Saturday, February 24, 2007

Industrialism and Guilds

by Arthur Penty



In a recent article in the Labour Monthly, Mr. W. Mellor criticizes National Guildsmen, saying that "they began as compromisers and they have been compromising ever since." The criticism is valid; National Guild theory was a compromise. It was a compromise between Medievalism and Industrialism, and the movement has been compromising ever since, because it was committed to a theory that attempted to reconcile irreconcilables.

The truth of this can best be demonstrated by following the fortunes of the National Guilds League, into whose hands the development of National Guild theory passed, once its organization was formed. The National Guilds League, though it borrowed Medieval principles, was modern in that it did not question the permanence and stability of our Industrial system. But having been born of a compromise it was unstable and found itself at the mercy of circumstances. The choice before the movement was whether it would become more modern or more Medieval. But upon this vital issue it could never make up its mind, and so it happened that it came to travel in opposite directions. Its theory became more Medieval and its policy more modernist and revolutionary. Let me explain.

As originally formulated, the National Guild theory was that of a number of highly-centralized Guilds working in conjunction with the State. Nowadays National Guilds are not interpreted by the League as highly-centralized Guilds, but as a federation of local Guilds, while the idea of the sovereignty of the State has so far disappeared that it no longer finds a place in the basis of the League. Thus when the League was founded its objects were stated to be:

"The abolition of the Wage System and the establishment of self-government in industry through a system of National Guilds working in conjunction with the State."

Nowadays its objects are declared to be:

"The abolition of the Wage System and the establishment by the workers of self-government in industry through a democratic system of National Guilds, working in conjunction with other functional organizations in the Community."

As explained by Mr. Cole at the Conference when the change was made, this new basis was recommended as a formula which would allow members who held different opinions as to the position of the State in a future society to remain in the League and work together for immediate practical ends. Those who believed that the State should be abolished entirely, and those who believed that the State, instead of being the all- powerful Leviathan it is to-day, would in the future be stripped of its illegitimate functions and be reduced to the position of one power among a plurality of powers, were both allowed to interpret the basis in their own way. No one apparently believed any longer in the State's absolute sovereignty.

These changes are significant. But the greatest change of all is in the attitude of the League towards Industrialism, which, from being regarded as a thing of permanence and stability, is nowadays looked upon as being on the verge of collapse. When we remember that the reason which led the movement to reject the idea of restoring the Medieval type of Guilds in favour of the idea of establishing National Guilds turned on this very issue; the advocates of Medieval Guilds, affirming that Industrialism was doomed to dissolution and decay, while the advocates of National Guilds denied it, we begin to feel that there is not much left of the National Guild position, and the fact that every departure from the original position has been in the direction of a return to the principles of Medieval social organization is a striking testimony to their truth and universality.

Though, as I have shown, the transformation of thought that took place within the National Guild Movement was in a Medievalist direction, it was, unfortunately, not consciously Medieval, but came about as a consequence of the pressure of events. But a time came when another group of forces of a very different character began to exercise an influence over it, and it was then that the central weakness of the movement came into the light of day, for it was then seen that the movement stood for nothing sufficiently fundamental to enable it to steer its course successfully between the Scylla and Charybdis of modern politics. By the end of 1919 dissatisfaction was being freely expressed with the policy of encroaching control, which hitherto had been the policy of the movement. This dissatisfaction coincided with the spread of Communist propaganda in this country, which turned the thought of the more ardent spirits in the movement from a belief in reform by constitutional means to a belief in force. Thus it came about that the trend of the movement towards Medievalism was brought abruptly to an end, and the movement became a house divided against itself, in which state of mind it has remained ever since, for neither the Revolutionaries nor the Medievalists within the League are in a sufficiently strong position to force a decision, while the centre was too hesitant to throw its weight in either one direction or the other, failing to understand that no compromise was possible between opposed beliefs. Since then the League has been waning in power, though owing to the successful organization of the Building Guilds the Guild idea has been booming in the country, and Guild literature and speakers have been in greater demand than ever.

