It must be apparent that any history of Trade Unionism that breaks off at the beginning of 1920 halts, not at the end of an epoch, but—we may almost say—at the opening of a new chapter. British Trade Unionism, at a moment when it is, both industrially and politically, stronger than ever before, is seething with new ideas and far-reaching aspirations. At the same time, its most recent advances in status and power are by no means yet accepted by what remains the governing class; its political and industrial position is still precarious, and within a very brief space it may again find itself fighting against a frontal attack upon its very existence. And in face of the common enemy—now united as an autocratic capitalism—Industrial Democracy is uncertain of itself, and almost blindly groping after a precise adjustment of powers and functions between Associations of Producers and Associations of Consumers.
Let us elaborate these points in detail. One result of the Great War has been, if not the actual enthronement of Democracy, a tremendous shifting of authority to the mass of the people. Of this shifting of the basis of power the advance in the status of Trade Unionism and the advent, in British politics, of the Labour Party, are but preliminary manifestations. As yet the mass of the people, to whom power is passing, have made but little effective use of their opportunities. At least seven-eighths of the nation’s accumulated wealth, and with it nearly all the effective authority, is still in the hands of one-eighth of the population; and the seven-eighths of the people find themselves in consequence still restricted, as regards the means of life, to less than half of that national income which is exclusively the product of those who labour, by hand or by brain. The “leisure class”—the men and women who live by owning and not by working, a class increasing in actual numbers, if not relatively to the workers—seem to the great mass of working people to be showing themselves, if possible, more frivolous and more insolent in their irresponsible consumption, by themselves and their families, of the relatively enormous share that they are able to take from the national income. It is coming to be more and more felt that the continued existence of this class involves a quite unwarranted burden upon their fellow-citizens working by hand or by brain. Very naturally there is widespread discontent, and the emergence of all sorts of exasperated criticisms and extravagant schemes.
The truth is, of course, that Democracy, whether political or industrial, is still in its infancy. The common run of men and women, who have only just been enfranchised politically, and are even yet only partially organised industrially, are as yet unable to make full use of Democratic institutions. The majority of them cannot be induced, in the economic pressure to which Capitalism subjects them, to take the trouble or give the continuous thought involved in any effective participation in public affairs. The result is that such Democratic institutions as we possess are, of necessity, still inefficiently managed; and neither the citizen-consumers nor the Trade Unionist producers find themselves exercising much effective control over their own lives. The active-minded minority sees itself submerged by the “apathetic mass”; the individual feels enslaved by the “machine.” The complaint of the “rank and file”—using that term to mean, not any “extremist” minority, but merely the majority, the “common run of men”—comes to no more than that they do not find themselves obtaining the results in their daily lives which they expected, and which they were, as they understood, promised. This, we think, is the explanation of the perpetual “see-saw” within the Labour Movement, decade after decade, between an infatuation for industrial or “direct” action and an equal infatuation for political or Parliamentary and Municipal action—each, unfortunately, to the temporary neglect of the other. Or to state the Democratic problem in a more fundamental form, the see-saw is between the aspiration to vest the control over the instruments of production in Democracies of Producers, and the alternating belief that this control can best be vested in Democracies of Consumers. But it is abundantly clear, alike from history and economic analysis, that in any genuine Democracy both forms of organisation are indispensably required. In the modern State every person throughout his whole life consumes a great variety of commodities and services which he cannot produce; whilst men and women, occupied in production, habitually produce a single commodity or service for other persons to consume. Their interests and desires as producers, and as producers of a single commodity or service, are not, and can never be, identical with the interests and desires of these same people as consumers of many different commodities and services—just as their interests and desires as citizens of a community, or as members of a race which they wish to continue in independent existence, are not necessarily identical with those of which they are conscious either as producers or as consumers.
