ON THE WRONG TRACK.
[To TER EDITOR OT THE "SPECTATOR.") Si,—In the letter under the above title which I addressed to you on July 28th I had two objects. The immediate one was to say that neither Free-trade nor Protection could by itself assure constant and universal employment, and to hint that those—in either party—who held out any such assurance were raising hopes which could not be realised. The other, and much more important, object was to suggest that, as regards employment, a new problem, touching the most vital interests of the community, had been gradually evolving itself, and was now becoming acute. To put it in a word, the partial unem- ployment of great numbers—a phenomenon so striking as to have induced the coining of a new word—an unemployment which contracts in good years, but never disappears even in the best, is a concomitant, if not a consequence, of high
industrial organisation.
I make no scruple of saying that this connexion of unemploy- ment with the perfecting of our industrial system presents the greatest problem of modern economic life, raising, indeed, a very grave doubt whether, even at this late stage, we may not have to retrace some of the steps of our industrial progress. I had hoped, Alen, that my colleagues would have accepted your kindness and submitted my thesis to a searching criticism. In default of this, I feel bound, not to offer a solution, but to restate the problem as it appears to me, in the conviction that any attempt at solution must wait on clear recognition and acceptance of the phenomena which compose it.
What is industry ? It is the human analogue of the process by which the other animals get their food, warmth, and shelter,—with this curious difference. The animals find their" living "and their " life " together in the one series of acts, and spend, as a rule, their waking hours year after year in nothing else but supplying the one limited set of wants with which they were born. Man, on the other hand, is a complex of wants that increase in number and grow in intensity both in the individual and in the race. Only a few of these wants are satisfied in and during his necessary work for a living; and somehow, with more or less definiteness, according to his nature and education, he considers his "getting of a living" as merely the foundation of "leading his life." Thus it is never enough for him—except in a very few degraded cases— that he has plenty to eat and shelter and warmth enough to keep him in health. His growing wants—not so much material as intellectual and social—demand nothing less than that the entire resources of the earth be opened up, worked, and put into con- sumable forms called " goods " ; and further, that the men and women not engaged in doing this should supply their own personal services for his delectation. The total of goods and services he calls wealth.
• This wealth has very little likeness to the "natural provision" of the mere animals, and it is arrived at by methods which are distinctly non-natural. The human secret is exchange; that is, instead of each individual hunting by himself for his whole subsistence, and taking what share he can get of a limited pro- vision which he can neither increase nor much modify, each individual in society makes ordoes one little thing and offers it for money to the community, which is making and doing the million of other things ; with the money received from the sale he buys any selection of the million other things he may fancy. Thus wealth, as we know it, is from the first not a natural thing, but the product of organisation—for organisation, I suppose, means the conscious dividing and integrating of forces toward a specific end—and modern industry at every point is the triumph of organisation. But for this organisation, indeed, we should net have the civilisation we have. If one compares the numbers of any animal approximating to man in weight and consuming capacity, it will suggest itself that the mere subsisting of over forty millions of people on the small acreage of the United Kingdom indicates the widest possible divergence between mere animal and human development.
As to the amount of this wealth, it is enough to say that it is increasing far more rapidly than the population who are to 'enjoy. it. But, owing to the infinite expansiveness of his wants, and so the infinite compass of the, "good life," man never at any time has enough or nearly enough of it. Even if it were decently distributed, there would be little more than a bare sufficiency for each, according to . modern ideas of what life requires, and although, of course, the fact of numbers having incomes above the average does not mean that others are correspondingly plunged below it, yet there is much waste and much selfish con- sumption, with the result that great numbers do not get enough to keep them even in that healthy animal life which they would have enjoyed—if they survived at all—had they, remained mere animals. Hence, on the one hand, the not unreasonable dis- content of those who vaguely feel that, under the implicit contract of society which forbids any one having recourse to the natural struggle for existence, they get less than what, they as vaguely call their "natural rights." Hence, on the other, the effort of all persons who realise the duty of opening to every human being the great possibilities of the "good life," to increase the suns of wealth,—this being the root of -the instinctive feeling that the man or woman, however wealthy, who does not work is a rather contemptible object.
More wealth, then, being desirable on every count, both as a "living" for those who are at or under the animal level, and as a means to the "life" of everybody, and the 'making of it being practically monopolised by those who can put together. the various factors of production, land, labour, and capital, according to a plan, let us consider something involved in this organisa- tion.