Now the underlying cause of this failure of the National Guild Movement is that it has never been honest with itself over the question of Industrialism. When at the beginning of its career it believed Industrialism to be a thing of permanence and stability, it was in a more or less defensible position. But when it came to the conclusion that our Industrial System was breaking up, the justification of its general policy disappeared, for what could be the use of seeking to superimpose Guilds over present-day Industrial activities if those activities did not possess within themselves the elements of stability? Clearly this crisis could have been met in only one way, by broadening the basis on which the movement rested, by frankly recognizing that the problem of restoring Guilds is only one among many problems that will have to be faced before the social problem can be solved. Yet on this more general fundamental problem of society the National Guild Movement has absolutely nothing to say. On the contrary, it continues the Socialist tradition of thought of assuming that the only social problems are finally those of organization and ownership. For Guildsmen, when they speak of changing the system, mean little more than changing the ownership of the system. Hence, the real issue with them is finally the problem of how power may be attained. But it is obvious that the attainment of power and a capacity to use it for the public advantage are two entirely different things, and what reason is there to suppose that if the Labour or the Communist Party succeeded to power, they would not be just as much at the mercy of economic forces of society as capitalists are to-day? Frankly I can see none, for neither Socialists, Communists or Labourites recognize the existence of the problem of men and machines that lies at the centre of the economic problem. And because they do not recognize this problem, it is a certainty that they would be at its mercy. They would be as impotent in the face of the present economic morass as the present Government, differing with them only to the extent that they would at least attempt to be more generous and equitable in their attitude towards the workers.

If we compare Socialist thought to-day with the Socialist thought that penetrated the Chartist Movement, we may say that while current thought is of a far more practical order, with more precision in detail, there is not the same grasp of the main essentials of the problem that confronts society as in Chartist times. To explain my meaning, let us consider the different meanings attached to the proposal to abolish the Wage System in Chartist times and in our own, for it is our link with the past. As expounded by the National Guild Movement, the Wage System is defined as being a state of things in which labour is bought and sold as a commodity in the same way as other commodities are bought and sold, and its abolition is the demand that labour no longer be bought and sold in this way. As such it is really a demand for the regularization, stabilization and moralization of the wage relationship and for industrial maintenance during times of unemployment. But when Socialists of Chartist times demanded the abolition of the Wage System they meant what they said. They meant that the system of distributing purchasing power by means of payment for work done was incompatible with the unrestricted use of machinery. They saw that if machinery is to reduce labour to a minimum then it follows that some other system of distributing purchasing power must be substituted for the present one of payment for work done. For the Wage System breaks down entirely when machinery becomes automatic. Hence it was they demanded that purchasing power should no longer be dependent on the receipt of wages, and it was as a means of creating a new social order, in which it would be possible to distribute purchasing power independent of payment for work done, that they came to demand the abolition of the private ownership of land and capital, and the means of production and exchange. The one was the necessary corollary of the other.

But Socialists and Guildsmen to-day have not that same intellectual grip of the general situation as had their predecessors of Chartist times. Their ideas are not organically related to any central idea. On the contrary, they believe in a number of separate ideas, more or less loosely related, but which are not part of an organic whole. In the Report on Fabian Policy, the abolition of the Wage System is rejected as an impracticable proposal, which in the sense in which it was understood by the Chartists is perfectly true. It is impracticable. But apparently Fabians had no suspicion whatsoever that the idea was logically related to the problem of machinery, which was the reason for the Chartist advocacy of the doctrine (equally impracticable) of the abolition of private property in land, capital, and the means of production and exchange, which doctrine the Fabians retained, in sublime unconsciousness of its origin, basing their propaganda on an accessory idea, and rejecting the proposal which gave it at least a logical validity. Guildsmen, like the Fabians, were so completely unaware that there was any connection between the Chartist demand for the abolition of the Wage System and the problem of machinery, that when they revived the phrase they came to interpret it as meaning the regularization, stabilization and moralization of the wage relationship, entirely unaware of the fact that such a policy is impossible so long as the unrestricted use of machinery is permitted. But when truth is turned out of the front door, it has a way of coming in at the back, and the incompatibility of the wage relationship with the prevailing system of industry, which the early Socialists rightly connected with the unrestricted use of machinery, has in these latter days come to be connected with the problem of credit, and in connection with the Douglas-New Age Scheme, the demand is made for "dividends for all" on the assumption that the dividend is to be considered the successor of the wage.

