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Autho 
 
 ,5.i? m 
 
 Hobson, Samuel George 
 
 Title: 
 
 peace 
 
 Place: 
 
 London 
 
 Date: 
 
 1917 
 
^'A-'^3tQlQ-\ 
 
 MASTER NEGATIVE * 
 
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 '^%i ^"^^ -<i>^'^^ 
 
 BIBLIOGRAPHIC MICROFORM TARGE 
 
 ORIGINAL MATERIAL AS FILMED ^ EXISTING BIBLIOGRAPHIC: 
 
 Ilulisorv Sariiut'l (?«;0!\ti'e, 1870- 
 
 Guild piiiiciples 111 war and peace, by S. G. Hobson ... 
 with introductory essay by A. R. Orage ... London, G. Bell 
 and sons ltd., U>18. 1917. 
 
 vlil, 176 p. 18i cm. 
 
 Reprinted from the Contemporary review, the Herald of the star 
 and the New age. 
 
 "The largest section of this book, the 'Permanent hypothesis,' is in 
 part a critique of the Garton reconstruction proposals and in part an 
 experiment in the application of guild principles to the immediate 
 problems." — Pref. 
 
 X Lalx)r and laboring classes— Gt. Brit. ^ Gilds— Gt. Brit. ^ 
 Garton foundation, I/tndon. ^lemorandum on the industrial situation 
 after the war. 4^ Reconstruction (1914-1939)— Gt. Brit, i. Orage, 
 Alfred Richard, 1873- ii. Title. 
 
 F 18—23257 
 
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GUILD PRINCIPLES IN WAR 
 
 AND PEACE 
 
GUILD PRINCIPLES 
 IN WAR AND PEACE 
 
 il 
 
 BY 
 
 S. G. HOBSON 
 
 AUTHOR OF "IRTSH HOMK RUl.E — THE LAST PHASK 
 
 "national guilds" (with A. R. orage) 
 
 "letters to my nephew" (ANTHONY FARLEV) 
 
 WITH INTRODUCTORY ESSAY BY 
 
 A. R. GRACE 
 
 EDITOR OF THE AEJl' AGE 
 
 LONDON 
 
 G. BELL AND SONS LTD. 
 
 1917 
 
 
o 
 
 <:^ 
 
 
 00 
 
 IT. 
 
 11 
 
 C3 
 
 FOREWORD 
 
 jlT-o/. i * jS. d. Sd'^T: 
 
 Printed by 
 
 Morrison & Gibh Limited 
 
 lidinburgJi 
 
 My acknowledgments are due to the Editors of the 
 Contemporary Review, the Herald of the Star, and the 
 New Age, for permission to repubhsh these essays. 
 Although apparently unrelated, with some consequen- 
 tial redundancies, they present, I think, a reasonably 
 consecutive statement of the arguments and con- 
 siderations that have impelled me to advocate the 
 abolition of the w^age-system and the formation of 
 National Guilds. The largest section of this book, 
 the " Permanent Hypothesis," is in part a critique 
 of the Garton Reconstruction proposals and in part 
 an experiment in the application of Guild principles to 
 immediate problems. 
 
 S. G. H. 
 
CONTENTS 
 
 CHAP. 
 
 Introduction . 
 
 I. The Genesis of National Guilds 
 II. The Wage-System 
 
 III. Guild Organisation . 
 
 IV. Reconstruction 
 
 V. The Permanent Hypothesis— 
 
 1. The Roots of Discontent 
 
 Vl. The Permanent Hypothesis— 
 
 2. Quo Vadis? 
 
 VII. The Permanent Hypothesis— 
 
 3. The New Social Contract 
 
 vm. The Permanent Hypothesis— 
 
 4. Outlines . 
 
 IX. The Permanent Hypothesis— 
 
 5. Outlines {cotiti72ued) 
 
 X. The Permanent Hypothesis— 
 
 6. The Collectivist Alternative 
 
 I'AGE 
 I 
 
 15 
 
 46 
 62 
 
 98 
 
 108 
 
 iiS 
 
 128 
 
 Vll 
 
Vlll 
 
 CONTENTS 
 
 CHAT. 
 
 XI. The Permanent Hypothesis— 
 7. In War 
 
 XII. A Lecture on National Guilds 
 
 l-AGE 
 
 XIII. Some Affairs of the Spirit. (An Address to the 
 National Guilds League. Annual Conference, 
 8th April 1917) • • • • ' ^^4 
 
 I 
 
 GUILD PRINCIPLES IN WAR 
 
 AND PEACE 
 
 INTRODUCTION 
 
 In the following essays my colleague on the New Age, 
 Mr. S. G. Hobson, has set himself to the task, among 
 others, of examining the problem cf Unemployment 
 with a view to proposing a solution of it. He deals, 
 it will be observed, mainly, if not entirely, with what 
 may be called the normal and necessary unemploy- 
 ment involved in the wage-system itself. For it 
 becomes obvious under his analysis that, far from 
 being an occasional, vestigial, or superfluous feature 
 of capitalist industry (or Production for Profit), 
 Unemployment, or the existence of a reserve of Labour, 
 is an essential condition of it. How much or how 
 little of Unemployment or Labour in reserve may be 
 necessary from time to time is determined at any 
 given moment by the state of the market. When the 
 market is depressed, having been, we will suppose, 
 temporarily satisfied, the reserve of Labour or Un- 
 employment tends to reach its maximum. When, 
 on the other hand, the market is in full swing, the 
 reserve of Labour tends to fall to a minimum. Never, 
 
I 
 
 2 INTRODUCTION 
 
 however, under normal circumstances does this mini- 
 mum disappear into nothingness ; nor, since Un- 
 employment is a function of capitalist industry, can 
 it be made to do so. Much or Httle, a maximum or a 
 minimum reserve or stock of Labour on hand, capitalist 
 industry requires Unemployment as certainly as it 
 requires Employment. 
 
 But if Mr. Hobson is correct in concluding that this 
 is the case, and Unemployment is in reahty an indis- 
 pensable function of modern industry, the question 
 must be raised whether the cost of maintaining the 
 function should not in justice fall upon those in whose 
 interest it is discharged. For many years, as we 
 know, the main cost of Unemployment was made to 
 fall upon the Trade Unions whose economic function, 
 indeed, was primarily that of maintaining this reserve. 
 Later, however, the State itself came to the support 
 of the Trade Unions, though in such a manner that in 
 effect its maintenance wasconfined to the unemployable. 
 And, later still, by means of Part II. of the Insurance 
 Act, the Employers proper were brought into responsi- 
 bility as regards selected trades, by being required to 
 contribute to a fund composed of sums drawn from 
 the State, the workman, and themselves in roughly 
 equal amounts, out of which the reserve of Labour in 
 the scheduled trades might be maintained. What is 
 here contended, however, is that this division of the 
 cost of maintaining the unemployed, though fair in 
 appearance, is in fact more plausible than just. Pre- 
 cisely in so far as a reserve of Labour is necessary to 
 any industry, provision for its maintenance should, 
 it is claimed, be made by the industry and by the 
 industry alone. The State, it is plain, has only an 
 
 INTRODUCTION 3 
 
 indirect interest in maintaining the unemployed — the 
 indirect interest, namely, of safeguarding order. 
 The Trade Unions, likewise, have an interest secondary 
 to that of the industry itself, since their only object in 
 undertaking the support of their unemployed is the 
 maintenance of their own Union. Only the Employers, 
 therefore, have a direct interest in the matter ; and 
 one which, besides being essential, is comparable to 
 other of their functions. In what way, for instance — 
 sentiment apart — does either the necessity or the 
 obligation to maintain a reserve of Labour differ from 
 the admitted necessity and obhgation of the employer 
 to maintain his reserves of mechanical power, horse- 
 power, or raw materials ? In none of these instances 
 does he expect the State or other corporations to assist 
 him in bearing the cost of maintaining a reserve, — 
 why, then, should he expect the cost of his Labour- 
 reserve to be borne by others ? The reply, of course, 
 is that it is due partly to custom and partly to the 
 circumstance that in fact the employer is able to 
 throw the cost of his Labour-reserve upon others. 
 But not only is his right to do even what he can here 
 challenged, but proposals are made for instantly 
 laying upon his shoulders a burden which was always 
 properly his own, but which hitherto he has shifted 
 to the shoulders of the State and the Trade Unions. 
 In short, Mr. Hobson' s suggestion is that in future 
 every industry shall bear its own burden of Labour- 
 reserve, without the aid of either the State or the Trade 
 Unions. 
 
 Both the foregoing problem and the foregoing 
 solution are, however, to be distinguished from the 
 particular problem and the correspondingly particular 
 
INTRODUCTION 
 
 INTRODUCTION 
 
 I 
 
 solutions which must be presented and offered for the 
 unemployment caused by the war. A certain amount 
 of unemployment, varying between a maximum seldom 
 exceeding lo per cent, and a minimum seldom falling 
 below 4 per cent, is, we have seen, a permanent 
 necessity of modem industry ; and it constitutes, 
 therefore, a normal problem to which the normal 
 solution proposed by Mr. Hobson may very well apply. 
 But the unemployment which it is inevitable that the 
 war will leave in its trail is so far from being normal 
 in character or susceptible of normal solutions that, 
 like the war itself, it should be regarded as a lusus 
 naturae, a unique phenomenon. It is true, of course, 
 that intelligence would still suggest that in dealing 
 with a unique phenomenon we should have regard to 
 normal circumstances. As the world is not always at 
 war, and they are wisest who conduct war as if peace 
 would one day return, so also the conditions of un- 
 employment that will prevail after the war will not 
 prevail for ever, and they would be wisest who deal 
 with it without prejudice to the normal conditions 
 that will ultimately be restored. At the same time, 
 it is no use bhnking our eyes to the facts that the 
 after-war problem of unemployment is unique, that 
 the solution for chronic and normal unemployment is 
 inapplicable to it, and that the best we can hope from 
 it is a solution which, while offering no permanent 
 remedy for the normal condition of unemployment, 
 does not prejudice such a remedy, but, on the con- 
 trary, as far as possible facilitates its more speedy 
 application. In a word, the best we can hope for of 
 any solution of the special problem of war-unemploy- 
 ment is the reduction of the swelling to its normal 
 
 dimensions, and, without prejudice to the remedy 
 proposed by Mr. Hobson for the radical and chronic 
 condition. 
 
 In order to arrive at an appreciation, however, of 
 the character of the special problem that will be 
 presented to us, it is necessary to review briefly the 
 means by which the problem itself has been created. 
 In general it may be said that what we have had to 
 do during the progress of the war is to actualise an 
 enormous amount of Labour which hitherto has been 
 only potential. But this transformation is itself an 
 economic change of considerable importance ; for 
 the differentiation of merely potential from actual 
 Labour-power is the differentiation of Labour normally 
 not upon the market from Labour actually upon the 
 market. It is clear, in fact, that as a result of the 
 war we have made marketable a quantity of Labour, 
 running into millions of units, which hitherto was 
 unmarketable or only potentially marketable. And it 
 is no less clear, on reflection, that the transformation 
 backwards — the restoration, that is, of actual Labour 
 to its pre-war state of potentiality simply — is likely 
 to be difficult, if not impossible. 
 
 The transformation, it will be observed, has been 
 brought about by various means. In the first place, 
 it has been brought about by the addition to the 
 Labour-market of hundreds of thousands of people 
 who, under ordinary circumstances, would never have 
 been in the actual Labour-market at all, though always, 
 of course, constituting its potential source of supply. 
 Next it has been assisted to a degree beyond calcula- 
 tion by the removal of the restrictions that have 
 hitherto confined skilled work to skilled men ; by 
 
INTRODUCTION 
 
 INTRODUCTION 
 
 it 
 
 the conversion, in short, of merely potential skill into 
 actual skill. Finally, it has been intensified by the 
 use that has been made of labour-saving machinery, 
 methods of organisation, hours of labour, and similar 
 devices for increasing, by economy, the actual Supply 
 of Labour. And all these modes of converting potential 
 into actual Labour have had the effect, in terms of 
 economics, of creating a Supply of Labour and of 
 enlarging it beyond anything that was ever con- 
 templated as possible under normal circumstances. 
 
 The question must now be asked, What is to be 
 done with this specially created Supply of Labour 
 when the war, that called it into marketable being, is 
 over ? There are several possible replies which must 
 briefly be examined. 
 
 The first reply is virtually to assume that the 
 problem will solve itself under circumstances similar 
 to the circumstances that produced it. We may 
 expect, so runs the case, that precisely as the special 
 needs of the war called from potential into actual 
 existence so many thousand or milUon labour-units, 
 as many units will return voluntarily to their potential 
 condition when the special demand for their services 
 has passed away. They danced, in fact, when the 
 war piped ; and they will cease to dance when the 
 war pipes no longer. But this pleasing hypothesis of 
 a self-adjusting problem takes no account of the pro- 
 fundity of the change involved in the transformation 
 that has actually taken place. If it were, indeed, 
 only a question of returning to stock mere commodities 
 without any will of their own, we might entertain the 
 hope that as soon as the special demand for Labour 
 which the war has created had passed away, the special 
 
 supply would likewise cease to offer itself, and take 
 itself off the Labour-market to the easy relief of the 
 congestion that must otherwise threaten it. But, in 
 fact, the commodity of Labour differs from other 
 commodities in being inseparable from the psychology 
 of human beings in general. Labour, in short, is 
 both a commodity and a human being. It follows, 
 therefore, that in considering how the special war- 
 supply of Labour is to be disposed of after the war, 
 the human elements of which it is partially composed 
 must be allowed for as well as the factor of Labour- 
 power itself. The reconversion of actual back to 
 potential Labour, as has already been said, is not so 
 easy as the conversion itself ; and how difficult the 
 conversion has been the legislation of the war bears 
 witness. But when, in addition, the process of re- 
 conversion is likely to be opposed both by the actual 
 Labour itself and by considerable sections of public 
 and capitalist opinion, the chances of its natural trans- 
 formation, without rational direction, are small. We 
 must conclude, in fact, that under no conceivable 
 circumstances will the present actual Supply of Labour 
 resume its former dimensions without special effort 
 on the part of society and the State — efforts, moreover, 
 as great as, if not much greater than, the efforts that 
 were required to enlarge it to its present size. 
 
 A second reply, no less optimistic but no less specu- 
 lative, is as follows : that great as may now have 
 become, in consequence of the war, the actual supply 
 of marketable Labour, the demands of Peace will equal 
 it. In other words, owing to the ravages of the war, 
 the arrears of necessary work, the accumulated 
 appetites of various markets, and the fresh energy 
 
8 
 
 INTRODUCTION 
 
 of production, the demand for Labour, even when the 
 special demands of the war have ceased, will absorb 
 the present supply, including so much of the specially 
 created supply as does not at once relapse into 
 potentiality and disappear from the Labour-market. 
 Nobody, of course, can prophesy with certainty ; and 
 it would be unwise to deny that either the foregoing 
 or the earlier answer to our question of what is to be 
 done with the war-labour after the war may possibly 
 prove correct. Conceivably, that is to say, either 
 the special problem of the specially created Labour- 
 supply will solve itself by the voluntary withdrawal 
 from the market of all those units which have been 
 brought in by the war, or demand in peaceful spheres 
 will spring up as fast as it dies in the area of war and 
 absorb the Labour as effectively as the war has em- 
 ployed it. Both, we repeat, are conceivable ; but 
 neither, we must say, seems reasonable. For, in 
 regard to the second reply, we may observe that War 
 is a customer of such an appetite that the resources 
 not only of Labour at home, but of Labour in all parts 
 of the world, have been needed to keep it satisfied. 
 Where is there any sign of an industry springing up 
 immediately upon the heels of war, capable of an 
 effective demand, in this country alone, of live milhons 
 sterling a day ? Moreover, it is not altogether the 
 case that the destruction caused by the war will of 
 itself create an effective demand for commodities 
 corresponding to the losses sustained. Demand, in the 
 sense of want and need, there will surely enough be in 
 every country that has passed through the fever and 
 inflammation of the war ; but effective demand in the 
 market sense— demand, that is, bearing money in its 
 
 INTRODUCTION 9 
 
 hand — is certain in every war-stricken country to be 
 for several years less than it was before the war. 
 Under these circumstances, with the best will in the 
 world for production, and with every intention of 
 employing every unit of Labour that has found em- 
 ployment during the war, we cannot expect that any- 
 thing like all those imits will, in fact, find employment ; 
 but, on the contrary, we must expect a volume of 
 unemployment as much larger than the normal by 
 the amount by which the normal Supply of Labour 
 has been increased. 
 
 This being, as far as can be seen, the inevitable 
 outcome of leaving the problem to solve itself, or to be 
 solved by the mere hope that the demands of peace 
 will instantly equal and remain equal to the demands 
 of war, it becomes advisable to consider some special 
 measures for reducing the abnormal swelling of the 
 Supply of Labour. And we have, in this method of 
 approach to the problem, the advantage of reason 
 over chance, the calculable over the incalculable, and 
 the certain in place of the uncertain and speculative. 
 On the face of it, indeed, the problem, properly ap- 
 proached, affords us an unparalleled opportunity not, 
 perhaps, for the solution of the chronic problem of the 
 reserve of Labour (to which Mr. Hobson's more drastic 
 remedies are applicable), but for the scientific and 
 rational classification of our national Labour-power 
 according to the degree and kind of its economic 
 utiHty. Consider, for example, how much easier the 
 problem of mobilising our Labour-resources would 
 have been had there existed, when the war broke out, a 
 complete classification of Labour-ability by grade and 
 by potentiality. All that would then have been 
 
10 
 
 INTRODUCTION 
 
 INTRODUCTION 
 
 II 
 
 necessary as the demands of the war increased would 
 have been to call into the Labour-market, grade by 
 grade, the reserves, first actual and then potential, 
 and to allot to each of them a function in industry 
 corresponding to their ability. In place of the chaos 
 with its enormous extravagance that prevailed, we 
 might have had comparative order with comparative 
 economy. And it will be a blunder of the first magni- 
 tude if, now that the opportunity of making such a 
 classification at our leisure is presented to us, we do 
 not ensure ourselves against the repetition of our 
 proven mistakes and neglects. What is it that we 
 are suggesting ? It is that we should select from the 
 inevitable surplus of Labour that will result from the 
 war, the amount and kind of Labour to put back into 
 our reserves. Not leaving the selection to chance, we 
 ought deliberately to determine and define, in advance 
 of the actual circumstances, the classes and quantities 
 of Labour which, on the return of peace, must be taken 
 out of the Labour-market and restored to its pre-war 
 state of simple potentiaUty. 
 
 Nor is the criterion for such a selection by any means 
 as difhcult to discover as it might at first sight appear. 
 It must, in the first place, be economic — having regard, 
 that is, to the relative utilities in actual industry of 
 the Labour in question. And, in the second place, it 
 must be humane — in other words, the selection must 
 commend itself to the sentiments of common humanity. 
 With these two principles to guide us, it should not be 
 impossible or even difficult to solve our special problem 
 of war-unemployment, not only on its own account 
 but with advantages to society in general, the magni- 
 tude of which might almost compensate us for the 
 
 cost of the war. Let us now consider the method 
 in a little more detail. 
 
 There is a phrase of which we may make use which, 
 in a broad way, expresses the general idea we have in 
 mind. It is the " un-dilution of Labour," or, if you 
 prefer it, the re-concentration of Labour. Familiar 
 as we have become with the meaning of the phrase, 
 " the dilution of Labour." the undilution of Labour 
 may be said to convey the idea of the reversal of that 
 process, or the elimination from the actual Labour- 
 market of the elements with which, in response to the 
 demands of the war, it was diluted. The question 
 now presents itself, therefore, in this form : In view of 
 the two considerations above referred to, namely, 
 the economic and the humane, what elements existing 
 actually in Labour at this moment would it be wise 
 to draw off from the Labour-market and to place 
 into reserve, as soon as the war has come to an end ? 
 By what subtractions from actual Labour, in short, 
 shall the undilution we are in need of be brought 
 about ? No general answer is possible, and we should 
 be unwise to seek it ; but by whittling away, as it 
 were, at the problem an answer is surely to be dis- 
 covered. Let us approach it from each end to begin 
 with. First, it would appear to be both rational and 
 humane if that section of Labour represented by the 
 aged or comparatively aged workers were definitely 
 withdrawn from the Labour-market, by means of a 
 considerable lowering of the age for the receipt of 
 an old-age pension. At seventy, which is now the 
 statutory age for the retirement of the working classes, 
 men are not only economically of positively small 
 value, but in a variety of ways they cost industry a 
 
12 
 
 INTRODUCTION 
 
 INTRODUCTION 
 
 13 
 
 > i 
 
 great deal more than their contribution. For the 
 army of industry, Uke the military army, can travel 
 no faster than its slowest arm. We should, therefore, 
 propose, for the relief of industry, for the relief of the 
 Labour-market, and for the rehef of the working 
 classes themselves, the lowering of the age for retire- 
 ment from seventy to sixty, together with the raising 
 of the pension-allowance from five to fifteen shillings 
 for a single person and from ten shillings to twenty- 
 five for a married couple. Next, and at the other 
 end of the scale of Labour, it is desirable upon every 
 ground, civic, economic, and humane, that the statutory 
 age for the admission of young people into industry 
 should be raised from fourteen to eighteen. The waste 
 involved in the premature employment of boys and 
 girls is colossal. Nor only is their actual value in 
 industry comparatively soon exhausted, leaving them 
 slaves of routine and of little more utility than 
 mechanical tools of a simple type, but their value 
 forgone, their potential value which might, under 
 proper treatment, have become actual, is lost together 
 with the joy of their youth. Every consideration 
 that reason can bring to bear upon the problem before 
 us dictates the instant restoration to our reserves of 
 the Labour now employed between the ages of fourteen 
 and eighteen. 
 
 Another means of approach to our problem of reduc- 
 ing the abnormal swelling which the Supply of Labour 
 has undergone, is the restoration or the institution 
 in industries generally of the reduced working-day. 
 Experiences gathered during the war have proved 
 unmistakably that, even when every motive of 
 patriotism and profit has been concentrated upon the 
 
 will of the worker, his proper economy of working 
 consists rather in reducing than in increasing his hours 
 of daily labour. And if this has been shown to be the 
 case when the circumstances are the most favourable 
 to long hours that can be imagined, how much more 
 must it be the case when the circumstances are as 
 unfavourable as they will become when these special 
 motives are no longer operative. Not only, indeed, 
 would a shorter working hour appear to be indicated 
 as a true economy, both for the moment and for the 
 future, but we would even urge the economy of more 
 frequent and longer periods of rest or of holiday. 
 Were it not the fact that the exertions made during 
 the war will infallibly require (as they also deserve) 
 a period of comparative rest to follow them, if the 
 nation, in its weakest parts, is not to become per- 
 manently invalid, it would still be wise, in view of all 
 we have said, and of our special problem in particular, 
 to institute more holidays for the working classes, if 
 only as an economic means of reducing the actual 
 Supply of Labour to its probable demand. 
 
 Finally, it must be admitted that when all these 
 measures have been taken, when Labour over sixty 
 and under eighteen has been removed from the Labour- 
 market, and when the Supply of Labour has been still 
 further restricted by the institution of shorter working 
 hours and of longer holidays, there will still remain (so 
 enormous has become our actual Labour-power) a 
 Supply of Labour in excess of any permanent com- 
 mercial demand that can at present be foreseen. Still 
 further to reduce our Supply and to bring it more 
 exactly within the compass of the probable Demand, 
 we suggest, therefore, in addition to the foregoing 
 
14 
 
 INTRODUCTION 
 
 fi 
 
 measures, the institution of State or national service 
 of an economic character : works, that is to say, of 
 pubHc utility and designed to carry out the exploita- 
 tion of our natural resources on a scale beyond the 
 means, but not beyond the needs, of ordinary industry. 
 Consider, for example, the opportunity presented by 
 the demobilisation of the troops for their re-enlistment 
 and immediate re-employment in works, perhaps more 
 congenial to them than war, such, for instance, as the 
 re-afforestation of these islands, the restoration of our 
 water-ways, the rebuilding of our villages and city 
 slums, the organisation of mechanical distribution — 
 works, every one of them, as economically valuable 
 as they are certain, if left to private enterprise, to be 
 neglected. Is it impossible that the self-same State 
 that has known how to employ on national preserva- 
 tion four or five million men cannot find employment 
 on national well-being for a million if need be ? By 
 some such action, calculated, as it is, to draw off from 
 the swollen Labour Supply left by the war a consider- 
 able part, and, in conjunction with the other measures 
 already enumerated, our particular j)roblem would, 
 at any rate, be solved ; and we should have solved it 
 by orderly, rational, and economic means such as would 
 bring us, as a nation, both credit and profit. 
 
 Thereafter the problem of fimctional unemploy- 
 ment, as defined and considered in the following essays, 
 would become susceptible of the method of treatment 
 suggested by my colleague, the author of them. In 
 a double sense, therefore, this present essay is an 
 Introduction. 
 
 A. R. ORAGE, 
 
 CHAPTER I 
 
 The Genesis of National Guilds 
 
 If, in the months before the war, our statesmen were 
 anxious and preoccupied, so also were our industrial 
 leaders. The Labour World was in eruption, boding 
 ill for future industrial peace. The strikes of 1913 
 and 1914 — the miners, the railway and the transport 
 workers— presented new and perplexing aspects. For 
 not only did they mark a reversion from the political 
 methods that had prevailed for a decade, but they 
 showed a larger cohesion and a wider view of the 
 ultimate purpose of unified organisation. Nor is it 
 without significance that these strikes were followed 
 by the triple alliance between the three unions con- 
 cerned. The national unity induced by the war has 
 obscured these industrial issues ; they still smoulder 
 under the surface. Schemes of reconstruction that 
 ignore this fact are doomed to disillusion. 
 
 To appreciate the situation in 19 14, it is necessary 
 to glance back over the preceding years. In the late 
 'eighties and early 'nineties, the Trades Union Con- 
 gress was a respectable and highly conservative body, 
 composed almost exclusively of skilled workmen! 
 It was content to maintain the status quo as between 
 itself and the employers ; it seemed equally content 
 
 X5 
 
i6 
 
 GENESIS OF NATIONAL GUILDS 
 
 to let the unskilled workers fight their own battle in 
 their own way. Its leaders, of whom Mr. Broadhurst, 
 M.P., and Mr. Pickard, M.P., were the most powerful 
 and representative, were in their small way prosper- 
 ous and content, anxious not to be disturbed in their 
 little kingdom. Three events rudely shattered their 
 quietude : the Dock Strike, which called into industrial 
 and political consciousness a large army of unskilled 
 workers ; the Taff Vale judgment, which upset the 
 basis of Trade Union organisation ; the advent of the 
 Independent Labour Party, which spread rapidly 
 through Yorkshire and Lancashire, and speedily 
 transformed the ideas and purposes of a large section 
 of the skilled trade-unionists. The dock strike com- 
 pelled the Trade Union Congress to take under its wing 
 the unions of unskilled labourers that had sprung into 
 existence as an outcome of the strike. 
 
 This was but the culmination of the economic develop- 
 ment of automatic machinery, which had given to a 
 host of unskilled workers a footing in industry not easily 
 to be distinguished from their skilled brethren. Cer- 
 tainly the engineers had learnt their lesson, the Pallion 
 forge dispute, so disastrous and exhausting, being 
 fresh in their memory. But the real upheaval came 
 in the combined effects of the Taff Vale judgment and 
 the Socialist propaganda. The Socialists, particularly 
 the Independent Labour Party, urged from a thousand 
 platforms that the strike was an effete weapon ; that 
 organised labour must exert its political power to 
 achieve its objects. " Not the strike but the ballot ! " 
 In this way, Labour plunged into its pohtical adven- 
 ture. Whilst the strike was, in fact, never abandoned 
 and occasionally resorted to, the nervous energy of 
 
 POLITICAL LABOURISM 
 
 17 
 
 Labour was spent upon politics. It was sincerely 
 believed that Parliament, in its majesty, would give 
 to the wage-earner what he had failed to obtain by 
 union negotiations or by strikes. 
 
 The arrival in the 1906 Parliament of a phalanx of 
 forty Labour members, independent in form, if not in 
 fact, of the " orthodox " party whips, seemed a por- 
 tent, and was regarded with an unquiet sense of fore- 
 boding by many " old Parliamentary hands." For 
 the first session or two, the new party got very much 
 what it demanded. Indeed, it is probable that, had 
 it put its claims higher, they would have been conceded. 
 In all the industrial constituencies of England and 
 Scotland there was an ominous ferment not lightly 
 to be disregarded by politicians, whose first thought 
 is the security of their seats. It really seemed as 
 though a new landmark had been reached in our 
 pohtical history. But apart from the fact that the 
 new party had been badly led, no political leader of 
 genius or even of ordinary competence having been 
 evolved, industrial developments were only too swiftly 
 proving that economic power inevitably shapes and 
 moulds political power. 
 
 Feeble though the Labour Party had proved itself 
 to be in political acumen, singularly lacking though 
 it was in courage (the greatest quality in politics), 
 the fatal criticism had finally to be levelled against 
 it that even as it sat in ParHament, acquiring 
 Parliamentary habits, as though fey to the soil, 
 profits were mounting by leaps and bounds, and the 
 purchasing capacity of wages was shrinking. The 
 Board of Trade Report on Wages, issued in 1913, may 
 be said to mark the decline of the political Labour 
 
i8 
 
 GENESIS OF NATIONAL GUILDS 
 
 Party. This report disclosed the precise incidence of 
 the prosperous period, 1906-1910. Nominally, wages 
 in those years rose 6 per cent., but real wages showed 
 a decline of 10 per cent. In the Labour constituencies, 
 combined rent and retail prices rose from 10 per cent, 
 in Barrow, Dundee, and Glasgow, to 16 per cent, in 
 Blackburn, Bolton, and Stockport. (Incidentally, it 
 is worth noting that whilst rents increased iS per 
 cent., prices advanced 137 per cent.) It had become 
 painfully clear that political action, from the wage- 
 earner's point of view, was a failure, or worse. 
 
 Economists are agreed that wages is the price paid for 
 labour as a commodity. I do not think that amongst 
 pohtical economists there is a single dissentient 
 voice to that proposition. The human side of labour 
 may in our social hfe call for sympathetic considera- 
 tion ; in the strict economic sense it is a commodity, 
 the value of which fluctuates with demand and supply. 
 From this conclusion there is no escape, for rent, 
 interest, and profits can only be paid on the margin 
 secured by the entrepreneur, who buys labour for x, 
 and sells it in its congealed form for x-{-y. That is 
 the foundation of our existing social and industrial 
 system. 
 
 It was not always so. If we examine old bills 
 and accounts of the mediaeval period, it is interest- 
 ing and suggestive to observe that the wage-bill was 
 always rendered as distinct, and without addition to 
 the contractor's total account. He made his profit 
 (if it could be so called) out of the materials plus his 
 own labour. I have never seen any moral comments 
 upon the point, but I am inclined to the view that to 
 have made a profit, at least in that barefaced way, 
 
 LABOUR COMMODITY THEORY 
 
 19 
 
 would have been regarded as dishonest. It is, how- 
 ever, a distinction without much practical difference, 
 for wages, then as now, were based upon the cost of 
 subsistence. But the difference at least had this 
 significance : it separated and distinguished the 
 human element from the non-human commodities 
 for which the lord of the manor ultimately paid. 
 In these days, when pure economics tends to be 
 submerged in a rather inchoate sociology, the strict 
 economic meaning of wages is apt to be obscured. The 
 sociologist thinks of the man, with small satisfaction 
 to himself or his argument ; the economist thinks of the 
 labour. It puzzled Marshall, who sometimes takes a 
 wider view than his subject strictly warrants : 
 
 " The next of those characteristics of the action of 
 demand and supply peculiar to labour, which w^e have 
 to study, lies in the fact that, when a person sells his 
 services, he has to present himself where they are 
 delivered. It matters nothing to the seller of bricks 
 whether they are to be used in building a palace or a 
 sewer ; but it matters a great deal to the seller of 
 labour, who undertakes to perform a task of given 
 difficulty, whether or no the place in which it is to be 
 done is a wholesome and a pleasant one, and whether 
 or not his associates will be such as he cares to have. 
 In those yearly hirelings which still remain in some 
 parts of England, the labourer inquires what sort of a 
 temper his new employer has, quite as carefully as what 
 rate of wages he pays." 
 
 Marshall's point bears, in part, upon the problem of 
 the mobihty of labour, but it also asks the really vital 
 question, how far we can distinguish the man from his 
 
20 
 
 GENESIS OF NATIONAL GUILDS 
 
 LABOUR'S CLAIMS 
 
 21 
 
 •I 
 
 labour. As stated, it may seem remote from practical 
 affairs ; it is, in fact, highly pertinent, for it raises the 
 living issue of Labour's status. Because the worker 
 must go and be where his labour is sold, because his 
 labour is all that he possesses, how far is he removed, 
 in his life and person, from the economic valuation of 
 his labour as a commodity ? But, strictly considered, 
 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 be- 
 comes the buyer's exclusive property. This absolute 
 sale conveys to the buyer absolute possession and 
 control of the products of the purchased labour, and 
 stops 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 economically of 
 no further consideration. 
 
