Preface To The American Edition

The theory and policy of Guild Socialism, or National Guilds, have been developed over a period of years, and primarily with a view to British industrial conditions. The widespread interest which they have aroused in the United States of America shows, however, that, while there is much in the American conditions that is different, there are nevertheless, broadly speaking, similar social diseases calling for similar remedies. It is not for an Englishman to prescribe to the citizens of other countries the medicine for their social ills: he has amply enough on hand in seeking to act as a physician — one among many — to his own countrymen, threatened as they seem to be by the alternatives of a sudden breaking up or of a gradual breaking down of the mechanism of British industry. This is, indeed, too pessimistic a statement to express the real facts of the industrial situation in Great Britain at the present time; for there are forces of creation as well as forces of destruction at work. But at best it will be a hard-run race between these forces, and the prospects of a victory for the creative forces have not grown brighter of late.

In the United States of America, although a similar contest is proceeding, it has neither reached the same phase nor passed through the same stages. British industry today is vastly more concentrated and trustified than American industry, and the very smallness of Great Britain has led, among employers and workers, to a much closer organization and a much greater uniformity of method and policy. New schemes and policies tend to arise in Great Britain nationally, and experiments to be made on a national scale—facts which make theorizing perhaps easier, but practical tests more difficult than in America. All these considerations, and many others like them and behind them, mean that, even if Guild Socialism has a message for the citizens of the United States, it is likely to assume among them a form different in many respects from that which it has taken on in Great Britain.

I have made, and can make, no attempt to indicate what this different form should be. That can only be determined by the American people themselves. Already, in the books of Mr. Ordway Tead and others, there are signs of the emergence of ideas closely akin to those of the Guild Socialists of Great Britain. The significance of the “Plumb Plan” of the American railway men is discussed elsewhere in this book; and, only during the last few months, the new Farmer Labor Party has adopted a plank in its platform which indicates at the least a tendency towards the conception of industry in terms of democracy which has been the basis of the Guild movement. It is difficult for me to estimate the real significance of these and similar movements and tendencies in the world of American industry; but I have the thought that, after all, there is nothing peculiarly British about the fundamental ideas which underlie the Guild movement. The form which it has assumed — its actual clothing of institutions and programs — is mainly British; but the ideas behind it, if they are valid at all, are in the main universal, and are capable of giving rise to many diverse systems based on different material and psychological conditions.

For example, if the theory of representative democracy which is set forth in this book is true at all, it cannot be true for one country only. The social structure requisite for democracy will differ from place to place, as the functions of government and administration, the character of the Society, the occupations of the people, and the national temperaments and traditions vary from place to place. Nevertheless, forma manet; and, in the hope that there is something of value for the citizens of the American Commonwealth I offer this book for the consideration of the American public.

G. D. H. Cole

London, England, October 1920.

Chapter I   The Demand For Freedom

For any just appreciation of the social forces at work in the world today, there is no fact more essential to grasp than the broadening and deepening demand of the organized workers for the “control of industry.” This demand is made, not in one country or in one form alone, but in nearly every country in which the industrial system is strongly established, and in as many forms as there are different national temperaments and traditions. Nor is the demand new; for it has appeared, at least occasionally, throughout the history of the Labor Movement, in the “Owenite” Trade Unionism of the 1830’s in Great Britain, among anarchists and communists on the Continent of Europe, and among the early revolutionaries and reformers of the United States. But its character at the present time differs from any that it has possessed before, not only because it is more universal and has struck far deeper roots, but because it is now based firmly on the positive achievements of working-class organization, and is no longer purely Utopian, but constructive and practical.  

This book on Guild Socialism is an attempt to explain the real character of this demand, particularly as it appears amongst the English-speaking peoples, and at the same time to present the central ideas of Guild Socialism as above all an attempt to give theoretical and practical expression to the aspirations on which the demand is based. It is written in the belief that, until we devise and create forms of social organization within which these aspirations can find reasonable satisfaction, there is neither hope of any “reconstruction” which will make our industrial system efficient nor prospect of health in the body social as a whole. Although, therefore, the way of approach and the main subject-matter of this book are industrial, its implications and conclusions will be found to extend over a considerably wider field than that of industry, and indeed to involve a theory of democratic representative government as a whole and constructive proposals governing the general lines of political as well as industrial reconstruction.

