Conflict or co-operation?

The forty years between 1874 and 1914 saw the emergence of a new relationship between labour, employers and the state. Organised labour sought to extend its control over its role in the mature industrial economy, the business men had to respond to this demand, and the state, itself changing in terms of control and structure, had to find ways of obviating or easing the mounting tensions between two great powers that had developed under its aegis, and which might threaten the basis upon which it rested. What had certainly been important throughout the earlier part of the century, namely the limits to be imposed by the state on labour action, moved to the centre of things, becoming the greatest and most difficult challenge for governments.

Before 1874 stress between labour and capital had been seen largely in terms of the particular firm, or of the industry. By 1914 it could be seen, constantly by a few and occasionally by many, as lying between two great orders of society, capital and labour, being concerned with the general distribution of the product as between profits and wages, and with the power relations this involved. To this set of considerations was related the rate of capital formation and the consequent possibility of raising future productivity by the implementation of new technology; if too much of the current product were to be dispersed in wages, thus impairing the return to capital, would new capital be forthcoming on a sufficient scale?