National guilds; an inquiry into the wage system and the way out

LIBRARY

UNIVERSITY OF CALIFORNIA

RIVERSIDE

folllLrtL

Uaivtaity

NATIONAL GUILDS

NATIONAL
GU ILDS

AN INQUIRY INTO
THE WAGE SYSTEM
AND THE WAY OUT

EDITED BY A. R. ORAGE

LONDON
BELL & SONS LTD.
1914

Hpk47?

PREFACE

The substance of the following chapters appeared
serially in The New Age during the years 1912-13.
But for the origin of the idea of the Guilds as applied to
modern industry an earlier date would have to be sought.
Both the present Editor of The New Age in an article in
the Contemporary Review of 1906, and Mr. A. J. Penty
in his work on The Restoration of the Guild System of the
same year, put forward the suggestion that the Guild
organisation was indispensable to higher industry at any
rate. The tide of Collectivism, however, was then and
for some years afterwards too powerful to admit of even
the smallest counter-current. Some experience of Col-
lectivism in action and of political methods as distinct
from economic methods was necessary before the mind of
the Labour movement could be turned in another direc-
tion. This was brought about by the impulse known as
Syndicalism which, in essence, is the demand of Labour to
control its industry. At the same time that Syndicalism
came to be discussed, a revival of trade-union activity
took place, and on such a scale that it seemed to the
present writers that at last the trade unions were now
finally determined to form a permanent element in
society. In short, every speculation concerning the
future of industry was henceforward bound to take into
account the trade unions as well as the State. Reflecting
upon this in the light of a considerable experience, both
theoretical and practical, the writers were driven to
the conclusions herein stated. In no respect, they

vi PREFACE

believe, have they written " without their book " or in
the spirit of Utopianism. The analysis of the nature of
wages, here made, for the first time, the foundation of
a critique of labour economics, leads inevitably to the
conclusion that by no manner of means can wages gener-
ally be raised while the wage system continues. There
follows from that the necessity, in the minds of real
reformers at any rate, to consider the means by which
the wage system itself may be abolished, in the interests,
in the first instance, of the proletariat, but no less, though
secondarily, in the interests of society and of civilisation.
The indispensability of the State, upon which the present
writers lay stress the more that the Syndicalists deny it,
is affirmed and maintained at the same time that the
right of Labour to control its production is throughout
assumed. In the conception of National Industrial
Guilds the writers believe that the future will find the
solution of the problems now vexing one-twentieth of our
population and ruining the remainder.

CONTENTS

PART I

THE WAGE SYSTEM

I. Emancipation and the Wage System .
II. Labourism and the Wage System

III. The Great Industry and the Wage System

IV. State Socialism and the Wage System
V. International Economy and the Wage System

VI. Unemployment and the Wage System
VII. Democracy and the Wage System
VIII. Politics and the Wage System
IX. The Economics of the Wage System .
X. The Transition from the Wage System

I.
X-II.
\ll.

IV.

V.

VI.

VII.

PAGE

I

7

12

19

27

34
42
6o
73
99

PART II

NATIONAL GUILDS

The Moral Foundations of Existing Society

A Survey of the Material Factors .

An Outline of the Guild

A Working Model

Industries Susceptible of Guild Organisation 152

Independent Occupations . . . 161

The Trust or the Guild . . . 170

vii

IO9
122
132
141

Vlll

CONTENTS

VIII. The Finance of the Guild
IX. The Inventor and the Guild .
X. Brains and the Guild .
XI. Motive under the Guild
XII. The Bureaucrat and the Guild

XIII. Inter-Guild Relations .

XIV. The Approach to the Guild
XV. Agriculture and the Guilds .

XVI. The State and the Guilds

XVII. Education and the Guilds

XVIII. Conclusion

Appendix I. — The Bondage of Wagery

Appendix II. — Towards a National Railway
Guild ....

Appendix III. — Miscellaneous Notes .

Index .....

PAGE

178
185

193
209
217
226

235
246

255
264
272
287

301
349
3^7

NATIONAL GUILDS

PART I

THE WAGE SYSTEM

I

EMANCIPATION AND THE WAGE SYSTEM

The more meliorist politics be tested the more certain
it becomes that emancipation cannot be effected by
patchwork. For over eighty years Great Britain, by
parliamentary stitching and patching, has contrived to
maintain social order. The worker has been docile
because he believed in gradual reform, and because it
was promised him and in part secured to him. Had
he not believed in gradual reform — the broadening
down from precedent to precedent — all the promises in
the world would not have kept him in bondage. It is
certain, however, that he will continue docile, until
he grasps the true meaning of emancipation. He has
lived patiently and worked ardently for something that
was called emancipation — a good platform word — and
for three generations he has truly believed that another
decade would release him from his life of degrading
toil. " The day of your emancipation is nigh," is a

2 NATIONAL GUILDS

cry that has gone out to the wearied workman for thou-
sands of years. It has ever been Labour's Messianic
mirage. To-day at Socialist meetings the audiences
still sing fervently Kingsley's hymn, " The Day of the
Lord is at hand." The delusion is carefully fostered
by political Socialists of every school. Not that they
deliberately delude their followers— that would be bad
in all conscience— but, worse, they delude themselves.
At least that is the only reasonable inference, for it is
inconceivable that Socialist politicians could be so
diabolically cruel as knowingly to deceive their faithful
followers on the crucial facts of existence. There is also
another explanation : Is it possible that they do not
know what emancipation really is ?

Whatever else it may mean, it is certain that eman-
cipation involves a new epoch, new not only in social
and economic structure but new spiritually; a new
birth in which men are not only born again, but, as
Mrs. Poyser remarked, " born different." Now it is
self-evident that social reformers and the most hide-
bound Conservatives have this one thing in common :
neither desires nor dreams of a new epoch. The Con-
servative says : " The present is good enough " ; the
social reformer says : "Not quite good enough ; let
me improve it so that it may continue." It is on this
vital issue that the revolutionist differentiates himself
from both. But does the revolutionist in his turn
really understand the full meaning of emancipation?
It is certainly curious that revolutionary literature
throws very little light upon it.

What, then, is the essence of emancipation ? The
answer is simple : the rescue from oppressed or evil
living and the inauguration of a healthy method of life.
The application of this broad definition depends upon
our understanding and appreciation of the fundamentals
upon which the existing social structure is based. It

EMANCIPATION AND THE WAGE SYSTEM 3

will hardly be denied that the foundation of society is
labour. It follows, if the conditions that govern
labour are evil and oppressive, that real emancipation
consists in replacing those conditions by a new scheme
of life. It is an appalling thought, yet not without
justification, that the primary condition of labour — life
for a subsistence wage — marks no advance upon previous
epochs. Apart from purely superficial effects, it may with
truth be contended that, fundamentally, wage serfdom
(seldom if ever more than a month from starvation) is
in no way an advance upon chattel slavery. Changes
there have been, bringing in their train social and spiritual
modifications, but in essence our wage-paid population
is but helotry clipped of some of its more savage features.
In what respect do we show any real advance upon the
age of Pericles ? Slave labour has given way in part to
machinery and in part to the wage system. In that great
period an occasional slave absorbed the culture of his
masters, and so it is to-day. But in the main the labour-
ing populations of both cycles present the same social
and psychological phenomena. Political emancipation
leaves the worker quite as much at the final disposition
of the employer as was the Greek helot. There is one
vivid contrast : The slave-owner brutally and without
any shame claimed the power of life and death over his
slave ; to-day the same power is cloaked in the hypo-
critical observance of humanitarian laws that effectu-
ally mask brutal powers equally brutally exercised.
Then the revolting or incompetent slave was done to
death ; to-day he is starved to death — a death that is
scientifically reduced to the lingering existence of care-
fully graded poverty and destitution. The one signifi-
cant fact that emerged from both the Majority and
Minority Reports of the Poor Law Commission was
the nicely defined discrimination between poverty and
destitution. We frankly admit that we had not previ-

4 NATIONAL GUILDS

ously recognised any difference between these two con-
ditions of social death. In the final analysis, then, we
discover that chattel slavery and wage serfdom have
the same economic effect, the only difference discoverable
being that the modern political machine has enacted
certain laws which are merely sumptuary in their effect,
although passed in the sacred name of " emancipation."
Now, as in ancient days, wealth is absorbed by the
privileged possessor out of the labour of the producer
working as nearly as possible at a subsistence wage.
Oddly enough, too, these sumptuary laws (that were
supposed to favour the economic interests of the worker)
have enormously strengthened the social power of the
possessors.

The conclusion is obvious— there can be no emancipa-
tion save only from the wage system. The way out
is to smash wages. It is a curious commentary upon
Socialist propaganda in Great Britain that we seldom
hear a word against the wage system as a system of
wages. The plea is for higher wages, shorter hours,
or what not, but never for the complete abolition of
wages as such. The result is that the younger genera-
tion of Socialists never learn that this was once a salient
feature of the Socialist crusade : they do not learn it
because the older Socialists have forgotten it. It is to
the credit of the old Social Democratic Federation
that they always thoroughly understood that the real
enemy was the wage system. They realised that wages
were the mark of a class, and that the class struggle
{lutte de classe, not guerre de classe) meant first
and last the complete destruction of the economic
bondage implied in the wage system. Yet never
was the need greater than to-day to press forward a
conscious attack upon it. Parliamentary legislation is
based upon the continuance of the wage system. The
Insurance Act, the Eight Hours' Day, the Shops Act—

EMANCIPATION AND THE WAGE SYSTEM 5

all that body of factory rules and regulations — they all
postulate wages as the basis of industrial life. Not only
so, but the cost and burden of this mass of legislation
fall upon labour, whilst the economic benefits steadily
filter into the pockets of the exploiters. It is the queerest
topsy-turvy imaginable. We have described these laws
as essentially sumptuary. Nominally imposed in the
interests of the workman, to dignify and sweeten his life,
in reality they are a concession to the queasy stomach
of a more fastidious generation that hates to witness
brutality but greedily battens upon its profits. It does
not like either to kill the animal or see it killed, nor will
it do the cooking ; it is content to see the meat upon the
table in sumptuous surroundings. And it has discovered
that the more it regulates every process from the killing
to the eating, the better is the flavour of the viands.

How, then, is this evil and oppressive wage system
to be destroyed ? Assuredly the first step is for labour
to realise it as the enemy, and to determine never to
deviate from the work of its destruction. It is pathetic
and tragical how easily labour does deviate on the
slightest pretext. Labour's adventure into politics
during the last decade has been an exhausting deviation
and an appalling waste of time and nervous energy.
The second step is to realise that an economic struggle
must necessarily be waged in the industrial sphere.
Next, labour must realise that its emancipation can only
become possible when it has absorbed every shilling of
surplus value. The way to do this is by tireless and
unrelenting inroads upon rent and interest. The daily
and weekly Socialist bulletins should tell, not of some
trivial success at a municipal election, or of some unusu-
ally flowery flow of poppycock in Parliament, but of
wages so raised that rent-mongers and profiteers find
their incomes pro tanto reduced. And there is no other
way. Profits are in substance nothing but rent. Rent,

6 NATIONAL GUILDS

whatever its form, reduced to its elements, is nothing
more and nothing less than the economic power which
one man exercises more or less oppressively over another
man or body of men. Destroy the power to exact rent
and ipso facto rent is destroyed. This is the only way of
salvation, of emancipation — the only possible release
from bondage. Coventry Patmore once satirised the
German Emperor's dispatches from the seat of war :

" Ten thousand Frenchmen sent below,
Praise God from Whom all blessings flow."

In like manner the daily dispatch from the Socialist
seat of war should be :

-- A million profits sent below,
Praise God from Whom all blessings flow."

Recent events have proved that a direct attack upon
rent and interest, intelligently directed, and undisturbed
by the clutterings and flutterings of the politicians, is
not only possible but feasible. The transport workers
kept the politicians at arm's length and won handsomely.
The railway men succumbed to the blandishments of the
politically-minded Labour Party and lost. The miners
almost won but were finally defeated by their politicians.
Further, they fought for a minimum wage, whereas the
true line of attack is to fight for an ever-increasing
maximum. But these were after all mere reconnaissances
in force ; lessons have been learnt and will, let us hope,
be remembered. The great outstanding lesson, however,
is this : the way of emancipation is over the rotting
remains of the wage system.

II

LABOURISM AND THE WAGE SYSTEM

One of the minor poets tells us that grey-bearded man
gropes for the old accustomed stone, and weeps to find
it overthrown. This ingrained reverence for the accom-
plished fact, even when it is an accomplished nuisance,
is as evident amongst Socialists as amongst other folk.
The concept of a mild change speedily grows into a
sacred orthodoxy, and any deviation from it amongst
the faithful is visited with the condign punishment re-
served for heretics. And this is precisely the posture of
the British Socialist movement to-day. As we see it
now, so it began some twenty years ago. The inaugura-
tion of the Independent Labour Party marked a distinct
departure from the previous revolutionary, doctrinaire
and unbending school of social democracy. It was the
child of the marriage between the Fabian intellectuals
and the provincial labourists. The Manningham strike
caused its premature birth ; the coal strike marks its
virtual death. A little examination of its story (it has
no history) will show that it is merely an episode in the
four thousand years' struggle between labour and capital,
between mastery and servitude. Its principles were
specifically and avowedly meiiorist ; it disclaimed any-
thing revolutionary. It derived from the Fabian Essays
and it has never grown beyond them. The I.L.P. to-
day is precisely where it was when it started. The world
movement has swept past it, almost unconscious of it

8 NATIONAL GUILDS

and assuredly unaffected by it. The lesson to be learnt
from it is the poor negative one of what to avoid.

Let us briefly sketch the line of thought that brought
it into being. In 1887 were published the Fabian Essays.
In their own genre these essays remain unapproached
in clearness of thought and expression. Their authors
were unusually clever both in the gentle art of log-rolling
and the more sinister art of wire-pulling. They log-rolled
themselves into fame, prominence, or fortune, and (to
their own dismay) they wire-pulled the I.L.P. into
existence. It is curious to reflect that the dominant
idea at that time was the possibility and the method of
transforming the Liberal Party into a Socialist Party.
The London Fabians thought it could be done by a little
clever hocus-pocus manipulated by Mr. Webb ; the
provincial Fabians were not convinced of this, and started
the I.L.P. The London Fabians were " permeators " ;
the provincial Fabians were " independents." But on
fundamentals both sides were agreed. The provincial
men, inspired by Mr. Keir Hardie, having declared war
upon the Liberals, were thrown back upon the Labourism
of Trade Unions ; but, inspired by Messrs. Webb and
Shaw, they preached the doctrines of the Fabian Essays.
Indeed, they had nothing else to go upon, for the Marxian
economics and literature were unknown to them. We
have heard most of the I.L.P. leaders, at one time or
another, proudly disclaim all knowledge of Marx. What,
then, were the underlying principles of this hybrid
organisation ? Mainly this : that the State was econo-
mically a better capitalist than the private employer and
far more humane. (We have since discovered that both
propositions are at least arguable.) The most important
inference from these principles is this : That they postulate
the continuance of the wage system. In practice it was
found that the way to proceed was to develop municipal-
ism — to improve but not to destroy the wage system ;

LABOURISM AND THE WAGE SYSTEM 9

then to acquire political power, with the avowed purpose
of humanising but not destroying the wage system.
Always was the wage system accepted as inevitable —
the wage system of a universal civil service, with its
elaborate code of rights, privileges and pensions. Better
wages, better wage conditions — the I.L.P. concept never
went beyond an army of wage-paid workers. So deeply
ingrained was this idea of wages (the necessary corollary
of both private and State capitalism) that Mr. Keir
Hardie and his I.L.P. colleagues have always contended
that the class struggle is extraneous to the Socialist
movement, and that it is heretical to base Socialist
action upon it. Why talk of a class struggle when the
object cf their peculiar brand of Socialism was merely
to transform the whole community into a completely
regimented army of wage-earners ? Besides — a practical
consideration — nothing should be said or done to em-
barrass their excellent and well-intentioned middle-class
supporters.

Thus, by refraining from attacking the wage system,
which is the foundation upon which rises the whole
structure of Capitalism, the I.L.P. became of necessity
non-revolutionary and, in consequence, opportunist.
It has been compelled to play the game according to
the political code, whilst real wages have either relatively
or actually declined and wage exploitation has been
aggrandised. This is obviously not the advance but the
negation and the defeat of Socialism. We are content
to let the dead past bury itself if only the political
Socialists will open their eyes to the realities of the
present situation. But are there any indications of the
blind miraculously recovering their sight ? For example,
what is to be said of Mr. Philip Snowden denouncing
Syndicalism because it abrogates authority ? We dissent
from Syndicalism, but the melancholy spectacle of a
prominent Socialist-Labourist, whose inept policy has

io NATIONAL GUILDS

actually called the idea if not the thing itself into exist-
ence, almost forces us into the arms of the Syndicalists.
But Mr. Snowden and all his tribe are par excellence
State Socialists, and, accordingly, the disruption of the
wage system is to them anathema. One thing is certain :
if the Snowdens do not realise that the wage system is
the basis of capitalism, the capitalists do, and are on the
qui vive. The most cursory glance through their trade
and political organs leaves no doubt upon that point.
Why are they so nervous lest the wage system should
be smashed ? For precisely Mr. Snowden 's reason :
because they diligently seek, at all costs, to maintain
authority. What is the sovereign virtue of this autho-
rity ? The power to exact rent and interest. Every-
thing else is leather and prunella. It is, we fear, only too
true that the destruction of the wage system would
find the grey-bearded I.L.P. groping for its " old accus-
tomed stone " and grieving its loss. It worships at
a ruined shrine, which is now the nesting-place of bats
and owls. Those who are alive to the significance of
the present phase of the industrial struggle will act
prudently if they exclude the present Parliamentary
Socialist from their calculations.

We are not blind to the burden thrown upon us to
answer explicitly the question : What would you put in
place of the wage system ? This answer can only come
gradually as a developed argument, and we will address
ourselves to it with candour and with what thoroughness
we can command. We shall be compelled to pick our
way carefully through the thickets and morasses of
an unknown and unmapped territory, but at least
we shall not shrink from the adventurous journey.
But the important point now is to remember and
emphasise that Socialism has taken a wrong turning.
It has assumed that the transformation of capitalism
means economic emancipation. We now know that it

LABOURISM AND THE WAGE SYSTEM n

means nothing of the sort. The real problem is the
complete transformation of the productive processes
of the present economic system and a complete trans-
valuation of all the factors that enter into wealth-pro-
duction. At least we know this : that emancipation
and human exploitation are mutually exclusive ; that
the essence of human exploitation is the wage system ;
that any further compromise with the wage system is
fatal to emancipation, and that those who compromise
are the conscious or unconscious enemies of the new
epoch.

Ill

THE GREAT INDUSTRY AND THE
WAGE SYSTEM

We have endeavoured to emphasise how desperately
labour is entangled in the wage system and how that
entanglement remains an absolute bar to economic and
social emancipation. It is evident that such an entangle-
ment necessarily spells such a curtailment of liberty
as in practice amounts to its negation. The worker of
to-day cannot escape from it, go where he will ; he is its
prisoner ; he is in servitude to it. Yet so universal is
it in every relation of life that it seems in the natural order
of things, and no voice is raised against it. If it be such
an instrument of oppression, the question is pertinent :
Why has the attack upon it been so long delayed ? The
answer is probably this : The workman has meekly
followed the dictates of the economists and accepted
them with Oriental fatalism. " Allah is Allah ! " cries
the Mohammedan as the plagues descend upon him;
" The working of the economic forces," sighs the work-
man as the knocker-up rouses him at five o'clock in the
morning. The West is as superstitious, as fatalistic
as the East. To both free will is something impious.
The slaves in the Southern States of America had a
similar feeling towards the emancipationist. "These
good people would disregard the laws of God," they said
in their quaint vernacular. The British workman, in
his own vernacular, says of the Industrial Socialists that

GREAT INDUSTRY AND THE WAGE SYSTEM 13

they would disregard the laws of political economy. On
a celebrated occasion Gladstone " banished political
economy to Saturn," and yet, strange is the telling, the
Heavens did not fall.

It is altogether relevant to our inquiry into the wage
system to ascertain the origin of the workmen's meek
acceptance of it. From the death of villeinage, down
through the later feudal period, wages obtained, but were
profoundly modified by other factors, which disappeared
with the advent of the great industry. The workman
was then largely, if not completely, master of any process
of the manufacture in which he was engaged. Tradition-
ally he was a journeyman for only a period of his life,
and had reasonable expectation of dying a master-
workman. If his hours were long and his work laborious,
at least he enjoyed many social amenities. If his house
was darksome or insanitary, at least he was not the
victim of slum or quasi-slum life, and his children lived
in the sun. They sang and danced, inheriting and trans-
mitting a good physique. We are the last to idealise
the conditions of the feudal period ; it had its horrors even
as to-day. Our point is that the wage system never
crystallised under feudalism into a hard-and-fast social
regime, binding down the workman to a monotonous
round of bare subsistence, varied by periods of unem-
ployment, and ending prematurely in the grave or the
workhouse. Economists of every school agree that
labour is only a commodity to be bought and sold accord-
ing to the supply and the demand. And under modern
conditions so it is, neither less nor more. The feudal
system, unconscious of Adam Smith and his brood,
believed that it was something more than a mere com-
modity ; it at least acted as though labour were a human
activity of social as well as of economic value and sig-
nificance. The influence of the mediceval guilds remained,
humanising feudal conceptions of work, which under the

i4 NATIONAL GUILDS

large industry became always non-human and often in-
human.

Thus we see that, with the advent of modern
industrialism, the life of the workman became solely
conditioned by a wage system, unaffected by every
humane and social consideration. Invariably economic
development has its little army of camp-followers,
politely known as political economists. Their function
is to give philosophic or scientific expression to the
needs and necessities of the rulers, masters, and ex-
ploiters, in the period in which they live. It then
becomes the function of the priests, pastors, and preachers
to transmute these economic formulae into sacred laws
and religious duties. The present industrial system
has not lacked this particular form of intellectual and
theological support : Jeremy Bentham, Nassau Senior,
Ricardo, Stuart Mill, and John A. Hobson, each with his
own pet theory, but all in complete unity upon the main-
tenance of wages as essential to the economic system
and the social fabric. The most powerful force was
Jeremy Bentham, who gave the employers their intel-
lectual justification by his universally accepted theory of
the wage fund. In the production of wealth there
must inevitably be just so much and no more allotted to
wages ; it was an iron law against which guilds and trade
unions must break their wings. If the labouring popula-
tion grew disproportionately, then wages must fall —
let the labouring class take heed ! Malthusianism was
recommended as the way out ; but it was the employers
and not the employees who practised the doctrine.
Malthus proved to be more helpful as a guide where
there was an inheritance to be divided than amongst
workmen, who were admonished not to tamper with the
divine command to populate the earth. It is no ex-
aggeration to assert that the wage-fund theory has kept
the British proletariat in thrall for almost a century.

GREAT INDUSTRY AND THE WAGE SYSTEM 15

It is the root theory not only of commercialism but also
of the Poor Law. The infamous Poor Law Report of
1834 was saturated with it, and although modern econo-
mists have discarded it for the economy of high wages,
it nevertheless remains the rule of thumb (and claw) of
the employing classes of Europe and America. Its
meek acceptance by the working classes of Great Britain,
not excluding the trade unions, will probably be a puzzle
to future historians. But we must remember that large
considerations operated to disguise its obvious brutality.
In the first place, labour had little, if any, intellectual
guidance. Then, again, the period was one of enormous
commercial expansion, and intelligent workmen were
more ambitious to rise from their class and subsequently
benefit by the theory than they were to emancipate their
fellows from it. We must also remember that through-
out the nineteenth century Great Britain enjoyed com-
parative peace and possessed greater political freedom
than was possible on the Continent. The workman
said to himself : " Things are bad, but they might be
worse — look at the condition of things in Europe."
It was thoroughly drilled into him that obedience to
law had given Great Britain its social and economic
advantage. In this way the British workman not only
became law-abiding but gloried in it. The Napoleonic
period and 1848 left the British Constitution stable when
European crowns were tottering. In all the circum-
stances, it is not surprising that the British workman
accepted as law the teaching of the so-called economists ;
he not only accepted it but regarded it as a veritable
palladium of liberty.

But a new situation now confronts us. The industrial
system of to-day affords but little scope to the ambitious
workman. He cannot now pass with easy facility into
the employing class. The private no longer carries the
marshal's baton in his knapsack, The door is closed

Z6 NATIONAL GUILDS

against him by the trust and by the swift and facile
organisation of capital. He is condemned for ever to
remain in the ranks of the exploited. He has accordingly
turned his intelligence into another channel. He now
says to his fellow-workmen : " We are inexorably yoked
together. I cannot better my position without bettering
yours. We must stand together and fight it out col-
lectively with our employers." This collective struggle
at first assumed a political phase. Twenty years ago
this intelligent workman, fed on Carlyle, Ruskin, William
Morris, and others, said to his industrial mates : "Let
us discard the strike; it is political power we must
secure. Not the strike, not the bullet, but the ballot."
So said, so done. The Labour Party was born; it
made a great cry but brought back no wool. Worse !
Labour, diverted into political preoccupations, temporarily
lost its industrial power and, in a period of tremendous
commercial prosperity, actually lost some of its grip
upon the industrial machine, and wages fell accordingly.
Is it any wonder that politics now stink in the work-
man's nostrils and that he has turned firmly to " direct
action " ? Had a living Socialist Party found itself
in Parliament, instead of the present inert Labour
Party, led by charlatans and supported by Tadpoles
and Tapers, the energies of Labour might possibly for a
slightly longer period have been fruitfully employed in
the political sphere. But the lesson would have been
learnt in due season that the Socialist conquest of the
industrial system is an economic and not a political
operation : that economic power must precede political

power.

We are, therefore, brought back to the wage system.
While it remains, literally nothing can be done to emanci-
pate labour. Glowing periods in Parliament (with
hungry eyes on the Treasury Bench) are of no effect ;
solemn deputations to the Home Secretary asking for

GREAT INDUSTRY AND THE WAGE SYSTEM 17

this or that amendment to existing factory laws or
regulations would be laughable were they not so tragic-
ally futile ; municipal victories are but a form of local
intoxication. While the wage system persists, Labour
is in leash.

We expect that some misapprehension exists as to the
meaning we attach to wages. " Surely," says one,
" wages must always exist in one form or another. What
the workman receives, whatever its name, is in sub-
stance nothing but wages." It seems necessary, there-
fore, to make clear precisely the meaning we attach to
the wage system. An employer, as he pockets his profits,
does not regard them, except jocularly, as wages. He gets
his profits out of the wages of his employees. No wages,
no profits. In other words, the wage system is the
arrangement whereby the capitalist produces his wares
and is enabled to sell them at a profit. This means that
he must absolutely treat labour as a commodity that
enters into the cost of production, buying it precisely
as he buys the other requisite ingredients. In Lancashire
and Yorkshire it is not uncommon to see a notice :
" Power for Sale." Just as the weaver buys this power
at the lowest market price, consistent with efficient
service, so he buys labour. And just as the production
and transmission of power must be efficiently maintained,
including all the latest mechanical improvements, so
also must human power be maintained, the distance above
the subsistence line being the exact analogue to the
mechanical improvements in the power supply. Subject,
however, to the economy of this margin above subsistence,
the essence of the wage system is that labour must be
mere material for exploitation, to be purchased in the
neighbourhood of bare subsistence just as ore is bought
in Spain or cotton in Alabama. Wages is the name
given to the price paid for the commodity called Labour.
But the political economists are agreed that Labour is

18 NATIONAL GUILDS

a commodity. What of it ? We don't care a pinch of
snuff. Like Gladstone, we banish political economy
to Saturn. We must cease to regard labour as some-
thing for which a price must be paid as a mere com-
modity. The new conception must regard labour as
something sanctified by human effort, into which that
sacred thing personality has entered. We decline with
indignation to count labour as subsidiary to profits, as
something on the level with the inanimate. Workmen
are not " finished and finite clods untroubled by a spark."
Yet so long as they accept the wage system, they bind
themselves to the devilish principle that their lives are
of less account than dividends, that they are but a part
of production for purposes beyond their control and
benefit. No wages, no profits. The Socialist line of
attack is to kill profiteering by transforming the concep-
tion of labour as a commodity into labour as the essence
of our industrial life.

IV

STATE SOCIALISM AND THE WAGE SYSTEM

The British Socialist movement during the past twenty
years has been an amazing compound of enthusiasm,
fidelity and intellectual cowardice. The pity of it is that
cowardice has crowded out the enthusiasm and vitiated
the fidelity. Perhaps, however, it would be as foolish to
complain of intellectual cowardice in Great Britain as to
complain of the weather. The Englishman will always
face facts, but he lives in mortal dread of ideas. He is
probably the one member of the European family who
fails to understand that a living idea is the greatest of
all facts, the most substantial of all realities. He hates
mystery, and, like a child in the dark, buries his head
in the bedclothes, shrinking from and ignoring the
mysterious power of things unseen. Being a sentimen-
talist, he revels in vague ideals and misty conceptions ;
but his mind rejects a definite theory unless it can be
expressed in the concrete. " How does it work out in
pounds, shillings and pence ? " he asks, and plumes him-
self upon being a practical man. He has satisfied him-
self that imagination is for to-morrow and the concrete
for to-day. Long views are most suitably housed in the
comfortable studies of Academia ; the short view that
increases wages by sixpence a week is more to his taste.
This is always the note and tone of the British delegation
at an international congress. Whilst the Latins and
Teutons vigorously discuss the theoretical aspects of

20 NATIONAL GUILDS

some problem, the Britisher gapes like a gawk, wonder-
ing when the cackle will end and the horses appear.
This attitude has its strength and its weakness. Its
strength, in that it avoids party fissure on academic
points (the most prolific source of splits and dissensions
in parties of the left), and promotes concentration upon
immediate and concrete proposals, such as a small
advance in wages, factory legislation and so forth. Its
weakness, in that it can never take a long view and work
steadily towards a great end. Its weakness, because
every new legislative proposal — the Insurance Act, for
example — finds it in doubt and uncertainty. Its weak-
ness, because it inevitably excludes the intellectuals,
who are primarily concerned with the tendency and
meaning of party doctrine. The Independent Labour
Party exemplifies these good and bad qualities. From
its inception down to to-day, it has carefully eschewed
doctrine, picking up its ideas haphazard, living on an
artificial enthusiasm engendered by political strife. In its
ignorance it has frequently condemned what subsequently
it has been compelled to accept, and then again has
had to reject what in its ignorance it had propounded as
good Socialism. It has steadily refused the help of the
intellectuals, who, if they joined it, soon found themselves
isolated and suspect. The result has been a certain small
measure of political success, but, for the rest, an utterly
barren record. Not an idea of the slightest vitality
has sprung from it, its literature is the most appalling
nonsense, its members live on Dead Sea fruit. The
joyous fellowship which was its early stock-in-trade has
long since been dissipated ; the party is now being bled
to death by internal bickerings, dissensions and jealousies.
It is the happy hunting-ground of cheap and nasty party
hacks and organisers, who have contrived to make it, not
an instrument for the triumph of Socialism, but a vested
interest to procure a political career for voluble inefficients.

STATE SOCIALISM AND THE WAGE SYSTEM 21

The outcome of this unhappy development is primarily
this : That only a handful of Socialists in Great Britain
have a clear conception of what Socialism means. How
could the rank and file know, when the leaders gloried in
their ignorance ? Thus Socialism has gradually come to
mean the intervention of the State in social and industrial
affairs. The origin of this notion is not far to seek.
In the earlier days the Socialists had to struggle against
the prevailing belief that any kind of State intervention
must necessarily infringe upon the prerogatives of the
individual. Individualism was the dominant creed.
What the individual could do, the State must not do ;
laissez-faire was the basis of British life. It was obviously
the cue of the Socialists to break down this theory, and
accordingly they strained every nerve to increase the
power of the organised community. When, therefore,
a municipality took over its water or gasworks, the
Socialists were quick to acclaim it as a Socialist victory.
Gradually it was discovered that certain public services
could be more efficiently and economically administered
by the municipality than by the individual or the private
company, and in consequence the term " Municipal
Socialism " acquired a definite connotation.

There is this in common between Municipal and State
Socialism : Both are equally committed to the exploitation
of labour by means of the wage system, to the aggrandise-
ment of the municipal investor. State Socialism is State
capitalism, with the private capitalist better protected
than when he was dependent upon voluntary effort.
And herein we discover why the British Socialist move-
ment has been side-tracked. It expected that under
State Socialism a way out would be found from the
exploitation of labour ; it has discovered to its dismay
that the grip of capitalism upon labour, far from being
released, has grown stronger. Nor is that all. The
payment of dividends to the private investor is forced

22 NATIONAL GUILDS

upon the workman, not only as an economic necessity,
but as an obligation of honour. How is it done ? There
is only one way : by perpetuating the wage system.
" Let us nationalise industry," say the political Socialists,
" and then we shall control it." " Yes, but you must
compensate us," reply the capitalists. " Certainly," is
the reply, " we will pay you the full and fair price."
" How will you get the money ? " ask the capitalists.
" By borrowing," reply the political Socialists. " Who
will lend to you ? " again ask the capitalists. " Oh, we
will pay the market price for the money," comes the
reply. " In that event, we will lend it to you," the
capitalists graciously respond. " You can pay us 3 per
cent, and provide a sinking fund and we will be con-
tent." In this way the community has gained control
of an industry on borrowed money. Next enters the
workman. The political Socialist director looks at him
and fails to observe any marked elation. The old plat-
form manner returns. " My friend," says the political
Socialist, " you must rejoice with me, for this is a red-
letter day in the history of suffering humanity ; emanci-
pation is in sight." " Very glad to hear it," replies the
worker, " I suppose you will do something substantial in
the matter of my wages." " Hum, yes, in good time," says
the political Socialist ; " but, you see, comrade, we must
pay 3 per cent, for the money we have borrowed and put
by i£ per cent, for sinking fund and 5 per cent, for
depreciation account. Then the Treasury insists upon
our paying rent for the buildings and land. I am afraid,
my friend, that you must wait." " Hanged if I do!"
angrily exclaims the worker, " I'll strike." " I am quite
sure you won't," suavely says our political Socialist.
" You see we are doing all this in your interest, and it
would be immoral for you to strike against the State.
You would be striking against yourself. Besides, you
are in honour bound to pay a fair rate of interest to our

STATE SOCIALISM AND THE WAGE SYSTEM 23

good friends the capitalists, who have patriotically
advanced the purchase money." Exit workman scratch-
ing his chin and completely mystified. He remains in
bondage to the wage system. His only means of escape
is to smash it. It is not rent and interest that enslave
him ; rent and interest rely for their payment upon the
wage system. No wages, no profits ; no wages, no
rent ; no wages, no interest. Destroy the wage system
and a complete transvaluation of every industrial factor
follows as an inevitable consequence. To lure the
workmen, then, into a misconceived agitation for mere
nationalisation is both stupid and cruel.

It is peculiarly humiliating that our spry little Chan-
cellor of the Exchequer had to teach this simple lesson
to an avowed Socialist. Mr. Keir Hardie apparently
does not yet realise that he is dead. His simulacrum
moved an amendment recently in the House of Commons
to an official resolution calling for a thorough investiga-
tion into the industrial unrest. Mr. Hardie's cure was
nationalisation of the mines, railways and land. Mr.
Lloyd George faced this issue quite cheerfully. Did he
oppose nationalisation ? Not at all. On the contrary,
there was a great deal to be said for it. Why ? Let us
quote from the Times report :

" He was not combating nationalisation. He thought
there was a good deal to be said for it from the point of
view of the traders. . . . His hon. friend was very
sanguine if he thought nationalisation would put an end
to labour troubles.

" Mr. Keir Hardie. It will depend upon what you
pay.

" The Chancellor of the Exchequer said he did
not agree, because whatever they paid there would be
disputes between the man who offered his labour and
the man who made payment for it, in which they would
take different points of view as to the value of the
labour.

24 NATIONAL GUILDS

" Mr. Keir Hardie said these disputes would then
be settled in the same way as disputes in the Post Office
were settled — on the floor of the House.

" The Chancellor of the Exchequer said he did
not know that that was quite an encouraging analogy. . . .
One of the greatest strikes in Australia took place on a
State railway, and the State railways did not escape
during the strikes in France. They had nationalisation
of railways in Germany, but wages were much lower
there than here."

After this enlightening colloquy is there any sane
Socialist who does not grasp the fundamental distinction
between economic Socialism and the State capitalism
which does not frighten Mr. Lloyd George, who quite
candidly admits that it may be a commercially sound
proposition, but that it depends upon the wage system,
with all the troubles associated with it ? We seriously
ask the I.L.P. if this is the brand of Socialism for which
they are struggling. If it is, then the sooner the
industrial Socialists realise the fact the sooner will the
atmosphere be cleared and we can get to business. If,
on the contrary, the I.L.P. does not accept such a
crude doctrine as that proclaimed by their veteran leader,
why do they allow him and his colleagues to present
Socialism in so ludicrous a garb in the House of Commons ?

Let us look at Mr. Hardie's suggestion. He obviously
believes in the wage system. In this respect he does not
differ from his Liberal and Tory colleagues. He wants
more money to be paid in wages. So do his Liberal and
Tory friends. Who does not ? He thinks the floor
of the House of Commons the right place to settle wage
disputes. This means that he regards Parliament as
strong enough to control the economic forces. He
probably does not know it, nevertheless he is really a
puzzle-headed State capitalist.

We now see that State Socialism is no panacea for
economic servitude. On the contrary, it rivets the

STATE SOCIALISM AND THE WAGE SYSTEM 25

chains a little more securely. If it were otherwise, is
it probable that both the orthodox parties would com-
mit themselves to it ? In the early days of Municipal
Socialism some of its warmest supporters were Tories,
and its keenest opponents were Liberals. To-day
railway nationalisation finds large support from both
parties, while numerous Chambers of Commerce have
declared for it. Cannot Mr. Hardie be made to see that
such support is not tendered because of Labour's beauti-
ful eyes ? It is a simple fact that a considerable exten-
sion of State Socialism would be agreeable to capitalists.
We are passing through a period of commercial expan-
sion. British capital, more than ever before, is being
placed in all parts of the world. These investments
are speculative. For every such speculative investment
abroad it is not unusual to cover the risk by an absolutely
sure investment in home securities. What more secure
than lending to the State ? Further, our Government
securities are always easily liquidated. State Socialism
is a gain and a convenience to the private capitalist,
who can at one stroke average his risks and keep in his
safe scrip that can instantly be turned into ready cash.
Yet this is what Mr. Hardie and his colleagues offer the
wage-earner to ease his unrest and render him happy
ever after.

We do not think the wage-earner will be deceived by
so transparent an imposture. The facts of his daily
life will soon teach him that a State guarantee to pay
rent and interest is by no means the right way to abolish
rent and interest. The only one guarantee the capitalist
can rely upon for the payment of his dividends is the wage
system. The only guarantee the State depends upon for
the payment of its liabilities is the wage system. Our
commercial and social arrangements, in the final analysis,
are contingent upon the workmen remaining content
with wages. For what does the social contract imply ?

26 NATIONAL GUILDS

Plainly this : that rent in whatever form is a first
debenture upon the labour of the wage-earner. That
interest is a second debenture upon the same product.
That prices are fixed upon the basis of rent and interest
remaining as first charges upon labour, which has to be
content with a wage that is based upon a calculated
subsistence. State Socialism, as we have seen, perpetu-
ates these debenture charges upon the fruits of labour.
Who, then, can forbid the continued imposition of these
burdens ? The wage-earner, and he only. He has but
to make up his mind that his life must take precedence
over both rent and interest, to back up his decision by
collective effort, and the wage system crashes to earth,
bringing down with it everything that lived upon it.
We have seen that the wage system is based upon the
conception of labour being a marketable commodity.
It is for the wage-earner to proclaim the larger truth that
his labour is his life, that his life is a sacred thing and not
a commodity, that his life must not be subject to any kind
of prior claim. By that act of faith the wage system
is abolished and the worker stands on the threshold of
emancipation.

INTERNATIONAL ECONOMY AND THE WAGE
SYSTEM

If Great Britain were a self-contained economic unit,
with a happy equilibrium between its home demand and
supply, if it were unaffected by economic and com-
mercial changes over the rest of the world, it might
then, so the critic may aver, transform its wage system
into the Guild System without fear of the consequences.
To argue in this way is to argue that National Guilds are
uneconomic, wasteful, a drag upon our national vitality.
The exact reverse is the case. We have seen that the
wage system carries on its back the burden of rent and
interest ; that the refusal of labour to work for wages is
tantamount to the discharge of that burden. This, in
its turn, means that the production of wealth can proceed
unhampered by the depredations of the rent-monger
and the profiteer. Therefore, one of two courses is open
to the emancipated wealth-producer : he may either
continue to produce the same or a greater amount of
wealth as heretofore, with a consequent gain proportion-
ate to the amount of rent and interest saved, or he may
comfortably reduce the amount of wealth previously
produced in proportion to the amount no longer de-
manded by rent and interest. But, inasmuch as an
increased productivity of wealth spells increased comfort,
the former alternative is the one that would be adopted.
Incidentally, we may observe that we use the term

a7

28 NATIONAL GUILDS

" wealth " in the classical sense — that is, as the economists
use it. But the last word has not been uttered as to
the precise meaning of wealth ; the Guild principle will
undoubtedly evolve new conceptions of wealth as well
as of wealth production. But we are now concerned with
the influence of international exchange upon our national
economy. It is not only convenient, but entirely right
and natural that we should have regard to the economic
power of our nation qua nation. Socialists are not
cosmopolitans, they are internationalists ; and you
cannot be an internationalist unless you are first a
nationalist. Let us, then, admit that whatever weakens
us economically in our relations with other nations is,
ipso facto, inadmissible. We may temporarily weaken
ourselves for some large political purpose, as, for example,
by the imposition of a preferential tariff to cement the
Empire. This was originally the argument used by Mr.
Chamberlain. He subsequently discarded it, because
he discovered that amongst its wealthy supporters un-
selfish patriotism was regarded as foolish and chimerical.
But, whilst the idea of an economic sacrifice for a great
object is conceivable, it is not often practical politics, for
the reason mainly that what is ethically desirable is
economically necessary.

The Guild System does not shrink from this supreme
test ; on the contrary, it welcomes it. Why not ? For
assuredly the argument is all one way. The wage
system, as we have seen, is wickedly wasteful, because
it carries on its back not only an army of non-producers
who are large consumers, but also a large number of
parasitic industries that minister to the luxuries and
vices of the non-producing consumers. If these un-
economic elements be eliminated, who can calculate our
increased economic power as a nation and a community ?
The international economic struggle to-day is conducted
as a sort of weight-handicap race in which labour in

INTERNATIONAL ECONOMY— WAGE SYSTEM 29

every civilised country carries varying degrees of weight-
exploitation nicely adjusted to the international market.
The more highly civilised the nation the heavier is labour's
handicap. For of what use is civilisation to the rent-
monger and the profiteer unless they can exploit it ?
And how can they exploit it except through the agency
of the wage system ? If, however, labour in Great
Britain throws off this handicap by smashing the wage
system, what fool is there who will contend that its power
to produce wealth is weakened ? One might as well
argue that a man with haemorrhage is the best man to
run a hard and exciting race.

In the sure and certain knowledge that the stanching
of the haemorrhage of rent and interest leaves us as a
nation stronger and not weaker, what, then, is the nature
of our relations with other countries ?

The conception of international exchange propounded
by the Manchester School had much to recommend it.
Broadly, it was this : that nations exchange their super-
fluities with each other. Do America and Canada grow
more wheat than they consume ? England has need of
it, and in exchange will send manufactured goods not
made across the Atlantic. Does China grow more rice
than she requires ? We are ready and willing to exchange
something that we produce for the rice. Nor is direct
exchange necessary. China may have no use for any-
thing of ours, but a third or a fourth country may be the
medium of exchange through the agency of some pro-
duct in demand in China. In this way the trading
community becomes an international bourse where the
supply and demand of every country are regulated.
The fundamental fact never to be forgotten is that
international trade is barter. We pay for labour's pro-
ductions with labour's productions. International bank-
ing is but a convenience to the great end that each
country shall have access to the natural and manufactured

3o NATIONAL GUILDS

products of the world in exchange for such excess of
the home commodities as may be required. That a
money value is placed' upon home and foreign com-
modities is a convenience and not a necessity. Even yet
we barter with nations who do not understand money.
There are several businesses in Birmingham that make
articles for direct exchange, images of gods and ju-jus
amongst them. But the Manchester School assumed
that foreign trade was best conducted on what it called
" individualist " lines. Collective bargaining was ana-
thema. We have long since passed away from that
particular conception of foreign trade. The individual
profiteer found himself helpless in the face of political
difficulties and never-ending international complications.
He accordingly fell back upon a species of collective
bargaining, his side of the contract being protected in
part by his Government, acting through the local consul,
in part by the Chamber of Commerce, and in part by
himself or his agent. With the increased stringency of
international competition, resort has been made more
and more to Government support. More and more
is it demanded of the Consular Service that it shall
effectively co-operate in the extension of British trade in
every quarter of the globe. One thing, however, it must
not do : it must neither buy nor sell. That would be an
invasion of the sacred rights of the profiteer. It is true
that a well-organised Consular Service could exchange
its national products to much better advantage than is
possible to the profiteer. But does he care for that ?
Safely entrenched behind the wage system at home, he
utilises the Consul, not in the interests of his country, but
in the interests of private exploitation. Travellers can
tell strange stories of the exactions of the private trader
in every part of the world. It is a simple fact that for a
large proportion of the raw materials and commodities
imported from other countries we pay through the nose.

INTERNATIONAL ECONOMY— WAGE SYSTEM 31

We should effect untold economies* if we were to hang
the principals of our foreign trading concerns. The
process would be unpleasant, but it would encourage the
others. Great Britain is by way of being proud of its
gigantic foreign trade, but the man with a shrewd eye
and some sensibility, who has seen the operations of
European traders in, say, China, India, the Congo,
South Africa, Brazil, Peru, knows that we ought rather
to blush for than to boast of our foreign trade. Labour,
having once conquered the production of wealth, by the
break-up of the wage system, with the consequent
elimination of the non-producing but consuming factors,
has only to annex the Consular Service and to man it
with Guild representatives. That accomplished, we can
exchange our products to even greater advantage than
heretofore, and at the same time humanise many parts
of the world that now writhe under the exactions and
oppressions of buccaneers and profiteers.

Having now examined the home and foreign impli-
cations of the wage system, we venture upon a generalisa-
tion : Private capitalism, by means of the wage system,
exploits labour to expand rent and interest ; the Guild
System exploits the earth to expand life.

This generalisation commits us to international
co-operation in the exploitation of the earth, whereas we
have been arguing that the substitution of Guilds for
the existing wage system would give us an advantage
over other nations. It is certainly true that every new
departure based on sound economy confers an advantage
upon the community wise enough to start out courage-
ously on a new life. The advantage is inherent in the
new scheme of life. But we do not smash the wage
system and construct a new social fabric to gain a march
upon labour in other countries. We do it so that men and
women in Great Britain shall live, whereas previously
they only existed. We believe that we should be setting

32 NATIONAL GUILDS

an example that would speedily be followed by France,
Germany and America. The advantage gained by the
first country to adopt Guild organisation is less economic
than commercial. Another basic principle now looms
up on our horizon : A bad economic system in one country
bears down the standard of life of the whole world.
Gresham's law applies to life as well as to money.
Poverty degrades ; its influence ripples to the outside
edge of the world. Indecency corrupts ; its odour
offends the nostrils of Jew and Gentile. In like manner
and for the same reason, an oppressive wage system
affects labour everywhere. And herein we discover the
true justification for international Socialism. When
the German Social Democratic Party sent a large sub-
vention to V Humanite it was helping its own cause
in Germany just as much as it helped the French
movement. To stimulate international Socialism is to
strengthen Labour in every part of the world. Thus
the downfall of the wage system in Great Britain is
the harbinger of the emancipation of Labour every-
where. This result would be effected in two ways :
In the first place, private capitalism in Germany or
France could not compete in the world's market with
Guild labour in Great Britain, and would in consequence
be compelled to abdicate ; in the second place, Labour
in Germany or in France, realising the true meaning of
Labour's victory in Great Britain, would revolt against
its own wage system and end it. Having no reason to
compete with Germany, but rather having the greatest
possible inducement to co-operate with his German col-
leagues, the British Guildsman would aid them by every
means in his power. Internationalism is by no means
a figure of speech. It means not only social and
intellectual comradeship but economic co-operation
to an extent as yet undreamt of in our barren
commercial philosophy. Look at it how we may, the

INTERNATIONAL ECONOMY— WAGE SYSTEM 33

wage system is the main obstacle to the Socialist
conquest.

There remains yet one other important consideration.
With the intellectual and social advance of Labour in
Europe, finally released from the incubus of the wage
system, a new standard of wealth production will be
evolved, bringing in its train a new civilisation. Does
this mean that those nations that remain faithful to the
wage system must become the hewers of wood and
drawers of water for their emancipated brethren ?
Will the Chinaman or the Bolivian, the Negro or the
Persian be forced to perform the menial tasks of the
world ? It looks uncommonly like it. Will it not be
at least human for the European worker, emancipated
from drudgery, his mind bent upon transforming his
work into an art or a craft, to leave the lowest tasks
to the coolie ? It is indeed probable. Perhaps, in the
inscrutable decrees of Fate, this may be the way ordained
to emancipate those who will then walk in'darkness that
is the shadow of servitude. We'may at least comfort
ourselves with the reflection that through economic
emancipation we shall have achieved such a higher form
of life that even servitude such as this will be too danger-
ous, too corrupting, to tolerate. If it be so, as we would
fain hope, then we shall end it, by force if needs must.
Armageddon may perchance come that way. It would
be a battle worth fighting — and who can doubt the
issue ?

VI

UNEMPLOYMENT AND THE WAGE SYSTEM

In our previous chapter we described the exactions of
rent and interest as haemorrhage — an exhausting effusion
of life-energy from Labour of which the wage system
is the direct and main cause. The wage system is the
fruitful parent of another evil — the septic poisoning of
the body politic by human wastage — the wastage of
unemployment, of poverty, of premature death and
decay. The facts are only too painfully evident. It
would be easy to fill whole chapters with statistics of
unemployment, poverty and disease. They need not
be cited here, because they are not disputed. The most
horrible aspect of these tragic elements in our midst is
that they persist in times of prosperity. Take the
month of April 1912, for example. No one will deny
that trade was extremely good. Yet the percentage of
unemployment that month was 3*6, nearly 1 per cent,
more than the year before. This, however, may fairly be
ascribed to the coal strike. But what does 3-6 per cent,
of unemployed mean in terms of human life ? This :
nearly 600,000 wage-earners unemployed, or 2,400,000
men, women and children on the verge of starvation.
Yet, as we reckon human affairs to-day, this is not con-
sidered particularly serious ; certainly nothing to worry
about. It is, in fact, a rather convenient total. It is
not so large as to cause much outward discontent and
agitation ; it is just large enough to keep down wages.

UNEMPLOYMENT AND THE WAGE SYSTEM 35

A margin of unemployment is essential to the maintenance
of the wage system. We are aware that the younger
capitalist school contends that it is possible to absorb all
the unemployed without dissolving the wage system, which
is admittedly the basis of the capitalist's power to exploit
labour. This is really the keynote of the Minority Report
of the Poor Law Commission ; it is the argument of Mr.
W. H. Beveridge, the presiding genius at the Labour
Department of the Board of Trade ; it is the belief of that
variegated school of social reformers who find their
views expressed in the Daily News and the Manchester
Guardian. How do they propose to do it ? These
clever people have looked into the subject and they have
discovered that there are two classes of unemployed :
the competent workers temporarily out of work, and the
unemployables. They have made another discovery :
there are two kinds of unemployment : seasonal unem-
ployment, clearly due to the act of God, and chronic
unemployment, caused by various maladjustments of
industrial organisation. Having defined the subject to
their complete satisfaction, they find that the solution
is easy — so easy that we are surprised nobody ever
thought of it before. The unemployables, of course,
must have curative treatment. For them, God wot, the
labour colony. Isn't that the acme of simplicity ?
At these labour colonies, men and women are to be
trained in the technique of some trade and are to be
endowed with habits of thrift and sobriety. To what
end ? That when they are technically and morally
fit they may again assume their ordained position in the
wage system, where they shall again be suitable subjects
for exploitation. In regard to the unemployed who are
the victims of seasonal occupation, they must be taught
an alternative trade. The other unhappy class of un-
employed present the simplest form of the problem.
Their case is met by our old friend in political economy,

36 NATIONAL GUILDS

mobility of labour. What we must do, therefore, is to
make it easy for these men and women to move from
one part of the country to another. Therefore we must
have a system of labour exchanges, and (with certain
precautions) we may advance their railway fares. Any-
body with a turn for mathematics can see at a glance
that, in the unceasing general post of unemployment,
every unemployed person can settle in somewhere, at
some time and at some wage not to be despised. It
involves a little State organisation, a few sympathetic
officials, preferably of the Fabian type, et voild tout ! Is
it by now superfluous for us to remark that all these
labour colonies, all these labour exchanges, all this State
organisation, informed and permeated by clever Fabi-
anism, are designedly rendered subservient to the main-
tenance of the wage system ?

It would not, however, be fair to suggest that the
social reformers have, with these proposals, shot their
last bolt. They admit that, notwithstanding all these
Governmental contrivances, there would still remain a
surplus of deserving unemployed. Clearly something
more remains to be done. Obviously, private capitalism
has absorbed its maximum number of employees, there-
fore the State must do something. What can it do ?
Ah, well, that is not so easy. It is certain that, first and
last, it must not set any worker to uneconomic employ-
ment. There are, however, various public undertak-
ings of distinct economic value — afforestation, recovery
of the foreshores, transforming slums into sanitary
tenements, and — an unpleasant topic — emigration. But
these undertakings demand capital. Very good ; let
us borrow. The capitalist smiles. Another safe invest-
ment ! How splendid it is to have a paternal govern-
ment that, at one and the same stroke, offers a sound
investment and perpetuates the wage system ! In such
circumstances, under such auspicious conditions, it is

UNEMPLOYMENT AND THE WAGE SYSTEM 37

certainly worth while to spend a few thousands each
year on the upkeep of Christian missions, whose func-
tion it is to train hoi polloi in the doctrine of social
discipline. Thus, Labour, acting on the advice of these
remarkably earnest and enthusiastic social reformers,
finds itself in the same old vicious circle. It asks the
private capitalist for more humane conditions. " Cer-
tainly," is the answer, " providing you are efficient wage
servants, and thereby enable me to pay rent and interest
and make a decent profit." It asks the State Socialist
to relieve it of its deadly disease of unemployment.
" Certainly," answer the MacDonalds, the Hardies, and
the Snowdens, "it is the problem that called us into
political life. We will, as a State, put your unemployed
to economic tasks, but you must honourably remain
wage slaves, because the wage system is the only way
whereby we can pay rent and interest to the capitalists
who advance the necessary money." Wherever Labour
turns, it is thus caught in the trap of the wage
system.

There remains yet another question to be answered :
Even though it be necessary to maintain the wage sys-
tem, is it not better to adopt State Socialism, so that
the unemployed may be drained off the labour market
and thereby enable the wage-earner to exact a higher
wage ? If a margin of unemployment be necessary to
keep down the wage level, does it not follow that if that
margin disappears wages, ipso facto, must rise ? The
answer to this question is twofold : First, wages cannot
appreciably rise whilst the worker accepts the wage
system as the basis of his bargaining ; secondly, the
employers, for at least another generation, can auto-
matically create a new margin of unemployment by the
introduction of labour-saving machinery.

Let us examine both these propositions a little more
closely. It is clear that wages cannot rise much beyond

38 NATIONAL GUILDS

the level of bare subsistence so long as rent, interest and
profits have a prior claim upon the products of labour.
Whether the market price of the commodities produced
be fixed by international or domestic competition, or by
the capacity of the consumer, or (as is generally the case)
by both influences acting and reacting upon it, there now
remains no kind of doubt that in our national economy
there is not room for rent and interest to live if labour
absorbs its own surplus value. The essence of the
wage contract is that labour must itself be a commodity
entering into the cost of the article, the surplus to be
divided between rent, interest and profits. Break
that contract and the whole social contract must be
revised. If labour is strong enough to break the contract,
it is obviously strong enough to capture the plunder.
But it cannot do so if it accepts wages in principle or
form. The essence of this implied contract has entered
into our common law. Labour, by means of the wage
system, must implement the employer of obligations
to rent and interest. This is put bluntly by a lawyer in
the Daily Mail :

" I object most strongly to the statement that breach
of contract is a ' theoretical wrong.' It is not only the
working man who suffers from the decline in the purchas-
ing power of money. No one suffers from it so much as
the so-called ' idle rich,' many of whom are neither idle
nor rich, but all of whom derive their income from con-
tracts under which they are entitled to receive a fixed
income of so many pounds a year, whether trade is good
or bad and whatever the purchasing power of these
pounds may be. The ' idle rich ' do not grumble, but
are content to take the rough with the smooth. And
whatever may be the defects of lawyers as politicians,
the common law of contract is a just law."

If, therefore, labour accepts this law of contract as
just, it must accept the wage system and all that it

UNEMPLOYMENT AND THE WAGE SYSTEM 39

implies. And it follows that, even if the margin of un-
employed be removed, the continuance of the wage
system absolutely precludes any appreciable increase in
the standard of life. The truth of this becomes more
apparent if we examine our greatest national industry,
agriculture. There is practically no margin of unem-
ployed in our rural districts, yet wages remain disgrace-
fully low. Why ? Because the farm labourer accepts
the wage system and accordingly most kindly and con-
siderately pays his employer's rent at the cost of his
own children's souls and bodies ; pays the rent and the
interest on the capital outlay of the farm gear and
machinery by the social and economic degradation of
himself and his wife. Although there are practically
no agricultural unemployed, certainly not enough to
constitute an effective margin of unemployed, yet the
farm labourer remains in degrading bondage to the wage
system.

It thus becomes evident that the profiteer's chief
bulwark of defence is the wage system. Nevertheless,
he holds in reserve another weapon — the power to dis-
charge labour. This power is, however, conditioned by
his capacity to pay rent and interest and make a profit.
He will not, therefore, discharge labour without good
cause, and unless he has a substitute for it. The good
cause is mainly this : that he can no longer exploit
labour to advantage. In other words, he can only pay
for the commodity, labour, when its price does not put
him out of action. If the price of labour fulfils this con-
dition, he is content. But if the vendor of labour
demands something in excess of its commodity price,
the profiteer brings to his aid the inventor and the
engineer, and in a twinkling an automatic machine is
at work, and fifty men are thrown upon the scrap-heap.
Fifty men ? Say rather five thousand : for the com-
petitors of this profiteer must not only follow his

4o NATIONAL GUILDS

example but, if possible, better the instruction. The
political economist has his answer all pat and glib. He
tells us that whilst it is very sad that these five thousand
worthy men should thus be temporarily inconvenienced
(we must not forget that labour has the priceless quality
of mobility), nevertheless the introduction of machinery
is good for the engineering industry, and that what we
lose on the swings we make up on the roundabouts. But
even the political economist has not the effrontery to
contend that one unemployed engineer is brought in for
every one man displaced by the .new machine. We know
that the output of ten engineers can easily put a thousand
labourers out of employment.^. Our political economist
grows irritable when reminded of this simple little fact.
" Tut ! tut ! " he exclaims, " we have only to consider
the economic production of wealth." We need not
pursue the argument. Whatever the pedants may affirm
as to economic wealth production and the mobility
of labour, the fact remains that at this moment, when
trade is good, we have a standing unemployed army of
nearly 600,000, they and their dependents living in a
hell not of their seeking. Nor can there be the slightest
doubt that the employers of this country purposely
maintain a margin of unemployment, and justify it on
two grounds : (1) that they must have a reserve of
labour to meet excessive demand ; (2) that wages can
only be regulated by the employer being in a position
to argle-bargle, with the unemployed to fall back upon.
Mr. Arthur Chamberlain was quite frank on this point.
Some years ago, arguing in favour of Free Trade, he
pointed out that unemployment was lower in Free Trade
England than in protected countries. " But," he added,
" we must maintain a certain reserve of unemployed, or
what would we poor manufacturers do ? " The most
that can be said for the removal of the unemployed, if
under private capitalism such a thing were possible, is

UNEMPLOYMENT AND THE WAGE SYSTEM 41

that it would strengthen labour in a conscious onslaught
on the wage system. But if labour can still be induced by
private or State capitalists to continue working under the
wage system, then the solution of unemployment would
not materially benefit labour.

VII

DEMOCRACY AND THE WAGE SYSTEM

I

It was, we think, Abraham Lincoln who defined demo-
cracy as government of the people by the people for
the people. This is the conception of democracy common
to all Republicans and Radicals throughout the world.
Gladstone differentiated Liberalism by his famous
aphorism : " Toryism is mistrust of the people qualified
by fear ; Liberalism is trust in the people qualified by
prudence." A moment's clear thinking discloses the
disconcerting fact that Gladstone's distinction between
Toryism and Liberalism is more apparent than real.
In either alternative a governing class is predicated. But
did not Lincoln also assume a governing class ? A
lawyer himself, we suspect he imagined a class of pure-
souled attorneys, not unlike Mr. Lloyd George, springing
out of the people, voluble in first principles, devoting
themselves to the political service of the People with a
capital P. The ministrations of the lawyers were to be
mitigated by successful men of business, who would
" know when to come in out of the rain." It is almost
certain that " class " representation would have been as
abhorrent to " Father Abe " as it is to Mr. Balfour. To
both men, class representation would mean the importa-
tion into the body politic of craft representatives. Mr.
Balfour and his congeners believe in class government —

DEMOCRACY AND THE WAGE SYSTEM 43

their own class — and so did Lincoln — his own class.
The Chartists and the early English Radicals were
dominated by the same idea — a political hierarchy, draw-
ing its authority and inspiration from the mass of the
people, but a governing hierarchy none the less. The
Balfourian conception dates back to the Caroline period ;
the Lincoln-Radical-Chartist doctrine derives from the
French Revolution. Both conceptions are now out of
date ; both are equally irrelevant to modern life. Take
one example — local representation. A member of
Parliament is supposed to represent his own county or
borough. He is presumed to know by experience and
knowledge the needs of his own locality. Then, as occasion
arises, he is expected to say, " We in our county believe."
But how remote from the fact ! The House of Lords
comes nearer to district representation than does the
Commons. Thus most noble lords take their title from
some place in which they are interested by land owner-
ship. But the majority of the Commons have only a
carpet-bag concern in their constituencies. Further,
each member is supposed to speak for his constituency as
a whole. Occasionally some newly elected member pays
lip-service to this principle. Returning thanks for his
election, he says : " Now that the fight is over, I will
remember that I represent not only the majority that has
elected me, but the minority also." His new con-
stituency is, of course, politely incredulous. The minority,
sore with defeat, regard him as a prevaricator ; the
majority, elated with victory, determine that he must toe
the party line. No nonsense about that !

It would be easy to enlarge upon the anomalies of
our present political system. We are now only concerned
with the relation of the present political structure to the
wage system. Now there is substantial agreement
amongst all politicians that the British political system is
democratic. It is true that the Liberals and Labourists

44 NATIONAL GUILDS

demand some further extension of the franchise, whilst
women are also claiming the same thing in varying
accents. But it is not seriously contended that universal
adult suffrage would fundamentally change our system of
government. The Liberals ponder whether it would
benefit the Tories ; the Tories, whether it would benefit
the Liberals ; the Labour Party does not so much ponder
as gape in honest and well-intentioned vacuity. (They
are the fifth wheel on the political coach and are of no
particular importance.) How comes it, then, that our
democratised political structure still remains unrelated
to democratic reality ? The answer is simple : Four-
fifths of the community are imprisoned by the wage system,
and the wage system is the negation of democracy.

Nearly seventy years ago Abraham Lincoln conducted
his historic campaign against Judge Douglas on the affir-
mation that no state could continue " half slave and half
free. ' ' He did not foresee the marvellous social inventions
of the second half of his century. How was he to know
that, in the name of the particular type of freedom which
he advocated for the negro, both black and white would
in a generation be conquered by a more insidious form of
servitude ? How could he foretell the outcome of a
capitalistic system that left the modern world one-fifth
free and four-fifths servile ? There need be no mistake
about it : every wage-earner carries with him the stigmata
of his caste as obviously as if he were a branded slave.
He is excluded from the social opportunities extended to
the middle and upper classes ; special legislation is passed
almost every Parliamentary session relating to and
further defining his status in the wage system, just as in
America there was constant State legislation relating to
the enslaved negro. The formal, legal resemblances
between the wage-earner and the slave are altogether
remarkable. Too much stress has been laid by Socialists
upon the similarity of material condition between the

DEMOCRACY AND THE WAGE SYSTEM 45

wage-earner and the slave. " How much better off are
we than the slave ? " is an appeal that has doubtless some
trace of truth in it, but its value is rhetorical rather than
scientific. In the material things of life there can be
no doubt that the general body of wage-earners is much
better off than was the general body of slaves, although
probably our " submerged tenth " suffers more from
actual privation than did the Southern slaves. But so
far as status goes the similarities are deadly. In the
first place, it was not intended that the emancipated
negro should become a citizen. Lincoln declared against
it : "So far as I know, the Judge never asked me the
question before. He shall have no occasion to ask it
again, for I tell him very frankly, that I am not in favour
of negro citizenship. ... If the State of Illinois had
that power, I should be opposed to the exercise of it.
That is all I have to say about it." Here, then, is the
father of modern democracy, who believed in emancipa-
tion without citizenship. Events were too strong for
Lincoln ; the negro obtained the vote. There are
12,000,000 negroes in the Southern States, but they have
not a single representative in Congress. Why ? They
are as effectually shackled by the wage system as they
were by the slave system, and their masters manipulate
the party machine. Their status is that of wage-earners,
and what has the wage-earner to do with government ?
And, be it noted, there is not a single white wage-earner
in Congress, unless Victor Berger, the Socialist repre-
sentative from Milwaukee, ranks as such. He is cer-
tainly the only member of Congress who claims to act for
the wage-earners, and as we unhappily must admit, like
the Labour members in the British Parliament, he accepts
the wage system.

We have already commented upon the particularist
legislation passed by the House of Commons. Will
anybody pretend that such measures as the Workmen's

46 NATIONAL GUILDS

Compensation Act, the Miners' Eight Hours Day Act,
the body of legislation relating to public-houses, the
innumerable Factory Acts, are not measures quite specifi-
cally designed to define and perpetuate the wage system,
and are on all fours, although doubtless more humanely
designed, with the slave legislation adopted in America
in the first half of last century ? And here we stumble
upon another curious resemblance. The overwhelming
majority of the American people, including Lincoln,
believed that the slave system must persist indefinitely ;
the vast majority of the British nation hold the same
belief in regard to the^wage system. Absit omen ! Slavery
disappeared in a gigantic national convulsion ; shall we
in Great Britain choose a more excellent way ?

