Book on Industrial Democracy in Great Britain

Ken Coates and Anthony Topham, Industrial Democracy In Great Britain: A Book of Readings and Witnesses for Workers Control (MacGibbon & Kee, 1968).

This is another book I got through the post the other day. It’s a secondhand copy, but there may also be newer editions of the book out there. As its subtitle says, it’s a sourcebook of extracts from books, pamphlets, and magazine and newspaper articles on workers’ control, from the Syndicalists and Guild Socialists of the late 19th and early 20th centuries, through the First World War, the General Strike and the interwar period, the demands for worker participation in management during the Second World War and in the industries nationalized by Clement Attlee’s 1945 Labour government. It also covers the industrial disputes of the 1950s and ’60s, including the mass mobilization of local trade unions in support of four victimized workers evicted from the homes by management and the Tories. These later extracts also include documents from the workers’ control movements amongst the bus workers and dockers, establishing works councils and laying out their structure, duties and operating procedure.

The book’s blurb reads

The issue of workers’ control in British industry is once more n the air. As a concept, as something still to be achieved, industrial democracy has a long and rich history in fields outside the usual political arenas. The newly-awakened movement that revives the wish to see workers given a voice in business affairs is, in this book, given its essential historical perspective. From the days of ‘wage-slavery’ we might at last be moving into a period of fully-responsible control of industry by those who make the wealth in this country. While this notion has generally been scoffed at – by working class Tories as much as members of the capitalist groups – there is now a formidable body of evidence and thought to give it substance and weight.

The editors’ theme is treated in four main sections: the first covers the years from 1900 to 1920, when people like Tom Mann, James Connolly, G.D.H. Cole were re-discovering ideas of syndicalism, industrial unionism, guild socialism and so on. The second traces the development of the shop stewards’ movement on the shop floors. Much of this material is especially interesting so far as the period 1941 – 45 is concerned. Section three deals with the nationalized industries’ relations to unions, and here the centre of interest lies in the relations between the unions and Herbert Morrison in the thirties and beyond. The last section deals with the re-invigorated growth of the post-war efforts to establish some form of workers’ control. It is the conviction of their editors that the movement they document so thoroughly has only just begun to develop seriously and it is therefore something that both business and political parties will have to take increasing account of. The book is both anthology and guide to one of the important issues of our time.

After the introduction, it has the following contents.

Section 1: Schools for Democrats
Chapter 1: Forerunners of the Ferment

1 Working Class Socialism: E.J.B. Allen
2. Industrial Unionism and Constructive Socialism: James Connolly
3. The Miners’ Next Step: Reform Committee of the South Wales Miners, 1912
4. Limits of Collective Bargaining: Fred Knee
5. Forging the Weapon: Tom Mann
6. The Servile State: Hilaire Belloc
7. Pluralist Doctrine: J.N. Figgis
8. The Spiritual Change: A.J. Penty
9. The Streams Merge?: M.B. Reckitt and C.E. Bechofer
10. Little Groups Spring Up: Thomas Bell

Chapter 2. Doctrines and Practice of the Guild Socialists

1.The Bondage of Wagery: S.G. Hobson and A.R. Orage
2. State and Municipal Wagery: S.G. Hobson and A.R. Orage
3. Collectivism, Syndicalism and Guilds: G.D.H. Cole
4 Industrial Sabotage: William Mellor
5 The Building Guilds: M.B. Reckitt and C.E. Bechhofer
6 Builders’ Guilds: A Second view: Raymond Postgate

Chapter 3 How Official Labour met the Guild Threat

1 Democracies of Producers: Sydney and Beatrice Webb
2 ‘… In no Utopian Spirit’: J. Ramsay MacDonald

Chapter 4 Eclipse of the Guilds and the Rise of Communism

1 In Retrospect: G.D.H. Cole
2 Revolution and Trade Union Action: J.T. Murphy
3 Action for Red Trade Unions: Third Comintern Congress, 1921