 The National Guildsman's answer is, sans phrase, 
 to throw the labour commodity theory into the discard. 
 He contends that labour is something more than a 
 commodity, because the human element enters into 
 it ; that it is, in fact, a " dominant," if I may detach 
 a Mendelian term ; that any scheme of values, any 
 tableau econornique, based on that theory, cannot 
 stand the modern analysis, and must sooner or later 
 fall to pieces. We are in good company. In a recent 
 letter to the Times, that distinguished lawyer, Lord 
 Wrenbury, also rejects the theory. Noting the want 
 of harmony between Capital and Labour (he has 
 previously argued that the labourer, in his own way, 
 is a capitaHst) and seeking for the explanation, he 
 
 remarks : " Principally because while both employer 
 and employed contribute to production, the thing 
 produced belongs to the employer to the exclusion of 
 the employed. This fact lies at the root of all in- 
 dustrial discontent." His conclusion is that " that 
 man will have solved the problem who finds the way 
 to give the employed upon commercial principles a 
 share and interest in the thing produced." 
 
 The logic of this pronouncement carries us a stage 
 beyond profit-sharing ; it involves partnership. Profit- 
 sharing is to reap a profit on the purchase and sale of 
 the labour commodity and its products, and then to 
 distribute some part of it amongst the employees. 
 It certainly does not postulate " a share and interest 
 in the thing produced." If I have a share and interest 
 in the productions of some company or firm, I am 
 undoubtedly, in some degree, a partner. I do not, 
 of course, wish to strain Lord Wrenbury' s meaning. 
 I gather that he does, in fact, favour some form of 
 profit-sharing, but undoubtedly the definite concession 
 of a share and interest to Labour constitutes a 
 partnership. In my opinion, it is a partnership that 
 is inevitable. 
 
 Lord Wrenbury, if he can carry the capitalist forces 
 with him, has inscribed a new charter of labour. I 
 hope he will not be shocked when I tell him that, so 
 far as he goes, he is in harmony with that new school 
 of economic thought which finds expression in a call 
 for National Guilds. The practical question arises, 
 however, how to crystallise his dictum into action. 
 It cannot be a partnership as between the employers 
 and the individual employees, for that way lies stagna- 
 tion. The employees, having secured " their share and 
 

 22 
 
 GENESIS OF NATIONAL GUILDS 
 
 interest in the thing produced," would become a Httle 
 close corporation. Having regard to the fluctuations 
 of employment, " the mobihty of labour," the partner- 
 ship must be between the em|)loyers and some repre- 
 sentative body of the employees — the trade-union, 
 in short. And why not ? The trade-unions cannot 
 remain in their present indeterminate position. Either 
 they must be destroyed or brought into closer organic 
 relations with industry. I may remind employers 
 that all previous attempts to smash the unions have 
 failed. They cannot be destroyed ; they are too deeply 
 rooted in our industrial life. Lord Wrenbury could 
 do no greater service than to draw up a treaty of 
 industrial peace between organised capital and 
 organised labour, conferring upon labour that " share 
 and interest in the thing produced," which he recog- 
 nises to be at the root of all industrial discontent. I 
 would merely venture to warn him that we have 
 intellectually travelled beyond that system of arbi- 
 trarily supplementing wages known as profit-sharing ; 
 that, in any event, it is incompatible with the 
 existing industrial system. The logic of his argu- 
 ment leads to partnership ; so also does the logic of 
 
 events. 
 
 If, then, we look beyond the dislocations of war, 
 and have regard only for those industrial conditions 
 that persist, two new factors emerge : the imperative 
 need for a change in the wage-earner's status : and a 
 definite recognition of partnership. The first is, of 
 course, involved in the second. But more also ; for 
 the spiritual and psychological results flowing from a 
 new and higher status of the wage-earners would, I 
 trust, finally remove all fears that the servile state is 
 
 BRAIN WORKERS 
 
 23 
 
 upon us. It is, however, when we come to discuss 
 partnership that our troubles begin. 
 
 Hitherto, I have referred only to the manual 
 labourers, using the word Labour in its generally 
 accepted sense. We must not, however, disregard 
 the claims of the middle and lower-middle sections 
 of the commimity — the brain workers, as they prefer 
 to be called. They, in their own way, contribute to 
 the production and distribution of wealth. Yet, 
 indeterminate though the position of the trade-unions 
 undoubtedly is, how much more indeterminate is 
 that vast mass of industrial and commercial society, 
 the " salariat," daily and hourly engaged in a struggle 
 to which the gloomy pen of George Gissing did but 
 faint justice ? The manual worker, hardened by 
 spells of unemplovment, by strikes and lock-outs, by 
 ever-recurring changes in the methods and channels of 
 production, has acquired a certain cheerful stoicism ; 
 but who, as yet, has plumbed the miseries, the carking 
 cares and fears, the thwarted petty ambitions of the 
 underpaid clerk, the foreman, the under-manager, 
 the small tradesman, the commission agent, the hard- 
 driven commercial traveller ? Even if their struggle 
 be mainly directed to the maintenance of a certain 
 respectability, however shabby, and motived by a 
 rooted determination not to descend into the ranks of 
 the wage-earners, shall we be the less sympathetic on 
 that account ? I do not doubt that economic pressure 
 must ultimately squeeze out of existence a number of 
 non-economic middle-class occupations (every type 
 and grade of " tout," for example), but when all 
 allowance has been made, this fact remains indis- 
 putable : the middle and lower classes contribute their 
 
1 1 
 
 24 
 
 GENESIS OF NATIONAL GUILDS 
 
 UNEMPLOYMENT 
 
 25 
 
 share to the work of the nation and cannot, therefore, 
 be equitably cxchided from a " share and interest in 
 the thing produced." Or, put in other words, the 
 sa lariat and labour are equally interested in the 
 organisation of industry and the form of remuneration 
 to be adopted. 
 
 If the middle classes were as easily classified as 
 the proletariat, our task would be relatively simple. 
 But the diihculty is that, regarded statistically, the 
 great majority are nondescript. Nor has it escaped 
 the attention of the capitalist leaders that their policy 
 is to divide the middle classes and conquer. This is 
 done by attaching the managerial elements, and by 
 grading every kind of administrative post, however 
 lowly, as higher in esteem than manual work. Never- 
 theless, when the lure of social superiority has played 
 its part to the utmost, the middle-class residue remains 
 unsatisfied, its claims are substantially rejected, 
 gradually yet certainly it approximates in sympathy 
 and purpose to the proletariat. The railway clerks 
 are a case in point. They are now actively associated 
 with the Railwaymen's Union. And there is a clerks' 
 trade-union already in existence. The '* residue " is, I 
 suspect, the majority. 
 
 Now, assuming that organised labour has won its 
 way through to some form of partnership (unorganised 
 labour could never do it), it follows, I think, that a 
 totally new relation is established between the manage- 
 ment and the manual producers. No doubt one can 
 foresee endless friction and irritation. Nevertheless, 
 fimdamen tally, a greater and more enduring harmony 
 is established. The friction we foresee is not the old- 
 rooted antagonism, the veritable class-struggle, but 
 
 rather the jolts inherent in the new procedure as the 
 various parties to the new social contract are dis- 
 covering and delimiting their new functions. I some- 
 times wonder whether the camaraderie of the trenches 
 may not prove to be a considerable factor in estab- 
 lishing the new order with greater good-will, in a 
 more accommodating spirit, than would have been 
 possible under pre-war conditions. 
 
 It has been necessary to pass in review the existing 
 social and industrial factors before I could even hint 
 at or approach any suggestion of a new formation 
 which would embrace the new economic conditions. 
 From the workers' point of view, the object to be 
 achieved is finally to secure themselves against any 
 reversion to the commodity basis of the valuation of 
 their labour. That valuation primarily comes from a 
 more or less fatalistic acceptance of the law of supply 
 and demand. If the price of labour— wages— is to 
 be governed for ever by this unseen god, there is no 
 redress, no change of status. A hopeless and unchanging 
 servitude stares the worker in the face. And the 
 price of labour must continue to be governed by the 
 maintenance of a reserve of employment, quite errone- 
 ously known as the unemployed. But if partnership 
 is to be accepted, it is evident that unemployment 
 cannot nuUify it, for unemployment is not permanent 
 to the person. It may or may not be a permanent 
 condition. No one worker is always unemployed. 
 If he were, he ceases to be a worker ; his case calls 
 for pathological investigation. Again, let it be em- 
 phasised, a shortage of work, at any given moment, 
 must not invalidate partnership. 
 
 The treatment of our unemployed is the blackest page 
 
it 
 
 26 GENESIS OF NATIONAL GUILDS 
 
 in our industrial history. We went wrong when we per- 
 mitted the employers to throw upon the community the 
 mamtenance of their reserves of employment. Econo- 
 mically it may be stated thus : Only the bare cost of 
 the labour commodity actually delivered enters into the 
 cost of the finished product. The cost of the reserves 
 of the labour commodity is a social charge. It surely 
 is now evident that the cost of reserve labour should 
 have been included in the cost of the finished product. 
 The cost of the one is vitally dependent upon the cost 
 of the other. This is no revolutionarv theory. So 
 conservative a writer as Mr. Binney Dibblee in his 
 valuable work, The Laws of Supply and Demand is 
 emphatic that each trade should have borne the cost 
 of its own unemployed. 
 
 It now becomes evident that if the industrial world 
 IS to be recognised on the basis of partnership " in 
 the thing produced," the new formation must compre- 
 hend all the industrial workers from management to 
 apprenticeship and industry by industry. The organisa- 
 tion cannot be local because industry has long since 
 ceased to be local; it cannot be sectional, because 
 all sections necessarily dovetail into each other. It 
 must be strong enough to provide for all its parts and 
 members, those working and those in reserve. In 
 short, it must be national ; nothing less restricted will 
 suffice. We have to discover what are our national 
 industries, main and ancillary, and constitute national 
 organisations to correspond. Management and labour 
 must join hands ; harmony must be evolved out of 
 existing chaos. These proposed large industrial 
 organisations are what we would call "National 
 Guilds." A National Guild is the combination of all 
 
 LABOUR MONOPOLY 
 
 27 
 
 the labour of every kind, administrative, executive, 
 and productive, in any particular industry. It 
 includes those who work with their brains and those 
 who contribute labour power. Administrators, 
 chemists, skilled and unskilled labour— everybody 
 who can work— are all entitled to membership. Nu- 
 merically considered, the trade-unions must form the 
 bases of these National Guilds; but they, in their 
 turn , must merge into the greater body. 
 
 It is, of course, evident that such an organisation 
 would have a complete monopoly of its labour power. 
 Possessing that monopoly, the commodity valuation of 
 labour would go by the board, and with it the wage- 
 system. We hear a good deal, in these later days, of 
 the " abolition of the wage-system." We are too apt to 
 ignore the real purport of the phrase. The average 
 man dismisses it lightly : " What does it matter what 
 you call it— wages, or pay, or salary ? The important 
 thing is, what do you bring home on Saturday, or 
 whatever is pay-day ? " But you cannot so cavalierly 
 dismiss a phrase that shows such tenacity. The 
 workman is not a fool ; he thinks out his position in 
 his own way and from his own standpoint. When he 
 speaks of wage abolition, he means the abolition of 
 the commodity valuation. If wages be the price paid 
 for the commodity labour, then he does not want to 
 sell his labour as a commodity, and consequently he 
 does not want wages. On the contrary, he wants his 
 pay or remuneration to be based on his personality. 
 He wants his economic claim upon the community to 
 be admitted as something human and not non-human. 
 I venture the opinion that the recognition of this fact 
 by capitaUsts and employers is the beginning of 
 
f I 
 
 28 GENESIS OF NATIONAL GUILDS 
 
 wisdom. In any event, protests against the exist- 
 ing wage-system increase in volume, whilst the move- 
 ment (partly conscious, largely unconscious) towards 
 National Guilds, through a larger unionism, develops 
 strength with significant speed. Here, for example, 
 is a resolution recently passed at a meeting of Leeds 
 engineers : 
 
 " That reahsing that as at present organised the 
 Trade Union movement is entirely inadequate, this 
 conference of the rank and file demands that the 
 executives of all unions catering for engineering 
 and shipbuilding workers immediately get together 
 and formulate a practicable scheme of amalgamation 
 that shall fuse all sectional unions into one industrial 
 union, having as its object the organisation of all 
 workers in the industry, regardless of craft or sex ; 
 and as its ultimate aim, the control of industry for 
 the complete aboHtion of the wage-system." 
 
 I may perhaps add that I have no personal know- 
 ledge of the circumstances. I merely quote from a 
 weekly Labour paper. 
 
 And now, what has the statesman to say to all 
 this ? Faced with an industrial revolution, is the 
 State to stand by, passive, inert? Are these great 
 producing and distributing Guilds to be permitted, 
 unchecked, to hold up the State, and incidentally the 
 consumer ? That would indeed be the apotheosis of 
 Syndicalism. Evidently we must inquire into the 
 relation of the State to industry. 
 
 It may now, I think, be confidently asserted that 
 the collectivist solution has proved a delusion. It is 
 true that the exigencies of the war have forced us 
 
 STATE INTERVENTION 
 
 29 
 
 into many State Socialist ventures, which in normal 
 times we should have rejected, not on grounds of 
 abstract principle, but for purely practical reasons. 
 We have discovered that bureaucracy, as now organised, 
 is inefficient ; that in the administration of our material 
 affairs, the bureaucrat has neither the knowledge nor 
 the skill of the independent industrialist. We are 
 rightly proud of our Civil Service, of its high standard 
 of honour, of its faithfulness, of its industry. Taken 
 as a whole, it is probably the most highly cultured 
 body of men in the world. But its culture is the 
 culture of the schools ; its training is all compact 
 of precedent and tradition. I am often struck with 
 its seclusion from the strain and struggle involved in 
 the conduct of industry. " These things are not for 
 us," it says in effect. And it is entirely right. For 
 this final and conclusive reason : It must concern 
 itself with principles of citizenship as distinct from the 
 economic function. I for one look to the time when 
 our political problems shall be discussed in the political 
 arena, undisturbed and unvulgarised by the selfish 
 intervention of the " interests." Parliament must be 
 finally so circumstanced, if it think right, to pursue a 
 political policy at economic loss. I do not think such 
 action would be frequent, because I believe that 
 ethics and economics are so closely related that, 
 almost always, what is ethically right will be found 
 to be economically desirable. That is not, however,; 
 to affirm that the State, as such, would not constantly 
 be confronted with practical problems of the first 
 magnitude. Not to go outside the ambit of the 
 present argument, let us assume that national pro- 
 ductive and distributive guilds are an accomplished 
 
 iHi 
 
 t 
 
30 GENESIS OF NATIONAL GUILDS 
 
 fact. What is to become of the great spending de- 
 partments ? Our military and naval requirements, 
 education, pubhc health ? And what of the con- 
 sumer ? The State must participate in the work of 
 the Guilds or abdicate. 
 
 CHAPTER II 
 
 The Wage-System 
 
 It would seem to be a psychological truth that all 
 of us who think and dream of freedom — mankind's 
 most precious gift — are pecuUarly susceptible to the 
 call of ever-recurring Messiahs or Messianic ideas. 
 It is at once our high hope and our tragedy. Our 
 hope, since if it were killed mankind would lapse into 
 spiritual and social inertia ; our tragedy, in that we 
 seem for ever doomed only to glimpse the Promised 
 Land, yet^ never to set our wounded feet upon it. 
 Nevertheless, our hope, builded upon a faith that 
 is " the substance of things hoped for," carries us 
 triumphant over evil and disappointment, our ears 
 attuned to " the still small voice," our spirits refreshed 
 by the lights that opportunely radiate the way. ** Man 
 is not man as yet," sang Browning, instinctively 
 conscious that rare spirits lure us on to the mark of our 
 high calUng. So it comes about that we rise superior 
 to the perpetual frustration of our hopes and reason- 
 able expectations, seeking for the cause of failure as part 
 of the day's work, so that the morrow's march may 
 be the better planned. 
 
 Although my own personal preoccupations have 
 been with the material — the economic — problems of 
 
 3* 
 
32 
 
 THE WAGE-SYSTEM 
 
 life, I have always been conscious (was it nearly three 
 centuries of Quaker blood stirring within me ?) that 
 the spiritual apperceptions must be correlated with 
 our economic principles and discoveries ; that the 
 moral and the economic are the obverse and reverse 
 of the same coin. If, then, what follows is mainly 
 an economic argument, it will not, I hope, be assumed 
 that I am unmindful of the sj)iritual imi)lications that 
 flow from — or create — economic conditions and 
 changes. Unless this be so, we are thrown back upon 
 a sterile economic determinism for which there is no 
 philosophic sanction whatever. There are, indeed, 
 some who contend that, granted certain economic 
 conditions — capitalism, for example — certain economic 
 results must inevitably ensue. But that need not 
 delay us. It suftices to afhrm that economic principles 
 are hnally conditioned by mankind's desires — desires 
 which may be good or evil or both. Above all, the 
 rooted instinct for freedom. 
 
 It is now more than a century since the inventive 
 and mechanic, the manufacturing, sections of our 
 community revolted against feudalism for the freedom 
 to exploit both nature and their fellow-men. Their 
 problem was comparatively simple ; they had merely 
 to render the wage - system more attractive to the 
 labouring population than the existing feudal system. 
 If we read the Uves of Thomas Cooper or Samuel 
 Bamford, if we study the real motives and principles 
 of Chartism, not forgetting Carlyle's essay, there can 
 be Uttle doubt that, horrible though the story of early 
 industrialism is, our forefathers instinctively beUeved 
 that the wage-system marked an advance on feudalism, 
 and, conjoined with political freedom, was to be an 
 
 NEW BASIS OF REVOLT 
 
 33 
 
 instrument of emancipation. It amounted precisely 
 to this : freedom to the labourer to sell his labour ; 
 freedom to the manufacturer to buy it. The Corn 
 Law Rhymes of Ebenezer Elliott and others, which 
 have passed into our Uterature, were directed, not 
 against the abominations of wagery (the time for that 
 was not yet), but against the poUtical and religious 
 oppressions of the aristocratic interests. 
 
 When wilt Thou save Thy people, 
 
 O God of mercy, when ? 
 The people, Lord, the people, 
 
 Not thrones and kings, but men. 
 
 It was a frenzied protest against a political system 
 subdued to the economic power of landlordism and 
 all that it stood for. Not a word or suggestion that 
 the oppression of the industrial magnates was as the 
 little finger to the thigh. Two generations of wagery 
 were to live their squalid life and go their ways before 
 we find singers like Edward Carpenter grasping the 
 true meaning of industrial oppression, singing in 
 similar numbers but with a different bias : 
 
 Over your face a web of lies is woven, 
 
 Laws that are falsehoods bind you to the ground, 
 
 Labour is mocked, its just rewards are stolen: 
 Arise, O England, for the day is here. 
 
 The industrial developments of last century had 
 two reactions: Lord Shaftesbury's agitation for the 
 amehoration of factory Ufe, particularly the exploita- 
 tion of child labour ; and the Trade Union movement, 
 aiming at the maintenance or increase of wages. 
 Widely different though both these movements were 
 in tone, temper, and objects, they held in common 
 
 3 
 
I 
 
 34 
 
 THE WAGE-SYSTEM 
 
 the belief that the wage-system was inevitable, even 
 if it was not defensible. Feargus O'Connor and 
 Robert Owen (both Celts, incidentally) vaguely 
 realised that there was some trickery, some fraud, in 
 it ; but they failed to find it. Owen thought that the 
 elimination of profits could be obtained by voluntary 
 association, whilst objecting to combination and 
 monopoly, never realising that the monopoly value of 
 labour is the way to freedom. Fourier's formula was 
 five-twelfths of the product to labour, four-twelfths 
 to capital, and three-twelfths to management. Louis 
 Blanc visualised an association of producers who 
 would market their commodities in the usual way. 
 He was, in short, a co-operator. The wage-system 
 was as much the bed-rock of their schemes as it 
 was of contemporary employers. Later came Marx's 
 analysis of capitalism, in which he, too, postulated 
 as essential the commodity theory of labour. Nor 
 were men's minds enlightened by the discovery that 
 the Shaftesbury reforms strengthened and regularised 
 the wage-system ; nor that the economy of high wages 
 had exactly the same result. Then, as now, wages was 
 the price paid for labour as a commodity ; then, as now, 
 the labourer's person was separated from his labour, 
 the labour commodity being the true object of the 
 employers' solicitude. 
 
 This severance of the labourer from his labour is no 
 mere academic distinction. It cuts at the roots of our 
 industrial life ; it explains much in the social history 
 of last century. If, for example, we analyse the Poor 
 Law Report of 1834— the most ghastly official docu- 
 ment ever written— we shall discover that the con- 
 tention underlying it is that employers claimed to buy 
 
 SHIFTING RESPONSIBILITY 
 
 35 
 
 labour when it was in demand, but declined any 
 cognizance of the labourers' bodies and souls, as 
 employers, when there was no demand for the labour 
 commodity. Accordingly, the responsibility of main- 
 taining unemployed life was foisted upon the com- 
 munity. The story of the tragedy that has continued 
 for a century, and still continues, beggars the realism of 
 a Zola or the passionate denunciation of a Carlyle. It 
 was as imperative to the employers that they should 
 maintain a reserve of employment (for that is precisely 
 what unemployment is) as that they should maintain 
 a reserve of cotton or wool or coal or any other raw 
 material. Nor ought the employers' responsibility 
 to have been remitted when improved machinery 
 threw labour on the market. Apart from the argument 
 — sound as far as it goes — that new machinery created 
 new industries and therefore ultimately increased 
 the demand for labour, it remained a fact that labourers 
 thus rendered unemployed belonged to the trade into 
 which they had been drawn by the employers, and, 
 since even as unemployed they fulfilled the function 
 of keeping wages at the competitive minimum, they 
 ought in justice to have been maintained by their 
 trades until they were drafted into the vaunted new 
 industries to be created by new machinery. 
 
 The mediaeval guilds shouldered this responsibility ; 
 the wealthy manufacturers of the great industry 
 systematically shirked it. They did not put their 
 reasons so bluntly as I state it now ; we must admit 
 that they never thought of it in that light. They were 
 convinced — it was the spirit and atmosphere of their 
 period — that, just as one enters a shop and buys a 
 pound of sugar, so they were entitled to go into the 
 
36 
 
 THE WAGE-SYSTEM 
 
 SALARY AND WAGE 
 
 37 
 
 ml 
 
 market and buy so many units of labour. Sugar 
 was a commodity ; so also was labour. We look 
 back with horror on the industrial and social conditions 
 of the period that culminated in the Poor Law Report 
 of 1834. Worse remains to be told : the precedent 
 of the severance of the labourer from his labour, then 
 created, continues to this day. We have covered it 
 with trappings of so-called social reform, with a more 
 humanised Poor Law, with Labour Exchanges, with 
 petty little mechanisms for accelerating " the mobility 
 of labour" (another false god!), but even as I write 
 our whole industrial world is based upon the hypothesis 
 that labour is a commodity, subject, Uke other com- 
 modities, to the law of supply and demand ; that the 
 sacred element of personality in labour, industrially 
 considered, must be disregarded. Employers still refer 
 to their employees as " hands." 
 
 The foregoing seems so clear to me, and yet finds 
 so little acceptance amongst the generality of man- 
 kind, that I often wonder whether I do not suffer 
 from some overpowering delusion. I comfort myself 
 with the reflection that, in former days, masters re- 
 garded their slaves as chattels, and that consequently 
 it need not surprise me that to-day employers regard 
 their employees' labour as a commodity. And when 
 I think a little more about it. I remember that the 
 abolition of chattel slavery was hastened by those 
 grim Northern employers who frankly avowed that 
 it was wasteful and uneconomic to maintain the body 
 when you could buy the labour for a wage. The 
 chattel was, by a sleight of hand, transformed into a 
 commodity. Let me set it down with less feeling and 
 more exactitude. Why do we distinguish between 
 
 " salary " and " wage " ? Why do we divide the 
 " salariat " and the "proletariat" into separate 
 classes ? And why does the salariat rank above the 
 proletariat ? The reason is so simple that I am almost 
 ashamed to write it. Because the salariat retains, 
 and is, in fact, paid for, its personality, whereas the 
 proletariat sells only its labour-power considered 
 purely as a commodity. Thus we instinctively and 
 rightly give to salaried Robinson a higher social status 
 than wage-earner Jones, because Robinson has a 
 recognised and recompensed personality, whilst Jones 
 supplies only a non-human quality, from which his 
 personality is ex hypothesi excluded, which the 
 economists brutally describe as the " labour com- 
 modity." When Robinson goes on holiday, his salary 
 goes with him ; when Jones goes to a funeral, his 
 " time " is deducted. In times of depression, Robin- 
 son, still on salary, sits at his desk ; Jones tramps the 
 streets, because no one hath hired him. But it by no 
 means follows that, because we do not buy Jones's 
 personality, he therefore has none. We put him into 
 a status or caste from which we do not formally demand 
 personality. We are, of course, glad to profit by his 
 personality ; but by putting him on a wage-basis we 
 defraud him of its economic value. 
 
 How, then, is the fraud effected ? We first fix the 
 wage rate at a competitive market value, reached by 
 the existence of a labour reserve, which we wrongly 
 call the unemployed (putting the charge on the com- 
 munity), then, having purchased the labour on a 
 commodity basis, the buyer — i.e. the employer — 
 obtains absolute possession and control of the pro- 
 ducts of the purchased labour and pouches the surplus 
 
3^ 
 
 THE WAGE-SYSTEM 
 
 value created. That is what Lord Wrenbury meant, 
 in a recent letter to the Times, that at the root of all 
 present discontent is found the problem : who shall 
 have a share and interest in the thing produced ? I 
 do not think he quite realised that he was raising 
 the embarrassing dilemma — partnership or wagery. 
 
 The psychological aspect of the commodity value 
 of labour is not less important than the economic. 
 Our moral sentiments are largely derived from our 
 social environment. An Oxford graduate, meeting a 
 commercial traveller in a railway carriage, finds that 
 he speaks a different language, thinks on a different 
 plane, sees life in different values. They may have 
 much in common — patriotism, for example — but, 
 generally, the two men, having passed the time of 
 day, are rather glad to lapse into silence, each reading 
 his own papers or books, every sentence of which 
 would be differently interpreted by the two men, 
 whose mother language tends to diverge each from 
 each. In this way, economic environment inevitably 
 creates different castes, with danger to the nation and 
 grave moral loss to its people. Now what in India 
 is called caste, in England is called status. I am far 
 from affirming that they mean the same thing East 
 and West. Status here is a much more elastic term 
 than is caste in India ; but nnUatis mutandis they 
 have a distinctly similar significance. In this con- 
 nection our phraseology is not without interest. We 
 say of some workman that " he knows his place " ; 
 it is frequently said that the harshest taskmaster is 
 the workman become master ; we must not let its 
 humour distract us from the true implication of the 
 epigram, " poacher turned gamekeeper " ; rather more 
 
 CLASS PSYCHOLOGY 
 
 39 
 
 remote, yet relevant, is the " beggar on horseback." 
 We regard it as incongruous that any man should get 
 out of that station in life to which it has pleased God 
 
 to call him. 
 
 It is sometimes difficult to ascribe his true status 
 to this or that man — it is possible, though not pro- 
 bable, that one might mistake a schoolmaster for a 
 merchant — but there can be no mistake possible in 
 instantly realising the status of a wage-earner. In 
 fact, whatever may be their several gradations, every 
 man who sells his labour as a commodity, and because 
 he does it, belongs markedly and unmistakably to his 
 own status. There is a universal conspiracy to put 
 him there and keep him there. We first put him in 
 a "working-class district," just as the slaves were 
 segregated in the " slave quarters," now known as 
 " Negro quarters." We next send him to a '* working- 
 class " school (note the recurrence of the word " class "), 
 where we are careful to instruct him and equally 
 careful not to educate him. Having graduated in 
 shop or factory, we bring all our influence to bear and 
 all our mechanical arrangements, particularly trans- 
 port, to compel him to marry early and marry one 
 of his own " class." If he marry a " middle-class" 
 girl we slightly shudder ; if an " upper-class " girl, 
 it immediately becomes either a scandal or a romance, 
 according to circumstances or the whimsies of the 
 Press. Then, when he is mated and settled, we 
 surround him with a veritable mesh of special legisla- 
 tion, partly contrived by far-seeing employers, partly 
 by political busybodies. In the Southern States, on 
 tram and train, seats are specially reserved " for 
 coloured passengers"; in Great Britain, we have 
 
40 
 
 THE WAGE-SYSTEM 
 
 n 
 
 14 
 
 the " workman's train." Whatever our motives, 
 good or bad, the status of the wage - earner has 
 crystalHsed into a social factor of terrible aspect. 
 
 We may be sure that the wage-earner does not 
 voluntarily belong to his economic status and will 
 leave it at the first opportunity. But the transition 
 from one economic condition to another is always 
 difficult, and in the case of the wage-earner is well- 
 nigh insurmountable. He is not the subject of a 
 mere social convention, such, for example, as divides 
 a manufacturer from a landowner ; his position is 
 rooted in economic subjection and he must remain 
 where he is pending an economic revolution. It is 
 sometimes asserted that if he would exercise his 
 pohtical powers he could win through. But not the 
 least of his disabilities is the fact that wage- servitude 
 limits and modifies citizenship. We know that 
 economic power precedes and dominates pohtical 
 action. If we doubt it, we need only read Ostrogorski's 
 constitutional studies, particularly his analysis of the 
 caucus system. Now the essence of wagery is that 
 economic power passes with labour power to the 
 entrepreneur. No economic power is reserved to the 
 labourer because his wage is based upon the bare cost 
 of sustenance. The result is that we have two types 
 of citizen— the "active" and the "passive." I 
 venture again to quote what I have written else- 
 where : 1 
 
 " Just as you cannot eat your cake and have it, 
 so you cannot sell your life and yet retain it. Brown 
 has Smith in his pocket because Smith's labour, and 
 
 1 National Guilds (Geo. Bell & Sons Ltd.), p. 54. 
 
 ECONOMIC SERVITUDE 
 
 41 
 
 m 
 
 the life having gone into the labour, leaves Smith 
 inert, lifeless, spiritually dead. Whatever the poli- 
 ticians may tell him, he is inevitably a passive citizen 
 because, in the guise of a commodity, he has sold his 
 hfe. 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 citizenship. 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." 
 
 " No nation," said Lincoln, " can exist half -slave 
 and half-free;" no political system four-fifths of 
 whose electorate is " passive " can work for righteous- 
 ness, even if haply it escape dissolution. 
 
 The question will arise in every generous mind, 
 why should not Great Britain, with its humanitarian.^ 
 traditions, sweep away this dishonest system? We 
 abolished slavery a generation earlier than did the 
 United States; if slavery, why not wagery? Ah! 
 If we only could! But there is this fundamental 
 difference between slavery and wagery : the aboHtion 
 of slavery consolidated the industrial system; the 
 abolition of wagery involves its destruction. We have 
 seen that when the employer buys labour, based on 
 the bare cost of maintenance, he secures to himself the 
 
42 
 
 THE WAGE-SYSTEM 
 
 li 
 
 market value of the product— as the Marxians quite 
 accurately phrase it, " the surplus value." It is out 
 of this surplus value that rent, interest, and profits are 
 paid. The entrepreneur is therefore in a cleft stick : 
 If he engage labour at the market value of the product 
 of labour, there is clearly no fund to pay rent and 
 interest, to say nothing of his own profit ; if he buy 
 labour at its commodity value (his onlv alternative 
 under industrialism), he lends himself, willy-nilly, to a 
 fraud upon Labour. Thus we discover that the in- 
 dustrial system, in the final analysis, is based upon 
 the commodity value of Labour, which, ethically 
 considered, is a trick or a fraud. That is why the finer 
 spirits, instinctively sensing its true nature, have 
 always rebelled against it, yet knowing of no cure. 
 For, being an evil, it infects its votaries with its con- 
 tagion, and we see it in their attitude towards life, 
 their tone and manners, their astonishing obtuseness 
 to spiritual values. When we determine wagery, we 
 destroy the existing industrial system. Let us at 
 least do it with our eyes open. 
 
