guarantee that the result will be lower prices rather than higher
dividends and larger royalties, any more than, as a workman, he can
determine the quality of the wares which his employer supplies to
customers, or the price at which they are sold. Nor, as long as he is
directly the servant of a profit-making company, and only indirectly
the servant of the community, can any such guarantee be offered him.
It can be offered only in so far as he stands in an immediate and
direct relation to the public for whom industry is carried on, so that,
when all costs have been met, any surplus will pass to it, and not to
private individuals. It will be accepted only in so far as the workers
in each industry are not merely servants executing orders, but {138}
themselves have a collective responsibility for the character of the
service, and can use their organizations not merely to protect
themselves against exploitation, but to make positive contributions to
the administration and development of their industry.
[1] _Coal Industry Commission, Minutes of Evidence_, pp. 9261-9.
{139}
IX
THE CONDITION OF EFFICIENCY
Thus it is not only for the sake of the producers, on whom the old
industrial order weighed most heavily, that a new industrial order is
needed. It is needed for the sake of the consumers, because the
ability on which the old industrial order prided itself most and which
is flaunted most as an argument against change, the ability to serve
them effectively, is itself visibly breaking down. It is breaking down
at what was always its most vulnerable point, the control of the human
beings whom, with characteristic indifference to all but their economic
significance, it distilled for its own purposes into an abstraction
called "Labor." The first symptom of its collapse is what the first
symptom of economic collapses has usually been in the past--the failure
of customary stimuli to evoke their customary response in human effort.
Till that failure is recognized and industry reorganized so that new
stimuli may have free play, the collapse will not correct itself, but,
doubtless with spasmodic revivals and flickerings of energy, will
continue and accelerate. The cause of it is simple. It is that those
whose business it is to direct economic activity are increasingly
incapable of directing the men upon whom economic activity depends.
The fault is not that of individuals, but of a system, of Industrialism
itself. {140} During the greater part of the nineteenth century
industry was driven by two forces, hunger and fear, and the employer
commanded them both. He could grant or withhold employment as he
pleased. If men revolted against his terms he could dismiss them, and
if they were dismissed what confronted them was starvation or the
workhouse. Authority was centralized; its instruments were passive;
the one thing which they dreaded was unemployment. And since they
could neither prevent its occurrence nor do more than a little to
mitigate its horrors when it occurred, they submitted to a discipline
which they could not resist, and industry pursued its course through
their passive acquiescence in a power which could crush them
individually if they attempted to oppose it.
That system might be lauded as efficient or denounced as inhuman. But,
at least, as its admirers were never tired of pointing out, it worked.
And, like the Prussian State, which alike in its virtues and
deficiencies it not a little resembled, as long as it worked it
survived denunciations of its methods, as a strong man will throw off a
disease. But to-day it is ceasing to have even the qualities of its
defects. It is ceasing to be efficient. It no longer secures the
ever-increasing output of wealth which it offered in its golden prime,
and which enabled it to silence criticism by an imposing spectacle of
material success. Though it still works, it works unevenly, amid
constant friction and jolts and stoppages, without the confidence of
the public and without full confidence even in itself, a tyrant who
must intrigue and cajole where formerly he commanded, a gaoler who, if
not yet {141} deprived of whip, dare only administer moderate
chastisement, and who, though he still protests that he alone can keep
the treadmill moving and get the corn ground, is compelled to surrender
so much of his authority as to make it questionable whether he is worth
his keep. For the instruments through which Capitalism exercised
discipline are one by one being taken from it. It cannot pay what
wages it likes or work what hours it likes. In well-organized
industries the power of arbitrary dismissal, the very center of its
authority, is being shaken, because men will no longer tolerate a
system which makes their livelihood dependent on the caprices of an
individual. In all industries alike the time is not far distant when
the dread of starvation can no longer be used to cow dissatisfied
workers into submission, because the public will no longer allow
involuntary unemployment to result in starvation.
