INDUSTRIAL POLICY

Dominion, Volume 11, Issue 286, 22 August 1918, Page 6

INDUSTRIAL POLICY

THE GARTON MEMORANDUM

e SCIENTIFIC RESEARCH t „ RELATIONS OF EMPLOYERS AND c EMPLOYED. a 111. (- Tlio encouragement of researcli in conj ncction with the application of science 2 to industry holds out possibilities hithcrl to better appreciated by our commercial rivals than by ourselves. The war has , called attention to Hie advantages which the Germans, in particular, have deriv- - 3" ed from their admirable organisation of j practical scientific training, especially in connection with tho chemical industries, j For industrial purposes research may be J classified under two headings—theoretical ,rese.vvii of a. general nature, hiving , no obvious and immediate practical np- , plication, and specific research, directed ' to the solution of definite problems of .' production. Neither kind can bo safely ] neglected. Tho experiments of pure ! scientists have often led to discoveries of high commercial value which were wholly uiilooked for by those who made them. I The encouragement of theoretical re- ! 6eareh, which may yield result* of na- ; tional utility, is a proper object for ' State action." Specific research, the rc- ' suits of which will Jio enable of inimedi- ' ato commercial application, can best lie '. carried on in close connection with the ' industries concerned. Employers' asso- . eintioTHs might subsidise research on problems connected with their industry I at technical colleges or municipal ; laboratories in the lending centres of in- , dustry, on tho understanding that tho , results obtained were communicated sole- • ly to members of tho association. Such ! subsidies might even bo extended to re- . search of a more general character, in j any field touching (he materials and pro- , cesses of the industry in question. The ' results obtained by the scientific experts could then be submitted to tho staffs'of works laboratories, who would at once iecognise the.commercial possibilities whicli they might hold, and could refer them back for specific research along the lines indicated by their practical knowledge . and experience. An increase in the efficiency of the distributive- side of industry is required. The system of co-operative collection and distribution by means of light railways and motor services, which has been so successful in Ireland, could bo usefully » applied for bringing local products to the market. . The leading bankers should study for themselves how far it may be possible for the. banks sto work in closer touch with industry, and lend their invaluable support to its future developments. Danger of Panic Economy. Caio must be taken that a reaction from the lavish spending necessitated by the war does not lead to an outbreak of panic economy in Stato expenditure. Nothing could create a worse feeling and temper than any appearanco of stinginess towards the men who have fought for us, whether in connection'with tho treatment of tho disabled or the schemes for reintroducing' the. demobilised men to civil life. Those are matters of national responsibility which cannot bo left to any private efforts involving tho stigma of charity. Nothing could bo n more false economy than to allow the work of education—technical or general— scientific research, housing, or the improvement of the national health to bo obstructed at a time when tho whole welfare of tho nation turns upon increased efficiency. Money spent for theso purposes is not expended on a luxury, }mt is a paying investment, perhaps even an insurance. Increased Saving. Capital for the repair and improvement of the national plant can only be furnished by people producing much, spending little on consumpton of goods, and saving the balance. Thoro should be an educational campaign to explain tho principles of economy. Working-class investment, whether by individuals or groups, should be made easier, safer, and more attractive. But in the immediate future the savings necessary for capital renewal will havo to coiiie mainly from restricted consumption on the part of the well-to-do. The cutting down of expenditure on luxuries not only liberates labour for tho increased production of necessaries, but renders capital available for investment in productive industries. Land. Tho thoory thatavhatcver may bo done to increaso tho output of wealth the in. creaso will automatically 'be appropriated by the land-owning class, in the shape of economic rent, is demonstrably unsound. The question of lnnd ownership and economic rent is tthe less prassing at this , juncture, in that there are unmistakablo I signs of tho break-up of many of the large estates after tho war, owing to tho inability of their proprietors to keep them going on tho old lines.

