The Future of England/Chapter 5
CHAPTER V
OUR INDUSTRIAL FUTURE
It seems, then, that since there are active movements among our working classes for the abrogation of the existing industrial system, it will be well to inspect that system in order to see, first, whether it will stand the test of time and the hostility of competing projects, and secondly, whether, in that event, it does not, at some points, need amendment in the future in order to make it more adequate and secure than it is to-day.
For such a task as this, we have at present certain advantages of observation. At the period when we started manufactures upon modern lines, all the industries, not of this country alone, but of the world, had been, up till then, hand industries. From about 1770 until about 1850, thanks to our new energies, and in spite of the terrible evils in our social system, we drew clearly ahead, having almost a monopoly in manufactures. During the thirty years after the latter date, the world was busy imitating us, using our capital to erect factories, and modelling their machinery and methods upon our own. It was, however, not till the early 'eighties that the public definitely learnt from the Report of the Royal Commission on Technical Instruction that foreign nations had outstripped us in technical knowledge, and in the arts and sciences as applied to commerce. During the succeeding generation up till our own hour, we have been regaining this ground. Accordingly, for full thirty years, our industry has developed under conditions of stress and rivalry which are sure to continue in the future, and which therefore have already exposed to view the fundamental facts of our position.
There is an essential factor in the economic situation of England making decidedly for instability and weakness, and explanatory of most of our past and present distresses. Our area is very limited; our soil is, on the whole, poor and unable to supply even a third of our food; our climate is northern, inclement, and incapable of producing the raw materials of our industries, much less the luxuries of civilisation; finally, our mineral resources in regard to such essentials of commerce as copper, tin, lead, zinc, gold, silver, and so forth, are slight or non-existent. To exercise no initial control over the production of these requisites, and to have to import them from far over sea, is a radical flaw in our situation, compromising in a measure the solidity of our whole industrial structure.
There is, however, another essential factor in our position which, to some degree, counteracts this grave default of Nature. In the extent and richness of our coalfields we are the most favoured country in Europe; the quality is good, the strata are ample and regular, and calculated, in spite of Sir William Ramsay, to last at any rate 500 years; and the richest basins are so close to the sea as to economise materially the cost of shipment. This is the leading item in our modern economic life. Such a colossal asset, combined with our store of iron ore, furnishes us with three priceless advantages: in a rigorous climate we obtain cheap fuel; our manufactures secure cheap power; while, not least, we are enabled to buy food and raw materials cheap. This last service of the three is performed as follows.
Of our total output of coal, on an average a quarter or somewhat less is exported, thus providing cargo for vessels outward bound. Were this not available, the bulk of the ships bringing to our shores corn, cotton, wool, wood, and so forth, would necessarily clear without cargo and in ballast; no outward freight would be earned by the shipowners who, in that case, to make both ends meet, would have to charge a much heavier freight on imported articles, thus increasing their cost very seriously to the consumer. Hence, through coal we procure the warmth, the food, and the materials vital to our existence.
Thus, on the whole, what Nature has done is to give us, in return for grave disadvantages, the opportunity and the power to be an important manufacturing people. It remains to see whether we duly avail ourselves of the gift so as to provide means for our population, and whether the edifice of our manufactures is framed as substantially to last into the future as the foundation is, on the whole, well laid.
The industrial framework built upon this basis of coal has been raised, and is maintained daily, by three converging and co-operating forces—the brains of our men of business, the skill of our artisans, and the energising power of our capital. Consider each briefly in isolation, and then survey the whole result.
The quality of our men of business can be most accurately measured by a reference to our foreign trade, because the organisation of that trade is clearly one of their special provinces, arid outside the function of the artisan. England, of all countries, must sell abroad largely, in order to procure in return those supplies of food and raw materials necessary for our existence, and of which we are internally bereft.
At the opening of this century it was thought that this foreign trade, so absolutely vital for us, was in danger of weakening materially in the future. Foreign tariffs were rising to a prohibitory pitch, it was said. And certainly, the closing decade of the nineteenth century witnessed a serious heightening of tariff walls, so that these fears were grounded on solid considerations.
The truth was, however, that in spite of the unique height of foreign tariffs, our men of business were to prove equal to the occasion. In 1900 our exports were £291,000,000, and they grew until they were £430,000,000 in 1910, an increase of 47 per cent in a single decade. Thus, in spite of tariffs of special severity, our men of business have shown themselves able to surmount them, and to solve what seemed an almost impossible problem.
But, tariffs apart, this is not all that they are doing to-day in this sphere.
A danger to foreign trade is that our exports might conceivably be limited to certain quarters, and might thus rest upon a frail and shifting foundation. Fortunately, however, this is not so, for our commerce is being built upon the prosperity of the whole world.
