COMPULSORY ARBITRATION So far I have spoken only of the constructive side of the new capitalism's labor program, its purpose to produce healthy and industrially efficient laborers so as to increase profits.

"State Socialism" gives the workingman as a citizen certain carefully measured political rights, and legislates actively in his behalf as a profit-producing employee at work, but its policy is reversed the moment it deals with him and his organizations _as owners and sellers of labor_.
Towards the individual workers, who are completely powerless either politically or economically until they are organized, the new capitalism is, on the whole, both benevolent and actually beneficent.

But it does not propose that organized labor shall obtain a power either in industry or in government in any way comparable to that of organized capital.
"Successful State Socialism," as Victor S.Clark says in writing of the Australian experiments, "depends largely upon perfecting public control over the individual."[72] But compulsory arbitration of labor disputes which reaches the wage earners' organizations, is far more important to "State Socialism" than any other form of control over individual.

A considerable measure of individual liberty may be allowed without endangering this new social polity, and it is even intended systematically to encourage the more able among the workers by some form of individual or piece wages--or at least a high degree of classification of the workers--and by a scheme of promotion that will utilize the most able in superior positions, and incidentally remove them out of the way as possible leaders of discontent.
Nor is it intended to use any compulsion on labor organizations beyond that which is essential to prevent them from securing a power in society in any way comparable to that of property and capital.

For this purpose compulsory arbitration is the direct and perfect tool.