4i Wisconsin Academy of Sciences^ Arts, and Letters. 



CASE V. 



In this case an association of laborers borrow capital and em- 

 ploy a busine-s manager who may or may not be one of their own 

 number. This case is a favorite one with many persons in theory, 

 bat it has never thus far been found to work well in practice. To 

 avoid misconception, it should be noted that corporative stores do 

 not come under this case* The laborers who organize a corpora- 

 tive store, do not as a rule work in the store, and are therefore in 

 regard to that business not laborers, but capitalists. They are 

 really a stock company to carry on a mercantile business and 

 therefore come under case III. as we have already seen. 



But when journeymen shoemakers, tor instance, form a co-oper- 

 ative association, they come under this case. As in all kinds of 

 business, capital is needed to begin it and to carry it on. This 

 capital may possibly be obtained in one of three ways : (a) By 

 borrowing money of some capitalist, which could not be done 

 ordinarily ; or (b) by renting a shop and buying materials on 

 credit, a htizardous undertaking both for the association and lor 

 the capitalist ; or (c) by combining their separate earnings, which 

 would be the usual method. In this case the associaiion as a 

 combination of .capitalists employs its own members as business 

 manager and laborers. 



This ca^e in the last form differs from case I only in being the 

 case of a combination of individuals instead of a single individual, 

 that combine in one the three functions of capitalist, business 

 manager and laborer. But in this case, while there is no dis- 

 tribution between the association and outsiders, there is a question 

 of distribution between the members of the association. Of the 

 various methods which might be adopted, the following is the 

 most in accordance with the principles of political economy. Let 

 the members be credited with the capital advanced by each as so 

 much stock in the association ; let the members be paid for their 

 services at the market rates, and if possible, by "the piece and not 

 by the day, and after paying these wages and other expenses, let 

 the members divide the profits or losses on the basis of the capital 

 advanced by each, like any stock company. All these five cases 

 have their place in the transactions of business, and every form of 



