ABSTRACT
T HE movements we are about to study in this chaptermay be described as examples of paternalism inindustry. They are attempts to modify the terms of the wage-contract from the side of the employer, just as trade unionism and co-operation are attempts to modify it from the side of the worker. The initiative is taken in this case by the capitalist who voluntarily divests himself of certain of his privileges and admits his employees to a share in his business, it may be simply to a share in the profits, or it may be to a share in the profits and the management combined. In either case, the result is to substitute a partnership for the dependent relations which previously united labour and capital. Sometimes, indeed, the employer may go further and abdicate his sovereign position altogether, transforming his business into a co-operative enterprise to be run by his employees. But the cases where profit-sharing has produced this revolutionary result are rare, and the supporters of the movement are content to set before themselves a more limited aim, namely, the establishment of some kind of alliance between the two chief agents of production. The oldest existing examples of profit-sharing are to be found in France." and it is two French industrialists, Leclaire and Godin, who are generally regarded as the pioneers of the movement. The careers of the two men present a remarkable similarity. Both commenced life as simple workmen and raised themselves by their energy and ability to positions of wealth and influence. Both used the power which their wealth gave them in attempts to rescue labour from its condition of degradation and to raise the worker's standard of life. Leclaire was originally a journeyman house-painter who set up in Paris on his own account in 1827. He had not been long in business before he discovered that through the carelessness and dishonesty of
his workmen he was losing something like 75,000 francs a year. How to obviate this waste became his constant preoccupation. He tried treating his workers well, paying them more than the standard rate and founding a Mutual Provident Society for their benefit. But these methods did not answer. He then began to experiment with the idea of profit-sharing, but here he had to contend with the ignorance and prejudice of his workmen who could see nothing in his proposals but an underhand attempt to reduce wages. Leclaire could only overcome their scruples by calling them to a meeting, emptying a bag of gold on the table and there and then distributing to each of them a sum of 275 francs. The obstinacy of the workers could not hold out against so practical a proof of their master's sincerity. In 1842 the scheme was put into operation and worked with perfect smoothness until Leclaire's death. It was arranged that Leclaire should receive five per cent. on his capital in addition to a fixed salary as manager, and that the remaining profits should be equally divided between him and his workmen. In 1853 the workmen's share was increased when the expenses of the Mutual Provident Society were made a first charge on the profits of the business.
