The financial aspect of the change is not, however, the only point

which a group of managers or technicians have to consider. They have

also to weigh its effect on their professional status. Will they have

as much freedom, initiative and authority in the service of the

community as under private ownership? How that question is answered

depends upon the form given to the administrative system through which

a public service is {168} conducted. It is possible to conceive an

arrangement under which the life of a mine-manager would be made a

burden to him by perpetual recalcitrance on the part of the men at the

pit for which he is responsible. It is possible to conceive one under

which he would be hampered to the point of paralysis by irritating

interference from a bureaucracy at headquarters. In the past some

managers of "co-operative workshops" suffered, it would seem, from the

former: many officers of Employment Exchanges are the victims, unless

common rumor is misleading, of the latter. It is quite legitimate,

indeed it is indispensable, that these dangers should be emphasized.

The problem of reorganizing industry is, as has been said above, a

problem of constitution making. It is likely to be handled

successfully only if the defects to which different types of

constitutional machinery are likely to be liable are pointed out in

advance. Once, however, these dangers are realized, to devise

precautions against them appears to be a comparatively simple matter.

If Mr. Justice Sankey's proposals be taken as a concrete example of the

position which would be occupied by the managers in a nationalized

industry, it will be seen that they do not involve either of the two

dangers which are pointed out above. The manager will, it is true,

work with a Local Mining Council or pit committee, which is to "meet

fortnightly, or oftener if need be, to advise the manager on all

questions concerning the direction and safety of the mine," and "if the

manager refuses to take the advice of the Local Mining Council on any

question concerning the safety and health of the mine, such question

shall be referred to {169} the District Mining Council." It is true

also that, once such a Local Mining Council is formally established,

the manager will find it necessary to win its confidence, to lead by

persuasion, not by mere driving, to establish, in short, the same

relationships of comradeship and good will as ought to exist between

the colleagues in any common undertaking. But in all this there is

nothing to undermine his authority, unless "authority" be understood to

mean an arbitrary power which no man is fit to exercise, and which few

men, in their sober moments, would claim. The manager will be

appointed by, and responsible to, not the men whose work he supervises,

but the District Mining Council, which controls all the pits in a

district, and on that council he will be represented. Nor will he be

at the mercy of a distant "clerkocracy," overwhelming him with

circulars and overriding his expert knowledge with impracticable

mandates devised in London. The very kernel of the schemes advanced

both by Justice Sankey and by the Miners' Federation is decentralized

administration within the framework of a national system. There is no

question of "managing the industry from Whitehall." The

characteristics of different coal-fields vary so widely that reliance

on local knowledge and experience are essential, and it is to local

knowledge and experience that it is proposed to intrust the

administration of the industry. The constitution which is recommended

is, in short, not "Unitary" but "Federal." There will be a division of

functions and power between central authorities and district

authorities. The former will lay down general rules as to those

matters which must necessarily {170} be dealt with on a national basis.

The latter will administer the industry within their own districts,

and, as long as they comply with those rules and provide their quota of

coal, will possess local autonomy and will follow the method of working

the pits which they think best suited to local conditions.

Thus interpreted, public ownership does not appear to confront the

brain worker with the danger of unintelligent interference with his

special technique, of which he is, quite naturally, apprehensive. It

offers him, indeed, far larger opportunities of professional

development than are open to all but a favored few to-day, when the

considerations of productive efficiency, which it is his special

_metier_ to promote, are liable to be overridden by short-sighted

financial interests operating through the pressure of a Board of

Directors who desire to show an immediate profit to their shareholders,

and who, to obtain it, will "cream" the pit, or work it in a way other

than considerations of technical efficiency would dictate. And the

interest of the community in securing that the manager's professional

skill is liberated for the service of the public, is as great as his

own. For the economic developments of the last thirty years have made

the managerial and technical _personnel_ of industry the repositories

of public responsibilities of quite incalculable importance, which,

with the best will in the world, they can hardly at present discharge.

The most salient characteristic of modern industrial organization is

that production is carried on under the general direction of business

men, who do not themselves necessarily know anything of productive

processes. "Business" {171} and "industry" tend to an increasing

extent to form two compartments, which, though united within the same

economic system, employ different types of _personnel_, evoke different

qualities and recognize different standards of efficiency and

workmanship. The technical and managerial staff of industry is, of

course, as amenable as other men to economic incentives. But their

special work is production, not finance; and, provided they are not

smarting under a sense of economic injustice, they want, like most

workmen, to "see the job done properly." The business men who

ultimately control industry are concerned with the promotion and

capitalization of companies, with competitive selling and the

advertisement of wares, the control of markets, the securing of special

advantages, and the arrangement of pools, combines and monopolies.

