CHAPTER XXIX_Labour policy—false and true

THE RIGHT RELATIONSHIP BETWEEN INDUSTRY AND THE COMMUNITY

The Formation of Sound Public Opinion—The Responsibility of the

Consumer—The Duty of the Citizen.

If too little consideration for the community has been exercised by

industry—and that is unquestionably proved in the foregoing chapters—the

community has scarcely realized its duties to the workers in industry.

The Formation of Sound Public Opinion

Industrial disputes in the long run must be decided by the force of

public opinion. In the past there has been far too great an inclination

on the part of the public to dissociate themselves from industrial

controversy as though it concerned them not. Apart from the direct

economic effect of any great strike upon the consuming public, the

community is under a definite moral obligation to try and reach a

right conclusion on the issue and to use the weight of its opinion to

secure a fair and equitable settlement. In the course of any strike of

importance immediate tribute is paid by both sides to the power of the

public. This is evidenced by the various statements of their respective

cases which emanate from each side. Labour is specially sensitive to the

control of public opinion, and is the first to realize the hopelessness

of protracting any strike against which public opinion is hardening.

Therefore, both in regard to ascertainment of facts and an intelligent

determination of the merits of each industrial controversy, the public is

laid under great obligations. It is one of labour’s chief complaints that

the average shareholder makes no effort whatever at general meetings of

his company to ascertain the facts in regard to strikes or lock-outs, or

to regulate his investments with some regard to his company’s treatment

of its workers. This complaint is justified.

The Responsibility of the Consumer

Every consumer has definite responsibilities. In the middle of last

century he was almost omnipotent, and industry’s chief object was to

meet, indeed to anticipate, his desires. His power to-day is not

so unrestricted by reason of the competition between consumers in

different nations for limited world supplies, and because of the better

organization of employers and employed. But still the consumer has

immense power, and in the interests of industry, society, and, indeed,

of the nation, he ought to realize his duties. The day has long gone

past when it was thought that all expenditure by a consumer, whether in

necessaries or luxuries, conduced alike to the benefit of trade and the

increase of the national wealth. It is now recognized that at all times

the supply of labour and raw material and capital—“the wealth heap,”

as Mr. Hartley Withers graphically describes it in his _Poverty and

Waste_—is limited. If, therefore, any consumer demands that more luxuries

be produced than necessaries, there must be fewer necessaries for those

who want them, and those at higher prices because we are expending on

luxuries capital and labour and raw materials otherwise available for the

production of necessaries. Even if at any time the supply of necessaries

exceeds the demand, that does not justify the production of luxuries.

If luxuries are demanded, capital and labour and raw materials must be

more or less permanently hypothecated for their production. If, on the

other hand, luxuries are dispensed with, then capital and labour will

be diverted to the production of necessaries, with consequent reduction

of prices and improvement in real wages of workers as the supply of

necessaries increases. As capital more or less automatically tends to

flow to whatever class of production affords the greatest remuneration,

it is really only the consumer who can control in what particular class

of production it is invested. A question will always remain: What is

unreasonable luxury? That is, of course, a question which each person

must answer for himself, but anything, as I view the matter, is a

reprehensible luxury when its production results in the consumption of

wealth or attraction of labour which is needed for more urgent national

purposes. If any consumer is in doubt, he can save instead of spend. He

can invest his savings in industry, or, if not, leave them on deposit

with his bank, which can do it for him. By this means new permanent

industries will be started, production of necessaries increased, wages

and purchasing power improved, and a definite service rendered to the

community by the establishment of undertakings which, if sound and

properly managed, will supply employment, and increase and circulate

wealth in a way the production of a luxury could not attempt to rival.

The consumer has a duty nowadays to think.

There is a much smaller supply of wealth than most persons realize,

which accentuates the duty of every person to use his income in the

manner most beneficial to the community. In his book _The Division of the

Product of Industry_, Professor Bowley shows (p. 47) that if we take the

tax-paying income for 1911 of residents in the United Kingdom derived

from home sources, viz. £742,000,000, and from it subtract (i) earned

incomes—giving no earner more than £160 per annum—(ii) farmers’ incomes,

and (iii) endowed charities, the balance left is only £550,000,000.

