144 THE PROBLEM OF THE UNEMPLOYED
Labour Colonies will draw subsidies from public or private
sources, one grave economic danger must be plainly confronted
and met.
No produce of a Labour Colony should be placed on
the open market in such a way as to compete with the
produce of outside English labour. Such produce being
subsidised will in the open market be able to undersell
and to displace goods produced under ordinary commercial
conditions. The result of such underselling will be to
drive certain weaker outside businesses below the margin
of subsistence and to deprive the workers formerly engaged
in them of their employment. Thus the “employment”
given at the public expense or by charity in a labour
colony would cause an amount of unseen unemployment
as large as that which it cured. This condition though
commonly admitted in theory, is often ignored in practice.
Since it is not possible for labour colonies to be fully
self-supporting in the sense that they produce all they
consume, it is necessary for them to purchase in the
open market what they are unable to produce. To meet
this expense they are often disposed to confine a large
proportion of their capital and labour to producing those
goods which they can make with the greatest advantage
and to sell them in neighbouring markets. The result
is they inevitably help to congest outside markets, lower
prices, and drive the weakest outside producers from the
field. Prison labour, workhouse labour, farm colony
labour, must have this result. If Salvation Army matches
and furniture, if Starnthwaite vegetables and fruit are
placed upon the open markets of the neighbourhood,
they cannot fail to exercise a force which makes for the
“unemployment” of the least efficient outside competitors.