The Case for Profit-Sharing
Many Liberals are, however, asking whether this is sufficient and whether it is not possible for the State to intervene to alter the distribution of the product of industry in favour of the wage-earner. In particular, they are wondering whether it is possible to secure the universal application of some system of profit-sharing. The underlying principle of profit-sharing is indeed one which we must look to if the whole-hearted assistance of labour is to be enlisted behind the productive effort of the country. But the profit we have to consider is the profit over which the worker has some influence. There is no merit in inviting him to share in purely commercial profits or losses which may be due to some one else’s speculation or business foresight. It is futile to imagine you can reverse the functions of labour and capital, and say that capital should have a fixed wage, and that the employee should bear all the risks of the industry.
Again, in some cases it is suitable that profits should be considered in regard to a whole industry, but in others only in regard to a particular firm or section; and finally the rate of profit suitable to various trades varies between very wide limits. In short, there can be no universal rule in this matter which can be enforced by Act of Parliament.
Nevertheless, we must all desire to proceed along the lines of associating the pecuniary interests of the worker in the success of the enterprise, and if any one can suggest a way in which direct assistance to that end can be given by political action, as distinct from industrial, he will be doing a great service. I may add that there is an argument in favour of profit-sharing which is of the utmost importance and which was recently expressed by a prominent industrialist: who declared to me that at long last and after much opposition he has come round to believe in profit-sharing, because it enables him to show his men the balance sheet. The solution adopted last year in the mining industry contains the sort of elements we wish to see adopted in principle. The men are given, through their officials, the results of the industry. They see that they cannot get more than the industry can pay, and though the present economic conditions are putting the men in a desperate state to-day, the miners, who were often regarded before the war as the most pugnacious in the country, are not burning their employers’ houses, but are studying how the economic conditions of the industry can be improved for the benefit of themselves and their employers.