# The Case for Capitalism/Chapter 10

When we turn to the National Guilds; an Enquiry into the Wage System, and the Way Out, by A. R. Orage, or by S. G. Hobson, edited by A. R. Orage, we find very much the same point of view as Mr. Cole's, but a different method of approach. It deals with the problem of reforming our economic system with the jovial cheerfulness of a Newfoundland puppy worrying a door-mat. It starts with the assumption which we have found to be common to so many of the people who want to turn society upside down, that labour at present produces everything that is produced and is robbed of a large part of its product by buccaneers who exploit it, and that it is therefore labour's duty to deal with the robbers as robbers should be dealt with. Here is an example both of the style of this book and of the methods which it advocates (page 5): "Labour must realize that its emancipation can only become possible when it has absorbed every shilling of surplus value. The way to do this is by tireless and ​unrelenting inroads upon rent and interest. The daily and weekly Socialist bulletins should tell, not of some trivial success at a municipal election, or of some unusually flowery flow of poppy-cock in Parliament, but of wages so raised that rent-mongers and profiteers find their incomes pro tanto reduced. And there is no other way. Profits are in substance nothing but rent. Rent, whatever its form, reduced to its elements, is nothing more and nothing less than the economic power which one man exercises more or less oppressively over another man or body of men. Destroy the power to exact rent and ipso facto rent is destroyed. This is the only way of salvation, of emancipation—the only possible release from bondage." Here we find the assumption that surplus value is produced by labour and absorbed by somebody else. In fact, as we have seen in our analysis of the previous chapters, labour produces surplus value with the assistance of management, materials and tools, which are supplied to it by other people, and takes a large part of that surplus value for itself, since its own product, if it had not this assistance, would be nothing but what it could gather in the woods or scrape out of the ground with its finger-nails.
​In their contempt for the State Socialists, the present writers are just as earnest as Mr. Cole, and express themselves still more vigorously: "Is it any wonder," they ask (page 16), "that politics now stink in the workman's nostrils and that he has turned firmly to 'direct action'? Had a living Socialist Party found itself in Parliament, instead of the present inert Labour Party, led by charlatans and supported by Tadpoles and Tapers, the energies of Labour might possibly for a slightly longer period have been fruitfully employed in the political sphere." And on page 20 we find that "the Independent Labour Party exemplifies these good and bad qualities. . . . Not an idea of the slightest vitality has sprung from it, its literature is the most appalling nonsense, its members live on Dead Sea fruit. The joyous fellowship which was its early stock-in-trade has long since been dissipated; the party is now being bled to death by internal bickerings, dissensions and jealousies. It is the happy hunting-ground of cheap and nasty party hacks and organizers, who have contrived to make it, not an instrument for the triumph of Socialism, but a vested interest to procure a political career for voluble inefficients."
Such is the spirit in which the Guild cham​pions deal with the work of those who have gone before them in the effort to improve the lot of the wage-earner. Does it promise well for harmony and team-work on the part of the Guilds, if they should be established?
Like Mr. Cole, the writers attach great importance to the distinction between wages and pay. It is really very difficult for the uninstructed outsider to understand this fine metaphysical distinction. It would seem at first sight that as long as a man receives money, to be exchanged into goods and services, for work which he renders to the community, no very far-reaching revolution can be achieved by calling it pay instead of wages. However, there evidently is some really essential distinction since the high-priests of the National Guilds lay so much stress upon the matter. Let us quote these writers again (page 80):—
"The bulwark which protects surplus value from the wage-earner, which secures it to the entrepreneur, is the wage system. That is why it must be abolished. Now let us suppose that the work of the London docks were done, not by more or less casual wage slaves, but by a properly organized and regimented labour army, penetrated by a military spirit attuned to industry."
​It may be observed by the way that after Mr. Cole's vigorous protest against the "regimentation" involved by State Socialism, it is rather sad to find these authorities on National Guilds striving after a properly organized and regimented Labour army. "Do soldiers receive wages?" they continue (page 81): "No, they receive pay. 'But,' cries the practical man (and possibly even Mr. Sidney Webb), 'what earthly difference is there between wages and pay?' Let us see. The soldier receives pay whether he is busy or idle, whether in peace or war. No employer pays him. A sum of money is voted annually by Parliament to maintain the Army, and the amount is paid in such gradations as may be agreed upon. Every soldier, officer or private, becomes a living integral part of that Army. He is protected by military law and regulations. He cannot be casualized, nor can his work, such as it is, be capitalized. The spirit that pervades the Army is, in consequence, different from the spirit that dominates wage slavery."
