8. Collective bargaining to even up the shares between labour and capital.
Reasonable and peace-loving supporters of the labour movement may concede that violence in industrial relations is an evil, but they may argue that it is (or was) a necessary evil to obtain justice for the downtrodden and disadvantaged. Can these people continue to defend the strike threat system if it is demonstrated that the main beneficiaries are the most reckless and violent players, the “bloody aristocracy of labour” whose members achieve pay and conditions that most other workers, white and blue collar alike, can only dream about?
The humanitarian purpose of collective bargaining is to improve the lot of the working class as a whole by a redistribution of wealth from capital to labour. This is the central point that Hutt contested in his two major books on collective bargaining and the strike threat system. Those books argue, in some length and detail, that claims enforced by the threat of strikes can only advance sections of the labour force at the expense of unorganized labour, the unemployed and the community at large without affecting any overall transfer of wealth to the working class at large.
He spelled out how the threat to disrupt the entrepreneurial process by the concerted withdrawal of labour (boosted by supplementary force) has:
1. severely curtailed the wages-flow;
2. raised the cost of the capital resources which constitute labour’s tools;
3. extensively attenuated the wage-multiplying power of the assets provided;
4. aggravated inequalities of income;
5. materially worsened industrial relations, tending to destroy the workers’ dignity, their pride in achievement and their sense of purpose;
6. often frustrated attempts to improve conditions of employment in the work-shop and office;
7. mitigated against the market provision of employment security;
8. through the increasing pressures of ‘wage-push’ in recent years [the 1920s], been mainly responsible for the political expediency of inflation.
As far as Hutt could find in the literature, unprotected and non-unionised workers gained proportionately as much from general upward movements in productivity as workers in unions. It seems that there is no clear correlation between the degree of unionization and the speed of wage-rate increases. The exceptions to that pattern are (a) the “bloody aristocrats of labour” who do better than average and (b) workers (or the unemployed) who do worse than average either because they are excluded from any kind of work by “the going rate” (wage rates set too high which render them unemployable) or because they are kept in lower paying jobs by exclusive practices enforced by the strike threat.
On point 1 above, Hutt referred to some tendentious writing by the Webbs regarding the eighteenth-century unions being “forced” into demanding protection because the industries in which their members were employed were menaced by “pauper labor.” Hutt argued that the industries where union members were employed would have prospered if labor had been recruited from less productive and less well-paid occupations. Releasing the “paupers” from their poverty would have enabled them to buy goods and services and generate multiplier effects that would benefit an ever-widening circle of trades and industries. In his view the unions were simply asking for protection of sectional privilege. “The interests of those referred to as ‘pauper labor’ were regarded as of no importance, either by the unions or – (in this context) by their famed defenders, the Webbs.”
Point 5 is illustrated by a story told to me by an elderly German migrant who had been a skilled metalworker. During the war his house was destroyed by allied bombing and so he slept at the factory which was also substantially damaged. At the end of the war there was no direction from anyone and no home to go to, so he and his fellow workers set to work to rebuild the factory. He came to Australia and plied his trade in a metalwork shop. Late one afternoon he made a mistake with a job and he was still making good the damage when the “knock off” hooter sounded. A shop steward appeared and told him (with some interesting use of language) to desist. He protested that he was fixing up a mistake in his work. It was his fault and he just
wanted to make it good before he went home. The shop steward promised that if he tried that stunt again the whole shop would be called out on strike. So much for commitment to quality and personal responsibility.
The cure that Hutt proposed was the enactment of the principle underlying the British Combination Acts of 1799 and 1800 adapted to the present day. The reform suggested:
1. would bring to an end an era of distributive injustices and tolerated poverty-creation;
2. would raise the material welfare of perhaps 90% of the people;
3. would release resources for new occupations in which the product enriches life;
4. would enormously increase income security; and, above all,
5. would bring about an unprecedented improvement in the quality of human relations.
Remarkably, William Stanley Jevons anticipated much of Hutt’s case in his book Methods of Social Reform and Other Papers (1883).
Firstly. The supposed struggle with capitalists in which many Unions engage, for the purpose of raising wages, is not really a struggle of labour against capital, but of certain classes or sections of labourers against other classes or sections.
Secondly. It is a struggle in which only a few peculiarly situated trades can succeed in benefiting themselves.
Thirdly. Unions which succeed in maintaining a high rate of wages only succeed by PROTECTION—that is, by levying contributions from other classes of labourers and from the population in general.
Fourthly. Unionism as at present conducted tends therefore to aggravate the differences of wages between the several classes of operatives; it is an effort of some sections to raise themselves at the expense of others.
At the end of the argument Jevons concluded:
The Unionist overlooks the fact that the cause to which he is so faithful, is only the cause of a small exclusive class; his triumph is the injury of a vastly greater number of his fellow-workmen, and regarded in this point of view, his cause is a narrow and selfish one, rather than a broad and disinterested one. The more I admire the perseverance, the self-forgetfulness, the endurance, abstinence, and a hundred other good qualities which English workmen often display during the conduct of a great trade dispute, the more sincerely do I regret that so many good qualities should be thrown away, or rather misused, in a cause which is too often a hurtful one to their fellow-men.