APPENDIX VIII
THE RELATIONSHIP OF TRADE UNIONISM TO THE GOVERNMENT OF INDUSTRY
In our work on Industrial Democracy, published in 1897, we formulated the following tentative conclusions with regard to the participation of the workmen’s organisations in industrial management, and the relation of Trade Unionism to political Democracy:
“This survey of the changes required in Trade Union policy leads us straight to a conclusion as to the part which Trade Unionism will be expected to play in the management of the industry of a democratic state. The interminable series of decisions, which together make up industrial administration, fall into three main classes. There is, first, the decision as to what shall be produced—that is to say, the exact commodity or service to be supplied to the consumers. There is, secondly, the judgement as to the manner in which the production shall take place, the adoption of material, the choice of processes, and the selection of human agents. Finally, there is the altogether different question of the conditions under which these human agents shall be employed—the temperature, atmosphere, and sanitary arrangements amid which they shall work, the intensity and duration of their toil, and the wages given as its reward.
“To obtain for the community the maximum satisfaction it is essential that the needs and desires of the consumers should be the main factor in determining the commodities and services to be produced. Whether these needs and desires can best be ascertained and satisfied by the private enterprise of capitalist profit-makers, keenly interested in securing custom, or by the public service of salaried officials, intent on pleasing associations of consumers (as in the British Co-operative Movement), or associations of citizens (the Municipality or the State), is at present the crucial problem of Democracy. But whichever way this issue may be decided, one thing is certain, namely, that the several sections of manual workers, enrolled in their Trade Unions, will have, under private enterprise or Collectivism, no more to do with the determination of what is to be produced than any other citizens or consumers. As manual workers and wage-earners, they bring to the problem no specialised knowledge; and as persons fitted for the performance of particular services, they are even biassed against the inevitable changes in demand which characterise progressive community. This is even more the case with regard to the second department of industrial administration—the adoption of material, the choice of processes, and the selection of human agents. Here, the Trade Unions concerned are specially disqualified, not only by their ignorance of the possible alternatives, but also by their overwhelming bias in favour of a particular material, a particular process, or a particular grade of workers, irrespective of whether these are or are not the best adapted for the gratification of the consumers’ desires. On the other hand, the directors of industry, whether thrown up by the competitive struggle or deliberately appointed by the consumers or citizens, have been specially picked out and trained to discover the best means of satisfying the consumers’ desires. Moreover, the bias of their self-interest coincides with the object of their customers or employers—that is to say, the best and cheapest production. Thus, if we leave out of account the disturbing influence of monopoly in private enterprise, and corruption in public administration, it would at first sight seem as if we might safely leave the organisation of production and distribution under the one system as under the other to the expert knowledge of the directors of industry. But this is subject to one all-important qualification. The permanent bias of the profitmaker, and even of the salaried official of the Co-operative Society, the Municipality, or the Government Department, is to lower the expense of production. So far as immediate results are concerned, it seems equally advantageous whether this reduction of cost is secured by a better choice of materials, processes, or men, or by some lowering of wages or other worsening of the conditions upon which the human agents are employed. But the democratic state is, as we have seen, vitally interested in upholding the highest possible Standard of Life of all its citizens, and especially of the manual workers who form four-fifths of the whole. Hence the bias of the directors of industry in favor of cheapness has, in the interests of the community, to be perpetually controlled and guided by a determination to maintain, and progressively to raise, the conditions of employment.