Agriculture, Britieli agriculture must no developed. The multiplication of existing local produce societies for tho co-operativo buying of seeds, manures, appliances, feeding stuffs, etc., and the co-operative marketing of the produco in bulk would do much to ensure the success of the small holder. Tho education of village children should be brought into relation with their future work. The observation and environment teaching of "the primary schools should flbo directed to awakening interest in, and understanding of, tho life around them, and tho eye, and hand training to the perfecting of those facu.lties which will bo most useful in agricultural work. At a late.- stage direct vocational training may be jjijoii, either at special schools or in daytime classes.for junior workers. In this way it should bo possible to make of tho agricultural labourer a skilled worker, and to invest his work and life with a greater degree of dignity and interest, which will go far to counteract the drift towards tho urban centres. The facilities for farmers and foremen to acquire a knowledge of scientific fairming, stock rearing, and gardening should also bo largely increased and greater encouragement given to research and experiment in coiuection with cultivation.

The Fundamental Problem, At the back both of the emergency and the constructive problems ,'ies ihe basic problem, 'the hostility between Labour, Management, and Capital. Unless we can deal successfully with this, no amount of skill in handling the secondary problems will help us. The material well-being of a nation demands, first tho attainment of the possible maximum both as regards size and quality of output, whether of goods or services j secondly, tho elimination of all waste'of material or effort in the process of production; thirdly, an equitable division of tho proceeds of industry, enabling all those concerned in the creation of wealth to obtain a reasonable share ot its material lxmenis. The social wolf/ire of the nation requires that the conditions of work and the relations between the parties to industry shall be such as make for intelligent and self-respecting citizenship on the part of all concerned, ;.nd that the activities which occupy so large a proportion of men's time and powers shall Ibe felt by them to be a fit and worthy employment of their energies. Any attempt to solve industrial problems which is concerned solely with tho distribution of earnings must necessarily be ifts<loquale. In the first plaeo, the amount available for distribution depends upon tho amount produced, and an attempt by any section of the community to increase its own share of the proceeds by a scheme of "edistribution which ignores the necessity of increased creative effort is apt to result in a shrinkage of the available total. In the second place, the- questions which centre round wages and profits, important as they are. are not so vilal a* the questions of industrial relations and social conditions with which they are connected. The supply of capital must be adequate, and the national plant kept up to date. Confidence must be maintained and savings increased. The accumulation of surplus wealth which wo call capilal represents the balance of production over consumption in previous years, and is constantly being added to or diminished in accordance ;\'ith tho ratio of goods produced to goodg oon-J

sumed. When that accuniulation has been depleted, the deficiency can be made good only by an inerea.se in tlio annual balance. It will bo necessary to encourage economy in tlio consumption of goods anil the investment of the resulting savings in productive industries. Wo must work bard and eliieiently in order to produce more. We must spend less on luxuries in order that wo may savo more. We must increase confidence in the national industries in order that savings may be attracted into tlio right channels.

Restrictions. All restrictions placed upon production beyond thoso basod upon 'tho social needs of the workors must be removed. On tho one hand we havo on tho part of the employers restrictions, for the sake of keeping up prices, with monopoly produces, ami sometimes a tendency to throw obstacles in tho way of increased output, due to the exceptional efficiency of employees and to cut piece rates. But much of the limitation of output on tho part of tho employers arises from inefficiency in management. On the other hand, Labour is apt to limit the output partly from the legitimate desire to restrict the hours of work from of social welfare, but also from the mistaken belief that tho less each man does the moro there will be to go round. "Work" is regarded as' an exhaustible fund, or at the best as a diminishuble-ilow, and it is assumed to be in the interests of his class that each man should "uso ud" as little as possible. The fallacy lies in the conception of an inelastic "'wages fund." Wages come out-'of the stream of products, and oilier factors remaining constant, the distribution of wages cannot be widened except by c.n increaso of the stream. . , > A further cause of limitation of output lies in tho natural differences of individual capacity. Tlio workers believe that if each man were allowed to produce to his full power, the minimum standard demanded by the employer would e based on the performances of thequickest and most skilful, and a "speeding-up" process would be introduced, involving cither excessive strain or lessened earnings on the part of the majority. From this point of view, restriction of output is a sacrifice made by the. ablest workers in tho interests of their fellows. While such restrictions necessarily result in limiting the total output, it; is obvious that Labour cannot fairly be asked Jo remove then; unless somo definite assurance can be given against the' evils anticipated. The question is one which will require very serious attention both from employers and employed, when we como to face tho task of industrial reconstruction.

