by the agents of shareholders? What is most likely to hold it to its
main purpose, and to be least at the mercy of predatory interests and
functionless supernumeraries, and of the alternations of sullen
dissatisfaction and spasmodic revolt which at present distract it?
Whatever the system upon which industry is administered, one thing is
certain. Its economic processes and results must be public, because
only if they are public can it be known whether the service of industry
is vigilant, effective and honorable, whether its purpose is being
realized and its function carried out. The defense of secrecy in
business resembles the defense of adulteration on the ground that it is
a legitimate weapon of competition; indeed it has even less
justification than that famous doctrine, for the condition of effective
competition is publicity, and one motive for secrecy is to prevent it.
Those who conduct industry at the present time and who are most
emphatic that, as the Duke of Wellington said of the unreformed House
of Commons, they "have never read or heard of any measure up to the
present moment which can in any degree satisfy the mind" that the
method of conducting it can in any way be improved, are also those
apparently who, with some {124} honorable exceptions, are most
reluctant that the full facts about it should be known. And it is
crucial that they should be known. It is crucial not only because, in
the present ignorance of the real economic situation, all industrial
disagreements tend inevitably to be battles in the dark, in which
"ignorant armies clash by night," but because, unless there is complete
publicity as to profits and costs, it is impossible to form any
judgment either of the reasonableness of the prices which are charged
or of the claims to remuneration of the different parties engaged in
production. For balance sheets, with their opportunities for
concealing profits, give no clear light upon the first, and no light at
all upon the second. And so, when the facts come out, the public is
aghast at revelations which show that industry is conducted with
bewildering financial extravagance. If the full facts had been
published, as they should have been, quarter by quarter, these
revelations would probably not have been made at all, because publicity
itself would have been an antiseptic and there would have been nothing
sensational to reveal.
The events of the last few years are a lesson which should need no
repetition. The Government, surprised at the price charged for making
shells at a time when its soldiers were ordered by Headquarters not to
fire more than a few rounds per day, whatever the need for retaliation,
because there were not more than a few to fire, establishes a costing
department to analyze the estimates submitted by manufacturers and to
compare them, item by item, with the costs in its own factories. It
finds that, through the mere pooling of knowledge, {125} "some of the
reductions made in the price of shells and similar munitions," as the
Chartered Accountant employed by the Department tells us, "have been as
high as 50% of the original price." The household consumer grumbles at
the price of coal. For once in a way, amid a storm of indignation from
influential persons engaged in the industry, the facts are published.
And what do they show? That, after 2/6 has been added to the already
high price of coal because the poorer mines are alleged not to be
paying their way, 21% of the output examined by the Commission was
produced at a profit of 1/- to 3/- per ton, 32% at a profit of 3/- to
5/-, 13% at a profit of 5/- to 7/-, and 14% at a profit of 7/- per ton
and over, while the profits of distributors in London alone amount in
the aggregate to over $3,200,000, and the co-operative movement, which
aims not at profit, but at service, distributes household coal at a
cost of from 2/- to 4/- less per ton than is charged by the coal
trade![1]
"But these are exceptions." They may be. It is possible that in the
industries, in which, as the recent Committee on Trusts has told us,
"powerful Combinations or Consolidations of one kind or another are in
a position effectively to control output and prices," not only costs
are cut to the bare minimum but profits are inconsiderable. But then
why insist on this humiliating tradition of secrecy with regard to
them, when every one who uses their products, and every one who renders
honest service to production, stands to gain by publicity? If industry
is to become a profession, whatever its {126} management, the first of
its professional rules should be, as Sir John Mann told the Coal
Commission, that "all cards should be placed on the table." If it were
the duty of a Public Department to publish quarterly exact returns as
to costs of production and profits in all the firms throughout an
industry, the gain in mere productive efficiency, which should appeal
to our enthusiasts for output, would be considerable; for the
organization whose costs were least would become the standard with
which all other types of organization would be compared. The gain in
_morale_, which is also, absurd though it may seem, a condition of
efficiency, would be incalculable. For industry would be conducted in
the light of day. Its costs, necessary or unnecessary, the
distribution of the return to it, reasonable or capricious, would be a
matter of common knowledge. It would be held to its purpose by the
mere impossibility of persuading those who make its products or those
who consume them to acquiesce, as they acquiesce now, in expenditure
which is meaningless because it has contributed nothing to the service
which the industry exists to perform.
