The other war

THE OTHER WAR

Being Chapters by JOHN HILTON,
P. H. KERR, ALEC LOVEDAY,
HAROLD MESS, and JOSEPH THORP
on Some Causes of Class Misunderstanding.

• LONDON :

GEORGE ALLEN 9 UNWIN, LTD.,
RUSKIN HOUSE, 40 MUSEUM STREET, W.C.I.

SHlLUNd NET,

THE OTHER WAR

Being Chapters by JOHN HILTON,
P. H. KERR, ALEC LOVEDAY,
HAROLD MESS, and JOSEPH THORP
on Some Causes of Class Misunderstanding.

LONDON :

GEORGE ALLEN & UNWIN, LTD.,
, RUSKIN HOUSE, 40 MUSEUM STREET, W.C.I,

ONE SHILLING NBT.

CONTENTS

CHAP. PAGE

I. THE OTHER WAR AND THE Two NATIONS . . . . i
By JOSEPH THORP.

II. LABOUR AND INDUSTRY . . . . . . . . 22

By P. H. KERR, M.A.

III. COMMON FALLACIES . . . . . . . . 42

By ALEC LOVED AY, B.A.

IV. THE Two NATIONS . . . . . . . . . . 69

By H. A. MESS, B.A.

V. INDUSTRIAL RECONSTRUCTION . . . . . . 95

By JOHN HILTON.

381231

DEDICATED

TO THE MEMORY OF

CAPTAIN

EDWARD VIVIAN BIRCHALL, D.S.O.

INTRODUCTION.

THIS little book is dedicated with the consent of
my collaborators to the memory of a young
Englishman whose promise was as great in his
own unusual sphere as any of those gifted
boys Julian Grenfell, Charles Lister, Rupert
Brooke, Dixon Scott, J. L. Johnstone, and a host
of unforgettable others. Birchall was in a true
sense a type ; a type of that same kind that saw
vividly the horror and futility of war and joined
the army in the first days of August, 1914, out of
a sense of sheer duty, without any illusions about
the joy of battle, and certainly without any
emotional exaltation. He had always been a keen
Territorial officer from the same conception of
duty, since his Magdalen days, and he was quite
ready. But the whole bent of his mind and heart
was towards the works of peace. He had inherited
what he thought was a more than sufficient
patrimony, and was eager to "give it back again"
to the " other fellows " who had made it for him.
This sense of debt to the less fortunately placed
inspired all his work in the Guilds of Help and
the Agenda Club. It was singularly devoted
work. I came to know him as men only get to
know each other in a difficult job of work.

The failure of the Agenda Club — if it was a
failure — was a great disappointment to him.
Such qualified success as it achieved was largely

11 INTRODUCTION.

due to him. His work for the Guilds of Help
was by no means a failure and will always be
remembered by them. If he had lived — but
that is too tragically common a phrase on our
lips in these dreadful but inspiring days. He
lives in his friends, who can repeat from the
heart words said recently at one of the
gatherings which led to the making of this
book : "I feel it 's up to me to work for
the rest of my life in order that my friends
who have died won't have died in vain."

These chapters are written in that mood.
They represent the thoughts of men divided on
many points of doctrine, religious and political,
but united in the conviction that our world must
be set free, and that on us who have not been
required for military service must fall the burden
of to-morrow's work ; and that it will be the
greatest tragedy and futility of all if this Great
War be followed by another war, more embittered
because internecine. It is misunderstanding
that lies at the root of most quarrels. These
chapters may perhaps set a few people thinking,
and thereby help to remove from their minds
some of the misunderstanding that hinders a
peace-with-honour settlement of the war between
Capital and Labour. J. T.

CHAPTER I.

THE OTHER WAR AND
THE TWO NATIONS.

IN the international sphere two schools are now
busy shaping their thoughts and their policy
for the period which shall follow the declaration
of peace. One is the school of force, the other
the school of reason. The one looks to force
not merely as the only possible arbitrament in
the struggle in which we are engaged, but as the
only possible safeguard for the future. Be so
strong that your enemy fears you ; break him
so thoroughly that whatever passion he may
have to do you mischief he will, in fact, be
powerless. The other school — we are not con-
sidering the standpoint of the absolute pacifists,
or those who find it necessary to take the six-of-
one and half-a-dozen of the other view of this
quarrel — accepts reluctantly, perhaps, but now
frankly, the position that, things having come to
such a pass as the actual invasion of Belgium
and the rest, the actual threat of domination by
force, there was no way out but war. Yet it
feels that trial by battle is essentially futile, even
if in the given circumstances inevitable, and
inevitable only, or chiefly, on account of that
" failure of human wisdom " which allowed the
situation to become unmanageable. And if they
are candid they will allow that not only " mili-
tarists " but pacifists were at fault, the one by
over-emphasis, the other by under-estimate of

8

•?; THE OTHER WAR AND

the factors making for violence, and that the
two conflicting tendencies helped to make the
unmanageable situation. They recognize that
victory, victory for essential right against essen-
tial wrong is necessary, but see victory at that
point when the enemy shall essentially and
effectively recognize the fact of defeat. And
they think that the reaction of Central European
public opinion in defeat will be more effective as
a solvent of its aggressive militarism than any
pressure from without. This school cannot hope
to be popular, because it takes a light-and-d ark-
grey, rather than a black-and-white view of the
underlying issues ; because it is confounded in
the hasty popular mind, and perversely linked
by the opposing school, with the peace-at-any-
price folk, and with those who have persuaded
themselves, on ground not clear to the normal
mind, that the War is really a device of the
capitalists to fasten yet stronger fetters on
Labour.

Great events hang on the issues of this conflict
of opinions between the two schools of thought,
and it is not possible to say which will be the
victor. The entrance of the United States into
the War, and the wisdom, sanity, and authority
in council of its President are of happy augury.
But it is neither with the rights and wrongs
of the great War nor with the internal conflict
of opinion as to its final settlement that these
chapters are concerned. They deal rather
with that " other war " between Capital and
Labour, rich and poor, managing and managed,
vocal and tongue-tied, which threatens us when
the time comes to pay the heavy reckoning for
this.

THE TWO NATIONS 3

That other war is always with us in the time
we call peace. The assumption in the present
War of armaments is that this nation is one.
The practice of peace assumes broadly that
there are two nations, the managing and the
managed, the inheritors and the dispossessed,
the served and the servitors. It is a rough
unscientific division, of course, but it is near
enough to the truth to be understandable.
Normally the trouble between the twain is
smouldering ; on occasion it breaks into flame.
It has become the business of a number of
embittered and by no means unintelligent men
to fan this occasional flame into the steady
conflagration of revolution. These men do not
always appear to us very wise, or even just ;
and it seems, indeed, to give an edge to their
bitterness that those to whom they preach are
not as ready to resent their conditions as the
preachers. It is, therefore, a fashion among the
comfortable to speak of these zealots as " paid
agitators," and so dismiss the matter.

It will be some index of the mood in which the
writers of this book have approached their task
to say that the attitude of these agitators, though,
if the long view be taken, wrong, seems in the
actual circumstances the most natural thing in
the world. We ask ourselves whether, if we
put aside the question of abstract justice which
necessitates a long and subtle debate on which
much can be said on both sides, and view merely
the damnable difference between the potentiality
of any average poor citizen's child — the promise
in health, in beauty, in education, in work power,
in citizenship — and the actuality ; the achieve-
ment which its environment permits to emerge,

4 THE OTHER WAR AND

the difference between what is and what might
be — we ask ourselves whether we should not also
be " agitators " (and as, pace Talleyrand, a man
must live we should hope to be " paid "). More-
over, being fairly candid souls, we further ask
ourselves whether — if instead of being able to
take the rather detached point of view of
sympathy, distinguishing genuine grievance from
envious prejudice, between practical and there-
fore gradual reform of our vexed world and this
passionate wrecking and Utopian haste, we were
ourselves in the thick of this struggle against an
exasperatingly obstructive environment, with
most of the weight of conflict and custom, of
officialdom and newspaperdom and Christendom
against us — we should not be inclined to hit out
rather blindly and to look upon dynamite rather
than surgery as the cure for cancer. It is a
question each may profitably ask himself.

Candour would seem to give but one answer —
we should most of us be for dynamite.

But that answer indicates no solution. Bitter-
ness and violence will never solve anything. Or
perhaps it is sounder to distinguish : they will
solve nothing so well or so quickly as under-
standing, as co-operation. If the causes of
dispute between the two nations over the fruits
of industry are so desperate that nothing but war
will solve them — then it must be war, and we
must accept the conclusion that in that very event
there will be less fruits than ever to divide. But
the bitter irony of such a conclusion at the end
of Armageddon is enough to give pause to any
irreconcilables on either side. Victory in the
field will be the hollowest of mockeries if we
come back to war at home.

THE TWO NATIONS 5

In this other war, then, there is a school of
force and a school of reason. But in this other
war there is nothing like the case for force that
can be made out in the international sphere,
unless, indeed, the suggestion that we are a
united nation fighting for a united national
interest and a sacred supernational cause is a
mere illusion contrived by astute statesmen
hoodwinking the managed classes.

We do not think that this great idea is an
illusion. It seems to us a great and glorious fact,
which contains the promise, if its obvious im-
plications be considered seriously and dispas-
sionately, of a better-ordered national life ; which
is not to deny that there are strongly entrenched
forces making for war.

There is, first of all, the type of labour ex-
tremist who wants industrial war, who has
worked zealously during the past three years, as
before, to play upon class prejudices in every
possible way. His work of the past two years
needs more excuse than he has been able to
present to us for it, but certainly his fundamental
attitude is intelligible enough, as is his essential
sincerity. This industrial system (he says in
effect) is so bad that only complete wrecking of
it is any use. And there can be seen signs of an
active campaign after the War to exploit all the
unavoidable material hardship which this un-
paralleled catastrophe will bring in its train.
He will, he thinks, be able to force the work-
people, who are too stupid (he is nothing if not
contemptuous, this type) to understand the
villainy of the system by which they are ex-
ploited, to see how, after being cajoled, used,
accepted on terms of fellowship and praised in

6 THE OTHER WAR AND

the hour of danger, they are to be thrust back
" into their place " when the danger is over.
He is also able to point triumphantly to the past
and ask if any move in the escape of Labour from
disabilities which we now all admit were un-
bearable was ever effected without war or the
threat of war.

Of the war makers on the other side
you still have the what-they-want-is-discipline
school, which becomes on desperate occasions
a " put-half-a-dozen-against-the-wall-and-shoot-
them " party — a curious commentary on the
power of an educated class to understand their
less educated fellows. You have the autocratic
type of employer who refuses " recognition "
of the unions for corporate negotiation and
bargaining, which is absolutely nothing more nor
less than a ludicrously belated survival of the
spirit which so ruthlessly persecuted the first
tentative combinations of labour in the time of
Francis Place ; or the stifT-upper-lipped type, as
exemplified in the Welsh coal magnates, on whom
a North Country coal-owner commented to the
writer recently : " Our impression here of the
We^sh coal-owners is that they have rarely
considered any proposal of the men, how-
ever reasonable, except to say no to it on
principle. "

It is, of course, only fair to remind ourselves
that this temper and these opinions are sincere
enough. They are fruits of a frank war doctrine.
They are not mere wickedness or greed, but they
honestly assume the dog-fight basis of industry.
They are less common than they were, for many
employers are beginning to see the inevitable
waste of this process, quite apart from the

THE TWO NATIONS 7

growing social conscience which realizes that the
conditions of labour are not satisfactory and that
it is " up to " employers to do something about
it. But they survive in the general habit of the
comfortable classes and their parasites to look
upon labour as an unreasonable and dangerous
caste. Surely, the only possible hope is to
contrive a way whereby the consolidating of
labour forces ; the full recognition of labour
rights as men, not hands ; the extension of the
benefits of unionism to unorganized labour (the
most important aspect of the whole labour
question, for, naturally, we hear most of the
grievance of the best-organized groups, whose
grievances are trivial compared with those of the
unorganized) ; the acceptance of Labour as a new
estate of the realm, with more power and more
responsibility, are seen by all as a reasonable and
satisfactory development, wished for and accepted
as such. Not unjustly, now, Labour is criticized
as having power without responsibility. The
remedy is not to break the power (if that were
possible) but to increase the responsibility.
Towards this end some arguments in this book
are directed.

This big business is everybody's business.
There seems to us no other that is more im-
portant after the War is over. If the school of
reason is to prevail, and there are wise heads
both among employers and Labour leaders who
form it, it must have the support of an en-
lightened and instructed public opinion. That
opinion is not enlightened and it is singularly ill-
instructed. In the press, which in the main tells
its readers what its readers wish to hear, these
grave matters are being ignored, nor is fair

8 THE OTHER WAR AND

comment the rule, which, no doubt, goes far
to excuse the otherwise unwarrantable bitter-
ness and unfairness of the struggling Labour
papers.

It is no use denying that it is an uphill road.
The real hope, as cannot be too often repeated
for the encouragement of those who often
despair because of the slowness of the spread of
these generous ideas, and for the possible con-
fusion or conversion of the practical men who
are found to " take life as they find it " (in-
cidentally, an absurd thing to do), is that lack
of imagination alone is the cause of this slow
progress. Lack of imagination is as much a
defect of education as of temperament ; and
education, education by shock, will have come
via the War as it never came by book and
pedagogue in the past comfortable days. A
great upheaval may be the chance of revolu-
tionaries who are wreckers. It is also the chance
of revolutionaries who are visionaries — so-called
till their visions materialize. The bulk of plain
men whq are neither really hold the balance.
To which side will they swing ?

The wreckers have a fair chance if helped by
the unwisdom of the reactionaries and the
callousness of the neutrals whose immediate
natural interest and whose traditions put them
on the side of Capital.

It is, of course, a perverse and desperately
mischievous thing to say, as Labour extremists
have been saying, that the War was planned by
Capital against Labour, or that Capital is taking
advantage of the War to smash the power of
Labour. But that some such thing as this last
might be the effect of the War in the difficult

THE TWO NATIONS 9

times that are coming is certainly possible.
Another war will be the great chance of the
sincerely violent, and will be a fine commentary
on the " trench brotherhood/' from which many
of us honestly expect so much. That brother-
hood, that mutual recognition of fine qualities in
hitherto sundered classes is, we believe, the
foundation of a real, not an illusory hope. But
it will bring nothing of itself. It will need
thought, work, and, above all, sacrifices, to effect
its result in a saner and more just civic life.
Sentiment must inspire action or it will remain
that poisonous thing sentimentalism. Those
who are rather drawn to the side of the under-
dog, please note !

From a later chapter the reader will learn
something of the political sacrifices which have
been made by labour in the War, sacrifices which
in the nature of things have not been demanded
from any other class.* The removal of restric-
tions to production seems to so many to be the
mere removal of a perversely foolish and suicidal

* " Labour, to judge by its papers, has not been fair
enough to allow that, during the War the separation
allowances and the increasing amount of well-paid work has
put up the family wage and left the dependents of the
working-man distinctly better off not only relatively but
often absolutely than any but the well off among the pro-
fessional and salary-earning classes. For though it is true
that the individual wage has not increased as much in
proportion as the prices of necessary commodities, the family
wage is the truer basis of comparison. . . .But what does a
candid member of the business or professional classes
suppose that the workman makes of the * profiteering,' even
if 60 per cent, (after skilled accountancy has been at work)
of the often indecent excess (an indecency felt very keenly
by many profiteers themselves) be taken in the form of
taxes ? "

10 THE OTHER WAR AND

policy which should never have been possible.
It will need conscious effort, some real sympathy
on the part of us outsiders and more knowledge
of Labour history than most of us possess, to
view it as the surrender of a weapon fought for
and won by long and difficult effort. The
surrender has been made, approved by the very
leaders who have most to lose politically by the
concession, made in the interests of the nation
and opposed (and bitterly opposed) only by
those extremists, among leaders or rank and
file, to whom the War is merely a " capitalists'
war " and no concern of theirs. It will be a
supreme folly on our part not to recognize that
it has been a generous surrender, of something
uniquely prized, and that the weapon is, under
pledge, to be restored intact at the end of the
War.

The weapon ? We are to go back to " the
other war " then, to the dog-fight over the
proceeds of industry ? Is there no more ex-
cellent way ?

It is the conviction of the group responsible
for this book that there is, that peace and co-
operation are not merely possible but necessary
if we are to survive the already desperate wreck
of civilization's richest hopes, and it is their
business to advance considerations towards that
conclusion. But a chief obstacle to any new
view is the elaborate network of misunder-
standings which separates the parties, which also
will be dealt with in a later chapter, and the
too ready acceptance by both sides of the
imagery and metaphors which indicate the fact
of war. The economists, with their iron laws
and their borrowings of metaphors from the

THE TWO NATIONS If

biologists, their " struggles for existence " and
"survivals of the fittest," ride us heavily. We
are all in the wrong frame of mind towards the
business.

The " iron law " of the immediate future will
be that if we do not produce more we shall risk
the bankruptcy of our civilization. War does
not produce, it only destroys. We must provide
a way of peace, not as a luxury, as a Utopian
experiment, or as a matter of Christian ethics,
but as a business necessity. The only way for
two forces to obtain full effect is to act together
in the same direction. To act in directions that
cross gives a resultant greater or less, according
as the forces are less or more directly opposed.
There is simply no margin now for such a waste
of force.

