Labour policy—false and true

by Lynden Livingston Macassey

There is in regard to unemployment but little difficulty in coming to a sound conclusion. Unemployment, and to a less extent under-employment, is on every ground—humanitarian, social, economic—a curse so great that no reasonable effort should be spared to reduce to a minimum the probability of its occurrence, and to mitigate as far as possible its dire effects when once it has supervened. Many will differ as to how far it is right to go in the provision of measures of alleviation, but that is a difference more in degree than in principle. In regard to the investiture of every worker in industry with “human status” there is a more radical cleavage in opinion. While few employers will contest the right of the workmen through their constitutional representatives to voice their demands for settling wages and conditions of employment, and such demands—backed up by the power to apply economic pressure—are effectively voiced by the Trade Unions, most employers will deny the right of the workers “to interfere in the management.” It would be quite impossible to have two sets of persons attempting to manage a factory, or to direct the conduct of the business on the commercial side. But between the fixing of wages and conditions of employment, in which it is admitted that Labour should have a real voice, and the actual executive direction of a business in which it is clear that Labour could not exercise a voice, if efficiency is to be preserved and discipline remain unimpaired, there is a wide sphere of matters which are proper to be discussed between employers and representatives of the workers, and which, when discussed and settled, can be left for executive action to the employers. There is ample room for compromise. The confusion surrounding the catchwords of “a voice in conditions,” “interference in the management,” wants to be cleared away before any more harm is done.

On the question of remuneration there is really, if the matter be closely examined, no difference whatever in principle. Most employers agree with the unions that the worker is entitled to a fair share of the product; they disagree as to what proportion of the product constitutes a fair share—a dispute not as to principle but as to quantum. No employer, so far as my experience goes, would contend that he was entitled in good times to pay his workers nothing more than a bare subsistence wage, and appropriate for himself as profit all the balance of revenue after payment of working expenses and the market rate on capital. What usually happens in bad times is that the workers in employment get, as a first charge on the product, wages much higher than subsistence rates, and the shareholders go without return, which results in great deprivation to many whose meagre incomes consist of such dividends. The more critically one examines the three fundamentals the more one is irresistibly driven to the conclusion that there are no issues between employers and the workers in regard to any of them which cannot form the subject of fair collective bargaining. But that is what is denied by the intellectuals of the Labour Party, entirely on their own a priori reasons. Happily their doctrinaire conclusions meet with scant respect from the general body of workers.

The Vagueness of Labour’s Scheme of Reconstruction

There are only two possible courses for the future—either to reconstruct industry on some entirely new basis, or to maintain the present system of organization and introduce reforms which will cover the three fundamentals as a first beginning. That really is the question on which a decision must sooner or later be taken by the nation, and far-reaching national consequences will turn upon it. Labour says: “Destroy the present industrial system, and replace it by something based on public, and not private, ownership of the means of production.” Did we know exactly what Labour’s scheme of reconstruction is, it could be critically examined in detail, and its practical effect on the prosperity of industry, the welfare of the worker and the good of the community dispassionately considered. But Labour with prudent reticence has not provided us with any official scheme. Different sections of Labour have tabled all kinds of variant and in many cases discordant schemes which agree in one respect only—the elimination of the private employer. All that the Labour Party tender in the way of constructive reorganization is the vague formula of “nationalization and democratic control,” Nor will the Party undertake to say what is the method and kind of industrial control—a matter on which depend the whole efficiency and success of industry—which it has in mind. The truth is, the Party has not succeeded in devising any scheme of industrial control on which it can agree, and the Executive Committee, though instructed to report on that question, has either been unable to do so, or have found it expedient to postpone committing itself (see p. [58]). Yet the Party, after invoking fire from Heaven on the Government as retribution for its policy of opportunism in regard to industry, calls upon the country to witness that Labour has a considered and well-thought-out industrial policy, which it euphemistically calls “democratic control,” and announces with ingenuous naïveté that it is such a system as will always harmonize with the special circumstances and requirements of each industry! Who is the opportunist? The Government in adhering to continuance of the established organization of industry—on which the greatness of England’s trade and commerce has been built up—or the Labour Party, which, without any clear idea of what it would put in its place, would destroy the existing organization in the complacent expectation that by some process of abiogenesis a better system will soar like the Phoenix from the ashes? There would be a short and sharp retort from the members of any of the great Trade Unions, for example the Amalgamated Engineering Union, were the Labour Party to propose to reconstruct that proud organization on the basis of a resounding formula. The Executive Committee of that Union—supposing it, agreed to consider any such gratuitous suggestion from even a Labour source—would insist—at least it always did with me during the war—that general phrases should be reduced into clear, crisp and definite proposals, each one of which could be subjected to a microscopic scrutiny of the most searching kind, sufficient to reveal its true nature, its effects direct and indirect, and its remotest implications. Is not the nation entitled to similar information? In [Part I], [chapter IX], I outline the injury to industry and the country that would inevitably result, in my judgment, from any socialistic reconstruction of industry. Here I am only concerned to show that when the flowing garments of flowery phraseology are respectfully removed, they are seen to cover nothing but a hollow lay-figure without the least semblance to even an articulated model. This is what we are invited by the Labour Party to set up and worship as the future genius of British industry.

