Basic Issues of the Social Question

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The fact that workers are forced to sell their labor, thereby consolidating their semi-slave status, results in a deeply felt sensation of being wronged, regardless of the amount of remuneration received. Until this situation is recognized and corrected, harmonious labor relations in industry will not be achieved. The question is: how can this situation be corrected? History has shown that turning ownership and control of industry over to the state is a grave error.

There is, however, an alternative. A look at the reasons for the astonishing success of Japanese industry reveals a clue. Japanese industrialists are no less capitalist than their western counterparts, but they do something essentially different. Despite their reputation for being an ant-like society, the reality is quite different.

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Japanese industrial culture considers the worker to be a human being - not a machine as in the west - and treats him accordingly. An organization with motivated co-workers will out-perform by far one with unmotivated personnel.

This does not mean that the Japanese have solved the social problematic which began at the inception of the industrial revolution, or that they have solved their enormous fiscal problems. They have, however, taken a first, tentative, perhaps unconscious step in the right direction. In their society industry is still owned by anonymous shareholders as it is in the rest of capitalist society. The problem of ownership of the means of production remains unresolved. Their success, however, is certainly enhanced by the fact that foreign competition has not been willing or able to take even that first step, despite the fact that the philosophy behind the humanizing of industry originated with western industrial psychologists such as Douglas MacGregor and J.

Profit sharing is another baby step in the right direction.

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Unfortunately, the percentage of profit shared is usually infinitesimal and is therefore perceived by workers as being the cynical sop that it is. These two steps, worker participation in decision-making which does not mean control of the decision-making process, but only participation in decisions which directly affect them and their work and profit sharing, can be grasped as already existing methods which could be expanded to the extent that justice is achieved. If all workers, including managers, are part owners of the company in which they work, and if there are no other part owners, the semi-slave status of workers would be eliminated.

This is not Communism. I am not advocating that industry should be turned over to the state which supposedly represents the workers, but that it should be owned by all those who actively participate in it, and only by those. The obvious objection to this concept is based on a myth: the necessity of stock markets. Capital is indeed raised by the sale of company stocks in the market.

But the main function of this market is a speculative one. It is little more than respectable gambling, somewhat safer than the racetrack or the roulette table at Las Vegas. It is the forum in which the rich increase their capital without the necessity of resorting to work. Other means of raising capital for production exist: bank loans and bond issues. In both of these alternatives the lender may reap a reasonable profit, but has neither a voice nor a vote in the company's policies.

In other words, he is not an anonymous owner with the capability of reaping profits for himself at the expense of those who do the work.

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The conversion of anonymously owned companies to worker-owned enterprises would be complex and would take time, but it could be done with the necessary basis of corresponding laws, which could be enacted by any democratic legislature not dominated by economic interests. Banks of course are also anonymously owned, profit oriented enterprises. They should be required to convert to a special non-profit-making status. Not that there would be no profit, but it would be used only to cover the banks' own costs and reinvestment requirements.

An important and immediate benefit deriving from such a conversion would be lower interest rates due to the abrogation of the need to pay dividends to stockholders. Dividends are, in reality, a cost; hence, lower costs and the resultant lower interest rates, meaning greater borrowing power for industry, which should more than offset the lack of anonymous investment capital. Motivation and Reality. All activities within a community which contradict this law must, in the long run, cause suffering and misery. The above statement requires some reflection. Steiner called it a social law, and compared it to a law of nature.

Should it indeed have the authority of a social law, much of the suffering and misery being experienced in the world today can be understood as the result of this law being contradicted in an extreme manner. Although tax systems require us to cede a portion of the "proceeds of our efforts" to the community, in the case of the rich as individuals and corporate organizations it is a small portion and contributes little or nothing towards the just distribution of wealth. Nor can it be taken for granted that a graduated income tax system is intrinsically beneficial. It is no secret that the wealth of the world is concentrated in the hands of very few and that the majority of the human beings currently alive live either in poverty or abject poverty.

The capitalist prediction that an increase in production will bring prosperity to all has been disproved by reality, just as the Marxist prediction that a social utopia can be obtained by the worker state expropriating the means of production capital and administering it has been disproved by the same inexorable judge. Although it is true that the populations of certain more favored countries of the "first world" have benefited materially from increases in production, it is also true that economic activities are no longer national, but worldwide.

Therefore while Switzerland and Sweden prosper, Somalia and Guatemala suffer in inverse proportion. The "mixed" economy, part state owned, part privately owned, seems only to incorporate the worst of both systems. The state is eminently incapable of operating economically viable enterprises.

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As governments are obliged to reduce losses, the tendency is towards "privatization", thereby strengthening the capitalist system and increasing the size of the gap between rich and poor. The principal argument in favor of capitalism is motivation. The entrepreneur capitalist is motivated by profit.

The manager is motivated by his high salary, the worker by whatever he earns plus fear of losing his job. An incident from my own work experience illustrates the absurdity of this proposition. As manager of a branch office, I received a call one day from my boss in head office. I was safe, he hastened to assure me, although my heart had already jumped to my throat, but he had to decide immediately which ten people would be let go.

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He wanted my opinion concerning his shortlist. Although we were scattered around different cities of the world, all the people concerned were, if not intimate friends, at least friendly colleagues. I had no desire to share the boss's anguish at having to decide. The result in company saving would be practically the same. This was, by the way, long before the concept of lean management was introduced by necessity into corporate thinking.

For us, the work was there and we were already lean in relation to it. The reduction in personnel was dictated by purely financial considerations and was instigated by a new financial director anxious to make a name for himself.

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  • There was a long pause at the other end of the line as my superior calculated his own reduction. Then he said that he doubted the idea would be accepted higher up, but that he would consult and let me know. He called back the same day to inform me that my suggestion had been seriously considered at the highest level, that my interest was greatly appreciated, etc. The reason given was that a person was considered to be worth what he earned and if we reduced management salaries it would mean that we were all worth less, would be that much less motivated and our production would be reduced accordingly.

    I told him that was absurd. He agreed, but that's the way it goes, everybody knows - to quote Leonard Cohen. But what if motivation is not merely a function of money and greed? What, then, is the true motivation? In order to know, it is necessary to also know something of human psychology, not the psychology derived from the study of the behavior of rats, but from the observation of human beings outside the laboratory.

    If we believe that the human being is the most developed animal, we are at a dead end and the carrot and stick social Darwinists are right.

    Basic Issues of the Social Question - Unresolved

    But if man is more than that, if he has a soul and spirit and is capable of acting from motives which exceed those dictated by instinct, then we are obviously on the wrong track when we suppose that he will react to the same stimuli as a laboratory guinea pig. I cannot cite one single laboratory experiment that provides such proof. Nor, however, can anyone prove the contrary. Neither intelligence nor education can provide the answer, as there are many very intelligent, educated people on both sides of the question. If their training and intellectual capacities were decisive, they would all agree, one way or the other, but they don't. Are we at an impasse? Not necessarily. In order to show why, I will explain what I mean by "soul" and "spirit".