The Labor Situation in Great Britain

Mr. Chairman, and Members of the Empire Club,

I endeavor today to address myself to three aspects of the labor situation in Great Britain; first of all, the labor situation viewed as a political crisis; secondly, the same situation viewed as an economic crisis; thirdly, dropping the word "crisis," I will endeavor to see how far we can apply the notion for which we are here today--the notion of imperial liaison and imperial study--to this problem of labor as it is here with us and in the Old Country.

First of all, as to the political crisis. Necessarily what I say here is of the nature of an impression, yet I think few of those who were in England last summer came away without having a suspicion that a big change was destined soon to come over the grouping of parties, though few anticipated how big it would be.

Last June I was in the House of Commons visiting those who had been both my colleagues and

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Professor Fay is an M.A. of Cambridge and a D.Sc. of London. He is Professor of Economic History in the University of Toronto. After he came to Toronto he spent a summer in the Canadian West studying economic conditions there. For a similar purpose he visited the Maritime Provinces. During this summer he investigated labour conditions in England, studying these on the spot with employees and employers. A broad scholar, a patient investigator, a shrewd judge, and a tolerant critic in an admittedly difficult department of human endeavour, Professor Fay's work is much appreciated.

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pupils (belonging, I make bold to say, to all three parties). One naturally tries to get the sense of things; and the sense of things was not altogether different from the result which has since transpired. It is broadly this-that there has been a temporary elimination of what had come to be the middle party, the Liberal party, from British politics as a main party.

Parties get their names from long back. If I tried to characterize the Liberal party-to which I may say I did not belong in England--I would have said, using the term in no cynical sense, and using the term in no adulatory sense--that it was the most rational party, temperamentally, in the British Commons. It was strongly brought home to me, and confirmed in conversations with my friends, that there was a bigger difference in temperament between the Liberals and the other two parties than there was between the Conservative party and Labor. That was clear not only from casual conversations, but also from the temper of the House when the several parties spoke.

I happened to be present at one debate, which was staged by way of an indulgence for the back-benchers, on the result of a motion introduced by Lord Curzon in the Commons. The deduction of £100 from the salary of a certain minister was the excuse for a debate as to how far the Labor party got its funds from the Bolshevists. Mr. Lansbury got up to reply, to the evident delight of the Conservative party. He proceeded with great eloquence, and finally accused the Conservative party of being a den of thieves and robbers. The Conservative party, in complete delight at this accusation, had one of their representatives get up and ask, was it in order for the Honorable Member thus to describe them? The Deputy Chairman--for they were in supply--very tactfully remarked, "I fancy that the Right Honourable Member for Bow and Bromley has just arrived at his peroration, and it would be unwise to disturb him." (Laughter) That was a hit against Labor. Similarly, a short while after, there was a hit against the Conservatives in which both parties rejoiced equally. This time a Conservative member got up, and in a very dreary and inaudible voice started his list of accusations, which sounded like a mere hum, for nobody could hear; whereupon the Glasgow contingent, who sat together on the same bench, linked arms and proceeded to sigh in a sympathetic chorus--"Amen! Amen!"--which the Conservatives also took up, and that part of the debate ended in complete chaos, and the retirement of the majority of the Conservative party for refreshments. (Laughter) Whereupon Mr. Kirkwood, in a loud voice, called them back to come and hear their own man!

One would have said that they were school-boys. Then a Liberal member got up, and very sensibly remarked, "This is a foolish motion, we have no intention of supporting this vote for the reduction of salary," and he proceeded to make what I think that we here, whatever our party, would have called a few eminently reasonable remarks on the situation, but they were received with intense frigidity by the House. This was an evening when undoubtedly some indulgence was being allowed to the backbenches; but I want to put it to you that, although in social outlook and in policy the Labor and Conservatives are poles asunder both in their strength and in their weakness, yet those two parties are temperamentally not very far removed. (Laughter)

Now, I think it is essential that the Conservative party should incorporate into itself some workingclass representation, and equally it is desirable for the Labor party that they should be reinforced by the more progressive Liberals, if the Liberal party is to come to an end, as one thinks it may well do. I think it is further true that the Labor party was most successful in what had hitherto been assumed to be, the preserve of Conservatism-general European policy. I think it is also true that it was least successful in that of which it had the most intimate knowledge, and for which it was believed to have the most sure remedy, namely, unemployment.