Section II: Shop Stewards and Workers’ Control; 1910-64

Chapter 1 1910-26

1 Shop Stewards in Engineering: the Forerunners: H.A. Clegg, Alan Fox, and E.F. Thompson
2 The Singer Factory: The Wobblies’ First Base: Thomas Bell
3 A Nucleus of Discontent: Henry Pelling
4 The Sheffield Shop Stewards: J.T. Murphy
5 The Workers’ Committee: J.T. Murphy
6 The Collective Contract: W. Gallacher and J. Paton
7 Politics in the Workshop Movement: G.D.H. Cole
8 The Shop Stewards’ Rules: N.S.S. & W.C.M.
9 The Dangers of Revolution: Parliamentary Debates H. of C.
10 What Happened at Leeds: the Leeds Convention 1917
11 A Shop Stewards’ Conference: Thomas Bell
12 After the War: Dr B. Pribicevic
13 An Assessment: Dr B. Pribicevic
14 Prelude to Unemployed Struggles: Wal Hannington
15 Defeat; The 1922 Lock-out: James B. Jefferys
16 Shop Stewards on the Streets: J.T. Murphy
17 T.U.C. Aims: T.U.C. Annual Report 1925
18 ‘The Death Gasp of that Pernicious Doctrine’: Beatrice Webb

Chapter 2 1935-47

1 ‘… The Shop Stewards’ Movement will Re-Appear’: G.D.H. Cole
2 Revival; The English Aircraft Strike: Tom Roberts
3 London Metal Workers and the Communists: John Mahon
4 The Communists’ Industrial Policy: CPGB 14th Congress, 1937
5 ‘… A Strong Left Current’; John Mahon
6 Shop Stewards against Government and War: National Shop-Stewards’ Conference, 1940
7 The A.E.U. and the Shop Stewards’ Movement: Wal Hannington
8 For Maximum Production: Walter Swanson and Douglas Hyde
9 Joint Production Committees: Len Powell
10 The Employers Respond: Engineering Employers’ Federation
11 How to get the Best Results: E & A.T.S.S.N.C.
12 The Purpose of the Joint Production Committees: G.S. Walpole
13 A Dissident Complaint: Anarchist Federation of Glasgow, 1945
14 The Transformation of Birmingham: Bert Williams
15 Factory Committees; Post-War Aims: J.R. Campbell
16 After the Election: Reg Birch
17 Official View of Production Committees: Industrial Relations Handbook
18 Helping the Production Drive: Communist Party of Great Britain

Chapter 3 1951-63

1 Post-war Growth of Shop Stewards in Engineering: A.T. Marsh and E.E. Coker
2 Shop-Steward Survey: H.A. Clegg, A.J. Killick and Rex Adams
3 The Causes of Strikes: Trades Union Congress
4 The Trend of Strikes: H.A. Turner
5 Shop-Stewards and Joint Consultation: B.C. Roberts
6 Joint Consultation and the Unions: Transport and General Workers’ Union
7 Strengths of Shop-Steward Organisation: H.M.S.O.
8 Activities of Shop-Stewards: H.M.S.O.
9 Local Bargaining and Wages Drift: Shirley Lerner and Judith Marquand
10 The Motor Vehicle Industrial Group and Shop-Stewards’ Combine Committees: Shirley Lerner and Judith Marquand
11. Ford Management’s view of Management: H.M.S.O.
12. The Bata Story: Malcolm MacEwen
13 Fight against Redundancy: Harry Finch
14 How They Work the Trick: Ford Shop Stewards
15 I work at Fords: Brian Jefferys
16 The Origins of Fawley: Allan Flanders
17 Controlling the Urge to Control: Tony Topham

Section III: Industrial Democracy and Nationalization

Chapter 1 1910-22

1 State Ownership and Control: G.D.H. Cole
2 Towards a Miner’s Guild: National Guilds League
3 Nationalization of the Mines: Frank Hodges
4 Towards a National Railway Guild: National Guilds League
5 Workers’ Control on the Railways: Dr B. Pribicevic
6 The Railways Act, 1921: Philip Bagwell

