If the bonus is not accompanied by extra output yet the firm continues to pay it, and still makes a reasonable profit, then the employees might reason that all along they have been deprived of what is rightfully theirs. Economic analysis shows that an important element in profits is the reward for risk. Is the worker expected to incur this responsibility? If it is admitted that the employee shares in the enterprise of the business (and the risk of unemployment and other contingencies proves the worker to bear the risks of industry to a greater extent than is popularly supposed), then again he can claim the bonus, or part of it, as a right. If, on the other hand, his participation in the risk is denied, then a profit bonus would resemble a pure gift, which is hardly consistent with real profit-sharing and clearly opposed to the idea of true co-partnership. The basis of profit-sharing and co-partnership, therefore, is very uncertain and it behoves the advocates to be more explicit in what they believe to be the essenfial principles of such schemes. CHAPTER IX. Producers' THE CO-OPERATIVE MOVEMENT. In this country one usually understands the term cooperation to refer to associations of purchasers who have set up stores in nearly all districts, and by eliminating the middleman have secured the pecuniary gains for themselves. While cooperation of consumers is the most extensive form that the movement has taken, it is necessary to distinguish other forms of co-operative enterprise, which on the Continent particularly have been very successful. Firstly, one may distinguish societies of producers, in which a number of people not only subscribe some or all of the requisite capital, but provide their services as well. The product is sold in the ordinary way, usually to cooperative stores, and the proceeds are divided among the producers, yielding a surplus over and above what would ordinarily be the wages of their labour. In the early days of the movement, this form of cooperation was more common than associations of purchasers, but it never became really popular in Great Britain. Many producers' societies were begun at the end of the eighteenth and the beginning of the nineteenth centuries—for example, the society in Hull which, on account of the high prices charged by the local millers, decided to make their own flour. The scope of these ventures was very limited, and few of them succeeded for any length of time. Following a period of quiescence, the movement was revived for a time in the middle of last century by the Christian Socialists who set up co-operative workshops in the hope that these would ultimately supplant the capitalist system. A few of these ventures had a measure of success, but most of them gradually disappeared. Since then, spasmodic attempts have been made to invigorate cooperation of producers, but there appears to be little hope of any appreciable extension in this country. At the present time these societies, though they number over 100, have a membership of less than 40,000. Moreover, a large part of this capital is subscribed by the associations of consumers and by outside sympathisers, and to that extent the self-governing principle is weakened. PRODUCTIVE SOCIETIES (Exclusive of the Wholesale Societies.)* Number Share Membership and Loan Trade Surplus Wages £ £ £ £ 39,331 2,299,565 7,047,147 487,282 1,232,127 42,855 2,788,573 9,222,699 539,733 1,673,461 38,360 2,891,744 6,581,587 322,358 1,475,416 38,138 2,938,786 5,318,077 314,904 1,350,071 37,868 3,016,044 5,104,600 278,506 1,276,795 The consumers' societies have more than a hundred times as many members as the producers' societies, while the wholesale societies alone turn out six times as much as the producers' societies. These figures, however, are not altogether comparable, since a member of a producers' society gives his full time to its activities, whereas the ordinary member of a consumers' society is only interested * For statistics of the Co-operative Movement, see the C.W.S. annual, The People's Year Book. as a purchaser. Strictly speaking, the member of a producers' society is a truer co-operator than the member of a consumers' society, and from one standpoint it is regrettable that the producers' movement has made so little headway. The activities at present are mainly confined to the textile, boot and shoe, and printing trades. In France and other European countries associations of producers are more successful, and cover a much wider ground. Such societies have failed so far in this country partly through inadequate capital, partly through lack of experience and managerial ability, and largely through the growth and competition of large-scale enterprise which has in most instances undercut the societies of producers and rendered their existence increasingly difficult. The scheme of producers' co-operation in this country became merged largely in the profit-sharing and co-partnership movement.* Another form of co-operation is provided by those societies, formed to supply credit to their Co-operation in members and other clients. Producers and Banking and Agriculture. traders who desire financial accommodation receive the necessary assistance from the bank of which they are often part owners; they not only receive this facility at a comparatively low rate, but, if members, are assured that any surplus will come back to them in proportion to the use made of the institution. This branch of the co-operative movement is fairly prevalent in many European countries, but has not reached serious dimensions as yet in Great Britain. The Co-operative Wholesale Society has established a bank which deals with the retailers' societies and also with the trade union movement; but, as the number of producers' societies is relatively small here, the need of credit from this direction is limited. *See above, pp.195-7. Co-operation in agriculture has been carried to an advanced degree on the Continent; in Denmark, for instance, 90 per cent. of the butter is produced by co-operative agency. Machinery, creameries, etc., are collectively owned by the farmer co-operators. Here again, Great Britain has lagged behind, though the movement has had some success in Ireland. There is a certain resemblance between co-operation of producers as described above and that in agriculture. An important difference, however, is that the farmer, apart from the use of co-operative appliances, usually cultivates his land and rears the stock in the ordinary individualistic manner; the co-operation with other farmers takes place in the selling of the produce. A kind of monopoly is formed under which the farmers and dairymen refrain from competition with each other and agree to sell their ouput through a common sales agency. Similarly, a distinction must be drawn between this form of co-operation, which to a large extent includes employers of labour, and those mutual activities which are more specifically designed to further the interests of the working classes. Even the consumers' co-operative movement has been denounced by "advanced" critics as capitalistic; a body which includes employers and secures high prices by combination against the consumer is still more vehemently condemned. Whatever be the merits of this form of cooperation, therefore, it cannot be regarded as part of the labour movement. Growth of the Co-operation in the early period of its growth in this country was chiefly confined to producers. The first thirty or forty years of the nineteenth century witnessed numerous schemes of this character, prominent among which were the experiments of Robert Owen. Most of the attempts were either too limited in their scope to be of Consumers' |