The Guild Socialist theory, while like all other social theories it makes certain fundamental assumptions concerning the objects of human association and men’s life in Society, arises essentially out of the actual historical situation in which we are placed at the present time. The Guild Socialist believes what he believes, not so much as the result of a process of abstract reasoning, as because, if his fundamental assumptions are granted, the Guild Socialist solution of the social problem seems to him to spring simply and naturally out of the form in which that problem presents itself today. He claims, not to be imagining a Utopia in the clouds, but to be giving form and direction to certain quite definite tendencies which are now at work in Society, and to be anticipating the most natural developments of already existing institutions and social forces. He does not mind being called a “visionary”, for he is quite convinced that his visions are eminently practical.

The best way, then, of understanding the Guild Socialist attitude is to see, first, what are the fundamental assumptions about Society which the Guildsman makes; secondly, how he visualizes the situation with which the industrialized communities of Europe, America and Australasia are at present confronted; and thirdly, what are the forces and institutions in whose development he believes that the solution of the problem principally lies. A correct appreciation of these points will clear the way for a constructive exposition of Guild Socialist proposals.

Guildsmen assume that the essential social values are human values, and that Society is to be regarded as a complex of associations held together by the wills of their members, whose well-being is its purpose. They assume further that it is not enough that the forms of government should have the passive or “implied” consent of the governed, but that the Society will be in health only if it is in the full sense democratic and self-governing, which implies not only that all the citizens should have a “right” to influence its policy if they so desire, but that the greatest possible opportunity should be afforded for every citizen actually to exercise this right. In other words, the Guild Socialist conception of democracy, which it assumes to be good, involves an active and not merely a passive citizenship on the part of the members. Moreover, and this is perhaps the most vital and significant assumption of all, it regards this democratic principle as applying not only or mainly to some special sphere of social action known as “politics”, but to any and every form of social action, and, in especial, to industrial and economic fully as much as to political affairs.

In calling these the fundamental assumptions of Guild Socialism, I do not mean to imply that they are altogether beyond the province of argument. They can indeed be sustained by arguments of obvious force; for it seems clear enough that only a community which is self-governing in this complete sense, over the whole length and breadth of its activities, can hope to call out what is best in its members, or to give them that maximum opportunity for personal and social self-expression which is requisite to real freedom. But such arguments as this, by which the assumptions stated above may be sustained and reinforced, really depend for their appeal upon the same considerations, and are, in the last resort, different ways of stating the same fundamental position. The essence of the Guild Socialist attitude lies in the belief that Society ought to be so organized as to afford the greatest possible opportunity for individual and collective self-expression to all its members, and that this involves and implies the extension of positive self-government through all its parts.