From this you will gather what my impressions are; however, not only is an impression uncertain, but also through politics one cannot get at the fundamental long-period movements that are taking place in national or imperial life. For this, one has to pass away from the emergency happenings of politics--and legislation nearly always suffers from the exigencies of party life--one has to get away from these things and down to the more abiding things. And here, I believe, those of you who have recently visited England will agree with me that, fierce as may be the denunciations common to all parties in English political life, yet there is no sign of that kind of nervous insecurity which, if one were to believe the papers when they are dealing with politics, ought to prevail among peace-loving citizens.

It is in no sense true that the working classes are the "Have Nots" of English life. To take one very notable example, they are, in their own way, among the biggest capitalists. In the great consumers' organization for the distribution and manufacture of the necessaries of life they do business which even our greatest departmental stores would envy. They have a turn-over in their own societies of £200,000000 Sterling a year, and they have among their own employees, distributive and productive, something like 170,000 people. Now, with such capital at stake and with the control necessary to manage such a great enterprise, there is quite clearly another side in working-class life to that of political violence; for this reason Great Britain possesses an internal economic stability, which is hard to shake because it is connected with administration of a great economic enterprise. I do not think a moderate programme necessarily makes a moderate people; but I do think that whatever the program of the working class may be, it is desirable that they should be in some way engaged in enterprises of serious economic purpose. They are so engaged, and that is the enormous tie that exists between the English working classes and English society. (Applause)

With that preface let me sketch what I am venturing to term the economic crisis in Great Britain. It centres around the unemployment problem, which itself on its present scale is an aftermath of war; which itself has been, one must allow, to some extent increased by the measures taken for its relief. In an industrial community, as Great Britain is, I think urban unemployment is the counterpart of unremunerative farming conditions in a new country like Canada. Both are the result, mainly and in the first instance, of the dislocation of markets caused by the war.

In Great Britain unemployment is most acute in those industries which were swollen to meet the demands of war, such, for example, as engineering, which catered for munitions, and shipbuilding--in that group, and also in the group of industries most closely connected with the export trade, in cotton, textiles and shipping itself.

Bad as the condition of things is for those who are unemployed, yet unemployment has not produced any sort of debacle in English working-class conditions. For that they have to thank two things--first of all their trade-union organization, and secondly, and I think mainly, their co-operative organization, which puts a cushion between them and want.

Compared with pre-war conditions, in figures, the situation is roughly this: Prices, wholesale, are up between 60 and 70 percent, but wages are up between 70 and 80 percent, and the cost to the employer is up rather more because the hours of work are rather less and the product per man is rather less. To the employer it means an increase in labor cost of some 80 to 90 percent over prewar, on the average. The result of this, so far as our statisticians can tell us, is that the aggregate production compared with pre-war is down by some 5 to 10 percent, and this is spread over a population which is larger by 6 percent.

But I want to emphasize this, that apart from the real cost of unemployment--by which I mean the demoralization of those who suffer from it--the working classes, as a whole, are not worse off than they were before the war. The loss, such as it is, has been borne, first, by those depending on fixed incomes from property and investment, and secondly by one particular class of wage-earner which is worse off-and the condition of this particular class is perhaps the most serious factor in the labor situation of Great Britain. What class is it? It is the skilled wage-earner whose work is conducted in industries subject to foreign competition; in particular, the skilled engineer, or the skilled shipbuilder, who finds himself now in this position, that his wage has risen less than the increase in the cost of living. I read recently a remark to this effect:--

"The ship-builder goes down to his work in a street-car driven by a man who gets a pound a week more than he does; and lives in a house of which the municipal dust-bin is collected by a man also earning a pound a week more."

In other words, the man who used to belong to the aristocracy of wage-earners is now getting a lower rate than the semi-skilled workers in industries which are not faced by acute foreign competition. This clash between the sheltered and the unsheltered occupations finds its emphasis in the export trade, because the nation generally exports its specialties. That is the most difficult side of the labor problem in Great Britain.

Now, on what line are we to look for recovery here? Of course the main line is the recovery of foreign markets. But here we meet with an awkward dilemma. One of the ways to increase the foreign market is, of course, to bring down the price of goods, which ultimately leads to expansion of sales, and thus to further employment of workers. But this class of worker has already suffered the biggest fall in wages.

Great Britain is now already importing the prewar volume of imports, but exports have not reached their pre-war volume by 30 percent; they are only some 70 percent of the pre-war volume. Of course is is satisfactory to get as much in volume from foreign markets as before without paying as much for it, but if that is to be permanent it means a very considerable transference of enterprise and labor from occupations concerned with the supply of the foreign markets to occupations concerned with the supply of internal wants.

