Labour policy—false and true

by Lynden Livingston Macassey

CHAPTER XXIX
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 35s. 3d. weekly for a man and 20s. 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.”