COMMON SENSE
AND LABOUR
BY
SAMUEL CROWTHER
GARDEN CITY NEW YORK
DOUBLEDAY, PAGE & COMPANY
1920
COPYRIGHT, 1920. BT
DOUBLEDAY, PAGE * COMPANY
ALL RIGHTS RESERVED, INCLUDING THAT OF
TRANSLATION INTO FOREIGN LANGUAGES,
INCLUDING THE SCANDINAVIAN
COPYRIGHT, 1919, BT A. W. SHAW COMPANY
CONTENTS
CHAPTER PAGE
I. THE FUNDAMENTAL CAUSES OF LABOUR
UNREST 3
II. THE RELATION BETWEEN THE EMPLOYER
AND THE EMPLOYED 21
III. THE WORKER AND His WAGE .... 50
IV. WAGES AND PROFIT-SHARING DELUSIONS . 77
V. THE FETISH OF INDUSTRIAL DEMOCRACY . Ill
VI. WHEN THEY GET TOGETHER .... 136
VII . THE ECONOMIC TRUTHS OF WORK . . . 171
VIII . THE MAN AND THE MACHINE .... 189
IX. THE METHODS AND POLICIES OP BRITISH
LABOUR 219
COMMON SENSE AND LABOUR
CHAPTER ONE*
THE FUNDAMENTAL CAUSES OF LABOUR UNREST
A LARGE employer who has never had any difficul-
ties of moment with his workers and who has given a
great deal of his time to the study of how the employ-
ment relation might in all fairness be adjusted, re-
marked somewhat hopelessly the other day:
"There is something I do not understand in my
workers. In former years, we have always been able
rather easily to arrive at adjustments and I have
rather prided myself, I think, upon the sincerity of
the union between myself and those I employ. I
have scientifically worked out wage payments and
they have always been satisfactory. I have so ad-
justed my affairs that the volume of work passing
through the shops seldom decreases. If our selling
orders drop off, we produce for stock, and for the past
Reprinted from System, the Mayanru of Businesi, by permission of A. W. Shaw
Company.
4 COMMON SENSE AND LABOUR
five or six >ears we have never laid off a man be-
cause there was no work for him.
"But to-day there is something different, there
seems to be something stirring, something which I
cannot comprehend and I am not sure that the men
themselves comprehend for I have talked frankly
with many of them. There is something one might
almost call a subconscious restlessness that makes
them seem different. I cannot put my finger on it
and say *it is this' or 'it is that.' The quality eludes
me."
I have heard the same sort of statement from
many other employers variously expressed, and un-
doubtedly there are new and strange currents circu-
lating through the minds of workers everywhere. It
is not precisely a profound dissatisfaction with labour
as a means of livelihood. It is not so much wages
and hours, for although wage disputes are frequent
enough, they very often seem rather to be pegs on
which to hang trouble than real causes of themselves.
With the almost universal habit of eventually grant-
ing most demands for wage increases, doubling the
increase and then adding it into the cost of the prod-
uct, employers generally are not a great deal con-
cerned about the wages they pay.
COMMON SENSE AND LABOUR 5
The matter of hours is on the same basis. The
desire for an eight-hour or a six-hour day would be
perfectly comprehensible if the workers gave any
evidence at all of desiring so to limit their working
time, but they seem to want the eight-hour day as a
basis of pay and not as a period of work. We have
had several strikes because the request for the eight-
hour day was granted literally, whereas what the
workers wanted was a ten-hour day with overtime
during two hours of it.
The unions have no answer. They have gained
the eight-hour day, which used to be a shibboleth,
they are talking of and also succeeding in extending
union control, but beyond that they have only vague
formulas and some interesting excursions into inter-
nationalism, possibly with the thought that if you
cannot set your own house in order, it is diverting to
poke about your neighbour's premises. The progress
of events has caught up with trades unions' platforms
and the workers are less happy than ever they were.