Now this idea is sufficiently plausible to gain converts among people who do not see clearly what such a suggestion involves. Such people object to the idea of wages for several reasons. In the first place, because the receiving of wages seems to imply a servile status; in the next because on the wage basis, artists and poets, scholars and others who do not do work that is of immediate economic value get left out in the cold; and lastly, because the distribution of purchasing power on the basis of payment for work done does not suggest to many minds a sense of the corporate responsibility of society for the welfare of its individual members.

Now when we come to examine these objections we find they are based upon a confusion of thought. Wages, it is true, are apt nowadays to connote a servile condition, but this is not because a system of payment for work done necessarily involves any degradation, but because under modern conditions it so happens that most people who do any useful work are in a servile condition. Under the Medieval Guild system, the journeymen and apprentices received what were, technically speaking, wages; but we do not associate such payments as they received with the evils of the Wage System because, though wages existed under the Guilds, they did not imply the brutal and inhuman relationship which wages do to-day, for labour was not then a commodity, the price of which was determined by the competition of the markets, but was paid for at a fixed rate determined by the Guilds, of which both masters and men were alike members. Moreover, the journeyman only remained a wage- earner during the earlier part of his life. He could look forward to a day when, as a matter of course, he would set up in business on his own account, for as there was a limit placed to the number of assistants any master could employ, opportunities for advancement were open to all who desired to use them. The Wage System therefore did not in those days present itself as an evil in the way it does to-day. On the contrary, it is the growth of large organizations, on a basis of the subdivision of labour and the unrestricted use of machinery, that has created the evils which we associate with the Wage System to-day; for under such conditions, those personal relationships which humanize life tend to disappear, and their place is taken by a cash-nexus divorced from all sentiment and personal regard. It is such conditions that make the Wage System to-day so brutal, but if the use of machinery were restricted and the subdivision of labour abolished as we demand, that disturbing element which makes wages at once so uncertain, brutal and servile would be removed.

The Medieval Guilds accepted payment for work done as being the normal thing in society, but that did not preclude them from giving aid to the sick and unfortunate or of treating exceptional circumstances in exceptional ways. But owing to the fact that under industrialism all the normal human relationships have become degraded, people are always seeking to make the exception into the rule. Thus because under our existing economic system work that is of no immediate economic value cannot command proper remuneration, they repudiate the normal thing that payment should be for work done, in order that some provision shall be made for the exceptional. But surely this is irrational, for there is no reason why a system of payment should be uniform. It was in the past frankly recognized that certain kinds of activities depended upon patronage, and this should be recognized to-day. But again there is the same prejudice against patronage as against wages, because like all right and human things, it lends itself to abuse. The Church and Guilds in the Middle Ages were the patrons of learning and the arts, and if restored they would become such again in the future. It is because of the decline of the one and the disappearance of the other that learning and the arts are in such difficulties, but it is vain to suppose that people can ever be led to make the exception into the rule. For if they have not sufficient interest in these things as to be willing to act as their patrons, there is no prospect whatsoever that they could be induced to turn the economic system upside down in order that such exceptional activities may be provided for.

And the instinct of the people would be right, for if payment in the future is not to be on a basis of work done, then we must have industrial conscription, for how otherwise is the necessary work of the community to get done? And I don't see how the artist or poet is going to fare advantageously under such conditions. The Church and Guilds might be persuaded to discriminate in their favour, but I cannot see it happening under a national system of industrial conscription.