“This leads us to the third branch of industrial administration—the settlement of the conditions under which the human beings are to be employed. The adoption of one material rather than another, the choice between alternative processes or alternative ways of organising the factory, the selection of particular grades of workers, or even of a particular foreman, may affect, for the worse, the Standard of Life of the operatives concerned. This indirect influence on the conditions of employment passes imperceptibly into the direct determination of the wages, hours, and other terms of the wage contract. On all these matters the consumers, on the one hand, and the directors of industry on the other, are permanently disqualified from acting as arbiters. In our chapter on ‘The Higgling of the Market’ we described how, in the elaborate division of labour which characterises the modern industrial system, thousands of workers co-operate in the bringing to market of a single commodity; and no consumer, even if he desired it, could possibly ascertain or judge of the conditions of employment in all these varied trades. Thus, the consumers of all classes are not only biassed in favour of low prices; they are compelled to accept this apparent or genuine cheapness as the only practicable test of efficiency of production. And though the immediate employer of each section of workpeople knows the hours that they work and the wages that they receive, he is precluded by the stream of competitive pressure, transmitted through the retail shopkeeper and the wholesale trader, from effectively resisting the promptings of his own self-interest towards a constant cheapening of labour. Moreover, though he may be statistically aware of the conditions of employment his lack of personal experience of those conditions deprives him of any real knowledge of their effects. To the brain-working captain of industry, maintaining himself and his family on thousands a year, the manual-working wage-earner seems to belong to another species, having mental faculties and bodily needs altogether different from his own. Men and women of the upper or middle classes are totally unable to realise what state of body and mind, what level of character and conduct, result from a life spent, from childhood to old age, amid the dirt, the smell, the noise, the ugliness, and the vitiated atmosphere of the workshop; under constant subjection to the peremptory, or it may be brutal, orders of the foreman; kept continuously at the laborious manual toil for sixty or seventy hours in every week of the year; and maintained by the food, clothing, house-accommodation, recreation, and family life which are implied by a precarious income of between ten shillings and two pounds a week. If the democratic state is to attain its fullest and finest development, it is essential that the actual needs and desires of the human agents concerned should be the main considerations in determining the conditions of employment. Here then we find the special function of the Trade Union in the administration of industry. The simplest member of the working-class organisation knows at any rate where the shoe pinches. The Trade Union official is specially selected by his fellow-workmen for his capacity to express the grievances from which they suffer, and is trained by his calling in devising remedies for them. But in expressing the desires of their members, and in insisting on the necessary reforms, the Trade Unions act within the constant friction-brake supplied by the need of securing employment. It is always the consumers and the consumers alone, whether they act through profit-making entrepreneurs or through their own salaried officials, who determine how many of each particular grade of workers they care to employ on the conditions demanded.... Thus we find no neat formula for defining the rights and duties of the individual in society. In the democratic state every individual is both master and servant. In the work that he does for the community in return for his subsistence he is, and must remain, a servant, subject to the instructions and directions of those whose desires he is helping to satisfy. As a Citizen-Elector jointly with his fellows, and as a Consumer to the extent of his demand, he is a master, determining, free from any superior, what shall be done. Hence, it is the supreme paradox of democracy that every man is a servant in respect of the matters of which he possesses the most expert proficiency, namely, the professional craft to which he devotes his working hours; and he is a master over that on which he knows no more than anybody else, namely, the general interests of the community as a whole. In this paradox, we suggest, lies at once the justification and the strength of democracy. It is not, as is commonly asserted by the superficial, that Ignorance rules over Knowledge, and Mediocrity over Capacity: In the administration of society Knowledge and Capacity can make no real and durable progress except by acting on and through the minds of the common human material which it is desired to improve. It is only by carrying along with him the ‘average sensual man,’ that even the wisest and most philanthropic reformer, however autocratic his power, can genuinely change the face of things. Moreover, not even the wisest of men can be trusted with that supreme authority which comes from the union of knowledge, capacity, and opportunity with the power of untrammelled and ultimate decision. Democracy is an expedient—perhaps the only practicable expedient—for preventing the concentration in any single individual or in any single class of what inevitably becomes, when so concentrated, a terrible engine of oppression. The autocratic emperor, served by a trained bureaucracy, seems to the Anglo-Saxon a perilously near approach to such a concentration. If democracy meant, as early observers imagined, a similar concentration of Knowledge and Power in the hands of the numerical majority for the time being, it might easily become as injurious a tyranny as any autocracy. An actual study of the spontaneous democracies of Anglo-Saxon workmen, or, as we suggest, of any other democratic institutions, reveals the splitting up of this dangerous authority into two parts. Whether in political or in industrial democracy, though it is the Citizen who, as Elector or Consumer, ultimately gives the order, it is the Professional Expert who advises what the order shall be.
