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The supply of labour in 19h century Britain was usually too elastic for trade unions to employ militant policies with much success. Discuss.

Unionism was not very popular in Britain for the majority of the 19th century. It was still a minority in 1850 although the Combination Act prohibiting unionism had been repealed in 1824. Despite, there was a significant amount of unionism at the beginning of the 19th century. Unions were either informal or called themselves friendly societies. Unions among the skilled workers were much more successful. Being their member was a prestigious position, for what a substantial fee had to be paid. These unions were usually very strict in admitting new members. Besides the high entrance fee they also limited the amount of overtime and new apprentices taken (i.e. by allowing only the children of current workers to take up an apprentice). But unions were not militant against the employers. This phenomena can easily be explained by basic theory about imperfect labour markets.

Basic labour theory tells us that firm employs labour according to the marginal cost(MC), not by the supply of labour. Also when simplifying and assuming straight line supply for labour, then the MC is twice above it:

Although full employment equilibrium amount should be at q* actually q1 are employed. And w1w3 wage is not received by employees and q1q* cannot get employment. Now if the unions had gone against employers, for example by wage bargaining like they do now, by setting the minimum wage they are prepared to accept at w2, they would have expanded both their employment and wage (as firm's MC would be horizontal up to q*). In the C19 this would have involved too much dispute. Instead unions restricted the supply and as in the short-run, firms continue to have the same MC and the same employment requirement (they cannot substitute the machinery so quickly and so on) the wage will actually rise:

As seen the wage has risen to w4. However in the long term firm will substitute more capital, as did happen during the industrial revolution:

New wage is lower than w4 but higher than original w3, but the employment has decreased significantly, thus further enlarging unemployment. Skilled workers did not have very elastic supply curve as they could not be substituted by machines very easily. Thus it was not necessary or unions to go into trade disputes nor to take a violent action. There were some exception, noticeably among Irish workers and newly mechanised industries.

The story was quite different for the unskilled. Here unions were mostly unsuccessful at the beginning of the century, because there was much more free labour available; it was much harder to unionise children, women and migrants as they satisfied with much less than men; and it was a lot easier to substitute technology or people from other employments instead of unskilled workers. So the supply of unskilled labour was far more elastic. As people were mobile the only way a union could be successful was to unionise all occupations, but here they were faced with great communication and leadership problems.

The number of attempts grew after the 1824. They were more of a utopian system building unions rather than effective working-class organisations. There was the Grand General Union of the UK that never got beyond a loose association of spinning societies in Lancashire in 1829  and R. Owens Grand National Consolidated Trades Union of 1834 that collapsed after the first strike. Main pattern of the unions was that they appeared in boom years and developed quickly, but were destroyed by first signs of recession.

The leaders of the unions were often socialists or people with very radical left wing view, so they tried to employ militant policies for workers rights, but also to fight against capitalism. As the technology was substituting people, they had motivation to destroy machines. The famous example is Luddism - destroying spinning jennies. But the labour was not highly specialised and the market was very competitive. So when a factory started a strike or destruction, it did not halt the whole production of several other people. Also the other workers in other towns did not join (they were too egoist) so there was always a number of blackledgers available, or if not the firm just went into bankruptcy.

After 1850 things changed. Unions were penetrating through to all industries, although at different rates depending on the state of employment and the nature of the industry. The boom in 1870 had unified most of the skilled labour and Acts in 1871 and 1875 gave unions protect to their funds. Unions were developing fastest where the units of productions were large (railways, gas, coal). Unions (especially gas) were managing to secure 8 hour working days etc. But the intense slump in 1879 severely jolted the movement. Unemployment rates rose during 1880, international competition narrowed the producers profit margins, so sliding scale pay and other unpopular measures needed to be used by employers. This caused strikes in 1888 among miners and also gasworkers. Most violent disputes happened in capital goods industries as they were most affected by trade cycles.

Still by 1885 only about 10% of labour was in effective unions, but membership fluctuated widely depending on the trade cycle. So it is really hard to define the elasticity of labour, it was very different depending of the employment rates, because the supply curve of labour is not horizontal - at higher incomes labour starts to value leisure more and there is also a restriction on the flexibility and movement of labour in the short term, so supply curve might look like:

It is obvious that labour supply is more inelastic at q2 than at q1, so its bargaining position is also better.

As seen supply among unskilled workers was getting more elastic because of the machinery and thus they had unionising problems. But there were more serious influences on the inability to unionise than the elasticity, for example increasing free trade, unfavourable legislation and communication problems. This hindered the formation of unions severely, although where they did appear they often used strikes and other militant policies to win themselves better terms. It is not right to make any broad generalisations in this situation, however the militant policies were mostly more successful in booms. Most of the time unions failed in the end, although there were exceptions like gas. Skilled workers, on the other hand, managed to unionise well, but their ideology was not violent. It might have been partly because their supply was more inelastic due to their insubstitubility with machines. So elasticity of labour definitely played a significant role in decreasing the success of trade disputes, however its effects differed in different industries at different times, so it is not correct to make a generalisation and there were many more significant factors contributing towards the failure of disputes than just too elastic supply.

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