SOCIALISM: Sir A. Mond on its Fallacies

Wanganui Chronicle, Volume LXXXI, Issue 18790, 26 May 1923, Page 11

SOCIALISM: Sir A. Mond on its Fallacies

Nonsense Unmasked. Private Ownership or Confiscation.

Sir Alfred Mond, a big employer of labour, exposed the nonsense of Socialism in the House of Commons in a crushing reply to Mr. Snowden’s motion condemning the capitalist system. Sir Alfred, according to Hansard, said: Mr. Snowden, as I expected, delivered a carefully reasoned and very clever speech, moderate in tone, moderate in statement, oratorical in effect. The hon. member, much to my astonishment, dates the capitalist system about 100 years ago. The capitalist system has been the system of the world since the world existed. (Laughter). Certainly it has. What was the system in this country in the time of Queen Elizabeth? What has been the course of evolution? The course of human civilisation has been from the tribal to the individualist system, and what the hon. member calls the great evolutionary force is the reaction, the return to a system from which the world has developed and evolved. It was not machinery that developed the capitalist system. A bootmaker in the 15th century, with one machine or one hammer in his hand, was just as ■luch a capitalist—and the hon. member knows it very well—as the owner of a great factory to-day. He knows as well as I do that the shovel of an agricultural labourer, the tools of a fitter, the tools of a carpenter, are capital, just as much capital in the economic sense—and no economist can deny it, or ever has denied it—as the ownership or part-ownership of a loom. LEFT TO THEORISTS. in Lancashire and Yorkshire hundreds ar.d thousands working in those mills are to-day part owners of the steam looms, as they were owners of the hand looms. What is the use of trying to confuse issues by confusing the rich man with the capitalist when there are millions of people in this country who are capitalists but who are not rich at all? Every co-operator in your movement is a capitalist, for what is a share or a dividend in your co-operative movement but capital? If you wish to socialise capital you must take the house of every working man who has saved up for it. If you say that Socialism means robbing the rich, say so. That is ' a policy, but it is not Socialism. The hon. member for Colne Valley (Mr. Snowden) repudiated confiscation. He said: “I would not confiscate, I would compensate.’’ He will not take my shares, but he will pay for them. I do not mind. I would much sooner have State security than the uncertain security and anxiety of industrial wofk; but I should be extraordinarily sorry for the rest of the community, who, for the services of men who understand the industry, who have devoted their lives to it and have an interest in it, are going to be left to a number of Civil Servants as theorists like the hon. member for Stirling (Mr. T. Johnson *. who seconded the motion, to manage their business. (Interruption.) It is no use indicting the capitalist system. If the hon. member could persuade me that he had a system which would abolish social sores and improve the lot of the people of this country, a system that I could honestly believe would do any good, I would to-morrow be his most earnest recruit and his most faithful follower. I would admit facts. It is a great controversy, the controversy whether you are going to rely on tne individual, on the individual freedom and the individual enterprise of the people- of this country, or whether, card indexed, confined and crabbed, State-oLi'-ialed and State-oppressed, we are to form part of a great machine by which the wings of enterprise would be clipped, the spur of private initiative would be taken away, and a bureaucratic, soulless machine would be substituted for the freedom of the people of the country. The whole theory of capitalism, as expounded by some hon. members, is entirely out of date. It does not exist in our modern industrial/system. What exists in our modern industrial system is the captain of industry, the man of enterprise and brains. He has labour and he has capital. He pays for one and he pays for the other. He is the man who creates. Mr. W. Thorne: We all consume. That is what makes work. MANAGEMENT KEY. Nir A. Mond: Obviously, if no one consumed there would be no need of production. The real point of modern industrial enterprise is management, 2nd that is really the key upon which the hon. gentleman did not touch. What is the reward of management, enterprise, and industry? It is just that accumulation of wealth to which the hon. member objects. If the hon. member likes to go round the world to-day, he -will find that the wealthy men >are the men who started with very little and by hard work, enormous energy and foresight have built up great industries. The hon. member made an observation which is perfectly true, that every workman should be a capitalist. I quite agree. The hon. member said—and I gladly accept his challenge—What is the use of a workman saving a few hundred pounds and competing with a great firm like Brunner, Mond and Company. What they want to do is to become shareholders in the company. Certainly. If the House will allow me, I will elaborate that very point of enterprise and management, that very point of infinite capacity to which hon. members have referred. It seems to me that it is only possible under our present system and I see no scope for it whatsoever under a system of socialism. It is now nearly 50 years since two young men got to know each other

