From C. 1998: ‘Firms Profit From a Happy Workforce’

I used to collect news clipping of anything interesting, usually about history, politics, art and the paranormal. I stopped years ago as they were starting to take up too much space, but I’ve still got scrapbooks full of them. I was going through a few of them last night, and I found some very interesting old news stories that are still very relevant today.

I don’t have a precise date or know which newspaper this article was published in, but the articles around it come from 1998 and many of them are from the Fail, so I would hazard a guess that’s where it came from. The article’s a demolition of the ‘macho management’ style favoured in the 1980s, when the boss would start the date by haranguing and humiliating his staff. The article shows that not only does this not work, it actually reduces profitability. The clip runs

Ranting bosses who leave their workers feeling resentful are literally costing their companies money, new research shows.

A team from Sheffield University established a direct link between profitability and happiness after questioning 5,000 employees at 42 British manufacturing firms.

They found that companies which were performing best were those which avoided aggressive management styles, made sure their staff were never bored and allowed them to feel they had a stake in the firm’s performance.

Research leader Malcolm Patterson said: “It appears that a happy workforce is a more productive workforce. It is a simple message to bosses, but backed up with hard evidence.”

My guess is that research today would also show that firms that have good working conditions and high pay are also more productive than low wage, exploitative sweatshops. And I’ve no doubt that one of the reasons British productivity has actually fallen is because people are generally more miserable because of low wages, long hours, job insecurity and the lack of a proper welfare state.

But these are all things that the Tories and the captains of industry hate and despise as attacks on their profitability and status, so they will continue making employment as harsh and exploitative as they can get away with.

No, Tweezer! It’s Not Labour that’s Attacking Investment, but Tory Privatisation

More lies from Theresa May, the lying head of a mendacious, corrupt, odious party. Mike put up another piece earlier this week commenting on a foam-flecked rant by Tweezer against the Labour party. She began this tirade by claiming that Labour had turned its back on investment. This was presumably out of fear of Labour’s very popular policies about renationalising the Health Service, the electricity industry and the railways.

But Labour hasn’t turned its back on investment. Far from it. Labour has proposed an investment bank for Britain – something that is recognised by many economists as being badly needed. It was one of Neil Kinnock’s policies in 1987, before he lost the election and decided that becoming ‘Tory lite’ was the winning electoral strategy.

The Korean economist, Ha-Joon Chang, who teaches at Cambridge, has pointed out that privatisation doesn’t work. Most of the British privatised industries were snapped up by foreign companies. And these companies, as he points out, aren’t interested in investing. We are there competitors. They are interested in acquiring our industries purely to make a profit for their countries, not ours. Mike pointed this out in his blog piece on the matter, stating that 10 of the 25 railway companies were owned by foreign interests, many of them nationalised. So nationalised industry is all right, according to Tweezer, so long as we don’t have it.

The same point is made by Stewart Lansley and Joanna Mack in their book, Breadline Britain: the Rise of Mass Poverty (Oneworld 2015). They write

The privatisation, from the 1980s, of the former publicly owned utilities is another example of the extractive process at work, and one that hs brought a huge bonanza for corporate and financial executives at the expense of staff, taxpayers and consumers. Seventy-two state-own enterprises we4re sold between 1983 and 1991 alone, with the political promise that the public-to-private transfer would raise efficiency, productivity and investment in the to the benefit of all. Yet such gains have proved elusive. With most of those who landed shares on privatisation selling up swiftly, the promised shareholding democracy failed to materialise. In the most comprehensive study of the British privatisation process, the Italian academic Massimo Florio, in his book The Great Divistiture, has concluded that privatisation failed to boost efficiency and has led to a ‘substantial regressive effect on the distribution of incomes and wealth in the United Kingdom’. Despite delivering little in the way of unproved performance, privatisation has brought great hikes in managerial pay, profits and shareholder returns paid for by staff lay-offs, the erosion of pay and security, taxpayer losses and higher prices.
(P. 195).

They then go on to discuss how privatisation has led to rising prices, especially in the electricity and water industries.

