Accepting this as an accurate statement, which it is, of how alone output can be increased, I wish to point out the immediate obstacles to an achievement of these four objects. They are these:
In regard to (1)—the workman’s low conception of work, his tendency, in many trades, to lose time, his inveterate belief in restriction of output.
In regard to (2)—the conception of organized Labour that the present 47- or 48-hour ordinary working week is a social reform with which no tampering will be permitted, and that if in times of trade prosperity more hours are necessary, they ought to be worked as overtime.
In regard to (3)—the insistence of the Trade Unions, in this country, on their rigid lines of demarcation of work—in other words, on certain work being always reserved for certain Unions, without reference to the prevailing industrial or commercial conditions.
In regard to (4)—the opposition of the workers to the introduction of time- and labour-saving appliances, or of payment by results—and Lord Weir adds: the killing of the spirit of enterprise among employers, as the result of the taxation policy of the Government; the lack of reciprocity and co-operation on the part of the Trade Unions, amounting to active obstruction; and bad statesmanship on the part of the employers’ organizations.
To state these four methods in their order of relative practicability, they run (1), (4), (3) and (2). All the obstacles enumerated above to securing greater production by methods (1), (4) and (3), are the fruit of unsound economic theories that have for many years past been sedulously instilled into Labour, and are now accepted by it as part of its everyday rule of life and conduct.
The Workers’ Notion of the Secret Fund
Foremost, in normal times, comes the erroneous belief that all the aspirations of Labour for increased remuneration, shorter hours, improved conditions of employment, can be satisfied to the full out of the existing profits of employers and current production. This has been argued incessantly before myself. It is honestly believed that all that is necessary to liquidate the demands of Labour is to devote to that purpose part only of the existing profits of industry, in their entirety said to be appropriated by avaricious employers. The sole impediment is considered to be the greed of employers, coupled with the fact that as industry is now organized they hold the money-bags. But this error can be exposed if the demands of Labour are reduced to a definite charge per annum on the industry in question, and each particular establishment involved. It can usually be shown on the actual accounts in typical establishments, at any rate in the engineering and shipbuilding industries, that the demands of Labour could not be met out of existing profits. In fact, in many cases, if the whole of employers’ profits were handed over to Labour, and Capital left without any return whatsoever, the demands of Labour could not be satisfied to anything like the full extent.
This delusion is one of the most pernicious in industry, because of its widespread acceptance and its fatal results. It has been fostered by the war conditions, as has already been explained. Employers made profits which exceeded in many cases those retainable under the Munitions of War or Finance Acts, and so it frequently did not matter to them what rate of wages they paid in order to expedite work. Moreover, war advances, far above the rate of wages, were distributed under order of the Government Courts of Arbitration to cover the increased cost of living arising out of the abnormal conditions resulting from the war. These war advances were generally paid by Government, in addition to the contract price for munitions. Thus the workman saw very high nominal rates of wages paid, and the employers at the same time making much greater profits than they could by law appropriate. Nothing was, therefore, more natural than to suppose that all demands could on the current basis of output be satisfied out of existing profits.