THE INDUSTRIAL PROBLEM
192. =What It Means.=--The industrial problem as a whole is a problem
of adjusting the relations of employer and employee to each other and
to the rapidly changing age in the midst of which industry exists. It
is a problem that cannot be solved in a moment, for it has grown out
of previous conditions and relationships. It must be considered in its
causes, its alignments, the difficulties of each party, the efforts at
solution, and the principles and theories that are being worked out
for the settlement of the problem.
193. =Conflict Between Industrial Groups.=--The industrial problem is
not entirely an economic problem, but it is such primarily. The
function of employer and employee is to produce material goods that
have value for exchange. Both enter into the economic relation for
what they can get out of it in material gain. Selfish desire tends to
overcome any consideration of each other's needs or of their mutual
interests. There is a continual conflict between the wage-earner who
wants to make a living and the employer who wants to make money, and
neither stops long to consider the welfare of society as a whole when
any specific issue arises. The conflict between individuals has
developed into a class problem in which the organized forces of labor
confront the organized forces of capital, with little disposition on
either side to surrender an advantage once gained or to put an end to
the conflict by a frank recognition of each other's rights.
It is not strange that this conflict has continued to vex society.
Conflict is one of the characteristics of imperfectly adjusted groups.
It seems to be a necessary preliminary to co-operation, as war is. It
will continue until human beings are educated to see that the
interests of all are paramount to the interests of any group, and
that in the long run any group will gain more of real value for itself
by taking account of the interests of a rival. Railroad history in
recent years has made it very plain that neither railway employees nor
the public have gained as much by hectoring the railroad corporations
as either would have gained by considering the interests of the
railroad as well as its own.
Industrial conflict is due in great part to the unwillingness of the
employer to deal fairly by his employee. There have been worthy
exceptions, of course, but capitalists in the main have not felt a
responsibility to consider the interests of the workers. It has been a
constant temptation to take advantage of the power of wealth for the
exploitation of the wage-earning class. Unfortunately, the modern
industrial period began with economic control in the hands of the
employer, for with the transfer of industry to the factory the laborer
was powerless to make terms with the employer. Unfortunately, also,
the disposition of society was to let alone the relations of master
and dependent in accordance with the _laisser-faire_ theory of the
economists of that period. Government was slow to legislate in favor
of the helpless employee, and the abuses of the time were many. The
process of adjustment has been a difficult one, and experiment has
been necessary to show what was really helpful and practicable.
194. =More than an Industrial Problem.=--In the process of experiment
it has become clear that the industrial problem is more than an
economic problem; secondarily, it is the problem of making a living
that will contribute to the enrichment of life. It is not merely the
adjustment of the wage scale to the profits of the capitalist by class
conflict or peaceful bargaining, nor is it the problem of unemployment
or official labor. The primary task may be to secure a better
adjustment of the economic interests of employer and employee through
an improvement of the wage system, but in the larger sense the
industrial problem is a social and moral one. Sociologists reckon
among the social forces a distinction between elemental desires and
broader interests. Wages are able to satisfy the elemental desires of
hunger and sex feeling by making it possible for a man to marry and
bring up a family and get enough to eat; but there are larger
questions of freedom, justice, comity, personal and social development
that are involved in the labor problem. If wages are so small, or
hours so long, or factory conditions so bad that health is affected,
proper education made impossible, and recreation and religion
prevented, the individual and society suffer much more than with
reference to the elemental desires. The industrial problem is,
therefore, a complex problem, and not one that can be easily or
quickly solved. Although it is necessary to remember all as parts of
one problem of industry, it is a convenience to remember that it is:
(1) An economic problem, involving wages, hours, and conditions of
labor.
(2) A social problem, involving the mental and physical health and the
social welfare of both the individual worker, the family, and the
community.
(3) An ethical problem, involving fairness, justice, comity, and
freedom to the employer, the employee, and the public.