The organization of industry as a profession does not involve only the
abolition of functionless property, and the maintenance of publicity as
the indispensable condition of a standard of professional honor. It
implies also that those who perform its work should undertake that its
work is performed effectively. It means that they should not merely be
held to the service of the public by fear of personal inconvenience or
penalties, but that they should treat the discharge of professional
{127} responsibilities as an obligation attaching not only to a small
_elite_ of intellectuals, managers or "bosses," who perform the
technical work of "business management," but as implied by the mere
entry into the industry and as resting on the corporate consent and
initiative of the rank and file of workers. It is precisely, indeed,
in the degree to which that obligation is interpreted as attaching to
all workers, and not merely to a select class, that the difference
between the existing industrial order, collectivism and the
organization of industry as a profession resides. The first involves
the utilization of human beings for the purpose of private gain; the
second their utilization for the purpose of public service; the third
the association in the service of the public of their professional
pride, solidarity and organization.
The difference in administrative machinery between the second and third
might not be considerable. Both involve the drastic limitation or
transference to the public of the proprietary rights of the existing
owners of industrial capital. Both would necessitate machinery for
bringing the opinion of the consumers to bear upon the service supplied
them by the industry. The difference consists in the manner in which
the obligations of the producer to the public are conceived. He may
either be the executant of orders transmitted to him by its agents; or
he may, through his organization, himself take a positive part in
determining what those orders should be. In the former case he is
responsible for his own work, but not for anything else. If he hews
his stint of coal, it is no business of his whether the pit is a {128}
failure; if he puts in the normal number of rivets, he disclaims all
further interest in the price or the sea-worthiness of the ship. In
the latter his function embraces something more than the performance of
the specialized piece of work allotted to him. It includes also a
responsibility for the success of the undertaking as a whole. And
since responsibility is impossible without power, his position would
involve at least so much power as is needed to secure that he can
affect in practice the conduct of the industry. It is this collective
liability for the maintenance of a certain quality of service which is,
indeed, the distinguishing feature of a profession. It is compatible
with several different kinds of government, or indeed, when the unit of
production is not a group, but an individual, with hardly any
government at all. What it does involve is that the individual, merely
by entering the profession should have committed himself to certain
obligations in respect of its conduct, and that the professional
organization, whatever it may be, should have sufficient power to
enable it to maintain them.
The demand for the participation of the workers in the control of
industry is usually advanced in the name of the producer, as a plea for
economic freedom or industrial democracy. "Political freedom," writes
the Final Report of the United States Commission of Industrial
Relations, which was presented in 1916, "can exist only where there is
industrial freedom.... There are now within the body of our Republic
industrial communities which are virtually Principalities, oppressive
to those dependent upon them for a livelihood {129} and a dreadful
menace to the peace and welfare of the nation." The vanity of
Englishmen may soften the shadows and heighten the lights. But the
concentration of authority is too deeply rooted in the very essence of
Capitalism for differences in the degree of the arbitrariness with
which it is exercised to be other than trivial. The control of a large
works does, in fact, confer a kind of private jurisdiction in matters
concerning the life and livelihood of the workers, which, as the United
States' Commission suggests, may properly be described as "industrial
feudalism." It is not easy to understand how the traditional liberties
of Englishmen are compatible with an organization of industry which,
except in so far as it has been qualified by law or trade unionism,
permits populations almost as large as those of some famous cities of
the past to be controlled in their rising up and lying down, in their
work, economic opportunities, and social life by the decisions of a
Committee of half-a-dozen Directors.
The most conservative thinkers recognize that the present organization
of industry is intolerable in the sacrifice of liberty which it entails
upon the producer. But each effort which he makes to emancipate
himself is met by a protest that if the existing system is incompatible
with freedom, it at least secures efficient service, and that efficient
service is threatened by movements which aim at placing a greater
measure of industrial control in the hands of the workers. The attempt
to drive a wedge between the producer and the consumer is obviously the
cue of all the interests which are conscious that by themselves they
are unable to hold back {130} the flood. It is natural, therefore,
that during the last few months they should have concentrated their
efforts upon representing that every advance in the demands and in the
power of any particular group of workers is a new imposition upon the
general body of the public. Eminent persons, who are not obviously
producing more than they consume, explain to the working classes that
unless they produce more they must consume less. Highly syndicated
combinations warn the public against the menace of predatory
syndicalism. The owners of mines and minerals, in their new role as
protectors of the poor, lament the "selfishness" of the miners, as
though nothing but pure philanthropy had hitherto caused profits and
royalties to be reluctantly accepted by themselves.