In most instances, privatisation has led to steady rises in bills, such as for energy and water. Electricity prices are estimated to be between ten and twenty per cent higher than they would have been without privatisation, contributing to the rise in fuel poverty of several years. Between 2002 and 2011, energy and water bills rose forty-five and twenty-one percent respectively in real terms, while median incomes stagnated and those of the poorest tenth fell by eleven percent. The winners have been largely a mix of executives and wealth investors, whole most of the costs – in job security, pay among the least well-skilled, and rising utility bills – have been borne by the poorest half of the population. ‘In this sense, privatisation was an integral part of a series of policies that created a social rift unequalled anywhere else in Europe’, Florio concluded.
(pp. 156-7)

They then go on to discuss the particular instance of the water industry.

Ten of the twenty-three privatised local and region water companies are now foreign owned with a further eight bought by private equity groups. In 2007 Thames Water was taken over by a private consortium of investors, mostly from overseas. Since then, as revealed in a study by John Allen and Michael Pryke at the Open University, the consortium has engineered the company’s finances to ensure that dividends to investors have exceeded net profits paid for by borrowing, a practice now common across the industry. By offsetting interest charges on the loan, the company will pay no corporation tax for the next five to six years. As the academics concluded: ‘A mound of leveraged debt has been used to benefit investors at the expense of households and their rising water bills.’
(P. 157).

They also point out that Britain’s pro-privatisation policy is in market contrast to that of other nations in the EU and America.

It is a similar story across other privatised sectors from the railways to care homes. The fixation with private ownership tis also now increasingly out of step with other countries, which have been unwinding their own privatisation programmes in response to the way the utilities have been exploited for private gain. Eighty-six cities – throughout the US and across Europe – have taken water back into a form of public ownership.
(Pp. 157-8)

Even in America, where foreign investors are not allowed to take over utility companies, privatisation has not brought greater investment into these companies, and particularly the electricity industry, as the American author of Zombie Economics points out.

Lansley and Mack then go on to discuss the noxious case of the Private Equity Firms, which bought up care homes as a nice little investment. Their debt manipulation shenanigans caused many of these to collapse.

So when Tweezer went off on her rant against Labour the other day, this is what she was really defending: the exploitation of British consumers and taxpayers by foreign investors; management and shareholders boosting their pay and dividends by raising prices, and squeezing their workers as much as possible, while dodging tax.

Privatisation isn’t working. Let’s go back to Atlee and nationalise the utilities. And kick out Theresa, the Tories and their lies.

Hammond Blames the Disabled for Fall in Productivity

This is another outrageous statement. But it really doesn’t come as a surprise, as it was mouthed by the current Chancellor of the Exchequer, Philip Hammond, a poisonous incompetent amongst a government of poisonous incompetents.

When Hammond was asked about the fall in British productivity, he responded by blaming it on the inclusion of various marginal groups in the workforce, such as the disabled. Mike over at Vox Political has posted a piece commenting on this stupid, insensitive and mendacious reply. He points out that if productivity has fallen, it might have something to do with a lack of motivation coming from insultingly low pay, poor nutrition, overwork, tiredness and anxiety due to zero hours contracts to care about profits or productivity.

He also points out that, thanks to May’s government fully supporting poor wages and precarity, employers now find it cheaper to employ people under these wretched conditions than invest in new equipment.

Mike also points out that Hammond’s comments follow the usual Tory line of blaming and demonising the disabled. But this doesn’t mean that they’re coming for them to throw them in the gas ovens just yet. No, they’re just content to let the stress of dealing with the benefit system either worsen their mental health, or force them to commit suicide. All while denying that people are being driven to take their own lives by the stress of their benefit reforms.

This is despite suicide notes left behind by those who have committed suicide, explicitly saying that this is why they have been reduced to taking their own lives.

And Mike also rightly notes how DWP staff are asking people with suicidal tendencies why they haven’t taken their own lives. Which sounds like a question from the infamous ‘Nudge’ Unit, the psychological manipulation department set up to manoeuvre people’s thinking so that they come to the decision the authorities want.

Mike also quotes Labour’s Debbie Abrahams, who has condemned Hammond’s comments, pointing out that disabled people are paying the price for the government’s failed austerity policy. This has included scrapping the schemes to get disabled people into the workforce. She states that we should be doing more to get disabled people into work, and definitely not denigrate their contributions. She went on to demand an apology from Hammond.

