Socialism As It Is

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"The thing is a failure, greatly to the surprise of many capable
observers, and yet just such a result might have been expected from
the beginning, and for two perfectly obvious reasons, both of
which, strange to say, were universally overlooked.

"In the first place, the court was nominally composed of three
persons, and really of one. That one was the judge appointed by the
government.

"The representative of the employers voted every time for the
employers; the representative of the unions voted every time for
the unions; the judge alone decided, and might as well have
constituted the whole court.

"At first the judge decided most of the cases in favor of the
policy of increasing wages. Fine, again. Many wage scales ascended.

"But the judge, as a rule, did not like his job. He desired to get
to the Supreme Court as rapidly as possible; to the Supreme Court
where the honors were. A succession of judges went by. At last came
one that agreed with the employers that wages were too high for the
welfare of the country. This had long been a complaint of the
manufacturers in particular, who were fond of pointing out how high
wages discouraged the opening of new factories, and consequently
the development of the country. This judge, being of the same
opinion, apparently, began to decide the cases the other way.

"Then, of a sudden the second fatal defect in the system opened up.

"The men grew restless under the adverse decisions of the court.
That raised a new question.

"How are you going to compel men to work when they do not wish to
work under the conditions you provide?

"Nobody had thought of that."

Referring, then, to the failure to prevent the strike of the
slaughterers against the law in 1907, or to punish them after they had
forced their employers to terms, Mr. Russell gives the Socialist opinion
of the legislation of 1908, passed to remedy this situation:--

"At the next session of Parliament it amended the law to meet these
unexpected emergencies and find a way to compel men to work.

"To strike after a case had been referred to the court was now
made a crime, punishable by a fine, and if the fine were not paid,
the strikers' goods could be distrained and he could be imprisoned.
Any labor union that ordered a strike or allowed its members to
strike was made subject to a fine of $500. Outside persons or
organizations that aided or abetted a strike were made subject to
severe penalties.

"Fine, again. But suppose the labor unions should try to evade the
law by withdrawing from registry under the act? _Government thought
once more, and produced another amendment by which the penalties
for striking were extended to all trades engaged in supplying a
utility or a necessity, whether such trades were organized or not._

"You could hardly surpass this for ingenuity. 'Supplying a
necessity' would seem to cover about everything under the sun and
to make striking impossible. There must be no more strikes.

"Sounds like home, doesn't it? To do away with strikes. You see the
employing class, which all around the world gets what it wants and
controls every government, had put itself back of the arbitration
law. It had discovered that the law could be made to be a good
thing, so it was at the dictation of this class that the amendments
were passed. What the injunction judges do in America, or try to
do, the law was to do in New Zealand.

"Except that not Judge Goff nor Judge Guy, nor any other injunction
judge of our own happy clime, has dared to go quite so far as to
declare that all striking everywhere is a crime to be punished with
imprisonment.

"How are you going to compel men to work? Why, thus, said the
government of New Zealand. Put them in jail if they do not like the
terms of their employment."

Mr. Russell then gives an account of the miners' strike, above referred
to, which he points out was ended by the labor department paying the
miners' fines. He concludes:--

"Mr. Edward Tregear, a scholar and thinker, had filled for many
years the place of chief secretary for labor. It is not a cabinet
office, but comes next thereto. He is a wise person and a sincere
friend of the worker, as he has shown on many occasions. As soon as
he heard that the ministry actually purposed to imprison the miners
because they did not like the terms of their employment, he went to
the minister of labor and earnestly protested, protested with tears
in his eyes, as the minister himself subsequently testified,
begged, argued, and pleaded. No possible good could come from such
rigor, and almost certainly it would precipitate grave disaster.

"To all this the minister was obdurate. Then Mr. Tregear said that
he would resign; he would not retain his office and see men
imprisoned for exercising their inalienable right of choice,
whether they would or would not work under given conditions.

