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.

Let us then start from the ordinary workers’ standpoint. It is fair, it is commonsense, it is characteristically practical. We can say to them with absolute fairness that what Labour is asking the country to do is to take a jump into the unknown, and for the existing industrial system with which we are familiar, and which is always capable of improvement—for that is an uncontrovertible fact proved by our past industrial history—to substitute a new industrial system of which we have no experience, of the practical operation and effects of which nothing whatever is ascertainable, a venture which is subject to risks so grave and possibilities so disastrous as to endanger the whole industrial and commercial prosperity of this country. We can then offer the workers an alternative scheme which, while reforming the fundamental defects that at present exist in our industrial system, will not alter its basic principles. Unless the psychology of the worker undergoes some cataclysmic change, what he will say is: “Take your scheme of reform, if it deals fairly with unemployment, my human status in industry and my share of the product, it will serve as a beginning.”