Perhaps, however, the most effective method of main-
taining the wage system is our educational machine.
It is carefully decked out in democratic trappings ; it
is avowedly designed in the interests of the democracy.
We proudly tell our foreign visitors that the child of
the millionaire, of the merchant, of the shopkeeper may
sit and learn with the child of the artisan. They may ;
but they don't. The reason is not far to seek : the
school curriculum is drawn up by the governing classes
in Whitehall (Oxford and Cambridge preferred), not
for their own children but for the children of the wage-
earners. The employer would be a fool to send his boy
into such an environment. Of course, the democratic
formulae are maintained inviolate. " Look," says
Whitehall, " what a splendid elementary education we
give. Its cost is £24,000,000 a year. It is open to
rich and poor. We do not stint educational appliances ;
the very best desks and seats, beautiful black-boards,
splendid buildings." Who has not heard the whole
story, ad nauseam ? As a matter of fact, it is not
education ; for education implies emancipation, and that
is the last thing our mandarins desire ; it is instruction,

DEMOCRACY AND THE WAGE SYSTEM 47

and very competent instruction at that. An educated
governing class and an instructed wage-earning class
is the ideal aimed at and in part realised. But we
would not dream of libelling Whitehall by suggesting
stupidity. They are no fools, the Morants and Holmes'.
They never give the game away. How do they do it ?
Never in black and white ; there is nothing in the printed
word to which the most exacting democrat could seriously
object. Whitehall learnt its lesson from Lancashire.
The deciding factor in Lancashire in turning out fine
counts is atmosphere ; the dominant element in our
schools is also atmosphere — the impalpable influence
constantly brought to bear upon the child that, when it
has passed a certain standard or reached a certain age, it
will be permitted by a gracious Government to go out
into the world and become a wage-earner. Is that the
atmosphere at Eton or Harrow, Rugby or Marlborough,
Clifton or Malvern, Westminster or Charterhouse ? In
those ancient foundations will be found the governing
atmosphere ; there the children are taught how they can
live most effectually, by means of the wage system, upon
the exploitation of the future labour of the millions of
children in our county and borough schools.

Are we not, however, forcing an open door ? Is it not
evident that all our so-called democracies, Great Britain,
the British Colonies, France, Switzerland, the United
States, are vitiated by the absence of equality, which is
the basis of democracy ? Mr. William English Walling,
in his admirable book, Socialism As It Is, remarks :
" Not only do classes defend every advantage and
privilege that economic evolution brings them, but,
what is more alarming, they utilise these advantages
chiefly to give their children greater privileges still.
Unequal opportunities visibly and inevitably breed more
unequal opportunities." Now it has been recognised
by Socialists for the last thirty years that equality is a

48 NATIONAL GUILDS

mirage, so far as the present generation is concerned.
" But," they cried in their despair, " at least give our
children equality of opportunity." We now see that,
from its birth and on through its schooldays and so
into the workshop, the child of the wage-earner is denied
equality of opportunity. The equality is a dream ;
worse, the opportunity is so exiguous as to be practi-
cally non-existent. Can it now be denied that the
proscription of the wage-earner is rendered inevitable by
the wage system ?

All existing political democracies have the same thing
in common — the wage system — and all betray the same
symptoms of democratic unreality. The spectacle of
plutocratic Britain posing as a democracy is grimly
humorous, but there are historic reasons. The manu-
facturers of Lancashire and Yorkshire (white rose and
red rose combined), having acquired great wealth,
desired political domination. To secure this, they had
to call into political existence a new electorate to balance
the old. They accordingly fought for the extended
suffrage which was won in 1832. But whilst willing to
wear the halo of saviours of their country, they naturally
expected their employees to vote for them with the same
fidelity that the landlords' tenants voted for their feudal
lords. It was war to the death between the feudal and
wage systems. The result was, of course, inevitable.
But the factory lords had no intention of establishing
equality between themselves and their wage slaves.
Just as slave emancipation, leading to political emanci-
pation, became a political necessity to Lincoln and his
associates, so the political emancipation of the wage-
earners became a necessity to the commercial magnates
of our manufacturing centres. And just as the American
politicians successfully nullified political emancipation
by imposing a brutal wage system upon " the land of the
free," so precisely did the commercial magnates proceed

DEMOCRACY AND THE WAGE SYSTEM 49

in Great Britain. They brought to bear upon the dis-
contented workman all the influence that their wealth
gave them ; the churches, which they handsomely sub-
sidised " to the glory of God," were easily brought into
line — John Ball was dead ; the landed gentry soon dis-
covered upon which side their bread was buttered, and
acted with characteristic discretion ; the Universities
took their cue from church and squire ; the Army and
the Navy were " sound." Is it any wonder that, in such
circumstances, the workers were successfully enmeshed
in the wage system and rendered politically powerless ?
How vividly suggestive is the colloquialism that still
persists : the workman " knows his place."

From these conditions, historic and economic, flows a
conclusion : In all the political democracies there are two
classes of citizenship — the active and passive. The active
citizen derives his authority from his economic position ;
the passive or subdued citizen is the wage-earner, who
is inevitably passive because he is caught and choked in
the wage system. The existence of a political Labour
Party does not in the least invalidate this conclusion.
For two reasons : because political Labourism accepts the
wage system and is, therefore, de facto, passive or sub-
dued ; and because it only gains its foothold in Parlia-
ment by the complaisance of Liberal capitalism. If
our Labour leaders deny the truth of this contention,
they can easily test it. Let them discard their present
meliorist programme and undertake a frontal attack
upon the wage system. They will very speedily make
some interesting and fruitful discoveries.

II

The prevailing conception of democracy suffers from a
fatal defect : it assumes that universal suffrage spells
4

50 NATIONAL GUILDS

equality, admittedly the basis of democracy. If, so
runs the argument, every man has the vote, he must be
a citizen, equal with other citizens, and if the electorate
chooses to maintain the existing order of society, then it
follows that society is democratised ; in short, that the
master's ballot paper is no whit more powerful than the
servant's. This idea was so enticing that Mr. Andrew
Carnegie, of Homestead, near Pittsburg, Pa., wrote
Triumphant Democracy. (Incidentally, he wrote it
before the Homestead massacre.) But the argument
completely ignores the conditions precedent to the
casting of the vote — and it is those conditions that settle
the question whether our democracy is social, that is
real, or whether it is a political abstraction. In the
course of our inquiry into the wage system we have
discovered that economic power must precede political
power ; also, that the wage system is the negation of
democracy. If, therefore, in the social structure of the
nation, we find that the majority of the voters, or citizens,
possess political power without any corresponding econo-
mic power, it is evident that real control must rest with
those who are economically strong enough to impose
their will. Ex hypothesi, it becomes evident that the
struggle for social democracy must be fought out in the
economic and not in the political province. But, in-
asmuch as the wage system nullifies social democracy,
it is clear that the struggle for economic power can only
be waged on equal terms after the wage system has been
destroyed. Need we add that the practical issue from
these facts is that in fighting for the abolition of the wage
system, Socialists, democrats and trade unionists meet on
common ground and are faced by a common enemy ?

We have seen that the existence of two main divisions
of society (however sub-divided) — the possessing classes
and the wage-earners — creates two types of citizenship,
the active and the passive, which accurately respond to

DEMOCRACY AND THE WAGE SYSTEM 51

the power, qualities and psychology of the two economic
divisions. Vote or no vote, what actually weighs in
society is the power to exploit. " Money talks," is the
way this truth is phrased in democratic America. In that
austere Republic no pretence is made that the wage-
earners are entitled to any consideration. The deter-
mining factor is Wall Street and not the American Federa-
tion of Labour. Indeed, Mr. Samuel Gompers, the head
of that important Labour organisation, has only just
escaped twelve months' imprisonment for upholding
the elementary rights of trade unionism. But the
passive quality of the wage-earners' citizenship is seen
more clearly in New Zealand, a British Colony famous for
its " Socialistic " experiments. Was not the late Richard
Seddon the democrat and Socialist par excellence ?
Did he not receive a royal welcome by the Fabian Society
when he came to London ? If anywhere, then, our
theory of active and passive citizenship should receive its
quietus in New Zealand. Tell the New Zealander that
he is a wage slave and he feels insulted. He will in-
dignantly declare that nowhere in the world is the dignity
of labour more respected. And he is perfectly right.
But what does it amount to ? Are there any indications
that the citizenship of the wage-earner in New Zealand
is being transformed from passive to active ? Let us
see the effects of that social legislation upon which New
Zealand prides itself. Compulsory arbitration has un-
doubtedly strengthened the employers against their
employees. Mr. William Pember Reeves, the framer of
the Act, has told us that its first object was to put an
end to the larger and more dangerous class of strikes
and lock-outs. The second object was " to set up
tribunals to regulate the conditions of labour." In
other words, as effectually as possible to perpetuate the
wage system by means of regulation. Mr. MacGregor
tells us that in this it has been completely successful.

52 NATIONAL GUILDS

The law allows it and the Court awards it. Thus, in
1906, the Chief Justice of New Zealand, not of Russia,
in deciding a case, said : " The right of a workman to
make a contract is exceedingly limited. The right of
free contract is taken away from the worker, and he has
been placed in a condition of servitude or status, and
the employee must conform to that condition." So
much for compulsory arbitration in New Zealand. It
has crystallised the wage system into what the Chief
Justice calls " servitude." Now for the economic con-
dition of New Zealand. " It must be admitted," write
La Rossignol and Stewart, " that the benefits of land
reform and other Liberal legislation have accrued chiefly
to the owners of land and of other forms of property,
and the condition of the landless and propertyless wage-
earners has not been much improved." Another writer,
Mr. Clark, remarks : " The general welfare of the working
classes in Australasia does not differ widely from that
in the United States. . . . There appears to be as much
poverty in the cities of New Zealand as in the cities of
the same size in the United States, and as many people of
large wealth." In other words, democracy is as illusory
in this young colony as it is in America or Great Britain.
And, of course, for the same reason : the wage system is
common to all. It is certainly a striking instance of
active and passive citizenship operating in a political
democracy.

We know how Labourism swept New Zealand under
Seddon. We now know that Labourism, built upon
the acceptance of the wage system, produces with practi-
cally no variation active and passive (or subdued)
citizenship. It is the same in Australia, where a Labour
Government is actually in office but not in power. Let
us quote C. E. Russell :

" Hence, also, the Labour administration has been
very careful not to offend the great money interests

DEMOCRACY AND THE WAGE SYSTEM 53

and powerful corporations that are growing up in the
country. Nothing has been done that could in the least
disturb the currents of sacred business. It was recog-
nised as not good politics to antagonise business inter-
ests. ... It was essential that business men should
feel that business was just as secure under the Labour
administration as under any other."

Mr. Russell also tells us that in this happy democratic
community the working classes are no less exploited
than before. Mr. Dooley remarked that he didn't
care how the people voted so long as he did the count-
ing. The active citizens may as truly say that they
don't much mind if passive citizenship becomes a par-
liamentary majority, so long as it remains passive by
entanglement in the wage system.

Politics is largely a question of psychology. Economic
subjugation brings in its train certain definite psycho-
logical results, which, in their turn, colour and dominate
politics. Now the lesson to be learnt from Australia and
New Zealand is plainly this : That political power cannot be
transmuted into economic power. It is as impossible a
transformation as to turn a sow's ear into a silk purse.
If the sow's ear none the less contends that it is actually
a silk purse, and " puts on airs according," it neverthe-
less remains a sow's ear. There is a familiar axiom
in Euclid to the same effect. With the examples before
us of every political democracy in the world, is it not
high time that we ceased to believe in the claims of the
politicians to be our economic arbiters ? Is it not
abundantly clear that a community, four-fifths of which
is rendered servile by the wage system, cannot possibly
slough off the psychology of servility and claim to be a
community of free men politically whilst remaining
servile economically ? Thus we discover that the dis-
tinction between active and passive citizenship is one
of substance and profound significance. Wherever the

54 NATIONAL GUILDS

wage system exists the same psychological phenomena
appear. There is absolutely no exception to the rule.

Now the principle of activity is life; of passivity, absence
of life, inertia — in the spiritual sense, death. Is it the
fact, then, that the wage system produces social inertia
and spiritual death ? Let us remind our readers that the
classical economists as well as the employers regard
labour as a commodity. Thus, if John Smith engages
to work for wages for William Brown, the two parties
to the contract have a totally different conception of the
spiritual values of the transaction. Brown buys what
he regards as a commodity ; but Smith sells something
that to him is more than a commodity — he sells his life.
But just as you cannot eat your cake and have it, so
you cannot sell your life and yet retain it. Brown has
Smith in his pocket because Smith's life is in Smith's
labour, and the life, having gone into the labour, leaves
Smith inert, lifeless, spiritually dead. Whatever the
politicians may tell him, he is inevitably a passive citizen
because, in the guise of a commodity, he has sold his life.
Every week he sells it ; every week he and his family
mount the altar and are sacrificed. How different is
it with Brown ! He not only possesses his own soul,
but has Smith's in addition. Smith's life enters into
Brown's at breakfast, lunch and dinner. The price that
Labour pays for enduring the wage system is its own
soul ; the political sequel is passive or subdued citizen-
ship. And even though the Smiths sit on the Treasury
Bench and put on the airs of the master, they
cannot escape from their economic subjugation, with
its correlative civic passiveness, if they remain content
to sell their brethren into the servitude of the wage
system.

DEMOCRACY AND THE WAGE SYSTEM 55

III

It must now be obvious that passive citizenship is
inconsistent with a true conception of democracy. If
the economic integration of society leaves the active
citizens in control of the essentials of life, it follows that
the passive citizens (tied hand and foot by the wage
system) must remain in servitude, and therefore demo-
cracy is nullified. The moral is too clear even to be
cavilled at : economic power is different in kind and
substance from political power. It is not a case of
varying degrees of the same power, like the high and
low voltage of electricity ; economic and political power
spring from altogether different sources. This is the
real answer to the thousands of inquiries now anxiously
made into the failure and futility of the Labour Party.
That group of honest but stupid men is obsessed with
the belief that the conquest of political power carries
in its train the conquest of economic power. It is a
tragic delusion — as tragical as a bankrupt manufacturer
trying to reorganise his factory and his affairs by becom-
ing an adept at stamp collecting. A prosperous manu-
facturer may, appropriately enough, collect stamps or
pictures or brasses or china, but his capacity to do so is
derived from his economic power, that is, his power to
exploit labour by keeping labour inside the limits imposed
by the wage system. We hear from time to time of
some collector who becomes so absorbed in his hobby
that he neglects his business and finally involves him-
self in ruin. When he explains to his creditors that the
trouble arose from his devotion to intaglios, they do not
applaud him for his noble pursuit of the beautiful or the
curious, and wish him god-speed in his artistic activities.
On the contrary, they send the priceless collection to the
auctioneer and seize the proceeds. They also seize the

56 NATIONAL GUILDS

bankrupt's factory and everything else he possesses.
Exit the bankrupt, who may even be forced into the
ranks of the wage-earners and so changed from an active
to a passive citizen. Thus is prosperity taught that,
before it orders its life on lines of amenity and beauty,
it must make its economic position secure. But the pity
of it is that Labour will not learn this obvious lesson.
Politics is the science of social life. But social life, be
it beautiful or ugly, springs out of the prevailing economic
conditions. If the essential factor of these economic
conditions remains unchanged, social life cannot be
modified to any degree inconsistent with the essential
economic factor, precisely as the manufacturer cannot
indulge his hobbies beyond his means. The essential
economic factor is the wage system. Thus we witness
the tragical spectacle of the Labour Party vainly striving
to change the form of social life without transforming
the essential economic factor — the wage system.

Mr. Keir Hardie is the first man in the Labour Party
who ought to understand the true meaning of the wage
system. He is a miner by extraction. Let us, then,
tell him the story of the checkweighman. Just before
the time that Mr. Keir Hardie was shaping his infant
mind into the Liberal mould, his mining hero, Alexander
Macdonald, had engineered a valuable reform in the
mining industry. The miners were paid so much per tub
or hutch sent to the surface. But they were perpetually
victimised by unscrupulous coal-owners, who arbitrarily
deducted from wages for tubs that were alleged to be
improperly filled. The miner was completely at the
mercy of the employer or his agent, and had absolutely
no check upon the weight of his own coal production.
Accordingly the men claimed the right to appoint one of
their own colleagues to act for them at the pit's mouth
and check the weights. In 1859 there was a series of
strikes to effect this object, and several large collieries

DEMOCRACY AND THE WAGE SYSTEM 57

conceded the boon. The South Yorkshire Miners' Union
next tried to insert a clause in the Mines Regulation Bill,
making the appointment of a checkweighman com-
pulsory. After a considerable parliamentary struggle,
the Act of i860 empowered the miners to appoint their
own checkweigher, the choice being confined to persons
actually employed in the particular mine. It was a real
victory for the working miners : not a political victory,
be it noted, but an economic victory, because it might
have paved the way for further democratic encroach-
ments upon the wage system. It was a germ that, had
it been allowed to develop inside the economic sphere,
might have changed the history of the wage system
throughout the world. It was a breach in the capitalist
fortress. On this foundation the wage-earners might
have built a considerable structure of joint control. If
it was right and fair to check the output, it was equally
right and fair to check the selling prices, for they also
bear upon wages. It was equally equitable for the men's
representative to check the transit rates, to check, in
short, every item that adds to the cost of management —
for that also bears upon wages. The employers were alive
to these possible developments ; the men were blind to
them. The employers promptly proceeded to put every
obstacle in the way of the men's checkweighman, some
serious, some trivial, all irritating and distracting. Thus
Normansell, a checkweigher at Barnsley, was promptly
dismissed, and two years' litigation followed. For
twenty years the coalowners devised dodges to hamper
the work of the men's representative. Sometimes he was
refused close access to the weighing-machines ; sometimes
the weights were fenced up so that he could not see them ;
his calculations were constantly disputed, and generally
his interference was resented. Finally, as we know,
the Act of 1887 gave the checkweigher all necessary power.
To-day he remains a mere adjunct to the system of wage-

58 NATIONAL GUILDS

calculation — useful, no doubt, but now of no signifi-
cance.

How is it that this victory remains an isolated inci-
dent in the struggle between masters and wage-earners ?
How is it that the men did not proceed to widen the
breach ? There are two reasons : (a) because it had
not been revealed to the men that the real enemy was
the wage system, which they superstitiously believed to
be not only inevitable but justifiable ; (b) because, under
the guidance of Macdonald, Burt, Fenwick, Pickard, Cowie,
and others, they were already looking to politics to
accomplish for them that which we now know is beyond
the power and province of politics to achieve. The sequel
is sad and disheartening. The checkweigher, instead of
strengthening himself inside the economic organisation,
became the union and political organiser in his own dis-
trict. In this way, in the course of time, the well-organ-
ised miners were enabled to send a small squadron of
their members to Parliament, where they are now affili-
ated to the devitalised or passive Labour Party. Burt
and Fenwick are openly allied to the Liberal Party ; the
others are Liberal in all but name. Meantime, real wages
have fallen, and strike after strike has ended in fiasco.
Even now apparently they have not yet learnt the
simple truth, that in no conceivable circumstances is it
possible by political means to change passive into active
citizenship. Once again we reiterate the obvious :
there is only one way to achieve such a transformation :
first, we must destroy the wage system ; second, we
must build upon its remains a Guild organisation that will
combine industrial democracy with communal solidarity.

Having at length realised that the wage system is
the one great barrier against human emancipation, we
now understand "why the work of the great liberators
and revolutionists has been rendered nugatory. It is
not for us to depreciate the labours and heroic struggles

DEMOCRACY AND THE WAGE SYSTEM 59

of the great Europeans, who toiled and moiled for liberty.
Kossuth, Mazzini, Swinburne, Taylor, the Chartists,
Feargus O'Connor, Lloyd Garrison, Whittier, Lam-
menais, and Lacordaire, even Lassalle (who, however,
visualised the revolution through politics) — these great
names, and a cloud of others, not forgetting the phil-
osophers, artists and musicians, who dreamt of human
liberty and worked for it, each in his own medium, were
they now to awake from their sleep would find that their
great tradition is dead. They would discover to their
dismay that the democracy of their hopes is submerged
in the dreadful servitude of the wage system.

VIII

POLITICS AND THE WAGE SYSTEM

In discussing the Great Industry and the Wage System
we remarked of the Labour Party that " it made a great
cry but brought back no wool." The Labour Leader
retorted upon us that " the strike yields more noise
than wool," and then impenitently adjured the
working classes " to aim at the peaceful conquest of
political power," because it believes that method to be
the only way to establish industrial democracy. It
proceeds with unction to impress the wage-earner with
the sorry results of recent strikes. Then, in a moment
of inspiration, it goes on : " The strike will not of
itself take the toilers very far on their road to liberty,
though it may powerfully stimulate the sluggish action of
the House of Commons." Then, apparently uneasy at
making such a significant admission, it adds to a series
of monumental misstatements : " The rail way men had
a strike ; in so far as they gained anything, it was by
parliamentary intervention. The miners had a strike ; in
so far as they gained anything, it was by parliamentary
intervention. The transport workers have a strike ;
if they gain anything, it will be by parliamentary inter-
vention."

The issues are here clearly joined. Let us examine

the contentions of this obviously inspired article.

60

POLITICS AND THE WAGE SYSTEM 61

(i) " The railwaymen had a strike ; in so far as they
gained anything, it was by parliamentary intervention-"
It does not seem to have occurred to the scribe who
penned this extraordinary assertion that there would
have been no parliamentary intervention had there been
no strike. In so far, therefore, as the men gained any-
thing it was primarily due to the strike. At the very
least, it " stimulated the sluggish action of the House of
Commons." But did the railwaymen gain anything by
parliamentary intervention ? It is common knowledge
that the politicians, led by Mr. MacDonald, robbed the
strikers of the fruits of their victory. The best evidence
of that is that they are seriously considering the advisa-
bility of another strike. They know perfectly well
that they will get nothing without a strike. And,
further, next time they strike, they will keep Mr. Mac-
Donald at arm's length.

(2) " The miners had a strike ; in so far as they
gained anything, it was by parliamentary intervention."
This is Mr. MacDonald's reply to Punch's cartoon,
where he is represented as locked outside the miners'
conference room. It is true, however, that Mr. Mac-
Donald finally squeezed through the door. With what
result ? The miners were humbugged by the Labour
Party and sold by the Government. If they had kept
Mr. MacDonald out of their conference room to the bitter
end, they would have done far better than they did. In
any event, had there been no strike, there would have
been no parliamentary intervention. In so far, therefore,
as the miners gained anything, they gained it primarily
through the strike.

(3) " The transport workers have a strike ; if they
gain anything, it will be by parliamentary intervention."
Observe the use of the present tense. Let us state the
case correctly : " The transport workers had a strike.
They gained a substantial victory by rigidly excluding

62 NATIONAL GUILDS

the politicians. They now have a local strike. The
politicians are striving very hard to impose compulsory
arbitration and to tie the men down by a heavy financial
forfeit. The men will be fools if they let Mr. MacDonald
have anything to do with their affairs. In any event,
it is admitted that parliamentary intervention cannot
possibly give the men anything more than was gained
by their strike when they wisely let the politicians stew
in parliamentary juice."

Thus we see that the instances cited by the Labour
Leader prove conclusively that " the conquest of
political power," so far from strengthening the wage-
earner economically, is only a disastrous source of weak-
ness. But it is no part of our case to justify any of
these strikes. Whether they succeeded or failed is im-
material to the argument. They were symptoms of the
class struggle rather than a conscious effort to end the
class struggle by smashing the wage system. The par-
liamentary Socialists have some grounds for their
assertions that strikes are unsuccessful. But they are
unsuccessful because they have no objective. That, how-
ever, is by no means the whole story. The Labour
Leader makes two significant admissions : it admits
that strikes stimulate the sluggish action of the House of
Commons ; it admits that strikes precede parliamentary
intervention. In fact, it gives away the whole case for
political action. Had there been no railway strike,
Parliament would have done nothing ; had there been
no miner's strike, Parliament would have done nothing ;
there was a successful transport strike and Parliament
did nothing. In other words, when Parliament essayed
to do something, it found it could do nothing ; when it
consciously did nothing, then and only then did the wage-
earners gain any substantial benefit. Further, it must
be remembered that the railway men are just as much
transport workers as the other transport workers. Why

POLITICS AND THE WAGE SYSTEM 63

did they not all strike at the same time ? The answer
is simple : because the railwaymen were under political
influences which benumbed their freedom of action,
with the result that the non-political transport workers
won their victory, whilst the political railwaymen,
thanks to the Labour Party, gained practically nothing.

We shall, in due course, consider the precise function
of the strike as an instrument of economic emancipa-
tion. It is first necessary to reiterate and emphasise
the cardinal fact that economic power is different from
and entirely independent of political power. Let us
focus our conclusions so far as we have got.

In our first chapter we affirmed that " there can be
no emancipation save only from the wage system."

In our second chapter we traced the origin of the I.L.P.
and discovered that its policy was meliorist, and in
consequence (necessarily accepting the wage system as
the basis of its activities) it had completely failed to arrest
the fall in real wages ; that postulating the continuance
of the wage system, the I.L.P. had also to postulate the
continuance of rent, interest and profits.

In our third chapter we demonstrated how the
development of industry had finally killed out any oppor-
tunity for even the ambitious workman to pass out of the
entanglement of the wage system, and proved that
economic power must precede political power.

In our fourth chapter we proved conclusively that
State ownership, involving the continuance of the wage
system, strengthens rent and interest, and leaves the
workman practically no better off, because he remains
in bondage to the wage system.

In our fifth chapter we showed that labour could no
longer carry the handicap of rent, interest and profits,
and that the only way to shake off the burden was to
stop the exploitation of labour by the substitution of
private capitalism by National Guilds.

64 NATIONAL GUILDS

In our sixth chapter we demonstrated that unem-
ployment is an integral part of the wage system, and that
all schemes to abolish unemployment whilst retaining
the wage system are doomed to failure.

Then followed three chapters in which we proved
that all political democracies whose economy is based
on the wage system, so far from emancipating labour,
leave it in economic servitude. We further proved that
mere political citizenship signified nothing, because the
possessing classes evolved an " active " type of citizen-
ship and the wage-earning class evolved a " passive "
type ; that, in short, the maintenance of the wage system
defeated the theoretical claims of the classical demo-
crats, producing material and psychological results
peculiar to a servile state.

The central argument is plainly this : that economic
methods are essential to the achievement of economic
emancipation ; that political methods are useless, be-
cause all political action follows and does not precede
economic action ; that economic power is the substance
and political power its shadow or reflection. Labour,
therefore, in seeking first the conquest of political power,
is grasping at the shadow and leaving the substance
untouched.

II

It is at least curious that those who intellectually re-
main entangled in the wage system also remain entangled
in the political system. If you cannot see through the
real meaning and intent of the wage system, you cannot
see through the essential bankruptcy of politics as under-
stood to-day. This is only another way of saying that
politics are used by the meliorist to ameliorate the harsher
conditions of wagedom — to ameliorate, never to abolish.
As we have already proved that economic power precedes

POLITICS AND THE WAGE SYSTEM 65

political power, it follows that the pursuit of politics
cannot fundamentally transform the economic con-
ditions. The title-deeds remain with the possessing
classes. But the real struggle is to obtain them. The
most that politics can do is to modify the conditions that
surround the title-deeds. Thus the Fabian programme,
inspired by Mr. Sidney Webb, never hints at effective
expropriation ; it would humanise factory conditions,
lay stress upon public health, mitigate destitution, reduce
the hours of labour, impose a minimum wage — any-
thing and everything save the imperative thing which
is possession and control of the means of national and
individual life. But we have further discovered that all
these measures, each in its own way, actually strengthens
the grip of the possessing classes and yet more securely
validates their claims to the title-deeds. Parliament,
by means of factory Acts and regulations, humanises the
conditions of factory life. The result is that labour grows
more efficient, and consequently more efficiently produces
surplus value and more of it for the holders of the parch-
ments. The same effect is produced by improving the
public health. It is good economy, operating in the
interests of those legally and socially permitted to
exploit labour. It is much more remunerative, and
infinitely more pleasant, to exploit good human material
than incompetent human material. The mitigation of
destitution is also good economy for those who can benefit
by it. A minimum wage, as we have shown time and
time again, has precisely the same effect ; it justifies the
exploiter in rejecting damaged human material and
exploiting only the best available labour. To this
indictment of social reform there is absolutely no answer.
Nor can the politicians explain away not merely the
relative but the actual decline in wages, notwithstanding
a generation of social reform. The Insurance Act will
obey the same law. It is a very good thing for the
5

66 NATIONAL GUILDS

employers. Who then can doubt that it is worse than
foolish, it is criminal, to look to the political machine to
abolish the wage system ? Foolish, because it is a
blunder ; criminal, because it is one of those blunders that
are crimes.

A striking instance of the truth of these contentions
is found in the engaging personality of Mr. George
Lansbury, M.P. Here is a little sketch of him which
we read in the press :

" For a time Mr. Lansbury was hon. secretary of the
Liberal Association for Bow and Bromley, and he has told
that what first impressed him with ' the necessity for
something more than orthodox politics ' was this :
' When canvassing in one of the very poor districts of
Bow a woman came to the door dressed only in a sack.
A hole had been cut at the top, and two slits at the side
served for the arms. She asked me, with an oath, what
was the good of a vote for her and her unemployed husband
when every scrap of their clothing had been pawned ;
there was not a piece of furniture in the place, and nothing
but starvation stared them in the face ? With all the
scorn she could command she bid me clear out. That
incident pulled me up at a halt, and from that day to this
I have tried to study the condition of the people and to find
out how politics could help the workers to win social justice.'
It was this little incident, Mr. Lansbury said, that really
drove him out of the Liberal ranks into Socialism."

Impersonally considered, this little story is a synopsis
of opportunist Socialism during the past thirty years.
We ask Mr. Lansbury to tell us in what way has his
devotion to politics emancipated this unhappy woman ?
Mr. Lansbury realised that " something more than
orthodox politics " was needed to meet such a desperate
case. What is that " something more " ? Has he
achieved it ? Can he achieve it in the political sphere,
if it be " something more than orthodox politics " ?
We can rely absolutely upon Mr. Lansbury's honesty

POLITICS AND THE WAGE SYSTEM 67

of purpose, and accordingly we invite him to tell us
what he conceives that " something more " to be. The
information he could give on this point would be a most
valuable contribution to our present inquiry. And, at
the same time, would Mr. Lansbury tell us how it would
be possible to emancipate the woman in the sack without
disturbing the existing wage system ? The woman
in the sack, like Markham's " man with the hoe," is
a portent, a symptom, and a symbol. What has she to
do with politics or politics with her ? Is her condition,
au fond, political or economic ?

That the Labour Party is safely " orthodox " is
proved beyond cavil in a book recently issued by Mr. J.
M. Robertson, M.P., entitled The Meaning of Liberalism.
This official Liberal tells us that " the Labour Party has
exercised a useful forward pressure on the Liberal Party,
and in so doing has been an invaluable ally of the Radical
section. The practical ideal is that this pressure should
usefully continue." We must have said something like
this at least a thousand times, but we were supposed to
be prejudiced against the Labour Party, and were not,
therefore, believed. Mr. Robertson knows. Will Mr.
Lansbury explain ?

Now let us consider the situation in which the Labour
Party necessarily finds itself as "an ally of the Radical
section." It can be found in Mr. Robertson's book.

We come to the bones of the business, however, when
Mr. Robertson assures us that " production for profit
will assuredly continue for centuries, profit being not
merely the condition of the furnishing of liquid capital,
but the test of industrial efficiency. Fluid capital is
about as far from the stage of collective management as
the tides. Society will in the near future deal with
capital as it deals with marriage and the family — not
communalise it, but prescribe for it legal conditions.
And the capitalist class will share in the framing of the

68 NATIONAL GUILDS

conditions." What does this mean in plain terms ?
That the wage system will continue for centuries ; that
rent, interest and profits must indefinitely continue ;
that fluid capital cannot be communalised.

To a party holding such views, the Labour Party,
including Mr. Lansbury, are allied. Please observe how
admirably the coalition works out. The Radicals, as
we have seen, do not believe in any fundamental econo-
mic change ; they are content to " prescribe the legal
conditions." With them, politics has nothing to do
with the economic structure of society. If, therefore,
they can keep the Labour Party in line with their schemes
of social reform, all goes well. But to the Labour Party,
which declines to tamper with the wage system and seeks
only what politics can give it, this alliance is equally
acceptable. Thus it comes about that those high-souled
and immaculate Scotsmen, J. M. Robertson, M.P., and
J. R. MacDonald, M.P., can with a clear conscience pursue
their petty political careers, what time wages are falling
and Mr. Lansbury is sadly pondering " the something
more " and the true meaning of " unorthodox."

Ill

We left Mr. Lansbury, M.P., vainly seeking the
economic pea under the political thimble, and troubled
in spirit because he realised that " something more than
orthodox politics " was required. If " something more "
is needed it seems to follow that politics does not suffice.
We commend to Mr. Lansbury the words of Browning :
" Oh ! the little less and what worlds away ! " Now Mr.
Lansbury represents a train of sentiment — sentiment,
not thought — that feels deeply, and even bitterly, the
tragic industrial situation, and is willing to fight and
struggle for economic emancipation. It is a sentiment that

POLITICS AND THE WAGE SYSTEM 69

has been nurtured in politics and finds it exceedingly
difficult to conceive any alignment of the democratic and
industrial forces on any other plane. Mr. Lansbury
accordingly finds himself beating the air as a unit of the
Labour Party, but unhappy and distracted that nothing
is done. Probably he still has hopes that through the
instrumentality of politics something even yet may be
accomplished. The delusion will, of course, persist until
Mr. Lansbury and his congeners realise the plain fact that
economic power must precede political power ; that to
strive for economic power through politics is as foolish as
looking for figs on thistles. We have proved that in-
dustrially politics are inevitably and perennially sterile.
Their function is not industrial ; their origin is not
industrial ; when they enter the industrial world they
become amateurish and ridiculous. Why cannot Mr.
Lansbury see and realise these simple and fundamental
facts ? In recounting the story of the woman dressed
in a sack, Mr. Lansbury told us that the lesson he learnt
was the inefficacy of " orthodox politics as a remedy for
such a horrible state of affairs. A quarter of a century
has sped its course, during which time thousands of
Socialists have sacrificed time, money, and the amenities
of life to " unorthodox " politics, in the hope and expec-
tation that such an episode should never recur. Vain
hope ! A few days after we had penned our criticism, the
Daily Chronicle appeared with a column crossheaded
thus :

" STARVING IN THE EAST END

" Baby Wrapped in Paper for Lack of Clothes
" Man Dressed in a Sack "

It will, of course, be said that all this is abnormal because
of the strike. It is not abnormal ; it is merely more
dramatically visible. Just as nations — Germany and

70 NATIONAL GUILDS

Great Britain, for. example — are really carrying on a
warfare by means of excessive military and naval expendi-
ture, even though not a shot be fired, so in like manner is
the industrial war ever with us, strikes or no strikes. Its
victims suffer in obscurity, die and disappear, an appalling
death-roll every year. " The Woman in the Sack " a
quarter of a century ago is own sister to " The Man in the
Sack " of last week. What is the family bond uniting
them ? The wage system. Both are the victims of an
industrial organisation that is spiritually and economically
based upon the wage system. The " woman in the
sack," living and dying in the obscurity of a slum, was a
piece of human wastage thrown upon the wage system's
scrap-heap; the " man in the sack" is sacrificed in precisely
the same way by those who control the wage system.

It is the grim reality of industrial facts such as these
that makes us so impatient of the Labour Party. We are
continually being asked why we criticise it with such
sustained hostility. " Surely," says the Lansbury type,
" something can be made of it, some good can come out
of it ? " Let us, as briefly as possible, define our attitude
towards the Labour Party.

First, then, let it be noted that even its most fervent
apologists admit that it has failed to come up to their
expectations ; it has not " made good." We have ex-
plained that it could never hope to do so because it relied
upon politics to do what politics are inherently incapable of
doing. Fundamentally, therefore, we cannot find any
contact with it. Nor is this a purely theoretical objection.
Those who have been associated with the Socialist move-
ment for fifteen or twenty years will vividly remember
what high hopes were based upon the political adventure.
At long last something effective was to be accomplished
for the emancipation of the wage-earner. A feeling of
revolution, of far-reaching and beneficent change, inspired
thousands of men and women. They " saw distant gates

POLITICS AND THE WAGE SYSTEM 71

of Eden gleam, and did not deem it was a dream." An
army of tortured wage-slaves put their faith in the Keir-
Hardie-MacDonald combination ; they freely sacrificed
time, effort, and money to achieve the great end. They
are now fast realising that they have been dosed with
quack remedies by quack doctors, and the awakening is
very bitter. So bitter, indeed, that even now the vast
majority of the political labourists, although conscious that
their disease is worse than ever, still cling to their old
medicine men and turn fiercely upon their critics. There
is a curious psychological relation that springs up between
doctor and patient. The more the doctor botches the
case, the more does the patient believe in him. There are
thousands of doctors who play upon this faith by giving
their patients bottles of innocuous medicine. If a doctor
said to his patient : " You do not want medicine ; you
require a regular shaking up of your habits of life, your
diet, your sanitation, your hours of work, your exercise ;
you are in a thoroughly unhealthy condition," the patient
would probably plaintively say : " But, doctor, aren't
you going to give me any medicine ? " There are honest
doctors who stand firm and decline. Their practice suffers
in consequence. It is unfortunately true, however, that
the vast bulk of the profession honestly believe in drugs,
to the inevitable deterioration of the health of the com-
munity. The medicine men of the Labour Party are in
this position. They do not face the evils obviously arising
out of the wage system, or tell their patients that these
diseases must continue so long as the wage system con-
tinues. They drug the symptoms and leave the cause
severely alone. They prescribe political pills for economic
earthquakes ; they put political salve on the economic
cancer. When we remember all the human effort, emotion,
faith, and sacrifice that have gone to the upbuilding of the
Labour Party, is not the result a mockery, a scandal, a
tragedy ?

72 NATIONAL GUILDS

Just as the medical fraternity permits no criticism
from the lay population, so this political fraternity of
medicine-men resents any kind of outside criticism.
They listen and sometimes act upon the advice of some
friend who is " sound on the goose " ; criticism from any
other source is rank impertinence and not to be tolerated.
The morale of the Labour Party in this respect is deplorable.
It has steadily shed its serious and thoughtful supporters,
with the result that it does not possess a single man of any
intellectual distinction. To be in the company of Labour
members is to be in the company of American political
bosses. Their attitude towards life, their political
vocabulary, their methods, are significantly similar. Now
no great association of men, political, religious or social,
can be effectually held together without some spiritual or
intellectual basis. Merely to exist upon the day's oppor-
tunities is to court ultimate destruction. To take the
long view requires both moral courage and mental
strength. In this respect the Labour Party fails. It
shrinks from the discussion of essentials, largely because
it has no essential principles. Compare, for example, its
treatment of that new element in the Labour movement
which we vaguely term Syndicalism with the approach
made to it by Jaures. The French Socialist leader knows
the dynamic power of ideas ; the Labour Party shuns new
ideas like the plague. Spiritual and intellectual conflict is
the food upon which great souls thrive. We fear it is too
strong nourishment for the Labour Party. We would
certainly relax our critical attitude towards it if only it
would betray some kind of intellectual appreciation of
ideas and principles. We do not ask it to agree with us ;
we only ask that it should explain intelligently the faith
that is in it. But every moral and intellectual test that
we apply to the Labour Party proves it to be amorphous,
and utterly unresponsive to serious criticism or suggestion.

IX

THE ECONOMICS OF THE WAGE SYSTEM

We have now travelled rapidly round the wage system
and examined its effects from all sides. We see that the
great obstacle standing in the way of economic emanci-
pation— the economic must precede the social — is the
wage system. Yet the idea of wages has so penetrated
the minds of people that we still find it difficult to con-
vince them that any social and industrial system is
possible without wages in some form or another. So was
it in the Southern States of America before the war.
" Slavery must exist in some form or another ; there
are the slaves, what else can you do with them ? " Yet
the status of slavery was abolished. To-day, men of
good will are saying in varying accents very much the
same thing : " the wage system must exist in some
form or another ; there are the workmen, what else
can you do with them ? " Even such practised writers
on social economics as Beatrice and Sidney Webb seem
incapable of grasping any economic change that would
abrogate the wage system. Thus, in their recent
articles in the Daily Herald on Syndicalism, they go
to considerable pains to prove — unsuccessfully — that
Syndicalism would merely exchange the wage system for
something so like it as to be practically indistinguishable
from it. They Conjure up a massive and tyrannical

74 NATIONAL GUILDS

Syndicalist bureaucracy whose authority would transcend
anything ever suggested by Fabian Socialists. We are
not Syndicalists, but National Guildsmen, and in a
certain sense our withers are unwrung. Nevertheless,
recognising as we do that half of our social theory is
Syndicalist, we cannot afford to let this criticism pass
unchallenged.

The cardinal fact in the discussion is simply this :
Mr. and Mrs. Webb and the cult they inspire decline
to accept the common meaning of the term " wages."
Anything the worker brings home, be it money or token
conveying so much power to consume, is to them wages.
It does not matter to them that the conditions which
enable a working miner to bring home " thirty or fifty
or seventy shillings " have anything to do with the
question. It is, they think, simply hair-splitting to call
them anything else but wages. Twenty years ago, there
was no Socialist leader who more strongly insisted upon
clearly defined terms than Mr. Sidney Webb. He
recognises that the problem of wages is immensely
important ; he has been writing upon wage conditions
for almost a generation : does it not occur to him that a
clear definition of wages is a condition precedent to
any serious discussion of the subject ? If, during the
slavery debates, some pretentious thinker had argued
that slaves were, after all, wage-earners, their wage
being their housing and their rations, the Sidney Webb
of that period would have been the first to castigate the
man for not mastering the plain meaning of clearly
understood terms.

The term wages ought to be the most accurately
defined and most clearly understood word in the language.
Our means of livelihood constitute the foundation not
only of our economic and social existence, but also of our
spiritual conception of man's dignity and destiny. The
psychological effects of the wage system are the true

THE ECONOMICS OF THE WAGE SYSTEM 75

measure of its degrading influence upon our national life ;
yet, monstrous though it be, there do not appear to
be half a dozen thinkers in the land who take the trouble
accurately to understand the real meaning of wages, to
say nothing of its thousand implications.

At the risk, then, of wearying our readers, we must try
to define the real meaning of wages. We have already
done so at various stages in this book ; we will now
focus what has already been written.

Wages is the price paid for labour power considered
as a commodity.

The price is based upon the cost of subsistence
necessary to the maintenance of that labour power and
its reproduction.

The price is further varied by the quality, scarcity,
or organisation of the labour power. Thus a higher price
may be paid (but not necessarily) for skilled labour, or
for special labour that is scarce, or for labour that
strengthens its economic power by means of trade union
organisation. Low wages may be, and are, paid to
unorganised skilled labour ; higher wages may be, and
are, paid to unskilled, but organised, labour. So closely
is organisation related to the price paid over the sub-
sistence level, that, broadly speaking, skilled labour
almost connotes organised labour.

The price paid for labour power may be crudely
based upon a recognised weekly sum that will barely
ensure subsistence ; it may be paid for specially applied
tasks in a form known as piece-work. But piece-work
prices are based upon subsistence plus the amount
exacted by organisation.

The fundamental fact, common to every kind of wage,
is the absolute sale of the labour commodity, which thereby
passes from the seller to the buyer and becomes the buyer's
exclusive property. This absolute sale conveys to the buyer
absolute possession and control of the products of the pur-

76 NATIONAL GUILDS

chased labour commodity and estops the seller of the labour
commodity from any claim upon the surplus value created
or any claim upon the conduct of the industry. The
wage-earner' s one function is to supply labour power at
the market price. That once accomplished, he is economi-
cally of no further consideration.

It therefore follows that effective co-management
(whether with the State or the employer) and the main-
tenance of the wage system are mutually exclusive. It
also follows that the army of wealth-producers can
never change their status inside the wage system.

Yet even serious thinkers persist in regarding such
a tremendous economic and social fact as of no import-
ance. They think it does not much matter so long
as the worker brings home " his thirty or fifty or seventy
shillings each week." The slave status did not matter
so long as the slave was reasonably sleek.

Now let us look more closely into our definition. We
have already disavowed the theory that labour power
must be regarded purely as an economic commodity.
We have asserted that labour means a vast deal more
than a mere commodity ; that its human implications
cannot be disentangled from its economic definition.
That being the case, it logically follows that the usual
economic conception of labour cannot be accepted if it
clash with the human elements inherent in the labour.
Since we first wrote upon this point, we have been forti-
fied in our contention by Mr. Binney Dibblee, by no means
an advanced writer, indeed distinctly orthodox in
economic tradition, whose book, The Laws of Supply and
Demand, is a contribution to modern economics. Mr.
Dibblee boldly faces the question whether labour (he
calls it human exertion) is a commodity.

" The chief reason for its segregation in terminology
from all other things freely bought and sold is probably
from a sense of human dignity, denying a similarity

THE ECONOMICS OF THE WAGE SYSTEM 77

in essence of what costs us most in sacrifice with mere
material objects. But the distinction can be justified
by a deeper fundamental difference than any indicated
by sentiment. . . . There is no commodity of anything
like equivalent value which is more often freely given
away. . . . There is no commodity which resembles it
in being sold habitually and by large classes of people for
sums considerably below what would be its value if the
market were properly exploited."

Mr. Dibblee then cites certain instances proving these
points, and proceeds :

" But there is another characteristic of labour which
makes it different from ordinary commodities, and that
is that, while without capital it has no means of holding
back supply, capital is, as a rule, only in the hands of
the buyer of labour, and thus it tends more rapidly
than with the supply in general to run into a condition
of glut. This fact is the cardinal feature of labour, as
distinguishing it from other things which are bought
and sold. . . ."

In other words, there are animate qualities in labour
which render foolish any economic theory which classes
it with inanimate commodities.

As we shall show later, Mr. Dibblee does not approach
this problem from our point of view. He would probably
be shocked at the suggestion, but it is evident that he
has accomplished a peculiarly valuable work in de-
monstrating that in essence human exertion and com-
modities are fundamentally different. Does that, how-
ever, transform our conception of wages ? Yes and no.
Yes ; in that it divides the ethical view of labour from the
current economic view. But ethics and economics are
the obverse and reverse of the same coin. If so, the
prevailing conception of wages is false. Whatever is
ethically right is economically desirable. It is economi-
cally desirable to transform the wage system. No ; in

78 NATIONAL GUILDS

that the wage system will continue on the same basis
until organised labour, operating in the economic sphere
(whether ethically inspired or economically motived is
immaterial), wills to end the wage system by undertaking
itself to perform, not only the function of supplying
labour power, but, by a proper adaptation of its qualities,
also the functions now allotted to rent, interest and
profits. But we have seen that labour can fulfil these
functions only by abrogating the wage system. So long
as it accepts wages, it accepts the implications of wages,
the most important of these being that, in selling its
labour power, it also sells its birthright in the industrial
fabric, reared by itself, but sold by itself for a mess of
wage pottage.

II

We ask our readers to keep steadily in view the
cardinal fact that the payment and acceptance of wages
mean no more and no less than the transfer of created
wealth from the producer to the entrepreneur. That must
be clearly grasped by the wage-earners before we can make
actual progress towards the industrial democracy. Mr.
and Mrs. Webb do not apparently attach any importance
to this distinguishing characteristic of the wage system.
Let us see how it works out in practice. We quote
from a letter that appeared recently in the Star :

" I would invite Mr. Arthur Chamberlain to have a
walk round the Albert and Victoria Docks and see for
himself the many hundreds of capable labourers at work
and things apparently humming. I am not going to
suggest that these men are as well qualified as the men
who are on strike, but one can see a daily improvement
in their methods, and soon they'll know all that is re-
quired. I do not wish to enter into the reasons why the
late dockers left their work without notice, but maintain —

THE ECONOMICS OF THE WAGE SYSTEM 79

what I think must be generally admitted — that every
Britisher has a perfect right to take up any job that's
offering ; and what we are witnessing at present is a
turnover of labour. What some are forfeiting others are
gaining. None of us likes monopolies."

Here we have a perfect example, not only of the truth
that the acceptance of wages involves the forfeiture of
any claims upon wealth production, but also of the
bastard social philosophy that springs out of it.

The army of dock workers recently on strike — they and
their predecessors — were the means whereby the Port
of London grew to its present huge dimensions. These
men built up the fabric of the Port ; but they have not
a scrap of claim upon the finished work of their hands ;
the Port and all its gear belongs to somebody else. Why ?
Because the dockers accepted wages for their labour
power, and, they having done so, the employers claimed all
the surplus. There were dockers on strike who had put
twenty and thirty years' hard labour into the upbuilding
of the Port, and in thousands of cases their fathers
and grandfathers before them. Yet they were on the
streets and their families starving by the ukase of a
successful tea merchant and ex-Liberal Minister, who has
not given as many months to the work as these men have
years. How is it ? Surely it is too ridiculous to be true !
Not at all. Lord Devonport, the leader of the dock
capitalists, simply said to the men : " When we paid you
wages, we bought your labour power and all that flows
out of it. If you can withhold labour power, then I
must accept your terms, but at present I can buy labour
power that you cannot control." The men, by means
of wages, have sold out. They may not even enter
the dock-gates through which they have passed to create
the wealth now administered by Lord Devonport and his
money barons. Possession has passed ; the men possess
nothing. They do not even possess their own jobs. They

80 NATIONAL GUILDS

not only forfeit the surplus value they create, but it must
be created under the control and surveillance of the
employers. This control of the conditions of labour is
necessary to the employers, because it secures the power
of dismissal. But dismissal is not resorted to unless there
is an adequate margin of unemployed. These unemployed
must be given some moral justification for supplanting
the dispossessed workman. The man in the Liberal
Star has it pat : " Every Britisher has a perfect right to
take up any job that's offering, and what we are witnessing
at present is a turnover of labour." Turnover !

Now let us sum it up as far as we have got :

(i) When a man sells his labour power for wages,
he forfeits all claim upon the product.

(ii) He also admits, by his acceptahce of wages, the
right of the employer to dictate the conditions of his
employment and to terminate such employment.

(iii) By his acceptance of wages he further admits that
his potential labour power may be stolen from him and
given to another.

If we consider these wage conditions dispassionately,
in what way can we distinguish them from chattel
slavery ? The slave had no right to his own body —
the source of his labour power ; the wage-earner has no
right to his own labour or its products.

Our definition of wages cannot be seriously disputed.
Granted the accuracy of our definition, can these con-
clusions be seriously disputed ?

The struggle of the future will be the struggle of the
industrial workers to regain possession of what they have
lost and to retain possession of what they produce. The
bulwark which protects surplus value from the wage-
earner, which secures it to the entrepreneur, is the wage
system. That is why it must be abolished.

Now let us suppose that the work of the London
docks were done, not by more or less casual wage slaves,

THE ECONOMICS OF THE WAGE SYSTEM 81

but by a properly organised and regimented labour
army, penetrated by a military spirit attuned to industry.
Do soldiers receive wages ? No ; they receive pay.
" But ! " cries the practical man (and possibly even Mr.
Sidney Webb), " what earthly difference is there between
' wages ' and ' pay ' ? " Let us see. The soldier receives
pay whether he is busy or idle, whether in peace or war.
No employer pays him. A sum of money is voted
annually by Parliament to maintain the Army, and the
amount is paid in such gradations as may be agreed upon.
Every soldier, officer or private, becomes a living integral
part of that Army. He is protected by military law and
regulations. He cannot be casualised, nor can his work,
such as it is, be capitalised. The spirit that pervades
the Army is, in consequence, different from the spirit
that dominates wage slavery. In other words, " pay "
and the discipline of effective organisation produce
entirely different psychological results from those
created by " wages " and ineffective organisation.
Whether the military psychology is in every respect
desirable is beside the point ; the material fact is that
" pay " is a totally different thing from " wages," pro-
ducing its own psychology and atmosphere, and per-
forming its work in its own way.

Let us further suppose that the army engaged on
dock work were temporarily out of action, owing to a
difference of opinion on high policy between the admini-
strative and industrial leaders. Would the men cease
to receive their pay ? It would, of course, go on as
usual. Oddly enough, in a vague way, the trade unionists
appreciate this difference, for whilst they strike for
increased " wages," or against decreased " wages," they
go on strike " pay." It is curious and interesting to
observe how philology often comes to the aid of economics.

But whilst accepting the true meaning of " pay " as
distinct from " wages," let us vary our supposition and
6

82 NATIONAL GUILDS

assume a guild rather than a military army. Is it
difficult to visualise a transport guild rising up out
of the ashes of the dead wage system and putting all its
members upon graduated " pay " ?

Another interesting and suggestive aspect of the pay
system is that it unifies every member of the organisation.
Do officers ever dream of wages ? Do they say they are
going on " half-salary " ? No ; they go on " half-pay "
— the general, the colonel, the major, the captain and
the lieutenant. It is obvious, is it not, that these verbal
distinctions disclose substantial material differences ?
Again, a soldier's labour is not rated as a commodity. A
soldier is expected to give something very different. His
obedience is not exacted to produce profits ; it is exacted
to the great end that his unit shall fit efficiently into the
whole Army organisation. He is expected to be brave ;
but nobody dreams of exploiting or capitalising his
bravery. All the soldierly qualities are inculcated in a
spirit and with a purpose " alien of end and of aim " to
the spirit and purpose of commerce. But we have no
wish either to idealise the Army or to push our analogy too
far. We quote the pay system that obtains in the Army
to prove that a human organisation, efficiently regimented
and humanely motived, could dispense with the degrading
wage system, and, having eliminated that dehumanising
element, could do its work in a scientific and civilised
manner.

This divagation into the psychology of military
organisation has, we fear, carried us rather wide of
our subject, which is the economics of the wage system.
There are still many economic aspects to be considered.
We must consider the effect of the wage system upon
the exploited wage-earner and also upon the exploiter.
Let us return to Mr. Binney Dibblee. We quoted him
to prove that labour power is something more than a mere
commodity. We have further noted that wages, whilst

THE ECONOMICS OF THE WAGE SYSTEM 83

primarily based upon subsistence, are favourably affected
by organisation. We have seen that unskilled labour
is generally unorganised labour ; that skilled labour is
almost synonymous with organised labour. The effect
of the wage system has been to put the wage-earner
in some sort of organised defence against the lowering
of wages to bare subsistence. The germ of the over-
throw of the wage system is to be found in this
organisation. In other words, the trade union, when it
has developed into a well-organised guild, will be in a
position to supplant the wage system. Mr. Dibblee
reminds us of a function performed by the trade unions
which we are liable to overlook :

" They are usually considered to be associations founded
to control the supply of labour and therewith to bargain
for its price with the employer, and, as they have energeti-
cally performed this duty for their members, it is undeni-
ably true that their work in this respect is of the very
highest importance. But this is not logically, even if it
was historically, their primary cause of origin. If these
associations had been tumultuous combinations arising
out of strikes, or, as Adam Smith implies that they are,
' conspiracies against the public ' or ' a contrivance to
raise prices,' they could never have had the principles
of cohesion and permanence which have raised them to
the mighty power they now prove to be. Philosophi-
cally speaking, their final and necessary cause was the
maintenance of the reserves of labour, which are required
by the system of modern production."

Thus we see that wages, whilst paid only for the
time worked, must suffice for the time unemployed.
What does this mean ? Just this : that only the bare
cost of the labour commodity actually delivered enters
into the cost of the finished product ; that from the
increased wage exacted by organisation, over bare sub-
sistence, has to be deducted the cost of maintaining the
reserve of labour necessary to modern production. Or,

84 NATIONAL GUILDS

in other words, for a century or more the trade unions
have been performing a function rightly belonging to
capital. Mr. Dibblee recognises this. Dealing with this
very point and the economic doctrine that came to
justify it, he says :

u What shall we say of the pretentious body of doctrine,
calling itself scientific, which rose up at that time to stamp
the hall-mark on intellectual superiority of greed and
crown ruthlessness with a halo ? Of all the crimes
committed in the name of knowledge this was, perhaps,
the worst. It has done more harm over a century than
all the wars of the period. Intellectually, it was more
impious than the condemnation of Abelard, the muzzling
of Galileo, or the hounding of Semmelweiss to madness.
It is no wonder that men who kept their senses called
political economy the cruel science ; but how is it that
people were so slow to see that its theories were stupid ? "

The answer is really rather simple. The wage system
necessitated throwing the burden of the cost of unemploy-
ment upon either the trade unions or the Poor Law
authorities. Will Mr. Dibblee inform us how it can be
done inside the wage system ?

But the point to be emphasised is that, when, in the
fulness of time, the guilds come to a reckoning with
capital, they can set the colossal cost of maintaining
their unemployed for a century against any ad miseri-
cordiam appeal for mercy on behalf of rent and interest.
This century-old burden in itself constitutes a clear
charge upon the existing economic fabric. It is a charge
that rent, interest and profits must sooner or later pay
in meal or malt.

Ill

The burden borne by Labour in general and the
Trade Unions in particular of maintaining life during

THE ECONOMICS OF THE WAGE SYSTEM 85

unemployment, a function properly belonging to capital,
constitutes, as we have said, a charge upon the industrial
fabric which must be repaid. But it is almost univer-
sally contended that wages are a first charge upon
production, ranking in priority before rent, interest or
profits. This idea is as prevalent in Socialist as in con-
ventional economics. It is, in some sort, the capitalist's
justification for the existing wage-system. He says :
" I find the money and take all the risks ; but before
I can pay a penny for rent or interest or take a penny in
profits, I must first pay my workmen their wages. They
have a first charge upon the concern." The seeming
fairness of this contention has often proved too much for
enthusiastic Socialists. Some of them actually embrace
it as a propitious and happy fact. But the only sem-
blance of truth in it is that in point of time wages are
paid before rent, interest or profits. But this is not
what is meant by the term " first charge." To possess
a first charge upon a property primarily implies security.
Whoever else goes without, the possessor of the " first
charge " is secure. If his dividend is in default, then
he may seize the property and squeeze out every other
interest. A first charge is, in financial jargon, a
"security." Because Labour is a first necessity in the
process of production it by no means follows that this
constitutes a " first charge upon production." Labour
possesses no kind of charge upon industrial production
because its claim is automatically discharged by the
payment of wages. Wages, all economists agree, are the
price paid for the labour commodity. If, therefore,
wages are a first charge upon production, labour must
possess a first charge upon production, wages and labour
being equivalent terms, under the express meaning and
conditions of the wage system. But what security does
labour possess ? Absolutely none. The security of
possession has finally passed with the payment of wages.

86 NATIONAL GUILDS

Thus, should it suit the convenience of capital to suspend,
temporarily or permanently, the process of production,
labour has no kind of charge upon the unfinished pro-
duct, which belongs absolutely to capital. One com-
modity cannot in the nature of things possess a first
charge upon another commodity into which it has
entered. And labour, according to the existing code,
is nothing but a commodity.

If wages, that is, the labour equivalent, possess a
first charge upon production, so also does the weather
(which governs production in the building or the farm-
ing industries), or atmosphere (which affects production
in the cotton trade), or proximity to population (which
affects rent), or any other natural conditions under which
production proceeds. Words or phrases habitually
loosely used soon cease to have any meaning. Bearing
always in mind that labour is a commodity, it becomes
meaningless to talk about wages being a first charge
upon production. In the same sense it might be said
that the price of coal is a first charge upon production,
or shoe-leather a first charge upon locomotion. The
essence of security, which is the true meaning of a first
charge, is power to control production in all its processes
and distribution in all its phases. Labour has literally
no power to control either production or distribution,
because this power passes from it when it exchanges
itself for wages. Before a cotton manufacturer can
produce cotton goods he must first procure cotton.
But who ever dreams of saying that cotton is a first
charge upon the cotton trade ? In the literal meaning
of the words, no doubt the price of cotton is a " first
charge " ; but in the accepted sense of the term, its use
in that connection is meaningless, foolish and dangerous.
And the final and overwhelming proof that wages are
not a first charge upon production or anything else, is
that whilst unemployment — i.e., a reserve of employ-

THE ECONOMICS OF THE WAGE SYSTEM 87

ment — is necessary to the present system of production,
it has absolutely no kind of claim, no " first charge,"
upon production for its maintenance. Yet we have
seen that the maintenance of unemployment is second
only in importance to the maintenance of employment.

The wage system is a denial to the owner of labour
of any charge, first, second or third, upon production.
If, however, we transform the conventional conception
of the economic function of labour by crediting it with
its proper human attributes and rejecting the pure
commodity thesis sans phrase, then we remove labour
from the wages or inanimate category to the living or
active category of rent, interest and profits. This
intellectual process accomplished, we have revolutionised
political economy ; labour is at last in a position to
contend with rent, interest and profits for the " first
charge " upon production. Whether it can, in fact,
secure that first charge depends upon its power of econo-
mic organisation — upon its will and power to constitute
productive and distributive guilds. And upon the
power and capacity of labour (the human energy, not
the commodity) thus to organise itself upon a sound
economic basis depends the final test of democracy as a
living principle. If labour, as we believe, can effectively
organise itself, producing and exchanging commodities
more efficiently than is done under the wage system,
then we shall speedily discover that whilst wages
under the present system have no charge upon produc-
tion, labour, organised into guilds, would have a
first, second and third charge not only upon production,
but upon the industrial structure as a whole.

The problem of economic organisation is almost as
important as the problem of economic resources. A
community rich in natural wealth, but defective in
organisation, may find its economic position inferior to a
community, poor in natural resources, but effectively

88 NATIONAL GUILDS

organised for economic purposes. This becomes more
and more a truism with the growth and efficiency of
transportation facilities. Thus Lancashire, which does
not grow an ounce of cotton, is the cotton centre of
the world. Organisation is the clue to what will prove
a mystery to the historian a thousand years hence.
Now the wage system is uneconomic, not only or even
primarily because it is based upon a false conception of
the nature of labour, but because it is the fruitful parent
of faulty and uneconomic organisation. The concentra-
tion of surplus value in the possession of a small class
inevitably circumscribes the human area from which
organising capacity may be drawn.

We have seen that the wage system consigns labour
to outer darkness, having created wealth in the posses-
sion of capital and under the control of the profiteers.
How stupendous is the result it is difficult to demon-
strate. Take this fact : 39,000,000 out of our popula-
tion of 45,000,000 receive only one-half of the entire
income of the nation. This means that about eight-
ninths of our population, living upon wages, are ex-
cluded from any controlling interest in the organisation
of society. Society so organised is obviously the nega-
tion of democracy. The defects and failures, therefore,
inherent in the existing structure of society, cannot be
ascribed to democracy. It is true that our political
system bears some resemblance to democracy, but our
national economy is plutocratic throughout, and, in con-
sequence, renders impotent our political democracy,
which is only apparent and not real.

Now, it is natural that capital should seek to retain
control of industry in its own interest. It is better,
from capital's point of view, to retain control with in-
efficient administration than to lose control to efficient
management. For example, in the will of the late Sir
Edward Sassoon, his young son is admonished to attend

THE ECONOMICS OF THE WAGE SYSTEM 89

to the interests of David Sassoon and Co., Ltd., " so
that its reputation and standing so laboriously built up
by his ancestors for close on a century may not be
tarnished or impaired by the possible neglect or mis-
management of outsiders." What sanction is there for
assuming that the stripling who has now entered into
possession can better protect the interests of the busi-
ness than its present administrators ? Observe, too,
that the non-proprietorial managers are " outsiders."
The succession to the control of large undertakings by
youngsters by inheritance is probably the most prolific
source of failure to organise efficiently. This has long
been recognised, and the cure sought in joint stock
administration, where competent management can often
be bought by large salaries and profit percentages. But
this system barely widens the area from which to draw
efficient administration, because the non-proprietorial
administrator is drawn from very much the same social
class as the proprietors ; he is educated and trained in
much the same milieu as his employers, whose status he
seeks to achieve. In this way even a clever adminis-
trator does not make administration his dominant
motive ; to him it is only a means to the end that he,
too, may become a member of the possessing class,
and not only its servant. But granting the existence of
an administrative class, its management is strictly de-
fined by the first condition that dividends must be
earned. Dividends, however, cannot be earned save
by the maintenance of the wage system, because the
wage system is the only method whereby surplus value
can be secured. Thus we discover that the wage system
is the basis, not of one integrated community, but of
two communities whose interests are divergent and
antagonistic. The one community is the army of wage
slaves, as much detached from the products of their
labour as is the farm labourer from the land. The

90 NATIONAL GUILDS

other community is composed of five or six million
people, with their brood of children, servants and
parasitic dependents. Now let us see the positive
waste involved in this organisation apart altogether
from the negative waste involved in the extrusion
from commerce of untold potential administrative cap-
acity in the mass of the working population. We will
again quote Mr. Binney Dibblee:

" The town of Oldham, with 100,000 inhabitants, has
spindle capacity enough to supply more than the regular
needs of the whole of Europe in the common counts of
yarn. To manipulate such an output and market it, as
well as the other output of Lancashire, the merchants
and warehousemen of Manchester and Liverpool, not to
mention the marketing organisation contained in other
Lancashire towns, have a greater capital employed than
that required in all the manufacturing industries of the
cotton trade. It is roughly true to say that nowadays
it costs more to sell most articles than to make them,
even in the case of the most highly organised and most
eminently specialised industry in the world."

Now is there any reason under the sun why it should
cost more to sell an article than to make it ? None
whatever ; but from time immemorial, either with chattel
or wage slavery, it has been found more profitable to sell
at a profit than merely to manufacture. They knew it
in Tyre and Carthage, in Florence, Genoa and Venice.
They know it in Manchester ; they know it in Liverpool,
where they levy toll upon imported cotton that would
make the mouth of the Chancellor of the Exchequer
water. But consider London, with its population of
7,000,000. Says Mr. Dibblee : "Of industry in the
modern sense, which uses ' power ' for production, she is
almost ignorant. The proof of this odd fact I discovered
in the report of the Commission on London Traffic, still
only a few years old. There were then 638 factories in

THE ECONOMICS OF THE WAGE SYSTEM 91

London registered as coming under the Factory Act, with
an average horse-power of 54. The total power employed
within the London area under the Factory Act, chiefly
used in newspaper printing, was 34,750 h.p. Just twice
as much power as that is required to drive the Mauretania
through the water." Yet the wealth of London is
greatly in excess of the twenty largest industrial towns
of Great Britain. This purely financial aggrandisement,
divorced from actual production, is equally observable
in New York and Chicago.

So it comes to this : The existing social system, based
upon wage slavery and controlled by profiteers, cannot
at this time of day sell an article at less expense than it
costs to make. Our methods of exchange have grown
grotesque ; their wastefulness is a national sin ; their
burden has become intolerable.

