mn. V.HU ,■>.".!-,, i hiD) H GB (Jorncll Imoerotty ICibrary Stljaca, J^Bin ^ork BOUGHT WITH THE INCOME OF THE SAGE ENDOWMENT FUND THE GIFT OF HENRY W. SAGE 1891 DATE DUE GAYLORD PRINT ED IN U, S. - Cornell University Library HD6479 .H68 1919 National guiLdSv.if^nilir/llirill.iMlllllinillir^ 3 1924 032 451 498 olin NATIONAL GUILDS Cornell University Library The original of tliis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924032451498 NATIONAL GUILDS AN INQUIRY INTO THE WAGE SYSTEM AND THE WAY OUT BY S. G. HOBSON author of "irish home rule— the last phase" "guild principles in war and peace" "letters .TO Mv nephew" (anthony Farley) EDITED BY A. R. ORAGE EDITOR OF THE NEff AGS THIRD EDITION LONDON G. BELL AND SONS LTD. A"1^n?>:-1 PREFACE The substance of the following chapters appeared serially in The New Age during the years 1912-13. But for the origin of the idea of the Guilds as apphed to modem industry an earHer date would have to be sought. Both the present Editor of The New Age in an article in the Contemporary Review of 1906, and Mr. A. J. Perity in his work on The Restoration of the Guild System of the same year, had put forward the suggestion that the Guild organisation was indispensable to higher industry at any rate. But whereas Mr. Penty confined his pro- posals to the mere restoration of the mediceval guild, without regard to modern conditions, it was in The New, Age, during the period 1906-12, that the idea of the national guild was first brought into relation both with historical and with recent economic develop- ment. And the present work, the first ever pubhshed on the subject, is the outcome of that period. The tide of Collectivism, however, was then and for some years afterwards too powerful to admit of even the smallest counter-current. Some experience of Collectiv- ism in action and of political methods as distinct from economic methods was necessary before the mind of the Labour movement could be turned in another direc- tion. This was brought about by the impulse known as S3aidicalism which, in essence, is the demand of Labour to control its industry^, At the same time that S37ndicansm came to be discussed, a revival of trade-union activity took place, and on such a scale that it seemed to the vi PREFACE present writers that at last the trade unions were now finally determined to form a permanent element in society. In short, every speculation concerning the future of industry was henceforward bound to take into account the trade unions as well as the State. Reflecting upon this in the light of a considerable experience, both theoretical and practical, the writers were driven to the conclusions herein stated. In no respect, they believe, have they written " without their book " or in the spirit of Utopianism. The analysis of the nature of wages, here made, for the first time, the foundation of a critique of labour economics, leads inevitably to the conclusion that by no manner of means can wages gener- ally be raised while the wage system continues. There follows from that the necessity, in the minds of real reformers at any rate, to consider the means by which the wage system itself may be abolished, in the interests, in the first instance, of the proletariat, but no less, though secondarily, in the interests of society and of civiUsation. The indispensability of the State, upon which the present writers lay stress the more that the SyndicaUsts deny it, is affirmed and maintained at the same time that the right of Labour to control its production is throughout assumed. In the conception of National Industrial Guilds the writers believe that the future wiU find the solution of the problems now vexing one-twentieth of our population and ruining the remainder. CONTENTS PART I THE WAGE SYSTEM I. Emancipation and the Wage System . II. Labourism and the Wage System III. The Great Industry and the Wage System IV. State Socialism and the Wage System .V. International Economy and the Wage System VI. Unemployment and the Wage System VII. Democracy and the Wage System VIII. Politics and the Wage System IX. The Economics of the Wage System . X. The Transition from the Wage System PAGE I 7 12 19 27 34 42 60 n 99 PART II NATIONAL GUILDS I. The Moral Foundations of Existing Society ., 109 II. A Survey of the Material Factors . • 122 III. An Outline of the Guild . . .132 IV. A Working Model . ■ . .141 V. Industries Susceptible of Guild Organisation 152 VI. Independent Occupations . . .161 VII. The Trust or the Guild . . .170 vni CONTENTS ' PAGE VIII. The Finance of the Guild . • • ^^78 IX. The Inventor and the Guild . - • i°S X. Brains and the Guild . . . • ^93 XI. Motive under the Guild . . • 209 XII. The Bureaucrat and the Guild . .217 XIII. Inter-Guild Relations .... 226- XIV. The Approach to the Guild . . . 235 XV. Agriculture and the Guilds . . • 246 XVI. The State and the Guilds . . -255 XVII. Education and the Guilds . . . 264 XVIII. Conclusion ..... 272 Appendix I. — The Bondage of Wagery . 287 Appendix II. — Towards a National Railway Guild ..... 301 Appendix III. — Miscellaneous Notes . . 349 Index ...... 367 NATIONAL GUILDS PART I THE WAGE SYSTEM I EMANCIPATION AND THE WAGE SYSTEM The more meliorist politics be tested the more certain it becomes that emancipation cannot be effected by patchwork. For over eighty years Great Britain, by parliamentary stitching and patching, has contrived to maintain social order. The worker has been docile because he believed in gradual reform, and because it was promised him and in part secured to him. Had he not believed in gradual reform — the broadening down from precedent to precedent — all the promises in the world would not have kept him in bondage. It is certain, however, that he will continue docile, until he grasps the true meaning of emancipation. He has lived patiently and worked ardently for something that was called emancipation — a good platform word— and for three generations he has truly believed that another decade would release him from his life of degrading toil. " The day of your emancipation is nigh," is a 2 NATIONAL GUILDS cry that has gone out to the wearied workman for thou- sands of years. It has ever been Labour's Messianic mirage. To-day at Socialist meetings the audiences still sing fervently Kingsley's hymn, " The Day of the Lord is at hand." The delusion is carefully fostered by political Socialists of every school. Not that they deliberately delude their followers — that would be bad in all conscience — but, worse, they delude themselves. At least that is the only reasonable inference, for it is inconcei;i^able that Socialist politicians could be so diabolically cruel as knowingly to deceive their faithful followers on the crucial facts of existence. There is also another explanation : Is it possible that they do not know what emancipation really is ? Whatever else it may mean, it is certain that eman- cipation involves a new epoch, new not only in social and economic structure but new spiritually ; a new birth in which men are not only born again, but, as Mrs. Poyser remarked, " bom different." Now it is self-evident that social reformers and the most hide- bound Conservatives have this one thing in common ; neither desires nor dreams of a new epoch. The Con- servative says : " The present is good enough " ; the social reformer says : " Not quite good enough ; let me improve it so that it may continue." It is on this vital issue that the revolutionist differentiates himseli from both. But does the revolutionist in his turn really understand the fuU meaning of emancipation ? It is certainly curious that revolutionary literature throws very little light upon it. What, then, is the essence of emancipation ? The answer is simple : the rescue from oppressed or evi. living and the inauguration of a healthy method of life The application of this broad definition depends upon our understanding and appreciation of the fundamentals upon which the existing social structure is based. II EMANCIPATION AND THE WAGE SYSTEM 3 willhardly be denied that the foundation of society is laboiir. It follows, if the conditions that govern labour are evU and oppressive, that real emancipation consists in replacing those conditions by a new scheme of life. It is an appalling thought, yet not without justification, that the primary condition of labour — life for a subsistence wage — marks no advance upon previous epochs. Apart from purely superficial effects, it may with truth be contended that, fundamentally, wage serfdom (seldom if ever more than a month from starvation) is in no way an advance upon chattel slavery. Changes there have been, bringing in their train social and spiritual modifications, but in essence our wage-paid 'population is but helotry clipped of some of its more savage features. In what respect do we show any real advance upon the age of Pericles ? Slave labour has given way in part to ^machinery and in part to the wage system. In that great period an occasional slave absorbed the culture of his masters, and so it is to-day. But in the main the labour- ing populations of both cycles present the same social and psychological phenomena. Political emancipation leaves the worker quite as much at the final disposition of ihe employer as was the Greek helot. There is one vivid contrast : The slave-owner brutally and without any shame claimed the power of life and death over his slave ; to-day the same power is cloaked in the hypo- critical observance of hjimanitarian laws that effectu- ally mask brutal, powers equally brutally exercised. Then the revolting or incompetent slave was done to death; to-day he is starved to death — a death. that is Scientifically reduced to the lingering existence of care- fully graded poverty and destitution. The one signifi- cant fact that emerged from both the Majority and Minority Reports of the Poor Law Commission was the nicely defined discrimination between poverty and destitution. We frankly admit that we had not previ- 4 NATIONAL GUILDS ously recognised any difference between these two con- ditions of social death. In the final analysis, then, we discover that chattel slavery and wage serfdom have the same economic effect, the only difference discoverable being that the modem political machine has enacted certain laws which are merely sumptuary in their effect, although passed in the sacred name of " emancipation." Now, as in ancient days, wealth is absorbed by the privileged possessor out of the labour of the producer working as nearly as possible at a subsistence wage. Oddly enough, too, these sumptuary laws (that were supposed to favour the economic interests of the worker) have enormously strengthened the social power of the possessors. The conclusion is obvious — there can be no emancipa- tion save only from the wage system. The way out is to smash wages. It is a ctuious commentary upon Socialist propaganda in Great Britain that we seldom hear a word against the wage system as a system of ivages. The plea is for higher wages, shorter hours, or what not, but never for the complete abolition of wages as such. The result is that the younger genera- tion of Socialists never learn that this was once a salient feature of the Socialist crusade : they do not learn it because the older Socialists have forgotten it. It is to the credit of the old Social Democratic Federation that they always thoroughly tmderstood that the real enemy was the wage system. They realised that wages were the mark of a class, and that the class struggle (lutte de classe, not guerre de classe) meant first and last the complete destruction of the economic bondage implied in the wage system. Yet never was the need greater than to-day to press forward a conscious attack upon it. Parliariientary legislation is based upon the continuance of the wage system. The Insiurance Act, the Eight Hours' Day, the Shops Act— EMANCIPATION AND THE WAGE SYSTEM 5 all that body of factory rules and . regulations — they all postulate ■vase. Twenty years ago this intelligent workman, fed on Carlyle, Ruskin, William Morris, and others, said to his industrial mates : " Let us discard the strike ; it is political power we must secure. Not the strike, not the bullet, but thfe ballot." So said, so done. The Labour Party was born ; it made a great cry but brought back no wool. Worse ! Labour, diverted into political preoccupations, temporarily lost its industrial power and, in a period of tremendous commercial prosperity, actually lost some of its grip upon the industrial machine, and wages fell accordingly. Is it any wonder that politics now stink in the work- man's nostrils and that he has turned firmly to " direct action " ? Had a living Socialist Party found itself in Parliament, instead of the present inert Labour Party, led by charlatans and supported by Tadpoles and Tapers, the energies ot Labour might possibly for a slightly longer period have been fruitfully employed in the political sphere. But the lesson would have been learnt in due season that the Socialist conquest of the industrial system is an economic and not a political operation : that economic power must precede political power. We are, therefore, brought back to the wage system. While it remains, literally nothing can be done to emanci- pate labour. Glowing periods in Parliament (with hungry eyes on the Treasury Bench) are of no effect ; solemn deputations to the Home Secretary asking for GREAT INDUSTRY AND THE WAGE SYSTEM 17 this or that amendment to existing factory laws or regulations would be laughable were they not so tragic- ally futile ; municipal victories are but a form of local intoxication. While the wage system persists, Labour is in leash. We expect that some misapprehension exists as to the meaning we attach to wages. " Surely," says one, " wages must always exist in one form or another. What the workman receives, whatever its name, is in sub- stance nothing but wages." It seems necessary, there- fore, to make clear precisely the meaning we attach to the wage system. An employer, as he pockets his profits, does not regard them, except jocularly, as wages. He gets his profits out of the wages of his employees. No wages, no profits. In other words, the wage system is the arrangement whereby the capitalist produces his wares and is enabled to sell them at a profit. This means that he must absolutely treat labour as a commodity that enters into the cost of production, buying it precisely as he buys the other requisite ingredients. In Lancashire and Yorkshire it is not uncommon to see a notice : " Power .for Sale." Just as the weaver buys this power at the lowest market price, consistent with efficient service, so he buys labour. And just as the production and transmission of power must be efficiently maintained, including all the latest mechanical improvements, so also must human power be maintained, the distance above the subsistence line being the exact analogue to the mechanical improvements in the power supply. Subject, however, to the economy of this margin above subsistence, •the essence of the wage system is that labour must be mere material for exploitation, to be purchased in the neighbourhood of bare subsistence just as ore is bought in Spain or cotton in Alabama. Wages is the name given to the price paid for the commodity called Labotu-. But the political economists are agreed that Labour is i8 NATIONAL GUILDS a commodity. What of it ? We don't care a pinch ol snuff. Like Gladstone, we banish pohtical economy to Saturn. We must cease to regard labour as some- thing for which a price must be paid as a mere com- modity. The new conception must regard labour as something sanctified by human effort, into which thai sacred thing personality has entered. We decHne witt indignation to count- labour as subsidiary to profits, as something on the level with the inanimate. Workmen are not " finished and finite clods untroubled by a spark." Yet so long as they accept the wage system, they bind themselves to the devilish principle that their lives are of less accoimt than dividends, that they are but a part of production for. purposes beyond their control and benefit. No wages, no profits. The Socialist line ol attack is to kill profiteering by transforming the concep- tion of labour as a commodity into labour as the essence of our industrial life. IV STATE SOCIALISM AND THE WAGE SYSTEM The British Socialist movement during the past twenty years has been an amazing compound of enthusiasm, fidelity and intellectual cowardice. The pity of it is that cowardice has crowded out the enthusiasm and vitiated the fidehty. Perhaps, however, it would be as foolish to complain of intellectual cowardice in Great Britain as to complain of the weather. The Englishman will always face facts, but he lives in mortal dread of ideas. He is probably the one member of the European family who fails to. understand that a living idea is the greatest of all facts, the most substantial of all realities. He hates mystery, and, like a child in the dark, buries his head in the bedclothes, shrinking from and ignoring the mysterious power of things unseen. Being a sentimen- talist, he revels in vague ideals and misty conceptions ; but his mind rejects a definite theory unless it can be expressed in the concrete. " How does it work out in pounds, shillings and pence ? " he asks, and plumes him- self upon being a practical man. H? has satisfied him- self that imagination is for to-morrow and the concrete for to-day. Long views are most suitably housed in the comfortable studies of Academia ; the short view that increases wages by sixpence a week is more to his taste. This is always the note and tone of the British delegation at an international congress. Whilst the Latins and Teutons vigorously discuss the theoretical aspects of 20 NATIONAL GUILDS some problem, the Britisher gapes like a gawk, wonder- ing when the cackle will end and the horses appear. This attitude has its strength and its weakness. Its strength, in that it avoids party fissure on academic points (the most prohfic source of splits and dissensions in parties of the left), and promotes concentration upon immediate and concrete proposals, such as a small advance in wages, factory legislation and so forth. Its weakness, in that it can never take a long view and work steadily towards a great end. Its weakness, because every new legislative proposal — the Insurance Act, for example — finds it in doubt and uncertainty. Its weak- ness, because it inevitably excludes the intellectuals, who are primarily concerned with the tendency and meaning of party doctrine. The Independent Labour Party exemplifies these good and bad qualities. Froiri its inception down to to-day, it has carefully eschewed doctrine, picking up its ideas haphazard, living on an artificial enthusiasm engendered by political strife. In its ignorance it has frequently condemned what subsequently it has been compelled to accept, and then again has had to reject what in its ignorance it had propounded as good Socialism. It has steadily refused the help of the intellectuals, who, if they joined it, soon found themselves isolated and suspect. The result has been a certain small measure of political success, but, for the rest, an utterly barren record. Not an idea of the slightest vitality has sprung from it, its literature is the most appalling nonsense, its members live on Dead Sea fruit. The joyous fellowship which was its early stock-in-trade has long since been dissipated ; the party is now being bled to death by internal bickerings, dissensions and jealousies. It is the happy hunting-ground of cheap and nasty party hacks and organisers, who have contrived to make it, not -. an instrument for the triumph of Socialism, but a vested ' interest to procure a political career for voluble inefiicients. STATE SOCIALISM AND THE WAGE SYSTEM 21 The outcome of this unhappy development is primarily this : That only a handful of SociEllists in Great Britain have a clear conception of what Socialism means. How could the rank and file know, when the leaders gloried in - their ignorance ? Thus Spcialism has gradually come to mean the intervention of the State in social and industrial affairs. The origin of this notion is not far to seek. In the earlier days the Socialists had to struggle agaiflst the prevailing belief that any kind of State intervention must necessafily infringe upon the prerogatives of the individual. Individualism was the dominant creed. What the individual could do, the State must not do ; laissez-faire was the basis of British life. It was obviously the cue of the Socialists to break down this theory, and accordingly they strained every nerve to increase the power of the organised community. When, therefore, a municipaftty took over its water or gasworks, the Socialists were quick to acclaim it as a Socialist victory. Gradually it was discovered that certain public services could be more efficiently and economically administered by the municipality than by the individual or the private company, and in consequence the term " Municipal. Socialism " acquired a definite connotation. There is this in common between Municipal and State Socialism : Both are equally committed to the exploitation of labour by means of the wage system, to the aggrandise- ment of the municipal investor. State Socialism is State capitalism, with the private capitalist better protected than when he was dependent upon voluntary effort. And herein we discover why the British Socialist move- ment has been side-tracked. It expected that under State Socialism a way out would be found from the exploitation of labour ; it has discovered to its dismay that the grip of capitalism upon labour, far from being released, has grown stronger. Nor is that all. The payment of dividends to the private investor is forced 22 NATIONAL GUILDS upon the workman, not only as an economic necessity, but as an obligation of honour. How is it done ? There is only one way : by perpetuating the wage system. " Let us nationalise industry," say the political Socialists, " and then we shall control it." " Yes, but you must compensate us," reply the capitalists. " Certainly," is the reply, " we will pay you the full and fair price." " How will you get the money ? " ask the capitalists. " By borrowing," reply the political Socialists. " Who will lend to you ? " again ask the capitalists. " Oh, we will pay the market price for the money," comes the reply. " In that event, we will lend it to you," the capitalists graciously respond. " You can pay us 3 per cent, and provide a sinking fund and we will be con- tent." In this way the community has gained control of an industry on borrowed money. Next enters the workman. Tlxe political Socialist director looks at him and fails to observe any marked elation. The old plat- form manner returns. " My friend," says the political Socialist, " you must rejoice with me, for this is a red- letter day in the history of suffering humanity ; emanci- pation IS in sight." " Very glad to hear it," replies the worker, " I suppose you will do something substantial in the matter of my wages ." " Hum, yes, in good time, ' ' says the political Socialist ; " but, you see, comrade, we must pay 3 per cent, for the money we have borrowed and put by li per cent, for sinking fund and 5 per cent, for depreciation account. Then the Treasury insists upon our paying rent for the buildings and land. I am afraid, my friend, that you must wait." " Hanged if I do ! " angrily exclaims the worker, " I'll strike." " I am quite sure you won't," suavely says our political Socialist. " You see we are doing all this in your interest, and it would be immoral for you to strike against the State. You would be striking against yourself. Besides, you are in honour bound to pay a fair rate of interest to our STATE SOCIALISM AND THE WAGE SYSTEM 23 good friends the capitalists, who have patriotically advanced the purchase money." Exit workman scratch- ing his chin and completely mystified. He remains in bondage to the wage system. His only means of escape is to smash it. It is not rent and interest that enslave him ; rent and interest rely for their payment upon the wage system. No wages, no profits ; no wages, no rent ; no wages, no interest. Destroy the wage system and a complete transvaluation of every industrial factor follows as an inevitable consequence. To lure the workmen, then, into a misconceived agitation for mere nationalisation is both stupid and cruel. ! It is peculiarly humiliating that our spry little Chan- cellor of the Exchequer had to teach this simple lesson to an avowed Socialist. Mr. Keir Hardie apparently does not yet realise that he is dead. His simulacrum moved an amendment recently in the House of Commons to an official resolution calling for a thorough investiga- tion into the industrial unrest. Mr. Hardie's cure was nationalisation of the mines, railways and land. Mr. Lloyd George faced this issue quite cheerfully. Did he oppose nationalisation ? Not at all. On the contrary, there was a great deal to be said for it. Why ? Let us quote from the Times report : " He was not combating nationalisation. He thought there was a good deal to be said for it from the point of view of the traders. . . . His hon. friend was very sanguine if he thought nationalisation would put an end to labour troubles. " Mr. Keir Hardie. It will depend upon what you pay. " The Chancellor of the Exchequer said he did not agree, because whatever they paid there would be disputes between the man who offered his labour and the man who made payment for it, in which they would take different points of view as to the value' of the labour. 24 NATIONAL GUILDS " Mr Keir Hardie said these disputes would then be settled in the same way as disputes in the Post Office were settled— on the floor of the House. " The Chancellor of the Exchequer said he did not know that that was quite an encouraging analogy. . . . One of the greatest strikes in Australia took place on a State railway, and the State railways did not escape during the strikes in France. They had nationalisation of railways in Germany, but wages were much lower there than here." After this enlightening colloquy is there any sane Socialist who does not grasp the fundamental distinction between economic Socialism and the State capitalism which does not frighten Mr. Lloyd George, who quite candidly admits that it may be a commercially sound proposition, but that it depends upon the wage system, with all the troubles associated with it ? We seriously ask the I.L.P. if this is the brand of Socialism for which they are struggling. If it is, then the sooner the industrial Socialists realise the fact the sooner will the atmosphere be cleared and we can get to business. If, on the contrary, the I.L.P. does not accept such a crude doctrine as that proclaimed by their veteran leader, why do they allow him and his colleagues to present Socialism in so ludicrous a garb in the House of Commons ? Let us look at Mr. Hardie's suggestion. He obviously believes 'in the wage system. In this respect he does not differ from his Liberal and Tory colleagues. He wants more money to be paid in wages. So do his Liberal and Tory friends. Who does not ? He thinks the floor of the House of Commons the right place to settle wage disputes. This means that he regards Parliament as strong enough to control the economic forces. He probably does not know it, nevertheless he is really a puzzle-headed State capitalist. We now see that State Socialism is no panacea for economic servitude. On the contrary, it rivets the STATE SOCIALISM AND THE WAGE SYSTEM 25 chains a little more securely. If it were otherwise, is it prqbable that both the orthodox parties would com- mit themselves to it ? In the early days of Municipal Socialism some of its warmest supporters were Tories, and its keenest opponents were Liberals. To-day railway nationalisation finds large support from both parties, while numerous Chambers of Commerce have declared for it. Cannot Mr. Hardie be made to see that such support is not tendered because of Labour's beauti- ful eyes ? It is a simple fact that a considerable exten- sion of State Socialism would be agreeable to capitalists. We are passing through a period of commercial expan- sion. British capital, more than ever before, is being placed in all parts of the world. These investments are speculative. For every such speculative investment abroad it is not unusual to cover the risk by an absolutely sure investment in home securities. What more secure than lending to the State ? Further, our Government securities are always easily liquidated. State Socialism is a gain and a convenience to the private capitalist, who can at one stroke average his risks and keep in his safe scrip that can instantly be turned into ready cash. Yet this is what Mr.- Hardie and his colleagues offer the wage-earner to ease his unrest and render him happy ever after. We do not think the wage-earner will be deceived by so transparent an imposture. The facts of his daily life will soon teach him that a State guarantee to pay rent and interest is by no means the right way to abolish rent and interest. The only one guarantee the capitalist can rely upon for the payment of his dividends is the wage system. The only guarantee the State depends upon for the payment of its liabilities is the wage system. Our commercial and social arrangements, in the final analysis, are contingent upon the workmen remaining content with wages. For what does the social contract imply ? 