(4) A complex problem, involving many specific problems, chief of
which are the labor of women and children, immigrant labor, prison
labor, organization of labor, insurance, unemployment, industrial
education, the conduct of labor warfare, and the interest of the
public in the industrial problem.
195. =Characteristics of Factory Life.=--Group life in the factory is
not very different in characteristics from group life everywhere. It
is an active life, the hand and brain of the worker keeping pace with
the speedy machine, all together shaping the product that goes to
exchange and storage. It is a social life, many individuals working in
one room, and all the operatives contributing jointly to the making of
the product. It is under control. Captains of industry and their
lieutenants give direction to a group that has been thoroughly and
efficiently organized. Without control and organization industry could
not be successfully carried on, but it is open to question whether
industrial control should not be more democratic, shared in by
representatives of the workers and of the public as well as by the
representatives of corporate capital or a single owner. It is a life
of change. It does not seem so to the operative who turns out the same
kind of a machine product day after day, sometimes by the million
daily, but the personnel of the workers changes, and even the machines
from time to time give way to others of an improved type. It is a life
that has its peculiar weaknesses. The relations of employer and
employee are not cordial; the health and comfort of the worker are
often disregarded; the hours of labor are too long or the wages too
small; the whole working staff is driven at too high speed; the whole
process is on a mechanical rather than a human basis, and the material
product is of more concern than the human producer. These weaknesses
are due to the concentration of control in the hands of employers. The
industrial problem is, therefore, largely a problem of control.
196. =Democratizing Industry.=--When the modern industrial system
began in the eighteenth century the democratic principle played a
small part in social relations. Parental authority in the family, the
master's authority in the school, hierarchical authority in the
church, official authority in the local community, and monarchical
authority in the nation, were almost universal. It is not strange that
the authority of the capitalist in his business was unquestioned. Only
government had the right to interfere in the interest of the lower
classes, and government had little care for that interest. The
democratic principle has been gaining ground in family and school,
state and church; it has found grudging recognition in industry. This
is because the clash of economic interests is keenest in the factory.
But even there the grip of privilege has loosened, and the possibility
of democratizing industry as government has been democratized is being
widely discussed. There is difference of opinion as to how this should
be done. The socialist believes that control can be transferred to the
people in no other way than by collective ownership. Others
progressively inclined accept the principle of government regulation
and believe that in that way the people, through their political
representatives, can control the owners and managers. Others think
that the best results can be obtained by giving a place on the
governing board of an industry to working men alongside the
representatives of capital and permitting them to work out their
problems on a mutual basis. Each of these methods has been tried, but
without demonstrating conclusively the superiority of any one.
Whatever method may come into widest vogue, there must be a
recognition of the principle of democratic interest and democratic
control. No one class in society can dictate permanently to the people
as a whole. Industry is the concern of all, and all must have a share
in managing it for the benefit of all.
197. =Legislation.=--The history of industrial reform is first of all
a story of legislative interference with arbitrary management. When
Great Britain early in the nineteenth century overstepped the bounds
of the let-alone policy and began to legislate for the protection of
the employee, it was but a resumption of a paternal policy that had
been general in Europe before. But formerly government had interfered
in behalf of the employing class, now it was for the people who were
under the control of the exploiting capitalist. The abuses of child
labor were the first to receive attention, and Parliament reduced the
hours of child apprentices to twelve a day. Once begun, restriction
was extended. Beginning in 1833, under the leadership of Lord
Shaftesbury, the working man's friend, the labor of children under
thirteen was reduced to forty-eight hours a week, and children under
nine were forbidden to work at all. The work of young people under
eighteen was limited to sixty-nine hours a week, and then to ten hours
a day; women were included in the last provision. These early laws
were applicable to factories for weaving goods only, but they were
extended later to all kinds of manufacturing and mining. These laws
were not always strictly enforced, but to get them through Parliament
at all was an achievement. Later legislation extended the ten-hour law
to men; then the time was reduced to nine hours, and in many trades
to eight.
In the United States the need of legislation was far less urgent.
