Rationalization of Industry

control, organization, mond and workpeople

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The conception of "rationalized" industries has much in common with that of industrial guilds, which were the subject of much forceful advocacy during the post-war reconstruction period. The rationalization of industry is also hardly to be distinguished, in many of its promised advantages, from the "nationalization of industries" which has figured for so long on the socialist pro gramme. (See SociAusm.) But it differs fundamentally from both these on the question of who shall he in control. Rationalization envisages the retention, with no radical change, of the capitalist order. The ultimate control of the industry is vested, not in a democratic electorate of all those engaged in the industry, and not in a Government department, but in the shareholders and other financiers of the combined enterprises. Proposals for as sociating the workpeople with the internal management and with the fortunes of the separate or combined undertakings by means of works committees, workmen's representatives on the board, and schemes of profit-sharing and co-partnership do not essen tially alter this fact ; nor does the probability that such organiza tion will find it wise to keep on good terms with the political power shift sensibly the nominal seat of industrial power. From this aspect flows two important considerations ; one as to the manner in which the nominal control of the stock-holders and other financiers (including the banks) will find expression in the policy of the central directorate and the type of administrator that will be thrown up; and the other the attitude of the workpeople to the form and policy of the organization.

Attitude of Trade Unions.

From the latter standpoint much interest attaches to the approaches made towards the end of 1927 by Sir Alfred Mond (Lord Melchett) head of the great chemical consolidation, on behalf of a body of employers identi fied with rationalization aims; to the General Council of the Trades Union Congress, the response of that organization, and the conferences that subsequently took place. The declared view of the Trade Union movement, as expressed in the course of these conferences, is that while rationalization can never prove an alternative to nationalization the movement was prepared to welcome and support such changes in the organization of industry during the period of private ownership as would lead to improve ments in the efficiency of industry, and to the raising of the standard of living of the people.

BIBLIOGRAPHY.

Sir Alfred Mond, Industry and Politics (1928) ; David Houston, Rationalization in the United States (Geneva, 1926) ; Prof. D. H. MacGregor, "Rationalization of Industry" in the Economic Journal (Dec. 1927). See also the bibliographies to MONOPOLY and

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