26 NATIONAL GUILDS Plainly this : that rent in whatever form is a first debenture upon the labour of the wage-earner. That interest is a second debenture upon the same product. That prices are fixed upon the basis of rent and interest remaining as first charges upon labour, which has to be content with a wage that is based upon a calculated subsistence. State Socialism, as we have seen, perpetu- ates these debenture charges upon the fruits of labour. Who, then, can forbid the continued imposition of these burdens ? The wage-earner, and he only. He has but to make up his mind that his life must take precedence over both rent and interest, to back up his decision by collective effort, and the wage system crashes to earth, bringing down with it everything that lived upon it. We have seen that the wage system is based upon the conception of labour being a marketable commodity. It is for the wage-earner to proclaim the larger truth that his lECbour is his life, that his life is a sacred thing and not a commodity, that his life must not be subject to any kind of prior claim. By that act of faith the wage system is abolished and the worker stands on the threshold of emancipation. INTERNATIONAL ECONOMY AND THE WAGE SYSTEM If Great Britain were a self-contained economic unit, with a happy equilibrium between its home demand and supply, if it were unaffected by economic and com- mercial changes over the rest of the world, it might then, so the critic may aver, transform its wage system into the Guild System without fear of the consequences. To argue in this way is to argue that National Guilds are uneconomic, wasteful, a drag upon our national vitality. The exact reverse is the case. We have seen that the wage system carries on its back the burden of rent and interest ; that the refusal of labour to work for wages is tantamount to the discharge of that burden.' This, in its tiurn, means that the production of wealth can proceed unhampered by the depredations of the rent-monger and the profiteer. Therefore, one of two courses is open to the emancipated wealth-producer : he may either continue to produce the same or a greater amount of wealth as heretofore, with a consequent gain proportion- ate to the amount of rent and interest sa.ved, or he may comfortably reduce the amount of wealth previously produced in proportion to the amount no longer de- manded by rent and interest. But, inasmuch as an increased productivity of wealth spells increased comfort, the former alternative is the one that would be adopted. Incidentally, we may observe that we use the term 28 NATIONAL GUILDS " wealth " in the classical sense— that is, as the economists use it. But the last word has not been uttered as to the precise meaning of wealth ; the Guild principle will undoubtedly evolve new conceptions of wealth as well as of wealth production. But we are now concerned with the influence of international exchange upon our national economy. It is not only convenient, but entirely right and natural that we should have regard to the economic power of our nation qua nation. Socialists are not cosmopolitans, they are internationalists ; and you cannot be an internationalist unless you are first a nationalist. Let us, then, admit that whatever weakens us economically in our relations with other nations is, ipso facto, inadmissible. We may ternporarily weaken ourselves for some large political purpose, as, for example, by the imposition of a preferential tariff to cement the Empire. This was originally the argument used by Mr.. Chamberlain. He subsequently discarded it, because he discovered that amongst its wealthy supporters un- selfish patriotism was regarded as foolish and chimerical. But, whilst the idea of an economic sacrifice for a great object is conceivable, it is not often practical politics, for the reason mainly that what is ethically desirable is economically necessary. The Guild System does not shrink from this supreme test ; on the contrary, it welcomes it. Why not ? For assuredly the argument is all one way. The wage system, as we have seen, is wickedly wasteful, because it carries on its back not only an army of non-producers who are large consumers, but also a large number of parasitic industries that minister to the luxuries and vices of the non-producing consumers. If these un- economic elements be eUminated, who cian calculate our increased economic power as a nation and a community ? The international economic struggle to-day is conducted as a sort of weight-handicap race in which labour in INTERNATIONAL ECONOMY— WAGE SYSTEM 29 every civilised country carries varying degrees of weight- exploitation nicely adjusted to the international market. The more highly civilised the nation the heavier is labour's handicap. For of what use is civilisation to the rent- monger and the profiteer unless they can exploit it ? And how (pan they exploit it except through the agency of the wage system ? If, however, labour in Great Britain throws off this handicap by smashing the wage system, what fool is there who will contend that its power to produce wealth is weakened ? One might as well argue that a man with haemorrhage is the best man to run a hard and exciting race. In the sure and certain knowledge that the stanching of the haemorrhage of rent and interest leaves us as a nation stronger and not weaker, what, then, is the nature of our relations with other countries ? The conception of international exchange propounded by the Manchester School had much to recommend it. Broadly, it was this : that nations exchange their super- fluities with each other. Do America and Canada grow more wheat than they consume ? England has need of it, and in exchange will send manufactured goods not made across the Atlantib. Does China grow more rice than she^equires ? We are ready and willing to exchange something that we produce for the rice. Nor is direct exchange necessary. China may have no use for any- thing of ours, but a third or a fourth country may be the medium of exchange through the agency of some pro- duct in demand in China. In this way the trading community becomes an international bourse where the supply and demand of every country are regulated. The fundamental fact never to be forgotten is that international trade is barter. We pay for labour's pro- ductions with labour's productions. International bank- ing is but a convenience to the great end that each country shall h%ve access to the natural and manufactured 30 NATIONAL GUILDS products of the world in exchange for such excess of the home commodities as may be required. That a money value is placed upon home and foreign com- modities is a convenience and not a necessity. Even yet we barter with nations who do not understand money. There are several businesses in Birmingham that make articles for direct exchange, images of gods and ju-jus amongst them. But the Manchester School assumed that foreign trade was best conducted on what it called " individualist " lines. Collective bargaining was ana- thema. We have long since passed away from that particular conception of foreign trade. The individual profiteer found himself helpless in the face of political difficulties and never-ending international complications. He accordingly fell back upon a species of collective bargaining, his side of the contract being proteqted in part by his Government, acting through the local consul, in part by the Chamber of Commerce, and in part by himself or his agent. With the increased stringency of international competition, resort has been made more and more to Government support. More and more is it demainded of the Consular Service that it shall eifectively co-operate in the extension of British trade in every quarter of the globe. One thing, however, it must not do : it must neither buy nor sell. That would be an invasion of the sacred rights of the profiteer. It is true that a well-organised Consular Service could exchange its national products to much better advantage than is possible to the profiteer. But does he care for that ? Safely entrenched behind the wage system at home, he utilises the Consul, not in the interests of his country, but in the interests of private exploitation. Travellers can tell strange stories of the exactions of the private trader in every part of the world. It is a simple fact that for a large proportion of the raw materials and commodities imported from other countries we pay through the nose. INTERNATIONAL ECONOMY— WAGE SYSTEM 31 We should effect untold economies if we were to hang the principals of our foreign trading concerns; The process would be unpleasant, but it would encourage' the others. Great Britain is by way of beii^g proud of its gigantic foreign trade, but the man with a shrewd eye and some sensibility, who has seen the operations of European traders in, say, China, India, the Congo, South Africa, Brazil, Peru, knows that we ought rather to blush for than to boast of our foreign trade. Labour, having once conquered the production of wealth, by the break-up of the wage system, with the consequent elimination of the non-producing but consuming factors, has only to annex the Consular Service and to man it with Guild representatives. That accomplished, we can exchange our products to even greater advantage than heretofore, and at the same time humanise many parts of the world that now writhe imder the exactions and oppressions of buccaneers and profiteers. Having now examined the home and foreign impli- cations of the wage system, we venture upon a generalisa- tion : Private capitalism, by means of the wage system, exploits labour to expand rent and interest; the Guild System exploits the earth to expand life. This generalisation commits us to international co-operation in the exploitation of the earth, whereas we have been arguing that the substitution of Guilds for the existing wage system would give us an advantage over other nations. It is certainly true that every new departure based on sound economy confers an advantage upon the community wise enough to start out courage- ously on a new life. The advantage is inherent in the new scheme of life. But we do not smash the wage system and construct a new social fabric to gain a march upon labour in other coimtries. We do it so that men and women in Great Britain shall live, whereas previously they only existed. We believe that we should be setting 32 NATIONAL GUILDS an example that would speedily be followed by France, Germany and America. The advantage gained by the first country to adopt Gu,ild organisation is less economic than commercial. Another basic principle now looms up on our horizon : A bad economic system in one country hears down the standard of life of the whole world. Gresham's law applies to life as well as to money. Poverty degrades ; its influence ripples to the outside edge of th6 world. Indecency corrupts ; its odour offends the nostrils of Jew and Gentile. In like manner and for the same reason, an oppressive wage system affects labour everywhere. And herein we discover the true justification for international Socialism. When the German Social Democratic Party sent a large sub- vention to L'Humanite it was helping its own cause in Germany just as much^ as it helped the French movement. To stimulate international Socialism is to strengthen Labour in every part of the world. Thus the downfall of the wage system in Great Britain is the harbinger of the emancipation of Labour every- where. This result would be effected in two ways : In ' the first place, private capitalism in Germany or France could not compete in the world's market with Guild labour in Great Britain, and would in consequence be compelled to abdicate ; in the second place. Labour in Germany or in France, realising the true meaning of Labour's victory in Great Britain, would revolt against its own wage system and end it. Having no reason to compete with Germany, but rather having the greatest possible inducement to co-operate with his German col- leagues, the British Guildsman would aid them by every means in his power. Internationalism is by no means a figure of speech. It means not only social and intellectual comradeship but economic co-operation to an extent as yet undreamt of in our barren commercial philosophy. Look at it how we may, the INTERNATIONAL ECONOMY— WAGE SYSTEM 33 wage system is the main obstacle to the SociaHst conquest. There remains yet one other important consideration. With the intellectual and social advance of Labour in Europe, finally released from the incubus of the wage system, a new standard of wealth production will be evolved, bringing in its train a new civilisation. Does this mean that those nations that remain faithful to the wage system must become the hewers of wood and drawers of water for their emancipated brethren? Will the Chinaman or the Bolivian, the Negro or the Persian be forced to perform the menial tasks of the world ? It looks uncommonly like it. Will it not be at least human for the European worker, emancipated from drudgery, his* mind bent upon transforming his work into an art or a craft, to leave the lowest tasks to the coolie ? It is indeed probable. Perhaps, in the inscrutable decrees of Fate, this may be the way ordained to emancipate those who will then walk in darkness that is the shadow of servitude. We may at least comfort ourselves with the reflection ■ that through economic emancipation we shall have achieved such a higher form of life that even servitude such as this will be too danger- ous, too corrupting, to tolerate. If it be so, as we would fain hope, then we shall end it, by force if needs must. Armageddon may perchance come that way. It would be a battle worth fighting — and who can doubt the issue ? VI UNEMPLOYMENT AND THE WAGE SYSTEM In our previous chapter we described the exactions of rent and interest as haemorrhage — an exhausting effusion of life-energy from Labour of which the wage system is the direct and main cause. The wage system is the fruitful parent of another evU — ^the^ septic poisoning of the body politic by human wastage — the wastage of unemployment, of poverty, of premature death and decay. The facts are only too painfully evident. It would be easy to fill whole chapters with statistics of unemployment, poverty and disease. They need not be cited here, because they are not disputed. The most horrible aspect of these tragic elements in our midst- is that they persist in times of prosperity. Take the month of AprU 1912, for example. No one will deny that trade was extremely good. Yet the percentage of unemployment that month was 3*6, nearly i per cent, more than the year before. This, however, may fairly be ascribed to the coal strike. But vs^hat does 3-6 per cent, of unemployed mean in terms of human hfe ? This : nearly 600,000 wage-earners unemployed, or 2,400,000 men, women and children on the verge of starvation. Yet, as we reckon human affairs to-day, this is not con- sidered particularly serious ; certainly nothing to worry about. It is, in fact, a rather convenient total. It is not so large as to cause much outward discontent and agitation ; it is just large enough to keep down wages. UNEMPLOYMENT AND THE WAGE SYSTEM 35 A margin of unemployment is essential to the maintenance - of the wage system. We are aware that the younger capitalist school contends that it is possible to absorb all the unemployed without dissolving the wage system, which is admittedly the basis of the capitalist's power to exploit labour. This is really the keynote of the Minority Report of the Poor Law Commission ; it is the argument of Mr. W. H. Beveridge, the presiding genius at the Labour Department of the Board of Trade ; it is the belief of that variegated school of social reformers who find their views expressed in the Daily News and the Manchester Guardian. How do they propose to do it ? These clever people have looked into the subject and they have discovered that there are two classes of unemployed : the competent workers temporarily out of work, and the unemployables. They have made another discovery : there are two kinds of tmemployment : seasonal unem- ployment, clearly due to the act of God, and chronic unemployment, caused by various maladjustments of industrial organisation. Having defined the subject to their complete satisfaction, they find that the solution is easy — so easy that we are surprised nobody ever thought of it before. The unemployables, of course, must have curative treatment. For them, God wot, the labour colony. Isn't that the acme of simplicity ? At these labour colonies, men and women are to be trained in the technique of some trade and are to be endowed with habits of thrift and sobriety. To what end ? That when they are technically and morally fit they may again assume ^ihelr ordained position in the wage system, where they shall again be suitable subjects for exploitation. In regard to the unemployed who are the victims of seasonal occupation, they must be taught an alternative trade. The other unhappy class of un- employed present the simplest form of the problem. Their case is met by our old friend in political economy. 36 NATIONAL GUILDS mobility of labour. What we must do, therefore, is to make it easy for these men and women to move from one part of the country to another. Therefore we must have a system of labour exchanges, and (with certain precautions) we may advance their railway fares. Any- body with a turn for mathematics can see at a glance that, in the unceasing general post of unemployment, every unemployed person can settle in somewhere, at some time and at some wage not to be despised. It involves' a little State organisation, a few sympathetic officials, preferably of the Fabian type, et voild tout ! Is it by now superfluous for us to remark that all, these labom- colonies, all these labour exchanges, all this State organisation, informed and permeated by clever Fabi- anism, are designedly rendered subservient to 'the main- tenance of the wage system ? It would not, however, be fair to suggest that the social reformers have, with these proposals, shot their last bolt. They admit that, notwithstanding all these Governmental contrivances, there would still remain a surplus of deserving unemployed. Clearly something more remains to be done. Obviously, private capitalism has absorbed its maximum number of employees, there- fore the State must do something. What can it do ? Ah, well, that is not so easy. It is certain that, first and last, it must not set any worker to uneconomic employ- ment. There are, however, various public undertak- ings of distinct economic value — afforestation, recovery of the foreshores, transforming slums into sanitary tenements, and — an unpleasant topic — emigration. But these undertakings demand capital. Very good ; let us borrow. The capitalist smiles. Another safe invest- ment ! How splendid it is to have a paternal govern- ment that, at one and the same stroke, offers a sound investment and perpetuates the wage system ! In such circumstances, under such auspicious conditions, it is UNEMPLOYMENT AND THE WAGE SYSTEM 37 certainly worth while to spend a few thousands each year on the upkeep of Christian missions, whose func- tion it is to train hoi polloi in the doctrine of social discipline. Thus, Labour, acting on the advice of these remarkably earnest and enthusiastic social reformers, finds itself in the same old vicious circle. It asks the private capitalist for more humane conditions. " Cer- tainly," is the answer, " providing you are efficient wage servants, and thereby enable me to pay rent and interest and make a decent profit." It asks the State Socialist to relieve it of its deadly disease of unemployment. " Certainly," answer the MacDonalds, the Hardies, and the Snowdens, " it is the problem that called us into political^life. We will, as a State, put your unemployed to economic tasks, but you must honourably remain wage slaves, because the wage system is the only way whereby we can pay rent and interest to the capitalists who advance the necessary money." • Wherever Labour turns, it is thus caught .in the trap of the wage system. There remains yet another question to be answered : Even though it be necessary to maintain the wage sys- tem, is it not better to adopt State Socialism, so that the unemployed may be drained off the labour market and thereby enable the wage-earner to exact a higher wage ? If a margin of unemployment be necessary to keep down the wage level, does it not follow that if that margin disappears wages, ipso facto, must rise ? The answer to this question is twofold : First, wages cannot appreciably rise whilst the worker accepts the wage system as the basis of his bargaining ; secondly, the employers, for at least another generation, can auto- matically create a new margin of unemployment by the introduction of labour-saving machinery. Let us examine both these propositions a little more closely. It is clear that wages cannot rise much beyond 38 NATIONAL GUILDS the level of bare subsistence so long as rent, interest and profits have a prior claim upon the products of labour. Whether the market price of the commodities produced be fixed by international or domestic competition, or by the capacity of the consumer, or (as is generally the case) by both influences acting and reacting upon it, there now remains no kind of doubt that in our national economy there is not room for rent and interest to live if labour absorbs its own surplus value. The essence of the wage contract is that labour must itself be a commodity enterilig into the cost of the article, the surplus to be divided between rent, interest and profits. Break that contract and the whole social contract must be revised. If labour is strong enough to break the contract, it is obviously strong enough to capture the plunder. But it cannot do so if it accepts wages in principle or form. The essence of this implied contract has entered into our common law. Labour, by means of the wage system, must implement the employer of obligations to rent and interest. This is put bluntly by a lawyer in the Daily Mail : " I object most strongly to the statement that breach of contract is a ' theoretical wrong.' It is not only the working man who suffers, from^the decline in the purchas- ing power of money. No one suffers from it so much as the so-called ' idle rich,' many of whom are neither idle nor rich, but all of whom derive their income from con- tracts under which they are entitled to receive a fixed income of so many pounds a year, whether trade is good or bad and whatever the purchasing power of these pounds may be. The ' idle rich ' do not grumble, but are content to take the rough with the smooth. And whatever may be the defects of lawyers as politicians, the common law of contract is a just law." If, therefore, labour accepts this law of contract as just, it must accept the wage system and all that it UNEMPEDYMENT AND THE WAGE SYSTEM 39 implies. And it follows that, even if the margin of tm- employed be removed, the continuance of the wage system absolutely precludes any appreciable increase in the standard of life. The truth of this becomes more apparent if we examine our greatest national industry, agriculture. There is practically no margin of unem- ployed in our rural districts, yet wages remain disgrace- fully low. Why ? Because the farm labourer accepts the wage system and accordingly most kindly and con- siderately pays his employer's rent at the cost of his own children's souls and bodies ; pays the rent and the interest on the capital outlay of the farm gear and machinery by the social and economic degradation of himself and his wife. Although there are practically no agricultural unemployed, certainly not enough to constitute an effective margin of unemployed, yet the farm labourer remains in degrading bondage to the wage system. It thus becomes evident that the profiteer's chief bulwark of defence is the wage system. Nevertheless, he holds in reserve another weapon — the power to dis- charge labour. This power is, however, conditioned by his capacity to pay rent and interest and make a profit. He will not, therefore, discharge labour without good cause, and unless he has a substitute for it. The good cause is mainly this : that he can no longer exploit labour to advantage. In other words, he can only pay for the commodity, labour, when its price does not put him out of action. If the price of labour fulfils this con- dition, he is content. But if the vendor of labotir demands something in excess of its commodity price, the profiteer brings to his aid the inventor and_ the engineer, and in a twinkling an automatic machine is at work, and fifty men are thrown upon the scrap-heap. Fifty men ? Say rather five thousand : for the com- petitors of this profiteer must not only follow his 40 NATIONAL GUILDS example but, if possible, better the instruction. The political economist has his answer all pat and glib. He tells us that whilst it is very sad that these five thousand worthy men should thus be temporarily inconvenienced (we must not forget that labour has the priceless quality ~ of mobility), nevertheless the introduction of machinery is good for the engineering industry, and that what we lose on the swings we make up on the roundabouts. But even the political economist has not the effrontery to contend that one unemployed engineer is brought in for every one man displaced by the new machine. We know that the output of ten engineers can easily put a thousand labourers out of employment. Our political economist grows irritable when reminded of this simple little fact. " Tut ! tut ! " he exclaims, " we have only to consider the economic production of wealth." We need not pursue the.argument. Whatever the pedants may affirm as to economic wealth production and the mobility of labour, the fact remains that at this moment, when trade is good, we have a standing imemployed army of nearly 600,000, they and their dependents living in a hell not of their seeking. Nor can there be the slightest doubt that the employers of this country purposely maintain a margin of unemployment, and justify it on two grounds : (i) that they must have a reserve ,of labour to meet excessive demand ; (2) that wages can only be regulated by the employer being in a position to argle-bargle, with the unemployed to fall back upon. Mr. Arthur Chamberlain was quite frank on this point. Some years ago, arguing in favour of Free, Trade, he pointed out that unemployment was lower in Free Trade. England than in protected countries. " But," he added, " we must maintain a certain reserve of unemployed, or what would we poor manufacturers do ? " The most that can be sa,id for the removal of the unemployed, if under private capitalism such a thing were possible, is UNEMPLOYMENT AND THE WAGE SYSTEM 41 that it would strengthen labour in a conscious onslaught on tlje wage system. But if labour can still be induced by private or State capitalists to continue working under the wage system, then the solution of unemployment would not materially benefit labour. vir DEMOCRACY AND THE WAGE SYSTEM It was, we think, Abraham Lincoln who defined demo- cracy as government of tlie people by the people for the people. This is the conception of democracy comnion to eJI Republicans and Radicals throughout the world. Gladstone differentiated Liberalism by his famous aphorism : " Toryism is mistrust of the people qualified by fear ; Liberalism is trust in the people qualified by prudence." A moment's clear thinking discloses the disconcerting fact that Gladstone's distinction between Toryism and Liberalism is more apparent than real. In either alternative a governing class is predicated. But did not Lincoln also assume a governing class ? A lawyer himself, we suspect he imagined a class of pure- souled attorneys, not unlike Mr. Lloyd George, springing out of the people, voluble in first principles, devoting themselves to the political service of the People with a capital P. The ministrations of the lawyers were to be mitigated by successful men of business, who would " know when to come in out of the rain." It is almost certain that " class " representation would have been as abhorrent to " Father Abe " as it is to Mr. Balfour. To both men, class representation would mean the importa- tion into the body politic of craft representatives. Mr. Balfour and his congeners believe in class government — DEMOCRACY AND THE WAGE SYSTEM 43' their own class — and so did Lincoln — his own class. The Chartists and the. early English Radicals were dominated by the same idea — a poUtical hierarchy, draw- ing its authority and inspiration from the mass of the people, but a governing hierarchy none the less. The Balfourian conception dates back to the Caroline period ; the Lincoln-Radical-Chartist doctrine derives from the French Revolution. Both conceptions are now out of date ; both are equally irrelevant to modem life. Take one example — local representation. A member of Parliament is supposed to represent his own county or borough. He is presumed to know by experience and knowledge the needs of his own locality. Then, as occasion arises, he is expected to say, " We in our county believe." But how remote from the fact ! The House of Lords comes nearer to district representation than does the Commons. Thus most noble lords take their title from some place in which they are interested by land owner- ship. But the majority of the Commons have only a carpet-bag concern in. their constituencies. Further, each member is supposed to speak for his constituency as a whole. Occasionally some newly elected member pays lip-service to this principle. Returning thanks for his election, he says : " Now that the fight is over, I will remember that I represent not only the majority that has elected me, but the minority also." His new con-' stituency is, of course, politely incredulous. The minority, sore with defeat, regard -him as a prevaricator ; the majority, elated with victory, determine that he must toe the party line. No nonsense about that ! It would be easy to enlarge upon the anomalies of our present political system. We are now only concerned with the relation of the present political structure to the wage system. Now there is substantial agreement amongst aU politicians that the British political system is democratic. It is true that the Liberals and Labourists 44 NATIONAL GUILDS demand some further extension of the franchise, whilst women are also claiming the same thing in varying accents. But it is not seriously contended that universal adult suffrage woiold fundamentally change our system of government. The Liberals ponder whether it would benefit the Tories ; the Tories, whether it would benefit the Liberals ; the Labour Party does not so much ponder as gape in honest and well-intentioned vacuity. (They are the fifth wheel on the political coach and are of no particular importance.) How comes it, then, that our democratised political structure still remains unrelated to democratic reality ? The answer is simple : Four- fifths of the community are imprisoned by the wage system, and the wage system is the negation of democracy. Nearly seventy years ago Abraham Lincoln conducted his historic campaign against Judge Douglas on the affir- mation that no state could continue " half slave and half free. ' ' He did not foresee tiie marvellous social inventions of the second half of his century. How was he to know that, in the name of the particular type of freedom which he advocated for the negro, both black and white would in a generation be conquered by a more insidious form of servitude ? How could he foretell the outcome of a capitalistic system that left the modem world one-fifth free and four-fifths servile ? There need be no mistake about it : every wage-earner carries with him the stigmata of his caste as obviously as if he were a branded slave. He is excluded from the social opportunities extended to the middle and upper classes ; special legislation is passed almost every Parliamentary session relating to and further defining his status in the wage system, just as in America there was constant State legislation relating to the enslaved negro. The formal, legal resemblances between the wage-earner and the slave are altogether remarkable. Too much stress has been laid by Socialists upon the similarity of material condition between the DEMOCRACY- AND THE WAGE SYSTEM 45 wage-earner and the slave. " How much better off are we than the slave ? " is an appeal that has doubtless some trace of truth in it, but its value is rhetorical rather than scientific. In the material things of life there can be no doubt that the general body 6f wage-earners is much better off than was the general body of slaves, although probably our " submerged tenth " suffers more from actual privation than did the Southern slaves. But' so far as status goes the similarities are deadly. In the first place, it was not intended that the emancipated negro should become a citizen. Lincoln declared against it : " So far as I know, the Judge never asked me the question before. He shall have no occasion to ask it again, for I tell him very frankly, that I am not in favour of negro citizenship. ... If the State of Illinois had that power, I should be opposed to the exercise of it. That is all I have to say about it." Here, then, is the father of modem democracy, who believed in emancipa- tion without citizenship. Events were too strong for Lincoln; the negro obtained' the vote. There are 12,000,000 negroes in the Southern States, but they have not a single representative in Congress. Why ? They are as effectually shackled by the wage system as they were by the slave system, and their masters manipulate the party machin3. Their status is that of wage-earners, and what has the wage-earner to do with government ? And, be it noted, there is not a single white wage-earner in Congress, unless Victor Berger, the Socialist repre- sentative from Milwaukee, ranks as such. He is cer- tainly the only member of Congress who claims to act for the wage-earners, and as we unhappily must admit, like the Labour members in the British Parliament, he accepts the wage system. We have already commented upon the particularist legislation passed by the House of Commons. Will anybody pretend that such measures as the Workmen's 46 NATIONAL GUILDS Compensation Act, the Miners' Eight Hours Day Act, the body of legislation relating to public-houses, the innumerable Factory Acts, are not measures quite specifi- cally designed to define and perpetuate the wage system, and are on all fours, although doubtless more humanely designed, with the slave legislation adopted in America in the first half of last century ? And here we stumble upon another curious resemblance. The overwhelming majority of the American people, including Lincoln, . beUeved that the slave system must persist indefinitely ; the vast majority of the British nation hold the same belief in regard to the wage system. A bsit omen ! Slavery disappeared in a gigantic national convulsion ; shall we in Great Britain choose a more excellent way ? Perhaps, however, the most effective method of main- taining the wage system is our educational machine. It is carefully decked out in democratic trappings ; it is avowedly designed in the interests of the democracy. We proudly tell our foreign visitors that th& child of the millionaire, of the merchant, of the shopkeeper may sit and learn with the child of the artisan. They may ; but they don't. The reason is not far to seek : the' school curriculum is