I use the word "inevitable" in this connection without purposing to imply that modern industry in itself implies of necessity the destruction of the creative spirit of the craftsman and the dimming of the sense of security, independence, and hope; the thing that made the destruction of these inevitable in modern industry was the fact that when industry was transferred from the personal small-scale basis to the impersonal large-scale basis, the administrative brains of industry centered exclusively upon the mechanical problem of the transfer and ignored the human problem involved. That was left to shift for itself. And the instincts of self-defense and self-interest, rather than conscious, statesmanlike administration, have dictated and devised the policies and instruments that both capital and labor, with certain heartening exceptions, to-day employ in dealing with the issues of industrial relations.

Stripped of details and many concurrent issues, I think this affords a fairly adequate background for consideration of the modern labor problem. At least it gives us a picture of the conditions that have called into being the policies and instruments that both capital and labor now use to maintain and advance their respective interests and rights.

THE MODERN LABOR MOVEMENT AS A STRUGGLE FOR THE RESTORATION OF

A LOST CONTROL

Now, one thing lies coiled at the heart of everything I have pointed out, and that is that in the transfer from hand production, or small-scale industry, to machine production, or large-scale industry, the worker lost control of the instruments of production, lost control of the raw materials for production, lost control of the conditions under which production is carried on, lost control of the profits arising from production. And the history of the labor movement, from the time James Watt, in 1769, harnessed the expansive power of steam to human use and made possible machine production down to the present, has been the story of labor's struggle to regain the fruits, if not the fact, of that lost control. To the cyni

cal and the superficial the labor movement is a purely selfish struggle between a group called labor, trying to keep wages up, and a group called capital, trying to keep wages down; but it is essentially a competition for control, with a rich variety of meanings attached to that word. Specific demands and specific strikes for shorter hours and higher wages, aside from their immediate purpose, are part of this larger movement for a restoration of control even in those instances where the leaders of such strikes are blind to the relation their immediate action bears to the larger movement.

Before the entry of machine production and the factory system the workmen exerted a positive control over industrial processes and industrial relations. Modern industry made and still makes that impossible. Workmen turned, therefore, instinctively to the attempted exercise of a negative control over industry, at least control over wages and conditions of work. Organized labor, collective bargaining, and the strike are methods and instruments that have been evolved out of this attempt at negative control. Capital has of course countered with similar methods and instruments designed to meet in detail the procedure of labor. And thus the stage is set for the present relations of capital and labor, with the exception of certain happy variations which need not detain our analysis at this point.

THE PRESENT SYSTEM OF INDUSTRIAL RELATIONS AS A PRODUCT OF DRIFT RATHER THAN DESIGN

THE present system of regulating the relations between the parties to industry in the atmosphere of continuous class contest, latent or in action, from the public's point of view falls far short of the desirable. From the point of view of the intelligent self-interest of both capital and labor it is a costly and inadequate method of progress. It is important to remember, however, that this system was never deliberately planned as a desirable method of progress either by capitalists or labor leaders; it is the product of an instinctive

evolution under the spur of self-defense and immediate self-interest. Nobody chose strikes and lockouts as statesmanlike and desirable instruments for the effecting of social advance. They have been employed because, in the absence of industrial statesmanship, no other methods lay readily at hand with which workmen might exercise some measure of control over the conditions and reward of their work, and with which capital might resist such attempted control in toto or provide against its running the full gamut to usurpation or expropriation. But the weakness of

the whole round of partial policies and opportunist methods used by both capital and labor at present lies in the fact that they do not drive directly at the sustaining cause of the conflict between capital and labor. It will clear the air of irrelevancies to review briefly the more important of the policies and instruments now used in the administration of industrial relations and to attempt to assess their value as an ultimate solution or a fundamental contribution toward an ultimate solution of the labor problem. These may be noted as follows:

COLLECTIVE BARGAINING, STRIKES, AND LOCKOUTS

COLLECTIVE bargaining, as we have seen, is one of the logical products of the attempt of labor to exert a negative control over industry in place of the positive control it formerly exercised, a gesture of self-defense upon the part of a class from whom former weapons of protection had been taken. It is idle to rail at the use of collective bargaining in the absence of a better and equally effective method, but if we are to arrive at a better method we must visualize the essential fault of collective bargaining as anything approaching a solution of the problem of industrial relations.

In one of Mr. Zimmern's "Round Table" articles he states regarding collective bargaining this, which I have in part quoted in an earlier paper in this series:

Trade Unions and Employers' Associations are necessary parts of the organization of a modern state, and collective bargaining is clearly an advance on the old unequal system of individual wage-contracts. But collective bargaining between large-scale organizations of employers and workmen involves a piling up of armaments on both sides not unlike that of the rival European groups before the war. At its best it preserves the peace by establishing a precarious balance of power; at its worst it precipitates a disastrous conflict; and,

in either case, whether it works well or ill for the moment, it is non-moral and inhuman, for it has no basis in a sense of common service or public duty. Hence it creates a feeling of divided interest and permanent estrangement which has been all too visible to the rest of the community during the recurring industrial crises of the last ten years.

