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THE FOES OF OUR OWN HOUSEHOLD

CHAPTER  6

industrial justice; the tool-owner and the tool-user

We have failed lamentably to prepare for this war during the two and a half years of peace contemptuously granted us after Germany began the war. Let us refrain from aggravating our folly by now failing to prepare for the tremendous industrial problems which will come to the forefront as soon as peace arrives. One of the greatest and most pressing of these is that which is concerned with the relations between labor and capital, and the relations of both to the public. The immediate exigencies of the war have been met at Washington with confusion and absence of coherent plan. At the moment the Government has partially waked to the need, and has summoned the big business leaders of the country to its aid; and on the whole they have responded with both patriotism and efficiency. Yet the Government for many months seemed equally afraid to refuse their aid and to treat them well. It wished to pay less than a proper profit on their work for the Government; and yet was not prepared to tax with proper heaviness the excess profits when they became of huge dimensions. The Sherman Law, which for nearly a decade had caused more damage than good, because of the refusal of Congress to amend it into proper shape, has, for the time being, practically been suspended; the Government is encouraging business men in certain lines of business to get together, pool their purchases, fix prices, adopt a common sales policy; in short to do the very things forbidden by the Sherman Law. We thus see one department of the Government asking business men in certain lines to do the very thing for which the Department of Justice has the same men under anti-trust indictments. If the Sherman Law hurts our production and business efficiency in war time, it hurts it also in peace time, for the problems of boring for oil, of producing steel, manufacturing and selling agricultural implements, are no different now from what they were six months ago. Instead of having the Administration connive at breaking the law at this time, the law should be amended so as to make it unnecessary to break it at any time—along the lines of seeing that business is both encouraged and controlled. Big work can only be done by big business; and Government must courageously but intelligently control big business.

In this present crisis the right course to follow is to guarantee the business man who works for the Government a good profit; then to put a heavy progressive tax on all the excess profits above this. See that labor is paid a first-class wage; and then that it gives first-class work for the first-class wage. Exempt plain food and plain clothing, and all the necessities for a simple life and family rearing from taxation. Let incomes bear substantial progressive taxes; but not on the basis of class envy; and initiate a national policy of heavy progressive inheritance taxes.

So much for the immediate needs of the moment. Let us meet them instantly; and let us furthermore begin to secure industrial justice— the square deal—for the future. The first essential is to rid ourselves of the cant and hypocrisy of those who, usually for improper political reasons, seek to persuade people that large-scale business concerns, including the so-called trusts, owe their growth to the tariff, or to governmental corruption, and should be destroyed— not controlled in the public interests. The politicians who take this attitude work nothing but mischief.

Unlimited cutthroat competition between small and weak concerns is not now possible; and, if possible, it would be wholly undesirable. People have said that the tariff causes trusts. It does nothing of the sort. The Sugar Trust, for example, has not been harmed in the smallest degree by the removal of the tariff on sugar, although multitudes of small producers have been ruined. The Standard Oil Corporation was wholly unaffected by the tariff (and breaking it into small corporations under the Sherman Law merely resulted in the oil costing more to the consumer, in the men on the inside making enormous fortunes, and in the reduction of the efficiency of the concern in international business). The unscientific lowering of the tariff has not harmed the trusts in the smallest degree save as an incident of harming the entire business world. People have said that governmental corruption has favored trusts, that they have been built up by rebates and the like. Unquestionably some trusts have been favored improperly by certain governmental bodies; and others have been built up by improper practices. But, speaking of the business world as a whole, these are not the prime causes and are hardly even considerable factors in the growth of big corporations. They are responsible for some of the evil that has accompanied the growth; and to suppress them there must be efficient governmental control. But the simple fact is that modern big corporations are due primarily to three causes, namely, steam transportation, the electric telegraph, and the telephone. No change in the tariff will stop the upgrowth of big corporations. No moral reform in the world of business or the world of politics will stop it. But big corporations could be ended to-morrow by the abandonment of the railway, the telegraph and the telephone. The trouble is that the price would be somewhat heavy!