The attitude of the worker is curious; his outstand-j
ing characteristic to-day is a reluctance to work. It*
is extraordinarily hard to buy good service at any
price. Per man production has, to a considerable
extent, dropped off in America; it has dropped off
6 COMMON SENSE AND LABOUR
50 per cent. ID England and Germany. It is hard to
get men to work at any wage. You will rarely meet
with a manufacturer or a retailer who is not seriously
hampered by his inability to obtain employees.
What is the reason for this restlessness every-
where? Why is England practically on her back and
unable to produce? Why are France, Italy, and
Belgium always in and out of great strikes? Why do
you find such an intense dissatisfaction with every-
thing here?
The worker cannot tell you. When he is in the
midst of a strike, he can express some specific things
which he thinks he wants then but if you give them
to him, he will be around again in a week or two for
something more, and just as much and just as vaguely
dissatisfied as he was before he went on the strike.
The glib answer to all of this is of course the war,
but that is not an answer at all. It is only an evasion.
It is as though a man, being asked to write an article,
should forward a dictionary to the editor with a com-
ment that he would find all that he desired within
its covers and that all he had to do was to pick out
the words and arrange them.
The conduct of the war is responsible for the unrest
of the working man to-day, but that unrest is very
COMMON SENSE AND LABOUR 7
slightly a reaction of the years of surging chaos. It
is due to the fact that the war activities destroyed
values destroyed the relation between work and
production. They opened up to the unthinking mass
of the population (employers as well as employees),
a vista where somehow in a new order of things an ex-
istence might be possible without work that money
is something of itself and can be invoked by prayer
or by blasphemy as a kind of manna from above.
Let us go back and see just what has happened
everywhere. The idea prevailed that, because in
peace times and in isolated cases you can get pro-
duction by offering money, the vast needs of war
production could be met by offering money. As a
matter of fact, in very few instances was the produc-
tion actually greater than in peace, but it was of a
different character and because it came in one order
given by the Government rather than in some mil-
lions of orders given by individuals; the very size
quite naturally dislocated reason. It did not seem
possible that such amounts could be produced except
by extraordinary and dramatic means. It did not
seem possible that there were such supplies of com-
modities in the world. If you will look back you
will find that governments bought feverishly with
8 COMMON SENSE AND LABOUR
the spectre of a shortage always stalking about them.
I do not recall any commodity which somebody or
other did not at some time discover to be short, al-
though the actual shortages were rare. Whenever
anybody attempted the impossible calculation of
how much of any one commodity was in this coun-
try, he was absolutely certain to find that there was
not enough of it. The example of the member of
the Quartermaster's Department who happened to
be let loose in Spain and promptly bought 4,000,000
gallons of vinegar for our army was not unusual. He
was not suffering from the hallucination that soldiers
take beauty baths in vinegar. It was simply that
the amount needed passed his comprehension and he
therefore bought an incomprehensible amount of
vinegar. Probably if the Spanish producers could
have dug up a billion gallons he would have bought the
billion. He was only one of many thousands who in
Washington, in London, and in Paris, with infinite
dignity and infinite secrecy, bought everything that
could be bought.
Here in the United States we at no time during
the war had an actual shortage of labour, but the com-
panions of the commodity shortage sharks discovered
a labour shortage and they convinced employers all
COMMON SENSE AND LABOUR 9
over the country that a worker was a rare bird and
one to be caught and kept at any price. The workers
were not slow, because they were human, to confirm
this impression of their extraordinary value.
So while on the one hand the Government was
buying up everything that was to be bought, they
began to induce employers to pay enormous amounts
for labour service, thus throwing into the world an
overpowering buying power while at the same time
taking out of the world the things which might be
bought. The quick and inevitable result was that
prices began to go up and the high wages to lose their
purchasing power. The wages had to be raised and
then in order to quiet popular discontent nearly
everywhere in the world, the governments started in
to fix prices. It has been well said by an economist
that although there is no insuperable economic diffi-
culty in the fixing of prices, no man has yet been born
into the world with the wisdom to fix a price.
In normal times a price is not fixed by any one,
although every little while a few producers do get
clandestinely together and think they fix prices.
