Capital Investment Funds for Trade Unions on the Continent

Also in Ben Hooberman’s book, An Introduction to British Trade Unions, is a discussion of a fascinating scheme launched in Denmark to allow the unions to build up a 50% investment fund in industry. Hooberman writes

The Danish trade unions have adopted a programme for a wage earners’ national profit and investment fund. The principle behind it appears to be a form of profit-sharing in which wage earners in private and public employment would be given a share in the capital growth of industry. Employers would contribute 1 per cent of their wages bill in the first year and increase their contribution by 1/2 per cent annually until a fifty per cent contribution is made to the fund each year. It is proposed that the fund should be controlled and administered by the trade unions themselves. The object of the proposal is to create for trade unions a means of controlling capital in industry in the same way as they influence the level of wages and conditions of employment. In both West Germany and France there are in existence means for the payment of ‘investment wages’ to workers. Both the German and French schemes began with legislation; in Germany tax concessions are granted to workers involved in voluntary capital-sharing arrangements, while in France the statutory capital entitlement is calculated directly from annual profits. (P. 74).

This is a fascinating scheme, as if it were logically carried to its conclusion, it would give workers an equal share in industrial capital through the mechanism of capitalism itself. With the systems of works councils recommended by the TUC and EU, it’s more evidence just why Thatcher and the rest of the Tory Right were so frightened of organised labour. And they clearly still are, given by their continuing attempts to destroy the unions.

The continental nature of these proposals also explains why the Tory Euro-sceptics bitterly hate the EU and its Social Charter. It also explains why Thatcher got her knickers in a twist about ‘patriotism’ versus ‘Socialism’, and declared Socialism to be a nasty foreign doctrine. This is ridiculous. Trade Unions first appeared in England, as did the co-operative movement, so certain parts of Socialism are British in origin. And if we’re talking about foreign ideas, so it modern democracy and human rights, come to that. The Rights of Man were first articulated during the French Revolution, and the ideas about free trade espoused by Adam Smith were pioneered by French writers discussing the problems of the agricultural economy in 18th century France. Thatcher’s ideas on this point don’t make much sense, but then, there is so little in Maggie’s ideology that does.

1916 Whitley Committee on Involving Unions in Industrial Management

Hooberman in ‘An Introduction to British Trade Unions’ also discusses the 1916 Commission on the Relations between Employers and Employed, chaired by J.H. Whitley, which recommended that a system of industrial councils be set up, which brought representatives of management together with those of the employees, and that their should also be similar committees set up in the individual workplaces, as well as a special court to arbitrate labour disputes. Justifying these joint industrial councils, the Commission’s report stated:

… a permanent improvement in the relations between employers and employed must be founded upon something other than a cash basis. What is wanted is that the work people should have a greater opportunity to participating in the discussion about and adjustment of those parts of industry by which they are most affected… We venture to hope that representative men in each industry, with pride in their calling and care for its place as a contributor to the national well-being, will come together in the manner here suggested, and apply themselves to promoting industrial harmony and efficiency and removing the obstacles that have hitherto stood in the way. (P. 63).

In fact, with the exception of the civil service, these proposals did not long outlive the First World War. The unions for their part resented the limitations they placed on collective bargaining. There were attempts to revive the system in 1970s with the NEDCs, but these also failed through the failure of the unions to abide by the demands for pay restraint. This was a major factor in the Winter of Discontent, and the rise of Thatcher, although some historians have said that the blame here does not lie with the unions, who were being asked to fulfil a function which was not theirs, and which was too much of them.

The Tories have since then done their best to curb union membership and the power of the trade unions. Nevertheless, the arguments for workers participation in management is a good one.

1970s TUC Report for Worker Participation in Management

I’ve put up several pieces arguing for works’ councils, and that workers should be represented in the management of the industries in which they are employed. According to Ben Hooberman’s An Introduction to British Trade Unions, this was also a policy endorsed and recommended by the TUC in its 1971 conference.

The 1971 Congress adopted a resolution reaffirming its belief that an essential function of the trade union movement was to secure for workers and their unions a continually increasing measure of control over their work situation. The resolution instructed the General Council to ensure that all policies advanced on behalf of the TUC promoted industrial democracy and urged the General Council to give active support to the development of direct participation by public service workers. The TUC published an interim report called ‘Industrial Democracy’, which was adopted by the 1973 Congress. the report recommended that the draft European Company Statute should be amended to provide for the number of worker representatives on the supervisory board to be increased to 50 per cent instead of one third of the Board. It also took the view that the draft Fifth Directives on company law proposed by the Common Market Commission was acceptable for British companies provided that the trade unions appointed representatives to the Board and that there should be a reduction in the minimum size of company to which to which the directive applied from 500 to 200 workers. (p.34.)

This incidentally also adds further evidence that what really frightens BoJo, Gove, Patel and the rest of the parasites and numbskulls forming the Brexit campaign isn’t the EU superstate so much as the protection it gives European workers under the Social Charter, and the power it once offered. Owen Jones in his book, Chav: The Demonisation of the Working Class, notes that Thatcher was never working class, didn’t know any trade unionists, and regarded the working class as treacherous.

1968 Government Commission: Shop Stewards Not Trouble-Makers

The Conservatives have long demonised the trade unions for the decline of British industry. It’s due to the unions, they argue, that British industry was strike-bound, inefficient and uncompetitive. Since Maggie Thatcher they have been deliberately attempting to destroy their power by creating obstacles to union membership and by increasingly restricting the power of the unions to call strikes.

In the 1960s the government set up the Royal Commission on Trade Unions and Employer’s Associations, which became known as the Donovan Commission, after its head. This took the view that some government intervention to force trade union activity into proper legal channels was necessary. However, its 1968 report stated that by and large, union shop stewards were not mischief-makers, and were dealing with genuine grievances.

Ben Hooberman, in his An Introduction to British Trade Unions (Harmondsworth: Penguin 1974) states

The Donovan Commission stated that it was usually inaccurate to describe shop stewards as ‘trouble-makers’, that there was evidence that trouble was thrust upon them and that they attempted to bring some order into a chaotic situation, and that management relied heavily on their efforts. Often shop stewards advise their members against taking unofficial strike action; they are rarely agitators and they attempt to keep their members with the bounds of constitutional action. It is the shop stewards who will prevail upon the union to call a strike or to ratify if it if it has broke out without official sanction by the governing body of the union. (p. 27).

So much for the image of the bolshy shop steward, like Peter Seller’s character in the Ealing Comedy, I’m Alright, Jack.