IV

We have repeatedly emphasised the fact that the com-
munity is charged two rents, two sets of interest, and two
sets of profits — a fact the significance of which is not
appreciated unless we approach the economic problem
through the gateway of the wage system. The wage-
earner, although a serf because he has sold his interest
in production by his acceptance of wages, is, nevertheless,
the real producer of wealth. As a producer, he pays
the manufacturer's rent, interest and profits. But as a
consumer he again pays the distributor's rent, interest
and profits. The orthodox economists clump together
these two sets of economic plunder. They tell us that
the costs of distribution must be reckoned as a charge
upon production ; that the machinery of distribution
in the final analysis is part of the machinery of production.
Therefore it is argued, if the community were to take
possession and control of land and machinery, it would

92 NATIONAL GUILDS

be compelled also to take over the distributive machinery.
No doubt the average State Socialist would fall into the
trap, because his scheme of life contemplates the purchase
of all machinery at its capital value and the payment of
interest upon that capital value — an interest guaranteed
by the State. As we have already proved, this method in-
volves the continuance of the wage system, because with-
out wages there can be neither rent, interest nor profits.
But the Guildsman and the Syndicalist are agreed that
any such solution means a mere superficial modification
of the existing industrial system ; there can be no funda-
mental change without the abolition of the wage system.
The truth is that the distributive elements in economic
society, so far from subserving the real interests of the
producer, actually blackmail the producing capitalist,
extracting from him the maximum amount of surplus
value — " what the traffic will bear," as the American
railway directors grimly phrase it. If the blackmail
stopped there we might be content to accept the dictum
of the orthodox economists and simply regard the pro-
ducing and distributive capitalists as the same body,
the same neck, but two heads. But the facts do not
warrant any such easy assumption. For two reasons :
(a) because possession of the created wealth passes from
the producer to the distributor, from the manufacturer
to the merchant ; and (b) because the distributor, having
gained possession from the producer, proceeds to levy
still further blackmail upon the consumer. How is it
done ? The reasons are rooted in history. The merchant
of to-day, in league with the banker (formerly they were
one and the same person), is the true lineal descendant
of the original entrepreneur. He it was in the old days
who actually " assembled the parts," paying cash for the
products of the home industrialist, who had no capital,
and making his profits by selling to the consumer, directly
through his own organisation or indirectly through

THE ECONOMICS OF THE WAGE SYSTEM 93

local merchants. To this day, the small manufacturer,
notably in Lancashire and the Midlands, depends upon
the merchant, not only for the distribution of his product,
but for the capital to carry on his business. Broadly
speaking, the successful manufacturer is he who has
worked free from the dominance of the merchant. But
to achieve this the manufacturer has to acquire capital
equal to the requirements of both production and dis-
tribution. To attract capital for production it is im-
perative to prove effective demand. This once accom-
plished, the banker forsakes his natural ally, the merchant,
and ranges himself with the manufacturer. Be it
always remembered that this struggle between manu-
facturer and merchant is absolutely contingent upon the
capacity of both sets of exploiters to extract surplus
value out of the products of labour — of labour purchased
in the competitive labour market as a commodity.
Suppose this labour commodity, like the slaves of a
former day, were to say : "I am no longer a commodity ;
I am a living entity ; you can no longer command me ;
henceforth what I produce I shall control," where, then,
would be the manufacturer and the merchant ? Tradi-
tion has it that when Moses crossed over to dry ground,
and looking back saw the Egyptians struggling in the
water, he raised his hand to his nose, elongated his
fingers and shouted aloud : " Pharaoh ! Pharaoh !
Where are you now ? " Labour, transformed from the
inanimate to the animate, would find itself on the vantage
ground occupied by Moses.

Now the plain fact is that the labour commodity
theory — to wit, the wage system — is a direct incentive
to the merchant to expand his profits. Depending upon
the so-called iron law of wages, and having squared the
manufacturer, he is in a position to rob the community
in every direction. Number one middleman, commonly
known as the merchant, is not content with less than

94 NATIONAL GUILDS

20 to 30 per cent. ; number two middleman, commonly
known as the retailer, wants another 30 per cent. Thus
the consumer bears the middleman's depredations
at one end and the manufacturer's at the other. In this
way there has grown up on the foundation of the wage
system a gigantic superstructure, the burden of which
upon labour is now too heavy to be borne. One simple
fact will illustrate the enormous extent of this distribu-
tive burden. Mr. Binney Dibblee estimates the adver-
tising annual revenue of London publications alone at
£10,000,000. He thinks it moderate to estimate the
annual advertising expenditure at £100,000,000. The
estimate for America and Canada is £250,000,000.
Altogether, the total expenditure upon the modern in-
dustrial system of America and Europe is not far short
of £600,000,000. Obviously, the consumer pays for
this, and pays through the nose. Is it any wonder that
real wages are falling ? Is it surprising that rent, in-
terest and profits are advancing by leaps and bounds ?
From 1900 to 1910, the Board of Trade Wages Index
Number rose only 1*2 per cent., whilst the Retail Food
Index Number rose nearly 10 per cent. During the
same period the amount of income reviewed for income
tax advanced by £217,000,000 — an increase of 26 per cent.
It would be easy to write a considerable volume upon
the economic waste involved in these profoundly signi-
ficant figures. Consider the positive and negative waste
in an expenditure of £100,000,000 a year upon adver-
tising— the charge upon the producer and the consumer,
the misapplied labour which might otherwise be put to
genuinely productive purposes, the brainwork wasted
upon " publicity," the spiritual and intellectual debauch-
ment of the community by newspapers that thrive upon
these advertisements, and whose " message " to their
readers is conditioned by their advertising revenue. We
must leave it to the satirist and the seer.

THE ECONOMICS OF THE WAGE SYSTEM 95

But the question remains : Has the merchant any real
economic function ? We unhesitatingly reply that,
whilst commercially his position cannot be challenged,
he is, economically considered, a fruitful source of
frightful and oppressive waste. The manufacturer we
can utilise to good purpose ; the railways may be counted
as genuine factors in production ; but the merchant — he
is the pimp of industrial prostitution, the most powerful
factor in maintaining a white slave traffic, of which the
" white slave traffic " is a very small integral part.
The function of distribution has been perverted by its
divorce from production, and so far as can be humanly
foreseen it can never be brought into true relation with
production until organised production deals directly with
organised demand. But neither production nor demand
can be economically organised upon the basis of the wage
system, because out of it springs surplus value, and
surplus value is the apple of the economic struggle
between the capitalist producer and the capitalist dis-
tributor. Between them there is not, and can never be,
" economic harmony." Thus we see that out of a false
premise grows an endless sequence of false and artificial
conditions. The false premise is the old classical illusion
that labour is a commodity with a commodity price
based upon a sort of Dutch auction of competitive sub-
sistence The economic " pulls " of which Mr. J. A.
Hobson writes merely amount to this : whether this or
that economic group has a greater or less grip upon
surplus value. The moment animate labour decides
that there shall be no more surplus value, at that moment
these " pulls " become ineffective, for the simple reason
that they are gripping, not a substantial surplus value,
but the void. They grip at the void ; into the void they
disappear.

Although the facts warrant our condemnation of
existing distributive methods, we are the last to under-

96 NATIONAL GUILDS

value the supreme importance of effective distribution.
There is probably more than meets the eye in the con-
tention that it is the distributive classes that stimulate
invention and variety of production. Assuming that
labour rejects the wage system and takes control of
production, what will be its attitude to the thousand and
one demands made upon it by a highly educated and
increasingly fastidious army of consumers ? Will it
ossify into conservative methods, rejecting variety as
conducive to increased labour energy ? That it will
welcome labour-saving inventions we may be confident,
but will it willingly meet the demand for an infinite
variety of product — the inevitable requirements of a
more highly civilised community ?

The question is not easy to answer. But we may first
remark that the benefits of variety, of high qualities,
do not touch the wage-earner under the existing regime.
Our present standards and canons of beauty and crafts-
manship are false because they have grown in an atmo-
sphere of false economy and artificial conditions. There
will, likely enough, be no encouragement for Bond Street,
for Bond Street depends not upon beauty, but upon
exclusiveness of price. In any event, labour to-day
produces what Bond Street demands, and what labour
has done labour can do again. Nevertheless, it is highly
probable that labour will rightly regard as wasteful much
that to-day is regarded as beautiful and in good taste.
But the craftsman's innate passion for creating beautiful
things cannot fail to be stimulated by his increased
capacity to enjoy for himself the work of his hands. It
was under the mediaeval guilds that craftsmanship
reached its highest development ; we may be sure that
the spirit of craftsmanship will continue to express itself.
Nor will it be necessary to spend £100,000,000 a year to
bring the craftsman and the lovers of beauty into touch
with each other. The guilds will be the means whereby

THE ECONOMICS OF THE WAGE SYSTEM 97

labour conquers the production of wealth ; we may rely
upon a widely extended development of general culture
to render life not only spiritually but materially more
beautiful.

We are now in a position to sum up the economic
bearing upon the national life of the wage system. We
see :

(i) That the wage system is the spine of the existing
industrial anatomy.

(ii) That it condemns the wage-earners, who represent
four-fifths of the community, to complete economic
proscription, leaving the instruments of production and
all surplus wealth in the absolute possession of rent,
interest, and profits.

(iii) That wherever wages rise above the subsistence
level, as in the case of the skilled or organised trades,
the margin is practically absorbed by the burden thrown
upon wages of maintaining the reserve army of the un-
employed.

(iv) That by the power conceded to capital to purchase
labour as a commodity, a vast uneconomic army of
middlemen has arisen, which expands surplus value to
such unhealthy proportions that distribution has ceased
to be a factor in production, but constitutes a separate
and dangerous interest, having exactly the same relation
to the producer that the shearer has to the sheep.

(v) That, in consequence of these conditions, the
industrial structure of Great Britain is artificial and
dangerous to the economic health of the community.

(vi) That the only way to abolish rent, interest and
profits is to abolish the wage system. No wages, no
rent ; no wages, no interest ; no wages, no profits.

(vii) That economic power is the progenitor of poli-
tical power. From this it follows that the political
power of the Labour Party is strictly limited by its
economic power ; that inasmuch as wages involve the
7

98 NATIONAL GUILDS

sale of economic power to the possessing classes, labour
cannot possess economic power, and in consequence
its political power is " passive," whilst the political
power of the possessing classes is " active."

Finally, we see that the real solution consists in a
fundamental reconstruction of the system of wealth
production ; that it now only remains for the wage-
earners with one accord to proclaim that they will no
longer work for wages. Out of the ruins of the wage
system will spring a new economic society, and in that
society we shall discover new conceptions of wealth, of
value, of art, of literature — a new scheme of life. To
this new order of society every wage slave must look
for emancipation ; to it fervently look the artist, the
craftsman, the writer. Dead are the industrial ideals
and dead are the spiritual conceptions of existing society ;
dead is its religion and paralysed are its devotees. After
a decade of troubled sleep, the pioneers are again on the
march. A new hope inspires them. Will the main
body of the army respond to their signals and follow ?

X

THE TRANSITION FROM THE WAGE SYSTEM

Let us again remind our readers that the wage system
involves two false assumptions : (i) That labour is a
commodity pure and simple ; (ii) that the seller of labour,
having sold, has no kind of economic or social claim to the
products of labour. Obviously the second assumption
is based upon the first. It is surely now evident that no
social revolution is possible that assents to or even adapts
itself to any wage system. In a generation or so from
now our children will study the wage system with precisely
the same horror and curiosity that we regard the slave
system.

How, then, are we to escape from the slavery of
wagedom ?

We have had to consider another aspect of this pro-
blem in the course of our inquiry. We have found
that economic power is the dominant factor in the
political sphere ; as we have shown, time and time again,
economic power precedes political power. Therefore
it would be futile to look to the surface play of politics
for release. We must resolutely face the necessities
of the situation : the battle must be fought in the econo-
mic sphere, for where wealth is produced, there and
only there are the wage slaves in their true element ; there
and only there must the great change be effected. If,

99

ioo NATIONAL GUILDS

then, the revolution is to be economic (the political moon
subsequently reflecting the light of the economic sun),
what material has the wage slave wherewith to fight ?
He can only control two factors : (a) labour power ;
(b) labour organisation. He is the absolute possessor
of labour power until he sells it for wages ; the wages
he gets are modified by his capacity for trade organisation.
Therefore the struggle must proceed on two parallels :
first, the determination, final and considered, never again
to sell labour for wages (this determination involves pro-
prietorship of the ultimate products of labour) ; secondly,
the complete organisation of labour upon a footing of
industrial war. And anything less than complete
organisation spells failure.

Having predicated the determination to end the wage
system, what remains for us to do is to consider the plan
of campaign. Let us confess that the difficulties are
stupendous. Let us further confess that these diffi-
culties are mainly in our own ranks. For example, it is
apparent that the political Socialists and Labourists are
prompt to congratulate themselves every time a strike
fails. " Just what we told you," they say, smiling ;
" the day of the strike is over ; you must entrust your
affairs to us politicians." Of course strikes are failures.
They fail because as yet there is barely a vestige of
effective organisation ; they fail for want of a true
objective.

The present position is just this : an army of one
million, well provided in every respect, is surrounded
by an army of thirteen millions, ill-equipped, lacking
in unity and almost devoid of purpose. The result is
that every engagement is merely an affair of outposts.
The beleagured army is content to remain where it is.
It is well provisioned, well equipped, and life within
its lines is distinctly agreeable. Therefore the attack
must come from the besieging army. To succeed, the

TRANSITION FROM THE WAGE SYSTEM 101

attack must be the result of thorough organisation.
But you cannot get thorough organisation without willing
co-operation amongst the various units. What happens
to-day is that here and there a sectional attack takes
place. The main body of the labour army knows nothing
about it until it is too late. The political section sneers
at these forlorn hopes, and calls for parley with the
entrenched army. They seem to think that the possess-
ing army will capitulate to the honeyed phrases of a
MacDonald, a Snowden, a Keir Hardie.

Of the hopelessness of sectional fighting we have
scarcely the heart to write. It is the most stupendous
folly imaginable. Before us, as we write, are the official
figures of strikes and lock-outs from 1901 to 1910. During
that period there were 4557 disputes, involving 2,210,487
workers, who fought for 44,376,707 days. Fought for
what ? God knows ; nobody else does. Will some person
of plain common sense seriously consider what would
have been the result had these forty-four million working
days been devoted to some definite objective ? How
much nearer should we be to the destruction of the wage
system had there been an intelligible objective ? But
mere disputes about the amount of wages, the hours of
labour, or the conditions of wages lead nowhere, and are
waste of time and money. The political Socialists are
right in this ; they are equally wrong in assuming that
well-organised and well-directed strikes must prove
equally futile. During the ten years under review, the
trade unions spent £2,348,370 upon these disputes. But
during the same period, as a result of the wage system,
rentmongers and profiteers walked off with £12,000,000,000
(twelve thousand millions) of plunder. During the
same period, four-fifths of the community had to con-
tent itself with £6,000,000,000 (six thousand millions).
Thus we see that organised labour has as yet no con-
ception of the magnitude of the battle. For is it

102 NATIONAL GUILDS

conceivable that any body of intelligent men would
fritter away their sinews of war upon four thousand
small and ineffective skirmishes if they realised that by
effective organisation they could emancipate themselves
from wage slavery and keep to themselves twelve
thousand millions worth of wealth they themselves had
created ?

What, then, is the stumbling-block ? Sectionalism,
and nothing else. An examination of the list of trade
unions reveals an appalling condition of sectional
organisation. In the building trades there are no less
than twelve different unions : the Manchester Unity of
Bricklayers, the Operative Bricklayers, the Operative
Stonemasons of England and Wales, the General Union
of Operative Carpenters and Joiners, the Amalgamated
Carpenters and Joiners, the Associated Carpenters and
Joiners, the United Operative Plumbers, the National
Operative Plasterers, the National Amalgamated House
and Ship Painters and Decorators, General Labourers'
Amalgamated Union, Navvies, Builders' Labourers,
and General Labourers, and the United Builders'
Labourers. It is true that in various ways some of
these unions are federated, but, taking a broad view
and having regard to the future struggle, this is not
organisation — it is disorganisation. Turning now to
mines and quarries, we find no less than sixteen different
unions. It is true that their federation is, on the whole,
reasonably efficient. Nevertheless, the last miners'
strike made it clear that local sectionalism proved to be
the undoing of the miners. We learnt that one district
could hold out two weeks, another district was good for
thirteen ; that in one district the men got so much strike
pay, and in another so much more or so much less.
Sectionalism, combined with the politicians, killed the
last miners' strike. Next look at the metal, engineering,
and shipbuilding trades. They have fifteen different

TRANSITION FROM THE WAGE SYSTEM 103

unions treading on each other's toes. The textile trades
luxuriate in no less then twenty-four different unions.
It is sectionalism run [mad. True that federation plays
a wholesome part in both the engineering and textile
industries, but multiplicity of separate and autonomous
unions destroys unity, spontaneity and simultaneity —
fatally delays if it does not destroy. Turn we now to the
transport workers. As we shall show later on, these men
hold the strategic key to the revolution. Meantime we
observe with consternation that this trade has no less than
eleven different unions and practically no federation.
And so we might go through every trade and find the
same result — sectionalism rampant, unity lacking. At
the end of 1910 there were 1153 separate trade unions,
with a Total membership of 2,435,704.

This brings us to the crux of the problem of organisa-
tion. These various unions are mostly of local origin ;
their membership is restricted, and they are tenacious
of their individual existence. Financial considerations
and officialdom stand in the way of amalgamation ; time
and energy are wasted upon local struggles and pur-
poses, the main interest of the general body of wage-
earners hardly being considered. But what is infinitely
worse, all this local or semi-local sectionalism bars the
way to the industrial organisation of the whole army
of wage-earners. There are two and a half million
trade unionists ; there are thirteen million wage-earners.
The mot d'ordre, therefore, is not only more effective
organisation amongst existing unions, but the widest
possible extension of trade organisation amongst non-
unionists. We decline to accept the assurances of the
political Socialists and Labourists that trade unions can-
not be greatly extended. If they will clear the ground
by wholesale amalgamation and by simplification of
their rules, particularly as regards membership, we believe
that it would be possible to rope in ten million members

104 NATIONAL GUILDS

in the next ten years. Such a consummation would,
however, be hopeless if the active trade unionists are to
be distracted by politics, and their energies dissipated
in political Labourism. We have now learnt that
political Labourism has very strict limitations. It
is, in the final analysis, dependent upon the economic
power of the wage-earners. But that power is, in its
turn, limited by ineffective organisation. Thus trade
unionism to-day is travelling in a vicious circle : it
seeks redemption through politics, only to discover that
politics can do nothing for it ; it dissipates its energies
upon politics, and so kills itself twice over. 11 kills
its economic power by preoccupation with politics ; its
politics are barren because it has not conserved its
economic power. Further, existing trade uniorism is
based upon the wage system ; its object is to increase
wages or ameliorate wage conditions. But when it
becomes informed through and through with the new
spirit, when it realises that there are infinitely greater
stakes at issue, then, we doubt not, a vast organisation
of wage-earners will become an accomplished fact, and
the end of the wage system will actually be in sight.

But having got our army of wage-earners, there still
remains the plan of campaign — leadership, strategy,
and, above all, the commissariat.

II

The new struggle, inspired by the idea of the abolition
of the wage system, must necessarily call into being a new
type of leader. The present type has served its turn and,
with all its errors and limitations, it has f airly and squarely
earned our gratitude. The ceaseless moiling and toiling
inherent in trade union organisation has been given un-
grudgingly by a body of officials, whose pathway has been

TRANSITION FROM THE WAGE SYSTEM 105

strewn with thorns. They have, on the whole, received
more kicks than ha'pence. Recently the ambitions of the
union leaders have been diverted to political ends to the
detriment of economic power. The new type must adhere
faithfully to its true function. We do not doubt that out
of the illimitable human wealth of the industrial democ-
racy the new type will be found in abundance.

More to the point is the new method of campaigning.
There clearly must be a far higher degree of co-ordinated
direction and regimentation. Isolated action must be
regarded as mutiny and sternly suppressed. Unions that
strike without the assured support of the main army must
do so on their own responsibility. On the other hand,
wherever a strike has been properly declared, it must have
the unrestricted backing of the organised forces. The
recent Dockers' strike is a case in point. The men came
out and trusted blindly to the general good-will of their
comrades. They got the good- will in plenty and precious
little besides. Nor is it conceivable that the railwaymen
would have been allowed to come out weeks after the
transport workers had gone back. They should have all
come out together. Nay, more — they should all have been
in the same union.

We have several times referred to the lack of co-
ordination amongst the transport and railway workers.
For this reason : A union completely covering all the men
engaged in the transport of merchandise could, if properly
supported, win the battle and smash the wage system.
But this is only possible with complete unity of action
between the railway driver, the guard, the signalman, the
docker, the vanman, and the 'bus-driver. And this unity
must be financially backed by every other union, each
according to its numerical strength. The key to the
position is here. But supposing the Government were to
counter the movement by manning the railways and street
vans with the Army Service Corps — a likely enough

106 NATIONAL GUILDS

contingency — then the other unions must be so organised
that the Army Service Corps has nothing to carry.

Such a campaign, be it noted, depends upon two vitally
important considerations : (a) A complete commissariat
system to maintain the labour army in times of industrial
strife ; and (b) an industrial army council with plenary
powers to direct operations.

The lesson of the last century of strikes is that when
they have failed it has been because the commissariat
department broke down. And we may go further and
affirm that this was due not so much to the lack of money
as to the failure to realise that war between labour and
capital is nothing but war, and that, therefore, it should
be conducted on a war footing. Inter arma silent leges ;
a strike conducted with meticulous regard for law and
custom is almost certainly doomed to failure. The
leaders of strikes are prone to curb the action of their men
by confining them to legal limits. The true line to follow
is to disregard all legal obligations precisely as soldiers do
in the enemy's country, and for the same reason. Roughly,
policy dictates in times of conflict :

(i) That on the proclamation of a strike no rent be
paid.

(ii) That on its termination no arrears be paid.

(iii) That on any attempt to extort rent by threat of,
or by actual distraint, every non-striker in the district
affected shall forthwith cease to pay rent.

(iv) That no arrears, in such circumstances, be recog-
nised. (By this means, rent is specifically struck at as
well as profits. The striker kills two birds with one
stone.)

(v) Rent being temporarily abolished, the most im-
portant consideration is food. Hitherto, food has been
provided by means of strike pay. This must cease : the
method is obsolete. It is not only haphazard and operates
harshly upon men with large families, but almost inevitably

TRANSITION FROM THE WAGE SYSTEM 107

hits the unfortunate retailer. This is so universally the
case that retailers find their credit cut off upon the
declaration of a strike. We believe, not without evi-
dence, that the large wholesale houses often do this, not
because they fear the retailer will not pay, but deliberately
to hamper or kill the strike.

(vi) The Co-operative Wholesale Society should be the
natural ally of the unions during a strike. This fact
recognised, the obvious step is for the unions to contract
with the C.W.S. for the supply of rations to all the strikers,
regard being paid to the number of each striker's family.
At a close estimate, it takes five shillings per week per
individual to maintain life. At wholesale prices this might
be reduced to four shillings. The rule to be adopted,
therefore, is that no money shall pass, the C.W.S. or the
local trader to provide the rations and to be paid direct
by the trade unions. Two important purposes are sub-
served by this arrangement : the strike can be indefinitely
prolonged and the source of supplies maintained.

To conduct the future strike, the formation of an army
council becomes imperative. To this council each union
must not only send its delegate, but subscribe its obedience.
The sine qua non of success in striking is promptitude of
support. As things are to-day, this is impossible. It
often takes weeks to bring the unions into line — as often
as not after the strike has failed for want of proper support.
Incidentally, as a condition precedent to the organisation
of labour, all wage agreements, sliding scales, time con-
tracts, and any and every legal harassment must be
terminated. A weekly wage without any embarrassing
conditions must be insisted upon.

To avoid any misunderstanding, let us once more
reiterate that we desire no such elaborate strike organi-
sation merely to modify the wage system. We postulate,
first and last, that no strike is worth while that does not
aim specifically at some form of control. It cannot be

io8 NATIONAL GUILDS

too often emphasised that control — joint or complete
control — spells the negation of the wage system. And
while we are about it, for the last time we affirm that the
negation of wages means the negation of rent, interest
and profits. No wages, no rent ; no wages, no interest ;
no wages, no profits.

PART II

NATIONAL GUILDS

THE MORAL FOUNDATIONS OF EXISTING
SOCIETY

In the preceding section of this inquiry we have shown
that the compulsory competitive wage system (herein-
after indifferently called wage slavery, or the rack wage
system, or the wage system) is the economic or industrial
basis of existing society. The essential features of this
system are, first, that the labourer shall be regarded as
a raw material ; second, that to this end he shall have no
alternative means of making a living save by working for
wages ; and, third, that he shall be compelled to accept
such wages, however low, as are fixed by competition
and the law of supply and demand. Before proceeding
to the more constructive part of our task, which is to
show how this system can be abolished and replaced by a
better, it is advisable to ask ourselves whether there
are any commanding moral considerations to justify
the maintenance of society as it is. For we have already
assumed that the economic and the moral systems of
any given society are closely related, so that if a moral
justification exists for it, an economic system tends to
stability, and if no such justification exists, to instability.
At the outset we are met by the fact, becoming more

no NATIONAL GUILDS

apparent every day, that the rack wage system in itself
is immoral ; that is, it does violence to the natural
instincts of man. It is not to be denied that the realisa-
tion of the immorality of one class of men reducing an-
other class to and maintaining them in a condition of
propertylessness in order to exploit their wage labour
for private profit has been slow in coming. Even at this
moment the realisation is confined to a comparatively
few minds. But the analogy of the wage system with
chattel slavery even in this respect is striking ; for it
took several millenniums for society to realise that chattel
slavery was fundamentally contrary to the nature of
man. When, however, this immorality was realised, and,
above all, felt, the economic system dependent upon it
was doomed. No arguments based on tradition, utility,
theology, or science were of the smallest value against the
moral conviction that chattel slavery was bad. It might
even have been demonstrated that the economic successor
of chattel slavery was bound to be inferior in point of
production to the system that it displaced. The heart of
society was made up and the head was compelled to take
the economic risk and to make the moral plunge.
Similarly, it is conceivable that before very long the
same moral repugnance that was felt for chattel slavery
on the eve of its abolition may be felt for the rack wage
system ; and in that event economic considerations
would receive short shrift. In the end, however, we
believe that what is morally right is economically right ;
it is in this faith that moral reformers and practical
economists find themselves so often on the same side.

But without comparing the feeling against wage
slavery as now manifested with the feeling which ulti-
mately abolished chattel slavery, we may say that
against wage slavery, as against chattel slavery, an in-
creasing minority has always been in active revolt, and
the mass of men have always been in passive revolt.

THE MORAL FOUNDATIONS OF SOCIETY in

For the active revolt it is only necessary to look at the
history of Socialism and of Utopianism, both of which
alike make the abolition of the wage system their goal.
But in regard to the passive revolt the evidence is not
less conclusive.

For example, nobody doubts that the majority of wage
earners would be willing, any one of them at any moment,
to exchange their position as wage-earners for the position
of economic independence, even if this latter involved a
permanent reduction of financial income.

Again, it is a matter of observation that the mass of
men regard wage service as distinctly inferior in point
of status, not only to independence, but even to the old
feudal status of the personal servant (not slave). We
are aware that there is no love lost between James and
Bill, but it is, nevertheless, true that as between the two
economic orders of personal and wage services, the
former is in a subtle sense superior.

This is still more clearly seen in the superior status of
Government pay-service as compared with private wage-
service. Nobody can fail to be struck by the difference
in self-respect, at least, that comes over men when they
are transferred from private to public employment.
The nature of their employment under Government may
even be more onerous than that of the private service
they have left. It may conceivably even be less well
paid. Nevertheless, it has its compensations, not only
in permanency and pensions, but quite as much, if not
more, in status, by reason of its removal from the private
competitive wage system. While this is obviously true
of clerkships and the like, it is strikingly true of the Army
and the Navy — both of them manual employments.
The pay in both these services is ridiculous (particularly,
be it noted, for the officers — the brains) ; no private
employer could enlist half the numbers necessary at
an)>thing like the wages paid to our soldiers and sailors.

H2 NATIONAL GUILDS

The conditions of the employment, again, are worse than
any respectable private business would permit itself
to impose. Yet, in spite of these drawbacks, soldiering
and sailoring are superior in recognised status to private
occupations such as bricklaying and tailoring — for the
reason, as we maintain, that in them neither does the
wage system prevail, nor is the service designed for the
private profit of any individual or even class.

From these and similar considerations we deduce the
conclusion that the wage system, though as yet in a
less degree than chattel slavery, is, and has always
been, repugnant to the disposition of men. Men do not
seek to escape from a system that suits them, nor do
they associate with such an escape a superior status.
If, therefore, as a matter of fact, men instinctively and,
as they become articulate, consciously seek to escape
from wage slavery, it is fair to say that wage slavery,
whatever its merits, has not the merit of being naturally
acceptable to man.

But in one sense the earth itself is not natural to man.
The earth, our mother, is not so kind that the human
race may do what it pleases. On the contrary, obliga-
tions involving painful toil, not at all to our taste, are
perpetually being forced on us by the disposition of
Nature. It is difficult to conceive a society in which
these obligations can be entirely eliminated or the toil
and sacrifice involved in them entirely transformed into
pleasure. Utopians may dream of such a condition, but
they reckon without their host. Something will remain,
even when we have done our best, that is painful or
requires exertion, or involves the necessity of chastening
our personal inclinations. The question is, therefore,
this : Is the wage system necessary, is it indispensable,
is it a minimum sacrifice we must needs make for the
purpose of exploiting Nature ? Admitted that the ex-
ploitation of men by men is immoral, can this immorality

THE MORAL FOUNDATIONS OF SOCIETY 113

be justified either by the necessities of the case or by the
superior moral advantages of the wage system over any
system we can devise ? It is generally accepted that the
wage system is humanly superior to chattel slavery.
It is also proved that the new system, the system of
wage slavery, is more economically productive than the
system it displaced. But this, it may be argued, was a
happy accident. We cannot expect that our second
moral leap will be equally successful economically with
our first. We may find ourselves, in fact, if we abolish
wage slavery, worse off than we are now.

Without considering these economic objections at
this moment, we may ask what moral advantages are
claimed for the wage system in operation to compensate
for and to justify the immorality involved in the wage
system itself. Admitted that society cannot be utopianly
perfect, is thejnoral balance of the wage system and its
works in favour of or against its maintenance ? Does it
pay society, morally, to maintain the wage system, for
the moral values society derives from its discipline ?
Let us see. There are, broadly, three defences of the
existing system, differing in their degrees of moral value.

The first bases itself purely upon the sanction of law,
assuming the law's inviolable sanctity. Mr. Grabbing
Millionaire, asked to justify his position, replies with
characteristic emphasis : "I accumulated my money
under the law's protection ; I look to the law to continue
its protection." The answer to this is simple : " What
the law has given, the law can take away ; blessed be
the name of the law." What has Mr. Grabbing Million-
aire to say to that ? Literally nothing. Like the
soldier, who lives and perishes by the sword, this man
lives and perishes by the statute-book. Economic power
is his ; but it is of low voltage, and the political power
that springs from it is vulgar and morally ugly ; there
is no beauty in it that we should desire it. Great Britain,
8

H4 NATIONAL GUILDS

with its feudal traditions, has only in recent years
developed this type in all its nakedness, but it thrives in
America. The British type came from South Africa.
It must be evident that no community could withstand a
shock from within or without if it had no stronger moral
justification than this. But the present industrial system
has weathered too many storms to warrant the assump-
tion that its moral justification is rooted in so shallow
and kaleidoscopic an institution as the statute-book.
The mere fact of legal title does not morally suffice.
We must look for the moral sanction behind the law.

The second class of defence may be summed up thus :
The work of the nation must be done ; theorists do not
do it ; the practical man does. Therefore he is but
doing his duty. His duty accomplished, his moral
justification is complete. The practical man does not
pretend that the result of his labours is altogether benefi-
cent ; he is too conscious of the imperfections of human
organisation to make any such inordinate claim. " But,"
he says, " I have honestly done my best ; a better man
would doubtless have done better ; nevertheless, I am
what I am ; what I have got has been acquired in good
faith. I did not primarily rely upon law, but rather
upon the innate fairness of my fellow-men. True, I
have acquired wealth because I was diligent in business ;
but I have not knowingly done anj' man an injury.
Further, taking it by and large, the only practical
way to run the industrial machine is by means of the
wage system. There is wastage, it is true, but so there
is in every machine. The wage system, on the whole,
works, and works reasonably efficiently. Its practicality
gives it moral sanction." Instantly admitting that the
practical man makes out an infinitely stronger case than
Mr. Grabbing Millionaire, we must carefully distinguish
between the practical man's attitude towards to-day and
to-morrow. The element of practicality as a moral force

THE MORAL FOUNDATIONS OF SOCIETY 115

cannot successfully be disputed in regard to yesterday
and to-day. Ill or well done, the work of the world has
been done. We may, indeed, concede more than this :
No student of industrial development would deny that
great moral qualities have gone into the slow integration of
the social system. The technical men have ungrudgingly
given of their best, both to their employers and to their
fellow- workers. Look at the long list of technical and
commercial associations connected with almost every
trade ; consider sympathetically the intellectual work
(often of a high order) gratuitously done out of an in-
creasing sense of guild solidarity ; look into these men's
hearts and watch their glow of pride at the recognition
freely given by their fellow-craftsmen, a far greater
pride in the admiration won than in any monetary con-
sideration ; knowing this, we readily and gratefully
recognise our immense indebtedness to the great army
of thinkers and experts who have in their several ways
conquered nature, even though they had to utilise the
wage system to compass their ends. We can under-
stand this type of practical man (often nearly related to
Carlyle's "practical mystic"), conscious of his moral
strength, reading into the accomplished fact the same
moral purpose that inspired himself. He is, indeed, the
moral prop of the industrial system. Shame a million-
aire into grudging admission that he has by no means
earned the fortune that is his, and he is prompt to defend
the system that enriched him beyond his deserts by
referring us to the experts, the thinkers, the practical
men evolved by that system. Just as he exploits their
labour in the industrial sphere, so he exploits their
character in the moral sphere.

To-day, the practical man remains an ally of the
capitalist section of society because he can, by this
alliance, practically fulfil his gospel of achievement —
of material achievement, of fruitful work in concrete

n6 NATIONAL GUILDS

things. But it is our purpose to convince him that a
far finer career of material achievement awaits him
when the community is reorganised into its true industrial
formation, when every effort of brain or muscle shall be
definitely directed to economic production. We shall
then see that practicality as a factor in the world's work
is by no means a monopoly of the present possessing
classes ; rather, that it is an element of our national
genius and common to all classes. Unless we can prove
the practicality of Guild Socialism, and so attract the
practical man, we admit that we are preparing for a
moral and material catastrophe.

But whilst paying tribute to our army of practical
men and recognising their moral value and influence, it
still remains our duty to examine closely into their
claim that they have made the best of their available
materials. To be set against their claim is the broad
fact that, whilst they have overfed and overdressed and
overhoused a small section of the community, they have
underfed, underdressed, and vilely housed the vast
majority of the population. On the score of practicality,
what has the practical man, the administrator, to say to
this ? He would probably reply that he inherited the
capitalist policy, that he was impotent outside its pur-
view, and that consequently he had no alternative but
to maintain the wage system. But this is a confession
of failure. Is it a failure in morals ? To the extent that
the practical man looked with contempt upon the claim
of the wage slave to be a temple of God, to the extent
that he ignored the imaginative, the intellectual and the
spiritual elements (priding himself upon being above all
things practical), he must be considered a moral failure
— this practical man who built his house upon the sands.
Thus we discover that the apologists of the industrial
system fail in their contention that it calls to itself
the great moral quality of practical achievement. In

THE MORAL FOUNDATIONS OF SOCIETY 117

technical details it has achieved wonders ; in the larger
considerations of national health and economy it has failed
egregiously.

There is a much more subtle defence of our present
social system in vogue in intellectual circles. It may
generally be described as the Conservative defence. Let
us suppose some Conservative leader — say Mr. Balfour
— to be arguing the case for the present system. He
might say : I am profoundly conscious of all the suffering,
injustice, and demoralisation involved in the maintenance
of our social and industrial system. It seems horribly
unfair, and certainly cannot be defended if it be pre-
ventable within the limits of the system. But the system
must remain because it is the true inheritor of all the
great traditions, of the learning laboriously gathered
through endless generations. Even more important,
the faith handed down to us by the fathers must be
conserved. Now democracy is practically the negation
of culture and religion. To be sure, I grant that it
may develop a culture and religion of its own, but the
link with the priceless past will be snapped. New-fangled
religion and eccentric cultures are not to my liking —
emphatically no. How do you think we have preserved
all that was beautiful and enduring in the culture of the
ages ? Many factors doubtless entered into the edifice,
but broadly speaking it has been built up, conserved and
preserved, by a privileged class of ample leisure and
large resources. Nor is that all : this leisured class,
on the whole, has bred wisely, and notwithstanding
some blood vitiation since the advent of the industrial
and financial magnates, we still remain, in the main, a
real aristocracy. If in the practical affairs of mankind
we are unpractical, what of it ? It is not our function.
We are sentinels sternly bidden to guard the sacred
catena of civilisation, to see that there shall be no break
in the continuity of history, tradition, and culture. What

n8 NATIONAL GUILDS

prouder mission was ever entrusted to a privileged class
than to maintain civilisation ? If, therefore, we pain-
fully realise that the continuance of the wage system
involves slavery and the horrible things implied by it,
it is not because we do not sympathise, but because
larger and more enduring considerations must prevail.
We are unwillingly forced to this issue : culture and
religion, the natural words by inheritance of an aris-
tocracy (which economically depends upon wage slavery),
are threatened by a new order of society which cares for
none of these things. We cannot risk the loss of an-
other Alexandrine library ; the Louvre was only saved
by a miracle ; Cromwell's bullets are still imbedded in
our churches. These facts are symbolical. Democracy
triumphant blatantly writes " Ichabod " on our sacred
temples. It is Aristocracy against the Mob.

Thus admitted into the intimacy of Mr. Balfour's
mind, we might, in reply, murmur, " O ye of little
faith ! " But the response would hardly be adequate.
For this, amongst other reasons : The abolition of the
wage system involves not merely an economic revolu-
tion, but, ex hypothesi, a spiritual revolution also. A
spiritual revolution, indeed, will be necessary as a pre-
cedent condition of the economic revolution ; for we are
not so blind to the lessons of history as to imagine that
an economic revolution for the better can be engineered
by force and greed alone. Would then this spiritual
revolution which we hypothecate be likely to destroy
what is already spiritually desirable in existing society ?
Rather it seems essential that it should come not to
destroy but to fulfil ; not to make a complete break
with its own spiritual past, but to release that past for
new conquests. And in this assumption we are supported
not only by reason but by facts manifest to everybody.
For it is clear to-day, if it was never clear before, that
spirituality of mind, culture and innate taste, are not

THE MORAL FOUNDATIONS OF SOCIETY 119

now, if they once appeared to be, the monopolies of any
one class. They can no more confidently be looked for
among the wealthy, leisured classes of to-day than
amongst the artisan and professional classes. The gloomy
forebodings of Mr. Balfour that literature, science and
art would droop and die under the democratisation of
industry are based, therefore, upon a profound mis-
apprehension of the distribution among our nation of the
spiritual qualities of which he speaks. It is the nation
that has always produced them ; and the nation may be
relied upon to continue to produce them.

Even to-day, with the mass of the population de-
graded by wage slavery, is it the young aristocrat or
the young democrat who dreams dreams ? Is it the
Pall Mall lounger or the untiring Socialist worker in
the provinces who lives in ideas ? Is it the young man
just down from Oxford or Cambridge, or the studious
working man who to-day soaks himself in genuine litera-
ture ? Publishers, booksellers, and librarians could tell
Mr. Balfour strange stories on this head.

But what, after all, does the Conservative really
mean by art and literature and the morals and manners
that flow out of them ? Is it not the art of a class and the
literature of a select few ? This fact stands sure : there
can be no great art and literature that is not rooted in
the life of the people. We know, in fact, that the greatest
periods of culture the world has ever seen have been
associated with a national consciousness of which the
self-consciousness of any given class is a contradiction.
It was not on his class that Plato or Aristophanes prided
himself ; it was on his nationality. And it is no less
certain that Dante, Goethe, Shakespeare, and the great
men of later Europe have been imbued with the spirit
of their respective nations far more than with the spirit
of their class. However it may be for the dilettantes of
culture, the culture heroes themselves have always

120 NATIONAL GUILDS

depended for their inspiration on the corporate spirit
of the community in which they lived. It is true that
dilettantes have in all ages sought to appropriate for
the few and for their class the works of communal minds,
thus confining to party what was meant for the nation ;
but it is equally true that the first to condemn them for
their narrow-mindedness have been the communal minds
themselves. These latter know, indeed, the sources of their
strength. It is not from any class that they draw their
power, but from the nation at large and from its very soul.
We may therefore reply to the Conservative's plea
that the wage system in creating a privileged wealthy
class creates the conditions of culture, by denying, first,
that culture (which is merely good taste) is the property
of any class ; secondly, by pointing to the examples of
national culture and contrasting them with the ephemeral
exotics of class culture ; again, by calling to our support
the culture heroes themselves ; and, finally, by challeng-
ing in theory as well as in fact the assumption on which
the case for an a^sthetising oligarchy rests. For is it not
obvious that the assumptions on which Mr. Balfour's
arguments depend are the assumptions that artists of all
kinds prefer inequality to equality, that they are more
happily inspired when working for the wealthy than when
working for all, that, in the end, they can work for a
class ? But we have yet to learn the name of any artist
of the first rank who did not hate his servitude, even when
he submitted to it, to the wealthy ; or was not drawn,
usually against the opposition of the select few, to
appeal to men of all classes, the nation at large. For,
again, such men know not only that the soul of the
nation must be whole that their art may flourish, but
that their fitting hearers are scattered over all classes and
in all ranks and walks of society. To assume that the
wealthy, or even the leisured, have, as a class, innately
more taste and appreciation of culture than the poor or

THE MORAL FOUNDATIONS OF SOCIETY 121

the overworked, is contrary to common experience.
Society is not now, if it ever was, graded in castes of
mind corresponding with the rates of income. On the
contrary, as Manu said, the castes are mixed and mingled
in inextricable confusion. Anywhere, in any economic
class, a Shakespeare may be born or a lover of Shakespeare
may be found. It is simply, therefore, the desire of
finding his complete order of hearers that drives instinc-
tively the great artist to cast his net over the whole
nation. From the nation he comes, and to the nation he
desires to go.

We may certainly conclude that the fears for culture
which dilettantes may entertain from the equalisation of
economic conditions are baseless and without the warrant
of the creators of culture. On the contrary, it is only
when all has been made equal that can be made equal
that the spiritual inequalities of talent and genius will
plainly appear.

Broadly, then, we may affirm that the moral founda-
tions of existing society are not more immune from
destructive analysis than is its economic basis. The
wage system creates two classes in the community,
thereby splitting the nation in twain, to the destruction
not only of its own soul, but of the soul of its two divided
classes. With the abolition of the wage system, followed
by the guild organisation of society as a whole, we shall
reach a unity of economic interests and a correlative
unity in moral perception.

II

A SURVEY OF THE MATERIAL FACTORS

Before we can profitably begin our study of Guild
Socialism, it is desirable that we should present a con-
spectus of the existing organisation of the industrial
factors. As its name implies, Guild Socialism is neces-
sarily a work of democratic social reconstruction. It is
democracy applied to industry. Herein it differs funda-
mentally from State Socialism, which leaves to the
bureaucrat the task of organising the industrial army
without regard to the democratic principle. The term
" Guild " implies voluntary organisation and democratic
management. Historically considered, this is its true
connotation. It is because of this tradition that we apply
the word " Guild " to that democratic industrial organisa-
tion which our inquiry into the wage system has per-
suaded us is necessary if the future of the British national
as well as working community is to be ensured. We have
seen how certain it is that if the mass of the population
consciously accepts the labour commodity theory and
accordingly sells itself for wages, the servile state becomes
inevitable. That way lie despair and the denial of every
ideal, every hope and every democratic expectation for
the future. The future welfare of Great Britain is bound
up in its present will-power and capacity so to reorganise
itself that it can produce and distribute wealth relieved
from the incubus of competitive wages, rent, interest and
profits. As we have already proved, the first step

A SURVEY OF THE MATERIAL FACTORS 123

is the abolition of the wage system, for it is by means
of wages that rent, interest and profits are exacted.
But a mere declaration that wages are abolished is
obviously absurd, unless an effective and superior sub-
stitute for the wage system is forthcoming. That sub-
stitute, in its turn, depends upon the coherence of the
new organisation. But we must not even begin to
elaborate the main outlines of the new social structure
until we have clearly realised the content and extent of
our task.

Confining ourselves in this chapter to the material
factors of the problem, these are mainly — (i) production ;
(ii) population engaged in production and distribution ;
(iii) the number of wage earners as distinct from admini-
stration ; (iv) the value of labour as distinct from the
cost of the raw or semi-raw material. Inasmuch as the
primary consideration is our capacity to produce wealth,
we shall restrict ourselves to that aspect of the inquiry,
leaving the question of distribution to subsequent treat-
ment. We would, however, remind our readers that we
have already partially dealt with distribution in our
chapter, " The Economics of the Wage System."

The first census of production, carried out in 1907,
disclosed the fact that 6,936,000 persons (salaried and
wage-earners) are engaged in productive work, the
annual labour value of which is £712,000,000. The
labour value here mentioned is calculated by excluding
the value of the raw materials before they entered the
factories. In the words of the report : "It represents
the total value added to the materials in the course of
which wages, rents, royalties, rates, taxes, depreciation,
advertisements, and sales expenses and other establish-
ment charges, as well as profits, have to be defrayed."
It is extremely important that our readers should clearly
understand that these figures do not include (a) transit
charges, (b) raw materials, (c) wholesale or retail dis-

124 NATIONAL GUILDS

tributive charges of any kind. The £712,000,000 repre-
sents only the value added to the raw material by the
application of productive labour power, direct or indirect.
At the risk of being tedious, let us again remark that we
are dealing only with production. It will be observed
that the number of employees, quoted above, includes
both administration, — roughly speaking, salaried persons,
and labour, i.e. the wage-earners. As, however, we
deemed it essential to the argument that these should be
distinguished from each other, we have been at some pains
to ascertain the exact number of wage-earners engaged in
the industries with which we propose to deal. It is
fortunate that the preliminary reports of the Census of
Production give us also the average wages of the wage-
earners in certain trades : it is unfortunate that these
reports do not as yet cover the whole field.

As we write we have before us the particulars of
about 140 different trades. We should like to set them
all out completely in tabular form, but apart from the
fact that our available space is limited, no serious end
would be gained. We shall therefore arbitrarily select
only those trades wherein 50,000 or more persons are
engaged. Wherever possible we have given the average
wages.

The average wage in this table is probably over-
stated. We have taken the average weekly wage as
ascertained by the Census of Production and multiplied
by 50, allowing, that is, only two weeks' unemployment
per worker per annum. The building group, as a seasonal
trade, we multiplied by 40, the figure usually given.
In one or two instances we have grouped the returns for
the sake of compression, and grouped the average output
and wage accordingly.

This industrial table is probably the most significant
published in recent years. It lends itself to exhaustive
treatment not only by the statistician, but by the social

A SURVEY OF THE MATERIAL FACTORS 125

philosopher. Without entering at length into its full
meaning, there are certain important conclusions germane
to our particular text to be drawn from it, and only to
these shall we now refer.

First : It is graphically evident that the wage system
is the basis of modern wealth production ; for only by
treating labour as a commodity and subjecting it to a

Net
Output.

Persons
Employed.

Net Output

Wage

Average

Trade Group.

per Person
Employed.

Earners
Employed.

Annual
Wage.

£

£

£

Building and Contracting

Trades ....

42,954,000

513.961

84

476,359

59

Coal Mines ....

106,364,000

840, 280

129

826,567

—

Iron and Steel Factories

30,948,000

262,225

n8

248,161

82

Shipbuilding and Marine

Engineering

17,678,000

184,557

96

175,105

72

Engineering Factories

49,425,000

455i5°i

108

416,924

67

Railway Construction

17,103,000

241,526

71

23*>736

67

Clothing and Millinery

Factories ....

27,237,000

440,664

62

390,863

36

Boot and Shoe Factories .

8,965,000

126,564

71

"7,324

46

Cotton Factories

46,941,000

572,869

82

560,478

50

Woollen and Worsted.

19,452,000

257,017

76

247,920

40

Jute, Linen and Hemp

(Great Britain)

5,020,000'

81.703

61

79,534

34

Linen and Hemp (Ireland)

4,318,000

71,761

61

7i,3n

3°

Printing and Bookbinding .

15,288,000

172,677

89

156,161

Chemicals ....

9,464,000

51,088

185

45,107

—

China and Earthenware

4,596,000

67,870

68

64,043

—

Brick and Fireclay

5,060,000

63,287

80

59,880

—

Bread and Biscuit Fac-

tories ....

11,590,000

110,168

105

97.724

—

Cocoa and Confectionery .

4,975,000

60, 735

82

54.132

—

Brewing and Malting .

41,140,000

85,222

483*

69,249

—

Timber Factories

6,201,000

74.564

83

66,224

—

Furniture ....

9,245,000

91,412

101

83.274

—

Laundry ....

7,161,000

130.653

55

119,863

32

Gas

17,278,000

83,531

208

74.967

75

* Including Excise Duties.

competitive wage price is it possible to pay rent, interest,
profits, establishment charges and all other expenses.
Towards these expenses, the individual building wage
slave contributes every year the sum of £25 ; the iron
and steel worker, £36 ; the shipbuilding worker, £24 ;
the engineer, £41. More striking are the figures dealing
with such necessities as clothing, boots, cottons, woollens
and linens. Here the average wage is decidedly low,

126 NATIONAL GUILDS

largely owing, it appears, to the presence of the com-
petition of the industrial woman worker. Yet, low as
these wages are, it will be observed that the industry
returns very much the same surplus value as do the more
highly paid trades. Thus we discover that low wages are
not really due to bad trade, but to the ability of the
purchaser of labour power to exact surplus value. A
laundress earning £55 annually, pays £23 from this amount
for the upkeep of her employer's establishment. From
the commercial standpoint (and the standpoint, that is,
of surplus value) there is practically no difference in value
between the combined labour of an equal group of laundry
women, building employees, and shipbuilders. Thus
it is evident that profits really spring from the regular
employment of large masses of wage slaves, no matter of
what kind.

Second : The unequal wages paid to different trades
yielding equal economic value is clearly an inequitable
outcome of the existing wage system and calls for instant
remedy. But it is certain that no immediate remedy
is possible during the continuance of the present industrial
system, because the capital invested in the various trades
has been advanced on the implied understanding that
wages shall not be raised at the expense of dividends.
The return on capital must approximate in all industries.

Third : So far as the productive processes are con-
cerned, it is evident that there is no economic justifica-
tion for the categories of rent, interest and profits, pro-
viding that organised labour (in guilds or otherwise)
undertakes, and is able, to maintain productive output
and efficiency at, at least, the same standard now obtain-
ing. We do not think it will be difficult to show that
a better economic organisation of labour power would
greatly improve upon the present system of capitalist
exploitation. In the meantime, the conclusion is irre-
sistible that, consistent with the maintenance of rent,

A SURVEY OF THE MATERIAL FACTORS 127

interest and profit, at their present rates, the employing
class can make no further additions of any consequence
to real wages. We have, in fact, reached the breaking
point. Either surplus value must be reduced (which is
impossible under capitalism) or wages must be stereotyped
at their present low average. It is for the Labour army
to decide whether it shall remain for ever servile, for ever
wage slaves, or whether it shall absorb rent and interest,
and by means of guild organisation undertake the
functions of the present employing class together with the
economic rewards.

Fourth : There are probably fifteen million em-
ployees engaged in wealth production or wealth distri-
bution. But we find from this table that less than seven
millions are directly engaged in production. It will be
necessary to inquire how far guild organisation can
economise on distribution. If we put the cost of pro-
duction at 100, it will be found that the ultimate cost
to the consumer varies between 140 and 220. Economic
distribution is necessarily an integral charge upon pro-
duction. How much of the existing system of distribu-
tion is uneconomic ? That remains to be seen.

We do not attach much significance to the problem
so often discussed whether we suffer most from over-
production or under-consumption or any variation of
this irrelevant conundrum. But we draw two deductions
from the returns before us of the Census of Production :
{a) That any considerable increase in production would
necessitate a correlative increase in the number of pro-
ductive workers ; (b) that our capacity for increased pro-
duction is only limited by our supply of raw materials
and labour power. As, with one or two exceptions,
there is yet no dearth of raw materials, it becomes an
extremely important issue whether organised labour,
obtaining command of industry by declining to sell itself
for wages, and reorganising its forces, would not find it

128 NATIONAL GUILDS

desirable to draft at least two more millions of workers
into productive occupations, either from uneconomic
distribution or from the under or unemployed. It would
probably be one of the first tasks undertaken by a plenary
conference of guilds.

Fifth : In view of the fact that there are nearly seven
million wage-earners occupied exclusively on production,
and as there are fewer than three million trade unionists,
more than 200,000 of whom are distributively engaged,
it is evident that the first step in the reorganisation of the
labour forces must be such a change in the terms of
membership as shall enable each union to embrace every
employee in its particular trade. In this connection
it is important to note the apparently excessive number
of employees assigned to the administrative side of pro-
duction— foremen, clerks, and the like. In the building
section there are no less than 37,000 ; the iron and
steel factories have 14,000 ; shipbuilding yards, 9000 ;
engineering shops, 39,000 ; clothing, 50,000 ; boots and
shoes, 9000 ; printing and bookbinding, 16,000 ; bread
and biscuits, 13,000 ; cocoa and confecotinery, 6000 ;
timber, 8000 ; furniture, 8000 ; laundries, 11,000.
Would it be necessary in these trades, under a guild
system, to maintain an army of 220,000 men who do not
to-day rank as wage-earners, but as overseers of wage-
slaves ? No doubt a considerable proportion of these
are of economic value, such as the scientific and technical
contingents, but, as a class and having regard to the;r
numbers, they certainly constitute a problem demanding
serious thought. For example, how many of them are
slave-drivers, pace-makers — the drill sergeants of the
capitalist organisation ? And what is to be the attitude
of the reorganised trade unions towards them ? Inclusive,
we trust, for these men are just as much the product of
their economic environment as are the wage slaves them-
selves.

A SURVEY OF THE MATERIAL FACTORS 129

Now the first general conclusion that springs to
the surface, from an unbiased consideration of these
facts, is that the work involved in reorganising in-
dustrial society is an industrial and not a political
task. The term "politics" has, in these later days, a
special and narrow connotation. No doubt, to speak
broadly, a man who occupies himself with the trans-
formation of industrial society is engaged in political
action. In that sense the Syndicalists are politicians,
none the less so because they spend half their time in
disavowing politics. But custom has rightly ordained
that politics is an affair of State, the pursuit of problems
relating to the community as a State and without par-
ticular regard to its economic structure. Thus, a politician
is one who devotes himself to that category of questions
which may suitably be dealt with by Parliament. Experi-
ence has taught us that the parliamentary function has
practically no relation to production and distribution
of wealth. It concerns itself with the conditions surround-
ing men in the pursuit of their industrial work ; it may
by laws touching the public health favourably or un-
favourably affect industrial work ; it may even specify
the hours of labour a man, a woman or a " young person "
can work ; but it cannot, from without, abrogate the
actual industrial system, because it did not create it.
Indeed, as we have repeatedly shown, it is largely the
creation and not the creator of the industrial forces.
In the accepted and proper use of the term, economics
dominate politics, and, in consequence, politicians are
economically impotent. During the past decade a school
of Labour politicians has arrived which has sought to
convince the wage-slaves that the conquest of political
power is a condition precedent to the conquest of eco-
nomic power. We now know that the economic power of
labour, as indicated by the decline in real wages, has
systematically decreased with the increase in political
9

130 NATIONAL GUILDS

labour activity. For every Labour Member of Parlia-
ment there has been a corresponding loss to labour of
at least a million sterling annually as measured by the
fall of real wages.

The work, then, that lies before us promises to be
infinitely more fruitful than those barren political enter-
prises for which we have paid so dearly. Is there any
man or woman who, realising the meaning of the in-
dustrial problem presented by the foregoing table, is
so bereft of imagination that he cannot perceive how
immensely beneficent an industrial campaign must be ?
The plain truth is that the capitalist exploitation of
labour by means of the wage system has led to the most
frightful disorganisation. Take, for example, our esti-
mate of the average annual wage as set out above. We
have allowed in every case, with one exception, for two
weeks' unemployment every year. But look at the
actualities as disclosed by the balance-sheets of the trade
unions. In 1910 the building unions spent £113,635
on unemployed benefit, or 28-9 per cent, of their annual
expenditure ; the miners spent 18-1 per cent. ; the
engineers and shipbuilders spent £213,893, or 22 4 per
cent. ; the textile unions, £170,434, or 56-2 per cent.;
the clothing unions, 19-1 per cent. ; the printers, 43-9
per cent. Do not these figures disclose the failure of the
employers to run their businesses successfully in the
interests of the nation ? Is it not high time that Labour
should refuse thus to maintain the reserves of employ-
ment out of its exiguous wage ? We have already quoted
Mr. Binney Dibblee to the effect that the maintenance of
labour reserve is a reasonable charge upon the employers.
But we now see that rent, interest and profits, in demand-
ing their pound of flesh, have at the same time refused
to maintain their victims, even while the flesh was
growing again. Anybody may do this for them — the
trade unions, private charity, the State ; but the capi-

A SURVEY OF THE MATERIAL FACTORS 131

talists will not do it themselves. No vindictive attack
upon the propertied interests need be considered — the
situation is far too serious to be governed by low
motives — what we must understand is that Great Britain
is faced with a crisis so terrific, so far-reaching, that unless
she grasps its true significance, her economic decline is
inevitable. We do not deny that she might conceivably
go far on the purely material plane by frankly adopting
the policy of the servile State and by deliberately com-
pelling the mass of the population to pass into standardised
and irremediable wage slavery. But, apart from the fact
that no nation can exist " half-slave and half-free," we
believe that slavery, economic or psychological, is so
repugnant to British thought and habit, that when the
Labour army wakes up to the realities it will sweep away
the wage system and itself undertake the industrial work
of the country.

Ill

AN OUTLINE OF THE GUILD

There is no mystery attaching to the organisation of
the Guild. It means the regimentation into a single
fellowship of all those who are employed in any given
industry. This does not preclude whatever subdivisions
may be convenient in the special trades belonging to the
main industry. Thus the iron and steel industry may
comprise fourteen or fifteen subdivisions, but all living
integral parts of the parent Guild. The active principle
of the Guild is industrial democracy. Herein it differs
from State Socialism or Collectivism. In the one case
control comes from without and is essentially bureau-
cratic ; in the other, the Guild manages its own affairs,
appoints its own officers from the general manager to the
office boy, and deals with the other Guilds and with the
State as a self-contained unit. It rejects State bureau-
cracy ; but, on the other hand, it rejects Syndicalism,
because it accepts co-management with the State, always,
however, subject to the principle of industrial democracy.
Co-management must not be held to imply the right of
any outside body to interfere in the detailed administra-
tion of the Guild ; but it rightly implies formal and
effective co-operation with the State in regard to large
policy, for the simple reason that the policy of a Guild is
a public matter, about which the public, as represented
by the State, has an indefeasible right to be consulted
and considered. It is not easy to understand precisely

AN OUTLINE OF THE GUILD 133

how far the Syndicalist disregards the State, as such ; nor
is it necessary to our task that we should make any such
inquiry. For ourselves we are clear that the Guilds ought
not and must not be the absolute possessors of their
land, houses, and machinery. We remain Socialists
because we believe that in the final analysis the State, as
representing the community at large, must be the final
arbiter. We can perhaps make our meaning clear by
an analogy. Suppose Ireland, Scotland and Wales to
be self-governing bodies, but all subject to the Imperial
Parliament, in which by that time we would expect all
the self-governing Colonies to be represented. Assume
it to be necessary for the Imperial Parliament to levy
contributions upon its constituent units. So many
millions would have to be collected from England, so much
from Ireland, Scotland, Wales, Canada, South Africa and
Australia. The amounts would be agreed upon by a
representative Imperial Parliament, but the methods of
levying the tax would rest with each self-governing group,
who would not tolerate any external interference. In this
sense the Guilds would have large communal responsi-
bilities, upon which they must agree with and often defer
to the public ; but those responsibilities once defined,
the industrial democratic Guild, by its own methods and
machinery, will do the rest.

We thus are partly in agreement with the State
Socialist or Collectivism who believes in conserving the
State organisation and reserving to it certain functions,
which we shall hereafter endeavour to define ; but we
are also in substantial agreement with the Syndicalist,
whose real contention, after all, is that the work men
do they shall themselves control, being, through their
unions, their own economic masters. Nor can we see
that Syndicalism reasonably interpreted excludes the
possibility of a purified political system concerning
itself with the national soul.

134 NATIONAL GUILDS

But the recognition of State organisation and State
functions does not invalidate our main contention that
economics must precede politics. On the contrary, it
strengthens it. The difficulty with modern statesman-
ship is that it has to spend its strength on ways and
means when it ought to be doing far greater work. It
is like a scientist or an artist who is perpetually distracted
from his real work by domestic worries. Remove from
statesmanship the incubus of financial puzzledom and it
may achieve glory in the things that matter. And in all
human probability a finer type of politician will be called
into activity. Financial considerations corrode politics
as effectually as they do the individual worker. Now, if
the Guilds are in economic command, if, further, their
labours exceed in results the present wage system, it
follows that they will not be miserly in devoting all the
money that is required for the cultural development of
the community. The Syndicalists tell us that the unions
can do this better than the State. We are emphatically
of opinion that a totally different type of administrator
from the industrialist is required for statesmanship. The
one type is rightly a master of industrial methods, the
other is of disciplined imagination and spiritual per-
ceptions. The fine arts, education (including university
control), international relations, justice, public conduct —
these and many other problems will call and do call (in
vain nowadays) for a special order of intellect, and must be
susceptible, not to the particular influence of the Guilds
as such, but to the influence of what Arnold called the
best mind of the community.

At the outset, the most important task of the Guilds
will be the industrial reorganisation of society upon the
basis of mutuality : in other words, the abolition of the
wage system. This will carry them far. It involves
the final solution of unemployment. Every member of
the Guild will possess equal rights with all the others,

AN OUTLINE OF THE GUILD 135

and accordingly will be entitled to maintenance whether
working or idle, whether sick or well. Further, it will
be for the Guilds to decide, by democratic suffrage,
what hours shall be worked and generally the con-
ditions of employment. All that mass of existing
legislation imposing factory regulations, or relating
to mining conditions, to the limitation of the hours of
work (legislation which we have previously described
as sumptuary), will go by the board. The Guilds will
rightly consider their own convenience and necessities.
It may be discovered, for example, that times and
conditions suitable to the Engineering Guild will not
suit the Agricultural Guild. Legislation attempted
from the outside would in such an organisation be
regarded as impertinent. Even the existing old age
pensions would be laughed to scorn as hopelessly
inadequate.

The Guild then would supplant the present capitalist
class on the one hand ; on the other, it would assume,
instead of the State, complete responsibility for the
material welfare of its members.

Inheriting the direction of industry from the present
private employer and capitalist, the Guild must be able
more efficiently to produce wealth and more economically
to distribute it. This involves the closest intimacy and
co-operation with all the other Guilds. The work of the
community could not be done by the Guilds in isolation ;
each must be in constant and sympathetic touch with
the Guilds that supply them and the Guilds that distribute
their products. There is no room here for any policy
of dog in the manger. The Guild must never be allowed
to say : " These things are ours." They must say and
think : " We hold this machinery and these products in
trust." They must not exist to accumulate property ;
their moral and legal status must be that of trustee.
Thus there must spring out of the Guilds some form of

136 NATIONAL GUILDS

joint management, not only with the other Guilds but
with the State.

The abolition of the competitive wage system implied
in the organisation of the Guild necessarily carries with
it the abolition of all distinctions between the adminis-
trative and working departments. It therefore follows
that every type and grade of worker, mental or manual,
must be a member of the Guild. The technical man,
for example, must look to the Guild to give effect to his
inventions and improvements, whereas formerly he
looked to his employer or even to some outside capi-
talist. It will be to the interest of all his fellow mem-
bers to insist that whatever improvements he may sug-
gest for the increase of production or the decrease of
manual toil shall be given a thorough trial. No longer
will he be regarded as dangerous to the employees who, as
competitive wage slaves, feared that his inventions might
mean dismissal and starvation. The essence of Guild life
is in its unification of economic interest and purpose.

There can be no doubt that the tendency inside the
existing wage system is to level wages. The old dis-
tinction between skilled and unskilled is rapidly being
dissipated, both by the development of machinery and
the economic pressure exerted by foreign competition,
and the increased price of money. With this tendency
we have no quarrel — on the contrary, we welcome it.
But this wage approximation has as yet hardly touched
the rent of ability still more or less willingly paid to
those in the upper reaches of the administrative hier-
archy. That they will finally find their true economic
level is certain. Meantime their services are rightly
in demand and their remuneration is assured. Even
if the process of wage approximation goes much further
than we now foresee, it is nevertheless inevitable that
graduations of position and pay will be found necessary
to efficient Guild administration. We do not shrink

AN OUTLINE OF THE GUILD 137

from graduated pay ; we are not certain that it is not
desirable. There will be no inequitable distribution of
Guild resources, we may rest assured ; democratically
controlled organisations seldom err on the side of gener-
osity. But experience will speedily teach the Guilds
that they must encourage technical skill by freely offering
whatever inducements may at the time most powerfully
attract competent men. There are many ways by
which invention, organising capacity, statistical aptitude
or what not may be suitably rewarded. It is certain
that rewarded these qualities must be.

Broadly, then, this is an outline of the Guild as we
conceive it. Every succeeding chapter must be devoted
to filling in the details.

But we are not building Guilds in Spain ; ours is not
the Utopian adventure of the dreamers of yesterday.
We are writing under the conviction of extreme urgency ;
we believe that the organisation of industrial society
here roughly sketched out is the only practicable way
to save the workers from wage slavery and psychological
servility. We are not travellers from Altruria ; we live
and move amidst the sordid realities of the existing wage
system. Our plan is for to-day that we may prepare for
a better to-morrow. The conception of Guild organisa-
tion is not new. Twenty years ago it was common talk
amongst the more far-sighted Socialists, and it would
have been practical politics a decade ago had not the
thoughts and activities of Socialists drifted away into
the barren desert of conventional politics. Never again
will that mirage lure us from our path ; never again will
we waste our efforts hunting the snark for the aggrandise-
ment of shallow-minded Labour nonentities who dream of
a political career ; never again will we fail to remind
Socialists that Socialism is an economic scheme and only
to be achieved in the economic sphere. The particular
industrial organisation which we call Guild Socialism

I3«

NATIONAL GUILDS

is the only plan by which we can practically realise
industrial democracy.

