§1.Our examination of the existing industrial system discloses certain discords of interest and desire between the owners of the several factors of production, on the one hand, between producers and consumers on the other.Among the owners of factors of production the sharpest antagonisms are those between the capitalist employer and the wage-earner, and between the landowner and the owners of all other factors.Except as regards the ownership of land, these antagonisms are not absolute but qualified.The interests of capital and labour, of producer and consumer, march together up to a certain point.There they diverge.These discords of interest materialise in what we term 'the surplus,' that portion of the product which, though not essential to the performance of the economic process, passes to capital, labour or the consumer, according to the economic strength which natural or artificial conditions assign to each.The humanisation and rationalisation of industry depend, as we recognise, upon reforming the structure of businesses and industries, so as to resolve these discords, to evoke the most effective cooperation, in fact and will, between the several parties, and to distribute the whole product, costs and surplus, among them upon terms which secure for it the largest aggregate utility in consumption.The operation of industry upon this truly and consciously cooperative basis, would, it is contended, evoke increased productive powers, by bringing into play those instincts of mutual aid that are largely inhibited by present methods, and by distributing the increased product so as to evoke the highest personal efficiency of life and character.
But it would be foolish to ignore the doubts and objections which are raised against the spiritual assumption upon which this ideal of human industry is based.It is often urged that man is by nature so strongly endowed with selfish and combative feelings, so feebly with social and cooperative, that he will not work efficiently under the reformed economic structures that are proposed.He must be allowed free scope to play for his own hand, to exercise his fighting instincts, to triumph over his competitors, and to appropriate the prizes of hazard and adventure, the spoils attesting personal force and prowess, or else he will withhold the finest and most useful modes of his economic energy.
The distinctively spiritual issue thus raised is exceedingly momentous.
Suppose that the business life can be set upon what appears to be a sound and equitable basis, is human nature capable of responding satisfactorily to such an environment? Putting it more concretely, are the actual powers of human sympathy and cooperation capable of being organised into an effective social will? This issue is seen to underlie all the doubts and difficulties that beset the proposals to apply our organic Law of Distribution for purposes of practical reform.All proposals by organised public effort to abolish destitution give rise to fears lest by so doing we should sap the incentives to personal effort, and so impair the character of the poor.Among such critics there is entertained no corresponding hope or conviction that such a policy may, by the better and securer conditions of life and employment it affords, sow the seeds of civic feeling and of social solidarity among large sections of our population whose life hitherto had been little else than a sordid and unmeaning struggle.Proposals to secure for public use by process of taxation larger shares of surplus wealth are met by similar apprehensions lest such encroachments upon private property should impair the application of high qualities of business and professional ability.
The growing tendency of States and Municipalities to engage in various business operations is strongly and persistently attacked upon the ground that sufficient public spirit cannot be evoked to secure the able, honest management and efficient working of such public concerns.
Finally, the whole basic policy of the Minimum Wage and the Maximum Working-day is assailed on the same ground as a levelling down process which will reduce the net productivity of industry and stop all economic progress.
§2.To such criticism two replies are possible, each valid within its limits.The first consists in showing that the existing business arrangements are extremely ill-adapted for offering the best and most economically effective stimuli to individual productivity.They are not well-directed to discover, apply, and improve the best and most profitable sorts of human ability and labour.In other words, the actual system for utilising selfishness for industrial purposes is wofully defective: nine-tenths of the power remains unextracted or runs to waste.
Those who rely upon this criticism base their reform policy upon the provision of better economic opportunities and better personal stimuli to individuals.But such reforms will not suffice.What is needed above all is a social soul to inhabit the social body in our industrial system.
A conscious coordinating principle -- an industrial government, in which the consent of the governed shall be represented in their several wills and consciousness as well as in some central organic control -- is to be desiderated.Now is this condition of thought and of desire really attainable?