Further, it is necessary to consider how such a proposition as "dividends for all" would in practice be applied. Reformers may have visions of a wonderful system of industry under which all existing evils would be abolished and each individual have complete and absolute liberty, but in practice the popularization of such an idea could have no other effect than to create a popular vested interest in the maintenance of the existing system of industry with all its abuses. For you cannot abolish the Black Country and draw dividends on it, since the two ideas are mutually exclusive.

But is there anything practical at all in this proposal of "dividends for all?" It is obvious that it can only be theoretically justified on the assumption that the present system has within itself the elements of permanence and stability. If the wage system were the only thing that was breaking down, then the plea that purchasing power must in the future be distributed by means of dividends rather than wages would at any rate be plausible. But the fact is that simultaneously with the breakdown of the wage system, there is going on the breakdown of every other institution in modern society. Politics, religion, art, industry, technical skill, the institution of the family, and all other social traditions are in a state of disintegration. As it is apparent that all these problems are organically related to each other, it is evidently impossible to effect change or reform in any one of them apart from dealing with the problem of machinery that lies behind them all. Thus, to go no further, "dividends for all" is only possible on the assumption that our financial and industrial system can be preserved.

This brings me to the central idea of the Douglas-New Age Scheme which we must now proceed to consider. Mr. Douglas sees, as most people who think do, that the deadlock that has overtaken industry is no ordinary trade depression that will gradually disappear before the normal operations of demand and supply as previous depressions have done. On the contrary, he maintains that the present situation is the logical outcome of the pursuit of the policy of Maximum Production on a basis of bank credit. Our system of credit, he says, upsets the balance between supply and demand by reason of the fact that whereas credits are given for increasing production, they are not given for increasing consumption. That Mr. Douglas has put his finger on the immediate cause of the present deadlock, apart from the economic confusion resulting from the war and the stupidities of the Peace Treaty, is not, I think, to be denied. There can be no doubt that the wholesale issue of credit by the banks to individuals, on the basis of "to him that hath shall be given" is the immediate cause of the present financial deadlock, for it is impossible in the long run to offer facilities for the increase of production without giving corresponding opportunities for the increase of consumption, without upsetting the balance between demand and supply. But while we may agree that the wholesale issue of credit is the immediate cause of the deadlock, it is clearly not the ultimate cause, as we shall find out later. But meanwhile Mr. Douglas proposes to correct this discrepancy between demand and supply by selling goods below cost, the selling price of any commodity bearing the same ratio to its actual cost as the total National Consumption of all descriptions of commodities does to the National Production of Credit, while the Government is called upon to reimburse to the producers of any commodity the difference between their total cost incurred and their total price received by means of treasury notes, such notes being debited, as now, to the National Credit Account.

Now the first and most obvious objection to this Scheme is that such a wholesale issue of paper money would depreciate the currency. But Douglasites are unwilling to admit this. They urge that the fixation of prices which finds a place in the Scheme would be a sufficient safeguard against this. And when we object that to make such a measure effective it would be necessary to fix prices simultaneously in all industries, since if the Scheme were applied gradually and prices fixed below cost in one industry and not in the others, the prices of commodities that were unfixed would rise to restore the balance, they reply that the rise of prices in non-regulated industries would rapidly force on the application of the scheme to other industries. But it won't do. All economic theories based upon the theory of enlightened selfishness promise such results. The adoption of Free Trade by this country, it used to be argued, would force its adoption on other countries, while the theory of unfettered individualism was justified on the grounds that while as producer the individual might suffer, he would nevertheless benefit by the cheapening of all he had to buy. But somehow or other all prophecies based upon theories of enlightened selfishness produce results the very contrary of what was intended. And this theory would certainly be no exception to the rule, for in these days of international markets the unit to be considered is not this country but the world. Under such circumstances the proposition is unthinkable. Those who believe in it only find it thinkable because they love to live in a world of abstractions divorced from reality. The only remedy for such mental states is to translate economic abstractions into concrete terms and to think always in the terms of actual wealth--of bread, clothes, buildings, ships, fuel, furniture, etc. Tested in this way, such abstractions as production and consumption will appear as the most ambiguous of categories that conceal essential differences. Thus they will include everything from food to armaments, things that support life and things that destroy it, and yet we are asked to believe that the economic balance of production can at any time be restored by selling goods below cost. But what if there are things which people do not want at any price--armaments for instance? How would selling below cost help the situation? The whole thing is absurd; it is an illusion that owes its origin to a fatal habit of divorcing the problem of money from the problem of things. It is the reductio ad absurdum of our financial system.

