high prices, is the ideal to which some of the most advanced advocates of labor copartnership consciously look forward. As an ideal this seems more practicable than that of the government ownership and operation of all industries which socialism proposes, while it is certainly superior to the present system of unregulated and often wasteful competition. Signs are not lacking that in the railroad industry and other monopolistic public service industries whose charges are subject to governmental control the relations between the employing corporation and the workers are gradually developing along copartnership lines. Investors who supply the capital, as they are largely insured against risk of loss, are more and more forced by conditions to content themselves with a fixed rate of return on their investment and to see any surplus earnings devoted to improving the plant so as to render better service to the public or to paying higher wages. Formal recognition has not yet been given to the right of the workers to a voice in the management of the business, but without such formal recognition in actual fact through their organizations they have more and more to say as to how the labor side of the business shall be conducted. Outright labor copartnership subject to rigid governmental control thus does not seem an impossible or even a very distant goal for public service industries. The future is much less clear for labor copartnership in connection with industries that heretofore have been actively competitive, but time may show that many of them, too, can be more economically and efficiently carried on as giant monopolies and in that case private, unregulated operation will also certainly give way to a certain amount of labor copartnership in management, and government regulation. Labor copartnership is an admirable substitute for the competitive system whenever and wherever it can succeed. It appeals to higher motives than mere self-interest and its influence upon the characters of those who engage in it is broadening and ennobling. As time goes on its extension to ever wider fields may be confidently hoped for, but such extension must necessarily be gradual. All of the conditions upon which its successful operation depends-a fuller ap preciation by workmen of the value of the services of business managers and organizers, a willingness on their part to take orders from bosses of their own choosing, and finally an accumulation by them of capital-must be of slow growth. This does not lessen in the least the importance of labor copartnership as a plan of economic reform, but it shows the extent to which the present industrial system is adjusted to the character and attainments of the average man of the present day and emphasizes the truth that it can be displaced only as the average man is raised to a higher plane of thought, feeling and efficiency. REFERENCES FOR COLLATERAL READING Gilman, Profit-sharing Between Employer and Employee and a Dividend to Labor; *Schloss, Methods of Industrial Remuneration; Board of Trade Report on Profit-sharing and Labour Co-partnership in the United Kingdom (1912); Jones, Co-operative Production in Great Britain, 2 vols.; *Fay, Co-operation at Home and Abroad (1908); *Wolf, Coöperation in Agriculture; *Ford, Coöperation in New England; Annals of the English Co-operative Wholesale Society; Proceedings of the Congresses of the International Co-operative Alliance; Year Book of International Co-operation (1913); *Adams and Sumner, Labor Problems, Chap. X. Evils to be CHAPTER XXXII SOCIAL INSURANCE § 343. Among the reform measures that have attracted public attention in all progressive countries in recent years none are more worthy of the thoughtful consideration of students of economics than plans of social, or workingmen's, insurance. Modern wage-earners are not only exposed to misfortunes which other classes escape, but for them the ordinary misfortunes to which we are all liable have a significance, because of the resulting loss in earning power, which they have not for persons with independent incomes. The misfortunes for which social insurance attempts to provide are: industrial accidents, illness, premature death, invalidity through old age, and involuntary unemployment. Economists until of late have very generally held that the only safe way to make provision against these contingencies was through individual saving. Their writings have abounded with laudations of the virtues of thrift and forethought and demonstrations that without them no great progress in average wellbeing could be hoped for. The importance of these virtues is so obvious that it is only in the recent past that the question has seriously been considered whether too much prominence has not been assigned to them. The trouble with exclusive reliance upon them as means of providing against accidents, illness, premature death, old age and unemployment, is that such saving has proved in practice to be quite inadequate for the purpose. The proportion of wage-earners who accumulate savings has remained small, even in countries of relatively high wages, like the United States. Moreover, individual savings, even on the part of thrifty and ambitious wage-earners, are constantly liable to be swept away by one of these misfortunes if the disability to which it gives rise is prolonged. Few wage-earners are able to save enough to ARGUMENT FOR INSURANCE 611 carry them through a whole year's loss of wages. Even fewer accumulate enough to make adequate provision for their families when death overtakes them prematurely or for themselves when it is their fate to linger on many years after their ability to command wages has departed. The usual result of a prolonged stoppage of wages is thus dependency on public or private charity with all of the suffering, humiliation and loss of ambition and of efficiency which this entails. Since these misfortunes for the individual wage-earner are Argument risks rather than certainties, the economical way to provide for Inagainst them is through some system of insurance. If all surance. wage-earners of a given group could be induced to contribute to a common insurance fund relatively small savings would suffice to supply incomes to the victims of these misfortunes during their resulting disability. The difficulty is that most wage-earners are unable or unwilling to make the necessary provision even through the machinery of insurance. Influenced by the standards of those about them they assume the responsibilities of married life so soon as their wages suffice to meet the ordinary expenses of family maintenance. When children begin to come the demands upon their incomes for daily needs leave little or no margin for provision for the future. Thus it happens that so long as such provision is voluntary, it is largely or entirely neglected for the sake of the more pressing wants for food, clothing, shelter and recreation. Only the exceptional wage-earner carries any form of insurance beyond moderate burial insurance for himself or the members of his family. It is this situation that has led to the adoption of plans of social insurance. Since wageearners will not and cannot afford to insure themselves against the risks to which they and their families are exposed, organized society, it is maintained, must interfere to require them to make such provision and to add to the resulting insurance funds through appropriations from the public treasury and through enforced contributions from employers, who are especially interested in the maintenance of a vigorous and efficient * Even invalidity from old age is a risk, since, according to American life tables, nearly two-thirds of those who pass the age of ten dio before the age of seventy is reached. of Social Definition wage-earning population. Social insurance may thus be defined as compulsory collective provision for the victims, and Insurance. the families of the victims, of accidents, illness, premature death, disability from old age and unemployment, regulated, if not actually administered, by the government. Germany's § 344. Industrial accidents have been the first of these misCompulsory fortunes to receive attention in most countries. The plans Accident for providing for the victims of industrial accidents and their Insurance System. families have taken three different forms. Germany, the pioneer in this, as in most other fields of social insurance, adopted in 1884 the system of requiring employers to become members of mutual accident insurance associations. These associations levy assessments on their members sufficient to provide funds from which to pay compensation in accordance with a prescribed scale to the victims of industrial accidents, or their dependents in case the accidents result in death. The management of these associations is in the hands of the employers themselves but they are supervised by the German Imperial Insurance Office, to which appeal may be carried by wage-earners or their dependents when the compensation offered is considered to be inadequate. This arrangement for accident insurance supplements an arrangement for illness insurance created in 1883, and to lighten the burden imposed on employers compensation for accidents begins only with the fourteenth week of disability, provision for the victims of accidents during the first thirteen weeks being made out of the illness insurance funds to which employees are compelled to contribute the larger share. The great merit of this system is that it gives German employers the strongest incentive to lessen to the greatest possible extent the frequency and seriousness of accidents. Since every accident means expense to the employers' associations, these bodies have taken the lead in organizing museums of safety, maintaining staffs of inspectors to advise employers as to the latest safety devices and encouraging through prizes and other rewards those of their members who show the lowest proportion of accidents in their plants. A second system of providing against industrial accidents was inaugurated by Norway in 1894. In that country em |