“BLUNDERING INTO SOCIALISM”

Dominion, Volume 14, Issue 164, 7 April 1921, Page 6

“BLUNDERING INTO SOCIALISM”

PROFESSOR MURPHY’S VIEW

LECTURE ON ARBITRATION ACT

SHOULD THE SYSTEM BE SCRAPPED?

Prefacing his lecture with the announce- ' ment that he did not wish to dogmatise, but merely submit his views for consideration, Professor B. E. Murphy, of Victoria College, last night delivered to the Accountants* Students* Society an address that trenchantly criticised the system of compulsory arbitration in force in New Zealand.

The theory of compulsory arbitration as it existed in this country to-day was, according* to the lecturer, that compulsory harmony could be obtained in industry. If the lion did not lie down with the lamb, the court was going to make it do eo. It had been said tha£ the Act prevented strikes. It did not. For the first few years of its operation, there had been no Strikes in New Zealand. Conditions were then such, however, that even had there been no Act there would still have been no strikes. Up to the end- of 1915, 148 strikes occurred. Of these, 53 were in defiance of the Act, and the balance were outside it. If the number of strikes that had occurred in the last six years were added the totad would be something like 200. The fact was that the only part of the world which had gone In for compulsory arbitration —Australasia —was the home of the strike and the lock-out. Here and in Australia there was nothing but a dreary succession of industrial stoppages. This was largely due to the atmophere of legalism that surrounded the Act. The atmosphere was not the same as when the parties got round the table and tried honestly to find some way of agreeing. Did the Act Raise Wages? 1 A second contention tglvanced in favour of the Arbitration Act was that it had raised wages. It had not. It might be replied that in the nineties, when the Act was in full swing, wages were > raised. So they had been, but because the conditions were such as to allow of a rise in wages being brought about by peaceful conciliation and trade unionism if no such statute had been in operation. In 1896 the world fall in prices had come to on end. It was not until about 19015 that the hard fact was rammed into the heads of the workers that a rise in nominal wages was not necessarily a rise in real wage. > In many cases wage had risen in sympathy with the general rise in prices. They had also risen m part on account of the scarcity of labour. It was possible that the Arbitration Act had given elasticity to the process of raising wages, as it were, and had caused the rise to come a little earlier than it 'would otherwise have come, but all of that could have been done by legitimate trade union action and voluntary conciliation. The truth of the assertion that the Act had raised wages would be tested if this country had anthing like a sharp and prolonged industrial depression. If for the first time in New Zealand’s history, ine he remembered it, there was the spectacle of “two men running after one boss'* they would see what happened to the awards. . Excellently Administered. i, Whenever there had been a strike it bad been settled without the smallest reference to the Court. This led hitn to make an explanation in passing. He felt that the administration of the system had been most excellent. The Arbitration Court from its inception had been, administered by a number of able men of great integrity, and if the Act had not brought about the millennium it wae not their, fault. No part of New Zealand’s national life had been administered more competently or more honestly than the Arbitration Act. Nobody could say that the Act was never given a. fair chance. All through one found that the rise of wages in the nineties was largely the result of the vicious oipole, combined with the tariff. “Revolutionary and Utopian.” The system, then, had not raised wages and had not prevented strikes. An authority had said of it that it "took the ginger out of the unions,’* because it never paid a group of men to hav;e anyone else do for them what they could do for themselves. The English unions had grown great by fighting their own battles. In New Zealand, beaten on the field of industrial battle, Labour had sought to win back on the field of politics what it had failed to gain in the industrial arena. Thus Labour in New Zealand had become idealistic, revolutionary, and Utopian, when what was wanted was plain, flat common sense. Thus the unions had grown up devoid of function, and the trade union leaders were not leading Labour. Thus Labour had fallen into the Kinds of people who were quite honest, and quite sincere, but were idealistic revolutionaries, and were leading it to perdition. The reason that Labour in .Australasia 'had become revolutionary and Utopian .woe that fihe leaders had not been trained in the hard business school of collective bargaining. Had the supporters of the present compulsory arbitration system ever considered whether it was compatible with the principles of Wliitleyism? Could the objects of Wliitleyism bo attained through a judgment given after a hearing of ex parte statements from both sides in the Court of Arbitration ? The Court could touch only the outworks of the subject. Any attempt to have industrial praaco, to create a better atmosphere by giving the workers greater control—and that seemed to him to be the line of future development—could not be secured under the present system. Whether Bound? Ho had left the most serious difficulty to the last. There was a- capital difference which distinguished compulsory from voluntary arbitration. Under a voluntary system it was quite clear that tho workers, being the attacking party, would ask for more and more and more, but that sooner or later' a time would come when all the slack .in industrial arrangements had been taken up, and the employer would say “No.” Under the compulsory system, it was possible that the employer in that case might bo fined or incarcerated, so sooner or later the Court would have to do one of two things—either kill industry or'bo pushed to deciding not only what was a fair ■wAgo, but. what was a fair profit, and that involved tho questions of what-was a fair rate of interest. Pushed to its logical conclusion, that meant in the long run State regulation not only of wages but of profits, rent and interest. That meant State distribution, which in turn meant Socialism. Socialism might be a good thing, or it. might be a bad one: but the country had not thought that it was blundering along tho path to Socialism when it passed

the Arbitration Act. Ho wisher his hear-

are to noto how far the matter had gone already. The Board of Trade, with the profiteering tribunals, was virtually fixing profits. In the system of compulsory loans, whiolb was at present in abeynncs but was there for a precedent, the country had fixed rates of interest. Then finally every one knew that under the stress of war New Zealand had had rents fixed by the State. Separately and accidentally, it had come about that this country was fixing wages, and blundering into the fixing of profits, rent and Interest. Of course, things might remain for generations in a state of Vn•table equilibrium, but the soundness of iho policy was likely to be tested if a veriod of "going downhill" set in.

“An Expensive Futility.” The Act was an expensive futility applying to a decreasing number of industries. Even within these limits its influence was illusory. The statute could not bo enforced if either the bulk of the employees or the bulk'of the employers inadq up their minds that it should not be enforced. ... He suggested that until the compulsory sections were eliminated, and more and more, stress was laid on the conciliation sections, the country would never get within measurable distance of industrial peace, though he did not say that industrial peace would surely be obtained even then.. . . It would be better for the country if it cut out arbitration and substituted here what they had in Britain—State arrangements for facilitating conciliation between the immediate parties to disputes.