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parliamentary committee on public works, whose business was to investigate and report on the prospects of all proposed public works entailing any large outlay of money (i.e., over £20,000.) In this way it was hoped that authoritative information would be obtained, which would better enable parliament to decide whether any proposal was worth further consideration. The work of such committees has been of great value, especially in preventing the state from embarking on ventures which had no hope of succeeding. But the method has its faults. The committee is not made up of experts, and has to inquire into all kinds of matters, such as roads, railways, irrigation, the production of oil, waterworks, etc. It is at the mercy of experts on one side, and of those who dwell in the district under consideration on the other. The latter spare no pains to paint the resources and potentialities of the district in most glowing colours; it is very difficult to get any critical opinion; some members of the committee may be naturally in favour of any extension of state effort, and others may have political interests in the district. Hence occasionally ventures which were strongly recommended by the committee turn out to be failures.
Finally, attempts have been made to take the control of the labour supply out of political hands by the appointment of public service boards or commissioners, to whom is given the work of appointing, promoting, dismissing, and otherwise controlling state servants. This policy is Australia's chief contribution to the organization of the public service. Much good has resulted from it, especially so far as clerical and professional staffs are concerned; but even in these classes, in the big body of men employed in public works, and in the selection of the commissioner himself, political influence is not altogether eliminated.
Here then we have in many forms the biggest problem confronting a democratic state which turns its hand to public enterprise. Such enterprise may be used as a means to a political (or, rather, a party-political) end. Is there any remedy? Splendid machinery may be devised to establish non-political control, but this is always open to the objection that in order to avoid political control we have abolished democratic or popular control, and established economic autocracy in state as in private industry. The solution seems to lie not simply in the erection of suitable politico-economic machinery, or in the thorough training of public servants, but also in the realization of a high standard of intelligence and character in the mass of the community and their representatives. If electors think in terms of their own personal, sectional, or class interests, if they return men to represent those interests, if they believe that their vote is something to be sold to the highest bidder, and choose men whose only qualification is their ability to bid high and recklessly, then no amount of non-political commissions will be able to save democracy from itself.
Public Industries and Technical Advancement. One of the most prominent features of modern industry is the rapidity of technical advance. Old methods, plans, and machines are quickly "scrapped” when anything better is discovered. Scientists are constantly employed to search for new possibilities; methods of accounting are frequently being improved. Big new industries spring up every decade. There is no finality in the matter or methods of private production. To this advance the state has contributed little. It has created no new industry: railways, lighting, postal work, hydro-electricity, etc., all were carried through their pioneer stages by private capitalists or scientists, and the state came into the field only when
the importance of the industry had been realized and its general character determined. When an industry has become state-owned, the owner has seldom made any new departure; most of the improvements on the railways of the world have been introduced on private lines, and only copied later on the state lines. Even in the realm of defence most of the inventing of new weapons of destruction has been done by private capitalists; had the motor and aeroplane depended solely upon the state for their development they would probably never have been taken up, and would certainly have been much more primitive to-day. In Germany and Switzerland the post office, telegraph, telephone, and railways have maintained a high standard of enterprise, but in other countries public industries tend to be humdrum and devoid of the spirit of experiment and innovation. The failure to solve the problem of providing a uniform guage for the Australian railways is one outstanding illustration. Ever since interstate communication was established there has been talk of unifying the guage, but nothing has been done. Meanwhile fresh railway construction has been undertaken, and the task of converting the whole system to the 4 ft. 81 in. standard, which would have cost about £5,000,000 in 1897, and £37,000,000 in 1912, would cost nearly £100,000,000 in 1920.
