# The Case for Capitalism/Chapter 9

Every one who has recognized the evils of the Capitalist system, and been forced to the conclusion that State Socialism, though it might cure some of these evils, could do so only at the risk of a great loss in productive output and by the establishment of bureaucratic control that might have deadening effects on moral and intellectual growth, must have been thrilled, as with the hope of spring, when he or she heard that a new school of Socialism was setting out to make things better by means of National Guilds. The word guild is hardly associated with freedom, having, as hitherto used, generally implied a more or less close corporation, very jealous of its privileges. Nevertheless, it had a pleasant mediaeval smack on the mental palate, and everybody but the most uncompromising economic Tories turned to the study of the literature of the new faith with a hopeful mind, most ready to find salvation, if it was really to be had.
​Before we entered on this study we had probably heard from conversation with its disciples a rough outline of its doctrines—economic freedom to be secured by the abolition of the wage system, every industry to be organized into a great watertight blackleg-proof union including all the workers by hand or brain, the capitalist to be got rid of, the great new unions to be the new Guilds, which were to give the worker freedom, and a new community to be founded on the basis of "organization by function."
From this sketch, which proved on examination to be very near the mark, it appeared that there was much in common between Guild Socialism and Syndicalism, which has hitherto had little support in this country. Concerning it Mr. Snowden tells us, in his book on Socialism and Syndicalism, page 205, that "there is no authoritative and definite statement of its philosophy or its policy or its aims by those who profess to accept it. Syndicalism is one thing according to one of its exponents, and something very different according to another." This of course is inevitable in the case of a new doctrine that is developing itself, and Mr. Snowden was nevertheless able to tell us that Syndicalism "proposes that the control of ​production shall be exercised by the workers in the various industries—that is, that the railways shall be managed by the railway workers, the mines by the miners, the post office by the postal servants, and so with regard to other industries and services. Syndicalists have now repudiated the claim that these industries shall be owned by the workers in the separate industries. . . . The Syndicalist, like the Anarchist, repudiates the State, and would make the social organization of the future purely an industrial one." As we shall see, it is chiefly in the matter of their attitude to the State that Syndicalism and Guild Socialism differ, since the latter has, apparently, to leave a good deal to the State.
Certain obvious difficulties naturally came into the mind of any one who took a first draught from the Guild Socialist fountain as above described. How, one wondered, could economic freedom be secured for the producer except at the expense of himself as a consumer? And as every one, as a rule, produces one, or a fraction of one, article or service and consumes thousands of them, is the sum total of the, freedom of each likely to be furthered by this process? How are the Guilds to solve the question of value—that is, on what basis are they ​to exchange their products? State Socialism could solve this problem by the Prussian process of rationing, leaving no freedom of choice to anybody, either in what they make or what they consume. But how are the Guilds to solve the question? Would not enterprise and initiative be checked under Guild monopoly almost as seriously as under State control? Who is to decide as to right of entry to a Guild? Would the guildsmen really work better for a Guild than for an ordinary employer? What would happen if any of the Guilds, exercising, as they would, a watertight monopoly, started the game—at which all could play with differing degrees of success—of mutual exploitation?
And this strange new formula about "organization by function"—what did it mean? If a man is to be a butcher, baker, or candlestick-maker first, and a citizen of his country, or a member of the human brotherhood, second, it seems to be a rather material standpoint. It would surely tend to produce a selfish and sectional outlook, very different from the conception of each as a member of a great community, in which divergent interests are, or might be, attuned by co-operation and competition into a cheerful and inspiring harmony. A study of Guild Socialist literature, in spite of ​the evident earnestness and sincerity of its writers, does not remove these difficulties. State Socialism we found to be theoretically possible. With an efficient bureaucracy, and a docile people ready to work hard and to be told what to produce or consume, the system might work well, though only by eliminating the surprises and failures that give life much of its zest and most of its discipline. But it is difficult to see how the schemes of the Guild Socialists could be fitted into a system that could work, without the sacrifice of most of the objects that they hope to secure.