It is, indeed, practicable ; but practicable only so
far as the Labour army wills it. And because it is so
practicable we do not hesitate to set out in all its naked-
ness the one great obstacle that bars the way. We have
made it plain, we think, that the Guild must be absolutely
comprehensive in its membership — like the sun, exclud-
ing none. Nevertheless, the nucleus of the future Guild
must be the trade union. In our chapter, " The Transi-
tion from the Wage System," we emphasised the neces-
sity of the trade unions throwing down their barriers
and widening their borders so that everybody could come
in. This is to-day the most important and most urgent
thing to be done. Let us see what is involved. Again,
let us examine the actual industrial organisation of pro-
duction so that we may understand how far trade
unionism has to travel. We here set out some par-
ticulars as to personnel :

Trade Group.

Persons
Employed.

Wage-
Earners.

Trade
Unionists.

Building and Contracting

Mines and Quarries .

Metals, Engineering and
Shipbuilding .

Textile Trades .

Printing. Paper, Bookbind
ing and Allied Trades

Clothing Trades

Woodwork and Furnishing
Trades .

5I3.96I
958,090

1,426,048
1,229,719

317.550
645.233

224,098

476,359
939.515

1,330,902
1,189,789

279,626
552,165

210,407

155.923
(68 Unions)

729.573
(84 Unions)

360.329
(211 Unions)

379,182
(273 Unions)

73.939
(38 Unions)

67,026
(40 Unions)

38,836
(91 Unions)

AN OUTLINE OF THE GUILD 139

These representative figures might easily be ex-
tended to include all our industries, but surely those
given suffice. Is it possible to censure too severely
the group of labour-politicians who have deliberately
drawn away the trade unionist from his true business
of organising labour and led him a fool's dance through
the political quadrilles ? We are sometimes blamed for
our bitterness towards the political Labour Party. But
indeed what we have written is mild compared with what
we think and feel. Wages falling, falling, falling ; the
workers helpless in such a mess of wretched disorganisa-
tion— over 800 trade unions in the seven trade groups
cited above — and men claiming to represent these hapless
wage slaves complacently sunning themselves in the
fashionable purlieus of Parliament. It is desertion in
the face of the enemy. Compared with these men
Bazaine of Metz was a demigod.

Yet, in sober truth, the situation is not so desperate
as it looks. Consider, for example, the labour spent
in organising no less than 800 unions in seven different
industrial groups. Wisely inspired, how much easier
would it be to-day to extend the membership of seven
large unions ? These small unions were the product
of their period and environment. Economic develop-
ment has left them temporarily in a back-water, but
the necessities of wage slavery are now rapidly welding
together these unions into federations, whilst a sense of
urgency is spreading through the ranks concurrently
with the growing realisation of the futility of politics.
It is now the first and almost the only duty of every
trade unionist to forget old associations and alignments
and to work steadily towards the ideal of one union for
each industry and every eligible worker in it.

We look confidently for the rise of a young group
of trade unionists who will understand the necessities
of the case and forswear a political career, or, indeed

140 NATIONAL GUILDS

any career outside their unions. The day of the political
obscurantists on the make has almost closed in its ap-
propriate darkness. Certain it is that these young men
are now all that stands between the existing wage-
system and its crystallisation into hopeless permanence.

A WORKING MODEL

Having sketched the outline of a Guild, let us examine
how it applies in practice. Hitherto we have discussed
the manufacturing or productive industries. It would
have been easy to have taken one of them for a working
model, but it will, we think, prove more interesting to
widen our survey and to examine the transport in-
dustry. Transport is obviously an integral part of pro-
duction, involving the movement of raw or semi-raw
materials in the first stage and the distribution of the
finished product in the third stage. Economical trans-
port, under capitalistic competition, is obviously of the
highest importance. In all the industrial countries a
fierce fight has waged between the manufacturing and
the transport interests. This has been particularly the
case in America, where the great railway systems have
concerned themselves with the development of virgin
territories and have levied excessive tribute. American
politics have largely raged round transport. The great
American railway systems have dominated Western
politics for two or three generations, and afford ample
proof of our contention that economic precedes and
determines political power. The novels of the late
Frank Norris, particularly the first of his trilogy —
The Octopus — accurately describe the tremendous power
held by the railway interests. Even in the Eastern
States this power is still exerted although counterbalanced

142 NATIONAL GUILDS

to a large extent by the manufacturing interests. Roughly,
American railway policy has been to charge the heaviest
possible freight rates that the industries can bear. Their
rates have steadily advanced with the increasing pros-
perity of the territory in which they operate. In Great
Britain the railway companies have not exercised quite
the same sovereign powers. In the nature of the case
they could not do so, because they arrived on the scene
after the manufacturing interests had established them-
selves. Nevertheless, the British railways have contrived
to do remarkably well ; their capital has been " watered "
and dividends are to-day paid upon inflated capital
values. Thermo vement for the nationalisation of rail-
ways has by no means been confined to Socialists, many
Chambers of Commerce having declared in its favour.
But capitalist solidarity has asserted itself. The Bir-
mingham Chamber of Commerce some years ago was
on the point of passing a resolution in favour of nationali-
sation, when Mr. Arthur Chamberlain intervened.
" Gentlemen," said he, " shall dog eat dog ? " Many
manufacturers, smarting under railway exactions, would
gladly see the railways nationalised, but they realise that
nationalisation might not stop at railways. So they
bear the ills they have rather than fly to others that they
know not of. The German nationalised railways have in
many ways subserved the interests of German industries,
especially in the way of through freights from German
manufacturing centres — Solingen, for example — to oversea
ports. There are a thousand anomalies that have arisen
in England in consequence. A Birmingham hardware
manufacturer some years ago found it cheaper to ship
his goods first to Solingen and thereafter to South Africa.
By this means he evaded the depredations of the shipping
rings.

But the wage system presses as harshly on the French
and German nationalised railways as on the capitalistic

A WORKING MODEL 143

English lines. From the wage slave's point of view,
the one is as bad as the other. Indeed, strangely enough,
the privately managed British companies pay better
wages and give better conditions than the German and
French national systems. The nationalised French lines
are to-day seething with discontent.

The reason is not far to seek. The nationalised
railway has to pay interest on the purchase money
precisely as do the private companies, whilst it has
been abundantly proved that bureaucracy, in the ac-
cepted meaning of the word, is more incompetent than
the Board of Directors with their more elastic methods.

The wage slave, therefore, in passing from a capital-
istic to a nationalised railway system merely exchanges
King Stork for King Log.

From these facts we deduce two conclusions :

(1) So long as the investor has a first charge upon
the assets or the profits, wage slavery must continue.

(2) Bureaucracy being incompetent and private capital-
ism oppressive, it follows that the only way out is the
adoption of industrial democracy, as expressed in the
Guild.

Let us then see how a Transport Guild would grow
out of the disorganisation, chaos and wage slavery of
existing arrangements.

According to the Census of 1901, there were en-
gaged in the " conveyance of men, goods and messages
(excluding merchant seamen abroad)," 1,497,629 em-
ployees. The 1911 Census will doubtless show an in-
crease commensurate with the general increase of popula-
tion, but the figures are not yet available. Roughly,
then, the Transport Guild must comprehend a member-
ship of 1,500,000. How far towards this total do the
transport unions go ? We shall quote the names of the
various transport unions together with their membership
at the end of 1910. It would be simpler to quote the

144

NATIONAL GUILDS

sum total, but mention of the various unions gives an
excellent bird's-eyeviewof the sub-divisions possible in the
Guild, as also of the practical complexities of organisation :

Amalgamated Railway Servants .

Belfast and Dublin Drivers and Firemen .

Associated Locomotive Engineers and Firemen

United Pointsmen and Signalmen .

General Railway Workers .

Railway Clerks of Great Britain and Ireland

Edinburgh and Leith Cab Drivers .

London Carmen ....

National Amalgamated Coal Porters

Amalgamated Tramway and Vehicle Workers

Amalgamated Carters, Lorry men and Motormen

United Carters of England .

Wigan and District Carters and Lorrymen

Halifax and District Carters

Newcastle Tramway Workers

Limerick Carmen and Storemen

South Shields Steam-Tug Boatmen

Wear Steam Packet Trade Society

Tyne Steam Packet Prov. Society .

Hull Seamen and Marine Firemen .

Monkwearmouth Steam-Tug Prov. Society

National Sailors and Firemen

Marine Engineers ....

Tyne Steam Packet Prov. Society (Newcastle)

Tyne Fogboatmen ....

National Ships' Stewards, Cooks, Butchers and Bakers

Tyne Watermen ....

Watermen, Lightermen and Watchmen of the River

Thames ....

Weaver Watermen ....
Amalgamated Foremen Lightermen (Thames)
Upper Mersey Watermen and Porters
Mersey River and Canals Watermen
Manchester Ship Canal Pilots
Greenock and Port- Glasgow Rafters
Amalgamated Stevedores .
Greenock General Porters' Labourers
Montrose Shore Labourers
Dock, Wharf, Riverside and General Workers

A WORKING MODEL

145

Cardiff, Penarth and Barry Coal Trimmers and Tippers

Mersey Quay and Railway Carters

National Dock Labourers .

Labour Protection League

Great Grimsby Coal Workers

Grimsby General Workers .

Limerick Harbour Employees

Greenock Dock Labourers

North of England Trimmers and Teemers

Dunstan Trimmers

Irish Transport and General Workers

i,450
S,o83

14,253

2,500

80

516

40

162

1,684

176

5,011

Altogether in 1910 there were 59 transport unions,
with 1947 branches and a membership of 242,270.
That is to say, rather less than one in six of the trans-
port employees was enrolled in the unions.

At the first glance it would appear that this list of
transport unions is a tedious narration ; but those who
possess imagination will understand the importance of
thoroughly realising the romantic panorama of human
effort involved in the " conveyance of men, goods and
messages," and the work necessary to the formation
of the Guild. First and foremost is the work of uni-
fication. These fifty-nine unions have each their official
staff — their president, treasurer, organiser, secretary,
branch secretaries, each according to its numerical
strength and territory covered. Many of these unions
are kept isolated by the self-interested intrigues of these
vested officials. Moreover, special agreements with em-
ployees play a not inconsiderable part in the conscious
or unconscious policy of the employers, who connive at
the multiplication of unions on the principle of divide
and conquer. But the growing enlightenment amongst
the rank and file, coupled with an increasing apprecia-
tion of the united interests of the transport workers as a
whole, will undoubtedly produce consolidation in the
near future. This process, indeed, goes forward apace.
Since 1907 four transport unions have been amalgamated

146 NATIONAL GUILDS

with larger ones, whilst twelve unions have dissolved,
their members joining other unions. The recent railway
and dock strikes have taught the lesson of inter-union
solidarity.

Now let us attempt to visualise the whole transport
army enrolled in one organisation and controlling the
national " conveyance of men, goods and messages."
Here we have the Guild ready to start operations. What
will it do ?

It must do two things concurrently : (r) It must
undertake the transport duties demanded by the nation
(that is, by the other Guilds), and do the work at least as
efficiently and economically as it is done to-day ; (2) it
must maintain and protect every member it has en-
rolled.

It is the maintenance and protection of the Guild
members that really constitutes the social revolution
now rendered urgent by the failure of the present in-
dustrial system to maintain and protect its wage slaves.
Here then we reach the practical issue of the abolition
of the wage system. The fundamental distinction be-
tween Guild control and private capitalism is that,
whereas the latter merely buys labour power as a com-
modity, and at a price (known as wages) which will
yield the maximum rent and interest, the Guilds co-
operatively apply the human energy of their members,
render themselves and their members independent of
capitalist charges, and distribute the proceeds of their
members' labour amongst their members without re-
gard to rent or interest. Competitive wages, in fact,
are abolished and, in consequence, there is no surplus
value or fund available for the private capitalist. No
wages to yield surplus value, no rent ; no wages, no
interest ; no wages, no profits.

Once a member of his Guild, no man need again
fear the rigours of unemployment or the slow starva-

A WORKING MODEL 147

tion of a competitive wage. Thus every transport
worker, providing he honestly completes the task as-
signed him, will be entitled to maintenance — a mainten-
ance equal to his present wage, plus the amount now
lost by unemployment, plus a proportion of existing
surplus value — that is, plus his present individual con-
tribution to rent and interest ; and, finally, plus what-
ever savings are effected by more efficient organisation.
He will not, therefore, receive wages (as we now know
them), because he will receive something much greater
— possibly three times greater — than the existing wage
standard.

After all, maintenance is not the only consideration
in life. There is a protective influence emanating from
powerful organisations very precious to the individual
and to society. The Chinese Guilds understand this.
Some of them are so powerful that they will redress
their members' grievances even to the ends of the earth.
Nothing could be further from our thoughts than any
melodramatic interpretation of such a simple proposi-
tion, even though we can easily foresee a rich field for
future novelists in the application of this principle.
But in sickness and old age the transport worker must
be protected by his Guild ; in distress he will look to his
comrades for succour, probably to the Guild itself. In
short, the Guild must be a fellowship as well as an
economic organisation. Just as the German student
belongs to his corps, looking to it for social help and
companionship, so the transport worker will belong to
his Guild, drawing out of it not only maintenance, but
fellowship. This is what we meant in the last chapter
when we remarked that the guilds would make them-
selves responsible for old age pensions, insurance, and
sick benefit, and much else.

In its proper place, we shall discuss the actual econo-
mic working of the Guilds, how they will arrange their

148 NATIONAL GUILDS

work, and how distribute the wealth they have created.
It is reasonable and just, however, to assert that the
Guild members, in return for moral and material bene-
fits so infinitely in advance of existing conditions, must
put all their brain, muscle and heart into their work.
Work ! To-day the transport worker does not work,
he toils — and toil is the most wasteful process known
to modern civilisation.

We have, then, 1,500,000 workers engaged in the
transportation of men and merchandise, and banded
together to ensure a corporate return of their share of
the national wealth. Observe, please, that it is not
a question of making work ; it already exists, waiting
to be done. Assuming the entire willingness of the
members to undertake their several tasks, the most
important problem is efficiency. That means discipline,
and discipline involves a hierarchy. From this set of
conditions there can be no other conclusion. Democracy
is not anarchy ; and industrial democracy implies demo-
cratic control of industry. This means, therefore, the
democratic appointment of the hierarchy. The present
general managers of the railways are appointed by
shareholders in the interests of the shareholders ; the
future general managers must be appointed by the
Guild in the interests of the Guild. Inasmuch as the
Guilds are public institutions and not profiteering cor-
porations, it follows that these appointments are also in
the public interest. Nor need we shrink from the further
conclusion that the appointment of a hierarchy involves
a suitable form of graduated pay. As, ex hypothesi,
there is now unity of interest, the managers, sub-managers,
foremen, and whatever other grades there may be, have
no interest to serve save those of the members who have
appointed them. In this connection, we pin our faith
to the democratic idea without reserve. We believe the
workman is the shrewdest judge of good work and of the

A WORKING MODEL 149

competent manager. Undistracted by irrelevant politi-
cal notions, his mind centred upon the practical affairs
of his trade, the workman may be trusted to elect to
higher grades the best men available. In the appoint-
ment of their checkweighmen, for example, the miners
almost never make a mistake. Doubtless injustices
will from time to time be perpetrated ; but they will
be few compared with the million injustices done to-day
to capable men who are habitually ignored in the interests
of capitalist cadets. Our Transport Guild will probably,
in the first place, continue in office all those who are
there now, providing, of course, that they join the
Guild.

Next to be considered is the distribution of the work.
Experience and estimate will indicate that during the
next quarter so many million passengers and so many
million tons will have to be carried. To that end, there
are available so many ships, so many carts and lorries,
so many tramcars and 'buses, and so many railway cars
and trucks. At the outset there will be obvious econo-
mies. Competing ships, competing cars, competing
railways will all be regularised so that every available
pound of energy will be turned to the most fruitful
use.

The estimate as to the value of transport as an in-
tegral part of production will be then comparatively
simple. The Guilds will necessarily start on the assump-
tion that the standard of life of all the workers must be
practically the same, although, in the first instance, there
may be some graduation of standard as between Guild
and Guild. But assuming some approximation of life
standard, probably the easiest way of arriving at value
will be by estimating the number employed plus the cost
in human labour of the machinery utilised. When this
stage is reached, we shall learn the truth of a previous
remark of ours that there will be an extraordinary

150 NATIONAL GUILDS

transvaluation of the meaning both of labour and
wealth.

In our last chapter we differentiated ourselves from
the Syndicalists by admitting the right of the State to
co-management with the Guilds. In the most formal
manner, now, we assert that the material of all the
Guilds ought to be vested in the State ; the monopoly of
the Guilds is their organised labour power. Over their
labour power the Guilds must have complete control ;
but the State will be rightly and equitably entitled to a
substitute for economic rent. A substitute, we say ; not
economic rent itself ; for economic rent is a product of
competitive private ownership. Adam Smith was the
first to point out, and Thorold Rogers the first to prove,
that rent was originally what we conceive it will be
again under Guild Socialism, namely, a tax in return
for a charter or licence. It was only when capitalism
arose that the tax called rent was raised by successive
stages to the competitive rack-rent it is to-day. But
how will the tax payable by the Guilds to the State be
computed if not by competition ? By the needs of the
State and the proportionate means of the Guilds. Assume
that the estimated national Budget for any following
year is £250,000,000. This sum will require to be found
by the citizens in their individual or in their collective
capacity. But for those individuals who are organised
in Guilds, it will, we imagine, be most convenient to tax
them collectively, that is, through their Guilds. Thus
the Guild would, in each instance, be required to levy on
itself on behalf of the State an amount proportionate
to the numbers of its members.

Herein we have endeavoured to indicate the structure
of the Guild in its main outlines. We are not so foolish
as to fill in details, for, with the growth of trade union
organisation, practically every detail will change in
comparative value and significance. But we are con-

A WORKING MODEL 151

fident that we have stated the case for the Guild with
sufficient clearness to warrant our claim that we have
pointed the way to economic emancipation and squared
the conflicting interests of a State bureaucracy (very
rightly the bugbear of every serious democracy) with
industrial democracy.

INDUSTRIES SUSCEPTIBLE OF GUILD
ORGANISATION

It is an easy task to group the various trades into their
main industrial divisions ; but when we remember that
there are 1200 different trades, crafts, and occupations
in Great Britain, it is not so easy to apply the same
system of organisation to them all. At first sight it
would appear to be not merely difficult, but impossible.
Nevertheless, it is reasonable to argue that, inasmuch
as the wage system applies to all these trades, so also
may any new method of remuneration for labour ser-
vices. We do not propose, however, to argue this point
to its extreme limit, because in reality the wage system
itself operates arbitrarily. If this be so, it might fairly
be urged that the Guild system would also operate harshly
and arbitrarily. We shall not, therefore, commit our-
selves to any final generalisation until we have discussed
the various classes of trade seriatim. But we must be
guided in our inquiry by some general principle, knowing
full well that in the industrial complex there must neces-
sarily be many exceptions to the rule, or divergencies
that practically amount to exceptions.

What, then, is this general principle ? It is not
necessary to sketch here the development of the small
into the large industry. Our chapter on " The Great
Industry and the Wage System " must suffice. We

know that the wage system has crystallised in correlation

i5a

INDUSTRIES SUITABLE FOR GUILDS 153

with the growing dominance of the large industry.
Therefore, as Guild organisation is the inheritor of the
labour monopoly from the wage system, the Guild prin-
ciple must primarily apply to the large industry. Broadly
stated, therefore, our general principle is that all indus-
tries and trades that obey the law of the economy of
large production are, prima facie, susceptible of Guild
organisation. The Guilds themselves, it must be remem-
bered, are not to be organised on hard-and-fast lines,
but to be elastic in their constitution.

The critic may deny that the Guild is destined to
supplant the wage system. He may contend that State
Socialism is the way out. In our chapter on " State
Socialism and the Wage System " we have shown that
the continuance of the wage system is inevitable if the
State Socialist prevails, since he can only acquire
productive and distributive undertakings by payment of
a compensation that would bear as heavily upon labour
as the present burden of rent, interest, and profits. If,
therefore, State Socialism became an accomplished fact,
we should find the State bureaucracy spending its
greatest efforts in extracting surplus value from labour
to pay interest on the State loans. But surplus value
itself depends upon the wage system, which, if it be
abolished, leaves no ground available for the bureau-
crat's obligations to capitalism. It is, therefore, obvious
that the wage system is essential to State Socialism.
However much one may desire better organisation of
industry as a logical satisfaction, our prosaic purpose
is the emancipation of the wage slave from wagery.
We now know that State bureaucracy is only a higher,
or at least another form of capitalism, and cannot there-
fore set free the wage slave. The Guild, organised to
protect labour from both public and private capitalism,
is the true equipoise to the State — State and Guild re-
spectively supplying those anabolic and katabolic im-

154 NATIONAL GUILDS

pulses and tendencies that go to vitalise the national
organism. The economic functions of the Guild com-
plement the spiritual functions of the State. But there
is no blunder so profound or dangerous as the assump-
tion that the State is or ever can be an economic entity.

No ; State bureaucracy stated in wage terms is as
oppressive as private capitalism. It is true that it
may confer certain minor social reformative privileges,
but — such is the peculiar quality of wagery — the wage
slave pays for them.

If, then, State Socialism is no solution, what alter-
native is there save the Guild ? Therefore, the Guild
is in true economic succession to the wage system ; it
resolves wagery into its primitive elements ; it separates
the permanent factors of wealth production from the
transitory elements that inhere in the existing industrial
system, retaining the permanent and subjecting the im-
permanent to the fire of moral and economic criticism.
Thus we discover that it not only inherits the monopoly
of labour, but the monopoly of the products of labour,
rent, interest and profits being absorbed in the labour
monopoly. That being the case, it finally follows that
the Guild becomes the industrial arbiter of the pro-
duction and distribution of the national wealth.

Let us then take a bird's-eye view of those industries
that respond to the economy of large production. How
is the Guild to be organised in relation to the existing
forms of organisation ? Is there to be a Guild for every
separate trade and craft following the lines of the present
trade unions, or is it preferable to concentrate all the
cognate trades into one Guild, with the elasticity appro-
priate to the variety of the trades affected ?

The Census of Production divides industrial Britain
into seventeen different groups, including agriculture.
(We shall have to consider agriculture apart from the
others, partly for the sake of convenience, but mainly

INDUSTRIES SUITABLE FOR GUILDS 155

because it presents problems peculiar to itself.) The
groups are : Building, mining, iron and steel ship-
building, engineering, other metal trades, clothing,
textile, paper and printing, chemicals, brick, pottery,
and cement, food, drink and tobacco, woodworking
and furnishing, leather, public utilities, and miscellaneous.
But these main groups are sub-divided into 106 trades,
representing 6,936,000 employees with a labour output
of £712,000,000. Now (excluding agriculture) do we
want 16 or 106 Guilds ? That is to say, a small number
of strong Guilds or a large number of weak Guilds ?
Obviously, the stronger the Guild, the more complete
is the labour monopoly. Not only so, but the stronger
the Guild as a whole, the stronger is each of its component
parts. Further, the more self-contained is the Guild,
controlling every process from the raw material to the
finished product, the more efficient must the Guild be-
come. Take, for example, the engineering section.
We have seen in a previous chapter that there are
455,561 persons employed in engineering factories and
241,526 in railway construction — roughly 700,000. Here,
obviously, is a great reserve of labour strength. But
there are 14,144 employed in heating, ventilating and
sanitary engineering ; 23,455 working at tools and im-
plements ; 14,122 on scientific instruments ; 19,848 at
blacksmithing factories and workshops ; these are not
included in the 700,000 already referred to. Surely they
belong to the same industry ? They assuredly depend for
their labour upon the general engineering group ; and not
only for their labour, but largely, if not mainly, for their
material. The problem we have to solve is not one of
competition, but of combined economic strength — i.e.,
complete organisation — and convenience. The workers
engaged in these trades of comparatively weak numerical
strength, bearing in mind that the strong Guild must be
their rock and fortress, would naturally prefer affiliation

156 NATIONAL GUILDS

with the main body of their brethren. Not only so, but
men pass easily from one engineering trade to another,
without regard to the groupings. An engineering Guild,
covering the engineering trades, is undoubtedly the most
simple and safe form of organisation.

Take, as another example, the clothing trades.
We have in a previous chapter quoted the two main
divisions — clothing, and millinery in private employ-
ment, 440,664 ; boot and shoe factories, 126,564.
These represent roughly 570,000 employees, a large
proportion being women. But there are, in addition,
30,829 employed in making hats, bonnets and caps ;
4828 work at glove-making ; 5186 at fancy furs ; 2016
at hatters' fur ; 3593 at artificial flowers and ornaments.
Clearly these small trades are part and parcel of the
general clothing industry. What chance have they —
their personnel is mostly women — of levering up their
subsistence to the average level, unless protected and
backed by the main army of 570,000, who control the
main industry ?

So far, then, as these sub-divisions throw any light
upon the problem, it is clear to us that the large com-
prehensive Guild is best. Indeed, we would go further :
at least two of the main divisions quoted above should
be amalgamated — the building trade with the brick,
pottery and cement trades. It seems difficult, too,
finally to distinguish between the iron and steel trades,
the shipbuilding, the engineering and the " other metal
trades." These latter include locks and safes, 7418 ;
galvanised sheet, hardware, hollow-ware, tinned and
japanned goods, and bedsteads, 69,700 ; cutlery, 14,674 ;
needles, pins, fish-hooks and buttons, 13,252 ; copper
and brass factories (smelting, rolling and casting),
20,827 ; brass factories (finished good), 36,541 ; lead,
tin and zinc, 8194 ; and one or two others. There is,
in short, no valid reason why the metal workers of

INDUSTRIES SUITABLE FOR GUILDS 157

Birmingham and Sheffield should not be linked up
with the metal workers of Newcastle, Sunderland,
Glasgow and Belfast.

But if these numerically large industries easily lend
themselves to Guild organisation, and if, further, the
large Guild is the best protection for the worker, then
the problem of the small unrelated trades must become
puzzling and difficult. Let us look, however, at some
of them. Cattle, dog and poultry food, 1879. This
looks like an agricultural affiliation. Manufactured
fuel, 1537. This might go to the Mining Guild. Flock
and rag factories, 2375. The Textile Guild might con-
ceivably absorb these. Umbrella and walking-stick
factories, 7497. Why not the Clothing Guild ? Salt
mines and factories, 451 1, It is not easy at a first glance
to place this trade. Match and fire-lighter factories,
4229. This might go with fuel. Ink, gum and sealing-
wax, 1310. Obviously this is related to printing and
paper. Laundry, cleaning and dyeing, 130,653. This
is certainly a department of the clothing industry.
Musical instruments, 10,117. This is a conundrum.
Sports requisities, 6374. Toys and games, 2387. Ivory,
bone, horn, and fancy articles, 12,592. Perhaps these
last four trades might form a small Guild. They cater
mainly for amusement. Or, perhaps, these small mis-
cellaneous trades are not susceptible of Guild organisa-
tion. But they pay wages. If, however, the wage
system is destroyed, and if, further, the Guilds are re-
sponsible for sick and old-age maintenance, then the
miscellaneous workers would be at a grave disadvantage.
Perhaps a miscellaneous Guild might be formed, taking
in all those trades that cannot naturally be affiliated to
the large guilds. Gold-refining (2188), plate and jewellery
(37,997), watches and clocks (5279), although classed as
" other metals," are really special and peculiar crafts
not closely related, if at all, to the general metal industries.

158 NATIONAL GUILDS

But, again, it is necessary to remember that they exist
by means of wagery, and it is evident that, as the Guilds
supplant the wage system, so the wage slave must be
affiliated to some Guild — a Guild numerically and in-
dustrially strong enough to protect its members. Always
there must be the sanctuary of the Guild.

It is important to note that the trades and industries
referred to here are all productive. The distributive
trades present difficulties of a different character ; but,
on the whole, of a less complicated nature.

When we originally entered on our study we had no
expectation that Guild organisation would prove so
comprehensive and pervasive as we now perceive it to
be. We thought that possibly the productive and dis-
tributive trades that constitute the anatomy of the
industrial system would be susceptible of Guild organisa-
tion ; we thought that the smaller crafts might possibly
continue on lines somewhat similar to the present but
favourably reacted upon by the improved conditions
ensured by the Guild. But as we proceeded we found
ourselves compelled to throw upon the Guilds the onus
of providing for their members complete sustenance,
in good and bad health, in partial or complete disable-
ment, and in old age. It would be a mockery for the
Guilds to divide this responsibility with the State, not
only because it would establish two labour authorities,
which is contrary to the Guild principle, but because
we also discovered that the Guilds ought equitably to
bear the cost of government. That being so, it would
be foolish for the Guilds to hand over, say, £20,000,000
a year to the State for old age pensions and another
£30,000,000 for sick benefit, thereby erecting a super-
fluous machine to do work which the Guild machinery
would do much better itself. But if the Guilds assume
all economic responsibilities, it follows that they must
between them embrace every worker. Therefore, just

INDUSTRIES SUITABLE FOR GUILDS 159

as Lincoln foresaw that the United States could not
long continue " half -slave, half-free," so Great Britain
could not advantageously or morally continue half-guild
and half-wage slave. It is certain that the moment the
army of wage slaves determines to end wagery, there
will be an almost unanimous movement towards Guild
formation.

If, then, every occupied person must belong to his
Guild, let us see how the occupied population would
regiment itself. According to the 1901 census, the number
of occupied persons was 18, 261, 146 out of a total population
of 41,458,721. The 1911 returns show a general increase,
but the detailed figures are not yet available. These
figures, however, will give us a fairly clear conspectus
of the problem of organisation that the Guilds must solve.

Class.

Number
Occupied.

I.

Civil Service — general and municipal

253.86s

2.

Defence (excluding those abroad) .

203,993

3-

Professional and Subordinate Services

733.582

4.

Domestic Services ....

2,199,517

5-

Commercial occupations

712,465

6.

Transit ......

1,497,629

7-

Agriculture ......

2,262,454

8.

Fishing ......

61,925

9-

Mines and Quarries (in and about) .

943,880

10.

Metals, Machines, Implements, etc.

1,475,410

11.

Precious Metals, Jewels, Watches, Games .

168,344

12.

Building and Construction .

1,335,820

!3-

Wood, Furniture, Fittings and Decorations

307,632

14.

Brick, Cement, Pottery and Glass .

189,856

15-

Chemicals .....

149.675

16.

Leathers, Skins, Hair, Feathers

117,866

17-

Paper, Printing, Books, Stationery .

• 334,26i

18.

Textiles .....

. 1,462,001

19.

Clothing .....

• L395.795

20.

Food, Tobacco, Drink and Lodging

1,301,076

21.

Gas, Water and Sanitary

78,686

22.

General and Undefined

. 1,075,414

160 NATIONAL GUILDS

Out of these twenty-two groupings we may pro-
visionally adopt our Guild organisations. Classes 4 and 5
would doubtless, on examination, be subjected to con-
siderable revision, whilst Class 2 — defence — can hardly
be considered a Guild, its units being temporarily with-
drawn from the industrial Guilds. But we are not here
concerned with any cut-and-dried system, and the
outlines as presented suffice for our purpose.

The first conclusion from the foregoing argument is
that, whereas the Guild primarily applies to the large
industry, it is equally applicable to the small craft, and
in equity should include it.

Before we draw any other conclusions, there are certain
questions to be answered. These are :

1. Can individuals of unique character or occupation
remain outside their Guilds, and, if so, how can they
obtain a livelihood ?

2. Can special or nascent trades remain outside, and,
if so, how can they obtain labour from the Guilds and upon
what terms ?

3. Can the wage system persist in any form ?

4. How can the brain-worker, the publicist, the
journalist, the preacher, assert and maintain full spiritual
and intellectual liberty, either inside or outside the
Guilds ?

The answer to these questions will be found in the
next chapter.

VI

INDEPENDENT OCCUPATIONS

The four questions raised at the end of the last chapter
cut down to the roots of individual or group indepen-
dence. To many minds this preservation of individual
independence in industry is so supremely important that
they reject any kind of associated effort that seems,
however superficially, to restrict individual liberty.
They reject trade unionism on the one hand and the
trust on the other. Both forms of organisation, they
argue, are destructive of individuality. In like manner
the whole Socialist movement falls under their ban,
because it would seem that the State, operating in the
economic sphere, would be as tyrannical, if not more so,
than the individual employer. This vigilant concern for
individual liberty is the best guarantee of its unimpaired
perpetuity. We do not deny that in mass production or
distribution there is an ever-present danger that the in-
dividual may pass into the machine a unique individu-
ality and come out at the other end a mere type. But
that, after all, is not the least of the criticisms that
apply to the existing industrial system. There is prac-
tically no culture of industrial genius under private
capitalism — certainly there is no systematic culture.
Given ten distinctive individualities, without means or
influence, how many will live to enjoy the full fruition
of their faculties ? If only one of them " arrives **
it is remarkable ; yet the private capitalist is quick to

162 NATIONAL GUILDS

exploit him : " See," he says, " how, under our glorious
industrial system, real abiHty rises to the surface." But
meagre though the harvest of genius or special talent
undoubtedly is, there is this also to be remembered that
probably the nine men who never arrived were spirit-
ually and morally the superiors of the successful tenth.
How often, for example, do we hear it said of somebody :
" He's a remarkably able man, but much too modest —
no push, you know." By " push," in this instance, is
meant the capacity to exploit one's fellowmen. Or,
again, how often do we hear it said of the successful
man : " Yes, he's clever enough, but absolutely without
scruple." Or yet again : " He knows how to get the
most out of better men than himself." Or, " He was
'cute enough to surround himself with clever young
lieutenants." It is not necessary to labour the point,
which, briefly summarised, may thus be stated : Private
capitalism limits the individual interests and, therefore,
necessarily crushes all those faculties of mankind that do
not definitely minister to those limited interests. Here
we come upon one of the fundamental laws of democracy.
No system can be truly democratic unless it calls into
activity the full maximum number of faculties inherent
in the democracy.

If we examine closely the habits of many of the demo-
cratic leaders, we shall find that they utilise democratic
machinery to attain to a certain prominence, and then,
having secured their position, they consciously or un-
consciously imitate their capitalist masters, taking
on the colour of capitalist morality, their object appar-
ently being to democratise private capitalism rather
than to supplant it both in spirit and substance. Thus
the " career of a political democrat differs only in form
from the " career " of a Lloyd George or a Bonar Law.
It is not, therefore, surprising that hosts of thoughtful
men should watch zealously, if not jealously, lest the

INDEPENDENT OCCUPATIONS 163

new democrat should prove as great a menace to liberty
as the old capitalist. Although we do not share their
fears, yet it is essential that the Guilds should so organise
that industrial genius and individual capacities and
preferences shall be cultivated and not choked.

It is clear, then, that the Guild must be the instru-
ment of emancipation and continuing liberty, and not a
new tyranny supplanting the old. Before we can pro-
vide for those occupations not amenable to Guild routine
let us see what they are.

(i) The profession of ideas, as distinct from the actual
production and distribution of concrete wealth. Priests
and preachers, artists, craftsmen, journalists, authors
would come into this category.

(ii) Inventors.

(iii) Groups devoted to the initiation of new ideas
and inventions not yet accepted by their appropriate
Guilds.

(iv) Pure scientists and all those who are devoted to
original research.

(v) Remaining groups in which the wage system may
persist.

We deliberately omit from the foregoing the profes-
sions of law and medicine, because these occupations
are already Guilds in embryo if not in fact. At a recent
medical congress, Dr. R. Rentoul, of Manchester, actually
sketched out a Medical Guild on principles precisely
similar to those advocated by us, and his proposals
appeared to meet with the approval of his colleagues.

(i) Nothing could be more fatal to intellectual liberty
and progress than to subject intellectual life to the
routine of any human machine. The spirit, like the
wind, bloweth where it listeth ; to capture it and cage
it would be the maddest conceivable enterprise. But
we have already transferred from the State to the Guild
sick and unemployed benefits as well as old-age pensions.

164 NATIONAL GUILDS

It follows, therefore, that those standing out of Guild
organisation are barred from these and other benefits.
A man, therefore, who deliberately leaves his Guild to
become a priest, preacher, artist, craftsman, or journalist
must depend upon voluntary support of some sort for
his maintenance. But his appeal is obviously to a much
more opulent circle than is possible to-day, when the
vast mass of the population is living at the bare sub-
sistence standard. The increase in consumptive capacity
of the Guild workers means presumably that they may
purchase those things they need, amongst which, of course,
would be access to ideas, to literature, and to such
religious observances as they most desire. They can
have, in reason, what they want, because they can give
economic effect to their demands. Thus the continu-
ance of the religious congregation is rendered more
secure, provided the religious principles enunciated
appeal to sufficiently large numbers. The dominance
of the prosperous deacon or rich church subscriber
gives way to the dominance of an enriched congregation.
In like manner, there must certainly be an increased
demand for works of art, either the origidals or fine repro-
ductions, whilst craftsmanship will be at a premium
because improved good taste will call for good work,
either in architecture, furniture, fabrics, or what not.
It is true that, in this sense, the craftsman may find it
advantageous to remain inside his Guild because the
demand for his work will be greater inside than outside.
But being debarred from the economy of large produc-
tion, and having only one pair of hands, he may prefer
an independent life, relying upon his reputation and
skill to secure his financial requirements. Nor do we see
any reason why he should not combine independence
with affiliation to his Guild. Suppose a young carpenter
to develop into a carver of high ability. In his early
years he has carved for pleasure or experience, but earn-

INDEPENDENT OCCUPATIONS 165

ing his pay by obedience to the call of his Guild. Gradu-
ally his name and fame spread and men give him special
commissions — to carve a mantel-shelf, or a chair, or a
staircase. What is there to prevent him getting leave
of absence from his Guild for a year at a time, but main-
taining his membership by paying to the Guild whatever
dues may be required for sickness, unemployment, and
old age ? Such an amount is actuarially easily ascer-
tained. If he finally prefer to go back to the Guild, his
vogue having passed, he goes back a valuable man with
a valuable experience. In like manner, the preacher
may be temporarily released for mission work, in which
those interested in the mission maintain him, in due
course returning to his Guild and resuming his ordinary
occupation. This would probably apply to many Non-
conformist sects, but Roman and Anglican priests would
probably build up their own voluntary organisations for
their maintenance.

The journalist occupies a somewhat similar position.
To do good work he must be his own master. The
Quakers are probably right in their affirmation that all
spiritual ministry should be voluntary and unpaid. It
is certain that the spiritual mission of journalism has
declined in inverse ratio to the increasing organisation
of paid writers and their subjection to the commercial
necessities of Fleet Street. The prostitution of ideas —
always the greatest crime known to mankind — that
prevails in the world of journalism to-day has vitiated
our national life to a degree far greater than is ordinarily
realised.

Nevertheless, there is much work of a routine charac-
ter necessary to the proper presentation of news and
views. The sub-editor may honourably do his work
without regard to the particular policy of his publica-
tion ; but he may not honourably write a word incon-
sistent with his own convictions. We therefore find

166 NATIONAL GUILDS

that journalists may be divided into two kinds — (a)
those who write what they must, and {b) those who
write what the public wants. The first division are
primarily dependent upon their consciences and must
order their lives accordingly ; the second division depend
upon their skill. For such skill there will always be a
ready market ; but the man who writes in the forum
of his own conscience is better circumstanced if he de-
pends for his livelihood upon some other occupation, or
upon the patronage of the few.

The true function of journalism under the Guild
system, and when the element of profit has been elimin-
ated, is now becoming clear. There is the function
of supplying news. The supply of news is gradually
becoming the business of the cable and telegraphic
organisation. The newspaper — so far as it is a news-
paper— entirely depends upon live wires. The journalists,
therefore, who act in the capacity of news purveyors,
must ultimately find themselves linked up with the wires
or the wireless and their future is assured — probably as
civil servants.

Now suppose that a coterie of men desire to propa-
gate certain ideas and doctrines — political, social,
religious, or technical. They proceed amongst them-
selves to appoint an editor, to elaborate a policy, to sketch
a campaign. They then approach the Printing Guild,
give the necessary guarantee, and their " organ " is
duly launched. Whether they subsidise their editor
or whether he works voluntarily " for the good of the
cause," is entirely the affair of those concerned. The
point now to be emphasised is that under the Guild
system there is ample scope for individual action and
for the expression of ideas.

(ii) The question of inventions and inventors is so
important that we must devote a subsequent chapter to
the whole problem.

INDEPENDENT OCCUPATIONS 167

(iii) The initiation of new ideas and inventions not
immediately acceptable to the appropriate Guilds is
important because it is the natural counterpoise to
sluggish administration and conservative methods and
tendencies. Assume that any particular Guild is doing its
work smoothly and successfully. Its animate and in-
animate machinery is in good working order, and a sense
of contentment pervades the whole membership. But
human ingenuity knows no limits, and the inevitable
invention looms up threatening a mechanical and
economic revolution. Visions arise of practically new
machinery being scrapped, of existing practice giving
way to new, of a new school entering the sacred portals —
in short, a complete bouleversement. It is only human
that those who are wedded to the old ways should resist
— and resist strenuously. Those who are not acquainted
with technical discussion can barely realise how vigorously,
if not bitterly, a new principle in mechanics can be
criticised and opposed. Three recent instances will
suffice — the Knight Sleeve Valve in motor-cars, wireless
telegraphy, and heavier-than-air flying machines. Take
this last instance. For a century it was assumed that
man could only travel through the air by means of a gas
lighter than air. In due course the heavier-than-air
plane was evolved, despite the adverse criticisms of the
old school. The young aeronauts have won their victory
— such as it so far is. A play recently depicted the bitter
struggle of the supporters of iron ships against wooden
ships, and subsequently the equally bitter struggle of
steel against iron. Industrial history teems with such
stories, in their own way far more romantic and fascina-
ting than the stories associated with soldiers, lawyers, and
statesmen. The same struggle will be repeated with
each great invention ; and we must prepare for it.

The best guarantee we have for future scientific and
mechanical inventions and discoveries is that men will

168 NATIONAL GUILDS

more readily fight for them than for any mere political
notions. " Schools of thought " are indeed the sure sign
of abiding interest in the important concerns of life.
Thus, presuming that the conservative element in a Guild
contrive to exclude novel practice or new inventions, it is
certain that those who believe in them will not tamely
submit. They will instantly form societies to prove
their case and provide the means for further experiments.
For example, it is easily conceivable that had some Guild
been largely committed to " lighter-than-air " machines,
it might have rejected any proposal to adopt " heavier-
than-air " machines. The young school instantly
organises itself ; its technical leaders get leave of absence,
subscriptions are called up (possibly the Guild itself will
subscribe or grant other facilities ; it may be conservative,
but need not be mean) and practical pioneering has
begun in earnest.

It is convenient at this point briefly to indicate how
the private members of the Guild could subscribe, either
to their churches, their papers, their pictures, their
books, or their pet inventions ; for that matter, how
they are to pay for their groceries, their clothes, or any-
thing else. It is certain that every Guild will be its own
bank. Banks, as we understand them to-day, will have
become obsolete. Every member of the Guild will every
month or quarter be automatically credited with the
amount of his pay. He knows approximately what that
amount is. Suppose the present monetary system
to continue. From time to time he draws ready money
for his smaller requirements, leaving a substantial
balance standing to his credit. Against this he will draw
a Guild cheque, and by means of these cheques he will pay
his way.

(iv) The duty of providing for pure science must be
considered in a future chapter on Education. Suffice it
here to remark that scientific research does not have a

INDEPENDENT OCCUPATIONS 169

particularly happy time under the existing regime.
There is no reason to suppose that a highly-educated
proletariat, controlling rich Guilds, will be unmindful
of the duty of acquiring knowledge or will be niggardly
in providing the means. But the problem carries us
rather far afield, because it involves a careful delimita-
tion of the functions and relations of the State and the
Guild.

(v) It only remains to consider whether any occupa-
tions will remain in which the wage system will persist.
We do not know. Possibly certain women's occupations
may fall back upon wages. Perhaps domestic service.
Perhaps dress-making, which in its higher branches is
certainly a craft. We have already remarked that
women came into the wage system last, and that they
will be the last to leave it. It largely depends upon the
women themselves ; partly also upon such developments
of the marriage system as cannot now be foreseen. It
may be that certain miscellaneous industries may continue
indefinitely and remain for a generation or more un-
affected by the Guilds. It may be that the Guilds them-
selves, as they slowly grow into mature strength, may find
it convenient to maintain outside their membership certain
peculiar trades. This was true of the textile trades for
many years after the factory system had been established.
The home-worker only partially fitted in and was only
gradually absorbed. But the main lines of development
were pushed forward irrespective of the exceptional cases.

VII

THE TRUST OR THE GUILD

The protagonists of the coming industrial struggle
will be the Trust, the monopolist of capital ; and the
Guild, the monopolist of labour power. If the Trust
succeeds in the subjugation of labour, a servile state is
rendered inevitable. Therefore, either the Trust or the
Guild must conquer ; there is no room in industrial
society for both.

There are many misconceptions as to the meaning of
the Trusts, their objects and their methods. It is too
readily assumed that they exist to kill competition ; that
by economising the costs of production and distribution
they are in a position to undersell and finally ruin
any outside competitors. These results may, or may
not, accrue ; they are not the primary objects. They
are, in fact, subsidiary to the Trust's main purpose,
which is to regulate capital outlay and secure continuity
of dividends. That is to say, the. Trust is primarily a
financial organisation. This is proved by the fact that,
in the first instance, the term " trust " was applied to
exclusively financial undertakings. The directory or
the London telephone book will show at a glance that
even yet " trusts " are financial in their scope and pur-
pose. And we use the word also in the private and
personal sense, when we leave our property " in trust,"
when we execute " trust " deeds, and when we appoint

" trustees." A trustee, even if he have the final word

170

THE TRUST OR THE GUILD 171

in the policy and affairs of a business or an estate, almost
invariably acts purely from financial motives, the ad-
ministration of the business being left to a manager.
Further, trust funds are generally in the nature of de-
bentures, bonds, and other gilt-edged securities ; trustees,
when reinvesting moneys are restricted by Act of Parlia-
ment to certain specified forms of security. For the
payment of dividends, the trusts, whether private in-
dividuals or large corporations, depend absolutely
upon the labour value added to raw material over and
above the wages value — i.e., the surplus value, and
exacted out of labour paid for at a competitive price as a
commodity. In our second article we have set out the
net output per person employed and the average wage
paid. The difference between these two must, at all
costs, be maintained by the Trust ; it depends abso-
lutely upon the continuance of the wage system to achieve
that object. It will be the main business of the Guild to
defeat that object by absorbing surplus value and so
leaving no fund available for the exaction of usury of any
kind. This absorption of surplus value is the kernel of
the future economic revolution.

The invasion of industry by the organised Trust is
the result of the necessity of the informal Trust to for-
malise and secure its financial future. It is profoundly
conscious of the necessity of maintaining wagery, and,
in consequence, the struggle will mainly centre round this
problem : whether the Trust can, by adding to the material
comfort of the wage slave, outbid the Guild, which in its
incipient stages will be faced with practical difficulties of
a special character from which the Trust is exempt.

It is therefore of great importance that we should
clearly understand the exact working and organisation
of the Trust — particularly of the Trust which is in-
formally organised, which cannot be seen, and cannot,
therefore, be directly attacked.

172 NATIONAL GUILDS

The origin of Trust organisation is to be found in the
growth of joint -stock operations. In Great Britain, the
first purpose of the joint -stock company was to define
and limit the interests and responsibilities of partners.
As the younger generations knocked at the door of the
counting-house, as daughters married, their marriage
portions being immediate or contingent interests in
their father's businesses, it finally became imperative
to give relief to the pressure of ill-defined claims by
joint-stock distribution and limited liability. Thus, in
early days, the Companies Acts were really legislation
to enable partners to arrange their affairs. Even to-day
a shareholder sometimes whimsically regards himself as
in some sort a partner in the concern in which he has
invested. In reality, however, we have travelled a
long way from that conception. To the ordinary in-
vestor, a company is only a means of earning dividends.
How they are earned is no concern of his. He holds
his bonds or share certificates ; he cares nothing whether
they are brewery shares, laundry shares, land investment,
gold mines — what they yield as shares is his one and only
question. To him, partnership is only a joke.

In this wise there has grown up a vast army of in-
vestors who have regard only to the earning capacity
of businesses and the market value of their shares.
Years ago it was usual to appeal to these shareholders
directly for capital, but more recently they have been
regimented by the financial houses of London, Paris,
Berlin, New York, and elsewhere. So much is this the
case, in fact, that it is now practically impossible to
float a large amount, whether of debentures or shares,
without first greasing the wheels of the financial machinery .
This financial machinery is the Trust. Its purpose is
purely financial ; the labour that produces its dividends
is a commodity which it buys in the open market,
which it keeps in disciplined subjection by wheedling,

THE TRUST OR THE GUILD 173

by starvation, by the police, or, in the last resort, by the
army. The extent to which the investors have been
organised is scarcely realised by the outside world in
general and the Labour Party in particular. Thus, one
corporation in London controls over £30,000,000, and has
a mailing list of over 200,000 investors, large and small.
These investors are carefully classified — some prefer
one kind of investment, some another. Some prefer
five per cent, bonds ; some prefer industrials. One of
the largest firms of stockbrokers in London has three
lists : the first only buys gilt-edged securities ; the
second buys reasonably good ordinary and preference
shares ; the third is speculative — " is fond of a flutter."
Transversely, there are lists of investors who specialise
in gold mines, breweries, industrials, land development,
houses, and so on, down the whole gamut of industry.
The French banks have excelled in collecting the savings
of the French peasants, who like six per cent, bearer bonds.
A good harvest in France is invariably followed by a
large number of flotations, both in Paris and London.
Practically every London financial house has its branch or
agent in Paris. France to-day is even more distinctively
than England the money-lender of the world. America
and Germany are still borrowers. In this way, either
by lending or borrowing (both equally remunerative to
the financial houses), a great financial network covers
the world. Its organisation is largely informal ; it is
none the less effective on that account. In America
(where it is more highly centralised than elsewhere)
it is known as " the money power." To this power
principalities bow ; it rules the rulers of kingdoms.

The Trust is the operative principle of the money
power ; its attitude to industry is precisely that of the
private investor to the companies whose shares he holds.
Economised output and distribution, the elimination
of competition (except in wages), the control of sea and

174 NATIONAL GUILDS

land transit — all these doubtless result from the Trust
organisation, but they are one and all subsidiary to the
one great purpose of exacting usury and protecting
dividends by the enforcement of permanent wage condi-
tions.

In the development of finance, it was ultimately dis-
covered that certain large investors controlled certain
industries. Thus, Carnegie and his group controlled
American steel, Armour and his group the American
canned goods trade, Duke and his group held a big grip
on American tobacco. Gradually it became much
more convenient and remunerative to group these in-
dustries and to capitalise them. In this way were born
the Steel Trust, the Wheat Trust, the Tobacco Trust,
and half a dozen others. They were primarily banking
transactions, the industrial problems connected with
them being of secondary consideration. In Great
Britain, industrial development, being much older, is
in consequence much more complex. Accordingly the
Trust, in this country, is not quite so simple or obvious.
The Free Traders often contend that Free Trade kills
the Trust. As a matter of fact, practically every in-
dustry in Great Britain is informally trustified — iron
and steel, shipbuilding, textiles, railways, chemicals.
The Wall-paper Trust is formally organised, open and
unashamed. How, then, does the informal Trust do
its work ? In two ways : (a) by trade associations,
where prices or rates are fixed : and (b) by interchanging
shares and nominating directors. The names of British
Trust magnates instantly spring to mind — the late Lord
Furness, Lord St. Davids, Sir Charles Macara, Mr. Arthur
Keen, Mr. D. A. Thomas, and a score of others. These
gentlemen are the British prototypes of the Armours
and Carnegies, and, in practically every respect, are
far more able and statesmanlike — and therefore more
dangerous — than their American colleagues.

THE TRUST OR THE GUILD 175

The American and British Trust magnates whom we
have named have one characteristic in common : they
are each masters of their own particular trade. Does
not that fact destroy our contention that the purpose
of the Trust is primarily financial ? If they are men
who have mastered their own special industry, does it
not follow that they are primarily concerned with the
practical administration of their businesses, only calling
in finance as it is required ? Let us briefly trace the
career of one of them. He started by chartering a
boat. Next he procured a few shares in a boat. As
time went on, he controlled a number of tramp steamers.
Next he ordered new boats to be built. He speedily
discovered that it paid better to build them himself.
Next he found that steel and machinery had to be bought.
He saw no reason why he should not share in the profits
on the manufacture of steel plates and marine machinery.
In the fulness of time he was deeply committed to a dozen
different enterprises, all more or less directly connected
with ships. He had to buy large quantities of coal.
Why not link up with a suitable colliery ? So said, so
done. But this ceaseless activity called for colossal
and associated capital outlay. Therefore we find him
reorganising old companies and floating new ones.
Gradually he becomes immersed in finance — perhaps
even against his inclinations — so that to-day he spends
practically all his time in cajoling or conciliating or
bullying various groups of shareholders to whom he is
morally if not legally responsible. Probably he never
enters any of his numerous works ; finance claims all
his thoughts and energy. Nor is that the end of it.
He must go on building ships, for he cannot let his
capital lie idle. He cannot face his shareholders with
empty hands. Like the daughters of the horse-leech,
their cry is " Give, give, give." So when his own par-
ticular group wants no more ships, he goes farther afield.

176 NATIONAL GUILDS

Some Danish, German, Swedish, French, Austrian, or
South American company wants a ship, but cannot pay
for it in cash. A ship may cost anything from £50,000
to £250,000. " Very good," says he. " I will build
you a ship ; you may pay me in five per cent, bonds at
90." Next he goes to some financial house, and sells
these bonds at 91 or 92. They unload at 95 upon the
British or French public, and our magnate has another
ship upon his stocks. Finance is his master ; he is its
servant. It is only so far as the financial market is
favourable that he can continue. But he cannot obtain
a single farthing unless he can keep intact the wage
system, for only out of wages can he pay dividends.
So he is noticeably friendly to labour, inaugurates profit-
sharing (at no risk to himself), pays bonuses for speeded
up work, sits in Parliament as a sound Radical, and finally
goes to the Lords in the odour of sanctity and the stench
of an election petition. But the outstanding fact is that
he has graduated through industry into finance ; he is
what he is because of his aptitude for finance. He
employs hundreds of men who are technically his superior.

Thus we see what a driving, hungry and insatiable
master is this money monster. It is here that the
Guild must prove its superiority. Why should ship-
building, or engineering, or coal-mining, or any other
industry depend upon the caprice of finance for its
maintenance ? Mankind wants these things irrespective
of fashions in finance — and in no market do fashions
prevail to the same extent as in finance. To-day it
may be rubber ; yesterday it was nitrates or cycles ;
to-morrow it may be oil.

If, then, the Guilds can grasp the true meaning of
effective demand, disentangling it from finance, how
much more efficiently can they build ships, or make
boilers or steel plates, than by the round-about and often
underhand .methods inherent in the present financial

THE TRUST OR THE GUILD 177

system ? We see that the ways of finance are im-
practicable, clumsy, casual, and tyrannous ; industry,
organised into its appropriate Guilds, can be practical,
expert, orderly and, above all, considerate. Our Trust
magnate has to sell his very soul to Mammon to keep
going. What is the broad result ? On a given year
the net output of shipbuilding and marine engineering
is £17,678,000, the number of persons employed being
184,557. Is ^ not evident that the combined credit of
these employees, all of them productive units, would
suffice to produce £17,678,000 ? If the Guilds do not
realise this elementary fact, let them consult the Whole-
sale Co-operative Society. But it would not only be
the credit of the actual employees ; it would be the
associated credit of the membership of all the other
Guilds in addition.

In this way we come back to our starting-point.
Who is economically the stronger — the money mono-
polist or the labour monopolist ? The answer is too
simple to need elaboration. Therefore, provided there
is no taint of the servile in the mass of the workers,
provided their minds are not distracted by the alluring
futilities of politicians, provided their imaginations are
fired by the vision of economic emancipation, in the
great struggle victory will rest with the Guild. The
Trust, blown out to the dimensions of a monstrous
balloon, pricked by the abolition of the wage system,
will collapse, leaving behind the bare value of its frame-
work and its silk cover, now become its shroud.

12

VIII

THE FINANCE OF THE GUILD

In the preceding chapter we argued that the primary
object of the Trust was financial, and that it would be
the duty of the Guild to meet effective demand un-
hampered by the dominance of finance. Is this feasible ?
Unless the Guild can by its own resources create and
distribute its own products, it must necessarily fall back
upon the capitalist to help it out. But the capitalist
by this time will be exploiting regions beyond the con-
trol of Caesar, and, in any event, he will know that only
temporary accommodation will be required. We must,
therefore, rule out the private capitalist without more
ado. Guild administration associated with private
capitalism would be a contradiction in terms. But the
banks of to-day are purely capitalistic organisations,
buying and selling money for a profit. That being the
case, the whole banking system must be transformed.

Let us then inquire what are the financial problems
that confront the Guilds.

Firstly, payment must be made for raw material, and

particularly foreign raw material. Cotton must be

bought in America ; corn and wheat in America, India,

Russia and elsewhere. Indigo, rice, silk, coffee, tea

must be procured from their several countries of origin.

In short, the first problem the Guilds must face is our

commercial and financial relationship with other countries.

For the purpose of this argument we will assume that

178

THE FINANCE OF THE GUILD 179

Great Britain is the only country that has adopted the
Guild system. We have already shown, when discuss-
ing " International Relations and the Wage System,"
how other countries, particularly Germany, France
and America, would be compelled to follow our example,
because otherwise they would find themselves competing
with us handicapped by the excessive burden of rent,
interest and profits — a burden that would be felt more
in regard to increased productivity, with its consequent
greater exchange value, than in regard to existing prices ;
for, ex hypothesi, rent, interest and profits are absorbed in
labour, the exchange value of the existing unit not being
disturbed. But if, as we suggested in our chapter, "A
Survey of the Material Factors," we economise on existing
transit and put 2,000,000 more workers to actual pro-
duction, it would follow that we should have a vastly
greater quantity of merchandise to barter with foreign
countries, and, in consequence, our exchange value in the
world's market would be incalculably appreciated. We
have met many serious and well-intentioned men who
could not accept Socialism as an operative principle
because they could not see how, under Socialism, we could
maintain our position in the world's market. So far as
State Socialism is concerned, we believe this objection
to be fatal. State Socialism predicates the continuance of
rent, interest and profits, the compensation (paid in
State bonds bearing interest) being equal to the capital
value of the expropriated industries, plus increased
wages — the bribe to labour, and would accordingly be
compelled to add to existing costs the amount of the
increased wage plus the less economical administration
of the bureaucrat. The equation, therefore, works out
as follows : —

Cost of Production under State Socialism = Raw
Material + Standing Charges + Rent + Interest + Profits +
Increased Wages.

180 NATIONAL GUILDS

Cost of Production under Guild Socialism = Raw
Material + Standing Charges + Pay.

The increased wages postulated under State Socialism
would amount to at least £10 per worker per annum ;
the pay postulated under Guild Socialism need not
equal the sum of the existing wage plus the charge exacted
by rent, interest and profits.

Therefore, as State Socialism would enter the world's
market handicapped by increased cost, our national
exchange capacity would be depreciated ; but as Guild
Socialism would enter the world's market with a decreased
cost and an increased output, our national exchange
value would be materially appreciated.

Assuming that State Socialism pays an increased
wage of £10 a year, and that there are 5,000,000 workers
occupied on products for foreign exchange, it would have
to procure raw or semi-finished products from abroad
with an increased handicap of £50,000,000 per annum —
an average increase in cost of 10 per cent. But the Guilds,
apart from the decrease in cost induced by greatly
accelerated production, could easily reduce cost by 10
per cent. — saved out of rent, interest and profits — and
accordingly enter the world's market with £50,000,000
decreased cost of products, plus the increased output.

Bearing these facts in mind, we may now consider
how the Guilds will finance the purchase of their foreign
materials.

Whatever changes in our monetary system the
Guilds may inaugurate at home, it is certain that so
long as private capitalism persists abroad our goods
sold abroad must be valued at the gold standard. This
would, of course, mean only a simple actuarial calcula-
tion. Jf under the Guilds a labour unit produced in
one day a quantity equal to x ; if under foreign capitalism
a labour unit, paid in gold, also produces x, and if the
cost of x, calculated in gold were y ; then we can immedi-

THE FINANCE OF THE GUILD 181

ately discover the gold value attached to the British labour
unit. The Guilds have only to sell x at the price of y or
of y+a or y — a, as the case may be. If, then, the Guilds
buy annually, say, £750,000,000, and sell annually, say,
£500,000,000 (the difference being found in cost of transit
plus tribute on foreign investments) the whole business is
resolved into a simple banking transaction. But the
Guilds have already killed the British banking system.
How then ?

The answer is simple ; the Guilds must be their own
bankers. And the associated Guilds must have their
own National Bank and Clearing-House.

Thus, where foreign transactions are concerned, the
National Guild Bank will operate on a gold basis and
settle all debts with foreign creditors, debiting and
crediting the special Guild Banks as occasion requires.
At the present time the flow of gold is in Great Britain's
favour, so that there will be an ample supply of gold for
the purpose. So far, then, as our foreign indebtedness
is concerned, the Guilds will be in a strong economic
position to meet every demand, and, in consequence, our
supply of raw materials and of foodstuffs will be absol-
utely secured.

When we approach the business of the internal
finance of the Guilds, both in their relation one to the
other and each to its own members, we are instantly
compelled to consider whether the gold standard and
the existing monetary system must not be displaced by
some more appropriate unit of value. Having abolished
wages, and in consequence knocked the bottom out of
the fund from which rent, interest and profits are drawn,
it becomes evident that labour value has ipso facto
supplanted gold value. It would therefore be a work of
supererogation to persist with a monetary system that
has lost all vital relationship to reality. A Guild member
obviously does not each week earn £2, 15s. 7£d. ; such a

182 NATIONAL GUILDS

token or set of tokens would be meaningless. He has,
in fact, earned the average equivalent of 24, 36, or 48
hours' work, payable by his own and other Guilds and
necessarily valued in time or in labour units based upon
time. Beyond all doubt, his work has ceased to be
measured by the Old Lady of Threadneedle Street.
She, God be thanked, is dead. The object of measuring
the wage slave's labour by gold is that the dividends
paid out of labour shall be paid in gold. The valuation
of labour and the products of labour by a gold standard
are obviously the perquisites of the present banking
system, and are a fruitful cause of tyranny. The system
puts a heavy premium upon gold and a tyrannous dis-
count upon labour. But the peculiar quality of gold is
that it is artificially valuable so long as it is a monopoly
which the worker is compelled to buy. If it cease to be a
monopoly, or if the worker be no longer compelled to
use it, its artificial value has disappeared. If, however,
the Guilds have a monopoly of labour, they are no longer
compelled to accept gold as the measure of labour's
value. The banks, representing private capitalism, say :
" We will buy your labour and pay you for it in gold."
" No," reply the Guilds, " we are not selling labour for
wages, paid in gold ; we do not want your gold ; we
propose to apply our labour to raw material ; and our-
selves or our fellow Guilds will consume the products."
After that the price of a gold albert watch-chain would be
about tenpence and gold signet rings about three a penny.
Nevertheless, in the early days of Guild Socialism,
some unit of value, not strictly a time unit, would have
to be reached. For this reason : The different Guilds
would probably appraise their labour at differing values.
The engineers might still aim at remaining the aristocrats
of labour ; the scavengers might not be able at once to
exact a similar value. Before we reached a democratic
equality in the matter of pay (not wages, please note),

THE FINANCE OF THE GUILD 183

there would doubtless be variations in the valuation of
the respective trades, an engineer receiving perhaps
100 units per week and a scavenger 60. Suppose, then,
that we give a name to our labour unit — let us call it a
" guilder " — we reach at once a working basis. The
scavenger each week earns 60 guilders, the engineer 100,
the cotton operative 75, the miner 90, and so on. Now,
whether these guilders are expressed on bits of cheap
metal or on bits of parchment is practically immaterial.
It is our labour unit and exchangeable through all the
Guilds. What, then, would be the modus operandi ?
We have postulated that each Guild is its own banker.
But just as our present banks have their several branches,
so also would the Guilds have theirs. These branches
would doubtless be the counting-houses of the particular
works where the Guild members are employed. Now
let us follow the fortunes of John Smith, member of the
engineering section of his Guild. After a week's work
he is credited with 100 guilders. As he is going to a foot-
ball match, he probably puts five guilders in his pocket.
He pays half a guilder for a seat, having purchased an
ounce of tobacco, also half a guilder, and possibly had
a mid-day meal, say one guilder. He rides home on a
free tramcar, and buys his weekly papers at some con-
venient depot of the distributive Guild. He enters his
house, which is either his own, built for him by the
Building Guild, or is rented from the Guild. Meanwhile
Mrs. Smith has been making sundry purchases. In
due course he receives the bills, and in payment he gives
cheques payable at his own branch. Let us suppose that
these bills amount to 35 guilders. This leaves 60 to his
credit. He does not draw against these 60 guilders
because he will want some for his holidays (even though
he receives full pay), and he also has his eye upon an
exceptionally good piano. Thus week by week he
accumulates guilders, and they lie to his credit at his

184 NATIONAL GUILDS

Guild bank. In this way we perceive that the Guilds
will be constantly holding large accumulations of their
members' savings. They, of course, pay no interest,
because the system of interest has gone with the wage
system. But just as the banks lend their customers'
deposits to their borrowers, so, in like manner, the Guild
banks have always a ready supply of guilders to apply
to their improvements and the other transactions of their
business.

In some such way as this will the Guilds make their
financial arrangements. They will bank the savings of
their members, and, through the Guild Clearing-House,
they will pay whatever is due to the other Guilds for
commodities bought, or receive whatever is due for their
own products sold.

The main concern of the Guild will be to ensure real
value passing from the labour of the members into the
Guild products. But that raises the problem of motive,
about which we shall have something to say in a subse-
quent chapter.

