Part 2

Light has been thrown on the general questions treated by these inquiries in an able report by the Garton Foundation on _The Industrial Situation after the War_. This report is a study of the more permanent causes of industrial friction and inefficiency, and of the means by which they may be removed or their action circumscribed.

Mention of these several reports, taken at random, is made simply as indicative of the extent and variety of the study which has been given to the great problem of industrial reconstruction in England. All point toward the need of more adequate representation of labor in the conduct of industry and the importance of closer relations between labor and capital.

IV

A method of representation similar to the Whitley Plan, though less comprehensive, and which is constructed from the bottom up, has been in operation for varying periods of time in an ever increasing number of industries in the United States. This plan of representation is worthy of serious consideration. It begins with the election of representatives in a single plant and is capable of indefinite development, to meet the complex needs of any industry, and of wide extension, so as to include all industries. Equally applicable in industries where union or non-union labor or both are employed, it seeks to provide full and fair representation to labor, capital, and management, also taking cognizance of the community. Thus far it has developed a spirit of coöperation and goodwill which commends it to both employer and employee.

The outstanding features of this plan of industrial representation, varied to meet the special needs of each plant or company in which it has been adopted, are as follows:

Representatives chosen by the employees in proportion to their number, from their fellow workers in each plant, form the basis of the plan.

Joint committees, composed of equal numbers of employees or their representatives and of officers of the company, are found in each plant or district.

These committees deal with all matters pertaining to employment and working and living conditions, including questions of coöperation and conciliation, safety and accident, sanitation, health and housing, recreation and education. Joint conferences of representatives of employees and officers of the company are held in the various districts several times each year.

There is also an annual joint conference, at which reports from all districts are received and considered.

Another important feature of the plan is an officer known as the President’s Industrial Representative, whose duty it is to visit the plants currently and confer with the employees’ representatives, as well as to be available always for conference at the request of the representatives.

Thus the employees, through their representatives chosen from among themselves, are in constant touch and conference with management and representatives of the stockholders in regard to matters pertaining to their common interest.

The employees’ right of appeal is the third outstanding feature of the plan.

Any employee with a grievance, real or imaginary, may go with it at once to his representative. The representatives not infrequently find there is no ground for the grievance and are able so to convince the employee.

But if a grievance does exist, or dissatisfaction on the part of the employee continues, the matter is carried to the local boss, foreman, or superintendent, with whom in the majority of cases it is amicably and satisfactorily settled. Further appeal is open to the aggrieved employee, either in person or through his representative, to the higher officers and to the president.

If satisfaction is not to be had from the company, the court of last appeal may be the Industrial Commission of the State, the State Labor Board, or a committee of arbitration.

Experience shows that the vast majority of difficulties which occur in an industry arise between the workmen and the foremen who are in daily contact with them. Foremen are sometimes arbitrary, and it is by their attitude and action that the higher officers and the stockholders are judged. Obviously the right of appeal from the decisions of foremen and superintendents is important, even if seldom availed of, because it tends of itself to modify their attitude.

A further feature of the plan is what may be termed the employee’s Bill of Rights.

This covers such matters as the right to caution and suspension before discharge, except for such serious offenses as are posted; the right to hold meetings at appropriate places outside of working hours; the right without discrimination to membership or non-membership in any society, fraternity, or union; and the right of appeal.

Where this plan has been in operation for a considerable length of time, some of the results obtained are:--

First, more continuous operation of the plants and less interruption in the employment of the workers, resulting in larger returns for both capital and labor;

Second, improved working and living conditions;

Third, frequent and close contact between employees and officers;

Fourth, the elimination of grievances as disturbing factors;

Fifth, goodwill developed to a high degree;

Sixth, the creation of a community spirit.

Furthermore, the plan has proved an effective means of enlisting the interest of all parties to industry, of reproducing the contacts of earlier days between employer and employee, of lessening misunderstanding, distrust, and enmity, and securing coöperation in the spirit of brotherhood. Under its operation, the participants in industry are being convinced of the soundness of the proposition that they are fundamentally friends and not enemies, that their interests are common, not opposed. Based as the plan is upon principles of justice to all, its success can be counted on so long as it is carried out in a spirit of sincerity and fair play.