dra\Yn up by the governing classes in Whitehall (Oxford and Cambridge preferred), not for their own children but for the children of the wage- earners. The employer would be a fool to send his boy into such an environment. Of course, the democratic formulae are maintained inviolate. " Look," says Whitehall, " what a splendid elementary education we give. Its cost is £24,000,000 a year. It is open to rich and poor. We do not stint educational appliances ; the very best desks and seats, beautiful black-boards, splendid buildings." Who has not heard the whole story, ad nauseam ? As a matter of fact, it is not education ; for education implies emancipation, and that is the last thing our mandarins desire ; it is instruction, DEMOCRACY AND THE WAGE SYSTEM 47 and very competent instruction at that. An educated governing class and an instructed wage-earning class is the ideal aimed at and in part realised. But we would not dream of libelling Whitehall by suggesting stupidity. They are no fools, the Morants and Holmes'. They never give the game away. How do they do it ? Never in black and white ; there is nothing in the printed word to which the most ejcacting democrat could seriously object. Whitehall learnt its lesson from Lancashire. The deciding factor in Lancashire in turning out fine counts is atmosphere ; the dominant element in our schools is also atmosphere — the impalpable influence constantly brought to bear upon the child that, when it has passed a certain standard or reached a certain age, it will be permitted by a gracious Government to go out into the world and become a wage-earner. Is that the atmosphere at Eton or Harrow, Rugby or Marlborough, Clifton or Malvern, Westminster or Charterhouse ? In those ancient foundations will be found the g:oveming atmosphere ; there the children are taught how they can live most effectually, by means of the wage system, upon the exploitation of the future labour of the millions of children in our county and borough schools. Are we not, however, forcing an open door ? Is it not evident that all our so-called democracies. Great Britain, the British Colonies, France, Switzerland, the United States, are vitiated by the absence of equality, which is the basis of democracy ? Mr. William English Walling, in hir admirable book. Socialism As It Is, remarljs : " Not only do classes defend every advantage and privilege that economic evolution brings them, but, what is more alarming, they utilise these advantages chiefly to give their children greater privileges still. Unequal opportunities visibly and inevitably breed more unequal opportunities." Now it has been recognised bv Socialists for the last thirty years that equality is a 48 NATIONAL GUILDS mirage, so fax as the present generation is concerned. " But," they cried in their despair, " at least give our children equality of opportunity." We now see that, from its bhth and on through its schooldays and so into the workshop, the child of the wage-earner is denied equality of opportunity. The equality is a dream ; worse, the opportunity is so exiguous as to be practi- , cally non-existent. Can it now be denied that the proscription of the wage-earner is rendered inevitable by the wage system ? All existing political democracies have the same thing in common — the wage system — and all betray the same symptoms of democratic unreality. The spectacle of plutocratic Britain posing as a democracy is grimly humorous, but there are historic reasons. The manu- facturers of Lancashire and Yorkshire (white rose and red rose combined), having acquired great wealth, desired political domination. To secure this, they had to call into political existence a new electorate to balance the old. They accordingly fought for the extended suffrage which was won in 1832. But whilst willing to wear the halo of saviours, of their country, they naturally expected their employees to vote for them with the same fidelity that the landlords' tenants voted for their feudal lords. It was war to the death between the feudal and wage systems. The result was, of course, inevitable. But the factory lords had no intention of establishing equality between themselves and their wage slaves. Just as slave emancipation, leading to political emanci- pation, became a political necessity to Lincoln and his associates, so the political emancipation of the wage- earners became a necessity to the commercial magnates of our manufacturing centres. And just as the American politicians successfully nullified political emancipation by imposing a brutal wage system upon " the land of the free," so precisely did the commercial magnates proceed DEMOCRACY AND THE WAGE SYSTEM 49 in Great Britain. They brought to bear upon the dis- contented workman all the influence that their wealth gave them ; the churches, which they handsomely sub- sidised " to the glory of God," were easily brought into line — John Ball was dead ; the landed gentry soon dis- covered upon which side their bread was buttered, and acted with characteristic discretion ; the Universities took their cue from church and squire ; the Army and the Navy were " sound." Is it any wonder that, in such circumstances, the workers were successfully enmeshed in the wage system and rendered politically powerless ? How vividly suggestive is the coUoqtiialism that stUl persists : the workman " knows his place." , ! From these conditions, historic and economic, flows a conclusion : In all the political democracies there are two classes of citizenship — the active and passive. The active citizen derives his authority from his economic position ; the passive or subdued citizen is the wage-earner, who is inevitably passive bepause he is caught and choked i^ the wage system. The existence of a political Labour Party does not in the least invalidate this conclusion. For two reasons : because political Labourism accepts the wage system and is, therefore, de facto, passive or sub- dued ; and because it only gains its foothold in Parlia- ment by the complaisance of Liberal capitalism. If our Labour leaders deny the truth of this contention, they can easily test it. Let them discard their present meliorist programme and imdertake a frontal attack upon the wage system. They will very speedily make some interesting and fruitful discoveries. II The prevailing conception of democracy suffers from a fatal defect : it assumes that universal suffrage spells 50 NATIONAL GUILDS equality, admittedly the basis of democracy. If, so runs the argument, every man has the vote, he must be a citizen, equal with other citizens, and if the electorate chooses to maintain the existing order of society, then it follows that society is democratised ; in short, that the master's ballot paper is no whit more powerful than the servant's. This' idea was so enticing that Mr. Andrew Carnegie, of Homestead, near Pittsburg, Pa., wrote Tnump;anU Democracy. (Incidentally, he wrote it before the Homestead massacre.) But the argument completely ignores the conditions precedent to the casting of the vote — and it is those conditions that settle the question whether our democracy is social, that is real, or whether it is a political abstraction. In the course of our inquiry into the wage system we have discovered that economic power must precede political power ; also, that the wage system is the negation of democracy. If, therefore, in the social structure of the nation, we find that the majority of the voters, or citizens, possess'political power without any corresponding econo- mic power, it is evident that real control must rest with those who are economically strong enough to impose their will. Ex hypothesi, it becomes evident that the struggle for social democracy must be fought out in the economic and not in the political province. But, in- asmuch as the wage system nullifies social democracy, it is clear that the struggle for economic power can only be waged on equal terms after the wage system has been destroyed. Need we add that the practical issue from these facts is that in fighting for the abolition of the wage system. Socialists, democrats and trade unionists meet on common ground and are faced by a common enemy ? We have seen that the existence of two main divisions of society (however sub-divided) — the possessing classes and the wage-earners — creates two types of citizenship, the active and the passive, which accurately respond to DEMOCRACY AND THE WAGE SYSTEM 51 the power, qualities and psychology of the two economic divisions. Vote or no vote, what actually weighs in society is the power to exploit. " Money talks," is the way this truth is phrased in democratic America. In that austere Republic no pretence is made that the wage- earners are entitled to any consideration. The deter- mining factor is Wall Street and not the American Federa- tion of Labour. Indeed, Mr. Samuel Gompers, the head of that important Labour organisation, has only just escaped twelve months' imprisonment for upholding the elementary rights of trade unionism. But' the passive quality of the wage-earners' citizenship is seen more clearly in New Zealand, a British Colony famous for , its " Sociahstic " experiments. Was not the late Richard Seddon the democrat and Socialist par excellence ? Did he not receive a royal welcome by the Fabian Society when he came to London ? If anywhere, then, our theory of active and passive citizenship should receive its quietus in New Zealand. Tell the New Zealander that he is a wage slave arid he feels insulted. He wiU in- dignantly declare that nowhere in the world is the dignity of labour more respected. And he is perfectly right. But what does it amount to ? Are there any indications that the citizenship of the wage-earner in New Zealand is being transformed from passive to active ? Let us see the effects of that social legislation upon which New Zealand prides itself. Compulsory arbitration has un- doubtedly strengthened the employers against their employees. Mr. William Pember Reeves, the framer of the Act, has told us that its first object was to put an end to the larger and more dangerous class of strikes and lock-outs. The second object was "to set up tribunals to regulate the conditions of labour." In other words, as effectually as possible to perpetuate the wage system by means of regulation. Mr. MacGregor tells us that in this it has been completely successful. 53 NATIONAL GUILDS The law allows it and the Court awards it. Thus, in 1906, the Chief Justice of New Zealand, not of Russia, in deciding a case, said : " The right of a workman to make a contract is exceedingly limited. The right of free contract is taken away from the worker, and he has been placed in a condition of servitude or status, and the employee must conform to that condition." So much for compulsory arbitration in New Zealand. It has crystallised the wage system into what the Chief Justice calls " servitude." Now for the economic con- dition of New Zealand. " It must be admitted," write La Rossignol and Stewart, " that the benefits of land reform and other Liberal legislation have accrued chiefly to the owners of land and of other forms of property, and the condition of the landless and propertyless wage- earners has not been much improved." Another writer, Mr. Clark, rernarks : " The general welfare of the working classes in Australasia does not differ widely from that in the United States. . . . There appears to be as much poverty in the cities of New Zealand as in the cities of the same size in the United States, and as many people of large wealth." In other words, democracy is as illusory in this young colony as it is in America or Great Britain. And, of course, for the same reason : the wage system is common to all. It i^ certainly a striking instance of active and passive citizenship operating in a political democracy. We know how Labourism swept New Zealand under Seddon. We now know that Labourism, built upon the acceptance of the wage system, produces with ftracti- cally no variation active and passive (or subdued) citizenship. It is the same in Australia, where a Labour Government is actually in office but not in power. Let us quote C. E. Russell : " Hence, also, the Labour administration has been very careful not to offend the great money interests DEMOCRACY AND THE WAGE SYSTEM 53 and powerful corporations that are growing up in the country. Nothing has been done that could in the least disturb the currents of sacred business. It was recog- nised as not good politics to antagonise business inter- ests. ... It was essential that business men should feel that business was just as secure under the Labour administration as under any other." Mr. Russell also tells us that in this happy democratic commimity the working classes are no less exploited than before. Mr. Dooley remarked that he didn't care how the people voted so long as he did the count- ing. The active citizens may as truly say that they don't much mind if passive citizenship becomes a par- liamentary majority, so long as it remains passive by entanglement in the wage system. Politics is largely a question of psychology. Economic subjugation brings in its train certain definite psycho- logical results, which, in their turn, colour and dominate politics. Now the lesson to be learnt from Australia and New Zealand is plainly this : That'poUtical power cannot he transmuted into economic power. It is as impossible a transformation as to turn a sow's ear into a silk purse. If the sow's ear none the less contends that it is actually a sUk purse, and " puts on airs according," it neverthe- less remains a sow's ear. There is a familiar axiom in Euclid to the same effect, With the examples before us of every political democracy in the world, is it not high time that we ceased to believe in the claims of the politicians to be our economic arbiters ? Is it not abundantly clear that a community, four-fifths of which is rendered servile by the wage system, cannot possibly slough off the psychology of servility and claim to be a community of free men politically whilst remaining servile economically ? Thus we discover that the dis- tinction between active and passive citizenship is one of substance and profound significance. Wherever the 54 NATIONAL GUILDS wage system exists the same psychological phenomena appear. There is absolutely no exception to the rule. Now the principle of activity is life; of passivity, absence of life, inertia— in the spiritual sense, death. Is it the fact, then, that the wage system produces social inertia and spiritual death ? Let us remind our readers that the classical economists as well as the employers regard labour as a commodity. Thus, if John Smith engages to work for wages for William Brown, the two parties to the contract have a totally different conception of the spiritual values of the transaction. Brown buys what he regards as a commodity ; but Smith sells something that to him is more than a commodity — ^he seUs his life. But just as you cannot eat your calcp and have it, so you cannot sell your life and yet retain it. Brown has Smith in his pocket because Smith's life is in Smith's labour, and the life, having gone into the labour, leaves Smith inert, lifeless, spiritually dead: Whatever the politicians may tell him, he is inevitably a passive citizen because, in the guise of a commodity, he has sold his life. Every week he sells it ; every, week he and his family mount the altar and are sacrificed. How different is it with Brown ! He not only possesses his own soul, but has Smith's in addition. Smith's life enters into Brown's at breakfast, lunch and dinner. The price that Labour pays for enduring the wage system is Its own soul ; the political sequel is passive or subdued citizen- ship. And even though the Smiths sit on the Treasury Bench and put on the airs of the master, they cannot escape from their economic subjugation, with its correlative civic passiveness, if they remain content to sell their brethren into the servitude of the wage system. DEMOCRACY -AND THE WAGE SYSTEM '55 III It must now be obvious that passive citizenship is inconsistent with a true conception of democracy. If the economic integration of society leaves the active citizens in control of the essentials of life, it follows that the passive citizens (tied hand and foot by the wage system) must remain in servitude, and therefore demo- cracy is nullified. The moral is too clear even to be cavilled at : economic power is different in kind and substance from political power. It is not a case of varying degrees of the same power, hke the high and low voltage of electricity ; economic and political power spring from altogether different sources. This is the real answer to the thousands of inquiries now anxiously made into the failure and futility of the Labour Party. That group of honest but stupid men is obsessed with the belief that the conquest of political power carries in its train the conquest of economic power. It is a tragic delusion — as tragical as a bankrupt manufacturer trying to reorganise his factory and his affairs by becom- ing an adept at stamp collecting. A prosperous manu- facturer may, appropriately enough, collect stamps or pictures or brasses or china, but his capacity to do so is derived from his economic power, that is, his power to exploit labour by keeping labour inside the limits imposed by the wage system. We hear from time to time of some collector who becomes so absorbed in his hobby that he neglects his business and finally involves him- self in ruin. When he explains to his creditors that the trouble arose from his devotion to intaglios, they do not applaud him for his noble pursuit of the beautiful or the curious, and wish him god-speed in his artistic activities. On the contrary, they send the priceless collection to the auctioneer and seize the proceeds. They also seize the 56 NATIONAL GUILDS bankrupt's factory and everything else he possesses. Exit the bankrupt, who may even be forced into the ranks of the wage-earners and so changed from an active to a passive citizen. Thus is prosperity taught that, before it orders its Ufe on lines of amenity and beauty, it must make its economic position secure. But the pity of it is that Labour will not learn this obvious lesson. Politics is the science of social life. But social life, be it beautiful or ugly, springs out of the prevailing economic conditions. If the essential factor of these economic conditions remains unchanged, social hfe cannot be modified to any degree inconsistent with the essential economic factor, precisely as the manufacturer cannot indulge his hobbies beyond his means. The essential economic factor is the wage system. Thus we witness the tragical spectacle of the Labour Party vainly striving to change the form of social life without transforming the essential economic factor — the wage system. Mr. Keir Hardie is the first man in the Labour Party who ought to understand the true meaning of the wage system. He is a miner by extraction. Let us, then, tell him the Etory of-the checkweighman. Just before the time that Mr. Keir Hardie was shaping his infant mind into the Liberal mould, his mining hero, Alexander Macdonald, had engineered a valuable reform in the mining industry. The miners were paid so much per tub or hutch sent to the surface. But they were perpetually victimised by unscrupulous coal-owners, who arbitrarily deducted from wages for tubs that were alleged to be improperly filled. The miner was completely at the mercy of the employer or his agent, and had absolutely no check upon the weight of his own coal production. Accordingly the men claimed the right to appoint one of their own colleagues to act for them at the pit's mouth and check the weights. In' 1859 there was a series of strikes to effect this object, and several large collieries DEMOCRACY AND THE WAGE SYSTEM 57 conceded the boon. The South Yorkshire Miners' Union next tried to insert a clause in the Mines Regulation Bill, making the appointment of a checkweighman com- ptilsory. After a considerable parliamentary struggle, the Act of i860 empowered the miners to appoint their own checkweigher, the choice being confined to persons actually employed in the particular mine. It was a real victory for the working miners : not a political victory, be it noted, but an economic victory, because it might have paved the way for further democratic encroach- ments upon the wage system. It was a germ that, had it been allowed to develop inside the economic sphere, might have changed the history of the wage system throughout the world. It was a breach in the capitalist fortress. On this fotmdation the wage-earners might have built a considerable structure of joint control. If it was right and fair to check the output, it was equally right and fair to check the selling prices, for they also bear upon wages. It was equally equitable for the men's representative to check the transit rates, to check, in short, every item that adds to the cost of management — for that also bears upon wages. The employers were alive to these possible developments ; the men were blind to them. The employers promptly proceeded to put every obstacle in the way of the men's checkweighman, some serious, some trivial, ^11 irritating and distracting. Thus Normansell, a checkweigher at Barnsley, was promptly dismissed, and two years' litigation followed. For twenty years the coalowners devised dodges to hamper the work of the men's representative. Sometimes he was refused close access to the weighing-machines ; sometimes the weights were fenced up so that he could not see them ; his calculations were constantly disputed, and generally his interference was resented. Finally, as we know, the Act of 1887 gave the checkweigher all necessary power. To-day he remains a mere adjunct to the system of wage- 58 NATIONAL GUILDS calculation— useful, no doubt, but now of no signifi- cance. . , How is it that this victory remains an isolated inci- dent in the struggle between masters and wage-earners ? How is it that the men did not proceed to widen the breach ? There are two reasons : {a) because it had not been revealed to the men that the real enemy was the wage system, which they superstitiously believed to be not only inevitable but justifiable ; (b) because, under the guidance of Macdonald, Burt, Fenwick, Pickard, Cowie, and others, they were already looking to politics to accomplish for them that which we now know is beyond the power and province of politics to achieve. The sequel is sad and disheartening. The checkweigher, instead of strengthening himself inside the economic organisation, became the union and political organiser in his own dis- trict. In this way, in the course of time, the well-organ- ised miners were enabled to send a small squadron of their members to Parliament, where they are now affili- ated to the devitalised or passive Labour Party. Burt and Fenwick are openly allied to the Liberal Party ; the others are Liberal in all but name. Meantime, real wages have fallen, and strike after strike has ended in fiasco. Even now apparently they have not yet learnt the simple truth, that in no conceivable circumstances is it possible by political means to change passive into active citizenship. Once again we reiterate the obvious : there is only one way to achieve such a transformation : first, we must destroy the wage system ; second, v\(e must build upon its remains a Guild organisation that will combine industrial democracy with communal solidarity. Having at length realised that the wage system is the one great barrier against human emancipation, we now understand why the work of the great liberators and revolutionists has been rendered nugatory. It is not for us to depreciate the labours and heroic struggles DEMOCRACY AND THE WAGE SYSTEM 59 of the great Europeans, who toiled and moiled for liberty. Kossuth, Mazzini, Swinburne, Taylor, the Chartists,- Feargus O'Connor, Lloyd Garrison, Whittier, Lam- menais, and Lacordaire, even Lassalle (who, however, visualised the revolution through politics) — ^these great names, and a cloud of others, not forgetting the phil- osophers, artists and musicians, who dreamt of human liberty and worked for it, each in his own medium, were they now to awake from their sleep would find that their great tradition is dead. They would discover to their dismay that the democracy of their hopes is submerged in the dreadful servitude of the wage system. VIII POLITICS AND THE WAGE SYSTEM In discussing the Great Industry and the Wage System we remarked of the Labour Party that " it made a great cry but brought back no wool." The Labour Leader retorted upon us that " the strike yields more noise than wool," and then impenitently adjured the working classes " to aim at the peaceful conquest of political power," because it believes that method to be the only way to establish industrial democracy. It proceeds with unction to impress the wage-earner with the sorry results of recent strikes. Then, in a moment of inspiration, it goes on : " The strike will not of itself take the toilers very far on their road to liberty, though it may powerfully stimulate the sluggish action oj the House of Commons." Then, apparently uneasy at making such a significant admission, it adds to a series of monumental misstatements : " The railwaymen had a strike ; in so far as they gained anything, it was by parliamentary intervention. The miners had a strike ; in so far as they gained anything, it was by parliamentary intervention. The transport workers have a strike ; if they gain anything, it will be by parliamentary inter- vention." The issues are here clearly joined. Let us examine the contentons of this obviously inspired article. 6g POLITICS AND THE WAGE SYSTEM 6i _ (i) " The railwaymen had a strike ; in so far as they gained anything, it was by pariiamentary intervention." It does not seem to have occurred to the scribe who penned this extraordinary assertion that there would have been ho pariiamentary intervention had there been no strike. In so far, therefore, as-the men gained any- thing it was primarily due to the strike. At the very least, it " stimulated the sluggish action of the House of Commons." But did the railwaymen gain anything by pariiamentary intervention ? It is common knowledge that the politicians, led by Mr. MacDonald, robbed the strikers of the fruits of their victory. The best evidence of that is that they are seriously considering the advisa- bility of another strike. They know perfectly well that they will get nothing without a strike. And, further, next time they strike, they will keep Mr. Mac- Donald at arm's length. (2) " The miners had a- strike ; in so far as they gained anything, it was by parliamentary intervention." This is Mr. MacDonald's reply to Punch's cartoon, where he is represented as locked outside the miners' conference room. It is true, however, that Mr. Mac- Donald finally squeezed through the door. With what result ? The miners were humbugged by the Labour Party and sold by the Government. If they had kept Mr. MacDonald out of their conference room to the. bitter end, they would have done far better than they did. In any event, had there been no strike, there would have been no parliamentary intervention. In so far, therefore, as the miners gained anything, they gained it primarily through the strike. (3) " The transport workers have a strike ; if they gain anything, it will be by parliamentary intervention." Observe the use of the present tense. Let us state the case correctly : " The transport workers had a strike. They gained a substantial victory by rigidly excluding 62 NATIONAL GUILDS the politicians. They now have a local strike. The politicians are striving very hard to impose compulsory arbitration and to tie the men down by a heavy financial forfeit. The men will be fools if they let Mr. MacDonald have anything to do with their affairs. In any event, it is admitted that parliamentary intervention cannot possibly give the men anything more than was gained by their strike when they wisely let the politicians stew in parliamentary juice." Thus we see that the instances cited by the Labout Leader prove conclusively that " the conquest ' oi political power," so far from strengthening the wage- earner economically, is only a disastrous source of weak- ness. But it is no part of our case to justify any ol these strikes. Whether they succeeded or failed is im- material to the argument. They were symptoms of the class struggle rather than a conscious effort to end the class struggle by smashing the wage system. The par- liamentary Socialists have some grounds for " theii assertions that strikes are unsuccessful. But they are unsuccessful because they have no objective. That, how- ever, is by no means the whole story. The Labom Leader makes two significant admissions : it admits that strikes stimulate the sluggish action of the House oi Commons ; it admits that strikes precede parliamentary intervention. In fact, it gives away the whole case foi political action. Had there been no railway strike, Parliament would have done nothing ; had there been no miner's strike. Parliament would have done nothing ; there was a successful transport strike and Parliament did nothing. In other words, when Parliament essayed to do something, it found it could do nothing ; when it consciously did nothing,- then and only then did the wage- earners gain any substantial benefit. Further, it must be remembered that the railwaymen are just as much transport workers as the other transport workers. Why POLITICS AND THE WAGE SYSTEM 63 did they not all strike at the same time ? The answer is simple : because the railwdymen "were under political influences which benumbed their freedom of action, with the result that the non-political transport workers won their victory, whilst the political railwaymen, thanks to the Labour Party, gained practically nothing. We shall, in due course, consider the precis^function of the strike as an instrument of economic emancipa- tion. It is first necessary to reiterate and emphasise the cardinal fact that economic power is different from and entirely independent of political power. Let us focus our conclusions so far as we have got. In oiir first chapter we affirmed that " there can be no emancipation save only from the wage system." In our'Second chapter we traced the origin of the I.L.P. and discovered that its policy was meliorist, and in consequence (necessarily accepting the wage system as the basis of its activities) it had completely failed to arrest the fall in real wages ; that postulating the continuance of the wage system, the I.L.P. had also to postulate the continuance of rent, interest and profits. In our third chapter we demonstrated how the development of industr/had finally killed out any oppor- tunity for even the ambitioiis workman to pass otit of the entanglement of the wage system, and proved that economic power must precede political power. In our fourth chapter we prgved conclusively that State ownership, involving the continuance of the wage system, strengthens rent and -interest, and leaves the workman practically no better off, because he remains in bondage to the wage system. In our fifth chapter we showed that labour could no ■ longer carry the handicap of rent, interest and profits, and that the only way to shake off the burden was to stop the exploitation of labour by the substitution of private capitalism by National Guilds. 