 Between the comparatively small group that exists 
 on rent, interest, and profits (exercising, in consequence, 
 a disproportionate poHtical power), and the great mass 
 of wage-earners are the salaried classes, an inchoate, 
 variegated, and unorganised aggregation of fortuitous 
 atoms. It is, of course, impossible to generalise about 
 the middle-classes for precisely the same reason that 
 you cannot indict a nation. Nothing you can say or 
 criticise applies to all of them. Some of them, by 
 education, training, and milieu, are closely related to 
 the actual exploiters ; others are equally close, in 
 interest and sympathy, to the wage-earners. An in- 
 
 THE MIDDLE CLASSES 
 
 43 
 
 M 
 
 dustrial insurance agent, living upon commission, is 
 practically a proletarian. In many ways we may 
 say of the lower middle-classes that they are as much 
 under the harrow as the wage-earners themselves. 
 A clerk earning £2 a week, although of a higher status, 
 must necessarily live very much the same life as an 
 artisan : is probably sprung from the artisan class, and, 
 unless he possesses special abilities, will probably 
 die in the atmosphere and environment of Labour. 
 He has been educated at an elementary school with 
 working-class children, and, almost certainly, will 
 marry an artisan's daughter. 
 
 This particular type of the salariat is obviously 
 dominated by the conditions of the wage-system. It 
 is the well-considered policy of the industrial leaders 
 to keep the lower middle-classes in a different, and 
 nominally higher, status from Labour ; but their in- 
 comes are regulated by the amounts paid in wages — 
 so much to labour, a trifle more, plus a little mock 
 amenity, to the clerk and all who rank with him 
 in social estimation. The abolition of wagery would 
 bring in its train a most happy release to the lower 
 middle-classes from an intangible and subtle tyranny, 
 against w^hich they have not even the ineffective 
 redress of Trade Union organisation. Situated as 
 they are, often mocked by the lure of small social 
 advancement, it is hardly surprising that they be- 
 come saturated with a servile and obsequious spirit, 
 resulting in a dangerous and depressing moraUty, 
 which lacks even the saving virtue of that courage 
 and strength which makes our possessing and govern- 
 ing classes, the most powerful factor in our national 
 hegemony. 
 
44 
 
 THE WAGE-SYSTEM 
 
 In the constructive chapter to follow, I shall deal with 
 the forces at work destined to destroy the wage-system 
 and constitute a nucleus, in the form of incipient guilds, 
 to take its place. But I would now emphasise my 
 own conviction that no really enduring edifice can be 
 built until, realising the impHcations of wagery, we 
 protest against it on moral and religious grounds, and 
 will its destruction in our passion for justice. I am the 
 fi?^ to admit that the science of economics is neither 
 moral nor immoral ; it is non-moral. Properly under- 
 stood, it is a dispassionate examination of every purely 
 economic factor, a diagnosis of every economic disease. 
 Just as a doctor dispassionately reports on a prevailing 
 disease or plague, so does the economist report the result 
 of his inquiries into economic facts. But when we have 
 the doctor's report, it becomes our moral duty to 
 extirpate the plague by legislation, by organisation, by 
 personal example ; so also, when we have the econo- 
 mist's rejx)rt, it is equally our moral duty to eliminate 
 the discords and secure economic harmony. 
 
 I confess that I see no signs of an awakening amongst 
 our religious leaders. In other days, we might have 
 looked to the churches with some confidence. Alas ! 
 John Ball died a very long time ago. It is, unfortun- 
 ately, only too true that our churches take their colour 
 from their congregations. This church, well endowed, 
 is attended by the very pink of respectability. No hope 
 there ! That church, poor and unendowed, is ruled by 
 its deacons and elders, who, responsible for its small 
 revenues, more or less consciously dominate the teach- 
 ing and the preaching. But clerical inertia, I think, 
 must also be explained by clerical want of thought. 
 Never, in the history of civilisation, has organised 
 
 WAGERY AND THE CHURCHES 
 
 45 
 
 religion been so deeply separated from living issues as 
 to-day. The line of least resistance is the line of least 
 thought, and social reform is a soothing plaster to the 
 conscience. We have reached a stage in our social and 
 economic history when mere reform must give way 
 to the revolution involved in wage aboHtion. Is it 
 unreasonable to call upon all who are spiritually 
 minded, of all creeds and none, to make the great 
 decision that, so far as in them lies, wagery shall no 
 longer defeat or deter the ascent of man ? 
 
 i*' 
 
CHAPTER III 
 
 Guild Organisation 
 
 It is conceivable that the possessing classes, touched 
 by a spirit of compunction, might voluntarily forswear 
 the wage-system and call Labour into partnership. 
 Conceivable, for it has historic sanction?" but ex- 
 tremely unlikely, because new epochs do not come 
 without birtli-pangs. Whilst we look eagerly for 
 the co-operation of men of good-will, of every class and 
 condition, it would be foolish to rely upon any forces 
 in society other than those who most directly and 
 intimately and urgently benefit by the change. The 
 abolition of wagery is primarily a great movement of 
 emancipation, and they who would be free must 
 strike the blow. Tolstoy, great pacifist though he 
 was, always recognised that the exploiters were on 
 Labour's back and would have to be forcibly shaken off. 
 It is well that it should be so, -for freedom that comes 
 without a stern struggle may be no freedom but a 
 mirage. It is in the nature of things that those who 
 hold should strive to keep ; that they should en- 
 deavour to accumulate more. It is the simple truth 
 that to him that hath more shall be given. Endow 
 any class of men with power — the Bureaucracy, for 
 
 example — and we may be sure that before long 
 
 46 
 
 CAPITALIST DEFENCE 
 
 47 
 
 they will, as they say in Parliament, " seek further 
 powers." 
 
 Nor must we forget that the present possessors can 
 offer a reasoned apologia. There is the practical man, 
 honest and considerate in all his dealings, who may 
 contend that he has done his best despite all the 
 theorists. He inherited the wage-system ; he has 
 made the best of it, humanising it as opportunity 
 served. Not a bad fellow, this practical man, fearing 
 God and honouring his neighbour. Personally, I 
 like him. Then there is the aristocrat, classical in his 
 literary tastes, accepting the canons of the classical 
 econoniy, deeply concerned to maintain our traditions 
 and pass them on unsullied and even purified. Listen 
 to him : ^ 
 
 " The system must remain because it is the true 
 inheritor of the great traditions, of the learning 
 laboriously gathered through innumerable generations. 
 The faith handed down by our fathers must be con- 
 served. This great edifice, broadly speaking, has 
 been built up by the privileged classes of ample leisure 
 and large resources. 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 prouder mission was 
 ever entrusted to a privileged class than to maintain 
 civilisation ? If, therefore, we painfully realise the 
 continuance of the wage-system and the horrible 
 things implied by it, it is not because we do not sym- 
 pathise, but because larger and more enduring con- 
 siderations must prevail. We cannot risk the loss of 
 
 ^ National Guilds, p. 117. 
 
 I 
 
48 
 
 GUILD ORGANISATION 
 
 another Alexandrine Library ; the Louvre was saved 
 by a miracle ; Cromwell's bullets are still embedded 
 in our churches. These are symbols. Democracy 
 will triumphantly write * Ichabod ' on our sacred 
 temples." 
 
 It is the age-long defence of the established order. 
 Always, when we hear it, our hearts are moved, and we 
 instinctively respond to it. Yet, in my experience — a 
 long one now, unfortunately — of revolutionists, I 
 have never yet met an iconoclast. It is the love of 
 the great traditions and culture that urges them to 
 strengthen and beautify. 
 
 I looked. Aside the dust-cloud rolled, 
 The waster seemed the builder too; 
 
 Uprising from the ruined old, 
 I saw the new. 
 
 But can we not turn the classicist's guns upon 
 
 himself ? Is it not true that our greatest culture and 
 
 art developed before the wage-system began ? Has 
 
 not industriahsm vulgarised everything it has touched 
 
 — craftsmanship, architecture, art, literature, music ? 
 
 Did not Ruskin love the ancient culture and our great 
 
 traditions ? We remember — indeed, we cannot forget 
 
 — his criticism of our modern architecture. Did not 
 
 Matthew Arnold love culture and beauty ? We 
 
 remember his fulminations against the Philistinism 
 
 of his period. 
 
 We too now say 
 That she, scarce comprehending 
 The greatest of her golden-voiced sons any more, 
 Stupidly travels her dull round of mechanic toil, 
 And lets slow die out of her life 
 Beauty and genius and joy. 
 
 TRADE UNIONISM 
 
 49 
 
 I do not think we need be deeply moved b}^ the 
 plea that a privileged class should be maintained to 
 guard the sacred catena of civilisation. Our literature, 
 our pictures, our furniture, our houses point to a very 
 different conclusion. 
 
 Our answer to the practical man is equally decisive. 
 " Yes ; you have done your best, but look ! . . . 
 Charles Booth has just died and Seebohm Rowntree 
 still lives." 
 
 It was natural and inevitable that the wage-earners 
 should combine to protect themselves, in some degree, 
 against the brutalising effects of wagery. They, like 
 their employers, had never analysed it ; they knew 
 nothing of the actual economic process by which they 
 were despoiled and kept in bondage. But they knew 
 where the shoe pinched, and sought what easement 
 they could. They accepted the wage-system as a 
 natural law and only wished to mitigate its harshness. 
 So they formed trade-unions and friendly societies 
 and fraternities, gaining some measure of inspiration 
 from the fraternal relations that ensued. Their history 
 is not without turbulence ; nor were their decisions 
 always wise and prescient. The same can be said of 
 our statesmen, so why blame unduly the trade-imions ? 
 They engendered riots and were as often jockeyed 
 into rioting by premeditated provocation. All our 
 industrial centres have a story to tell in this regard. 
 Not once nor twice have the military waited for the 
 provocation that preceded the reading of the Riots 
 Act. We must remember, however, that strikes and 
 riots are but incidents in the history of Trade Unionism. 
 Not because of strikes, but despite them, has Trade 
 Unionism become a necessary factor in our economy. 
 
50 
 
 GUILD ORGANISATION 
 
 II: 
 
 Mr. Binney Dibblee, a conservative and cautious 
 economist, in his book, The Laws of Supply and 
 Demand, has this to say : 
 
 " They are usually considered to be associations 
 founded to control the supply of Labour and there- 
 with to bargain for its price with the employer, and, 
 as they have energetically p)erformed this duty for 
 their members, it is undeniably true that their work 
 in this respect is of the very highest 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 pubhc,' they could never have had the 
 principles of cohesion and permanence which have 
 raised them to the mighty power they now prov^e to be. 
 Philosophically speaking, their final and necessary 
 cause was the maintenance of the reserves of labour, 
 which are required by the system of modem pro- 
 duction." 
 
 I have already pointed out that, in equity, the 
 industries themselves should have maintained their 
 own reserves of labour. But the employers argued 
 that they need only buy the labour commodity as and 
 when they wanted it, leaving the care of the unem- 
 ployed to the Unions or the community. Mr. Dibblee 
 agrees with me : 
 
 " 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 
 
 TRADE UNIONISM 
 
 51 
 
 a halo ? Of all the crimes committed in the name 
 of Knowledge this was, perhaps, the worst. It has 
 done more harm over a century 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 ? " 
 
 What was this body of doctrine which " has done 
 more harm over a century than all the wars of the 
 period " ? Nothing more nor less than the com- 
 modity theory of labour, the wage-system. And the 
 only mitigating factor, so far as I know, was Trade 
 Unionism. It is, therefore, hardly surprising if we 
 must look to it as the nucleus of the new coming 
 economic formation to produce wealth without wagery. 
 
 Assuming, then, as we must, that the employers 
 will not volimtarily forgo their power to buy labour 
 in the market on exactly the same principle as they 
 buy cotton or wool or leather or any other commodity, 
 the practical question arises : How can Labour 
 circumvent the Employer and exact a social value for 
 its labour ? The only answer I know is that it must 
 secure a monopoly of its labour, by an organising 
 campaign transcending in brains, imagination, and 
 magnitude anything it has ever before attempted. 
 It is here that we disclose the root and cause of the 
 class struggle. Both Capital and Labour are agreed 
 that the production of wealth is essential to our 
 national life. Capital aifirms that production is 
 
m 
 
 52 
 
 GUILD ORGANISATION 
 
 only possible, on commercial principles, on its freedom 
 to buy labour-power according to the laws of supply 
 and demand. Labour replies that, whereas formerly, 
 that system seemed preferable to feudalism, its result 
 has been to keep the labourer always on the verge of 
 starvation and to defraud him of the social value of 
 his labour. Therefore, the time has come to make 
 a fundamental change. Production can be almost 
 indefinitely increased, but it must be by a partnership 
 between Labour and Capital or between Labour and 
 the State, the latter for preference. The class struggle, 
 therefore, has a negative and positive aspect : a re- 
 fusal any longer to sell labour as a commodity ; a 
 proposal that Labour shall have a definite " share 
 and interest in the thing produced." The struggle 
 obviously centres round the decision who is to control 
 labour. Capital can only control labour through the 
 medium of a free market ; Labour can only control 
 labour through a monopoly market. The issue is 
 definitely joined. 
 
 It is important that we should clearly understand 
 what is meant by supply and demand. When an 
 employer engages labour, he speaks as though there 
 is a law of supply and demand in regard to labour. 
 This view is too narrow to be tenable. The true 
 position is that there is a fluctuating demand for the 
 products of labour. Now, it is evident that, even 
 if Labour, by organisation or by a legal enactment 
 compelling every worker to join his appropriate Union, 
 were to secure a monopoly of labour-power, the demand 
 for manufactured products would still fluctuate ; 
 but the supply of labour-power would be permanent 
 and stable. The result of the monopoly control of 
 
 THE GUILDS 
 
 53 
 
 labour by Labour would therefore be that all the 
 workers concerned would have rights of maintenance, 
 and imemployment would be recognised for what it 
 really is — namely, a reserve. 
 
 I think the ground is now cleared for the considera- 
 tion of the constructive side of our programme. Re- 
 jecting both the theory and practice of the commodity 
 valuation of labour, realising that such rejection can 
 only be attained in practice by organising labour 
 until it is " blackleg-proof," further, realising that such 
 a development means the downfall of the existing 
 industrial system, by what economic organisation 
 shall production be continued and increased ? No 
 student of the problem will doubt that the trade-unions 
 must be the nucleus of the new formation ; every 
 student will agree that they are only the nucleus ; 
 that the other economic elements in society must be 
 co-ordinated and brought into harmonious relations 
 with the labour monopoly. When this unification 
 has been achieved National Guilds will become an 
 accomplished fact. 
 
 At the first blush it would seem as though the 
 obstacles in the way to labour monopoly were insuper- 
 able. It would be foolish to underestimate the diffi- 
 culties, but they are not so formidable as surface 
 appearances suggest. Two lines of policy must be 
 pursued : (i) The craft unions must be changed into 
 industrial unions ; (ii) there must be a continuous 
 process of amalgamation or federation of all unions 
 in the same industry. In regard to the craft unions, 
 we must remember that many of them were originally 
 formed for the protection of their " craft and mystery "; 
 in their wildest dreams they never imagined that they 
 
54 
 
 GUILD ORGANISATION 
 
 would become the representative labour organisations 
 of the whole industry. Their rules and regulations 
 were therefore based on the idea of exclusion ; they 
 were as deeply concerned to limit their membership 
 as to argle-bargle with their employers. Two un- 
 foreseen developments have materially modified their 
 first purpose : automatic machinery has created a 
 semi-skilled class of workman who has become a 
 standing menace ; the organisation of unskilled 
 workers has taught them that their wages are ulti- 
 mately governed by the cost of sustenance. 
 
 Apart, then, from any commodity theory of labour, 
 or any grandiose scheme of National Guilds, economic 
 developments are forcing the craft unions to widen 
 their borders, to relinquish the craft basis of member- 
 ship, and to become industrial unions. The process 
 of amalgamation, often by federation, also proceeds 
 apace. The miners are much more closely integrated 
 than they were ; the railwaymen have now practically 
 one union ; the cotton operatives, working federally, 
 draw closer. Nevertheless, there is a long row to hoe. 
 The table on the opposite page shows the situation, 
 from this point of view, prior to the war. 
 
 This table is perhaps misleading without an expert 
 knowledge of trade-union organisation. In most of 
 the trades enumerated the excessive number of the 
 unions only represents a degree of local autonomy. 
 But the figures given are significant as they stand. 
 They tell certainly of the need for further amalgama- 
 tion and centralised direction ; but they show that 
 trade-unionism has flourished despite the adverse 
 conditions of former times. Extension of member- 
 ship in the future will be largely automatic. It is 
 
 NUMERICAL ELEMENTS 
 
 55 
 
 also worth noting that a powerful movetnent is afoot 
 to make membership in the unions compulsory by 
 legal enactment. 
 
 Trade Group. 
 
 Building and Con 
 tracting . 
 
 Mines and Quarries 
 
 Metals, Engineering 
 and Shipbuilding 
 
 Textile Trades . 
 
 Paper, Printing, and 
 Bookbinding . 
 
 Clothing Trades 
 
 Woodwork and Fur 
 nishing Trades 
 
 Persons 
 Employed. 
 
 513,961 
 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) 
 
 It is evident, however, that when we have secured 
 the labour monopoly we have only begun the con- 
 struction of National Guilds, for we must bring in also 
 the managerial and administrative elements. Just 
 as the mediaeval Guilds were composed of masters, 
 journeymen, and apprentices, the National Guilds 
 here predicated are equally inclusive— administration, 
 managerial, scientific, inventive, as well as every 
 worker in the industry— nothing less than a regi- 
 mented fellowship. Whilst I beheve that as time goes 
 on the standard of living of all Guildsmen will tend to 
 
56 
 
 GUILD ORGANISATION 
 
 approximate* I recognise that a hierarchy is necessary 
 to the effective working of the (iiiilds. The appoint- 
 ments to the administrative and executive oifices 
 can no longer come from above ; they must be demo- 
 cratic in principle. But it is wise to avoid any political 
 analogy in this connection. When we speak of 
 democratic election we generally mean the political 
 system of counting noses. An industrial democracy 
 means the choice of the men who know — a choice not 
 obtained by any financial pull, or family influence, 
 but solely based upon fitness. It follows that only 
 those who have the means of knowing can, or ought, 
 to vote. 
 
 Now, the British artisan is an uncommonly shrewd 
 judge of workmanship. He knows the best men 
 in his own shop. On the principle stated, it is 
 the actual manual workers who should choose their 
 own foremen and sub-managers. In every industry, 
 in every locality of every industry, men work in 
 groups. There are workshop groups, office groups, 
 managerial groups, all these groups linked together 
 in various ways. When I write of democratic election, 
 the principle in mind is really group selection. But 
 the system of choosing the hierarchy is only incidental 
 to the argument ; the point now to be emphasised is 
 that a hierarchy is essential. It is rather important 
 to stress this point because I find it assumed that, 
 with the trade-unions as the existing nucleus of the 
 future Guilds, their rough-and-ready democratic 
 methods must necessarily be adopted and regarded as 
 sacred. There is absolute unity amongst thinkers of 
 every school that industry must be democratically 
 administered ; but that broad fact by no means binds 
 
 NATIONAL NOT LOCAL 
 
 57 
 
 us to any inappropriate method of democratic election 
 or selection. 
 
 And now let us suppose that we have finally dis- 
 carded the wage-system and co-ordinated into National 
 Guilds every industrial factor. What are the dimen- 
 sions of these Guilds, and if the wage-system is abol- 
 ished how are the Guildsmen to be paid ? 
 
 Please observe that the use of the word '' National " 
 is deliberate. In former times the Guilds were local ; 
 in the county of Norfolk alone there were six hundred. 
 Industrially considered now, locality has ceased to 
 count. The railway, motor-car, telegraph wire, tele- 
 phone have annihilated space, whilst the tendency of 
 every industry is to concentrate and unify. A textile 
 Guild for Lancashire only would be a futile under- 
 taking ; much more futile any local engineering Guild. 
 The Guilds must be organised on the national basis 
 or not at all. There is another convincing reason for 
 the National Guild : We have already postulated that 
 it must maintain its own unemployed ; it logically 
 follows that the care of the sick and the pensioning 
 of the aged should be undertaken by the same bodies. 
 If we are to have the Guilds on a national basis, it is 
 clear that they must be numerically very strong. My 
 own analysis of the industrial population leads me to 
 conclude that not more than twenty-five Guilds are 
 required. Here, for example, on the following page, 
 is a list of thirteen main industries, each employing 
 over 100,000 persons. 
 
 I particularly draw attention to the tribute that 
 Labour pays Capital. Note also that in Railway 
 Construction, where the engines are largely built for 
 use and not for profit, the net output is only £^ in 
 
58 
 
 GUILD ORGANISATION 
 
 excess of the average wage — an extremely significant 
 fact. These may be considered the main industries, 
 the others being largely ancillary or subsidiary. If 
 any reader imagines that the National Guilds here 
 proposed are not much more than large co-operative 
 societies, I hope these figures will disabuse his mind 
 of any such misconception. The reorganisation of 
 industry on Guild principles is a mighty affair, greater 
 
 Trade Group. 
 
 Net 
 
 Output. 
 
 Persons 
 Em- 
 
 Net 
 Output 
 
 Average 
 Annual 
 
 i 
 
 ployed. 
 
 per 
 Person. 
 
 Wage. 
 
 Building and Con- 
 
 £ 
 
 
 £ 
 
 £ 
 
 struction 
 
 42,954,000 
 
 513,961 
 
 84 
 
 59 
 
 Coal Mines 
 
 106,364,000 
 
 840,280 
 
 129 
 
 
 Iron and Steel . 
 
 30,948,000 
 
 262,225 
 
 118 
 
 82 
 
 Shipbuilding . 
 
 17,678,000 
 
 184,557 
 
 96 
 
 72 
 
 Engineering . 
 
 49,425,000 
 
 455,561 
 
 108 
 
 67 
 
 Clothing and Mil- 
 
 
 
 
 
 linery . 
 
 27,237,000 
 
 440,664 
 
 62 
 
 36 
 
 Railway Construction 
 
 17,103,000 
 
 241,526 
 
 71 
 
 67 
 
 Boot and Shoe 
 
 8,965,000 
 
 126,564 
 
 71 
 
 46 
 
 Cotton 
 
 46,941,000 
 
 572,869 
 
 82 
 
 50 
 
 Woollens . 
 
 19,452,000 
 
 257,017 
 
 76 
 
 40 
 
 Printing . 
 
 15,288,000 
 
 172,677 
 
 89 
 
 
 Bread and Biscuits . 
 
 11,590,000 
 
 110,168 
 
 105 
 
 
 Laundry . 
 
 7,161,000 
 
 130,653 
 
 55 
 
 32 
 
 SUBSTITUTE FOR WAGES 
 
 59 
 
 even than our present war organisation. And should 
 I succeed in convincing you of the substantial justice 
 of my argument, pray do not advocate it amongst 
 your friends as a Uttle, inconsiderable thing. The 
 abolition of wagery, with all its implications, spiritual, 
 intellectual, and material, is a greater event than the 
 abolition of slavery ; the building up and bringing 
 to eihciency and maturity demands the diplomacy. 
 
 the skill, and piety that formerly went into the 
 building of cathedrals. 
 
 We may very shortly dismiss the question as to the 
 substitute for wages. We now understand, I hope, 
 that as wages is the price paid for labour as a com- 
 modity, when labour ceases to be a commodity it ceases 
 to receive wages. What, then, does it receive ? The 
 answer can be most easily made by an analogy. We 
 do not go into the labour market to buy soldiers' 
 labour, for the simple reason that the work done by the 
 soldier is in no sense a commodity. It is a duty, per- 
 haps a privilege. The consequence is that the soldier 
 is on " pay " ; whether he be general, colonel, major, 
 lieutenant, or private, he draws his " pay." And he 
 receives pay whether he is fighting or "in reserve " 
 (the military equivalent for industrial unemployment), 
 or, if he be a professional soldier, during peace. 
 Now, this distinction is not merely verbal. It ex- 
 presses a conception of work and dutyjpoles asunder 
 from wage-servitude. Oddly enough, when wage- 
 earners go on strike, they say they are on " strike 
 pay." Whilst words do not change facts or condi- 
 tions, I think the new conditions would almost cer- 
 tainly change the word, and Guild-pay would become 
 the natural and usual custom. But from whence 
 would the pay derive ? From the products of the 
 Guild, probably measured by time. I have not the 
 space to argue this question. Those interested will 
 find it discussed in National Guilds, pp. 81, 82, 136, 137, 
 181, 182, 183, 184. 
 
 There are many aspects of this new idea ; but I 
 must now finally only briefly refer to the relation 
 between the State and the Guilds. For sound reasons, 
 
6o 
 
 GUILD ORGANISATION 
 
 notably the necessity that as citizens we must control 
 our national destinies, it is supremely important that 
 all the Guild assets should be vested in the State. 
 The fundamental idea of the Guilds is that they shall 
 exercise full control over labour and enjoy complete 
 autonomy in all industrial transactions. Possessing 
 such enormous economic power, the State must look 
 to the Guilds to feed its budget. How is it to be done ? 
 If all the industrial assets are vested in the State, then 
 let the State rent them to the Guilds by a charter in 
 which the terms are inscribed. Here we hit upon 
 another economic doctrine. Rent originally was a 
 tax in return for a charter or licence. This gradually 
 grew into the economic rent as we know it to-day. 
 But the abolition of wagery ipso facto destroys economic 
 rent. The State would impose, not precisely the 
 equivalent of economic rent, but a charge measured 
 only by State requirements and not the full economic 
 burden which the Guild could bear. As a consequence, 
 all personal taxation would disappear. 
 
 Those who follow philosophic thought cannot fail 
 to observe the growing importance of " function." 
 Seilor Ramiro de Maeztu has just published a book, 
 Authority, Liberty, and Function, in which he is clearly 
 and admittedly influenced by the new conception of 
 function, which has arisen out of the discussion on 
 National Guilds. When the Guilds are formed, and 
 when they in their turn proceed to constitute a Guild 
 Congress, it is easy to visualise a large national organisa- 
 tion responsible for practically all our economic 
 activities. I welcome such a consummation for at 
 least two reasons : Because I am sure that such an 
 organisation would carry on the business of production 
 
 STATE AND THE GUILDS 
 
 6i 
 
 and distribution far more humanely and efficiently 
 than under di^ided authority ; and, secondly, because 
 I believe the State should be relieved of all economic 
 functions, that it may the more freely devote itself to 
 those spiritual problems the solution of which is the 
 distinguishing mark of a great people. I assert, with- 
 out arguing, that the political life of Western Europe 
 has sunk to so degraded a level that politics is no longer 
 an occupation fit for gentlemen. Every great issue 
 that emerges is now never dealt with on its merits ; 
 the " interests " confuse and choke it from its birth 
 to its ineffective culmination. Education, foreign 
 policy, public health, local government — every dis- 
 cussion upon these subjects, pregnant as they are 
 with vital consequences, is vitiated by finance and 
 selfishness. Either we must purge our ParHamentary 
 procedure of these diseased elements or sink into 
 spiritual inertia and shame. I am old-fashioned 
 enough to wish for a return to the old " grand 
 manner " in politics. It will come back only when 
 the subjects discussed and the temper in which they 
 are approached are worthy of it. 
 
 r-'? 
 
CHAPTER IV 
 
 Reconstruction 
 
 The principles underlying the call for National Guilds 
 would indeed be barren if they had no applica- 
 tion to, or shed no light upon, immediate problems. 
 That is the conclusive test which differentiates the 
 purely Utopian from the practical. It is easy enough 
 to construct Arcadian systems ; every civilised country 
 produces them by the score. Sometimes they appear 
 in rehgious forms, sometimes in social. Often they 
 are valuable critiques of existing life, such as Howell's 
 Traveller from Altruria, a book in considerable vogue 
 in my younger days. The real test is whether any 
 great social change proposed is rooted in the past and 
 present. It is true that here and there a nation can 
 adopt some exotic change — Japan, for example. Signs 
 are not wanting, however, that even Japan, wonderfully 
 imitative though she be, is harking back to her 
 own older ways. Under her Occidental externals, her 
 Oriental heart remains unaffected. I suppose there is 
 no country in the world, China possibly excepted, that 
 is so tenacious of old beliefs and social customs as 
 Great Britain. 
 
 Every Englishman is at heart conservative and 
 
 reverent of the past. Take the word I have so 
 
 62 
 
 THE WORD " GUILD " 
 
 63 
 
 often used — " Guilds." It is centuries now since the 
 Guilds died, yet there is no word which to this day 
 radiates such a rich tradition of liberty and crafts- 
 manship. It is, indeed, notable and significant that 
 no word has" preserved its dignity, its sharp sever- 
 ance from the mean and sordid, to the same degree 
 as " Guild." When men and women meet together 
 for some unselfish purpose, calling for craftsmanship 
 or some effort involving work with the hands, they 
 are Hkely to call themselves a ** Guild." Professor 
 Lipson, in his Economic History of England, wTiting of 
 the Craft Guilds, says : "In the effort to provide a 
 fair remuneration for the worker and to reconcile the 
 conflicting claims of producer and consumer, were 
 developed principles of industrial control and con- 
 ceptions of wages and prices to which we may perhaps 
 one day again return." In summing up, he is again 
 conscious of historic continuity : " The society in 
 which we live is so deeply rooted in our everyday 
 thoughts and habits, that the sequence of historical 
 events which has brought it into being appears to us 
 unavoidable and inevitable. From this standpoint 
 it has been possible to bestow praise upon the Craft 
 Guild, in spite of the fact that its fundamental principles 
 are in many respects so completely at variance with 
 modern ways of thinking. It is contended that the 
 pressure of the Guild system in a primitive age, 
 accustomed to the rudest forms of deceit, fashioned 
 a public opinion in favour of those social and economic 
 virtues that have now become a commonplace, and 
 schooled men to recognise elementary maxims of 
 honesty in trade and industry." 
 
 Where I should quarrel with Professor Lipson is in 
 
 f^ 
 
64 
 
 RECONSTRUCTION 
 
 his assumption that the industrial system has retained 
 " those social and economic virtues that have now 
 become a commonplace." It is true that in qualitative 
 production we lead the world, even if France treads 
 closely on our heels ; but we have taken out of labour, 
 by an economic fraud, what the Craft Guilds would 
 have saved labour, and by a too great devotion to 
 mechanical production we are robbing labour of its 
 pleasure in quality and the reputation it has gained 
 from quality. Quahty springs from craftsmanship ; 
 craftsmanship is the child of liberty and leisured artistry. 
 It droops or dies in servitude. So, in the providence 
 of God, it may happen that National Guilds may yet 
 again " fashion a public opinion in favour of those 
 economic and social virtues " now fast disappearing 
 in a community accustomed, not to " the rudest 
 forms of deceit," but to a subtle and dishonest 
 industriahsm that makes labour its slave when it 
 ought to make it at least its coadjutor. In tone, 
 temper, and purpose, National Guilds, as outlined 
 by their sponsor, revivify and carry on the old British 
 tradition. 
 
 The war came at a critical moment in our industrial 
 history. Industrial discontent was rife ; strikes and 
 lock-outs were in full swing. The Labour forces were 
 drawing together and concerting common action. 
 Investors were anxious, looking beyond the seas for 
 opportunities to exploit unorganised labour. As 
 political Labour lapsed into the dreamy pleasaunce 
 of Westminster, industrial Labour grew exigent and 
 rebellious. Already the wiser heads amongst the 
 Capitahst leaders were pondering whether to fight or 
 to conciliate the exasperated workers, who, at a time 
 
 CARTON MEMORANDUM 
 
 65. 
 
 of unbounded prosperity, when the revenue from 
 profits in five years had increased by 22 J per cent., 
 found that real wages had fallen 10 per cent. The 
 outbreak of hostilities effectually dissipated the plans 
 both of masters and men ; in the face of the enemy 
 there was a degree of unity, gratifying even if it 
 was reasonably expected. A great necessity confronted 
 us : our industrial resources had, at a moment's 
 notice, to be concentrated on war production. We 
 must have big guns, and yet bigger, shells and high 
 explosives, uniforms and boots, food-stuffs. The 
 Government had to make a quick decision : Should all 
 this work be done under bureaucratic control, or could 
 we leave it to the several industries to shoulder the 
 responsibility ? 
 
 Before I answer that question from the Guild's 
 standpoint, it may be valuable to see how the situation 
 was regarded by others. I think we may all agree 
 that the most representative document issued on the 
 industrial situation is the Garton Memorandum. This 
 is a report drawn up, considered, and amended by 
 " employers, representatives of Labour, and pubUc 
 men of all parties," and finally published by the 
 Garton Foundation, with the full approval of its 
 trustees, Mr. Balfour, Viscount Esher, and Sir Richard 
 Garton. Unless I am greatly mistaken, we shall hear 
 a great deal in the near future about the proposals for 
 conciliating Labour here adumbrated. The writers 
 frankly admit that the war has in no way terminated 
 industrial discontent. " The seeming prosperity of 
 the country during the war has obscured the realities 
 of the situation." The problem of industrial unrest 
 has in no way been solved. *' The problems presented 
 
66 
 
 RECONSTRUCTION 
 
 by a temporary crisis, in which economic considera- 
 tions sink into a secondary place and the strongest 
 possible appeal is made to the spirit of self-sacrifice 
 in all classes, afford no real parallel to those presented 
 by a return to normal conditions after a long period 
 of dislocation." These are the considerations that 
 have dictated this report. Naturally, inquiry must 
 be made into the actual causes of unrest and dis- 
 content. At the risk of being tedious, I shall make 
 a number of quotations on this point, not only 
 because they bear upon the problem of Reconstruc- 
 tion, but because they go to show that my own 
 analysis of the wage-system is recognised as sound 
 and is not the conception of a crank. I quote the 
 numbered paragraphs : 
 
 12. " Failure to cope with the economic situation 
 must necessarily involve widespread loss and misery. 
 But the industrial problem is inextricably entangled 
 with social and political developments. It is not 
 merely that a certain minimum standard of material 
 well-being is a necessary condition of moral and 
 intellectual advance, or that commercial prosperity is 
 an important factor in the strength and prestige of 
 the State. Industry itself has a human side. The 
 discontent of Labour is not exclusively a matter of 
 wages and hours of work. It is becoming increasingly 
 evident that it is based to a very large extent upon 
 question of status and social conditions." 
 