IX

THE INVENTOR AND THE GUILD

Those who advocate an economic revolution are often
challenged to explain how they would provide for the
adequate protection, encouragement and development
of inventive genius. This question, coming as it usually
does from supporters of the existing order of economic
society, implies that the inventor to-day receives adequate
reward and appreciation. Nothing could be further from
the reality of the inventor's life. The piety of Mr.
Samuel Smiles lends some colour to the belief that
capitalism treats its inventors generously, whilst the
occasional prominence of some inventor whose financial
capacity is at least equal to his inventive genius —
Marconi or another — also affords opportunity to the
capitalist apologist to proclaim the El Dorado that awaits
the sane inventor. Nevertheless, it may be confidently
affirmed that there is no body of men who are more
consistently robbed under modern capitalism than the
inventors. For every prominent inventor's name there
are thousands of men who have added enormously to the
efficient production of wealth, but have been cheated out
of the commercial results of their invention, sometimes
by downright roguery (for the inventor is peculiarly
easy prey), but generally by the working of the financial
system which now dominates industry.

But first let us impersonally examine the function of

the inventor and the scope of his work.

185

186 NATIONAL GUILDS

Occasionally an absolutely novel invention crosses
the industrial horizon. It is a sport, the emanation of
some unique experience or may be a happy inspiration.
In the main, however, inventions are the natural offspring
of the inventive and constructive work that has gone
before ; they are only partially novel — the novel feature
is only a detail of the completed invention. Indeed, as
often as not, an invention is a combination of well-known
factors or a new application of them. New conditions
call out new applications of existing practice, and the new
invention, therefore, is a social product, subject to suit-
able reward for the ingenuity exercised. This is recog-
nised by the doctors, who explicitly forbid their order
either to patent a new medicinal process, or to keep
private its chemical formulae. Now a doctor who dis-
covers a new cure or devises a new treatment is just as
much an inventor as a Marconi or an Edison. Yet he
must disclose all the essential features of his discovery,
whilst Marconi is permitted to create a new vested
interest. The reasons for the medical attitude are
significant. In the first place, a doctor belongs to a
liberal profession ; he is a gentleman by Act of Parlia-
ment. He must therefore serve truth first, his own
personal interest being subsidiary. He obeys the rule
laid down a generation ago by Ruskin : he must at his
peril cure his patient first, his fee being relatively of no
importance. (Ruskin tried to shame the merchant
into acceptance of the same principle, but Manchesterism
was too strong for him.) Secondly, it is only by a frank
exchange of experience that medicine can fulfil its mission.
Thus the individual interests are merged in the larger
interests of the Medical Guild. So strongly is this point
emphasised by the governing body of the doctors, that
advertising is condemned and punished as " infamous."
The doctor has learned what he knows from organised
medicine ; he must give back to the same organisation

THE INVENTOR AND THE GUILD 187

any special knowledge which he may acquire. There
is yet another reason. Experience is gained at the
expense of the public, which not only subscribes to the
upkeep of the hospitals where medical students acquire
their experience, but submits its flesh and bones to the
tender mercies of the medical stripling. In this way
has grown up the tradition that the doctor has no right
to a monopoly of his acquired knowledge or discovery.
His only monopoly is his skill, just as the monopoly of the
Guild is its exclusive control of labour power. The
medical profession, as a whole, has enormously gained,
and not lost, by the denial to its individual members of
any legal rights in their inventions and discoveries.

The reasons that govern medical practice in this
respect ought to be equally applicable to the engineer,
the chemist, or the manufacturer. But their legal status
is not that of gentlemen ; they belong to the army of
profiteers, and are accordingly exempt from the obliga-
tions imposed upon the liberal professions. In this subtle
way does modern capitalism write itself down as self-
seeking and ungentlemanly. But when it turns upon
the revolutionist and demands fair play for the inventor,
then the retort is obvious and fatal.

It is a commonplace that to-day every inventor is
indebted to the labours, researches and inventions of
the thousands of his predecessors. Fair play he must,
of course, receive ; but he is entitled to no monopoly.
Even if he devises an absolutely unique invention, novel
in every particular, unanticipated in even its minutest
part, he has not, even then, any valid claim to a mono-
poly, for the community has nurtured and educated
him, and without the community there would be no
effective demand for his product.

It is necessary thus to reduce the claims of the in-
ventor to their true proportion and social worth, because
the commercial notion prevails of inflated rewards for

188 NATIONAL GUILDS

an invention, even if these rewards go to the capitalist
who exploits the invention and robs the inventor. In
practice, however, the inventor's position tends to be
regularised. Thus, the railway companies and large
shipyards generally formally retain the right to acquire
the improvements of their engineers, in many cases
without compensation. In most of the large manufac-
turing businesses, provision is made for the encourage-
ment and payment of inventive employees. In a large
agricultural machinery works in, Canada this practice has
reached a higher development, an inventing department
having been in existence for many years. In this depart-
ment are gathered together all the inventive and fertile
brains of the establishment, their function being to
improve existing types of agricultural machinery, or
substitute something better. The workshop resembles a
chemical laboratory in its arrangement, and particularly
in the type of man occupied there. It is the aim of
the cleverish young men engaged by the firm to get
into this department. The result is that an inventive
spirit pervades the whole establishment, and, in conse-
quence, the products of this firm are famous throughout the
world. Now in this interesting work a man may experi-
ment for years before producing any satisfactory com-
mercial result, but he is maintained throughout his
working years in comfort. The result may be either a
greatly improved machine, or a new one. If the inventor
employed by this firm received only his regular pay
(he shares in fact in his invention) he would have no
cause to complain. His time is paid for ; he experiments
with materials paid for by the establishment ; he has the
use of very expensive and highly complicated machinery
which would be denied to any private inventor ; he
has the willing co-operation of twenty other men equally
inventive and equally concerned for the credit and
maintenance of the inventions department. But, how-

THE INVENTOR AND THE GUILD 189

ever ingenious may be the results, it is evident that the
inventors engaged in this department derive their in-
spiration from the work and practice of those who have
gone before — inspiration it may be from some elderly
but inarticulate engineer, or from an observed trick of
cleverness or clumsiness of some farm labourer. Inven-
tions are not born out of man's inner consciousness ; they
are social products.

In the case cited, the inventor receives consideration
and encouragement ; he is probably reasonably happy in
his work. But it is unusual treatment for the inventor
and by no means indicates the treatment he receives from
the community. The inventive gift is almost universal ;
men and women in every walk of life are perpetually
devising new things. The majority of these inventions
are commercially worthless, but often they can be turned
to great commercial value. What happens to the
inventor if he be in no way connected with a reputable
manufacturing concern ? He almost invariably falls
into the toils of financial sharks whose only purpose is
to extract out of the invention every penny possible,
without the slightest regard to the inventor's interests,
or the efficient exploitation of the invention. Let us
trace the invention from its conception and birth onwards.
A. B. conceives it, dreams of it, works at it, and finally
completes it. He has spent his resources on working
models, on experiments, possibly also on publicity
in the appropriate (as often as not the inappropriate)
technical journal. The next step is to market it. We
have postulated that he has no business connection with
a suitable manufacturing house. He accordingly goes
to a patent agent, who advises him to protect himself by
taking out a patent. To do this he will need a sum of
money which may reach as much as £400. A. B. is in
despair. " I haven't got it," he tells the agent. " I have
spent all my resources on the inventive processes."

igo NATIONAL GUILDS

The patent agent replies that by the terms of the charter
of his society he must not take any financial interest
in any inventions for which he acts as agent. " What
am I to do ? " asks A. B. " You had better see C. D.,"
answers the agent. A. B. accordingly visits C. D. C. D.
examines the patent, remarks that it seems " a good
thing," but regrets that he cannot personally finance it.
But if A. B. will give him a commission note, he knows of
a financier to whom he will give an introduction. They
proceed to discuss the terms of the commission note.
C. D. says that inventions are a drug upon the market,
and, therefore, if business results, he accordingly wants
a good share of the plunder. They finally agree upon
10 per cent. A. B. and C. D. accordingly step round to
the office of E. F., the financier. E. F. is sympathetic ;
but he regrets that he cannot undertake to finance any
invention unless it is fully protected. If, therefore,
A. B. will protect his invention, then they can get to
business. Again A. B. is in despair. C. D. comes to the
rescue. He thinks that, now that E. F. has consented
to take an interest in the invention, his friend G. H. would
advance the fees for the patent rights. G. H. is accord-
ingly approached. He, too, is sympathetic. Yes ; if
E. F. means business, he will be glad to find, say, £500,
to pay the fees. But it must be clear to A. B. that he is
doing him a most important service, and, as he is not
in business for his health, he expects A. B. to give him
a half interest in the invention. A. B. is now impotent to
refuse, so he assigns one-half of his interest to G. H.
The patents are accordingly, after much delay, finally
secured. A. B., C. D., and G. H. next go back to E. F.,
the financier. " Certainly," he says, " it is a good thing ;
therefore we will form a company of £30,000 capital —
£10,000 for you (A. B.) and your group, £10,000 for me
for my services in floating the company, and £10,000
for working capital." Thus A. B. receives £10,000, but

THE INVENTOR AND THE GUILD 191

he must pay G. H. £5000 of it and C. D. £500. He there-
fore, by his agreements, is entitled to £4500 out of £30,000.
But in a week or two E. F. tells A. B. that he can only
find £15,000, and proposes that A. B. shall take shares
instead of cash. A. B., being proud of his invention and
believing in it, readily agrees.

The company is formed in due course. But E. F. is
a smart city man and knows the value of the patent.
He nominates his own directors and runs the company.
The working capital is speedily exhausted, the company
goes into liquidation, E. F. buys the assets (the patent
rights mainly) for a song, and A. B. is swindled out of the
fruits of his labour.

This process of marketing patents goes on every day
of the week in London, Glasgow, Manchester, and else-
where. Yet the belief is widely prevalent that the in-
ventor is adequately rewarded under the existing indus-
trial system. The history of inventions and patents in
Great Britain is a history of derelict inventions and
broken hearts.

Now let us visualise the process under the Guild
system. Having abolished wages, the motive to extract
rent, interest, and profits out of an invention completely
disappears and the army of vultures and harpies who
live by swindling or squeezing inventors is dispersed.
But the economy of labour is the life blood of the Guilds,
and they will, in consequence, be compelled to encourage
inventors and develop inventions to their utmost limits.

At this point we touch closely upon the psychology
of the inventor. To him, the product of his genius (not
forgetting that au fond it is a social product) is as a
newly-born child to its mother. He wants time to
nurse it, to perfect it, to work out the developments
that inevitably flow from it. If such opportunity be
afforded him, he is probably perfectly happy. He is,
in reality, a creative artist. The instinct to create is

IQ2 NATIONAL GUILDS

in him quite as much, as it is in the painter (who is also
an inventor), or the writer (who is also an inventor),
or the musician (who is also an inventor). In their own
interests, therefore, the Guilds must make attractive
conditions and a happy atmosphere in which the in-
ventor can work. Having proved his mettle, the inventor
can look to the Guilds for support, for protection, and for
material aid. He will be released from the routine of
the Guild work ; he will work in a laboratory where there
is no stint ; he will, on good cause shown, travel to
perfect his knowledge and experience of his particular
work, and his position will be one of amenity and dis-
tinction.

It would be difficult to under-estimate the inventive
resources of the British nation. Its people have been
for generations trained to practical mechanics. British
workshops are crowded with men who will invent and
construct practically anything that is required of them.
To - day their inventive genius is choked under the
incubus of a system that robs them. Not the least
happy consummation of the Guild system will be the
triumph of the inventor and the conquest of degrading
labour by the machine that displaces it — displaces it
to its spiritual and material advantage, and not, as
to-day, to its further degradation and reduction to the
ranks of the unemployed or unemployables.

X

BRAINS AND THE GUILD

When on the verge of any great social or economic
change men inquire anxiously how the more precious
elements of society will persist or even exist, the doubts
and questions thus raised are half instinctive. The
problem of the inventor, dealt with in our last chapter,
is instinctively felt to be vital, because we all consciously
or sub-consciously know that our civilisation largely
depends upon the conquest of nature by science and its
hand-maiden mechanics. Machinery has already sup-
planted slave labour in the Occident ; and, just as ma-
chinery has destroyed slavery, so more perfect machinery
is destined to destroy wagery. It is, therefore, natural
that men should wish to be assured that a re-formation
of society will tend to develop and not to retard pro-
duction of wealth. So far as the inventor is concerned,
we have shown (a) that almost universally the products of
his labour are social products, the inevitable develop-
ments of discoveries and inventions that have gone
before ; (6) that under the existing system the inventor
is as a general rule harshly treated and too often deliber-
ately robbed of his commercial rewards ; (c) that the
social consciousness and instinctive sense of safety will,
through the Guild organisation of society, be more
strongly motived and better equipped to develop the
inventive genius of the nation.

Remains then a cognate question : How will brains

J3

194 NATIONAL GUILDS

thrive and be rewarded under Guild control of
industry ?

In this chapter we explicitly confine ourselves to that
particular form of brains generally credited to the prac-
tical or successful man. In our chapter on Education
we shall touch the deeper problems of cultural develop-
ment— the creation of that atmosphere that breeds
spiritual and intellectual perception. Education under
private capitalism, as we have seen, is a caricature, a
mere grotesque through which no soul can shine. When,
however, the average man asks how brains will be treated
by the Guilds, he does not mean (and probably does not
care) how will culture fare, but rather how will the prac-
tical " brainy " man have full scope for his particular
faculties.

It is relevant first to inquire how this " brainy " man
is treated to-day. Just as it is too readily assumed that
the inventor thrives under private capitalism, so, also,
it is superficially held that to-day " brains " are bound
to succeed. But is it so in fact ? In a previous chapter
we commented upon the will of the late Sir Edward
Sassoon, who handed over to his stripling son the complete
management of the family business, thereby irrevocably
shutting out those faithful servants who had intelli-
gently administered the affairs of this old-established
firm. This exclusion from the final reward of faithful
and intelligent service is such a commonplace under
private capitalism that, save our own, there was prob-
ably no comment made upon this will, the terms of
which were regarded as usual and proper. It is when a
successful man wills a share in his business to his em-
ployees that public note is taken of so unusual an event,
and the comment generally made is that the deceased
was a man of unusual generosity. It occurs to nobody
that such a course is essentially just. Public opinion,
therefore, would seem to hold that " brains " are heredi-

BRAINS AND THE GUILD 195

tary ; that the inexperienced youth inherits not only
his father's wealth, but his business aptitudes. Those
who are familiar with the inner workings of our industrial
and commercial machinery laugh at such a preposterous
notion. Rugby, Oxford, golf and the racecourse do not
constitute an adequate or efficient business training.
But the building up of a large estate is only the pre-
liminary step to the founding of a family. In this
regard the Christian and Jewish ethic is ranged with
capitalist ambition. "The family is the unit of the
State," cry preachers and profiteers in harmony, " there-
fore it is right that the accumulations of the father and
the means whereby those accumulations were secured
should be vested in the children." It was, mutatis
mutandis, this consideration that led to the law and
practice of primogeniture. And since it jumps with the
fancy of the British middle-classes, the system obtains.
But it is useless to claim at the same time that it gives to
" brains " their adequate reward. A few months ago a
man died leaving several millions sterling. He was
indebted for a large part of this fortune to his private
secretary, an extremely able and faithful man. His
salary was £1000 a year. On the death of his em-
ployer this man was thrown out of work, and is still
seeking employment. It would be easy to trace the
origin of large fortunes to men of brains and character
who benefited little or nothing. The present Steel Trust
of America owes more than can be easily estimated to
an unknown man, Captain Jones, of Pittsburg, who
improved blast furnace practice out of all knowledge.
He was killed by an explosion, and Mr. Carnegie reaped
the benefits. The truth is that " brains " require the
support of capital far more than does labour.

To argue in the face of facts like these — there are
thousands of similar significant instances — that brains
are adequately or suitably rewarded/ according to exist-

196 NATIONAL GUILDS

ing canons, is to flog a perfectly dead horse. It may
be asserted with complete confidence that profiteering,
dominated as it is by social projects and family ambi-
tions, effectually precludes and designedly proscribes
the " brainy " man from a fair participation in the wealth
he has helped to create. His heritage goes to " the
family " of the profiteer. Private capitalism pays
individual brains at a higher rate than manual labour ;
but beyond ensuring the supply of the brand of brains
suited to his requirements, the private capitalist pursues
his predatory path indifferent to the equities of the case.

We have guarded ourselves by remarking that the
reward of brains is inadequate, " according to existing
canons." But how if the canons be changed ? " You
cannot carry on modern industry without business
brains," says the average man, who really believes it.
Is there any outstanding precedent to prove the con-
trary ? We propose to cite such a case and to state it
with some detail. And we shall prove beyond all cavil
that by changing the canons both in tone and substance
to something more in accordance with the Guild concep-
tion, a finer type of executive brains can be secured and
infinitely better work done, even to-day, and in the
midst of the competitive system.

For two generations it has been the ambition of civil
engineers to join the Atlantic and Pacific Oceans by
cutting through the Central American isthmus, either
from Colon to Panama or farther north from Greytown
in Costa Rica up through Nicaragua Lake, and so through
to the Pacific. In 1881 a French company was formed
to cut a canal, 50 miles long, from Colon to Panama.
This company was to be under the command of the
veteran De Lesseps, the engineer who had cut the Suez
Canal. It therefore started under the happiest auspices.
Nor was adequate financial support wanting. France
and the French investor considered their honour at stake,

BRAINS AND THE GUILD 197

and poured out money lavishly. From 1881 to 1889
more than £50,000,000 was spent on this enterprise.
Here was a case for " brains," if ever there was one.
Starting inland from Colon, the army of workers found
themselves struggling through swampy, tropical country,
infested with mosquitos, some of which bred yellow fever
and others malaria. They had to locate the true bed of
the river Chagres and the indeterminate boundaries of
Lake Gatun. Moving towards Panama, they came to a
group of mountains, the beginning of that marvellous
Andean range. They were to cut a deep canal through
the Culebra valley — nine miles of infinite spade and
shovel work, including three huge locks — before reaching
Panama and the Pacific.

The tragic ending of that company, submerging as
it did one French Ministry after another (indeed, the
Republic itself reeled under the blow) is now a matter of
historjr. The basic fact is that the undertaking was
too great for the " business " brain. Questions arose
every day with which the business brain could not cope
— questions of public policy, for it suddenly called into
existence a new population with the thousand and one
problems that grow out of it, public health, sanitation,
police, housing, water, light, food, transport ; problems of
government and of relations with the Government of
the Colombian Republic ; international difficulties, some-
times of finance, sometimes of national interests affected.
In short, the task was too heavy, even for De Lesseps or
fifty other men his equal. Scandals and maladministra-
tion there may have been, but there is no one who has
passed over the ground and realised the weight of the
burden borne by De Lesseps who will not think kindly
of this old man.

But it was a failure — the failure of the business man
who proudly vaunts himself that society cannot manage
its material affairs without the magic of his touch.

198 NATIONAL GUILDS

After spending £50,000,000, what had De Lesseps to
show for his work ? He had excavated 80,000,000 cubic
yards at a cost of £24,000,000 ; he had purchased the
Panama Railway at a cost of £3,600,000 — about twice
its value — and the rest was spent on machinery, such as
locomotives, dredges, and similar gear. But he had
utterly failed. Literally, he had not accomplished a
quarter of his task. The failure of business brains !

Now let us tell the sequel.

In 1889 came the smash. In 1894 a new French
company was organised. It continued the work spas-
modically until 1904, when the whole undertaking was
taken over by the American Government. Fifty millions
sterling had from the beginning been spent ; the Ameri-
can Government bought the assets for £8,000,000. So
much for modern capitalism ! Clearly better brains
were needed.

Now if an English or American firm were given the
contract to construct this canal, it is certain they would
not be content to do it for a profit of less than £5,000,000,
to be divided between their directors and shareholders.
But we have seen that, to deal with the Panama congeries
of problems, profiteering was impotent. Clearly it was
a Government affair. The element of profit (so far
as the actual construction was concerned) was accordingly
eliminated. Exit the most cherished principle of profit-
eering and enter one of the fundamental principles of
Guild organisation. No profit ! Astounding !

Please remember, however, that we are in this chapter
concerned with brains. If profits were to be eliminated,
how under the sun were the master-brains to be adequately
rewarded for thus successfully encompassing the most
stupendous engineering feat the world has yet witnessed ?
At this point we touch one of the world's romances. An
obscure colonel of engineers in the American Army was
brought in and given practical control of the whole of the

BRAINS AND THE GUILD 199

multitudinous and intricate operations involved. Tech-
nically he was appointed chairman of the Isthmian
Canal Commission ; actually he was supreme director.
Occasionally some pompous or fussy politician would
descend upon the colonel, something like a fly settling
on the nose of a Colossus. A few suave words, a dinner,
a trip round the works, and the politician would be
politely bowed out. Otherwise this colonel, whose
name as yet has barely reached Europe, sat in his office
in the Administration Buildings. To him was referred
every difficulty, every vexed problem, every personal
feud ; to him, as to a father, would come those stricken
with sudden sorrow or misfortune — this obscure colonel
of the engineering corps of the Army of the United
States. But we are slow to come to the point, are we ?
How can we help lingering over this new portent in the
world of great affairs ? How much, then, is the wealthy
American Government paying this man for doing such
incalculably valuable work ? Ten thousand pounds a
year ? Absurd ! Fifteen thousand ? Not enough : an
English civil engineer of any reputation would hardly
look at it. Twenty thousand ? Yes ; that would be
about a fair price. But how much is he really getting,
this absolute monarch of a strip of territory of 448 square
miles ? He is paid annually just £3000, from which is
deducted his army pay. And, strange to relate, he is
quite happy ; nor does he work badly or negligently.
On the contrary, he glories in his position, and would
probably have been equally glad to have done it for his
army pay, which is somewhere about £600 a year. Observe,
carefully — pay, not wages. His conduct is governed,
not by wages, but by esprit de corps — a genuine Guild
spirit, as we shall show. Are we not now approaching
a new canon of reward for work done, and duty faith-
fully accomplished? One more word, however, about
this colonel. When the work is done will there not be

200 NATIONAL GUILDS

some large financial reward ? When Lord Roberts came
home from his last campaign a grateful nation voted him
the sum of £100,000. When Lord Kitchener came home
he was presented with £50,000. Colonel Goethals, for
doing infinitely more valuable and fruitful work — work
that creates and does not destroy — expects to receive
an advance of six steps in the army list and a reasonably
prolonged leave of absence. Under capitalism the age
of chivalry is dead ; the Guild spirit will witness its
resurrection.

We are not concerned with the political methods
adopted by the American Government to gain absolute
possession of the Panama belt. From the mid- Victorian
point of view they were doubtless immoral and reprehen-
sible ; but the work is now almost completed, and we are
free to confess that we are indifferent to the sorrows and
grievances of the Republic of Colombia. What, however,
appeals to us is that the work has been done by a com-
bination of human forces that marks an incipient stage
of Guild organisation.

Fully to realise the significance of this, it is necessary
to grasp the extent and complexity of this monumental
undertaking. We have seen that it was altogether too
great a task for modern capitalism ; we shall show that
it is a task easy of accomplishment to a society effectively
divided into Guilds. In the light of later events, the idea
of building the canal at a profit sounds grotesque ;
modern capitalism can only exist upon profits. The
Panama Canal is being built regardless of profits ; the
economic interests it subserves are greater than the
commercial interest that would only have regard to
commercial profits. One Guild principle, therefore,
obtains : profit is eliminated. Even more striking :
rent and interest are also eliminated. The money paid
every week in wages is not borrowed ; it comes out of
the national revenue of the United States. To that

BRAINS AND THE GUILD 201

extent, at least, it is shorn of State capitalism. Yet
there are hundreds of thousands of serious folk — Socialists
and others — who still labour under the delusion that
the only way to finance a great enterprise requiring
£75,000,000 is to float a loan and pay interest in approved
capitalist fashion. Observe, too, that as no loan has been
issued, there is no annual sum to be paid to the bond-
holders, and, accordingly, the United States Government
may open the canal free of tolls to its coast-borne traffic ;
it is an unpledged security — morally and financially
unpledged. This proposed arrangement, which has
aroused the diplomatic opposition of Great Britain and
Germany, would, under the complete Guild organisation
of America, be an extremely simple operation. The
Transport Guild (Shipping Section) would have arranged
with the Engineering Guild to pass its ships through the
canal for reasons, and upon terms, that would appeal to
all the American Guilds assembled in full plenary con-
ference, at which also the Government would be ade-
quately represented. The Guild then is obviously no
figment of the imagination ; it is the inevitable develop-
ment of the large industry. It takes up the burden of
large affairs at the point where modern capitalism hope-
lessly breaks down.

But before we pursue this argument further, let us
tell of this embryo Guild's operations.

We have already described how French capitalism
encountered the mosquito, its wage slaves being in
consequence decimated by yellow fever and malaria.
To capitalism this means nothing so long as the supply of
the labour commodity does not fall short. But the
unconscious Guild spirit, induced by the unusual circum-
stances of the American intervention, created a com-
munity feeling and rendered death a community loss
irrespective of its commodity loss. Accordingly, before
the engineering operation began, a " Sanitation Division "

202 NATIONAL GUILDS

was formed under the direction of another obscure
colonel — this time of the Medical Corps — and war was
successfully waged against the mosquito pest. The
mosquito that breeds yellow fever was distinguished and
located ; so also the malarial. Each was traced to its
haunts ; the one lived on domestic garbage, the other
infested the swampy land through which the canal was
destined to pass. Stagnant water was covered with
kerosine oil, and in it the malarial mosquito found its
grave. Domestic refuse was systematically and promptly
removed, the consequence being that the yellow- jack
mosquito had nowhere to lay its eggs. This sounds
simple in the telling, but the magnitude of the work done
by the Medical Division can only be realised by travelling
over the fifty miles of watery swamp and passing through
the various camps where live the forty thousand em-
ployees, their wives, and dependents. English, French,
German, or American contract work can be seen in all
parts of the world ; from the Andes to the Caucasus,
from the Rockies to the Himalayas, profiteering con-
tractors with their hosts of wage slaves are building
railways or harbours, are erecting public buildings, or
sinking mining shafts. What traveller is there who
does not remember with a shudder the abiding ugliness
of the scars they have cut on the earth's surface ? But,
so far as the white population is concerned, the camps
at Ancon, Culebra, and Gatun on the Panama belt are
models of their kind and put to blush most of the manu-
facturing towns of England or America. Had the
element of profit entered into the work, Panama would be
horrible ; as it is, situated in a torrid heat with a rain-
fall varying from 70 to 225 inches a year, the death-rate
from disease is 772 per thousand. At the time of
writing, sanitation has cost the Administration nearly
£3,000,000.

The health of this mushroom community being thus

BRAINS AND THE GUILD 203

effectually guarded against plague, fever, and zymotic
disease (the dominance of the doctor is indeed becoming
an acute problem), the next step was to provide whole-
some food, sustaining and untainted. This necessity called
into being the " Subsistence Division." Again, another
obscure colonel took command, the work being far too
important and responsible to be entrusted to any profiteer-
ing caterer or restaurateur. Did this colonel seek to
make a profit on the supply of food ? Not he. An
army man, he knew something about rations and some-
thing about pay ; of wages and the industrial system
built up on wages he was happily oblivious. His task
was to feed this industrial army at his peril ; what had
profits to do with it ? He has to supply daily over 65,000
people with food, clothes, and the other necessities of life.
And he does it without a penny of profit. This obscure
colonel, no merchant prince is he, has a clear perception
that the workers want rations at cost price. He does
not report at the end of the year that he has made a large
profit out of his transactions — if he did he would be
superseded ; it is his duty to report that he has secured
rations of pure quality and distributed them effectually,
punctually, and rapidly amongst the Panama workers.
Is not this a distinct approach to the Guild spirit ?

The Subsistence Division spends every year £1,200,000
on food. It runs 22 general stores and 18 hotels. These
hotels supply every month 200,000 substantial meals at a
cost of fifteen pence each. In addition, there are 16 huge
European messes, where European (euphemism for cheap
white labour, mostly Spanish and Italian) labourers can
obtain a day's rations of three meals for twenty pence, and
14 West Indian kitchens where black labour can obtain
a day's rations for thirteen pence. Every morning, at
four o'clock, from Cristobal on the Panama side of the
Isthmus a supply train of 21 cars distributes fresh food. It
is all done through the Quartermaster's Department — the

204 NATIONAL GUILDS

chief quartermaster and his lieutenant being also obscure
colonels, with brains not vitiated by the profiteering spirit.
These men understand esprit de corps ; they have sensed
the Guild spirit. It is enjoined upon them that as officers
they must necessarily be gentlemen. Instinctively they
know that profiteering, like buccaneering, is not a gentle-
manly profession. They are not " brainy " enough to
make " a good thing " out of those responsible tasks ;
but they have accomplished a work at which " brainy "
capitalism failed utterly.

In this atmosphere, penetrated by a spirit closely akin
to that which will pervade the future Guild, the work
of the Panama Canal has been carried out and is fast
approaching a triumphant conclusion. One hundred
and eighty million cubit yards have been excavated.
The trains conveying this material, if placed end to end,
would four times circle the globe, and eve^ cubic yard
weighs a ton and a half. Five million tons of concrete have
gone into the locks, the spillway, and the canal. Pro-
vision is made for passing through from the Pacific to the
Atlantic vessels even larger than the Olympic, which is
iooo feet long. These ships are lifted 85 feet from sea-
level, either at Miraflores or Gatun, and are lowered again
to sea-level at the other end. They will pass from the
Pacific to the Atlantic Oceans in ten hours — a saving of
three to six weeks in their journey from East to West.

We are not so foolish as to push too far our analogy
between the Panama organisation and the Guild. But
what we have shown is that something in the nature and
structure of the Guild has undeniably succeeded where
capitalism, adequately financed and even backed by a
proud national sentiment, has undeniably failed. We
have further shown that the canons of reward, when
modified by the Guild spirit, will call into play capacity
and brains far superior to the capacity and brains nurtured
and trained in the profiteering spirit.

BRAINS AND THE GUILD 205

The weakness of our analogy is to be found in the
persistence of the wage system in the Panama zone.
But even here there are obvious reservations. In the
first place, rations are supplied at cost price. In this
way, capitalism loses one of its two profits and one of its
two rents. In the second place, the wage system is not
exploited by rent, interest and profits, the whole enter-
prise not being, nor pretending to be, on a profit -bearing
basis.

It may be urged that whilst an undertaking on the
scale of Panama calls into play problems of large public
policy, and is therefore too much for private capitalism,
it does not follow that smaller works ought not to be left
to the private capitalist and contractor. But, broadly
stated, there are no small enterprises left. The purchase
of a pound of tea or sugar, apparently an extremely
simple operation, just as surely calls up problems of large
public policy as does the construction of the Panama
Canal. Indeed, Panama is a very small affair compared
with the organisation of the tea or sugar industries.
Two shillings paid over the grocer's counter for a pound
of tea means work for a coolie in India or a Chinaman in
China. It means work for a packer, work for a sailor,
work for a salesman in London ; it calls into play the
labour of the shipbuilders who build the ships that carry
the tea, and work for the engineers who installed the
machinery that drove the ship. This florin for a pound
of tea is thrown into an ocean of mobile interests, and
its ripples circle to the outside edge of the industrial
world. The Panama Canal is a mere accessory to the
supremely important transaction engaged in by a woman
who buys food-stuffs or clothing. It is because these
transactions have grown so vitally important, so pro-
foundly far-reaching, both in fact and in significance, that
private capitalism finds itself too limited in its scope, too
circumscribed in its principles and methods, adequately to

206 NATIONAL GUILDS

grapple with such a complex situation. It failed in
Panama ; its failure is equally pronounced when it gives
away a gewgaw with a pound of tea.

This brings us back to our subject : brains of the
capitalist order are now palpably out of date ; they belong
to the stuffy furniture of the Victorian era. It is,
perhaps, more accurate to pose our statement thus :
executive and administrative brains are hampered and
restricted by the limitations and false economic concep-
tion of private capitalism. The able army colonels who
are bringing the Panama Canal to its final success would
have been as impotent as was De Lesseps had they not
had at their back a nation's credit and a new form of
industrial organisation. They had to concentrate
upon the canal zone all the available labour specially
organised for the great adventure. But that is precisely
the function of the Guilds. They must first monopolise
the labour power of their own people, then they must
apply that power to its most fruitful uses. It is important
to remember that we have explicitly rejected the syndi-
calist theory that the land, buildings and machinery
should be owned by the syndicalist equivalent of the
Guild. Just as the land, buildings and machinery of the
Panama Canal belong to the American Government,
so must the assets with which the Guilds work belong to
the nation. But because economic power dominates
political power, it follows that the Guilds will possess only
the usufruct of the assets. Nevertheless the Guilds must
be primarily concerned with the fruitful application of
their labour monopoly. They will be in a position
(like the Panama colonels) to compel the supply of all
necessary material through the appropriate Guild. They
will be quit of the private capitalist ; capitalism will go
to limbo with wagery ; its burden, its devastating
restrictions, its crudeness and its cruelties, will all become
the nightmare of an evil night that has gone for ever.

BRAINS AND THE GUILD 207

In these circumstances, it is evident that the super-
ficial " braininess " now so deplorably in request by
private capitalism will have no place. The new era
will inevitably develop a finer type of executive and
administrative brains. The Guild leaders and admini-
strators will be in the true sense statesmen ; they will
give to any problem an impersonal consideration because
they will not be perpetually obsessed with thoughts of
personal aggrandisement and of paltry profits. Their
future will be assured ; so also will be their status.
Their souls will be washed clean from the corrosion and
stains of capitalist morality. In that respect, at least,
they will breathe a purer ether and their work will accord-
ingly show richer results. Doubtless other moral weak-
nesses will develop — any good custom will corrupt the
world — but so far, at least, as profiteering corrupts they
will be immune.

We have seen that private capitalism failed at Panama,
with its expenditure of £75,000,000. But this amount
will be a comparatively small matter for the Guilds. The
Textile Guild, for example, will spend three times that
amount every year and think nothing of it. It will, to
begin with, purchase from America or elsewhere at least
£100,000,000 worth of raw cotton. It will purchase new
machinery on a scale undreamt of in capitalist philosophy.
Its quota towards sanitation, education, and all other
public services will put the Panama expenditure com-
pletely in the shade. Naturally so ; for Panama is only
concerned with a population of 60,000, whilst the Textile
Guild will be concerned, in its right proportion, with a
population of 45,000,000. In short, the Guilds are far
greater things than private capitalism can conceive.
Many men we meet are proud to be connected with some
large "firm" (observe the root meaning of the word);
but how ridiculously small and even insignificant must be
the greatest capitalist firms compared with a Guild ?

208 NATIONAL GUILDS

When that day comes men will be proud to be associated,
not with any private firm, but with their Guild.

Out of that pride will spring the strong will and trained
capacity to make the Guilds great instruments in a
national economy so ordered that the production and
distribution of wealth will be an occupation fit for
gentlemen.

XI

MOTIVE UNDER THE GUILD

Any proposed change in the economic life of a nation
inevitably raises a whole category of questions as to
the motives that move men, particularly in material
affairs. It is a rooted belief amongst the generality of
people that our human nature and our economic system
are chemically combined and incapable of precipitation.
It is asserted, with varying degrees of emphasis, that
our existing economy is precisely what it is because it
is the product of human nature ; because it responds
with delicate certainty to the motives that vitalise
human nature. This theory has even obtained the
sanction of an American professor, who (following Ben-
tham, Nassau Senior, and others) constructed and elab-
orated before the Congressional Anthracite Commission
an horrific animal which he termed " the economic man."
This Frankenstein monster, stripped of all moral sensi-
bility, represented the true blending of the motives
that actuate men in their material pursuits. It would
be foolish to write words upon such an absurd simulacrum
because the overwhelming majority of the believers in
private capitalism reject the theory. They, for the most
part, frankly admit that life under private capitalism is
only tolerable when mitigated or even transformed by
the beneficent influence of the unworldly — the non-
capitalist — Christ. " Business is business," we are told,
" but a man must not carry his business hardness or
14

210 NATIONAL GUILDS

cunning or push into his private life. The anomalies
between the business and the social codes are always a
fruitful theme for the moralist, the novelist, and the
dramatist. We are most of us conscious that business as
it is practised to-day does not harmonise with our better
motives, because we refuse " to talk shop " in our social
intercourse. Now there is no reason under the sun why
men and women, meeting socially, should not freely discuss
the means by which they live. But the fact that men
do in the factory and counting-house what they would
scorn to do in their social relations stamps our industrial
and commercial system as blackguardly or inhuman.
Chattel slavery was inhuman ; is wage slavery less so ?

It may be contended that human motive finds its
truest expression in the industrial struggle ; that social
conduct is, after all, merely an external polish, and
that the elemental man is in essence predatory, that his
motives are selfish, that his social amenities are all a
pretence. This contention is destroyed by the claim
made for the industrial system that it is the harbinger
of civilisation. The Manchester economists were alive
to this fundamental contradiction, and they accord-
ingly elaborated the theory of " enlightened selfish-
ness." " Of course," said they, " man is a selfish animal,
but his experience of industry and its consequent civilising
mission has led him to believe that devotion to the
larger economic interests of the community is in reality
the most enlightened way of strengthening his individual
interests." We need only remark on this point that the
continuance of the wage system, so far from strengthening,
actually imperils the larger economic interests of the
community ; that servitude, whether distinct from or
because of its moral implications, is destructive of civilised
society ; is uneconomic, because it stops the vast majority
of the population from the effective use and consumption
of wealth. To reduce the activities of the workers to the

MOTIVE UNDER THE GUILD 211

level and value of an inanimate commodity is to con-
demn them to death and not to life. Death is not an
economic process ; it is the negation of economy, what-
ever other purposes it may serve.

Even if human nature does not change, if it persists
in all its essentials through the vicissitudes of material
and moral upheavals, it by no means follows that as
yet we know it in all its fulness. In the stress of physical
hunger it may manifest itself in one direction, in the
plenitude of wealth in quite another. When we realise
the possibilities of human motive, the heights it has
reached in adversity, may we not assume that it will
blossom into even richer colouring when removed from
the strain, the anxiety, of material cares ? Shall we
not then discover that mankind is only a little lower
than the angels, and crowned with glory and honour ?
The question, then, is not whether human nature changes,
but whether under a more humane and economically
sounder rearrangment of society, human nature may not
develop into a greatness beyond all present anticipation.
The case for Guild Socialism is based upon an unchanging
faith that man's motives and hopes, freed from the con-
tamination of poverty, will replenish the world with
unsuspected richness and variety of wealth and life.

The whole range of argument relating to human
nature and its motives is, of course, common ground
to Socialists of every school ; we are here only concerned
with the spirit and motives that will inspire Guild
Socialism. In our chapter on " The Finance of the
Guild," we remarked that the main concern of the Guild
will be to ensure real value passing from the labour of
the members into the Guild products. This is the basis
of the whole scheme of life adumbrated by Guild or-
ganisation, and unless we can be assured that the mass of
Guild membership will con amore give its utmost skill
to the production of Guild wealth, the moral, and therefore

212 NATIONAL GUILDS

the economic, foundation of the Guild will sink. Can
we then rely upon the general membership to do its work
honestly ? Is there a strong and enduring motive to
put real value into its products ? We answer un-
hesitatingly in the affirmative. We affirm that there
is no such motive under private capitalism, and that the
motive of honest production can only be found in co-
operative production, from which the labour commodity
theory of the wage system has been eliminated. We
affirm that the wage system kills the motive inherent in
honest production because it dehumanises the human
element in labour, reducing it to wage slavery.

Those who have intimate dealings with the workers
of Great Britain (doubtless the remark is equally appli-
cable to other countries) know how deeply rooted is the
passion to do good work if opportunity serves. It is
a miracle and a mercy that modern industrialism has
not killed it outright. Kill the craftsmanship of an in-
dustrial country, and what remains ? Yet to-day, diffi-
cult though it be to believe, the vast majority of the
manufacturers of Western Europe and America seem
to be in a gigantic conspiracy to crush out that very
craftsmanship that is the life-blood of their occupation.
The reason is simple : mechanical production necessi-
tates intense specialisation, so that to-day a man no
longer learns a trade — he is put to a section of it, and
there he sticks for the rest of his life. But the workers
are by nature gregarious and companionable, so that
by exchange of experiences the tradition of each trade
is maintained — a tradition that will bloom into human
reality when labour ceases to be a non-human commodity
and becomes as richly human as it was under the mediaeval
Guild. Motive ! What workman is there who would
not sell his soul to become a craftsman ? Even to-day
the labourer starves himself that he may put his son
to some so-called skilled trade.

MOTIVE UNDER THE GUILD 213

There are, however, many other motives and aspira-
tions. There is the motive or ambition of the Guild
member to rise in the Guild hierarchy and become an
administrator. This form of motive to-day has two
branches : one man gradually attains foremanship, and
graduates into the commercial side of his trade ; another
man becomes absorbed in trades unionism, and finally
plays a more or less prominent part as an official, a
delegate, or what not. The organisation of the Guilds
will not be complete unless full scope be given to both
these types to achieve their appropriate careers. In
this connection we see the technical associations in-
definitely extending their membership by the admission
into their ranks of the actual workers, now their in-
feriors, but, under the Guilds, their equals and their
comrades. Under private capitalism most men are pre-
cluded from the satisfaction of these motives ; their
rightful positions are seized by the blood relations of
their employers. But under Guild organisation every
private carries a marshal's baton.

It is doubtful, however, whether the majority of man-
kind regard their means of livelihood as the main con-
cern of life. They would fain work that they may live ;
wagery compels them to live that they may work. The
preoccupations, practical and spiritual, of bare sub-
sistence, benumb faculties and aspirations which are
of incalculable value. It is impossible to move amongst
even the most poorly paid wage slaves without en-
countering innumerable signs of genius, of thought, of
artistic or literary or religious cravings. We have written
it before, but it bears constant repetition : the case for
democracy is that it is the inexhaustible well from which
the nation draws its resources, human, economic, social,
spiritual. All these are comprehended in democracy,
and only in democracy. It is the ground out of which
fructifies the seed of national life. The case against the

214 NATIONAL GUILDS

wage system is that it starves the ground — " lets it run
down," to use an agricultural term. If this be so, does it
not follow that any economic reformation of society that
gives ample scope to the endlessly varied and kaleido-
scopic motives, ambitions and cravings of the mass rather
than of the favoured few will best harmonise with motive,
enriching that democracy which is the fountain of national
life?

It is often contended that the wage slave is almost as
lazy and shiftless as the chattel slave ; that to maintain
wealth production it is therefore necessary to keep the
wage slave at the spur point of starvation. " Give them
money, and they instantly ease off," we are constantly
told in varying terms of contempt. We merely mention
the point to show that it has not escaped us ; we shall
certainly not argue such a foolish proposition. It
is not an argument ; it is an excuse for sweated wages.
It is, of course, true that a man's face may be so ground
that he may lose all heart, all resilience, and sink into
utter indifference and inertia. But if this be true of the
majority of the wage-earners — the majority of the nation —
how about the glories of the British Empire ? Is it
built up on the basis of a thriftless and shiftless prole-
tariat— a proletariat that starts work at six o'clock
in the morning, and treads the corn for nine, ten, or
eleven hours ? The more far-sighted employers, alive
to the essential falsity of this conception, have discovered
that there is an economy of high wages so scientifically
accurate that it destroys the wage-fund theory and resists
the law of diminishing returns. It is universally true
that acquisition stimulates accumulation — the appetite
grows by what it feeds upon. Place a man and his family
beyond the reach of urgent want, give him some scope
for his faculties, some ease of movement, he instantly
becomes a source of national wealth. How often do we
hear it said : " If only I were in some measure free from

MOTIVE UNDER THE GUILD 215

the cursed grind, I could do something worth while."
And we implicitly believe it. One of the most appalling
aspects of private capitalism is its callous disregard for
any kind of genius, skill, or ability which it cannot
exploit. Worse ! It kills out even the wealth-pro-
ducing capacities of the workers.

■' We too now say
That she, scarce comprehending
The greatest of her golden- voiced sons any more,
Stupidly travels her dull round of mechanic toil,
And lets slow die out of her life
Beauty and genius and joy."

It is impossible to analyse the multitudinous and
mixed motives of mankind. Some are noble ; some are
ignoble. But we have no doubt that the true way of
life is to give free scope to noble motives, trusting to
the culture, common-sense, and widely distributed
wealth of the nation to kill or cure ignoble motives.

If we cannot analyse, define, or docket the motives
of men, it is, perhaps, possible to discover the true con-
ditions and atmosphere in which motives, appetites, and
ambitions may be satisfied. A motive implies a will.
But before it can in any degree be realised, power must
be added to will. Thus the condition precedent is will-
power. We cannot, however, even possess will unless
the fund of will is greater than the depletion of that
will-fund for the bare maintenance of life. A surplus
of will over the amount of energy requisite for existence
is therefore essential. This surplus once secured, man
has only to apply himself to the satisfaction of his motive
by means of his will-power. He will succeed or fail
as the will-power in him is strong enough or too weak
for the purpose. The modern aristocratic theory is that
this " Will to Power " most appropriately resides in the
breasts of the dominant few — those who have acquired
the culture of the schools in close alliance with the more

216 NATIONAL GUILDS

distinctively exploiting class — their surplus of will-
power being at its maximum because there is no demand
upon their will-fund to maintain life — and that there-
fore the true way of national life is to subject the mass of
labouring mankind to such discipline as shall keep them
in subjection and their masters in control. This is done
by maintaining harmony and balance between the forces
of conventional morality and the physical forces at
the command of the Crown. This theory presupposes
that out of a bureaucrat grows a superman. It runs
counter to the democratic theory that it is only by the
cultivation of the powers and propensities of the mass of
the population that national greatness can be attained.
The question, therefore, is thus resolved : Is the Will to
Power a perquisite of a dominant class, or is it a universal
quality ? The bureaucrats claim it ; so, also, do the Guilds.

XII

THE BUREAUCRAT AND THE GUILD

In the Socialist and Labour movement in Great Britain,
bureaucracy and bureaucratic posts have recently be-
come popular. In the early days of British Socialism
a man who joined the bureaucracy was regarded in the
light of poacher turned gamekeeper. It was assumed
that the revolutionary pith had gone out of him ; that
henceforth he was irrevocably on the side of the estab-
lished order. That is only another way of saying that
the earlier Socialists shared this instinctive distrust with
their fellow-men. As the Socialist movement shed its
revolutionary skin, disclosing in the process a soft head
for economics and a soft heart for politics, the machinery
of political government grew more and more fascinating,
until to-day it is customary for prominent British Socialist
and Labour leaders to accept the Government commission
and incidentally to feather their precariously perched
nests. It is not generally realised how successfully the
present Government has sterilised the Socialist and
Labour movement by enlisting in the ranks of the bureau-
cracy energetic young Fabians as well as prominent
political Socialists and Labour leaders — large posts in
London, smaller posts in the provinces. These appoint-
ments have not been made because of the beautiful eyes
of the recipients ; they have been made because it is
either consciously or sub-consciously understood that the
Civil Service is the real palladium of the existing social,

2f7

218 NATIONAL GUILDS

political and economic system, and accordingly Socialists
and Labour men who join it of necessity bear their share
in heading off any subversive movement. The Labour
Exchanges and the Insurance Act have afforded many
opportunities to practise this sterilising policy.

The accession to the ranks of the Civil Service of a
certain number of men alleged to be democrats has, of
course, in no way democratised Downing Street and
its purlieus. Classification still rules, appointments to
the first class still being the perquisite of the universities.
In this way the bureaucratic organisation is securely
linked to the governing classes ; they worship the same
God ; their tone, manners and ambition derive from the
same source. It is not, therefore, surprising that the
British bureaucracy is regarded by the bulk of the working
population as an element of oppression — a governing
class, having behind it the armed forces of the police,
the army, the navy, and the psychological discipline
of the churches and the medicine men.

The conjunction of the State Socialists with the
bureaucracy was obviously inevitable. State Socialism
involves bureaucracy because it has never realised that
democracy is impossible if co-existent with the wage
system, and, as we have shown, State Socialism can
only pay its bondholders by maintaining the wage
system. A democratic bureaucracy is a contradiction
in terms because it has always been, is now, and always
will be, the governing arm of the governing classes.
As the existence of a governing class is the negation of
democracy, it follows that bureaucracy is essentially
anti-democratic. The instinct, therefore, of the working
classes that warns them against the domination of the
Civil Service is at bottom the instinct of democracy.
So far as the alliance between bureaucracy and State
Socialism has gone, its effects are psychologically rather
than actually oppressive, The Fabian Society has always

THE BUREAUCRAT AND THE GUILD 219

been frankly bureaucratic ; it has pursued its meliorist
policy through the agency of the public services. " What
is a bureaucrat ? " asks the young Fabian gaily. " One
who works in a bureau," is the glib answer. " What is a
bureau ? " he further asks to clinch his point. " Only
an office," answers the chorus. " Quite so," says the
self-assured young man, " and if we called him a clerk
there would be no fuss." Words, however, have their
associations as well as their derivative meanings. We
might ask the young Fabian if an officer is one who
works in an office. We might further ask him if an officer
is a clerk. We know the meaning of the two words ;
we know that bureaucracy connotes a vast deal more than
desk-work. The Fabian attitude towards democracy
— an arrogant and supercilious attitude — is largely due
to the reliance which it places upon the bureaucracy to
administer social reforms from above ; it cannot con-
ceive wage slavery doing it for itself. Fabianism is so
far correct in its estimate of the regenerative infertility
of wagery ; but it is incurably anti-democratic because
it is content to tolerate wagery — have not Mr. and Mrs.
Sidney Webb said so ? To argue that the wage system
cannot be fundamentally abolished and concurrently to
proclaim belief in democracy is not only illogical but
indicative of a rooted ignorance of the true relation of
industry to effective democracy.

If the Fabian has a reasoned attitude towards bureau-
cracy, the official Labour leader has none. He is
innocent of any theory of life. He loves authority,
and he loves the ordered ease of the Civil servant. He
has natural yearnings for a swift transition from the
" passive " conditions of wagery to the " active " in-
fluence of the bureaucratic organisation. To be a Jack
in office in Whitehall is to him far preferable to the
strenuous impotence of labour politics. Apart, however,
from the personal considerations that draw State Socialists

220 NATIONAL GUILDS

and Labourists into the bureaucracy, the main reason
undoubtedly is the settled conviction of the vast majority
of the " politicals " that political government reforms
but does not revolutionise. And, until the real re-
volutionary meaning of wage abolition is grasped by the
workers, the addition to the bureaucracy of reputable
Labour leaders will be deemed some small guarantee for a
good supply of ointment upon the wage cancer. If
Labour does not want to abolish wagery, it obviously
does not want either revolution or democracy. To it,
therefore, there is no treason in joining the bureaucracy.

Nevertheless, it is treason of a peculiarly odious
type. What purpose do these Labour-bureaucrats fulfil ?
They become the eyes and ears — the spies — of the govern-
ing class, warning it how far it may go, whilst cajoling
industrial discontent into acquiesence by promising or
suggesting trifling easements. If the number of Labour-
bureaucrats were multiplied by a hundred, the result
would be precisely the same ; you do not weaken your
enemy by giving him your own men — deserters who
remember your weaknesses and forget your strength. In
America, where the bureaucratic purchase of Labour
politicians is done on a wholesale scale, the results are
precisely the same as in Germany, where the bureaucracy
trains its own spies. Here and there " Labour is mocked,
its just rewards are stolen."

But would not the Guilds produce their own crop
of hard-shell bureaucrats ? Would not the inevitable
Guild hierarchy play the same part as the existing Civil
Services ? Are not the high officials of a Trust as bureau-
cratic as any in the Government service ? Of course
they are, and for precisely the same reason : they are
appointed to guard the interests of rent and capital.
That is exactly the function of the Government official.
How then would the Guild official differ in essence from
the Government or Trust official ? In two fundamental

THE BUREAUCRAT AND THE GUILD 221

respects : (a) because there would be no exploiting
class to protect — it would go with the wage system ;
(b) because the Guilds would democratically elect their
own officers. We have previously remarked that the
workman is an exceedingly shrewd judge of competent
work and of industrial administration. In less than one
generation there would not be an incompetent official in
any Guild. The Guild members would judge his com-
petence, not by the glibness of his tongue nor by the
suavity of his manners, but by his skill in producing
wealth with the minimum expenditure of labour. Every
labour economy effected would spell either greater
wealth for distribution amongst the members or more
leisure to dignify and recreate life.

From all this is drawn an inference of profound im-
portance : industrial democracy is the bedrock of a
free social life. Political freedom without industrial
power is a cruel and tantalising deception. It is fatal
to forget that economic power precedes and controls
political power. We see, further, that an analysis of
bureaucracy proves it to be anti-democratic and, there-
fore, contrary to the spirit and principles of Guild
organisation.

It is only when the democratic forces turn resolutely
away from political action and concentrate upon the
acquisition of industrial power (they can only do it by
applying democratic principles) that they will discover
bureaucracy — the outward and visible manifestation of
the power of the possessing classes, backed as it is by
the Army and Navy and an informally Erastian control
of the churches — to be their real antagonist in the
" class struggle." One of the most disastrous results
of political Socialism has been to obscure the reality of
the class struggle. The Socialist and Labour politicals
— indeed, all the component parts of the Labour Party
— in their scramble for votes have been compelled to

222 NATIONAL GUILDS

disregard and even to deny the existence of a class
struggle. To disregard it as a political necessity is at
least understandable, but to deny it as a serious factor
in the situation is surely the acme of political pol-
troonery . Yet the leaders of the I . L . P . have unblushingly
asserted that the class struggle is altogether irrele-
vant to the Socialist agitation. And they wring their
hands in wonderment that real wages are still curving
disgracefully downwards ! Let us then iterate and
reiterate that the class struggle is the sternest of stern
realities ; that its ending by Guild Socialism will mean a
prolonged war ; that Guild Socialism cannot be born
without the efforts inherent in every real revolution.
Plutocracy will not be bowed out ; it must be thrust
out.

The gradual invasion of industrial conditions by the
bureaucracy — factory Acts, insurance, and the like — has
opened the democrat's eyes to another important aspect
of this problem : In all matters relating to wealth pro-
duction, the bureaucrat is hopelessly incompetent.
Parliament passes Acts governing the conditions of
factory and workshop life only to waste succeeding
sessions in amending them. Industry is too complex,
too integrated, to be subjected to the amateurish inter-
ference of political busybodies. The factory inspector
is a joke both to employers and employed ; they know
when to expect him and they systematically deceive
him. There is no factory rule or regulation worth its
paper value unless it be obeyed with the willing consent
of the industrial population. Under the Guild organisa-
tion, these parliamentary enactments would be regarded
as superfluous and impertinent ; if industrial democracy
cannot regulate its own factory conditions, then Guild
Socialism is a mirage. The fact is, however, that the
bureaucracy has discovered that humane employment
means larger profits ; it enhances the commodity value

THE BUREAUCRAT AND THE GUILD 223

of labour. All the factory Acts have been followed by
greater commercial prosperity. The employers, armed
with economic power, reflect that power through Parlia-
ment. In consequence, they clip and trim labour con-
ditions to suit their requirements, to appease labour
with soft solder, and to benefit by the credit that is gained
by nominally humanitarian legislation. But all the
time rent, interest and profit are increasing whilst real
wages are falling.

The present friendly relations that exist between
official labour and the bureaucracy must be speedily
terminated. We know of nothing so undignified, if not
degrading, as the deputations that subserviently wait
upon Government Ministers and their bureaucratic
henchmen. These deputations always follow the con-
ferences of the Trade Union Congress and the Labour
Party. They kow-tow to the Minister, who responds
with " nods and becks and wreathed smiles " ; they ask
the Minister if he will kindly look into this or that
condition of some particular trade and legislate accord-
ingly. The Minister gravely thanks them for drawing
his attention to the subject — a subject that is always
very near to his omnipresent heart — promises inquiry and
retires. The deputation then proceeds to have a good
time in London, visits the theatre or the House of
Commons, where its members enjoy the convivial com-
pany of the Labour Party — and so home. The Minister,
in his turn, instructs his secretary to ascertain if the
proposed enactments would offend or injure whatever
wealthy supporters he may have in the particular trade
affected, and his decision is ultimately governed by the
replies he receives. This system of annual delegations
to placate the bureaucratic elements has grown to the
dimensions of a serious scandal. But their psychological
effects are much more deadly than any possible scandal.
The organisation of Labour will fast become a mockery

224 NATIONAL GUILDS

and a snare unless it learns once and for all that it exists
to fight the bureaucracy and not to wheedle it.

The advent of the Guild does not mean the de-
parture of the bureaucrat, but it involves a change of
heart and a sharp turn from the traditions of his order ;
although by birth, breeding, or education, his life and
sympathies are bound up with the governing or pluto-
cratic classes, he, nevertheless, is not generally a man
of large means. He protects the plunder of his social
associates ; he seldom shares it. He is the poorly paid
tutor in the rich man's mansion, in the family but not of
it ; he is the eunuch in the palace. He has some affinity
with the Royal Irish Constabulary — a fine body of men,
but pledged to protect the landed interest, without
sharing in the rent. Like the R.I.C., the Civil Service
has an esprit de corps that would make it equally loyal
to a new master. It is a commonplace that the expert
is a good servant but a bad master : so also is the bureau-
crat. When, therefore, economic power is transferred
from private capitalism to the Guilds — ultimately,
economic power is Labour power — the whole spirit of
bureaucracy will be subtly changed. It will cease to be
an instrument of administrative oppression ; it will
revolve round a new axis and in a new atmosphere.
The bureaucrat trained to-day to the

" Chicane of prudent pauses,
Sage provisoes, sub-intents and saving clauses,"

the prevarication necessitated by lip-homage to a
nominal democracy and actual service to a plutocracy,
will suddenly find himself released and free to act with
conviction.

At the proper stage of this inquiry we shall endeavour
to outline the true function of a State whose politics
shall be purified and whose policy shall be undisturbed
by the restrictions of the financial interests. So far,

THE BUREAUCRAT AND THE GUILD 225

however, as the bureaucrat is concerned, he will cease
to act for the landlords and capitalists, associated for
political purposes and calling themselves " the State " ;
he will then act for the general citizenship in con-
tradistinction to the Guild membership. In this connec-
tion it is imperative to remember that a man will act
with his Guild in protecting his Guild interests without
ceasing to be a citizen, voicing and fighting for his opinions,
as free citizens always do. We have no sympathy with
a certain narrow school of thought that argues for the
restriction of politics to the Guild, or its equivalent.

The Civil Service of the future, the descendant of the
bureaucracy of to-day, will become the servant (having
ceased to be the master when the wage system was
abolished) of an enlightened political system from which
the Guilds will have removed all financial burdens.

15

XIII

INTER-GUILD RELATIONS

As the Guilds gradually shape themselves into their
natural economic forms and groupings, it is certain that
many vexed controversies will call for patient and
statesmanlike discussion and settlement . The reorganisa-
tion of industrial society may be planned with Roman
precision of thought and a Greek sense of symmetry, but,
unless the spirit that directs it is informed with a cultured
appreciation of the many and various problems that
call for solution, we shall find ourselves in possession
of a charter and constitution as perfect as a Central
American Republic and with as rotten an administration.
The organisation of the Guilds is a task for trained
craftsmen and industrial thinkers, and not for contented
wage slaves. It presupposes an intelligent determina-
tion to be quit of the wage system and an understanding
that Guild organisation is the strong successor to the large
industry, now clearly destined to disintegration and decay.
It is impossible to forecast the many and various
points of dissension which must arise between the Guilds.
Where economic interests tend to diverge, it is prudent
to anticipate acute and even acrimonious controversy
rather than the gentle reasonableness of a Quaker con-
ference. As the raison d'etre of the Guilds is primarily
economic, and as nothing stirs mankind so easily as the
consideration of its material interests and prospects, we
may, therefore, expect the active operation of economic

INTER-GUILD RELATIONS 227

" pulls," even though we cannot foresee their exact
character. If, however, we visualise the future Guilds,
we may perhaps vaguely glimpse some apples of discord,
even though we cannot taste their exact flavour. Refer-
ence to our chapter, " Industries Susceptible of Guild
Organisation," discloses the probability of every Guild
possessing a membership of 1,500,000 to 2,500,000. Let
us recapitulate the main Guilds with their possible
membership, so that we may the more readily appreciate
certain possible diversities of interest.

Guild. Membership.

1. Transit ...... 1,500,000

2. Agriculture ...... 2,500,000

3. Mines and Quarries ..... 1,000,000

4. Metals, Machines, Implements and Engineering . 1,500,000

5. Building, Construction, Furniture and Decoration . 2,000,000

6. Paper, Printing, Books, Stationery . . . 500,000

7. Textiles ...... 1,500,000

8. Clothing . .... 1,500,000

9. Food, Tobacco, Drink and Lodging . . . 1,500,000

13,500,000

Here, then, are nine possible Guilds covering a working
membership of 13,500,000, and representing the majority
of the population. It requires but little imagination
to perceive a wide diversity of group " pulls," even though
an economic unity has been established which far tran-
scends any conceivable unity in the existing industrial
system. Theoretically considered, two men in making
a bargain are seeking economic unity ; but that does not
preclude a stern battle of wits in reaching a mutually
satisfactory result. And it is human nature that the
man with the stronger " pull " will get slightly the
better of the bargain. (A wise lawyer will affirm, however,
that the most enduring settlement is when both parties
are completely satisfied. That, perhaps, is a counsel of
perfection.) Now we do not suggest that these Guilds are

228 NATIONAL GUILDS

all of equal economic strength, and accordingly we may
expect dissatisfaction amongst the weaker Guilds when
the stronger from time to time impose their wills — that
is, in the last resort, exercise their " pull." In what
direction, then, can we reasonably anticipate dissatisfac-
tion, followed by strenuous agitation for rectification ?

Primarily, we imagine in the value each Guild sets
upon its own labour, which may be disputed by the other
Guilds. In our chapter, " The Finance of the Guilds,"
we remarked that in the earlier stages the more highly
skilled industries would insist upon a higher value
being attached to their labour than to the labour of the
so-called " unskilled " groups. Assuming a weekly
maximum " pay " of ioo " guilders " and a minimum of
(say) 60, it is obvious that the lower grades will unceas-
ingly struggle to reach the maximum. This struggle, too,
will be waged inside the several Guilds, as, for example,
between the fitter and his labourer, both members of the
same Guild, or the mason and his labourer, also members
of another Guild. But the domestic arrangements of
the Guild do not concern us here ; it is when the Guilds,
as such, come to grips with the other Guilds to establish
the general value of their respective work and functions
that the main battle will be joined. Thus, agriculture
is now poorly paid, and, in consequence, we have
habituated ourselves to cheap food — so cheap, indeed,
that we are the envy and wonder of the world in this
respect. But the Agricultural Guild is numerically the
strongest of them all. May we not, then, expect strong
action by that Guild for a revaluation of agricultural
work and products ? It is clear that the Agricultural
Guild will have direct or indirect relations with all the
other Guilds, because none of them can estimate the cost
of their work until the cost of food has been determined.
Will the claim for a higher valuation of agriculture, both
in its actual products and as a supremely important

INTER-GUILD RELATIONS 229

element in our national life, be met by the other Guilds
in a niggling or in a generous spirit ? In this connection,
it is well to remember that even during the past decade
extremely acrimonious disputes have arisen between
existing trade unions, notably as to delimitation of work,
and if such large questions were to be settled in the same
spirit, it would prove of ill-omen to the future greatness
of the Guilds. But the Guilds, as we have pictured
them, are not the existing unions, but the unions plus
the practical intellectuals, the labour and brains of each
Guild naturally evolving a hierarchy to which large
issues of industrial policy might with confidence be
referred. At the back of this hierarchy, and finally
dominating it, is the Guild democracy — a constituency
genuinely susceptible to any real claim in equity. Never-
theless, the main consideration in the settlement of inter-
Guild disputes will be the economic necessities of the
case at the time.

Suppose, then, that the Agricultural Guild were to
demand such an increase in the value of its produce as
would enable it to level up its pay from 65 to 75. . Sup-
pose, further, that the other Guilds were to reply that,
anxious as they were to see agricultural labour values im-
proved, they felt that any such advance, just then, would
upset the equilibrium upon which depended their existing
estimates, and accordingly that they must resist the claim.
What would be the next step of the Agricultural Guild ?

Before attempting any solution, it may help us if we
postulate some other Guild complications. Take the
Transit Guild, for example. There is no reason to
suppose that transit will be a less important function
under the Guilds than it is to-day. Suppose, then, the
Transit Guild to be in suppressed revolt against its
treatment by the other Guilds. Obviously, the Transit
Guild occupies a strategic position of peculiar strength.
It could hold up all the Guilds indefinitely. But it can

230 NATIONAL GUILDS

only be strong so long as it exercises its strength with
responsibility. It is, nevertheless, dissatisfied. Con-
sistent with responsibility and its sense of economic
unity with the other Guilds, what can it do ?

Again, the Textile and the Clothing Guilds are closely
related. The one would certainly buy from the other
in enormous quantities. Suppose a dispute to arise ?

Yet, again, the Miners' Guild is intimately bound up
with all the other Guilds, which, naturally, want fuel.
The miners may value their labour at an average of 80
when the other Guilds would prefer an average of 75.
What is the way out ?

Undoubtedly, the ultimate way out would be by a
speedy approximation of all labour values to one common
standard. But pending the ultimate solution, what
would be the probable course of procedure ?

Fortunately, private capitalism has already evolved
a plan which would largely meet the difficulties here cited.
When groups of companies have mutual interests as
buyers and sellers to each other, to avoid these very
complications they take financial holdings in each other
and exchange directors. They recognise their inter-
dependence and take precautions against disturbing it.
In like manner, the Guilds will probably exchange
representation upon their several governing bodies, so
that each Guild authority may understand, and sym-
pathetically enter into, the difficulties and problems
of the others. Nor is there any reason why these Guild
ambassadors should not be clothed with large authority
to commit their Guilds to proposals that vary existing
contracts or understandings. If large changes were
proposed, the assent of the other Guilds, through their
ambassadors, would be as deliberate as the changes were
important. We here hit upon a valuable truth : When
bodies between which there is no economic harmony
disagree (labour and capital under modern industrialism)

INTER-GUILD RELATIONS 231

such disagreement tends towards disintegration ; but
disagreements between two or more bodies whose
economic interests are fundamentally harmonious, tend
towards closer economic integration. Thus dissensions
amongst the Guilds would almost certainly create a
movement to reduce all such friction to its smallest area,
and by good- will on all sides finally to eliminate it.
And probably the way to achieve this end would be by
closer relations reached through the interchange of Guild
ambassadors, whose functions would be precisely those
of a national ambassador, who must not only watch the
interests of his country but promote closer relations, and,
if required, help to smooth out difficulties when they
arise elsewhere. The position of Guild representative
would obviously be very important — a position to which
the best men in the Guild might aspire.

But whilst nine out of every ten disputes between
the Guilds would probably be solved by a system of
inter-representation, it is quite conceivable that a dis-
satisfied Guild would carry its discontent considerably
further. We have already postulated a supreme govern-
ing body of the united Guilds ; to this body, in which
is vested plenary power, every Guild would have the
right to appeal. In the last resort, too, every Guild
would have the right to strike, although why they should
strike, and against whom, at the moment passes our
comprehension.