Here then we find the real difference between wages and pay. The pay is voted by Parliament and granted to the worker, whether he is busy or idle. This is the same view as was expressed by Mr. Cole when he spoke of ​"recognition and payment as a human being, and not merely as the mortal tenement of so much labour power for which an efficient demand exists." Once more we have to ask, would such a system of payment produce good work? I once heard this question raised before an audience that knows more than anybody else about the answer. It was when I was lecturing at the back of the front in Belgium in March 1918. My subject was National Finance, but in the discussion which followed, this point about wages and pay was introduced by a private who appeared to be a disciple of the Guildsmen. Why, he asked in effect, cannot wage-earners be paid just as soldiers are paid? I answered that it was not quite evident that in ordinary life we should get good work by this system. "Everybody knows," I said, "how you soldiers work when you are fighting, but when you go out to do fatigue work"—and a roar of laughter from the rest of the audience made the roof of the big hut ring, and left no more for me to say.
As it happened I had been reading Mr. Orage at home not long before, and had pointed out his remarks about the spirit of the Army to an officer just back from the front; he observed that anybody who had seen soldiers ​doing any fatigue job would know that at least three times as much work would be done by wage-earners under civilian conditions. If then the workers worked with the fatigue spirit of the Army instead of the battle spirit, there would be an awkward dwindling in the funds out of which their pay could be annually voted by Parliament. Parliament might vote the money, but unless goods and services were turned out, that money would be worth only scraps of paper. Moreover, the soldier is not only "protected by military law and regulations," he is also bound by them and liable to very severe penalties if he breaks them. Is industrial militarism really the ideal of Messrs. Hobson and Orage?
They go into more detail than Mr. Cole in reference to the arrangements under which the workers would be paid. On page 146 we find that "once a member of his Guild, no man need again fear the rigours of unemployment or the slow starvation of a competitive wage. Thus every transport worker, providing he honestly completes the task assigned him, will be entitled to maintenance—a maintenance equal to his present wage, plus the amount now lost by unemployment, plus a proportion of existing surplus value—that is, plus his ​present individual contribution to rent and interest; and, finally, plus whatever savings are effected by more efficient organization. He will not, therefore, receive wages (as we now know them), because he will receive something much greater—possibly three times greater than the existing wage standard."
Here we find two difficulties. "Once a member of his Guild"—one is brought up by the question, how will membership of these Guilds be arranged? At present people do have more or less choice of the kind of occupation in which they will spend the working part of their lives. In the case of most of us, it is true, economic fate or hazard marks out some course for us, and in most cases the choice, such as it is, is made long before we can be said to have minds to make up on the subject, and still longer before we have sufficient experience and knowledge to exercise the choice well. Nevertheless, some choice there is, and it is possible and does happen, that people who have made a wrong choice, or think so, can later in life change from one occupation to another. But how much freedom would these organized and regimented Guilds allow to any aspiring youth who wanted to become a member, and by what methods and ​by whose decision would the difficult question be solved as to the entry of the young workers into the different lines of occupation?
These questions clearly involve endless possibilities of friction. They are faced in a book called The Meaning of National Guilds by C. E. Bechhofer and M. B. Reckitt who show more capacity than other Guild champions for seeing practical details and trying to deal with them. On page 310 they say that "each man will be free to choose his Guild, and actual entrance will depend on the demand for Labour. In fact the principle will be that of first come, first served. In the event of there being no vacancy, it will be open for the applicant either to apply for entrance to another Guild, or during his period of waiting to take up some occupation of a temporary character. . . . Labour in 'dirty industries'—scavenging, etc.—will probably be in the main of a temporary character, and will be undertaken by those who are for the time unable to obtain an entry elsewhere."
This is all very sensible and practical, but it is not a very comfortable prospect for the aspiring Guildsman. If he has to wait till he is wanted, where is his freedom to choose his Guild? He will be no better off in this ​respect than he is now under capitalist tyranny, and will find himself in the meantime relegated to a drain-cleaning job. Moreover, the same authorities tell him that in extreme circumstances, a Guildsman will be liable to expulsion. And what will become of him after that?