 43. "The attitude of unskilled and unorganised 
 labour after the war will be influenced by the fact 
 that in miUtary service many of them will have made 
 acquaintance with a hitherto unknown standard of 
 
 GARTON MEMORANDUM 
 
 67 
 
 maintenance. They have been better fed and better 
 clothed than ever before." 
 
 62. " There is a real danger that this section may 
 adopt to some extent the German view of Labour as 
 a force which needs to be controlled and disciplined 
 from above, and may regard war as an opportunity to 
 accomplish this end." 
 
 loi. " The chief economic objection of the worker 
 to the introduction of labour-saving machinery arises 
 from his belief, unhappily founded on experience, that 
 its immediate effect is to lower his wages or deprive 
 him of his job. With some quaUfications, this objec- 
 tion is well founded." 
 
 105. " Underlying all economic suspicion is the worker's 
 instinctive aversion to becoming a mindless automaton, 
 performing without variation a cycle of mechanical 
 movements which do not lead to increased general 
 proficiency, which open the way to no higher grade of 
 employment, and which are prescribed not by himself 
 or by the traditions of master-craftsmen of his class, 
 but by an outside and unsympathetic authority in 
 the shape of the scientific expert." 
 
 134. " The questions which centre round wages and 
 profits, important as they are, are not so vital as the 
 questions of industrial relations and social conditions 
 with which they are connected." 
 
 139. " The limitation of output by Labour arises 
 partly from the legitimate desire to restrict the hours 
 of work in the interest of health, education, family 
 life, and enjoyment." 
 
 143. " Good work cannot be expected from men who 
 are ill-fed and insufficiently clothed, or who feel that 
 they derive no advantage from increased production," 
 
I 
 
 68 
 
 RECONSTRUCTION 
 
 145. " The great question to co-operation is the 
 question of status. The ill-will of Labour towards 
 Capital and Management is not wholly a question of 
 their respective share of earnings. . . . The funda- 
 mental grievance of Labour is that while all three are 
 necessary parties to production, the actual conditions 
 of industry have given to Capital and Management 
 control not only over the mechanism of production 
 but also over Labour itself." 
 
 147. " The attitude of a certain section of employers, 
 who look on their employees as * hands,' as cog-wheels 
 in the industrial machine, having a market value 
 but no recognised rights as human beings, is bitterly 
 
 resented." 
 
 My first object in quoting these excerpts is to show 
 that my own rather scientific analysis of the wage- 
 system talUes exactly with its description by responsible 
 business men. I have thought it important to state 
 the case with verbal precision ; it is, however, equally 
 important that it should be endorsed by writers well 
 versed in practical affairs. We shall never get a true 
 vision of the next great emancipating movement unless 
 we thoroughly appreciate the foundation of existing 
 industrialism. But we need be under no delusions : 
 wagery will not disappear in a day ; the conscience 
 of mankind has yet to be shocked, and after that must 
 come the gradual adaptation of the new industry to 
 
 the new thought. 
 
 My second object is more germane to my text, 
 which is Reconstruction. Two practical issues emerge 
 from these excerpts, just as they emerge from an 
 abstract statement of Guild principles. These are 
 (i) the question of status ; and (ii) of partnership. 
 
 fl 
 
 A HALF-WAY HOUSE 
 
 69 
 
 They are, of course, obviously related to each other. 
 Nevertheless, it is conceivable that a change of status 
 might lead to something other than partnership — to 
 profit-sharing, for example. It is clear, I hope, that 
 if we could place Labour upon some basis other than 
 the commodity valuation, we ipso facto change its 
 status. The Guildsman, rejecting as he does the whole 
 theory of modern industriahsm, frankly faces the 
 consequences ; but the Garton writers, believing in the 
 continuance of industrialism, and therefore of wagery, 
 seek a half-way house. The point to be noted is that 
 they necessarily travel in the direction of the Guilds. 
 And like the Guildsman, they realise that partnership 
 is the only alternative. They accordingly propose a 
 certain form of organisation, to which I shall refer 
 in a moment. They then declare : 
 
 " This interrelation of functions constitutes a real 
 partnership between the persons concerned in any 
 business, whether as investors, managers, or work- 
 men, or in any two or all of these capacities. At 
 present the relation betw^een them is unrecognised 
 or only partly understood, and the result is to produce 
 hostihty instead of co-operation between the partners." 
 
 The admission of Partnership is expHcit, but is it 
 implicit in the proposed organisation ? I wish it 
 were ; but let us see. In its simplest form, the new 
 machinery is to consist of Joint-Committees, repre- 
 senting both Management and Workers. They are to 
 be composed of representatives in equal numbers from 
 both departments. Either side may bring up for 
 discussion questions affecting working methods and 
 conditions. Explanations of innovations or the intro- 
 
70 
 
 RECONSTRUCTION 
 
 duction of new machinery would be called for and must 
 be given. Modifications and safeguards may then be 
 proposed and differences, as far as possible, adjusted. 
 But the wage-system would persist. These Joint-Com- 
 mittees are designed for isolated and independent 
 concerns. And now, bearing in mind the general 
 outlines of Guild organisation sketched in my last 
 chapter, it is extremely interesting to follow the pro- 
 posals for the staple trades. The Employers' Associa- 
 tions and Trade Unions are to join hands and constitute 
 a " Supreme Board of Control," divided for practical 
 purposes into a " Management Board " and a " Labour 
 Board," Representatives of these boards would meet 
 on the Supreme Board and deal with all questions 
 affecting both parties. But the wage-system would 
 persist. And now please remember that I predicated 
 in the Guilds democratic election or selection of the 
 hierarchy. Did you deem me to be an incorrigible 
 optimist ? Then listen to this, written by practical 
 business men : 
 
 ** In its most ambitious form, the Supreme Board of 
 Control would resolve itself into a National Industrial 
 Council [rather like a National Guild, don't you 
 think ?] for each of the staple industries or groups of 
 allied industries. [It makes me suspect that the idea 
 came from National Guilds.] The members would 
 be elected by ballot, each electoral unit or pair of 
 parallel units returning one representative of Manage- 
 ment and one of Labour. In many industries it would 
 be desirable to find a place on the Council for repre- 
 sentatives of the Applied Arts, both with a view to 
 raising the standard of design and workmanship, and 
 
 RAW MATERIAL 
 
 71 
 
 with the object of encouraging the human and creative 
 interest in production. [A Guild idea !j A Speaker 
 of broad sympathies and experience, capable of direct- 
 ing and focusing the discussions upon the practical 
 problems to be dealt with, would be chosen by mutual 
 consent." 
 
 Here, then, all unsought, we have all the externals 
 of a National Guild and even something of its spirit. 
 But the wage-system would persist. Nevertheless, I 
 welcome these proposals, and believe, if adopted, they 
 raight grow in time into genuine National Guilds. Do 
 they not prove up to the hilt the Guildsman's conten- 
 tion that some such form of industrial organisation 
 has become necessary, not only on economic but also 
 on human grounds ? Are they not a tardy admission 
 of the dignity of human labour ? 
 
 In all this discussion there is an omission which may 
 seem curious : nothing has been said about the inter- 
 vention of the State. The business of the Employers* 
 Associations we are, however, told must be, inter alia, 
 the purchase of raw material " in conjunction with the 
 State." But, broadly stated, the Garton writers 
 agree with us Guildsmen that industrial autonomy is 
 the true line of development. Elsewhere I have 
 argued that it is preferable for the State to buy the 
 raw material. This function, however, would be 
 fought for by the Capitalists, and, of course, the 
 National Guilds would insist upon obtaining raw 
 materials through their own machinery. 
 
 With this conspectus of modern industry before us, 
 the answer to my original question, whether the State 
 or the several industries should have shouldered the 
 
72 
 
 RECONSTRUCTION 
 
 responsibility of supplying war requirements, is easily 
 answered. Undoubtedly the industries, had they 
 been organised in such a way that Labour had been 
 brought into partnership, even as vaguely as the Garton 
 writers suggest. I go further : Had there been no 
 such organisation in existence, it should have been 
 constituted ad hoc. We should then have had larger 
 production, no bureaucratic muddling, and all the 
 Labour difficulties would have been obviated. There 
 is another point to be remembered. When in war, 
 prepare for peace. These councils would have become 
 the cadres for a peace footing. What I most desire 
 to emphasise is that, in war or in peace, thoughtful 
 business men agree that Guild organisation is best. 
 Indeed, I think they recognise that it is inevitable. 
 
 Having got so far, I think I can hear some of my 
 readers say to me : " We have read what you have 
 written, only occasionally yawning, and it seems very 
 technical ; what we want to know is : Has it such a 
 broad application to human life that we can concern 
 ourselves with it ? What in it is there to appeal to 
 our emotions ? Is our higher life in any way affected ? " 
 
 I answer generally that our emotional life is not 
 hermetically sealed against the ordinary facts of daily 
 life. When I think in terms of human suffering and 
 loss what is involved in the unending grinding of the 
 faces of the poor, of their merciless exploitation, of 
 their inhuman committal to a market valuation of 
 the one thing they possess — their labour — I frankly 
 confess that my emotions are touched to pity, to anger, 
 to hope, and to a resolute determination to discover 
 the cause of such a horrible condition of affairs and to 
 remove it. But I would add that hard thinking as 
 
 A COMPLEX SOCIETY 
 
 73 
 
 well as fine feeling must usher in the new epoch. Let 
 us first understand the facts, with their thousand im- 
 plications, and our emotions will not long lie quiescent. 
 Personally, I can do but Httle beyond pointing the 
 way. I have already affirmed that it is the workers 
 themselves who must work out their own economic 
 emancipation. That is true ; but we who are more 
 happily circumstanced can prepare the way. I suggest 
 two lines of thought and action : by a movement for 
 national clarification of function ; by an effort to 
 purify education. 
 
 What do I mean by clarification of function ? 
 Mainly this : we do not realise that in these later days 
 life grows more and more complex, and we try to pour 
 all these complexities into the old moulds. Formerly 
 everything was done through the agency of the Churches 
 or of Parliament. Business we accepted with fatahstic 
 indifference, it was merely our means of livelihood ; 
 for the rest, Church organisation sufficed for charitable 
 and philanthropic objects, whilst poHtics was relegated 
 to Parhament. But we have moved into a much 
 worse complex order of society, and we find it necessary 
 ' to call up other agencies to express ourselves. Take, 
 for example, the Press. A newspaper lie affects us as 
 dangerously as an adulterated food, perhaps as fatally 
 as a poison. We accept our papers as we do the 
 weather. Beheve me, some serious thinking and 
 speaking on the true function of the Press might save 
 many a soul from damnation. Before we can reform 
 the Press we must first be clear in our minds what its 
 function ought to be. But, on larger lines, we must 
 discover the tme function of the State before we render 
 something to Caesar something that belongs to Pompey. 
 
74 
 
 RFXONSTRUCTION 
 
 Our little inquiry into the meaning and scope of 
 National Guilds has taught us, I hope, that there is 
 work to be done by corporate action outside the sphere 
 of the State. The overwhelming majority of our people 
 seem to think that the State can quite properly do 
 anything it pleases. Never was there such an urgent 
 need for clarification of function. I deliberately use 
 *' clarification " and not " definition," which comes 
 later. The time has come to state the true proportions 
 and relations of our national activities as a condition 
 precedent to great organic change. 
 
 In no sphere of activity is function more confused 
 than in education. We confuse " education " (really a 
 spiritual process) with instruction ; we equally confuse 
 the teaching of the humanities with technical training. 
 Let me quote these words, written by an ex-teacher 
 and present editor : 
 
 " More clearly in our educational system, perhaps, 
 than anywhere else are the fruits of this evil relation 
 visible (the association of economic with poUtical 
 ends, of civic with industrial functions) ; for even while 
 we write, the controversy, first begun in the persons 
 of Herbert Spencer on the one side, and Matthew 
 Arnold on the other, still rages with varying fortunes 
 in the direction, at one period and for a little while, 
 of a humane and civic ideal, and at another in the 
 direction of the technical and scientific. What, we 
 are asked for six months of the year, can the end of 
 education be but to produce the well-balanced mind, 
 the all-round citizen, the man of the world ? And 
 what, for the other six months, we are asked, is the 
 value to himself or the State of a citizen untrained in 
 
 EDUCATION 
 
 75 
 
 any craft and unable therefore to employ the complex 
 instrument which modern society puts into his 
 hands ? " 
 
 Confusion of function again ! Yet it is certain that 
 we want good citizens and good craftsmen combined. 
 May it not be that here we can learn a lesson from the 
 mediaeval Guilds ? They trained apprentices in a way 
 they weie never trained before or since. And so, 
 by parity of reasoning, may we not affirm that the 
 technical and scientific training might and ought to 
 be transferred to the National Guilds, whilst the humane 
 and civic education remain a function of the State ? 
 That is my own solution of that particular problem, 
 clearly reached by an analysis of function. I merely 
 suggest that extremely fruitful work can be done 
 along these lines. 
 
 At the back of these economic and scientific problems 
 we shall find a new spirit, calling up a new epoch, in 
 which liberty asserts itself in the economic medium. 
 A few more years of the wage- system will bring us 
 perilously near to the servile State. Those of us who 
 realise its true bearing on human life must bestir 
 ourselves, each in his own sphere and by the methods 
 best known to him. It is the one thing we must do 
 if we have felt " the inexorable desire, which whoso 
 knoweth shall neither faint nor sleep." 
 
 I 
 
CHAPTER V 
 
 THE PERMANENT HYPOTHESIS— I 
 
 The Roots of Discontent 
 
 The spiritual and economic tumults of the war have 
 quickened the national conscience in many ways — 
 notably in a demand, almost universal, for recon- 
 struction. Significantly enough, we hear of it more 
 from the employing classes — from the less depraved 
 profiteers — than from the wage-earners. Recon- 
 struction, of course, does not necessarily imply a 
 social and economic change foi the better. If my 
 income is seriously reduced by some catastrophe, 
 I must " reconstruct " my life on more modest lines. 
 The change may conduce to my moral welfare, but 
 assuredly I neither sought nor desired it. Death and 
 destruction may compel us, as a nation, willy-nilly to 
 ** reconstruct." If this be all that the cry for recon- 
 struction means, a timely submission to force majeure, 
 then its significance is limited to the material ; it is 
 not a cry of the heart. Prudence merely asserts itself 
 over principle and religion ; the proud assertion of a 
 great national destiny is blunted down to a plaintive 
 squeal for national thrift. We have yet to discover 
 
 if these proposals for reconstruction are based on fears 
 
 76 
 
 THE ROOTS OF DISCONTENT 
 
 n 
 
 for the future, or on a genuine passion, stirred by the 
 war, for a more equitable system of life. It follows— 
 does it not ?— that when various groups and persons 
 demand " reconstruction " after the war. we are 
 entitled to inquire whether they are motived by 
 prudence or by the heroic aspect of reconstruction, 
 by a genuinely crusading spirit. 
 
 I do not assert that the two motives are mutually 
 exclusive. It is possible that the "Round Table" 
 group, for example, might contend that, whilst they 
 appreciate and largely endorse an heroic reconstruction, 
 tantamount to a mild revolution, the war has put 
 us all out of joint, and that, in consequence, there is 
 nothing for it but a cycle of thrift based on the per- 
 manent hypothesis of wagery. Broadly put, that is 
 the assumption underlying the Garton Memorandum ^ 
 —a " Round Table " pronouncement, I suspect, and 
 about which I shall have much to write. I hasten to 
 add that I see no evidence that this and kindred groups 
 have as yet ever dreamt that this permanent hypothesis 
 is neither tenable nor permanent : that present 
 discontent is largely rooted in the exasperating fatuity 
 of that hypothesis. Nevertheless, these groups of 
 conscientious men, who are not without a sense of 
 social compunction, have their uses. They tell us 
 how far they are prepared to reconstruct (subject 
 to the practice of thrift amongst the working classes) ; 
 they frankly admit that the existing industrial 
 system cannot now be defended ; that a change is 
 imperative. Paragraph 2, for example, of the Garton 
 Memorandum : 
 
 1 Memorandum on the Industrial Situation after the War, the 
 Garton Foundation. London, Harrison & Sons. is. net, '^j 
 

 m 
 
 78 
 
 THE PERMANENT HYPOTHESIS 
 
 " The seeming prosperity of the country during the 
 war has obscured the realities of the situation. Be- 
 cause the war has not given rise to unemployment 
 and the financial crisis which followed on its outbreak 
 was successfully tided over, many observers ignore the 
 industrial dislocation which has taken place. Because 
 there has been a general cessation of disputes between 
 Labour and Capital, which has enabled us to concen- 
 trate our energies upon the vigorous prosecution of the 
 war, they imagine that the problem of industrial unrest 
 has in some way been solved." 
 
 Paragraph 5. " Even under the stress of war there 
 is ill-feeling, suspicion, and recrimination. Charges 
 have been made against each side of placing personal 
 and class interests before national welfare, and of using 
 the national emergency to snatch present gains and to 
 strengthen its strategical position for the resumption of 
 industrial hostilities." 
 
 The Memorandum bristles with similar admissions 
 that the existing industrial system is both archaic and 
 volcanic. Nor does it dare to place the blame ex- 
 clusively on Labour. On the contrary, it frankly 
 recognises that Labour has many and intolerable 
 grievances. I will return to them ; but meantime a 
 point of great importance emerges : Under the stiess 
 of the war is Capital hardening or relenting towards 
 Labour ? Can it be doubted that as war profits 
 have accumulated and labour has been diluted. Capital 
 has grown more arrogant and assertive ? In the early 
 days of the war, a capitalist daily paper printed a 
 manifesto calling upon profiteers to desist from profits 
 during the war. It was, of course, ignored. But the 
 
 CHANGED VALUES 
 
 79 
 
 manifesto was a gesture showing a prevalent, if not a 
 prevailing, conviction that the exaction of profits (at 
 least in war-time) was anti-social. A far cry that from 
 Lord Lamington's recent letter in the Times frankly 
 advocating the practical suppression of Trade Unions. 
 Lord Lamington is not alone. In his, and similar 
 circles, the same sentiments are freely uttered over the 
 nuts and wine. To give them publicity was an inter- 
 esting indiscretion. 
 
 Better evidence, however, is found in " Some Re- 
 flections of a Soldier " (Nation, 21st October 1916). 
 He has come home again. He finds that the values 
 have all changed — so changed, indeed, that he doubts 
 if he is really at home. He feels " like a visitor 
 amongst strangers whose intentions are kindly, but 
 whose modes of thought I neither altogether under- 
 stand nor altogether approve." He and other soldiers 
 went out to fight for an idea ; he comes back to 
 find quite other ideas predominant. " You speak 
 lightly, you assume that we shall speak lightly, of 
 things, emotions, states of mind, human relationships, 
 and affairs which are to us solemn or terrible. You 
 seem ashamed, as if they were a kind of weakness, of 
 the ideas which sent us to France, and for which 
 thousands of sons and lovers have died. You calculate 
 the profits to be derived from * War after the War,' as 
 though the unspeakable agonies of the Somme were an 
 item in a commercial proposition. You make us feel 
 that the country to which we've returned is not the 
 country for which we went out to fight ! " Not for the 
 first time in our history, the army and the country 
 have drifted apart. Our soldiers have toiled and moiled 
 for Rachel ; on their return, they are asked to contem- 
 
8o 
 
 THE PERMANENT HYPOTHESIS 
 
 plate the faded charms of Leah. " While you seem — 
 forgive me if I am rude — to have been surrendering 
 your creeds with the nervous facility of a Tudor official, 
 our foreground may be different, but^our background 
 is the same. It is that oflAugust to^November 1914. 
 We are your ghosts." 
 
 I shall show, in a moment, that this soldier knows 
 of what he writes. But can we read these wc-c s with- 
 out shame and emotion ? — " They carry their burden 
 with little help from you. For an army does not live 
 by munitions alone, but also by fellowship in a moral 
 idea or purpose. And that you cannot give us. You 
 cannot give it us because you do not possess it. You 
 are, I see, more divided in soul than you were when 
 I became a soldier, denouncing the apostles of war, 
 yet not altogether disinclined to believe that war is an 
 exalting thing, half implying that our cause is the 
 cause of humanity in general and democracy in par- 
 ticular, yet not daring boldly to say so, lest later you 
 should be compelled to fulftl your vows, more com- 
 placent and self-sufficient in proportion as you grow 
 more confident of victory and have less need of other 
 nations, trusting more in the great machine which you 
 have created and less in the unseen forces which, if 
 you will let them, will work on your side." 
 
 Poor soldier-man ! He believed in our statesmen's 
 proclamation that we were fighting for democracy. He 
 had a simple faith that divine forces were shaping our 
 ends. He returns to find that we are afraid to register 
 any vows lest peradventure we may be called upon to 
 fulfil them. We are, instead, calculating our profits 
 from the war after the war. 
 
 Can it be true, however, that the army is still think- 
 
 CHANGED OUTLOOK 
 
 81 
 
 ;i 
 
 ing in terms of 19 14 ? Can it be true that we are 
 already calculating our future profits ? Let us return 
 to the less imaginative Garton Memorandum. Please 
 remember that in 1914 industrial Labour was asserting 
 itself in inverse ratio as political Labour was degrad- 
 ing itself. Paragraph 6 : 
 
 " There is evidence that many of the men who return 
 from the trenches to the great munition and ship- 
 building centres are, within a few weeks of their 
 return, amongst those who exhibit most actively their 
 discontent with present conditions. Among those 
 who have fought in Flanders, or have been employed 
 in making shells at home, there are many who look 
 forward to a great social upheaval following the war. 
 To some this may be distressing and almost incredible. 
 The facts remain, and the facts must be faced." 
 
 Why distressing ? Why incredible ? These men 
 believed in and fought for democracy — economic 
 democracy. It rather looks as though the discontent of 
 1912-1914 will be accentuated by the war ; that the 
 army really believed in democracy, and, on its return, 
 means to have it. 
 
 But about the profits out of that glorious " war after 
 the war." Our " Round Table " friends have distinct 
 commercial aptitude. Paragraph 21 : 
 
 " In the devastated districts of Belgium, France, and 
 Poland reconstruction on a big scale will be necessary. 
 Roads, bridges, railways, factories, machinery, houses, 
 churches will have to be reconstructed or replaced. 
 In this work our foundries and factories will find their 
 opportunity." 
 
82 
 
 THE PERMANENT HYPOTHESIS 
 
 The hungry profiteers (who doubtless are pray- 
 ing for more and yet more destruction) are to 
 be let loose over the devastated areas; the per- 
 manent hypothesis is to be yet more firmly estab- 
 lished ; and the writers of the Crarton Memorandum 
 to prove themselves equally devoid of shame and good 
 taste. I do not exaggerate ; the economic theory is 
 quite clearly stated. Present prosperity is artificial 
 and transient. It is due, in part, " to the teinporary 
 absorption into industry of people who will not continue 
 to he producers after the war.'' It is due, in part, to 
 " the inflation of currency and the concentration of 
 purchasing power in the hands of the State, which has 
 not to study the absorptive power of commercial 
 markets for the disposal of its purchases, but uses them 
 to destruction as fast as they are produced." After 
 the war, we are again to lapse into the " normal 
 conditions" of supply and demand. No nonsense 
 about that ! No State could possibly study the 
 *' absorptive power" of a demand for sugar or corn 
 or foodstuffs or coal or cotton. No National Guild 
 could do it. That is peculiarly the task of the profiteer • 
 He knows ; nobody else does. Besides — this is the 
 vital point — if the National Guilds, producing and 
 purchasing, were to supplant the profiteers, the 
 permanent hypothesis (that the labour commodity 
 must also readjust itself to supply and demand) would 
 go by the board. 
 
 Think of it ! If the Guilds came in, they might 
 comfort and repair the desolation of Belgium, Poland, 
 and Servia without a penny of profit ! They might 
 even leave Guilds behind them. If this happened, 
 the war would indeed be a Pyrrhic affair. Let 
 
 WITHOUT PROFITS 
 
 83 
 
 us have no new-fangled notions ; let us pursue the 
 way of our fathers — the State to control destruc- 
 tion, the profiteer to control production. As for 
 " democracy " — pish ! The *' unseen forces " — tush ! 
 Luckily we may take heart of grace. This soldier, 
 with his inconvenient conscience, returns to the 
 front ; Sir John Jackson remains at home. 
 
 I think we can now gHmpse the soil in which the 
 roots of discontent grow and flourish. Our soldier 
 tells us that a cultured civiHan explained to him that 
 his feelings were not shared by the " common soldier " ; 
 that they were confined to " gentlemen." This 
 misconception has prevailed amongst the governing 
 classes since the days of Epictetus and Christ, whom 
 " the common people heard gladly." It is the assump- 
 tion that property possesses a special spiritual warrant. 
 Every generation proves it to be grotesquely false ; 
 every generation clings to it as faithfully as to the per- 
 manent hypothesis. Yet who is there who has lived 
 amongst them who will not agree that a larger pro- 
 portion of the oppressed are gifted with greater spiritual 
 perception than their oppressors ? Does the point 
 seem remote ? It is entirely germane. For spiritual 
 perception precedes an understanding of social and 
 economic problems. This soldier's words are pene- 
 trated with it ; he accordingly writes with power and 
 distinction. The writers of this Memorandum are 
 spiritually blind, and so their words are hollow. They 
 may retort that they are not concerned with ethics. 
 
 Assuredly they cannot escape from some kind of 
 ethical standpoint. Are there no canons of right 
 conduct, no sense of dignity and seemliness, in the 
 workshop and counting-house ? But our writers 
 
84 
 
 THE PERMANENT HYPOTHESIS 
 
 understand that ethical considerations necessarily 
 arise. The repudiation of the national debt is raised. 
 " Anything amounting to even partial repudiation or 
 to adverse discrimination between holders of war-loan 
 and of other securities would be unjust, dishonourable, 
 and disastrous." Next we come to status. " The 
 great obstacle to co-operation is the question of status. 
 The ill-will of Labour towards Capital and Manage- 
 ment is not wholly a question of their respective share 
 of earnings. Friction arising over the distribution of 
 earnings is in itself due quite as much to a sense of 
 injustice in the machinery of distribution as to the 
 desire for actual increase of wages." Our propaganda 
 begins to tell. More ! These writers understand that 
 status hinges on the conception of labour as a com- 
 modity. They say so : " The worker feels that his 
 labour is treated as a mere commodity, the market 
 value of which may be forced down by the Employer, 
 irrespective of any consideration of a decent standard 
 of life for the Employed." Clearly this is an ethical 
 (or, as our writers put it, a " non-economic ") aspect of 
 reconstruction. 
 
 Why, then, do I assert that the writers are spiritually 
 blind ? Here is a vital point, urged by The New 
 Age for a decade or more, quite frankly faced and 
 admitted. What more do I want ? It was said of 
 some statesman that he " boldly faced the difficulty— 
 and passed on." This Memorandum does precisely 
 the same thing. Do its writers admit or deny that, 
 economically or socially considered, labour is, in fact, 
 a commodity ? They merely tell us that it is so 
 asserted— and pass on. Now, they must surely realise 
 that here is the crux of the whole problem. They 
 
 I* 
 
 EVADING THE ISSUE 
 
 85 
 
 ought to know that the new school passionately rejects 
 the theory that labour is a commodity. If they do 
 not, let them read a book entitled National Guilds. 
 If labour really is a commodity (as the classical 
 economists assert), why waste ink and paper on the 
 problem of status ? For it is certain that, so long 
 as it is economically, or socially, or spiritually, con- 
 sidered to be a commodity, its statiis is exactly that of 
 manure. In other terms, we have achieved the servile 
 state. Wagery and slavery have met and merged. 
 On the other hand, if labour is essentially a human 
 element, both in production and distribution, then 
 we are faced with a new fact that must dominate every 
 scheme of reconstruction. If our writers do not under 
 stand this, then they are obtuse ; if they do under- 
 stand it, and decline to follow its implications, they 
 are obviously insincere. In either alternative, they 
 are spiritually bUnd. I assure them that sooner or 
 later they will be found out. 
 
 I cannot resist the conclusion that the self-com- 
 placency with which they clothe this aspect of the 
 question must, in itself, prove a prolific source of 
 discontent. They are like the editor of the Spectator, 
 who has carried self-complacency to the giddy heights 
 of spiritual cowardice, or hke the Webb group of 
 bureaucrats, who tell us that the way of salvation is 
 research and yet again research ; who bury the funda- 
 mental facts under a cairn of statistics. We ask for 
 genuine reconstruction founded upon the new con- 
 ception of labour as a sanctified human factor ; w^e 
 get an evasion of the cardinal fact, and are offered 
 workshop control plus an industrial national council, 
 which would not trench upon the functions of Em- 
 
!^- 
 
 86 THE PERMANENT HYPOTHESIS 
 
 ployers' Associations, who are still to profiteer to their 
 hearts' content. Does it not make serious thinkers 
 furious ? 
 
 I offer no apology for emphasising the religious or 
 spiritual aspect of reconstruction. I am old-fashioned 
 enough to believe that we cannot reconstruct (and by 
 " reconstruct " I do not mean " to patch ") without a 
 religious impulse. It does not suffice merely to collate 
 the facts— any callow undergraduate could do that— 
 to present an olla podrida of unrelated problems of 
 widely different values and significance. We are 
 entitled to ask the " Round Table " group what they 
 really believe ; at what altar they worship. 
 
 If, however, ethical considerations must be ruled 
 out, if imagination and spiritual insight are de trop, 
 we can easily discover other roots of discontent of 
 a more specifically material order. Apart from the 
 thousand and one grievances inherent in the wage- 
 system— grievances that are the staple food of the 
 Trade Unions— the great underlying element of dis- 
 content is found in the fact that poHtical democracy 
 is a mirage because it is not correlated with economic 
 democracy. Unless we understand this, we shall never 
 grasp the essentials of reconstruction. The main 
 proposals in this Memorandum are doomed to failure 
 because they dehberately refuse economic democracy. 
 They do worse ; they make a pretence of it. The 
 members of the Supreme Board of Control are to be 
 elected by ballot, "each electoral unit or pair of 
 parallel units returning one representative of Manage- 
 ment and one of Labour." But! " Such Industrial 
 Councils would in no sense supersede the existing 
 Employers' Associations and Trade Unions, many 
 
 THE BAR SINISTER 
 
 87 
 
 sides of whose present activities would be unaffected 
 by the creation of the new. bodies. Matters con- 
 nected with the sources and supply of raw material 
 and the cultivation of markets for the disposal of the 
 finished products would remain exclusively the con- 
 cern of purely commercial federations of manu- 
 facturers, acting in conjunction with the State." As 
 if they were not acting in conjunction with the btate 
 already! Where have the "Round Table" writers 
 been hiding all these years ? To make a pretence of 
 economic democracy, with its voting by ballot, its 
 " Speaker" and all the rest of its poUtical gear, and 
 then to reserve the substance for the Employers 
 Association, is to court not merely a storm of derision, 
 but to incite to anger the workers whom they set 
 out to placate— or to deceive. 
 
 With a new Britain looming up before us, the 
 question may well be asked : " Why not an economic 
 democracy without more ado ? The answer is absurdly 
 simple : Because the permanent hypothesis, with its 
 bar sinister, blocks the way ; because our capitalists, 
 with their following of scribes and pharisees, are deter- 
 mined to maintain and retain labour as a commodity 
 In consequence, we find industrial discontent rooted 
 in the considered determination of the possessing classes 
 to yield nothing that is conferred upon them by the 
 permanent hypothesis. I can easily understand that 
 the Trustees of the Garton Foundation (Mr. Balfour, 
 Viscount Esher, and Sir Richard Garton) very readily 
 " permitted the devotion of its staff and resources to 
 this work." 
 
] 
 
 CHAPTER VI 
 
 THE PERMANENT HYPOTHESIS— H 
 
 Quo Vadis ? 
 
