Nationalisation is a mere alteration in the design of the coping stone production is the keystone of the whole edifice.

The leaders both of industry and of labour are well aware of the crucial need for increased production, but unfortunately their efforts to bring this need home to the rank and file have been lamentably unsuccessful. Their attitude is largely dominated by the inveterate suspicion-too often justified by the event that increased production means increased profits but reduced wages. No crusade for increased output will make any converts till some method of correlating pay and production more closely can be established. Its introduction is made

peculiarly difficult at the present moment by the continued separation from wages in many industries of the so-called 'war 'bonus,' which makes a large part of the earnings of the ordinary workman dependent on the cost of living. The separation is apparently intended to enable this element of wages to be reduced in the future, and from that point of view it naturally provokes resentment and unsettlement in the minds of the workers. It is highly problematical whether any such reduction will ever be effected-apart from a change in the industrial situation—and it seems therefore a questionable policy on the part of employers to impede industrial reconstruction by standing out for it.

The first practical measure towards the resettlement of industry is the consolidation of these war wages. Their continuance or adjustment (upwards or downwards) could then be made dependent not on the caprice of any statistical sliding scale operated by some unknown deity in the Board of Trade, but on the capacity of the producer in each trade to compete with his commercial rivals in the world markets. If the Government and the employer frankly took this line-accompanying it with measures for a minimum wage and provision for unemployment on the one hand, and for scientific taxation of excessive profits on the other hand-a great deal of the present suspicion would disappear and the path would be clear for the revitalisation of industry. The employer could materially assist by giving the fullest consideration to the development of Whitley Councils which, up to the present, have proved a sickly and artificial growth, but which may yet take root if they are honestly accepted as a step in copartnership, and if they are organised

by the industry concerned without interference from outside. The Government can best co-operate by ceasing to compete in industry and by restoring self-government to each trade, assisting them all, in its proper function, by the rehabilitation of the public finances. Wages will then, gradually, adjust themselves to economic circumstances much as they did before the war, except that the prosperity of the employer will be recognised as linked up with the prosperity of his employees; and Government intervention can be restricted to preventing the exploitation of the public either by one or the other, or by both in collusion.

If this alternative is adopted, arbitration will still have a place in a retired niche of the industrial edifice. Where employers and employed cannot adjust their differences completely but are within sight of a settlement, an arbitrator can split the difference. During the past five years this has been the position. Wages have been advancing, and the only question was how much should be conceded. Once this process stops however arbitration will become unpopular with the working classes and thereby ineffective. The ultimate principles on which industry will be governed cannot be referred to arbitration and must be settled either by the executive Government or by direct negotiations (through Whitley Councils or otherwise) between the employer and the employed; and such negotiations, even if they lead to some troubled years, offer a more hopeful prospect for the future than any attempt to regimentalise industry.

DISCONTENT IN INDUSTRY

I. Industrial Conference. Report of the Provisional Joint Committee. Cmd. 501. 1920.

2. Declaration of Supreme Council of the League of Nations on the Economic Conditions of the World. 8th March 1920.

AT

T the Industrial Conference, convened by the Government on the 27th February 1919, to consider the then increasing unrest in industry, likely, it seemed, to come to a head in a miners' strike, there was appointed a Joint Committee of Employers and Trade Unionists to report on the causes of the unrest. The Report of that Committee has at last been published. It consists of two parts: first, the compromise recommendations of the Joint Committee; and secondly, a valuable appendix containing a memorandum on the causes of and remedies for Labour unrest from the point of view of the Trade Union representatives on the Joint Committee. It is a most interesting document, and deserves careful study by every person who desires to appreciate what is fundamentally wrong in industry.

