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Show H I THE FOUR PARTIES TO INDUSTRY m By W. L. Mackenzie King M ANY have attempted to interpret the new world into which we are passing. It has been m the special business of the editor for some B time both to observe phenomena and to read its man- j B ifold interpolations. Nowhere has he found in as M small compass such clear analysis and sound con- structiveness as in an address given March 13. 1919 HT before the Empire Club of Canada at Toronto, a part of which is printed below by the courtesy of the I H - peaker who is equally at home in the United States H C j , and Canada. ... ii t I M We are accustomed to discuss the problems ot in- B dustry in terms of Capital and Labor. The inability I to find a workable solution to many of these prob- B lems arises from a vision thus circumscribed and an B ignoring of other factors equal in significance and B importance. To carry on industry in any but the B most primitive way. four parties, discharging sep- B arate and distinct functions, are necessary. B First of all. there is Labor, which supplies the B muscular and mental energy necessary to effect the H processes of immediate transformation. (Next there is Capital, which is necessary to provide pro-vide the raw materials, the appliances, and equip- ment essential to industrial processes, and the ad- 1- I vances in the way of food, clothing ad shelter re- B quired by Labor pending the distribution of the fin- H I ished product. B W - Then there is Management, or Directing Ability. B So frequently has Management been associated with B the ownership of capital, that the identity of the form- B' cr has more or less been merged in the latter. How- B ever, a moment's reflection is sufficient to disclose B the complete dissimilarity of function between the B two. Capital's contribution to Industry is in the H nature of material substance loaned by way of in- H vestment. Its possessor may be any kind of person --1: from a social parasite or ne'er-do-well who is the Hi inheritor of a fortune, to an infant totally incapable B of any service to industry, and whose property is B """" necessarily held in trust. Managerial ability, on the B other hand, is in the nathre of personal service of I the very highest order, and is wholly necessary, notj r only to bring about efficient co-operation between Capital and Labor in the work of production, but m also to effect and maintain right relations with the B fourth party, without whose co-operation in all that B pertains to industry the other three parties could H accomplish little or nothing. B The fourth party is the commhnity, and that B entity which we speak of sometimes as organized B society, under whose sanction all industry is carried B on, and by whose continuous co-operation with the B other parties to industry, production, distribution, BB and exchange are rendered possible. B Not only are the four parties necessary to indus- B i try, but they are equally necessary to one another. B Capital can do nothing without Labor. Labor can B do nothing without Capital. Neither Labor nor Cap H ital can co-operate effectively in industry save under H the guiding genius of Management; Management H however great its genius, can do nothing apart from ! the opportunities and privileges the Community af fords. If all four parties are necessary to industry, and IH equally necessary to one another, then, surely all KM four should have some voice in the control of in dustry, and with regard to the conditions under which 'their services to industry are rendered. Is our present organization of industry in any wav suggestive of a partnership in which Labor, Capital Cap-ital Management, and the Community are regarded as inter-related and inter-dependent? Far from it, as everyone knows who has given the organization of industry a moment's reflection.-- I am dealing, of course, only with the dominant types of large industrial in-dustrial organization, for it is mainly from this source that our present problems arise: transportation, manufacturing, mining, etc., etc. So far as control goes, it is all in the nature of a monopoly of control con-trol on the part of Capital. The owners of capital, the capital investors, choose the Board of Directors; the Board of Directors Direct-ors choose the Management and dictate ihe policies. The Management regards itself as responsible solely to Capital. Labor and the Community become a consideration con-sideration only so far as they the able to make their power felt. Profits for Capital are a first consideration; consider-ation; profits usually as high as it is possible to make them. Wages to Labor, prices to the Com-invnity, Com-invnity, are what they can be kept at, what the market will allow. Labor and the Community arc not regarded as partners, entitled to share, through common knowledge, in a common venture, in gains ad losses alike. Such control as they exercise is a control that is forced, not a control that is voluntarily volun-tarily shared; a control that in the nature of things begets an attitude of militancy on their part. It is this monopoly on the part of Capital in the control and direction of industry that has led to the developments that arc described as socialistic, ultraradical, ultra-radical, and even anarchistic. More than any other factor, it lies at the root of the industrial upheavals of the present time. The other parties to industry, though feeling themselves entitled to be regarded as partners, have despaired of gaining any measure of joint control by concessions. They have felt themselves them-selves driven to exact, by force, what they believe to be their rightful dues. In the case of Labor, this demand for recognition in the control of industry has asserted itself in the form of strikes. In the case of the Commuity it has taken the form of arbitrary enactment, en-actment, leading to the assumption of single control by the state or municipality. What is the Socialistic State or Collectivism which is its industrial expression, other than industry so organized or-ganized as to transfer industrial control from Capital to the Community, to the exclusion of the other parties? par-ties? Under the Socialistic State, the government would choose the managers of industry, would own the instruments of production, levying taxation where more Capital was required, and would fix the wages of Labor, and the prices at whics commodities are to be sold. The War has revealed that the Socialistic State, which many wokers have been led to believe is certain cer-tain to be beneficient and idealistic, may become the most bureaucratic and autocratic of agencies, holding within its power the lives and freedom of men, as well as the conditions of their employment. I Germany has given that object lesson to the world. The little there has been of State Control during the war has also revealed that the substitution of political managers for industrial managers is not i likely to be the best for either industry or the State. Of that, all countries have had a taste. |