Prices are fixed by the law of supply and demand and
both the demand and the supply depend upon the
cost of production. The fixing of a single price, there-
10 COMMON SENSE AND LABOUR
fore, has more results tangental and otherwise than
any one has yet been able to estimate. But we are
here concerned with the effect upon the cost of pro-
duction.
In England certain prices were fixed so low that it
became necessary for the government to subsidize
producers, thus wholly destroying the relation with
costs of production and fundamentally dislocating
the foundation of British labour.
We did not go to such length here but we did
madly follow the theory that production might be
had merely by hanging up a bag of money in front
of the workers as one suspends a bunch of hay be-
fore the mouth of a greedy but unimaginative mule.
As time went on, we offered more and more money,
although as a result we did not get more and more
production. In most instances which I have inves-
tigated the successful production came about through
the perfecting of means and almost in spite of the
money involved.
Money came too lightly; a man soon discovered
that he might get almost as much by working easily
as by working hard and of course he worked easily.
In spite of all the panegyrics that have been written,
such is the war labour record everywhere. The facts
COMMON SENSE AND LABOUR 11
were not made public but in every country the per
man productivity decreased as the war grew older.
You can say that it was due to war strain if you like,
but the only fact of interest in this connection is that
as wages increased the individual productivity de-
creased, although perfecting of machine methods
may have increased gross production, and in America
it did. But the effect of increasing wages and de-
creasing production was further to add to the infla-
tion of values which is always the companion of war.
The governments had unlimited credits and they
poured unlimited purchasing powers into markets
which had not their usual supplies of ordinary com-
modities. Prices shook off their shackles and went
a-soaring.
The worker found very quickly that his dollar,
shilling, franc, or mark was not what it seemed to be
and of course that aroused his resentment, for there
are very few people who have the slightest idea what
money really is. If they receive something which is
said to be money and it does not turn out to be worth
face value, they immediately want to start trouble.
It is easy for an agitator to convince them that their
money has been depreciated by some capitalistic
trick to avoid the payment of high wages.
12 COMMON SENSE AND LABOUR
As the Government payments everywhere grew
and bank credit followed bank credit, the total of
bank deposits artificially swelled (for every credit
is also reflected in the deposit account) and individual
concerns began to show large profits. The workers
everywhere in the world viewed this accumulation of
capital as proof certain that the radicals were more
or less right in saying that it was to the advantage
of capital to wage war. What they did not and do
not realize is that the bank deposits are largely ficti-
tious and that the profit balances of the companies are
composed of the same sort of money which they get
in wages that is money which is not all that it seems
to be.
Apparently their delusions are shared by many
employers, otherwise we should not see so many com-
pany presidents congratulate themselves and their
stockholders on the profits earned in war.
Through all of this time it was thought necessary
by all governments, animated by the surprising but
universal idea that war patriotism is confined to those
in authority, to urge forward all workers by posters,
advertising, and literature to the general effect that
the labouring man was the second line of defence, that
the war would be won in the factories and so on.
COMMON SENSE AND LABOUR 13
The employer and the employee alike were told that in
accepting a government contract at a high price they
were performing a patriotic duty, a duty quite as high,
although different, as that of the soldier who went
into the field . Profiteering was stamped patriotic .
The soldiers in the volunteering days, and this is
especially true in England, were promised after the
war everything that the recruiting speaker happened
at the moment to be able to think of. In England
it was generally represented that the man who went
out to fight for his country would return to a life
of such luxury that the chief precaution in the future
would be to see that he was not cloyed by luxury.
It was represented to him in effect, if not in actual
words, that a wise and wealthy government would
care for him, not only while he was with the colours
but forever thereafter and a day.
The worker, viewing his pay more or less on pre-
war standards, concluded that governments could
pay anything. The returning soldiers, having had
complete support through some years, saw no par-
ticular reason why the government should not con-
tinue that support and in addition felt it was the
duty of those for whom they fought to save them
from want as they went back into civil life. "Being
14 COMMON SENSE AND LABOUR
saved from want" depends a good deal on the point
of view but, generally speaking, on the receiving
end it means a life without work.