in business. With the very little money they had saved, they decided to start a new enterprise. Their capital was very insufficient; their optimism very great. They adopted a process entirely unknown in this country. They asked people who understood the industry to come into it, but they laughed at it. They fought and struggled, and they founded that very concern to which the hon. member referred, which has given employment and looked after its workmen for something like 50 years. That was the result of an enterprise which could never have been commenced under any socialist system I have ever known. Who would have been prepared to take the risk, which all the most experienced men in the industry said was an absurd risk to take. Those two men were my father and the late Sir John Brunner. They did not work eight hours a day, but 36 hours on end without stopping. DIVISION OF WEALTH. That is one of the difficulties which I feel with regard to socialism. I do uot see how you can make any progress. Hon. members always seem to assume that the condition of industry is static. It is not; it is dynamic. They talk of the division of the wealth of the world as if it were a fixed amount which wants to be divided up. (Hon. Members: "No!”) It is not a fixed amount. I was saying that the progress of industry is dynamic. That is to say, the wealth of the world is not a fixed sum which can be divided up. What you want to do is to increase wealth, and I contend that the capitalist system is more likely to increase wealth, and be of more benefit to the whole community than any other system which has ever been devised. The hou. member has not explained whether he wants State socialism or guild socialism or what form of socialism. It is very fundamental. I am convinced from my experience as Minister and business man, that it is impossible to carry ou the industries of this country from a Government Department. Then how is he going to carry them on? He has not detailed to us any scheme. 1 have heard schemes of democratic control. That is a beautiful phrase, but the man who has to sell and buy and compete in the markets of the world, and meet the keenest competition of American, German, and French manufactures, does not get much guidance if told that in the future the industries he is conducting are to be conducted under democratic control. Presumably there would be a sort of Soviet every afternoon to decide whether to sell francs; whether the exchange is going up or down; whether we should take higher or lower prices for our products, or what advertising schemes we should adopt. What is one of the real difficulties of this whole question of organising your industries nationally? One of your chief difficulties is magnitude. 1 have come deliberately to the conclusion that it is quite impossible for human iieings to control any industry beyond a certain magnitude, and I say that after very careful study. The very curious fact was told me by an American friend that when under Mr. Roosevelt's administration one of the American trusts was dissolved, the component parts of that trust made more money in the competition with each other than when united, simply because it had outgrown proper economic management, and got so large that the company got like a Government department, so complicated and so full of red tape that paralysis set in. I have given a good deal of thought to the question of whether it would be possible to organise a national industry. When I was at the Office of Works, and we were doing this great work. I considered the matter very carefully, but I must confess honestly that I did not see any method- and 1 do not believe it is possible to organise a national industry on any system of a national character which would give a higher efficiency. GERMAN LESSONS. That is the experience of the world as far as it has gone. Let me take a few examples. I will not take Russia, because I do not think Russia is altogether a very highly organised country with a very efficient Governmnt service. What do we find: "German mines. It is a well-known fact that the coal mines managed and worked by the Government do not pay as well as those in private hands.” That is Consul-General Koenig’s report, 1911. "The State coal mines of the Saar, during a long period, have paid considerably lower wages and charged substantially higher prices for coal than the Ruhr coal mines (in private hands). . . .” That is from the Arbeitgeber Zeitung, of April 6tb, 1919. "German railways. Many of the railway workshops were closed by the Government, which refused to conduct them at a loss any longer." That is the Berlin correspondent of The Times, February 3rd 1920. I would say to my hon. friends that after the war the Germans had a socialistic Government, a socialistic majority. Yet they had been careful not to introduce any of these schemes of socialism.