Employers could not be so masterful in the treatment of their
employees or so parsimonious in their distribution of wages, because
the laborer always had the option of leaving the factory for the farm,
and land was cheap. Women and children were not exploited in the mines
as in England, pauper labor was not so available, and such trades as
chimney-sweeping were unknown. Then, too, by the time there was much
need for legislation, the spirit of justice was becoming wide-spread
and legislatures responded more quickly to the appeal for protective
legislation. It was soon seen that the industrial problem was not
simply how much an employee should receive for a given piece of work
or time, but how factory labor affected working people of different
sex or age, and how these effects reacted upon society. Those who
pressed legislation believed that the earnings of a child were not
worth while when the child lost all opportunity for education and
healthful physical exercise, and that woman's labor was not profitable
if it deprived her of physical health and nervous energy, and weakened
by so much the stamina of the next generation. The thought of social
welfare seconded the thought of individual welfare and buttressed the
claims of a particular class to economic consideration in such
questions as proper wages. Massachusetts was the first American State
to introduce labor legislation in 1836; in 1869 the same State
organized the first labor bureau, to be followed by a National bureau
in 1884, four years later converted into a government department.
Among the favorite topics of legislation have been the limitation of
woman and child labor, the regulation of wage payments, damages and
similar concerns, protection from dangerous machinery and adequate
factory inspection, and the appointment of boards of arbitration. The
doctrine of the liability of employers in case of accident to persons
in their employ has been increasingly accepted since Great Britain
adopted an employers' liability act in 1880, and since 1897 compulsory
insurance of employees has spread from the continent of Europe to
England and the United States.
198. =The Organization of Labor.=--These measures of protection and
relief have been due in part to the disinterested activity of
philanthropists, and in part to the efforts of organized labor, backed
up by public opinion; occasionally capitalists have voluntarily
improved conditions or increased wages. The greatest agitation and
pressure has come from the labor-unions. Unlike the mediæval guilds,
these unions exist for the purpose of opposing the employer, and are
formed in recognition of the principle that a group can obtain
guarantees that an individual is helpless to secure. Like-mindedness
holds the group together, and consciousness of common interests and
mutual duties leads to sacrifice of individual benefit for the sake of
the group. The moral effect of this sense and practice of mutual
responsibility has been a distinct social gain, and warrants the hope
that a time may come when this consciousness of mutual interests may
extend until it includes the employing class as in the old-time guild.
The modern labor-union is a product of the nineteenth century. Until
1850 there was much experimenting, and a revolutionary sentiment was
prevalent both in America and abroad. The first union movement united
all classes of wage-earners in a nation-wide reform, and aimed at
social gains, such as education as well as economic gains. It hoped
much from political activity, spoke often of social ideals, and did
not disdain to co-operate with any good agency, even a friendly
employer. Class feeling was less keen than later. But it became
apparent that the lines of organization were too loose, that specific
economic reforms must be secured rather than a whole social programme,
and that little could probably be expected from political activity.
Labor began to organize on a basis of trades, class feeling grew
stronger, and trials of strength with employers showed the value of
collective bargaining and fixed agreements. Out of the period grew the
American Federation of Labor. More recently has come the industrial
union, which includes all ranks of labor, like the early labor-union,
and is especially beneficial to the unskilled. It is much more radical
in its methods of operation, and is represented by such notorious
organizations as the United Mine Workers and the International Workers
of the World.
199. =Strikes.=--The principle of organization of the trade-union is
democratic. The unit of organization is the local group of workers
which is represented on the national governing bodies; in matters of
important legislation, a referendum is allowed. Necessarily, executive
power is strongly centralized, for the labor-union is a militant
organization, but much is left to the local union. Though peaceful
methods are employed when possible, warlike operations are frequent.
The favorite weapon is the strike, or refusal to work, and this is
often so disastrous to the employer that it results in the speedy
granting of the laborers' demands. It requires good judgment on the
part of the representatives of labor when to strike and how to conduct
the campaign to a successful conclusion, but statistics compiled by
the National Labor Bureau between 1881 and 1905 indicate that a
majority of strikes ordered by authority of the organization were at
least partially successful.
