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CAPITALISTS PREPARE FOR A SURRENDER OF SOVEREIGNTY
The difference between the 1972-4 Incomes Policy and all the others is that the Government and the capitalists are prepared to surrender some of their sovereignty in the economy to the working class.
"But we must recognise that this (the capitalist system) has only persisted because the majority have not been prepared to use their potential economic and political power against the prosperous minority ... I believe that the fundamental situation is now changing. We have seen in the last two decades an arising consciousness of the power of organised labour. One can speculate at length on the reasons ... Whatever the compound of reasons it is the facts we must face ... I agree, therefore, that no final solution has been found to the problem either of restraining the totality of income growth or of settling the relativities between individual incomes. But I have no doubt whatsoever that we must return to the search as a matter of urgency. Unless we do this and unless we are prepared to cast aside all previous political and economic dogmas in order to meet a new political situation to which they have little relevance, we have no chance of success ... I do not believe that policies of conflict will or can work. I do not think we can now redress the balance between the monopoly power of labour and the interests of price stability by individual measures.
"You cannot solve the problems of a major social upheaval by economic mechanics alone ... I suspect that the problems we are facing are not economic but political. Economic factors operate within a political framework and the old orthodoxies of economics, however coherent and self-consistent, may not apply in a changed political situation. What determines the course of a country's society and its economy is fundamentally political power and how it is used." (Reginald Maudling, The Times, 12/9/72)
"The proposals are essentially political. They are to be seen as an offer by the Government to do a socially fair deal for the unions giving up the present free-for-all. They go even further than a once-off deal. This is an offer to the TUC and CBI to take a really effective share in the formulation of economic policy from now on." (Economist, p. 12, 30/9/72)
At the Institute of Directors' Annual Conference in 1969, Barbara Castle, at that time Minister of Labour, spoke.
"Her words were: 'We have got to recognise, whether we like it or not, that real power now resides in the workshop and on the office floor. It has, if you like, returned to the grass roots from whence it came. We have got to accept, again whether we like it or not, that workpeople have a veto which they are increasingly prepared to exercise; in other words, that management these days can no longer function by the arbitrary exercise of traditional 'prerogatives', but only by winning the consent of its workpeople'. Among those listening to Mrs. Castle in 1969 there was a murmur of consent to this proposition, but a quite definite undertone of shock. For it put into blunt words, and appeared to welcome without reservation a development that since World War II has led management in British industry to regard itself as increasingly powerless against first, the strength of the unions in conditions of full employment and second, the transfer of power from union officials to shop stewards and unofficial leaders operating outside the orderly, paternalistic system to which management was accustomed." (Industrial Relations, the Boardroom View by George Bull, editor of The Director, journal of the Institute of Directors pp. l6-l7)
On November 8, 1973, Mr Heath spoke to the same Annual Conference of the Institute of Directors:
"From the outset he made it clear that we intended to provide the prospect of steadily rising demand ... We shall continue to depend heavily upon increased productivity as a source of rising production for some time to come, if we are to be able to meet rising demand at home and call for continuing ingenuity and flexibility in management. And it will call for the co-operation and good-will of the shop floor - which in turn depends on an understanding of what is at stake ...
"But that is the essence of such an arrangement (tripartite agreements on prices and incomes and growth) - that individuals or sections of a society accept certain limitations on their freedoms in order that the society as a whole may benefit. And we cannot expect people to accept these limitations and constraints unless they understand why they are being asked to do so. And so I come back to the point I made a few months ago. It may be at the national level of discussions between the Government, the CBI and the TUC. It may be at the company level, between the Board and union representatives. It may be at plant level, between the managers of a plant and the men and women on the shop floor ... I am sure that it is true for government in this country today, that its authority depends upon its ability to explain to Parliament and to the public not only what it wants to to do but also why it thinks it right to do it. This is certainly not a field in which I can in any way feel complacent about our success in this so far ...
