Fabian Tract No. 196. THE ROOT OF LABOUR UNREST: AN ADDRESS TO EMPLOYERS AND MANAGERS.;:; BY SIDNEY WEBB. * An Address to a representative private gathering of Employers, Managers and Foremen in 1919 ; reproduced as delivered with bibliographical footnotes added. Reference may be made to The Works Manager To-day, by the lecturer (Longmans : 7s. 6d. net). PUBLISHED .\11:0 SOLD BY THE FABIA:\ SOCIETY, 25, TOTHILL STREET, \\'EsnnNsTER, Lo:-;Do ·, s.vV.l. NOVEMBER, 1920. PRICE TWOPENCE. THE FABIAN SOCIETY 25, TOTHILL STREET, WESTMINSTER, LONDON, S.W.l. Tho e wilhng to join the Labour Party, or desirous of obtaming lllformatloll about 1ts Programme and Principles, are mvited to commumcate w1th tht Sc<.:rctaryof the Fabian Society. The Fabian Society ha ' been, from the outset, a constituent body of the Labour Party: and member hip of the ociety carries "'itb it full membership of the Labour Party, eligibility for nommation to all Conference and Offices, and qualification for Labour Party candidatures for Parliament and Local Authoritic,, without obligation to belong to any other organisation The Society welcomes as members any person , men or women, v.heno\"l'r resident, who ubscribe to 1ts Basis (set forth below), and who w11l co-operat • in it work according to their opportunities. BA I OF THE FABIAJ. OCIETY. (TO BE SIGNED BY ALL ~lEMBER .) (Adopted Jl.lay 23rd, 1919.) The Fabian ociety consists of ociahst . · It therefore mm at the reorgani ·ation of Society by the emancipation (If Land and Industrial Capital from individual owner h1p, and the ve ting of them 111 the community for the general benefit. In th1 · way only can the natural and ucquired advantages of the country be equitably shared by the whole people The 'ociety accordingly works for the extinction of private property 111 land, \\ith equitable consideration of estabhshed expectations, and due provi»ltlll a to tht· tenure of the home and the homestead ; for the transfer to the community, by ~unstltutional methods, of all such industries as can be conducted socially; and for the e tablbhment, as the governing consideration in the regulation of production, di tnbution and serv1ce, of the common good instead of private profit. The ociety is a constituent of the Labour Party and of the IntcrnatJUn,tl ocialist Congn:"s; but it takes part freely in all constitutional mo,·ements, social, economic and political, which can be guided towards its own objects. It · direct bu,ines is (a) the propaganda of Soualism in its application to current problems; (I.) mvestigation and di covcry in social, industrial, political and economic relatiOn'; (c) the working out of Socialbt principles in legislation and administrative reconstruction ; (d) the publication of the results of its investigations anUb!>Cribe annually accoruing to his m<·an . I her control the:oc1et) through the E. rcutive Committee (elerllu annuall} by ballot through a postal vote), ad at it. aouual and other busin meeting.. 11. ...o;sociat , v.ho ~ign a form c. pressing only general sympathy wllh the o!Jjo-..t of the oct t)' nd pay not l than ros. a year. 1 hey can attend all c ccpt lh ,. clu ""Ir membe~' m U but have no control over the Scs. There are convcni •nt Common Rooms, \\here light refreshment can ue obtained," ith an e te• ivc hhr n for the fnc u. e of member only mong the So 1et) 's activities (in \\hich it places its cnu;e unrc cn·c It is the view of the slave-owner. Now, into that kind of one-sided agreement the workman does not enter. He never consciously sells himself in that way ; he merely engages to render a certain amount of service, nor would he consider that he 'ns behaving disloyally if he refused to work overtime, or in 8 some other way failed to promote the employer's business interests, with which he has, under the contract of service, absolutely no concern. We must get rid of that difference of view between the two parties to the so-called contract--which really was never a contract at all because the parties were not agreed-and so long as we cling to the capitalistic system we shall certainly have to adopt the workman's standpoint. In future there must be some reciprocal and mutual engagement, in which one party buys and the other sells, certain definite, clear-cut services with a precisely fixed quantum. To come back to my rebellious young friend, who objected to being told to work overtime. The foreman, of course, was obviously wrong. Instead of saying, "You stop to-night." he should have said, " Would it be convenient for you to stop to-night ? " What a difference that would have made ! Or he could have explained to the whole workshop that it was extremely important to get a certain job done, and that six or ten men were needed, and asked who could stop most conveniently to themselves. I do not know that I am particularly polite, but I always speak like that to my parlour-maid; and whyshould not