Labour and Wages. (1914)

From the August 1914 issue of the Socialist Standard

Some Weird Statements dealt with.

In the second number of the “Candid, Quarterly Review,” conducted by Mr. Thomas Gibson Bowles, appears an unsigned article with the above title. The writer raises the question of industrial disputes, proclaims the necessity for close and deep investigation, and yet throughout the article never once tackles any essential or goes below the surface.

According to him, “the doubts and difficulties that haunt society to-day are of foreign extraction, and were in danger of destruction when crossing the Channel, but survived.” That there was no necessity for “labour unrest” to cross the Channel is shown in his next paragraph, the customary reference to “England’s immunity from war during the early portion of the nineteenth century, and her consequent growth of manufacture,” conditions which, in themselves, breed the class struggle. “The industrial dispute threatens England’s supremacy ; yet perhaps a greater glory awaits her. Perhaps, amid a Europe weakened by class hatred and torn by labour convulsions, England may again show the world a way of social peace.” The writer forgets that the conditions that breed class hatred on the Continent exist here in the same degree and from the same cause. The capitalist can only wish that a way may be discovered. His time-server, whether he be economist, labour leader, Salvationist, or scientist, can only grope for a capitalist solution as the alchemist groped for the philosopher’s store. But while they flounder their time grown short. They may shirk the contest with the Marxian theory of value, or refer to the Socialist Party as an insignificant minority, but and here we quote from the “Review” : “In economics there is at least this merit about the truth—that, once proclaimed, it is sure in the end to prevail.”

In order to prove to the workers that the “Socialist claim that they are being exploited is false, they must be taught economics.” No longer can this be designated the dismal science, for we are assured : “It is a mistake to suppose that the working-men take no interest in economics. It would be more nearly the truth to say that, at this moment they take little interest in anything else.” If “the truth once proclaimed is sure to prevail,” then capitalism is indeed on its last legs, for economic truth is proclaimed in “Capital,” and it in only an interested working class we wait for.

The capilalist and his journalistic hacks will consequently wish and grope in vain for a way out. It is utterly futile, also, to write of the Socialist movement as “the sedulous propaga­tion of economic falsehood,” because a fallacy can be exploded, while this braggart can only dance round the supposed fallacy, and leave a record of his utter inability to even understand the subject.

“The whole industrial system is arraigned. Capitalism is cheating, exploitation,” says he, is the doctrine taught. “It is their business to prove it, yet this is exactly what they never do.” “They,” are, doubtless, the labour leaders who either cannot or will not expose the system that fosters them, being content to mouth beliefs, and empty appeals for “justice” and “fairness.” “What,” asks the writer, “is the fair share of labour in the product of any industry ? if the present wage, then there is no grievance. Then it must be something more. But how much more ? No answer to these questions is ever attempted,” he complains, “except by the full-blooded Socialist.” Of whom else would he expect an answer ?

Wealth, in the economic sense, has no existence until members of the working class have expended their energy on the different substances common to the earth’s crust. That these substances belong to a small class in society, does not necessarily raise the question, “what is a fair wage ?” but rather, why any class or section of society should own the means of life necessary to all ? The “full-blooded Socialist” knows the answer to this; that is why he is politically organised for the establishment of a system of society where the means of wealth production will be owned and democratically controlled by those who use them.

The “Review,” in common with all the anti-Socialist crowd, is particularly concerned that the workers, under Socialism, shall be treated with fairness—even as they are to-day. So they timorously advance certain “insoluble questions.”

“Is the whole product of a factory only to be shared between the workers in that factory ? or is it to be shared by all the workers in the land ? And is each workman to share equally, irrespective of merit, or unequally ? And if the latter, on what principle and by what authority are the shares to be assessed? ”

A five shilling review is dear at the price if it can serve up nothing better than this in defence of the class it caters for.

Ownership being in the hands of the people, there will the authority be, and the common in­terest of all, asserting itself, will speedily put an end to the anomalies of capitalist authority. “Fair” wages and low wages, soft jobs and speeding up, poverty in the midst of plenly, and all the other abuses that belong to capitalism in its normal state, will end when the working class cease to be mere articles of merchandise, picked and kicked about the labour market.

The “Candid” journalist has also many doubts and misgivings on the terms “The right to live” and “A living wage.” He discusses these from many points of view, his perhaps, most brilliant and original remark being, “for happiness and influence in truth, do not depend on gold.” After this and much more irrelevant matter on rights and duties, he delivers himself of the following : “Wages are neither fair nor unfair ; they are fixed either by personal benevolence or by mercantile bargain.” As he cannot possibly claim benevolence for the employer who pays low wages, it follows that those who receive high wages are the recipients of charity. “Wages are neither fair nor unfair,” is where he should have stopped, for, so far, he had not blundered.

Wage is the name for the price of labour power. Whether the wage be high or low there can be no question of fairness, because the employing class having the power, dictate wages and conditions. They first divorce the workers from the means of life, in order to compel them to sell their energy at the cost of living.

But what is the difference between the cost of living of the working class, as represented by wages, and the total wealth produced by them ? Whether wages represent one-third or one-ninth it is obvious that the employing class only pay wages in order to obtain this surplus over the cost of maintenance of the working class. How then can wages be fair or unfair ?

The wages system is one where the workers are threatened with starvation, either if they will not or cannot sell their only possession—the value-creating energy—for a mess of pottage ; and that too, adulterated.

“Let us probe a little more deeply the allegation that the workman is being cheated.” The reader need not fear getting out of his depth, Needless to say, the writer of the article merely emphasises certain inconsistencies and peculiarities of the capitalist system, without proving anything except its utter absurdity as a system for intelligent people to live under. Like the hysterical suffragette, he runs away from the question he raises, and flogs something else to hide his cowardice. “A universal proportion of wages to profits.” The wages bill in some industries is, he says, higher than the profits. “Moreover, inequalities exist side by side in the same industries in the amount of profit.” These observations are as old as they are shallow—examples of the poverty of argument against Socialism. The depths are not probed, for the total profits of every concern are not considered ; and this would have been the surest way to ascertain whether the working class is robbed.

It is easy to see that in a competitive system differences in methods and management will produce different results. All that is proved is the inability of the capitalist class—with the assistance of politicians, economists, and scientists—to eliminate anarchy among themselves, and establish for themselves proportionate division of the spoil, by means of an even method of exploitation.

Any article on labour questions would, of course, be incomplete without a reference to co-partnership. The “candid” writer is candid, besides being illuminating and instructive. He says:

“Co-partnership has been universally successful in achieving peace . . . and the striking thing is that it has achieved this peace without any great or even any noticeable increase in the wages paid. For it must be remembered that the income which a workman under such a scheme derives from his share in the profits is necessarily a very slight part of the whole wage, and that largely owing to the liability of that share to suffer in yield in bad times, his total effective wage is no greater than that of his fellows outside. But he is content because he has been convinced that he is not being robbed. How can he be when he elects a delegate to the board and has some actual voice in the management ? It is clear, therefore, that the achievement of industrial peace is less a matter of raising wages than of convincing the workman that he is not being robbed. But as the workman (quite properly) will never consent to share in losses, its application is only possible to steadily successful concerns ; it is never-the-less to be heartily welcomed as a temporary expedient of the highest value.”

Quite a long paragraph, by the way, but reduced to simple language, it means that co-partnership workers, besides being robbed of the results of their labour—like other workers—are successfully bluffed as well.

Assuming that he has proved conclusively that the workers are not robbed, because some of them have been persuaded to believe so, the writer of the article next proceeds to show in what an Eldorado the worker really lives, according to his limited knowledge of actual conditions. Our author says :

“It is true that the individual workman without savings must sell his labour without undue delay ; he is not bound to sell it to the first bidder. His strength as a bargainer depends partly on his reputation and skill as a craftsman, but mainly upon that close competition among his possible employers, which will enable him to laugh at one who offers him too low a wage.”

A record of the number of such “laughs” would doubtless be interesting ; but if it is true that occasionally a worker “with savings” can afford to pass by a job, it is equally true that the vast majority cannot, and are compelled to resign themselves to the first situation that is vacant, without bargaining or discussion—which, to the capitalist, is impudence.

Next we have something that is profound and original. The real cause of strikes is the desire of the trade unionist to get back the money he has paid in contributions. “After wages,” he says, “have ruled high enough for long enough, a strike is nearly inevitable ; since only so can the men retouch their money.” What capacity for the detection of motives !

Then the scribe says : “In spite of all the theories of combination, one is always brought down to the individual workman. Is he or is he not to be forced, by the magistrate and the gaol, to work for wages which he himself does not approve ? If so it is slavery.”

This statement is clear and sweeping. It covers nearly the whole of the working class in every capitalist country on the globe. Discontent is universal. The workers in every occupation are slaves because at the bidding of the master class they must work for a mere subsist­ence—a wage they certainly do not “approve” of.