The assumption upon which this body of argument rests is simple. It is
that the existing organization of industry is the safeguard of
productive efficiency, and that from every attempt to alter it the
workers themselves lose more as consumers than they can gain as
producers. The world has been drained of its wealth and demands
abundance of goods. The workers demand a larger income, greater
leisure, and a more secure and dignified status. These two demands, it
is argued, are contradictory. For how can the consumer be supplied
with cheap goods, if, as a worker, he insists on higher wages and
shorter hours? And how can the worker secure these conditions, if as a
consumer, he demands cheap goods? So industry, it is thought, moves in
a vicious circle of shorter hours and higher wages and less production,
which in time must mean {131} longer hours and lower wages; and every
one receives less, because every one demands more.
The picture is plausible, but it is fallacious. It is fallacious not
merely in its crude assumption that a rise in wages necessarily
involves an increase in costs, but for another and more fundamental
reason. In reality the cause of economic confusion is not that the
demands of producer and consumer meet in blunt opposition; for, if they
did, their incompatibility, when they were incompatible, would be
obvious, and neither could deny his responsibility to the other,
however much he might seek to evade it. It is that they do not, but
that, as industry is organized to-day, what the worker foregoes the
general body of consumers does not necessarily gain, and what the
consumer pays the general body of workers does not necessarily receive.
If the circle is vicious, its vice is not that it is closed, but that
it is always half open, so that part of production leaks away in
consumption which adds nothing to productive energies, and that the
producer, because he knows this, does not fully use even the productive
energy which he commands.
It is the consciousness of this leak which sets every one at cross
purposes. No conceivable system of industrial organization can secure
industrial peace, if by "peace" is meant a complete absence of
disagreement. What could be secured would be that disagreements should
not flare up into a beacon of class warfare. If every member of a
group puts something into a common pool on condition of taking
something out, they may still quarrel about the size of the shares, as
children quarrel {132} over cake; but if the total is known and the
claims admitted, that is all they can quarrel about, and, since they
all stand on the same footing, any one who holds out for more than his
fellows must show some good reason why he should get it. But in
industry the claims are not all admitted, for those who put nothing in
demand to take something out; both the total to be divided and the
proportion in which the division takes place are sedulously concealed;
and those who preside over the distribution of the pool and control
what is paid out of it have a direct interest in securing as large a
share as possible for themselves and in allotting as small a share as
possible to others. If one contributor takes less, so far from it
being evident that the gain will go to some one who has put something
in and has as good a right as himself, it may go to some one who has
put in nothing and has no right at all. If another claims more, he may
secure it, without plundering a fellow-worker, at the expense of a
sleeping partner who is believed to plunder both. In practice, since
there is no clear principle determining what they ought to take, both
take all that they can get.
In such circumstances denunciations of the producer for exploiting the
consumer miss the mark. They are inevitably regarded as an economic
version of the military device used by armies which advance behind a
screen of women and children, and then protest at the brutality of the
enemy in shooting non-combatants. They are interpreted as evidence,
not that a section of the producers are exploiting the remainder, but
that a minority of property-owners, which is in opposition to {133}
both, can use its economic power to make efforts directed against those
who consume much and produce little rebound on those who consume little
and produce much. And the grievance, of which the Press makes so much,
that some workers may be taking too large a share compared with others,
is masked by the much greater grievance, of which it says nothing
whatever, that some idlers take any share at all. The abolition of
payments which are made without any corresponding economic service is
thus one of the indispensable conditions both of economic efficiency
and industrial peace, because their existence prevents different
classes of workers from restraining each other, by uniting them all
against the common enemy. Either the principle of industry is that of
function, in which case slack work is only less immoral than no work at
all; or it is that of grab, in which case there is no morality in the
matter. But it cannot be both. And it is useless either for
property-owners or for Governments to lament the mote in the eye of the
trade unions as long as, by insisting on the maintenance of
functionless property, they decline to remove the beam in their own.