And, of course, this system of getting a meagre
resultant out of two forces largely in opposition
has been of the essence of our industrial method.
To a Martian the thing must appear distinctly
comic. Society lives by what it produces (un-
exceptionable platitude) and contrives a way of
production whereby the most potent factor
(corporately) in production, that is labour, finds
it to its interest or believes it to be to its interest
(which is not the same, but comes to the same,
thing) to slacken production systematically. Of
course it is an easy (and general) assumption
that this is mere perversity or stupidity on
Labour's part. But it is impossible to resist the
conclusion that the way in which in the past
piece-rates have been consistently lowered against
the men by short-sighted employers, who do not
seem to be constitutionally able to face the
thought of a workman getting a considerable

12 THE OTHER WAR AND

increase of earnings, is directly responsible for this
mischievous practice. It cannot be too strongly
urged that every one of the practices of Labour
which we object to and which are in certain
aspects objectionable, tyranny such as peaceful
picketing, restrictions of functions and output,
sympathetic strikes, are not the result of some
innate wickedness in the labouring class, but
devices roughly shaped to meet some practical
menace to their interests from the other side.
In this matter of piece-work bitter experience
has taught them that the increase of production
due to greater skill or mastery (or improvement)
of the process is made the excuse for lowering
the rate. The man has found himself eventually
producing more and being paid the same, the
whole increment going to the employer. He
feels this is unfair and ca's canny ; taking care at
the same time, and quite logically, that his
fellows shall mark time with him. We call this
mere obstructiveness. He sees it as self-defence.
Thus* this vicious game of wits between labour
and management is set in operation. Which of
us can complain, seeing that we recognize the
factor of selfish motive in production, make it

* It ought not to be forgotten that part at least of this
slackening work policy is due to a mistaken but not un-
generous notion that there is a bag of work definitely limited
and that if one does too much another will get too little.
This is a fallacy analogous to that which conceives of wealth
as a bag of money definitely limited of which if one takes a
larger share another must necessarily go short. Wealth is
no such static thing ; nor is work. But with regard to work,
considering our old calm acceptance of the " necessary
margin of unemployment," a doctrine too bitter for our
modern stomach, we ought not to be surprised at the men's
naive version of economic law.

THE TWO NATIONS 13

indeed the chief argument against Socialist
Utopias that they assume the operation of an
idealistic motive contrary to normal human
experience ? Men will cease to caj canny when
it is made worth their while not to do so — that is
the plain fact. There is no need to apologize
on behalf of the workers for this attitude of frank
selfishness ; and there will be no such need till
employers who, say, happen to have found a way
of cheapening production, spontaneously set to
work to see if the business will not allow a better
wage.

This is not the place to pursue this complex
subject or attempt an answer to the many
quite obvious difficulties which it raises ; nor to
pause to consider the many ways in which
Labour individually and corporately, shows itself
" difficult." The vision of the workman as a
persecuted saint is no truer than that of him
as a lazy blackguard. But it would amount to
a revolution if we came to realize that it was as
true !

The writer is concerned chiefly to bring home
to himself and his similarly situated fellows how
natural it has become to assume that the working
classes are to be blamed for following out to
their conclusion ideas that have been forced upon
them by circumstance — ideas and conduct based
upon them which have their exact counterpart in
the operations of Capital. To get as much as
possible for as little as possible is an unkind way
of putting it ; but hardly unfair. Do manufac-
turers cheapen production to lower the price to
the consumer except for the purpose of under-
cutting a competitor ? Both manufacturer and
workmen are " out for more money," out to get

14 THE OTHER WAR AND

as much and give as little as possible. And if it
be said that many of the one take a genuine
interest in the work itself apart from its reward,
that is conspicuously true of many of the other
class, at least of such as have work which can in
any way be called interesting. But as the work of
the manual worker is obviously on the whole
profoundly uninteresting and tending to become
by excessive specialization always more and
more so ; as, moreover, there is little prospect of
his being anything other than a wage-earner at
a strictly circumscribed wage and with a not very
heartening future to look forward to, it is not
to be wondered at if zeal in work does not run
so generally high in the working as in the
managing classes.

There is here no grounds for an indictment
against the latter, at least in so far as it
is brains which separate management from
managed.*

But we certainly need a very large tolerance
of even the most disquieting and seemingly
perverse positions taken up by Labour. We
certainly need to get rid of our assumptions that
Labour is somehow more depraved and ignoble
than any other class ; of the conviction that it
was somehow destined by divine right as the
basis of our comfortable order and that it ought
to keep its place without raising so many
questions about it. Dare the writer record what
a light was thrown upon all this for him by the
realization of the supreme platitude that Labour
had much the same types of men, much the same

* In so far as it is opportunity to develop brains, well that
is another and not so satisfactory a story.

THE TWO NATIONS 15

fundamental virtues and vices (modified, of
course, by environment) as any other class ? The
words of a wise priest : " Every boy is a gentleman
till the age of 8 " began this simple illumination.
Later, friendships with working-men and ac-
quaintanceship wherever there was any chance
of real contact, confirmed it. Any crisis in civil
life, such as fire in a mine or this long crisis of
the War, confirms it. It is just because of this,
just because there is no difference, except in
opportunity and training, between this class, so
slandered in our thoughts and speech, and any
other, that one dares to cherish so great a hope
for the future — that out of the two nations, the
sacrifices and the inherited troubles of this War
shall produce one*

It is a common enough charge against idealists
that sentiment carries them away and that they
will not face the hard facts of a world of struggle.

* I should like to quote the experience as related to me
recently of a distinguished civil servant, who found himself
in contact with Labour for the first time in connexion with
some arbitration work. " There was nothing to choose in
capacity, in broad-mindedness, and in what I may call
statesmanship, between the parties on either side of the
table. I was amazed. Nothing could have been fairer than
the men's representatives ; if anything I should say there
was more obstinacy on the other side. The whole thing

was a revelation to me. I asked (a distinguished and

exceedingly capable Labour man, falsely looked upon as a
firebrand), with whom I got into very friendly conversation,
if he would mind telling me what his salary was. He did.
It was monstrous. He would have been worth four times
as much anywhere. The whole thing was a revelation to
me." It is the writer's experience that most of the " paid
agitators " he has met could double their salaries in any
suitable business. The taunt, therefore, is singularly
fatuous and mischievous,

1 6 THE OTHER WAR AND

The idealism of these pages makes no other
demand than that men of goodwill, amateurs of
politics, should take the trouble in the national
interests to examine this situation of the Labour
classes and see if they find it " good enough " —
good enough for the workers and good enough
for the nation. There can be little doubt of
their verdict. As to the cure of present troubles
our appeal is not to idealist, but to normal human
motive. If men of the trading and professional
classes are more industrious than the manual
workers it is not on the whole because they love
industry for its own sake, but because there is a
motive behind their industry, sometimes joy in
accomplishment (if accomplishment be worth
while), but more often an encouraging horizon,
wealth, competence, security, position, power,
honour. If, as a fact, manual workers find their
work dull and their outlook circumscribed, if they
foresee their present disabilities increasing, if
they are, in fact, discontented, it is, we " idealists"
suggest, little use exhorting them not to be so.
The thing is to remove the causes of their dis-
content, to give them greater inducement to
industry. Those inducements are by no means
all a matter of " cash " payments. Status, as a
thoughtful chapter in this work suggests, is
certainly an important point of their claim, the
status of men not pawns ; full opportunity
another ; security a third. And it is one of the
most wholesome signs (if to benevolent politicians
it is the most disconcerting) that British Labour
thinkers do not so much want coddling and gifts,
which by a natural instinct they recognize as
ultimately meaning servitude, as freedom to
develop their organizations, to fulfil their own

THE TWO NATIONS 17

lives in their own way and widen their unions
into powerful self-respecting and respected
corporations able to take their full place in the
national life. That is the inspiring idea behind
those versions of guild socialism which are now
being canvassed by the "intellectuals" of Labour.
Labour has won the beginnings of such rights in
the past by war. The point for us to consider
is whether the essence of the Labour claim is not
only natural but just, and whether it is not to the
national advantage to welcome and to promote
the extension of Labour power, Labour solidarity,
Labour control of its own conditions, as a step
on the road to the emancipation of " Labour "
as a caste and its complete fusion in the national
life : just as developed nationalism is a necessary
step toward, not away from, internationalism.
In a word, the question is whether peace is not
the way out rather than war. A way out there
must be.

One consideration seems paramountly clear.
If industry is war, which is much like saying if
production means waste, if it is merely a trial
of strength between two contending armies, then
we have surely no cause for complaint at any of
the fighting tactics of Labour. Strikes are
on this hypothesis justifiable whenever anything
can be got out of them — as are lock-outs. Com-
binations of labour, such as the recent " triple
alliance " of the transport, shipping, and mining
industrials, are inevitable ; as are cartels and
trusts and all the fighting machinery of Capital.
Threat will breed threat, stroke counterstroke ;
till the bitterness and waste of it all becomes so
desperate as to be unbearable, and the whole
bad business end in violence and destruction.

1 8 THE OTHER WAR AND

The faith that will move the mountains of
difficulty is the faith that there is no inexorable,
destined conflict. We men have ordered or
disordered this thing. We ourselves, and no divine
decree, have muddled things to this pass. We
can mend them. And we have never had a
better chance, when both the necessary goodwill
and the gravity of the need conspire to aid us in
the difficult task.

No one but a charlatan or a detached doc-
trinaire has a comprehensive solution ready. The
sincere thinker can only indicate promising paths,
tentative steps.

The first need undoubtedly, and incidentally
the best hope, is that this business of the indus-
trial settlement should be recognized as the plain
man's business, not a mere problem for politicians ;
or rather, that we should all be in politics. It
is one of democracy's failures that, having power,
most of us fail to exercise it, which means that
having a grave responsibility most contrive to
shirk it, and leave the matter in professional
hands, with not the happiest results. The
process of taking up this duty of politics must
begin with thought and study, not necessarily
of a bookish nature, but at least a careful
estimate of the facts as they reveal themselves
to any who care to observe. A comfortable
citizen will begin by asking himself whether there
be not, indeed, some real and remediable grievance
behind all this unrest. Can it be all just per-
versity ? Frankly, when examined does the
position of the manual worker, the casual worker,
seem good enough ? If certain defects appear
in his conduct is there not enough to account for
them in his defective opportunity, his absurd

THE TWO NATIONS 19

environment, or his insecure conditions,* without
any necessity to have recourse to a theory of his
greater wickedness or laziness or drunkenness ?
Is the fact that John Burns became a Cabinet
Minister really sufficient justification for holding
(as is often held) that there is equality of
opportunity ? Is not the State (that is, the
citizens of the State collectively) responsible for
the appalling waste of her young life — beginning
with infant mortality, proceeding with denied
chances of education, and ending with blind
alley occupations ? If a mayor by taking
thought, as, notably, at Huddersfield, can reduce
the mortality in his city, are not other mayors
and other councillors and citizens guilty by
implication ? Have I a right in ethics (or in
sportsmanship) to wear any garment made by
sweated labour ? Or does the difficulty of
tracking down this matter of sweating absolve
me from all duty of attempting to do so ? Can
I, in fact, as a more or less privileged, and,
therefore, certainly a more responsible and
effective member of society, wash my hands of
the results of the inadequate contrivances of that
society ? Has it ever occurred to me that my

* A homely example always helps. The writer happens
to have viewed at close quarters structural alterations to a
house in a country district. The workmen were the most
friendly and intelligent, skilful at their job and certainly
industrious. As the work neared its close it dragged so
obviously that it was clear deliberate slacking was going on.
Close observations confirmed this, and frank questioning in
the friendliest way discovered the reason. At the end of this
job there was no other in prospect in the neighbourhood.
The men were " nursing " it therefore. Who in the world
can blame them ? Work on that insecure and casual plan
is obviously demoralizing. Who, of any class in any kind of
job, would dare say he would resist a similar temptation ?

20 THE OTHER WAR AND

citizenship, of a great city or a small, would be
a much bigger thing to me, would mean a jollier
life, if I could live in that city with a consciousness
that I had done my bit towards cleaning it up
if there was no one in it whom (if the truth were
known) I dare not look in the eye because of the
conviction that I owed him for the unnecessary
death of his baby daughter, or the denial of a
chance to his boy, or the fact that his wife who
was a beautiful girl at 1 8, is now at 28 a withered
woman ? All these " sentimental " considera-
tions are at the back of this more explicit and
scientific problem of industrialism. It is the
understanding of the other fellow's point of view
that is so important, and the recognition that we
are all in this business — that it is " our job " to set
it right. It will be settled for good or ill not only
in Parliament, at trade-union conferences, or
directors' meetings, but in schools, in drawing-
rooms, at dinner tables, in railway carriages, in
clubs, by common citizens turning the matter
over seriously. Perhaps, best hope of all, it is
being settled for good on battlefields. Who gives
any other report — officers, doctors, nurses, visitors
— than that " the men " are, irrespective of class,
what those knew who were privileged to under-
stand them before — " splendid." Not one but
a dozen subalterns of my acquaintance and
" class," whose chiefest desire is to hide their
emotions have spoken of this to me with tears
in their eyes. Who dare not essay to build a
new life out of this knowledge ? Who dare be
such a fool as to drift back to a peace which
shall be no peace but another war if his
thought and work can prevent so futile a
happening ?

THE TWO NATIONS 21

And who that has in simple sincerity approved
the dedication of five millions of his countrymen
to death and worse for the service of England,
can dare to withhold the dedication of his own
life to the business of remedying the defects and
injustices of our social system. The writers of
this little book, divided on so many points, are
united in this, that they see the problem of the
relations of Capital to Labour as the most urgent
of the reconstruction problems. J. T.

CHAPTER II.

LABOUR AND INDUSTRY

I. INDUSTRIAL UNREST.

r I "AHE growth of industrial unrest in recent
years was a commonplace before the War.

JL The recognition of the fact that industrial
unrest is a menace to the national welfare, and
that somehow or other its causes must be removed
if we are not to drift to disaster, has become
hardly less of a commonplace, since the War
began. To what causes, therefore, can the
trouble be traced ?

Modern industrial unrest dates from the
industrial revolution. In mediaeval days manu-
facture was chiefly conducted by guilds of skilled
craftsmen, who owned the means of production,
and who sold the product of their own labour.
The capital outlay necessary to conduct manu-
facture in those days was inconsiderable, and
businesses were so small that journeymen and
apprentices usually worked together at their
trade. Mechanical invention destroyed this
system. As the means of production became
more elaborate and more organized, the individual
craftsman producer disappeared, and the cap-
italist who had money to construct a factory and
to pay many hired workers, and so produce more
cheaply than bis rival, took his place.

The first effect of the new methods was the
rapid widening of the gulf between employer and
employed. The employer became more and

INDUSTRIAL UNREST 23

more preoccupied with the problem of manage-
ment, with the mechanical side of building up
and managing the industry, with that function of
higher direction, which includes initiative, or-
ganizing ability, judgment in buying and selling,
and on which the successful conduct of large
scale industry increasingly depends. And in his
preoccupations as a manager he began to lose
sight of the human aspect of industry. Business
is largely a matter of buying in the cheapest
market and selling in the dearest, and early in
the days of capitalist production the employer
began to treat his now numerous employees
not so much as fellow human beings for whose
benefit the industry was being conducted equally
with his own, but as part of the machinery of
industry to be bought for as low wages as
possible. On the other hand, the work of the
employee became ever more mechanical, and
more specialized. He became farther and farther
removed from the problems of management,
until his main preoccupation became to protect
his own conditions of life and to secure higher
wages out of the employer, by combination or
any other means he could contrive, regardless of
the effect on the business as a whole. Thus
industry came to be founded not on co-operation
between employer and employed for their mutual
advantage, but on warfare between them for the
division of the product. Each side, struggling
for its own hand, became increasingly blind to
the point of view and needs of the other, increas-
ingly suspicious and distrustful of the other, and
farther and farther away from the only solution
of the trouble, the vigorous conduct of industry
by all for the benefit of all. From this divorce

24 THE OTHER WAR

between the two partners in industry almost all
industrial evils have sprung.

This evil was aggravated by the failure of the
community. Up to the middle of the eighteenth
century the community had always regarded
itself as being responsible for seeing that adequate
wages and proper conditions of work were secured
to its citizens — e.g., the statute of apprentices.
In consequence it was customary for labourers
and artisans to appeal to the magistrates to
determine what were fair wages and proper con-
ditions of employment, when they regarded the
rates paid by employers as too low. But in the
early days of the industrial revolution Parliament
abdicated its responsibilities. As new machinery
was invented, Labour demanded the Parlia-
mentary prohibition of these new methods on
the ground that they caused local unemployment,
or at least the statutory enforcement of ancient
practices which were inconsistent with the new
methods and increased output. Parliament,
rightly enough, refused to forbid the use of
machinery, but, possessed by the lamer faire
economic doctrines of the day, it went on to
abandon altogether its responsibility for safe-
guarding the conditions and the standards of
living of its own citizens, and left the workers
to look after themselves as best they could.
And, not content with this, when the working
classes began to strike and agitate as the only
methods left to them of protecting their standards
of life, it went on to attack trade-unionism as
an illegal combination in restraint of trade.
The consequences of this attitude were apparent
not only in the evils of the industrial revolution
but also in the general acquiescence in the

INDUSTRIAL UNREST 25

system of private industrial war which ensued.
The community came to regard this state of
affairs as natural or at least inevitable, and
confined its interference mainly to keeping the
ring and seeing that the law was not broken
during the continuous quarrels between the
two. It seemed to take for granted that all
engaged in industry were selfishly striving for
themselves, that in this struggle the weak must
go to the wall, and that the state was only con-
cerned to see that the contest did not degenerate
into violence and bloodshed.

