Why Profit-Sharing Must Fail

New Zealand Tablet, Volume L, Issue 33, 23 August 1923, Page 17

Why Profit-Sharing Must Fail

The progressive Labor element has never considered profit-sharing favorably (says a writer in the Fortnightly It anew of St. Louis, U.S.A.). Its usual arguments are developed by the editor of the Journal of Electric Workers ami Operators, the official publication of the International Brotherhood of Electrical Workers (February, 1923). He says that evidence upon evidence has piled up in this country in the last few years, showing the absolute failure of profit-sharing schemes. ''Now more evidence comes to us from Great Britain. One-hundred and ninety-four business concerns in Great Britain had shared profits with their employees up to 1900. All but 36 of these have now abandoned the scheme. Since then 186 others have tried it. Forty of these have already given it up. More than one-half of 380 attempts at profit-sharing have been abandoned as complete failures." The Ccntral-Blatt and Social Justice (May) comments on the Journal's article as follows: "Profit-sharing since its incipiency in France in the thirties of the last century, has, except in a few instances, certainly not fulfilled the hopes of those who propagated the measure as a means of labor reform. The editor of the Electrical Workers' - Journal does not go to the bottom of things, however, when stating objections in the following sentences: 'Good wages and profit-sharing schemes never go together— and the worker is hardly able to recognise his small share of the profits when he finally gets it. This, more than all else, explains their failure. All have had for their main purpose the speeding up of production—the turning out of more work—keeping the daily wage down to the lowest minimum and lessening the dangers of effective protest against low wages and undesirable working conditions..' We do not believe that this writer is justified in saying that employers, who were attracted to this scheme, had the ulterior purposes of which he speaks, in view. Profit-sharing fails because the employer is as much as his employees the slave of a system which has for its chief purpose, not the welfare of men and society, but profit and the accumulation of capital. One of the main defects of the capitalistic system is insecurity, and inasmuch as the employer suffers from this symptom, his entire profit-sharing scheme lacks stability, and in the end, has the appearance of a mere empty promise, made for no other purpose than to induce the working-men to forego those measures of self-help which, for the time being at least, produce much better results than are obtained from any reliance on the bounty of the entrepreneurs. What will happen when, for one reason or another, the employers of Labor cannot be forced into making concessions, remains to be seen. To-day, every one realises that the manner in which the increase in the cost 'of living and the demand for higher wages are chasing each other in a vicious circle is absolutely irrational. But nobody seems to know how to arrest the wild motion of the dangerous merry-go-round." • "!' v, ".