Throughout his long article the writer in the “Candid Review” has only succeeded in proving the incapacity of the capitalist class, with all their professional assistants, to run society on sane lines. Anarchy and poverty for the wealth producers, luxury and power for the idlers, are the nett result of capitalism. The only brilliant achievement of modern society is its marvellous productive and distributive power, developed by centuries of experiment and invention ; and these are due to the working class. It is they who have done everything useful. It is they who use energy and intelligence in the production of all social wealth.

The scribbler in the “Candid Review” says that the workingman should remember that the end of his discontent is not the improvement of wages, but the fall of society, and if at the end of it all society does fall he will be instantly buried in its ruins.

We know different. The intelligence and capacity displayed by the workers on the field of production can be utilised by them for other purposes. When they have added knowledge to their intelligence they will establish a system of society where they will consume what they produce. Production is difficult; to consume is easy. To establish Socialism, it is true, requires an effort, of which, however, an educated working class is easily capable. The fall of (capitalist) society—which cannot take place until the workers are educated—therefore, means the end of their slavery.

F. Foan

By The Way. (1917)

The By The Way Column from the August 1917 issue of the Socialist Standard

The points of view expressed in the papers by those who sit in authority over us are indeed illuminating. On the subject of “alien enemies” some queer things are said. While there are some who advocate the internment of all such persons, others are prepared to let them be at large so long as they can be employed and as a result of this “an Englishman would be released to fight.”

In this connection I recently read that a chairman of a Tribunal asked a baker who raised the question of the difficulty of obtaining labour why he did not employ Germans. The applicant replied by asking whether it was advisable, and said that if the public knew it they would raid the shop. Then with profound wisdom the chairman delivered himself of the following :

“I think it is short-sighted on the part of the public. If a German were employed an Englishman would be released to fight.”—”Evening News,” July 12th, 1917.

* * *

The General Federation of Trade Unions announces a conference to consider the question of soldiers’ and sailors’ pay. “One of the demands is that the minimum net allowance of any British Soldier as from July 1 shall be 3s. per day ; and also that the Government provides and pays from July 1 1917, all allotments to wives and other dependents.”—”Daily News,” July 20th, 1917.

Presumably the General Federation regards 3s. per day as being the trade union rate of wages for one body of workers going forth to slaughter other workers with whom they have no quarrel, whom they have never even met, at the behest and in the interest of their lords and masters. What Lloyd George thinks of this “audacity” I wait to see.

* * *

Mr. F. G. Kellaway, M.P., Parliamentary Secretary of the Ministry of Munitions, addressed a meeting of the allied engineering trades at Luton a short time ago on the subject of dilution of labour. He also referred to the recent strike and the causes which led up to this event. Deploring the fact that there was a deep-rooted suspicion in the minds of many trade unionists that dilution on private work, once introduced, would not be got rid of, but would remain as a regular practice after the termination of hostilities, he went on to say :

“The proceedings in the House of Commons on the Dilution Bill were not fully reported in the Press, so that the Government’s case for the Bill was only imperfectly brought before the men.

In this connection, I would say that the Government has, in many respects, suffered from the limitations which the shortage of paper has placed on the space which the Press is able to devote to these large questions. I have for a long time held the opinion that the paper shortage has been a serious handicap to the Government in keeping the country fully informed of the considerations which guide their policy.”—”Daily Telegraph,” July 9th, 1917.

Now really this is all swank. The Press and the censor make a studious practice of giving as little space as possible to these questions affecting the conditions of labour of large numbers of workers. In this very issue of the “Daily Telegraph,” which is typical of many others, there are 47½ columns devoted to advertising matter, 2½ columns relating to the money market and market reports, and 34 columns of general information ; therefore out of a total of 84 columns no less than 50 are utilised for advertising purposes. Shortage of paper, forsooth ! Next please.

* * *

A month or two since there appeared in our journal an article dealing with two plays (“Ghosts” and “Damaged Goods”) which were then running at London theatres. The why and the wherefore was then fully dealt with. I return to the subject to quote the following :

“It is a sign of the times that there are now running in London two plays which deal with the subject of venereal disease. Even four years ago such a thing would have seemed impossible, and thirty-six years ago, when “Ghosts” was received with a storm of violent abuse, few could have foreseen how public opinion would change towards it. The reason is mainly to be found in the propaganda world which led to the appointment of the Royal Commission on Venereal Diseases.”— “British Medical Journal,” June 6th, 1917.

* * *

From recent happenings in the House one is reminded of the Pleasant Sunday Afternoon performances and the heart-to-heart talks for men at the local tin Bethel. In the early part of July Mr. Bonar Law made a statement with regard to his duties as Chancellor of the Exchequer. He said : “A statement of his that he did not think it was his business to spend his time in trying to save £100 here and £100 there had been held up as very reprehensible, but at a time when we were spending millions daily the functions of a Chancellor of the Exchequer were much better exercised in trying to get a good system of expenditure and in getting the right men to carry out that system than in trying to cut down £100 here and there. . . .

“He certainly would not have taken up the office of Chancellor of the Exchequer if he had not thought he was capable of performing its duties. He had no object in doing so on any other terms.

In the first place he was not fond of work. (Laughter.) For the last twenty-five years at least he had never done any which he could either persuade or pay somebody else to do for him.”

— “Daily Telegraph,” July 7th, 1917.

There’s candour for you. It calls to mind the wag who said that “only fools and horses work.” Working men run the boats and Bonar pockets “divi.” When will we awake from our slumber ?

* * *

On the question of freights and food Mr. Bonar Law made a more significant admission. While he told his audience that he “was really ashamed to make the confession,” and he “thought it was disgraceful that in a time of war any class should be able to make the profits he would describe,” I have not observed that he has endeavoured to obtain absolution by giving these ertra profits to the Lord’s poor, or even to the “heroes broken in our war.” However, it’s never too late to spend—or to buy war loan. Mr. Law continued :

“The sum of money he had invested was £8,100 and, at 5 per cent,. interest that would produce £405 a year. For the year 1915, instead of £405, he received £3,624, and in 1916 he received £3,847. That was not the whole story. One of the steamers in which he was interested had been sold or sunk— he was not sure which. (Laughter.) In that ship he had £200, and after the very handsome dividends he had received he received in liquidation a cheque for a little over £1,000. There was another shipping company in which he had invested £350, and the other day he had received a letter from the owners saying that they were going to make a division of the surplus capital. For the £350 which he had invested he had received a cheque for £1,005.”

—”Daily News,” July 4th, 1917.

This quotation is rather lengthy, but to condense it would be to spoil it. Our masters and their hirelings glibly talk, about “equality o! sacrifice,” and the while are enriching themselves enormously whilst increased hardships are the lot of the majority of the workers. Think it over.

* * *

During the debate on an amendment on the new Franchise Bill Mr. Harold Smith objected to conscientious objectors having a vote. Though he admitted that in the majority of instances the objectors were genuine, a significant admission, although somewhat late—still he would not give them the vote. Another M.P. interrupting

“Asked the hon. member why he was not serving as he was of military age. 

That is a matter for which I shall answer to my own conscience, replied Mr. Harold Smith.”

—”Daily News,” June 27th, 1917.

So you see there is still some unconscious humour left in the world. One conscientious objector (the “Scout,” for instance) is so much beneath the contempt of the patriot (Mr. Harold Smith, for example) that he may not even have a vote to cast for or against another conscientious objector (again it might be Mr. Harold Smith) taking a seat in the House of Commons.

* * *

In the early days of the war the drink question loomed large in many speeches that were then made by the Rt. Hon. David Lloyd George. For every shortcoming of the Government and lack of essential materials wherewith to wage war our old friend “Bung” was blamed. The workers in very truth, according to the Welsh Messiah, were sodden in drink, even as Mr. Philip Snowden had declared some time before. Said the Welsh Rarebit: “Drink is doing more damage in the war than all the German submarines put together.” Then he was prepared to take a pledge of abstinence from the strong drink that was raging, and the newspaper editors, in their usual fawning manner, dished tip a large announcement that the King had also banned alcoholic liquor from the Royal Household. Now a different tale is told. It is inexpedient to deal too drastically with this question.

On this interesting theme, I notice there is another gentleman who is greatly concerned about the workers’ thirst for malt food in liquid form. One, Will Thorne, recently returned from a trip to Russia, has written to the King with regard to the shortage of beer. From a bright, brief, and brotherly reply I notice that Bill has been informed by the King’s Secretary that—

“The question of the shortage of beer, especially during the summer months, is one which demands careful and prompt consideration. I am passing your letter to Lord Rhondda, and adding that the matter is one which the King hopes will be dealt with in a considerate manner.”

Simply marvellous, isn’t it ? Doubtless the question of munitions and ship-building, and kindred problems, have all been satisfactorily solved ere this, and once again we can all join in singing praises to “Beer, beer, glorious beer.”