II. THE LABOUR POINT OF VIEW.

AGAINST this state of affairs the working class
have always been in revolt. Having been for
nearly two hundred years the bottom dog,
they have been far more active in challenging
the existing order and suggesting ways out of it
than the more fortunate governing classes.

In early days the labour world was mainly
concerned with organizing itself into trade
unions, partly for sickness and unemployment
and other benefit purposes, and partly for the
purpose of fighting for higher wages and better
conditions of work by collective instead of
individual bargaining. But the interests of the
labour world have not been confined to or-
ganizing the trade-union movement. They have
also been centred on the problem of reforming
the whole system of conducting industry which
came into existence with the industrial revolu-
tion. What has made the labour movement
a political movement and not a mere industrial
movement, what unites it not only in each
country but throughout the whole world in

26 THE OTHER WAR

international federations, is the conviction that
the capitalist system as it exists to-day is funda-
mentally immoral and unsound.

At the present moment public opinion in
the labour world is concerned with two main
problems, first the economic conditions which
will prevail immediately after the War, and
second how to transform the capitalist industrial
system itself. Though they are closely inter-
related it is convenient to consider these two
aspects of the industrial problem separately.

The main point of view of the labour world
is simple and clear. It sets the human value
of the individual worker first, and subordinates
every other end of national policy to that of
increasing the well-being and equalizing and
widening the opportunities for every citizen
within the State. In its eyes national pros-
perity must be judged not by banking returns,
national wealth, or armaments, but primarily
by the conditions and standards of life and
work of all the people. Trade, finance, and
power are all important in their way, but they
are not ends in themselves as they are sometimes
loosely taken to be, but means to the true end —
the greater happiness and well-being of the
whole people. This end the capitalist system
in its present form does not achieve. On the
one hand the majority of the workers of the
British Isles for the last century have been
underpaid, underfed, and badly housed. As a
result of combination and hard warfare, the
skilled artizans have won for themselves a
standard of life above the minimum standard
of living, but the great bulk of the workers have
not. They are always either below the level

INDUSTRIAL UNREST 27

of proper subsistence or in danger of falling
below it. On the other hand the wealth of the
rich has grown fabulously. How immense is
the volume of wealth possessed by the few has
only been revealed by the War. And all this
has been produced out of the profits of industry,
or the investment of those profits in developing
countries overseas. .There is something funda-
mentally wrong, says Labour, about a system
which accumulates wealth in this colossal fashion
at one end of the scale while keeping immense
numbers of men, women, and children starving
at the other. Somehow or other it must be
transformed, for it shows no signs of trans-
forming itself. And it must be transformed
by revolutionary means if peaceful methods
fail, for the one essential thing is that it should
not go on.

III.

So far as Reconstruction is concerned the
point of view of Labour is clear. They will
endeavour to secure, by every means in their
power, that after the War the industrial life
of the community shall be built on the founda-
tion of such wages and hours and conditions
of work as will enable every worker to maintain
a cleanly and comfortable home, and to have
leisure sufficient to enable him to continue his
education and to help to bring up his children
as useful and responsible members of the com-
munity. And the practical form in which
this principle will probably take shape will be
that reconstruction should be based on the
maintenance of the highest recent level of real
wages, the introduction of a minimum wage

28 THE OTHER WAR

of about 30^. a week, and the establishment
of a national normal day based on a forty-eight
hour working week, without overtime save in
the most exceptional emergencies. With this
ideal no public-spirited citizen can possibly
disagree. The securing of an adequate minimum
standard of life would at one stroke abolish half
of the problems of poverty and the slum, and
would benefit the children to a degree which
only those who have marked the improvement
in the appearance and clothing of children all
over the country since the War began will
realize. And a normal working day is almost
a necessary condition for the effective working
of our constitution, for otherwise the elector,
who in the last resort decides upon the broad
policy to be followed in the intricate and
momentous political problems of the modern
world, cannot fit himself to cast his vote as he
should. No greater blessing could come out
of the War than that we should build the whole
work of Reconstruction upon the foundation of
a permanently higher standard of living for all
engaged in productive industry, and especially
for the lower-paid workers. The real problem
is to discover the means by which it can be done.
It is at this point that the Labour world
reveals its real weakness. Dogged by that
tradition which, as we have seen, inevitably
comes from being divorced from any knowledge
of or share in responsibility for the problems of
industrial management, it has made no real
attempt to solve this half of the problem.
It is content to leave the Government and the
capitalist to find the way, or to recommend
such easy but illusory expedients as universal

INDUSTRIAL UNREST 29

nationalization, and the conscription of capital,
or to point to the vast resources of the
community as revealed by the daily expendi-
ture on the War as proof that the bene-
ficent reforms they suggested could easily be
carried out and paid for if only the will were
there. Some of these ideas have much to
recommend them as general principles. Some
of them may well be realized after years of
those sjnaller measures which are the foundation
of all lasting reform. But they do not meet
the practical problem of the situation as it will
exist immediately after the War. That prac-
tical problem is how to enable industry to find
employment for all on the basis of higher wages
and shorter hours than were in force before the
War.

The solution of this problem would seem
to resolve itself down into two things — in-
creased production and the better higher direction
of industry. These conditions cannot be created
by distributing the accumulated wealth of the
rich in the form of higher wages. Not only is
most of that wealth not realizable in the form
of money, but to distribute capital as working
expenses is the shortest road to national suicide.
Nor can they be created by diminishing the
rate of interest paid in the national staple in-
dustries. Excessive profits are often made by
monopolies or new industries, which are usually
small industries, and capital has often been
" watered >: in the past. But in the main
staples which support the bulk of the industrial
population the rate of interest earned in normal
times is not excessive nor more than sufficient
to enable the industry to obtain those fresh

30 THE OTHER WAR

supplies of capital which are constantly required
if it is to keep up to date and survive in the
competition with rivals at home or abroad.
The real evil is not the rate of interest, but the
concentration of excessive quantities of capital
in a few hands. And that evil can only be dealt
with by the State itself through income taxes,
death duties, and other means of limiting or
redistributing capital holdings. So far indeed
from its being possible to reduce the rate of
interest on capital after the War, it will pro-
bably rise. For the demand for capital after
the War will be immense, the interest rate is
largely an international rate, and capital will
only be obtainable in a market in which the
demand will exceed the supply. Further, about
four-fifths of the production of every year is
consumed in that year. If, therefore, the general
level of consumption is to be raised the level
of production must be raised also. The truth
is that the standard of production before the
War was wholly inadequate. It neither pro-
vided adequate pay or adequate employment
for labour, nor, despite all appearances, did it,
on the whole, pay excessive profits to capital,
for these profits were not sufficient to prevent
the greater part of the national savings, badly
needed at home, from being attracted by the
far higher rates of profit obtainable abroad.
Hence, whatever the far future may bring
forth, the first plank in the practical politics
of Reconstruction would seem to be to increase
production, so that the annual national dividend
may be sufficient both to pay the market rate
on capital and to pay high wages as well.

Increased production is a matter both for

INDUSTRIAL UNREST 31

employer and employed. It is practically im-
possible without the co-operation of Labour.
The foundation alike of industrial prosperity
and national well-being can only be a good day's
work for a good day's pay. The continuance
of ca' canny, the want of adaptability caused
by trade-union regulations, and the general
restriction of output, if they continue after the
War, will make the payment of high wages
impossible. But increased production is no less
a matter for the employer. The evils caused
by trade-union policy have been duplicated by
conservatism and unenterprising management
among the captains of industry. If every in-
dustry could command the inventive genius,
the scientific research, the organizing, manu-
facturing and selling capacity, the public spirit
and the hard work of the Ford motor car com-
pany and its employees, there would not be
much difficulty about increasing production,
and with it wages and dividends, and giving
low prices to the consumer as well. Increased
output, indeed, means a change in all classes,
for it means the growth of the gospel of work.
The love of ease, and the belief that happiness
lies in having no work to do, was strong in all
classes before the War. Even now people assume
that it will be possible to go back to pre-war
standards. That can never be. Faced by neces-
sity and the example of the Germans, we have
begun to see how little we understood what
work meant. Work does not mean longer hours,
or more fatigue. It means more initiative, and
more enterprise, and joy in doing one's work
perfectly, however simple it may be, because
it is one's own contribution towards the national

32 THE OTHER WAR

well-being. We shall never get the right idea
of work until we see that at bottom it is public
service which everyone ought to perform, rich
and poor alike. We have found something of
this spirit during the War. We shall only
build a happier world if we retain it afterwards.

But increased output as the result of better
work and better management deals with only
half the problem. Probably the greatest diffi-
culty of all in the way of maintaining higher
standards of living all round is that aspect of
the higher direction of industry which is con-
cerned with finding markets. The main reason
why the working classes, and especially those
who were formerly worst off, are, on the whole,
better off than they were before the War, is
because the war market for industrial and agri-
cultural products at high prices is practically
unlimited, because manufactories can therefore
flourish despite high wages, and because the
demand for labour is greater than the supply.
If the effective demand for goods was unlimited
after the War nothing would be easier than to
work a revolution in the economic condition of
the working classes in a very short space of time.
But under present-day conditions the effective
demand is not unlimited, and it is this fact
which is the governing fact of the whole process
of industry. For it is no use producing goods
for which no market can be found, or at a cost
which involves a loss on every product sold.
The President of the Trade Union Congress in
his opening address for 1916 rightly said that
the most important thing of all from the point
of view of Labour was the prevention of un-
employment after the War. That is only another

INDUSTRIAL UNREST 33

way of saying that the most important thing
will be to find markets. They are, indeed, but
two aspects of one thing. There can be no
real security for the individual worker until
there is steady employment at adequate wages.
And there can be no steady employment at
adequate wages until there is security for steady
markets at adequate prices.

Demand, of course, is in essence unlimited.
Nobody ever is supplied with all he wants.
There are always things which he needs or
would like if he could get them. But this
demand to-day is not effective, and the most
urgent problem of the time is to adjust supply
and demand so that there shall not be millions
of people anxious for goods and services at
the same time as thousands are starving because
they can find no work to do. The perfect
adjustment of supply and demand, however,
is not very easy. It certainly cannot be accom-
plished by slap-dash expedients. It requires
almost infinite research and industry. It in-
volves accurate and continuous investigation
into markets, the sources of raw material, the
supplies of labour, all over the world. It means
the most careful consideration of the balance
between consumption and the saving required
to create the capital necessary for the renewal
and extension of industrial plant and buildings.
High wages, for instance, are one of the most
important factors in creating and maintaining
a large home demand. It means the provision
of adequate means of transportation and the
intelligent and far-sighted adjustment of railway
and steamship rates. It is concerned with
national and international fiscal policy. It in-

34 THE OTHER WAR

volves great flexibility and adaptability both in
the management and in the working man, so
that methods and products may be quickly
changed to suit changes in demand and so on.
All these matters settle themselves at haphazard
to-day under a faulty application of the law of
supply and demand. If we are to have really
better times it will only be because order has
been consciously and intelligently introduced
into this chaos of ignorance and competition.

Reconstruction, therefore, on the foundation
of better economic conditions of life for the
industrial classes depends in part upon better
work from the worker and better managemei t
from the employer, but still more on the better
direction of industry from the point of view of
adjusting supply and demand. If we are really
to have higher wages and a normal day, not only
for our pre-war population but also for the vast
numbers of new workers which the War, or
high taxation after the War, will force into
the labour market, it will never come from
measures for taxing the rich, or redistributing
accumulated wealth, however desirable and
urgent such measures may be on other grounds,
it will only be because the difficulties in the way
of increasing production and finding markets
have been successfully overcome. Every nation
lives on its own work and intelligence and on
nothing else. The distribution of the product
of the national activity may be bad, as it was
lamentably bad before the War, and may require
root and branch reform. But that cannot alter
the fact that unless as a nation we produce in
every year enough of the products and services
which are necessary to our well-being on a

INDUSTRIAL UNREST 35

steadily improving standard of living, the eco-
nomic evils from which we suffer cannot be
removed. Those products and services may be
used by the nation itself, or exchanged for
others with outside nations, but no scheme for
the redistribution of accumulated wealth can
give us the economic reconstruction we require
unless it is accompanied by first-class work
under first-class direction by all citizens.

IV. — THE COMMONWEALTH OF INDUSTRY.

But, at bottom, successful Reconstruction
depends upon a reconciliation between capital
and labour. For progressive industry requires
constant initiative, constant improvement of
method, an intimate knowledge of conditions
in every stage from the production of raw
material in one part of the globe to the sale of the
finished product in another. This delicate work
on which the prosperity not only of the capitalist
and the workers, but of the community also
depends, cannot be rapidly and efficiently con-
ducted in the midst of intestinal strife. The
preliminary to any Reconstruction of our in-
dustrial life on a higher economic level is the
active co-operation of employer and employed
throughout all the complicated processes of
buying, manufacture and sale of which modern
industry consists.

How is the reconciliation necessary to this
co-operation to be effected ? Unfortunately there
is no simple mechanical method which will
produce that reconciliation. It depends, at
bottom, upon a fundamental change in the

foint of view from which industry is regarded
n the first section of this article it was said

36 THE OTHER WAR

that the ultimate causes of industrial unrest
were the divorce between employer and em-
ployed and the acquiescence of the State in
the system of private industrial war. The cure
for these evils would seem to have been supplied
by the War. As is now patent to everybody,
industry is public service, for on it the national
well-being depends. And it is by looking at
industry from the point of view of its being
public service that the solution of the problem
comes in sight. For it gives us the key both to
the problem of Reconstruction and to that more
fundamental question of the permanent relations
between capital and labour.

On the one hand, if industry is public service,
the main motive of the employer ought not
to be private profit. The employer in reality
occupies a position of high public trust, for he
is responsible for an industry which is not only
a source of national supply, but the means
whereby a great many citizens and their families
gain their living. From the national point of
view he is not a successful manager until he
conducts the industry in such a way that not
only is he able to pay such dividends on capital
thai he can obtain whatever supplies of fresh
capital are required for the conduct or expansion
of the industry, but is able to pay wages sufficient
to enable everybody employed in it to live as a
responsible citizen should. Further, before pay-
ing inordinate dividends either to capital or labour
he ought to consider whether he ought not to
reduce the price of his product to the public.
Directly the employer recognizes that he is in
essence a public servant, and that, while he is
entitled to adequate remuneration and capital

INDUSTRIAL UNREST 37

to adequate interest, the well-being of all his
employees is, from the national point of view,
the most important of the many considerations
of which he has to take account, the way to
reconciliation will be plain.

On the other hand, the main motive of the
employe ought to be to give the best work
possible during an adequate working day. He
also is a public servant, contributing his mite to
the work on which the community lives and
entitled to wages and hours which will enable
him to acquit himself in other ways as a re-
sponsible citizen, provided he works to the
utmost of his ability during working hours.

On this basis, and on this basis alone, does it
appear possible to effect such a reconciliation
between employers and employed that the work
of Reconstruction will be undertaken in a spirit
of zealous co-operation and not of suspicion and
conflict. And on this basis also does it alone
seem possible to transform for the better the
capitalistic system itself. The Chairman of the
Trade Union Congress of 1916 said in his
opening address that industrial democracy was
the only condition of lasting industrial peace.
He did not specify what industrial democracy
meant. Democracy in industry, however, carries
with it the same implications as it does in
government. It means that labour must shoulder
the whole responsibility of industry. Industry
is one indivisible whole, and in the long run,
the final responsibility for it must rest in one
set of hands. The capitalist can no more be
responsible for one-half of the business and
labour for the other than Cabinet and Opposi-
tion can each control a separate share of public

38 THE OTHER WAR

administration. Industrial democracy in the
true meaning of the word can only mean that
the management will be appointed by and
responsible to labour, who will thus be respon-
sible not only for interest on the capital it
borrows, but for liabilities undertaken, orders
given, and for the whole complicated process of
buying, producing and selling from start to
finish.

As to whether industrial democracy in this
sense is practical politics it is difficult to say.
From the point of view, however, of immediate
practical politics what matters most is the
motive with which industry itself is conducted.
The purpose of organized industry should be
to give, first, ever improving conditions of life
and work for all its employes, second, fair
remuneration to capital, and third improved
products or services, at falling prices to the
public. That is conducting industry as a public
service, and in industries conducted from this
point of view every employe ought to give the
best day's work he can. Whether this point
of view can become universal in the management
of industry without some change in the method
of appointing the management seems doubtful.
The management to-day is responsible to capital
alone. Yet it is not easy to see exactly how it
is to be made responsible to the employes and
the community as well, though the system of
introducing labour representatives on the board
of directors is said to have worked well in parts
of America. In any case, no good can come
from any system which puts impediments in
the way of the management itself performing
its own duty. The primary functions of the

INDUSTRIAL UNREST 39

management must always be to manage the
business successfully, otherwise nobody will get
a living out of it. The board must therefore
always consist mainly of those who understand
industrial organization, the intricacies of buying
and selling, the money market, and so forth,
and it cannot share its authority within its
works with any other body. If it does not do
its work properly the mode of reform is not to
make it more difficult for the management to
manage, but to put other and better qualified
men into office. But the most important thing
is to make the idea of public service the dominant
motive throughout industry, for once that is
done it will not be difficult to find the precise
mode of organization necessary to give it per-
manent effect.

Once that motive predominates we shall see
a second industrial revolution, not less far-
reaching, but far more beneficent in its effects,
than the first. If all the energy and enterprise
and enthusiasm which are put into the business
of warfare were applied to increasing the effi-
ciency of industry itself, and heightening the
conditions of living of all those engaged in it,
the creation and diffusion of wealth would be
such that in an astonishingly short space of
time the worst and most humiliating of our
national problems — unemployment, underfeeding,
the slums, and the workhouses — would disappear,
and we should have not only a nation of ade-
quately provided families, but ample funds for
works of public utility as well.