"Now Mr. Tregear was one of the most popular men in New Zealand,
and his resignation under such conditions would raise a storm that
no ministry would care to face. Hence the government was in a worse
situation than ever. On one side it fronted a dangerous venture
with the certainty of a tremendous handicap in the resignation of
the chief secretary, and on the other hand was an acknowledgment
that the arbitration law was a failure and could be violated with
impunity.

"In this emergency decision was halted for a few hours while the
government people consulted. Meantime, by quick and desperate
efforts, the strike was ended, and the men went back to work.

"This left the fines unpaid. The labor department solved that
difficulty and allowed the defeated government to make its escape
from a hopeless situation by paying the miners' fines.

"To all intents and purposes it was the end of compulsory
arbitration in New Zealand. Not nominally, for nominally the thing
goes on as before; but actually. It is only by breaking our shins
upon a fact that most of us ever learn anything; and the exalted
ministry of New Zealand had broken its shins aplenty on a fact that
might have been discerned from the start.

"If you are to have compulsory arbitration, you must compel one
side as much as the other.

"But in the existing system of society, when you come to compelling
the workers to accept arbitration's awards, you are doing nothing
in the world except to compel them to work, and, however the thing
may be disguised, compulsory work is chattel slavery, against which
the civilized world revolts.

"This is the way the thing works out, and the only way it ever can
work out. There can be no such thing as compulsory arbitration
without this ultimate situation.

"If, therefore, any one in America believes in such a plan for the
settlement of labor troubles, I invite the attention of such a one
to this plain record.

"For my own part, years ago I was wont to blame the labor leaders
of America because they steadfastly rejected compulsory
arbitration, and I now perceive them to have been perfectly right.
The thing is impossible."[75]

A somewhat similar act to the Australasian ones, though less stringent,
has been introduced in Canada. The Canadian law, which is a compromise
between compulsory arbitration and compulsory investigation, applies to
mines, railways, and other public utilities. Strikes have been
prevented, but let us see what benefits the employees have received.
Whatever its effect on wages and hours, the law has the tendency to
weaken the unions, which hitherto have been the only reliable means by
which employees were able to advance their condition. Not only does it
make organization seem less necessary, but it takes the most powerful
weapon of the union, the ability to call a sudden strike. If we add to
this the unfavorable influence on public opinion in case the unions are
not contented with the rewards, and the fact that the law works against
the union shop, which is the basis of some unions, we can understand the
ground of their hostility.

"The Canadian Labour Disputes Investigation Act" is especially
interesting and important because it is serving as a model for a
campaign to introduce legislation along similar lines into the United
States. Already Mr. Victor S. Clark, the author of the study of the
Australian Labour Movement, to which I have referred at the beginning of
the chapter, has been sent by Mr. Roosevelt and Mr. Taft to investigate
into the working of the act. Ex-President Charles W. Eliot of Harvard
has also advocated strenuously and at some length a similar statute, and
it has been made the basis for the campaign in Massachusetts and other
states. Mr. Clark reported: "Under the conditions for which it was
devised, the Canadian law, in spite of some setbacks, is useful
legislation, and it promises more for the future than most
measures--perhaps more than any other measure--for _promoting industrial
peace by government intervention_."

Here is the very keynote to compulsory arbitration, according to its
opponents, whose whole attack is based on the fact that its primary
purpose is not to improve the condition of the working people, but to
promote "industrial peace by government intervention."

Mr. Clark concedes that "possibly workers do sacrifice something of
influence in giving up sudden strikes," though he claims that they gain
in other ways. "After such a law is once on the statute books, however,
it usually remains, and in New Zealand, Australia, and Canada it has
created a new public attitude toward industrial disputes. This attitude
is the result of the idea--readily grasped and generally accepted when
once clearly presented--that the _public_ have an interest in industrial
conflicts quite as immediate and important in its way as that of the
conflicting parties. _If the American people have this truth vividly
brought to their attention by a great strike, the hopeful example of the
Canadian act seems likely, so far as the present experience shows, to
prove a guiding star in their difficulties._" (Italics mine.)