It is quite clear that collective bargaining, however necessary it may be in the absence of a better method, cannot be considered as more than a halfway house on the road to an ultimate solution of the problem of industrial relations.

Respecting strikes little need be said beyond a statement of the fact that the strike is frankly recognized by labor as an emergency instrument to be brought into use when other available means of influence and control fail. I am not concerned here with the complex of opinions regarding the use and abuse of the strike; I am concerned only with the fact that not even the users of the strike regard it as a solution.

Respecting the lockout and the injunction, which are counter-measures that capital has used in meeting or anticipating the strike, the same may be said as has just been said regarding strikes. No capitalist thinks of lockouts or injunctions as elements of a solution; they are frankly war measures. They come into play only when a crisis impends.

CONCILIATION

CONCILIATION likewise falls short of a solution. Conciliation serves an invaluable function in adjusting differences that have their roots in misunderstandings of policy or motive. The record of conciliation in the United States, Great Britain, Canada, New Zealand, and Australia is the record of a highly valuable method for the reduction of the wastes of open breaks between the parties to industry. But conciliation as a matter of fact does not deal with root causes; its paramount aim is industrial peace, and its paramount temptation is to regard industrial peace as an end in itself. Too frequently it becomes industrial pacifism, with a leaning toward peace at any price. Peace at any price, when an issue of right and wrong is at stake between nations, has had its day in court, and the popular verdict has gone against it. Is it less reprehensible in a clean-cut issue in industrial relations? The peace which conciliation too frequently has in mind is the immediate peace of the community rather than a lasting peace between capital and labor. Industrial peace and international peace alike are not ends in themselves; they are means to an end-the end of freedom and self-respect. It is a commonplace that international justice does not necessarily flow from international peace, but contrariwise. Just so social justice is not a by-product of industrial peace, but the other way around. Conciliation is a valuable instrument that will always be necessary, regardless of the system of industrial relations, but it is not a solution.

ARBITRATION

ARBITRATION differs from conciliation in the fact that a third party is present with power to balance claims and evidence and pass binding judgment thereon. The practical weakness of arbitration, in making a fundamental contribution to the solution of vexed industrial relations, lies in the difficulty the arbitrator has in acting upon more than an opportunist basis of judgment. In fact, the average arbitrator jockeys

the parties in dispute toward the settlement most likely to be accepted, and that makes it very difficult for the arbitrator to arrive at a decision upon the basis of abstract justice. He must perforce balance the strength of the opposing parties and reach a decision that stands a good chance of acceptance. Frequently the arbitral award is accepted because the strength of one of the parties can afford to accept it, and the weakness of the other one of the parties must accept it. In such cases sullenness follows assent, and real industrial peace is not advanced; simply one crisis is bridged over. Just because arbitration has such difficulty in arriving at a decision upon the basis of justice, there is always the possibility that the weaker party will feel justified in flouting the decision when the posture of affairs shifts and the chance

for a more advantageous settlement

seems to offer itself. We have not been without examples in this country when one of the parties to industry have agreed to arbitration and award and then flouted the decision of the duly constituted tribunal. As a matter of ethics that is indefensible. It is useless to hope for ordered progress if we cannot reckon upon the sanctity of contract and agreement. But getting into a fever about isolated cases of broken agreements is of slight use. Profanity and righteous indignation cannot take the place of intelligent administration of a difficult situation. The scientist searching for a cure for tuberculosis does not damn the bacillus under his microscope; he studies it, learns its actions and effects, and attempts to devise a remedy or preventive against it. Just so it is essential that we recognize the limitations of arbitration, voluntary or compulsory, and deal with the causes which rightly or wrongly prompt organized groups to scout the method or flout the award, when really fundamental issues are at stake.

INVESTIGATION

INVESTIGATION that shall insure a putting of the full facts before the public in a labor dispute, so that public opinion may not be swayed either by dema

gogic appeal or false sympathy, is a salutary method always. There is room for a wider and more systematic use of this agency.

But investigation is, of course, only an antiseptic. The publicity of the results of investigation can discourage, drive to cover, or prevent manifest injustice and unfairness of dealing that public opinion plainly would not tolerate; but investigation is negative and lacks the character of positive administration which is essential in any adequate dealing with industrial relations. Conciliation, arbitration, and investigation are indispensable instruments of any industrial system, but they may not be looked upon as offering adequate machinery for the total regulation of industrial relations. They deal with disputes after they have arisen; but industrial peace and progress require policies and machinery that will deal constructively with the conditions out of which disputes arise.