foremen speak in the f'ame way to workmen? They lo e no authority by it. The officers who had most command over their men in the late war were those who treated them in a considerate way. To put it briefly, I plead for an enormous improvement in the manners of management, and I cannot believe that it is not possible to run a factory in a spirit of genuine partnership and mutual consideration. When I once expressed an opinion on military matters, a certain Major-General replied to me-" I cannot make an army in that way." I was rude enough to say, " I know you can't, but someone el e mightdo it." Now, if you think what I am saying impracticable, ask yoUTself whether the real obstacle does not lie in our own conventional modes of thought. Someone else may find it practicable. EQUALITY OF STATUS. There is another thing. Even to treat the workman with the utmost consideration is not to solve the problem. What he is asking for is equality of status in industry. Now, is that quite impossible ? Status is very largely a matter of social distinction. Is there any reason why we should habitually think of the capitalist owner of the factoryas belonging to one social class, and the workman in the factory ns belonging to another ? Such social distinctions sting very much, and I do not think they are necessary. Of co urse, we can newr make people equal, or identical, in capacity or in attainments, or even in refinement. But these innate or characteristic differences generally cut right across our differences of social status. Certainly they afford no warrant for ordinary class distinctions. Why does an employer or a foreman habitually address a workman by his surname '' .Jones" ? He would be very much surprised, except in the old-fashioned days in Lancashire, if the workman addressed him in that way. Washington was seen tabng off his hat to a negro, and when asked why he did so, he said," I do not want the negro to be more polite than I am." There are really no good manners without reciprocity and equality. There are in England what used to be called the line officer's manners, which meant a grovelling servility to those who were considered supPriors, and insolence to those who were considered inferiors. A gentleman never measures his manners. He is equally courteous to everybody. Consider, too, the horrible dirt, roughness and lack of amenitywith which many workmen arc surrounded. Even the office clerk is made far more comfortable than the ordinary manual worker-! say nothing of the directors' Board Room. But true consideration and the ideal of equality would lead u to give workmen surroundings as pleasant as those of the clerks, "·hile the clerks were treated as well as the directors. I have heard of one factory in which, when a workman ralls to ask for a job, he does not go to the works gates, but is shown into a properly furnished room and given a courteous reception, just as if he had been a customer come to give an order. How is it that we don"t feel it imperatiYe on us to treat manual workers courteously, if we are gentlemen ? Perhaps we are not. Perhaps there are no gentlemen in industry, in ,\d}ich case the first thing for employersio do i to become gentlemen. w·e ought to show to everyone the consideration "·hich we regard as due to ourselves. Don't under-rate the need for politeness. It is like an air-cushion; there may be nothing in it, but it ea. es the jolts con iderably. CIVILISATION IN THE FACTORY. I venture to prophesy that, at no distant date, every factory will have (as the Zeiss works at .Tena already have) an adequate installation of hot baths, a complete set of secure lockers for a suit of clothes and private dressing-rooms, so that every \';orkman \Yillleave the premises at the end of tlie day fit to enter his wife's parlour. If you think this extraordinary, remember that it is what any educated employer expects in hi own case. Do we really mean to refuse to our workmen the civili ed amenities that we claim for ourselws ? But more is needed than to supplement good material conditions by courteous treatment. What the miners, for example, resent at the present time is the fact that a toll is levied on their industry bypeople who are contributing nothing to its value. They do not object to the high salaries of the manager or the actiYe employer, or to their large share of the profits. Their objection is to the idle shareholder, or royalty owner, or landlord who is regularly drawing a tribute from the enterprise. This is, of course, good orthodox economics on the part of the miners. The functionless shareholder or landlord was receiving, every year before the war-roughly peaking, about a quarter of the entire produce of the country.