The greatest single obstacle in the way of a
good start towards better days is the accumulated
grievances which each has against the other.

40 THE OTHER WAR

The employer, struggling with the immense
difficulties of management, of rinding markets
and reducing costs in order to sell successfully
in them, finds himself thwarted and hindered by
Labour at every stage. Organized Labour seems
to him to be ineradicably unreasonable, un-
patriotic, and self-seeking, and utterly regardless
of the problem of managing the industries on
which the national welfare depends and of
which he feels himself the only responsible
guardian. Labour, on the other hand, struggling
with the problem of living in a country where
unemployment has been rife, and low wages
prevalent in many trades, tends to regard
employers as a class of people of exceptional
heartlessness and greed ; as men who scruple
not to reduce wages or sack employees regardless
of the appalling effects in working-class homes,
in order that they may make sure of profits for
themselves. In consequence it settles down into
an attitude of settled hostility, and regards
restriction of output, strikes, and all the other
practices of which the employer complains, as
legitimate methods by which to maintain the
standard of life and protect itself against ex-
ploitation. This sea of traditional suspicion and
ill-will is fed by a daily trickle of new grievances
created by bad employers and unscrupulous or
ignorant agitators. And thus we get the two
sides drawn up in parallel armies, each so sus-
picious of the other and so set in its belief in
the supreme efficacy of force that negotiation
is more like the diplomacy of the mailed fist
than conference between partners in the same
business.

If we are really to reconstruct our country

INDUSTRIAL UNREST 41

this world of suspicion and hatred must be left
behind. It will do no good to remember who
was responsible for the evils in the past, or the
long catalogue of mistakes on both sides. The
only thing is to set to work to build the future,
with better work from one side and better pay
from the other as the starting-point. For-
tunately the omens are bright. As we become
more conscious of the sacrifices and endurance
of those who are fighting our battles abroad, so
also grows the determination that nothing must
be allowed to stand in the way of building up
a happier and more equal commonwealth for
them to come back to after the War is over.
And part of this commonwealth must be the
world of industry. We shall never be a happy
country so long as there is warfare, even blood-
less warfare, in our midst. And we shall never
get rid of that warfare until industry itself
becomes a commonwealth, conducted with perfect
work from all, for the benefit of all.

P. H. K.

CHAPTER III.

COMMON FALLACIES.

IN the two preceding chapters the character
of the class struggle with which this book is
concerned and its historical background have
been indicated. This struggle is, in part, the
heritage of the past ; it is in part the inevitable
outcome of the more elemental struggle for
existence. Class ignorance and the offspring of
ignorance, distrust, render its bitterness possible ;
and the distance which lies between the rich
and the poor, between the districts in which
they live, between the manner in which they
reason, between the very language which they
speak, render that ignorance natural. That the
labourer should fail to realize that he is carrying
on a common work for a common aim with a
banker or a capitalist whose name even he does
not know, can be but small cause of surprise.
That both the rich and the poor, so divided in
life, so estranged in sympathies, should fail
to perceive the community of their interests,
and in so failing obliterate the truth by in-
dividual structures of economic fallacies, has
been perhaps inevitable.

It may be profitable to examine some of
these fallacies. For if society is ever to become
a homogeneous whole wherein man may co-
operate for mutual good and cease to fight only
for individual benefit, man must first learn to
acquire two things — a will to understand the
problem of social betterment, and an under-
standing of that problem.

42

COMMON FALLACIES 43

We must remember in the first place that
all life is struggling and must struggle for its
existence ; in the second place that only through
co-operation can success in that struggle be
won. But co-operation to be efficient must
entail division of labour. We increase our
power over nature, our competence to obtain
what is necessary for existence and what is
necessary for enjoyment by allowing those with
brains to direct and others to execute, by letting
the produce of one climate and the art of one
character be exchanged for those of another.
We increase our power and our competence,
too, by adopting indirect methods of production,
by making a plough in order to grow wheat or
constructing a machine in order to weave cloth.
But if we are to obtain the plough or the machine
we must not at once consume all we produce.
Somebody must save and wait ; somebody must
in other words, produce capital. For that saving
and waiting, for devoting part of his time to
producing what will not at first bring any
enjoyable reward, that somebody must be paid.
When co-operation and separation of functions
have been begun, when the field has been reaped
and the wealth produced, there will arise the
question of the division of that wealth among
the workers. It is over this problem of the
allotment of the harvest that dispute is likely
to arise. When society is composed of segre-
gated groups as at the present day one group
of labourers will be jealous of the reward of
another, and all groups of labourers will be
jealous of the reward of capital. For despite
all its civilization this society is not so very
far removed from the state of a pack of wolves

44 THE OTHER WAR

which hunt together and then fight over their
spoils. The struggle for existence is, in fact,
and always will be a double one — the struggle
of any group of animal life against all other
animal life, and the struggle of each individual
in each group against every other individual.
Is it not conceivable that we might conduct
this second struggle not by fighting but by
thinking ? Is not our knowledge of the facts
at present obscured by the existence of this
warfare ?

Some capitalists1 fallacies considered. Misconcep-
tion of the relationship between capital and
labour. " Labour a commodity" " Capital
employs labour."

Capitalists ha ve, with the outlook of shopkeepers ,
too often regarded labour as a commodity which
should be bought cheap and its produce as a
commodity which should be sold dear. Labour,
with a longing for independence, has regarded
capital as a slave master who allows his slaves
to starve. Neither view is correct, for though
labour may have a price, and though the causes
that determine the amount which will be paid
for labour are ultimately the same as those which
determine the price of a pair of boots or a tin
kettle, wages are not merely the purchase price
of labour but also its cost of maintenance and
the fund, moreover, from which the labourer
must draw every enjoyment and decency of life.
Secondly, capital only employs labour in the
same sense as labour employs capital. Both
co-operate. Each is equally essential to the
other. They are as closely allied and as mutually
necessary for the efficiency of both as one wing

COMMON FALLACIES 45

of a bird is for the efficiency of the other. But
capitalists when they are self-complacent and
labour when it is discontented, always speak
as if capital made work for labour. What really
makes work is the absence of riches, not their
existence.

" Wealth makes work."

So widely held is the fallacy that wealth makes
work that even a man of the learning and repu-
tation of Mr. H. J. MacKinder is to be found
writing in an otherwise excellent letter to The
Times as follows : " You can only tax the rich
man's income. That income is spent wholly on
commodities and services, or, in other words,
either directly or indirectly almost wholly on
wages. The rich man is the loaf giver of those
who look to him." If expenditure on com-
modities and services goes " almost wholly " in
wages, then it is true that labour is " almost "
the sole source of wealth ! But let that pass for
the moment. It is a labour fallacy which will
be examined later. " The rich man is the loaf-
giver of those who look to him." The rich man,
be it noted, lightly assumes this charitable
character by the simple, even enjoyable ex-
pedient of expending his wealth. If the rich
man spends his wealth by buying what is neces-
sary he benefits himself, and if at the same time
he indirectly benefits labour by " creating em-
ployment," he does so, surely, equally and to
no greater extent than the poor man who like-
wise spends his wealth on necessities. We begin
to wonder whether the rich have larger needs
than the poor, or the poor so little wealth that
they cannot satisfy their needs. But this is

46 THE OTHER WAR

not what Mr. MacKinder means. He is speak-
ing of expenditure as such, not merely on
necessities, but on decencies, on comforts, on
luxuries, on superfluities.

Let us examine, then, the effect of the ex-
penditure by a rich man of say £10,000 a year
on luxuries distributed partly on keeping a
large number of personal servants and partly
on the direct consumption of luxuries. First,
then, we should remember, putting aside moral
and physiological considerations, that the value
of labour lies in its results, not in its process.
Secondly, we may postulate that the value of
what is produced by work consists in the happi-
ness or the lack of suffering or the general
betterment which it brings about. The result,
therefore, of the expenditure of surplus wealth
on what is unnecessary is to divert labour
employed in this way from the production of
what is essential to the production of what is
unessential. Let us suppose that the man who
spends £10,000 a year on luxury devotes one-
tenth of that amount on giving dinners to
himself and his friends. Then, all the capital
and labour which is occupied in producing the
wines and the fruits and the pate de fois gras
for his table might instead have been devoted
to the production of better clothes or more
food for those who have no surplus wealth.
It pays the business man better to undertake
the task of providing for the comforts of the rich
rather than for the necessities of the poor.
For those who possess wealth are willing and
able to pay high prices for what they buy,
whereas were greater quantities of clothes, of
food or of cheap furniture produced, the price

COMMON FALLACIES 47

of these would fall, and either the business man
would have to be content with a lower rate of
profits or he would have to pay lower wages to
his employes. The indirect employment of
labour by luxury expenditure may then, so far
as this particular cause is concerned, slightly
raise the volume of wage payments. But the
time men spend on such work is more often than
not time wasted. They are satisfying imaginary
wants instead of supplying real needs. When
those wants are wholly imaginary, and the rich
man is unaware of any additional comfort from
an additional employe whom he engages, then
there is no compensation for the time and labour
thrown away, and the man would be as well
occupied in shovelling shingle into the sea.
Were all the capital and labour so squandered
to be concentrated on the production of goods
which are really needed, then the price of these
goods would fall and all consumers would be
benefited. Were the wealth which is spent on
luxury to be saved, then more capital would be
created, capital would be more abundant and
cheaper, and wages, as will be explained later,
might be equivalently higher.

It may be contended, however, that many
luxuries do not entail great labour and that the
expenditure of wealth thereon cannot materially
damage others. Are the effects the same if a
man spend £1,000 on a Caxton or a diamond
or a motor car ? The purchase of the first is
simply the transference of a certain amount of
wealth from one person to another, for obviously
no time or labour could produce a new Caxton.
The purchase of the second is damaging to
labour if, and only if, the demand for diamonds

48 THE OTHER WAR

create an industry of diamond mining on which
capital and labour be expended. The purchase
of the motor car has the effects we have already
demonstrated. It may be taken, then, almost
as an axiom that in the long run luxury is bad
for labour and a heavy tax on the whole com-
munity exactly in proportion as it diverts labour
and capital from doing work which is necessary
to doing work which is not. Thus we find on
all sides at the present moment appeals that we
should economize in our food, in our dress, in
travelling ; but no sane person would protest
against £1,000 being given for an ancient goblet
at a Red Cross sale. The goblet possesses
value because it is rare or beautiful, not because
it has taken labour to produce. The purchaser
has cost the community nothing ; but has re-
lieved it of possible taxation for the Red Cross.
In short, then, the country does not want work-
men employed for the sake of employment,
but for the sake of the utilities which they
produce ; it does not want waste but wealth ;
it does not want feasts for the edification of
those who may enjoy the crumbs.

" High wages equal high cost of production."

Were we to review the misconceptions of the
capitalist class as a whole, both concerning
the economic structure in general and concerning
the labour problem in particular, we should find
that the majority and the most important were
not eonomic but philosophic. The main diffi-
culty is the attitude of mind of those who are not
wage earners, not their ignorance of the principles
of their own business. There are two points,
however, which demand attention. Owing, per-

COMMON FALLACIES 49

haps, to too close an attention to the details
of costs, and a lack of imagination about the
real nature of expense, it is often supposed in
theory and still more frequently accepted in
fact that high wages are identical with high
cost of production. Wages do not simply pur-
chase, they also maintain labour, and it is no
more economical to underpay labour than to
underfeed one's draught horses. Higher wages
only become a real additional expense when
their increase does not produce any equivalent
increase in the efficiency of labour or when
their enforced payment does not enliven the
employer to the possibilities of economies in
other directions. From the time of the first
Factory Act until the results of the passing of
the Anti-Sweating Act began to become appar-
ent, examples of the ease with which those
economies may be made have been as frequent
as have been the expostulations on the part
of employers of their impossibility and their
gloomy forecasts of ruin from reform.

" The compensation for high wages or heavy taxation
must be high Tariffs "

It is difficult to overestimate the importance
of this non-possumus attitude, and the point will
be further discussed in the fourth chapter of
this book. But its immediate interest lies in
the political and economic agitation to which
it sometimes gives rise, demanding as a sort of
compensation for high wages or heavy taxation
the imposition of tariff duties and special govern-
ment protection. This is not the place to enter
into the threadbare controversy of Tariff Reform
and Free Trade. It is, however, worth while

50 THE OTHER WAR

to point out that if protection is desirable when
wages are high and taxation heavy, it is desirable
quite apart from either of these considerations,
and that neither the one nor the other increases
the desirability thereof by one iota. We pay
for what we import with what we export, and
if we import the produce of low paid labour,
then our foreign customers must pay for the
manufactures and services of high paid labour.
We pay for what we import with what we
export and if we import the produce of a lightly
taxed people, they must buy from us the produce
of a heavily taxed people. Unfortunately, we
cannot receive without giving.

Labour Fallacies. " The Work Fund:'

Though the misconceptions of the rich may
be rather philosophic than economic, it is difficult
to believe that this is the case with those of
labour. For the fallacies which render the
closer union of the two classes so difficult are
fallacies which are to be found every moment
hampering labour's administration of their own
unions and their own business. The most
important of these fallacies both on account of
its enormous, tragic cost to the country and on
account of the element of truth therein, which
makes its elimination so nearly impossible, is
what may be called the Labour Fund and Work
Fund fallacy ; the idea, that is, that there is a
certain amount of work to be done or, as it is
sometimes put, a certain amount of capital to
employ labour, and a certain amount of labour
on the other hand to do the work. The argu-
ment runs as follows — there is so much work
to be done, lets us say a house to be built, and

COMMON FALLACIES 51

a definite number of builders to do the work.
The longer the men take over the work, then,
the greater the probability of there being another
job by the time the house is finished ; therefore,
nobody must hurry. This argument percolates
into and leaves its stain on every corner of the
industrial world. Men work slow not simply
from laziness but from fear and the idea of self-
protection ; unions restrict their numbers to
limit the supply of labour ; women are excluded
from occupations for the same reason ; skilled
labour is employed on unskilled work ; a car-
penter may not do one job because it is the
right of a mechanic, a mechanic may not do
another because it is the function of a fitter.
Time is wasted, work is wasted, skill is wasted,
men are kept idle because it is to the advantage
of a particular individual or a particular union.
The community is taxed for the benefit of A or
B, and it is sometimes solemnly argued that as
the community consists of As and Bs the benefit
must become generalized. Ultimately, the fal-
lacy is a simple one to explain. It is rooted in
and springs from the opinion already referred to
that work depends on riches, not riches on work.
In reality we can only consume what we first
produce, and if we work harder, if we produce
more, we shall have more to consume. The idle
rich are blamed for their idleness, the lazy poor
for their laziness ; but at the same time in-
dustry is as strongly condemned as either. Can
anything be more obvious than that, if the few
are able to obtain a larger share of wealth by
restricting the production of wealth, the many
must go without ? Not until the present War
removed the cream of our industrial population

52 THE OTHER WAR

had we any idea of our latent productive power,
and our ignorance was due to the fact that we
never dared to seek the knowledge. No one
in a primitive society, where men till their
fields in common or cultivate their own in-
dividual plots, would believe that if some did
nothing any would be better off. But, still, it
is true that restriction of output or restriction
of the labour supply may temporally benefit
sections, and even large sections, of the population;
it is true also that were all to work, men and
women, as they would work were they employing
themselves or cultivating their own land, the
rate of money wages for each individual might
be lower ; and there is a lack of driving force in
the still more obvious truth that with greater
wealth and hence greater capital, wages would
rise again or that, though wages might be lower,
what wages would buy would be cheaper. But
before any real and lasting solution of the
difficulty can be rendered possible these truths
must be grasped. Labour must remember that
its ultimate object must be the creation of more
wealth in which all may share, the utilization of
every available atom of energy for that purpose,
the saving of time not of work.

" Unemployment the result of capitalism"

The difficulties of so acting as to bring about
these results may be great ; but greater pros-
perity can never be achieved by a policy which
runs counter to the production of that which is
desired. How great the difficulties are can only
be adequately comprehended by those who are
aware of the ever present dread of unemploy-
ment. If a job means safety, and after the

COMMON FALLACIES 53

job is finished there may be starvation, it is
natural to think of it as some sacred thing
which must be preserved with loving care
so long as it can last. Unemployment, it is
said, is the result of private capitalism, and
capitalism must pay the price. Again this
argument lays on the shoulders of the capitalist
class the blame for a fact for which they are not
responsible and for the horror of which even
the present system of economic organization is
not wholly to be blamed. The causes of un-
employment are many. Perhaps it would not
be incorrect to say that the most serious un-
employment is really a form of converted famine.
Seasons change, and the amount of wealth which
land produces differs from year to year. If a
crop fails and wheat is dearer, men have less
money to spend on other things, and those who
were employed on their production are likely
to suffer. Beyond this general cause, the
occasional insufficiency of nature, industrial un-
employment is doubtless intensified by the
industrial system obtaining in Western Europe.
We should expect to find the percentage of
those unable to find work of any kind greater
in Birmingham than in a Russian mir. But
though it may be due thus in part to the capitalist
system, to indirect production, it is not for that
reason due to the private ownership of capital.
If machines are produced to reap a crop, it is
easy enough to overestimate the demand for
these machines, and so soon as their over-
production becomes apparent shops will be
closed, and men will lose their employment.
We must direct our attention to the fact of
indirect production, not to that of private owner-

54 THE OTHER WAR

ship. Fashions change, and what may be ur-
gently needed one day may be a glut on the
market the next. Methods of production change,
and a new invention may render useless the
skill of men engaged on some process which a
machine may carry out more efficiently. Seasons
change, and it may be impossible to find as much
work to be done in winter as in summer. In-
surance against unemployment is possible ; it
may even be possible so to organize society that
no man or woman shall be in want through lack
of work. But to abolish unemployment is not
possible.