64 NATIONAL GUILDS In our sixth chapter we demonstrated that unen ployment is an integral part of the wage system, and ths aU schemes to aboHsh unemployment whUst retainir the wage system are doomed to failure. Then followed three chapters in which we prove that all political democracies whose economy is base on the wage system, so far from emancipating labou leave it in economic servitude. We further proved th; mere poUtical citizenship signified nothing, because tl possessing classes evolved an " active " type of citizei ship and the wage-earning class evolved a " passive type ; that, in short, the maintenance of the wage systei defeated the theoretical claims of the classical dem< crats, producing material and psychological resuli peculiar to a servile state. The central argument is plainly this : that econom: methods are essential to the achievement of econom: emancipation ; that political methods are useless, b( cause all political action follows and does not precec economic action ; that economic power is the substanc and political power its shadow or reflection. Labou therefore, in seeking first the conquest of political powe is grasping at the shadow and leaving the substanc untouched. II It is at least curious that those who intellectually n main entangled in the wage system also remain entangle in the political system. If you cannot see through tl real meaning and intent of the wage system, you cann( see through the essential bankruptcy of politics as unde stood to-day. This is only another way of saying thi politics are used by the meliorist to ameliorate the harshi conditions of wagedom — to ameliorate, never to abolis As we have already proved that economic power preced POLITICS AND THE WAGE SYSTEM 65 r political power, it follows that the pursuit of politics cannot fundamentally transform the economic con- ditions. The title-deeds remain with the possessing classes. But the real struggle is to obtain them. The most that politics can do is to modify the conditions that surroimd the title-deeds. Thus the Fabian programme, inspired by Mr. Sidney Webb, never hints at effective expropriation ; it would humanise factory conditions, lay stress upon public health, mitigate destitution, reduce the hours of labour, impose a minimum wage — any- thing and everything save the iniperative thing, which is possession and control of the meaTns of national and individual life. But we have further discovered that all these measmres; each in its own way, actually strengthens the grip of the possessing classes and yet more securely validates their claims to the title-deeds. Parliament, by means of factory Acts and regulations, humanises the conditions offactory life. The result is that labour grows more efficient, and consequently more efficiently produces surplus value and more of it for the holders of the parch- ments. The same effect is produced by improving the public health. It is good economy, operating in the interests of those legally and socially permitted to exploit labour. It is much more remunerative, and infinitely more pleasant, to exploit good human material than incompetent human material. The mitigation of destitution is also good economy for those who can benefit by it. A minimum wage, as we have shown time and time again, has precisely the same effect ; it justifies the exploiter in rejecting damaged human material and exploiting only the best available labour. To this indictment of social reform there is absolutely no answer. Nor can the politicians explain away not merely the relative but the actual decline in wages, notwithstanding a generation of social reform. The Insurance Act will obey the same law. It is a very good thing for the 5 66 NATIONAL GUILDS employers. Who then can doubt that it is worse than foolish, it is criminal, to look to the political machine to abolish the wage system ? Foolish, because it is a blunder ; criminal, because it is one of those blunders that are crimes. A striking instance of the truth of these contentions is found in the engaging personality of Mr. George Lansbury, M.P. Here is a little sketch of him which we read in the press : '' " For a time Mr. Lansbury was hon. secretary of the Liberal Association for Bow and Bromley, and he has told that what first impressed him with ' the necessity for something more than orthodox politics ' was this : 'When canvassing in one of the very poor districts of Bow a woman came to the door dressed only in a sack. A hole had been cut at the top, and two slits at the side served for the arms. She asked ihe, with an oath, what was the good of a vote for her and her unemployed husband when every scrap of their clothing had been pawned ; there was not a piece of furniture in the place, and nothing but starvation stared them in the face ? With all the scorn she could command she bid me clear out. That incident pulled me up at a halt, and from that day to this I have tried to study the condition of the people and to find out how politics could help the workers towin social justice.' It was this little incident, Mr. Lansbury said, that really drove him out of the Liberal ranks into Socialism." / Impersonally considered, this little story is a synopsis of opportunist Socialism during the past thirty years. We ask Mr. Lansbury to tell us in what way has his devotion to politics emancipated this unhappy woman ? Mr. Lansbury realised that " something more than orthodox politics " was needed to meet such a desperate case. What is that " something inore " ? Has he achieved it ? Can he achieve it in the political sphere, if it be " something more than orthodox politics " ? We can rely absolutely upon Mr. Lansbury's honesty POLITICS AND THE WAGE SYSTEM 67 of ptirpose, and accordingly we invite him to tell us what he conceives that " something more " to be. The information he could give on this point would be a most valuable contribution to our present inquiry. And, at the same time, would Mr. Lansbury tell us how it would be possible to emancipate the woman in the sack without disturbing the existing wage system ? The woman in the sack, like Markham's " man with the hoe," is a portent, a symptom, and a symbol. What has she to do with politics or politics with her ? Is her condition, aufond, political or economic ? That the Labour Party is safely " orthodox " is proved beyond cavil in a book recently issued by Mr. J. M. Robertson, M.P., entitled The Meaning of Liberalism. This official Liberal tells us that " the Labour Party has exercised a useful forward 'pressure on the Liberal Party, and in so doing has been an invaluable ally of the' Radical section. The practical ideal is that this pressure should usefully continue." We must have said something like this at least a thousand times, but we were supposed to be prejudiced against the Labour Party, and were not, therefore, believed. Mr. Robertson knows. Will Mr. Lansbury explain ? Now let us consider the situation in which the Labour Party necessarily finds itself as " an ally of the Radical section." It can be found in Mr. Robertson's book. We come to the bones of the business, however, when Mr. Robertson assures us that " production for profit will assuredly continue for centuries, profit being not merely the condition of the furnishing of liquid capital, but the test of industrial efficiency. Fluid capital is about as far from the stage of collective management as the tides. Society will in the near future- deal with capital as it deals with marriage and the family — not communalise it, but prescribe for it legal conditions. And the capitalist class will share in the framing of the 68 NATIONAL GUILDS conditions." What does this mean in plain terms ? That the wage system will continue for centuries ; ^ that rent, interest and profits must indefinitely continue ; that fluid capital cannot be communalised. To a party holding such views, the Labour Party, including Mr. Lansbury, are allied. Please observe how admirably the coalition works out. The Radicals, as we have seen, do not believe in any fundamental econo- mic change ; they are content to " prescribe the legal conditions." With them, politics has nothing to do with the economic structure of society. If, therefore, they can keep the Labour Partyin line with their schemes of social reform, all goes well. But to the Labour Party, which declines to tamper with the wage system and seeks only what politics can give it, this alliance is equally acceptable. Thus it comes about that those high-souled and immaculate Scotsmen, J. M. Robertson, M.P., and J. R. MacDonald, M.P., can with a clear conscience pursue their petty political careers, what time wages are falling and Mr. Lansbury is sadly pondering " the something more " and the true meaning of " unorthodox." Ill We left Mr. Lansbury, M.P., vainly seeking the economic pea under the political thimble, and troubled in spirit because he realised that " something more than orthodox politics " was required. If " something more " is needed it seems to follow that politics does not suffice. We commend to Mr. Lansbury the words of Browning : " Oh ! the little less and what worlds away ! " Now Mr. Lansbury represents a train of sentiment — sentiment, not thought — that feels deeply, and even bitterly, the tragic industrial situation, and is willing to fight and struggle for economic emancipation. It is a sentiment that POLITICS AND THE WAGE SYSTEM 69 has been nurtured in politics and finds it exceedingly difl&cult to conceive any alignment of the democratic and industrial forces on any other plane. Mr. Lansbury accordingly finds himself beating the air as a unit of the Labour Party, but unhappy and distracted that nothing is done. Probably he still has hopes that through the instrumentality, of politics something even yet may be accomplished. The delusion will, of course, persist until Mr. Lansbury and his congeners realise the plain fact that economic power must precede political power ; that to strive for economic power through politics is as foolish as looking for figs on thistles. We have proved that in- dustrially politics are inevitably and perennially sterile. Their function is not industrial ; their origin is not industrial ; when they enter the industrial world they become amateurish and ridiculous. Why cannot Mr. Lansbury see and realise these simple and fundamental facts ? In recounting the story of the woman dressed in a sack, Mr. Lansbury told us that the lesscin he learnt was the inefficacy of "orthodox politics " as a remedy for such a horrible state of affairs. A quarter of a century has sped its course, during which time thousands of Sqcialists have sacrificed time, money, and the amenities of life to " unorthodox " politics, in the hope and expec- tation that such an episode should never recur. Vain hope ! A few days after we had penned our criticism, the Daily Chronicle appeared with a column crossheaded thus : ' STARVING IN THE EAST END " Baby Wrapped in Paper for Lack of Clothes " Man Dressed in a Sack " It will, of course, be said that all this is abnormal because of the strike. It is not abnormal ; it is merely more dramatically visible. Just as nations — Germany and 70 NATIONAL GUILDS Great Britain, for example— are really carrying on a warfare by means of excessive military and naval expendi- tiu-e, even though not a shot be fired, so in like manner is the industrial war ever with us, strikes or no strikes. Its victims suffer in obscurity, die and disappear, an appalling death-roll every year. " The Woman in the Sack " a quarter of a century ago is own sister to " The Man in the Sack " of last week. What is the family bond uniting them ? The wage system. Both are the victims of an industrial organisation that is spiritually and economically based upon the wage system. The " woman in .the sack," living and dying in the obscurity of a slum, was a piece of human wastage thrown upon the wage system's scrap-heap; the " man in the sack" is sacrificed in precisely the same way by those who control the wage system. It is the g!-im reality of industrial facts such as these that makes us so impatient of the Labour Party. We are continually being asked why we criticise it with such sustained hostility. " Surely," says the Lansbury type, " something can be made of it, some good can come out of it ? " Let us, as briefly as possible, define our attitude towards the Labour Party. First, then, let it be noted that even its most fervent apologists admit that it has failed to come up to their expectations ; it has not " made good." We have ex- plained that it could never hope to do so because it relied upon politics to do what politics are inherently incapable of doing. Fundamentally, therefore, we cannot find any contact with it. Nor is this a purely theoretical objection. Those who have been associated with the Socialist move- ment for fifteen or twenty years will vividly remember what high hopes were based upon the political adventure. At long last something effective was to be accomplished for the emancipation of the wage-earner. A feeling of revolution, of far-reaching and beneficent change, inspired thousands of men and women. They " saw distant gates POLITICS AND THE WAGE SYSTEM 71 of Eden gleam, and did not deem it was a dream." An army of tortra-ed wage-slaves put their faith in the Keir- Hardie-MacDonald combination ; they freely sacrificed time, effort, and money to achieve the great end. They are now fast realising that they have been dosed with quack remedies by quack doctors, and the awakening is very bitter. So bitter, indeed, 'that even now the vast majority of the political labourists, although conscious that their disease is worse than ever, still cling to their old medicine men and turn fiercely upon their critics. There is a curious psychological relation that springs up between doctor and patient. The more the doctor botches the case, the more does the patient believe in him. There are thousands of doctors who play upon this faith by giving their patients bottles of innocuous medicine. If a doctor said to his patient : " You do not want medicine ; you require a regular shaking up of your habits of life, your diet, your sanitation, your hours of work, your exercise ; you are in a thoroughly unhealthy condition," the patient would probably plaintively say : " But, doctor, aren't you going to give me any medicine ? " There are honest doctors who stand firm and decline. Their practice suffers in consequence. It is unfortunately true, however, that the vast bulk of the profession honestly believe in drugs, to the inevitable deterioration of the health of the com- munity. The medicine men of the Labour Party are in this position. They do not face the evils obviously arising out of the wage system, or tell their patients that these diseases must continue so long as the wage system con- tinues. They drug the symptoms and leave the cause severely alone. They prescribe political pills for econoraic earthquakes ; they put political salve on the economic cancer. When we remember all the human effort, emotion, faith, and sacrifice that have gone to the upbuilding of the Labour Party, is not the result a mockery, a scandal, a tragedy ? 72 NATIONAL GUILDS Just as the medical fraternity permits no criticism from the lay population, so this political fraternity of medicine-men resents any kind of outside criticism. They listen and sometimes act upon the advice of some friend who is " sound on the goose " ; criticism from any other source is rank impertinence and not to be tolerated. The morale of the Labour Party in this respect is deplorable. It has steadily shed its serious and thoughtful supporters, with the result that it does not possess a single man of any intellectual distinction. To be in the company of Labour members is to be in the company of American political bosses. Their attitude towards life, their political vocabulary, their methods, are significantly similar. Now no great association of men, political, religious or social, can be effectually held together without some spiritual or intellectual basis. Merely to exist upon the day's oppor- tunities is to court ultimate destruction. To take the long view requires both moral courage and mental strength. In this respect the Labour Party fails. It shrinks from the discussion of essentials, largely because it has no essential principles. Compare, for example, its treatment of that new element in the Labour movement which we vaguely term SyndicaUsm with the approach made to it by Jaur^s. The French Socialist leader knows the dynamic power of ideas ; the Labour Party shuns new ideas Uke.the plague. Spiritual and intellectual conflict is the food upon which great souls thrive. We fear it is too strong nourishment for the Labour Party. We would certainly relax our critical attitude towards it if only it would betray some kind of intellectual appreciation of ideas and principles. We do not ask it to agree with us ; we only ask that it should explain intelligently the faith that is in it. But every moral and intellectual test that we apply to the Labour Party proves it to be amorphous, and utterly unresponsive to serious criticism or suggestion. IX THE ECONOMICS OF THE- WAGE SYSTEM We have now travelled rapidly round the wage system and examined its effects from all sides. We see that the great obstacle standing in the way of economic emanci- pation — the economic must precede the social — is the wage system. Yet the idea of wages has so penetrated the minds of people that we still find it difiicultto con- vince them that any social and industrial system is possible without wages in some form or another. So was it in the Southern States of America before the war. " Slavery must exist in some form or another ; there are the slaves, what else can you do with them ? " Yet the status of slavery was abolished. To-day, men of good will are saying in varying accents very much the same thing : " the wage system must exist in some form or another ; there are the workmen, what else can you do with them ? " Even such practised writers on social" economics as Beatrice and Sidney Webb seem incapable of grasping any economic change that would abrogate the wage system. Thus, in their recent articles in the Daily Herald on Syndicalism, they go to considerable pains to prove — unsuccessfully — ^that Syndicalism would merely exchange the wage system for something so like it as to be practically indistinguishable from it. They conjure up a massive and tyrannical 73 74 NATIONAL GUILDS Syndicalist bureaucracy whose authority would transcend anything ever suggested by Fabian Socialists. We are not Syndicalists, but National Guildsmen, and in a certain sense our withers are unwrung. Nevertheless, recognising as we do that half of our social theory is Syndicalist, we cannot afford to let this criticism pass unchallenged. The cardinal fact in the discussion is simply this : Mr. and Mrs. Webb and the cult they inspire decline to accept the common meaning of the term " wages." Anything the worker brings home, be it money oi: token conveying so much power to consume, is to them wages. It does not matter to them that the conditions which enable a working miner to bring home " thirty or fifty or seventy shillings " have anything to do with the question. It is, they think, simply hair-splitting to call them anything else but wages. Twenty years ago, there was no Socialist leader who more strongly insisted upon clearly defined terms than Mr. Sidney Webb. He recognises that the problem of wages is immensely important ; he has been writing upon wage conditions for almost a generation : does it not occur to him that a clear definition of wages is a condition precedent to any serious discussion of the subject ? If, during the slavery debates, some pretentious thinker had argued that slaves were, after all, wage-earners, their wage being their housing and their rations, the Sidney Webb of that period would have been the first to castigate the man for not mastering the plain meaning of clearly understood terms. The term wages ought to be the most accurately defined and most clearly understood word in the language. Our means of livelihood constitute the foundation not only of our economic and social existence, but also of our spiritual conception of man's dignity and destiny. The psychological effects of the wage system are the true THE ECONOMICS OF THE WAGE SYSTEM 75 measufe of its degrading influence upon our n9,tional life ; yet, naonstrous though it be, there do not appear to be half a dozen thinkers in the land who take the trouble accurately to understand the real meaning of wages, to say nothing of its thousand implications. At the risk, then, of wearying our readers, we must try to define the real meaning of wages. We have already done so at various stages in this book ; we will now focus what has already been written. Wages is the price paid for labour power considered as a commodity. The price is based upon the cost of subsistence necessary to the maintenance of that labour power and its reproduction. The price is further varied by the quality, scarcity, or organisation of the labour power. Thus a higher price may be paid (but not necessarily) for skilled labour, or for special labour that is scarce, or for labour that strengthens its economic power by means of trade union organisation. Low wages may be, and are, paid to unorganised skilled labour ; higher wages may be, and are, paid to unskilled, but organised, labour. So closely is organisation related to the price paid over the sub- sistence level, that, broadly speaking, skilled labour almost connotes organised labour. The price paid for labour power may be crudely based upon a recognised weekly sum that will barely ensure subsistence ; it may be paid for specially applied tasks in a form known as piece-work. But piece-work prices are based upon subsistence plus the amount exacted by organisation. The fundamental fact, common to every kind of wage, is the absolute sale of the labour commodity, which thereby passes from the seller to the buyer and becomes the buyer's exclusive property. This absolute sale conveys to the buyer absolute possession and control of the products of the pur- 76 NATIONAL GUILDS chased labour commodity and estops the seller of the labour commodity from any claim upon the surplus value created or any claim upon the conduct of the industry. The wage-earner's one function is to supply labour power at the market price. That once accomplished, he is economi- cally of no further consideration. It therefore follows that effective co-management j (whether with the State or the employer) and the main- tenance of the wage system are mutually exclusive. It 'also follows that the army of wealth-producers can inever change their status inside the wage system. Yet even serious thinkers persist in regarding such a tremendous economic and social fact as of no import- ance. They think it does not much matter so long as the worker brings home " his thirty or fifty or seventy shillings each week." The slave status did not matter so long as the slave was reasonably sleek. Now let us look more closely into our definition. We have already disavowed the theory that labour power must be regarded purely as an economic commodity. We have asserted that labour means a vast deal more than a mere commodity ; that its human implications cannot be disentangled from its economic definition. That being the case, it logically follows that the usual economic conception of labour cannot be accepted if it clash with the human elements inherent in the labour. Since we first wrote upon this point, we have been forti- fied in our contention by Mr. Binney Dibblee, by no means an advanced writer, indeed distinctly orthodox in economic tradition, whose book, The Laws of Supply and Demand, is a contribution to modem economics. Mr. Dibblee boldly faces the question whether labour (he calls it human exertion) is a commodity. " The chief reason for its segregation in terminology from all other things freely bought and sold is probably from a sense of human dignity, denying a similarity THE ECONOMICS OF THE WAGE SYSTEM 77 in essence of what costs us most in sacrifipe with mere material objects. But the distinction can be justified by a deeper fundamental difference than any indicated by sentiment. . . . There is no commodity of anything like equivalent value which is more often freely' given away. . . . There is no commodity which resembles it in being sold habitually and by large classes of people for sums considerably below what would be its vsdue if the market were properly exploited." Mr. Dibblee then cites certain instances proving these points, and proceeds : " But there is another characteristic of labour which makes it different from ordinary commodities, and that is that, while without capital it has no means of holding back supply, capital is, as a rule, only in the hands of the buyer of ^ labour, and thus it tends more rapidly than with the supply in general to run into a condition of glut. This fact is the cardinal feature of labour, as distinguishing it from other things which are bought and sold. . . ." In other words, there are animate qualities in labour which render foolish any economic theory which classes it with inanimate commodities. As we shall show later, Mr. Dibblee does not approach this problem from our point of view. He would probably be shocked at the suggestion, but it is evident that he has accomplished a peculiarly valuable work in de- monstrating that in essence human exertion and com- modities are fundamentally different. Does that, how- ever, transform our conception of wages ? Yes and no. Yes ; in that it divides the ethical view of labour from the current economic view. But ethics and economics are the obverse and reverse of the same coin. If so, the prevailing conception of wages, is false. Whatever is ethically right is economically desirable. It is economi- cally desirable to transform the wage system. No ; in 78 NATIONAL GUILDS that the wage system will continue on the same basis until organised labour, operating in the economic sphere (whether ethically inspired or economically motived is immaterial), wills to end the wage system by undertaking itself to perform, not only the function of supplying labour power, but, by a proper adaptation of its qualities, also the functions now allotted to rent, interest and profits. But we have seen that labour can fulfil these functions only by abrogating the wage system. So long as it accepts wages, it accepts the implications of wages, the most important of these being that, in selling its la,bour power, it also sells its birthright in the industrial fabric, reared by itself, but sold by itself for a mess of wage pottage. II We ask our readers to keep steadily in view the cardinal fact that the payment and acceptance of wages mean no 'more and no less than the transfer of created wealth from the producer to the entrepreneur. That must be clearly grasped by the wage-earners before we can make actual progress towards the industrial democracy. Mr. and Mrs. Webb do not apparently attach any importance to this distinguishing characteristic of the wage system. Let us see how it works out in practice. We quote from a letter that appeared recently in the Star : " I would inyite Mr. Arthur Chamberlain to have a walk round the Albert and Victoria Docks and see for himself the many hundreds of capable labourers at work and things apparently humming. I am not going to suggest that these men are as well qualified as the men who are on strike, but one can see a daily improvement in their methods, and soon they'll know all that is re- quired. I do not wish to enter into the reasons why the late dockers left their work without notice, but maintain — THE ECONOMICS OF THE WAGE SYSTEM 79 what I think must be generally admitted— that every Britisher has a perfect right to take up any job that's offering ; and what we are witnessing at present is a turnover of labour. What some are forfeiting others are gaining. None of us likes monopolies." Here we have a perfect example, not only of the truth that the acceptance of wages involves the forfeiture of any claims upon wealth production, but also of the bastard social philosophy that springs out of it. The army of doj:k workers recently on strike — they and their predecessors — were the means whereby the Port of London grew to its present huge dimensions. These men built up the fabric of the Port • but they have not a scrap of claim upon the finished work of their hands ; the Port and all its gear belongs to somebody else. Why ? Because the dockers accepted wages for their labour power, and, they having done so, the employers claimed all the surplus. There were dockers on strike who had put twenty and thirty years' hard labour into the upbuilding of the Port, and in thousands of cases their fathers and grandfathers before them. Yet they were on the streets and their families starving by the ukase of a successful tea merchant and ex-Liberal Minister, who has not given as many months to the work as these men have years. How is it ? Surely it is too ridiculous to be true ! Not at all. Lord Devonport, the leader of the dock capitalists, simply said to the men : " When we paid you wages, we bought your labour power and all that flows out of it. If you can withhold labour power, then I must accept your terms, but at present I can buy labour power that you cannot control." The men, by means of wages, have sold out. They may not even enter the dock-gates through which they have passed to create the wealth now administered by Lord Devonport and his money barons. Possession has passed ; the men possess nothing. They do not even possess their own jobs. They 8o NATIONAL GUILDS not only forfeit the surplus value they create, but it must be created under the control and surveillance of the employers. This control of the conditions of labour is necessary to the employers, because it secures the power of disnjissal. But dismissal is not resorted to unless there is an adequate margin of unemployed. These unemployed must be given some moral justification for supplanting the dispossessed workman. The man in the Liberal Star has it pat : " Every Britisher has a perfect right to take up any job that's offering, and what we are witnessing at present is a turnover of labour." Turnover ! Now let us sum it up as far as we have got : (i) When a man sells his labour power for wages, he forfeits all claim upon the product. (ii) He also admits, by. his acceptance of wages, the right of the employer to dictate the conditions of his employment and to terminate such employment. (iii) By his acceptance of wages he further admits that his potential labour power may ^e stolen from him and given to another. If we consider these wage conditions dispassionately, in what way can we distinguish them from chattel slavery ? The slave had no right to his own body — the source of his labour power ; the wage-earner has no right to his own laboiu: or its products. Our definition of wages cannot be seriously disputed. Granted the accuracy of our definition, can these con- clusions be seriously disputed ? The struggle" of the future wiU be the struggle of the industrial workers to regain possession of what they have lost and to retain possession of what they produce. The bulwark which protects surplus value from the wage- earner, which secures it to the entrepreneur, is the wage system. That is why it must be abolished. Now let us suppose that the work of the London docks were done, not by more or less caisual wage slaves. THE ECONOMICS OF THE WAGE SYSTEM 8i but by a properly organised and regirhented labour army, penetrated by a military spirit attuned to industry. Do soldiers receive wages ? No ; they receive pay. " But ! " cries the practical man (and possibly even Mr. Sidney Webb), " what earthly difference is there between ' wages ' and ' pay ' ? " Let us see. The soldier receives pay whether he is busy or idle, whether in peace or war. No employer pays him. A sum of money is voted .annually by Parliament to maintain the Army, and the amount is paid in such gradations as may be agreed upon. Every soldier, officer or private, becomes a living integral part of that Army. He is protected by military law and regulations. He cannot be casualised, nor can his- work, such as it is, be capitalised. The spirit that pervades the Army is, in consequence, different from the spirit that dominates wage slavery. In other words, " pay " and the discipline of effective organisation produce entirely different psychological results from those created by " wages " and ineffective organisation. Whether the military psychology is in -every respect desirable is beside the point ; the material fact is that " pay "* is a totally different thing from " wages," pro- ducing its own psychology and atmosphere, and per- forming its vork in its own way. Let us further suppose that the army engaged on dock work were temporarily out of action, owing to a difference of opinion on high policy between the admini- strative and industrial leaders. Would the men cease to receive their pay? It would, of course, go on as usual. Oddly enoughj in a vague way, the trade unionists appreciate this- difference, for whilst they strike for increased " wages," or against decreased'" wages," they go on strike " pay." It is, curious and interesting to observe how philology often comes to the aid of economics. But whilst accepting the true meaning of " pay " as distinct from " wages," let us vary our supposition and 6 N 82 NATIONAL GUILDS assume a guild rather than a military army. Is it difficult to visualise a