The successful issue of strikes has demonstrated their value as
weapons of warfare, and they have been accepted by society as
allowable, but they tend to violence, and produce feelings of hatred
and distrust, and would not be countenanced except as measures of
coercion to secure needed reforms. The financial loss due to the
cessation of labor foots up to a large total, but in comparison with
the total amount of wages and profits it is small, and often the
periods of manufacturing activity are so redistributed through the
year that there is really no net loss. Yet a strike cannot be looked
upon in any other way than as a misfortune. Like war, it breaks up
peaceful if not friendly relations, and tends to destroy the
solidarity of society. It tends to strengthen class feeling, which,
like caste, is a handicap to the progress of mankind. Though it may
benefit the working man, it is harmful to the general public, which
suffers from the interruption of industry and sometimes of
transportation, and whose business is disturbed by the blow to
confidence.
200. =Peaceful Methods of Settlement.=--Strikes are so unsettling to
industry that all parties find it better to use diplomacy when
possible, or to submit a dispute to arbitration rather than to resort
to violence. It is in industrial concerns very much as it is in
international politics, and methods used in one circle suggest methods
in the other. Formerly war was a universal practice, and of frequent
occurrence, and duelling was common in the settlement of private
quarrels; now the duel is virtually obsolete, and war is invoked only
as a last resort. Difficulties are smoothed out through the diplomatic
representatives that every nation keeps at the national capitals, and
when they cannot settle an issue the matter is referred to an umpire
satisfactory to both sides. Similarly in industrial disputes the
tendency is away from the strike; when an issue arises representatives
of both sides get together and try to find a way out. There is no good
reason why an employer should refuse to recognize an organization or
receive its representatives to conference, especially if the employer
is a corporation which must work through representatives. Collective
bargaining is in harmony with the spirit of the times and fair for
all. Conference demands frankness on the part of all concerned. It
leads more quickly to understanding and harmony if each party knows
the situation that confronts the other. If the parties immediately
concerned cannot reach an agreement, a third party may mediate and try
to conciliate opposition. If that fails, the next natural step is
voluntarily to refer the matter in dispute to arbitration, or by legal
regulation to compel the disputants to submit to arbitration.
201. =Boards of Conciliation.=--The history of peaceful attempts to
settle industrial disputes in the United States helps to explain the
methods now frequently employed. In 1888, following a series of
disastrous labor conflicts, Congress provided by legislation for the
appointment of a board of three commissioners, which should make
thorough investigation of particular disputes and publish its
findings. The class of disputes was limited to interstate commerce
concerns and the commissioners did not constitute a permanent board,
but the legislative act marked the beginning of an attempt at
conciliation. Ten years later the Erdman Act established a permanent
board of conciliation to deal with similar cases when asked to do so
by one of the parties, and in case of failure to propose arbitration;
it provided, also, for a board of arbitration. Meantime the States
passed various acts for the pacification of industrial disputes; the
most popular have been the appointment of permanent boards of
conciliation and arbitration, which have power to mediate,
investigate, and recommend a settlement. These have been supplemented
by State and national commissions, with a variety of functions and
powers, including investigation and regulation. The experience of
government boards has not been long enough to prove whether they are
likely to be of permanent value, but the results are encouraging to
those who believe that through conciliation and arbitration the
industrial problem can best be solved.
202. =Public Welfare.=--There can be no reasonable complaint of the
interference of the government. The government, whether of State or
nation, represents the people, and the people have a large stake in
every industrial dispute. Society is so interdependent that thousands
are affected seriously by every derangement of industry. This is
especially true of the stoppage of railways, mines, or large
manufacturing establishments, when food and fuel cannot be obtained,
and the delicate mechanism of business is upset. At best the public is
seriously inconvenienced. It is therefore proper that the public
should organize on its part to minimize the derangement of its
interests. In 1901 a National Civic Federation was formed by those who
were interested in industrial peace, and who were large-minded enough
to see that it could not be obtained permanently unless recognition
should be given to all three of the interested parties--the employers,
the employees, and the public. Many small employers of labor are
bitterly opposed to any others than themselves having anything to say
about the methods of conducting industry, but the men of large
experience are satisfied that the day of independence has passed. This
organization includes on its committees representatives of all
parties, and has helped in the settlement of a number of
controversies.