Chapter 2 1930-35

1 A Re-Appraisal: G.D.H. Cole
2 A works Council Law: G.D.H. Cole
3 A Fabian Model for Workers’ Representation: G.D.H. Cole and W. Mellor
4 Herbert Morrison’s Case: Herbert Morrison
5 The Soviet Example: Herbert Morrison
6 The T.U.C. Congress, 1932: Trades Union Congress
7 The Labour Party Conference, 19332: The Labour Party
8 The T.U.C. Congress, 1933: Trades Union Congress
9 The Labour Party Conference, 1933: The Labour Party
10 The Agreed Formula: The Labour Party

Chapter 3 1935-55

1 The Labour Party in Power: Robert Dahl
2 The Coal Nationalization Act: W.W. Haynes
3 George Brown’s Anxieties: Parliamentary Debates H. of C.
4 Cripps and the Workers: The Times
5 Trade Union Officials and the Coal Board: Abe Moffatt
6 Acceptance of the Public Corporation: R. Page Arnot
7 No Demands from the Communists: Emmanuel Shinwell
8 We Demand Workers’ Representation: Harry Pollitt
9 The N.U.R. and Workers’ Control: Philip Bagwell
10 The Trade Unions take Sides: Eirene Hite
11 Demands for the Steel Industry: The Labour Party
12 The A.E.U. Briefs its Members: Amalgamated Engineering Union
13 Making Joint Consultation Effective: The New Statesman
14 ‘Out-of-Date Ideas’: Trades Union Congress
15 A Further Demand for Participation: The Labour Party

Chapter 4 1955-64

1 Storm Signals: Clive Jenkins
2 The Democratization of Power: New Left Review
3 To Whom are Managers Responsible?: New Left Review
4 Accountability and Participation: John Hughes
5 A 1964 Review: Michael Barratt-Brown

Section IV: The New Movement: Contemporary Writings on Industrial Democracy

Chapter 1 The New Movement: 1964-67

1 A Retreat: H.A. Clegg
2 ‘We Must Align with the Technological Necessities…’ C.A.R. Crosland
3 A Response: Royden Harrison
4 Definitions: Workers’ Control and Self-Management: Ken Coates
5 The New Movement: Ken Coates
6 The Process of Decision: Trades Union Congress
7 Economic Planning and Wages: Trades Union Congress
8 Seeking a Bigger Say at Work: Sydney Hill
9 A Plan for a Break-through in Production: Jack Jones
10 A Comment on Jack Jones’ Plan: Tony Topham
11 Open the Books: Ken Coates
12 Incomes Policy and Control: Dave Lambert
13 Watch-dogs for Nationalized Industries: Hull LEFT
14 Revival in the Coal Industry: National Union of Mineworkers
15 Workers’ Control in Nationalized Steel Industry: The Week
16 Workers’ Control in the Docks: The Dockers’ Next Step: The Week
17 The Daily Mail Takes Notes: The Daily Mail
18 Labour’s Plan for the Docks: The Labour Party
19 Municipal Services: Jack Ashwell
20 The Party Programme: The Labour Party
21 Open the Shipowners’ Books!: John Prescott and Charlie Hodgins
22 A Socialist Policy for the Unions. May Day Manifesto

The book appropriately ends with a conclusion.

The book is clearly a comprehensive, encyclopedic treatment of the issue of workers’ control primarily, but not exclusively, from the thinkers and workers who demanded and agitated for it, and who occasionally succeeded in achieving it or at least a significant degree of worker participation in management. As the book was published in 1968, it omits the great experiments in worker’s control and management of the 1970s, like the Bullock Report, the 1971 work-in at the shipbuilders in the Upper Clyde, and the worker’s co-ops at the Scottish Daily News, Triumph of Meriden, Fisher Bendix in Kirkby, and at the British Aircraft Company in Bristol.

