Development of British Industrial Thought

I

ONE of the most significant developments of the war in Great Britain was the growth of a new attitude toward industrial problems — an attitude which was far removed from that which obtained before the war. It is true that, in the generation before the outbreak of the world-war, there had been a gradual change in outlook upon industrial life and conditions. The public conscience had been aroused by the more obvious industrial evils, and action was taken to meet them: as for example in the Trade Boards Act of 1909 and the Act of 1911 establishing a system of unemployment insurance in certain industries; while the history of our factory and mines acts is a long story of a revolt against inhuman conditions. But the remedies of pre-war days appear ludicrously small compared with the much more generous programme which an increasing body of the general public now regards as essential to national well-being.

Employers themselves have been driven to take a much wider view of the state of industry and the conditions it offers to the workers; and as Sir Allan Smith, the Secretary of the Engineering Employers’ Federation told the Industrial Conference convened by the Prime Minister,¹ ‘Many of the employers are prepared to go very much further in the amelioration of the conditions under which you work, than some of you have any idea of.’ The general attitude of employers, however, is one of reform within the existing system. It would appear that they do not realize the extent to which public opinion as a whole has swung forward. The significant feature of the time is the rapid change which has taken place in the minds of people outside the industrial field, among those not directly engaged in the struggle between Capital and Labor.

But before proceeding to illustrate the growth of the new social conscience, we may perhaps consider the revised attitude of employers toward industrial problems. It is to be seen in the fuller recognition of trade-unions and in the acceptance of the right of organized labor to participate in the determination of industrial policy. When the British Government adopted the proposals of the Whitley Report, there were many employers who regarded them with a certain diffidence; and there has been more than one struggle over the scope of the problems which industrial councils should consider. The crux of the question was whether the functions of industrial councils should include the discussion of other than purely labor problems. Many employers maintain that commercial, financial, and similar questions are matters with which the workers are not concerned.

There are at the present time industrial councils in thirty-two industries.² In addition, the Ministry of Reconstruction took the initiative in establishing interim industrial reconstruction committees, composed equally of representatives of employers’ associations and of trade-unions, in those industries where, for one reason or another, industrial councils were not likely to be established in the very near future. There are now over thirty such committees.

The functions of industrial councils and interim industrial reconstruction committees vary, but in most cases they are sufficiently wide to cover the discussion of any problem affecting the particular industry. Broadly speaking, though there are, of course, numerous individual exceptions, employers regard industrial councils as an instrument compatible with the existing order, while trade-unionists conceive them as a means of education in the problems of industrial administration and an experiment in the direction of what is called ‘industrial control.’

Though there are few, if any, cases on record of employers’ organizations spontaneously offering improved conditions to workmen in the post-war period, yet since the armistice agreements have been negotiated between employers’ associations and tradeunions, or by industrial councils, which provide wages and conditions far superior to those current before the war; and these agreements have for the most part been carried through without a stoppage of work. It may be concluded, therefore, that employers are prepared to accept new and higher standards, and realize the futility of attempting to return to standards which were operative in pre-war days.

Groups of employers have formulated the conditions under which industry should in the future be conducted. The employers participating in discussions of this kind will naturally tend to be the most public-spirited and those who realize most keenly their responsibilities. The views laid down by them, therefore, are perhaps not representative of the general body of employers. Nevertheless, they indicate the extent to which the ferment is working, even among the employing classes.

In April, 1918, a conference of employers was held, chiefly members of the Society of Friends. The proceedings of the Conference have been published in a volume, under the title of Quakerism and Industry. As in the case of the Archbishops’ Committee, to whose report reference is made later, the religious element enters, and therefore the views expressed do not rest merely upon economic considerations. What is important is, that a body of employers deliberately met together in an attempt to square their economic actions with their religious professions.

Their report ‘is an attempt to see how the Christian conception of the divine worth of all life affects our modern industrial life, and in particular the relationship between employers and employed.’ Though it was not found possible to discuss any fundamental reorganization of society’s economic arrangements, the Quaker employers recognize that they should work toward the alteration of the industrial system in so far as they regard it as inconsistent with the principles of their religion; but, ‘in the meantime,’ they say, ‘we cannot afford to neglect the urgent needs and the outstanding opportunities which confront us in our own factories.’ The report pays attention to questions of wages, security of employment, and working conditions. Of particular interest, however, are the views of the conference concerning the status of the workers and the appropriation of surplus profits, for it is on these questions more particularly that the change in industrial thought is most significant.