* * *

In our Declaration of Principles we state that “In society . . . there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce, and those who produce but do not possess.” Addressing an assembly at the Aldwych Club recently, Lord Leverhulme, of soap fame, put forward a plea for shorter working hours, advocating a six-hour day and a system of co-partnership. Whether he had been reading the Socialist Standard I cannot say, but at least the truth of the extract quoted above is accepted by him. He informed his hearers that :

“There was no possibility of reconciling the opposing claims of capital and labour. They must be fused. Co-partnership was the solution.”

And again—

“Machinery should be worked twelve hours a day, by two six-hour shifts of workers. Output of material would be increased, and, at the same time, the wear and tear of the human body would be lessened.”—”Daily News,” July 11th, 1917.

One is tempted to ask whether, in those firms where these “opposing claims” are “fused,” the workers carry home as much of the swag as the owners of the factory and the plant necessary for the production of the commodity, and if not why not. And further, if there is any guaranteed continuity of employment. The reply, of course, is obviously in the negative. A study of the co-partnership snare reveals the fact that the wage-slave, no matter what the conditions are which surround his employment, is robbed of his product, and that co-partnery contains all the evils inherent in the capitalist system. The solution of the “opposing claims” is by a triumphant working class obtaining political power and converting these privately owned but socially manipulated means of wealth production into the common property of society for the good of all.

* * *

The trip of a princess to Southend a short while ago has brought to light a good illustration of official ignorance. It will be remembered that on the occasion of this joy ride rumour asserted that a fleet of aeroplanes accompanied the train. At a meeting of munition workers at Plumstead the statement was made in a question addressed to Dr. Addison, asking him if such was the case. He then replied that—

“The question has been considered by the Cabinet and there is not a word of truth in the statement.”

The question was then transferred to the House of Commons. Mr. Macpherson replying stated that “there was not an escort by any aeroplanes of the R.F.C.” Then came a letter from the private Secretary of the Queen to the Mayor of Southend with the significant admission that “Her Royal Highness . . . was greatly interested in the fleet of aeroplanes which escorted the special train during the latter part of the journey.” Finally Mr. Macpherson made another statement in the House on the subject, when he said:

“In a reply he gave on Wednesday he said that no R.F.C. aeroplanes escorted Princess Mary on her visit to Southend, but this answer, he regretted to say, was incorrect. It was given after the usual reference to the R.F.C. and Home Defence Corps. Neither of their authorities was able to find any foundation for the story at the moment.” 

“Daily News,” July 20th, 1917.

Such are the specimens of official replies of the win-the-war government.

* * *

The case of an objector to military service “who was confined in a pit 12 feet below the level of the ground for eleven days and nights in Cleethorpe's Camp and for four days of that time was obliged to stand ankle deep in mud and water,” was recently brought to the notice of the Under Secretary for War. At first the right hon. gentleman was not aware of such a trivial happening as this and would have to make enquiries. Eventually this was done and we read :

“Mr. Macpherson replied that he regretted to say the allegations made were substantially correct. The case arose in the first place because the man was not given the option of a trial by court-martial, but was dealt with summarily by the commanding officer ; and, secondly, because having been awarded detention, he was not committed to a detention Barracks in accordance with the regular practice. . . . The Army Council took a grave view of the action of the authorities responsible and were considering what further action in the matter should be taken.”—”Daily News,” July 20th, 1917.

Now in the light of the foregoing who would not agree that “Kind, kind, and gentle are we” in our treatment of those with whom we disagree ? Even Stanton would have them put out of existence more speedily by having them shot !

* * *

The “Daily News,” in a leaderette of the same date asks : “What evidence does the War Office possess that this ‘irregularity’ is isolated, and that other conscientious objectors in other camps are not being similarly tortured ? In the second place, it would be interesting to hear what punishment has been inflicted on the officers who ordered, sanctioned, or tolerated this abominable cruelty. Military punishments are notoriously severe. What have they amounted to in this case ? The answer will show how far the War Office are sincere in their professed efforts to put down brutalities of this description.”

* * *

The revolting story of the Mesopotamian campaign, brought to light as the result of the work of the commission appointed to enquire into this ghastly military tragedy, emphasised once again the callousness engendered by militarism. To apportion blame to a few individuals is to tinker with the subject. Everyone who shouts for the war stands condemned, jointly and individually, and must shoulder his or her part of the responsibility. No wonder Lloyd George wanted the matter hushed up and says “Get on with the war.”

* * *

The capitulation of Lord Derby before the Select Committee on the Re-examination of rejected men is an admission of the truth of the allegations laid at the door of the War Office with regard to the methods of the military and the medical boards in taking up the halt, the lame and the blind. The transfer of power to a civilian body looks all right on the face of it, but is it merely a case of the doctor discarding a khaki uniform for a civilian garb ?

* * *

A leading article appearing in the “Weekly Dispatch,” June 10th, 1917, dealt at great length with the questions of peace and reconstruction. After pointing out that during the war there had been equality of sacrifice in regard to the risk of loss of life and limb, the writer went on to say that when the demobilisation takes place it would not be on such a large scale as many people now believed. He continued :

“For instance, 5,000,000 soldiers and sailors will not be at once thrown upon the labour market, nor will 3,500,000 munition workers at once lose their employment. The terms of peace may be such as to make it essential for us to maintain large armies and munition factories for many years to come.”

What, then, becomes of the oft-repeated phrase about this being the “war to end war” ? And further, what is to be said of those who are still advocating the “knock-out” blow.

The article goes on to speak of the war which we Socialists are engaged in—the class war. It says :

“We have two separate and distinct wars in progress—one which the-whole nation is waging, and one which has been going on for some years and not one whit less bitter—the war that has been and is still going on is between the employer and employed. 

If we are to be ready for the world peace one day to come, to be ready once more to take up the challenge of the rest of the world, and once more to enter into the great battle for trade, then the peace between the employer and employed must be signed before the peace between the nations now at war.

Let us be under no delusion; there WILL be a temporary lack of employment while we are putting our house in order; there will be a shortage of food for months after the war, as the various governments will require as many ships as are now b«ing used to take back the men to their different destinations; and as for prices, a man must be indeed an optimist if he believes that the cost of essentials will for many years, if ever, return to the 1914 level.”

Here, then, is a frank confession from an inspired source of the benefits held out to the mass of the people for giving their support to capitalist society—hard work for some, unemployment for many others, and semi-starvation for all. Join then with us for its abolition, and institute in its place social co-operation.

* * *

How the satellites of the win-the-war government carry on their recruiting methods is indeed a sorry spectacle. The harrying of the unfit, the halt, the maimed, and the blind is now quite a commonplace feature of militarism (English variety). In spite of all their protestations that such things have been magnified, and that, like the small boys caught sneaking the apples, “we won’t do it again, sir,” many accounts are yet to hand of these outrages on a long-suffering public. A recent one describes the case of a cripple called up for service. It states :

“A farce and an abuse of the process of the court” were the terms in which Mr. Bingley, the magistrate at Marylebone, described the action of the authorities in summoning Horace Ingram as an absentee under the Military Service Act.

It was stated that Ingram had been an invalid from birth, suffered from curvature of the spine, had lain for three years on a steel frame, and was wearing a steel plate in his mouth to enable him to speak properly.

It was a monstrous thing and a great shame, said the magistrate in dismissing the charge, to put such a case in the hands of the police, and the military authorities had not the courtesy to attend in support of the charge.”— “Lloyds Weekly News,” Aug. 5th, 1917.

The fourth year of war finds our masters still in a state of chaos and hard put to it to find sufficient cannon fodder to prosecute the “war of liberty.” When will the Government comb out their friends in the House and the others who have recently discovered that they are engaged in work of national importance ? Hush ! Is it only the working class they want slaughtered ?

The Scout.

Letter: Co-partnership, Fact or Fantasy? (1962)

Letter to the Editors from the July 1962 issue of the Socialist Standard

‘John Lewis’ replies

Dear Sir,

In the article in your March issue on Co-Partnership—with particular reference to the John Lewis Partnership—there are so many statements which are not in accordance with the facts, that I should be grateful if you would publish this letter in order to correct the quite erroneous impression which your article might create.

The Partners—and the definition you quote is a perfectly happy one, “persons associated with others in business of which they share risks and profits’—are, in fact, joint owners. All the ordinary share capital—the equity—of all the companies is held, either directly or indirectly, by the John Lewis Partnership Trust Ltd. on behalf of all members of the Partnership. You say “the workers in the J.L.P. no more share the profits than do the employees of various concerns who have in recent years taken up the idea known as profit sharing”, This is palpably and demonstrably untrue. Several companies in recent years have issued shares to their employees as a means of profit sharing, but the number of shares so issued is fixed arbitrarily by the Board concerned and the balance of the profit is distributed amongst the holders of the ordinary shares, who may be, and usually are, members of the general public. In the J.L.P. none of the general public can own a J.L.P. ordinary share—they are all held in trust for the “Partners ’—and all of the profit that would otherwise go to ordinary shareholders goes, under irrevocable settlements in Trust, in one way or another to the Partners themselves.