No one can reasonably maintain that Society is organized on such a principle today. We do, indeed, possess in theory a very large measure of democracy; but there are at least three sufficient reasons which make this theoretical democracy largely inoperative in practice. In the first place, even the theory of democracy today is still largely of the “consciousness of consent” type. It assigns to the ordinary citizen little more than a privilege — which is in practice mainly illusory—of choosing his rulers, and does not call upon him, or assign to him the opportunity, himself to rule. Present-day practice has, indeed, pushed the theory of representative government to the length of substituting almost completely, even in theory, the representative for the represented. This is the essential meaning of the doctrine of the “sovereignty of Parliament.” Secondly, such democracy as is recognized is conceived in a narrowly “political” sense, as applying to a quite peculiar sphere known as politics, and not in a broader and more comprehensive sense, as applying to all the acts which men do in association or conjunction. The result is that theoretical “democrats” totally ignore the effects of undemocratic organization and convention in non-political spheres of social action, not only upon the lives which men lead in those spheres, but also in perverting and annihilating in practice the theoretical democracy of modern politics. They ignore the fact that vast inequalities of wealth and status, resulting in vast inequalities of education, power and control of environment, are necessarily fatal to any real democracy, whether in politics or in any other sphere. Thirdly, the theory of representative government is distorted not only by the substitution of the representative for the represented, but also as a consequence of the extended activity of political government falsifying the operation of the representative method. As long as the purposes of political government are comparatively few and limited, and the vast mass of social activities is either not regulated, or regulated by other means, such as the Mediaeval Gilds, it is perhaps possible for a body of men to choose one to represent them in relation to all the purposes with which a representative political body has to deal (thus, government in Great Britain for some time after 1689 was a fairly adequate representation of the aristocracy, whom alone it set out to represent). But, as the purposes covered by political government expand, and more and more of social life is brought under political regulation, the representation which may once, within its limitations, have been real, turns into misrepresentation, and the person elected for an indefinitely large number of disparate purposes ceases to have any real representative relation to those who elect him.

It appears to the Guild Socialists, as to all real Socialists, obviously futile to expect true democracy to exist in any Society which recognizes vast inequalities of wealth, status and power among its members. Most obvious of all is it that if, in the sphere of industry, one man is a master and the other a wage-slave, one enjoys riches and gives commands and the other has only an insecure subsistence and obeys orders, no amount of purely electoral machinery on a basis of “one man one vote” will make the two really equal socially or politically. For the economic power of the rich master, or of the richer financier who is above even the master, will ring round the wage-slave’s electoral rights at every point. A press which can only be conducted with the support of rich capitalists and advertisers, an expensive machinery of elections, a régime in the school which differs for rich and poor and affords a training for power in the one case and for subjection in the other, a régime in industry which carries on the divergent lessons of the schools—these and a hundred other influences combine to make the real political power of one rich man infinitely greater than that of one who is poor. It is a natural and legitimate conclusion that, if we want democracy, that is, if we want every man’s voice to count for as much as it is intrinsically worth, irrespective of any extraneous consideration, we must abolish class distinctions by doing away with the huge inequalities of wealth and economic power on which they really depend.

We are faced by the fact that, owing to the preponderant influence of economic factors, the present machinery of Society expresses the point of view of the social class which still continues to control its economic life. But at the same time it is clear that the power of this class is more and more challenged by its rival—the working class—acting upon it through the organizations which are becoming more and more fully representative of all its groups and sections. The principle social phenomenon of our times is the rise of working-class organization, first and foremost in its Trade Union form, but also in the Cooperative Movement and in other less important aspects. This working-class organization already represents a very great social power; but it is a power unrecognized in the constitution. It may be said that it is no more extra-constitutional than the even greater power of the huge capitalist trusts and combines of which the Federation of British Industries has assumed the leadership; but the extra-constitutionality of capitalist organizations hardly arises as a practical question because they represent the same class as now holds social and economic authority in the community and political authority in the State. The workers, on the other hand, as the dispossessed class both economically and politically, have to employ their industrial organization as almost the sole means at their disposal for making their will felt, whatever the question at issue may be. As they acquire a greater sense of their industrial strength, they seek to turn it to more ambitious uses, and attempt to employ it as an instrument of communal government. This is essentially the meaning of “Direct Action.”