The Consumer. The treatment meted out to the consumer varies greatly from place to place, and from one industry to another. There are many economies of which advantage could be taken to provide a good article at a low price. Governments can obtain capital more cheaply than private firms, and so their interest bill should be lower. They need carry no watered stock. They generally get managers at lower salaries than are paid by private employers. They can have disinterested management, avoid low tactics and adulteration. They can economize in distribution, send only one cart down one street, put one shop in one district, and in other ways avoid duplication of services. In places these advantages are seized, and the consumer is given an efficient service. This applies to many lighting, tramway, and water undertakings, especially in some of the big European cities. The European postal services were also efficiently organized and served the public well before 1914. But in other cases the consumer has had just cause for complaint. The state tobacco monopolies of the world have generally made no such attempt to cater for customers as private companies have done in other lands. The variety of brands and mixtures is small, the quality mediocre, the retailers incompetent. The monopolies are frankly revenue-raising devices, and the price is therefore taken to the point beyond which any further increase would cause a serious reduction in consumption. The state probably gets no more revenue than it would by leaving the industry in private hands and levying taxation on the goods sold. In other state enterprises similar conditions prevail. There is no magic in “production for use rather than for profit.” The profit-seeker has a stimulus: his end is to get the biggest possible net return for himself. But he may get that return by catering to the fullest possible extent for the wants of his customers. He may find that a good article, reasonable in price, means bigger profits on the year's work than a poor article at a high price. Some state industries do not bother about profit; they bother little more about
Financial Results. It is difficult in many instances to arrive at an exact statement of the financial results of public enterprise. While some state and municipal industries use careful and complete methods of accounting, and produce exhaustive analytical statements of their operations, others make no such attempt at dissection. In fact, one of the chief criticisms of public enterprise is that it frequently is slipshod in its handling of figures. This applies especially to the preparation of estimates of the cost of public works, and the inadequate or over-optimistic attention given to this matter frequently involves the state in an eventual outlay two or three times as great as was estimated. Many of the state tobacco monopolies fail to deduct from their gross returns adequate amounts for rent, interest, depreciation, reserve, management, etc., and hence show bigger profits than they have really made. Each public enterprise has to be examined carefully before one can say whether it is paying its way or working at a loss. When this is done, we find that some industries are making a good net profit. In 1915 the tramway and lighting departments of Manchester paid £180,000 towards the relief of the rates, after making liberal deductions for other charges and holding £770,000 in a reserve and depreciation fund. The Melbourne City Council netted £48,000 on its electrical work in 1916. Japan draws large revenues from her productive state works. The German railways in 1911 contributed £16,000,000 to the exchequer. In other kinds of work results have not been so good, and it seems that public enterprise scores its greatest triumphs in such stable routine industries as light and transit. Along other lines the path is strewn with failures.
The State and its Employees. Public bodies have made no pretence that they were working for the well-being of their employees. Industries are run for the benefit of the consumer or the state, and when the producers receive attention it is either because they are so numerically strong as to force their demands upon the attention of the authorities, or because they have weight at the ballot-box. In state industry even more than in private, there is a gulf between the “brain workers” and the “manual workers." The former alone are usually regarded as civil servants; even then they are often not so well paid as similar men in private industry, but are willing to accept lower salaries because of the security of tenure, the social standing attached to a government post, and the mechanical certainty of securing promotion when someone above them dies, is transferred, or retires. In some countries the standard required for entry into the civil service is high, and only, good men get in; in others it is not a very convincing test of ability or education, and mediocre men gain an entry, after which the rest may be largely a matter of waiting for dead men's shoes. There is no incentive to work the industry so as to make a profit; there is little fear of dismissal; and unless these stimuli are replaced by a high standard of ability and a strong sense of public duty the upper grades of the public service may be characterized by stagnation and inefficiency.
The lot of manual workers is generally little if any better than that of workmen employed in private concerns. Not until 1888 did any public body decide to insist on the payment of “fair wages” for any work done for it, and even to-day such bodies pursue the policy of getting labour as cheaply as possible. Women are largely employed wherever possible; hours of labour are seldom shorter and wages seldom higher than those of private factories; speeding-up, fines and deductions, and the possibility of sudden dismissal are all part of public employment. Trade unionism in many lands is either forbidden or grudgingly tolerated, a strike is treated as a rebellion against the state, and employees are refused that right of access to a wages board or arbitration court which has been given by the state to those working outside. Frequently the state tries to impose restrictions upon the actions of its workers: Belgian railway and postal employees were before the war forbidden to join a co-operative society: men in France have lost their jobs because they went to Mass or were socialists. In most countries public employees are forbidden to stand for election; in some places it is unsafe to vote against the government; in others one may not comment on the administration of another department, and in some occupations women are dismissed on their marriage. The public body is seldom a model employer. It may be as despotic as any self-made capitalist, and make no attempt to share the work of management with its employees.
