THE RIGHT RELATIONSHIP BETWEEN EMPLOYERS AND EMPLOYED
2. CO-OPERATION IN INDUSTRY
The Workers’ Own Resort to Co-operation—The Marxian Argument
against Co-operation—Some Workshop Applications—The Marxian
Fallacy of the Origin of Capital—The Marxian Fallacy of
Value—The Need of Sympathy in Workshop Life—The Need of Strict
Justice—The Money Value of Sympathy in Industry—The Sympathetic
Handling of Labour a Special Art—An Illustration of its
Successful Application.
The establishment of co-operation in industry between employers and
employed is a matter almost entirely of the mind and spirit; it depends
upon the elimination of the mutual suspicion that at present exists;
it involves the creation of confidence; it entails the dissipation of
certain economic fallacies that obsess the workers and also unprogressive
employers.
The Workers’ Own Resort to Co-operation
Labour thoroughly well recognizes the productive power of the spirit of
co-operation. In certain trades men work in squads, and the members of
the squad share in agreed proportions the total price for the squad’s
collective work. Many shops are paid on the output bonus system or on
a “fellowship” basis. Under such conditions the earnings of the squad
or shop, within the limits fixed for normal output, depend on the full
co-operation of each member of the squad or shop. Co-operation is then
recognized as a moral duty. It is almost invariably afforded without
stint, if not it is sternly exacted. Many skilled men also paid on
output are assisted by semi-skilled or unskilled “helpers” paid a fixed
time wage, irrespective of output. Although the increased efforts of
the “helpers” result in increased earnings only for the skilled men, in
general co-operation is usually forthcoming from the “helpers,” and if
not it is unconditionally demanded. There is no difficulty in identifying
the doctrines to which the workers appeal in justification of their
present attitude of non-co-operation with employers—they all come from
Marxian Socialism. They are encountered everywhere in workshop, Trade
Union branch and district committee, and form the foundations of belief
amongst industrial democracy.
The Marxian Argument against Co-operation
Though it is not possible to crystallize the Marxian doctrines with
absolute precision of language into a few lines of print, they may be
stated in simple words, with tolerable accuracy, as follows:
“Production is the process of applying labour-force to raw
material, and the exchange or market value of the commodity
which is the product is created by the labour-force expended by
the labourer in working. That value, which solely results from
the labour so expended, is measured by the time occupied by the
labourer upon the production of the newly-created commodity in
question. The labourer is paid by his employer a wage which
represents the ‘exchange value’ of his ‘labour-force.’ But the
employer has obtained the ‘use-value’ of the labour-force,
and disposes of the newly-created product in the market at a
selling price which, after making allowance for the costs of
production before and after the application of labour-force,
is higher than the wage paid to the labourer. The excess is
‘surplus value.’ This surplus value in primitive industry is
appropriated wholly by the employer, but in industry more
highly developed is apportioned out among the different
classes of capitalists in the shape of ground rent, interest,
manufacturers’ profits, and commercial profit.”
In the doctrines of Marx there are three fundamental propositions: the
first, that money is the primary form of capital; the second, that the
value of a commodity is measured by the amount of labour expended upon
it; the third, that the capitalist buys the use-value of a day’s labour
in exchange for its market value, pocketing the surplus value, which is
the difference. As long as we allow these theories to remain victorious,
industry to-day is merely a process by which the capitalist constitutes
himself the conduit-pipe to the sale-room for the workman’s labour, and
as the latter passes through his hands filches for himself the “surplus
value.”
Some Workshop Applications
As I write I have beside me a mass of leaflets, pamphlets and writings,
which came into my possession during my recent industrial work, all
reeking with this pernicious Marxianism. Some extracts from the _Red
Catechism_, handed to me by way of argument in a shipyard, will give an
idea of the doctrines:
Who creates all wealth? The working-class.
Who are the workers? Men who work for wages and receive
only a portion of what they earn,
the other part going to keep the
idle classes.
Who creates all poverty? Our capitalistic society.