The organization of society misconceived.

In a book which was published shortly before
the War, said to be written by *a working man,*
is given a description of society as it appears
to the labouring classes in the form of a lecture
by one builder to his mates. The lecture is
accompanied by a practical demonstration with
the aid of some squares of bread and a few
halfpence :—

' These pieces of bread,' says the lecturer, ' represent
the raw materials which exist naturally in and on the earth :

they are not made by any human being, but were

created by the Great Spirit for the benefit of all '. ...

" ' Now/ continues the lecturer, ' I am a capitalist ; or,
rather, I represent the landlord and capitalist class. That
is to say, all these raw materials belong to me '. . . .

' Now you three represent the working class : you have
nothing. And for my part, although I have all these raw
materials, they are of no use to me ; what I need is the things
which can be made out of these raw materials by work. But
as I am too lazy to work myself, I have invented the money
trick to make you work for me. But first I must explain
that I possess something besides the raw materials. These

* ' The Ragged Trousered Philanthropists,' by Robert Tressall,
pp. 172-4.

COMMON FALLACIES 55

three knives represent all the machinery of production : the
factories, tools, railways, and so forth, without which the
necessaries of life cannot be produced in abundance. And
these three coins represent my Money capital/

" He now proceeded to cut up one of the slices of bread
into a number of little square blocks.

* These represent the things which are produced by
labour, aided by machinery, from the raw materials. We
will suppose that three of these blocks represent a week's
work. We will suppose that each of these ha'pennies is a
sovereign.

" ' You say that you are all in need of employment, and
as I am a kind hearted capitalist I am going to invest all
my money in various industries so as to give you plenty of
work. I shall pay each of you one pound per week ; you
must each produce three of these square blocks to represent
a week's work. For doing this work you will each receive
your wages ; the money will be your own to do as you like
with, and the things you produce will of course be mine, to
do as I like with.'

" The working classes accordingly set to work, and the
capitalist class sat down and watched them. As soon as
they had finished they passed the nine little blocks of bread
to Owen [the lecturer], who placed them on a piece of paper
by his side and paid the workers their wages.

" ' These blocks represent the necessaries of life. You
can't live without some of these things, but as they belong
to me you will have to buy some of them from me. My
price for these blocks is one pound each.'

" As the working classes were in need of the necessaries
of life and as they could not eat, drink; or wear the useless
money, they were compelled to agree to the kind capitalist's
terms. They each bought back and at once consumed one-
third of the produce of their labour. The capitalist class
also devoured two of the square blocks, and so the net result
of the week's work was that the kind capitalist had consumed
two pounds' worth of the things produced by the labour of
others, and reckoning the squares at their market value of
one pound each, he had more than doubled his capital, for
he still possessed the three pounds in money and in addition
four pounds' worth of goods. As for the working classes,
having consumed the pound's worth of necessaries they had
bought with their wages, they were again in precisely the
same condition as when they started work — they had

56 THE OTHER WAR

nothing 'Well, and wot the bloody 'ell are we to do

now ? ' demanded Philpot."*

The above quotation represents so nicely the
condition of society as seen by large masses of
working men that no apology need be made for
its length. The picture of society, too, which
the lecturer draws is so nearly accurate in detail
as to be scarcely a caricature ; but the values
are wrong and the perspective misleading. He
probably understood well enough the parts
which capital and labour play respectively in
production, was well aware that not all those
outside the working classes are capitalists, con-
ceived it even as possible that the value of the
men's labour was not more than a pound a week.
But the inferences which his audience would draw
would be widely different ; and if we step out-
side this microcosm to society as it exists, we
shall find a very similar condition of circum-
stances. It is exactly on these questions of : —

(1) the stratification of society ;

(2) the origin and distribution of wealth ;

(3) the character and functions of capital ;

(4) the character and functions of money,

that the crudest and most dangerous miscon-
ceptions exist.

" Society has two elements, the capitalist and
the labourer."

Labour has, in fact, a natural inclination
unduly to simplify the problem. All who are
not labourers, that is in the eyes of the working
classes, all who are not dependent on a weekly
wage and are not liable to receive a week's
notice to quit, they boldly and broadly group

COMMON FALLACIES 57

as capitalists. All classes, indeed, are inclined
to analyse their own and synthesize other
classes ; but in this case the error is doubly
regrettable, first because it indicates a failure to
understand that the whole tendency of recent
development has been towards the creation and
evolution of a larger and larger class of pro-
fessional and salaried men whose position in
their increasing competition, the comparative
fixity of their wages, their liability to unemploy-
ment and their dependence on others for their
livelihood is approximating more and more to
that of the so-called labouring classes, and
secondly, because it is exactly among this section
of the community that the working classes could
find real sympathy and valuable support. It is
often said that success in the struggle between
capital and labour will be ultimately determined
not by the relative strength of either party but
by the consumer, and by this is meant that
ultimately not the comparative economic strength
of these two great contending armies, but the
moral force of the population as a whole and
more especially of those less personally in-
terested in the struggle will determine the
result. If this belief be correct, it is all the more
desirable that both parties should realize as
soon as may be that a distinct class relatively
disinterested and dispassionate exists and
possesses real potentialities as mediator.

The causes of the inequality of the distribution of
wealth confused. The two causes.

The growth of this middle class is, of course,
a further proof that capital is accumulating
more and more in the hands of relatively few

58 THE OTHER WAR

persons, and the process by which this agglome-
ration takes place is not so very different from
that described in the parable of the pieces of
bread. But when objection is taken to this
tendency we almost always find abuse hurled
with striking impartiality at capital and capital-
ists alike. The great bulk of the population
has, in fact, failed to realize that there are two
quite distinct possible causes of the inequality
of the distribution of wealth : (i) the first
possible cause is that capital, that is existing
wealth, not receiving necessarily any undue
reward for its use is in the hands of a small
fraction of the community, so that if even if
wages be adequate as a return for the work done,
still the small fraction of the population are rich
and the large remainder poor ; (2) the second
possible cause is that the reward which capital
receives is unduly high, with the result, since
labour and capital must share in the products
of their co-operation, that wages are unduly
low. Now it is quite clear that the policy
which should be adopted to counteract the
former of these alternatives, supposing it were
the real cause of distress, would be widely
different from that which should be followed to
counteract the second. But in practice both
the causes and their antidotes are continually
confused.

Each cause a distinct antidote. The first considered.

Labour, no doubt, had in the first instance
no alternative but to combine and improve its
bargaining power with capital by controlling
the numbers of men applying for any particular
job or by threats of strikes. But it is, perhaps,

COMMON FALLACIES 59

questionable whether, since the whole body of
organized and unorganized labour has come to
acquire greater political power, more attention
should not have been given to counteracting
the first rather than the second cause of the
inequality of the distribution of wealth. Let
us imagine for a moment that we are in no way
concerned with the justice or the injustice, the
ultimate desirability or undesirability, of the
undertaking, and we shall not find it difficult to
show that the limits to the possibility of counter-
acting the second of the causes mentioned above
are by far narrower than those which must be
set to the first. In so doing it ought at the
same time to become clear what the real character
and functions of capital really are. A man may
be rich because he possesses exceptional talents
or because he is placed in an exceptionally
advantageous position or because he inherited
exceptionally large quantities of capital. Talents
of a high order are always in demand and always
reap, and always will reap until the world is
very differently organized indeed, special rewards.
We cannot distribute Mr. Marconi's brains
among the population. But it would not be an
impossible thing to distribute the wealth, let
us say, of Baron de Forest. There is no
theoretical or necessarily practical limit to the
possible percentage which death duties may
represent of capital left by the deceased. The
actual practical limit is this. Capital is, as we
have seen, necessary for the conduct of business.
Therefore somebody must save it. Now, were
all wealth to pass to the State at death, then
either the State must save and lend or use as
much as the heirs of the dead man would have

60 THE OTHER WAR

saved, or the rest of the population, whose taxa-
tion is reduced by an amount equal to what
the State acquires by its hundred per cent death
duties, must save that sum. But be two points
remembered. First, the poor are not made
richer by the rich being made poorer. Wages
will not rise owing to a prohibition on the in-
heritance of wealth. Secondly, wages will cer-
tainly fall if the people, more lightly taxed in
life, spend the additional wealth they thus
control and do not create sufficient capital.
We can only share in what we produce. Capital
is necessary for production. If less is saved,
capital will be wanting. With less capital, less
will be produced. If less is produced there is
less in which to share.

The second considered.

The second possible cause of the inequality
of the distribution of wealth, it was stated above,
was that the reward which capital receives may
be unduly high, with the effect that the reward
which labour receives is equivalently low. In
other words, in the struggle over the distribution
of wealth produced from day to day capital may
prove the more successful combatant, so that
relatively little is left for labour. This is the
view which labour, with the constant feeling of
insecurity, living, if not always in, almost always
amongst poverty, generally adopts. This is the
view which almost all strikers and trade unions,
before the rise of the Syndicalists with their
professed policy of obtaining control over capital
itself, tacitly accepted. It may be and doubtless
often is true, for a man who employs labour
may pay less in wages than the labour is really

COMMON FALLACIES 6 1

worth to him, just as the man who sells milk
may charge more for the milk than he should,
were he content with a reasonable profit. In
such cases, and they occur every day in every
town in the country, a strike or threat of strike
may be successful in raising wages. But what
is often not realized is, first that there is a limit
to the success of such a policy, and secondly,
that owing to that limit, were this policy to
be as successful as it possibly could be, it could
never bring about the redistribution of wealth
so long as the first cause of inequality existed.
The reason is as follows. A man may sell milk
unreasonably dear, and we may be able to
reduce his price from 6d. to, say, 3!^., but if
everyone refused to give more than $d. for it,
it is quite possible that no one would obtain any
milk at all, for the simple reason that it would
no longer pay to produce it. It is exactly the
same with capital. An interest of 8 per cent,
that is a price of £8 per annum for every £100
of capital borrowed, might be excessive and
result in the firm which offered it being unable
to pay its men adequately. But, on the other
hand, were no one to offer more than 4 per cent,
then men might be less inclined to save, or they
might invest their capital abroad, with the result
that firms in this country would be handicapped,
unable to produce as much as before and,
therefore, have less to divide with labour.

Thus there is a limit to the method of raising
wages by reducing the interest paid to capital.
Wages may be raised in this way, when the
increased wages add to the efficiency of labour,
which thus produces more, when they awaken
the organizer of business to the possibility of

62 THE OTHER WAR

economies in other directions, when the firm
is unusually successful and makes larger profits
than it is necessary to pay in interest, or when
the firm has deliberately paid labour less than
it could. But were every body of men to strike
and be successful in raising wages up to the
limit of possibility in every case where any of
these conditions obtained, though the whole
country might be better off and happier, rich
and poor would still exist because a few people
own much capital and capital must receive some
reward.

The nature and functions of capital.

Capital must receive some reward because it
is not true that labour is the sole source of
wealth. If labour were the sole source of wealth,
then the population of Reading could manu-
facture as many biscuits sitting in a neighbouring
meadow on the banks of the Thames as they
can in Messrs. Huntley & Palmer's factories.
It is sometimes said that labour built the factories,
therefore produced the capital and, therefore,
alone produced the biscuits. Well, if the men
of Reading built new factories in the meadow
they had chosen without borrowing, this might
be true ; but it would only be true because they
had themselves become capitalists. For they
would have to wait a considerable time while
they were making and setting up their plant,
before they could manufacture any biscuits,
and they would have in the mean time to live
on their savings. But it is exactly of this waiting
and saving that capital consists.

Labour and capital will inevitably go on fight-
ing and quarrelling until capitalists cease to

COMMON FALLACIES 63

regard labour with suspicion as an enemy, and
until labour ceases to regard capital rather as
a sin than an ally.

Two fallacies in reference to money, (i.) " Money
equals wealth."

If labour and capital, the organizer of business
and the inventor, be the beginning and end of
production, what part then does money play
and how can it be the cause of distress ? There
exist two contradictory errors about money,
which together are almost universal in their
acceptance. The first is that money and wealth
are synonymous terms, and that money is the
panagathon to the possession of which all aspire ;
the second is that which appears in the quotation
made above, that it is the means by which the
rich are able to trick and cheat the poor. Jeru-
salem is golden ; but socialist Utopias are
visualized where there shall be no money and
hence no poverty. House room and travelling
and even food must be free where there is no
money wherewith to buy them ! The first
doctrine is erroneous, because money is not
coincident with wealth, nor is it even desired
for its own sake. The wealth in the world is
as a matter of fact enormously in excess of the
money. Were all the landowners in this country,
for instance, to attempt to convert their pro-
perty into cash, they would immediately find
that there was not sufficient cash to go round.
The quantity of money is small because its use
is strictly limited ; it is required in the main
simply as a token to act as an indication of the
right to receive something. When a man is paid
two pounds in wages the two pounds are of no

64 THE OTHER WAR

direct use to him. He can only make use of
them by handing them on to someone else in
exchange for what he can use directly, and the
people to whom he pays them will likewise
only be able to make use of them by handing
them on again. Money, it is true, is wealth,
for it is useful in acting thus as a means by
which we can exchange things, our services for
our food or one object for another. But it is
only a tiny fraction of all wealth, and at best
a perverse form of wealth of which we only
make use by getting rid.

(ii.) " Money the cause of poverty."

The second doctrine is erroneous because it
mistakes an instrument for a cause. The un-
conscious argument is as follows : payments are
made with money ; if there were no money
there would be no payments ; if there were no
payments everything would be free. But really
we do not pay for things with money, we only
pretend to. Wages of farm labourers in Scot-
land still consist sometimes partly of oatmeal
and milk. That oatmeal and milk have been
as truly paid for as any which one may purchase
in a shop, for the payment is the work done
on the farm. So, too, the squares of bread
handed over by the " kind capitalist " were
obtained really not with the halfpence but with
the work done in the first place. Thus is money
merely a sign of the power to purchase, and
that power may be won by work or by possession
of wealth. But the sign does not influence
the power. The " kind capitalist " did not gain
by the halfpence ; the recipients of the half-
pence did, for it is more convenient to receive

COMMON FALLACIES 65

what is due in money rather than in goods,
because it is then possible to buy what is desired
instead of obtaining porridge and milk or what
it is the practice to accept.

' Taxation for the War Loan will decrease the
supplies of capital '."

Left to the end is a problem about which
there is such wide- spread misconception that
even the late editor of one of the leading financial
papers is to be found boldly disputing with
some anonymous protagonist, and propounding
views about as misleading as any which may
be found in the whole range of war literature.
The question is that of the supplies of capital
after the War and the effects of the taxation
for the interest on the war loan on those supplies,
and it is one of the foremost importance because
there is a very real danger that owing to con-
fusion of thought on the subject, perfectly
unjustifiable pessimism may lead employers in
good faith to believe that it is impossible after
the War to adopt a more generous attitude to
labour and thus intensify the labour difficulties.
In a letter on July i to The Economist a writer
pointed out that it was erroneous to suppose that
saving after the War would be affected by the
taxation raised with the object of paying interest
on the loan so long as the subscription to that
loan was made in this country. Such taxation, it
was said, was simply taking from A to give to B.
In his editorial footnote, Mr. Hirst replied :
(i) that if this was so Germany, who has bor-
rowed almost entirely at home, would be in a
far better position than Great Britain and
France ; and (2) " that taxation is not taken

F

66 THE OTHER WAR

from A and handed to B, but is taken both from
A and B. B, in fact, has to pay his own interest.
If the War goes on long enough, all interest
coupons might be taxed not 5$., but 155. or 20$.
in the pound. What about the supplies of
capital then ? "

The discussion was protracted over several
weeks, but the foregoing is sufficient to show
the nature of the errors which are current.
The correspondent was, of course, perfectly
correct in his statements. The War does, it
is true, diminish the amount of capital available,
and there will be a shortage after the conclusion
of peace because instead of saving now we are
spending. Labour and capital which in normal
times would be devoted to building new fac-
tories, machines, railways, and all the other
paraphernalia of production is concentrated in-
stead on the manufacture of shells, which are
themselves destroyed in a moment of time.
Machinery and buildings, which in normal times
would be conserved, are being worn out without
being replaced. Less wealth will, therefore, be
produced after the War, and the implements
of production will prove in part to be rusty.
That and not taxation for the war loan will be
the nature of the cause of the shortage of capital,
for as was very truly said such taxation is merely
taking from A to give to B. If Brown has
bought £10,000 worth of War Loan and is owed
£500 per annum as interest thereon, then the
Government will have to tax the whole com-
munity to pay Brown and all the other holders
of stock. Brown as a member of the community
will naturally be taxed also. Let it be supposed
that this levy equals a 5 per cent income-tax.