A book on the subject of National Guilds from which I have already quoted freely, is Self-Government in Industry, by G. D. H. Cole. On page 4 he tells us: "I am putting forward in this book some general suggestions for industrial reconstruction. These suggestions are based upon the idea that the control of industry should be democratized; that the workers themselves should have an ever-increasing measure of power and responsibility in control, and that capitalist supremacy can be overthrown only by a system of industrial democracy in which the workers will control industry in conjunction with a democratized State. This is the system of National Guilds, ​and its dominant idea is that the individual worker must be regarded not simply as a "hand," a decreasingly important adjunct to the industrial machine, but as a man among men, with rights and responsibilities, with a human soul and a desire for self-expression, self-government and personal freedom."
This dominating idea is cherished by most of us in these days. But is it likely to be achieved by the establishment of a group of great monopolies? It is rather disappointing—after the bitter criticisms of State control and bureaucratic tyranny expressed by Guild Socialists, especially by Mr. Cole—to find that the control of industry by the workers is to be exercised "in conjunction with a democratized State." Perhaps, however, the word "democratized" is expected to cover a multitude of blessings, and perhaps it might actually do so. Mr. Cole continues a little later (page 6): "Recognizing the paramount need for destroying the wage system and giving the producers the fullest possible share in the control of their life and work, National Guildsmen saw also the true function of the State and the municipality as the representatives of the consumers, of all those who had a common interest born of neighbourhood and common use of the means of ​life. They set out therefore to devise a system by which the control of industry might be shared between the organizations of producers and consumers, so as to safeguard the interests of the community of consumers and at the same time to give the workers freedom to organize production for themselves." And on page 63 he tells us again: "In the first place National Guildsmen clearly know what they want. Their aim is a partnership between State and Labour, accompanied by the abolition of the system of capitalist production."
It thus appears that, under the National Guild system, the much-abused State is to exercise extremely important functions. It is to represent the consumers and safeguard their interests, but at the same time the workers are to have freedom to organize production for themselves. How far is this freedom possible? And what does it mean? Does it mean that the workers are to be free to turn out whatever article they like, irrespective of the wishes of consumers with regard to the kind of things they would like to have and enjoy? And if so, if the workers happen to produce an article which nobody wants, how are they to be paid for their work? In other words, what right will they have to any of the goods which ​other people are producing? In another part of his book, as we shall see later, Mr. Cole says that the workers must be freed "to choose whether they will make well or ill," the consumer being apparently invited to take the article made or leave it. But production will have to be dominated, under a system of National Guilds as under every other, by the needs of the consumer—either expressed by himself by his purchases in the market, as under the present system, or as expressed, as is conceivable under State Socialism, by the decision of a bureaucracy as to what sort of articles it is good for the community to enjoy. In whatever way the decision is arrived at, the producer, if he is to justify himself economically, has to produce what is wanted. If he does not produce what is wanted, his product has no economic value, and his freedom in production simply reduces him to a useless parasite working for his own enjoyment, instead of for the satisfaction of the needs of the community.
Until we go back to the state of the primitive savage supplying all his own wants, it is the inevitable lot of all workers to meet the wants of somebody else. We thus see at the outset that in this proposed partnership between the State and Labour there are seeds of a ​good deal of discord and friction which might lead to serious economic inefficiency. That is to say, unless the National Guilds representing the producers, and the State representing the consumers, work in complete harmony, the strikes and friction which are so serious a clog on the economic machine under our present system, might be replaced by even more bitter contests, more bitter because they would involve the whole society through its political machinery.
On this subject Mr. Cole does not seem to have thought the matter out very clearly, and here again one must admit that it is no just criticism of National Guildsmen to tell them that they have not got a cut-and-dried scheme to cover every possibility. He tells us (page 86) "that the various Guilds will be unified in a central Guild Congress, which will be the supreme industrial body, standing to the people as producers in the same relation as Parliament will stand to the people as consumers. . . . Neither Parliament nor the Guild Congress can claim to be ultimately sovereign: the one is a supreme territorial association, the other the supreme professional association. In the one because it is primarily concerned with consumption, government is in the hands of the ​consumers; in the other where the main business is that of production, the producers hold sway."
