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WHAT THE GOVERNMENT WAS OFFERING
Heath offered the TUC a permanent place in the management of the economy. This meant
(1) determining how much of the social resources should be spent on producing means of production and how much on consumption
(2) deciding what and how much should be produced with "public money". "Public money" now accounts directly for one half of all accumulation of capital in Britain. Of the investment in private industry, about one third comes from the Government in the form of selective grants: i.e. it has been decided by the society to support production in that particular sector. Within nationalised industry and also private industry supported by the Government, profitability for what and how much to produce and under what conditions still prevails. However, profitability can be and is overriden by conscious social decision. Heath's offer to the TUC and the demand for increased Parliamentary control over public money are progressive because they mean taking the decisions about what should be produced out of the vicissitudes of history (based on old consciousness which does not accord with changed reality) and they represent, an insistence that the state apparatus should not take these decisions without some conscious discussion and debate and assertion of class interest by the working class and the bourgeoisie. (The 1964 Labour Government and a very large portion of the intelligentsia including Samuel Brittan had arrived at a belief that the state apparatus was the only effective body to take these decisions. This belief was based largely on looking at France where the state apparatus does indeed operate in this way. The reaction to this belief is a British one and it is progressive because it puts the responsibility for decisions on the classes in society and not a state apparatus.) If Heath's offer had been taken up by the TUC, the beginnings of a new political form would have been established. It would then have remained to see whether the classes developed and used that form.
THE TUC's REPLY
The TUC's response to the demand for the conscious regulation of wages has been the following:
(l) to see profits as the consumption of the bourgeoisie and not the means by which capital is accumulated and therefore to demand that profits should be equally regulated so that the bourgeoisie's consumption is regulated;
(2) to see the 'right' to ever-increasing consumption as based on concepts of 'fairness' and 'equity' which bear no relation to the society's ability to produce commodities for consumption. (Cars, clothes etc can come from thin air with public money if the working class uses its force through free collective bargaining.)
(3) to defend the present system of collective bargaining on the basis that it exists and therefore ought to be defended.
The third point implies that no other method of determining wages can ensure that the interests of the working class is maintained and furthered. It amounts to a fetishisation of the form of the economic struggle for the form's sake. If in fact it were the interests of the working class which the TUC was most concerned with, it would be forced to acknowledge that a form can evolve and change in accordance with the changed needs of material reality and that the ability of the working class to defend itself does not depend on a form but on the accuracy of the class' consciousness of the real situation.
From the TUC's "Economic Policy and Collective Bargaining in 1973":
"Under the freeze of both wages and prices, any increase in output will automatically benefit profits or other non-wage incomes, and the economy will on present trends be expanding at around 4% during that period." (p.22) "Any policy on inflation must ensure that the real growth of the economy is fairly shared. Thus, profits can increase sufficiently to finance new investment without the share of the national income going to profits increasing. The original Government proposals of Sept 26 would have meant that non-wage incomes such as profits and dividends would have been rising 1.5 times as fast as wages and salaries," (p.24) "In framing its Budget proposals this year, the TUC is suggesting that a 5% increase in real output will not be sufficient to meet these competing claims on resources in order to allow an adequate rate of growth of real consumption. It is therefore advocating an injection into the economy of around £600 million which will increase the growth rate by 1.2% per year over what it would otherwise have been, that is to 6.2%" (p.28, injection means Government debt: credit creation). "In the interests of equity, these concessions (Government concessions to surtaxpayers and dividend earners) should be reversed in April 1973." (p.42) "The major error in the Government's approach is its attempt to ignore, indeed override, existing collective bargaining machinery. To do this is to neglect the only available means for ensuring that workers' interests, their problems, priorities, needs and aspirations, are built into the formulation and development of policy, and that general pay recommendations are tailored to the circumstances of particular cases." (pp.44--5)
The terms "fairly shared", "adequate rate of growth of real consumption", "equity", "reasonable increase in real incomes" can only be understood in reference to a social decision: only the members of a national economy can decide what "fair" or "reasonable" or "adequate" is. By arguing in favour of the present system of collective bargaining, the TUC supports leaving these decisions to the workings of the economic struggle: i.e. the relative strength of the different sectors of the working class both competing against each other and also competing with resources which would otherwise be used for producing means of production. It argues on the basis that the present form is the "only available", i.e. the TUC are unwilling to acknowledge that other forms are possible. The Government and the CBI argued that another form was necessary because of the change in the structure of the economy. The TUC specifically refutes the position that change in the form is necessary because of a change in the system of production and distribution:
"The General Council believe that the Government's statutory approach will certainly not fulfil its authors' expectations. Indeed, it is somewhat arrogant on the part of the Government to consign free collective bargaining to three years' suspension with further periods of one year's probation at the same time as it claims to believe in voluntary agreement. The Council believe that the demise of this policy will arise from its own internal contradictions, and its lack of flexibility may well lead to specific industrial situations of some gravity." (p.46)
I.e. it is the Government's arrogance that has led them to enact a statutory policy and not the need to change the consciousness of classes to reflect a changed reality (for the Government were certainly not asking the working class to surrender its class organisation, political position as a class or class consciousness. The fact that the TUC were representing the working class and that at no time did the Government claim to be acting for the working class shows this.)
Under the present system of collective bargaining the wages of an individual sector of the working class (e.g. engineers) are determined
(l) by the strength of organisation of the workers (their ability to disrupt production);
(2) their organised strength as compared with the organised strength of other workers in the same industry (the ability of white-collar workers in engineering to compete against manual workers for the same wage fund);
(3) the ability of that section of workers to get the support of the rest of the working class for their claim. For the miners to win, it took the active support of the power workers, railway workers and engineers. There is also a political aspect of the class' support. If the working class are unwilling to support a sector of itself, the amount of disruption caused by a strike will be tolerated indefinitely by it without there being "public outrage". "Public outrage" which leads to a Court of Inquiry and a settlement in the workers' favour develops when the working class decides that that sector is worth support. Thus in the postmen's strike of 1970, the working class put up with considerable disruption over 7 weeks without any "public outrage".
The total wage bill for the national economy is determined under the present system of collective bargaining in Britain by the working class' power as an organised class to use its place in production to gain wage increases from the bourgeoisie. In the absence of profitability as a criterion for continuing production, this power is in the end limited by the class' consciousness of what is (a) possible and (b) desirable to gain:
"In Britain since the war, we have taken a higher proportion of GNP into consumption than any other advanced country. Germany was the first example of a country which saved, both nationally and privately, and guided the savings into investment. In this connection the policy of the present Government in taking money out of the pockets of the people, by demanding realistic rents, food prices and payments for social services is surely right; but right only if the money taken out of circulation is directed into industrial investment. Since, in the political and social climate of this country, such a dirigiste policy is unattainable this side of the barricades, we must resign ourselves to increasing social and personal deprivation as industry increasingly is unable to bring home the bacon." (the pure-capitalist already quoted, Observer, 25.2.73)
Inflation has resulted because instead of seeking "public money" in the first instance to finance wage increases, firms put up prices in an attempt to remain profitable or even cover costs. In many cases they have done both (e.g. shipbuilding and machine tools). The Government's regulation of price increases as well as wage increases is to see that no capitalist "profiteers", i.e. makes profits which he does not "deserve" out of the vicissitudes of the market. Price increases will be permitted if they arise from an increase in the cost price of production to the capitalist: i.e. if his raw material prices increase or if his wage bill increases by £l + 4% per worker (though only half of labour cost increases can be passed on). If the capitalists' costs per unit of output decrease, he must reduce his price.