In the agitation that was made in behalf of a similar law in
Massachusetts, just exactly what is meant by the word "public" began to
appear. It refers not only to the consumers of the article produced by
the industry in which the strike occurs, but also to other dependent
industries, to the merchants of the locality where the workmen live, and
to the real estate interests. Here, then, are definite economic
interests which are concerned primarily in the prevention of strikes and
in the uninterrupted operation of the industry, and only in a secondary
way in rates of wages. _It is not a disinterested and non-partisan
public; it is not on the side of the employers nor on the side of the
employees, but it is opposed to the most effective weapons the working
people have yet found to advance their interests, namely, the strike and
the boycott._

It is said that if the workers lose the right to strike, the employers
lose the right to lockout. It has been customary to set the lockout over
against the strike as being of equal importance, but this is not the
truth. Employers can discharge their workingmen one at a time when they
are dissatisfied with a limited number; and they can often find a
business protest for temporarily shutting down or restricting their
output. To abolish strikes, then, is to take away the employees' chief
means of offense or defense; while to pretend to abolish strikes _and
lockouts_ is to leave in the hands of the employers the ability to
discharge or punish in other ways the men with whom they are
dissatisfied.

When it was proposed to introduce the Canadian law in Massachusetts, no
unionists of prominence indorsed it, but it was favored by a very large
number of employers, while those employers who objected did so for
widely scattered reasons. Mr. Clark is probably right in suggesting
that, while such a law will not be enacted in the United States as
things are now, it is very probable that it can be secured after some
industrial crisis--and there is little doubt that President Eliot and
perhaps also Mr. Roosevelt, for whom Mr. Clark was investigating, and
many other influential public men, are expecting this time to arrive
soon.

The attitude of a large minority of British unions and of a considerable
part of the British Socialists is similar to that of the Canadian and
Australian majority. When in 1907 the railway employees of Great Britain
were for the first time sufficiently aroused and organized, and on the
point of a national strike, a settlement was entered into through the
efforts of Mr. Lloyd George and the Board of Trade (and it is said with
the assistance of King Edward) which involved an entirely new principle
for that country. A board was constituted to settle this and future
strikes of which the Master of Rolls and other British functionaries
were the leading elements. Actually the workers consented for several
years to leave in the hands of the judges over whose election and
appointment they have only an indirect and partial, if indeed any,
control, complete power over their industrial life. The executive of the
Fabian Society issued a manifesto congratulating the government on this
"progressive" settlement, though few prominent labor leaders were
willing to give it their full indorsement. The Fabian manifesto said
that the advance in wages which could be secured by the settlement "will
undoubtedly have been secured on the trade-union program, through the
trade-union organization, by the trade union's representatives, and
finally, in the argument before the arbitrator, by the ability of the
trade union's secretary." But this settlement had nearly all the
features of the Canadian law which I have just mentioned, and especially
in failing to give any recognition to the unions, left the strongest
possible weapon in the hands of their enemies. Nevertheless, more than a
third of the members of the British Trade Union Congress voted since
that time for a compulsory arbitration act, and British radicals like
Percy Alden, M.P., to say nothing of conservatives, agitate for a law
along New Zealand lines. The railway strike of 1911 has decreased the
popularity of this proposal among unionists and Socialists, but has
augmented it in still greater proportion among nearly all other classes.
In the meanwhile, in spite of the employees' efforts, and external
concessions by the employers, the power in the newest railway
conciliation scheme lies also in the hands of the government (see Part
III, Chapter V).

