Israel Mattuck, 02 December 1922

It is now almost two years since the problem of unemployment was tackled officially. In August 1920 the Government made the first provisions for meeting the condition of unemployment, which to that time was a threat, and which later became such a stern reality. When, however, the actual distress had come, the provisions then made were found almost hopelessly inadequate so that further steps had to be taken and that was done a little over a year ago in October 1921. But in spite of these efforts, the position today is if anything worse than it has been. What grants the Government has given, have been supplemented in three ways: by the poor relief for the various boroughs, by trade union funds and by savings which many working people had managed to accumulate during the war. These savings, of which it was said by the late Prime Minister, that they exceeded by much the amount they were thought to reach, are now exhausted. Trade Unions, too, it is said, have no more funds with which to help the unemployed members. So that the prospect of distress now appears to be graver, more imminent, more threatening than it has been, while the prospect for that revival of trade which alone can drag us out of the economic depths to which we have sunk, yet appears very remote.

It is true that no one starves. And it must be mentioned to the credit of the Government efforts that have been made that at no time in the past has a period of unemployment been characterized by so little acute distress as this one; and that, in spite of the fact that no period of unemployment was so extensive or afflicted so many people as this one. That comforting condition was produced largely by the extension of unemployment insurance so as to include in its benefits practically all wage earners. The dole, as it has been called, has had to answer for many faults, for some undesirable effects, but it has made it possible for some millions to have food, to retain their homes, in other words, to live, even though inadequately. One draws back in horror from the contemplation of what would have happened to these millions if there had not been this help from the ordinary government and from the local authorities. We have all grumbled at the burden of taxation, yet we must all find some consolation in the fact that the sacrifices demanded of us have kept a number of our fellow human beings from a worse form of distress.

It is, however, generally recognised that the giving of doles is an unsatisfactory method for meeting the problem - that it is no solution at all - that it has many objectionable features. To begin with it is inadequate, and by the very force of circumstances it must be made inadequate. 23s. a week for a man, wife and three children is not a sum upon which they can live without great detriment. That however is the utmost limit of relief, unless the local guardians are willing to risk imprisonment, as did those in Poplar. But even if we were all satisfied to pay the utmost in taxation, so that the unemployed could get a larger dole, we should still be constrained to keep to the inadequate amount for other reasons; not out of niggardliness or economy, though important a reason that is in itself, but for the sake of many people for whom the relief is meant. Even the present amount, we are told, is sufficient temptation for some to prefer idleness to work. The number must be very small, but even this small number must be defended against its own weaknesses. For their own sake, it would be wrong to tempt their weakness for idleness by making it at all profitable. The best friends of the working man recognise this objection to the dole, and though in one moment they plead for an increase in its amount, they have yet to confess the next, that at its best it is a lamentably poor substitute for work.

Another and most serious objection to this form of relief is that a long period of idleness is bound to lead to demoralisation. This is a process difficult to detect, more difficult still to measure. A little idleness may increase energy for work; prolonged idleness will decrease energy and weaken the tendency for work. Moreover, the inadequate relief, though it has prevented the acutest form of distress, has not made it possible to retain physical energy, and even complete good health. In a letter to "The Times" a little while ago, Sir Hall Caine wrote that he had spoken with many men among the unemployed marchers who affirmed with an oath to heaven that for months they had not had more than one meal a day. Such prolonged deprivation is bound to destroy physical power. The cry of the labour party which has of late been so terribly dinned into our ears by the march of the unemployed, is for work or maintenance, but with immeasurable preference for work.

Another part of the solution has been the extension and encouragement of relief works. The economic history of the past has proved such efforts wasteful and productive of deterioration in the morale of the workers. Such attempts as have been made so far in connection with the present spell of unemployment have, I believe, proved better than was expected, but it is palpably impossible to put all the unemployed on relief work. There are too many of them. The inadequacy is proved by the fact that during the last year when the number of relief workers was perhaps largest, the number of unemployed was reduced by only something like 300,000, leaving still about a million and a quarter completely idle and another [missing] only partly employed.

The part of the official plan dealing with unemployment, which, was extended last year, and roused the greatest hope, was that which provided for the stimulation of the export trade and for the emigration to the colonies. The latter can only be looked upon as a course of despair. The unemployed are largely industrial workers, accustomed to the industrial life in the cities, while the colonies can offer help useful only to those who are ready to take on the difficult struggle, difficult both physically and morally, of an agricultural life on virgin soil. It would seem to be true that the man who goes to the colonies, driven by distress at home, who goes there out of despair, perhaps in bitterness will not make a good colonizer, and we shall not be surprised if only the tiniest fraction of the million and a quarter of unemployed would seek escape through this opening.

I do not know what effect the scheme of Government credits for export trading has had. Before its extension a year ago, the results were disappointing. The condition of Europe has been so chaotic, the poverty of the peoples so great, the uncertainty about the nations' future so dark, and the attitude one to another so forbidding, that very little, if anything, can be expected from an increase of international trade.

But the problem is grave, grave to the point of being terrible. It is a problem involving human lives, not only for a day, for a week, for a month, but affecting then for years. A man that is broken now may not be able to re-establish himself and is it an exaggeration to say, that his children will perforce inherit something of his loss? Among many sad incidents in our social life, is there any more sad than a man wishing and eager to work for the maintenance of his family and his home, yet unable to find the opportunity to work? There lurks a grave social danger in the present condition. The wolf cry, communism, has been shouted too many times when there was no danger for us to take it very seriously when it is shouted again by the same newspapers, or the same politicians. I suppose, however, it is safe to say that in times of great want the danger of revolution is not far off. The working man is not by nature a revolutionary, if anything he has again and again proved himself in large numbers to be almost too conservative. A few among his leaders who want to bring a radical change in the social organism cannot be condemned too severely for the attempt to exploit his present condition for the purpose of furthering their aims. The aims may be good, but the best of purposes may turn to evil through the methods adopted for their establishment. The only way to face that danger is by indubitable tokens of sympathy, of unwearying thought for a solution, by constant endeavours to help.

