INDUSTRIAL INSURANCE.

Dominion, Volume 4, Issue 11111, 8 May 1911, Page 4

INDUSTRIAL INSURANCE.

The big scheme of industrial insurance that the British Government has devised will be studied with close attention by all those who arc interested in the problems of labour and industrial organisation. Tho leading particulars of the proposals relating to sickness and invalidity insurance have been public property for some months, and for this part of the schemo there will be a very general approval. It amounts, in effect, to making universal the Tiabits of thrift and prudence that have built up the great Friendly Societies. The sickness and invalidity allowance that a person under the scheme will receive will be provided out of the'accumulation of a small weekly payment by himself, his employer, and the National Exchequer. These payments are to hi, respectively, fourpence, threepence, and twopence a week. The State's contribution is of course paid by the nation as a whole, and the nation a3 a whole, in one way or another, will pay tho employers' portion, which is as it should be. There may bo faults in the scheme—one grievous blot is the endowment of illegitimate maternity mentioned in one of to-day's cable messages—but it 'is not surprising that all parties at Home are united upon a principle that makes direct for the encouragement of thrift. Of course there is a vast difference between that thrift which voluntarily puts its pennies into an insurance fund, and that other involuntary thrift which is to be forced upon the people under the new scheme. Nor is it quite a sufficient disposal of this point to say that it is after all the result that matters and not the way in which that result is obtained. It would be far bettor if everybody insured himself voluntarily; but, after all, if a man will not be thrifty of his own accord, nothing is lost, but much can be gained, by preventing his hccdlessncss from throwing him upon charity when he is ill. No such approval can be given to the proposed insurance against unemployment. The cable message is not as clear as it might be upon this part of the scheme, but enough h made clear to show that the Government's proposals are neither safe nor economically sound. We note, by the way, that Sir Joseph-Ward has approved of the scheme in such a way as to lead Me. Lloyd-George to think that the Piujie Minister was speaking for the Dominion. It need hardly be said that opinion here will be sharply divided, and, consequently, that the Prime Minister has acted in a foolish and presumptuous manner. The system of joint contributions by the employer, the employee and the Stats is to be applied, in respect of unemployment assurance, to the engineering and building trades alone. The idea of unemployment insurance is a bold one, but it rests, we cannot help feeling, upon a_ subfi< fallacy. Unemployment is an inevitable feature of industry, and no amount of "insurance" can remove it. A scheme that secured an allowance to a man when he is out of work is the same as a scheme under which a man is kept merely hanging about the "shop at a reduced wage. The scheme does not deal with anything but the symptoms. It leaves entirely untouched the causes of unemployment. And thus, so far as the country as an economic community is concerned, the net gain of a system of unemployment will be nil, or even less than nothing. There will be no new wealth created, there will be no more "to go round" than before. What the scheme amounts to, in the ultimate result, is a' roundabout system of poor relief, a disguised assertion of the principle of "the right to work." But this is not all. As was found in Europe, so it will 1)3 found in Britain, that a new profession or trade arises out of such schemes, namely, the trade of worlclessness. The compulsion upon tin employer will have its own special results, of which one will bo tho further straining of relations between masters and men, and another the ending of that system under which men have been kept on during slack times by employers unwilling to turn them adrift. One very dangerous feature of the Government's scheme is the payment of a Stato subvention to unions insuring their member: against ma-

employment. In a preface to Mr. Cyril Jackson's recent book on Unemployment and Trade Unions, iu which it is strongly urged th.ifc the Government should adopt this plan, Lord Milker dealt in a most unsatisfactory way with this point. He admitted that some of the latest developments of trade unionism, especially in the sphere of politics, were little calculated to convince the public that the unions possess the steadiness and impartiality that would justify their being trusted, in any measure, as- agents of the State. But he pleaded that "the fact that the activity of the unions is often diverted to the pursuit of sectarian and partisan ends is no reason for not assisting them in the discharge of functions which arc of national value." This is to take no count of' the fact that everything that artificially adds to the strength and status of the unions is an addition, at the present time, to the unions' powers for evil and oppression. Mr. Lloyd-George will have great difficulty in persuading the nation to concur in the payment of State subsidies to what have become Socialist organisations. We have reserved to the last what strikes us as the cardinal objection to the unemployment insurance scheme. As wo have seen, it deals only with symptoms: it will not lessen unemployment in any way. It leaves untouched the causes of unemployment. But it will do more than that: it will turn attention away from the true economic policy, which is the more scientific organisation and distribution of work, based upon _ sound methods of industrial training.