Again he says (page 87): "Where a single Guild has a quarrel with Parliament, as I conceive it may well have, surely the final decision of such a quarrel ought to rest with a body representative of all the organized consumers and all the organized producers. The ultimate sovereignty in matters industrial would seem properly to belong to some joint body representative equally of Parliament and of the Guild Congress. Otherwise, the scales must be weighted unfairly in favour of either consumers or producers. But if on such questions there is an appeal from Parliament and from the Guild Congress to a body more representative than either of them, the theories of State Sovereignty and Guild Congress Sovereignty must clearly be abandoned, and we must look for our ultimate sanction to some body on which not merely all the citizens, but all the citizens in their various social activities, are represented. Functional associations must be recognized as necessary expressions of the national life, and the State must be recognized as merely a functional association—'elder brother,' 'primus inter pares.' The new social philosophy which this changed conception of ​sovereignty implies has not yet been worked out; but if Guild Socialists would avoid tripping continually over their own and other writers' terminology, they would do well to lose no time in discovering and formulating clearly a theory consistent with the Guild idea, and with the social structure they set out to create."
What all this means, will perhaps be clear to people of exceptional intelligence. The ordinary plain reader can only see that Mr. Cole thinks it very likely that a Guild may have a quarrel with Parliament—wherein we heartily agree with him. Further, that Mr. Cole concludes that the ultimate sanction must be provided by some body, superior both to Parliament and the Guild Congress, representing both of them, and also representing not merely all the citizens, but all the citizens in their various social activities, and he is left wondering what that means. Also that the State must be recognized merely as a functional association, and he is still more bewildered, and he will finally agree very earnestly with Mr. Cole that the Guild Socialists should formulate a clear theory on the subject, and tell us how this queer conglomeration of ruling bodies could possibly work in harmony or with anything like practical efficiency.
​In the meantime if the consumer is to have any voice in the question of what is to be produced, and if, under the system of National Guilds, the State is to represent the consumers, it would seem that the freedom which is promised to the workers by Guild Socialism, will be very seriously qualified by State control. On a later page (page 106) Mr. Cole tells that the State "has no claim to decide producers' questions, or to exercise direct control over production; for its right rests upon the fact that it stands for the consumers, and that the consumers ought to control the division of the national product, or the division of income in the community." If the consumers are thus to decide concerning the division of the community's income, it is clear that the producing Guildsmen will have to work according to their wishes, and in return for pay provided by them. And the freedom of the Guildsman seems to be narrowed down to mere control of the "conditions under which work is carried on" (page 107). "The workers," says Mr. Cole on page 108, "ought to control the normal conduct of industry; but they ought not to regulate the price of commodities at will, to dictate to the consumer what he shall consume, or, in short, to exploit the community as the indi​vidual profiteer exploits it to-day." Under competition the "profiteer" can only "exploit the community" by selling it something that it chooses to buy. How the consumers are to express their wishes under the Guild system is not clear. Presumably it would be by the votes of the majority—a cheerful prospect for those who like their clothes and boots comfortable rather than fashionable, and whose taste in other things happens to be eccentric.
It is on the subject of the wage system that Mr. Cole is most interesting and illuminating. He tells us (page 154) that "the wage system is the root of the whole tyranny of Capitalism; . . . there are four distinguishing marks of the wage system upon which National Guildsmen are accustomed to fix their attention. Let me set them out clearly in the simplest terms.
"1. The wage system abstracts 'labour' from the labourer, so that the one can be bought and sold without the other.
"2. Consequently, wages are paid to the wage-worker only when it is profitable to the capitalist to employ his labour.
"3. The wage-worker, in return for his wage, surrenders all control over the organization of production.
"4. The wage-worker in return for his wage ​surrenders all claim upon the product of his labour.
"If," Mr. Cole continues, "the wage system is to be abolished, all these four marks of degraded status must be removed."
Let us look at these "four marks of degraded status." The fact that a man's labour can be bought and sold without the labourer is surely some advance, as indeed is acknowledged by Guild Socialists, on what they call chattel slavery (as distinguished from wage slavery), under which the worker and his labour were sold together, like so many cattle. The fact that a man sells his labour apart from himself, if it be a mark of degraded status, is shared by the labourer with all brain workers and members of professions who sell their skill or their products to consumers. The fact that when I sell a copy of this book I do not sell myself to my readers at the same time, seems to me to be rather an advantage than otherwise, both to me and to them.
But in a sense every man's work is a bit of himself, he puts something of himself into it, and the economic arrangement has enormous advantages by which a worker can sell bits of himself, that is to say bits of his work, in exchange for bits of other people, and so ​become, as producer and consumer, part of a great myriad-handed economic body in which all co-operate and contribute bits of themselves to the common good.