Again we find that according to Messrs. Hobson and Orage every worker would be entitled to maintenance, "providing he honestly completes the task assigned to him." Who is to decide concerning the honesty of the completion of the task? Presumably the decision will be arrived at by the Guild officers elected by the workers. And here again we see the possibility that those Guild foremen will be most popular, and therefore most likely to be elected, who will take the most lenient views concerning the honesty of the work done by the Guildsmen. Whether this system will be conducive to brisk production can only be very seriously doubted, and we are left wondering what is going to happen to the unfortunate worker, who justly or unjustly is condemned as not having honestly completed the task assigned to him. Apparently in this case he will not be entitled to maintenance. If so, what becomes of that most attractive arrangement under which the National Guilds are ​to assure to the worker recognition and payment as a human being, and not merely as the mortal tenement of so much labour power for which an effective demand exists? Such, combined with the right "to make well or ill," was Mr. Cole's ideal, but Messrs. Hobson-Orage are only going to assure the worker payment, not even as the tenement of labour power, but as an honest and efficient producer of it. But they go on to strike a loftier note and to say that (page 147) "after all maintenance is not the only consideration in life." This is very true, but without a certain amount of it life is impossible. In fact they seem to expect that, under the Guild system, hard times may have to be faced and that nobody will mind. On page 111 we read: "Nobody doubts that the majority of wage-earners would be willing, any one of them at any moment, to exchange their position as wage-earners for the position of economic independence, even if this latter involved a permanent reduction of financial income;" and on page 113: "We may find ourselves, in fact, if we abolish wage slavery, worse off than we are now."
If the wage-earners got real freedom, probably many of them might be willing to be worse off. But it has been shown that ​under the Guilds their freedom would still be qualified by the limits that are imposed on that of all of us who work for others, who work for us. And if a lower standard all round is to be the result of the Guild system, it clearly will not lead us to the better world that can only be won by hard and efficient work, and a greater output of material goods, giving us a chance of winning goods that are more important.
Moreover, from page 136 of the same book: "Even if the process of wage approximation goes much further than we now foresee, it is nevertheless inevitable that graduations of position and pay will be found necessary to efficient Guild administration. We do not shrink from graduated pay; we are not certain that it is not desirable. There will be no inequitable distribution of Guild resources, we may rest assured; democratically controlled organizations seldom err on the side of generosity. But experience will speedily teach the Guilds that they must encourage technical skill by freely offering whatever inducements may at the time most powerfully attract competent men. There are many ways by which invention, organizing capacity, statistical aptitude or what not may be suitably rewarded. It is certain that rewarded ​these qualities must be." So that even under the Guilds there are to be considerable differences in the rates of the reward given to various kinds of workers. This admission is of course entirely sensible and encouraging for the future efficiency of the Guilds if ever they come into being. At the same time it opens the door to a good deal of possible friction and jealousy, seeing that the rates of pay will have to be decided by officers elected by those who are going to receive the payment. And further, is it not an abandonment of the whole ideal under which the labourer is supposed to receive the whole of what he produces? If "organization, invention, statistical aptitude or what not" are to be suitably rewarded, are not the Guilds, as private capitalists are alleged to do now, going to compel the worker to produce surplus value, which he will not be allowed to consume?
However, such is the robust belief of these writers in the perfection of the natures of everybody who belongs to a Guild, that they remark on page 148: "Nor need we shrink from the further conclusion that the appointment of a hierarchy involves a suitable form of graduated pay. . . . In this connection, we pin our faith to the democratic idea without reserve. We believe the workman is the shrewdest judge of ​good work and of the competent manager. Undistracted by irrelevant political notions, his mind centred upon the practical affairs of his trade, the workman may be trusted to elect to higher grades the best men available. In the appointment of their check-weighmen, for example, the miners almost never make a mistake. Doubtless injustices will from time to time be perpetrated; but they will be few compared with the million injustices done to-day to capable men who are habitually ignored in the interests of capitalist cadets." This pleasant trusting faith, which imagines that because workmen can elect capable check-weighmen, they will also be able, without any further education or experience, to choose the right people to manage the whole organization of industry, is a pleasing spectacle in these cynical, sceptical days, and one would be sorry to disturb it. But it must be observed that the higher rates of pay to be granted to this "hierarchy," and also to "inventive organizing capacity, statistical aptitude, or what not" will make a big hole in the whole of the produce. If, as quoted above, labour's emancipation can only become possible when it has absorbed every shilling of surplus value, its emancipation will still be remote, when all these highly paid ​statisticians and hierarchs are exacting what will look very much like rent, as defined by our authors in the same passage. If the capitalistic manager's salary is only to be replaced by the Guild hierarch's higher pay, will the difference be really essential? Every one who has read Dumas remembers how Chicot the Jester induced Frère Gorenflot to eat a fowl on Friday by making him christen it a carp. But Gorenflot wanted to eat the fowl and was quite ready to be humbugged. Will that very shrewd person, the British wage-earner, be equally ready to be duped by a change of name, when he is asked to hand over "surplus value "to hierarchs instead of managers?