This is an era of combination. Big business has come to stay. It cannot be put an end to; and if it could be put an end to, it would mean the most widespread disaster to the community. The proper thing to do is to socialize it, to moralize it, to make it more an agent for social good and to do away with everything in it that tends toward social evil. To do this there must be a wise governmental control, a governmental control that will check the corporation when it is doing wrong and check the labor union when it is doing wrong, and hold each accountable and responsible for its deeds and misdeeds, but which shall at the same time recognize that the corporation has its rights just as the union has its rights, and that each is to be encouraged as long as it does well. No great industrial well-being can come unless big business prospers. China is the home of the small industrial unit, and the Chinese laborer is badly off. Persons who inveigh against capital as the source of all troubles of labor should ponder the fact that over large and densely populated areas in China, there are no capitalists and no capital; and that in these areas the laborers are steeped in the most abject poverty. We cannot hold our own with foreign competition, we cannot lead in developing South America, without successful big business concerns.

Over a century ago the "industrial revolution" began to turn the industrial world into one of big business, in which the dominant features were massed capital on a hitherto unheard-of scale, and laborers employed, also in enormous masses, by the capitalist, without personal touch or sense of responsibility on his part. The new system was inaugurated in England. France and Germany speedily followed suit. In the United States, the change from the old system of unlimited cutthroat competition among a multitude of small, weak concerns, to the new system of concentration (without either cooperation or control), got under full headway about the time of the Civil War; in economically backward countries like Russia and Spain it was yet later.

There was much that was beneficial in the change. It produced an immense increase of population and aggregate wealth; it was every where accompanied or followed by a great spread of education and community effort; and it probably, on the whole, raised the standard of attainable luxury and comfort for the workers in the industrial countries, compared to what it remained in the backward countries such as Spain and Russia.

But it was accompanied by evils so numerous and so grave that to this day one of our heaviest tasks is the struggle to do away with them. The movement substituted for the old social contrast between privileged patrician and unprivileged plebeian an even more offensive and violent industrial contrast between the man of one type of specialized capacity who possessed capital and the men of all other types of capacity who did not possess capital. Under the stimulus of the economic individualism taught by writers of the school of Adam Smith, the social and administrative nihilism taught by philosophers like Herbert Spencer, and the ultra political individualism taught by liberal political leaders like Thomas Jefferson and Richard Cobden, each man was impressed with the belief that the selfish seeking of his own interest represented substantially his whole duty to the state. The revolt against these doctrines showed itself in such teachings as those of Marx and such practises as those of the Paris Commune; and these abstract and concrete applications of the theory of ultra-collectivism naturally reacted in favor of the apostles of ultra-individualism.

Here in America we have in many ways been more backward than in most countries of middle and western Europe, because our situation was such that we could shut our eyes to unpleasant truths and yet temporarily prosper. But our system, or rather no-system, of attempting to combine political democracy with industrial autocracy, and tempering the evil of the boss and the machine politician by the evil of the doctrinaire and the demagogue, has now begun to creak and strain so as to threaten a breakdown.

Surely the time has come when we should with good nature and practical common sense set ourselves to the practical work of solving the problem. This means that we must disregard equally the apostles of ultra-collectivism and the doctrinaires of ultra-individualism. It also means that we must rebuke with equal emphasis the men who can see nothing wrong in what is done by capitalists and corporations, and the other men who can see nothing wrong in what is done by labor leaders and trades unions. Moreover, it means that we must not permit ourselves to be misled by bitterness concerning wrong-doing that is past into condoning wrong-doing of the opposite type in the present —for this is the road that leads straight down to that bottomless pit where the spirits of Robespierre and Danton find themselves in the company of the high-born tyrants whose bloody tyranny they denounced and copied.

