Posts Tagged ‘Iron Industry’

Labour’s Foundation of the NHS and the Welfare State

December 18, 2018

Every now and then the Tories try to claim that Labour did not found the welfare state. They either claim that they did, or they try to minimize Labour’s role in its foundation by concentrating instead on the fact that it was based on the proposals made by Lord Beveridge in his report of 1943. But the NHS was effectively founded by Nye Bevan, who became the minister responsible for its establishment under Clement Attlee. Furthermore, the ultimate origins of the welfare state and NHS lay with the Webb’s minority report on the state of healthcare in Britain in 1906. The Socialist Medical Association demanded a socialized system of healthcare in the 1930s, and this was taken up by the Labour party. The Fabian Society in this period also produced a series of reports arguing for the establishment of what would be known as the NHS. Francis Williams, in his biography of Ernest Bevin, another minister in that great Labour government, also describes this process. He writes of the Labour party in the 1930’s

To most of its opponents at this time the Labour party seemed to be wasting its time on producing a whole series of policy reports which stirred little public interest and which seemed unlikely to have any practical administrative significance. In fact, however, these policy reports which, beginning with ‘Currency, Banking and Finance’, went on to ‘The Land and the National Planning of Agriculture’, ‘The Reorganisation of the Electricity Supply Industry” and ‘National Planning of Transport’ (all completed within two years of the 1931 defeat) and, continuing therefore, year after year, on almost every aspect of national policy including coal, iron and steel, a National Health Service, Education, Pensions, Unemployment, Industrial Insurance, Housing and Colonial Development, provided the party with the practical programme on which it eventually secured a parliamentary majority and laid for the foundations for the packed legislative programme of 1945 to 1950. (Williams, Ernest Bevin (London: Hutchinson 1952), pp. 182-3).

Now the NHS and the welfare state is being threatened by the Tories, the Lib Dems, and the Blairites. The present Labour leader, Jeremy Corbyn, has pledged to restore the welfare state, renationalize the NHS, as well as part of the electricity grid, water and the railways. This is all very much needed, and it’s very far from being some kind of Communist programme, as the hysterical press and BBC would like us all to believe. It’s simply a partial return to the programme of the 1945 Labour government, which gave the country over three decades of prosperity and economic growth before the election of Thatcher.

Thatcher’s policies of privatization, the decimation of the welfare state and the privatization of the NHS has resulted in mass poverty. It has increasingly been shown to be threadbare. If Britain’s working people are to be given proper jobs, proper rights at work, continuing free healthcare and a genuinely fair provision for their old age, sickness and disability, we have to go back to the old Labour programme of the ’30s and ’40s, and get May and her profiteers and murderers out, and Corbyn in.

The Nazis’ Promotion of Private Business and Businessmen as the Elite

November 17, 2018

Robert A. Brady provides further evidence of the capitalist nature of Nazism in his book, The Spirit and Structure of German Fascism (London: Victor Gollancz 1937) by pointing out how the Nazis promoted private industry and businessmen as part of the biological elite, who were entitled to positions of leadership. They also embarked on a campaign of privatization of state enterprises, and promoted to positions of leadership in the economic direction of the state private businessmen, even when the majority of enterprises in that particular sector of the economy were state owned. And finally, the German law the Nazis used to promote their management of industry was that which recognized the management of private property for public use, as against proper socialized or nationalized industry.

Brady points out that the businessmen and functionaries who joined the Advisory Council of the National Economic Chamber had to take an oath to serve the Fuhrer and National Chancellor, which meant Hitler in the two offices he occupied, the goals of the National Socialist party, the Third Reich and the construction of the people’s community. (p. 265). But he also quotes Hitler’s economics minister, Hjalmar Schacht, who declared that businessmen were indispensable to the Nazi system, as was free competition.