On the other side of the picture we have possible or actual dangers. The worker is also a voter; the economic servant is also the political master at election times. Hence there is a temptation to pander to any influential section, a willingness to tolerate poor work and the “ government stroke,” a readiness to concede demands for fear of injuring party prospects at the Polls. And so we swing round again to the whole question of the standard of intelligence and character in a democracy.
Conclusion. Thus, to sum up, while public enterprise has spread over a wide field, its success has been varied. It has not removed the idle rich class, for often the state has had to buy out a private company, and thus given the former owners an assured income nearly (or quite) as large as they formerly drew from the profits.
It has raised almost as many problems as it has solved-problems of control, of technical progress, of finance, of employment. In cases it has given excellent service and paid its way; in other cases its service is poor, and its financial results disappointing. It has done little to alter the distribution of wealth, and little to solve the labour problem. It seems to succeed on certain lines, in which the work is the rendering of services rather than the manufacture of goods. It is doubtful whether it will be able to tackle agriculture, the supply of necessaries, luxury and speculative trades; one cannot hope that it will build up new industries or foster much overseas trade.
Books Recommended. Davies, E., "The Collectivist State in the Making”; Snowden, P., “Socialism and Syndicalism”; Commonwealth Year Book; Supplement on “State and Municipal Enterprise" (New Statesman, May 8, 1915); Madsen, A. W., "The State as Manufacturer and Trader’’; Dawson, W. H., “Municipal Life and Government in Germany' Knoop, D., “Principles of Municipal Trading''; Howe, F. C., “Socialized Germany.
SYNDICALISM, GUILD SOCIALISM, AND BOLSHEVISM
At the beginning of the present century socialism seemed to be the last word in social reconstruction. Of any stage beyond socialism, of any body of critics inside the socialist society, there was no thought.
But there is nu finality in human ideas or institutions, and by 1912 the socialist found himself facing two enemies instead of one. The capitalist still fought to defend private enterprise, but a new combatant—the syndicalist-had entered the ring, and his blows rained almost as heavily on the head of the socialist as on that of the capitalist.
Syndicalism first attracted popular attention in Great Britain during the industrial unrest of 1911-12, and a large literature grew up around the subject. It was then discovered that the idea was at least ten years old; that it had been born in France before 1900, and had gained adherents in Italy and North America in the following years; that its intellectual leaders were, in the words of Sombart, good-natured, gentlemanly, cultured people, lawyers, philosophers, and professors. Nay, more, it was found that the word, literally translated, meant nothing more than “trade unionisin,” being derived from the French word “syndicat,” which means trade union.
General Character. Syndicalism is still far from being a completely developed body of ideas. It is vague on many essential points, and its advocates differ on important matters of detail. But on three general propositions all syndicalists are agreed.
(1) “The working class and the employing class have nothing in common. The Marxian doctrine of the class war, abandoned by many socialists, especially in parliament and on the hustings, is revived in all its fervour and intensity. There is no such thing as society, no social unit; there are “two worlds, which have contrary ideas of life.” Between them there is incessant guerilla warfare, which will some day develop into a pitched battle.
(2) When that day comes the workers must know for what they are fighting, and syndicalism therefore puts forward its aim, its goal. That aim is the overthrow of capitalist ownership and control of industry, and the transfer of all industries into the hands of the unions. Industrial democracy is the ideal, and the union is to own and govern the industry at which its members work; the miners will manage the mines, the railwaymen the railways, and so on. Syndicalism gives unionism a goal. Unionists must no longer be satisfied with the old motto, “A fair day's pay for a fair day's work”; they must realize that in their organization they have a weapon which can destroy the wages system, and be the foundation of quite a new economic order.
(3) This new world is to be brought into being as the result of revolutionary direct action. The syndicalist is determined to avoid political action, because it is worse than useless; it is a broken reed unless one has economic power as well. Given the latter, the former is superfluous, for he who controls economic forces controls all. Industrial aims must be won by