The portion of the report dealing with the status of the workers states clearly and succinctly what may be called the new view of industrial relationships. ‘The worker asks to-day for more than an improvement in his economic position. He claims from employers and managers the clear recognition of his rights as a person. The justice of this claim our religion compels us to admit. We cannot regard human beings as if they were merely so many units of brain-power, so many of nervous or muscular energy. We must coöperate with them, and treat them as we ourselves should wish to be treated. This position involves the surrender by capital of its supposed right to dictate to labor the conditions under which work shall be carried on. It involves more: the frank avowal that all matters affecting the workers should be decided in consultation with them, when once they are recognized as members of an allembracing human brotherhood.’

How are these principles to be applied? The reply of the Quaker employers is that ‘with the financial and commercial aspects of the business and the general policy connected therewith the worker is not at present so directly concerned, although indirectly they affect him vitally. But in the industrial policy of the business he is directly and continuously interested, and he is capable of helping to determine it.’ The report accordingly suggests that ‘as an initial step, any existing Shop Committees, such as that of the Shop Stewards in engineering works, should be formally recognized. But, in the absence of such bodies, we recommend the establishment of Committees or Works Councils, in which the chosen representatives of the workers should discuss matters which concern them, first alone, but secondly, and at frequent intervals, with the management. In this connection it would be essential to secure the coöperation of TradeUnions, and make it certain that their position would not be prejudiced by the existence of such Councils.’

There might be referred to these Councils ‘questions affecting the individual workers, such as wages, rates, discipline, and shop-rules, the engagement and dismissal of workers, the time and duration of factory holidays, adjustments of working hours and number of staff to meet shortage of work, health, canteen, and other social work. It is fully realized that experience on Works Councils may and should train the members for greater participation in the control of the business, and enable them ultimately to take part in the commercial and financial administration.’ Questions affecting the whole industry should be settled on the same principles of consultation and coöperation, through the National and District Industrial Councils recommended by the Whitley Report.

On the question of profits the conference suggests ‘ the desirability of giving full information as to wages, average costs, and average profits in the industry, as a basis for effectual collective bargaining, and as a recognition of the public character of our industrial functions.’ The appropriation of surplus profits was discussed; and by surplus profits the conference meant any surplus which may remain over when labor has received adequate wages, and managers and directors have been remunerated according to the market-value of their services; when capital has received the rate of interest necessary to ensure an adequate supply, having regard to the risk involved; and when necessary reserves have been made for the security and development of the business.

‘We cannot believe,’ say the Quaker employers, ‘that either the proprietors or the workers are entitled to the whole of the surplus profits of a business, though they might reasonably ask for such a share as would give them an interest in its financial prosperity. . . . The consumer should never be exploited. The price charged to him should always be reasonable, having in view the average cost of production and distribution; and the State should be asked to interfere to protect his interests, wheu they are threatened by monopoly. We believe that in future the community will claim a greater part of surplus profits in the form of taxation, and we believe that such a development would be right.’

During the war a number of conferences of employers took place, as well as joint conferences of employers and workers. With the latter we are not specially concerned. Of the former one of the most interesting was a meeting of pottery manufacturers extending over a week-end. Many suggestions were put forward, among them some of considerable importance. The pottery manufacturers urged the ‘full recognition of and coöperation with the operatives’ unions,’ and refer to two points emphasized in the report outlined above. In the first place, the conference suggested that ‘through joint committees and conferences of a representative character, it would be possible to meet the growing demand of the operatives for a share in the control of industry, since in this way they could take an equal part in settling the conditions and imposing the common rules under which the industry would be carried on.’ In the second place, it is laid down that ‘employers must treat the operatives as men, not merely as hands; they must respect and try to understand their point of view, and suppress all domineering or bullying by members of the management.’

II

Perhaps more significant are the expressions of opinion coming from nonindustrial sources. One of the most striking statements on industrial problems is the outcome of the National Mission of Repentance and Hope, conducted by the Church of England. One of its activities was the appointment, in 1917, of five committees. It is with the fifth only that we are concerned. This was a strong committee of clerics and laymen, men and women, industrialists and non-industrialists, set up by the archbishops to consider Christianity and industrial problems. Its report, moderate in its language and dignified in tone, supplies an effective criticism of the modern economic system, from the point of view of the Church. Its acute analysis of the evils of our industrial economy, and its courageous application of the principles of Christian teaching, must make a deep impression upon those who read the report. The industrial system, says the committee, is ‘defective, not merely in the sense that industrial relations are embittered by faults of temper and lack of generosity on the part of the employer, of the employed, and of the general public alike, but because the system itself makes it exceedingly difficult to carry into practice the principles of Christianity. Its faults are not the accidental or occasional maladjustments of a social order, the general spirit and tendency of which can be accepted as satisfactory by Christians. They are the expressions of certain deficiencies deeply rooted in the nature of that order itself. They appear in one form or another, not in this place or in that, but in every country which has been touched by the spirit, and has adopted the institutions, of modern industrialism. To remove them it is necessary to be prepared for such changes as will remove the deeper causes of which they are the result.’