 Whilst proletarian discontent is rooted in the intan- 
 gible tyranny of the permanent hypothesis, it by no 
 means follows that there are not other discontents 
 springing from intellectual disquietude. The intel- 
 lectuals have shown their dislike of the existing system 
 and denounced it in polite terms. The Fabian Society, 
 for example, is busy discussing " The World in Chains "' 
 (evening dress optional and a paltry one guinea the 
 course, numbered and reserved stalls, Dr. Saleeby the 
 first chairman), in which great thought (led by Sir 
 George Radford, M.P.) is devoted to the problem how 
 to enlarge our freedom without breaking the chains. 1'^*'' 
 If the chains were broken, where would those guineas 
 come from ? It is indeed a sign of the times when 
 such a respectable and cautious body of social students 
 wakes up to the existence of chains. Men with a 
 stake in the country need, however, have no fear. Mr 
 Webb's syllabus is reassuring: "The individual is 
 always m chains, and is not necessarily either the less 
 happy or the more cramped in his development because 
 of the limitations of which he is conscious. ' ' The manual 
 
 68 
 
 KINDLY BUREAUCRATS 
 
 89 
 
 worker's chains gall rather much — we really must admit 
 it — *' (a) by his poverty ; (b) by his limited mental 
 development and by ignorance ; and (c) by the condi- 
 tion of his employment." It seems a little dangerous 
 to drag in this third item, but in war-time one must 
 take risks. After all, it is only a verbal admission. 
 The cure ? " The unexpected profitableness of enforc- 
 ing a National Minimum of Civilised Life. The unfore- 
 seen freedom of national service. Will our governing 
 class have the good manners to choose equality ? " 
 Mr. Sidney Webb's thoughts go back with love and 
 longing to 1880. 
 
 Personally, I am not disposed to bend the knee 
 to the governing class and pray that, in their 
 strength and mercy, they will give us equality. But 
 Mr. Webb's vision is only slightly blurred by the 
 governing classes' oft-iterated intention to stay where 
 they are just as long as the permanent hypothesis 
 permits. His heart is in " the unforeseen freedom of 
 national service," when we shall all, con amore, obey 
 those good and kindly bureaucrats, who will go to him 
 in all their perplexities. Chains ? Oh yes ; but 
 polished to a beautiful smoothness and engraved with 
 Shavian epigrams. 
 
 That studious pundit, Mr. Graham Wallas, also 
 contributes to the discussion. Let me pluck a 
 flower or two from his bouquet : " Success in the 
 development of a democratic State depends first on 
 its political machinery." He apparently has never 
 heard that economic power precedes political action 
 and dictates its form. He proceeds : " The success 
 of a democratic State depends secondly upon the 
 existence of certain habits of mind among its citizens." 
 
90 
 
 THE PERMANENT HYPOTHESIS 
 
 A mind that readily adapts itself to the permanent 
 hypothesis. His conclusion reads : " Democracy, 
 therefore, depends for its success on the temper of its 
 schools and universities and churches, its Trade Unions, 
 and learned societies and families as much as on the 
 ingenuity of its political machinery or the patriotism 
 of its politicians." Not a word about wagery. Hush ! 
 We must not obtrude such a \ailgar word upon the 
 startled consciousness of the delicately abstract. 
 
 If the Fabian Society discloses no new tendency, fails 
 to '* embrace the purpose of God and the doom as- 
 signed," others, more alert, realise that the war has 
 changed our life. Two crusading twins in the Times, 
 writing as " D. P.," have developed their views with 
 a certain picturesque clearness. Their argument can 
 be shortly stated. Their main premiss is that British 
 industry must more generously call science to its aid. 
 And science can only adequately act its role in spacious 
 ways. The day of the hundred thousand pound com- 
 pany is gone for ever ; in the future we must think in 
 millions. The old petty competition must give way to 
 a large integrated co-operation. The small company 
 cannot profitably employ a platoon of chemists and 
 other specialists ; that is the responsibility of the 
 large millionaire concerns. But where are these 
 chemists to be found ? Unhappily we have not got 
 them in sufficiently large numbers. Sir Ray Lan- 
 kester blames the Civil Service. He contends that it 
 has given an unfair bias towards the old classical side 
 by overmarking Greek and Latin and undermarking 
 science. In consequence clever and ambitious boys 
 are drawn to the classics, and the modern side is pro 
 rata impoverished. Personally, I am very glad it is 
 
 A CRY FOR SCIENCE 
 
 91 
 
 so ; we want science in our industrial work (using the 
 word in its broadest meaning), and the humanities in 
 our administration. 
 
 I fancy " D. P." rather agrees with me, for his 
 (or their) argument really leads to the conclusion 
 that our great industrial concerns must train their 
 own chemists. I shall show, later on, that this is 
 the true line of development. But let me quote : 
 " In this time of reconstruction there are two entirely 
 divergent ways in \\'hich the new education may 
 develop : one leading straight to Britain's last muddle, 
 and the other to an Imperial renascence. The 
 first is the traditional method, planless, incoherent, 
 wildly wasteful. It begins in a tangle of agitating 
 bodies, committees and organisations ; it goes on to 
 much zeal, more anger, storms of blame, scraps of fine 
 performance. ..." We all know the process, so I 
 need not quote further. " The second is a replanning 
 of scientific education and research, concurrently with, 
 and as a part of, a systematic amalgamation and co- 
 ordination of industries, so that the same men who 
 plan the plant may have a decisive voice in the educa- 
 tion of the men who will work the plant." But this 
 co-ordination carries us a great deal further. It means 
 that the trained expert is at last to bear his true share 
 in management. No wonder the writers declare that 
 " the experiment of controlled establishments, the 
 experiences of trusts and combines, German State 
 Socialism, the theories of Guild SociaHsm, are all in the 
 solution." 
 
 These two critics have reaHsed that not only do we 
 want industry on a much larger scale, but it must 
 be " quasi-nationalised." Having reached this con- 
 
if| 
 
 92 
 
 THE PERMANENT HYPOTHESIS 
 
 elusion, a weak dilution of the theories propounded 
 by national guildsmen, we are next exhorted to snub 
 them. " Let us by all means continue to snub them, 
 take it out of them socially, and so on, but let us at least 
 see whether some use is not to be made of their ideas. 
 These new ideas among the workers need not make 
 for conflict, but they certainly will make for conflict 
 if they are ignored." We shall not be ignored, and we 
 cannot be snubbed ; but the argument is to me ex- 
 tremely interesting, for it coincides with what was 
 written in The New Age in 1912 and 1913. We 
 were then denounced as Utopian. Time has proved 
 that ours was the true vision. 
 
 There is a suspicious similarity "between the thesis of 
 " D. P." and the proposals embodied in the Garton 
 Memorandum. It is only a step from the closer 
 association of the skilled man in management to work- 
 shop control ; but I am cone erned for the moment with 
 technical education and research. Paragraph 108 : 
 
 " For industrial purposes research may be 
 classified under two headings — Theoretical Research 
 of a general nature, having no obvious and immediate 
 practical application, and Specific Research directed to 
 the solution of definite problems of production. . . . 
 The encouragement of Theoretical Research, which 
 may yield results of national utility, is a proper object 
 for State action. Specific Research, the results of 
 which will be capable of immediate commercial educa- 
 tion, can best be carried on in close connection with 
 the industries concerned." 
 
 So far, again, this and the Guild proposals are in 
 haiTnony. But the Memorandum proceeds to urge the 
 
 SCIENTIFIC RESEARCH 
 
 93 
 
 Employers' Associations to subsidise Technical Colleges 
 or Municipal Laboratories in the leading centres of 
 industry. " Such subsidies might even be extended 
 to research of a more general character, in any field 
 touching the materials and processes of the industry 
 in question. The results obtained by the scientific 
 experts could then be submitted to the staffs of works 
 laboratories, who would at once recognise the com- 
 mercial possibiHties which they might hold, and could 
 refer them back for specific research along the lines 
 indicated by their practical knowledge and experience " 
 
 My immediate purpose is not to discuss scientific 
 research or technical education, but to ascertain the 
 true mind of the reconstructionists, to sense out the 
 real tendency of their proposals. This tendency 
 expresses itself crudely in the more concrete question 
 of wages and labour organisation and more subtly in 
 such a problem as education. Let us look, then, at 
 the inner meaning of these proposals. In the first 
 place, the Employers' Associations are to pay for 
 scientific research, either directly or by subsidy. 
 That being so, it follows that they shall direct and 
 control all specific scientific research. The workers 
 who do research have only to follow the lines laid 
 down by their masters. 
 
 It does not require much imagination to see the 
 result. Scientific research is harnessed to the per- 
 manent hypothesis ; it is removed from pure science 
 and becomes a process in profiteering. Science is 
 cornered and becomes a capitalistic monopoly. Sup- 
 pose some clever researcher discovers something that 
 would render superfluous one of the employers' 
 most profitable products ? A discovery may easily 
 
94 
 
 THE PERMANENT HYPOTHESIS 
 
 prove of untold economic value and yet cause great 
 commercial loss. I need hardly remind the Garton 
 writers that economic and commercial values are by 
 no means identical. Sooner or later, the workers 
 will understand that it is to their own interest to 
 keep a firm grip on science and technical training. 
 Secondly, it is proposed to utilise Technical Colleges 
 and Municipal Laboratories for commercial ends. The 
 writers go further ; they would penetrate the Univer- 
 sities : — " A University should not only be a training- 
 ground for the recognised professions, but a centre 
 of research in connection with the industries of the 
 country." It is high time that a new spirit descended 
 upon our universities, but the Birmingham model is 
 best avoided. 
 
 The truth is that these reconstructionists have not 
 thought out their problem. The permanent hy]:)othesis 
 obfuscates while it enriches ; it entices to deceive. The 
 possessing classes rely upon wagery, not only to secure 
 to them all surplus \'alue, but to yield them sovereignty 
 over mankind's mind and conscience. It is to them 
 natural and appropriate that they should control 
 education. In elementary education, Whitehall does 
 it for them (under the guise of democracy) ; secondary, 
 technical and university education is their private 
 preserve by the simple process of paying lor it. Yet 
 the essence of education is that it shall be free ; that 
 it shall not be " in chains." The Garton Memorandum 
 demands a free, self-respecting, intellectually and 
 technically educated proletariat, but fails to under- 
 stand that this is only possible when the workers pay 
 for their own education and training — and control it. 
 Can we doubt that a curriculum demanded by the 
 
 TECHNICAL EDUCATION 
 
 95 
 
 workers out of their own experience >nd aspirations 
 would diverge widely trombone imposed from above ? 
 We may cordially admit that these Garton proposals 
 are made in good faith and with high expectations, 
 but blinded by the permanent hypothesis, they fatally 
 disregard the psychology of the workman. 
 
 How, then, do we, as Guildsmen, differ jfrom the 
 Garton Memorandum and the Times correspondents ? 
 
 The answer is to be found in our conception of the 
 functions of the State and the Guilds. To the Guilds 
 we would transfer every economic activity, subject to 
 the grant of a State charter in exchange for the equiva- 
 lent of economic rent. To the State we assign the 
 purely poHtical work, which, rightly understood, is to 
 interpret the spiritual and intellectual mind of the 
 nation. May I quote from National Guilds ? ^ 
 
 ** The problem, then, of the Modern State is to give 
 free play in their appropriate environment to the 
 economic and poHtical forces respectively. We have 
 seen that they do not coalesce ; that where they are 
 intermixed, they not only tend to nullify each other, 
 but to adulterate those finer passions and ambitions 
 of mankind that ought properly to find expression and 
 satisfaction in the political sphere. It is a quality 
 inherent in private capitalism to dominate and mould 
 State policy to its own ends, precisely as it exploits 
 labour. If the interests of private capitalism were 
 synonymous with those of the community as a whole, 
 this danger might be theoretical rather than real. 
 But we know that the assumption of unity of interest 
 between private capitalism and the State degrades 
 
 ^ National Guilds, p. 258. 
 
f 
 
 q6 
 
 THE PERMANENT HYPOTHESIS 
 
 the standard of national life and stifles all aspirations 
 towards that spiritual influence which is the true 
 mark of national greatness." 
 
 In the succeeding chapter, education is correlated 
 with these political and economic functions : 
 
 " But if this apportionment of the duties, as between 
 the State, as a whole, and the Guilds as autonomous 
 but limited functions of itself, is possible, the same 
 principle carried into the sphere of education would 
 equally well determine the relative provinces of civic 
 and technical education. For it is plain that as duly 
 authorised and charged with the responsibility of skilled 
 industry, the Guilds at the same time would become 
 responsible for the technical training necessary in 
 each of their crafts. And while they would thus be 
 responsible for technical training as such, the State, 
 as a whole, would have the duty of civic education 
 in general." ^ 
 
 Reasoning from a sound premiss that rejects the 
 permanent hypothesis that labour is a commodity and 
 sees in the Guilds the inevitable structure of society 
 that protects labour from the degradation of the 
 commodity theory, we instantly find a true and practic- 
 able solution not only of education but of a host of 
 other perplexing ailments in the body poUtic. No 
 other scheme of life, so far as I know, is adequate to 
 the task. Until, therefore, some more reasonable 
 theory supplants us, we can only test the validity of 
 present proposals as they approximate to our creed. 
 
 Outside our own school, what, then, is the tendency 
 
 ^ National Guilds, p. 205. 
 
 THE SOUND PREMISS 
 
 97 
 
 and drift of the various proposals sprung to life 
 out of the war ? Is it not evident that they all 
 betray anxiety as to the spirit and temper of Labour 
 and a distinct willingness to raise its status ? The 
 current vocabulary affords some guide to the trend 
 of thought. President Wilson recently, in good round 
 terms, condemned the conception of labour as a 
 commodity. The Garton Memorandum mentions the 
 theory without condemning it. It is clearly in the 
 air. I think we may claim to have made distinct 
 progress, for nobody thought of it, let alone mentioned 
 it, before National Guilds was written^PJ And just 
 as we embraced the whole scheme of autonomous 
 labour, so now others are coming at it by easy stages. 
 From every quarter admissions are freely made that 
 labour must have much greater control over its own 
 life in the workshop. When these concessions are 
 spontaneously offered by the employers, it is not for 
 us to accept them with whispering humbleness. On 
 the contrary, if that be the employers' minimum. 
 Labour must demand the maximum. 
 
CHAPTER VII 
 
 THE PERMANENT HYPOTHESIS— III 
 
 The New Social Contract 
 
 The evidence already quoted proves, I think, that as a 
 people we have finally rejected the old conception that 
 Labour's business is to obey without question, criticism, 
 or dissent. Industrial policy has been influenced, if 
 not penetrated, by new social conditions, predicating 
 a new status for the practical workers in every sphere 
 of economic life. The recognition is now general, 
 indeed, almost universal, that Labour has won 
 through to some form of partnership with the possess- 
 ing classes. The deed of partnership has not yet 
 been signed; its clauses have not been discussed; 
 its purport is admitted but not defined. When the 
 parties to the bond meet to agree, it will be found that 
 their agreement is general rather than specific ; that, 
 in the final analysis, no harmony can be reached until 
 the permanent hypothesis is abandoned. The danger 
 lurking in the immediate posture of affairs is that, 
 whilst the present possessors will at great hazard adhere 
 to that hypothesis, Labour has yet to learn and under- 
 stand in principle and detail why and how it-is an im- 
 posture. Nevertheless, it is surely the opening of a 
 
 $8 
 
 CORPORATE LIFE 
 
 99 
 
 new epoch when we turn our backs upon the old S5rstem. 
 Not that as yet we have travelled much beyond it. 
 The most we can say is that Labour can no longer be 
 excluded from a voice in industrial policy ; but the 
 weight to be attached to it has yet to be considered. 
 Without doubt Labour has great weight ; has it the 
 strength to impose it ? Can it pass from the " passive " 
 to the " active " ? Has it the intellectual and moral 
 power ? 
 
 Pondering these epochal issues, I reach a point in 
 the argument where purely economic considerations 
 prove inadequate. For how can we assess the means 
 of life without a prior valuation of life itself ? Here 
 we hit upon a spiritual hiatus in English life. We have 
 developed the cult of the ''practical " to such excess 
 that it has become a national sin. We have accumu- 
 lated untold wealth, giving our minds and hearts to it, 
 with the most sketchy and illusory ideas how rightly 
 to spend it— or, in other words, how to live. It needs 
 only a detached view of English life— English rather 
 than British— to realise this. There is, to-day, no 
 corporate life in England. It is broken up, as though 
 by a volcano, into isolated surfaces and gaping fissures, 
 across which the sundered inhabitants signal to each 
 other, sometimes in terms of hatred, invariably in terms 
 that are misunderstood. A not surprising result, 
 when we remember that on these islets within the 
 island the several populations live a different life and 
 speak a different language. The isolation is not only 
 physical ; it is mental and moral. So widely separated 
 are these groups that intermarriage is regarded as a 
 degraded exogamy ; they maintain their own dis- 
 tinctive schools of writers, preachers, and moralists; 
 
100 THE PERMANENT HYPOTHESIS 
 
 each ignores the ideas, ambitions, and faiths of the 
 
 others. 
 
 The war, we are told, has induced at least a tem- 
 porary unity ; but no harmony in our national life is 
 conceivable until these fissures have been bridged and 
 a spiritual and material coalesence achieved. And 
 that ultimately depends upon our national sense of the 
 dignity and purpose of life. Now the foundation of 
 dignity is self-respect. The moral difficulty that con- 
 fronts us is that the permanent hypothesis destroys 
 the self-respect of Labour, compelling it not only to 
 value itself on a commodity basis, but to acquiesce 
 in the morality of its masters. Is it not evident that, 
 before Labour can make its weight felt in the new social 
 contract, it must evolve a new conception of the life 
 to which it aspires ? In my own experience, duiing 
 the last thirty years, just as the permanent hypothesis 
 was the economic obstacle to any substantial advance, 
 the spiritual obstacle has been a furtive admiration of 
 capitalistic morality. 
 
 If we approach the new condition of affairs in an 
 ethical spirit (so far as it can be disentangled from the 
 economic), it seems clear that there is a vital essence 
 which must be implicit in the contract. Freedom ! For 
 just as dignity is built upon self-respect, so, in its turn, 
 self-respect is the offspring of liberty. I can afford to 
 wait patiently for the time of awakening when the 
 permanent hypothesis and freedom shall be found to 
 be incompatible. It must inevitably come when we 
 reach the detailed discussion of the new social contract. 
 
 In this connection it is worth noting that we can rely 
 upon reinforcements. Decade after decade, all through 
 the century that has developed wagery, an apostolate 
 
 LIBERAL TRADITION 
 
 lOI 
 
 of freedom has passed on its flickering and tormented 
 torch. If it has rarely burst into celestial radiance 
 (once, perhaps, in the days of Mazzini), it has always 
 proclaimed that freedom is greater than all else in our 
 national life — freedom to speak and write, freedom to 
 live in such wise that we may realise the divine within 
 us. It was the inspiration of the Chartists ; it lighted 
 the path of the early radicals ; it was the heirloom of 
 the Nonconformist Churches (who but dimly under- 
 stood it, yet vaguely invoked it) ; the manufacturers 
 pressed it into service, seeking to kill the feudalism that 
 thwarted their ambitions. It is one of history's grim 
 jests that this apostolate linked itself to the economic 
 system that to-day enslaves mankind by the sanction 
 of its permanent hypothesis. If we regard, with what 
 sympathy we can, the predicament of the living 
 apostles of this cult — Mr. Massingham is its arch- 
 priest — we find them in tragic perplexity. They 
 still want freedom more than riches ; they are dis- 
 covering that freedom is a vain thing without econo- 
 mic power. They have at length discovered that 
 *' socicd reform " is but a stage in capitalistic develop- 
 ment, a phase of economic enslavement. I am not 
 without hope that the war's upheaval will throw them 
 out of their old entrenchments, and show them the 
 true direction to point their guns. For myself, I would 
 welcome their adhesion to the new doctrine that it is 
 only by rejecting the tyrannous theory that labour is 
 a commodity that freedom can be won. We who have 
 pioneered it know what it means to live solitary in the 
 desert ; and Labour, never more than now, wants 
 disinterested intellectual support. 
 What is here written as to the cardinal importance of 
 
102 THE PERMANENT HYPOTHESIS 
 
 a prior valuation of life and the existence of a spirit 
 of freedom (as yet unconscious of its vital relation to 
 economic life) will not, I hope, be deemed irrelevant 
 to our consideration of the new social contract. Both 
 aspects are essential. For it is not by legal enact- 
 ment, but by the unseen forces, emanating from the 
 social conscience, that the new regime will become 
 a living fact. In an age of legalism, we are apt to forget 
 that every great revolution preceded established law, 
 only by slow and painful stages, and out of experience, 
 inscribing itself on the statute book. We can only 
 appreciate the strength and meaning of a new order of 
 society by taking stock of all the factors i)y which it 
 conquered. The factors to be conciliated by the new 
 social contract are [a) a more or less blind revolt against 
 degrading conditions ; [h) the imperative necessity of 
 a more scientific and efficient system of production ; 
 (c) the call for a higher spiritual and moral life ; and 
 {d) a revivified passion for freedom. The statute 
 law may regulate, in greater or less degree, conditions 
 arising out of the contract, but it is a magna charta 
 not written by hands and only realised in the spirit. 
 
 But that is true also of the existing system. We 
 do not live by written law, but by tradition and senti- 
 ment. The statute book, with its imposing array of 
 factory laws and regulations, barely touches us ; we 
 resort to it only that we may test how far custom has 
 embodied itself in law. " Good form," in some walks 
 of life, is a more potent agency in conduct than law ; 
 habit and custom rule our goings and our comings. 
 In the relations between employers and employed, no 
 doubt law, if called upon, can lay its heavy hand upon 
 Labour, with its subtle renderings of " conspiracy " 
 
 A LEGAL VIEW 
 
 103 
 
 and " restraint of trade," but, in general, industry is 
 regulated by " the custom of the trade " and by the 
 non-legal policy of compelling Labour to obey by the 
 alternative of starvation. Even amongst themselves 
 there is a well-understood convention that employers 
 shall not push their legal rights or unduly exert their 
 economic power against their employees to the em- 
 barrassment of their colleagues or to the danger-point 
 of an explosion. The Bishop of Winchester puts it 
 clearly enough in a letter to the Times. Defining 
 " profiteerers " as men whose absorbing thought is on 
 the dividend, and that alone, he remarks that it is 
 ** all-important to know whether capital, Hke other 
 interests and faculties, has power to control its own 
 black sheep." In like manner, it is equally important 
 that we shall know whether Labour has power to 
 control its own blacklegs. 
 
 Important though it be that we should rightly 
 appraise the comparative remoteness of Parliamentary 
 law from the birth and completion of the new social 
 contract, nobody is quicker than the accomplished 
 lawyer to seize the significance of new tendencies and 
 movements. Lord Wrenbury, for example, who is 
 probably our greatest living lawyer. He has noted 
 that the old social contract has been dissolved by the 
 war. Employers and employed, he tells us, will return 
 from the war, their views of each other profoundly 
 changed. Our industrial system must change with it. 
 Lord Wrenbury now sees the imperative need to con- 
 fer upon Labour a new status. " For every relevant 
 purpose every labourer is a capitaUst and every capital- 
 ist is a labourer." He puts the new conception of 
 Labour with characteristic force : " The skill of the 
 
 
ll 
 
 
 104 THE PERMANENT HYPOTHESIS 
 
 labourer, which he has acquired by years of practice, 
 his habits of industry, his tools, and so on, are as much 
 capital as are the accumulated funds of the capitaHst. 
 Even the dock labourer, who brings little more than 
 muscular strength, equally brings that in as his 
 capital." He condemns the Trade Unions for limiting 
 production (which shows he has yet much to learn), 
 and then afftrm.s that increase of production is in- 
 crease of wealth (which shows he has yet much to learn), 
 and that " as wealth increases the comfort of every 
 member of the community must in the long-run in- 
 crease " (which shows he has yet much to learn). 
 " The labourer, liowever, insists, and not, I think, 
 unreasonably, that he wants presently and at once to 
 see distribution made upon terms which seem to him 
 more equitable." Clearly a change of status, for 
 hitherto distribution has been the exclusive function 
 of the employer. 
 
 Lord Wrenbury now^ ponders the possible terms of 
 the new social contract. Still obsessed by the perma- 
 nent hypothesis, he naturally accepts the continuance 
 of the capitalist as such. He sees, however, a grave 
 lack of harmonious action between capitalist and 
 labourer (even though, ex hypothesi, the labourer is 
 a capitalist too). Why ? " Principally because while 
 both employer and employed contribute to production, 
 the thing produced belongs to the employer to the exclusion 
 of the employed. This fact lies at the root of all in- 
 dustrial discontent." Can it be possible that Lord 
 Wrenbury has glanced at page 75 of National Guilds ? 
 
 " The fundamental fact, common to every kind of 
 wage, is the absolute sale of the labour commodity, 
 
 EQUITY 
 
 105 
 
 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 con- 
 trol of the products of the purchased labour com- 
 modity, 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 accompHshed, he is economi- 
 cally of no further consideration.'* 
 
 Lord Wrenbury, whilst admitting the truth of our 
 statement, is greatly distressed about it. He wants to 
 square the circle : " That man will have solved the 
 problem who finds the way to give the employed upon 
 commercial principles a share and interest in the thing 
 produced." Need I assure Lord Wrenbury that, inside 
 the ambit of the wage-system, that problem can never 
 be solved ? He has rejected the old idea of a submis- 
 sive proletariat, but he cannot understand (blinded by 
 the permanent hypothesis) that '' a share and interest 
 in the thing produced " is the negation of capitaHst 
 exploitation, with the resultant rejection of " com- 
 mercial principles." Let me remind Lord Wrenbury 
 of a factor he has omitted. He wants to give the 
 " employed " a share of the thing produced " upon 
 commercial principles" ; he completely forgets that 
 it can only be produced " upon commercial principles " 
 with the passive co-operation, yet effectual help, of the 
 unemployed. Is he prepared to give, " upon com- 
 mercial principles," a share and interest in the thing 
 produced to the unemployed ? 
 
 I think we can now perceive that, whilst the old 
 
io6 THE PERMANENT HYPOTHESIS 
 
 social contract has been torn to shreds by the war, 
 whilst such writers as " D. P.," the Garton Researchers, 
 and a great lawyer hke Lord Wrenbury are agreed that 
 a new social contract must be framed, they have not 
 as yet hit upon the formula to guide them. They can 
 only see, in a greatly accelerated production, economic 
 restitution after war's ravages. To that end, they are 
 prepared to concede to Labour a new status, and, in 
 some way not yet evolved, more liberal remuneration. 
 Undoubtedly, they have been touched by the human 
 issues of the war, perhaps grasping the possibility of 
 trench camaraderie being ultimately transmuted into 
 economic fellow^ship. But their imagination boggles 
 at the plain fact that enduring fellowship is impossible 
 when founded on a false relationship. There can be 
 no fellowship between men whilst a small minority 
 regards the labour of the majority as a commodity. 
 Disguise it as they may, let them refer to it never 
 so discreetly, it is this lie of the century that divides 
 the nation ; that will continue to divide it until we 
 indignantly reject it with a moral passion supported 
 by the logic of economic facts. 
 
 The distinguished lawyer whom I have quoted has 
 gone to the root of the problem with his deadly query — 
 who really ought to possess the finished ^ product ? 
 But he, like all the others, cannot see (blinded by 
 the permanent hypothesis) that, as the new social con- 
 tract is established, so-called " commercial principles " 
 become obsolete. For the essence of these commercial 
 principles is the buying and selling of commodities, 
 of which the most important is labour. 
 
 I have emphasised the spiritual and social signifi- 
 cance of the new contract, because on examination it 
 
 CHANGE OF HEART 
 
 io7 
 
 is found to involve a change of heart— a revolution in 
 all our ways— our way of thinking, our way of acting, 
 our way of faith. Inevitably so, because the mass of 
 mankind shall have mounted to a higher plane, trans- 
 forming in its course our whole conception of economic 
 life, of " commercial principles," of a purblind law still 
 mumbling ancient maxims. Is it worth our while to 
 maintain the pretence of the permanent hypothesis ? 
 
ff 
 
 m 
 
 CATASTROPHIC 
 
 109 
 
 CHAPTER VIII 
 THE PERMANENT HYPOTHESIS—IV 
 
 Outlines 
 
 When we reach the operative clauses of the new social 
 
 contract, we fall, with a thud, from the spacious realm 
 
 of the speculative upon the actuahties of life. It is 
 
 inevitable. Nor would we avoid it if we could. For 
 
 economics does not embrace all hfe, nor explain all 
 
 history. We may differ as to the part played in 
 
 history by the materialistic factor ; when the learned 
 
 men of the world are disputing over it, who am I that 
 
 I should decide ? My quarrel is first with those who 
 
 ignore it altogether, and, secondly, with the monstrous 
 
 regiment of scribblers who cannot intellectually escape 
 
 from that ceconomia vulgaris, which, since the days of 
 
 Bentham, has been the palladium of our commercial 
 
 system. Nevertheless, it is our business, with vigilance 
 
 and patience, to infuse popular political economy 
 
 with a greater and ever greater " content." It is 
 
 only in this direction that any compromise is possible. 
 
 I remember that many years ago the " catastrophic 
 
 theory " was popular in certain Sociahst circles. The 
 
 argument was too easy to be true. The capitalistic 
 
 system would one day finally disintegrate, the transi- 
 
 X08 
 
 tion to SociaUsm being the work of a few hours. The 
 disintegration would, of course, have been proceeding 
 (as with the one boss shay) for a long period, to culminate 
 in some dramatic event— the universal strike, a great 
 tumult, or what not. Therefore, the duty of all 
 Socialists was to push on with their propaganda, 
 looking neither to the right nor the left, inspired with 
 the belief that the catastrophe might come at any 
 moment, like a thief in the night. And any compromise 
 with the enemy merely postponed the advent of the 
 great day. We have all, I think, passed beyond that 
 quaint doctrine of determinism tinctured with free- 
 will. We do not now, I trust, so hopelessly confuse 
 our categories. We must have regard for factors 
 other than, even if subsidiary to, the fundamentals 
 of economic science. Teleology and metaphysics still 
 play their parts in the Hfe of mankind and we disregard 
 that fact at our peril. But if the materialist historical 
 school limits its explanations to its own frontiers, the 
 exasperating aspect of the ceconomia vulgaris is its 
 inconsequent absorption of economics, morals, religion, 
 ethics, and commerce into an indigestible whole. It 
 is at least important to remember that the economic 
 elements are non-moral ; ethics may discover for us 
 some fules of conduct in our contact with these non- 
 moral elements. I can well believe that there is a 
 higher unifying synthesis. I wish I knew what it is ! 
 
 Subject, then, to a clear recognition of the vital 
 truth of our economic principles, we need not unduly 
 fear their partial application to life ; or even their 
 partial absorption into the ceconomia vulgaris. All to 
 the contrary ; this is veritably the thin end of the 
 wedge. It is not compromise ; it is our pioneers 
 
i 
 
 ■I 
 
 
 iio THE PERMANENT HYPOTHESIS 
 
 going over the parapet. And our problem is : how far 
 has the ground been prepared ? 
 
 As we approach the new social contract, does the 
 validity of our argument disclose itself ? In agricul- 
 ture, for example ? As the war proceeds, the elements 
 of our national life are revealed in their varying 
 dimensions and urgencies. Our Army needs come 
 first. But food is as important. And so we come to 
 agriculture, still, by the way, our largest industry. 
 Enter Mr. J. L. Green, who makes a httle proposal to 
 the Times. He wants the Government to order 10,000 
 parish councils to put under wheat, by the end of 
 spring, at least 50 acres in each parish, or 500,000 acres 
 in all. If this were done, so he avers, it would provide 
 bread for 5,000,000 people for six months. Councillors, 
 farmers, or others who thwarted the order are to be 
 heavily fined and otherwise penalised. The method 
 seems a little Prussian, but, as Mr. Green says, " There 
 is now no time to stick at trifles." Assuming the 
 accuracy of Mr. Green's estimates (and I see no reason 
 to doubt them), and assuming the capital to be forth- 
 coming (no great difiiculty as a matter of fact), we, 
 nevertheless, reach the disquieting conclusion that the 
 existing agricultural industry is not proving equal to 
 the requirements of war conditions. Something has 
 got to be done ; this is no time to stick at trifles. If 
 the isolated individualism of the British farmer fails 
 us, then we must have resort to some kind of collec- 
 tivism. It apparently only needs the ukase of a 
 Minister. Come ! What are we waiting for ? Alas ! 
 It is not quite so easy as it looks. 
 
 Some practical questions call for solution. Where 
 is the labour ? And who will direct 'operations ? A 
 
 AGRICULTURE 
 
 III 
 
 parish council itself cultivating the soil is not without 
 humour. And who shall decide upon the rate of 
 wages ? And how shall the profits be allocated ? 
 Granting that it is a good idea to grow this wheat- 
 needs must when the German drives— I suggest to 
 Mr. Green that there is a more excellent way. Instead 
 of compelling 10,000 parish councils to do it, why not 
 throw the onus upon a representative body of agricul- 
 turists ? It is not without significance that, ten or 
 fifteen years ago, Mr. Green's proposal would have been 
 hailed by the whole body of SociaUsts as an overwhelm- 
 ing admission that the day of laissez /aire was ended, 
 and that Socialism was triumphantly vindicated. I do 
 not think that Mr. Green's proposal will meet with 
 more than a passing glance from the Socialist Old 
 Guard. The facts have proved too strong for them. 
 They know that an organisation of local government 
 is strictly Hmited to its own particular function ; they 
 know that that function cannot be expanded to 
 include industrial production. 
 
