THE HUMAN RELATIONSHIPS TO BE RECTIFIED IN INDUSTRY
Capital and the Administrative Staff—Capital and the Manual
Workers—The Manual Workers _inter se_—The Administrative
Staff and the Manual Workers—Industry and the Consuming
Community—Industry and the Nation.
Before we can construct any scheme of reform of our industrial system we
must have a clear idea of what is industry. In the prosaic language of
economics it is a purposive production of commodities and services, the
immediate object of those engaged in it being to provide, through the
result of their work, the material means of satisfying their wants and
desires.
Viewed in broad outline, industry will be seen to involve three
fundamental processes:
(i) The combination in due proportion of the five things requisite for
all production, viz., capital, enterprise, organization, labour—both hand
and brain—and natural forces and resources.
(ii) The realisation of the product—industrial work is nowadays useless
unless and until the product is marketed. The amount realized depends
mainly on the public demand for the product, and invariably the cheaper
the selling price, the greater is the demand.
(iii) The division of the realized surplus amongst those associated in
production.
Further, it will also be observed that industry necessarily involves six
fundamental human relationships, the importance of which has been much
neglected in the past.
1. _The Industrial_, i.e. between the classes of persons associated
together in industry:
(_a_) Capital and the Administrative Staff.
(_b_) Capital and the Manual Workers.
(_c_) The Administrative Staff and the Manual Workers.
(_d_) Manual Workers between themselves.
2. _The Social_—between industry and the community.
3. _The National_—between industry and the nation. These relationships
are of paramount importance. The individual is no longer the unit—in
things industrial, it is the group of those associated in production—in
things social, it is the community—in things national, the whole people.
Each small group is included in, and directly reacts on, a larger group.
Labour, in its _Official Policy for Reconstruction after the War_, truly
says: “We are members one of another. No man liveth to himself alone. If
any, even the humblest, is made to suffer, the whole community and every
one of us, whether or not we recognize the fact, is thereby injured.” How
frequently Labour forgets its own irrefutable proposition! The problem
then is so to organize the processes of industry and harmonize the human
relationships involved in it, that to the utmost practicable extent
productive efficiency will be secured, the human qualities of all those
associated in industry recognized, their capacities fully developed and
utilized, their aspirations satisfied, and their respective services
co-ordinated to promote the benefit and happiness of all of them, the
good of the community, and the welfare of the nation.
Capital and the Administrative Staff
Let us first examine the relationship between Capital and the
Administrative Staff. In the Administrative Staff, I include every one
from the managing director down to the gate-keeper. They are the brains
and mechanism of the organization and management, the connecting link
between Capital and Labour. The success of an employer’s business is
dependent on their tact, judgment, and power of governing men, but
Capital has not yet risen to that conception. It has not conceded to the
Administrative Staff a status commensurate with their enormous private
and public responsibilities, nor, except at the very top, adequate
financial recognition. The art of managing men so as to get the best out
of them and secure their cordial co-operation, is generally considered
by Capital to be a customary by-product of technical ability. In truth,
it is a special qualification requiring its own special training,
exceptional attributes of mind and temperament, and particular fibres of
character, of the possession of which technical ability is no criterion
whatsoever. If industry is to progress, Capital must elevate its
conception of the duties of the Administrative Staff and recognize that
administration, even in its lowest branches, is work as skilled as that
of an expert craftsman.
Capital and the Manual Workers
We must next scrutinize the basic industrial relationship between Capital
and the Manual Workers. Permeating it, we find, as the result of the
causes already mentioned, seething discontent and active antagonism—not
cordiality—not mutual confidence, but unreasoning distrust. We see on
both sides black suspicion twisting the motive behind every action, and
the task is to create contentment among the workers, and enlist their
hearty co-operation with employers in the process of production.
The Manual Workers _inter se_
The Manual Workers are far from being a happy family. In this country
all work in every industry is allocated by tradition or Trade Union
agreement to this trade or that trade as its sacrosanct preserve. Woe
betide an unskilled man who invades the industrial territory of a
tradesman! These rigid lines of demarcation of work are the cause of
untold industrial friction and operate most detrimentally to prevent an
employer introducing modern methods or installing time- and labour-saving
appliances. There is no greater need in industry than for a peace-treaty
between the warring Trade Unions under which this system of dividing work
into so many water-tight compartments will be modified.
The Administrative Staff and the Manual Workers
The Administrative Staff has not yet attained to a true conception
of their great part in industry. I often found that, so far as their
relationship to Labour is concerned, they are inclined to regard their
general functions as solely to maintain discipline. The preservation of
robust discipline is a vital matter. Too often discipline is bolstered
up by arbitrary and dictatorial methods, to which means weak men usually
have recourse. That, if not productive of immediate friction, certainly
sows broadcast the seeds of trouble and unrest. The vital matter,
the atmosphere of the shop, is mainly dependent on the conciliatory
personalities of the Administrative Staff. What has to be remembered in
industry is that despotism is not leadership, and arbitrariness is not
good government. “The moral effects of good leadership,” as Professor
McDougall truly says in _The Group Mind_, “work throughout a mass of men
by subtle processes of suggestion and emotional contagion rather than
by a process of purely intellectual appreciation.” This many employers
have yet to learn; they regard courtesy on the part of the Administrative
Staff in dealing with Labour as cowardice, and consideration as
subversive of good discipline. But consideration is the oil which makes
shop wheels go round, and there never was more scope for its application
in industry than at the present time, especially in such things as
interviewing, selecting and taking on, promoting and dismissing men, and
dealing with shop complaints.
Industry and the Consuming Community
Industry as a whole does not appreciate the close relationship between
itself and the community, nor its responsibilities to the community. In
reality industry has to rely on the community for innumerable services,
and for many facilities vital to its existence, and to its prosperity,
and for a market for its product. Yet almost invariably strikes and
lock-outs are called, regardless of the effect upon the consuming public.
In fact, Labour claims the right to use its economic power in furtherance
of its own interests, irrespective of the damage to the community. If,
under compelling necessity, the community attempts to carry on the
services for itself, or provide the commodities of which by organized
strikes it is deprived, it is charged with anti-social conduct, and
condemned for declaring a class-war against Labour, those who assist
being stigmatized as strike-breakers and black-legs. Labour has gone even
further in recent years. In a number of cases it has deliberately adopted
the policy of depriving the community of essential services through
strikes, in order to produce such social hardship as will drive the
community to constrain employers to accept Labour’s industrial demands.
There have also been recent instances of agreements between employers
and Trade Unions—as in the building industry—by which wages have been
forced up to unreasonably high rates simply because those industries
were necessary to the community and, with the knowledge that whatever
the resulting cost of the product might be, the community would have to
pay. At the same time, the community is largely dependent upon industry,
and if the whole of an industry, or each section of it, fulfils its
obligations to the community, the community must perform certain duties
in return. I speak more fully of these later.
Industry and the Nation
Industry will never progress to vigorous and healthy development unless
our conception of the relationship between industry and the nation is
radically revised. That conception to-day is mean, stunted, and utterly
devoid of any power of inspiration. Industry I have defined, in the
language of economics, as the production of commodities and services
for the purpose of satisfying the wants and desires of men. On this
commonplace process, which sounds so dull in definition, and on none
other, the future well-being of our country and the practicability
of further social improvements and reforms depend. Production ought,
therefore, to be regarded as the principal means of advancing the
happiness, social welfare and material prosperity of the nation, and
industry, the chief instrument in that beneficent work, as the highest
and the noblest form of national service.