It is, in fact, now realised that Democratic organisation involves the acceptance, not of a single basis—that of the undifferentiated human being—but of various separate and distinct bases: man as a producer; man as a consumer; man as a citizen concerned with the continued existence and independence of his race or community; possibly also other bases, such as man as a scientist or man as a religious believer. What is wrong in each successive generation is the intolerant fanaticism of the enthusiasts which leads them to insist on any one form of this multiplex Democracy to the exclusion of the other forms. We see to-day uppermost a revival of faith in Associations of Producers, as being, in an industrial community, the form of Democratic organisation most important to the working people. To some one-sided minds, as was inevitable, the all-embracing Association of Producers seems the only form that Democratic organisation can validly take. Interesting to the historian is the intellectual connection of this revival with the previous manifestations, in the Trade Union Movement, of the idea of “Co-operative Production,” whether in the revolutionary Owenism of 1830-34, the Christian Socialism of 1848-52, or the experiments of particular Unions in 1872. As we have explained, the Trade Union, being essentially an Association of Producers, has never quite lost the idea that, so far as industry is concerned, this form of association, and no other, is Democracy. But the new form in which the faith in Associations of Producers is now expressing itself is concerned less with the ownership of the instruments of production (it being to-day commonly taken for granted that this must be vested in the community as a whole) than with the management of industry. According to the most thoroughgoing advocates of this creed, the management of each industry should be placed, not separately in the hands of those engaged in each establishment, any more than in the hands of private capitalist employers, but in the hands of the whole body of persons throughout the community who are actually co-operating in the work of the industry, whether by hand or by brain; this management being shared, by Workshop or Pit Committees, District Councils and National Boards, among all these “workers.”
This conception seems to us too one-sided to be adopted in its entirety, or to be successful if it were so adopted. We venture to give, necessarily in a cursory and generalised form, the results of our own investigations into the management of industries and services by Democracies of Producers and Democracies of Consumers respectively. In so far as we may draw any valid inferences from previous experiments of different kinds, we must note that the record of the successive attempts, in modern industry, to place the entire management of industrial undertakings in the hands of Associations of Producers has been one of failure. In marked contrast, the opposite form of Democracy, in which the management has been placed in the hands of Associations of Consumers, has achieved a large and constantly increasing measure of success. We do not refer merely to the ever-growing development throughout the civilised world, in certain extensive fields of industrial operation, of Municipal and National Government, though from this some valuable lessons may be learnt. Even more instructive is the continuous and ever-widening success, in the importing, manufacturing, and distributing of household supplies, of the voluntary Associations of Consumers known as the Co-operative Movement, which is almost entirely made up of the same class of men and women—often, indeed, of the very same individuals—as we find in the abortive “self-governing workshops” and in the Trade Union Movement. Why, for instance, is it possible for the manual workers, organised as consumers, to carry on successfully the most extensive establishments for the milling of flour, the baking of bread, the making of boots and shoes, and the weaving of cloth, when repeated attempts to conduct such establishments by the same kind of members organised as Associations of Producers have not succeeded? [733]
The Democracy of Associations of Consumers, whatever its shortcomings and defects, has, we suggest, the great advantage of being demonstrably practicable. The job can be done. It has also the further merit that it solves the problem presented by what the economists call the Law of Rent. It does not leave to any individual or group of individuals the appropriation and enjoyment of those advantages of superior sites and soils, and other differential factors in production, which should be, economically and ethically, taken only by the community as a whole. Moreover, management by Associations of Consumers, whether National, Municipal, or Co-operative, gives one practical solution to the problem of fixing prices without competition, by enabling every producer to be paid at his own full Standard Rate, and distributing the various products at prices just over cost, the whole eventual surplus being returned to the purchasers in a rebate or discount on purchases, called “dividend”; or otherwise appropriated for the benefit and by direction of the consumers themselves. Hence there is no danger of private monopoly; no opportunity for particular groups of producers to make corners in