transport guild rising up out of the ashes of the dead wage system and putting all its members upon graduated " pay " ? Another interesting and suggestive aspect of the pay system is that it unifies every member of the organisation. Do officers ever dream of wages ? Do they say they are going on " half-salary " ? No ; they go on " half-pay " — the general, the colonel, the major, the captain and the lieutenant. It is obvious, is it not, that these verbal distinctions disclose substantial material differences ? Again, a soldier's labour is not rated as a commodity. A soldier is expected to give something very different. His obedience is not exacted to produce profits ; it is exacted to the great end that his unit shall fit efficiently into the whole Army organisation. He is expected to be brave ; but nobody dreams of exploiting or capitalising his bravery. All the soldierly qualities are inculcated in a spirit and with a purpose " alien of end and of aim " to the spirit and purpose of commerce. But we have no wish either to idealise the Army or to push our analogy too far. We quote the pay system that obtains in the Army to prove that a human organisation, efficiently regimented . and humanely motived, could dispense with the degrading wage system, and, having eliminated that dehumanising element, could do its work in a scientific and civilised manner. This divagation into the psychology of military organisation has, we fear, carried us rather wide of our subject, which is the economics of the wage system. There are still many economic aspects terhe considered. We must consider the effect of the wage system upon the exploited wage-earner and also upon the exploiter. Let us return to Mr. Binney Dibblee. We quoted him to prove that labour power is something more than a mere commodity. We have further noted that wages, whilst. THE ECONOMICS OF THE WAGE SYSTEM 83 primarily based upon subsistence, are favourably affected by organisation. We have seen that unskilled labour is generally unorganised labour ; that skilled labour is almost synonymous with organised labour. The effect of the wage system has been to put the wage-earner in some sort 9f organised defence against the lowering of wages to bare subsistence. The germ of the over- throw of the wage system is to be found in this organisation. In other words, the trade union, when it has developed into a well-organised guild, will be in a position to supplant the wage system. Mr. Dibblee reminds us of a function performed by the trade unions which we are liable to overlook : " They are usually considered to be associations founded to control the supply of labour and therewith to bargain for its price with the employer, and, as they have energeti- cally performed this duty for their members, it is undeni- ably triie that their work in this respect is of the very highe^ importance. But this is not logically, even if it was historically, their primary cause of origin. If these associations had been tumultuous combinations arising out of strikes, or, as Adam Smith implies that they are, ' conspiracies against the public ' or ' a contrivance to raise prices,' they could never have had the principles of cohesion and permanence which have raised them to the mighty power they now prove to be. Philosophi- cally speaking, their final and necessary cause was the maintenance of the reserves of labour, which are required by the system of modern production." Thus we see that wages, whilst paid only for the time worked, must suffice for the time unemployed. What does this mean ?' Just this : that only the bare cost of the labour commodity actually delivered enters into the cost of the finished product ; that from the increased wage exacted by organisation, over bare sub- sistence, has to be deducted the cost of maintaining the reserve of labour necessary to modern production. Or, 84 NATIONAL GUILDS in other words, for a century or more the trade unions have been performmg a function rightly belonging to capital. Mr. Dibblee recognises this. Dealing with this very point and the economic doctrine that came to justify it, he says : '' What shall we say of the pretentious body of doctrine, calling itself scientific, which rose up at that time to stamp the hall-mark on intellectual superiority of greed and crown ruthlessness with a halo ? Of all the crimes committed in the name of knowledge this was, perhaps, the worst. It has done more harm over a centtiry than all the wars of the period. Intellectually, it was more impious than the condemnation of Abelard, the muzzling of Galileo, or the hounding of Semmelweiss to madness. It is no wonder that men who kept their senses called political economy the cruel science ; but how is it that people were so slow to see that its theories were stupid ? " The answer is really rather simple. The wage system necessitated throwing the burden of the cost of unemploy- ment upon either the trade unions or the Poor Law authorities. Will Mr. Dibblee inform us how it can be done inside the wage system ? But the point to be emphasised is that, when, in the fulness of time, the guilds come to a reckoning with capital, they can set the colossal cost of maintaining their unemployed for a century against any ad miseri- cordiam appeal for mercy on behalf of rent and interest. This century-old burden in itself constitutes a clear charge upon the existing economic fabric. Tt is a charge that rent, interest and profits must sooner or later pay in meal or malt. Ill The burden borne by Labour in general and the Trade Unions in particular of maintaining life during THE ECONOMICS OF THE WAGE SYSTEM 85 unempldyment, a function properly belonging to capital; constitutes, as we have said, a charge upon the industrial fabric which must be repaid. But it is almost univer- sally contended that wages are . a first charge upon production, ranking in priority before rent, interest or profits. This idea is as prevalent in Socialist as in con- ventional economics. It is, in some sort, the capitalist's justification for the existing wage-system. He says : " I find the money and take all the risks ; but before I can pay a penny for rent or interest or take a penny in profits, I must first pay my workmen their wages. They have a first charge upon the concern." The seeming fairness of this contention has often proved too much for enthusiastic Socialists. Some of them actually embrace it as a propitious and happy fact. But the only sem- blance of truth in it is that in point of time wages are paid before rent, intere$t or profits. But this is not what is meant by the term "first charge." To possess a first charge upon a property primarily implies security. Whoever else goes without, the possessor of the " first charge " is secure. If his dividend is in default, then he may seize the property and squeeze out every other interest. A first charge is, in financial jargon, a " security." Because Labour is a first necessity in the process of production it by no means follows that this constitutes a "first charge upon production." Labour possesses no kind of charge upon industrial production because its claim is automatically discharged by the payment of wages. Wages, all economists agree, are the price paid for the laboiir. commodity. If, therefore, wages are a first 4;harge upon production, labour must possess a first charge upon production, wages and labour being equivalent terms,, under the express meaning and cqnditions of the wage system. But what security does labour possess ? Absolutely none. The security of possession has finally passed with the payment of wages. 36 NATIONAL GUILDS Thus, should it suit the convenience of capital to suspend, temporarily or permanently, the process of production, labour has no kind of charge upon the unfinished pro- duct, which belongs absolutely to capital. One com- modity cannot in the nature of things possess a first' charge upon another commodity into which it has entered. And labour, according to the existing code, is nothing but a commodity. If wages, that is, the labour equivalent, possess a first charge upon production, so also does the weather (which governs production in the building or the farm- ing industries), or atmosphere (which affects production in the cotton trade), or proximity to population (which affects rent), or any other natural conditions under which production proceeds. Words or phrases habitually loosely used soon cease to have any meaning. Bearing always in mind that labour is a comfnodity, it becomes meaningless to talk about wages being a first charge upon production. In the same sense it might be said that the price of coal is a first charge upon production, or shoe-leather a first charge upon locomotion. The essence of security, which is the true meaning of a first charge, is power to control production in all its processes and distribution in all its phases. Labour has literally no power, to control either production or distribution, because this power passes from it when it exchanges itself for wages. Before a cotton manufacturer can produce cdtton goods he must first procure cotton. But who ever dreams of saying that cotton is a first charge upon the cotton trade ? In the literal meaning of the words, no doubt the price of cotton is a " first charge " ; but in the accepted sense of the term, its use in that connection-is meaningless, foolish and dangerous. And the final and overwhelming proof that wages are not a first charge upon production or anything else, is that whilst unemployment — i.e:, a reserve of employ- > THE ECONOMICS OF THE WAGE SYSTEM 87 ment — is necessary to the present system of production, it has absolutely no kind of claim, no " first charge," upon production for its maintenance. Yet we have seen that the maintenance of unemployment is second only in importance to the maintenance of employment. The wage system is a denial to the owner of labour of any charge, first, second or third, upon production. If, however, we transform the conventional conception of the economic function of labour by crediting it with its proper human attributes and rejecting the pure commodity thesis sans -phrase, then we remove labour from the wages or inanimate category to the living or active category of rent, interest and profits. This intellectual process accomplished, we have revolutionised political economy ; labour is at last in a position to contend with rent, interest and profits for the " first ' charge " upon production. Whether it can, in fact, secure that first charge depends upon its power of econo- mic organisation— upon its will and power to constitute productive and distributive guilds. And upon the power and capacity of labour (the human energy, not the commodity) thus to organise itself upon a sound economic basis depends the final test of democracy as a living principle. If labour, as we believe, can effectively organise itself, producing and exchanging commodities more efficiently than is done under the wage system, then we shall speedily discover that whUst wages under the present system have no .charge upon produc- tion, labour, organised into guilds, would have a first, second and third charge not only upon production, but upon the industrial structure as a whole. The problem of economic organisation is almost as important as the problem of economic resources. A community rich in natural wealth, but defective in organisation, may find its economic position inferior to a community, poor in natural resources, but effectively 88 NATIONAL GUILDS organised for economic purposes. This becomes more and more a truism with the growth and efficiency of transportation facilities. Thus Lancashire, which does not grow an ounce of cotton, is the cotton centre of the world. Organisation is the clue to what will prove a mystery to the historian a thousand years hence. Now the wage system is uneconomic, not only or even primarily because it is based upon a false conception 6f the nature of labour, but because it is the fruitful parent of faulty and uneconomic organisation. The conceiitra- tion of surplus value in the possession of a small class inevitably circumscribes the human area from which organising capacity may be drawn. We have seen that the wage system consigns labour to outer darkness, having created wealth in the posses- sion of capital and under the control of the profiteers. How stupendous is the result it is difficult to demon- strate. Take this fact : 39,000,000 out of our popula- tion of 45,000,000 receive only one-half of the entire income of the nation. This means that about eight- ninths of ouF population, living upon wages,- are ex- cluded from any controlling interest in the organisation of society. Society so organised is obviously the nega- tion of democracy. The defects and failures, therefore, inherent in the existing structure of society, cannot be ascribed to democracy. It is true that oiu: political system bears some resemblance to democracy, but our national economy is plutocratic throughout, and, in con- sequence, renders impotent our political democracy, which is only apparent and not real. Now, it is natural that capital should seek to retain control of industry in its own interest. It is better, from capital's point of view, to retain control with in- efficient administration than to lose cpntrol to efficient management. For example, in the will of the late Sir Edward Sassoon, his young son is admonished to attend THE ECONOMICS OF THE WAGE SYSTEM 89 to the interests of David Sassoon and Co., Ltd., "so that its reputation and standing so laboriously built up by his ancestors for close on a centiuy may not be tarnished or impaired by the possible neglect or mis- management of outsiders." What sanction is there for assuming that the stripling who has now entered into possession can better protect the interests of the busi- ness than its present administrators ? Observe, too, that the non-proprietorial managers are " outsiders." The succession to the control of large undertakings by youngsters by inheritance is probably the most prolific source of failure to organise efficiently. This has long been recognised, and the cure sought in joint stock administration, where competent management can often. be bought by large salaries and profit percentages. But this system barely widens the area from which to draw efiicient administration, because the non-proprietorial administrator is drawn from very much the same social class as the proprietors ; he is educated and trained in much the same milieu as' his employers, whose status he seeks to achieve. In this way even a clever adminis- trator does not make administration his dominant motive ; to him it is only a means to the end that he, too, may become a member of the possessing class, and not only its servant. But granting the existence of an administrative class, its management is strictly de- fined by the first condition that dividends must be earned. Dividends, however, cannot be earned save by the maintenance of the wage system, because the wage system is the only method whereby surplus v&lue can be secured. Thus we discover that the wage system is the basis, not of one integrated community, but of two communities whose interests are divergent and antagonistic. The one community is the army of wage slaves, as much detached from, the products of their labour as is the farm labourer from the land. The 90 NATIONAL GUILDS other community is composed of five or six million people, with their brood of children, servants and parasitic dependents. Now let us see the positive waste involved in this organisation apart altogether from the negative waste involved in the extrusion from commerce of untold potential administrative cap- acity in the mass of the working population. We will again quote Mr. Binney Dibblee: " The town of Oldham, with ioo^,o6o inhabitants, has spindle capacity enough to supply more than the regular needs of the whole of Europe in the common counts of yarn. To manipulate such an output and market it, as well as the other output of Lancashire, the merchants and warehousemen of Manchester and Liverpool, not to mention the marketing organisation contained in other Lancashire towns, have a greater capital employed than that required in all the manufacturing industries of the cotton trade. It is roughly true to say that nowadays it costs more to sell most articles than to make them, even in the case of the most highly organised and most eminently specialised industry in the world."] Now is there any reason under the sun why it should cost more to sell an article than to make it ? None whatever ; but from time immemorial, either with chattel or wage slavery, it has been found more profitable to sell at a profit than merely to manufacture. They knew it in Tyre and Carthage, in Florence, Genoa and Venice. They know it in Manchester ; they know it in Liverpool, where they levy toll upon imported cotton that would make the mouth of the Chancellor of the Exchequer water. But consider London, with its population of 7,000,000. Says Mr. Dibblee : " Of industry in the modern sense, which uses ' power ' for production, she is almost ignorant. The proof of this odd fact I discovered in the report of the Commission on London Traffic, still only a few years old. There were then 638 factories in THE ECONOMICS OF THE WAGE SYSTEM 91 London registered as coming under the Factory Act, with an average horse-power of 54. The total power employed within the London area under the Factory Act, chiefly used in newspaper printing, was 34,750 h.p. Just twice as much power as that is required to drive the Mauretania -through the water." Yet the wealth of London is greatly in excess of the twenty largest industrial towns of Gireat Britain. This purely financial aggrandisement, divorced from actual production, is equally observable in New York and Chicago. So it comes to this : The existing social system, based upon wage slavery and controlled by profiteers, cannot at this time of day sell an article at less expense than it costs to make. Our methods of exchange have grown grotesque ; their wastefulness is a national sin ; their burden has become intolerable. IV We have repeatedly emphasised the fact that the com- munity is charged two rents, two sets of interest, and two sets of profits — a fact the significance of which is not appreciated unless we approach the economic problem through the gateway of the wage system. The wage- earner, although a serf because he has sold his interest in production by his acceptance of wages, is, nevertheless, the real producer of wealth. As a producer, he pays the manufacturer's rent, interest and profits. But as a consumer he again pays the distributor's rent, interest .arid profits. The orthodox economists clump together these two sets of economic plunder. They tell us that the costs of distribution must be reckoned as a charge upon production ; that the machinery of distribution in the final analysis is part of the machinery of production, Therefore it is argued, if the community were to take ' possession and control of land and machinery, it would 92 NATIONAL GUILDS be compelled also to take over the distributive machinery. No doubt the average State Socialist would fall into the trap, because his scheme of life contemplates the purchase of all machinery at its capital value and the payment of interest upon that capital value — an interest guaranteed by the State. As we have already proved, this method in- volves the continuance of the wage system, because with- out wages there can be neither reijt, interest nor profits. But the Guildsman and the Syndicalist are agreed that any such solution means a mere superficial modification — of the existing industrial system ; there can be no funda- mental change without the abolition of the wage system. The truth is that the distributive elements in economic society, so far from subserving the real interests of the producer, actually blackmail the producing capitalist, extracting from him the maximum amount of surplus value — " what the traffic will bear," as the American railway directors grimly phrase it. If the blackmail stopped there we might be content to accept the dictum of the orthodox economists and simply regard the pro- ducing and distributive capitalists as the same body, the same neck, but two heads. But the facts do not warrant any such easy assumption. For two reasons :' (a) because possession of the created wealth passes from the producer to the distributor, from the manufacturer to the merchant ; and (6) because the distributor, having _ gained possession from the producer, proceeds to levy still further blackmail upon the consumer. How is it done ? The reasons are rooted in history. The merchant of to-day, in league with the banker (formerly they were one and the same person), is the true lineal descendant of the original entrepreneur. He it was in the old days who actually " assembled the parts," paying cash for the products of the home industrialist, who had no capital, and making his profits by selling to the consumer, directly through his own organisation or indirectly through THE ECONOMICS OF THE WAGE SYSTEM 93 local merchants. To this day, the small manufacturer, notably in Lancashire and the Midlands, depends upon the merchant, not only for the distribution of his product, but for the capital to carry on his business. Broadly speaking, the successful manufacturer is he who has worked free from the dominance of the merchant. But to achieve this the manufacturer has to acquire capital equal to the requirements of both production and dis- tribution. Ta attract capital for production it is im- perative to prove effective demand. This once accom- plished, the banker forsakes his natural ally, the merchant, and ranges himself with the manufacturer. Be it always remembered that this struggle between manu- facturer and merchant is absolutely contingent upon the capacity of both sets of exploiters to extract surplus value out of the products of Jabour — of labour purchased in the competitive labour market as a commodity. Suppose this labour commodity, like the slaves of a former day, were to say : " I am no longer a commodity ; I am a living entity ; you can no longer command me ; henceforth what I produce I shall control," where, then, would be the manufacturer and the merchant ? Tradi- tion has it that when Moses crossed over to dry ground, and looking back saw the Egyptians struggling in the water, he raised his hand to his nose, elongated his fingers and shouted aloud : " Pharaoh ! Pharaoh ! Where are you now ? " Labour, transformed from the inanimate to the animate, would find itself on the vantage ground occupied by Moses. "Now the plain fact is that the labour commodity theory — to wit, the wage system— is a direct incentive to the merchant to expand his profits. Dependmg upon the so-called iron law of wages, and having squared the manufacturer, he is in a position to rob the community in every direction. Number one middleman, commonly known as the merchant, is not content with less thgin 94 NATIONAL GUILDS 20 to 30 per cent. ; number two middleman, commonly known as the retailer, wants another 30 per cent. Thus the consumer bears the middleman's depredations at one end and the nianufacturer's at the other. In this way there has grown up on the foundation of the wage system a gigantic superstructure, the burden of which upon labour is now too heavy to be borne. One simple fact will illustrate the enormous extent of this distribu- tive burden. Mr. Binney Dibblee estimates the adver- tising annual revenue of London publications alone at £10,000,000. He thinks it moderate to estimate the annual advertising expenditure at ;^ioo,ooo,ooo. The estimate for America and Canada is £250,000,000. Altogether, the total expenditure upon the modern in- dustrial system of America and Europe is not far short of £600,000,000. Obviously, the consumer pays for this, and pays through the nose. Is it any wonder that real wages are falling ? Is it surprising that rent, in- terest and profits are advancing by leaps and bounds ? From 1900 to 1910, the Board of Trade Wages Index Number rose only i'2 per cent., whilst the Retail Food Indej? Number rose nearly 10 per. cent. During the same period the a,mount of income reviewed for income tax advanced by £217,000,000 — an increase of 26 per cent. It would be easy to write a considerable volume upon the economic waste involved in these profoundly signi- ficant figures. Consider the positive and negative waste in an expenditure of £100,000,000 a year upon adver- tising — ^Ihe charge upon the producer and the consumer, the misapplied labom: which might otherwise be put' to genuinely productive purposes, the brainwork wasted upon " publicity," the spiritual and intellectual debauch- ment of the community by newspapers that thrive upon these advertisements, and whose " message " to their readers is conditioned by their advertising revenue. We must leave it to the satirist and the seer. THE ECONOMICS OF THE WAGE SYSTEM 95 But the question remains : Has the merchant any real economic function ? We unhesitatingly reply that, whilst commercially his position cannot be challenged, he is, economically considered, a fruitful source of frightful and oppressive waste. The manufacturer we can utilise to good purpose ; the railways may be counted as genuine factors in production ; but the merchant — he is the pimp of industrial prostitution, the most powerful factor in maintaining a white slave traffic, of which the "white slave traffic" is a very small integral part. The function of distribution has been perverted by its divorce from production, and so far as can be humanly foreseen it can never be brought into true relation with production until organised production deals directly with organised demand. But neither production nor demand can be economically organised upon the basis of the wage system, because out of it springs surplus value, and surplus value is the apple of the efconomic struggle between the capitalist producer and the capitalist dis- tributor. Between them there is not, and can never be, " economic harmony." Thus we see that out of a false premise grows an endless sequence of false and artificral conditions. The false premise is the old classical illusion that labour is a commodity with a commodity price based upon a sort of Dutch auction of competitive sub- sistence The economic " pulls " Of which Mr. J. A. Hobson writes merely amount to this : whether this or that economic group Jias a greater ^ less grip upon surplus value. The moment animate labour decides that there shall be no more surplus value, at that moment these " pulls " become ineffective, for the simple reason that they are gripping, not a substantial surplus value, but the void. They grip at the void ; into the void they disappear. Although the facts warrant our condemnation of existing distributive methods, we are the last to under- 96 NATIONAL GUILDS value the supreme importance of effective distribution. There is probably more than meets the eye in the con- tention that it is the distributive classes that stimulate invention arid variety ol production. Assuming that, labour rejects the wage system and takes control of production, what will be its attitude to the thousand and one demands made upon it by a highly educated and increasingly fastidious army of consumers ? Will it ossify into conservative methods, rejecting variety as conducive to increased labour " energy ? That it will welcome labour-saving inventions we may be confident, but will it willingly meet the demand for an infinite variety of product — the inevitable requirements of a more highly civilised community ? The question is not easy to answer. But we may first remark that the benefits of variety, of high qualities, do not touch the wage-earner under the existing r6gime. Our present standards and canons of beauty and crafts- manship are false because they have grown in an atmo- sphere of false economy and artificial conditions. There will, likely enough, be no encouragement for Bond Street, for Bond Street depends not upon beauty, but upon exclusiveness of price. In any event, labour to-day produces what Bond Street demands, and what labour has done labour can do again. Nevertheless, it is highly probable that labour will rightly regard as wasteful much that to-day is regarded as beautiful and in good taste. But the craftsm^'s innate passion for creating beautiful things cannot fffl to be stimulated by his increased capacity to enjoy for himself the work of his hands. It was under the mediaeval guilds that craftsmanship reached its highest development ; we may be sure that the spirit of craftsmanship will continue to express itself. Nor will it be necessary to spend ^100,000,000 a year to bring the craftsman and the lovers of beauty into touch with each other. The guilds will be the means whereby THE ECONOMICS OF THE WAGE SYSTEM 97 labour conquers the production of wealth ; we may rely upon a widely extended development of general culture to render life not only spiritually but materially more beautiful. We are now in a position to sum up the economic bearing upon the national life of the wage system. We see : (i) That the wage system is' the spine of the existing industrial anatomy. (ii) That it condemns the wage-earners, who represent four-fifths of the community, to complete economic proscription, leaving the instruments of production and all surplus wealth in the absolute possession . of rent, interest, and profits. (iii) That wherever wages rise above the subsistence level, as in the case of the skilled or organised trades, ^ the margin is practically absorbed by the burden thrown upon wages x)f maintaining the' reserve army of the un- employed. (iv) That by the power conceded to capital to purchase l^our as a commodity, a vast uneconomic army of middlemen has arisen, which expands surplus value to such unhealthy proportions that distribution has ceased to be a factor in production, but constitutes a separate and dangerous interest, having exactly the same relation to the producer that the shearer has to the sheep. (v) That, in consequence of these conditions, the industrial structure of Great Britain is artificial and dangerous to the economic health of the community. (vi) That the only way \o abolish rent, interest and profits is to abolish the wage system. No wages, no rent ; no wages, no interest ; no wages, no profits. (vii) That economic power is the progenitor' of poli- tical power. From this it follows that the political power of the Labour Party is strictly limited by its economic power ; that inasmuch as wages involve the 98 NATIONAL GUILDS sale of economic power to the possessing classes, labour cannot possess economic power, and in consequence its political power is " passive," whilst the political power of the possessing classes is " active." • Finally, we see that the real solution consists in a fundamental reconstruction of the system of wealth production ; that it now only remains for the wage- earners with one accord to proclaim that they will no longer work for wages. Out of the ruins of the wage system will spring a new economic society, and in that society we shall discover new conceptions of- wealth, of value, of art, of literature — a new scheme of life. To this new order of society every wage slave must look, for emancipation; to it fervently look the artist, the craftsman, the writer. Dead are the industrial ideals and dead are the spiritual conceptions of existing society ; dead is its religion and paralysed are its devotees. After a decade of troubled sleep, the pioneers are again on the march. A new hope inspires them. Will the main body of the army respond to their signals and follow ? X THE TRANSITION FROM THE WAGE SYSTEM I Let us again remind our readers that the wage system involves two false assumptions : (i) That labour is a commodity pure and simple ; (ii) that the seller of labour, having sold, has no kind of economic or social claim to the products of labour. Obviously the second assumption is based upon the first. It is surely now evident that no social revolution is possible that assents to or even adapts itself to any wage system. In a generation or so from now our children Avill study the wage system with precisely the same horror and curiosity that we regard the "slave system. How, then, are we to escape from the slavery of wagedom ? We have had to cpnsider another aspect of this pro- blem in the course of our inquiry. We have found that economic power ' is the dominant