Our Industrial Problems, ™
needs of employees in that part of their
real income, which comes direct from
the conditions under which work is done.
Ilvery advance in the direction of more
healthful working environment, whether
pliysically or psychically, is a contribution
to the more equitable distribution of real
mcome and obviously an increase in the
share obtainable by work as such. The
{rue significance of this modern develope
ment has vet to be realised.
(iv) The spread of stock ownership, by
which is meant the growth of industrial
nvestment among increasingly greater
numbers of wage and salary earners, bids
{air to become a feature of major impor-
tance 1n affecting the extent of indepen-
lence of those of the smaller income
plasses upon income from work, This
spread, especially in the United States,
has given rise, it is true, to rather extra-
vagant hopes for the rve-adjustment of in-
lustrial relations. But, without believing
it to be indicative of any force making
for a very considerable redistribution of
income, as between the more clearly dis-
tinguishable property-income and work.
income classes, we do recognise the ten-
lency as a contributory stream to the
solution of the main problem of income
distribution.
(v) The sharing of net earnings with
smployees, by the several devices of arbi-
trary cash bonuses, provident and benefit
funds, subsidised share purchase schemes,
and organised profit sharing and co-part-
nership plans, subject to conservative re-
sognition of their limitations, and to the
soundness of each particular scheme, has
inereasing significance in the light of our
zeneral thesis. This significance becomes
apparent the more it is recognised that
many minor roads may be travelled by
the business units in the organised army
of industrial intelligence. Such individual
schemes offer no grandiose solution, Yet
the very willingness of employers to con-
sider at all any scheme to divide business
profits with employees implies faith in the
probabilities of greater goodwill and co-
sperative effort in business and an initia-
tive in giving a lead out of the present
mpasse.
{vi) “Rationalisation” of industry is &
new phrase, broadly descriptive of reas
soned efforts to eliminate the instability
which industry suflers from unreasonable
lependence upon the virtues of uncon-
trolled competition. Like competition it-
self. it is capable of good and evil. At
its +.orts it is monopoly, writ large. At
its best it is organisation for the elimina-
tion of wasteful overlapping and for the
relative stabilisation of production, prices
and employment, within particular indus.
tries. Recurrences of serious unemploy-
ment ave the mark of a major defect of
sconomic society. Recent study has
shown that business fluctuations are a
normal feature of progress and that they
ire the most potent cause of unemploy-
nent. Tt lms also been demonstrated that
preafer stability in business and employ-
ment can be achieved by
‘a) Better planning of public loan ex-
penditure to avoid excessive borrows
ing in times of active trade and drase
tic retrenchment during a depression.
(b) Better planning of construction
work and of selling and purchasing
olicies by private business, and
ro} A more rapid adjustment of credit
policy to trade conditions.
These measures involve a greater sense
of social responsibility upon the part of
governments, banks and business men, but
they are essential to an improvement of
industrial relations. Unemployment is un-
doubtedly a serious cause of industrial un-
rest, and its elimination is one of the con-
ditions of happier relationships in indus
try.
(vii). Violent fluctuations in the cost of
iving have been a fruitful source of ine
Iustrial unrest. Rapid changes in whole-
sale prices have equally serious effects in
xausing business instability. No proposal
‘or improving industrial relations can
gnore the importance of price stability,
soth wholesale and retail. Means are
wailable, through central banking insti
sutions, for promoting price stability. Aus-
‘ralia, with its financial nexus with Eng-
tand. should maintain exchange stability
with London. This can be done through
a {urther development of what is known
as the sterling-exchange standard, a modi-
fication of the gold-exchange standard.
Australia has taken some steps to adopt
this system already and only slight modi-
fications in the policy of the Common-
wealth Bank and its relations with other
banks. would be necessary, for its complete
development. This would realise price
stability, provided British prices remain
stable. Failing this, it might be neces-
sary for Australia to contemplate taking
fripiinal action, through its own central
ank.
4. Adaptation to Australia.
Can these measures be readily adopted
an Australia, with its peculiar system of
compulsory arbitration, or must this sys-
tem be abolished? Arbitration has be-
come an integral part of the machinery
for controlling ihdustrial relations in
Australia. Any attempt to upset exist-
ing arrangements, and to break with a
well-established tradition, would promote
an atmosphere in which fundamental im-
provements in industrial relations would
become impossible for many years. The
game reasoning applies to trade unionism
and the vital question for consideration is
whether the proposals outlined can be
adopted whilst: arbitration and trade
unions retain their importance. Our an-
swer- is; Yes. If the suggestions made
in Section 3 are adopted in Australia, ar-
bitration will become more effective, while
the energies of trade unionism will be di-
7evted into constructive work. Such gene-
ral nroposals as price stabilisation and the
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