Let me follow on with a few more examples of another kind. Let me take a very highly civilised country like France. Let me refer to the nationalised French railways. In 1908 the deficit on the State-managed railways rose from 35,000,000 francs in 1909 to 77,400,000 francs in 1911. Then take Italy. Italy had national railways, but they denationalised them because they found they could not make them pay. STATE OFFICE PARALYSIS. 1 will tell them something on housing. When I was at the Ministry of Health men engaged in the building industry would always work cheaper for a private contractor on a private job than they would ever work for a local authority. A curious paralysing influence seems to come over everybody as soon as they begin to work for the State. One reason is that everybody has a cushy job. There is no profit and loss aeoouut. Nobody much cares how the money is being spent. What keeps this wretched private capitalistic system going? I will tell you. If a private capitalistic business is badly managed it goes into the bankruptcy court. What does that mean? It means you have a method by which inefficiency ie automatically weeded out of your industrial system. Hon. members have not found any system to take its place. Civil Service examinations, which is the only substitute for State socialism, are not going to replace the crude fact that people who eanuot make profits in a business have to go under and make way for the people who can. That is the whole basis of our free competitive system. The hon. member says the competitive system has disappeared. That is not true. You can trustify your industries as much as you like; there is no trust powerful enough in the world to-day to ignore the danger and the risk of able and new competition in all parts of the world. The pace is too keen, competition is too swift. Nobody can afford to sit idly by and draw dividends out of labour. The idea that you can make money out of labour is one of the greatest fallacies in the minds of a certain number of economists. Why does anybody want a capitalist? The capitalist system, as the hon. member said, is not a created thiug from the beginning of the world. People pay for capital because it is required. .Nobody takes the risk of borrowing capital unless he sees some reward for the result of his labour. The hon. member knows that as well as I do, and he ought to state it frankly. If I have to pay 10 per cent, for capital it means I have a risky proposition. If I have to pay 2J per cent, it means I have a safe proposition. The capitalists are the people, the only people in this country, who, instead of putting money in their pocket, instead of spending it, or doing nothing with it, instead of investing their money in luxury, are investing it in industry and making either loss or profit out of it. If these people did not go in for private enterprise, would there be no unemployment? I say there would be more. The people of this country are not so foolish as to deny private enterprise the fruits of its labour. The hon. member who seconded the resolution postulated that socialism meant the end of all international capital. How does he think trade comes to this country if you do uot export capital? A SILLY SCHEME. I uunder what he thinks capital is? Let me contrast that with what the hou. member for Colne Valley said. He said he was to compensate the owners of private capital. He said he was to give the owners of industrial capital some form of State security, but he would not allow them to use it to develop industry in this country. Therefore the owners of that capital would have to take it abroad. What advantages that is going to do the British working man passes my comprehension. If he gives me gilt-edged securities and I cannot use my capital in this country, I fail to sec how the country and the working man would be better off. You ask any man who is engaged iu industrial concerns in this cr any other country, and you find he is ready to pay almost any salary to anyone who is efficient, and we have to struggle along as best we can with our limitations. If hon. members say the coalmining industry is badly organised, possibly it is, but where have you the men who ean organise it better? D is uot the gentlemen who write articles in the Statist or any other newspaper. The co-operative societies are one of the finest capitalist schemes in the world. A co-operative society is a huge capitalist system owned by a large number of small capitalists. Hon. members talk as if our big industries to-day were owned by handfuls of rich people. That is not the case. They are owned by tens of thousands of people, most of whom have very small amounts invested in them. Although you can nationalise capital you cannot nationalise ability. Hon. members must get their minds clear. If they carried their proposals, they would abolish the co-operative societies. The Wholesale Co-opera-tive Society is one of the biggest distributors in the world, and it is just as much privately managed as Selfridge’s Store. EVEN STATE DRESSES. There is another point which I think is admitted by all Socialist writers. Socialism implies two necessary corollaries. One is that every consumer must consume a State-made article whether he likes it or not, because