The workmen hnve everything to gain by the standard of workmanship in tlieir particular trade being raised. A general appreciation _of this fact, resulting in greater attention by Labour organisations to questions of craft training and quality'of output would do much both to raise the position of Labour itself and to strengthen the hands of those employers who are striving for a high level of production. Tho limitation of production, whether by Labour restric-tic-jis on output or the cutting' of piece rates by employers, spring from the belief that the interests of employers and employed are inevitably and fundamentally hostile. Interests of Employers and Employed Concurrent, But as regards production, tho interests of the employors and employed are concurrent because it is to the benefit of ench that tho total available- for distribution shall be as large as possible. Both are concerned in' increased efficiency of production, which implies equal or improved output at less cost to the employer and with less strain to the employed. Here, 100, tho -workman as consumer will benefit by any increaso in the general efficiency of production. .Even as regards distribution, the rela-1 tions of employers and employed are not wholly opposed, becauso it is-to the interest of the employer that his workpeople's standard of life shall be sufficiently high to promote efficiency and afford reasonable incentive to effort; it is to the interest of the workman that tho firm shall bo sufficiently prosperous to provide steady employment. It is to. the interest of all employers engaged in the supply of common commodities .tint wanes as a whole should be good, in order that the purchasing power of their cus-' tomors may be high. It is to the interest of the workers, who are consumers, that firms producing articles of general uso should bo sufficienlly prosperous to keep plant up to dato, and to produce well and cheaply. Status. The grent obstacle fo 1 co-operation is tho question/ of status. Tho fundamental grievance of Labour is that while all three are necessary parties to production, the actual conditions of industry have given to Capital and Management control not only over the mechanism,of production, but also over Labour itself. They feel that tho concentra-

tion of Capital in a comparatively few hands has rendered fair bargaining bo'tween the parlies impossible. •In the last resort the only effective weapon of the trade union is the strike, and tho loss inflicted by a strike or lock-out mi the capitalist class is not comparable with the acute personal suffering of the workmen and their families. Thev feel, therefore, that in any dispute tho dice arc weighted ngiiinst them. Labour is aleo faced 'with • disadvantages in ventilating its grievances. Tho tribunals are composed, the Press is owned and run, by men of another class The attitude of employers, too, is to look on employees as cogwheels in the industrial machine having a market value, but no recognised value as human

beings, or as very good fellows if properly disciplined, but not to be consulted in matters vitally affecting their interests.

' Employers' Complaints,

On the other hand the omplbyers complain of deliberate limitation of output, slackness and inefficiency in work, short time, and malingering, the lack of any feeling of responsibility. They point out that many Labour leaders discourage any senso.of loyalty to tho firm. Even a fair employer can feel no confidence that his workmen jvill back him'up in a pinch. Any effort to improve the condition of the employees is regarded as a concession extorted from weakness, and is followed by further demands which boar no relation to the condition of trade. Every period of prosperity ■produces a demand for higher wages; but no amount .of depression is considered as an excuse for reverting to a lower scale. Tho trades union wage regulations place obstacles in tho ttvy of differentiation between the efficient and industrious workman and those who are less skilled or less hardworking. At tho same time they render it impossible to continue in employment, without actual loss, men whoso capacity for production lias lieen decreased by ago or accident. Tho gravest complaint, however, relates to the insecurity of bargaining. The employer's power to negotiate directly with his employees is restricted by the union, yet bargains thus made with the men's accredited representatives nre continually broken by those whom they profess to bind, and the union itself cannot enforce the agreement which it has made.