raw materials; to get monopoly prices for commodities in times of scarcity, or to resist legitimate improvements in machinery or processes merely because these would interfere with the vested interests of the persons owning particular instruments of production or possessing a particular kind of skill. In short, the control of industries and services by Democracies of Consumers realises the Socialist principle of production for use and not for exchange, with all its manifold advantages. The most significant of these superiorities of Production for Use over Production for Exchange is its inevitable effect on the structure and working of Democracy. Seeing that the larger the output the smaller the burden of overhead charges—or, to put it in another way, the greater the membership the more advantageous the enterprise—Associations of Consumers are not tempted to close their ranks. This kind of Democracy automatically remains always open to new-comers. On the other hand, Associations of Producers, whether capitalists, technicians or manual workers, exactly because they turn out commodities and services not for their own use, but for exchange, are perpetually impelled to limit their numbers, so as to get, for the existing membership, the highest possible remuneration. This kind of Democracy is, therefore, instinctively exclusive, tending always to become, within the community, a privileged body. All this amounts to a solid reason in favour of “nationalisation,” “municipalisation,” and the consumers’ Co-operative Movement, which is reflected in the continuous and actually accelerating extension of all of them, not in one country only, but throughout the civilised world. [734]
But the Democracy based on Associations of Consumers, whether in the National Government, the Municipality, or the Co-operative Society, reveals certain shortcomings and defects, some transient and resulting only from the existing Capitalism, and others needing the remedy of a complementary Democracy of Producers. So long as we have a society characterised by gross inequalities of income, it is inevitable that the conduct of industries and services by Associations of Consumers should be even more advantageous to the rich than to the poor, and of little or no use to those who are destitute. The same trail of a Capitalist environment affects also the conditions of employment. The Co-operative Society, the Municipality or the Government Department cannot practically depart far from the normal conditions of the rest of the community; and thus avails little to raise the condition of the manual working class. If, however, the Associations of Consumers were co-extensive with the community, they would themselves fix the standard. But there is a more fundamental criticism. The Democracy of Consumers, in Co-operative Society, Municipality or State—however wide may be the franchise, however effective may be the Parliamentary machinery, and however much the elected executive is brought under constituency control—has the outstanding defect to the manual-working producer that, so far as his own working life is concerned, he does not feel it to be Democracy at all! The management, it is complained, is always “government from above.” It is exactly for this reason that in the evolution of British Democracy the conduct of industries and services by Associations of Consumers—whether in the voluntary Co-operative Society or in the geographically organised Municipality or State—has had, for a correlative, the organisation of Associations of Producers, whether Professional Societies or Trade Unions. Their first object was merely to maintain and improve their members’ Standard of Life. Without the enforcement of a Standard Rate and protection against personal tyranny, government by Associations of Consumers is apt to develop many of the evils of the “sweating” characteristic of unrestrained capitalism. It is not now denied, even by the economists, that Trade Unionism, in its establishment of the Doctrine of the Common Rule, and the elaboration of this into the Standard Rate, the Normal Day, and the Policy of the National Minimum, has to its credit during the past three-quarters of a century no small measure of success, with more triumphs easily within view. Trade Unionism among the manual workers, like Professional Association among the brain-workers,[735] has emphatically justified itself by its achievements.
But Trade Unionism, though it has gone far to protect the worker from tyranny, has not, as yet, gained for him any positive participation in industrial management. To this extent the complaints of the objectors among the manual-working class are justified. In the perpetual see-saw of opinion in the Labour world the movement towards Parliamentary action and in favour of what we may call Communal Socialism became, at one time, almost an infatuation, in that its most enthusiastic advocates thought that it would, by itself, solve all problems. A reaction was inevitable. The danger is that this reaction may itself take on the character of an infatuation—this time in favour of the universal domination of Associations of Producers, and the “Direct Action” to which they are prone—against which, in the perpetual see-saw, there will come, in its turn, a contrary reaction, in the course of which Trade Unionism itself may suffer.
