DEMOCRATIC MANAGEMENT

Socialists have ever coupled with their demand for collective ownership, as has been indicated, a demand for the democratic management of industry. This demand was for years scoffed at as utopian by the business world. Prior to the war the trade union movement had gradually extended its control over shop conditions in numerous industries, as is indicated in the extensive agreements made periodically with the employer in the printing, the railroad, the garment industries (under the protocol) 22 and in other lines. Noteworthy also were the beginnings of democratic control in a section of the public printing industry in France, in the coöperative movement in Germany, 24 in some of the municipal industries in England, and in such private businesses as the Filene Department stores in the United States.

Advance Since 1914. Since August, 1914, the advance in that direction has been marked. The war concentrated great power in the hands of state officials. The possession of this power led to its abuse, and this abuse in turn to an even greater demand by the workers for a share in the control of shop conditions. These demands the government and the private employers were compelled in part to heed, partly on account of the labor shortage, and partly because of the prime need for sustained and efficient workmanship. Scores of proposals for some measure of workers' control soon followed. In England,

22 Cohen, Law and Order in Industry.

23 Fabian Research Department, State and Municipal Enterprise, pp. 24-5.

24 Fabian Research Department, The Coöperative Movement, pp. 11, 22, 28-30.

the most famous of these are the Whitley Report which has been adopted by the government, and is now being followed in many of the industries - the proposals of the Garton Foundation, of the manufacturer Renold, of the Amalgamated Society of Engineers, of the British miners, of the national guildsmen and of numerous shop steward committees. In the United States there have developed the "Plumb" plan for the management of the railroads, endorsed by the railroad workers, the proposal of the miners, the agreements of the National War Labor Board and of the various other labor adjustment boards in the United States, and the more paternalistic plans of the International Harvester Company and other corporations. And in other countries this movement for an entirely new status for the worker is growing apace. While some of these plans have as their object the prevention of revolutionary change, and the increase of the efficiency of the workers, many of them are frankly but the beginnings of a complete democratic control, and their adoption is bound to have an educational and moral value of great importance to the whole movement toward a more complete industrial democracy.25

Other Tendencies. In addition to these movements and institutions- the corporation, social reform legislation, voluntary coöperation, public ownership, labor unionism and the movement toward democratic management there are the political socialist movement, which is described elsewhere in this book, and the less tangible, but none the less important, intellectual, æsthetic and ethical

25 See Kellogg and Gleason, British Labor and the War, Pt. IV; Stoddard, The Shop Committee; Renold, Workshop Committees; Tead, British Reconstruction Programs; Reports of British Coal Commissions; Johnson, The New Spirit in Industry, Ch. IV.

forces which are insistingly challenging the present system of autocratic industrial control, and bringing in a more democratic and more equitable economic structure.26

26 For further description of these tendencies see Kirkup, An Inquiry Into Socialism, Ch. VIII; Melvin, Socialism as the Sociological Ideal, Chs. IV, V.

CHAPTER VIII

OBJECTIONS TO SOCIALISM

Narrowing of Objections.— The philosophy of socialism has been attacked during the past few generations from almost every conceivable angle. Many objections formerly seriously urged against this challenging philosophy have now been discarded by intelligent critics. Dr. John A. Ryan, an ardent opponent of socialism, in dealing with outgrown anti-socialist objections, says:

Those objections against socialism which are based on the assumption that the scheme would involve collective ownership of all, even the smallest instruments of production, have ceased to be pertinent or effective. Antiquated likewise are the objections directed against complete confiscation of all private capital; collective ownership of all homes; compulsory assignment of occupations; and the use of labor-checks. instead of money. So far as I can learn, none of these proposals is now regarded by authoritative socialists as essential. Other criticisms of doubtful validity assume the impossibility of forecasting the social demand for commodities and of managing industries of national magnitude. In some manner both of these difficulties have been met by the great trusts, such as the Standard Oil Company and the United States Steel Corporation." 1

INCENTIVE

Certain objections, however, are still urged. Perhaps 1 Hillquit and Ryan, Socialism. Promise or Menace, pp. 51-2.

none is voiced so strongly as the objection that socialism will stifle the incentive.2

Basis of Criticism.- An analysis of the reasons advanced for the contention that socialism would fail to provide adequate incentives to the ordinary worker and to the administrator generally indicates a belief that absolute equality of compensation would exist under socialism, irrespective of industry or accomplishment, and that discharge would be impossible. "Slackness, indifference and the lazy stroke" would thus be the inevitable result. It has already been shown, however, that equality of compensation is not a necessary part of the socialist philosophy,3 and that difference of compensation and any other material incentives that might be deemed necessary could be brought into play under socialism. Nor is there anything to prevent discharge under proper safeguards, if that form of punishment were deemed necessary for the public good, although many socialists are of the opinion that the positive incentives provided under a coöperative system would render such penalties largely unnecessary.*

Inefficiency of Present System. The fear that socialism might produce "slackness, indifference and the lazy

2 See, among other works, Taussig, Principles of Economics, Vol. II, p. 462.

3 See supra, Ch. V, "Remuneration Under Socialism."

4 Little appears in the socialist literature directly bearing on the question of discharge under socialism. Several writers believe that it will be available as a penalty in case of need. (Fabian Essays, p. 151; Spargo, Applied Socialism, p. 205.) There should, of course, be an attempt made prior to discharge to find for the worker other employment more adapted to him. He should be given a fair trial by fellow workers and others, and provided with other safeguards. Discharge, however, would not mean that the worker would be outside the pale of economic life, inasmuch as there would not only be national industries, but numerous local industries conducted by unicipalities, and voluntary coöperative and private ventures. cklisting, of course, should be absolutely forbidden.