“It is another aspect of this paradox that, in the democratic state, no man minds his own business. In the economic sphere this is a necessary consequence of division of labour; Robinson Crusoe, producing solely for his own consumption, being the last man who minded nothing but his own business. The extreme complication brought about by universal production for exchange in itself implies that every one works with a view to fulfilling the desires of other people. The crowding together of dense populations, and especially the co-operative enterprises which then arise, extend in every direction this spontaneous delegation to professional experts of what the isolated individual once deemed ‘his own business.’ Thus, the citizen in a modern municipality no longer produces his own food or makes his own clothes; no longer protects his own life or property; no longer fetches his own water; no longer makes his own thoroughfares, or cleans or lights them when made; no longer removes his own refuse or even disinfects his own dwelling. He no longer educates his own children, or doctors and nurses his own invalids. Trade Unionism adds to the long list of functions thus delegated to professional experts the settlement of the conditions on which the citizen will agree to co-operate in the national service. In the fully-developed democratic state the Citizen will be always minding other people’s business. In his professional occupation he will, whether as brain-worker or manual labourer, be continually striving to fulfil the desires of those whom he serves; whilst as an Elector, in his parish or his co-operative society, his Trade Union or his political association, he will be perpetually passing judgment on issues in which his personal interest is no greater than that of his fellows.
“If, then, we are asked whether democracy, as shown by an analysis of Trade Unionism, is consistent with Individual Liberty, we are compelled to answer by asking, What is Liberty? If Liberty means every man being his own master, and following his own impulses, then it is clearly inconsistent, not so much with democracy or any other particular form of government, as with the crowding together of population in dense masses, division of labour, and, as we think, civilisation itself. What particular individuals, sections, or classes usually mean by ‘freedom of contract,’ ‘freedom of association,’ or ‘freedom of enterprise’ is freedom of opportunity to use the power that they happen to possess—that is to say, to compel other less powerful people to accept their terms. This sort of personal freedom in a community composed of unequal units is not distinguishable from compulsion. It is, therefore, necessary to define Liberty before talking about it; a definition which every man will frame according to his own view of what is socially desirable. We ourselves understand by the words ‘Liberty’ or ‘Freedom,’ not any quantum of natural or inalienable rights, but such conditions of existence in the community as do, in practice, result in the utmost possible development of faculty in the individual human being. Now, in this sense democracy is not only consistent with Liberty, but is, as it seems to us, the only way of securing the largest amount of it. It is open to argument whether other forms of government may not achieve a fuller development of the faculties of particular individuals or classes. To an autocrat, untrammelled rule over a whole kingdom may mean an exercise of his individual faculties, and a development of his individual personality, such as no other situation in life would afford. An aristocracy or government by one class in the interests of one class, may conceivably enable that class to develop a perfection in physical grace or intellectual charm attainable by no other system of society. Similarly, it might be argued that, where the ownership of the means of production and the administration of industry are unreservedly left to the capitalist class, this ‘freedom of enterprise’ would result in a development of faculty among the captains of industry which could not otherwise be reached. We dissent from all these propositions, if only on the ground that the fullest development of personal character requires the pressure of discipline as well as the stimulus of opportunity. But however untrammelled power may affect the character of those who possess it, autocracy, aristocracy, and plutocracy have all, from the point of view of the lover of liberty, one fatal defect—they necessarily involve a restriction in the opportunity for development of faculty among the great mass of the population. It is only when the resources of the nation are deliberately organised and dealt with for the benefit, not of particular individuals or classes, but of the entire community; when the administration of industry, as of every other branch of human affairs, becomes the function of specialised experts, working through deliberately adjusted Common Rules; and when the ultimate decision on policy rests in no other hands than those of the citizens themselves, that the maximum aggregate development of individual intellect and individual character in the community as a whole can be attained.