At the outset of the industrial revolution, the capitalist, the man whose special ability lay in the "money touch," profited hugely and with gross injustice. He gained an improperly large part of the benefit that should have been shared between himself and the inventors and managers, and almost all of the part that should have been shared between himself and his wage-workers. He practically applied the theory that it was his right, and even his duty, to get from his workingmen the largest possible amount of labor per man for the smallest possible amount of pay. Naturally, such a grossly improper attitude tended to produce among the laborers in the unions a no less improper fanaticism in desiring that each man should perform as little labor as possible for as much pay as possible. In similar fashion, the extreme capitalistic tyranny which once treated trades unions as illegal and sought to make of the laborer a serf was largely responsible for the subsequent outbreaks of labor-union tyranny which in certain places and at certain times have taken the form of criminal conspiracies against society. Arrogant selfishness by a combination of capitalists, met by arrogant selfishness by a combination of workingmen, may be better than the reign of unchecked selfishness by either side alone; but it can never be satisfactory, and must always be fraught with grave danger to the whole social fabric.

It is profoundly to the disadvantage of the commonwealth that laborers shall be worked to the limit for the lowest wages at which they can be obtained. It is also profoundly to the disadvantage of the commonwealth that they shall do as little work as possible, and that the standard of labor adopted shall be that of the least efficient man. We need the highest possible standard of efficiency. But we also need the highest possible reward for that efficiency, and reasonable equity in the distribution of the reward. Unlimited and unregulated competition will not secure either end; and mere rancorous warfare against property and efficiency will do even less. What is needed is a wise and resolute effort toward cooperation of a character which shall give each worker, so far as possible, a certain interest in the capital with which he works—that is, which shall give the user of the tool some property interest in and control over the tool. Together with this should go such control by the Government as shall help in securing efficiency in the business and justice both as among those in the business and as between all of them and outsiders.

There are several conditions which must be met if the problem is to be really solved. The first is that our aim must be not to damage successful business, but to insure good conduct in business; which means greater fairness in apportioning the profits among all those engaged in the business, and propriety of behavior in the business as a whole in its relations to the public. We wish to get for the workers, among other things, permanency of employment, pensions which will permit them to face old age with a feeling of dignity and security, insurance against accidents and disease, proper working and living conditions, reasonable leisure—all these as tending toward enabling the worker to get for himself interest and joy in life, and on condition that he prove his fitness for partnership, for the enjoyment of rights, by the way in which he in his turn performs his duties and heartily and nobly recognizes his obligation to others. Now, of course, it ought to be accepted as an axiomatic truth that none of these things can be obtained from an unprosperous business; that if profits are not existent, all talk of sharing them becomes idle. Yet in practise a great mass of more or less insincere and more or less ignorant politicians and demagogues disregard this self-evident truth; and the popular feeling roused by the misdeeds of many corporations in the past and of some corporations in the present spurs them to disregard it. Many railroad corporations, for instance, a decade or two ago, were guilty of shameful practices, and there have been one or two conspicuous instances of such malpractices of recent years. It was absolutely necessary that these misdeeds should be checked and punished; this was done; and then too many legislative bodies proceeded on the assumption that by law railroads could be made to assume all kinds of burdens to their employees and the public at the same time that their rates were cut down so as to leave their margin of profit almost nil. There has been both failure to exercise sufficient control over railways in stock-watering and the like, and over-much burdening of them by vexatious legislation passed without regard to whether or not the burdens were just and necessary. In consequence, there is now real difficulty in getting investors to put into the railroads the capital necessary for fitting them to meet the growing needs of the country.

Business and labor are different sides of the same problem. It is impossible wisely to treat either without reference to the interests and duties of the other—and without reference to the fact that the interests of the general public, the commonwealth, are paramount to both. I am not asking for the adoption of an impossible ideal. Under Hiram Johnson, the Californian governmental authorities have realized with reasonable success precisely this ideal.

Another vitally important fact to keep in mind is the mischievous folly of the nominally progressive, but in reality merely Bourbon, effort to turn back the wheels of the modern movement. The loudest of the professional "antitrust" leaders of the last decade, those who have declaimed against all corporations, have sought to treat the size of big business as in itself an evil, and have diverted popular attention from the necessary work of regulating and controlling big corporations to the vain effort to smash and break up all big corporations without regard to their conduct. This has not only represented mere evil and folly; it has represented evil and folly of the genuinely reactionary type. It has represented the obstinate refusal to face the new facts and the new needs. It has represented the foolish desire to return to the very practices which produced the evils against which these men clamor. The politicians and agitators of this type have shown themselves as emphatically Bourbon and Tory as the worst of the trust magnates they have assailed; and have been as mischievous.