Subtracting from this latter figure the pre-war amounts required for

national saving and national expenses there remained only 200 to 250

millions “which on the extremist reckoning can have been spent out of

home-produced income by the rich or moderately well-off on anything

in the nature of luxury.” This sum would have been little more than

sufficient to bring the average wages of adult men and women up to a

minimum of 35_s._ 3_d._ weekly for a man and 20_s._ for a woman, which

Mr. Rowntree in _The Human Needs of Labour_ estimates as reasonable—with

prices as at July, 1914. Professor Bowley puts it in yet another way.

Before the war, there were about 10,000,000 households each containing

on an average about 4½ persons, of which nearly 2 in each household

were wage-earners. If the total home income had been divided equally

round, the average net income per family, after all rates and taxes were

paid and an adequate sum invested in home industries, would have been

nominally £153 from home income, which, if the balance of income brought

home from abroad and not re-invested abroad were also divided equally

round, would be increased to £162 per annum. The equal distribution of

income would, of course, have enormously increased prices. Professor

Bowley observes: “When it is realized that the whole income of the nation

was only sufficient for reasonable needs if equally divided, luxurious

expenditure is seen to be more unjustifiable even than has been commonly

supposed.”

The Brussels International Financial Conference said: “Above all, to fill

up the gap between the supply of, and the demand for, commodities, it is

the duty of every patriotic citizen to practise the strictest possible

economy, and so to contribute his maximum effort to the common weal. Such

private action is the indispensable basis for the fixed measures required

to restore public finances.”

The Duty of the Citizen

The principles of Labour policy which I have outlined are generally in

the direction of freedom and in its best sense individualism, looking

rather to the development in industry of co-operation than to struggle

and the use of power to settle differences and express the balance

of economic forces. But industrial freedom and individualism impose

correlative responsibilities on all citizens, especially in regard to the

maintenance of efficient social services. At first sight, any mention of

social services may appear a contradiction of the argument developed so

far. Social services to many minds are inevitably associated with relief

in the narrow sense of the word, conceived as a concession to the clamour

of Socialist theorists. In reality they are the growing expression of an

increased social sensitiveness. No State can be healthy which is based on

a foundation of hardship and suffering. Certain abuses must be removed,

and certain conditions remedied. In any advanced economic society the

State must take action, has taken action, and will in future extend its

action. The social conscience, to anyone who reads history, is a real

and growing force. But to be sound and effective it must of necessity be

based upon voluntary individual co-operation.

As things are to-day, we must recognize that State activity in social

services is in many branches ahead of the understanding of the ordinary

man. It has, through the nature of our political machinery, developed

in a specialized manner, which throws a heavy burden upon legislators

and administrators whether voluntary or official. There is a consequent

confusion, lack of co-ordination, and overlapping of effort which leads

to waste, not merely of money, but of what is, in the long run, more

important—human enthusiasm, effort and efficiency. In dealing with this

problem, the individual is of vital importance. The average citizen must

know more, take more interest, and render more service, if order and

economy are to take the place of confusion and waste. The necessity for

this individual interest is reinforced by the present financial situation.

We are, as a nation, recovering, in fact, becoming slowly convalescent,

from the effects of war-time and post-war inflation of money and credit.

We have realized that sound finance and the balancing of the Budget

are the necessary foundations of prosperity. Other European nations

are still enjoying the temporary delusive prosperity that can always

be obtained by inflation and dishonest finance. To carry the economic

argument one stage further, we must realize that the State can only carry

non-producers to the extent to which industry can obtain a surplus, after

providing for wages, interest, replacements, etc. The State cannot, by

any arrangement of taxation, loans or administrative activity, provide

an artificial standard of life, which is not earned by human individual

activity. There is, therefore, urgent need for education in finance, in

both its public and private aspects. Some of us are learning the lesson

by the bitter experience of high rates and taxes, others by the hardships

of unemployment. But out of this experience much good is coming. We

are learning the true and permanent bases of national prosperity. The

dangers of Great Britain to-day are not to be found in Red Revolution.