This can be proved by examining the direction of the £430,000,000 of our exports in 1910. These are now becoming so widely spread as to be sent to fifty countries, or thereabouts. Besides, only one country, India, receives more than 10 per cent of our total sales. Indeed, so well are they now apportioned that, with the exception of four countries that take between 9 and 5 per cent each, no one of the remaining countries takes more than 5 per cent. The outflow of our exports is thus becoming variously distributed and in that measure reliable. Such is one of the proofs to hand of the ability of our business men. It is the industrial activity of these individuals that makes the opportunities of England, and guarantees whatsoever prosperity we enjoy.
Next, as regards the competence of our artisans, London of itself answers, the greatest port and the greatest city in the world. Having no coal and no cheap iron, London, when material bulks large in manufacture, has a relatively weak economic hold. But all is compensated by her wonderful workmen. Thanks to them, she is the best finisher of manufactures, the best fitting shop and repairing shop ever known. Without a staple industry, or a dominant group of trades, exposed at every point to universal competition, she is still super-eminent in variety, as she turns the rare luxuries of yesterday into the universal necessaries of to-morrow, and constantly raises the standard of living for all the peoples of the globe.
To look at our artisans from another point, the author of Industrial Efficiency concludes that, judging from a close comparison of work done in a representative business in the north with that done elsewhere, "it takes eleven men in America to do the work of ten in England." The American flags, and the German lags, behind the Englishman.
But, in order to realise more comprehensively the capacity of our artisans, we must consider the industrial strength of the nation as a whole.
It may be measured in the first place, and mainly, by the degree in which it can provide warmth to its citizens. This can best be verified by opening the weekly budgets of the people. These will show that we spend the overwhelming proportion of our outlay upon procuring warmth in the fourfold shape of food, fuel, clothes, and houses.
These necessaries are supplied in combination by agriculture, mining, the textile and clothing trades, and the building trade, the collective importance of which, in the national economy, can thus be understood.
Industrial strength may be measured, secondly, by the degree in which it facilitates transport. Transport is provided by the railway, the shipping, and the engineering trades, the latter co-operating with the first two. To warm and to transport is the main function of human industry.
It must at once be evident how distinguished, and even how leading a part England plays in these seven chief departments of material life. In five or six of them our artisans will be generally admitted to lead the world.
On the third great factor in our industrial strength, our capital, there is no need to dwell. As already made clear, England lacks food-supply, raw materials, and metals. Her capital is therefore ever necessarily directed to developing and mining these products abroad, and to bringing them by rail and ship to our shores. Every one recognises the unique energy and boldness with which for nearly a century our capital has been worked on these lines.
So far, we have considered coal, the basis upon which our industrial structure is built, and next, the three forces—our business men, our artisans, and our capital—which combine to rear it. But what is it, this industrial organisation, actually in itself?
London, again, guides us down all the multiplicity of her streets to an initial answer. For that city is the world centre of the small method of production: tiny industries flourish there in any number, and will continue to do so. They are bred by hope, the confidence of the small man that he can fight his own hand and can be sergeant instead of private in the grand army of life. And so we trace in London, as in all other of our cities, an infinity of retail shops, of personal businesses, of minnows living in the whirlpool as best they can, of small parties foraging against poverty, of vedettes feeling the way for the Napoleonic hosts of commerce, until we climb to the room of the solitary worker, who has no master but the morrow for which he has not provided, and no subordinate but the yesterday which he has won from death.
One main division of our industrial structure is, therefore, the small business. But if we apply to this department the ideas of socialism and syndicalism, these have no meaning and are of no use here, while even trade unionism can find poor footing in this broken ground.
To propose that these businesses with their ups and downs of fortune should be socialised and acquired by the State is obviously impracticable. To advocate that the workers themselves should own them is to suggest what in a large measure is done already.
Turn we now from this great division of industry to that at the other end of the scale, joint stock enterprise. Between these two lie, no doubt, an indeterminate number of concerns partaking of the character of both the others, but these concerns can be ignored for the present purpose, more especially as the two mentioned together cover much of the field. The difference between the two divisions is that, whereas in the first the three elements, brains, labour, and capital are mostly amalgamated, in the second, brains, labour, and capital are highly differentiated. That is to say, our citizens supply the share capital from their savings, our men of affairs furnish the brain power and management, while our clerks or artisans do the clerical or manual work.
The socialist proposal would be that the State should transfer to itself the share capital, and that the men of business, as well as the clerks or artisans, should become civil servants. But, in truth, there are insuperable difficulties in the way. For, as it is, all these industries exist under the severest conditions of rivalry. If they are to pass into the hand of one owner, the State, that rivalry and competition will either cease, or the reverse; if the former, then the chief stimulus of our industrial energy will have been eliminated; if the latter, then all the intense forces of struggle and contention now dissipated among numberless industries, but existing throughout the commonwealth, will be concentrated within the circuit of one central administration and will explode it.
The alternative proposal is that these industries are to be appropriated by the workers themselves, and that wages are to be abolished. But that would be incompatible with England's chief want—the application of an ever wider intelligence to industry. In these days the highest knowledge and the utmost foresight, and the most vigorous mental training, and the boldest initiative are needed increasingly among our commercial organisers in order to meet hostile attack. Our artisans, excellent and eminent as they are in their own line, are not as yet in the line of such qualities.
