Non-leftist libertarians tend to have a negative view of labour unions and workers’ cooperatives. Non-libertarian leftists tend to have a negative view of Herbert Spencer. As a possible corrective to both attitudes, I thought I’d reproduce some especially interesting passages from Spencer. I don’t claim that either group should necessarily be satisfied with everything Spencer says here; no doubt his assessment of the possibilities of labour organisation will seem too pessimistic to some and too optimistic to others (or perhaps some of each). But in any case it’s food for thought.
Book VIII, Chapter 20, of Herbert Spencer’s Principles of Sociology (1896) is devoted to the subject of “Trade-Unionism.” Spencer begins by taking the standard right-libertarian line that labour unions can never really raise wages for the working class as a whole – that any gains made for the union’s members must come at the expense of everybody else. But then he goes on to add a left-libertarian qualification:
What then are we to say of trade-unions? Under their original form as friendly societies – organizations for rendering mutual aid – they were of course extremely beneficial; and in so far as they subserve this purpose down to the present time, they can scarcely be too much lauded. Here, however, we are concerned not with the relations of their members to one another, but with their corporate relations to employers and to the public. Must we say that though one set of artisans may succeed for a time in getting more pay for the same work, yet this advantage is eventually at the expense of the public (including the mass of wage-earners), and that when all other groups of artisans, following the example, have raised their wages, the result is a mutual cancelling of benefits? Must we say that while ultimately failing in their proposed ends, trade-unions do nothing else than inflict grave mischiefs in trying to achieve them?
This is too sweeping a conclusion. They seem natural to the passing phase of social evolution, and may have beneficial functions under existing conditions. Everywhere aggression begets resistance and counter-aggression; and in our present transitional state, semi-militant and semi-industrial, trespasses have to be kept in check by the fear of retaliatory trespasses.
Judging from their harsh and cruel conduct in the past, it is tolerably certain that employers are now prevented from doing unfair things which they would else do. Conscious that trade-unions are ever ready to act, they are more prompt to raise wages when trade is flourishing than they would otherwise be; and when there come times of depression, they lower wages only when they cannot otherwise carry on their businesses.
Knowing the power which unions can exert, masters are led to treat the individual members of them with more respect than they would otherwise do: the status of the workman is almost necessarily raised. Moreover, having a strong motive for keeping on good terms with the union, a master is more likely than he would else be to study the general convenience of his men, and to carry on his works in ways conducive to their health. There is an ultimate gain in moral and physical treatment if there is no ultimate gain in wages.
Then in the third place must be named the discipline given by trade-union organization and action. Considered under its chief aspect, the progress of social life at large is a progress in fitness for living and working together; and all minor societies of men formed within a major society – a nation – subject their members to sets of incentives and restraints which increase their fitness. The induced habits of feeling and thought tend to make men more available than they would else be, for such higher forms of social organization as will probably hereafter arise.
If unions represent a necessary transitional stage, what is the higher form toward which they represent a transition? Interestingly, in the chapter that follows, titled “Cooperation,” Spencer suggests that workers’ cooperatives may be the answer. He begins by raising some problems for these also, but ends by defending workers’ cooperatives fairly enthusiastically:
In cooperative workshops the members receive weekly wages at trade-union rates, and are ranked as higher or lower by the foreman. Officials are paid at better rates according to their values and responsibilities, and these rates are fixed by the committee. When the profits have been ascertained, they are divided among all in proportion to those amounts they have earned in wages or salaries. Causes of dissension are obvious. One who receives the lowest wages is dissatisfied – holds that he is as goods a worker as one who gets higher wages, and resents the decision of the foreman: probably ascribing it to favouritism. Officials, too, are apt to disagree with each other, alike in respect of power and remuneration. Then among the hand-workers in general there is pretty certain to be jealousy of the brain-workers, whose values they under-estimate; and with their jealousies go reflections on the committee as unfair or as unwise. In these various ways the equilibrium of the body is frequently disturbed, and in course of time is very likely to be destroyed. …
Must we say then that self-governing combinations of workers will never answer? The reply is that one class of the difficulties above set forth must ever continue to be great, though perhaps not insuperable, but that the other and more serious class may probably be evaded.