Abrahams also points out the contradiction that’s also hidden in Hammond’s statement. He states that there are more disabled people in the workforce, which we should be proud of, but the Tories have actually cut the programmes to get the disabled into work, as well as scrapping their manifesto pledge to halve the gap between the employment rates for disabled and able people.

You can’t have it both ways, so one way or another, Hammond is clearly lying.

http://voxpoliticalonline.com/2017/12/07/chancellor-blames-fall-in-uk-productivity-on-disabled-people-in-the-workforce/

Hammond’s comment is disgusting, but it is more or less standard Tory replies. The Tories’ entire economic strategy is to prolong the deficit crisis as long as possible, so they have an excuse for cutting welfare benefits, privatising whatever remains of the state sector, including education, and removing workers’ rights. All to create a cowed, beaten workforce that will accept starvation wages, for the benefit of ultra-rich profiteers, including the banksters, hedge fund managers and multinational corporations that are currently keeping their wretched party afloat.

At the same time, they desperately need a scapegoat. Usually this function is filled by the unions, who provide them with an excuse for taking away more workers’ rights while at the same time trying to dismember the Labour party by attacking its foundations in the trade union movement. But as no-one’s currently on strike, they can’t do it.

So Spreadsheet Phil has to blame the disabled.

As with everything else the Tories utter, a few moment’s thought can show that the reality may be the very opposite of what they’re saying. Let’s examine Hammond’s statement that the fall in productivity is due to too many disabled people in the workforce. Quite apart from the fact that, as Mike has pointed out, the Tories have actually cut initiatives to stop disabled people finding work, you can find reasons how disabled people in the workforce may actually be a boost to productivity.

Firstly, there’s the obvious point that just because a person suffers from one type of disability does not mean that they are totally incapable of work. One of the blokes I met years ago was a computer whizzkid, who was totally paralysed from the neck down. But he was very, very good at his job, and was earning a very high salary for his skill. Which he clearly earned and deserved. Despite the problems of dealing with this gent’s handicap, his firm clearly found it well worth their while to employ him. And he wasn’t the only one. I’ve heard of other, physically disabled people with mobility problems, who have also pursued successful careers in computing. Clearly, these peeps are anything but unproductive individuals.

Disabled people also act to stimulate innovation. I blogged a little while ago about how the robotics department at the University of the West of England in Bristol had set up a company to manufacture and sell their artificial hands, which are designed specifically for children. Never mind the hype and bullsh*t about self-driving cars: this is precisely the type of robotics we need. This technology is making it possible for disabled children and their parents to have more normal, better lives. It is positively enabling them, giving them the ability to do things that they otherwise couldn’t do, or would find more difficult. The technology is brilliant, and I’m sure will have other applications as well. And its effect on the children is liberating and empowering. If adults with similar disabilities also have access to improved artificial limbs, then you can expect that their productivity will also improve, as well as simply quality of life.

And this can be said of almost any technical innovation that improves the lives of disabled people, and gives them more independence and freedom, if only a little.

Then there’s the fact that disabled people, like everyone else, contribute to the economy. They have to eat, pay bills and the rent or mortgage. Getting disabled people into proper paid employment, rather than just subsisting on whatever benefits the DWP deigns to throw their way, means that they have surplus cash to spend. Which means that their purchasing power also pumps more money into the economy, and encourages manufacturers to produce more.

And the disabled have also contributed to British culture. Remember Evelyn Glennie, a drummer with one of our orchestras? She’s actually deaf, but that hasn’t prevented her from excelling at her instrument. And those of us, who were kids in the 1970s will remember the brilliant madness that was Vision On. This was a show for deaf children, so that the dialogue was signed as well as spoken. Much of it was silent, accompanied only by music. Among those on the show were Sylvester McCoy as a mad professor, a couple of young animators, who went on to form Aardman Animations, and the artistic genius that was Tony Hart. It also launched the career of another star, at least down here in Bristol: Morph, the mischievous plasticene man, who acted as a kind of comic foil to Hart’s artistic endeavours. The show brought joy to millions of kids, both deaf and hearing, and part of its legacy has been Wallace and Gromit, Creature Comforts and the other films to come out of Aardman. Vision On is remarkable because, by taking the job seriously and doing it well, it became more than a programme aimed at children with a particular type of disability, and was a massive source of TV creativity.