The committee combats the view that takes for granted the general economic arrangements of society, and would confine attention to ‘supplementing incidental shortcomings and relieving industrial distress. The solution of the industrial problem involves . . . not merely the improvement of individuals, but a fundamental change in the spirit of the industrial system itself.’ ‘What is on trial,’ says the committee in another section of its report, ‘is, not only the shortcomings of individuals, but also the quality of a system.’

The Archbishops’ Committee, when it comes to consider the changes that are necessary, finds them in the acceptance of two principles. ‘The first is, that industry is a social function, and is carried on to serve the community. The second is, that the relations between the different parties engaged in it should be determined by considerations of right and justice, not merely by economic expediency or economic power.’ The industrial system should, in short, ‘be social in purpose and cooperative in spirit.’

Expressed in terms of actual reforms, this means the establishment of a living wage, reduction of the hours of labor, prevention of and provision for unemployment, and the further protection of children and young persons. But though these proposals would prevent the degradation of the workers, they would not realize the ideals of the Archbishops’ Committee. The reforms suggested might be adopted and yet leave the main framework of the industrial system intact. The test of the sincerity of the Committee is to be found in its further proposals, which strike at the roots of the existing economic organization of society.

In the first place, industry is dominated by the motive of economic self-interest. It is admitted that the increase of productive power which is the most conspicuous achievement of the past century and a half has taken place largely under the stimulus of private gain; though it is equally true that some of the most important economic improvements have been the work of scientists or inventors whose interest in their financial result was small. ‘But,’ it is argued in the report, ‘while it is evident that the economic stimulus of personal profit is one cause which has elicited the increased production of wealth required by the community, it is also evident that it is not by itself a guaranty that, when the interests of any group of producers are at variance with those of the public, the greater interest will be preferred to the less. Economic motives are good servants, but bad masters; and the danger of a society which exalts them unduly is that it may evoke a spirit which it cannot control.’ ‘What alternative is there,’ asks the committee, ‘to the struggle of groups for riches and advancement except their common subordination to the principle of public service?’

Later in its report, the committee remarks that ‘the principle of coöperative service has to contend with a rival principle, which too often overpowers it. That rival is the idea that the end of industry is the personal profit of those by whom it is carried on; that the measure of its success is the financial return which it yields them; and that, provided they do not infringe the law, any method of organization or economic policy, by which that return is increased, possesses, at any rate, a primafacie justification.’

The remedy is to be found, the committee urges, in a new attitude toward profits. There has been in England during the war a strong agitation against ‘profiteering,’ and the suspicion in the public mind against the profit-maker has been deepened by the elusive nature of profits and the difficulty of ascertaining the truth about them, The committee feels it important that ‘steps should be taken by the Board of Trade, or by some other department concerned with industry, to place at the disposal of the public the fullest information which it can obtain with regard to the profits of different industries. In particular, if in future, as seems not impossible, the State should encourage the formation of combinations, it would be reasonable . . . to require that their profits should be checked by an extension of the costing system adopted during the war, and by a public audit of their accounts.’ But this in itself is not sufficient. There is a ‘principle for which Christian men and women should stand’ — the principle that ‘there is no moral justification for profits which exceed the amount needed to pay adequate salaries to the management, a fair rate of interest on the capital invested, and such reserves as are needed to ensure and maintain the highest efficiency of production and the development and growth of the industry.’ It clearly follows from this that, ‘since industry is a public function, no persons are entitled to an income for which no service is rendered; and that it is the duty of those engaged in it to offer the community the best service technically possible at the lowest price compatible with adequate payment to those who provide it and with the growth and extension of the industry itself.’ The proposal of the committee is that, after the necessary charges upon industry have been met, ‘any surplus should be applied to the benefit of the whole community.’

The second outstanding feature of the report is its attitude with regard to the workers. Attention is called, not merely to low wages, insecurity of employment, long hours, and evil industrial conditions, but to the ‘unjustifiable position of subordination in which many wage-earners are placed by the organization of modern industry, except in so far as it has been modified by law or by voluntary combination.’