factor in the political sphere ; as we have shown, time and time again, economic power precedes political power. Therefore it would be futile to look to the surface play of politics for release. We must resolutely face the necessities of the situation : the battle must be fought in the econo- mic sphere; for where wealth is produced, there and only there are the wage slaves in their true element ; there and only there must the great change be effected. If, 100 NATIONAL GUILDS then, the revolution is to be economic (the political moon subsequently reflecting the light of the economic sun), what material has the wage slave wherewith to fight ? He can only control two factors : (a) labour power ; {b) labour organisation. He is the absolute possessor of labour power until he sells it for wages ; the wages he gets are modified by his capacity for trade organisation. Therefore the struggle must proceed on two parallels : first, the determination, final and considered, never again to sell labour for wages (this determination involves pro- prietorship of the ultimate products of labour) ; secondly, the complete organisation of labour upon a footing of industrial war. And anything less than complete organisation spells failure. Having predicated the determination to end the wage system, what remains for us to do is to consider the plan of campaign. Let us confess that the difficulties are stupendous. Let us further confess that these diffi- culties are mainly in our own ranks. For example, it is apparent that the political Socialists and Labourists are prompt to congratulate themselves every time a strike fails. " Just what we told you," they say, smiling ; " the day of the strike is over ; you must entrust your affairs to us politicians." Of course strikes are failures. They fail because as yet there is barely a vestige of effective organisation ; they fail for want of a true objective. The present position is just this : an army of one million, well provided in 'every respect, is surrounded by an army of thirteen millions, ill-equipped, lacking in unity and almost devoid of purpose. The result is that every engagement is merely an affair of outposts.' The .beleagured army is content to remain where it is. It is well provisioned, well equipped, and life within its lines is distinctly agreeable. Therefore the attack must come from the besieging army. To succeed, the TRANSITION FROM THE WAGE SYSTEM loi attack must be the result of thorough organisation. But you cannot get thorough organisation without willing co-operation amongst the various units. What happens to-day is that here and there a sectional attack takes place. The main body of the labour army knows nothing about it until it is too late. -The political section sneers at these forlorn hopes, and calls for parley with the entrenched army. They seem to think that the possess- ing army will capitulate to the honeyed phrases of a MacDonald, a Snowden, a Keir Hardie. Of the h6pelessness of sectional fighting we have scarcely the heart to write. It is the most stupendous foUy imaginable. Before us, as we write, are the official figures of strikes and lock-outs from 1901 to 1910. During that period there were 4557. disputes, involving 2,210,487 workers, who fought for 44,376,707 days. Fought for what ? God knows ; nobody else does. Will some person of plain common sense seriously consider what would have been the result had these forty-four million working days been devoted to some' definite objective ? How much nearer should we be to the destruction of the wage system had there been an intelligible objective ? But mere disputes about the amount of wages, the hours of labour, or the conditions of wages lead nowhere, and are waste of time and money. The political Socialists are right in this ; they are equally wrong in assuming that well-organised and well-directed strikes must prove equally futile. During the ten years under review, the trade unions spent £2,348,370 upon these disputes. But during the same period, as a result of the wage system, rentmongers and profiteers walked off with £12,000,000,000 (twelve thousand miUions) of plunder. During the same period, four-fifths of the community had to con- tent itself with £6,000,000,000 (six thousand millions). Thus we see that organised labour has as yet no con- ception of the magnitude of the battle. For is it 102 NATIONAL GUILDS conceivable that any body of intelligent men would fritter away their sinews of war upon four thousand small and ineffective skirmishes if they realised that by effective organisation they could emancipate themselves from wage slavery and keep to themselves twelve thousand millions worth of wealth they themselves had created ? ' What, then, is the stumbling-block ? Sectionalism, and nothing else. An examination of the list of trade unions reveals an appalling., condition of sectional organisation. In the building trades there are no less than twelve different unions : the Manchester Unity of Bricklayers, the Operative Bricklayers, the Operative Stonemasons of England and Wales, the General Union of Operative Carpenters and Joiners, the Amalgamated Carpenters and Joiners, the Associated Carpenters and Joiners, the United Operative Plumbers, the National Operative Plasterers, the National Amalgamated House and Ship Painters and Decorators, General Labourers' Amalgamated Union, Navvies, Builders' Labourers, and General Labourers, and the United Builders' Labourers. It is true that in various ways some of these unions are federated, but, taking a broad view and having regard to the future struggle, this is not organisation — it is disorganisation. Turning now to mines and quarries, we find no less than sixteen different unions. It is true that their federation is, on the whole, reasonably efficient. Nevertheless, the last miners' strike made it clear that local sectionalism proved to be the undoing of the miners. We learnt that one district could hold out two weeks, another district was good for thirteen ; that in one district the men got so much strike pay, and in another so much more or so much less. Sectionalism, combined with the poUticians, killed the last miners' strike. Next look at the metal, engineering, -and shipbuilding trades. They have fifteen different TRANSITION FROM THE WAGE SYSTEM 103 unions treading on each other's toes. The textile trades luxuriate in no less then twenty-four different unions. It is sectionalism run mad. True that federation plays a wholesome part in both the engineering and textile industries, but multiplicity of separate and autonomous unions destroys unity, spontaneity and ■ simultaneity — fatally delays if it does not destroy. Turn we now to the transport workers. As we shall show later on, these men hold the strategic key to the revolution. Meantime we observe with consternation that this trade has no less than eleven, different unions and practically no federation. And so we might go through every -trade and find the same result — sectionalism rampant, unity lacking. At the efid of 1910 there were 1153 separate trade unions, with a total membership of 2,435,704. This brings us to the crux of the problem of organisa- tion. These various unions are mostly of local origin ; their membership is restricted, and they are tenacious of their individual existence. Financial considerations and officialdom stand in the way of amalgamation ; time and energy are wasted upon local struggles and pur- poses, the main interest of the general body of wage- earners hardly being considered. But what is infinitely worse, all this local or semi-local sectionalism bars the way to the industrial organisation of the whole army of wage-earners. There are two and a half million trade unionists ; there are thirteen million wage-earners. The mot d'ordre, therefore, is not only more effective^ organisation aniongst existing unions, but the widest possible extension of trade organisation amongst non- ^ unionists. We decline to accept the asstirances of the political Socialists and Labourists that trade unions can- not be greatly extended. If they will clear the ground by wholesale amalgamation and by simplification of theh rules, particularly as regards membership, we believe that it would be possible to rope in ten million members 104 NATIONAL GUILDS in the next ten years. Such a consummation would, however; be hopeless if the active trade unionists are to be- distracted by politics, and their energies dissipated in political Labourism. We have now learnt that political Labourism has very strict limitations. It is, in the final analysis, dependent upon the economic power of the wage-earners. But that power is, in its turn, limited by ineffective organisation. Thus trade unionism to-day is travelling in a vicious circle : it seeks redemption through politics, only to discover that politics can do nothing for it ; it dissipates its energies upon politics, and so kills itself twice over. It kills its economic power by preoccupation with politics ; its politics are barren because it has not conserved its economic power. Further, existing trade unionism is based upon the wage system ; its object is to increase wages or ameliorate wage conditions. But when it becomes informed through and through with the new spirit, when it realises that there are infinitely greater stakes at issue, then, we doubt not, a vast organisation of wage-earners will become an accomplished fact, and the end of the wage system will actually be in sight. But having got our army of wage-earners, there still remains the plan of campaign — ^leadership, strategy, and, above all, the commissariat. II The new struggle, inspired by the idea of the abolition of the wage system, must necessarily call into being a new type of leader. The present type has served its turn and, with all its errors and limitations, it has fairly and squarely earned our gratitude. The ceaseless moiling and toiling inherent in trade union organisation has been given un- grudgingly by a body of officials, whose pathway has been TRANSITION FROM THE WAGE SYSTEM 105 strewn with thorns. They have, on the whole, received more kicks than ha'pence. Recently the ambitions of the union leaders have been diverted to political ends to the detriment of economic power. The new type must adhere faithfully to its true function. We do not doubt that out of the illimitable human wealth of the industrial democ- racy the new type will be found in abundance. More to the point is the new method of campaigning. There clearly must be a far higher degree of co-ordinated direction and regimentation. Isolated action must be regarded as mutiny and sternly suppressed. Unions that, strike without the assured support of the main army must do so on their own responsibility. On the other hand, wherever a strike has been properly declared, it must have the unrestricted backing of the organised forces. The recent Dockers' strike is a case in point. The men came out and trusted blindly to the general good-will of their comrades. They got the good- will in plenty and precious little besides. Nor is it conceivable that the railwaymen would have been allowed to come out weeks after the transport workers had gone back. They should have all come out together. Nay, more^they should aH have been in the same union. We have several times referred to the lack of co- ordination amongst the transport and railway workers. For this reason : A union completely covering all the men engaged in the transport of merchandise could, if properly supported, win the battle and smash the wage system. But this is only possible with complete unity of action between the railway driver, the guard, the signalman, the docker, the vanman, and the 'bus-driver. And this unity must be financially backed by every other union, each according "to its numerical strength. The key to the position is here. But supposing the Government were to counter the movement by manning the railways and street vans with the Army Service Corps — a likely enough io6 NATIONAL GUILDS contingency — then the other unions must be so organised that the Army Service Corps has nothing to carry. Such a campaign, be it noted, depends upon two vitally important considerations : (a) A complete commissariat system to maintain the labour army in times of industrial strife ; and (6) an industrial army council with plenary powers to direct operations. The lesson of the last century of strikes is that when they have failed it has been because the commissariat department broke down. And we may go further and affirm that this was due not so much to the lack of money as to the failure to realise that war between labour and capital is nothing but war, and that, therefore, it should be conducted on a war footing. Inter arma silent leges ; a strike conducted with meticulous regard for law and custom is almost certainly doomed to failure. The leaders of strikes are prone to curb the action of their men by confining them to legal limits. The true line to follow is to disregard all legal obligations precisely as soldiers do in the enemy's country, and for the same reason. Roughly, policy dictates in times of conflict : (i) That on the proclamation of a strike no rent be paid. (ii) That on its termination no arrears be paid. (iii) That on any attempt to extort rent by threat of, or by actual distraint, every non-striker in the district affected shall forthwith cease to pay rent. (iv) That no arrears, in such circumstances, be recog- nised. (By this means, rent is specifically struck at as well as profits. The striker kills two birds with one stone.) (v) Rent being temporarily abolished, the most im- portant consideration is food. Hitherto, food has been provided by means of strike pay. This must cease : the method is obsolete. It is not only haphazard and operates harshlyupon men with large families, but almost inevitably TRANSITION FROM THE WAGE SYSTEM 107 hits the unfortunate retailer. This is so universally the case that retailers find their credit cut off upon the declaration of a strike. We believe, not without evi- dence, that the large wholesale houses often do this, not because they fear the retculer will not pay, but deliberately to hamfJefor kill Jhe strike, (vi) The Co-operative Whol^ale Society should be the natural ally of the unions during a strike. This fact recognised, the obvious step is for the unions to contract with the C.W.S. for the supply of rations to all the strikers, regard being paid to the number of each striker's family. At a close estimate, it takes five shillings per week per individual to maintain life. At wholesale prices this might be reduced to four shillings. The rule to be adopted, therefore, is that no money shall _pass, the C.W.S. or the local trader to provide the rations and to be paid direct by the trade unions. Two important purposes are sub- served by this arrangement : tbe strike can be indefinitely prolonged and the source of supplies maintained. To conduct the future strike, the formation of an army council becomes imperative. To this council each union must not only send its delegate, but subscribe its obedience. The sine qua non of success in striking is promptitude of ~ support. As things are to-day, this is impossible. It often takes weeks to bring the unions into line — as often as not after the strike has failed for want of proper support. Incidentally, as a condition precedent to the organisation of labour, all wage agreements, sliding scales, time con- tracts, and any and eyery legal harassment must be terminated. A weekly wage without any embarrassing conditions must be insisted upon. To avoid any misunderstanding, let us once more reiterate that we desire no such elaborate strike organi- sation merely to modify the wage system. We postulate, first and last, that no strike is worth while that does not • aim specifically at some form of control. It cannot be io8 NATIONAL GUILDS too often emphasised that control — ^joint or complete control — spells the negation of the wage system. And while we are about it, for the last time we affirm that the negation of wages means the negation of rent, interest and profits. No wages,- no rent ; no wages, no interest ; no wages, no profits. PART II NATIONAL GUILDS THE MORAL FOUNDATIONS OF EXISTING SOCIETY • In the preceding section of this inquiry we have shown that the compulsory competitive wage system (herein- after indifferently called wage slavery, or the rack wage system, or the wage system) is the economic or industrial basis of existing society. The essential features of this system axp, first, that the labourer shall be regarded as a raw material ; second, -that to this end he shall have no alternative means of making a living save by working for wages ; and, third, that he 8to,U be compelled to accept such wages, however low, as^^^'^med by competition and the law of supply an^^Ji^^nA^ Before -proceeding to the more constructive part of our task, which is to show how this system can be abolished and replaced by a better, it is advisable to ask ourselves whether there are any coirimandirig moral considerations to justify the maintenance of society as it is. For we have already assumed that the economic and the moral systems of any given society are closely related, so that if a moral justification exists for it, an economic system tends to stability, and if no such justification exists, to instability. At the outset we are met by the fact, becoming more 109 no NATIONAL GUILDS apparent every day, that the rack wage system in itself is immoral ; that is, ' it does violence to the natural instincts of man. It is not to be denied that the realisa- tion of the immorality of one class of men reducing an- other class to and maintaining them in a condition of propertylessness in order to exploit their wage labour for private profit has been slow in coming. Even at this moment the realisation is confined to a comparatively few minds. But the analogy of the wage system with chattel slavery even in this respect is striking ; for it took several millenniums for society to realise that chattel slavery was fundamentally contrary to the nature of man. When, however, this immorality was realised, and, above all, felt, the economic system dependent upon it was doomed. ' No arguments based on tra'dition, utility, theology, or science were of the smallest value against the moral conviction that chattel slavery was bad. It might even have been demonstrated that the economic successor of chattel slavery was boimd to be inferior in point of production to the system that it displaced. The heart of society was made up and the head was compelled to take the economic risk and to make the moral plimge. Similarly, it is conceivable that before very long the same moral repugnance that was felt for chattel slavery on the eve of its abolition may be felt for the rack wage system ; and in that event economic considerations would receive short shrift. In the end, however, we believe that what is morally right is economically right ; it is in this faith that moral reformers and practical economists find themselves so often on the same side. But without comparing the feeling against wage slavery as now manifested with the feeling ' which ulti- mately abolished chattel slavery, we may say that against wage slavery, as against chattel slavery, an in- creasing minority has always been in active revolt, and the mass of men have always been_ in passive revolt. THE MORAL FOUNDATIONS OF SOCIETY iii For the active revolt it is only necessary to look at the history of Socialism and of Utopi^inism, both of which alike make the abolition of the wage system their goal. But in regard to the passive revolt the evidence is not less conclusive. For example; nobody doubts that the majority of wage earners would be willing, any one of them at any moment, to exchange their position as wage-earners for the position of economic independence, even if this latter involved a permanent reduction of financial income. Again, it is a ihatter of observation that the mass of men regard wage service as distinctly inferior. in point of status,. not only to independence, but even to the old feudal status of the personal servant (not slave). We are aware that there is no lo'^e lost between James and Bill, but it is, nevertheless, true that as between the two economic orders of personal and wage services, the former is in a subtle sense superior. This is stiU more clearly seen in the superior status of Government pay-service as compared with private wage- service. Nobody can fail to be struck by the difference in self-respect, at least, that comes over men when they are transferred from private to public employment. The nature of their employment tmder Government may even be more onerous than that of the private service they have left. It may conceivably even be less well paid. Nevertheless, it has its compensations, not only in permanency and pensions, but quite as much, if not more, in status, by reason of its removal from the private competitive wage system. While this is obviously true of clerkships and the like, it is strikingly true of the Army and the Navy — ^both of them manual employments. The pay in both these services is ridiculous (particularly, be it noted, for the officers— the brains); no private employer could enlist half the numbers necessary at anything like the wages paid to our soldiers and sailors. XI2 NATIONAL GUILDS " The -conditions of the employment, again, are worse than any respectable private business would permit itself to impose. Yet, in spite of these drawbacks, soldiering and saildring are superior in recognised status to private occupations such as bricklaying and tailoring — for the reason, as we maintain, that in them neither does the wage system prevail, nor is the service designed for the private profit of any individual or even class. From these and similar considerations we deduce the conclusion that the wage system, though as yet in a less degree than chattel slavery, is, ahd has always been, repugnant to the disposition of men. Men do not seek to escape from a system that suits them, nor do they associate with such an escape a superior status. If, therefore, as a matter "of fact, men instinctively and, as they become articulate, consciously seek to escape from wage slavery, it is fair to say that wage slavery, whatever its merits, has not the merit of being naturally acceptable to man. But in one sense the earth itself is not natural to man. The earth, our mother, is not so kind that the human race may do what it pleases. On the contrary, obliga- tions involving painful toil, not at all to our taste,, are perpetually being forced on us by the disposition of Nature. It is difficult to conceive a society in which these obligations can be entirely eliminated or the toil and sacrifice involved in them entirely transformed into pleasure. Utopians may dream of such a condition, but they reckon without their host. Something will remain, even when we have done our best, that is painful or requires exertion, or involves the necessity of chastening our pergonal inclinations. The question is, therefore, this : Is the wage system necessary, is it indispensable, is it a minimum sacrifice we must needs make for the purpose of exploiting Nature ? Admitted that the ex- ploitation of men by men is immoral, can this immorality THE MORAL FOUNDATIONS OF SOCIETY 113 be justified either by the necessities of the case or by the superior moral advantages of the wage system over any system we can devise ? It is generally accepted that the wage system is humanly superior to chattel slavery. It is also proved that the new system, the system of wage slavery, is more economically productive than the system it displaced. But" this, it may be argued, was a happy accident. We cannot expect that .our second moral leap will be equally successful economically with our first. We may find ourselves, in fact, if we abolish wage slavery, worse off than we are now. Without considering these economic objections at this moment, we may ask what moral advantages are claimed for the wage system in operation to compensate for and to justify the iimnorality involved in the wage system itself. Admitted that society cannot be utopianly perfect, is the moral balance of the wage system and its works in favour of or against its maintenance ? Does it pay society, morally, to maintain the wage system, for the moral values society derives from its discipline ? Let us see. There are, broadly, three defences of the existing system, differing in their degrees of moral value. ' The first bases itself purely upon the sanction of law,' assuming the law's inviolable sanctity. Mr. Grabbing Millionaire, asked to justify his position, replies with characteristic emphasis : "I accumulated my money under the law's protection ; I look to the law to continue its protection." The answer to this is simple : " What the law has given, the law can take away ; blessed be the name of the law." What has Mr. Grabbing Million- aire to say to that? Literally nothing. Like the soldier, who lives and perishes by the sword, this man hves and perishes by the statute-book. Economic power is his ; but it is of low voltage, and the political power that springs from it is vulgar and morally ugly ; there is no beauty in it that we should desire it. Great Britain, 8 tt4 NATIONAL GUILDS with its feudal traditions, has only in recent years developed this type in all its nakedness^ but it thrives in America. The British type came from South Africa. It must be evident that no community could withstand a shock from within or without if it had no stronger moral justification than this. But the present industrial system has weathered too many storms to warrant the assump- tion that its moral justification is rooted in so shallow and kaleidoscopic an institution as the statute-book. The mere fact of legal title does not morally suffice. We fiiust look for the moral sanction behind the law. The second class of defence may be summed up thus : The work of the nation must be done ; theorists do not do it ; the practical man does. Therefore he is but doing his duty. His duty accomplished, his moral justification is complete. The practical man does not pretend that the result of his labours is altogether benefi- cent ; he is too conscious of the iniperfections of human organisation to make any such inordinate claim. " But," he says, " I have honestly done my best ; a better man would doubtless have done better ; nevertheless, I am what I am ; what I have got has been acquired in good faith. I did not primarily rely upon law, but rather upon the innate fairness of my feUow-men. True, I have acquired wealth because I was diligent in business ; but I have not knowingly done an}?- man an injury. Further, taking it by and large, the only practical way to run the industrial machine is by means of the wage system. There is wastage, it is true, but so there is in every, machine. The wage system, on the whole, works, and works reasonably efficiently. .Its practicality gives it moral sanction." instantly admitting that the practical man makes out an infinitely stronger case than Mr. Grabbing Milhonaire, we must careftilly distinguish between the practical man's attitude towards to-day and to-morrow. The element of practicality as a moral force THE MORAL FOUNDATIONS OF SOCIETY 115 cannot successfully be disputed in regard to yesterday and to-day. lU or well done, the work of the world has been done. We may, indeed, concede more than this : no student of industrial development^would deny that great moral qualities have gone into the slow integration of the social system. The technical men have ungrudgingly given of their best, both to their employers and to their fellow-workers. Look at the long list of technical and commercial associations connected with almost every trade ; consider sympathetically the intellectual work (often of a high order) -gratuitously done out of an in- creasing sense of guild solidarity ; look into these men's heaxts and watch their glow of pride at the recognition freely given by their fellow-craftsmen, a far greater pride in the admiration won than in any monetary con- sideration ; knowing this, we readily and gratefully recognise our immense indebtedness to the great army of thinkers and experts who have in their several ways conquered nature, even though they had to utilise the wage system to compass their ends. We can under- stand this type of practical man (often nearly related to Carlyle's "practical mystic"), conscious of his moral strength, reading into the acpompHshed fact the same moral purpose that inspired himself. He is, indeed, the moral prop of the industrial system. Shame a million- aire into grudging admission that he has by no means earned the fortune that is his, and he is prompt to defend the system that enriched him beyond his deserts by referring us to the experts, the thinkers, the practical men evolved by that system. Just as he exploits their labour in the industrial sphere, so he exploits their character in the moral sphere. To-day, the practical man remains an ally of the capitalist section of society because he can, by this alliance, practically fulfil his gospel of achievement— of material achievement, of fruitful work in concrete ri6 NATIONAL GUILDS things. But it is our purpose to convince him that a far finer career of material achievement awaits him when the community is reorganised into its true industrial formation, when every effort of brain or muscle shall be definitely directed to economic production. We sliaU then see that practical sense as a factor in the world's work- is by no means a monopoly of the present possessing classes ; rather, that it is an element of our national genius and common to all classes. Unless we can prove . the practicality of Guild Socialism, and so attract the practical man, we admit that we are preparing for a moral and material catastrophe. But whilst paying tribute to our army of practical men and recognising their moral value and influence, it is still our "duty to examine closely into their claim that they have made the best of their available materials. To be set against their claim is the broad fact that, whilst they have overfed and overdressed and overhoused a small section of the community, they have underfed, underdressed, and vilely housed the vast majority of the population. On the score^f practicality, what has the practical man, the administrator, to say to this? He would probably reply, that he inherited the capitalist policy, that he was impotent outside its pur- view, and that consequently he had no alternative but to maintain the wage system. But this is a confession of failure. Is it a failure in morals ? To the extent that the practical man looked with contempt upon the claim of the wage slave to be a temple of God, to "the" extent that he ignored the imaginative, the intellectual and the spiritual elements (priding himself upon being above all things practical), he must be considered a moral failure — ^this practical man who built his house upon the sands. Thus we discover that the apologists of the industrial system fail in their contention that it alone evokes the great moral quality of practical achievement. In THE MORAL FOUNDATIONS OF SOCIETY 117 technical details it has achieved wonders ; in the larger considerations of national health and economy it has failed egregiously. There is a much more subtle defence of our present social system in vogue in intellectual circles. It may generally be described as the Conservative defence. Let us suppose some Conservative leader — say Mr. Balfour — to be arguing the case for the present system. He might say : I am profoundly conscious of aU the suffering, injustice, and demoralisation involved in the maintenance of our social and industrial system. It seems horribly unfair, and certainly cannot be defended if it be pre- ventive within the limits of the system. But the system must remain because it is -the true inheritor of all the great traditions, of the learning laboriously gathered through endless generations. Even more important, the faith handed down to us by the fathers must h€ conserved. Now democracy is practically the negation of culture and religion. To be sure, I grant that it may develop a culttire and rehgion of its own, but the link with the priceless past wiU be snapped. New-fangled rehgion and eccentric cultures are not to my liking — emphatically no. How do you think we have preserved all that was beautiftd and enduring in the culture of