And if Capitalism is losing its control of men's bodies, still more has
it lost its command of their minds. The product of a civilization
which regarded "the poor" as instruments, at worst of the luxuries, at
best of the virtues, of the rich, its psychological foundation fifty
years ago was an ignorance in the mass of mankind which led them to
reverence as wisdom the very follies of their masters, and an almost
animal incapacity for responsibility. Education and experience have
destroyed the passivity which was the condition of the perpetuation of
industrial government in the hands of an oligarchy of private
capitalists. The workman of to-day has as little belief in the
intellectual superiority of many of those who direct industry as he has
in the morality of {142} the system. It appears to him to be not only
oppressive, but wasteful, unintelligent and inefficient. In the light
of his own experience in the factory and the mine, he regards the claim
of the capitalist to be the self-appointed guardian of public interests
as a piece of sanctimonious hypocrisy. For he sees every day that
efficiency is sacrificed to shortsighted financial interests; and while
as a man he is outraged by the inhumanity of the industrial order, as a
professional who knows the difference between good work and bad he has
a growing contempt at once for its misplaced parsimony and its
misplaced extravagance, for the whole apparatus of adulteration,
advertisement and quackery which seems inseparable from the pursuit of
profit as the main standard of industrial success.
So Capitalism no longer secures strenuous work by fear, for it is
ceasing to be formidable. And it cannot secure it by respect, for it
has ceased to be respected. And the very victories by which it seeks
to reassert its waning prestige are more disastrous than defeats.
Employers may congratulate themselves that they have maintained intact
their right to freedom of management, or opposed successfully a demand
for public ownership, or broken a movement for higher wages and shorter
hours. But what is success in a trade dispute or in a political
struggle is often a defeat in the workshop: the workmen may have lost,
but it does not follow that their employers, still less that the
public, which is principally composed of workmen, have won. For the
object of industry is to produce goods, and to produce them at the
lowest cost in human effort. {143} But there is no alchemy which will
secure efficient production from the resentment or distrust of men who
feel contempt for the order under which they work. It is a commonplace
that credit is the foundation of industry. But credit is a matter of
psychology, and the workman has his psychology as well as the
capitalist. If confidence is necessary to the investment of capital,
confidence is not less necessary to the effective performance of labor
by men whose sole livelihood depends upon it. If they are not yet
strong enough to impose their will, they are strong enough to resist
when their masters would impose theirs. They may work rather than
strike. But they will work to escape dismissal, not for the greater
glory of a system in which they do not believe; and, if they are
dismissed, those who take their place will do the same.
That this is one cause of a low output has been stated both by
employers and workers in the building industry, and by the
representatives of the miners before the Coal Commission. It was
reiterated with impressive emphasis by Mr. Justice Sankey. Nor is it
seriously contested by employers themselves. What else, indeed, do
their repeated denunciations of "restriction of output" mean except
that they have failed to organize industry so as to secure the
efficient service which it is their special function to provide? Nor
is it appropriate to the situation to indulge in full-blooded
denunciations of the "selfishness" of the working classes. "To draw an
indictment against a whole nation" is a procedure which is as
impossible in industry as it is in politics. Institutions must be
adapted to human nature, not {144} human nature to institutions. If
the effect of the industrial system is such that a large and increasing
number of ordinary men and women find that it offers them no adequate
motive for economic effort, it is mere pedantry to denounce men and
women instead of amending the system.
Thus the time has come when absolutism in industry may still win its
battles, but loses the campaign, and loses it on the very ground of
economic efficiency which was of its own selection. In the period of
transition, while economic activity is distracted by the struggle
between those who have the name and habit of power, but no longer the
full reality of it, and those who are daily winning more of the reality
of power but are not yet its recognized repositories, it is the
consumer who suffers. He has neither the service of docile obedience,
nor the service of intelligent co-operation. For slavery will work--as
long as the slaves will let it; and freedom will work when men have
learned to be free; but what will not work is a combination of the two.
So the public goes short of coal not only because of the technical
deficiencies of the system under which it is raised and distributed,
but because the system itself has lost its driving force--because the
coal owners can no longer persuade the miners into producing more
dividends for them and more royalties for the owners of minerals, while
the public cannot appeal to them to put their whole power into serving
itself, because it has chosen that they should be the servants, not of
itself, but of shareholders.
And, this dilemma is not, as some suppose, temporary, {145} the
aftermath of war, or peculiar to the coal industry, as though the
miners alone were the children of sin which in the last few months they
have been described to be. It is permanent; it has spread far; and, as
sleeping spirits are stirred into life by education and one industry
after another develops a strong corporate consciousness, it will spread
further. Nor will it be resolved by lamentations or menaces or
denunciations of leaders whose only significance is that they say
openly what plain men feel privately. For the matter at bottom is one
of psychology. What has happened is that the motives on which the
industrial system relied for several generations to secure efficiency,
secure it no longer. And it is as impossible to restore them, to
revive by mere exhortation the complex of hopes and fears and ignorance
and patient credulity and passive acquiescence, which together made
men, fifty years ago, plastic instruments in the hands of
industrialism, as to restore innocence to any others of those who have
eaten of the tree of knowledge.
