Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  


    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 79

Some Facts and Detailed Evils of the Private Profit System

page 4

Some Facts and Detailed Evils of the Private Profit System.

The following facts are well established, viz:—That all classes who work for salaries or wages in New Zealand have practically reached their limit in earning and spending power under the present system of conducting our industries for private profits.

That when wages are advanced, the prices of all kinds of commodities are advanced proportionately.

That this advance in prices is owing to association agreements, and the federated status of the employers.

That private enterprise has proved wholly inadequate to the task of finding steady and remunerative employment for the people.

That capitalist employers aim at having a reserve of labour in this and every country.

That when production has been great, owing to the use of modern machinery and improved methods, then labour suffers most.

That the workers must then take an involuntary rest, seek other employment, work part of the time, or accept a reduction in wages.

That the private profit system is contrary to true Christian principles, sound ethics and common justice.

page 5

That the workers need never expect any appreciable betterment of their condition under the system.

That the basic principle and injustice involved are the facts that capital is permitted to take, not only large salaries for ability, interest, rent, upkeep and all expenses, but also all the surplus profits made possible by the combined, direct and indirect productivity of Capital, Labour and the Consumers.

That labour is the real producer, and capital value is the thing produced.

That capital never produced anything without the application of labour.

That the capitalist system lives and thrives on the surplus profits kept back from the producers.

That the system has been handed down to us by our ancestors, and has been accepted tamely, without serious protest.

That labour is not much better off, in a permanent sense now, than it was before wages and conditions were fixed by Conciliation and Arbitration.

That arbitration awards are localised and governed by the bare cost of living.

That it is not possible or intended that labour shall ever receive, under the private profit system, more than a bare and precarious livelihood.

That most of the workers under the system are seldom removed more than a fortnight from absolute want and destitution.

page 6

That the workers have not fully comprehended this important fact.

That the workers and most of the employers seem to think, in a vague way, that the Private Profit system must continue, with possibly some slight modification.

That this view is erroneous and wholly unwarrantable.

That the whole advancement of mankind, as well as our industrial advancement, has been and is now, evolutionary.

That Collectivism must succeed Capitalism just as Capitalism succeeded Feudalism, and as Feudalism succeeded Slavery.

That the private profit system must eventually give way to the humane and rational system of collectiveism or public ownership.

That the great work of ample production for all humanity has already been achieved by the use of modern machinery, organisation and improved methods.

That in the most productive countries all their home requirements can be fully met by running the factories from seven to eight months of the year.

That under united intelligence the productive power of the people could be greatly increased.

That the capitalists in all industrial countries are seeking expansion and new markets for their surplus products.

That capitalist disregard for the interests of the people is clearly shown in the fact that page 7 the capitalists of Britain have now 3,500 million pounds invested in foreign countries, regardless of non-employment, widespread poverty and destitution at Home.

That capitalist private profits are the real cause of nearly all the extensive and expensive national armaments, the supplying of our "so-called'" enemies with arms, all wars, and the consequent misery and degradation inflicted upon the human race.

That the gunmakers and shipbuilders, assisted by the navy and other leagues, are now working the oracle successfully and raking in the profits.

That under the profit system the lowest wages possible are paid, and that there the private employers seek to avoid further responsibility. That the little private employers who are competing for profits are doomed.

That the private profit system disregards every law of the Decalogue, knows no patriotism, and is satisfied only with concessions, subsidies, bonuses, cheap labour, low wages, interest, rent and profits.

That very little more can be done in New Zealand by way of legislative palliatives. This is admitted by the Minister of Labour.

That a Liberal-Conservative Government can never give the people Industrial emancipation because of allegiance to the private profit system of exploitation.

That a small percentage of the people are growing richer, while the great masses of the page 8 people need never hope to better their position by engaging in any kind of profitable business on their own account.

That a large majority of those who engage in competitive business fail, and that failure means blasted hopes and blighted homes.

That the interests of humanity demand absolutely that the mental, moral and physical welfare of mankind must be considered before private money accumulation.

That the welfare of the whole community must be placed before the personal gain of the small percentage (say 10 per cent.) of the people who take profits and are now privileged to give uncertain and irregular private employment.

That enforced idleness and want under the system is a disgraceful crime against humanity and the State.

That this year's surplus profits will be added to the capital now used for further exploitation next year.

That an Independent-Labour Government in power would meet the wishes of the people, while a Liberal-Conservative Government stands for stagnation and private enterprise.

That when the people realize the difference between Private Ownership for private profits and Co-operative Public Ownership in the interests of all, they will not cease demanding the change until it has been actually attained.

page 9

That the exploitation of the people by way of private profits must be abolished.

Evolutionary Advancement.