203. =Voluntary Efforts of Employers.=--It is a hopeful sign that
employers themselves are voluntarily seeking the betterment of their
employees. It is a growing custom for corporations to provide for the
comfort, health, and recreation of men and women in their employ.
Rest-rooms, reading-rooms, baths, and gymnasiums are provided;
athletic clubs are organized; lunches are furnished at cost;
continuation schools are arranged. Some manufacturing establishments
employ a welfare manager or secretary whose business it shall be to
devise ways of improving working conditions. When these helps and
helpers are supplied as philanthropy, they are not likely to be
appreciated, for working people do not want to be patronized; if
maintained on a co-operative basis, they are more acceptable. But the
employer is beginning to see that it is good business to keep the
workers contented and healthy. It adds to their efficiency, and in
these days when scientific management is putting so much emphasis on
efficiency, any measures that add to industrial welfare are not to be
overlooked.
204. =Profit-Sharing.=--Another method of conferring benefit upon the
employee is profit-sharing. By means of cash payment or stock bonuses,
he is induced to work better and to be more careful of tools and
machinery, while his expectation of a share in the success of the
business stimulates his interest and his energy and keeps him better
natured. The objections to the plan are that it is paternalistic, for
the business is under the control of the employer and the amount of
profits depends on his honesty, good management, and philanthropic
disposition. There are instances where it has worked admirably, and
from the point of view of the employer it is often worth while,
because it tends to weaken unionism; but it cannot be regarded as a
cure for industrial ills, because it is a remedy of uncertain value,
and at best is not based on the principle of industrial democracy.
205. =Principles for the Solution of the Industrial Problem.=--Three
principles contend for supremacy in all discussions and efforts to
solve the industrial problem. The first is the doctrine of _employer's
control_. This is the old principle that governed industrial relations
until governmental legislation and trade-union activity compelled a
recognition of the worker's rights. By that principle the capitalist
and the laborer are free to work together or to fight each other, to
make what arrangements they can about wages, hours, and health
conditions, to share in profits if the employer is kindly disposed,
but always with labor in a position of subordination and without
recognized rights, as in the old political despotisms, which were
sometimes benevolent but more often ruthless. Only the selfish,
stubborn capitalist expects to see such a system permanently restored.
The second principle is the doctrine of _collective control_. This
theory is a natural reaction from the other, but goes to an opposite
extreme. It is the theory of the syndicalist, who prefers to smash
machinery before he takes control, and of the socialist, who contents
himself with declaring the right of the worker to all productive
property, and agitates peacefully for the abolition of the wage system
in favor of a working man's commonwealth. The socialist blames the
wage system for all the evils of the present industrial order, regards
the trade-unions as useful industrial agencies of reform, but urges a
resort to the ballot as a necessary means of getting control of
industry. There would come first the socialization of natural
resources and transportation systems, then of public utilities and
large industries, and by degrees the socialization of all industry
would become complete. Then on a democratic basis the workers would
choose their industrial officers, arrange their hours, wages, and
conditions of labor, and provide for the needs of every individual
without exploitation, overexertion, or lack of opportunity to work.
Serious objections are made to this programme for productive
enterprise on the ground of the difficulty of effecting the transfer
of the means of production and exchange, and of executive management
without the incentive of abundant pecuniary returns for efficient
superintendency; even more because of the natural selfishness of human
beings who seek personal preferment, and the natural inertia of those
who know that they will be taken care of whether they exert themselves
or not. More serious still are the difficulties that lie in the way of
a satisfactory distribution of the rewards of labor, for there is sure
to be serious difference of opinion over the proper share of each
person who contributes to the work of production, and no method of
initiative, referendum, and recall would avail to smooth out the
difficulties that would be sure to arise.