* He is probably receiving more to-day, because the financial result of the \\ar has been to augment the *See for t he rele"l"ant statistics, gi,·ing authoritie , Fabian Tract No. .5, Facts for Sociali,ts, re,·ised down to 1915. (Fabi:tn Society: price 2d.) 10 share of the functionless shareholder at the expense of the portionof those who do fulfil some definite function in industry. This is, I need hardly say, an injustice against which the worker furiously rebels. I am sometimes amused by the naive gentlemen who write to the " Times " or the " Morning Post " periodically, to ask why we do not start an organisation to teach the working men political economy ? The "·orkmen are often far better instructed in political economy than the people who write to the " Times," and speaking generally, than the average man in the employing class. The workmen, in the course of the past generation, have learned their economics, whilst the employing classes, as a whole, have despised the economist. We shall arrive at no ultimate settlement until we take account of that fact. Take this question of the exaction of a tribute. Speaking to people who are interested in business rather than in land-owning, I think I may win my way to your acquiescence if I point to the case of the landlord. It is always better to dwell on some other case than our own. The workman cannot see that the landlord has either created the land or created its enormous increment of value. We pay about twenty million pounds a year in London for the bare privilege of building houses, and squatting on the marshy ground bythe Thames, a work in which the landlords have given us no help. It is easy to see that something is wrong with regard to the landlord, but not so easy to see it in regard to the functionless shareholders, to which class we all, more or less belong. They flatter themselves that they contribute the capital, on which, of course, we are dependent for keeping our business going. Without investigating that pointtoo closely. let us assume that the capital of a particular business has been furnished by the shareholders, who have thereby rendered a service for which some payment may be made. But no one ventures to suggest that the amount which the shareholder gets to-day has anyrelation to the sum that it is neces ary to offer in order to induce the saving of sufficient capital. How unnecessarily great it is we cannot compute, but even the most orthodox economists have given up assertingthat it is no more than sufficient to evoke the necessary saving. To pay a tribute of interest for ever and ever because a useful service was once rendered is like paying a perpetual pension all down the ages to the heirs of someone who once told you which was the road to London. So far I have been endeavouring to portray to you what is in the workman's mind. He intends to alter the present state of things, and he intends as a rule, to use democracy as his instrument. He understands by democracy something very different from what the ordinary employer in this country or in America understands by it. You will very often be told that this is a democratic country, and it will be pointed out to you, by way of proof, that a large number of employersand managers were origimdly workmen, and that men may rise from the rau.ks. But democracy means more than opportunity, more even than equality of opportunity. It means that no control over others shall be exercised by individuals, but only by the community. Our notion of political democracy i not that it hall be open to anybody 11 to become Prime l\iinister, but that the Prime l\Iinister shall express and execute, not his own will, but the will of the people. Therefore, when the workman proposes to apply democracy to industry, he does not mean that he wants an rqual chance to become a millionaire. To use an historic phrase, he wants that which concerns all to be decided by all. Now, nothing concerns the workers more than the way theyget their livelihood, and this must therefore be decided democratically. But, whilst it is a difficult business to apply democracy to politics, it is still more difficult to apply it to induatry.* We have hardly yetbegun to think about the matter, and our suggestions are very crude. We have a long road to go, and it will be travelled gradually. Yet, if we adapt ourselves, as employers, managers, and foremen, more and more to this old constitutional ideal of democracy, we shall be puttingourselves in tune with the universe, and pulling with the stream instead of again t it. THE FUTURE OF INDUSTRY. I do not want to leave you in any uncertainty, so I will put the matter in a more concrete way. It is, in my judgment, quite inevitable that individual ownership of industry and the means of production shall, in the main, and gradually, give place to collective ownership. The latter will take a great many forms. There will be certain great nationalised industries and services. In a few years it will be a commonplace for canals and railways to be run, not for the shareholders, nominally byorders of the shareholders, but for