■December 6, 1917 
LAND & WATER 
Industrial Self-Government 
By Jasoa 
ir 
IT was well put in the h'ew Statesman the other day that 
competition was the nineteenth century substitute for 
lionesty. Men like Brougham l-)elieved that so long as 
the wants of the world were ilupj)lied by a great number 
of individual traders and profiuce.s. each trying to outbid 
tlie other, the consumer was bound to get the benefit in clieaj)- 
ness and efficiency. Some who preached this doctrine went 
so far as to think adulteration was a form of competition and 
therefore innocent if not actually beneficent. The spectacle 
of waste was positively encouraging when the waste took 
the form of the reduplication of effort and the multiplication 
of services. For though it might seem absurd that twelve 
small shops should all turn out the same commodity, employ- 
ing six times as much energy as -was needed for the purpose, 
this struggle was a guarantee that the commodity would be 
eJieap and good. 
This pliilosophy had, of course, broken down before the 
war. For it happened in many important instances, par- 
ticularly of course in America, that the consumer found that 
he was getting the waste without the benefits of competition, 
for it was possible for traders to eliminate competition and 
to secure that the advantages of the resulting economies 
accrued to themselves, and not to the consumer. The big 
Trust represented from man\' points of view an improvement 
on the old chaos of competition. As an industrial organisation 
it was vastly superior. It could buy and sell with much less 
lal»ur. and it could take larger and longer view^ than the 
individual producer or the individual trader ; it could 
appreciate the importance of research, education, and pay 
regard to the permanent as distinct irom the transient interests 
of an industry or trade. But the very fact that the Trust 
was more powerful for good than the individual and isolated 
trader meant that it was also more powerful for evil. The 
Trust thus became a danger to the world in proportion as it 
Ix'came a weapon to those who were directing it. In the 
I'nited States, as everybody knows, the tyranny of the 
Trusts was tlie chief domestic problem before the war. 
Organising Power 
It is quite clear that after the war the tendency of industry 
willbe more and more to organise its power and resources, 
and that the habits of the age of competition, to which our 
indi\ idualist ternperament has clung so jealously will go out 
of fashion. This development will be encouraged by many 
influences. For one thing, the war has taught the necessity 
of organisation in the face of the organised competition of 
other countries. We know now a great deal more than we 
knew four years ago about the methods of jjeaceful pene- 
tration by whidi (ierman industry pusheid its way in the 
Morld. Some of those methods are creditable to the country 
of their origin ; some are not. But of tlieir effectiveness 
there can be little question. It is believed by many good 
judges that if Germany had had the sense or the self-control 
to remain at peace for another ten years, her industrial power 
would have reached an extraordinary perfection. 
Let anybody picture those methods to himself and then 
let him tuni to the account given of our pre-war system by 
Mr. Fniest Bonn in his able and intcresiing little book Trade 
as a Science (Jarrold and Sons) : 
I recently had an opportunity of inspecting the stock list 
of a well-kno<vn caipet manufacturer, which contained 
two hundred and fifty items. I'iftv of these were speciahties, 
:ind two hundred were regular line's which, except for trifling 
differences, were common tr) the whole trade. I found a 
staudar.l pattern of stair-carpet, which I was informed 
was made by at least twenty different makers, in stock to 
the e.\lent of £2,000. Xow note exactly what this means. 
S\ipi>osmg that each of the twenty makers hatl the same 
amount of stock in this standard line, you get at once 
/^o.ooo worth of capital sunk in this one pattern of carpet, 
certainly ten times as much money as is justified by the 
demand for this pattern, or any use that it is to the trade. 
But this money is locked up in obedience to the dictates of 
tlic fetish which we c<dl competition. .Xnd then without 
asking the reader to bother himself with too much arithmetic 
It IS perfectly obvious that if these twenty mills could agree 
among themselves to divide up the two hundred and fifty 
pattenis and organise between themselves a selling staff 
which would cover the world, we should do throe things : 
Wc should first of aU dispense with a con.siderable portion of 
the machinery and plant used in that industry ; we should 
next reduce the stock, which is one of the most expensive 
ilems in connection with the conduct of a business, to one- 
lenth of its existing proportions ; and, in the third place, 
where one thousand men are now engaged selling the product 
two or three hundred could do everything that is required. 