Disputes would, however, almost certainly play a
very small part in inter-Guild relations. To adopt our
ambassadorial analogy once more, the vast majority of
nations are perpetually at peace with the world, but their
ambassadors are none the less busy on that account.
Quite literally, tens of thousands of questions would be
constantly waiting their answers. Two Guilds, each with
a membership of 1,500,000, with enormous trading
relations covering the whole country, must of necessity

232 NATIONAL GUILDS

evolve suitable diplomatic machinery through which
their affairs would be regulated.

It is of some speculative interest to consider to what
extent red-tape would influence the Guilds. Would the
diplomatic machinery here adumbrated tend to increase
or reduce red-tape ? For ourselves, we do not condemn
so readily as some every case of official red-tape. It
is as often as not very important and necessary. Nor
is red-tape confined to Government departments. We
have heard that it takes from eighteen months to two
years to get some question affecting policy settled in the
Steel Trust. Other large trading organisations are
equally deliberate, and rightly so. But between the
Guilds two or three difficulties would not arise. In the
first place, profits being eliminated, the element of
secrecy would disappear. The Guilds would have
nothing to hide. Next, there need be no privacy as to
the origin of the raw material or the destination of the
finished product. Thirdly, the machinery would not be
private ; it would be open to everybody. The several
Guilds, therefore, would always meet each other in an
atmosphere of complete frankness. Even their re-
spective policies would be common property, because
each Guild is represented on all the others.

A fruitful source of negotiation between the Guilds
would be the style and quality of goods bought and
sold. Conceivably the manufacturing Guild might say :
" We make the article so." The purchasing Guild
might reply : " We want it not so, but thus." Then
would arise a considerable discussion as to methods, at
which we should immensely like to be present. Is the
maker or the buyer the better judge ? Must the crafts-
man really produce to meet a demand, or ought he to
insist upon the style and quality which he knows are best ?
And what are the compromises ? Probably all such ques-
tions as these would be settled by joint Guild committees.

INTER-GUILD RELATIONS 233

Friction and discussion being inevitable between
the Guilds on innumerable points of detail — detail
sometimes so large that it almost amounts to prin-
ciple— would the Guilds formally discuss amongst them-
selves questions of national policy ? To-day, Chambers
of Commerce are very chary of entering into political
discussion, but the Trade Union Congress has no such
compunction. We have already postulated, however,
that the Guilds must dominate the economic situation.
Therefore, so far as national policy affects or impinges
upon the economic function of the Guilds, they must
necessarily take official and united cognisance of it. It
does not follow, however, that all the Guilds would be
affected in like manner by political questions of quasi-
economic bearing. One Guild might benefit ; another
might suffer. Nevertheless, the Guilds would probably
find it politic to take united action, and insist upon such
modifications of some proposed political policy as would
protect any of their number from serious loss or grave
inconvenience. Whilst the Guilds were properly taking
steps to protect their corporate interests, and whilst
doubtless large numbers of their members would sup-
port them on general principles, it is certain that equally
large numbers of Guild members would exercise their
political rights by voting for this or that political pro-
posal on national rather than on Guild grounds. It is
important to remember that Guild Socialism does not
merge citizenship into Guild membership. A man is a
member of his Guild for sound material reasons, and
through his Guild his material interests are protected,
but his rights as a citizen transcend his Guild member-
ship. In the earlier part of this work we were at some
pains to prove that the wage system reduces its victims
to " passive citizenship," leaving " active citizenship "
to the possessing and exploiting classes. With the
passing away of wage slavery, every member of the

234 NATIONAL GUILDS

community automatically becomes an " active " citizen.
This fact is destined to play an important part in the
social and political life of the nation. It will create an
equipoise between State policy and Guild interests. The
Guilds, even when they have unitedly manifested them-
selves, will never be able to call upon their members
to act contrary to their dispositions as citizens.

Another feature of inter-Guild life will be joint con-
ferences of cognate groups, who will discuss not merely
their standing in their several Guilds, but new principles
of administration, new discoveries, indeed anything and
everything of economic interest. There will, for ex-
ample, be an army of chemists scattered through the
Guilds. They will certainly meet to exchange experi-
ences, to test theories by practice, and they will assuredly
take all the necessary steps to protect their profession
and to secure for it all appropriate amenities. The
administrative hierarchies will naturally consult to-
gether ; upon their all-round efficiency their positions
depend, for an industrial democracy will give short
shrift to incompetence or slackness ; an exchange of
views will prove of great value to these administrators,
not only in attaining higher standards of efficiency, but
in strengthening their positions. We might pass from
grade to grade of the Guilds, and find points of contact
and mutual interest. The foregoing, however, is a
rough picture of our meaning.

XIV

THE APPROACH TO THE GUILD

When organised labour is fully seised of the true meaning
and implications of the wage system, we may confidently
rely upon a complete change in the objects and methods
of the trade unions. For it is inconceivable that men
who realise the essential servitude of wagery should
spend their time in so ameliorating or modifying it that
its existence should tend to be prolonged. If the
acceptance of wages is in itself a servile act, and if, as
we may reasonably assume, servitude is repugnant to
the instinct and reason of civilised mankind, then it
follows that the industrial struggle of the future will
not be to increase wages, but to abolish them. When
the army of wage-earners unanimously declare that they
will no longer work for wages (whether they be well-paid
or ill-paid), the industrial revolution will have begun.
The conclusion to our argument is irresistible : there can
be no industrial revolution (and, ex hyfothesi, no political
revolution) inside the wage system.

Another conclusion flows from our argument : wages
and partnership mutually exclude each other. A partner,
as such, never receives wages ; he may receive salary or
pay for work done ; he is not and cannot be a wage
slave. His pay is not determined by the competitive
wage rate ; he cannot be consigned to absolute unem-
ployment. This incompatibility of wages and partner-
ship applies equally to partnership with private capitalism

«35

236 NATIONAL GUILDS

or partnership with the State. It is mathematically
certain that, if the wealth producers become partners in
the work of wealth production, they will have cast off
for ever their garments of wage slavery.

We are aware that we have written so explicitly, so
confidently, of future developments that we are open to
a charge of Utopianism. But there is nothing Utopian
in this : it is as certain as a proposition in Euclid. We
should, however, prove ourselves pure-blooded Utopians
did we conceive it probable, or even possible, that the
change from wage slavery to State partnership would
be achieved without an intervening period of some form
of partnership with existing capitalism. There is no
magician's wand to transform at a word wagery into
Guild organisation. The process will inevitably be slow :
the movement will necessarily be step by step. The
obstacles to a swift development are many and great.
They are to be found in the subtle strength of capitalism
and the inherent weaknesses and inadequacy of labour
organisation.

When labour, finally convinced that the wage system
spells perpetual servitude, wills to determine it ; when,
instead of a multiplicity of sectional strikes aiming at a
modification of wagery — higher wages, shorter working
days, and the like — labour organises the industrial
struggle on the basis of wage abolition, it is certain that
capitalism will strive to save itself by more or less spurious
proposals to share profits. But profits can only spring
out of the margin between the price paid for labour as
a commodity and the exchange value of the finished
product, such value being dependent (a) upon other
industries also maintaining wagery, and (b) upon a gold
standard imposed by the banks. Therefore, capitalism
will seek to bribe labour to maintain, or at least to con-
tinue, the wage system, undertaking as a quid pro quo
to share such profits as may be made out of the existing

THE APPROACH TO THE GUILD 237

commercial methods. It is very doubtful if capitalism
will fight upon any claim to a fundamental right to
engage labour in the competitive wage market, and so
keep it permanently enmeshed in wage servitude. The
case for Labour's increased share in wealth production
is admitted. But the private capitalist has another shot
in his locker. He can say to the trade unions that as
yet their organisation is imperfect in two important
directions. Firstly, they exclude the technical men, the
experts, the scientists, all of whom are vitally important
factors in wealth production. Secondly, by faulty
organisation they also exclude the actual majority of
the wage-earners in every trade. How then can the
capitalist take into partnership the trade unionists who
after all are but a minority, and exclude the other two
sections, who form the majority ? Nothing easier ; he
can do it on the principle of " divide and conquer." He
can let in the trade unionists by offering special advantages
to the trade unionists. But any such advantages are
illusory, if the others are kept out. For it is obvious that
the excluded wage-earners, the non-unionists, must
either be maintained by the triumphant unionists, or,
in the alternative, the non-unionist will bear down real
wages. Not only so, but the technical men will continue
the faithful henchmen of the private capitalist. Thus,
unless it is careful, Labour will be lured into a vicious
circle — a pretence of partnership, a continuance of
disguised wages, rent, interest and profits hardly impaired.
Labour, having grasped the meaning and significance
of the wage system, has only learnt its first lesson.
When it has mastered its second lesson it will see its
way more clearly out of the vicious circle with which
capitalism would surround it. This second lesson is
that economic emancipation can only come through the
elimination of rent, interest and profits. A mere change
in the form of remuneration which did not bring in its

238 NATIONAL GUILDS

train a greatly enhanced standard of life would be a
mockery and a snare. There is, however, literally no
fund from which to draw this increased means of liveli-
hood except from rent, interest and profits. An increase
in the cost of production (the inevitable result of extended
profit-sharing) would only exacerbate the existing problem
of the fall in real wages. There is now no room in modern
economy for rent-mongers and profiteers as well as a
well-disciplined and self-respecting industrial democracy.
Profiteering can only exist by maintaining the wage
system. It is also important to remember that economy
calls for a decrease and not an increase in the cost of
production and distribution. Labour, therefore, is com-
pelled to say to the exploiter : " Friend, either thou or
I must go, and I intend to stay. The world can do
without thee ; it cannot do without me." The admission
of Labour, or any section of Labour, into a profit-sharing
scheme, which does not at the same time cut deeply into
rent, or interest, or profit, would increase the cost of pro-
duction and solve no problem. But if capitalism can
play the game of " divide and conquer," so also can
Labour. If the profiteer finds himself squeezed by Labour,
will he not, so far as is possible, save his own skin by
squeezing rent and the other forms of unearned incre-
ment ? But the profiteer's natural affiliations are with
rent and interest. If, therefore, he can divide and conquer
Labour, he will protect his economic associates ; if,
however, Labour presents an unbroken front, the profiteer,
in a sauve qui peut, will sacrifice his sleeping partners.
After all, they sleep and he is awake ; he is industrially
more useful than they.

When Labour has thoroughly mastered the first and
second lessons of the new economy, its plan of campaign
becomes clarified. In accordance with the first lesson, it
will strike at the wage system by declining to work for
wages — i.e., to sell itself as a commodity. In accordance

THE APPROACH TO THE GUILD 239

with its second lesson, it will unitedly proceed to acquire
for itself all that surplus value which is at present con-
veyed (" convey," the wise it call) into the pockets of
those who sleep and toil not. To achieve this, it must
first reorganise itself. It must call into its councils, by
sound material inducements, the brains of the trades —
the experts, chemists, managers, salesmen, clerks. It
must also bring into its ranks that vast army of un-
organised labour that at present drags it down to the
bare subsistence level. As in the parable of the wedding
feast, it must go out into the highways and hedges and
compel them to come in.

In its campaigns for the abolition of the wage system
and its ensuing absorption of rent, interest and profits,
Labour's first desideratum is an unbroken front — un-
broken in its intellectual left flank, unbroken in its dis-
organised and unskilled right flank. If, however, it can
bring its brain and muscle into one organisation, or, to
be more precise, into one federation of trade organisations,
it will have achieved the form if not the substance of a
Guild. In negotiation with the profiteers, it is essential
that this unbroken front should be rigidly and at all
costs maintained. That is to say, the incipient Guild
must not only carry out all negotiations, but as an organisa-
tion it must receive from the profiteers every penny of
value extracted from rent and sleeping capital. This
is supremely important, because the wage system will con-
tinue until organised labour receives the share of rent and
sleeping capital, not through its individual members, but
as an organisation. The partnership must not be between
private capitalism and its individual employees, but
between private capitalism and the incipient Guild.
Unless this rule be rigorously obeyed, private capitalism
will ride off stronger than ever, as was the case with the
South Metropolitan Gas Company, or the Furness com-
bination on the North-East Coast. It would be difficult

240 NATIONAL GUILDS

to over - emphasise a point so vital as this. It is
fundamental to the new economy that we should cease
to create private capitalists, either great or small. But a
distribution of profits (extracted not from the consumer
but from rent and interest) amongst the individual
employees of a manufacturing or distributing under-
taking, coupled as it would be with security of employ-
ment, would merely be to multiply small capitalists at
an appalling rate. It must also be remembered that
these small capitalists would have been created, not by
their own individual exertions, but by the combined
power of their trade organisation, of which they would
be numerically a small part. It is the organisation
that secured the increase ; to the organisation, there-
fore, it must go. Policy as well as principle dictates
the necessity of this. The profit-sharing employees
would speedily discover that completely organised labour-
would never consent to their holding a privileged economic
position, but they would also discover that, after all,
their permanent interests were allied with the Guild and
not with the profiteers. For without the organisation
at their backs, the profit-sharing employees would find
themselves as liable to dismissal as any other employee.
If they took a too intelligent interest in the company's
balance sheet, their room would soon be preferred to
their company. But with a wealthy and completely
organised Guild behind them their situation would be
reasonably secure.

Now let us attempt to visualise the first stage in the
struggle, after Labour has closed up its ranks. We
will imagine a Guild deputation waiting upon the Chair-
man of the Board and the General Manager of a large
industrial enterprise that divides £100,000 a year amongst
its shareholders.

Chairman. — Well, gentlemen, what can we do for you?
Deputation. — We have come to discuss the affairs of

THE APPROACH TO THE GUILD 241

your company, particularly as they affect your em-
ployees.

Chairman. — Are you dissatisfied with the wages we
pay?

Deputation. — You pay the standard rates, but we
have decided that our men shall no longer work on a
wage basis.

Chairman. — How do you propose to change or
modify it ?

Deputation. — In the first place, the men now upon
your pay-rolls must continue there whether you have
work for them or not.

General Manager. — This is not a benevolent in-
stitution ; we pay your men for their labour, and on your
own showing we pay union rates.

Deputation. — Yes ; hitherto we have sold our labour
as a commodity. You have bought it at market prices,
and out of the difference between what you pay us and
the price you obtain for the finished product you pay
your shareholders £100,000 a year. We have decided
that our Guild must take a more direct interest in your
affairs. We are personally concerned in the conduct of
your business and in the distribution of your profits.
We agree that if we continue to sell our labour as a
commodity, we are not concerned with your profits ;
but we must now put our persons and our labour on a
different footing. For the future, therefore, we propose
to assume a partnership with you, and the first step in
that partnership is absolute security of employment.

General Manager. — Good or bad conduct ?

Deputation. — The Guilds, in their own interest, must
maintain a high level of conduct and skill. If you have
any complaint to make, we will deal with it and if neces-
sary discipline the offender.

General Manager. — Pardon me, but we are the em-
ployers, and we cannot relegate our duties to you.

Deputation. — As we intend to become joint-partners
with you in this business, it follows that we shall be
just as much employers as you are.

Chairman. — On what terms do you propose to assume
partnership ?
16

242 NATIONAL GUILDS

Deputation. — We supply the labour and take half the
profits.

Chairman. — Are you joking ? Do you know that that
would mean cutting our dividends in half ?

Deputation. — We were never more serious. We do
not think your shareholders have earned £100,000 ; so
with your permission we propose to take £50,000. We
shall be glad if you would make the cheque payable to
the Guild.

Chairman. — Good God ! This is rank tyranny.

General Manager. — Aren't we going too fast ? We
might perhaps come to some profit-sharing arrange-
ment with our own employees, but what you ask is pre-
posterous.

Deputation. — We do not consent to any private
arrangement with your own employees ; we will settle
with them. You should not call our proposal preposter-
ous ; we think it very reasonable. In five years from
now, we intend to take another slice of your profits.

Chairman. — Many of our shareholders are widows and
orphans.

Deputation. — For every widow you have amongst
your shareholders we have ten. For every orphan you
have we have twenty. You have preached fertility to
the working classes, you know.

General Manager. — Perhaps you will give me time
to consider whether it would be possible to rearrange our
prices ?

Deputation. — It would only be wasting your time.
We cannot consent to any increase of prices because
that would only victimise our fellow-workers.

General Manager. — I quite see that ; but we do a
very large export trade and we might do something there.

Deputation. — Any general increase in the cost of our
exported goods would only increase the cost either of
foodstuffs or raw material. So far from raising prices,
we prefer that they should be reduced.

Chairman. — At whose cost ?

Deputation. — Rent and interest.

Chairman. — I think I must remind you that I am here
expressly to protect the shareholders' interests.

THE APPROACH TO THE GUILD 243

Deputation. — Would your shareholders rather have
£50,000 or nothing ?

General Manager. — What you propose to do is to
reduce by one-half the capital value of this business.
That is not only a hardship upon the shareholders, about
which you care nothing, but it renders any extension
of the business impossible. How are we to extend our
trade if you cut off the source of our capital supply ?

Deputation. — Come to us and we will arrange it.
You will fifid us, as partners, always glad to co-
operate.

General Manager. — You place us on the horns of a
dilemma. I am here not only to direct the business but
also to protect the shareholders. You now practically
compel me to disregard one or other of my functions.

Deputation. — If you prefer to stand in with the
shareholders, we have one or two men who could efficiently
fill your place. But we have no kind of complaint against
you and we would like you to continue where you are.

Chairman. — I must call an extraordinary meeting of
the shareholders to consider your revolutionary pro-
posals. Until then I can say nothing. I am naturally
distressed that the good relations hitherto existing
between us should be endangered. I must warn you,
gentlemen, that the shareholders will almost certainly
reject your scheme.

Deputation. — By all means call together your share-
holders, but you, of course, understand that we are
quite indifferent what they say or do. Unless our pro-
posals are accepted in a month, we shall close down your
works.

Samuel Johnson always " gave the Whig dogs the
worst of it," and perhaps in this discussion we have
given the exploiters the worst of it. But is there any
serious exaggeration in it, providing the Labour ranks
are solid, and providing also that the Guild deputation
speaks with the full authority not only of the Guild but
of the men particularly affected ?

If we postulate the rough accuracy of this forecast, a

244 NATIONAL GUILDS

number of queries naturally arise. First : What would
the Guilds do with the money thus captured from the
enemy ? How would its members benefit ? We might
reply that as the Guilds, even from their infancy (we
are dealing with infant Guilds), are democratic institu-
tions, the general membership will know how best to
apply its own resources. But there are one or two large
considerations even more easily to be realised. A large
righting fund will obviously be necessary. Suppose, for
instance, in the imaginary case cited, the shareholders
and such retinue as they can command should decide
to fight. Suppose, further, that all the employing classes
in the particular industry, being presumably welded
together (for capital is always easier to organise than
labour), joined in the struggle, then a general strike would
be inevitable. In our chapter, " The Transition from the
Wage System," we have outlined the probable shape the
strike would assume. To carry this large and critical
strike to a successful issue, large means, as well as perfect
organisation and generalship, would be requisite. Until
such time, therefore, as the principle of partnership had
been universally accepted — partnership the alternative
to the wage system — the Guilds must control large
funds. But after partnership of some sort had been
established, large resources would be equally necessary
to reorganise and enlarge the industrial machines. In
the foregoing discussion, our deputation promises the
general manager that he shall not be stinted for money
or its equivalent to enlarge the business. The equivalent
in this instance would doubtless be a suitable arrange-
ment amongst the other guilds for facilities, but money
would also probably be required.

The answer to the second question — how would the
members benefit ? — is easier. Firstly, the members
immediately benefit by obtaining security of tenure in
their jobs. That in itself is of untold benefit : it strikes

THE APPROACH TO THE GUILD 245

at the root of competitive wages. Secondly, every year
a distribution of funds amongst the Guild membership
would be feasible — such distribution to be subjected to
the maintenance of the fighting and development funds
already sketched.

XV

AGRICULTURE AND THE GUILDS

Our libraries are choked with books on agriculture.
Its science, economy and commerce have each pro-
duced regiments, brigades and armies of ponderous,
interesting, dull, light, frivolous, stupid, biased tomes
and books and brochures and tracts. The daily and
weekly press gives endless columns to market reports,
to farmers' meetings, to blight and disease, to all the
current agricultural facts and events. All this array
of printed matter, differing in all else, has one point in
common : the condition of the farm labourer is unani-
mously regarded as static. He remains to-day the
most static of the fifteen million wage slaves of Great
Britain, and being the most static, the most hopeless.
Foolish politicians, worse than a pest of mosquitoes,
drop poisonous nonsense into men's ears leaving with
their stings nothing but irritation. They raise little
festering sores, which they call " single tax," or " small
holdings," or " the minimum wage," or " labourers'
cottages." But they all assume that the farm labourer
is a static quantity, doomed to lie for ever prone upon
the earth, an Icarus who can never again fly. The Labour
Party and the trade unions leave the farm labourer to his
fate. It would pay them handsomely to spend £250,000
on the organisation of the farm labourer ; but Hodge,
the cleverest workman of them all, is consigned by his

urban comrades to chill isolation. In his Cimmerian

246

AGRICULTURE AND THE GUILDS

247

darkness no hand is held out to him — to this man upon
whom in the last resort we depend for our food and our
life. To the landlord, yes ; we pay half his agricultural
rates. To the farmer, yes ; we protect him with a body
of law and custom that makes him almost as independent
as his landlord. We even encourage town-bred wasters
and starvelings to go " back to the land." Kept in the
background of this wild extravaganza, a mere super,
stands Hodge, the man who ploughs and sows and reaps,
who drains our land, cuts and cleans our ditches, trims our
hedges, thatches the cottages, feeds the sheep, tends the
lambs, herds the cattle, trains the horses, whose daughters
milk the cows and feed the chickens, scald the milk.
Whether it be pasture or tillage, it is Hodge who does
the work — does his work faithfully and is forgotten.

Farm work is admittedly highly skilled. Why, then,
is it so poorly paid ? Let us first see the current wages
paid to agricultural labourers. We quote from the
Fifteenth Abstract of Labour Statistics : —

Average

Cash
per Week.

Average
Earnings
per Week.

s. d.

s. d.

Northern Counties

16 5

20 10

Yorkshire, Lancashire and Cheshire

16 3

19 8

North and West Midland Counties

15 2

18 7

South Midland and Eastern Counties

14 4

17 3

South-Eastern Counties

15 10

18 9

South- Western Counties

13 11

17 4

Wales and Monmouthshire

13 9

18 0

Scotland .

14 2

19 7

Ireland

9 3

11 3

How comes it that we pay these starvation wages
to the highly skilled workers of what is still our greatest
and most valuable industry ? We are not concerned
here to trace the history of agriculture through its various
perambulations from hind and serf, through villainage
down to feudalism, and so to sweated wagery. Only

248 NATIONAL GUILDS

one point need be emphasised : agriculture is our most
ancient and continuing of industries. It has out-lived
the Normans, Plantagenets, Tudors and Stuarts ; it
began before Sheffield and Birmingham were heard of ;
Manchester and Glasgow are newcomers. In this long
course of centuries, customs have rooted themselves in
the soil, the whole system has crystallised hard. Not
only has the law of diminishing returns operated but
rent has assimilated the methods of plutocracy. And
Labour has always paid : not the farmer, who still
prospers ; not the agent, who still drives his gig ; Hodge
has paid in poverty and rheumatism, with the workhouse
as his sanctuary.

The free and easy importation of foodstuffs into
Great Britain is apt to blind our eyes to the fundamental
value of an efficient agricultural industry at home.
With us it has become so much a matter of course that
it requires an effort of imagination to visualise our
national life without it. These lines are being written
in a little town that looks out on the Caribbean Sea.
It has a population of 14,000, of whom perhaps 350
are pure white, the rest a medley of aboriginals and
negroes. We are hemmed in on all sides by impenetrable
forest and mangrove swamps. The people depend almost
entirely upon the sale of mahogany, which drifts down
the various rivers in rafts of logs. It is Christmas Day
and the hiring season for mahogany cutters, who sign
on for a year and get months of wages in advance. They
are busy spending it on rum. Down the small unpaved
streets roll drunken negroes, caribs, coolies, and half-
breeds. The gaol close by is full of men who have
inflicted grave personal injury during drunken bouts.
For breakfast this morning we drank tea imported from
England, canned milk imported from New York, canned
tongue imported from Chicago, packed eggs imported
from New Orleans, marmalade imported from London.

AGRICULTURE AND THE GUILDS 249

To-night, at dinner, we shall eat canned pork imported
from Chicago ; butter, potatoes, beans, peas, turnips, rice,
coffee imported from New Orleans, Mobile, or New
York. The only food obtained locally is fish. Yet
the land is as rich as any in the world. A few miles
inland good coffee berries lie rotting on the ground,
sugar canes grow for the asking, there is rich pasture
for cattle. Rice grows of such quality that some years
ago the Japanese Government ordered 250 sacks as an
example and a sample. They might as well have asked
for 25,000 sacks. Thus we are all paying through the
nose for agricultural products most of which could be
grown in the country.

Why should this little community be victimised by
exorbitant charges imposed upon it by the exporters
of America and Great Britain ? Because there is no
agricultural industry. But why ? Because there is
no labour available. The foundation of agriculture, as
of every industry, is labour. The Government is scour-
ing the world for labour, offering wages to negroes, to
coolies, even to Sikhs and Afghans, far in excess of the
wages paid to the agricultural labourer of proud Britain.

It is here that we hit upon the paradox of agricultural
conditions in Great Britain : the industry is economically
susceptible of Guild organisation, but the labourers are
unorganised and therefore insusceptible.

We remarked that it would pay the trade unions to
spend £250,000 on the organisation of the agricultural
workers of Great Britain. In 1910, the accumulated
funds of the unions amounted to £5,121,529, repre-
senting £3, 1 os. 2d. per member. £250,000 is roughly
one-twentieth of this amount, or 3s. 6d. per member.
The low agricultural wage bears down urban wages in
two ways : (i) The prevailing rate of wages over a large
area influences the wages paid in the towns in that
area ; (ii) the low agricultural wage drives young men

250 NATIONAL GUILDS

into the towns and so intensifies the competitive wage
rate. Three shillings and sixpence is less than a penny
per week. Would not urban wages be raised a good
many pennies per week if the rural worker were so circum-
stanced that he need not throw himself upon the wage
market ? Certain it is that if the trade unions do not
seriously undertake the organisation of agricultural labour
it will become the urgent duty of the Guilds to do it.

Certainly of the Guilds, for the control and supply of
food is surely the most important function of such large
economic bodies as the Guilds are destined to be. They
would be criminally foolish to trust their very lives to the
mercy of capitalistic packers in Chicago or to wheat
thieves in any part of the world. (Probably by that
time wheat-corners will be engineered in Canada.) But
there are other reasons : the right distribution of the
land and its economic exploitation necessarily flow out
of an industrial revolution. With the Guilds possessing
a monopoly of labour and refusing to sell it as a com-
modity for wages, the great landed estates will infallibly
be broken up, and land as an " amenity " will lose all
its meaning. It will then become the duty of the Guilds
to cultivate the land or otherwise put it to economic
use. Inasmuch as the Guilds will control the consump-
tion of food-stuffs, it follows that they must ultimately
control their production. Industrial Britain covered by
a net-work of Guild organisation contemporary with an
effete land system worked by wage slavery would be a
contradiction in terms : the Guild members would be
eating food produced under a regime against which they
had successfully revolted. Food so produced would surely
stick in their throats.

It is certain that our land system has outlived its use-
fulness ; it can go no further. In 1897, 47,869,000 acres
were under cultivation. Notwithstanding the growing
demand for food-stuffs by an increasing population,

AGRICULTURE AND THE GUILDS 251

the acreage in 1911 fell to 46,929,000 acres. We are
told that tillage has given place to pasturage as more
profitable. It is not true. In 1897 there were 2,070,000
horses used solely for agriculture, mares kept solely
for breeding and unbroken horses. In 1911 the number
was 2,033,000. In the same period there was only a
slight rise in cattle, 11,004,000 to 11,866,000. Sheep fell
from 30,567,000 to 30,480,000. Pigs went up from
3,719,000 to 4,250,000. Probably the change in the
Irish land system would explain that item. Now let
us look at the crop output. Wheat advanced from
56,295,774 to 64,313,456 bushels during the period
under review. But this was an abnormal year, for in
1910 it was 56,593,432. In nine out of these fifteen
years the crop was under 60,000,000 ; in 1904 it was
37,919,781 bushels. Barley has a more sorry tale to
tell. In 1897, 72,613,455 bushels ; in 1911, 57,803,216.
Oats fell from 163,556,156 bushels to 162,933,336. Beans
and peas fell from 11,900,157 to 11,447,112. Potatoes
were more hopeful ; they rose from 4,106,609 tons to
7,520,168 tons. Per contra, turnips, swedes, and man-
golds went down from 37,164,673 tons to 30,885,112.
Hay fell from 14,042,703 to 11,656,471. Hops also
fell from 411,086 cwt. to 328,023. Of course all these
corn and green crops fluctuate according to the season.
The only significance of these figures is that our agri-
cultural industry is stationary when it ought to be
keeping pace with the growth of the population.

There are a thousand technical aspects of this pro-
blem into which we need not enter ; indeed, they are
irrelevant, because the problem for the Guilds is to
secure the monopoly of labour, and therefore our task
is to consider the conditions that govern wage slavery
in agriculture. The Guild point of approach to the
agricultural problem is first to organise the labourers
and then bring them into line with modern practice.

252 NATIONAL GUILDS

Of course, we know that the farm labourer is intensely
conservative ; on the wages he receives how could he be
anything else ? Of course, we know that education
must play a fruitful part in building up a fruitful agri-
cultural industry ; but of what use is education to under-
paid, under-fed, badly clothed agricultural labourers,
whose only books are the Bible, Moody and Sankey's
Hymns, and Old Moore's Almanack ? All this we
know ; nevertheless, the first step is not improved agri-
cultural methods, not a new incidence of taxation, not
improved housing conditions, but the organisation into
an effective trade union of the farm labourers.

In 1881 there were 2,574,031 persons engaged in
agriculture, including woodmen, gardeners (domestic
and non-domestic), nurserymen, seedsmen, and florists.
In 1 90 1 the figures were 2,262,454 — a decline of over
300,000 agricultural workers in twenty years. But in
the two decades the population of the United Kingdom
rose from 34,884,848 to 41,458,721 — an increase of 20 per
cent. Having regard to this natural increase in popula-
tion is it too much to assume that during these twenty
years agriculture has dumped upon the competitive wage
market 750,000 men, women, and children ? We must
not only count the 300,000 who actually left agriculture,
but also allow for the natural increase upon an agri-
cultural population of 5,500,000 persons, young and old —
an increase that did not go into agriculture because its
conditions forbade, and who accordingly left the country
and either emigrated or crowded into the towns ; 750,000
in twenty years is 37,500 annually. Can the trade
unions afford to let this continuous stream of competitive
wagery continue indefinitely ? The older men who
are intrigued with politics doubtless think that some
hocus-pocus in the way of single tax or small holdings
will stanch the flow. The political labourist is fool
enough to believe anything, but perhaps the younger

AGRICULTURE AND THE GUILDS 253

school of Labour leaders, men who have discovered the
political illusion, will understand that the first charge
on economic emancipation is ceaseless and effective
organisation.

Now is there any reason under the sun why we should
continue to pay the landlords £200,000,000 a year for
mismanaging and generally muddling land and agri-
culture ? Would it not be cheaper for the nation to
purchase the land outright on the basis of annuities
for two lives, and to hand over the whole business to
an Agricultural Guild ? By this means agriculture would
become an integral part of our national economic pro-
cesses. To-day it is largely an excrescence. If we
cannot get potatoes, or butter, or what you please, from
our farming folk, we shrug our shoulders and buy from
Denmark, Holland, or France. Little we reck that in
adopting this cynical attitude towards agriculture, we
are gradually upsetting the counterpoise between town
and country that makes not only for national health,
but for national safety. We will say nothing of the
psychological or even the spiritual influence of the " good,
gigantic smile of the cold brown earth," although it is a
factor of supreme moment. But look at France. A large
army of Frenchmen habitually divide their time between
industry and agriculture. The result is that there is a
natural ebb and flow between town and country that
makes for the economic stability of the French nation.
Would not the same ebb and flow, the same elasticity of
movement, beginning at harvest time, prove profoundly
health-giving and economically sound in Great Britain ?
It is certain that the existing commercial system is
utterly unfitted for and incapable of any such large
arrangement in Great Britain. In France, industry
and agriculture are married ; in Great Britain they are
divorced. But under Guild organisation what could be
easier and jollier ? Does it strain our imagination to

254 NATIONAL GUILDS

see the Agricultural Guild calling upon the other Guilds
at seed time or harvesting for 100,000 men ? Would
not such a scheme of co-ordinated labour bring us
appreciably back to those great and solemn festivals
that mankind from its infancy has arranged to celebrate
the gift of creation, of fertility ?

We must not, however, permit the joyous vision of
a rejuvenated agriculture to blind our eyes to existing
realities. The complexities of land tenure, the vast
complications of the agricultural market, the vested
interests that have grown on and about agriculture in
the market towns — you will find the gombeen man in
England, Scotland and Wales scarcely different from
his prototype in Ireland — render any quick solution of
the problem impossible. This at least is true : the
Guilds in approaching the problem through the gateway
of labour and the abolition of wagery will hold the key
to the position. The first lesson to be learned is that
Hodge economically emancipated will be Hodge spiritu-
ally, mentally and technically transformed.

XVI

THE STATE AND THE GUILDS

Although not unmindful of spiritual values, we have
hitherto necessarily been mainly confined to a considera-
tion of the new industrial society, the sequential result
of wage abolition. The specific determination of the
proletariat to cease selling its labour as a commodity is
primarily a spiritual change ; but its spiritual significance
cannot be appreciated until we have realised its material
concrete setting. This task we have completed so far
as it is possible to us. We might conclude our argument
precisely at this point, leaving to each reader his own
conclusions as to the effect of these material changes upon
the spiritual life of the nation. But we must be held
responsible for the outcome, spiritual and material,
of our own conception of a society reorganised upon our
principles. Nor do we desire to shirk it. On the con-
trary, we are ready to proclaim that reconstructed society
will avail nothing unless it produce better citizens. The
economies effected in the production and distribution
of wealth by the elimination of rent, interest and profits
are obviously of incalculable social value, but that value
must express itself in citizenship even more than in Guild
membership. We have now reached the point where
we discover that these two functions may diverge in the
affections and person of the worker. As a citizen he may
prefer this or that policy ; as a Guildsman his business
is to concentrate upon wealth production and distribu-

256 NATIONAL GUILDS

tion. For the first time in the history of mankind he
will clearly understand that nations, like men, do not
live by bread alone. The intermixture of spiritual with
economic considerations which now paralyses every
State action will be, in form certainly and largely in sub-
stance, ended. By transferring the conduct of material
affairs to the Guilds (not only wealth production but the
responsibility for maintenance in sickness, accident and
old age) statesmanship is left free to grapple with its own
problems, undisturbed and undeterred by class con-
siderations and unworthy economic pressure. This state-
ment does not invalidate our oft-repeated dictum that
economic power dominates political power. No nation
will continuously weaken itself economically in the
pursuit of a purely political policy — that is, so far as
industrial policy can be differentiated from political —
but in providing the State exchequer with the equivalent
of economic rent (the annual charge for the Guild charters)
we secure its independence so far as it can rely upon the
support of the working population, acting not as Guilds-
men but as citizens. As the Guildsman on due occasion
remembers that he is a citizen and has duties apart from
his Guild, so also on such occasion will the Guilds also
realise that the State has functions and duties that cut
clean across all lines of industrial organisation. ,

We may more easily grasp the functional differences
between the State and the Guilds if we try to visualise
the Guild organisation at work. Picture then a Guild
Congress representatively composed of the living
elements of Guild life — administrators, experts, the
working rank and file — entrusted with the conduct and
responsibility of national industry. Sitting as it must
do in permanent session, it becomes the directorate of
industry. Every Guild and every grade of every Guild
is there represented, and to it are referred all the thousands
of vexed questions that puzzle the industrial adminis-

THE STATE AND THE GUILDS 257

trator, the chemist, the inventor, the manual worker.
We may be sure that this Congress will of necessity con-
centrate upon its own concerns. It will develop its own
type, just as to-day the trade unions develop a particular
type, or the Chambers of Commerce or the various
technical associations — civil and mechanical engineers,
chemists, iron and steel scientists, textile experts, and
others. Imagine all these called into the councils of the
Guild Congress, all intent upon the production not only
of quantity, but of quality — indeed, mainly of quality,
and all equally intent upon the rescue of labour from use-
less toil and its application to useful work. Out of this
Congress would also doubtless develop men capable of
high statesmanship. They would naturally be entrusted
with all negotiations with the State and, backed by econo-
mic power, they would be listened to with something more
than politeness. But it is hardly to be expected that the
Guild statesmen would all speak with one accord. If they
did they could almost certainly impose their will. We
may reasonably assume that different schools of thought
would spring up in the Guild Congress just as to-day
(although more indefinitely) differing tendencies can
be observed in the Trades Union Congress. Broadly
stated, however, we may be certain that the men who
go to the Guild Congress will speedily find themselves
immersed in industrial problems and will not greatly
concern themselves with affairs of State. In this con-
nection, it is interesting to observe that the Co-operative
movement, transacting £100,000,000 of business every
year, is managed by men whose names are almost un-
known to the public. They concern themselves with
their own affairs, although doubtless each man plays
some part in the political life of his own locality. How-
ever forceful and influential the Co-operative leaders
may be in their own economic environment, they are
extraordinarily unobtrusive in political affairs. This
17

258 NATIONAL GUILDS

does not surprise us, because we know something of the
fascination that large industrial affairs exercise upon
the minds and imaginations of those engaged upon them.
And we doubt not that such will be the case with the
vast majority of Guild administrators. It would, there-
fore, be a profound blunder to assume any inevitable
or likely collision between the organised Guilds and the
organised State. We can easily imagine that the Guild
administrators will be content to be left alone to their
responsible tasks, a different man, with a different tem-
perament, being attracted to politics. It is no small
part of our case, that when we have successfully dis-
entangled the economic from the political functions,
we shall evolve a purer form of politics, with politicians
far superior to the type now prevailing.

The problem, then, of the modern State is to give
free play in their appropriate environment to the econo-
mic and political forces respectively. We have seen
that they do not coalesce ; that where they are inter-
mixed, they not only tend to nullify each other, but
to adulterate those finer passions and ambitions of man-
kind that ought properly to find expression and satis-
faction in the political sphere. It is a quality inherent in
private capitalism to dominate and mould State policy
to its own ends, precisely as it exploits labour. If the
interests of private capitalism were synonymous with
those of the community as a whole this danger might
be theoretical rather than real. But we know that the
assumption of unity of interest between private capital-
ism and the State degrades the standard of national
life and stifles all aspirations towards that spiritual in-
fluence which is the true mark of national greatness.
But, whilst the separation of the political and economic
functions gives equipoise and stability to the State,
nevertheless the policy and destiny of the State, in the
final analysis, depend upon its economic processes being

THE STATE AND THE GUILDS 259

healthy and equitable. For this reason amongst others,
the State, acting in the interests of citizenship as distinct
from Guild membership, must be adequately represented
upon the governing bodies of the Guilds.

With the achievement of a healthy national economy,
the problem of statesmanship will be to transmute the
economic power thus obtained into the highest possible
social and spiritual voltage. Before we can understand
this we must distinguish the two sets of functions. There
are those who take a tragically short view of statesman-
ship. They assert that the organisation of the Guilds
(or some similar bodies not as yet defined) suffices : that,
once the workers are in complete command of the
economic processes, they can manage affairs of State, as
though these were a mere item in the activities of the Guild
Congress. Let us, then, after allocating every economic
activity to the Guilds, consider what remains in the
political sphere. Its problems will hinge upon one or
other of the following : (i) Law ; (ii) Medicine ; (iii)
The Army, Navy and Police ; (iv) Foreign relations ;
(v) Education ; (vi) Central and Local Government
and Administration. To these we might add the Church,
which, by the way, is a Guild.

(i) Probably no man living can forecast the future of
law and the legal profession. It is common knowledge
that lawyers are the most securely entrenched trade
union in the world. But the most remunerative legal
practice is in the protection and administration of
private property — chancery work, conveyancing, joint-
stock law, patents. In short, wherever the law gives
sanction to private exploitation, there will the lawyers
be gathered together. The abolition of wagery ipso
facto abolishes exploitation and so renders nugatory all
that vast body of law relating to rent, interest, and
profits. In addition, we are surely not romantic in as-
suming that a large part of criminal practice will also

260 NATIONAL GUILDS

go. We may reasonably assume that crime that springs
out of poverty will largely become a memory. Further,
such criminality as remains will be treated far more
scientifically than to-day. Still more difficult is it to
foresee how far the Guilds will govern themselves by
standing orders, internal rules and regulations without
legal registration. Industrial law to-day mainly relates
to master and servant (abolished obviously with wagery),
factory laws relating to sanitation, hours of labour,
employment of women and young persons, fencing of
machinery, and the like (clearly the affair of each Guild),
sickness, accident and old age (by hypothesis transferred
to the Guilds) It may or may not be that the rights
of individual members of the Guild are given legal
sanction ; on such a point it would be futile to speculate.
It is evident, however, that a considerable proportion
of existing legal occupations would lapse. But against
this we may fairly set the fact that the legal mind has its
value in any community, and whilst the demand for it
would necessarily change, the legal habit would prove its
usefulness. It is to-day customary for large corporations,
notably the railways, to keep their own lawyers on the
premises, so to speak. Perhaps in this may be seen the
germ of the lawyer's future employment. But so far
as the State is concerned, it is certain that it will still
be concerned with law — law-making and law-administer-
ing.

(ii) The practice of medicine differs in many ways
from that of the law. It pervades the individual and
family life from birth to death. It is true that so also
does law, but not in the same intimate sense. It does
not depend upon any particular legal interpretation of
property ; its interests are not bound up with property,
but rather with the person. Probably the doctors will
be among the first to constitute themselves into a Guild ;
but as preventive medicine depends for its success both

THE STATE AND THE GUILDS 261

upon law and administration, the Medical Guild will
become responsible to the State, and not to the Guild
Congress.

(iii) Without discussing the tangled problem of mili-
tarism, this at least may be affirmed : the strength and
organisation of our military and naval forces are neces-
sarily dependent upon State policy. We may further
assume that our wars of aggression in the interests of
the profiteers will automatically cease. But there is
always the danger that the profiteering elements in
States not developed to the Guild stage may force war
upon us in their own protection. We do not expect
this, because we believe that the way out for other
nations threatened by our superior Guild organisation
(from which the handicap of rent, interest and profits
has been removed), will be to follow our example.
Superior economic methods have inevitably won in the
long run, whether in civilisation or savagery. It is in-
herent in human association. So long then as the main-
tenance of an army and navy be deemed (rightly or
wrongly) necessary, and bearing in mind that it is finally
determined by State policy, it follows that the State,
acting for its citizens, must be the instrument by which
that policy is declared.

(iv) Nor can it be doubted that our relations with
other nations will become more intimate, more complex,
perhaps more difficult than under existing dynastic condi-
tions. In a previous chapter (" International Economy
and the Wage System ") we have outlined the future of
the Consular Service under the Guild organisation of
society. Problems of international exchange, backed
by State credit, must become the daily work of the con-
suls, who would be the representatives of the State and
through the State of the Guilds. In every consular
office, Guild representatives would buy and sell, trans-
forming the value of the labour units (the guilder) into

262 NATIONAL GUILDS

whatever may be the currency of the country in which
they are situated. When we remember that our foreign
trade exceeds £1,000,000,000 annually we may glimpse
the future of our national economic diplomacy. It
is not improbable that the Consular Service may be
transferred to the existing Board of Trade, whose
functions would be so enlarged as to make it the channel
of communications between the State and the Guilds.
But we must not assume that international exchange
will be the only duty of our diplomatic machinery.
Endless problems loom up before us even as we write
— subject races, tropical medicine, the monstrous prob-
lem of the white and yellow races, race intermixture,
tribal government, spheres of influence, there is literally
no end to them. Again, then, we find in diplomacy one
of the most important of State functions. And upon
right and informed diplomacy depends in large degree
our influence upon the comity of the nations.

(v) The subject of education is too large to be
discussed cursorily. A chapter must be devoted
to it.

(vi) The administration of central and local govern-
ment is obviously State business, because it is common
not only to all the Guilds as corporations, but to their
members as citizens. Central and local policy must
be conditioned by the liberality of the budget and the
spiritual insight of statesmen. We have already argued
that the State must be maintained by levying precepts
upon the Guilds for the annual amount budgeted. This
amount is what we have roughly described as the
equivalent of economic rent. Not the least of State duties
will be the care of those remnants of the human wastage
now thrown upon the scrap-heap by our present industrial
system. These unemployable members of society must
be regarded as victims and not as criminals. We make
no doubt that they will be so regarded by a community

THE STATE AND THE GUILDS 263

socially so cultured as to form Guilds. In regard to local
government, it is certain that it must play a large part
in providing for the comfort and the amenities of an
economically emancipated people. It must be finally
subject, not to the Guild Congress, but to Parliament.

It would be easy, of course, to enlarge the list of the
functions and duties of the State as distinct from the
Guilds. It is only necessary here to mention enough to
prove how disastrous it would be to rely only upon the
Guilds in the making and administering of the law. We
do not forget that many duties are on the borderland
between State and Guild. There is, for example, the
Postal and Telegraph Service. Are the postal workers
properly members of the Civil Service, or are they more
naturally in fellowship with the Guilds ? Do they really
belong to the Transit Guild, or ought they to be kept
as a separate service under the command of the Post-
master-General ? We would certainly argue that they
are civil servants. But if they possess a monopoly of
the labour required for this service, it is they and not
the Government who will dictate their status.

Broadly stated, these are the reasons for our belief
that the State, with its Government, its Parliament, and
its civil and military machinery must remain indepen-
dent of the Guild Congress. Certainly independent ;
probably even supreme. That will ultimately depend
upon the moral powers and cultural capacity of the
nation's citizens. Having solved the problem of wealth
production, exchange and distribution, we may rest
assured that a people thus materially emancipated
will move up the spiral of human progress, and that out
of that part of this movement will grow a purified political
system, in which great statesmanship will play its part.

XVII

EDUCATION AND THE GUILDS

Nobody acquainted with the system of education pre-
vailing to-day can doubt either that we have reason
to be profoundly dissatisfied with it, or that for the
present no one appears to be able to make a constructive
suggestion. The blame for both conditions has been
laid now upon the teachers, then upon the department,
now upon the system, and then upon the curriculum.
But in truth, while in a measure everybody is to blame,
the real fault lies in the same error we have found to be
underlying our political system generally, the association
of economic with political ends, and the confusion of
civic with industrial functions.

More clearly in our educational system, perhaps,
than anywhere else are the fruits of this evil relation
visible ; for even while we write, tjie controversy, first
begun in the persons of Herbert Spencer on the one side
and Matthew Arnold on the other, still rages with vary-
ing fortunes in the direction, at one period and for a
little while, of a humane and civic ideal, and at another
in the direction of the technical and scientific. What,
we are asked for six months of the year, can the end of
education be but to produce the well-balanced mind,
the all-round citizen, the man of the world ? And what,
for the other six months we are asked, is the value to
himself or to the State of a citizen untrained in any

craft and unable therefore to employ the complex in-

364

EDUCATION AND THE GUILDS 265

strument which modern society puts into his hands ?
It is indeed a controversy in which judgment must
necessarily sit suspended, for each side not only defends
itself with complete reason but destroys the other with
equal reason. To the plea that education is for life in
general, the technical instructor can reply that life in
general is impossible without technical skill ; and to
his plea that technical instruction to be effective
must be begun early in life the humanist can reply that,
society being no longer a stable system of castes and
crafts, an early instruction in any technique whatever
may actually unfit our youth for the occupation to which
they may be called.

Thus envisaged, the controversy both theoretically
and practically is seen to be endless ; and since, for the
present, no way out has been suggested, we appear to
be doomed to oscillate in our national education between
the humanistic and the technical, between the civic and
the industrial, between the literary and the commercial ;
with small satisfaction to either party, and with disaster
in the end to the nation as a whole.

In the proposals we have been outlining in our former
chapters, we have, however, come upon a principle,
the application of which to education promises to be
as fruitful as its application to politics and industry in
general. It will be seen that our aim has been to
separate the subordinate function of industry (sub-
ordinate but indispensable) from the more general
functions of the body politic ; and this we have sug-
gested might be best effected by the State delegating
by charter to the producing Guilds the power and
therewith the responsibility of national industry.

But if this apportionment of the duties as between
the State as a whole and the Guilds as autonomous but
limited functions of itself, is possible, the same principle
carried into the sphere of education would equally well

266 NATIONAL GUILDS

determine the relative provinces of civic and technical
education. For it is plain that as duly authorised and
charged with the responsibility of skilled industry, the
Guilds at the same time would become responsible for
the technical training necessary in each of their crafts.
And while they would thus be responsible for technical
training as such, the State as a whole would have the
duty of civic education in general.

This, then, is our solution of the existing difficulty.
To each of the Guilds we would give the duty of pro-
viding, not only for its existing but for its future mem-
bers, the means of technical training necessary to the
welfare of the craft ; while to the State we would leave
the duty of providing for its future citizens by means
of national education the training necessary for citizen-
ship.

That this plan is at once practical, desirable, and
desired, we do not think that much reflection is necessary
to prove. Proofs of the fact that it is desired are to be
found in the evidences already existing, of a profound
and irreconcilable difference of opinion between the
supporters of the two contending schools of thought.
The humanistic, we may say, will never be content to be
subordinated in their ideals to the technical ; and on the
other hand, less and less as time goes on will the technical
consent to be subordinated to the humanistic. Thus
the elimination from each of the other is desired, and
desired equally by both parties. On other grounds
also the separation we speak of is desired, as may be seen
in the attempts, on the one side, to restore apprenticeship
and, on the other, to extend the age of the purely literary
education. What, in effect, dictates these contrary
purposes but the instinctive recognition that each is
right in its own place, and that only together are they
incompatible ? Still more clearly the revival of the
idea of apprenticeship demonstrates the desire existing

EDUCATION AND THE GUILDS 267

in the practical mind to recover for the crafts of to-
day the traditional skill that individual apprenticeship
secured for a previous generation. We conclude, with-
out further examination, that the independence of each
of the two areas of education is desired by all
men.

That it would be proved desirable and a wise national
course to pursue follows, we think, from the general
principles we have already examined. It is impossible
to doubt the duty of the State to its individual members
and its future citizens. It is equally impossible to
doubt that the humane education thus postulated is
incompatible with the ideal pursued by the same authority
of a technical education as well. We speak from a long
and wide experience when we declare that with two ends
in view no authority, State or private, can fulfil one or
the other with any satisfaction of either. Is it the case
that under the prevailing compromise of contrary ideals,
the education provided by the State is satisfactory to
the humanist ? It is not. But then it must be satis-
factory to the technical manufacturer and the commercial
man ? But equally it is not. On the contrary, both
parties complain, and each with excellent reason ; and
the cause is to be found, though neither knows it, in the
double object pursued by an administration competent
in one but not in two.

Remains now the practicability of the course we have
suggested. In the first place, let us say explicitly that
for the present we have no designs upon the system of
education beyond the existing elementary and secondary
limits. It may be, and it probably will be the case,
that as the bases of society are changed the super-
structure (the whole being organic) will change with
it. From elementary to secondary and from secondary
to university the stages will not be divided by almost
impassable barriers, each to be surmounted only by

268 NATIONAL GUILDS

favour and fortune. The formation of the Teachers'
Register, the creation of a single profession, that in-
cludes the don with the pupil teacher is, in fact, a
recent symbol of the future unity of education we must
needs all have in mind. But our modest purpose at
this stage is to throw upon the State the duty of a
minimum of civic education only, such as must neces-
sarily be supposed to qualify a youth to become in the
full sense a citizen of the nation. And this minimum,
we are disposed to think, might be best assured by the
State charging the National Union of Teachers with
the powers necessary and the consequent responsibility
to society for carrying it out. It will be seen that in
this respect our suggestions are at once conservative
and revolutionary. They are conservative in the sense
that they would restore the intention of national educa-
tion to its original definition when popular education
was first introduced — that of educating children for
worthy citizenship. And it is revolutionary in these
two respects, that it would abolish from our national
schools all the technical elements that have pushed
their way in ; and vest in the teachers as a body the
delegated duties now entrusted to the State Department
and the teachers individually. Surely this, we say, is
neither impossible to imagine nor difficult to carry
out. Whoever speculates on the future of the Teachers'
Union must realise that, as it grows in power by its
numbers, it will also grow in experience and in the
ambitions experience brings. It may not be the fact
to-day that the Teachers' Union is equal to the task of
demanding or even of accepting the position of a Chartered
Guild for the training of young citizens ; but he would
be lacking in the historic as well as in the contemporary
sense of values who denied that this future is most prob-
able. And what is there practically against it ? It is the
business of the Army to make war and of the Navy to

EDUCATION AND THE GUILDS 269

defend our coasts and sea-borne commerce. These
commissions necessarily carry with them the delegation
of vast powers and almost of autonomous authority.
Yet they are discharged by and with the authority of the
State, and to instructions generally but not particularly
given. If, in a panic-ridden age like ours, such terrible
powers may be given to these professions and without
fear, the gift to the teaching profession of the power to
carry out the national instructions in the matter of
education is no less possible and practicable. We believe,
indeed, that no body of people in the State are better
fitted to be entrusted with the duties of a minimum civic
education than the Teachers' Union. Certainly no State
Department, even though co-operating with local
authorities hand in glove, is equal to the task as the
Teachers' Union is equal to it. For at best the authori-
ties are two removes from the actual problem of the
child ; while the Teachers' Union is immediately and
daily in contact with it. On the principle that they are
best fitted to control their services who discharge them,
the Teachers' Union is plainly marked out as the sub-
ordinate partner of the State to preside over the whole
field of national civic education.

Turning now to consider the practicability of dele-
gating technical education to the Guilds, we must observe
at once that the question has in principle been long
settled. Despairing of ever securing through the civic
authorities the special schools necessary to their trade
(and especially in the absence of the old apprenticeship
system), the skilled trades, mainly by means of their
masters, have almost without exception each established
for themselves technical schools, ranging from technical
skill simply to the highest training in applied science. It
is true that, owing partly to lack of collective foresight,
partly to the hope still entertained that, after all, the civic
authorities may do it for them, none of the skilled trades

270 NATIONAL GUILDS

has yet organised systematically its own training over
the whole of the country and industry ; and, what is
more, the present obstacles to this systematisation are
insurmountable since, under a competitive system, all
the employers in any industry cannot equally profit by a
collective system of endowed technical training ; and,
again, civic authorities will never, as we say, provide it
wholly for them. But on the hypothesis we have ad-
vanced that each industry is a collective monopoly,
responsible for its craft, wherever and whenever practised,
its interest in establishing a system of training for its
recruits is obvious ; and the necessity would become all
the more urgent provided, as we suggest, that the
curricula of the national schools be cleared of technical
and commercial instruction. And, pursuing our principle,
who, in fact, would be better fitted to provide and to
direct the craft schools than the Guilds practising the
crafts and responsible for them ? If profiteering masters,
at war with each other and with their employees, have
nevertheless been able to supply thought and funds for
the establishment of technical schools, even though only
here and there, what might we not expect from a Guild,
including in a single group the scientific, the technical,
and the skilled men all in co-operation, and collectively
responsible for their crafts present and future ? We
imagine, indeed, and with confidence, that time will
prove us right, that the technical schools of the future
Guilds will be one of the chief prides of the craftsmen
of the future. We shall see them devoting their funds,
their intelligence and their emulation to the creation of
a system of special schools, designed at once to attract
recruits as they leave the civic schools, and to train
them to the greater glory of the craft they have chosen.
For in no penurious or compromising fashion will a
Guild set about the work of transforming its occupa-
tion into a craft and its craft into an art. On the

EDUCATION AND THE GUILDS 271

contrary, as Morris foresaw, the spirit of the Guild will
make of workmanship a sacrificial service ; and all
the more readily if the State supplies to its hand
the youths trained in the humanities in the civic
schools.

XVIII

CONCLUSION

It cannot now be doubted that the commodity theory of
labour is at the root of present discontent. However
this theory may be sincerely held by profiteers and econo-
mists, it remains a trick by which labour is defrauded.
Its historical justification we leave to others ; the best
that can be said of it is that it is a good custom that
has corrupted the world. The entrepreneur has doubtless
had his function in the earlier days of the industrial
system ; perhaps he has played a necessary part in the
economic integration of society. But when the psycho-
logical moment arrives, when the vast mass of the wage-
earners perceive the inherent dishonesty of a system
that robs them of two-thirds of the value of their labour,
from that moment not only is that system doomed, but
its destruction is at hand. And it follows that its
essential dishonesty bears in its train ethical evils not
easily measured. We may affirm with good reason that
the unrest that now stirs the pool of the capitalist
Siloam is an unconscious protest against the wage
system that condemns the great majority of mankind to
economic servitude and spiritual prostration. But this
protest only becomes reasonable and irresistible when
the workers consciously base their claim upon the fund-
amental fact that to sell labour as a commodity is a
degradation ; that to reduce the untiring efforts of

mankind to the level of cotton and coal is a crime and a

27a

CONCLUSION 273

sin against the Holy Ghost. The work, then, that lies
immediately before us is to impress the wage slave with
the modern analysis of wagery. Herein does the coming
revolution differ in essence from all previous revolts
and insurrections. They appealed to new Caesars ; they
were political, or racial, or national ; the new revolu-
tion must be based upon an aesthetic and ethical proposi-
tion— the certain demonstration that the value and
significance of human labour are not in the same category
as the inanimate elements that go into wealth production.
A commodity is something that has exchange value ;
labour is priceless, and, therefore, its value cannot be
expressed. To give it any parity with copper or timber
is to reduce it to a chattel — in practice, although not in
form, to chattel slavery. It is a curious comment upon
slavery, or even peonage, that the owners did not
distinguish between the bodies and the labour of their
slaves. In their pseudo-patriarchal way, they believed
that the human body and the labour residing in it were
one and indivisible. The modern industrialist disen-
tangled the one from the other. He put a value upon
the labour and, so long as he could procure it in abun-
dance, bodies might rot and souls be damned, so far
as he was concerned. Could he extract labour from the
dead, then corpses would be at a premium, and the
embalming trade supplant medicine and surgery. The
release of the human body from the economic demand
for the labour inherent in it marked the beginning of
political democracy. The return of labour to its natural
habitat in the human body will mark the beginning of
an economic democracy. When the labour of the worker
once again becomes part of himself, then wherever his
labour goes he will go too, entering into and owning
its fruits. It will have become a vital part of himself —
the instrument of his destiny ; it will have ceased to be
a commodity.

274 NATIONAL GUILDS

We must not allow the comparative simplicity of our
analysis of the wage system to blind us to its rooted
acceptance by the majority of mankind. It may seem
monstrous that such should be the case, but we must
remember that the social conscience has by long usage
become inured to it. The Christian Churches, notably
the English Nonconformists, are now betraying deep
concern at the dehumanising effects of wagery. They
have spent the last twenty years in proclaiming
nostrums to cure the thousand evils that palpably spring
out of it. Yet nowhere, so far as we know, have the
fathers and elders of these Christian communities de-
nounced the wage system and called for its abolition.
Amelioration of wage conditions, yes ; wage abolition,
no. We need not impute bad faith because of this ;
the simple truth is that they live upon wagery as did
their fathers before them. Even to the end there were
Christian leaders who defended slavery. It is only too
evident that the conscience of those who live by exploit-
ing the conscience is blunted and insensitive to the
wickedness of wagery. Nor are signs wanting that those
who denounce wagery and seek its abolition will en-
counter the denunciation of the Christian leaders. We
mention these facts, not in bitterness, but rather to show
that men may, and do, fail to see the simple solution
of social horrors. The complexities of modern life con-
fuse and unnerve them. The struggle for the rejection
of the prevailing belief that labour is a commodity will
be both prolonged and bitter. Necessarily so ; for, apart
altogether from the fact that the social conscience yet
slumbers, wage abolition ipso facto carries in its train
the abolition of rent, interest and profits.

We shall have failed in our purpose if we have not
carried our readers with us in this : that the fund, out of
which rent, interest and profits are paid, disappears
automatically when labour can no longer be procured as

CONCLUSION 275

a commodity. It is only out] of the difference between
the net cost of labour and the price of the finished pro-
duct that these'charges cambe paid. No class willingly
allows itself to be displaced, and we may be sure that
such a powerful combination as the possessing classes
can command to-day will exhaust all its resources in
threats, cajolery, and even physical force, before it will
capitulate. But its|most powerful weapon will be the
accomplished fact. It can claim that the industrial
system, with all its imperfections, at least is a going
concern, and it will be entitled to ask for the alterna-
tive scheme. Unless, therefore, labour sets itself to its
constructive task, it is certain that the profiteers will
continue in possession.

We have not shrunk from offering our own con-
structive proposals. Some critics object to the name
" Guild." They aver that the mediaeval Guilds were
employers' combinations, seeking a monopoly. In
America the term connotes a self-contained and selfish
group of craftsmen. To be sure there is little in common
between the mediaeval Guilds and those we have pictured.
Yet they have one important common factor — mono-
poly. Whilst the early Guilds sought a trade monopoly,
the modern Guild must be built up upon a monopoly of
labour. The name has, in fact, evolved itself. We
could not use the word " union," because that implies
a combination of manual workers — proletarians ; whereas
the Guild we have predicated is a combination of all
the industrial and commercial functions — wage, salariat,
administration. This labour monopoly is the only
possible alternative, in present circumstances, to the
wage system. There is yet another reason why the use
of the word " Guild " is appropriate. Not only was it,
in other days, a palladium of economic liberty (masters
and journeymen being of the same social status) but the
Guilds carried on the work of the world almost undis-

276 NATIONAL GUILDS

turbed by wars, party factions, or politics. Their func-
tion was economic ; they fed and clothed the community
when kings and politicians would have starved it. Here
then is a sign for the modern Guild : it must confine
itself to the material purposes of life, in the sure and
certain hope that if it build up a healthy economic
community, a healthy national life will develop.

It is not without significance that the Guilds flourished
in Europe contemporaneously with those in England.
Had precisely the same industrial structure persisted
down to the present time, it is certain that there would
be to-day national and international Guild Congresses.
Arrangements would have been made to give each other
trade preferences, and they would undoubtedly have
exchanged with each other such finished products as
were peculiar to any special Guilds. Perhaps — who
can tell ? — they might to-day be doing the work of
the Co-operative movement. But we have deliberately
chosen the national Guild as the model. For two
reasons : local Guilds would be altogether ineffectual
and inappropriate to modern requirements, whilst,
having regard to the simple geography of modern con-
ditions, a national Guild is the most effective unit to
perform both national and international tasks. In re-
gard to the first point, it must be remembered that the
Guilds are to take over from the State every economic
responsibility — old-age pensions, compensation for acci-
dents, sick pay, insurance of every kind, as well as the
regulation of hours of labour and a complete control of
output. It is obvious that if this great programme is
to be carried out, the responsibility of each Guild is
necessarily national : no purely local Guild would be
equal to such a burden. In the old days there were
literally thousands of Guilds ; we need only visualise
fourteen producing Guilds plus the Civil Service. From
the standpoint of efficiency and economy, a national

CONCLUSION 277

Guild is logically inevitable. Nor is it less imperative
when we look beyond our own shores. In our foreign
trading relations the Guilds will evolve two wholly
different policies. We confidently predict that the other
industrial countries will quickly follow this country in
adopting the Guild organisation. They will be com-
pelled to do it whether they like it or whether they hate
it : the fact remains that, immediately Great Britain
sloughs off the handicap of rent, interest and profit, no
other nation could continue with that burden. There-
fore there will be an international Guild policy, the
Guilds of France, Germany, Holland, Belgium and
America mutually agreeing to interchange their com-
modities. Thus would be realised the beginning of the
federation of the world which the poets have carolled
about but never understood. The Trusts for the past
decade have been feeling their way to international if
not to cosmopolitan capitalism. The Guilds are destined
to destroy the Trusts both nationally and internationally.
The Trusts would enslave mankind by binding it with
perpetual tribute ; the Guilds would ensure economic
liberty and so unloose the bonds of the spirit. But we
must also deal with nations and communities not yet
economically developed. They will in all human prob-
ability continue the wage system for generations. With
these, the Guilds must evolve a system of exchange based
upon some common denominator. In our chapter,
" The Finance of the Guilds," we have declared that
Guild labour must not be measured by the gold standard ;
we must reach a labour unit to which gold is unrelated.
But in international exchange, particularly with econo-
mically undeveloped countries, it is just possible that
gold may remain the medium of exchange. Not because
we wish it ; the long-established custom of metallic
exchange may compel it.

There is yet another reason why the national unit

278 NATIONAL GUILDS

must be adopted. It is not impossible that the success
of the Guilds in Great Britain may lead to grave com-
plications. The profiteers throughout the world might
conceivably be strong enough to force some Govern-
ment— Germany, Russia, who knows ? — to declare either
economic or military war upon us. The revolution in-
volved in wage abolition is stupendous ; its effects circle
to the outside edge of the world, uprooting old customs,
destroying vested interests, and menacing systems of
government and religion. It is therefore supremely
important that the change into Guild administration
should be backed by a convinced national consciousness
that we march into a new and infinitely more noble era.
We do not anticipate any such crisis ; on the contrary,
we believe we shall show the way where others will
gladly follow.

