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Social Aspects of Industrial Problems. By GERTRUDE WILLIAMS,
B.A. (London: P. S. King & Son, 1923. Pp. xii + 260.
This is a well-written book which will be useful to many students and teachers, as bringing together within one binding much that is scattered over rather a wide field. It does not offer anything very new, nor is its title a fair guide to what it contains; for, except perhaps in the first chapter, Mrs. Williams confines herself to a descriptive statement of some of the chief industrial problems of the day, with an analysis of their probable causes and of any measures that are or might be taken to deal with them. There is not, however, any special reference to the “social aspects” of these problems.
Mrs. Williams gives us at the outset as good a statement as perhaps any that has yet been written of the chief limitations to the doctrine that the equilibrium of individual demand and supply is the point of maximum social satisfaction. She then proceeds to sketch the principal features of the modern organisation of industry, describing the rise of the Joint-stock Company and the Trust movement under the head of Capital. To Labour she devotes more space, giving an excellent survey of the more important changes in the Trade Union world which have occurred in the last few years, and describing the circumstances that led up to the Whitley Reports, the Councils which have resulted from these, and joint organisations of employers and employed generally.
A chapter on unemployment (which contains a great deal of matter ranging from the provisions of the Unemployment Insurance Acts to Mr. J. A. Hobson's views on under-consumption, for which, incidentally, Mrs. Williams has an heretical affection) is followed by one on Women in Industry, which grapples admirably with problems of equal pay for equal work, and family endowment and the like. The book ends with a chapter on Government and Industry which attempts the impossible and had better have been omitted.
There are a few minor blemishes on an otherwise meritorious volume. On p. 44 it is unwise to suggest that the pace of the combination movement will not slacken “even though the special circumstances of the war no longer exist,” when in point of fact it has slackened. On p. 51 the name of the Imperial Tobacco Company is wrongly stated, and the date of the Royal Commission on Labour given on p. 77 is also incorrect. The Match industry's unemployment insurance scheme referred to on p. 122 is a supplementary, not a special, scheme under the Act of 1920, and is therefore not held up by the suspension of special schemes. On p. 107 “the Strike Committee" is referred to as though we knew all about it, whereas no strike has yet been mentioned; and on p. 121 some industries are described as belonging to group (6) when nothing labelled (a) or (6) has preceded.
I do not know whether Mrs. Williams thinks her book impartial; but I am sure that those who do not share her point of view will not scruple to call it biassed.
Trade, Tariffs, and Transport in India. By K. T. SHAH.
(London : P. S. King and Son, Ltd., 1923. Pp. 450.)
The author is Professor of Economics in the University of Bombay. An earlier work of his on Fifty Years of Indian Finance was reviewed in a recent number of the JOURNAL.
Mr. Shah's political opinions are only important here in so far as they affect his views on economic questions. He is a strong Nationalist, though too well instructed to profess any belief in Mr. Ghandi's “Back to the Handloom ” policy. He regards the existing Government as alien and unsympathetic, and the ally of the British manufacturers in exploiting a helpless dependency. In discussing his scheme to replace private enterprise by State industries he holds the main difficulty to be “the unavoidable suspicion which hangs upon a foreign Government with the antecedents of the Government of India," and the reluctance of the people to commit fresh responsibilities to “a proved traitor" (p. 193). In his evidence before the Mercantile Marine Commission he took up the same point, and expressed his own distrust of the British Administration “as regards the personnel, the motives, and the qualifications ” (p. 434).
In Economics Mr. Shah is an advanced Socialist, who desires at the earliest possible moment to put an end to Capitalism, which he abhors. As a half-way house he would accept co-operative production, though he admits that “the history of such attempts in countries more advanced than our own makes very distressing reading to the co-operative enthusiast." But his real aim is collectivism, and he seems to believe that the advent of a purely Indian Government will produce all the conditions necessary to ensure its success. The ideal to be aimed at is a self-contained
India, fed, warmed, clad, and carried by the products of its own soil, and using up in its own State workshops and factories all the raw materials required. For moral reasons he is not anxious that India should attempt to sell largely in foreign markets. Foreign trade in his view is, as now conducted, the seed-bed of international strife. Ultimately, when all the backward countries have developed their own industries, such international exchange as continues to be really beneficial will be conducted by State agency under international agreements.
In support of his plea for State industries Mr. Shah adduces the fact that the Indian Government already conducts big industrial enterprises, such as the post office and to a large extent the railways. Railways and posts are public services in which the operations required can be in a great measure standardised. An honest bureaucracy can run them with success, and Mr. Shah can legitimately appeal to the experience of some European countries. But he never really faces the difficulties that beset State productive enterprises generally. He is not himself an admirer of the Indian railway administration, which he condemns as extravagant and careless as regards the development of Indian industries. In this connection he contrasts the failure of a Government “gravely interested in the financial success of the railways and so unable to adopt a (proper) railway rate-making policy," with the achievements in the same line “ of a railway genius like the late Mr. Vanderbilt, who liquidated and reorganised the New York Central railroad into one of the richest and busiest lines of the world, if not quite the cheapest.” Apparently all that is required is to substitute Indian for English agency to produce the organising ability, honesty, and enterprise needed to make State management of railways in India a great success. The Bombay Government and Municipality have recently embarked on a vast land reclamation and housing scheme, the latter being intended to supply mill hands with decent homes. But they have failed to produce sanitary houses that can be let at an economic rent, and this “is due partly to the department, which has yet to learn the lesson of rendering public service absolutely free from any search for private gain.”