This is not to say that the legitimate and desirable movement, specially characteristic of the present century, for increased direct participation in “management” of the Associations of Producers—whether of Professional Societies or of Trade Unions, of doctors and teachers, or of miners and railwaymen—has been, in this or any other country, anything like exhausted. In our view, in fact, it is along these lines that the next developments are to be expected. But, unless we are mistaken in our analysis, this does not mean that the Trade Unions or Professional Societies will take over the entire management of their industries or services, for which, in our opinion, no Association of Producers can be fitted.[736] Democracies of Producers, like Democracies of Consumers, have their peculiar defects, and develop certain characteristic toxins from the very intensity of the interests that they represent. The chief of these defects is the corporate exclusiveness and corporate selfishness habitually developed by associations based on the common interest of a particular section of workers, as against other sections of workers on the one hand, and against the whole body of consumers and citizens on the other. When Democracies of Producers own the instruments of production, or even secure a monopoly of the service to be rendered, they have always tended in the past to close their ranks, to stereotype their processes and faculties, to exclude outsiders and to ban heterodoxy. We see this tendency at work alike in the ancient and modern world, in the castes of India and the Gilds of China, in the mediæval Craft Gilds as well as in the modern Trade Unions and Professional Associations. So long as the Trade Union is an organ of revolt against the Capitalist System—so long as the manual workers are fighting a common enemy in the private owner of land and capital—this corporate selfishness is held in check; though the frequency of demarcation disputes, even in the Trade Union Movement of to-day, gives some indication of what might happen if the Trade Union became an organ of government. We see no way of securing the community of consumers and citizens against this spirit of corporate exclusiveness, and against the inherent objection of an existing generation of producers to new methods of working unfamiliar to them, otherwise than placing the supreme control in the Democracies of Consumers and citizens. There is a further and more subtle defect in Democracies of Producers, the very mention of which may perhaps be resented by those Industrial Unionists who seek to curb the “corporateness” of National Gilds by the “self-government” of the workshop. The experience of self-governing workshops shows that the relationship between the indispensable director or manager (who must, like the conductor of an orchestra, decide the tune and set the time) and the workers whom he directs becomes hopelessly untenable if this director or manager is elected or dismissible by the very persons to whom he gives orders. Over and over again, in the records of the almost innumerable self-governing workshops that have been established in Great Britain or on the Continent, we find their failure intimately connected with the impracticable position of a manager directing the workers during the day, and being reprimanded or altogether superseded by a committee meeting of these same workers in the evening! Finally, there is the difficult question of the price to be put on the article when it passes to the consumer. Normally the price of a commodity must cover the cost of production, and this cost is, in the main, determined by the character of the machinery and process employed. Hence, if the organised workers are given the power to decide not only the number and qualifications of the persons to be employed but also the machinery and process to be used, they will, in fact, determine the price to be charged to the consumer—not always to the consumer’s advantage, or consistently with the interests of other sections of workers. [737]
To sum up, we expect to see the supreme authority in each industry or service vested, not in the workers as such, but in the community as a whole. Any National Board may well include representatives of the producers of the particular product or service, and also of its consumers, but they must be reinforced by the presence of representatives of the community organised as citizens, interested in the future as well as the present prosperity of the community. The management of industry, a complex function of many kinds and grades, will, as we see it, not be the sole sphere of either the one or the other set of partners, but is clearly destined to be distributed between them—the actual direction and decision being shared between the representatives of the Trade Union or Professional Society on the one hand, and those of the community in Co-operative Society, Municipality, or National Government on the other. And this recognition of the essential partnership in management between Associations of Producers and that Association of Consumers which is the community in one or other form, will, we suggest, take different shapes in different industries and services, in different countries, and at different periods; and, as we must add, will necessarily take time and thought to work out in detail. One thing is clear. There will be a steadily increasing recognition of a fundamental change in the status both of the directors and managers of industry (who are now usually either themselves capitalists, or hired for the service of capitalist interests), and of the technicians and manual workers. The directors and managers of industry, however they may be selected and paid, will become increasingly the officers of the community, serving not their own but the whole community’s interests. The technicians and manual workers will become ever less and less the personal servants of the directors and managers; and will be more and more enrolled, like them, in the service, not of any private employer, but of the community itself, whether the form be that of State or Municipality or Co-operative Society, or any combination or variant of these. To use the expression of the present General Secretary of the Miners’ Federation (Frank Hodges), manager, technician, and manual worker alike will become parties to a “social” as distinguished from a commercial contract. All alike, indeed, whatever may be the exact form of ownership of the instruments of production, will, so far as function is concerned, become increasingly partners in the performance of a common public service.