the benefit of the whole community bythe will of the whole community. The same thing will happen with s~ch essentially national services as coal-mining. Many other serviCes by which we live will be organised and controlled by our local government, while, as for the great mass of commodities which we consume, they will obviously come within the sphere of the consumers' co-opera· tive movement, which already operates far more successfully than anycapitalistic enterprise that I ever heard of. It is now supplying nearly two hundred million pound ' worth of goods annually, and has a membership of one-third of the families in the Kingdom. It un~ertake every kind of business, and is actually manufacturing somethmg like fifty million pounds' worth of goods a year. In all this we eliminate the functionless shareholder and the landlord, but we do not get rid of management ; and in this connection the workman is still very much at sea. As I have often tried to explain, even with the m?st co~ple_te democracy, and the utmost equality, management remams as mdispensable as ever. In fact, it becomes even more indispensable, as enterprise becomes more complicated. In an orchestral concert there must be a conductor who gives the time and somebody must choose the tune. But the conductor is not the proprietorof the orchestra and usually not even of the musical instruments . . * This will be found, tentatively worked out in elaborate detail, in A Consti. tutwn for the Socialist Commonwealth of Great Britain, by S. and B. Webb. (Longmans: l2s. 6d. net.) 12 He is not in a different social class irom the player , nor does he necessarily get a larger alary than t.he fir t violin. They are really all partners in a co-operative enterprise. Nevertheless, t.here is management, and, in a ense, autocracy, because the conductor's beat is law, and all the player recognise that it is only Ly obedience to the necessarydirection that the co-operative product can be made. It seem to me that every busine s enterprise resemble an orchestral concert in which all the players mu t, for the time being, adjust tneir movements to the conductor' direction. That is a very appropriate picture of a factory, where, though neither private ownership nor the functionle s share- bolder is essential, we mu t have co-ordination and control. I ugge t to you that two things are going to solve the problemof indll trial re-organisation. They are quite homely thing , not new invention ; but we must apply them, as we have never yet th:>Ught of applying thrm, to industrial operations. In the first place, inclu try, as far as po sible, should dispense with peremptory orders. In a. choral society thPre is a gre~t deal of give and take, of consultation and mntual arrangement. This should be the case in industry, where far more mu t be done by way of consultation ll.mong all the partiC's concerned. But I come back to my old Major-General, who aid .. I cannot make an army in that way,'' and I am quite prepared to bear employer~ tell me " \Ve cannot run a factory in that way." .JTy retort is the same: " If you cannot, perhaps somebody el e can, and e,·en run it better, for aught you know.'' CO-OPERATION IN MANAGEMENT. At present, the workers have only the vague t idea of what the mana,gement or direction of an enterprise really i . They are not yet competent to undertake it, because they do not know what i inYoh·ed. Neverthele s, as regards intellectual and moral competence, they com pare quite favourably with the ordinary run of directors of compa,nie-;, from whom we do not expect much a a rule. Yet, we con ult our director , or we do them t.he courtesy of eeming to con ult them. Let u make a point of con tuting the workmen-they will teach u:> something, perhap more than we imagine. Consultation, in a bu.,ine~~. mean~ many thing -uch a \Vork. Committee and the admi~"ion of representative worker to the Board of Directors. Tho ·e enterpri,es which have tremhlingly put one or two workmen on their Board of Management have never regretted the step; indeed, they only l'l'~Jet not having taken it before. When I was responsible for a good deal of education in London, I said: "We are going to take all th teacher into coun el, a,nd th~y shall as far a · practicable it on the Board." Perhap that policy <.lid not alter the teering to any great extent, but it enabled the hip to go with much greater . moothnes . ·what this means, howewr, i.l:. that per onal autocracy must go. I wa told of a big firm at BirkenhC'< d which uddenly announced a change in the workm.en' dinnPr hour. There "a. a strike immediately, whic·h cost the firm a lot of mOil' y. 13 Now, very likely the proposed change was wise, but it affected the men's households and all their domestic arrangements, and to introduce it autocratically, without consulting them, was an insane proceeding, Personal autocracy has been banished from the throne, the