This makes me wonder about the possible potential out there for other programmes aimed at or with a disable audience, that could also do the same today.

But this is all too much for their Tories. Their whole philosophy is based around grinding their social inferiors down, and then blaming them for their poverty.

But this also shows how desperate the Tories are getting, and how they’re running out of plausible excuses.

Once upon a time, they would simply have blamed British workers, claiming that we’re too lazy, work shorter hours and go on strike more than our French or German competitors. But they can’t do that, as it’s notorious that we work far longer hours than them. In fact, the Germans even make jokes about how we work ourselves into the ground, but nothing in this country still works properly. So that excuse simply won’t do. You still hear though, occasionally, from the odd CEO windbag, who feels like giving the rest of us the benefit of his decades of ignorance. But it’s very definitely not true, and Hammond knows it. Thus he’s been reduced to blaming the disabled.

I’m sick of him, sick of this government, and sick of their lies and bullying – of the disabled and of ordinary working people. Debbie Abrahams is right: Hammond should apologise. And then I want him and his vile government cleaned out like the parasites they are.

Fabian Pamphlet on the Future of Industrial Democracy: Part 2

This is the second part of my article on William McCarthy’s Fabian pamphlet, The Future of Industrial Democracy, published in 1988.

The section on Ideas in chapter 3: Composition and Principles of Representation runs as follows

At this stage all one can do is propose a number of suggestions and options for further consideration by the Movement. I therefore advance the following cockshy in an attempt to start a debate. No doubt it fails to grapple with many of the problems and oversimplifies others. It should be regarded as written with the lightest of pencils. Three ideas come to mind.

First, why not retain the Bullock notion of a universal enabling ballot, to test whether workers in a given firm or establishment wish to exercise their statutory rights to participation? As the Bullock Report recognised unions would retain the right to “trigger” such a ballot in the groups they represented. Well-intentioned employers, in association with recognised unions, could agree to recommend the establishment of such statutory councils; but there would be a need to be a ballot of all workers involved.

Where a majority of workers voting favoured the establishment of participative rights the employer would be under a legal obligation to establish statutory joint councils. The composition of the workers’ side would be broadly defined by statute, as would be their powers and right. Management would be free to decide its own representatives who served on the council, but the statute would specify the obligations of the employee.

Second, why not let worker representatives emerge by means of a universal secret ballot-open to both unionists and non-unionists-with recognised unions enjoying certain prescribed rights of nomination? Here there a considerable number of European examples to choose from. In France and Luxembourg as I understand it, only unions can nominate for the “first round” of elections. If less than 50 per cent of the electorate vote there is a second election and any worker can nominate. In Belgium unions have an exclusive right to nominate “lists” of candidates where they have representative rights; non-unionists may make nominations elsewhere. Alternatively, there are systems where a given number of workers can nominate if unions fail to provide sufficient nominations. In the Netherlands, for example, any thirty workers can nominate in the larger enterprises, if unions fail to do so. In Germany any three workers can put up a candidate. For myself I favour certain limited rights of nomination in cases where unions are recognised. This is the area where the spectre of “company unionism” is most easily perceived and rightly resisted.

Third, why not specify that in areas where unions can demonstrate that they have members but no recognition any “appropriate” union has the right to make nominations? This need not prevent a given number of workers from enjoying analogous rights.

The section on Legal Framework also says

The best possible combination of nomination and electoral arrangements needs further thought than I can give it as this point. What I believe is that given suitable arrangements it would be possible both to safeguard the position of established unions and create conditions favourable to trade union growth; yet it would not be necessary to insist on a quasi-monopoly of representative rights confined to recognised unions. I suggest that after further debate within the Movement, Labour should propose an enabling statute which provides for joint participation councils in all private firms employing more than 500. The figure of 500 is itself open to debate. But in this way, I estimate it would be possible to show that the intention was to provide participation opportunities for something like 50 per cent of the private sector labour force. A worthwhile beginning to further advance, based on experience and proven worth. Where it was evident that a company employing more than 500 was divided into more than one “establishment” or was composed of a group of companies under the overall control of a “holding company” or its equivalent, power would exist to demand additional joint councils, with rights related to decisions taken at appropriate management levels.