‘What we have in mind,’ says the committee, ‘is the position of economic inferiority in which, unless he has emancipated himself from it by concerted action with his fellows, the worker is liable to be placed by his dependence for his livelihood upon an undertaking whose general policy and organization he is powerless, as an individual, to control, or sometimes even to influence.

. . . We think that the common description of workers as “hands” summarizes aptly an aspect of their economic position which is not the less degrading because it has hitherto met with too general acquiescence. The suggestion is that the worker is an accessory to industry, rather than a partner in it; that his physical strength and manual dexterity are required to perform its operations, but that he has neither a mind which requires to be consulted as to its policy nor a personality which demands consideration; that he is a hired servant whose duty ends with implicit obedience, not a citizen of industry whose virtue is in initiative and intelligence.’

This is the human as opposed to the economic view of the worker. As the committee says, ‘large numbers of working-people are at the present time employed on terms which suggest that they are means to the production of wealth rather than themselves the human end for whom wealth is produced. They too often have cause to feel that they are directed by an industrial autocracy, which is sometimes, indeed, both kindly and capable, but which is repugnant to them precisely because it is an autocracy, and because, in so far as it controls their means of livelihood, it also, not the less certainly because often unconsciously, controls their lives.’

What is the line of advance? The answer of the committee is that ‘Christians cannot acquiesce in the undue subordination of human beings to the exigencies of any mechanical or economic system.’ Some way must be found of determining industrial policy and conditions in consultation with the work-people. The committee therefore proposes that ‘it should be the normal practice in organized trades for representatives of employers and workers to confer at regular intervals, not merely upon wages and working conditions, but upon all such questions affecting the trade as may be suitable for common discussion.’ Moreover, ‘representatives of the workers in different workshops should be normally and permanently associated with the management in matters affecting their livelihood and comfort, and the welfare of the business, such as the fixing and alteration of piece-rates, the improvement of processes and machinery, and the settlement of the terms upon which they are to be introduced, workshop discipline, and the establishment of the maximum possible security of employment.’

III

Such are the pronouncements of a committee appointed by the Archbishops of the Church of England. We may now turn to a series of proposals emanating from a different source. The Committee of the Ministry of Reconstruction on Adult Education,³ in its first report, deals with industrial and social conditions in relation to adult education. The committee points out that it ‘found it impossible to consider adult education apart from those social and industrial conditions which determine to a large degree the educational opportunities, the interests, and the general outlook of men and women.’

It recommends measures which would ensure a reasonable leisure to workpeople, by a reduction in the working day, the limitation of overtime, and the establishment of a statutory annual holiday with pay. It urges that the insecurity of the worker’s life should be remedied by steps to deal with unemployment. It desires to see in operation conditions which will reduce to a minimum monotonous work, and heavy and exhausting work.

The Adult Education Committee adopts much the same attitude toward the fundamental problems of industry as the Archbishops’ Committee, whose views have already been set forth. The former refers to ‘the long evolution which has subjected man to mechanism. It is true that men control machines; but those who control are few as compared with the many who are controlled. . . . There can be no doubt that the degradation of human beings to the position of mere “hands,” and the treatment of labor as a commodity to be bought and sold, has created a revolt in the minds of a large section of the community. The conditions of industrial life have only too often outraged human personality.’

The committee then proceeds to an analysis of the revolt referred to above. ‘There is undoubtedly a growing feeling of dissatisfaction on the part of work-people with what they regard as their position of inferiority. This inferiority, it is urged, is due to a forced submission to undesirable conditions, to the subjection of the worker, both to the machine, and to the will of others who are vested with an authority in which the workers have no share. The new currents of thought, which during the past few years have increasingly agitated Labor, are a sign of a deepseated reaction against the dehumanizing influences surrounding industrial life. One of the most insistent demands made by the rising generation of workers is for what is called “industrial control.” The view which they hold is that the subordination of the worker to an industrial policy and to regulations for which they are not themselves directly responsible is unjustifiable, because it is inconsistent with the rights and obligations which ought to be inherent in membership of any organized group in society. They believe that industrial democracy is as essential to individual freedom as political democracy. . . . From the point of view of both the individual and the community, it is desirable that the new claims should somehow be met.’ The guiding principle of the committee is that ‘industry exists for man, not man for industry.’ From this it follows that ‘material progress is of value only in so far as it assists toward the realization of human possibilities. Industry and commerce, and the social conditions which are in a large degree dependent upon them, must in our opinion be regarded from this point of view, and if they cramp the life of the individual, no amount of economic argument will suffice to justify them.’