This was, of course, largely a period where the trade unions were growing and had the strength, if not to achieve their demands, then at least to make them be taken seriously, although there were also serious setbacks. Like the collapse of the 1922 General Strike, which effectively ended syndicalism in Great Britain as a mass movement. Since Thatcher’s victory in 1979 union power has been gravely diminished and the power of management massively increased. The result of this has been the erosion of workers’ rights, so that millions of British workers are now stuck in poorly paid, insecure jobs with no holiday, sickness or maternity leave. We desperately need this situation to be reversed, to go back to the situation where working people can enjoy secure, properly-paid jobs, with full employments rights, protected by strong unions.

The Tories are keen to blame the unions for Britain’s industrial decline, pointing to the disruption caused by strikes, particularly in the industrial chaos of the 1970s. Tory propaganda claims that these strikes were caused by irresponsible militants against the wishes of the majority of working people. You can see this view in British films of the period like Ealing’s I’m All Right Jack, in which Peter Sellars played a Communist union leader, and one of the Carry On films set in a toilet factory, as well as the ’70s TV comedy, The Rag Trade. This also featured a female shop-steward, who was all too ready to cry ‘Everybody out!’ at every perceived insult or infraction of agreed conditions by management. But many of the pieces included here show that these strikes were anything but irresponsible. They were a response to real exploitation, bullying and appalling conditions. The extracts dealing with the Ford works particularly show this. Among the incidents that provoked the strike were cases where workers were threatened by management and foremen for taking time off for perfectly good reasons. One worker taken to task by his foreman for this had done so in order to take his sick son to hospital.

The book shows that workers’ control has been an issue for parts of the labour movement since the late nineteenth century, before such radicalism because associated with the Communists. They also show that, in very many cases, workers have shown themselves capable of managing their firms.

There are problems with it, nevertheless. There are technical issues about the relative representation of unions in multi-union factories. Tony Benn was great champion of industrial democracy, but in his book Arguments for Socialism he argues that it can only be set up when the workers’ in a particular firm actually want, and that it should be properly linked to a strong union movement. He also attacks token concessions to the principle, like schemes in which only one workers’ representative is elected to the board, or works’ councils which have no real power and are outside trade union control or influence.

People are becoming increasingly sick and angry of the Tories’ and New Labour impoverishment and disenfranchisement of the working class. Jeremy Corbyn has promised working people full employment and trade union rights from the first day of their employment, and to put workers in the boardroom of the major industries. We desperately need these policies to reverse the past forty years of Thatcherism, and to bring real dignity and prosperity to working people. After decades of neglect, industrial democracy is back on the table by a party leadership that really believes in it. Unlike May and the Tories when they made it part of their elections promises back in 2017.

We need the Tories out and Corbyn in government. Now. And for at least some of the industrial democracy workers have demanded since the Victorian age.

Fabian Pamphlet on the Future of Industrial Democracy : Part 1

The Future of Industrial Democracy, by William McCarthy (London: Fabian Society 1988).

A few days ago I put up a piece about a Fabian Society pamphlet on Workers’ Control in Yugoslavia, by Frederick Singleton and Anthony Topham. This discussed the system of workers’ self-management of industry introduced by Tito in Communist Yugoslavia, based on the idea of Edvard Kardelj and Milovan Djilas, and what lessons could be learnt from it for industrial democracy in Britain.

William McCarthy, the author of the above pamphlet, was a fellow of Nuffield College and lecturer in industrial relations at Oxford University. From 1979 onwards he was the Labour party spokesman on employment in the House of Lords. He was the author of another Fabian pamphlet, Freedom at Work: towards the reform of Tory employment law.

The pamphlet followed the Bullock report advocating the election of workers to the management board, critiquing it and advocating that the system should be extended to firms employing fewer than the thousands of employees that were the subject of reforms suggested by Bullock. The blurb for the pamphlet on the back page runs

The notion of industrial democracy – the involvement of employees in managerial decisions – has been around at least since the time of the Guild Socialists. However, there has been little new thinking on the subject since the Bullock Committee reported in the 1970s. This pamphlet redresses this by re-examining the Bullock proposals and looking at the experience of other European countries.