Consideration would need to be given to the creation of a similar framework of rights in appropriate parts of the public sector of employment. So far as I can see there is no good reason why workers in the nationalised industries, national and local government or the NHS should be deprived of statutory rights to participate in management decisions affecting their working lives. No doubt the representation of “management” will pose different problems, the appropriate levels of joint councils will need to be tailor-made to fit different parts of the public sector and there will be different problems of confidentiality. But I doubt if the needs of workers and the benefits to both employers and the public will be found to be all that different.

It will be said that this cockshy for further consideration is superficial, with several critical problems and difficulties left unresolved. Those who like its general drift, but feel fear that the sceptics may have a case, could not do better than look again at some of the less publicised parts of the Bullock Report. One of the more lasting services performed by the Committee of Inquiry was that it set out to explore and overcome almost all the practical objections that could be raised to any form of statutorily based workers’ participation (see Bullock op. cit. chapters 11 and 12).

For this reason its says wise and relevant things about the need to avoid allowing all kinds of exceptions to a participation law, based on the alleged differences that are said to exist in banks, shipping lines, building firms and other parts of the private sector where employers would like to escape the effect of legislation. It also provides a clear account of the problem of “confidentiality” and how best to deal with it. It makes a convincing case for an Industrial Democracy Commission (IDC) to administer and apply the legislation and monitor its effects in an objective and impartial way. (In our case an additional essential task for the IDC would be to decide when multi-level joint councils were justified in the case of a particular firm or group of firms.) Above all, perhaps, it provides a guide through the complexities of company structure-with its spider’s web of holding boards, subsidiary boards, parent companies, inter-locking “subsidiaries” and “intermediate” organisations. It even follows these labyrinth paths into the upper reaches of British and foreign-based multi-nationals.

Of course the Committee’s primary objective in tracing out the lines of corporate responsibility and influence was to decide how to apply its own benchmark of “2,000 or more employees”. After much consideration they decided that this should apply “…to the ultimate holding company of a group which in toto employs 2,000 or more people in the United Kingdom, as well as to any individual company which employs 2,000 or more people in the United Kingdom, whether or not it is part of a group” (Bullock, op. cit. p. 132).

With appropriate emendation to fit the lower thresholds advanced in this pamphlet the Bullock formula seems to me to provide the essence of the right approach.

It is also important to remember that the legal framework advanced above would its place alongside Labour’s overall programme for extending rights at work-eg the restoration of trade union rights, improved rights of recognition and an expansion of individual rights against employers in cases of unfair dismissal and discrimination. All British workers would gain from such a programme and good employers should have nothing to fear.

The proposals should also be seen against the background of the first report of the Labour Party National Executive Committee’s People at Work Policy Review Group, with its emphasis on the need for a new training initiative and action to raise economic efficiency and the quality of life at work.

A legal framework of the kind envisaged here would provide trade unions and trade unionists with unrivalled opportunities. In areas where unions were recognised union representatives would find it easier to service members and influence the decisions of management. In areas where non-unionism is now the norm there would be greater incentives to organise and recruit; it would be easier to demonstrate what unionisation could do and easier to move to a situation in which recognition became a natural development. Of course, unions and their workplace representatives would need to become experts in explaining and using the rights embodied in the new framework. There would be a need for professional and prompt guidance and support in local and national union offices.

Unions should also find it easier to tackle their media image as negative and reactionary forces-opposed to the narrow “consumerism” peddled by the Government and its allies: engaged in a perpetual battle against management-inspired improvements in productivity and efficiency. In time, and before very long, it should be possible to demonstrate the contribution which can be made by the right kind of alliance between management, workers and unions. Benighted market men and women can be relied upon to misunderstand and misrepresent any teething problems and difficulties that arise; but for trade unionists of all sorts and persuasions there will be very little to lose and a great deal to gain.

This article will conclude in Part 3, which will discuss the pamphlet’s last chapter, Summary and Conclusions.

Fabian Pamphlet on Workers’ Control in Yugoslavia: Part 2

Continued from Part 1.