Foreign capital to a large amount is invested in India. Englishmen and Scotchmen own nearly all the mines and jute-mills, and conduct most of the banking business. Mr. Shah proposes to get rid of the foreign capitalist entirely, and to substitute Indian for British capital except in so far as it may still be necessary to borrow money from English investors. The latter is a legitimate ambition, but the possibility of raising in India at all rapidly two-thirds of the 600 crores which the author considers to be required for the full development of Indian industries, not to speak of another 400 crores wanted for agriculture, is doubtful. In pursuit of his aim Mr. Shah seems to be ready to do more than attract capital. In a table on p. 190 he shows how 360 crores could be obtained. Of the total, 200 crores are to consist of " a portion of capital locked up with religious bodies and charitable endowments," and only 50 crores of increased bank deposits. One sympathises with the author's regret that so much capital should be locked up uselessly in the shape of jewels, etc., in Indian temples. But we are not told how the figure of 200 crores is arrived at, or how the custodians are to be induced to part with that large sum. It is also suggested that the capital available with Indian princes might be “ requisitioned.”
Protective tariffs are one weapon which Mr. Shah would use to promote the carrying out of his extensive programme for industrial development in India and the replacement of private enterprise by State production. The case for protection in India, and the limits within which it seems likely to be of use, were considered in a review of Professor Banerjea's work on the subject which appeared in a recent number of the JOURNAL, and it is useless to go over the same ground again. But it may be well to notice some of the specific proposals which Mr. Shah has embodied in a draft Bill. It may be said in passing that he regards the report of the Fiscal Commission with great contempt.
The Bill provides that, in the case of new industries necessary for national security or development, the State shall forthwith undertake them, or, if debarred from doing so for financial reasons, shall subsidise private enterprise for the purpose. A remission of half the import duty is allowed in the case of co-operative or collectivist production. Subsidies are only to be granted to Indian business concerns. No private enterprise connected with the exploitation of mineral resources is to be permitted unless three-fourths of its capital is Indian and its directors and managers are of native birth. No share in a company is to be transferred to a non-Indian without the written permission of the Tariff Board. A rebate of 10 per cent. is allowed in the case of goods carried in Indian-owned ships, to be increased to 20 per cent, if the ships were Indian built. It is part of Mr. Shah's plan that the Indian Government should own the ships, and that it should embark on a large shipbuilding programme. It is not very clear how in a country where shipbuilding is practically non-existent it can expect to succeed where the United States have failed.
Owing to financial exigencies Customs duties have lately been pitched at rates which, considered as revenue taxes, are extraordinarily high. Mr. Shah proposes to raise the duty on sugar from 25 to 35 per cent., and to double those on oils. He would increase those on iron and steel from 10 to 20 per cent. The present import duty on cotton piece goods is 11 per cent., and there is an excise duty of 31 per cent. It is proposed to abolish the latter, and to substitute for the former rates beginning at 5 per cent. for cloth made of yarn of ten counts and under, and gradually rising to 35, 40, and 50 per cent. for the higher counts. Obviously this scale is specially calculated to injure the English trade. The cases of sugar and oil were discussed in the review of Professor Banerjea's work. The increase of the duty on steel will only help the Tata Company, which is claiming a rise of 33} per cent. Of its output 60 per cent. consists of steel rails, and under a contract which has still several years to run the whole of them are taken for the Indian railways. It is the only firm that produces steel in India, and for its sake all the firms in that country which use steel in construction work will be injured and the cost of the railways will be increased. As to the proposed cotton duties, Mr. Shah confirms what was stated in the former review as to the enormous profits earned by the Bombay mill-owners. He adds that “they have been criminally indifferent to improving the quality of the goods by proper attention to the raw material consumed and the machinery employed,” and further that they failed to utilise the enormous protection given by the War to drive foreign goods out of the market, but were led “ by capitalist greed and shortsightedness” to raise prices “ so as to keep neck to neck with the foreign goods.” Mr. Shah fails to explain how these grave defects will be cured by excluding foreign competition.
The book is far longer than was necessary for a full statement of the author's case. Thirty-seven pages are occupied by the schedule to the proposed Tariff Act. All the reader can desire to know is how Mr. Shah would deal with the leading articles of import and export. He cannot possibly care for a list of some eighty descriptions of manufactured steel and iron all to be taxed alike, or to know the treatment proposed for four different sorts of cowrie-shells.
The work is perhaps more interesting as a frank revelation of the tone of mind prevailing at present among many educated Indians than as an economic inquiry. Mr. Shah accepts the