You go on to say that ’’the so called profits are no more than part of their wages—a bonus and an incentive for harder work”. Entirely untrue. The J.L.P. pays wages which are at least as high, if not higher, than their competitors pay and this sharing of profits is something entirely additional and is given pro rata according to their salaries whether they work harder or not. This is pure profit which in most other businesses would go to outside shareholders. It is not irrelevant in this connection to note that last year profits distributed to Partners or applied; for their benefit amounted to £1,500,000—a sum of money which could, had the Founder of the J.L.P. —Mr. J. Speden Lewis—decided to retain the business himself, have gone into his own pocket or, had he decided to float the Company in the normal way, into the pockets of outside shareholders of ordinary shares.

You dismiss gaily the amenities which the J.L.P. offers on the grounds that most of the amenities are also offered—and sometimes bettered—by their competitors. This clearly is no place to go into the detailed merits of amenities offered, but it can be confidently stated that no other comparable organisation offers better or even as wide a scope of amenities. Virtually every type of leisure time activity both intellectual and sporting is catered for and subsidised, e.g.. music, drama, chess, painting, sailing and all normal sporting activities. In addition there are residential clubs at Cookham on the Thames, at Stockbridge in Hampshire and at Liverpool. Partners can also buy subsidised tickets for operas, plays and concerts.

You seem to find it strange that Partners should be prosecuted for alleged dishonesty. This is quite incomprehensible. If, for example a Partner steals, that Partner is stealing from his fellow workers—universally regarded as being one of the most despicable forms of anti-social behaviour. It is surprising that it appears that you take exception to such a course of action.

The committees and councils of the J.L.P. are, you say, “supposed to be democratic bodies but in fact have a large percentage of members nominated by management and in every case are nearly always biased in favour of management This is particularly true of the General Council of the firm". Here the figures speak for themselves. In the Central (Not General) Council of I36 members, 28 are “nominated” by the management and 108 are freely elected by the members of the Partnership.

Legal ownership of the Partnership is vested not in ’’the Board of Directors and the Chairman”, but in the Trustees of the Partnership, who hold it for all present and future members of the Partnership. The powers of the Chairman are certainly wide, but they are limited by a written constitution and a breach thereof on his part could lead to his displacement by the democratically elected Central Council.

Despite your remarks that “J.L.P. workers are. if anything, worse off than workers employed elsewhere”, it is a fact that of our 15.000 members. 55%, have been with us over 3 years and 41% over 5 years. They are all at liberty to go elsewhere anytime they please.

The Founder of the John Lewis Partnership has said that the Partnership is a possible advance in civilisation and perhaps the only alternative to communism. Could it be that the success of this experiment has got “under the skin” of the Socialist Standard?

Yours faithfully.

H. C. Pugh

Public Relations Department.

John Lewis and Company Ltd.

Our reply

Mr. Pugh says “there are so many statements which are not in accordance with the facts” that the article on co-partnership might create an erroneous impression. In fact, the only error was our reference to the Central Council as the General Council.

Apparently Mr. Pugh is happy to accept our definition of “partners" taken from the Concise Oxford Dictionary, but he has ignored the important qualification which we were careful to stress. So, let us repeat that partners have definite—tangible-legal ownership in Capitalist enterprises and in the surplus value extracted from their employees. If this is borne in mind, it is quite clear that J.LP. workers have no stake in that concern.

Even accepting the definition from the Concise Oxford Dictionary without any qualifying statement, however it is still impossible to fit J.L.P. workers into the category of “partners" unless you want to go into an “ Alice in Wonderland " realm of fantasy and double-talk. For years now the J.LP. has referred to its employees as partners, even though they have come and gone as in any other capitalist concern and in all that time have had no legal ownership in the firm any more than workers have for example in the nationalised industries.

The fact is of course that the J.L.P. workers, like workers anywhere in the world, sell the only thing they have to sell, their ability to work. The wage they receive for expending their energies on behalf of the J.L.P. takes into account not only the actual money received, but includes the various amenities referred to by Mr. Pugh, and part of this wage is the so-called "profits" which we repeat are but a bonus and an incentive to harder work; it is actually referred to by the J.L.P. as a “general bonus" in various issues of their Gazette. Profit is unearned income—money which is realised by investing in industry and it only goes to those who have the necessary legal title. In other words, to those who possess stocks and shares etc. This obviously has no relevance to the mass of J.LP. workers.

Dividends

Mr. Pugh says that “none of the general public can own a J.LP. ordinary share . . ." by which he presumably means that no one can hold any of the 612.000 deferred ordinary shares of J.L. Partnership Ltd.. 6,995 ordinary shares of the Odney Estate Ltd., and 75 shares of the Leckford Estate Ltd. These are held by the J.L.P. Trustees who are also represented on the J.LP. Board. The implication to be drawn from the above statement apparently is that there is no exploitation of the workers in the J.LP. But Mr. Pugh does not mention the £287,000 paid out as dividends upon the preferred ordinary and preference stocks of the company and its subsidiaries, and no mention is made of the actual amount of debenture interest paid out in 1961. According to the Gazette of 3rd June. 1961 Loans and Debentures amounted to £10,227,619 and the interest of Outside Stockholders in Subsidiaries amounted to £6,841,389.

Mr. John Bedford. Chairman of Debenhams Limited, in an interview given to the Gazette touched upon this. He was asked about the efficiency of the Partnership by comparison with Debenhams. He said he thought "his own group's profitability was higher, but it was difficult to make a comparison without knowing exactly what capital was tied up to produce the Partnership’s results. Debenhams made a return to the Stock Exchange giving such information; the Partnership, he thought, did not."

We have already touched upon amenities, but as Mr. Pugh maintains that no other "comparable organisation offers better or even as wide a scope of amenities", it would be as well to deal with some of his figures. 55% of the 15,000 staff have been with Lewis's over 3 years and 41% over five years. “They are all at liberty to go elsewhere any time they please". Apparently they do so, for these figures from another angle show that out of 15,000 staff, 45% have been less than three years with the J.LP. and 59% have been there less than five years. Making allowance for normal wastage for retirement and other reasons it would seem that quite a large numbercome to Lewis's, find they do not like it, and go elsewhere. If on balance pay and conditions are so favourable in the J.L.P. they should be able to maintain a labour turnover much lower than this.

It can happen, of course, that a firm competes for labour by offering a combination of pay and amenities which really are above the average. What happens in that case is that they get a large number of applicants for vacancies and are able to pick the best: best qualified, best trained, and best from a health point of view. They are, therefore, paying above average wages but getting above average efficiency. The other side of the picture is that some other firms cannot or do not want to compete in this way, so they get the least efficient workers and pay wages below the average. Whether the J.L.P. fits into the latter category is anybody’s guess, but one thing is certain and that is that they do not fit into the first category; the staff wastage figures make that crystal clear.

Special Facilities

Mr. Pugh gives information about the special facilities offered to J.LP. staff. Different firms of course use different attractions. Some offer their employees four weeks holiday, luncheon vouchers, and so on. Other employers are able to offer free or cheap travel. Some workers have free or very cheap accommodation, food, clothes, shoes etc., or loans for house purchase at very low interest rates. But it is only necessary to look at the consequences to see that these are not additions to wages. It is obvious that free travel for railwaymen is a necessary accompaniment of low money wages, and the same thing can be found elsewhere.

Mr. Pugh says that we “seem to find it strange that Partners should be prosecuted for alleged dishonesty." But he has again missed the point we were trying to make. A man cannot steal from himself and the very fact that prosecutions take place means that someone else is the legal owner of the stolen goods, not the J.L.P. workers. Apparently Jones Bros, of Holloway (a member firm of the J.L.P) are under no such illusions as Mr. Pugh. They have installed a buzzer theft trap and anyone caught between two white lines near the staff exit when the buzzer goes, is asked by the watchman to empty his pockets, or may even be taken to a private room to be searched. (See Observer 22-4-62).

Regarding the Councils, in particular the Central Council. Mr. Pugh himself tells us “In the Central Council of 136 members. 28 are ‘nominated’ by the management and 108 are freely elected by the members of the Partnership." The nominated members amount to just over one fifth of the Council; in other words, one in five are there on behalf of the management. In actual fact, as many as a third of the members of the Central Council could be appointed by the management, according to the J.L.P. rules. This still doesn't take into account the very high percentage of management members amongst the "freely elected”. A quick glance through the Gazette reveals that this year's council is no different from previous councils, the majority of them being management employees.