I said that the problem of credit might, apart from the economic consequences of the War and the Peace, be regarded as the immediate cause of the present deadlock, but that it was not the ultimate cause. In support of this contention I would draw attention to the fact that the present deadlock was foreseen by Marx. It finds a place in the Communist Manifesto (1847). And yet, though Marx foresaw this deadlock, there is not in the whole of his writings anything about the problems of credit and high finance (which is not surprising, for the problem is largely the creation of the Limited Liability Companies Act of 1862). On the contrary, he foresaw it as the logical outcome of the investment and reinvestment of surplus wealth for further increase (theory of surplus value). If, therefore, Marx foresaw this deadlock seventy-five years ago, long before this problem of credit had made its appearance, does it not prove that the problem is much more fundamental than the problem of credit? Nay, does not the problem of credit begin to appear as an effect, as a symptom of the disease rather than its cause, and will it not therefore be necessary to dig deeper than Mr. Douglas has done if a solution is to be found?

But while Marx saw that the investment and reinvestment of surplus wealth for further increase would in the long run produce an economic deadlock, he did not regard this practice as the ultimate cause, for he saw that behind the problem of finance was the problem of machinery. He saw that the capitalists were not masters of their own house, inasmuch as they were at the mercy of their machines. The progress of invention was driving capitalism along the road it was travelling, and would in the end spell its destruction. So far I can go with him. But beyond this point we part company, for there was something he did not see. He did not see that the process of industrial development that he traced was not only destructive of capitalism, but of the very fabric of society, while in the long run the unrestricted use of machinery and capitalist development would bring into existence a civilization so complex that the human mind would be unable to comprehend all its multitudinous interconnections. And because of this, because modern civilization makes demands on our alertness and many-sidedness with which our wits and sympathies cannot cope, it tends to degenerate into anarchy. This consideration, apart from any other, should be sufficient to convince us that there is no solution of our problems apart from a return to simpler conditions of life, such as would reduce the complexity of our relationships to terms commensurate with the human understanding.

Looking at the problem from this point of view, our industrial system no longer appears as the foundation upon which a more highly developed civilization can be superimposed, but as a blind alley, from which we must retrace our steps or perish. But how may this be done? This is the sphinx riddle that confronts us, and it is by no means easy to answer. Perhaps it cannot be answered completely by any individual. But of this much we can be certain; that any change in the direction of our activities must be preceded by a change in the heart and mind of the people. That such a change is actually taking place I think is undoubted. But it has not yet proceeded sufficiently far to become practical. The popular mind is thoroughly disillusionized over the idea of progress, but it is still largely under the spell of machinery, and not until that spell is broken will our minds be sufficiently liberated to think and act clearly. The first step, therefore, is to break this spell by means of propaganda. If we could do this, we should be able to see clearer, for the popularization and acceptance of an idea will, if there is any truth in it, tend to create the circumstances necessary to its transformation into the terms of practical politics.