Putting aside, then, such schemes, let us establish the proposition that our industrial system, though of high excellence, needs some amendments to enable it to hold good in the coming time.
There are six specific adjustments required in that system, and I shall proceed to recite what I believe them to be.
The first of these has reference to the relative want of creative capacity in our industries.
If we look even at the strongest and best of them, this want can be observed.
For instance, the cotton trade, which furnishes one-third of our entire export of manufactured goods, is without any possibility of doubt the most highly organised and the most efficient of any that the world has ever seen. Just as in one of its modern looms there are 2000 pieces, and will be more, so in all the branches of its human membership an incessant specialisation of ability, and an inconceivably minute adjustment to new problems is ever in process. The proof is not merely that in fifty years Lancashire has doubled her population and her machinery, besides adding vastly to the latter's efficiency and speed, but that, though she has more than a third of the spindles of the world, they are so well managed and produce such fine work as to consume, in spite of their superior speed, only a fifth of the world's cotton crop. We can do, in fact, a great deal more than others with a bale of cotton.
It might be thought, then, that we have here an Eldorado, a unique industry pouring wealth into our people's pockets. Nevertheless, such a supposition would be somewhat beside the mark.
This fact is worth establishing, and can be established by three different proofs. Firstly, the average return on the capital invested in the cotton industry is moderate, and presents a narrow margin between prosperity and adversity, the net profit not exceeding an average of 5 per cent. A slight change in conditions, and capital would evidently find it more remunerative to take flight elsewhere. A second proof is furnished by the recent census of production, which shows that the net annual output, that is the gross output less the cost of the materials brought into Lancashire, is £47,000,000. Since there are about 570,000 persons engaged in this industry, the net output per individual is £82 a year. From this sum must be deducted rents, rates, taxes, depreciation, and so forth, before the profits, salaries, and wages are arrived at. Evidently this leaves a very modest fund of not much more than £50 a year per individual. Thirdly, it is stated in the Board of Trade return that the present average weekly wage of all cotton operatives in Lancashire is not more than about a pound a week, a figure which corresponds with the above. Of course, as this includes the receipts of both sexes of all ages, this must not be considered unduly low, and indeed the minimum for Lancashire people may be generally said to be a living wage.
The question, however, arises inevitably why the most splendid of businesses is so comparatively restricted in yield.
One real secret of Lancashire's relative economic weakness is that she sells a great proportion of her product to orientals who are extremely poor, and thus are unable to give much for their cotton goods. If we put up our prices, they cannot pay and do not buy. The other scarcely less cogent reason militating against Lancashire is that she has as yet practically no command over the raw material. In the last forty years this has fluctuated in price between threepence and tenpence a pound, thus inflicting serious evils on her trade. For instance, owing to a short crop in 1909, Lancashire had to pay subsequently 30 per cent more for the raw cotton imported, notwithstanding a decline of 10 per cent in the quality received. An apt illustration this of the characteristic defect in our national position. That our profits in cotton are comparatively low is therefore due partly to our difficulties in buying the raw material, and in selling the finished product at an adequate pricelevel to the impoverished East. Add to this that over twenty foreign countries now manufacture cotton, thus preventing us from attempting, in any case, to raise our charges against the consumer. Even Lancashire, then, as a whole, can expect, on present lines, no more than a modest remuneration, earned at the cost of severe and ceaseless effort.
If we turn from the most salient of our organised, to the most important of our unorganised, industries, agriculture, there is the same story to be told.
Our agriculture would appear at first sight to have several advantages over our cotton trade. The latter has to draw its raw materials from distant continents, and thus depends permanently, or at least will do so for many years to come, on the foreign grower; whereas agriculture has its raw material, the soil, under its feet. Then again, whereas Lancashire sells the main proportion of its output abroad to consumers of the poorest class, or else must struggle over the walls of high tariffs, agriculture has no such difficulties to encounter in any shape or form. For our farmers have at their doors an insatiable and boundless market, ever ready to absorb the best produce obtainable. Such are the palpable advantages of this occupation; and there are several others not much less considerable.
If our soil and climate are inferior in many respects, we enjoy, nevertheless, one unique excellence. Our stock is everywhere recognised as of the most serviceable and most valued strain. For instance, following on the heels of the fine-woolled Spanish merino, the English long-woolled sheep of the Leicester and Lincoln breeds have built up the most important flocks of the earth.
Nor do these factors by any means exhaust the catalogue of our agricultural advantages. Just as the Lancashire mill can do wonders with cotton, so the English farmer grows the best crops which the soil, such as it is, and his science, such as it is, can supply. As the operatives of Burnley and Oldham are unsurpassed in efficiency, so, in the Far West of Canada and in distant Tasmania alike, I have heard it acknowledged that the English agricultural labourer is the most vigorous, the most useful, and the most trustworthy of men.
