade. But all that is only the misuse, by man’s wickedness, of his own Godgiven powers. Apart from this willful misuse, all production is good, as adding to the world’s wealth, material, intellectual, or spiritual. Consumption, on the other hand, is in itself simply non-moral ; can become moral only when bearing fruit in production for the producer’s and the world’s good. To subordinate production to consumption is therefore to subordinate the unselfish to the self-regarding, the ethically good to that which has no intrinsic morality.

Let us endeavor to test these positions by examples. A man lives on the outskirts of civilization ; supplying all his own wants and those of his family, subsisting on the fruits of his tillage, the flesh and milk of his herds and flocks, clothing himself and his with skins and wool. He is essentially a producer ; a consumer only so far as he is a creature of flesh and blood. He has, no doubt, duties of hospitality, of humanity, towards strangers. Those duties may rank, by national custom, as of high obligation. In some countries, his very enemies, if he has allowed them to eat of his salt, — in other words, if he has treated them as members of his family, — may become temporarily sacred to him. But has any stranger the right, simply as a consumer, to do as he pleases with the results of the producer’s labor and assume the direction of it ? Evidently not. Apart from the claims of a common humanity, to the consumer as mere consumer the producer owes absolutely nothing.

Now let us suppose that the producer does not or cannot supply himself and his family with all necessary articles of consumption. What he needs must be obtained by means of an exchange with another man, whether directly or through the medium of money. To simplify matters, let us take first the case of pure barter. A, wanting something produced by B, supplies something of his own in exchange. In this case the rights are obviously the same on both sides. Both are producers, both are consumers ; each is entitled to a genuine article, to full weight and measure, and what he takes ought to be a fair equivalent for what he gives. Will it make any difference if B, instead of producing the goods that A wants, is able by some other means to acquire them ? None whatever ; products will still be exchanged for products, and so long as the exchange is fair there will be no robbery. Introduce money as the medium of exchange : will the case be altered ? In no wise : the man with money will be entitled only to a fair equivalent in goods, the man with goods to a fair equivalent in money. And now suppose that, through the complex arrangements of society, the one commodity that a man has to sell is his labor : what is the fair equivalent for that labor ? Can it be anything short of the whole net value which by his labor he has added to the material on which he has worked ? For labor, be it observed (and under the term "labor ” I include all activities of body, soul, and spirit), is the only live thing in the world, the only thing which adds value to dead matter. The Koh-i-noor would be valueless to a tribe of apes, or of men leading mere apelike, laborless lives. Its value is built up out of the labor of the millions of millions of men who have wrought and toiled from the beginning of the world, creating human society and human civilization, and all the tastes and wants which grow out of them. Wages, wherever the product is sold at a profit, are a mere advance of part of that added value. The purchaser, as such, cannot possibly have any primary claim to the balance, which he has done nothing to create.

But whilst recognizing to the full the abstract right of the producer to the whole net value created by his labor, let us never overlook the other side of the question. Whatever value is created by labor takes life only through consumption, whether that of the producer or of some one else. There is no use in baking bread for no one to eat, making clothes for no one to wear, building houses for no one to live in. Creating nothing himself, but only destroying, the consumer nevertheless calls forth all production. Even in the case with which we started, the outdweller from civilization, who supplies all his own wants and those of his family, produces only for his and their consumption. As I said before, man produces to consume, as he should consume to produce. And in our complex civilization, where the human want and the means of supplying that want are often half the world apart, the securing of consumption — of a market, as it is technically termed — becomes all - important to the producer. Here indeed comes in an element distinct in some respects from production, though in principle mainly connected with it, which in our diseased social state too often assumes quite abnormal importance, to the extent of exercising absolute tyranny over both production and consumption, — that of distribution. The claim of the distributer to a share in the proceeds of production is a real though subordinate one. And I am far from denying the expediency, which is very generally recognized by the associated producers, of allowing a share in the profits of production to the consumers themselves. But, different from the claim of the distributer, this seems to me a matter of expediency, and not of right.