COMMON FALLACIES 67

Then Tom, Dick and Harry, and also Brown,
will have 5 per cent less to save. But let it
further be supposed that they would all have
saved exactly 5 per cent of their income had
they been untaxed and now can save nothing.
Tom, Dick and Harry, then, do save nothing.
Brown loses in taxation what he would before
have saved, and receives it back in the form
of interest. Therefore, he can save just as
much as he would have done had there been
no tax, and his position in this respect is un-
affected. But in addition he receives all that
Tom, Dick and Harry would have saved and
is in the fortunate position of being able to
save for them. The same holds good whether
the taxation be 5 per cent or 10 per cent, or as
Mr. Hirst suggests 15$. on every coupon. Brown
may have 155. in the pound taken from him ;
but since he receives it back again it makes but
little difference to him. Some difference it
does make for two reasons. The first is that
the tax costs something to collect and this cost
of collection is a real and definite loss to the
community. The second is that a certain time
will elapse between the day when the tax is
paid to the Government and the day when the
Government pays it out again as interest.
What Mr. Hirst and so many others confuse
is the loss of the capital invested in the War
Loan which has been consumed by the expenses
of the War, and the cost subsequently to the
country of the interest payable. This cost, so
long as the loan was raised at home, is not real
but fictitious. The country would be no poorer
if 6 per cent were paid instead of 5 per cent.
If, however, the loan be raised abroad clearly

68 THE OTHER WAR

the supplies of capital will be diminished by
the extent of the taxation, for the money so
raised would be exported to pay a foreign
creditor. So far as Germany has raised her
loans at home to a greater extent than this
country and France have, she will, doubtless,
from this point of view be in a more advan-
tageous position. It should be remembered in
this connection that the export of foreign stock
is almost identical with borrowing abroad.

Nothing is of greater importance than that
after the War the true facts about this payment
of interest should be understood, that the
country should learn to look with equanimity
upon its budget, and that employers should
refrain from claiming exemption from their
duties or protection for their deficiencies on the
plea of the excessive weight of taxation. The
wastage of past savings, the worn out plant and
the depleted labour supply are what may indeed
be regarded with sorrow, and these can only
be made good by harder work and less loss from
trade disputes. A. L.

CHAPTER IV.

THE TWO NATIONS.

" ' Well, society may be in its infancy,' said Egremont,
slightly smiling, * but, say what you like, our Queen reigns
over the greatest nation that ever existed.'

" * Which nation ? ' asked the younger stranger, ' for she
reigns over two/ .

' The stranger paused : Egremont was silent, but looked
inquiringly.

" ' Yes,' resumed the younger stranger, after a moment's
interval. ' Two nations ; between whom there is no
intercourse and no sympathy ; who are as ignorant of each
other's habits, thoughts and feelings, as if they were dwellers
in different zones, or inhabitants of different planets ; who
are formed by a different breeding, are fed by a different
food, are ordered by different manners, and are not governed
by the same laws.'

4 You speak of ," said Egremont, hesitatingly.

" ' THE RICH AND THE POOR.' "— ' Sybil,' by Lord
Beaconsfield, 1845, chap. v.

DISRAELI, in a notable phrase some
seventy years ago, said that in England
there were two nations — the rich and
the poor. What was true in 1845 remains
true to-day ; indeed, the centrifugal forces of
modern industrialism have whirled men still
further apart. With the growth of our huge
towns there has been a remarkable segre-
gation of the different classes. It is not only
London which has its fashionable quarter, its
highly respectable suburbs, and its miles of
mean streets ; though it is in London, on account
of the largeness of scale, that the phenomenon
is most obvious. As well as the little patches of

70 THE OTHER WAR

squalor which are found under the very shadow
of the mansions, in addition to the long stretches
of mean streets both north and south, there is
in London that enormous compact area, roughly
five miles long by three miles broad, which is
vaguely called " the East End," and from which
practically all the well-to-do have fled.

Of recent years the cheapness and quickness
of transit have permitted a further sifting of the
population. The skilled mechanic, the small
clerk, those whom one might conveniently call
the " two pound a week men," have been moving
away from the districts in which the worse paid
workers and the casual labourers live. So that
we have not only the big contrast of West End
and East End, but we have also such smaller
local contrasts as that of East Ham and West
Ham, both in Greater London, the former a dis-
trict of petty respectability, the latter very largely
a slum area.

It is not sufficient, therefore, to say that there
are two nations. In a sense there are half a
dozen nations. The bank clerk or insurance
clerk is not rich, usually the reverse, but he is
almost as far from the artisan in his sympathies
as the big employer is from both of them. The
small shopkeeper is often an employer, but he is
also a member of the working classes. There are
occupations in which it is considered bad form
for a mechanic to be on friendly terms with his
labourer. So that while it is broadly true that
there is one great gulf, there are also innumerable
cracks and crevasses which threaten the structure
of society. If, then, we speak of the rich and the
poor, of employers and employed, of the opposi-
tion of class to class, it is a simplification which

THE TWO NATIONS JI

is necessary for the sake of conciseness, and there
are many reservations and qualifications which
could be made.

Our large scale industrial enterprises associate
numbers of men, who are not, as in former days,
bound together by many ties besides that of
common occupation. Outside the hours of work
they may see little or nothing of one another.
Employer and employed hurry home to different
localities. They are not likely to meet casually.
Their society is almost entirely that of their own
class. They do not worship together. They
read different newspapers. There is no inter-
change of ideas. It is the exception for a
workman to rise to be a member of the employing
class or for a member of the employing class to
sink to the status of a workman. There is no
intermarriage. Years of separation have accen-
tuated little differences and have produced types
with different habits, different manners, and a
different outlook on life.

They only meet for purposes of business ; and
business, unfortunately, is not ideal ground for
the cultivation of cordial and generous relation-
ships. Where the industry is conducted on a
very large scale they will not meet at all. A
man may work for a firm for thirty years and
barely know the directors by sight, whilst for
them it is quite impossible to know the individual
members of the staff. Even where there is
theoretically access to the heads of firms for the
statement of grievances it is in practice dangerous
to use the right because of the displeasure of
those in an intermediate position. Discontent
may be simmering in the shop or warehouse of
which the board-room knows nothing, and it may

72 THE OTHER WAR

be caused by grievances which they would readily
remedy if they were aware of them. Employers
and employed are virtually unknown to one
another unless some acute conflict brings them
into contact. When that is so they grope in the
dark for one another's motives without any real
understanding. Still more ignorant of the
workers are those who are, in theory at least, the
ultimate employers, that is to say, the great
body of shareholders. The figures in the balance
sheet do not tell them anything about the
condition of the company's employees. A
scarcely noticeable fluctuation in the expenses
of administration may cover changes which mean
a passion of resentment on the part of some or
most of those who work for them. It is this
anonymity which makes industrial relationships
so exasperating ; persons quite unknown to one
another affect one another's lives profoundly.
The standard of life in some suburban home is
threatened because a body of industrial workers
comes out on strike for some obscure reason,
usually mis-stated in the newspapers. The
family of some working-man goes short of things
it needs that dividends may be kept up. The
bitterness against the invisible enemy is all the
more acute because mutual explanation is im-
possible, and even the relief of personal hostility
is denied. Each party creates bogies of the
other in order to satisfy the imagination ; one
party conceives the " capitalist," ruthless, blood-
less, insatiable, as he appears in the cartoons of
the Labour newspapers ; the other party talks
about the " British working man," who is lazy,
thriftless, intemperate, impervious to reason, and
a breaker of all engagements.

THE TWO NATIONS 73

But even when employers and employed, or
at least their representatives, are able to see and
speak to one another, they do not really " meet."
They talk to one another and they answer one
another, but they do not think in the same plane.
The background of their minds is very different.
Only too often they make no real effort to
appreciate the standpoint of the others ; and
not infrequently they interpret, quite uncon-
sciously, words and phrases in very different
senses. To give an example, there have been
disputes in a good many trades about the
recognition of the unions by the employers. In
one unskilled occupation, at least, many of the
men understood the term " recognition " in a
different sense from the employers. The latter
understood by " recognition " a willingness to
negotiate with the accredited representatives of
the unions ; whilst the men, a part of the rank
and file, at least, seemed to think that " recog-
nition " meant that trade-unionists only were to
be employed. Doubtless the men were wrong
in their interpretation, but it was a great pity
that bitterness should be accentuated because
trouble had not been taken to ensure that both
sides understood the terms they used.*

* The following story will give a notion of how easily
words may be misunderstood when they are used in a
technical sense. A man who had been engaged in fitting up
troop-ships at the beginning of the war came to consult a
lawyer about a dispute with his employer. The lawyer
was staggered to hear his client state that he had worked
104 hours in a week. The explanation was that he was paid
double rates for night work, and therefore if he worked a
nine-hour night he reckoned that he had " done " eighteen
hours. In this case the necessity for careful statement
compelled an explanation, but it is easy to see how his
expression might have led to misunderstanding.

74 THE OTHER WAR

In their dealings with the working classes the
employing classes often use documents and
forms of words which irritate because they are
only half understood. A shipping firm issued
a circular some time ago to those who worked
for it, suggesting a guaranteed weekly wage
instead of daily engagements and payments. A
docker showed it to one of the writers and pointed
out a phrase about " payments pro rata."
' What does pro rata mean ? " he asked sus-
piciously. It was explained to him that it mean
" in proportion." " Then why couldn't they
say so ? "

The same feeling of irritation is commonly
felt whenever working people have to do with
public bodies and with officials. The wives and
dependants of sailors and soldiers at the beginning
of this War found themselves dealing with State
departments, with such impersonal powers as
the Regimental Pay Office, the War Office, the
Pensions Committee, and receiving formal com-
munications couched in official language. Unless
some friendly person or body of persons be
interposed the result of such dealings is usually
bewilderment tinged with resentment. And
where, as in some cases, inquisitive methods are
adopted by unwise voluntary workers, there is a
mutual feeling of bitterness.

Very generally the working classes suffer
because they do not know how to express them-
selves. A working man often feels a fool because
he cannot state a case properly. He is argued
down by people who are more clever, or at least
more practised, than himself. The workers'
position in labour disputes is often very inade-
quately put before the public. For this, it must

THE TWO NATIONS 75

be admitted, the workers are in a large degree to
blame, because their suspicions will not let them
avail themselves to any considerable extent of
the assistance of men who are not of their own
class. " Unfortunately for his interests the
workman has an inveterate belief in what he calls
a ' practical man/ that is, one who is actually
working at the trade concerned. "* The trade
unions, and the workers generally, would be wise
if they sought the co-operation of professional
men, such as barristers and journalists, in order
to secure that their case was skilfully and
adequately presented to the public.

There is much confusion on both sides as to
earnings and profits. The general public is not
well informed on the subject of remuneration, and
it is not to be wondered at in view of the com-
plexity and diversity of method. Men may be
paid, for instance, by the hour, by the day, by the
week, or by the month ; they may be working
at time rates or at piece rates ; there are overtime
payments, bonuses, gratuities, commission, sliding
scale payments, board allowances, and a score
of other practices, which differ from trade to
trade, to be taken into account. Middle-class
people guess wildly at working-class earnings.
A particularly common mistake is for salaried
men, such as civil servants or insurance clerks,
to gauge wages by occasional high earnings.
They hear of a man taking four or five pounds
in a week, and they do not realize that there are
many other weeks when he may take little or
nothing, and when he may be incurring out-of-
pocket expenses in the search for work. The
disabilities of the irregular worker in this respect

* Webb, ' Industrial Democracy/ p. 181.

76 THE OTHER WAR

are heavier than most middle - class people
suppose. Not many men irregularly employed
keep a record of their earnings, and where men
work for more than one firm it is hard to obtain
complete information, but it is probable that the
average earnings of those irregularly employed
are usually over-estimated by the men them-
selves, as well as by the general public. And
where, as in many occupations, men or women
have to hang about for hours on the chance of
being employed, the hourly rate is only nominal.
A man may be paid tenpence an hour, but if he
has to hang about two or three hours for every
two or three hours he works, his real hourly rate
is only fivepence. That is why Mr. Beveridge
calls casual labour an insidious form of sweating.
It ought also to be recognized that occasional
large earnings do not compensate for times when
little or nothing comes in. Three pounds one
week and nothing the next week is not an
equivalent of thirty shillings a week.

The working classes on their side can only
guess at the incomes and budgets of the well-to-
do. They have glimpses of their way of life.
They see wills in the newspapers (the wills for the
most part, be it noted, of the very successful).
The main contrast of West End and East End,
squalor and magnificence, is obvious ; and it is
indeed an overwhelming indictment of modern
society to which there is no possible reply.
But they have no exact figures. The working
classes are without certain information as to the
finance of the businesses in which they are
employed. Men may often be heard discussing
how much profit their employers make, and
attempting to estimate it by the crudest and

THE TWO NATIONS . 77

most misleading methods. They do not see the
balance sheet of the company, if it be a company,
and if they did they would not understand it.
For that matter, a good many balance sheets
are not meant to be understood. Therefore,
there is much guessing, and, as might be imagined,
all sorts of important factors are left out of
account. It is not only in the relation of
employed and employer, but also in such relations
as tenant and landlord, purchaser and shop-
keeper, that the lack of certain knowledge breeds
suspicion. Mr. W. T. Layton pleads for the
enforcement by the State of greater publicity
in business and the stricter regulation of the
finance of public companies,* and it is a plea
which deserves the most careful consideration.
The secrecy in which modern competitive in-
dustry is carried on is as irritating and mis-
chievous in industrial relations as the secrecy
of diplomacy is in international relations. Mr.
Layton quotes from an American writer, Mr.
Graham Brooks, an illustration of the manner
in* which conflicts arise between employers and
employed which would not have arisen but for
this secrecy : —

" In the height of the Knights of Labour ascendancy
[writes Mr. Graham Brooks], f I stepped off the train in a
New England textile town to inquire about a strike then
raging. It was on the slippery slopes of defeat. It was
from a trade-unionist I heard at once : * We have put our
foot in it. We thought the employers were making a 30 per
cent, profit and we acted on that, and now we have got
perfectly good evidence that they are not making 7 per cent,
and we've got to get out of it as best we can/ There have
been quite uncounted thousands of such strikes."

There is the perpetual difficulty of the inability

* ' Capital and Labour,' by W. T. Layton, M.A., p. 236,
t Ibid.

78 THE OTHER WAR

of those who do different kinds of work to realize
the drain upon the energies which the other kind
of work involves. Few who have not had the
experience can realize how deadening a week of
severe physical toil is, and to what an extent it
incapacitates a man for hard thinking. Nor do
they realize the coarsening effect of dirty work,
or the soul-destroying tendency of petty drudgery.
On the other hand, the mass of workers do not
comprehend either the necessity or the strain of
organization and supervision. The fallacy still
persists that those who are not directly producing
are merely shirkers, a burden to be borne by the
workers. Members of the different classes have
glimpses of one another's way of life, and glimpses
can be very misleading. The chance visitor to
Lower Thames Street or to Wapping High
Street, or to a score of similar localities, sees
able-bodied men lounging up against railings or
propping up the walls of public-houses for hours
at a stretch. Apparently they are making no
effort to obtain work, and the visitor from another
world is likely to jump to the conclusion that they
do not want work. As a matter of fact these men
must hang about for hours on the chance of their
being required ; that is the method by which
they obtain employment, a very unsatisfactory
method it is true, but not one for which they are
responsible or which they can alter at will.
Men who have been working night-shifts often
loaf about the streets during part of the next
day. Mr. Stephen Reynolds in * Seems So '
tells how the longshore fishermen are misjudged
by middle-class visitors, and how they resent
it : —
" It is a great grievance amongst them that they are

THE TWO NATIONS 79

thought to earn money easily, because, occasionally, they
make a good haul in a short time, and because they spend
many hours of the day, between whiles, with their hands in
their pockets, looking out to sea. If you want to insult such
a man, tell him he must have been making a small fortune.
The best-meaning people do it."*

Mr. Reynolds gives a conversation between
some fishermen and a visitor from town ; the
passage is too long to quote ; but we cordially
commend it, and the whole book, to those who
want to get an understanding of working-class
thought and feeling. Or the manual worker
may obtain a glimpse of a business man sitting
in a comfortable chair in a comfortable office,
and making notes in a leisurely way on a piece
of paper. He does not realize that this may be
" work," and perhaps work of a very strenuous
kind, and fertile in results. He does not know
the signs of mental activity, any more than the
other man would know the signs and consequences
of physical exhaustion.

One of the common complaints of employers
about their workpeople is that they do not show
sufficient interest in their work. The task is
performed mechanically, listlessly, and perfunc-
torily, under the pressure of constant super-
vision ; and the alertness, adaptability, and
vigilance which would make such a difference in
cost and result are not to be found. The workers
do not put their best into the work. It is the
complaint of the shopwalker about Mr. Polly
in Mr. Wells's novel. " As smart a chap as you
could have/' said the chief shopwalker, " but
no zest. No Zest ! No Vim ! What's the
matter with you ? " And, indeed, the indifference

* ' Seems So,' by Reynolds and Woolley, Chapter 17.

80 THE OTHER WAR

of the hireling has been proverbial these two
thousand years.

Very few employers can realize what a strong
sense of duty it requires, and what an effort of will,
for a man to perform with faithfulness prescribed,
petty, monotonous duties week after week, year
after year, for a wage. The employer is naturally
interested in the business. He sees it as a whole ;
he knows the purpose of every process, the reason
for every arrangement. It is his adventure ;
his income and his reputation will rise or fall
with its success or failure. It may be that it is
his own creation, in which case he will love it
as all men love the children of their brains and
wills.

But the employee has no such strong interest,
especially where operations are elaborately
specialized and wages standardized. The di-
vision of labour has increased the product
enormously, but it has done much to rob the
labourer of the joy of craft. He has no longer
the satisfaction of seeing the purpose and the
product of his work ; he is one of many co-
operating to an end, but neither end nor method
are sufficiently explained to him. He does not
see the business as a whole. He does not share
in the adventure. (It is doubtful if he would
wish to share in it.) He is not over-concerned
about its success or failure. It does not matter
much to him whether the profits are a thousand
pounds or a million pounds. Provided the
business carries on, he will get his wages, and
wages are not appreciably higher where fortunes
are being made.