the ages ? Many factors doubtless entered into the edifice, but broadly speaking it has been built up, conserved and, preserved, by a privileged class of ample leisure and ■ large resources. Nor is that , all : this leisured class, on the whole, has bred wisely, and notwithstanding some blood vitiation since the advent of the industrial and financial magnates, we stiU remain, in the main, a real aristocracy. If in the practical affairs of mankind we are unpractical-, what of it ? It is not our function. We are sentinels sternly bidden to guard the sacred catena of civilisation, to see that there shall be no break in the continuity of history, tradition, and culture. What ii8 NATIONAL GUILDS prouder mission was ever entrusted to a privileged class than to maintain civilisation ? If, therefore, we pain- fully realise that the continuance of the wage system involves slavery and the horrible things implied by it, it is not because we do not sympathise, but because larger and more enduring considerations must prevail. We are unwillingly forced to this issue : culture and religion, the natural words by inheritance of an aris- tocracy (which economically depends upon wage slavery), are threatened by a new order of society which cares for none of these things. We cannot risk the loss of an- other Alexandrine library ; the Louvre was only saved by a miracle ; Cromwell's bullets are still imbedded in our churches. These facts are symbolical. Democracy triumphant blatantly writes " Ichabod " on our sacred temples. It is Aristocracy against the Mob. Thus admitted into the intimacy of Mr. Balfour's mind, we might, in reply, murmur, " O ye of little faith ! " But the response would hardly be adequate. For this, amongst other reasons : The abolition of the wage system involves not merely an economic revolu- tion, but, ex hypothesi, a spiritual revolution also. A spiritual revolution, indeed, wUl be necessary as a pre- cedent condition of the economic revolution ; for we are not so blind to the lessons of history as to imagine that an economic revolution for ihe better can be engineered by force and greed alone. Would then this spiritual revolution which we hypothecate be likely to destroy what is already spiritually desirable in existing society ? Rather it seems essential that it should come not to destroy but to fulfil ; not to make a complete break with its own spiritual past, but to release that past for new conquests. And in this assumption we are supported not only by reason but by facts manifest to everybody. For it is clear to-day, if it was never clear before, that spirituality of mind, culture and innate taste, are not THE MORAL FOUNDATIONS OF SOCIETY 119 now, if they once appeared to be, the monopolies of any one class. They can no more confidently be looked for among the wealthy, leisured classes of to-day than amongst the artisan and professional classes. The gloomy forebodings of Mr. Balfour that literature, science and art would droop and die under the democratisation df industry are based, therefore, upon a profound mis- apprehension of the distribution among our nation of the spiritual qualities of which he speaks. It is the nation that has always produced them ; and the nation may be relied upon to continue to produce them. Even to-day, with the mass of the population de- graded by wage slavery,, is it the young aristocrat or the young democrat who dreams dreams ? Is it the Pall Mall lounger or the tmtiring Socialist worker in the provinces who lives in ideas ? Is it the young man just "down from Oxford or Cambridge, or the studious working man who to-day soaks himself in genuine litera- ture ? Publishers, booksellers, and librarians could tell Mr. Balfour strange stories on this head. But what, after aU, does the Conservative really mean by art and Uterature and the morals and manners that flow out of them ? Is it not the art of a class and the literature of a select few ? This fact stands sure : there can be no great art and literature that is not rooted in the life of the people. We know, in fact, that the greatest periods of culture the world has ever seen have been associated with a national consciousness of which the self-consciousness of any given class is a contradiction. It was not on his class that Plato or Aristophanes prided himself; it was on his nationality. And it is no less, certain that Dante, Goethe, Shakespeare, and the great men of later Europe have been imbued with the spirit of their respective nations far more than with the spirit of their class. However it may be for the dilettantes of culture, the culture heroes themselves have always 120 NATIONAL GUILDS depended for their inspiration on the corporate spirit of the community in which they Hved. It is true that dilettantes have in all ages sought to appropriate for the few and for their class the works of communal minds, thus confining to party what was meant for the nation ; but it is equally true that the first to condemn them for their narrow-mindedness have been the commimal minds themselves . These latter know, indeed, the sources of their strength. It is not from any class that they draw their power, but from the nation at large and from its very soul. We may therefore reply to the Conservative's plea that the wage system in creating a privileged wealthy class creates the conditions of culture, by denying, first, that culture (which is merely good taste) is the property of any class ; secondly, by pointing to the examples of national culture and contrasting them with the ephemeral exotics of class culture ; again, by Calling to our support the culture heroes themselves ; and, finally, by challeng- ing in theory as well as in fact the assumption on which the case for an sesthetising oligarchy rests. For is it not obvious that the assumptions on which the Conservative's arguments depend are the assumptions that artists of all kinds prefer inequality to equality, that they are more happily inspired when working for the wealthy than when working for all, that, in the end, they can work for a class ? But we have yet to learn the name of any artist of the first rank who did not hate, even when he submitted to it, his servitude to the wealthy ; or was not drawn, usug.]ly against the opposition of the select few, to appeal to men of all classes, the nation^ at large. For, again, such men know not only that the soul of the nation must be whole that their art may flourish, but that their fitting hearers are scattered over all classes and in all ranks and walks of society. To assume that the wealthy, or even the leisured, have, as a class, innately more taste and appreciation of culture than the poor or THE MORAL FOUNDATIONS OF SOCIETY 121 the overworked, is contrary to common experience. Society is not now, if it ever was, graded in castes of mind corresponding with the rates of income. On the contrary, as Manu said, the castes are mixed and mingled in inextricable confusion. Anywhere, in any economic class, a Shakespeare may be born or a lover of Shakespeare may be found. It is simply, therefore, the desire of finding his complete order of hearers that drives the great artist instinctively to cast his net over the whole nation. From the nation he comes, and to the nation he desires to go. We may certainly conclude that the fears for culture which dilettantes may entertain from the equalisation of economic conditions are baseless and without the warrant of the creators of cjilture. On the contrary, it is only when all has been made equal that can be made equal that the spiritual inequalities of talent and, genius will plainly appear. Broadly, then, we may affirm that the moral founda- tions of existing society' are not more immune from destructive analysis than is its economic basis. The wage system creates two classes in the community, thereby splitting the nation in twain, to the destruction not only of its own soul, but of the soul of its two divided classes. With the abolition of the wage system, followed by the guild organisation of society as a whole, we shall reach a unity of economic interests and a correlative unity of moral perception. II A SURVEY OF THE MATERIAL FACTORS Before we can profitably begin oiir study of Guild Socialism, it is desirable that we should present a con- spectiis of the existing organisation of the industrial factors. As its name implies, Guild Socialism is neces- sarily a work of democratic social reconstruction. It is democracy applied to industry. Herein it differs funda- mentally from State Social-ism, which leaves to the bureaucrat the task of organising the industrial army without regard to the democratic principle. The term " Guild " implies voluntary organisation and democratic management. Historically considered, this is its true connotation. It is because of this tradition that we apply the word " Guild " to that democratic industrial organisa- tion which our inquiry into the wage system has per- suaded us is necessary if the future of the British national as well as working community is to be ensured. We have seen how certain it is that if the mass of the population consciously accepts the labour commodity theory and accordingly sells itself for wages, the servile state becomes inevitable. That way lie despair and the denial of every ideal,, every hope and every democratic expectation foi the future. The future welfare of Great Britain is bound up in its present will-power and capacity so to reorganise itself that it can produce and distribute wealth relieved from the incubus of competitive wages, tent, interest and profits. As we have already proved, the first step A SURVEY OF THE MATERIAL FACTORS 123 is the abolition of the wage system, for it is by means of wages that rent, interest and profits are exacted. But a mere declaration that wages are abolished is obviously absurd, unless an effective and superior sub- stitute for the wage system is forthcoming. That sub- stitute, in its turn, depends upon the coherence of the new organisation. But we must not even begin to elaborate the main outlines of the new social structure until we have clearly realised the content and extent of our task. Confining ourselves in this chapter to the material factors of the problem, we may say that they are — (i) production; (ii) population engaged in production and distribution ; (iii) the number of wage earners as distinct from administration ; (iv) the value of labour as distinct from the cost of the raw or semi-raw material.' Inas- " much as the primary consideration is our capacity to produce wealth, we shall restrict ourselves to that aspect of the inquiry, leaving the question of distribution to subsequent treatment. We would, however, remind our readers that we have already partially dealt with distribu- • tion in our chapter, "The Economics of the Wage System." The first census of production, carried out in 1907, disclosed the fact that 6,936,000 persons (salaried and wage-earners) are engaged in" productive work, the annual labour value of which is £712,000,000. The labour value here mentioned is calculated by excluding the value of the raw materials before they entered the factories. In the words of the report : "It represents the total value added to the materials in the course of which wages, rents, royalties, rates, taxes, depreciation, advertisements, and sales expenses and other establish- ment charges, as well as profits, have to be defrayed." It is extremely important that our readers should clearly understand that these figures do not include («) transit charges, (6) raw materials, (c) wholesale or retail dis- 124 NATIONAL GUILDS tributive charges of any kind. The £712,000,000 repre- sents only the value added to the raw material by the application of productive labour power, direct or indirect. At the risk of being tedious, let us again remark that we are deahng only with production. It will be observed that the number of employees, quoted above, includes both ad- ministration, that is, roughly speaking, salaried persons, and labour, i.e. the wage-earners. As, however, we deemed it essential to the argument that these should be distinguished from each other, we have been at some pains to ascertain the exact number of wage-earners engaged in the industries with which we propose to deal. It is fortunate that the preliminary reports of the Census of Production give us ajso the average wages of the wage- earners in certain trades : it is unfortunate that these reports do not as yet cover the whole field. As we write we have before us the particulars of about 140 different trades. We should like to set them all out completely in tabular form, but apart from the fact that our available space is limited, no serious end would be gained. We shall therefore arbitrarily select only those trades wherein 50,000 or more persons are engaged. Wherever possible we have given the average wages. The average wage in this table is probably over- stated. We have taken the average weekly wage as ascertained by the Census of Production and multiphed by 50, allowing, that is, only two weeks' unemployment per worker per annum. The building group, as a seasonal trade, we multiplied by 40, the figure usually given. In one or two instances we have grouped the returns for the sake of compression, and grouped the average output and wage accordingly. This industrial table is probably the most significant published in recent years. It lends itself to exhaustive treatment not only by the statistician, but by, the social A SURVEY OF THE MATERIAL FACTORS 125 philosopher. Without entering at length into its full meaning, we see certain important conclusions germane to our particular text to be drawn from it, and only to these shall we now refer. First : It is graphically evident that the wage system is the basis of modern wealth production ; for only by treating labour as a commodity and subjecting it to a Net Output. Persons Employed. Net Output Wage Average Trade Group. per Person Employed. Earners Employed. Annual Wage. £ t, t. Building and Contracting Trades .... 42,954,000 513.951 , 84 476,359 59 Coal Mines .... 106,364,000 840,280 129 826,567 Iron and Steel Factories . . 30,948,000 262,225 n8 » 248,161 82 Shipbuilding and Marine ' Engineering . 17,678,600 184.557 96 17S.105 72 Engineering Factories Rauway Construction 49,425,000 455,561 108 416,924 67 I7,ro3,ooo 241,526 71 232,736 67 Clothing and Millinery Factories .... 27,237,000 440,664 62 390,863 35 ' Boot and Shoe Factories . 8,965,000 126,564 71 117,324 46 Cotton Factories 46,g4T,ooo 572,869 82 560,478 SO Woollen and Worsted. 19,452,000 257,017 76 247,920 40 Jute, Linen and Hemp (Great Britain) 5,020,000 8r,703 61 79.534 34 Linen and Hemp (Ireland) 4,318,000 7r,76i 61 71.311 30 Printing and Bookbinding . 15,288,000 172,677 1' 156,161 ~" 1 Chemicals .... 9,464,000 51,088 185 45.107 China and Earthenware . 4,596,000 67,870 68 64,043 — Briclt and Fireclay, . 5,060,000 63,287 80 59,880 — Bread and Biscuit Fac- tories .... 11,590,000 rio,i68 los 97.724 — Cocoa and Confectionery ■ 4,975,000 60,735 82 54.13= — Brewing and Malting . 41,140,000 85,222 483* 69,249 — Timber Factories 6,soi,ooo " 74.564 83 66,224 — Furniture . . . • 9,245,000 9r,4i2 lOI 83.274 — Laundry . • . . 7,161,000 130,653 55 119,863 32 Gas 17,278,000 83.531 208 74,967 75 * Including Excise Duties. competitive wage price is it possible to pay rent, interest, profits, establishment charges and all other expenses. Towards these expenses, the individual building wage slave contributes every year the sum of £25 ; the iron and steel worker, £36; the shipbuilding worker, £24; the engineer, £41. More striking are the figures dealing with such necessities as clothing, boots, cottons, woollens and linens. Here the average wage is decidedly low, 126 NATIONAL GUILDS largely owing, it appears, to the presence of the com- petition of the industrial woman worker. Yet, low as these wages are, it will be observed that the industry returns very much the same surplus value as do the more highly paid trades. Thus we discover that low wages are not really due to bad trade, but to the ability of the purchaser of labour power to exact surplus value. A laundress earning £55 annually, pays £23 from this amount for the upkeep of her employer's establishment. From the commercial standpoint (and the standpoint, that is, of surplus value) there is practically no difference in value between the combined labour of an equal group of laimdry women, building employees, and shipbuilders. Thus it is evident that profits really spring from the regular employment of large masses of wage slaves, no matter of what kind. ' Second : The unequal wages paid to different trades yielding equal economic value is clearly an inequitable outcome of the existing wage system and calls for instant remedy. But it is certain that no immediate remedy is possible during the continuance of the present industrial system, because the capital invested in the various trades has been advanced on the implied understanding that wages shall not be raised at the expense of dividends. The return on capital must approximate in all industries. Third : So far as the productive processes are con- cerned, it is evident that there is no economic justifica- tion for the categories of rent, interest and profits, pro- viding that organised labour (in guilds or otherwise) undertakes, and is able, to maintain productive output and efficiency at> at least, the same standard now obtain- ing. We do not think it will be difficult to show that a better economic organisation of labour power would greatly improve upon the present system of capitalist exploitation. In flae meantime, the conclusion is irre- sistible that, consistent with the maintenance of rent, A SURVEY OK THE MATERIAL FACTORS 127 interest and profit, at their present rates, the employing class can make no further additioiis of any consequence to real wages. We have, in fact, reached the breaking point. Either surplus value must be reduced (which is impossible imder capitalism) or wages must be stereotyped at their present low average. It is for the Labour army to decide whether it shall remain for ever servile, or whether it shall absorb rent and interest, and by means of guild organisation undertake the functions of the present employing class and thereby become entitled the economic rewards. Fourth : There are probably fifteen million em- ployees engaged in wealth production or wealth distri- bution. But we find from this table that less than seven miUions Eire directly engaged in production. It will be necessary to inquire how far guild organisation can economise on distribution. If we put the cost of. pro- duction a,t 100, it wiU be found that the ultimate cost to the consumer varies between 140 and 220. Economic distribution is necessarily an integral charge upon pro- duction. How mtich of the existing system of distribu- tion is uneconomic ? That remains to be seen. We do not attach much significance to the problem so often discussed whether we suffer most from over- production or under-consumption or any variation of this irrelevant conundrum. But we draw two deductions from the returns before us of the Census of Production : (a) That any considerable increase in production would necessitate a correlative increase in the number of pro- ductive workers ; (6) that our capacity for increased pro- duction is only limited by our supply of raw materials and labour power. As, with one br two exceptions, there is yet no dearth of raw materials, it becomes an jextremely important issue whether organised labour, obtaining command of industry by declining to sell itself for wages, and reorganising its forces, would not find it 128 NATIONAL GUILDS desirable to draft at least two more millions of workers into productive occupations, either from- uneconomic distribution or from the underemployed or vinemployed. It would probably be one of the first tasks undertaken by a plenary conference of guilds. Fifth : In view of the fact that there are nearly seven million wage-earners occupied exclusively on production, and as there are fewer than three million trade unionists, more than 200,000 of whom are distributively engaged, it is evident that the first step in the reorganisation of the labour forces must be such a change in the terms of membership as shall enable each union to embrace every employee in its particular trade. In this connection it is important to note the apparently excessive number of employees assigned to the administrative side of pro- duction — foremen, clerks, andthe like. In the building section there are no less than 37,000 ; the iron and steel factories have 14,000 ; shipbuilding yards, 9000 ; 'engineering shops, 39,000 ; clothing, 50,000 ; boots and shoes, 9000 ; printing and bookbinding, 16,000 ; bread and biscuits, 13,000 ; cocoa and confectionery, 6000 ; timber, 8000 ; furniture, 8000 ; laundries, 11,000. Would it be necessary in these trades, under a guild system, to maintain an army of 220,000 men who do not to-day rank as wage-earners, but as overseers of wage- slaves ? No doubt a considerable proportion of these are of economic value, such as the scientific and technical contingents, but, as a class and having regard to their numbers, they certainly constitute a problem demanding serious thought. For example, how many of them are slave-drivers, pace-makers — the drill sergeants of the capitalist organisation ? And what is to be the attitude of the reorganised trade unions towards them? A thoroughly cordial one, we trust ; for these men are just as much the product of their economic environment as are the wage slaves themselves. A SURVEY OF THE MATERIAL FACTORS 129 Now the first general conclusion that springs to the surface, from an unbiased consideration of these facts, is that the work involved in reorganising in- dustrial society is an industrial and not a political task. The term " politics " has, in these later days, a special and narrow connotation. No doubt, to speak broadly, a man who occupies himself with the trans- formation of ' industrial society is engaged in political action. In that sense the Syndicalists are politicians, none the less so because they spend half their time in disavowing politics. But custom has rightly ordained that politics is an affair of State, the pursuit of problems relating to the community as a State and without par- ticular regard to its economic structure. Thus, a politician is. one who devotes himself to that category of questions which may suitably be dealt with by Parhament. Experi- ence has taught us. that the parliamentary function has practically no relation to production and distribution of wealth. It concerns itself with the conditions surround- ing men in the, pursuit of their industrial work ; it may by laws touching the public health favourably or un- favourably affect industrial work ; it may even specify the hours of labour a man, a woman or a " yoimg person " can work ; but it cannot, from without, abrogate the actual industrial system, because it did not create it. Indeed, as we have repeatedly shown, it is largely the creation and hot the creator of the industrial forces. In the accepted and proper use of the term, economics dominate politics, and, in consequence, politicians are economically impotent. Dmnng the past decade a school of Labour politicians has arrived which has sought to convince the wage-slaves that the conquest of political power is a condition precedent to the conquest of eco- nomic power. We now know that the economic power of labour, as indicated by the decline in real wages, has . systematically decreased with the increase in political 9 130 NATIONAL GUILDS labour activity. For every Labour Member of Parlia- ment there has been a corresponding loss to labour of at least a milHon sterling annually as measured by the fall of real wages. The work, then, that lies before us promises to be infinitely more fruitful than those barren political enter- prises for which we have paid so dearly. Is there any man or woman who, realising the meaning of the in- dustrial problem presented by the foregoing table, is so bereft of imagination that he cannot perceive how immensely beneficent an industrial campaign must be ? The plain truth is that the capitalist exploitation of labour by means of the wage system has led to the most frightful disorganisation. Take, tor example, our esti- mate of the average annual wage as set out above. We have allowed in every case, with one exception, for two weeks' unemployment every year. But look at the actualities as disclosed by the balance-sheets of the trade unions. In 1910 the building unions spent £113,635 on unemployed benefit, or 28-9 per cent, of their annual expenditure ; the miners spent i8-i per cent. ; the engineers and shipbuilders spent £213,893, or 22*4 per cent. ; the textile unions, £170,434, or 56-2 per cent.; the clothing unions, 19-1 per cent. ; the printers, 43-9 per cent. Do not these figures disclose the failure of the employers to run their businesses successfully in the interests of the nation ? Is it not high time that Labour should refuse thus to maintain the reserves of employ- ment out of its exiguous wage ? We have already quoted Mr. Binney Dibblee to the effect that the maintenance of labour reserve is a reasonable charge upon the employers. But we now see that rent, interest and profits, in demand- ing their pound of flesh, have at the same time refused to maintain their victims, even while the flesh was growing again. Anybody may do this for them — the - trade unions, private charity, the State ; but the capi- A SURVEY OF THE MATERIAL FACTORS 131 talists will not do it themselves. No vindictive attack upon the propertied interests need be considered — the situation is fap too serious to be governed by low motives — what we must understand is that Great Britain is faced with a crisis so terrific, so far-reaching, that unless she grasps its true significance, her economic decline is inevitable. We do not deny that she might conceivably go far on the purely material plane by frankly adopting the policy of the servile State and by deliberately com- pelling the mass of the population to pass into standardised and irremediable wage slavery. But, apart from the fact that no nation can exist " half-slave and half-free," we believe that slavery, economic or psychological, is so repugnant to British thought and habit, that when the Labour army wakes up to the realities it will sweep away the wage system and itself undertake the industrial work of the country. Ill AN OUTLINE OF THE GUILD There is no m5^stery attaching to the organisation ol the Guild. It means the regimentation into a single fellowship of all those who are employed in any given ihdustry. • This does not preclude whatever subdivisions may be convenient in the special trades belonging to the main industry. Thus the iron and steel industry may comprise fourteen or fifteen subdivisions, but all living integral parts of the parent Guild. The active principle . of the Guild is industrial democracy. Herein it differs from State Socialism or Collectivism. In the one case control comes from without and is essentially bureau- cratic ; in the other, the Guild manages its own affairs, appoints its own officers from the general manager to the office boy, and deals with the other Guilds and with the State as a self-contained unit. It rejects State bureau- cracy ; but, on the other hand, it rejects Syndicalism, because it accepts co-management with the State, always, however, subject to the principle of industrial democracy, Co-management must not be held to imply the right oJ any outside body to interfere in the detailed administra- tion of the Guild ; but it rightly implies formal and effective co-operation with the State in regard to large policy, for the simple reason that the policy of a Guild is a public matter, about which the public, as represented by the State, has an indefeasible right to be consulted and considered. It is not easy to understand precisely AN OUTLINE OF THE GUILD 133 how far the Syndicalist disregards the State, as such ; nor is it necessary to our task that we should make any such inquiry. For ourselves we are clear that the Guilds ought not and must not be the absolute possessors of their land, houses, and machinery. We remain Socialists because we believe that in the final analysis the State, as representing the community at large, must be the final arbiter. We can perhaps make our meaning clear by' an analogy. Suppose Ireland, Scotland and Wales to be self-governing bodies, but all subject to the Imperial Parhament, in which by that time we would expect all the self-governing Colonies to be represented. Assume it to be necessary for the Imperial Parliament to levy contributions upon its constituent imits. So many millions would have to be collected from England, so much from Ireland, Scotland, 'Wales, Canada, South Africa and Australia. The amounts would be agreed upon by a representative Imperial Parliament, but the methods of levying the tax would rest with each self-governing group, who would not tolerate any external interference. In this sense the Guilds would have large communal responsi- bilities, upon which they must agree with and often defer to the public ; but those responsibilities once defined, the industrial democratic Gmld, by its own methods and machinery, will do the rest. We thus are partly in agreement with the State Socialist or CoUectivist, who believes in conserving the State organisation and reserving to it certain functions, which we shall hereafter endeavour to define; but we are also in substantial agreement with the Syndicalist, whose -real contention, after all, is that the work men do they shall themselves control, being, through their unions, their own economic masters. Nor can we see that Syndicalism reasonably interpreted excludes the possibility of a purified political system concerning itself with the national soul. 134 NATIONAL GUILDS But the recognition of State organisation and State functions does not invalidate oiu: main contention that economics must precede politics. On the contrary, it strengthens it. The difficulty with modern statesman- ship is that it has to spend its strength on ways and means when it ought to be doing far greater work. It is hke a scientist or an artist who is perpetually distracted from his real work by domestic worries. Remove from statesmanship the incubus of financial puzzledom and it may achieve glory in the things that matter. And in all human probability a finer type of politician will be called into activity. Financial considerations corrode politics as effectually as they do the individual worker. Now, if the Guilds are in economic command, if, further, their labours exceed in results the present wage system, it follows that they will not be miserly in devoting all the money that is require^-^for the cultural development of the community. The Syndicalists tell us that the unions can do this better than the State. We are emphatically of opinion that a totally different type of administrator from the industrialist is required for statesmanship. The one type is rightly a master of industrial methods, the other is of disciplined imagination and spiritual per- ceptions. The fine arts, education (including university control), international relations, justice, public conduct — these and many other problems will' call and do call (in vain nowadays) for a special order of intellect, and must be susceptible, not to the particular influence of the Guilds as such, but to the influence of what Arnold called the best mind of the commimity. At the outset, the most important task of the Guilds will be the industrial reorganisation of society upon the basis of mutuality : ..in other words, the abolition of the wage system. This will carry them far. It involves the final solution of unemployment. Every member oi the Guild will possess equal rights with all the others, AN OUTLINE OF THE GUILD 135 and accordingly will be entitled to maintenance whether working or idle, whether sick or well. Further, it will be for the Guilds to decide, by democratic suffrage, what hours shall be worked and generally the con- ditions of employment. All that mass of existing legislation imposing factory regulations, or relating to mining conditions, to the limitation of the hours of work (legislation which we have previously described as sumptuary), will go by the board. The Guilds will rightly consider their own convenience and necessities. It may be discovered, for example, that