What is a wage-slave? A person who works for a wage, and
gives all he earns to a capitalist.
What proportion does a wage-slave On the average about a fourth.
receive of what he earns?
What is an exploiter? One who employs a man and makes him
produce three or four times the
amount he receives in wages.
How do capitalists become rich? By employing labour and exploiting it.
The question of merit does not No. It is only used as a hypocritical
enter into the reward of subterfuge to hide the robbery of
capital, then? labour.
These are only a few quotations, the list could be amplified enormously.
The Marxian Fallacy of the Origin of Capital
The Marxian proposition that money is the first form of capital is a
discordant and disruptive delusion. Marx declared that all capital was
derived from the profits obtained by paying labour less than the value
it created. On this hypothesis the capitalist assists in no way in the
business of production. He is in the position of reaping what he has not
sown. He is a bandit who holds up to ransom the whole world of workmen.
He lets labourers off with their lives, that is to say, with wages just
sufficient for their subsistence and the reproduction of their species,
thus securing the maintenance of a supply of labour, on condition that
the labourers hand over to him practically the entire value of their
labour. As long as such doctrines are taught to the young worker and are
accepted by the old, of what good is it to prate about co-operation? It
is about as sensible to advocate co-operation between a host and its
parasite, between a vampire and its prey, between a highway robber and
his victim. Yet that is the vain task on which so many eminent persons
are now wasting their eloquence.
The first essential is boldly and openly to challenge this Marxian
doctrine of the parasitic character of capital. There will never be,
there cannot be, co-operation between capital and Labour until Labour has
learned what capital is and the function it plays in production. Labour
is ready to learn. I have found it possible to sustain the interest of
workmen while explaining that capital consists primarily of things that
are not money, of goods upon which people subsist while producing other
goods, of factories, machinery, and raw material; that capital is a
definite agent in production, capable of application, not merely by the
conventional employer, but by every man; that it is something which,
when used in production, is consumed, so that he who adventures it must
possess such experience and judgment as will enable him to surmount the
risk of loss, and obtain a return sufficient to replace the capital
that has been consumed, and to recompense the lender for his thrift and
remunerate himself for the services he has rendered and the risk to
which he has been subjected. These particular aspects of capital, from
their very novelty and unexpectedness, catch the immediate attention
of Labour, so much so that in some districts the workmen, of their own
accord, arranged meetings and invited me specially to discuss with them
the character and function of capital in modern industry and the extent
to which Labour was dependent upon it.
But realities must be faced. There is no good in evading the fact that
while capital is essential and of incalculable benefit to humanity, it
can, at the same time, like any other human possession, be used so as to
cause inconvenience, injustice, distress, degradation, death. In short,
the use of capital may be socially beneficent, or it may be maleficent,
anti-social. The invariable example which the workman adduces of its
anti-social use is “profiteering” in many of its accustomed forms. It
is a great misfortune that there is no precise term in use to describe
the particular function of capital as an agent in production. Aristotle
distinguished on arbitrary principles which he enunciated, and derived
from the conditions of his time, between the natural beneficial use of
wealth, which he calls “economics,” and the unnatural abuse of wealth,
which he calls “chrematistics.” His principles are out of date, the
terminological distinction which he attempted was sound. This is what
happens always in industrial discussion: employers, thinking of the
beneficent function played by capital in production, emphasize the
dependence of Labour on capital—Labour, thinking of the anti-social uses
of capital, and reasoning from the particular to the general, retorts
that capital is the cause of all Labour’s troubles. If both employers
and workers could, by appropriate terms, get down to discussing the same
thing, there would be substantial prospect of agreement; to-day there is
none.