castle, and the altar. I rlo not think that it is going to survive in the farm, or the mine, or the factory. It may be necessary in dealing with horses, but not in dealing with men who are advancing rapidly in education and common sense, It must be superseded by a genuine democracy, which is quite compatible with the fact that the conductor gives the beat and chooses the tune. The employer must recognise that he is the servant of all, like the conductor in the orchestra. Where will the authority go ? When I was on the London County Council, we of the ProgressiveParty took ourselves very seriously. vVe were democratic in spirit, and we thought we governed London. We certainly interfered a good deal ; and out of our deep wisdom we decided to build a new bridge over the Thames. But we could proceed no further without calling in an engineer. He produced plans, and we had to accept them-there was nothing else for it. We found we could discuss little more than the colour the bridge was to be painted. Even on that point we consulted the artists, but they failed us, because they all advised different colours t So, finally, that decision was really left in our own hands. After all, in nearly every case, in the last resort, it is the facts that decide, and they can be interpreted only by the men who know the facts. There should be no more personal autocracy in industry than there was in the case of the bridge. It will be the facts that will decide, as interpreted \ by the common sense of all. But that would mean great changes in our industrial system; and not before it is time ! Personally, to-day, I am amazed at the extraordinary inefficiency with which the productivework of this country and every other country is carried on. Think of our engineering shops at this moment. Think of the very best shops in the industry and the shortcomings existing even there-and then think of the chaotic conditions of the worst of them. Industry will be transformed by two new principles, Measurement and Publicity. We shall have enormously more exact scientific measurement. Remember the ordinary foreman to-day, and his notions about a job. How very little exact measurement there is, either of the time it should take, the time it actually does take, or the time each part takes. But that is not the only sphere of measurement. The whole of costing is dependent on it. The majority of employersin this country do not even know what their own goods are costing, and we cannot have costing without exact measurement. As to the extent of the varied needs for their products ; the degree to which what is made really satisfies the need; what is being done in other factories, in other industries and in other countries to increase the demand or to improve the product-on all this there is available as yet, even to the vigilant manufacturer, little more than the vaguest hearsay. You may think it unfair if I say that, in all these respects, the failure of Capitalism is egTegious. It may have brought science into its mechanical processes, but it has certainly not done so in its business 14 organisation. It is apparently to be left to Socialism to apply science to the organisation of production and distribution, industry by industry, from the standpoint of supplying, to the uttermost, the consumers' needs. The second essential is publicity. That may seem a hard saying to some, because so frequently it seems as if secrecy were the soul of successful business. But this is only tantamount to saying that, to-day, the soul of business is perverted. There is no reason, however, why it should continue to be so. I imagine that employers are afraid that a policy of frankness would militate against their profits. But, of course, the object of business is not profits at all, but output. I suppose there are still some people who think that the object of business is profits, but that is bad economics. The only object of business is production. It is for the sake of the utmost pos&_ible productivity that we want the industrial machine to act with the utmost smoothness, and when an employer gauges his industrial success by the amount of profits he makes, he reminds me of a man who measures the perfection of his car by the amount of lubricating oil required to keep it running. There is no advantage whatever, but actual waste, in usingmore lubricating oil than need be. Equally, there is no adYantage to the community at all, but actual injury, in any profit being more t.han the bare minimum that is required to keep the machine going. In future, we shall judge a business by its efficiency in production. We do not estimate the achievements of a doctor by the amount of his fees, but by the extent of his cures. Similarly, the business man will be judged by his efficient fulfilment of his function of production, and not by his profits, which are merely the lubricating oil allowed him at presentbut which