They are preoccupied, in fact, with financial results, and are

interested in the actual making of goods only in so far as financial

results accrue from it.

The change in organization which has, to a considerable degree,

specialized the spheres of business and management is comparable in its

importance to that which separated business and labor a century and a

half ago. It is specially momentous for the consumer. As long as the

functions of manager, technician and capitalist were combined, as in

the classical era of the factory system, in the single person of "the

employer," it was not unreasonable to assume that profits and

productive efficiency ran similarly together. In such circumstances

the ingenuity with which economists proved {172} that, in obedience to

"the law of substitution," he would choose the most economical process,

machine, or type of organization, wore a certain plausibility. True,

the employer might, even so, adulterate his goods or exploit the labor

of a helpless class of workers. But as long as the person directing

industry was himself primarily a manager, he could hardly have the

training, ability or time, even if he had the inclination, to

concentrate special attention on financial gains unconnected with, or

opposed to, progress in the arts of production, and there was some

justification for the conventional picture which represented "the

manufacturer" as the guardian of the interests of the consumer. With

the drawing apart of the financial and technical departments of

industry--with the separation of "business" from "production"--the link

which bound profits to productive efficiency is tending to be snapped.

There are more ways than formerly of securing the former without

achieving the latter; and when it is pleaded that the interests of the

captain of industry stimulate the adoption of the most "economical"

methods and thus secure industrial progress, it is necessary to ask

"economical for whom"? Though the organization of industry which is

most efficient, in the sense of offering the consumer the best service

at the lowest real cost, may be that which is most profitable to the

firm, it is also true that profits are constantly made in ways which

have nothing to do with efficient production, and which sometimes,

indeed, impede it.

The manner in which "business" may find that the methods which pay

itself best are those which a truly {173} scientific "management" would

condemn may be illustrated by three examples. In the first place, the

whole mass of profits which are obtained by the adroit capitalization

of a new business, or the reconstruction of one which already exists,

have hardly any connection with production at all. When, for instance,

a Lancashire cotton mill capitalized at L100,000 is bought by a London

syndicate which re-floats it with a capital of L500,000--not at all an

extravagant case--what exactly has happened? In many cases the

equipment of the mill for production remains, after the process, what

it was before it. It is, however, valued at a different figure,

because it is anticipated that the product of the mill will sell at a

price which will pay a reasonable profit not only upon the lower, but

upon the higher, capitalization. If the apparent state of the market

and prospects of the industry are such that the public can be induced

to believe this, the promoters of the reconstruction find it worth

while to recapitalize the mill on the new basis. They make their

profit not as manufacturers, but as financiers. They do not in any way

add to the productive efficiency of the firm, but they acquire shares

which will entitle them to an increased return. Normally, if the

market is favorable, they part with the greater number of them as soon

as they are acquired. But, whether they do so or not, what has

occurred is a process by which the business element in industry obtains

the right to a larger share of the product, without in any way

increasing the efficiency of the service which is offered to the

consumer.

Other examples of the manner in which the control of {174} production

by "business" cuts across the line of economic progress are the wastes

of competitive industry and the profits of monopoly. It is well known

that the price paid by the consumer includes marketing costs, which to

a varying, but to a large, extent are expenses not of supplying the

goods, but of supplying them under conditions involving the expenses of

advertisement and competitive distribution. For the individual firm

such expenses, which enable it to absorb part of a rival's trade, may

be an economy: to the consumer of milk or coal--to take two flagrant

instances--they are pure loss. Nor, as is sometimes assumed, are such

wastes confined to distribution. Technical reasons are stated by

railway managers to make desirable a unification of railway

administration and by mining experts of mines. But, up to the war,

business considerations maintained the expensive system under which

each railway company was operated as a separate system, and still

prevent collieries, even collieries in the same district, from being

administered as parts of a single organization. Pits are drowned out

by water, because companies cannot agree to apportion between them the

costs of a common drainage system; materials are bought, and products

sold, separately, because collieries will not combine; small coal is

left in to the amount of millions of tons because the most economical

and technically efficient working of the seams is not necessarily that

which yields the largest profit to the business men who control

production. In this instance the wide differences in economic strength

which exist between different mines discourage the unification which is

economically desirable; naturally the {175} directors of a company

which owns "a good thing" do not desire to merge interests with a

company working coal that is poor in quality or expensive to mine.