Up until the time of the Armistice none of these
matters was serious because few people had the
leisure to express themselves. Had peace been made
say within a few weeks of the Armistice and all re-
strictions everywhere lifted, it is quite probable
that industry might easily have returned toan approx-
imate normal functioning. But as peace was not
made, the armies of England and of Germany were
gradually demobilized and industry could not absorb
the workers. It could not absorb them in Germany,
because the Allied blockade prevented both exports
and imports, while England, although not blockaded
by a recognized enemy, had just as tight a cordon
thrown about her shores by a multitude of govern-
ment regulatory boards and commissions.
The people, not finding work, at once turned to
their governments and asked that the promises
of support which had been so freely given be re-
deemed. They got unemployment allowances and
thereupon absolutely confirmed the growing impres-
sion that it would be easily possible to live without
work and that it was the duty of the corporation
COMMON SENSE AND LABOUR 15
or of the Government to support its employees or citi-
zens without any value being returned by the recipient
of the bounty. They got unemployment allowances
which in many countries were as great or greater
than the pre-war wages.
The unskilled labourer in England or Ireland re-
ceived a higher allowance from the government than
he earned as wages before the war. In Germany
the average unemployment allowance was actually
double the average pre-war wage.
It will be said at once that these figures mean noth-
ing, for the purchasing power of money has decreased,
but the fact that money has a variable purchasing
power is something that cannot be put into the minds
of the mass of the people. They will insist on high
wages in order to live, but they will protest against
high commodity prices. You can convince one
worker out of every twenty thousand that unless
you have high production, high wages mean nothing,
but when you have convinced him, he will not leaven
the mass. Trades union officers and politic ans find it
personally profitable to support the proposition that
the offensive subject of work should not be introduced
while discussing the infinitely lovely topic of high
wages.
16 COMMON SENSE AND LABOUR
The man who would come out with the following
statement would be hissed :
"It does not make any difference how high wages
are, provided they are represented by production.
High wages and high production make the ideal
situation in industry, but let me tell you with all
emphasis that if you ask for high wages and do not
offer high production, you will never attain even a
living wage, no matter how many dollars you happen
to receive. The price of the commodities will over-
take and pass the buying power of your wages."
But this next statement would be applauded, and
it is made every day in the week in ten thousand
places :
"You are entitled to ten dollars a day and a six-
hour day, five days a week. If the company you
work for cannot pay it, then take the company and
make them pay it, or turn around and make the
Government pay it. What did we fight this war for,
anyway?"
The first statement is economically true; the second
statement is economically absurd. Many of those
who voice the second statement know that it is
absurd and make it only for the purpose of bringing
about a complete disruption between capital and
COMMON SENSE AND LABOUR 17
labour, so that capital may be destroyed, just as
Lenin prints money as fast as his presses can turn
it out in order dramatically to demonstrate to the
people that money is useless. The second theory
has gained ground as in Lawrence, Seattle, and
Winnipeg and is at the root, expressed or unex-
pressed, of what we call labour trouble everywhere
in the world.
The reaction to the paternal war control is that
governments exist for the people, that they are some-
thing apart, and derive a power and a wealth other
than from the citizens, that the workingman is a
privileged person who produces all wealth and, there-
fore, should have all wealth, even though he does
not produce. It is an absurd idea but it finds sanc-
tion in many quarters which would be quick to re-
sent the implication that they believed any such
thing. For instance "Give a Soldier a Job,"
"Pay a Living Wage," "Be Good to Your Employ-
ees," and like slogans are only reflections of funda-
mental paternalism.
Quite as absurd, however, are the ideas of many
capitalists that they are public benefactors in employ-
ing great numbers of people; that they do a man a
"favour" when they hire him or that they cannot
18 COMMON SENSE AND LABOUR
cheapen production without cheapening the hire of
the human element.
A few employers have met the question of wages
squarely, have paid whatever was asked, and have
made up for the high wages by increasing production
through better methods, and have cut their selling
expense ratio through a more rapid rate of turnover.