This system has infinite possibilities of harmonious development, but the modern fashion in thought seems to have decided that there is something radically wrong about it. Mr. Arthur Henderson, M.P., in a speech at an International Brotherhood Congress at the City Temple on September 16, 1919, stated that the workers wanted "a new method which would be based on the recognition of fundamental principles hitherto disregarded. Firstly, that human labour was not a commodity or article of commerce to be dealt with by the law of supply and demand as we now dealt with coal, or cotton, or iron ore, but it was that into which personality entered and through which personality was expressed." Can one with the best will in the world find any real meaning in this sounding phrase? Of course we all express our personality in our work just as in anything else that we do; but is that any reason why we should not exchange it for the work of others by selling it, and have it valued according to the extent to which others like it and want it, just as our other actions get social value from ​the approval or disapproval of those whom they affect? The economic test of our work's value, like the social test of our other actions, is weakened by the bad taste and judgment of public opinion; but can we find a better, without setting up an economic and moral tyranny, which, incidentally, is also quite likely to make bad mistakes?
The second mark of degraded status is the fact that the wages are paid to the wage-worker only when it is profitable to the capitalist to employ his labour. This degradation is also shared by the labourer with all other workers, including even the capitalist who lends for present production the products of work done in the past. The doctor and lawyer who work directly for their consuming patients and clients, can only do so if they can find patients and clients to employ them. The capitalist can only get interest on his money when it is invested in profitable enterprises or in the obligations and loans of communities, Governments and municipalities, which are enabled, by the production of taxpayers and ratepayers, to raise the money necessary to pay the capitalist his wage.
The third mark of degraded status lies in the fact that the wage-worker has no control over ​the organization of production—in other words, he is freed from the risk and responsibility of an extremely difficult and delicate business in which mistakes are often made causing loss to the capitalist, which the wage-worker is not asked to share. And the same thing applies with even greater force to the fourth mark of degraded status, the fact that the wage-worker surrenders all claim upon the product of his labour. He produces something which is only economically justified if somebody else wants it and will pay for it enough to cover the wages of the labourer and manager, establishment charges, depreciation of plant, and interest on capital. The business of selling the product is now recognized to be one of the most difficult and costly items in the business of production. If, as many besides the Guildsmen hope, the labourer proposes to undertake this very difficult job he can do it under the capitalist system and has already done it with marked success through his Co-operative Societies. Mr. Cole can hardly mean that the labourer, having been paid to make a suit of clothes, can then expect to keep it, but this is what the phrase rather seems to imply.
However, Mr. Cole has decided that these marks of degraded status must be removed, and ​that National Guilds must therefore assure to the workers at least the following things (page 155):—
"1. 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.
"2. Consequently, payment in employment and in unemployment, in sickness and in health alike.
"3. Control of the organization of production in co-operation with his fellows.
"4, A claim upon the product of his work, also exercised in co-operation with his fellows."
Very well then: what the National Guilds are aiming at is that everybody is to be paid merely because they are alive, and not because they are "mortal tenements of labour for which an efficient demand exists." To those of us who suffer from the alluring but at present unprofitable habit of slothfulness this seems to be an extremely attractive programme. The right to be kept alive has of course been recognized grudgingly by the Poor Law for many centuries, but the Poor Law has doled out subsistence under conditions which are generally admitted to have been inhuman. Now, if the National Guildsmen reconstruct society, ​everybody who is alive is to be made really comfortable, whether he or she works or idles; for presumably Mr. Cole when he says "payment" means the regular pay of the Guildsman. He does not deal with the delicate question as to whether this payment is to be made to those whose work is wanted, but who do not want to work, and here of course we come up against the great problem, whether under such schemes as these, anything like the same efficiency of work can be expected as is produced now by the system of private gain.
At present if a man will not work he has, unless he owns private means, to fall back upon the degradation of the workhouse, or outdoor relief, or lead a life of precarious penury. Would the ordinary average man, if the mere fact that he were alive gave him a claim apparently to full payment, trouble to work much? A large number of people work, and work very well, for the mere pleasure of working, apart from any question of payment. But as human nature is at present, it is safe to say that if the amount of work which everybody did were left to his own choice, and if everybody whether they worked or not, were to receive full payment out of the common fund of production, any such fund would dwindle so rapidly that ​the community would find itself on short commons. In other words, before the National Guilds could be efficient as economic forces for satisfying the wants of men, we should have to have a new spirit and a new heart at work among us. This Mr. Cole himself acknowledges, for he says on page 105: 'Nothing is more certain than that both State and Trade Union if they are to form the foundation of a worthy Society, must be radically altered and penetrated by a new spirit."