It is a philosophical truth that no synthesis is ever complete, since in every synthesis there is always something left over that becomes the starting-point of the next synthesis. To translate this idea into the terms of the social problem, we may say that the army of unemployed is the something left over from the industrial synthesis, and therefore in our efforts to reconstruct society we must begin with it. Marx recognized this, and he proposed to use them for the purpose of overthrowing the capitalist system by a proletarian revolution. But recognizing, as we do, that our industrial system is in a state of disintegration, the problem that presents itself to us is not how the industrial and capitalist system can be captured or overthrown, but how a new civilization can be built out of its ruins, and therefore we shall attempt to deal with the unemployed as individual men rather than in the mass. Accepting the position that our industrial system is doomed, we should set to work to turn them into agriculturists and handicraftsmen. There should be no more difficulty about this, if it were undertaken in a public way, than there was about turning civilians into soldiers during the war. It is entirely a question of will and determination. Hitherto our efforts to do anything with the unemployed have been the last word in futility, but that is because the only idea behind the various schemes for dealing with them has been to make work, to mark time, as it were, until trade revived. Such an aim inspires nobody. The unemployed themselves are conscious of the futility of the work on which they are employed, and this sense of futility is demoralizing in the last degree. But if the fact that our industrial system is doomed was frankly faced, and men were given a craft or agricultural training to enable them to take their place in the new social order, their work would come to have meaning for them, and this would make all the difference in the world, for men can only do their best when they are dominated by a real motive.

By such means a new society could be built within the existing one, and as our industrial civilization falls to pieces, this new society would gradually take its place. There should be no difficulty about this, if the principle were frankly recognized that at every stage in its development the new society should be protected. The foundations of such a new society would rest, as all stable societies rest, upon agriculture, and to effect such a revival as we anticipate, agriculture would need to be protected from any foreign competition, and prices and wages would have to be fixed. There would, moreover, have to be a complete overhauling of our land system, the reform of which, it is to be presumed, will become practical politics as the situation tends to become desperate. Upon this base of agriculture the new industries in which the subdivision of labour was abolished and machinery controlled would rest. Such industries would need, in the first instance, to be protected against the competition of industries in which the existing abuses were retained, which could be done by putting a tax upon machinery and the subdivision of labour. After a time, as this new society began to develop an organized life of its own, it would no longer stand in need of protection from outside industries, for the saving of cost that would be effected by the elimination of cross-distribution and of overhead charges would more than compensate for the increased cost of its production. Still, prices and wages should remain fixed, and every industry be under the regulation of Guilds to prevent capitalism growing up again within the new society, which it certainly would if freedom of bargaining were permitted. There would be no practical difficulty about reconstruction upon such lines, once the idea was popularly understood. It is impossible to graft the principles we stand for on to modern society if taken separately. But handled together, as part of a large and comprehensive scheme, and nursed in the early stages, there is no reason why they should not be acted upon. We may not be able to return to simpler conditions of society individually, but there is no reason why we should not do so collectively.

Meanwhile external conditions are co-operating to force upon us an agricultural policy. The conclusion becomes irresistible that the days of our industrial supremacy are over. It was an accidental and temporary and not a permanent circumstance that gave colour to the theory, so popular in the first half of the last century, that we were destined to become the workshop of the world. This economic myth owed its origin to the fact that this country was the first to embark upon an industrial career in the modern sense. We had certain natural advantages, an abundance of mineral wealth, and an unrivalled geographical position, which naturally constituted us a centre for trade and commerce, while securing us from the fear of invasion. But the great fact, compared with which all others pale into insignificance, was that we were the first to use steam-power and machinery. It was this fact that enabled our goods to penetrate into every part of our world, which built up huge credits in every country abroad, and led to the enormous expansion of our mercantile marine, while constituting us the merchants and bankers of the world.

