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George H. Webb, Commissioner of Labor of
Rhode Island, begins his report on Welfare Work by assuring the
manufacturers that it is profitable. He says: "Mankind, at least that
portion of it that has to do with horseflesh, discovered ages ago that a
horse does the best service when it is well fed, well stabled, and well
groomed. The same principle applies to the other brands of farm stock.
They one and all yield the best results when their health and comforts
are best looked after. It is strange, though these truths have been a
matter of general knowledge for centuries, that it is only quite
recently that it has been discovered that the same rule is applicable to
the human race. We are just beginning to learn that the employer who
gives steady employment, pays fair wages, and pays close attention to
the physical health and comfort of his employees gets the best results
from their labor."[47]

Mr. George W. Perkins, recently retired from the firm of J. P. Morgan
and Company, who has managed the introduction of pensions, profit
sharing, and other investments in labor for the International Harvester
Company, has also expressed the view that these measures were profitable
"from a pecuniary standpoint." A good illustration is the calculation of
the Dayton Cash Register Company, which has led in this "welfare work,"
that "the luncheons given each girl costs three cents, and that the
woman does five cents more of work each day." Some such calculation will
apply to the whole colossal system of governmental labor reforms now
favored so widely by far-sighted employers.[48]

In order that the private policy of the more enlightened of the large
corporations should become the policy of governments, which employers as
a class know they can control, only two conditions need to be filled.
Since all employers must to some degree share the burdens of the new
taxes needed for such governmental investments in the improvement of
labor, there must be some assurance, first, that all capitalists shall
share in the opportunity to employ this more efficient and more
profitable labor; and second, that the supply of cheap labor, which has
cost almost nothing to produce, is either exhausted or, on account of
its inefficiency, is less adapted to the new industry than it was to the
old. The impending reorganization of governments to protect the smaller
capitalists from the large (through better control over the banks,
railroads, trusts, tariffs, and natural resources) will furnish the
first condition, the natural exhaustion or artificial restriction of
immigration now imminent together with the introduction of "scientific
management," the second. From a purely business standpoint the greatest
asset of the capitalists' government, its chief natural resource, the
most fruitful field for conservation, and the most profitable place for
the investment of capital will then undoubtedly be in the labor supply.

In presenting the British Budget of 1910 to Parliament, Mr. Lloyd George
argued that the higher incomes and fortunes ought to bear a greater than
proportionate share of the taxes, because present governmental
expenditures were largely on their behalf, and because the new labor
reforms were equally to their benefit.

"What is it," he said, "that enabled the fortunate possessors of
these incomes and these fortunes to amass the wealth they enjoy or
bequeath? The security insured for property by the agency of the
State, the guaranteed immunity from the risks and destruction of
war, insured by our natural advantages and our defensive forces.
This is an essential element even now in the credit of the country;
and, in the past, it means that we were accumulating great wealth
in this land, when the industrial enterprises of less fortunately
situated countries were not merely at a standstill, but their
resources were being ravaged and destroyed by the havoc of war.

"What, further, is accountable for this growth of wealth? The
spread of intelligence amongst the masses of the people, the
improvements in sanitation and in the general condition of the
people. These have all contributed towards the efficiency of the
people, _even as wealth-producing machines_. Take, for instance,
such legislation as the Educational Acts and the Public Health
Acts; they have cost much money, but they have made infinitely
more. That is true of all legislation which improves the conditions
of life for the people. An educated, well-fed, well-clothed,
well-housed people _invariably leads to the growth of a numerous
well-to-do class_. If _property_ were to grudge a substantial
contribution towards proposals which insure the security which is
one of the essential conditions of its existence or toward keeping
from poverty and privation the old people whose lives of industry
and toil have either created that wealth or made it productive,
then _property_ would be not only shabby, but shortsighted."
(Italics mine.)[49]

The property interests should be far-sighted enough to support the
present economic and labor reforms, not because there is any fear in
Great Britain either from a revolutionary Socialist movement or from an
organized political or labor union upheaval, for Mr. Lloyd George
ridicules both these bogeys, but because such reforms _contribute
towards the efficiency of the people, even as wealth-producing
machines_--and increase the incomes of the wealthy and the well-to-do.