 Not only is the organisation inadequate ; the per- 
 sonnel is misuitable. If 10,000 parish councils are to 
 plant 500,000 acres to produce 16,000,000 bushels of 
 wheat, it obviously becomes a very large agricultural 
 transaction, its success depending upon skilled labour 
 and management working upon an ascertained economic 
 unit. Mr. Green proposes 10,000 separate and inde- 
 pendent managers ; we Guildsmen would say that the 
 work should be done by the agricultural industry 
 itself, on lines laid down by the practical experience of 
 the industry. We would, of course, go much further. 
 We would assert that only by a democratically organised 
 industry — a Guild, in short — could this work be done 
 
11^' 
 
 
 112 THE PERMANENT HYPOTHESIS 
 
 with satisfaction to all concerned. One foreman, 
 democratically chosen by the labourers in each parish, 
 would do the work better than a parish council, whilst 
 the distribution of the wheat would, of course, be more 
 economically managed from some centre, chosen for 
 that specific purpose. 
 
 Mr. Green may not unnaturally inquire why the 
 parish councils should thus be cavalierly ruled out ; 
 why their present limited functions should not be 
 extended. I suggest that he has unconsciously supplied 
 the answer. He has in mind certain individuals — 
 " councillors, farmers, etc.," who might thwart the 
 work. And I can well believe it. These spoil-sports 
 are the product of local politics. Surely we under- 
 stand by this time that politics — local, municipal, or 
 national — is a poor bed-fellow for economic work. 
 Pohtics and industry do not mix and ought not to 
 mix. Ignoring the main fact that the parish councils 
 are in tutelage to the County Councils (where politics 
 — the pontics of the motocracy — rules the roast) it is 
 easy to see that the selection of the land and the control 
 of the work would lend themselves to petty politics, 
 to an extent only to be reahsed by those who have 
 lived in rural England. It is not only the inconvenience 
 and irritation of the intrusion of politics, bad though 
 that may be ; there is a principle underlying the 
 Guildsman's criticism. For, whilst it is essential that 
 our industrial work should be done on exclusively 
 industrial lines, it is equally essential that pohtics 
 should be purified from mercenary considerations. 
 Politics ought to be the expression of the spiritual life 
 of the nation, manifesting itself centrally in ParHa- 
 ment and locally in the subsidiary governing bodies. 
 
 AGRICULTURAL AUTONOMY 113 
 
 My criticism, it will be observed, is motived by the 
 principles deduced from the purely economic argument 
 that labour is a commodity, and that it can only cease 
 to be a commodity, economically considered, when 
 Labour, by a monopoHsing process, can control its 
 labour. That involves a fundamental change in our 
 national activities with its logical sequel of a new 
 phase in our poUtical economy. Nevertheless, my 
 knowledge of agriculture, meagre as it unfortunately 
 is, tells me that this purely deductive concept corre- 
 sponds with the concrete facts of agricultural fife. 
 
 So far, then, it would appear that the only new 
 proposal in regard to agriculture favours a collectivist 
 rather than a Guild solution. Even so, the contrast 
 between the two conceptions suffices to prove that in 
 practice the Guild solution must ultimately be accepted. 
 I am not without some support. The labour shortage 
 in agriculture has now become acute. Farm labour 
 has been " combed out " to such an extent that our 
 home food supplies are seriously threatened. Team- 
 sters have gone ; shepherds have gone ; other essential 
 farm labourers have gone. A crisis has been reached. 
 The Hon. Charles Bathurst is alarmed. He now 
 proposes that a board of referees should be appointed 
 to decide in the case of all skilled farm workers whether 
 their replacement is likely to reduce materially the 
 production of food. But why stop there ? Might 
 not this board, composed of practical and experienced 
 agriculturists, become the nucleus of a representative 
 Agricultural Congress and (full powers being given to 
 it) itself boldly assume the responsibihty of organis- 
 ing and marketing all agricultural produce ? If the 
 pressure of the war brought such a Congress into life, 
 8 
 
'If ■ 
 
 114 THE PERMANENT HYPOTHESIS 
 
 we may be sure that it would not die when peace 
 comes. Indeed, it will be doubly important. The 
 farm labourers who have gone to the war, fed, clothed, 
 and paid on a higher standard than they have ever 
 before experienced, will not willingly submit to the old 
 debasing conditions when they return. 
 
 Whilst it would be foolish to believe that any 
 approach to Guild organisation is as yet even vaguely 
 apprehended by the agricultural industry, it is almost 
 equally true to assert that the longer heads in our 
 other staple trades are trying to fend off and forestall 
 the creation of Guilds. Let us return to the Garton 
 Researchers. They have already discovered that 
 Labour objects to (and sometimes rejects) the com- 
 modity theory ; they have also discovered that a 
 change of status is imperative if industrial peace is to 
 be attained after the war. Naturally enough, being 
 what they are, they dare not discard the permanent 
 hypothesis. Labour must remain on a commodity 
 basis because rent must be exacted and dividends paid. 
 They accordingly seek to evade that issue, at the same 
 time, if possible, conferring on Labour a new status. 
 As the only new status that Labour can accept is the 
 change involved in the rejection of the commodity 
 basis, we may be certain that our Researchers are 
 solving no problem, and, at best, are merely postponing 
 the evil day. 
 
 It is extremely interesting, however, to note their 
 proposals. Their thesis, shortly stated, is that our 
 one way of salvation, after the war, is to concentrate 
 on production. Quantitative production, quaHtative 
 production, any kind of production. In their view, 
 all production spells wealth. But it is recognised 
 
 I ' 
 
 (\ 
 
 LABOUR AND PRODUCTION 
 
 115 
 
 that the war has only temporarily obscured the 
 pre-war class struggle ; it still exists, and unless 
 diplomatically handled will break out with redoubled 
 fury when Tommy comes marching home. They 
 would, therefore, kill two birds with one stone : by 
 conceding workshop control and by Joint Boards, they 
 seek to conciliate Labour ; by conciliating Labour, 
 they confidently reckon upon the smooth working of 
 the factories, and so securing that increased produc- 
 tion which will restore our economic power. It is so 
 simple, one wonders why nobody ever thought of it 
 before. How, then, is Labour to be conciliated? In 
 the more isolated businesses, a joint committee is 
 proposed representing both the Management and the 
 Works Staff. 
 
 " The representatives of management would be 
 required to explain the nature and extent of any pro- 
 posed innovation designed to increase output or 
 economise effort — the introduction of new automatic 
 machinery, time and motion study, standardisation of 
 tools, analysis of fatigue, elimination of waste — and 
 its effect upon the earnings of the firm and of the 
 individual worker. This explanation should be as 
 clear and full as possible, with the object of giving 
 each worker an interest "and sense of responsibility 
 in his work, by making clear to him, through his 
 representatives, the reason for the methods to be 
 adopted and the relation of his job to the whole 
 process of production." 
 
 Most friendly to be sure. And now suppose that 
 the workers, having considered their representative's 
 report, take strong objection to the proposed innova- 
 
w 
 
 ii6 THE PERMANENT HYPOTHESIS 
 
 tion, which really means reduced costs and increased 
 profits, what then ? Our Researchers of mild and 
 benevolent aspect have their answer pat : "A wise 
 Employer will always have the interests of his staff at 
 heart, and workmen who feel themselves to have a 
 recognised interest in the business will have many 
 suggestions to put forward for promoting its efficiency." 
 So I should think ! And the permanent hypothesis ? 
 Go away ! Is this a time for joking ? Thus we see 
 that a new spirit pervades the industrial world. Peace 
 reigns. Production proceeds apace. Consider the 
 new idyllic conditions in the person of John Smith. 
 John has spent an hour at the Joint Committee. They 
 have, in great amity, discussed a " proposed innova- 
 tion." John has been duly impressed with a " sense 
 of responsibility in his work by making clear to him 
 the reason for the methods to be adopted." He goes 
 home to tea, smiling and happy. The kettle, boiling 
 on the hob, sings a soothing welcome, and, unless his 
 nostrils deceive him, there are crumpets in the oven. 
 His wife welcomes him, the love-light in her eye. 
 Surely it were good for the soul to remember that it is 
 on such happy homes we have built up, in transcending 
 grandeur, our mighty Empire. 
 
 ** Come, Mary, lass, bring on the grub." 
 " It's all ready. Jack, dear lad. Had a good day at 
 the works ? " 
 
 " Ay ! Spent the last hour at the Joint Com- 
 mittee." 
 
 Anything happen ? " 
 
 Ay. A * new innovation,' as they call it." 
 
 What's that ? " 
 
 A new machine. Saves labour. It's a grand 
 
 (t 
 
 << 
 
 €t 
 
 (I 
 
 I i 
 
 UNEMPLOYMENT 
 
 117 
 
 thing to be told everything. Makes you see what's 
 in the bosses' minds." 
 
 " Whose labour does it save, Jack ? " 
 
 " Well, in this case, mine." 
 
 " And what will they do with you ? " 
 
 " Oh, I've got the sack." 
 
 " And what's to become of us ? " 
 
 " God knows. You see, Mary, it's written at the 
 head of the Joint Committee's minute-book that ' a 
 wise Employer will always have the interests of his 
 staff at heart, and workmen will have many suggestions 
 to put forward for promoting its efficiency.' " 
 
 " And who proposed this new innovation ? " 
 
 "I did!" 
 
 Leaving John Smith, happy in the fully acquired 
 knowledge " of the reason for the methods to be adopted 
 and the relation of his job to the whole process of 
 production," let us move on to the larger scheme of 
 organisation for the staple trades. 
 
Ifff^ 
 
 if 
 
 CHAPTER IX 
 
 THE PERMANENT HYPOTHESIS~V 
 
 Outlines (continued) 
 
 The Carton Researchers are deemed to be representa- 
 tive of the more enhghtened profiteers, and that is 
 why I treat them with so much respect. But if these 
 enhghtened capitahsts have no plan to avoid the 
 miseries of the class struggle, then we may be sure 
 that, within the sphere of the permanent hypothesis, 
 there is no solution. Soft words butter no parsnips, 
 and a mere declaration in favour of joint conferences 
 to explain the reason of innovations must prove futile 
 unless accompanied by a binding agreement to regard 
 the unemployed as part of the working staff. We 
 know, however, that costs are estimated by accounting 
 only for the cost of the labour commodity actually 
 operative "at the moment of the production. That is 
 to say that the cost of the reserve of employment is 
 thrown upon the community and not upon the industry. 
 It is as though the reserve forces in France were not 
 on pay and dependent upon charity. It is characteristic 
 of the prevailing shallow thought upon nationaleconomy 
 that because, during the war, unemployment has gone 
 down to less than one per cent., after the war labour 
 
 ii8 
 
 WAR'S SEQUEL 
 
 119 
 
 will be in equal demand. Thus, the Carton Memor- 
 andum explicitly declares that " the probable cause of 
 unemployment after the war will be, not the lack of a 
 demand for labour, but the difficulty of bringing to- 
 gether the workmen and the job." Then follow the 
 usual proposals for joint committees working in con- 
 junction with the Board of Trade — the Webb-Be veridge 
 nostrums known to all of us. It is true that the 
 Carton writers, on second thoughts, hedge a little. 
 After all, they admit, " it is difficult to see how a 
 certain amount of temporary unemployment can be 
 avoided " — and fall back upon " State and municipal 
 expenditure upon works of public utility." 
 
 Thus we see that the war has taught these gentlemen 
 precisely nothing. At bottom, they are bankrupt of 
 ideas. All that they do is to set out in new clothing pre- 
 war proposals. Now, I assert with confidence that after 
 the war we cannot escape from a dreadful and probably 
 a prolonged period of acute unemployment. We are, 
 at present, living either upon our capital or are trans- 
 ferring our capital to non-industrial purposes, such as 
 munitions or public loans. A simple example occurred 
 to me only last week. I wanted to sell a house. 
 Everywhere it was the same story : habitual buyers 
 of that class of property were steadily investing in 
 six per cents. It was less trouble and less risk. It 
 may be said that, after the war, investors will realise 
 on their Government loans and readapt themselves 
 to business requirements. But how will they realise ? 
 Their money has been spent ; what remains is the 
 credit of the Covernment Consolidated Fund. The 
 credit is doubtless excellent ; but credit is one thing 
 and ready cash another. Even if it be granted that 
 
 ! I 
 
 Ij 
 
Hi' 
 
 120 THE PERMANENT HYPOTHESIS 
 
 our existing resources are equal to our paper credit, 
 the loss through destruction and dislocation will im- 
 peratively call for the mobilisation of new capital 
 resources. Where are they to be found ? In one 
 direction only : in the capitalisation of co-ordinated and 
 co-operative labour. (That, economically, is why the 
 Guilds are inevitable.) But will any sane man declare 
 that such a new departure in finance is possible either 
 during the war or immediately upon its termination ? 
 
 Let us face the facts : the process of readaptation to 
 peace conditions will be slow and painful, and cannot 
 but express itself in a high percentage of unemploy- 
 ment. The glamour of our present artificial industrial 
 conditions seems so to hypnotise nearly every writer 
 on Reconstruction that he remains blind to the certain 
 fact that, after the war, unemployment will be our 
 most pressing problem. It will be a nightmare. 
 
 I have interjected this question of unemployment 
 (almost literally the skeleton at the feast) at this point, 
 because, if we forget it, we cannot appreciate at their 
 true value the various proposals for Reconstruction 
 now emanating from well-fed quarters. Of two things, 
 one : either there must be a new departure by com- 
 pelling every industry to maintain its own unemployed, 
 or (the more exact definition) its own labour reserves ; 
 or, we must fall back upon the old conditions, the Trade 
 Unions succouring their own members and the com- 
 munity, with the same old cruel kindness, attending 
 to the residue. If we are strong enough to force the 
 new departure, we have begun the industrial revolu- 
 tion, whose one ending is the Guilds. We can very 
 easily test the intentions of the Reconstruction writers 
 by bluntly putting the question : Are you prepared iq 
 
 WAR'S SEQUEL 
 
 121 
 
 charge the industry with the maintenance of its own 
 unemployed ? I do not anticipate a particularly fruit- 
 ful reply. In the second alternative, we have the Trade 
 Unions with their regulations abrogated and their funds 
 depleted. And just as the Trade Unions are weakened, 
 so relatively are the Employers strengthened. 
 
 I find it difficult to write about unemployment in 
 measured language. How can we forget that it is the 
 tragedy that has dogged and damned every social and 
 economic movement during the past century ? The 
 1834 Poor Law Report is surely the most horrible 
 document ever penned by man or god or devil, whilst 
 the Poor Law Amendment Act that followed it marks 
 the lowest degradation to which we have simk as a 
 nation. Then came the " hungry 'forties " at a time 
 when we were indisputably the richest people in the 
 world. With the interlude of the Industrial Remunera- 
 tion Conference, whose report is now suitably covered 
 with dust, we come to the 1892-95 industrial depression, 
 when the unemployed at length made themselves 
 heard. The Unemployed Committee, 1893, had no 
 solution to offer beyond a circular issued by the Presi- 
 dent of the Local Government Board. Then came the 
 Minority Report of the Poor Law Commission, with 
 its diabolical distinction between poverty and destitu- 
 tion—a refinement of cruelty that would have made 
 Torquemada green with envy. I remember about 
 1895 speaking of employment to a prominent economist. 
 " There is no unemployed problem," he remarked ; 
 '* it is a condition, and not a problem. There are 
 industrial problems, fiscal problems, political problems, 
 but, having regard for human nature and the facts of 
 life, there is no unemployed problem, properly so 
 
iV' 
 
 ^n 
 
 122 THE PERMANENT HYPOTHESIS 
 
 called." And this is still the scientific attitude. " If 
 we do this or that, then there will be a marked reduc- 
 tion of unemployment," is really what men and social 
 reformers think. The result is a certain fataHstic 
 acceptance of unemployment — sorry, you know, but 
 it can't be helped. And so, in times of depression, it 
 spreads like a blight over the industrial areas, being 
 regarded very much as an Act of God. 
 
 Nevertheless, all scientific dicta to the contrar^^ not- 
 withstanding, unemployment is a problem in itself.^ 
 It can be quite simply stated. The employer claims that 
 he need only buy so much of the labour commodity as 
 he requires for any specific purpose or given product. 
 He asserts that he cannot compete in the market unless 
 the sale of the labour commodity strictly conforms to 
 the law of demand and supply. But he admits that a 
 reserve of labour is requisite to regulate wages and to 
 meet sudden or increasing demands. " Why, then, 
 don't you maintain your own reserve ? " we ask. 
 " You do it with ore, or timber, or cotton, or wool ; 
 why not with labour ? " " Oh ! " he answers, " in 
 the one case it is economic necessity, in the other 
 it isn't, and the essence of business is to yield only to 
 the imperative. Of course," he adds, " as a citizen 
 and a ratepayer, I am willing to bear my share in the 
 maintenance of the man as distinct from his labour. 
 But I'll only buy his labour as and when I want it. 
 
 1 It should be noted that there are now two problems of unem- 
 ployment : (fl) abnormal unemployment, dealt with by Mr. Orage 
 in the Preface ; (b) the normal problem inherent in the main- 
 tenance of wagery. See also Mr. G. D. H. Cole's " Some Reflections 
 on the Wage-System " — a series of articles in New Age (March-April 
 1917) and soon to appear in book form ^s Self -Government in Industry 
 (G. Bell & Sons). 6s. 
 
 GOOD TIMES 
 
 123 
 
 Besides, if I secure a large reserve of raw material, 
 that is a capital outlay ; labour, as you know, goes 
 into the revenue and expenditure account." That is 
 where the permanent hypothesis carries us! It is 
 not the man that is wanted ; it is his labour. The 
 Guildsman's answer is so simple that it confounds the 
 wise: "Seek first the man, and his labour will be 
 added unto you. And the man is entitled to main- 
 tenance in season and out of season by the trade 
 which has accepted him and for which he has 
 
 worked." 
 
 Every Reconstruction proposal, therefore, that 
 ignores or minimises the probabihties of unemploy- 
 ment is in the nature of a dishonest gamble. It is 
 in fact intellectually negligible, if it does not provide, 
 not only for uneniployment due to dislocation, but 
 unemployment due to shortage of demand. The first 
 is comparatively simple and temporary, easily solved 
 by carefully arranged demobilisation ; the second will 
 remain after the war, as it was before, the test of our 
 statesmanship and of our sincerity. The Garton 
 Researchers have met the question with vague generali- 
 ties. It is nevertheless interesting to consider their 
 constructive proposals as a sign of the times. A period 
 of unemployment will shake their structure to pieces ; 
 but that need not deter us from examining the structure, 
 not so much because of its inherent value, but to get 
 at the minds of its variegated architects. We have 
 aheady discussed their proposal for a joint conference 
 in works of an isolated character, and discovered that 
 innovations, being to save expenses and reduce labour, 
 lead to unemployment, and we left John Smith ponder- 
 ing whether a reasoned discharge was in substance 
 
m 
 
 124 THE PERMANENT HYPOTHESIS 
 
 preferable to the old system. Either way, the door of 
 the factory was closed against him. 
 
 We have next to consider the staple trades in their 
 more concentrated form. The Gar ton proposal is that 
 we shall set up Joint Boards composed of representa- 
 tives of the Employers' Associations and the Trade 
 Unions. This sounds promising. Capital and Labour 
 have surely met and buried the hatchet. Let us go into 
 more detail. " Having regard to the differentiation of 
 functions betw^een Management and Labour, and the 
 large number of problems affecting one or both parties, 
 two co-equal Boards might be created in each industry, 
 one representing Management and the other Labour, 
 with a Supreme Board of Control co-ordinating the 
 work of both." It looks as though we were progressing 
 towards the Guilds. The Management Board would 
 attend to the business side and, of course, the Labour 
 Board would deal with conditions and hours of labour, 
 demarcation, dilution (observe, please, that dilution is 
 to continue after the war). I really must quote the 
 delightful conclusion : 
 
 *' In this manner it should be possible to construct 
 and give effect to a definite policy and programme for 
 each great industry as a whole, representing a recon- 
 ciliation between the common and competing interests 
 of Employers and Employed, and based both upon the 
 desire to obtain the maximum of efficiency and the 
 desire to obtain the best possible conditions for the 
 workers." 
 
 Hang it all ! Wages were surely intended to be 
 included in the settlement, for it represents a " recon- 
 ciliation." Yet it is curious that wages are not 
 
 m 
 
 M 
 
 GUILD ORGANISATION 
 
 125 
 
 specifically mentioned. A Httle doubt oppresses me. 
 It is rather odd, don't you think ? 
 
 Having made provision for District and Works Com- 
 mittees, we mount to higher things— something very 
 like a National Guild. The Supreme Board of Control 
 is finally to resolve itself into a National Industrial 
 Council for each of the staple industries or groups of 
 allied industries. Election by ballot, parallel units, one 
 Managerial and one Labour representative. Nothing 
 (except wages) is overlooked. " A speaker of broad 
 sympathies and experience, capable of directing and 
 focusing, the discussions upon the practical problems 
 to be dealt with, would be chosen by mutual consent." 
 I almost think the Garton Researchers must have 
 read chap, v., part ii., of National Guilds. 
 
 That doubt about wages still haunts me. Surely. 
 . . . W^ll, let's read on : 
 
 " Such Industrial Councils would in no sense super- 
 sede the existing Employers' Associations and Trade 
 Unions, many sides of whose present acti\dties w^ould 
 be unaffected by the creation of the new bodies. 
 Matters connected with the sources and supply of raw 
 material and the cultivation of markets for the disposal 
 of the finished products would remain exclusively the 
 concern of purely commercial federations of manu- 
 facturers, acting in conjunction with the State. The 
 benefit side of Trade Unions, and many phases of the 
 internal organisation of labour by them, would be 
 similarly unaffected." 
 
 It grows curiouser and curiouser. Even the Em- 
 ployers' Associations are not to bother themselves 
 about wages — only raw nifiterials and markets — and 
 
w 
 
 'I 
 
 126 THE PERMANENT HYPOTHESIS 
 
 " acting in conjunction with the State." In such 
 altitudes, to mention wages would seem vulgar and 
 out of place. No employer would dream of it. Of 
 course, over a cigar after lunch it might be cursorily 
 mentioned a propos de rien. And the Trade Unions 
 too. They would be too deeply concerned with 
 " benefits " and " internal organisation " for wages 
 ever to flit across their minds. Nevertheless, " such 
 Industrial Councils would in no sense supersede the 
 existing Employers' Associations and Trade Unions." 
 Can the Researchers be pulling our legs ? 
 
 No ! I find that, after all, wages have not been 
 overlooked. We are told that the field of action open 
 to the Industrial Councils would be very great. Then 
 it is alphabetically tabulated :—(a)—{b)—{c)—(d)—{e) 
 — (/) the prevention of unemployment, the development 
 of security of tenure in the trade, and the decasualisa- 
 tion of labour ; (g) questions of wages and piece-rates. 
 After all, we do come to it, don't we ? 
 
 The embarrassing question unin\ited emerges : Are 
 the Garton Researchers a band of ingenuous young 
 men, or do they take us for fools ? Do they seriously 
 suggest that the Employers' Associations will not discuss 
 wages ? Will not, in fact, decide what wages they will 
 pay, precisely as they did before the war ? If the 
 Researchers really think so, I promise them that they 
 will be quickly disillusioned. The Employers will 
 settle the question of raw material and the cultivation 
 of markets easily in a quarter of an hour ; they will 
 spend hours discussing wages. But why should raw 
 material and markets be reserved exclusively for the 
 Employers ? Surely the Management Boards can 
 attend to such matters, probably better than the 
 
 KM 
 
 THE WAGE PROBLEM 
 
 127 
 
 Employers themselves. And have the Trade Unions 
 and the workers nothing to say about the supply of 
 raw material and the cultivation of markets ? Their 
 wages depend upon it. Clearly not a thing. And 
 why.? Because Labour itself is a raw material, and 
 how can one raw material look after another ? The 
 permanent hypothesis still prevails. 
 
 It is a pity that Lord Wrenbury did not pose his 
 searching question as to " the share and interest in the 
 thing produced " before the Garton Memorandum was 
 written. I can readily understand that the same 
 question asked by Guildsmen would be ignored by 
 such a solemn and respectable group ; but the same 
 question put by a Lord Justice of Appeals is quite 
 another pair of shoes. The answer, however, would 
 substantially be the same. Lotd Wrenbury suggests 
 partnership ; the Garton Researchers stand by " wages 
 and piece-rates," raw material and markets being the 
 exclusive concern of the Employers. The permanent 
 hypothesis is sacred. 
 
 After all, they have mentioned wages and they have 
 mentioned imemployment. Casually, no doubt ; but 
 really and truly they have not been overlooked. When 
 I come to examine this Memorandum, I am bound to 
 admit that there is practically nothing relevant that is 
 omitted. But the same emphasis and stress is given 
 to everything. No one thing is more important and 
 more urgent than another. You pay your money 
 and you take your choice. With one exception : the 
 one thing really urgent is production — and the Em- 
 ployers will look after the raw material (including 
 labour) and the marketing of the finished products. 
 
 ,! 
 
CHAPTER X 
 
 THE PERMANENT HYPOTHESIS— VI 
 
 The Collectivist Alternative 
 
 It was not unnatural that the spectacle of the State 
 intervening in trade and industry, controlling the rail- 
 ways, the munition factories, and now the South 
 Wales mines, purchasing wheat and sugar in gigantic 
 quantities, and generally nosing into everything, 
 should lead many to think that, after all, State 
 Socialism must be the way out. We must admit that 
 we have learnt much by these gigantic State experi- 
 ments — particularly what to avoid. If we go about 
 with our eyes open, we cannot but be struck with 
 the errors committed and the wastage incurred. Of 
 course, it may be ascribed to the rush and bustle of 
 war. But the question ever recurs whether, had our 
 industries been organised on a Guild basis, far greater 
 efficiency and less waste would have resulted. When 
 the war is over, the story of the Mauretania will 
 become a classic. And I am waiting with considerable 
 curiosity to hear the inner history of the appointment 
 of the Food Controller. 
 
 I am not now concerned with the situation as it is 
 in war-time, but if State intervention during war is to 
 
 laS 
 
 VAGUE PARTNERSHIP 
 
 129 
 
 be held up to our admiration, it is not irrelevant to 
 criticise it, even as a war measure. One conclusion 
 seems to have been reached : that, however incom- 
 petent our Bureaucracy may be in administration, it 
 has , proved its capacity as a merchant. With un- 
 limited State credit behind it, it has bought raw 
 material to great advantage, and therefore — so runs 
 the argument — when Peace comes, let the State con- 
 tinue to buy for all industries ; to act as broker, in 
 short. This is the State Socialist's unconscious reply 
 to the Garton Memorandum, which specifically reserves 
 the purchasing of raw material and the marketing of 
 the finished products exclusively to the employers. 
 
 The general discussion, then, on Reconstruction 
 brings us to some agreement. It is agreed that Labour 
 must have a voice in workshop management. It is 
 agreed that this share in control must be vested in the 
 Trade Unions. Even trade policy is to be, in some 
 degree, the subject of discussion, in w^hich Labour 
 shall be heard, in the Joint Committees or the 
 Industrial Councils. Nor is that all : " This inter- 
 relation of functions," says the Memorandum, " con- 
 stitutes a real partnership between the persons con- 
 cerned in any business, whether as investors, managers, 
 or workmen, or in any two or all of these capacities." 
 It is unhappily evident that when the Memorandum 
 says " real partnership " it does not actually mean it ; 
 but at least the idea of a partnership of some sort 
 is mooted as feasible. Assuming the concession of 
 partnership, it comes to this : that such partnership 
 shall be excluded from its share in the raw material — 
 by the Employer, according to the gospel of Garton ; 
 by the State, according to the State Socialist. If, 
 
i = 
 
 i^M 
 
 130 
 
 THE PERMANENT HYPOTHESIS 
 
 then, workshop control is the compromise between 
 Capital and Labour, we have yet to decide whether we 
 have a preference for the private or the State control 
 of raw material. Is it a question of policy or of 
 principle ? 
 
 As things are, of policy only, I think. Rut the 
 State Socialist may force the basic principle. He 
 may, and probably will, contend that the State, in its 
 own interest, must buy not only for industries as they 
 are, but for the Guilds when they are formed. Now 
 the National Guildsman will without any reservation 
 declare that the Guilds must buy for themselves. On 
 that issue, he is prepared to light as a matter of prin- 
 ciple. But short of a Guild, with industry only quasi- 
 democratised, it is quite open to him to declare for 
 the continuation of the private purchase of ra\V 
 material in preference to State brokerage. In such 
 circumstances, it is purely a question of policy. 
 
 It is a difficult dilemma. The whole theory and 
 spirit of National Guilds runs counter to State inter- 
 vention in industry ; but equally it denounces private 
 control. When this subject was recently discussed at 
 a Guild meeting, a prominent Guildsman roundly 
 declared that the State is the enemy. His case is 
 that the Bureaucratic appetite grows by what it feeds 
 upon ; that every accretion of economic strength 
 makes the State, as such, less disposed to hand over 
 its functions when the Guilds demand it ; that when 
 the crisis comes, it will be easier to deal with tlie private 
 capitalist than with the Bureaucracy. But is it a 
 sound contention ? Does it not, in fact, exaggerate 
 the power of the State and underestimate the power 
 of the Employer ? Which enemy has the more 
 
 STATE AND EMPLOYER 
 
 131 
 
 powerful defences ? And have we considered a 
 possible combination against us of both our enemies ? 
 
 It will be granted, I think, that the Bureaucracy 
 and private Capital have more in common than 
 Labour has with either. Superficially, it would seem 
 as though in politics Capital and Labour have fought 
 against the State and the Junkers. But they did 
 not fight as friends. Throughout that struggle. 
 Labour was the cat's paw and not the friend of the 
 manufacturers. That battle has been won and lost. 
 Labour was the loser ; the manufacturers won and 
 promptly intermarried and generally coalesced with 
 both the Bureaucracy and the landed interests. For 
 my part, I think it enormously important that Labour 
 shall never again play the part of cat's paw for the 
 Employers. It is certainly prudent to assume that 
 there will be close and subtle co-operation between 
 Bureaucracy and Capital, until the Guilds are strong 
 enough to dictate their own terms. When that time 
 comes, if we have to snatch the control of raw material 
 from Capital, it can rely upon the covert support of 
 Bureaucracy ; if we have to take it from the State, 
 the covert support of Capital will not be so powerful, 
 because it will already have been weakened in its 
 economic power, to the extent of its loss of rent, 
 royalty, and profits on raw material. I think, there- 
 fore, without being dogmatic on the point, that the 
 Bureaucracy is the easier prey of the two. f] 
 
 This business of raw material is vastly important. 
 It plays to-day the part in industry formerly played 
 by land. Rent is, at bottom, the economic powder 
 exercised by one possessor over another — the other 
 generally being the labourer. With the control of raw 
 
132 THE PERMANENT HYPOTHESIS 
 
 material, a possessor can frustrate any industrial 
 policy or hold up an industry or a single undertaking 
 indefinitely. When the Garton Researchers reserve 
 raw material to the Emplo^^ers, they know very well 
 what they are doing. Suppose the Joint Committee 
 or the Industrial Coimcil adopt a line repugnant to the 
 Employers, the Employers can speedily exact sub- 
 mission by withholding raw material. If the Em- 
 ployers can do it, the State can do it. But the Em- 
 :X^c.JX^ ployers can do it quickly and vindictively; that is 
 -**''"^^*'*^ hardly possible to the State. There is another aspect 
 t*^"*"^ r^ of the question. The available raw material in Great 
 ^*^*^^ Britain — coal, mainly — is already " bespoke " • ^^^^ 
 
 
 m 
 
 the 
 
 State can hardly interfere without a complete sub- 
 version of the prevailing conception of property. 
 The bulk of our raw material — cotton, wool, timber, 
 wheat, 'hides, silk, rice, meat — comes from abroad. 
 It is therefore closely related to transport, not to 
 mention banking. How long would the State, the 
 purchaser of raw material, submit to private ship- 
 owners and private bankers ? One step leads to 
 another ; where would intervention stop ? Now 
 it is an important, though not a vital, part of the 
 case for National Guilds that the organised industries 
 can carry on their work much more efficiently than 
 can the State. I suggest that the community would 
 demand efficiency, and that if Guild organisation pro- 
 ceeded apace, the Guilds would, in the fullness of 
 time, inherit all that organisation which the State had 
 previously seized from the Employers. 
 