“We cannot dispense with the economic willing of individual business leaders and workers,” Schacht said. To do so, he held, would be to destroy “the creative power” of the people. The function of business enterprise is to release this creative power on behalf of the nation. “Under no circumstances,” he continued, “shall we destroy the multifarious individual character of our economic system. For all time to come we shall need the independent employer who, for better or worse,, is connected with his enterprise.” In other words, businessmen in the new Germany are to be given free rein to function as before, except now they must be “honest” in the sense that they must not resort to “unfair” tactics to achieve corporate ends. (pp. 265-6).

He further quotes Schacht as saying, “We cannot get along without an honest struggle of competition”. (p. 266).

He makes it also clear that the German business community were also able to name the Nazi functionaries appointed to lead the various state planning organisations controlling private industry. He writes

Since the whole Nazi philosophy necessarily calls for this apotheosis of bourgeois and capitalistic virtues, it is only natural that when they were presented with an opportunity to shape organization more nearly after the pattern of their hearts’ desire the business men should also be able to name their controlling staff of “Leaders.” And such has been the case. In all the literature published by business organisations, and of all the dozens of businessmen personally interviewed in Germany, regardless of their industrial, trade, or financial origin, not a single criticism has been found of the type of “Leaders” placed in command. There is a great deal of complaint about individuals and policies, but there are uniformly the pleadings of minority groups who are being discriminated against, or else against the specific incidence of policies which economic facts compel them to endorse.

Further, the leadership has been entirely that of men enjoying the confidence of the business community. This holds for the Chambers of Industry and Commerce, the Provincial Economic Chambers, the various National, Economic, and Functional (or Trade) Groups, and the National Economic Chamber and its various subdivisions. The first Leader, Schmitt, was a well-known German business man, and thoroughly acceptable to the business community at large. The second Leader, Dr. Schacht, has been so completely acceptable, and his dicta so readily enforced throughout the country, that he is commonly known as the “economic dictator of Germany.” Under the leadership of these men, the appointment and removal of inferior “leaders” through the system has been, with minor exceptions, entirely to the satisfaction of the business communities affected. (p. 290).

He also describes how private industry, and privatization, were promoted against state industries.

The same picture holds for the relations between the National Economic Chamber and the organs of local government. As Frielinghaus has put it, “The new structure of economics recognizes no differences between public and private economic activity…” Not only are representatives of the various local governments to be found on both the national and regional organs of the National Economic Chamber, but it is even true that local government is co-ordinated to the end that economic activities pursued by them shall enjoy no non-economic advantages over private enterprise.

The literature on this point is perfectly explicit, being of a nature with which the general American public is familiar through numerous utterance of business leaders on the “dangers of government competition with private enterprise.” Under pressure of this sort the Reich government and many of its subsidiary bodies have begun to dispose of their properties to private enterprise, or to cease “competition” with private enterprise where no properties are at stake. Thus the Reich, the states, and the communes have already disposed of much of their holdings in the iron and steel industry notably the United Steel Works), coal, and electric power. Similarly, support is being withdrawn for loans to individuals wishing to construct private dwellings wherever private enterprise can possibly make any money out of the transactions. True, the government has been expanding its activities in some directions, but mainly where there is no talk of “competition with private enterprise,” and with an eye to providing business men with effective guarantees against losses. (pp. 191-2).

A little while ago I posted up a piece from Maoist Rebel News on YouTube, which also cited articles from economic history journals to show that both the Nazi and Italian Fascist regimes engaged in massive privatization programmes beyond those of other industrialised western nations at the time.

Brady also points that, while three quarters of the German electrical industry was state-owned, it was private businessmen who were placed in charge of it.

Nothing could show more clearly the intent of Nazi control in economic affairs than the make-up of the active management of this organization. Despite the fact that better than three-fourths of all German electric power is owned or controlled by public bodies, the directing heads of the National Electric Power Supply Federation are drawn almost exclusively from the ranks of private enterprise. Its first Board of Directors was presided over by two chairmen, both representative of private power companies: Hellmuth Otte, General Director of the Hamburg Electric Works, Inc. (controlled by the Siemens-Schuckjert combine, largest manufacturers of electric equipment and supplies in Germany), and Dr. Wilhelm Luhr, member of the Board of Directors of the Gesellschaft fur Elektrische Unternehmungen-Ludwig Lowe & Co. A.G. (the largest holding company in the private German electric-power industry, the company likewise controls several electrical supply manufacturing concerns).

