Labour disputes have become a chronic disease everywhere in the world today. In ancient times there was no bonus system. Some large industrialists used to give a bonus out of compassion, but nowadays a bonus has become a right. It is noticeable that in many places the party in power suppresses the labour movement and the party not in power supports it. Strikes are supported by the communists in India and suppressed by them in the USSR.
There may be a temporary solution to this problem by accepting the rights of labourers in management, granting them some dividend out of the net profit, setting apart some amount for reserve funds and sinking funds for creating fresh capital and interest on this capital, and distributing net profits among labourers. But this is not a permanent solution. The question is how can the percentage of the share out of the net profit be fixed? In Bengal, the Bataidars first claimed half and later two thirds of the net profit. This will change with the moving world.
The permanent solution lies in the large scale implementation of the cooperative system and the socialisation of land, industries, trade and commerce. Key industries should be large scale industries. These key industries should be managed and owned by the immediate government, and in order to keep labour relations congenial, a bonus system of work and piece work payments should be adopted. The harder and better the people work, the more profit they will get.
The bonus system of work and piece work payments are two different things. Payment for the time saved in doing a particular piece of work is called the bonus system of work. That is, a particular amount earned by labourers from the profit of the organization on the basis of their labour is called a bonus. Piece work payments are something else. If a piece of work is completed before the fixed time, and in the remaining portion of time extra work is done, then labourers will get extra payment for that extra work. This system is called piece work payment. To take a concrete example, if the time allowed for manufacturing a scissors blade is two hours and the work is actually performed in one and a half hours, the payment for saving half an hours time is called piece work payment. A dividend is defined as a return on the basis of the net profit earned by the organization. In Japan, which is one of the most industrially developed countries, there are only a few labour disputes because work is done according to the bonus system and piece work payments, and industry is mostly managed along lines similar to the cooperative system.
Regarding cooperatives, we must not forget that cooperatives only function properly under a strong government. They cannot function under a weak democratic structure. Before starting cooperatives a psychological environment has to be created. In the Proutistic structure rationalization means less labour, more leisure and more comfort. In order to safeguard the interests of these cooperatives in the field of industry, it has to be emphasised that key industries should be run by the government so that there will not be any occasion for a tool down and the consequent closure of subsidiary industries in the cooperative sector. However, slogans calling for the cooperative movement are untimely in the present system as the psychological background is lacking. If cooperatives are established at the present time, they will simply cause losses to the national wealth. It may be questioned whether it is desirable for a government to engage in commercial concerns, and if so, how can the labour problems in such concerns be solved permanently? In principle governments should not run commercial concerns, but in those cases where it is not possible to run a concern on a cooperative basis, the government should take the lead. However, such concerns should be mostly assembly factories. The manufacture of component parts for these assembly factories should be done through industrial cooperatives. In extreme cases, where industrial cooperatives are unable to manufacture certain components, they should be manufactured by the government. In such concerns there will be no net profit because it is often the question of profit which creates labour problems. The cost of production may be suitably reduced to make it a no-profit, no-loss concern. It is, however, necessary to keep both financial and commercial accounts to ensure that the concern does not run at a loss. If any loss occurs in such a factory it should be converted into an industrial cooperative.