 Yet another consideration must weigh heavily in 
 the State balance. With the control of raw material 
 taken from the Employers and their industries demo- 
 
 1 
 
 A MORAL DANGER 
 
 133 
 
 cratised to the extent of works control, is it not certain 
 that we are hmiting the Employers' power to maintain 
 wagery ? Have we not taken a step towards the 
 destruction of the permanent hypothesis ? And 
 again, if we succeed in finally saddling each industry 
 with the maintenance of its own unemployed, dealing 
 a shrewd, if not a vital, blow at the competitive wage- 
 rate, we have travelled much more rapidly towards the 
 Guilds than if we had left the control of raw material 
 to the employers. The policy, then, for Guildsmen to 
 pursue is to concentrate now on works control, and 
 be ready to press for industrial as distinct from State 
 maintenance the moment unemployment threatens to 
 become acute. 
 
 "^e are now confronted with a family quarrel, for 
 Guildsmen are not agreed as to the logical outcome 
 of workshop control. One group contends that it 
 must stop there ; the other that it leads to representa- 
 tion on the Directorate. The first argues that Labour 
 must not, in any circumstances, concern itself with 
 profits, must not touch the accursed thing, which 
 it would do if its representatives became Directors. 
 It is morally repugnant to them. The second group 
 remains unconvinced. In the first place, so it con- 
 tends, you may put your men on a Directorate without 
 tauching, or being responsible for, profits ; that 
 directors have other functions, notably the power to 
 control management, and therefore Labour's power in 
 industry is pro tanto strengthened. But both groups 
 are agreed that all and any representation must come 
 from the Trade Unions ; they are not minded to 
 tolerate a second edition of the South Metropolitan 
 Gas Company — always a menace difficult to exorcise. 
 
I 
 
 It 
 
 134 THE PERMANENT HYPOTHESIS 
 
 In forming an opinion on this point, which is partly 
 ethical, it is well to bear in mind our immediate object, 
 which is to secure economic power for the workers. 
 Unless this economic power be obtained, we shall 
 never effect the transition ; we shall be compelled to 
 live in abstractions. Now every increase in Labour's 
 economic power means a relative decrease in Capital's 
 economic power. Further, it is not essentially immoral 
 for Labour to concern itself with the distribution of 
 surplus value. In fact, the more surplus value returns 
 to Labour the less remains for the exploiter. But 
 inasmuch as there are vital moral elements in the 
 crusade for the establishment of Guilds, notably the 
 passion for freedom (now only possible through the 
 economic medium) and the natural piety that sees 
 in labour a sacred thing and not a mere commodity, 
 it is of first importance that no section of Labour 
 shall ever find itself so circumstanced that it is to its 
 advantage to maintain wagery, because it has obtained 
 a remunerative share in the control of its own par- 
 ticular industry. I am not prepared to deny the 
 possibility of such a development ; but is it not rather 
 remote ? 
 
 In National Guilds (p. 240) there is an imaginary 
 conversation between a deputation from an incipient 
 Guild and the Directorate of a public company. The 
 deputation bluntly demands half the profits and asks 
 that the cheque be made payable to the Guild. The 
 General Manager then suggests a profit-sharing scheme 
 with the company's own employees. The deputation 
 rejects any private arrangement of that character. It 
 also rejects any increase in prices " because that would 
 only victimise our fellow- workers." For the life of 
 
 THE DIRECTORATE 
 
 135 
 
 me, I can see no objection in principle to this drastic 
 procedure. It is assumed in this case that the profits 
 are £100,000, and the incipient Guild demands 
 £50,000, which sum goes to the fighting fund. Is 
 organised Labour either morally or economically 
 weaker for the transaction ? In my opinion, stronger 
 in both senses. No doubt it is rather a crude way of 
 doing it ; no doubt a gradual integration of organised 
 power would enable the workers to absorb the £50,000 
 by raising their consumptive capacity beyond the 
 commodity wage-rate. Of the two processes, I prefer 
 the second. But if the first opportunity presents 
 itself, are we to reject it ? It seems to me it must only 
 be rejected, if the transfer of the profits places the 
 particular group of workers concerned in a privileged 
 position. As the money is specifically allocated to the 
 Union, I cannot see how any particular group becomes 
 wedded to profit-mongering. Alas! Precious few 
 opportunities for so easily annexing £50,000 will 
 present themselves ! 
 
 There is another reason in favour of representation 
 upon directorates. The Guilds— at least as outlined 
 in the book — postulate a hierarchy. There is no 
 reason why this hierarchy (even when democratically 
 elected) should be composed of middle-class administra- 
 tors. If the competent workers are to man the hier- 
 archy, they must be trained in administrative work. 
 Certainly a part of that training must be directorial 
 in character. 
 
 The industrial problem, even from the Guild point of 
 view, is not so simple that we shall not be constantly 
 confronted with difficulties and dilemmas. In the two 
 dilemmas here discussed, I provisionally favour : (a) 
 
136 
 
 THE PERMANENT HYPOTHESIS 
 
 a preference for State over private control of raw 
 material ; and (b) for representation on the Directorate 
 as the logical corollary to workshop control. But are 
 the two points not related ? Suppose that Labour had 
 considerable, if not adequate, representation on the 
 Directorate, would it not modify my preference for 
 State control of raw material ? There is this to be 
 noted : That in so far as such representation gives 
 effective power to Labour, such power would be exer- 
 cised to that extent over raw material, presuming it 
 to be still controlled by the Employers. As the object 
 we all have in view is to realise Guild organisation in 
 the shortest possible time, such joint control over raw 
 material might obviate any future struggle with the 
 Bureaucracy, with its possible prolongation of the 
 struggle. I am not dogmatic on either of the dilemmas 
 cited ; they both demand detailed analysis. 
 
 When State Socialists talk of the advantages of 
 State credit in the purchase of raw material, I think 
 they fail to realise that financially the Guilds could 
 swallow the State budget for breakfast and be hungry 
 at lunch-time. The actual turnover of the Textile 
 Guild alone would swamp the State expenditure. It 
 is important that our Collectivist critics should learn 
 that the Guilds are not little co-operative societies, but 
 the summation of the industrial activities of the nation. 
 It therefore follows that the State credit, upon which 
 such store is set, is precisely the measure of the Guilds' 
 credit. Nor need we fear any economic comparison 
 between State and Guild administration. In quality, 
 in efficiency, in productive capacity, in the spirit ruling 
 over these things, the future is to the Guilds and not 
 to the State. 
 
 STATE OR GUILD CREDIT 
 
 137 
 
 Finally, let us not forget that Guildsmen are not 
 Syndicalists ; that they believe in the State as a great 
 spiritual and intellectual force. " For the first time in 
 the history of mankind he will clearly understand that 
 nations, like men, do not live by bread alone. The 
 intermixture of spiritual with economic considerations 
 which now paralyses every State action will be, in 
 form certainly and largely in substance, ended. By 
 transferring the conduct of material affairs to the 
 Guild . . . statesmanship is left free to grapple with 
 its own problems, undisturbed and undeterred by 
 class considerations and unworthy economic pressure." 
 
 ( 
 
 
 ^OA^^A-L^^A/^ , 
 
If 
 
 It ''1 
 
 CHAPTER XI 
 THE PERMANENT HYPOTHESIS-VH 
 
 In War 
 
 It is a fact (which Guildsmen may advantageously 
 emphasise for the next ten years) that, for over two 
 years, the wage-system has been in abeyance in regard 
 to over five miUion men. These men have been on 
 *'pay," and the world resounds with stories of their 
 valour and endurance. Many of them have made 
 sacrifices of a monetary kind, but many of them have 
 been better fed and better clothed than ever before. 
 Their standard of living has been raised both morally 
 and materially. If victory perches on their banner, 
 they will come back with heads up ; indeed, they have 
 already done enough for honour, whatever may be the 
 issue of the war. We may well wonder if they will 
 contentedly lapse back into wagery. If they do, it 
 will be under subtle duress, and they will have learnt 
 how to make effective protest. If we, who understand 
 wagery, from its basis to its most diverse usages, 
 play our part, it is certain that it need not long sur- 
 vive the war. It is curious that the most convinced 
 supporters of the wage-system, Mr. Sidney Webb, for 
 
 example, have not once raised their voices or flourished 
 
 138 
 
 "\ , I 
 
 WAGERY IN ABEYANCE 
 
 139 
 
 their pens in a passionate and indignant demand to 
 put^our soldiers on wage-rates, piece-work for prefer- 
 ence. It is amazing that they should so meekly 
 acquiesce in the negation of the very basis of their pet 
 industrial system, which they nurse and strengthen 
 and reform with affectionate solicitude. 
 
 Yet these soldiers are doing the nation's work. Some 
 of them are working in our arsenals, side by side with 
 wage-earners, who pocket ten shillings for their one. 
 Some are doing transport work, ordinarily done by wage- 
 earners, others are mending boots, or shoeing horses, 
 or cooking food. Some are doing responsible office- 
 work — and every man on "pay." I beg Mr. Sidney 
 Webb to peruse a series of articles he wrote a few years 
 ago in the Herald, wherein he set out to prove that 
 wagery, like the poor, we must have always with us. 
 Why does he, this master of intrigue, this past-master 
 in the art of hiding the pea (and generally losing it), 
 permit a stupid and perverse Government to persist 
 in a system of pay which he has asserted to be purely 
 visionary and utterly impracticable ? A resolution by 
 the Fabian Society, sympathising with the soldiers in 
 their temporary exclusion from the solid comforts, 
 and happy contentment of wagery, might perhaps 
 bring the Government to its senses. 
 
 This state of suspended animation to w^hich wagery 
 has been consigned need not surprise us. As the 
 war proceeds, the closer do we come to the elements of 
 social existence. It is our contention that wagery is 
 repugnant to our nature — a permanent fact in contra- 
 distinction to the permanent hypothesis. War strips 
 life of its accretions, of which wagery is the deadliest, 
 because it disunites society when unity is imperative. 
 
h 
 
 140 THE PERMANENT HYPOTHESIS 
 
 But war discloses the essentials, the greatest of which 
 is human labour — labour at home, labour at the front, 
 labour with head and hand and heart. Above all, 
 labour inspired with sentiments of patriotism and 
 fellowship ; labour that dominates the processes of life 
 and reduces the permanent hypothesis to an absurdity ; 
 labour that does not vaunt itself and is not puffed up, 
 quietly and with remarkable efficiency, doing the day's 
 work while human peacocks strut on the stage, split- 
 ting our ears with their shrill cackle. The answer to 
 Germany, says the Prime Minister, is national labour, 
 the non-combatant nation at work. That the supreme 
 value of labour is fast being recognised, may be in- 
 ferred by the increased number of Laboiu" representa- 
 tives who have joined the Government. I quote, 
 ipsissima verba, from the Prime Minister : 
 
 " The third characteristic is a franker and fuller 
 recognition of the partnership (observe the word 
 'partnership' — it's creeping in!) of Labour in the 
 Government of this country. No Government that 
 has ever been formed to rule here has had such a 
 number of men who all their lives have been 
 associated with Labour and with the Labour organisa- 
 tion of this country. We reaHse that it is impossible 
 to conduct a war without getting the complete and 
 unqualified support of Labour, and we were anxious 
 to obtain their assistance and their counsel for the 
 purpose of the conduct of the war." 
 
 Economic power precedes and dominates political 
 action. There is no other explanation ; action was 
 not taken because of Mr. Henderson's beautiful eyes 
 or Mr. Hodge's dulcet accents. " My experience in 
 
 
 BUREAUCRACY INEFFICIENT 141 
 
 the Ministry of Munitions has taught me that there 
 should be a Department which was not altogether in the 
 position of employer to employed." Labour organisa- 
 tion, weakened though it had been by loss of its active 
 members and by dilution, had nevertheless become 
 by force of circumstances blackleg-proof— there was 
 more work than workers— and, in consequence, its 
 economic power automatically asserted itself. Labour 
 in war is strong ; why should it be weak in peace ? 
 " Without Labour," said Lord Curzon, " this war 
 could not be won. Without the organisation of Laboiu: 
 it could not be effectively pursued. Labour, therefore, 
 is entitled to a powerful voice in its direction." The 
 conquest of the German is impossible without Labour ; 
 is the conquest of Nature less difficult ? 
 
 The enforced spontaneity of these official admissions 
 of Labour's economic power (with its natural poHtical 
 sequel), welcome though they be, are hea\dly dis- 
 counted by the bureaucratic distrust of Labour's cap- 
 acity to walk without leading strings and the bureau- 
 cratic insistence upon the presumed necessity to 
 subject Labour to external discipline. " You are 
 necessary to the Government ; but you can't govern 
 yourself," says Officialdom, " so kindly send along 
 some safe and amenable men of your own choice to 
 help us to govern you." Thus, whilst the war has 
 brought some enlightenment to Bureaucracy as to the 
 power of Labour, it has brought none as to the essential 
 ineffectiveness of the Bureaucracy itself. It is not the 
 Bureaucrats who have made guns and shells and 
 " tanks," and all the endlessly varied paraphernaHa 
 of war. On the contrary, they have stood in the way 
 and obstructed the work with their foolish regulations 
 
II 
 
 142 THE PERMANENT HYPOTHESIS 
 
 and disciplinary methods that have defeated their 
 purpose. The same remark, too, appHes to their 
 relations with the employers, management, and salariat. 
 Always everything has had to pass through the fussy 
 Angers of semi-ignorant officials. It is the simple 
 truth that practical men, of every grade, in every 
 industry concerned, ha\T been in despair with the 
 ineffectual striplings and pompous elderlies sitting 
 in the various Ministries. 
 
 The next lesson, therefore, to be learnt is that a 
 sense of responsibility is inherent in economic power, 
 and that, if we are to obtain what we want, the Govern- 
 ment must frankly admit that it cannot produce its 
 own requirements and must, therefore, throw the 
 responsibility upon each separate industr^^ organised 
 if necessary ad hoc. What it does now is itself to 
 accept the responsibility, trusting to hectoring and 
 cajolery to secure deliveries from more capable men 
 whose efficiency is curtailed by depriving them of 
 responsibility. 
 
 In short, the true line of development, in war 
 and in peace, is industrial autonomy. Let us forget, 
 for the moment, both National Guilds and wagery 
 and look only to the industrial situation as it 
 exists to-day. With the exception of agriculture, 
 every industry concerned with production — coal- 
 mining, ship-building, engineering, textiles, boots, 
 saddlery and harness, food-stuffs, clothing — is reason- 
 ably well organised, not only into Employers' Associa- 
 tions and Trade Unions, but in every process from 
 the raw material to the finished product. Plenty of 
 room for improvement, no doubt : but no Bureau- 
 cracy living could effect any improvement, which 
 
 INDUSTRIAL AUTONOMY 
 
 143 
 
 must come from practical experience. The Manage- 
 ment knows precisely the demand for its output, 
 whether civil or military ; it knows how best to dis- 
 tribute the work, and how best to get it done. By 
 calling in the Trade Unions, terms can be arranged, 
 hours of work and payment and conditions generally 
 
 agreed. 
 
 I have criticised the Garton Memorandum from 
 the Guild standpoint, but I see no reason why we 
 might not adopt its scheme of Joint Committees 
 and Industrial Councils. To these Councils, I would 
 add some Government representatives. This being 
 done, the Government should meet each Industrial 
 Council, inform it of its requirements, arrange dates 
 of delivery. To Employers and Employed it should 
 say : " Gentlemen, you know what depends upon 
 your faithful execution of these contracts. We put 
 you upon your honour. If you have any difficulties 
 in the matter of raw materials or any disputes of any 
 kind which you cannot settle, call us in and we will 
 get what you want or act as amicus curicB in any 
 disputes. And now, carry on and good afternoon." 
 Had this been done at the beginning of the war, our 
 output of munitions would have been doubled. But 
 there was no statesman with the requisite vision. The 
 result was that the Employers were badgered and 
 irritated, whilst Labour was antagonised. 
 
 It is, of course, easy to be wise after the event. As 
 a fact, the principle of industrial autonomy has grown 
 out of the conception of National Guilds, and it was 
 only the Guildsmen who had the key to the position. 
 Nevertheless, it is not too late to move in this direc- 
 tion. The appointment of a Director-General of 
 
I 
 
 144 THE PERMANENT HYPOTHESIS 
 
 National Service affords the opportunity. This new 
 official, as I understand his function, must decide 
 what are the essential and non-essential trades, and 
 then gradually transfer the labour to the essential 
 trades. The entirely practical question arises whether 
 this is to be done by the usual blundering bureaucratic 
 methods, or whether the industries will be asked to 
 organise the new regime in their own way and under 
 their own super\dsion. If the former, I tremble to 
 think of the friction that must ensue. The latter is 
 no easy task, for we may assume that the owners of 
 the trades scheduled as " non-essential " will protest. 
 But the verdict once reached, joint committees of all 
 concerned, employers and employed, will rearrange 
 themselves more speedily and smoothly than by the 
 ukase of Mr. Neville Chamberlain. 
 
 Another aspect— perhaps it would be correct to term 
 it a principle— emerges. We may call it functional 
 free-play. We have seen that the permanent hypo- 
 thesis Hmits and curbs the free-play of Labour, \'alu- 
 ing it as a commodity when it should be elevated into 
 a function, a dominant element in wealth production. 
 The same restraint operates throughout our poHtical 
 and industrial life. Everywhere one looks, there is 
 wrong adaptation or stupid handicapping. Technical 
 men without family or financial backing play second 
 fiddle to men with a " pull " ; the State itself has no 
 defined function, perpetuaUy floundering between in- 
 dustrial problems and poUtical issues. Our whole 
 national life seems to be strugghng through the narrow 
 orifice of ParHamentary institutions, so that nothing is 
 done thoroughly. Function is subservient to clashing 
 interests. A Parliament man, anxious to frustrate 
 
 ^ 
 
 PREPARE FOR PEACE 
 
 145 
 
 Church legislation, will talk out an industrial measure 
 of first importance ; a Bill to estabhsh the manorial 
 rights of the latest landed plutocrat, and having 
 priority, may stand in the way of a Bill affecting the 
 industrial conditions of a million men ; Irish, Scottish, 
 or Welsh necessities may be indefinitely deferred by 
 some political finesse, prompted by motives remote 
 from the equities of the proposals. In short, the 
 mould of our national political and economic life, 
 shaped in earlier days when life was comparatively 
 simple, must be broken or we shall degenerate. 
 
 To a Guildsman it appears evident that we have 
 reached a stag^ when industrial autonomy and func- 
 tional freedom must assert themselves in theory and 
 practice. To a large extent, although not inevitably, 
 the functional free-play is a corollary of industrial 
 autonomy. The question naturally arises whether 
 these are not properly problems for peace. I reply 
 that we have discovered that our fighting strength 
 depends upon our economic stability, and that it is 
 our business to strengthen our economic foundation 
 during every day that war continues. And I reply, 
 further, that just as in peace we should prepare for 
 war, so in war we should prepare for peace. For it is 
 in the midst of a great struggle that we perceive most 
 clearly where our strength or our weakness lies. That 
 being an indubitable fact, we have exceptional advan- 
 tages to prepare the way for more efficient economic 
 life and poUtical processes in time of war. Psycholog- 
 ically, men are more ready to experiment, to make 
 concessions, to adopt new ideas. PoHtically, the old 
 shibboleths disappear and new shibboleths have 
 neither time nor opportunity to gain currency. Econ- 
 
 10 
 

 146 THE PERMANENT HYPOTHESIS 
 
 omically, we see, as we never saw before, the actual 
 anatomy and structure of industry and finance. 
 Whilst our men are otherwise occupied, either fighting 
 or providing the sinews of war, the cadres of industrial 
 organisation, unembarrassed by unemployed or casual 
 labour, may be modified in accordance with new 
 principles or to meet modern requirements. Is it 
 not moral cowardice to postpone the consideration of 
 these problems to the less convenient period when 
 our soldiers troop back in millions only to find that 
 those who stayed at home were intellectually too lazy 
 to organise their reception ? Is it not our plain and 
 urgent duty " to prepare the way of the Lord " ? 
 
 Truly may we say that in the midst of death we are 
 in life ; that in the stress and tumult of war our vision 
 of peace is clear and vivid. Never in times of peace 
 have we realised how false is the permanent hypo- 
 thesis ; nor did we see the true bearing and incidence 
 of unemployment ; nor did the urgent need for in- 
 dustrial autonomy assert itself so insistently ; nor 
 did we understand how vital is functional definition 
 and freedom. 
 
 These chapters will not have been written in vain 
 if I have successfully stressed certain theoretical and 
 practical truths. I have criticised the Tunes' 
 " Letters on Reconstruction," and the Garton Memo- 
 randum, primarily to pro\^e that they cannot be per- 
 manent because their permanent hypothesis is neither 
 permanent nor true. At the back of every industrial 
 proposal lurks wagery, cruel and wasteful, limiting, 
 restraining, and degrading human effort, entangling 
 men in bondage. The more I ponder it, the more 
 convinced I am that its intellectual rejection and 
 
 A SUMMARY 
 
 147 
 
 1 
 
 practical abolition is the one emancipating movement 
 that can demand of us that emotional and spiritual 
 energy without which no new era can be approached, 
 much less begun. 
 
 The immediate and practical issues already dealt 
 with are easily summarised. I have asserted that 
 acute unemployment after the war is inevitable. 
 The principle of industrial autonomy carries with 
 it the care and charge of the unemployed. Now, 
 while the war rages, is the time to organise each 
 industry so that every man who belongs to it shall of 
 right be a partner in it. And, being a partner, he 
 shall be entitled to permanent maintenance. No 
 longer, even if National Guilds be as yet unrealisable, 
 must we allow the profiteers to claim that they have 
 the first charge on the assets of any industry in times 
 of industrial depression. The Prime Minister talks of 
 political partnership with Labour. That is merely 
 filling the belly with the east wind. Industrial partner- 
 ship comes first. But we can only achieve this partner- 
 ship by securing an industrial autonomy which can 
 put both profiteer and politician in their proper 
 positions. 
 
 As these two factors sink into their appropriate 
 insignificance, and the great business of production 
 sets in to redress the balance of war- waste, function, 
 which is trained capacity applied to its true pur- 
 pose, must assert its dominance in our economy. 
 Thirty years ago, I thought that the State was the 
 legitimate heir of the great industry. I thought that 
 it would come into its own by virtue of its political 
 power. In my youthful enthusiasm I failed to see 
 that economic power, now as always, can mould the 
 
148 THE PERMANENT HYPOTHESIS 
 
 State to its own purposes. As the years passed, I saw 
 our hopes crystalHse into a vague Labourism that 
 finally withered at the touch of economic power strik- 
 ing through politics. The permanent hypothesis put 
 it to hypnotic sleep. Always the acceptance of the 
 commodity theory of labour, expressing itself in a 
 thousand subtle ways, was Labour's undoing. The 
 baleful influence of that permanent hypothesis reacts 
 upon science, literature, art, and religion. We must 
 reject it, that Reconstruction may usher in an era of 
 real partnership in fruitful production. 
 
 CHAPTER XII 
 
 A Lecture on National Guilds 
 
 i8th March 1915 
 
 A TRADITION has endured for several hundred years 
 that the mediaeval guilds fostered a passion for liberty 
 and resisted oppression. It is not now my purpose to 
 argue whether this tradition is founded on fact or 
 fiction. I content myself with the observation that a 
 tradition that has been handed down from generation 
 to generation has probably some solid foundation. 
 These guilds were associations of craftsmen and artisans, 
 masters and journeymen, to protect their craft and 
 trade interests. They gave to the townsman the same 
 personal independence that the English yeoman had 
 acquired by other means. Obserx^e that both masters 
 and journeymen were united in one common purpose. 
 It is very important to remember, in this connection, 
 that the masters of that period were of a different 
 status from the masters of to-day. The coming of 
 the "great industry," the concentration of mechanical 
 production, and the consequent congestion of popula- 
 tion completely changed the relations that formerly 
 obtained between masters and journeymen. They 
 ceased, in fact, to be masters and journeymen and 
 
 149 
 
150 A LECTURE ON NATIONAL GUILDS 
 
 became employers and employees. The employers 
 gradually ceased to be " masters," in the Guild sense of 
 the word, becoming exploiters ; that is to say, they 
 ceased to work at the bench with the journeymen and 
 apprentices, as did the " masters," but bought labour, 
 at a price, and sold the products of the labour they had 
 bought, at a profit. 
 
 In this way, the interests of the exploiters and 
 the workers gradually diverged, so that to-day they 
 are actually antagonistic. The old-time master has 
 developed a different status ; masters and work- 
 men are no longer of one class. The actual result 
 is that we are now in the throes of a desperate and 
 devastating class struggle. There is no longer economic 
 harmony. It follows — does it not ? — that if we are to 
 revive the Guild spirit and again organise Guilds, on lines 
 appropriate to existing industrial conditions, we must 
 exclude the exploiters if we are to secure a genuine 
 community of interest. 
 
 It is interesting to observ^e that the meaning of the 
 word " master " has changed with the changed condi- 
 tions. To-day the words master and employer are 
 synonymous. Thus, you will see in our daily and 
 weekly papers hundreds of advertisements offering for 
 sale ail kinds of businesses. If a butcher has saved 
 some money, or can get the necessary credit at the 
 bank, he may become the master or employer of a 
 drapery or grocery or any other business. The nexus 
 or bond between him and the employees is purely 
 monetary. He may know nothing about the business 
 he has purchased, depending upon the skill and honesty 
 of an overseer or foreman or manager to bring him in 
 a return upon the capital he has invested. This is not 
 
 " MASTER " AND " EMPLOYER 
 
 »» 
 
 151 
 
 an unusual incident ; it is very common. For example, 
 if I invest £1000 in some joint-stock business, I am 
 an employer to the extent of my thousand pounds. 
 I may know absolutely nothing about the business, even 
 less than the butcher knows about drapery, but I am 
 in the master class. 
 
 In the days of the guilds, the word " master " 
 carried a very different meaning. While, no doubt, 
 he was the medium of employment for the journey- 
 man and apprentice, to be a master in those days 
 meant "a master of the trade." It signified that he 
 had graduated through the various grades, finally 
 becoming so proficient that he could undertake 
 jobs on his own account, and teach apprentices the 
 " craft and mystery," of which he was really (not 
 financially or nominally) a master. To-day, we have 
 reached the monstrous and paradoxical condition that 
 the " masters " of the trades and crafts are the bond- 
 servants of the employers. Need I remind you that 
 an industrial system, so circumstanced, must be in 
 extremely unstable equilibrium ? 
 
 I do not want to inflict upon you an economic lecture. 
 Let me, then, try to tell you in simple language how 
 this remarkable change has been induced. I have seen 
 bills and invoices of mediaeval, and even much later, 
 dates, wherein the disbursements for labour were 
 separately accounted for. Nor was any profit added 
 to the wage payments. The master of those days 
 did not regard labour as one of the commodities he was 
 selling to the purchaser. He would buy some com- 
 modity, leather or iron or bricks or stone, and add to 
 their cost a profit based upon his personal service in the 
 transaction. Then he would charge for his own labour. 
 
152 A LECTURE ON NATIONAL GUILDS 
 
 at a higher rate than that paid to his journeyman, and 
 with that he was content. It never occurred to him 
 to class human labour in the same category as inani- 
 mate commodities. Probably, if he thought about it, 
 he would regard such action as impious, because he 
 sincerely believed that our bodies were temples of the 
 Holy Ghost, and to reduce the work of these temples 
 to the level of leather or bricks would have been to 
 invite the displeasure of Almighty God. 
 
 I suspect, too, that he would have thought it dis- 
 honest to charge more for the labour he had engaged 
 than the actual amount paid. But since the advent 
 of the great industry, labour and materials have all 
 been clumped together in the cost of the finished 
 product and a profit added to the sum total. In this 
 way, in the course of time, we have gradually been 
 taught to believe that labour is one of the various 
 commodities that an employer assembles to complete 
 some manufactured article. 
 
 Now it is of vital importance that you should grasp 
 the true significance of this modem conception of 
 labour. You may perhaps say that it does not matter 
 so long as you secure a purchasing capacity equal to 
 your needs. Believe me, you can make no greater 
 mistake. Either you put yourselves, your living 
 pulsating personalities, into your work, or your labour 
 is an impersonal quality independent of your individ- 
 ualities. This latter view is held by your employers. 
 They pay you so much money every week, called 
 wages, for this impersonal commodity, which they 
 call labour. They affirm that, having paid you the 
 price of your labour, you have no interest or concern 
 in the product of your labour. If, however, your own 
 
 NEW CONCEPTION OF LABOUR I53 
 
 personalities go into the product, then it is obvious that 
 the payment of wages is merely a trick to defraud you 
 of your property in the finished product. For how 
 can your personalities, your individualities, your un- 
 measured efforts, your very souls, be calculated in a 
 
 weekly wage ? 
 
 But we need not soar into ethics. Let us confine 
 ourselves to the simple fact that so long as you sell 
 your labour as a commodity— your right to your 
 labour passing with its sale— you can never obtain 
 a purchasing capacity equal to your needs. For this 
 reason : If your labour be regarded, and dealt with, 
 as a commodity, it will obey the law of supply and 
 demand, and the price, that is the wage, will fall to the 
 lowest competitive level. You cannot therefore secure 
 a purchasing capacity equal to your needs, because your 
 purchasing power will be reduced to your barest 
 necessities. Let me quote from an open letter ad- 
 dressed to the Trades Union Congress of 191 3 by The 
 New Age. You will find it on p. 289 of a book called 
 National Guilds : 
 
 *' A wage is not a salary ; it is not even pay ; nor is it 
 remuneration. Salaries and pay and remuneration are 
 for individual services rendered. Individuality, the 
 human element, enters into these rewards for services 
 rendered ; but wage is the market price of a commodity 
 called labour. It is an impersonal thing, not human, 
 not inhuman, rather non-human. This labour is found 
 inside your bodies and in your hands and arms and 
 legs and muscles, just as ore is found in the earth or 
 fruit on a tree. Being discovered inside you, the men 
 who want to exploit it, precisely as they would exploit 
 
 r 
 
154 A LECTURE ON NATIONAL GUILDS 
 
 any other commodity, buy it from you as they buy 
 ore from landlords or com from farmers. If it be 
 scarce, then the price of the labour commodity is high ; 
 if it be plentiful, its price is low. In Europe in general, 
 and Great Britain in particular, labour is plentiful, 
 and, accordingly, it can be bought at a price that 
 merely ensures its continuance — that is, at a price that 
 enables you to live and to reproduce yourselves, daily 
 by food and yearly by children. In its callous dis- 
 regard of the sanctities of life, modem capitalism is 
 only matched by the slave-owners of previous genera- 
 tions." 
 
 This system, based upon the conception of labour as 
 a commodity, is known as the wage-system, or wagery. 
 You sometimes hear the phrase ** abolition of the wage- 
 system." Fundamentally, it means the rejection of 
 the theory — or shall we call it a working hypothesis ? 
 — that labour is a commodity. Strong language is not 
 necessarily strong argument, but do I overstate the 
 truth when I declare that wagery is devilish and in- 
 human ? 
 
 You agree with me ? Good ! I should be surj">rised 
 if you did not. There were slaves who did not want 
 emancipation. They were slaves in spirit as in body. 
 If you are wage-slaves in spirit as in body, then I had 
 better go home quickly and consider how I can exploit 
 you. But I know that beneath your apparent ac- 
 quiescence in the wage-system lurks the spirit of 
 freedom and not of servitude. If to this spirit of free- 
 dom you will add a reasoned determination to end 
 wagery, once and for all, then we can proceed with the 
 argument. 
 
 CHANGE OF STATUS 
 
 155 
 
 I have remarked that the status of the old-time 
 master changed with the coming of the great industry. 
 He gradually ceased to be a master of his trade and 
 became a master of men. He no longer worked side 
 by side with the joumeymen, thinking their thoiaghts 
 and speaking their language. He gave up living " over 
 the shop " but removed to some respectable suburban 
 quarter, where his children took on different habits, 
 acquired a different speech, and intermarried with their 
 own newly created class. His workmen, who were 
 formerly his companions and his intellectual equals, 
 worshipping at the same shrine, gradually were segre- 
 gated into " working-class districts." In other words, 
 whilst the status of the master was raised, the status 
 of the workmen was both relatively and actually 
 lowered. The master, having now become an em- 
 ployer in the modem sense (being able to purchase 
 labour as a commodity), had no personal interest m 
 the wage-eamers as men and brothers. 
 
 It will hardly be denied, I think, that the creation 
 of a wage-slave class has a psychological and social 
 relation to these changes of status. If a man is 
 foolishly willing to sell his labour as a commodity, 
 he cannot be regarded— and rightly cannot— as in 
 the same class as a man who (things being as they 
 are) wisely insists upon exploiting somebody else. 
 Make no mistake about it : to be a wage-earner is not 
 honourable but dishonourable. The wage-earner, by 
 accepting wages, limits his opportunities for expansion 
 and subjects his family to every kind of oppression 
 and suppression— economic oppression, social and 
 spiritual suppression. We often hear some employer 
 say that he was never so happy as when he was a wage- 
 
156 A LECTURE ON NATIONAL GUILDS 
 
 earner. It is cant ; hq can always return to the class 
 from which he escaped. But he never does. He is 
 not such a fool. I suggest to you, then, that your 
 objective must be a change of staUis—B, change from 
 wagery to partnership in the products of your labour. 
 And this change is only possible when you are econom- 
 ically strong enough to decline to sell your labour as a 
 commodity. 
 