The committee boldly admits that it has taken up its stand ‘on moral grounds,’ and goes on to say: ‘We do not think, however, that there is of necessity a fundamental antagonism between ethics and economics. Adequate pay, reasonable hours of labor, the supersession of heavy, degrading, and monotonous forms of manual labor by machinery and improved processes, the provision of holidays, the introduction of human relations and of the social motive into industry, healthy homes and a cheerful environment — these are the indispensable conditions of economic efficiency; they are also among the elementary rights to which the citizen, as such, and in virtue of his responsibilities, is entitled.’ The committee pleads that ‘adult education and, indeed, good citizenship, depend in no small degree . . . upon a new orientation of our industrial outlook and activities.’

Running through these various reports we find two interwoven threads — regard for the personality of the worker and the social motive in industry. Prior to the war, these views were already stirring in the minds of the younger workmen and their intellectual sympathizers. There was a movement away from the consideration of the interests of the consumer, and toward the vindication of the importance of the producer; or, to use labels which may, however, be misinterpreted, from collectivism toward syndicalism and guildsocialism, from the consideration of questions of ownership and the external regulation of industry by the State toward the sympathetic discussion of the internal government and administration of industry. The articulate workers were arguing in moral rather than economic terms.

During the war these new currents of thought have made very remarkable headway in the British Labor movement; but what is particularly significant is the trend of thought in these directions among the general public. The conception of industry as a public service governed by a social motive, which is emphasized in the reports already quoted, has gradually worked its way into the public mind. The human rights and needs of the worker have been fully recognized by the people of Great Britain. These changes in outlook have taken place with a swiftness and thoroughness which few people would have dared to expect before the war.

The new attitude may be illustrated by reference to the Coal Industry Commission. The Miners’ Federation of Great Britain formulated a series of demands, including the nationalization of coal mines, the reduction of the hours of labor from eight to six per day, and a thirty per cent increase of wages. A Royal Commission was set up by the government, under the chairmanship of Mr. Justice Sankey. It consisted of three miners’ representatives and three mine-owners’ representatives, together with six other members, three of whom represented employers’ interests and three labor interests. The Commission was instructed to prepare an interim report by March 20. The six Labor men signed a report of their own, upholding the claims of the Miners’ Federation; the three mine-owners signed a cautious report. The Chairman and the three employers produced a report which the Government has accepted. It is to this document that I wish to refer.

It is to be borne in mind that the Chairman’s colleagues were representative of the employing classes. The report recommended that the working day underground should be shortened by an hour from July 16, 1919, and, subject to the economic position of the industry at the end of 1920, by a further hour from July 13, 1921; and also that wages should be increased by two shillings per shift or per day worked (and one shilling in the case of workers under sixteen years of age). The latter proposal would mean the distribution of an additional sum of £30,000,000 per annum among colliery workers. The Chairman and his colleagues are emphatic in the view that ‘even upon the evidence already given, the present system of ownership and working in the coal industry stands condemned, and some other system must be substituted for it.’ While they do not pronounce, in their interim report, upon what lines the system should be established, they make a declaration in harmony with the views to which attention has been drawn above when they say, ‘We are prepared, however, to report now, that it is in the interests of the country that the colliery worker shall in the future have an effective voice in the direction of the mine. For a generation the colliery worker has been educated socially and technically. The result is a great national asset. Why not use it?’

Those words strike the death-knell of the old industrial system, and have touched a responsive chord in the heart of the British people. The public is prepared to elevate and humanize the conditions under which miners work. The appeal of the Miners’ Federation was based on moral grounds; and the appeal has been answered. Moreover, the worker’s desire to take an active part in the direction and control of the mines is to be satisfied.

The net result of the transformation in the public outlook upon industrial policy has been to establish new landmarks. In place of the insistence on the motive of private gain there is a new conception of industry, as a great public service, carried on in the public interest. Instead of neglect of the worker, and a tacit admission of his inferiority, there is a recognition of the rightful claims of the personality of the worker in industry and of the justice of his plea for ‘industrial democracy.’

These ideas will not be translated into action immediately. The shell of the old system will retain its outward appearance, at any rate in many industries. Few people realize the implications of the moral and social impulse which has uprooted the old economic traditions. But one thing is certain: when the historian of the future surveys the period through which we are now living, he will proclaim it as an epoch of revolution wherein were laid the foundations of a new moral and social order.