Council representation and the percentage of nominated councillors have in fact been the subject of some discussion on the Central Council only recently. The following was reported in the Gazette of 25th November as part of the discussion of the Central Council:—“Ex-officio members are also a matter of concern to a number of Councillors. Need they be so large a proportion? ” "While they could number over thirty in the Central Council when Rank and File Councillors only numbered thirteen the situation was appalling, said one Councillor.” It can be seen from this that our statements in the article on co-partnership were perfectly correct and that Mr. Pughs’ phrase “freely elected” amounts to precisely nothing.

Says Mr. Pugh “Legal ownership of the Partnership is vested not in the Board of Directors and the Chairman, but in the Trustees of the Partnership . . ." What we actually said—we were referring to the Councils at the time—was that the Councils have no real power and that this is vested as in all capitalist concerns in the people who have legal ownership represented in this case by the Board of Directors and the Chairman. The Central Board and its Chairman have the real power; the real decisions are taken by the Central Board. Surely we do not have to cite the various decisions taken by the Board which are printed so regularly in the Gazette?

In conclusion Mr. Pugh along with Mr. Lewis apparently thinks “that the Partnership is a possible advance in civilization and perhaps the only alternative to communism" and that the success of this experiment has got "under the skin of the Socialist Standard." To which we would say that co-partnership, like nationalisation both at home and abroad, and in Communist Russia in particular, is just another way of running capitalism. One can certainly not consider co-partnership therefore as a “possible advance in civilization”. That will only come with Socialism.

In the meantime' no amount of word juggling is going to conceal the degrading business of the exploitation of the working class even though it may go under the guise of co-partnership and claim to he an "advance in civilization”. We say again that co-partnership schemes have nothing to offer the working class.

JONQUIL.

Co-partnership: Fact or Fantasy? (1962)

From the March 1962 issue of the Socialist Standard

To be a partner, or not to be! Well might Mr. John Spedan Lewis have soliloquised if he had thought at any great length upon the economic and legal implications of the term. Especially, when it is associated with ownership of a Capitalist undertaking, in particular the business known as the John Lewis Partnership which was founded in 1914.

JLP (John Lewis Partnership) employees arc all referred to as "Partners" so it might be as well if we take a look at what exactly a partner is. There are, of course, all sorts of partners. Marriage partners, partners in crime, whist partners, dancing partners. There are partners too such as those defined in the Concise Oxford Dictionary: “person(s) associated with others in business of which he shares risks and profits; . . ." That is, people who have definite tangible—legal ownership in Capitalist enterprises and in the surplus value extracted from their employees.

It is fairly obvious that most of the JLP employees do not fit into this last category. If they did, then this would apply to all Capitalist ventures and therefore, all workers would be partners!

Mr. Lewis and the present Chairman, Mr. O. B. E. Miller, would no doubt reply that the employees of the JLP are partners because they share the profits and the risks and have a variety of amenities which they would not get elsewhere. This, however, is so much nonsense; most of the amenities that the JLP has to offer are also offered—and sometimes bettered—by their competitors, who do not call their employees partners. Likewise with profit sharing. The workers in the JLP no more share the profits than do the employees of any of the various concerns who have in recent years taken up the idea known as profit sharing. Workers do not receive profits, unless they have money invested, which generally they haven't. In the few instances where they have, the amounts are so small as to be negligible and certainly would not be large enough to change them into “partners." The point is that workers sell the only thing they have to sell, their ability to work, and the wage or salary they receive is generally speaking roughly what is necessary to maintain them as the particular grade of workers they are; to maintain a family and to produce further potential wage slaves to take their place when they arc too old to work any more.

The so-called profits that the JLP workers receive are no more than part of their wage—a bonus as an incentive for harder work. From an employers view “profit-sharing" is a good gimmick. For if you can convince workers that they are getting a share of the profits, they are more likely to identify their interests with yours.. The worker who thinks in terms of “my business" is less likely to come to work late and go home early; to take a long lunch hour or stretch his coffee and tea breaks; to slack on the job; to scamp his work or to pilfer. He is the sort who is going to switch off unnecessary electric lights or machinery; make sure that stationery and other materials are not wasted; and report to the management the people who do those things. With a bunch of workers like this, any management is likely to see an increase' in its profits. This type of worker would, o! course, never dream of striking, for he would conceive it as being against his interests.

Profit is unearned income—part of surplus value—something for nothing. It is the wealth produced by workers which is unpaid and only goes to those who have money invested in stocks and shares. This hardly applies to the JLP workers. They are taken on in the same manner as other workers. They are hired and fired according to the dictates of Capitalism. If a particular branch of the JLP proves to be unprofitable, it may be sold and the employees fired, with the possible exception of a few higher executives who can be usefully transferred elsewhere. If any of the workers employed by the JLP fail to make the grade as surplus value producers, they get their cards, or as they say “their membership is terminated." When this happens, it is no good pleading that you are a partner, for the JLP is only concerned with economic facts, not fantasies.

If any of the so-called partners are caught taking some of the wealth they are supposed to own, or even suspected of doing so, they are sacked—just as they would be by any other Capitalist employer. The truth of this was recently rammed home to a few misguided employees of the JLP who apparently took the “partnership" gospel a little too literally, for according to the Guardian (11/9/61): “ During the past six months the John Lewis Partnership prosecuted eight partners for dishonesty, and all of them were convicted . . . In addition, 15 partners lost their membership for similar reasons."

Another aspect that is supposed to set the JLP apart from other Capitalist concerns is its committees and councils. These are supposed to be democratic bodies, but in fact have a large percentage of members nominated by the management, and in any case are nearly always biassed in favour of the management. This is particularly true of the General Council of the firm. However, even if they were democratically based and the JLP workers tried to use them to further their interests, it would not make a lot of difference, for none of these bodies has any real power. This is vested—as in all Capitalist concerns in the people who have the legal ownership; in this case in the Board of Directors and the Chairman. This is the body that makes the real decisions, the financial decisions, and decides whether a business shall be bought or sold, and so on.

It can thus be seen that JLP workers are, if anything, worse off than workers employed elsewhere, for in addition to the economic hazards of Capitalism, they are continually confronted with that diabolical device, the dossier.

However, the workers of the JLP are not “burdened” (if that is the expression) with the risks of the business, any more than any other employees are. If JLP went bust, the workers would obviously seek re-employment elsewhere. The risks of the business belong to the people who invest their money in the JLP as a going Capitalist concern, and who receive interest in return for such investment. This interest does not come out of thin air; it is wrung from the labour of the workers in JLP.

Although it is highly unlikely that such a successful profit-making concern as the JLP will wind up its affairs in the foreseeable future, one can be sure that if this did happen, the ex-workers would really be able to see who actually owned the company. It would be those people who had the necessary legal documents proving their ownership, not workers who happen to be called partners. Imagine applying to the Official Receiver for a share of whatever was realised when the assets were liquidated, on the strength of having been called a partner during the period of your employment!

It would do the workers in the JLP and other co-partnerships a lot of good if they were to think deeply and to ask themselves why their employers refer to them as partners and not employees. It is rather like the fox telling the chickens that they are foxes. The main reason for co-partnership is, of course, to help keep Capitalism running as smoothly as possible. The aim is to reconcile some of the system's class antagonism. For while workers accept Capitalism they will not be looking for an alternative.

JONQUIL.

Blogger's Note:

This article received a critical letter of reply from the Public Relations Department of John Lewis in the July 1962 issue of the Socialist Standard.

Co-partnership in gas works. (1911)

From the July 1911 issue of the Socialist Standard

At the annual meeting of the Labour Co-partnership Association, held at Westminster in March and reported in the columns of the “Gas World” (April 1st.), the president, Mr. Corbett Woodall, said there was evidence of “a revolt against the attempted classification of human flesh and blood with raw material, or fuel, as a contributory to the supposed need of capital in the way of profitable employment.” The “attempt,” we are told, was an error, even from an economic point of view, as riper experience had abundantly demonstrated. Meanwhile labour organised for its own deliverance.”

It may be noted in passing, that such elastic logic on the part of Mr. Woodall permits him to declare first, that the attempted classification is economically unsound, and then to show trade union and labour organisation as a desire on the part of the workers for deliverance. This tempts one to ask, what do they wish to be delivered from?—especially as the platform of the Co-partnership Association has resounded to the tread of such considerate friends of the workers as Alexander Henderson, Arthur J. Balfour, and others.

Since the workers’ very existence is determined by the economic basis of present society, it is fatuous for Mr. Woodall to say no one can possibly object to “defensive” action on the part of the wage-earner. If the workers’ premisses are unsound, then the defensive, action falls and constitutes the objection in itself.

Corbett Woodall mouths effusions as to a fair minimum wage. He might just as reasonably talk of an honest burglary. He says the workers must not be aggressive, because co-partnership spells salvation to them. They must not pin their official faith to Socialism.

