V. The Condition and Futurity of the Labouring Classes
- The Problem of Low Wages
Mill adheres to the wages-fund doctrine: “Wages, then, depend mainly upon the demand and supply of labour; or… on the proportion between population and capital.” The condition of the laboring class can only be improved by altering this proportion to their advantage. Schemes that do not address this are “for all permanent purposes, a delusion.” He argues that temporary improvements in circumstances (e.g., cheap food from the repeal of the Corn Laws) are often lost as the population multiplies “down to their old scale of living.” A permanent improvement requires a “great change in their condition” sufficient to permanently raise their “habitual standard” of comfort.
- The Future: A Transition to Co-operative Association
Mill argues that the “patriarchal or paternal system of government” over the poor is obsolete and that the division of society into “two hereditary classes, employers and employed, can not be permanently maintained.” The future lies in association.
- Partnership with Capitalists: The first form is where laborers are associated with the capitalist, receiving a share of the profits. He cites whaling crews and the Cornish miners as examples.
- Association of Labourers: The ultimate and predominant form is “the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.” He extensively praises the success and discipline of the worker co-operative associations in post-1848 France.
He believes this co-operative principle would lead to a “moral revolution in society”:
“…the healing of the standing feud between capital and labour; the transformation of human life, from a conflict of classes struggling for opposite interests, to a friendly rivalry in the pursuit of a good common to all; the elevation of the dignity of labour; a new sense of security and independence in the labouring class…”
While embracing this socialist aim, he dissents from socialist “declamations against competition,” arguing that “wherever competition is not, monopoly is,” and that competition remains a “necessary stimulus” to prevent stagnation.