The Marxian Fallacy of Value
The next notion in the workman’s mind subversive of co-operation is his
idea, derived from Marx, that “the value of a commodity is the amount
of abstract human labour embodied in it.” If this be true, as so many
workmen now fervently believe, it follows that the employer contributes
nothing whatever to the value of the manufactured product, and that
the only value-producing agency is labour. In truth neither workman
nor employer creates value; both unite to perform services or produce
things which other circumstances, e.g. demand, cause to be of value, and
they do so because of that value. But the material point is that the
Marxian doctrine rules out co-operation. Logically, it implies that the
only possible remedy for the present lot of the worker consists in the
complete demolition of the present organization of industry. The worker
who accepts the Marxian theory of value, with its corollary theory of
surplus value, is a weak-kneed individual and a traitor to his brethren,
if he be cajoled for a moment into co-operating with his employer, or
if he hesitates to fight whole-heartedly for the eradication of the
employer, root and branch, from the industrial system.
The difficulty I have experienced in attacking this Marxian heresy is the
common one which confronts any opponent of a popular doctrine accepted on
faith and not on logic. A reasoned explanation of the fallacy is often
not understood, a striking refutation is regarded as an extreme instance
to which no reasonable person would ever suggest that the principle
applied. When I have put the classic case of a man who discovers a
precious stone, picks it up and finds it is worth, say, £50, and have
suggested that the labour-force exerted by the finder in reaching down
and lifting up the stone and carrying it to a purchaser cannot surely be
the sole cause of its value, the answer has at once been made: “That is a
case of raw material, and not a manufactured article.” I have then taken
the case of some manufactured article like “pigs” or “ingots.” These when
made were of a certain value, but they were put into store as against a
rising market and became, subsequently, of greater value. According to
Marx, the magnitude of the value of any commodity is determined by the
amount of the labour socially necessary for its production and embodied
in it under the normal conditions of production, and with the average
degree of skill and intensity prevalent at the time. This amount of
labour, in the case of the “pigs” and “ingots,” was the amount expended
when they were first made, but since then, without the expenditure of any
more labour, their value has greatly increased. The increase in value
cannot obviously be attributed to the addition of “abstract”or any other
kind of labour.
It is surprising how many workmen have learned quite glibly the outlines
of the Marxian value and surplus value argument, and can express it by
rote in flawless Marxian terminology. Even accepting it, as it has
been so truly described, as “the greatest intellectual mare’s nest of
the last century,” without any question it is an argument that has to
be seriously considered. It must be driven by economic education out
of the workers’ list of cherished convictions. No good will come of
treating it with flippancy, or pouring ridicule upon it. I made it my
practice to take up the argument stage by stage, emphasize what appeared
to me to be the flaws, and then finish off with a number of practical
workshop illustrations of cases where the argument fails egregiously
to hold water. To be convincing, and to drive each point well home,
takes a considerable amount of time, but it is well worth it. Few
persons appreciate the extent to which this Marxian sophistry prevents
achievement of the co-operative ideal in industry.
There is just one word of warning necessary. According to Marx, the
workman receives from the employer the exchange value of his labour-force
or power on handing over to the employer its use-value. Marx maintained,
and unfortunately in the past there has been much to add force to his
contention, that Labour in return received a wage no more than equal
to “bare subsistence” or “bare cost of production of labour-power.” In
many cases the past level of wages cannot be defended, and it would be
foolish to try and vindicate it. But this much can be said, real wages
have risen very considerably since Marx’s day, and without any overthrow
of the industrial system. Such a result is absolutely in contradiction of
his prophecy, and at variance with his doctrine. It strongly suggests the
wisdom of constructive evolution as opposed to destructive revolution.
The Need of Sympathy in Workshop Life
The power of these economic fallacies is enormously reinforced by the
injustice and want of sympathy that too often surrounds the industrial
relationship between employers and employed. That atmosphere is due to
old-fashioned employers holding fast to crude individualistic notions
of industry, to the idea that a workman is the animated machine—ἔμψυχον
ὄργανον—of the Greek philosophers—an “economic unit” without soul,
sensibility, ideals or aspirations, who still labour under the
discredited obsession that justice and sympathy are incompatible with
discipline and the firm handling of labour. Of course, justice and
sympathy can have no place in a creed where labour is merely one of a
number of troublesome items of the cost of production. Neither is shown,
neither is expected. That type of employer has never recognized that
capital, brains and manual labour fill separate and distinct rôles in
industry. He looks upon himself as the all-dominant personality and
Labour as his feudal and dependent hireling.