SOCIAL LEGISLATION

SOCIAL legislation designed to create a sense of security against unemployment, accident, sickness, old age, and kindred fears of labor realizes its immediate aim, the increased sense of security, but does not seem materially to lessen the vitality of the labor movement, a fact that might suggest that security and material safeguards are not the sum and substance of labor's aspiration. Any attempted solution or partial solution of the labor problem that proceeds upon the assumption that security is the goal that comprehends the whole round of labor aims is assured of failure. Mr. Zimmern, from whose illuminating studies of the problem of industry I am quoting at length in this paper, touches this matter in a pointed analogy drawn between the security of paternal legislation and the security of feudalism. He says:

It is constantly being said, both by employers and by politicians, and even by writers in sympathy with working-class aspirations, that all that the workman needs in his life is security. Give him work under decent conditions, runs the ar

gument, with reasonable security of tenure and adequate guarantee against sickness, disablement, and unemployment, and all will be well. This theory of what constitutes industrial welfare is, of course, when one thinks it out, some six centuries out of date. It embodies the ideal of the old feudal system, but without the personal tie between master and man which humanFeudalism ised the feudal relationship.

was a system of contract between the lord and the laborer by which the lord and master ran the risks, set on foot the enterprises (chiefly military), and enjoyed the spoils, incidental to mediaeval life, while the laborer stuck to his work and received security and protection in exchange. Feudalism broke down because it involved too irksome a dependence, because it was found to be incompatible with the personal independence which is the birthright of a modern man. So it is idle to expect that the ideal of security will carry us very far by itself towards the perfect industrial commonwealth.

WELFARE WORK

WELFARE work instituted and carried on by employers does not bring us any nearer a solution of the tangled riddle of industrial relations. Percy Stickney Grant, in his "Fair Play for the Workers," which is an attempt to state the workers' point of view regarding the problems centering in industrial relations, interprets the workman's attitude toward the welfare work of employers as follows:

The working-man's great complaint today is his helplessness, and it is perfectly clear that whatever increases this sense of helplessness will really increase his outcry. Working-men don't like to have things done for them. The more that is done for them, the more they feel in the power of the person who is responsible even for their benefits. . . . Paradoxically enough,

some of the most serious explosions of indignation have taken place amid the fairest environment that can surround the conditions of toil. . . . Working-men say that if corporations can afford these extras, these adornments and additions to the comfort of their people, then they can afford to give better wages. Of the two methods

of distributing a surplus, the working-man prefers the latter. He would rather take his chances in an ordinary factory with higher pay and use the addition to his income as he pleases.

In other words, the working-man realizes, or, at any rate, asserts, that he himself is paying for the improved tenements, for the parks, for the libraries, for the comforts and conveniences of the superior factories, for kindergartens, for lessons in cooking, for lectures, for flower-gardens, for flowerboxes outside the windows, for baths, etc. While he is meeting the cost of these advantages, he finds the world at large praising his employer as a notable philanthropist, and in his heart he regards this as a sham. At all events he would rather be his own philanthropist.

PROFIT-SHARING

NOR does profit sharing as usually administered offer in itself a solution to industrial unrest or furnish a final basis for cordial industrial relations. Profit-sharing, when its full implications are worked out, may come nearer than any of the matters I have mentioned to a solution, but I have here in mind profit-sharing as normally conducted. Here again let me summon one who from wide experience in labor matters can speak with greater sureness and authority than I. W. L. Mackenzie King, in his volume on "Industry and Humanity," says:

As the term "profit-sharing" is generally used, it means the distribution among wage-earners of part of the net profits of an undertaking. Where the rate of return at which labor is rewarded in the first instance is the standard rate, so that the share which labor receives from the net profits is in no sense a restoration, in whole or in part, of the wages it should have received before net profits were estimated, the objection of labor to this method of rewarding effort is in large measure removed. Often, however, in estimating net profits, capital and management are tempted to regard the remuneration of labor as an item in the cost of production to be kept as low as possible. It is hard for labor to believe that this is not what is generally done, and to understand why, if

extra payments are available in the form of dividends out of net earnings, they should not be as readily available in the form of higher wages at the outset. . .

... there is yet another ground on which organized labor fears profit-sharing. Tradeunion effort to raise the status of labor seeks reinforcement from a growing belief among workers in the solidarity of labor. Whatever tends to weaken or destroy the class interest is apt to be viewed with misgivings as likely to lessen the possible power of organization as a whole. . . . It is not surprising, therefore, to find that, where the result of profit-sharing is genuinely such as to improve the status, and not merely the temporary earnings, of working-men, labor's opposition to profit sharing has not only been silenced, but profit-sharing has found some of its strongest advocates in the ranks of trade unionists.

SCIENTIFIC MANAGEMENT

IT will be sufficient to mention one other policy which, despite the ambitious claims made in its behalf by its partizans, fails to afford a basis for the administration of industry mutually satisfactory to capital and labor, and that is scientific management. That the labor-saving devices of scientific management represent new and valuable assets to production may not be questioned. It is the reaction of scientific management upon the worker that presents a problem which the advocates of scientific management must solve before the principle can gain a fundamental foothold in industry with the full assent of labor. It tends to mechanize the worker. It centralizes responsibility for initiative in the scientific manager, and allots to the worker a charted action which he must carry out with economy of motion. It makes the worker a better tool, but a poorer craftsman. It pushes the specialization of modern industry, which has already created a problem of cramped initiative, still further. It makes for greater centralization of management. It is met with open hostility by labor. Labor fears that the rate of wage increase under scientific management will not be in just proportion to the gains