If then we take the word “ production ” in the larger sense that modern political economy is more and more disposed to give it ; if we view as producers all who promote the world’s wealth or welfare, so as to include not only the righteous statesman, the devoted clergyman, the earnest moralist, the poet, artist, musician, who does not pander to evil thoughts and bad taste, but even the singer of a harmless comic song who by a hearty laugh refreshes the spirit of some jaded worker, and the helpless invalid who by her sweet patience in suffering makes all better men and women who come near to her, we shall find that, in point of fact, instead of consumers’ having any right to regulate production, the right is that of the producers to regulate consumption and consumers. It is as producers, not as consumers, that men may claim to restrict the sale of poisons, firearms, intoxicating liquors, to restrain vice and punish crime, to provide for the sick and aged, to educate the young, to legislate and to rule. To use an illustration which I gave of the matter many years ago, an honest producer who should chance to be cast on a desert island with a murderer, a thief, a madman, a loafer, and a child, would be in duty bound, so far as he was able, to assume control over all the others, and for that purpose should or might hang the murderer out of hand, compel thief and loafer to work, place the madman out of the way of mischief, and educate the child. All the six would be equally consumers, but the five non - producers would have absolutely no moral right to resist the righteous sway of the single producer.

I hold, therefore, that notwithstanding the easy success so far of production directed by the coöperative consumer, those English workingmen are right who persist in the more difficult task of directing their own production. But although the right to a share of profits has been, in the main, the test of difference between the two methods, I hold as fully as Mrs. Webb that the elimination of all profit, the reducing of all trade to a perfectly fair exchange, remains always the coöperative goal. This, however, although she does not seem to see it, involves the tumbling down of the whole fabric of coöperative consumption as now built up, since “ divi is the very mortar that holds it, together. She must know that, even if still advocated here and there, the attempt to sell at cost price has been an invariable failure. And how many tolls levied on the producer’s work does even cost price include ! On the other hand, an interchange of products between establishments of coöperative producers affords a direct way to the goal. At the present moment, the productive associations in the English shoe and boot trade represent, an amount of demand for clothing sufficient to maintain an equivalent amount of cooperative production in the tailoring trade, which might be paid for in foot gear, at the fair value of the exchanged articles ; the element of profit simply disappearing on both sides in such exchange. The formation elsewhere of coöperative depots like the one now existing in London (Hart Street, Bloomsbury), and the extension of this, would greatly facilitate such transactions.

In the foregoing observations, I have, for the sake of simplicity of argument, left out of consideration the case of those larger and always more and more numerous industries which demand at the outset large capitals. There are two ways of bringing these within the sphere of true coöperative production. One is that of the initiative taken by an individual employer, — Mr. Thomson, of Huddersfield, for example, or Mr. Arthur Brownfield, of Cobridge ; or again, of the admission by societies for coöperative consumption, like the Scottish Coöperative Wholesale, of the worker to a share in profits and in management. The other is that of the employment or investment of trade-union funds, beyond what is needed for the immediate objects of the union, in coöperative production. The latter, if the more difficult, is, I believe, the more certain way. And I think it is possible by legislation so to distinguish between the objects of a trade union that whilst its coöperative dealings should create legal rights and legal responsibilities, its dealings as a trade union should remain as now outside of both, until such time as, having brought all production in the trade within its hands, its functions as a trade union would become superfluous, and it would remain simply a guild. Interchange of products between one such guild and another would then be largely facilitated by the habit already acquired of working together for common ends through the meeting together in annual congresses, which are represented from year to year bv a permanent committee, and through the personal knowledge which trade-union officials have thus of each other. If work were prosecuted cautiously and steadily on this line, I see no reason why coöperative production on any scale should not eventually be carried on by the producers themselves, supplying from their own collected funds the necessary capital, and from their own ranks the future captains of industry.

J. M. Ludlow.