Now domination, or any attempt at, or suspicion of it, is quite
incompatible with co-operation; in fact, the least semblance of it in
industry will speedily kill any latent spirit of co-operation. Nor does
it matter in the slightest on what ground the domination is based or
asserted. It may be on intellectual superiority, technical experience,
organizing capacity, social standing, I care not what; it is the poison
of all industrial harmony. As soon as it appears there is straightway an
end of all co-operation in any democratic organization, and sectarianism
and strife mark the reaction that immediately ensues. Mutual agreement
is the essential basis of co-operation, both from the objective and
subjective points of view. To secure agreement there must be the spirit
to agree, and the existence of that spirit depends almost entirely on
the knowledge and belief that matters of industrial controversy will
be considered and adjusted on principles of justice and equity. My
experience of industry has left me convinced beyond all doubt on one
point—there is, deep down in the heart of the British workman, a sense of
justice and fair-play. Often it takes time and trouble to vitalize it,
to assist it in freeing itself from the tentacles of ignorance, Marxian
sophistry and revolutionary formulae which entangle it, as weeds do a
swimmer struggling to gain the surface, but in the end, if it gets a
chance, it will assuredly triumph.
The Need of Strict Justice
The unenlightened employer has not yet given it a chance. He does not
believe in its existence, nor in its efficacy as a moderating influence.
There are no conceivable circumstances, he will tell you, which Labour
will not unjustly use for its own aggrandisement, if an opportunity
coincides with power. That in the past has, unfortunately, been the
tradition on the part of reactionary employers no less than on the part
of Labour. In regard to either justification or excuse, no distinction
whatsoever can be drawn between the two. Propositions and proposals
founded on equity and reason can, with confidence, be submitted to the
workman’s sense of justice. In many instances during the war, I have
appealed to this sense of justice with signal success in shop matters
of peculiarly acute trade controversy. Even in regard to victimization
disputes, always formidable questions, productive often of almost
intractable controversy, that is to say, cases of dismissal, fine
or reducing, on grounds alleged by the men of the prominence of the
“victim” in furthering the interests of his Trade Union, or because of
alleged breaches of unwritten shop law, invented, it would be said, by
some vindictive foreman. When masters and men have failed to adjust the
difference—the former taking their stand on “their right to maintain
discipline,” the latter on their duty “to protect their Trade Union
interests”—I have invariably found it possible to settle the dispute by
getting down to principles of fair-play. If the workman who has been
“dealt with” was a shop steward, and was really using his employer’s time
for doing his Trade Union branch work when he might and ought to have
been doing his shop work, the men have accepted the position that, after
notice, the employer is entitled to take exception to that procedure.
On the other hand, if he has only been utilizing for Union business the
many periods of time which occur in the best organized shops when he is
“waiting for work” or “standing by,” and has done it in such a way as not
to interfere with his shop work, then the men claim that he has only done
what he was entitled to do, and that an employer who objects to him doing
Union business under such circumstances is really out against the Union.
Most fair-minded people would probably draw the same inference.
The Money Value of Sympathy in Industry
There are to-day many employers, managers, under-managers, and foremen
who still act on the dogma that there is nothing to be got out of the
sympathetic handling of labour. “It’s so much cutting air,” more than one
has said to me. If an employer of this type honestly believed there was
money in it, he is far too keen a business man not to try it. But to many
employers Labour is still only a machine which, as long as it runs in any
sort of way, is to be left severely alone; when it jerks or sticks it is
to be lubricated with smooth words, professions of the employer’s anxiety
for its welfare, “soft sawder,” for which the men, naturally, have the
utmost contempt.