The Role of the Trade Unions

It is usually assumed that in a capitalist economy the Trade Union movement fulfills a different and essentially more democratic role than the unions in a country such as Yugoslavia. It is said that by remaining independent of management and government the unions provide the essential element in any democracy, that of opposition. This has always been one of the stumbling blocks which any advocate of workers’ control must encounter. An understanding of the role of our own trade union movement is a necessary first step towards working out a programme for democratising industry which does not fall foul of this traditional objection. This understanding may be furthered by an appreciation of the position of trade unions in other countries where social systems are different. In Britain it may well be that the trade unions become more and more committed to the status quo in industry, so their opposition function is weakened. The respect for national collective agreements, the support of the leadership for the current productivity drive, the discouragement of unofficial strike action, the rejection of co-ordinated industrial action to break the pay pause, and finally the decision to join the NEDC suggest that the unions are moving towards the position of partners in a managerial society.

The simple distinction between free trade unionism in a capitalist society, and trade unions in a communist state which become organs for the implementation of state policy, becomes increasingly blurred. We should think instead of a spectrum of relative degrees of independence from the state, ranging from the Russian trade unions at one extreme, through Yugoslav, Scandinavian and Dutch, to the British and American movements at the other, with perhaps the Communist Unions of France and Italy as the least committed to the state. The recognition of this trend does not imply advocacy of a general strike mentality over the pay pause, for example, but we need a more honest recognition of what is taking place. We should admit first that it is inevitable that the trade unions will move in the direction of close co-operation with government, and towards a ‘national interest’ point of view. As this trend continues, the worker is faced with the growing prospect of an alliance between government, employers and unions. In this situation union leaders no longer express the independent sectional and industrial aspirations of their members. Partly because of this, the role of the voluntary rank and file element in trade union government appears to be diminishing and its functions are being superseded by paid officials. The unions are becoming agencies run for their members and not by them.

With the weakening of the elements of opposition and participation there is a need to seek alternative means by which employees can express themselves in the government of industry. This need arises not only from a consideration of industrial democracy, but also of industrial efficiency. Appeals for increased industrial production, such as British Productivity Year, evoke slight response because they are based on an assumption of team spirit and equal partnership which is excluded by the very nature of social relationships in a private enterprise economy. Yugoslav experience strongly suggests that increased productivity is one of the results of their form of industrial democracy. However if democratisation in industry is advocated solely on grounds of higher productivity, it will be received with suspicion. The question would not be how much power and control can we give to democratic forms of management, but rather how small a concession will be necessary in the interests of productivity. Such a path would reproduce the history of progressive disillusion which has befallen Joint Consultation. Thus the idealist exponent of workers’ control may claim to solve must fully the economic problem of incentive.

In Britain, advocates of workers’ control have traditionally thought in terms of Trade Union management of industry. Efforts in this direction have always ended in a blind alley, since the objection that this involves a dual loyalty for the union is a valid one. As we have seen, the Yugoslav system does not involve Trade Unions in the direct management of the Enterprise. It suggests not only a new role for the Unions, but also the practical constitutional forms for the management of the firm by its employees.

The role of the unions in such a system is that of a mass social institution representing the wider national interests of the workers and tackling problems such as the overall levels of incomes and income structure, labour productivity etc. As we have suggested, there is already a tendency for British unions to assume such a role, and the doubts which we have raised about the desirability of this trend would be dispelled if the unions were operating within the framework of an industrial democracy. If workers had legally guaranteed rights of management then the need for the union to be an instrument of opposition is weakened. However, unions could still continue to protect the interests of their members by taking up grievances on behalf of groups and individuals who are in dispute with the elected management bodies. They should certainly seek to influence the decisions and activities of management bodies, but should not be tied to them in an institutional sense.

Workers Democracy in Britain

In considering the relevance of the Yugoslav model to British conditions, two objections may arise. The First concerns the compatibility of Industrial democracy and the private ownership of industry. Does it not challenge the very origins of power which are possessed by the managers of private enterprise firms? Is it not desirable for the Labour movement to give much closer attention to the possibility of introducing experimental forms of workers’ control within existing nationalised industry. This would demonstrate the practicability of the method and point a way to the fully democratic society at which the socialist movement aims.