This is very similar to the corporatist system in Britain and America, in which businesspeople have been appointed to government posts overseeing the economy. This has been done both by the Republicans and Democrats in America, and by the Tories and Blair’s New Labour over here. George Monbiot described the situation in Britain very thoroughly in his book, Captive State.

He also makes it very clear that Nazi economic planning is based very much on private enterprise, going back to a distinction made between private property for public use and socialized property in German law.

From what has been said above it is perfectly clear that “planned organization” should be understood not as social-economic planning in the socialist sense of the term, but as “business co-ordination” with a view to exercise of monopoly powers. There is nothing in the literature which permits a discerning reader any other interpretation. By the same token, the expression – interlarded through the endless stream of propaganda and explanatory newspapers, brochures, books, and reports-Gemeinnutz geht vor Eigennutz, requires transliteration into English patois in order to be understood properly. Gemein means “common,” or “public”, or “general”; nutz means “fruits,” or emoluments.” or “returns.” The expression Gemeinnutz as used by the Nazis, means “return to the community,” or, more precisely, “service to the community.’ Eigen on the other hand, means “individual” or “own.” Eignenutz thus means “returns to the individual,” or “profits”. The exact meaning of the whole expression is “services to the community before profits to the individual”; the American wording is “profits through service.”

This interpretation is in line with an old distinction, running back through several generations of German economic and business literature, between privatwirtschaft and Gemeinwirtschaft, on the one hand, and Gemeinwirtschaft and Sozialwirtschaft on the other. Privatwirtschaft has always been taken to mean an economy of private enterprise in the English, liberal, laissez-faire sense. Gemeinwirtschaft was used to mean a profits economy from the public point of view, or, in other words, a profit economy supplying a service tot he community. Sozialwirtschaft, on the contrary, has long meant socialization. All the Nazi literature emphasizes the present economic system as a Gemeinwirtschaft. (pp. 319-20).

It is thus very clear that the Nazi economy was very definitely capitalist. It celebrated the private businessman as a member of the economic and social elite, and promoted private enterprise and its leaders against state-owned industry, which it also privatized as far as possible. And it made very clear in law that the economy was a private enterprise supplying a public service and not a socialized economy.

Those who claim that Nazism was a form of socialism are wrong, and arguing so in order to try to discredit socialism and the Left through guilt by association. But the Nazis promotion of private enterprise, business interests and management also make it extremely similar to contemporary corporate capitalism, as advocated by the Republicans, Corporate Democrats, Tories and Blairite New Labour.

Co-determination and Workers in the Boardroom in Germany

April 18, 2014

Factory Elections

Elections for the Factory Council in Germany

I’ve posted up a few pieces about industrial democracy and worker’s control in Yugoslavia and in the former Soviet Union under Lenin. Capitalist West Germany also has a similar system of co-determination in which members of the workforce are represented in the boardroom in a system of factory councils, thus creating the ‘constitutional factory’.

The system is described in the book, Tatsachen Uber Deutschland: Die Bundesrepublik Deutschland (Facts about Germany – The Federal Republic of Germany’) (Munich: Bertelsmann 1985). This is my translation of some of the relevant passages.

…..

Human self-determination is indisputably valid as the foundation of our social order. It results from the constitutional guarantee of the right to the free development of the personality. It would contradict this image of self-determined people, to regard the worker merely as a component of a system of production, who is solely determined by the interests of capital. Starting from this basic thought, he far-reaching unity exists today that that the aims of the enterprise must be stamped with the interests of the working people, and that the workers’ democratic say in the matter must be heard, when the entrepreneur’s decisions, touch on their vital interests. It has been attempted to do justice to these demands and concede to the workers, legally secured, a considerable measure of co-determination in the factory.

