and capital are thrown almost invariably back into the state of affairs which characterized the merchant-capitalist system at its worst, but with one important difference.  Whereas under the merchant-capitalist system the employer was obliged to press down on wages and fight unionism to death owing to cut-throat competition, the “trust,” its strength supreme in both commodity and labor market, can do so and usually does so of free choice.

The character of the labor struggle has been influenced by cyclical changes in industry as much as by the permanent changes in the organization of industry and market.  In fact, whereas reaction to the latter has generally been slow and noticeable only over long periods of time, with a turn in the business cycle, the labor movement reacted surely and instantaneously.

We observed over the greater part of the history of American labor an alternation of two planes of thought and action, an upper and a lower.  On the upper plane, labor thought was concerned with ultimate goals, self-employment or cooperation, and problems arising therefrom, while action took the form of politics.  On the lower plane, labor abandoned the ultimate for the proximate, centering on betterments within the limits of the wage system and on trade-union activity.  Labor history in the past century was largely a story of labor’s shifting from one plane to another, and then again to the first.  It was also seen that what determined the plane of thought and action at any one time was the state of business measured by movements of wholesale and retail prices and employment and unemployment.  When prices rose and margins of employers’ profits were on the increase, the demand for labor increased and accordingly also labor’s strength as a bargainer; at the same time, labor was compelled to organize to meet a rising cost of living.  At such times trade unionism monopolized the arena, won strikes, increased membership, and forced “cure-alls” and politics into the background.  When, however, prices fell and margins of profit contracted, labor’s bargaining strength waned, strikes were lost, trade unions faced the danger of extinction, and “cure-alls” and politics received their day in court.  Labor would turn to government and politics only as a last resort, when it had lost confidence in its ability to hold its own in industry.  This phenomenon, noticeable also in other countries, came out with particular clearness in America.

For, as a rule, down to the World War, prices both wholesale and retail, fluctuated in America more violently than in England or the Continent.  And twice, once in the thirties and again in the sixties, an irredeemable paper currency moved up the water mark of prices to tremendous heights followed by reactions of corresponding depth.  From the war of 1812, the actual beginning of an industrial America, to the end of the century, the country went through several such complete industrial and business cycles.  We therefore conveniently divide labor and trade union history into periods on the basis of the industrial cycle.  It was only in the nineties, as we saw, that the response of the labor movement to price fluctuations ceased to mean a complete or nearly complete abandonment of trade unionism during depressions.  A continuous and stable trade union movement consequently dates only from the nineties.