 Before we proceed to discuss how you can success- 
 fully resist the pressure put upon you to continue in a 
 state of wagery, let me point out that the final dis- 
 appearance of a wage-class would mark a gigantic 
 stride towards the realisation of a real democracy. The 
 poHticians constantly assure you that we are the most 
 democratic people in the world. The democracy they 
 envisage is the equality of the vote. " One man, one 
 vote," they cry. As though that w^as democracy! 
 Of course it is nothing of the kind. It is as spurious 
 and artificial as is the democracy of America or France. 
 The final test of a real democracy is to be found in 
 social and industrial life. But we know that the 
 candidate's wife who kisses your children at election 
 times would never dream of entertaining them or you 
 in her own home, even though her husband, Uke you, 
 has only one vote. We know that if one of your sons 
 wanted to marry one of her daughters, she would revolt 
 at the bare suggestion. Why ? Because, although she 
 wants your vote, she most assuredly (voicing her 
 husband's views) does not contemplate that social 
 equality which can only come out of your economic 
 equality with her. 
 
 But your poHtical leaders tell you that, since you 
 have the vote, you can achieve this equality. I 
 
 
 REAL DEMOCRACY 
 
 157 
 
 am sure you would if you could. The plain truth 
 is that you can't. Why? Because our political 
 life is in itself insubstantial; it is the reflection of 
 that which is substantial, namely, economic power. 
 History proves that every liberating movement has 
 been first based on the acquisition of economic power. 
 Those trade masters of whom I have spoken, first be- 
 came powerful in industry, and then broke through into 
 the poHtical preserves of the nobihty. It is worth 
 remembering that your class helped them. To seek 
 economic power through poUtics is to pursue a mirage. 
 Seek first industrial power, and political power will be 
 added unto you. This is what The New Age writers 
 mean when they so constantly assert that economic 
 power precedes and dominates poHtical action. They 
 cannot reiterate that primary truth too often. 
 
 Now, even if you were reasonably content as a wage- 
 class, I should nevertheless want to see your class 
 aboHshed, because I believe that a living and unsleep- 
 ing people is the hope of the world. Your masters 
 want you to be contented, sleek, and well-fed. They 
 do not exploit you and oppress you because they hate 
 you. Not in the very least. They wish you well. 
 Life for them, materially at least, is easy and well- 
 ordered. But whilst they are quite willing and, just 
 at present, anxious to yield to you many reforms, they 
 certainly do not contemplate with equanimity the 
 prospect of losing control over your labour power. 
 Anything but that ! It is, however, this control over 
 your labour that completely nuUifies your efforts to- 
 wards achieving a real democracy. Why do I want 
 a democracy ? I could easily write a long book in 
 giving all my reasons. I wiU now only give two. 
 
ll 
 
 158 A LECTURE ON NATIONAL GUILDS 
 
 First, because I want the experience of everybody 
 in some effective way articulated, so that our national 
 life may grow to its full stature. Secondly, because 
 the great working mass of our population is the reser- 
 voir of our national life. Out of it we draw our genius, 
 our thinkers, and our workers. Our present industrial 
 system poisons the reservoir and so imperils our 
 national safety and future. 
 
 It is curious that the political leaders, who enthusi- 
 astically favour and court democracy in politics, reject 
 the idea of democracy in industry. They tell us that 
 democracy in industr^^ spells anarchy ; that it is the 
 negation of discipline ; that we cannot afford the in- 
 evitable increase in the cost of wealth production that 
 would result from a democratic industry. They con- 
 veniently forget that the existing system is the most 
 wasteful that can be conceived ; that rent, interest, and 
 profits absorb a wickedly disproportionate amount of 
 the national dividend ; that commercial competition is 
 an economic extravaganza. What is more to the 
 point, they quite wrongly assume that discipline and 
 economy are repugnant to the democratic idea. 
 
 I do not resent these wTong conceptions, because they 
 are too silly to be seriously considered. As a matter of 
 fact, the dangers all lie in precisely opposite directions. 
 An industrial democracy may become too disciplined ; 
 it may become too thrifty and economical (witness the 
 Co-operative movement) ; it may even become con- 
 servative in its methods. But experience will rectify 
 any errors in these directions. Against these dangers 
 we may set the certainty that an industrial democracy 
 will not only insist upon good work but will know how 
 to get it. The best judge of good work and of good 
 
 \ \ 
 
 LABOUR MONOPOLY 
 
 159 
 
 foremanship is the workman himself. Give him half 
 a chance, he makes himself a competent artisan ; give 
 him a fair chance, he becomes a craftsman. Even to- 
 day (we are Uable to forget this) the work of the nation 
 is done by workmen and not by exploiters and capi- 
 talists. It is done in the factories and workshops and 
 not in offices and counting-houses. 
 
 I need not, however, argue the case from theoretical 
 democracy ; the wage-system is so cruel, so wasteful, 
 so exhaustmg, that, apart from theory, it must be 
 abolished. And now I come to the practical question : 
 How can we abolish it ? Please do not think me dog- 
 matic and narrow, if I tell you, with all possible 
 emphasis, that there is only one way under the sun. 
 And that is to acquire the monopoly of your own labour 
 power. How can you do that ? By organisation. I 
 do not think that I shall offend any Trade Unionists 
 who may be here (I trust you all belong to your proper 
 Unions) if I affirm that your present methods of 
 organisation are inadequate and almost futile. Why, 
 you can barely prevent your wages being reduced ! 
 You were not strong enough to stop the passage of 
 the Insurance Act. When free education was adopted, 
 you were not strong enough to prevent a correlative 
 decrease in your wages. During the past decade, 
 prices have advanced and profits grown to bloated 
 dimensions, whilst the purchasing power of your wages 
 has actually fallen. I do not doubt that your fatal 
 and premature plunge into politics has cost you dearly. 
 Your grip upon industry has weakened, and for every 
 Labour member you have elected you have lost a 
 million sterling annually. 
 
 Without labouring any of these points, it suffices 
 
 1 
 
 

 i6o A LECTURE ON NATIONAL GUILDS 
 
 to say that you are not yet so strongly organised 
 that you can secure a monopoly of your labour 
 power. You are often told that your employers, 
 adopting the principle of the Roman Emperors, 
 divide you and so conquer you. I wish that were 
 true. The true truth is that you divide yourselves 
 and so remain subject to the wage-system. The 
 employers could not divide you if you were really 
 determined to be unified. But the Trade Unions are 
 exclusive when they ought to be inclusive ; they are 
 sectional when they ought to be comprehensive. You 
 have, in times by no means remote, had little quarrels 
 about the delimitation of work. That was not due 
 to the intrigues of the employers ; on the contrary, 
 they thought your strikes on these questions a down- 
 right nuisance and regarded you as fools. They 
 repeatedly said so. And, saving your presence, they 
 told the truth. 
 
 The time, then, has come for the Trade Unions to 
 reorganise with the view of embracing every worker in 
 their several trades. Every clause in their constitution 
 that excludes, that limits, must be swept away, as you 
 would clear out rotten timber from an old house. 
 When the old-time masters drew away from you and 
 founded a new class in British Society, the gap between 
 you and them was filled by a nondescript class whom 
 we now described as "lower-middle class." This 
 particular section of our population is a misery to 
 itself and a nuisance to everybody else. It is too poor 
 to associate with the employing class and too imitative 
 of the employers to associate with you. It is like a 
 half-breed class in a community of whites and blacks. 
 So far as you are concerned it is worse than a nuisance ; 
 
 INDUSTRIAL UNIONS 
 
 i6i 
 
 it is a menace. It is composed of clerks and petty 
 tradesmen. It largely supplies the teachers in our 
 national schools. It fetches and carries for capitalism. 
 Until you open wide your doors and compel it to come 
 in, you cannot reckon upon its support and you are 
 thus effectually prevented from securing your labour 
 monopoly. 
 
 To secure that monopoly you must have one strong 
 Union or Federation for each of our industries. And 
 instead of numbering two and a half million members, 
 you must control an army of fifteen millions. Mr. and 
 Mrs. Webb and their Fabian coterie assert that this 
 is Utopian. It is perfectly feasible. The labour you 
 have put into the organisation of your existing Unions 
 in the past is far greater, having regard to former diffi- 
 culties and disabilities, than is required for your new 
 task. I beg you to begin. 
 
 And now suppose that, by waving our wand, this 
 task could be accomplished to-morrow morning. 
 What then would be the situation ? You would 
 certainly have secured a monopoly of your own labour 
 power. The next question is how to apply it. You 
 have two objects in view. First, by declining to sell 
 your labour as a commodity you enter into partner- 
 ship, either with the present possessing classes or with 
 the State. Your second object is more difficult. 
 Remember that in the nature of the case you become 
 the predominant partner, for not only does your labour 
 monopoly give you power in workshop and factory, 
 but political power automatically follows. Your 
 second objective, therefore, will be to run the industrial 
 machine. The responsibility undoubtedly devolves 
 upon you. 
 
 II 
 
 iiggmgi^ 
 
 Hiiiiiliiirinyiiiiiitfii 
 
 11 ilinitiii. iiiiiMiiiiiiiiiiiiiliriitf 
 
i62 A LECTURE ON NATIONAL GUILDS 
 
 How will you set about it ? I suggest that know- 
 ledge is stili power ; that you will wisely call to 
 your aid all the scientific and technical knowledge 
 that is now stored up in the minds, books, and 
 associations of the scientists and technicians. You 
 will want them, and you must make it easy for them 
 to live with you. The problem of the technical admin- 
 istration of industry is not so simple as of the lower- 
 middle class. I have often heard labour advocates 
 declare that they could do quite well without our 
 administrative and technical men. No doubt you 
 could— in time. But why waste time ? And I 
 suggest that, whilst your own technical skill was 
 being developed, you might make an unholy mess of 
 things. No, no ; for Heaven's sake, don't grow cock- 
 sure because you have your labour monopoly. That 
 way madness lies. And that brings me to my defini- 
 tion of National Guilds. A National Guild— again I 
 quote from the book I mentioned—" is the combination 
 of all the labour of every kind, administrative, executive, 
 productive, in any particular industry. It includes 
 those who work with their brains and those who con- 
 tribute labour power. Administrators, chemists, skilled 
 and unskilled labour, clerks— everybody who can 
 work— are all entitled to membership. This combina- 
 tion clearly means a true labour monopoly." 
 
 I have once or twice mentioned the word *' partner- 
 ship." I meant it. There is no alternative between 
 wagery and partnership. Either you sell your labour 
 power for a mess of pottage, called wages, or you 
 insist upon your fair share in the control as well as 
 the product of your labour. The first is wagery ; the 
 second is partnership. But partnership with whom ? 
 
 STATE PARTNERSHIP 
 
 163 
 
 A partnership with the present possessors is con- 
 ceivable — barely conceivable. You might agree to 
 pay them so much annually for a term of years, partly 
 for the actual assets you take over, and partly in con- 
 sideration of their experience. But you would very 
 soon be at hopeless odds with them. The wage- 
 system would be gone, and it would be difficult to 
 provide a fund for the purpose. You see — do you 
 not ? — that it is only by the payment of wages that a 
 dividend or profit is procurable. But there is a much 
 more serious obstacle to that particular form of partner- 
 ship. It would mean the extinction of State power for 
 all practical purposes. The State would certainly 
 not permit that. Neither would I if I had the power 
 to prevent it. 
 
 Anyhow, ultimately your partnership will be with 
 the State. On what terms ? Naturally you don't 
 want the bureaucrat poking his nose into your 
 business. The suggestion is that the State should be 
 the trustee in the matter, nominally owning all the 
 land, machinery, and other assets, and then chartering 
 these assets under guarantees to their suitable Guilds. 
 And in exchange for its charter, the Guild must pay to 
 the State its proper share of State expenditure. In 
 this way we reach a true counterpoise between the 
 State and Industry. I hope that you will agree with 
 me that, as these National Guilds are of vital concern 
 to the community, the community, through the State, 
 must be represented adequately upon the executives 
 of the Guilds. But I do not want to go into details. 
 They are a matter for practical discussion. I want 
 only to gain your acceptance of the principles that 
 underlie our proposals. 
 
 I - 
 
CHAPTER XIII 
 
 Some Affairs of the Spirit 
 
 An Address to the National Guilds League. Annual 
 Conference, Sth April 1917 
 
 We have very properly, at this our annual conference, 
 concerned ourselves with the practical matters that 
 affect our organisation and the purpose which called 
 our League into life. It is desirable, as it is inevitable, 
 that we should, from time to time, consider our domestic 
 arrangements, adapting our action to our means and 
 necessities, and seeking a vohmtary discipline com- 
 patible with our principles. Nor have we forgotten 
 that larger organisation of Society which it is our 
 main purpose to achieve. I apprehend, however, 
 that none of us is content to contemplate a merely 
 mechanical reconstruction. Doubtless there is some- 
 thing attractive in Greek symmetry of form, pleasing 
 to the eye even if it does not appeal to the spirit. But 
 when we have constructed our building, with due regard 
 to outline and aspect, there remains the problem of 
 the internal arrangements— the furniture, the pictures, 
 the colour scheme. We would surely not be at the 
 trouble to erect a noble edifice unless we intended to 
 
 discard the stuffy Victorian furniture, substituting for 
 
 164 
 
 A GREAT ADVENTURE 
 
 165 
 
 it richer appointments, obedient to the demand of a new 
 spirit. It may be well, therefore, if we turn aside for 
 a short time from our immediate practical problems 
 and examine whether, in fact, a new spirit governs our 
 activities and informs our motives. 
 
 Whether we are destined to fail or to succeed, it is 
 certain that we have set out on no mean adventure. 
 To transform Society by abolishing wage servitude— 
 a change logically involving the disappearance of the 
 existing master-class— is profoundly to change civiUsa- 
 tion, if not to create a new civiUsation altogether. But 
 such a deep-rooted change can only be possible by the 
 extirpation, finally and for ever, of the capitalist spirit 
 and tradition. And that, please observe, depends 
 not on an outward change in the structure of Society 
 but on a change of heart. We must not only reject the 
 commodity valuation of labour, the foundation of the 
 wage-system ; we must break away from that Capitalist 
 ideology around which modern civihsation has crystal- 
 lised. " It is evident that unless the fusion of servi- 
 tude and class-dictatorship into a common citizenship 
 changes our manners, there is no appreciable con- 
 version of civilisation, no spiritual advance. A change 
 in our manner of thought and action, a change in our 
 manner of life, must come out of the economic change 
 to which we are pledged, and for which this National 
 Guilds League has been constituted. But this spiritual 
 change must be reasoned and conscious, and therefore 
 we must understand the traditional morahty by which 
 Capitalism justifies itself. 
 
 A distinguished member of our League— Mr. W. 
 Anderson, of Glasgow University — has recently 
 analysed, with characteristic thoroughness, the pre- 
 
i66 SOME AFFAIRS OF THE SPIRIT 
 
 vailing Capitalist ideology. " We are not done with a 
 class," he says, " when we have recognised its place 
 in the economic system. We have certainly not 
 thereby put ourselves in a position to estimate its 
 relation to possible social changes." Mr. Anderson 
 looks to the social variations in status of institutions 
 and customs that express the predominance of the 
 economic interests to discover the ideology of the 
 period. Inasmuch, however, as there has never been, 
 and can never be, a proletarian economic predominance, 
 it is not possible to evolve a proletarian ideology! 
 Whatever ideals move the wage-earners, as such, must 
 have been acquired from the Capitalist environment. 
 This, in fact, is the Marxian position ; the nature of a 
 class is gauged by the civihsation which it dominates. 
 There can therefore be no class ideolog>^ peculiarly 
 proletarian, for the proletariat is not really a class but 
 a mass of individuals who are not owners of capital, 
 who, according to our current moral conceptions, are 
 failures. It follows that it is extremely difficult, if not 
 impossible, to estimate the character of a civilisation 
 based on the economic emancipation of the wage- 
 earners, for history yields no clue, whilst in rcspectto 
 the other classes " whole epochs are at our disposal." 
 At the best, we can only glimpse certain tendencies, 
 a nascent revolt against capitalist morality in certain 
 limited directions. If we look at the actions and pro- 
 fessions of Labour's political leaders, for example, we 
 cannot but be struck with their pious devotion to 
 middle-class morality. A simple instance, pertinent to 
 our own propaganda, is that any and e\ery attempt 
 to raise wages is merely an imitation of a Capitalist 
 rise in prices ; it is an acceptance of Capitalist morality. 
 
 CAPITALIST IDEOLOGY 
 
 167 
 
 A movement, however, to change the nature of the 
 wage relation would in some degree involve a change 
 in CapitaHst ideology. It would therefore seem that, 
 at the present stage, the proletariat is negative in the 
 ethical sphere just as it is passive in the economic 
 sphere. Mr. Anderson says that proletarian ideology 
 has yet to be " created." It may be so ; but only to 
 disappear in a larger moral conception due to the 
 merging of the proletarian class into the community as 
 
 a whole. 
 
 In our search, then, for another code of manners 
 built upon new spiritual perceptions, we must look to 
 a reaction from the present Capitalist ideology rather 
 than to the indefinite tendencies and inarticulate 
 revolts of the proletariat. It is precisely at this point 
 that we incur our debt to Mr. Anderson, who has 
 exposed the true meaning of the CapitaHst ideology. 
 He finds that " the great exemplar of the consumer 
 and true representative of all consumers is the Capitalist 
 himself." At first blush this seems surprising, but on 
 reflection I think we must agree that Mr. Anderson is 
 right. The true note of Capitalism is not what it 
 produces but what it consumes. It carries the pro- 
 ductive processes away captive that they may minister 
 to the appetites— and the grosser appetites at that. 
 " The consumer," he tell us, " is typically the man who 
 expects that his wants will be satisfied, and thinks 
 that they ought unconditionally to be satisfied, 
 because they are his wants. If they are not satisfied, 
 he considers he is either being robbed by man or ill- 
 used by God." But you cannot be a consumer (over 
 and above the minimum requirements necessary to 
 continue living) unless you can control production 
 
 t 
 
168 
 
 SOME AFFAIRS OF THE SPIRIT 
 
 either as a Capitalist in possession or unless you have 
 a certain purchasing capacity which you derive as 
 a Capitalist, or by performing certain services to the 
 Capitalist as a member of the salariat. Incidentally, 
 at this point, it is worth noting that, on this hypothesis, 
 we can only detach the salariat to the extent that we 
 transfer its interest in consumption to its more vital 
 interest in production. I have not the time now to 
 pursue the argument ; but if Mr. Anderson be right, 
 as I think he is, the real industrial struggle is not so 
 much between Labour and Capital as between Pro- 
 duction and Consumption, the Capitalist being the 
 consumer's protagonist. Let us briefly consider the 
 moral implications. 
 
 Having long since discarded the rehgious theory that 
 our only object in this life is to prepare for the next, 
 and that to accumulate riches, to live softly, is a 
 positive hindrance in our pilgrimage to Heaven, 
 Western Europe in general, and Great Britain in 
 particular, being convinced that " election " is by 
 grace and not by ballot, that the means of grace are by 
 faith and not by good works, it occurred to our pious 
 ancestors that it would be for the benefit of mankind 
 to exploit the world. They reasoned that if they could 
 acquire wealth by courage, abstinence, patience, 
 pertinacity, honesty, industry, these and kindred 
 virtues, plus the tangible result, would at least be a 
 sign of grace, even though a just God, moved by 
 celestial considerations, might withhold " election " 
 and consign to Hell. The Calvinist theology, in 
 fact, seems to be the fountain-head of that bourgeois 
 morahty by which Capitahsm justifies itself. To 
 succeed in this, it was obviously necessary to procure 
 
 THE ESSENTIAL VIRTUES 
 
 169 
 
 labour, it mattered not in what form — slavery or 
 wage-serfdom — the moral object being more pleasing 
 in the sight of God than any possible injustice or 
 hardship inflicted upon the labourer, who, after all, 
 would not be a labourer did he but possess the Capitalist 
 virtues. In the fullness of time we see the Capitalist, 
 as his riches accumulate, concerning himself more with 
 the acquisition of power, more with his spending 
 capacity, gradually divorced from those very virtues 
 he claimed as a sign of grace, and finally sinking into 
 a parasitic condition, whilst retaining, by means of 
 wagery, control over production. For we must not 
 forget that the essential virtues are evolved, not in the 
 exploitation of man by man, but of nature by man. 
 The main business of Capitahsm to-day is to instil 
 these virtues into the proletariat and then to exploit 
 them in its own interest. But the virtues by which 
 it sets such store are now inherent in Labour as the 
 productive factor in Society. 
 
 The moral question that confronts us in this con- 
 nection, I think, is this : Are we in revolt against the 
 virtues necessary to the struggle wdth Nature, or is it 
 against the bourgeois morality that subdues these 
 \drtues to its own ends ? 
 
 The answer to the second alternative is clear : 
 by abolishing wagery we ham-string the bourgeois 
 morality, and that settles it. But the first alternative 
 is not so easily disposed of. Every rebel looks wdth 
 suspicion not only on the Capitalist result, but with 
 equal suspicion upon the virtues, qualities, aptitudes 
 — call them w^hat you will — which brought about that 
 result. Thus, Mr. Anderson quotes Laf argue to the 
 effect that the claim to the right to work is middle 
 
170 
 
 SOME AFFAIRS OF THE SPIRIT 
 
 class and that the proletarian must insist upon the 
 right to be idle. I regret that I do not know the 
 degree of idleness that would satisfy Laf argue 's 
 theory, although I doubt if he himself ever spent an 
 idle moment. We all know the story of the Weary 
 Willie whose mate extolled the idle life of the Tropics. 
 ** You lie under a coco-nut tree, and when hungry or 
 thirsty you just put out your hand and grab a coco- 
 nut," he was told. " I thought there was a catch 
 in it somewhere," replied Willie; "you have to put 
 out your hand. See?" But Lafargue's contrast 
 cuts deep into more than one problem. Assuming, 
 as we must, that Capitalism expresses itself in con- 
 sumption, and as Labour in its turn expresses itself 
 in production, we may expect that once Labour is 
 quit of wagery it will produce commodities, not under 
 the duress of the consuming Capitalist, but on its 
 own terms, and in accordance with its own conception 
 of wealth and its own creative instincts. Thus we 
 touch a new moral issue for the future Guilds. ** Shall 
 we make this thing ? " they will ask. " Then how 
 does it affect our lives, not only economically but 
 morally ? " In this way we reach the problem posed 
 by Ruskin as to what is wealth and what illth. I 
 must resist the temptation to pursue this line of 
 thought, enticing though it be. I will merely remark 
 that I believe the British artisan to be the finest 
 craftsman in the world, if he acquires the liberty 
 to obey his instincts. He will make good things 
 supremely well ; evil things he will reject. Here we 
 discover, I think, a future sharp divergence of Guild 
 from Capitalist ideology. Not art for the rich or for 
 the poor, nor art for art's sake : but the spirit of the 
 
 ECONOMY OF HIGH WAGES 
 
 171 
 
 true and the beautiful entering into our industrial 
 life ; production no longer a grinding burden but a 
 pleasure, limited only by Nature and our necessities. 
 
 There is an important inference to be drawn from 
 the hypothesis that consumption is essentially Capitalist 
 in its nature. We use the word loosely, and that robs 
 it of any precise definition. Thus it is necessary to 
 consume that we may produce. In constructing an 
 engine, for example, all the assembled parts have 
 first to be produced before they are consumed in the 
 engine. It is within our recollection that the free 
 traders and tariff reformers wrangled over this point 
 and never reached an agreement. But labour, re- 
 garded as a commodity, also enters into the construc- 
 tion of the engine in the same sense as the other 
 commodities. It follows, therefore, that as the 
 engineers must ensure a constant supply of engine 
 parts, so too they must maintain a constant supply 
 of labour. This they accomplish by paying wages 
 for the sustenance adequate to the particular quality 
 of labour they require. And just as they pay a high 
 price for special qualities of material, so too they pay 
 a higher wage to obtain the best quality of the labour 
 commodity. This, of course, is the kernel of the 
 economy of high wages. It is historically true that 
 these high wages have largely been secured by trade- 
 union organisation, so much so, indeed, that we are 
 not wide of the mark in regarding organised labour as 
 skilled labour. Nevertheless, Capitalism, recognising 
 its economic advantage, has long since accepted the 
 principle. But in seeking a definition of Capitalist 
 consumption, we properly rule out all the consumptive 
 processes prior and necessary to the completion of 
 
m 
 
 172 
 
 SOME AFFAIRS OF THE SPIRIT 
 
 the finished product, whether it be an engine, a 
 mansion, a pair of boots, or pate de foic gras. There- 
 fore, and this is the inference, the maintenance of 
 labour by wages is a productive and not a consumptive 
 process. Our critics, I think, overstress the danger 
 to the consumer arising out of the Guild control of 
 production. But if wage expenditure, in all its 
 gradations, be really a charge on production, it follows 
 that we get a new conception of consumption as being 
 a claim upon or a control of all the finished products 
 that are consumed, not by labour (conditionally upon 
 its continuing to produce) but by Capital as the 
 effective assertion of its economic power. It becomes, 
 in short, a wide interpretation of what the lawyers 
 call " amenity." When we reach that stage in the 
 argument, w^e are brought up with a salutary jerk by 
 those ethical considerations to which I have alluded. 
 For amenity is obviously a way of living, a varying 
 conventional standard of conduct, and therefore 
 subject to moral judgment. Capital to-day demands 
 of Labour that it shall contribute to the amenities 
 of the possessing classes ; Guild principles demand 
 quite different canons of conduct, quite other con- 
 ceptions of amenity. 
 
 Lafargue's dictum, however, calls for some criticism. 
 We not only accept, but welcome and insist upon the 
 right to leisure ; the right to develop all those faculties 
 not called into play in our industrial occupations, 
 the right to social intercourse. An unleisured, over- 
 worked democracy is a contradiction in terms. We 
 do not seek economic emancipation that we may work 
 harder, but that we may w^ork better. And that is only 
 possible to a democracy capable of a dignified and 
 
 FUNCTION A VITAL FACTOR 
 
 173 
 
 fruitful leisure. But by what canon of conduct shall 
 we secure our right to leisure, to be idle, if so minded ? 
 A resort to discipline does not solve the problem : 
 for the exercise of discipline evokes as many difhculties 
 as it solves. Some new principle must operate ; a 
 new relationship must be established between the 
 individual and the community, between the individual 
 and the Guild. There is nothing socially cohesive in 
 discipline ; unless watched with vigilance, it is the 
 negation of liberty. The principle we seek must be, 
 not the negation, but the complement of liberty. I 
 think we shall find it in a new conception of function. 
 I apologise for adding another word to our Guild 
 terminology, but in reahty it is not new. Sixty years 
 ago, Ruskin reahsed that function is the primary 
 element in our social and economic life. He applied 
 it, in a famous passage, to the five great intellectual 
 professions. After defining the functions of these 
 professions, he added : " And the duty of all these 
 men is, on due occasion, to die for it." A httle remote, 
 perhaps, from our immediate question, but neverthe- 
 less function and the duty attached to it clearly set 
 out without any reservation whatever : faithfulness to 
 function even unto death. 
 
 Senor de Maeztu puts function in a modern and 
 more philosophic setting. Our claim upon the com- 
 munity is not that we are human beings, alive and kick- 
 ing ; that is a personal, a subjective, right which he 
 rejects. It is only as we are true to our function 
 of creating values that we are really citizens. I quote 
 
 a short paragraph : 
 
 " In this need to limit the subjective rights of men 
 and of human associations, the functional principle 
 
I 
 
 174 SOME AFFAIRS OF THE SPIRIT 
 
 will find its main practical support. It is the very 
 logic of things, as much as the logic of its theory, which 
 will make it triumph. Humanity cannot acknowledge 
 in perpetuity and unconditionally either the rights of 
 Rockefeller to his millions, or those of the Brazilian 
 Government to absolute sovereignty over the immense 
 unexploited wealth of the Amazon Valley, or those of 
 the Kaiser to set the world on fire. In order that the 
 vast mass of men may enjoy security and sufiiciency 
 in a limited world, all subjective rights must be made 
 subordinate to a right of a superior origin." 
 
 Thus, if Sefior de Maeztu be right. Weary Willie has 
 no claim upon the community merely bcause his mother 
 bore him ; he must buck up and do something. And 
 it also follows that our right to leisure is strictly deter- 
 mined by our loyalty to our companions in creating 
 social values. Senor de Maeztu regards as the supreme 
 values, moral satisfaction, scientific discovery, and 
 artistic creation, Man and his associations and insti- 
 tutions rank next, whilst the creation of economic 
 values, power, wealth, pleasure, are placed on a yet 
 lower grade. I will not argue such a large theory here, 
 nor must I be taken as accepting it without reserva- 
 tion, but it is obvious that the moral issues raised vitally 
 relate to the moral problems of a free and untram- 
 melled production. They would seem, indeed, to 
 complement each other. 
 
 I have endeavoured very briefly to suggest that we 
 have developed a body of doctrine already so definite 
 as to justify a confident forecast that Guild morality 
 must be fundamentally different and distinct from 
 that CapitaUst ideology which Mr. Anderson has ruth- 
 
 LOCAL LIFE AND GENIUS 
 
 175 
 
 lessly analysed and exposed. But we must remember 
 that intellectual Hfe not only enters into our moral 
 conceptions, but is otherwise so infinitely precious that 
 we must be very sure that Guild organisation does not 
 restrict its freedom. Indeed, that is a negative way of 
 stating it. Say rather, we must be very sure that Guild 
 life stimulates and enriches our intellectual activities. 
 
 One aspect of Guild organisation excites some fore- 
 boding. The centrahsation of the direction of industry 
 implied in the Guild Congress must not, even indirectly, 
 involve the enslavement of learning, or any kind of 
 economic pressure, however unconscious, upon the 
 intellectual life. It is becoming a dangerous common- 
 place that industry knows no frontiers. CapitaHsm 
 knows none, but it by no means follows that our sense 
 of locaUty, our local pride, should be killed to obhge 
 the profiteers. W^e cannot permit economic centrahsa- 
 tion to rob us of the intellectual values arising from 
 an informed and alert local hfe. Not only may 
 literature suffer in this, but art too in all its phases- 
 painting, music, craftsmanship. History as a teacher 
 is as misleading as it is subtle ; but one lesson can be 
 drawn from it wdth complete assurance that where 
 mihtary or rehgious or economic power has become 
 centrahsed, intellectual hfe is endangered. Greek 
 civilisation never made that mistake, with the result 
 that we are thrilled with the story of its several intel- 
 lectual centres — Athens, Corinth, Constantinople, 
 Alexandria, Carthage. The Roman rulers, impatient 
 of diversities in philosophy and religion, sought to 
 impose a mechanical unity, beginning with the Council 
 of Nicea, wading through the blood of the martyrs, 
 and finally ending its first phase in the alhance of 
 
176 SOME AFFAIRS OF THE SPIRIT 
 
 , 1^ 
 
 I 
 
 I 
 
 Charlemagne with the Pope. The ensuing centraHsa- 
 tion destroyed every vestige of intellectual life and 
 liberty, science being submerged in superstition. When 
 Charlemagne died in 814, every kind of human activity 
 was centralised in his Court, every idea, every opinion 
 of which he disapproved, was remorselessly destroyed. 
 The century succeeding his death is the darkest in the 
 annals of Europe, intellectual life, such as it was, being 
 only preserved in the free communities under Arabian 
 sway, notably the University of Cordova. Even in 
 our own times there are men living who can remember 
 when Dublin and Edinburgh maintained their own 
 unique intellectual independence, now fatally poisoned 
 by a combination of Capitalism with an uninformed, 
 shallow and irresponsible Press. 
 
 Yet it is certain that, once released from the cursed 
 grind of a merciless wagery, men in every centre of the 
 country will turn to the intellectual and artistic, as 
 tired travellers who have happily reached the wells. 
 Let us see to it that it be the constant care of the 
 Guilds to develop local life, applying the advantages 
 (if advantages they be) of economic centralisation to 
 sinking spiritual wells, from which may spring those 
 local patriotisms that guard effectually our intellectual 
 liberties and substantially add to the content of the 
 arts and sciences. 
 
 I end as I began. Ours is a great adventure, a 
 crusade fortified with enduring principles, vitally 
 necessary to our national health, and assuredly well 
 worth our devotion and sacrifice. Let us be humble in 
 the knowledge of our blindness to so much that our 
 message holds, but very proud of our privilege to pioneer 
 the w^ay. 
 

 .-.Willi riwi' K'f 
 
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