TOPICS OF THE DAY A MIRACLE OF CAPITALISM O UR readers
may recall statements which we have published recently about the surprisingly wide distribution of wealth in the United States. What has been happening there is indeed a miracle of capitalism. Wages are extremely. high. They even make some old- fashioned . British employers shudder. Yet in spite of , the high wages astonishingly cheap articles are as a matter, of fact produced. This is done partly by standardization and mass production and partly by a willingness, not to say enthusiasm, on the part of the manual worker in co-operating with the employer. By rapid production overhead charges are greatly reduced. It is a strange fact that the backward employer in .Great Britain has always overlooked this elementary fact. Take the case of a factory where payment is by results. If a particular workman was turning out articles very fast he, of course, earned wages in proportion. The old-fashioned employer then used to say : `` This will never do. Here's a man earning such high wages that if they become general they will ruin my business. Evidently I have fixed the rate too high. I must cut it down." Accordingly he did cut it down. He never considered the fact that the fast worker who produced in one day what the ordinary worker produced in, say, a day and a-half, was saving to the firm a man's share of half a day's charges for the upkeep and direction of the factory. When employers cut down the rate of pay under a system of payment by results the only practical retort the men could make was to work slowly in order not to appear to be earning too much. Small blame to them ! On this point at least there has been general enlightenment among American employers for a long time. The typical American employer will watch with pride his men arriving at the works in their own motor-cars. He will rub his hands with satisfaction as he reflects on this evidence of prosperity in his industry.
If things were managed in America as they are here the more the capitalist was pleased with his results the more the wage-earners would be displeased with the capitalist.. But it is not so ; in America both parties to the transaction grow rich together. The acceptance of capitalism in America on the scale at which it is now accepted is comparatively recent. If we were asked to point to the chief economic controversy of twenty years ago in America we should single out the enmity which seemed to be continually growing against the great Trusts and multiple companies. We were told that these gigantic vampires were sucking the blood out of the people. Since then the Trusts have been made harmless by a very simple method—not by any act of Congress (though that used to be spoken of as the only way of dealing with them), but by the growing readiness of the workers to invest in them and thus to become part owners of the Trusts. We suppose it is true that what may be called the low-salaried class in America has not profited, at all events in due proportion, by the great increase of American wealth during the past few years. But it. is plain that wealth is now distri- buted more widely than ever before and that though there are great inequalities no class is anywhere near the starvation line. All this has been done under capitalism. The revolution towards capitalism has been going. on almost invisibly. Nobody has consciously -led it., All_ that -has happened -is. that . the wage-earners have quietly decided to become capitalists themselves by investing in the industries in which they are employed. Believing as we do that we have much to learn from this we read with particular pleasure a letter in the Times of Monday from Colonel F. Vernon Willey, President of the British Federation of Industries. He has just returned from a visit to the United States and as a result lie pleads for co-operation between Capital and Labour here. He says frankly that " the docile acquiescence " of Labour in the wisdom of management in which it has no executive share and the confidence of Labour that its participation in prosperity is equit- able cannot be expected to continue. We quite agree. " Is it not up to employers," he asks, " to show more sympathy with the reasonable aspirations of Labour and more frankness about the managerial problem if collective and harmonious effort is to exist ? "
Those sentiments go to the root of the matter. Both sides must make their contribution, but we suggest once more that the miracle of capitalism in America is the best piece of evidence to be found in the world to-day of how the conditions of Labour can be improved. It might make one laugh if it were not enough to make one weep to think that our Trade Unions send deputations to Russia to find out how the New Jerusalem of industrial well-being can be created. There is no wealth in Russia. And in addition to low wages and poor living there is a constant dictation from the Soviet rulers, so that no man dares to do what he wants or to say what he pleases. Is that a good model for freedom-loving Englishmen ? Is there not an opening for a Labour leader here who would say, " Let's stop denouncing Capitalism for a year or two—at all events so long as the present Govern- ment lasts—and see what we can do to help ourselves on the American plan " ?
Labour might quite rightly and justifiably begin by asking the employers what concessions they would make The answer of the employers in our opinion ought to be that they would not touch wages except to try to increase them. They would next be compelled to point out that they could increase wages only by selling more goods. This would entail finding markets. But markets cannot be found so long as the price of the goods is too high. How can the price be cut down without wages being reduced ? Only by abandoning those restrictions and unreasonable practices of the Trade Unions which belong to the dark ages of the nine- teenth century and which have no rational place in the new way of life we are imagining. No man should be grudged high pay who earns it. We must get rid of the idea that high wages are bad in themselves, other- wise we shall be left behind in the industrial race. The American worker has passed beyond the.stage of regarding the money paid out in .wages as a limited fund which must be hoarded and directed by the Trade Unions if there is to be enough to go round. So far from objecting .to labour-saving machinery he has welcomed it. He may not be able precisely to explain the economic causes . which have enabled labour-saving machinery to bring him greater wealth, but he does at least acknowledge the fact that coincidently with the introduction of such machinery his wealth has enormously increased. . The American worker, again, does not waste his breath on denouncing inequalities so long as he is well enough off himself. Rather he regards great fortunes . as part of the adventure of life, as prizes which he himself may win if only he has the necessary ability or luck. Goldsmith when he- wrote in The Deserted Village of a national condition in which ". wealth accumulates and men decay," wrote good poetry but economic nonsense —unless indeed he was referring to the bringing of the land down to grass where a single dairy-farmer may enrich himself at the expense of the life of the village. In general, however, the words are nonsense. When wealth accumulates all men profit by it.
The reason why we believe in Mr. Baldwin is that he is a prophet of our new age.-. - He is surrounded by so-called snpporters—supporters who never support— Who continually urge him to retrace his steps, to clamp fetters by legislative measures upon the Trade Unions, and-to use his great Parliamentary majority for reaction all along the line. We sincerely believe that that way disaster lies. Colonel Vernon Willey is right. Willing co-operation is the only way. Not otherwise can the Unionist Party knock the ground from under the feet of Socialism. To-day Labour •is educated and it knows that the accepted economic policy of the nineteenth century with its pious,' though no doubt regretful, dis- regard for any man's sufferings so long as he was suffering under an economic " law " was a barren and callous creed. We canna return to it. If Mr. Macquisten persists in bringing forward his Bill to alter Trade Union customs by law we hope that Mr. Baldwin will give him the same answer that he gave in the first instance. We agree that many Trade Union Practices, including that Of the political leiry, are wrong, and we hold that the Act which put Trade Unions above the law should never have been introduced ; yet we believe that no reform is worth aiming at that does not come with the consent of the Trade Unions themselves. Imposed reforms will simply provoke class warfare on a grand scale. Fortunately there are signs within the Trade Unions that the need of reform is beginning to be recognized. Any- thing that make's willing co-operation between Capital and Labour more difficult is a bad policy for the Unionist Party. When Labour feels rightly or wrongly that it is being thwarted or cheated it has only got one answer ready to its hands; and that is SocialisM.
The BOrongh Elections, though they have brought no triumph to Socialiani, have brought it'increased strength. That' is h Sign of the times which every prudent man should ponder. We suggest no surrender of any Unionist principle: Rather we want an ideal Unionism which could and Should Mean the union of all classes. Every Man should be helped to beconie a capitalist by having investment or the acquisition of land made easy for him. We appeal to all Unionists to stop the sniping at Mr. Baldwin and to strengthen his hands in his noble attempt to forward" a great national policy and to perform in this country what is quite possible of achievement— a miracle of capitalism.
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