employer. The workman lacks
knowledge of the business and is suspicious of the bookkeeping. If
at the end of the year the books show no profits, the workman loses
confidence, considers the plan to be mere deception, and rejects
it. The working of the plan remains in the employer's hands, and the
workman really is not a partner in the business. Moreover, the plan
puts a limitation upon the workman's freedom to compete for better
wages by changing his place of work. It is indispensable to make
length of service in some degree a condition to the sharing of
profits. Workmen, coming and going, cannot be allowed to share; the
percentage given to the others increases with length of employment.
Whenever men are thus practically subject to a fine (equal to the
amount of shared profits) if they accept a better position, there is
danger of a covert lowering of wages. The plan tends to break up the
trade-unions, which is one of the reasons that the employers like it,
and is the main reason that organized labor opposes it.

The employer on his part objects to the interference with his
management, the troublesome inspection of the books, and the constant
complaints of the workmen. He dislikes to have the profits known; if
they are large, the advertisement of success invites competition; if
they are small, publicity may injure credit and depress the value of
the enterprise. In view of all these difficulties it is not surprising
that while the plan often starts promisingly, it usually fails after a
short trial. Business methods are severely subject to the principle of
the survival of the fittest. Through competition and the survival
of the firms that adopt improvements, better methods must eventually
supplant poorer ones. If a method fails to spread when it has been
tried for seventy-five years and all are free to adopt it, the strong
probability is that it has serious defects inherent in it.

Sec. 12. #Defective theory of profit-sharing.# It is usually better
to make wages depend on the worker's efficiency rather than on the
profits of the whole business. The strongest motive to efficiency is
present when reward is connected immediately and directly with effort,
not with some result only slightly under the worker's control. Any
change in the amount of profits is only partially and indirectly
related to increased effort of the worker. The "profits" may be
nothing, tho all the manual workers may be exerting themselves to the
utmost. T