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WORKERS v SHAREHOLDERS
19. It is thus probable that shareholders will continue to retain formal sovereignty over a firm, being formally required merely to share it with workers. The shareholders at present exercise little practical sovereignty over the firms they own. If a shareholder is interested in a firm whose shares he owns he will either exercise this interest by coming to work for it as an executive or on the Board of Directors or simply become a well-informed amateur, aiding capitalism in general by helping to form public opinion. The conscious direction of capitalism is at present undertaken by the salaried and hired executive and manager aided in Britain by a section of the ever-diminishing rentier class who take an active interest in their money and are good enough at it to be put on Boards. These men act in the name of the shareholders just as the Prime Minister and Cabinet act in the name of the Queen who is still the constitutional sovereign. If the hired executive owns shares in his firm, this ownership is the result of his job, the job is not the result of owning shares.
20. The workforce in a factory are in a much better position to exercise active control and sovereignty over management than are shareholders. The workforce know the production process with greater intimacy than directors or executives and are more likely to make intelligent innovations in it than are directors and executives.
21. In other areas (how much investment to make for 10-20 years ahead; whether a new product should be introduced; how much should be produced; how to deal with bottlenecks in supply and distribution) the experience of the production process is of no help. In these areas the knowledge which management today undoubtedly possess and are continuing to develop will need to be taught to the workforce just as in the early 19th century mechanics institutes taught science and Ricardian economics. These management prerogatives (prerogatives because they are at present unchecked by their legal sovereigns, the shareholders) will cease to be prerogatives only when the workforce is able to judge them. For this, knowledge is necessary. Since Capital was written, the capitalists have become much more conscious of what they do as capitalists and therefore much more able to control it. For example a new product is not now produced until research shown that there will be a certain level of demand for it.
22. The owner of a firm only controlled it because he was also its chief executive: he performed "in person his function as manager of the production process" (Capital, volume 3, p. 285). "It (the joint stock Company) is private production without the control of private property" (p. 429). This is why all schemes for worker-shareholding are irrelevant and diversionary. The only practical relation between shareholders and firm is that between creditor and debtor. At present the effective rulers of a firm are its Board of Directors and management. A glance at these Boards and management is sufficient to see that their members are men who have worked their way up from the shop floor (Lord Stokes, Chairman of British Leyland and Sir William Batty, chairman of British Ford, started in these companies as apprentice engineers), and men who began as technicians and scientists, at least as often as they come from the rentier class. The knowledge needed to run a firm is now available to anyone who is interested from books, newspapers and specialised periodicals. This availability makes effective workers' control possible since neither ruling class reflex nor gut bourgeois instinct are any longer necessary to run a firm.
A TRANSITIONAL STATE
23. Marx, Engels, Lenin and Stalin [1] all stress the necessity for the socialist state to retain bourgeois managers and ex-factory owners in their executive positions after the working class has taken state power and the transition to communism has begun. This is because the working class would be ignorant of how to organise and administer production (quite logically as the class had never had to do so and such knowledge is not innate to any man). Until the working class had gained the necessary knowledge, these bourgeoisie would have to continue to occupy positions of responsibility and power. This of course increased the chances of sabotage and counter-revolution as the bourgeoisie would be in an advantageous position from which to organise either.
[1] The reader may be offended by these apparently favourable references to Stalin. The B&ICO took the view that the creation of the Soviet Union was as much Stalin's achievement as it was Lenin's. To fail to recognise Stalin's achievement as continuous with Lenin's was to fail to learn anything of value from the Soviet experience both in its positive and its negative aspects. Recognition of the continuity of Lenin to Stalin enabled the B&ICO to welcome the publication of Solzhenitsyn's Gulag Archipelago as a much more substantial critique of the Soviet experience than that made either by Khrushchev or by Trotsky.
24. The Russian experience, while it is of great value to the general development of working class politics, is of more limited value to the investigation of the particular question of workers' control. It was not the exhaustion of the potentialities of capitalist economy that led to the socialist revolution in Russia, but the failure of bourgeois politics in a country that was economically ripe for extensive capitalist development. Learning from West European experience the small industrial working class in Russia developed a more capable political party than the bourgeoisie, and took political power in a country whose general economic and cultural conditions were more appropriate to capitalist than socialist development. Furthermore, the small working class that existed in 1917 was disrupted in the civil war and the war of intervention during the following years, so that it had been 'declassed'. In 1921 there began the development of a new working class out of the peasantry under the tutelage of a socialist state (which included large numbers of the old working class). Circumstances dictated that a system of "one man management" be operated in factories. During the Stalin period this system could not be superseded. No sooner had a modern industrial economy been built than another massive disruption was caused by the Nazi invasion.
The truth of Marx's statement that no mode of production disappears until its economic potential has been exhausted is being borne out in Britain and in the world economy as a whole. In Britain workers' control within capitalism is being put on the agenda by the very development of the capitalist economy. This means that the British working class has to deal with a situation that did not occur in Russia because of the political failure of the bourgeoisie while the capitalist economy was in its infancy: hence the limited value of the Russian revolution in clarifying this question of workers' control.
25. One gain for the working class from workers' control would be to minimise considerably the need to retain capitalists in positions of power after the taking of political power. Because the working class themselves would possess the skill to administer production, the capitalists could immediately be demoted into the ranks of productive labour. Such bourgeois personnel as it was necessary to retain would have a hard time organising the sabotage of production because their decisions and performance would already be subject to routine scrutiny by their workforce. The effect of workers' control must be to substantially lessen the possibility of counter-revolution.
"The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their organisation all the shortcomings of the prevailing system. But if at first only by way of making the associated labourers into their own capitalist, that is, by enabling them to use the means of production for the employment of their own labour, they show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage." (Capital, volume 3, p. 431)
26. It is a fact that the capitalists intend to introduce a sharing of sovereignty with the working class in Britain. The question which faces the working class is not whether to demand workers' control, but rather what form of workers' control to demand and what action is necessary to gain that form. Workers' control cannot be effectively resisted by the working class because there is no class basis from which to resist. Like piece-rates, the capitalists intend using workers' control to guarantee a minimum level of productivity. Instead of a material incentive to ensure a certain level of output, there is instead to be an appeal to reason and the placing of responsibility for the firm's continued existence in its workers' hands. The failure to maintain productivity under workers' control will not be due to the boss, because he will be answerable to the workers. The only class basis for resisting workers' control would be to hold that the working class will force themselves to work harder, lengthen their own working day, be more heedless of their own welfare than the capitalists.