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recognition. It remains now to indicate the way in which this experience from the past may be utilized for the future. To some the natural conclusion would be that a tree which has borne so little fruit for half a century might now be cut down and burned. To my mind, however, to continue the simile, what the tree needs is a liberal use of the pruning knife and the lopping off of a mass of luxuriant but unfruitful foliage.

example, that if workmen are allowed to
share in the profits they will insist upon
seeing the books, and will distrust the re-
turns made by the masters. To this it is
answered that the accounts might be sub-
mitted to sworn accountants, whose deci-
sion should be final. But, again, it is burned.
But, again, it is
objected that the rate of profit earned must
necessarily be made public, seeing that the
amount of bonus will depend upon it, and
thus, if the rate is high, that competition
might be increased, while, in case of bad
trade, it is feared that the non-payment of
a bonus after a payment for some years
might even lead to a partial loss of credit.
Thus, whether profits were very high or
very low it would not be to the advantage
of the firm that the fact should be known.
Again, it is said that in years of good trade
large profits might be earned for a time,
which were in no way due to the extra ex-
ertions or carefulness of the men (as in the
case of the Whitwood Collieries during the
great inflation), and that these profits ought
to be set against the exceptional losses of
a depression, in which, although the work-
men may not receive a bonus, they never
share in the actual loss.

The general result of all these objections is that, rightly or wrongly, masters think that under a system of profit-sharing their profits would, in the long run, be less, and that they would also be hampered in the management of their business. Experience has shown that these fears are certainly exaggerated, and also that they are generally expressed by those who have never given the system a trial; but at the same time they do much toward explaining the small amount of favor which the system has practically received from the great mass of employers. When the other reasons already advanced are also taken into account, it is not difficult to understand why profit-sharing has hitherto altogether failed to realize the expectations formed of it by very good judges, and few would now be inclined to endorse the opinion of Prof. Jevons in 1870, that "the sharing of profits is one of those apparently simple inventions at the simplicity of which men will wonder in an after-age.'

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The method of inquiry hitherto pursued in this paper has been, in the main, to consider why this "apparently simple invention" has met with so little practical

"Methods of Social Reform," p. 125.

In the first place, in the light of experience and in the present condition of industry, it is ridiculous to suppose that profit-sharing" can be a substitute for trade unions. Any ordinary firm which intends to give the system a fair trial should be prepared to leave the employés absolutely free to take part in the meetings and policy of the unions, just as it should reserve to itself the right of joining combinations of the masters. The reason for this course is obvious. A bonus on wages, after the reserved profits have been allotted to the masters, is not an economic equivalent for the abandonment by the men of their unions, which have so much influence in determining the rates of wages and the conditions of employment. Again, the unions are so strong in a great number of industries, that it would be extremely impolitic for a new and weakly institution to provoke their hostility.

Secondly, it must be remembered that the so-called share in the profits is simply an addition to and not a substitute for wages. Even if the system were adopted almost universally, the working-classes would still in the main depend upon the ordinary rate of wages, which again is determined by the conditions of industrial demand and supply. All that trade unions themselves can do is to see that the best bargain is made which the conditions of the market allow; and profit-sharing can do

no more.

Profit-sharing as such furnishes no guarantee against instability of earnings and fluctuations in employment. No system of division of the proceeds can be a guarantee that the proceeds will be forthcoming. The greatest perseverance would be no remedy against over-production or the loss of a foreign market, or an enormous rise in the price of raw material, or the popular adoption of some substitute for an old staple. But in the great mass of industries, fluctuations in wages and em

ployment are the most crying evils of the day. In some businesses of a peculiar character and with well-established custom these evils are not felt, but the great industries of a manufacturing country are not of this fortunate kind. Thus, profit-sharing at the best will not of itself be a sufficient remedy for some of the most serious evils affecting labor.

