122 SECTIONAL ADDRESSES. 



II. 



The extension of public regulation of wages in this sense from a part 

 to the whole of the field of commercial wage-employment could hardly be 

 without some effects upon the general industrial situation. In their 

 classic study of the effects of collective bargaining Mr. and Mrs. Webb 

 lay chief stress upon its influence in increasing the efficiency of industry. 

 They draw a sharp distinction between the policy of restricting numbers 

 in a trade and that of imposing common rules. Their survey of trade 

 unionism showed that the former policy, anti-social and self-defeating, 

 was adopted by a smaller and smaller proportion of unions, and was 

 becoming more and more difficult of application ; the discarding of any 

 attempt to restrict numbers, and the concentration on the policy of im- 

 posing standard or minimum rates and conditions, was growing, and was 

 the chief characteristic of trade unionism in the expanding industries. 

 This policy increased industrial efficiency in two ways, by its reaction 

 on the workman and by its reaction on the employer. The workman, 

 prevented from securing emplojTnent by accepting a lower rat€ of pay 

 than his competitors, was compelled to improve his efficiency, and was 

 enabled to do so by the increase in income and security that trade 

 unionism usually brought. More important were the reactions on the 

 employer. Stopped from taking the easy but dangerous path to lower 

 costs of cutting wages, he had to find other means of increasing output 

 in relation to wage-payments. Hence trade unionism encouraged an 

 increase in the scale of production, a more extensive use of mechanical 

 equipment, a more eager search for technical improvements, and, 

 generally, the economy of labour. It did not extinguish competition, 

 but diverted it from wages to other factors in costs. 



The rapid expansion of the unionised coal, cotton, and engineering 

 industries in the decade following the publication of this analysis seemed 

 to confirm its soundness. The decline and stagnation of the same 

 industries in the last eight years prompts the inquiry whether this 

 influence has exhausted its potentialities. The evidence collected by 

 the Balfour Committee, while not decisive, points to the conclusion that 

 labour-cost in the export industries has risen as much as, and possibly 

 more than, wage-rates, which implies that such increase in efficiency as 

 these industries have been able to secure has not been more than 

 sufficient to compensate for the reduction in hours of work.^ In the 

 trades to which Trade Boards were first applied, many instances were 

 afforded of improvements effected under the stress of the need to econo- 

 mise labour, and in some of them, for instance the clothing industries, 

 a marked increase in scale, such as the Webbs' analysis would lead one 

 to expect, took place. We should expect the reactions of this kind to 

 be greatest in the trades in which wages and conditions had been worst, 

 and in the period immediately following the first application of control. 



Whether the influence on efficiency has continued and is general, the 

 abnormal condition of British industry makes it difficult to decide. The 

 large amount of short time, the increase in other costs, and the financial 



^ Balfour Committee, Further Factors in Industrial ar>d Commercial Efficiency, 

 pp. 92 et eeq. 