These members of industrial copartnerships, paying themselves trade-union wages, are mostly imbued with trade-union ideas and feelings. Among these is a prejudice against piece-work, quite naturally resulting from experience. Finding what a given piece of work ordinarily costs in day-wages, the employer offers to pay the workman for it at a certain lower rate; leaving him to get, by extra diligence, more work done and a larger payment. Immediately, the quantity executed is greatly increased, and the workman receives considerably more than he did in wages – so much more that the employer becomes dissatisfied, thinks he is giving too large a sum by the piece, and cuts down the rate. Action and reaction go un until, very generally, there is an approximation to the earnings by day-wages: the tendency, meanwhile, having been so to raise the employer’s standard, that he expects to get more work out of the workman for the same sum.
But now, has not the resulting aversion to piece-work been unawares carried into another sphere, in which its effects must be quite different? Evils like those arising from antagonistic interests, cannot arise where there are no antagonistic interests. Each cooperator exists in a double capacity. He is a unit in an incorporated body standing in the place of employer; and he is a worker employed by the incorporated body. Manifestly, when, instead of an employing master, alien to the workers, there is an employing master compounded of the workers, the mischiefs ordinarily caused by piece-work can no longer be caused. Consider how the arrangement will work.
The incorporated body, acting through its deputed committee, gives to the individual members work at a settled rate for an assigned quantity – such rate being somewhat lower than that which, at the ordinary speed of production, would yield the ordinary wages. The individual members, severally put into their work such ability as they can and such energy as they please; and there comes from them an output, here of twenty, there of twenty-five, and occasionally of thirty per cent. greater than before. What are the pecuniary results? Each earns in a given time a greater sum, while the many-headed master has a larger quantity of goods to dispose of, which can be offered to buyers at somewhat lower prices than before; with the effect of obtaining a ready sale and increased returns. Presently comes one of the recurring occasions for division of profits. Through the managing body, the many-headed master gives to every worker a share which, while larger all round, is proportionate in each case to the sum earned. What now will happen in respect of the rate paid for piece-work? The composite master has no motive to cut down this rate: the interests of the incorporated members being identical with the interests of the members individually taken. But should there arise any reason for lowering the piece-work price, the result must be that what is lost to each in payment for labour, is regained by him in the shape of additional profit. Thus while each obtains exactly the remuneration due for his work, minus only the cost of administration, the productive power of the concern is greatly increased, with proportionate increase of returns to all: there is an equitable division of a larger sum.
Consider now the moral effects. Jealousies among the workers disappear. A cannot think his remuneration too low as compared with that of B, since each is now paid just as much as his work brings. Resentment against a foreman, who ranks some above others, no longer finds any place. Overlooking to check idleness becomes superfluous: the idling almost disappears, and another causes of dissension ceases. Not only do the irritations which superintendence excites decrease, but the cost of it decreases also; and the official element in the concern bears a reduced ratio to the other elements. The governing functions of the committee, too, and the relations of the workers to it, become fewer; thus removing other sources of internal discord: the chief remaining source being the inspection of work by the manufacturing committee, and refusal to pass that which is bad.
A further development may be named. Where the things produced are easily divisible and tolerably uniform in kind, work by the piece may be taken by single individuals; but where the things are so large, and perhaps complex (as in machinery), that an unaided man becomes incapable, work by the piece may be taken by groups of members. In such cases, too, in which the proper rate is difficult to assign, the price may be settled by an inverted Dutch auction, pursuing a method allied to that of the Cornish miners. Among them –
An undertaking “is marked out, and examined by the workmen during some days, thus affording them an opportunity of judging as to its difficulty. Then it is put up to auction and bid for by different gangs of men, who undertake the work as co-operative piece-work, at so much per fathom:” the lot being subsequently again bid for as a whole.
In the case now supposed, sundry pieces of work, after similar inspection, would be bid for on one of the recurring occasions appointed. Offering each in turn at some very low price, and meeting with no response, the manager would, step by step, raise the price, until presently one of the groups would accept. The pieces of work thus put up to auction, would be so arranged in number that towards the close, bidding would be stimulated by the thought of having no piece of work to undertake: the penalty being employment by one or other of the groups at day-wags. No good bargains and no bad bargains, made by each group, would average one another; but always the good or bad bargain of any group would be a bad or good bargain for the entire body.