And on page 9 he observes that "in a sense, the war has led men of all classes to make sacrifices; but emphatically it has not led, among the possessing classes, to a change of heart which will bring nearer a Society based on human fellowship."
So the possessing classes, in Mr. Cole's view, have still got their old bad hearts. Has there been that change of heart necessary for bringing nearer a Society based on human fellowship among the working classes? We seem to have heard of disagreements between various trade unions and between the different classes of workers. That such things should arise under the strain of a war was most natural and inevitable, but they certainly show that we have a long way to travel before the right of recogni​tion and payment for all as human beings, such payment being apparently the same for those who work and those who do not, would not be a very severe strain upon the economic efficiency of the community.
And now let us see how, according to Mr. Cole, this great reformation is to be carried out. He tells us on page 117 that "out of the Trade Unionism of to-day must rise a Greater Unionism, in which craft shall be no longer divided from craft, nor industry from industry. Industrial Unionism lies next on the road to freedom, and Industrial Unionism means not only 'One Industry, One Union, One Card,' but the linking up of all industries into one great army of labour. . . . The workers cannot be free unless industry is managed and organized by the workers themselves in the interests of the whole community."
"In the interests of the whole community" seems to be slightly inconsistent with the ideas put forward in other parts of Mr. Cole's book. We have seen from quotations given above that the workers are to organize industry, the interests of the community being looked after by the State, the State being considered as merely a "functional association," whatever that may mean. But now the workers are suddenly ​told to organize themselves in the interests of the whole community, though a few pages later (page 121) we find that "we can only destroy the tyranny of machinery—which is not the same as destroying machinery itself—by giving into the hands of the workers the control of their life and work, by freeing them to choose whether they will make well or ill, whether they will do the work of slaves or of free men."
The first step is the building up of an organization capable of assuming control (page 134). "All workers in or about mines must be in the Miners' Union, the whole personnel of the cotton mills must be in the Union of the Cotton Industry. A body consisting of clerks or mechanics or labourers drawn from a number of different industries can never demand or assume the conduct of industry. It can secure recognition, but not control. A Postal Workers' Union or a Railway Union, on the other hand, can both demand and secure producers' control." Here we have the chief item on the practical side of this most interesting scheme. The Unions are to: include all the workers, clerks, mechanics and labourers connected with every industry, and will then take charge and deal with the capitalist.
"The wage system (page 162) must end with ​a re-integration, with the placing in the hands of all of both capital and labour. In order to bring this about, the wage-earning class must assume control of capital."
Does this mean that the wage-earning class is going to take forcible possession of the factories and plant which capital has provided? On this point, Mr. Cole does not make himself clear. "This control," he goes on, "under National Guilds, will be exercised collectively, through the State," but he leaves us in the dark as to how the State is going to get control.
In another passage (page 173) he says: "We in our day and generation shall succeed in overthrowing industrial Capitalism only if we first make it socially functionless. This means that, before Capitalism can be overthrown, there must be wrested from it both its control of production and its control of exchange. This done, the abolition of its claim to rent, interest and profits will follow as a matter of course." Further (page 182), "let us suppose for a moment that the Jeremiahs are right in denying the possibility of destroying the economic power of Capitalism by any combination of industrial and political action. There remains the weapon of catastrophic action, envisaged generally in the shape of the General Strike."
​Later, on page 189: "Industrial action alone cannot destroy profits, or even lower them, unless it can overthrow the whole capitalist system. This, we have seen, cannot be done purely by industrial power." The ordinary reader is left wondering what all this means. If the workers can themselves supply the managing ability that controls production and exchange, they will have made the present manager and organizer "socially functionless." But they will only inflict the same fate on the capitalist if they either seize the plant and tools that he provides or make their own and become capitalists themselves. The suggestion of "catastrophic action" looks as if the former method were contemplated, and on this point we get rather more light from other Guild Socialists, whose works will be considered in the next chapter.