The ideal of some intelligent and respectable business men, the
restoration of the golden sixties, when workmen were docile and
confiding, and trade unions were still half illegal, and foreign
competition meant English competition in foreign countries, and prices
were rising a little and not rising too much, is the one Utopia which
can never be realized. The King may walk naked as long as his
courtiers protest that he is clad; but when a child or a fool has
broken the spell a tailor is more important than all their admiration.
If the public, which suffers from the slackening of economic activity,
{146} desires to end its _malaise_, it will not laud as admirable and
all-sufficient the operation of motives which are plainly ceasing to
move. It will seek to liberate new motives and to enlist them in its
service. It will endeavor to find an alternative to incentives which
were always degrading, to those who used them as much as to those upon
whom they were used, and which now are adequate incentives no longer.
And the alternative to the discipline which Capitalism exercised
through its instruments of unemployment and starvation is the
self-discipline of responsibility and professional pride.
So the demand which aims at stronger organization, fuller
responsibility, larger powers for the sake of the producer as a
condition of economic liberty, the demand for freedom, is not
antithetic to the demand for more effective work and increased output
which is being made in the interests of the consumer. It is
complementary to it, as the insistence by a body of professional men,
whether doctors or university teachers, on the maintenance of their
professional independence and dignity against attempts to cheapen the
service is not hostile to an efficient service, but, in the long run, a
condition of it. The course of wisdom for the consumer would be to
hasten, so far as he can, the transition. For, as at present
conducted, industry is working against the grain. It is compassing sea
and land in its efforts to overcome, by ingenious financial and
technical expedients, obstacles which should never have existed. It is
trying to produce its results by conquering professional feeling
instead of using it. It is carrying not only its inevitable economic
burdens, but an ever increasing {147} load of ill will and skepticism.
It has in fact "shot the bird which caused the wind to blow" and goes
about its business with the corpse round its neck. Compared with that
psychological incubus, the technical deficiencies of industry, serious
though they often are, are a bagatelle, and the business men who preach
the gospel of production without offering any plan for dealing with
what is now the central fact in the economic situation, resemble a
Christian apologist who should avoid disturbing the equanimity of his
audience by carefully omitting all reference either to the fall of man
or the scheme of salvation. If it is desired to increase the output of
wealth, it is not a paradox, but the statement of an elementary
economic truism to say that active and constructive co-operation on the
part of the rank and file of workers would do more to contribute to
that result than the discovery of a new coal-field or a generation of
scientific invention.
The first condition of enlisting on the side of constructive work the
professional feeling which is now apathetic, or even hostile to it, is
to secure that when it is given its results accrue to the public, not
to the owner of property in capital, in land, or in other resources.
For this reason the attenuation of the rights at present involved in
the private ownership of industrial capital, or their complete
abolition, is not the demand of idealogues, but an indispensable
element in a policy of economic efficiency, since it is the condition
of the most effective functioning of the human beings upon whom,
though, like other truisms, it is often forgotten, {148} economic
efficiency ultimately depends. But it is only one element.
Co-operation may range from mere acquiescence to a vigilant and zealous
initiative. The criterion of an effective system of administration is
that it should succeed in enlisting in the conduct of industry the
latent forces of professional pride to which the present industrial
order makes little appeal, and which, indeed, Capitalism, in its war
upon trade union organization, endeavored for many years to stamp out
altogether.
Nor does the efficacy of such an appeal repose upon the assumption of
that "change in human nature," which is the triumphant _reductio ad
absurdum_ advanced by those who are least satisfied with the working of
human nature as it is. What it does involve is that certain elementary
facts should be taken into account, instead of, as at present, being
ignored. That all work is distasteful and that "every man desires to
secure the largest income with the least effort" may be as axiomatic as
it is assumed to be. But in practice it makes all the difference to
the attitude of the individual whether the collective sentiment of the
group to which he belongs is on the side of effort or against it, and
what standard of effort it sets. That, as employers complain, the
public opinion of considerable groups of workers is against an
intensification of effort as long as part of its result is increased
dividends for shareholders, is no doubt, as far as mere efficiency is
concerned, the gravest indictment of the existing industrial order.
But, even when public ownership has taken the place of private
capitalism, its ability to command {149} effective service will depend
ultimately upon its success in securing not merely that professional
feeling is no longer an opposing force, but that it is actively
enlisted upon the side of maintaining the highest possible standard of
efficiency which can reasonably be demanded.