The Sympathetic Handling of Labour a Special Art
A very large number of employers have not realized yet that the
sympathetic management of labour is a special art, calling for peculiar
qualities of temperament and tact. Until that is accepted as sound
economics there can never be co-operation. Technical experience is
the usual qualification required of a foreman, seldom, if ever, is
the least regard paid to his ability to handle men sympathetically
so as to get the best out of them. Yet that, much more than technical
capacity, contributes to workshop efficiency. There are many persons
wholly unfitted by nature to have the charge of men, more especially to
perform the responsible duty of taking on and discharging them. Their
presence in a shop is a chronic source of irritation, and keeps the
men’s backs perpetually up. Co-operation, under such conditions, cannot
exist. An outsider entering the shop can feel the strained relationship
almost intuitively. A sort of nervous tension seems to pervade the
place. No cheery words are exchanged between men and manager, as the
latter passes through the shop. A notice is often found in the office:
“Workmen must wipe their feet before entering.” As a workman said to me:
“No such direction is given to anyone who comes to place an order,” How
much better to say to every one, “Please wipe your feet.” If a workman
wants to see some one in authority he is kept hanging about, losing his
piece-work earnings, or is brusquely told that the manager is engaged,
while all the time he sees customers admitted with welcome to the office.
One manager frankly told me that but for his clerk, who artfully got rid
of the workman always wanting to see him, he would never have had any
time to do his business. That indicates the attitude of mind that good
employers are fighting against. It is not considered by unprogressive
employers any part of the recognized duty of a manager to apply sympathy,
understanding, and tact to the treatment of Labour. There is no doubt
it requires very great time and patience and prolonged study and
investigation of numerous circumstances which are on the surface trivial.
A manager is often loath to devote to work of that kind time and energy
which he thinks, and which many employers certainly think, can more
profitably be spent in technical and commercial activity.
An Illustration of its Successful Application
But assuming that management will accept the teaching of the best
employers that the sympathetic handling of labour is an employer’s duty,
and, apart from that, is good business, the problem then will be how to
make and sustain such an appeal to the worker that he will be induced
to co-operate with the management. A similar problem confronted myself
during part of the war period when, as Director of Shipyard Labour, I
had charge of the labour in some 2,500 firms, employing something like
one million men. Output had to be secured and maintained at all costs,
so when any trouble occurred my Department had to intervene if the
management and men failed to come to a speedy settlement. When forming
the Department I gathered together a small band of enthusiastic and
far-sighted employers and Trade Unionists, and in conjunction we made a
determined and intensive effort to get right down _au fond_ and strike
the chords in industrial human nature, on whose vibration co-operation
is dependent. Some simple principles were formulated, which, later, as
experience grew, were modified in detail. These were made the basis
of the appeal, not merely in mass meetings, Trade Union lodges, and
elsewhere among the men, but also, with the assistance—and it was loyally
given—of the employers, carried into daily workshop practice. At the
time when these principles were first put into operation, there were
close on 200 strikes a week in the 2,500 firms. After a twelve-months’
regime the strikes which had fallen regularly, month by month, came
down to under ten a week. Some employers denied that the principles had
anything to do with the diminution of strikes. One of the most prominent
described them as “so much pap.” But the Trade Unions took a different
view, and I hold many personal letters from some of the principal Unions
attributing the whole of the improvement to the sympathetic regime that
had been put into operation—it was really nothing more than carrying
sympathy and strict justice into all the details of workshop life. Far
be it from me to suggest that any State department, without executive
responsibility, can run labour as well as a private employer who has
that responsibility; the point is that enormous improvement in the
co-operative spirit between employers and employed can be effected by the
adoption of a well-developed _methodized_ system of handling labour based
on sympathetic principles.
Co-operation is a vital essential for the reconstruction of industry.
It is the true antidote to revolution. It will only be forthcoming
in industry when sound economic conviction operates in an atmosphere
and environment of justice and sympathy. As long as economic fallacy
is allowed to permeate the minds of employers and employed, leading
them to reject or belittle the material advantages of co-operation by
representing it as inimical to their respective interests, and as long
as the want of sympathy and justice continues to feed that fallacy,
co-operation will never emerge as an integrating force in industry. The
remedy is, therefore, obvious.