The form of economic organization which “Direct Action” challenges, regarded from the upper end, is called “Capitalism”. Regarded from the lower end the same system is properly called “Wage-Slavery.” It is so called because it imposes, on the mass of those who work under it, a quasi-servile status, and because it does this by means of the wage system. The institution of wages is one by which the employer or company is enabled to buy labor, in the quantities in which it is required as the raw material of profit, at a market price not essentially differing from the market price for ordinary commodities. Labor may be bought cheap or dear, according to market conditions, or, if there is no profit to be made out of it, it need not be bought at all. When the workman’s labor is bought, he receives a wage: when it is not bought, he receives no wages. In the latter circumstances, the correct capitalist procedure used to be either to leave him to starve or to force him into the workhouse under the deterrent conditions of the “New Poor Law”; but, this proving neither humane nor economical, the small provision which the better paid workers succeeded in making for themselves through their Trade Unions has in recent years been supplemented by State and employers’ contributions in certain trades, and the workman has further been subjected to compulsory deductions from his wages to provide against periods of unemployment. These doles, however, do not affect the fundamental fact that, under the theory of Capitalism, the laborer has no rights in industry. He sells to the capitalist, for what he can get, as much of his labor-power as he can, and the whole of his claim upon what he produces is supposed to be liquidated by the payment of a wage. The whole value of his product, over and above his wages, is absorbed by others in the forms of rent, interest and profits.

This is, of course, a very inadequate summary; but it will suffice for our present purpose, which is only that of showing the breaches in the system which are already being made by the onslaughts of the growingly powerful working-class organizations.  These achieve their results by rescuing the worker from isolation, and substituting for individual competitive sale by each worker of his labor-power rudimentary forms of collective bargaining, through which the Trade Unions prescribe, for all their members, minimum conditions under which the sale of labor-power is to take place. These conditions, as the power of the Unions grows, increase in number and stringency, and come to represent more and more actual interference by the workers with the way in which the industry is run.

The Trade Union, however, in all the regulations which it lays down, still always remains a body external to the actual conduct of industry. It cannot give actual orders as to the way in which factories are to be run: it can, broadly speaking, only impose prohibitions. This leads necessarily to the result that its action is to a great extent negative and restrictive, and thus operates in the same way as an externally imposed State law regulating industry, and possesses the same disadvantages. The further this external system of prohibitions is pushed, the greater difficulties it creates for the existing system. The employer complains, often with some justice, that he can no longer run his factory in his own way; but the Union on its side can only protect its members by hampering him, and has no positive power to run the factory in his stead. Smooth working is sometimes established in practice by a method of mutual give and take; but the whole system is essentially one of unstable equilibrium, and it seems clear, at any rate to the Guild Socialists, that there are only two possible alternatives. Either the power of the Unions to impose restrictions must be broken; or it must be transformed from a negative into a positive power, and, instead of having only the brake in their hands, the Trade Unions must assume control of the steering-wheel.

This statement, purely in terms of contending economic powers, of the deadlock at which the present industrial system is arriving is essentially incomplete; for behind these powers are the wills that wield them. The deadlock exists, not simply or mainly because an equilibrium of powers is being reached, but also because the psychological attitudes of the economic classes concerned in industry are undergoing, partly no doubt as a result of the changing balance of powers, a fundamental alteration. The capitalist system, or wage-system, as we have roughly outlined it above, was workable only as long as the various classes accepted willingly, or could be compelled to accept, their respective positions under it. In the early days of the factory system, and especially in the period of “Owenite” Trade Unionism and of the Chartist Movement, there was indeed a widespread revolt of the workers against a status and intolerable conditions which were then largely new; but the power and organization at their command were not then adequate to throw off the yoke, and they were compelled to accept a system in which they did not willingly acquiesce. The failure of their revolt, followed by a slight but real improvement of conditions led, to a great extent, to a mood of acquiescence; and during the latter half of the nineteenth century the factory system was carried on with a considerable measure of resignation and even consent of the part of the workers, who still sought to improve their position under the system, but rarely, as they had done, to end it altogether. Towards the end of the century, after the growth of the modern Socialist Movement and the spread of organization among new sections of workers, the mood of revolt began again to grow; but even down to the war period, despite the unrest of the years immediately preceding 1914, it had hardly reached dimensions sufficient seriously to alarm the governing classes, or to threaten the impending overthrow of the capitalist system.