The speaker knew, and had great respect for, many labour leaders, and it surprised him that “so many of them should profess themselves Socialists." Mr. Woodhall must realise that when labour men are Socialists they will not seek his society or respect, or pat him on the back on Co-partnership platforms. They will, instead, be educating the trustful and misguided “co-partners” in the science of revolt, and not in leading them to the shambles.

“What is wanted,” Mr. Woodall went on to declare, “is an appeal to the soul of man, who has never been satisfied with bread alone.” We require inducement to the improvement of man and of the fruits of his toil. The hope of mankind lies in his power of self-sacrifice.

But what self sacrifice has Mr. Woodall and his like, unblushing mouthers of “altruism” as they are, ever subjected themselves to? The various agreements drawn up for “co-partners” to sign certainly show nothing on the masters’ part of self-sacrifice, no tendency except to perpetuate the wages system. Their actions are as materialistic even as Mr. Woodall declares Socialism to be, and conceived on class lines narrower than that of the trade union policy he girds at—narrower if only because the capitalist class is smaller. They recognise to-day that it is cheaper to bribe the worker than to fight him, more so as the wages have gradually decreased since the introduction of profit-sharing by gas companies, not to mention the speeding-up, the introduction of wage saving machinery, and the miserable system of espionage, inseparable from the profit-sharing, as apparently, an appeal to the soul of man.

The present writer, at all events, cannot disagree with Mr. Woodall’s claim that the world is ripe for another step upward and onward in social progress. It its not only capitalism, however, that is “growing weary of wages settlements that do not settle anything, and of bargains that bear no more strain than wet paper.” But the way does not lie through co-partnership, and it is hopeless to think of agreements to obtain finality when a growing number of the working class absolutely deny the right of existence to a master class, and declare that nothing short of the overthrow of the existing social form can eradicate the hostility which exists between employers and employed.

A table was submitted showing that in all 28 companies with 19,613 co-partner employers have paid £726,126 in a period of 21 years. The highest percentage was paid by the South Metropolitan Gas Co.—8¼ per cent. This, on a wage of 25s. a week would be less than 2s. On the other hand, where wages were 35s., they are now 25s., so that to reduce wages 10s. at a cost of 2s. in the guise of divided profit, certainly warrants all the enthusiasm for co-partnership which the masters lavish upon it.

Further confirmation of this point was contained in the statement that the late Sir George Livesey “would relate how he once inquired of another large employer of labour, whether a workman with a real interest in saving time and materials and stopping waste, might not be worth an extra 5 per cent. on his wages. ‘Say 20 per cent.’ was the answer.”

Although this was a “co”-partnership meeting, only the “profit” payable to the workers was dealt with. The very fact that masters show such animated interest in forcing a share of their profits (?) upon those from whom, in other times and places, they just as enthusiastically wring that profit, is a sufficiently illuminating circumstance to put co-partnery in its proper place, among the many swindles the capitalists and their henchmen, the labour “leaders,” have together devised for the benefit of their credulous dupes.

"Southerner."

Loving fathers of industry. (1914)

From the July 1914 issue of the Socialist Standard

An interesting advertisement booklet recently published by Messrs. Joseph Crosfield & Sons, the Warrington soapworkers’ exploiters, shows how “model employers” dominate even the “private life” of their wage slaves, dictating as to how they should spend their scanty leisure.

After giving the names of the directors and other parasites who “run” the business, the pamphlet shows us how increased efficiency in the worker only benefits the capitalist class. For it states: “It is compulsory upon all boys and girls (employees) between the age of 14 and 17 to attend an evening school at least three nights a week. The course of instruction for boys is naturally concerned with questions relating to their line of work.” (Italics mine.)

Not a bad wheeze, teaching the poor kiddies their trade at night schools in their all too meagre spare time, after they have put in 8½ hours hard graft at the works for their lords and masters ! It is obvious, of course, that no time will be lost at work in teaching these youngsters soap making ! For the workers’ time is money to the capitalist.

We are then told that in the day-work departments, the 9½ hour day has been reduced to an 8½ hour day, “and events have proved that as much work as previously is done in the shorter hours.” Will the “B.S.P.” please note, that if the 8 hour day for all workers came into vogue, the capitalists would see to it, as they have done in this case, that the workers’ output was not lessened, but that they would be “speeded up,” so that the same or even an in­creased output was maintained in the shorter working day, with less expense to the masters in running machinery, lighting and heating the factories, etc.

With an eye to business the firm tells us: “The physical aspect of education is not over­ looked, for all work-girls up to the age of 17 undergo a course of gymnastics during the winter months.” Because strong, healthy, well-developed workers can obviously turn out more and better work than weak, unhealthy, and ill-nourished workers. So that from a purely busi­ness point of view—the point of view the master class always take—this little incidental expense well repays the employers.

Under the ironical heading “Social Recreation during Leisure Hours,” we are informed that the firm provide a company of the 4th Battalion, South Lancashire Regiment (Territorials), also a company of boy-scouts.

Note the masters’ determination to inocculate their workers with that brain-disease, patriotism. One can imagine how useful would these same workers be in defending their masters’ property against foreign invaders, or more probably, strike rioters.

Verily, the capitalist moves in mysterious ways, his wonders to perform !

This, we are told, is how the firm take a keen interest in the social life of the work-people ! Not much time for these workers to study their slave position in society. The firm see to it that their workers’ minds are diverted into less revolutionary and dangerous channels.

“Garden Village” employers go one better even, by providing their workers with libraries filled with capitalist works, libraries from which working class books and papers are vi­gorously excluded. Gardening, too, is taught, and thus the workers keep the “garden village” well cultivated in their spare time, without expense to the employers. Free fire brigade staff, ambulance staff, and gardening staff ! And so on, ad nauseam.

After giving a description of the soapmaking the pamphlet concludes with photos, several showing the work-people cheering and flag-wagging, on the occasion of a recent visit to the works of our royal parasites.

The enormous profits made out of the unpaid labour of the workers by soap kings was demonstrated by the “Daily Chronicle,” (24.4.14). According to that rag, Messrs. Joseph Watson & Sons, the Leeds soapmakers, made a profit of £103,999 last year, as compared with £84,215 in the year previous.

How much more of this devilish game will you workers submit to ? Aren’t you tired of being referred to in contemptuous terms as the working asses? or are you going to quietly wait for that last phase of this rapidly decaying system, State Capitalism, with its universal “model employers,” “garden villages,” “ideal conditions of labour,” “co-partnership,” “profit-sharing,” etc.; which is really more intensified slavery still—to a hide-bound State, instead of private employers—than that which exists at present ?

Capitalism has long since outstayed its wel­come ; why not organise with us and overthrow it at once ? “Now is the accepted time ”

A. C. Kelly

50 Years Ago: Profit sharing (1963)

The 50 Years Ago column from the June 1963 issue of the Socialist Standard

Co-partnership is the curative syrup for all capitalist ills just now. Fabians recommend it, Liberal and Tory newspapers have given it their blessing, and business men who have tried it are loud in their praises. It has a double effect in its application—it increases profits and stifles labour “unrest.”

Some sociological and political experts, indeed, regard it as the solution, par excellence, for the labour troubles. The hard-headed, unscientific capitalist, who has “no soul above immediate profits,” is, however, somewhat sceptical, and not without reason. For profit-sharing in at least one case was productive of labour trouble.

The instance in question was recounted at a fashionable gathering of co-partnership apostles, at Lord and Lady Brassey’s, in Park Lane—a meeting arranged for the purpose of devising ways and means of sharing profits with the workers—something eminently desirable from the Park Lane point of view. One speaker said that he offered shares to his employees, one of whom took up a hundred. Next day in the workshop he remonstrated with a fellow workman for wasting the gas. The reply was: “Oh, there are too many blooming policemen about this business!” (just what we say) and the following day the whole of the employees struck work.

[From the Socialist Standard, June 1913.]

Cutlets. With S.P. Sauce. (1912)

From the June 1912 issue of the Socialist Standard

Home Rule looms large in that vital organ, the public eye. Whether the Bill will kill the Pope or whether the Germans will land at Belfast are questions that agitate the minds of patriotic Britishers. Of course, the Labour Party cannot be left out, and Mr. Ramsay MacDonald gave the Home Rule Bill his sanction and blessing. In view of this, the following extract from the “Labour Leader” of November 10th last, will not be out of place.

In an article entitled “Liberalism and Progress” the writer, Mr. H. Dubery, lets fall this brilliant gem :

“What is ‘the pathway of progress ‘from the Socialist standpoint’ ? ‘The test I bring to every measure introduced in the House of Commons,’ recently said one of our leaders, ‘is this. Will this Bill on the whole increase that share of national wealth and comfort that goes to the working class ? If it does that by even a fractional amount, I will support it. If it does not, then it is to me a non-essential.’