Here again, as with cotton, it might be thought that we possess an industry of rare economic strength, able to supply wealth, at any rate in a modest degree, to the rural community. Yet the history of our agriculture during the last half-century is rife with tragic disaster to all the parties interested, and teems with the histories of ruined men.
Those, however, through whose eyes we should do well to look at the agriculture of this country, are not so much the landlords, or even the farmers, both of whom may have other resources to assist them in a crisis, as the labourers. For these latter are not only, of course, so far more numerous, but upon them falls the heat and burden, and if their calling fail them they must be sucked into the slum and the alley, being seen no more of Merry England.
The money wages of the agricultural labourer of England average 14s. 6d. a week. His extra earnings, and the value of his allowances in kind, are calculated to average 3s. a week, so that altogether he earns 17s. 6d. a week, though the men who tend the animals obtain a trifle more. That is not very brilliant.
To look at the labourer not as he is, but as he tends to be, it will appear that one current of events is carrying him to a better, and another to a worse, fortune.
As regards the first, it seems that the causes which produced the rural exodus have somewhat spent their force. That exodus is generally supposed to have been due to the great fall of prices about 1880 caused by the opening up of the American wheatfields, and the cheapening of transport, which by forcing farmers to give up arable, and adopt labour-saving machinery, rendered a vast number of labourers superfluous, and originated their migration into the towns. That is not quite accurate. The most modern research has shown that from 1860 to 1880, when times were good and farming boomed, the labourers were passing into the towns at a faster rate and in larger numbers than at any period since. The true cause of their departure was that their wages were at that date so low that, in the face of the high prices then ruling, they had little option but to seek the better remuneration of industry. From 1880 onwards, however, the impulse came rather from the side of the farmer who, confronted with a growing scarcity of labour as well as a fall in wheat, turned arable into grass and sought to replace labour by machinery. But, whatever the exact sequence of events, the fact remains that agriculture, theoretically the most stable of occupations, and the most obviously necessary in a country which does not attempt even remotely to produce enough food for itself, was for many years a rude and cruel stepmother.
But now this evil is lessening in some degree. The scarcity of labour has resulted in an upward tendency for wages; and as so much arable has been converted into pasture, more labourers obtain the somewhat higher wages got from tending the stock of the farm. Besides, by private goodwill and by public statute worthy efforts are being made to forbid the absolute divorce of the labourer from the soil of his fathers, so that gardens, allotments, and small holdings form the threefold stage of progress presented to his wondering or incurious eyes. Credit, the ligature of business and the lever of energy, is to be extended to him, and co-operation seeks to reach a friendly hand.
As against this, we live in an age of rising prices, and since the commencement of this century, and still more since 1896, values of food have increased seriously, not a pleasant thing for those wage-earners who spend over half of their money in that way. Perhaps, on the whole, there are reasons for thinking that the labourer's condition creeps slowly upward as compared with days gone by.
England, then, on the whole, is not only furnished by nature for the commercial struggle, but her people have raised upon this foundation an organism of industry unsurpassed in the world, and destined, assuredly, in spite of the fierce storms of competition, for a long and famous life. That is one aspect of the industrial future as it is opening before our eyes. But the other aspect of this future is disappointingly different. In spite of the mercy of nature, of all our triumphant organisation, and of all these human energies at full stretch, the hard and stern fact remains that the result is not what we might expect. Even our best industries are not specially satisfactory, measured by the only true test, the wealth drawn therefrom by the mass of those engaged in them.
So far, therefore, it seems as if we must admit that our industrialism is likely to miss its central purpose, and that the pursuit by the people of reasonable wealth is more or less impracticable. For how can we achieve more than we achieve already, outdoing our own ascendency and outvying ourselves?
Nevertheless, it is certain that all this that looks impossible will be accomplished, that this barrier purporting to bar our progress is but a mist, that we are as yet on the mere verge and fringe of our industrial resources, and that the future will multiply infinitely our commercial strength. Science says so. For science views our boasted progress in production as the mere gropings of a standstill empiricism, and pours contempt on the archaism of our primitive inventions, on the crude wastefulness of our processes, and on the ignorance of any despair.
In order to estimate the progress that industry will achieve in the sphere of production during the coming time, it must be remembered that, if industry is the action of man upon matter, modern science has only within the last few years begun to account for what matter is. The advance has begun in full earnest. The new discoveries in physics have, in our own hour, stimulated science as much as the Renaissance stimulated literature, and it is evident that the knowledge of to-day is but fractional compared with what will accrue to-morrow. Augebitur scientia. Borne on the advancing crest of the wave of discovery, industry will hold right on.