Messrs. Hobson-Orage admit frankly the likelihood of strife between the various Guilds. "We may expect," they say (page 228), "dissatisfaction among the weaker Guilds when the stronger from time to time impose their wills, that is, in the last resort, exercise their 'pull.' In what direction, then, can we reasonably anticipate dissatisfaction, followed by strenuous agitation for rectification? Primarily, we imagine in the value each Guild sets upon its own labour, which may be disputed by the other Guilds. In our chapter 'The Finance of the Guilds,' we remarked that in the earlier ​stages the more highly-skilled industries would insist upon a higher value being attached to their labour than to the labour of the so-called 'unskilled' groups. . . . This struggle, too, will be waged inside the several Guilds as, for example, between the fitter and his labourer, both members of the same Guild, or the mason and his labourer, also members of another Guild. But the domestic arrangements of the Guild do not concern us here; it is when the Guilds, as such, come to grips with other Guilds to establish the general value of their respective work and functions that the main battle will be joined. Thus, agriculture is now poorly paid. . . . But the agricultural Guild" [as arranged by the writers in the imaginary group of Guilds which they have produced] "is numerically the strongest of them all. May we not then expect strong action by that Guild for a revaluation of agricultural work and products? . . . Will the claim for a higher valuation of agriculture, both in its actual products and as a supremely important element in our national life, be met by the other Guilds in a niggling or in a generous spirit? In this connection it is well to remember that even during the past decade, extremely acrimonious disputes have arisen between existing trade unions, notably as to ​delimitation of work, and if such large questions were to be settled in the same spirit, it would prove of ill-omen to the future greatness of the Guilds. But the Guilds, as we have pictured them, are not the existing unions, but the unions plus the practical intellectuals, the labour and brains of each Guild naturally evolving a hierarchy to which large issues of industrial policy might with confidence be referred."
If the practical intellectuals are to include such exponents of Guild doctrine as Messrs. Cole and Hobson-Orage, the specimens which have already been quoted of their dialectical methods and their controversial geniality seem to promise that the world of the National Guilds will have a pleasant resemblance to Donnybrook Fair. Messrs. Reckitt and Bechhofer in their book already referred to dealt with the question of inter-Guild strife as follows (page 325). "A query often brought to confound National Guildsmen is this: What would happen to a National Guild that began to work wholly according to its own pleasure, without regard to the other Guilds and the rest of the community? We may reply, first, that this spirit would be as unnatural among the Guilds as it is natural nowadays with the present anti-communal capitalist system of industry;" [but ​it may be observed that any anti-communal capitalist who nowadays worked wholly according to his pleasure without regard to the rest of the community would very soon be bankrupt, because the rest of the community would not buy his goods]. "Secondly, if it did arise in any Guild, this contempt for the rest of the community would be met by the concerted action of the other Guilds. . . . A Guild, however, that thought itself ill-used by its fellows would be able to signify its displeasure by the threat of a strike; but it is to be hoped that there will be sufficient machinery for the successful settlement of inter-Guild dealings that occasion for this would seldom arise."
But a still more serious source of inter-Guild friction is suggested by the latest book on the subject, The Guild State by G. R. Stirling Taylor, which appeared in the autumn of 1919. This writer actually suggests competition between the Guilds. This seems to be quite contrary to the doctrines of the earlier champions who, unless I have altogether misunderstood them, intended the Guilds to cover the whole of the industry concerned. "The Guild," said Messrs. Hobson-Orage on page 132, "means the regimentation into a single fellowship of all those who are employed in any given industry." ​Mr. Cole told us (page 132) that "only an Industrial Union, embracing the whole personnel of an industry, can assume control over that industry." This seems to be an essential part of the whole scheme. But now comes Mr. Stirling Taylor and observes (page 95) that: "Surely there will be many advantages, if just a healthy competition—and not more than healthy, remember—can be maintained in a town between, for example, a—reasonable number of competing bakers' Guilds."
