little, as possible. The former are disposed to combine in
order to raise, the latter in order to lower, the wages of
labour.... We rarely hear, it has been said, of the
combinations of masters, though frequently of those of
workmen. But whoever imagines, upon this account, that
masters rarely combine is as ignorant of the world as of the
subject. Masters are always and everywhere in a sort of
tacit but constant and uniform combination not to raise the
wages of labour above their actual rate. To violate this
combination is everywhere a most unpopular action and a sort
of reproach to a master among his neighbours and equals. We
seldom, indeed, hear of this combination, because it is the
usual, and one may say, the natural state of things which
nobody ever hears of. Masters, too, sometimes enter into
particular combinations to sink the wages of labour even
below this rate. These are always conducted with the utmost
secrecy till the moment of execution; and, when the workmen
yield, as they sometimes do without resistance, though
severely felt by them, they are never heard of by other
people. Such combinations, however, are frequently resisted
by a contrary defensive combination of the workmen, who
sometimes, too, without any provocation of this kind,
combine of their own accord to raise the price of labour.
Their usual pretences are, sometimes the high price of
provisions, sometimes the great profit which their masters
make by their work.'

These words were written 140 years ago, but, as we all know, they are
still true of the working of the system to-day. Indeed the war has
served to emphasize their truth by showing us how deeply entrenched are
the habits of bargaining and of latent antagonism which the working of
the wage-system has engendered. It is the defect of the wage-system, as
Adam Smith makes clear to us, that it lays stress on just those points
in the industrial process where the interests of employers and
workpeople run contrary to one another, whilst obscuring those far more
important aspects in which they are partners and fellow-workers in the
service of the community. This defect cannot be overcome by
strengthening one party to the contract at the expense of the other, by
crushing trade unions or dissolving employers' combinations, or even by
establishing the principle of collectiv