One want stands out glaringly, and that is the want of more houses. The housing shortage is due to the cessation of building during the war, the loss of skilled personnel, and the barriers set up by the building unions to the creating of new personnel other than by the accepted channels of apprenticeship. There is much talk in England of the terrible housing problem. I could not help thinking that if that had been presented to Canada they would have settled it in the five years which have elapsed since the armistice. Undoubtedly, in the power of adaptation to new circumstances, a new country such as this has the advantage the whole time.

Finally, in this connection, I want to urge that one should be cautious in using that familiar word, "dole." Definite gifts for relief of unemployment were made, after the war, especially to ex-service people who were being demobilized. These may be called doles, but they do not belong to the scheme of insurance against unemployment, which is in the main not a system of doles. Between 1912 and 1923 the contributions to that fund came in the following proportions: From employers, 39 percent; from employees, 36 percent; from the state, 25 percent, making 100 percent in all; therefore the benefit received is really a benefit toward which the employing authority and the employees have made the major contributions.

So much, then, for the attempt to pick out the most salient facts in the economic crisis in Great Britain. I conclude with some remarks on the imperial aspect. What are to be the future relations between labor, organized or unorganized, and the Dominions?--because on the healthiness of that relation depends, I believe, to a great extent, the strength of imperial relations in the future. We are convinced, from this side, that to strengthen the imperial tie by a scheme of political federation would involve so much centralization as to be distasteful over here. It is very doubtful if anything like permanent stability can be obtained by fiscal preferences. That issue is, of course, once more in debate. But, however we look at it, there is always a danger that any particular rate of duty may be altered, and thus cause instability and disappointment of expectations.

The next thing, apart from federation and fiscal preference, and one which I would think better than them, is some form of organized knowledge which may in the end produce a real binding tie. I am always appalled by what I will call the "time-lag" in knowledge of events, whether it be a matter of imperial statistics, or in the conditions, let us say, of emigrants or settlers from the old country coming out here. Just as in the old days, the conception of a university was that of a real "universitas" or gathering of people of various nations, so also there is within the Empire a need of assisted organized study by the component parts, prepared beforehand at our universities on either side.

It is to me quite extraordinary, the ease with which one, by being only a year or so away, can get out of touch with the centres of things. I have tried to correct that by going to and fro each year. Now, just as in the army the biggest of our achievements were attained by that magnificent service of liaison between one arm and another, between one ally and another, by skilled men specializing on it as a service, so I believe that there is going to be a new role for our universities in the sense of building up, not only for their undergraduates, but also for their graduate students and their alumni of an intelligent approach into the economic and social conditions of the Mother Country from our side, and of the Dominions from the side of the Mother Country.

You will agree with me that whatever else we may think of England, it is somewhat of an elusive country. Much of the trouble into which the Englishman gets comes from the apparent indifference, from apparent superciliousness. Their hearts were open, and their minds, during the war, and for that the Dominions owe them great thanks, in the sense not merely that it was to help in war time, but in the sense that many a young man, as my undergraduate pupils have told me, for the first time got a sight into something other than the mythical England when he was entertained.

Well, you may say, the shipping companies give us special facilities and we go over as it is; but I would say this, that both for the understanding of one part of the Dominion of Canada by another and also for the understanding of Canada and England, what we want is to supplement that general, individual, unorganized studying by something which prepares a man during the short time he is on a visit to make an intelligent use of his time. (Hear, hear) You may call this unsubstantial contribution to the imperial tie; I am not frightened of that; because we have behind us a spirit of general good-will. On these we can build. Whether it is by way of a common foreign policy, or by way of a harmonized tariff, or by way ultimately of neither of those things, but simply of close imperial contact, with no "time-lag," we have the asset of general good-will, and all we have to do is to build on that with knowledge.

Looseness of thought and lateness of knowledge cause as much friction as definitely antagonistic politics; and it is to such a body as this, of men interested in the Empire, that I, for one, look for help in making the relations between labor in the Old Country, organized or unorganized, and labor out here close, friendly and productive of imperial harmony. That is a cause above party controversy which I believe is worth working for. (Loud applause)

DR. GRANT, Principal of Upper Canada College, expressed the hearty thanks of the Club for the timely and important address, adding that it was a great thing for Toronto University to have such a man as liaison officer between the academic life and the public life. For that element in the address, and for its special application to the subject, he was very glad to move the vote of thanks.