If we are to understand something of the degree in which, as the century proceeds, science will have enlarged its knowledge of matter, we have only to glance backward to its views of matter at the close of the eighteenth century, and compare them with the views which it entertains now. A man of science, asked at the earlier date as to the constitution of things, would have answered with confidence that there were all sorts of ponderable matter scattered through space, but all retaining their mass unchanged through every metamorphosis and all exercising action at a distance. Among these masses would move the two electrical fluids, and the corpuscular emanations known as light. Further, he would have described matter as possessed of primary qualities, such as shape and mass, and of secondary qualities, such as warmth and colour. Such, at the close of the eighteenth century, was the tenure on truth of the scientific man.
If a similar expert were to-day confronted with a similar question he would ridicule and reject out of hand every one of the above propositions. Proceeding to his own views he would declare his belief that matter is electricity. He would resolve matter into elementary atoms, these again into sub-atoms or monads, which last he would show to be not electrified atoms, but electricity itself. Asked further to define electricity, he would submit that it is but a knot, a kink, a convolution of that universal and primordial ether which itself constitutes the all.
Questioned more closely as to his view of the particular forces which count most in the scheme of the universe thus constituted, he would put aside at once chemical affinity and cohesion, or the gravitation which shapes stars and suns, or heat on which organic life depends. All these he would class as the paltry residual effects, the by-products, the obiter dicta of those electrical powers so inconceivably potent, so unimaginably prodigious, lying stored and balanced, or moving with the speed of light, within the molecules themselves. Thus there are no such things as units of matter; there are only units of electricity. Matter does not exist, or, if that be too strange a proposition, then matter, he would say, is no other than a collection of negative and positive units of electricity, and the properties which differentiate one kind of matter from another originate in the electrical forces exerted by the positive and negative units grouped together in things.
But, if this be so, then, to come back to earth, the affair of human industry is, for one thing, to utilise, however infinitesimally, these boundless electrical resources, and to harness them with precaution to its own service. It scarcely pretends to do so at present on any general scale, or on anything like scientific lines. For instance, the most obviously available form of the energy of matter is the heat of the sun. On the electro-magnetic theory of light, now universally accepted, the energy streaming to the earth from the sun travels through the ether on electric waves, and the heat has proved capable of being measured on the basis of horse-power per acre. As the most eminent of our physicists has pointed out, our engineers have not yet succeeded in utilising this supply of power, but science has not the slightest doubt that they will ultimately manage to do so.
At present it is the electrical energy of the sun stored up in our coal that does our work for us. Even here, however, science condemns our existing methods, root and branch, as absurdly prodigal of human labour, and as incredibly inefficient.
By our present procedure we apply effectively, as the president of the Institution of Electrical Engineers has recently pointed out, much less than 10 per cent of the energy in the coal consumed. Assuredly, the total waste of more than 90 per cent of the value of our coal in the process of conversion is an evil of magnitude. Moreover, there is a further loss, involved in our present habits of using coal, only second in importance to the above, when we dissipate, as we now do, nearly the whole of the valuable by-products contained in the coal, consisting principally of fixed nitrogen. For our best hope of eventually supplying ourselves with food-stuffs lies partly in the application of electricity, and partly in the use of those fertilisers of which fixed nitrogen is the base.
It is pointed out authoritatively that, to begin with, and even with our present knowledge, we should be capable of retaining in the form of electricity 25 per cent of the energy in the coal. That is to say, where we now burn 150 million tons, we should use at most 60 million tons. Coal, converted at many centres into electricity, would be supplied in the form of current at, say, ⅛d. per Board of Trade unit. With cheap current available, imagine the growth of electro-chemical processes now in their infancy, the application of this force to all our industries, to all our domestic arrangements, to all our transportation, and to all our agriculture, which latter would be further reinforced by fertilisation. These are speculations, it may be said. But the speculations of to-day are the statistics of to-morrow.
Yet the truest and widest ground for confidence in the coming expansion of our productive capabilities is to be found in man himself. He has progressed so slowly hitherto because evolution has put in the forefront of his nature the wrong faculties for exact research and discovery. His senses, forged in primeval epochs, and the crude fabric of geologic time, came to birth ages before science, thus being utterly out of date for her present purposes. Therefore, the practical man must follow ever more closely and more humbly and more hopefully at her heels; and when she tells him that she will lead him to vaster power than he has dreamed of, and to more knowledge than the whole that he has now in store, though she be herself but a child on the mere margin of the infinite, and though the mathematics of her wisdom grow not in a converging, but in an ever diverging series, he must believe.
This, then, is the first of the six remedies in question. The second of them lies in quite a different direction. At present, if supply is not as efficient in creative power as it will be, industrial demand is also weak.
Demand, in the modern business world, tends to fluctuate rapidly in detail. The reason of this is that man's requirements are increasingly regulated not by his body but by his mind, not by his wants but by his imagination. The human stomach is speedily satisfied, the mind, never, being infinitely progressive and incalculably various in its desires. This constant shifting of requisition evidently breeds commercial instability.