Thirdly, there are other methods of obtaining the social advantages connected with the most celebrated examples of profit-sharing. It is not every business that could provide, like that of M. Godin, for the education, amusement, and general comfort of its members, and the example in this country which comes the nearest to it-Saltaire-does not, I believe, adopt the profit-sharing principle. Supposing that profit-sharing were as widely spread as its most ardent supporters desire, it would probably not be an unmixed gain for the country at large if, for general social purposes, every business establishment aimed at becoming self-sufficing and independent. When, however, all this pruning has been accomplished, the stem and its main branches--the principle and its logical consequences -are left intact. And that principle, as pointed out at the outset of this article, is not a principle of charity or philanthropy, but essentially an economic principle. In every business in which timewages are paid there is always a great waste of time. Nor can this waste be considered as a pleasure to the workmen themselves. Every one knows that it is really much more pleasant to work with brisk, lively energy, and with interest, than to idle and dawdle, and be always looking at the clock. Again, if piece-work is adopted, it is well known that quality is sacrificed to quantity, unless the supervision is stringent and effective.

But so long as the time-worker is paid simply for time, and the piece-worker for quantity, there will be a loss in the value of the output, a loss which is a gain to nobody. Apart from this, there is a further loss in the waste of material, carelessness in the use of machinery, and the like, when the workers have no interest in the general result. Accordingly it is quite clear that in most businesses there is room for extra earnings, and the best way to secure this end is to give a large share to those who by their efforts or care contribute to the result. Profit-sharing of this

kind must be advantageous to all concerned. The master obtains a share of the income in proportion to his wages of superintendence, and the workmen obtain their bonus on wages. If this bonus is paid at considerable intervals, or is invested in the form of shares, the compulsory saving thus effected is strictly analogous to that which has produced such good results in the old co-operative societies.

The question has been treated on the whole from the business point of view, and profit-sharing has been considered mainly as increasing the efficiency of the productive agents; but the more successful the system is as a method of business, so much the more will it tend to bring about those moral and social results for which in most quarters it is generally recommended. The constant effort to make the most of the concern, the creation of a keen esprit de corps among the workers, the knowledge that to a large extent the interests of masters and men are identical, the application of a share of the profits to social purposes, the opportunity for the gradual accumulation of capital out of extra earnings, and the consequent sense of independence-all these are factors which make for the moral elevation both of masters and men, and tend to diminish the friction between classes. If profit-sharing is a business success, there is little doubt that the rest will follow. Even in private firms it is those on the margin of bankruptcy, and not those with exceptional profits, which give labor the least reward for the hardest work. The best business for the master is, as a rule, best also for the men. if profit-sharing does not prove a good method of business, it is vain to talk of the social improvements which would follow on its general adoption-for the simple reason that it will never be generally adopted.

But

In

An illustration may be taken from cooperation. The co-operative societies for distributive purposes among the working classes have been a wonderful success. Great Britain they have a membership of about 900,000, and sell goods to the amount of nearly £33,000,000 per annum. The net profits are about £3,000,000. Now, after making full allowance for the moral enthusiasm of the original founders, and for the co-operative spirit of the present members, there can be little doubt that this great success is in the main to be

ascribed to economic causes- e.g., better quality of goods, and, directly or indirect ly, lessened cost. The co-operative productive societies, from the moral standpoint, offer much greater attractions, but they have succeeded only to a small extent, and again the principal causes of failure are purely economic-e.g.. competition and inferior business capacity.

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But the co-operative movement furnishes a still more definite illustration of the position that profit-sharing must in the first place stand or fall on its economic merits. At the Co-operative Congress in 1888* it was recommended that," by whomsoever productive enterprises are established-by either the wholesale or distributive societies, or by organizations of the workingmen themselves-an alliance be formed on equitable conditions for the sharing of profits and risks between the worker, the capitalist, and the consumer. Α copy of this resolution was sent to the different societies, and questions were put in a circular as to their treatment of their workers. "To this circular only 199 sent replies, of which 138 said that they had no productive works, while 61 gave replies more or less full to the question: Does the society admit the workers employed in it productively to any share in the profits of its business?'"' Five societies only replied in the affirmative and 46 in the negative.† To the question: "Would the society be disposed to enter into any plan by which the whole profits in production, or any, or what part of them might be applied for

the permanent benefit of the workmen by providing against sickness, disability from age, or assurance on death?" Ten societies replied in the affirmative and 30 in the negative.

Could a more convincing proof be offered of the contention that however attractive may be the moral aspects of profitsharing it must, for practical purposes, be considered in the first place as a matter of business? It is too much to hope that the ordinary capitalist will regard the question from a higher standpoint than the managers of the co-operative distributing agencies which also take up production, encouraged as they are by the public opinion of the great body of co-operators.