The second objection is more difficult to counter. Yugoslavia is a one party state. is it likely that in a multi-party state, industrial democracy could be introduced with any guarantee of its permanence? Would not the anti-socialist forces exert such pressure that the system was undermined whilst it was being introduced, and abolished at the first opportunity presented by the return of a Conservative government? It is probably true in Yugoslavia that the permission of opposition views and organisations could generate counter-revolutionary forces which would seriously retard the evolution of the system. The government and the Party clearly fear this. Thus after flirting with Djilas’ heresies, which included the advocacy of a second – though socialist – party, the leadership decided against taking the risk. This is the point at which Yugoslav experience ceases to be helpful to us.

We should not therefore assume that the introduction of industrial democracy in the British context is impracticable. There are signs that unease concerning status at work has penetrated through to the political arena. Liberal party references to ‘syndicalism’ and the long-awaited Conservative Industrial Charter are manifestations of this. These schemes relate to the improvement of the position of workers within the present hierarchical framework, and do not tackle the root of the problem. We would expect that the early demonstration of the viability of a system of democratic control within the nationalised industries would generate enthusiasm for the idea and lead to demands for its extension. The British political system certainly restricts the speed of change, but a change which has become truly popular is difficult to reverse (e.g. The National Health Service). We believe that the Labour Party could, by taking the first steps towards democracy within nationalised industry, transform what has been an electoral embarrassment and a millstone into its biggest asset.

See Part 3 for my own conclusions.

In Defence of Nationalised Industry

Since the 1970s, nationalisation has had a bad reputation, caused by the inefficiency, poor performance and appalling quality of some of its products. The classic example of this was British Leyland, hit by a long series of strikes, producing cars of a poorer workmanship and much less attractive than its foreign, increasingly Japanese, rivals. Yet the authors of Socialist Enterprise: Reclaiming the Economy, Diana Gilhespy, Ken Jones, Tony Manwaring, Henry Neuberger and Adam Sharples show that in many cases this images is grossly unfair. They argue

The case for public ownership is as powerful now as it has ever been – just as it has never been more urgent to rethink the priorities for public ownership, the methods of achieving it, the accountability and internal structure of publicly owned companies, and above all, their responsiveness to consumer and community needs. Publicly owned companies should be a model for socialism in practice. Unfortunately, for many people, that is just what they have become: unresponsive, often inefficient and often just as brutal in cutting jobs as private sector companies.

In many ways, this public image is, of course, grossly unfair. Nationalised industries are major investors: over the past ten years they have invested three times as much-for every worker employed – as firms in the private sector; and investment per unit of output has been twice as high. Moreover, companies such as BP, British Aerospace, BL, British Steel and Rolls Royce are among Britain’s top export earners. Nationalised industries have also been highly profitable in recent years. Their productivity record has been impressive, outstripping the private sector. Without public enterprise Britain would have had no domestically owned company in sectors such as motor vehicles, aero engines, shipbuilding, microchips and computers.

The Tory government privatisation programme, on the other hand, means that only the most vulnerable companies starved of investment finance will be left in the public sector. Profits will increasingly reflect the abuse of monopoly powers, rather than the efficiency of the company, and the Government’s obsessive desire to cut public borrowing. These factors are, however, unlikely to win much sympathy for public enterprise. Popular opinion may not favour further privatisation but there is no positive desire for an extension of public ownership. This reflects a deep seated lack of confidence in publicly owned companies which predates the election of the Conservative government in 1979.

All of which is true. This was written in 1986, and after Thatcher privatised the nationalised industries we largely do not have domestic firms producing cars, aero engines and ships. And the sale of some industries to foreign investors was quite deliberate, like the helicopter company Westland and the defence technology company QinetiQ to the Americans. Britain’s economy has suffered, as well as her wider defence infrastructure.

As for public opinion towards nationalised industry, this is not as low as may have been the case when this was written. People emphatically do not want further industries sold off. This is most obvious in the case of the NHS, as two reports by the Conservative party have shown. The I yesterday reported that the people using the East Coast railway line do not want to see it privatised. Mike over at Vox Political has presented the statistics showing that most British people still support the public ownership of the utilities.

There is clearly a large number of people, who support traditional, ‘old’ Labour-style mixed economy. They are, however, ignored by all three of the main parties. Their voice, particularly in defence of the NHS, needs to be heard.