On the whole, it is remarkable how much
interest and pride men will take in their work,

THE TWO NATIONS 8 1

if only the smallest opportunity be given them.
Wise employers will encourage initiative and the
expression of personality even at some hazard.
Curiosity as to the part of an industry outside a
man's immediate purview is not encouraged
sufficiently when it exists, nor stimulated suffici-
ently when it is faint. Too many employers are
content to employ " hands " rather than men
and women with individualities and idiosyn-
crasies. We are just discovering that our educa-
tional methods have been too repressive in the
past. Surely, the same thing is true of our
industrial management. In some businesses the
details, not only of the methods of work, but of
the behaviour of grown men and women are
regulated to such an extent that life becomes
irksome.

Autocratic methods in commerce and demo-
cratic methods in government cannot co-exist
indefinitely. A man cannot be a slave for ten
hours a day and a free and responsible citizen of
a great commonwealth in his spare time. The
two things are incompatible : they demand and
they foster different temperaments and different
qualities. The time must come, and is probably
coming soon, when we shall have either more
industrial freedom or less political freedom.

Many employers complain bitterly of the
waste which goes on through sheer indifference
on the part of their employees. Machinery is
damaged by careless handling. Lights are left
burning and taps are left running. Material is
used freely and recklessly.

A manufacturer and maker up of canvas goods
was speaking of his experiences recently to one of
the writers. He gave as an example of the waste

82 THE OTHER WAR

which exasperates an employer, the manner in
which eyelets, twine, and other materials were
strewn about the floors of his factory and
trampled on. He spoke to the workpeople several
times about it, and pointed out that owing to the
War some of the materials were exceptionally
dear and scarce. He was listened to in silence,
but there was no diminution in the waste. At
last he decided to make the workpeople pay for
material used, giving them a correspondingly
higher piece-work rate. The amount of twine
swept up fell from 50 or 60 Ibs. a week to less than
i Ib. in a very short time, a material consideration
at a time when twine was costing 35. per Ib.
The number of needles broken through care-
less use dropped from over 300 per week to
under 30.

Very annoying in many factories and ware-
houses, and notoriously in the transport trades,
is the pilfering which goes on. All sorts of
articles are taken, sometimes of trifling value,
sometimes worth a great deal. If it were a
matter of starving men stealing for the sake of
their families few would venture to condemn
them. And doubtless such cases do occur.
But it is abundantly clear that many of the men
who pilfer are earning good money. Many
petty larcenies seem to be due to the prevalence
of a low moral standard. Quite respectable men,
who would not themselves steal, take a light view
of pilfering. They seem to think that because
the men have grievances they are justified in
such conduct. " We are robbed all the time,
therefore we are justified in robbing " ; or, " The
employers exploit us, and so why shouldn't we
get a bit of our own back ? " ; or, " It isn't poor

THE TWO NATIONS 83

people who will lose by it," are common trains
of thought and argument.*

Such a frame of mind is to be deplored. It
is true that the men have very heavy grievances.
It is further true, in the view of the writer, that
so long as labour is bought and sold, as it is at
present, like any other commodity, it will
seldom obtain its fair price ; those who live by
selling their labour have not as much knowledge
of the market as those who buy, nor can they
afford to hold out for a reserve price. There is
rough truth in the saying that labour is " robbed
all the time."

One cannot, however, believe that men are
therefore justified in helping themselves to the
goods they make or handle. The doctrine is
anarchic. It is certainly an un-Christian render-
ing of evil for evil. To put it on lower grounds,
it is against the best interests of the men them-
selves ; it saps their character.

The same criticism applies to the doctrine
which one sometimes hears of " a bad day's
work for a bad day's pay." The effect of doing
bad work for any length of time is to make
slovenly men who are incapable of strong,
concerted action ; and it is for this reason
mainly that " ca'canny " is looked upon with
disfavour by the responsible leaders of strong
trade unions. The question of restriction of
output is more complicated. It is commonly
asserted by employers, and either denied or
justified by the workers. There are several
good and sound reasons why workpeople should

* " The working classes are honest — every one of them ;
they don't rob as much as they are robbed/' said a woman
vehemently to one of the writers a little while ago.

84 THE OTHER WAR

not put out what employers call their " best "
efforts. There is the everlasting fear that the
exceptionally fast worker will be used as a bell-
wether and that the pace will be set by him to
the detriment of the slower workers. There is
the continual suspicion that any increase of
output would be followed by a lowering of the
piece-rate.* And there is the instinctive know-
ledge, which our scientific investigations are now
confirming, of the futility of overstrain. The
value of the rest-pause is now being insisted
upon by all those interested in maintaining
output. There is more and more evidence to
show that just as eating beyond a certain amount
does not add to the nourishment of the body
but the reverse, so working beyond a certain
rate and time does not increase output, but
diminishes it.f

And the worker has also to think of the time
when the shadow of age will begin to rest on
him. He cannot afford to exhaust his powers
prematurely. Old age pensions commence at
seventy, trade union and friendly society
pensions may start ten years earlier, but at the
very best there are likely to be hard years after
a man's earning capacity has begun to diminish.
The workman knows that if he subjects himself

* Cf. ' The Elements of Industrial Management,' by
J. Russell Smith (Lippincott, 1916), p. 197 : " Working men
are not fools, cut the rate on them once and you have made
them * soldierers ' for life."

f See ' Fatigue and Efficiency,' by Josephine Goldmark ;
* The Question of Fatigue from an Industrial Standpoint '
(report to the British Association, 1915); and the Memoranda
of the Health of Munition Workers Committee on ' Industrial
Fatigue,' * Sunday Labour/ ' Hours of Work,' and ' Em-
ployment of Women,'

THE TWO NATIONS 85

to over-strain in his younger days he is trenching
upon his capital of strength. For his own sake
and for his family's sake he ought not to
do it.

Drink is another cause of friction between the
classes. Employers complain of the loss and
inconvenience due to it ; and to it they, and
the middle classes generally, attribute a very
large part of the misery which they see. It is
difficult, indeed impossible, to say how far
excessive drinking is due to defects of character
and how far to pressure of circumstances ; the
employing classes put the emphasis on the former,
whilst the working classes put it on the latter.
Certainly the middle classes are inclined to be
Pharisaic in this matter of drink. ' They
drink ! " That is held to account for so many
things, for poverty, squalor, inefficiency, unem-
ployment, destitution. Many working men and
women join in the condemnation of drinking
habits, but their attitude is usually not quite the
same. The difference can be noticed in a train
or tram where there is a drunken man : the
middle-class man shrinks away from the offender
and glowers at him, whilst the working man looks
on him as one who needs to be humoured and
looked after, and seems to understand that
something has happened here which might easily
happen to any one.

The drink problem is much more complicated
than most people think. It is not yet common
knowledge outside the medical profession that
in a very considerable number of cases drunken-
ness is sheer disease. Nor are the temptations
realized by those who are not exposed to
them.

86 THE OTHER WAR

Middle-class people cannot imagine what it is
like to live in small over-crowded rooms ; to have
no place in which to meet for recreation or for
the conduct of business except the public-house ;*
to be exposed at all hours to the weather ; to
work at hot, dusty, or noisome occupations ;
to tramp from place to place in search of work.
They do not make sufficient allowance for the
effects of insufficient or unsuitable food. (The
working classes are vilely catered for in many
districts.) Certainly the middle classes do not
realize what strength of character it requires for
a working-man to be a teetotaller and to cut
himself off from the public-house, which is not
only a traditional social centre, but in many
cases a kind of informal labour bureau. The
teetotal working-man stands to miss jobs, and he
can ill afford to do that.

To say this is not to condone drinking. It is
much to be desired that the working classes
should shake themselves free from a degrading
slavery. But it is to state more clearly the
immense difficulties against which men have to
struggle. The employer who says that his men
do not come in on Monday morning because they
are a low lot and like to get drunk, is deficient in
sympathy and incomplete in his analysis. Cold
condemnation of this sort does a great deal to
hinder the progress of temperance amongst
working people. They are tired of having
teetotalism rammed down their throats by
people who do not understand their lives, and

* Friendly societies and trade-union branches often find
it difficult to get suitable accommodation except at a public-
house. Church rooms and school-rooms, when obtainable,
are usually neither so cheap nor so comfortable.

THE TWO NATIONS 87

who are held by them responsible for the hardships
of those lives. Moreover, most liquor legislation
is felt to be class legislation and is resented as
such.

There is therefore a vicious circle. The
working classes will not give a fair hearing to the
temperance case because they hold it to be a
fad of their oppressors, and they regard its
advocacy as an adding of insult to injury.
The employers, on their side, are prejudiced
against the workers because of their drinking
habits, and they do not therefore give a proper
consideration to their condition and to the crying
need for betterment.

The difficulties connected with trade-unionism
are too many and too complicated to be discussed
in any detail in this chapter ; there is only room
for a few words on the general relations between
employers and trade unions. The range of
attitudes is remarkably wide. There are still
employers, and whole industries, whose rule it is
(sometimes tacit, sometimes explicit) that em-
ployees shall not belong to a trade union. More
often indifference is expressed as to membership
or non-membership, but employers refuse to
recognize the trade union, i.e., they will not
negotiate with its officials. At the other end of
the scale we get such industries as the textile
industry, where employers and employed are
alike elaborately organized, and it is taken as a
matter of course that there shall be frequent and
detailed negotiations between the representatives
of both parties.

The right to combine is generally conceded
now by public opinion, and those employers who
oppose it are fighting rearguard actions. The

88 THE OTHER WAR

resistance which they offer is often stubborn and
ruthless, but none the less it is a lost battle.
The whole trend of modern social development is
against them. The maximum of friction occurs
in partly organized trades, where the trade-union
leaders are able to stir discontent but are not
strong enough to secure the observance of
agreements by the men. There are similar
difficulties when there is a federation of em-
ployers which does not include all their number.
There was a very illuminating case in connexion
with the London transport dispute of 1912. A
master carman was paying less than the rate of
wages agreed upon between the employers'
association and the trade union. When pressure
was brought to bear upon him he simply resigned
membership of the association, which could
exercise no further authority over him. The
men were naturally furious at this evasion of an
agreement.

Employers fail to understand trade-unionism
because they do not know the feelings out of
which it has arisen and from which it derives its
strength. They do not realize how weak the
individual worker is, and how surely economic
forces and the higgling of the market would
compel him, if he stood alone, to accept an
unduly low wage and unsatisfactory conditions
of life. They do not realize, in short, that a
bargain " between man and man " is grossly
unfair when one of the men has smaller financial
reserves, less knowledge of trade conditions, is
unaccustomed to negotiate, and is socially an
inferior. The last point is important because it
means that he must not speak his mind quite
freely. It is this disability which is constantly

THE TWO NATIONS 89

compelling the working-man to be, or to appear
churlish or evasive. The employers complain
of the inelasticity of trade-union regulations,
and of the men's insistence on them in special
circumstances when a temporary departure from
them would seem justified. But individual men,
or small groups of men, are bound to be stiff in
their adherence to rules, and to act according to
the letter of them : to do otherwise would be
to admit their power to deviate from them at
discretion, and they would then be exposed to
the resentment (perhaps subconscious) of the
employer, if the discretion were not exercised
in his favour. A strictly impersonal attitude is
their only safeguard.

Trade-unionism is a kind of militarism which
cuts across the grain of our industrial life, and
unless one remembers constantly its motives and
purposes many things which working-men say
and do will appear unaccountable. That a firm
should provide a pension fund for its employees
would seem to most middle-class men an earnest
of goodwill and an arrangement which should
meet with a cordial welcome. The trade-
unionist is not enthusiastic. Men who are
looking forward to a pension will be less ready to
come out on strike, if a strike be deemed neces-
sary. The employer has a hold of them ; they
are " tame " men. The same objection applies
to profit-sharing schemes ; they break up the
solidarity of men in the same trade. These are
sound reasons from a trade-unionist point of view ;
but one can quite understand and sympathize
with the disappointment of the employer, who
is not aware of them, at the coldness with
which his well-meant proposals are received.

QO THE OTHER WAR

Trade-union regulations are often felt to be
oppressive by employers because they are dic-
tated by an outside body, and nobody likes to
have somebody else's will imposed upon him.
Moreover, he does not understand the purpose
of some of them. The employer should realize
that his employees feel just the same about many
of the rules which he makes for the conduct of
his factory or works. They may be excellent
rules, but the employees have not been consulted
in their making and they are expected to accept
them without demur.

Perhaps the most acute question of all is that
of the relations between unionists and non-
unionists, and of employers to both. The demand
made by trade-unionists, whenever they are
strong enough, that non-unionists shall not be
employed, raises one of the most difficult of
contemporary ethical problems. The difficulty
of it is not usually realized by the parties con-
cerned. To the trade-unionist it seems quite
obvious that every worker ought to join the
union. He knows what a struggle it is to maintain
the standard of living ; he feels so strongly that
it is unjust that men should share in the benefits
without sharing in the obligations ; and it is
always in his thoughts that the presence of even
a few non-unionists can be a grave source of
weakness. The employers, for their part, do
not see why a man should be forced to join a
society if he does not want to ; they certainly do
not see why they should be instruments in the
compulsion. Moreover, they say, and quite
correctly, that some of the trade unions which
put pressure on non-unionists represent actually
only a small proportion of those engaged in the

THE TWO NATIONS 9!

industry ; a few active and forceful men coerce
a large number of their fellows who are apathetic,
if not at heart opposed to their policy.* Many
employers are honestly indignant at what they
consider to be an abominable tyranny. A large
section of middle-class opinion, with very little
knowledge of the issues involved, pronounces
hasty judgment in the same sense.

In this, and in all other matters in dispute, we
would plead for a patient examination of the
facts, for accurate and courteous statement, and
for an attempt to understand the opposite point
of view. To do so is not to seek, as some
suppose, a vicious industrial peace which would
simply mean acquiescence in the status quo, or
at best, the stereotyping of conditions, which,
while they might be an improvement on those
obtaining now, would still be far from satis-
factory. There has got to be a thorough over-
hauling of society, and it will involve drastic
alterations in industrial relationships. We must
look for a series of readjustments amounting to a
transformation. The process is likely, it is true,
to be both difficult and dangerous, the more so
in that many of the necessary changes are so
long overdue. But if to go ahead is dangerous, to
stand still is sure destruction. It rests with us
whether the changes shall be made with the
minimum or with the maximum of friction.
Those who are contemptuous of talk about
reconciliation, because they perceive so clearly
how long and how troublesome a road we have
to travel, would do well to consider that the
distortions due to ill will and ignorance, the

* They know, moreover, something of the methods by
which refractory individuals are " coaxed."

Q2 THE OTHER WAR

suspicion which accompanies half-knowledge,
the acrimony with which controversy is carried
on, the contempt so often manifested for oppo-
nents,* and the policy of pin-pricks, do, in point

* It is difficult to see what useful purpose can be served
by adopting such a tone as that of the following extract,
which is taken from the editorial notes of a prominent
shipping journal :

" The makers of a new hell on earth, who are to meet in
Birmingham in September as a Trade-Union Congress, have
a fairly ambitious programme. . . .

" It will be proposed that membership of a trade union
shall be obligatory on all workers ; that there shall be a
compulsory 48-hour week in every occupation, and a com-
pulsory minimum wage of i/. 105. per week for all adult
workers ....

" Why should we subsidize laziness and inefficiency by
making wages of less than il. los. per week illegal ?. . . .

" In referring to a deputation which had waited on Mr.
Runciman to point out how to tackle the question of freightage
and food prices Mr. O'Grady said : —

" ' I think that the Government made the mistake, that
all Governments have made, of not taking into their con-
fidence men of experience inside the trade-union movement.
It has always been the business men they have appealed
to — the men of academic mind. It has always been the
type of civil servant, the Toynbee Hall trained men, and
never the practical-minded workman, who, through his
fitness, has been given positions by his co-workers, who has
been consulted '

" There is no doubt a good deal in what Mr. O'Grady
says. The academic lawyer, whether professional or
amateur, has not shown proof of being burdened with too
much business instinct. Any departmental committee
dealing with shipping problems would undoubtedly be
strengthened in every sense by the presence of Bill Blowhard,
the boiler buster, Jerry Greaser, the Hon. Secretary of the
Firemen's Union, or Samuel Slushtubs, of the Sea-going
Cooks' Society, especially in matters where the Imperial
coasting trade or the taxation of imported foodstuffs were
concerned. Indeed, what can anybody but self-appointed
trade-union leaders know of business ? " (F airplay, June 13,
1916).

THE TWO NATIONS 93

of fact, serve to prolong the present conditions.
They confuse issues, they divert men's attention
from their real objective, they squander strength
in a petty guerilla warfare which accomplishes
nothing. If accusations and counter- accusations
were clearly made and answered, if the strongest
demands were courteously presented and the
most emphatic refusals as courteously made, if
there were less sulkiness and less spitefulness,
it might, indeed, be found that the different
interests were irreconcilable, and there still
might be industrial conflicts, but at least men
would know where they stood and what the
struggle was about, and there would be a better
chance of a clear decision being arrived at . But it
is extremely probable that in many cases, if claims
and grievances could be disentangled from irrele-
vances, they would be allowed or disallowed by
the common judgment of both parties, or at least
by the clear sense of the general community.

The loss to the community due to the bitterness
of relations between employers and employed
must be enormous. The general public thinks
mainly of the actual cessation of work in time
of strike, but that is really the least part of it.
It is the continuous loss through friction which
is so serious. After all, whether they like it or
not, employers and employed are co-operators
in industry, and, whatever may be the future
form of society, they will have to co-operate for
a long time to come. They have their common
interests as well as their conflicting interests.
A better understanding between them would
almost certainly mean a greatly increased product,
out of which many demands could be met without
loss to either party.

