Front Page Titles (by Subject) CHAPTER X: Compulsory Arbitration - Socialistic Fallacies
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CHAPTER X: Compulsory Arbitration - Yves Guyot, Socialistic Fallacies 
Socialistic Fallacies (London: Cope and Fenwick, 1910).
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“A land without strikes”—New Zealand—The “Arbitration Act,” 1894—Set-back to boards of conciliation—Interference of the Court—The butchers' strike—The Lock-out in the timber trade—Hypocritical attitude of the Unions with regard to strikes—Difficulties in carrying out the Act—Absence of moral support of persons interested.
Gribouille's1 disciples have formed the profound conception of abolishing strikes by forcing every individual to be a member of a trade combination and by regulating all questions of wages and of the organisation of labour through the medium of incompetent and irresponsible tribunals.
In support of their theory they cite a book published in 1900 by the Agent-General of New Zealand, under the title of “A land without strikes,”2 to glorify the Act of 1894, entitled “An Act to encourage the formation of Industrial Unions, and to facilitate the settlement of industrial disputes by conciliation and arbitration.” The Act did not in terms render arbitration compulsory, but it did so by implication, by imposing the making of joint or collective contracts. It provides for boards of conciliation and in case of their failure, for a short reference to arbitration. As soon as the workmen have formed a union, they are able to impose this jurisdiction even upon employers who are not connected with a union. They have power to impose arbitration upon such employers when none of the members of the workmen's union have an interest in the dispute. Even if the employer has no unionists among his employees, he is not protected against proceedings.
Strikes and lock-outs are prohibited. This legislation has ended in submitting the regulation of all industrial conditions to the determination of the Courts, and they have acted as the repositories of legislative powers delegated to them by Parliament.
The workman, as an individual, is no longer subject to bye-laws. He has to be a unit in a Union, the object of these workmen's unions being to prevent labour from becoming too oppressive. A union always has five objects in view—higher wages, shorter hours of work, overtime, the restriction of the number of apprentices and the exclusion of non-unionists.
It has been stated that since the passing of the Act the boards of conciliation dealt with 99 per cent. of all disputes; but their decisions have no force, and are so well recognised as nugatory that their proceedings are now admitted not to justify their existence, and disputes are carried direct to the tribunal of arbitration.
The preliminary difficulty encountered by the tribunal is to find out what are the points in dispute. Its award then has to enter into details of such minuteness that it is impossible to ascertain what it sanctions and what it forbids, and every difference of opinion between employer and employee as to the interpretation of the award gives rise to a fresh dispute.
In these circumstances, the employer always places the narrowest construction upon the award, a minimum wage is treated as a maximum, and general antagonism is substituted for all sense of moral obligation as between employers and employees. This leads to decrease in production and consequent increase in the cost of living and decline in the purchasing power of customers. Workmen spending the greater part of their wages as consumers have found their position by no means improved.
New Zealand relies on its export of mutton and is obliged to consider the net cost of producing it. When the butchers in the slaughter-houses, in combination with the employees in the cold storage warehouses at Wellington, Canterbury, Otago, Gisborne and Southland, claimed an increase of salary, the tribunal of arbitration rejected their demand, whereupon they went out on strike on March 7th, 1906. On March 8th judgment was given against them for damages amounting to £700. The Attorney-General and a Judge of the Supreme Court were of opinion that this was neither a debt nor damages, nor a penalty for a breach of contract, but a penalty in the strict sense of the word, so that the defendants would have to go to prison, if they failed to pay.
The strike came to an end on March 20th, the defendants either paying the fines or disappearing to seek employment in other colonies. Mr, Hall Jones, representing the New Zealand Government, nevertheless said that this was not a set-back for the Act, but that the Government had merely to amend it, in order to render its operation more effective.
But these are not the only trades effected. On May 20th the Western Australian newspapers announced that Mr. Holman and two employees of the Sawmill Society had been cast in damages at Perth, or to imprisonment in default, for having aided and abetted the strikers in the timber trade. On June 4th the same newspapers reported that proceedings had been taken against employers in the timber trade for organising a lock-out.
Here is evidence that compulsory arbitration is unable to prevent either strikes or lock-outs.1
With the official optimism which is the character istic of all governments, one of the Ministers had asserted that the Unionists disapproved of this resort to strikes. At the very moment when he was making this statement, the Trades Unions of Wellington and the Labour Council were passing a vote of sympathy with the strikers. Vain efforts were made to induce other Unions to express disapproval: there may have been some apparent changes of attitude, due to various influences, but their general attitude was left in no doubt.
The Hon. John MacGregor, a former member of the New Zealand Upper House, recognised the set-back to compulsory arbitration.1
Unionists who fail to submit to the process of the Tribunal of Arbitration are liable to damages, but in New Zealand, as in other countries, they have succeeded in putting themselves above the law with impunity. Officially, the Unions dissuade their members from violating it, but they encourage them to do so by underhand methods, thereby escaping all pecuniary responsibility. Individuals may be cast in damages, and sentenced to imprisonment in default.
But an American visitor to New Zealand, who was so much attracted by the “Arbitration Act” that he wanted to import it into the United States, was told by a New Zealander that it was hopeless and would not work because the prisons of the United States are not large enough. Supposing you obtain a judgment for damages against four or five thousand members of a Union which violates the Arbitration Act or refuses to satisfy the judgment of the Court. They decline to pay. Where are the prisons with a sufficient capacity to contain them? And what will become of their families while they are serving their term? They could not be left to die of starvation.
The working of compulsory arbitration in New Zealand has demonstrated its impossibility in the absence of the moral support of all the parties interested; from the moment when it fails to obtain it, it stands condemned. Could it obtain such support in other countries? Those who say so, have the universal experience of mankind against them.
Coercion implies submission and not consent; consent alone creates a moral obligation. This explains the superiority of contract as a motive for action to arrangements imposed by authority. Compulsory arbitration would be followed by the same consequences in other countries as in New Zealand, namely, contempt for the law on the part of those who realise the possibility of violating it with impunity and of declining to accept the decisions of the Courts, while claiming to exact respect for that law from their adversaries. They would make a unilateral law of it, placing precisely the same construction upon it as that which is put forward in regard to Article 1780 of the Civil Code in France. “I claim,” says the author of this article, “that, without the constitution of the Tribunal of Arbitration, the workmen would have had a far larger share of the increased prosperity of the colony than they have in fact obtained.”
SOCIALISM AND DEMOCRACY
Gribouille was the wiseacre who threw himself into the river in order that his clothes might not get wetted by the rain.
See also M. Métin, “Le socialisme sans doctrines” (Paris, F. Alcan); L'arbitrage obligatoire, par Bertrand Nogaro (Paris, Roustan); “Australian Socialism,” by A. St. Leger.
“The Individualist,” June, 1907.
“The Times,” Financial and Commercial Supplement, April 8th and May 6th, 1907.