there will be nothing else to be got. Hon. members’ wives will have to take the State pattern and dress after the State fashion. (Hou. Members: “No!’’A It will be so. We have now got a larger number of women electors, and I will put it to the Soeilist members if the State can produce all commodities, obviously it will produce all the dresses in the country. You cannot get away from that, and we shall have to dress as the State tailor or as the State dressmaker directs. There will be no competition. But let us look at the thing in a more serious aspect. If you, under a State system have no freedom in the State, obviously there must be conscription of labour, and that carries with it limitation of population. I’ou cannot suppress human nature, and that is why Socialism must end in failure. It is up against the elementary instincts of human nature, the free play of competition, freedom of the individual to develop if he wants to, without repression, the free right to individual development. Nobody will fight more bitterly than hon. members on the Labour benches for some of these things from the first day the Socialist machine is instituted. Your ideal is to give the people better conditions and better houses—so is ours! Your ideal is to make the conditions of life more humane—so is ours! It is one ideal. We do not differ in ideals, though we differ as to methods. STATE EXPORT DEALS. National life is a collective enterprise, and I want to see it developed; but it is a different thing to say that the export and import trade iu cotton, real, wool, and so on is a collective enterprise and c:.n be managed as well nation ally as individually. How can a Government deal with export trade! It is a very difficult problem. We know that in the case of international contracts, which are not a question of private enterprise but of high State en terprise, diplomatic Notes have to pass, and whenever a contract is altered questions are put in this House and feelings are aroused. The idea that one is considering in this system is one which nas never yet been found adum brated in any work that I have read, and I thiuk 1 have read every one, from Karl Marx downward, on this subject. What hon. members have to prove is that they have something very much better, that they can deliver the goods. You cannot ask an ancient nation, which has grown up on the basis of individual enterprise, of freedom of capacity for self development, a nation which is the most individualistic nation in the world, to put their heads under a yoke, to go into a stato of slavery, for socialism to my mind is no better, and lead a dull, monotonous existence in which there is no sparkle and no life. That is what we are being invited to do. Show us, at any rate, what we are going to be given in return for this sacrifice before we surrender our liberties so hardly won to a tyranny no better than the tyranny we have passed through in tbo past. Show us, at any rate, that happiness will be greater. I say you cannot do it. I say it cannot be done. This discussion has now been proceeding for 50 years. Wherever this policy has been adopted it has been abandoned again. Let us give up chasing this will of the wisp. The hon. member made a speech of a pacifying character. He knows as well as I do that at the last election nothing was resented more by most Labour candidates than to be accused of being not a Labour but a Socialist Party. Hon. members did not say it was a Socialist Party. THE ISSUE. I will take my own constituency and others around me. The hon. member knows the constituencies around me as well as 1 do. 1 have stood on the platform and said the Labour Party had no right to be called a Labour Party. They were a Socialist Party. That was always repudiated. (Interruption.; Hon. members arc not called a Socialist Party. They are called a Labour Party. (Hon. Members: “We are the Labour Party. It is the same thing!’’) It is not the same thing. The hon. member for Colne Valley knows it perfectly well, and so do other hon. members, or they would not get so excited. I am extremely glad the mask is off at last. It is a clean issue between Indi vidualism 'and Socialism, a clean issue of private ownership against national ownership, a clean issue as to the right of the individual to the reward of hia labour and his enterprise. It is individualism or confiscation, and the checking of that reward u Socialism. I understand now there is uo doubt that this motion will go to division. We have a clean issue, and I will invite all those who believe in the future order of this country, all those who believe in the freedom of people to develop along their own lines and in their own way, 1 invite all who do not wish to see us reduced into a macuine-madc product, and to a dead level of mediocrity; I invite all who do not wish to see the future progress of this country arrested, but who wish to see co-operation between labour and capital, co-operation and partnership between those who produce, and not between people who do not care and who do not know anything about industry, to support my programme. There are friends of mine on the benches above the gangway on this side of the House who are no more Socialists than I am, who are no more believers in Socialism than I am, and I invite them to think twice or three times before they commit themselves to a policy which is as fatal to the best interests of the class which they represent as it is to the interests of the community as a whole.