Remain to be considered the problems, disappoint-
ments and vexations of the transition period. We
think that we have repeatedly indicated our belief that
the struggle will be long and arduous. But before facing
such a struggle it has been necessary first to expose
the real elements of the wage system upon which is
built modern industrialism, and to demonstrate that a
new industrial structure, free from the evils of wage
exploitation, is possible. This double task we hope
we have accomplished. We have resolutely set our
faces against any Utopian scheme ; we have realised
that historic continuity is in the blood and brains of the
British people. We have therefore taken industrial
society as it exists to-day and considered its possible
development after the labour commodity theory has been
rejected. There is absolute unanimity amongst social
thinkers of every school that the trade unions are
undoubtedly the natural mmLfci of future industrial
organisation. From such a ^cautious observer as Mr.
Charles Booth to the most extreme member of the " In-

CONCLUSION 279

dustrial Workers of the World," the labour union is
always the starting-point, whatever may be the journey's
destination. Now there is no way known to us to abolish
wagery except by first securing the monopoly of labour
by the workers' organisations. Therefore the first stage
is the widest possible extension of trade unionism. We
have accordingly urged the trade unionists to concentrate
upon industrial organisation. Some preliminary steps
must first be taken. The unions in each industry must
either coalesce or federate. Next, they must spend money
and men upon compelling every worker in the trade to
join them. To spend a million sterling upon this object
would be money fruitfully expended. Take, for example,
the agricultural labourer. We have urged the established
unions to spend £250,000 upon agricultural organisation.
They would get thrice that amount returned to them in a
couple of years if only they would do it. At the time of
writing, over £100,000 has been spent upon the Dublin
lock-out. From the English point of view this expendi-
ture will bring no return. Yet who grudges a penny piece
of it? But if £100,000 be thus spent upon a temporary
conflict, how vastly more important is it to spend ten
or twenty or one hundred times that amount in solidify-
ing labour into a fighting unity ? Since 1905, Labour
has probably Spent at least one million pounds upon its
political adventure. During that period, as we know,
real wages have fallen. How infinitely better would it
have been to have expended that money upon the same
organisation of labour to the extent that every union
would be blackleg proof ? In considering, therefore,
the possibilities of the transition period, it will be granted
that there is nothing unreasonable in expecting an early
movement towards industrial solidarity by the unions.
And we know that there is no shortage either of money
or men to achieve that purpose. Perhaps in one im-
portant particular there is weakness. There is no

280 NATIONAL GUILDS

central committee with plenary powers. This means
that there is no effective leadership. In another respect,
too, is there weakness. Too many trade union leaders
dissipate their power by indulgence in politics. If
they are economically weak, it is foolish to make pretence
of political strength. We know only too well by painful
experience that political influence is precisely what
economic strength can make it. But, from the traed
unionist point of view, economic strength can only be
measured by its approach to labour monopoly. The
workers' property is not their labour but (in existing
circumstances) the monopoly of their labour. The
unions are now travelling quickly, not only towards co-
ordination of their moral and material forces, but towards
quick decision to meet crises that suddenly arise. Out
of this new order of things we may expect a higher
statesmanship and a more efficient administration.

The rise in the cost of living during the past decade
has led to serious heart-searchings amongst the salariat.
They are fast beginning to question whether, after all,
they cannot procure more butter for their bread by co-
operation with the unions rather than by subservience
to the profiteers. The railway clerks, for example, are
rapidly following in the train of the other railway servants.
We should not be surprised to see them federated with
the unions before long. There is no section of economic
society in so perilous a situation as the salariat. When
the right moment arrives, it will be an easy task for the
unions to force it into communion, if not into organic
membership, with organised labour. In the meantime
the unions would be well advised to open their doors
to all the clerks in their own industry. The salariat
is divided between accountancy and technique. The
skilled superintendents and experts must in due course
also choose between the profiteering present and the
Guild future. Their numbers are comparatively few,

CONCLUSION 281

and a considerable portion of them hold precarious
positions. Nevertheless, their knowledge and experi-
ence will prove of great value in the coming reorganisation
of society. It is to be hoped that labour will meet them
in no niggardly spirit. But looking squarely at the
problems presented by the present sectional interests
of the salariat and administration, we think their solution
is easy. In any event, even to-day, there is a great reserve
of technical skill and administrative capacity in the
ranks of the workers, and we might conceivably contrive
matters without their assistance if finally they elect to
support the profiteering system.

That the Guild organisation is both practical and
feasible has been proved beyond cavil by Mr. Henry
Lascelles. Mr. Lascelles is an experienced railway
administrator. He knows, probably better than any
other living man, the difficulties and intricacies of railway
administration. Having studied the principles of Guild
organisation, as stated by The New Age, he gave it as his
deliberate view that they were not only practicable but
capable of immediate realisation. Confining himself to
his own occupation — railways — he sketched out a com-
plete plan, partly transitional, partly final.1 In the con-
siderable controversy that has arisen upon the Guilds,
nothing has given us greater confidence than the con-
sidered opinion of this expert. We esteem it a stroke
of good fortune that he dealt with the railway system,
because undoubtedly the transit workers hold the key
to the position. But others have not been idle, and we
may shortly expect studies relating to the mines and
other industries. If then we have not dealt in great
detail with the transition period, it is not because we
feared it, but because we felt that each industry must
produce its own leader to conduct it across the Rubicon.

Just as we anticipate a peaceful acceptance of the

1 See Appendix III.

282 NATIONAL GUILDS

Guild organisation by other countries, when once it has
been established in Great Britain, so also do we anticipate
the final capitulation of the profiteers in our own
country. After all, what have they to fight with ?
Against the united decision of labour never again to sell
itself as a commodity how can they contend ? Would
they import foreign labour ? Where are the ships which
would bring it across the sea ? If they contrived a
shipload or two of foreign blacklegs, how would that
help ? Falling back upon their undoubted legal rights
to the instruments of production and distribution, what
could they do ? Force starvation upon the population ?
That would not help them ; their dividends would be
gone beyond redemption, and their property would be
valued as scrap iron. No ; undoubtedly they would
seek for some compromise. They would adopt a policy
of wise salvage. For our part, we would help them in
this. We have already suggested that in exchange for
their present possession of land and machinery, the State
might give them, as rough-and-ready justice, an equit-
able income either for a fixed period of years or for
two generations. Actuarially, it would probably not
matter which course were adopted. But all these prob-
abilities do not absolve the unions from adopting
more modern methods of industrial warfare. Strike
pay to the individual, based upon contributions, must
give way to rations based upon the size of each family
affected by any dispute, small or great. And in every
dispute the workers must decline to recognise any
fundamental distinction between rent and profit. If
the profiteers force industrial war, then let the rent-
mongers suffer with them. Therefore we have advised
the strikers to make it a fixed rule that during a strike
or lock-out no rent must be paid, nor must the arrears
be paid when peace has been proclaimed. The logic of
our argument leads to another important conclusion :

CONCLUSION 283

if wagery be the enemy, then it is futile to strike merely
for some modification of it. Every strike, therefore,
should specifically aim at a change of status. In practice,
that means at some form of partnership. And the
Guild theory involves partnership in industry by the
unions and not by the individual members. In no
circumstances must the individual members of the unions
be permitted to detach themselves from their natural
and economic affiliation by isolated profit-sharing arrange-
ments. Not only would such a course of action dissipate
the strength of the unions, but it would perpetuate
rent, interest and profits, when the true union policy
must be to absorb them.

Whilst it is a fortunate fact that the Guilds will take
over a living and not a derelict concern, whilst the in-
tensely interesting problems of qualitative and quanti-
tative production will remain to be solved, not from
consideration of profit but of society's needs and welfare,
the new order will receive as its hereditas damnosa
the human wastage of the existing industrial system.
We are not appalled at the prospect, although we have no
wish to underestimate its difficulties. If the Guilds
are to be efficient and economically sound, it is evident
that membership in them must connote a standard of
skill and ability greater than that now prevailing. The
standard will be fixed with a due regard for the work
to be done and the number of workers available. The
present pauperised and criminal population will have to
be sorted out into its component parts, with results
that no man can foresee. But our approach to the
problem will not be as magistrates or policemen ; it
will be as physicians fully imbued with the knowledge
that our submerged population are the victims of a
system to which they were a practical if " regrettable
necessity." Therefore to cure and not to punish will
be the policy adopted. And this beneficent work will

284 NATIONAL GUILDS

probably be best left to the State. Let us rejoice that
the task will be but transitory. With the Guilds in
being, we are probably only one generation removed
from becoming a community sound in spirit and body,
with a new lease of fruitful life.

If during our long inquiry into the wage system and in
the preoccupation of working out the rough elevation
of the Guilds, we have mainly confined ourselves to
economic considerations, we trust we have not been
unmindful of the spiritual bonds necessary to the en-
during structure of society. They labour in vain who
would build only with material things. Behind the
work of man's hands are imagination, faith, spirit, and
soul. Better would it be to lapse into national decay if
we can only show the peoples of the world a symmetri-
cally perfect system of wealth production. But we have
already argued the vital connection between economic
and moral life. Poverty of the body almost invariably
bodes poverty of soul. If, as a community, we can
construct a new national economy, we may be sure that
the same energy will carry us into realms of the spirit
not yet explored. For we call into activity a slumbering
population of infinite possibilities. The thousand spiritual
and intellectual problems that will face us in the future
may confidently be left to a body politic no longer
dominated or biased by economic pressure of a sectional
or selfish character. We shall at least have provided
an arena where great men can work ; the rest we leave
to Fate.

APPENDIX I

THE BONDAGE OF WAGERY

AN OPEN LETTER TO THE TRADES UNION CONGRESS OF I913

Gentlemen, — We address ourselves to you because it
is tacitly understood that the Trades Union Congress
applies itself, more or less exclusively, to industrial
affairs. Several years ago your Congress founded the
Labour Representation Committee, which quickly de-
veloped into the Labour Party as we know it to-day.
To it you referred your purely political questions. Not so
very long ago, so greatly did labour politics loom up
in your imagination, it was suggested that the Trades
Union Congress might advantageously be abolished and
the Labour Party left as the sole governing body. There
is an alluring quality in politics that distracts men's
minds from the material problems of life. It needs
strength of will and spiritual discipline not to be enticed
away from the actualities that beset us in our daily
work. It is because your Congress addresses itself to
these actualities that we venture to discuss with you
the most important aspect of your daily lives — the ques-
tion of wages and the necessity for the abolition of the
wage system.

In the first flush of excited satisfaction that followed
the General Election of 1906, and in consequence of
the marked deference paid to the Labour Party at that

time, a great number of serious and loyal Labourists

287

288 NATIONAL GUILDS

sincerely believed that the conquest of political power
was at hand, and that the conquest of political power
was a condition precedent to the conquest of economic
power. They accordingly contended that there remained
no vital function for your Congress, because you concerned
yourselves only with the [industrial, that is (roughly
stated), with the economic, problems that daily confront
you. If political power was really the precursor of economic
power, then it was obviously the duty of every Labour
man to concentrate upon the acquisition of political
power. Nevertheless, your Congress is this year the
largest and most representative ever held, whilst political
Labourism is distinctly at a discount. It is rather curious,
is it not ?

It is not in the least strange to those who watch the
industrial movement in a spirit detached from parlia-
mentarism. The reason why your Congress this year is
stronger than before is precisely the same reason why
all glamour has departed from parliamentary Labour-
ism. You, to-day, are strong in self-defence against the
incursions of capitalism, and instinctively your consti-
tuents have realised that the real struggle is on the in-
dustrial plane, and that parliamentary manoeuvres are
futile to stay the downward course of real wages.

We have not the slightest wish to offend any senti-
ment or bias which you may have in regard to parlia-
mentarism ; but it is supremely important that you
should firmly grasp the essentials of the present indus-
trial situation. Let us then briefly recapitulate the
main facts of Labour's history since 1906, the year when
Labour first appeared in any strength in the House of
Commons. You will remember that during the first two
Sessions your representatives were treated with excep-
tional deference and consideration. In the third Session
they found the sentiment of Parliament distinctly harden-
ing against them. Since 1910 they have been practically

APPENDIX I 289

ignored. Have you seriously faced this important fact ?
Have you inquired into the reason of it ? You, of course,
know better than we do that the spirit of capital is a
curious compound of shyness and savagery. It is
extremely shy and diffident when faced with the un
expected or unknown ; it is extremely savage and relent-
less when it has discovered that the unknown has no
terrors, and that its economic power remains unimpaired.
And that is what happened in the Campbell-Bannerman
Parliament. The Labour Party, over forty strong, was
a strange and unexpected phenomenon. What did it
mean ? Did it portend an economic revolution ? Or
was it a mere flash in the pan ? Whilst these questions
were being pondered by those who control our political
machinery, the Labour Party was treated with immense
respect. Gradually the exact facts became clear to the
political leaders, with the result that the Labour Party
sank in political value, and finally were regarded as
negligible.

What were the facts which unmasked the pretensions
of parliamentary Labourism ? They may be summed
up in a phrase : Rent, interest and profits were unmis-
takably increasing ; real wages were declining. There-
fore, argued the parliamentarians, why worry about the
Labour Party. They do no harm in Parliament, and
they apparently divert their constituents' minds from
the more important factors, namely, profiteering and
wage slavery. As long as rent, interest and profits
can rise 22^- per cent, and real wages fall by 7 to 10 per
cent., there is obviously no fear of any revolution. Let
us, indeed, encourage the wage-earners to play with
politics and to forget the industrial struggle. Gentlemen
of the Congress, your Labour Party has been a very
expensive amusement.

Now let us state the case in pounds and pence.
Luckily, just before you meet, the Board of Trade have
19

2go NATIONAL GUILDS

opportunely stated them in an important report which
every delegate should possess and study. It was in
1906 that Labour went in force into Parliament. Since
that date how have the workers fared ? Remember, it
has been a period of extraordinary prosperity. Every
test proves it — Income Tax, Clearing House returns,
imports, exports. Yet during that period your wages
have actually fallen. Nominally, your wages have risen
6 per cent, or thereabouts ; but real wages, that is
the purchasing capacity of your money, show a decline
of 15 per cent. ; so that your wages, in the average,
have declined 9 per cent. In the same period, the
profiteers have increased their incomes by 22^ per cent,
per annum. This Board of Trade Report gives par-
ticulars of rents, retail prices and wages in eighty-eight
different towns in the United Kingdom in 1905 and 1912.
We will quote the facts relating to such of these
eighty-eight towns as return Labour members. They
are Barrow-in-Furness, Blackburn, Bolton, Bradford,
Derby, Halifax, Leeds, Leicester, Manchester, Merthyr,
Newcastle, Normanton, Norwich, Sheffield, Stockport,
Sunderland, Glasgow, Dundee. Compared with 1905,
the combined rent and retail prices in these Labour con-
stituencies are as follows : —

Per cent.

Increase.
Blackburn, Bolton, Stockport . . .16

Sunderland . . . . .14

Leicester, Normanton . . . 13

Bradford, Halifax, Manchester, Norwich . .12

Leeds, Merthyr, Newcastle, Oldham, Sheffield . 1 1

Barrow, Dundee, Glasgow . . . .10

We have been assured thousands of times in recent
years that the cause of this increase in the cost of living
is landlordism. This report makes it perfectly clear
that the real enemy is the profiteer. During this period
rents increased 1-8 per cent., whilst prices advanced

APPENDIX I 291

137 per cent. When, therefore, your manufacturing
employers and their satellites, the single taxers, invite
you to attack the rapacious landlords, kindly remember
that these same manufacturers are extorting far more
out of you than the landlords.

Concurrently with this conscienceless rise in the price
of your living, how have you fared in the matter of
wages ? In the trades common to all these towns we
discover that the mean percentage increases in rates of
wages in all the towns are : Building trade, skilled men,
1-9; labourers, 26; engineering, skilled men, 5-5;
labourers, 39 ; printing trades, compositors, 4-1.

Is it not evident that you cannot contend with an
economic movement such as this by parliamentary
means ? Surely it is an industrial problem, pure and
simple. Consider ! Whilst Mr. Philip Snowden has
been busy pamphleteering and lecturing on woman's
suffrage or national finance, the cost of living in his
own constituency has advanced 16 per cent. Whilst
Mr. MacDonald has been on a Royal Commission in
India, the cost of living in Leicester has advanced 13 per
cent. ; whilst Mr. Parker sat upon the Marconi Com-
mittee, in the interests of parliamentary purity, the cost
of living in Halifax went up 12 per cent. Probably
Mr. G. H. Roberts was too busy acting as whip of the
Labour Party to notice that his own constituents were
being plundered to the tune of an increase of 12 per cent.
Whilst Mr. Keir Hardie has been gallivanting over Europe
and America, talking old-fashioned and extremely
ignorant State Socialism, his Merthyr constituents have
been " had " by an increased n per cent. You must
seriously consider whether the meat is worth the salt.
Frankly, and in the face of facts like these, if you place
the least reliance upon political means to achieve in-
dustrial freedom, you are criminal fools. Criminal,
because millions of your fellow men and women

292 NATIONAL GUILDS

depend upon you for guidance in their industrial
affairs.

If, then, parliamentary methods have failed to bring
to you any measure of economic freedom (we now know
with complete certainty that you are economically weaker
since you entered into the parliamentary adventure),
it is well worth while to know the reason. Broadly stated,
you may take it as definite and certain that Parliament
responds to economic power and ignores economic weak-
ness. If you would be strong in Parliament, you must
first acquire the requisite economic strength in factory
and workshop. The men who own and control not only
the wealth, but the machinery (human and material)
that produces wealth, will inevitably control and guide
our national affairs. This has been the case from the
very beginnings of human association, and will so con-
tinue until the Judgment Day. We have, therefore,
repeatedly urged the wage-earners never to forget the
formula that economic power precedes and dominates
political power. The failure of parliamentary Labourism
is, in consequence, primarily due to the palpable fact
that economic power resides in the employing classes,
who, being in a position to exploit your labour, possess
and control wealth, and therefore govern you. From
this conclusion there is no escape.

The ancient and searching question again comes
home to you : What must you do to be saved ?

At the risk of appearing either intellectually arrogant
or priggishly superior, we can answer that question with
certitude. You must so organise yourselves on the
industrial plane that the wage system can be abolished.
To men and women who have lived their lives in an
atmosphere of wagery, and who regard wagery as some-
thing inherent in daily life, to suggest its abolition sounds
Utopian or a counsel of perfection. We are writing
this letter, hoping that we can convince you that to abolish

APPENDIX I 293

wagery is entirely practicable. Please remember that
capitalism depends upon the wage system, but you do
not. So long as you have skill to produce wealth and
organise its distribution, you are entirely free from and
independent of profiteering.

It is first and foremost necessary that you should
have a clear understanding of what wages are. Wages
are the price paid in the competitive market for labour
as a commodity. A wage is not a salary ; it is not even
pay ; nor is it remuneration. Salaries and pay and
remuneration are for individual services rendered. In-
dividuality, the human element, enters into these rewards
for services rendered ; but wage is the market price of
a commodity called labour. It is an impersonal thing,
not human, not inhuman, rather non-human. This
labour is found inside your bodies and in your hands
and arms and legs and muscles, just as ore is found in
the earth or fruit on the tree. Being discovered inside
you, the men who want to exploit it, precisely as they
would exploit any other commodity, buy it from you,
precisely as they buy ore from landlords or corn from
farmers. If it be scarce, then the price of the labour
commodity is high ; if it be plentiful, its price is low. In
Europe in general, and Great Britain in particular, labour
is plentiful, and accordingly it can be bought at a price
that merely ensures its continuance — that is, at a price
that enables you to live and to reproduce yourselves,
daily by food and yearly by children. In its callous
disregard of the sanctities of life, modern capitalism is
only matched by the slave-owners of previous generations.
It is fundamental, then, to the argument always to
remember that wage is the price paid for labour as a
commodity. It is not paid to you as human beings, made
in the image of God ; that consideration never enters
into the minds of the profiteers. They merely buy a
quality, a force, inherent in you. To them it is

294 NATIONAL GUILDS

nothing more and nothing less than a marketable
commodity.

Observe carefully the consequences that flow from the
theory that labour is a commodity. The profiteers buy
it from you (at a bare subsistence rate) and accordingly
claim possession of all the wealth subsequently created
by the labour which you have sold for a mess of pottage.
Now it is in wealth, in property, that economic power
resides, and the result is that whilst you are kept in
wagery (which is only one remove from slavery and
closely related to knavery) the possessing classes remain
the governing classes and do not care a fig for your
Parliamentary Labour group. Indeed, they look upon
it with indulgent contempt.

What must you do to be saved ? And as salvation
obviously depends upon your capacity to destroy the
wage system, how must you set about it ?

There is only one way to destroy wagery, and that is
to determine never again to sell your labour for wages.
Labour to you is something more than a mere commodity.
To you it is your property ; it is the only instrument or
weapon in your possession whereby you can achieve
economic emancipation. Therefore you must claim the
absolute disposition of that labour power and possession
of the wealth created out of it. But you cannot do this
unless you possess a monopoly of that labour power.
Here, then, we come to the special function of the Trades
Union Congress. First and last, it is your business to
organise the working population in such a way that this
labour monopoly can be acquired. We warmly congratu-
late you upon the large accessions to your numbers in the
past few years. But you have, as yet, barely begun.
You do not yet muster more than one in six of the working
industrial army. We invite you to take the necessary
steps to bring under your influence every working man
and woman in the United Kingdom. You cannot do this

APPENDIX I 295

without money. But you have money that runs to
millions sterling. We seriously urge you not to spend
that money upon strikes that merely mitigate wagery,
but to spend it upon a great campaign (including a house-
to-house canvass) to acquire a complete monopoly of
labour and then to abolish the wage system altogether.
You will need to spend £250,000 on spreading unionism
in the industrial centres and another £250,000 in organis-
ing the agricultural wage slaves. You have already
spent (and largely wasted) over £100,000 on a daily paper.
If you can manage £100,000 for so small a purpose, are
you afraid to spend five times — aye, or ten times — that
amount on achieving an industrial revolution ? Make no
mistake about it : the next revolution is the abolition
of wagery and the constitution of Guilds for the purpose
of creating wealth and equitably distributing it. We
entreat you to forget such purely external things as
parliamentary politics, and to concentrate upon wagery
and the way to destroy it. Your executive body is
inaptly styled the " Parliamentary Committee." Give
it imperative instructions to forget its name and to get
to the main purpose of your fellowship — the inclusion
and sane organisation of every man and woman who
works with head or hand. The Board of Trade Report,
to which we have alluded, proves with deadly accuracy
that you are at a critical moment in your history. We
believe that in your own way you will rise to the occasion.
We venture to remind you that you have not much time.
A trade depression may be upon us in a year or two.
That would add enormously to your difficulties.

Perhaps the greatest obstacle you will encounter will
be a kind of oriental fatalism convinced that no human
effort can frustrate the economic movement. The
increase in the cost of living is the result of human effort
directed to that end. Had you been strongly industrially
organised you might have resisted this attack upon your

296 NATIONAL GUILDS

means of living. Take Leicester, for example. It is
represented in Parliament by Mr. J. R. MacDonald, your
political leader. Between 1905 and 1912 rents rose in
Leicester 6 per cent. Food and coal rose no less than
15 per cent. Had Mr. MacDonald devoted his time and
abilities to organising an effective resistance to this
special form of capitalistic plunder, do you not think he
would have been more profitably occupied than in mixing
with the governing and exploiting classes in India ?
Duty, like charity, begins at home, but the eyes of the
fool are upon the ends of the earth. In Ireland, they
successfully resisted the depredations of the rent-mongers ;
in America, they successfully organised against the rise in
the price of meat. But there is no glory in detailed
local struggle ; there is no drama, no opportunity to
strike heroic attitudes. Not the least of the curses
that parliamentarism brings in its train is an insatiable
hunger for the limelight. Your parliamentarians are
as touchy on this point as music-hall artists. The pity
of it ! In any event, this fact stands sure : When
one class consciously seeks to plunder another class,
conscious resistance is a duty and a possibility, unless
those plundered are tame slaves and actuated by servile
instincts.

You are fully justified in retorting upon us with
the question : What is our alternative to the wage
system ?

During the past two years we have been at great
pains to elaborate a constructive programme to be
followed after the wage-earners had repudiated wagery.
We will endeavour briefly to summarise our argument.
Let us suppose that labour in this country were so
completely organised as to constitute a monopoly. On
one side we should have the profiteers possessing the
machinery and the land ; on the other, the army of
workers in complete possession of the labour. Obviously,

APPENDIX I 297

a dead-lock. What would be done ? The State Socialists
would contend that the way out would be for the State
to purchase the assets and to work them. But the
amount of money involved in the purchase would remain
a permanent charge upon labour equivalent to the existing
rent, interest and profits. Labour would be no better off.
Worse remains : the State would have to maintain the
wage system because there would be no other means to
pay the interest on the purchase price. Does that puzzle
you ? It is really quite simple. All rent, interest and
profits come out of the difference between the price of
labour as a commodity and the selling price of the finished
product. If, therefore, Labour had organised itself to
abolish wagery, it would naturally reject the overtures
of the State to continue the wage system. There would,
therefore, be no fund out of which to pay interest to the
discharged profiteers. This is the fatal objection to
State Socialism. It predicates purchase, the purchase
price to be a national debt, paying interest in the usual
way. It must therefore equally predicate the con-
tinuance of the wage system. Worse still remains to be
told : the State would find that the cost of production
would so seriously increase as to put it out of action in
the world's market. Every serious student has now
finally discarded State Socialism, either as an economic
improvement upon existing capitalism, or as a cure for
the ills of wagery. Nevertheless, the present owners of
the plant and machinery are entitled to recompense.
Our own proposal in this regard is to pay them a reason-
able annuity for two generations. It is, at least, rough
and ready justice.

We fear that our argument seems to you to tend
towards Syndicalism. Fundamentally, we do not accept
Syndicalism because it argues for the possession by
every union of its own land and machinery. To this
we do not assent, because all wealth — particularly plant

298 NATIONAL GUILDS

and machinery — belongs to the community, and does
not, and ought not to, belong to any particular group.
We would accordingly vest all industrial assets in the
State, to be leased by the State to the appropriate Guilds.
This lease would be in the nature of a charter.

We can now see the beginnings of a new order of
society from which the wage system has been eliminated.
In this new society the Trades Union Congress may
become the nucleus of an industrial parliament — the
plenary committee of the federated Guilds.

You, perhaps, are now curious to know what we mean
by a Guild. A Guild is the combination of all the labour
of every kind, administrative, executive and productive
in any particular industry. It includes those who work
with their brains and those who contribute labour power.
Administrators, chemists, skilled and unskilled labour,
clerks — everybody who can do work — are all entitled to
membership. This combination clearly means a true
labour monopoly. The State, as trustee for the whole
community, by charter (the terms being mutually agreed
upon) hands over to this Guild all the plant, material and
assets generally cognate to the industry. The Guild must
be national in its organisation and ramifications. In
mediaeval times the Guilds were local. The railway and
telegraph and telephone have annihilated time and space
and killed the old sense of locality. Thus we have a
labour monopoly married to the mechanical means of
wealth production. In our opinion there ought to be
about fifteen of these Guilds covering the vast majority
of the working population. They would mutually ex-
change their products, referring all difficulties and all
questions of policy to the general committee of the
federated Guilds, a body which ought to descend direct
from the Trade Union Congress.

What, in these new circumstances, would be the sub-
stitute for wagery ? Has it ever struck you that soldiers

APPENDIX I 299

never receive wages ? They receive pay — officers and
men of all ranks. What is the distinction ? Mainly in
this : so long as a soldier belongs to the Army, he re-
ceives pay whether playing or working. He does not sell
his labour as a commodity ; his labour is not marketable,
and there is no profit on it . In like manner, every member
of a Guild would receive pay whether working or playing,
employed or unemployed. (It is only in this direction
that any solution of the unemployed problem can be
found.) The Guilds would be absolute masters of their
own economic affairs. They would themselves under-
take certain duties now clumsily undertaken by the
State — insurance, compensation for injury, sickness and
old-age pensions. It would not be wise to elaborate here
too many of the details of Guild organisation. Our
present purpose is to urge you to concentrate upon the
wage system and to understand the evils that flow out
of it. We have felt it necessary to go one step further
to prove that modern capitalism, founded as it is upon
wagery, is by no means the last word in social or industrial
organisation.

The transition from wagery to the national Guilds
will be a period of thrilling interest far transcending in
its intensity the artificial excitement of present parlia-
mentary politics. The work calls for men of strong
will and clear judgment. There is a coterie of thinkers
who now assert that capitalism has finally subdued our
population into a servile state. We have not only in-
tellectually combated that view but have passionately
resented it. Our belief in the principles of democracy
remains unshaken. We believe that out of the mass of
the working population can be developed genius and
character as great as can be found under any aristocratic
or autocratic system of life and government. Above all,
we know that the British worker is the finest fighter in
the world when once his interest has been touched, his

300 NATIONAL GUILDS

passions aroused, and his imagination quickened. In
the struggle that lies before you, all these qualities will
be requisitioned. When you are convinced that what
we have here written is substantially true, we have no
doubt of the issue.

APPENDIX II

Note. — The following articles, by a practical expert on the
subject of railway administration, were contributed to The New
Age and are here reprinted by permission. Without committing
ourselves to any of the detailed suggestions herein offered, the
series is valuable from the evidence it affords that the guildisation
of our railways is, in the opinion of an expert, not only theoretically
but practically possible. Similarly detailed schemes, we may say,
have been or are in course of being drawn up for other industries.

TOWARDS A NATIONAL RAILWAY GUILD
By HENRY LASCELLES

" It is significant that the trend of trade unionism to-day
is towards the universal organisation of crafts. The
latest — and, incidentally, the largest in the world — is the
National Union of Railwaymen. Substitute Guild for
Union, and, along with this, change the idea of sub-
ordination for the idea of partnership, and the Guild
system will have begun."

Few who have read and pondered The New Age
articles on Guild Socialism will have done so without
feeling intense and sympathetic interest in the subject,
and the principles advocated will be looked at by different
individuals mainly from the standpoint of their possi-
bility of application to the industries of which they
themselves have intimate experience. Thus the Guild
ideas have appealed to me as eminently practicable for
adaptation to railways in particular.

302 NATIONAL GUILDS

The paragraph quoted above is confined to railway
trade unionism, but if we look higher there will be
found commercial organisation in other grades of the
railway services which could be inoculated and adapted
to the Guild system. Serious difficulties are to be
encountered, but I foresee none greater than those
which have been, or are constantly being, successfully
combated in the building up and perfecting of the
transit business, whilst the advantages to the community
and the workers would be enormous ; still my purpose
is to indicate at least one consideration of vital import-
ance in approaching the " guildisation " of the railways,
and concerning which I confess to not feeling optimistic.

The railways of the British Isles are only made
possible of management to-day by a system of specialisa-
tion from top to bottom, and as this system is only
vaguely known to the general public it is useful briefly
to describe it.

The National Union of Railwaymen typifies the outside
or uniform staff which is more or less well known, coming
as it does in contact with the business public, but at
present the " cloth " remains outside trade unionism,
and is little known.

In the first place, wide divisions have been adopted
on the different railways, a few of which are : General
managers, secretaries, goods, mineral, passenger and
parcels, carriage and wagon, solicitors, engineers, estates,
horse, signal and telegraph, audit and accountant,
stores, advertising, police, steamship, hotels, etc. One
department is fairly typical, and a sketch of the goods
department, the ramifications of which are perhaps
the most extensive, will best serve the purpose of illus-
tration.

At a goods station the work is sectionised somewhat
after this manner : Inwards (goods received from other
stations) ; outwards (goods for forwarding to other

APPENDIX II 303

stations) ; accounts, abstracting (where statements or
" returns " are made to auditor or accountant, and to
railway clearing house on traffic the earnings upon
which concern more than one company) ; warehouse rent
and wharfage, bill of lading, etc. (at ports), grain,
mineral ; and other sections varying with the system of
management, the size of the railway, the importance,
situation and staple trades of the town where the
station is. Each of the sections will have its head, and
all of them will be more or less presided over by a chief
clerk of the station, but above him the real head will be
the goods station agent.

Passing upwards from the station, whose staff is or
should be actually in contact with the movement of
goods, we next come to the district goods manager's
(or district goods superintendent's) office. This office
will most likely have some sixty stations of varying
sizes and descriptions under its control as to goods
business, although it may possibly be that passengers
and parcels transit is also included. The office will be
sectionised into staff, claims, rates, demurrage, trains,
general, etc., the staff of each being under separate
specialised heads, and under one chief clerk, the control
of all being by the district goods manager, who thus
knows all that is worth knowing affecting the goods
business of his sixty or more stations.

In the case of a large railway there may be from
half a dozen to three times that number of district goods
offices in various parts of the country, which in turn
come under the government of a chief goods manager.
The sections of a chief goods manager's office are
nearly enough described by repeating all the district
office sections and adding a few more, such as outdoor,
indoor, operating, commercial, Continental, etc. The
chief goods manager is responsible for his department to
the general manager and directors, which remark also

304 NATIONAL GUILDS

applies to the heads of others of the various divisions
first mentioned ; though the goods division has no exact
prototype in the other departments, as their ramifications
are not so great.

There are flippant members of the travelling public
who know exactly how railways should be managed,
but as they are not of any account I may say that an
intricate and delicate organisation of huge dimensions
is in the hands of able officials, and it is around
the selection of officials that my present remarks
centre.

To-day there are definite interests to be served in the
shape of the shareholders, who appoint directors to
watch those interests ; and the directors, personally or
by relegation, appoint the officials. One of the most
important, if not the most important, function of the
general manager is to see that suitable men are found
for the various positions of consequence, that there shall
be no round pegs in square holes (the big holes at any
rate). Everything depends on this, and in the main,
having regard to the interests to be served, it is done
exceedingly well, notwithstanding that judgment may
often be vitiated by agnation, self-interest, or outside
interference. It would be better done, too, were the
general manager able to devote more of his time to
acquainting himself personally with the staff as far
downwards as he could possibly reach. Moreover, it is
done very simply : a vacancy arises, the immediate
superior recommends to the powers above a suitable
person for the place if he can, or if not he asks for such
person to be found elsewhere. The recommendations
are usually regarded where the general manager or
directors have not themselves knowledge of eligible
nominees. Under State management purely it might be
equally simple and efficient, but what would it be under
a national Guild ?

APPENDIX II 305

The ideal method would be the democratic one, but,
in actual practice, most cumbersome and erratic. Agna-
tion and its kindred evils might be avoided, but at what
cost to efficiency !

Why does democratic election of representatives to
Parliament, city councils, town councils, etc., result in
selection of gramophones instead of men ? I suggest
it is because the democracy have no knowledge, or very
little, of the qualifications which should be required of
their representatives.

Democratic election in the case of the heads of lower
branches would do, for the important reason that those
branches know what is required ; they know who would
make a good cartage foreman, shed foreman, foreman
porter, inspector, or ganger, because they know the
duties, and are not to be confused by claptrap ; but as
to the full merits necessary in a station agent, district
manager, goods manager, general manager, chief ac-
countant, engineer, their knowledge is as limited as it
is concerning the qualifications of a Secretary of State,
and they are as fitted to elect him as to elect a poet-
laureate.

It might be argued that each grade should elect its
head — elevation by one's peers — but the partial develop-
ment of the peers themselves after spending years of
their lifetime in one narrow line, where flunkeyism or
silent indifference insubordinates them, and where re-
pression by superiors contribute, makes them unfitted
for forming broad judgments. True, after many years
of Guild development, when short hours and less pressure
upon both men and officials, and higher standards of
living have been attained, an improvement might be
expected.

No ! I think that in the first stages, except where the
duties of the selected are confined to one department,
and not to the supervision of various departments of
20

306 NATIONAL GUILDS

different natures, the appointments must continue to be
made from above. The writer has a practical and
lengthy experience of railway management, and could
name half a dozen capable officers, any one of whom
could undertake the guildisation of the railway system
in less than five years, if given a reasonably free hand.

II

The future development of railway administration in
this country lies in the direction of unification of manage-
ment of the numerous privately owned lines. Whether
this is to be done under private enterprise, by State
ownership, or through guildisation, must be settled
sooner or later.

From the separate interests, the commercial and
travelling public have exacted facilities and concessions
in advance which should only have been given con-
currently with unified organisation. Faced by ever-
growing demands, and hampered by parliamentary
restrictions (the illogical effects of many of which are
easily demonstrable), the separate railways have had
imposed upon them an intricate system of interchange
workings, the wonder of which is that it has not become
cumbersome to the point of impracticability.

From illustrations of the complexity of railway
management to-day, the reader may see what problems
Guild Socialism would solve, whilst leaving men who
have the technical training of a lifetime free to anticipate
and solve the lesser difficulties to be expected in the
building up of a National Railway Guild. A passenger
books a first or third-class ticket from a south of London
station to a destination in Scotland ; it may be ordinary,
" excursion " or " tourist " ; it is improbable that it
would be a" season " ticket. He might possibly travel
in a south of London company's carriage all the way

APPENDIX II 307

and the train be hauled by one, two, or even three
different companies' engines. Consequently, although
the fare is paid in one amount, each company must
receive something for its work proportionate to the
service given. The division between the companies of
an ordinary fare differs from that of an excursion fare,
and a tourist fare from both. The mileage travelled
over each company's line varies, and the allowance paid
to a company for providing a first, third, or composite
carriage for the journey is not the same. The owner-
ship of the engine or engines which haul the train has
also to be taken into account. Notwithstanding all
this, a fair share of the amount paid for the ticket is
given to each company.

Take another case : A fortnight's specimen copies of
new novels have accumulated and are sent to a
reviewer for review. The sender consigns the books by
goods train, carriage to pay. As most of the productions
will consist of lurid sex novels, and the total weight
be about five tons, they should be loaded in a gun-
powder van ; but as the companies decide what are
inflammable goods by chemical analysis only, and not
by literary examination, they are actually loaded in an
open wagon, sheeted and roped and labelled. On their
arrival, because they are not worth a paragraph in
The New Age, they are refused, sender is wired for
disposal instructions, but has disappeared, and the
goods are sold to defray expenses, realising waste-paper
prices.

The charges are divided amongst the companies
having regard to a few small details, such as the miles
of line of each company passed over, after crediting
extra amounts in the case of specially expensive bridges,
viaducts, tunnels, London lines, and short lines which
have cost more than the average to construct ; the
carting done at the stations of the two different terminus

308 NATIONAL GUILDS

companies ; the stations provided by the two terminus
companies ; the station work done (loading and dis-
charging), credit to the company furnishing the wagon
(according to its description and dimensions) and
tarpaulin ; credit to the company for delay to the stock
at destination. We will leave out sea freight, Customs
duty, port charges, boatage, lighterage, and ware-
housing. In the end the carriage charges are treated
as a bad debt, and the waste paper proceeds divided.
The wagon, tarpaulin, and ropes are sent back, and a
record is kept of the dates and hours these are passed
from one company to another, forwarded from sending
station, and received at destination. All this is done
on both journeys.

These divisions of receipts occur by the hundred
thousand. To say how they are arranged would be
more tedious than it is to describe the need for it.

The genius that has evolved and made possible the
smooth working of such arrangements could, if released
from the solving of these and similar complex problems,
initiate a National Railway Guild, and be as successful
in overcoming difficulties yet unforeseen, but of a far
less difficult character.

The time is ripe now, but once let rot set in through
the physical and moral decadence which would assuredly
follow permeation by the sabotage so glibly spoken of
by some of the prophets of syndicalism, and the oppor-
tunity will have gone in this country for ever — the men
would be past spiritual redemption.

Ill

Readers of a deductive turn of mind will already have
formed some idea of the amount of national wealth
(and potential wealth as represented by mental and
muscular energy) which is dissipated through the exist-

APPENDIX II 309

ence of disintegrated companies which should naturally
form one organic transit system. What causes, we
may ask, have militated against the railway interests,
powerful as they are, securing parliamentary sanction to
amalgamate the large trunk lines at least, seeing that
concurrently with such sanction concessions in rates and
fares must have been accorded, or the status quo pre-
served and labour demands met from income ?

We can safely assume that if better and cheaper
transport facilities were a real and pressing need of the
trading community as a whole, economic power would
so dominate political power as to secure its ends. But
better and cheaper transit than that already supplied
is not a vital necessity. So far as cheap travelling is
necessary to business it already exists. Traders' con-
tract tickets are issued at specially low charges upon
the condition that the business passed by the firm over
the line of the company which issues the ticket reaches
a fixed annual value per ticket granted. Accredited
firms only receive these tickets, and their credentials
are " traffic."

All-round cheaper rates for goods (including minerals,
livestock etc.) would be of small advantage in that the
percentage of reduction which could be made would
be infinitesimal, and could not have an appreciable effect
in the direction of improved trade or profits. In other
words, the percentage of the selling price which is due
to carriage is not great, though of course this cost does
enter into all productions. Stability in railway charges is
on the whole more essential to business purposes, and an
all-round reduction would carry many of the disadvantages
to traders which accompany general increases such as
the four per cent, advances recently made. Compre-
hensive reductions unsettle prices quite as much as
advances.

The incidence of railway charges is, however, another

310 NATIONAL GUILDS

matter, and everything here is favourable to the big
concerns. They have seen to it in the past that the
incidence shall fall as lightly as possible on those best
able to bear heavy charges. Low rates obtain for large
quantities and for staple trades. Goods from London to
the provinces, and vice versa, delivered to the railway
companies in the evening, are in turn delivered by them
with precision to doors of the receivers early the day
following. Goods trains between large towns are timed
like passenger trains. In all these matters the biggest
houses get the best attention.

When it has been possible to play off company
against company, even to the point of receiving expensive
and unremunerative services, is it to be wondered at
that traders would oppose the building up of a private
monopoly in railways which might ultimately be power-
ful enough to dispense a justice which is not wanted ?
Though the trading community is not one huge com-
bination, it has its chambers of commerce and its asso-
ciations, and in matters of policy there is always the
fatal listening for wisdom from the men of the greatest
wealth.

If stability in rates is a desideratum, precision in
transit and deliveries is a necessity, and when this was
in jeopardy, and, in fact, when transit had stopped
altogether, traders were bound to see the logic of accept-
ing increased rates to enable advances in wages to be
given. Railwaymen's wages, low as they are in some
cases, can always be favourably compared with wages
in other lines of business, whilst railway dividends do
not exactly overshadow coal, cocoa, soap, alkali, wool,
cotton, provisions, and other dividends. The greater
the share of public plunder, the better the possibility
of reasonable wages.

It is with railways as with smaller business concerns,
prosperous times mean more generous treatment of

APPENDIX II 311

staff. The more money out of the public wealth, the
more unearned income to shareholders, the more wages
to employees.

It should not be necessary to argue that amalgamation
of lines would mean less cost of working. Any one
knows what would be the effect on the Stock Exchange
of an announcement that several large lines were about
to amalgamate with parliamentary sanction.

The advantages are clear. Of what, then, do the dis-
advantages consist besides those to many of the trading
community of which I have just spoken ? The cry
would be (to the public) violent displacement of labour.
This is not a sound objection, as it would be easy to
safeguard displaced labour by requiring compensation
to be paid, and ensuring that labour economies should
only be effected by such reductions in staff as arise by
simple effluxion of time ; and in this I am not overlooking
casual labour.

The soundest objection is that private interests would
be gratuitously presented with large accessions in divi-
dends for which not the least exertion had been made
by them in the public good.

An unsound objection, and one which would be silent,
is that a large section of the trading community is
directly interested in and pecuniarily benefited by waste.
Contracts for materials would undergo a reduction in
quantities needed to be supplied. Savings even of waste
come out of some interest, and these are the interests
to be " sacrificed." Again, prices do not rule contracts,
as a railway company is bound to give the most tender
consideration to the large houses, who can give or with-
hold business from the company at their pleasure.

The objections I have indicated to private monopoly
of railways are not exhaustive, but enough has been said
to justify our consideration being next given to State
ownership.

312 NATIONAL GUILDS

IV

When anti-Socialists have comprehended the simple
principles they combat, and have been fair enough not
to obscure the issue, they have revealed such a poverty
of material at their disposal that in anticipating the
probable effects of State ownership of railways one has
unfortunately to assume that the commercial mind has
few or no effective arguments to be put forward openly
against nationalisation of industries in general or railways
in particular.

Curiously enough as it may seem, however, Socialists
themselves may well object that their experience of
State ownership has not accorded with socialistic
principles.

Their avowed object is to secure to all workers the
full reward of their labours, and it would be useless to
blink the fact that in socialising (say) the post office, by
the State, and the tramways, or gas, or water, by the
municipalities, this object has not been achieved.

Labour incident to postal service, or to socialised
tramways, gas, or water, has not been rewarded by its
just share of the public wealth, and the " unrest " of
the workers in these industries is scarcely less acute than
in other businesses.

The cheapening of the postal service, street travelling,
gas, water, etc., has appreciably reduced the working
expenses of commercialism by contributing to the cheap-
ness of labour; and the standard of comparison of
labour's remuneration when State or municipal em-
ployees agitate for less irksome conditions, is always
the wages paid by privately owned concerns.

If it even be conceded that the State or municipal
worker is usually comparatively better circumstanced
than similar private labour, this merely proves that a

APPENDIX II 313

partial progress has been made ; and the effect of
the doles given to commercialism by means of cheap
services or cash payments in relief of rates is lost
sight of.

Penny postage might become universal with foreign
countries and be of wide benefit, yet be quite the reverse
to the postal employees themselves. Parenthetically,
foreign penny postage will only become universal when
it has first been found of some moment to trade, i.e.
when the large foreign merchant houses see in it in-
creased profits to themselves and have political sense
enough to demand it.

It is the height of inconsistency for any party pro-
fessing the doctrine of " the earth for the workers " to
point, except within well-defined limits, to cheap street
travelling and doles in relief of rates as " benefits "
conferred by municipalising tramways, or to universal
penny postage as the outstanding " benefit " of the
State post office, unless they mean benefits to interests
which they profess to combat .

The unholy desire of the proletariat for cheapness
in everything plays effectively into the pockets of the
dividend pensioners.

It may be taken as a foregone conclusion that if
nationalisation of railways could not be resisted by the
trading community they would seek to turn it to
account by demanding unreasonable concessions in charges
and facilities with the certain knowledge that these would
benefit their own pockets by contributing to maintain
the wages of labour as near to subsistence level as
possible, and the appetite of the proletariat for cheap-
ness would ensure their willing and pathetically mis-
guided support.

The conservative instinct of the propertied classes
is against the restriction of their fields of operation by
State enterprise, but the very tardiness of progress in

314 NATIONAL GUILDS

extensions of State ownership gives them ample time
to turn these almost entirely to private profit.

In a former section I have shown that amalgama-
tion of privately owned lines would be a step forward,
in the sense that saving of waste is increased national
wealth. State ownership could not fail to show some
advance upon this, encroaching as it would upon the
fields of operation of private capital, notwithstanding
the obvious disadvantages of placing a large commercial
organisation such as the railways within the region of
political influence.

The one bold step forward to a National Railway
Guild would be easier, more effective, and, if established
on sound lines from the beginning by a wise, enlightened
people, of inestimable advantage, not only to railway
workers, but to the workers in industries only remotely
connected with transport.

In projecting a scheme for a National Railway Guild
I shall have more to say of both private and State owner-
ship. It would be by no means difficult for the Guild
to conserve all that is good and worthy in both schemes
whilst rejecting the false and artificial which is inseparable
from private or pseudo-State ownership.

The charter of a National Railway Guild would pre-
sumably vest in the State the whole of the railway
properties and in the Guild the almost unfettered man-
agement and working.

It is probable that this would be the first charter,
or amongst the first of two or three charters, and for
an appreciable time the Railway Guild would be co-
existent with, and work side by side of, an almost universal
commercial system.

APPENDIX II 315

Whatever the ultimate ideals of universal Guilds, the
Railway Guild must at its inception, and during the
period of transition whilst other industries were being
guildised, be worked on commercial lines.

The commercial practicability of the Guild idea would
have to be demonstrated, in its first experiments, in
such striking manner that the tangible results would
convey clearly to the country in general the superiority
and manifest potentialities of the new system, and
create an insistent, irresistible call for adaptation of
the same principles to all other industries capable of
guildisation.

Working on commercial lines would mean, for ex-
ample, that the Guild must take over the obligations
and responsibilities of common carriers. If rates for
goods are wanted by the public the best commercial
terms must be given consistent with the services entailed.

If wasteful carriage is done, and it be found, as indeed
it may, that cutlery is carried to Sheffield by rail, cream
to Devonshire, butter to Ireland, fish to Yarmouth and
Grimsby, etc., or that some foreign products take upon
themselves dignified English names by the simple process
of repacking and branding of packages, these matters
must be as nothing to the Railway Guild, however high
its ideals.

Obviously, each of these things is waiting the atten-
tion of other Guilds later to be formed in the Merchants',
Farmers', Fish, and other businesses. The Railway
Guild will have quite sufficient to do for many years in
putting its own house in order.

It may not be out of place here to explain to the un-
initiated, in some detail, the position of railways in the
commercial world.

The revenues are derived almost entirely from charges
for conveying by rail, minerals, goods, live stock, parcels
and passengers ; although there is also income from

316 NATIONAL GUILDS

activities outside those of common carriers, such as
ship owners, dock owners, warehousers, hotel owners,
land and property owners, and carters.

Railways (like canals, trams and port authorities)
are almost unique in that Parliament has laid down
certain maximum charges which must not be exceeded,
and these apply to all descriptions of goods, parcels, and
passengers, except a few special articles of which the
railways are not common carriers.

Every article known to commerce, from common
sand and road-stone to beautifully finished, expensive
furniture, comes under one of eight classes, known as
A, B, C, i, 2, 3, 4 and 5 ; and the maximum powers of
charges for carriage are strictly laid down for each
class. No conscious attempt is ever made to exceed these
powers.

Parliament, however, has not laid down minimum
powers, with the result that, in addition to the eight
" class rates " noted between nearly ever}' pair of stations,
there are millions of " special " or " exceptional " rates
below the authorised powers varying with the value and
kind of goods, risk of carriage, load per wagon, distance,
labour necessary at stations, and cartage ; also every
consideration of moment from the carriers' point of view,
such as competition and the law that no undue preference
may be given one trader over another has been taken
into account.

The special rates have been made by the railway
companies in what were the common interests of commerce
and transport at the time the rates were required.

The proprietors of a new business may have proved
that less rates than the maxima, in fact rates which
could not strictly be said to pay for the service given,
were vital to its successful launching ; yet although
later that business may be soundly afloat and possibly
earning dividend pensions to its shareholders of from

APPENDIX II 317

6 to 40 per cent., the railways are hedged round with
such restrictions that it has rarely been found worth
while to increase a rate once placed as a general rate on
the books.

The restrictions require that the railway company
shall advertise each increased rate, and the onus
is upon the company or companies of subsequently
showing that any increase objected to is reasonable.
This " reasonableness " is such a ridiculous thing that
it is almost impossible without mortgaging the value of
the increase, through law and advertising costs, for a
railway company to prove a case.

Sundry paragraphs are appearing in the newspapers
just now, at intervals, foreshadowing opposition from
trade organisations to the advances of four per cent, in
railway rates made from 1st July 1913.

These four per cent, advances apply only to the rates
I have just mentioned as " special " or " exceptional,"
which are below the maximum powers ; and plus the
four per cent, no rate will be brought above the maximum
legal powers.

What Parliament has given to the railway companies
by the 1913 Act is the power to plead increased wages
in justifying the four per cent, advance of a rate, but it
has not authorised any increase of maximum powers.

This is a brief and fair statement of the matter, but
it will unquestionably become obscured in the process
of the parties reaching a settlement.

Traders say that the four per cent, will more than
recoup the railway companies for extra wages. It may
do so in the case of some companies, and it may not in
the case of others. Rates are on the books between
stations of different companies, and one universal per-
centage of advance was unavoidable for meeting such
cases.

Doubtless where individual traders can prove hardship,

318 NATIONAL GUILDS

the four per cent, must be waived, but they should be
required also to prove to the Railway Commissioners
that they have not passed the increase on to their
customers, and that they will receive no personal benefit
from the concession if given.

As rates will be of the utmost importance to a Rail-
way Guild, I have gone more into detail than I intended,
but I will sum up by saying that it is of advantage to
traders in general that the rates increase should be borne
all round ; it is in effect laid down that railways are
entitled to earn dividends, and therefore every individual
case of remission of the four per cent, makes it more
probable that other traders must pay and make up the
differences in one way or another.

With the advent of limited liability companies the
right or power of existence of any industrial concern is
gauged by its ability to carry an incubus of dividend
pensioners as well as maintain its properties, managers,
and other employees.

In the case of the railways this incubus may be said
to represent in hard cash an amount of roughly fifty
million pounds annually, and by whatever method the
railways are guildised we may assume that for a period,
probably the period during which many other industries
are being guildised, this amount will be held in trust or
administered by the State for the Guild. The incubus is
carried to-day, and there is no harm in its being carried
a little longer, under the name of a trust fund.

A profound faith in the Guild idea, and a preference
for gradual progress, influence me to a desire that the
Railway Guild should work out its own salvation with-
out making any material call for its own purposes upon
this trust fund in the beginning.

In other words, there is a sufficient field for exercising
economy and administrative science in the region of "work-
ing expenses " (some sixty-five per cent, of gross receipts)

APPENDIX II 319

to provide striking and progressive improvements in the
workers' conditions ; but it must be a sine qua non that
what commercialism can now afford to pay for transport
it shall be required to pay under a Guild system. There
must be no condition in a Railway Guild charter that
reduced rates will have to be given all round.

When we speak of workers, we include all who
render service, mental or physical, in the working of
railways, and include the better self of a railway director
which is remunerated by fees as distinct from that part
of his dual personality which is sustained on dividends.

VI

In emphasising that no general reductions of rates or
fares should be a condition of a Railway Guild charter,
I have in mind that many incidental benefits to the
general public and the trading community would natur-
ally follow.

Tickets (ordinary, excursion, season and traders')
would become available over all the lines between the
towns which the ticket is taken out to cover, instead of
by one route or specified routes as now.

Traders at present unable to qualify for special
traders' contract tickets because the nature of their
business necessitates its being divided between different
unrelated companies, although in the total it would
reach the required value if sent by one company, would
qualify for traders' ticket or tickets by their business
being dealt with under one railway authority.

For the travelling public three trains are preferable
to four between the same towns if re-timed, say, from
two trains at 1 o'clock and two trains at 2 o'clock,
leaving different stations, to three trains at 1, 1.30,
and 2 o'clock. Local services would have to be pro-

320 NATIONAL GUILDS

vided for in those cases where the cancellation of long-
distance trains withdrew an intermediate stop.

Goods would be sent in the best manner and by the
most expeditious routes able to take them, as there
would be no interest in the forwarding company taking
traffic by circuitous routes in order to retain as much
proportionate mileage interest as possible.

Canvassers would change their name and functions
and be available to advise the trading and travelling
public, and help in the expeditious handling and move-
ment of traffic.

A strike would be a disgrace to Guild management,
except in remote contingencies, which would carry
public sympathy for the whole Guild.

All traders would be given the same treatment, on
business lines, be their payments for transport worth
three hundred or three hundred thousand pounds
annually.

Above all, what esprit de corps exists now in the
railway service (and there is a wealth of it alive, slum-
bering though it may seem) would spread universally
amongst all grades. Every one knows the difference
between service voluntarily and cheerfully given and
service rendered grudgingly or with ill-will ; by the
former both parties to it are cheered and gratified ; by
the latter depressed. One volunteer equals two pressed
men. The writer has had years of experience of what
can be done when management and staff alike have the
same object before them, and it is in this high esprit de
corps that he places his faith above all other advantages
which guildisation would bring, and which could not
follow any other method of unification.

By the way, he claims no originality for many of the
economies referred to herein, simply mentioning those
which occur to him as simple and understandable to the
general reader.

APPENDIX II 321

Guild railways would be as great an advance upon
State railways as the latter would be upon separate
private ownership, and every advantage accruing to
unification of management would accrue to the
Guild.

No one man knows what economies in money,
brain and muscle are made possible by amalgamation
of railway companies, by State ownership, or by
guildisation. When artificial restrictions have been
removed true development will begin. The method
for stimulating these developments will be indicated
later. Here, as always, " all men are wiser than one
man."

There is not a railway manager in the country who
could not point to some improvement, impossible to-day,
which he would regard as practicable under unified
management.

Take any provincial town in which there are three
or more goods depots owned by different companies ;
each depot will be equipped to take every kind of goods
which is likely to reach it. For example, each may
have cranes of twenty-five to fifty tons lifting capacity,
with street wagons and tackle to cart such weights,
yet any one of the depots would be capable in itself of
dealing with all such freak articles coming into or leav-
ing the town. Waste would be saved by equipping and
maintaining for heavy weights the one depot only most
centrally and favourably situated for such special cart-
age. And so on, duplication could be made unneces-
sary almost ad infinitum.

Tolstoy said, " The rich man will do anything for the
poor man except get off his back " ; and that only
should be regarded as true progress for the workers
which reduces or eliminates usury.

With the advance of science, cheaper working
devices would be applied, and the benefits instead of

322 NATIONAL GUILDS

passing to the general community — another name for
dividends — would be gained for the Guild workers.

The commerce of the country is steadily progressive,
and by converting the railway dividend incubus to a
trust fund the burden would not be increased, but the
additional trade of the country would provide larger
income to the Guild without, for some time, adding
to the staff, except in those grades where shortage
occurred.

Stagnation in promotion, which would certainly
follow company amalgamations or State ownership,
would be compensated for by the general improvement
of pay and working conditions of the Guild. The gradual
diversion of labour to other businesses of a productive
character, as, for instance, agriculture, would be a distinct
gain in national wealth, and, provided the Guild idea
materialised with it, a gain to the workers.

The commercial regime gives us but an imperfect,
yet the only, criterion of comparative values of various
kinds of labour, and during the period of transition by
general guildisation of industries this appraisement
might be substantially followed ; although so long as
wages paid by private enterprise are taken as the broad
standard of values, just so long it will remain obscure
what really is a fair return for any class of work.

With the progress of Guilds, when several industries
will have been worked under the system and the divi-
dend incubus has been entirely removed, a different
standard will have been revealed, and those private in-
dustries which cannot conform to such standard will be
considered, in comparison, sweated trades.

The element of competition will also have made it
more difficult for private enterprise to command the
same class of service, and in its own struggle for existence
it will have had to pay higher wages even at the expense
of decreased profits.

APPENDIX II 323

By transferring the railways to a Guild no dis-
placement of labour need be caused, the surplus
being applied to reduction of hours and the increase
of efficiency.

The money economies in the beginning, say after
the first year, should be apportioned to the various
grades. Salaries of officials, though sufficiently low in
all conscience for the responsibility assumed, might be
substantially unaltered in the beginning, adjustments
only being made to remove glaring inconsistencies re-
vealed by the comparison of different companies' salary
lists.

The first attention should be given to reducing
hours of labour and personal risks, and to providing
at least a dignified and healthy life for the lowest paid
grades.

Advantages peculiar to Guild working would arise
out of the spirit engendered throughout its members.
It would be interesting to compile figures of all rail-
ways and show the amounts paid annually for loss and
pilferage of goods and parcels to be compared after-
wards with such disbursements under Guild manage-
ment. Give every worker an interest in the business
and an army of detectives is created which would make
the risk of discovery and punishment such that the
game would not be worth the candle.

VII

The legitimate aim of individual or private enterprise
is always towards monopoly, be it of land, material,
method of production, power of purchase, sale, trans-
port, skill, ability, or labour. Monopoly once secured,
and the danger of unfair competition by sweated labour
or by the deception of shoddy production once past,

324 NATIONAL GUILDS

private enterprise can then pay such wages as may
appeal to its conscience as fair.

True, private enterprise has often to be satisfied with
the monopoly of some small power incident to its par-
ticular line of business ; but this accomplished, by com-
bination, agreement with competitors as to prices and
qualities, or by length of purse, private enterprise then,
unfortunately, begins the plunder of the public by the
simple method of fixing its own prices so as to obtain
the largest possible portion of the necessities and luxuries
produced, nationally or internationally.

The amount of plunder over and above a fair return
for labour is most often received as, or, at any rate,
ultimately converted to, income in the shape of dividends
on capital.

These dividends extracted from the public wealth
really belong to the public.

It is only, however, when nationalisation or muni-
cipalisation occurs, in such directions as railways, trams,
gas, etc., that a strong demand arises for return of these
profits to the community by cheaper services, or doles in
relief of rates or taxes.

It would be impossible to resist the justice of an
appeal in the case of nationalised railways for such
profits to go to the community, after payment of reason-
able returns to labour, if private enterprise were also
returning its profits to the same source, and if it were
known what a fair return for different classes of labour
is, or if the " community " really meant the whole of the
people.

We know, however, that so long as the wage system
ensures nothing more than an average subsistence to
labour, the community is simply another name for
capitalism, and nationalised railways would in effect
belong to private enterprise. In other words, the
country would own the railways, and in its turn the

APPENDIX II 325

country would be owned and run by private enter-
prise.

It should not be a difficult thing to create doubts in
the mind of a working man as to State ownership being
little, if any better at all, than private ownership, so long
as it is possible to point to under-paid postmen and gas-
stokers employed by State or municipality.

Where labour has secured some sort of monopoly its
working conditions are better ; and where private enter-
prise has some monopoly and labour has not, any wages
paid over and above the recognised standard are purely
a matter of goodwill of the paymaster.

The policy of a National Railway Guild at the begin-
ning should be that what net savings can be effected
by the Guild, over and above those made in the past by
private enterprise should at once become the property
of the Guild workers.

After the transfer to a Guild trust fund of the fifty
millions per annum (or whatever was found to be a fair
average amount of annual dividend at the time of
guildisation) and the adjustment of the most pressing
necessities of underpaid Guild workers, every million
pounds which is gained might be apportioned to the
various grades on the basis of present salaries or wages
received.

The pay of an official receiving £500 per year should
be increased exactly by ten times as much as the pay of
a porter receiving £50 ; and by this method the measure
of benefit conferred by the Guild system would soon be
apparent by comparison with salaries and wages of
similar labour under private enterprise.

If an official is worth ten times as much as a porter to
private enterprise he may be considered as worth pro-
portionately more to the Guild, until some fairer standard
is revealed by a general guildisation of industries.

Roughly, every grade in a railway service has its

326 NATIONAL GUILDS

recognised standard of wages or salaries. It is laid
down what each place is " worth," and the basis fixed
could be worked upon during the initiation of the Guild
system ; with this proviso, that any position must be
attainable by any Guild member provided he have the
qualifications necessary to it, no regard whatever being
paid to agnation or outside influence.

After general guildisation of a number of industries
has taken place, and the dividends transferred to trust
fund have wiped out all indebtedness, this enormous
wealth would be available for general Guild and national
purposes, and for increasing the pay of such Guilds as
perhaps the Teachers' Guild, the Post Office Guild, or
any other Guild whose source of income is wholly or partly
from national or municipal funds.

As will be shown later, it would not be necessary for
a single official to be added to the personnel of the Railway
Guild, and per contra, no labour displacement whatever
need take place.

What labour is maintained by the railways to-day
could be maintained by the Guild. Labour economies
would arise naturally by superannuations and deaths
where it would not be necessary to fill the places except
by the reorganisation which would have been going on
in the ordinary course of Guild development. Officials
and men would only need to be replaced from outside
the Guild as shortages actually occurred.

Parliament has already laid down that rates may not
be increased without its consent. The Board of Trade
and the Railway Commissioners protect the interests of
traders where injustice can be shown.

There remains little need for further restrictions by
the State beyond Parliament ensuring that no public
facilities must be withdrawn unless it can be shown that
such have not been in accord with commercial usage,
i.e. that they are wasteful and unremunerative.

APPENDIX II 327

A Guild system would receive such careful attention
by the general press that the publicity of every small
failing or apparent failing would be adequate protection
itself of the public interest. Every fatal accident, every
public inconvenience, would receive far more attention
than now, and the Guild would find it more desirable to
remedy evils than to excuse them by comparison with
statistics past or contemporary.

There are many minor annoyances a Railway Guild
would remedy that would be unaffected by nationalisa-
tion.

Take the ordinary tipping system to which all
travellers have to conform : though popular estimates
are probably far above actual figures, a fair amount of
money passes in this respect.

A small gratuity given in recognition of a service re-
ceived is defensible, although the receiver places himself
in an inferior and servile status by accepting it.

A gratuity given to obtain something to which one is
not entitled is a bribe.

For a coin, I have known a first-class passenger to
secure the whole of a compartment, and use the seats
for luggage, the proper place for which was the guard's
van ; the door being locked whilst other passengers
have had difficulty in finding seats before the train
started. Similar unscrupulous bribing is done regularly,
to the great inconvenience of the public generally and the
good of no one.

It is almost impossible for the public to prove such a
case against the culprit, but let the Guild make the
receipt of tips an offence and witnesses enough would
be available.

Tipping, either as gratuities or bribes, would have to
go, as it would be a necessity that the actual pay of
Guild workers must be officially known.

Numbers of offences for which officials have now to

328 NATIONAL GUILDS

administer deserved punishment could be left to the
men of the grade to punish, and the result would be
sure and effective, without the cry of victimisation
which is apt to arise regardless of the true merits of the
occasion.

At the risk of repetition : Nationalisation would be
followed by the results of economies being frittered away
in the shape of reduced rates, increased uncommercial
facilities, and political patronage, the workers being left
substantially as before.

Guildisation could secure the results of economies to
the Guild workers than whom none have better title to
them.

VIII

The terms upon which the property of the railways
is acquired by the State will be of the highest moment to
the Guild, as those terms would be taken into account
in defining the financial obligations of the Guild to the
State and seriously affect the prospects of Guild workers.

It stands to reason that much would depend upon
the bargaining power of the two parties at the time of
the purchase, and great care would have to be exercised
so that financial obligations were not placed upon the
Guild above what it should reasonably be called upon
to bear.

To guarantee for ever an interest payment based on
dividends under company management could not be
reasonably entertained. Nor is it desirable that some
smaller interest should be given in perpetuity as the
object should be for the Guild, at some not unreasonably
distant date, to be freed from capital obligations ;
leaving it, so far as property in the railway is concerned,
to be called upon only to contribute to the State such
amount as is necessary to maintain the properties and

APPENDIX II 329

provide for all improvements, extensions, and innova-
tions as they become necessary by the progress of
science, and the requirements of the commercial and
travelling public in respect of transport and its affinitive
services.

For purposes of simplicity it would be best that each
railway should be considered separately and the amount
of its cash value fixed. If payment of the purchase
price is extended over a period of years some addition
would have to be made for this accommodation.

The functions of the directors of each company would
then be purely financial, i.e. the apportionment to the
shareholders of the annual purchase payment as received
from the State. The Guild would also be free to
negotiate for the services of those directors willing to
join it.

In valuing the property of each of the fifty or more
separate railway companies, there might be a combina-
tion of appraisement from average market prices and
condition of the property.

For example, although the prices at which trans-
actions have actually taken place, on the Stock Exchange
or elsewhere, are generally some criterion of value based
on dividend-earning power, it may be found that a
company has paid excessive dividends when judged
from the point of view of condition of property, i.e. the
line may have been " starved " to maintain dividend
rates. If salaries and wages below the general standard
have been paid with the same object, this should also
be allowed for.

The purchase terms most generally favoured, I
believe, are at twenty-five years' average profits, i.e.
£100 of stock having, for twenty-five years, averaged
dividends of 4 per cent, would be capitalised at par
value of £100. This might be taken as fair in the case
of a railway property well maintained. Stock of another

330 NATIONAL GUILDS

railway having paid the same average dividend of
4 per cent, may have done so out of second-rate equip-
ment and by maintaining low wages and salaries, and
this should not receive the same purchase price, but
account should be taken of the two factors mentioned,
and a lower amount than 4 per cent, substituted as
purchase basis, say 3^, or even 3 per cent, if
necessary.