We must face the fact that big business has come to stay, and that it cannot be abolished in any great nation under penalty of that nation's slipping out of the front place in international industrialism. During the quarter of a century preceding the present war, England slipped back in business leadership compared to Germany, precisely because in Germany they were beginning to do business on a large scale, by huge combinations. The vital point was that the state when necessary encouraged and at the same time supervised and controlled these big combinations, securing justice and reasonably fair treatment among capitalists, managers, salaried experts and wage-workers—all of whom had some voice in, some control of, at least certain parts of their common business.

In the world of international industry the future belongs to the nation which develops either the big-scale businesses; or else the ability among small-scale business men, workingmen, and farmers, to cooperate, to work together and pool their resources for production, distribution, and the full use of scientific research; or else, what is most desirable, develops both types of business. The small individualistic business cannot compete in any field in which either of the other types flourishes. Therefore, whether we like it or not, we must either permit and encourage the development of these two types or fall behind other nations, as Spain once fell behind England and France. Our duty is not with futile obstinacy to try to stop the new movement, but to guide and control it; to encourage it, and yet to make it subservient to the common good. If we face it in this spirit we shall speedily find that it is far from representing mere evil. On the contrary, it is precisely the strong, wealthy, prosperous business concerns which can afford to treat their workingmen as in the interest of the commonwealth it is imperative that they should be treated. Only—it is necessary that the Government shall possess such control, shall exercise such supervision, over them as to insure the use of their giant and prospering strength in the common interest. It would be as unwise—even if it were possible— to exterminate big corporations as to exterminate big labor unions. But it is eminently wise for the Government to itself make the people a partner of both, to supervise the relations of each to the other and of both to the general public, and gradually to substitute the principle of cooperation for that of Devil-take-the-hind-niost.

To make the Government a partner in this manner is necessary to the wise handling of labor difficulties. The worst faults of trades unionism to-day are largely, and probably mainly, due to past and present misconduct and shortcoming by the capitalists, the corporations. Trades unionism grew up as an effort to organize the resistance of labor to capitalistic exaction; and it has acquired or inherited many of the vices against which it warred. Corporations and labor unions are alike bound to serve the commonwealth. Each must recognize in the future its public duty; and this can only come as the result of the state becoming the partner of both, a partner sincerely anxious to help both, but determined that each shall do its duty. Public opinion can do much, and no governmental movement can succeed without an intelligent and determined public opinion behind it; but the prime necessity is governmental action. This action must have for its goal the guidance of all the men in any business, from the top to the bottom, so that they may severally and jointly make the best use of their lives, and help all of us to make the best use of our common national life. Such action will end in mere nullity unless it encourages the business and helps it to prosper, and therefore welcomes the growth—the large-scale growth—which comes as the result of prosperity; for it is only the big, prosperous, nationalized business, backed by the Government and in close touch with the Government, that can take the long look ahead necessary for the really right treatment of labor; that can plan for a use of labor which will benefit both the community and the worker himself; that can bargain with the man on what is normally a life-time basis, so that he may be thoroughly trained to his job and may know that if he does his work well he has ahead of him in the end leisure, independence, security (and, by the way, this means that the gypsy or roving or unsettled type of worker, who never stays long in one job, is always, whether the fault be his own or his employer's, a detriment to business and a detriment to labor). Under such conditions there can and will come— gradually and by evolution, not revolution—a shift in control which will mean that the competent workers become partners in the enterprise. This partnership must mean not only a sharing of profit, but a sharing in the guidance and management; and therefore it can only come step by step, as the wage workers grow out of the narrow envy and jealousy which make so many men resent superior ability and strive to deny it proper reward. It is not necessary that the Van Homes and the Jim Hills of the future shall receive the enormous financial reward they have had in the past; but it must be substantial, or they will not lead to success the business in which the brakemen, switchmen, engineers, firemen will, we hope, ultimately become part owners as well as workers. Such leadership is absolutely needed by the men below, and it must be handsomely paid for—there is no more mischievous form of privilege than giving equal rewards for unequal service, and denying the great reward to the great service. But it need not be a reward fantastically out of proportion to the reward of the men beneath; the difference need not be many times greater than the differences between the rewards given such men as Lincoln, Farragut and Sheridan, and the rewards given the men in the ranks under them—• and there was not a man in the ranks, worth his salt, who felt that this difference was not more than justified by the difference between the service rendered by the three men named and the service rendered by himself.