1.The individual in business.
2.A partnership.
3.A share company.
4.Several share companies combined.
5.A private trust controlling raw materials, machinery, wages, conditions, output, distribution, prices and profits.
6.The next step must necessarily be the public ownership of every important industry, embracing all connected with each branch, and conducted in the interests of the whole people. The State to control wages and conditions for the workers and quality and prices for the consumers.

How Wages, Conditions, Importatation, Quality and Prices may be effectually regulated by active State Competition.

The most direct, simple and surest way to regulate and control wages, surplus labour, conditions, and the prices charged to the consumers, is for the Government, the people, to gradually purchase the monopolies and the Trusts outright (when possible), and conduct them in the interests of the whole people.

If unable to purchase the monopolies satisfactorily, then the Government must page 10 establish genuine, up-to-date Competitive Plants or Works, such as will enable the people, in self-defence, to obtain their own through State competition. There is no country where the consumers or users pay more, or indeed as much, for imported goods, or for goods manufactured locally, as in Australia and New Zealand. If the separate, obsolete and useless competitive factories (they are not all useless or obsolete) now found in each branch of production were consolidated, and modern machinery and methods were introduced, and the goods that could and should be manufactured in New Zealand, were actually produced locally, instead of being imported, at least one-third more people would be profitably employed, and the number and the revenue from numbers would increase year by year.

New Zealand's Industries Stand First.

It is manifestly the duty, as well as the privilege of the citizens of every part of the Empire, to first develop their own natural resources, encourage and render stable their own industries, and thereby ensure progress, contentment and continuous remunerative employment for their own people, and then (and not before) to extend as much benefit as possible over the seas, by preferential duties or otherwise. An industry firmly established in page 11 New Zealand is infinitely better for New Zealand, and quite as beneficial to the "Empire" of which we form a part, as any similar industry would be, if located in England and supported by New Zealanders. Each and every part of the Empire should develop and control its own industries and natural resources. We now own, under State and Municipal Capitalism, subject to the bonded cost and the interest thereon, payable to the foreign money lenders:—
  • New Zealand's Railroads
  • Telegraphs
  • Telephones
  • Post Offices
  • Savings Banks
  • State Bank Partnership Funds
  • Life and Accident Insurance
  • State Fire Insurance
  • State Coal Mines and Depots
  • Public and Technical Schools
  • Public Trusts Office
  • Public and Endowment Lands
  • Public Buildings
  • Harbours and Lighthouses
  • Roads and Bridges
  • Parks, Gardens and Domains
  • Public Libraries
  • Water Works and Water Power
  • Tram Lines and Lighting Plants
  • Destructors and Abattoirs, etc.
page 12

It is proposed to establish, gradually, a system of self-supporting public enterprises, that will embrace all the means of life, also all that we need for use, pleasure and convenience, without, say, 90 per cent, of the people being compelled to pay the other 10 per cent., a special class privilege tax by way of private profits.

No Idle Dueam.

The national profits from our State Banking and Industrial undertakings, should and would, when established, be ample for moderately rapid expansion purposes.

The people may easily, by united Parliamentary action (there is no other way), transform most of our industries from private to public ownership during the life of the present generation. This is no Idle dream, as the Independent-Labour Party will surely and speedily undertake that pleasant task. The Liberal Conservatives will not move in a matter so important to the people. Their policy (as often repeated) is to encourage private enterprise and to maintain industrial conditions practically as they are. The few must still be permitted to exploit the many by way of private profits, and chaos and cut-throat competitive methods must rule, where order and harmony might, prevail.

Trade Agreements.

Many of the local businesses and indus- page 13 tries within New Zealand are already controlled by association agreements (written or unwritten), which exact uniform prices, etc., from the consumers. A trade association agreement, a combine or trust, that is not regulated by active State competition, completely nullifies any possible benefits that might be derived by the people from either Freetrade or Protection, as the prices charged to the consumers are made and adjusted as desired.

Many of the industries of importance in the United States and Canada, and many of the industries of Great Britain, etc., are now controlled by a combine, trust or business association, that regulates employment, wages, output and prices.

Foreign Competition.

The manufacturers in the countries from which New Zealand's competitive imports are drawn, have had, for many years, established facilities sufficient for producing, as before stated, all their extensive home requirements in seven or eight months of the year. Our rivals have also taken full advantage of modern combination, complete organization, abundant capital, convenient raw materials, long working hours, comparatively low wages, cut-price piece-work, extensive factories and the latest labour-saving machinery and appliances.

page 14

Our Present Need.