94 THE OTHER WAR

The great need of the age is for a bolder
generosity on the part of men in dealing with
their fellow men. Generous thought and generous
action will be amply repaid, even in the narrowest
economic sense. The economy of high wages,
of short hours, and of good conditions generally,
is being recognized by the wisest employers. A
generous dealing with the claim to better status
will equally be found to be a sound course. The
workers, on their side, it is to be hoped, will show
a largeness of spirit and a sense of responsibility
and of proportion which they have sometimes
sadly lacked.

In the creation of a new temper lies the best
hope of the future, and in this temper alone can
the necessary transition be made without catas-
trophe. In concluding the chapter we would
ask our readers to ponder the grave warning
of an American sociologist : —

" Unless plasticity of mind and a sense of social obligation
can be installed into our socially fortunate classes, and
broadminded and constructive views shall dominate the
leaders of our masses, Western civilization is indeed brewing
for the world something worse than a French Revolution."*

H.E.M.

* ' The Social Problem/ by F. A. Ellwood (Macmillan &
Co., 1916).

CHAPTER V.

INDUSTRIAL RECON-
STRUCTION.

IN any discussion of industry after the War
two things are necessary : one is to forecast as
well as we can what industrial conditions are
going to be after the War ; the other is to see
whether there can be built out of the wreckage
of the old order, and the new material of the
war regime, a worthier industrial order for the
future.

It is impossible to do more than guess at
what the industrial situation will be after the
War. Much depends on how long the War lasts
and what happens between now and then. The
present strikes are a symptom of deep-seated
resentment and discontent that has for long
months been growing in the ranks of labour.
It has been aggravated and driven inward to
fester more deeply by the policy of suppression.
Unless the present troubles are wisely and
generously handled discontent will become tur-
bulence. The very materials out of which
industry will have to be reconstructed are thus
contingent.

But there are some concrete features of the
forthcoming situation which can be forecast,
and which will play their part. As for the rest,
everything will depend upon the mood in which
the War leaves us and the ideals that inspire us
in the work of Reconstruction. It is of these
ideals that I wish mainly to speak.

95

96 THE OTHER WAR

It is important that attention should be given
to the industrial problem now, while yet there
is time, for the return from war to peace con-
ditions will present grave dangers, and equally
great opportunities. It would be a tragedy if
the conclusion of international peace were to
bring industrial war in its train ; it would be
calamity if we were to allow the Reconstruction
period to pass without making the utmost of
the possibilities it holds.

At the end of the War industry will be in the
melting-pot. The good founder does not wait
till the metal is ready before preparing his
moulds ; he prepares them in advance. If the
molten elements of industry are to be recast
into good and true forms the moulds must be
prepared now.

Let us not think that we can leave the in-
dustrial problem, as we were wont formerly to
do, to settle itself. In the days gone by reform
was stifled by a comfortable belief in the per-
manence of the established order. Stagnation
was at any rate safe ; change meant risk ; and
we were not in the mood for risks. But the
War has broken bonds of custom. No one will
henceforth rest content with things as they
are because " they cannot be altered." Change
is in the air. The established order is already
disestablished. The future cannot be left to
shape itself, that way chaos lies. We must
consciously direct the process of change towards
the establishment of a new and worthier in-
dustrial order.

The War has created as well as destroyed ;
freed as well as bound. It has brought a
quickened sense of corporate consciousness. Many

INDUSTRIAL RECONSTRUCTION 97

who were accustomed to live to themselves alone
are now aware of social sympathies and obliga-
tions. There are monstrous exceptions, but they
are out of the picture. We think less in terms
of ourselves and more in terms of our fellows.
Let this new spirit flow undiminished from the
waging of war into the re-creating of industry
and assuredly the industrial life of the nation
will be made worthy the price paid on its behalf.

Just now we see a strange phenomenon. Some
5,000,000 men have been taken out of civil life,
many of them out of productive industry.
.£6,000,000 a day are being spent on the War.
Yet the country as a whole, and in particular
certain large sections of it, seem more prosperous
than ever before. It is an economic miracle.
Let us inquire how the miracle has been wrought
and what lessons it has to teach.

The widespread abundance of the present,
despite the withdrawal of men and the con-
sumption of goods for purposes of war, is due
in part to strenuous exertion that cannot be
continued indefinitely ; in part to the absence
of unemployment ; in part to the adoption of
improved methods ; in part to the suspension
of expenditure on the upkeep of what I may
call the national plant, and on new capital under-
takings ; in part to borrowing and recalling
wealth from abroad ; and in part to the curtailed
private expenditure of persons of ample means.
To some extent it is the abundance of the spend-
thrift which leads to bankruptcy ; but to a far
greater extent it is the result of using latent
economic powers, and to a still greater extent
it is due to what virtually amounts to a re-
distribution of the national income.

H

98 THE OTHER WAR

One of the most portentous lessons of the
War, I think, has been the demonstration of
how much wealth there was available or latent
in this nation for any object which could com-
mand the united support of the mass of the
people. That lesson will not be forgotten,
believe me, by those whose pleas for improve-
ments requiring expenditure (education, housing,,
low wages, &c.) have been hitherto met with
a blank non-possumus — " the country cannot
afford it."

Let me try to sketch briefly the industrial
situation that appears likely to prevail after
the War. The demobilization of several millions
of men and the re- arrangement of the employ-
ment of several million munition and substitution
workers (men and women) will throw a vast
number of workers upon what is called " the
labour market " ; yet I do not think there will
be great unemployment in the years immediatetly
following the War. Civil demands are accu-
mulating which will take the place of war de-
mands. The task will be rather the distribution
than the provision of employment, the bringing
together of the worker and the work.

Much more serious, in prospect, is the situation
in regard to wages — and particularly in regard
to the wages of the unorganized badly paid
sections of labour. Unless a special effort is
made, the total national output (and conse-
quently the national income) will be smaller
than before the War. Out of the total national
dividend a large slice of wealth will be required
for repairs and reconstruction, which wilt not
at once bear consumable fruit. Though labour
will be in demand, the demand for capital will

INDUSTRIAL RECONSTRU'CTIO^ >v., . 99

be still greater and a diminished' stock of capital
will tend to take, in the shape of higher interest,
even more than its pre-war share of the national
dividend.

Further the payment of the annual charges
on the National Debt (which promises to be
at least £5,000,000,000 before demobilization is
complete) will tend to divert £300,000,000 or
£400,000,000 per annum from the non-investing
to the investing classes. Those who enjoy then
;< unearned " incomes will therefore gain. Those
who draw no incomes at all from investments —
the wage-earning classes — will lose. The scales
would appear to be heavily loaded in favour of
capital and against labour.

We have further to face the fact that the
discontent due to economic conditions will be
aggravated by certain features in the general
temper and spirit of the nation.

An effort so stupendous as that made during
the War is almost invariably followed by a
reaction. All history teaches us that unless
this energy and self-sacrifice awakened by the
great conflict receives a fresh impetus not less
potent than that of the War, the removal of the
stimulus will be succeeded by a dull and bicker-
ing mood. Such moods incline to a breaking
up rather than a building up. Industrial war-
fare will have attractions that are not easily
visualized now, the more so in that the War has
habituated men to the idea of force as a means
of attaining ends and imposing wills.

That must suffice for a lightning sketch of the
material factors of the after-war situation. Now
what are the measures to be taken to ward off
the evils that threaten and to develop the

TOO THE OTHER WAR

possibilities that offer.'* It would be very helpful
if everyone, before expressing an opinion on
subjects of this kind, were compelled to answer
one preliminary question : " What sort of a
world do you want ? " Were I compelled at
pistol-point to answer that question, I should
try to explain, among other things, that in the
world of my dreams quality of life would count
for more than rate of production, the perfecting
of the faculties would be sought rather than
possessions, adventure would have precedence of
security, the capacity to endure trials would be
esteemed higher than the power to command
comfort, and the generosity of courage would
prevail.

That said, I may still contend that the most
pressing necessity in the years immediately
following the War will be that everyone who
can be engaged in the production of utilities
(the word excludes fripperies and servilities)
without detriment to those ends that are more
important than production (this rules out the
employment of children, mothers, &c.) should
be so engaged, and that every worker, while at
work, should give the largest measure of the
best service.

The War has shown how high must have been
the unrecorded rate of unemployment in the
pre-war age, how many of those who were
€mployed must have been producing futilities
rather than utilities, and to what an extent the
average producer must have kept his productive
powers under strict control. These almost suf-
fice to explain " the economic miracle of the
War " — that we can abstract four or five million
men from civil life, spend six or seven million

INDUSTRIAL RECONSTRUCTION IOI

pounds a day on war-making, and :yet &ave less
destitution than has ever been known. Trie War
has revealed great latent productive power. If
we make the most of that revelation after the War
there need be no shortage of the means of life.

Only by producing utilities unreservedly and
consuming them sparingly shall we be able to
provide, after the War, the means of decent
subsistence for all, and a sufficient margin for
the repair and extension of the means of pro-
duction and distribution.

To this consideration I would add one other.
In levying the enormously heavy taxation that
will be necessary for a generation after the War
every care should be taken that the contribu-
tions demanded are apportioned according to
the ability to pay.

One thing more. Any neglect or evasion of
the nation's responsibilities toward those who
have given themselves to her service in her hour
of need would inevitably create a rankling sense
of bitterness and injustice that would go far
to frustrate all hopes of social re-creation. The
nation's honour in that respect is the personal
honour of each individual citizen. We must
not only be firm that every obligation to the
men with the colours is met with the generosity
of real gratitude, but also that the pledges given
to labour in regard to the restoration of rules,
customs, and safeguards ; or, if they cannot
be restored in the letter, equivalents must be
given ; also care must be taken that the women
who have gone into unfamiliar and emergency
employments at their country's call are not
left to fend for themselves when the immediate
need for their services is past.

IO2 ' •' ; THE OTHER WAR

Thus 'far I* have dealt only with the bread-
and-butter side of "industry and with the emer-
gency aspect of the reconstruction task. But
industry is much more a social than an economic
question, and the task before us is not so much
one of warding off dangers that threaten as
of laying the foundations of a permanent in-
dustrial structure.

The industrial problem goes deep into the
springs of human action, and there finds its
close counterpart in the War now raging between
the nations. The War is being raged against
the spirit of coercion, domination and exploita-
tion. What has been overthrown in war will
not be tolerated under another guise in peace.
We shall not endure the ascendancy of the
spirit of coercion, domination and exploitation in
industry. The industrial order towards which
we must work is one in which that evil spirit is
exorcised and replaced by the spirit of co-
operation, equality, freedom and mutual aid.

The unrestricted production to which I have
referred, the giving by each of the largest measure
of the best service, will only come, I believe, as
a consequence of this more wholesome spirit.
Indeed, if it were secured otherwise I should
be on the side of ca' canny.

If you examine carefully the views and sug-
gestions for industrial Reconstruction that are
now being put forward from so many quarters
you will become aware of two distinct schools
of industrial thought and practice. I would
like to call one the " technical " view, and the
other the " humanist " view of industrial develop-
ment.

INDUSTRIAL RECONSTRUCTION 103

The distinction between them is no mere
matter of a preference for this or that means
of attaining a common end. It arises out of
fundamentally different views as to the position
of industry in human life and the adoption of
different scales of value with regard to life itself.
It is imperative, I think, that those who seek
to guide industrial evolution along right lines
should make up their minds to which school
they belong.

The technical view of industry has production
as its supreme goal. It measures progress by
acceleration of output. Its watchword is
" efficiency." Its method is the specialization
of functions, the standardizing of designs, the
perfecting of routine. Its industrial order is
composed of an oligarchy of employers, a bureau-
cracy of experts and a proletariat of operators.
Its faith is in mind rather than in spirit, in
machine and process rather than in man. It
measures life by things. The crown of its
achievement is high wages and high profits.

In the humanist view, the social aspect of
industry looms even larger than the productive.
It sees the industrial problem rather as one of
men's relations with men than of their relations
with things ; it regards industry as a phase of
the art of living together. It looks on production
as a means to an end, not as an end in itself.
Its object is the exercise and development of
faculties as much as the satisfaction of wants.
Its method is the cultivation of intelligence,
conscious co-operation, and the extension of
facilities for self-expression. It believes in the
delegation of responsibility rather than the
imposition of authority. It places spirit at

104 THE OTHER WAR

least on an equality with mind. It takes more
count of the man than of the machine, and its
criterion is fullness of life rather than number of
possessions.

While the technical and the humanist views
of industry are as opposite as the poles, the
industrial order that proceeds from the one is
hardly to be distinguished in many respects from
that born of the other. The technical ideal does
not in practice exclude a consideration of the
human element, nor the humanist ideal a full
utilization of the technical. Yet there is an
irreconcilable difference in the two positions.
The difference is the conception as to which is
the means and which is the end. It is the old
contention as to whether the State exists for the
citizens or the citizens for the State.

I fervently hope that in bringing our in-
fluence to bear on the course of industrial develop-
ment we shall lay emphasis on the human aspect
of the industrial problem. You may say with
Kipling's engineer : —

' What I ha' seen, since ocean steam began
Leaves me no doubt o' the machine — but what about the
man ? "

The industrial problem is at root one of human
nature and human spirit ; but the ill-will that
has poisoned industrial relations in the past
springs in large part from a failure of under-
standing. It has been assumed too readily that
the interests of employers and employed are
essentially antagonistic. It has been believed
that industry was a game of beggar-my-neigh-
bour, a game in which one side could only gain
at the expense of the other.

The belief is as false as it is pernicious. There

INDUSTRIAL RECONSTRUCTION 105

are divergent interests between employers and
employed, but they are enormously outweighed
by the interests that are common to both.
Employers and employed have a mutual interest
in making industry prosperous and wholesome,
a mutual interest in each giving in to the common
stock the largest measure of the best service.
The law of industry is not conflict but co-
operation. Where there is conflict the prize of
victory vanishes in the struggle and both sides
lose ; where there is co-operation the prize
increases as the labour proceeds and both sides
gain.

Before the War the employer set great store
by being " master in his own house." He was the
autocrat, his workpeople were his subjects. He
might give high wages, lower hours, better
conditions ; but one thing he would not give —
a share in control. Industry was an autocracy
tempered by ca' canny and strikes.

That is changing, and must still further change
if industry is to take its place as a stable and
harmonious element in our civilization. Em-
ployers are finding that they can be no longer
" masters in their own house " ; they must
become rather partners with labour in their joint
business. High wages and better conditions
will not alone satisfy the aspirations of labour.
They will not, and they ought not. Man's
labour is not a material commodity to be sold
to the highest bidder, and there an end. It is a
part of his life, and the conditions under which
he puts it forth must in some real measure be
subject to his direction and control.

With rights will necessarily go duties and
responsibilities. Labour has hitherto adopted a

106 THE OTHER WAR

defensive policy. It has for the most part
resisted or obstructed industrial improvement.
I hope that in the future that policy will be
changed ; and that Labour will take the initiative.
Labour has hitherto been concerned only for
labour as against capital ; henceforth I hope it
will be concerned for industry as an organic
whole. When Labour on its own initiative aims
at producing in advance of anyone else its own
suggestions for industrial improvement, discovers
for itself possible time-saving methods and
devices, and threatens to strike if they are not
introduced, takes it upon itself to reprimand
managers who are incompetent, insist on wasteful
competition between kindred firms ceasing, makes
technical education a personal matter, insists
on doing good work, whatever any one may say —
then Labour will come into its own and a new
industrial order will be on its way.

The ideal structure of industry which we
should strive to build is one in which the large
industrial concerns are so many industrial com-
monwealths administered by joint councils of
employers and employed, in which every staple
trade has its national industrial council or parlia-
ment composed of representatives of all the
functions of industry, and in which the State
(having its being in, and its authority from, a
general electorate) presides over the whole.

This does not necessarily mean any cut-and-
dried scheme of profit-sharing or co-partnership.
What it does mean essentially is that the manage-
ment and the working staff shall realize their
community of interest and shall consult regu-
larly together, not for the negative purpose of
settling disputes, but for the positive purpose of

INDUSTRIAL RECONSTRUCTION 107

promoting the improvement of the industry
and the well-being of all engaged in it.

With the coming of the large joint-stock
companies, industry has lost its personal touch.
The employer who knew his men personally,
knew their thoughts and feelings and lives, has
gone and is going. The bonds of human per-
sonal sympathy have decayed, and in their
place has come the dehumanizing cash nexus.
I do not see how this change can be reversed
in the years immediately before us except by
the introduction of a real working partnership
between the management and the men.

" The first article of partnership is equality
of knowledge." Secrecy is the father of much
evil. Let employers and employed be more
open, take each other more into confidence, and
a host of difficulties will disappear.

Industrial hostility is much akin to inter-
national hostility in that it proceeds largely
from fear. Both sides have added to their
weapons and defences because each was afraid
of the other. I trust that in the days to come
the parties to industry will no longer be ranged
in mutually suspicious and hostile camps, but
that both will lower their defences and come out
courageously on to the open ground.

Courage has not lacked in the War : let us not
fail in courage in the waging of peace. We
want industrialists who will take their courage
in both hands and make big experiments.

Looking back upon industry as it was before
the War, we see it revealed a " sorry scheme
of things entire. " Shall we not shatter it to
bits — and then " remould it nearer to the heart's
desire"? J. H.

PRINT*

J. E. FRANCIS, ATHENJ-;UM PRESS,
BREAM'S BUILDINGS, CHANCERT LANE, E.C

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