What would be the character of these arrangements considered as stages in industrial evolution? We have seen that, in common with political regulation and ecclesiastical regulation, the regulation of labour becomes less coercive as society assumes a higher type. Here we reach a form in which the coerciveness has diminished to the smallest degree consistent with combined action. Each member is his own master in respect of the work he does; and is subject only to such rules, established by majority of the members, as are needful for maintaining order. The transition from the compulsory cooperation of militancy to the voluntary cooperation of industrialism is completed. Under present arrangements it is incomplete. A wage-earner, while he voluntarily agrees to give so many hours work for so much pay, does not, during performance of his work, act in a purely voluntary way: he is coerced by the consciousness that discharge will follow if he idles, and is sometimes more manifestly coerced by an overlooker. But under the arrangement described, his activity becomes entirely voluntary.
Otherwise presenting the facts, and using Sir Henry Maine’s terms, we see that the transition from status to contract reaches its limit. So long as the worker remains a wage-earner, the marks of status do not wholly disappear. For so many hours daily he makes over his faculties to a master, or to a cooperative group, and is for the time owned by him or it. He is temporarily in the position of a slave, and his overlooker stands in the position of a slave-driver. Further, a remnant of the régime of status is seen in the fact that he and other workers are placed in ranks, receiving different rates of pay. But under such a mode of cooperation as that above contemplated, the system of contract becomes unqualified. Each member agrees with the body of members to perform certain work for a certain sum, and is free from dictation and authoritative classing. The entire organization is based on contract, and each transaction is based on contract.
One more aspect of the arrangement must be named. It conforms to the general law of species-life, and the law implied in our conception of justice – the law that reward shall be proportionate to merit. Far more than by the primitive slave-system of coerced labour and assigned sustenance – far more than by the later system under which the serf received a certain share of produce – more even than by the wage-earning system under which payment, though partially proportioned to work, is but imperfectly proportioned, would the system above described bring merit and reward into adjustment. Excluding all arbitrariness it would enable reward and merit to adjust themselves.
But now, while contending that cooperation carried on by piece-work, would achieve the desideratum that the manual worker shall have for his product all which remains after due remuneration of the brain-worker, it must be admitted that the practicability of such a system depends on character. Throughout this volume it has been variously shown that higher types of society are made possible only by higher types of nature; and the implication is that the best industrial institutions are possible only with the best men. Judging from that temporary success which has been reached under the ordinary form of cooperative production, it is inferable that permanent success might be reached were one set of the difficulties removed; leaving only the difficulty of obtaining honest and skilful management. Not in many cases, however, at present. The requisite “sweet reasonableness,” to use Matthew Arnold’s phrase, is not yet sufficiently prevalent. But such few cooperative bodies of the kind described as survived, might be the germs of a spreading organization. Admission into them would be the goal of working-class ambition. They would tend continually to absorb the superior, leaving outside the inferior to work as wage-earners; and the first would slowly grow at the expense of the last. Obviously, too, the growth would become increasingly rapid; since the master-and-workmen type of industrial organization could not withstand competition with this cooperative type, so much more productive and costing so much less in superintendence.
David Boaz 
1. When Gustave de Molinari first proposed his vision of a stateless society, his colleagues in the French liberal movement – even those that had veered pretty close to anarchism in their younger days, like Charles Dunoyer – thought he’d gone a bit around the bend. But could Jean-Baptiste Say, the great grand-daddy of French liberalism, have toyed with anarchist ideas himself in some of his unpublished writings? So argues Amadeus Gabriel in 
First: those who draw this distinction are hardly ever market anarchists themselves. They are more often anarcho-communists or anarcho-collectivists who regard both Group 1 and Group 2 as making unacceptable concessions to economic individualism. (Indeed they often dismiss even their favoured Group 1 – apart from Proudhon, anyway – as “Stirnerites,” even though most of the Group 1 thinkers developed their views independently of Max Stirner; in fact even Tucker, the clearest “Stirnerite” of the lot, was already a committed market anarchist before he’d ever encountered Stirner’s ideas.) When anti-market anarchists propose to decide who is and who isn’t a genuine market anarchist, it’s a bit like Christians demanding the right to adjudicate the dispute between Shi’ites and Sunnis. (One suspects that some of the anti-market folks would really like to purge both groups of market anarchists, but the anarchist credentials of Group 1 are too well-established for that to be a practical solution.)
Is it their stand on the wages system and the exploitation of labour by capital? By that standard, Group 2 thinkers Spencer, Konkin, and Friedman, who favoured abolition of wage labour, all belong in Group 1, while Molinari and Donisthorpe, who favoured reforming the wages system to shift the power balance in workers’ favour, fall somewhere between the two groups.