To ignore considerations of condition of property
and rates of salaries and wages paid by a company
would be to place a premium upon the success of the
shareholders in squeezing high dividends to improve
the twenty-five years' average, irrespective of the real
value of the business.

Taking all the railways together, whatever the annual
aggregate amount paid in dividends and interest may
have been (say fifty millions annually), it should not be
necessary for the State with its sound guarantee to have
to call upon the Guild to provide an annual payment
nearly approaching such a figure, especially if the State
guarantee of payment extended over a period of two
generations.

If the State chooses to borrow the money and pay off
the capital value to each company at once, there would
be no objection to its doing so, so long as the smaller
interest to be paid on Government bonds would admit
of the fifty million pounds annually to be paid into a
trust fund by the Guild meeting the Government interest
and also effacing the debt entirely within a period to be
calculated.

In regard to the bargaining power of the Guild
prospective with the companies, through the States as
intermediary, it would be well at this point to consider
what are the essential steps to be taken for the purpose
of strengthening the railway workers and placing them
on bargaining terms.

APPENDIX II 331

A reperusal of this series will reveal that no active
help can be anticipated from large trading interests, as
the conversion of the railways from private to Guild
management cannot promise any benefits of a " material "
nature to those already comfortably and preferentially
served under the existing regime ; although, as para-
doxes abound, there may be some intelligent and
benevolent individuals amongst large capitalists who
have the honesty of character to be heartily nauseated
with their enforced role of public plunderers, and willing
to offer no active resistance to a reformation provided
its soundness can be effectively demonstrated.

The case of the enormous number of small firms is,
however, quite different. They have nothing to lose
and everything to gain by a guild regime which would
serve them in many ways, principally by its power of
resistance to pressure of the purse, politically or other-
wise, of their large competitors.

It is more important that the proletariat outside the
Guild should be educated to understand that the im-
provement of any workers' conditions even above their
own must in the end be beneficial to themselves, if they
will join in a campaign against cheapness of any kind
of labour, and work shoulder to shoulder with railway
employees in their endeavour to bring into being a
Railway Guild, or indeed with any organised labour
enlightened enough to make guildisation of its industry
its first object.

The most important step of all is in the direction of
solid organisation of the railway workers themselves.
Let them concentrate upon complete monopoly of
railway labour with a realisation that officers and men
alike are carrying the same burden upon their backs —
the burden of the dividend hunters and dividend
pensioners ; realising at the same time that to throw
off the dividend incubus in its open form, and take on a

332 NATIONAL GUILDS

similar load by reducing charges for services under the
name of nationalisation, will be little or no lightening
of the burden.

By the employees in each industry concentrating
their efforts upon the acquirement of entire monopoly
of their labour in order to secure Guild conditions the
complete emancipation of the wage slaves can be brought
about.

As has been ably demonstrated by various writers
in The New Age, the proletariat in their highest aims
have never looked beyond a lightening of their con-
ditions, " some little more fodder, some slightly easier
harness," to be purchased by higher wages when
secured, only to find that prices are put up against them
almost to the point of the advantage gained, and to
the increased disadvantage of the unorganised or fixed
wage classes.

Striking under these conditions is in the end simply
a diffusion of strength and union funds, the only
advantage of which is the fighting experience gained
for use in a greater cause. This experience, however,
is more than nullified by the tendency of the public to
vent their irritation against the workers for engineering
sectional, and in the end abortive, disruptions of trade ;
whereas in a clear logical cause the public sympathy
might be depended upon.

As I write, the press reports of the Trades Union
Congress record the passing of the sixteenth annual
resolution in favour of nationalisation of railways,
with, for the first time, a protest on the part of an
enlightened delegate that it would be " a pettifogging
middle-class reform," and the further significant resolu-
tion, also passed, of the Fawcett Association pledging itself
" to work steadily in the direction of increasing democratic
control both by the employees and the representatives
of the working classes in the House of Commons."

APPENDIX II 333

Let the " nationalisation " resolution die its natural
death and be replaced by a resolution in favour of a
National Railway Guild, with the appointment of a
committee to report in explicit terms annually what
means have been used during the year to forward the
project, and practical steps will have been made towards
real emancipation of at least one large section of the
great labour burden carriers.

IX

Reverting to the constructive side of Railway Guild
working, it is again necessary to describe the present
system of management in those features which are most
easily adaptable to the proposed new conditions.

The head of any well-managed industrial undertaking
displays one side of his business acumen by the extent
to which he keeps in touch with the responsible executive
under him, and encourages all ideas which may develop
into practical utility. It depends upon the size of the
undertaking whether this feature is one of mere personal
intercourse or a definite system of organisation.

Thorough organisation is the great secret of efficient
railway management. Each officer has his clearly
defined duties and responsibilities, but he constantly
sees exceptional conditions arising which may affect
his responsibilities in common with those of officers of
similar position at other places on the line, and even at
places on other companies' lines.

The machinery for ventilating difficulties as they
arise, and for propounding, comparing, and selecting
ideas bearing upon them, with a view to evolving working
regulations, varies with different companies according
to their methods of organisation.

With all companies it is an understood thing that

334 NATIONAL GUILDS

any feature out of the ordinary course which may
contain elements likely to develop into some degree of
importance, is at once reported to the head authority
by correspondence, and the majority of smaller questions
are treated and settled in that way.

It will be evident, however, that commercial, con-
structional, or train working questions must constantly
arise that affect more than one section or department as
well as various places, and if all such had to be personally
adjudicated upon by the general manager his hands would
be more than full.

To meet such varying circumstances a highly organ-
ised company has a more or less strictly ordinated
system of meetings to which officers of the same grade
from different places bring their conundrums for solution ;
and in case of a deadlock, the head is there to issue his
fiat.

For instance, separate meetings take place, more or
less regularly, or as occasion arises for such meetings,
of goods agents of a district, passenger agents,
canvassers, district goods managers, district passenger
superintendents, goods or passenger train superintendents,
conciliation boards (!), and these meetings are usually
presided over by a district goods manager, district
superintendent, goods manager, superintendent of the
line, or general manager, according to the nature of the
meeting and the importance of the subjects down for
discussion.

Matters which have interest for all companies, especi-
ally if they affect the railway clearing house system and
call for some definite ruling to be followed by all com-
panies, are discussed by committees and decided at meet-
ings of companies who are parties to the clearing system ;
which necessitates regular inter-company official meetings
of the various ranks separately, such as general managers'
meetings, superintendents' meetings, goods managers'

APPENDIX II 335

meetings, accountants' meetings, mineral managers'
meetings, Continental managers' meetings, etc. ; and
there are standing expert committees of each to settle
details and clearly define points at issue, expressing
opinions or otherwise as may be necessary for guidance
of the full meetings.

It is by a continuation and elaboration of this system
of meetings that a National Railway Guild would have
to work in the beginning in order to bring gradually into
effect a unified management, and ensure the development
of every economy and efficiency.

There would be, of course, the essential difference
that the officers would be freed from all parochial con-
siderations and the point of view be widened, so that
the national railway system would be administered as
a unit, and the administration not be hampered by
technical adjustments of separate companies' interests.

The reorganisation necessary would involve much
clerical work, but fortunately the unification would at
once set free a large staff for the purpose which at the
present time is engaged on work necessary only because
of duplication of companies and apportionment amongst
them of moneys received for interchange work. There
would at once be available some two thousand officers
and clerks of the railway clearing house, and all those
officers and clerks of the companies whose present duties
would be rendered unnecessary by the new system.

Questions for consideration would require to be
codified as a first step, and the proper committees ap-
pointed to deal with them, revised definitions of the
responsibilities of the meetings being laid down.

For a time the various officers of the numerous com-
panies could remain in charge of their individual sections,
departments of the same character being gradually
assimilated, and the whole line converted into new
divisions.

336 NATIONAL GUILDS

For example, meetings would be necessary of the
following head officials, respectively, of all existing
companies : — General managers, secretaries, goods
managers, mineral managers, superintendents, rolling
stock officers, engineers, surveyors, and estate agents,
signal and telegraph superintendents, accountants, steam-
ship officers, etc.

The matters for decision by these heads of divisions
would arise both in themselves and by questions raised
at committees of, say, station agents, stationmasters,
station foremen, station inspectors, and meetings of
the various departmental heads mentioned in former
articles.

In this way would be re-formed a system of manage-
ment by which would be stimulated ideas and suggestions
of improved working from those acquainted with the
actual conditions, with the important incentive that
savings of labour would soon mean short hours, and
no loss but improvement of pay in all grades would
follow economies ; with the certainty that every economy
instead of going to the swelling of dividends would be
reaped by the Guild members themselves.

Under nationalisation, or company amalgamation,
individual general stimulation of ideas would be missing,
as officers and men would be required to devise means,
first, of reducing the numbers of men, then of reducing
the numbers of officers, in the full knowledge that the
ultimate results would not materially reduce the hours
to be worked or effect any substantial improvement of
wages or pay.

As I have indicated, many committees would be
necessary, and I would carry the democratic system to
its limits by encouraging meetings of all grades ; for
the actual work recorded at such meetings would by
no means represent the full advantages of them. The
outlook would be broadened, and the capacity of every

APPENDIX II 337

one improved ; ideas and practical proposals would be
the natural outcome ; and a spirit of understanding and
toleration would be generated from which officers and
men of higher efficiency would spring.

When a choice between nationalisation of railways
and company amalgamations is discussed, the former
is always associated with " Bureaucracy," and vague
hints are given of the evils which would follow such a
new departure, the assumption being encouraged that
nationalisation and bureaucracy are inseparable. So
they are ; and so are company amalgamations and
bureaucracy ; and again ordinary disintegrated company
management and bureaucracy are inseparable. The
one effective method of management is the bureaucratic
method, and, as I have shown, we have it already. By
steadily avoiding looking at the actual facts and admitting
them, the public is led to believe that any scheme of
nationalisation must carry with it additional appoint-
ments of numerous Government officials. Then the
door is open to political patronage, and the way is clear
to saddle the industry with another form of parasite
in place of the usual benevolent dividend drawers.

Let it be understood clearly that a National Railway
Guild need not carry with it the appointment of a single
additional bureaucrat. One able Guild president,
selected from the large number of eligible officers, could
be made answerable to Parliament and the public for
the efficient administration of his charge, and there need
be no more national political influence introduced into
the railway management than there is in the manage-
ment of municipal trams. The latter, of course, are
subject to local politics, but to my mind unnecessarily
so. If it is possible to define the obligations of separate
railway companies to Parliament by Acts of Parliament,
and provide machinery in the shape of the Board of Trade
Railway Department and the Railway Commissioners

338 NATIONAL GUILDS

for ensuring that these obligations are carried out, without
internal interference with the private company manage-
ment, it should not be difficult to prescribe the obliga-
tions of a National Railway Guild by Guild charter, and
refrain from the appointment of a swarm of Govern-
ment officials to swell the already over-numerous bureau-
cratic officials whom private companies have found it
impossible to work without — and be it remarked that
private dividend-seeking companies do not appoint
officials from benevolent motives with the consent of
shareholders.

It might be necessary to make certain of the exist-
ing officials responsible for reporting annually to the
Board of Trade upon the financial soundness of the
Guild and efficiency of plant and property, but even
this should depend upon the nature of the assistance
received by the Guild from the State at the transfer of the
undertaking from private companies, and would only
affect such officials as auditors and engineers.

X

No one can foretell what the position of affairs in
the railway world will be when the present crisis is past.1

It is clear that the union officials have in front of
them the opportunity of a lifetime, not only of showing
themselves capable of moving fast enough to satisfy
the veriest firebrand in their following, but also to ex-
pound an idea in advance of anything ever known in
this country or any other ; and the practicability of which
cannot be effectively assailed by the most experienced
railway officer in the world.

Should it be too much to expect that the foregoing
articles on this subject will have been carefully digested

1 This section refers to the railway strike in the spring of 191 2.

APPENDIX II 339

by the leaders of the railwaymen ; in order that he
who runs may read, I will enumerate a few essential
points which if acted upon are quite capable of rendering
the present leaders immortal.

Assuming that a general strike takes place and the
railways are stopped, the usual negotiations will be en-
tered into, through Government representatives, between
the men and the officials.

The issue will undoubtedly have widened from the
question of the sympathetic strike, and it will almost
certainly be found impossible to agree upon any policy
satisfactory to both sides and the public as to whether
men should be compelled to handle goods from firms
whose employees are out on strike.

The Government, as an extreme step, may offer to
nationalise the railways. If the men's leaders are weak-
kneed enough to accept this, surely they will be suffi-
ciently alive to require conditions. The conditions to be
demanded should include at the very least :

(i) That no general reductions of rates, fares and
charges must be given with the change, as this would
affect the revenues from which the betterment of the
men's hours and pay must come.

(2) No wholesale displacement of labour must take
place, the reductions in numbers being left to the effluxion
of time, retirements, superannuations and deaths.

A nationalised railway service pure and simple would
be no better for the rank and file of the workers than the
Post Office is to-day.

May we hope that the union leaders will advance
beyond the nationalisation idea, and put forward a firm
demand, and stand by it, for the railways to be managed
by a Guild composed of officers and men. If they will
do so and require the foregoing conditions, with an addi-
tional one that all savings in money and hours are to be
apportioned strictly and fairly to the present salaries

340 NATIONAL GUILDS

and wages attached to various ranks, whether represent-
ing mental or physical labour, they will have shown a
capacity and grasp which will never and cannot ever be
disputed.

The Guild on its part could fairly pledge itself to pay
to a Government Trust Fund, for the purpose of enabling
it to acquire the railways on business terms, an annual
amount equal to the average annual total dividends paid
for the last five years.

It will be easy to test afterwards whether the Govern-
ment make a good bargain or not by quotations on the
Stock Exchange of the shares of the respective private
railway companies, and if too much is paid for the rail-
way properties it will be at the door of the Government
to answer for saddling the Guild Trust Fund with an
unreasonable debt.

The outstanding feature of such an arrangement
would be that the first step would have been made to
remove for ever from the shoulders of the workers the
burden they carry in the shape of dividends to non-
workers.

XI

The operations of a National Railway Guild would
be so interwoven with those of other transport activities
that sooner or later the Guild would find it advisable
to federate with other transport industries.

In fact, seeing how closely transport companies
other than railways work at the present time with
the railways, it seems desirable that a National Trans-
port Guild should be the aim of the Railway Guild
from the beginning.

Railway companies already own canals, docks,

APPENDIX II 341

steamers (over-sea and lake), motor vehicles (passenger
and goods, rail and road), and employ to a large extent
the street cartage companies who bring goods to or from
the goods depots.

To embrace the whole of the system of parcels, goods
and passenger transport (inland, coastwise and Conti-
nental) into one Guild would remove many existing
inconveniences.

As an example of how the competitive system grinds
all, to the good of none but those who live on unearned
incomes, let me give some particulars, simple in them-
selves, but referring really to a no small part of the
general transport system of the country.

In London and provincial towns the railway com-
panies charge scheduled cartage rates per ton for various
kinds of goods, which rates are for the removal of goods
between the station and any business premises within a
denned area.

It is obvious that the nearer the warehouse or factory
(within that area) is to the station the greater the pro-
bability of a private haulier being able to do the service
at less than the railway companies' charges, which are
fixed with an eye upon both short and long distance
cartage.

This has led to firms who are within reasonable
proximity of a station putting their cartage into the
hands of private carting contractors, who underquote
the railway companies (and each other) so long as they
can see an existence or profit out of the returns after
purchasing their labour as cheaply as it can be obtained,
and combining the firms' cartage business whether it
be to or from a railway station, docks (if there are any),
or other places in the town.

The same thing applies, by different methods, to
railway parcels and goods business carried by the railway
companies at rates which include collection or delivery,

342 NATIONAL GUILDS

the private firms when they do the cartage being
paid partly or wholly out of allowances made by the
railway companies from the inclusive rates they have
charged.

These private carting contractors cannot underquote
each other beyond certain points without resorting to
the cheapening of labour to its lowest subsistence level,
and this often leads to the formation (or contributes to
the formation) of associations of cart or motor vehicle
owners.

The men also become more or less organised, and
labour conditions being bad, strikes may ensue.

For one thing, the cartage contractors must give some
advantage to their customers over what the railway
companies give, either by charging less or by including
some other services in an all-round rate ; and for another,
they must charge less than it would cost the firms to
undertake a cartage department of their own.

Whilst labour is exploited by small capitalists, these
themselves are in turn exploited by other capitalists,
all together being the servants of the most powerful
business ; the power of resistance to pressure being pro-
portionate to the extent to which they have secured some
kind of advantage, traceable as a rule to monopoly.

It is almost as easy for the small firms to convince
the men when discussing terms together that they are
under great hardship, as it is for the men to show that
instead of a living wage they are being paid only a bare
subsistence.

What then has to be done ? Shall the demands of
the men be met to the point of exterminating the small
firms ? In that case the move is towards a monopoly
on the part of the larger firms.

It never seems to occur to the men and masteis that
they are both under the same driving force — the need
for providing dividends either directly to their own

APPENDIX II 343

shareholders or indirectly to the shareholders of those
firms who squeeze them down to the lowest charges.

The effective step is for them to join hands, pay out
the capitalist, and work the transport business of the
town as a monopoly, the good with the bad, the income
from the labour to be justly apportioned between officials
and men.

In trade generally it is the business which pays the
largest dividends (or ridiculously excessive salaries) that
plunders the public to the greatest extent one way or
another, and it is often the business which makes the
narrowest profits which is compelled to resort to the
greatest pressure upon its wages list (a synonymous
term for men).

The benevolent business magnate who pays 40 per
cent, to his shareholders has usually sense enough to
avoid " labour unrest " by paying a little above the
average rate of wages ; but he sees to it that other firms
are squeezed by him in securing the 40 per cent., and
in actual fact it is he who pays subsistence wages only,
although done by the proxy of firms he exploits. In
purchasing his raw materials he is not likely to pay the
ull cost of their production plus forty per cent, on the
capital laid out in the business of his suppliers. Not
likely ! It is only when he comes to sell that there is
virtue in extorting forty per cent.

How any man making ten, twenty, or thirty per cent,
upwards can oppose railway companies in the House of
Commons when they seek to consolidate or extend their
monopoly so as to be able to pay something more
than a miserly five per cent, (say), is a mystery to
me.

It is no consolation to the community, surely, to be
told that whereas the railway dividends are paid by
monopoly conferred by the State, the monopoly of the
private business magnate is not in writing. The earnings

344 NATIONAL GUILDS

of railway companies are restricted by competition and
Acts of Parliament. The earnings of business firms are
often almost unrestricted by either.

As the time seems far off when a Government will
inquire into the methods by which excessive dividends
are made, and their effect upon the community as a whole,
with a view to compelling the return of unjust profits
to the State, the most practicable step seems to be to
convert the industries most adaptable and ready into
Guilds, and gradually eliminate the profiteer entirely.

XII

I have expressed the opinion that if the doctrine of
sabotage was allowed to permeate railwaymen irreparable
injury would result to the men who should practise it.

The forms of sabotage I had in mind were the ca'
canny principle, under which men would be incited to
work as little as they could be forced to and give the
poorest possible return in quality ; and also the sabotage
mentioned in the following extracts : —

" Take the railway for example. It is quite easy for
the labels on trucks to be put on the wrong ones, thus
causing goods consigned to one part of the country to
arrive at a place far off. . . .

" These are examples of a peaceful form of sabotage
which injure no one except those they are intended to
injure and annoy. . . .

" I think we have said sufficient about sabotage to
convince the opponents of, and the inquirers about
syndicalism, that the workers have no cause to fear the
methods of the advocates of syndicalism, and that the
only ones who need have any such fear are the possessing
or capitalist class."

To this it was replied that " Sabotage would require

APPENDIX II 345

the highest development, mentally and physically, to
carry through the most effective forms of this doctrine."

My comments upon this are that the principle of
shirking work would have to be acted on for a long time
before it affected dividends to anything but an indifferent
degree ; and before this happened every effort would be
put forth to nullify its effect.

All men are creatures of habit to a degree which it
is impossible to realise, and on railways work is done by
men and boys together.

I know of nothing more soul destroying than the
compulsion of devoting nine hours daily to the production
of bad work which could easily be done well in six, — not
even the compression of twelve hours' work into nine.

To do it under supervision would require the de-
velopment of qualities generally regarded as the indis-
putable monopoly of " workshies." When practised
long enough the honest worker becomes actually incap-
able of his former output, and the younger he is the more
difficult for him to divest himself of his second nature.
He is degraded in his own opinion, and disrated in the
opinion of all with whom he comes in contact.

Better far that he should work hard in the hope that
some one, at any rate, will benefit, until such time as an
improvement in the state of affairs can be arranged.

It is quite legitimate and laudable to aim at as few
hours of compulsory work as are absolutely necessary,
but only that the leisure hours thus secured may be
used to follow one's natural inclinations, which allowing
time for full development, will assuredly not be in the
direction of doing nothing.

Loss of stamina and capacity for work is as much to
be deplored, whether the result of poor and insufficient
food, disappointment or despair, or deliberate training,
and this way lies national decadence.

The policy of the earth for the workers provides

346 NATIONAL GUILDS

nothing for the shirkers, and it would be interesting to
hear whether such sabotage appeals to the best and
most intelligent of workmen, or most readily to the low
class worker who is happy to be assured that some
obscure advantage will result from his giving full play
to his natural tendencies.

Intentional wrong labelling of trucks as a weapon
against capitalism is petty, unmanly, and ineffective for
any ultimate good. This, moreover, is described as
" easy," and cannot, therefore, be regarded as one of
the most effective forms of the doctrine which is said
to call for the highest development to carry it out.

Label to Cornwall a truck of building materials
intended for Norfolk, and what has been effected ? At
the worst it reaches its destination in four days instead
of one ; the company suffers no financial loss ; clerks,
telegraphists, and others are involved in unnecessary
and consequently annoying labour ; but the unknown
consignee and his employees, possibly all of whom are
of, or near, the wage class, bear the whole of the
burden.

The master mind which has executed the plan,
doubtless emulating an impossible Raffles, may be
surprised at achieving a reputation little above Bill
Sikes.

Even if the railway company had to pay for the
delay, which would not happen in one case out of a
hundred, it is not liable for consequential losses, and
the workers, including the small employer, who have
probably had to pay off for want of material, are hit
and embittered against their own class.

If all the methods of sabotage are so unhappily con-
ceived the instinctive repugnance to it is justified.

Admitting that it might be necessary to debauch an
entire army for the good of a nation, the need must be
extreme and be capable of demonstration.

APPENDIX II 347

It is so fatally easy to inculcate destructive ideas and
so difficult to formulate a constructive practical policy.
In things essential it is folly to destroy the old before
the new and better has been constructed.

In advocating a National Railway Guild there need
be no delusion that railway employees are amongst the
worst situated of the wage classes. They are not. I
have intimate knowledge of labour conditions far worse,
and which call more urgently for attention, but the very
parlous state of the workers makes them more difficult
of treatment. Their time is not yet.

In the case of the railways, the field is promising.
The organisation is already there, requiring only to be
perfected and adapted to new conditions. The men
have not yet lost the spirit and power to help them-
selves, given educated leaders who can be trusted, and
a simple yet lofty policy ; and a National Railway Guild
is within the region of early practical politics.

Such a Guild once successfully launched, the beneficial
results are evident to the meanest intelligence, and the
cause of the workers of the world would receive a stimulus
which the orthodox State ownership schemes have
failed to impart.

To bring this about the railway workers must realise
who is their public, and earn its respect and sympathy.

The private companies do not usually make the
mistake for long of alienating the sympathies of the
public, but invariably feel its pulse in any new crisis
and move accordingly. Their public is the large com-
mercial houses, the press, officials and others.

The public of the men is the workers of all classes
by brain or muscle, including small traders, sociologists,
and their own officials.

The first Guild will be in the position of invaders
conquering a country in which they have to live after-
wards. The less damage they do, and the more respect

348 NATIONAL GUILDS

they earn, the more peaceable will be both their conquest
and their occupation.

In conclusion, it should be realised that when the
great evil is the extraction by non- workers of incomes
from wealth production, those who take the least in
proportion to capital expended are the smallest burden
upon the workers.

The businesses which pay the largest dividends ought
really to be attacked first, but it is not practicable.

Those workers who are best organised, who have the
highest intelligence and the best resources, will be the
salvation, not only of themselves, but of the great army
of the wage classes.

APPENDIX III

MISCELLANEOUS NOTES

[The following paragraphs were written in response to
various criticisms, suggestions, and questions raised by-
readers of the foregoing chapters as they successively
appeared in The New Age.]

It is one thing to accept responsibility for others, but
quite another thing to take it. A representative is pre-
sumably requested to accept responsibility ; but should
he assume it without request and by force, he is merely
a despot. Our modern capitalists are despots pure and
simple. Nobody ever asked them to accept responsi-
bility for the industry of the country. On the contrary,
they took it by force. It is therefore with no gratitude
that workmen now hear them pride themselves on their
responsible position. It is precisely of their responsi-
bility that an educated proletariat would relieve them.

Why should the Government, a political body, be
troubled with industrial affairs ? It is ill-equipped for
interference as things now stand. Beyond a very
narrow limit, it cannot coerce either employers or em-
ployed. Yet critics assume that its power is absolute.
The Government has several means of disengaging
itself from sole responsibility ; it can make employers
responsible for the maintenance of industry ; it can
make employers and employed jointly responsible ; or

349

350 NATIONAL GUILDS

it can make the trade unions solely responsible. If it
will do none of these things, it must assume responsi-
bility itself by abolishing private employers and reducing
workmen to the status of State slaves.

The State should acquire the railways, mines, etc.,
and then lease them to the unions by charter. If a
private company could be chartered to govern Rhodesia
— a gigantic example of capitalist Syndicalism — the
management of the railways or the mines can surely be
safely entrusted to their respective unions.

Though in our articles we are outlining a complete
system of industrial organisation, its simultaneous
establishment is not contemplated as possible. Some
union will have to begin ; and it will probably be a union
of comparatively educated workers. The medical pro-
fession undoubtedly has the best qualifications for
making a trial of the new plan. Next to them we would
suggest the National Union of Teachers, and next the
Postal Unions. When these have obtained the powers
of nominating their own heads, and of controlling their
own services, the railwaymen and miners will probably
be the next to follow.

If liberty has been proved to be favourable to political
development, may it not be favourable to industrial
development ? Small comparatively as was the change
from chattel to wage slavery, the energy released was
enormous. A much greater release of energy might be
expected from the promotion of wage slaves to the
rank of free self-determinant craftsmen.

The suggestion of a deliberate conspiracy on the part
of capitalists to obtain and maintain their economic
power is scouted only by people ignorant of history as

APPENDIX III 351

well as of their own times. In addition, such people,
being sentimentalists, find it hard to believe that rich
men could be so " wicked." But there is no limit to
the vileness of men ; as there is also no limit to their
potential virtue. That conspiracies of the few against
the good of the many have been carried out, all history
is a witness. If history is not sufficient, we would suggest
an inquiry into the present methods of exploiting native
labour and obtaining native lands in Africa, South
America, and elsewhere. The procedure is stereotyped.
Tax the native and appropriate his goods and services
in payment thereof. He immediately becomes a wage
slave. But the same method was used in England.

Political economists treat of Land, Capital and
Labour as if these three terms were comparable ; but
they are not. What would be understood by Pounds,
Shillings and Pints ? Land and Capital are instruments
of production ; Labour is the only producer. It is by
the control of the producers that capitalists become
possessed of the products.

Rent is not the cost of producing land. Interest is
not the cost of producing capital. Profit is not the cost
of producing commodities. But wages are the cost of

producing labour.

Workmen to-day have only one liberty more than
chattel slaves possessed ; they have a choice of masters.

The eyes of the fool are on the ends of the earth. The
Labour Party are demanding control over foreign policy
before they have as yet control over, we will not say,
domestic policy even, but a single domestic industry.

How does a paramount economic interest establish

352 NATIONAL GUILDS

its paramount political power under an extended fran-
chise ? By means of the caucus. The caucus is to
the electorate what a regular trained army is to a mob.
As the governing classes maintain an army for physical
offence and defence, so they maintain the caucus for
political offence and defence. And as useless as it
would be for the people to oppose the army, so useless
is it for them to attempt to oppose the caucus. But
the caucus is also paid. Who pays ? Not the poor,
but the rich. Consequently the caucus is the paid
standing political army of the existing capitalists, and
by its means, however wide the franchise, they keep
political control.

The best thing the working classes can do in politics
at present is to refrain from voting. They will be called
mugwumps, but the term is no reproach. If at the next
election the polls went down to fifty per cent, of the
electorate, the caucus would be morally defeated. No
organisation is necessary to produce this effect. Let the
workers simply decline to vote. But while the caucus
can rely on polling ninety per cent, of the electorate for
any set of candidates it chooses, its power is absolute.

If one elaborates a revolutionary idea for society, it
is inevitable that the changes involved should appear
at first sight too gigantic to be practicable. If, on the
other hand, the idea is stated simply, and its implications
left to be imagined, it is inevitable that to the majority
of people the proposed change will appear so small as to
be not worth making. In presenting Guild Socialism
at considerable length, The New Age has run the risk of
being charged with spinning another Utopia ; a second
risk is that objection may be taken to projections and
elevations that are not necessarily consequent on the
plan, and to the detriment of the plan itself. But these

APPENDIX III 353

risks we have considered were well worth running for
the advantages derived from prolonged discussion of the
idea itself. It is scarcely possible that many readers
will forget that the wage system must be abolished, if
not by Guild Socialism, by national or international
capitalism. So far, there is no escape from the problem
we have stated. And, enemies apart, it is scarcely possible
but that many readers will fail to see wood for trees, and
in their dispute with us concerning the future miss the
immediate point that a partnership between the State
and the unions is both imperative and practicable. Once
assure a beginning of this, no matter in how small an
industry or in how timid a fashion, the revolutionary
idea is set to work. Time, better than we, will settle the
subsequent problems.

One of the chief advantages from the economic
independence of the workers would be the elimination
of incompetent, brutal and bullying employers and
managers. It is a mistake to suppose that competition
eliminates even incompetent employers ; it does not ;
it merely relegates them to the lower levels of industry ;
but there they nourish. Brutal and bullying employers,
on the other hand, receive a positive preference from the
competitive system ; it is their happy hunting ground,
the field providing the exact conditions for their evil
genius. Not all employers, of course, nor even all
successful employers, are bullies ; but the type of the
manly, gentlemanly employer is fast disappearing ; he
cannot survive under a system that suits the cad better
than it suits the man. But why do the cads flourish
and the men go under ? For every employer there are
waiting an army of wage slaves seeking employment ;
seeking it not as choosers, but as beggars. To men with
only a week's supply between themselves and the work-
house, any job under any employer is Hobson's choice.
23

354 NATIONAL GUILDS

Thus, no matter what the employer may be, bounder,
bully, gentleman, or scoundrel, he has no lack of beggars
for his employment. But once let the workmen have
an economic base on which to fall back, an alternative
to any employment that any cad may offer, the cad
might whistle for men till the cows came home. With
voluntary service substituted for the press-gang, only
the best managers of labour would secure the best men.
The worst would fall to the worst.

The essence of servility lies in the absence of the right
or the power to bargain. Freedom implies both. But our
proletariat have the political right without the economic
power. Civilly endowed as they are with the right to sell
or withhold their labour, the power of withholding it is
limited by their propertylessness to a few weeks at the
outside. Only so long, therefore, as their savings last
have they the power as well as the right of bargaining.
In short, they are politically free, but economically servile.

The difference between ourselves and Mr. Snowden
on the right to strike is this. Recognising the useless-
ness of the political right to strike without the economic
power to maintain a strike, Mr. Snowden would take
from the workers the political right. We, on the other
hand, would add the economic power to it.

Trade unionism has hitherto been engaged in accum-
ulating economic power (in the shape of funds) for use
on occasions of bargaining. But the funds have always
been too small. To be on an equality with the other
party requires that the funds of both shall be equal.
The supplies necessary to enable a union to bargain
effectively should be at least sufficient for a year. With
a year's funds in hand (either collectively or individually
stored), a union could command its price.

APPENDIX III 355

It would be as effective to vote that Germany should
cease building a navy as for workmen to vote that
capitalists should cease enlarging rent, interest and profit,
and reducing wages. The question is, how is it to be
carried out ?

Catastrophe barred, England, a hundred years hence,
will have a different industrial organisation from the
present system, for the present system simply cannot
last. What, therefore, we may ask, will the new in-
dustrial system be ? And will it be the worse or better
for the many than the existing system ? The choice
before us is theoretically wide ; nothing is inevitable.
Shall it be State Capitalism, Trust Government,
Distribucivism (Mr. Belloc's plan), Syndicalism, or
National Guilds ? Left to the State, it will be the
first ; left to private capitalists, it will be the second ;
to Conservatives, it will be the third ; to trade
unionists, the fourth ; but left to everybody, it will
be the fifth.

A trade union is not exactly as strong as the number
of its members ; but it is exactly as weak as the number
of its non-members.

Motto of Capitalism : Every blackleg is worth ten
unionists during a strike. Every unionist is worth ten
blacklegs during employment.

At the old Trade Union Congresses all the decisions
were determined by coal, cotton, railways, and engin-
eering. In the Employers' Congress, called Parliament,
they are still.

We don't want democratic government, but demo-
cratic industry.

356 NATIONAL GUILDS

At a Trade Union Congress we want to hear a boiler-
maker, not a politician ; in Parliament we want to hear
a politician, not a boilermaker.

The economic objection to bureaucracy is that bur-
eaucracy is not really efficient. Why ? Because the
directors of industry under bureaucracy are not them-
selves trained workmen ; they have never been through
the mill.

It is a curious and significant phenomenon that com-
petition in qualitative production grows less keen as
competition in quantitative production grows more
severe. The reason lies in the opening of popular markets
all over the world and in the ease with which machinery
can be manipulated.. Quality demands character in its
producers, whether workmen or employers ; and charac-
ter in its turn demands freedom. As workmen sink
from independent craftsmen to proletariat their character
suffers, the character of their employers suffers, and in
consequence the quality of their work suffers. It follows
that a virtual monopoly in the world market of quality
awaits the nation that first frees its proletariat.

The first business of trade unions is to create a mono-
poly of labour. Labour being the only possession of
the proletariat, they can control that or nothing.

A penny saved is a penny gained. If instead of con-
suming the whole result of my labour I save part of it,
I have added to the community's store of wealth or
capital. (As a bee that gathers more honey than it
eats adds to the capital of the hive.) With this capital
so created by saving I can do one of many things, e.g.,
(a) take a holiday ; (b) feed workmen while they are per-
forming some service for me ; (c) feed people who cannot

APPENDIX III 357

provide for themselves (children, women, Labour M.P.'s,
imbeciles) ; (d) invest it, that is, lend it to somebody
who will exchange it for men's labour and share his
profits with me. Capital is thus liberty, since it gives me
freedom of choice. Without capital there is no liberty.

Capitalists " save " by appropriating from their work-
men the difference between the latter's keep and out-
put. Workmen can save only by economising on their
keep, that is, by foregoing necessities.

Rent, interest and profit are the true savings of
the proletariat — they represent the amount of com-
modities produced in excess of the amount consumed by
the workers. Capital is thus the result of saving. But
whose ?

The prevailing system of industry in capitalist
countries, civilised and " protected," is forced labour.
The proletariat of England must work or starve —
exactly as the natives of Oceana, when deprived of
their cocoanut trees. Wages are outdoor poor relief paid
to able-bodied paupers in return for forced labour.

It is complained that popular education takes the
spirit out of the poor, tames them, and stifles in them
the desire for further education. Who makes this com-
plaint ? Not the employing classes !

As the object of the spirit of the hive is to accumulate
a maximum amount of honey, the spirit of the State
has for its object accumulation in its midst of a maximum
amount of capital or property. Theoretically, it is a
matter of indifference to the State where or in whose
hands the capital is stored. So it be there and increas-
ing— the State is satisfied. What Labour has, therefore,

358 NATIONAL GUILDS

to prove is that property will be increased by Socialist
or Labour legislation. Otherwise, the State must look
upon Labour's demands as the demands of robber-bees.

When the last non-unionist has joined his union,
and the unions are all linked up in a Federation of
Federations, what will they do ?

The State is always an exemplary Conservative, since
it is the nation's organ of self-preservation. Not for
fancy nor for the purpose of improving itself will the
State act, for that would be taking risks ; and the State
must never voluntarily take risks. Threaten its life,
however, and the State will do anything. Far from
its being a crime, therefore, to threaten the State, the
more it is threatened (so it does not become panic-
stricken) the better for progress ; since to each such
threat the State will respond by a new device for pro-
tecting itself. States become progressive when anarchists
are indulged in them ; but anarchists must be very
powerful to produce any effect, and very subtle not to
induce panic.

The State is the national safe-deposit.

Property is power.

It is " bad " men who assist the " evolution " of the
world. Good men are content with simple things and
would not exploit beauty, innocence, quiet or their
fellow-men. Good men would be content in Eden ; but
the " bad " must attempt to conquer the world, even at
the cost of Paradise. All good men are reactionary and
conservative. All bad men are progressive and liberal.
Lucifer was a captain of industry, and the Devil is a
Whig.

APPENDIX III 359

Loyalty in the Labour movement : The proletariat
army must be disciplined both to give and to receive
orders. There must be, in fact, military loyalty. But
the first condition of military loyalty during action is
that the officers must inspire confidence. Motto for
the rank and file : Shoot or obey your officers.

If the employing classes are to remain for ever in
possession of all capital, and the proletariat are to remain
for ever mere wage slaves, the best advice we can give
to the latter is : Educate your masters.

The fallacy in the assumption that Labour is one of
the instruments of production can be seen by comparing
Labour with Land and Capital. Land can be separated
from the landlord ; capital can be separated from the
capitalist. In employing land or capital we are not
bound to employ a landlord or a capitalist. But Labour
is inseparable from the labourer. In employing Labour
we are therefore bound to employ the labourer. In
fact, the labourer, is Labour. Thus there are only
two real instruments of production, namely, land and
capital. The labourer is the sole user of them,
though the proceeds go to their owners and not to
himself.

It is, of course, socially profitable to have a healthy,
contented, and trained population ; but so long as it was
not privately profitable, employers made no effort to
ensure a sound nation. As employers become united in
trusts, etc., their interest in universal efficiency be-
comes common. Hence they are being led to take
an interest in public health and such like. Not,
therefore, to Christianity or to brotherhood do we
owe the modern movement of Social Reform — but to
business.

360 NATIONAL GUILDS

It is significant that the trend of trade unionism to-
day is towards the universal organisation of the crafts.
The latest — and, incidentally, the largest in the world
— is the National Union of Railwaymen. Substitute
Guild for Union and, along with this, change the idea of
partnership for the idea of subordination, and the Guild
system will have begun.

Already, in common language, the ideas associated
with Guild industry are familiar. We speak of the
" veterans " of industry as if, indeed, they had been
employed in the national " army " of industry. Men
draw their " pay " and reveal under this term their
hatred of the wage system. They " retire " on a " pen-
sion " if possible, and are henceforth " superannuated."
This natural vocabulary suggests the naturalness of the
system from the thought of which it springs. Every man,
even when working actually for a profiteer, prefers to
think of himself as working under a national service.

Formerly it was the king's service that inspired
loyalty and high effort. We have to learn to transfer
the nobility and associations of the Crown to the nation.
" By National Warrant " is a higher title than " By
Royal Warrant."

For the work they were selected to do, the Trade
Unionist Members of Parliament have been well chosen.
The blame of their failure lies neither upon them nor
upon the unions that elected them ; it lies upon the
impossible task they undertook and were given to per-
form. Once the will of the trade unions is turned to-
wards making Guilds of themselves, they will find suit-
able leaders as they have in the past. The present
generation of leaders will never be repeated, but it will
be renewed.

APPENDIX III 361

The first union that establishes a complete monopoly
of its own labour will find the employers in the
industry paying court to its leaders and offering
partnership — including co-management. Then will come
the opportunity of the State and of Labour states-
men to decide between National Guilds and National
Trusts — the former consisting of the State and the
unions, the latter of private capital and labour in
partnership.

Wages are the price accepted for forced labour in lieu
of starvation.

Social Reform has almost come to the end of its
tether. It will continue until (a) all the taxation of
the wage-earners is repaid to them in State doles ; or
(b) the investment of capital in labour ceases to be more
profitable than its investment in machinery. The bank-
rate is the minimum which Social Reform, as an invest-
ment by the State, must produce. Unless a measure of
Social Reform can produce that, it cannot be passed by a
capitalist Parliament.

Even if the State could double wages to-morrow it
would not ; since it does not believe that higher wages,
spent by the workmen themselves, would yield an
equivalent increase in efficiency, or the ability to pro-
duce profits. The busy bodies of the State are certain
that increased wages would best be spent by themselves
— hence, bureaucracy.

The Labour movement should resist every attempt
on the part of the public authorities to establish trade
schools. The creation of trade schools will be one of
the duties of the Guild. From the State we demand
the means of educating the citizen ; to the Guilds we

362 NATIONAL GUILDS

must leave the responsibility of training the crafts-
men.

There is a village policeman, a village schoolmaster,
a village vicar and minister, a village postman, etc., each
of which officers receives pay, not wages. Why should
there not be a village carpenter, a village blacksmith,
a village mason, a village plumber, each receiving pay
but not wages from his Guild ?

The creation of the Teachers' Register now in
process of completion is certain to bring about a
beneficial change in the status of the teaching pro-
fession. From the moment that the profession is
enrolled and becomes, for the first time, a defined
and corporate and exclusive body, its power will be
sufficient to command partnership at least with any
local authority. How will the new profession, thus
formally created, exercise its new authority ?

Union is strength even when the union is static.
A monopoly acts as a monopoly whether it will
or no.

Every trade union organiser who attempts to get
into Parliament before his union is complete to the last
man should be told to mind his own business.

The only hope of the workers lies in the solidarity of
the unions. Diversion of energy from this object is
waste when it is not treachery.

Compared with the proletariat of pre-machinery days
the modern wage-earners are supermen of technical
skill and productiveness. The milk of labour grows
richer in cream with every advance of invention. Yet
the cream is always skimmed by the profiteers, how-
ever fast it is produced ; and the same residue is left

APPENDIX III 363

to the wage-earner to-day as to his predecessor of
yesterday. Wages on an average have not risen by a
penny during the last five hundred years. In the same
period, rent, interest and profit have increased by
hundreds of times. Wages will never rise under the
wage system. As industry becomes more productive
the patent milk-separator known as capitalism will
skim its cream more and more scientifically ; and always
completely.

We shall never be able to see capitalist society as it
really is until either by some badge upon them visible
to the eye or by some mark discernible on their counten-
ance (such, for example, as shame, fatigue, anxiety, or
stupidity) the wage slaves (or such as depend for their
existence upon being profitable to some other person)
are distinguished from free men. Then for the first
time it would be clear even to the wage slaves them-
selves that only one in ten of us is free, while the other
nine of us are as completely at the mercy of the tenth
as the four hundred thousand Athenian slaves were to
their forty thousand owners.

It is with no mere nihilistic intention that we have
made our economic analysis or are now engaged in
spreading it as far and wide as we can. To stir up dis-
content for no other purpose than to behold blind fury
settling down again is not to our taste. Our object in
making a new analysis of economics is to sustain and
justify a new synthesis of society. If we have shown
that capitalism rests on wage slavery, and that wage
slavery is intolerable when its nature is realised, we
have also shown how the system may be abolished,
and described the better system that may take its
place,

364 NATIONAL GUILDS

As wage slavery was to chattel slavery, so to wage
slavery will be the system of National Guilds.

Private, property in the instruments of production
(land and capital) is equivalent to the crime of blackmail.
By threatening to withhold them their owners can extort
any share they please of the product of labour. They
are not always prudent enough to leave labourers even
enough to live upon.

The English trade unions are the hope of the world.

There is a psychological reason for denying that
the capitalist classes can either persuade themselves
or be persuaded to distribute wealth more equitably.
No class can legislate deliberately for an immediate
reduction in its own standard of living. If a parlia-
ment of Carnegies were our sole legislators they
would still leave matters so that their own immediate
prospects were untouched. Mr. Carnegie may be
willing to die poor, but he is not willing to live less
rich than he is. Only a profoundly religious man or
a great artist can legislate knowingly to his own
economic disadvantage. A whole class of such has
never been seen.

A comparison of the property held respectively by
the House of Lords and the House of Commons would in-
dicate exactly their relative political positions. Formerly,
the House of Lords was mainly the House of Rent, and
the Commons was mainly the House of Interest and Profit.
To-day, however, matters are fairly equalised. Hence
the disappearance of essential political divisions between
the two Houses. For all practical purposes they are
one Chamber.

APPENDIX III 365

The word of trade unionists to Statesmen : When
you are ready to collectivise we are ready to guildise.

The difficulties in establishing the Guild system will
be great, but they will be less than the difficulties en-
countered in establishing the wage system, for the latter
runs counter to men's nature, but the former with it.

INDEX

Administrative workers, excess of,

128.
Advertising, cost of, 94.
Agricultural Guilds, 228, 249.
Agriculture and trade unions,
249.
,, cultivation and pro-

duct, 250.
American Trust magnates, 174.
Arbitration, industrial, com-
pulsory, 51.
Artists and the Guilds, 160, 163.

Banking and the Guilds, 181.

Berger, Victor, 45.

Board of Trade and unemploy-
ment, 35.

Board of Trade statistics, strikes
and lock-outs, 101.

Board of Trade statistics, wages
and food prices, 94.

Capitalism, its unpracticality, 116.

,, defences of, 113.

Carnegie, Andrew, 50, 174, 195.
Census figures, occupations, 159.
,, of production, 123-5, l3$>

154-7-
Census figures, transport workers,

143- r ,

Chamberlain, Arthur, on London

dockers, 78.
Chamberlain, Arthur, on railway

nationalisation, 142.
Chartists and politics, 43.
Checkweighman, miners' struggle

for, 56, 57.
Chinese Guilds, 147.
Citizenship, active and passive,

55, 58.
Civil Service of the future, 225.
Class struggle, 4, 5.

Commissariat (Panama), 203.
Companies Acts, 172.
Compensation for capitalists, 22.
Conservative defence of capitalism,

117.
Consular service and trade, 30,

261, 262.
Co-operation, international, 31.
Co-operative Wholesale Society,

ally of Guilds, 177.
Co-operative Wholesale Society,

ally of trade unions, 107.
Co-operative Wholesale Society,

direction and management of,

257-

Cost of living, rise in, 94, 280.

Craftmanship, manufacturers con-
spiring to crush, 212.

Craftsmen and the Guilds, 160,
164.

Democracy, case for, 213.

Devonport, Lord, and London
dockers, 79.

Dibblee, Mr. Binney, 76, 77, 82,
84, 90, 94.

Distributive methods, wasteful-
ness, 91-97.

Dock strike, 6, 61, 79.

,, Workers' Guild, 80-82.

Dockers and Port of London, 79-
81.

Emancipation, what it really is, 2.
,, the first step to-

wards, 26.
Engineering and shipbuilding, pro-
duction and workers, 177.
Exchange, wasteful methods, 91.

Fabian programme, 65.
Fabians and I.L.P., 7, i

367

368

INDEX

Fabians' meliorist methods, 36.
Feudal wagedom, 13, 14.
Food prices v. wages, 94.
French peasant investors, 173.

Genius, individual, and the

Guilds, 160, 185.
George (D. Lloyd), and Keir

Hardie, 23.
German Socialists andL' Humanite ,

32.
German Students' Corps, 147.
Gompers, Samuel, 51.
Guild inception, imaginary inter-
view with capitalist man-
agement, 240.
,, managers, how appointed,

148.
,, members, graduated pay

for, 137.
,, members' representative

congress, 256.
,, membership, its scope,

136.
,, table of principal in-
dustries grouped, 227.
„ trade unions as nucleus,
138.
Guilds, Agricultural, 228, 249.
,, Chinese, 147.
,, Commissariat, 203.
,, Inventions Department,
188.
Legal, 259.
,, Mediaeval, 275-6.
,, Medical, 163, 186, 260.
„ Military, 261.
,, Miners', 230.
,, Miscellaneous, 157, 362.
,, Panama services, 201-

203.
„ Printing, 166.
,, Railway, 281, 301.
„ Sanitation service, 201.
,, Subsistence service, 203.

Teaching, 269, 362.
,, Textile, 207, 230.
,, Transit, 229, 263.
,, Transport, 80, 146.
,, as trustees for com-
munity, 135.
,, democracy applied to in-
dustry, 122.
,, and the individual, 160.

Guilds and the State, 150.

,, and the Trusts, 170, 277.

Hardie (J. Keir), and Lloyd
George, 23.

I.L.P., causes of failure, 7-1 1, 20.

,, and class struggle, 222.
Individual genius under Guilds,

160, 185.
Industrialism, modern, its advent,

14.
" International co-operation," 31.
,, finance of Guilds,

178.
,, relations, 27, 261.

,, trade and ex-

change, 27.
" Inventions Department," 188.
Inventors and the Guilds, 160,
163, 185.

Jones, Captain, of Pittsburg, and

Carnegie, 195.
Journalism and the Guilds, 160,

165.

Labour colonies, 35.

,, Department and unem-
ployment, 35.
Labour Leader and New Age, 60-

62.
Labour Party, failure of, 16, 60,
68.
Party's birth, 16.
Labour's adventure into politics,

5-
,, history (1906-13), 287.

Land, cultivation statistics, 250.
,, nationalisation, 23.

Lansbury, George, 66.

La Rossignol and Stewart, 52.

Lascelles, Henry, on the Railway
Guild, 281, 301.

Legal Guild, 259.

Liberalism, J. M. Robertson on,
67.

Lincoln, Abraham, on Democracy,
42.

Lincoln, Abraham, and emancipa-
tion, 45, 48.

London Traffic Commission, 90.

Manchester School and the com-
munity, 210.

INDEX

369

Manchester School and economic

theories, 14, 15, 29.
" Man in the Sack," 69.
Marxian economics, 8.
Maurelania v. London's factories,

Mediaeval Guilds, 275-6.
„ wagedom, 13, 14.

Medical Guild, 163, 186, 260.

Meliorist politics, 1.

,, methods of Fabians, 36.

Merchants, What economic func-
tion have they ? 95.

Military Guild, 261.

Miners' Guild, 230.

,, strike (1912), 6, 61, 102.
„ struggle for checkweigh-
man, 57.

Mines nationalisation, 23.

Minority Report, Poor Law Com-
mission, 3, 35.

Morris, William, and the spirit of
craftmanship, 271.

Municipalism, 8.

Nationalisation of land, 23.
,, of mines, 23.

,, of railways, 23,

142, 301, 313.
New Zealand and compulsory
arbitration, 51, 52.

Occupations, statistics of, 159.

Panama Canal, story of, 196.
,, sanitation service, 201.
,, subsistence service, 203.

Political " emancipation " in-
sufficient, 3, 4.

" Political pills for economic
earthquakes," 71.

Poor Law Commission Reports, 3.

Poor Law Report (1834), 15.

Preachers and the Guilds, 165.

Printing Guild, 166.

Producers, census of, 123-5, 138.

Production in shipbuilding and
engineering, 177.

Professions under the Guilds, 160,
163.

Profits, rent and interest (1901-
10), 101.

Railways, British, French and
German, 24, 143.

24

Railway Guild, 281, 301, 360.

„ nationalisation, 23-25,

301.
„ nationalisation and

traders, 142, 313.
,, strike, 6, 61.
„ ,, in France and

Australia, 24.
Railwaymen's Union, 301, 360.
" Red-Tape " in the Guilds, 232.
Reeves, Sir William Pember, and

compulsory arbitration, 51.
Rent, interest and profit (1901-
10), 101.
,, origin of, 150.
Rentoul, Dr. R., and a Medical

Guild, 163.
Robertson, J. M., on " Meaning of

Liberalism," 67.
Royal Irish Constabulary, 224.
Russell, C. E., on Australian
Labour Party, 52, 53.

" Sanitation " service (Panama),

201.
Sassoon, Sir E., 88.
Science and the Guilds, 160, 163.
Sectionalism, evils of, 102.
Shareholders, regimented by

financiers, 172.
Shipbuilding and engineering,

workers and production, 177.
Slavery, American, State legis-
lation, 44.
Snowden, Philip, on strikes and

syndicalism, 9, 354.
Social Democratic Federation and

class struggle, 4.
Socialism in Britain, 9, 10, 19.
,, in France and Germany,
32.
Socialists enlisted under the

Bureaucracy.. 217.
" Starving in the East End," 69.
State and Guilds, 150, 263.
State Socialism not disagreeable

to financiers, 25.
State Socialism and State

Capitalism, 21.
Strikes, failure of, 106.

future strikes, 107.
Manningham, 7.
miners', 6, 61, 102.
railway, 6, 24, 61.
transport, 6, 61, 79.

370

INDEX

Strikes and lock-outs (1901-10),
101.
,, new methods of organisa-
tion, 106.
Students' Corps in Germany, 147.
" Subsistence " service (Panama),

203.
Syndicalism and Guilds, 133.
,, P. Snowden on, 9.

S. and B. Webb on,

73-

Teachers' Union and Register,
268, 269, 362.

Teaching Guild, 269.

Textile Guild, 207, 230.

„ trades, sectionalism, 103.

Trade, international, 27.

Trade Union Congress, deputa-
tions to Ministers, 223.

Trade Union Congress, open letter
to, 287.

Trade unions, evils of sectionalism,
102.

Trade unions, nucleus of Guilds,

138. 356-
Trade unions, maintenance of

labour reserves, 83.
Trade unions, membership of,

103.
Trade unions, new strike methods

needed, 106.
Trade unions, organisation and

recruiting, 249, 279.
Trade unions and unemployment,

85, 130.
Transit Guild, 229, 263.
Transport Guild, 80-82, 146.
„ strike, 6, 61, 79.

Transport workers and Govern-
ment, 105.
„ workers, census of, 143.

,, workers, membership

of various unions, 144.
Trust magnates, American and

British, 174.
Trusts, struggle with Guilds, 170,
277.

Unemployment, Arthur Chamber-
lain on, 40.

Unemployment benefits (1910),
130.

Unemployment, capitalist reme-
dies for, 35, 36.

Unemployment, Labour Depart-
ment and, 35.

Unemployment, trade unions, 85,
130.

Wagedom, negation of Demo-
cracy, 44.
,, and national life, 97,

353-
,, how to end it, 100.

Wages, Mr. Binney Dibblee on,

76, 77-
,, agricultural statistics, 247.
,, need for accurate defini-
tion, 74.
,, v. food prices, 94.
" Wages " or " Pay " ? 81, 362.
Walling, W. E., on Socialism, 47.
Webb, S. and B., on Syndicalism,

73-
" Will to Power, 215.
" Woman in the Sack," 66.

Printed by MORRISON & GlBB Limitkd, Edinburgh

Messrs. BELL'S
NEW AND RECENT PUBLICATIONS

A History of British Socialism

By M. H. BEER

Late English Correspondent of " Vorwarts "

2 Vols. Demy 8vo, 7s. 6d. net each

{Ready Autumn 19 14
The German Edition of Mr. Beer's "History of British Socialism"
has been received with widespread approval by the English press.

The Nation says : " This scholarly history of English Socialism
during the past two centuries, based throughout on original sources
and constructed with a sense of perspective and proportion which is
rare in English Socialist literature, revises a good many of our current
impressions, and enables one for the first time to trace the movement,
so far as it can be traced, as a connected and developing whole."

Mr. Beer has now re-cast the book with the needs of the English
reader in view.

The War of Steel and Gold

Bv H. N. BRAILSFORD
Author of "The Broom of the War-God," etc.

Crown 8vo, 2s. 6d. net

Mr. Brailsford's book, which is likely to arouse some controversy,
is described as " a study of the armed peace," and is an attempt to
analyse the economic meaning of modern world-politics and the
struggle for a balance of power. While it differs on some vital
points from the views of Mr. Norman Angell's school, and finds in
the present restless competition among the powers to export capital
to undeveloped countries, the ultimate explanation of their rivalry
in diplomacy and armaments. A critical study of the relations of
finance and diplomacy is followed by some novel constructive pro-
posals.

LONDON : G. BELL AND SONS LTD.

The World of Labour

A Study of the Present and Future of Trade Unionism
By G. D. H. COLE

With a Frontispiece by Will Dyson

5s. net

Contents : — Means and Ends — The Labour Unrest — Labour in
France — Comments on the French Labour Movement — Labour in
America — Further Lessons from Abroad — The General Strike —
Trade Union Structure — Industrial Unionism and Amalgamation —
Trade Union Government — Centralisation and Local Autonomy —
Social Peace and Social War — Conciliation and Arbitration — Labour's
Red Herrings — The Function of Co-operation — The Control of
Industry — Syndicalism and Collectivism — The Future of Trade
Unionism — Economics and Politics — Hopes and Fears — Biblio-
graphy.

" We heartily commend this book, first to Trade Unionists, but to all
others as well who are interested in the greatest problem of our time — the
problem of the control of industry in a democratic State." — New Statesman.

"By far the most informative and best-written book on the labour problem
we have ever read." — English Review.

Round About a Pound a Week

By Mrs. PEMBER REEVES

Second Edition. 2s. 6d. net

Contents : — The District — The People — Housing — Furniture —
Sleeping Accommodation — Equipment for Cooking and Bathing —
Thrift — Budgets — Food : Chief Articles of Diet — Buying, Storing
and Caring for Food — Actual Menus of Several Working-Men's
Families — Amount Spent a Head on Food : per Week, per Day —
The Poor and Marriage — Mothers' Days — The Children — The People
who are Out of Work — The Standard of Comfort— The State as
Guardian.

" If anyone wants to know how the poor live to-day, he will find it in
Mrs. Pember Reeves's little book. Here there is no sensation, no melodrama,
no bitter cry. It is not outcast London that we are shown, but ordinary
London, resolutely respectable : not the 'Submerged Tenth,' but somewhere
about the half." — Nation.

"If you would know why men become anarchists, why agitators foam at
the mouth, and demagogues break into seditious language — here is a little
book which will tell you as soberly, as quietly, and as convincingly as any
book that has yet come from the press." — Mr. Harold Begbie in the Daily
Chronicle.

LONDON: G. BELL AND SONS LTD.

The Collectivist State in
the Making

By EMIL DAVIES
Crown 8vo, 5s. net

This is a comprehensive review of the modern movements in the direction
of collectivism, embodying a great deal of research and cosmopolitan know-
ledge. The author has had exceptional opportunities for acquiring reliable
information as to the spread of collectivism, and he is generally recognised
as a high authority on the subject.

Toynbee Hall and the English
Settlement Movement

Translated from the German of Dr. Werner Picht
Crown 8vo, 2s. 6d. net. May

The first scientific account — historical and critical — of the English Settle-
ment Movement, with special reference to the "Mother of Settlements,"
Toynbee Hall. An attempt is made to explain the special difficulties of the
Movement, which are increasingly felt now, after thirty years of existence,
and to suggest how they might be overcome. Excursus I. contains a detailed
history of the University Extension Movement, and explains why it has failed
to reach the working-man. In Excursus II. it is shown how this problem has
been solved by the Worker's Educational Association. Details of each Settle-
ment in the United Kingdom are given in an appendix.

Minimum Rates in
the Chain-Making Industry

By R. H. TAWNEY
Director of the Ratan Tata Foundation, University of London

Crown 8vo. May

Mr. Tawney's book is the first of a series in which it is proposed to examine
some of the attempts which have been recently made to establish and enforce
minimum standards of payment. There can be no doubt that the time is ripe
for a study of the subject in the light of such experience as is available. The
Chain-Making Industry in this connection has lately been very much in the
public eye, and is dealt with first because its confined area makes it relatively
easy to examine.

LONDON: G. BELL AND SONS LTD.

The Feeding of School Children

By M. E. BULKLEY

Of the London School of Economics
Crown 8vo, 3s. 6d. net
This book, by a competent authority on the subject, describes the provisions
for feeding school children, how adequate or inadequate, how systematic or hap-
hazard, the system may be at the present time. The author treats not only the
History of the movement up to the passage of the Act of Parliament, but presents
the experience of the last eight years to a problem whose solution is an indispens-
able condition to the progress of elementary education.

The History and Economics
of Indian Famines

By A. LOVEDAY, B.A.

Late Scholar of Peterhouse, Cambridge
2s. 6d. net
In this attempt to sketch the history of past famines in India, Mr. Loveday has
endeavoured to estimate the value of the work performed by the British Govern-
ment and by governments which preceded it in their struggles against those natural
calamities to which India is periodically subject. He has considered not merely
the actual details of relief organisation and of works of protection against droughts,
but also of the economic evolution of India, and the extent to which that evolution
has influenced this work, or been modified by it.

The British Railway System

Outlines of its Early Development up to 1844

By HENRY GROTE LEWIN, B.A.(Cantab.)

Formerly District Superintendent, York
Mineral Train Superintendent, North-Eastern Railway

With Maps and Plans. Crown 8vo, 2s. 6d. net
Mr. Lewin has devoted many years to the study of the early history of British
Railway development, and in this book he provides a great deal of information for
the student which is not accessible in any other form.

Railway Rates and Traffic

Translated from the French of M. Colson

Director-in-Chief of the French State Railways
By CHARLES TRAVIS, E. CHRISTY, and E. LEEDHAM,of the
Great Central Railway. With an Introduction by \V. M. Ackworth,

Author of "The Railways of England," and numerous Diagrams
Crown 8vo, 2s. 6d. net

M. Colson is a railway expert of high European standing, so that an English
edition of this book will be welcomed by students. Part I. deals with the economic
considerations which determine the cost of transportation ; Part II., with railway
rates in France; Part III., with rates in Europe and America ; while Part IV. is
devoted to the author's general conclusions.

The value of the English translation will be enhanced by Mr. Ackworth 's
Introduction.

LONDON: G. BELL AND SONS LTD.

Bohn's Popular Library

Each with designed Title-page and End-papers, strongly bound
in Cloth, Foolscap 8vo, is. net.

"They are admirably handy ; the covers are thin and slightly flexible, but
strong ; the paper is thin, but not flimsy ; and the type is clear. . . . Such
works should speak for themselves : their quality is undeniable." — Athenaum.

VOLS. 1-60 NOW READY.

i. Swift (Jonathan). Gulliver's Travels. Edited, with Introduc-
tion and Notes, by G. R. Dennis.

2-4. Motley (J. L.). Rise of the Dutch Republic. With Bio-
graphical Introduction by Moncure D. Conway. 3 vols.

5-6. Emerson (R. W.). Works. A New Edition. Edited by George
Sampson. Vol. I. Essays (1st and 2nd Series), and Representative
Men. Vol. II. English Texts, Nature, and Conduct of Life.

7-8. Burton (Sir Richard). Pilgrimage to Al-Madinah and
Meccah. Introduction by Stanley Lane-Poole. 2 vols.

9 Lamb (Charles). Essays. Including the Essays of Elia, Last
Essays of Elia and Eliana.

10. Hooper (George). Waterloo: The Downfall of the First

Napoleon. New Edition, with Maps and Plans.

11. Fielding (Henry). Joseph Andrews.

12-13. Cervantes. Don Quixote. Motteux's Translation Revised.
With Lockhart's '^Life" and Notes. 2 vols.

14. Calverley (C. S.). The Idylls of Theocritus, with the

Eclogues of Virgil. English Verse Translation by C. S.
Calverley. Introduction by R. Y. Tyrrell, Litt.D.

15. Burney (Fanny). Evelina. Edited, with an Introduction and

Notes, by Annie Raine Ellis.

16. Coleridge (S. T.). Aids to the Reflection, and The Con-

fessions of an Enquiring Spirit.

17-18. Goethe. Poetry and Truth from my Own Life. Revised
Translation by M. Steele Smith. With an Introduction and
Bibliography by Karl Breul, Litt.D., Ph.D. 2 vols.

19. Ebers (G.). An Egyptian Princess. Translated by E. S.

Buchheim.

20. Young (Arthur). Travels in France, during the years 1787, 1788,

and 1789. Edited, with Introduction and Notes, by M. Betham
Edwards.

21-22 Burney (Fanny). The Early Diary of Frances Burney

(Madam d'Arblay), 1768-1778. New Edition. 2 vols.

23-25. Carlyle. History of the French Revolution. With Intro-
duction and Notes by J. Holland Rose, Litt.D. 3 vols.

LONDON : G. BELL AND SONS LTD.

Bonn's Popular Library — continued

26-27. Emerson (R. W.). Works. A New Edition, with the text
edited by George Sampson. Vol. III. Society and Solitude,
Letters and Social Aims, Addresses. Vol. IV. Miscellaneous Pieces.

28-29. Fielding (Henry). Tom Jones. 2 vols.

30. Jameson (Mrs.). Shakespeare's Heroines. Characteristics of

Women : Moral, Poetical, and Historical.

31. Marcus Aurelius Antoninus, The Thoughts of. Translated

by George Long, M.A. With an Essay on Marcus Aurelius by
Matthew Arnold.

32. Mignet. History of the French Revolution, from 1789 to

1814.

33-35. Montaigne. Essays. Cotton's Translation. Revised by W. C.
Hazlitt. 3 vols.

36-38. Ranke. History of the Popes. Mrs. Foster's Translation.
Revised by G. R. Dennis. 3 vols.

39. Trollope (Anthony). The Warden. With an Introduction by

Frederic Harrison.

40. Barchester Towers.

41. Dr. Thorne.

42. Framley Parsonage.

43-44. Small House at Allington. 2 vols.

45-46. The Last Chronicle of Barset. 2 vols.

47. Emerson (R. W.). Works. A New Edition. Edited by George
Sampson. Vol. V. Poems.

48-49. The Arabian Nights' Entertainment. Edited, with Introduc-
tion and Notes, by Stanley Lane-Poole, M.A., Litt.D. Vols.
I.-II.

50. Plotinus, Select Works of. Translated from the Greek.

51. Five Essays by Lord Macaulay. From the Encyclopedia

Britannica. Edited by R. H. Gretton, M.A.

52. Hooper (G). The Campaign of Sedan. New Edition.

53. Blake. Poetical Works.

54. Vaughan. Poetical Works.

55. Goethe. Faust. Revised Edition.

56-57. Trelawny. Adventures of a Younger Son. 2 vols.

58. Poushkin. Prose Tales. The Captain's Daughter— Doubrovsky
— The Queen of Spades — An Amateur Peasant Girl — The Shot —
The Snowstorm — The Postmaster — The Coffin Maker — Kirdjali —
The Egyptian Nights — Peter the Great's Negro. Translated by
T. Keane.

59-60. Manzoni. The Betrothed. 2 vols.

Other volumes will be published at regular intervals.

LONDON: G. BELL AND SONS LTD.

UC SOUTHERN REGIONAL LIBRARY FACILITY

AA 000 027 576 8

DATE DUE

APR 2

9 1968

APK£"

2

iQ k* ■

■ 2 * M

GAYLORD

PRINTED IN U.S.A.