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this was not simply that many of them had been trained in a capitalistic system and could not leave off their bad competitive habits when they got into the army. That may, no doubt, have had its effect. But the real cause was something more fundamental and more irremovable.

They were all rightly conscious of the importance of their particular function. The professional pride which that inspired had a good deal to do, as has been said, with their efficiency, but it involved the danger of the exaltation of their own function more highly than the general interests allow. Their competition was not based on selfishness. No doubt some of them thought more than they ought about promotion or decorations, but the main motive behind their competition was a more honourable one. They were thinking not of themselves, but of their job. One of the most troublesome and extravagant employers from a labour point of view with whom I had to deal was a singleminded enthusiast with a conviction that “ light railways would win the war.” The employer quite naturally felt that his business was to do his best for his job, and it was other people's business to do their best for theirs, a state of mind which within limits is entirely creditable and to be encouraged, but which, when the ordinary check of cost was removed, had disastrous results.

The Labour Directorate, working under the instructions of the general staff, was entrusted with the task of co-ordinating the demands for labour and apportioning the available labour as the tactical situation demanded. Its functions appeared to be simple. The Deputy Assistant Director of Labour at a Corps Headquarters, for example, received demands for labour from the various services working in the Corps area. When these demands could not be met from the labour at his command, as they never could, he went to the Corps Commander or one of his staff. The Corps Commander from his knowledge of the needs of the tactical situation assigned to the demands an order of priority. The D.A.D.L. then met the demands in the order thus fixed as far as his labour would go.

So long, however, as the demands themselves were not criticised, but only given an order in which they were to be satisfied, this plan, if carried out consistently, meant that the service that was given priority was given all the labour that it asked for, whether or not it asked for more labour than it needed. This meant that some of the men allotted to it were contributing very little to a work of primary importance when they might have been contributing a great deal to a work of secondary importance. Whatever the relative importance of the different things to be done, there was clearly a point where it was not profitable to give additional men to the more important service rather than some men to the less important service. In economic language, the principle of marginal utility came into play.

The difficulty was that there was no satisfactory means of discovering the marginal utility of labour. The only person who was really in a position to say how much labour was wanted, or rather with how few men the necessary work could be done, was under no pressure to make the calculation. He had not the spur of having to pay for his labour to make him careful to confine what he asked for to what he really needed. The staff could estimate the relative importance of the works which the various employers had contracted to do; they had no satisfactory means in the absence of price of estimating the intensity of demand. In practice the only thing that the officer of the Labour Directorate could do was to form a rough-and-ready estimate of the genuineness of an employer's demand, taking into account his estimate of the honesty of the employer, and cut down the labour supplied accordingly. To the employer's contention that he was an expert and knew, as no one else could do, how many men were wanted, the officer of the Labour Directorate could only reply that the technical officer was no doubt an expert but he was also a liar, or words to that effect. In practice the system worked because it was in the interest of the employer to establish a reputation for being economical in his demands, because he found that if he got that reputation, his demands for labour were met promptly and in full. But there was inevitably a good deal of friction and cross swearing. No doubt under less varying and abnormal conditions the average labour cost of different tasks could have been ascertained and used as a standard, but that would only have meant levelling up the bad to the good employer. The Labour Directorate were able in time to have a fairly clear idea of what the standard of the careful employer was, and used that knowledge to level up. But because the standard of the careful employer was not formed under the pressure of having to pay for labour, because the employer's primary business was not to save labour, but to get his job done, the cost being not his business but the army's, the standard was never a high one. Labour-saving devices were almost all introduced as the result of the pressure of the Labour Directorate, i. e. by the outsider who was not really in such

a good position as the employer if he had had the will to do so.

A partial solution of these difficulties was provided by the contracting system described already. For there the employer merely stated what he wanted done. The position then was that the staff determined what results were wanted, the technical expert reduced these results to specifications of so much cubic feet of earth lifted, so many yards of railway track with so much ballast laid, and so on, and the labour company whose special business was to be experts in knowing how much labour was wanted for particular jobs, and whose professional interest was to supply as many demands as possible and thus to save labour, detailed the men required. The solution was only partial, because this separation of functions was not always possible and the system of contracting not universally applicable.