As the ability of the people to supply their daily needs and the payment of interest, rent and profits, depends upon their steady employment, industry and wages, it follows that an intelligent and permanent settlement of the industrial question is of more importance at the present time to the great masses of the people than either the land or the money questions, which, however, will not be neglected. We know that our industrial system, as now conducted, is accountable for our haphazard production and distribution, extensive importation, lack of incentive to the workers, fictitious values, sweating, low wages, strikes, broken Arbitration Awards, industrial unrest and make-shift legislation.

Stop Importation and Limit Profit.

The industrial question will never be settled "until it is settled right," and we respectfully submit that the way to settle this problem permanently is:—
1.To stop wasteful local competition by encouraging the modern combination of our scattered industries in each line of production.
2.Stop by tariff protection foreign competition and the unnecessary importation of the goods that should be made in New Zealand.page 15
3.Stop capital, when combined and protected, from taking advantage of the consumers by genuine State competition. The consolidation and Protection, of our industries, when rendered harmless by genuine State competition, would greatly increase employment, and at the same time absolutely protect the public as consumers, by limiting private prices to those charged by the State.

An example, showing the necessity for this proposal, was cited by the Acting-President of the Canterbury Chamber of Commerce recently, who stated that: "the excess of imported boots and shoes over local manufacture was 96 per cent., while the excess of imported woollens was 57 per cent., and of machinery and implements 95 per cent." If all the factories in New Zealand were consolidated, modernly equipped and specialized in each line of industry, they would be very effective in production, and only medium in size when compared with foreign competitive factories.

Profitable Markets.

New Zealand's markets are flooded with foreign-made goods because they are profitable markets, even when prices can be obtained which are lower than the catalogue prices charged for locally made goods. We should remember that the prices charged in New Zealand for foreign-made goods are regulated page 16 mainly by the prices charged for locally-made goods intended for the same purpose. If the prices of locally-made goods are high, then the prices of foreign-made goods are also high.

Remunerative Work for Every Citizen.

Competitive State factories, in all the leading and monopolized lines of industry, assisted by extensive State farms, carefully selected for the production of cereals, fruits, vegetables, flocks and herds, would add immensely to our prosperity and population, develop and create an active demand for our raw materials and all kinds of factory and farm products, and provide sure employment for every citizen able to work. The sweaters, adulterators and shoddy makers would be compelled to go straight; otherwise, the workers, whom they are depending upon, and their trade would gradually go over to swell the people's own industrial enterprises. It will be found that this system of State competition, conducted on business lines, will be infinitely better as a regulator of wages, conditions and prices, than any form of Conciliation or Arbitration, as the latter have practically reached their limit of usefulness.

Return Cargo.

Cotton goods, iron, steel, hardware and numerous lines of goods, wares and merchan- page 17 dise, will no doubt have to be imported for some years. We could, if necessary, use our own ships for mails and cargo, and, as the employment difficulty would be completely solved by State competition, the returning ships would be loaded mainly with immigrants, who would be required, and who would be of more service and profit to the Dominion than needless cargoes of foreign manufacture. New Zealand could support a population of many millions, but not under the private profit system, as we would then have a repetition of all the horrors of poverty that disgrace the old world.

Surplus Profits Must Belong to the Whole People.

The reductions in railway, telegraph, Telephone and postal rates have been mainly in the interests of the commercial and employing class, and are of little use to the wage earners. The workers get only casual employment, or, at most, steady employment, which will not return, in any case, more than a bare living. Under the private profit system the workers never have had and never will have any interest in the surplus profits; they may rely upon that as an absolute fact and as a fixed certainty. Competitive State factories, works and farms, will insure agreeable employment for all, better conditions, better wages, fewer hours of toil, better and cheaper page 18 food, clothing, dwellings and all other necessaries, and the system would also afford the workers an incentive to give their best services because of their State partnership, or treasury interest in all the surplus profits.

Elect Pledged Representatives.

It remains to be seen if the working classes, which include all who work for salaries or daily wages, actually have the good sense and business foresight to look after their own affairs, personal interests, and the interests of those depending upon them, by thorough organisation, economic education and united action in the selection and election of municipal and State representatives, pledged to work for their emancipation.

Use the Public Credit.

To use the public credit in procuring funds for any kind of needful reproductive public works is good business, and this is our proposal, in party, for the present, in the establishment of competitive State factories, farms, etc. The establishment of State competitive plants and works for producing the necessaries of life is a humane proposal, and quite as legitimate as the use of the public credit for the purchase of lands for closer settlement, the building of railroads, telegraph and telephone lines, roads, bridges or any other public works required in the interests of the whole community.

page 19

Labour Cannot Buy Her Surplus Products.