When, as increasingly happens in other industries, competitive wastes,

or some of them, are eliminated by combination, there is a genuine

advance in technical efficiency, which must be set to the credit of

business motives. In that event, however, the divergence between

business interests and those of the consumers is merely pushed one

stage further forward; it arises, of course, over the question of

prices. If any one is disposed to think that this picture of the

economic waste which accompanies the domination of production by

business interests is overdrawn, he may be invited to consider the

criticisms upon the system passed by the "efficiency engineers," who

are increasingly being called upon to advise as to industrial

organization and equipment. "The higher officers of the corporation,"

writes Mr. H. L. Gantt of a Public Utility Company established in

America during the war, "have all without exception been men of the

'business' type of mind, who have made their success through

financiering, buying, selling, etc.... As a matter of fact it is well

known that our industrial system has not measured up as we had

expected.... _The reason for its falling short is undoubtedly that the

men directing it had been trained in a business system operated for

profits, and did not understand one operated solely for production_.

This is no criticism of the men as individuals; they simply did not

know the job, and, what is worse, they did not know that they did not

know it."

{176}

In so far, then, as "Business" and "Management" are separated, the

latter being employed under the direction of the former, it cannot be

assumed that the direction of industry is in the hands of persons whose

primary concern is productive efficiency. That a considerable degree

of efficiency will result incidentally from the pursuit of business

profits is not, of course, denied. What seems to be true, however, is

that the main interest of those directing an industry which has reached

this stage of development is given to financial strategy and the

control of markets, because the gains which these activities offer are

normally so much larger than those accruing from the mere improvement

of the processes of production. It is evident, however, that it is

precisely that improvement which is the main interest of the consumer.

He may tolerate large profits as long as they are thought to be the

symbol of efficient production. But what he is concerned with is the

supply of goods, not the value of shares, and when profits appear to be

made, not by efficient production, but by skilful financiering or

shrewd commercial tactics, they no longer appear meritorious. If, in

disgust at what he has learned to call "profiteering," the consumer

seeks an alternative to a system under which product is controlled by

"Business," he can hardly find it except by making an ally of the

managerial and technical _personnel_ of industry. They organize the

service which he requires; they are relatively little implicated,

either by material interest or by psychological bias, in the financial

methods which he distrusts; they often find the control of their

professions by business men who are {177} primarily financiers

irritating in the obstruction which it offers to technical efficiency,

as well as sharp and close-fisted in the treatment of salaries. Both

on public and professional grounds they belong to a group which ought

to take the initiative in promoting a partnership between the producers

and the public. They can offer the community the scientific knowledge

and specialized ability which is the most important condition of

progress in the arts of production. It can offer them a more secure

and dignified status, larger opportunities for the exercise of their

special talents, and the consciousness that they are giving the best of

their work and their lives, not to enriching a handful of uninspiring,

if innocuous, shareholders, but to the service of the great body of

their fellow-countrymen. If the last advantage be dismissed as a

phrase--if medical officers of health, directors of education,

directors of the co-operative wholesale be assumed to be quite

uninfluenced by any consciousness of social service--the first two, at

any rate, remain. And they are considerable.

It is this gradual disengagement of managerial technique from financial

interests which would appear the probable line along which "the

employer" of the future will develop. The substitution throughout

industry of fixed salaries for fluctuating profits would, in itself,

deprive his position of half the humiliating atmosphere of predatory

enterprise which embarrasses to-day any man of honor who finds himself,

when he has been paid for his services, in possession of a surplus for

which there is no assignable reason. Nor, once large incomes from

profits have been extinguished, need his salary be large, {178} as

incomes are reckoned to-day. It is said that among the barbarians,

where wealth is still measured by cattle, great chiefs are described as

hundred-cow men. The manager of a great enterprise who is paid

$400,000 a year, might similarly be described as a hundred-family man,

since he receives the income of a hundred families. It is true that

special talent is worth any price, and that a payment of $400,000 a

year to the head of a business with a turnover of millions is

economically a bagatelle. But economic considerations are not the only

considerations. There is also "the point of honor." And the truth is

that these hundred-family salaries are ungentlemanly.

When really important issues are at stake every one realizes that no

decent man can stand out for his price. A general does not haggle with

his government for the precise pecuniary equivalent of his contribution

to victory. A sentry who gives the alarm to a sleeping battalion does

not spend next day collecting the capital value of the lives he has

saved; he is paid 1/- a day and is lucky if he gets it. The commander

of a ship does not cram himself and his belongings into the boats and

leave the crew to scramble out of the wreck as best they can; by the

tradition of the service he is the last man to leave. There is no

reason why the public should insult manufacturers and men of business

by treating them as though they were more thick-skinned than generals

and more extravagant than privates. To say that they are worth a good

deal more than even the exorbitant salaries which a few of them get is

often true. But it is beside the point. No one has any business to

{179} expect to be paid "what he is worth," for what he is worth is a

matter between his own soul and God. What he has a right to demand,

and what it concerns his fellow-men to see that he gets, is enough to

enable him to perform his work. When industry is organized on a basis

of function, that, and no more than that, is what he will be paid. To

do the managers of industry justice, this whining for more money is a

vice to which they (as distinct from their shareholders) are not

particularly prone. There is no reason why they should be. If a man

has important work, and enough leisure and income to enable him to do

it properly, he is in possession of as much happiness as is good for

any of the children of Adam.