“For our analysis helps us to disentangle from the complex influences on individual development those caused by democracy itself. The universal specialisation and delegation which, as we suggest, democratic institutions involve, necessarily imply a great increase in capacity and efficiency, if only because specialisation in service means expertness, and delegation compels selection. This deepening and narrowing of professional skill may be expected, in the fully-developed democratic state, to be accompanied by a growth in culture of which our present imperfect organisation gives us no adequate idea. So long as life is one long scramble for personal gain—still more, when it is one long struggle against destitution—there is no free time or strength for much development of the sympathetic, intellectual, artistic, or religious faculties. When the conditions of employment are deliberately regulated so as to secure adequate food, education, and leisure to every capable citizen, the great mass of the population will, for the first time, have any real chance of expanding in friendship and family affection, and of satisfying the instinct for knowledge or beauty. It is an even more unique attribute of democracy that it is always taking the mind of the individual off his own narrow interests and immediate concerns, and forcing him to give his thoughts and leisure, not to satisfying his own desires, but to considering the needs and desires of his fellows. As an Elector—still more as a chosen Representative—in his parish, in his professional association, in his co-operative society, or in the wider political institutions of his state, the ‘average sensual man’ is perpetually impelled to appreciate and to decide issues of public policy. The working of democratic institutions means, therefore, one long training in enlightened altruism, one continual weighing, not of the advantage of the particular act to the particular individual, at the particular moment, but of those ‘larger expediencies’ on which all successful conduct of social life depends.
“If now, at the end of this long analysis, we try to formulate our dominant impression, it is a sense of the vastness and complexity of democracy itself. Modern civilised states are driven to this complication by the dense massing of their populations, and the course of industrial development. The very desire to secure mobility in the crowd compels the adoption of one regulation after another, which limit the right of every man to use the air, the water, the land, and even the artificially produced instruments of production, in the way that he may think best. The very discovery of improved industrial methods, by leading to specialisation, makes manual labourer and brainworker alike dependent on the rest of the community for the means of subsistence, and subordinates them, even in their own crafts, to the action of others. In the world of civilisation and progress, no man can be his own master. But the very fact that, in modern society, the individual thus necessarily loses control over his own life, makes him desire to regain collectively what has become individually impossible. Hence the irresistible tendency to popular government, in spite of all its difficulties and dangers. But democracy is still the Great Unknown. Of its full scope and import we can yet catch only glimpses. As one department of social life after another becomes the subject of careful examination we shall gradually attain to a more complete vision. Our own tentative conclusions, derived from the study of one manifestation of the democratic spirit, may, we hope, not only suggest hypotheses for future verification, but also stimulate other students to carry out original investigations into the larger and perhaps more significant types of democratic organisation.”
In 1920, after nearly a quarter of a century of further experience and consideration, we should, in some respects, put this differently. The growth, among all classes, and especially among the manual workers and the technicians, of what we may call corporate self-consciousness and public spirit, and the diffusion of education—coupled with further discoveries in the technique of democratic institutions—would lead us to-day to include, and even to put in the forefront, certain additional suggestions, which we can here only summarise briefly.
There is, in the first place, a genuine need for, and a real social advantage in giving recognition to, the contemporary transformation in the status of the manual working wage-earners, on the one hand, and of the technicians on the other, as compared with that of the manager or mere “captain of industry.” This change of status, which is, perhaps, the most important feature of the industrial history of the past quarter of a century, will be most easily accorded its legitimate recognition in those industries and services in which the profit-making capitalist proprietor is dispensed with in favour of public ownership, whether national, municipal, or co-operative. This is, incidentally, an important reason for what is called “nationalisation.” It is a real social gain that the General Secretary of the Swiss Railwaymen’s Trade Union should sit as one of the five members of the supreme governing board of the Swiss railway administration. We ourselves look for the admission of nominees of the manual workers, as well as of the technicians, upon the executive boards and committees, on terms of complete equality with the other members, in all publicly owned industries and services; not merely, or even mainly, for the sake of the advantages of the counsel and criticism that the newcomers may bring from new standpoints, but principally for the sake of both inspiring and satisfying the increasing sense of corporate self-consciousness and public spirit among all those employed in these enterprises.
