The Relations Of Capital And Labor -- By: Lucien C. Warner
BSac 52:207 (July 1895) p. 411
The Relations Of Capital And Labor1
If I understand the broad aim and purpose of Sociology it is to better the condition of mankind, especially the condition of the so-called working classes, by which is usually meant the wage-earners. One of the most prominent questions to consider, therefore, is the relations of capital and labor, of employer and workman. I shall not attempt an elaborate discussion on this topic, but shall indicate some of the practical difficulties to be overcome, and a few general principles which may be useful in guiding us to correct conclusions. If my treatment of the subject is in some points chaotic, it will not inaptly represent the present condition of the problem I am discussing.
The ideal of workmen, as voiced by their leaders, is on the one hand cooperation, and on the other, governmental paternalism. They would have cooperation in the ownership and management of mercantile and manufacturing enterprises, and governmental ownership and control of railroads, telegraphs, and all of the various corporations that are dependent upon special franchises from the public. On the latter subject I have no experience, and no special opportunities for observation, so I shall confine myself to the relations of labor to manufacturing and mercantile enterprises.
The reason for favoring cooperation is chiefly that the workman may receive larger emoluments for his labor, or, in other words, a larger share of the profits. This necessarily
BSac 52:207 (July 1895) p. 412
presupposes that there are profits to divide. The first difficulty that confronts us is that as a matter of fact a large number of business operations result in loss and not profit. It has been estimated that one-half of the men who go into mercantile or manufacturing business fail at some time during their business career. It is difficult to get accurate statistics on this point, but an examination of the failures reported through mercantile agencies will give us approximate results. The failures among the customers of the carefully conducted wholesale mercantile houses are about one-half of one per cent each year. Their risks, however, are selected with great care, and the merchants most likely to fail are refused credit. The report of Bradstreet and Company shows that the average failures of all mercantile and manufacturing houses for one year represents from one and one-fourth to one and one-half per cent of the actual number doing business. Allowing that the average business career of a man covers twenty-five years, it will be seen that during that time about one-third of the number fail in business. The importance of this factor in our discussion is perhaps bett...
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