But demand tends to fluctuate not only thus in detail, but, what is far more important, as a whole and bodily. Ever since the closing years of the eighteenth century, economists have noticed that our trade regularly oscillates in periodic cycles of good and bad times, these being usually reckoned at ten or eleven years. The tide of activity, then, pulses by a general ebb and flow, which dominates the whole economic life of the nation, and enables the history of its collective business to be mapped out into eras of progress and stagnation. It has been further ascertained recently that corresponding cycles of a similar term occur in the case of other peoples, such as France or Germany.
This is an evil of weight, though we must not exaggerate its scope. These fluctuations are even arguably a good; they are the obverse aspect of improvement, the shadow side of progress. For, as trade contracts, the weakest factories and the most obsolete methods go under, and thus the next expansion starts from a higher level of efficiency. By this rude play trade advances, and through the crest of prosperity and the trough of depression commerce makes head.
Considered, however, from the platform of the individual artisan, these movements are serious enough. The worker cannot wait. He lives by selling his labour, and he must sell it now. Viewed through the eyes of the working classes these fluctuations mean that something like two hundred thousand skilled men occasionally find themselves, through no fault of their own, without work or wages, while, simultaneously, this evil spreads in widening circles through the grades of unskilled and general labourers. Insurance is well enough, but has to be paid for, and cannot pretend to cut at the root of the problem, any more than a life policy sets forth to avert death.
The principal suggestion hitherto made is to regularise the internal demand for labour. For instance, national and local authorities are estimated to spend 150 millions sterling annually on works and services. This immense outlay could be scientifically adjusted so as to counteract the ebb of private industry. Such a change, it is said, would involve no expenditure save forethought, and would be a preventive instead of a palliative. Distress would not be relieved but obviated, and there would be no artificial installation of those useless works which are the targets for the universal anathemas of economists of every school and of every age.
Yet this and other similar suggestions obviously do not penetrate to the root and core of the disease. The fundamental evil is not so much that demand is intermittent, as that its whole power and intensity are on a relatively low scale. The strengthening of demand is the genuine cure. We are at the threshold of this fundamental reformation, but the future of England will see us entering fully upon it.
There are two main expedients by which this country will eventually cure the weakness of demand. Although, as already pointed out, for nearly a hundred years our capital has gone abroad to build up markets, yet, in fact, from 1890 up to 1903 at any rate, it must be said that, for several reasons, our efforts in this direction were comparatively mediocre and unsatisfactory. For instance, we were devoting a relatively small amount of capital to railway construction in the colonies, in India, and foreign countries, or to the development of the agricultural resources of those countries. Since then, however, we have entered upon those undertakings with greater activity. The best authority calculates that, at the present date, our investments oversea are divided equally between the Empire and foreign countries. Of the total thus put abroad 60 per cent is in railways, while the remaining 40 per cent goes to produce food, minerals, and materials. By this means we multiply the very things necessary to our existence, and provide the means of conveying them here, on the one hand, while, on the other, we create communities able and willing to take our goods. Thus only does the weary Titan live. Thus only, in the increasing prosperity of others, England will seek and find her own.
A further method available for the strengthening of demand is imperial co-operation. The Empire, it is true, is not our best customer, in the sense that, in 1910, for instance, foreign countries took 65·8 per cent of our exports as compared with 34·2 per cent taken by our Empire. Besides, it is easy to see that our self-governing Dominions, peopled by the same energetic race as ourselves, aim at becoming some of our most redoubtable competitors.
Nevertheless, if we consider the origin and history and meaning of the Empire, we must suppose that one of the results of its existence must be, in the purely business sphere, to strengthen demand. After all, that is really why we created it. On the loss of the United States we felt it vital, in face of the general animus of Europe, to build another Empire in the place of the one which we had forfeited. Our precise motive was not sheer desire for territory, a sentiment never entertained by any cabinet, and by scarcely any of our statesmen. Our real motive was the fear that, once a foreign rival occupied a given territory, our trade would be hampered, our traders handicapped, and the demand for our goods limited. This has been the inward impulse which has forced such immense annexations upon a series of unwilling governments. Primarily, we formed the Empire as an insurance of our business. The Empire, in this practical sense, is demand.
Hitherto, however, modern statesmen have experienced some disappointment in this regard. Though we have burdened ourselves with an enormous debt incurred in the general interests of the Empire; though the hardships and poverty of our people have been seriously aggravated by the financial weight of armaments undertaken partly on the Empire's behalf; though we have given its occupants a free market; though the aggregate of our capital invested in the Colonies and India is great; though we have lent the Colonies and India these sums at a rate of interest at least 1 per cent below that which they could have obtained from foreign countries; yet, practically, we cannot feel as yet that our Dominions have erred on the side of generosity towards us in business. In the memorable words of Mr. Chamberlain: "We think that it is time that our children should assist us. … The Colonies are rich and powerful. … The United Kingdom is a mere speck in the Northern Sea. … There is a naval and military expenditure per head of the population of the United Kingdom of 29s. 3d. per annum; in Canada the same items involve an expenditure of only 2s. per head. No one will pretend that this is a fair distribution of the burdens of Empire."