When the demand for our surplus products is curtailed from any cause in foreign markets, the workers cannot buy from the employers any appreciable part of the surplus, as that is the time when employment is scarce and wages reduced. This is what capitalists call a "crisis, over-production, lack of confidence," etc., and the numerous, but untutored careless, toiling masses and their innocent wives and children suffer patiently all the torment of the private profit system, till the glutted warehouses have been emptied and "confidence" restored. After another helter-skelter season of prosperous times for the profit-takers, made possible by labour working for a bare livelihood, the same farce is repeated again. We may ask with wonderment how long will it take 90 per cent. of the people to discover that their united votes are worth more at the ballot box than the remaining 10 per cent. that represents their oppressors?

Where the Profits Go.

The Hon. Dr. Findlay recently called attention to the Registrar-General's estimate of the people's average annual earnings as per census returns for 1906, one of our best years. The average annual earnings of a man were £94 8s., and of a woman £42 3s. It is evident that these earnings have not permitted page 20 the people to purchase much more than the bare necessaries of life. Our exports (that is, the exports of a few of the people) were considerable, and fortunately for the capitalists, assisted by the Government, they were able to find a profitable foreign market for their surplus, a large percentage of which could have been used to advantage by our own people, even though they had to pay, as they do now in some instances, London prices; but our people did not have, and have not now, the wherewithal to spend in this manner. The above estimate includes the earnings of professionals, and also the highest paid managers.

The capitalist class manipulate the wealth when produced, and direct it into the channels of interest, rent and profits, leaving only a bare subsistence for a large majority of the producers. This high-handed, though legal and customary in justice, must be terminated. It is an incontrovertible fact that the toiling masses will never participate to any appreciable extent in any kind of increased production so long as any form of the private profit system continues. All the people, and not a few of the people, must own our productive industries before the workers receive their due.

Work For Public Ownership.

We must select, and then elect to Parliament, representatives pledged to work for public ownership, viz:—the acquirement of the complete public ownership of every important page 21 industry. A private enterprise Government and Parliament will not move in this matter. The employers will not sanction any proposal that will interfere with their class privileges and customary private profits, no matter how fair, reasonable or just; such considerations do not count in business, consequently there is only one course left for the people, and that is to elect a majority of our representatives to Parliament, pledged to support the idea of extending the functions of the State as indicated.

Parents and Children.

We can leave no better legacy to posterity than a liberal education, a right to steady and agreeable employment for every citizen, and the right for every worker to receive the full products of his toil, whether performed by hand or brain, or both. The widows, the orphans, the aged and the infirm must receive special care and humane treatment.

We believe in united and helpful cooperation in the interests of all, including friends and oppressors, but if we must sanction wasteful competition in some of our industries for a time, we propose to compete intelligently as a majority of the people, pledged to right, honour and "the golden rule." We believe that what is best for the whole community is also best for all the leading and individual members of the community.

page 22

A White New Zealand.

The payment of a National minimum living wage to all able adult workers, male and female, would be an effective Short cut to the permanent establishment of a White New Zealand, simply because employers would not pay a living minimum wage to inferior labour. A national minimum living wage as above would be more effective against undesirable aliens than all our huge expenditure on armaments and Dreadnoughts.

What State Competition Will Do.

Genuine, but sympathetic, State competition, when any monopolized line of production cannot be purchased satisfactorily by the State, will effectually and beyond a shadow of a doubt, regulate wages, conditions, and surplus labour for the workers, and prices and quality of goods for the consumers in every line of industry to which State competition is honestly applied. The reason is that private employers would find it necessary to follow the example and standard of excellence set by the State, by paying similar wages, by providing agreeable surroundings, by abstaining from adulteration, and by charging reasonable prices to the consumers for their products. Otherwise the workers and their trade would gradually, but surely, drift to and expand the people's State enterprises. The State factories, farms and works would no doubt be handi- page 23 capped to some extent by the inefficient surplus labour, but it is the bounden duty of the State (the people) to find steady employment, and at least a respectable maintenance wage for every citizen. The State cannot afford, under any circumstance or set of circumstances, to neglect this humane duty and responsibility. Active and honest State competition, coupled with gradual public ownership, in connection with our lands, industries and medium of exchange will go most of" the way, and as fast as the Independent-Labour Party will move, towards the final solution of our industrial, labour, monetary and other national problems.

Private Profits Must Go.

The new time is coming when all the means of production, distribution and exchange will belong co-operatively to the whole people, and private or corporate profits will be unknown. Production must eventually be for consumption, use, pleasure and convenience, and in no case for private profits. Private enterprise has fleeced the people long enough. It is unthinkable in this twentieth century that, say 90 per cent, of the people should permit 10 per cent, of the people to tax them by way of private profits. Individual and National progress depends upon the elimination of Private Profits.