Profit-sharing is capable of a much wider extension than it has yet attained, but the first condition of success is that the nature of the economic principles on which it rests, as well as the industrial forces with which it must work, should be fully realized.

At the same time the stress laid on the business side of the question in this paper must not be misunderstood. The ideal of profit-sharing is to make the best use not only of the physical strength and the technical skill, but also of the moral energy of all the workers, the managers included; and the principal obstacle in its path, as in every department of industrial progress, lies in the fact, noticed at the outset, that the economic value of moral forces is constantly underrated.- Westminster Review.

ABSOLUTE POLITICAL ETHICS.

BY HERBERT SPENCER.

LIFE in Fiji at the time when Thomas Williams settled there must have been something worse than uncomfortable. One of the people who passed near the string of nine hundred stones with which Ra Undreundre recorded the number of human victims he had devoured, must *See Report for 1889, p. 28, and Appendix VIII., p. 40.

The returns referred to were made by the distributive societies, and do not include those occupied only with production. The figures quoted in the Appendix (apparently later) are 264 replies-181 no productive works, 10 affirmative, and 61 negative.

have had unpleasant waking thoughts and occasionally horrible dreams. A man who had lost some fingers for breaches of ceremony, or had seen his neighbor killed by a chief for behavior not sufficiently respectful, and who remembered how King Tanoa cut off his cousin's arm, cooked it and ate it in his presence, and then had him cut to pieces, must not unfrequently have had " a bad quarter of an hour." Nor could creeping sensations have failed to run through any women who heard Tui Thakan eulogizing his dead son for cruelty, and saying that " he could kill his own

wives if they offended him, and eat them afterward." Happiness could not have been general in a society where there was a liability to be one among the ten whose life-blood baptized the decks of a new canoe-a society in which the kil'ing even of unoffending persons was no crime but a glory; and in which every one knew that his neighbor's restless ambition was to be an acknowledged murderer. Still there must have been some moderation in murdering even in Fiji. Or must we hesitate to conclude that unlimited murder would have caused extinction of the society?

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The extent to which each man's possessions among the Biluchis are endangered by the predatory instincts of his neighbors, may be judged from the fact that a small mud tower is erected in each field, where the possessor and his retainers guard his produce." If turbulent states of society such as early histories tell of, do not show us so vividly how the habit of appropriating one another's goods interferes with social prosperity and individual comfort, yet they do not leave us in doubt respecting these results. It is an inference which few will be hardy enough to dispute, that in proportion as the time of each man, instead of being occupied in further production, is occupied in guarding that which he has produced against marauders, the total production must be diminished and the sustentation of each and all less satisfactorily achieved. And it is a manifest corollary that if each pushes beyond a certain limit the practice of trying to satisfy his needs by robbing his neighbor, the society must dissolve solitary life will prove preferable.

A deceased friend of mine, narrating incidents in his life, told me that as a young man he sought to establish himself in Spain as a commission agent; and that, failing by expostulation or other means to obtain payment from one who had ordered goods through him, he, as a last resource, went to the man's house and presented himself before him pistol in hand- -a proceeding which had the desired effect: the account was settled. Suppose now that everywhere contracts had thus to be enforced by more or less strenuous measures. Suppose that a coal-mine proprietor in Derbyshire, having sent a train load to a London coal-merchant, had commonly to send a posse of colliers up to town, to stop

the man's wagons and take out the horses until payment had been made. Suppose the farm laborer or the artisan was constantly in doubt whether, at the end of the week, the wages agreed upon would be forthcoming, or whether he would get only half, or whether he would have to wait six months. Suppose that daily in every shop there occurred scuffles between shopman and customer, the one to get the money without giving the goods, and the other to get the goods without paying the money. What in such case would happen to the society? What would become of its producing and distributing businesses? Is it a rash inference that industrial cooperation (of the voluntary kind at least) would cease?

