Labour policy—false and true

by Lynden Livingston Macassey

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 His principles are out of date, the terminological distinction which he attempted was sound.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.