[1] The Coal Mines Department supplied the following figures to the

Coal Industry Commission (Vol. III, App. 66). They relate to 57 per

cent. of the collieries of the United Kingdom.

Salary, including bonus and Number of Managers

value of house and coal 1913 1919

L100 or less ............................... 4 2

L101 to L200 ............................... 134 3

L201 to L300 ............................... 280 29

L301 to L400 ............................... 161 251

L401 to L500 ............................... 321 213

L501 to L600 ............................... 57 146

L601 and over .............................. 50 152

{180}

XI

PORRO UNUM NECESSARIUM

So the organization of society on the basis of function, instead of on

that of rights, implies three things. It means, first, that

proprietary rights shall be maintained when they are accompanied by the

performance of service and abolished when they are not. It means,

second, that the producers shall stand in a direct relation to the

community for whom production is carried on, so that their

responsibility to it may be obvious and unmistakable, not lost, as at

present, through their immediate subordination to shareholders whose

interest is not service but gain. It means, in the third place, that

the obligation for the maintenance of the service shall rest upon the

professional organization of those who perform it, and that, subject to

the supervision and criticism of the consumer, those organizations

shall exercise so much voice in the government of industry as may be

needed to secure that the obligation is discharged. It is obvious,

indeed, that no change of system or machinery can avert those causes of

social _malaise_ which consist in the egotism, greed, or

quarrelsomeness of human nature. What it can do is to create an

environment in which those are not the qualities which are encouraged.

It cannot secure that men live up to their principles. What it can do

is to establish their social order upon principles to which, if they

please, they can {181} live up and not live down. It cannot control

their actions. It can offer them an end on which to fix their minds.

And, as their minds are, so, in the long run and with exceptions, their

practical activity will be.

The first condition of the right organization of industry is, then, the

intellectual conversion which, in their distrust of principles,

Englishmen are disposed to place last or to omit altogether. It is

that emphasis should be transferred from the opportunities which it

offers individuals to the social functions which it performs; that they

should be clear as to its end and should judge it by reference to that

end, not by incidental consequences which are foreign to it, however

brilliant or alluring those consequences may be. What gives its

meaning to any activity which is not purely automatic is its purpose.

It is because the purpose of industry, which is the conquest of nature

for the service of man, is neither adequately expressed in its

organization nor present to the minds of those engaged in it, because

it is not regarded as a function but as an opportunity for personal

gain or advancement or display, that the economic life of modern

societies is in a perpetual state of morbid irritation. If the

conditions which produce that unnatural tension are to be removed, it

can only be effected by the growth of a habit of mind which will

approach questions of economic organization from the standpoint of the

purpose which it exists to serve, and which will apply to it something

of the spirit expressed by Bacon when he said that the work of man

ought to be carried on "for the glory of God and the relief of men's

estate."

{182}

Viewed from that angle issues which are insoluble when treated on the

basis of rights may be found more susceptible of reasonable treatment.

For a purpose, is, in the first place a principle of limitation. It

determines the end for which, and therefore the limits within which, an

activity is to be carried on. It divided what is worth doing from what

is not, and settles the scale upon which what is worth doing ought to

be done. It is in the second place, a principle of unity, because it

supplies a common end to which efforts can be directed, and submits

interests, which would otherwise conflict, to the judgment of an

over-ruling object. It is, in the third place, a principle of

apportionment or distribution. It assigns to the different parties of

groups engaged in a common undertaking the place which they are to

occupy in carrying it out. Thus it establishes order, not upon chance

or power, but upon a principle, and bases remuneration not upon what

men can with good fortune snatch for themselves nor upon what, if

unlucky, they can be induced to accept, but upon what is appropriate to

their function, no more and no less, so that those who perform no

function receive no payment, and those who contribute to the common end

receive honourable payment for honourable service.

Frate, la nostra volonta quieta

Virtu di carita, che fa volerne

Sol quel ch'avemo, e d'altro non ci asseta.

Si disiassimo esse piu superne,

Foran discordi li nostri disiri

Dal voler di colui che qui ne cerne.

* * * * *

{183}

Anzi e formale ad esto beato esse

Tenersi dentro alla divina vogli,

Per ch'una fansi nostre vogli e stesse.

* * * * *

Chiaro mi fu allor com' ogni dove

In Cielo e paradiso, e si la grazia

Del sommo ben d'un modo non vi piove.

The Acquisitive Society · 第 11 / 12 段