Here, then, would seem to be a method of providing representation which is just, which is effective, which is applicable to all employees whether organized or unorganized, to all employers whether in associations or not, which does not interfere with existing organizations or associations, and which, while developed in a single industrial corporation as a unit, may be expanded to include all corporations in the same industry and ultimately all industries.

Just what part labor organizations and employers’ associations can best take in such a plan remains to be worked out, but certain it is that some method should be devised which will profit to the fullest extent by the experience, the strength, and the leadership of these groups. While, doubtless, defects will appear in this plan and other methods more successfully accomplishing the same end may be developed, at least it is proving that in unity there is strength and that coöperation in industry is not only idealistically right, but practically workable.

If the points which I have endeavored to make are sound, might not the four parties to industry subscribe to an Industrial Creed somewhat as follows:--

(1) I believe that labor and capital are partners, not enemies; and that their interests are common, not opposed; and that neither can attain the fullest measure of prosperity at the expense of the other, but only in association with the other.

(2) I believe that the community is an essential party to industry and that it should have adequate representation with the other parties.

(3) I believe that the purpose of industry is quite as much to advance social well-being as material prosperity; that in the pursuit of that purpose, the interests of the community should be carefully considered, the well-being of employees fully guarded, management adequately recognized, and capital justly compensated, and that failure in any of these particulars means loss to all four parties.

(4) I believe that every man is entitled to an opportunity to earn a living, to fair wages, to reasonable hours of work and proper working conditions, to a decent home, to the opportunity to play, to learn, to worship and to love, as well as to toil, and that the responsibility rests as heavily upon industry as upon government or society, to see that these conditions and opportunities prevail.

(5) I believe that diligence, initiative, and efficiency, wherever found, should be encouraged and adequately rewarded; that indolence, indifference, and restriction of production should be discountenanced; and that service is the only justification for the possession of power.

(6) I believe that the provision of adequate means of uncovering grievances and promptly adjusting them is of fundamental importance to the successful conduct of industry.

(7) I believe that the most potent measure in bringing about industrial harmony and prosperity is adequate representation of the parties in interest; that existing forms of representation should be carefully studied and availed of, in so far as they may be found to have merit and are adaptable to conditions peculiar to the various industries.

(8) I believe that the most effective structure of representation is that which is built from the bottom up, which includes all employees, which starts with the election of representatives and the formation of joint committees in each industrial plant, proceeds to the formation of joint district councils and annual joint conferences in a single industrial corporation, and admits of extension to all corporations in the same industry, as well as to all industries in a community, in a nation, and in the various nations.

(9) I believe that to “do unto others as you would that they should do unto you” is as sound business as it is good religion; that the application of right principles never fails to effect right relations; that “the letter killeth, but the spirit giveth life”; that forms are wholly secondary, while attitude and spirit are all important; and that only as the parties in industry are animated by the spirit of fair play, justice to all, and brotherhood, will any plan which they may mutually work out succeed.

(10) I believe that that man renders the greatest social service who so coöperates in the organization of industry as to afford to the largest number of men the greatest opportunity for self-development and the enjoyment of those benefits which their united efforts add to the wealth of civilization.

V

In these days the selfish pursuit of personal ends at the expense of the group can and will no longer be tolerated. The reign of autocracy has passed. Men are rapidly coming to see that human life is of infinitely greater value than material wealth; that the health, happiness, and well-being of the individual, however humble, is not to be sacrificed to the selfish aggrandizement of the more fortunate or more powerful. Modern thought is placing less emphasis on material considerations. It is recognizing that the basis of national progress, whether industrial or social, is the health, efficiency, and spiritual development of the people. Never was there a more profound belief in human life than to-day. Whether men work with brain or brawn, they are human beings, and are much alike in their cravings, their aspirations, their hatreds, and their capacity for suffering and for enjoyment.

What is the attitude of the leaders in industry as they face this critical period of reconstruction? Is it that of the standpatters, who ignore the extraordinary changes which have come over the face of the civilized world and have taken place in the minds of men; who, arming themselves to the teeth, attempt stubbornly to resist the inevitable and invite open warfare with the other parties in industry, and who say:

“What has been and is, must continue to be; with our backs to the wall we will fight it out along the old lines or go down in defeat!”