J shall.be told that I am kiUing competition, but I do not 
agree. Is there any justification for twenty f^ravellers repre- 
senting twenty mills running to Inverness because some small 
buyer wants a few rolls of stair- carpet ? 
Obsolete Methods 
It is certain that the expt-riences arid revelations of the war 
in this regard will strengthen Mr. feenn's plea. Nor is this 
the only direction in which industry has been taught that 
the methods of the past are obsolete. We hear a great deal 
about the nfed of Government help and guidance, but Govern- 
ment help and guidance imply the existence of organisations 
with which the Government can deal. A Department cannot 
spend its time issuing circulars to hundreds of firms, giving 
separate inten-icws to hundreds of manufacturers or traders 
on every topic on which its help is sought. Effective co- 
operation between a Government and an industry is only 
possible when the industry has some representative orgaii. 
During the war there has, of course, been a great development 
of industrial organisation for this very reason. The Govern- 
ment found it necessary to interfere with one industry after 
another ; to curtail supplies here, to divert energy there, in a 
third case, to change the uses of machinery, and pcrhajw in a 
fourth to modify the whole structure. This could only be d(me 
where there was some body that could speak for the industry 
and discuss its arrangements and circumstances, and the 
best means of adapting them to the emergency. In the case 
of munitions, of cotton, of wool, for example, the need for 
the direction of energy and resources by the Govenmient has 
led to the forming of groups and representative committees. 
This has been sjiecially important in the case of the woollen 
industry, for here organisation was in a very imperfect iind 
elementary stage, and the old individualist regime was 
particularly tenacious. 
In these two ways, not to mention others, the war lias 
made it certain that organisation in the form of trade associa- 
tions will be the leading feature of the industrial developments 
of the future. Industries are not going to unlearn everything 
the war has taught them at a time when the need for combined 
action will be more apparent and more urgent than ever. 
Tlie general fimction of such an association will lx> that of 
eliminating waste, securing the maximum production in 
quantity and quality, providing for the true and iierraanent 
interests of the industry as a service — that is, as an association 
of producers and merchants who are providing something 
that the world wants. When industry is so regarded, it has 
a noble aim and should have a correspondingly high standard 
of duty. Take such a matter as research and technical im- 
provement. It is obvious that aii industry as a whole is pro- 
foundly interested in adding to the knowledge^of mankind on 
the questions that affect industrial progress. * An individual 
trader may not so conceive his personal interest. He is ix;r- 
haps in the industry to-day, but he means to clear out to- 
morrow. His routine methods bring him in decent profits 
and he eees no reason for spending money or labour on. im- 
proving them. If he has a secret, so mucli the better. He hivs 
no wish that his friend and neighbour, who happens to be a 
rival, should share his secret or have one of his own. In 
this respect an individual producer or^ trader may be in the 
position of the individual citizen in regard to vaccination. 
It is clear that universal vaccination is a gain to the com- 
munity as a whole, but a particular individual may think 
that it is not worth his while to go to the trouble of being 
vaccinated, for the risk he runs of getting smallpox in a country 
where vaccination is general is very slight. So the individual 
trader may have no objection to industrial progress and yet 
be unwilling to go to trouble or expense on his own account 
to promote it. 
Representation 
But a body that represents an industry will take pride in 
the care and success with which industrial methods are dis- 
covered and perfected, and it will aj)preciate the importano^ 
of endowing skill and re.searcli. The individual trader may 
say in the spirit of a famous declaration, that he has no need 
of chemists, but the ix)dy responsible for an industry as a 
whole will not lx> guilty of such folly. I'or it will be at once 
an injury and a disgrace to that industry that it should find 
itself short of some necessary material because Germany or 
America has known the wortli of the chemist and lingland 
has not. So with all tlie waste tliat comes from bad organisa- 
tion. A Trade Union leader with experience of war arrange- 