In the second place we should lay stress on the change that is taking place in the nature (and in the conception) of authority itself. In our analysis of 1897 we confined ourselves unduly to a separation of spheres of authority. Whilst still regarding that analytic separation of “management” into three classes of judgements or decisions as fundamentally valid, we should nowadays attach even more importance to the ways in which authority itself, in industry as well as in the rest of government, is being rapidly transformed, alike in substance and in methods of expression. The need for final decisions will remain, not merely in emergencies, but also as to policy; and it is of high importance to vest the responsibility for decision, according to the nature of the case, in the right hands. But we suggest that a great deed of the old autocracy in industry and services, once deemed to be indispensable, is ceasing to be necessary to efficiency, and will accordingly, as Democracy becomes more genuinely accepted, gradually be dispensed with. A steadily increasing sphere will, except in matters of emergency, be found for consultation among all grades and sections concerned, out of which will emerge judgements and decisions arrived at, very largely, by common consent. This will, we believe, produce actually a higher standard of industrial efficiency than mere autocracy could ever hope for. Where knowledge is a common possession the facts themselves will often decide; and though decisions may be short, sharp, and necessarily formulated by the appropriate person, they will not inevitably bear the impress of (or be resented as) the dictates of irresponsible autocracy. We may instance two large classes of considerations which will, we think, with great social advantage, come to be matters for mutual consultation in those committees and councils which already characterise the administration of all industry on a large scale, whether under private or public ownership, and which will, in the future, be increasingly representative of all grades of workers by hand or by brain. To such committees and councils there will come, as a matter of course, a stream of reports from the disinterested outside costing experts, which will carry with them no coercive authority, but which will graphically reveal the efficiency results, so far as regards cost and output, of each part of the enterprise, in comparison both with its own past, and with the corresponding results of other analogous enterprises. Similarly, there will come a stream of financial and merely statistical reports from equally disinterested outside auditors and statisticians, making graphic revelations as to the progress of the enterprise, in comparison with its own previous experience and with the progress of like enterprises elsewhere. Further, there will be a stream of what we may call scientific reports, also from disinterested outside experts, not only describing new inventions and discoveries in the technique of the particular enterprise, but suggesting, in the light of recent surveys of the work, how they could be practically applied to its peculiar circumstances. These three classes of reports, all of them by disinterested experts, engaged in keeping under review all analogous enterprises at home or abroad, and having neither interest in, nor authority over, any of them, will, we suggest, be discussed by the members of the committees and councils on terms of equality; the decisions being taken, according to the nature of the case, by those in whom the responsibility for decision may be vested.
But there will be a second extensive class of reports of a different character, conveying not statements of fact but views of policy. There will, we must assume, be reports from those responsible, not merely or mainly for satisfying the existing generation of consumers, producers, or citizens, but for safeguarding the interests of the community as a whole, in the future as well as in the present. There will be the reports from the organs of the consumers or users of the particular commodity or service (such as the District Committees representing telephone users set up by the Postmaster-General as organs of, criticism and suggestion for his telephone administration). Finally there will be reports conveying criticisms and suggestions from committees or councils representing other enterprises, or other sections of producers (whether technicians or manual workers), which may have something to communicate that they deem important. These reports will, none of them, come with coercive authority, but merely as conveying information, to be considered in the consultations out of which the necessary decisions will emerge.
Opinions may differ as to the competence to take part in such consultations of the selected representatives of the manual workers and the technicians respectively. We are ourselves of opinion that, taking the business as a whole, such representatives will be found to compare, in competence, quite favourably with the average member of a Board of Directors. But whether or not the counsels and decisions of great industrial enterprises are likely to be much improved by such consultations—and we confidently expect that they will be—we suggest that it is predominantly in this form that the principles of Democracy may, in practice, be applied to industrial administration; and that it will be for the Professional Associations of the technicians and the Trade Unions of the manual workers to prove themselves equal to the transformation in their status that this or any other application of Democracy involves.
But here we must pause. In a future work on the achievements, policy, and immediate controversies of the British Labour and Socialist Movement we shall give the historical and the psychological analysis, in the light of the experience of the past few decades, upon which we base our present conclusions.