William McCarthy outlines the three main arguments for industrial democracy:
* it improves business efficiency and performance;
* most workers want a greater say in their work environment;
* a political democracy which is not accompanied by some form of industrial power sharing is incomplete and potentially unstable.

He believes, however, that the emphasis should no longer be on putting “workers in the boardroom.” Instead, he argues that workers ought to be involved below the level of the board, through elected joint councils at both plant and enterprise levels. These councils would have the right to be informed about a wide range of subjects such as on redundancies and closures. Management would also be obliged to provide worker representatives with a full picture of the economic and financial position of the firm.

William McCarthy argues that Bullock’s plan to limit worker directors to unionised firms with over 2,000 workers is out of date. it would exclude over two thirds of the work force and would apply only to a steadily shrinking and increasingly atypical fraction of the total labour force. As the aim should be to cover the widest possible number, he advocates the setting up of the joint councils in all private and public companies, unionised or otherwise, that employ more than 500 workers.

In all cases a majority of the work force would need to vote in favour of a joint council. This vote would be binding on the employer and suitable sanctions would be available to ensure enforcement.

Finally, he believes that this frame of industrial democracy would allow unions an opportunity to challenge their negative and reactionary image and would demonstrate the contribution to better industrial relations and greater economic efficiency which can be made by an alliance between management, workers and unions.

The contents consist of an introduction, with a section of statutory rights, and then the following chapters.

1: The Objectives of Industrial Democracy, with sections on syndicalism, Job Satisfaction and Economic and Social Benefits;

2: Powers and Functions, with sections on information, consultation, areas of joint decision, union objection, and co-determination;

3: Composition and Principles of Representation, with sections on selectivity, the European experience, ideas and legal framework.

Chapter 4: is a summary and conclusion.

The section on Syndicalism gives a brief history of the idea of industrial democracy in Britain from the 17th century Diggers during the British Civil War onwards. It says

The first of these [arguments for industrial democracy – employee rights] is as old as socialism. During the seventeenth century, Winstanley and the Diggers advocated the abolition of landlords and a system of production based on the common ownership of land. During the first half o the 19th century, Marx developed his doctrine that the capitalist system both exploited and “alienated” the industrial workers, subjecting them to the domination of the bourgeoisie who owned the means of production. Under capitalism, said Marx, workers lost all control over the product of their labour and “work became a means to an end, rather than an end to itself” (see Philosophy and Myth in Karl Marx, R. Tucker, Cambridge University Press, 1961). During the latter half of the nineteenth century, Sorel and his followers developed the notion of “revolutionary syndicalism” – a form of socialism under which the workers, rather than the state, would take over the productive resources of industry. Syndicalists were influential in Europe and America in the years before the First World War. They advocated industrial action, rather than the use of the ballot box, as a means of advancing to socialism (see The Wobblies, P. Renshaw, Eyre & Spottiswoode, 1967).

In Britain, syndicalism came to adopt a more constitutionalist form with the formation of the guild socialists. They did not reject the use of parliamentary action, but argued that a political democracy which was not accompanied by some form of industrial power sharing was incomplete and potentially unstable. This was the basic argument of their most distinguished theoretician, G.D.H. Cole. In more recent times a trenchant restatement of this point of view can be found in Carole Pateman’s Participation and Democratic Theory (Cambridge: Cambridge University Press, 1970).

In his earliest writing Cole went as far as to argue that socialism required that that “the workers must election and control their managers”. As he put it “In politics, we do not call democratic a system in which the proletatiat has the right to organise and exercise what pressure it can on an irresponsible body of rulers: we call it a modified aristocracy; and the same name adequately describes a similar industrial structure” (The World of Labour,Bell, 1913).