But it is apparent that this virtual monopoly could not last indefinitely. It could last no longer than we retained our monopoly of machinery, since, other things being equal, it would always be cheaper to produce goods near the markets and where raw material is found than at a distance from them, and therefore it has happened that one by one other nations adopted machine production and our monopoly came to be challenged. Before the war we were holding our own with difficulty. Lancashire was losing her cotton markets, because of the competition of America, India, Japan and Brazil. Australia had begun to produce her own woollen goods, while in many markets, for all kinds of goods, we suffered from the competition of Germany, Japan and America. But it was the war that completed the change for us by transforming the world conditions. It shattered the fabric of our commerce, industry and finance. Deprived of their accustomed supplies from us, many of our former customers were driven to begin producing all kinds of things for themselves, and as these new manufactures are carried on near to where the raw materials are found or produced, it is manifest that these markets must gradually slip from our hands. We cannot hope in the future to export such large quantities of manufactured goods to Australia, Canada, South America and elsewhere as hitherto, while the tendency is for other nations to carry their own goods in their own ships. Meanwhile, in order to finance the war, we were compelled to dispose of most of our foreign investments. Thus, in one way or other, there is not the money coming into this country that there was before the war, and our industries will not be able to provide work for such numbers as hitherto. Not being able to sell goods to the food-producing nations, we shall soon be without the money to pay for the food we must import to keep our population alive--a fact that is brought home to us by the constant falling of the rate of exchange with food-producing nations.

That is the immediate practical problem that confronts us to-day. If anything could demonstrate the folly of a nation allowing itself to become dependent upon other nations for its supply of food, and building up national industries which were dependent upon foreign supplies of raw material, the situation in which we find ourselves to-day should do so. We have allowed ourselves to drift into an impossible situation, and things must steadily go from bad to worse until agriculture is revived, for as the countries upon which we have been accustomed to rely for a supply of food are beginning to produce their own industrial wares, it follows that our exports to them will tend to become a steadily diminishing quantity, and therefore the only way to meet the situation is for us to take measures to produce as much food as possible for ourselves by the revival of agriculture.

Whether or not sufficient food can be produced in these islands to satisfy our requirements is a debatable question. But supposing it cannot, then it follows that if our foreign trade shrinks to the point at which we cannot sell sufficient goods to food-producing nations to buy the food required to support our surplus population, there can be no remedy apart from emigration, for no tinkering with the machinery of distribution can distribute more food than we can grow and import.

Thus it comes about that the trend of events is forcing upon us the Medieval policy which sought to make each country as self-contained as possible. Though at the moment the loss of our markets is an inconvenience which it is impossible to exaggerate and adds to our perplexity, yet I am persuaded that in the long run it will prove to be a blessing, for so long as our industries were dependent upon foreign markets it was impossible to initiate really drastic reform, for under such circumstances the factors that really governed the problem were outside of our control. The modification of a tariff, or a war, the discovery of some new raw material or some other such event in some remote corner of the world, would dislocate the labour of millions at home, while all the time our fortunes remained in the hands of capitalist adventurers, for they alone could find markets for our surplus produce. To break with this tradition has hitherto been the great obstacle in the path of reform, for it was hopeless to attempt to bring order into an economic system that ramified out into every quarter of the globe. But the obstacle that refused to yield to reason is being removed by the force of circumstances, and a situation is being created in which the social problem may be solved if we have the will and the energy. For with a revived agriculture, with the people back again on the land, a foundation will be laid which will enable a social fabric to be rebuilt that will be permanent and stable.

If it be laid down as a maxim that the first principle of a normal civilization is that it be as self-contained as possible, the second undoubtedly is that it should in no sense be living on capital, but arrange its production in such a way as largely to reproduce itself. Before the age of machines, the inroads made by man on irreplaceable material were moderate and offered no menace to posterity, the store of mineral wealth in the world remained almost intact. But our industrial methods of production use up material at an alarming pace. The machine has an insatiable appetite for fuel and minerals of all kinds, the supply of which is limited. The easily accessible sources of supply of raw materials are becoming exhausted, and the necessity of getting hold of new sources of supply was one of the causes of the war. These considerations, together with the steady and progressive decline in the quality of production, the decay of technical skill, the atrophy of the individual and the social and economic chaos that has followed everywhere in the wake of the machine, lead us inevitably to the conclusion that reaction must come, for it is simply impossible for civilization to continue on the road it is travelling. Such a reaction, by leading to the revival of pre-mechanical standards of thought and industry, will remove the greatest obstacle of all to the solution of our problems.

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