Democracy will fail, if it fails at all, from a lack of understanding of

economics and finance. Politicians without scruple or foresight may hold

out bribes of immediate material advantages, trusting to some juggling

of figures to enable them to redeem their promises. During the war, the

National Savings Committee, by a steady education in economics—converting

financial theories of currency, goods and services into the terms of men

and munitions—educated the general public into the social consequences

of spending and thrift. The control of national finances so established

under the patriotic stimulus and urgency of war is no less necessary in

peace.

The history of social legislation in the twentieth century is the

expression not merely of democratic pressure, but of the increased

social sensitiveness to the national conscience, awakened by individuals

of outstanding merit protesting that certain evils should no longer

exist. As the industrial revolution worked itself out, it was possible

to ascertain, by patient investigation, its weaknesses and evils, and

to provide certain remedies. Based on a steadily growing prosperity,

its record is worth reciting; a wide extension of education providing

in increasing degree an opportunity to the able men and women in all

ranks of society to develop their individuality; a general standard of

education which proved its value in increasing temperance, diminished

crime, and growing sense of public spirit, culminating in attention to

the physical condition of school-children, that in normal times would

have given every child a happy healthy childhood. In public health,

the elimination of the most dangerous infectious diseases, a steady

improvement of sanitary conditions, and an education in preventive

medicine, that can be proved by statistics to have been directly

remunerative. On the positive side, an extension of infant welfare work,

which, relying on the natural affection of mothers, and calling upon them

to develop their own individuality, has for a small expenditure reduced

the infant death rate by half. Health Insurance on a contributory basis

has lessened the sham of sickness in the wage-earner’s family, and as

the results of the quinquennial valuations of Approved Societies are

more widely known and understood, will overcome any remaining adverse

criticism. Old age pensions have removed the fear of an old age spent in

dependence on grudging relatives, or on the Poor Law, with its deterrent

associations. The treatment of unemployment has gained in efficiency and

thoroughness by the steady gaining of experience—the Labour Bureaux,

Unemployment Insurance, the use of State credits to finance international

trade and guarantee extensions of industry at home are laying foundations

of a new order—the irregular activities of voluntary organizations and

local authorities in emigration have developed into an Imperial Scheme

for Overseas Settlement. Under the existing conditions of financial

stringency, we have to consider how this burden can, in the future, be

borne. How much of the national income can, in the years immediately to

come, be devoted to services admittedly admirable in their objects? One

fact becomes clear: at all costs we must hold on to the main essentials

in the public services and keep the machinery in working order so that it

will be ready for expansion when financial conditions make it possible.

The fall in prices, resulting in a reduced cost of living, lower war

bonuses, lower cost of materials, is bringing, and will bring, even

further relief to the taxpayer and ratepayer. The adjustment, however,

lags behind the change in individual circumstances, and is the cause of

much criticism of those in authority. If, however, this policy of holding

on to essentials is to be carried out, there will have to be an increased

measure of economy—economy, not merely of money, but, in its original

Aristotelian sense, of management of a household. This can only be done

by attention to details, by a higher standard of public spirit, by which

the services in health, education, etc., are looked upon by those who

benefit as something for which they pay, and for which, in the long

run, they are responsible. If the desire for education were widespread,

there would be an immediate economy in school attendance officers, rota

committees, and all the machinery devised to block the holes in the

educational net. If the individual standard of care for health were

raised as it can be raised by such movements as health weeks, baby weeks,

etc., there would be a consequent reduction in the expenditure on Public

Health. But the largest measure of economy of the household management

type would come through a co-ordination of the activities of national

departments, local authorities and voluntary organizations. Attention

has recently been called to the advance of expenditure due to the system

of grants-in-aid to local authorities, by which local authorities are

led to spend money on the false assumption that the ratepayer will

gain something to be paid for by the taxpayer. The discrepancy between

the rating system and the tax-paying system is the root cause of many

difficulties, but a wider understanding of finance would obviate the

grosser evils.