Subsequently Cole came to feel that continued existence of a private sector, plus the growth of collective bargaining, required some modification of the syndicalist doctrine behind Guild Socialism. By 1957, he was arguing for workers to be given “a partnership status in private firms, “sharing decisions” with the appropriate level of management C The Case for Industrial Partnership, MacMillan, 1957. This is very much the position advanced by Carole Pateman after her critique of more limited theories of democracy-eg those advanced by Schumpeter and others. These “minimalist” democrats took the view that in the context of the modern state, the most one could demand of a democracy was that it should provide a periodic electoral contest between two competing political elites. After reviewing examples of industrial democracy at work in a number of countries Pateman concluded “…it becomes clear that neither the demands for more participation, not the theory of participatory democracy itself, are based, as is so frequently claimed, on dangerous illusions or on an outmoded and unrealistic theoretical foundation. We can still have a modern, viable theory of democracy which retains the notion of participation at its heart.” (op. cit.)

Continued in Part 2, which will cover the sections on the pamphlet ‘Ideas’ and ‘Legal Framework’.

Fabian Pamphlet on Workers’ Control in Yugoslavia: Part 1

I’ve put up several pieces about workers’ control and industrial democracy, the system in which the workers in a particular firm or industry have their representatives elected on to the board of management. It was particularly highly developed in Communist Yugoslavia, following the ideas of Milovan Djilas and Edvard Kardelj, and formed an integral part of that country’s independent Communist system following the break with Stalin and the Soviet-dominated Comintern in 1948.

In 1963 the Fabian Society published the above pamphlet by Frederick Singleton, a lecturer on Geography and International Affairs in the Department of Industrial Administration at the Bradford Institute of Technology, and Anthony Topham, a staff tutor in Social Studies in the Adult Education department of Hull University.

The pamphlet had the following contents.

Chapter 1 was on Political Structure, and contained sections on the Communist Assumption of Power, the 1946 Constitution, the 1953 Constitution, and the Policy of the League of Communists.

Chapter 2: Economic Planning, had sections on the Legacy of the Past, From Administration to Fiscal Planning, Autonomy for the Enterprise, the Investment System, and Recent Developments.

Chapter: The Working Collective, has sections on the Workers’ Council, the Managing Board, the Director, Departmental Councils, Economic Units, the Disposal of Funds by Economic Units, Allocation of Personal Income, Structure and Role of the Trade Unions, the Right to Strike, Education for Workers’ Self-Management, Workers’ Universities, Worker’s Management in Action: Decision Making, Structure of a Multi-Plant Enterprise, and Incentives or Democracy: the Problem of Motive.

The final chapter, was the Conclusion, which considered the lessons the system had for Britain. It ran:

In considering the lessons which British socialists may draw from the Yugoslav experience, we must not lose sight of the different nature of our two societies and the disparity in levels of industrial development. But it is also relevant to ask how far the ideas of workers’ control could, with the stimulus of the Yugoslav experience, become a truly popular element of British Labour policy. It is true that, with the Yugoslav exception, past experience of this form of Socialism has been inconclusive and fragmentary. Usually, it has been associated with periods of revolutionary fervour such as the Paris Commune of 1871, the Catalan movement during the Spanish Civil War, and the factory Soviets of Russia in 1917-18. The experience of Owenite Utopian communities in this and other countries is misleading, in that they existed as small and vulnerable enclaves in a basically hostile society. On the other hand, there is an authentic tradition within the British Labour movement, represented by the early shop stewards’ movement, the Guild Socialists and Industrial Unionists, upon which we can draw. The Fabian tradition too, is not exclusively centralist or bureaucratic. In the 1888 volume of Fabian essays, Annie Besant raised the question of decentralisation. She did not believe that ‘the direct election of the manager and foreman by the employees would be found to work well’, but she advocated control of industry ‘through communal councils, which will appoint committees to superintend the various branches of industry. These committees will engage the necessary managers and foremen for each shop and factory.’ The importance attached to municipal ownership and control in early Fabian writings is related to the idea of the Commune, in the government of which the workers have a dual representation as consumer-citizens and as producers. This affinity to Yugoslav Commune government is even more marked in the constitutions evolved in Guild Socialist writings.