The factory council law of 1920, that first created this possibility of setting up elected representatives of workers and employee in all factories, stood at the beginning of this development. The young Federal Germany made a great step in the direction of employee co-determination in 1951, when it set in force the so-called ‘Coal, Iron and Steel Co-Determination Law’, which granted employees in the large enterprises of the coal, iron and steel industries considerable rights to co-determination, as well as the co-staffing of the organs of management. The Factory Constitutional Law of 1952 provided the employees of nearly all industries co-determination rights in nearly all factories in social and personal matters, and a hearing with in economic decisions. The second factory constitutional law of 1972 brought substantial improvements, above all for the employees’ representatives. This was considerably reformed in the comprehensive co-determination law of 1976. With all these laws the idea of the ‘constitutional factory’, which still appeared as a utopian dream a few decades ago, becomes a reality in the Federal Republic of Germany. The Basic Law’s principle of the social state is filled with life in an important area.

The Factory Council

the most important arrangement for the representation of the employees’ interests in the factory is the factory council. It is elected by all employees over 18 years old. Foreign employees are also entitled to vote and be elected. Everyone entitled to vote can equally stand as a candidate, whether or not they belong to a union. In practice, however, and above all in the larger factories, the unions have a considerable influence in the composition of the candidate lists. The number of members of the factory council is determined by the size of the enterprise. Its term of office lasts three years. As an employer could be tempted to dismiss an ‘uncomfortable’ member of the factory council, the members of the factory councils enjoy a stronger level of protection from dismissal during their time in office and for a year afterwards. The members of the factory council normally practice their office outside of their professional work. Only in the larger factories must a member or several members of a factory council be exempted from their professional activities.

The officials, employees and workers of the Civil Service equally have a representation of their interests, the personal council, whose tasks and powers resemble those of the factory council.

The Rights of the Factory Council

The factory council has multiple rights, above all in social and personal matters. In some things it must be heard, in others it can co-operate, and in some particular matters it finally has a real right of co-determination. ‘Real’ co-determination means that the employer cannot make decisions without the agreement of the factory council. If they cannot come to terms, an agreement office makes the decision, put together from equal numbers of the representatives of employers and the factory council as well as an impartial president.

Without the agreement of the factory council, the firm’s management are not allowed, for example, to arrange any overtime, short-time work, control clocks or introduce other control equipment, issue contract or premium rules, and give notice to vacate company accommodation. The factory council can even compel vacated or newly created positions to be first advertised within the factory.

The factory council cannot stop the dismissal of a fellow worker. They must be heard before every dismissal, and have a right to reply within certain limits. If they reply and themselves make a complaint, they are to be employed until the tribunal’s decision. If the employer plans the dismissal of a large number of workers, they must inform the factory council in time. This then has the right to demand the drawing up a ‘social plan’, that ameliorates the negative aspects for those affected. For example, a settlement, or the costs of removal, would be paid to them.

Also, where the factory council only has a right to a hearing, it can very frequently achieve improvements for the workers through skilful negotiation. In practice the factory council and the employer only rarely stand opposed as irreconcilable opponents, but work together, as the law expressly demands – and strive for sensible compromise.

The individual employee, apart from their electoral rights to the factory council, has rights, which could be called the ‘Innerfactory Basic Rights’. They have the right above all to be informed of the type of job and the arrangements for the termination of work; to demand information on the remuneration of work and the calculation of wages; to inspect their personal acts; and to complain if they feel discriminated against or unjustly treated. In most cases the employee is allowed to draw on a member of the factory council.

Co-determination in Large Factories

The factory council has no influence on the economic management of the enterprise. It is above them only in having a certain compass to inform, and only that in factories with over 100 employees.