“Taking this statement as a test, let us apply it … to the Home Rule Bill. we shall see that when the smoke of battle has cleared and the horrible din has subsided, not one working man will be a whit the better off, nor will the nation be a step further along the true ‘pathway of progress.’ ”

Yet the Labour Party, whose organ is this self-same “Labour Leader,” support the Home Rule Bill. They are playing the same game of chasing the Will-o’-the-wisp, of leading the workers “up the garden.”

* * *

Mr. A. Henderson, M.P., the P S.A.-tin bethel-monger, speaking at a Brotherhood meeting on April 13th, remarked that Christianity had failed to arrest the masses. From the masters’ point of view it hasn’t : it still does its dirty work well. But one of the leading clerical lights, the Bishop of the Falkland Isles, thinks that its sphere is not large enough, and urges the necessity of a fund to extend the movement in South America.

In an appeal that is being widely circulated among the frauds of Christendom the Bishop says : “The Bishop of the Falkland Islands” Fund. For religious, educational, and medical work in Western South America, which must be carried out before the opening of the Panama Canal in 1913. The future success of British influence depends upon the answer to this appeal.”

The appeal has the support of Lord Northcliffe, the well-known Salvation Army field-officer, and from the accompanying explanation we gather the following extracts :

“The Chairman of the London Chamber of Commerce represents the business men of the capital of the Empire. He asked to be convinced as to the use of the £100,000 for which the Bishop asks. The case was put before him, and at a Mansion House meeting he said : ‘This is the finest commercial investment the traders of this country could make.'”

“The Archbishop of Canterbury writes : ‘I am impressed and interested by the Appeal which the Bishop of the Falkland Islands is now making, and earnestly hope that he may elicit a really adequate response from those who have financial and other interests in South America, and especially on its Western coastline. The conditions are unique, the possibilities are immense, and the Bishop, in addition to his personal gifts as a religious teacher, is eminently well qualified to arrange and control the work wisely. I very cordially wish him God-speed.'”

“The Archbishop of York writes : ‘The cause for which the Bishop of the Falkland Islands appeals is one which ought specially to commend itself to all who care for the welfare of our own people in the vast territory entrusted to his care. I trust that the very large number of persons in this country who have personal interests in that part of the world will be ready to acknowledge its claim.'”

And so Christianity continues, propped up by interested men, supported by the capitalist class as a means whereby they can keep the chains of wage-slavery bound more tightly around you. The position laid down in our pamphlet “Socialism and Religion” has yet to be shaken, and the worthy bishop, in his blindness, comes and amply substantiates that position. Christianity closely reflects modern capitalist interests. We are out to slay capitalism. Look to it that the end is speedily brought about.

* * *

Amidst the turmoil and strife of the last coal strike at least one idea was prominently heralded as the means of salvation for the working class (and let it be quietly known—for the master class). I refer to the “dark horse” known as Co-partnership.

To those who have freely imbibed at the fountain of Co-partnery the following document will serve as a kind of “digestive tablet.”

“SOUTH METROPOLITAN GAS CO.”

“TO ALL CO-PARTNERS.”

“We now know the cost of the coal strike to this Company, and it has been very heavy. A very big price has to be paid (the larger part going out of the country) for coal purchased abroad in substitution for that undelivered to us by reason of the unfortunate disagreement between the owners and men. But our obligations to our consumers could not be set aside at any cost. To have done so would have in some respects irretrievably damaged our business, and as a result seriously harmed the employees who are our partners in it.

“My object in issuing this statement is to urge that all Co-partners will try by special endeavour to replace the lost tens of thousands by zealous working, and scrupulous economy in the materials used in our undertaking. Much has been accomplished, more can be, to avoid waste either of Time or Stores, and I feel sure I shall not ask in vain for the help of all our employees in the very anxious time through which we are passing.

Charles Carpenter, Chairman

April 24th, 1912.”

There is Co-partnership !

Profits are shared,—oh ! yes, and the workman may get a problematical increase (although in comparison with the wealth produced he is poorer), but when it comes to losses, well, one class of Co-partners share that, and that class is called the Working Class, alias “the Great Unwashed.” In spite of the use of the plural (“our” and “we”), when losses are incurred you must “try by special endeavour to replace them by zealous working.”

Co-partnership is merely a narcotic for the working class, to imbue them with the idea that they have an interest in the business, and under its influence they are speeded up, made to economise in materials, and all the sooner driven onto the scrap-heap. No, Socialism is the only hope, and Co-partnership is only—a hope.

* * *

“The B.S.P. Babes” have been at it again. In spite of their frequent protestations of the similar nature of Liberal and Tory, they still play the game of voting “agen the Government.” The following is culled from “Justice” of May 25th, 1912 :

“At South Hackney the Liberals in their panic have rushed the election so as to prevent a three-cornered contest. In that, unfortunately, they have succeeded ; but we hope every Socialist and Labour elector in the division will vote Tory and so deal a blow at the present Government.”

Poor old B.S.P. ! Just as a burglar does not become honest by calling himself King George, so the S.D.P. has not become Socialist by changing its name. That work has still to be done, and we are the Party to do it.

* * *

After a week of revelry, of riotous living, of gay feasting, of nautical cake-walks, and of splashing saucy mermaids, the Sea-King has now returned from seeking his fleet. It is quite possible, nay, probable, judging by the newspaper reports, that he is now able to tell the difference between an aeroplane and a battleship.

* * *

Of interest to race-goers. Just as “White Star” did not come home in the “Two Thousand Guineas,” so the King of Denmark did not come home in the Monarchy Stakes. He was unknown to the police, which is strange for a Royal scion.

A. L. Cox

The Profit-Sharing Snare. Co-partnership Schemes Exposed. (1930)

From the October 1930 issue of the Socialist Standard

The economics of cheapness.

Great Britain is losing her hold over the world market. That means producing firms are finding it harder to compete successfully against producers abroad. Every scheme is being tried to regain lost trade and to increase the quantity of goods sold. Industry to-day is carried on for the profit of the owners, and more trade, therefore, means more profit.

The most effective way to capture markets is to sell cheaper than your rivals. How can goods be sold at a lower price? Modern industry answers—”Reduce the time taken to produce them.” That is how the modern cry of Rationalisation pays tribute to the economics of Karl Marx.

Marx showed that the average amount of time taken under prevailing conditions to produce an article determined its value. So in order to sell cheaper, the manufacturers to-day use every possible method to lessen the time necessary to produce their wares.

Piece-work rates, bonus systems and other profit-sharing-schemes are adopted to arouse the worker to greater effort; to produce quicker; and to save waste. This enables the employer to produce more cheaply, whilst the workers are told they will share in the increased profits.

The “Pace-maker” and his function.

The cotton trade to-day is in decline, and these speeding-up methods are being pushed in Lancashire to enable the employers to ensure their profits. The Manchester Guardian recently had an article suggesting piece-work and bonus systems as a remedy. The fixing of piece-work rates, however, we are told by the writer, is difficult, as it means getting “pace-makers,” or sloggers who can lead the rest by turning out more goods. The standards of price per piece can be fixed more profitably for the employers if really rapid workers are employed as “time setters” to cut down the time required to turn out each job. Thus the Taylor system in all its variations of efficiency is offered as a cure for “Lancashire ills.” Its adoption will certainly raise the employers’ profits, but will simply mean in practice that fewer workers are required to do the same amount of work. Any apparent increase in wages by sharing in the profits is only in actual practice a reduction of wages in relation to the increased amount of work performed. The employer’s share is that his profits are increased vastly. The worker is paid a fraction more than before for turning out a much larger product. The sole result is that the increased efforts of the workers reduce the “share” of the total product given back to the workers as wages. That is why prominent employers are so much in favour of these piece-work and profit sharing systems.

One feature of all these piece price and premium bonus ideas was noted by the Manchester Guardian writer; that is the policy of firms cutting down the piece rate once they find efficiency going up and adding to the workers’ wage. So almost as fast as the workers’ output is increased by slogging, the unit price comes down and the workers are back again to subsistence wages. Once the workers raise output it becomes the average standard for all to comply with in order to get the basic wage.

The Co-partnership fraud. 

Many leading employers have recently boomed another artful dodge to ensnare the workers into working in harmony with the employers. Co-partnership or shareholding by employees is the stale device which is being revived. The Economic League—that body of employers’ friends—issue many leaflets praising co-partnership as the way to social peace and workers’ prosperity.

One of the great examples of this scheme is the South Metropolitan Gas Works, who smashed their employees’ strike on the profit-sharing issue, and afterwards raised hours from 8 to 12 per day. This firm boasts that since “allowing” employees to own shares the efficiency has increased, the price of gas has fallen, and better still— profits have risen considerably. In this firm the profit-sharing scheme was made compulsory, so that all workers would take a “greater interest in their work.” It worked out in practice that fewer men were required to do the same amount of work and the tiny “share” of the workers in dividend at the end of the year proved that the owners had really shared in the added wages due to the workers for their increased efforts and output.