The moral of this experience is the extreme difficulty of separating the technical work of production from the task of co-ordinating various forms of production to a common purpose. The employer in estimating the means necessary to carrying out his particular task is acting as an expert. But if the necessary means are to be supplied by someone else, the employer's estimate of his needs affects the work of co-ordination. The more he has of someone else's work, the less there is for other employers. He is encroaching on the work of co-ordination, for which he feels no special responsibility. If he has not to pay for the services of others, he has a strong temptation to think only of the efficiency of his own work and make irresponsible demands. The co-ordinating authority, on the other hand, cannot do its work of co-ordination without knowledge of the producer's real needs. Where the employer has to pay for services, the price he is prepared to pay is for him an expert question, but at the same time it affords a guarantee to the co-ordinating authority that the demands made by the employer are real demands. But if the machinery of buying and selling is abolished, the check disappears and the co-ordinating authority is set a hopeless task. Earlier economic theory held that in civil life the importance of the various services rendered by individuals or groups might be left entirely to the play of supply and demand. We have come to recognise that effective economic demand does not always mean socially useful demand, and the State now supplements the play of the market by encouraging certain forms of production and discouraging others, by endowing education and research, for example, and by heavy taxation of the liquor

No. 133.—VOL. XXXIV.

traffic. It is sometimes held that this conscious co-ordination might entirely supersede the unconscious co-ordination of economic forces. The army presented a peculiar field for such conscious expert co-ordination. It would have been madness to allow the direction of production to have been determined by economic forces. But army experience shows that the complete supersession of economic relations has unexpected and alarming results. The working of supply and demand may have disadvantages, but they are nothing to the disadvantages of wangling.

If an attempt is made to sum up the application of this army experiment as a whole to the problems of industrial reorganisation at home, it will be obvious that the lessons it suggests seem to conflict. I can imagine that Mr. Cole and the Guild Socialists would claim that the first part confirms their teaching : that the contracting labour company is the guild; that the development from the first methods of working to the principle of contracting is the development from national to guild socialism; and such a claim would not be without justification. But I do not think they would find much comfort in the account of the effect of the system on the employers. On the other hand, the upholders of things as they are may find confirmation of their belief in " the impossibilities of socialism" in the second part. Again with some justification. I venture to suggest that the real lesson of the army experience is contained just in this conflict, in the contrast noted already between the psychology of the entrepreneur and of the workman. Neither can be eliminated and a sound industrial theory must do justice to both.



THE following figures are based on an old farming account book dated 1769–1779, and they seem to throw some interesting light upon the life and conditions of the smaller sub-tenants to whom portions of the farm were let.

The Davoch of Dunachton, which now forms the two farms of Dunachton More and Kincraig, was situated in Badenoch, the district covering the upper reaches of the Spey. The soil is exceptionally good, and, owing to the slope on which the fields lie, the introduction of deep drainage has probably made less difference in making the better land available for cultivation than in most parts of the country.

We have the following contemporary account of Dunachton by the proprietor : “ On a farm rented from me by McIntosh of Balnespick for £86 13s. 4d. str., 240 people are supported, of which 60 are able to carry arms” (Notes Descriptive and Historical, principally relating to the Parish of Moy in Strathdearn, by Sir Eneas Mackintosh of Mackintosh, Bart., written between 1774-1783 and privately published by the present Mackintosh of Mackintosh in 1892. See p. 37.) A davoch of land usually contained about 416 acres of arable (see Cosmo Innes, Scotch Legal Antiquities, pp. 271 and 241), the subdivisions being2 oxgates of 13 acres each = 1 husbandland, 4 husbandlands = 1 ploughgate, 4 ploughgates 1 davoch. The ploughgate was said to be the commonest unit for a farm held jointly by small tenants, but in Badenoch, where farms were usually let to a principal tenant or tacksman, they seem to have generally consisted of two ploughgates each (see Gordon Rent Roll for 1600, published in Vol. IV of the new Spalding Club Miscellany). The oxgates were each supposed to furnish an ox for the common plough, and the ploughgate was supposed to be the extent that could be ploughed in a season. The old joint tenants were therefore successful co-operators, and the subdivision of their shares of land was more scientific than is the case with many of our presentday small-holdings with their partially employed horses and

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