F.— ECONOMICS, 107 
The objection that under a profit-sharing system there might be 
glaring inequalities as between one business and another has been 
anticipated under the so-called profit-sharing scheme recently adopted 
in the coal-mining industry. It was realised that any scheme would 
fail if a collier working on a rich mine were to receive far more than 
his fellow-worker on a poor mine immediately adjacent, although the 
type of work done by each and the hours of labour might be exactly 
the same. Hence the country has been divided into districts, and within 
each district there is no variation in the scale of pay. A standard wage 
_ is fixed in each district, being in effect the July 1914 rates plus, in the 
ase of piece-workers, the percentage additions which were made con- 
sequent upon the reduction of hours from eight to seven; and there is a 
guaranteed minimum for a certain period of the standard wages plus 
90 per cent. A standard profit is fixed equivalent to 17 per cent. of 
the cost of the standard wages, and any surplus after paying standard 
wages, costs of production, and standard profits is to be shared between 
labour and capital, 83 per cent. being applied in each district to the 
payment of wages above the standard wages, and 17 per cent. being 
“allocated to the owners as profit. This is not a profit-sharing scheme 
in the proper sense of the term because, while the district as a whole 
may make a profit, and therefore wages may increase in the propor- 
tions specified, certain individual firms may make a loss and yet be 
obliged to pay the increased wages. It is possible that if such a scheme 
is to prove workable, the mines in each district will be obliged to amalga- 
mate, for under present arrangements the poor mines will in effect 
be penalised by the profits of the rich ones, whilst the latter will 
benefit owing to the reduction in average profits due to the losses on 
the former. Hence the distinction between the poor and rich mines 
will merely be accentuated. It is more probable, however, that there 
will be no average profits during the next few years, since substantial 
reductions in the price of coal are essential and inevitable, and that the 
‘scheme will prove to be still-born. Should it, however, turn out to 
be a vigorous infant and lead on, as I have suggested, to district 
amalgamations, a further consequence will be that the miners will 
make a strong demand for a voice in the control of the industry. This 
is a natural consequence of effective profit-sharing, and one which I 
believe to be unworkable. It would, however, carry me beyond the 
scope of this paper to discuss the question, and I will merely say that 
TI believe the ultimate control in any business must always rest with 
those who bear the financial responsibility. 
_ Whilst I do not believe that profit-sharing will ever solve the 
problem of the fair distribution of the proceeds of industry between 
labour and capital, it may prove of advantage in particular cases, and 
it is to be hoped that experiments will continue to be made in this 
direction. In fact, there is much to be gained by experiments in as 
many directions as possible. Co-partnership, the co-operative move- 
ment, which is a form of profit-sharing among consumers, building 
and other guilds, State and municipal management, individual enter- 
prise—all have a part to play in satisfying the various demands of 
human nature, and there is room for all. For elasticity is an essential} 
K 2 
