Still less can it be admitted, that where combination has displaced competition, the consumer's interests are safe.On the contrary, it is recognised by all economists that where any effective monopoly is established, the selling prices to consumers will always be such as to secure a surplus profit to the producer.Prices may not always be as high as, or higher than, they would have been if a wasteful competition were maintained, but they will always be such as to extract a higher profit than is needed for the remuneration of capital and ability.Where the articles sold are necessaries or prime conveniences of life, and do not admit of effective substitutes, the prices will be indefinitely higher than under competition, and the conflict between producer and consumer more acute.Since under modern capitalism an ever-increasing number of 'routine' requirements, covering the chief necessaries of large populations, are passing under some form or other of effective combination, it is clear that the problem of industrial peace must come to concern itself more and more with the conflicts of producer and consumer.At present the consumer, at any rate in England, largely realises this conflict as a by-product of the struggle between capital and labour.Though the strikes and lock-outs, which express that struggle, disastrously affect his welfare, he is told that they are not his business, and he has no right to interfere.Where a settlement has taken place between capital and labour on a basis of higher wages or shorter hours, he finds the cost of this settlement is usually passed on to him in higher rates or prices.
As joint-agreements between employers, federations and trade unions become more common and more effective, as methods of conciliation and arbitration receive legal sanction and assistance, as wage-boards extend to new fields of industry, the falsehood and the social wrong which underlie the maxim 'caveat emptor' become more manifest.The consumer will become increasingly more impotent to protect himself against the depredations of organised groups of producers.Indeed, experience proves that even where combinations are subject to the sanction and control of the State, which theoretically is dedicated to the service of the public as a whole, and might at least be expected to hold the balance even between producer and consumer, producers, interests are preferred.In the present policy of state control of Railways, and in the various schemes for the extension of Wage Board legislation, there is no proper recognition of the interests of the consumer.An ill-devised lopsided Socialism is springing up, the likely result of which appears to be to set up groups of selected and preferred employments, whose higher wage-bill will in reality be defrayed not out of rents, surplus profits or any other unearned income, but in large measure out of the reduction of real wages which arbitrary rises of consumers, prices will impose upon other wage-earners.A flagrant instance of this defective social policy is supplied by the recent arrangement by which the railways of this country have been empowered by government to raise the wages of their employees by reducing the real wages of the general body of the wage-earners, who are called upon to bear a large part of the cost in the higher prices of commodities which follows upon the rise of railway rates.
§7.Now, admitting, as we must, that a real divergence of interests between producers and consumers may and must arise in the ordinary course of industry, what remedy is possible?
There is one large working-class movement which seems expressly designed for the protection of the consuming public.I allude of course to the great Cooperative Movement on the Rochdale plan, in which the supreme control is vested in the consumers and their representatives.How far does this scheme represent a true reconcilement of producers' and consumers, interests?
A very little investigation will show that, however excellent the other services it renders to the working-classes, its conduct of business affords no complete harmony of the interests of the several factors.
For its entire structure and working are motived by the intention to absorb in real wages (by means of dividends on purchases) the 'profits'
to which in ordinary trade most of the unproductive surplus seems to adhere.
By dispensing with the profits of various grades of middlemen, by reducing the expenses of management, by saving most of the costs of advertising and other incidental costs of distribution, much surplus is diverted into real wages.But, regarding this scheme from the standpoint which immediately concerns us, as a reconcilement of capital and labour within the business, we find an obvious defect.There is nothing in the theory, or commonly in the practice, of the cooperative store or workshop, to evoke from the employees any special interest in its successful conduct.If they are members, they do indeed get in this capacity a gain equal to that enjoyed by other members not employed in the business.But, as employees, they have no voice in the administration and no share in the gains.Where, as in the Scottish Wholesale, a profit-sharing scheme is attached, this scheme is exposed to the same criticism that we have applied to other profit-sharing schemes.
There is no security afforded by this cooperative form of business for the full reconcilement of the claims of capital and labour within the business.