The workers get the "leavings."

Lord Leverhulme, of the Soap Trust, was a great believer in co-partnership. But on his death we found from the published will that he owned the entire two millions of ordinary shares himself. Not much co-partnership there ! And by “allowing” some workers to have special “employees’ shares,” receiving interest after the ordinary shareholders, Lord Leverhulme was able to pile up millions in profit. In his book on the “Six Hour Day,” he points out that he always insisted that the co-partner workers must share in the losses as well as profits. This policy was calculated to teach the workers the importance of helping the firm to make profits.

All co-partnership and similar schemes are put forward to kill any organised efforts by the workers to increase their share of the wealth produced. Under the spell of the “divi.” or bonus, the worker is to be enticed away from the struggle to push up his wages or in any way reduce the employers’ surplus.

The Co-partners get the sack.

Cadbury’s and Rowntree’s are examples of “good” firms with profit-sharing policies. Recent efforts on the part of these companies to hold or increase their trade led them to use more machinery to reduce the labour costs. A reduction of workers employed resulted, and Rowntree appealed through the press for employers to give his superseded men a job. After all the work and efforts of the employees in these firms working hard to produce profits they were replaced by machines ! The co-partners were out of work ! Do you need more evidence of the function of bonus systems and co-partnership ?

The fruits of profit sharing.

In the Ministry of Labour Gazette (July, 1930) appears a complete survey of all profit-sharing and co-partnership schemes operating during 1929. These schemes numbered 495, and were participated in by 260,000 employees out of 531,000 employed in these firms. The report tells us that “in all industries taken together nearly one half of the schemes started have come to an end.” We are also informed that “a considerable number of the schemes admit employees to participation in the profits only to the extent that they are able and willing to deposit savings with the firm or purchase shares.”

A famous firm practising co-partnership is the Eastman Kodak Co. Listen to Mr. George Eastman’s testimony of the profit­ able results to the firm :—

“In 1919 several thousand pounds’ worth of shares were distributed to our employees. One result was that after handing over to the workers one-third of my shares, the value of the remaining holdings soon climbed a third higher than the previous total. That was not the purpose in distributing the shares, but the result shows the business value of the act. Since the shares were distributed the market value has gone up over 150 per cent. Part of this increase in value unquestionably has been due to the wide distribution among workers and officials.”—(Co-partnership, Dec., 1927.)

The Chemical combine.

Sir Alfred Mond (now Lord Melchett) is one of the chief apostles of the co-partnership device. He boasted at the annual meeting of the Imperial Chemical Industries, 1929, that 53,000 employees held shares, totalling about 850,000 shares. (This is about 17 shares each.) They are allowed to buy ordinary shares at market prices less 2/6 per share, and preference shares at the fixed price of 21/6 each. He “trusts” his employees not to sell their shares. Why so many employees put their savings into “their firm’s” shares is easily understood, as it is thought to be a means of being kept on or possibly useful in promotion. How little the workers own in the mighty Imperial Chemical Industries can be seen when it is found that the capital of this combine is over 76 millions. The co-partners have no control over “their” jobs nor any control over the business. What are a few shares owned by each worker against the huge amount owned by such Directors of the firm as Lord Melchett, Lord Birkenhead, Lord Colwyn, Sir Max Muspratt, Henry Mond, Marquess of Reading, Lord Weir, etc. ?

Longer hours for co-partners.

How little Lord Melchett is interested in workers’ conditions can be seen by his efforts in Parliament to get a longer working day for miners. The Amalgamated Anthracite Collieries (owned by Imperial Chemicals) controls 12 coal concerns, and has paid huge dividends in recent years.

Who really owns most of the capital can be seen by its share-list, where dozens of shareholders own 10,000 shares and upwards each, and prominent holders like Guest, Keen & Nettlefolds own £395,000 in shares. Lady Buckland, the well-known miner, owns £395,000 in shares in company with two other aristocrats.

Is this an example of the widespread diffusion of capital that the Economic League and Mond refer to ?

How co-partnership rivets the employees to the firm which holds their “savings” can be seen from Mond’s speech at a co­ partnership luncheon :—

“What is the effect of making them shareholders? We saw some of it in the last General Strike. Not one workman in Brunner, Mond’s left his job ! while many were heard to observe that they did not intend to jeopardise their dividends at the dictates of any outside person. In the business with which I am connected we have been free from Labour disputes for fifty years.”

Lord Melchett is very reticent about the wages paid by his alkali works, mines and every other of the 50 concerns amalgamated into his trust. But the Chemical Workers’ Union are continually protesting’ against the “low” wages paid in that industry practically controlled by the combine.

The workmen co-partners have no control of the share market. Should they want to sell their shares just now what will they get? £1 ordinary shares have fallen from 45/- last year to 19/- to-day. And the 10/- deferred shares have fallen to 5/- each. (Observer, August 3rd, 1930).

The right "spirit" for slaves.

Perhaps there is no better indication of Lord Melchett’s policy than the following- :

“After all, there is no more competitive spirit than that displayed by the British people. If you put them into a football match they will kill themselves every Saturday afternoon for nothing. Why not introduce the same spirit into industry?”—(Co-partnership, Dec., 1927.)

This is from his speech at the same co-partnership luncheon. How tragically true ! that is the spirit of industry—killing themselves for nothing !

Some of the conditions of the Imperial Chemical’s co-partners’ scheme are interesting :

“The scheme is an investment one, and while no absolute restriction is placed upon the workers, they will not be expected to speculate with their shares. The directors reserve the right to refuse to allot further shares to a worker who does not enter into the right spirit of the scheme.

The maximum individual allotment will be such number of shares as can he purchased by an expenditure of a sum not exceeding 20 per cent. of the annual wages or salary of the employee. To this 20 per cent. an additional 1 per cent, for each year of service above five may be added.”—(Co-partnership, Dec., 1927.)

The conditions are, of course, laid down by the firm ! The worker must enter into “the right spirit,” and he must not buy (even if he could afford it) too many shares. Perhaps he might then give up working and, like the real “partners,” live upon profits !

The purpose behind Imperial Chemicals “profit sharing” can be gleaned from the following paragraph : —

“This departure from the normal method of dealing with manual workers is described in the current issue of the Imperial Chemical Industries Magazine as an “experiment,” the continuance of which must depend on its economic result. The creation of the Staff Grade will involve a heavy initial cost which must be balanced by compensating increase of efficiency.—(Co-partnership, Sept., 1928.)

Lion and lamb shall unite!

Another well-known “Co-partnership” firm is the Brush Electrical Engineering Co. The Chairman of that concern, speaking of the results of co-partnership in his firm, says : —

“The scheme also gives us confidence of being able to maintain a fairly satisfactory dividend on the share capital, and it enables us to satisfy our customers that good service deserves a fair and adequate, though not excessive, reward for the shareholders and the staff of workers, both mental and manual.”—(Co-partnership, Sep., 1928.)

The same employer, speaking at the annual meeting of his firm this year, explained some of his principles thus : —

1. Greater economy by elimination of waste.
2. Higher efficiency by elimination of inefficient machinery and methods.
3. Larger output to neutralise low prices by removal of Trade Union restrictions.”—(Co-partnership, June, 1930.)

The last principle is striking, in view of the fact that the supporters of the movement, as the above magazine shows, are prominent Labour leaders, like Citrine, Ben Turner, E. F. Wise, E. L. Poulton (General Secretary of Boot and Shoe Workers). This last leader spoke at the Co-partnership Conference, May 10th, this year, and he served up this slop :—

“If the co-partnership principles are properly adopted, we shall soon get out of the slough in which we find ourselves at the present time.”

The financial steam roller.

One prominent co-partner advocate is Angus Watson, of the Newcastle firm selling Skipper Sardines. His firm was recently bought out by the monster international trust, Unilever, Ltd. Angus Watson resigned as Director, and commented very bitterly on the effects of combination of firms and rationalisation. The worker who had played his part building up the firm’s assets was ruthlessly pushed out by machinery and the power of capital. What can copartnership do in face of the modern International Trust?

Edward Cadbury, the cocoa manufacturer, admits our indictment. Speaking at the Quaker Employers’ Conference :—

“He said they would all agree that the workman ought to have some voice in the management, but at present there was no way in which he could be given any effective control in large scale industry; stressing the words ‘effective control’.”—(Co-partnership, Sept., 1928.)

Reviewing the Life of Lord Leverhulme, by his son, the same paper says :—

“Lord Leverhulme’s ideas did not extend to giving any share of the control to the workers. In his particular case he did not see the reason, and perhaps there was not the demand.”

All the evidence we have produced shows that copartnership and profit-sharing schemes are merely another method of inducing the workers to continue a system in which the real control and ownership is in the hands of the employers and in which all the work must be carried on by the workers.

C.