The history of the progressive abandonment of these aims, and the adoption of the non-representative Public Corporation as the standard form for British Socialised undertakings, is well known. Joint consultation, which was made compulsory in all nationalised industries, became the only instrument of workers’ participation. Yet the problem of democracy in industry is one which should be of great concern to the British socialist. It must surely be apparent that the nationalised industries have failed to create amongst the mass of their workers a feeling of personal and group responsibility. Even in the most ‘trouble-free’ gas and electricity industries, there is little real enthusiasm for the present system of worker-management relations. Nationalisation may have appeared to the Labour government to have solved the problems of the industries concerned. But the experience of the workers in these industries has not confirmed this. They found that joint consultation between managers and unions leaders plus vaguely defined parliamentary control did not create anything resembling industrial democracy. Had it done so, there would have been much stronger popular resistance to the anti-nationalisation propaganda which was so successful in the years preceding the 1959 election.

We therefore feel that the basic aim of the Yugoslavs is one which has validity for our own situation, and we conclude with some observations on the British situation suggested by an acquaintance with the Yugoslav system.

The Problem of Scale

The forms of economic organisation and management which have been evolved by the Yugoslavs are unique, and a study of them provides a valuable stimulus to those who seek ‘a real understanding of a scheme of workers’ control that is sufficiently comprehensive to operate over an entire industry, from top to bottom, and through the whole range of activities’. However, as the scale of production grows, the problem of ensuring that democratic control extends beyond primary groups such as Economic Units through the intermediate levels to the central management of the firm and the industry, becomes more and more difficult. There is a strong body of opinion which believes that schemes of workers’ control must ultimately founder in the context of modern large-scale production. The small, multi-firm industries of the Yugoslav economy make democratic control less difficult than in a highly developed industrial society such as our own.

But questions, which should be asked in relation to our own economy are: how far could the nationalised industries be broken down into the smaller, competing units, without serious loss of efficiency? How far is the growth in the average size of firm (as opposed to scale of production units) the outcome of purely commercial and power considerations, rather than concern for increased efficiency through economies of scale? How far have we been misled by the mystique of managerial skill into accepting the necessity of autocratic control by the managers in both private and public industries? After all, the principle of lay control over salaried experts is the normal and accepted principle in national and local government, and within the Co-operative movement. The decisions in these fields are no less complex and ‘technical’ than in industry. Where lay control in local Councils and Co-operative Management Boards is more apparent than real, how far is this due to the prevailing faith in technology, which makes us reluctant to transform the contribution of the elected representatives by a thorough and enthusiastic education programme of the kind found in the Yugoslav Workers’ Universities?

In the conditions of modern industry, decisions taken by line managers and directors are frequently a matter of choosing between alternative course the consequences of which have been calculated by technical staffs. Such decisions are of a social and political, rather than a technical nature, i.e. they are precisely the sort of decisions which should be undertaken by democratic bodies. These factors should be borne in mind when examining the conclusions of some writers that, whilst the Yugoslav experience is interesting, and may have relevance for countries at a similar stage of industrialisation, it has little bearing on the problems of advanced industries societies.

Continued in Part 2.

Fabian Pamphlet on Workers’ Control In Yugoslavia: Part 3 – My Conclusion

Continued from Part 2.

In parts 1 and 2 of this post I described the contents of the above Fabian pamphlet on Workers’ Control in Yugoslavia, by Frederick Singleton and Anthony Topham, published in 1963.

The authors attempted to show how, despite a very lukewarm attitude to the idea at the time, workers’ control could be a viable possibility for British industry. The authors’ noted that the very limited gesture towards worker participation in the nationalised industries had not gained the enthusiasm of the workforce, and in the previous decade the Tories had had some success in attacking the nationalised industries and nationalisation itself.

They argued that there was a tradition within the British Labour movement for workers’ control in the shape of the Guild Socialists and Industrial Unionism. The Fabians, who had largely advocated central planning at the expense of industrial democracy, had nevertheless put forward their own ideas for it. Annie Besant, the Theosophist and feminist, had argued that the workers in an industry should elect a council, which would appoint the management and foreman. This is quite close to the Yugoslav model, in which enterprises were governed through a series of factory boards elected by the workers, which also exercised a degree of control over the director and management staff.