Under our English system of government, all recent legislation has

been of specialized character dealing with specified classes, or a

particular evil. As each need was recognized, a special administration

was set up to deal with it, and we now have innumerable inquiry

officers, inspectors, officials of various grades administering Acts

of Parliament and regulations in varying ways. The whole relationship

of national departments and local authorities requires revision and

reorganization. Owing to the burden of rates on the ratepayer driving the

local authorities to rely more and more upon subsidies from the National

Exchequer, and to their refusing to undertake new burdens, social

services have been identified with departmental activity, red tape and

bureaucracy. Local government has suffered from a gradual atrophy.

Now, under pressure of financial stringency, is the time to overhaul

our social machinery. It needs the services of the best brains that the

country can produce. The problem has two aspects. First comes financial

policy. Owing to the complexity of administration, no local check can

exist on the total expenditure in any area. Inquiry is urgently needed,

on the lines of the national return known as the Drage return, setting

out for each local government area the sums paid by the local authority,

Health and Education, etc., the Poor Law, and the National Ministries of

Pensions, Labour, etc. At present the facts are not known, and, indeed,

are not available. Secondly, in administration, we need a co-ordination

of investigation and inquiry, and some measure of co-ordination in the

payment of relief; at the very least, a register of assistance by which

overlapping in payments and machinery could be avoided. The extent to

which either of these movements could be successful depends almost

entirely upon local interest. Any scheme set up by Government would

but add to the general confusion. Economy in this sense is a strict

inquiry and attention to detail, and is a service which can only be

rendered by those of business experience and ability. Finally would

come a reorganization of the Poor Law, not in any spirit of hostility

to those who have done such admirable work in spite of abuse and

misrepresentation, but a reorganization on to new areas coinciding with

the other areas of local government, and more nearly adjusted to the

present industrial conditions.

As a social policy, the insistence on economy will seem dull, but the

comment of the old lady about husbands that the good ones are dull

applies equally to social policy. The future development of social

services must depend upon the economic and financial future. No one under

present conditions can advocate fresh channels of expenditure, or the

widening of existing channels. This is not a confession of failure, or an

admission of social stagnation. We can no longer measure social reform by

the gradually increasing sums of money spent in particular specialized

services. We must, for a future as long as we can foresee, measure

social progress in the terms of the social service that the individual

is prepared to render. As a preparation we need two elements: (1) wider

economic education; (2) wider knowledge of social conditions, and the

provision for dealing with social evils. For the first the development

of the Savings Movement is a guide. Started in 1916, with the twofold

function of economic education and the provision of facilities for the

small investor, it has grown into a financial instrument of unlimited

possibilities.

In the six months ending March 31, 1922, £93,000,000 have been

invested in Savings Certificates, a sum which is more remarkable when

one considers the conditions in industry during this time. By a wise

foresight, arrangements have been made by which local authorities can

borrow from the Public Works Loans Commissioners 50 per cent. of the

money raised in the area of any local authority. In brief, this means

that £46,500,000 per annum of new capital is being saved, and made

available for works of public improvement if required, while another

£46,500,000 will be available for the repayment of ways and means

advances which will thus set free bank credits for the financing of

private trade. It is a steady regular funding of the floating debt by

money which is actually saved. As a measure of comparative magnitude of

millions it is well to point out that the total cost of Old Age Pensions

for the past financial year was £21,750,000, and the total cost of Poor

Law in the year ending March 31, 1920, was £28,500,000. This measure of

success has concealed to some extent the other function of the Committee,

viz. economic education. In the last analysis the problem of unemployment

becomes one of finance. So far as it can be alleviated by measures of

insurance or relief or emigration, taxation and rates will provide

the means, but beyond all compulsion, the individual has a measure of

responsibility. Wise spending, the avoidance of waste and extravagance,

will do more to restore the foundations of industry and credit than

any action by Government. Just as during the war it was possible to

divert goods and services from private ends to the main national need of

providing men and munitions necessary for victory, so to-day a conscious

control of individual expenditure, including a measure of personal thrift

and saving, will mean lower rates of interest, a larger amount of credit,

and a general improvement of trade and employment.

