Social Insurance Legislation and Statistics. by Benoy Kumar SarkarReview by: C. A. KulpJournal of the American Statistical Association, Vol. 33, No. 203 (Sep., 1938), pp. 642-644Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2279727 .

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642 AMERICAN STATISTICAL ASSOCIATION*

and there is little indication in the book that this condition is about to change. Of course, this criticism is not so serious as some readers may infer, for many of the arguments advanced, both pro and con, with refer- ence to chain stores as we have known them, will apply, perhaps with more force, in the discussions of the new problem on which the changes now under way will focus attention.

In addition, the chain store problem has been, and still is, of widespread interest and importance. Discussion of this problem has not been as calm and as factual as one might desire. This new book by Beckman and Nolen, despite its shortcomings, represents a worth-while addition to the literature of the subject.

CARL N. SCHMALZ Harvard University

Social Insurance Legislation and Statistics, A Study in the Labour Economics and Business Organization of Neo-Capitalism, by Benoy Kumar Sarkar. Calcutta: The Calcutta Publishers. Selling agents-U. Ray & Sons, 117-1, Bowbazar Street, Calcutta. 1936. xxi, 446 pp. Rs. 8/-. This is at least as much a tract as a book on social insurance statistics

and laws. It devotes, it is true, more than half its pages to these subjects, but this part of the book is quite clearly only documentation for the main argument. The argument is that the time has come for India, following the rest of the industrialized world, to adopt social insurance.

We are not unacquainted in this country, just emerging from the de- liberative into the pioneer stages of social insurance, with books that suc- ceed fairly well in being both scientific and partisan. But America has never produced so strange a combination of exhortation and figures, preaching, and facts. This for a variety of reasons. The world, says the author, has entered the second industrial revolution: its leading characteristics are "technocracy" (the European "rationalization"), "trustification," and rap- idly expanding state control of business. A collateral characteristic, and one that Sarkar sees related very intimately to these others, is the world-wide spread of social insurance. The neo-capitalist, the capitalist of the twentieth century, has been "to a certain extent perhaps chastened by the impact of the working classes and the community in general" (p. 77). Social insurance is one of the results. But India is barely on the threshold of her first industrial revolution. The employing class is still very much in the saddle, the state stands still on the sidelines; most important, neither labor nor community is socially minded. Organized labor is still the exception, and the few unions are not strong. The community tends to think in terms of the putative glories of a Golden Age of the long past, in the forms of a caste system that has shaped India's life and thought since the dawn of man.

The author,- that is, has set himself an impossible task: to shake his countrymen out of their ancient lethargy, force them to skip at least a cen- tury in industrial history and no one knows how many centuries of social

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* BooK REVIEWS 643

and political history, jump straight into social insurance, essentially a twentieth-century "improvement." "Social assurance is not yet a question of practical politics;" in the meantime he is appealing to the two groups he is convinced hold the key to India's future: the workers and the clerks. It is significant of India and of the nature of the author's task that he feels he needs to devote one chapter to "The Dignity of the Clerical Service," one to "The Nation-Building Functions of Clerks." The long and often dull pages of statistics in the middle of the book are for "students of statistics, economic history and political developments." The tocsin, delivered at the beginning and end of the book, without statistics, is for the underprivileged. The pitch of the latter may be judged by the author's statement that there is in India an "unreasonable gospel of hatred" against clerical service, that even "gazetted officers in government service have learnt to consider them- selves as almost worthless human beings" (p. 94).

One other fact makes the nonstatistical sections of the book less than com- pletely logical and orderly to the Occidental mind. It is the apparent neces- sity of making both a general economic and a specific case for social insur- ance. Marshall and John Stuart Mill, not to mention Pareto and Sorokin, are adduced to prove that social insurance costs can be paid and that social insurance benefits are an addition to and not a substitute for wages. On this point Sarkar is himself not very clear. He seems to accept the iron law of wages on page 427; on pages vii, 408, and 412 he cQncludes that the needs of the worker "can therefore be satisfied to a certain extent and within certain limits by the provision of wages at rates which are beyond those dictated by free competition and the iron law" (p. 428).

It is not surprising, therefore, to find that Sarkar has no detailed Indian social insurance program. Though he chides Indian workers with fanning the air with programs so broad they never get down to details like wages and specific social insurance plans, he really gets not much closer. He urges the middle class to hasten the industrialization of India because labor upheaval will help them (it seems the other way about to the American and Euro- pean); he opposes state contributions to social insurance because they are a dole to the capitalist; his most specific recommendation is that the clerks ally themselves with the manual workers. He strongly suggests that labor unions are essential for social insurance administration, although neither British (except for health insurance and then to a minor degree) nor Ameri- can experience indicates that this is so. I think he quite misunderstands the experience of the entire world when he says that "the business aspect (of social insurance) has too long escaped the attention of the insurance companies" (p. 407). Social insurance is not private insurance, and mischief generally follows when they are confused.

The statistical and legal materials are mainly to provide social insurance and related comparisons for the leading industrial countries, particularly Germany the pioneer and Great Britain the homeland. The sources are generally secondary, too often out-of-date. When available, Indian ma- terials are given. The feel of this part of the book is conveyed in the author's

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644 AMERICAN STATISTICAL ASSOCIATION.

reference to his comparative statistics on public finance. "We are neither interested in the discrepancies of estimate for the present nor in the scientific comparison between country and country."

C. A. KULP University of Pennsylvania

Profit Sharing for Wage Earners, by C. Canby Balderston. New York: In- dustrial Relations Counselors, Inc. 1937. viii, 157 pp. $2.00. In the never-ending search for an easy formula for harmonious relations

in industry, the device of profit sharing has been rediscovered and hailed anew at almost every upturn of business for the better part of a century. During the 1920's however, much of the enthusiasm for profit sharing was diverted to employee stock ownership. Following sad experiences with this twentieth century substitute, interest in the older form of making "enter- prisers" out of wage earners revived in 1936 and early 1937. Despite the suc- ceeding reversal in business, the recent Congress became sufficiently im- pressed by the promises of industrial peace and prosperity advanced by the advocates of profit sharing to appropriate $30,000 to study it further.

With Professor Balderston's excellent monograph at hand, Congress might well have saved the country the cost of another survey. In 68 pages of text and a 76-page appendix, Professor Balderston concisely summarizes the history of profit sharing, its objectives, the factors affecting success or failure in its use, the structure of plans, and experience under them. In a final chapter he outlines the conditions under which a profit-sharing plan might be justifiable. The appendix includes verbatim statements of three active plans of a type which the author approves as well as tabular sum- maries of a large number of other American and British plans. Many care- fully prepared tables and charts supplement the text.

Although the author concludes "that profit sharing has real merit," he states that extreme care must be exercised to determine the suitability of the particular situation and the soundness of the plan in relation to it. Standing alone, he holds, profit sharing is a weak device. It should be the culmination of a well-rounded personnel policy under which properly financed plans protect employees in times when earnings decline or disap- pear. The author recommends that any share in extra profits be deposited in a fund to strengthen or liberalize such protective programs rather than disbursed as cash bonuses. With ample provision against the hazards of old age, unemployment and sickness, he believes, profit sharing should be used to subsidize employee savings.

The author would probably agree that scarcely a dozen companies in the country are justified in inaugurating a profit-sharing plan in the face of these requirements. Rather than an easy formula, profit sharing becomes under this prescription the cornice of an elaborate and costly structure of protective programs. Even then there seem to be grave doubts as to its advantage compared to a farsighted policy of payroll reserves and employment stabili-

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