This shift in control will help to solve the difficulties connected with "scientific management." Such management becomes intolerable unless it is exercised under conditions which give the wage worker his full share in the benefits accruing; and this is not permanently possible unless the men become more closely associated with the management, so that they may take some part in the guidance, even if only by acquiescence, after they have become thoroughly familiar with the difficulties and have become willing to share the responsibilities.

When the tool user has some ownership in and some control over the tool, the matter of opposition to labor-saving machinery will largely solve itself; for then a substantial part of the benefit will come to the workingman, instead of having it all come as profit to the capitalist, while the workingman may see his job vanish.

Let me again repeat that industrial democracy does not mean handing over the control of matters requiring expert knowledge to masses of men who lack that knowledge; and therefore it does mean that it cannot come until the men in the ranks have sufficient self-knowledge and self-control to accept and demand expert leadership as part of the necessary division of labor. If democracy, whether in industry or politics, refuses to employ experts, it will simply show that it is unfit to survive. At the outset, at least, the share of the workers in control would not be on the business side proper of the management, but over the conditions of daily work —the essentially human side of the industrial process.

Documentation—the mixture of theorizing and paper research—is within reasonable limits good; but experimentation is indispensable. It is only by experiments in the actual work of business that we shall find the exact methods by which, and the exact degree to which, we can measurably realize the ideal. For full success, the trial should be made in a business in which the workers are of a high type in skill, intelligence and character, and are fairly well accustomed to act together. The Government could well afford to experiment along these lines in some of its work. Whenever in private business there is any serious, even although only partial, attempt to try for a solution along these lines, it should receive our sympathetic attention. Let us watch them all with encouragement and open minds—profit-sharing as in the steel corporation, high wages, home building, partial cooperative discipline—no matter what the method. Let us study each attempt, trying especially to look at the results from the workers' standpoint, and ready to learn any lesson, no matter how unexpected nor how much at variance with our preconceived notions. Then, as we gather wisdom, let us go cautiously forward in making the state the guarantor that what has been gained for the worker without its aid shall not be lost because that aid continues to be withheld.

We must   become,   to   a   real degree,  our  brother's keeper, if only for the sake of our own children; for in the long run this world will not be a pleasant living place for our children unless it is also a reasonably comfortable living place for our brother's children. The great scientist, Huxley, was about as far removed from mushy sentimentalism as any man could be; he was a singularly clear-headed man, free from illusions, and with a fine fearlessness in facing truth. In his capital volume, "Method and Result," he lays bare with unsparing hand the folly alike of the ultra-individualist and of the ultra-col-lectivist. He was utterly intolerant of shams, and perhaps especially of the exuberant sham-monger who promises the arrival of the mil-lenium if mankind will adopt his specific patent for the abolition of poverty, or war, or vice, or whatever evil may at the moment be most advertised. Yet Huxley realized absolutely the need of grappling with our social and industrial dangers, if our civilization is to endure or to deserve to endure. Said he: "If there is no hope of a large improvement in the condition of the greater part of the human family; if it is true that the increase of knowledge, the winning of a greater dominion over nature, which is its consequence, and the wealth which follows upon that dominion, are to make no difference in the extent and the intensity of want, with its concomitant physical and moral degradation, among the masses of the people, I should hail the advent of some friendly comet, which would sweep the whole affair away, as a desirable consummation."

This is a stern truth.    Let us keep it steadily in mind, and govern our actions accordingly.