Those who take such an attitude are wilfully heedless of the fact that its certain outcome will be financial loss, general inconvenience and suffering, the development of bitterness and hatred, and in the end submission to far more drastic and radical conditions imposed by legislation, if not by force, than could now be amicably arrived at through mutual concession in friendly conference.

Or is their attitude one in which I myself profoundly believe, which takes cognizance of the inherent right and justice of the coöperative principle underlying the new order, which recognizes that mighty changes are inevitable, many of them desirable, and which does not wait until forced to adopt new methods, but takes the lead in calling together the parties to industry for a round-table conference to be held in a spirit of justice, fair play, and brotherhood, with a view to working out some plan of coöperation, which will insure to all those concerned adequate representation, will afford to labor a voice in the forming of industrial policy, and an opportunity to earn a fair wage under such conditions as shall leave time, not alone for food and sleep, but also for recreation and the development of the higher things of life?

Never was there such an opportunity as exists to-day for the industrial leader with clear vision and broad sympathy permanently to bridge the chasm that is daily gaping wider between the parties to industry, and to establish a solid foundation for industrial prosperity, social improvement, and national solidarity. Future generations will rise up and call those men blessed who have the courage of their convictions, a proper appreciation of the value of human life as contrasted with material gain, and who, imbued with the spirit of coöperation, will lay hold of the great opportunity for leadership which is open to them to-day.

In conclusion, let it be said that upon the heads of those leaders--it matters not to which of the four parties they belong--who refuse to reorganize their industrial households in the light of the modern spirit, will rest the responsibility for such radical and drastic measures as may later be forced upon industry, if the highest interests of all are not shortly considered and dealt with in a spirit of fairness.

Who, then, will dare to block the wheels of progress and to let pass the present opportunity of helping to usher in a new era of peace and prosperity throughout the world, brought about through coöperation in industry?

II

LABOR AND CAPITAL--PARTNERS[1]

I

Labor and Capital are rather abstract words with which to describe those vital forces which working together become productively useful to mankind. Reduced to their simplest terms, Labor and Capital are men with muscle and men with money--human beings, imbued with the same weaknesses and virtues, the same cravings and aspirations.

It follows, therefore, that the relations of men engaged in industry are human relations. Men do not live merely to toil; they also live to play, to mingle with their fellows, to love, to worship. The test of the success of our social organization is the extent to which every man is free to realize his highest and best self; and in considering any economic or political problem, that fundamental fact should be recognized.

If in the conduct of industry, therefore, the manager ever keeps in mind that in dealing with employees he is dealing with human beings, with flesh and blood, with hearts and souls; and if, likewise, the workmen realize that managers and investors are themselves also human beings, how much bitterness will be avoided!

Are the interests of these human beings with labor to sell and with capital to employ necessarily antagonistic or necessarily mutual? Must the advance of one retard the progress of the other? Should their attitude toward each other be that of enemies or of partners? The answer one makes to these fundamental questions must constitute the basis for any consideration of the relationship of Labor and Capital.

Our difficulty in dealing with the industrial problem is due too often to a failure to understand the true interests of Labor and Capital. And I suspect this lack of understanding is just as prevalent among representatives of Capital as among representatives of Labor. In any event the conception one has of the fundamental nature of these interests will naturally determine one’s attitude toward every phase of their relationship.

Much of the reasoning on this subject proceeds upon the theory that the wealth of the world is absolutely limited, and that if one man gets more, another necessarily gets less. Hence there are those who hold that if Labor’s wages are increased or its working conditions improved, Capital suffers because it must deprive itself of the money needed to pay the bill. Some employers go so far as to justify themselves in appropriating from the product of industry all that remains after Labor has received the smallest amount which it can be induced or forced to accept; while on the other hand there are men who hold that Labor is the producer of all wealth, hence is entitled to the entire product, and that whatever is taken by Capital is stolen from Labor.

If this theory is sound, it might be maintained that the relation between Labor and Capital is fundamentally one of antagonism, and that each should consolidate and arm its forces, dividing the products of industry between them in proportion as their selfishness is enforced by their power.

But all such counsel loses sight of the fact that the riches available to man are practically without limit, that the world’s wealth is constantly being developed and undergoing mutation, and that to promote this process both Labor and Capital are indispensable. If these great forces coöperate, the products of industry are steadily increased; whereas, if they fight, the production of wealth is certain to be either retarded or stopped altogether, and the well-springs of material progress choked.