Statements by President Taft and other influential Americans lead us to
believe it will be a very short period of years before similar
legislation is applied to this country, in spite of the hostility of the
unions, or perhaps with the consent of some of the weaker among them,
which have little to gain by industrial warfare. While Secretary of War,
Mr. Taft predicted a controversy between capital and labor which should
decide once and for all how capital and labor should share the joint
profits which they created. In this and many similar utterances there is
foreshadowed the interference of the State. Indeed, the settlement of
the Pennsylvania coal strike in 1903 was a clear example of such
interference, and there is no question that the precedents established
will be followed up on the next occasion of the kind by some arrangement
even less advantageous to employees who now almost universally feel, as
the present demands of the miner's union show, that they got the worst
of the former decision.

The railway and mining situations in Great Britain, and the demand for
the government to take some measure to protect employees against the
"trusts" in this country (to say nothing of the menace of a great coal
strike), promise to make compulsory arbitration an issue of the
immediate future. Mr. Roosevelt, who now proposes that the government
should interfere between monopolies and their employees, is the very man
who is responsible for the coal strike tribunal of 1903, which not only
denounced sympathetic strike and secondary boycott, but failed to
protect the men against discrimination on account of their unionism.
Were he or any one like him President, the institution of government
wage boards would be dreaded like the plague.

Similarly Mr. Winston Churchill, in Great Britain, recognizes the
extreme seriousness of the situation. His position is ably summed up by
the _Saturday Evening Post_:--

"Winston Churchill has propounded a capital-and-labor puzzle to his
British constituents.

"To a modern state, he says in substance, railroad transportation
is a necessity of life--and how literally true this is of England
was shown in the general strike of last August, when the food
supply in some localities ran down to only a few days'
requirements. So the government cannot permit railroad
transportation to be paralyzed indefinitely by a strike. It cannot
sit by and see communities starve. A point will soon be reached
where it must intervene and force resumption of transportation.

"Strikes, however, form one of the modern means of collective
bargaining between employer and employees. They are, in fact, the
workmen's final and most effective resource in driving a bargain.
Denied the right to strike, labor unions would be so many wooden
cannon at which employers could laugh. If the employer knew
absolutely that the men could not strike, he might offer any terms
he pleased. In wage bargaining the men would not stand on a level
footing, but be bound and gagged.

"If, then, the government takes away, or seriously restricts, the
right of the men to strike, isn't it bound to step into the breach
and readjust the balance between them and the employer, by
compelling the employer to pay them fair wages? There can be no
free bargaining if it is known that at a certain point the
government will intervene on one side. Must it not, then, also be
known that at a certain point the government will intervene on the
other side and compel payment of adequate wages?

"Mr. Churchill carries his puzzle only that far. On our own account
we add, How far will that leave us from regulation of wages as well
as of rates by the government, and how far will that leave us from
government ownership?"[76]

In a word, Mr. Churchill's remedy for the evils of "State Socialism" is
more "State Socialism"--and undoubtedly there is an inevitable trend in
that direction. But the government railway strikes of France, Austria,
Italy, Hungary, and other countries ought to show him that his remedy,
advantageous as it may be from many standpoints, is scarcely to be
considered even as a first step towards the solution of the labor
problem. As long as capitalists continue to control government, "State
Socialism," on the contrary, makes the strike more necessary, more
decisive, and invaluable, not only to employees, but to every class that
suffers from the government or the economic system it supports.

The most representative of American Socialists, Eugene V. Debs, has
given us an excellent characterization of this movement as it appears to
most Socialists.

"Successful leaders are wise enough to follow the people. For
instance, the following paragraph is to the point:--

"'Ultimately I believe that this control of corporations should
undoubtedly, directly or indirectly, extend to dealing with all
questions connected with their treatment of their employees,
including the wages, the hours of labor, and the like.'

"And what Socialist made himself ridiculous by such a foolish
utterance? No Socialist at all; only a paragraph from his latest
article on the trusts by Theodore Roosevelt. Five years ago, or
when he was still in office and had the power, he would not have
dared to make that statement. But he finds it politically safe and
expedient to make it now. It is not at all a radical statement. On
the contrary, it is simply the echo of E. H. Gary, that is to say,
John Pierpont Morgan, president of all the trusts.

