Another illustration of the group principle in the business world is that a corporation is obliged by law to act in joint meeting, that is, it cannot get the vote of its members by letter and then act according to the majority.
But more important than any of the illustrations yet given is the application of the group principle to the relations of capital and labor. People are at last beginning to see that industrial organization must be based on the community idea. If we do not want to be dominated by the special interests of the capital-power, it is equally evident that we do not want to be dominated by the special interests of the labor-power. The interests of capital and labor must be united.41
Even collective bargaining is only a milestone on the way to the full application of the group principle. It recognizes the union, it recognizes that some adjustment between the interests of capital and labor is possible, but it is still “bargaining,” still an adjustment between two warring bodies, it still rests on the two pillars of concession and compromise. We see now the false psychology underlying compromise and concession. Their practical futility has long been evident: whenever any difference is “settled” by concession, that difference pops up again in some other form. Nothing will ever truly settle differences but synthesis. No wonder the syndicalists label the “compromises” made between “antagonistic interests” as insincere. In a way all compromise is insincere, and real harmony can be obtained only by an integration of “antagonistic” interests which can take place only when we understand the method. The error of the syndicalists is in thinking that compromise is the only method; their fundamental error is in thinking that different interests are necessarily “antagonistic” interests.
Compromise is accepted not only as inevitable and as entirely proper, but as the most significant fact of human association, by those economists who belong to that school of “group sociologists” which sees present society as made up of warring groups, ideal society as made up of groups in equilibrium. Not only, I believe, is conflict and compromise not the true social process, but also it is not, even at present, the most significant, although usually the largest, part of the social process. The integrating of ideas which comes partly from direct interpenetration, and partly from that indirect interpenetration which is the consequence of the overlapping membership of groups, I see going on very largely in the groups to which I belong, and is surely an interesting signpost to future methods of association.
The weakness of Arbitration and Conciliation Boards, with their “impartial” member, is that they tend to mere compromise even when they are not openly negotiations between two warring parties.42 It is probable from what we see on all sides that the more “concessions” we make, the less “peace” we shall get. Compulsory Arbitration in New Zealand has not succeeded as well as was hoped just because it has not found the community between capital and labor.
The latest development of collective bargaining, the Trade Agreement,43 with more or less permanent boards of representatives from employers and workers, brings us nearer true community than we have yet found in industrial relations. The history of these Agreements in England and America is fruitful study. One of the best known in America is Mr. Justice Brandeis’ protocol scheme in 1910 for the garment industries of New York, which provided for an industrial court composed of employers and employed to which all disagreements should be brought, and for six years this prevented strikes in the needle trades of New York.44
One of the most interesting of the Trade Agreements to be found in the Bulletins of the National Labor Department, and one which can be studied over a long term of years, is that between the Stove Founders’ National Defence Association (employers) and the Iron Moulders’ Union of North America. It is not only that the permanent organ of “conference” (employers and employees represented) has brought peace to the stove industry after forty years of disastrous strikes and lockouts, but that question after question has been decided not by the side which the market rendered strongest at the moment seizing its advantage, but by a real harmonizing of interest. A good illustration is the treatment of the question of who should pay for the bad castings: that was not decided at once as a matter of superior strength or of compromise, but after many months a basis of mutual advantage was found.
For some years Trade Agreements have been coming to include more and more points; not wages and hours alone, but many questions of shop management, discipline etc. are now included. Moreover it has been seen over and over again that the knowledge gained through joint conference is the knowledge needed for joint control: the workmen ought to know the cost of production and of transportation, the relative value of different processes of production, the state of the market, the conditions governing the production and marketing of the competing product etc.; the employer