The pamphlet was clearly written at a time when the unions were assuming a role of partnership in the nationalised industries, and had agreed to pay pauses. These were a temporary break in the round of annual pay rises negotiated by the government and management as a means of curbing inflation. This actually runs against Tory rhetoric that Britain was exceptionally beset by strikes – which has been challenged and rebutted before by British historians of the working class – and the unions were irresponsible.

The role of the factory or enterprise council in taking management decisions, rather than the trade unions in Yugoslav worker’s control also means that the trade unions could still preserve their independence and oppositional role, working to defend the rights of the workforce as a whole and present the grievances of individual workers.

The two authors acknowledge that there are problems of scale involved, in that the Yugoslav system was obviously developed to suit conditions in that nation, where there was a multiplicity of small enterprises, rather than the much larger industrial concerns of the more developed British economy. But even there they suggest that these problems may not be insuperable. Management now consists of selecting for one out of a range of options, that have already been suggested by technical staff and planners, and the experience of the co-operative movement has shown that firms can be run by elected boards. Much of the idea that management can only be effectively performed by autocratic directors or management boards may actually be just a myth that has developed to justify the concentration of power in their hands, rather than allow it to be also held by the workers.

They also note that the Yugoslav model also shows that the participation of workers in industrial management can lead to greater productivity. Indeed, the South Korean economist and lecturer, Ha-Joon Chang, in his books has shown that those industries which are wholly or partly owned by the state, or where the workers participate in management, are more stable and long-lasting than those that are run purely for the benefit of the shareholders. This is because the state and the workforce have a vested commitment to them, which shareholders don’t have. They will abandon one firm to invest in another, which offers larger dividends. And this has meant that some firms have gone bust selling off valuable assets and downsizing simply to keep the shares and, correspondingly, the managers’ salaries, artificially high.

They also present a good argument for showing that if workers’ control was implemented, the other parties would also have to take it up and preserve it. At the time they were writing, the Liberals were talking about ‘syndicalism’ while the Tories promised an Industrial Charter. This never materialised, just as Theresa May’s promise to put workers on the boards of industry was no more than hot air.

But some indication of how popular genuine worker participation in management might be is also shown, paradoxically, by Thatcher’s privatisations in the 1980s. Thatcher presented herself falsely as some kind of heroine of the working class, despite the fact that she was very solidly middle, and personally had nothing but contempt for the working class and working class organisations. Some of that image came from her talking about her background as the daughter of a shopkeeper. Another aspect was that in her privatisation of the utilities, she tried to persuade people that at last they too could be shareholders in industry. This was not only to the general public, but also to workers in those industries, who were offered shares in the newly privatised companies.

This experiment in popular capitalism, just like the rest of Thatcherism, is a total colossal failure. Newspaper reports have shown that the shares have largely passed out of the hands of working class shareholders, and are now back in the hands of the middle classes. As you could almost predict.

But the process does show how what popularity it initially had depended on Thatcher stealing some of the ideological guise for privatisation from Socialism. She had to make it seem that they would have a vested interest in their industries, albeit through holding shares rather than direct participation in management. She had no wish to empower the workers, as is amply shown by her determination to break the unions and destroy employees’ rights in the workplace. But her programme of popular capitalism depended on making it appear they would gain some position of power as individual shareholders.

The performance of the utilities following privatisation has shown that they are not better off under private management, regardless of the bilge spewed by the Tories and the Blairites in the Labour party. Under private management, these vital industries have been starved of investment, while the managers’ salaries and share price have been kept high again through cuts and increased prices. It is high time they were renationalised. And the nation knows this, hence the popularity of Jeremy Corbyn’s Labour party.

And it’s possible that, if it was done properly, the incorporation of a system of worker participation in the management of these industries could create a real popular enthusiasm for them that would prevent further privatisation in the future, or make it more difficult. Who knows, if it had been done properly in the past, perhaps we would now have a proper functioning steel and coal industry, as well as the other vital services like rail, electricity, gas and water.