in the interests of efficiency must be reduced to a minimum. My vision of the function of management in industry in the years to come is a very exalikd one. But this management, far from being autocratic, will be dependent very largely on the reports of disinterested experts. Of course, there will still be emergency decisions, but management on its higher level will probably come to be more and more a competent weighing of expert evidence involving both measurement and puhlicity. Think, for instance, what it would mean to a particular factory to receive a report from an efficient outside costing expert, and to find out exactly what each component and every process was costing in comparison with what it cost in previous years, and with its cost in other factories in this country and elsewhere. Similarly, comparative statistics will show the management how each separate part of tbe concern is running in relation to other parts, and how it compares with all the other factories in the world. Other reports would keep the factory up to date, in matters of health and education, and would make it acquainted with the latest inventions, in its own industry, and in analogous industries. What we need in industry, as in science, is to universalise knowledge, and to disseminate it with the very minimum of delay. At present every employer works in the dark; and the worst of it is that he is so thoroughly accustomed to the darkness, like the blind fish in the pools of the Styrian caves, that he does not realise 15 that he is in the dark ! He declares that the darkness in which he gropes is the only sun-light ! My belief is that in the future the efficiency of production will increase very greatly, simply through industry being carried on under the glare of a group of searchlights, playing on every process from manv different angles. As for the operators who manipulate the searchlights, they will not be dependent on the goodwill of the factory under observation. Their function will be fulfilled when they have given their advice. The sphere of the brain-working professional will be a great one. The actual decisions will be arrived at in committees. Those people who say that industry cannot be managed by committees are evidently unaware that this is precisely how nearly all our present industry is managed. Why, even of Boards of Directors there are, to-day, in the United Kingdom, more than 66,000. The extent to which every large business is already managed by committees would astonish the village blacksmith if any such person happens to survive. We shall have more and more of this government. Committees are fruitful both in suggestion and criticism, and the representation of the workers upon them will be of tremendous value. But their main function is to bury personal autocracy. To sum up, I began by putting bPfore you my· conception of what is at the bottom of the new spirit in industry. It is the demand of the workman for a partnership in the direction and management of the business in which he is engaged: partnership not with the function- less shareholder, or even in profit, but with the technicians and managersof all grades, with the community as owner. This change must come, and it is coming, and we must find out a way of introducing it successfully without upsetting the machine. Seco:adly, I have suggested that production must be facilitated, not by secrecy, but by the widest possible knowledge of every relevant fact. Such knowledge will involve both scientific management and publicity, and the latter will very largely result from the use of the reports of professional experts, on whose services all great business is relying to an ever-increasing extent. Thirdly, it is just this transformation of business by Measurement and Publicity that will enable business men to become professional men and gentlemen, instead of mere shopkeepers. Finally, it is by the combination of the conception of partnershipamong all those concerned in each enterprise, and the conception. of the function of industry-to produce not profits, but products-withthe devices of measurement and publicity coupled with an earlyelimination of all mere " passengers" in the industrial ship, who now actually pride, themselves, as landlords or functionless share~olders.' on ·' living by owning " and of committee government upon a umversahsed knowledge of the facts as to the industry as a whole, that we c~n safely make the transition from Industrial Autocracy to Industnal Democracy, which alone will allay Labour Unrest. VACHER & SONS, LTD., Westminster House, S.W.l.-83913. FABIAN PUBLICATIONS. HISTORY OF THE FABIAN SOCIETY. By E. R. P EASE. Gs. net. FABIAN ESSAYS. 1920 Edition. 2s. TOWARDS SOCIAL DEMOCRACY? By SIDNEY WEBB. 1s. net, post 1d. WHAT TO READ on Social and Economic Subjects. 1s. net and 2s. net. THE RURAL PROBLEM. By H. D. 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