But our Empire, after all, is to an overwhelming degree composed of the dark races. These have never known peace and comfort and prosperity until our coming, but are learning ever more keenly to appreciate and to require those advantages. To strengthen the concrete aspirations, to fortify the bodily desires, to elevate the standard of living of those nations entrusted to us, this is, in its material aspect, the imperial office. Hitherto we have been mainly intent upon conferring on them the boon of settled government. Their demand for the products of our civilisation will be the result and our reward.
Thus, then, it seems clear that, both as regards productive capacity and power to sell her output, England, in spite of inevitable reactions, will gather strength in the future. As it is, her industrial revolution is only midway, her conquest of Nature merely opened, the demand of the world for her products but begun.
Nevertheless, beyond these two stages of future progress, several others may be discerned.
It has been pointed out that an underlying cause of the troubles witnessed in the summer of 1911 was the condition of casual labour. No form of labour is so apt to become demoralised, or is more dangerous when thus disorganised. England has only just awakened to this evil. Statesmen, by means of Labour Exchanges and so forth, men of business, by schemes for regularising work, are beginning to tackle decasualisation.
For instance, the outburst in its initial stage was worst at Liverpool. Here is what is already stated authoritatively with regard to the effect that the strike will have on the economic structure of the port. "A very real determination exists among all the enlightened and thoughtful shipowners to put an end to the conditions of labour which produce the hooligan and the wastrel. As at other ports the dock labour is casual. A scheme is in preparation by which regular men shall be increased as far as possible, and the fringe of casuals which remains shall have their work dovetailed, in so far as conditions allow." It is added that if this is carried out, the scheme may change the curse of the strike into a blessing. And there are other schemes in preparation throughout the country, calculated to mitigate, at least, one of the most potent and most urgent evils that the country has to face, an evil so deep as even in the long run to menace it.
A fourth readjustment of our industrial system, to be brought about by mutual goodwill and better understanding, is necessary in view of the serious dislocation, recently so apparent, that has been widening between capital on the one hand, and those classes of labour above the casual grades, on the other. Those classes have, of course, felt the rise of prices too. But beyond this they have had specific, but perfectly curable, causes for unrest, the remedy for which lies in oiling, not in scrapping, existing machinery.
The first of these causes has been the vigorous effort made in recent years by English capital to improve its industrial organisation, so as to be not merely abreast of the world but ahead of it.
For instance, as a member of the recent Committee appointed by the Board of Trade to investigate and reorganise the published accounts of our railways, I have realised the extent to which, since 1902, our railways have speeded up their methods of handling traffic, a process which has necessitated stricter supervision of the men and insistence on better working. Hence active discontent.
Another cause of unrest is the recent severe fluctuation in industry caused by the South African War, succeeded by the American, or rather the world-wide, crisis of 1907.
For example, shipping, after some few years of most acute depression, became unusually brisk and profitable in 1911. Now that prices were higher, the seamen and firemen expected more. It is true that during the last fifteen years their wages had risen by about 6 per cent, but this was not much by comparison with greater advances in other trades, and was also wiped out by higher prices. On the side of the owners was the Shipping Federation, one of the most powerful organisations of employers, which, in its eagerness to make up for lost time, unwisely ignored the claims of the Sailors' and Firemen's Union. Hence the strike; whereby to the general surprise a weak union won advanced rates of wages in a month at all the chief ports of the kingdom.
Still another reason for recent discontent among these grades of labour is traceable to their own want of organisation, or to their choice of those who lead them wrong.
For instance, in the woollen and worsted industry of South Yorkshire the operatives have never displayed the ability of their Lancashire brethren of the cotton trade in organising themselves into trade unions. This is borne out by the low scale of wages which the former have obtained even in very good times. The Board of Trade return shows that both these industries are worked by women in a large majority; but whereas the Lancashire woman gets 18s. 8d. a week, her woollen and worsted sister receives only 13s. 10d. But a deeper root of mischief is that the workers take so little continuous interest in their trade unions that they fall under those who have other fish to fry, and whose interests often diverge widely from those of labour itself. The cure of these several evils is administrative, not revolutionary.
There is a fifth remedy, applicable to those who, in spite of the first four, incidentally fall out for miscellaneous reasons from the ranks of industry. England, as already pointed out, since 1842, has tried many specifics for her internal state, yet still the success of the industrial revolution is very far admittedly, and in spite of four hundred optimistic prophets, Ramoth-Gilead has not been won.
In these circumstances, the nation is coming to the conclusion that, having embarked on the most complex of enterprises, the cure of a people, public policy has proceeded hitherto with a serious want of plan, with wide fluctuations of purpose, and without any very precise goal. For, tossed by many doctrines, we have favoured individualism at one moment, and socialism at the next, or both together; individualism, with its apparent hypothesis that the State should do less than it ought, and socialism, with its theory that it should do more than it can.
