in
such bad repute, and where they are given higher salaries, or they
go into business independently, being able easily to get the needed
backing from passive capitalists.

Cooeperative schemes thus suffer from the workers' inability to
appreciate the functions of enterprise and management. Most men make
a very imperfect analysis of the productive process. They see that
a large part of the product does not go to the workmen; they see the
gross amount going to the enterpriser, and they ignore the fact
that this contains the cost of materials, interest on capital, and
incidental expenses. Further, they fail to see that the investment
function is an essential one. The theory of exploitation, as
explaining profits, is very commonly held in a more or less vague
way by work-men. With a body of intelligent and thoroughly honest
work-men, keenly alive to the truth, the dangers, and the risks of the
enterprise, cooeperation would be possible in many industries where
now it is not. Producers' cooeperative schemes usually stumble into
unsuspected pitfalls. When a heedless and over-confident army ventures
into an enemy's country without a knowledge of its geography, without
a map, and without leaders that have been tested on the field of
battle, the result can easily be foreseen.

The cooeperative principle has been embodied much more successfully
and on a larger scale in America in the form of producers' selling
organizations or of consumers' cooeperative stores. As, however, both
of these forms of organization have been developed in America more
largely by farmers than by wageworkers, the discussion of them may
better be undertaken in connection with problems of rural organization
rather than with those of labor.

[Footnote 1: See Vol. 1, pp. 227, 318, 322; also above, ch. 2, sec.
14.]

[Footnote 2: See e.g., Vol. 1, p. 329, on selection of managed and of
managers.]

[Footnote 3: See below, ch. 20, sec. 6.]

CHAPTER 20

ORGANIZED LABOR

Sec. 1. Changing relations between employers and wage-workers. Sec. 2.
Need of common action among wage-workers. Sec. 3. Functions of labor
organizations. Sec. 4. Types of labor organizations. Sec. 5. Statistics of
labor organizations. Sec. 6. Collective bargaining. Sec. 7. Limitation of
competition among workers. Sec. 8. Strikes in labor disputes. Sec. 9. Frequency
and causes of strikes. Sec. 10. Picketing and the boycott. Sec. 11. Effects
of organization upon g