Labour policy—false and true

by Lynden Livingston Macassey

Without the machinery provided by the much-abused capitalist Labour would to-day be “scratching the ground” to extract a penurious livelihood. The capitalistic organization of industry would never have survived, had it not been in the main economically sound, and, on the whole, a system which made for the good of society. This is the system which is to be wholly destroyed by the Labour Party because of certain alleged defects, and replaced by an untried socialistic regime.

The Alleged Defects of Capitalism

First, it is said that under capitalism the incentive stands ethically condemned in that an employer is actuated wholly by a desire for his own private profit. I fail to see any turpitude in that motive; an employer can only make profit if he succeeds in serving the community. There are, of course, some—I personally have met very few—employers who deliberately try to foist on credulous consumers an adulterated or spurious article. But it is exactly for the same motive, namely, for profit, that the worker serves his employer, or, if that is an unacceptable analogy, that a member of a gang of workers serves his fellow-worker who is head of the gang and employing him. There are just as many workmen, indeed more, who are ready to pass off bad work upon their employer as employers prepared to pass off bad work upon the community.

As against this incentive of private profit the Syndicalists would substitute the imaginary incentive that each worker would work for the good of his own group of workers; the National Guildist that each worker would work for the benefit of his Guild of workers, and the State Socialist that each worker would work for the State. Reduced to its elements, it means that each worker would, in the end, work for what he could get out of it, or if he found that he got the same advantage without working so hard, then he would not work so energetically. The suggestion that workers would work more vigorously for the community or State is so absolutely contrary to my own experience that I find it difficult to treat the suggestion with respect. It was never so during the war—in Government factories, dockyards, arsenals, there was just as much restriction of production as in the works of private employers, and considerably more strikes. In none of our municipal services is it found to be a fact. The railway strike of September 1919, while the railways were under Government control, is only another illustration of the falsity of the suggestion.

It is said that Labour under the capitalistic system is bought and sold as a commodity. That is one of those phrases which expresses more than is meant. The lawyer sells his legal advice, the surgeon his operative skill, the musician his powers of technique, taste and expression just as a person who owns a commodity sells it. I cannot see any moral degradation whatever in the worker accepting wages any more than a private lawyer accepting his salary in a financial house, or a house-surgeon accepting his in a hospital or an organist his in a parish church. All of them are subject to notice terminating their engagements, just as a manual worker—not probably a week’s notice, but some longer period. The accusation is put even higher and the capitalist is called a thief, in other words, that he is appropriating in the shape of his own profit something which ought to belong to Labour. This proposition, palpably untrue, is so generally accepted by the workers that it deserves some examination. If a Trade Unionist, say a foreman plater, in one of our large ship repairing centres, works hard and makes, as he does in normal times, a big income, he may do one or two things with it; he may spend it on his own amusements or in wasteful extravagance; on the other hand, he may save and invest it, as I have known many do, in a small industrial concern in his own district. In the first case he is by common consent an honourable, if a foolish, man, in the second he certainly will not be called a thief. He has used by investment a part of his wealth for the purpose of producing more wealth, and his resultant increase of wealth is not robbery of the workers in the concern in which his money is invested. But then he is a member of the Labour movement. Between such a case and the case of the financial house which makes a business of collecting the savings or surplus wealth of thrifty persons for investment in industry, there is no difference in principle whatsoever.

Capitalism implies competition, and competition, Labour says, must be eradicated out of social and industrial activity. Why competition should be a good thing in every walk of human life and provide a healthy stimulus, and yet not provide an equally beneficial stimulus in industrial and commercial affairs is hard to follow. What Labour really intends to say is that competition acts so as to depress wages and lower the standard of living of the worker. That is only one side; competition acts so as to increase demand for commodities and the volume of employment, and, if production were not restricted, would increase wages. Then it is said that the capitalistic organization of industry involves economic waste, by which is meant that industry is carried on less efficiently under private management than it would be either under Government or under “democratic control.” If there is waste it is the capitalist who suffers, the Trade Unionist always receives his standard rate of wages. If there is waste on the employers’ side, as of course there is in some badly organized shops, there is greater waste in the shape of restricted production on the part of the worker. Organization and efficiency are, of course, essential to industrial progress, but to suggest that these essential qualities are better obtained under bureaucratic or democratic control is at variance with our experience during the war and of present conditions in Russia where democratic control has laid the hand of death on industry.

Where Reform is Admittedly Needed

It must not be assumed that the capitalistic system of organization of industry is perfect and needs no reform; unfortunately, it exhibits a number of well-marked deficiencies. First of all, an employer only employs a man as long as he desires or finds he can profitably do so, in just the same way that the workman only works for an employer as long as he finds it suits him and no better job is forthcoming. One defect certainly of the present capitalistic system is the failure of employers in industry as a whole or of each industry in particular to provide against unemployment. On this matter I have a good deal to say in a subsequent part of this book. Again, in the past there was a regrettable tendency which, in recent years, has happily disappeared amongst the best employers, to disregard the human qualities, aspirations, needs and susceptibilities of the worker, coupled with a neglect to provide effectively for his welfare and well-being in the works. This, however, is nothing intrinsic in the capitalistic organization of industry; I have heard equally bitter complaints by the workers when I have been sitting as arbitrator in disputes between employees of the “non-capitalistic” co-operative societies and the societies’ democratic managements.

There is, however, a complaint against capitalism which, although it has been very largely remedied in recent years, yet in normal times, immediately prior to the war, certainly existed—that was the insufficient distribution amongst the workers of the product of the industry; capital in many cases received an undue share of the reward. This was a short-sighted policy; for good wages to the workers, provided the workers give good output, results in the workers possessing good purchasing power; and as so many workers are also consumers, this results in a good demand for commodities and so is to the benefit of manufacturers, and the community. But if some employers appropriated by way of profit an unduly large share of the product of industry, the workers did exactly the same if opportunity presented itself. One has illustrations of this in the way in which, by agreement between the building employers and the building Trade Unions, costs were forced up by wage-agreements which largely contributed to the shortage of housing and placed the unskilled builder’s labourer in a wage-position substantially higher than that of the skilled engineer tradesman, who normally stands on a higher wage-level.