Review (1893) of Gustave de Molinari’s
Labour-Exchanges (1893)

by David Kinley (1861-1944)

Les Bourses du Travail. Par M. G. de MOLINARI. Paris: Guillaumin et Cie., 1893. 8vo.

GM-LE.1 The revival, or emphasis, of the so-called “historical spirit” and “historical method,” which the past two or three decades have witnessed, has made it fashionable for an author who has any new ideas to present about an existing institution, to trace the institution from its origin to its existing form. This has been done in many cases even where the history was not necessary to the exposition of the author’s contribution to the subject. The results have been an immense waste of literary energy, and the production of many volumes the different parts of which are so loosely related that the volumes are literary aggregations rather than books. M. de Molinari has committed this fault to a certain extent, and yet he shows a keener appreciation than most of the “historical” writers of the necessary relations between the past and present of his subject. He grasps firmly and presents lucidly the parallels between conditions of labor under different social régimes, but does so more than is necessary for the presentation of his own new ideas. M. de Molinari traces the rise of the wages system, discussing the “necessary” and the “current” rates of wages under the law of supply and demand, and sketching the status of labor in the conditions of slavery and serfdom. The rise of the period of liberty is touched on, and an account given of some of the means taken at various times to eke out wages and better the condition of the laboring class.
GM-LE.2 The suggestion of the labor problem which M. de Molinari himself proposes is suggested by the good results which have flowed from the extension of the markets for commodities. The main difficulty in the labor situation, he thinks, results from the inequality of the conditions of the workingman and the employer. The establishment of equality of power in the competition between them would improve the condition of the laborer. The two conceivable solutions of this difficulty are the re-establishment of slavery and the increase in the facility of circulation of labor. The latter solution only is possible and can be effected by the establishment of labor exchanges. These should be private enterprises, the business of which would be to find places for idle workingmen and pay the expense of locating them. The charges of these companies should be paid, not by the individuals whom they serve, but by the labor unions, which should collect funds for the purpose. The benefits which M. de Molinari thinks would flow from his scheme are that it would ensure the placement of laborers at reasonable charges, would remove the inequality between employer and employed in the making of contracts, would bring the market and the “fair” price of labor together, would promote production and furnish a decisive argument for freedom of exchange.
GM-LE.3 M. de Molinari’s plan is ingenious but hardly practicable, at least in the present state of labor organizations in this country. A labor organization might guarantee a labor broker for his outlay, but it would have no guarantee for its own repayment except the poor one of threatening to drop a delinquent workingman from its membership. This might or might not coerce him. Moreover, if the scheme were practicable in its main feature, there is no reason why the labor organizations themselves should not do directly the work of placing idle men and so save the profits of the labor exchange. Again, many of the placements of idle workingmen would be for periods so short that they would afford no margin of wages for the repayment of the expense of transferring the men. Nor would the laborer be less in the power of the employer in the labor contract when the labor market was overstocked, and he would be subject, too, to his new employer, the labor exchange.
GM-LE.4 On a small scale, that is, for local labor markets, M. de Molinari’s plan would doubtless work well; on a scale so large that the element of personality would be lost sight of, it would afford no advantages. The labor exchanges would inevitably come under the influence of employers. The plan deserves praise and attention as an ideal towards which we should work, but could not be out into practice in its entirety under existing conditions; nor, if it could, would it accomplish what its author claims, in this country at least.
GM-LE.5 The appendix contains, among other things, some interesting information on labor exchanges in France.

Journal of Political Economy 1, no. 4 (September 1893), pp. 610-12.

[See also L. L. Price’s review and H. C. Emery’s review]

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