Providing the living of a nation is not the work of a State department, like the feeding of an army. It is a complex of what we call "plivate businesses." Any one who can command sufficient capital may become an "employer," and, as such, he will arrange, combine, and generally organise the various factors of production in any fashion or proportion he thinks most economic towards the production of cheap goods. Now, it is the universal experience that among these factors there are many which directly or indirectly, compete with .each other, the most obviously rival factors being various forms of machinery and various forms of labour; and perhaps the best known function of employers is the continual substitution of factor for factor, or the rearrangement of factors in different pro- portions to attain a more economical result. It is, then, by this irresponsible employing class that all the factors of production in the country—including men and women—are organised ; that is, set in their place as parts of a machinery to turn out, eventually; some article of human demand. Although their duties are essentially honourable ones, these employers, of course, do not work for nothing like Members of Parliament or Boards of Guardians. Their service being the threefold one of taking the risks, organising, and superintending, they take as their remuneration (called profit) the margin between cost and price ; that is, what remains at the end of the day between the price which they can obtain from the free public demand for the goods they make, and the sum of the various prices they have paid for the factors of production which they buy or hire. Thus it is evidently their interest to widen this margin; and, as it is always difficult to raise prices, by far the greater part of their endeavours is devoted to reduce the sum of their costs. This reduction, it is true, may be effected by underpaying some helpless factor or other ; it is most easily and generally effected, by substituting a more powerful economic factor for a weaker, or rearranging and reorganising whole processes. The whole public duty of the employer, then, is done when he pays the recognised full price for the factors which be employs. That is to say, we cannot with any reason blame him for using' one factor rather than another, unless, indeed, the nation is prepared to pay these employers for what would inevitably mean a sacrifice.
The point to which I want to direct attentionis that while these men are the employers and the paymasters of the nation, and while, on the whole, no one can get employment unless he submits to their organising, they have no mandate to employ human beings in preference to other factors. They are told by their own interests, by the favour of their customers, and by the applause of the world that their business is to turn out goods of a desired quality as cheaply as possible. In most cases they have many factors to choose from and many proportions in which to combine them. And, where machinery in any of its multitudinous forms can do the work that otherwise would be done by men and women, and do it more cheaply, the work will be taken from the human factors.
Thus it is quite conceivable—indeed, possible—that the organisa- tion of the near future may be more powerful as regards tbe
production of wealth than ever, while the very perfecting of the organism may leave growing numbers outside as superfluous, superannuated human machines which, all the same, we cannot throw upon the scrap-heap.
All this, of course, has not been overlooked by economists and others, although I cannot say that it was ever quite seriously faced. Perhaps up till now their answer was satisfactory enough, that this substitution of the most economical factors does not necessarily limit the total demand for the human factors. The more machinery, the more men, first to make and then to tend ; and, as the substitution cheapens the process, goods will fall in price, and there will be more demand for machinery, and still more for tenders and makers, &c. And besides, it was said, is there not a limitless field in the personal services, those un- organised industries in which men do not work with or in rivalry with mechanical factors? But I am not sure that this answer is sufficient now. The "demand for man" may be a demand for a different kind of man from that which can be supplied in the present circumstances. As the problem emerged only with the birth of machinery, so it has become acute only when machinery is found capable of doing fine and complicated tasks as well as heavy and continuous ones, and this perfecting of machinery, I am afraid, is likely to necessitate a corresponding perfecting of the machine tender. And the field of exclusively personal services is not, I am certain, so wide as we used to think it. There is, indeed, a demand which seems far from being satisfied,— for domestic servants and for household service generally. But in the professions, in journalism, in music, on the stage, it seems to me to be the case that the demand is for a level of service which must be for ever above the possi- bilities of the masses. Have we, e.g., even now, any room for third-rate poets ? Indeed, machinery itself has in many cases raised the standard demanded of the human competitor. Is nothing to be learned from the camera and the pianola ?
The position, then, seems to be this. In that organised industry in which the people earn their wage, and on which they depend to "get a living, there is less and less room for the ill-endowed and for the ill-educated. The " employed "—the only people whom we need for wealth production—are a little army " who can go anywhere and do anything." What are we to do with the others ?
University, of Glasgow.
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