"Mr. Roosevelt now proposes that Bismarck attempted in Germany
forty years ago to thwart the Socialist movement, and that is State
Socialism, so called, which is in fact the most despotic and
degrading form of capitalism.

"President Roosevelt, who is popularly supposed to be hostile to
the trusts, is in truth their best friend. He would have the
government, the capitalist government, of course, practically
operate the trusts and turn the profits over to their idle owners.
This would mean release from responsibility and immunity of
prosecution for the trust owners, _while at the same time the
government would have to serve as strikebreaker for the trust
owners_, and the armed forces of the government would be employed
to keep the working class in subjection.

"If this were possible, it would mark the halfway ground between
industrial despotism and industrial democracy. But it is not
possible, at least it is possible only temporarily, long enough to
demonstrate its failure. The expanding industrial forces now
transforming society, realigning political parties, and reshaping
the government itself cannot be fettered in any such artificial
arrangement as Mr. Roosevelt proposes. These forces, with the
rising and awakening working class in alliance with them, will
sweep all such barriers from the track of evolution until finally
they can find full expression in industrial freedom and social
democracy.

"In this scheme of State Socialism, or rather State capitalism, Mr.
Roosevelt fails to inform us how the idle owners of the trusts are
to function except as profit absorbers and parasites. In that
capacity they can certainly be dispensed with entirely and that is
precisely what will happen when the evolution now in progress
culminates in the reorganization of society."[77] (My italics.)

[72] Victor S. Clark, "The Labour Movement in Australasia."

[73] In her "American Socialism of the Present Day" (p. 185), Miss
Hughan has quoted me (see the _New York Call_ of December 12, 1909), as
classing the abolition of the injunction as one of the revolutionary
demands never to be satisfied until the triumph of Socialism. As a means
to check the growth of the power of the unions, this method of arbitrary
government by judges has never been resorted to except in the United
States. It is evident, then, that this statement was only meant for
America. It should also have been qualified so as to apply solely to the
America of to-day. For as other methods of checking the unions exist in
other countries, it is obvious that they could be substituted in this
country for the injunction, a proposition in entire accord with all I
have written on the subject--though unfortunately not stated in this
brief journalistic expression. I have now come to the belief, on the
grounds given in the text, not only that a new method of fighting the
unions (namely, compulsory arbitration) _can_ be substituted for the
injunction, but that this _will_ be done within a very few years.

[74] Professor Le Rossignol and Mr. William D. Stewart, "Compulsory
Arbitration in New Zealand," in the _Quarterly Journal of Economics_.
Reprinted in their book, "State Socialism in New Zealand."

N. B. The reader who is interested is referred to the whole of both
these volumes. There is little matter in either that does not have a
direct bearing on our subject, and they have been utilized throughout
this and the following chapter.

FOOTNOTES:

[75] _The Coming Nation_, Sept. 2, 1911.

[76] The _Saturday Evening Post_, Nov. 25, 1911.

[77] The _New York Times_, Nov. 25, 1911.

CHAPTER VI

AGRARIAN "STATE SOCIALISM" IN AUSTRALASIA

Australia and New Zealand are commonly taken as the most advanced of all
countries in government ownership, labor reforms, and "State Socialism."
Indeed they are often pictured as almost ideally governed, and the
credulity with which such pictures are received shows the widespread
popularity of "State Socialism."

The central principle of the Australian and New Zealand reforms is,
however, not government ownership or compulsory arbitration, as commonly
supposed, but a land policy. By means of a progressive or graduated land
tax it is hoped to break up all large estates and to establish a large
number of small proprietors. When it was said to Mr. Fisher, the new
"Labour Party" Premier of Australia, that this policy was not Socialism,
he replied laconically, "It is my kind of Socialism."[78]