The war, not so much by introducing new factors as by hastening immensely the operation of those which were already at work, completely altered the situation. Not in one, but in many countries, it brought the movement of revolt to a head, leading in some cases to actual revolution, but in far more to a state of tension which, without producing immediate revolution, threw the capitalist system largely out of gear. This occurred because everywhere the war brought to the organized working-class an immensely increased consciousness of their strength, and of the possibility of translating that strength into recognized and effective social power. It also largely discredited capitalism as a method of production and caused the State — the political machinery of Society — to assume more nakedly and obviously the shape of an instrument of class-domination. The Russian Revolution, moreover, however Bolshevism as a policy was regarded, produced everywhere a very powerful effect on the minds of the workers, and the knowledge of it, mingling in their consciousness with the other factors, created on their part a disposition far more ready for change. Add to this the fact that war breeds a disregard of minor consequences and a readiness for desperate remedies, and that it introduces a considerable dislocation into the working of the ordinary mechanism of Society, and into the factory most of all, and you have all the essential causes of the profound change which has come over the attitude of the working-class in all the industrialized countries.

This change of attitude was swift in producing a change in the actual industrial situation. Not only did it make the workers more ready to embark on disputes, both great and small, whether with the Government or with their employers: it also very greatly affected their everyday state of mind in the factory and at their work. Not only did they learn to strike more readily: they were visited by an increasing unwillingness to work for capitalist masters. The effect of this was seen at once not only in more constant factory bickerings, but also and far more in a rapid fall in individual output, which no application of “incentives to production,” whether in the form of “payment by results” or of pamphlets and other exhortations to “produce more in the cause of industrial prosperity and national revival” availed to check. Thus, at the very moment when the external threat of the powerful working-class organizations to capitalist and the capitalist State began to look most threatening, the capitalist system began to find itself also undermined from within by the reluctance of the workers to serve it as well and faithfully as they had done in the past. Nor could this reluctance be effectively met by coercion; for the devils of hunger and fear, by which the workers had been driven back to the factories and compelled to produce in the days of the former revolts, have now, owing to the increased absolute power of the organized workers of today, lost most of their effect. Everywhere the workers are proceeding steadily with the undermining of the capitalist order of Society.

Guild Socialists, then, not merely envisage the present position as one that can only continue for a limited period and at the cost of progressive deterioration, and believe that they have rightly conceived of the best general form for the next stage of social development to assume: they also definitely pin their faith to an expansion, both in function and in membership, of the organizations which the workers have created for their own defense, and hold that the signs of this expansion are everywhere to be detected in the present tendencies of working-class policy. They see the clash between the old order and the new both as a struggle for power of rival social classes, possessing and dispossessed, and as a striving by the organized workers for the assumption of social functions which they feel themselves increasingly well able to perform in the common interest. Moreover, the decreasing efficiency of capitalist industry and the lessened willingness of the workers to produce seem to Guildsmen the inevitable outcome of a situation in which the distribution of social status and authority has lost all correspondence with the real balance of economic competence. Out of such a situation must come revolutionary change, with or without violence: the object of Guildsmen is to inform this coming revolution with a constructive spirit, and to devise for its furtherance a positive policy in harmony both with the aspirations of the common people and with the capacity of the organization which the common people have made for their protection under capitalism.

Guild Socialism therefore appears largely as a theory of institutions and as a policy directed to the transformation of the social structure. It is this, however, not because it believes that the life of men is comprehended in their social machinery, but because social machinery, as it is good or bad, harmonious or discordant with human desires and instincts, is the means either of furthering, or of thwarting, the expression of human personality. If environment does not, as Robert Owen thought, make character in an absolute sense, it does direct and divert character into divergent forms of expression. Environment, in modern Societies at least, is very largely a matter of social mechanism. To get the mechanism right, and to adjust it as far as possible to the expression of men’s social wills, is therefore the surest way, not only to the well-being of the body politic, but to the happiness and sense of well-directed achievement which chiefly constitute individual well-being. It is not because they idealize industrialism or social institutions that Guildsmen spend so much time in theorizing and planning about them: it is because they see the best chance of human well-being in getting these aspects of life put firmly and properly into their right place.