The problem of promoting the coöperation of Labor and Capital may well be regarded, therefore, as the most vital problem of modern civilization. Peace may be established among the nations of the world; but if the underlying factors of material growth within each nation are themselves at war, the foundations of all progress are undermined.

II

Capital cannot move a wheel without Labor, nor Labor advance beyond a mere primitive existence without Capital. But with Labor and Capital as partners, wealth is created and ever greater productivity made possible. In the development of this partnership, the greatest social service is rendered by that man who so coöperates in the organization of industry as to afford to the largest number of men the greatest opportunity for self-development, and the enjoyment by every man of those benefits which his own work adds to the wealth of civilization. This is better than charity or philanthropy; it helps men to help themselves and widens the horizon of life.

Through such a process the laborer is constantly becoming the capitalist, and the accumulated fruits of present industry are made the basis of further progress. The world puts its richest prizes at the feet of great organizing ability, enterprise, and foresight, because such qualities are rare and yet indispensable to the development of the vast natural resources which otherwise would lie useless on the earth’s surface or in its hidden depths.

It is one of the noteworthy facts of industrial history that the most successful enterprises have been those which have been so well organized and so efficient in eliminating waste, that the laborers were paid high wages, the consuming public--upon whose patronage the success of every enterprise depends--enjoyed declining prices, and the owners realized large profits.

The development of industry on a large scale brought the corporation into being, a natural outgrowth of which has been the further development of organized Labor in its various forms. The right of men to associate themselves together for their mutual advancement is incontestable; and under our modern conditions, the organization of Labor is necessary just as is the organization of Capital; both should make their contribution toward the creation of wealth and the promotion of human welfare.

The labor union, among its other achievements, has undoubtedly forced public attention upon wrongs which employers of to-day would blush to practice. But employers as well as workers are more and more appreciating the human equation, and realizing that mutual respect and fairness produce larger and better results than suspicion and selfishness.

We are all coming to see that there should be no stifling of Labor by Capital, or of Capital by Labor; and also that there should be no stifling of Labor by Labor, or of Capital by Capital.

While it is true that the organization of Labor has quite as important a function to perform as the organization of Capital, it cannot be gainsaid that evils are liable to develop in either of these forms of association.

Because evils have developed and may develop as a result of these increasing complexities in industrial conditions, shall we deny ourselves the maximum benefit which may be derived from using the new devices of progress? We cannot give up the corporation and industry on a large scale; no more can we give up the organization of labor; human progress depends too much upon them. Surely there must be some avenue of approach to the solution of a problem on the ultimate working out of which depends the very existence of industrial society.

To say that there is no way out except through constant warfare between Labor and Capital is an unthinkable counsel of despair; to say that progress lies in eventual surrender of everything by one factor or the other, is contrary, not only to the teachings of economic history, but also to our knowledge of human nature.

III

Most of the misunderstanding between men is due to a lack of knowledge of each other. When men get together and talk over their differences candidly, much of the ground for dispute vanishes.

In the days when industry was on a small scale, the employer came into direct contact with his employees, and the personal sympathy and understanding which grew out of that contact made the rough places smooth.

However, the use of steam and electricity, resulting in the development of large-scale industry with its attendant economies and benefits, has of necessity erected barriers to personal contact between employers and men, thus making it more difficult for them to understand each other.

In spite of the modern development of Big Business, human nature has remained the same, with all its cravings, and all its tendencies toward sympathy when it has knowledge and toward prejudice when it does not understand. The fact is that the growth of the organization of industry has proceeded faster than the adjustment of the interrelations of men engaged in industry.

Must it not be, then, that an age which can bridge the Atlantic with the wireless telephone, can devise some sort of social X-ray which shall enable the vision of men to penetrate the barriers which have grown up between men in our machine-burdened civilization?

IV

Assuming that Labor and Capital are partners, and that the fruits of industry are their joint product, to be divided fairly, there remains the question: What is a fair division? The answer is not simple--the division can never be absolutely just; and if it were just to-day, changed conditions would make it unjust to-morrow; but certain it is that the injustice of that division will always be greater in proportion as it is made in a spirit of selfishness and shortsightedness.