206. =Co-operation.=--The third principle is _co-operation_. The
principle of co-operation is as important to society as the principle
of division of labor. By means of co-operative activity in the home
the family is able to maintain itself as a useful group. By means of
co-operation in thinly settled communities local prosperity is
possible without any individual possessing large resources. But in
industry where competition rules and the aim of the employer is the
exploitation of the worker, general comfort is sacrificed for the
enrichment of the few and wealth flaunts itself in the midst of
misery. There will always be a problem in the industrial relations of
human beings until there is a recognition of this fundamental
principle of co-operation. The application of the principle to the
complicated system of modern industrialism is not easy, and attempts
at co-operative production by working men with small and incapable
management have not been successful, but it is becoming clear that as
a principle of industrial relation between classes it is to obtain
increasing recognition. If it is proper to admit the claims of the
employer, the employee, and the public to an interest in every labor
issue, then it is proper to look for the co-operation of them all in
the regulation of industry. The usual experiments in co-operative
industry have been the voluntary organization of production, exchange,
or distribution by a group of middle or working class people to save
the large expense of superintendents or middlemen. Co-operation in
production has usually failed; in America co-operative banks and
building associations, creameries, and fruit-growing associations
have had considerable success, and in Europe co-operative stores and
bakeries have had a large vogue in England and Belgium, and
co-operative agriculture in Denmark. But industry on a large scale
requires large capital, efficient management, capable, interested
workmanship, and elimination of waste in material and human life. To
this end it needs the good-will of all parties and the assistance of
government. Unemployment, for instance, may be taken care of by giving
every worker a good industrial education and doing away with
inefficiency, and then establishing a wide-spread system of labor
exchanges to adjust the mass of labor to specific requirements.
Industry is such a big and important matter that nothing less than the
co-operation of the whole of society can solve its problems.
This co-operation, to be effective, requires a genuine partnership, in
which the body of stockholders and the body of working men plan
together, work together, and share together, with the assistance of
government commissions and boards that continually adjust and, if
necessary, regulate the processes of production and distribution on a
basis of equity, to be determined by a consensus of expert opinion. In
such a system there is no radical derangement of existing industry, no
destruction of initiative, no expulsion of expert management or
confiscation of property. Individual and corporate ownership continue,
the wage system is not abolished, efficient administration is still to
be obtained, but the body of control is not a board of directors
responsible only to the stockholders of the corporation, and managing
affairs primarily for their own gain, but it consists of
representatives of those who contribute money, superintendence, and
labor, together with or regulated by a group of government experts,
all of whom are honestly seeking the good of all parties and enjoying
their full confidence. Toward such an outcome of present strife many
interested social reformers are working, and it is to be hoped that
its advantages will soon appear so great that neither extreme
alternative principle will have to be tried out thoroughly before
there will be a general acceptance of the co-operative idea. It may
seem utopian to those who are familiar with the selfishness and
antagonism that have marked the history of the last hundred years, but
it is already being tried out here and there, and it is the only
principle that accords with the experiences and results of social
evolution in other groups. It is the highest law that the struggle for
individual power fails before the struggle for the good of the group,
and a contest for the success of the few must give way to co-operation
for the good of all.
READING REFERENCES
ELLWOOD: _Sociology in Its Psychological Aspects_, pages 188-194.
ADAMS AND SUMNER: _Labor Problems_, pages 175-286, 379-432,
461-500.
_Bulletins of the United States Department of Labor._
CARLTON: _History and Problems of Organized Labor_, pages 228-261.
GLADDEN: _The Labor Question_, pages 77-113.
HENDERSON: _Social Elements_, pages 167-206.
CROSS: _Essentials of Socialism_, pages 11, 12, 106-111.
WYCKOFF: _The Workers._