The truth is that only workers can prevent the abuse of power by
workers, because only workers are recognized as possessing any title to
have their claims considered. And the first step to preventing the
exploitation of the consumer by the producer is simple. It is to turn
all men into producers, and thus to remove the temptation for
particular groups of workers to force their claims at the expense of
the public, by removing the valid excuse that such gains as they may
get are {134} taken from those who at present have no right to them,
because they are disproportionate to service or obtained for no service
at all. Indeed, if work were the only title to payment, the danger of
the community being exploited by highly organized groups of producers
would largely disappear. For, when no payments were made to
non-producers, there would be no debatable ground for which to
struggle, and it would become evident that if any one group of
producers took more, another must put up with less.
Under such conditions a body of workers who used their strong strategic
position to extort extravagant terms for themselves at the expense of
their fellow-workers might properly be described as exploiting the
community. But at present such a statement is meaningless. It is
meaningless because before the community can be exploited the community
must exist, and its existence in the sphere of economics is to-day not
a fact but only an aspiration. The procedure by which, whenever any
section of workers advance demands which are regarded as inconvenient
by their masters, they are denounced as a band of anarchists who are
preying on the public may be a convenient weapon in an emergency, but,
once it is submitted to analysis, it is logically self-destructive. It
has been applied within recent years, to the postmen, to the engineers,
to the policemen, to the miners and to the railway men, a population
with their dependents, of some eight million persons; and in the case
of the last two the whole body of organized labor made common cause
with those of whose exorbitant demands it was alleged to be the victim.
But when these {135} workers and their sympathizers are deducted, what
is "the community" which remains? It is a naive arithmetic which
produces a total by subtracting one by one all the items which compose
it; and the art which discovers the public interest by eliminating the
interests of successive sections of the public smacks of the
rhetorician rather than of the statesman.
The truth is that at present it is idle to seek to resist the demands
of any group of workers by appeals to "the interests of society,"
because to-day, as long as the economic plane alone is considered,
there is not one society but two, which dwell together in uneasy
juxtaposition, like Sinbad and the Old Man of the Sea, but which in
spirit, in ideals, and in economic interest, are worlds asunder. There
is the society of those who live by labor, whatever their craft or
profession, and the society of those who live on it. All the latter
cannot command the sacrifices or the loyalty which are due to the
former, for they have no title which will bear inspection. The
instinct to ignore that tragic division instead of ending it is
amiable, and sometimes generous. But it is a sentimentality which is
like the morbid optimism of the consumptive who dares not admit even to
himself the virulence of his disease. As long as the division exists,
the general body of workers, while it may suffer from the struggles of
any one group within it, nevertheless supports them by its sympathy,
because all are interested in the results of the contest carried on by
each. Different sections of workers will exercise mutual restraint
only when the termination of the {136} struggle leaves them face to
face with each other, and not as now, with the common enemy. The ideal
of a united society in which no one group uses its power to encroach
upon the standards of another is, in short, unattainable, except
through the preliminary abolition of functionless property.
Those to whom a leisure class is part of an immutable order without
which civilization is inconceivable, dare not admit, even to
themselves, that the world is poorer, not richer, because of its
existence. So, when, as now it is important that productive energy
should be fully used, they stamp and cry, and write to _The Times_
about the necessity for increased production, though all the time they
themselves, their way of life and expenditure, and their very existence
as a leisure class, are among the causes why production is not
increased. In all their economic plans they make one reservation,
that, however necessitous the world may be, it shall still support
them. But men who work do not make that reservation, nor is there any
reason why they should; and appeals to them to produce more wealth
because the public needs it usually fall upon deaf ears, even when such
appeals are not involved in the ignorance and misapprehensions which
often characterize them.
For the workman is not the servant of the consumer, for whose sake
greater production is demanded, but of shareholders, whose primary aim
is dividends, and to whom all production, however futile or frivolous,
so long as it yields dividends, is the same. It is useless to urge
that he should produce more wealth for the {137} community, unless at
the same time he is assured that it is the community which will benefit
in proportion as more wealth is produced. If every unnecessary charge
upon coal-getting had been eliminated, it would be reasonable that the
miners should set a much needed example by refusing to extort better
terms for themselves at the expense of the public. But there is no
reason why they should work for lower wages or longer hours as long as
those who are to-day responsible for the management of the industry
conduct it with "the extravagance and waste" stigmatized by the most
eminent official witness before the Coal Commission, or why the
consumer should grumble at the rapacity of the miner as long as he
allows himself to be mulcted by swollen profits, the costs of an
ineffective organization, and unnecessary payments to superfluous
middlemen.