Mr. Lloyd George continued:--

"We have, more especially during the last 60 years, in this country
accumulated wealth to an extent which is almost unparalleled in the
history of the world, but we have done it at _an appalling waste of
human material_. We have drawn upon the robust vitality of the
rural areas of Great Britain, and especially Ireland, and spent its
energies recklessly in the devitalizing atmosphere of urban
factories and workshops as if the supply were inexhaustible. We are
now beginning to realize that we have been spending _our capital_,
at a disastrous rate, and it is time we should take a real,
concerted, national effort to replenish it. I put forward this
proposal, not a very extravagant one, _as a beginning_." (My

In order to do away with the economic waste of profitable "human
material" and the still more serious exhaustion of the supply, the
propertyless wage earner or salaried man for the first time obtains a
definite status in the official political economy; he becomes the
property of the nation viewed "as a business firm," a part of "our"
capital. His position was much like a peasant or a laborer during the
formation of the feudal system. To obtain any status at all, to become
half free he had to become somebody's "man." Now he is the "man," the
industrial asset, of the government. This paternal attitude towards the
individual, however, is not at all similar to the paternalist attitude
towards capital. While the individual capitalist often does not object
to having his capital reckoned as a part of the resources of a
government which capitalists as a class control,--roughly speaking in
proportion to their wealth,--we can picture his protests if either _his_
personal activity or ability or _his_ private income were similarly
viewed as dependent for their free use and development on the benevolent
patronage of the State. However, for the _workers_ to become an asset of
the State, even while the latter is still viewed primarily as a
commercial institution and remains in the hands of the business class,
is undoubtedly a revolutionary advance.

Mr. Winston Churchill also gives, as the basis for the whole program,
the need of putting an end to that "waste of earning power" and of "the
stamina, the virtue, safety, and honor of the British race," that is due
to existing poverty and economic maladjustment.[51] Mr. John A. Hobson,
a prominent economist and radical, shows that the purpose of the "New
Liberalism" is the full development of "the productive resources of our
land and labor,"[52] and denies that this broad purpose has anything to
do with Socialist collectivism.

Professor Simon Patten of the University of Pennsylvania writes very
truly about the proposed labor reforms, that "they can cause poverty to
disappear and can give a secure income to every family," without
requiring any sacrifice on the part of the possessing classes. No one
has shown more clearly or in fewer words how intimately connected are
the advance of the worker and the further increase of profits. "Social
improvement," Professor Patten says, "takes him [the workman] from
places where poverty and diseases oppress, and introduce him to the full
advantage of a better position.... It gives to the city workman the air,
light, and water that the country workman has, but without his
inefficiency and isolation. It gives more working years and more working
days in each year, with more zeal and vitality in each working day;
health makes work pleasant, and pleasant work becomes efficiency when
the environment stimulates men's powers to the full.... The unskilled
workman must be transformed into an efficient citizen; children must be
kept from work, and women must have shorter hours and better

Professor Patten has even drawn up a complete scientific program of
social reforms which lead _necessarily_ to the economic advantage of
_all_ elements in a community without any decrease of the existing
inequalities of wealth. "The incomes and personal efforts of those
favorably situated," says Professor Patten, "can reduce the evils of
poverty without the destruction of that _upon which their wealth and the
progress of society depend_." (Italics mine.)

The reform program begins with childhood and extends over every period
of the worker's life. Ex-President Eliot of Harvard and President Hadley
of Yale and other leading educators propose that its principles be
applied to the nation's children.

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Keywords: efficiency, beginning, company, capitalists, control, working, viewed, better, business, italics
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