times and conditions suitable to the Engineering Guild wUl not suit the Agricultural Guild. Legislation attempted from the outside would in such an organisation be regarded as impertinent. Even the existing old age pensions would be laughed to scorn as hopelessly inadequate. The Guild then would supplant the present capitalist class on the one hand ; on the other, it would assume, ~ instead of the State, complete responsibility for the ^ material welfare of its members. . Inheriting the direction of industry from the present private employer and capitalist, the Guild must be able more efficiently to produce wealth and more economically to distribute it. This involves the closest intimacy and GO-operation with all the other Guilds. The work of the community could not be done by the Guilds in isolation ; each must be in constant and sympathetic touch with the Guilds that supply them and the Guilds that distribute their products. There is no room here for any policy of dog in the manger. The Guild must never be allowed to say : " These things are ours." They must say and think : " We hold this machinery' and these products in trust." They must not exist to accumulate property ; their moral and legal status must be that of trustee. Thus there must spring ofit of the Guilds some form of 136 NATIONAL GUILDS joint management, not only with the other Guilds but with the State. The- abolition of the competitive wage system implied in the organisation of the Guild necessarily carries with it the abolition of all distinctions between the adminis- trative and working departments. It therefore follows that every type and grade of worker, mental or manual, must be a member of the Guild. The technical man, for example, must look to the Guild to give effect to his inventions and improvements, whereas formerly he looked to his employer or even to some outside capi- talist. It will be to the interest of all his fellow mem- bers to insist that whatever improvements he may sug- gest "for the increase of production or the decrease of manual toil shall be given a thorough trial. No longer wiU he be regarded as dangerous to the employees who, as competitive wage slaves, feared that his inventions might mean dismissal and starvation. The essence of Guild life is in its lujification of economic interest and purpose. There can be no doubt that the tendency inside the existing wage system is to level wages. The old dis- tinction between skilled and unskilled is rapidly being dissipated, both by the development of machinery and the economic pressure exerted by foreign competition, and the increased price of money. With this tendency we have no quarrel — on the contrary, we welcome it. But this wage approximation has as yet hardly touched the rent of ability still more or less willingly paid to tliose in the upper reaches of the administrative hier- archy. That they will finally find their true economic . level is certain. Meantime their services are rightly in demand and their remuneration is assured. Even if the process of wage approximation goes much further than we now "foresee, it is nevertheless inevitable that graduations of position and pay will be found necessary to efficient Guild administration. We do not shrink AN OUTLINE OF THE GUILD 137 from graduated pay ; we are not certain that it is not desirable. There will be no inequitable distribution of Guild resources, we may rest assured ; democratically controlled organisations seldom err on the side of gener- osity. But experience will speedily teach the Guilds that they must encourage technical skill by freely offering whatever inducements may at the time most powerfully attract competent men. There are many ways by which invention, organising capacity, statistical aptitude or what not may be suitably rewarded. It is certain that rewarded these' quahtifes niust be. Broadly, then, this is an outline of the Guild as we conceive it. Every succeeding chapter must be devoted to filUng in the details. // But we are not building Guilds in Spain ; ours is riot the Utopian adventure of the dreamers of yesterday. We are writing under the conviction of extreme urgency ; we believe that, the organisation of industrial society here roughly sketched out is the only practicable way to save the workers from wage slavery and psychological servility. We are not travellers from Altruria ; we live and move amidst the sordid realities of the existing wage system. Our plan is for to-day that we may prepare for a better to-morrow. The conception of Guild organisa- tion is not new. Twenty years ago it was common talk amongst the more far-sighted Socialists, and it would have been practical politics a decade ago had not the thoughts and activities of Socialists drifted away into the barren desert of conventional politics. • Never again wUl that mirage lure us from our path ; never again wiU we waste our efforts hunting the snark for the aggrandise- ment of shallow-minded Labour nonentities who dream of a political career ; never again will we fail "to remind Socialists that Socialism is an economic scheme and only to be achieved in the economic sphere. The particular industrial organisation which we call Guild Socialism V 138 NATIONAL GUILDS is the only plan by which we can practically realise industrial democracy. It is, indeed, practicable ; but practicable only so far as the Labour army wills it. And because it is so practicable we do not hesitate to set out in all its naked- ness the one great obstacle that bars the way. We have made it plain, we think, that the Guild must be absolutely comprehensive in its membership — like the sun, exclud- iiig none. Nevertheless, the nucleus of the future GitQd must be the trade union. In our chapter, " The Transi- tion from the Wage System," we emphasised the neces- sity of the trade unions thi'owing down their barriers and widening their borders so that everybody could come in. This is to-day the most important and most urgent thing to be done. Let us see what is involved. Again,' let us examine the actual industrial organisation of pro- duction so that we may understand how far trade unionism has to travel. We here set out some paf- ticulars as to personnel : Trade Group. Building and Gsntracting Mines and Quarries . Metals, Engineering and Shipbuilding . Textile Trades . Printing, Paper, Bookbind ing and Allied Trades ClotMng Trades Woodwork and Furnishing Trades . Persons Employed. SI 3.961 958,090 1,426,048 1,229,719 317.550 645.233 224,098 Wage- Earners. 476,359 939,515 1,330,902 1,189,789 279,626 552,165 210,407 Trade Unionists. 155.923 (68 Unions) 729,573 (84 Unions) 369.329 (211 Unions) 379,182 (273 Unions) 73,939 (38 Unions) 67,026 (40 Unions) 38,836 (91 Unions) AN OUTLINE OF THE GUILD 139 These representative figures might easily be ex- tended to include all our industries, but surely those given suffice. Is it possible to censure too severely the group of labour-politicians who have deliberately drawn away the trade unionist from his. true business of organising labour and led him a fool's dance through the political quadriUes ? We are sometimes blamed for our bitterness towards the political Labour Party. But indeed what we have written is mild compared with what we think and feel. Wages falling, falling, falling ; the workers helpless in such a mess of wretched disorganisa- tion — over 800 trade unions in the seven trade groups cited above — and men claiming to represent these hapless wage slaves complacently sunning themselves in the. fashionable purlieus of Parliament. It is desertion in the face of the enemy. Compared with these men Bazaine of Metz was a demigod. Yet, in sober truth, the situation is not so desperate as it looks. Consider, for example, the labour spent in organising no less than 800 unibns in seven different industrial groups: Wisely inspired, how much easier wotild it be to-day to extend the membership of seven large unions ? These smaU unions were the product of their period and environment. Economic develop- ment has left them temporarily in a back-water, but the necessities of wage slavery are now rapidly welding together these unions into federations, whilst a sense of urgency is spreading through the ranks concurrently with the growing realisation of the futility of politics. It is now the first and almost the only duty of every trade unionist to forget old associations and alignments and to work steadily towards the ideal of one union for each industry and every eligible worker in it. We look confidently for the rise of a young group of trade unionists who will understand the necessities of -'the case and forswear a political career, or, indeed 140 NATIONAL GUILDS any career outside their unions. The day of the political obscurantists on the make has almost closed in its ap- propriate darkness. Certain it is that these young men are now all that stands between the existing wage- system and its. crystallisation into hopeless pernianence. IV A WORKING MODEL Having sketched the outline of a Guild, let us examine how it applies in practice. Hitherto we have, discussed the 'manufacturing or productive industries. It woidd have been easy to have taken one of them for a working model, but it wiU, we think, prove more interesting to widen our survey and to examine the transport in- dustry.. Transport is obviously an integral part of pro- duction, involving the movement of raw or semi-raw materials in the first stage and ^ the distribution of the finished product in the third stage. Ecoiiomical trans- port, under capitalistic competition, is obviously of the highest importance. In all the industrial countries a fierce fight has waged between the manufacturing and the transport interests. This has been particularly the case in America, where the great railway systems have concerned themselves with the development of virgin territories and have levied excessive tribute. American politics have largely raged round transport. The great American railway systems have dominated Western politics for two or three generations, and afford ample proof of oiu- contention that economic precedes and determines political power. The novels of the late Frank Norris, particularly the first of his trilogy — The Octopus — accurately describe the tremendous power held by the railway interests. Even in the Eastern States this power is still exerted although counterbalanced 143 NATIONAL GUILDS to a large extent by the manufacturing interests. Roughly, American railway policy has been to charge the heaviest possible freight rates that the industries can bear,. Their rates have steadily advanced with the increasing pros- perity of the territory in which they operate. In Great Britain the railway companies have not exercised quite the same sovereign powers. In the nature of the case they could not do so, because they arrived on the scene after the manufacturing interests had established them- selves. Nevertheless, the British railways have contrived- to do remarkably well ; their capital has been " watered " and dividends are to-day paid upon inflated capital values. The, movement for the nationalisation of rail- ways has by no means been confined to Socialists, many Chambers of Commerce having declared in its favour. But capitalist solidarity has asserted itself. The Bir- mingham Chamber of Commerce some years ago was on the point of passing a resolution in favour of nationali- sation, when Mr. Arthur Chamberlain intervened. " Gentlemen," said he, " shall dog eat dog ? " Many manufacturers, smarting under railway exactions, would gladly see the railways nationalised, but they realise that nationalisation might not stop at railways. So they bear the ills they have rather than fly to others that they know not of. The German nationalised railways have in many ways subserved the interests of German industries, especially in the way of through freights from German manufacturing centres — Solingen, for example — to oversea ports. There are a thousand anomalies that have arisen in England in consequence. A Birmingham hardware manufacturer some years ago found it cheaper to ship his goods first to Solingen and thereafter to South Africa. By this means he evaded the depredations of the shipping rings. But the wage system presses as harshly on the French and German nationalised railways as on the capitalistic A WORKING MODEL 143 English lines. From the wage slave's point of view, the one is as bad as the other. Indeed, strangely enough, the privately managed British companies pay better wages and give better conditions than the German and French national systems. The nationalised French lines are to-day seething with discontent. The reason is not far to seek. The nationalised railway has to pay interest on the purchase money precisely as do the private companies, whilst it has been abundantly proved that bureaucracy, in the ac- cepted meaning of the word, is more incompetent than the Board of Directors with their more elastic methods. The wage slave, therefore, in passing from a capital- istic to a nationalised railway system merely exchanges King Stork for King Log. From these facts we deduce two conclusions : (i) So long as the investor has a first charge upon the assets or the profits, wage slavery must continue. {2) Bureaucracy being incompetent and private capital- ism oppressive, it follows that the only way out is the adoption of industrial democracy, as expressed in the GuUd. Let us then see how a Transport Guild would grow out of the disorganisation, chaos and wage slavery of existing arrangements. According to the Census of 1901, there were en- gaged in the " conveyance of men, goods and messages (excluding merchant seamen abroad)," 1,497,639 em- ployees. The 1911 Census will doubtless show an in- crease commensurate with the general increase of popula- tion, but the figures are not yet available. Roughly, then, the Transport Gmld must comprehend a member- ship of 1,500,000. How far towards this total do the transport unions go ? We shall quote the names of the various transport unions together with their membership at the end of 1910. It would be simpler to quote the 144 NATIONAL GUILDS sum total, but mention of the various unions gives an excellent bird's-eyeviewof the sub-divisions possible in the Guild, as also of the practical complexities of organisation : Amalo;amate(i Railway Servants . Belfast and Dublin Drivers and Firemen . Asspciated Locomotive Engineers and Firemen United Pointsmen and Signalmen . General Railway Workers . Railway Clerks of Great Britain and Ireland Edinburgh and Leith Cab Drivers . London Carmen .... National Amalgamated Coal Porters ■Amalgamated Tramway and Vehicle Workers Amalgamated Carters, Lorry men and Motormgri United Carters of England . Wigan and District Carters and Lorrymen Halifax and District Carters Newcastle Trarnwa;y Workers Limerick Carmen and Storemen . South Shields Steam-Tug Boatmen Wear Steam Packet Trade Society Tyne Steam Packet Prov. Society . Hull Seamen and Marine Firemen . Monkwearmouth Steam-Tug Prov. Society National Sailors and Firemen Marine Engineers .... Tyne Steam Packet Prov. Society (Newcastle^ Tyne Fogboatinen .... National Ships' Stewards, Cooks, Butchers and Bakers Tyne Watermen .... 'Watermen, Lightermen and Watchmen of the River Thames .... Weaver Watermen . Amalgamated Foremen Lightermen (Thames) Upper Mersey Watermen and Porters Mersey River and Canals Watermen Manchester Ship Canal Pilots Greenock and Port-Glasgow Rafters Amalgamated Stevedores . . Greenock General Porters' Labourers Montrose Shore Labourers Dock, Wharf, Riverside and General Workers 7S.IS3 386 19,800 3.790 7,284 9-476 212 S.690 I.53S 17,076 3.99S 2.839 146 359 388 890 205 90 638 S" SI 12,000 7,000 153 los 3.624 387 2,324 328 248 1,200 181 34 36 4,225 218 20 18,240 A WORKING MODEL Cardiff, Penarth and Barry Coal Trimmers and Tippers Mersey Quay aild Railway Carters National Dock Labourers . Labour Protection League Great Grimsby Coal Workers Grimsby General Workers . Limerick Harbour Employees Greenock Dock Labourers North of England Trimmers and Teemers Dunstan Trimmers Irish Transport and General Workers H5 i,4So 5.083 14.253 2,500 80 516 40 162 1,684 176 S.oii Altogether in 1910 there were 59 transport unions, with 1947 branches and a membership of 242,270. That is to say, rather less than one in six of the trans- port employees was enrolled in the unions. At the first glance it would appear that this list of transport unions is a tedious narration ; but those who possess imagination will imderstand the importance of thoroughly reaUsing the romantic panorama of human effort involved in the " conveyance of men, goods and messages," and the work necessary to the formation of the Guild. First and foremost is the work of uni- fication. These fifty-nine unions have each their official staff — ^their president, treasurer, organiser, secretary, branch secretaries, each according to its numerical strength and territory covered. Many of these xmions are kept isolated by the self-interested intrigues of these vested officials. Moreover, special agreements with em- ployees play a not inconsiderable part in the conscious or imconscious policy of the employers, who connive at the multiplication of unions on the principle of divide and conquer. But the growing enlightenment amongst the rank and fUe^ coupled with an increasing apprecia- tion of the united interests of the transport workers as a whole, wUl undoubtedly produce consolidation in the near future. This process, indeed, goes forward apace. Since 1907 four transport unions have been amalgamated 146 NATIONAL GUILDS with larger ones, whilst twelve unions have dissolved, their members joining other unions. The recent railway and dock strikes have taught the lesson of inter-union solidarity. Now let us attempt to visualise the whole transport army enrolled in one organisation and controlling the national " conveyance of men, goods and messages." Here we have the Guild ready to start operations. What will it do ? It must do two things concurrently : (r) It must j undertake the transport duties demanded by the nation I (that is, by the other Guilds), and do the work at least as efficiently and economically as it is done to-day ; (2) it must maintain and protect every member it has en- rolled. It is the maintenance and protection of the Guild members that really constitutes the social revolution now rendered urgent by the failure of the present in- dustrial system to maintain and protect its wage slaves. Here then we reach the practical issue of the abolition of the wage system. The fundamental distinction be- tween Guild control and private capitalism is that, whereas the latter merely buys labo\ir power as a com- modity, and at a price (known as wages) which will . yield the maximum rent and interest, the Guilds co- j operatively apply the human energy of their members, render themselves and their members independent of capitalist charges, and distribute the proceeds of their members' labour amongst their members without re- gard to rent or interest. Competitive wages, in fact, are abolished and, in consequence, there is no surplus value or fund available for the private capitalist. No wages to jdeld surplus value, no rent ; no wages, no interest ; no wages, no profits. Once a member of his Guild, no man need again fear the rigours of unemployment or the s.low starva- A WORKING MODEL 147 tion of a competitive wage. Thus every transport' worker, providing he honestly completes th^ task as- signed him, wiU be entitled to maintenance-^ mainten- ance equal to his present wage, plus the amount now lost by unemployment, plus a proportion of existing surplus value — ^that is, plus his present individual con- tribution to rent and interest ; and, finally, plus what- ever savings are effected by more efficient organisation. 1 He will not, therefore; receive wages (as. we now know them), because he wiU receive something much greater ^-possibly three times greater — ^than the existing wage standard. After all, maintenance is not the only consideration in life. There is a protective influence emanating from powerful organisations very precious to the individual and to society. The Chinese Guilds understand this.' Some of them are so powerful that they wiU redress their members' grievances even to the ends of the earth. Nothing could be further from our thoughts than any melodramatic interpretation of such a simple proposi- tion, even though we can easily foresee a rich field- for future novelists in the application of this principle. But in sickness and old age the transport worker must be protected by his Guild ; in distress he wiU look to his comrades for succour, probably to the Guild itself. In short, the Guild must be a fellowship as weU as an economic organisation. Just as the German student belongs to his corps, looking to it for social help and companionship, so the transport worker will belong to his Guild, drawing out of it not only maintenance, but fellowship. This is what we meant in the last chapter when we remarked that the guilds would make them- selves responsible for old age pensions, insurance, and sick benefit, and much else. In its proper place, we shall discuss the actual econo- mic working of the Guilds, how they wiU arrange their 148 NATIONAL GUILDS work, and how distribute the wealth they have created. It is reasonable and just, however, to assert that the Guild members, in return for moral and material bene- fits so infinitely in advance of existing Conditions, must put all their brain, muscle and heart into their work. Work ! To-day the transport worker does not work, he toils — and toil is the most wasteful process known to modern civiMsation. We have, then, 1,500,000 workers engaged in the transportation of men and, merchandise, and banded together to ensure a corporate return of their share of the national wealth. Observe, please, that it is not a question of niaking work ; it already exists, waiting to be done. Assuming the entire willingness of thd members to undertake their seversd tasks, the most important problem is efficiency. That means discipline, and discipline involves a hierarchy. From this set of conditions there can be no other conclusion. Democracy is not anarchy ; and industrial democracy impUes demo- cratic control of industry. This means, therefore, the democratic appointment of the hierarchy. The present general managers of the railways are appointed by shareholders in the interests of the shareholders ; the future general managers must be appointed by the Guild in the interests of the Guild. Inasmuch'^ as the Guilds are public institutions and not profiteering cor- porations, it follows that these appointments are also in the public interest. Nor need we shrink from the further conclusion that the appointment of a hierarchy involves a suitable form of graduated pay. As, ex hypoihesi, there is now unity of interest, the managers, sub-managers, foremen, and whatever other grades there may be, have no interest to serve save those of the members who have appointed them. In this connection, we pin our faith to the democratic idea without reserve. We believe the workman is the shrewdest judge of good work and of the A WORKING MODEL 149 competent manager. Undistracted by irrelevant politi- cal notions, his mind centred upon the practical affairs of his trade, the workman may be trusted to elect to _ higher grades the best men available. In the appoint- ment of their checkweighmen, for example, the miners almost never make a mistake. Doubtless injustices will from time to time be perpetrated; but they will be few compared with the million injustices done to-day to capable men who are habitually ignored in the interests of capitalist cadets. Our Transport Guild will probably, in the first place, continue in office all those who are there now, providing, of course, that they join the Guild. Next to be considered is the distribution of the work. Experience and estimate will indicate that' during the next quarter so many million passengers and so many nullion tons will have to be carried. To that end, there are available so many ships, so many carts and lorries, so many dramcars and. 'buses, and so many railway cars and trucks. At the outset there will be obvious econo- mies. Competing ships, competing cars, competing railways will all be regularised so that every available pound of energy wUl be turned to the most fruitful use. The estimate as to the value of transport as an in- tegral part of production wiU be then comparatively simple. The Guilds wiU necessarily start on the assump- tion that the standard of life of ail the workers must be practically the same, although, in the first instance, there may be some graduation of standard as between Guild and Guild. But assuming some approximation of life standard, probably the easiest way of arriving at value will be by estimating the number employed plus the cost in human labour of the machinery ^utilised. When this stage is reached, we shall learn the truth of a previous remark of ours that there will be an extraordinary 150 NATIONAL GUILDS transvaluation of the meaning both of labour and wealth. In our last chapter we differentiated ourselves from the Syndicalists by admitting the right of the State to co-managepient with the Guilds. In the most formal manner, now, we assert that the material of all the Guilds ought to be vested in the State ; the monopoly of the Guilds is their organised labom: power. Over their labour power the Guilds must have complete control ; but the State wiU be rightly and equitably entitled to a substitute for economic rent. A substitute, we say ; not economic rent itself ; for economic rent is a product of competitive private ownership. Adam Smith was the first to point out, and Thorold Rogers the first to prove, that rent was originally what we conceive it will be again under Guild Socialism, namely, a tax in return for a charter or licence. It was only when capitalism arose that the tax called rent was raised by successive stages to the competitive rack-rent it is to-day. But how will the tax payable by the Guilds to the State bfe computed if not by competition ? By the needs of the State and the proportionate means of the Guilds. Assume that the estimated national Budget for any following year is £250,000,000. This sum will require to be found by the citizens in their individual or in their collective capacity. But for those individuals who are organised in Guilds, it wiU, we imagine, be most convenient to tax them collectively, that is, through their Guilds. Thus the Guild would, in each instance, be required to levy on itself on behalf of the State an amount proportionate to the numbers of its members. Herein we have endeavoured to indicate the structure of the Guild in its main outlines. We are not so foolish as to fill in details, for, with the .growth of trade union organisation, practically every detail will change, in comparative value and significance. But we are con- A WORKING MODEL 151 fident that we have stated the case for the Guild with sufScient clearness to warrant our claim that we have pointed the way to economic emancipation and squared the conflicting interests of a State bureaucracy (very rightly the bugbear of every serious democracy) with industrial democracy. INDUSTRIES SUSCEPTIBLE OF GUILD ORGANISATION ' It is an easy task to group the various trades into their main industrial divisions ; but when we remember that there are 1200 different trades, crafts, and occupations in Great Britain, it is not so easy to apply the same system of organisation to them all. At first sight it would appear to be not merely difficult, but impossible. Nevertheless, it is reasonable to argue that, inasmuch as the wage system applies to all these trades, so also may any new method of remuneration for labour ser- vices. We do not propose, however, to argue this point to its extreme limit, because in reality the wage system itself operates arbitrarily. If this be so, it might fairly be urged that the Guild system would also operate harshly and arbitrarily. We shall not, therefore, commit our- selves to any final generalisation until we have discussed the various classes of trade seriatim. But we must be guided in our inquiry by some general principle, knowing full well that in the industrial complex there must neces- sarily be many exceptions to the rule, or divergencies that practically amount to exceptions. What, then, is this general principle ? It is not necessary to sketch here the development of the small into the large industry. Our chapter on " The Great Industry and the Wage System " must ' suffice. We know that the wage system has crystallised in correlation INDUSTRIES SUITABLE FOR GUILDS 153 with the growing dominance of the large industry. Therefore, as Guild organisation is the inheritor of ihe labour monopoly from the wage system, the Guild prin- ciple must primarily apply to the large industry. 'Broadly stated, therefore, our general principle is that all indus- tries and trades that obey the law of the economy of' large production are, prima faciCy susceptible of -Guild organisation. The Guilds themselves, it must 'be remem- bered, are not to be organised on hard-and- „ in France and Australia, 24. Railwaymen's Union, 301, 360. " Red-Tape " in the Guilds, 232. Reeves, Sir WilUam Pember, and compulsory arbitration, 51. Rent, interest and profit (1901- 10), lOI. „ origin of, 15a RentcJul, Dr. R., and a Medical Guild, 163. Robertson, J. M., on " Meaning of Liberahsm," 67. Royal Irish Constabulary, 224. Russell, C. E., on Australian Labour Party, 52, 53. " Sanitation " service (Panama), 201. Sassoon, Sir E., 88. Science and the Guilds, 160, 163. Sectionahsm, evils of, 102. Shareholders, regimented by financiers, I72. Shipbuilding and engineering, workers and production, 177. Slavery, American, State legis- lation, 44. Snowden, Philip, on strikes and syndicalism, 9, 354. Social Democratic Federation and class struggle, 4. Socialism in Britain, 9, 10, 19. „ in France and Germany, 32. Socialists enlisted under the Bureaucracy, 217. " Starving in the East End," 69. State and Guilds, 130, 263. State SociaUsm not disagreeable to financiers, 25. State SociaKsm and State Capitahsm, 21. Strikes, failure of, 106. future strikes, 107. Manningham, 7. miners', 6, 61, 102. railway, 6, 24, 61. transport, 6, 61, 79. 370 INDEX strikes and lock-outs (1901-10), lOI. new methods of organisa- tion, 106. Students' Corps in Germany, 147. " Subsistence " service (Panama), 203. Syndicalism and Guilds, 133. „ P. Snowden on, 9. „ S. and B. Webb on, 73- Teachers' Union and Register, 268, 269, 362. Teaching Guild, 269. Textile Guild, 207, 230. „ trades, sectionalisnl, 103. Trade, international, 27. Trade Union Congress,- deputa- tions to Ministers, 223. Trade Union Congress, open letter to, 287. Trade unions, evils of sectionalism, 102. Trade unions, nucleus of Guilds, 138, 356. Trade unions, maintenance of" labour reserves, 83. Trade unions, membership of, 103. Trade unions, new strike methods needed, 106. Trade unions, organisation and- recruiting, 249, 279. Trade unions and unemployment, 83, 130- Transit Guild, 229, 263. Transport Guild, 80-82, 146. „ strike, 6, 61, 79. Transport workers and Govern- ment, 105. workers, census of, 143. „ workers, metnbership of various unions,i44. Trust magnates, American and British, 174. Trusts, struggle with Guilds, 170, 277. Unemployment, Arthur Chamber- Iain on, 40. Unemployment benefits (1910), 130. Unemployment, capitalist reme- dies for, 35, 36. Unemployment, Labour Depart- ment and, 35. Unemployment, trade unions, 85, 130. Wage4om, negation of Demo- cracy, 44. „ and national life, 97, 353. „ how to end it, 100. Wages, Mr. Binney Dibblee on, 76. 77- „ agricultural statistics, 247. „ need for accurate defini- tion, 74. „ V. food prices, 94. " Wages " or " Pay ". ? 81, 36a. Walling, W. E., on Socialism, ^7. Webb, S. and B., on Sjmdicalism, 73- " Will to Power," 215. " Woman in the Sack," 6fl. PRINTED BY MOSSISON AND GIBB LTD., BDINBUKGH Messrs. BELL'S NEW AND RECENT PUBLICATIONS Self=Qovernment in Industry By G. D. H. cole Fellow of Magdalen College, Oxford Author of " The World of Labour" Third Edition. 4s. 6d. net In this book, which may be regarded as a contribution to indus- trial reconstruction, Mr. Cole approaches the problem of iiidustry from a standpoint that is at once theoretical and practical. ■ Especial attention is given to the Trade Union movement and the effect of the war upon it. 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