Accordingly, another policy for to-morrow is upon us, fills the air, and has the future with it. If individualism, it is said, can never remedy those evils which itself has allowed to grow, and if socialism, on the other, which we have pursued for a generation, has failed to save us, between these two culs-de-sac runs conceivably a middle way. In plain terms, the State is definitely to see to it that each of its subjects attains to a minimum, whether in wages, or in medicine, or in housing, or in insurance, or in education, or in leisure, or in employment, or in military training, or in food. Beyond that minimum, freedom for each on the upward way. As individualism, it seems, ignores the individual, and socialism swamps him, we are to forget these shibboleths, and are to stow these nineteenth-century antiquities in the lumberroom. Thus in future we are to employ the energies of the State in creating what for want of a better term may be called the Minimum Man. Each swimmer in the maelstrom of life is to be buoyed up partly. The milk of human kindness is to be on tap at every door. There is to be a Plimsoll line of citizenship.
There is a sixth development which the future will witness. Looking abroad over the world, will strikes, disputes, risings, lock-outs and the guerilla warfare of labour and capital, be rife as ever in the immediate future before us? Yes, unfortunately. Why?
One sufficient reason among others is that throughout the world a change, purely economic and of great power, is in silent operation. It is the rise of prices.
Various economists have attributed this rise to various causes. Some point to the recent destruction of capital in the South African, Spanish-American and Russo-Japanese wars; some to the relative unwillingness of this country to invest abroad until recent years; some to the rise of wages and the increased cost of production; some to the heightened standards of comfort and of consumption; some to the alarms which have made credit shy of enterprise. But there is one cause deeper than these. The fact is that since 1896, or thereabouts, there has been in process a definite alteration in the standard of value, and this is a main reason why prices push upward.
The reason of this change is definite. The output of gold, which is the standard of value, has increased rapidly in recent years up to an annual total of nearly 100 millions sterling today; and, altogether, the entire production of it in the first decade of this century has been over £750,000,000 sterling. Taking the holdings of gold in the banks and treasuries of twenty-eight of the most important commercial countries, it will be found that about half this great output has passed into their keeping, the rest circulating outside them, in currency or in the arts.
Many experts have argued that this vast accumulation of the precious metal can have no effect on prices, because in modern business any relationship between gold and commodities is wholly cut off by the intervention of credit. But to argue thus is to confound the medium of exchange, which nowadays is credit mainly, with the measure of value, gold. Putting this objection then aside, it is plain that an enormous addition to the material constituting the standard of value must depreciate that standard, or, in other words, must raise prices in the long run.
But, if so, then evidently to all those who have fixed incomes or wages this is of serious concern. It means that the purchasing power of their wages is falling, and that they are receiving their dues in a depreciating currency. Of currency the artisan knows little or nothing, but assuredly he feels his loss, sees trade active and himself poor, and inevitably agitates for a readjustment. And this is happening in the Far East as well as in the Far West; in the tropics, as I have had experience, as well as in the United States, and, of course, in England.
This readjustment, like all such, is bound to be a long, tedious, and harassing process, chequered by many outbursts and many disasters. This is one cause that has accentuated the antagonisms of labour and capital to such an acute and alarming point.
In mitigation of these evils our most practical men are busy creating a structure of mutual understanding, of conciliation, of arbitration, and of constitutional practice wherein we shall one day excel the world. But to-day and in the early future we must all allow that we have to encounter so many backward fluctuations, and dire disappointments, and breaches of agreement, and utter failures that we must fall back upon some other hope and remedy.
We have all listened so long to eulogies of co-operation and profit-sharing as not to believe much in them, though, as a matter of fact, the sliding scale of wages in use in some important trades is itself profit-sharing in a certain sense. But the only final cure for the war of labour and capital is that labour should own some actual share in its own industries. A Lancashire authority, writing in 1887, foretold the day when the operatives in the cotton industry would possess a great portion of their mills, and already the better paid of them have large sums so invested. Similarly with our land. Here, too, and elsewhere, the best hope is that the savings of the people should be directed to investment in their own businesses. We should hear little in those days of the nationalisation by the State of industries which will be partly owned or controlled by the people themselves. The State is the name for every one else under an alias. Rather than vest their industries in the State, our artisans will prefer to vest their industries in themselves as shareholders.
Then would be, then will be, liberated a commercial energy calculated to confound our rivals and to amaze the world. Then those who have hitherto wasted their strength in the civil wars of business will join ranks to score triumphs such as we have never known. The army of industry will march not as conscripts, but as volunteers. In that day the last word of the industrial revolution will have been uttered. Nature will have surrendered to her insurgent son.
Therefore, behind the deceiving sunshine of the afternoon which, streaming over London, should have bared the abysses of poverty, instead of flattering with false visions of wealth, there seemed good hope still. We are mere neophytes, after all, in industry. There is a reasonable abundance in store for us, and the future will show the way to it. The gates of poverty will not prevail against us. We shall individualise, rather than generalise, possession, and, by widening what men have, shall widen men.
And then the mind turned from this theme of prosperity to wider hopes, and higher aims, and better destinies.