Is there then no solution? We have been told that the movements in trade are such that we have to expect recurrent periods of depression, with the consequent unemployment and distress it brings. The unemployed like the poor must always be with us. Their existence was justified, and even required, it was once said, by the industrial organisation. That point of view has, however, I think, gone. But the feeling of hopelessness remains. It applies to the present condition, though that in an aggravated form of the usual recurrent malady. Shall we take that to mean that the economics upon which our industrial system works confesses itself impotent in the face of this challenge? For unemployment is a challenge to our industrial scheme. It is a challenge because it says that not all who are living can find in it a constant means of subsistence, even if they obey its law which is reward for work, profit for labour. It is a challenge because it introduces hostility between various groups upon whose co-operation the smooth working of the industrial machine depends. The psychology of the working man is his common distrust for his employer, his occasional reluctance to work to the utmost of his capacities, arising out of his dread that he may find himself without work, without a job. It is a challenge to our social organisation. It means that for many the chance for a decent living is at best crippled or obscured. In short, unemployment, like the focus of a disease in the human body, concentrates and spreads poison.

It seems to me that the most hopeful plan of all is the latest proposal of all that the state advance capital to such industrial organisations as the railways to enable them to carry on in full measure the work of maintenance and extension of their undertakings. Before the war, we have just been told, the railways spent something like 20 millions a year on these works; since the war, they have been spending something like 3 millions. A large part of the difference represents wages. This reduction of work has come in spite of the fact that throughout the war years the railways have been obliged to suffer neglect, so that there is much arrears of work to be made up. But the railways say they were unable to get the capital they needed at a rate of interest which could have been born. It is now proposed, therefore, that they draw this capital from the national exchequer and presumably at a lower market rate of interest, so as to enable then to do the necessary work and give employment under ordinary conditions to a large number of men. This suggestion, which I believe it will be credited, promises a large measure of relief, is very significant and may give a clue to an ultimate solution of the whole problem of unemployment. The significance lies in this, that it makes the state partner in a private undertaking. The export trade facilities which were introduced a little bit earlier, had something of this character, but the principle now receives a larger publication. It deserves most earnest thought; though it has come through an emergency, it may show the way for a permanent improvement in the industrial organisation through the elimination of some, if not all, friction and the dangers in it.

Consider for a moment what it might mean if generally applied, in its bearing on the very problem of unemployment. Ordinarily, unemployment is the result of over production. The demand and supply are never quite together. At times of great prosperity the demand is greater than the supply. The tendency is for the supply then to get beyond the demand, the result a period of depression. There is nothing in the present system of individual enterprise which can so stabilize production that it will be equal to the demand and not go beyond it. When the prospect of profits is good the manufacturer will manufacture his product to the fullest capacity of his factory, to the fullest capacity of his men, even working them overtime. But as a very result of that intensity, there comes a reaction - the factory must work considerably less than its capacity, if not close down completely, and the men can work only part time or not at all. It is certain, even at the present time, that soon or late, there will be a revived demand for all the products which men can make. Can it be anticipated? It is a risk that the private manufacturer cannot take. He must wait for years before he can feel safe in proceeding. Moreover, his capital will not permit him to tie it up, for if he produces for a few demands he will have to wait for the payments which he needs for the conduct of his factory. But is it not just here where the state should come in helping him and helping his working men, helping the whole organisation in the conduct of industry? Just as it is proposed now to help the railways, could not other industries be helped at ordinary times, in those periods when there is a threat of a depression?

Such a scheme would have tremendous difficulties to overcome and dangers to face. The experience of the war has shown that there are ways by which the state can take a hand in the conduct of industry and the attempt to wrestle with the problem of unemployment at the present time will bring further experience in the same direction. I know there are grave objections by some on grounds of principle, by many on grounds of practice, to state interference in private industry, but on the other hand we have to face this fact, that private industry by itself has proved itself unable to cope with the problems that it has begotten, that it is unequal to the great social task that lies upon it. We have had now a long experience with a completely private management of industry. We cannot be satisfied. Social welfare, social justice, the laws of humanity require improvement. We cannot go with those who say "therefore let us abandon private industry and turn everything over to the state", that is roughly the aim of communism. Whether humanity will ever measure up to that unselfishness, to that ideal of service, which such an organisation would require, we cannot say, but certain it is that at the present time and for a long time to come human beings as we know them will fall far short of this ideal. Is there not, however, some way by which the condition of both can be combined to advantage of society?

There is also an argument of principle of such a combination. The state at the present time takes in the form of taxes a large portion of the earnings or profits of individuals. The theoretic justice of this course does not concern us. But the state does not share in the responsibility for the conduct of industry. It takes a part of the profits, it does not share the losses. This, however, will take us too far afield. We are immediately concerned with the question, can there be a solution to the problem of unemployment? If we rely on our present economic scheme it seems that the answer is to be, No. Yet in all humanity we cannot be satisfied with such an answer. It would mean that again and again tens of thousands would be condemned to the degradation, to the suffering of unemployment. It would mean an incurable malady in our social system, it would mean a constant source of poison in social relations. We cannot rest, we must not rest, till we have found a way out. If the solution is found to lie in the way of an enlargement of the functions of the state, dare we hold back? But surely every way to an increase of social wellbeing that seems injustice, is justified in itself and by its aims.