They have not had to raise their prices to the con-
sumer and they are making money. A few other
employers are likewise, through frank conferences,
asking the men what can be done, but it may truth-
fully be said that the majority of employers every-
where are filled with precisely the same idea of the
sanctity of the value of a coin that the workers have.
The employers have often turned backward toward
what they think are the old values and of course they
meet with the great body of workers marching for-
ward to the new values. Since both the employer
and the employee are suffering from the same de-
lusion but apply it differently, their differences often
seem to be scarcely possible of reconciliation.
The serious part of it all, however, is that in Eng-
land and on the Continent unemployment allowances
have broken the last bond between wages and pro-
duction and are so rapidly inflating the currency
COMMON SENSE AND LABOUR 19
as to permit the thought that it is not worth while
to work for wages. From that opinion it is only a
step to the theory of production for use and the
entire abolition of capital. That same thought
is growing in the United States. Thus far it has
not to my knowledge been met by intelligent argu-
ment, but merely by denunciation and by somewhat
silly falsehoods as to what is going on in Russia.
The actual truth concerning what has happened in
Russia would be far more effective than police raids
and investigations by uncommonly stupid legisla-
tors. That which we call Bolshevism is not a cause
but an effect.
Another reflex of the war and its concurrent talk
of reconstruction (which talk always went in the
direction of confirming the idea that the State owed
a duty to its people without the people owing a
duty to the State) is the question being asked every-
where by returned soldiers: "What did I fight to
save?"
He did not fight to save the estate of his employer; /
he did not fight for the right to work hopelessly at
the starvation wage; he fought perhaps to save his
home and fireside, if he happened to have one, and
if he did not have one, for a chance some time to
20 COMMON SENSE AND LABOUR
get one if his fancy turned that way. He wants
recognition as a human being a somewhat different
recognition from being handed a slip by a foreman
and told to draw his pay and get out because the
foreman does not feel well that day. He does not
really know what he wants, but it is something dif-
ferent from what he has. Some say that he is striv-
ing for the recognition of the dignity of labour and
probably they are right.
And so it goes throughout the world this struggle
of unphrased forces this conflict of emotions which
are new, incoherent, and which send a man willy
nilly in this or that direction. At the bottom of it
all, unseen and disregarded, is the broken relation be-
tween wage and production. Because they broke
that relation and could not mend it, Bolshevism
is failing in Russia. The relation is the foundation
of society. It is the foundation of our House of
State and yet we mostly prefer to tinker with the roof.
CHAPTER TWO
THE RELATION BETWEEN THE EMPLOYER AND THE
EMPLOYED
A MANUFACTURER in the Middle West spent some-
thing more than a hundred thousand dollars fitting
up the roof of one of his buildings as a workingmen's
club. He had bowling alleys, billiard and pool
tables, plenty of easy chairs, free lemonade on tap,
and a special elevator which could carry fifty people
at a time and make the trip in something less than
half a minute.
He opened the club with a big bang and then
settled back, satisfied to think what a splendid speech
he could make at the next trade convention. The
title bothered him. Would he select "Taking the
Workmen into the Big Family," or "The Place of
the Beautiful in the Labour Relation"? The second
title made a strong appeal, for it connoted a knowl-
edge of psychology and he had lately heard some
interesting lectures on psychology.
On the opening day the workmen crowded the
n COMMON SENSE AND LABOUR
club, wandering about joyously on company time,
but thereafter the clubbing instinct became sub-
normal. Day after day, the noon hour found but
half a dozen or a dozen men using the facilities which
had been provided for a thousand. The employer
began to be worried, he resented the disdain of his
generosity, and finally he asked a friend who happened
to be in the city to look over the place and find out
what was the matter. This friend was the owner of
a manufacturing plant in Connecticut, which he had
built entirely by his own efforts. He had started
as a workman and although he had made money,
he had never lost his perspective and was always
able to get the workers' point of view. He looked
over the place and then he reported:
"You have one of the finest club houses I have ever
seen. You also have an extremely well-fitted-up em-
ployment office. The employment manager's office is