There is, however, economic co-determination in various forms in almost all big factories. In the German Federal Republic more than half of large enterprises are joint-stock companies. German joint-stock companies have two management premiums: the supervisory board as supervisory organ and the board of directors, which conducts current business. From 1951 onwards a third of the members of the supervisory board in every joint-stock company must be elected representatives of workers and employees. This rule is valid for small and medium joint-stock companies (up to 2,000 employees), and also today in certain other legal forms for enterprises with 500-2000 employees.

There are, however, two special co-determination regulations for big businesses. In the large enterprises of mining, iron and steel production, with over 1,000 employees the so-called Iron, Steel and Coal Co-determination Law has been applied since 1951. According to this law, one half of the supervisory board is occupied by representatives of the investors and the other by those of the employees respectively. Both sides must then agree on a further, neutral member. A work director must be a member of the board of directors as a fully-qualified member, who cannot be elected against the voices of the employees representatives in the supervisory board.

For the big businesses of the remaining industries, which have more than 2,000 employees, the general co-determination law of 1976 is valid. In this law, which encompasses around 500 enterprises in all branches of the economy with the exception of the coal, iron and steel industries, and the press, the regulations are more complicated. According to this, there is complete parity per capita between the sides of the shareholders and the employees. But in cases of a tied vote, the voice of the chairman decides, who cannot be elected against the wishes of the investors. Furthermore, at least one representative of the ‘managing employees’, meaning an employee with management functions, must belong to the supervisory board on the side of the workers. The unions would have preferred it, if the co-determination law for the coal, iron and steel industries, which has stood the test of time over three decades, would have been extended to the remaining large factories. But the same have succeeded with legislation, which sees it as a too sweeping limitation of the basic constitutional right to property. The employers’ federations are of the opinion, that in this form the law places too strongly places narrow limits on property rights, and raised a constitutional complaint. The Federal Constitutional Court referred the complaint back and declared that the Co-determination Law is consistent with the Basic Law. The co-determination of workers has proved to be a stabilising element for the economic and social order of Germany. This order depends not least on the readiness of all parties to working together more fairly. The possibility of active co-creation increases the workers’ and employees’ motivation to work and thereby strengthens the efficiency of German industry.

______________________

Composition of the Supervisory Board according to the Factory Constitutional Law

10:4 Investors to workers.

In the coal, iron and steel industry the proportion is 7:7 investors to workers with a neutral member.

According to the Co-determination Law of 1976

Investors to workers – 7:7 + 1 president with a deciding vote and 1 managing employee.

Forms of Co-determination and its Area of Validity

Co-determination after the law of 1976 – 4.5 million employees, large, joint-stock companies.

Coal, Iron and Steel Co-determination law – 0.6 million employees.

3rd Partnerships – 0.6 million, small joint-stock companies.

Interfactory Co-determination (Factory Constitution Law) 9.3 million, the remaining economy.

Interfactory Co-determination (Personal Representation Law) – 3.6 million, the Civil Service.

No co-determination – 3.4 million – small factories with less than 5 employees.

Rights of the Factory Council

Co-operation

Personal planning, dismissals, termination of employment, work arrangements, factory organisation, factory alterations, work protection.

Co-determination

Working time, principles of pay, holidays, social facilities, professional education, factory regulations, recruitment and promotion.

…..

This isn’t workers’ control, but it is a type of industrial democracy, giving the workers a voice in some of the decisions made by management concerning their pay and conditions. I don’t know if this legislation survived the administrations of Franz-Josef Strauss, Helmut Kohl or Gerhard Schroder, Germany’s answer to Tony Blair. Some of the functions of the factory council could be performed through a good trade union, if such things were still permitted in post-Thatcherite Britain. Nevertheless, it seems that German workers, at least the period from 1975 to the book’s publication a decade later, enjoyed a degree of legal protection and a presence in the boardroom that their British counterparts lacked. This is one lesson from our friends on the Continent, which we should learn, no matter what the narrow chauvinists in UKIP may shout to the contrary.