C.A.R. Crosland on German Co-Determination and Worker’s Representation

On Tuesday I put up a piece from an Austrian government pamphlet explaining the system of Mitbestimmung, or Co-Determination, that operates in Austria and Germany, in which the workers’ interests in factories and enterprises are represented through a system of workers’ councils. C.A.R. Crosland also discusses this system in his book The Conservative Enemy: A Programme of Radical Reform for the 1960s (London: Jonathan Cape 1962). This is interesting, although Crosland believed it was inferior to negotiations carried out by free trade unions. Crosland wrote

In Germany, unlike Britain or the United States, we find a strong Left-wing pressure for direct participation in management; and this has found expression in the Mitbestimmung (‘co-determination’) experiment.

Under Mitbestimmung proper, which operates only in the coal and steel industries, the workers in each enterprise and the Trade Unions nominate between them half the members of the Supervisory Board (a part-time body which appoints the full-time Board of Management, and scrutinises and approves all major policy decisions). These worker-representatives not only participate fully (in theory) in the work of the Supervisory Board, but have the further right to nominate one members, the ‘Works Director’ (whose functions correspond roughly to those of a Personnel Director in a large British firm), to the full-time Board of Management.

Outside coal and steel, the workers in all firms of over a certain size nominate one-third of the Supervisory Board. They also elect a Works Council, which has certain co-management fights in personnel matters (wage-payments, hours, conditions of work, dismissals, etc.); and the Works Council and management are equally represented on a joint Economic Committee, which exists mainly for the transmission of information from management to workers.

This amounts to a very elaborate legal framework. But there are, of course, reasons external to industry for this constitutional approach: the German propensity to define and codify everything in legal terms, a tradition of legally-constituted Works Councils dating from early Weimar days, and above all, a powerful political motive. the German Left retains bitter memories of Krupp and Thyssen, and of the use of economic power for political ends. it was, at the end of Hitler’s war, determined to lever itself into a strategic position inside the actual governing councils of German industry, where it could ensure that industrial profits were never again used to finance a totalitarian political party.

In assessing the results of co-determination, we must notice first an incidental benefit: a marked humanisation of German management attitudes. Before the war, not only were German employers often feudal in outlook, but ‘personnel management’ in the Anglo-America sense was scarcely known. Today, the psychological effect of legal co-determination, and the practical effect of having worker-appointed Works Directors in two major industries, has been at once to liberalise employers’ attitudes and to direct attention to the importance of enlightened personnel policies.

How much actual power does co-determination give the German worker? The Works Councils have undoubtedly advanced his interests and increased his influence on all matters affecting working conditions in the plant. But, to be sure, they do nothing which goes beyond what shop-stewards or branch secretaries do in Britain in the course of their normal day-to-day negotiation with the management; and their power to influence management is certainly less than that of the unions in Britain or America.

At the level of higher management, representation in the Supervisory Board again gives the German unions a greater influence than they previously enjoyed over the personnel policies of the firm; but again, this is not as great as that wielded by British or American unions through collective bargaining from outside the managerial structure.

Moreover, with few exceptions, the workers’ delegates confine themselves to representing the workers’ interests in the traditional ‘collective bargaining’ field; that is, there is little participation in general management. This explains why many of the difficulties conventionally associated with workers’ management – the danger of divided loyalties, the difficulty of finding worker-representatives with experience of large-scale management, the apathy of the ordinary worker to the wider aspects of management – have not arise in an acute form. The worker co-managers have largely restricted themselves to the personnel field which they thoroughly understand; and within this field they have avoided split loyalties by accepting a first loyalty to the interests of the employees.

One should therefore see the German experiment less as an approach to workers’ management in the strict sense (for there is little participation in general decision-making) than as an attempt to gain additional bargaining representation for the workers – that is, to supplement the external bargaining strength of the unions with a Trojan horse of legal representation within the managerial structure. See in this light, co-determination was a sound policy for the post-war years. The bargaining position of the unions was weak; the mood of the workers was far from militant; and the continuous influx of refugees from the East meant a permanent buyer’s market for labour. Under these circumstances, it was a shrewd move to redress the balance by calling in the law and gaining formal representation inside the firm. This has without doubt increased the power of the unions at all levels; and it has done so more rapidly, and to a greater extent, than would have been possible under any alternative policy.

Yet this power is till less than that exercised by unions in other countries without attendant complications of co-determination. The German experience therefore does not invalidate the attitude of the British unions. Indeed, it may well be that as the autonomous power of the German unions increase, their interest in Mitbestimmung will diminish. (pp.220-222).

I can’t say that I don’t find this assessment disappointing. Nevertheless, the Austrians believed that their system had contributed to social peace, and the Germans talk about the realisation of the ideal of the ‘constitutional factory’. Meanwhile, successive British governments have done their best to destroy and marginalise the trade unions on this side of the North Sea. I think we do need a much stronger trade unions movement, allied with workers’ representation inside the factory through something like factory councils, or direct election to the management boards.

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One Response to “C.A.R. Crosland on German Co-Determination and Worker’s Representation”

  1. vondreassen Says:

    Reblogged this on vondreassen.

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