As regards the second element, viz. the wider knowledge of social

conditions, foundations are being laid by voluntary effort. In all the

big industrial areas a growing measure of interest is being taken in

social conditions. The pre-war voluntary associations are realizing

their inevitable connection with the Government Departments and local

authorities. Councils, representative of local authorities and voluntary

associations, have been formed, based, not on the Victorian ideal of the

Lady Bountiful, but on the juster, saner ideal of a common citizenship

owing service to the community. Practical steps are being taken to reduce

the chaos and overlapping in effort and money: in one place a survey

of local conditions; in another a handbook of information on the local

provision; in yet another a system of mutual registration of assistance

and relief, and finally, an investigation into the total sums spent out

of public funds in social services. Underlying it all is the personal

service rendered by social workers, as welfare workers, Guilds of Help,

prohibition officers, infant welfare workers, etc. Out of experience

has come the understanding that two types of co-operation are needed:

first, the co-operation of experts in co-ordinating questions of policy;

secondly, the co-operation of individual citizens in solving the problems

of the individual in trouble. From a wide experience of industrial

unrest there is a firm conviction that the hard cases, the unintentional

injustices, the administrative difficulties, summed up by the phrase “red

tape,” are a more fruitful source of trouble than the larger grievances.

This advocacy of personal service in many fields and in differing degrees

is not the vapouring of a social visionary, but is an expression of the

genius of our race. Every reform, every method of social advance, has

owed its existence to the enthusiasm of volunteers trying a new idea,

finding it work successfully, and then convincing others that it should

apply throughout the country. It is not muddling through, but the onward

march of individual freedom, which includes a freedom to combine and a

freedom to persuade and convince others that a new way is the right way.

The Teutonic method of social improvement by compulsion, not for its

own sake, but for military purposes, influenced English thought for a

generation. The result is seen in a development of the State far beyond

the capacity or desires of our people. The remedy is to be found, not

in a further treatment of homœopathic doses of the same medicine, but

by relying upon the natural, healthy development of the national spirit

through and in the individual.

The uncovenanted service that is needed from each member of the community

“is inspired service that is not measured in cash, about which there are

no overtime disputes, and in which time and a half or double time is

welcomed rather than objected to. And is not that the kind of service for

which the world is pining? Unless we can do away with the nicely balanced

give and take we shall not make progress in alleviating the sufferings of

humanity.” And there is an even broader vision. As against the extreme

Socialists who preach class-warfare, and try to sever class from class,

there is only one true antidote—some strong, compelling, active principle

that tends to bring together all classes, not for selfish ends, but

springing from an ever-present sense of the brotherhood of men.

FOOTNOTES

[1] This is only the number directly affiliated; there are in all 2,350

divisional and Local Labour Parties and Trades Councils.

[2] Reprinted, with additions, as _The Revolutionary Movement in Great

Britain_. Grant Richards, Ltd., 1921.

[3] A good exposition of this school of Socialism is to be found in

Professor J. A. Estey’s _Revolutionary Syndicalism_.

[4] Rt. Hon. J. R. Clynes; Messrs. J. A. Hobson, J. J. Mallon and Misses

Susan Lawrence and Mona Wilson.

[5] The shop stewards, normally, are persons elected by the men of each

craft in each department of an engineering shop to act individually, or

through a “convener” of all the shop stewards of the particular craft as

the connecting link between the men of that craft in the works and the

district delegate or district committee of the craft Trade Union.

[6] Messrs. Adamson and Gosling.

[7] Small Holdings and Allotments Acts, 1908 to 1919; The Acquisition of

Land (Assessment of Compensation) Act, 1919; Small Landholders (Scotland)

Acts, 1886 to 1919; Land Settlement (Scotland) Acts, 1919 and 1921; etc.

[8] See _Land Nationalization_, by Harold Cox, 2nd Ed., 1906. Methuen &

Co.

[9] A similar Bill was introduced in the Session of 1922.

[10] Joint Committee of Trades Union Congress, Labour Party, Co-operative

Unionists—Final Report, 1921—(Co-operative Society, Ltd.).