There certainly will be many advantages to the consumer, but this new element in the Guild State seems to upset the whole structure that has been built up by its former advocates. What becomes of the control of production and its product that Mr. Cole believes to be necessary to the worker if he is to be set free from his "degraded status," if the Guilds have to compete for the custom of the consumer by producing what he wants in competition? What becomes of the workers' right of choosing "whether they will make well or ill"? Under competition the consumer prefers things that are made well, if he is able to distinguish them. Once more we are left wondering what it all means.
Finally let us see how the Guildsmen pro​pose to deal with the capitalist, the man who owns the plant and takes the risk of productive failure. He is just to be relieved of his property, and Messrs. Hobson-Orage call attention to the great advantage of this plan over that of the State Socialists, whom they credit with the intention of buying him out. On page 179 of their book they set out the advantage in the form of an equation as follows:—
"Cost of production under State Socialism = raw material + standing charges + rent + interest + profits + increased wages. Cost of production under Guild Socialism = raw material + standing charges + pay."
And on page 240 they develop Mr. Cole's suggestion of "catastrophic action or general strike" in detail in the form of a dialogue between a Guild deputation and the Chairman and General Manager of a large industrial enterprise that divides £100,000 a year amongst its shareholders. The deputation admits that the company pays standard rates of wages, but says it has decided that the men shall no longer work on a wage basis. In the first place, the men now on the pay-rolls must continue there whether there is work for them or not. The Guild is going to "assume partner​ship" in the business, supplying the labour and taking half the profits. In five years' time, it intends to take another slice of the profits. It asks whether the shareholders would rather have £50,000 or nothing? When the General Manager raises the question of the future supply of capital, the deputation airily observes: "Come to us and we will arrange it. You will find us as partners, always glad to co-operate," and ends the discussion, which goes on for some pages, by saying: "By all means call together your shareholders, but you, of course, understand that we are quite indifferent what they say or do. Unless our proposals are accepted in a month, we shall close down your works."
At the end of this passage the writers remark, with perhaps pardonable pride, that "Samuel Johnson always 'gave the Whig dogs the worst of it,' and perhaps in this discussion we have given the exploiters the worst of it." By the exploiters they presumably mean the Chairman and General Manager representing the owners of the factory. What the deputation practically says is that they mean to take from the owners of the factory the interest and profit to which they are entitled in return for its use in production. One wonders what would happen if the Chairman and General Manager ​were to answer, as they most probably would: "Very well, you are going to make terms on which it is impossible for our shareholders to receive any interest or dividends on their undertaking; we cannot accept these terms, and we will dispense with the services of those whom you represent until they are ready to work at the union rates which we have always paid." Would the capitalist be altogether helpless? It might not be safe to be quite certain that he would. On a later page (282) the writers ask: "Falling back upon their undoubted legal rights to the instruments of production and distribution, what could they (the profiteers) do?" But with astonishing inconsistency they suggest that: "In exchange for their present possession of land and machinery, the State might give them, as rough-and-ready justice, an equitable income either for a fixed period of years or for two generations." Then what becomes of that beautiful "equation" showing the advantage of Guild over State Socialism? And in any case, when the existing capitalist has been dealt with, the Guilds will have to provide fresh capital, and will have to pay for it. The capital goods—machinery, etc.—needed by the Guilds will have to be made by somebody who will have to be supported and sup​plied with material out of "surplus value." And, if there is to be any progress, risks will have to be taken with experiments, and some one will have to pay for failures. Capital, as always, will have to be paid its wage—or receive its pay.
Such is the tissue of inconsistencies and difficulties that is involved by the system of National Guilds as so far expounded. The evident sincerity and earnestness of its advocates cannot blind us to the fact that their scheme has not yet been thought out in a workable shape, and that, as they themselves acknowledge, it might lead to a lowering of the workers' standard of comfort, while it is hard to see that they would gain any real increase of freedom. That it might also result in serious disputes and disagreements, both within and between the Guilds, is admitted by its advocates; and the temper in which they flout the work and efforts of the older Socialists and others who are trying to improve the lot of the wage-earners by other methods makes one doubt whether they have it in them to put forward a great and sound reform. Such work is not often done in such a spirit.