CAPITAL AND LABOUR

Otago Daily Times, Issue 21529, 29 December 1931, Page 8

CAPITAL AND LABOUR

CO-PARTNERSHIP IN INDUSTRY

THE HAMILTON EXPERIMENT. • $ ____ (From Our Own Correspondent.) LONDON, November 18. Mr Wickham Steed, former editor of The Times, has more than once drawn attention to the experiment in co-partnership in Hamilton, New Zealand. He thinks the present time is opportune to give publicity to this subject again, and he has written a long letter to The Times suggesting that the trade unions should lend their aid in working out a system of constructive employee co-partnership. Mr Steed quotes Mr Snowden’s speech of October 20: — “ This is not the end of the Labour Party. It will rise again, but only with new leaders who have vision and courage. But it must be based upon a citizen’s and not a class outlook. The defeat of the Labour Party will ,be for its ultimate good if the lessons are learned.” It is unquestionable (says Mr Steed) that, to-day, the great majority of wage earners in this country incline towards a citizen’s outlook. It is to be hoped that an equal proportion of employers are, similarly inclined. If so, the two elements have an unprecedented opportunity to begin, under the Ifuspices of the National Government, the great and necessary work of co-operative social reconstruction. The capitalist system, as we have known it, is confronted with ■ a serious challenge from the Communist , system that is painfully groping its way in Russia, with a fervour that is wellnight religious in its intensity, towards some non-individualist, non-capitalist order of things. It is the business of our people, as wardens of Western civilisation and of individual freedom, to evolve a saner and sounder alternative than “ Manchester ” economics can suggest to Communism or Marxian Socialism. Careful study of this matter for many years and reflection upon it have led me to the , conclusion that only in and through some form, of employee co-partnership in industry can this alternative be found. Its roof, principle is that, after a limited rent, determined by its market price, has been paid for the use of capital as an agency indispensable to production, the producers by hand or brain, from the managing director to thp apprentice, are entitled, as human beings, to an unlimited remuneration if, by co-operative effort, they can earn it. _ This principle has been applied with marked success, though on a small scale, in New Zealand, and with equal success l on a larger scale in some American and British industrial undertakings. It treats capital, not human labour, as a merchandise. Were it generally applied, it might prove to be the economic salvation of the country, for it would cheapen output without decreasing the remuneration of labour. If the trade unions, in quest of a more enlightened policy than that which has landed them in their present plight, would lend their aid in working out a system,of constructive employee co-partnership, they might discharge a beneficent function. Otherwise, they may, indeed, wither. Facile and foolish schemes of nationalisation would have to go by the board; but in their place we might get schemes—and the reality —of concerted national endeavour resulting in effective economic citizenship for the millions of our politically ‘ enfranchised and economically dependent wage-earners,, SCHEMES IN GREAT BRITAIN. In a leading article The Times conthe question very fully:— There are two ways in which a transfer of partial control may be effected (says The Times). One is by the acquisition of share capital on the same footing as an ordinary shareholder. The ■ second is by the formation of a copartnership committee of workers which is entrusted with a voice in the internal management. In second case the workers do not gain a voice in the business policy. In the first they would have a voice equal to their shareholding, or, perhaps, tentatively, some special representation on the board of directors. There is more profit-shar-ing than true co-partnership in industry; yet last year there were only 499 schemes of profit-sharing known to the Ministry of Labpur, and the number of employees entitled to participate was only 238,000. The number of co-part-nership schemes was 138, of which 71 provided for the acquisition of shares on specially advantageous terms and 34 for setting aside a share of the profits for the employees but retaining the amount for investment in the firm’s capital either permanently or for a prescribed period. The co-partnership schemes of the gas companies are usually of this kind. Other schemes provide for a part of the bonus to be capitalised and for the balance to be paid in cash or to go to the credit of a provident fund. TRADE UNION OBJECTIONS. „ Without doubt a genuine scheme of co-partnership should give the worker an added interest in the undertaking which employs him. There is acknowledged pai’tnership as well as shareholding, and interest is stimulated by information on business affairs, by an added reward for successful enterprise, and by a share in the day-to-day management. Nevertheless, for one reason or another, co-partnership is not actively desired by workpeople. How far their indifference is a matter of personal judgment, and how far it reflects trade union opinion can only be guessed. The trade union objections have arisen from fears of injury to the unions and of loss to the workpeople. It has been thought that men and women with capital at stake, as well as wages, would not be so responsive to the appeal for combination and, when necessary, for combined action; that resistance to downward revisions of wage rates would be weakened; that there would be a tendency for individual undertakings to make their own wage arrangements, and that consequently , standard wage rates would be imperilled; that the trade union organisation would be undermined and the workers’ position rendered more precarious.