The Recent Change in Labour’s Proposals

Labour has started from the wrong end—not to ascertain what are the defects in the present industrial system and the manner in which they can best be remedied—but how to get rid most easily of the private employer under the honest but uncritical and irrational belief that unless he is removed the defects cannot be remedied. This was the notion of Labour in the days when first it embraced State Socialism. Nationalization of industries, under which the Government would replace the private employer, was described in radiant language as “the charter of salvation of the working-classes.” Then Labour acquired some experience of the State as a “model employer”—in the Post Office, in the Royal Dockyards, in Woolwich Arsenal, and in other Government factories. With the disappearance of the private employer the workers in such nationalized industries found to their surprise and clamant regret that their conditions were not better, but were worse. The State, they discovered, was not so considerate a master as the private employer—not so disposed to recognize Trade Unions, or introduce Trade Union conditions, or pay standard rates of wages. Was ever a complacently cherished conviction so rudely shattered! Any critical inquirer would have stopped to consider whether after all it was right, with this practical experience, to assume that the only way to improve industrial conditions was to put an end to the private employer. Some prominent Trade Unionists did pause to think, and more than one has told me of his consequent renunciation of Socialism. So the old doctrine died, and some other doctrine was urgently needed—a fitting opportunity for the intellectuals. A new ship had to be constructed on the old keel of the abolition of private ownership, and this time it had to float. And after all, was anything easier? It had become fashionable, during the war, to talk of the rigidity of bureaucracy, and the inelasticity of bureaucratic direction—precisely the same thing might have been said with equal justice about the Trade Unions, for they are bureaucracy in excelsis—but no one thought of it. On the other hand, men’s ears were dinned with the mobile excellencies of democracy, its extraordinary versatility in adjusting men to their environment, and in modulating the qualities of the latter to its human content, and the air vibrated with theories of political self-determination. Democratic Government was being hailed as the balm for Europe, and what was more natural than that industrial self-determination under the name of “democratic control” should be acclaimed by Labour as the restorative of industry. So the new ship was built and called “Nationalization and Democratic Control.” Put into the water in 1918, it still lies a mere hull, unengined, unfinished and unclassed.

But taught by war-time experience, the Labour Party has become more cautious. It no longer contends as it used to do that all industries can be nationalized—an admission, the importance of which should not be overlooked. It would nationalize and democratically control only some of the great national industries, the smaller and less well-organized industries it will leave, for the present, alone. It even goes so far as to admit the economic necessity for the continuance of many middlemen. The industries that it would nationalize are those that were small and badly organized once, but which responded to the enterprise and initiative of the pioneers who made them and so grew great. This, when stripped of dialectics, means that Labour is satisfied that its regime of nationalization and democratic control whatever else it can achieve—and as to that we are left to speculate—cannot supply the enterprise and initiative requisite for the development of budding industries. At what stage in the growth of an industry Labour’s machinery of nationalization and democratic control can step in and infuse those two great qualities which are essential for vitality and progress, at a voltage higher than can be generated under private ownership, no information whatsoever is vouchsafed to us.

Those who have studied with a critical eye the official details of Labour’s industrial policy in [chapter VIII], will have noted that the same veil of indefiniteness enshrouds the practical working out of “nationalization and democratic control.” Is it to mean an increased financial burden on the State? No details. How is the requisite capital to be procured when we have performed the national obsequies over the private capitalist? No details, except that it will be derived from a mythical “national surplus” which now, at any rate, does not exist. By what means are the waste and inefficiency which experience has shown to be inherent in bureaucratically administered industries to be obviated? No details. What is the mechanism which is going to compel the home consumer to increase his consumption and the foreign consumer to buy commodities which he will not, and cannot, buy to-day? No information. Where will the secret fund be situated, and how is it to be formed, which is going to finance higher wages and better conditions than under the present scheme of industrial organization? We are not informed—that it cannot be built up from employers’ profits is clear from [chapter XXVI]. For the answers to these practical questions of crucial importance, and to many others, we are left groping in the dark. All we are told is that learned intellectuals of the Labour Party, out of their wealth of industrial research and ample gifts of prescience, when the proper time comes, will open their Pandora’s box and reveal the secrets. Is the nation prepared to gamble its existence on that assurance?

Reform of Industry v. Reconstruction

Happily for the country, the ordinary worker is no more intrigued with the intellectuals’ proposals for the reconstruction of industry, or society or the State than he is with their schemes for the reconstitution of his Trade Union, all of which he has with contumely turned down. What he is most keenly interested in is whether their proposals are the soundest, safest and quickest way to afford him relief against unemployment, and give him a human status in industry and a fair share in the product. He has not at all accepted the Labour Party’s portentous declaration that nothing short of “nationalization and democratic control” can confer those benefits.