"They (the people) should be able to look to Government to explain and justify its proposals and its actions by those standards (that they are for the good of the society as a whole and at least broadly fair to individuals and groups within it). So, too, should it be in industry. Those who work in an enterprise are entitled to expect that its managers will seek to do what will benefit the enterprise as a whole, and is broadly fair to all the partners in it - to its consumers and customers, as well as to themselves as workers and to managers and shareholders. And they should be able to look to management to justify its decisions - whether on profits, on investment or on prices - by these standards ... So I believe at company level , and at plant level, men and women can be brought to understand, if it is explained to them, why a healthy level of investment depends upon profits, and what therefore is the connection between the company's profit margins and their own future employment and earnings. If it is explained to them." (Financial Times, 9/11/73)
The Financial Times leader of the same day commented:
"The face of capitalism is clearly and rightly a matter of great concern to the Prime Minister. Having delivered his famous rebuke during the Lonrho case [The famous remark that the Lonrho affair - a dispute between shareholders and the Chief Executive, "Tiny" Rowland, of the multibusiness Lonrho (London-Rhodesia) conglomerate - showed 'the unacceptable face of capitalism.'] some months ago, he provided the Institute of Directors yesterday with some suggestions on how to make the face of capitalism human, pleasant and acceptable ... Mr Heath's definition of worker participation was that:
"'those who work in industry should be able to accept management decisions because they have been consulted about them, can understand the reasons for them, and can feel that they have genuinely shared in the process of making them' ...
"In nine management decisions out of ten the interests of employees may be identical with those of shareholders. But it is the tenth decision that creates the problem. However Mr. Heath and others may insist that the interests of employees should rank as high as those of the shareholders the fact remains that within the present framework of company law, the ultimate sovereignty lies with shareholders ... Since the links that bind a shareholder to a company are generally more tenuous than those affecting employees (it is easier to sell shares than to find another job), one may question whether the framework is entirely appropriate to the present climate of opinion. But there remains the difficulty of defining precisely what employee participation should mean and how the broader national interest should be taken into account. If this is to involve a fundamental shift in the way directors are meant to interpret their respective responsibilities to shareholders employees and also to consumers, this will require the creation of a new legislative framework."
A SLIPPERY SLOPE
18. The capitalists are aware that their notions about "workers' participation" or "joint consultation" are to workers' control what the 1832 Reform Bill was to universal suffrage. Once the first step has been taken transferring some sovereignty, it is merely a question of time - that is, of how quickly the working class develop to be able to assume full sovereignty. The logic of this gradual shedding of sovereignty is to avoid an interregnum - a period when the old order has lost its right to control and the new order is still unable to exercise that right in practice because it lacks the consciousness and experience.
The old order of capitalist sovereignty can no longer be maintained without the risk of major and persistent industrial disruption and decline. The sharing of sovereignty with the workers in order to secure continuing industrial advancement opens up a further perspective for the bourgeoisie. Their survival, and their social justification during a period of shared sovereignty, outweighs for them the prospect that this period will end in a final loss of bourgeois sovereignty. Their leaders have long ago overcome the illusion that capitalism was an eternal social order, and their philosophy as a class aware of its historical transience, is summed up in Keynes' remark: "In the long run we are all dead".
The Government and the Confederation of British Industry have been arguing against a law which sets down a formal, detailed division of right between management and worker. They favour instead a loose definition which could apply equally to the beginnings of workers' control and its full realisation. We see no reason to oppose them in this respect. A written constitution might initially deprive the bourgeoisie legally of more sovereignty than a more de facto arrangement. But this would only be because it conceded to the working class more legal sovereignty than it was capable of exercising.
An arrangement which establishes joint sovereignty without rigidly defining it allows for a progressive increase of working class control of industry as it becomes capable of exercising it, and a consequent decline of bourgeois power. And it would be entirely advantageous to the cause of socialism that working class sovereignty should reflect the growth of working class power and ability, rather than come through legal enactment from above.
It will be necessary however at the factory and firm level for workers to negotiate detailed agreements with management about workers' control. Necessary because such detail provides a modus vivendi or contract by which production can be carried on. Such agreements will need to be renegotiated periodically as the workers are able and willing to take over more and more of the sovereignty within their firm.