To put the matter concretely, while the existing ownership of mines is
a positive inducement to inefficient work, public ownership
administered by a bureaucracy, if it would remove the technical
deficiencies emphasized by Sir Richard Redmayne as inseparable from the
separate administration of 3,000 pits by 1,500 different companies,
would be only too likely to miss a capital advantage which a different
type of administration would secure. It would lose both the assistance
to be derived from the technical knowledge of practical men who know by
daily experience the points at which the details of administration can
be improved, and the stimulus to efficiency springing from the
corporate pride of a profession which is responsible for maintaining
and improving the character of its service. Professional spirit is a
force like gravitation, which in itself is neither good nor bad, but
which the engineer uses, when he can, to do his work for him. If it is
foolish to idealize it, it is equally shortsighted to neglect it. In
what are described _par excellence_ as "the services" it has always
been recognized that _esprit de corps_ is the foundation of efficiency,
and all means, some wise and some mischievous, are used to encourage
it: in practice, indeed, the power upon which the country relied as its
main safeguard in an emergency was the professional zeal of the navy
and nothing else. Nor is {150} that spirit peculiar to the professions
which are concerned with war. It is a matter of common training,
common responsibilities, and common dangers. In all cases where
difficult and disagreeable work is to be done, the force which elicits
it is normally not merely money, but the public opinion and tradition
of the little society in which the individual moves, and in the esteem
of which he finds that which men value in success.
To ignore that most powerful of stimuli as it is ignored to-day, and
then to lament that the efforts which it produces are not forthcoming,
is the climax of perversity. To aim at eliminating from industry the
growth and action of corporate feeling, for fear lest an organized body
of producers should exploit the public, is a plausible policy. But it
is short-sighted. It is "to pour away the baby with the bath," and to
lower the quality of the service in an attempt to safeguard it. A wise
system of administration would recognize that professional solidarity
can do much of its work for it more effectively than it can do it
itself, because the spirit of his profession is part of the individual
and not a force outside him, and would make it its object to enlist
that temper in the public service. It is only by that policy, indeed,
that the elaboration of cumbrous regulations to prevent men doing what
they should not, with the incidental result of sometimes preventing
them from doing what they should--it is only by that policy that what
is mechanical and obstructive in bureaucracy can be averted. For
industry cannot run without laws. It must either control itself by
professional standards, or it must be controlled by officials who are
not of the {151} craft and who, however zealous and well-meaning, can
hardly have the feel of it in their fingers. Public control and
criticism are indispensable. But they should not be too detailed, or
they defeat themselves. It would be better that, once fair standards
have been established, the professional organization should check
offenses against prices and quality than that it should be necessary
for the State to do so. The alternative to minute external supervision
is supervision from within by men who become imbued with the public
obligations of their trade in the very process of learning it. It is,
in short, professional in industry.
For this reason collectivism by itself is too simple a solution. Its
failure is likely to be that of other rationalist systems.
"Dann hat er die Theile in seiner Hand,
Fehlt leider! nur das geistige Band."
If industrial reorganization is to be a living reality, and not merely
a plan upon paper, its aim must be to secure not only that industry is
carried on for the service of the public, but that it shall be carried
on with the active co-operation of the organizations of producers. But
co-operation involves responsibility, and responsibility involves
power. It is idle to expect that men will give their best to any
system which they do not trust, or that they will trust any system in
the control of which they do not share. Their ability to carry
professional obligations depends upon the power which they possess to
remove the obstacles which prevent those obligations from being
discharged, and upon their willingness, when they possess the power, to
use it.
{152}
Two causes appear to have hampered the committees which were
established in connection with coal mines during the war to increase
the output of coal. One was the reluctance of some of them to
discharge the invidious task of imposing penalties for absenteeism on
their fellow-workmen. The other was the exclusion of faults of
management from the control of many committees. In some cases all went
well till they demanded that, if the miners were penalized for
absenteeism which was due to them, the management should be penalized
similarly when men who desired to work were sent home because, as a
result of defective organization, there was no work for them to do.
Their demand was resisted as "interference with the management," and
the attempt to enforce regularity of attendance broke down. Nor, to
take another example from the same industry, is it to be expected that
the weight of the miners' organization will be thrown on to the side of
greater production, if it has no power to insist on the removal of the
defects of equipment and organization, the shortage of trams, rails,
tubs and timber, the "creaming" of the pits by the working of easily
got coal to their future detriment, their wasteful layout caused by the
vagaries of separate ownership, by which at present the output is
reduced.