TRADE-UNIONS 33 



him and cheer him. Meanwhile, simple restriction of the ex- 

 tension of trade is not per se an evil, and none of the pleas 

 against trade-unions founded upon it will hold water. When 

 the Bank of England raises its rate of discount to 6, 7, 10 per 

 cent, it restricts trade unsound trade, you say; but is not 

 trade unsound which requires for its success that the workmen 

 shall be quasi paupers ? The laws on joint-stock companies, the 

 standing orders of the House of Commons, the determination of 



O ' 



any board of directors not to invest money in an undertaking 

 which promises to return less than 5 per cent., taxes, wars, 

 Factory Acts all these things are restrictions on trade, some 

 wise, some inevitable ; thus, we cannot forbid actions simply 

 because they restrict trade, and we can see no reason why com- 

 binations of capitalists should be permitted to fix the rate of 

 interest at which they will invest their money, and combinations 

 of workmen forbidden to fix the rate at which they will sell 

 their labour. They no more restrict trade by demanding high 

 wages than capitalists do by demanding high profits. The same 

 reasoning answers the allegation that trade-unions drive away 

 trade. Unquestionably, if the workmen are sufficiently foolish 

 to persist in their demands for wages which the trade cannot 

 afford, they may drive away the trade ; but again, if capitalists 

 are so foolish as not to sell unless at a profit so great as to prevent 

 successful competition with other countries, they may lose their 

 business, ruining themselves and their workmen. We do not, 

 therefore, prescribe a given rate of profit as a maximum, but 

 trust to self-interest as the strongest of motives to prevent 

 such suicidal action. Workmen in practice may be found less 

 sensible than employers, but there is much evidence in the 

 Blue-Books to show that the unions do look very keenly into 

 the possibility of foreign competition ; and in an ideal union it 

 is clear that information among the men that the trade was 

 being lost would lead them to abate their demands 



An odd fallacy has been mooted lately, chiefly by Americans, 

 to the effect that free-trade and high wages are incompatible 

 that, in effect, free-trade tends to lower wages, and that if the 

 unions raise wao-es free-trade must be abandoned. The effect 



o 



of free-trade at any place is to reduce the price of articles 

 which cannot advantageously be made there, but it increases 



VOL. II. D 