The recent decision of the Trades Union Congress, on 11th March last, makes it imperative for every one to understand the outlook of Labour, however different from one's own. It will be remembered that the Congress decided against Trade Union action in the form of a general strike as the official means of enforcing nationalisation of the coal mines, and resolved on intensive political propaganda in anticipation of a general election. The doctrinaire theories that prevail amongst a large section of the community which does not come into personal touch with Labour and has no actual experience of its point of view, are frequently so egregiously wrong in assigning particular causes to certain symptoms of industrial unrest that the study of the Report of the provisional Joint Committee is all the more essential. My experience has driven me to the view that one of the most potent causes of unrest is ignorance, both on the part of the employer and of the workpeople, of the ordinary truths of economics. In previous articles in the EDINBURGH REVIEW, I

have made my point as to the injurious effect of economic fallacy on co-operation and also production in industry. The purpose of this article is to indicate the economic issues connected with the different causes which contribute to industrial discontent.

It is much to be regretted that the prevalent definition of economics is the 'science of wealth,' a phrase which goes far to prejudice its importance in the minds of many workers. If Professor Marshall's definition could be more universally used, that economics is the study of mankind in the ordinary business of life, it would go much further to commend the science to popular acceptance. There is a further bar to the popularity of economics: the attempt of so many economists to divide the sphere of economics sharply from that of sociology, ethics, or politics. Every one who has had experience in industry knows that although you may postulate that economics deals with the material wants of man, with his efforts to satisfy those wants and his satisfaction when they are supplied, there is hardly an instance where any person engaged in industry, be he employer or workman, is not influenced, sometimes almost uncontrollably, in his attitude to or conduct in industry by stimuluses and forces which the academic economist would certainly refuse to recognise as economic. The truth is that, with our present complex organisation of industry, and with the increasing education, mental outlook, and culture of the working classes, all sorts of forces are at play producing contentment or discontent in industry, the very existence of which was not suspected, even ten years ago, whether in economics, sociology, ethics, or politics.

There are apparently people yet who say that contentment in industry implies something approaching stagnation, that is to say, a condition of things which betokens to the superficial observer complete acquiescence in existing conditions; that conception probably accounts for the unhappy phrase 'industrial 'unrest.' But industry, to be healthy, can never present the tranquil appearance of a summer sea; there must be perpetual surface evidences of the continual efforts on the part of all sections to better their conditions in life, to advance their welfare, to secure the satisfaction of their aspirations. Nor would any person who desires to see a contented and progressive country try to curtail the workers' attempts to progress, subject

only to one dominant consideration; there must be an accepted principle of industrial evolution based on definite recognition of the respective functions which each factor in production and each person engaged in industry plays, with common agreement that industry is one of the highest forms of national service, and that the chief end must ever be the greatest possible contribution to the common welfare of the whole community. Persons who rail against the efforts of the workers to improve their lot frequently forget a further fact. In the past it has only been on its own initiative, and by reason of its own action, that Labour has, speaking generally, obtained increased wages and improved conditions of employment. These things have not, in the main, been spontaneously conceded by employers, and so in the future, there can be no public objection whatsoever to the same course of procedure being followed, provided that Labour takes a long view, fully recognises its duties to the nation, and does not attempt to advance its sectional ends by selfish disregard of the interests of the community of which it forms a part.

The Trade Union memorandum annexed to the Joint Committee's Report sets out the following as the chief causes of industrial unrest :

(1) Lack of any comprehensive industrial or economic policy on the part of the Government or employers.

(2) The increasing demand of the workers for a real share in industrial control.

(3) The high prices prevailing for commodities of common consumption.

(4) The universal opinion among the working classes of the prevalence of extensive profiteering.

(5) Unemployment and under-employment.

(6) Inadequate wages and earnings.

(7) Excessive hours of labour.

(8) Want of more and better housing accommodation.

(9) Inadequate recognition of Trade Unions.

(10) Lack of adequate machinery capable of giving constant expression to the co-ordinated demands of the whole of the workers.

(11) Delay in the settlement of industrial disputes.

While these are the detailed causes immediately responsible for industrial unrest, the memorandum contains one or two significant paragraphs which profess to reduce all the discontent to a common origin :—