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Why these absurd questions?" asks the impatient reader. Surely every one knows that murder, assault, robbery, fraud, breach of contract, etc., are at variance with social welfare and must be punished when committed." My replies are several. In the first place, I am quite content to have the questions called absurd; because this implies a consciousness that the answers are so self-evident that it is absurd to assume the possibility of any other answers. My second reply is that I am not desirous of pressing the question whether we know these things, but of pressing the question how we know these things. Can we know them, and do we know them, by contemplating the necessities of the case? or must we have recourse to inductions based on careful observation and experience"? Before we make and enforce laws against murder, ought we to inquire into the social welfare and individual happiness in places where murder prevails, and observe whether or not the welfare and happiness are greater in places where murder is rare? Shall robbery be allowed to go on until, by collecting and tabulating the effects in countries where thieves predominate and in countries where thieves are but few, we are shown by induction that prosperity is greater when each man is allowed to retain that which he has earned ? And is it needful to prove by accumulated evidence that breaches of contract impede production and exchange, and those benefits to each and all which mutual dependence achieves? In the third place, these instances of actions which, pushed to extremes, cause social dissolution, and which, in smaller degrees, hinder social co-opera

tion and its benefits, I give for the pur- other, his implied belief that they might pose of asking what is their common trait. come to have a little respect for one anIn each of such actions we see aggression other's lives, condemned as utterly without -a carrying on of life in a way which justification in experience, would be condirectly interferes with the carrying on of sidered as fit only for a wild speculator. another's life. The relation between Facts furnished by every-day observation effort and consequent benefit in one man, make it clear to the Biluchi, keeping watch is either destroyed altogether or partially in his mud-tower, that possession of propbroken by the doings of another man. If erty can be maintained only by force; it be admitted that life can be maintained and it is most likely to him scarcely cononly by certain activities (the internal ones ceivable that there exist limits which, if being universal, and the external ones be- mutually recognized, may exclude aggresing universal for all but parasites and the sions, and make it needless to mount guard immature), it must be admitted that when over fields only an absurd idealist (suplike-natured beings are associated, the re- posing such a thing known to him) would quired activities must be mutually limited; suggest the possibility. And so even of and that the highest life can result only our own ancestors in feudal times, it may when the associated beings are so consti- be concluded that, constantly going about tuted as severally to keep within the im- armed and often taking refuge in strong. plied limits. The restrictions stated thus holds, the thought of a peaceful social generally, may obviously be developed into state would have seemed ridiculous; and special restrictions referring to this or that the belief that there might be a recognized kind of conduct. These, then, I hold are equality among men's claims to pursue the à priori truths which admit of being known objects of life, and a consequent desistance by contemplation of the conditions-ax- from aggressions, would have been scarceiomatic truths which bear to ethics a rela- ly conceivable. But now that an orderly tion analogous to that which the mathe- social state has been maintained for genmatical axioms bear to the exact sciences. erations-now that in daily intercourse men rarely use violence, commonly pay what they owe, and in most cases respect the claims of the weak as well as those of the strong-now that they are brought up with the idea that all men are equal before the law, and daily see judicial decisions turning upon the question whether one citizen has or has not infringed upon the equal rights of another; there exist in the general mind materials for forming the conception of a régime in which men's activities are mutually limited, and in which maintenance of harmony depends on respect for the limits. There has arisen an ability to see that mutual limitations are necessitated when lives are carried ou in proximity; and to see that there necessarily emerge definite sets of restraints applying to definite classes of actions. it has become manifest to some, though not it seems to many, that there results an à priori system of absolute political ethics -a system under which men of like natures, severally so constituted as spontaneously to refrain from trespassing, may work together without friction, and with the greatest advantage to each and all.

I do not mean that these axiomatic truths are cognizable by all. For the apprehension of them, as for the apprehension of simpler axioms, a certain mental growth and a certain mental discipline are needed. In the Treatise on Natural Philosophy by Professors Thomson and Tait, it is remarked that " physical axioms are axiomatic to those only who have sufficient knowledge of the action of physical causes to enable them to see at once their necessary truth." Doubtless a fact and a significant fact. A plough-boy cannot form a conception of the axiom that action and reaction are equal and opposite. In the first place, he lacks a sufficiently generalized idea of action-has not united into one conception pushing and pulling, the blow of a fist, the recoil of a gun, and the attraction of a planet. Still less has he any generalized idea of reaction. And even had he these two ideas, it is probable that, defective in power of representation as he is, he would fail to recognize the necessary equality. Similarly with these à priori ethical truths. If a speculative member of that Fijian slave-tribe who regarded themselves as food for the chiefs had suggested that there might come a place where men would not eat one an

.

And

"But men are not wholly like-natured and are unlikely to become so. Nor are they so constituted that each is solicitous

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